Scatec ASA — Investor Presentation 2015

Jul 29, 2015

Second quarter 2015

Raymond Carlsen, CEO Mikkel Tørud, CFO Oslo, July 29, 2015

Our values

Predictable Driving results Change makers Working together

Disclaimer

The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated ('relevant persons'). Any person who is not a relevant person should not rely, act or make assessment on the basis of this presentation or anything included therein.

The following presentation may include information related to investments made and key commercial terms thereof, including future returns. Such information cannot be relied upon as a guide to the future performance of such investments. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions. This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Scatec Solar ASA or any company within the Scatec Solar Group. This presentation contains statements regarding the future in connection with the Scatec Solar Group's growth initiatives, profit figures, outlook, strategies and objectives as well as forward looking statements and any such information or forward-looking statements regarding the future and/or the Scatec Solar Group's expectations are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements.

Agenda

• Operational review
• Financial review
• Outlook

Operational review

Copyright: Scatec Solar ASA www.scatecsolar.com • post@scatecsolar.com

Strong growth in pipeline and Agua Fria completed

• Revenues of NOK 205 million, EBITDA of NOK 146 million and net profit of NOK 21 million
• Scatec Solar's proportionate share of cash flow to equity reached NOK 71 million
• Backlog increased by 33 MW to 299 MW
• Pipeline increased by gross 747 MW to 1,172 MW
• Total investments of NOK 1,159 million across 207 MW under construction
• The 60 MW Agua Fria project reached mechanical completion and will start production in the third quarter 2015

The 60 MW Agua Fria plant in Honduras

Construction driving increased cash generation

Q2'15 cash flow to SSO equity:

• Power Production and O&M cash flow of NOK 36 million
• D&C cash flow driven by the near completion of the Agua Fria plant
• Corporate cost fairly stable

Project development

Solid progress trough the project funnel

426 MW

IN OPERATION / UNDER CONSTRUCTION

33 MW added to the backlog since Q1 reporting

Project	Capacity, MW		Target construction start	SSO Ownership	Comment
South Africa		258	Q1 2017	42%	Co-investment with Norfund Local Trust to own 40% - Trust to be funded by SSO and Norfund
Waihonu, Hawaii		8	Q4 2015	49%	Sales process initiated
Segou, Mali		33	Q1 2016	50%	Co-investment with IFC and local partner
Sum		299
Copyright: Scatec Solar ASA www.scatecsolar.com • post@scatecsolar.com		New since Q1 reporting			8

Gross 747 MW added to pipeline since Q1 reporting

Project	Capacity, MW		Target construction start	Comment
East Africa	88 (+53)		2016	Co-development with Norfund in Mozambique and Kenya
West Africa	57		2016	Co-development with IFC. 33 MW Mali moved to backlog
USA	200		2016	Realization strategy under evaluation
Latin America	83		2016	Honduras with Norfund and Mexico with local partner
Egypt		250 (+200)	2016	One SSO controlled project and participation in four others
Pakistan		150	2016	Co-development with Nizam Energy of 3x50 MWp
South Africa		344	2018	Four new projects secured for next bidding round
Sum	425	747 1,172
		New since Q1 reporting

Scatec Solar establishing a solid position in Egypt

• Egypt target to more than double its electricity capacity from renewable sources (to 20%) by year 2022
• A Feed in Tariff (FiT) program has been launched for 4,300 MW of Solar and Wind by 2017 and further 9,000 MW of solar planned until 2022
• Scatec Solar was one of the first to be awarded a 50 MW (AC) project in the Ben Ban area of Egypt
• Scatec Solar additionally has secured participation in further 4 x 50 MW (AC) projects as an equity investor, EPC provider and O&M contractor
• All projects will receive a PPA tariff of 14.3 USDc/kWh
• Target PPA signing in 2H 2015 and target financial close and construction start in 1H 2016

Financial review

Copyright: Scatec Solar ASA www.scatecsolar.com • post@scatecsolar.com

Consolidated financials

Financials impacted by normal seasonal effects

• Revenues and EBITDA reduction from Q1 affected by lower production volumes
• Q2 revenues impacted by NOK 20 million sale of UK project portfolio with a marginal EBITDA impact

Production affected by winter in South Africa

• Production was affected by winter in South Africa and by five percent lower irradiation than normal in the quarter
• Plant availability remained high during the quarter

Consolidated revenues & EBITDA (NOKm)

O&M contracts taking full effect

• Quarter on quarter increase in revenues and EBITDA based on increased overperformance revenues
• Overperformance revenues/bonus profit sharing based on plant performance irrespective of irradiation
• O&M contracts covering 236 MW, of which 17 MW for third parties

Consolidated revenues & EBITDA (NOKm)

Development & Construction

Agua Fria nearly completed – Jordan well under way

• D&C revenues and margins reflect project development and power plant construction activities
• Development revenues of NOK 28 million for sale of UK projects and financial close of EJRE/GLAE in Jordan
• Construction revenues of NOK 564 million mainly driven by solid progress of Agua Fria
• Underlying gross margin within guidance but will vary from quarter to quarter

Consolidated revenues & EBITDA (NOKm)

Stable long term cash flow generation

Q2'15 - NOK million	Power Production	O&M	D&C	Corporate	Total	Elim.	Consolidated
Revenues	184.3	15.8	596.4	1.5	797.9	-593.1	204.8
EBITDA	158.0	10.0	53.3	-7.1	214.2	-68.0	146.2
Interest expenses	-82.4				-82.4
Loan repayment	-21.2				-21.2
Tax	-4.9	-2.6	-14.2	2.0	-19.7
Total cash flow to equity*:	49.4	7.4	39.2	-5.1	90.9
SSO share of CF to equity*:	29.2	7.4	39.2	-5.1	70.6

• Consolidated revenues and gross profit mainly represent value creation in the Power Production segment
• O&M, D&C and Corporate gross profit are internal to the group and hence eliminated

Total investments of NOK 1,159 million in Q2

4 738

784

1 416

0

• Cash position of NOK 1,003 million of which NOK 223 million free cash
• SSO equity investments of NOK 203 million in Q2'15
• All non-current interest bearing liabilities represent non-recourse project financing
• Eliminated D&C margin reduces asset values in the balance sheet leads to;
• Lower book equity value
• Reduced depreciation over time

Non-current liabilities Current liabilities Equity Non-current assets Current assets

Assets Equity & Liabilities Assets Equity & Liabilities

Outlook

Copyright: Scatec Solar ASA www.scatecsolar.com • post@scatecsolar.com

Significant opportunities for further growth

• Target to own gross 750 MW by end of 2016
• 426 MW in operation and under construction
• 299 MW in project backlog
• 1,172 MW in project pipeline
• A solid platform for increased growth in 2016 and beyond
• To fund accelerated growth, alternatives for accessing debt at the corporate level is being evaluated
• Annual cash flow to SSO equity of NOK 140-160 million from 219 MW in operation (PP and O&M)
• 15-20% gross margin from Development and Construction
• Target average equity IRR of 15% nominal after tax on power plant investments.
• Q3'15 production target of 115,000 MWh

The 60 MW Agua Fria plant in Honduras

Thank you

Our values Predictable Driving results Change makers Working together

Consolidated profit & loss

(NOK million)	Q2 15	Q1 15	Q2 14	FY 2014
Total revenues	204.8	224.8	92.7	476.4
Gross profit	187.3	224.8	91.5	471.3
EBITDA	146.2	177.7	52.0	292.9
Depreciation, amortization and impairment	-38.1	-38.9	-16.7	-101.9
Operating profit	108.1	138.8	35.3	191.0
Interest, other financial income Interest, other financial expenses Foreign exchange gain/(loss) Net financial expenses	15.8 -95.3 1.0 -78.5	12.9 -101.1 22.2 -66.0	8.3 -36.1 23.8 -3.9	54.8 -248.6 62.3 -131.5
Profit before income tax	29.6	72.8	31.3	59.6
Income tax (expense)/benefit Profit/(loss) for the period	-8.3 21.3	-25.8 47.0	-4.9 26.4	-11.1 48.5
Profit/(loss) attributable to:
Equity holders of the parent	18.6	19.5	8.2	-17.9
Non -controlling interests	2.7	27.5	18.3	66.4
Basic and diluted EPS (NOK)	0.20	0.21	0.13	-0.25

Consolidated cash flow statement

(NOK million)	Q2 15	Q1 15	Q2 14	FY 2014
Net cash flow from operations	102.7	456.5	1.5	-96.5
Net cash flow from investments	-1,142.8	-685.2	-255.4	-909.8
Net cash flow from financing	750.7	453.2	178.6	972.0
Net increase/(decrease) in cash and cash equivalents	--289.4	224.5	-75.2	-34.3
Effect of exchange rate changes on cash and cash equivavelents	-2.2	20.5	23.2	58.0
Cash and cash equivalents at beginning of the period	1,294.1	1,049.1	971.3	1,025.4
Cash and cash equivalents at end of the period	1,002.5	1,294.1	919.3	1,049.1

SSO's profit normally impacted by growth investments

• Scatec Solar is investing early phase project development and construction as well as corporate functions that impacts SSO's share of net profit
• However these investments pays off through access to attractive projects and significant cash generation

Second quarter (NOKm)	Consolidated	SSO prop. share	%
Total revenues	204.8	124.2	61 %
Cost of sales & opex	-58.6	-56.7	97 %
EBITDA	146.2	67.5	46 %
D&A & Impairments	-38.1	-13.4	35 %
EBIT	108.1	54.1	50 %
Net financials & tax	-86.8	-35.5	41 %
Net profit	21.3	18.6	87 %

Production affected by winter in South Africa

• Production affected by winter in South Africa and by five percent lower irradiation than normal in the quarter

• Plant availability remained high during the quarter

Power Production (MWh)

(NOK million)	Czech Republic	Kalkbult	Linde	Dreunberg	ASYV	Segment overhead	Total segment	SSO prop. share
SSO shareholding	100%	39%	39%	39%	43%	-	-	-
Revenues	31.8	67.2	27.7	49.9	6.3	1.3	184.3	92.2
OPEX	-2.2	-8.9	-4.9	-6.9	-0.9	-2.4	-26.2	-13.0
EBITDA	29.7	58.3	22.8	43.0	5.4	-1.1	158.1	79.2
Net interest expenses	-5.0	-30.1	-14.9	-30.3	-2.9	0.7	-82.4	-34.9
Normalised loan repayments	-4.9	-3.7	-6.5	-4.5	-1.7	-	-21.2	11.3
Cash flow to equity*	16.6	21.3	1.7	9.4	0.7	-0.2	49.4	29.2

* Cash flow to equity: is EBITDA less normalised (i.e. average over the calendar year) loan and interest repayments, less normalised income tax payments.

	Power Production								D&C, O&M,
(NOK million)	Czech Republic	Kalkbult	Linde	Dreunberg	ASYV	Red Hills	Agua Fria	Oryx	EJRE/ GLAE	Corporate & Eliminations*	Consolidated
Project equity	185.0	349.0	216.9	381.3	23.4	249.0	293.6	60.4	249.8	-592.3	1,415.9
Total assets	607.8	1,467.2	844.7	1,611.2	188.2	1,227.1	970.2	132.5	268.0	-379.8	6,937.1
PP&E*	518.0	1,235.3	674.2	1,331.4	161.5	1,214.2	808.0	91.8	101.2	-1,199.2	4,936.6
Cash**	38.4	180.6	93.0	132.8	19.9	0.7	162.0	9.4	-	365.8	1,002.5
Gross debt	383.3	1,054.6	595.8	1,182.2	154.0	893.3	395.8	25.1	-	-	4,684.1
Net debt	344.9	874.1	502.8	1,049.4	134.0	892.6	233.8	15.7	-	-365.8	3,681.5
Net working capital***	-11.2	-23.6	-35.8	-52.1	-15.3	-72.6	-280.6	-15.7	110.6	682.9	286.8

* The amount of NOK 1,199 million includes capitalised development spending on projects that have not yet reached construction phase of NOK 44 million.

** Cash in project companies includes cash in proceeds accounts, debt service reserve accounts and cash available for redistribution to project company shareholders. Cash in D&C, O&M and Corporate include NOK 133 million of restricted cash related to deposits for withholding tax, guarantees, VAT and rent as well as collateralised shareholders financing of NOK 33 million.

*** Net working capital includes trade and other receivables, other current assets, trade and other payables, income tax payable, other current liabilities and intercompany receivables and payables.

(NOK million)	Power Production	Operation & Maintenance	Development & Construction	Corporate	Eliminations	Total
External revenues	183.6	0.9	20.5	-	-	205.0
Internal revenues	0.7	14.9	576.0	1.5	-593.1	-
Net income / (loss) from associates	-	-	-0.2	-	-	-0.2
Total revenues and other income	184.3	15.8	596.4	1.5	-593.1	204.8
Cost of sales	-	-	-525.5	-	508.0	-17.5
Gross profit	184.3	15.8	70.8	1.5	-85.1	187.3
Operating expenses	-26.2	-5.8	-17.5	-8.6	17.1	-41.1
EBITDA	158.1	10.0	53.3	-7.1	-68.0	146.2
Depreciation, amortisation and impairment	-52.2	-0.5	-0.9	-0.1	15.6	-38.1
Operating profit (EBIT)	105.9	9.4	52.5	-7.2	-52.4	108.1

(NOK million)	Power Production	Operation & Maintenance	Development & Construction	Corporate	Eliminations	Total
External revenues	448.1	7.0	22.5	-	-	477.6
Internal revenues	11.4	21.6	949.5	6.2	-988.7	-
Net income / (loss) from associates	-	-	-1.2	-	-	-1.2
Total revenues and other income	459.5	28.7	970.8	6.2	-988.7	476.4
Cost of sales	-	-	-639.5	-	634.4	-5.1
Gross profit	459.5	28.7	331.3	6.2	-354.3	471.3
Operating expenses	-47.2	-15.8	-89.4	-53.8	27.8	-178.4
EBITDA	412.2	12.9	241.9	-47.6	-326.5	292.9
Depreciation, amortisation and impairment	-122.9	-1.2	-15.4	-0.4	38.1	-101.9
Operating profit (EBIT)	289.3	11.7	226.4	-48.0	-288.4	191.0

D&C margins reduces consolidated PP&E

• Margins created through D&C of power plants are eliminated in consolidated financial statement
• Elimination booked against PP&E in consolidated financial statements

Leads to:

• A negative effect on consolidated equity short term as corresponding non-recourse finance is included at full value
• Improves consolidated net profit over time through reduced depreciation