Scatec ASA — Investor Presentation 2015

Feb 11, 2015

Fourth quarter and full year 2014

Raymond Carlsen, CEO Mikkel Tørud, CFO Oslo, February 11, 2015

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

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
• Targets & outlook

Operational review

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220 MW in operation – set to double in 2015

• Strong growth in power production 220 MW now in full operation
• Financing secured for 207 MW with construction to be completed in 2015:
• 104 MW, Utah Red Hills, USA
• 60 MW, Agua Fria, Honduras
• 43 MW, Oryx, GLAE, EJRE, Jordan
• Project pipeline of 660 MW

Operational highlights

Strong growth in power production

• Production increased by 54% from Q3'14
• Dreunberg, the last of three plants to be grid connected in 2014
• All plants are operating well, 99.9% average plant availability

Q4'14: Continued growth in revenues and EBITDA

Fourth quarter 2014:

• Consolidated revenues of NOK 196 million and EBITDA of NOK 133 million
• Consolidated adjusted net profit NOK 13 million
• Cash flow to SSO equity reached NOK 44 million

Consolidated revenues and EBITDA

Solid cash generation in 2014

FY 2014 - NOK million	Power Production	O&M	D&C	Corporate	Total	Elim.	Consolidated
Revenues	459.5	28.7	970.8	6.2	1 456.1	-988.7	476.4
EBITDA	412.2	12.9	241.9	-47.6	619.3	-326.5	292.9
Total cash flow to equity*:	180.6	9.6	178.5	-34.6	334.1
SSO share of CF to equity*:	86.7	9.6	178.5	-34.6	240.1

• Consolidated revenues and gross profit mainly represent value creation in Power Production segment
• O&M, D&C and Corporate gross profit are internal to the group and hence eliminated
• Cash margins are generated by Scatec Solar in all segments

Operational highlights

Construction of new power plants under way

Project portfolio

215 MW of projects in backlog & under construction

		SSO %	2010	2011	2012	2013	H1'14	H2'14	H1'15	H2'15	2016
Projects in operation:
Czech projects	20 MW	100%		Operation
Kalkbult, RSA	75 MW	39%	Development			Construction	Operation
Linde, RSA	40 MW	39%	Development			Construction		Operation
Dreunberg,RSA	75 MW	39%	Development			Construction			Operation
ASYV, Rwanda	9 MW	43%*				Development	Constr.	Operation
Total	219 MW
Backlog /under construction:
Oryx, Jordan	10 MW	70%					Development
EJRE/GLAE Jordan	33 MW	40%**					Development
Utah, USA	104 MW	100%					Development
Honduras	60 MW	40%						Developm.
Hawaii, USA	8 MW	49%					Development		FC
Total	215 MW
Project pipeline:
Americas	250 MW
Africa	358 MW
MENA	50 MW
Total	658 MW			Financial close		Start of operation

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

(*) Option to increase to 57% (**) Option to increase to 50.1%

Financial review

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

Growth in revenues and EBITDA

Net profit impacted by:

• Non-recurring IPO costs of NOK 8 million
• Gain on sale of land rights for the Utah Red Hills project of NOK 17 million
• Restructuring costs and impairments Japan, as well as a write down related to a former sale of project rights of NOK 17 million
• Non-cash currency losses on intercompany balances of NOK 13 million, down from a gain of 18 million in Q3'14

SSO's profit is impacted by growth investments

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

Fourth quarter (NOKm)	Consolidated	SSO prop. share	%
Total revenues	196.5	98.9	50%
Cost of sales & opex	-63.5	-52.9	83%
EBITDA	133.0	46.0	35%
D&A & Impairments	-38.7	-20.0	52%
EBIT	94.3	26.1	28%
Net financials & tax	-89.4	-37.1	41%
Net profit	4.9	-11.0	-
Adjusted net profit*	12.9	-3.0	-

(*) Adjusted for IPO costs and share based payment totalling NOK 8.0 million.

Continued growth in revenues and EBITDA

• Production growth mainly driven by Dreunberg and Linde, normal seasonal variations in Czech portfolio
• Dreunberg earning 'early revenues' 60 % of PPA tariff until year end 2014

Consolidated revenues & EBITDA (NOKm)

Operation & Maintenance

Stable revenues and margins

• From early 2015, expected annual revenues of NOK 50-55 million based on current plant performance

Consolidated revenues & EBITDA (NOKm)

EBITDA increase after financial close of Utah Red Hills

• D&C revenues and margins reflect project development and power plant construction activities
• Development revenues of NOK 103 million after financial close of Utah Red Hills in Q4'14
• Revenues set to grow again with start of construction of new projects

Consolidated revenues & EBITDA (NOKm)

Solid cash generation across the business segments

Q4 - NOK million	Power Production	O&M	D&C	Corporate	Total	Elim.	Consolidated
Revenues	173.7	9.6	119.6	-0.6	302.5	-106.0	196.5
Cost of sales	0.0	0.0	-51.9	0.0	-51.9	49.8	-2.1
Gross profit	173.7	9.6	67.7	-0.6	250.6	-56.2	194.4
Operating expenses	-19.2	-4.5	-27.0	-18.3	69.0	7.7	-61.4
EBITDA	154.5	5.1	40.7	-18.9	181.5	-48.5	133.0
D&A and impairments	-44.5	-0.3	-7.6	-0.1	-52.4	13.7	-38.7
EBIT	110.0	4.8	33.2	-18.9	129.0	-34.7	94.3
Total cash flow to equity*:	61.6	3.8	31.4	-13.8	83.1
SSO share of CF to equity*:	22.8	3.8	31.4	-13.8	44.3

• O&M, D&C and Corporate gross profit are internal to the group and hence eliminated
• Cash margins are generated to Scatec Solar in all segments

Strong cash flow from D&C in South Africa in 2014

• Strong cash flow generation from power plant construction activities
• Steadily increasing cash flow from Power Production
• D&C cash flow set to increase with the start of construction of the new power plants
• Non-recurring cost affecting Corporate in 2H'14

Financial position

Solid financial position

• Cash position of NOK 1 049 million of which NOK 406 million free cash
• 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

Financial review - summary

Q4'14 results:

• Strong growth in revenues and EBITDA
• Continued growth in underlying net profit
• Solid cash flow generation across all business segments

Targets and outlook

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On track to deliver on our targets

• Target to own gross 750 MW by end of 2016
• 220 MW in operation
• 207 MW in backlog/under construction
• Additional 658 MW in project pipeline
• Annual cash flow to SSO of NOK 140-160 million from the 220 MW installed capacity based on current currency exchange rates (Power Prod. and O&M)
• 15-20% gross margin from Development and Construction
• Target average equity IRR of 15% nominal after tax on power plant investments.
• For 2014, dividend estimated to NOK 25 million
• From 2015, 50% of cash redistributions from project companies (Power Production) to be paid out as dividends

ASYV, Rwanda

2015 will be another busy year

• Q1'15 production target of ~113,000 MWh, broadly in line with Q4'14
• Construction of 207 MW of projects under way
• 207 MW represents total investments of about USD 443 million and Scatec Solar equity investments of close to USD 60 million
• SSO construction contracts for Jordan and Honduras totalling USD 170 million
• Strong focus on moving projects in pipeline to backlog and financial close

Thank you

Our values

• Predictable
• Driving results
• Change makers
• Working together

Consolidated profit & loss

(NOK million)	Q4 14	Q3 14	Q4 13	FY 2014	FY 2013
Total revenues	196.5	130.2	52.4	476.4	129.0
Gross profit	194.4	128.8	52.3	471.3	116.6
EBITDA	133.0	78.8	6.6	292.9	-16.9
Depreciation, amortization and impairment	-38.7	-27.4	-22.1	-101.9	-57.8
Operating profit	94.3	51.4	-15.6	190.0	-74.7
Interest, other financial income Interest, other financial expenses Foreign exchange gain/(loss) Net financial expenses	14.6 -90.0 -12.8 -88.2	8.3 -65.3 18.4 -38.5	8.1 -58.7 63.6 12.9	54.8 -248.6 62.3 -131.5	129.8 -101.3 64.2 92.7
Profit before income tax	6.1	12.9	-2.6	59.6	18.1
Income tax (expense)/benefit Profit/(loss) for the period	-1.2 4.9	-5.4 7.4	-0.3 -2.9	-11.1 48.5	-25.6 -7.6
Profit/(loss) attributable to:
Equity holders of the parent	-11.0	-5.4	3.2	-17.9	-34.7
Non-controlling interests	15.8	12.8	-6.2	66.4	27.1
Basic and diluted EPS (NOK)	-0.12	-0.08	0.05	-0.25	-0.53

Consolidated cash flow statement

(NOK million)	Q4 14	Q3 14	Q4 13	FY 2014	FY 2013
Net cash flow from operations	48.1	-258.4	194.8	-96.5	301.1
Net cash flow from investments	-132.2	-122.6	-429.3	-909.8	-1,306.4
Net cash flow from financing	390.8	146.7	534.3	972.0	1,868.3
Net increase/(decrease) in cash and cash equvivalents	306.6	-234.2	299.8	-31.5	862.9
Effect of exchange rate changes on cash and cash equivavelents	76.4	-19.0	-2.1	58.0	-10.8
Cash and cash equivalents at beginning of the period	666.1	919.3	727.6	1,025.4	173.2
Cash and cash equivalents at end of the period	1,049.1	666.1	1,025.4	1,049.1	1,025.4

Project companies' financials – full year 2014

(NOK million) SSO shareholding	Czech Republic 100%	Kalkbult 39%	Linde 39%	Dreunberg 39%	ASYV 43%	Other	Total segment	SSO prop. share
Revenues	75.7	250.0	75.3	48.6	8.4	5.2	459.5	230.0
EBITDA	65.3	221.9	69.0	46.7	7.8	1.5	412.2	201.5
Interest expenses	-19.6	-104.6	-29.9	-22.0	-4.5	-	-180.6	-82.6
Cash flow to equity*	25.4	96.2	33.0	21.4	3.0	1.5	180.6	86.7

	Power Production						D&C, O&M,
(NOK million)	Czech Republic	Kalkbult	Linde	Dreunberg	ASYV	Utah	Corporate & Eliminations**	Consolidated
Net debt	359.2	838.7	511.7	1,005.1	116.7	40.8	-478.7	2,400.9
Project equity	186.2	422.8	196.3	344.2	20.1	50.5	-42.1	1,176.6
Total assets	577.8	1,544.1	868.3	1,636.4	200.8	198.9	-28.9	5,011.8
PP&E	538.8	1,266.4	690.3	1,339.5	154.4	181.5	-1,136.0	3,049.2

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

** The amount of NOK 1 136 million includes capitalised development spending on projects that have not yet reached construction phase of NOK 50,7 million.

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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