Northland Power Investor Presentation September 2020 TSX: NPI
Forward-Looking Statements Disclaimer This written and accompanying oral presentation contains certain forward-looking statements which are provided for the purpose of presenting information about management’s current expectations and plans. Readers are cautioned that such statements may not be appropriate for other purposes. Northland’s actual results could differ materially from those expressed in, or implied by, these forward-looking statements, and accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur. Forward-looking statements are predictive in nature, depend upon or refer to future events or conditions, or include words such as “expects”, “anticipates”, “plans”, “predicts”, “believes”, “estimates”, “intends”, “targets”, “projects”, “forecasts” or negative versions thereof and other similar expressions or future or conditional verbs such as “may”, “will”, “should”, “would” and “could”. These statements may also include, without limitation, statements regarding future adjusted EBITDA, free cash flow, dividend payments and dividend payout ratios; the construction, completion, attainment of commercial operations, cost and output of development projects; litigation claims; plans for raising capital; and the future operations, business, financial condition, financial results, priorities, ongoing objectives, strategies and outlook of Northland and its subsidiaries. Statements regarding Northland’s expectations or ability to integrate the EBSA acquisition, Northland’s ability to participate across the energy infrastructure spectrum in Colombia, key members of EBSA continuing to lead EBSA in the future, the future growth of EBSA’s regulated base rate and expected Adjusted EBITDA. These statements are based upon certain material factors or assumptions that were applied in developing the forward-looking statements, including the design specifications of development projects, the provisions of contracts to which Northland or a subsidiary is a party, management’s current plans and its perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. These forward-looking statements are based upon management’s current reasonable expectations and assumptions and are subject to numerous risks and uncertainties. Some of the factors that could cause results or events to differ from current expectations include, but are not limited to, revenue contracts, impact of COVID-19, counterparty risks, contractual operating performance, variability of revenue from generating facilities powered by intermittent renewable resources, offshore wind concentration, natural gas and power market risks, operational risks, recovery of utility operating costs, permitting, construction risks, project development risks, acquisition risks, financing risks, interest rate and refinancing risks, liquidity risk, credit rating risk, currency fluctuation risk, variability of cash flow and potential impact on dividends, taxation, natural events, environmental risks, health and worker safety risks, market compliance risk, government regulations and policy risks, utility rate regulation risks, international activities, reliance on information technology, labour relations, reputational risk, insurance risk, risks relating to co-ownership, bribery and corruption risk, legal contingencies, and the other factors described in the “Risks Factors” section of Northland’s 2019 Annual Information Form, which can be found at www.sedar.com under Northland’s profile and on Northland’s website at northlandpower.com. Northland’s actual results could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur. All figures are presented in Canadian dollars unless otherwise indicated. Northland Power Inc. – Corporate Presentation 1
Northland Overview • Global developer, owner and operator of sustainable infrastructure assets • Over 30 years of successfully developing , constructing and operating power projects over full lifecycle • Well-diversified, modern fleet of high-quality assets • Power Generating Assets: 2.6+ GW global fleet • 1,100+ MW of visible renewable power projects pipeline • Offshore Wind • 1,044 MW Hai Long – advanced development • Solar 1987-Present • 130 MW La Lucha – in construction • Utility: Regulated utility servicing 480,000 customers in Latin America • Significant development opportunities across multiple jurisdictions and technologies Northland Power Inc. – Corporate Presentation 2
Northland’s Strategy 1 Creating and sourcing high-quality clean energy projects Northland’s business strategy is centered on 2 establishing a Early mover into growth markets and significant global technology presence as a sustainable clean and green energy producer 3 Operating our facilities with a view to optimizing worker safety and financial performance while minimizing any environmental impact Northland Power Inc. – Corporate Presentation 3
Focused on Sustainability We seek to achieve a sustainable and prosperous future for all of our stakeholders • We will achieve this through: • Environmental Social Governance Focusing on clean and green technologies Prioritizing health and safety Fostering a diverse and inclusive culture Supporting sustainable economies Investing in our communities Aligning with interests of shareholders through clean energy and responsible and stakeholders Hiring locally and providing international business practices opportunities Enhancing board diversity and structure Delivering strong and sustainable Partnering with First Nations and Adhering to best governance practices financial results Indigenous groups Preserving the natural environmen t Northland Power Inc. – Corporate Presentation 4
Track Record of Strong Returns to Shareholders Annual Dividends (Distributions) Per Share (Unit) Since 1997 Total Shareholder Return Peer Group* S&P/TSX Capped Utilities Index Northland Power 3 $1.20 $1.20 $1.05 $1.08 $1.08 $1.12 $1.08 $1.08 $1.08 $1.08 $1.08 $1.08 $1.08 $1.08 $1.09 2 1 $0.93 $0.94 $0.98 $0.98 $0.98 $1.00 $0.88 4 $0.80 24% 16% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 YTD 2020 5-Year TSR 10-Year TSR 1. Canadian IPP Peer Group includes Algonquin Power, Boralex, Brookfield Renewable, Capital 1. Includes a special cash dividend of $0.02 per unit declared on December 18, 2006. 2. Includes a special cash dividend of $0.04 per unit declared on December 4, 2008. Power, Innergex, Pattern Energy, TransAlta. 2. As at August 17, 2020. 3. Dividend increased from $0.09 to $0.10 for December 2017. 4. Dividends paid year to date as at August 15, 2020. Northland Power has consistently delivered strong long-term returns and stable dividends to shareholders Northland Power Inc. – Corporate Presentation 5
Track Record of Corporate Growth 2014 ¹ 2020 2 Annual Growth Assets $5.0 B $11.5 B 18% Operating Capacity (Gross) 1,417 MW 2,681 MW 14% Operating Capacity (Net) 1,345 MW 2,266 MW 11% # Corporate Offices 1 8 2020 2 Market Value 2014 Enterprise Value $4.9 B $14.8 B 25% Market Capitalization $2.5 B $7.4 B 24% Share Price $15.29 $36.59 24% ³ Building on our success, we continue to deliver on our promises, delivering long-term value for our shareholders 1. As at December 31, 2014 2. As at June 30, 2020, market values as at August 17, 2020 3. This number represents the 5-Year Total Shareholder Return (includes capital appreciation and dividend reinvestment) Northland Power Inc. – Corporate Presentation 6
Track Record of Growth in Financial Results Northland’s growth in Adjusted EBITDA and Free Cash Flow Per Share has been substantial Adjusted EBITDA Growth YTD 2020 results off to a good start for the year 1,200 1,000 YTD YTD Change 2020 2019 800 Energy Volumes (GWh) 4,759 4,336 10% 600 Net Income ($MM) $349 $280 25% 400 Adjusted EBITDA ($MM) $647 $488 33% Growth 145% 200 Free Cash Flow ($MM) 1 $229 $177 29% - Free Cash Flow per share 1 $1.17 $0.98 19% 2015 2016 2017 2018 2019 Free Cash Flow per Share Growth Strong first half 2020 results showcasing significant year • over year growth 1.50 Completed initiatives to enhance financial position and • corporate liquidity 1.20 Added additional offshore development opportunities in 0.90 • Growth 75% South Korea (Dado Ocean) and Canada (Naikun Energy) 0.60 0.30 - 2015 2016 2017 2018 2019 Northland Power Inc. – Corporate Presentation 7
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