Northland Power Investor Presentation May 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 include, without limitation, 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 sources of proceeds to pay for EBSA, the future growth of EBSA’s regulated base rate and expected Adjusted EBITDA. 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. 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. Forward-looking statements are subject to numerous risks and uncertainties, which include, but are not limited to, Northland’s ability to satisfy all closing conditions to the Acquisition and the Offering, Northland’s ability to integrate EBSA, construction risks, counterparty risks, operational risks, foreign exchange rates, regulatory risks, maritime risks for construction and operation, and the variability of revenues from generating facilities powered by intermittent renewable resources and the other factors described in Northland’s 2019 Annual Report and 2019 Annual Information Form, which are both filed electronically at www.sedar.com and Northland’s website www.northlandpower.com. Other than as specifically required by law, Northland undertakes no obligation to update any forward-looking statements to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise. All figures are presented in Canadian dollars unless otherwise indicated. All information relating to EBSA contained in this presentation is based solely upon information made publicly available or provided to Northland by the Sellers in connection with the Acquisition. While Northland, after conducting due diligence that it believes to be a prudent and thorough level of investigation, believes it to be accurate in all material respects, an unavoidable level of risk remains regarding the accuracy and completeness of such information. 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: • Inspired Prosperity for all Top Clean & Green Workforce Developer Stakeholders Focusing on clean and green Supporting sustainable Prioritizing health and • • • technologies economies through clean safety energy and responsible Delivering strong and Fostering a diverse and • • business practices sustainable financial results inclusive culture Generating and distributing Investing in our communities Hiring locally and providing • • • economic value international opportunities Partnering with First Nations • Capitalizing on revenue • and Indigenous groups generating opportunities through the transition to a Preserving the natural • low-carbon future environment 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 $0.50 19% 14% 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 May 15, 2020. 3. Dividend increased from $0.09 to $0.10 for December 2017. 4. Dividends paid year to date as at May 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 $12.0 B 19% Operating Capacity (Gross) 1,417 MW 2,681 MW 14% Operating Capacity (Net) 1,345 MW 2,266 MW 11% # Corporate Offices 1 7 2020 2 Market Value 2014 Enterprise Value $4.9 B $13.8 B 23% Market Capitalization $2.5 B $6.1 B 19% Share Price $15.29 $30.26 19% ³ Building on our success, we continue to deliver on our promises, delivering long-term value for our shareholders 1. As at December 31, 2014 2. As at March 31, 2020, market values as at May 15, 2020 3. This number represents the 5-Year Total Shareholder Return (includes capital appreciation and dividend reinvestment) Northland Power Inc. – Corporate Presentation 6
Track Record of Growth in Financial Results Northland’s growth in Adjusted EBITDA and Free Cash Flow Per Share has been substantial Adjusted EBITDA Growth Q1 2020 results off to a good start for the year 1,200 1,000 Q1 2020 Q1 2019 Change 800 Energy Volumes (GWh) 2,974 2,539 17% 600 Net Income ($MM) $275 $204 35% Adjusted EBITDA ($MM) $421 $294 43% 400 Growth 145% Free Cash Flow ($MM) 1 $211 $142 49% 200 Free Cash Flow per share 1 $1.10 $0.79 39% - 2015 2016 2017 2018 2019 Free Cash Flow per Share Growth Good start in 2020 with strong first quarter results • showcasing significant year over year growth 1.50 Declared commercial operations at Deutsche Bucht on • March 31, 2020 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
Track Record of Financial Stewardship Prudent use of leverage and liquidity • Northland has a BBB (Stable) investment grade credit rating by S&P • Strong S&P FFO 1 -to-Debt, well above minimum threshold • Healthy corporate debt level relative to IPP industry, to support flexibility • Prudent use of leverage: 92% of $7.5B total debt is non-recourse to • Northland Corporate Credit Facility Corporate Debt Project Debt $1.0B credit facility to $0.5B utilized $6.9B drawn support further development Corporate Credit Facility Non-Recourse Debt $0.1B utilized EBSA Bridge Facility 1. FFO represents Funds From Operations. Northland Power Inc. – Corporate Presentation 8
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