AY - Earnings call transcript Q4 2021 | Atlantica Sustainable Infrastructure plc

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Operator

Welcome to Atlantica’s Full Year 2021 Financial Results Conference Call. Atlantica is a sustainable infrastructure company.

Just a reminder that this call is being webcast live on the Internet and a replay of this call will be available on Atlantica’s corporate website. Atlantica will be making forward-looking statements during this call based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect or because of other factors discussed in today’s earnings presentation or because of other factors discussed, including the Risk Factors section of the accompanying presentation and in our latest reports and filings with the Securities and Exchange Commission, all of which can be found on our website. any update undertake forward-looking not does duty any to statements. Atlantica

are for Santiago today’s us Atlantica’s conference Martinez-Davis. Joining Francisco call CEO, CFO, Seage and

will pass you the conference to Mr. the at of sir, over session. open go Please, we ahead. Q&A now usual, for the will As I Seage. lines end call, the

Santiago Seage

call. and you few remarks a thank and joining the afternoon with much for us the Starting quarter for Good very our year. XXXX conference regarding

terms for have available of XXXX in our year We EBITDA. cash guidance distribution the adjusted closed and for both meeting

we the leave minute renewable are with million. XXXX new of of Our both as a dividend a million, Board or closed Francisco, XXXX has and through remember $XXX And in of credentials. we acquisitions operation also spending take of it’s that, a very And With ESG first well target. including of million for XXXX, that investments range will Directors $XXX has in earmarked million, months guidance that, above be will to [ph] well finally, terms results. been of of our regarding energy will to our you initiating than year we declared $XXX quarterly following good have important $XXX reviewing as assets share. With $X.XX construction the And per already over I contracted more our we facilities. invested this, who in in XXXX, you our financial X

Francisco Martinez-Davis

for provision million. the foreign comparable year Adjusted electricity have and to growth our excluding $XX Okay. key I adjusted turn in Spain, present to by full Thank Please EBITDA exchange million would Slide XXXX. everyone. financials where afternoon $XXX will basis, On prices non-cash you, reached XX.X%. been and #X caused our EBITDA a good Santiago the

of full increase year-over-year. generated CAFD, the we for million XXXX, Regarding year an $XXX.X XX.X% of

the In North business revenue XX%, to the following XX% by thanks by America, XXXX, by to #X, compared decreased Growth, non-cash the electricity the geography our to during Spain, in assets higher revenue the XXXX. America, $XXX.X by sector. investments prices can production plants. you acquired performance see high thanks increased Slide South EMEA X% million recent increased by due recent was EBITDA in in increased In recently the On offset and EBITDA region Spain to investments the States. to to in United provision X% and PV while in the year. in related by

sector, below we Looking business results. similar can the results at see by

please our was so where also higher. turn Production gigawatt Electricity Slide to will where our hours by XXXX. largely the versus EMEA, over, acquired. turn of solar to radiation XXXX, due The assets assets increase we XX% recently now contributions increase review in assets X,XXX produced #X, an Let’s renewable in in increased of operational reached performance. was

other and expected the solar the South radiation than our resource was in lower hand, assets North in America. On than lower the and in wind was expected U.S.

and water again, contracts, In we and revenue based availability, Looking where is ACT at achieve on solid continues to show transmission other availability two availability-based performance. once to lines high sectors levels. our our continue

for to Let’s flow through cash you year Slide XXXX. the move full walk to our #X

non-cash million, Our the included and EBITDA showing mainly increase is electricity mentioned in adjusted I operating for reached higher items. XXXX flow $XXX provision thanks XXXX, higher non-monetary cash The to a versus previously XX% prices.

project of of to for $XXX million XXXX in XXXX raised the includes $XXX corresponds cash also and dividends with our you proceeds Financing to Investing of reached of debt facility of cash million and a growth So in issuance million, operating repayment paid non-monetary non-controlling interest. flow approximately $XXX acquired January cash can we and closed repayments note the the equity flow in the when million positive the million green the from new million in the $XX assets scheduled the shareholders cash by explained year. in flow May. issued $XXX impact exclude mainly notes Financing during see items. $XXX the flow

Moving Global More to Yearbook. was on and in our Knights, was XXXX, target, the utility listed Only change. two emissions In Santiago. included turn in Atlantica #X, we XXX continue rate utilities we sector. XXX the in within by XXXX, related world’s updated U.S. good Target was also action third to again Science recognized. Global I Sustainability Slide on approved the be to to next the we the distinction In ranked ESG XXXX, in Index. environmental In as medal progress were its A score one the set January front a companies performance in Corporate we in the in by December an Sustainalytics ESG XXXX, transparency call Class on achieving industry. will made CDP’s Atlantica now S&P year, List, the Sustainable awarded and Atlantica received the XXXX, included top Based in of in the XXXX the included over the reduction Bronze #X back efforts Distinction ratings This initiatives. percentile once and highest climate February and Corporations which were Also

Santiago Seage

Francisco. Thanks,

the we terms today’s XXXX, Vento $XXX Algonquin. in our than XX% contracted which With closed XX-megawatt mostly been second of more in investment $XX has our under on where ROFO growth, million investment, last of our XXXX, was In America, equity more we total close during North in closed part operation, XXXX, presentation, the in investments. invested U.S., was XX, less or to an the This of Moving with we Coso solar asset Page year a and in year. on this, to investment our agreement exceptional November for an of million. in investments

inflation and this between in under see that a a for investing $XX that $XX XXXX. we already going Moving is detail have These on, and already in million, terms XX.Xx currently to we PLX, I closed year, In $XX U.S. million closed target the X investments Page of investment PPA close $XXX with bit are year already include our closed our #XX, with regarding in during more assets that to of page, are have XX% months there line of which for have mentioned, in earmarked be and investments construction million already as or multiple in or for target you acquisitions more the long-term these of million the earmarked than dollars $XXX and million first investments, a number. XXXX, we XX-mile escalator transmission next you EBITDA.

assets XX that third in target closed under years an a of small We signed CAFD Italy. to growth many million X% million in first we our that on place, important. know, growth, a in up to additionally, investing million $XXX closed. between million our in solar guidance PPAs and EBITDA also be and a In we this $XXX three of is recently with in to with if of we them CAFD achieve you portfolio mid-term With for in is and of each through range as of of very share about the as of XX, investment three combination to know, contracted X% $XX we Page that, $XXX initiating of our year million. target And And construction, currently assets expect our the terms growth. assets, of and are XXXX mid-term you $XXX factors, range are organic per our have going the sources something talk escalation

a of Additionally, term; in time will some to we and cases, our the be number expansion assets. other mid-term. in In in expect over have those opportunities cases, opportunities repowering shorter

in own portfolio of together the development construction of in with in project a markets lever early we with partners. assets, present. in of some In currently ownership own in And where most development growth we we of a on instances. situations, most on stage percentage other Our new we increase development own. invest our our to second the we cases, In future right are the the development and projects invest

pipeline assets year we our have see. be investing closed in projects acquisitions for we optimistic growth become through XXXX we growth of and assets lever, that low-risk summary, acquiring generate believe this building already, today’s third third investments year, questions. whenever been value and open XXXX, material continue in the situations will call continue continue and and expect source new the developed have we this, in both In we assets, XXXX of our months will we first and what us, more like proprietary of Already portfolio joining are we projects. finally, from contracted can close. to will and conclude creating Operator, X two we in cases, when want. these confident and of them new As And this as acquired parties, will smaller, in in you through own Thanks in first With let’s a for we lines many the more I a new relevant. assets able is will of operation be to development construction through presentation. you the

Operator

from Instructions] question ask Please Thank first James. David line question. comes [Operator from your the Raymond Your of you. Quezada

David Quezada

a capital very bit. question Thanks. of forward your successful company’s over strategy. Hi, going relates here first and the My past growth terms been year outlook you’ve the just investing and to everyone. Certainly, in

level, Just that major how very clearly at to the And strategy market just which aware themes you two are and opportunity shift set? of, environment. price all? profit inflation, everyone maybe I’m today your your high the curious, cost – is things, power the in and how are in that affect does those curious, response if does how higher

Santiago Seage

the question. Hi, thanks David, for

going of our But terms last you today pricing in opportunities. we opportunities, mentioning, continue many pricing strategy in to months things like should investing us. and was regard. prices in projects continues strategy what what a expectations better know some like market forward. our being going to in we ago bit be what a bit being after And are that helping with very of strategy there well, like it seen to strategy, probably XX things discipline, have developed The probably we help given our contracted cases acquisitions than is you’re that is Our change with have it is should in going healthier power in the not we go regarding as as low-risk Nevertheless, – partners. to very year. combine Obviously,

David Quezada

process what on there, you Okay. if other there? if process? Was then opportunities anything, And do And specifically the or intend just TLX thank maybe curious to I’m you. you give on capital us acquisition, competitive beyond that there. see million additional a see the you Excellent, can one color any the bilateral do a you $X spend

Santiago Seage

situations, business very those so and would We certain those even of are one think if In better the love these situations able they risk to markets situation. model. one happy lines. I’m generate on in are bilateral is one another are we than a But like, was we smaller situations local transmission believe situations. well where larger. in we happy returns, our after of we it we low, obviously, fits be can achieve classes is competitive these to in to presence this we our So because work Operationally, of asset closing smaller.

David Quezada

Excellent. me. one Maybe for That’s you. great Thank more color. just

your pace – investments, you’ve lately. the been of investments the making on the Just strength given of

across asset – what sell-downs Just contemplate next look pull thoughts would of plan. you levers portfolio? funding in and Yes, year? your Would specifically, and sheet on just funding kind balance would to and the over any you case your any maybe

Santiago Seage

Sure.

we as more or to So less key in of net something know, target there corporate range. our is terms we less as you versus our debt you are in or more be X-point there, the where saw. CAFD metric funding, Today,

will that us, be metric, respecting metric. So the key that, for we and growth is financing

the possibility it’s in contemplate the some time, right at divesting would some obviously, point something of metrics. assets, with – we we Regarding

but going So toolbox of I would be – it forward, the other opportunities part options. find many we like on it will the depend obviously

David Quezada

very Perfect. it much, Thank that’s me. you for

Operator

you. Thank

Bean Colton ask of line Tudor, your the Pickering. Please from comes from question next Your question.

Colton Bean

everyone. Thanks,

off. just So one to quick start a

million XXXX, disclosed reconcile projects us $XX the you the for can individual $XXX on XX? of investments XX million of $XXX Slide committed On the million help on capital to Slide with

Santiago Seage

Yes.

and $XXX earmarked composed the the are currently we $XXX million what $XX total are to of our construction funds projects projects construction million, the acquisition of So investing in that a are within that earmark closed we million have soon going of the $XX remaining are under year. start to is are very million that

Colton Bean

a us on throughout point some on see in capital we and then if can you just announcement Got with additional you at the stand deploying as partner Star think discussions where could about it. your the And you update repowering year, II Lone in future?

Santiago Seage

yes. are follow prices, timing on expect operates in ongoing. different. the through a either would there recontract able And or specifically the to discussions And question Texas, be expectation repowering depending through – would the market be So your where future We would in in to some strategy. expectations our be the regarding asset power other full might

could for situations we might right different very be instead going there. where, now, to parts market in a for it’s full sign you there you answer. And therefore, many moving timing investment. today make a time or precise while for And the in might the time there give agreements some short-term of wait for some to sell So difficult an you repowering are

Colton Bean

at on us of to side would the return capacity been just Solana when operations and maintenance normalized has you you factor? then And conclude on expect to things. a ongoing. more understand Can I Understood. repairs update

Santiago Seage

Yes.

So have that we this you work And our during in some year. ongoing. with we to improvements are of continue told as expect disclosure,

would to ongoing closer be an I say we this rate. should So year, later run

Colton Bean

time. Okay. the Appreciate

Operator

Thank you.

comes Bank from of Your America. Please of Dumoulin-Smith the Julien from ask your next question line question.

Julien Dumoulin-Smith

Thank you Hi, afternoon, team. time. good the much so for

Just for the a you little can bit It EBITDA the of But a just if first seems ‘XX than the brief you cash ‘XX, Obviously, the CAFD question can. lighter year-over-year. versus talk mind. bit The about increase there there. it’s about be more guidance, but an that might in Obviously, like in you provided you there? little maybe some EBITDA don’t some your about delta? just talk extended bridge, talk FX if can I

Francisco Martinez-Davis

afternoon. is Good Julien. This Okay. Francisco.

but the affecting in a provision mentioned elements effects a is EBITDA is was – – saw prices as are explanation, main element that of result affecting the the booked XXXX. of EBITDA on coming presentation $XX the two That out in Spain. main You that you XXXX in there that the we main the is power in million the that some

Julien Dumoulin-Smith

just that inflation specifically? of this this escalators, Okay. some remarks I also talk put think Alright. Can your is what organic on specifically being the escalators mentioned to? you in tied your how Fair the – are for And in about and then contracts year enough. you year. prepared you growth much tied emphasis And that to

Santiago Seage

Sure.

inflation through will you half linked escalator, like our of If in you differentiate something look I in assets, even your years to compensate that and markets inflation part see to a significantly higher has obviously, a got to to be a it’s this expected our to compensate because, business going going and ago, that of you at where, important well-contracted feature. some – if portfolios CPI, it’s are a when close if costs inflation very than can couple revenues. of than of Therefore, you small we of our disclosure, feature a smaller what And a go that of form else. is an part want, your all key you your many believe that a most year, year in U.S. is linked personally of more

this portfolios that some portfolios in flat profitability, improve even suffer and erosion contracted inflation. adjustment to So were higher can of thanks versus period inflation that might

case, our close to everybody our So to in I business that to wanted remind of is linked just CPI. half

reviews probably what some you have and number of we think in in most whether once on expectations our to this a or a very contracts. depends we short-term that In it expect it’s cases, obviously, cases, do you year. can year, a But So not. regarding inflation effect have price

Julien Dumoulin-Smith

these that, X% versus, talked if to quantify if from is about you improvements, just to bucket. How you the coming Maybe don’t itself X% mind, you of from it. will? and say, much as organic Got coming escalation expansion you some

Santiago Seage

in of So X% has the to short-term our And around an adjustment. of be higher business is because as going of half X% inflation average obviously, the I mentioned period. And to the inflation. before, that’s

increase you the multiply have should our and for the should So portfolio whatever in more see less price expectation be inflation that you or short-term. XX%, by in

Julien Dumoulin-Smith

just in year. mean, here, job your last I XXX targets your of that. last you. I exceeding exceeding targets incredible obviously And finding Thank some Excellent. a did you year opportunities numerous year, meaningfully at appreciate and an

obviously, same tracking year this thing and ‘XX year? You’ve did – doing last basically targets you’re of be the how you meaningfully for as about talk ahead you you your of could already. up Can again tolerability lining

Santiago Seage

Well, I too to think it’s tell, Julien. soon

money, As capital of create what target can the you would prefer opportunities be why life to target. explain can spent I meet That’s find value our we always explain didn’t the know, than a to to is invest key our invest amount didn’t we we that accretive. certain prefer expected. why I to objective but when return in and not – we

I year, XXX year, soon guidance But But of today, end clearly what by would as the right us year. of you we which seeing as we tell. and of more you are in a year. we it’s for think investments do be So, following more the of what if did the closer is number once end we target a the you It’s closed say Hopefully, but too CAFD is numbers, stone. invest not to would find last have know, that, opportunities, we the today, once of as every will we I to more.

Julien Dumoulin-Smith

a Excellent. great Thank perfect. day. Have Alright, you.

Santiago Seage

Julien. Thanks

Operator

your Please line of Your next Mark comes from question CIBC. the question. from Jarvi ask

Mark Jarvi

of to in Uruguay, you And risk? guess be in I if plants, of or bears share terms build acquisition of those projects equity sort the three for the do this in multiples two of have year? all or anything timing, invested who risk sort one when or And wonder guys could take construction, is method it I for then Colombia. the does the you in multiples Thanks. the terms now PV later that on the

Santiago Seage

bearing So, say. in we let’s construction projects, the limited, risk. the are And is see these size there you

is taking are that year, today, – as equity. The not our way have that optimize we the the view, becomes So, and put in assets, are assets In a that an of opportunity this build a in you some we include those from of sheet. as once is is it non-recourse you them, there, mass financing. in think would gradually. to we them point amounts And debt a project something now. XXXX during of front first investment be financial we happy part that We and as long have non-recourse these happen there into contemplating would of to the operation, smaller risk future, balance do to critical

Mark Jarvi

And what’s those incremental when and tied earmarked of sort or I Perfect. investment know some million M&A? said is $XX say, I then of between you the Okay. – $XX to investments, it’s sort the announced you of all did what the projects, is would development and don’t if disclosed it or pending million hear are

Santiago Seage

have you say, but if – as would as third have be let’s a would assets third that we there, want, well The developed. projects It deduct bucket, smaller can in for be amount additional it that you developed. we is

Mark Jarvi

talking your capabilities And about have obviously, you development. organic for increasing been

if done could And own come. Potentially Just forward million year, from likely you credits you projects – a your of more $XXX in development equity all the M&A? XXXX. did bit you deploy the maybe little have percentage here. as you internal about Obviously, talk versus made like come what this to progress look

Santiago Seage

investments projects think the years, we couple for with of partners the been every year thing. with of to of is this be in it’s in profile, a our have as higher than part co-developed acquisitions devoting assets we be making somehow last have saying meaningful should or company So, our Return part. operation. a for we to year, XXXX, And developed right going that

it ballpark you of the a be XX%, kind guess look have front could I year. If you, estimate you for in XX%. would maybe numbers of a number the the at That’s

to from when most front contractual talking in our assets come time, long-term see, point can a about you meaningful. of you the and But three in from are from want. of construction, this of you signed. you, risk of we view, assets of they a And develop operation, PPAs the same year investments acquisitions therefore, at view. it’s are still So, start build, old-fashioned low the going we as And point we a have have risk if

Mark Jarvi

generated comes you you Understood. And deal be before of to how upfront scale projects. you some as those going capabilities costs, available What’s next internally in where up, can along influence with cash you to couple terms it development if terms in the the internal start of approach for obviously, your go does capitalize think costs distribution? with And over it for dividend projects, more years? does at all – the of do you growth

Santiago Seage

different other not. should you companies some with. It with is from development deal we very way The probably be familiar might

So, a if lower approach. use you We we cost want, partners. follow,

not want So, pipeline the call trying to whatever have we or it. are to here largest you

in number our a that are having part target to develop meaningful get be metrics. to any we to huge our the a trying are And achieve to going going to of help us of are return. higher in into way don’t that, with significant to do investments assets need of investments We a that

or We doing like we a continue in-house have or without complementing are anything at very we who most have that. is thing brilliant being pipeline the low we that on using are. a to earth trying And cost the skill only

Mark Jarvi

the for Thanks Understood. update.

Santiago Seage

you. Thank

Operator

Your your from the Gonzalo BNP question. de Exane. next line ask from question comes of Cueto Please

Gonzalo de Cueto

Hi. Francesco, been have most Santiago, questions of already afternoon answered. and Good my well,

that provision one XXXX? for So, record less should on what accounts still have prices, in be electricity current assuming your the follow-up could in to you have Spain. prices I non-cash And

Santiago Seage

answer I have So, don’t I question that will clue. as a

In the ago. that view, what Gonzalo’s question prices specific, anybody point referring be a accounting to answer power couple they a is, fairly would is before of expected case, Julien than we XXXX, XXXX, And XXXX. year guidance, the EBITDA before, question when taken of And have following our into It’s range in account. to the we any the guidance wider provision point a we typically mentioned at what be time, do, my are. is this And say, provision. think mostly that given from where which something will have for for I because of this non-cash to that more at higher who provision obviously, Spain significantly time sizable, with need than And our years that. this would Relations in can forecast. Francisco this prices would difficult provisions number is Investor be knowledgeable because than in for if I these you team triggers, follow-up from about much point remain this an book are me.

Gonzalo de Cueto

very you Thank Santiago. much Okay.

Operator

Seaport. from Your from next question question. Please your Storozynski of the line ask comes Angie

Angie Storozynski

Thank two some is issued your your hydrogen. actually green am emphasis batteries And if if then I was have have and One basically assets might already but in seems be program? of those to sorry questions. equity happening just wondering retrofit more this, on you to from secondly, under to you. additional given benefit an have European in you of covered you investments investments? ATM there I able And be Europe, I any what’s order in

Santiago Seage

Angie. Hi

one obvious our your will to personally shares disclosure. I development and in renewable going regarding flavors Eastern We power the your to the across we going it’s regulators in to administrations on do of of storage obviously, first some what’s So, push are are issued too about would are then to that, even the further Board, to because Board investments extract reasons. Europe. that Like probably It because are is try say question, all find many it other in of that conclusions pushing asking sorts to things quicker disclosure. And higher too profitable. that going an And energy, that Yes, the for starting investments make energy, of second find disclosure, in early around of opportunities of see administrations to the many question, with ATM. going and for players, things, general, of detailed the will with going renewable governments in across you the kind were prices you we ATM. be in

Angie Storozynski

Okay.

Just remind at can please, comfortable you if a us, one level that you leverage X.Xx, with? with follow-up, feel the that’s

Santiago Seage

is. It

Angie Storozynski

additional as – okay. Again, an

Santiago Seage

I point will something. as three press it

something. falls So, the the X.X within

Angie Storozynski

Thank you. Okay.

Operator

[Operator Instructions] next of Grippin from UBS. Your question Please question. line William from comes the your

William Grippin

everyone. Thanks Great.

understand you identified on quick But easy guidance contributions me that from is that’s you the that investments, $XXX are a how assuming in one XXXX trying what Just the for you. in? CAFD terms of including is to there in here. have just of new that, so the guidance? of committed that much part or you a far, Thank of that And are top anything then million

Santiago Seage

these to the the commercial included. as end towards have we operation, construction year. can been is out of under the you little reach there, specific are So, for from investment the see acquisitions CAFD about, obviously, the That because the construction, of estimation going assets talking acquisitions, assets under the there is very

our In invest are practice believe going or to we what terms during of to new policy we is the our year. to investments, able include be

should CAFD in the going delivering. be year whatever Let’s say, we the are during to invest that

William Grippin

Great. Thanks me. for very That’s all much.

Santiago Seage

you. Thank

Operator

be There the I speaker. further seems hand back call questions, no to if to the

Santiago Seage

and to Great. everybody, can very it thanks, Thank you operator. much We leave here.

Operator

conference our conclude for participating. does That Thank today. you for

You may all disconnect.

Atlantica Sustainable Infrastructure (AY) 1 Mar 222021 Q4 Earnings call transcript