Integrated Report 2015

Transcription

INTEGRATED
REPORT
2015
INTEGRATED
REPORT
2015
CONTENTS
1. Interview with the President and CEO 04
2. About this report 07
3. The Group 08
3.1.
3.2.
3.3.
3.4.
3.5.
Description of the organisation 09
Our assets 14
Our stakeholders 17
Business model 20
Saeta in 2015 22
4.Strategy 28
4.1.
4.2.
4.3.
4.4.
Excellent, secure and sustainable operation 29
Sustained and controlled growth 30
Financial strength and high liquidity 32
Organisational structure with talent 32
5. A favourable environment for growth 33
5.1. Trends and opportunities 34
5.2. Regulatory framework 37
6. Corporate Governance 42
6.1. Group governing bodies 43
6.2. Independence of Saeta Yield 49
6.3. Commitment to ethical principles and responsible management 50
7. Risk management 54
8. Appendix. Main Management Indicators 57
9. Appendix. Environmental performance in 2015 59
10. Appendix. 2015 Talent management indicators 61
11. Appendix. Occupational health and safety in 2015 63
12. Appendix. Financial summary 65
12.1. Consolidated balance sheet 66
12.2. Consolidated results account 66
12.3. Consolidated cash flow statements 67
Saeta Yield’s target is to maximize total return to shareholders
1
2
Robust portfolio of renewable assets
that generate stable cash flows
789 MW in Spain*
Wind
539 mw
CSP Solar
Thermal
€ mn - Recurrent
Next RoFO Assets
USD
298
peru
129 MW
400 Km
250 mw
5 CSP plants
Long-life assets:
19 years remaining life
Fully operational, good performance
Regulated remuneration
Euro denominated
Dividend Yield
SAETA YIELD INTEGRATED REPORT 2015
spain
50 MW
call option
Development
of new
assets
uruguay
49 MW
68
Additional growth via third parties acquisitions
in Europe and certain Latam countries
Revenues
ebitda
cafd
DIVIDEND PAY OUT ON
RECURRENT CAFD:
61.4 €M OF DIVIDENDS PER YEAR
cafd csp 64%
cafd wind 36%
EUR
portugal
124 MW
mexico
102 MW
* After Extresol 2 & 3 acquisition
Market Revenues 27%
Regulated revenues 73%
Profitable Right of First Offer Agreement (RoFO)
Operating Assets
208
16 wind farms
Financial strength and
liquidity to grow
CAFD: Cash available for distribution
to shareholders, calculated as the
average of the coming years, excluding
non recurring items.
All transactions
Accretive acquisitions: increasing DPS growth and attractive equity IRR
Assets providing safe and secure cash flows: in operation, long term
revenues, investment grade off-takers, safe jurisdictions and strong
currencies
Solid Corporate Governance
Dividend Per Share Growth
03
1.Interview with
the President and CEO
This is the first year that we are presenting Saeta Yield’s Integrated
Report. With this document we seek to provide details about the
Group’s characteristics, a long-term view of our strategy and how
we create value for our stakeholders, a key aspect for the Group’s
long-term sustainability and its capacity for future growth.
José Luis Martínez Dalmau, President and CEO of
Saeta Yield, answers questions on some of the main
matters of interest to the Group.
What is Saeta Yield and how does it
create value for its shareholders?
Saeta Yield is a company that operates energy
infrastructure assets, mainly related to renewable
electricity generation. Its vocation is to provide
value to its shareholders by investing in assets that
generate highly stable and predictable cash flows,
supported by income that is regulated or contracted
in the long term. Saeta Yield offers a full return
to shareholders in the form of high and growing
dividends.
Saeta Yield is the first energy asset Yieldco listed
in euros. So far, it operates solar thermal and wind
power assets in Spain. Its aim is to maintain solid
and sustained growth in dividends through the
acquisition of new assets.
The Group enjoys a privileged relationship with
ACS Group and Global Infrastructure Partners (GIP),
who act as sponsors with shareholdings in Saeta
Yield and who offer new energy assets developed
mainly by its subsidiary Bow Power.
How is Saeta Yield different from other Yieldco?
In addition to the fact that it is the only European
Yieldco to be listed in Euros, Saeta Yield has a
solid governance structure with an independent
management team and extensive experience in the
sector; its Board of Directors has an independent
majority and the company has decision making
protocols to avoid conflicts of interest in this process.
Furthermore, at Saeta Yield the sponsor has neither
rights nor remuneration different to those of the rest
of the Group’s shareholders.
The sustainability of Saeta Yield’s business model is
also given a boost by a solid financial structure and
high levels of liquidity, which will allow it to achieve
its growth targets. Financial discipline is key when
it comes to acquiring assets, and certain investment
criteria are always applied, aimed at maximising the
rate of return, minimising risks and ensuring that
acquired assets generate stable cash flows.
How would you appraise the results of
2015 and the first months of 2016?
2015’s results were very satisfactory, particularly
taking into account the fact that they were the first
that we presented as an independent listed company. I
would like to place great emphasis on the fact that the
entire process of floating on the stock exchange and
creating our current solid organisational structure has
represented a significant milestone. Saeta Yield is the
first energy Yieldco in Europe, and this has posed major
challenges in strategic terms, as it is a common and wellknown model in America, but most of our shareholders
are European.
In operational terms, I would like to highlight the fact
that our results in 2015 are very satisfactory, both
in terms of gross operating profit and cash flow for
shareholders, and have exceeded the expectations
of the market and the Group. This has been a major
endorsement of our ability to meet our investors’ needs
in this sector. 2016 has begun with an electricity market
price below the regulatory expected price, which
will impact our market revenues. This is a transitory
situation as the regulation compensates the long term
exposure to price volatility.
In addition, I would like to place emphasis on other three
milestones that have been achieved. Firstly, we have
successfully completed funding of Serrezuela Solar,
one of our Solar Thermal plants, which was unlevered;
this funding operation contributes 185 million euros of
liquidity to the Group’s growth.
04
1.Interview with
Specifically, with part of these funds, right at the start
of the 2016 financial year we have acquired two more
solar thermal assets, Extresol 2 and Extresol 3, each
with 49.9 MW, forming part of the agreement with
Bow Power for our asset acquisition strategy.
I would like to emphasise that this operation has been
carried out in accordance with Saeta Yield’s investment
criteria, prioritising the creation of value in terms
of shareholder return, and cash generation capacity.
Similarly, it has also been carried out in line with the
rigorous investment process set out by our Corporate
Governance, which seeks to respect the interests of all
our shareholders, particularly when it comes to these
decisive strategic operations.
Thirdly, I would like to highlight the fact that, thanks to
this first successful acquisition, the Board of Directors
has approved a dividend increase of 7.7% per share,
representing the confirmation of our commitment to
our shareholders to continue to increase the dividends
paid per share, as we acquire new assets, placing Saeta
Yield among the companies with the highest dividend
profitability on the Spanish stock market.
What are Saeta Yield’s medium
and long term objectives?
The Group’s strategic lines for the coming years include
achieving high total profitability for our shareholders.
To do this, we first propose to efficiently operate all
assets to extract maximum profitability from them. Saeta
Yield holds a very solid portfolio of renewable energy
generation assets, with very high efficiency thanks to
operating processes including the best professionals,
extensive and long-term operating and maintenance
agreements, exhaustive health and safety protocols,
as well as a full commitment to environmental
friendliness. The sustainability, visibility and recurrence
of cash flows is decisive for our business success.
In addition, we must grow in a sustained and controlled
manner through the acquisition of new energy assets,
both from our Sponsors, Bow Power, ACS and GIP, as well
as from third parties. For this purpose, we must continue
to make progress in the acquisition of new assets for
which we have right of first offer agreements, while
Bow Power continues to develop new opportunities for
the future. Similarly and in parallel, we must carry out
exhaustive market intelligence to allow us to decide to
acquire third party assets, mainly in Europe and Latin
American countries with stable regulatory frameworks
and revenue in strong currencies.
During all of these investment processes, we must
apply investment criteria that prioritise safety, the
creation of value and the cash generation capacity
of the acquired assets. Growth is important, but we
cannot realise it without appropriate discipline. The
first of these aforementioned acquisitions that we
have made, is an example that illustrates our efforts to
ensure that our growth is profitable and creates long
term value.
In order to continue with this investment plan, we’ve
set ourselves the strategic target of maintaining a solid
financial position, which guarantees sustainable cash
flows of the current portfolio.
Without a doubt, this first
year has been both a challenge
and an enormously satisfying
experience, from both a personal
and professional perspective.
To secure this solidity and stability of the Group, it
is our proposal to continue defining and developing
organisational mechanisms that allow us to bring
stability to the Group, reduce risks and further
cement our Corporate Governance. A milestone
that I would like to highlight from 2015 is the
achievement of all of our targets in terms of internal
policies and procedures, from among which I would
emphasise our Risk Management Policy, an aspect
that I consider key in a company like Saeta Yield,
that seeks to be an attractive long term investment.
Last, but by no means least, we have set the strategic
target of developing an organisational structure
that prioritises talent and teamwork, drawing
from the best professionals across all areas of the
Group. An independent, expert, autonomous and
effective team with excellent knowledge of how
to manage our assets. With key values such as
integrity and business ethics, and that allows us to
become an international benchmark while carrying
out our activity, contributing to social welfare and
sustainable development.
05
1.Interview with
How does Saeta Yield generate value
for the rest of the society?
In short, what are your thoughts on
Saeta Yield’s first year of operations?
Saeta Yield is a company that includes
sustainability among its values. This is something
that is absolutely key for us, as by definition
the activity that we carry out is a sustainable
alternative to the traditional energy generation
model, and we do this with respect for our
environmental and social surroundings.
Without a doubt, this first year has been both a
challenge and an enormously satisfying experience,
from both a personal and professional perspective.
We have achieved our main operational, financial
and strategic objectives. Over these months we
have created from nothing an efficient and solid
structure and a talented and committed team; we
have defined our own corporate culture aimed at
excellence, value creation, reliability and a clear
commitment to the Group’s values.
Our positive environmental impact is decisive.
During 2015, thanks to the renewable component
of our electricity generation, we actively avoided
the emission of 940,899 tonnes of CO2 in net terms,
assuming an emissions factor of 0.688 tonnes per
MWh produced. This figure places us among the
electricity companies with the lowest emissions
intensity in Europe. Our commitment involves
making a decisive contribution to the process to
transform the energy model, both in Spain as well
as in other countries where we will carry out our
activity in the future.
I consider what we have built up at Saeta Yield
during these first few months of operation to be a
success, and I am sure that, with the foundations
that we have constructed over recent months, we
will continue our strategic plan’s development,
achieve our main targets and expand our activities,
always with a commitment to profitability and
sustainability in the development of our corporate
project.
We know that the best way to achieve our strategic
objectives is through sustainable policies that seek
to reduce environmental, social and reputational
risk, and to reinforce our positive impact. These
benefits are a fact in the districts where we have
a presence. Thanks to our contributing by paying
taxes, wages, local contributions and the previously
mentioned positive environmental impact, I believe
that we are on the right path to continue being a
positive player to the benefit of our society.
06
2.About this report
This report, aimed at investors, shareholders and other Group
stakeholders, has been drawn up in accordance with directives
contained in the framework of the International Integrated
Reporting Council (IIRC1).
Similarly, it includes the recommendations set
out in European Union Directive 2014/95/EU on
non-financial reporting. As part of its commitment
to transparency and leadership, Saeta Yield is one
of the pioneering companies in the application of
these recommendations.
The purpose of the report is to provide readers
with a cross-sectional view of the Group, and to
simply and transparently show how Saeta Yield
generates value in the short, medium and long
term through a strategy capable of successfully
responding to all challenges and opportunities
that are faced.
The information contained in the report applies
to all of the activity of Saeta Yield S.A. and, unless
stated otherwise, the quantitative data correspond
to the Group’s performance at the end of 2015.
Forecasts are the result of an analysis of the
current context and its expected evolution. These
forecasts are subject to risk and uncertainty, so
the Group does not undertake to achieve these
objectives.
For the purpose of providing useful information to
stakeholders, this report places most emphasis on the
following matters that are of most relevance to the Group:
• Evolution of dividends and generation of value
• New acquisitions and growth expectations.
Investment criteria.
• Regulatory environment.
• RoFO agreement and relationship with the sponsor.
• Independence and corporate governance.
• Liquidity and funding sources.
• Debt level.
• Quality and characteristics of assets.
• Talent management.
• Environmental commitment.
• Occupational health and safety.
In line with the principle of information
connectivity, the contents of this report may
be supplemented with information from other
corporate documents, such as the 2015 Results
Report, the 2015 Annual Corporate Governance
Report, the 2015 Annual Accounts and the Group’s
Equity Story.
INFORME DE RESULTADOS 2015
(ENERO - DICIEMBRE)
Saeta Yield
Execution & Growth
Spring 2016
25 de febrero de 2016
1
For more information, visit the website of the International Integrated Reporting
Council http://integratedreporting.org/
2015 Results Report
Equity Story
2015 Annual Corporate
Governance Report
2015 Annual Accounts
07
3
The Group
3.1.
3.2.
3.3.
3.4.
3.5.
Description of the organisation
3.1.1. Mission, vision and values
3.1.2. Group Activity
Our assets
3.2.1. Wind assets
3.2.2. Solar thermal assets
Our stakeholders
Business model
Saeta in 2015
3.5.1. Operating Results
3.5.2. Evolution of the debt and liquidity
3.5.3. Acquisition of Extresol 2 and Extresol 3
3.5.4. Stocks and dividend growth
3. The Group
3.1. Description
of the organisation
Saeta Yield is the first energy asset Yieldco listed in euros.
So far, it has been operating solar thermal and wind
power assets, and its aim is to maintain solid growth in
dividends through the acquisition of new assets.
Saeta Yield S.A. is a company that operates energy assets,
currently 100% renewable generation assets. Its vocation
is to provide value to its shareholders by investing
in assets that generate highly stable and predictable
cash flows, supported by income that is regulated or
contracted in the long term, offering a total return to
shareholders, combining profitability through high
dividends and a growth in dividends per share.
1ST Robust portfolio of
operating assets with
stable cash flows
Saeta Yield offering a total
return to shareholders,
combining profitability through
high dividends and a growth in
dividends per share.
Saeta Yield has two main partners: the construction
and services group ACS, and the Global Infrastructure
Partners infrastructure fund. As well as being
the Company’s main shareholders, they have
formed a company for the development of new
energy infrastructure, known as Bow Power.
&
2ND Financial strength
and liquidity to face
controlled growth
Saeta Yield maintains a Right of First Offer2
(RoFO) agreement with both Bow Power and ACS
Industrial for developed assets, as well as a Call
Option3 for the Manchasol 1 generation facility
owned by Bow Power.
This growth is driven by global trends that shape
the current and future energy market, which lead
to policies and regulatory frameworks giving an
incentive for new energy infrastructure (mainly
renewables) and, consequently, the appearance of
new opportunities for our Group.
2
Attractive
Dividend Yield
based on stable
CAFD
DPS
Growth
based on having unique
investment capabilities
hrough the Right Of First Offer Agreement, Saeta receives a right to
T
make a first offer to, if successful, acquire certain assets established in
the contract prior to 31 December 2017, as well as any first offer on
any energy assets developed by Bow Power and or ACS Industrial and
to be sold,, during an initial period of five years that may be extended if
certain milestones are reached. This right does not mean a firm purchase
commitment by Saeta Yield, but a right to receive the first offer on any
energy assets to be sold by those companies. If there is no agreement
on the conditions, ACS Industrial / Bow Power may not sell the asset to
third parties at a lower price than that offered to Saeta Yield.
3
The call option is held over three solar thermal generation assets in
commercial operation, of which Saeta Yield has already acquired 2
during the first quarter of 2016.
09
3. The Group
Saeta, a successful Yieldco
Yieldcos are companies that aim to pay
periodic and increasing dividends. They tend
to be created by a parent company (known
as a sponsor) which, as well as creating
a primary vehicle with assets capable of
generating stable and predictable cash flows,
provides preferential access to new assets to
be developed in the future. It is an innovative
and continuously growing model that can be
attractive for investors seeking low risk returns
and growth forecasts for dividends per share.
Saeta Yield has a solid governance structure
with an independent management team
and experience in the sector, and has no
occupational relationships with its main
shareholders; its Board of Directors has an
independent majority and the company has
protocols in place to avoid conflicts of interest
and to promote decision making independence
and autonomy from the sponsor. Saeta Yield
also has all necessary resources and is not
financially dependent on its shareholders.
Saeta Yield has a series of unique aspects, making
it one of the best investment options in its sector.
The sustainability of Saeta Yield’s business model
is also given a boost by a solid financial structure,
which allows it to achieve its growth targets.
The Group analyses market evolution
continuously. It also constantly communicates
with shareholders, analysts and investors
with the aim of reacting to their concerns.
This allows to maintain a flexible position
and to respond as well as possible to
any uncertainties that may arise.
Financial discipline is key when it comes
to appraising and acquiring new assets,
and certain investment criteria are always
applied, aimed at maximising the rate of
return while minimising risks and ensuring
that stable cash flows are generated.
10
3. The Group
3.1.1. Mission, vision and values
values
Mission
To acquire and manage
energy infrastructure,
creating recurring value.
EXCELLENCE
while carrying out
our activity
ETHICAL
conduct of our employees
and partners
RELIABILITY
in achieving the Group’s
objectives
visiOn
We want to be an
international benchmark
while carrying out our
activity, contributing to social
welfare and sustainable
development.
Promotion of
TALENT
and
TEAMWORK
SUSTAINABILITY
to promote the improvement
of the company
11
3. The Group
Bow Power is a company created by the ACS Group and GIP for
the development of renewable assets, with the aim of offering
them to Saeta Yield once they are in operation and generating
stable cash flows.
3.1.2. Group Activity
Saeta Yield acquires and operates energy
infrastructure assets. The Group currently possesses
21 renewable generation projects, with a total
of 789 MW4, distributed among wind and solar
thermal assets. All of the Group’s assets are in Spain,
under the remuneration model defined by Spanish
regulations.
The asset operation activity is supplemented by the
search for new acquisition opportunities, thereby
favouring sustained growth of dividends.
Saeta Yield has two fundamental partners: ACS
Group and Global Infrastructure Partners (GIP).
Together, to develop projects to be offered to Saeta
Yield, have formed Bow Power, a joint venture
dedicated to the development of greenfield projects,
with whom Saeta Yield maintains a Right of First
Offer (RoFO) agreement and a Call Option on the
Manchasol 1 solar thermal plant.
Under this agreement, Saeta Yield has a preferential
acquisition position over all existing and future
energy assets, without geographical limitations, that
ACS Servicios Industriales, either individually or
jointly with GIP through Bow Power may develop
and intend to sell.
This creates a virtuous circle between Saeta Yield and
Bow Power for the development, construction and
operation of energy assets. The agreement allows risk
and the cost of capital to be effectively assigned between
the different activities on the value chain. Therefore,
Bow Power focuses on its core business, namely the
development and construction of assets, guaranteeing
faster turnover and improving their profitability and
competitiveness. Similarly, Saeta Yield has preferential
access to new high quality operational assets, which
generate stable cash flows, without having to assume
construction and development risks, at a competitive
cost of capital.
Furthermore, Saeta Yield outsources the operation
and maintenance of its assets to third parties through
long-term full-service contracts. The Group’s assets are
currently operated by Cobra Group, subsidiary of the
ACS Group, with excellent performance and competitive
operating costs. The contracted coverage includes the
replacement and maintenance investments associated
with the plants, reducing the risk of cost overruns
associated with operations.
Not only does Saeta Yield benefit from agreements signed
with ACS and GIP, but also enjoys their support as main
shareholders of the Group.
ACS Group contributes energy asset development experience
to Bow Power and Saeta Yield (over 10 GW of generation
facilities and 10,200 km of transmission lines constructed),
with a presence on all continents and a strong financial
position.
Global Infrastructure Partners (GIP) is a leading global fund
management company, dedicated to infrastructure investment.
GIP contributes its industry experience to Bow Power and
Saeta Yield, with management practices aimed at obtaining
high levels of risk adjusted profitability, by redoubling its
financial strength.
Cobra Group is the main company in ACS Group’s industrial
division. With extensive experience along the entire value
chain, it is dedicated to the promotion, development and
construction, as well as the operation and maintenance of
energy assets.
• >30,000 employees.
• Present in 45 countries.
4 In 2015, its installed power was 689 MW. Two solar thermal assets were acquired on
22 March 2016, adding 100MW to achieve the current 789 MW.
The ACS Group is the largest international construction
company. Among its many activities is the development and
construction of energy assets.
• €6.501 billion of revenue in 2015.
12
3. The Group
Virtuous
circle…
...with benefits
for all parties
Accretive growth visibility for Saeta Yield
ACS reinforces its strategy on the
concessional business while focusing
on its traditional EPC business
Quicker rotation of new Bow Power assets
EPC
Operating
assets
management
Exploitation
Development
Saeta Yield guarantees access to growth
opportunities in preferential conditions
… and ample room
for value creation
Development
Cost of capital
Asset
transactions
Yieldco Cost of
capital
Long Term Win-Win Relationship
Strong corporate governance
Sponsor Value
Creation
Saeta Yield Value
Creation
Value creation thanks
to proper risk allocation
13
3. The Group
Saeta Yield in Spain has
assets generating 789 MW
of installed capacity, distributed
in 16 wind farms and five solar
thermal plants.
3.2. Our assets
Saeta Yield has a portfolio of generation assets with an
installed capacity of 789 MW, all in Spain, distributed
across 16 wind farms with a total of 539 MW and five
solar thermal plants, accounting for 250 MW. These
are operational plants, with the best technology
and that generate stable cash flows under Spanish
regulations that support renewable energies. All Group
assets are at the optimal moment of their useful lives.
Assets have the majority of their operational lives
ahead of them, while having enough track record to
demonstrate high performance.
As of 2015, the 16 wind farms were 5 years old on
average, meaning that they have a remaining useful
life of at least 20 years. During 15 out of the 20 years,
the plants will operate with a regulated remuneration
scheme, and it expected that they will operate for at
least an additional 5 years only with market revenue.
5
This does not include the Extresol 2 and Extresol 3 assets acquired at the
beginning of 2016.
6
The performance ratio (PRC) values the plant’s operation based on
meteorological conditions entered into the simulation model provided by the
construction company after launching.
7
Graph data have been calculated according to estimated emission factors
based on the 2015 Report on the Spanish Electricity System, published by
Red Eléctrica Española (System production 254,473 GWh, total emissions
73,300.00 tCO2). The intensity of Saeta Yield’s emissions has been calculated
by considering the only emissions as being those produced by burning natural
gas in its solar thermal assets.
Energy generated by wind assets in 2015 totalled 946
GWh, with an average availability of 98.3%.
Solar thermal plants were 4 years old on average, with
a remaining useful life of 21 additional years, all under
a regulated revenue scheme. These solar thermal
plants produced 421 GWh, with an average yield
ratio6 of 113%.
Environmental performance
Through its operations, Saeta Yield contributes to
protecting the environment and to the fight against
climate change. The renewable nature of its assets brings
about a series of positive impacts on the environment,
including a reduction in greenhouse gas emissions.
Wind generation is emissions free, whereas a small
quantity of emissions is associated with solar thermal
generation, as it is necessary to burn natural gas to
prevent the thermal fluid from solidifying when solar
radiation levels are low. In net terms, in 2015 Saeta
Yield avoided the emission of 940,899 tonnes of CO2,
(949,279 gross tonnes), thanks to its low emissions factor,
which stood at 6.13 kgCO2/MWh, a figure that places it
among the electricity companies with lowest emissions
intensities in Spain7 and Europe.
During their useful regulatory life, all of Saeta Yield’s
assets will earn a fixed return on investment linked
to installed power. In addition, solar thermal power
plants are remunerated for their operation: the
remuneration they receive depends on the energy
they produce. These two regulated remuneration
components are added to each facility’s earnings for
selling energy at market prices.
AVOIDED EMISSIONS/GENERATION RATIO
(KgCO2/MWh)
694.42
Saeta Yield
406.38
Spanish Electricity System
0
100
200
300
400
500
600
700
800
700
800
emissions intensity
(KgCO2/MWh)
6.13
Saeta Yield
288.05
Spanish Electricity System
Non-nuclear termal
production
694.42
0
100
200
300
400
500
600
14
3. The Group
Added value in the environment
Saeta Yield promotes the economic and social
development of the places where it operates,
so it assesses the impacts of its activity on
its surroundings. The Group’s assets are
located in secure environments where
there is no risk of human rights violations,
so their protection is guaranteed.
By signing agreements with governments,
Saeta Yield contributes to creating direct and
indirect jobs in the local areas around its assets.
Approximately 50% of workers at generation
facilities are locals. Similarly, it prioritises the
hiring of local suppliers, whenever they have
the necessary capabilities to perform the job.
Because of this, thanks to the distribution of
value generated through taxes, salaries and local
contributions, Saeta Yield has become a positive
and beneficial player in the generally rural
surroundings where it operates, and where it is
difficult to generate sustainable economic activity.
Saeta Yield Assets
SALAMANCA
TESOSANTO
zamora
s ierra de
las carbas
burgos
la caldera
valencia
viudo I
viudo II
santa catalinacerro negro
ciudad real
manchasol 2
BADAJOZ
CASABLANCA
EXTRESOL 1
EXTRESOL 2
EXTRESOL 3
albacete
santa ana
huelva
monte gordo
cádiz
las vegas
los isletes
granada
valcaire
almería
colmenar 2
la noguera
seron 1
seron 2
tijola
wind
solar thermal
15
3. The Group
3.2.1. Wind assets
COMPANY
ASSET
CAPACITY
(MW)
REGULATORY
USEFUL LIFE
AVAILABILITY
(%h) 2015
AVAILABILITY
(%Energy) 2015
PRODUCTION
IN 2015 (GWh)
EQUIVALENT
HOURS 2015
Al Andalus
Serón 1
Serón 2
Tíjola
Colmenar 2
La Noguera
Las Vegas
Los Isletes
Abuela Santa Ana
50
10
36.8
30
29.9
23
25.3
49.5
2029
2029
2029
2028
2030
2029
2030
2029/2030
97.0%
98.8%
98.9%
97.4%
98.1%
97.1%
99.0%
98.6%
97.02%
98.99%
99.06%
98.22%
97.58%
97.29%
99.02%
99.11%
79.5
16.2
57.3
36.3
42.6
42.4
45.0
95.7
1,591
1,622
1,557
1,209
1,425
1,843
1,777
1,934
Santa Catalina Santa Catalina- Cerro Negro
Viudo I
Viudo II
41.5
40
26
2033
2033
2033
99.7%
99.6%
97.7%
99.35%
99.55%
97.16%
80.2
34.8
63.9
1.671
2,176
1,540
Boga II
La Caldera
Sierra de las Carbas
Tesosanto
22.5
40
50
2030
2030
2032/2033
99.3%
99.4%
99.3%
99.6%
99.4%
ND
46.3
91.3
114.5
2,056
2,282
2,289
Monte Gordo
Monte Gordo
48
2031
99.7%
99.4%
80.2
1.671
Valcaire
Valcaire
16
2033
99.6%
99.5%
34.8
2,176
CAPACITY
(MW)
REGULATORY
USEFUL LIFE
PRODUCTION
2015 (GWh)
YIELD RATIO
2015
EQUIVALENT
HOURS 2015
3.2.2. Solar thermal assets
COMPANY
ASSET
Extresol
Extresol 1
Extresol 28
Extresol 39
50
49.9
49.9
2034
2035
2037
135
133
139
106.2%
105.3%
113.1%
2,706
2,668
2,781
Manchasol
Manchasol 2
49.9
2037
136.2
105.6%
2,729
Casablanca
Casablanca
49.9
2039
149.8
128.1%
3,001
8
Acquired on 22 March, 2016. Its 2015 data are provided for information purposes and do not form part of the Group’s total..
9
Idem.
16
3. The Group
3.3. Our
stakeholders
Saeta Yield interacts directly with its stakeholders
and interest groups, and its relationship with them
is based on proactiveness and anticipation. It has
a range of different communication, participation
and dialogue channels available for this purpose,
allowing the company to gather information
about their expectations, and to incorporate it
into the Group’s action plans and decision making
processes.
In this sense, identifying stakeholders involved
in the activities of the Group is an essential prerequisite for the design of adequate action plans
and the generation of shared benefits.
Public organisations
Local government
National government
International organisations
Electricity system regulator
Civil society
Third Sector
Sector associations
Local community
Media
Electricity consumers
Financial Community
Shareholders and investors
Debt providers
Analysts and agencies
Credit entities
Human Resources
Employees and family
members
Business Community
Suppliers
Partners
Contractors
Subcontractors
Global level: Stakeholders in the company’s area of influence.
Local level: Stakeholders in the area of influence of assets.
17
3. The Group
The contents of this report aim to meet the information
needs of Saeta Yield’s stakeholders. The following table
shows the relationships between areas of information,
stakeholders to whom the information is most relevant,
and the section of this report where this information can
be found.
SUBJECT
Evolution of dividends and generation of value
SECTION
4.2
Regulatory environment
5.2
Independence and corporate governance
Liquidity and funding sources
3.1 and 4.2
6
3.5.2, 4.3 and 5.1.3
Debt level
3.5.2
ASSET QUALITY AND CHARACTERICTICS
3.2
Talent management
4.4, 8 and 10
Environmental commitment
3.2, 4.1 and 9
Occupational health and safety
4.1, 8 and 11
STAKEHOLDER
3.5.4 and 4.2
New acquisitions and growth expectations
ROFO agreement and relationship with the sponsor
Regarding channels of communication with
stakeholders, the Policy for communication and
contact with shareholders, institutional investors and
proxy advisors sets out the principles for guaranteeing
transparent, clear, accurate, continuous and immediate
communication.
18
3. The Group
The main channels of communication with
shareholders and the market in general are Saeta
Yield’s corporate website10 and the website of the
Spanish National Securities Market Commission
(CNMV)11 through the publication of relevant
information. Additionally, the Company has other
specific communication channels12, such as the
shareholders’ forum and the ethics channel, as well
as the shareholder services office.
Other stakeholders that have a relationship with
the Group are its own employees, its service
providers and subcontractors. Saeta Yield
also maintains an ongoing relationship with
government bodies, both during the course of its
local, regional and state activity, as well as in the
sector’s general discussion forums. It is also in
close contact with Spanish regulators, particularly
the Spanish National Markets and Competition
Commission, with the Electricity System Operator
(REE) and the Market Operator (OMIE), which
acts as buyer of the energy that is produced, and
with society in general, which benefits from the
company’s business activity.
Institutional Relations activities are carried out by the
Group’s CEO, who always abides by ethical principles
of social responsibility and who aims to constantly
improve the Group’s competitiveness and value for all
of its shareholders.
The Group integrates social responsibility in all parts of
the organisation and day-to-day practices, by sharing
knowledge, information and experience. It also does
this by running partnership projects, promoting
fair practices, building alliances with organisations,
associations and other industry actors. Some of the
main ones are:
• A
PPA (Renewable Energy Business Association)
http://appa.es/
• A
EE (Wind Power Business Association)
http://www.aeeolica.org/en/
• P
rotermosolar (Spanish Association
for the Solar Thermoelectric Industry)
http://www.protermosolar.com/
10http://www.saetayield.com/?lang=en
11 http://www.cnmv.es/portal/home.aspx?lang=en
12For further information, visit the online version of the Policy on Saeta Yield’s
web page http://www.saetayield.com/wp-content/uploads/2016/01/sayce-soc-012-comunication-with-investors-policy2.pdf
19
3. The Group
3.4. Business model
Greenfield
Brownfield - Saeta Yield’s area of activity
high capital costs and high risk
Promotion
Construction
low cost of capital and less risk
Commissioning
Acquisition
Operation & Management
m&A
Capital ±
undistributed
cash flows
Agreements with
sponsor
ROFO
Call Option
Other
developers
Assets in operation
Capital
increases
Investors and
shareholders
Stable and predictable
cash flows
Service provider
payments
Distribution of
cash produced in
companies
Total return
DIVIDEND: LARGE PERCENTAGE
OF CASH FLOWS. DPS INCREASE
Other
operators
BANKS
Saeta Yield
Companies
Bow Power and Saeta Yield form a virtuous
circle in which both obtain benefits:
Saeta Yield accesses mature, high quality assets without
assuming development and construction risks.
Bow Power turns its assets over at the optimal moment,
funding new projects with funds received from Saeta Yield.
Other
Operation and maintenance of Saeta Yield assets is
subcontracted through a full long term contract that gives
incentives for excellent operation and maintenance, with
remuneration based on performance and production.
Funding
Debt Payments
Regulated income / ppa €/$
Renewable energy produced
USERS
Production is sold under long-term regulated or contracted prices
(PPA), allowing stable cash flows to be estimated and maintained:
Regulated prices: incentives, price
fixing, reasonable profitability.
Power Purchase Agreements (PPA): fixed prices,
contracted in the long term with another party.
20
3. The Group
SAETA YIELD’S
POSITION 2015
CREATION OF
VALUE IN 2015
Financial capital
€ 701.56 M of capitalisation
€ 722.9 M of net debt
Financial value
€ 156 M of EBITDA
€ 220.6 M of operating revenue
€ 128 M of cash available for distribution (CAFD)
€35.2 M of dividends distributed
(€0.43 of dividend per share)
Industrial capital
789 MW of installed power (1)
454 MW available in ROFO assets(1)
Human capital
38 excellent professionals
Talent management
Industrial value
1,367 GWh produced
Acquisition of Extresol 2 and Extresol 3
(March 2016)
Social capital
Stable stakeholder relations
Social value
Local direct and indirect jobs
€ 11,096 invested in occupational risk prevention
0 serious accidents
€ 4.0 M of tax paid (corporate, 7% electricity
generation, local taxes)
Natural capital
557,684 GJ of energy consumed
4,218,647 m3 of water used
Environmental value
940,899 tCO2 avoided, net
Emission of 0.006 tCO2/MWh
Intellectual capital
Extensive knowledge of the business
Innovation
*These figures take into account the acquisition of the Extresol 2 and
Extresol 3 assets at the start of 2016.
21
3. The Group
3.5. Saeta in 201513
2014
2015
Birth of Saeta Yield
We consolidated our market position
Installed
power
Installed
power
689 mw
689 mw
Production
Production
1,367 gwh
150 mw
421
gwh
Yield: 113,3%
Operating
revenue
118.9
M€
18% of market
1,516 gwh
Operating
revenue
±1.7%
217 m€
220.6 m€
ebitda
±2.1%
Comparable net
profit*
±42.3%
Net debt
-28%
152.4 M€
18.1 M€
1,003.4 M€
ebitda
155.7 M€
Incorporation of the Saeta
Yield, S.A. Holding Company,
with 10 project companies and
installed power of 689 MW.
78%
31%
69%
18%
54%
Regulated
revenue 71%
82%
Price achieved
51.9 €/MWh
52%
81.4 M€
58% regulated
58%
46%
48%
Price achieved
44.8 €/MWh
73.7 M€
Growth of the
income base
Diversification of
cash sources
±
Lower risk
Comparable net
profit*
Total cash available for
distribution (CAFD)
CAFD Operational
Assets
128 M€
74 M€
Increase in available
cash flows
Net debt
Dividends
paid
35.2
M€
0.43 €/share
Dividend
growth
722.9 M€
20 January 2015:
Change in the Company’s
Administrative Body, adopting
the form of a Board of Directors
16 February 2015
Admission for trading of Saeta Yield S.A.
assets on Spanish stock exchanges, at an
initial listed price of €10.45 per share.
Offer for the sale of 51% of share capital.
C
omparable net profit is calculated by
eliminating any extraordinary or non-recurring
impacts that may have occurred during the year
from the attributable net profit. For further
information, see the 2015 Results Report.
27 January 2015:
13 F
or further information, consult Saeta Yield
Results Report http://www.saetayield.com/
wp-content/uploads/2016/02/SAETA-YIELDRESULTS-REPORT-ENG-2015.pdf
29 January 2015:
Acquisition of
new assets
539 mw
946 gwh
Availability: 98.3%
100,8
M€
42% of market
Market 42%
revenue 29%
27 March 2015
*
We began to grow
22%
82% regulated
25.8 M€
31 October 2014
2016
I ncrease of share capital by €200M
by issuing 20,013,918 new shares,
each with a nominal value of €1.
C
ontract of a €80M revolving credit
facility, for a three year period
under a Club Deal scheme.
23 April 2015
Signing of a Right of First Offer
Agreement and Call Option with ACS.
Purchase by GIP of 24.01% of
Saeta Yield’s share capital.
Sale by ACS to GIP of 49% of Bow Power.
25 June 2015
First General Shareholders’ Meeting.
22 December, 2015
Project funding contract with
Serrezuela Solar II S.L., Saeta Yield
subsidiary, worth a total of €185M.
22 March 2016
Acquisition of the solar thermal
plants included in the ROFO,
Extresol 2 and Extresol 3 from
Bow Power for €119 M.
Approval of a 7.7% dividend
increase to €61.4 M per year.
29 May, 29 August, 27 November -2015, 3 March, 1 June -2016
Distribution of dividends against the issue premium - a total of 79 euro cents per share.
The 3 from 2015 and the first from 206 correspond to the year 2015 and total 61 euro
cents per share, which in prorated terms, based on the number of days that Saeta Yield
has been listed, meets the dividend distribution commitment adopted by the Group
upon floating on the stock exchange (€57 M / 70 cents per share for a full year).
22
3. The Group
2015 has been a particularly important year for Saeta
Yield. In addition to its listing on the stock exchange
and the creation of the organisational structure, during
the year the company has achieved the following
milestones:
This value represented a 2% increase from the operating
result in 2014, mainly due to the effect of the increase
in the price of electricity (which reached €50.3 per
MWh compared to €42 MWh during the previous year),
which has compensated for the drop in production.
• Operating results above market expectations.
EBITDA reached 156 million euros, 2% higher than the
previous year. The Group’s diversified portfolio favours
stable production and income, which is reflected in a
solid EBITDA. This figure is 2 million euros higher than
expected by the market, thanks to income growth and
cost reduction.
• T
he funding of Serrezuela Solar, essential for
consolidating the Group’s growth strategy.
• The payment of dividends as promised to the market.
• T
he acquisition of Extresol 2 and Extresol 3, the first
two RoFO assets acquired from Bow Power, which
have allowed an increase in dividend objectives and
to confirm Saeta Yield’s growth strategy.
3.5.1. Operating Results
Electricity production of the portfolio as a whole
reached 1,367 GWh, representing a 9.8% drop compared
to the previous financial year, due to the fact that there
was less wind in 2015 than in 2014. The assets have
had exceptional operations during this financial year,
achieving high levels of availability and efficiency.
In 2015, the Group obtained operating income of
220.6 million euros, with wind energy assets
contributing 46% and solar thermal assets 54%.
Net profit in 2015 reached 16 million euros. Excluding
the negative financial results due to the restructuring
of derivatives carried out as part of the initial public
offering operations in February of that year, the
comparable net results would have totalled 26 million
euros, which would have represented growth of 42%
compared to 2014.
Cash available for distribution (CAFD) amounted
to 128 million euros, of which 54 correspond to
extraordinary operations that took place due to the
public offering14, and 74 million euros correspond to
ordinary operations of the Group’s operating assets.
This figure is 2 million euros higher than that expected
by the market, and 12 million euros higher than the
recurring CAFD figure for 2015, which stood at 62
million euros.
EBITDA reached 156 million euros,
2% higher than the previous year.
This figure is 2 million euros higher
than expected by the market.
Out of this CAFD total, Saeta Yield distributed a total
of 35 million euros in dividends to its shareholders.
In annual terms, this amount meets the Group’s
commitments acquired during the public offering
process, which determined the distribution of
57 million euros of dividends per year. Taking
into account that an additional 14 million euros,
corresponding to 2015, were distributed in March
2016, the total figure amounts to 49 million euros, in
proportion to the number of days that the Group has
been publicly listed.
14Specifically, the capital increase (+€200 M), liquidation and writing-off of
inter-group accounts to December 2014 (net balance of +€51 M), the early
amortisation of debt (-€141 M) and the restructuring of interest rate hedging
derivatives associated with the debt (-€56M).
23
3. The Group
3.5.2. Evolution of the debt and liquidity
In 2015, Saeta Yield’s net debt saw a reduction of
28% when compared with that seen in December
2014. This decrease is due to capitalisation
operations that occurred at the same time as
the public sale offer 15. The ratio of net financial
debt/EBITDA at the close of 2015 was 4.6x.
Gross debt stood at 907 billion euros in 2015,
18% lower than in 2014. All of Saeta Yield’s
gross debt corresponds to bank loans through
project finance schemes without resort to the
parent company. The average life of the debt is
Leverage (€M)
Gross debt
Long term project funding
Short term project funding
Cash and cash equivalents
Short-term financial assets16
Net debt
Net debt/EBITDA
less than 13 years. 75% of outstanding debt is
hedged from interest rate fluctuations through
derivative contracts (Interest Rate Swaps). Lastly,
the average cost of debt decreased from 4.9% at
the end of 2014 to 4.0% at the end of 2015.
On 22 December, 2015, the Group signed a project
finance contract for Serrezuela Solar, for a total
of 185 million euros. This funding comprises two
parts, the first of 135 million euros at a variable
rate, with a syndicate of four financial entities, and
a second part of 50 million euros at a fixed rate,
with the European Investment Bank. Both parts
of this funding mature on 30 December, 2031.
2014
1,103.8
1,038.9
64.9
100.4
45.9
54.4
1,003.4
6.6x
2015
906.6
848.2
58.3
183.6
138.4
45.2
722.9
4.6x
Gross debt stood at 907 billion
euros in 2015, 18% lower than in
2014. Net debt saw a reduction
of 28% when compared with
that seen in December 2014.
Short-term liquidity at the end of the financial year stood
at 394 million euros considering the funding agreed for
Serrezuela Solar II, other short-term deposits available
in the first half of 2016, as well as the revolving credit
line, both unavailable on the aforementioned date.
Var.
-17.9%
-18.4%
-10.1%
±83%
±201.2%
-16.9%
-28%
15For more information, consult the leaflet on the sale offer and listings admission of
Saeta Yield’s shares, approved by the CNMV on 30 January 2015.
16Includes €43 M in the reserve account for servicing debt and bonds.
24
3. The Group
The acquisition of the Extresol 2
and Extresol 3 solar thermal plants
was completed on 22 March 2016,
the first purchase made by Saeta
Yield in its history.
Liquidity at
the close of the
2015 financial year
105
m€
Cash at SPVs
(w/o DSRA)*
36
m€
Cash at HoldCo
173
m€
Serrezuela financing**
80
m€
Revolving credit facility
Following the acquisition of Extresol 2 and Extresol
3 at the beginning of 2016, the Group’s net debt grew,
following the disbursement of 119 million euros paid
from the Group’s own funds and subordinate debt,
and after consolidating 413 million euros of net debt
associated with these assets. The liquidity available
after this purchase stood at 276 million euros.
This acquisition will increase the Group’s recurring
CAFD to 68.2 million euros, considering the higher
financial expenses for the purchase of equity.
This acquisition has allowed the Board of Directors to
approve an increase in dividends up to 61.4 million
euros (7.7% higher than previous levels).
This financial strength and high liquidity will
make it possible to fund new acquisitions of energy
infrastructure assets during 2016 and 2017, in line with
the Group’s growth objective.
e1
3.5.3. Acquisition of Extresol 2 and Extresol 3
As the culmination of a process that lasted for most of
the second half of 2015, the acquisition of the Extresol
2 and Extresol 3 solar thermal plants was completed
on 22 March 2016, the first purchase made by Saeta
Yield in its history.
e2
e3
* Cash in DSRA and bonds: € 43 M
**Serrezuela funding was not made available in 2015.
Net funds after charges and DSRA funding.
These assets were included in the RoFO agreement
with Bow Power, and were acquired for 118.7 million
euros. The acquisition meets Saeta Yield’s investment
criteria and will contribute, in ordinary recurring
terms and before financial expenditure associated
with the acquisition, 12.5 million euros of CAFD
per year, representing a transaction cash yield of
approximately 10.5%.
capacity
production in 2015
revenues in 2015
ebitda in 2015
99.8 mW
272 gw/h
78 m€
53 m€
25
3. The Group
3.5.4. Stocks and dividend growth
Saeta Yield has been listed on Spanish Stock Exchanges
since February 2015. Its shares were admitted to trading at
an initial listed price of 10.45 euros per share, with an initial
market capitalisation of 852.5 million euros.
Evolution of Saeta Yield shares17
11.5
10.5
10.45 €
31/12/15
8.60 €
9.5
8.5
7.5
f-15
m-15
m-15
a-15
m-15
m-15
j-15
j-15
j-15
a-15
s-15
o-15
o-15
n-15
d-15
d-15
e-16
End of Year price (€/share)
Initial market flotation price (€/share)
Minimum price
Maximum price
Number of shares
Market capitalisation at the end of the year (millions of euros)
Dividend paid in 2015 (€/share)
f-16
f-16
m-16
a-16
a-16
2015
8.60
10.4518
7.88
10.74
81,576,928
701.56
0.43
17Madrid Stock Exchange: http://www.bolsamadrid.es/ing/aspx/Portada/Portada.aspx
18Share price at 16 February 2015 following admission to trading of Saeta Yield’s shares on the Spanish Stock Exchange.
26
3. The Group
The Group offers its shareholders an attractive
dividend yield. Saeta Yield’s current dividend policy
states that most of the recurring cash available
for distribution (CAFD) must be distributed to
shareholders19. The company makes four distributions
per year, approximately 60 days after the end of each
quarter. Similarly, dividends are distributed with a
charge to the issue premium, which represents major
tax advantages as no tax is retained by the Tax Office in
Spain on each payment.
As previously mentioned, the Company paid 35.2
million euros of dividends in 2015, equivalent to 0.43
euros per share20. This figure, along with the 14.3
million euros corresponding to the last payment of
2015, distributed in March 2016, meets the dividends
objective for 2015.
Following the purchase of the Extresol 2 and Extresol
3 assets on 22 March 2016, the Saeta Yield Board of
Directors approved a 7.7% dividend increase, to 61.4
million euros per year.
Attractive
DPS growth
±7.7%
€ 0.752
€ 0.699
per share*
€ 57 m
per share*
€ 61.4 m
Dividend policy
Regular quarterly
dividend
208
Payout on
recurrent CAFD
Tax efficient dividend,
share premium reserve
2015
1Q 2016
Initial Portfolio
RoFO Dropdown
19The Saetas Yield’s dividend policy can be modified by theBorad of Directors.
20Calculated based on shares issued on 25 February 2016: 81,576,928
* The dividend was paid proportionally to the number of days of listing in 2015. In
2016, growth in the proportional dividend since the acquisition date of Extresol 2 and
Extresol 3, on 22 March 2016.
27
4
Strategy
4.1.Excellent, secure and sustainable operation
4.2.
Sustained and controlled growth
4.3. Financial strength and high liquidity
4.4. Organisational structure with talent
4.Strategy
2015 was the year when Saeta Yield consolidated its position in
the market. The Group has achieved all of the milestones it set
out for itself in its strategic plan for the year, and it is facing
2016 with optimism and with the aim to continue growing.
Saeta Yield’s main purpose is to maximise
shareholders’ total return by paying an attractive
dividend based on the operational assets in its
portfolio, and the sustained increase in dividends
per share due to new asset acquisitions.
To achieve this objective, the Group’s strategy
is based on the following pillars:
4.1. Excellent, secure
and sustainable operation
The excellent management of portfolio assets
is key for the generation of sustainable,
predictable and stable cash flows. For this
purpose, the Group encourages the best
operational processes in its generation plants
and employs a team of professionals with
an average of over 10 years of experience in
the management of these types of assets.
A good part of the success of our plants is due
to the long-term operation and maintenance
contracts, which include maintenance and
replacement investment needs in order to
eliminate the variability in plant results and
to ensure that cash generation targets are met.
These contracts, which have been signed with
parties that are well known in the market, such
as Cobra Group, guarantee efficiency and quality.
Saeta supervises these operation and maintenance
contracts through its on-site teams, which include
management and control teams, as well as
through its occupational risk prevention teams.
The Group does not only operate assets. It is
also involved in the sale of energy at all levels.
Among many activities, it actively supervises,
through a range of different market agents,
participation in the daily energy markets. It has
also recently prepared tests for participating
in System Adjustment Services markets.
Saeta Yield guarantees the safety of its workers
and employees, and acts under the strictest
standards, always seeking continuous improvement.
Health and safety commitments are set out in the
Occupational Risk Prevention Policy. This culture
of prevention and responsibility is promoted in
the Group at all levels, and is driven by senior
management21. When the norm is approved,
the Group plans to start the ISO45001 standard
certification process. Saeta Yield’s commitment to
safety is reflected in its operating results: no accidents
resulting in sick leave occurred in the year 2015.
Similarly, the Group is committed to innovation
and development. By organizing working groups,
it attempts to identify possible improvements to
the facilities that could lead to greater efficiency
in the production and consumption of resources.
Through its operations, Saeta Yield contributes
to the transition to a new sustainable energy
model that aims to protect the environment and
to fight against climate change. The renewable
nature of its assets brings about a series of
positive impacts on the environment, including
greenhouse gas emissions avoided by producing
electricity without using fossil fuels. The Group
also has procedures in place that go beyond
what is required by legislation and that aim to
minimise negative effects on the environment and
maximise the positive ones, thereby guaranteeing
the efficient use of resources and the adequate
management of any waste that is produced.
21 For more information about Saeta Yield’s occupational health and safety
performance, consult the Appendix of this report.
29
4.Strategy
4.2. Sustained and
controlled growth
The acquisition of new assets, especially renewable ones,
is one of the key elements in Saeta Yield’s strategy. The
close relationship with major partners and shareholders,
Bow Power, ACS Group and GIP, plays a fundamental role
in achieving this objective.
The Right Of First Offer (RoFO)22 and the Call Option for
the Manchasol 1 solar thermal plant give Saeta Yield a
preferential right to making an offer for and buying the
energy assets developed by Bow Power or ACS Servicios
Industriales.
A series of RoFO assets that meet Saeta Yield’s investment
criteria have currently been identified, and it is very likely
that they will be acquired by the Company, subject to an
agreement of the price and conditions with Bow Power.
These RoFO assets are located in the Iberian Peninsula
(Spain and Portugal) and in Latin America (Mexico, Peru
and Uruguay)23. These are assets in countries with stable
regulatory frameworks offering remuneration in strong
currencies (US Dollars and euros), thereby meeting the
Group’s investment criteria.
Right of First
Offer Agreement
Initial ROFO
Assets
(454MW &
400km)
Initial ROFO
Assets
• B
ow Power will offer the Initial
ROFO Assets as soon as they meet
Saeta’s investment criteria and no
later than December 2017.
• C
all option on the Spanish solar
thermal plant of Manchasol 1.
New ROFO
Assets
• R
ight of First Offer on the energy
related infrastructure assets to be
developed by Bow Power and ACS
Servicios Industriales worldwide.
Key Terms
• I nitial agreement term of 5 years,
extendable automatically in 3-years
periods if Saeta executes at least one
acquisition in precedent 2 years.
• I f ACS does not accept the Saeta’s
offer, ACS will only be allowed to
sell the asset to third parties during
the following 18 months in more
favorable terms.
Wind
Oaxaca (mexico)
Marcona (peru)
Tres Hermanas (peru)
Kiyu (uruguay)
Lestenergia (portugal)
102 mW
32 mW
97 mW
49 mW
124 mW
usd
usd
usd
usd
eur
In Operation
In Operation
UNDER CONSTRUCTION
UNDER CONSTRUCTION
In Operation
Solar Thermal
manchasol1 (spain)
50 mW eur In Operation
Transmission
cajamarca (peru)
400 km usd UNDER CONSTRUCTION
22 For further information, consult the stock exchange flotation brochure available at
http://www.cnmv.es/portal/home.aspx?lang=en
23 ACS currently has a 51% share in two wind power generation facilities in Peru, with a
total of 129 MW, a 75% share in Lestenergía, totalling 124 MW, and a 100% share in
a solar thermal plant in Spain, a wind power generation facility is Mexico and a wind
farm in Uruguay, as well as transmission line assets in Peru. Similarly, Lestenergia is
developing a repowering process to increase its capacity by 20MW.
30
4.Strategy
Investment criteria
The RoFO agreement offers several advantages.
Firstly, it offers visibility of the Group’s growth
potential, as all energy assets developed by Bow
Power or ACS Servicios Industriales are part of this
first offer agreement, allowing investors and other
stakeholders analysing the Group to know about its
planned future investments.
Secondly, the agreement offers a preferential
position in the process for negotiating and
defining the asset purchase price. By virtue of the
RoFO Agreement, Bow Power or ACS Servicios
Industriales must offer assets at a price that they
consider to be a reasonable market price, since, if
the sale does not materialize during subsequent
negotiations with Saeta Yield, they may not sell
these assets at a lower price for the following 18
months. This point is key to the “Greenfield” asset
development model, which primarily seeks quick
turnover in the asset portfolio at market prices, to
maximise profitability and reinvest capital.
In addition to the purchase of RoFO assets, the
Group intends to acquire operational assets from
third parties that can generate additional value
for shareholders. For this purpose, it continuously
analyses possible opportunities on both the
European and American markets.
Saeta Yield applies a series of criteria when making
new acquisitions, with the aim of ensuring that
these acquisitions generate value and allow the
Group to keep its risk profile at moderate levels.
New assets must:
dd value: their profitability must be
A
greater than their capital cost and it must
be in accordance with the risk of the
asset.
dd cash flow: they must generate stable
A
and long-lasting cash flows that allow
the Group to increase dividends per
share.
B e high quality and have long residual
useful lives.
ave stable income through an energy
H
purchase agreement with a reliable
party, or through a solid regulatory
scheme.
P rovide income in a strong currency,
within a stable regulatory and legal
framework and in a reliable political
system with rule of law.
31
4.Strategy
4.3. Financial strength
and high liquidity
4.4. Organisational
structure with talent24
Saeta Yield’s solid and sound financial structure is a
key element for undertaking its growth strategy.
Saeta Yield has a highly competitive professional
team of 38 people25 with a high level of
specialisation, with knowledge and experience
in key markets, which contributes high value to
the Group and seeks efficient management.
Saeta Yield is currently a well-capitalised company
with moderate leverage. Following the purchase of
the Extresol 2 and Extresol, 3 solar thermal generation
facilities, the net debt to EBITDA ratio increased to 5.8
times. Given the regulated nature of its activity and
the extensive residual life of its assets,the Group has an
incremental leverage capacity.
The Group regularly analyses different funding sources
in order to select the best combination that allows it
to fund future acquisitions and/or improve its current
debt conditions, with the aim of minimising costs and
adapting the debt profile to the operational asset profile,
thereby maximising dividend distribution.
Similarly, Saeta Yield has significant liquidity and
greater leverage potential, which should allow it to
continue to invest in the acquisition of new assets
during 2016 and 2017; capital increases are not
necessary in the medium term.
24 For more information about Saeta Yield’s talent management performance, please
see the Appendix of this report.
With the aim of promoting excellence
while carrying out duties, Saeta Yield
encourages the development of its
employees’ capacities through a range
of different training programmes.
Saeta Yield’s organisational structure, which
prioritises talent and team work, allows the Group
to become an international point of reference
in its sector, as well as contributing to social
well-being and sustainable development.
Equal opportunities
All employees share key values such as
ethics, honesty and integrity, and display
exemplary conduct, complying at all times
with current legislation and internal standards,
and voluntarily adopting best practices.
Equality of opportunity among all employees
and maintaining a discrimination free working
environment are two of Saeta Yield’s essential
commitments. In this sense, employee selection and
promotion is based solely on objective criteria of merit
and ability.
Remuneration and recognition policies reward
and give an incentive for excellence and guarantee
the loyalty of talent. All Saeta Yield employees
are subject to a performance assessment. Similarly,
100% of professionals have access to variable
remuneration plans. This incentives system
is based on achieving a range of objectives set
annually, and is an effective management tool
within the Group’s human resources policies.
The Group follows the directives developed in the
Declaration of the International Labour Organisation
(ILO) related to the fundamental principles at work.
Similarly, Saeta Yield promotes the reconciliation of
the professional and personal lives of its employees.
25 24 men and 14 women. Dated December 2015.
32
5
favourable
environment for
growth
5.1.
Trends and opportunities
5.1.1. Growth in energy demand
5.1.2. Towards a low carbon economy
5.1.3. Availability of funding sources
5.2. Regulatory framework
5.favourable environment
for growth
5.1.1. Growth in energy demand
Description of the situation
5.1. Trends and
opportunities
Factors such as increased energy demand, transition
to a low-carbon economy and competitive access to
funding make renewable technologies the electrical
energy generation sources with highest growth
expectations.
Extensive experience in the management of
renewable assets, adequate strategic positioning as
the first European Yieldco and good access to capitals
markets make Saeta Yield a company of the future,
capable of taking advantage of the opportunities in its
surroundings.
P opulation growth, along with increased
wealth, the consolidation of middle
classes in emerging countries and a
more urban lifestyle, will lead to a major
increase in worldwide energy demand,
as well as demand for electricity.
Figures of interest
Opportunity for Saeta Yield
Rapid economic and urban growth will have a direct
impact on the development of energy infrastructure,
such as the assets in which Saeta Yield invests.
Renewable and electricity transmission
technologies will see growth as a consequence
of increased demand for energy.
Saeta Yield has an ideal strategic position in the
electricity market. It is the first Yieldco in Europe
and counts with partners, Bow Power and ACS
Servicios Industriales that allow it to access
new high quality renewable and conventional
energy, and transmission line assets.
T he world’s population will be 8.5 billion people in
2030, 9.7 billion in 2050 and 11.2 billion by 210026.
6 6% of the world’s population will
live in cities by the year 205027.
Saeta Yield is an expert renewable energy
operator with capacity to invest in and operate
assets involving a range of different technologies,
including the solar thermal, particularly
complex due to its industrial nature.
DP will increase at an average
G
rate of 3.5% by 204028.
orldwide demand for energy will
W
The Group’s financial solidity and an expert
investment and corporate development team allows
growth to be tackled with guarantees of success.
increase by 1/3 by the year 204028.
n average annual growth of 2% will be
A
26 United Nations. 2015. World Population Prospects. The 2015 Revision.
experienced in electricity demand until 204028.
Additionally, a solid Corporate Governance promotes
that the different stakeholders related to Saeta Yield
conduct their relationships with the necessary trust.
27 United Nations. 2014. World Urbanization Prospects. The 2014 Revision.
28 International Energy Agency. 2015. World Energy Outlook 2015.
34
for growth
5.1.2. Towards a low carbon economy
Descripción de la situación
The world’s energy system is responsible for
two thirds of worldwide CO229 emissions,
which is why there is a proposed necessity to
advance towards a sustainable, low carbon
and environmental friendly energy model.
At the Paris Climate Change Conference (COP21)
held in December 2015, the governments of
196 countries agreed to take measures to avoid
average temperature increases from exceeding
2°C by the end of the century, representing a
milestone in the fight against climate change.
Figures of interest
The European Union has set an emissions reduction
target of 40% by 2030 (with 1990 as a base)30.
Similarly, many other countries are developing
policies to promote reductions in CO2 emissions and
promote the development of renewable energies.
Saeta Yield is a company committed
to the fight against climate change and
protecting the environment.
An investment of 13.5 billion dollars is
required to meet the COP21 targets31.
In fact, Saeta Yield is a contributor to change, as
it has a renewable generation portfolio of 789
MW that in 2015 generated 1,367 GWh of clean
energy and avoided the emission of 940,899
net tonnes of CO2 into the atmosphere.
By 2040, subsidies granted to renewable energies will
have totalled 5.9 billion dollars, of which 70% will be
channelled into renewable electricity generation28.
The Group has the possibility to
access new renewable assets through
agreements with its partners.
Saeta Yield has potential to promote the
transition to an energy model involving the
decarbonisation of the economy, due to the
renewable nature of its business thanks to
its agreements, among other aspects.
29 International Energy Agency. 2015. Energy Technology Perspectives for 2015.
30 International Energy Agency. 2015. Energy and Climate Change. World Energy
Outlook Special Report.
31 International Energy Agency.2015. Energy and Climate Change. World Energy
Outlook Special Briefing for COP21.
32 These figures include the Extresol 2 and Extresol 3 assets, acquired at the
Renewable energies are increasingly competitive.
Due to technological progress and reduction
in costs, wind and solar energy sources have
reached a sufficiently high level of maturity
to compete with conventional energy sources
with very moderate levels of subsidy, and even
without assistance in exceptional cases. Progress
is expected with this trend, and subsidies required
by each asset will continue to decrease.
beginning of 2016.
35
for growth
5.1.3. Availability of funding sources
Description of the situation
The current scenario of low interest rates, the
appearance of new funding sources aimed at
these types of assets, and the aforementioned
increased competitiveness of renewable
generation sources, have increased interest
among major investors in medium- and
long-term investments in renewable energy
projects that generate attractive profits.
In this context, institutional investors
such as pension funds, asset managers
and insurance companies are taking on
special relevance, as they are increasingly
committed to making investments in this
sector, either directly or through investment
vehicles, such as Saeta Yield itself.
Figures of interest
Investment in renewable energy sources,
excluding major hydroelectric power stations,
stood at 285.9 billion dollars in 201533.
The six largest renewable energy investment
funds obtain profits of between 5.5% and 7.0%34.
41.8 billion dollars were invested
in green bonds in 201535.
Socially responsible funds have 4.3 billion
dollars under their management.
The availability of funding favours the Group’s
access to capital, allowing it to maintain
a solid financial structure with sufficient
liquidity to continue with its growth strategy,
through the acquisition of new assets.
Similarly, the diversification of funding
sources offers Saeta Yield the opportunity
to minimise dependence on banks.
Lastly, greater appetite among investors
for renewable vehicles makes Saeta
Yield an attractive investment vehicle
for many institutional investors.
Saeta Yield offers its shareholders the chance
to directly participate in constructing a
sustainable energy model, as it invests
in and operates renewable assets that
produce emission free energy, offering
secure profitability supported by favourable
remuneration schemes in stable countries.
This stability of generated cash flows and
good growth potential allow Saeta Yield to
distribute attractive and increasing dividends.
33 Frankfurt School. FS-UNEP Collaborating Centre for Climate & Sustainable
Energy Finance. 2016. Global Trends in Renewable Energy Investment 2016.
34 Financial Times – Generating returns from renewables http://www.ft.com/
cms/s/0/9a547158-bccc-11e4-a917-00144feab7de.html#axzz48Kq7UZoj
35 Climate Bonds Initiative. 2016. 2015 Green Bond Market Roundup.
36
for growth
5.2. Regulatory
framework
The regulatory framework of renewable
energies presents an attractive environment
for investors. This fact, together with other
factors such as the maturity of renewable
technologies or the increasing number of power
purchase agreements (PPA), is a clear competitive
advantage that has notably reduced the market
risks, making a renewable assets operator such
as Saeta Yield a secure source of dividends for
investors.
European Union
The regulation developed by the European Union
(EU) over recent years reflects its determination in the
construction of a new energy model, in which renewable
energies take on a greater role to fight against climate
change, reduce energy dependency, improve the Union’s
competitiveness and guarantee supply security.
The 2030 climate and energy framework establishes,
among other targets, a 40% reduction in greenhouse gas
emissions36, a 27% increase in energy efficiency and the
achievement of a 27% share of the energy proceeding from
renewable sources in the total energy consumption of the
European Union.
In this context, the European Union is giving a boost to
international connections, with the aim of promoting the
exchange of energy between neighbouring countries,
thus contributing to the security and continuity of
the electricity supply. EU countries must achieve an
interconnection level of 10% of their installed capacity
by 2020, and 15% by 2030. As interconnection capacity
increases, the volume of renewable production that it is
possible to integrate into a system under safe conditions
is maximised, allowing countries to increase installed
capacity of a renewable nature.
36 Compared to 1990 levels.
37
for growth
Market revenue
Spain (BBB+/Baa2/BBB+) 37
In 2014 the Spanish government completed regulatory
reforms, which has allowed it to resolve the structural
tariff deficit suffered by the electricity system, which
compromised its future economic sustainability.
Royal Decree 413/2014 regulates the production of
electrical energy from renewable energy sources. It
establishes a remuneration regimen methodology that
guarantees reasonable profitability. This profitability
has been fixed at 7.4% before tax for the next six years.
During their entire regulatory life, fixed at 20 years for
wind power assets and 25 for solar thermal assets, assets
will earn revenue for selling their energy to the market,
as a return on investment. In addition, solar thermal
plants will receive operation remuneration, as they have
higher production costs.
The new regulatory scenario is very favourable for
Saeta Yield, as it provides greater visibility and
guarantees the future solvency and sustainability
of the Spanish electricity system, and therefore the
remuneration associated with regulated activities,
favouring a stable environment in which it has been
possible to overcome the tariff deficit.
Electricity sales
at market prices
Any electricity that is produced
is sold on the market
Price bands have been defined to
limit exposure to market risk.
Sovereign debt rating by Standards & Poors, Moody’s and Fitch respectively.
Remuneration from the investment
in wind and solar thermal
Remuneration from solar
thermal operations
Covers investment costs that
cannot be recovered through sale
of electricity on the market.
Fixed price for electricity
produced (€/MWh) to
compensate for the difference
between high operating
costs and the market price.
Fixed price depending on regulatory
life and capital investment.
Recalculations are made
periodically to avoid volatility.
Fixed remuneration for
installed capacity (€/MW).
Reasonable profitability for a correctly managed asset of 7.4% until 2019
tariff deficit uncertainty has been coped with...
no tariff deficit
going forward
historical tariff deficits
between € 3-6 bn
miles
€bn de millones €
5.5
2010
37
Regulated revenue
0.4
3.8
2011
0.6
0.5
0.6
tariff
surplus
3.2
5.6
2012
2013
2014
2015
2016
2017
above € 10 bn measures apporved by the regulator all through the value chain including renewables
38
for growth
RoFO Countries
Peru (BBB+/A3/BBB+)
Mexico (BBB+/A3/BBB+)
Renewable energy support regimen through the
auction of long-term PPA contracts under public
tender processes:
The General Climate Change Law sets a target of 35%
of generated energy from renewable sources in 2024,
40% in 2035 and 50% in 2050.
• F
irst auction (2009/2010):
330 MW in 27 projects.
• Second auction (2011):
• Third auction (2013):
Support mechanisms offered by the government
include:
The National Interconnected Electrical System
is administered by the National Interconnected
System Economic Operating Committee, a 100%
private regulated monopoly
• C
ompanies wanting to build transmission lines
in accordance with Expansion Plans must
participate in a public tender process38.
• T
olls and tariffs account for a fixed annual cost
of 12% of the project’s replacement value and
operating and maintenance costs.
38 Act No. 28832.
39 SENER. 2015. Renewable Energy Forecast 2014-2028.
• R
eductions in import
and/or export taxes.
• R
egulatory framework based
on PPAs with public and private
entities.
• F
avourable depreciation
regimens.
• Funding for renewables projects.
• 2
40 million dollars energy
transition fund.
• Storage of renewable excesses.
In this context, it is envisaged that installed capacity
for generating electricity from renewable energy
sources will increase by 19.76 GW by 2028 .
Winds assets right of offer.
Transmission lines right of offer.
39
for growth
Portugal (BB+/Ba1/BB+)
Uruguay (BBB/Baa2/BBB-)
Portugal must meet the targets of the European
Union’s Energy and Climate Change policy.
Renewable energies provide 94.5% of the country’s
electricity. Uruguay has optimal meteorological
conditions, a diverse combination of energy and a
favourable regulatory framework.
This country has a special regimen for electricity
proceeding from renewable sources. This regimen
establishes that producers will not sell electricity
on the market, and that distribution companies
of last resort must purchase all of the electricity
produced under the special regimen.
Portugal has a feed-in tariff remuneration system,
based on the technology and the source used:
It has a renewables investment regimen that
exempts energy sold on the market from income
tax on economic activities (corporation tax), as
follows:
• 90% until 31 December 2017
• P
roducers receive a monthly payment that is
defined on a monthly basis.
• P
roducers can choose between receiving a
fixed tariff, regardless of the time of day, or a
tariff that varies depending on the time.
Purchases of wind turbines and accessories are
exempt from VAT. It also offers additional benefits
for solar thermal energy.
Winds assets right of offer.
Transmission lines right of offer.
40
for growth
Other countries of interest
Chile (AA+/Aa3/A+)
Colombia (BBB/Baa2/BBB)
This is the third most attractive country for renewable
energy investment40.
Colombia will reduce its greenhouse gas emissions
by 20% by 2030. Increasing the weight of renewables
will be key for achieving this objective. In turn, the
Colombian National Energy Plan sets out courses
of action for the development of an efficient energy
policy41.
According to Law 20,698, by 2025 20% of electrical energy
will come from unconventional renewable sources. By
2050, 70% of electricity must come from unconventional
renewable sources.
Generation, transmission and distribution activities are
carried out by private companies. The State only carries out
indicative regulatory, oversight and planning functions for
generation and transmission investments. The organisation
in charge of regulation in the electricity sector is the National
Energy Commission (CNE).
The General Electrical Services Law regulates electrical energy
distribution in the country, through concessions. The law
establishes regulations for fixing prices for customers for 4 years.
Customers that are not subject to price fixing by distribution
companies maintain long-term contracts in which the price of
the electricity service is freely established by the parties.
40 Bloomberg New Energy Finance. 2015. Climate Scope 2015. The Clean
Energy Country Competitiveness Index.
In this context, it is expected that growth will be
experienced in PPA contracts, driven by local and
foreign investments42.
The regulatory framework of the electrical sector
classifies activities into generation, transmission,
distribution and commercialisation. Regarding
commercialisation, no company may have more than
25% of the activity.
Users are divided into two categories: regulated and
unregulated users. The difference between them
lies in the tariffs applicable to electricity sales. For
regulated users, tariffs are set by the Energy and Gas
Regulation Commission (CREG in Spanish) by means of
a tariff formula. For unregulated users, sale prices are
free and agreed on between the parties.
41 For further information, consult the Colombian National Energy Plan
Energy Vision Plan 2050 http://www.upme.gov.co/Docs/PEN/PEN_
IdearioEnergetico2050.pdf
42 El Economista – Renewable energies and purchase agreements, the challenges
faced by Colombia.
41
6
Corporate
Governance
6.1. Group governing bodies
6.1.1. General Shareholders’ Meeting
6.1.2. Board of Directors
6.1.3. Management Team
6.2. Independence of Saeta Yield
6.3.Commitment to ethical principles
and responsible management
6.3.1. Good governance framework
6.3.2. Ethics and integrity
6.3.3. Responsible management
6.Corporate Governance43
6.1. Group
governing bodies
6.1.1. General Shareholders’ Meeting
The General Meeting is the highest body
for expressing the will of shareholders and
their decisions. Among its main functions are,
among others, the approval of annual accounts,
the appointment of members of the Board of
Directors, the authorisation of some Board of
Directors’ decisions and the approval of the
remunerations policy.
Saeta Yield’s share capital structure
Saeta Yield’s share capital comprises 81,576,928
shares, each with a nominal value of one euro,
fully subscribed and paid up. All shares have the
same rights and there are no statutory restrictions
on their transferability.
The Group’s shares are listed on the Madrid,
Barcelona, Bilbao and Valencia stock exchanges,
and they are traded on the interconnected stock
market system (SIBE in Spanish) under the symbol
“SAY”.
The shareholding structure is as follows:
Since floating on the stock exchange in
February 2015, Saeta Yield has held one General
Shareholders’ Meeting on 25 June 2015, at
which 80.5% of Saeta Yield’s issued shares were
represented. Matters put to a vote during the
meeting were approved by a vast majority of over
99.72%. The 2016 General Shareholders’ Meeting
was held on 22 June, 2016.
43 For further information, see the 2015 Annual Corporate
Governance Report http://www.saetayield.com/wp-content/
uploads/2016/02/31_12_2015_Corporate-Governance-ReportSaeta-Yield.pdf
acs 24.21%
gip 24.01%
Floating capital 51.78%
43
6.Corporate Governance
The composition of both the Board
and its Committees has been designed
taking into account criteria of the
balance, professionalism, knowledge
and experience of its members.
6.1.2. Board of Directors
The Saeta Yield Board of Directors comprises
nine members, of whom four are independent
directors, four are proprietary directors and one is
an independent executive. The Board met a total
of 11 times in 2015.
Ms. Cristina
Aldámiz-Echevarría
González de Durana
Mr. Cristobal
González Wiedmaier
Mr. Honorato
López Isla
l
n
n
a
a
Mr. José Barreiro
Hernández
Mr. Deepak
Agrawal
n
a
Mr. Luis Pérez
de Ayala
Non-director
Secretary
Mr. Paul
Jeffery
Committee
Chairman
n
a
Committee
Member
a
a
Audit
Committee
n
ppointments and
A
Remuneration Committee
Mr. Rajaram
Rao
Independent Chairman
and CEO
n
Independent
Director
L
Mr. Daniel
B. More
Mr. José Luis
Martínez Dalmau
Lead Independent
Director
Proprietary
Director
44
Pursuant to the Capital Companies Act and
recommendations of the Code of Good Governance
for Publicly Listed Companies of the National
Commission of the Stock Market (acronym in
Spanish: CNMV), Saeta Yield, through its Board
of Directors Regulations, has established the
figure of a Lead Independent Director when the
Chairman of the Board is an executive director, as
is the case of Saeta Yield. Similarly, the Regulations
set out the functions corresponding to the Lead
Independent Director in question, including
chairing the Board in the Chairman’s absence,
requesting meetings of the Board of Directors or
the inclusion of new items on the agenda for a
board meeting that has already been convened,
coordinating and meeting with non-executive
Directors and voicing their concerns, and directing
the periodic assessment of the Chairman, as
well as coordinating the succession plan.
The Board of Directors is responsible for
approving the dividends policy, the Group’s
strategy and the precise organisation for putting
it into practice, supervising the management
team, ensuring that it meets the set objectives
and respects the Company’s purpose and
corporate interest. Other functions of the Board
of Directors include determining the control
and risk management policy, and supervising
internal information and control systems.
To guarantee the adequate and effective application
of internal control systems, the Group created
its Internal Audit area in 2015, in charge of
ensuring that the integrity of the entity’s equity
is preserved and that its economic management
is efficient; it proposes any necessary corrective
actions to the management for this purpose.
Audit Committee
Supervises the effectiveness of the Company’s
internal control, the internal audit and SCIFF
management systems.
Manages external accounts auditing.
Reviews the drafting and integrity of financial
reporting.
5 MEMBERS
7 MEETINGS in 2015
independent 60%
propietary 40%
The Board of Directors is
responsible for approving the
dividends policy, the Group’s
strategy and the precise organisation
for putting it into practice.
Appointments and Remuneration Committee
Assesses the necessary competences, knowledge
and experience on the board, and proposes the
appointment of independent directors.
Proposes and periodically reviews the remuneration
policy for directors and the senior management.
Supervises the fulfilment of Corporate
Government rules.
Manages non-financial risks.
5 MEMBERS
6 MEETINGS in 2015
independent 60%
propietary 40%
45
Extract from the biographies of members of
the Board of Directors and the non-director Secretary.
The composition of both the Board44 and its
Committees has been designed taking into
account criteria of the balance, professionalism,
knowledge and experience of its members.
Thus, the professionals that make up these
bodies have knowledge on finance, accounting
and regulations; they are sector specialists
and have international and other types of
track records, which favours the adequate
performance of Board functions and, as a result,
the achievement of Group targets.
44 For further information on the biographies of Saeta Yield directors,
please visit Saeta Yield’s website http://www.saetayield.com/
corporate-governance/biographies/?lang=en
José Luis Martínez Dalmau
CEO / Chairman
Honorato López Isla
Non-executive director Independent
José Barreiro Hernández
Daniel B. More
As CEO (Chief Executive
Officer), he supervises all
corporate development, as
well as the projects portfolio.
He has significant experience
in operations, institutional
relations, business development,
corporate governance,
commercial agreements and
regulatory analysis. He has
managed energy projects at
ACS Group for six years. In
particular, he was responsible
for the construction and
operation of ACS’s renewable
assets that now form part of
Saeta Yield.
Was CEO and Vice
chairman of Union Fenosa
S.A., where developed most
of his career.
Held the role of Managing
Director of Bilbao Vizcaya
Argentaria, S.A. for over
14 years.
Was Managing Director of
Morgan Stanley, leading
the Group’s mergers and
acquisitions globally.
Has been chairman of the
telecomm operator R-Cable.
His experience is mainly
focused to the electrical
sector in Spain and Latam,
as well as in sectors like
telecomm and information
technologies.
He has been a member of the
Boards of Directors of AIAF,
MEFF, SENAF, Iberclear,
BME and China Citic Bank
Corporation. He has been
a member of foundations
and business schools such
as the “Financial Studies
Foundation” and “Vermont
Academy”.
Has been Board Member
of the NYISO (New York
Independent System
Operator) and currently from
SJW Corp. His experience
mainly focuses on renewable
energy project funding. He
has also worked with a wide
range of clients in regulated
industries, including “utilities”,
cooperatives and local
governments.
Has been Borad Member of
Retevisión, AENA (Aeropuertos
Españoles y Navegación Aérea),
ENA (Empresa Nacional de
Autopistas), Mobipay and
ESCAL, as well as in many
renewable.
Independientes
Dominicales
Secretario no Consejero
46
Paul Jeffery
Was Managing Director
of Investment Banking
Division and responsible
for the European “Power,
Utilities and Infrastructure”
(PUI) team at Barclays
Capital. During 15 years as
manager of the PUI team,
his role included supervising
Barclays investment banking
transactions in the European
sector.
Since 2014, he is a member of
the Boards of Directors of both
SGN and UK Power Networks,
which own and operate
regulated gas networks
and electricity networks,
respectively, in the United
Kingdom.
Cristobal González
Wiedmaier
Non-executive director Proprietary
He joined ACS in 2000
and is CFO and Director
of several ACS Group
companies. He has solid
experience in management
and funding, as well as
deep knowledge of project
finance development.
Cristina Aldámiz-Echevarría
González de Durana
She joined ACS in 2001 and
is responsible for the Group
Corporate Development and
Control. She has extensive
financial, commercial and
management experience,
as well as experience in
mergers and acquisitions.
She has been a Director of
TBI Limited, an international
airport infrastructure services
company, and of Cleve, S.A.,
a multi-service company,
subsidiary of the ACS Group.
Rajaram Rao
Deepak Agrawal
He joined GIP in 2006 and
was elected as partner in
2010. He is a member of the
Investment and Operations
Committee. In addition, he is
also heading the GIP’s energy,
water and waste sectors in
Europe.
He started working at GIP
in 2007 and is currently a
Director. His work focuses
on European energy
sectors.
Is vastly experienced in M&A,
stock exchange flotations and
funding operations for the
energy, waste and transport
sectors in OECD countries
and countries with emerging
markets. Has been Board
Member of CLH (Compañía
Logística de Hidrocarburos).
He is a member of the Board
of Directors of East India
Petroleum Private Limited,
Transitgas/Fluxswiss SA and
Gode Wind 1 Investor Holding
Company.
He has 26 years of
experience. Before joining
GIP, he worked as financial
consultant on the Qatar
Petroleum (“QP”) Project
Finance team, was Vice
Chairman of PSEG India
Private Limited. Has been
Board Member of CLH
(Compañía Logística de
Hidrocarburos).
Luis Pérez de Ayala Becerril
Non-director Secretary
Partner of the law firm
Cuatrecasas Gonçalves Pereira
since 2006, he coordinates the
administrative and regulatory
law group in Madrid.
He has been director of Legal
Services for Gas Supply
and Transport, Gas Natural
SDG. Similarly, he has been
Secretary to the Board of
Directors of Enagas, S.A.,
and Secretary to the Board
of Directors of Oficina de
Cambios de Suministrador,
S.A.
Currently is Board Member
of Bow Power.
Independent
Proprietary
Non-director Secretary
47
6.1.3. Management Team45
In addition to a solid Board of Directors,
Saeta Yield has built up a management team
with recognised professionals and with solid
experience in the sector.
José Luis Martínez Dalmau
Chairman and CEO
Álvaro Pérez de Lema
CFO
Francisco González Hierro
COO
Lola del Valle
Legal Consulting
Supervises the entire corporate
development and performance
of the asset portfolio.
Controls economic-financial
assets and the corporate
strategy development.
Controls generation operations
and is in charge of the operation
managemet and maintenance.
Monitors day-to-day legal
aspects and manages legal
problems related to the
company.
45 For further information on the biographies of the management
team, see the Saeta Yield Stock Market Flotation Brochure,
available in http://www.cnmv.es/portal/home.aspx?lang=en
Chairman and CEO
Legal Consulting
Risk Prevention and
Environment
Internal Auditing
Operations
Director
Management team comprising, from
left to right, Álvaro Pérez de Lema,
CFO, José Luis Martínez Dalmau,
Chairman and CEO, Lola del Valle, Legal
Consulting and Francisco González
Hierro, COO.
Solar thermal
Facilities
Electrical
market
Finance
Director
Wind
Funding
Investor Management
and Relations Control
Corporate
Development
Accounting, Consolidation
and General Services
Facilities
48
1
In addition, to support the purchase of assets forming part
of the RoFO Agreement, independent directors request
the opinion of an independent financial consultant,
who gives their opinion on whether the purchase price
proposed by the management team is adequate.
independent: 4
Gip: 2
Executive: 1
3
Request for an opinion on the fixed
price from an independent third party
independent: 4
With the aim of guaranteeing independence and
safeguarding the general interests of minority
shareholders, in operations related to ACS and/or Bow
Power, proprietary shareholders representing ACS
and GIP may not exercise their vote on any matters
that could represent a conflict of interest, such as the
assessment and acquisition of assets included in the
Right of First Offer Agreement and Call Option on
Manchasol 1, Operation and Maintenance Contracts
and other related operations.
2
Voting among directors
acs: 2
Through a balanced Board of Directors, conformed by
diverse profiles and an independent majority, it avoids
potential conflicts of interest and promotes solid
decision making processes.
Similarly, the Group has a management team that,
unlike other Yieldcos, is contracted and paid by the
Company itself, and acts always independently two
principle shareholders.
Identification of the opportunity
independent: 4
Saeta Yield is an independent company, with a
solid governance structure and that applies best
corporate governance practices.
Purchase of RoFO assets and
other related operations
Executive: 1
4
Final decision and submission
of the bid
independent: 4
6.2. Independence
of Saeta Yield
The Group has a management
team that is contracted and paid
by the Company itself, and acts
always independently two principle
shareholders.
Executive: 1
Executive: 1
49
SAETA YIELD, S.A.
SAETA YIELD, S.A.
BY-LAWS
BOARD OF DIRECTORS REGULATION
TITLE I
NAME, PURPOSE, REGISTERED OFFICE AND WEB PAGE
1 Article 1. Corporate name
1
Article 1. Purpose.
1.1
The purpose of this Regulation is regulating the organization and operation of the Board
of Directors, as well as Commissions or Committees established within it, subject to
provisions in the current law and the Company by-laws.
1.2
2.2 The activities that comprise the corporate purpose may be developed by the Company fully or
partially, directly or indirectly, in particular through participation in other companies that perform
them in accordance with its corporate purpose, both in Spain and abroad.
The rules of conduct established in this Regulation for the Company Board Members
shall also apply to senior executives of the Company. For the purposes of this
Regulation, "senior managers" will be considered as those managers who depend
directly from the Board of Directors or the Chief Executive Officer, if any, and, in
any case, the person in charge of the Company internal audit.
2
Article 2. Prevalence and interpretation
2.3 The Company will not be carrying out any activity for which the laws require compliance with
specific requirements or conditions without complying with them.
2.1
This Regulation develops and complements the applicable legal standards and law,
which shall prevail in the event of contradiction with its provisions. This Regulation
shall be interpreted in accordance with applicable statutory and legal regulations, as
well as the principles and recommendations on corporate governance of listed
companies.
2.2
The Board of Directors will resolve the doubts or differences that arise in the application
or interpretation of this Regulation.
3
Article 3. Distribution
3.1
The Board members and senior management have an obligation to know, comply
and enforce this Regulation. For this purpose, the Board Secretary will facilitate a
copy thereof to all of them when they accept their respective appointments or their
contracting takes place, having to deliver to the Secretary a signed statement
declaring to know and accept the content of this Regulation and their commitment to
uphold it.
3.2
The Company Board of Directors shall respond appropriately so that this Regulation
is distributed among the shareholders and the investing public in general. In
particular, and without prejudice to other possible measures, the Regulation will be
subject to communication to the CNMV and recording in the Commercial Registry, in
accordance with the applicable regulations, and will be available on the Company
web page.
The company is called "Saeta Yield, S.A." (the "Company") and it is governed by these By-laws
and in what is not covered within them, by applicable law.
2 Article 2. Corporate Purpose
2.1 The Company shall have as corporate purpose the operation and management of assets of
electric power generation, renewable or conventional; distribution and transport of electrical energy,
including transmission lines, and other assets or infrastructure related to power that under
applicable regulations or contracts with third parties, may jointly produce regular income in the long
term.
3 Article 3. Registered Office
The company has its registered office in Madrid, Avenida de Burgos, 16 D.
6.3. Commitment to
ethical principles and
responsible management
4 Article 4. Web Page
The Company shall maintain a corporate web page for information to shareholders and investors in
which it will publish at least documents and information provided by law.
TITLE II
CAPITAL STOCK AND REPRESENTATION OF SHARES
5 Article 5. Capital stock and shares
5.1 The company’s capital stock is of 81,576,928 euros and is composed of 81,576,928 shares
represented by means account entries, with a nominal value of 1 euro each, numbered sequentially
from 1 to 81,576,928, inclusive.
1
By-Laws
Saeta Yield has adopted a series of policies, codes
and regulations setting out its commitment
to ethical principles, beyond that required by
law which work as a guideline for the Group’s
performance and form an essential part of
corporate culture.
In addition, as part of its Corporate Governance
scheme, the Group adopted different policies
for Investments and Financing, Dividends, Tax,
Directors’ Remuneration, Financial Information
and Reporting, Health and Safety, Information
Security, Data Protection and Risk Control; The
Group’s environmental policies are still in the
approval process.
TITLE I
GENERAL PROVISIONS
Board of Directors
Regulations
INTERNAL REGULATION OF CONDUCT IN MATTERS CONNECTED WITH THE SECURITIES
GENERAL CODE OF CONDUCT
MARKET
Pág. 1 de 11
Page 1 of 13
General Code
of Conduct
Regulation of conduct
in the Securities Market
SAETA YIELD
Doc. nº:
Corporate Responsibility Policy
Date:
SAETA YIELD
SAY-CE-SOC-011
Dec/17/2015
Rev.
Shareholder´s and Investor Relation &
Communication Policy
0
Rev.
Date
Dec/17/2015 Initial document
Description
SAY-CE-SOC-012
Date:
Dec/17/2015
Rev.
0
Shareholder´s and Investor Relation & Communication Policy
Corporate Responsibility Policy
0
Doc. No.:
Rev.
Fecha
Development
Revision
Approval
0
Dec/17/2015 Documento inicial
MAB / CLR
JLMD
Board of
Directors
1
Descripción
Desarrollo
Revisión
Aprobación
CLR
JLMD
Board
Directors
of
2
1
2
1
Corporate
Responsibility Policy
Shareholder Communication
and Contact Policy
50
6.3.1. Good governance framework
Saeta Yield’s good governance framework is governed by the
Capital Companies Act and the Code of Good Governance of
the Spanish National Securities Market Commission (CNMV).
To comply with recommendations arising from the
new 2015 Code of Good Governance46, Saeta Yield
has adapted the content of the Board of Directors
Regulations. Specifically, the following articles have
been amended:
Article 9: Stablishes that independent
directors should represent at least one
third of the total number of directors.
Article 23: Includes the objective that
the Board of Directors should meet at
least eight times per year.
Article 10: Includes the functions of the
Chairman and Coordinating Director
envisaged in the Code.
Article 31: Assigns additional functions
to the Audit Committee.
Article 18.3: Stablishes the maximum
number of mandates in other boards of
directors for Saeta Yield directors.
Saeta Yield reaches
75% compliance on the
recommendations of the
Code of Good Governance.
Compliance with the Code of Good Governance
recommendations by Saeta Yield47
Article 32: Appointments and
Remunerations Committee.
meets criteria 75%
partially meets criteria 3%
not applicable 17%
does not meet criteria 5%
46 For further information, see the 2015 version of the CNMV’s
Code of Good Governance http://www.cnmv.es/DocPortal/
Publicaciones/CodigoGov/Codigo_buen_gobierno.pdf
47 For further information, see the 2015 Corporate Governance
Report.
51
6.3.2. Ethics and integrity
Saeta Yield generates trust among its shareholders
by keeping an ethical, honest and integral
behaviour. The basic ethics and integrity principles
are set out in the General Code of Conduct.
The Group complies with the legislation in force
wherever it operates, adopting on a supplementary
and voluntary basis international commitments,
standards and directives to guarantee integral
behaviour. Similarly, it ensures compliance with
internal codes and standards by all employees, and
promotes respect for fundamental rights within its
area of activity and influence.
Saeta Yield rejects corruption, fraud, bribery and
any other type of malpractice. For the purpose of
promoting transparent management, the Group
provides stakeholders with reliable financial
information, generating trust and confidence
among shareholders, possible investors and any
third parties with which it has relationships.
Through the Ethical Channel, anyone can
confidentially communicate irregular conduct or
possible breaches of the rules contained in the
Code of Conduct Saeta Yield.
Similarly, the Group pays particular attention to
tax payment as part of its business management,
acting always with responsibility and in
compliance with its obligations. According
to current legislation, Saeta Yield is subject to
the following tax liabilities: corporation tax,
environmental tax, local or regional taxes and
charges, and operational and sector taxes.
When optimising its tax position, prior to making
decisions, the Group always assesses public
interest and possible impacts on reputation.
The Tax Policy, which is based on the
principles set out in the best practices, defines
the entire Group’s tax management and sets
responsibilities. The Fiscal Function is in charge
of ensuring that internal requirements and
obligations stipulated by law are adequately
complied with.
By virtue of the tax consolidation regimen that
allows for the compensation of positive and
negative tax bases, and the Spanish accelerated
depreciation regimen, the Group estimates that,
according to tax legislation, it will be able to
delay the payment of corporation tax in 2016
until 2024.
52
6.3.3. Responsible management
The Group has a Corporate Responsibility Policy
adopted in 2015, which defines the operational
commitments and strategy established by the Company
on a voluntary basis with regard to all its stakeholders.
The commitments contained in the policy refer to the
following matters: value creation for the shareholder,
health and safety, environment and climate change, talent
management, social development, ethics and integrity,
and relationships with regulators and administrators.
Corporate Responsibility is managed in a crosssectional manner in the Group. Saeta Yield forms
work teams comprising different executive units,
which are in charge of developing the strategy and
action plans necessary for meeting commitments
arising from the Corporate Responsibility Policy.
The Board of Directors has responsibility for adopting the
measures required for the implementation and supervision
of the development and application of this policy. In turn,
the Appointments and Remunerations Commission assesses
and approves the Group’s responsible strategies, policies and
practices, identifies and manages non-financial risks and
supervises and promotes stakeholder relationships. The
definition, management and supervision of the corporate
responsibility strategy is the responsibility of the Chairman
and CEO, who also defines which units are responsible
for developing and coordinating the action plans.
53
7
Risk
management
7.Risk management
Risk management is one of Saeta Yield’s strategic
cornerstones. Adequate risk management and control
is fundamental for maintaining stable cash flows,
preserving the Group’s value and guaranteeing value
generation for shareholders.
Group risk is management globally, and risk management
is executed centrally by the Risks and Compliance
Function. Saeta Yield has instruments that allow it to
identify risks sufficiently far in advance and manage
them adequately, to avoid their occurrence or minimise
their impacts. Saeta Yield analyses all financial and
non-financial risks, which are individually managed.
During 2015 and the first few months of 2016, Saeta Yield
defined its Risk Management Policy, based on the three
lines of defence model set out in the COSO international
standard, which sets out a framework of integral risk
management actions. This policy establishes the following:
• T
he framework and methodology employed
to identify and manage risks.
• Applicable risk categories.
• Risk management responsibilities.
• G
overnance and supervision of risk
management-related activities.
The Risk Management Policy works as a guideline for
the definition of specific risk policies, which will establish
specific management requirements and that will
generally be developed for, and applied to any risks of
major significance to Saeta Yield.
Responsibilities in the risk management process
Board of Directors
Approve and supervise the Risk
Management Policy
Audit
Committee
Appointments and
Remuneration Committee
Financial risks:
Supervise the management
model
Assess the performance of
the Risks and Compliance
Function
Act as an assistance and
support body
Report to the director
Non-financial risks:
Supervise the management
model
Assess the performance of
the Risks and Compliance
Function
Act as an assistance and
support body
Report to the director
Risks and Compliance
Internal Audit
Independently
supervise the entire
risk management
process
Define the risks strategy
Supervise the proper functioning
of the risk exposure monitoring
system
Report to committees
Support the business area
responsible for the risk
Business area responsible for the risk
These are the Company’s areas closest to the material risk.
Their functions are:
Support the Risks and Compliance Function in the identification
and monitoring of risks
Maintain the current risk profiles within its areas of
responsibility
Ensure implementation of control processes and adequate
response plans
Main risks of Saeta Yield:
Strategic risks, related to recurring noncompliance with available cash flow or growth
expectations.
Environmental and business: these risks mainly
arise from regulatory changes impacting on Saeta
Yield’s revenue structure; from the behaviour
of the economic, political or technological
environment; or from changes in energy sales
prices or production volumes.
Financial risks: including liquidity risk, credit
risk or risks arising from fluctuations in market
interest rates.
Legal risks, related to breaches of current
legislation applicable to Saeta Yield’s business,
including tax regulations.
Operational risk, including risks relating to
occupational safety, information systems, ethics
and conduct, among others.
Reputational risks, arising from the impact that
the occurrence of other risks may have on the
way in which the regulator, the market, investors
and other agents’ perception on Saeta Yield.
55
7.Risk management
8
update of
the risk
management
model
The risk management cycle
The success of risk management is based
on the principles and processes developed
in the different phases of the Risk Cycle.
Saeta Yield Group’s risk cycle includes eight
stages.
During each cycle stage, the procedures and
employees in charge are established, along
with relevant specific explanations. During
the risk assessment and measurement
stage, risks are assessed in order to
determine the potential effect that they
could have on the Group’s financial
statements, and on the achievement of
objectives. Qualitative and quantitative
factors are used for an effective assessment,
along with mathematical models and
expert opinions, and the impact of risks on
similar sectors is assessed.
7
1
risk
identification
risk
monitoring
2
risk evaluation
and measure
6
communication
of the risk
3
5
risk
reporting
4
risk
prioritisation
and response
risk
control
56
8
Appendix.
Main Management
Indicators
8. Appendix. Main Management Indicators
Main Indicators
2015
Operational
Installed power (MW)
Production (GWh)
Solar: Performance Ratio (PRC, %)
Wind: Availability (%h)
689
1367
113.3%
98.3%
Financial
Operating revenue (millions of €)
EBITDA (millions of €)
Net Debt (millions of €)
Net debt / EBITDA
Average cost of debt
Cash available for distribution (CAFD, millions of €, Total)
Cash available for distribution (CAFD, millions of €, Operational Assets.)
Dividends distributed (millions of €) / (€/share)
Recurring dividend profitability48
220.6
155.7
722.9
4.6x
4.0%
128
74
35.2 / 0.43
8.1%
Environment
Gross emissions avoided (t CO2)
Emissions Scope 1 (t CO2)
949,279
8,380
2,696
People and talent management
Percentage of employees subject to performance assessments
Percentage of employees with variable remuneration plans
Percentage of workforce trained
Hours of training per employee
100%
100%
100%
25.50
Health and Safety
Frequency rate49 company employees
Contractor frequency rate
Severity index50 company employees
Contractor severity index
Fatal victims51 company employees / contractors
Hours of safety training per employee
17.73
13
0
0
0/0
20.95
48Recurring dividend of 57 million euros. Share Price 8.6 euros,
31 December 2015.
49Number of accidents during the working day, for every million
hours worked.
50Number of days lost due to occupational accidents, for every
thousand hours worked.
51Number of workers who have died due to accidents at work.
58
9
Appendix.
Environmental
performance in 2015
9.Appendix.
Environmental performance in 2015
Environment indicators
Saeta Yield has an internal environmental
management system that sets out the necessary
operational procedures for minimising its impact
on the environment. These procedures not only
guarantees compliance with Spanish and European
legislation, which are among the strictest in the
world, but they go beyond legal compliance,
guaranteeing efficient use of resources and
adequate management of the waste produced.
In 2015, the Group spent 371,986 euros to cover the costs
and environmental investments in plants and parks
Yield Saeta. Also, there have been 177 assessments
(internal and external) related to environmental issues.
CO2 Emissions
Saeta Yield’s activity is beneficial to the environment,
as it avoids a significant amount of CO2 emissions
due to its renewable nature. Wind and solar
thermal electricity generation is emission free,
whilst, the solar thermal generates a small quantity
of emissions as a consequence of burning natural
gas to prevent the thermal fluid from solidifying
in certain moments when there is no electrical
production. In net terms, joint generation by both
technologies avoids 940,899 tonnes of CO2, equivalent
to 1.3% of total emissions from the Spanish electricity
production system. (73.3 million Tonnes of CO2).
Gross emissions avoided (t CO2)
Gross emissions avoided by production (t CO2 / MWh)
Emissions intensity (A1) by production (t CO2 / MWh)
Emissions intensity (A1) by revenue (t CO2 / M€)
2015
949,279
0.694
8,380
2,696
0.0061
37.99
Water and waste management
Waste management
Saeta Yield considers water as an essential natural
resource. The Group is aware of the risks arising
from scarcity of water, so it uses this resource in
a rational and sustainable manner. Saeta Yield’s
solar thermal activity consumes water resources,
mainly from surface water, for cooling steam
condensation systems.
Saeta Yield adequately manages the waste generated
by its facilities and work centres. The Group has set
minimising waste generation as a target. However,
when waste is produced, environmental management
systems guarantee that it is process correctly by type,
prioritising reuse and recycling. In 2015, the Group
generated a total of 3,131 tonnes of waste, of which
100% was recycled and/reused.
The Group manages these resources appropriately
to return water to its withdrawal source under
physical-chemical conditions that allow it to
be used by other users. Water is returned in its
original chemical conditions; its temperature is also
controlled for this purpose.
In 2015, Saeta Yield’s water intake was 4,218,647
m3, and it returned 51.5% of this amount to the
receiving environment.
Hazardous waste management is particularly relevant in
solar thermal facilities. The Group carries out activities
aimed at reducing hazardous waste and improvement its
management, at all times applying preventive measures
to avoid the generation of this type of waste. In this
sense, not only does Saeta Yield comply with applicable
legislation, it makes efforts to achieve best practices and
apply continuous improvement to processes. Saeta Yield
has contracted a specialist hazardous waste management
supplier for its correct processing.
60
10
Appendix.
2015 Talent
management indicators
10.Appendix. 2015 Talent
management indicators
People and talent management
2015
Total employees
38
Employees who have received training
38
Percentage of employees subject to performance assessments
100%
Percentage of employees with variable remuneration plans
100%
100%
Total training hours
969
Hours of training per employee
25.50
Training investment (euros)
14,013
Percentage of employees covered by collective bargaining agreements 100%
Women in management positions
2
Employees by
contract type
permanent contract 89%
temporary contrct 3%
Traineeship contract 5%
Commercial contract 3%
62
11
Appendix.
Occupational health
and safety in 2015
11.Appendix. Occupational
health and safety in 2015
The Group has implemented an occupational
health and safety management system with 23
different procedures. These matters are managed
by the Occupational Risk Prevention area, which
is in charge of interacting with the contracted
External Prevention Service and of managing
prevention in group companies that do not have
their own workers. Following its publication the
Group envisages starting the ISO 45001 standard
certification process.
Health and safety risks are periodically identified
and assessed at Saeta Yield. A series of prevention
targets is fixed based on the identified risks,
through which preventive, corrective and
improvement actions are planned. These actions
can be implemented and measured, they have
assigned managers and time scales defined for their
achievement, and their implementation is reviewed
on an annual basis.
Saeta Yield workers subject to exposure during
the working day are informed of these risks, and
they are provided with the necessary training to
act safely. Similarly, Saeta Yield promotes their
participation in managing these matters, and
consults them on any aspects that might affect
health and safety at work. No Group employee
currently carries out professional activities with a
high incidence or risk of certain diseases.
In 2015, the Group invested 11,096 euros in measures
to improve occupational risk prevention, such as
employee awareness and training. In turn, costs of
matters relating to occupational health and safety
(health and safety personnel costs, management
system maintenance costs, etc.) amounted to
approximately 75,000 euros.
Occupational health and safety training
2015
Employees who have received training
Total training hours
Hours of training per employee53
3752
97%
775
20.95
Preventive action
2015
1
18
65
Health and safety audits54
Risk assessments55
Preventive controls56
52One employee joined the Company in November 2015 and
did not receive training until January 2016.
53Compared to total employees.
54ATEX Audit at Manchasol 2.
55Risk assessments of centres with Saeta Yield’s own workers,
and identification of risks of facilities belonging to the Group
where there is no company personnel.
Accident rate indicators 2015
Accidents during the working day without sick leave
Accidents during the working day with sick leave
Days lost due to accidents during the working day57
Days lost due to "en route" accidents
Fatal victims59
Frequency rate60
Severity index61
Incidence rate62
Occupational disease rate63
Company employees Contractors
1
0
0
50
0
17.73
0
26.32
0
6
0
0
-58
0
13
0
12
0
56Safety inspections conducted at plants to check that
contractors work under safe conditions.
57Days during which no work has been done due to sick leave
after accidents in the work place, only taking into account
working days.
58Saeta Yield does not keep records of “en route” accidents, as
they do not occur within the Group’s facilities.
59Number of workers who have died due to accidents at work.
60Number of accidents during the working day, for every
million hours worked.
61Number of days lost due to occupational accidents, for every
thousand hours worked.
62Number of accidents during the working day, for every
1000 workers.
63Total number of cases of occupational diseases, compared to
total hours worked, multiplied by 200,000.
64
12
Appendix.
Financial summary
12.1.Consolidated balance sheet
12.2.Consolidated results account
12.3.Consolidated cash flow statements
12.Appendix.
Financial summary64
12.1.Consolidated balance sheet
Consolidated Balance Sheet (€m)
12.2. Consolidated results account
31/12/2014
31/12/2015
Var.%
Non-current assets
Intangible assets
Tangible assets
Non-current financial assets with Group companies
Non-current financial assets
Deferred tax assets
1,494.0
0.2
1,409.6
1.5
7.1
75.7
1,407.5
0.2
1,337.8
1.3
7.1
61.2
-5.8%
±16.9%
-5.1%
-15.0%
-0.1%
-19.2%
Current assets
Inventories
Trade and other receivables
Other current financial assets with Group companies
Other current financial assets
TOTAL ASSETS
244.7
0.7
60.1
83.6
54.4
45.9
1,738.8
244.3
0.5
58.0
2.2
45.2
138.4
1,651.8
-0.2%
-32.5%
-3.4%
-97.4%
-16.9%
±201.2%
-5.0%
Equity
Share capital
Share premium
Reserves
Profit for the period of the Parent
Adjustments for changes in value – Hedging
355.6
61.6
551.5
-163.2
35.4
-129,5
570.5
81.6
696.4
-127.9
16.1
-95,6
±60.4%
±32.5%
26.3%
-21.6%
-54.6%
n.s.
Non-current liabilities
Non-current Project finance
Other financial liabilities in Group companies
Derivative financial instruments
Deferred tax liabilities
1,224.7
1,038.9
0.5
144.5
40.7
965.2
848.2
0.0
80.6
36.4
-21.2%
-18.4%
-100.0%
-44.2%
-10.6%
Current liabilities
Current Project finance
Derivative financial instruments
Other financial liabilities with Group companies
Trade and other payables
TOTAL EQUITY AND LIABILITIES
158.4
64.9
28.6
15.4
49.5
1,738.8
116.0
58.3
22.5
0.1
35.1
1,651.8
-26.8%
-10.1%
-21.3%
-99.3%
-29.1%
-5.0%
Income statement (€m)
2014
2015
Var.%
Total Revenues
Staff costs
Other operating expenses
217.0
-0.4
-64.2
220.6
-2.4
-62.6
±1.7%
n.s.
-2.5%
EBITDA
Depreciation and amortization
Provisions & Impairments
152.4
-75.8
23.9
155.7
-77.2
17.7
±2.1%
±1.9%
n.a.
EBIT
Financial income
Financial expense
100.6
1.9
-58.1
96.1
0.5
-75.2
-4.4%
-72.5%
±29.4%
44.3
-8.9
35.4
21.5
-5.4
16.1
-51.6%
n.s.
-54.6%
Profit before tax
Income tax
Profit attributable to the parent
64For more information, check http://www.saetayield.com/wp-content/
uploads/2016/02/SAETA-YIELD-RESULTS-REPORT-ENG-2015.pdf
66
12.Appendix.
Financial summary
12.3. Consolidated cash flow statements
Consolidated Cash Flow Statement (€m)
2015
A) CASH FLOW FROM OPERATING ACTIVITIES
1. Profit/(Loss) before tax
2. Adjustments for
a) Depreciation, amortization and impairment charges
b) Finance income
c) Financial costs
3. Changes in operating working capital
a) Inventories
b) Trade and other receivables
c) Trade and other payables
d) Other current assets and current liabilities
4. Other cash flows from operating activities
a) Net Interest collected / (paid)
b) Income tax collected / (paid)
112.0
21.5
134.2
59.5
-0.5
75.2
-6.8
0.2
14.8
-19.1
-2.7
-36.8
-43.1
6.2
B) CASH FLOW FROM INVESTING ACTIVITIES
5. Acquisitions
6. Disposals
8.9
-0.7
9.6
C) CASH FLOW FROM FINANCING ACTIVITIES
7. Equity instruments proceeds
8. Financial liabilities issuance proceeds
9. Financial liabilities amortization payments
10. Dividend payments
-28.4
200.1
60.4
-253.8
-35.2
D) CASH INCREASE / (DECREASE)
Cash or cash equivalents at the beginning of the period
Cash or cash equivalents at the end of the period
92.5
45.9
138.4
67
June 2016
Project Director and Editor
Saeta Yield
Creation and Design
IMAGIA officina
Photos
Saeta Yield

Integrated Report 2015

Transcription

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