Brookfield Renewable Corporation (BEPC) Earnings Call Transcript

Mr. Chair, I nominate for election as directors the 10 nominees named in the Management Information Circular dated May 12, 2023.

Thank you, Wyatt. I declare the nominations closed. Management has received proxies representing a majority of the corporation's Class A shares and 100% of the Class B shares. These proxies direct management to vote a majority of the Class A shares and all of the Class B shares in favor of the resolution. I now that they are that those nominated be duly elected as directors of the corporation. The third and final item of business today is the appointment of the corporation's external auditor and authorizing the directors to set their remuneration. As stated in the management information circular, the Audit Committee of our Board of Directors has recommended that Ernst & Young LLP be reappointed as the corporation's external auditor.

Mr. Chair, I move that Ernst & Young LLP be appointed the external auditor of the corporation.

Thanks, Wyatt. Resolution has now been moved and the motion is now before the meeting for discussion.

Mr. Chair, we have not received any questions or comments submitted in connection with the appointment of auditors.

Management has received proxies representing a majority of the corporation's Class A shares and 100% of the Class B shares. Each proxies direct management vote a majority of the Class A shares and all of the Class B shares in favor of the resolution. Voting is now closed on all resolutions. I am advised that we have the results of the resolutions based on the tabulation of votes cast in advance of the meeting.

Thank you, Jeff. On the appointment of the corporation's external auditor and authorization of the directors to set the remuneration. I'm pleased to declare the motion carried. The final voting results will be available after the meeting and will be posted to SEDAR at www.sedar.com.

Ladies and gentlemen, that completes the formal business of today's meeting. As there is no other business, this concludes our meeting. Now that the formal meeting is concluded, our CEO, Connor and our CFO, Wyatt, will make your presentation on behalf of the management team. At the end of the presentation, they will both be available to respond to any questions or comments you may have submitted. Please note that in responded to questions and in talking about our new initiatives and our financial and operating performance, we may make forward-looking statements. These statements are subject to known and unknown risks, and future results may differ materially. Finally, we'd like to ensure that all shareholders who are interested in asking a question have the opportunity to do so. We will make every effort to address questions during the allotted question-and-answer period. Over to you, Wyatt and Connor.

Thank you, Mr. Chair. I'm on Slide 8. 2022 was another very strong year for our business. We achieved record FFO per unit, building on our track record of double-digit annual growth for over a decade. Our strong operating performance was driven by the stability of our high-quality cash flows, organic growth and contributions from acquisitions. We delivered record performance on our development activities and agreed to deploy capital well ahead of our targets, growing in every market we operate, while dramatically expanding our renewables operations and making our first transition investments. Other highlights for the year include, we against key commercial priorities, securing contracts to deliver 11,000 gigawatt hours of clean energy annually, including 5,000 gigawatt hours to corporate offtakers. We commissioned approximately 3,500 megawatts of new capacity and progressed over 19,000 megawatts through construction and advanced stage development. And finally, we maintain our robust investment-grade balance sheet and ended the year with almost $4 billion of available liquidity, no material near-term maturities and limited floating rate exposure. Moving to Slide 9. Over the last 12 months, we committed or deployed almost $3 billion net to Brookfield Renewable of capital across various transactions in every major market in technology we operate in, highlighted by our acquisition of Australia's largest integrated power generation and retail business, Origin, creating the opportunity to build a leading renewable platform while allowing the early retirement of one of the country's largest coal-fired power plants. We also recently announced the acquisition of a fully integrated operator and developer and new energy renewables, solidifying our position as one of the largest renewable energy developers in the U.S. with almost 90,000 megawatts of operating and development assets in the country. We formed a strategic partnership with Cameco to acquire Westinghouse, a leading provider of mission-critical technology services and products to the nuclear industry. The partnership brings together Cameco's expertise as 1 of the largest global suppliers of uranium fuel for nuclear energy with our clean energy capabilities to create a powerful platform for strategic growth across the nuclear sector, a sector which we believe is a critical component of any credible net 0 plan. And finally, we made a significant investments in India highlighted by our agreement with Nevada, a leading clean energy business, where we will fund -- we will help fund the build-out of their large-scale renewable pipeline. Looking at Slide 10. All of this has translated into very strong performance with total returns for our shareholders over a sustained period that have outperformed the broader market and the relevant indices. With that, I'll hand the call over to Connor to take you through the remainder of the presentation.

Thanks, Wyatt. Turning to Slide 11. Demand for clean energy from corporates government-supported electrification and decarbonization targets and an increasing focus on energy security, all continue to be key trends accelerating investment and driving returns in our sector. We have seen increased demand specifically coming from technology companies who have greenhouse gas emissions reduction targets and are looking to partner with renewable energy producers that can deliver specialized solutions. Renewables are also increasingly the cheapest form of electricity generation in almost all markets and as both the most economic and the clean solution, renewables are the preferred choice for new build energy capacity. Turning to Slide 12. Today, Brookfield Renewable is a leading global clean energy company with almost 164,000 megawatts of operating and development capacity and a global platform spanning across 5 continents. For the better part of the last century, A small handful of global energy companies experienced sustained periods of profitable multi-decade growth. Those companies were those with global platforms, leading us annual FFO per unit growth target. The first growth lever is inflation. We are in a period of higher inflation and with 70% of our revenues indexed to inflation and approximately 97% of our debt financed with fixed interest rates, we expect to generate 2% to 3% annual FFO growth per unit over the next 5 years as our revenues grow and our debt servicing costs remain relatively unchanged. This outcome is a result of our disciplined approach to financing and contracting our assets. The second growth lever comes from margin enhancement. With over 5,500 gigawatt hours of generation from our hydro is available for recontracting over the next 5 years. and increased demand for baseload carbon-free generation, we estimate FFO growth of 2% to 4% from this lever based on recontracting at all end market prices on a forward basis, equating approximately to $130 million of incremental annual FFO over the next 5 years. The growth component that is probably most underappreciated within our business is our development pipeline. Our deep pipeline of projects includes advanced stage assets with significant dollars already in the ground and projects fully funded with project level debt and match to high-quality, long-term PPAs, meaningfully derisking these future cash flows. Looking at the detail. We have close to 5,500 megawatts of projects where our development dollars are substantially invested and are expected to deliver $80 million of annual FFO when commissioned. Further, we have an additional over 10,000 megawatts of advanced stage development projects that have been materially derisked and for which we have secured substantially all the required funding. These projects are expected to generate $120 million of annual FFO when commissioned. We estimate a 3% FFO growth from these projects alone and continue to pull forward greater portions of our development pipeline. Finally, we see a robust market for actionable M&A growth opportunities that would contribute immediately to cash flows. We remain uniquely positioned to take advantage given our strong balance sheet, access to partner capital and the ability to source and underwrite deals globally. And what this means for our business is that we are poised to deliver FFO units -- FFO per unit growth over the next several years that is in line that is in line or ahead of the previous 10 years. Lastly, we look forward to connecting with you at Brookfield Renewables Annual Investor Day, which is scheduled to take place on the 21st of September later this year. That concludes our prepared remarks. We would now be pleased to answer any questions. Jennifer, would you please announce our first question?

Connor, Mr. Chair, there are no questions to be addressed.

Ladies and gentlemen, as there are no questions or comments, I would like to thank you all for taking the time to join us today. That concludes our meeting.