Naturgy Energy Group, S.a. · BME:NTGY
Naturgy Energy — FY2020 Earnings Presentation
33 slides from Naturgy Energy's earnings presentation, Feb 4, 2021
Slide 1: FY20 Results
FY20 Results 4 February 2021
Slide 2: Agenda
Recent events Scenario Consolidated results Results by business unit Summary 2020 and outlook 2021 2
Slide 3: Recent events
Recent events
Slide 4: Recent events: IFM tender offer
1. Recent events Recent events IFM tender offer Unsolicited and partial for up to 22.689% of Naturgy’s share capital at €23/share • Naturgy informed of interest shortly before public announcement • Bidder had not requested nor received any information from the Company • Naturgy became aware of bid t
Slide 5: Scenario
Scenario
Slide 6: Electricity and gas demand evolution during 2020
2. Scenario Electricity and gas demand evolution during 2020 Weekly avg. FY20 vs. FY19 Spain 6% Chile 1% Panama 7% Brazil 13% 10% 10% 20% 40% 10% 20% 0% 0% 0% 0% -10% -10% -10% -20% -20% -20% -20% -40% 16-Mar 16-Mar 16-Mar 16-Mar 25-May 25-May 25-May 25-May 03-ago 21-dec 03-ago 21-dec 03-ago 21-dec
Slide 7: Energy markets evolution during 2020
2. Scenario Energy markets evolution during 2020 (avg. FY20 vs. FY19) Brent (USD/bbl) NBP (USD/MMBtu) Spanish electricity market (Pool) (€/MWh) 64.1 35% 29% 47.7 29% 4.5 34.0 41.7 3.2 FY19 FY20 FY19 FY20 FY19 FY20 Henry Hub (USD/MMBtu) JKM (USD/MMBtu) CO2 (€/t) 21% 37% 6.0 0% 2.7 24.8 24.7 2.1 3.8 F
Slide 8: FX evolution during 2020
2. Scenario FX evolution during 2020 (avg. FY20 vs. FY19) Chile Brazil Argentina 13% 24% 34% 0.0013 0.23 0.0011 0.02 0.17 0.01 FY19 FY20 FY19 FY20 FY19 FY20 Mexico Panama 12% 2% 0.05 0.89 0.88 0.04 FY19 FY20 FY19 FY20 Ongoing Widespread andFX weaknessdrop of commodity prices unprecedented Source: Bl
Slide 9: Consolidated results
Consolidated results
Slide 10: New reporting structure and perimeter changes
3. Consolidated results New reporting structure and perimeter changes Networks CGE Electricidad classified as held for sale following disposal agreement Spain with China State Grid LatAm Energy management composed of i) markets and procurement, ii) international LNG, iii) pipelines (EMPL), iv) Spain
Slide 11: Key highlights
3. Consolidated results Key highlights Key figures (€m, % vs. FY19) Impact from challenging scenario: demand, FX and tariff/prices Ordinary EBITDA Ordinary Net Income New regulation in Spain electricity distribution Volume step down in the EMPL 3,714 ~4.0bn 872 At constant perimeter Asset valuation
Slide 12: Ordinary EBITDA evolution by key drivers
3. Consolidated results Ordinary EBITDA evolution by key drivers (€m) Excluding CGE Electricidad 13% CLP devaluation Impacted by 24% BRL devaluation €545m cumulative COVID-19 efficiencies 2 years in Structural changes advance 4,348 in gas markets New regulation in elec. 15% distribution Spain (50) 3
Slide 13: Asset valuation review
3. Consolidated results Asset valuation review (€m) 3,560 1,363 Summary Other 36 20 Argentina gas 260 198 Spain conventional generation (mainly CCGTs) €1,145m impairment due to structural changes in 1,145 energy scenario 2,197 Argentina €198m write down to reflect macro 16 scenario and hyperinflatio
Slide 14: CGE Electricidad disposal agreement
3. Consolidated results CGE Electricidad disposal agreement Summary Consolidated impacts (€m) Net debt P&L Sale of Naturgy’s entire equity shareholding in CGE-Electricidad (96.04%) 14,928 to China State Grid 13,612 11,042 -250 Purchase price of €2,570m (equity value) fixed in Euros and payable in ca
Slide 15: EBITDA evolution by business unit
3. Consolidated results EBITDA evolution by business unit (€m) Excluding CGE Electricidad 15% 96 4,348 4,252 (38) 3,714 (137) 25 3,449 (449) (33) (265) Including the following FX impacts: -€152m -€15m -€8m FX: -€175m EBITDA Non-ordinary Ordinary Networks Networks Energy Renewables Supply Ordinary No
Slide 16: Net Income evolution
3. Consolidated results Net Income evolution (€m) 1,401 1,378 (23) 37% 59 872 (565) (1,219) (347) Net Non-ordinary Ordinary Activity Financial result Ordinary Non-ordinary 1 Net income items net and others net items income FY19 income income FY20 FY19 FY20 Results impacted by weaker operations and i
Slide 17: Cash flow and net debt evolution
3. Consolidated results Cash flow and net debt evolution (€m) Cash flow Net debt FY20 vs. FY19 Ordinary EBITDA 3,714 -15% (%): avg. cost of debt2 Non-ordinary items (265) 3.2% 2.5% EBITDA 3,449 -19% 15,268 1,543 Taxes (214) 235 13,612 Net interest cost (538) (428) Other non-cash items (53) (1,626) (
Slide 18: Shareholder remuneration FY 2020
3. Consolidated results Shareholder remuneration FY 2020 DPS (€/sh.) ✓ ✓ 1st int. 2020 2nd int. 2020 2020 final July-20 November-20 AGM-211 0.31 0.50 0.63 Paid Paid Proposal Total 2020 Dividend 1.44 Final dividend against 2020 to be paid in 1Q 2021 Note: 18 1. Subject to AGM approval
Slide 19: Results by business unit
Results by business unit
Slide 20: Networks Spain
4. Results by business unit Networks Spain EBITDA evolution by business line (€m) Highlights 1,607 58 1,665 1,627 1,538 Gas networks: lower sales as result of mild weather and (23) (15) (89) economic slowdown partially compensated by business optimization Electricity networks: lower financial remune
Slide 21: Networks LatAm
4. Results by business unit Networks LatAm EBITDA evolution by business line (€m) Highlights 961 16 977 Chile gas: tariff indexation and efficiencies offset by lower 840 834 (31) demand (59) (5) (15) (27) (6) -€21m -€65m -€26m -€3m -€37m Brazil gas: tariff indexation, efficiencies and lower energy l
Slide 22: Energy management
4. Results by business unit Energy management EBITDA evolution by business line (€m) Highlights 1,051 1,028 Markets and procurement: loss of gas supply cost (23) competitiveness and negative contribution of volume sales (46) 2 579 to avoid unrecoverable take or pay requirements (279) (73) 487 (53) (
Slide 23: Renewables
4. Results by business unit Renewables EBITDA evolution by business line (€m) Highlights 21 13 362 352 Spain: increased renewable and hydro generation in 332 5 337 (9) (10) Spain, partially offset by lower pool prices - - -€8m Australia: progressing in new wind farms developments to double existing
Slide 24: Supply
4. Results by business unit Supply EBITDA evolution by business line (€m) Highlights 411 392 359 Power supply: lower demand partially compensated by (19) 326 (33) lower pool prices and operational improvements (33) Gas supply: continued margin pressure and lower sales in residential and SMEs segment
Slide 25: Summary 2020 and outlook 2021
Summary 2020 and outlook 2021
Slide 26: Summary 2020
5. Summary 2020 and outlook 2021 Summary 2020 Energy demand, prices and LatAm currencies impacted by COVID-19 Structural challenges moving forward Gas contract renegotiations Acceleration in efficiencies as key lever to offset scenario Non cash €1,363m asset valuation review driven by scenario CGE E
Slide 27: Outlook 2021
5. Summary 2020 and outlook 2021 Outlook 2021 Higher volumes and efficiencies in gas Networks Spain New regulatory framework (gas distribution) Electricity distribution growth driven by capex and efficiencies Demand recovery levels unlikely until 2022 Networks LatAm Ongoing FX weakness only partly c
Slide 28: Appendix
Appendix Naturgy y 28
Slide 29: Alternative Performance Metrics (i/ii)
Appendix: 1. Alternative Performance Metrics Alternative Performance Metrics (i/ii) Naturgy's financial disclosures contain magnitudes and metrics drafted in accordance with International Financial Reporting Standards (IFRS) and others that are based on the Group's disclosure model, referred to as A
Slide 30: Alternative Performance Metrics (ii/ii)
Appendix: 1. Alternative Performance Metrics Alternative Performance Metrics (ii/ii) Alternative performance Reconciliation of values Definition and terms Relevance of use metrics 31 December 2020 31 December 2019 Current and non-current financial debt Gross financial debt - "Cash and cash Euros 15,
Slide 31: ESG Metrics
Appendix: 2. ESG Metrics ESG Metrics ESG metrics FY20 FY19 Change Comments Health and safety Significant improvement linked to he implementation of the Plan Naturgy 2019, as Accidents with lost time (1) units 4 14 -71.4% well as the impact from remote work due to Covid-19 crisis Reflects the reducti
Slide 32: Disclaimer
Disclaimer This document is the property of Naturgy Energy Group, S.A. (Naturgy) and has been prepared for information purposes only. This communication contains forward-looking information and statements about Naturgy. Such information can include financial projections and estimates, statements reg
Slide 33: Capital Markets contact
This presentation is property of Naturgy Energy Group, S.A. Both its content and design are for the exclusive use of its personnel. ©Copyright Naturgy Energy Group, S.A. CAPITAL MARKETS Tel. 34 912 107 815 e-mail: capitalmarkets@Naturgy.com website: www.Naturgy.com