Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — Investor Presentation (January 2024)
48 slides from Edp's investor presentation, January 2024
Slide 1: Investors' Presentation January 2024
INVESTORS’ PRESENTATION January 2024
Slide 2: Disclaimer
Disclaimer This document has been prepared by EDP - Energias de Portugal, S.A. (the "Company") solely Forward-looking statements include statements regarding: objectives, goals, strategies, for use at the presentation to be made on this date and its purpose is merely of informative outlook and growt
Slide 3: Global company, leader in the energy sector, present in 4 regional hubs
We are a global company, leader in the energy sector, present in 4 regional hubs throughout different stages of the value chain % Weight on EBITDA 2022 Renewables, Clients & EM North America Europe APAC ~67% Wind Solar Solar Energy onshore utility-scale DG management Wind Hydro Storage H2 Client off
Slide 4: Business Strategy
@edp Business Strategy
Slide 5: Leading the energy transition to create superior value
Leading the energy transition to create superior value Our commitments Key figures and targets Accelerated and sustainable growth €25 Bn 4.5 GW/yr >50 GW gross investment 2023-26 gross additions 2023-26 RES gross additions 2021-30 ESG excellence and future-proof organization Coal free All Green Net
Slide 6: Consolidating presence across technologies with differentiating value propositions
We are consolidating our presence across technologies with differentiating value propositions Wind & Solar (5.0 GW) Wind onshore ~40% Top 4 global1 player with extensive track record along the full value chain with highly experienced teams Solar Utility scale (9.4 GW) ~40% Additions ramping up quick
Slide 7: Increasing investment in the energy transition, focus on renewables and core low-risk markets
Accelerated and sustainable growth We are increasing our investment in the energy transition, with a strong focus on renewables and core low-risk markets Reinforcing our investment... ... in the energy transition, across core low risk markets Annual Gross Investments1 (€ Bn) Gross Investments1 2023-
Slide 8: Investment focused on value creation under inflation and interest rate pressure
EDP’s investment focused on value creation under inflationary and interest rates pressure 2023 has shown increase in project returns while PPA prices and decreasing capex costs supporting preserving risk levels target returns Wind & Solar 2023 YTD approved & secured investments by region Returns exc
Slide 9: Growing our distribution asset base with high visibility
We are growing our distribution asset base and we have high visibility over the upcoming period Distribution business Growing our Distribution business… ... on the back of visibility on regulatory frameworks Regulated Asset Base, € Bn RoR Regulation and Gross Investments1 Portugal Spain Brazil By 20
Slide 10: Ramping up growth with clear visibility on execution
Accelerated and sustainable growth We are successfully ramping up growth with clear visibility on execution We are scaling-up our growth rate… … and have clear visibility on execution Gross additions, GW € Bn, 2023-26 ~181 GW €25 Bn (2023-26) Electricity Networks ~15% ~50% ~6x Renewables, 2.4 ~85% C
Slide 11: Distinctive asset rotation strategy to crystalize value
Accelerated and sustainable growth We will deploy our distinctive asset rotation strategy to crystalize value and fund additional growth opportunities ~€7 Bn AR proceeds and capital gains ~€20 Bn 4.5 GW/yr EV1 rotated track record since 2012 Upfront value crystallization ~30% Build to Sell Growth ac
Slide 12: EDP Brasil minorities acquisition contributing to earnings growth
EDP Brasil minorities acquisition contributing to earnings growth, reinforcing the alignment of the portfolio with the global energy transition EDP Brasil earnings 100% consolidated in 2H23 Strategy in Brazil fully aligned with the energy transition Net profit enhancement from EDP Brasil minorities
Slide 13: EDPR minorities buyback
Recently announced EDPR minorities buyback as part of our strategy to invest in cashflow and earnings accretive renewable projects 2016-2017: Sale 2023: Buyback 1.7x EV/MW 1.2x EV/MW 548 MW 422 MW 970 MW Gross installed capacity Gross installed capacity Gross installed capacity CTG, through ACE CTG,
Slide 14: Transaction with solid strategic rationale and immediate accretion
Transaction with a solid strategic rationale, leading to immediate cashflow and earnings accretion from day one Total portfolio Key Financials Rationale 100% Onshore Wind 418 MW 970 MW 1.0 TWh €0.57 Bn Immediate cashflow and earnings Installed capacity 11y avg. age1 Total consideration accretion 11y
Slide 15: Diversified sources of cash to deliver on growth
We have diversified sources of cash to deliver on our growth BP23-26 Organic Sources and Uses of Funds (€ Bn) Uses of cash Sources of cash ~€27 Bn Dividends ~3 Organic CF1 Delisting ~1 (net of maintenance ~9 EDP Brasil CAPEX) and others Asset Rotation + ~8 Expansion Disposals Investment ~23 TEI2 ~4
Slide 16: Sound balance-sheet and low-risk profile
We are keeping a sound balance-sheet and low-risk profile 17 Reinforced commitment to 16 13 a strong BBB rating Net Debt Reached >20% FFO/ND in € Bn 2021, achieving BBB credit rating Solid cash flow generation with +€4 Bn net debt after a ~20% ~21% ~21% €25 Bn gross investments plan FFO/Net Debt 1 O
Slide 17: High financial liquidity covers refinancing needs until 2026
High financial liquidity at >€9 Bn, supported by >€6bn of available credit lines, covers refinancing needs until 2026 Financial liquidity EDP consolidated debt maturity profile1 as of Sep-23, €Bn as of Sep-23, €Bn EDP Brasil Cash & Equivalents 2.0 EDP SA & EDP Finance BV and Other (% of total debt)
Slide 18: 20 years track record in energy transition: coal-free by 2025
20 years track record in the energy transition: On track to be coal-free by 2025, with significant steps taken this year EDP’s total electricity generation mix Promoting a Just Transition in old coal sites Coal Renewables Other • Sale of 80% stake signed in Sep 20th, 2023 with a put option for the r
Slide 19: Decarbonize: For a climate-positive world
Decarbonize: For a climate-positive world -28% 0.160 Coal free by 2025 Scope 1 + 21 (tCO2e/MWh) 0.157 +2% (vs. 2020) -77% (vs. 2020) -95% -96% All green by 2030 (vs. 2020) 0.112 0.036 (vs. 2020) (vs. 2020) 0.008 0.006 Net Zero by 2040 -45% Reinforce efforts for the (vs. 2020) -90% decarbonization pa
Slide 20: Financial targets
@edp Financial targets
Slide 21: Distinctive and resilient portfolio with low-risk profile
We have a distinctive and resilient portfolio, with a low-risk profile and focused geographic presence Our distinctive and resilient portfolio… ... increasingly aligned with the Energy Transition 2026 guidance, share of EBITDA <15% <5% Iberia >95% Energy Transition at our core Rest of Europe Share o
Slide 22: Selective and disciplined investment framework delivering stronger returns
We are keeping our selective and disciplined investment framework, delivering stronger returns throughout the cycle Attractive returns Typical metrics of project approvals1 over the last 6 months Target Achieved IRR/WACC (x) >1.4 Region Technology Unlevered project IRR2 Stronger returns and cash yie
Slide 23: Growing and consolidating leading energy transition portfolio
We are committed to further grow and consolidate our leading energy transition portfolio, delivering superior value Recuring Net 0.9 ~1.4-1.5 12-14% Income1, € Bn CAGR 2022-26 EBITDA, € Bn ~5.7 6% CAGR 2022-26 4.5 ~1.5 Electricity Networks 1.5 ~1.2 Hydro, Clients & EM 0.9 ~3.0 Wind & Solar2 2.2 2022
Slide 24: Superior value through EPS growth and dividend policy
Superior value creation for all stakeholders We are delivering superior value through sustained EPS growth and a solid dividend policy with an increased floor Delivering strong earnings growth… … with an attractive dividend policy Recurring Net Income1 From… To… € Bn DPS floor €0.19 €0.19 in 2023 +1
Slide 25: 9M23 Results
9M23 Results @edp
Slide 26: Recurring EBITDA +26% YoY
Recurring EBITDA +26% YoY prompt by a recovery on hydro conditions and lower sourcing costs, together with ~€0.4Bn of AR Gains Recurring EBITDA1 ,€m YoY growth, % ∆ YoY +26% 3,830 • Recovery of hydro in Portugal vs. very weak 9M22 3,046 • Lower electricity and gas sourcing costs +€828m Hydro, +783m
Slide 27: Generation & supply integrated EBITDA rebound
Generation & supply integrated EBITDA rebound, on the back of recovery of hydro generation and sourcing conditions vs. extremely adverse context in 9M22 Hydro, Clients & EM Recurring EBITDA €m YoY growth, % Iberia 9M22 9M23 YoY + 3x ∆ YoY 1,271 Hydro Generation, TWh 3.6 5.6 +58% Electricity spot pri
Slide 28: Wind & Solar EBITDA stable YoY
Wind & Solar EBITDA stable YoY with ~€0.4Bn AR gains mitigating weaker wind resources and selling prices and lower OW contribution Wind & Solar Recurring EBITDA1 €m YoY growth, % ∆ YoY 9M22 9M23 YoY -3% 1,482 1,437 Installed Capacity2, GW 14.3 15.1 +6% AR Gains 263 +130m 393 +49% YoY Prod. deviation
Slide 29: Electricity Networks EBITDA roughly stable YoY
Electricity Networks EBITDA roughly stable YoY Electricity Networks Recurring EBITDA €m YoY growth, % Iberia 9M22 9M23 YoY ∆ YoY Return on RAB Portugal , % 5.05% 5.57% +53 bps -2% 1,136 1,115 Return on RAB Spain, % 5.58% 5.58% 0 bps Portugal 391 385 -7m OPEX/ Supply Point Iberia1, € 35.1 36.8 +5% Sp
Slide 30: Net financial costs increased +9% YoY
Net financial costs increased +9% YoY penalized by FX, interest related costs flat YoY Net Financial Costs EDP excl Brazil Brazil Avg. nominal debt by currency €m BRL 12% +9% Other 6% -1% 627 619 635 51% EUR 580 16 47 -8 39% 41% 30% USD 61% 59% Avg cost of debt of 3.9% with BRL representing 12% of n
Slide 31: Cost of debt increase mitigated by pre-hedge of interest rates
Cost of debt increase mitigated by pre-hedge of interest rates, declining weight of USD debt and recent decrease of benchmark interest rate in Brazil Cost of Debt1 2023 Bond Issuances and Rates Pre hedges 9M22 9M23 YoY Date Amount Maturity Implicit Yield Jun-23 €750m June 2028 2.5%2 Oct-23 €600m Apr
Slide 32: Net debt Sep-23 impacted by regulatory working capital
Net debt Sep-23 impacted by temporary increase of regulatory WC in Portugal, to be securitized in 4Q23; sound credit ratios Net Debt/EBITDA 3.3x Change in Net Debt € Bn 0.8 2.0 16.9 0.1 0.5 16.4 Organic cash-flow = €0.9Bn 3.9 RR 13.2 1.8 1.4 0.5 Regulatory working capital +€2.3bn in 9M23 mostly due
Slide 33: Recurring net profit of €1.0 Bn
Recurring net Profit of €1.0 Bn, with YoY comparison reflecting the hydro crisis in 9M22, and supported by lower minorities in Brazil since 3Q23 Recurring Net Profit1 Recurring Net Profit €m Δ YoY €m 1,026 EBITDA 3,830 +784 D&A and 512 Provisions 1,288 -65 EBIT 2,542 +720 Net Financial Costs 630 -50
Slide 34: Positive balance for 2023 and positive outlook for 2024
Positive balance for 2023 and positive outlook for 2024 Positive developments in 4Q23… … Leaving us optimistic for 2024 performance Hydro resources above average: +75% in October, 2x in Hydro reservoirs at ~80%, maximum level of the last 10y for November, +9% in December this time of the year ~€2.0
Slide 35: Annex
Annex @edp
Slide 36: Strengthened strategic targets
We strengthen our strategic targets, reinforcing our ambition to lead the energy transition Our commitments Key targets BP 2021-25 BP 2023-26 Accelerated and Deployment ~4 GW/year ~4.5 GW/year sustainable growth Asset Rotation €1.6 Bn/year in AR; €0.3 Bn in gains €1.7 Bn/year in AR; €0.3 Bn in gains
Slide 37: A way for a better tomorrow: ESG commitments
A WAY FOR A BETTER TOMORROW All in all – our ESG commitments Ambition Goal 2022 2026 target 2030 ambition Decarbonize: for a climate-positive SBTi: Scope 1 + Scope 2, gCO2e/kWh (% vs. 2020)1 160 (+2%) 36 (-77%) 8 (-95%) world SBTi: Scope 3 , MtCO2e (% vs. 2020)1 - - ~6Mn (-45%) Renewables generation
Slide 38: Renewables, Clients & EM
weed Renewables, Clients & EM a ee ae ioe ths = } i; ah See Y j
Slide 39: Consolidating superior renewables portfolio with diversified technology mix
We are consolidating our superior renewables’ portfolio, with a diversified technology mix Renewables EBITDA + Equity GW Evolution of installed capacity Geographic mix Technology mix GW, 2026 % installed capacity, 2026 % installed capacity, 2026 17% ~7 ~33 38% 2% 2% ~18 48% ~33 GW 9% ~33 GW 47% ~22
Slide 40: Pursuing asset rotation strategy; capacity additions 2023-24
Pursuing our asset rotation strategy with a strong execution; Capacity additions for 2023-24 expected at ~6.5 GW Strong asset rotation execution, exceeding targeted Renewables growth execution on track to deliver gains and proceeds capacity additions target for 2023-2026 Wind & Solar AR Gains/ Inves
Slide 41: Reinforcing established onshore portfolio in core low-risk markets
We are reinforcing our established onshore portfolio, focusing on our core low-risk markets Onshore portfolio Target onshore additions 2023-26 Breakdown in % of total onshore additions EDP regional hubs North America Europe South America APAC 7.4 ~43% 5.9 ~35% 2.5 ~15% 1.2 ~7% GW GW GW GW Substantia
Slide 42: Ocean Winds offshore portfolio providing growth visibility
OW has been building a sizeable and attractive offshore portfolio, providing significant visibility on growth over the next 10-15 years Offshore wind, GW Ocean Winds continues to grow with a total … which provides strong visibility on growth portfolio of 16.6 GW… post 2026 U/C Under dev. Floating Bo
Slide 43: Networks
Networks Investors’ Presentation 43
Slide 44: Growing and diversifying low-risk networks portfolio
We have been growing and diversifying our low- risk networks portfolio, acting as a portfolio stabilizer for the group Electricity Networks Resilient portfolio We are a top player in the … with strong track to volatile macro environments networks business… record and expertise Top tier grid operator
Slide 45: Investing in innovation and digitalization of networks
We are investing in innovation and digitalization, to deliver superior quality of service in our networks Distribution business Lead in innovation and digitalization… … enhancing quality and resilience… Average SAIDI1 across concessions, Min ~€0.9 Bn 100% investment in smart meters 405 -12% digitali
Slide 46: Portugal distribution: revenues supported by inflation and rate of return
Electricity distribution networks in Portugal: Revenues growth supported by inflation and rate of return annually indexed to 10-year bonds yields 2024 tariff proposal with a 4% increase in Annual RoRAB indexed to 10-year Portuguese regulated gross profit bond yields2 PT distribution regulated gross
Slide 47: Networks Net Regulated Asset Base +29% YoY
Networks Net Regulated Asset Base +29% YoY growth to €7.2bn, boosted by minorities buyout in Brazil and +71% RAB review at EDP São Paulo Positive outcome from EDP São Paulo tariff Overall EDP Group net RAB increased +29% YoY review for regulatory period 2023-27 EDP São Paulo Regulatory Asset Base, B
Slide 48: IR Contacts
IR Contacts E-mail: ir@edp.com Phone +351 210 012 834 Site: www.edp.com Investor presentation 48
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