Naturgy Energy Group, S.a. · BME:NTGY
Naturgy Energy — FY2018 Earnings Presentation
33 slides from Naturgy Energy's earnings presentation, Jan 30, 2019
Slide 1: FY18 Results
Naturgy by FY18 Results 30 January 2019
Slide 2: Agenda
Agenda 1. 2018 key corporate events 2. Progress on Strategic Plan 18-22 3. FY18 results 4. Summary 2018 and Outlook 2019
Slide 3: 2018 key corporate events
01 2018 key corporate events 01
Slide 4: 2018 Key corporate events
2018 Key corporate events February May June 2H18 Management Ownership & Strategic Plan 18-22 Plan execution Organization New Executive Chairman New shareholder structure Focused on value over size Roll out of value creation Leaner organization New corporate identity pillars Smaller Board of Director
Slide 5: Progress on Strategic Plan 18-22
02 Progress on Strategic Plan 18-22 01
Slide 6: Value creation pillars
Value creation pillars Simplicity & accountability Shareholder Value Optimization remuneration creation Capital discipline Making progress on Strategic Plan 6
Slide 7: Simplicity & accountability
Simplicity & accountability Smaller Board Higher accountability More transparency Asset valuation review (€bn) Naturgy 9.3 Other write-down UF Gas ~4.9 Corporate functions Spain 4.4 conventional power Infra. Infra. Gas & Infra. generation Executive Chairman Independent Directors LatAm LatAm Po
Slide 8: Optimization
Optimization Higher visibility and lower risk More efficiency Better capital structure Ordinary opex base evolution (€bn) Renewal and extension of gas ~€4.0bn procurement contract with 2.5 o.w. transacted Sonatrach -€200m €110m €bn 2.3 efficiencies in 2H18 Amortization of all bank- ~1.7 funded
Slide 9: Capital discipline
Capital discipline Business positioning More renewable exposure Focus on targeted markets and businesses: Installed capacity (GW) ~2.6 Disposals completed: Total proceeds Gas distribution and supply in Italy ~1.7 ~1.5 Nedgia Spain (20%) €2.6bn + ~1GW Colombia gas distribution and supply
Slide 10: Shareholder remuneration
Shareholder remuneration Dividend Share buy-back 1st interim: July 31, 2018 0.28 2018 Completed dividend €145m (as of 29 Jan) +30% vs. 2017 2nd interim: 1.30 Nov 27, 2018 0.45 €/sh €400m 2 Remaining 2018 final: €255m 0.57 (up to June‘19) March 20191 Delivery on committed shareholder remuneration
Slide 11: New long term incentive plan
New long term incentive plan Overview of management’s new LTIP 1 Based on total shareholder’s return Top 26 managers Share price appreciation + dividends paid over the period of the strategic plan 2 Payable in 2023 SPV invested €200m at €23.15 After 2022 AGM Payable in 2023 once all initial investme
Slide 12: FY18 results
03 FY18 results 01
Slide 13: Key highlights of FY18 results
Key highlights of FY18 results Key figures (€bn, % vs. 2017) Ordinary EBITDA Ordinary Net Income 1 Activity growth in all businesses offset by FX 2 Significant non-ordinary effects 4.4 + 12% 1.2 + 57% 3 €4.9bn write-down Capex Net Debt 4 >70% of total capex for growth 2.3 + 30% 13.7 - 10% A soli
Slide 14: Main non-ordinary items & FX impact
Main non-ordinary items & FX impact Main non-ordinary items: FX impact in: (€m) 1% 7% EBITDA Net Income 1 Capture costs (180) (137) 49% 16% 2 Asset write-down - (3,824) EBITDA - €218m 6% 3 Discontinued operations & minorities - 49 21% 4 Gas transport & procurement retroactivity (50) (38) 2% 4% 5 Chi
Slide 15: EBITDA evolution (€m)
EBITDA evolution (€m) Activity: + €683m + 12% 498 39 4,413 3,903 45 3,948 (31) (9) (32) 4,019 (394) Including the following FX impacts: - €17m - €14m - €171m - €16m FX: - €218m EBITDA FY17 Non-ordinary Ordinary Gas & Power Infra. EMEA Infra. LatAm Infra. LatAm Other Ordinary Non-ordinary EBITDA FY18
Slide 16: Net Income evolution (€m)
Net Income evolution (€m) + 57% 1,360 345 107 1,245 793 (567) FX: - €103m (4,067) (2,822) Net Non-ordinary Ordinary Activity Financial Ordinary Write-down Net income items Net result, Net and others income FY17 income associates income FY18 FY17 & other FY18 A solid ordinary Net Income 16
Slide 17: Cash flow (€bn)
Cash flow (€bn) Sources and uses of cash Highlights 5.5 5.5 Sources of cash driven by… Business performance and efficiencies 1,3 Net debt reduction (24%) Divestments from asset optimization Divestments (47%) 2,6 0,8 Div. to Min. & others (14%) Share buy back (2%) 0,1 Shareholder remuneration
Slide 18: Net debt evolution (€bn)
Net debt evolution (€bn) Net debt Main financing operations Avg. cost of debt 3.4% 3.1% Liability management and liquidity optimization (€bn) Net debt/EBITDA1 3.9x 3.4x Bank debt amortization holdco 1.7 holdco. debt2 84% 78% Liability management holdco 0.9 16.4 15.3 Bond repurchase holdco 0.
Slide 19: FY18 results by business unit
04 FY18 results by business unit 01
Slide 20: Gas & Power
Gas & Power EBITDA evolution (€m) Highlights Activity: + €515m Gas, Power & services sales: higher gas margins 12 1,453 202 78 1,360 partially offset by margin pressure in power supply (93) 206 International LNG: higher sales and margins 980 955 Europe Power Generation: higher prices and a les
Slide 21: Infrastructure EMEA
Infrastructure EMEA EBITDA evolution (€m) Highlights Activity: + €53m 40 1,810 25 5 9 1,849 1,770 1,802 Spain gas networks: operating growth and net (47) efficiencies outweigh lower meter rental revenues Spain electricity networks: efficiency gains and accrual Including the following FX impacts:
Slide 22: Infrastructure South LatAm
Infrastructure South LatAm EBITDA evolution (€m) Highlights Activity: + €140m Chile electricity: activity growth offset by lower revenues 18 877 12 859 43 846 from prior years regularizations and FX impact 791 (25) (61) (55) Chile gas: higher revenues from tariff and sale price indexation offset
Slide 23: Infrastructure North LatAm
Infrastructure North LatAm EBITDA evolution (€m) Highlights Activity: + €7m 11 284 (1) (8) 275 273 Mexico gas: higher energy margins offset by FX impact 232 and higher opex as a result of the commercial repositioning (43) Including the Panama electricity: activity growth negatively affected by f
Slide 24: Summary 2018 and Outlook 2019
05 Summary 2018 and Outlook 2019 01
Slide 25: Summary 2018
Summary 2018 A year of transformation 2018 results Activity growth in all businesses impacted by FX New Executive Chairman and shareholder structure Strong ordinary growth ~12% EBITDA ~57% Net Income €bn growth Of total Leaner organization, higher business Investing for the future 1.6 capex ~70% C
Slide 26: Outlook 2019 by business unit
Outlook 2019 by business unit Outlook Group/Business unit Key drivers 2019 Additional ~€100m efficiencies across businesses (capture costs of ~€150m) On track to achieve €500m efficiencies by 2022 Gas, Power and Services sales: margins recovery supported by commercial repositioning Gas & Power
Slide 27: Outlook 2019 by business unit
Outlook 2019 by business unit Outlook Business unit Key drivers 2019 Chile electricity: activity improvement and tariff increase Chile gas: costs and capex optimization Infra South LatAm Brazil gas: inflation recognition in tariffs and commercial repositioning Argentina: inflation recognitio
Slide 28: Outlook 2019 under last month scenario
Outlook 2019 under last month scenario (€bn) ~4.6 ~1.4 ~2.0 ~15.2 EBITDA1 Net Income1 Capex Net Debt (IFRS16) vs. 4.0 in 2018 vs. -2.8 in 2018 of which ~65% growth vs. 15.3 in 2018 Dividend2 1.37 €/share +5% vs 2018 Share buy-back €400m Notes: 28 1. EBITDA and Net Income 2019E after the ~ €150m capt
Slide 29: FY18 results Q&A
Naturgy by FY18 results Q&A
Slide 30: Appendix
Naturgy y Appendix
Slide 31: Alternative Performance Metrics
Alternative Performance Metrics 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 Alternative Performance Metrics (APM), which are view
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