Pge Polska Grupa Energetyczna S.a. · GPW:PGE
Pge Polska Grupa Energetyczna — H1 2021 Earnings Presentation
48 slides from Pge Polska Grupa Energetyczna's earnings presentation, Sep 28, 2021
Slide 1: Q2 & H1 2021 Financial and Operating Results
Q2 & H1 2021 Financial and Operating Results INVESTOR PRESENTATION September 28, 2021
Slide 2: Financials
Financials
Slide 3: Key financial data
3 Key financial data Consolidated [IFRS, PLN m] Q2 2021 Q2 2020 y/y H1 2021 H1 2020 y/y Sales 10 008 10 185 -2% 21 908 22 776 -4% including LTC compensations* 4 41 -90% 4 41 -90% EBITDA 3 048 1 035 194% 5 254 2 805 87% Recurring EBITDA** 2 084 1 347 55% 4 290 3 117 38% EBIT 1 994 -502 n/a 3 158 271
Slide 4: One-off items
4 One-off items Computation of recurring EBITDA and recurring EBIT: [IFRS, PLN m] Q2 2021 Q2 2020 y/y H1 2021 H1 2020 y/y LTC adjustment (including court verdicts) 4 41 4 41 Change of reclamation provision 932 -434 932 -434 Change of actuarial provision 17 -40 17 -40 Release of provision for the ris
Slide 5: One-off events in the operating segments
5 One-off events in the operating segments Conventional District Heating Renewables Distribution Supply Generation (PLN m) Q2 H1 Q2 H1 Q2 H1 Q2 H1 Q2 H1 21 21 21 21 21 21 21 21 21 21 EBITDA reported 1 538 2 049 205 715 189 382 724 1 382 354 706 One-off events, including: 937 937 7 7 - - 8 8 12 12 LT
Slide 6: Development of EBITDA by major value drivers
6 Development of EBITDA by major value drivers mln PLN Q2 2020 EBITDA REPORTED 1 035 One-offs 312 4 395 Q2 2020 EBITDA RECURRING 1 347 Result on electricity (generation&wholesale) 210 -+ Price of electricity (-583) (-38 PLN/MWh) Generation volume (+793) (+2,6 TWh) Heat sales 105 Price of heat (+54)
Slide 7: Recurring EBITDA in Q2 2021 – composition and development
7 Recurring* EBITDA in Q2 2021 – composition and development 2 084 716 15 23 342 198 189 601 Conventional Circular District Heating Renewables Supply Distribution Other EBITDA Generation economy** Q2 2021 601 198 189 342 716 15 23 2 084 Share in Q2 2021 EBITDA (%) 29% 10% 9% 16% 34% 1% 1% 100% Q2 20
Slide 8: Recurring EBITDA in H1 2021 – composition and development
8 Recurring* EBITDA in H1 2021 – composition and development 4 290 1 374 24 382 694 1 112 708 -4 Conventional Circular District Heating Renewables Supply Distribution Other EBITDA Generation economy** H1 2021 1 112 708 382 694 1 374 24 -4 4 290 Share in H1 2021 EBITDA (%) 26% 17% 9% 16% 32% 1% -1% 1
Slide 9: Segmental revenues and costs – Conventional Generation
9 Segmental revenues and costs Conventional Generation [PLN m] Q2 2021 Q2 2020 y/y H1 2021 H1 2020 y/y Sales, including: 4 891 5 763 -15% 10 739 12 567 -15% Sale of electricity 4 178 5 297 -21% 8 282 10 595 -22% Revenues from Capacity Market 533 0 - 1 046 0 - Auxiliary services 71 107 -34% 161 221 -
Slide 10: Segmental revenues and costs – District Heating
10 Segmental revenues and costs District Heating [PLN m] Q2 2021 Q2 2020 y/y H1 2021 H1 2020 y/y Sales, including: 1 065 879 21% 2 949 2 617 13% Sale of electricity 516 420 23% 1 338 1 196 12% Sale of CO2 0 1 -77% 28 202 -86% Revenues from Capacity Market 77 0 - 138 0 - Sale of heat 451 359 26% 1 37
Slide 11: Segmental revenues and costs – Renewables
11 Segmental revenues and costs Renewables [PLN m] Q2 2021 Q2 2020 y/y H1 2021 H1 2020 y/y Sales, including: 318 211 51% 641 521 23% Sale of electricity 191 109 75% 390 268 46% Sale of certificates of origin 38 36 6% 82 120 -32% Auxiliary services and leasing* 10 64 -84% 18 128 -86% Revenues from Ca
Slide 12: Segmental revenues and costs – Distribution
12 Segmental revenues and costs Distribution [PLN m] Q2 2021 Q2 2020 y/y H1 2021 H1 2020 y/y Sales, including 1 548 1 494 4% 3 225 3 135 3% Revenues from distribution services 1 471 1 412 4% 3 070 2 972 3% Other revenues from core activities 49 56 -13% 97 107 -9% Cost by kind, including 1 161 1 271
Slide 13: Segmental revenues and costs – Supply
13 Segmental revenues and costs Supply [PLN m] Q2 2021 Q2 2020 y/y H1 2021 H1 2020 y/y Sales, including: 3 429 5 519 -38% 13 927 15 686 -11% Sale of electricity 3 042 3 590 -15% 6 411 7 573 -15% Sale of CO2 allowances 0 1 517 -100% 6 640 7 086 -6% Sale of natural gas 72 46 57% 177 154 15% Sale of ot
Slide 14: Conventional Generation – EBITDA in Q2 2021
14 Conventional Generation – EBITDA in Q2 2021 1 800 937 1 600 1 400 663 530 1 200 1 000 -156 -212 -36 800 -91 35 10 600 -416 400 -323 -326 555 590 601 200 277 0 Electricity Result on the Electricity Result on EBITDA productio optimization EBITDA production Capacity Auxiliary Costs CO2 Personnel Q2
Slide 15: Conventional Generation – EBITDA in H1 2021
15 Conventional Generation – EBITDA in H1 2021 2 500 1 146 1 039 937 2 000 -252 -60 -442 1 500 -111 76 1 000 -548 -73 -323 -760 500 1 108 1 111 1 112 774 0 Electricity Result on the Electricity Result on EBITDA productio optimization EBITDA production Capacity Auxiliary Costs CO2 Personnel H1 n of t
Slide 16: District Heating – EBITDA in Q2 2021
16 District Heating – EBITDA in Q2 2021 400 62 300 28 32 -87 18 47 7 200 -35 46 -33 31 100 212 198 120 0 Heat Heat Electricity Electricity EBITDA Q2 production production production production Capacity Costs CO2 Personnel EBITDA Q2 Other 2020 difference in difference in difference in difference in M
Slide 17: District Heating – EBITDA in H1 2021
17 District Heating – EBITDA in H1 2021 1 000 138 900 52 -99 800 39 146 -1 7 -113 700 160 -76 600 31 746 500 708 400 462 300 Heat Heat Electricity Electricity EBITDA H1 production production production production Capacity Costs CO2 Personnel EBITDA H1 Other 2020 difference difference difference diff
Slide 18: Renewables – EBITDA in Q2 2021
18 Renewables – EBITDA in Q2 2021 220 74 -2 200 2 82 180 -22 160 140 -54 189 189 120 -1 100 108 80 Revenues Revenues Capacity Personnel Revenues Market EBITDA Q1 from from costs EBITDA Q1 from Other 2020 property agreements 2021 electricity rights with TSO Change 82 2 -54 74 -2 -22 EBITDA reported Q
Slide 19: Renewables – EBITDA in H1 2021
19 Renewables – EBITDA in H1 2021 450 430 123 145 410 -2 390 -38 -38 370 350 330 310 382 382 -1 290 270 301 -110 250 Revenues Capacity Personnel Revenues Revenues from EBITDA H1 from Market costs EBITDA H1 from agreements Other 2020 property 2021 electricity with TSO rights Change 123 -38 -110 145 -
Slide 20: Distribution – EBITDA in Q2 2021
20 Distribution – EBITDA in Q2 2021 800 8 27 130 9 700 51 600 -17 -72 500 716 554 400 300 EBITDA Q2 Volume of Change of Personnel EBITDA Q2 Network losses** Property tax Other 2020 distributed energy distribution tariff* costs 2021 Change 130 -72 51 0 9 27 EBITDA reported Q2 2020 554 One-offs Q2 202
Slide 21: Distribution – EBITDA in H1 2021
21 Distribution – EBITDA in H1 2021 1 500 8 1 400 58 17 176 38 1 300 -5 -54 1 200 -17 1 100 1 374 1 000 1 127 900 800 Volume of Change of EBITDA H1 Personnel EBITDA H1 distributed distribution Network losses** Property tax Other 2020 Costs*** 2021 energy tariff* Change 176 -54 38 -5 17 58 EBITDA rep
Slide 22: Supply – EBITDA in Q2 2021
22 Supply – EBITDA in Q2 2021 450 400 407 15 -4 29 12 350 -4 300 -80 250 200 342 150 100 50 0 8 -29 -50 -2 Result on Result on Services for Financial Provision for EBITDA Personnel EBITDA electricity electricity other segments instruments onerous Other Q2 2020 costs* Q2 2021 volume margin of PGE Gro
Slide 23: Supply – EBITDA in H1 2021
23 Supply – EBITDA in H1 2021 1 000 900 663 6 800 -20 -1 25 12 700 600 -174 500 400 694 300 200 -2 6 100 187 0 Result on Result on Services for Financial Provision for EBITDA Personnel EBITDA electricity electricity other segments instruments onerous Other H1 2020 costs* H1 2021 volume margin of PGE
Slide 24: PGE cash position provides plenty of headroom in the balance sheet
24 PGE cash position provides… H1 2021 Q1 2021 Gross Debt (PLN m) 11 240 11 475 … plenty of headroom Net debt (PLN m) 5 948 8 707 in the balance Net Debt/LTM EBITDA 0.71x 1.36x sheet Net Debt/Equity 0.13x 0.20x MOODY’S FITCH Long-term company rating (IDR) Baa1 BBB+ Rating outlook Stable Stable Date
Slide 25: Cash from operations, investments and net debt
25 Cash from operations, investments and net debt Consolidated Cash Flows [PLN m] Q2 2021 Q2 2020 H1 2021 H1 2020 Operating CF 3 688 5 091 3 290 5 309 Investing CF -1 231 -1 186 -2 076 -3 449 Financial CF 48 -3 901 12 -1 153 Change of cash and equivalents 2 505 4 1 226 707 Consolidated Balance Sheet
Slide 26: Debt development and structure (as at June 30, 2021)
26 Debt development and structure (as at June 30, 2021) Gross debt and net debt (in PLN million) 20 000 15 000 10 000 5 000 0 -5 000 Gross debt Net debt * In order to standardise the reporting of net debt (adjustment to the method of calculating covenants in loan agreements), starting from the resul
Slide 27: Debt maturity and available financing
27 Debt maturity and available financing Debt maturity profile (PLN m) as at June 30, 2021 2 500 2 000 1 500 1 000 500 0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Drawn debt and availability of external financing (in PLN m) as at June 30, 2021 10 000 9
Slide 28: Fundamentals of the distribution business
28 Fundamentals of the distribution business RAB (with RAB-AMI) development* Regulated revenue composition* (PLN m) (PLN m) 999 5 987 6 106 7 175 2 361 1 877 1 194 2611 2 514 2 611 17 567 18 929 16 884 1 226 1 245 1 091 1 231 1 274 1 313 1 016 975 1 050 RAB 2019 CAPEX Deduction RAB 2020 CAPEX Deduct
Slide 29: CO2 allowances – regulations and settlement
29 CO2 allowances – regulations and settlement Regulations in the III Settlement Period Free EUA recognized at a zero value (Cons. FS, note 16) As of 2013 only carbon allowances for heat production are EUA received free of charge. Carbon allowances for electricity Volume Value production are granted
Slide 30: Capital Expenditures
Capital Expenditures
Slide 31: Capital expenditures
31 Capital expenditures Segment (PLN m) Q2 2021 Q2 2020 y/y H1 2021 H1 2020 y/y Conventional Generation 970 443 119% 1 387 813 71% District heating 84 135 -38% 204 178 15% Distribution, including: 319 398 -20% 606 825 -27% New clients connection 150 161 -7% 279 350 -20% Distribution grid 65 136 -53%
Slide 32: Capital expenditures in H1 2021
32 Capital expenditures in H1 2021 PLN 466 m Conv. Generation modernisation and other PLN 30 m CAPEX Supply, Circular Economy and other Key projects 1% in H1 2021 PLN 606 m Distribution 26% Construction of unit no. 7 in Turów power PLN 546 m plant Generation 20% PLN 77 m TOTAL Renewables 4% Construc
Slide 33: Operations
Operations
Slide 34: Key operating data
34 Key operating data Net electricity generation by sources, sales and distribution [TWh] Q2 2021 Q2 2020 y/y H1 2021 H1 2020 y/y Net electricity generation, by fuels: 15.85 13.22 20% 32.94 28.58 15% Lignite 9.01 7.49 20% 17.61 14.72 20% incl. Turów 7 unit* 0.45 - - 0.45 - - hard coal (including): 5
Slide 35: Generation volume by fuel – Q2 2021 y/y
35 Generation volume by fuel – Q2 2021 y/y TWh National Power System (y/y): The effect of 15,85 GDP surge (10.9% y/y) in Q2 2021 due to the Q2 2021 13,22 lockdown of the economy in Q2 2020. Q2 2020 Domestic energy consumption higher by 4.0 9,01 TWh y/y, net import lower by 2.6 TWh y/y, 7,49 higher w
Slide 36: Generation volume by fuel – H1 2021 y/y
36 Generation volume by fuel – H1 2021 y/y TWh Conventional Generation 32,94 28,58 H1 2021 Generation volume: Increase in production in conventional power plants due to the surge in H1 2020 demand. 17,61 Lignite: higher generation in ELT by approx. 2.0 14,72 TWh y/y. 11,34 9,83 3,99 4,03 Hard coal:
Slide 37: Electricity market
37 Electricity market The economy makes up for pandemic downturn. Record-breaking GDP growth in Q2 2021 Domestic consumption and generation 17 000 GWh Q2 Q2 Q2: Consumption +10.8% (+4.0 TWh) 16 000 Lower net import (by 2.6 TWh) 15 000 14 000 Q2: Generation +19.9% (+6.6 TWh) 13 000 Total generation 1
Slide 38: Electricity market – pressure on margin from CO2 prices
38 Electricity market Pressure on margin as a result of raising CO2 prices BASE Forward next year and CO2 prices 370 Q2 . 350 322 330 310 266 290 • Current jump in CO2 prices triggers 270 232 250 significantly higher BASE price for 230 2022 by 90 PLN ~322 PLN/MWh 210 190 170 PLN/MWh 150 • BASE Y+1 l
Slide 39: Generation assets - conventional
39 Generation assets - conventional Power plants and CHP plants under pressure of energy import and declining demand • Higher power plant load due Availability Capacity Factor to raising demand and lower 84,3% 83,3% 82,0% 82,0% 80,5% 77,7% balance of energy import. 67,7% 58,3% 52,0% 49,0% • Increase
Slide 40: Generation assets – wind farms
40 Generation assets – wind farms Lower windiness, higher generation in the quarter as effect of new capacity Availability Load factor 97,6% 96,9% • Substantially lower load 29,8% 25,5% factor due to poor wind conditions in Q1 2021. H1 2020 H1 2021 • Lower levels of availability y/y. 97,4% 97,1% • S
Slide 41: Distribution assets
41 Distribution assets Volume of electricity distribution in H1 2021 Network losses [%] • Distribution volumes (last 12M) 5,60 increased in all tariff groups • Relatively lower level of 18,64 5,40 5,21 network losses at the end of 18,13 5,20 5,10 June (change in profile of off- 17,99 8% takers – low
Slide 42: Q2 2021 Output and sales of electricity
42 Q2 2021 Output and sales of electricity Illustrative Households** Conventional Generation 2.50 TWh 13.47 TWh 2.40 TWh (Q2 2020) 11.03 TWh (Q2 2020) Wholesale and Supply balancing market 28% District heating 16.25 TWh 9.08 TWh* 18.47 TWh (Q2 2020) 9.38 TWh (Q2 2020) 72% 1.76 TWh 1.63 TWh (Q2 2020)
Slide 43: H1 2021 Output and sales of electricity
43 H1 2021 Output and sales of electricity Illustrative Households Conventional Generation 5.24 TWh 26.82 TWh 4.91 TWh (H1 2020) 22.62 TWh (H1 2020) Wholesale and Supply balancing market 25% District heating 33.63 TWh 18.75 TWh* 37.39 TWh (H1 2020) 20.12 TWh (H1 2020) 4.77 TWh 75% 4.56 TWh (H1 2020)
Slide 44: Increasing prices at energy exchange
44 Increasing prices at energy exchange Hard coal (Polish Steam Coal Index PSCMI1) PGE average wholesale price of CO2 allowance (EUA_DEC_Y) electricity (Conventional Generation)* EUR/t PLN/GJ PLN/MWh 50,7 12,1 285 292 281 286 12,0 12,0 12,0 12,0 242 246 251 248 261 38,0 11,8 11,8 138% 27,6 26,6 -11%
Slide 45: Invitation for webcast
45 Invitation for webcast On behalf of Wojciech Dąbrowski President & CEO and Lechosław Rojewski Vice-President & CFO we kindly invite you to a webcast of the presentation of PGE H1 2021 results which will be held on Wednesday, September 29, 2021 at 9:30 AM (CEST) In order to register please visit h
Slide 46: Sell-side analysts covering PGE
46 Sell-side analysts covering PGE Institution Analyst BDM Krystian Brymora BOŚ Jakub Viscardi Citigroup Piotr Dzięciołowski IPOPEMA Robert Maj mBank Kamil Kliszcz Pekao Marcin Górnik PKO BP Andrzej Rembelski Raiffeisen Centrobank Oleg Galbur Santander Biuro Maklerskie Paweł Puchalski Societe Genera
Slide 47: Disclaimer
47 Disclaimer This presentation has been prepared by the management of PGE Polska Grupa Energetyczna S.A. (the “Company” or “PGE”) and other entities. This presentation does not constitute or form part of and should not be constructed as, an offer to sell, or the solicitation or invitation of any of
Slide 48: Investor Relations contacts
48 Investor Relations contacts Filip Osadczuk Tel: (+48 22) 340 12 24 filip.osadczuk@gkpge.pl Mob: +48 695 501 370 Krzysztof Dragan Tel: (+48 22) 340 15 13 krzysztof.dragan@gkpge.pl Mob: +48 601 334 290 Stanisław Ozga, CFA Tel: (+48 22) 340 12 69 stanislaw.ozga@gkpge.pl Mob: +48 887 171 324
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