Slide 1: Results Presentation 2017
<5 Results Presentation 2017 Lisbon, March 24, 2018
Slide 2: EBITDA +6% at €3.99bn, benefiting from the gain on Naturgas disposal
EBITDA +6% at €3.99bn, benefiting from the gain on Naturgas disposal (+€0.5bn one-offs) Recurring EBITDA -5% to €3.52bn, penalised by severe drought in Iberian peninsula (-€0.3bn) +0.6GW additions of wind and solar capacity Efficiency savings of €141m (26% above 2017 target for OPEX IV Programme) Ne
Slide 3: Recurring EBITDA €3.52bn
Previous Guidance 4Q17 highlights Actual Recurring €3.5-3.6bn €3.52bn EBITDA ▪ Low hydro impact in 4Q17: ̶ ~€100m on recurring EBITDA Recurring €850-900m €845m Net Profit(1) ▪ €0.3bn VAT refund in Spain Net Debt €14.0-14.5bn ▪ €0.6bn tariff deficit sales €13.9bn ▪ €0.3bn full cash in of 2017 TEI’s D
Slide 4: Recurring EBITDA by business
Weight on Recurring EBITDA Recurring EBITDA YoY Key highlights 39% +0.20bn ▪ +9% avg. capacity mostly US, Mexico and Brazil EDPR +17% ▪ 1st farmdown in UK wind offshore project (CfD awarded in Sep-17) 27% Regulated ▪ Gas distribution: -€83m YoY, to €128m, following disposals in Jul/Oct-17 -0.04bn
Slide 5: Negative impact on recurring EBITDA: ~€300m in 2017 from drought
Portugal: Hydro production deviation vs. avg. hydro year(1) Monthly hydro Production in Portugal vs. historical average (%) (TWh) EDP gross hydro production in Iberia: deviation vs. historical average(2) 2016 2017 2018 Historical average (1999-2017) Min e Máx (1999-2017) +33% 2017 was one of the fou
Slide 6: Regulated revenues and clawback change 2018 vs. 2017
Change 2018 vs. 2017 ▪ ERSE’s proposal Oct-13th Distribution Regulated ▪ Final figures annouced on Dec-15th -€0.15bn Revenues(1) ▪ Regulatory framework now stable for 2018-20 ▪ Focus on efficiency levers: grid losses, Opex, digitalisation ▪ Change in clawback levy since Aug-17 Clawback -€0.06bn ▪ Qu
Slide 7: Growth on renewables and Brazil balanced with value crystallisation
Net investments(1) 2017: geographical breakdown Recurring EBITDA breakdown (€bn) (%) By geography By business area 0.5(3) 19% 24% 18% 0.6(2) -2.1 15% 19% Networks Iberia 19% 19% 17% 23% G&S Iberia -0.4 0.3 -1.1 47% 40% 40% Sale of gas New hydro & distribution Acquisition of Renewables wind with PPA;
Slide 8: Strong visibility on growth improving competitiveness of generation portfolio
GW 2018 2019-20 2021-23 Secured New renewables in US: 0.68 0.5 ▪ PPAs and TEIs markets back to normal following the clarification of tax reform impacts 0.35 Value enhancing disposals: 0.35 0.15 ▪ Asset rotations (minority stakes) ▪ BOT (majority stakes) 0.49 0.15 New wind offshore projects: ▪ Moray
Slide 9: Greenfield Transmission Lines and Celesc in Brazil
Greenfield ▪ 5 transmission lines with 1,297km to be built until 2021/2022 Transmission ▪ Expected capex: R$3.1bn (~€800m), expected ROE 12%-14% (real terms) Lines ▪ Potential upside from funding costs and anticipation of construction schedule ▪ Distribution concession in Santa Catarina State Celesc
Slide 10: Profitable and focused growth
▪ 3.1 GW of renewables growth projects secured Profitable and (0.8W under construction) Visibility on focused growth ▪ Regulated networks Brazil: 5 new transmission concessions growth platforms and minority stake in Celesc ▪ Adjusted Net debt/EBITDA 2017 3.7x Financial Sound capital discipline ▪ I
Slide 11: Results Analysis
rede Results Analysis
Slide 12: Installed capacity and electricity production breakdown
Installed capacity breakdown by technology: Dec-17 Electricity Production breakdown by technology 2017 (GW, YoY Chg.) (TWh, YoY Chg.) Wind Hydro CCGT Coal Other(1) 2% 12% 1% 31% 14% 39% 39% 26.8 GW 70.0 TWh +6.1% YoY Flat YoY 11% 34% 16% 73% 55% Renewables Renewables Installed Capacity +6% YoY: +1GW
Slide 13: EDPR: average capacity increase driven by US, Mexico and Brazil
Average Installed Capacity EDPR EBITDA (GW) (€m) Iberia North America Other Iberia North America Other 828MW Under +9% Construction +17% 10,169 1,366 9,323 18% 1,171 21% 18% +8% +45% 17% 46% +16% 49% 43% +19% 44% 36% +1% 34% 41% +2% 36% 2016 2017 2016 2017 Avg. capacity increase driven by US, Mexico
Slide 14: Regulated networks: electricity EBITDA +6% YoY
Recurring EBITDA – Regulated networks (€m) Gas Iberia Electricity Iberia -4% 990 954 ▪ Deconsolidation of gas distribution: -€83m YoY 211 128 to €128m ̶ Gas Spain: sold on July 27th 779 +6% 826 ̶ Gas Portugal: sold on October 4th 2016 2017 Electricity EBITDA +6% YoY on lower OPEX (-1% YoY) and adjus
Slide 15: EDP Brasil: integrated hedging strategy
EDP Brasil Recurring EBITDA Integrated hedging strategy in energy markets (R$m) Distribution Pecém I Hydro Gen., Supply & Other 2016 2017 Excluding +8% GSF (hydro volume) Medium Low R$278m gain on Pantanal 2.217 2.056 PLD (spot price) Low High +8% 831 767 Distribution volume surplus -7% 467 504 Ge
Slide 16: Generation & Supply Iberia: increase of sourcing costs
Recurring EBITDA Generation & Supply Iberia (€m) 2016 2017 YoY Avg. selling price to customers 63 62 -1% -44% (€/MWh) 1,067 Hydro weight (%) 45% 22% -23pp Avg. fuel cost (gen. mix)(1) (€/MWh) 20 34 +70% 603 Regulatory costs (€m) 147 237 +61% CMEC deviation revenues 169 108 -36% (€m) 2016 2017 Stro
Slide 17: Opex IV corporate-wide efficiency programme
Operating costs 2017 Operating costs: 2018E Business area Indicator YoY Chg. Main drivers Target Savings Key initiatives already launched 58% Iberia Opex -1% ▪ Avg. MW: +7%; Thermal production: +29% ▪ Avg. Headcount(2): -2% (~200 employees) 180 Zero Base Budgeting Launched in Spain and IT ✓ (proform
Slide 18: Clear downward trend on marginal cost of debt
Net Interest Cost Marginal and average cost of debt (€m) (%, 2016-2017) (2) Weighted avg. marginal cost of debt EDP Avg. Cost of Debt 202 197 185 bp 179 175 4.4% 168 167 4.1% 154 -30 2.8% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2016 2017 1.9% -90 Net interest cost(1) (€m) 763 -13% 664 2016 2017 Avg. Net 16.4 -5% 15
Slide 19: Decline of interest costs partially offset by lower financial revenues
Financial Results & Associates: 2017 vs. 2016 (€m of net cost) One-offs(1) ▪ Net interest costs: -13% YoY 914 797 ▪ Lower revenues from regulatory 137 (99) 23 33 receivables due to lower interest rates 36 27 -1% ▪ Lower capitalised interest following 777 770 full commissioning of hydro plants in Por
Slide 20: Recurring net profit penalised by low hydro production in Iberia
Net profit 2017 Recurring net profit (€m) (€m) Naturgas 1,113 Capital Gain -74 919 Hydro volumes: 845 -€0.3bn 599 69 845 71 175 7 15 191 80 Coal plants Iberia EDPR Poland Gas disposals Wind asset life Reported Capital gains Impairm. Other(1) Energy tax Recurring 2016 EBITDA D&A Financials Taxes & 20
Slide 21: Portfolio reshuffling improving Adj. Net Debt/EBITDA to 3.7x
Change in Net Debt: Dec-17 vs. Dec-16 (€bn) Regulatory Receivables Net debt excluding reg. receivables Portfolio YoY 15.9 -0.8 reshuffling: 0.7 -1.8 -€2.4bn One-offs taxes/costs: +€0.5bn 1.0 ForEx: -€0.6bn -€0.3bn from extreme -0.1 -0.1 13.9 drought 15.0 0.9 -0.1 13.0 -2.0 Net Debt Rec. Organic Divi
Slide 22: Financial liquidity and debt maturity profile
Financial liquidity as of Dec-17 EDP consolidated debt maturity profile as of Dec-17 (€bn) (€bn) EDP S.A., EDP Finance B.V. and Other EDP Brasil Cash & Equivalents: €2.4bn Avg. Debt Maturity: 4.8Y 4.8 Available Credit Lines: €4.2bn 3.4 Revolving Credit Facility maturing on Oct-22(1) €3.3bn 2.3 2.0 O
Slide 23: IR Contacts
IR Contacts Miguel Viana, Head of IR Sónia Pimpão João Machado Maria João Matias Sérgio Tavares Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Visit EDP Website Next Events Site: www.edp.com Mar 6th-7th: Roadshow New York Link Results & Presentations: Mar 8th: Roadshow Boston www.edp.com/en/in