Naturgy Energy Group, S.a. · BME:NTGY
Naturgy Energy — Gas Natural Fenosa — H1 2011 Earnings Presentation
38 slides from Naturgy Energy's earnings presentation, Jul 27, 2011
Slide 1: First Half 2011 Results
First Half 2011 Results July 27, 2011
Slide 2: Disclaimer
Disclaimer This document may contain market assumptions, different sourced information and forward-looking statements with respect to the financial condition, results of operations, business, strategy and the plans of Gas Natural SDG, S.A. and its subsidiaries (GAS NATURAL FENOSA). Such assumptions,
Slide 3: Agenda
Agenda 1. Magnitudes 2. Main Issues 3. Summary of 1H11 Results 4. Analysis of Operations 5. Conclusions 3
Slide 4: Magnitudes
Magnitudes 4
Slide 5: Magnitudes
Magnitudes Recurring Net Income 1H11: €605 million1 (+11.0%) Net Income 1H11 of €822 million EBITDA 1H11: €2,386 million (+0.4%) Investments 1H11: €518 million2 (-11.9%) Net Debt as of 30/06/2011: €16.9 billion (-14.2%) Notes: 1 Disregarding impact from capital gains 2 Tangible and intangible invest
Slide 6: Main Issues
Main Issues 6
Slide 7: Main Issues
Main Issues End of Sonatrach litigation Completion of asset disposal plan A stronger capital structure Energy markets Enhancing presence in renewables 7
Slide 8: End of Sonatrach litigation (I)
End of Sonatrach litigation (I) Dispute on gas prices finally settled Agreement on gas prices for 2007-2009 and January 2010 onwards Payment of US$1,897 million for gas deliveries between 1 January 2007 and 31 May 2011 The parties have dropped all legal procedures derived from the litigation Agreeme
Slide 9: End of Sonatrach litigation (II)
End of Sonatrach litigation (II) Additional partnership agreements with Sonatrach ● Sonatrach to become a shareholder in GNF ● Acquisition of newly issued shares representing 3.85% of GNF’s share capital ● Cash contribution of €514.7 million ● Capital increase and investment in GNF approved by both
Slide 10: Completion of asset disposal plan (I)
Completion of asset disposal plan (I) Asset disposals completed to date Financial stakes • 5% in Cepsa, 18% in Indra, 5% in Enagas, (no EBITDA contribution) 4.4% in Isagen, 1% in REE • 2.2 GW CCGT in Mexico • 64% stake in EPSA (Colombia) Other assets • Transportation assets sold to REE • Electricity
Slide 11: Completion of asset disposal plan (II)
Completion of asset disposal plan (II) Agreed and pending authorisation • 245,000 gas customer contracts in Gas customer contracts Madrid • Price: €38 million • Sale of 800 MW CCGT at Arrúbal CCGTs • Price: €313 million • Transaction involves gas supply and power offtake contract Nearing completion
Slide 12: A stronger capital structure (I)
A stronger capital structure (I) A substantial reduction in debt Net debt1 (€ billion) -€2.5 bn 19.4 18.4 ● Lower debt after asset 16.9 disposals, partial securitisation of tariff deficit and cash flow generation Net Debt/EBITDA 3.8x 31/12/10 31/03/11 30/06/11 Achieving debt reduction target in acco
Slide 13: A stronger capital structure (II)
A stronger capital structure (II) Securitisation of tariff deficit1 (€ million) 16,194 11,775 7,419 3,000 Pending securitisation as Securitised and collected Ex-ante deficit for 2011 Pending securitisation as of 31/12/10 as of 20/05/11 of 20/05/11 ● €836 million collected by GNF to date, mainly thro
Slide 14: A stronger capital structure (III)
A stronger capital structure (III) Enhancing our presence in the capital markets Total debt outstanding in capital markets (€ billion) 9.7 ● €600 million in L/T securities issued in 1Q11 8.4 ● €500 million, 8-year EMTN issue in May enhances fixed income investor base ● Refinancing of MXN 4,000 milli
Slide 15: A stronger capital structure (IV)
A stronger capital structure (IV) Strengthening shareholders’ equity Combined positive impact (€ million) ~915 ● Scrip dividend completed with an unprecedented 96.4% success ratio ~400 ● Lower cash outflow implied of ~€400 million 515 ● Sonatrach’s purchase of 3.85% of share capital to contribute wi
Slide 16: A stronger capital structure (V)
A stronger capital structure (V) Considerations on ratings FFO / Net Debt1 EBITDA / Cost of Net Debt1 +3.5pp +0.5x 5.5x 20.1%2 5.0x 16.6% 1H10 1H11 1H10 1H11 ● Solid business risk profile, with ~70% EBITDA regulated/quasi- regulated and an integrated management of liberalized businesses ● Limited ex
Slide 17: Enhancing presence in renewables
Enhancing presence in renewables Growing presence in the business Total installed capacity in renewables ● Split of EUFER assets in May (MW) ● Development of wind farms in +10.3% 1,0461 949 Spain ● Acquisition of stakes in five wind farms from ACS to increase attributable capacity by 95.5MW ● Possib
Slide 18: Energy markets (I)
Energy markets (I) Commodity prices Brent ($/bbl) NBP (US$/MMbtu) 9.2 111.3 +61.4% +43.2% 5.7 77.7 Jan Jun Jan Jun Spanish pool (€/MWh) US$/€ 46.7 1.40 +54.6% +5.3% 30.2 1.33 Jan Jun Jan Jun Avge. for the period 2010 2011 Overall rise in energy prices vs. 1H10 18
Slide 19: Energy markets (II)
Energy markets (II) Markets with different dynamics Spanish gas demand LatAm gas demand1 (GWh) (GWh) -3.3% +1.1% 200,809 194,197 92,287 93,332 1H10 1H11 1H10 1H11 Source: Enagas Spanish electricity demand LatAm electricity demand1 (GWh) (GWh) -0.6% +1.3% 127,626 126,856 8,971 9,087 1H10 1H11 1H10 1H
Slide 20: Summary of 1H11 Results
Summary of 1H11 Results 20
Slide 21: Consolidated income statement
Consolidated income statement (€ million) 1H11 1H10 Change % Net sales 10,205 9,429 8.2 Purchases (6,684) (5,962) 12.1 Gross Margin 3,521 3,467 1.6 Personnel, Net (438) (404) 8.4 Other expenses, Net (697) (686) 1.6 EBITDA 2,386 2,377 0.4 Depreciation (869) (815) 6.6 Provisions (86) (86) 0.0 Other re
Slide 22: Consolidated investments
Consolidated investments Tangible and intangible (€ million) 1H11 1H10 Distribution Europe: 230 188 Electricity 107 90 Gas 123 98 By Activity Electricity: 94 181 Distribution Spain 82 139 Other Europe 40 LatAm Special Regime 12 9.4% 44.4% Other - 2 23.4% Gas: 24 19 Infrastructures 18 13 Supply 6 6 L
Slide 23: Debt breakdown
Debt1 breakdown Fixed/Floating Currency 8% 10% 33% Fixed Euro Floating US$ 67% 82% Other Source Capital markets 36% 54%2 Bank loans Institutional banks 10% Fixed/floating, source and currency mixes provide a well-balanced financial risk profile Notes: 1 Net debt 23 2 Adjusting net debt with pending
Slide 24: Debt maturity schedule
Debt maturity schedule Net debt (€16.9 billion) (€ million) 11,472 454 2,364 1,431 1,228 2011 2012 2013 2014 2015+ Enough liquidity available to cover needs for next 24 months Average life of debt: 5.2 years 68% of net debt maturing from 2015 onwards 24
Slide 25: Analysis of Operations
Analysis of Operations 25
Slide 26: EBITDA breakdown
EBITDA breakdown Change (€ million) 1H11 1H10 €m % Distribution Europe: 865 791 74 9.4 Electricity 364 302 62 20.5 Gas 501 489 12 2.5 Electricity: 467 567 -100 -17.6 Spain 390 489 -99 -20.2 Special Regime 70 69 1 1.4 Other 7 9 -2 -22.2 Gas: 424 388 36 9.3 Infrastructures 117 132 -15 -11.4 Supply 307
Slide 27: Distribution Europe: Electricity
Distribution Europe Electricity Operating figures +1.2% 4,548 4,493 1.7% 18,567 18,250 Investments made in service 1,158 +5.6% 1,223 quality and maintenance bring TIEPI in Spain to a low 20 minutes (-37.5% vs 1H10) 17,092 17,344 +1.5% Achieving growth in connection points in Spain despite its be
Slide 28: Distribution Europe: Gas
Distribution Europe Gas Operating figures Lower residential gas sales in Spain as a +1.5% result of a milder 1H11 vs 1H10 but 5,651 5,736 recovery in industrial segment 112,368 -2.4% 109,644 2,130 Network expansion continues in Spain +8.2% 2,304 with 75,000 new connection points (disregarding re
Slide 29: Electricity: Spain
Electricity Spain Total GNF’s production (GWh) 18,335 +5.0% 19,250 1,330 1,249 (-6.1%) 2,363 (-23.9%) 3,107 2,020 (+1.1%) 1,999 11,840 12,315 (+4.0%) 1,303 (+2,078.5%) 59 1H10 1H11 CCGTs Other thermal Nuclear Hydro Special Regime Higher thermal gap in 1H11 leads to huge increase in thermal-based p
Slide 30: Electricity: Special regime
Electricity Special regime Total production1 (GWh) Lower wind intensity and rainfall in -6.1% 1H11 vs 1H10 lead to a drop in 1,330 production 1,249 218 -3.7% 210 200 Continuing development of wind- 170 powered capacity: -15.0% 979 MW already awarded, in development phase 912 869 -4.7% Tender
Slide 31: Gas: Infrastructures
Gas Infrastructures Gas volumes from Maghreb pipeline UF Gas1 (GWh) (GWh) 46,392 +2.3% 47,445 60,508 +4.1% 62,972 -17.8% 23,146 28,170 +33.3% 24,299 18,222 1H10 1H11 1H10 1H11 Liquefaction Regasification EBITDA falls 11.4% to €117 million Note: 1 100% attributable 31
Slide 32: Gas: Supply
Gas Supply Gas supply (GWh) UF Gas1 (GWh) +1.3% 153,410 -2.5% 151,492 41,072 40,065 +14.8% 28,171 32,327 -6.8% 13,390 12,473 -5.2% 30,255 28,677 -29.8% 16,904 24,089 -0.3% 27,682 27,592 +9.5% 68,978 75,503 1H10 1H11 1H10 1H11 Third Party Supply and Industrial Spain International Residential CCGTs In
Slide 33: Latin America: Electricity generation
Latin America Electricity generation Total production (GWh) -10.8% 10,394 Disregarding the CCGT disposals in 9,275 2010, production in Mexico would 1,495 +2.4% rise 2,134 GWh (+24.0%) and 1,531 division EBITDA +55% on a like for like basis after commissioning of Norte Durango CCGT -13.0% 8,899 7,7
Slide 34: Latin America: Gas distribution
Latin America Gas distribution Operating figures +4.7% 5,762 EBITDA contribution and 5,502 growth by country (Total €302 million, +5.6%) 92,287 +1.1% 93,332 Mexico Argentina €52 million €10 million (+2.0%) (-37.5%) -1,7% 55,256 54,300 +5.4% Colombia Brazil 37,031 39,031 €81 million €159 million (+9.
Slide 35: Latin America: Electricity distribution
Latin America Electricity distribution Operating figures EBITDA contribution and 4,773 -26.5% 3,509 growth by country (Total €137 million, -28.3%) 8,971 +1.3% 9,087 Guatemala Nicaragua €26 million €11 million +0.6% (-7.1%) (-15.4%) 3,944 3,968 +1.8% 5,027 5,119 Panama €40 million Colombia (+14.3%) €
Slide 36: Conclusions
Conclusions 36
Slide 37: Conclusions
Conclusions EBITDA 1H11: €2,386 million (+0.4%) Recurring Net Income 1H11: €605 million1 (+11.0%) Almost complete execution of committed asset sales program Strengthening capital structure, with a well-balanced financial risk profile and consistent with business model Working towards fulfillment of
Slide 38: Thank you
Thank you INVESTOR RELATIONS telf. 34 934 025 897 fax 34 934 025 896 e-mail: relinversor@gasnaturalfenosa.com website: www.gasnaturalfenosa.com 38