EDP Renewables SA · EURONEXT:EDPR
EDP Renewables SA — 9M23 Earnings Presentation
27 slides from EDP Renewables SA's earnings presentation, Oct 31, 2023
Slide 1: 9M23 Results Presentation
9M23 Results Picture Presentation October 31st, 2023 15:00 CET | 14:00 UK / Lisbon Castillo de Garcimuñoz www.edpr.com Spain
Slide 2: Agenda
Agenda 1 Update on Strategy Execution 2 9M23 Results 3 Closing Remarks 4 Annex 2
Slide 3: Update on Strategy Execution
Update on Strategy Execution
Slide 4: Main highlights in the 2023-26 strategy plan execution throughout 9M23
Main highlights in the 2023-26 strategy plan execution throughout 9M23 9M23 Main Highlights Financial Performance Recurring figures • Strong EU & US governmental support to the renewables sector • 9.3 GW secured with >200bps IRR-WACC. Since March23, 9M23 YoY approved with average of 220 bps IRR-WACC
Slide 5: Governments continue supporting through new initiatives adjusting the market to current environment
Governments continue supporting through new initiatives adjusting the market to current environment Wind Power Action Plan US Recent Developments 15 immediate concrete actions to strongly support the industry Improved visibility on regulatory and fiscal supportive frameworks Measures to improve and
Slide 6: Keeping our clear investment framework, maintaining selective and disciplined approach
We are keeping our clear investment framework, maintaining our selective and disciplined approach 9.3 GW secured representing ~55% of the total BP target of which ~3 GW from 2023 YTD meeting the targeted profitability 2023 YTD approved & secured investments by technology 2023 YTD approved & secured
Slide 7: Higher renewables PPA/forward prices supported by gas prices' recovery and inflation
Higher renewables PPA/forward prices supported by gas prices’ recovery, higher inflation environment and projects’ development bottlenecks Demand/supply imbalance and higher inflation Over the last 3 months, forward electricity prices for support increase of PPA prices 2024-2026 deliveries have rebo
Slide 8: Market momentum leading to competitive procurement for projects delivered in 2025
Market momentum leading to competitive procurement for projects to be delivered in 2025, while continuing to prioritize the highest ESG standards Wind turbines Solar Modules Compliant with BoP / BoS EU(1) Average price Traceability Requirements (€m/ MW) (€m/ MW) ($/ W) 1.6 0.6 0.8 1.4 0.6 1.2 0.4 1.
Slide 9: Strong Asset Rotation execution with two sizeable transactions in 3Q23
Strong Asset Rotation execution with two sizeable transactions in 3Q23 at attractive valuations Diversified high-quality portfolio by market and by contracted/merchant profile support resilient Asset Rotation Strategy AR Gains/Invested Capital (%) Avg. EV/MW(1) Assets’ valuations positively impacted
Slide 10: Growing capacity additions for 2023 and 2024 on track to deliver expected returns
Growing capacity additions for 2023 and 2024 on track to deliver expected returns Additions of ~6.5 GW between 2023-24 evolving as planned with expected IRR – WACC profitability at 230 bps Capacity additions (GW) +0.9 GW US ~4 -0.5 GW CO Solar panels suppliers’ challenges with UFLPA legislation on i
Slide 11: OW presents a controlled Devex profile aimed at delivering its secured pipeline
OW presents a controlled Devex profile aimed at delivering its secured pipeline, while sees selective growth opportunities globally Investments in 2023-26 focused on projects under Under development projects under strict construction in Europe with strong economics investment criteria Offshore proje
Slide 12: Inflationary environment driving more focus on efficiency initiatives
Inflationary environment driving even more focus on efficiency initiatives and preservation of value to increase profitability and keep solid ratios EDPR is dedicated to fostering initiatives throughout the organization with an efficiency mindset that ensures sustainable growth LEANER ORGANIZATION C
Slide 13: Current market environment favourable to renewables investments
Current market environment favourable to renewables investments, EDPR continues committed with its selective risk/return investment criteria Key market concerns Strong public/private support on energy transition execution in the next decade Capacity Growth Bottlenecks Short term challenges support s
Slide 14: 9M23 Results
9M23 Results
Slide 15: 2023 performance continues penalized by short-term headwinds
2023 performance continues penalized by short-term headwinds in line with what was stated in the previous quarter The P&L impact is temporary, not affecting medium-term earnings prospects EBITDA impact 9M23 2023 Weather cycles continue affecting quarterly results but no Wind generation below average
Slide 16: 3Q23 renewables generation penalized by below average wind volumes in US
3Q23 renewables generation penalized by below average wind volumes in US due to cyclical El Niño effect already embedded in LT projections 3Q23 generation continue being penalized by below avg. wind resources namely in US EDPR Renewables generation (TWh) +3% Generation +3% YoY on the back of capacit
Slide 17: Recurring EBITDA -3% YoY positively impacted by Asset Rotation Gains
Recurring EBITDA -3% YoY positively impacted by Asset Rotation Gains mitigating weak wind resources and lower electricity prices in Europe Recurring EBITDA per region (€m) 9M22 9M23 YoY YoY Installed Capacity(1) GW 14.3 15.1 +6% -3% 1,482 Electricity Generation TWh 24.4 25.2 +3% 1,437 AR Gains & Eur
Slide 18: Net Expansion Investments of €2.7bn and €1bn equity raise result in +€1.1bn Net Debt
Net Expansion Investments of €2.7bn and €1bn equity raise result in +€1.1bn Net Debt; Organic CF impacted by non-cash items Net Debt Evolution from Dec22 to Sep23 (€bn) LTM Net Debt/EBITDA €2.9bn Expansion Capex, €0.2bn of Financial Investments and €0.4bn AR Proceeds 1.0 +€1.1bn YTD 0.1 2.7 ~€5.6bn
Slide 19: Rebalancing of debt mix by currency towards assets' mix
Rebalancing of debt mix by currency towards assets’ mix: diversification of equity exposure by market, ~€100m lower int. costs estimated in 24-26 Reducing our financial exposure to USD EDPR’s financial debt per currency (%) 82% 18% Fixed Variable 11% Rebalance of debt mix by currency with asset mix
Slide 20: Financial Results decreasing YoY due to lower FX & Derivatives
Financial Results decreasing YoY due to lower FX & Derivatives despite higher avg. gross debt Financial Results (€m) Debt by maturity & counterparty +30% (%) YoY 4.6 296 299 257 66 229 70 (42) 0.7 0.6 0.6 0.4 2023 2024 2025 2026 >2026 9M22 Non-interest 9M22 adj Interest 9M23 adj Non-interest 9M23 ED
Slide 21: Net Profit of €467m (+12% YoY)
Net Profit of €467m (+12% YoY) impacted by top line, compensated with strong execution of AR transactions and improved financials and taxes 9M23 EBITDA to Net Profit (€m) YoY Driven by lower prices YoY, OW extraordinary EBITDA 1,427 (€56m) contribution in 2022, clawbacks and US LDs in other costs, p
Slide 22: Closing Remarks
Closing Remarks
Slide 23: Leading the energy transition to create superior value
Leading the energy transition to create superior value Increase of PPA and forward market electricity prices along with the downward trend in some relevant capex components, like solar panels, supports value enhancing growth at attractive returns while maintains risks under control with our strict i
Slide 24: Annex
Annex
Slide 25: In the last 12 months, EDPR additions amounted to +1.7 GW
In the last 12 months, EDPR additions amounted to +1.7 GW with installed capacity reaching 15.1 GW, including Asset Rotation impact Installed Capacity YoY Net Capacity Factor 9M23 Electricity Generation YoY (EBITDA + Equity GW) (%) (TWh) NCF YoY 9M22 14.3 9M22 24.4 25% -1pp MW Added 1.7 ∆ MW 2.5 29%
Slide 26: IR Contacts
IR Contacts E-mail: ir@edpr.com Phone: +34 900 830 004 Parque Empresarial ADEQUA Avda. de Burgos, 89 EDIF 1 MOD A-B 28050, Madrid - Spain EDPR Online Site: www.edpr.com Link Results & Presentations 26
Slide 27: Slide 27