Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — 9M14 Earnings Presentation
35 slides from Edp's earnings presentation, Oct 31, 2014
Slide 1: Results Presentation 9M14
Results Presentation 9M14 Lisbon, October 31st, 2014 0
Slide 2: Disclaimer
Disclaimer This document has been prepared by EDP - Energias de Portugal, S.A. (the "Company") solely for use at the presentation to be made on the 31st of October 2014 and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where th
Slide 3: 9M14: Highlights of the period
9M14: Highlights of the period EBITDA: €2,715m, -3% YoY EBITDA in Iberia (ex-wind): +2% YoY excluding one-offs (€56m in 9M13 vs. €129m in 9M14) Strong hydro, good energy management and tight cost control compensate regulatory cuts EDP Renováveis: EBITDA -6% YoY New capacity additions not enough to c
Slide 4: 9M14: Highlights of the period
9M14: Highlights of the period Net debt +€0.4bn YTD to €17.5bn in Set-14 +€0.3bn forex impact mainly due to USD appreciation vs. EUR; no tariff deficit securitisations in 3Q14 Net Investments(1): €1,108m (-15% YoY); Capex focused on hydro in Portugal and wind projects in US EDPR’s assets rotation: €
Slide 5: 9M14 Operational Headlines: Increasing weight of Hydro & Wind
9M14 Operational Headlines: Increasing weight of Hydro & Wind in EDP’s generation mix Installed Capacity Generation Breakdown by Technology (GW) (TWh) % Chg. YoY % Chg. YoY +0.4% +3% 22.0 22.1 44.4 43.2 Other (1) 2% 1% 1,6 -26% 1,2 12% Other (1) Coal 12% +1% 10,4 Coal 10,2 CCGT 17% 17% CCGT -22% 0,7
Slide 6: EBITDA: -3% YoY (including -2% forex impact)
EBITDA: -3% YoY (including -2% forex impact) EBITDA Breakdown by division (€ million) % Chg. YoY -3% €2,800m €2,715m Liberalized 9% +40% Activities Iberia 14% EDP Brasil 19% -29% 14% EDP Renováveis 24% -6% 24% Regulated 28% +4% 30% Networks Iberia (1) LT Contracted 19% -5% 19% Generation Iberia 9M13
Slide 7: Operating costs: -2% YoY
Operating costs: -2% YoY Operating costs(2): 9M14 vs. 9M13 9M14 YoY Inflation (3) (€ million) (%) Brazil EDPR Iberia -2% 1,144 1,120 6,1% 216 199 -8% 238 235 -1% 690 686 -1% -0,3% 0,0% 9M13 9M14 Portugal Spain Brazil (IGP-M) Iberia: -1% YoY on successful execution of OPEX III program and headcount r
Slide 8: Investments: Focus on new wind & hydro capacity and Regulated networks
Investments: Focus on new wind & hydro capacity and Regulated networks Net Investments breakdown by division (1) (€ million) -15% €1,309m Other 89 Generation & Other Brazil 230 €1,108m 140 17 EDP Renováveis 279 283 Expansion Hydro Portugal 380 379 Distribution Brazil 74 78 Regulated Includes €96m fr
Slide 9: Regulatory receivables in Portugal
Regulatory receivables in Portugal Global Regulatory receivables in the Portuguese electricity system (€bn) Owed to Financial Investors (Securitized) Owed to EDP +0.4 +0.8 +0.14 +0.05 5.2 5.3 +0.1 +0.23 +0.1 4.8 +0.3 +0.3 4.0 2,4 2,9 1,9 2,2 2,4 2,3 Dec-12 1Q13 2Q13 3Q13 4Q13 Dec-13 1Q14 2Q14 3Q14 S
Slide 10: Evolution of EDP's total regulatory receivables
Evolution of EDP’s total regulatory receivables EDP’s Net Regulatory Receivables (€ million) -€94m 2,989 2,747 2,653 Portugal (2) 2.499 2.422 2.296 Spain 464 264 181 Brazil (1) 61 176 26 Sep-13 Dec-13 Sep-14 Portugal: -€126m (tariff deficit to EDP: +€688m in 1H14, +€219m in 3Q14; securitisations: -€
Slide 11: EDP's Net Debt Breakdown: Sep-14
EDP’s Net Debt Breakdown: Sep-14 EDP consolidated net debt position: Sep-14 EDP consolidated debt by currency: Sep-14 (€ million) (%) PLN 3% raised at EDP Brasil USD 1% 17,483 Bank loans and capital markets; 19% 593 Ring-fenced policy essentially ‘non- BRL EDP Brasil recourse’ to EDP S.A. 651 6% EDP
Slide 12: 9M13 Change in Net Debt
9M13 Change in Net Debt Change in Net Debt: Sep-14 vs. Dec-13 (€ billion) Regulatory +€0.4bn Receivables 0,3 17.5 17.1 1.2 0,8 0,7 0,1 2.7 2,7 14,3 14,8 Net Debt Free Cash Regulatory Dividends Paid Expansion Forex Net Debt Dec-13 Flow (1) Receivables and Capex & Sep-14 Securitizations Net Invest. (2
Slide 13: EDP's major debt issues since Jul-12
EDP’s major debt issues since Jul-12 EDP 5 year bond yield / EDP major debt issues since Jul-12 (%) Jul-12: €1bn loan (CDB) 8,0 5Y @ Eur6M + 480bps Oct-12: €800m loan (BoC) 3Y @Lib3M + 350bps 6,0 Feb-13: €1.6bn loan (16 banks) Nov-13: €600m (Bond); 5Y @ Eur3M + 400bps 7Y @4.2% Apr-14: €650m (Bond);
Slide 14: Financial Debt: Average cost and maturity profile
Financial Debt: Average cost and maturity profile Avg. Cost of Debt: 9M14 vs. 9M13 EDP consolidated debt maturity profile as of Sep-14 (%) (€ billion) Commercial paper Other subsidiaries(1) Adjusted Avg. Debt EDP SA + BV Maturity: 4.1 years +43bp Brazil: €418M 4,7% Project Finance: €129M 4,3% 4,0 3,
Slide 15: Financial Liquidity position
Financial Liquidity position (€ million) Sources of liquidity (Sep-14) Maximum Number of Instrument Utilised Available Maturity Amount counterparties Revolving Credit Facility 3,150 21 0 3,150 Jun-2019 Domestic Credit Lines 199 9 0 199 Renewable Underwritten CP 100 1 0 100 Oct-2016 Total Credit Line
Slide 16: Main sources and uses of funds
Main sources and uses of funds Sources of funds Use of funds Refinancing needs in 2014: Cash & Equivalents (Sep-14) : €2.1bn Bonds maturing in Dec-14 €0.4bn Total 2014 €0.4bn Available Credit Lines (Sep-14): €3.4bn Refinancing needs in 2015: Bonds maturing in 1Q15 €1.1bn Bonds maturing in 2Q15 €0.75
Slide 17: Net Profit breakdown
Net Profit breakdown (€ million) 9M13 9M14 ∆% ∆ Abs. EBITDA 2,800 2,715 -3% -85 Extension of useful life of thermal plants in Iberia and cogen impairments in 4Q13; Net Depreciations and distribution asset’s write down in Brazil in 1,094 1,036 -5% -58 Provisions 9M13 (-€20M) EBIT 1,706 1,680 -2% -26
Slide 18: Business Areas
Business Areas
Slide 19: Electricity market environment in Iberia: 9M14 vs. 9M13
Electricity market environment in Iberia: 9M14 vs. 9M13 Hydro & Mini-Hydro Power Production – Iberia (1) Avg. Pool Price in Spain (TWh) (€/MWh) 9M 9M 32 12% 36 42 -5% 40 18 50 52 12 13 11 40 34 40 7 6 26 1Q13 2Q13 3Q13 1Q14 2Q14 3Q14 1Q13 2Q13 3Q13 1Q14 2Q14 3Q14 1.23 Hydro Coefficient Portug. 1.33
Slide 20: Iberia: Electricity Demand
Iberia: Electricity Demand Electricity Demand in Iberian Market 9M14 (1) Electricity demand Portugal (1) (∆% YoY) (∆% YoY) (2) % Weight in Iberia in 9M14 Real Adjusted 3% 2,2% 2,0% 3Q14 2% 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 100% 17% 83% 1% 0,7% 0,0% 0,0% 0% 3Q13 4Q13 1Q14 2Q14 29-Oct-14 Iberian Portugal
Slide 21: Liberalised Energy Activities Iberia (14% EBITDA)
Liberalised Energy Activities Iberia (14% EBITDA) EDP Liberalised Power Plants Iberia – Production EDP Coal vs. CCGT – Load factors in 9M14 and 9M13 (TWh) (%) % Chg. YoY 9M14 9M14 +17% 11.1 9.6 9% 46 48 +4% Nuclear 9% 45% Hydro +46% 36% 4 Coal 46% 4% 41% 3 CCGT 9% -22% 6% 9M13 9M14 Coal CCGT Product
Slide 22: Liberalised Energy Activities Iberia (14% EBITDA)
Liberalised Energy Activities Iberia (14% EBITDA) EBITDA Liberalised Activities in Iberian Market Lower sourcing costs along with (€ million) long position in clients 3 hydro plants transferred from PPA/CMEC: +2.0TWh in 9M14 +40% Avg. generation cost -21% YoY on higher weight of hydro 368 Long posit
Slide 23: Long Term Contracted Generation Iberia (19% of EBITDA)
Long Term Contracted Generation Iberia (19% of EBITDA) EBITDA Adjusted EBITDA (1) (€ million) (€ million) PPA/CMEC Special regime PPA/CMEC Special regime -5% -9% 538 512 538 489 -25% -25% -3% -8% 9M13 9M14 9M13 9M14 Adjusted EBITDA -9% on the transfer of 3 hydro plants from PPA/CMEC to liberalised m
Slide 24: Regulated Energy Networks Iberia (30% of EBITDA)
Regulated Energy Networks Iberia (30% of EBITDA) EBITDA Adjusted EBITDA (1) (€ million) (€ million) Gas Iberia Gas Iberia Electricity Spain Electricity Spain Electricity Portugal Electricity Portugal +6% +1% 772 816 716 721 -21% 0% -4% -4% +21% +2% 9M13 9M14 9M13 9M14 Electricity Portugal: Tight cos
Slide 25: EDP Renováveis (24% of EBITDA)
EDP Renováveis (24% of EBITDA): Growth from capacity additions mitigated by regulatory changes in Spain Installed Capacity Wind Power Production (2) EBITDA (MW) (GWh) (€ million) Iberia North America Other (1) +5% -6% +4% 14,369 13,728 7,774 686 7,493 648 -1% 35% 37% 38% +0% 36% 46% -19% 39% +27% 14
Slide 26: Brazilian Electricity System: 3Q14 environment
Brazilian Electricity System: 3Q14 environment Hydro Generation Scaling Factor (GSF) (%) 3Q14 developments 99% Strong thermal dispatch in order to preserve hydro 96% 94% 85% reservoirs / hydro GSF of 85% in 3Q14: i) DisCo’s overcost of R$1.3bn in Jul/Ago (vs. R$5bn in 2Q14) following the A-0 generat
Slide 27: EDP Brasil (14% of EBITDA)
EDP Brasil (14% of EBITDA): Reported EBITDA in local currency -21% YoY, adjusted EBITDA -13% YoY EDP Brasil reported EBITDA EDP Brasil Adjusted(1) EBITDA (BRL million) (BRL million) Generation & Other Distribution Generation & Other Distribution -21% -13% 1,474 1,258 1,160 1,094 801 -69% 251 585 +1%
Slide 28: Regulatory Update Portugal
Regulatory Update Portugal
Slide 29: ERSE's proposal on 2015 regulated revenues and 2015-2017 RoR
Electricity distribution and Last resort Supplier: ERSE’s proposal on 2015 regulated revenues and 2015-2017 RoR Return on RAB: Calculation Methodology Regulated Revenues 2015E (1) (%; bp) (€ million) RoR 2014E 2015E ∆ Abs. ∆% 9.5% 6.75% 6.0% Distribution Activity 1,205 1,194 -11 -1% Last Resort Supp
Slide 30: Portuguese electricity system receivables to stay flat in 2015E
Portuguese electricity system receivables to stay flat in 2015E vs. 2014E, and converging to zero by ~2020 Electricity Regulatory Receivables - Portugal (€bn) 5.3 5.3 4.8 4.9 4.2 Other 2,4 EDP 2,4 0.5 2013 2014E 2015E 2016E 2017E 2020E ERSE 2015 Tariffs Proposal: + 3.3% final normal low voltage clie
Slide 31: Outlook
Outlook
Slide 32: EDP Brasil: 4Q14/2015 prospects
EDP Brasil: 4Q14/2015 prospects Generation Distribution Hydro reservoirs – Southeast/Center-West Regions (3) CCEE/ACR cash advance of regulatory receivables to (%) Discos: R$3.1bn still available to cover needs until the end of 2014 48% 49% 45% 37% 21% 21% 25% 19% EDP Brasil Disco’s annual tariff up
Slide 33: Outlook for 2014
Outlook for 2014 EBITDA Breakdown (%) 4Q14 performance dependent on hydro resources and market Liberalised volatility 14% 13% Activities Iberia Brazil 14% 14% Distribution: positive impact from tariff updates in Aug/Oct-14, cash proceeds from CCEE Generation: assumes negative impact from forecast of
Slide 34: A resilient business model in a challenging environment
A resilient business model in a challenging environment Sound performance EBITDA: -3% enhanced by Net Profit/EPS: -1% diversification OPEX III cost savings corporate program: ~€110m in 9M14 (anticipation of 2015 target) Profitable Growth Expansion capex: Execution of new hydro in Portugal and Brazil
Slide 35: IR Contacts
IR Contacts Miguel Viana, Head of IR Sónia Pimpão Elisabete Ferreira Ricardo Farinha João Machado Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Visit EDP Website Next Events Oct 30th: Release of 9M14 Results Site: www.edp.pt Nov 5th-7th: Roadshow Boston/New York (Morgan Stanley) Nov 11th-12th
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