Edp S.a. · EURONEXT:EDP

Edp — Investor Day (May 2014)

115 slides from Edp's investor day presentation, May 14, 2014

1. Slide 1: Investor Day 2014

   INVESTOR DAY 2014 14™ MAY NEVERENDING ENERGY

2. Slide 2: Disclaimer

   Disclaimer This document has been prepared by EDP Group (the "Company") solely for use at the presentation to be made on the 14th of May 2014 and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where this presentation is made, or

3. Slide 3: Agenda

   Agenda Introduction António Mexia, CEO Iberian Business Miguel Stilwell de Andrade, Board Member EDP Renováveis João Manso Neto, CEO EDP Renováveis EDP Brasil Miguel Setas, CEO EDP Brasil Financials Nuno Alves, CFO Conclusions António Mexia, CEO 3

4. Slide 4: Introduction – António Mexia, CEO

   António Mexia, CEO Introduction 4

5. Slide 5: European utilities impacted by negative and unexpected events

   Over the last years, the European utilities have been significantly impacted by negative and unexpected events Recent context ▪ Destruction of power demand in Europe ▪ Generalized overcapacity ▪ ETS collapse Economic crisis ▪ Discussions on energy affordability ▪ Regulatory cuts, higher sector taxes

6. Slide 6: Iberian energy market conditions have been challenging

   Iberian energy market conditions have been challenging Electricity demand: Iberian Peninsula Thermal power demand in Iberian market (TWh) (TWh) BP 12-15 (May-12) Real & Current Forecast -32% -10% devi ation vs . Ma y-12 114 111 -37% YoY Forecast 77 306 301 10 295 295 2011 2012 2013 2014E 2011 2012 2

7. Slide 7: Several waves of regulatory cuts in Iberia

   Several waves of regulatory cuts in Iberia over the last 24 months Regulatory and fiscal measures taken in the period May-12: Portugal Jan-13: Spain Jul-13: Spain Feb-14: Spain 1 st package  Change in CPI index of  Regulatory cuts in electricity  New remuneration  Cut in capacity payments regula

8. Slide 8: Financial sustainability of electricity systems in Spain and Portugal

   Reinforcement of financial sustainability of electricity systems in Spain and Portugal Spain: Tariff Deficit Portugal: Net change in system’s regulatory receivables (€bn) (€bn) 5.6 3.6 1.0 0.7 0.5 0.0 0.0 0.0 (1) 2012 2013E 2014E 2015E 2012 2013 2014E 2015E Hard-landing imposed solution in Spain may

9. Slide 9: Strategic architecture defined in 2012 proved adequate

   Strategic architecture defined in 2012 has proven adequate to the evolution of our business environment Business Plan 2012-2015 Strategic Priorities 1  Proactive management of Controlled legal/regulatory agenda Risk  Competitive refinancing and accelerated deleveraging  Successful 2 Superior part

10. Slide 10: Controlled risk: diversified portfolio of markets and regulation

    1 Controlled risk: diversified portfolio in terms of markets and regulatory environment Energy, macro, regulatory and financial dynamics by Geography (1) EBITDA Breakdown by Geography (Year) (%) Les s favourable More fa vourable envi ronment envi ronment Portugal 3% 4% 19% 17% Spain 7% 9% 26% 25% Br

11. Slide 11: Controlled risk: successful energy management policy

    1 Controlled risk: successful energy management policy Iberian market: Sales to clients vs. liberalised generation output Iberian Liberalised Activities EBITDA (%) (€m; €/kW) EDP EBITDA (€m) EBITDA/kW Iberian Peers 230% 238% 449 202% 177% 369 347 316 103% 108% 115% 96% 70 54 49 44 (1) 2010 2011 2012

12. Slide 12: Capex revision and partnership with CTG

    1 Controlled risk: downward revision of Capex and execution of partnership with CTG 2011-2015E Capex: Current forecast vs. Previous forecast CTG investments under partnership framework agreement with (€bn) EDP (€bn) Maintenance Expansion Dec-12: Wi nd Portugal (1st block) ~2.1 Dec-13: Hydro Bra zil

13. Slide 13: Comfortable liquidity position in tough credit markets

    1 Controlled risk: maintenance of comfortable liquidity position in tough credit markets environment EDP Liquidity position EDP Group: sources of new funding raised in 2011-Apr14 (€bn) (%) Liquidity Position Average TEIs EDP Brasil Refinancing needs Public Bond 1% covered until Issues 7.0 end-2015 S

14. Slide 14: Beneficial management of cost of funding

    1 Controlled risk: beneficial management of cost of funding EDP 5 year yield vs. EDP avg. cost of debt: 2008-2014E Weight of floating rate debt: Avg. cost of debt: (%) EDP vs. European peers (%) EDP vs. European peers (1) (%) EDP 5 year bond yield (secondary Market) 2013 avg. cost EDP avg. annual co

15. Slide 15: Continued deleverage at a slower pace

    1 Controlled risk: continued deleverage as committed, but at a slower pace given setbacks mainly in Iberian regulation 2015E Adj. Net Debt/EBITDA target reflects a changed environment Adjusted(1) Net Debt/EBITDA: (x) vis-à-vis May-12 expectations  Unfavorable regulatory environment  4.3 Negative i

16. Slide 16: Superior efficiency: leading cost management and lean operations

    2 Superior efficiency: maintaining a leading position in cost management and lean operations Efficiency programme: OPEX (1) OPEX/Gross Profit: 2013 (2) (€m) (%) OPEX I & II: 2006-10 OPEX III: 2011-13 38% 30% 31% 28% 28% 160 160 130 120 (3) 2005 2007 2010 Iberian Peers Opex I Opex II Opex III Opex II

17. Slide 17: New hydro in Portugal: ongoing projects

    3 Focused growth: new hydro in Portugal 5 ongoing projects to start operations in 2014-16 New Hydro Capacity Investment Plan (1) (€bn)  3 hydro repowerings (0.7GW) commissioned between Dec-11 and Dec-12: 2.5 0.5 2.3 Under tough market conditions and strong hydro resources, these plants had a signif

18. Slide 18: LT contracted generation in Brazil: hydro projects

    3 Focused growth: LT Contracted generation in Brazil 3 ongoing hydro projects to start operations in 2015-2018 Brazil: 2011-18E generation capacity (1) (GW) Pecém: 360MW coal plant fully commissioned in 2Q13 Hydro  Despite some initial setbacks, and after rigorous maintenance works, the Thermal (co

19. Slide 19: Wind capacity growth secured by US PPAs

    3 Focused growth: wind capacity up 13% in 2 years 2014-16 growth secured by PPAs already signed in US Capacity additions in 2012 and 2013(1) PPA contracts for US wind signed between Dec-12 and Apr-14 (MW) North America Other Iberia 15/20 year PPAs: Maine; Kansas; Texas +13% 20 year PPAs 1,380 8,469

20. Slide 20: EDP's distinctive profile supports above average performance

    EDP’s distinctive profile supports an above average performance European Integrated Utilities – 2013 Reported EPS vs. Bloomberg Consensus as of Dec-11 (1) (%) 2% EDF GAS NAT -10% EDP ENEL VERBUND ENDESA FORTUM IBE RWE EON -94% GDF SUEZ -40% -30% -20% -10% 0% Despite tough macro, regulatory and marke

21. Slide 21: Sound shareholder structure

    Sound shareholder structure EDP Shareholder Structure EDP Shareholder Structure (23-May-2012) (14-May-2014) Decrease in Shareholding Increase in Shareholding CHINA THREE CHINA THREE GORGES; GORGES; 21.3% 21.3% FREE FLOAT; CAPITAL FREE FLOAT; 42.9% 43.0% GROUP; 10.1% IBERDROLA; Ma s aveu 53% 6.8% Li

22. Slide 22: EDP TSR: +101% since May-12 Investor Day

    EDP TSR: +101% since May-12 Investor Day reflecting strong improvement of perception on EDP’s business risks EDP share price vs. 5 year bond yield Total shareholder return(1): EDP vs. DJ Utilities Index (€; %) (Rebased 100) EDP share price EDP DJ Euro Stoxx Utilities EDP 5y bond yield 150 (EDP Inves

23. Slide 23: May-14 vs. May-12: improving business prospects

    May-14 vs. May-12: improving business prospects Change in macro, regulatory and market environments May 2012 May 2014  Demand: strong decline  Demand: signs of recovery Energy  CO2 prices: strong decline  CO2: back-loading ahead Markets  Capacity in Iberia: still increasing  Capacity with slig

24. Slide 24: Iberian Business – Miguel Stilwell de Andrade

    Miguel Stilwell de Andrade, Board Member Iberian Business 24

25. Slide 25: EDP Iberian operations: regulated networks and generation and supply

    EDP Iberian operations: ~50% Regulated Networks, ~50% generation and supply portfolio EDP Iberian operations Iberian operations(1) – EBITDA breakdown 2013 (GW; th; km) (%) Generation (GW) Regulated Long Term Networks Contracted Installed capacity: 8.7 GW Generation Clients (Thousands) Electricity: 5

26. Slide 26: Iberian operations emerging from strong regulatory and market pressure

    Iberian operations: emerging from a period of strong regulatory and market pressure Demand destruction: 2013 Iberian demand back to 2005 level High reserve margin in Iberia: over 35% in Spain and 25% in Portugal, in 2013 Low pool prices: capped by low residual thermal demand Regulatory/fiscal change

27. Slide 27: Key drivers for Iberian operations 2014E-17E

    Key Drivers for Iberian operations in 2014E-17E 1 Improving regulatory and market environment 2 Reinforcing distinctive generation portfolio 3 Stable regulated networks 4 Strong position in supply 5 Solid track record in risk management 6 Increasing efficiency 27

28. Slide 28: Regulatory landscape in Spain

    1 Regulatory landscape in Spain: Lower regulatory risk after changes in 2012-14 Spain – Overall impact of 2012-14 regulatory/fiscal measures Potential regulatory changes (%) Non-mainland Electricity systems Consumers  Changes in ancillary services markets signalled since 11% 16% 2013 (included in o

29. Slide 29: Regulatory landscape in Portugal

    1 Regulatory landscape in Portugal: Lower regulatory risk after cuts implemented in 2012-14 2nd package announced in Oct-13: Clawback of possible gains by Portuguese generators due to distinct regulatory/fiscal rules vs. Spain  Due to be reassessed every 6 months as to adjust for any further distor

30. Slide 30: Portugal electricity system sustainability

    1 Portugal Electricity System: Sustainability is ensured with the measures in place Portugal Electricity System – Cost of the year vs. Revenues(1) Portugal Electricity system – Regulatory Receivables (€ bn) (€ bn) Revenues CAGR 2014E-2020E EDP Others EDP + Others Deficits remunerated at Devoted to p

31. Slide 31: Energy markets in Iberia: re-balancing by supply

    1 Energy markets in Iberia: Re-balancing mainly prompted by supply Demand growing ~1% CAGR 2013-17E… … Supply will gradually fall • Implementation of CO2 backloading program; Proposed creation of a stability reserve • Economic recovery drives increase in mechanism as from 2021 demand Balance • Capac

32. Slide 32: Integration with international LNG markets supports power prices

    1 Strong integration with International LNG markets is supportive for power prices in Iberia Iberian Market - Net gas consumption Spain in Dec-13 – Daily CCGT load factors and Pool price (bcm) (%, €/MWh) CCGT Load Factor Pool price 38 36 33 25% 100 20% 80 LNG 25 20 14 15% 60 10% 40 Pipe 15 19 5% 20

33. Slide 33: Reinforcing a distinctive generation portfolio

    EDP is reinforcing a distinctive generation portfolio 2 EDP Conventional generation– Installed capacity EDP Conventional generation – Risk profile (MW) (MW) Avg. Residual assets life: 1% 27 years in 2017E 1% Nuclear 28% 31% CCGT Market 57% 18% exposed 22% +26% growth backed new additions in Coal 100

34. Slide 34: New hydro capacity in Portugal: +1.5GW in 2014-16

    2A New Hydro Capacity in Portugal: +1.5GW in 2014-16 Expected Total Net of EDP - Capex in New Hydro Capacity in Portugal(3) Completion Plant Rate (1) Start-up Type MW Output (2) Pumping (2) (€ bn) date (GWh) (GWh) New plant Baixo Sabor 91% Dec.2014 173 460 200 With Pumping Ribeiradio/Ermida 80% Dec.

35. Slide 35: New hydro: expected EBITDA of ~€125m

    2A New Hydro capacity in Portugal: Expected EBITDA of ~€125m in the 1st full-year of operation EBITDA – Contribution from new hydro capacity in Portugal (€ million) Pl a nts with Pumping Pl a nts without Pumping  Delivery of new hydro capacity ~€125m prompts for a 5-year extension of residual life

36. Slide 36: Hydro with pumping reduces risk and delivers returns

    2A Hydro with pumping reduces portfolio risk and delivers attractive incremental returns EDP - Hydro gross profit per MW installed (1) EDP Pumping activity(1) – Spreads versus avg. Pool price (€/MW installed) (€/MWh produced) (2) Premi um / (Discount) versus pool price Without Pumping With Pumping +

37. Slide 37: PPA/CMECs account for ~90% of LT contracted EBITDA

    2B PPA/CMECs account for ~90% of EBITDA from LT Contracted generation LT Contracted generation in Iberia – EBITDA breakdown (€ million) 720 Sines coal plant (1,180MW; PPA end in Dec-17) Coal 27% PPA/CMEC  Consistently beating Iberian load factors: 70% in 2008-13 (vs. 40% sector)  All environmental

38. Slide 38: PPA/CMECs new phase from 2017

    2B PPA/CMECs new phase: as from 2017, hydro under PPA/CMECs will be exposed to price and volumes short term volatility PPA/CMEC– Gross profit profile (€ million) Earnings component volume and price risk-free Earnings component exposed to volume and price volatility 1994 2007 2017 2027 PPAs with no C

39. Slide 39: Hydro PPA/CMEC gross profit 2013-17E

    2B Hydro PPA/CMEC: with a €50/MWh price in 2017, gross profit in 2017E would be in line with 2013 Hydro plants with PPA/CMEC – Gross profit dynamics in 2013-17E (€ million; Portfolio with 27 plants and 9.4TWh output(1)) No exposure to volume/price volatility Exposed to volume and price volatility PP

40. Slide 40: Regulated networks: electricity distribution in Portugal

    3 Regulated networks: 65% of EBITDA derives from Electricity distribution in Portugal Reg. Networks - EBITDA breakdown Reg. Networks - Capex breakdown Electricity Distribution Portugal – EIT(1) (€ million) (€ million) (minutes) El ectri city distribution Portugal Ga s distribution Portugal El ectri

41. Slide 41: Clients portfolio expansion with liberalisation in Portugal

    4 Clients portfolio expansion backed by strong pace of liberalisation in Portugal EDP – Clients portfolio in the Free market (Million)  In Portugal, strong portfolio expansion, backed by +1.6x 3.8 liberalisation process in electricity and gas 0.8 Gas Spain  Timeframe for the phasing-out of transit

42. Slide 42: 84% of clients moving to free market chose EDP

    4 In Portugal, 84% of clients that move to free market chose EDP as a supplier Electricity in Portugal: Volume supplied in 2006-17E (TWh) Focus on returns and value-added proposals  Market leader in all segments of electricity and B2C gas  Growth focused on residentials / SMEs 45 44 100%  Increas

43. Slide 43: Strong supply presence manages market exposure

    5 Risk management: Strong presence in supply allows to successfully manage additional market exposure EDP electricity volumes – Generation & supply integrated activity (GWh) Main drivers in 2014-17E Supply i n free market Supply i n regulated market Mercha nt generation PPA/CMEC generation Volumes s

44. Slide 44: Efficiency: OPEX/Gross profit improves from 29% to 26%

    6 Efficiency: OPEX/Gross profit improves from 29% to 26% on portfolio optimisation and headcount reduction EDP Iberian operations (1) – Operating costs (€ million) Generation & Supply activities in Iberia Regulated networks Generation & Supply  New capacity on stream adds O&M costs OPEX/Gr. Profit

45. Slide 45: Capex will fall with completion of new hydro program

    Iberian operations: Capex will fall with the completion of the new hydro program and higher efficiency on networks Iberian operations – EBITDA breakdown Iberian operations – Capex breakdown (€ million) (€ million) Liberalized 21% activities Expansion 0.5 55% 0.3 Long Term 32% Contracted 0.1 Generati

46. Slide 46: EDP Iberian business key drivers 2014E-17E

    EDP Iberian Business key drivers 2014E-17E Through adequate strategic positioning in current environment… Stable regulation High-quality assets Focus on Opex and Capex Lower regulatory receivables Strong clients portfolio efficiency Market improvement Risk management …EDP will achieve its targets… E

47. Slide 47: EDP Renováveis – João Manso Neto

    João Manso Neto, CEO EDP Renováveis

48. Slide 48: EDPR is a market leader with 8.6 GW installed

    EDPR is a market leader with 8.6 GW of installed capacity worldwide… #4 worldwide wind player EDP Group company focused on wind and solar investments 77.5% EDP SHAREHOLDING Leader in the most competitive WIND 4,811 MW renewable technology ONSHORE 3,685 MW Diversified operating portfolio 10 COUNTRIES

49. Slide 49: Developed from key core competencies

    … developed from key core competencies, managed and operated on standards of excellence… EDPR has a structural … and is continuously improving key operating metrics competitive advantage… Load Factor Availability OPEX/MW 1 (%) (%) (index, 2010=100) +1.8% +1pp -5% 29% 30% 96.8% 97.7% 100 95 2010 2013

50. Slide 50: Selective growth profile

    … flawlessly executing a selective growth profile… EDPR achieved strong growth levels… … resulting in a robust cash generation capacity Installed capacity Operating Cash-Flow (GW) (€m) +8% +7% CAGR CAGR 8.6 700 6.7 567 2010 2013 2010 2013 Countries # OCF/Capex (%) 8 10 41% 112% 50

51. Slide 51: Diversified low risk portfolio and solid balance sheet

    …and presenting a diversified low risk portfolio based on a solid balance sheet Well diversified portfolio … with the right funding exposed to different markets… for a capital intensive industry EBITDA Debt Metrics Overview (%, €m) • PTC extension • PPA s i gned for ca pacity 1Q14 Net Debt Net Debt

52. Slide 52: Wind onshore is a competitive technology

    Wind onshore is a competitive technology… … requiring predictable revenue streams originated through Wind competes with all technologies… ex-ante competition (e.g. auctions) Levelised Cost of Energy (LCoE) (€/MWh, 2012) Zero marginal technology Capital intensive (price taker in marginal industry wit

53. Slide 53: Largest growth driver in renewables

    … and perceived by the market as the largest growth driver in renewables… 2014-2020 Worldwide Additions 2014-2020 Renewables Additions 2014-2020 Wind Onshore Additions (GW) (GW) (GW, ex-China) Renewables 594 Wind onshore 265 Europe 36% Decentralised Regions with EDPR Coal and oil 454 143 presence 74

54. Slide 54: Medium-term view about sector fundamentals

    … supporting EDPR’s medium-term view about sector fundamentals Medium-term positive prospects in Ongoing demand for wind outside Europe due to its competitiveness Europe despite short-term challenges EUROPE US OTHER MARKETS Coal retirement planned through 2020 Short-term pressure Strong electricity

55. Slide 55: Strategic plan through 2017: three pillars

    EDPR’s strategic plan through 2017 to distinctively create value supported by 3 pillars 1. Selective growth 2. Operational excellence 3. Self-funded business 2014-2017 2014-2017 2014-2017 >500 Maintaining high >97.5% Strong Operating Investing in quality projects MW/year availability levels Cash-Flo

56. Slide 56: Visible growth plan based on contracts already signed

    A visible growth plan based on contracts already signed with low exposure to wholesale prices and regulatory schemes… United States represents 60% of EDPR …with 85% of the new capacity growth plan… already awarded though competitive auctions (PPA and FiT) +1,130 MW United States 60% +180 MW PPA / Fi

57. Slide 57: US investments at the core of EDPR growth

    Investments in the US are at the core of EDPR growth strategy with 1,130 MW of new additions already secured Economics of PPA EDPR: #1 in new wind PPA in the US market already secured (1.1 GW) RPS Demand Average metrics Wind competitiveness demand Load Factor 43% 250 MW (2016) Price $48/MWh 200 MW (

58. Slide 58: European markets: 0.4 GW of low-risk growth

    European Markets to deliver 0.4 GW of low-risk profitable growth opportunities… PORTUGAL ITALY Conclusion of ENEOP project Execution of projects with PPA Project awarded in 2006 30 MW awarded in 2013 to be installed in 2014 (EDPR with a 40% stake) Asset splitting expected for 2015 with Participating

59. Slide 59: Selected emerging wind markets

    ...and selected emerging wind energy markets through 416 MW of high quality projects with long-term PPA secured BRAZIL MEXICO NEW MARKETS Execution of Execution of Prospecting markets with projects with PPA projects with PPA strong fundamentals 236 MW awarded in 2011 and 2013 180 MW with 25 year PPA

60. Slide 60: Offshore wind in France and UK projects

    EDPR/GDF Suez awarded with 1,000 MW offshore wind project in France and developing UK projects with Repsol… Offshore wind development EDPR’s Partnership Strategy critical for de-risking and complementary skills Le Tréport Onshore Restrictions Moray Firth Scarce opportunities in some onshore markets

61. Slide 61: Quality growth and wind assessment know-how

    Quality growth supported by distinctive competences and unique wind assessment know-how… Keep maximizing productivity levels… … and reach second-to-none load factor metrics Availability Load Factor (%) >97.5% (%) 31.5% 97.7% 29.4% 2013 2017E "P50" of assets in operation 2017E Predictive maintenance

62. Slide 62: Efficiency metrics at highest levels of excellence

    … keeping efficiency metrics on highest levels of excellence Strong focus on cost control… … leading to improvements in efficiency ratios Operating costs breakdown 1 Opex/MW 1 -2% (€m, %) (€k) CAGR Levi es • Increased i n recent years, 20% mos tly penalised by the i ntroduction of new levi es (e.g.

63. Slide 63: Asset rotation strategy to accelerate value creation

    Growth enhanced by EDPR’s asset rotation strategy designed to accelerate value creation… Asset Rotation Strategy 1 Self-funding Strategy 1 2 Accelerate value growth Asset Allowing the execution Crystallise projects’ Rotation of additional market Investment NPV, capturing value created & opportunitie

64. Slide 64: Expansion plan of €1.8bn in 2014-17

    A rigorous expansion plan of €1.8bn in the 2014-17 period 2014-2017: EDPR Investment Plan + Capex €2.4bn Strong visibility from PPAs already signed + Financial Investments €0.1bn Mostly on offshore projects with COD post 2017 = Total Investment €2.5bn +500 MW/year + Future options - Asset Rotation (

65. Slide 65: EDPR value proposition: three strategic pillars

    EDPR value proposition supported by three strategic pillars By delivering on its strategy… Selective and Quality assets delivering Self-funding profitable growth increased profitability business model … EDPR expects to achieve solid growth targets… … maintain its dividend policy… Electricity Output

66. Slide 66: EDP – Energias do Brasil – Miguel Setas

    Miguel Setas, CEO EDP – Energias do Brasil 66

67. Slide 67: Corporate profile: integrated private electric company

    Corporate profile: integrated private electric company with operations in distribution, generation and trading EDP Free Float Energias de Portugal 51% 49% Energias do Brasil 16% of Group's EBITDA(1) 2013 EBITDA breakdown largest private trading company (sales) 3rd  9% of market share (1)(2) (%) Tra

68. Slide 68: Corporate profile: operations in Brazilian states

    Corporate profile: operations in 11 Brazilian States Generation(1) Distribution  Present in 10 States EDP Bandeirante  Hydro: 76%; Small Hydro: 6%; Thermal: 16% and Wind Power: 2%  28 cities in the state of São Paulo Sa nto Antônio do Jari Ca choeira Ca ldeirão  1.7 million customers 187 MW 110

69. Slide 69: Strategic focus 2014E-2017E

    Strategic focus 2014E-2017E 1 Energy Scenario 2 Cost control and capital discipline 3 Operational and financial improvement of Pecém I 4 Growth delivery (execution) 5 Quality and customer satisfaction 69

70. Slide 70: Energy scenario: low rainfall and reservoir levels

    Energy scenario: low rainfall and reservoirs levels 1 Rainfall / Natural energy inflow(1) | Rainfall / Natural energy inflow(1) Southeast Rainy season (2014 vs. 2013) (Avg. GW) Southeast Annual Performance since 1930(1) (Avg. GW) from Dec, 2013 to April, 2014 from Dec, 2012 to April, 2013 1955 (wors

71. Slide 71: Delay in commissioning of new generation capacity

    1 Delay on commissioning of new generation capacity: 2.3 avg. GW expected to start operations before year-end Startup of commercial operation(1) | Power plants delayed (Avg. MW) Others Santo Antônio Jirau Eneva Petrobras FURNAS ELETROSUL 4000 3000 2000 1000 0 jan-14 fev-14 mar-14 abr-14 mai-14 jun-1

72. Slide 72: Increase of system costs due to thermal dispatch

    1 Strong increase of system costs due to higher thermal dispatch Thermal dispatch(1) | National integrated system (SIN) Total installed capacity Thermal installed capacity (Avg. GW) (GW) (GW) 90% 21% 76% 121.3 14.8 23% 12.3 69.1 10% 7.8 28.1 7.0 2012 (average) 2013 (average) 1Q14 Total installed 200

73. Slide 73: Impacts to the business from current energy scenario

    Impacts to the business from current energy scenario 1 Distribution Generation Higher non manageable costs being supported by:  Resources from National Treasury: R$4bn  Resources from the financial market to CCEE(1): R$ 11.2bn raised Expectation of GSF (Generating scaling factor) through financial

74. Slide 74: Energy scenario: monitoring and contingency plan

    Energy scenario: monitoring and contingency plan 1 According to market experts the probability of rationing could be above 40% RATIONING RISK CONTIGENCY PLAN Financial Regulatory Operational  Working capital improvement  Rationing format design  IT systems  Reduction of operational costs  Revie

75. Slide 75: Cost control and capital discipline: strong track record

    Cost control and capital discipline: strong track record 2 Historical costs | Opex(1) Comparison of quarterly costs| Opex(1) / Gross margin(2) (R$m) (R$m) / (%) Opex Opex/Gross margin +1% -2% 952 958 273.8 233.8 229.3 44% 36% 32% 2007 2013 1Q13 4Q13 1Q14 Historical costs below inflation (IPCA) : 43.

76. Slide 76: Cost control and capital discipline: ring fenced operation

    Cost control and capital discipline: ring fenced operation 2 Net debt / EBITDA (last twelve months) Gross debt amortization schedule(1) (R$m) (R$m) EBITDA Net debt / EBITDA 1,186 2,453 2,335 2,451 1,992 780 800 1.5x 551 1.4x 1.4x 1.3x 239 220 236 Mar-13 Sep-13 Dec-13 Mar-14 Cash 2014 2015 2016 2017

77. Slide 77: Pecém I: operational and financial improvement

    Pecém I: operational and financial improvement on track 3 Availability Index | 1st year of operation (2013)(1) Availability Index(1) | 1Q14 (%) (%) Maintenance of Group 1 83% 88% 75% 70% 71% 61% 52% 43% Group 1 Group 2 TPP Pecém I TPP SINES and Jan-14 Feb-14 Mar-14 1Q14 Similar TPPs (Europe)  In Ja

78. Slide 78: Growth delivery: hydro projects under construction

    4 Growth delivery: hydro projects under construction and committed Hydro projects under construction and committed EDP Capacity Contracted Capex(e) Startup of Jari: 92% completed Brasil (100%) Energy Debt/Equity Commercial Stake(1) (MW) (Avg. MW) (R$bn) Operation On time and On cost Stº António do J

79. Slide 79: Growth delivery: +2.3GW of capacity 2005-2018

    Growth Delivery: +2.3GW of capacity from 2005 to 2018 4 Installed Capacity Evolution Installed Capacity by Source (MW) (MW) +29% 2013 2018E 286 2,830 Small Small 187 54 110 Hydro Wind Hydro Wind 2,195 2% 6% 5% 5% Thermal Thermal 1,665 16% 13% 530 76% 77% IPO 2005 2013 2015E 2016E 2017E 2018E 2018E H

80. Slide 80: Quality in electricity distribution: consistent improvement

    5 Quality and customer satisfaction in electricity distribution: consistent improvement EDP Bandeirante EDP Escelsa (DEC [hours] |Outage duration per customer) (DEC [hours] |Outage duration per customer) Regulatory requirement Regulatory requirement 10.4 9.88 9.67 9.79 9.43 9.42 8.08 7.54 2011 2012

81. Slide 81: Quality in distribution: energy losses trend

    5 Quality and customer satisfaction in electricity distribution: Challenge | energy losses trend EDP Bandeirante EDP Escelsa Total Losses Total Losses (%) (%) Non-Technical Technical Non-Technical Technical 14.0% 13.7% 13.2% 13.2% 11.1% 10.2% 12.8% 10.3% 9.86% 9.65% 5.5% 8.3% 7.4% 7.7% 7.8% 7.6% 5.5

82. Slide 82: EDP Brasil: leading position in Brazilian energy sector

    EDP Brasil: Leading position in the Brazilian Energy Sector Delivering on its strategy… Growth Delivery Cost Control and Operational excellence and On time and On cost Capital Discipline Quality improvement …EDPBR will achieve its targets… Installed Capacity EBITDA (1) Net Debt/EBITDA Dividend polic

83. Slide 83: Financials – Nuno Alves, CFO

    Nuno Alves, CFO Financials 83

84. Slide 84: Low risk operating profile with low sensitivity to cycles

    Today, EDP has a low risk operating profile with low sensitivity to economic cycles Liberalised Activities Liberalised generation and supply in Portugal and Spain: Iberia 12%  7.8GW: 48% CCGT; 31% Hydro; 19% Coal; 2% Nuclear Brazil 16% EBITDA: ~55% electricity generation; ~45% electricity distribut

85. Slide 85: Diversification of portfolio and risk profile to 2017

    Diversification of portfolio but low risk business profile will change until 2017 EBITDA breakdown by geography and by segment 2014E-2017E Total EBITDA@risk (%) (%) RoE 6% Liberalised 7% 12% EUA 10% 13% Activities Iberia 27% Brazil 16% 13% Brazil 17% 17% 16% Spain 20% 18% Wind 26% 7% Regulated 32% N

86. Slide 86: Improvement of credit ratios

    Improvement of credit ratios will mitigate increase of business risk 2014E-2017E Outlook 2014E 2017E Net Debt (1) / ~ 3.8x ~ 3.0x EBITDA FFO / Net Debt (1) ~ 17% ~ 22% Ratios to improve significantly on lower net investments and new capacity additions EDP continues strongly committed to its financia

87. Slide 87: Growth capex focused on wind and hydro

    Growth capex focused on wind and hydro Net Investments(1): 2014E-2017E Breakdown of accumulated consolidated Capex (€bn) (%) 3% Other 8% Brazil ~ 1.6 Regulated Networks Iberia 25% ~ 1.2 24% Generation Iberia (mostly new hydro) 40% EDP Renováveis Avg. Avg. 2014E-2017E 2014E-2015E 2016E-2017E Maintena

88. Slide 88: Deleveraging supported by growing cash flows

    Deleveraging supported on growing cash flows with low risk profile 2014E-2017E: Sources and Uses of Funds (%) Financial Divestments ~ 10% Change in reg. receivables ~ 5% ~ 50% Net investments (2) Adjusted FFO (1) ~ 85% ~ 30% Dividends (3) ~ 20% Debt Reduction Sources 2014E-2017E Uses 2014E-2017E Fre

89. Slide 89: EBITDA drivers 2014E-2017E

    EBITDA drivers: 2014E-2017E EBITDA Breakdown 2014E-2017E Major Drivers for EBITDA 2014E-2017E (%)  Capacity additions: Liberalised  Wind power: 500MW(2) per year (mostly US) 12% Activities Iberia 27%  Hydro in Portugal: ~250MW in 4Q14; ~960MW in 2H15 and ~250 in 2H16 Brazil 16%  Other contractua

90. Slide 90: Resilient performance enhanced by diversification

    Resilient performance enhanced by diversification and risk management 2014E-2017E Outlook CAGR 2014E 2014E-2017E EBITDA ~ € 3.5 bn ~ 5% Net Profit ~ € 0.9 bn ~ 5% EBITDA and Net Profit 2014 outlook: in line with previous guidance and current consensus EBITDA and Net Profit 2014-17 growth outlook: su

91. Slide 91: Portuguese regulatory receivables to peak in 2015

    Portuguese electricity system regulatory receivables to peak in 2015, and converging to zero by 2020 Electricity Regulatory Receivables - Portugal (€bn) 5.3 5.3 4.8 4.9 4.2 2.7 2.7 Other 2.4 2.4 2.2 EDP 2.4 2.6 2.6 2.5 0.5 2.0 2013 2014E 2015E 2016E 2017E 2020E Business Plan 2014E-17E includes €0.8b

92. Slide 92: Monetisation of regulatory receivables

    EDP has been conducting several monetisation operations, either by private placements or securitisation Monetisation of regulatory receivables in the Portuguese electricity system (€bn) Tariff deficit tranches available for 1,724 monetization by EDP:  ~€350m, out of €1,275m deficit created 1,013 in

93. Slide 93: Net debt

    Net debt EDP consolidated net debt position: Mar-14 EDP consolidated debt by instrument: Mar-14 (€ million) (%) 4% raised at EDP Brasil Bank 17,105 Bank loans and capital markets; Loans 40% EDP Brasil Ring-fenced policy essentially ‘non-recourse’ 735 to EDP S.A. EDP Renováveis 538 60% Capital 3% rai

94. Slide 94: Financial liquidity position

    Financial Liquidity position Sources of liquidity: Mar-14 EDP consolidated debt maturity profile as of Mar-14 (€ m) (€ bn) Maximum Number of Commerci al paper Instrument Available Maturity Other s ubsidiaries(1) Adjusted Avg. Debt Amount counterparties EDP SA + BV Maturity: 3.9 years Revolving Credi

95. Slide 95: Main sources and uses of funds

    Main sources and uses of funds Sources of funds Use of funds  Refinancing needs in 2014: RCF maturing in Jun-14 €1.1bn  Cash & Equivalents (Mar-14) : €1.7bn Bond maturing in Dec-14 €0.4bn  Available Credit Lines (Mar-14): €2.3bn Loans maturing in 2014: €0.4bn  Eurobond Issue (Apr-14): €0.65bn To

96. Slide 96: Average cost of debt

    Average cost of debt Balanced interest rate debt structure between fixed and variable 1Q14 debt by interest rate term Avg. cost of debt 2013-2017E (%) (%) +30bp -30bp ~ 4.7% Fixed 4.4% ~ 4.4% 45% 55% Floating 2013 2014E 2016E/2017E Inflation linked cash flows allow higher weight of floating rates Lo

97. Slide 97: Main sources of risk to Business Plan 2014-17

    Main sources of risk to EDP’s Business Plan 2014-17 Risks Mitigation  Recovery of demand  Positive signs Market  Decrease of inflation with negative impact in regulated activities  Hedged provided by floating rates (55%) environment  Energy market prices  Hedging Policy Forex and  Market vola

98. Slide 98: Key drivers for financial metrics 2014E-17E

    Key drivers for EDP’s Financial Metrics in 2014E-17E By delivery on its strategy… Efficient management of Execution of value Reduction of financial financial liquidity enhancing growth leverage and cost of debt …EDP will achieve its targets… EBITDA Lower Avg. Net Investment Net Debt (1)/EBITDA Avg.

99. Slide 99: Conclusions – António Mexia, CEO

    António Mexia, CEO Conclusions 99

100. Slide 100: 2014E-17E focused on organic growth and free cash-flow

     2014E-17E to be focused on organic growth execution and free cash-flow improvement Evolution of Capex and EBITDA (€m) EBITDA Maintenance Capex Total Capex 2014-2017 2012-2014 Focus on free cash flow Post-2017 2005-2011 Controlled growth in improvement and Decisions on available High growth with exce

101. Slide 101: EDP strategic agenda

     EDP strategic agenda aims at addressing key challenges 1 Continue to grow 2 Maintain financial deleveraging 3 Preserve low risk business profile 4 Improve efficiency 5 Deliver attractive returns Reinforcement of Strategic Agenda Balancing growth & financial deleverage Focus on profitability & shareh

102. Slide 102: Growth: +18% capacity increase in 2013-17E

     Growth: +18% capacity increase in 2013-17E 1 EDP Group installed capacity by technology 2013-2017E Capacity additions (2) (GW) (% of new MW) (1) Hydro Wind CCGT Other Equity method consolidation Conclusion of hydro +18% Hydro PPA Brazil expansion program (Equity) 26.7 14% Hydro Wind PPA 22.6 4% LatA

103. Slide 103: EBITDA targets above market expectations

     1 Growth: EDP’s EBITDA targets clearly above market expectations for the sector European Integrated Utilities EBITDA CAGR European Integrated Utilities EBITDA CAGR Bloomberg Consensus for 2015E vs. 2013 Reported (1) Bloomberg Consensus for 2017E vs. 2013 Reported (1) (%) (%) 3% EDF 3% EDP 1% EDP EDF

104. Slide 104: Financial deleveraging: maintaining low risk profile

     2 Financial deleveraging: maintenance of EDP’s low risk profile European Utilities: 2013 Net Debt/EBITDA vs. Business Mix (1) (x;%) 6.0 Net Debt/ EBITDA 2013 (x) 5.0 Sna m Na t Gri d Iberdrola REN 4.0 RWE A2A E.ON Ena gás Fortum Verbund 3.0 Enel REE Ga s Natural 2017E 2.0 Centri ca EDF GDF Suez 1.0

105. Slide 105: Partnership with CTG and EDPR asset rotation

     2 Financial deleveraging: Partnership with CTG and EDPR’s asset rotation Partnership with CTG Main principles of EDP’s disposal program:  Maintenance of operating control of key strategic  Commitment/framework, aligned interests assets (disposal of stakes ≤ 50%)  CTG Partnership for total €2bn of

106. Slide 106: Maintaining diversification of markets and regulation

     3 Low risk: maintenance of diversification in terms of markets and regulatory environments EBITDA Breakdown by Geography (%)  United States: major growth driver in 2014E-2017E period fully based on wind power additions sold through PPAs 6% 7%  Portugal: EBITDA growth supported by commissioning of

107. Slide 107: Among the most regulated/LTC integrated utilities in Europe

     3 Low risk: By 2017, EDP will continue to be amongst the most regulated/LTC integrated utilities in Europe EBITDA Breakdown by Business Profile (%)  Regulated and LT Contracted businesses:  Regulatory outlook more stable in Iberia post Regulated & LT Contracted Liberalized 2012-14 hits;  Networks

108. Slide 108: 2nd highest weight of hydro and wind in Europe

     3 Low risk: EDP has the 2nd highest weight of hydro & wind in Europe % Weight of Hydro & Wind in 2013 Generation Mix Major European peers (MW) Growing to 75% 74% by 2017E 68% 54% 36% 26% 19% 16% 16% 16% 13% 12% Verbund EDP Iberdrola Enel SSE EDF E.ON GDF-Suez RWE Gas Natural Fortum Superior asset mi

109. Slide 109: Portfolio with long average residual life

     3 Low risk: EDP portfolio of assets with a long average residual life Average Residual Useful Life of EDP’s Generation Portfolio by Technology Dec-2017 (1) Average Residual Useful Life of (Years) EDP’s Generation Portfolio (Years) Hydro CCGT Wind & Solar Nuclear Coal with DeSOx Coal without DeSOx (%

110. Slide 110: Sustainability as integrated component of strategy

     3 Low risk: Sustainability as an integrated component of EDP’s strategy EDP’s strategy integrates the 3 pillars of sustainable Major strategic Sustainability targets by 2017 development  Reduce CO2 specific emissions by 70% until Environmental 2020 (vs. 2008); Environmental Dimension  Globally ext

111. Slide 111: OPEX III program extended to €180m/year by 2017E

     4 Efficiency: OPEX III program cost savings extended to €180m/year by 2017E Efficiency Program: annual savings (1) OPEX/Gross Profit (€ m) (%) OPEX III (2011-13) OPEX III (2014E-17E) -2 p.p. 180 28% 160 160 26% 60 120 OPEX I OPEX II OPEX III 2013 2017E (2006-08) (2008-10) 2011-2017E  Iberia: Headco

112. Slide 112: Attractive dividend policy 2014E-2017E

     Attractive dividend policy 2014E-2017E 5 EDP’s dividend performance 2011-2013 Avg. Payout Ratio 2013: European Utilities peer group (1) (€ cents; %) (%) Dividend per share (€ cent) Dividend Payout Ratio (%) ENDESA 85% 67% 67% FORTUM TERNA 60% REN EDP (2) 67% 18.5 18.5 18.5 EDF AVERAGE AVERAGE 66% NA

113. Slide 113: EDP strategic agenda

     EDP strategic agenda… By delivery on its strategy… Continue Financial Low risk Attractive to grow  deleveraging  profile  returns  …EDP will achieve its targets… EBITDA & Net Profit Net Debt (1)/EBITDA Reg. & LT Contracted Dividend per Share CAGR EBITDA 14E-17E +~5% 2017E ~3.0x 2017E >70% Floor

114. Slide 114: Reinforcing our distinctive equity story

     …reinforcing our distinctive equity story Visibility on significant growth through wind and hydro: Installed capacity rises from 69% in 2013 to 75% in 2017E; Low marginal cost technologies Unique low risk portfolio Weight of EBITDA from regulated and LT Contracted activities to keep clearly above ou

115. Slide 115: 115

     115

EDP — Investor Day (May 2014) on 6ix