Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — Debt Investor Presentation (May 2023)
35 slides from Edp's debt investor presentation, May 2023
Slide 1: Credit Investors' Presentation May 2023
CREDIT INVESTORS’ PRESENTATION May 2023
Slide 2: Disclaimer
Disclaimer This document has been prepared by EDP - Energias de Portugal, S.A. (the "Company") solely Forward-looking statements include statements regarding: objectives, goals, strategies, for use at the presentation to be made on this date and its purpose is merely of informative outlook and growt
Slide 3: Global company, leader in the energy sector, present in 4 regional hubs
We are a global company, leader in the energy sector, present in 4 regional hubs throughout different stages of the value chain % Weight on EBITDA 2022 Renewables, Clients & EM North America Europe APAC ~67% Wind Solar Solar Energy onshore utility-scale DG management Wind Hydro Storage H2 Client off
Slide 4: Key credit strengths
Key credit strengths Attractive, resilient and integrated business model with stable margins, ✓ Integrated operations across energy value chain allows for successful risk mitigation visible cash flow generation and ✓ Strong protection against inflation through long-term offtake contracts and long-du
Slide 5: Business Strategy Execution
Business Strategy Execution Credit Investors’ Presentation 5
Slide 6: Leading the energy transition to create superior value
Leading the energy transition to create superior value Our commitments Key figures and targets Accelerated and sustainable growth €25 Bn 4.5 GW/yr >50 GW gross investment 2023-26 gross additions 2023-26 RES gross additions 2021-30 ESG excellence and future-proof organization Coal free All Green Net
Slide 7: Increasing investment in the energy transition
Accelerated and sustainable growth We are increasing our investment in the energy transition, with a strong focus on renewables and core low-risk markets Reinforcing our investment... ... in the energy transition, across core low risk markets Annual Gross Investments1 (€ Bn) Gross Investments1 2023-
Slide 8: Consolidating presence across technologies with differentiating value propositions
We are consolidating our presence across technologies with differentiating value propositions Wind & Solar (5.0 GW) Wind onshore ~40% Top 4 global1 player with extensive track record along the full value chain with highly experienced teams Solar Utility scale (9.4 GW) ~40% Additions ramping up quick
Slide 9: Growing our distribution asset base with high visibility
We are growing our distribution asset base and we have high visibility over the upcoming period Distribution business Growing our Distribution business… ... on the back of visibility on regulatory frameworks Regulated Asset Base, € Bn RoR Regulation and Gross Investments1 Portugal Spain Brazil By 20
Slide 10: Ramping up growth with clear visibility on execution
Accelerated and sustainable growth We are successfully ramping up growth with clear visibility on execution We are scaling-up our growth rate… … and have clear visibility on execution Gross additions, GW € Bn, 2023-26 4.5 GW/yr ~181 GW €25 Bn (2023-26) Electricity Networks ~15% 4.8 ~50% 4.1 ~6x Rene
Slide 11: 1.5 GW renewables secured capacity since CMD
1.5 GW renewables secured capacity since CMD reaching ~50% of the target for 2023-2026 Secured Capacity for 2023-2026 Growth of secured capacity supported by strong GW renewables demand % % of target additions +1.5 GW secured in March & April diversified by 6 markets, mainly in EU and US, and 3 tech
Slide 12: Accelerating leading global Solar DG business
We continue to accelerate our leading global Solar DG business, deploying 0.3 GW over the last 12 months GWac Installed capacity Installed capacity, GWac Main Highlights Up to 500 MWac signed w/ Google, largest corporate sponsorship for DG signed between two 0.1 companies in the US 0.2 GW GW High gr
Slide 13: Distinctive asset rotation strategy to crystalize value
Accelerated and sustainable growth We will deploy our distinctive asset rotation strategy to crystalize value and fund additional growth opportunities ~€7 Bn AR proceeds and capital gains ~€20 Bn 4.5 GW/yr EV1 rotated track record since 2012 Upfront value crystallization ~30% Build to Sell Growth ac
Slide 14: Actively managing EDP's listed subsidiaries
Distinctive and resilient portfolio We are actively managing EDP's listed subsidiaries Core EDP growth business with long- term value (>70% ownership) Capital raise of c. €1.0 Bn to fund acceleration of accretive Largest European listed pure-play renewables growth renewables Sizeable market with sol
Slide 15: Tender offer on EDP Brasil
Tender offer on EDP Brasil: Auction expected in 3Q23, €1Bn investment in case of 100% success, already funded through EDP’s €1bn capital raise CVM review process & Timeline Rationale for the acquisition March 2 - 1st filing with CVM March 17 - Minorities deadline to question the appraisal Simplifica
Slide 16: Capital raise at EDPR to fund renewables growth
Distinctive and resilient portfolio Capital raise at EDPR to fund acceleration of accretive renewables growth Sources and uses of cash Equity raise at EDPR EDPR, € Bn 2023-26 EDPR has a Gross Investments plan of ~€20 Bn to deploy ~17 GW of renewables additions in 2023-26 ~20 ~20 To partially fin
Slide 17: Diversified sources of cash to deliver on growth
We have diversified sources of cash to deliver on our growth BP23-26 Organic Sources and Uses of Funds (€ Bn) Uses of cash Sources of cash ~€27 Bn Dividends ~3 Organic CF1 Delisting ~1 (net of maintenance ~9 EDP Brasil CAPEX) and others Asset Rotation + ~8 Expansion Disposals Investment ~23 TEI2 ~4
Slide 18: Prudent financial policy supporting solid investment grade rating
We have a prudent financial policy with a centralized management, supporting a solid investment grade rating Rating Green financing Cost of debt Keep BBB rating, by maintaining Tap most efficient markets, Continued active management sound credit metrics and overall leveraging appetite for green fund
Slide 19: Fully committed to a strong BBB rating
Distinctive and resilient portfolio We remain fully committed to a strong BBB rating to structurally support the CAPEX cycle ahead We achieved the target BBB rating… … and reinforce our commitment to keep a strong balance sheet FFO/Net Debt1 ~20% ~21% ~21% Improved FFO/Net Debt, reaching >20% since
Slide 20: Sound balance-sheet and low-risk profile
We are keeping a sound balance-sheet and low-risk profile 17 Reinforced commitment to 16 13 a strong BBB rating Net Debt Reached >20% FFO/ND in € Bn 2021, achieving BBB credit rating Solid cash flow generation with +€4 Bn net debt after a ~20% ~21% ~21% €25 Bn gross investments plan FFO/Net Debt 1 O
Slide 21: >€10 Bn financial liquidity covering refinancing needs
>€10 Bn financial liquidity as of Mar-23 covering refinancing needs beyond 2025 Financial liquidity as of Mar-23 EDP consolidated debt maturity profile as of Mar-231 € Bn € Bn EDP Brasil EDP SA & EDP Finance BV and Other Cash & Equivalents 4.1 4.5 2.9 2.5 Available Credit Lines 6.2 2.0 2.3 1.9 Of wh
Slide 22: Limited exposure to short-term interest rates
Limited exposure to short-term interest rates, ~€2 Bn pre-hedged refinancing cost for 23-24, and continued high demand for clean energy AR Debt by interest rate Avg. nominal debt by type as of Mar. 23 currency as of Mar. 23 % % Fixed EUR Asset Rotation for 2023 launched and on track to 73% 43% deliv
Slide 23: Raising funds primarily at Holding level
We are raising funds primarily at Holding level, ensuring an efficient debt management Centralized and diversified funding EDP Consolidated net debt position as of Mar.23 Sources of debt funding as of Mar.23 € Bn % Green Bonds Loans and other 13.1 Capital Conventional Bonds Commercial paper EDP Bras
Slide 24: Refinancing needs addressed with long maturities and green financing
We have addressed in advance our refinancing needs with long maturities and have a strong position for competitive green financing Since 2021, EDP has been issuing longer maturity … with a strong positioning for green financing as a bonds… competitive hedge 1Q23 2026 Green Bond value Average Average
Slide 25: 1Q23 Results
1Q23 Results @edp
Slide 26: Recurring EBITDA +2x YoY
Recurring EBITDA +2x YoY prompt by a recovery on hydro conditions and lower electricity and gas sourcing costs Recurring EBITDA1 ,€m YoY growth, % +96% YoY Excl. FX ∆ YoY +100% 1,478 1,415 • EDPR Installed Capacity +5% YoY • Electricity generation increased 11% +€54m EDPR +718m +€665m Hydro, • Avg.
Slide 27: Strong recovery of hydro generation and reservoir levels
Strong recovery of hydro generation and sustainable reservoir levels as of today gives us confidence for the remaining 2023 Recovery of hydro volumes in 22/23 winter… …with hydro reservoir levels still above Average Reservoir levels in Portugal (%) Iberia Avg. Elect. Spot 229 183 146 113 96 Price (€
Slide 28: Net financial costs impacted by forex MtM
Net Financial costs impacted by forex MtM, interest related costs +27% penalized by 90bps increase in avg. cost of debt (at 3.1% ex-Brazil) Net Financial Costs Cost of Debt1 Brazil EDP excl Brazil €m €m 2.3% 3.1% +27% 260 Avg. Cost 52 243 17 of Debt Excl. Brazil 191 4.8% 173 17 41% 43% 59% 3.9% 57%
Slide 29: Net Profit of €306m vs. weak 1Q22
€m Net Profit of €306m vs. an abnormally weak 1Q22, strong EBIT growth partially mitigated by higher financial costs and effective tax rate Recurring Net Profit1 Recurring Net Profit Δ YoY €m 359 306 EBITDA 1,415 +706 D&A and Provisions 426 -38 EBIT 990 +668 Higher EBT in Portugal and -76 Net Financ
Slide 30: Solid balance sheet with change in net debt
Solid balance sheet with net expansion investment funded through Capital increase but penalized by higher Regulatory Receivables Change in Net Debt € Bn 1.2 2.0 13.2 1.1 13.1 0.4 0.0 Net Debt Recurring Regulatory Net Expansion Equity raise FX and Other Net Debt Dec-22 Organic CF WC3 Investments at E
Slide 31: Strengthening our strategic targets
We strengthen our strategic targets, reinforcing our ambition to lead the energy transition Our commitments Key targets BP 2021-25 BP 2023-26 Accelerated and Deployment ~4 GW/year ~4.5 GW/year sustainable growth Asset Rotation €1.6 Bn/year in AR; €0.3 Bn in gains €1.7 Bn/year in AR; €0.3 Bn in gains
Slide 32: Annex
Annex @edp
Slide 33: Macroeconomic indicators for main markets
Macroeconomic indicators for main markets 2022 2023 2022 2023 2022 2023 2022 2023 Inflation (CPI)1 7.9% 4.7% 8.8% 4.9% 8.1% 3.5% 9.4% 4.7% Weight of housing and 9.6% - 14.2% - 36.1% - 15.3%3 - utilities on CPI basket2 Deficit, GDP4 -1.9% -1.4% -4.9% -4.4% -4.0% -5.7% -5.8% -7.5% Gross Debt/GDP 114.7
Slide 34: Main market and macro assumptions
Main market and macro assumptions Pool Iberia €/MWh TTF €/MWh CO2 €/ton Inflation Europe1 % Inflation Brazil % Avg. IPCA / IGPM 168 123 90 9.2 5.6 81 81 126 3.9 3.6 82 59 35 3.2 2.1 2022 2024 2026 2022 2024 2026 2022 2024 2026 2022 2024 2026 2022 2024 2026 EUR/USD EUR/BRL EUR 7Y MidSwap % USD 7Y Tre
Slide 35: IR Contacts
IR Contacts E-mail: ir@edp.com Phone +351 210 012 834 Site: www.edp.com Investor presentation 35
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