Gas Natural SDG — 9M 2009 Earnings Presentation
39 slides from Gas Natural SDG's earnings presentation, Nov 4, 2009
Slide 1: Third Quarter 2009 Results (9M09)
Third Quarter 2009 Results (9M09) November 4, 2009 1
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. Such assumptions, information and forw
Slide 3: Agenda
Agenda 1. Highlights 2. Summary of 9M09 Consolidated Results 3. Analysis of Results (Pro-forma) 4. Conclusions 3
Slide 4: Highlights
Highlights 4
Slide 5: Highlights
Highlights Strong regulated businesses and electricity coverage provide a healthy operating performance in trying times Integration with Unión Fenosa completed with merger in early September Acquisition facility being successfully refinanced High completion degree of asset disposal plan 9M09
Slide 6: A Strong Business Model
A Strong Business Model Regulated and Quasi-regulated Coverage for Power EBITDA1 Generation1 Regulated + PPAs + Supply power contracts EMPL + Gas contracts 10% 60% 40% 90% Consolidated stability of business performance Note: 1 Pro-forma figures for 9M09 6
Slide 7: Pro-forma Quarterly EBITDA
Pro-forma Quarterly EBITDA1 (€ million) +1.1% EBITDA pro-forma 2008: €4,844 million1 +4.0% 1,326 1,341 -2.1% 1,193 1,241 1,219 1,106 1,083 1Q 2Q 3Q 4Q 2008 2009 Resilient pro-forma 9M09 EBITDA (+1.0%) despite difficult environment Note: 1 Pro-forma figures from 1 January. Unión Fenosa EBITDA homogen
Slide 8: Unión Fenosa Integration Completed
Unión Fenosa Integration Completed ● €3.5 billion capital increase fully implemented prior to tender offer completion ● 95.2% holding of Unión Fenosa reached after tender offer, leading to a €788 million lower financing need ● Savings achieved through equity swaps and deferred purchases ● Merger com
Slide 9: Synergies
Synergies Synergies (€ million) Current status 200 550 • Detailed action plans to achieve synergy targets in 2011 already in place • Top 30 initiatives representing 60% 90 350 of total synergies 260 • 40% of total synergies already captured by 3Q09 • €180 million impact in 2009 • Smooth synergies im
Slide 10: Successful Refinancing Efforts in Capital Markets
Successful Refinancing Efforts in Capital Markets ● Issuance of €4.75 billion under GAS NATURAL’s EMTN programme ● October: €500 million, 3-yr at 3.125%, €1 billion, 7-yr at 4.375% and €750 milion, 12-yr at 5.125% ● June: €2 billion, 5-yr at 5.250%, and €500 million, 10-yr at 6.375% ● Oversubscripti
Slide 11: Asset Disposals (I): Financial assets
Asset Disposals (I) Financial assets ● Gross cash from financial asset disposals totals €1,135 million ● Sale of 5% in CEPSA for €529 million ● Sale of 1% in Red Eléctrica for €43 million ● Sale of 5% in Enagás for €155 million ● Sale of 13% in Indra for €320 million ● Sale of 4.4% in Isagen (Colomb
Slide 12: Asset Disposals (II): CNC commitments
Asset Disposals (II) CNC commitments ● Sale of gas distribution assets and customer contracts to Naturgas: €330 million, to be completed before year-end 2009 ● 248,000 gas connection points1, 209,900 gas customers, 4,000 electricity customer contracts and transportation assets ● Transaction recently
Slide 13: Asset Disposals (III): Other assets
Asset Disposals (III) Other assets ● Agreed sale of 63.8% of EPSA (Colombia) ● Agreed price of ~ US$1.1 billion ● Deconsolidation of ~ €112 million of debt ● Transaction to be completed by end 2009 ● EBITDA 2008: ~ €167 million2 ● Examining strategic alternatives for other assets €2.3 billion of res
Slide 14: Summary of 9M09 Consolidated Results
Summary of 9M09 Consolidated Results 14
Slide 15: 9M09 Consolidated Results Snapshot
9M09 Consolidated Results Snapshot1 (€ million) 9M09 9M08 Change Net Sales 10,527 9,702 8.5% EBITDA 2,884 1,926 49.7% Operating Income 1,820 1,371 32.7% Net Income 914 805 13.5% Investments: 14,957 2,364 - Tangible & Intangible 1,228 657 86.9% Financial & Other 13,729 1,707 - Net Debt (as of 30/09)
Slide 16: Consolidated Income Statement
Consolidated Income Statement1 (€ million) 9M09 9M08 Change % Net Sales 10,527 9,702 8.5 Purchases (6,404) (6,917) (7.4) Gross Margin 4,123 2,785 48.0 Personnel, net (436) (260) 67.7 Other Expenses, net (803) (599) 34.1 EBITDA 2,884 1,926 49.7 Depreciation (957) (534) 79.2 Provisions (107) (21) - Op
Slide 17: Consolidated EBITDA by Activity
Consolidated EBITDA by Activity (€ million) 489 55 2,884 +49.7% 1.9% 804 17.0% 27.9% 402 1,133 13.9% 39.3% Gas Electricity Electricity Gas Other TOTAL Distribution Distribution 17
Slide 18: Consolidated Investments Tangible and Intangible
Consolidated Investments Tangible and Intangible (€ million) 9M09 9M08 Gas: 123 24 Up + Midstream 110 18 By Activity Wholesale & Retail 10 6 UF Gas 3 - Other Electricity: 555 200 Gas 3.2% Distribution Spain 469 177 10.0% 41.6% International 86 23 Gas Distribution: 327 399 Spain 231 272 International
Slide 19: Net Debt Evolution
Net Debt Evolution (€ million) 21,919 (941) (1,052) Tariff deficit1 19,926 Impact from asset disposals agreed to date2 Leverage Leverage 63.3% 61.0% 30/09/09 Estimate after executed actions On track towards ~ €18 billion Net Debt target for year-end 2009 Notes: 1 As per actual CNE data up to settlem
Slide 20: Gross Debt Maturity Profile
Gross Debt Maturity Profile Gross debt (€20,872 million1) maturity schedule estimated after executed actions (€ million) 5,018 3,203 6,883 3,619 2,625 2,869 1,880 1,399 1,019 578 2009 2010 2011 2012 2013 Post 2013 Acquisition facility Acquisition loan down to €6,244 million1 from original €19 billio
Slide 21: Analysis of Results (Pro-forma)
Analysis of Results (Pro-forma) 21
Slide 22: Pro-forma EBITDA Breakdown
Pro-forma EBITDA Breakdown1 Pro-forma Pro-forma Change (€ million) 9M091 9M081 €m % Gas: 580 679 (99) (14.4) Up + Midstream 134 120 14 11.7 Wholesale & Retail 290 316 (26) (8.2) UF Gas 156 243 (87) (35.8) Electricity: 1,163 1,138 25 2.2 Spain 809 799 10 1.3 International 354 339 15 4.1 Gas distribut
Slide 23: Gas: Up + Midstream
Gas: Up + Midstream EBITDA (€ million) High capacity charge component offsets 25% lower gas volumes through Maghreb +11.7% pipeline (EMPL) 134 120 LNG fleet increases utilization ratio to 97% Exploration projects under development in Northern Africa (Tangiers-Larache) and Spain Italy: final
Slide 24: Gas: Wholesale & Retail (I)
Gas: Wholesale & Retail (I) GAS NATURAL’s sales in Spanish liberalized market (GWh) 104.8 -4.1% 100.5 164,208 -11.0% 146,128 Lower CCGT-based generation volumes and a drop in economic activity lead to a 11% drop in Spanish liberalized market sales -36.0% 83,783 90% of gas sold under contracts in
Slide 25: Gas: Wholesale & Retail (II)
Gas: Wholesale & Retail (II) GAS NATURAL’s international sales (GWh) 38,496 -3.6% 37,125 Own flexible LNG portfolio and +3.3% 13,840 transportation infrastructure allows 13,404 expansion of international markets to South America -43.0% 11,796 20,689 Customer portfolio in France grows +335% to re
Slide 26: Gas: Wholesale & Retail (III)
Gas: Wholesale & Retail (III) Quarterly gas sales (GWh) Quarterly EBITDA (€m) 83,804 173 67,341 68,941 140 66,364 57,714 59,175 100 76 59 58 1Q 2Q 3Q 1Q 2Q 3Q 2008 2009 Results in 9M09 mainly affected by lower demand volumes 5.1 million retail customers bring sales with a seasonal profile 3Q08
Slide 27: Gas: UF Gas
Gas: UF Gas EBITDA (€ million) Sales (GWh) -35.8% 59,452 -15.3% 50,334 243 18,580 -43.1% 10,581 156 -2.7% 40,872 39,753 9M08 9M09 9M08 9M09 Pro-forma2 Pro-forma2 Pro-forma1 Pro-forma1 Spain Trading Lower commercial and industrial sales in Spain almost offset by CCGT sales EBITDA impacted by lower
Slide 28: Electricity (I): Spain
Electricity (I): Spain Total GAS NATURAL production (GWh) 37,404 -22.6% 28,937 1,634 1,917 1,383 (+18.1%) 2,310 (+20.5%) 3,177 3,005 (-5.4%) 5,284 1,611 (-69.5%) 25,643 20,377 (-20.5%) 9M08 Pro-forma1 9M09 Pro-forma1 CCGTs Other thermal Nuclear Hydro Special Regime Average pool price of €39.3/MWh
Slide 29: Electricity (II): International
Electricity (II): International Total production (GWh) Production figures rise for Mexican CCGTs after higher demand from CFE, 22,970 +3.1% 23,672 allowing for a 75.9% load factor with an availability of 91.5% -11.8% 5,846 5,157 New Durango 450 MW CCGT is 92% completed, with commissioning +8.1%
Slide 30: Electricity (III): Operating Results
Electricity (III): Operating Results EBITDA (€ million) +2.2% EBITDA in Spain grows 1.3% despite lower 1,138 1,163 production and pool prices thanks to the -2.5% coverage given to power generation by 200 195 commercialisation contracts and CCGT +14.4% gas supply contracts linked to pool prices 139
Slide 31: Gas Distribution in Spain
Gas Distribution in Spain Operating figures 5,923 +2.1% 5,803 198,558 -15.8% 167,237 Connection points grow by 120,000 YoY despite slowdown in residential construction 184,458 -9.0% 167,868 Distribution network grows +5.1% to a total of 50,346 km Regulated remuneration for 2009 set at 14,100 €
Slide 32: Gas Distribution in Italy
Gas Distribution in Italy Operating figures EBITDA (€ million) +4.9% 409 390 +79.2% 43 +24.3% 2,518 24 2,025 348 +100.0% 174 2,170 1,851 +17.2% 9M08 9M09 9M08 9M09 Tariff Sales (GWh) TPA Sales (GWh) Connections (thousands) as of 30/09 EBITDA growth in the period favoured by a higher remuneration u
Slide 33: Gas Distribution in Latin America
Gas Distribution in Latin America Operating figures EBITDA contribution and +3.1% 5,369 growth by country 5,208 (Total €372 million, +4.5%) 154,157 -16.9% 128,047 Mexico Argentina €51 million €30 million (+0.6%) (+3.4%) -24.5% 108,791 82,149 +1.2% 45,366 45,898 Colombia Brazil €113 million €178 mill
Slide 34: Electricity Distribution in Spain
Electricity Distribution in Spain Operating figures 3,546 3,502 +1.3% 27,015 -9.9% 24,332 Lower electricity sales as a result of the decrease in consumption in the country -50.6% 17,996 8,888 End of regulated tariff on 1 July 2009 TIEPI down 23.6% to 42 minutes2 +71.2% 15,444 evidences an impr
Slide 35: Electricity Distribution in Latin America
Electricity Distribution in Latin America Operating figures EBITDA contribution and +12.2% 5,057 growth by country 4,507 (Total €249 million, +25.8%)1 13,618 +2.5% 13,955 Guatemala Nicaragua +3.0% €37 million €34 million (+15.6%) (>100%) 5,382 5,543 Panama €49 million +2.1% (+14.0%) 8,236 8,412 Colo
Slide 36: Conclusions
Conclusions 36
Slide 37: Conclusions
Conclusions ● GAS NATURAL continues to show a solid business model ● + 1.0% pro-forma EBITDA despite a challenging environment ● high weighting of regulated activities, business and geographical mix provide stability in earnings ● Successful execution of Unión Fenosa integration ● swift execution, o
Slide 38: A Strategy to Create Value for Shareholders
A Strategy to Create Value for Shareholders ● Annual operating synergies of €350 million and CAPEX Focus on synergies of €200 million beat initial estimates integration ● ~€800m tax synergies identified (NAV) ● Delevering through €3.5 billion capital increase and €3 billion expected asset sales Fina
Slide 39: Thank you
Thank you gasNatural UNION FENOSA 39