Societatea Energetica Electrica S.a. · BVB:EL
Societatea Energetica Electrica — Frontier Investor Days Conference 2021
40 slides from Societatea Energetica Electrica's conference presentation, Sep 3, 2021
Slide 1: Frontier Investor Days Conference
Frontier Investor Days Conference Bucharest, 2 – 3 September 2021
Slide 2: Content
Content 1 H1 2021 Financial results ▪ Key Group Information ▪ Distribution Segment Overview ▪ Supply Segment Overview ▪ The financial impact of the electricity market perspectives evolution on Group’s Activities 2 Status of Group’s Strategy Implementation 3 Main Corporate Events 4 Appendices 2
Slide 3: Summary Consolidated Financials
Summary Consolidated Financials Key Group Information Revenues EBITDA Growth and Margin Performance (RON mn) EBITDA (RON mn) and EBITDA Margin (%) 3,200 3,260 800 25.00% 277 288 700 16.97% 20.00% 15.17% 600 10.96% 15.00% 500 10.09% 1,542 1,564 10.00% 400 2,923 128 2,972 137 5.00% 300 486 0.00% 200 1
Slide 4: Consolidated EBITDA and net result evolution
Consolidated EBITDA and net result evolution Key Group Information Comments EBITDA (RON mn) The consolidated EBITDA variation H1 2021 vs. H1 2020 is RON -128 mn, being mostly the cumulated effect of the factors below: ❑ The negative variation of the energy margin RON -101 mn, thereof: • RON +103.5 m
Slide 5: Distribution segment - highlights
Distribution segment - highlights Distribution segment overview Key figures H1 2021 Financial results EBITDA increased by RON 80.8 mn (+28.3%), mainly due to the evolution of: ▼ revenues RON -93.5 mn (-6.8%), being mainly the net effect of the electricity revenues increase by ~3.82 million RON 109.2
Slide 6: DEER - TN
Distribution segment overview DEER - TN Key figures H1 2021 Network losses cost Network losses (RON mn) (GWh) 378 ~1.32 mn 343 users 120 110 70,525 km 34,162 km2 voltage lines coverage area 149 49 125 RAB: RON 2.0 bn (est.) 36 2.89 TWh (+8.7%) distributed energy H1 2020 Q2 2020 H1 2021 Q2 2021 H1 20
Slide 7: DEER - TS
Distribution segment overview DEER - TS Key figures H1 2021 Network losses Network losses cost (RON mn) (GWh) 121 382 ~1.17 million 113 361 users 58,302 km 34,072 km2 voltage lines coverage area 48 148 38 129 RAB: RON 1.8 bn (est.) 3.27 TWh (+8.8%) distributed energy H1 2020 Q2 2020 H1 2021 Q2 2021
Slide 8: DEER - MN
DEER - MN Distribution segment overview Key figures H1 2021 Network losses cost Network losses (RON mn) (GWh) ~1.32 million 426 users 135 384 122 71,669 km 28,962 km2 voltage lines coverage area 162 46 46 138 RAB: RON 2.0 bn (est.) 3.04 TWh (+9.8%) distributed energy H1 2020 Q2 2020 H1 2021 Q2 2021
Slide 9: The financial impact of the electricity market perspectives evolution - distribution
The impact of the electricity market evolution on the distribution segment The financial impact of the electricity market perspectives evolution - distribution Evolution of the cost of electricity needed to cover NL Network losses ❑ In H1 2021, the cost of electricity needed to cover NL was higher b
Slide 10: Electrica Serv (SERV) overview
External electricity network maintenance segment - Electrica Serv (SERV) overview General overview Revenues SERV, a wholly-owned subsidiary of ELSA, provides repair and other energy-related services to (RON mn) third parties, as well as various services to the companies within the group (vehicles re
Slide 11: Supply market
Supply market Supply segment overview General overview Overall Market Share – April 2021 Electrica Furnizare The supply market comprises both the competitive segment and the universal service (US) 18.54% and supplier of last resort (SoLR) segment (before 1 January 2021 – market liberalization, Other
Slide 12: Supply segment – Electrica Furnizare
Supply segment – Electrica Furnizare Supply segment overview Key figures (H1 2021) Financial results Coverage EBITDA significantly decreased by RON 197 mn compared to H1 2020, mainly following the evolution of the factors below: ▲ revenues increase of RON 192 mn, mainly as a result of the retail sal
Slide 13: Supply - key aspects
Supply - key aspects Supply segment overview Volume of Electricity Supplied on Retail Market H1 2021 (TWh) Number of consumption places as of H1 2021 (ths) Competitive Universal service Competitive Universal service 9.2 9.3 3,553 3,569 3,583 3,514 269 280 314 4.4 4.2 1,244 4.6 4.6 2.1 3,284 3,289 3,
Slide 14: The financial impact of the electricity market perspectives evolution – supply (1/2)
The impact of the electricity market evolution on the supply segment The financial impact of the electricity market perspectives evolution – supply (1/2) ❑ As of 30 June 2021, the supply segment recorded a 2.2% increase in the electricity supplied volumes compared to the budget, as a result of the m
Slide 15: The financial impact of the electricity market perspectives evolution – supply (2/2)
The impact of the electricity market evolution on the supply segment The financial impact of the electricity market perspectives evolution – supply (2/2) Receivables’ analysis ❑ The total value of receivables balance increased by 9.7%, from RON 1,203 mn as of 31 December 2020 to RON 1,320 mn as of 3
Slide 16: Group liquidity
COVID-19 impact on Group’s activities Group liquidity ❑ At Group level, the total liquidity available in cash and overdraft limits as of 30 June 2021 was RON 863 mn, which is in line with the levels recorded at the end of previous quarters, taking into account that on 23 June 2021, ELSA transferred
Slide 17: Dividend distribution
Dividend distribution Dividends Distributed gross dividends (FY 2014 - 2020) (RON mn) Gross dividend per share (RON) and Dividend yield(1) (%) 291.6 6.9% 7.3% 6.9% 244.7 251.4 245.4 247.5 246.1 247.9 6.8% 5.2% 6.1% 0.8600 5.4% 0.7217 0.7415 0.7237 0.7300 0.7248 0.7300 2014 2015 2016 2017 2018 2019 2
Slide 18: Status of Group's Strategy Implementation (1/2)
Status of Group’s Strategy Implementation Electrica Group has made significant steps in implementing the strategy for the period 2019-2023 (1/2) I Expanding in related fields • Inorganic growth – the first acquisition • Organic growth – continues the efforts to and obtaining synergies finalized in 2
Slide 19: Status of Group's Strategy Implementation (2/2)
Status of Group’s Strategy Implementation Electrica Group has made significant steps in implementing the strategy for the period 2019-2023 (2/2) III Continuing investments to improve the reliability of • Electrica Group continues investments in the modernization and development of distribution netwo
Slide 20: Main events in H1 2021 and up to date (1/2)
Main events in H1 2021 and up to date (1/2) Main Corporate Events ELSA’s General Meetings of Shareholders dated 28 April 2021: ▪ Annual OGMS – mainly the following have been approved: ✓ the 2020 individual and consolidated financial statements and the 2021 individual and consolidated budget; ✓ the p
Slide 21: Main events in H1 2021 and up to date (2/2)
Main events in H1 2021 and up to date (2/2) Main Corporate Events Important decisions of the BoD: ▪ 26 February 2021 – approval of the consolidated value of the Investment Plan (CAPEX) of the Group for 2021, in total amount of RON 712.4 mn. Out of this value, RON 638.9 mn represents the investment p
Slide 22: Appendices
Appendices Curectrica 22
Slide 23: Group structure
Group structure Electrica Group is the only Romanian group listed on the BSE & LSE and operates within distribution, supply & energy service segments Distributie Energie Electrica 100 % 99.99 %2) Electrica Furnizare S.A. Romania S.A. Distribution Operator Electricity and natural gas HQ: Cluj-Napoca
Slide 24: Important Regulatory Changes – Distribution Activity
Important Regulatory Changes – Distribution Activity ❑ RP4 Regulations on Distribution tariffs • RRR: ANRE approved Order no. 75 of 6 May 2020, which established a regulated rate of return (RRR) for electricity and gas, distribution and transmission of 6.39% for the existing RAB, until the end of th
Slide 25: Changes in Distribution Regulation - RP4
Changes in Distribution Regulation - RP4 Regulated Revenue and tariff calculation 1 2 3 4 5 6 7 8 7 Regulated Revenue Reactive en. Regulated Contr. Non- Tariff NL Cost Depreciation RRR2 & 95% profit Revenue OPEX1 controllable other activ. 9 Forecasted Volume OPEX 1 • The starting point is approved b
Slide 26: Changes in Distribution Regulation
Changes in Distribution Regulation Methodology for determining distribution tariffs - Summary RP4 vs RP3 RP3 RP4 1 RRR January 2019: 5.66% existing RAB & 1% incentive RP4 network invest.(acc. ANRE) Return RRR (7.7%) applied to RAB 29 March 2019–30 April 2020: 6.9% total RAB (acc. GEO 19/2019 & GEO 1
Slide 27: Changes in Distribution Regulation: Comparative elements RP4 vs RP3
Changes in Distribution Regulation Methodology for determining distribution tariffs – Comparative elements RP4 vs RP3 RAB & Investment RP3 methodology RP4 methodology 1. RAB includes: assets used for the distribution service, which are recorded into the DSOs accounts as tangible assets and are physi
Slide 28: Changes in Distribution Regulation: Opex & NL
Changes in Distribution Regulation Methodology for determining distribution tariffs – Comparative elements RP4 vs RP3 Opex & NL RP3 methodology RP4 methodology Controlable OPEX 1. OpexC 2019 is established based on formula (approved 1. OpexC 2019 is not established based on formulae, but by comparat
Slide 29: Regulatory-related Developments – Supply – H1 2021 (1/3)
Regulatory-related Developments – Supply – H1 2021 (1/3) New consumer information obligations for suppliers of last resort (SoLRs) in the process of liberalization of electricity market (ANRE Order No. 5/2021 Market changing ANRE Order No. 171/2020) : liberalization - Until 30 June 2021, accompanyin
Slide 30: Regulatory-related Developments – Supply – H1 2021 (2/3)
Regulatory-related Developments – Supply – H1 2021 (2/3) Re-defining electricity long-term contracts negotiable bilaterally, over-the-counter (ANRE Order No. 26/2021 changing ANRE Order No. 65/2020): Wholesale - Any contract with a min. 1-month duration (as compared to at least 1-year long duration
Slide 31: Regulatory-related Developments – Supply – H1 2021 (3/3)
Regulatory-related Developments – Supply – H1 2021 (3/3) Tariffs Approval of electricity transmission and system service tariffs, enforced as of 1 March 2021 (ANRE Order No. 10/2021) - 9.5% decrease in the system service tariff; transmission tariff kept the same Related Renewal of Electrica Furnizar
Slide 32: Leading Player in Distribution and Supply according to ANRE's most recent annual report
Leading Player in Distribution and Supply according to ANRE’s most recent annual report Distribution Supply Volumes Distributed in 2020 Volumes Supplied in 2020 13.1% SDMN 19.25% SDTS 14.0% Electrica Furnizare SDTN 48.3 TWh 44.1 TWh Others Others 60.4% 12.5% 80.75% Electrica: 39.6% Regulated Market
Slide 33: Corporate Governance Bodies
Corporate Governance Bodies • Mr. Iulian Cristian Bosoanca – Chair • Mr. Gicu Iorga Board of Directors • Mr. Ion – Cosmin Petrescu Current • Mr. Adrian – Florin Lotrean Composition • Mr. Radu – Mircea Florescu • Mr. Dragos – Valentin Neacsu • Mr. George Cristodorescu • All board members are non-exec
Slide 34: Shareholder Structure as of 30 June 2021
Shareholder Structure as of 30 June 2021 Percent of share Shares with voting Shareholder Shares capital right Romanian State through the Ministry of Energy 169,046,299 48.7948% 49.7850% EBRD 17,355,272 5.0096% 5.1112% Electrica 6,890,593 1.9890% 0% Bank of New York Mellon - GDRs 2,693,556 0.7775% 0.
Slide 35: Monthly volume and average price of Electrica's shares and GDRs
Monthly volume and average price of Electrica’s shares and GDRs 30,200,000 30,089,933 14 2,906,873 2,894,263 13 2,800,000 2,730,355 12 2,600,000 11 2,400,000 2,281,172 2,199,260 10 2,200,000 2,114,286 2,000,000 9 1,800,000 1,796,076 1,755,148 1,799,309 8 1,578,892 1,550,993 1,600,000 7 1,389,465 1,3
Slide 36: Electrica's adjusted closing price vs BET-TR (January 2020 – 30 July 2021)
Electrica’s adjusted closing price vs BET-TR (January 2020 – 30 July 2021) 40.00 30.00 EL: 24.6% BET-TR: 29.4% 20.00 10.00 0.00 -10.00 -20.00 -30.00 BET-TR Electrica's price adjusted with dividends Source: Company’s data, BSE 36
Slide 37: Glossary
Glossary LV Low Voltage AMR Automatic Meter Reading MP Merger Plan ANRE Romanian Energy Regulatory Authority MV Medium Voltage B2B Business to Business MWh MegaWatt hour B2C Business to Consumer NBV Net Book Value BET-TR Bucharest Exchange Trading - Total Return Index NL Network Losses BoD Board of
Slide 38: 2021 Financial Calendar
2021 Financial Calendar • 26 February Publication of the 2020 financial annual consolidated and individual preliminary results • 5 March Publication of the 2020 financial annual results - documents for the Ordinary General Meeting of Shareholders • 8 March Investor and analyst teleconference for 202
Slide 39: Investor Relations & Disclaimer
Investor Relations & Disclaimer • Email: ir@electrica.ro • Web: https://www.electrica.ro/en/investors/ Investor Relations • Tel: +40 (0)21.208.50.35 • Address: 9 Grigore Alexandrescu Str., 1st District, Bucharest, 010621 This document was prepared by Electrica for the presentation of H1 2021 financi
Slide 40: Q&A
Q&A 40
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