Romande Energie Holding SA · SIX:REHN
Romande Energie Holding SA — FY2016 Earnings Presentation
36 slides from Romande Energie Holding SA's earnings presentation, April 2017
Slide 1: 2016 Results
2016 RESULTS Pierre-Alain Urech, CEO Denis Matthey, CFO
Slide 2: Outline
OUTLINE 1. Energy-industry and economic backdrop 2. 2016 financial results 3. Achievements and outlook www.romande-energie.ch © Romande Energie 2
Slide 3: Energy-industry and economic backdrop
ENERGY-INDUSTRY AND ECONOMIC BACKDROP www.romande-energie.ch © Romande Energie 3
Slide 4: A fully deregulated energy market
A FULLY DEREGULATED ENERGY MARKET EEX forward EEXprices sincePrice Forward 1 January 2014 depuis le 01.01.2014 Evolution Peak 2015 PEAK 2016 PEAK 2018 PEAK 2019 PEAK 2020 Base 2015 • Significant BASE 2016 BASE 2017 BASE 2018 BASE 2019 BASE 2020 PEAK 2017 volatility in [€/MWh] 2016 50 50 48 48 46 46
Slide 5: Upshot of market conditions
UPSHOT OF MARKET CONDITIONS • Swiss hydropower is no longer profitable as generation often costs twice as much as the market price • The support pledged by the Swiss Parliament for the next six years is not enough to keep it afloat • This situation jeopardises new investments • Other renewable-energ
Slide 6: Upshot of market conditions
UPSHOT OF MARKET CONDITIONS • Large power generators in Switzerland and the EU (such as Alpiq and Axpo) are still facing considerable challenges Case of Alpiq, in which Romande Energie holds an equity interest: • Alpiq is still seeking to divest 49% of its Swiss hydropower portfolio. Romande Energie
Slide 7: Energy Strategy 2050 at risk
ENERGY STRATEGY 2050 AT RISK Phase-out of nuclear power, with no deadline • Strategy subject to referendum Development of green power generation on 21 May • Romande Increased energy efficiency Energie is campaigning in support of Importing the strategy www.romande-energie.ch © Romande Energie 7
Slide 8: EU negotiations at a standstill
EU NEGOTIATIONS AT A STANDSTILL • Negotiations for an energy agreement not making any headway • The grids agreement is also on hold, putting Switzerland at risk of isolation • The Federal Council has once again postponed the date of full liberalisation for the Swiss electricity market www.romande-en
Slide 9: New challenges to the grid system
NEW CHALLENGES TO THE GRID SYSTEM • Development of decentralised production and self-generation Vital to adapt power networks to manage these new power flows • Lower WACC from 1 January 2017 (Weighted Average Cost of Capital) o From 4.70% to 3.83% o Romande Energie’s revenues set to drop by some CHF
Slide 10: 2016 Financial results
2016 FINANCIAL RESULTS www.romande-energie.ch © Romande Energie 10
Slide 11: 2016 Results in summary
2016 RESULTS IN SUMMARY The year in figures • Solid revenues (>CHF 600m) and business profits • Alpiq reverts to profitability • Significant gain in net profit • Consistently high cash flow from operations Thanks to these solid results, Romande Energie can • Continue expanding • Achieve its strategi
Slide 12: Key figures – 2016
KEY FIGURES – 2016 CHF 000 2016 2015 ∆ Net revenues 602 025 599 964 0.3% Gross profit 285 100 304 522 -6.4% As % of net revenues 47% 51% EBITDA 151 189 161 611 -6.4% As % of net revenues 25% 27% EBIT 97 166 104 597 -7.1% As % of net revenues 16% 17% Share of profit of associates 29 469 ( 71 985) nr
Slide 13: Steady growth and sizeable cash generation
STEADY GROWTH AND SIZEABLE CASH GENERATION 143,554 www.romande-energie.ch © Romande Energie 13
Slide 14: Breakdown of revenues
BREAKDOWN OF REVENUES 2016 2015 www.romande-energie.ch © Romande Energie 14
Slide 15: Changes to consolidation scope dent business performance
CHANGES TO CONSOLIDATION SCOPE DENT BUSINESS PERFORMANCE CHF m -6.4% 162 ( 9) 9 ( 4) ( 3) ( 4) 151 Investment property Personnel expenses FMHL FGB Other 15 16 20 20 A A D D IT IT EB EB www.romande-energie.ch © Romande Energie 15
Slide 16: EBITDA by business unit
EBITDA BY BUSINESS UNIT Networks Marketing Energy Energy Services -0.5% 95 665 95 162 -2.8% -30.3% 34 858 24 676 23 993 24 291 -3.4% 2015 2016 2015 2016 2015 2016 (3 420) (3 542) CHF 000 2015 2016 Comments • Change in consolidation relating to FGB and profit from power management impact Energy • Oth
Slide 17: Significant gain in net profit
SIGNIFICANT GAIN IN NET PROFIT CHF 000 29 469 113 574 ALPIQ (13 061) 97 166 Income taxes + Financial results Net profit for the year EBIT 2016 www.romande-energie.ch © Romande Energie 17
Slide 18: Alpiq: natural hedge on kWh price trend
ALPIQ: NATURAL HEDGE ON KWH PRICE TREND Share of profit of associates Comment • Encouraging 2016 results www.romande-energie.ch © Romande Energie 18
Slide 19: Romande Energie powerfully solid
ROMANDE ENERGIE POWERFULLY SOLID 2016 2015 2014 2013 2012 Regulated rate of return for grid operation (WACC) 4.70% 4.70% 4.70% 3.83% 4.14% Net cash CHF 000 299 000 316 446 304 748 311 482 356 428 Capital expenditure (CAPEX) CHF 000 88 225 110 835 109 194 103 251 79 373 Total shareholders' equity CHF
Slide 20: Dividend for 2016: increase of CHF 3.00 to CHF 36.00 per share
DIVIDEND FOR 2016: INCREASE OF CHF 3.00 TO CHF 36.00 PER SHARE www.romande-energie.ch © Romande Energie 20
Slide 21: Romande Energie capitalising on its strengths
ROMANDE ENERGIE CAPITALISING ON ITS STRENGTHS Harnessing innovation and leveraging a solid customer culture Focus on three strategic avenues for unlocking strong value 1. Expanding generation network 3 priorities 2. Investing in digitalisation 3. Broadening footprint in energy services industry Incr
Slide 22: Key dates
KEY DATES 30 May 2017 Annual General Meeting in Morges 12 Sept. 2017 H1 2017 results www.romande-energie.ch © Romande Energie 22
Slide 23: Achievements and outlook
ACHIEVEMENTS AND OUTLOOK www.romande-energie.ch © Romande Energie 23
Slide 24: Continued investment in power generation
CONTINUED INVESTMENT IN POWER GENERATION • Priority assigned to regional renewable assets, taking advantage of subsidies • Further acquisition of wind farms and hydropower plants in France • Measures to limit risks and secure IRR Examples from 2016 Acquisition of 5% Two new pump-turbine Concession a
Slide 25: High-grade grids and high-value services
HIGH-GRADE GRIDS AND HIGH-VALUE SERVICES • Offering supply in line with Swiss average – often better • Adapting to new generation and usage methods: fibre optics, smart meters, etc. • Performance culture • Constant focus on security of supply Examples from 2016 Continued replacement Modernisation of
Slide 26: Ushering in the world of smart energy
USHERING IN THE WORLD OF SMART ENERGY ▲ Self-consumption ▲ Decentralised generation ▲ Consumption monitoring and Smart control (in response to customer living expectations) Smart grid Establishment of Microgrid a Smart LAB Smart working Paving the way for new, high-value services Energy Flexibility
Slide 27: Aiming for energy-services top three in Western Switzerland
AIMING FOR ENERGY-SERVICES TOP THREE IN WESTERN SWITZERLAND • 150 employees, 6 months after formation of Romande Energie Services SA • Interdisciplinary expertise in installation, operation and maintenance; turnkey solutions • Growth through acquisitions and equity ties Examples from 2016 Acquisitio
Slide 28: Keeping our customer culture front and centre
KEEPING OUR CUSTOMER CULTURE FRONT AND CENTRE • Ensuring excellent performance in a highly competitive power market • Introducing new offerings, in particular relating to smart energy • Transforming our customer relationships by leveraging multiple communication channels and digital platforms Exampl
Slide 29: Innovation and corporate social responsibility
INNOVATION AND CORPORATE SOCIAL RESPONSIBILITY • Fostering a culture of innovation within the Group • Assessing each business from the standpoint of its economic, environmental and social impact • Respect for all stakeholders and responding to their concerns • Surpassing best practices wherever poss
Slide 30: Conclusion: optimise our responsiveness to the market's needs
CONCLUSION OPTIMISE OUR RESPONSIVENESS TO THE MARKET’S NEEDS Enhance Improve Ensure competitive- customer profitability ness experience Diversify Win market Increase the services and share Group’s value expertise www.romande-energie.ch © Romande Energie 30
Slide 31: 2017… is a year of celebration!
2017… IS A YEAR OF CELEBRATION!
Slide 32: Discover 130 years of Romande Energie
DISCOVER 130 YEARS OF ROMANDE ENERGIE THROUGH FIVE KEY PERIODS www.romande-energie.ch © Romande Energie 32 32
Slide 33: History: public lighting and household appliances
1957 1887 Public lighting illuminates the night for the first time! Household appliances become all the rage… Six months later, the 1st tram in …and power consumption Switzerland begins operating takes off! The average resident uses 35% more electricity in 1970 than in 1960. www.romande-energie.ch ©
Slide 34: Two birthdays to celebrate
Two birthdays to celebrate! 130 years of electricity in the region Romande Energie 20 years of Romande Energie 1997 was formed 2037 2017 And the best is yet to come… FESTIVITIES TO CELEBRATE OUR IN-HOUSE BRAND ALL AND WITH YEAR LONG OUR CUSTOMERS www.romande-energie.ch © Romande Energie 34
Slide 35: Thank you for listening
THANK YOU FOR LISTENING We will be delighted to answer your questions Pierre-Alain Urech Denis Matthey CEO CFO pierre-alain.urech@romande-energie.ch denis.matthey@romande-energie.ch www.romande-energie.ch © Romande Energie 35
Slide 36: Contacts: media relations and investor relations
CONTACTS MEDIA RELATIONS AND INVESTOR RELATIONS We will be delighted to answer your questions Media relations Investor relations Karin Devalte René Lauckner Head of Communications Treasurer +41 (0)21 802 95 67 +41 (0)21 802 95 24 +41 (0)79 386 47 67 karin.devalte@romande-energie.ch rene.lauckner@rom