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Edp — Energias de Portugal — H1 2013 Earnings Presentation

32 slides from Edp's earnings presentation, Jul 26, 2013

  1. Slide 1: Results Presentation 1H13

    Results Presentation 1H13 Lisbon, July 26th, 2013 0

  2. Slide 2: Disclaimer

    Disclaimer This document has been prepared by EDP ‐ Energias de Portugal, S.A. (the "Company") solely for use at the presentation to be made on the 26th of July 2013 and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where this

  3. Slide 3: 1H13: Highlights of the period

    1H13: Highlights of the period EBITDA 1H13: €1,957m, +4% YoY Iberia: high volumes of hydro and wind power production in 1Q13 and 2Q13 (hydro factor 1.28 in 1H13) Power prices in Iberia in 2Q13 were even lower than in 1Q13 Portugal: no capacity payments, lower RoRAB in distribution; Spain: new genera

  4. Slide 4: 1H13: Highlights of the period

    1H13: Highlights of the period Net debt decreased €0.5bn (‐3%) YTD to €17.7bn by Jun‐13 €671m annual dividend (€0.185 per share) fully paid in cash to EDP shareholders in May‐13 Tariff deficits: Successful securitisation in Portugal of €714m in 2Q13 + €249m deals in Spain over 1H13 Post securitisati

  5. Slide 5: Weather and market prices in Iberia

    Weather and market prices in Iberia: Hydro & Mini‐Hydro Power Production – Portugal (1) Avg. Pool Price in Spain (TWh) (€/MWh) 4.8 1Q Hydro Coefficient 4.0 48.4 2Q 37.3 1H 1.0 1.3 50.6 46.1 40.3 34.2 1Q12 2Q12 1Q13 2Q13 0.19 0.47 1.25 1.31 2012 2013 Portugal wind production factor Electricity demand

  6. Slide 6: 1H13 Operating Headlines: Hydro & wind 75% of power production

    1H13 Operating Headlines: Hydro & wind represented 75% of EDP’s power production Installed Capacity Generation Breakdown by Technology (GW) (TWh) +1% +16% 22.5 22.7 32.2 Other (1) 7% 3% 1.2 Other (1) 13% 27.8 ‐22% Coal 12% 6.3 Coal 1.6 ‐16% 0.4 CCGT 17% 16% CCGT 7.5 ‐71% 1.5 13.5 Hydro Hydro 33% 34%

  7. Slide 7: EBITDA 1H13: Breakdown by division

    EBITDA 1H13: Breakdown by division EBITDA Breakdown by division (€ million) % Chg. YoY +4% €1,885m €1,957m Liberalized Activities Iberia 10% +28% 12% EDP Brasil 16% ‐9% 14% EDP Renováveis 27% +11% 29% 88% Regulated 26% +4% 26% Networks Iberia (1) LT Contracted 21% ‐7% 19% Generation Iberia 1H12 1H13

  8. Slide 8: 1H13 EBITDA: Breakdown by market

    1H13 EBITDA: Breakdown by market EBITDA Breakdown by Major Subsidiaries: 1H13 vs. 1H12 EBITDA Breakdown by Geography (2): 1H13 vs. 1H12 (%) (%) ∆ % 1H12‐1H13 Rest of Europe +10% 1H12 1H13 Var. % Var. Abs. 4% 5% Brazil 16% ‐8% 14% EDP Brasil 298 272 ‐9% ‐26 USA 10% +8% 11% EDP España 330 372 +13% +42

  9. Slide 9: Operating costs: Opex/Gross Profit at 26% in 1H13

    Operating costs: Opex/Gross Profit(1) at 26% in 1H13 Operating costs (2) : 1H13 vs. 1H12 1H13 YoY Inflation (3) (€ million) (%) Brazil EDPR Iberia +2% 789 771 7.3% 147 153 +4% 149 161 +8% +0% 2.2% 475 475 0.4% 1H12 1H13 Portugal Espanha Brasil (IGP‐M)  Iberia: Operating costs flat YoY, below inflat

  10. Slide 10: Capex: Execution of Selective Growth

    Capex: Execution of Selective Growth Consolidated Capex by technology (1) (€ million) ‐8% €690m €635m 113 Expansion generation Brazil 115 Expansion Hydro Portugal 178 245 Expansion Wind 113 (2) 104 Maintenance 288 266 ‐92 (3) 1H12 1H13 Capex ‐8% YoY, or +5% YoY excluding €92m cash grant in US Higher

  11. Slide 11: Net regulatory receivables by Jun-13

    Net regulatory receivables by Jun-13 Regulatory Receivables (€ million) +€42m 2,710 2,753 2,311 2,197 2,288 1,803 Portugal(2) Spain 470 38 424 365 Brazil (1) 89 100 Jun‐12 Dec‐12 Jun‐13 Portugal: +€91m (tariff deficit/deviations of +€805m in 1H13, securitisations done by EDP ‐€714m) Spain: ‐€59m (ta

  12. Slide 12: Regulatory receivables in Portugal: Breakdown of 1H13 evolution

    Regulatory receivables in Portugal: Breakdown of 1H13 evolution Regulatory Receivables in Portugal A (€ billion)  Special regime production: +25% YoY in 1H13 abnormally high wind and mini‐hydro volumes  Low pool price in 1H13: Higher costs with A B C special regime premiums and with CMEC 0.7  Pos

  13. Slide 13: Net debt

    Net debt EDP consolidated net debt position: Jun‐13 EDP consolidated debt by currency: Jun‐13 (€ million) (%) PLN 7% raised at EDP Brasil USD 1% 17,687 Bank loans and capital markets; 19% Ring‐fenced policy essentially ‘non‐ EDP Brasil 1,257 recourse’ to EDP S.A. BRL 8% EDP Renováveis 554 72% 3% rai

  14. Slide 14: Change in Net debt

    Change in Net debt Change in Net Debt: Jun‐13 vs. Dec‐12 (€ billion) ‐0.5 Regulatory 18.2 1.7 Receivables 0.7 17.7 0.0 0.4 2.7 2.8 15.5 14.9 Net Debt Free Cash Regulatory Expansion Dividends Paid Net Debt Dec‐12 Flow (1) Receivables and Capex & Jun‐13 Securitizations Net Invest. (2) Net debt decreas

  15. Slide 15: Net Debt Profile

    Net Debt Profile EDP consolidated debt maturity profile (€ billion) Impact Jan‐13 Credit Facility (€645m) Adjusted Avg. Debt Commercial paper Maturity (2): 3.9 years Other subsidiaries(1) EDP SA + BV Brazil: €199M Project Finance: €63M 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2013 2014 2015 2016 2017 2018 20

  16. Slide 16: Financial Liquidity position

    Financial Liquidity position (€ million) Sources of liquidity (Jun‐13) Maximum Number of Instrument Utilised Available Maturity Amount counterparties Revolving Credit Facility 2,000 21 150 1,850 03‐11‐2015 Domestic Credit Lines 159 8 0 159 Renewable Underwritten CP Programmes 150 1 0 150 Renewable T

  17. Slide 17: Main sources and uses of funds

    Main sources and uses of funds Sources of funds Use of funds  Cash & Equivalents (Jun‐13) : €1.7bn  Refinancing needs in 2013: RCF maturing in Nov‐13 €1.1bn  Available Credit Lines (Jun‐13): €2.8bn Bond maturing in Dec‐13 €0.35bn Loans maturing in 2013: €0.1bn Total 2013 €1.6bn  Refinancing need

  18. Slide 18: Net Profit breakdown

    Net Profit breakdown (€ million) 1H12 1H13 ∆% ∆ Abs. New capacity in EDPR and new hydro in EBITDA 1.885 1.957 +4% +72 Portugal partially offset by decommissioning of Setúbal oil plant Net Depreciations and 711 742 +4% +32 Provisions EBIT 1.174 1.214 +3% +40 Financial Results & (340) (314) ‐8% +26 As

  19. Slide 19: Business Areas

    Business Areas

  20. Slide 20: Iberia: Electricity and Thermal power demand

    Iberia: Electricity and Thermal power demand Electricity Demand in Iberian Market Thermal Power Production in Iberian market (% YoY) (TWh) % Weight in Iberia in 1H13 ‐50% 56 5 100% 17% 83% 18 Iberian 10 Market Portugal Spain 5 28 ‐1.7% ‐3.4% ‐3.8% 1H12 Demand Chg. Hydro Chg. Special Nuclear & 1H13

  21. Slide 21: Liberalised Energy Activities Iberia (12% EBITDA)

    Liberalised Energy Activities Iberia (12% EBITDA) EDP Liberalised Power Plants Iberia – Production EDP Coal vs. CCGT – Load factors in 1H12 and 1H13 (TWh) (%) 1H12 1H13 +1% 6.2 6.3 Nuclear 9% ‐7% 8% Hydro 17% 49 2.8x 47% 38 Coal 50% ‐24% 38% 9 CCGT 24% ‐71% 3 7% 1H12 1H13 Coal CCGT Production +1%; h

  22. Slide 22: Liberalised Energy Activities Iberia (12% EBITDA)

    Liberalised Energy Activities Iberia (12% EBITDA) EBITDA Liberalised Activities in Iberian Market • Negative regulatory developments: No thermal (€ million) capacity payments in Portugal (vs. €19m in 1H12), new generation taxes in Spain (€29m in 1H13). • Deterioration of thermal plants profitability

  23. Slide 23: Long Term Contracted Generation Iberia (19% of EBITDA)

    Long Term Contracted Generation Iberia (19% of EBITDA) EBITDA LT Contracted Generation (€ million) PPA/CMEC Special regime ‐7% 402 +64% 372 ‐13% 1H12 1H13  PPA/CMEC: decommissioning of Setubal fueloil plant in Dec‐12 (EBITDA 1H12: €56m)  Special regime: +2.2x YoY increase of mini‐hydro production

  24. Slide 24: Regulated Energy Networks Iberia (26% of EBITDA)

    Regulated Energy Networks Iberia (26% of EBITDA) EBITDA Adjusted EBITDA (1) (€ million) (€ million) Gas Iberia Gas Iberia Electricity Spain Electricity Spain Electricity Portugal Electricity Portugal +0% ‐7% 520 522 502 466 +26% ‐2% ‐7% ‐7% ‐9% ‐9% 1H12 1H13 1H12 1H13  Electricity Portugal: RoRAB d

  25. Slide 25: EDP Renováveis (29% of EBITDA): Strong growth from new capacity

    EDP Renováveis (29% of EBITDA): Strong growth driven by new installed capacity Installed Capacity Wind Power Production EBITDA (MW) (GWh) (€ million) Iberia USA Other (1) +8% +11% +8% 10,716 560 9,918 504 7,759 7,169 +20% 37% 46% 34% +13% 38% 45% 39% +4% 10% +14% 10% +29% 15% +14% 17% 13% 16% 57% 0%

  26. Slide 26: Brazilian Electricity System: Positive developments in 2Q13

    Brazilian Electricity System: Positive developments in 2Q13 Spot prices vs. hydro reservoir levels and thermal generation in Southeast ‐ Central West region (R$/MWh; %; Avg. TW) Regulatory receivables in Distribution Spot market prices ‐ PLD1 (1) Reservoir levels Thermal generation DisCos with invol

  27. Slide 27: EDP Brasil (14% of EBITDA) EBITDA +1% YoY in local currency

    EDP Brasil (14% of EBITDA) EBITDA +1% YoY in local currency EDP Brasil EBITDA EDP Brasil Adjusted(1) EBITDA (BRL million) (BRL million) Generation & Other Distribution Generation & Other Distribution ‐1% +1% 889 877 719 727 432 ‐9% 393 263 +32% 346 457 ‐17% 457 +6% 484 381 1H12 1H13 1H12 1H13  EBIT

  28. Slide 28: Outlook

    Outlook

  29. Slide 29: Spanish Electricity Sector: New regulatory proposals announced in Jul-13

    Spanish Electricity Sector: New regulatory proposals announced in Jul-13 Impact on System Costs Impact on EDP Action Areas Main Measures 2013E 2014E 2013E 2014E Tariffs €0.4bn €0.9bn  Access tariff to increase +6.5% (+3.2% in avg. total tariff) Public Budget Funding €2.2bn €0.9bn  Transfer of fund

  30. Slide 30: Outlook for 2013

    Outlook for 2013 EBITDA Breakdown (%)  1H13 marked by strong hydro resources and successful energy management Liberalized 12% 9%  2H13: further regulatory cuts in Spain (capacity payments, etc.) Activities Iberia Brazil 14% 18%  Pecém coal plant: fully operational in 2H13  Distribution tariff up

  31. Slide 31: A resilient business model in a challenging environment

    A resilient business model in a challenging environment Sound performance  EBITDA: +4% enhanced by  Cost of debt: 4.2% in 1H13 (vs. 4.0% in 1H12) diversification  Net Profit/EPS: +4% Profitable Growth  Expansion capex driven by new capacity: Hydro Portugal, generation Brazil, wind (out of Iberia

  32. Slide 32: IR Contacts

    IR Contacts Miguel Viana, Head of IR Sónia Pimpão Elisabete Ferreira Ricardo Farinha Pedro Coelhas Noélia Rocha E‐mail: ir@edp.pt Phone: +351 210012834 Visit EDP Website Next Events Site: www.edp.pt July 25th: 1H13 Results Link Results & Presentations: September 11th: BBVA Conference (London) http:/

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