Cez As · PSECZ:CEZ

Cez As — ČEZ, a. s. — Q1 2012 Earnings Presentation

37 slides from Cez As's earnings presentation, May 10, 2012

  1. Slide 1: Conference Call on Q1 2012 Financial Performance of CEZ Group

    CONFERENCE CALL ON Q1 2012 FINANCIAL PERFORMANCE OF CEZ GROUP NON-AUDITED CONSOLIDATED RESULTS PREPARED IN ACCORDANCE WITH THE INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) (Quarterly report pursuant to Section 119a (4) of the Capital Markets Act) Prague, May 10, 2012

  2. Slide 2: Agenda

    AGENDA Financial highlights and key events in CEZ Group in Q1 2012 Martin Novák, CFO Financial results Martin Novák, CFO Trading position of CEZ Group Michal Skalka, Head of Trading 1

  3. Slide 3: Key Highlights of Q1 2012 and Expected Results for Year 2012

    KEY HIGHLIGHTS OF Q1 2012 AND EXPECTED RESULTS FOR YEAR 2012  earnings before interest, taxes, depreciation and amortization (EBITDA) decreased by 1.1% y-o-y (by CZK 0.3 bn.) to CZK 26.3 bn.  earnings before interest (EBIT) decreased by 3.4% y-o-y (by CZK 0.7 bn.) to CZK 19.8 bn.  net income decr

  4. Slide 4: We Keep the Expected Results for 2012 Unchanged

    WE KEEP THE EXPECTED RESULTS FOR 2012 UNCHANGED CZK bn +1% 100 Highlighted positive factors 80  increased production of power plants in the Czech Republic (+4%) EBITDA 60  increased production of wind farms in Romania 87.3 87.9 40  lower total payment of gift tax on carbon 20 allowances 0 2011 20

  5. Slide 5: The Development of ČEZ, a. s., Shares Outperforms the Competition and the Czech Stock Market

    THE DEVELOPMENT OF ČEZ, A. S., SHARES OUTPERFORMS THE COMPETITION AND THE CZECH STOCK MARKET 120% 100% 80% 60% Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 ČEZ, a. s. Bloomberg Utility Index PX Index Source: Bloomberg 4

  6. Slide 6: ČEZ, a. s., Has Successfully Placed a US Bond Emission Worth USD 1 bn.

    ČEZ, A. S., HAS SUCCESFULLY PLACED A US BOND EMISSION WORTH USD 1 BN. ON THE MOST LIQUID GLOBAL MARKET Volume: USD 300 million What is unique about the ČEZ, a. s., Maturity: 2042 USD bond issue: USD coupon: 5.625% p.a.  the longest maturity of any bond issue in Central and Eastern Europe Interest c

  7. Slide 7: Highlights of the Past Quarter

    HIGHLIGHTS OF THE PAST QUARTER renewal and construction of power plants in the Czech Republic is continuing  on April 20, 2012, the building permit for a comprehensive renewal of the Prunéřov II power plant (3 x 250 MW) has been issued  April 27, 2012: renewal of unit 21 of the Tušimice power plan

  8. Slide 8: Considering a Strategic Partner in Temelín Nuclear Power Plant Completion

    WE ARE CONSIDERING THE INVOLVEMENT OF A STRATEGIC PARTNER IN THE COMPLETION AND OPERATION OF THE TEMELÍN NUCLEAR POWER PLANT Project of new Financing nuclear units of nuclear ETE 3, 4 projects The ETE 3, 4 project is one of the most ambitious CEZ Group is ready to finance the completion of this proj

  9. Slide 9: Dividend Proposal Exceeding CZK 24 bn. to Be Presented at AGM

    ON THE AGM, A PROPOSAL TO PAY DIVIDEND EXCEEDING CZK 24 BN. WILL BE PRESENTED TO SHAREHOLDERS Payout ratio 57% 59% 60% 56% 55% 49% 50%  our dividend policy sets the 50% dividend payout ratio 43% at 50 - 60% of net 40% 41% consolidated profit 40%  the proposed dividend 32% payment for 2011 represen

  10. Slide 10: Agenda

    AGENDA Financial highlights and key events in CEZ Group in Q1 2012 Martin Novák, CFO Financial results Martin Novák, CFO Trading position of CEZ Group Michal Skalka, Head of Trading 9

  11. Slide 11: CEZ Group Financial Results

    CEZ GROUP FINANCIAL RESULTS (CZK bn.) Q1 2011 Q1 2012 Change % Revenues 56.8 60.8 +4.0 +7% EBITDA 26.6 26.3 -0.3 -1% Net income 17.2 14.4 -2.8 -16% Operating CF 5.0 16.1 +11.1 >200% CAPEX 8.9 9.4 +0.5 +6% Net debt 132.1 146.9 +14.8 +11% Q1 2011 Q1 2012 Change % Installed capacity GW 15.0 15.2 +0.2 +

  12. Slide 12: Key Drivers of Y-o-Y Change in Net Income

    KEY DRIVERS OF Y-O-Y CHANGE IN NET INCOME CZK bn. 19 18 17 16 0.3 0.4 0.2 15 17.2 14 2.3 -2.8 CZK bn. 13 14.4 -16.2% 12 Net income EBITDA Depreciation and Other income Income taxes Net income Q1 2011 amortization (expenses) Q1 2012 11

  13. Slide 13: Key Drivers of Y-o-Y Change in EBITDA

    KEY DRIVERS OF Y-O-Y CHANGE IN EBITDA CZK bn. 30 29 1.4 0.3 28 0.2 27 0.8 0.4 26 1.3 25 0.4 1.7 24 28.0 26.6 27.0 26.3 26.6 23 25.3 25.3 25.7 25.7 26.1 22 -0.3 CZK bn. 21 -1.1% 20 EBITDA Change in Change inEmission rights Gross margin: Romania: Gross margin: Gross margin: Distribution EBITDA 1 - 3/

  14. Slide 14: Change of EBITDA Y-o-Y by Segment

    CHANGE OF EBITDA Y-O-Y BY SEGMENT CZK bn. 0.4 0.8 28 0.2 0.1 1.4 27.4 27.6 26.6 26.6 26.2 26.2 26.3 -0.3 CZK bn. -1.1% 23 EBITDA Power Production Power Production Distribution & Sale Distribution & Sale Mining CE EBITDA Q1 2011 & Trading CE & Trading SEE CE SEE Q1 2012 CE = Central Europe SEE = Sout

  15. Slide 15: Power Production & Trading Central Europe

    CONTRIBUTIONS TO EBITDA BY SEGMENT: POWER PRODUCTION & TRADING CENTRAL EUROPE CZK bn. Q1 2011 Q1 2012 Change % Czech Republic 16.3 17.1 +0.8 +5% Poland 0.6 0.6 0.0 0% Total EBITDA 16.9 17.7 +0.8 +5% Czech Republic (CZK +0.8 bn.)  higher gross margin of ČEZ, a. s., (inclusive of the Chvaletice power

  16. Slide 16: Power Production & Trading South-East Europe

    CONTRIBUTIONS TO EBITDA BY SEGMENT: POWER PRODUCTION & TRADING SOUTH-EAST EUROPE CZK bn. Q1 2011 Q1 2012 Change % Bulgaria *0.1 0.0 -0.1 - Romania 0.3 0.8 +0.5 +149% Total EBITDA 0.4 0.8 +0.4 +107% Romania (CZK +0.5 bn.)  y-o-y increase of gross margin due to higher production in the Fântânele and

  17. Slide 17: Distribution and Sale Central Europe

    CONTRIBUTIONS TO EBITDA BY SEGMENT: DISTRIBUTION AND SALE CENTRAL EUROPE CZK bn. Q1 2011 Q1 2012 Change % Distribution 5.0 4.5 -0.5 -10% Sale 0.8 1.1 +0.3 +38% Total EBITDA 5.8 5.6 -0.2 -3% Distribution Czech Republic (CZK -0.5 bn.)  decrease in gross margin by CZK -0.4 bn. mainly due to higher cos

  18. Slide 18: Distribution and Sale South-East Europe

    CONTRIBUTIONS TO EBITDA BY SEGMENT: DISTRIBUTION AND SALE SOUTH-EAST EUROPE CZK bn. Q1 2011 Q1 2012 Change % Romania 0.3 0.6 +0.3 +97% Bulgaria 0.2 0.4 +0.2 +85% Albania 0.0 -1.9 -1.9 - Total EBITDA 0.5 -0.9 -1.4 - Romania (CZK +0.3 bn.)  y-o-y decrease of allowance for doubtful receivables caused

  19. Slide 19: Mining Central Europe, Others Central and South-East Europe

    CONTRIBUTION TO EBITDA BY SEGMENT: MINING CENTRAL EUROPE, OTHERS CENTRAL AND SOUTH-EAST EUROPE EBITDA (CZK bn.) Q1 2011 Q1 2012 Change % Mining CE 1.4 1.5 +0.1 +7% Other CE 1.5 1.5 0.0 0% Other SEE 0.1 0.1 0.0 0% Mining Central Europe (CZK +0.1 bn.)  volumes of coal mining and revenues comparable w

  20. Slide 20: Other Income (Expenses)

    OTHER INCOME (EXPENSES) (CZK bn.) Q1 2011* Q1 2012 Change % EBITDA 26.6 26.3 -0.3 -1% Depreciation and amortization -6.1 -6.5 -0.4 -7% Other income (expenses) 0.5 -1.8 -2.3 - Interest balance -1.0 -1.0 0.0 - Foreign exchange rate gains (losses) and financial derivates 2.5 -0.5 -3.0 - Gain (Loss) fro

  21. Slide 21: Cash Flow

    CASH FLOW CZK bn. operating investing financing 50 24.1 45 40 35 8.0 30 25 9.4 20 1.7 38.2 4.7 15 0.2 22.1 22.1 +28.8 0.1 CZK bn. 27.1 22.4 22.1 22.2 10 + 0.5% 5 0 Cash and cash Income after Changes in working Investments in Financial Loans and Other ***) Cash and cash equivalents adjustments, capit

  22. Slide 22: CEZ Group Maintains Strong Liquidity

    CEZ GROUP MAINTAINS STRONG LIQUIDITY CZK bn. Bond maturity profile (as of Apr 30, 2012) 25 Overview of significant external financing Partial buy-back of Bond issue operations of CEZ Group since the beginning 20 bonds in Jan 2012 under Rule 144A in April of year 2012 15 Volume Creditor, type of issu

  23. Slide 23: Agenda

    AGENDA Financial highlights and key events in CEZ Group in Q1 2012 Martin Novák, CFO Financial results Martin Novák, CFO Trading position of CEZ Group Michal Skalka, Head of Trading 22

  24. Slide 24: Electricity Consumption in the Czech Republic Remains Stable Year-on-Year

    ELECTRICITY CONSUMPTION IN THE CZECH REPUBLIC REMAINS STABLE YEAR-ON-YEAR Consumption in the Consumption in the Czech Republic Czech Republic (temperature adjusted)** TWh Consumption in individual segments:*** 16.36 16.41* 16.39 16.36* TWh  +2.4% wholesale customers  +11.0% households +0.3% -0.2%

  25. Slide 25: Electricity Production of CEZ Group Own Sources Stable in the Czech Republic

    ELECTRICITY PRODUCTION OF CEZ GROUP OWN SOURCES STABLE IN THE CZECH REPUBLIC Y-O-Y, SLIGHT INCREASE PREDICTED FOR 2012 TWh 17.2 +3% 17.6 TWh 20 63.3 +4% 65.8 18 70 0.5 +12% 0.6 Renewables +5% 1.9 16 1.7 60 14 -1% 7.9 50 8.0 Nuclear +7% 30.2 12 28.3 10 40 0.2 +35% 0.2 0.6 8 Hydro-pump 0.7 -20% storag

  26. Slide 26: Varna Production Fall Compensated by Romanian Wind Farms

    BY THE END OF THE YEAR, THE Y-O-Y FALL OF PRODUCTION IN THE VARNA POWER PLANT WILL BE ALMOST FULLY COMPENSATED BY INCREASED PRODUCTION OF THE ROMANIAN WIND FARMS TWh TWh 2.5 5.9 2.0 -16% 7 -1% 5.8 1.7 Romania (Renewable 2 sources) 6 0.2 0.6 +66% +45% 1.1 5 1.5 0.6 0.3 Poland (ELCHO and 4 2.2 +8% Ska

  27. Slide 27: Coal Mining in Severočeské doly Stable Y-o-Y

    COAL MINING IN SEVEROČESKÉ DOLY STABLE Y-O-Y Coal mining in million tons 7,0 25.1 -2% 24.8 6.5 -1% 6.4 25,0 6,0 7,1 -9% 6.5 1,9 +2% 1,9 20,0 5,0 4,0 Externí 15,0 External zákazníci customers 3,0 ČEZ, ČEZ,a.a.s.s. 10,0 18.0 +1% 18,3 4,6 -3% 4,5 2,0 5,0 1,0 0,0 0,0 1 - 3/ 1 - 3/ 2011 2012 E 2011 2012

  28. Slide 28: Price of Electricity on Downward Path Due to Economic Slowdown in the EU

    PRICE OF ELECTRICITY ON DOWNWARD PATH DUE TO ECONOMIC SLOWDOWN IN THE EU AND UNCERTAINTY REGARDING SUPPORT FOR THE EMISSION ALLOWANCE MECHANISM IN THE 2013-2020 PERIOD Price of carbon Electricity price allowances EUR/MWh * EUR/t CO2 ** 60 22 58 20 56 18 54 16 52 14 50 12 48 10 46 8 44 6 Apr-11 Jun-1

  29. Slide 29: ČEZ, a. s., Continues Hedging Its Revenues from Sales of Electricity

    ČEZ, A. S., CONTINUES HEDGING ITS REVENUES FROM SALES OF ELECTRICITY IN THE MEDIUM TERM IN LINE WITH STANDARD POLICY Share of hedged production of ČEZ, a. s., power plants (as of May 1, 2012; 100% corresponds to 55 – 60 TWh) 100%  ČEZ, a. s., applies a standard approach to hedging its open position

  30. Slide 30: Appendices

    APPENDICES  Market trends  Investments into fixed assets  Balance sheet overview  Twenty years of CEZ Group in numbers  Electricity balance 29

  31. Slide 31: Market Trends

    MARKET TRENDS Development of ČEZ share price compared to PX index and Bloomberg Utilities, % CO2 allowances / emission rights EUR / t max. 13 May 25 120% CZK 961 20 100% 15 80% 10 min. 23 Sept CZK 679 60% 5 PX Bloomberg European Utilities Index ČEZ forward 2013 forward 2014 Electricity USD / t Coal

  32. Slide 32: Investments into Fixed Assets

    INVESTMENTS INTO FIXED ASSETS *) Investments into fixed assets 1 - 3/ 2012: CZK 9.4 bn. Power plant renewal CZK 5.1 bn. Tušimice: as part of the renewal of the plant, tests were completed incl. certification and warranty testing on the last unit (No. 21). Acceptance into guarantee operation took pla

  33. Slide 33: Balance Sheet Overview

    BALANCE SHEET OVERVIEW Long-term liabilities and equity Fixed assets  increase in equity: net income CZK +14.4 bn., other comprehensive income  decrease in fixed tangible assets CZK -0.3 bn. (CZK +4.3 bn.)  decrease in other fixed assets (CZK -1.7 bn.) primarily due to a reduction  increase in d

  34. Slide 34: Twenty Years of CEZ Group in Numbers

    TWENTY YEARS OF CEZ GROUP IN NUMBERS On May 6, 2012, we celebrated the twentieth anniversary of the establishment of ČEZ, a. s. 1993 2011 Difference % Total installed capacity GW 10.3 15.1 +4.8 +47% Production of electricity (brutto) TWh 46.4 69.2 +22.8 +49% Number of end customers * 12 9,300,000 +9

  35. Slide 35: Electricity Balance (GWh)

    Electricity balance (GWh) Q1 2011 Q1 2012 +/- Electricity procured 17,393 17,425 +0% Generated in-house (gross) 19,155 19,281 +1% In-house and other consumption, including pumping in pumped-storage plants -1,762 -1,856 +5% Sold to end customers -11,993 -11,936 -0% Sold in the wholesale market (net)

  36. Slide 36: Electricity Balance (GWh) by Segment Q1 2012

    Electricity balance (GWh) Power Production Distribution Power Production Distribution Q1 2012 & Trading CE & Sale CE & Trading SEE & Sale SEE Eliminations CEZ Group GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- Electricity procured 16,495 +2% 0 - 931 -26% 0 - 0 - 17,425 +0% Generated in-house (gro

  37. Slide 37: Electricity Balance (GWh) by Country Q1 2012

    Electricity balance (GWh) Q1 2012 Czech Republic Poland Other Central Europe Bulgaria Romania Albania Eliminations CEZ Group GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- Electricity procured 15,886 +2% 609 +9% 0 - 645 -39% 287 +44% 0 - 0 - 17,425 +0% Generated in-house (gross) 17,

ČEZ, a. s. — Q1 2012 Earnings Presentation on 6ix