Admie Holdings Sa · ATHEX:ADMIE
Admie Holdings Sa — Non-Deal Roadshow (September 2018)
47 slides from Admie Holdings Sa's roadshow presentation, September 2018
Slide 1: Corporate Presentation 2018
Corporate Presentation 2018 1
Slide 2: Disclaimer
Disclaimer This document contains forward-looking statements that involve risks and uncertainties. These statements may generally, but not always, be identified by the use of words such as “outlook”, “guidance”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “target” and similar expressions to
Slide 3: Contents
Contents 1 ADMIE Holding & IPTO Overview 2 Islands Interconnection 3 Crete – Attica Interconnection 4 Regulatory Framework 5 Financial Summary 6 Appendix (A,B)
Slide 4: '18 focus on transmission system growth
’18 focus on transmission system growth
Slide 5: Owned and maintained High-Voltage lines across Greece
11,732km Owned and maintained High-Voltage lines across Greece 11,722km is the distance between London, UK and Jakarta, Indonesia
Slide 6: Investment proposition
Investment proposition ▪ Natural monopoly in Greece ▪ Growth in the regulated asset base 11,732km of HV transmission lines RAB growth up to €2.1Β in 2021 ▪ Recovery in domestic demand ▪ Investments Consumption >52TWh highest in six years Investments approx. €1Β cumulative ’18-21 ▪ Leading TSO as sta
Slide 7: Overview
1. Overview ADMIE Holding trading vehicle for natural monopoly ADMIE (IPTO) 7
Slide 8: Full Ownership Unbundling – Corporate Structure
Full Ownership Unbundling – Corporate Structure Hellenic Republic Silchester & Funds Other Inst. Private Investors Investors 51.1%* 12.9% 23.1% 12.9% 31.07.2018 51.0% 25.0% 24.0% ATHEX: ADMIE Bloomberg: ADMIE GA Owner of 51% stake in “Independent Power Transmission Operator S.A.” (ADMIE/IPTO) Reuter
Slide 9: Key milestones
Key milestones August May February March June September TSO legislation Full Ownership ADMIE Holding • RAE: new regulatory Refinance of Inauguration of Crete - (4001/2011) Unbundling law est. review 2018-21 Syndicated Bond Attica interconnection (4389/2016) • Inauguration of Loan ARIADNE Interconnec
Slide 10: Action Plan
Action Plan Unbundle Strategy Grow Unbundling IPTO owns, manages and operates network independently from generation Formulation of /production /supply Strategy Execution on transmission growth New management Maintain transmission leadership 10 Well-prepared plan with visible earnings impact
Slide 11: IPTO H1 '18 Highlights
IPTO H1 ’18 Highlights • IPTO system rent €117.1M • EBITDA €102.1M • Ad hoc provision release amounting to €26.6Μ due to dismissal of €102.1M Reported EBITDA a contractor lawsuit • Plan accelerating investments in place ✓ commissioning of 1st Phase of Cycladic islands interconnection completed (€247
Slide 12: ADMIE Holding H1 '18 Highlights
ADMIE Holding H1 ’18 Highlights • Net profit €22.6M €22.6M • Distribution of interim dividend €3.16 cents per share Net Profit completed on August • In 2019 total dividend is expected to amount approx. €7 €3.16 cents per share cents per share • Opex €120K mainly related to trading on the Athens Stoc
Slide 13: Interconnection of the Islands
2. Interconnection of the Islands 13 13
Slide 14: Islands Interconnection
Islands Interconnection Main Objectives System stability Increase of security of supply for the islands electricity system • Drastic reduction of electricity generation cost in the islands Cost Reduction • Substitution of oil units with RES plants and imports from the mainland PSOs elimination More
Slide 15: Overview of the TYNDP 2018 Major Projects
Overview of the TYNDP 2018 Major Projects Top 5 Projects - Works Commencing Before the End of 2018 Expected Total project ID Project description commissioni cost 2018- ng year 2027 (€ Μ) 1 Crete interconnection (Phase I) 2020 324.0 2 Crete interconnection (Phase II) 2022 ~1,000 2020 Cycladic Islands
Slide 16: TYNDP 2019-28 Major Projects
TYNDP 2019-28 Major Projects Cyclades Cyclades Cyclades Cyclades Phase A Phase B Phase C Phase D 2018 2019 2020 2021- 2022 2023 2024 Peloponnese Crete Crete Peloponnese 1st branch Phase I Phase II 2nd branch 16
Slide 17: Interconnection of Crete
Interconnection of Crete Phases I & II Attica Peloponnese II I DC 2x500MW AC 2x200MVA 340km submarine 132km submarine Crete Interconnection of Crete with the mainland through two distinct links The project is implemented in two phases (I, II) Phase I: Connection Peloponnese with Crete Phase II: Conn
Slide 18: Interconnection of Cyclades
Interconnection of Cyclades Phase A Phase C 150kV 66kV 150kV 66kV Lavrio Tinos 150kV 200MVA Lavrio Tinos 150kV 200MVA 150kV 140MVA 150kV 140MVA Mykonos Mykonos Syros Syros Paros Naxos Paros Radial Interconnection of Syros island with the mainland (Lavrio), Paros, Mykonos and Tinos Construction of se
Slide 19: Inauguration of Cyclades
Inauguration of Cyclades “This is an excellent example of how a company under public control can accelerate projects, operate efficiently and thus contribute to the development of the national economy” March 2018 Manos Manousakis, IPTO CEO I welcome the inauguration and I would like to congratulate
Slide 20: Capex Estimation
EUR M Capex Estimation 2018 - 21 2018 - 28 1200 1000 350 324 300 800 250 200 189 175 600 Upgrade 158 157 324 1000 150 400 Phase D 30 238 100 386 200 385 50 25 52 175 0 0 Crete I Crete II Cyclades Expansion Other System Other Projects Crete I Crete II Cyclades Expansion Other System Other Projects Pe
Slide 21: Crete – Attica Interconnection
3. Crete – Attica Interconnection 21 A new IPTO under IPTO arises
Slide 22: Ariadne Interconnection
“… IPTO’s managerial team has envisioned the new era for the Operator, with the interconnection of the islands as its central strategic aim. The company that until now was operating a mainly overland grid, is dynamically “… by undertaking the most important expanding its activities to the field of i
Slide 23: Crete – Attica Interconnection
Crete – Attica Interconnection Establishment of an SPV (Special Purpose Vehicle – SPV) as 100% subsidiary under the name Ariadne Interconnection SPSA Scope: to finance and construct the project of Crete – Attica A 2x500MW capacity DC link consisting of two 340km submarine cables and additional under
Slide 24: Crete – Attica Interconnection
Crete – Attica Interconnection Project of Major Importance (PMI): a premium rate of return can be approved by RAE, on top to the rate of return for specific projects that are characterized PMI’s The percentage of the premium return can be from 1% to 2.5% and is decided by RAE. For this project WACC
Slide 25: Regulatory Framework
4. Regulatory Framework New, 4yr regulatory period 2018 – 2021 25
Slide 26: Regulatory overview
Regulatory overview 1 EUR 2017 2021 Comment Regulated Delta +50% €1.4B €2.1B Asset Base (RAB)2 c10% CAGR ’17-’21 Investments Cumulative ’18-’213 €1.0B (System & Users) Regulated Rate of 7.8% 6.7% Return Average 2015-17 Average 2018-21 Allowed remuneration €126M €130M 26 Regulatory depreciation €55M
Slide 27: New 4yr regulatory period 2018 – 2021
New 4yr regulatory period 2018 – 2021 Regulatory overview (unchanged from prior) New Regulated Asset & Rate of Return 2,500.0 8.0% Regulatory Asset Base (RAB) 7.0% 6.9% 6.5% 6.3% 7.0% Maintenance & development investments + Working Capital; no impairment/revaluation 2,000.0 6.0% 1,500.0 5.0% Allowed
Slide 28: RAB cumulative 4yr evolution
EUR M RAB cumulative 4yr evolution Average RAB evolution Transmission/ 12.4% Interconnection CAGR ’18-’21 1,030 77 2,124 -227 2,060 1,941 1,545 -301 1,684 1,450 2018 2019 2020 2021 Transmission investment-driven asset growth 28 Source: RAE, ADMIE (IPTO)
Slide 29: Growing RAB remuneration
EUR M Allowed Revenue mix Allowed Revenue buildout Allowed Remuneration 9.7% CAGR ’18-’21 281 286 2021 28% 27% 45% 252 234 126 130 76 77 101 116 58 2020 28% 27% 45% 55 58 76 77 55 2019 31% 23% 46% 116 126 130 101 77 78 78 79 2018 33% 24% 43% 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 202
Slide 30: Financial Summary
5. Financial Summary 30
Slide 31: IPTO '18-'21 outlook
IPTO ’18-’21 outlook EUR 2017 2021 Regulated RAE: RAE: Asset Base (RAB)* €1.4B €2.1B Investments Approximately €1B 70.1M (System & Users) cumulative ’18-’21 EBITDA 172.0M Approximately 220M Net profit/(loss) 61.7M Approximately 85M 31 Dividend payout 50% At least 50%** 31 * Source: RAE, Resolution 2
Slide 32: IPTO selected items
IPTO selected items EUR M Balance sheet 31.12.2017 30.06.2018 P&L H1 17 H1 18 Chg yoy System rent 121.2 117.1 -3.3% Non-current assets 1,607.4 1,586.7 Total revenues 131.9 124.8 -5.4% Current assets 2,131.3 1,323.6 Reversals/(Provisions & 0.5 22.0 Impairments) Of which: Cash & equiv. 771.8 538.0 EBI
Slide 33: ADMIE Holding selected items
EUR M ADMIE Holding selected items P&L H1' 17 H1' 18 Balance sheet 31.12.2017 30.06.2018 Income from Affiliate 9.0 22.7 Non-current assets 520.1 528.9 EBITDA 8.2 22.5 Current assets 2.3 12.4 of which: Cash & equiv. 2.2 12.3 Operating Income 8.2 22.5 Total Assets 522.4 541.2 Net profit 8.2 22.6 Cash
Slide 34: Revenue & EBITDA
EUR M Revenue IPTO Revenues IPTO EBITDA 104.0 81.9% 84.0% & EBITDA 82.0% 131.9 102.0 +10.1% 80.0% 124.8 3.0 100.0 78.0% -5.4% • Revenues -5.4% yoy 98.0 76.0% 0.4 7.7 96.0 74.0% 102.1 • System rent decrease by 7.3 94.0 70.3% 72.0% 70.0% €4.1M reflecting reduced 121.2 117.1 92.0 68.0% 90.0 92.8 invoic
Slide 35: Net profit higher on various drivers
EUR M Net profit higher on various drivers IPTO Net profit 44.4 9.5 9.4 -5.1 32.2 -1.6 • EBITDA increase due to a provision release amounting to €26.6 M due to dismissal of a contractor lawsuit • Drop in total financial expenses mainly due IPTO Cash flow ladder to improvement in 25.9 0.0 0.5 111.6 t
Slide 36: Cash flow generation
Cash flow EUR million H1 17 H1 18 generation EBITDA 92.8 102.1* Chg in WC, 64.6 25.9** non-cash Provisions & Other Cash reserves excluding the Tax paid -57.1 - amount deposited to Interest paid, net -15.6 -6.1 HEDNO pursuant to a Cash Flow from Operations 84.6 121.9 decision of the Ministry of Subsi
Slide 37: Appendix A Regulatory
Regulatory < gs S = o) a. Q. < 4) Z|
Slide 38: New regulatory period 2018-21
EUR M 2018 2019 2020 2021 Average RAB 1,449.8 1,684.5 1,941.3 2,059.8 x WACC (real, pre-tax) 7.0% 6.9% 6.5% 6.3% = Allowed remuneration 101.5 116.2 126.2 129.8 + Authorized OPEX 77.3 77.9 78.5 79.1 + Regulatory Depreciation 55.2 58.3 76.4 77.1 = Allowed revenue 234.0 252.4 281.0 285.9 38 Source: RAE
Slide 39: WACC components
WACC components 2018 2019 2020 2021 Risk-free 0.7% 0.7% 0.7% 0.7% Market risk 5.0% 5.0% 5.0% 5.0% Equity beta 0.68 0.73 0.67 0.72 Country risk 2.3% 2.0% 1.8% 1.5% Cost of equity post-tax 6.4% 6.4% 5.9% 5.8% Tax rate 29.0% 29.0% 29.0% 29.0% Cost of equity pre-tax 9.0% 9.0% 8.3% 8.2% Cost of debt pre-
Slide 40: Regulatory Asset Base (RAB) Allowed Revenue (AR)
EUR M Regulatory Period Four years Regulatory Asset Base Undepreciated invested capital + maintenance/ (RAB) development capex/ WiP + working capital - disposals - subsidies Allowed Revenue (AR) Operator's Allowed Revenue In real terms for each year AR = O + Dep + R O annual operating costs Dep annu
Slide 41: Appendix B IPTO key financial items
Appendix B IPTO key financial items 41
Slide 42: IPTO P&L items
IPTO P&L items EUR million 2014 2015 2016 2017 Η1 2018 System rent 242.3 239.7 225.5 236.9 117.1 Total revenues 312.6 264.6 248.6 256.5 124.8 Reversals/ (Provisions & - -25.1 -7.3 -5.5 22.0 Impairments) EBITDA 183.8 154.8 152.0 172.0 102.1* As % of revenues 58.8% 58.5% 61.1% 67.0% 81.9% Operating In
Slide 43: IPTO Balance sheet items
IPTO Balance sheet items EUR million 2014 2015 2016 2017 30.06.2018 Non-current assets 1,537.7 1,597.8 1,617.4 1,607.4 1,586.7 Current assets 1,089.1 1,151.6 1,237.1 2,131.3 1,323.6 Total Assets 2,626.8 2,749.4 2,854.5 3,738.7 2,910.2 Total Equity 1,028.0 1,014.0 898.1 967.2 978.2 Interest-bearing l
Slide 44: IPTO Free cash flow
IPTO Free cash flow EUR million 2014 2015 2016 2017 H1 '18 EBITDA 183.8 154.8 152 172.0 102.1* WC, Provisions & Other 23.7 66.4 65.5 35.5** 25.9** Tax paid -3.9 0.0 -10.0 -57.1 0.0 Interest, net -29.6 -31.2 -30.6 -24.9 -6.1 Cash Flow from Operations 174.0 190.0 177.0 125.5 121.9 Subsidies 1.1 17.8 8
Slide 45: SGCC footprint & key economic interests
SGCC footprint & key economic interests ▪ State Grid Corp. of China (SGCC) World’s largest electric utility 900k km transmission lines in China CDP Reti ADMIE SGCC Global top2 Corp. on revenues* ▪ ADMIE (IPTO) in Greece REN 24% in 2017 TransCo ▪ CDP Reti (TERNA S.p.A.**) in Italy 35% in 2014 ▪ REN S
Slide 46: Thank you!
Thank you!
Slide 47: Contact
Contact For additional information please contact ADMIE Holding Investor Relations: Tel: +30 210 3636 936 E-mail: office@admieholding.gr or visit: www.admieholding.gr