Naturgy Energy Group, S.a. · BME:NTGY
Naturgy Energy — FY2023 Earnings Presentation
43 slides from Naturgy Energy's earnings presentation, Feb 27, 2024
Slide 1: 2023 Results
2023 Results 2023 Results 27 February 2024 1
Slide 2: Agenda
2023 Results 1. Year review 2. Scenario 3. Key highlights 2023 4. Consolidated results 5. Results by business unit 6. Summary and priorities 2024 2
Slide 3: Year review
Year review Naturgy » =
Slide 4: Year review 2023
2023 1. Year review Results Year review 2023 Continuous adaptation to the environment Scenario Key highlights Solid results Gas and power prices remain highly Step up in energy transition Exceeded guidance, reaching €5,475m correlated investment1 (+53% vs. FY22 to EBITDA and €1,986m Net income Decli
Slide 5: Scenario
2023 Results 2 Scenario 5
Slide 6: Gas and power prices evolution in Europe
2023 2. Scenario Results Gas and power prices evolution in Europe Gas and power Gas prices1 evolution (€/MWh) Wholesale electricity prices evolution in Europe (€/MWh) prices remain highly correlated Year average 600 2021 2022 2023 300 Spain electricity 125 303 127 prices among the 500 250 111 168 87
Slide 7: Energy markets evolution
2023 2. Scenario Results Energy markets evolution Decreasing gas Brent (USD/bbl) TTF (€/MWh) Spanish electricity market and power prices1 (€/MWh) towards historical 18% 63% 48% average levels Lower volatility vs. 2022 although 101 168 above historical 83 131 48 87 average levels FY22 FY23 FY22 FY23
Slide 8: Main regulatory measures and proposals
2023 2. Scenario Results Main regulatory measures and proposals Ongoing regulatory Fit for 55 European Exceptional 1.2% tax Temporary developments in 2023 package electricity emergency on aggregate cap on to increase market reform measures turnover of regulated gas renewables penetration, energy (e.
Slide 9: Key highlights 2023
3 Key highlights 2023
Slide 10: Key highlights 2023
2023 3. Key highlights 2023 Results Key highlights 2023 €2,944m Step up in energy transition investment Investment (+53% vs. FY22) 1 6.5GW Progress on renewable development Installed capacity (+1GW vs. FY22) 2 70 projects1 Headway in renewable gases Biomethane and hydrogen 3 2023 Increased regulator
Slide 11: Step up in energy transition investment
2023 3. Key highlights 2023 Results 1. Step up in energy transition investment Increased Investment1 evolution by business unit (€m) investment efforts in renewables 53% 2,944 Breakdown2: FY22 FY23 Var. Energy management €5m €4m n.m. Supply €132m €135m +2% 1,924 Thermal generation €164m €149m -9% Ne
Slide 12: Progress on renewable development
2023 3. Key highlights 2023 Results 2. Progress on renewable development Expanded footprint Installed capacity evolution (GW) in key geographies FY22 FY23 FY22 FY23 Var. Spain 4.4 5.0 +13% By geography LatAm 0.8 0.8 n.m. 5.5GW 6.5GW Australia 0.3 0.4 +43% USA - 0.3 n.m. FY22 FY23 Var. By technology
Slide 13: Headway in renewable gases
2023 3. Key highlights 2023 Results 3. Headway in renewable gases Leading Progress on renewable gases Large biomethane potential in Spain renewable gases developments in Spain, a key Projects under different stages of development TWh ∼410 contributor to ∼326 >3x decarbonization Biomethane: Hydrogen:
Slide 14: Increased regulatory visibility in LatAm Networks
2023 3. Key highlights 2023 Results 4. Increased regulatory visibility in LatAm Networks Benefited from Regulatory period 2023 developments relevant tariff updates Panama Fourth tariff review approved with updated 2022-26 electricity tariffs and visibility up to 2026 Mexico 2021-25 Fifth tariff revi
Slide 15: Security of supply at competitive prices
2023 3. Key highlights 2023 Results 5. Security of supply at competitive prices Playing a key role in addressing the energy trilemma Security of supply Competitive prices Sustainability During 2023, Naturgy Spain electricity prices among Step up in energy transition distributed 378TWh and 32TWh the
Slide 16: Consolidated results
2023 Results 4 Consolidated results 16
Slide 17: Highlights
2023 4. Consolidated results Results Highlights EBITDA Net income Decline of energy prices towards 5,475 1,986 historical average levels as market rebalances post 2022 11% 20% Strong results and cash flow Step up in energy transition investment Investment Net debt Strong balance sheet with stable 2,
Slide 18: EBITDA and Investment mix
2023 4. Consolidated results Results EBITDA and Investment mix1 Balanced EBITDA By geography By activity By business unit mix between regulated and EBITDA (€m) liberalized activities 5,475 Spain Rest 59% 41% Gas 57% Electricity 43% Markets Networks 53% 47% Higher investment in electricity, mainly in
Slide 19: Reinforced balance sheet and balanced cash flow uses
2023 4. Consolidated results Results Reinforced balance sheet and balanced cash flow uses Stable Net debt Net debt evolution (€m) with balanced Consolidated avg. 3.0% 3.9% cash flow uses cost of debt1 12,070 967 12,090 1,441 2,944 (141) Continued balance sheet reinforcement (5,191) FY22 Cash flow In
Slide 20: Shareholder remuneration
2023 4. Consolidated results Results Shareholder remuneration Total dividend of 1.40 €/share Total dividend 2023: 1.40 €/share against 2023 results as committed 1st int. 2023 2nd int. 2023 2023 final1 0.50 0.50 0.40 August-23 November-23 April-24 Note: 1. Subject to AGM approval 20
Slide 21: ESG progress
2023 4. Consolidated results Results ESG progress Solid progress on key ESG metrics towards 2025 targets Environment Social Governance Enhance Extending ESG ESG as a part of Climate change risks Emissions reduction Biodiversity diversity throughout supply chain mgmt. incentives & taxonomy reporting
Slide 22: Environment
2023 4. Consolidated results Results Environment Significant CO2 emissions (MtCO2 eq) progress on the decarbonization Evolution 8.5% FY23 breakdown Scope 1 10.9% of our activities Scope 2 0.3% and growing (2.3) (8.3) Scope 3 88.8% investment in 125.2 energy transition 114.6 114.6 FY22 FY23 activitie
Slide 23: Social
2023 4. Consolidated results Results Social Large economic Contribution to society Naturgy’s Foundation contribution to FY23 society, promoting equality and diversity, Economic value distributed Energy rehabilitation plan (homes rehabilitated) 810 and supporting Suppliers & Admin. 86% Since start 4,
Slide 24: Governance
2023 4. Consolidated results Results Governance Progress on the Best practices ESG recognitions and indexes implementation of governance best practices ESG management Supply chain ESG Recognized commitment remuneration (%) audits (%) with health & safety and Recognized in good practices in diversity
Slide 25: Commitment and delivery
2023 4. Consolidated results Results Commitment and delivery Track record of growing EBITDA, EBITDA (€m) Investment (€m) investment and dividends while reducing Net debt 5,475 >5,400 EBITDA guidance 4,954 2,944 3,000 1,562 1,924 revised upwards 3,529 during 2023 and FY21 FY22 FY23 FY23 upgraded FY21
Slide 26: Capital allocation 2021-23
2023 4. Consolidated results Results Capital allocation 2021-23 During the 2021-23 period €6.4bn were Sources & Uses 2021-23 (€m) 15,037 15,037 dedicated to invest, mainly in energy 1,522 Net debt reduction transition 3,177 Taxes and levies charged to Naturgy 3,908 Dividends Cash flow 6,430 Investme
Slide 27: Results by business unit
2023 Results 5 Results by business unit 27
Slide 28: Gas networks
2023 5. Results by business unit Results Gas networks Growth driven by Spain: lower regulated remuneration due to EBITDA (€m) tariff updates in 2020 tariff review and lower demand (mainly 163 1,812 LatAm; demand in residential and commercial segments), declines in Spain, partially offset by lower ga
Slide 29: Electricity networks
2023 5. Results by business unit Results Electricity networks Record EBITDA (€m) investments in Spain and approved 856 32 851 Spain: record investments up to regulatory regulatory review (4) limit, lower remuneration vs. prior year as in Panama 2022 registered the collection of accrued (33) remunera
Slide 30: Energy management
2023 5. Results by business unit Results Energy management Lower sales and EBITDA (€m) margins as market rebalances and Comparison affected by the negative prices stabilize (4) impact of the financial hedging closer to historical ineffectiveness accounted for in 2022, average levels with the majorit
Slide 31: Thermal generation
2023 5. Results by business unit Results Thermal generation Thermal generation EBITDA (€m) remains essential to guarantee 687 670 Spain: lower production due to higher security of supply (22) 5 renewables resource partially offset by higher CCGT unitary margins GPG thermal: higher production and mar
Slide 32: Renewable generation
2023 5. Results by business unit Results Renewable generation Growing installed EBITDA (€m) capacity and production 13 529 16 126 Spain: higher hydro production as well as commissioning of new capacity (153MW) and ASR Wind integration (422MW) partly 374 offset by lower sales prices USA: beginning of
Slide 33: Supply
2023 5. Results by business unit Results Supply Higher margins in EBITDA (€m) power supply vs. 2022 thanks to a Power: higher margins vs. 2022, supported more balanced (4) by growing fixed priced contracts as well power generation / as lower costs compared to 2022, which supply integrated was affect
Slide 34: Summary and priorities 2024
6 Summary and priorities 2024
Slide 35: Summary
2023 6. Summary and priorities 2024 Results Summary Energy scenario Strong results Balance sheet rebalancing post and cash flow strength allows 2022 supported by for investment investments and step up energy scenario Exceeded Focus on “Iberian “Iberian guidance and sustainability, exception” cap exc
Slide 36: Priorities 2024
2023 6. Summary and priorities 2024 Results Priorities 2024 Networks Markets Ongoing regulatory management in Energy management: pipeline contracts Spain and LatAm to reflect 2024 market conditions • Adequate regulatory framework in Thermal generation: electricity networks Spain • CCGTs critical rol
Slide 37: Appendix
2023 Results Appendix 37
Slide 38: Alternative Performance Metrics (i/iii)
2023 Appendix Results Alternative Performance Metrics (i/iii) Naturgy's financial disclosures contain magnitudes and metrics drafted in accordance with International Financial Reporting Standards (IFRS) and others that are based on the Group's disclosure model, referred to as Alternative Performance
Slide 39: Alternative Performance Metrics (ii/iii)
2023 Appendix Results Alternative Performance Metrics (ii/iii) Alternative performance Reconciliation of values Definition and terms Relevance of use metrics 31 December 2023 31 December 2022 Measure of the investment effort of each Net Investments (net CAPEX) CAPEX- Other investment receipts/(payme
Slide 40: Alternative Performance Metrics (iii/iii)
2023 Appendix Results Alternative Performance Metrics (iii/iii) Alternative performance Reconciliation of values Definition and terms Relevance of use metrics 31 December 2023 31 December 2022 Measure of cash generation Net Free cash flow + Parent company dividends corresponding to operating and net
Slide 41: ESG Metrics
2023 Appendix Results ESG Metrics FY23 FY22 Change Comments Health and safety Accidents with lost time1 units 9 8 12.5% Health and safety metrics show an increase in accidents vs. FY22, although within the expected range considering the Group’s characteristics LT Frequency rate2 units 0.13 0.12 8.3%
Slide 42: Disclaimer
2023 Results Disclaimer This document is the property of Naturgy Energy Group, S.A. (Naturgy) and has been prepared for information purposes only and contains inside information per the 2014 market abuse regulation. This communication contains forward-looking information and statements about Naturgy
Slide 43: Contact
2023 Results capitalmarkets@naturgy.com www.naturgy.com Av. de América 38, Madrid 43