Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — 9M23 Earnings Presentation
26 slides from Edp's earnings presentation, Nov 3, 2023
Slide 1: 9M23 Results Presentation
Slide 2: Disclaimer
Disclaimer This document has been prepared by EDP - Energias de Portugal, S.A. (the "Company") Forward-looking statements include statements regarding: objectives, goals, strategies, solely for use at the presentation to be made on this date and its purpose is merely of outlook and growth prospects;
Slide 3: 9M23 results marked by the rebound of integrated margin in Iberia
9M23 results marked by the rebound of integrated margin in Iberia, enhanced by EDP Brasil minorities buyout 9M23 Main Highlights Financial Performance Recurring figures Recovery of integrated margin in Iberia, reflecting the normalization of hydro generation in Iberia (+58%YoY) and 9M23 improved sou
Slide 4: 4Q23 supported by strong hydro volumes and improved prospects for 2024-26
4Q23 supported by strong hydro volumes and improved prospects for 2024-26 following upward trend on electricity forward prices in 2H23 Reservoirs in 3Q23 at the highest level in 10 years Over the last 3 months, forward electricity prices for 2024-2026 deliveries have rebounded significantly Reservoi
Slide 5: Portugal regulated tariffs proposal for 2024
Portugal regulated tariffs proposal for 2024: stable retail tariffs and system debt under control; Temporary increase in RR in 2023 to be securitized in 4Q23 1 Continuous downward trend for electricity system Regulatory Receivables expected to be debt in 2024 securitized before 2023 year-end Electri
Slide 6: Electricity distribution networks in Portugal: revenues growth supported by inflation and rate of return
Electricity distribution networks in Portugal: Revenues growth supported by inflation and rate of return annually indexed to 10-year bonds yields 2024 tariff proposal with a 4% increase in Annual RoRAB indexed to 10-year Portuguese regulated gross profit bond yields2 PT distribution regulated gross
Slide 7: Networks Net Regulated Asset Base +29% YoY growth to €7.2bn
Networks Net Regulated Asset Base +29% YoY growth to €7.2bn, boosted by minorities buyout in Brazil and +71% RAB review at EDP São Paulo Positive outcome from EDP São Paulo tariff Overall EDP Group net RAB increased +29% YoY review for regulatory period 2023-27 EDP São Paulo Regulatory Asset Base, B
Slide 8: EDP's investment focused on value creation under inflationary and interest rates pressure
EDP’s investment focused on value creation under inflationary and interest rates pressure 2023 has shown increase in project returns while PPA prices and decreasing capex costs supporting preserving risk levels target returns Wind & Solar 2023 YTD approved & secured investments by region Returns exc
Slide 9: Pursuing our asset rotation strategy with strong execution in 3Q23
Pursuing our asset rotation strategy with a strong execution in 3Q23; Capacity additions for 2023-24 expected at ~6.5 GW Strong asset rotation execution, exceeding targeted Renewables growth execution on track to deliver gains and proceeds capacity additions target for 2023-2026 Wind & Solar AR Gain
Slide 10: Focus on efficiency and streamline organization as a key competitive factor
Focus on efficiency and streamline organization as a key competitive factor in a high inflation environment and fast energy transition Average inflation 2022-2024 Key efficiency measures Average local inflation weighted in OPEX, 2022-2024 Further simplifying corporate structure e.g. EDP Brasil minor
Slide 11: 20 years track record in the energy transition: on track to be coal-free by 2025
20 years track record in the energy transition: On track to be coal-free by 2025, with significant steps taken this year EDP’s total electricity generation mix Promoting a Just Transition in old coal sites Coal Renewables Other • Sale of 80% stake signed in Sep 20th, 2023 with a put option for the r
Slide 12: Financial Performance
FINANCIAL PERFORMANCE
Slide 13: Recurring EBITDA +26% YoY prompted by hydro recovery and lower sourcing costs
Recurring EBITDA +26% YoY prompt by a recovery on hydro conditions and lower sourcing costs, together with ~€0.4Bn of AR Gains Recurring EBITDA1 ,€m YoY growth, % ∆ YoY +26% 3,830 • Recovery of hydro in Portugal vs. very weak 9M22 3,046 • Lower electricity and gas sourcing costs +€828m Hydro, +783m
Slide 14: Generation & supply integrated EBITDA rebound
Generation & supply integrated EBITDA rebound, on the back of recovery of hydro generation and sourcing conditions vs. extremely adverse context in 9M22 Hydro, Clients & EM Recurring EBITDA €m YoY growth, % Iberia 9M22 9M23 YoY + 3x ∆ YoY 1,271 Hydro Generation, TWh 3.6 5.6 +58% Electricity spot pri
Slide 15: Wind & Solar EBITDA stable YoY with ~€0.4Bn AR gains
Wind & Solar EBITDA stable YoY with ~€0.4Bn AR gains mitigating weaker wind resources and selling prices and lower OW contribution Wind & Solar Recurring EBITDA1 €m YoY growth, % ∆ YoY 9M22 9M23 YoY -3% 1,482 1,437 Installed Capacity2, GW 14.3 15.1 +6% AR Gains 263 +130m 393 +49% YoY Prod. deviation
Slide 16: Electricity Networks EBITDA roughly stable YoY
Electricity Networks EBITDA roughly stable YoY Electricity Networks Recurring EBITDA €m YoY growth, % Iberia 9M22 9M23 YoY ∆ YoY Return on RAB Portugal , % 5.05% 5.57% +53 bps -2% 1,136 1,115 Return on RAB Spain, % 5.58% 5.58% 0 bps Portugal 391 385 -7m OPEX/ Supply Point Iberia1, € 35.1 36.8 +5% Sp
Slide 17: Net financial costs increased +9% YoY penalized by FX
Net financial costs increased +9% YoY penalized by FX, interest related costs flat YoY Net Financial Costs EDP excl Brazil Brazil Avg. nominal debt by currency €m BRL 12% +9% Other 6% -1% 627 619 635 51% EUR 580 16 47 -8 39% 41% 30% USD 61% 59% Avg cost of debt of 3.9% with BRL representing 12% of n
Slide 18: Cost of debt increase mitigated by pre-hedge of interest rates
Cost of debt increase mitigated by pre-hedge of interest rates, declining weight of USD debt and recent decrease of benchmark interest rate in Brazil Cost of Debt1 2023 Bond Issuances and Rates Pre hedges 9M22 9M23 YoY Date Amount Maturity Implicit Yield Jun-23 €750m June 2028 2.5%2 Oct-23 €600m Apr
Slide 19: High financial liquidity at >€9 Bn
High financial liquidity at >€9 Bn, supported by >€6bn of available credit lines, covers refinancing needs until 2026 Financial liquidity EDP consolidated debt maturity profile1 as of Sep-23, €Bn as of Sep-23, €Bn EDP Brasil Cash & Equivalents 2.0 EDP SA & EDP Finance BV and Other (% of total debt)
Slide 20: Net debt Sep-23 impacted by temporary increase of regulatory working capital
Net debt Sep-23 impacted by temporary increase of regulatory WC in Portugal, to be securitized in 4Q23; sound credit ratios Net Debt/EBITDA 3.3x Change in Net Debt € Bn 0.8 2.0 16.9 0.1 0.5 16.4 Organic cash-flow = €0.9Bn 3.9 RR 13.2 1.8 1.4 0.5 Regulatory working capital +€2.3bn in 9M23 mostly due
Slide 21: Recurring net profit of €1.0 Bn
Recurring net Profit of €1.0 Bn, with YoY comparison reflecting the hydro crisis in 9M22, and supported by lower minorities in Brazil since 3Q23 Recurring Net Profit1 Recurring Net Profit €m Δ YoY €m 1,026 EBITDA 3,830 +784 D&A and 512 Provisions 1,288 -65 EBIT 2,542 +720 Net Financial Costs 630 -50
Slide 22: 9M23 Closing Remarks
9M23 CLOSING REMARKS
Slide 23: Upgrade of recurring 2023 net profit guidance
Upgrade of recurring 2023 net profit guidance supported by improved energy market outlook, more than compensation higher interest rates environment 2023 Guidance ~€5.0 Bn EB ITDA recurring Integrated Strong asset EDP Brasil portfolio and rotation minorities’ networks ~€1.2-1.3 Bn resilience executio
Slide 24: Closing Remarks
Closing Remarks Sound results in 9M23 and positive prospects for 4Q23, driven by recovery of integrated margin in Iberia, resilient electricity networks and better than expected asset rotation execution, support an upgrade of 2023 earning guidance €1bn buyout of 100% of EDP Brasil minorities, alread
Slide 25: Q&A
Q&A
Slide 26: IR Contacts
IR Contacts E-mail: ir@edp.com Phone +351 210 012 834 Site: www.edp.com
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