40 slides from Societatea Energetica Electrica's earnings presentation, Nov 18, 2014
Slide 1: Presentation of the Q3 2014 Results
Presentation of the Q3 2014 Results Bucharest, 18 November 2014
Slide 2: Disclaimer
Disclaimer This document has been prepared by DFEE Electrica (the “Company”). The information herein has not been independently verified, nor does the Company make any representation or warranty, either express or implied, in relation to the accuracy, completeness or reliability of such information.
Slide 3: Presenting Management Team
Presenting Management Team Ioan Rosca Alexandra Borislavschi CEO Managing Director of Corporate Finance and Governance CEO of Electrica since May 2012 In the current position since Feb 2014 Previously CEO of Electrica Distributie Transilvania Sud (2007–2012) and Electrica Transilvania Sud (200
Slide 4: Main events in Q3 2014
Main events in Q3 2014 4 July 2014 - Admission to trading on BSE and LSE 4 July 2014 - the new Articles of Incorporation entered into force 3 august 2014 - end of the stabilisation period Corporate Governance 22 august 2014 - first GMS after IPO - election of the new Board of Directors’ memb
Slide 5: Main events in Q3 2014 (continued)
Main events in Q3 2014 (continued) End of July 2014 – Electrica received an invitation to participate in the disposal process for Enel’s distribution and supply assets in Romania 22 August 2014 – The ordinance preventing companies where the state owns more than 33% to acquire Investment stakes/s
Slide 6: IPO proceeds
IPO proceeds The Company’s strategy was to place the IPO money through the Underwriter banks, member of the Syndicate, in risk-free titles and deposits, on short-term, until the new Board of Directors will be able to take medium long term decisions Cashing from IPO: 4 July Cashing from IPO: 7 July
Slide 7: Contents
Contents I. Executive Summary II. Distribution segment overview III. Supply segment overview IV. Financials V. Corporate Governance VI. Q&A 7
Slide 8: Electrica at a glance
Electrica at a glance Executive summary Electrica Group Market leader in distribution and supply of electricity in Romania Distribution: Owns 78% in three subsidiaries operating on the electricity distribution market on a concession ending in 2054 (option to extend by 24.5 years) and 100% in a s
Slide 9: Electrica Significant Subsidiaries
Electrica Significant Subsidiaries1 Executive summary 22% 78% 100% Electrica Furnizare (EF) Electrica Distributie Electrica Distributie Electrica Distributie Electrica Serv (ES) 3.58mn consumers2 Transilvania Nord (EDTN) Transilvania Sud (EDTS) Muntenia Nord (EDMN) Revenues4: RON 276mn Market
Slide 10: Leading Player in Distribution and Supply
Leading Player in Distribution and Supply Executive summary Distribution Supply Volumes Distributed in 2013 Volumes Supplied in 2013 15% EDMN Electrica 22% Others EDTS 13% EDTN 41 TWh1 43.8 TWh Others 59% 11% 78% Electrica: 39% Area Covered by Distribution Network Regulated Market Sales in 2013 12%
Slide 11: Summary Consolidated Financials
Summary Consolidated Financials Executive summary Revenues Strong Adjusted EBITDA Growth and Margin Performance Revenues (RON mn) Adjusted EBITDA (RON mn) and Adjusted EBITDA Margin (%) 30% 20% 5,253 5,157 16% 12% 14% 20% 302 414 10% 3,864 3,466 727 684 0% 306 634 220 613 -10% 4,951 4,743 -20% 3,558
Slide 12: Agenda
Agenda I. Executive Summary II. Distribution segment overview III. Supply segment overview IV. Financials V. Corporate Governance VI. Q&A 12
Slide 13: Distribution Market Overview
Distribution Market Overview Market Overview Key Facts Romanian Electricity Distribution Map Electricity distribution in Romania is currently controlled by eight licensed electricity distribution companies EDTN EMD Each company is responsible for the exclusive distribution of electricity within
Slide 14: Supply Market Overview
Supply Market Overview Market Overview Key Facts Market Share All Users YTD December 2013 Supply market consists of Regulated and Electrica Furnizare 22.0% Competitive segments Others (<2.5%) 30.5% – The regulated segment comprises 5 companies, integrated within the same group as the corresponding
Slide 15: Agenda
Agenda I. Executive Summary II. Distribution segment overview III. Supply segment overview IV. Financials V. Corporate Governance VI. Q&A 15
Slide 16: EBITDA Contribution: Distribution and Supply
EBITDA contribution Distribution segment overview Distribution Supply EBITDA Contribution Supply 27% Distribution 73% The above split assumes that the negative EBITDA contributions for the Maintenance and Headquarter services are attributed proportionally to Supply and Distribution. 16
Slide 17: Distribution Highlights
Distribution Highlights Distribution segment overview Q3 2014 Regulated asset base (RAB) of RON 4,121mn 189,376 km of voltage lines (8,410 km HV; 45,775 km MV; 135,191 km LV) (H1 2014) Area of operation: 97,996 km2, 40.8% of Romania’s territory (Q3 2014) 3.60 mn users (Q3 2014) 12 TWh of e
Slide 18: EDTS Overview
EDTS Overview Distribution segment overview Overview Electrica Distributie Transilvania Sud (EDTS) is a Brasov based distribution subsidiary of Electrica National market share (Volume): 13% (Q3 2014) Area covered: 34,071 km2 (Q3 2014) Users: 1.1mn (Q3 2014) Financials commentary – Attracti
Slide 19: EDTS Overview (Cont’d)
EDTS Overview (Cont’d) Distribution segment overview Costs due to Network Losses Network Losses Network Losses (RON mn) (GWh) (%) 12.1% 12.2% 11.7% 797 813 11.2% 173 166 9.5% 9.5% 588 124 546 110 Reg. Actual Reg. Actual Reg. Actual 2012 Q3 2013 2013 Q3 2014 2012 Q3 2013 2013 Q3 2014 2012 2013 Q3 201
Slide 20: EDTN Overview
EDTN Overview Distribution segment overview Overview Electrica Distributie Transilvania Nord (EDTN) is a Cluj-Napoca based distribution subsidiary of Electrica National market share (Volume): 11% (2013) Area covered: 34,160 km2 (Q3 2014) Users: 1.2mn (Q3 2014) Financials commentary – Attra
Slide 21: EDTN Overview (Cont’d)
EDTN Overview (Cont’d) Distribution segment overview Costs due to Network Losses Network Losses Network Losses (RON mn) (GWh) (%) 11.9% 11.7% 11.7% 631 623 11.0% 138 10.5% 132 9.8% 9.5% 9.5% 431 419 92 84 Reg. Actual Reg. Actual Reg. Actual Reg. Actual 2012 Q3 2013 2013 Q3 2014 2012 Q3 2013 2013 Q3
Slide 22: EDMN Overview
EDMN Overview Distribution segment overview Overview Electrica Distributie Muntenia Nord (EDMN) is a Ploiesti based distribution subsidiary of Electrica – National market share (Volume): 15% (Q3 2014) – Area covered: 29,765 km2 (Q3 2014) Users: 1.3mn (Q3 2014 ) Financials commentary – Slight d
Slide 23: EDMN Overview (Cont’d)
EDMN Overview (Cont’d) Distribution segment overview Costs due to Network Losses Network Losses Network Losses (RON mn) (GWh) (%) 932 939 210 11.8% 11.5% 11.3% 10.9% 10.8% 175 665 9.5% 9.5% 620 9.6% 138 130 Reg. Actual Reg. Actual Reg. Actual Reg. Actual 2012 Q3 2013 2013 Q3 2014 2012 Q3 2013 2013 Q
Slide 24: Electrica Serv Financials
Electrica Serv Financials Distribution segment overview Description Revenues (RON mn) Electrica Serv, a wholly-owned subsidiary of Electrica, provides equipment maintenance, repair and other ancillary services to EDMN, EDTN and EDTS 403 396 As part of its growth strategy, Electrica Serv intends
Slide 25: Agenda
Agenda I. Executive Summary II. Distribution segment overview III. Supply segment overview IV. Financials V. Corporate Governance VI. Q&A 25
Slide 26: EBITDA Contribution: Distribution and Supply
EBITDA contribution Supply segment overview Distribution Supply EBITDA Contribution Supply, 27% Distribution, 73% The above split assumes that the negative EBITDA contributions for the Maintenance and Headquarter services are attributed proportionally to Supply and Distribution. 26
Slide 27: Supply Business Overview
Supply Business Overview Supply segment overview Leading Market Position1 Growing Number of Consumers Consumers (‘000’s) Regulated Market Competitive Market EF Alro 36% 12% Competitive Regulated EF 11% 3,549 3,561 3,566 3,582 Others 17 25 34 67 Tinmar 44% 8% E.ON OMV 13% Petrom Enel 5% 38% 3,532 3,5
Slide 28: Supply Segment Overview
Supply Segment Overview Supply segment overview Overview Consumers (Q3 2014) Electrica Furnizare is the supply company of Electrica Consumers by Volume Consumers by Revenues Market share: 22% (Q3 2014) Regulated Competitive Regulated Household, Household, Eligible, Competitive 50% Consumers: 3
Slide 29: Agenda
Agenda I. Executive Summary II. Distribution segment overview III. Supply segment overview IV. Financials V. Corporate Governance VI. Q&A 29
Slide 30: Background and Basis of Preparation
Background and Basis of Preparation Financials Historical consolidated financial statements prepared in accordance with International Financial Background Reporting Standards as endorsed by the European Union (IFRS-EU) The presentation currency is Romanian New Leu (RON) The Electrica group inc
Slide 31: Electrica – Key Consolidated Figures
Electrica – Key Consolidated Figures Financials Revenues Adjusted EBITDA and Adjusted EBITDA Margin (%) (RON mn) (RON mn) 12% 16% 14% 20% 30% 5,253 5,157 727 10% 302 414 684 3,864 613 634 -10% 3,466 306 220 -30% 4,951 4,743 -50% 3,558 3,246 -70% -90% 2012 Q3 2013 2013 Q3 2014 2012 Q3 2013 2013 Q3 20
Slide 32: Working Capital and Current Assets
Working Capital and Current Assets Financials Net Working Capital (2011–2013) (RON mn) Trade Receivables Inventories Trade Payables Net Working Capital (1) 34 35 1 27 628 746 1,011 1,058 458 744 494 300 313 2012 2013 Q3 2014 Net Current Assets (2011–2013) (RON mn) Current Assets (ex. Cash Current Li
Slide 33: Agenda
Agenda I. Executive Summary II. Distribution segment overview III. Supply segment overview IV. Financials V. Corporate Governance VI. Q&A 33
Slide 34: Shareholder Structure
Shareholder Structure Free float is 51.2% after the IPO, with the Romanian State retaining the rest. Before the IPO After the IPO – Structure as of August 26th 2014 7.6% 9.0% 100% 48.8% 34.6% Romanian State Other Shareholders Romanian State Legal Person Shareholders BNY MELLON DRS - London Stock Exc
Slide 35: Current Structure of the Board of Directors and its Committees
Current Structure of the Board of Directors and its Committees Victor Cionga – Chairman Arielle Malard de Rothschild Board Michiel Boersma Structure Victor Grigorescu Cristian Busu Note: The bios of the Board members may be found on Electrica’s website All five board members are non-exec
Slide 36: Upcoming General Meetings of Shareholders
Upcoming General Meetings of Shareholders OGMS - December 18th 2014, 14:00 Romania time, Bucharest, Romania When and Where EGMS - December 18th 2014, 16:00 Romania time, Bucharest, Romania Appointment of the auditor for 2 years Amendment of the articles of incorporation to remove “Societatea
Slide 37: Agenda
Agenda I. Executive Summary II. Distribution segment overview III. Supply segment overview IV. Financials V. Corporate Governance VI. Q&A 37
Slide 38: Q&A
Q&A ir@electrica.ro 38
Slide 39: Glossary of Key Terms
Glossary of Key Terms Term Description ANRE The Romanian Energy Regulatory Authority, the competent authority in Romania Cogeneration Production of combined heat and power in the same power plant COM Refers to controllable and uncontrollable operating and maintenance costs Connection point The physi
Slide 40: Glossary of Key Terms
Glossary of Key Terms Term Description Interconnection The means by which two electricity systems are connected and the amount of electricity that can move between the two systems kV Kilovolt(s) KWh Kilowatt hour(s) LV Low Voltage – upto 1kV A centralised market organised by the TSO to collect power