Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — FY2014 Earnings Presentation
35 slides from Edp's earnings presentation, Mar 4, 2015
Slide 1: Results Presentation 2014
Results Presentation 2014 Lisbon, March 4th, 2015 0
Slide 2: Disclaimer
Disclaimer This document has been prepared by EDP - Energias de Portugal, S.A. (the "Company") solely for use at the presentation to be made on the 4th of March 2015 and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where this
Slide 3: 2014: Highlights of the period
2014: Highlights of the period EBITDA: €3,642m, +1% YoY Iberia (ex-EDPR): EBITDA +1% excluding one-offs(1) Strong hydro, good energy management and tight cost control compensate regulatory cuts EDP Renováveis: EBITDA -2% New capacity additions not enough to compensate remuneration cuts and low power
Slide 4: 2014: Highlights of the period
2014: Highlights of the period Net debt decreased €41m YoY to €17.0bn in Dec-14 Including €0.4bn adverse forex impact due to stronger USD Regulatory receivables owed to EDP: -€0.2bn YoY to €2.5bn by Dec-14 Portuguese electricity system global regulatory receivables: €5.3bn by Dec-14, fully in line w
Slide 5: EDP's generation mix: Increasing weight of Hydro & Wind
EDP’s generation mix: Increasing weight of Hydro & Wind Installed Capacity(1) Generation Breakdown by Technology (GW) (TWh) % Chg. YoY % Chg. YoY +1% +2% 22.3 22.5 60.2 2% 58.8 Other (2) 2% -27% 1,6 12% Other (2) 2,3 Coal 12% +1% 14,5 Coal 14,3 CCGT 17% 17% 1,2 CCGT 1,4 -19% Hydro 34% 34% 23,2 Hydro
Slide 6: EBITDA Breakdown
EBITDA Breakdown EBITDA Breakdown by division Adjusted EBITDA in 2014 (€ million) (€ million) % Chg. YoY +1% EBITDA 3.642 €3,598m €3,642m Liberalized Activities Iberia 9% +25% 11% Brazil: Gain on Jari/CC disposal 131 EDP Brasil 17% +3% 17% Restructuring EDP Renováveis 26% -2% 25% Portugal 81 (net im
Slide 7: Operating costs: -1% YoY
Operating costs: -1% YoY Operating costs(2): 2014 vs. 2013 2014 YoY Inflation (3) (€ million) (%) Brazil EDPR Iberia -1% 1,551 1,533 292 284 -3% 5,4% 322 323 ~0% 937 926 -1% -0,3% -0,2% 2013 2014 Portugal Spain Brazil (IGP-M) Iberia: -1% YoY on successful execution of OPEX III program and headcount
Slide 8: Investments: Focus on new wind & hydro and Regulated networks
Investments: Focus on new wind & hydro and Regulated networks Net Investments breakdown by division (1) (€ million) -20% Includes €96m from acquisition of 5% minority stake in Naturgas €2,234m and €106m from acquisition of 3% stake in HC Energía Other 346 €1,794m 208 Generation & Other Brazil 324 81
Slide 9: Regulatory receivables in Portugal
Regulatory receivables in Portugal Global Regulatory receivables in the Portuguese electricity system (€bn) Owed to Financial Investors (Securitized) Owed to EDP +0.5 +0.8 +0.14 +0.05 +0.08 5.3 5.3 +0.23 +0.1 +0.1 4.8 +0.3 +0.3 4.0 3,0 2,4 1,9 2,2 2,4 2,3 Dec-12 1Q13 2Q13 3Q13 4Q13 Dec-13 1Q14 2Q14
Slide 10: Evolution of EDP's total regulatory receivables
Evolution of EDP’s total regulatory receivables EDP’s Net Regulatory Receivables (€ million) -€243m 2,710 2,747 2,504 Portugal (2) 2.197 2.422 2.315 Spain 424 264 2 Brazil (1) 89 61 187 Dec-12 Dec-13 Dec-14 Portugal: -€107m YoY (Securitisations: -€1,262m; Ex-ante deficit: +€1,534m; Net deviations(3)
Slide 11: EDP's Net Debt Breakdown: Dec-14
EDP’s Net Debt Breakdown: Dec-14 EDP consolidated net debt position: Dec-14 EDP consolidated debt by currency: Dec-14 (€ million) (%) PLN USD 4% raised at EDP Brasil 1% 17,042 Bank loans and capital markets; 22% BRL EDP Brasil Ring-fenced policy essentially ‘non- 731 5% recourse’ to EDP S.A. EDP Ren
Slide 12: 2014 Change in Net Debt
2014 Change in Net Debt Change in Net Debt: Dec-14 vs. Dec-13 (€ billion) Regulatory -€41m Receivables 17.08 1,7 0,4 17.04 0,8 0,7 2,7 0,2 2,5 14,3 14,5 Net Debt Free Cash Regulatory Dividends Paid Expansion Forex Net Debt Dec-13 Flow (1) Receivables and Capex & Dec-14 Securitizations Net Invest. (2
Slide 13: Financial Debt: Average cost and maturity profile
Financial Debt: Average cost and maturity profile Avg. Cost of Debt: 2014 vs. 2013 EDP consolidated debt maturity profile as of Dec-14 (%) (€ billion) Commercial paper Other subsidiaries(1) Avg. Debt Maturity: EDP SA + BV 4.0 years +30bp 4,7% Brazil: €400M 4,4% Project Finance: €138M 4,0 3,5 3,0 2,5
Slide 14: Financial Liquidity position
Financial Liquidity position (€ million) Sources of liquidity (Dec-14) Maximum Number of Instrument Utilised Available Maturity Amount counterparties Revolving Credit Facility 3,150 21 0 3,150 Jun-2019 Revolving Credit Facility 100 1 0 100 Dec-2016 Domestic Credit Lines 199 9 0 199 Renewable Underwr
Slide 15: Main sources and uses of funds
Main sources and uses of funds Sources of funds Use of funds Refinancing needs in 2015: Cash & Equivalents (Dec-14) : €2.6bn Bonds maturing in Mar-15 €1.0bn Bonds maturing in May-15 €0.25bn Available Credit Lines (Dec-14): €3.5bn Bonds maturing in Jun-15 €0.5bn Loans maturing in 2015: €1.0bn Total 2
Slide 16: Net Profit breakdown
Net Profit breakdown (€ million) 2013 2014 ∆% ∆ Abs. EBITDA 3,598 3,642 +1% +44 Extension of useful life for some thermal plants Net Depreciations and In 2014, includes impairments of ~€60m 1,480 1,449 -2% -30 Provisions EBIT 2,118 2,193 +4% +75 EDP Asia capital gain (€118m in 2014) Higher cost of d
Slide 17: 2014 Dividend Payment
2014 Dividend Payment EDP’s dividend performance 2011-2014E (€ cents; %) Dividend per share (€ cent) Dividend Payout Ratio (%) 67% 67% 65% 60% 18,5 18,5 18,5 18,5 2011 2012 2013 2014E Dividend 676 676 676 676 Amount (€M) €0.185 dividend per share, payout ratio of 65% (1) Source: Bloomberg Best Estim
Slide 18: Business Areas
Business Areas
Slide 19: Electricity market environment in Iberia: 2014 vs. 2013
Electricity market environment in Iberia: 2014 vs. 2013 Hydro & Mini-Hydro Power Production – Iberia (1) Avg. Pool Price in Spain (TWh) (€/MWh) FY FY 40 +11% 44 44 -5% 42 18 52 12 13 11 40 50 40 52 50 7 8 6 8 34 26 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1.17
Slide 20: Iberia: Electricity Demand
Iberia: Electricity Demand Electricity Demand in Iberian Market 2014 (1) Electricity demand Portugal (1) (∆% YoY) (∆% YoY) (2) % Weight in Iberia in 2014 Real Adjusted 3% 2,2% 2,0% 3Q14 2% 4Q14 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 1% 0,7% 100% 17% 83% 0,0% 0% 3Q13 4Q13 1Q14 2Q14 Iberian -1% Portugal Spain
Slide 21: Liberalised Energy Activities Iberia (11% EBITDA)
Liberalised Energy Activities Iberia (11% EBITDA) EDP Liberalised Power Plants Iberia – Production EDP Coal vs. CCGT – Load factors in 2014 and 2013 (TWh) (%) % Chg. YoY 2013 2014 +13% 15.0 13.3 8% 50 50 Nuclear 9% +4% 42% Hydro 32% +45% 4,4 3,5 Coal 48% 0% 43% CCGT 11% -19% 8% 2013 2014 Coal CCGT P
Slide 22: Liberalised Energy Activities Iberia (11% EBITDA)
Liberalised Energy Activities Iberia (11% EBITDA) EBITDA Liberalised Activities in Iberian Market Lower sourcing costs along with (€ million) long position in clients 3 hydro plants transferred from PPA/CMEC +25% Avg. generation cost -20% YoY on higher weight of hydro 416 Long position in clients: 3
Slide 23: Long Term Contracted Generation Iberia (18% of EBITDA)
Long Term Contracted Generation Iberia (18% of EBITDA) EBITDA Adjusted EBITDA (1) (€ million) (€ million) PPA/CMEC Special regime PPA/CMEC Special regime -6% -8% 717 717 671 659 -13% -13% -6% -8% 2013 2014 2013 2014 Adjusted EBITDA -8% on the transfer of 3 hydro plants from PPA/CMEC to liberalised m
Slide 24: Regulated Energy Networks Iberia (28% of EBITDA)
Regulated Energy Networks Iberia (28% of EBITDA) EBITDA Adjusted EBITDA (1) (€ million) (€ million) Gas Iberia Gas Iberia Electricity Spain Electricity Spain Electricity Portugal Electricity Portugal +2% +1% 1,023 1,042 976 967 -17% 0% -6% -8% +13% +3% 2013 2014 2013 2014 Electricity Portugal: Tight
Slide 25: EDP Renováveis (25% of EBITDA)
EDP Renováveis (25% of EBITDA): Growth from capacity additions mitigated by regulatory changes in Spain Installed Capacity Wind Power Production (2) EBITDA (MW) (GWh) (€ million) Iberia North America Other (1) -2% +5% +3% 921 8,149 19,187 19,763 903 7,756 -3% 35% 45% 40% 35% 37% -13% 36% +0% 12% +16
Slide 26: Brazilian Electricity System: 4Q14 environment
Brazilian Electricity System: 4Q14 environment Hydro Generation Scaling Factor (GSF) (%) 4Q14 developments 99% 2014: 91% Strong thermal dispatch in order to preserve hydro 96% 94% reservoirs / hydro GSF of 88% in 4Q14: GenCo’s deficit of 85% 88% R$9.1bn(2) in 4Q14 2013 1Q14 2Q14 3Q14 4Q14 Slight dec
Slide 27: EDP Brasil (17% of EBITDA)
EDP Brasil (17% of EBITDA): Reported EBITDA in local currency +12% YoY, adjusted EBITDA -18% YoY EDP Brasil reported EBITDA EDP Brasil Adjusted(1) EBITDA (BRL million) (BRL million) Generation & Other Distribution Generation & Other Distribution +12% -18% 1,933 1,723 1,614 1,326 +11% 922 832 724 ~0%
Slide 28: Outlook
Outlook
Slide 29: 2015 Outlook: Liberalised activities in Iberia
2015 Outlook: Liberalised activities in Iberia Iberia – Energy Demand YoY Growth, Jan/Feb-15(1) Spain - Wholesale Electricity Prices (%) (€/MWh) Real Thermal Demand 49,1 Adjusted 47,3 47,0 +111% 45,5 6,3% Hydro Portugal 42,6 2,0% 2,9% 2,4% -50% -0,2% Jan-Feb/15 2Q15 3Q15 4Q15 2016 Electricity Electr
Slide 30: Regulatory Receivables in Portuguese Electricity System; No tariff deficit expected for 2015
Regulatory Receivables in Portuguese Electricity System; No tariff deficit expected for 2015 Portugal: Electricity System Regulatory Receivables (€bn) ~0% 5,3 5,3 4,8 4,9 4,2 0,5 2013 2014 2015E 2016E 2017E 2020E 2014 Real 2015 ERSE Jan/Feb-15 Tariff surplus expected from Demand (YoY; %) -0.1% +1.8%
Slide 31: 2015 outlook: EDP Brasil
2015 outlook: EDP Brasil Adverse market environment Recent or Under Discussion Regulatory Measures Rainfall /Natural energy inflow (as % of historical average)(1): Spot price (PLD) new methodology: Cut on price cap Jan-15: 38% (worst January in 84 years); Feb-15E: 59% from R$822/MWh in 2014 to R$388
Slide 32: EDP is back to Investment Grade status
EDP is back to Investment Grade status following the recent credit rating actions Most recent Credit Rating Actions on EDP: EDP 5 year bond yield (%) Moody’s: Baa3 / stable outlook (investment grade) February 13th 2015: one notch upgrade 3,2 - “tariff deficit in Portugal is gradually stabilising…” 2
Slide 33: 2015 Outlook
2015 Outlook EBITDA Breakdown (%) > €3.6bn Hedging strategy based on forward sales with final customers Liberalised Assuming avg. hydro year, no material arbitrage opportunities 10% Activities Iberia Hydro capacity additions: +253MW in 1H15, +963MW in 2H15 Brazil 16% Does not assume electricity rati
Slide 34: A resilient business model in a challenging environment
A resilient business model in a challenging environment Resilient performance EBITDA +1% resilient performance under regulatory costs in Iberia and drought in Brazil enhanced by Net profit +4% gains on execution of CTG partnership, extraordinary energy tax in Portugal diversification Improving effic
Slide 35: IR Contacts
IR Contacts Miguel Viana, Head of IR Sónia Pimpão Elisabete Ferreira Ricardo Farinha João Machado Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Visit EDP Website Next Events Mar 3rd: Release of 2014 FY Results Site: www.edp.pt Mar 9th-10th: Citigroup European Utilities Conference in London Ma
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