Naturgy Energy Group, S.a. · BME:NTGY
Naturgy Energy — H1 2020 Earnings Presentation
33 slides from Naturgy Energy's earnings presentation, Jul 22, 2020
Slide 1: 1H20 Results
1H20 Results 22 July 2020
Slide 2: Agenda
COVID-19 challenges and response 1H20 consolidated results 1H20 results by business unit Summary 1H20 and Outlook Accelerating the transformation 2
Slide 3: COVID-19 challenges and response
COVID-19 challenges and response
Slide 4: Evolution of 2020 GDP estimates
1.1 World Argentina Source: Bloomberg United States -12% -8% -4% 0% -4% 0% 4% -8% -4% 0% 6-Jan 6-Jan 6-Jan 1. COVID-19 challenges and response 27-Jan 27-Jan 27-Jan 17-Feb 17-Feb 17-Feb 9-Mar 9-Mar 9-Mar 30-Mar 30-Mar 30-Mar 20-Apr 20-Apr 20-Apr 11-May 11-May 11-May 01-Jun 01-Jun 01-Jun 22-Jun 22-Jun
Slide 5: Evolution of EUR vs. FX (avg. 1H20 vs. 1H19)
1. COVID-19 challenges and response 1.2 Evolution of EUR vs. FX (avg. 1H20 vs. 1H19) Chile Brazil Argentina 15% 19% 38% 0.0013 0.23 0.0011 0.02 0.19 0.01 1H19 1H20 1H19 1H20 1H19 1H20 Mexico Panama 8% 3% 0.05 0.88 0.91 0.04 1H19 1H20 1H19 1H20 COVID-19 Widespread has had andanunprecedented important
Slide 6: Evolution of electricity and gas demand
1. COVID-19 challenges and response 1.3 Evolution of electricity and gas demand (% weekly variation vs. previous year) Weekly avg. 1H20 vs. 1H19 Spain 9% Chile 1% Panama 8% Brazil 17% 10% 10% 20% 40% 10% 20% 0% 0% 0% 0% -10% -10% -10% -20% -20% -20% -20% -40% 30-Mar 30-Mar 30-Mar 30-Mar 11-May 11-Ma
Slide 7: Evolution of energy markets (avg. 1H20 vs. 1H19)
1. COVID-19 challenges and response 1.4 Evolution of energy markets (avg. 1H20 vs. 1H19) Spanish electricity market Brent (USD/bbl) NBP (USD/MMBtu) (Pool) (€/MWh) 66.0 40% 5.2 54% 51.8 44% 29.0 39.7 2.4 1H19 1H20 1H19 1H20 1H19 1H20 Henry Hub (USD/MMBtu) JKM (USD/MMBtu) CO2 (€/t) 3.0 35% 7.0 46% 8%
Slide 8: Key company social responses
1. COVID-19 challenges and response 1.5 Key company social responses Focus on health, safety and wellbeing Employees Remote work except critical services Roadmap for a safe return to work Free supply to 36 hospitalized hotels and residences Society Free repairs for up to 1.3m beneficiaries (frontlin
Slide 9: Key company operating responses
1. COVID-19 challenges and response 1.6 Key company operating responses Reinforce financial structure Increased liquidity by ~€2bn from Dec-19 Liquidity (€bn) Jun-20 Cash and equivalents ~4 Undrawn credit lines ~6 Total ~10 Enhance opex control Alignment of opex with business evolution Identificatio
Slide 10: 1H20 consolidated results
1H20 consolidated results
Slide 11: Key highlights
2. 1H20 consolidated results 2.1 Key highlights Key figures (€m, % vs. 1H19) Results impacted by overall environment: energy demand, Ordinary EBITDA Ordinary Net Income commodity prices and FX New regulatory framework in electricity distribution Spain and volume step down in the EMPL 2,037 -11% 490
Slide 12: EBITDA evolution by business unit (€m)
2. 1H20 consolidated results 2.2 EBITDA evolution by business unit (€m) 11% 115 2,291 2,176 1 2 2,037 (109) (75) 1,870 (73) (167) Including the following FX impacts: -€1m €3m -€82m -€7m FX: -€87m EBITDA Non-ordinary Ordinary Gas & Power Infra. EMEA Infra. LatAm Infra. LatAm Corporate Ordinary Non-or
Slide 13: Ordinary EBITDA evolution by key drivers (€m)
2. 1H20 consolidated results 2.3 Ordinary EBITDA evolution by key drivers (€m) 11% 2,291 49 2,037 (106) (87) (35) (32) (19) (24) Ordinary Demand FX EMPL Regulation Tariff/ Other Opex Ordinary EBITDA step down prices EBITDA 1H19 1H20 Results mainly impacted by energy demand, regulatory changes and FX
Slide 14: Net Income evolution (€m)
2. 1H20 consolidated results 2.4 Net Income evolution (€m) 111 703 30% 592 48 490 (261) 334 (156) Net Non-ordinary Ordinary Operations Financial result Ordinary Non-ordinary Net income items net & others net items income 1H19 income income 1H20 1H19 1H20 Net Income also impacted by additional provis
Slide 15: Cash flow and net debt evolution (€m)
2. 1H20 consolidated results 2.5 Cash flow and net debt evolution (€m) Cash flow Net debt 1H20 vs. 1H19 (%): avg. cost of debt2 Ordinary EBITDA 2,037 -11% Non-ordinary items (167) 3.2% 2.8% EBITDA 1,870 -14% Taxes (61) Net interest cost (279) 15,268 764 294 14,920 Other non-cash items (231) (305) (1
Slide 16: ESG results
2. 1H20 consolidated results 2.6 ESG results Accidents with lost time (units) Closure of coal plants in Spain Supporting decarbonization efforts 1 88% Developing new renewables instead GHG Emissions (M tCO2 e) 6.7 14% Launch of Sustainability Committee Board of Directors level Emission factor (t CO2
Slide 17: 1H20 results by business unit
1H20 results by business unit
Slide 18: Gas & Power
3. 1H20 results by business unit Gas & Power EBITDA evolution by business line (€m) Highlights 43 708 665 Gas, Power & services sales: lower sales and margin 23 599 (53) 547 pressure in gas prevail over higher power margins (67) (12) (52) International LNG: temporary increase of shorter term - -€1m
Slide 19: Infrastructure EMEA
3. 1H20 results by business unit Infrastructure EMEA EBITDA evolution by business line (€m) Highlights 51 970 919 895 Spain gas networks: lower regulated revenues due to 822 (27) (19) (29) mild weather (73) - - €3m Spain electricity networks: lower financial remuneration due to new regulatory period
Slide 20: Infrastructure South LatAm
3. 1H20 results by business unit Infrastructure South LatAm EBITDA evolution by business line (€m) Highlights 449 1 450 Chile electricity: lower demand and perimeter changes 377 371 (33) (18) (21) (1) (6) Chile gas: lower supply sales compensated by tariff -€22m -€9m -€24m -€27m indexation Brazil ga
Slide 21: Infrastructure North LatAm
3. 1H20 results by business unit Infrastructure North LatAm EBITDA evolution by business line (€m) Highlights 189 1 190 4 191 189 Mexico gas: lower demand and FX compensated by tariff (3) (2) updates -€9m €2m Panama electricity: lower demand partially FX: -€7m compensated by FX and operational impro
Slide 22: Summary 1H20 and Outlook
Summary 1H20 and Outlook
Slide 23: Summary 1H20
4. Summary 1H20 and Outlook 4.1 Summary 1H20 Results impacted by overall environment: energy demand, commodity prices and FX New regulatory framework in electricity distribution Spain and volume step down in the EMPL Cash flow and liquidity management as a priority Swift company response at the oper
Slide 24: Outlook
4. Summary 1H20 and Outlook 4.2 Outlook €Bn 4.7 Market assumptions (0.2) ~4.0 (0.2) (0.1) Average prices 1H20 2H20E (0.2) Brent (USD/bbl) 39.7 40.1 Henry Hub (USD/MMBtu) 1.9 2.0 NBP (USD/MMBtu) 2.4 2.7 Spot Asia (USD/MMBtu) 3.8 2.9 Pool (€/MWh) 29.0 35.6 CO2 (€/t) 22.0 22.1 Ordinary Demand FX EMPL O
Slide 25: Accelerating the transformation
Accelerating the transformation
Slide 26: Achievements in the first stage of the Strategic Plan
5. Accelerating the transformation 5.1 Achievements in the first stage of the Strategic Plan Simplicity & accountability Optimization More transparency Capturing efficiencies: target achieved 2 years in advance Organisation with greater accountability Optimization of non-core processes Elimination o
Slide 27: Next stage of transformation
5. Accelerating the transformation 5.2 Next stage of transformation Reduce the risk profile Redefine operations Asset rotation, in line with the energy transition, Focus on customers focus on strong currencies and cash flow visibility Optimize and digitalize core processes Establish win-win relation
Slide 28: Appendix
Appendix Naturgy y 28
Slide 29: Alternative Performance Metrics (i/ii)
Appendix: 1. Alternative Performance Metrics 1 Alternative Performance Metrics (i/ii) 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
Slide 30: Alternative Performance Metrics (ii/ii)
Appendix: 1. Alternative Performance Metrics 1 Alternative Performance Metrics (ii/ii) Alternative performance Reconciliation of values Definition and terms Relevance of use metrics 30 June 2020 30 June 2019 Current and non-current financial debt Gross financial debt - "Cash and cash Euros 14,920 mi
Slide 31: ESG Metrics
Appendix: 2. ESG Metrics 2 ESG Metrics ESG metrics 1H20 1H19 Change Comments Health and safety Significant improvement linked to he implementation of the Plan Naturgy 2019, Accidents with lost time (1) units 1 8 -87.5% as well as the impact from remote work during 2Q20 Reflects the reduction in acci
Slide 32: Disclaimer
Disclaimer This document is the property of Naturgy Energy Group, S.A. (Naturgy) and has been prepared for information purposes only. This communication contains forward-looking information and statements about Naturgy. Such information can include financial projections and estimates, statements reg
Slide 33: Capital Markets contact
This presentation is property of Naturgy Energy Group, S,A, Both its content and design are for the exclusive use of its personnel, ©Copyright Naturgy Energy Group, S,A CAPITAL MARKETS tel, 34 912 107 815 e-mail: capitalmarkets@naturgy,com website: www,naturgy,com