CEZ As · PSECZ:CEZ
CEZ As — Investor Day (October 2008)
17 slides from CEZ As's investor day presentation, Oct 2, 2008
Slide 1: Financial Performance
FINANCIAL PERFORMANCE MARTIN NOVÁK Chief Financial Officer Capital Markets Day Prague, October 2nd, 2008
Slide 2: H1 2008 Results Confirmed Strong Growth Dynamics
H1 2008 RESULTS CONFIRMED STRONG GROWTH DYNAMICS EBITDA + 27 % EBITDA increased by 27 50 48.6 % y-o-y to CZK 48.6 bn 45 38.2 40 EBIT increased by 38 % 35 y-o-y to CZK 37.7 bn 30 25 20 Net income increased by 38 % y-o-y to CZK 29.0 H1 2007 H1 2008 bn (by CZK 7.9 bn) Net income + 38 % 29.0 ROE increas
Slide 3: EBITDA Increased by 27% Y-o-Y Driven Primarily by Generation and Trading Segment
EBITDA INCREASED BY 27% Y-O-Y DRIVEN PRIMARILY BY GENERATION AND TRADING SEGMENT CZK m Y-o-y comparison of EBITDA 55,000 50,000 603 526 9,453 75 -60 -34 -162 45,000 40,000 35,000 48,553 +10,399 m CZK +27 % 30,000 38,154 25,000 20,000 H1 2007 Generation and Distribution and Mining CE Other CE Product
Slide 4: Net Income Increased by CZK 7.9 bn Y-o-Y, i.e. by 38%
NET INCOME INCREASED BY CZK 7.9 BN Y-O-Y, I.E. BY 38 % Key drivers Higher generation from nuclear power plants, CZK bn 35 generation from coal 1.8 0.4 power plants reduced 9.7 due to limitations on 30 0.4 0.0 1.0 0.8 emissions of NOx, SO2 11.4 1.7 and dust and by 25 optimization with regards to high
Slide 5: Generation and Trading Remains the Largest and Most Dynamic Segment
GENERATION AND TRADING REMAINS THE LARGEST AND MOST DYNAMIC SEGMENT Contributions to EBITDA in H1 2008 CZK bn 60 50 1.8 0.0 2.6 3.1 0.1 4.7 40 36.3 48.6 30 20 10 0 Generation and Distribution and Mining CE* Others CE* Generation and Distribution and Others SEE* CEZ Group trading CE* sale CE* trading
Slide 6: Strong Results Enabled CEZ Group to Increase Its Guidance in August 2008
STRONG RESULTS ENABLED CEZ GROUP TO INCREASE ITS GUIDANCE IN AUGUST 2008 CZK bn + 16 % 100 90 + 17 % Key drivers: 80 70 EBITDA 60 Increase of generation volume 50 40 85.5 87.0 of CEZ Group nuclear and 75.3 30 64.3 water power plants 20 10 0 Optimizations of repair and 2006 2007 E2008 E+2008 maintena
Slide 7: Reasons for Increase in Guidance
REASONS FOR INCREASE IN GUIDANCE CZK bn + 1.5 90 Key drivers: 80 higher electricity EBITDA 70 prices 85.5 87.0 60 cost savings 50 40 higher volume of E2008 E+2008 electricity sales CZK bn E2008 E+2008 0 successful hedging FINANCIAL -1 NAP III EXPENSES/ -2 -3.5 -4.5 INCOME -3 + 1.0 sale of subsidiary
Slide 8: Our Current Leverage Is Low Compared to Industry Standards
OUR CURRENT LEVERAGE IS LOW COMPARED TO INDUSTRY STANDARDS Net debt/ EBITDA Multiples, 2007 CEZ Group 0.8 EdF 1.1 EnBW 1.3 E.ON 1.3 RWE 1.4 Endesa 2.6 Iberdrola 3.7 PPC 4.5 Enel 5.7 Industry average 2.5x 7
Slide 9: Generation of Operating Cash Flow Exceeds Our Investment Plans
GENERATION OF OPERATING CASH FLOW EXCEEDS OUR INVESTMENT PLANS CZK bn 120 100 80 60 40 20 0 2009 2010 2011 2012 2013 Net operating cash flow Cash flow from investing 8
Slide 10: Thus We Implemented Steps to Optimise Our Balance Sheet
THUS WE IMPLEMENTED STEPS TO OPTIMISE OUR BALANCE SHEET Target leverage will Net debt to EBITDA (x) enable us to reduce average 3.00 costs of capital allow us to maintain current strong credit rating A-/A2 2.0 -2.5 Tools to improve leverage 2.00 1. Organic capex 2. M&A and other development projects
Slide 11: Organic Capex Is Driven by Renewal of Czech Lignite Portfolio and New CCGT Plants
ORGANIC CAPEX IS DRIVEN BY RENEWAL OF CZECH LIGNITE PORTFOLIO AND NEW CCGT PLANTS 1. Expected CAPEX development (CZK bn) 100 Generation capex 90 growth driven by: 80 Portfolio plant 70 renewal in the Czech 60 Republic 50 New CCGTs in JV 40 with MOL and in Varna 30 Preparatory work for 20 new blocks
Slide 12: Modernisation of Tusimice and Construction of New Unit in Ledvice
MODERNISATION OF TUSIMICE AND CONSTRUCTION OF NEW UNIT IN LEDVICE IS PROGRESSING ACCORDING TO SCHEDULE AND BUDGET 1. Power plant Tusimice Power plant Ledvice Complex renewal (4 x 200 MWe) New supercritical unit (1 x 660 MWe) Components contracted Gradual renewal (2+2 units) Planning permission issue
Slide 13: Preparation of Modernization of Prunerov and of CCGT Projects Is Under Way
PREPARATION OF MODERNIZATION OF PRUNEROV AND OF CCGT PROJECTS IS UNDER WAY 1. Power plant Prunéřov Steam gas projects (Počerady) New construction PPC 440 / 880 MW Complex renewal (3 blocks x 250 MWe) Boiler room, generator room and Tenders for gas turbine supply, HRSG and desulphurization unit (FGD)
Slide 14: Recent M&A Deals and Pipeline Will Further Increase Cash Outflows
RECENT M&A DEALS AND PIPELINE WILL FURTHER INCREASE CASH OUTFLOWS 2. Recently closed deals Fantanele & Cogealac wind farms EUR 1.1 bn Acquisition of Sedas (proportionate share) EUR 205 m Pipeline Albania - Bid for 76% stake in distribution company EUR 102 m Romania – Bid for strategic partner for Ga
Slide 15: CEZ Is Committed to Maintain Its Payout Ratio of 50-60%
CEZ IS COMMITED TO MAINTAIN ITS PAYOUT RATIO OF 50 – 60 % 3. Payout ratio (%) Dividend policy targets payout ratio in the range 60% of 50% to 60% of the consolidated profit 50% 50% adjusted for 49% extraordinary items 41% 43% 40% 40% 30% 32% Dividend from 2007 + 100 % profit approved at CZK 40 per s
Slide 16: CEZ Completed CZK 67.3 bn Share Buyback Programme in May 2008
CEZ COMPLETED CZK 67.3 BN SHARE BUYBACK PROGRAMME IN MAY 2008 4. During completed share buyback program CEZ purchased 58.13 m of shares for CZK 67.3 bn. Average purchase price was CZK 1,158, which is 2.0 % lower than volume weighted average price for the same period. On 21st May 2008, shareholder me
Slide 17: Current Bond Maturity Profile & Funding Plans
CURRENT BOND MATURITY PROFILE & FUNDING PLANS Significant portion of the future leverage Bond Maturity Profile (CZK millions) increase will come from M&A and new 18,000 development projects with timing difficult 16,000 to predict 14,000 Acquisitions and new projects with EU-like 12,000 risk profiles