Admie Holdings Sa · ATHEX:ADMIE
Admie Holdings Sa — 7th Greek Investment Forum, New York, June 2018
62 slides from Admie Holdings Sa's conference presentation, June 2018
Slide 1: Corporate Presentation 2018
Corporate Presentation 2018 June 2018
Slide 2: Disclaimer
Disclaimer This document contains forward-looking statements that involve risks and uncertainties. These statements may generally, but not always, be identified by the use of words such as “outlook”, “guidance”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “target” and similar expressions to
Slide 3: Contents
Contents 1 ADMIE Holding & IPTO Overview 2 Transmission Outlook 3 Regulatory Framework 4 Financial Summary 5 Appendix (A,B,C)
Slide 4: '18 focus on transmission system growth
’18 focus on transmission system growth
Slide 5: Owned and maintained High-Voltage lines across Greece
11,732km Owned and maintained High-Voltage lines across Greece 11,722km is the distance between London, UK and Jakarta, Indonesia 5
Slide 6: Investment proposition
Investment proposition ▪ Natural monopoly in Greece ▪ Growth in the regulated asset base 11,732km of HV transmission lines RAB growth up to €2.1Β in 2021 ▪ Recovery in domestic demand ▪ Investments Consumption >52TWh highest in six years Investments approx. €1Β cumulative ’18-21 ▪ Leading TSO as sta
Slide 7: Overview
1. Overview ADMIE Holding trading vehicle for natural monopoly ADMIE (IPTO) 7
Slide 8: Corporate Structure Overview
Corporate Structure Overview Hellenic Silchester & Other Inst. Private ATHEX: ADMIE Republic Funds Investors Investors Bloomberg: ADMIE GA 51.1%* 12.9% 23.7% 12.3% 31.05.2018 Reuters: ADMr.AT 232,000,000 common shares Owner of 51% stake in 51.0% “Independent Power Transmission Operator S.A.” 25.0% 2
Slide 9: Key milestones
Key milestones August May February March April TSO legislation Full Ownership ADMIE Holding RAE: new Launch of Crete - (4001/2011) Unbundling law est. regulatory Peloponnese (4389/2016) review 2018-21 interconnection 2011 2012 2016 2017 2018 March December June March April ADMIE (IPTO) SGCC bid for
Slide 10: Corporate governance
Corporate governance Shareholder agreement in place ADMIE Holding ADMIE (IPTO) • AGM appoints Chairman & CEO • ADMIE Holding Proposes Chairman & CEO and Deputy CFO • BoD: 5 members 2 independent, 3 non-executive • State Grid Corp. of China (SGCC) Out of which 3 in key management positions in Approve
Slide 11: IPTO 2017 Highlights
IPTO 2017 Highlights • Electricity transmission +1.6% yoy • IPTO system rent +5% yoy on favorable 2H 52TWh comps Strongest demand since 2010 • EBITDA €172.0M, +13.1% yoy • Net profit €61.7M €172.0M • Net debt €234.4M* Reported EBITDA • Initiatives by new management well in-progress • RAE initiates n
Slide 12: IPTO Q1 '18 Highlights
IPTO Q1 ’18 Highlights • IPTO system rent €53.3M €63.6M Reported EBITDA • EBITDA €63.6M • Ad hoc provision release amounting to €26.6Μ due to dismissal of a contractor lawsuit €26.6M • Plan accelerating investments in place; Provision Release commissioning of 1st Phase of Cycladic islands interconne
Slide 13: ADMIE Holding Q1 '18 Highlights
ADMIE Holding Q1 ’18 Highlights • First quarterly results release €15.8M • Net profit €15.8Μ Net Profit • Management declares its intention to distribute interim dividend approximately €0.03 per share; final resolutions in June ~€0.03 per share Interim Dividend 2018 • In 2019 total dividend is expec
Slide 14: Transmission Outlook
2. Transmission Outlook 1st year of full ownership unbundling 14 14
Slide 15: Demand & transmission
TWh Demand & Market demand Demand mix 60.0 1.1 1.1 transmission 52.5 52.0 50.0 2.2 2.9 Losses 40.0 51.5 30.0 Commercial 50.1 50.9 exports • Highest demand in six 51.0 20.0 years 50.5 10.0 Consumption 0.0 • Consumption at 50.0 2010 2011 2012 2013 2014 2015 2016 2017 2016 2017 ~52TWh, back to 2010 lev
Slide 16: Supply & transmission
Supply & Supply mix (TWh) Supply mix 2017 EUR M Net imports Lignite transmission 60.0 50.0 51.2 +1.6% 52.0 6.2 Off-grid 12% NatGas 8.8 Hydro 4.7 RES* 9% 31% 40.0 4.7 5.8 5.5 0% RES 3.5 Hydro 30.0 4.8 11% 15.4 Other 20.0 12.5 NatGas 7% Off-grid 10.0 16.4 Lignite 30% 14.9 Net imports 0.0 • Net product
Slide 17: Development of the HETS
Development of the HETS Main Drivers ❖ Besides the needs of demand supply, the main drivers for the development of the Hellenic Electricity Transmission System are: • Interconnection of Greek islands (security of supply, reduction of the energy cost, environmental issues) • Accommodation of future R
Slide 18: Interconnection of the Islands
Interconnection of the Islands Main Objectives System stability Increase of security of supply for the islands electricity system • Drastic reduction of electricity generation cost in the islands Cost Reduction • Substitution of oil units with RES plants and imports from the mainland PSOs eliminatio
Slide 19: Overview of the TYNDP 2018 Major Projects
Overview of the TYNDP 2018 Major Projects Top 5 Projects - Works Commencing Before the End of 2018 Expected Total project ID Project description commissioni cost 2018- ng year 2027 (€ Μ) 1 Crete interconnection (Phase I) 2020 324.0 2 Crete interconnection (Phase II) 2023 713.3 2020 Cycladic Islands
Slide 20: TYNDP 2019-28 Major Projects
TYNDP 2019-28 Major Projects Cyclades Cyclades Cyclades Cyclades Phase A Phase B Phase C Phase D 2018 2019 2020 2021- 2022 2023 2024 Peloponnese Crete Crete Peloponnese 1st branch Phase I Phase II 2nd branch 20
Slide 21: Interconnection of Crete
Interconnection of Crete Phases I & II Attica Peloponnese II I DC 2x500MW AC 2x200MVA 340km submarine 132km submarine Crete Interconnection of Crete with the mainland through two distinct links The project is implemented in two phases (I, II) Phase I: Connection Peloponnese with Crete Phase II: Conn
Slide 22: Interconnection of Cyclades Phase A
Interconnection of Cyclades Phase A 150kV 66kV 150kV 200MVA Lavrio Tinos 150kV 140MVA Mykonos Syros Paros Radial Interconnection of Syros island with the mainland (Lavrio), Paros, Mykonos and Tinos islands. 11 islands in total connected to the mainland. Completed: April 2018 (Interconnection of Syro
Slide 23: Interconnection of Cyclades Phase B
Interconnection of Cyclades Phase B 150kV 66kV 150kV 200MVA Lavrio Tinos 150kV 140MVA Mykonos Syros Paros Naxos Interconnection of Naxos island with Paros and Mykonos islands (close loop between Syros-Mykonos- Naxos-Paros) Reinforcement of the existing interconnections Andros – Evia and Andros - Tin
Slide 24: Interconnection of Cyclades Phase C
Interconnection of Cyclades Phase C 150kV 66kV 150kV 200MVA Lavrio Tinos 150kV 140MVA Mykonos Syros Paros Naxos Construction of second submarine cable between Lavrio and Syros Expected completion: 2020 Estimated budget: ~ €102Μ Relevant tenders to be published during June 24 24 24 Source: ADMIE (IPT
Slide 25: Interconnection of Cyclades Phase D
Interconnection of Cyclades Phase D Expansion to the West and Southern Cycladic Islands Interconnection of Lavrio - Serifos – Milos – Folegandros - Thira – Naxos (or Paros). Estimated budget for Phase D: ~ €386Μ Expected completion: 2024 It creates an additional strong connecting route to all the Cy
Slide 26: Capex Estimation
EUR M Capex Estimation 2018 - 21 2018 - 28 800 700 350 324 600 300 500 Upgrade 250 30 200 189 175 400 324 Phase D 158 157 713 386 300 150 238 100 200 385 50 25 100 52 175 0 0 Crete I Crete II Cyclades Expansion Other System Other Projects Crete I Crete II Cyclades Expansion Other System Other Projec
Slide 27: Inauguration of Cyclades Phase A / Launch of Crete Interconnection
Inauguration of Cyclades Phase A “This is an excellent example of how a company under public control can accelerate projects, operate efficiently and thus contribute to the development of the national economy” March 2018 Launch of Crete – Peloponnese Interconnection “The Crete – Peloponnese Intercon
Slide 28: Regulatory Framework
3. Regulatory Framework New, 4yr regulatory period 2018 – 2021 28
Slide 29: Regulatory overview
Regulatory overview1 EUR 2017 2021 Comment Regulated Delta +50% €1.4B €2.1B Asset Base (RAB)2 c10% CAGR ’17-’21 Investments Cumulative ’18-’213 €1.0B (System & Users) Regulated Rate of 7.8% 6.7% Return Average 2015-17 Average 2018-21 Allowed remuneration €126M €130M 29 Regulatory depreciation €55M €
Slide 30: New 4yr regulatory period 2018 – 2021
New Regulated Asset & Rate of Regulatory overview (unchanged from prior) Return Regulatory Asset Base (RAB) 2,500.0 7.0% 6.9% 8.0% Maintenance & development investments + Working 6.5% 6.3% 7.0% Capital; no impairment/revaluation 2,000.0 6.0% 5.0% Allowed rate of return/WACC* 1,500.0 4.0% Sovereign r
Slide 31: Regulated Rate of Return
Regulated Rate of Return Regulatory WACC main components* 10.0% 9.5% 2021 5.1% 6.3% 8.2% 9.0% 8.5% 2020 5.0% 6.5% 8.3% 8.0% 7.8% 7.5% 7.0% 6.9% 2019 5.6% 6.9% 9.0% 7.0% 6.7% 6.5% 6.5% 6.0% 2018 5.3% 7.0% 9.0% 6.3% 5.5% 5.0% 2017 6.5% 7.3% 9.9% 2015 2016 2017 2018 2019 2020 2021 Average 2015-17 Avera
Slide 32: RAB cumulative 4yr evolution
EUR M RAB cumulative 4yr evolution Average RAB evolution Transmission/ 12.4% Interconnection CAGR ’18-’21 1,030 77 2,124 -227 2,060 1,941 1,545 -301 1,684 1,450 2018 2019 2020 2021 Transmission investment-driven asset growth 32 Source: RAE, ADMIE (IPTO)
Slide 33: Growing RAB remuneration
EUR M Allowed Revenue mix Allowed Revenue buildout Allowed Remuneration 9.7% CAGR ’18-’21 281 286 2021 28% 27% 45% 252 234 126 130 76 77 101 116 58 2020 28% 27% 45% 55 58 76 77 55 2019 31% 23% 46% 116 126 130 101 77 78 78 79 2018 33% 24% 43% 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 202
Slide 34: Financial Summary
4. Financial Summary 34
Slide 35: IPTO '18-'21 outlook
IPTO ’18-’21 outlook EUR 2017 2021 Regulated RAE: RAE: Asset Base (RAB)* €1.4B €2.1B Investments Approximately €1B 70.1M (System & Users) cumulative ’18-’21 EBITDA 172.0M Approximately 220M Net profit/(loss) 61.7M Approximately 85M 35 Dividend payout 50% At least 50%** 35 * Source: RAE, Resolution 2
Slide 36: 2017 Results
2017 Results 36
Slide 37: IPTO 2017 checklist
IPTO 2017 checklist EUR 2016 2017 Comment Regulated RAE impact reflected on €1.5B €1.4B 2018 RAB Asset Base (RAB)* Investments Backloaded due to 142.1M 70.0M unbundling process (System & Users) ✔ EBITDA 152.0M 172.0M In line with Outlook ✔ 37 Net profit/(loss) -2.7M 61.7M Higher than Outlook ✔ As pe
Slide 38: IPTO selected items
EUR M IPTO selected items Balance sheet 2016 2017 P&L 2016 2017 Chg yoy Non-current assets 1,617.4 1,607.4 System rent 225.5 236.9 5.0% Total revenues 248.6 256.5 3.2% Current assets 1,237.1 2,131.3 Reversals/(Provisions & of which: Cash & equiv.* 294.1 295.8 -7.3 -5.5 -23.9% Impairments) Total Asse
Slide 39: ADMIE Holding selected items
EUR M ADMIE Holding selected items Balance sheet 2017 P&L 2017 Non-current assets 519.6 Income from Affiliate 24.0 Current assets 2.8 EBITDA 23.0 of which: Cash & equiv. 2.2 Operating Income 23.0 Total Assets 522.4 Net profit 23.0 Cash flows 2017 Equity 518.7 CF from Operations -1.6 Interest-bearing
Slide 40: Revenue inflection
EUR M Revenue IPTO Revenues inflection 248.6 256.5 4.6 Transmission +3.2% 5.1 system rent 15.1 18.1 Other sales 236.9 225.5 3rd party sales • 2017 revenues +3.2% yoy 2016 2017 • System rent increase 2.5 3.0 Transmission 13.6 1.5 by €11.4M 10.7 system rent 2.5 4.4 4.5 Other sales • Favourable 2H 130.
Slide 41: EBITDA
EUR M EBITDA IPTO EBITDA 175.0 67.0% 68.0% recovery due to 170.0 165.0 +13.1% 67.0% 66.0% 65.0% system rent & 160.0 155.0 61.1% 172.0 64.0% 63.0% 62.0% efficiencies 150.0 145.0 152.0 61.0% 60.0% 59.0% 140.0 58.0% • EBITDA +13.1% yoy 2016 EBITDA 2017 As % of revenues • OpEx before Net Provisions and
Slide 42: Strong cash flow
EUR M IPTO Cash flow ladder Strong cash 172.0 35.5* 14.5 flow -57.1 94.7 69.9 -24.9 • Net debt €234M, flattish -70.1 in 2H’17 • Near-term debt maturities remain light prior to additional exercise IPTO debt maturity schedule 7.8 • ADMIE Holding has 127.5 collected interim €3.7M dividend; is expected
Slide 43: Net profit higher on various drivers
EUR M Net profit higher on various drivers IPTO Net profit 35.6 61.7 10.0 20.0 -1.1 -2.7 • EBITDA increase • Sharp drop in total financial expenses mainly due to IPTO net profit elimination of PPC debt guaranties 39.4 32.2 Net -4.1 29.5 profit/(loss) • Non-recurring -38.0 Tax on dividend-related tax
Slide 44: Cash flow generation
Cash flow EUR M 2016 2017 generation EBITDA 152.0 172.0 Chg in WC, Cash reserves excluding non-cash Provisions & Other* 65.5 35.5 the amount deposited to HEDNO pursuant to a Tax paid -10.0 -57.1 decision of the Ministry Interest paid, net -30.6 -24.9 of Finance's for the Cash Flow from Operations 17
Slide 45: Q1 '18 Results
Q1 ’18 Results 45
Slide 46: IPTO selected items
EUR M IPTO selected items Balance sheet 31.12. 2017 31.03.2018 P&L Q1 ’17 Q1 ’18 Chg yoy System rent 61.1 53.3 -12.8% Non-current assets 1,607.4 1,598.7 Total revenues 65.5 56.7 -13.5% Current assets 2,131.3 1,172.0 Reversals/(Provisions & -2.3 25.2 Impairments) Of which: Cash & equiv. 771.8 372.6 E
Slide 47: ADMIE Holding selected items
EUR M ADMIE Holding selected items Balance sheet 31.03.2018 P&L Q1 ‘18 Non-current assets 536.0 Income from Affiliate 15.9 Current assets 2.2 EBITDA 15.8 of which: Cash & equiv. 2.1 Operating Income 15.8 Total Assets 538.3 Net profit 15.8 Cash flows Q1 ‘18 Equity 534.5 CF from Operations -0.05 Inter
Slide 48: Revenue & EBITDA
EUR M Revenue IPTO Revenues IPTO EBITDA 70.0 112.1% EUR M 120.0% 66.5 60.0 +44.9% 100.0% & EBITDA 1.0 3.4 56.7 0.1 50.0 40.0 67.0% 80.0% 3.3 60.0% 63.6 • Revenues -13.5% yoy -13.5% 30.0 20.0 43.9 40.0% 61.1 • System rent decrease 53.3 10.0 20.0% 0.0 0.0% by €7.8M reflecting Q1 18 Q1 17 reduced invoi
Slide 49: Net profit higher on various drivers
EUR M Net profit higher IPTO Net profit 4.0 on various drivers -0.3 31.2 -6.8 19.7 • EBITDA increase due 14.6 to a provision release amounting to €26.6M due to dismissal of a contractor lawsuit • Drop in total financial expenses mainly due to improvement in IPTO Cash flow ladder 24.3 77.0 76.8 time
Slide 50: Cash flow generation
Cash flow EUR M Q1 ’17 Q1 ’18 generation EBITDA 43.9 63.6* Chg in WC, -30.9 24.3** Cash reserves excluding non-cash Provisions & Other the amount deposited to Tax paid - - HEDNO pursuant to a Interest paid, net -7.3 -0.3 decision of the Ministry Cash Flow from Operations 5.7 87.6 Subsidies 0 0 of Fi
Slide 51: Appendix A Regulatory
Appendix A Regulatory 51
Slide 52: New regulatory period 2018-21
EUR M 2018 2019 2020 2021 Average RAB 1,449.8 1,684.5 1,941.3 2,059.8 x WACC (real, pre-tax) 7.0% 6.9% 6.5% 6.3% = Allowed remuneration 101.5 116.2 126.2 129.8 + Authorized OPEX 77.3 77.9 78.5 79.1 + Regulatory Depreciation 55.2 58.3 76.4 77.1 = Allowed revenue 234.0 252.4 281.0 285.9 52 Source: RAE
Slide 53: WACC components
WACC components 2018 2019 2020 2021 Risk-free 0.7% 0.7% 0.7% 0.7% Market risk 5.0% 5.0% 5.0% 5.0% Equity beta 0.68 0.73 0.67 0.72 Country risk 2.3% 2.0% 1.8% 1.5% Cost of equity post-tax 6.4% 6.4% 5.9% 5.8% Tax rate 29.0% 29.0% 29.0% 29.0% Cost of equity pre-tax 9.0% 9.0% 8.3% 8.2% Cost of debt pre-
Slide 54: Regulatory Asset Base (RAB) and Allowed Revenue
EUR M Regulatory Period Four years Regulatory Asset Base Undepreciated invested capital + maintenance/ (RAB) development capex/ WiP + working capital - disposals - subsidies Allowed Revenue (AR) Operator's Allowed Revenue In real terms for each year AR = O + Dep + R O annual operating costs Dep annu
Slide 55: Appendix B: IPTO key financial items
Appendix B IPTO key financial items 55
Slide 56: IPTO P&L items
IPTO P&L items EUR M 2014 2015 2016 2017 Q1 ’18 System rent 242.3 239.7 225.5 236.9 53.3 Total revenues 312.6 264.6 248.6 256.5 56.7 Reversals/ (Provisions & - -25.1 -7.3 -5.5 25.2 Impairments) EBITDA 183.8 154.8 152.0 172.0 63.6* As % of revenues 58.8% 58.5% 61.1% 67.0% 112.1% Operating Income 130.
Slide 57: IPTO Balance sheet items
IPTO Balance sheet items EUR M 2014 2015 2016 2017 Q1 ’18 Non-current assets 1,537.7 1,597.8 1,617.4 1,607.4 1,598.7 Current assets 1,089.1 1,151.6 1,237.1 2,131.3 1,172.0 Total Assets 2,626.8 2,749.4 2,854.5 3,738.7 2,770.7 Total Equity 1,028.0 1,014.0 898.1 967.2 998.4 Interest-bearing liabilities
Slide 58: IPTO Free cash flow
IPTO Free cash flow EUR M 2014 2015 2016 2017 Q1 ’18 EBITDA 183.8 154.8 152 172.0 63.6* WC, Provisions & Other 23.7 66.4 65.5 35.5** 24.3** Tax paid -3.9 - -10 -57.1 - Interest, net -29.6 -31.2 -30.6 -24.9 -0.3 Cash Flow from Operations 174.0 190.0 177.0 125.5 87.6 Subsidies 1.1 17.8 80.6 14.5 - Cap
Slide 59: Appendix C SGCC
Appendix C SGCC 59
Slide 60: SGCC footprint & key economic interests
SGCC footprint & key economic interests ▪ State Grid Corp. of China (SGCC) World’s largest electric utility 900k km transmission lines in China CDP Reti ADMIE SGCC Global top2 Corp. on revenues* ▪ ADMIE (IPTO) in Greece REN 24% in 2017 TransCo ▪ CDP Reti (TERNA S.p.A.**) in Italy 35% in 2014 ▪ REN S
Slide 61: Thank you!
Thank you!
Slide 62: Contact
Contact For additional information please contact ADMIE Holding Investor Relations: Tel: +30 210 3636 936 E-mail: office@admieholding.gr or visit: www.admieholding.gr
ADMIE Holding — 7th Greek Investment Forum, New York, June 2018 on 6ix