Naturgy Energy Group, S.a. · BME:NTGY
Naturgy Energy — Gas Natural Fenosa — Q1 2011 Earnings Presentation
37 slides from Naturgy Energy's earnings presentation, May 5, 2011
Slide 1: First Quarter 2011 Results
First Quarter 2011 Results May 5, 2011
Slide 2: Disclaimer
Disclaimer This document may contain market assumptions, different sourced information and forward-looking statements with respect to the financial condition, results of operations, business, strategy and the plans of Gas Natural SDG, S.A. and its subsidiaries (GAS NATURAL FENOSA). Such assumptions,
Slide 3: Agenda
Agenda 1. Magnitudes 2. Main Issues 3. Summary of 1Q11 Results 4. Analysis of Operations 5. Conclusions 3
Slide 4: Magnitudes
Magnitudes 4
Slide 5: Magnitudes
Magnitudes 1Q11 Net Income: €387 million (+0.3%) 1Q11 EBITDA: €1,296 million (+0.2%) 1Q11 Investments: €234 million1 (-6.4%) Net Debt as of 31/03/2011: €18.2 billion (-13.8%) Note: 1 Tangible and intangible investments 5
Slide 6: Main Issues
Main Issues 6
Slide 7: Main Issues
Main Issues Update on gas contracts Energy markets Electricity business in Spain Completion of asset disposal plan Strengthening of balance sheet Shareholder remuneration 7
Slide 8: Update on gas contracts (I)
Update on gas contracts (I) Current situation with Sonatrach gas contracts Ruling appealed before Swiss Federal Court: stay of execution granted, price increases for past and present gas deliveries momentarily suspended GNF asked for the price revision for both contracts, which could have retroactiv
Slide 9: Update on gas contracts (II)
Update on gas contracts (II) Other current issues ● Gas procurement largely unaffected by recent events in North Africa and Middle East ● Sole impact on LNG deliveries from Lybia, which constitute a minor part of our procurement portfolio ● Ability to service our customers remains unaffected ● Using
Slide 10: Energy markets
Energy markets Brent ($/bbl) NBP (US$/MMbtu) 105.0 9.1 +37.8% +62.5% 76.2 5.6 Jan Feb Mar Jan Feb Mar Spanish pool (€/MWh) €/US$ 45.2 1.37 +78.0% -0.7% 1.38 25.4 Jan Feb Mar Jan Feb Mar Avge. for the quarter 2010 2011 Overall rise in energy prices vs. 1Q10 10
Slide 11: Electricity business in Spain
Electricity business in Spain Higher costs of electricity in 1Q11 Average pool price (€/MWh) Production (GWh) +78.0% 45.2 +19.0% -14.4% 6,714 1,977 5,643 1,693 25.4 1Q10 1Q11 1Q10 1Q11 1Q10 1Q11 CCGT Hydro Electricity sales (GWh) -11.2% 11,231 9,978 ● Lower hydro generation levels bring an increase
Slide 12: Completion of asset disposal plan (I)
Completion of asset disposal plan (I) Asset disposals completed to date Financial stakes • 5% in Cepsa, 18% in Indra, 5% in Enagas, (no EBITDA contribution) 4.4% in Isagen, 1% in REE • 2.2 GW CCGT in Mexico • 64% stake in EPSA (Colombia) Other assets • Transportation assets sold to REE • 35% of Gas
Slide 13: Completion of asset disposal plan (II)
Completion of asset disposal plan (II) Agreed and pending authorisation • Sale of 300,000 gas distribution points in Gas distribution points Madrid • Price: €435 million • Sale of 800 MW CCGT at Arrúbal CCGTs • Price: €313 million • Transaction involves gas supply and power offtake contract Nearing
Slide 14: Strengthening of balance sheet (I)
Strengthening of balance sheet (I) Securitisation of tariff deficit (€ million) 16,194 13,014 6,180 3,000 Pending securitisation as Securitised and collected Ex-ante deficit for 2011 Pending securitisation as of 31/12/10 as of 31/03/11 of 31/03/11 ● €671 million collected by GNF to date from the thr
Slide 15: Strengthening of balance sheet (II)
Strengthening of balance sheet (II) Debt reduction (€ billion) -6.3% 17.4 16.3 ● Debt reduction achieved through both asset disposals and cash flow generation Adjusted Net Debt1 Adjusted Net Debt2 31/12/10 31/03/11 Delivering on debt reduction target according to plan Notes: 1 After securitisation o
Slide 16: Strengthening of balance sheet (III)
Strengthening of balance sheet (III) Considerations on ratings FFO / Adjusted Net Debt1 EBITDA / Cost of Debt1 +3.1pp +0.5x 20.9% 5.8x 5.3x 17.8% 1Q10 1Q11 1Q10 1Q11 ● Solid business risk profile (~70% EBITDA regulated/quasi-regulated) ● Limited exposure to other European utilities’ risks (nuclear,
Slide 17: Shareholder remuneration
Shareholder remuneration Scrip dividend approved by AGM Shareholder remuneration Scrip dividend proposal approved (€ million) by AGM on 14th April +1.0% 0.80 0.792 730 737 Both core shareholders confirmed their intention to receive the final Scrip1 dividend in shares 413 Transaction calendar r
Slide 18: Summary of 1Q11 Results
Summary of 1Q11 Results 18
Slide 19: Consolidated income statement
Consolidated income statement (€ million) 1Q11 1Q10 Change % Net sales 5,357 5,084 5.4 Purchases (3,487) (3,272) 6.6 Gross Margin 1,870 1,812 3.2 Personnel, Net (220) (197) 11.7 Other expenses, Net (354) (321) 10.3 EBITDA 1.296 1,294 0.2 Depreciation (439) (407) 7.9 Provisions (37) (36) 2.8 Operatin
Slide 20: Consolidated investments
Consolidated investments Tangible and intangible (€ million) 1Q11 1Q10 Distribution Europe: 97 70 Electricity 33 33 Gas 64 37 By Activity Electricity: 48 103 Spain 43 79 Distribution Other Europe Special Regime 5 24 LatAm - 11.5% 41.5% Other - 22.2% Gas: 10 11 Infrastructures 5 11 Supply 5 - LatAm:
Slide 21: Net debt
Net debt (€ billion) 18.21 (1.4) (0.4) 16.3 Tariff Deficit Agreed disposals Net Debt/EBITDA 3.6x Leverage 55.4% Net Debt Adjusted Net Debt2 31/03/11 as of 31/03/11 Evidence of continued strengthening of capital structure Notes: 1 €18.0 billion plus accounting effect of adding 50% of Eufer’s attribut
Slide 22: Debt breakdown
Debt1 breakdown Fixed/Floating Currency Fixed 8% 11% Euro Floating 29% US$ Other 71% 81% Source Capital markets 38% 52% Bank loans Institutional banks 10% Fixed/floating, source and currency mixes provide a well-balanced financial risk profile Note: 1 Adjusted net debt 22
Slide 23: Debt maturity schedule
Debt maturity schedule Adjusted net debt (€16.3 billion1) (€ million) 10,560 2,290 982 1,321 1,190 2011 2012 2013 2014 2015+ €600 million, 6-year bond issue in January 2011 Average life of debt: 5.0 years 65% of net debt maturing from 2015 onwards Note: 1 Less tariff deficit of €1.44 billion and
Slide 24: Analysis of Operations
Analysis of Operations 24
Slide 25: EBITDA breakdown
EBITDA breakdown Change (€ million) 1Q11 1Q10 €m % Distribution Europe: 434 413 21 5.1 Electricity 173 155 18 11.6 Gas 261 258 3 1.2 Electricity: 295 338 -43 -12.7 Spain 251 292 -41 -14.0 Special Regime 40 42 -2 -4.8 Other 4 4 - - Gas: 262 249 13 5.2 Infrastructures 66 66 - - Supply 196 183 13 7.1 L
Slide 26: Distribution Europe: Electricity
Distribution Europe Electricity Operating figures +1.0% 4,536 4,490 -1.1% 10,012 9,905 Investments made in service +5.2% 633 666 quality and maintenance bring TIEPI in Spain to a record low of 10 minutes (-54.5% vs 1Q10) 9,379 9,239 -1.5% Connection points continue to grow in Spain 1Q10 1Q11 TPA
Slide 27: Distribution Europe: Gas
Distribution Europe Gas Operating figures 6,134 -6.8% 5,718 Lower residential gas sales in Spain as a result of a milder 1Q11 vs 1Q10 66,784 -5.6% 63,032 1,677 +2.1% Network expansion continues in Spain 1,713 with 83,700 new connection points (disregarding recent disposals) -5.8% 65,107 61,319
Slide 28: Electricity: Spain
Electricity Spain Total GNF’s production (GWh) 9,494 +10.9% 10,526 698 (-5.9%) 742 1,693 (-14.4%) 1,977 5,643 1,099 (+4.2%) 6,714 1,055 (+19.0%) 322 (+318.2%) 1Q10 1Q11 77 CCGTs Other thermal Nuclear Hydro Special Regime Higher thermal gap in 1Q11 leads to +20% thermal-based production (+12.3% in
Slide 29: Electricity: Special regime
Electricity Special regime Total production1 (GWh) Lower wind intensity and rainfall in -5.9% 1Q11 vs 1Q10 lead to a drop in production 742 698 -1.8% 111 109 Continuing development of wind- 112 -14.3% 96 powered capacity: 848 MW already awarded, in development phase 519 493 -5.0% Tenders sub
Slide 30: Gas: Infrastructures
Gas Infrastructures Gas volumes from Maghreb pipeline UF Gas1 (GWh) (GWh) +12.6% 26,659 +3.7% 23,674 35,232 36,540 -17.1% 11,949 14,417 +58.9% 14,710 9,257 1Q10 1Q11 1Q10 1Q11 Liquefaction Regasification EBITDA remains stable at €66 million Note: 1 100% attributable 30
Slide 31: Gas: Supply
Gas Supply Gas supply (GWh) UF Gas1 (GWh) +2.3% 86,908 +5.2% 21,781 84,986 20,712 +15.5% 15,546 17,963 -10.8% 6,709 +5.0% 7,525 14,521 15,240 -25.4% 19,650 14,665 +14.3% 15,072 +10.7% 13,187 35,268 39,039 1Q10 1Q11 1Q10 1Q11 Third Party Supply and Industrial Spain International Residential CCGTs Int
Slide 32: Latin America: Electricity generation
Latin America Electricity generation Total production (GWh) -15.3% 5,328 Disregarding the CCGT disposals in 4,513 2010, production in Mexico would 650 +10.3% rise 1,242 GWh (+26.6%) and 717 division EBITDA +45% on a like for like basis after commissioning of Norte Durango CCGT -18.9% 4,678 3,796
Slide 33: Latin America: Gas distribution
Latin America Gas distribution Operating figures +4.6% 5,709 EBITDA contribution and 5,458 growth by country (Total €141 million, +7.6%) 43,940 +4.7% 45,998 Mexico Argentina €30 million €2 million (+7.1%) (-50.0%) +0.7% 25,541 25,371 +10.2% Colombia Brazil 18,569 20,457 €35 million €74 million (+0.0
Slide 34: Latin America: Electricity distribution
Latin America Electricity distribution Operating figures EBITDA contribution and 4,704 +5.0% 4,937 growth by country (Total €71 million, -18.4%) 4,435 +1.3% 4,491 Guatemala Nicaragua €17 million €8 million +3.5% (+13.3%) (+33.3%) 1,948 2,017 -0.5% 2,487 2,474 Panama €20 million Colombia (+17.6%) €26
Slide 35: Conclusions
Conclusions 35
Slide 36: Conclusions
Conclusions EBITDA 1Q11: €1,296 million (+0.2%) Net Income 1Q11: €387 million (+0.3%) Almost complete execution of committed asset sales program Strengthening capital structure with a well-balanced financial risk profile Working towards fulfillment of 2010-14 Strategic Plan targets 36
Slide 37: Thank you
Thank you INVESTOR RELATIONS telf. 34 934 025 891 fax 34 934 025 896 e-mail: relinversor@gasnaturalfenosa.com website: www.gasnaturalfenosa.com 37