Societatea Energetica Electrica S.A. · BVB:EL
Societatea Energetica Electrica — FY2023 Earnings Presentation
76 slides from Societatea Energetica Electrica's earnings presentation, Mar 11, 2024
Slide 1: Presentation of Q4/12M 2023 Financial Results
Presentation of Q4/12M 2023 Financial Results (acc. OMFP 2844/2016) Bucharest, 11 March 2024 Public
Slide 2: Content
Content 1 Electrica Group’s overview 2 Group’s Financial Results FY 2023 3 Main Corporate Events in 2023 4 Group Strategy Implementation 5 Shareholdings’ Structure and Evolution of the Shares & GDRs 6 Appendices ➢ Regulatory Aspects - Distribution ➢ Regulatory Aspects - Supply 2 Public
Slide 3: Disclaimer
DISCLAIMER The results presented are based on the consolidated financial statements prepared in accordance with the Order of the Minister of Public Finance no. 2844/2016 for the approval of the Accounting Regulations compliant with the International Financial Reporting Standards, as subsequently ame
Slide 4: Electrica Group overview
1 Electrica Group overview 4 Public
Slide 5: Electrica is the most important national distribution operator and electricity supplier
Electrica Group overview Electrica is the most important national distribution operator and the electricity supplier with the largest places of consumption Electricity Supply Geographical presence ~3.5 millions Total market share Energy supplied on % retail market places of 17.96% (Dec 2022) 8.6 TWh
Slide 6: Group structure
Group structure Electrica Group overview Electrica Group is the only Romanian group listed on the BSE & LSE which operates within energy production, distribution, supply & energy service segments Distributie Energie Electrica 99.99% 2) Electrica Furnizare S.A. 99.99%2) Romania S.A. Distribution Oper
Slide 7: Electrica showcases remarkable performance following its 2014 dual listing
Electrica Group overview Electrica showcases remarkable performance following its 2014 dual listing ➢ Electrica is the only listed Romanian company active in electricity distribution, supply and production in Romania. Its listing in July 2014 on was the largest primary initial public offering in Rom
Slide 8: Corporate Governance Bodies
Corporate Governance Bodies Electrica Group overview • Mr. Dumitru Chirita – Chair Board of • Mr. Dragos-Valentin Neacsu – Vice Chair (independent) Directors • Mr. Adrian-Florin Lotrean – Vice Chair (independent) Current • Mr. Ion-Cosmin Petrescu Composition (since 26 January • Mr. Georgiana Bogasie
Slide 9: Corporate Governance Bodies - Non-Executive Management
Electrica Group overview Corporate Governance Bodies - Non-Executive Management Board of Directors - Current composition Composition Mr. Dumitru Chirita Chair Mr. Dragos Neacsu Mr. Adrian Lotrean Vice Chair Vice Chair Mr. Ion Cosmin Petrescu Ms. Georgiana Bogasievici Mr. Cristian Mocanu Ms. Valentin
Slide 10: Corporate Governance Bodies – Executive Management
Electrica Group overview Corporate Governance Bodies – Executive Management Executive Management Mr. Alexandru- Aurelian Chirita Chief Executive Officer 2017 2018 Ms. Livioara Sujdea Mr. Stefan Frangulea Ms. Andreea Lambru Chief Distribution Chief Financial Officer Chief Business Officer Development
Slide 11: Leading Player in Distribution and Supply
Leading Player in Distribution and Supply Electrica Group overview Distribution Supply Volumes Distributed in 2022 Volumes Supplied in 2022 Volumes Supplied in 2023 (Jan-Nov) 13.3% 17.96% 16.61% DEER_MN DEER_TN ELECTRICA FURNIZARE 12.7% DEER_TS Others 44.7 TWh 47.19TWh 42 TWh Altii 60.3% 13.7% 82.04
Slide 12: Group's financial results
2 Group’s financial results (2023 and Q4 2023) (acc. OMFP 2844/2016) 12 Public
Slide 13: Summary Consolidated Financials – OMFP 2844/2016
Summary Consolidated Financials – OMFP 2844/2016 Group’s financial results Revenues EBITDA Growth and Margin Performance (RON mn.) EBITDA (RON mn.) and EBITDA Margin (%) 10,010 9,817 609 543 2,00 0 17.7% 20. 0% 1,80 0 18.0% 18. 0% 1,60 0 13.6% 16. 0% 1,40 0 14. 0% 1,20 0 12. 0% 1,00 0 10. 0% 9,401 9
Slide 14: Consolidated EBITDA and Net Result Evolution
Consolidated EBITDA and Net Result Evolution – OMFP 2844/2016 Group’s financial results EBITDA (RON mn.) Consolidated EBITDA variation 2023 vs. 2022 is RON 370 mn., being mainly the cumulative effect of the following factors: ❑ The positive variation of the energy margin RON +1,445 mn., out of which
Slide 15: Distribution Segment – Highlights
Distribution Segment – Highlights – OMFP 2844/2016 Group’s financial results Financial results Key figures 2023 EBITDA increased by RON 437 mn., mainly as a result of the evolution of the indicators below: ▲ increase in energy margin by RON 1.554 mn., as a net effect of: ~3.93 mil users* ▲ increase
Slide 16: Distribution segment – main aspects
Group’s financial results Distribution segment – main aspects (OMFP 2844/2016) Relevant regulatory information: Distributed energy margin Distribution tariffs [RON/MWh] • At the beginning of the current PR4 regulatory period, ANRE made a total (RON mn.) 34,72 negative correction to close PR3 in the
Slide 17: RRAB Analysis for distribution segment for 2023
RRAB Analysis for distribution segment for 2023 (RON mn.) Group’s financial results 17 Public
Slide 18: Analysis of Regulated Net Result 2023
Analysis of Regulated Net Result 2023 – OMFP 1802/2014 – OMFP 2844/2016 Group’s financial results for the Distribution Segment 18 Public
Slide 19: DEER - TN
Group’s financial results DEER - TN Key figures 2023 Network losses cost Network losses (RON mn) (GWh) ~1.37 mn users 649 639 633 71,470 km 34,162 km2 voltage lines coverage area 296 312 595 RAB: RON 2.4 bn (est.) 5.57 TWh (-1.7%) 2021 2022 2023 2021 2022 2023 distributed energy Distributed volumes
Slide 20: DEER - TS
Group’s financial results DEER - TS Key figures 2023 Network losses Network losses cost (RON mn) (GWh) ~1.22 mn users 692 59,538 km 34,072 km2 548 549 573 voltage lines coverage area 354 300 RAB: RON 2.2 bn (est.) 5.83 TWh (-4.6%) distributed energy 2021 2022 2023 2021 2022 2023 Distributed volumes
Slide 21: DEER - MN
Group’s financial results DEER - MN Key figures 2023 Network losses cost Network losses (RON mn) (GWh) ~1.35 mn users 795 675 72,382 km 28,962 km2 voltage lines coverage 413 719 area 376 684 RAB: RON 2.5 bn (est.) 5.65 TWh (-5.0%) 2021 2022 2023 2021 2022 2023 distributed energy Distributed volumes
Slide 22: Financial impact of electricity market evolution - distribution
Group’s financial results The financial impact of the electricity market perspectives evolution - distribution Evolution of the cost of electricity needed to cover NL (net with income) Network losses ❑ In the year 2023, the cost of electricity purchased for NL (net with income) coverage decreased by
Slide 23: Supply segment – Electrica Furnizare
Supply segment – Electrica Furnizare (OMFP 2844) Group’s financial results Key figures 2023 Financial results EBITDA decreased by RON 85 mn. compared to 2022, mainly following the evolution of the factors below: ~3.5 mn. consumption places ▼ the decrease in revenues from the supply of electricity an
Slide 24: Electrica is the largest supplier by number of places of consumption
Group’s financial results In the whole supply market, Electrica is the largest supplier by number of places of consumption The supply market consists of the competitive segment, the universal service segment (US) and the supplier of last resort (SoLR) segment. The competitive segment comprises 92 su
Slide 25: Supply – Key operational indicators in the last 3 years
Supply – Key operational indicators in the last 3 years Group’s financial results Source: Company Data 25 1. Only retail electricity sales Public
Slide 26: Supply - key aspects – 12M 2023
Supply - key aspects – 12M 2023 Group’s financial results Volume of Electricity Supplied Volume of Electricity Supplied on Number of consumption places Number of consumption places on Retail Market 12M 2023 (TWh) Retail Market 12M 2023 (TWh) at 31 December 2023 (mn) at 31 December 2023 (mn) 3.5 3.5
Slide 27: Financial impact of electricity market evolution – supply (1/2)
The financial impact of the electricity market perspectives evolution – supply – FY 2023 (1/2) Group’s financial results Throughout January – December 2023 the gross margin achieved is RON 617 mln., - RON 140 mln. below the level achieved in 2022 ( RON 757 mln.). Main factors: ❑ Sales revenue (- RON
Slide 28: Financial Impact of Electricity Market Evolution – Supply (2/2)
Group’s financial results The Financial Impact of the Electricity Market Perspectives Evolution – Supply (2/2) Receivables’ analysis (acc. OMFP 1802/2014) ❑ The balance of receivables increased by 0.2% (+RON 5 mln.) at the end of Q4 2023 compared to December 2022 and reached RON 2.68 bln. ❑ Outstand
Slide 29: Electrica Serv (SERV)
Electrica Serv (SERV) (OMFP 2844/2016) Group’s financial results General overview Revenues SERV provides repair and other energy-related services to third parties, as well as several (RON mn.) services to the companies within the group (vehicles rental, building rental etc.). Starting with 1 Decembe
Slide 30: Production Segment – Highlights
Production Segment – Highlights (OMFP 2844/2016) Group’s financial results General overview Starting with the year 2020, the Electrica Group proposed the development of a portfolio of electricity production capacities from renewable sources (wind and photovoltaic). At the Production Segment – Struct
Slide 31: Group Liquidity
Group’s financial results Group Liquidity ❑ At Group level, the total liquidity available in cash and overdraft limits as of 31 December 2023 was RON 500 mn., in line with the results from 31 Total liquidity (RON mn.) December 2022. The level of cash on 31 December 2023 was RON 377 mn., increasing c
Slide 32: Distribution of dividends
Group’s financial results Distribution of dividends Distributed gross dividends (FY 2014 – 2023*) (RON mn.) Gross dividend per share (RON) and Dividend Yield(1) (%) 291.6 6.9% 7.3% 6.9% 251.4 245.4 247.5 246.1 247.9 6.8% 6.0% 244.7 5.2% 5.2% 6.1% 0.8600 0.7217 0.7415 0.7237 0.7300 0.7248 0.7300 152.
Slide 33: Main Corporate Events
3 Main Corporate Events 33 Public
Slide 34: Relevant Corporate Events in 2023 and up to date (1/6)
Relevant Corporate Events in 2023 and up to date (1/6) Main Corporate Events ❑ On 27 April 2023, the Ordinary General Meeting of Shareholders (OGMS) and the Extraordinary General Meeting of Shareholders (EGMS), which took place physically and online through the voting platform https://electrica.voti
Slide 35: Relevant Corporate Events in 2023 and up to date (2/6)
Relevant Corporate Events in 2023 and up to date (2/6) Main Corporate Events ▪ On 27 February 2023, 26 April 2023, 24 August 2023 and 23 January 2024 ELSA’s Board of Directors decided to extend the duration of the mandate of Mr. Alexandru-Aurelian Chirita, as interim CEO. The current mandate is unti
Slide 36: Relevant Corporate Events in 2023 and up to date (3/6)
Relevant Corporate Events in 2023 and up to date (3/6) Main Corporate Events ▪ On 31 July 2023, The Board of Directors of Electrica decided to change the composition of the Audit and Risk Committee, for the period starting with 1 August 2023 and until 31 December 2023, as follows: • Mr. Radu Mircea
Slide 37: Relevant Corporate Events in 2023 and up to date (4/6)
Relevant Corporate Events in 2023 and up to date (4/6) Main Corporate Events ▪ On 20 January 2023, the Ministry of Energy, as the concessionaire, amended the concession contract with the Electrica Group for the distribution segment to reflect that, in the event of early termination of the concession
Slide 38: Relevant Corporate Events in 2023 and up to date (5/6)
Relevant Corporate Events in 2023 and up to date (5/6) Main Corporate Events ▪ On 19 June 2023, Electrica announced its shareholders and investors that its subsidiary Distributie Energie Electrica Romania (DEER) has attracted EUR 57 mil. non-reimbursable financing through the Modernisation Fund. ▪ O
Slide 39: Relevant Corporate Events in 2023 and up to date (6/6)
Relevant Corporate Events in 2023 and up to date (6/6) Main Corporate Events ▪ On 25 October 2023, Electrica published the Interim Key Operational Indicators for Q3 2023 ▪ On 30 October 2023, Electrica published the simplified standalone financial statements for the first 9 months of 2023, prepared
Slide 40: Group Strategy implementation
4 Group Strategy implementation 40 Public
Slide 41: Corporate Strategic Objectives (updated December 2023)
Electrica Group – Corporate Strategic Objectives (updated December 2023) Group Strategy Implementation o Renewable energy production (potentially complemented by in-band production) Diversification of renewable o Energy storage energy sources o Optimization of investment financing mechanisms and pro
Slide 42: Sustainalytics' ESG Scores for Electrica
Group Strategy Implementation Sustainability is one of the Values of Electrica The elements of novelty that we can identify concern the strategic orientation at the company level to ensure that we align ourselves with the highest environmental and social standards. From the energy solutions we offer
Slide 43: Shareholdings' structure and evolution of the shares and GDRs
5 Shareholdings’ structure and evolution of the shares and GDRs 43 Public
Slide 44: Shareholder Structure at 31 December 2023
Shareholder Structure at 31 December 2023 Shareholdings’ structure and evolution of the shares and GDRs Percentage of Percentage of share Shareholder No. of Shares shares with voting capital (%) right (%) Romanian State through the Ministry of Energy 169,046,299 48.7948% 49,7850% European Bank for R
Slide 45: Monthly Volume and Average Price of Electrica's Shares and GDRs
Shareholdings’ structure and evolution of the shares and GDRs Monthly Volume and Average Price of Electrica’s Shares and GDRs (1 Jan 2023 – 29 Feb 2024) 7,000,000 12.00 11.71 5,929,147 6,000,000 10.40 10.00 5,000,000 8.44 4,407,763 8.00 4,066,233 4,000,000 7.00 3,134,591 6.00 3,000,000 2,771,782 2,4
Slide 46: Electrica's adjusted closing price vs BET-TR
Shareholdings’ structure and evolution of the shares and GDRs Electrica’s adjusted closing price vs BET-TR (1 January – 29 February 2024) 50.00 46.08 45.00 EL: +46.08% 45.35 BET-TR: +45.35% 40.00 35.00 30.00 25.00 20.00 15.00 4.45 10.00 5.00 0.00 3.00 BET-TR Electrica adjusted price with dividends S
Slide 47: Median monthly volume vs FTSE Russell liquidity threshold
Shareholdings’ structure and Electrica’s Median monthly volume vs FTSE Russell liquidity threshold evolution of the shares and GDRs (1 January 2022 – 31 January 2024) 250,000 200,000 150,000 271,539 100,000 76,734 124,081 114,403 50,000 80,892 79,800 79,632 78,705 78,728 77,493 77,330 77,294 19,648
Slide 48: Appendices: Regulatory Aspects – Distribution and Supply
6 Appendices Regulatory Aspects – Distribution Regulatory Aspects – Supply 48 Public
Slide 49: Important Regulatory Changes – Distribution Activity (1/2)
Appendices - Regulatory Aspects - Distribution Important Regulatory Changes – Distribution Activity (1/2) ❑ RP4 Regulations on Distribution tariffs • RRR: ANRE approved Order no. 75 of 6 May 2020, which established a regulated rate of return (RRR) for electricity and gas, distribution and transmissi
Slide 50: Important Regulatory Changes – Distribution Activity (2/2)
Appendices - Regulatory Aspects - Distribution Important Regulatory Changes – Distribution Activity (2/2) ❑ MF instructions for asset capitalization according to the provisions of art. III of GEO no. 119/2022 ✓ Capitalized amounts are recorded in accounting through accounting article 208 "Other inta
Slide 51: Changes in Distribution Regulation - RP4
Appendices Changes in Distribution Regulation - RP4 Regulated Revenue and tariff calculation 1 2 3 4 5 6 7 8 7 Regulated Revenue Reactive en. Regulated Contr. Non- Tariff NL Cost Depreciation RRR2 & 95% profit Revenue OPEX1 controllable other activ. 9 Forecasted Volume OPEX 1 • The starting point is
Slide 52: Changes in Distribution Regulation
Appendices - Regulatory Aspects - Distribution Changes in Distribution Regulation Methodology for determining distribution tariffs - Summary RP4 vs RP3 RP3 RP4 1 RRR January 2019: 5.66% existing RAB & 1% incentive RP4 network invest.(acc. ANRE) Return RRR (7.7%) applied to RAB 29 March 2019–30 April
Slide 53: Comparative elements RP4 vs RP3 (RAB & Investment)
Appendices - Regulatory Aspects - Distribution Changes in Distribution Regulation Methodology for determining distribution tariffs – Comparative elements RP4 vs RP3 RAB & Investment RP3 methodology RP4 methodology 1. RAB includes: assets used for the distribution service, which are recorded into the
Slide 54: Comparative elements RP4 vs RP3 (Opex & NL)
Appendices - Regulatory Aspects - Distribution Changes in Distribution Regulation Methodology for determining distribution tariffs – Comparative elements RP4 vs RP3 Opex & NL RP3 methodology RP4 methodology Controlable OPEX 1. OpexC 2019 is established based on formula (approved 1. OpexC 2019 is not
Slide 55: Regulatory Developments – Supply (1/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (1/18) GEO no. 27/2022 on the measures enforceable for the end consumers of the electricity and natural gas market from 1 April 2022 until 31 March 2023, amending and complet
Slide 56: Regulatory Developments – Supply (2/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (2/18) Law No. 206/2022 to approve Government Emergency Ordinance No. 27/2022 regarding the measures applicable to final customers on the electrical energy and natural gas ma
Slide 57: Regulatory Developments – Supply (3/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (3/18) GEO no. 119/2022 - to amend and supplement the GEO n98xo. 27/2022 on the measures applicable to final customers on the electrical energy and natural gas market during
Slide 58: Regulatory Developments – Supply (4/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (4/18) Law no. 357/2022 - Law on the approval of Government Emergency Ordinance no. 119/2022 for the modification and completion of Government Emergency Ordinance no. 27/2022
Slide 59: Regulatory Developments – Supply (5/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (5/18) • maximum 1 leu/kWh, for the full consumption of public and private hospitals, public and private education units, nurseries and public and private providers of social
Slide 60: Regulatory Developments – Supply (6/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (6/18) Law no. 5/2023 - Law on the modification and completion of Law no. 220/2008 on the establishment of the system for the promotion of energy production from renewable en
Slide 61: Regulatory Developments – Supply (7/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (7/18) Law no. 206/2023 - Law on the approval of the Government Emergency Ordinance no. 153/2022 for the amendment and completion of the Government Emergency Ordinance no. 27
Slide 62: Regulatory Developments – Supply (8/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (8/18) ANRE Order no. 5/2023 — Order for the approval of the Regulation for the supply of electricity to final customers, as well as for the modification and completion of so
Slide 63: Regulatory Developments – Supply (9/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (9/18) ANRE Order no. 9/2023 — Order regarding the establishment of the mandatory quota for the purchase of green certificates for the year 2022 • enter into force on 1 March
Slide 64: Regulatory Developments – Supply (10/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (10/18) ANRE Order no. 13/2023 — Order for the approval of the framework contract for the supply of electricity in the universal service regime, the general conditions for th
Slide 65: Regulatory Developments – Supply (11/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (11/18) ANRE Order no. 19/2023 — Order for the amendment of the green certificate invoicing procedure, approved by the Order of the president of the National Energy Regulator
Slide 66: Regulatory Developments – Supply (12/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (12/18) ANRE Order no. 18/2023 — Order regarding the approval of the Methodology for monitoring the wholesale electricity market • modifying and completing the Methodology by
Slide 67: Regulatory Developments – Supply (13/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (13/18) ANRE Order no. 59/2023 — Order regarding the approval of the Procedure for the recovery of improperly issued green certificates and for the modification of the Regula
Slide 68: Regulatory Developments – Supply (14/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (14/18) ANRE Order no. 67/2023 — Order regarding the approval of the tariff for the purchase of system services for the transport and system operator Compania Nationala de Tr
Slide 69: Regulatory Developments – Supply (15/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (15/18) ANRE Order no. 76/2023 — Order regarding the amendment of the annex to the Order of the President of the National Energy Regulatory Authority no. 139/2022 for the app
Slide 70: Regulatory Developments – Supply (16/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until end of February 2024 – Supply (16/18) ANRE Order no. 86/2023 — Order on the modification of the Annex to the Order of the President of the National Energy Regulatory Authority no. 16/2020 on the approval
Slide 71: Regulatory Developments – Supply (17/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until 15 November 2023 – Supply (17/18) ANRE Order no. 96/2023 — Order regarding the modification and completion of the Order of the president of the National Energy Regulatory Authority no. 179/2015 for the ap
Slide 72: Regulatory Developments – Supply (18/18)
Appendices - Regulatory Aspects - Supply Regulatory-related Developments entered in force until 15 November 2023 – Supply (18/18) ANRE Order no. 109/2023 — Order regarding the approval of the average tariff for the electricity transmission service, the components of the transmission tariff for the i
Slide 73: Glossary
Glossary ANRE Romanian Energy Regulatory Authority IFRS International Financial Reporting Standard B2B Business to Business IMS Integrated Management System BET-TR Bucharest Exchange Trading - Total Return Index IPO Initial Public Offering BM Balancing Market LSE London Stock Exchange BoD Board of D
Slide 74: 2024 Financial Calendar
2024 Financial Calendar • 29 February Publication of the Preliminary Financial Results for FY 2023 • 6 March Publication of the 2023 financial annual results - documents for the Ordinary General Meeting of Shareholders on 25 April 2024 • 11 March Investor and analyst teleconference for presentation
Slide 75: Investor Relations & Disclaimer
Investor Relations & Disclaimer • Email: ir@electrica.ro • Web: https://www.electrica.ro/en/investors/ Investor Relations • Tel: +40 (0)21.208.50.35; +40 731 796 111 • Address: 9 Grigore Alexandrescu Str., 1st District, Bucharest, 010621 This document has been prepared by Electrica and is for inform
Slide 76: Q&A Executive Management
Q&A Executive Management Mr. Alexandru- Aurelian Chirita Chief Executive Officer 2017 2018 Ms. Livioara Sujdea Mr. Stefan Frangulea Ms. Andreea Lambru Chief Distribution Chief Financial Officer Chief Business Officer Development Officer https://www.electrica.ro/en/investors/corporate-governance/exec
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