Redeia Corporacion Sa · BME:RED
Redeia Corporacion Sa — Red Eléctrica Corporación — FY2014 Earnings Presentation
34 slides from Redeia Corporacion Sa's earnings presentation, Feb 25, 2015
Slide 1: Toward Red21: A sustainable energy model – 2014 Results
Toward Red21 A sustainable energy model 2014 Results Strategic Plan 2014 2014‐2019 2019 25 February 2015 25 de febrero 2015
Slide 2: 2014 Results
2 2014 Results
Slide 3: Relevant events
2014 Results Relevant events 3 SOLID FINANCIAL RESULTS • Eliminating the impact of certain one‐off events in the year, earnings grew by 5.4%, surpassing the target for 2014. ONE‐OFF EVENTS DURING THE YEAR • Compensation agreement, Transportadora de Electricidad (TDE). Impact of € 52.3mn on the group
Slide 4: Relevant events
2014 Results Relevant events 4 SIGNIFICANT PROGRESS IN COMMISSIONED ASSETS AND IN INVESTMENTS • Significant progress in international interconnections: interconnection with France through the Eastern Pyrenees and interconnection with Portugal which connects with 400kV Almaraz–Guillena. • Approval by
Slide 5: Relevant events
2014 Results Relevant events 5 BEST PRACTICES IN SOCIAL RESPONSIBILITY AND CORPORATE GOVERNANCE • Approval of new Corporate Governance Policy. • Increase in the number of independent members on the Audit Committee, Governance Committee and Social Responsibility Committee of the Board of Directors. •
Slide 6: Highlights
2014 Results Highlights 6 €mn 2013 2014 % Revenues 1,758 1,847 5.0 Gross operating result (EBITDA) 1,302 1,385 6.4 Profit before tax 733 854 16 4 16.4 Profit for the year 529 718 35.7 Total investment 596 956* 60.4 * Include Adif contract of assignment (€ 434mn) % Profit for the year 5.4 ( l di one‐
Slide 7: Balance sheet: Net debt evolution
2014 Results Balance sheet: Net debt evolution 7 868 €mn 958 344 5,409 77 4,541 498 1,009 2013 Operating Changes in Investments Dividends Other* 2014 Cash flow working capital it l (*) “Other” includes changes in other non‐current assets and liabilities, suppliers of propoerty, plant and equipment,
Slide 8: Debt
2014 Results Debt 8 SOLVENCY RATIOS 2014 2013 2014 excluding ADIF EBITDA / Interest* 6.8x 8.1x 8.1x FFO / Debt 21 5 % 21.5 18 7 % 18.7 20 6 % 20.6 Debt/ EBITDA 3.5x 3.9x 3.5x (*) EBITDA / Net finance cost excluding capitalisations DEBT STRUCTURE BY BREAKDOWN Total liquidity sources Total gross debt
Slide 9: Strategic Presentation 2014-2019
9 Strategic Presentation 2014‐2019
Slide 10: A sustainable energy model I
Toward Red21 A sustainable energy model I 10 Europe’s present and future challenges… EU 2030 Objectives • 40 % cut in greenhouse gas emissions. • 27 % renewable energies. • 27 % energetic efficiency. Implementation of the Internal energy market (Integration of networks and markets). Solar Geothermal
Slide 11: A sustainable energy model II
Toward Red21 A sustainable energy model II 11 … are the chanllenges of Red21 TOOLS CHALLENGES • Rise in flexible generation. • Compensate greater variability in renewable generation. • Development of smart charges. • Achieve greater flexibility from the • Flexible consumers and smart grids. demand s
Slide 12: Strategic Plan 2014-2019 I
Toward Red21 Strategic Plan 2014 2014‐2019 2019 I 12 W have We h advanced d d know‐how k h ini operating ti the th electricity l t i it system t and d managing i networks MAINLAND ELECTRICITY SYSTEM NON‐MAINLAND INTERNATIONAL • 2002‐2010: ELECTRICITY SYSTEMS FIBRE OPTIC • 1999: REDESUR (Peru). Conso
Slide 13: Strategic Plan 2014-2019 II
Toward Red21 Strategic Plan 2014 2014‐2019 2019 II 13 TSO Other activities SSolid lid growthh in i Efficient TSO Fibre Optic network “consolidated” Management Management activities Stable market Additional growth New tools for opportunities and in new System Operation activities adequate returns Man
Slide 14: Strategic Plan 2014-2019 III
Toward Red21 Strategic Plan 2014 2014‐2019 2019 III 14 … and with a mission geared toward sustainable development • Promoting an efficient, efficient sustainable electricity system. • Adopting the best international Innovation corporate governance practices and d fostering f t i an ethical thi l bus
Slide 15: Targets Strategic Plan 2014-2019 IV
Targets St t i Plan Strategic Pl 2014 2014‐2019 2019 IV 15 Growth in a low‐risk environment SOLID GROWTH IN “CONSOLIDATED” ACTIVITIES • Investment of € 3,100mn 3 100mn in transmission network. network • Investment of € 475mn in the dark fibre optic network*. ADDITIONAL GROWTH IN NEW ACTIVITIES € 1,0
Slide 16: Efficient TSO management: Regulatory framework I
Efficient TSO management: R l t Regulatory f framework kI 16 The new regulation guarantees the stability of the electricity transmission activity BASIC PRINCIPLES • A single methodology applicable to all transmission facilities. • Six‐year regulatory periods (the first period will end on 31/12/2019)
Slide 17: Efficient TSO management: Regulatory framework II
Efficient TSO management: R l t Regulatory f framework k II 17 Estimated transmission tariff according to RD* €mn Red Eléctrica 1,942 , ∆ 3%CAGR remuneration i iin 2015 € 1,675m according to OM IET/2444/2014 1,725 of 19 December. 2015 2016 2017 2018 2019 • Forecasts have been calculated using tempor
Slide 18: Investments in Electricity Transmission Network I
Efficient TSO management: I Investments t t in i Electricity El t i it Transmission T i i Network N t kI 18 Draft 2015‐2020 Infrastructure Plan Investment in Transmission Network € 4,400mn and work in progress. 1,500 0 RD 1047/2013 investment limited to 0.065% of GDP €mn 500 REE 2014‐2019 Plan: Aver
Slide 19: Investments in Electricity Transmission Network II
Efficient TSO management: I Investments t t in i Electricity El t i it Transmission T i i Network N t k II 19 Mainland l d projects 400 kV link between the regions of Galicia and Asturias Meshing 220 kV XOVE ALUMINIO BOIMENTE GOZON GOZON T ABIELLA North‐east axis A.ZINC CARRIO T RASONA LAG RANDA ABO
Slide 20: Investments in Electricity Transmission Network III
Efficient TSO management: I Investments t t in i Electricity El t i it Transmission T i i Network N t k III 20 Non‐mainland projects New Mallorca‐Menorca link CIUDADELA MERCADAL MAHON CALABOSC DRAGONERA Network TACORONTE EL ROSARIO EL ROSARIO GENETO DIQUE DEL ESTE MANUEL CRUZ POLLENSA reinforcement
Slide 21: Insular energy storage I
New tools for System Operation: Insular energy storage I 21 Coverage of annual demand for electricity Mainland Canary Islands R Renewable bl 42 8 % 42,8 8% Fossil fuels 35,2 %* 92 % Nuclear 22 % 0% * Includes cogeneration COVERAGE OF DEMAND • Mainland: 42.8 % renewable and 64.8 % • Forecast sharp in
Slide 22: Insular energy storage II
New tools for System Operation: Insular energy storage II 22 SSystem t O Operatort owner off pumping i storage t centrals t l to t guarantee t the th electricity supply and renewables integration, non generator. “Planning Planning of Approval of the “Comprehensive Law 17/2013 17/2013, to electricity
Slide 23: New tools for System Operation: Other activities
New tools for System Operation: Other activities 23 • Interruptibility service: Introduction of interruptible‐power competitive‐allocation mechanisms. • Cross‐border energy mix services: Contribute to optimising the use of the commercial‐ exchange h capacity, it to t increased i d competition titi i
Slide 24: Fibre optic network management I
Fibre optic network management I 24 Ap. 03 Aluminio Al i i II. II Xove We are the benchmark Grado Tabiell a El Palo Salas Carrió Puentes de Gª. R. Pesoz Cacicedo Astillero Siero Pte. Udalla Ap. 11 Llonín Boimente S.Miguel Meirama Sanzo Narcea Zierbana Santurce Arkale Abanto Gatika Ap. 8 Azpeitia Mes
Slide 25: Fibre optic network management II – ADIF
Fibre optic network management II ADIF 25 A LARGER FIBRE OPTIC NETWORK, POSITIVE FINANCIAL IMPACT MORE POSIBILITIES STARTING IN THE FIRST YEAR • Ring closing with new network sections. • Telecommunications revenues increase by 3.3x in 2015. • New redundancies on existing sections. • The telecommunic
Slide 26: Stable market opportunities and adequate returns
Stable market opportunities and adequate returns 26 Internationalisation based on our know‐how and according to profitability criteria… INVESTMENT CRITERIA: • Stable, predictable revenue in low‐risk environments. • Securing of adequate returns. • Preferably a majority interest with local shareholder
Slide 27: Efficient management
Efficient management 27 ENGINEERING AND ASSETS MAINTENANCE CONSTRUCTION • Optimisation of design of • Changes in renewal policies at the operations and accounting facilities and of level. implementation p Improvement in EBITDA Margin • • Adaptation of maintenance Supply management policies to the re
Slide 28: Financial policy I
Financial policy I 28 FINANCIAL POLICY ACTIONS INTENDED TO: • Optimizing financial cost for the 2014‐2019 period. • Maximise shareholder returns. • Bringing the future cost of debt into • Take k advantage d off the h possibilities ibili i line with remuneration of assets that the new regulatory fram
Slide 29: Financial policy II
Financial policy II 29 • Financial remuneration rate: Average Spanish 10‐year bond + spread. + First regulatory period 2014‐2019: 6.5 % (4.5 % + 200 bp). + Subsequent regulatory periods: the financial remuneration rate may not experience i annuall variations i ti above b 50 bp, b either ith upward d
Slide 30: Clear commitment to economic sustainability
Clear commitment t economic to i sustainability t i bilit 30 LONG TERM DEBT MATURITIES 3.264 €mn Average remaining term 850 to maturity 4.9 743 315 94 years 2015 2016 2017 2018 2019‐onwards EMTN bonds USPP Syndicated loan EIB loan Other Loans and Credit NET DEBT/ EBITDA New Strategic Plan 5.5x Avera
Slide 31: Dividend policy
Di id d policy Dividend li 31 Focus on shareholder returns DPS €/share * 3.00 2.54 2013 2014 2015E 2016E 2017E 2018E 2019E * The Board of Directors agreed, g , at a meetingg held on 24 February, y, to propose p p to the General Shareholders’ Meeting a payment of €3 per share. Visibility of sharehold
Slide 32: Conclusions
Conclusions Strategic Plan 2014 2014‐2019 2019 32 "C "Consolidated“ lid t d“ investments i t t € 3.575mn and new investment opportunities € 1.000 mn Improved EBITDA margin Toward ≥ 200 bp. in 2019 Red21 Net debt/EBITDA 3.5x on average ∆ DPS ∆ EPS 7 % CAGR 5‐6 % since 2014 CAGR Growth in a low‐risk l
Slide 33: relacioninversores@ree.es
relacioninversores@ree.es Presentation available in: www.ree.es Shareholders and investors
Slide 34: Disclaimer
34 This document has been produced by Red Eléctrica Corporación, Corporación S.A. S A for the sole purpose expressed therein. therein It should not in any event be construed as an offer of sale, exchange or acquisition, or as an invitation to make any kind of offer, in particular for the purchase of
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