Naturgy Energy Group, S.a. · BME:NTGY
Naturgy Energy — Q1 2020 Earnings Presentation
35 slides from Naturgy Energy's earnings presentation, Apr 29, 2020
Slide 1: 1Q20 Results
Naturgy by 1020 Results 29 April 2020
Slide 2: Agenda
Agenda 1. COVID-19 company initiatives 2. 1Q20 consolidated results 3. 1Q20 results by business unit 4. Conclusions
Slide 3: COVID-19 company initiatives
01 COVID-19 company initiatives
Slide 4: Environment under COVID-19
Environment under COVID-19 1 Limited visibility on macroeconomic outlook 2 Unprecedented decline of commodity prices 3 Declining energy demand due to lower economic activity 4 Potential regulatory developments impacting WC Lack of visibility on depth and duration of crisis 4
Slide 5: Macroeconomic environment
Macroeconomic environment 2020E GDP growth consensus estimates FX evolution1 (rebased to 100) 110% W12 W13 W14 W15 W16 105% USD +4% Spain -5.0% -5.9% -6.6% -5.9% -6.3% 100% Argentina -2.8% -3.4% -4.1% -4.6% -4.4% 95% ARS -6% 90% CLP -9% Chile -0.7% -1.2% -1.6% -3.0% -2.1% 85% Panama 1.5% 1.5% -1.0%
Slide 6: Commodity prices
Commodity prices Brent (USD/bbl) Henry Hub (USD/MMBtu) Spanish electricity market (€/MWh) 66.1 2.7 52% 33% 48.8 43% 1.8 31.8 27.7 March-19 March-20 March-19 March-20 March-19 March-20 CO2 (€/t) NBP (USD/MMBtu) JKM (USD/MMBtu) 22.0 5.1 7.3 10% 45% 52% 19.8 2.8 3.5 March-19 March-20 March-19 March-20
Slide 7: Electricity and gas demand
Electricity and gas demand Evolution of electricity demand Evolution of gas demand (% Change vs. 2019 comparable week) (% Change vs. 2019 comparable week) W12 W13 W141 W15 W16 W12 W13 W141 W15 W16 Spain -9.5% -19.1% -25.2% -11.3% -13.7% Spain -2.5% -16.7% -31.4% -12.2% -21.5% Argentina2 -1.5% -18.1%
Slide 8: Key company initiatives
Key company initiatives Employees Society Liquidity Shareholder remuneration Customers Suppliers Business & portfolio 8
Slide 9: Employees
Employees 01 02 Early ban on domestic and international Prompt creation of a Crisis Committee travel and attendance to external events Activated 25-Feb. 03 04 Supply of personal protection equipment and Resources for effective remote working ready access to company medical services 100% of non-criti
Slide 10: Employees: roadmap for a safe return
Employees: roadmap for a safe return Prior to workplace return Return to workplace 1 Medical survey to all employees Work premises Reinforcement of hygiene measures 2 Compliance with workplace safety Serological tests to all employees and Capacity limitation of common areas their immediate family me
Slide 11: Society
Society 01 02 Reinforcement of critical infrastructures to “CRUZ ROJA RESPONDE” donation by guarantee energy supply employees 03 04 Free gas and electricity appliances’ Supply of free gas and electricity to inspections to Spain’s medical workers, hospitalized hotels, residences and IFEMA members of
Slide 12: Customers & Suppliers
Customers & Suppliers 01 02 12-month bill financing to SMEs, self- Free telematic medical assistance employed individuals and municipalities Up to 250.000 beneficiaries Up to 7 million beneficiaries 03 01 Continuity of energy supply to all vulnerable Cash payment advances corresponding to clients in
Slide 13: Liquidity
Liquidity Cash and equivalents 4,151 Comfortable debt maturity profile ~6 years average maturity Liquidity resources (€m) Undrawn committed financing 5,439 80% of debt at fixed rates Total 9,590 68% denominated in EUR Additional levers 7,720 Proven access to capital markets Opex & discretionary Cape
Slide 14: Shareholder remuneration
Shareholder remuneration Dividend commitment (€/sh.) Share buy-back optionality (€m) 1.44 +5% 1.37 102 Optionality Proposed 0,01 298 Completed1 Paid 1,36 2019 2020E 2nd tranche Payment of 3rd interim dividend of 0.593€/sh. on 25-Mar Temporary halt until visibility improves Payment of final 0.01 €/sh
Slide 15: Business & portfolio
Business & portfolio 1 Gas procurement contract revisions and renegotiations: Price arbitrage decisions expected between 2020 and 2021 Ongoing transformation initiatives 2 Rethinking of operations to increase efficiency and flexibility (remote work, digitization, etc.) Adapting organization: interna
Slide 16: 1Q20 consolidated results
02 1Q20 consolidated results
Slide 17: Key highlights
Key highlights Key figures (€m, % vs. 1Q19) Ordinary EBITDA Ordinary Net Income 1 Lower energy demand and commodity prices 1,102 -6% 305 -19% 2 New electricity networks regulation and step down in EMPL Capex Net Debt 3 FX depreciation in LatAm (€bn) 201 - 33% 15.0 -2% 4 Reinforced liquidity and divi
Slide 18: EBITDA evolution (€m)
EBITDA evolution (€m) -6% 48 1,167 1,119 11 7 1,102 (54) (14) (15) 944 (158) Including the following FX impacts: €1m €2m -€32m €1m FX: -€28m EBITDA Non-ordinary Ordinary Gas & Power Infra. EMEA Infra. LatAm Infra. LatAm Corporate Ordinary Non-ordinary EBITDA 1Q19 items EBITDA South North & other EBI
Slide 19: Net Income evolution (€m)
Net Income evolution (€m) -19% 36 377 341 4 305 (76) 199 (106) Net Non-ordinary Ordinary Operations Others Ordinary Non-ordinary Net income items net net items 1 income 1Q19 income income 1Q20 1Q19 1Q20 Better financial result not sufficient to offset weaker activity Note: 1. Of which: -€119m corres
Slide 20: Cash flow and Net debt evolution (€m)
Cash flow and Net debt evolution (€m) Cash flow Net debt 1Q20 vs. 1Q19 EBITDA 944 -16% (%): avg. cost of debt2 Taxes (8) Net interest cost (138) 3.2% 3.0% Other non-cash items (139) Funds from operations 659 -23% 15,268 755 108 15,010 Change in working capital 616 (809) (312) Cash flow from operatio
Slide 21: 1Q20 results by business unit
03 1Q20 results by business unit
Slide 22: Gas & Power
Gas & Power EBITDA evolution (€m) Highlights Gas, Power & services sales: higher power margins and business optimization offset by lower sales and gas 8 409 margins 401 0 2 355 International LNG: contract renegotiations cause a 0 (56) 307 transitory increase of shorter term sales in depressed pr
Slide 23: Infrastructure EMEA
Infrastructure EMEA EBITDA evolution (€m) Highlights Spain gas networks: business optimization offset by lower sales 29 475 1 461 Spain electricity networks: lower regulated revenues due 446 to new regulatory period compensated by business (5) (10) 390 optimization (71) Including the following F
Slide 24: Infrastructure South LatAm
Infrastructure South LatAm EBITDA evolution (€m) Highlights Chile electricity: FX, tariff freeze in transmission activities, higher losses and perimeter changes 193 1 194 11 179 174 Chile gas: mainly impacted by lower supply sales 1 (22) (5) (5) Brazil gas: tariff indexation and lower losses o
Slide 25: Infrastructure North LatAm
Infrastructure North LatAm EBITDA evolution (€m) Highlights Mexico gas: margins improvement and tariff update offset by lower sales 14 112 111 101 101 Panama electricity: lower margins partially 0 (3) (1) compensated by higher sales Including the following FX impacts: - €1m FX: €1m €33m capex, o
Slide 26: Conclusions
04 Conclusions
Slide 27: Summary 1Q20 results
Summary 1Q20 results 1 Lower energy demand and commodity prices 2 New electricity networks regulation in Spain and capacity step down in EMPL 3 FX depreciation in LatAm 4 Reinforced liquidity and dividend commitment Limited impact of COVID-19 on first quarter results 27
Slide 28: COVID-19 uncertainties & management focus
COVID-19 uncertainties & management focus COVID-19 uncertainties Management focus Duration and depth of crisis and speed of recovery Stakeholder support Commodity prices − Employees, society, customers, suppliers… Energy demand Liquidity maximization FX in LatAm − Managing cash outlays: opex and dis
Slide 29: Q&A
Naturgy by 1020 Results Q&A
Slide 30: Appendix
Naturgy y Appendix
Slide 31: Alternative Performance Metrics
Alternative Performance Metrics Naturgy's financial disclosures contain magnitudes and metrics drafted in accordance with International Financial Reporting Standards (IFRS) and others that are based on the Group's disclosure model, referred to as Alternative Performance Metrics (APM), which are view
Slide 32: Alternative Performance Metrics
Alternative Performance Metrics Alternative performance Reconciliation of values Definition and terms Relevance of use metrics 31 March 2020 31 March 2019 Current and non-current financial debt Gross financial debt - "Cash and cash Euros 15,268 million (1) = 17,987 – 2,685 Net financial debt Euros 1
Slide 33: ESG metrics
ESG metrics ESG metrics 1Q20 1Q19 Change Comments Health and safety Accidents with lost time (1) units 1 8 -87.5% Significant improvement following Plan Naturgy 2019 Reflects the reduction in accidents, although slightly adjusted by a lower number LT Frequency rate (2) units 0.04 0.27 -85.2% of work
Slide 34: Disclaimer
Disclaimer This document is the property of Naturgy Energy Group, S.A. (Naturgy) and has been prepared for information purposes only. This communication contains forward-looking information and statements about Naturgy. Such information can include financial projections and estimates, statements reg
Slide 35: This presentation is property of Naturgy Energy Group, S.A. Both its content and design
This presentation is property of Naturgy Energy Group, S.A. Both its content and design are for the exclusive use of its personnel. ©Copyright Naturgy Energy Group, S.A CAPITAL MARKETS tel. 34 912 107 815 e-mail: capitalmarkets@naturgy.com website: www.naturgy.com