Slide 1: 1H09 Results Presentation
EDP 1H09 Results Presentation July 31st, 2009
Slide 2: 1H09: Highlights of the period
1H09: 1H09: Highlights of the period EBITDA: €1,611m, +2% YoY (EBITDA recurrent: €1,607m, +7% YoY) Hedging in liberalized activities & wind power Positive results form proper and well timed decisions on risk management in energy markets Regulated and Long Term Contracted activities*: 82% of EBITDA L
Slide 3: 1H09: Highlights of the period
1H09: 1H09: Highlights of the period Net profit: €479m, -32% YoY (net profit recurrent €505m, +7% YoY) Average cost of debt fell from 5.6% in 1H08 to 4.2% in 1H09 Regulatory receivables: €1.9bn in Dec-08, down to €0.8bn in Jun-09: Deficit in Portugal securitized Liquidity: €4.5bn available following
Slide 4: 1H09 Financial Headlines
1H09 Financial Headlines (€ million) 1H08 1H09 % Chg. EBITDA 1,585 1,611 +2% Net Profit 703 479 -32% Capex 1,345 1,653 +23% Net Debt (€bn) 13.9 * 14.2 +2% Net Debt / EBITDA (x)** 4.4x * 4.4x - Adjusted Net Debt (1) / EBITDA (x) 3.8x * 4.2x - Net profit ex-non recurrent items: €505m, +7% YoY Profitab
Slide 5: 1H09 EBITDA Breakdown
1H09 EBITDA Breakdown 82% of 1H09 EBITDA came from regulated or LT contracted activities +2% % Chg. YoY €1,585m €1,611m Liberalized +53% 12% Activities Iberia 18% Brazil -21% 18% 14% Wind Power +19% 14% 17% Regulated 28% 82% -11% 25% Networks Iberia LT Contracted -6% 28% 26% Generation Iberia 1H08 1
Slide 6: Non-recurrent items above the EBITDA line
Non- Non-recurrent items above the EBITDA line EDP Group (€ million) 1H08 1H09 Var. % Reported EBITDA 1,585 1,611 +2% Portugal Distribution Tariff Adjust. (1) -58 0 - Brazil Distribution Tariff Adjust. (1) -20 -3 - Adjusted EBITDA 1,507 1,607 +16% +7% EBITDA ex-non recurrent items grew 7% YoY (1) Ta
Slide 7: EDP Consolidated operating costs: new efficiency program
EDP Consolidated operating costs: costs: new efficiency program Efficiency Program 2008-12 annual savings (1) Controllable Operating Costs (2) – EDP Group (€ million) (€ million) % Chg. YoY Human Resources -2% Supplies and services 160 715 698 EDP Renováveis +39% 96 Brazil -31% 53 40 +0.1% Iberian M
Slide 8: Business Areas
Business Areas 7
Slide 9: 1H09: Highlights in LT Contracted Generation Iberia
1H09: 1H09: Highlights in LT Contracted Generation Iberia EBITDA -6% YoY to €425m Recurrent EBITDA +6% YoY to €452m: desox + efficiency in PPA/CMECs; new mini-hydro capacity PPA/CMECs: Consistently beating contracted availability and efficiency targets; new investments Special regime: Gross profit +
Slide 10: LT Contracted Generation (26% of EBITDA)
LT Contracted Generation (26% of EBITDA) Recurrent EBITDA: +6% YoY Evolution of LT Contracted Generation EBITDA (€ million) PPA/CMECs -6% Special Regime +6% +24 452 -28 450 100 425 426 131 16 23 +5% 410 429 EBITDA 1H08 Fuel Gains & EBITDA 1H08 EBITDA 1H09 Fuel Losses & EBITDA 1H09 Other Recurrent Re
Slide 11: 1H09: Highlights in Liberalized Activities Iberia
1H09: 1H09: Highlights in Liberalized Activities Iberia EBITDA +53% YoY to €290m Net buyer in the pool: Volumes sold at fixed price (clients+forwards) = 110% of generation output Well timed contracting: volumes sold to clients +31% YoY; average selling price +12% YoY Generation output -2.6% YoY (vs.
Slide 12: Liberalised Activities Iberia: Hedging strategy (18% EBITDA)
Liberalised Activities Iberia: Hedging strategy (18% EBITDA) Generation & Wholesale Clients & Wholesale (energy sources) (energy sold) Avg. Variable Cost Avg. Selling Price €/MWh €/MWh 34.8 13.3 TWh 13.3 TWh 59.3 Market 40.5 18% 41.5 Wholesale Spot Market 27% Hydro 7% 18% 56.8 Wholesale Forward Mark
Slide 13: Liberalised Generation & Supply Iberia: Load factors above Spanish average
Liberalised Generation & Supply Iberia: Load factors consistently above the Spanish average CCGT in Iberia: Load factors 1H09 Coal in Iberia: Load factors 1H09 EDP Spain’s average EDP (HC) Spain’s average EDP output penalised by higher gas costs 76 63 58 59 50 50 46 46 44 41 39 36 37 34 28 28 1H08 1
Slide 14: 1H09: Highlights in Energy Regulated Networks Iberia
1H09: 1H09: Highlights in Energy Regulated Networks Iberia EBITDA down -11% YoY to €409m Excluding 1H08 specialization accounting issues, EBITDA grew 4% YoY Energy demand: residential slowing down, industrial decreasing, no material impact on returns RoRAB or proxy regulations, with highly predictab
Slide 15: Regulated Energy Networks Iberia (25% of EBITDA)
Regulated Energy Networks Iberia (25% (25% of EBITDA) Excluding specialization accounting issues (€58m in Portugal and €5m in Spain), EBITDA grew 4% YoY to €409m Regulated Networks: Recurring EBITDA Breakdown(1) (€ million) % Chg. YoY Gas Iberia -11% Electricity Spain Electricity Portugal +4% 458 (5
Slide 16: 1H09: Highlights in Wind Power
1H09: 1H09: Highlights in Wind Power EBITDA growth of +19% YoY to €271m Installed capacity: +43% or +1.4 GW YoY to 4.6 GW (5.3 GW gross) in Jun-09 Output +33% YoY – Load factors of 25% in Europe and 36% in USA – Premium quality assets 2Q09 Load factors affected by weaker wind resources Avg. selling
Slide 17: Wind Power (17% of EBITDA)
Wind Power (17% (17% of EBITDA) EDP Renováveis: EBITDA Breakdown (€ million) Europe USA EBITDA growth supported by: +19% • Installed capacity +43% YoY 271 (+1.4GW to 4.6GW); 227 • Wind power output +33% YoY 42% Load factors: Europe 25%; USA 36% 33% Lower YoY due to lower availability, weaker wind re
Slide 18: 1H09: Highlights in Brazil
1H09: Highlights in Brazil EBITDA decreased 21% YoY to €236m -11% forex impact: EBITDA in BRL terms decreased 11% YoY Distribution: disposal of Enersul and lower industrial demand Generation: increase of installed capacity, non recurrent trading gains in 1H08 Efficiency improvement: Opex/Clients (Ba
Slide 19: Brazil (14% of EBITDA)
Brazil (14% (14% of EBITDA) Brazil: Recurring EBITDA Breakdown (€ million) % Chg. YoY Generation & Supply -21% Distribution +9% 298 53 268 30 244 2 236 117 84 123 109 181 161 145 127 (1) 1H08 Adjust 1H08 1H09 Forex Impact Adjust 1H09 Reported Recurring Recurring Reported EBITDA 1H08: Including non-r
Slide 20: Consolidated Financials
Consolidated Financials 19
Slide 21: Consolidated Capex
Consolidated Capex +23% €1,653m Hydro: €232m payment in Jan-09 for concession right to build Fridão/Alvito €1,345m hydro plants in Portugal; 847 MW of hydro Hydro Portugal (1) currently under construction; Wind Power: +218MW installed in 1H09; 1,261MWs under construction by Jun-09(2) Wind Power Braz
Slide 22: Regulatory Receivables
Regulatory Receivables CMECs Portugal Brazil Spain • Securitization of tariff deficit in Portugal Reg. Distrib. &Supply Portugal (Mar-09) €1,891m -€1,096m • Lower than expected electricity prices in Portugal imply tariff surplus in 1H09 • Slight increase of regulatory €795m receivables from CMECs du
Slide 23: EDP Consolidated Net Debt
EDP Consolidated Net Debt Debt by Interest Rate Term Debt by Currency Debt by Source of Funds USD Fixed Banks 21% 44% 6% 43% 56% BRL 57% 73% Capital Floating EUR Market 2008 1H09 Rating Last Rating Action Net Debt/EBITDA 4.4x 4.4x Standard & Poors A-/Stable/A2 03/07/2008 Moody’s A3/Stable/P2 09/06/2
Slide 24: EDP consolidated debt maturity profile
EDP consolidated debt maturity profile EDP consolidated debt maturity profile (June 30, 2009) (€ million) Commercial paper Other companies Brazil: € 257 M Project Finance: € 32 M Average Debt Maturity EDP SA + BV Jun-09: 5 years € 1 bn Bond: Oct 09 3,000 15.8% 16.3% 2,500 15.1% 14.1% 2,000 12.3% 9.3
Slide 25: EDP liquidity position Jun-09
EDP liquidity position Jun- Jun-09 (€ million) Sources of liquidity (Jun-09) Instrument Maximum Number of Utilised Available Maturity Amount counterparties Revolving Credit Facility (US$1.5bn) 1,061 22 1,061 - 02-07-2014 Revolving Credit Facility 1,600 19 - 1,600 04-03-2012 Domestic Credit Lines 187
Slide 26: Net Profit Break-down
Net Profit Break- Break-down (€ million) 1H08 1H09 ∆% ∆ Abs. • Net interest costs down 14% YoY: EBITDA 1,585 1,611 2% +26 Decline in avg. cost of debt, from 5.6% Net depreciations & in 1H08 to 4.2% in 1H09, offset higher 611 631 3% +20 provisions Net Debt. EBIT 973 979 1% +6 • Others include: In 1H0
Slide 27: Recurring Net Profit up 7% YoY
Recurring Net Profit up 7% YoY EDP Group (€ million) 1H08 1H09 Var. % Reported Net Profit 703 479 -32% Gain from EDP Renováveis IPO -405 0 - Other: Capital Gains & Impairments (1) 175 26 - Recurring Net Profit 473 505 +16% +7% Excluding non recurrent items, Net profit grew 7% YoY (1) Capital Gains f
Slide 28: Prospects 2009
Prospects 2009 27
Slide 29: Demand: Recent decline was lower in Portugal than in Spain
Demand: Recent decline was lower in Portugal than in Spain PORTUGAL – Electricity SPAIN – Electricity SPAIN – Gas Total Market 0.9% -1.1% -2.4% -2.8% -3.3% -3.4% -5.9% -4.0% -5.7% -5.9% -7.1% -12.5% -14.1% -17.2% 4Q08 1Q09 2Q09 Jan-Jul09 (1) 2009 E Demand destruction from industrial segment with les
Slide 30: Liberalized activities: Outlook for 2H09
Liberalized activities: Outlook for 2H09 2009: Electricity forward contracting Pool > 100% • Avg. Selling price1: ~€60/MWh; purchases 9% Contracted Spark Spread 2 locked in: >€15/MWh; Dark Spread 2 locked in: >€20/MWh; CCGT 45% • New Capacity: +862MW CCGT Portugal (3Q09) • End of regulated tariffs i
Slide 31: Liberalized activities: Outlook for 2010
Liberalized activities: Outlook for 2010 Iberian Market: Forward spreads for 2010 1 EDP: Electricity forward contracting - 2010 (€/MWh) (%) Clean Spark Spread Clean Dark Spread Not 18 Contracted 15 > 70% 12 Contracted 100% 9 6 3 0 21-Nov 20-Jan 21-Mar 20-Mai Expected output Sales Source: Market Data
Slide 32: Prospects for 2009: Regulatory Receivables
Prospects for 2009: Regulatory Receivables 2007 and 2008 tariff deficit: already securitized in Mar-09 Tariff Deficit Tariffs Portugal 2009: electricity price assumed at €71/MWh vs. current €48/MWh level Portugal Marginal tariff surplus expected for 2009, not enough to compensate 2008 deficit Pre 20
Slide 33: Conclusion
Conclusion EBITDA strongly resilient, stable and predictable Stable, low-risk • >85% EBITDA with low sensitivity to economic cycle returns • Hedging strategy in liberalized activities • Demand destruction lower in Portugal than in rest of Europe • Tariff deficits: no material amount expected in 2009
Slide 34: IR Contacts
IR Contacts Miguel Viana, Head of IR Sónia Pimpão Elisabete Ferreira Ricardo Nuno Farinha Rui Freitas Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Fax: +351 210012899 Visit EDP Website Next Events Site: www.edp.pt Meetings with Investors London: August 4th-5th, 2009 Link Results & Presentati