Naturgy Energy Group, S.a. · BME:NTGY
Naturgy Energy — H1 2019 Earnings Presentation
31 slides from Naturgy Energy's earnings presentation, Jul 24, 2019
Slide 1: 1H19 Results
Naturgy y 1H19 Results 24 July 2019
Slide 2: Agenda
Agenda 1. CNMC proposals for consultation 2. Progress on Strategic Plan 18-22 3. 1H19 consolidated results 4. 1H19 results by business unit 5. Conclusions
Slide 3: CNMC proposals for consultation
01 CNMC proposals for consultation
Slide 4: Preliminary assessment of CNMC proposals
Preliminary assessment of CNMC proposals Gas networks Electricity networks Ordinary EBITDA Ordinary EBITDA Misdiagnosis of the Spanish gas system contribution1 2018 Stable model, mostly technical changes contribution 2018 Insufficient remuneration of the asset base Introduction of WACC-based remuner
Slide 5: Strategy to protect the business
Strategy to protect the business Preparation of comprehensive allegations to defend and protect the interests of all our stakeholders Fair valuation of the asset base Adequate risk-adjusted returns Reasonable and stable model to sustain growth Fair implementation calendar Analysis of all ava
Slide 6: Progress on Strategic Plan 18-22
02 Progress on Strategic Plan 18-22
Slide 7: Value creation pillars
Value creation pillars Simplicity & accountability Shareholder Value Optimization remuneration creation Capital discipline Progress on Strategic Plan 7
Slide 8: Simplicity & accountability
Simplicity & accountability Business positioning: sale of selected assets More simplicity Gas distribution and supply Reduction of 33 subsidiaries Completed Nedgia (20%) Gas distribution and supply Reduced management structure from 6 to 3 Total proceeds: Kangra layers ~ €2.7bn Real est
Slide 9: Optimization
Optimization Efficiencies with visible P&L impact Other optimizations Ordinary opex1 Launch of office premises relocation and optimization in process €1,213m €1,134m New FY19 Targeting 50% reduction of the group’s efficiencies target: corporate centers by 2022 Progress on Lean Project Minimum €9
Slide 10: Capital discipline
Capital discipline Total capex by activity (LTM) Renewables exposure (GW) Rest 5% ~12.1 LatAm gas ~5.3 networks 14% ~6.8 Renewables ~4.2 ~2.6 ( & Int.) 44% Gas networks Total: 12% ~€1.9bn ~1.7 Subject to Golden Rules of investment LatAm electricity networks 14% Electricity 12% Installed capacity
Slide 11: Shareholder remuneration
Shareholder remuneration Dividend as per SP 18-22 Share buy-back 2nd Completed LTM 1st interim: 2019 final: €400m interim: July 31, March (as of 30 June) November 2019 2020 2019 0.29 €/sh. Expected accretion upon share cancelation in August ~1.7% (approved) 2019 dividend 1.37 Launch of new tranc
Slide 12: 1H19 consolidated results
03 1H19 consolidated results
Slide 13: Key highlights
Key highlights Key figures (€m, % vs. 1H18) 1 Energy scenario headwinds Ordinary EBITDA Ordinary Net Income 2 Stability in Gas & Power due to de-risking 3 Strong performance of LatAm Infrastructure 2,277 + 8% 699 +30% 4 Acceleration of efficiency plan Capex Net Debt (€bn) 5 Investments mos
Slide 14: EBITDA evolution (€m)
EBITDA evolution (€m) + 8% 49 69 2,277 72 101 2,105 56 2,150 2,004 (74) (127) Including the following FX impacts: €14m €10m - €46m €12m FX: -€10m EBITDA Non-ordinary Ordinary Gas & Power Infra. EMEA Infra. LatAm Infra. LatAm Corporate Ordinary Non-ordinary 1 EBITDA 1H18 items EBITDA South North & ot
Slide 15: Net Income evolution (€m)
Net Income evolution (€m) +30% 183 692 592 3,813 532 (23) (100) (3,281) Net Non-ordinary Ordinary Activity Financial Ordinary Non-ordinary1 Net income items net result, net items income 1H18 income associates income 1H19 1H18 & other 1H19 Ordinary earnings growth Note: 15 1. Of which: -€82m correspo
Slide 16: Cash flow and Net debt evolution (€m)
Cash flow and Net debt evolution (€m) Cash flow Net debt 1H19 vs. 1H18 EBITDA 2,150 7% (%): avg. cost of debt3 Taxes (107) Net interest cost (331) 3.1% 3.2% Other non-cash items (64) 15,309 80 29 14,826 Funds from operations 1,648 14% 856 Change in working capital 808 (1,448) Cash flow from operatio
Slide 17: 1H19 results by business unit
04 1H19 results by business unit
Slide 18: Gas & Power
Gas & Power EBITDA evolution (€m) Highlights Gas, Power & services sales: margin recovery in power supply and efficiencies partially offset by lower sales 118 695 44 639 640 International LNG: lower sales and margins impacted by 595 (74) scenario vs. a strong 2018. 90%/68% of volumes (13) 25 (55
Slide 19: Infrastructure EMEA
Infrastructure EMEA EBITDA evolution (€m) Highlights Spain gas networks: efficiency improvements more than compensate for mild demand 898 32 29 11 970 919 Spain electricity networks: efficiencies, investment and 891 7 (51) lower interruption times vs. 1H18 EMPL: annual tariff increase and favo
Slide 20: Infrastructure South LatAm
Infrastructure South LatAm EBITDA evolution (€m) Highlights Chile electricity: solid growth driven by tariff indexation and efficiencies 17 449 448 18 20 Chile gas: higher sales and margins supported by tariff 38 400 (6) (1) 362 indexation and efficiencies Brazil gas: tariff indexation and eff
Slide 21: Infrastructure North LatAm
Infrastructure North LatAm EBITDA evolution (€m) Highlights Mexico gas: annual indexation update, commercial repositioning and efficiencies 29 190 (1) 189 Panama electricity: new regulatory period and higher 40 demand/temperatures vs. last year 123 121 (2) Including the following FX impacts: €7m
Slide 22: Conclusions
05 Conclusions
Slide 23: Summary 1H19 results
Summary 1H19 results Energy scenario headwinds De-risking of merchant activities support stability despite the more challenging scenario Strong performance of LatAm Infrastructure businesses Acceleration of efficiency plan Investments mostly in electricity Focus on cash flow generation l
Slide 24: Final remarks
Final remarks Solid progress on Strategic Plan Commitments Capital Markets Day Achievements one year later Firm simplification with focus on business ~€2.9 Divested signed positioning bn Efficiency as key pillar of the transformation ~15% Opex reduction 1H19 vs 2H18 Deploying capital for energy
Slide 25: 1H19 results Q&A
Naturgy by 1H19 results Q&A
Slide 26: Appendix
Naturgy y Appendix
Slide 27: 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 28: Alternative Performance Metrics
Alternative Performance Metrics Alternative performance Reconciliation of values Definition and terms Relevance of use metrics 30 June 2019 30 June 2018 Current and non-current financial debt Gross financial debt (5) - "Cash and cash Net financial debt Euros 14,826 million = 18,339 - 3,489 - 24 Euro
Slide 29: ESG metrics
ESG metrics ESG metrics 1H19 1H18 Change Comments Health and safety Lost time (LT) incidents (1) units 8 11 -27.3% The absence of lost time incidents in 2Q19 has allowed to improve significantly vs. 1H18 Despite the reduction in working hours during the period, the reduction in accidents has allowed
Slide 30: 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 31: Capital Markets contact
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