Edp Renewables Sa · EURONEXT:EDPR
Edp Renewables Sa — EDP Renováveis — Non-Deal Roadshow (March 2009)
35 slides from Edp Renewables Sa's roadshow presentation, March 2009
Slide 1: Roadshow Presentation
Roadshow Presentation March, 2009 powered by nature
Slide 2: EDPR: #4 wind player in the world with a sound asset base
EDPR: #4 wind player in the world with a sound asset base USA Poland Belgium 2,158 - 199 France 47 20 18,319 Romania 23 185 1,268 62 8 - Portugal 1,268 - 737 553 Spain Brazil 42 2,109 729 477 14(1) 4,866 - 216 Gross MW Installed Under Pipeline + Capacity Construction Prospects MW Installed Capacity
Slide 3: Agenda
Agenda I Key achievements and highlights of 2008 II Operating and financial performance III Outlook and strategic update IV Conclusions 2
Slide 4: Key achievements and highlights of 2008
Key achievements and highlights of 2008
Slide 5: Delivering on growth and on value
Delivering on growth and on value 2008 Capacity Additions 2008 EBITDA (Gross MW) (€million; %) Growth vs 2007 pro-forma +91% 1,413 >85% 1,400 438 >425 (1) 2008 Target 2008 Actual 2008 Guidance 2008 Actual EDP Renováveis successfully accomplished its 2008 targets Notes: (1) Reaffirmed at 9M08 present
Slide 6: Key highlights of the period (1/2)
Key highlights of the period (1/2) Deliver vs. IPO Accomplishment of the IPO target by adding 1,413 MW in 2008 (+40% vs 07 PF) and managing a portfolio in excess of 5.0 GW Continuously delivering above average load factors, underlining the quality of EDPR’s assets: +200bps vs Spanish Market in 2008
Slide 7: Key highlights of the period (2/2)
Key highlights of the period (2/2) Deliver vs. IPO Strong EBITDA growth of 91% to €438m on the back of execution and good operating performance One of the highest EBITDA margins in the sector with 75% (vs. 72% ’07 PF) Sound Net Profit of €104m following a strong EBITDA and lower financial costs Soli
Slide 8: Operating and financial performance
Operating and financial performance
Slide 9: Strong track record on capacity and growth delivery
Strong track record on capacity and growth delivery Capacity Installed 2008 Target Delivery (Gross MW) (Gross MW) +898 1,413 1.4GW +1.4GW +1.5GW 5,052 +309 3,639 2,127 +140 +66 1Q 2Q 3Q 4Q 2008 Target 2006 2007 2008 • Achievement of 2008 target again demonstrates capability to deliver above 1.4GW p.
Slide 10: 78% increase on electricity output on the back of capacity growth and supportive load factors
78% increase on electricity output on the back of capacity growth and supportive load factors… factors… 2008 QoQ Electricity Output 2008 QoQ Load Factors (EBITDA GWh) (%) Growth vs 2007 pro-forma Avg. load factor for the year +78% 40% USA 2,454 38% 34% 37% 1,392 7,807 EU 1,929 31% 26% 28% 2,032 24%
Slide 11: Continuously achieving above market levels, underlining the premium quality of EDPR's assets
…which are continuously achieving above market levels, underlining the premium quality of EDPR’ EDPR’s assets Spain: EDPR Historical Load Factors (%) Premium of 2-3p.p. in the load factor Market average (1) 28% 29% 26% 27% 27% 26% 24% +10% in electricity output 2003 2004 2005 2006 2007 2008 +10% in
Slide 12: 2008 benefited from a balanced portfolio, good pricing conditions and hedging policy in 4Q
2008 benefited from a balanced portfolio, good pricing conditions and hedging policy in 4Q Production Breakdown Avg. Selling Price (%; GWh) (€/MWh or $/MWh) Not exposed to market prices 2008 2007 % 16% + €89 €93 -4% Feed-in PPA or 50% $86(1) $85(1) +1% Hedged EDPR actively manages (95%) the risk of
Slide 13: Operating performance fully reflected in solid financial growth at all levels
Operating performance is being was fully reflected in solid financial growth at all levels Gross Profit EBITDA Net Income (€ million) (€ million) (€ million) +82% 581 +91% 438 319 230 x26 104 4 07 PF 2008 07 PF 2008 07 PF 2008 72% 75% EBITDA margin 12
Slide 14: 2008 EBITDA performance remained strong, with one of the highest margins
2008 EBITDA performance remained strong, with the company achieving one of the highest margins in the sector… sector… EBITDA EBITDA Breakdown (€ million) (€ million, 2008) +91% Portugal vs ‘07 17% RoE 3% 131 Spain 80 50% 438 USA 101 31% 126 1Q08 2Q08 3Q08 4Q08 2008 EBITDA 81% 77% 70% 73% 75% margin
Slide 15: Decrease in financial costs resulted in bottom-line >€100m
…which, coupled with a decrease in financial costs, resulted in a bottom- bottom-line >€ >€100m EBITDA to Net Profit (€ million) YoY growth Net Debt Cost of Debt (€ million) (%) EBITDA 438 +91% (1) D&A 206 +64% 2007 2,414 2007 5.1 Financial 70 -26% -1,345 -50bps Costs Taxes & 2008 1,070 2008 4.6 57
Slide 16: Solid balance sheet as of December 2008 to face future growth
Solid balance sheet as of December 2008 to face future growth Enterprise Value Debt by Type Debt by Currency (%) (%) (%) 19% Variable (3) 59% USD 65% Equity (1) 81% Fixed Rate 5% Minorities (2) 13% TEI 41% EUR 16% Net Debt 2008 2008 2008 • >60% of Financial Debt contracted through shareholder loans
Slide 17: Outlook and strategic update
Outlook and strategic update
Slide 18: EDP Renováveis faces new challenges and great opportunities for 2009 and onwards
EDP Renová Renováveis faces new challenges and great opportunities for 2009 and onwards 1 Strong regulatory momentum in the USA and stable environment in Europe EDP Renováveis is in 2 a privileged position to maintain value Improve portfolio’s risk profile to face oriented growth the volatility in e
Slide 19: Green mandatory demand is the main growth driver to the US wind sector
1 Green mandatory demand is the main growth driver to the US wind sector Current RPS’ are only defined and enforced at … but already project green demand to increase state level … 11% CAGR to comply with targets TWh 450 VT ME WA 400 Rockies MT ND NH MN ISO-NE OR NY MA PNW WI RI 350 NY-ISO ID SD MI C
Slide 20: A new energy bill gains momentum to boost renewables growth in US
1 A new “energy bill” bill” gains momentum to boost renewables growth in US “It begins with energy” Impact of a Federal RPS based on latest proposals (1) Obama’s speech to Congress, 25 February 2009 (TWh) Renewables are a key priority for the new +78% administration, not only as a climate change ini
Slide 21: The Stimulus Bill introduced positive changes in wind-farms' economics and risks
1 The “Stimulus Bill” Bill” introduced positive changes in wind- wind-farms’ farms’ economics and risks Stimulus Bill offers two options on tax incentives: Main Economic Improvements: (+) Option to elect the scheme that maximizes project’s NPV PTC and traditional monetization via Partnership Structu
Slide 22: Actively managing the portfolio to provide secured cash flows in a volatile pricing environment
2 Actively managing the portfolio to provide secured cash flows in a volatile pricing environment Capacity Breakdown (%; EBITDA MW) Feed-in 17% 17% Hedging merchant position in PPA or Hedged 37% Spain: 49% 2.0 TWh hedged @ €46-50/MWh Fixed Premium 15% Market with cap & floor 8% 15% Target to close P
Slide 23: EDPR has closed PPA contracts in US for 2009 projects with good pricing conditions
2 EDPR has already managed to close PPA contracts in US for 2009 projects with good pricing conditions US Market: PPAs closed for 2008 projects (1) EDPR: PPAs already closed for 2009 projects (%) (Estimated Revenue (2) / MW) +8% +28% 69 58 2008 (3) Wheat Field BC V Portfolio (PPA Aug-08) (PPA Feb-09
Slide 24: EDPR will continue to manage its turbine procurement to adapt its capex strategy
3 EDPR will continue to manage its turbine procurement to adapt its capex strategy to current environment EDPR Turbines Commitment until 2012 Global Steel Price Index (GW) (Carbon steel index: April 94=100) 300 Latest EDPR Under Constr. 0.8 framework agreement 250 was negotiated before the sharp inc
Slide 25: Long-term goals reaffirmed under an improved regulatory environment
Long- Long-term goals reaffirmed under an improved regulatory environment for the industry… industry… Robust and Diversified Pipeline EDPR Long-term Goals (GW) (Gross GW) 28.2 9.4 +5.4GW 10.5 GW EU 34% 10.2 5.1 GW US 6.0 66% 1.9 0.8 Total Prospects Tier 3 Tier 2 Tier 1 Under const. 2008 2012E …but p
Slide 26: Cash flow generation, tax credit monetization and shareholder loans as main sources of funding
shareholder Cash flow generation, monetization of tax credits in US and shareholder loans as the main sources of funding to support 2009 capex Use of Funds Main Sources of Funds • Cash-Flow Remaining capex for • Shareholder Loans: 2009 build-out − €1.5bn already contracted for 2009 − Interest rate o
Slide 27: Conclusion
- . we ) Conclusion
Slide 28: EDP Renováveis to continuously deliver on strong value creation
EDP Renová Renováveis to continuously deliver on strong value creation Credibility on targets delivery and execution: +1.4 GW in 2008 Premium assets delivering higher revenues per MW Strong financial growth and solid balance sheet Positioned to benefit from opportunities under improved fundamentals
Slide 29: Annex
Annex
Slide 30: Current share price discounts €1.4m/MW for the 2008 installed capacity
Current share price discounts €1.4m/MW for the 2008 installed capacity Enterprise Value Implicit EV / MW (€ millions) (2008 installed capacity: 4,400 EBITDA MW) € million / MW Equity @ 5.75 5,016 Net Debt 2008 1,069 1.56 1.41 1.46 1.36 1.26 Institutional Partners 2008 852 Minorities 2008 342 Enterpr
Slide 31: Spain: market prices evolution and EDPR hedging
Spain: market prices evolution and EDPR hedging Realised Market Price in Spanish Market + Hedging (€/MWh) EDPR Pool price 70 68 66 69 61 63 65 56 48 400 GWh hedged at €74/MWh 47 37 36 36 34 35 35 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 30
Slide 32: US Stimulus Bill: election of each tax incentive scheme
US “Stimulus Bill” Bill”: election of each tax incentive scheme can be made on a project by project basis Tax Incentives: 1. PTC 2. ITC w/o cash grant 3. ITC w/ cash grant Cash from Department of Description Tax Credit Tax Credit Treasury Amount $21/MWh 30% of the initial capex Tax basis (Depreciati
Slide 33: EDP Renováveis footprint in US wind market
EDP Renová Renováveis footprint in US wind market Gross MW Iowa Illinois In operation Minnesota In operation Pioneer Prairie I 198 Mkt In operation Twin Groves I 198 PPA Pioneer Prairie II 94 Mkt Prairie Star 101 PPA Twin Groves II 198 PPA Under Construction Under Construction Pioneer Prairie II 8 M
Slide 34: EDP Renováveis has today a balanced portfolio located in attractive markets
EDP Renová Renováveis has today a balanced portfolio located in attractive markets YE08 Gross MW in Country operation (under constr.) 2008 Price/MWh Remuneration Scheme Wind Resource • PPA or Merchant 2,158 (199) $86(1) • Tax Incentives USA Feed-in tariff, or 2,109 (477) €101 market option with prem
Slide 35: powered by nature
edp renovaveis powered by nature