Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — FY2019 Earnings Presentation
33 slides from Edp's earnings presentation, Feb 21, 2020
Slide 1: EDP 2019 Results
edp 2019 RESULTS Lisbon, February 218 2020
Slide 2: Disclaimer
This document has been prepared by EDP - Energias de Portugal, S.A. (the "Company") solely for use at the presentation to be made on this date and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where this presentation is made, o
Slide 3: Results Analysis
Results Analysis
Slide 4: 4Q19 Highlights and 2019 Figures
4Q19 Highlights 2019 Figures Hydro volumes Portugal +56% vs. historical avg. Good results in energy management in Iberia Gain in asset rotation in Brazil (cashed-in Feb-20) Continuing growth in networks in Brazil Interest costs started downwards trend in 4Q19 Net debt Dec-19: €13.8 Bn, +3% YoY RESUL
Slide 5: EDP Hydro and Wind production
EDP Hydro production in Iberia EDP Wind production TWh TWh 13.7 29.8 28.1 4Q 10.0 +56% in 4Q19 vs. Historical average1 9M -39% in 9M19 vs. Historical average1 2018 2019 2018 2019 Hydro resources Wind resources vs. LT Avg.1 vs. LT Avg. (P50) Hydro reservoir 0.4 TWh above Avg. Load factor YE (TWh) his
Slide 6: EBITDA 2019
EBITDA 2019 € Mn; YoY growth,% ∆ YoY 3,706 3,317 +€348 Mn Wind & Solar -€159 Mn Hydro Iberia 2,286 -€100 Mn Hydro Brazil Renewables 2,197 +€7 Mn Iberia Networks 991 +€154 Mn Brazil 831 Client solutions +€199 Mn Iberia & EM 312 474 -€37 Mn Brazil -23 -46 Other/adjust 2018 2019 RESULTS PRESENTATION 6
Slide 7: EBITDA – Wind & Solar
EBITDA – Wind & Solar € Mn; YoY growth,% 1,648 2018 2019 YoY 1,300 Avg. Installed Capacity1, GW 914 Production vs. LT Avg. (P50), % Europe 651 Electricity Production, TWh 615 Avg. selling price, €/MWh North America 654 Asset Rotation Gains, € Mn 120 -6 Brazil & Other 2018 2019 1) Considers capacity
Slide 8: EBITDA – Hydro
EBITDA – Hydro € Mn; YoY growth, % 2018 2019 YoY 896 Hydro Production, TWh Avg selling price1, €/MWh 638 Portugal 583 2018 2019 YoY 440 Physical Guarantee, TWh Spain 41 Avg selling price, $R/MWh 25 Brazil 273 173 Gain on mini-hydro sale, € Mn 2018 2019 1) Does not consider results from hedging RESUL
Slide 9: EBITDA – Networks
EBITDA – Networks € Mn; YoY growth,% 2018 2019 YoY Return on RAB Portugal 1, % 991 Return on RAB Spain, % 831 RAB Iberia, €Mn 477 Opex Iberia2, €Mn Portugal4 481 155 2018 2019 YoY Spain 145 RAB distribution3, € Mn 360 Brazil4 206 Transmission EBITDA, € Mn 2018 2019 Electricity distributed, TWh 1) Ro
Slide 10: EBITDA – Client Solutions & Energy Management
EBITDA – Client Solutions & Energy Management € Mn; YoY growth,% Better results from energy management and forward hedging in energy markets, mostly in 4Q ∆ YoY 474 Coal production -49% YoY (18% avg load factor in 4Q19) Normalization of supply margins in Iberia, following a particularly adverse 2018
Slide 11: Change in Net Debt: Dec-19 vs. Dec-18
Change in Net Debt: Dec-19 vs. Dec-18, € Bn New Hybrid (50% equity): -€0.5 Bn Reg. Receivables and related taxes: €0.2 Bn Pension fund extraord. contribution: €0.2 Bn +20% YoY 13.8 13.5 -0.1 0.7 -1.4 1.2 50% of Recurring Organic CF +€2.1 Bn expansion investment (70% renewables, 29% networks) -€1.0 A
Slide 12: Net Financial Costs: 2019 vs. 2018
Net Financial Costs: 2019 vs. 2018 Avg nominal debt by currency3 € Mn +2% 4% 2% Other 9% 11% 671 685 670 BRL 14 15 554 117 USD 25% 29% +€17 Mn 9M19 Euro denominated -€3 Mn 4Q19 Hybrid: 11% in 2019 vs 5% in 2018 EUR 62% 58% 2018 Non- 2018 adj. Interest 2019 adj. Non- 2019 interest1 related interest2
Slide 13: Reported Net Profit Bridge 2019
Reported Net Profit Bridge 2019 € Mn One-Off1 Items Net Profit Breakdown 2019 € Mn -11 EBITDA 3,706 512 D&A and 64 -399 1,867 Provisions -409 EBIT 1,838 Fin. Results & +40 645 392 Associates +103 Income Taxes 226 2nd year with negative results, penalized by low hydro conditions and Extraordinary one
Slide 14: Recurring Net Profit 2019
Recurring1 Net Profit 2019 € Mn ∆ YoY 854 797 Portugal: Turnaround of supply operations; 123 Hydro production -28% YoY 285 186 137 404 EDPR all time record reported net profit +52% YoY 263 141 EDP Brasil all time record reported net profit +5% YoY in BRL 111 2018 2019 1) One-offs impacts at net prof
Slide 15: Strategy Execution
Strategy Execution
Slide 16: 12th Mar 20th Feb
12th Mar 20th Feb RESULTS PRESENTATION 16
Slide 17: Renewables Capacity Build-out and Secured Projects
Renewables Capacity LT contracts secured for 19-22 Projects already secured Unprecedent execution GW Build-out GW; Feb-20 Leadership position in securing LT offshore contracts in 2019-20 solar 5.4 5.4 GW 1.6 GW1 of PPA secured in the wind US 1.8 #1 awarded in Poland & Italy 0.3 auctions 1.3 1.4 2.9
Slide 18: Selective screening of investment projects
Selective screening process of investment projects... … achieving risk/return discipline Threshold Achieved1 Expansion Capex opportunities analyzed in 2019 at top decision-making level IRR/WACC Attractive returns approved and successful … NPV/CAPEX … in projects located in geographies Contracted … t
Slide 19: US and EU incentives and growth opportunities
US: Federal and State-level incentives: Continued decline in LCOE PTC extension (60% up to 2024) 10.8 GW of wind & solar assets in operation in 10 geographies Hybrid projects: hydro/solar/wind Renewable Portfolio Standards (13 States enacted RPS targets in 2019) Development teams with extensive trac
Slide 20: JV Offshore capacity
JV Offshore capacity Portfolio description GW Gross 10-17 5-10 5.2 3.7 5-7 1.5 2019 2025E Under development Under construction/installed 1) Final terms agreed, awaiting EC clearance RESULTS PRESENTATION 20
Slide 21: EBITDA from distribution Brazil
EBITDA from distribution Brazil R$ Mn 1 Regulatory reviews in 2019 (visibility up to Aug-22 for EDP ES and Oct-23 for EDP SP) Net RAB Growth: + 36% REAL GAINS of + 35-45% 1,393 R$ 234 Mn RAB update Return on RAB at 8.09% +25% R$ 134 Mn Regulatory haircut over investments <0.5% (#1 in Brazil) +35% em
Slide 22: EBITDA from transmission in Brazil
Transmission portfolio EBITDA from transmission in Brazil R$ Mn 91% 203 km Partial COD 11 Jan-20 53% 7 123 km COD Apr-21E 231 100% 49% 24 113 km 30 375 km COD Dec-18 COD Mar-21E 18 2018 2019 2022 52% 485 km 142 km 21 COD Dec-20E Q COD Dec-21E Under licensing % of completion RESULTS PRESENTATION 22
Slide 23: Stable Client Base and Supply EBITDA
Clients Stable Client Base Supply EBITDA Electricity and gas supply points Iberia € Mn Focus on service quality Complaints YoY >100 to retain high value clients # complaints/ 1k contracts Iberia Services contracted with clients ~90 Increase services penetration 18.9% Homecare Services/contracts Incr
Slide 24: Proceeds from asset rotation
Proceeds from asset rotation € Bn Positive outlook supported by low interest rate context and strong appetite from investors for infrastructure/renewables assets: 2020: Target deals in the US and Europe (~0.7 GW net) 2 deals agreed, with better than expected results: >25% Europe: 997 MW wind portfol
Slide 25: Disposal of 25% of hydro portfolio in Iberia
... while other complementary options Disposal of 25% of hydro portfolio in Iberia: €2.2 Bn for 1.7 GW in Portugal... may still be considered Hydro disposal rationale Transaction multiple: (positive read across of remaining hydro assets) Derisking: market price exposure and concentration of hydro vo
Slide 26: Operations: Opex efficiency
Weight on Opex Operations Indicator YoY Change Highlights Iberia Predictive maintenance generation up from 34% to 68% Opex1 +34% smart meters in Portugal EDP Brasil Avg. Inflation: +3.7%2 Opex1 in BRL EDPR Avg MW +1% Adj. Core Opex1/MW3 Predictive maintenance up to 67% Opex ex-forex1 -€20 Mn OPEX Yo
Slide 27: Contracted exposure and Net Debt / EBITDA
% of EBITDA Net Debt / EBITDA Contracted exposure 4.0x 3.6x <3.2x <3.0x 2018 2019 2020 post-disposal 2018 2019 2020 2022 RESULTS PRESENTATION 27
Slide 28: Bond deals and debt maturities
Most recent EDP consolidated debt maturities in 2020-2022 Market yields of 5y EDP Bonds, % (Jan 2019-Feb 2020)1 bond deals € Bn and bonds’ coupon rate EUR2 USD3 Sep-19: €600 Mn 3.2 Other debt4 USD green bond issued 5 BRL EUR (0.43% yield) ∆ Jan19-Feb20 4 Jan-20: €750 Mn 3 2.3% 1.7 green hybrid bond
Slide 29: Recurring Organic Cash Flow and Uses of cash
Recurring Organic Cash Flow Uses of cash € Bn € Bn 2021-22E 2019-20E >12 ~3 1.4 ~2 1.2 >8 0.8 2017 2018 2019 Sources of Cash Dividends Deleverage Net investments RESULTS PRESENTATION 29
Slide 30: 2019 Performance and coal production in Iberia
Aboño 1 will be 2005 20% 2005 628 gCO2 / kWh converted to gas Aboño 1&2 (0.9 GW) (COD 2022); Aboño Soto 3 (0.3 GW) 2 as a backup 2019 66% 2019 -66% No production since Jun-19 2025 2025 Shutdown up to 2023, Sines (1.2 GW) conditional on positive margins 2030 2030 2019 Performance: Penalized by weak h
Slide 31: ESG ratings
Global Global Global 1 Integrated Utilities Utilities (Score 4.7) Integrated Utilities Global Utilities (Score 90) (Score 68) 1) Bloomberg; | 2) In 2018 Sustainalytcs has launched the ESG Risk Rating methodology and replaced the ESG Rating methodology. EDP overall Risk Rating in February 2020 was 24
Slide 32: EBITDA, Recurring Net profit and Dividend
EBITDA Recurring Net profit Dividend € Bn € Bn € / share 81% payout ratio 3.7 0.19 0.9 Target payout range Dividend floor 2019 2020E 2022E 2019 2020E 2022E 20191 2020-22E 1) Proposal of dividend, subject to AGM approval RESULTS PRESENTATION 32
Slide 33: IR Contacts and Next Events
IR Contacts E-mail: ir@edp.com Phone +351 210 012 834 Site: www.edp.com Next Events Feb 26-28th: US and Canada Roadshow Mar 6th: Zurich Roadshow Apr 16th: General Shareholders’ Meeting Mar 4-5th: London Roadshow Mar 6th : Paris Roadshow May 7th: 1Q20 Results Mar 5th: Madrid Roadshow Mar 18th: London
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