Slide 1: EDP 9M09 Results Presentation
EDP 9M09 Results Presentation October 30th, 2009
Slide 2: 9M09: Highlights of the period
9M09: 9M09: Highlights of the period EBITDA: €2,427m, +2% YoY (EBITDA recurrent: €2,429m, +9% YoY) Hedging: Liberalized activities EBITDA +66% YoY Positive results form proper and well timed decisions on risk management in energy markets Avg. Generation Installed Capacity: +14% YoY in 9M09, reaching
Slide 3: 9M09: Highlights of the period
9M09: 9M09: Highlights of the period Net Profit: €748m, -20% YoY Net Profit Recurrent: €780m, +9% YoY Average cost of debt fell from 5.7% in 9M08 to 4.0% in 9M09 54% of debt at floating rates; New bond issue in 3Q09: USD1Bn, 10-Year maturity, 4.9% Cupon Capex: €2,528m in 9M09, 83% is expansion; 87%
Slide 4: 9M09 Financial Headlines
9M09 Financial Headlines (€ million) 9M08 9M09 % Chg. EBITDA 2,370 2,427 +2% Net Profit 940 748 -20% Capex 2,171 2,528 +16% Net Debt (€bn) 13.9 * 14.4 +4% Net Debt / EBITDA (x)** 4.4x * 4.4x - Adjusted Net Debt (1) / EBITDA (x) 3.8x * 4.2x - Net profit ex-non recurrent items: €780m, +9% YoY Profitab
Slide 5: 9M09 EBITDA Breakdown
9M09 EBITDA Breakdown 81% of 9M09 EBITDA came from regulated and LT contracted activities +2% % Chg. YoY €2,370m €2,427m Liberalized 12% Activities Iberia 19% Brazil 19% 16% 13% Wind Power 15% Regulated 30% 81% 25% Networks Iberia LT Contracted 27% 25% Generation Iberia 9M08 9M09 Specialization acco
Slide 6: Non-recurrent items above the EBITDA line
Non- Non-recurrent items above the EBITDA line EDP Group (€ million) 9M08 9M09 % Chg. Reported EBITDA 2,370 2,427 +2% Portugal Distribution Tariff Adjust. (1) -166 0 - Brazil Distribution Tariff Adjust. (1) -26 -14 - HR Restructuring Costs 43 16 - Adjusted EBITDA 2,221 2,429 +16% +9% EBITDA ex-non r
Slide 7: EDP Consolidated operating costs: Positive results from efficiency program
EDP Consolidated operating costs: Positive results from ongoing corporate- corporate-wide efficiency program Efficiency Program 2008-12 annual savings (1) Controllable Operating Costs (2) – EDP Group (€ million) (€ million) % Chg. YoY Human Resources Supplies and services -2% 160 1,056 1,033 EDP Ren
Slide 8: Business Areas
Business Areas 7
Slide 9: Long Term Contracted Generation Iberia: PPA/CMECs with stable return
Long Term Contracted Generation Iberia (25% of EBITDA): PPA/CMECs PPA/CMECs with stable Return on Assets of 8.5% EBITDA Reported EBITDA adjusted (2) (€ million) (€ million) PPA/CMEC Special regime (1) -7% +3% 667 643 664 617 9M08 9M09 9M08 9M09 (-) change in fuel costs: -€72m YoY due to (+) new Deso
Slide 10: Liberalised Energy Activities Iberia: Long position in final clients
Liberalised Energy Activities Iberia (19% EBITDA) Long position in final clients EBITDA Liberalised Activities (€ million) +66% 470 321 284 9M07 9M08 9M09 Selling price(1) (€/MWh) 64.5 -2.8% 62.7 Avg. Pool cost (€/MWh) 68.2 -43% 38.9 EBITDA: +66% in 9M09; +92% in 3Q09 Average selling price above €60
Slide 11: Liberalised Generation Power Plants Iberia: Generation costs lower YoY
Liberalised Generation Power Plants Iberia: Generation costs lower YoY; YoY; Coal & CCGT load factors above Spanish average EDP Liberalised Power Plants Iberia – Production EDP vs Spain – Load factors in 9M09 (TWh) (%) -4% Coal CCGT 14.9 EDP (liberalised) Spain’s average Nuclear 14.3 Hydro 6% 6% 6%
Slide 12: Liberalised Electricity & Gas Supply in Portugal & Spain
Liberalised Electricity & Gas Supply in Portugal & Spain Electricity Supply – Portugal & Spain Gas Supply – EBITDA (GWh and ‘000) (€ million) Volumes (GWh) Clients (‘000) Portugal Spain +73% +39% +49% 56 511 14.3 40 9.6 295 +131% +25% +339% +36% 9M08 9M09 9M08 9M09 9M08 9M09 • Volume growth prompted
Slide 13: Regulated Energy Networks Iberia (25% of EBITDA)
Regulated Energy Networks Iberia (25% of EBITDA) Reported EBITDA Adjusted EBITDA (1) (€ million) (€ million) Gas Iberia % Chg. YoY Electricity Spain Electricity Portugal -13% +5% 723 629 612 0% 583 0% +29% +12% -21% +5% 9M08 9M09 9M08 9M09 Reported EBITDA YoY comparison penalised by: • Electricity P
Slide 14: Regulated Energy Networks Iberia: Demand and efficiency improvements
Regulated Energy Networks Iberia: Demand with low impact on regulated revenues, efficiency improvements Energy Distributed in Regulated Networks Electricity Distribution: Efficiency Ratios (TWh) (€) Electricity Portugal Gas Spain Opex(2)/Km Network Opex(2)/Client Connected Residential demand & other
Slide 15: Wind Power: Strong increase of installed capacity, premium load factors
Wind Power: (15% of EBITDA) Strong Increase of Installed Capacity, premium Load Factors YoY Capacity Increase Average Load Factor (MW) (%) Europe USA +39% 35% 35% 33% 4,882 31% 798 28% 28% 568 3,502 53% 57% 47% 43% (1) 9M08 Europe USA 9M09 1st Quarter 1st Half 9 Months 08 09 08 09 08 09 • Wind Power
Slide 16: Wind power prices: 86% of production without material spot exposure
Wind power prices: 86% of production in 9M09 sold without material exposure to spot electricity prices Production Breakdown Avg. Selling Price per MWh 7,295 GWh 9M09 9M08 % Feed-in Stable tariffs, Inflation updated. + 15% €97 €95 +2% tariff (1) 2,156 GWh, 83% protected: 65% sold forward (+€6.5/MWh)
Slide 17: Brazil: Significant recovery in 3Q09
Brazil (16% (16% of EBITDA): EBITDA): Significant recovery in 3Q09 Reported EBITDA (€ million) -15% 454 387 -3% 156 151 9M08 9M09 3Q08 3Q09 EBITDA -15% YoY in 9M09, -3% in 3Q09: BRL/EUR appreciation in 3Q09 (+9% vs. 1H09); One-off trading gains in 2008; One-off staff reduction costs in 2009; Positiv
Slide 18: Brazil: Recent performance of energy demand and BRL/EUR
Brazil: Recent performance of energy demand and BRL/EUR Electricity Distributed (TWh) BRL/EUR: Year-to-Date Bandeirante & Escelsa Concession Areas Average in the period -8% 16.8 15.5 +7% 2.92 5.5 5.1 2.67 2.58 9M08 9M09 2Q09 3Q09 Jan Fev Mar Abr Mai Jun Jul Ago Set Out Industrial Segment: Signs of r
Slide 19: Consolidated Financials
Consolidated Financials 18
Slide 20: Consolidated Capex 9M09: 83% in expansion
Consolidated Capex 9M09: 83% in expansion; 87% of expansion capex was in wind and hydro power €2,528m Brazil Wind Power: €1,452m (1) 3% CCGT Iberia 8% • 45% in US, 33% in Spain and 22% in RoEurope Hydro Portugal 13% • 33% on projects concluded and 67% on projects Expansion ongoing Capex €2,086m Hydr
Slide 21: Regulatory Receivables by Sep-09
Regulatory Receivables by Sep- Sep-09 €901m Regulatory Receivables from CMECs: €460m • €253m created in 9M09 (low hydro production and low electricity prices). • c€250m expected to be recovered during 2010, remaining in 2011. Portugal CMECs Spanish Tariff Deficit: €445m • €103m created in 9M09 Brazi
Slide 22: EDP Consolidated Net Debt
EDP Consolidated Net Debt Debt by Interest Rate Term Debt by Currency Debt by Source of Funds USD Fixed Banks 20% 46% 6% 54% BRL 49% 51% 74% Capital Floating EUR Market 2008 9M09 Rating Last Rating Action Net Debt/EBITDA 4.4x 4.4x Standard & Poors A-/Negative/A2 04/08/2009 Moody’s A3/Stable/P2 09/06
Slide 23: EDP consolidated debt maturity profile
EDP consolidated debt maturity profile EDP consolidated debt maturity profile (September 30, 2009) (€ million) Commercial paper Other companies Average Debt Maturity EDP SA + BV Brazil: € 229 M Sep-09: 5 years Project Finance: € 25 M 4,000 3,500 € 1 bn Bond: Oct 09 20.2% 3,000 2,500 14.1% 14.1% 13.2
Slide 24: EDP main sources and uses of funds in 2009-2011
EDP main sources and uses of funds in 2009- 2009-2011 Sources of funds Use of funds • Refining needs in the bond market 2009-2011: • Cash & Equivalents (Sep-09): €2.5bn Bond issue maturing in Oct-09: €1.0bn • Available Credit Lines (Sep-09): €2.6bn Bond issue maturing in Jun-10: €0.5bn Bond issue ma
Slide 25: Net Profit Break-down
Net Profit Break- Break-down (€ million) 9M08 9M09 ∆% ∆ Abs. • Net interest costs down 15% YoY: Decline in avg. cost of debt, from 5.7% EBITDA 2,370 2,427 2% +57 in 9M08 to 4.0% in 9M09, more than Net depreciations & offset higher Net Debt. 904 955 6% +51 provisions • Others include: In 9M08: €405m
Slide 26: Recurring Net Profit up 9% YoY
Recurring Net Profit up 9% YoY EDP Group (€ million) 9M08 9M09 % Chg. Reported Net Profit 940 748 -20% Gain from EDP Renováveis IPO -405 0 - Other: Capital Gains & Impairments (1) 179 32 - Recurrent Net Profit 714 780 +16% +9% Excluding non recurrent items, Net profit grew 9% YoY (1) Capital Gains f
Slide 27: Prospects 4Q09 & 2010
‘ JS Prospects 4Q09 & 2010
Slide 28: Energy Demand Iberia: Recent performance and prospects
Energy Demand Iberia: Recent performance and prospects PORTUGAL – Electricity SPAIN – Electricity SPAIN – Gas Total Market YoY Change YoY Change YoY Change 0,9% -0,8% -0,4% -1,1% -1,6% -3,3% -2,4% -5,9% -5,6% -4,7% -5,7% -9,2% -7,1% -12,5% -17,2% 4Q08 1Q09 2Q09 3Q09 15 Days Oct-09 • Electricity dema
Slide 29: Liberalized activities: Outlook for 2010 & 2011
Liberalized activities: Outlook for 2010 & 2011 EDP: Electricity forward contracting - 2010 EDP: Electricity forward contracting – 2011 (%) (%) Not Contracted ~90% Contracted Not Contracted 100% 100% ~20% Contracted Expected output Sales Expected output Sales • Contracting done essentially with libe
Slide 30: Prospects for 4Q09
Prospects for 4Q09: • Liberalized activities: Own production fully sold 4Q09 • Wind: Additional capacity, 0.6 TWh sold forward in Spain at €42/MWh Market Environment: • Avg. BRL/EUR in 4Q09-to-date (until Oct-26th): 2.57, +14% YoY; • Seasonally, 4Q is stronger: on wind/hydro output, on energy distri
Slide 31: Prospects for 2010: EBITDA
Prospects for 2010: EBITDA Liberalized 11% ~90% of expected production sold forward at thermal spreads ~€10/MWh Activities Iberia 17% New regulatory period Escelsa starts in Aug-2010, Bandeirante in Oct-2011 Brazil New capacity to be installed in 2010: 1.3-1.4GW 22% Wind Power Green energy prices US
Slide 32: Conclusion
Conclusion Stable, low-risk EBITDA strongly resilient, stable and predictable returns • ~85% EBITDA with low sensitivity to economic cycle • High weight of long term contracted generation and regulated networks • Hedging liberalized activities: Selling more energy directly to clients not in pool Sel
Slide 33: Annex
Annex 32
Slide 34: Long Term Contracted Generation Iberia: Non recurrent impact from fuel procurement
Long Term Contracted Generation Iberia (25% of EBITDA) Non recurrent impact on EBITDA from fuel procurement Fuel procurement PPA/CMECs PPA/CMECs: Non-recurrent results from fuel procurement and associated hedging results Impact on EBITDA Impact on financial results PPA/CMEC pass-through of fuel cost
Slide 35: Liquidity: Financing cash needs two years in advance
Liquidity: Financing cash needs two years in advance €1bn 5 Year Bond – Feb-09: • Oversubscribed with well diversified investor pool €1.6bn 3 Year Revolving Credit Facility – Mar-09: • EDP signed a new 3-year RCF, replacing the RCF due in Jun-09 • Club deal with 19 national and international banks w
Slide 36: EDP liquidity position Sep-09
EDP liquidity position Sep- Sep-09 (€ million) Sources of liquidity (Sep-09) Instrument Maximum Number of Utilised Available Maturity Amount counterparties Revolving Credit Facility (US$1.5bn) 1,024 22 1,024 - 02-07-2014 Revolving Credit Facility 1,600 19 - 1,600 04-03-2012 Domestic Credit Lines 315
Slide 37: 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 EEI Conference, Miami: November 2nd-3rd Link Results & Presentations: Credit S