Pge Polska Grupa Energetyczna S.a. · GPW:PGE
Pge Polska Grupa Energetyczna — Q3 2013 Earnings Presentation
38 slides from Pge Polska Grupa Energetyczna's earnings presentation, Nov 13, 2013
Slide 1: Q3 2013 Financial and Operating Results
Q3 2013 Financial and Operating Results November 13, 2013
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by the management of PGE Polska Grupa Energetyczna S.A. (the “Company” or “PGE”) and other entities and is furnished on a confidential basis only for the exclusive use of the intended recipient and only for discussion purposes. This document has been pr
Slide 3: Key achievements and developments
• Key achievements and developments Krzysztof Kilian, President and CEO 2
Slide 4: Financial results among the best utilities in Europe
Our financial results place us among the best utilities in Europe and on the absolute top in Poland EBITDA We achieved the best ever Q3 results PLN mln Recurring1 EBITDA despite the challenging market and unstable regulations 1,879 2,136 2,266 1,721 2,015 1,944 • EBITDA increased by 6% y-o-y reachin
Slide 5: PGE outgrew competitors in generation and retail sales growth
PGE outgrew competitors both in terms of generation and retail sales growth PGE outgrew competitors both in terms of We strengthened our leadership in conventional generation and retail sales growth generation with the largest and most effective base- load generation assets • PGE’s net generation gr
Slide 6: Key projects progressing as planned
We improved capital productivity to maximize returns on our investments Our key projects progressing as planned • Turów 460 MW, Bydgoszcz 240-430 MW CHP and Pomorzany 240 MW CHP – tenders in progress • Gorzów 138MWe/90MWt CHP – contract signed on October 3, 2013 for net PLN 562m; Profitability of th
Slide 7: Progressing towards building Poland's most effective utility
We are progressing towards building Poland’s most effective utility based on the competencies, development and commitment of employees PGE Action Status • New strategy responding to • Strategy prepared and awaiting corporate market challenges approvals • Preparation of a new • Implementation progres
Slide 8: Addressing medium-term market challenges
We understand and effectively address medium-term market challenges Market conditions keep Implications from these We effectively address these pressure on European utilities trends medium-term challenges • New strategies need to be • We engage in difficult • Market structure and adopted dialogue wi
Slide 9: Detailed financial and operating results
Q3 2013 Financial and Operating Results Detailed financial and operating results Przemysław Wasilewski, Head of Investor Relations 8
Slide 10: Power prices reflect supply/demand and commodity trends
Power prices reflect supply/demand situation and trends on commodities markets CO2 allowance (EUA_DEC13) Hard coal EUR/t USD/t1 -41% -17% 90.76 91.29 88.63 87.15 80.76 75.86 • PGE average wholesale price of 8,01 7,59 7,49 electricity amounted to PLN 178 per MWh in Q3 2013 vs. PLN 203 in Q3 4,65 4,76
Slide 11: Key Operating Data (TWh)
Key Operating Data (TWh) Lignite-fired power plants Hard coal-fired power plants Total electricity output amounted to 14.54 TWh in Q3 2013 30.65 30.81 8.84 8.89 – an increase of 6% y-o-y • Lignite generation increased by 7% y-o-y mostly due to better utilization of assets 3.13 • Higher spot prices a
Slide 12: Key Financials
Key Financials Recurring = excluding key one-off items in Q3 2013: • Sales: LTC compensations (PLN 162m) Selected consolidated financial data. IFRS • EBITDA / EBIT: LTC compensations (PLN 162m); LTC adjustment (PLN 104m); Opole II investment project adjustment (PLN 56m) Q3 2012 Q3 2013 Q3’13 9M 2012
Slide 13: Recurring Q3 2013 EBITDA composition and development
Recurring1 Q3 2013 EBITDA – composition and development 603.1 18.0 1 944.1 233.8 1 057.9 78.4 -47.1 Conventional Renewables Wholesale Distribution Retail Other +adj. EBITDA 3Q 2013 1057.9 78.4 233.8 603.1 -47.1 18 1944.1 3Q 2012 1253.4 59 132.2 489.6 38 42.9 2015.2 Change (PLNm) -195.5 19.4 101.5 11
Slide 14: Questions and Answers Session
Questions and Answers Session Q3 2013 Financial and Operating Results November 13, 2013
Slide 15: Q3 2013 Financial Results – Additional information
Q3 2013 Financial Results Additional information 14
Slide 16: Key Operating Data
Key Operating Data Net electricity generation by sources (TWh) Q3 2013 9M 2013 Q3 2012 Q3 2013 vs Q3 9M 2012 9M 2013 vs 9M 2012 2012 Lignite-fired power plants 9.94 10.65 7% 30.65 30.81 1% Hard coal-fired power plants 2.70 3.13 16% 8.84 8.89 1% Coal-fired CHPs 0.21 0.15 -29% 0.94 0.82 -13% Gas-fired
Slide 17: Detailed segmental revenues and costs: Conventional Generation
Detailed segmental revenues and costs Conventional Generation (PLN m) Q3 2013 vs 9M 2013 vs Q3 2012 Q3 2013 9M 2012 9M 2013 Q3 2012 9M 2012 Sales. including 3185.3 3059.6 -4% 10391.5 9341.3 -10% Sale of electricity 2868.9 2645.9 -8% 9071.0 7865.5 -13% LTC compensations 36.3 162.2 347% 143.7 532.4 27
Slide 18: Detailed segmental revenues and costs: Renewables
Detailed segmental revenues and costs Renewables (PLN m) Q3 2013 vs 9M 2013 vs Q3 2012 Q3 2013 9M 2012 9M 2013 Q3 2012 9M 2012 Sales. including 136.0 161.7 19% 423.4 537.6 27% Sale of electricity 44.5 57.7 30% 153.3 188.1 23% Sale of certificates of origin 26.6 39.9 50% 93.8 165.5 76% Cost by kind.
Slide 19: Detailed segmental revenues and costs: Wholesale
Detailed segmental revenues and costs Wholesale (PLN m) Q3 2013 vs 9M 2013 vs Q3 2012 Q3 2013 9M 2012 9M 2013 Q3 2012 9M 2012 Sales. including 2501.0 3097.5 24% 7602.7 9270.4 22% Sale of electricity 2000.1 2503 25% 6149.3 7591.1 23% Sale of certificates of origin 215.5 250.2 16% 893.0 694.1 -22% Cos
Slide 20: Detailed segmental revenues and costs: Distribution
Detailed segmental revenues and costs Distribution (PLN m) Q3 2013 vs 9M 2013 vs Q3 2012 Q3 2013 9M 2012 9M 2013 Q3 2012 9M 2012 Sales. including 1340.6 1367.4 2% 4104.2 4153.6 1% Revenues from distribution 1248.9 1275.7 2% 3832.3 3885.4 1% services Other operating revenues 61.6 65.1 6% 178.2 173.7
Slide 21: Detailed segmental revenues and costs: Retail
Detailed segmental revenues and costs Retail (PLN m) Q3 2013 vs 9M 2013 vs Q3 2012 Q3 2013 9M 2012 9M 2013 Q3 2012 9M 2012 Sales. including 3010.7 3217.7 7% 9409.6 9704.1 3% Sale of electricity 1987.9 2219.3 12% 6210.1 6619.0 7% Revenues from distribution 1006.8 983.2 -2% 3142.5 3037.5 -3% services
Slide 22: Capital expenditures
Capital expenditures CAPEX for Q3 and 9M (PLN m) Q3 2013 9M 2013 Q3 Q3 9M 9M vs vs 2012 2013 2012 2013 Q3 2012 9M 2012 Segment Conventional Generation 995.9 764.5 -23% 2283.2 1872.2 -18% Distribution 319.8 346.2 8% 824.3 813.5 -1% • New clients connection 149.7 149.9 0% 385.6 356.6 -8% • Distributio
Slide 23: Conventional Generation – EBIT Q3 2013
Conventional Generation – EBIT Q3 2013 Key Changes in EBIT (PLN m) 1 200 1 000 800 600 400 200 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Sale of Sale of Revenues Cost of Revenues Result on Result electricity – electricity – from regul. Other Electricity Cost Cost merchandise Other Result from cert. other oper
Slide 24: Conventional Generation – EBIT 9M 2013
Conventional Generation – EBIT 9M 2013 Key Changes in EBIT (PLN m) 3 500 3 000 2 500 2 000 1 500 1 000 500 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Sale of Sale of Revenues Cost of Revenues Result on Result electricity – electricity – from regul. Other Electricity Cost Cost merchandise Other Result from cert
Slide 25: Renewable Generation – EBIT Q3 2013
Renewable Generation – EBIT Q3 2013 Key Changes in EBIT (PLN m) 60 50 40 30 20 10 0 1 2 3 4 5 6 7 8 9 10 Sale Sale Revenues Revenues Result Result of electricity – of electricity – from regul. Other Energy Operating Result from cert. of on other oper. 2012 difference in difference in serv. revenues
Slide 26: Renewable Generation – EBIT 9M 2013
Renewable Generation – EBIT 9M 2013 Key Changes in EBIT (PLN m) 250 200 150 100 50 0 1 2 3 4 5 6 7 8 9 10 Sale Sale Revenues Revenues Result Result of electricity – of electricity – from regul. Other Energy Operating Result from cert. of on other oper. 2012 difference in difference in serv. revenues
Slide 27: Wholesale – EBIT Q3 2013
Wholesale – EBIT Q3 2013 Key Changes in EBIT (PLN m) 450 400 350 300 250 200 150 100 50 0 Revenues Revenues General and Result on Result Sale Management Other Cost of products Selling Result from cert. of from CO2 administrative other oper. 2012 of electricity service revenues and services expenses
Slide 28: Wholesale – EBIT 9M 2013
Wholesale – EBIT 9M 2013 Key Changes in EBIT (PLN m) 1 000 900 800 700 600 500 400 300 200 100 0 Revenues Revenues General and Result on Result Sale Management Other Cost of products Selling Result from cert. of from CO2 administrative other oper. 2012 of electricity service revenues and services ex
Slide 29: Distribution – EBIT Q3 2013
Distribution – EBIT Q3 2013 Key Changes in EBIT (PLN m) 400 350 300 250 200 150 100 50 0 Wykonanie 2012 Przychody z tyt. usługi dystrybucyjnej - odchylenie z tytułu ilości Przychody z usł. dyst. - odchylenie z tytułu ceny Pozostałe przychody z usługi dystrybucyjnej Pozostałe przychody Zużycie energi
Slide 30: Distribution – EBIT 9M 2013
Distribution – EBIT 9M 2013 Key Changes in EBIT (PLN m) 1 200 1 000 800 600 400 200 0 Wykonanie 2012 Przychody z tyt. usługi dystrybucyjnej - odchylenie z tytułu ilości Przychody z usł. dyst. - odchylenie z tytułu ceny Pozostałe przychody z usługi dystrybucyjnej Pozostałe przychody Zużycie energii U
Slide 31: Retail – EBIT Q3 2013
Retail – EBIT Q3 2013 Key Changes in EBIT (PLN m) 60 40 20 0 1 2 3 4 5 6 7 8 -20 -40 -60 -80 Costs of Cost of Result Result Change in result on Other Operating Result certificates of merchandise and on other 2012 electricity sales revenues expenses 2013 origin materials sold oper. activities Change
Slide 32: Retail – EBIT 9M 2013
Retail – EBIT 9M 2013 Key Changes in EBIT (PLN m) 400 350 300 250 200 150 100 50 0 1 2 3 4 5 6 7 8 Costs of Cost of Result Result Change in result on Other Operating Result certificates of merchandise and on other 2012 electricity sales revenues expenses 2013 origin materials sold oper. activities C
Slide 33: PGE cash position provides plenty of headroom
PGE cash position provides… Q3 2013 FY 2012 …plenty Gross Debt (PLNm) 2404.9 1896.7 of headroom Net Cash (PLNm) 2313.1 2512.4 in the balance Net Debt/LTM EBITDA -0.32x -0.37x sheet Net Debt/Equity -0.05x -0.06x Moody’s Fitch Long-term company rating (IDR) A3 BBB+ Rating outlook Stable Stable Date of
Slide 34: CO2 allowances in PGE books
CO2 allowances in PGE books Free EUA recognized at a fair value (exchange spot price from day of recognition) – Gross impact of PLN (526m) recognized note 15 of the 9M 2013 consolidated FS in conventional generation segment in Free EUA are recognized in deferred income and are settled pro rata costs
Slide 35: LTC compensations – current status
LTC compensations – current status Generators from the PGE Capital Group are in disputes with the ERO President regarding stranded cost compensations in years 2008-2012. Status of court cases: Lublin-Wrotków Year Opole PP Turów PP Gorzów CHP Rzeszów CHP ZEDO PP CHP 2008 Case closed Case closed Case
Slide 36: Q3 2013 Key business flows
Q3 2013 Key business flows Key business flows (illustrative only) Generation Wholesale Households 14.54 TWh 17.99TWh Regulated market 13.68 TWh (Q3 2012) 14.66 TWh (Q3 2012) 2.19 TWh Electricity from power 2.18 TWh (Q3 2012) plants (under „exchange Power exchange Retail 23% obligation”) Electricity
Slide 37: Sell-side analysts covering PGE
Sell-side analysts covering PGE Domestic analysts Foreign analysts Institution Analyst Institution Analyst • BRE Bank • Kamil Kliszcz • Erste Group • Petr Bartek • BZ WBK • Paweł Puchalski • Goldman Sachs • Fred Barasi • Citigroup • Piotr Dzięciołowski • HSBC • Dmytro Konovalov • Deutsche Bank • Tom
Slide 38: Investor relations contacts
Investor relations contacts Head of IR IR Officers Przemysław Wasilewski Krzysztof Dragan Tel: (+48) 22 340 19 46 Tel: (+48) 22 340 15 13 Mob: +48 723 189 235 Mob: +48 601 334 290 Karolina Drach - Kowalczyk Tel: (+48) 22 340 16 90 Mob: +48 786 036 365 Jakub Frejlich Tel: (+48) 22 340 10 32 Mob: +48
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