Redeia Corporacion Sa · BME:RED
Redeia Corporacion Sa — Red Eléctrica Corporación — FY2015 Earnings Presentation
25 slides from Redeia Corporacion Sa's earnings presentation, Feb 25, 2016
Slide 1: 2015 Results: Confirmation of 2014-2019 targets
2015 Results Confirmation of 2014-2019 targets 25 February 2016 2015 Annual Results and Confirmation of 2014-2019 Targets 25 February 2016
Slide 2: Contents
Contents Significant progress in Strategic Plan 3 2015 results 4 Regulatory reform finalised 12 Confirmation of 2014-2019 targets 17 2015 Annual Results and Confirmation of 2014-2019 Targets 25 February 2016 2
Slide 3: Significant progress in 2014-2019 Strategic Plan
Significant progress in 2014-2019 Strategic Plan 2014-2015 achievements Targets 2014-2019 Achievements 2014-2015 Solid growth in consolidated activities Investment in transmission grid €3,100 million 903 M€ Investment in dark fibre optic network €475 million 437 M€ Additional growth in new activitie
Slide 4: 2015 results
2015 results 2015 Annual Results and Confirmation of 2014-2019 Targets 25 February 2016
Slide 5: Relevant events in 2015
Relevant events in 2015 Financial results o Net profit came to €606 million, 8.3% higher than recurring profit in 2014 o EBITDA rose to €1,458 million, 5.3% higher than in 2014 o The dividend proposed to the AGM is €3.21 per share, 7% higher than the previous year o Net financial debt stood at €4,90
Slide 6: Relevant events in 2015
Relevant events in 2015 Investments International transmission network o Acquisition of 50% of Transmisora Eléctrica del Norte (TEN) for $218 million Construction and commercial operation of the Mejillones - Cardones transmission line, which will interconnect the electrical subsystems of central and
Slide 7: Relevant events in 2015
Relevant events in 2015 Regulatory reform finalised o New unit values of investment and operation and maintenance of transmission facilities o Ministerial Order IET/2735/2015 of 17 December establishes the temporary extension of the transmission remuneration for 2015 o The new 2016 tariff will have
Slide 8: Relevant events in 2015
Relevant events in 2015 Corporate Governance o The EGM approved the separation of the positions of Chairman of the Board of Directors and Chief Executive Officer of the Company o Board of Directors with majority of independent members: 58%. The Board continues to include the position of Lead Indepen
Slide 9: Highlights
Highlights 2014 €M€ million 2014 2015 2014-15 Proforma 1 Revenue 1,847 1,847 1,939 5.0% EBITDA 1,385 1,385 1,458 5.3% Profit before tax 853 801 829 3.5% Net profit 718 560 606 8.3% Capex 956 2 9562 448 3 1 Excluding impact of TDE agreement and 2014 tax reform 2 Including the acquisition of rights to
Slide 10: Balance sheet
Balance sheet Net financial debt € million 503 5.409 405 4.906(*) 448 24 1.135 197 2014 Operating Cash Changes in Investments Dividends Other 2015 flow working capital (*) Net financial debt came to €5,107 million after paying for 50% of TEN in January 2016. The average remaining term to maturity st
Slide 11: Balance sheet
Balance sheet Solvency ratios € million 2014 2015 EBITDA / Interest 1 8.1x 8.5x FFO / Debt 2 18.7% 23.1% Debt / EBITDA2 3.9x 3.4x 1 EBITDA / net financial expenses excluding capitalisations 2 Include contract of rights to use ADIF’s optic fibre network signed on 20/11/2015 Debt structure by Maturiti
Slide 12: Regulatory reform finalised
Regulatory reform finalised 2015 Annual Results and Confirmation of 2014-2019 Targets 25 February 2016
Slide 13: Closing of the methodology for calculating the transmission activity remuneration
Closing of the methodology for calculating the transmission activity remuneration Regulatory framework • Law 24/2013 of the electricity sector of 26/12/2013 • Royal Decree 1047/2013 of December 27th, methodology to calculate transmission remuneration • Royal Decree 1073/2015 of November 27th, amendi
Slide 14: Closing of the methodology for calculating the transmission activity remuneration
Closing of the methodology for calculating the transmission activity remuneration MO IET/2659: New unit values • Capture by the regulator of a portion of the margins obtained during the last years related to technological progress and reduction of the costs • Increase of remuneration of multi-circui
Slide 15: Closing of the methodology for calculating the transmission activity remuneration
Closing of the methodology for calculating the transmission activity remuneration Royal Decree 1073/2015: Adaptation of the existing regulation • Allows for increase in residual life of installations brought into service prior to 1998 • Excludes international interconnection investments from ratio o
Slide 16: Closing of the methodology for calculating the transmission activity remuneration
Closing of the methodology for calculating the transmission activity remuneration New treatment of renovation and improvement • Recognition of Red Eléctrica's long-standing request to consider renovation and improvement to be a part of its investments • The useful life of assets prior to 1998 may be
Slide 17: Confirmation of 2014-2019 targets
Confirmation of 2014-2019 targets 2015 Annual Results and Confirmation of 2014-2019 Targets 25 February 2016
Slide 18: Main levers to achieve our Strategic Plan goals
Main levers to achieve our Strategic Plan goals ● Progress in investment in consolidated activities ● International investment: Peru and Chile ● Review of maintenance policy ● Additional efforts towards improving efficiency 2015 Annual Results and Confirmation of 2014-2019 Targets 25 February 2016 1
Slide 19: Investments: consolidated and new activities
Investments New activities: €1,000 Consolidated activities: €3,575 million in 2014-2019 million in 2014-2019 ●Efficient TSO management: ●International • Approval of 2015-2020 Infrastructure Plan • Opportunities in stable • €3,100 million in total investment in 2014-2019 markets and adequate • This f
Slide 20: International expansion: Chile and Peru
Investment Expanding the business base ●Chile ●PERU • 50% stake in TEN • Projects in which REE holds a majority stake • 600 km of lines • 942 km of lines in service • Put into operation in Q4 2017 • 240 km in progress • €90 million estimated revenues for 2018 • Put into operation in 2019 • Financing
Slide 21: Review of maintenance policies
Review of maintenance policies Maintenance policy ● Simplification of range and frequency of maintenance activities Opex ● Optimisation of operating policies based on the implementation of technological solutions ● Maintenance of current quality-of-service levels ● Investment in renovation and impro
Slide 22: Additional efforts towards improving efficiency
Additional efforts towards improving efficiency Design of facilities ≥ 200 bp improvement Adaptation to new maintenance in EBITDA margin by standards 2019 Reorganization Adaptation of useful life of facilities to regulatory life Additional Financing increases in EPS Taxes 2015 Annual Results and Con
Slide 23: Confirmation of 2014-2019 targets
Confirmation of 2014-2019 targets 2014 - 2019 targets Investment in consolidated activities 1 3,575 M€ New opportunities for investment 1,000 M€ Improvement in EBITDA margin by 2019 ≥200 bp Average net debt/EBITDA 3.5x ∆ EPS (CAGR 2019/13) 5-6% ∆ 7% dividend per share (CAGR since 2014) 7.0% 1 Invest
Slide 24: relacioninversores@ree.es
relacioninversores@ree.es Presentation available at: www.ree.es Shareholders and investors 2015 Annual Results and Confirmation of 2014-2019 Targets 25 February 2016
Slide 25: Disclaimer
25 This document has been produced by Red Eléctrica Corporación, S.A. for the sole purpose expressed therein. It should not in any event be construed as an offer of sale, exchange or acquisition, or as an invitation to make any kind of offer, in particular for the purchase of securities issued by Re
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