Iren S.p.a. · MIL:IRE
Iren — FY2016 Earnings Presentation
25 slides from Iren's earnings presentation, Mar 16, 2017
Slide 1: 2016 – FY Results
16th March 2017 2016 – FY Results
Slide 2: Group's achievements: consolidation and synergies
2016 FY Results exceeding BP@2021 objectives, thanks to the Group’s achievements… Strengthening the role of IREN as leading consolidator in its reference areas thanks to the acquisition of several entities of which: Integrally consolidated - TRM (WTE in Turin) = +40m€ (EBITDA) - ATENA (Multiutility
Slide 3: Supportive energy scenario positively affecting organic growth
…and supportive energy scenario positively affecting organic growth. 70 Million of organic growth deriving from an effective and active management of the opportunities offered by the scenario. - Improved spark-spread compared to 2015 thanks to a sharper decrease in gas price over the decrease in ele
Slide 4: FY 2016: Positive results exceeding expectations
FY 2016: Positive results exceeding expectations. Income statement Ebitda Bridge 15 814 m€ FY '15 FY '16 Δ Δ% 31 53 678 70 (14) (19) Revenues 3,094 3,283 189 6.1% Ebitda 678 814 136 20.1% Ebit 347 427 80 23.1% EBITDA Scenario Synergies Consolid. Wacc Time lag One-off EBITDA FY '15 and reduction 2015
Slide 5: Generation and DH – Higher volumes supported by improved scenario
GENERATION AND DH – Higher volumes supported by improved scenario. m€ FY '15 FY '16 Δ Δ% Active exploitation of the positive scenario drove the excellent 2016 performance, in spite of lower hydroelectric volumes. Revenues 813 908 95 12% Generation sector’s significant growth stemmed mainly from
Slide 6: Market – Active exploitation of the scenario
MARKET – Active exploitation of the scenario. m€ FY '15 FY '16 Δ Δ% Supportive price trend and hedging opportunities Revenues 2,377 2,187 -190 -8% Active client management and client-base growth: +42% electricity volumes sold to end Clients. Ebitda 87 134 47 55% 1.6m Clients (+93k additional
Slide 7: Networks – Synergies offsetting WACC reduction
NETWORKS – Synergies offsetting wacc reduction. m€ FY '15 FY '16 Δ Δ% • Energy networks: the positive impact of the time-lag Revenues 859 854 -5 -1% mechanism on the electricity network (+15m€) and the achievement of significant synergies more than offset the Ebitda 304 319 15 5% reduction in Wacc a
Slide 8: Waste – Performance driven by consolidation and internal growth
WASTE – Performance driven by consolidation and internal growth. m€ FY '15 FY '16 Δ Δ% Consolidaton: approximately 40m€ of additional margin Revenues 463 502 39 8% coming from TRM. The contribution of the recently acquired R.E.I. landfill will start from 2Q 2017. Ebitda 65 119 54 83% Internal Gr
Slide 9: From EBITDA to Net Profit
From EBITDA to Net Profit. FY '15 FY '16 Δ Δ% EBITDA 677.8 814.2 136.4 20.1% • Higher D&A linked mainly to TRM consolidation. D&A -267.6 -304.4 • Higher provisions related to a number of extraordinary items for approx. 20m€ Provisions -63.3 -82.9 (BDP stable). • Higher Financial charges for loans du
Slide 10: Cash-flow and NFP Bridge
Cash-flow and NFP Bridge. -147m€ 435 2,457 2,169 87 2,022 275 (185) (34) 17 (16) (291) NFP 31 .12 .15 Net Profit D&A, NWC Capex Dis posals Div idends FV Ordinary ∆ Cons. NFP provisions Variation and paid Deriva tive s NFP 31 .12 .16 Perimeter 31.12.201 6 and other dividends received Net of the eff
Slide 11: Interest rate and debt structure
Interest rate and debt structure. Gross debt interest rate 89% of gross debt at fixed interest rate. Average long-term debt duration of about 5.1 years. Cost of debt in line with 2015 (3.4%) in spite of the TRM negative impact (+0.2%). Debt structure IREN’s debt is formed of: 46% bonds 3
Slide 12: Actual progress vs. business plan targets
Actual progress vs. business plan targets. Scenario Consolidation EBITDA FY ‘15 Organic Growth Synergies EBITDA FY ‘21 ‘15-’21 and one-offs already done EBITDA bridge 678 (50) 105 100 70 ~900 15 ~900 70 814 75 ‘16-’21 EBITDA (75) bridge EBITDA FY '16 Scenario Organic Growth Synergies Consolidation E
Slide 13: Closing remarks. DPS proposed: 0.0625 €/sh.
Closing remarks. The excellent operating performances (EBITDA +20.1%; NP + 47.2%) and the effectiveness in debt reduction have led to the earlier than expected achievement of a NFP/EBITDA ratio of 3.0x, allowing for a higher dividend per share distribution for the second consecutive year. NFP and NF
Slide 14: Annexes
Annexes Pag. 14
Slide 15: EBITDA progress by SBU
EBITDA progress by SBU. • Scenario assumptions confirmed: GENERATION AND DH - PUN@2019 51.8€/Mwh; PUN@2021 54.7€/Mwh - SS@2019 4.5€/Mwh; SS@2021 4.8€/Mwh GCs destined to expire 239 234 200 199 40 • Significant investments in DH expansion which will exceed 95mcm of heated volumes. m€ • EBITDA substan
Slide 16: EBITDA progress by SBU
EBITDA progress by SBU. NETWORKS 362 Time-lag el. ntwks • Significant RAB increase through organic and external 301 304 319 growth (gas tenders in Parma and Vercelli). 15 • Important synergies stemming from the setting up and full operation of IRETI. m€ FY '14 FY '15 FY '16 FY '21E • 2017-2021 Capex
Slide 17: IREN at a glance (2016)
IREN at a glance (2016). ~1.6M in the energy sector >7 million Customers: ~2.7M served inhabitants in the water service ~2.1M served inhabitants in the waste sector Inhabitants in IREN’s reference areas ~1.0M served inhabitants in district heating >3.5 services provided per clients REGULATED ACTIVIT
Slide 18: 2015 Ranking (energy market)
2015 Ranking (energy market). DH: heat produced (GWht) 2,800 2.000 500 0 IREN A2A HERA ACEA Electricity: volumes sold (TWh) Electricity distribution: # PODs 52 1.620 1.130 690 12 10 9 260 A2A IREN ACEA HERA ACEA A2A IREN HERA Gas: volumes sold (mcm) Gas distributon: market share (%) 3,600 3,400 9.0%
Slide 19: 2015 Ranking (water and waste cycle)
2015 Ranking (water and waste cycle). Waste: treated (000 ton) 6,200 2.600 1.800 800 HERA A2A IREN ACEA Water: volumes distributed (mcm) 527 300 162 63 ACEA HERA IREN A2A *Source: Companies financial statements. Pag. 19
Slide 20: Shareholding structure and corporate governance
Shareholding structure and corporate governance. The majority of IREN’s Shareholders are public entities: Shareholding structure (on total share capital)(1) >50% FSU (50% Turin Municipality and 50% Genoa Municipality) ~33%, Emilia Municipalities (Reggio Emilia, Parma, Public Shareholders Piacenza an
Slide 21: Preferred shares
Preferred shares. • IREN’s share capital included 94.500.000 non-listed preferred shares without voting rights, owned by Finanziaria Città di Torino (100% owned by Turin Municipality). • In November 2015 Finanziaria Città di Torino launched an exchangeable bond on 80,498,014 IREN’s preferred stocks
Slide 22: Regulated business – Defined WACC values
Regulated business – Defined wacc values. Gas distrib. Electricity distrib. Water service Regulatory period 6 years (2014 – 2019) 8 years (2016 – 2023) 4 years (2016 – 2019) WACC methodology update 6 years (2016 – 2021) 6 years (2016 – 2021) WACC update every three years (2019) every three years (20
Slide 23: Market Scenario
Market Scenario. FY '15 FY '16 Δ% Gas Demand (bcm) 67 70 5% TTF €/000 scm 210 148 -30% PSV €/000 scm 255 167 -35% Energy Demand (Twh) 315 310 -2% PUN (€/Mwh) 52.3 42.7 -18% CO2 €/Ton 7.7 5.4 -30% Green Cert. Hydro (€/Mwh) 100.1 100.1 = Pag. 23
Slide 24: Balance Sheet
Balance Sheet. FY '16 FY '15 Net fixed assets 5,220 4,648 Net Working Capital 171 154 Funds -562 -526 Other assets and liabilities -84 -46 Net invested capital 4,745 4,231 Group Sharholders' equity 2,288 2,062 Net Financial Position 2,457 2,169 Total Funds 4,745 4,231 Pag. 24
Slide 25: DISCLAIMER
DISCLAIMER The Manager in charge of drawing up the corporate accounting documents and the Chief Financial Officer of IREN S.p.A., Mr. Massimo Levrino, hereby declares, pursuant to paragraph 2 of article 154 bis of the Consolidated Finance Act (Legislative Decree No 58/1998), that the accounting info