El5-ener · RUS:ELFV
El5-ener — Enel Russia — Investor Presentation (October 2014)
27 slides from El5-ener's investor presentation, October 2014
Slide 1: Enel Russia Investor Presentation
Enel Russia Investor Presentation Moscow, October 2014
Slide 2: Agenda
Enel Russia Investor Presentation Agenda • Company and Enel Group overview Enel’s overview: Group evolution Enel Russia in brief Enel Russia - assets overview • Focus on recent achievements Company evolution as part of Enel Group Managing business in a challenging environment • Business Pl
Slide 3: Company and Enel Group overview
Enel Russia Investor Presentation Company and Enel Group overview 3
Slide 4: Enel's overview: Group evolution
Company and Enel Group overview Enel’s overview: Group evolution 2005 2013 Presence Presence 11 countries 40 countries Net installed capacity Net installed capacity 46 GW 99 GW Customers Customers ~34 million ~61 million Employees Employees 51,778 71,394 EBITDA EBITDA ~8 €bn2 ~16 €bn2 Capex Plan 200
Slide 5: Enel Russia in brief
Company and Enel Group overview Enel Russia in brief Key facts Ownership structure Enel Russia is a wholesale generating company spun off from RAO UES as part of the Russian power sector reform Majority stake owned by Enel S.p.A., a global utility Enel Russia owns four thermal power plants in Eur
Slide 6: Enel Russia - assets overview
Company and Enel Group overview Enel Russia - assets overview Asset location and description Fuel mix Moscow Advantages All plants in 1st price zone Favourable fuel mix Price zone I (1,110 RUR/MWh)2 Two highly efficient CCGTs commissioned under capacity contracts Price zone II (DPM) with guara
Slide 7: Focus on recent achievements
Enel Russia Investor Presentation Focus on recent achievements 7
Slide 8: Company evolution as part of Enel Group
Focus on recent achievements Company evolution as part of Enel Group 2008 2013 Installed Capacity Installed Capacity ~8.7 GW 9.7 GW Energy margin1 Energy margin1 ~12.8 BRUR ~26.7 BRUR O&M costs2 O&M costs2 ~510 ThRUR/MW ~360 ThRUR/MW3 EBITDA EBITDA ~5.0 BRUR ~16.8 BRUR Employees4 Employees4 4,270 2,
Slide 9: Managing business in a challenging environment
Focus on recent achievements Managing business in a challenging environment Challenges Response M A • Slowdown of economic growth • Diversification of fuel suppliers portfolio, new long- C term contracts R • Weakening of local currency O • Continuous focus on cost excellence • Revision of CAPEX and
Slide 10: Business Plan 2014 - 2018
Enel Russia Investor Presentation Business Plan 2014 - 2018 1 All numbers presented in this chapter are under Enel IFRS IAS unless otherwise indicated 10
Slide 11: Macro and market trends
Business Plan 2014-18 Macro and market trends Macro and market trends Implications for industry Economy Risk of earnings decrease stemming from: Governmental focus on: Further marginalization of conventional gas-fired containment of inflation and softening of tariff capacity burden for industry
Slide 12: Strategic guidelines
Business Plan 2014-18 Strategic guidelines Variable Taking advantage of newly signed long-term fuel supply contracts and costs further diversification of supplies Fixed costs New wave of initiatives in OPEX management Strictly necessary CAPEX mainly focused on Reftinskaya to ensure positive Cash flo
Slide 13: Macro assumptions
Business Plan 2014-18 Macro assumptions CPI, % Power demand, TWh1 Installed capacity, GW1 CAGR 13-18: CAGR 13-18: 1.3% 2.7% Russian economy has space for growth notwithstanding recent slowdown 1 In Europe+Urals price zone of Russia 13
Slide 14: Market assumptions
Business Plan 2014-18 Market assumptions • 2014-16: in line with governmental forecast: freeze for 2014, 4,8% p.a. in 2015 -2016. Gas tariff • 2017-18: 4-5% above CPI based on an ‘easing cycle’ assumption • Mostly linked to inflation Coal price • Transportation component flat for 2014 and increase b
Slide 15: Technical KPIs
Business Plan 2014-18 Technical KPIs • Coal and CCGT: unchanged Installed capacity • Conventional gas: -250MW caused by (GW) decommissioning of outdated and inefficient facilities at Sredneuralskaya and Nevinnomysskaya plants • Coal: 20.5 TWh in 2014 due to high amount of planned maintenance, 22-23
Slide 16: Focus on day-ahead market operations
Business Plan 2014-18 Focus on day-ahead market operations DAM price and fuel costs (RUR/MWh) DAM margin1 (BRUR) • Coal: impacted by gas price scenario, 2016 increase supported by higher net output • DAM price: lagging behind gas tariff • Conventional gas: gas price benefits offset by lower • Conven
Slide 17: Energy margin
Business Plan 2014-18 Energy margin1 Energy margin by market segment Energy margin by technology (BRUR) (BRUR) • Power: positive DAM sales dynamics enhanced by higher margin • Coal: largely in line with DAM margin from regulated sales due to gas price benefits • Conventional gas: despite neutral DAM
Slide 18: Fixed costs
Business Plan 2014-18 Fixed costs O&M costs Personnel costs (Th RUR/MW installed, CPI adjusted) (BRUR, CPI adjusted) • 0.7% real term CAGR over 2013-2018 • -2.4% real term CAGR over 2013-2018 • Year-to-year fluctuations attributable to CCGT • Real term costs decline attributable to optimization of s
Slide 19: EBITDA
Business Plan 2014-18 EBITDA (BRUR) ~18.5 16.8 ~15.5 • 2014 EBITDA decrease vs. 2013 mainly attributable to one-off items in 2013, in particular property tax • Solid EBITDA increase in 2016 mainly thanks to energy margin growth and OPEX reduction programme Conservative EBITDA targets stemming from n
Slide 20: Net ordinary income
Business Plan 2014-18 Net ordinary income1 ~8 • Flat net income dynamics for 2014 despite ~5 EBITDA reduction attributable to one-off costs 4.9 in 2013, mainly bad debt provision booked last year • Strong growth in 2016 net income to be achieved thanks to EBITDA increase Commitment to deliver stable
Slide 21: CAPEX
Business Plan 2014-18 CAPEX CAPEX 2014-18 Key features Total CAPEX: ~38 BRUR • CAPEX for 2014-18 reduced by 10% versus old business plan ~42.5 BRUR CAPEX for • Reduction most evident in 2015-18, as large 2013-17 part of CAPEX for 2014 has been already contracted • Environmental investments in priori
Slide 22: Cash flows and dividends
Business Plan 2014-18 Cash flows and dividends Cash flow (BRUR) ~15 Dividends ~11 ~6 • Dividend policy: 40% of IFRS ordinary net income for the Inflow previous year ~1 • 13.5b RR cumulated dividends over 2014-18 ~-2 ~-2 Outflow ~-7 ~-8 Operating CF + WC + debt servicing CAPEX Dividends based on prev
Slide 23: Financials summary
Business Plan 2014-18 Financials summary (B RUR) 2014 2016 • EBITDA • ~ 15.5 • ~ 18.5 • Ordinary net income • ~5 • ~8 • Free cash flow1 • ~1 • ~6 • Net debt/EBITDA2 • ~ 1.2x • ~ 0.5x Preserving business solidity 1 After dividends 2 At year end 23
Slide 24: Annex 1: 2013 IFRS highlights
Enel Russia Investor Presentation Annex 1: 2013 IFRS highlights(1) 2012(2) 2013 % Revenues 66,546 69,723 +5 EBITDA 14,820 16,848 +14 - EBITDA margin (%) 22 24 - Net income 5,403 4,939 -9 Net debt 24,968 19,322 -23 EBITDA/Net financial expenses (3) 6.5 7.3 Net debt/EBITDA 1.7 1.1 Net debt/Equity 0.34
Slide 25: Annex 2: 1H 2014 IFRS highlights
Enel Russia Investor Presentation Annex 2: 1H 2014 IFRS highlights 1H13 1H14 % Revenues 32,656 36,046 +10.4 EBITDA 8,311 9,002 +8.3 - EBITDA margin (%) 25 25 - Net income 2,005 3,430 +71.0 (2) Net debt 19,322 19,617 +1.5 EBITDA/Net financial expenses (3) 6.8 9.0 +2.2 (4) Net debt/EBITDA 1.6 1.1 -0.5
Slide 26: Disclaimer
Enel Russia Investor Presentation Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information (“forward-looking statements”). These forward-looking statements are based on Enel Russia’s current expectations and projections abo
Slide 27: Contacts
Enel Russia Investor Presentation Contacts • Alexey Leonov (Head of IR) +7 495 539 31 31 ext. 7631 alexey.leonov@enel.com Visit our website at: www.enel.ru (Investor Relations) 27