Edp S.a. · EURONEXT:EDP

Edp — Energias de Portugal — H1 2016 Earnings Presentation

26 slides from Edp's earnings presentation, Jul 29, 2016

  1. Slide 1: Results Presentation 1H16

    <5 Results Presentation 1H16 Lisbon, July 29th, 2016

  2. Slide 2: Disclaimer

    This document has been prepared by EDP - Energias de Portugal, S.A. (the "Company") solely for use at the presentation to be made on the 29th of July, 2016 and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where this presentati

  3. Slide 3: 1H16 highlights: recurring EBITDA +15% to €2,006m

    Recurring EBITDA +15% to €2,006m including 4% negative impact from ForEx Recurring net profit +20% to €517m Net profit -20% to €472m (non recurring gain on Pecém in 1H15) €1.2bn Tariff Deficit Sales in 1H16 Regulatory receivables down 34% in 1H16 to €1.6bn Operating costs flat YoY, despite 8% avg. c

  4. Slide 4: Strong improvement on recurring EBITDA in all major business areas

    Weight on Recurring Recurring EBITDA EBITDA YoY change  Favourable hydro conditions in 1H16 vs. 1H15 and successful energy management strategy 31% Generation +28%  Focus on retail/SMEs customers: +300k (+5%) electricity & gas contracts in 1H16 & Supply  Generation portfolio: commissioning of new

  5. Slide 5: Opex IV efficiency programme fully on track

    Weight on Opex Business area Indicator YoY Change Main drivers  1H16 inflation: Portugal +0.6%; Spain: -0.6% 58% Iberia Total Opex: -2%  Savings on external supplies (O&M, IT back-office)  Natural headcount reduction (-1% YoY)  Total Opex: +9% (no forex impact) 25% EDPR Core Opex/MW: -4%  Avg.

  6. Slide 6: Asset and liability management

    Asset Management Liability Management  Tariff deficit sales:  Avg. cost of debt repayments in 1H16: 5.4% EDP level  €1.2bn in 1H16  Avg. cost of debt issues in 1H16: 2.4%  €0.8bn in Jul-16  EDP 5Y Bond Yield (Jul-16): ~0.7%  New investments focused in US wind PPAs  Disposals to minorities (a

  7. Slide 7: Strategic priorities and 1H16 KPIs

    1  Recurrent EBITDA growth YoY +15% Focused Growth  Installed capacity growth YoY (wind & hydro) +5% 2 Continue Financial  Net debt change vs. Dec-15 -5% Deleveraging  Adjusted Net Debt/EBITDA 3.8x 3  Weight of wind & hydro in electricity production 75% Keep Low Risk Profile  % EBITDA Regulate

  8. Slide 8: Updated 2016 guidance

    Previous guidance New Guidance Main drivers Better performance Generation & Supply Iberia EBITDA >€3.6bn ~€3.75bn Forex: stronger BRL vs. EUR 2016 Operating costs Net Profit EBITDA ~€900m ~€950m 2016 Financial results: lower interest costs but negative one-offs EDP Brasil capital increase Net Debt ~

  9. Slide 9: Results Analysis

    rede Results Analysis

  10. Slide 10: Installed capacity +5% YoY; electricity production +19%

    Installed Capacity Production Breakdown (GW) (TWh) +5% +19% 24.5 37.8 23.3 1% 2% Other(1) 1% 13% 31.6 14% -7% 21% Coal 15% Other(1) 3% -17% 16% 3% CCGT Coal 30% CCGT 3% 35% Wind 35% +14% 38% +23% Hydro & Wind: Hydro & Wind: Wind 34% 75% of production 71% of capacity Hydro 33% 33% 40% +4% Hydro 30% +

  11. Slide 11: YoY comparison significantly impacted by 1H15 gains

    EBITDA EBIT (€ million) (€ million) Pecém: €295m Gas Murcia: €89m -3% Pantanal: -8% 2,131 2,067 €61m 61 1,438 Adjustments 384 1,327 Adjustments 384 61 2,006 Recurring 1,747 +15% 1,266 Recurring 1,054 +20% 1H15 1H16 1H15 1H16 YoY Comparison significantly impacted by 1H15 gains 10

  12. Slide 12: Electricity demand and supply in the Iberian market

    Electricity Demand and Supply in Iberian Market (1) (TWh) Flat YoY  Electricity demand flat in Spain and -0.3% in 148 148 CCGT 12 -13% 11 Portugal: penalized by weather and slowdown of 15 economic activity Coal 28 -48% 34  Hydro production: +58%, hydro coefficient in Spain Hydro 22 +58% 1.50 in 1H

  13. Slide 13: EBITDA Generation & Supply Iberia

    EBITDA Generation & Supply Iberia (€ million) EBITDA Generation & Supply Iberia: +€137m YoY  Hydro production: +117% YoY on higher weight of hydro +27% in generation mix from 35% to 64% (hydro coefficient in 641 Portugal 1.68 in 1H16 vs. 0.75 in 1H15) 505  Avg. sourcing cost -36% YoY: avg. generat

  14. Slide 14: EBITDA regulated networks Iberia

    EBITDA - Regulated networks Adjusted EBITDA(1) - Regulated networks (€ million) (€ million) Gas Iberia Electricity Spain Electricity Portugal Gas Iberia Electricity Spain Electricity Portugal -13% 569 +3% 496 -48% 480 496 -5% +29% +29% +1% +1% 1H15 1H16 1H15 1H16  Electricity Portugal: RoRAB at 6.4

  15. Slide 15: EDPR capacity, production and EBITDA

    EDPR Installed Capacity EDPR Wind Power Production EDPR EBITDA (GW) (TWh) (€ million) Europe and Brazil North America +18% +13% 23% 648 9.4 13.3 8.3 548 10.8 55% +24% 49% 24% 58% 52% +19% 56% 49% 48% +8% 45% 51% +21% 51% 11% 42% 44% 1H15 1H16 1H15 1H16 1H15 1H16  North America: capacity +8%; higher

  16. Slide 16: EDP Brasil EBITDA

    EDP Brasil EBITDA EDP Brasil Recurring(1) EBITDA (BRL million) (BRL million) Capital Gains Recurring Distribution Hydro Generation & Other Pecém -23% +29% 1.657 995 1.273 772 885 278 361 77 282 +34% 378 +29% 995 772 413 -38% 257 1H15 1H16 1H15 1H16  Capital Gains: R$885m from Pecém badwill in 1H15;

  17. Slide 17: Portugal electricity system regulatory receivables

    Portugal: Electricity System Regulatory Receivables (€bn) 5.3 5.3 5.2 5.3 +0.0 -0.1 +0.1 Other 3.0 3.2 3.0 3.7 EDP 2.3 2.1 2.2 1.6 Dec-14 1H15 Jun-15 2H15 Dec-15 1H16 Jun-16 2016E ERSE 1H16 Demand(1) (YoY Chg.) +2.1% 0.0% -0.4% Demand (YoY; %) +1.8%(2) -0.4% 1.13 Pool Price Wind Factor (1.0=avg.) 1.

  18. Slide 18: Net regulatory receivables: EDP balance sheet

    Net Regulatory Receivables: EDP Balance Sheet (€ million) -€851m 2.504 2.477 1.626 Portugal (1) 2.315 2.236 1.618 Spain Brazil 2 70 187 170 71 -64 Dec-14 Dec-15 Jun-16  Portugal: -€618m YTD; +€597m from chg. in system debt attributable to EDP and -€1,215m from tariff deficit sales  Brazil: -€235m

  19. Slide 19: Net investments

    Net Investments (1) (€ million) Net 544 -21 Investments 646 -8% 541 Expansion 237 267 Maintenance -339 Sale of minority stakes Sale of minority stakes in -829 Asset Rotation in wind farms in US wind and solar capacity in US (Axium) and Europe (EFG Hermes) 1H15 1H16 Expansion Investments: wind (PPAs/

  20. Slide 20: Change in net debt: Jun-16 vs Dec-15

    Change in Net Debt: Jun-16 vs. Dec-15 (€ billion) -€0.9bn 17.4 -0.5 -0.9 +0.7 16.5 -0.1 Regulatory 2.5 +0.1 -0.2 1.6 Receivables 14.9 14.9 Net Debt Free Cash Reg. Adj. Net Dividends ForEx EDP Brasil Net Debt Dec-15 Flow (1) Receivables Expansion paid to EDP Capital Jun-16 & Securitiz. Investments Sh

  21. Slide 21: Debt by currency and maturity profile

    EDP consolidated debt by currency: Jun-16 EDP consolidated debt maturity profile as of Jun-16 (%) (€ billion) Commercial Paper Hybrid Bond Other Subsidiaries EDP SA & EDP Finance BV Avg. Debt Maturity(1): PLN 4.8 years USD 2% 4.0 21% 3.5 3.0 2.5 BRL 8% 2.0 69% 1.5 EUR 1.0 0.5 0.0 2016 2017 2018 2019

  22. Slide 22: Financial liquidity and refinancing needs

    Financial liquidity (Jun-16) Refinancing needs 2H16/2017/2018  Cash & Equivalents: €1.5bn  2H16: €1.6bn Bonds maturing in Sep-16 €1.0bn  Available Credit Lines: Other maturing in 2016 €0.6bn Revolving Credit Facilities €3.8bn Other Credit Lines €0.3bn  2017: €1.3bn Total €4.1bn  2018: €1.5bn TO

  23. Slide 23: Financial results and associated companies

    Financial Results & Associated Companies: 1H16 vs. 1H15 (€m)  Net interest costs: lower avg. net debt -€25m and decline of avg. cost of debt (4.5% in 1H16 vs. 4.7% in 1H15) (412) (388) 56 (20) 19  ForEx: Negative due to EUR/USD in 1H15 (31) (48)  Capital gains and impairments in 1H16: BCP impairm

  24. Slide 24: Adjusted net profit

    Adjusted Net Profit (€ million) Adjustments Recurrent -20% 587 472  Acquisition of remaining 50% 156 stake in Pecém: +132m€  Sale of Gas Murcia: +€85m  Extraordinary energy tax: -€61m +20% 517 431  Sale of Pantanal mini-hydro: +€24m  Sale of Tejo Energia: +€11m  BCP Impairment: -€21m -45  Ext

  25. Slide 25: Income statement from EBITDA to net profit

    (€ million) 1H15 1H16 ∆% ∆ Abs. EBITDA 2,131 2,067 -3% -64  Increase of installed capacity: EDPR, Pecém, hydro Net Depreciations and Portugal 692 739 +7% +47 Provisions EBIT 1,438 1,327 -8% -111  BCP impairment, EDPR’s costs with debt pre-payment and lower gains with tariff deficit sales Financial

  26. Slide 26: IR Contacts and Next Events

    IR Contacts Miguel Viana, Head of IR Sónia Pimpão João Machado Maria João Matias Sérgio Tavares Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Visit EDP Website Next Events Site: www.edp.pt July 28th: Release of 1H16 Results Link Results & Presentations: Sept 6th: Reverse Roadshow in Madrid (C

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