Slide 1: EDP 1Q10 Results Presentation
EDP 1Q10 Results Presentation May 7th, 2010
Slide 2: 1Q10: Highlights of the period
1Q10: Highlights of the period EBITDA: €940m, +11% YoY Better than expected performance of liberalized activities in Iberia Sales to clients: +111% YoY; Portfolio optimization: own production replaced by pool purchases Brazil: 17% of EDP’s EBITDA in 1Q10 (+23% in local currency , +48% YoY in € terms
Slide 3: 1Q10: Highlights of the period
1Q10: Highlights of the period Net Profit: €309m, +17% YoY Without any material non-recurrent items Net interest costs down 36% YoY Average cost of debt fell from 4.7% in 1Q09 (and 4.0% in 2009) to 3.5% in 1Q10 Increase of Cash and liquidity facilities available (€5.1bn by Mar-10 vs. €4.6bn by Dec-0
Slide 4: 1Q10 Financial Headlines
1Q10 Financial Headlines (€ million) 1Q09 1Q10 % Chg. EBITDA 849 940 +11% Net Profit 265 309 +17% Capex 840 573 -32% Net Debt (€bn) 14.0* 14.6 +4% Net Debt / EBITDA (x) ** 4.2x* 3.9x - Adjusted Net Debt (1) / EBITDA (x) 3.9x* 3.7x - Net profit : +17% YoY Profitable growth maintaining a low risk prof
Slide 5: 1Q10 Operating Headlines
1Q10 Operating Headlines Installed Capacity: 1Q10 vs. 1Q09 1Q10 Generation Breakdown by Technology (GW) (%) CCGT Wind Hydro Other (1) Other (1) CCGT +11% 20.7 14% 12% 18.7 24% 26% 22% 33% 37% 60% 52% wind & hydro 27% 24% 75% Hydro & Wind 13% 16% 1Q09 1Q10 Installed capacity up 11% YoY; Wind & Hydro
Slide 6: 1Q10 EBITDA Breakdown
1Q10 EBITDA Breakdown >80% of 1Q10 EBITDA came from regulated and long-term contracted activities +11% % Chg. YoY €849m €940m Liberalized 19% 17% Activities Iberia Brazil 13% 17% Wind Power 18% 19% Regulated 83% 25% 25% Networks Iberia LT Contracted 25% 22% Generation Iberia 1Q09 1Q10 EBITDA growth
Slide 7: EDP Consolidated operating costs: Positive results from ongoing efficiency program
EDP Consolidated operating costs: Positive results from ongoing corporate- corporate-wide efficiency program OPEX/Gross Profit: 1Q10 vs. 1Q09 Efficiency Program 2008-12 annual savings (1) (%) (€ million) % Chg. YoY Human Resources Supplies and services ~0% 160 26% 26% 120 51 41 14 69 26 1Q09 1Q10 Me
Slide 8: Business Areas
Business Areas 7
Slide 9: Energy Demand Iberia: Recent performance
Energy Demand Iberia: Recent performance PORTUGAL – Electricity SPAIN – Electricity SPAIN – Gas Total Market YoY Change YoY Change YoY Change 6.8% 4.8% 6.4% 4.6% 3.0% -1.1% -1.4% -1.3% -3.6% -4.5% -5.7% -5.7% -10.5% 1Q09 2009 4Q09 1Q10 1Q10 - Adj.(1) -17.2% Demand recovery in 1Q10: Driven by increas
Slide 10: Market Environment in 1Q10
Market Environment in 1Q10 Residual Thermal Demand in Iberia Spain - Price/hour dispersion 1Q10 Spain - Wholesale Electricity prices (TWh) (€/MWh) (€/MWh) Total demand Others (1) Baseload price Hydro Wind Avg. Final Procurement price(2) 90 80 -28% +4 70 33 -41% -5 60 50 49 -9 43 -1 22 40 35 30 25 20
Slide 11: Hydro Power Production: 1Q10 market conditions reinforce profitability prospects
Hydro Power Production: 1Q10 market conditions reinforce profitability prospects for EDP’s hydro investments in Portugal EDP Hydro Production Iberia Hydro Power Plants under construction (Liberalized) (GWh) To enter in Liberalised PPA/CMEC Hydro plans MW GWh/Year(1) operation Picote II 246 Dez-2011
Slide 12: Long Term Contracted Generation Iberia (22% of EBITDA)
Long Term Contracted Generation Iberia (22% of EBITDA): growth prompted by new special regime capacity LT Contracted generation: Installed capacity EBITDA Long Term Contracted Generation (MW) (€ million) PPA/CMEC Special regime (1) PPA/CMEC Special regime (1) -1% -1% +9% 6,987 6,931 216 214 470 +30%
Slide 13: Liberalised Energy Activities Iberia (17% EBITDA)
Liberalised Energy Activities Iberia (17% EBITDA): EBITDA Liberalised Activities (€ million) +12% 163 162 116 98 1Q07 1Q08 1Q09 1Q10 Avg. Selling price(1) (€/MWh) 66.1 -21% 52.3 Avg. Pool cost (€/MWh) 42.4 -21% 33.6 Avg. Gener. cost (€/MWh) 31.7 -12% 28.0 EBITDA growth driven by higher sales to clie
Slide 14: Liberalised Electricity & Gas Supply in Portugal & Spain
Liberalised Electricity & Gas Supply in Portugal & Spain Electricity Liberalized Supply – Portugal & Spain Gas Supply – Portugal & Spain Volume Sold (TWh) # Clients (‘000) Volume Sold (TWh) # Clients (‘000) Portugal Spain Portugal Spain +143% +31% +99% +59% 821 825 7.1 9.6 630 3.6 6.0 338 1Q09 1Q10
Slide 15: Liberalized activities: Outlook for 2010 & 2011
Liberalized activities: Outlook for 2010 & 2011 EDP: Electricity forward contracting - 2010 EDP: Electricity forward contracting – 2011 (%) (%) Pool Purchases 100% Not Hydro 9% contracted Contracted Nuclear 8% with Coal 22% clients 100% >35% CCGT 62% Contracted Expected output Sales Expected output
Slide 16: Regulated Energy Networks Iberia (25% of EBITDA)
Regulated Energy Networks Iberia (25% of EBITDA): EBITDA): Regulated Revenues EBITDA (€ million) (€ million) % Chg. YoY Gas Iberia Electricity Spain +6% Electricity Portugal 452 +9% 427 238 218 1Q09 1Q10 1Q09 1Q10 • Electricity Portugal: flat regulated revenues; no impact from previous years’ tariff
Slide 17: Regulated Energy Networks Iberia: Demand recovery, efficiency improvements
Regulated Energy Networks Iberia: Demand recovery from industrial sector, efficiency improvements Energy Distributed (TWh) Efficiency Ratios (annualised) (€) Electricity Inflow Gas Distributed Opex(1)/Km Network Opex(1)/Client Connected Spain Portugal +6% 16.4 +82% 15.4 -2% -3% 14.4 2.8 2.7 89.6 86.
Slide 18: EDP Renováveis (19% of EBITDA): EBITDA up 20% YoY
EDP Renováveis (19% of EBITDA): EBITDA up 20% YoY Installed Capacity Output Average Selling Prices (Gross MW) (GWh) Europe (€/MWh) USA ($/MWh) +21% +28% 6,259 3,639 5,165 -12% 2,845 93.9 +6% 83.0 46.6 49.2 1Q09 1Q10 1Q09 1Q10 1Q09 1Q10 1Q09 1Q10 Installed capacity to 6,259 Gross MWs (#3 largest worl
Slide 19: Wind power prices
Wind power prices Production Breakdown Avg. Selling Price per MWh 3,639 GWh 1Q10 1Q09 % Feed-in Stable tariffs, Inflation updated. 18% €97 €97 +1% tariff 67% hedged or protected by Market + Premium €76 €93 -17% floor price + Hedging 33% 33% sold @ pool+premium 4 new PPAs closed at prices above portf
Slide 20: Brazil: Evolution of energy demand and BRL/EUR
Brazil: Evolution of energy demand and BRL/EUR Electricity Distributed (TWh) BRL/EUR: Year-to-Date (1) Bandeirante & Escelsa Concession Areas Final Clients Average in the year Third-party access Average in the 1Q +20% 3.40 3.20 6.0 3.02 3.00 5.0 2.77 +39% 2.80 2.60 +11% 2.46 2.40 2.20 1Q09 1Q10 Jan-
Slide 21: Brazil (17% of EBITDA)
Brazil (17% of EBITDA) Evolution of Quarterly EBITDA of EDP Brasil Evolution of Quarterly EBITDA of EDP Brasil (BRL millions) (€ millions) +23% +48% 166 413 336 112 1Q09 2Q09 3Q09 4Q09 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 Strong YoY recovery on volumes of electricity distribution (+20%) and electricity sol
Slide 22: Consolidated Financials
Consolidated Financials 21
Slide 23: Consolidated Capex 1Q10: 78% in expansion
Consolidated Capex 1Q10: 78% in expansion; 92% of expansion capex was wind and hydro power €573m Brazil 3% CCGT Iberia 3% Wind Power 5% Hydro Portugal • 52% USA, 12% Spain, 31% Rest of Europe; Expansion • Projects concluded: 73%; projects ongoing: 27%; Capex Hydro in Portugal under construction €447
Slide 24: Net Regulatory Receivables by Mar-10
Net Regulatory Receivables by Mar- Mar-10 €771m Regulatory Receivables from CMECs: €524m • €81m created in 1Q10 (low coal production and low electricity prices). Portugal • €446m from previous years: partly recovered in 2010, remaining in 2011. 524 CMECs Spanish Tariff Deficit: €554m • €324m include
Slide 25: EDP Consolidated Net Debt
EDP Consolidated Net Debt Debt by Interest Rate Term Debt by Currency Debt by Source of Funds Fixed USD Banks 21% 45% 34% BRL 7% 55% 72% 66% Capital Floating EUR Market Dec-09 Mar-10 Rating Last Rating Action Net Debt/EBITDA 4.2x 3.9x Standard & Poors A-/Negative/A2 04/08/2009 Moody’s A3/Stable/P2 0
Slide 26: EDP liquidity position Mar-10
EDP liquidity position Mar- Mar-10 (€ million) Sources of liquidity (Mar-10) Instrument Maximum Number of Utilised Available Maturity Amount counterparties Revolving Credit Facility (US$1.5bn) 1,113 22 1,113 - 02-07-2014 Revolving Credit Facility 1,600 19 - 1,600 04-03-2012 Domestic Credit Lines 375
Slide 27: EDP consolidated debt maturity profile
EDP consolidated debt maturity profile EDP consolidated debt maturity profile (March 31, 2010) (€ million) Commercial paper Brazil: € 291 M Other companies Project Finance: € 89 M Average Debt Maturity EDP SA + BV Mar-10: 5 years €0.5bn Bond: Jun-10 3.500 €0.7bn Bond: Mar-11 19% 3.000 2.500 14% 14%
Slide 28: EDP main sources and uses of funds in 2010-2011
EDP main sources and uses of funds in 2010- 2010-2011 Sources of funds Use of funds • Refinancing needs in the bond market 2010-2011: • Cash & Equivalents (Mar-10): €2.6bn • Available Credit Lines (Mar-10): €2.5bn Bond issue maturing in Jun-10: €0.5bn Bond issue maturing in Mar-11: €0.7bn Total: €5.
Slide 29: Net Profit up 17% YoY
Net Profit up 17% YoY (€ million) 1Q09 1Q10 ∆% ∆ Abs. EBITDA 849 940 +11% +90 11% Increase of Installed Capacity Net depreciations & (317) (351) +11% -34 provisions EBIT 532 589 +11% +57 Avg. cost of debt: Net Interest Costs (160) (102) -36% down from 4.7% in 1Q09 to 3.5% in 1Q10 +58 Other (1) 12 (3
Slide 30: Conclusion
Conclusion: Improvement of • Hedging business model in Iberia protected EDP from adverse spot market; • Reported EBITDA +11% returns • Net interest costs: -36% (cost of debt down from 4.7% to 3.5%) • Net Profit: +17% Continued Profitable • Total Installed capacity: +11% YoY in 1Q10 (wind capacity +2
Slide 31: Invitation: EDP Investor Day 20th May, Lisbon
Invitation: EDP Investor Day 20th May, Lisbon 30
Slide 32: IR Contacts
IR Contacts Miguel Viana, Head of IR Sónia Pimpão Elisabete Ferreira Ricardo Nuno Farinha Rui Freitas Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Fax: +351 210012899 Visit EDP Website Next Events Investor Day Cascais: May 19th-20th Site: www.edp.pt Chicago/Boston (Santander/JP Morgan): May