Clp Holdings Limited · HKEX:2
Clp — FY2021 Earnings Presentation
52 slides from Clp's earnings presentation, February 2022
Slide 1: 2021 Annual Results Highlights
CLP Holdings 2021 Annual Results Highlights
Slide 2: Disclaimer
Disclaimer Potential investors, analysts and shareholders of CLP Holdings Limited (the Company) and other recipients of this document are reminded that this document and any oral discussion made together with this document (the presentation) are provided for your information purposes only and you ma
Slide 3: Agenda
Agenda Overview Financial Performance and Outlook Strategy and Roadmap Appendices Rooftop solar panels at Queen’s Hill substation, Hong Kong 2
Slide 4: Overview
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Slide 5: Strengthened Climate Vision, robust operations, earnings lower despite strong Hong Kong, dependable dividend
Strengthened Climate Vision, robust operations, earnings lower despite strong Hong Kong, dependable dividend Accelerating Robust operations Dividends and solid energy transition Group earnings financial position amid volatile lower. Strong Hong maintained market conditions Kong results partially off
Slide 6: Strengthened Climate Vision, robust operations, earnings lower despite strong Hong Kong, dependable dividend
Strengthened Climate Vision, robust operations, earnings lower despite strong Hong Kong, dependable dividend Safety & Customers Operating Earnings & Operating EPS Safety (1) Reliability in Customer Accounts Hong Kong (2) Hong Kong Australia HK$9,517 million 17.8% 0.23 0.99 2.711m 2.443m HK$3.77 per
Slide 7: Financial Performance and Outlook
Financial Performance and Outlook Qian’an III Wind Farm, Jilin, Mainland China 6
Slide 8: Core earnings base solid, volatility weighed on Australia and Mainland China, one-off charges
Core earnings base solid, volatility weighed on Australia and Mainland China, one-off charges Revenue EBITDAF (1) ACOI (1) HK$83,959 million HK$24,499 million HK$15,191 million 5.5% 3.5% 10.1% Operating Earnings (1) Total Earnings Capital Investment (2) HK$9,517 million HK$8,491 million HK$14,198 mi
Slide 9: Operating earnings by region
Operating earnings by region HK$m 2021 2020 Change Operating Earnings Hong Kong electricity and related activities 8,490 8,088 5.0% Solid performance in HK Mainland China 1,660 2,233 25.7% High coal costs EnergyAustralia (83) 1,690 N/A Includes -HK$640m y-on-y change in Apraava Energy 221 175 26.3%
Slide 10: Hong Kong
Hong Kong Higher earnings reflecting progress in major projects despite COVID-19 pandemic Operating Earnings (HK$m) 9,000 + 5.0% 8,490 8,088 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2020 2021 Performance Outlook • Earnings up 5.0%: Reflecting progress in major projects despite COVID-19 • Cu
Slide 11: Mainland China
Mainland China Strong nuclear results partially offset impact of higher coal prices, renewables stable Operating Earnings (HK$m) 2,500 2,233 - 25.7% 2,000 1,660 1,500 1,000 500 0 2020 2021 Performance Outlook • Earnings down 25.7%: Strong nuclear results offset impact of higher coal prices, • Coal p
Slide 12: EnergyAustralia
EnergyAustralia Severe impact from higher gas supply costs, lower electricity prices and unfavourable fair value adjustments as the energy transition accelerates Operating Earnings 1,900 1,690 (HK$m) 1,700 1,500 1,300 1,100 -HK$1,773 million 900 (includes -HK$640m y-on-y change in non-cash fair valu
Slide 13: Apraava Energy
Apraava Energy Dependable renewables and transmission partially offset by major maintenance in Jhajjar Operating Earnings (HK$m) 250 + 26.3% 221 200 175 150 100 50 0 2020 2021 Performance Outlook • Earnings up 26.3%: Dependable renewables and transmission partially offset by • Accelerate growth unde
Slide 14: Southeast Asia and Taiwan
Southeast Asia and Taiwan Ho-Ping earnings reduced on higher coal costs and lower energy tariff with usual one-year time lag Operating Earnings (HK$m) 450 400 386 350 - 55.2% 300 250 200 173 150 100 50 0 2020 2021 Performance Outlook • Earnings down 55.2%: Ho-Ping earnings reduced on higher coal cos
Slide 15: Free Cash Flow lower while capital investment increased driven by decarbonisation projects
Free Cash Flow lower while capital investment increased driven by decarbonisation projects. Dividends paid stable Cash Inflows and Outflows (HK$ billion) 25.00 20.6 20.5 20.00 0.2 1.3 2.3 3.4 17.4 17.5 1.7 0.2 0.4 1.0 15.00 10.3 8.7 10.00 20.4 17.1 5.00 7.8 7.8 0.00 Cash Inflows Change in FCF Procee
Slide 16: Maintained strong ratings, liquidity and headroom
Maintained strong ratings, liquidity and headroom Net Debt Net Debt/Total Capital Credit Ratings S&P Moody’s HK$50.0 billion 28.1% A A2 CLP Holdings Stable Stable Debt Maturity Debt Composition A+ A1 Within 1 CLP Power HK year Floating Stable Stable 18% rate 39% 1-2 AA- A1 years 11% CAPCO 54% 61% St
Slide 17: Long standing practice of dependable dividends continued in 2021
Long standing practice of dependable dividends continued in 2021, with total dividends maintained at HK$3.10 per share CLP Dividend 1990 – 2021 and Shareholding by Category HK$ 3.5 Interests 3.08 3.10 3.10 Institutional associated 2.91 3.02 2.80 3.0 Investors 2.70 with Kadoorie 2.62 33% 35% Family 2
Slide 18: Strategy and Roadmap
Strategy and Roadmap Smart Energy Centre, Hong Kong 17
Slide 19: Strategy and Roadmap
Strategy and Roadmap Our Climate Vision Clear path to Focus on growth Deliver customer 2050 – transition to growth and in Hong Kong centric Utility of net zero decarbonisation and Greater Bay the Future with across our Area leveraging innovation, portfolio regional technology and capabilities agile
Slide 20: Our new strengthened Climate Vision 2050
Our new strengthened Climate Vision 2050 Key Climate Vision 2050 commitments • Achieve net-zero greenhouse gas emissions by 2050 • Phase out of all coal-fired assets by 2040, a decade earlier than previously pledged • New 2030 emissions target aligned with the SBTi’s well-below 2⁰C pathway, and stre
Slide 21: Our decarbonisation solutions
Our decarbonisation solutions EV infrastructure Data Centres Rooftop Solar HK’s Climate Action Plan Tallawarra Gas/Hydrogen CLP’s portfolio of solutions to help customers decarbonise Enabling Using electricity more Improving Helping offset Working with low-carbon widely for transport energy emission
Slide 22: Focus on growth in Hong Kong and Greater Bay Area leveraging regional capabilities
Focus on growth in Hong Kong and Greater Bay Area leveraging regional capabilities Foundations for growth Partnerships and Growth focus areas and entry into new investments opportunities Integrated Energy Service Provider Energy Electricity Supply Renewables Infrastructure Wind Data Centres Solar
Slide 23: Realising our Utility of the Future vision
Realising our Utility of the Future vision Creating value for all stakeholders with customer centric solutions leveraging innovation, technology & agile workforce Customer centric Technology & solutions digitally driven investing in innovation Town Island microgrid Smarter grids and Empowered & agil
Slide 24: Appendices
Appendices Smart Energy Connect 23
Slide 25: CLP Group – Financial Highlights
CLP Group – Financial Highlights 2021 2020 Change Revenue (HK$M) 83,959 79,590 +5.5% Operating earnings (HK$M) 9,517 11,577 -17.8% Total earnings (HK$M) 8,491 11,456 -25.9% Operating earnings per share (HK$) 3.77 4.58 -17.8% Total earnings per share (HK$) 3.36 4.53 -25.9% Dividends per share (HK$) F
Slide 26: Items Affecting Comparability
Items Affecting Comparability EnergyAustralia Litigation Settlement HK$M 2021 2020 • Litigation Settlement. For further details see page 33 of the Hong Kong Stock Exchange Announcement “CLP EnergyAustralia – Litigation Settlement (777) - Holdings Limited 2021 Annual Results Announcement” which can b
Slide 27: CLP Group – Operating Highlights
CLP Group – Operating Highlights 2021 2020 Change Safety (Total Recordable Injury Rate) 0.23 0.32 -0.09 Reliability in Hong Kong (minutes lost pa) (1) 0.99 0.92 +0.07 Customer Accounts (Thousand) Hong Kong 2,711 2,672 +39 Australia 2,443 2,449 -7 Electricity Sent Out (TWh) (2) 91.2 85.9 +6.1% Genera
Slide 28: CLP Group – Cash Flow and Financial Structure
HK$M 2021 2020 CLP Group – Cash Flow Cash Flow and Financial Structure EBITDAF 22,880 25,254 Less: Items affecting comparability 1,619 121 Recurring EBITDAF 24,499 25,375 Cash Flow Less: Share of results of joint ventures & (1,974) (2,522) • Lower free cash flow mainly reflected lower operating earn
Slide 29: CLP Group – Financial Obligations at a Glance
CLP Group – Financial Obligations at a Glance HK$M 31 Dec 2021 31 Dec 2020 Increase in the Group’s net HONG KONG debt to total capital was Total borrowings of CLPP, CAPCO & PSDC 46,534 43,449 mainly due to higher net debt Minus: Bank balances and liquid funds (6,431) (6,598) to finance capital expen
Slide 30: CLP Group – Credit Ratings
CLP Group – Credit Ratings CLP Holdings CLP Power CAPCO EnergyAustralia S&P Moody’s S&P Moody’s S&P Moody’s S&P In May and June 2021, S&P and Long-term Rating Moody’s affirmed the credit ratings of CLP Holdings, CLP Power Hong Foreign Currency A A2 A+ A1 AA- A1 BBB+ Kong and CAPCO with stable Outloo
Slide 31: CLP Group – Highlights of Financing Activities
For more information on CLP Group – Highlights of Financing Activities CLP Climate Action Finance Framework CLP Holdings: Ample liquidity in the Group at 31 December 2021 Scheme of Control: Cost effective financing arrangements • Undrawn facilities HK$28.1 billion, bank balances HK$8.3 billion. • CL
Slide 32: CLP Group – Loan Balances by Type and Maturity
CLP Group – Loan Balances by Type and Maturity Loan Balance - Type Loan Balance – Maturity (1) Proportion of Debt on Fixed HK$M HK$M and Floating Rate 60,000 2% 60,000 2% 25% 18% 50,000 50,000 16% 24% 11% 11% 40,000 40,000 17% 39% 23% 37% 30,000 30,000 Dec 2021 66% 61% 20,000 68% 20,000 63% 54% Dec
Slide 33: Hong Kong – Growing Business Scale
Hong Kong – Growing Business Scale Generation Transmission Distribution Retail 10,420 MW > 16,300 km of transmission and 237 primary and > 15,200 35,355 GWh sold and generation portfolio high voltage distribution lines secondary substations 2.71 million customer accounts During 2021: • Local electri
Slide 34: Hong Kong – Electricity Sales, Earnings and Capex
Hong Kong – Electricity Sales, Earnings and Capex Electricity Sales Capital Expenditure (Accrual basis) GWh 2021 2020 Change Proportion HK$M 2021 2020 Change Residential 10,525 10,298 2.2% 30% CLP Power Hong Kong 4,869 4,528 7.5% Commercial 13,423 12,878 4.2% 38% CAPCO * 6,353 4,354 45.9% Infrastruc
Slide 35: Hong Kong – Tariff, Reliability and Environmental Improvement
Hong Kong – Tariff, Reliability and Environmental Improvement Low Tariff High Reliability HK$/kWh Unplanned customer minutes lost per year 3.5 30 29 3.0 2.5 20 2.0 14 14 1.5 10 1.0 1.0 1.6 0.5 0 CLP Power Singapore London Sydney New York 0.0 (CBD) CLP Power Singapore Sydney London New York Remarks:
Slide 36: Hong Kong – Tariff, Energy Cost, Fuel Mix and Gas Volume
Hong Kong – Tariff, Energy Cost, Fuel Mix and Gas Volume Tariffs Energy Cost HK¢/kWh 140 HK$M 128.9 Average Net Tariff 120 25,000 +10% 21,345 19,372 100 93.7 Basic Tariff 20,000 647 80 356 6,838 Others 60 15,000 6,714 Nuclear 40 38.6* Fuel Cost Adjustment 10,000 Gas 20 11,374 Coal Special Rebate 11,
Slide 37: Mainland China – Financials
Mainland China – Financials HK$M 2021 2020 Renewables 545 565 - Wind 305 306 - Hydro 45 88 - Solar 195 171 Nuclear 1,908 1,594 - Daya Bay 963 933 - Yangjiang 945 661 Thermal (572) 203 - Shandong (321) (7) - Guohua (149) (1) - Fangchenggang (102) 211 Operating & development expenditure (221) (129) Op
Slide 38: Mainland China – Performance and Capacity
Mainland China – Performance and Capacity Earnings and performance Business development opportunities • Higher earnings from Nuclear was mainly due to strong • CLP’s first grid-parity windfarm in China, Qian’an III Wind generation of Yangjiang (100 equity MW with 5MW battery storage system) in Jilin
Slide 39: Mainland China – Market Sales in 2021
Mainland China – Market Sales in 2021 Province Projects with Market Sales (Equity MW) Guangxi FCG Thermal (1,806MW) Yunnan Xundian Wind (50MW) Xicun Solar (84MW) Dali Yang_er Hydro (50MW) JILIN Inner Mongolia Zhungeer Thermal (257MW) LIAONING Sichuan Jiangbian Hydro (330MW) GANSU INNER Gansu Jinchan
Slide 40: EnergyAustralia – Financials
EnergyAustralia – Financials HK$M 2021 2020 (1) Adjusted Current Operating Income Customer (Retail) 819 264 Energy (Wholesale) 1,445 3,440 Enterprise (Corporate) (1,799) (1,663) Total 465 2,041 Fair value adjustments (2) (477) 440 Net finance costs (126) (88) Income tax expense 55 (703) Operating Ea
Slide 41: EnergyAustralia – Customer Operations
EnergyAustralia – Customer Operations Customer Account Numbers Sales Volume & Revenue 2021 2020 2021 2020 Customer Account Numbers (000s) Sales Volume & Revenue Electricity Electricity Electricity Gas Total Electricity Gas Total Gas (PJ) Gas (PJ) (TWh) (TWh) Mass Market 1,587.4 848.1 2,435.5 1,594.1
Slide 42: EnergyAustralia – Customer Operations
EnergyAustralia – Customer Operations Supporting customers experiencing 61% of bills issued in FY2021 were hardship – E-bills 23.7k customers utilising EnergyAssist • Compared with 5% in 2015 programme • Improving 6pts since 2020 17 Ombudsman complaints/10k accounts 26.3pts improvement in • 72% redu
Slide 43: EnergyAustralia – Wholesale Market Conditions
EnergyAustralia – Wholesale Market Conditions • Forward prices remain below the sustained high prices of the Year Ahead Swap Prices (1) 2017 to 2020 period, reflecting the impact of new renewables that 120 outweigh the planned closure of the Liddell coal power station. 100 NSW VIC • Focus remains on
Slide 44: Apraava Energy – Financials
Apraava Energy – Financials HK$M 2021 2020 Renewables 186 104 Thermal (Jhajjar) 98 121 Thermal (Paguthan & Corporate) (70) (55) Transmission 7 5 Operating earnings 221 175 Item affecting comparability - (148) - Jhajjar impairment Total earnings 73 175 Apraava Energy 43
Slide 45: Apraava Energy – Performance and Projects
Apraava Energy – Performance and Projects Performance and recent acquisition Expanding our renewable generation portfolio • A second wave of COVID-19 infections took a heavy toll on • Construction of the Sidhpur wind project in Gujarat India in the second and third quarters of the year, continued to
Slide 46: Southeast Asia & Taiwan – Financials
Southeast Asia & Taiwan – Financials HK$M 2021 2020 Thermal 126 366 Renewables 61 63 Others (14) (43) Operating earnings(1) 173 386 Item affecting comparability – 249 - Gain on sale of Vietnam project Total earnings 422 386 2020 HK$M Previous Reallocation Current reporting reporting Renewables (60)
Slide 47: CLP Group – Generation and Energy Storage Portfolio (i) – 31 Dec 2021
CLP Group – Generation and Energy Storage Portfolio(i) – 31 Dec 2021 20,018 Equity MW and 5,090MW Long Term Purchase (total 25,108MW) ENERGYAUSTRALIA total 5,470MW* HONG KONG total 8,243MW* Operational Operational Yallourn 1,480 / 1,480 (c) Castle Peak A&B 4,108 / 4,108* (c) Mount Piper 1,430 / 1,43
Slide 48: CLP Group – Renewable Generation Portfolio (i) – 31 Dec 2021
CLP Group – Renewable Generation Portfolio(i) – 31 Dec 2021 2,743 Equity MW and 881 MW Long Term Purchase (total 3,624MW) - 14% of CLP total generation portfolio MAINLAND CHINA 1,828 MW ENERGYAUSTRALIA 910 MW* APRAAVA ENERGY 855 MW Operational Operational Operational Wind 910 MW Wind 616 MW Wind 555
Slide 49: CLP Group – Generation and Energy Storage Capacity by Fuel Mix
CLP Group – Generation and Energy Storage Capacity(1) by Fuel Mix 25,108 MW Attributable to CLP Group Operational Under construction Capacity by Total MW % MW % MW % Energy Type (a) + (b) (a) (b) Coal 12,027 48% 12,027 48% - - Gas 5,813 23% 5,213 21% 600 2% Nuclear 2,685 11% 2,685 11% - - Wind 2,331
Slide 50: CLP Group – Energy Sent Out – 2021
CLP TWh Group – Energy Sent Out – 2021 40 CLP 2021 Annual Generation 36.6 as Sent Out(1) 35 34.1 30 29.1 28.0 23% 48% 23% 48% 25 2021 2% 20 18.3 18.1 2% 2% 2020 2% 5% 5% 20% 15 20% 2020: 85.9 TW 2021: 91.2 TW 10 5.7 5 3.8 1.8 1.7 0 -5 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 Hong Kong Mai
Slide 51: Additional Resources
Additional Resources Scan or click on the QR codes to go to appropriate pages Annual Report(1) Sustainability Climate-related Introductory Annual Results 2021 Report(1) Disclosures Pack Presentation 2021 Report(1) 2021 February 2022 February 2022 (1) To be published in March 2022 50
Slide 52: Thank You
CLP Holdings Thank You Information Classification: Confidential/Proprietary