Slide 1: 1Q09 Results Presentation: Highlights of the period
EDP 1Q09 Results Presentation May 8th, 2009 1Q09: Highlights of the period EBITDA: €849m, +5% YoY LT Contracted Generation + Regulated networks + Wind Power + Brazil: 81% of EBITDA low exposure to lower industrial demand Hedging in liberalized activities and wind power: Clear positive impact Install
Slide 2: 1Q09 Highlights and Financial Headlines
1Q09: Highlights of the period Net profit of €265m: +1% YoY Regulatory receivables down from €1.9bn in Dec-08 to €852m in Mar-09: Securitization in Portugal New debt issues in 1Q09: €4.1bn of liquidity available on Mar-09, avg. debt maturity of 5 years Average cost of debt decreased from 5.7% in 1Q0
Slide 3: 1Q09 EBITDA Breakdown
1Q09 EBITDA Breakdown +5% % Chg. YoY €849m €809m Liberalized Activities Iberia +64% 12% 19% Brazil -30% 19% 13% Wind Power +23% 15% 18% Regulated Networks Iberia -4% 27% 81% 25% LT Contracted Generation -3% 27% 25% Iberia 1Q08 1Q09 81% of EBITDA in 1Q09 from regulated or LT Contracted activities 4 N
Slide 4: EDP Consolidated Operating Costs: New Efficiency Program
EDP Consolidated Operating Costs: New Efficiency Program Efficiency Program 2008-12 annualized savings (1) Controllable Operating Costs (2) – EDP Group (€ million/year) (€ million) Measures taken in 1Q09 -3.0% EDP 348 338 Renováveis +53.7% Brazil -33.4% 160 -1.5% EDP Iberia 96 27 ϭYϬϴ ϭYϬϵ Cost Cutt
Slide 5: 1Q09: Highlights in LT Contracted Generation Iberia
1Q09: Highlights in LT Contracted Generation Iberia EBITDA -3% YoY to €220m Recurrent EBITDA +13% YoY to €231m: desox + inflation in PPA/CMECs; new mini-hydro capacity PPA/CMECs recurrent EBITDA: +9% YoY to €213m (excludes time lag impact in fuel hedging) Special regime: Gross profit +60% YoY to €27
Slide 6: 1Q09: Highlights in Liberalized Activities Iberia
1Q09: Highlights in Liberalized Activities Iberia EBITDA +64% YoY to €161m Net short position on the Spanish pool – high weight of fixed price forward sales, mostly final clients Electricity supply to clients: 36% YoY growth in volumes; average selling price 9% higher Coal marginal cost lower than g
Slide 7: Liberalised Activities Iberia: Low exposure to Spanish pool
Liberalised Activities Iberia: Low exposure to Spanish pool Sales to clients as a % of generation output Sales to clients Market Structurally, EDP has sold between 50% and 80% of its 78% output directly to final clients 73% 61% 56% historically 1Q06 1Q07 1Q08 1Q09 1Q06 1Q07 1Q08 1Q09 CAGR Financial
Slide 8: Regulated Energy Networks Iberia (25% of EBITDA)
Regulated Energy Networks Iberia (25% of EBITDA) EBITDA Breakdown (€ million) % Chg. YoY -4% 228 218 Gas Networks Iberia -15% Electricity Distribution +12% Spain Electricity Distribution -3% Portugal 1T08 1T09 • Gas: Extension of concession contract in Portugal implies lower EBITDA in first years •
Slide 9: 1Q09: Highlights in Wind Power
1Q09: Highlights in Wind Power EBITDA growth of +23% YoY to €154m Installed capacity: +46% or +1.4 GW YoY to 4.5 GW (5.2 GW gross) in Mar-09 Output +40% YoY – Load factors of 28% in Europe and 40% in USA – Premium quality assets Avg. selling price in Spain -5% YoY vs. avg. pool price -35% YoY 1Q09 c
Slide 10: 1Q09: Highlights in Brazil
1Q09: Highlights in Brazil EBITDA decreased 30% YoY to €112m -12.6% forex impact: EBITDA in BRL terms decreased 20% YoY Distribution: disposal of Enersul and lower industrial demand Generation: increase of stake in Lajeado hydro plant, non recurrent trading gains in 1Q08 Efficiency improvement: Opex
Slide 11: Consolidated Financials: Capex
Consolidated Financials 20 Consolidated Capex +39% €841m Hydro: €232m payment in Jan-09 for concession right to build Fridão/Alvito hydro plants in Portugal; 866 MW of hydro €607m currently under construction; Hydro Portugal Wind Power: +99 MW installed in 1Q09; 1,017MWs under construction by Mar-09
Slide 12: Regulatory Receivables and EDP Consolidated Net Debt
Regulatory Receivables CMECs Portugal Brazil Spain • Securitization of Portuguese tariff Portugal Reg. Distrib. &Supply deficit in Mar-09 €1,891m -€1,039m • Lower than expected electricity prices in Portugal imply tariff surplus in 1Q09 • Slight increase of regulatory €852m receivables from CMECs du
Slide 13: Debt Maturity Profile and Liquidity Position
EDP consolidated debt maturity profile EDP consolidated debt maturity profile (March 31, 2009) (€ million) Commercial paper Other companies EDP SA + BV Brazil: € 288 M Average Debt Maturity Project Finance: € 60 M Mar-09: 5 years € 1 bn Bond: Oct 09 3.000 18,5% 17.8% 15.7% 2.400 14.6% 1.800 9.7% 7.6
Slide 14: Consolidated Net Profit Flat YoY
Consolidated Net profit flat YoY (€ million) 1Q08 1Q09 ∆% ∆ Abs. • Net interest costs decreased 5% YoY due to decline in average cost of debt from 5.7% in 1Q08 to EBITDA 809 849 5% +40 4.7% in 1Q09; avg. net debt higher 14.4% YoY Net depreciations & 267 317 19% +50 provisions • Other Financial Costs
Slide 15: Prospects of Lower Inflation for 2009
Prospects of lower Inflation for 2009 PORTUGAL: Inflation (1) SPAIN: Inflation (1) BRASIL: Inflation (1) 5.7% 4.1% 4.4% 4.5% 2.6% 1.5% 1.7% 0.9% 0.1% 2008 2009 F 2010 F 2008 2009 F 2010 F 2008 2009 F 2010 F Regulated revenues: lower inflation in 2009 would impact only 2010 regulated revenues Main ac
Slide 16: Energy Sold to Clients in Liberalized Iberian Markets
Energy sold to Clients in Liberalized Iberian Markets Estimated volumes to be supplied to clients already contracted for 2009 (1) Residential Build. & SME • Clients’ portfolio diversified: Residential + services Mater. & 16% > 40%; sectors most affected by the crisis Auto 29% (building materials and
Slide 17: Liberalized Activities: Electricity Forward Contracting
Liberalized activities: Electricity Forward Contracting 2009 2010 Hydro 7% Not 6% Contracted Nuclear Not Contracted 43% Coal > 90% 100% Contracted 14% CCGT - SP > 50% CCGT - PT 29% Contracted Expected output Sales Expected output Sales • Avg. Selling price*: ~€60/MWh • Average selling price* above c
Slide 18: Prospects for 2009: Regulatory Receivables and EBITDA
Prospects for 2009: Regulatory Receivables 2007 and 2008 tariff deficit: already securitized in Mar-09 Tariff Deficit Tariffs Portugal 2009: pool price assumed at €70/MWh vs. current €40/MWh level Portugal Marginal tariff surplus expected for 2009, not enough to compensate 2008 deficit Pre 2009: pos
Slide 19: Conclusion
Conclusion EBITDA strongly resilient, stable and predictable Stable, low-risk • >85% EBITDA with low sensitivity to economic cycle returns • Hedging strategy in liberalized activities • Demand destruction lower in Portugal than in rest of Europe • Tariff deficits: no material amount expected in 2009