Edp S.a. · EURONEXT:EDP

Edp — Energias de Portugal — H1 2017 Earnings Presentation

28 slides from Edp's earnings presentation, Jul 28, 2017

  1. Slide 1: Results Presentation 1H17

    <5 Results Presentation 1H17 Lisbon, July 28th, 2017

  2. Slide 2: 1H17 highlights: Recurring EBITDA €1,902m, Net Profit €450m

    Recurring EBITDA: €1,902m, -5% YoY 62% decline YoY of hydro production in Iberia: 42% below historical avg. in 1H17 vs. 68% above in 1H16 Net Profit: €450m, -5% YoY Avg. cost of debt -40bp YoY, OPEX IV savings at €71m in 1H17 (27% above target) Net debt at €16.9bn by Jun-17 2016 dividend (€0.7bn) fu

  3. Slide 3: Hydro production in 1H17 below historical average

    Hydro Coefficient in Portugal: 2016/1H17 EDP Hydro Production in Iberia: 2016/1H17 (Deviation vs. avg. hydro year) (TWh) 91% 62% 6.7 45% 5.8 3.1 2.0 2.2 1.6 -36% -48% -66% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 1H16 1H17 1H16 1H17 +68% -42% 12.5 -62% 4.7 Hydro production in 1H17

  4. Slide 4: Recurring EBITDA in Iberia penalized by adverse hydro production

    EBITDA Recurring EBITDA (€ million) (€ million) % Chg. YoY ForEx impact: -8% +20% 2,067 2.006 1.902 61 1,902 EDP Brasil 12% +31% Non recurring 17% items(1) ForEx EDP Renováveis 32% +11% impact: +3% 38% Recurring EBITDA 2,006 1,902 Generation & (2) -5% 31% Supply Iberia -43% 19% Networks 25% +3% 27%

  5. Slide 5: 40bp decline in average cost of debt

    Net Interest Cost (1) EDP 5-Year Bond Yield (2017 YTD) (€ million) (%) Latest Bond Issues (amount; maturity; yield) 202 196 2.0 185 179 €0.6bn; 6.7Y; 175 168 1.9% 1.5 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 USD1bn; 7.1Y; 3.7% 1H16 1H17 Net Interest -14% 1.0 398 343 0.9% Cost (1) (€m) Avg. Net Debt 16.9 -3% 16

  6. Slide 6: EDPR tender offer timeline

    Aug 3rd, 3pm(2) Aug 4th Aug 8th Euronext Special End of Offer Session & Results Offer Settlement Period Announcement The offer is voluntary and not subject to the fulfilment of any condition Delisting implies EDP to EDP may request the In case EDP holds >90% of maintain a permanent order delisting o

  7. Slide 7: Guidance: Recurring EBITDA ~€3.6bn

    Main drivers Guidance Weak hydro volumes Iberia 1H17 Recurring Gas distribution deconsolidation (most of 2H17) ~€3.6bn EBITDA Wind and hydro capacity increases Efficiency improvements Recurring Net Decline in avg. cost of debt > Recurring Net Profit Short term dilution effect from gas disposals (2H1

  8. Slide 8: CMEC, electricity distribution regulation and judicial investigation

    CMEC  Calculation clearly defined by law, essentially based on historical data 1 final adjustment  EDP to comply with existing contracts  Public audition on June 22nd: ERSE proposes extension of regulatory period from 3 to 4 years Electricity Distribution 2  RoRAB: Premium vs. 10 year sovereign

  9. Slide 9: Growth focused on renewables and regulated networks

    Renewables Installed Capacity: Growth targets 2016-20 Electricity Transmission Concessions in Brazil Solar PV 8% # Lines 5 Wind 22% Built in 2016 & +3.5 GW Length (km) Onshore Secured 1,297 2016-20 Estimated Capex 70% 3.1 ($Rbn) CoD 2020-22 CoD 2016 2017-18 2019-20 Annual Revenues 494 GW RAP ($Rm) 0

  10. Slide 10: Generation portfolio: low exposure to regulatory/environmental risks

    Average Residual Useful Life of EDP’s Generation – 2020E Average Residual Useful Life of EDP’s by Technology(1) Generation Portfolio(1) (Years) Hydro CCGT Wind & Solar Coal with DeNOx Nuclear 48% 24 (33%) 30 (13%) 27 16 (42%) 21 (11%) 11 8 (1%) 0 5 10 15 20 25 30 35 Dec-05 Dec-20 Generation portfoli

  11. Slide 11: Results Analysis

    rede Results Analysis

  12. Slide 12: Electricity demand and supply in Iberia

    Electricity Demand and Supply in Iberia (1) (TWh) +1.0% 148 150 CCGT 11 +67% 18  Electricity demand: +1% 15 +83% Coal 27 (1) 34  Hydro production: -59% Hydro -59% 14 Wind 36 -12% 32  Wind production: -12% Nuclear 28 28  Coal and CCGT production: +76% (2) Other 27 28 -1 3  Net imports from Franc

  13. Slide 13: EDP Generation Iberia production and average cost

    EDP Generation Iberia – Production (1) Avg. Production Cost (TWh) (€/MWh) -14% +145% 19.6 Nuclear, 4% 33 -8% 16.8 Cog. & Waste 4% 28% Hydro(1) 64% -62% 14 +53% 49% Coal 28% CCGT +205% 18% 5% 1H16 1H17 1H16 1H17 Strong decline of the weight of hydro on production mix (28% in 1H17 vs. 64% in 1H16) Avg

  14. Slide 14: EBITDA Generation & Supply Iberia

    EBITDA Generation & Supply Iberia (€ million) -44%  Avg. sourcing cost +77% 643  Energy management: wiped out on high pool prices 360 1H16 1H17 Weak performance in 1H17 following low hydro production and high pool prices 13

  15. Slide 15: Regulated networks EBITDA and controllable costs

    EBITDA - Regulated networks Controllable Costs(1) - Regulated networks (€ million) (€ million) Gas Iberia Electricity Spain Electricity Portugal +3% -3% 496 513 232 225 0% +15% 1% 1H16 1H17 1H16 1H17  Electricity Portugal: Slight YoY increase on RoRAB to 6.76%, 3% reduction on controllable costs 

  16. Slide 16: EDPR installed capacity and production

    EDPR Installed Capacity Production (GW) (TWh) Brazil North America Europe vs. Long 633MW Under +1% = term avg. Construction +8% +9% +0.2 +0.1 10.1 14.5 9.4 +0.4 2% 13.3 2% 45% 48% 53% 50% Jun-16 Jun-17 Jun-16 Jun-17 Installed capacity +8%, due to US (+0.4GW) and Mexico (+0.2GW); more 0.6GW under con

  17. Slide 17: EDPR EBITDA

    EDPR EBITDA (€ million) ForEx impact: Other +1% Iberia +11% North America 719 648 +2% 16% 17% 35% 41% -7% 50% 42% +32% 1H16 1H17  North America: Forex +3%, production +21%, higher revenues from TEI/PTC and USD6m one-off in 1H17  Iberia: Production -9%; EBITDA Spain +1% (avg. selling price +12%); E

  18. Slide 18: EDP Brasil EBITDA

    EDP Brasil EBITDA EDP Brasil Recurring EBITDA (BRL million) (BRL million) Non recurring Recurring Hydro Generation & Other Pecém I Distribution +9% -15% 1.273 1.087 995 Gain on 278 1.087 Pantanal 397 257 +55% disposal 361 198 1.087 -45% 995 9% 377 +30% 492 1H16 1H17 1H16 1H17  Distribution: regulat

  19. Slide 19: Opex by business area

    Weight on Opex Business area Indicator YoY Change Main drivers  Avg. MW: +6%; Avg. # contracts: +6% 56% Iberia Opex +1%  Thermal prod.: +77%; Inflation Portugal +1.4% Core Opex/MW  Average installed capacity: +8% 25% EDPR Flat (ex-forex):  Opex ex-forex: +8% Opex in BRL  Opex in BRL:+3% 19% EDP

  20. Slide 20: Portugal electricity system regulatory receivables

    Portugal: Electricity System Regulatory Receivables (€bn) Share of total receivables in the system 5.21 5.09 5.05 0.09 -0.20 -0.04 79% Other EDP 2.24 21% 1.00 1.08 Dec-15 1H16 2H16 Dec-16 1H17 Jun-17 2H17(E) Dec-17(E) Demand(1) (YoY Chg.) -0.4% +1.8% -0.9% Wind Factor (1.0=avg.) 1.09 0.91 0.99 Speci

  21. Slide 21: Net expansion investment

    (€ million) 1H16 1H17 ∆ Abs. Expansion Capex 460 463 +3 Change in Equipment  EDPR seasonal effect (post 4Q commissioning) 409 350 -60 Suppliers Change in Consolidation  1H17: full consolidation of Mexico wind farm 1 216 +215 Perimeter Net Financial Investments (1) (804) (240) +564  1H16: Sale of

  22. Slide 22: Change in net debt: Jun-17 vs. Dec-16

    Change in Net Debt: Jun-17 vs. Dec-16 (€ billion) +0.7 -0.4 16.9 -0.8 +0.8 15.9 0.6 +0.1 1.0 Regulatory 1.0 Receivables €0.3bn VAT payment (refundable in 2H17) 15.0 €0.3bn income tax on 2016’s securitizations 15.9 Net Debt One-offs (3) FCF Ex-Reg. Reg. Adj, Net Dividends ForEx Net Debt Dec-16 Receiv

  23. Slide 23: Debt by currency and maturity profile

    EDP consolidated debt by currency: Jun-17 EDP consolidated debt maturity profile as of Jun-17 (%) (€ billion) Commercial Paper Hybrid Bond Avg. Debt Maturity: Other Subsidiaries EDP S.A. & EDP Finance BV PLN 4.6 years USD 3% 4.0 22% 3.5 3.0 2.5 BRL 7% 2.0 68% 1.5 EUR 1.0 0.5 0.0 2017 2018 2019 2020

  24. Slide 24: Financial liquidity and refinancing needs

    Financial liquidity (Jun-17) Refinancing needs 2017-2019  Cash & Equivalents: €2.0bn  2017: €2.2bn 6.625% GBP Bond maturing @ Aug-17 €0.32bn  Available Credit Lines: €3.8bn 5.75% Eurobond maturing @ Sep-17 €0.75bn Revolving Credit Facility (Jun-19) €3.6bn Bank Loans and ECP €1.1bn Other RCF/Credi

  25. Slide 25: Financial results and associates: 1H17 vs. 1H16

    Financial Results & Associates: 1H17 vs. 1H16 (€ million of net cost) One-offs(1)  Net interest costs: -14% YoY 412 (55) 40 10 (4) 363  Regulatory receivables related: 35% decline 16 on balance sheet amounts, lower returns  Capitalised interest: Full commissioning of 396 388 hydro plants in Portu

  26. Slide 26: Net profit: 1H17 vs. 1H16

    Net Profit (€ million) 1H16 1H17 ∆% ∆ Abs. (€ million) % Chg. YoY EBITDA 2,067 1,902 -8% -164 Net Depreciations and -5% 739 710 -4% -29 Provisions 472 450 EBIT 1,327 1,192 -10% -135 Financial Results & (412) (363) +12% +50 Associated Companies Income Taxes 243 119 -51% -124 Recurring 517 493 Net pro

  27. Slide 27: 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 27th: Release of 1H17 Results Link Results & Presentations: Sep 8th: BPI Iberian Conference (Cascai

  28. Slide 28: 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 3rd of May, 2017 and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where this presentation

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