Redes Energeticas Nacionais Sa · EURONEXT:RENE
Redes Energeticas Nacionais Sa — REN - Redes Energéticas Nacionais — Investor Presentation (March 2024)
43 slides from Redes Energeticas Nacionais Sa's investor presentation, March 2024
Slide 1: Corporate presentation
Corporate presentation March 2024 1
Slide 2: Key messages
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Key messages Exclusive TSO in Portugal Focused in Portugal with growth opportunities in Chile Operational excellence Highly efficient and reliable player, committed to innova
Slide 3: Exclusive TSO in Portugal
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Exclusive TSO in Portugal Focused in Portugal with growth opportunities in Chile CORPORATE PRESENTATION 3
Slide 4: 70-year track record as a leading energy infrastructure operator focused in Portugal
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 70-year track record as a leading energy infrastructure operator focused in Portugal Foundation of CNE 2nd reprivatization phase 2nd reprivatization IPO of 4% of HCB (Nationa
Slide 5: Exclusive TSO and largest natural gas DSO in Portugal, with international presence
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Exclusive TSO and largest natural gas DSO in Portugal, with international presence Portugal Chile Spain 9,409 km 92 km 1% stake 339M€ | EBITDA 16M€ | EBITDA Transmission 1,37
Slide 6: Portugal's electricity transmission and system management activity
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Portugal’s electricity transmission and system management activity Exclusive Transmission System Operator (TSO) 2,044 M€ AVERAGE RAB1 Transmission of very high voltage 2023 e
Slide 7: The only player in Portugal's natural gas transmission activity
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 The only player in Portugal’s natural gas transmission activity Exclusive TSO (concession until 2046) 831 M€ Transportation of high-pressure natural AVERAGE RAB gas and overa
Slide 8: Largest player in Portugal's natural gas distribution activity
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Largest player in Portugal’s natural gas distribution activity Largest gas distribution concession in Portugal among 11 companies with 492 M€ exclusive regional concessions A
Slide 9: Telecommunications business carried through REN Telecom and strong IT infrastructures
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Telecommunications business carried through REN Telecom and strong IT infrastructures REN Telecom Public telecommunications network operator 8,106km since 2002 optical fiber
Slide 10: Growing its international presence in the Chilean energy transmission business
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Growing its international presence in the Chilean energy transmission business Electrogas Transemel (42.5% stake since 2017) (100% since 2019) Operates a gas US$ 53M Strategi
Slide 11: Operational excellence
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Operational excellence Highly efficient and reliable player, committed to innovation and technology CORPORATE PRESENTATION 11
Slide 12: Amongst the most efficient TSO's with superior service quality in international benchmarks
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Amongst the most efficient TSO’s with superior service quality in international benchmarks Electricity Natural Gas Transmission Service level in line with or outperforming pe
Slide 13: Enabling a renewable future
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Enabling a renewable future Closing of Portugal’s last remaining % Electricity consumption from renewable sources1 coal plant in November 2021 61% Renewable generation suppli
Slide 14: REN secured green transformation in Portugal
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 REN secured green transformation in Portugal Installed capacity of renewables REN kept a stable and reliable service 79% of total capacity 25 GW 1.2 Bn€ Domestic capex in 201
Slide 15: Leverage REN's DNA of innovation and energy transition
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Leverage REN’s DNA of innovation and energy transition Key projects in 2023 RESEARCH, DEVELOPMENT ▪ Pilot project on gas pipeline Quality and business monitoring with fiber o
Slide 16: Solid shareholder base with best-in-class corporate governance
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Solid shareholder base with best-in-class corporate governance Shareholder structure1 Board composition 25.0% Board diversity and 44.4% independence OTHER 46,7% Independent 1
Slide 17: REN remains committed to the highest ESG standards
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 REN remains committed to the highest ESG standards Environmental Social Governance 33% TARGETS CO2 emissions reduction 2023: >1/3 of women in 1st line Increasing ESG weight i
Slide 18: Good performance in international ESG scores but with ambition to do more
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Good performance in international ESG scores but with ambition to do more Latest Scale Score YOY Strengths assessment Innovation, environmental reporting, 0-100 60 and social
Slide 19: REN displaying reliable and consistent performance for all stakeholders
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 REN displaying reliable and consistent performance for all stakeholders Economy Society People >4 B€ ~11 M 748 invested in Portuguese people connected to grid with no employe
Slide 20: Stable business context
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Stable business context Stable regulatory context with long term contracts CORPORATE PRESENTATION 20
Slide 21: Fully regulated domestic business
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Fully regulated domestic business Regulatory framework Stable regulatory No consumer Allowed framework credit risk revenues ◼ 4-year regulatory periods, ◼ Tariff revenues are
Slide 22: Introduction of TOTEX regulation in the electricity business
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Introduction of TOTEX regulation in the electricity business REN’s domestic allowed revenues breakdown Electricity 2022-251 Natural Gas 2020-23 Revenue Cap for + Efficiency S
Slide 23: Transparent and stable return mechanism
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Transparent and stable return mechanism RoR evolution, % RoR indexation mechanism Electricity (Tx) Natural gas (Tx) Natural gas (Dx) Electricity (base) At the ▪ Base RoR inde
Slide 24: Stable financial performance
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Stable financial performance Distribution Transmission EBITDA1 M€ 486 477 456 447 467 486 47 46 44 44 50 51 439 431 412 403 417 436 Average RAB1 M€ The regulatory 3,832 3,753
Slide 25: International gas transmission business very stable
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 International gas transmission business very stable Electrogas business has high EBITDA margins …with positive impact in REN’s results and low capex requirements… EBITDA Impa
Slide 26: International electricity transmission business with attractive growth potential
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 International electricity transmission business with attractive growth potential EBITDA Revenues regularizations (one-off) M€ 16 11 7 8 9 4 Arica 6 3 8 12 Iquique Calama Net
Slide 27: Strong operational performance and stable asset base
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Strong operational performance and stable asset base New businesses allow for an overall asset base stabilization and sustainable operational results, despite mature domestic
Slide 28: Solid results
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Solid results Strong financial discipline leading to attractive shareholder returns CORPORATE PRESENTATION 28
Slide 29: Stable net income
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Stable net income Despite some volatility in 10y Portuguese Government Bonds, REN has been able to maintain a stable net income Net income1 M€ 2.6 3.1 1.9 3.9 3.8 3.0 2.8 2.8
Slide 30: Balanced credit profile with investment grade credit metrics and lower cost of debt
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Balanced credit profile with investment grade credit metrics and lower cost of debt Gross debt maturity profile and funding Cost of debt evolution Rating agencies sources1 %
Slide 31: Delivering compelling returns to shareholders
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Delivering compelling returns to shareholders Cumulative Total Shareholder Return1 since REN’s IPO Indexed from 100 180 PSI20 REN EuroStoxx Utilities 150 150.6% 120 90 Eurost
Slide 32: Stable and attractive dividend per share
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Stable and attractive dividend per share REN Dividend per Share Dividend yield € 2023, % 11.3 6.6 6.7 0.171 0.171 0.171 0.171 6.0 0.154 0.154 5.0 4.0 3.2 2.3 1.7 2017 2018 20
Slide 33: Strategic cycle 2021-24
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Strategic cycle 2021-24 REN at the core of energy transition reinforcing its ESG standards and delivering growth, superior operational performance and solid financials CORPOR
Slide 34: REN is enhancing its journey through strategic pillars
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 REN is enhancing its journey through 3 strategic pillars Investment At the core growth story, ESG highest of energy delivering superior standard transition service quality So
Slide 35: REN is stepping up and accelerating its ESG commitment
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 REN is stepping up and accelerating its ESG commitment Environmental Social & Governance 2019: >258,000 TON CO2 emitted1 >1/3 of women in 1st line 33% management positions in
Slide 36: REN pushing for investment growth in Portugal and Chile
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 REN pushing for investment growth in Portugal and Chile Average annual capex, M€ 2018-20 2021-24 190-220 Up to 40% Electricity Increase in 156 Gas transmission domestic avg.
Slide 37: European and National energy policies are setting more ambitious targets for decarbonization
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 European and National energy policies are setting more ambitious targets for decarbonization The EU is setting more ambitious Portugal is adapting PNEC 2030 to cope targets t
Slide 38: REN's investment is expected to rise to enable more ambitious national decarbonization goals
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 REN's investment is expected to rise to enable more ambitious national decarbonization goals Targets announced in 2021 14 direct agreements Expansion to accommodate Electrici
Slide 39: Concrete investments in resilience and innovation deployment
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Concrete investments in resilience and innovation deployment to keep strong operational performance ▪ Reinforcement with new overhead lines Resilience ▪ Refurbishment of over
Slide 40: Investment growth and solid financials
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Investment growth and solid financials Execution Up to +35% update 200-235 250 175 Strong capex level Total aligned with strategy, capex, M€ Capex growth leading to a stable
Slide 41: Robust debt management and attractive returns
1. EXCLUSIVE TSO IN PORTUGAL 2. OPERATIONAL EXCELLENCE 3. STABLE BUSINESS CONTEXT 4. SOLID RESULTS 5. STRATEGIC CYCLE 2021-24 Robust debt management and atractive returns Execution update Optimize cost of FFO/ Net 11-13% 12-14% 15-17% debt debt, % beyond 2022 2022-23 (~11% in 2021) (11% in 2021) Pro
Slide 42: 2023 Results
2023 Results INDICATOR 2022 2023 2022/23 EBITDA1 Results 487.3 514.0 26.7 5.5% Results Net financial income1 -44.0 -40.6 3.4 7.7% Net income 111.8 149.2 37.5 33.5% Recurrent net 108.7 125.0 16.4 15.1% income CAPEX2 201.5 301.5 100.0 49.6% Investment Transfers to RAB3 163.3 222.6 59.3 36.3% Average
Slide 43: REN at a glance
REN at a glance1 FINANCIAL ELECTRICITY GAS 149.2 M€ 44.8 TWh 55.6 TWh NET INCOME ENERGY TRANSMITED TRANSPORTED ENERGY 301.5 M€ 50.7 TWh 49.0 TWh INVESTMENT CONSUMPTION CONSUMPTION 3,547.8 M€ 0.39 min 95% AVERAGE RAB INTERRUPTION TIME2 LNG TERMINAL COMMUNITIES HUMAN CAPITAL NATURAL CAPITAL 670 k€ 748
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