Rusgidro · RUS:HYDR
Rusgidro — RusHydro — Investor Day (February 2019)
32 slides from Rusgidro's investor day presentation, Feb 27, 2019
Slide 1: RusHydro Capital markets day
RusHydro RusHydro Capital markets day February 27, 2019 Moscow, Russia
Slide 2: RusHydro Group's results in 2018 and strategic priorities
RusHydro RusHydro Group’s results in 2018 Strategic development priorities: Modernization and new construction in the Far Eastern Federal District Nikolay Shulginov General Director – Chairman of the Management Board
Slide 3: Key figures and facts
Key figures and facts Key figures 39.4 144.2 70.5 >60% ~108 >46 1.2x 64% GW TWh Of Russia’s RUB bn RUB bn Average EBITDA thousand installed hydro net debt/ margin of Installed electric Total output of employees FY2018 EBITDA Dividends paid in capacity controlled EBITDA(2) hydropower capacity of RusH
Slide 4: RusHydro: yesterday and today
RusHydro: yesterday and today 2015 2018E 38.7 Installed electric capacity, GW 39.4 (1) 127.4 Electricity generation, TWh 144.2 (1) 73 ~ 108(2) EBITDA, RUB bn/ EBITDA margin, % 20% ~27% 14.9(3) 46.1(4) Dividend, RUB bn/ Dividend per share, kopecks 1.29(3) 3.72(4) 222 Total debt, RUB bn / 227.2(3) 2.4
Slide 5: Key highlights and events of 2018
Key highlights and events of 2018 Operations • A new historical record attained in 2018 – 144.2 bn TWh (1) • Commissioning of Vostochnaya CHP (139.5 MW / 432 Gcal/h) Investment program • Commissioning of Unit#3 of Ust-Srednekanskaya HPP ГЭС (142.5 MW) • Commissioning of unique WPP (0.9 MW) in to
Slide 6: Implementation of key investment projects and commissioning of capacity in 2018-2019
Implementation of key investment projects and commissioning of electric capacity in 2018-2019 2018 2019 Commissioning of Vostochnaya CHP (139.5 MW, 432 Gcal/h), successful testing 3rd → Commissioning of Nizhne-Bureyskaya HPP (320 MW), Zaramagskaya hydroelectric unit of Ust-Sredekanskaya HPP (142.5 M
Slide 7: Long-term program for replacement of obsolete capacity
Long-term program for replacement of obsolete capacity – most efficient projects Long-term program for replacement of obsolete capacity and development of the Far East’s power system is intended for completion by 2027 Decommissioning of generation equipment: 1.6 GW Chaunskaya CHP Decommissioning o
Slide 8: Management's recommendations for changes to the current dividend policy
Management’s recommendations for changes to the current dividend policy PJSC RusHydro takes into consideration the Board of Directors’ decision regarding dividend. The decree of the Government of the Russian Federation dated 18.04.2016 number 705-p sets the dividend payout ratio at 50% of the comp
Slide 9: Operating results 2018, expected 2019, hydrological situation
RusHydro RusHydro Group’s operating results for 2018 RusHydro Group’s expected operating for 2019 Hydrological situation at the end of 2018 Boris Bogush Management Board member, First Deputy General Director - Chief Engineer
Slide 10: Operating results
Operating results • In 2018 RusHydro Group attained yet another record of production • In 2019 given observed hydrological situation and long-run average inflows RusHydro group estimated production will reach 126-130 bn kW/h including 13.6 bn kW/h Electricity production, bn kWh Rational utilization
Slide 11: Hydrological situation in 2018
Hydrological situation in 2018 Actual inflows to main reservoirs against the long-run average 135% 2017 2018 119% 109% 111% 104% 104% 103% 95% 105% 99% 89% 87% 94% 94% 78% 75% Volga-Kama Cascade Sayano-Shushenskoye Novosibirskoye resrvoir Zeiskoye reservoir Bureyskoye reservoir Kolymskoye reservoir
Slide 12: Measures aimed at increased efficiency of Sayano-Shushenskaya HPP regime
Measures aimed at increased efficiency of Sayano-Shushenskaya HPP regime Inflow Headrace level A number flood peaks took place at Sayano-Shushenskoye reservoir during the third decade of July-August 2018. Inflows in the third decade of July 148% of the long-run average, in August – 108% of the long-
Slide 13: Measures aimed at increased efficiency of HPPs of Sulaksky cascade
Measures aimed at increased efficiency of HPPs of Sulaksky cascade In August 2018 rain-driven floods on Sulaksky cascade overlaid with high water levels in Irganayskoye and Chirkeyskoye reservoirs, involved in seasonal regulation of the cascade. Targets for the flood period regimes • Efficient utili
Slide 14: Hydrological situation in 2019
Hydrological situation in 2019 Water volumes in reservoirs of the main HPPs as of the end of second decade of February 145% 2018 2019 108% 104% 94% 115% 96% 94% 96% 92% 101% 88% 96% 95% 88% 52% 61% Volga-Kama cascade Sayano-Shushenskoye reservoir Novosibirskoye reservoir Zeyskoye reservoir Bureyskoy
Slide 15: Liquidation of landslide impact on Bureyskoye reservoir
Liquidation of landslide impact on Bureyskoye reservoir On 11.12.2018 a mass of rock slid into Bureyskoye reservoir. On 24.12.2018 first unofficial information on the landslide arrived. On 25.12.2018 survey identified that the water level in the upper part of the reservoir due to the barrier formed
Slide 16: Preliminary financial results, cost reduction, investment program
RusHydro Preliminary consolidated financial results of RusHydro Group for 2018 Interim results of implementation of operating efficiency improvement and cost reduction plan RusHydro Group’s investment program for 2019 - 2023 Sergey Kirov Management Board member, First Deputy General Director
Slide 17: Preliminary IFRS consolidated financial results for 2018
Preliminary IFRS consolidated financial results for 2018 Positive factors: ↗ Favorable operating results of HPPs in the first price zone; 400.5 315.9 108.0 ↗ Increase in electricity production by RAO ES East Subgroup; ↗ Revenue increase on the back of tariffs and sales volume growth; RUB bn RUB bn
Slide 18: Operations on the wholesale electricity and capacity market
RusHydro’s operations on the wholesale electricity and capacity market Revenue by sector, RUB bn excl. VAT Key revenue drivers in 2018 1,286 • Production growth of HPPs. 1,249 • Spot market power price 1,189 119.2 increase in the first price zone. Average capacity price, RUB/MWh 1,166 113.4 6.2 Capa
Slide 19: Interim results of operating efficiency and cost reduction 2017-2018
Interim results of operating efficiency and cost reduction for 2017 – 2018 (1) Optimization measures Economic effect, RUB bn OPERATING EXPENSES 1 Optimization of SG&A expenses 4.4 3.1 (70.4%) 2 Optimization of specific repair and maintenance expenses 2.5 2.2 (89.7%) 3 Optimization of specific fuel e
Slide 20: Investment program for 2019-2023
RusHydro’s investment program for the period of 2019 – 2023, RUB bn (incl. VAT) The Group’s investment program for the period of 2019 - 2023 includes commissioning over 1.4 GW of new electric capacity, 565 Gcal/h of heat capacity as well as construction and modernization of over 130 km of heat and 7
Slide 21: Optimizing preparation of IFRS reporting
Optimizing preparation of IFRS reporting Better comparability. Accounting at initial cost better corresponds to practice, adopted in the Russian electric utilities industry. Increased predictability of financial results. The accounting model, based on assets Accounting of revaluation is sensitiv
Slide 22: Key factors of value growth; long-term tariff regulation in the East
RusHydro Key factors of RusHydro Group value growth Long-term tariff regulation in United Energy System of the East George Rizhinashvili Management Board member, First Deputy General Director
Slide 23: Overview of forward contract with VTB
Overview of forward contract with VTB RUB 55 bn 1 No mandatory buy-back of shares from VTB Bank by RusHydro (“put) 55 bn shares RusHydro Dividends paid to VTB will be netted against quarterly interest payments 5-year non-deliverable forward contract Potential additional income for RusHydro in case o
Slide 24: Key factors of RusHydro Group value growth plan
Key factors of RusHydro Group value growth plan (1) On October 27, 2017, the Board of Directors approved the value growth plan of RusHydro Group through 2021 and commissioned the Management Board to prepare necessary applications to the Government of the Russian Federation for organization of measur
Slide 25: Change of tariff formation in the Far East power system
Change of tariff formation in the Far East power system remains a strategic priority Order of the Deputy Chairman of the Government of the Russian Federation — Plenipotentiary Representative of the President of the Russian Federation in the Far Eastern Federal District of April 25, 2018: “To: Minist
Slide 26: Financial policy, corporate governance, divestment of non-core assets
RusHydro Financial policy and debt portfolio of RusHydro Group Corporate Governance Divestment of non-core assets Andrei Kazachenkov Management Board member, First Deputy General Director
Slide 27: RusHydro – a high credit quality company
RusHydro – a high credit quality company Accepted leverage limit set by the management is net debt/EBITDA of 2.0x (expected ratio as of 31.12.2018 – 1,2х(1)) Balanced and diversified debt structure (loans from banks, development institutions, domestic bonds and Eurobonds) 98% of the debt portfol
Slide 28: Debt portfolio structure and dynamics
Debt portfolio structure and dynamics As of 31.01.2019 Debt dynamics, RUB bn(1) 2.4 1.6 1.4 RusHydro Group’s total financial debt amount to RUB 1.1 226 bn 221.9 223.5 213.2 173.9 194.6 156.2 Average borrowing rate in local currency - 8% p.a.(3) 143.0 124.8 Average maturity - 2.7 years(3) Min
Slide 29: An active player on the international capital markets
RusHydro – an active player on the international capital markets In September 2017, RusHydro has returned to international capital markets and in 2018 the company had three successful placements – two denominated in rubles and a debut placement denominated in renminbi Successful placement of dim
Slide 30: Corporate governance and ratings
Corporate governance and ratings Rendering of Russian Corporate Governance Code, % (Central Bank of Russia method ) 92% 73% 8 63% Compeleted 49% Corporate governance rating Partially completed 38% 29% Not completed (the highest National Corporate 23% Governance Rating among 13% 8% 4% 4% 4% participa
Slide 31: Divestment of non-core assets
Divestment of non-core assets Divestment of non-core assets has attained a new level Results of activities Roadmap for upcoming periods 2018 2016-2018 18.7(1) 32 RUB bn. RUB bn. • In 2019 RusHydro divested its 40% share in VolgaHydro Revenue from divestment Revenue from divestment of non-core assets
Slide 32: IR contact details
Thomson Reuters Extel 2014: No.1 IR Team in Russian Utilities Best IRO, Russian Utilities Thomson Reuters Extel 2013: No.1 IR Team in Russian Utilities Best CFO, mid-cap (Russia), #1 Best IRO. mid-cap (Russia), #2 Best overall IR, mid-cap (Russia), #3 Thomson Reuters Extel 2012: No.1 IR