Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — FY2011 Earnings Presentation
43 slides from Edp's earnings presentation, Mar 9, 2012
Slide 1: Results Presentation 2011
Results Presentation 2011 LISBON, MARCH 9th, 2012 0
Slide 2: Disclaimer
Disclamer 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 9th of March 2012 and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where this p
Slide 3: 2011: Highlights of the period
2011: Highlights of the period EBITDA: €3,756m, +4% Sound growth based on a diversified portfolio International operations: 58% weight of EBITDA in 2011 (vs. 44% in 2006) Regulatory review 2012-14 for distribution in Portugal concluded in Dec-11 RoRAB increase from 8.5% to 9.5%, lower sensitivity of
Slide 4: 2011: Highlights of the period
2011: Highlights of the period Capex fell 19% from €2.7bn to €2.2bn with lower capacity additions in wind US Disposals program: €440m cash proceeds in 2011: Ampla and 14% of EDP Brasil Investments: €445m in 2011 on put options exercised by minorities (Genesa/Naturgas) + Jari Regulatory receivables:
Slide 5: EDP's Earnings Delivery to Shareholders: Against recent trend among European Integrated Utilities
EDP’s Earnings Delivery to Shareholders: Against recent trend among European Integrated Utilities EPS10: Actual data versus consensus on Jan-09 (1) EPS11: Actual data versus consensus on Jan-09 (2) (%) (%) EDP 10% CENTRICA 10% CENTRICA EDP 9% INT POWER SSE ENEL IBERDROLA SSE FORTUM EON ENEL FORTUM E
Slide 6: Electricity & Gas Demand in EDP's Key Markets
Electricity & Gas Demand in EDP’s Key Markets Brazil Iberian Market % Weight in Iberia n 2011 Electricity Electricity Demand Gas Demand 2011 vs. 2010 (YoY) 100% 17% 83% 100% 13% 87% +3.6% Iberian Iberian Market Portugal Spain Market Portugal Spain -0,6% -2,3% -2,1% -6,2% -7,0% -3,2% Brazil: growth d
Slide 7: 2011 Operating Headlines
2011 Operating Headlines Installed Capacity 2011 Generation Breakdown by Technology (GW) (%) (1) Wind Hydro CCGT Other +6% Other (1) CCGT 23.2 22.0 12% 21% 22% 26% 17% 16% 29% 32% 31% 33% 63% Hydro & Wind 29% 31% 62% Hydro & Wind 2010 2011 Installed capacity +1.2GW: +0.7GW wind, +0.5GW hydro Wind &
Slide 8: 2011 EBITDA: Increasing portfolio diversification
2011 EBITDA: Increasing portfolio diversification EBITDA Breakdown by Geography: 2011 vs. 2010 EBITDA Breakdown by Geography: 2011 vs. 2009 (%) (%) CAGR 2009-11 2010 2011 Var. % Var. Abs. Brazil +11% 16% 18% EDP Brasil 674 682 +1% +8 EDP Renov. 16% +21% 21% HC Energia 583 706 +21% +122 Spain 19% +4%
Slide 9: EBITDA 2011: 90% from LT Contracted Activities and Regulated activities
EBITDA 2011: 90% from LT Contracted Activities and Regulated activities EBITDA Breakdown by Activity (€ million) % Chg. YoY +4% €3,613m €3,756m Liberalized -13% 10% 12% Activities Iberia 18% Brazil 19% +1% 21% Wind Power +12% 20% 90% Regulated Networks 28% 25% +17% Iberia(1) LT Contracted 24% -6% 22
Slide 10: Cost of carry with pension & medical care responsibilities: Reclassification in 2011
Cost of carry with pension & medical care responsibilities in P&L: Reclassification in 2011 from operating to financial costs Employee Benefits – Defined Benefit Obligation Impact of reclassification in P&L lines: (€ million) (€ million) Interest Cost Expected return of the fund 2010 2011 Net Intere
Slide 11: Operating costs: Efficiency improvements with Opex/Gross Profit at 27% in 2011
Operating costs: Efficiency improvements with Opex/Gross Profit(2) at 27% in 2011 Operating costs (1) : 2011 vs. 2010 2011 YoY Inflation: (€m) (%) Brazil EDPR Iberia +2% 1,506 1,536 8,7% +12% 274 306 +14% 251 286 3,7% 3,2% 980 944 -4% (3) 2010 2011 Portugal Spain Brazil (IGP-M) Iberia: Operating cos
Slide 12: Capex: 19% decline YoY
Capex: 19% decline YoY Consolidated Capex(1) and EBITDA - 2006-2011 (€ billion) EBITDA Capex - Expansion Capex - Maintenance -19% 3.6 3.2 2.7 2.7 2.2 1.5 2006 2007 2008 2009 2010 2011 Installed Capacity (GW) 13.5 +9.8 GW 23.3 Lower capex in 2011 with reduction of wind power capacity additions in US
Slide 13: Net Regulatory Receivables by Dec-11
Net Regulatory Receivables by Dec-11 Regulatory Receivables (€ million) Regulatory Receivables Portugal(1): €1,130m (+€441m vs. Dec-10) Last resort supply: €753m (+€486m vs. Dec-10); €395m +€204m 1,647 generated in 2011 due to higher than expected power 1,443 procurement prices (€62/MWh real vs. €47
Slide 14: Change in Net debt
Change in Net debt Change in Net Debt: Dec-10 vs. Dec-11 (€ billion) Regulatory Regulatory Receivables Receivables 0,8 16.9 16.2 2,1 1,4 0,2 1,6 1,4 0,4 15.3 14,8 Net Debt Free Cash Flow (1) Chg. in Working Expansion Capex Net Financial Dividends Paid Net Debt Dec-10 Capital (2) Investments Dec-11 N
Slide 15: Net Profit up 4% YoY
Net Profit up 4% YoY (€ million) 2010 2011 ∆% ∆ Abs. Impact from longer useful life in wind farms (from 20 to 25 years) , higher provisions in 2010 EBITDA 3,613 3,756 +4% +143 Net Depreciations and 1,550 1,488 -4% -62 Provisions Cost of debt: 4.1% in 2011 vs. 3.5% in 2010 €58m impairment on financia
Slide 16: Business Areas
Business Areas
Slide 17: Long Term Contracted Generation Iberia (22% of EBITDA)
Long Term Contracted Generation Iberia (22% of EBITDA) EBITDA LT Contracted Generation Adjusted(1) EBITDA LT Contracted Generation (€ million) (€ million) PPA/CMEC Special regime PPA/CMEC Special regime -6% +4% 877 824 806 838 -3% -3% -6% +5% 2010 2011 2010 2011 PPA/CMEC: end of Carregado PPA (Dec-1
Slide 18: Liberalised Energy Activities Iberia (10% EBITDA)
Liberalised Energy Activities Iberia (10% EBITDA) EDP Liberalised Power Plants Iberia – Production EDP vs. Spain – Load factors in 2010-11 (TWh) (%) 2010 2011 -11% 17.1 15.2 Nuclear 7% 8% Hydro 14% 12% 42 Coal 25% 33 32 35% 21 CCGT 54% 45% 2010 2011 Coal CCGT Lower production due to lower utilizatio
Slide 19: Liberalised Energy Activities Iberia (10% EBITDA)
Liberalised Energy Activities Iberia (10% EBITDA) EBITDA Liberalised Activities in Iberian Market (€ million) -13% 449 393 2010 2011 Avg. Selling price(1) (€/MWh) 49.3 +17% 57.5 Avg. Sourcing cost (€/MWh) 39.4 +26% 49.7 Avg. Unit margin(2) (€/MWh) 10.6 -17% 8.8 Volumes sold (€/MWh) 49.2 -2% 48.0 13%
Slide 20: Regulated Energy Networks Iberia (28% of EBITDA)
Regulated Energy Networks Iberia (28% of EBITDA) EBITDA Adjusted EBITDA (1) (€ million) (€ million) Gas Iberia Gas Iberia Electricity Spain Electricity Spain Electricity Portugal Electricity Portugal +17% +4% 1,100 1,012 938 973 +11% +11% +34% +3% +16% +1% 2010 2011 2010 2011 Electricity Portugal: R
Slide 21: Regulated Energy Networks Iberia: Higher efficiency with improvement on quality of service
Regulated Energy Networks Iberia: Higher efficiency with improvement on quality of service Opex(1)/Network Km Opex(1)/Connected customers Equivalent Interruption Time(2) (€th) (€) (minutes) -10% -9% -35% 2,52 80 116 2,28 73 75 2010 2011 2010 2011 2010 2011 Key efficiency ratios improved 9% to 10% Yo
Slide 22: Commercial Activity Portugal: Control over bills collection
Commercial Activity Portugal: Control over bills collection Impairment for customers’ doubtful debts Overdue Debt from Customers (1) Average Collecting Period (net of reversal) (€m; %) (Days) (€m; %) Overdue Debt from Customers Impairment for customers’ doubtful debts (net of reversal) Overdue Debt
Slide 23: EDP Renováveis (21% of EBITDA): Strong growth driven by new installed capacity
EDP Renováveis (21% of EBITDA): Strong growth driven by new installed capacity Installed Capacity EBITDA (MW) (€ million) 2011 7.157 2011 801 YoY % Chg + 11% YoY % Chg + 12% 1% 1,7% 12% 12% 9% 35% 14% 48% 31% 37% Installed Capacity +0.7GW: Rest of Europe (+0.3GW), Spain (+0.2GW), US (+0.2GW), and Br
Slide 24: Brazil (18% of EBITDA)
Brazil (18% of EBITDA) EDP Brasil EBITDA EDP Brasil Adjusted(1) EBITDA Distribution: growth of electricity sold (BRL million) (BRL million) (% YoY) Generation & Other Distribution Generation & Other Distribution +1% +9% 5,9% 1,571 1,586 1,646 1,515 +13% +15% 2,7% 2,2% -9% +3% 0,6% 2010 2011 2010 201
Slide 25: Assets & Funding
Assets & Funding
Slide 26: Installed capacity: +88% between 2005 and 2011
Installed capacity: +88% between 2005 and 2011 EDP Group Capacity by Technology: 2005-2011 Average Residual Useful Life of (GW; %) EDP’s Generation Portfolio (Years) Hydro Wind % Chg. CCGT Other +88% 23.2 24 21% 16 16% 12.3 31% 40% 13% 63% 3% 31% 32% 44% 2005 2011 Dec-2005 Dec-2011 Installed capacit
Slide 27: EDP: Portfolio of assets with a long average residual life
EDP: Portfolio of assets with a long average residual life Average Residual Useful Life of EDP’s Generation Portfolio by Technology Dec-2011(1) (Years) Technology GW 3.4Y avg. age Concession of portfolio End Dates Hydro (33%) 7.2 37 Wind (32%) 7.2 22 25 years total asset life CCGT (17%) 3.7 21 Coal
Slide 28: Access to a diversified portfolio of funding sources
Access to a diversified portfolio of funding sources EDP Group - Sources of New Funding Raised in 2011 (%) TEIs in US EDP Brasil 4% 3% Public Bond Securitizations Issues 26% Spain & Portugal 19% 6% Retail Bond Commercial 8% Issues Paper 10% 8% Project Private Bond 8% 8% Finance Issues EIB Bank Loans
Slide 29: Net Debt Profile
Net Debt Profile EDP consolidated debt maturity profile EDP gross debt breakdown Debt by Currency (€ million) (%) (%) Commercial paper Short term PLN Other subsidiaries(1) Medium/Long Term USD 1% EDP SA + BV Avg. Debt Maturity 20% Brazil: € 191 M Project Finance: €117 M Dec-11: 4.4 years 8% BRL 71%
Slide 30: EDP Financial Liquidity
EDP Financial Liquidity Sources of liquidity (Dec-11) EDP’s Financial Liquidity adjusted for CTG partnership (€ million) (€bn) Maximum Number of €0.8bn CTG investment Instrument Amount counterparties Available Maturity €2bn facility from Chinese CTG Investment (1) financial institution 8,1 8,0 Revol
Slide 31: Main sources and uses of funds
Main sources and uses of funds Sources of funds Use of funds Refinancing needs in 2012: Bond maturing in Jun-12: €0.5bn Cash & Equivalents (Dec-11): €1.7bn Bond maturing in Aug-12: €0.35bn Available Credit Lines (Dec-11): €2.4bn Bond maturing in Nov-12: €0.8bn Loans maturing in 2012: €0.4bn Total: €
Slide 32: Perception of EDP's Credit Profile
Perception of EDP’s Credit Profile Specificities of EDP’s credit profile S&P Fitch Moody's Geographically diversified business: 58% of 2011 EBITDA AAA AAA Aaa from outside of Portugal AA+ AA+ Aa1 High quality generation fleet: 2/3 hydro & wind, 24-year AA (2) AA Aa2 avg. residual life, low CO2 expos
Slide 33: Financial Leverage: Consistent with low operating risk and long asset maturity
Financial Leverage: Consistent with low operating risk and long asset maturity European Utilities: 2010 Net Debt/EBITDA vs. Business Mix (1) (x;%) 6,0 REN/REE 5,0 A2A Debt/ EBITDA 2010 Terna 4,0 Gas Natural Snam/ Enagas National Grid Enel Verbund SSE Fortum Iberdrola 3,0 Net Debt Int. Power 2015E 2,
Slide 34: Outlook
Outlook
Slide 35: Regulatory Update in Portugal
Regulatory Update in Portugal Regulated revenues 2012: €1,380m (+€71m YoY) based on 9.5% Estimated Rate of return Distribution Oct-11 to date avg. Port. Repub. 5Y CDS (1,105 bps) implies a rate of return of 10.3% (+€25m) Regulated Demand in Jan/Feb down ~4% YoY: 12% (vs. 40% in the previous regulato
Slide 36: Update on energy sector measures set in the MoU with IMF/EC/ECB
Update on energy sector measures set in the MoU with IMF/EC/ECB Text of 1st MoU with IMF/EC/ECB (May-2011) Current Status “Government will eliminate (…) special rights established by law or in the statutes of publicly quoted companies” Law changed in Jul-11, EDP’s statutes changes by shareholder mee
Slide 37: Liberalised activities in Iberian Energy Market: 2012 Outlook
Liberalised activities in Iberian Energy Market: 2012 Outlook Iberia – Energy Demand YoY Growth, Jan/Feb-12(1) Iberia – Hydro reserves (as of Feb 29th) (%) (%) Real 2008 2009 2010 2011 2012 Adjusted 1,9% 2,4% 95% -2,5% -1,9% 53% 49% 45% -6,2% 34% Electricity Electricity Gas Portugal Spain Spain Port
Slide 38: Liberalised Activities: Outlook for 2012
Liberalised Activities: Outlook for 2012 EDP: Forward Contracting – 2012 Coal & Gas sourcing Commitments Wholesale & Retail Markets(1) ~20TWhe ~18TWhe 100% ~80% Committed Committed Coal Gas Electricity Sales Gas Sales Expected output from coal plants fully contracted 80% of gas sourcing commitments
Slide 39: 2012 Capex expected at ~€2.0bn, down 8% YoY
2012 Capex expected at ~€2.0bn, down 8% YoY Capex 2011-12E (€ bn) Capex - Expansion Capex - Maintenance EDP Brasil: Pecém coal plant (360MW) to be fully operational in 2012 and Jari hydropower plant (373MW) to start operations in 2015 2.2 2.0 Hydro investment in Portugal: 1,710MW under construction
Slide 40: Partnership with CTG: closing pending administrative procedures
Partnership with CTG: closing pending administrative procedures by the People’s Republic of China Authorities 2012 2013 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Expected Dates 1. Notice for Shareholder Meeting 2. Shareholder Meeting (approval of Supervisory Board member lists (1)) Calendar 3. Regulatory approv
Slide 41: 2012E EBITDA Breakdown: Long Term Contracted or Regulated
2012E EBITDA Breakdown Liberalized Activities New Hydro Capacity: +437MW in place for full-year; +256MW in place as from 2H12 9% Iberia Forward contracting: 20TWh of sales to clients; ~100% of expected coal output and ~80% of gas commitments with spreads-locked-in Brazil 20% Generation: Start-up of
Slide 42: A resilient business model in a challenging environment
A resilient business model in a challenging environment EBITDA +4% (operations out of Portugal represented c60% of EBITDA) Sound Operating Cost of debt 4.1% in 2011 Performance Net Profit/EPS: +4% Total Installed capacity by Dec-11: +6% YoY (wind power capacity +11%) Growth Selective Growth: Capacit
Slide 43: IR Contacts
IR Contacts Miguel Viana, Head of IR Sónia Pimpão Elisabete Ferreira Ricardo Farinha Pedro Coelhas Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Visit EDP Website Next Events Site: www.edp.pt March 12th-13th – EEI Conference London Link Results & Presentations: March 14th – Roadshow Paris htt
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