EDP Renewables SA · EURONEXT:EDPR
EDP Renewables SA — EDP Renováveis — Non-Deal Roadshow (May 2011)
48 slides from EDP Renewables SA's roadshow presentation, May 2011
Slide 1: Investor Presentation May 2011
Investor Presentation May, 2011 www.edprenovaveis.com
Slide 2: Key Messages
Key Messages A top wind A world class wind developer with a sound asset portfolio located in 11 countries developer and with distinctive core competences providing competitive advantages Attractive A portfolio set to deliver stable cash-flows for the long-term assets in operation on the back of a lo
Slide 3: EDPR: a global leading company in a growing sector
EDPR: a global leading company in a growing sector… 2010: Top wind players by installed capacity Installed Capacity Historic Growth (GW) (GW) 16 1Q11 14 12 6.7 +4.7x 10 5.5 8 6.9 4.4 6 3.0 4 6.7 1.4 2 0 Iberdrola NextEra EDP Longyuan Acciona 2006 (PF) 2007 2008 2009 2010 Renovables Renováveis EDPR b
Slide 4: Delivering robust EBITDA and Operating Cash-Flow growth
...delivering robust EBITDA and Operating Cash- Cash-Flow growth... EBITDA Operating Cash-Flow (Before Capex) (€m) (€m) CAGR CAGR 713 +28% 567 543 +39% 438 392 294 2008 2009 2010 2008 2009 2010 Invested capital in existing assets is returning higher Cash-Flows YoY 3
Slide 5: Sound and diversified portfolio in 11 countries
...with a sound and diversified portfolio in 11 countries Canada - - UK 100 US - Belgium Poland 3,224 - 1,300 57 130 99 France 13 60 19,013 Romania - 1,732 284 159 - Italy 69 Brazil Portugal Spain 649 613 - 14 838 2,158 - 58 92 70 991 497 4,687 1Q11 EBITDA MW + ENEOP 1,494 Installed 6,864 Under cons
Slide 6: Quality assets delivering stable top notch load factors
Quality assets delivering stable top notch load factors underlining portfolio’s superior profitability EDPR Load Factor: Historical Evolution EDPR 1Q11: Portfolio Diversification (1) (%) (MW) 30% 29% 29% Portugal 27% 27% France Belgium Poland Romania Spain PJM MISO WECC NYISO SPP ERCOT 2006 2007 200
Slide 7: Assets exposed to attractive economic frameworks with long-term visibility
EDPR’s assets are exposed to attractive economic frameworks with long- long-term visibility EDPR 1Q11: Capacity Breakdown 1Q11 Selling Price Market Dynamics (MW) (per MWh) Regulated Price visibility and stability granted by Frameworks €88 regulation and long-term contracts with local utilities 51% L
Slide 8: Young asset base with a long residual useful life
EDPR has a young asset base with a long residual useful life... Assets’ Average Age and Residual Useful Life EBITDA per MW (1) (Years; 2010) (€th) >130 Europe 3.3 129 127 US 2.0 EDPR 2.7 0 5 10 15 20 2008 2009 Long-term view on current assets ... set to deliver stable and recurrent EBITDA... Notes:
Slide 9: Returns from invested capital on existing assets
…and bear fruits from the invested capital already done on existing assets 1Q11 Invested Capital on Fixed Assets Capital Structure (€m) 11.2 -1.5 10% Tax Equity 9.3 -0.3 8.0 38% Net Debt 52% Equity PP&E (Gross) WIP Grants PP&E (Gross) PP&E (Net) Mar-11 Existing Assets Per MW (€m) 1.41 1.20 8
Slide 10: Funding strategy to support growth and portfolio risk management
Funding strategy to support growth and portfolio risk management 1Q11: Debt Profile Debt Maturity (%) (€m) 5 year maturity funding for 20% Genesa acquisition 3,000 EUR 52% 2,000 Fixed 91% 1,000 USD 41% Variable 9% PLN/BRL 8% 0 Type Currency 2011 2012 2013 2014 2015 2016 2017 >2018 Funding cost at 5.
Slide 11: 2011/12: EDPR to execute profitable growth
2011/12: EDPR to execute profitable growth 2011-12E Additions Quality assets, lower unitary capex and (EBITDA MW + ENEOP) higher Cash-Flow from operations 800-900 Executing projects 800-900 with secured top-line visibility Capital expenditures below €1bn/year 6.7 GW Funding needs to be covered by Ca
Slide 12: 2011-12 Investments: Strong visibility on value creation
2011- 2011-12 Investments: Strong visibility on value creation 2011-12E Additions by Region 2011-12E Additions by Country (%) (%) Portugal 19% • Feed-in tariff (15 years) Iberia • Feed-in tariff or 34% Spain 15% variable regime with collars (20 years) France • Feed-in tariff (15 years) Western 5% Be
Slide 13: EDPR has secured competitive turbines for 2011/12
EDPR has secured competitive turbines for 2011/12 Capex/MW (€m) Optimizing cost and selecting best technology 1.4 -10% Key decision drivers: 1.2-1.3 • Total cost of ownership • Best fit with EDPR’s pipeline to maximize Wind Farms’ output • Flexibility on time, geography and model 2009-10 2011-12E Co
Slide 14: 2012E: EBITDA higher than Capex
2012E: EBITDA higher than Capex Ongoing increase of Operating Cash- Cash-Flow 2008-12E: EBITDA vs Capex (% of EBITDA in total Capex) 100% EBITDA CAGR 2009-12 of 25% Total 50% 2011-12 Avg Capex below €1bn/year Capex EBITDA 2012E: For the first time EDPR generates more 21% 29% 51% ~90% >100% EBITDA th
Slide 15: Market view: Implicit market valuation vs. net invested capital
Market view: Implicit market valuation vs. Net invested capital on existing fixed assets Market’s implicit view on EDPR existing assets valuation (€bn) Per MW (€m) 1.19 1.20 8.5 0.6 7.9 8.0 0.9 3.3 Share price @ €4.78 0.1 4.2 Net Debt related Market Cap Minorities Net Debt Tax Equity EV to MW Under
Slide 16: EDPR: an attractive combination of value + growth
EDPR: an attractive combination of value + growth A global wind player with distinctive core competences to deliver profitable growth High quality asset base underlined by the increased Cash-Flow capabilities of operating assets 2011-12 new projects under visible and stable remuneration frameworks a
Slide 17: Case Study: Wind Farm Economics
Case Study: Wind Farm Economics
Slide 18: Wind business: development, construction and operating cash-cow
Wind business: competitive on development, capital intensive at construction and a cash- cash-cow during operating phase Development Cons- truction Funding Feed-in Feed-inTariffs PPA/ Pool Prices tariff / Green Certificates / PPA Operating & Maintenance Re-powering Option 0 5 10 15 20 years Early ph
Slide 19: Key areas to identify most profitable projects
4 key areas are critical to successfully identify most profitable projects and swiftly bring them to the ready- ready-to- to-build phase • Top-class wind resource assessment team with strong intrinsic knowledge Wind Assessment/ • Select best sites with high wind resource and adequate landscape Site
Slide 20: Competitive capex is critical to maximize projects profitability
Competitive capex is critical to maximize projects profitability Capex Breakdown (%, €m) Engineering Balance Electrical & Development Procurement & of Plant (BoP) Other Construction 20-30% Civil Works Transport • Optimize costs and select best turbine • Participate in the technology through • Strate
Slide 21: Different remuneration frameworks drive different revenues and cash-flow profiles
Different remuneration frameworks drive different revenues and Cash- Cash-Flow profiles during the operating phase Feed-inTariff Feed-in Premium with Collars price per MWh price per MWh Cap Floor Premium e.g.: Spain, Portugal, France e.g.: Spain (Market Option) 0 15/20yrs 0 20yrs Green Certificates
Slide 22: Wind generation is a high EBITDA margin business
Wind electricity generation is a high EBITDA margin business, with a high fixed cost structure Operating Expenses EDPR 2009-10: Operational Efficiency Metrics (%) 100% 2009 2010 G&A Structure and & Other corporate costs Taxes EBITDA margin 75% 75% Linked to revenues Leases & evolution Rents Insuranc
Slide 23: Earnings profile of a generic wind project
Case Study: Earnings profile of a generic wind project ILLUSTRATIVE, NON-EXAUSTIVE Earnings and Free Cash-Flow profile (Net Debt) / Net Cash (€th/MW) (€m/MW) Deleverage Period Debt paid in 9 years 180 Free Cash-Flow 2.0 160 1.5 140 1.0 120 100 0.5 80 0.0 60 -0.5 40 -1.0 20 Earnings Initial Leverage
Slide 24: Valuation model of a generic wind project
Case Study: Valuation model of a generic wind project Main Assumptions Terminal MW NCF Selling Price Capex Opex WACC CPI Value 1 28% €79/MWh €1.25m/MW €45k/MW 7.0% 2% 15% Valuation Model (illustrative, non-exhaustive) Years 0 1 2 3 ... 10 ... 20 21 Production (MWh) 2,365 2,365 2,365 ... 2,365 ... 2,
Slide 25: EDPR Markets and Regulation
be EDPR Markets and Regulation SS]
Slide 26: Top quality asset base spread among attractive markets
EDPR holds a top quality asset base spread among attractive markets… EDPR: Installed Capacity Breakdown EDPR: 2011/12 Growth (MW) (MW) Brazil West 0.2% West EU Portugal EU 12% 10% 5% CEE Portugal 4% 19% CEE Spain 29% 31% Spain US 47% 15% Brazil 4% US 24% ... being able to pursue the best investment
Slide 27: Europe: Markets with supportive regulatory frameworks
Europe: Markets with supportive regulatory frameworks EDPR: European assets overview Wind 2010 vs. Targets 2020 (1) (1Q11 MW) (Country GW) Spain 20.7 35.0 Under Review France 5.7 19.0 - PPA Green 57 MW Certificates UK 5.2 14.9 130 MW Feed-in Tariff Italy 5.8 12.0 284 MW Portugal 3.7 6.8 Feed-in Tari
Slide 28: Spain: Keeping an ambitious growth plan for Wind
Spain: Keeping an ambitious growth plan for Wind Spain: Wind Installed Capacity Market and Regulation Overview (GW) By 2012, wind installed capacity is expected to 35 reach 23.6 GW (capacity already awarded under the pre-registry process) 28 24 Existing regulation provides supportive and 21 attracti
Slide 29: Spain: new additions under the existing framework
Spain: EDPR’s new additions in Spain through 2012 to be under the existing framework EDPR 2011/12: Installed capacity evolution EDPR: Production breakdown by regime (EBITDA MW) (GWh; %) ~200 RD 661 21% 37% 1,005 100% 1,153 Transitory 79% Regime 63% Transitory RD661 RD661 Total Regime 1Q11 2Q-4Q11&12
Slide 30: Spain: existing remuneration schemes
Spain: existing remuneration schemes for Spanish wind farms (applicable to all wind farms to be built until 2012) Transitory Regime RD 661/2007 (only until 2012, RD 661/2007 afterwards) (applicable for 20 years lifetime of the project) (€/MWh) (€/MWh) Fixed Remuneration Variable Remuneration Final F
Slide 31: Spain: 1Q11 realized prices by regime
Spain: EDPR 1Q11 realized prices by regime Breakdown by Remuneration Pool + Premium Floor/Tariff 1Q11 Price (MW) (€/MWh) (€/MWh) (€/MWh) Hedges 2011: 1.6 TWh @ €44/MWh 0.4 TWh @ €35-55/MWh Transitory (collar) Regime 1,153 €43 + €38 €86 (until Dec-12) Hedges 2012: 0.9 TWh @ €51/MWh RD/661 €43 + €20 €
Slide 32: Spain: awarded MW and project pipeline
Spain: EDPR was awarded MW in the country’s best locations and has a large portfolio of projects available… available… Spain: Location of tenders won by EDPR EDPR’s Pipeline in Spain (MW) (MW) Asturias Galicia Cantabria 271 MW 3 MW 220 MW Aragon 1,994 (Pending) 2,024 2,693 2,693 420 249 Tier 1 Tier
Slide 33: Portugal: Market Overview
Portugal: Market Overview Portugal: 2011E Overview of Electricity System Costs Portugal: Wind Players (%) (%, Installed and Awarded Capacity) Other Other 10% 18% EDPR Co.9 2% 21% Transmission 6% Solar and Co.8 3% Wave Co.7 3% Biogas & Other Distribution 27% 6% 4% Co.6 4% 16% Co.1 Biomass 5% 5% Co.5
Slide 34: Portugal: Revenue visibility through feed-in tariff
Portugal: Revenues visibility through a inflation adjusted 15Y Feed- Feed-in Tariff with different starting prices EDPR: Remuneration Breakdown 1Q11 Tariff (MW) (€/MWh) Contract/Duration • Feed-in Tariff (15 years) indexed to inflation: bilateral contract with the last Wind farms licensed until reso
Slide 35: Portugal: Executing growth through 2012 under ENEOP
Portugal: Executing growth through 2012 under the ENEOP project EDPR: 40% stake @ ENEOP EDPR’s priorities through 2012 (Net MW) • Awarded 1.2 GW to Eólicas de Portugal Consortium (ENEOP) 480 • EDPR has a 40% stake 2006 183 Tender • Full consolidation post asset splitting after full commissioning 239
Slide 36: France: A mature market with a stable remuneration
France: A mature market with a stable remuneration EDPR: Installed Capacity Evolution (MW) Regulation +64 • Feed-in Tariff, stable for 15 years 284 • Updated to inflation type index • Price at €86/MWh (1Q11) +35 220 185 EDPR • EDPR currently has a pipeline of 649 MW in France • The company expects t
Slide 37: Poland: Mandatory renewable quotas and ambitious targets
Poland: Mandatory renewable quotas and ambitious targets Poland: Mandatory Renewable Green Quotas Target wind onshore capacity in the country (1) (%) (MW) 2010 Eligible Renewable 8.4% penetration 6,150 12.9% 11.9% 10.4% 3,540 Market share of 11% for 1,107 EDPR 2012 2015 2020 2010 2015 E 2020 E Polan
Slide 38: Poland: EDPR growth opportunities
Poland: EDPR has been developing its growth opportunities in a country with an attractive remuneration EDPR 1Q11: Footprint in Poland Regulation (MW) • Electricity price plus green certificate (GC) • 2010: electricity pool price @ €48/MWh plus green certificate @ €68/MW/h • Option to choose a regula
Slide 39: Romania: Young market with a supportive regulatory framework
Romania: Young market with a supportive regulatory framework… framework… Romania: Mandatory Renewable Green Quotas Target wind onshore capacity in the country (1) (%) (MW) 2010 Eligible Renewable 0.9% 4,000 penetration 20.0% 3,200 15.0% 12.0% Market share of 19% for 462 EDPR 2012 2015 2020 2010 2015
Slide 40: Romania: first MW installed in 2010
Romania: EDPR installed its first MW in the country in 2010… 2010… EDPR 1Q11: Footprint in Romania Legislation approved in 2010 (MW) • 2x green certificates (GC) per MWh until 2017 • GC Floor and Cap of €28 - €56 per MWh (inflation linked) 841 613 • Penalty of €110 per missing green certificate (inf
Slide 41: New markets: Italy and UK
New markets: New countries (Italy) and new technologies (UK) EDPR 2010 Remuneration Regulatory Updates • Transitory regime (WF with COD Pipeline of 991 MW up to 2012): green certificates until 2015; then feed-in tariff scheme (to Green Certificates be defined) Italy Installing the 1st MWs in 2011 €1
Slide 42: US: Large and diversified portfolio
US: EDPR has a large and diversified portfolio spread among regions with different wind resources and market profiles EDPR: US Installed Capacity Breakdown EDPR: Types of Remuneration in the US (1Q11, MW) (1Q11, % MW) MISO PJM • Average price of $50.4/MWh 769 ISO NE 401 WECC PPA • Average duration o
Slide 43: US: Two types of incentives for wind developers
US: The market provides the wind developers with two types of incentives Renewable Energy Porfolio Standards by State Tax Incentives available in the US PTC or Cash Grant WA VT ME ND • Projects installed before Dec. 12 MT MN NH i. PTC @ ~$21/MWh for first 10Years OR ID MA SD WI NY MI RI WY CT ii. Ca
Slide 44: US: Electricity spot prices pressured by low gas prices
US: Electricity spot prices have been pressured by low gas prices and electricity demand, but show signs of slight recovery US: spot prices and main market figures NYMEX gas price forward curves ($/MWh on-peak, $/MMBtu, TWh) ($/MMBtu) NYMEX Forward May-11 2008 2009 2010 ∆ 08-09 ∆ 09-10 9 NYMEX Forwa
Slide 45: US: Projects scheduled to be installed in 2011/12
US: EDPR has projects scheduled to be installed in 2011/12… EDPR US: 2011/12 Projects EDPR: Remuneration visibility for 2011/12 OH NY 99 MW ~200 MW • 99 MW 20-year PPA in Ohio already closed WA VT ME MT ND OR MN NH 2011 ID SD WI NY MA • Studying 100 MW in SPP with MI RI WY CT premium Load Factor and
Slide 46: Disclaimer
Disclaimer This presentation has been prepared by EDP Renováveis, S.A. (the "Company") solely for use at the presentation to be made on May 2011. By attending the meeting where this presentation is made, or by reading the presentation slides, you acknowledge and agree to be bound by the following li
Slide 47: IR Contacts
IR Contacts Rui Antunes, Head of IR Francisco Beirão Diogo Cabral E-mail: ir@edprenovaveis.com Phone: +34 914 238 402 Fax: +34 914 238 429 EDP Renováveis online Next Events 1H 2011 Results: 27 July 2011 Site: www.edprenovaveis.com Link Results & Presentations: www.edprenovaveis.com/investors 2010 An
Slide 48: edp renovaveis
edp renovaveis powered by nature