Naturgy Energy Group, S.a. · BME:NTGY
Naturgy Energy — Gas Natural Fenosa — H1 2012 Earnings Presentation
35 slides from Naturgy Energy's earnings presentation, Jul 24, 2012
Slide 1: First Half 2012 Results
First Half 2012 Results July 24, 2012
Slide 2: Disclaimer
Disclaimer This document may contain market assumptions, different sourced information and forward-looking statements with respect to the financial condition, results of operations, business, strategy and the plans of Gas Natural SDG, S.A. and its subsidiaries (GAS NATURAL FENOSA). Such assumptions,
Slide 3: Agenda
Agenda 1. Highlights 2. Growth of international operations 3. Financials 4. Analysis of operations 5. Conclusions 3
Slide 4: Highlights
Highlights 4
Slide 5: Key financial indicators
Key financial indicators Net income 1H12: €767 million (-6.7%) (adjusted net income 1H12: +24.3%) EBITDA 1H12: €2,559 million (+7.3%)1 Investments2 1H12: €535 million (+3.3%) Net debt as of 30/06/12: €16.9 billion (-2.3%)3 Notes: 1 EBITDA +10.0% on a like for like basis disregarding disposals made i
Slide 6: Shareholder remuneration
Shareholder remuneration Total dividend (€ million) Attractive shareholder remuneration policy in line with +10.7% 821 targets for 2010-2014 Strategic 742 Plan, with a 2011 payout of 62% and a yield of 6.2%2 +10.5% Scrip1 461 418 Cash interim dividend paid on 09/01/12 and scrip dividend +10.9% execu
Slide 7: Spanish regulatory issues
Spanish regulatory issues Measures approved by the Ministry Royal Decree Law 1/2012 Temporary suspension of financial incentives for new facilities under the Special Regime (renewables and co-generation) not yet registered under the pre-filings Royal Decree Law 13/2012 Tariff increase (+€1,392 milli
Slide 8: Spanish regulatory issues
Spanish regulatory issues Electricity system costs (after RDL 13/2012) (€ million/year) Transportation 1,500 8.1% Special regime a 7,600 Photovoltaic 2,400 Distribution 5,000 27.0% Solar thermal 1,300 Wind 1,800 Cogeneration 1,200 Capacity payments (1) (850) Rest 900 Extrapeninsular b 1,900 Subsidie
Slide 9: Growth of international operations
Growth of international operations 9
Slide 10: A higher share from international operations (I)
A higher share from international operations (I) Geographical breakdown EBITDA from international of 1H12 EBITDA operations EBITDA: € 2,559 million EBITDA: € 1,079 million 6% 4% Spain International 58% 42% 33% 57% LatAm Gas (infrastructures & supply) Distribution Europe Rest International operations
Slide 11: A higher share from international operations (II)
A higher share from international operations (II) EBITDA from international operations (€ million) ● Gas wholesale operations in foreign markets enjoy a +31.6% 1,079 continuous and healthy expansion 820 ● Latin American activities continue to maintain a robust and sustained growth 1H11 1H12 The soli
Slide 12: International gas sales maintain growing trend
International gas sales maintain growing trend Foreign sales (GWh) International gas sales +44.5% 47,486 representing ~30% of total Continuous increase in non- 32,863 European sales (Americas, +59.6% 33,611 Asia) 21,066 Successful expansion of +17.6% commercial operations in 11,797 13,875 Europe (Fr
Slide 13: Future developments of international gas wholesales
Future developments of international gas wholesales ● GNF’s balanced and consolidated position in the world’s LNG markets helps maximize the value of its gas procurement contracts ● Balanced presence in Atlantic and Pacific basins (50/50) ● Operating flexibility enables to optimize exposure to most
Slide 14: Latin America (I)
Latin America (I) Gas distribution Gas sales (GWh) Connection points (000) 93,332 +6.9% 99,726 5,762 +3.9% 5,985 +1.1% +4.1% 23,951 1,279 1,229 23,686 -0.7% 8,528 8,584 +5.0% 2,234 2,346 +20.8% 29,282 24,245 +3.3% 826 853 +3.1% +2.3% 36,817 37,965 1,473 1,507 1H11 1H12 1H11 1H12 Argentina Brazil Col
Slide 15: Latin America (II)
Latin America (II) Electricity distribution Electricity sales (GWh) Connection points (000) +6.4% 8,783 3,509 +3.6% 3,635 8,254 +4,6% +4.4% 1,350 832 869 1,291 +9,3% +3.7% 2,017 482 500 1,844 +5.8% +3.2% 5,416 2,195 2,266 5,119 1H11 1H12 1H11 1H12 Colombia Panama Nicaragua EBITDA grows +32.1% to €18
Slide 16: Financials
Financials 16
Slide 17: Consolidated income statement
Consolidated income statement (€ million) 1H12 1H11 Change % Net sales 12,439 10,205 21.9 Purchases (8,639) (6,684) 29.2 Gross Margin 3,800 3,521 7.9 Personnel, Net (423) (438) (3.4) Other expenses, Net (818) (697) 17.4 EBITDA 2,559 2,386 7.3 Depreciation (890) (869) 2.4 Provisions (107) (86) 24.4 O
Slide 18: EBITDA breakdown
EBITDA breakdown Change (€ million) 1H12 1H11 €m % Distribution Europe: 822 865 -43 -5.0 Electricity 325 364 -39 -10.7 Gas 497 501 -4 -0.8 Electricity: 457 467 -10 -2.1 Spain 370 390 -20 -5.1 Special Regime 81 70 11 15.7 Other 6 7 -1 -14.3 Gas: 646 424 222 52.4 Infrastructures 152 117 35 29.9 Supply
Slide 19: Consolidated investments
Consolidated investments Tangible and intangible (€ million) 1H12 1H11 250 230 By geography Distribution Europe: Electricity 125 107 International Spain Gas 125 123 33% Electricity: 80 94 67% Spain 62 82 Special Regime 18 12 Gas: 24 24 Infrastructures 17 18 Supply 7 6 LatAm: 141 121 Generation 32 24
Slide 20: Securitisation of tariff deficit
Securitisation of tariff deficit Tariff deficit amounts for GNF (€ million) 1,231 551 386 1,067 Pending securitisation as Securitised and collected Deficit for 1H12 Pending securitisation as of 31/12/11 of 30/06/12 ● €367 million collected by GNF through several private placements carried out by FAD
Slide 21: Ongoing debt reduction
Ongoing debt reduction Evolution of net debt since acquisition of Unión Fenosa Net debt (€ billion) 26 ● All of the commitments ~20 have been fulfilled 2012 Target (asset sales, capital ~15-16 increase, refinancing) ● €9.1 billion debt reduction to date ● Positive structural free cash flow should en
Slide 22: An efficient net debt structure
An efficient net debt structure Significant level of fixed rate obtained at Currency exposure consistent with very competitive levels business risk 7% 11% 25% Euro Fixed US$ Floating 75% 82% Other Diversified financing sources 31% Capital markets 59%1 Bank loans Institutional banks 10% Efficiency of
Slide 23: A comfortable debt maturity profile
A comfortable debt maturity profile Net debt: €16.9 billion (€ million) 9,203 3,786 2,485 853 612 2012 2013 2014 2015 2016+ (1) Average life of debt ~5 years 77% of net debt maturing from 2015 onwards All financial needs for 2012 and 2013 already covered, currently focusing on 2014 and 2015 Note: 1
Slide 24: Ample liquidity available
Ample liquidity available As of June 30, 2012 (€ million) Limit Drawn Undrawn Committed lines of credit 4,892 667 4,226 Uncommitted lines of credit 214 79 135 Undrawn loan 150 - 150 Cash - - 4,330 TOTAL 5,256 745 8,841 Enough liquidity available to cover needs exceeding 24 months Available additiona
Slide 25: Analysis of operations
Analysis of operations 25
Slide 26: Distribution Europe: Electricity
Distribution Europe Electricity Investments TIEPI1 (Spain) Sales (€ million) (minutes) (GWh) +0.3% +16.8% 1H11 1H12 18,567 18,621 107 125 20 15 -25.0% 1H11 1H12 1H11 1H12 A well-focused investment policy leads to an enhancement of service quality parameters Higher operating efficiency mitigates effe
Slide 27: Distribution Europe: Gas
Distribution Europe Gas Investments1 Connection Sales (€ million) points2 (GWh) (thousands) +1.6% -1.5% 123 125 30/06/11 30/06/12 109,644 108,028 5,432 5,524 +1.7% 1H11 1H12 1H11 1H12 No impact on gas distribution from recent regulatory measures in Spain Investments focused on efficient network expa
Slide 28: Energy: Gas and electricity demand in Spain
Energy Gas and electricity demand in Spain Conventional gas demand Electricity demand (GWh) (GWh) +7.2% -0.1% 126,399 126,273 138,427 148,347 1H11 1H12 1H11 1H12 Source: Enagas Source: REE Growing demand from both industrial and residential segments lead to higher gas sales in 1H12 28
Slide 29: Energy: Electricity in Spain
Energy Electricity in Spain GNF’s total production (GWh) 19,250 -2.7% 18,721 1,388 1,249 782 (+11.1%) (-66.9%) 2,363 2,081 (+3.0%) 2,020 10,554 (-14.3%) 12,315 3,916 1,305 (+200.1%) 1H11 1H12 CCGTs Coal Nuclear Hydro Special Regime Higher production from coal offsets lower production from CCGT and h
Slide 30: Energy: Special Regime
Energy Special Regime Total production (GWh) +11.1% Higher wind production after recent 139 MW net capacity increase in 1,388 2012 1,249 +9.5% 230 210 -20.6% 135 Lower rainfall in 1H12 vs 1H11 lead 170 to a drop in small hydro production +17.7% 1,023 Continuing development of wind- 869 powered capac
Slide 31: Energy: Gas supply Spain
Energy Gas supply Spain Gas supply (GWh) 120,547 +4.5% 125,920 Higher demand in 1H12 -7.2% underpinned both by residential 26,608 28,677 and industrial segments +16.4% 20,201 17,361 Growth in customer portfolio with 50% end customer share +6.2% 74,509 79,112 Higher activity of own CCGTs mitigate dro
Slide 32: Energy: UF Gas
Energy UF Gas Gas Supply1 (GWh) Infrastructures1 (GWh) +11.1% 47,445 -36.2% 30,275 44,517 40,065 +19.4% -30.7% 14,898 23,146 12,473 16,031 +7.3% -41.4% 27,592 29,619 24,299 14,244 1H11 1H12 1H11 1H12 Spain International Liquefaction Regasification EBITDA2 (supply and infrastructures) grows 27.2% to
Slide 33: Conclusions
Conclusions 33
Slide 34: Conclusions
Conclusions EBITDA grows +7.3% despite asset disposals and regulatory changes Adjusted net income grows +24.3% (reported net income -6.7%) Net debt decreases to €16.9 billion1 Continuity of an attractive shareholder remuneration policy: +10.7% increase in 2011 plus the option of a scrip for final di
Slide 35: Thank you
Thank you INVESTOR RELATIONS telf. 34 934 025 897 fax 34 934 025 896 e-mail: relinversor@gasnaturalfenosa.com website: www.gasnaturalfenosa.com 35