Edp S.a. · EURONEXT:EDP
Edp — Debt Investor Presentation (November 2021)
22 slides from Edp's debt investor presentation, November 2021
Slide 1: Credit Investors Presentation
Credit Investors Presentation Lisbon, November 2021
Slide 2: Committed to continue to lead the Energy Transition
We have started this journey in Renewables over 2 decades ago and are committed to continue to lead the Energy Transition By 2025 By 2030 €24 Bn >50 GW CAPEX in energy transition renewables additions Leading the energy transition to create superior value 4 GW/yr 100% renewables deployed renewables g
Slide 3: We will grow our presence across technologies, with differentiating value propositions
We will grow our presence across technologies, with differentiating value propositions Strong visibility Hydro Global leadership Extensive pipeline with additions Top 4 global player ramping up quickly Differentiation Mostly maintenance investments Solar Cost competitiveness Capture repowering, hybr
Slide 4: We have +8.1 GW capacity additions secured evenly split per geography
We have +8.1 GW capacity additions secured (41%) evenly split per geography 3.1 2.3 North America Europe GW GW 36% secured 33% secured 1.5 GW 1.6 GW 0.2 GW 6.7 1.3 GW 0.7 GW 0.3 GW post 2025 8.8 20 GW1 Gross Additions 0.5 GW post 2025 2021-25 1.4 0.7 LatAm 1.9 2.9 APAC GW GW 65% secured 48% secured
Slide 5: We will deliver unparalleled investment levels fully aligned with the energy transition
We will deliver unparalleled investment levels fully aligned with the energy transition Significant investment … with strong focus on Renewables, across key acceleration… markets in Europe and North America CAPEX1, € Bn/yr CAPEX1, Cumulative, € Bn, 2021-25 +65% 4.8 ~80% ~40% Renewables Europe ~15% ~
Slide 6: Step-up in growth and shareholder remuneration funded through diversified sources of cash
Our financials Our strong step-up in growth and attractive shareholder remuneration will be funded through diversified sources of cash 2021-25. € Bn Uses of cash Sources of cash 28 Dividends 4 Organic cash flow 12 (excluding maintenance) EDPR capital increase and/or additional CAPEX1 24 Asset rotati
Slide 7: EDP has secured 8.1 GW whilst maintaining a sound investment approach
EDP has secured 8.1 GW whilst maintaining a sound investment approach Continued accelerated growth in renewables… … maintaining a selective and disciplined investment approach +2.5 GW of Wind & Solar Gross capacity (1) Strong execution added over the last 12 months Target Actual on capacity deployme
Slide 8: With Sunseap, we set up a 4th regional hub in APAC
With Sunseap, we set up a 4th regional hub, a platform for long term growth in APAC, becoming a true global clean energy player Global presence through EDPR’s installed … with a focus on accelerated and diversified growth capacity(1)… Europe APAC By Geography… Asia 6.3 GW 0.5 9% GW 24% North America
Slide 9: Asset rotation execution has been strong with €2.6bn of proceeds secured
Asset rotation execution has been strong with €2.6bn of proceeds secured at attractive multiples and €0.15bn(1) gains already booked Accelerated & Strong AR execution at attractive multiples, showcasing the value of EDPR projects sustainable growth EV/MW 1.7 1.25 1.6 €2.6bn of proceeds, ~33% €m of €
Slide 10: Regulatory framework in Portugal provides stable prices and system debt decline
Despite higher wholesale prices, regulatory framework in Portugal provides stable prices for residentials and continuous system debt decline End-users Regulated Electricity Tariff Portugal Electricity System Debt €/MWh; Low-voltage clients (residentials & SMEs) € Bn +0.2% 3.5 -50% Wholesale price 39
Slide 11: Developments in Brazil's portfolio reshuffling provide value crystallization
Significant developments in Brazil’s portfolio reshuffling provide value crystallization and improve growth prospects Transmission Asset Rotation Strategy Celg-T region (Goiás) with strong electricity demand growth, requiring significant transmission investments Acquisition Asset Rotation Celg-T Act
Slide 12: Fully committed towards sustaining a solid investment grade rating (BBB)
Accelerated and sustainable growth We are fully committed towards sustaining a solid investment grade rating (BBB) We are targeting a solid balance … maintaining a sustainable leverage sheet… FFO/Net Debt1 Achieved BBB rating from S&P (March-21) and Fitch (May-21) ~20% ~21% ~19% Positive outlook fro
Slide 13: Funding primarily raised at Holding level, enhancing efficient debt management
Funding Policy Funding primarily raised at Holding level, enhancing efficient debt management EDP Consolidated net Sources of debt funding debt position at 9M21 9M21, % € Bn 12.1 Commercial paper Capital Markets – 89% EDP Brasil 11% Ring-fenced policy 3% DCM – Green “Non-recourse” to EDP 44% Loans a
Slide 14: Since 2018, EDP has issued EUR 6.4b in Green Bonds
Funding Policy Since 2018, EDP has issued EUR 6.4b in Green Bonds, in line with EDP’s sustainability strategy EDP’s green bond issuances EUR 8.2bn EUR 1.8bn Oct.2018: Total capacity Capacity left EUR 600m 1.875% 7Y Green Bond (1st Green issuance) @ YE2020 Jan.2019: We expect capacity to progressivel
Slide 15: EDP's funding portfolio will increasingly reflect its commitment to sustainability
Funding Policy EDP’s funding portfolio will increasingly reflect its commitment to sustainability Share of sustainable funding > € 6bn already placed in Green Bond format, aligned with our Sustainability Strategy +11% Continued investment in Renewables and sustainable activities 50% 2025 50% Leverag
Slide 16: EDP's Green Bond Framework (2018)
EDP’s Green Bond Framework (2018) Use of Proceeds Project Evaluation & Management of Reporting Selection proceeds Eligible Green Projects include: EDP’s Finance and Sustainability Net proceeds of green bonds issued An annual report is published, teams, jointly with EDPR by EDP are managed on a portf
Slide 17: EDP actively manages interest rate and Forex risks
Funding Policy EDP actively manages interest rate and Forex risks within existing risk policies Debt by Interest Rate type, %1 Avg nominal debt by currency 1 (%) (%) Fixed Rate > 55% Other 0.3% 1% Floating USD < 20% 10% 12% 29% Floating EUR < 50% 34% 31% Fixed Floating 71% 57% 56% FX Policy Prioriti
Slide 18: Continued reduction in average cost of debt
Funding Policy Continued reduction in average cost of debt as we continue to actively manage our debt to benefit from a low rates environment Green bonds EDP average Cost of Debt evolution Bonds issued Amount Coupon Maturity Fixed Rate > 55% Jan-21 (hybrid) €750m 1.875% 2081 Forecast considers Sep-2
Slide 19: Annexes
Annexes
Slide 20: Prudent financial policy with centralized management, supporting solid investment grade rating
Our financials We have a prudent financial policy with a centralized management, supporting a solid investment grade rating Rating Green Active debt Centralized and Interest and Cost of debt financing and liquidity diversified foreign exchange management funding risks Target BBB rating in Prioritize
Slide 21: Strategic commitments on track as we step up to the challenge
Strategic commitments on track as we step up to the challenge to deliver superior value creation Key figures and targets 9M21 €24 Bn CAPEX in energy transition(1) €2.7 Bn (95% in RES + Networks) 8.1GW secured (41%) with 3.9 GW added 20 GW gross additions(1) YTD+U/C €8 Bn asset rotation ~€2.6 Bn sign
Slide 22: We will deliver superior value to our shareholders
We will deliver superior value to our shareholders Superior green positioning and … delivering strong earnings growth… accelerated growth… Net income2, € Bn 8% p.a. All green ~1.2 2x by 2030 ~0.8 ~1.0 solar + wind installed capacity by 2025 >95% 20202 2023 2025 €24 Bn energy transition investment en