EDP Renewables SA · EURONEXT:EDPR
EDP Renewables SA — EDP Renováveis — Q1 2024 Earnings Presentation
30 slides from EDP Renewables SA's earnings presentation, May 9, 2024
Slide 1: 1Q24 Results Presentation
1Q24 Results Picture Presentation May 9th, 2024 15:00 CET | 14:00 UK / Lisbon www.edpr.com Central Fotovoltaica da Cerca Portugal
Slide 2: Agenda
Agenda 1 1Q24 results 2 Update on Strategy Execution 3 Closing Remarks 4 Annex 2
Slide 3: 1Q24 Results
1Q24 Results
Slide 4: 1Q24 Main Highlights
1Q24 marked by a recovery of capacity installations and generation volumes, impacted by lower electricity prices in Europe 1Q24 Main Highlights Financial Performance • Capacity additions: +0.5 GW following the normalization in solar supply chain 1Q24 in US, with 100% of solar panels for 2024 already
Slide 5: EBITDA +1% YoY impacted by lower electricity prices in Europe
EBITDA +1% YoY impacted by lower electricity prices in Europe and lower generation, offset by lower costs and Asset Rotation Gains EBITDA per region (€m) 1Q23 1Q24 YoY YoY Installed Capacity(1) GW 14.8 16.5 +12% +1% 454 Electricity Generation TWh 10.2 9.9 -3% 448 Europe TWh 3.5 3.6 +3% North America
Slide 6: Financial Results -14% YoY
Financial Results -14% YoY driven by $/€ rebalancing and efficient capitalizations despite higher gross debt Financial Results (€m) -14% 126 Financial results -14% YoY impacted by $/€ rebalancing and 108 efficient capitalizations despite higher gross debt (+€0.3bn) Cost of debt flat YoY with lower c
Slide 7: Net Debt at €6.7bn driven by Net Expansion Investments
Net Debt at €6.7bn driven by Net Expansion Investments of €0.9bn Net Debt Chg. Dec-23 to Mar-24 (€bn) €1.2bn Expansion Capex offset by €0.3bn AR Proceeds net of gains +€0.9bn YTD 0.05 0.9 0.5 0.1 0.2 0.1 6.7 5.8 Net Debt EBITDA Non-Cash Items Interest Cost Change in WC & Net Expansion Forex & Others
Slide 8: Net Profit of €68m: EBITDA to Net Profit
Net Profit of €68m strongly impacted by top line, compensated by improved financials and lower minorities 1Q24 EBITDA to Net Profit (€m) YoY EBITDA 454 Lower prices in Europe offset by Asset rotation +€6m gains of €58m in 1Q24 (1) D&A (195) (€13m) On the back of capacity additions EBIT 259 (€7m) Fin
Slide 9: Update on Strategy Execution
Update on Strategy Execution
Slide 10: High quality 100% renewables portfolio, well diversified and LT contracted
High quality 100% renewables portfolio mostly wind onshore, well diversified primarily across Europe & North America and LT contracted Diversified portfolio with a solid generation profile Capacity by geography Generation by technology Focus on low risk markets: 87% of asset base in Europe & North A
Slide 11: Renewable energy growth continues to be backed by increasing demand
Renewable energy growth continues to be backed by increasing demand worldwide Regulated auctions Continuous support Supportive demand Introduction of environment and to reach EU targets from cPPAs driven by social criteria on top of pricing by 2030 sustainability targets Growing 45 GW in EDPR countr
Slide 12: Market context changed, recalibration of 2025-2026 investment targets
Market context rapidly changed in the L12M, leading to a recalibration of 2025-2026 investment targets presented to the market in March 2023 Impact 24-26E Decline of Forward Net investment targets preserving a -€3bn Electricity Prices in Europe sound balance sheet vs. BP23-26 Investments Higher inte
Slide 13: Addressed 2023 deployment challenges in US solar and Colombia wind
Addressed 2023 deployment challenges with a clear improved positioning on US solar supply chain, while actively managing Colombia wind projects Improved positioning regarding US solar supply chain Reviewing viability of 0.5 GW wind projects in Colombia EDPR worked on several fronts to improve the ou
Slide 14: Capacity additions of ~3 GW/year in 2025-26
Support value creation while reviewing additions to avg. ~3 GW/ year in 2025-26 with 84% in Europe and NA on the back of a robust pipeline… Walk 2023-26 Gross Capacity Additions (GW) 2024-26 Breakdown By Geography 7 GW 8% Secured capacity ~3 ~10 ~12 42% 8% ~10 GW 2.6 4.0 42% By Technology 0.5 2.5 9%
Slide 15: Strong demand for renewables PPAs from Big Tech
… with strong demand for renewables PPAs mainly from the Big Tech sector, driven by Data Centers/AI, and from regulated auctions in Europe… High visibility for Capacity to be Secured with ~1 GW of Breakdown of Capacity Secured by type capacity under negotiation worldwide ~70% with Big Tech companies
Slide 16: Stricter investment approach for upcoming investment decisions
… under a stricter investment approach for upcoming investment decisions keeping the focus on strong contracted cash yields Investment approvals over the last 6 months continue Stricter investment approach increasing our target for supporting value creation from growth in renewables future portfolio
Slide 17: Asset rotation strategy supporting a fully funded plan through 2026
Asset rotation strategy supporting a fully funded plan through 2026 Gross Investments 2024-26 AR Proceeds 2024-26 Net Investments 2024-26 (€bn) (€bn) (€bn) % Gross MW Additions 30% 45% ~6%~7% Gross OW & Other €m Investments ~12 ~16% Fin. Inv. AR 469 ~300 ~47% ~12bn Gains Asset Rotation(2) ~5 ~25% 1.
Slide 18: Generation growing at 13% CAGR, >70% contracted
Generation growing at 13% CAGR maintaining a competitive portfolio >70% contracted & protected against wholesale price volatility Expected generation split by contracting profile (status as of today; %; TWh) Merchant Generation 40-42 47-49 50-52 - Wind generation represents ~90% - Volumes mix: ~50%
Slide 19: Continue to improve efficiency to reduce unitary Core OPEX
Continue to improve efficiency in operations to reduce unitary Core OPEX Core OPEX(1)/ Avg. MW Cost strategy set to maximize efficiency and optimize costs (€k) -6% Continue with structure simplification to leverage on CAGR 2023-26 EDP & EDPR synergies 52 - O&M focused on increasing availability and
Slide 20: Cash ROIC growth in 2024-26
Cash ROIC growth in 2024-26 supported by investing through the cycle in projects with higher absolute returns Asset Base Evolution; Weight of assets under development vs assets in operation Peak of work-in-progress weight as of Dec-23 impacted by: i) Longer than expected construction periods to Asse
Slide 21: Updating Guidance for 2024-2026
Updating Guidance for 2024-2026 in current market context 2023 2024E 2026E CAGR 23-26 Generation 35 40 - 42 50-52 +13% TWh Avg. Selling Price 61 53 - 54 ~50 -7% €/MWh Asset Rotation Gains 0.5 ~0.3 ~0.3 €bn Recurring EBITDA 1.85 ~1.9 ~2.4 €bn +9% +15% w/o AR Gains Recurring Net Income 0.5 ~0.4 ~0.7 +
Slide 22: Closing Remarks
Closing Remarks
Slide 23: Closing remarks
Closing remarks 1Q24 showing good delivery of capacity additions (+0.5 GW), normalization of wind resources (2% below LT average) and 3% decline in average selling price, mainly driven by European markets and a good performance in terms of efficiency with Core OPEX/Avg. MW -7% YoY New avg. selling p
Slide 24: Annex
Annex
Slide 25: Ocean Winds: Good execution of projects under construction
Ocean Winds: Good execution of projects under construction in UK and France, with 2 other projects in advanced development in US and Poland Most recent portfolio developments Moray West SouthCoast Wind 0.9 GW | 95% OW | COD 2025 2.4 GW | 100% OW | COD >2030 Under Construction Under Advanced Developm
Slide 26: Main assumptions vs. Previous Plan
Main assumptions vs. Previous Plan CMD Current assumptions Pool Iberia TTF CO2 Inflation Europe % Inflation Brazil % €/MWh €/MWh €/ton Avg. IPCA / IGPM 126 90 81 82 58 61 3.7 3.2 61 58 59 3.9 3.6 3.5 2.1 2.4 3.3 28 35 29 EUR/USD EUR/BRL EUR 7Y MidSwap USD 7Y Treasuries SELIC % % % 1.1 1.1 1.1 1.1 6.
Slide 27: Key Sensitivities on Net Income for 2026
Key Sensitivities on Net Income for 2026 D 2026 Net Income Impact Avg. Spot Price Electricity Europe €5/MWh ~€27m RES Generation Output 3% ~€50m FX EUR/USD 5% ~€15m Interest Rates 25bps ~€20m 27
Slide 28: Installed capacity, net capacity factor and generation 1Q24
In 1Q24, EDPR additions amounted to +0.5 GW with installed capacity amounting to 16.5 GW due to Asset Rotation impact Installed Capacity YoY Net Capacity Factor 1Q24 Electricity Generation YoY (EBITDA + Equity GW) (%) (TWh) NCF YoY 1Q23 14.8 1Q23 10.2 31% -1pp MW Added 2.9 ∆ MW 0.2 35% -2pp 17.7 28%
Slide 29: IR Contacts
IR Contacts E-mail: ir@edpr.com Phone: +34 900 830 004 Parque Empresarial ADEQUA Avda. de Burgos, 89 EDIF 1 MOD A-B 28050, Madrid - Spain EDPR Online Site: www.edpr.com Link Results & Presentations 29
Slide 30: Slide 30