Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — Q1 2022 Earnings Presentation
27 slides from Edp's earnings presentation, May 6, 2022
Slide 1: 1Q22 Results Presentation
Slide 2: Disclaimer
Disclaimer This document has been prepared by EDP - Energias de Portugal, S.A. (the "Company") Forward-looking statements include statements regarding: objectives, goals, strategies, solely for use at the presentation to be made on this date and its purpose is merely of outlook and growth prospects;
Slide 3: Weather related weak 1Q22; higher energy prices for longer reinforce renewables growth prospects
Weather related weak 1Q22; Higher energy prices for longer and focus on energy independence reinforces prospects for renewables growth Uncorrelated combination of adverse …and improved prospects for 2023-2025 weather and market conditions in 1Q22… Extreme Drought in Portugal Higher energy prices for
Slide 4: Hydro shortfall of 2.6 TWh pre-sold to clients represented a ~€0.4 Bn negative impact in 1Q22
Hydro shortfall of 2.6 TWh pre-sold to clients at ~€60/MWh represented a ~€0.4 Bn negative impact in 1Q22 Driest rainy season since 1931(1), impacting Hydro… … with a 2.6 TWh Shortfall in 1Q22 Hydro Generation Iberia (TWh) 28% 2021/22 winter’s Monthly Hydro Resources Expected generation, 100% (Devia
Slide 5: Loss with hydro shortfall partially mitigated by diversified and integrated portfolio
Loss with Hydro shortfall partially mitigated by EDP’s diversified and integrated portfolio 1Q22 Mainly Impacted by… 1Q22 Results Hydro shortfall in Iberia (-€0.4 Bn EBITDA) as the dominant negative impact on earnings … which was mitigated by…. €710m -€134m EBITDA YoY(1) Wind & Solar EBITDA (+€0.1 B
Slide 6: 6 GW secured capacity for 2022-23 represents 86% of growth target
6 GW total secured capacity for 2022-23 represents 86% of our 2022-23 growth target, with a ramp up trend from 2022 to 2023 We are well advanced for 22-23 capacity Short-term challenges imply some transfers additions target, 6 GW already committed of capacity additions from 2022 to 2023 Annual Capac
Slide 7: ~50% of 2021-25 renewable capacity additions target already secured
~50% of 2021-25 renewable capacity additions target already secured with 9.6 GW with reinforced medium-term growth prospects +20GW renewables target capacity additions in …with reinforced renewables medium term 2021-25, ~50% already committed… growth prospects in our key markets Renewables Capacity
Slide 8: Strong asset rotations expected in 2022 with one transaction already closed
Strong asset rotations expected in 2022 with one transaction already closed contributing to the total €1.8 Bn proceeds cashed in 2021-22 Out of the 3 transactions signed for 2022, EDPR … and continues to have good prospects for the managed to execute €0.3 Bn proceeds YTD… rest of the year AR proceed
Slide 9: Electricity Networks: €0.5 Bn investment in 1Q22
Electricity Networks: €0.5 Bn investment in 1Q22, supported by asset base expansion in Brazil and grid digitalization & resilience in Iberia In Iberia, investment focused on digitalization In Brazil, significant expansion of asset base and efficiency improvements Financial closing of EDP Goiás acqui
Slide 10: Brazil macro context: BRL appreciation, higher inflation and interest rates
Brazil macro context marked by BRL appreciation, higher inflation and interest rates; electricity sector costs alleviated by strong hydro recovery Macro context impacted by BRL appreciation and … electricity sector benefiting from stable rising inflation and interest rates… regulation and high hydro
Slide 11: Higher expected thermal generation and optimization of thermal spreads
Higher expected thermal generation and optimization of thermal spreads to increase 2022 results from Thermal & Energy Management EDP Expected Thermal(1) Generation Positive impact from 2022 thermal spreads Iberia optimization despite high market volatility (TWh) ~12 Higher expected thermal generatio
Slide 12: 2023-25 expected baseload generation ~45% hedged at ~€60/MWh
2023-25 expected baseload generation ~45% hedged at ~€60/MWh, above the €45/MWh in our plan and clearly below forward prices Baseload Electricity Price Iberia 2023-2025 Expectations for 2023-2025 Average €/MWh 137 Baseload production ~45% hedged at ~€60/MWh For ~45% of expected Forward Electricity b
Slide 13: High % of renewables and EU taxonomy aligned revenues support ESG recognition
EDP high % of renewables in total generation and high % of EU taxonomy aligned revenues & capex support strong ESG recognition Stepping-up green leadership position without …while also being recognized by ESG leaving anyone behind… performance In 1Q22… EDP is in the top 10 of S&P’s Global Clean Ener
Slide 14: 1Q22 hydro shortfall loss to be offset throughout 2022; confidence on 2023-25 targets
1Q22 hydro shortfall loss to be offset by our resilient portfolio throughout 2022, reinforced confidence on 2023-25 net profit targets Key drivers Hydro Shortfall in Iberia 1Q22 2021/22 winter rainy season was the driest since 1931 2022 Resilient Integrated Portfolio to mitigate 1Q22 hydro Resilient
Slide 15: Financial Performance
FINANCIAL PERFORMANCE
Slide 16: Recurring EBITDA -16% YoY penalized by low hydro volumes and high energy prices
Recurring EBITDA -16% YoY penalized by the combination of extremely low hydro volumes and high energy prices context Recurring EBITDA(1,2) €m YoY growth, % -16% YoY ∆ YoY 844 710 Wind and Solar 269 EDPR Installed Capacity +13% YoY (3) +125m Wind resources +2% vs. LT avg 394 Hydro + CSEM 263 -2.6 TWh
Slide 17: Wind & Solar EBITDA +46% YoY prompted by higher load factors
Wind & Solar EBITDA +46% YoY prompted by higher Load Factors Wind & Solar EBITDA €m YoY growth, % 46%YoY 1Q21 1Q22 YoY 394 12.5 14.0 +13% Installed Capacity(1), GW 269 210 Prod. deviation vs. exp. LT Gross -3% 2% 5 p.p. 12% Capacity Factor, %(2) Europe 188 Electricity Production, TWh 8.1 9.2 +14% 15
Slide 18: Hydro and Client Solutions & EM EBITDA penalized by scarce hydro resources in Iberia
Hydro and Client Solutions & EM EBITDA penalized by scarce hydro resources in Iberia in a period of high energy prices Recurring EBITDA Hydro + CS&EM (1) € millions Iberia 1Q21 1Q22 YoY -323 YoY Hydro resources vs. LT Avg(2) , % 28% -70% -98 p.p. 263 Reservoirs, % 78% 33% -45 p.p. Iberia 194 Hydro G
Slide 19: Hydro drought impact mitigated through higher thermal optimization results
High energy prices and hydro drought with negative impact in 1Q22, mitigated through higher thermal optimization results Risk mitigation through integrated portfolio strategy(1) € Bn 1 Lower than expected hydro volumes increased generation short position in a period of higher than ever energy wholes
Slide 20: Electricity Networks Recurring EBITDA +17% YoY
Electricity Networks Recurring EBITDA +17% YoY reflecting tariff updates in Brazil Elec. Networks Recurring EBITDA €m YoY growth, % 1Q21 1Q22 YoY Return on RAB Portugal (1), % 4.75% 4.80% +5 bps +17% YoY 362 Return on RAB Spain, % 5,58% 5,58% 0 bps 310 125 -11% OPEX/ Supply Point Iberia(2), € 11.7 1
Slide 21: Net financial costs increase in 1Q22 impacted by higher interest rates in Brazil
Net financial costs increase in 1Q22 impacted by higher interest rates in Brazil Avg. Cost of Avg. Cost of Debt Net Financial Costs % Debt (1) % Excluding Brazil €m ~+70bp Avg. cost of debt in BRL up from 3.3% 3.9% 8.6% to 13.4% (BRL with a 14% weight on total debt) ~-20bp Issuance of a €1.3 Bn 7.5-
Slide 22: EDP well protected against inflationary and interest rate pressures
EDP well protected against inflationary and interest rate pressures with >70% of non-fixed revenues and ~70% of fixed rate debt EDP Revenues(1) with limited exposure to inflation Debt breakdown by rate & currency Potential upside from BRL Other 2023 onwards as hedges Floating 12% roll over 100% 31%
Slide 23: Net Debt increased 13% with acquisition of Sunseap and CELG-T
Net Debt increased 13% with the acquisition of Sunseap and CELG-T and penalized by Commodity prices and BRL appreciation Change in Net Debt € Bn 0.3 13.1 +€0.7Bn Acquisition of Sunseap +€0.3Bn Acquisition of CELG-T 1.4 +€0.4Bn Forex -€0.7Bn Regulatory Receivables 11.6 0.7 0.2 Mainly Margin Calls Net
Slide 24: Recurring Net Profit penalized by lower EBITDA and higher financial costs
Recurring Net Profit penalized by lower EBITDA on hydro shortfall and higher financial costs in Brazil and increase of minority interests Recurring Net Profit (1) Δ YoY Recurring Net Profit €m €m EBITDA 710 -134 159 D&A and Provisions 388 -19 EBIT 322 -153 Net Financial Costs 173 -50 Income Taxes 23
Slide 25: 1Q22 Closing Remarks
1Q22 Closing Remarks
Slide 26: Key takeaways: On track to deliver 2023-2025 targets
Key takeaways: On track to deliver 2023-2025 targets Weak Hydro resources and record high energy prices in 1Q22 partially mitigated by EBITDA growth in Wind & Solar electricity networks, Brazil and thermal EDP’s 2022-2023 renewables capacity additions target already 86% committed, with medium term g
Slide 27: IR Contacts
IR Contacts E-mail: ir@edp.com Phone +351 210 012 834 Site: www.edp.com
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