Societatea Energetica Electrica S.a. · BVB:EL
Societatea Energetica Electrica — Electrica — H1 2022 Earnings Presentation
51 slides from Societatea Energetica Electrica's earnings presentation, Aug 19, 2022
Slide 1: Presentation of H1 2022 Financial Results
Presentation of H1 2022 Financial Results Bucharest, 19 August 2022
Slide 2: Content
Content H1 2022 Financial results 1 ▪ Key Group Information ▪ Distribution Segment Overview o The impact of the electricity market evolution on the distribution segment ▪ External electricity network maintenance segment - Overview ▪ Supply Segment Overview o The impact of the electricity market evol
Slide 3: Summary Consolidated Financials
Summary Consolidated Financials Key Group Information Revenues EBITDA Growth and Margin Performance (RON mn.) EBITDA (RON mn.) and EBITDA Margin (%) 7,179 1,20 0 15% 16% 6,501 582 14% 1,00 0 11% 557 12% 800 10% 8% 3,833 600 294 953 6% 2,648 6,597 400 2% 5,944 4% 288 2% 357 200 3,538 101 -2% 0% 2,360
Slide 4: Consolidated EBITDA and net result evolution
Consolidated EBITDA and net result evolution Key Group Information Comments Consolidated EBITDA variation H1 2022 vs. H1 2021 is RON -256 mn., being mainly the cumulative effect EBITDA (RON mn.) of the following factors: ❑ The negative variation of the energy margin RON -233 mn., out of which: • RON
Slide 5: Distribution segment - highlights
Distribution segment - highlights Distribution segment overview Financial results Key figures H1 2022 EBITDA decreased by RON 532 mn., mainly as a result of the evolution of the indicators below: ▼ decrease in energy margin by RON -534 mn., as a net effect of: - ▲ increase in energy revenues RON +22
Slide 6: Distribution segment – main aspects
Distribution segment overview Distribution segment – main aspects Relevant regulatory information: Distributed energy margin (RON mn.) ➢ At the beginning of the current PR4 regulatory period, ANRE made a total negative correction of closing the PR3 in the amount of RON (730) mn. (nominal terms), res
Slide 7: 6M Analysis of regulated net result - OMF net result - IFRS net result
6M Analysis of regulated net result - OMF net result - IFRS net result for the distribution segment 7
Slide 8: RBAR-OMF analysis results distribution segment for 2022
RBAR-OMF analysis results distribution segment for 2022 8
Slide 9: DEER - TN
DEER - TN Distribution segment overview Key figures H1 2022 Network losses cost Network losses (RON mn.) (GWh) ~1.33 mn. users 392 619 633 296 70,733 km 34,162 km2 voltage lines coverage 408 378 200 area 120 RAB: RON 2.0 bn (est.) 2.83 TWh (-2.0%) distributed energy 2020 H1 2021 2021 H1 2022 2020 H1
Slide 10: DEER - TS
Distribution segment overview DEER - TS Key figures H1 2022 Network losses Network losses cost (RON mn.) (GWh) ~1.19 mn. 355 users 310 58,697 km 34,072 km2 693 692 215 voltage lines coverage area 382 121 315 RAB: RON 1.9 bn (est.) 3.14 TWh (-4.1%) distributed energy 2020 H1 2021 2021 H1 2022 2020 H1
Slide 11: DEER - MN
DEER - MN Distribution segment overview Key figures H1 2022 Network losses cost Network losses (RON mn.) (GWh) ~1.32 mn. users 789 795 413 71,933 km 28,962 km2 372 voltage lines coverage 259 area 384 388 RAB: RON 2.1 bn (est.) 122 3.02 TWh (-0.8%) 2020 H1 2021 2021 H1 2022 2020 H1 2021 2021 H1 2022
Slide 12: The financial impact of the electricity market evolution - distribution
The impact of the electricity market evolution on the distribution segment The financial impact of the electricity market perspectives evolution - distribution Evolution of the cost of electricity needed to cover NL Network losses ❑ During the 6 months ending on June 30, 2022, the cost of electricit
Slide 13: Electrica Serv (SERV)
Energy services segment - overview Electrica Serv (SERV) General overview Revenues (RON mn.) SERV provides repair and other energy-related services to third parties, as well as several services to the companies within the group (vehicles rental, building rental etc.). Starting with 1 December 2020,
Slide 14: Supply segment – Electrica Furnizare
Supply segment – Electrica Furnizare Supply segment overview Key figures H1 2022 Financial results EBITDA significantly increased by RON 260 mn. compared to H1 2021, mainly following the evolution of the factors below: ~3.5 mn. ▲ the increase in revenues from the supply of energy and natural gas by
Slide 15: Supply market
Supply market Supply segment overview Overall Market Share – April 2022 General overview Electrica Furnizare The supply market comprises the competitive segment, universal service (US) as well as the 17.23% Altii supplier of last resort (SoLR) segment. Before 1 January 2021 – market liberalization,
Slide 16: Supply - key aspects
Supply - key aspects Supply segment overview Volume of Electricity Supplied on Retail Market H1 2022 (TWh) Number of consumption places at 30 June 2022 (ths) Competitive Universal Service SoLR Competitive Universal Service SoLR 9.3 9.4 3.6 3.5 3.5 0.3 4,4 4.2 4,2 1.6 1.7 5.6 4.2 3.3 5.1 2.9 2.0 1.8
Slide 17: The financial impact of the electricity market evolution – supply (1/2)
The impact of the electricity market evolution on the supply segment The financial impact of the electricity market perspectives evolution – supply (1/2) ❑ Between January 2022 and June 2022, the gross margin realized is exceeding the budgeted target with +134 million RON. Main factors: ❑ Higher sel
Slide 18: The financial impact of the electricity market evolution – supply (2/2)
The impact of the electricity market evolution on the supply segment The financial impact of the electricity market perspectives evolution – supply (2/2) Receivables’ analysis ❑ The total value of receivables balance increased by 41.7%, from RON 1,500 mn as of 31 December 2021 to RON 2,125 mn as of
Slide 19: Group liquidity
Group Liquidity Group liquidity Total liquidity (RON mn.) ❑ At Group level, the total liquidity available in cash and overdraft limits as of 30 June 2022 was RON 312 mn., which is lower than the level recorded at the end of previous half-year. The level of cash on 30 June 2022 was RON 178 mn., decre
Slide 20: Dividend distribution
Dividend distribution Dividends Distributed gross dividends (FY 2014 – 2021) (RON mn) Gross dividend per share (RON) and Dividend yield(1) (%) 291.6 6.9% 7.3% 6.9% 244.7 251.4 245.4 247.5 246.1 247.9 6.8% 5.2% 6.0% 6.1% 0.8600 5.2% 0.7217 0.7415 0.7237 0.7300 0.7248 0.7300 152.8 0.4500 2014 2015 201
Slide 21: Electrica Group – Corporate Strategic Objectives (updated April 2022)
Status of Group’s Strategy Implementation Electrica Group – Corporate Strategic Objectives (updated April 2022) OBJECTIVES Targets Initiatives/update • 10% higher overall stock yield during 2022-2026 Market value growth of than the result in the 2014-2021 period (ca.7%) the entire Group • 5% higher
Slide 22: Sustainability is one of the Values of Electrica
Status of Group’s Strategy Implementation Sustainability is one of the Values of Electrica Next steps: In 2022 we published, for the 6th consecutive year, our Group Elaboration of a Group Sustainability Sustainability report, based on Strategy the GRI reporting Standard Continuing to collect interna
Slide 23: Main events in H1 2022 and up to date (1/2)
Main events in H1 2022 and up to date (1/2) Main Corporate Events ELSA’s General Meetings of Shareholders: ❑ ELSA’s EGMS on 21 March 2022: ▪ Approved the empowerment of Electrica representative to participate in Societatea Electrica Furnizare SA (EFSA) EGMS for the approval of a total ceiling of RON
Slide 24: Main events in H1 2022 and up to date (2/2)
Main events in H1 2022 and up to date (2/2) Main Corporate Events ▪ During the meeting on May 5, 2022, the Board of Directors of the Company (CA) decided to revoke Mrs. Georgeta-Corina Popescu from the position of General Manager, without cause, starting with 16 May 2022 and the appointment of Mr. C
Slide 25: Appendices
Appendices Curectrica 25
Slide 26: Group structure
Group structure Electrica Group is the only Romanian group listed on the BSE & LSE and operates within production distribution, supply & energy service segments Distributie Energie Electrica 99.99% 2) 99.99%2) Electrica Furnizare S.A. Romania S.A. Electricity and natural gas Distribution Operator su
Slide 27: Important Regulatory Changes – Distribution Activity (1/2)
Important Regulatory Changes – Distribution Activity (1/2) ❑ RP4 Regulations on Distribution tariffs • RRR: ANRE approved Order no. 75 of 6 May 2020, which established a regulated rate of return (RRR) for electricity and gas, distribution and transmission of 6.39% for the existing RAB, until the end
Slide 28: Important Regulatory Changes – Distribution Activity (2/2)
Important Regulatory Changes – Distribution Activity (2/2) ❑ Regulation of the Online Supplier Change Platform (POSF) - in force starting with 28 August 2022, the change of supplier will be made only through the electronic platform administered by ANRE. ❑ Distribution performance standard: (i) oblig
Slide 29: Changes in Distribution Regulation - RP4
Changes in Distribution Regulation - RP4 Regulated Revenue and tariff calculation 1 2 3 4 5 6 7 8 7 Regulated Revenue Reactive en. Regulated Contr. Non- Tariff NL Cost Depreciation RRR2 & 95% profit Revenue OPEX1 controllable other activ. 9 Forecasted Volume OPEX 1 • The starting point is approved b
Slide 30: Changes in Distribution Regulation
Changes in Distribution Regulation Methodology for determining distribution tariffs - Summary RP4 vs RP3 RP3 RP4 1 RRR January 2019: 5.66% existing RAB & 1% incentive RP4 network invest.(acc. ANRE) Return RRR (7.7%) applied to RAB 29 March 2019–30 April 2020: 6.9% total RAB (acc. GEO 19/2019 & GEO 1
Slide 31: Changes in Distribution Regulation: Comparative elements RP4 vs RP3
Changes in Distribution Regulation Methodology for determining distribution tariffs – Comparative elements RP4 vs RP3 RAB & Investment RP3 methodology RP4 methodology 1. RAB includes: assets used for the distribution service, which are recorded into the DSOs accounts as tangible assets and are physi
Slide 32: Changes in Distribution Regulation: Comparative elements RP4 vs RP3
Changes in Distribution Regulation Methodology for determining distribution tariffs – Comparative elements RP4 vs RP3 Opex & NL RP3 methodology RP4 methodology Controlable OPEX 1. OpexC 2019 is established based on formula (approved 1. OpexC 2019 is not established based on formulae, but by comparat
Slide 33: Regulatory-related Developments – Supply – H1 2022 (1/10)
Regulatory-related Developments – Supply – H1 2022 (1/10) Amendment of Law no. 123/2012 by GEO no. 143/2021 GEO no. 143/2021 amending the Electricity and natural gas law no. 123/2012 • the supply of the universal service (US): by any supplier on the competitive market (by providing for the obligatio
Slide 34: Regulatory-related Developments – Supply – H1 2022 (2/10)
Regulatory-related Developments – Supply – H1 2022 (2/10) Electricity and natural gas compensation scheme for the 2021-2022 cold season Government Emergency Ordinance - GEO No. 118/2021, approved with amendments via Law No. 259/2021, GEO No. 130/2021, GEO No. 2/2022, GEO No. 3/2022 • The support sch
Slide 35: Regulatory-related Developments – Supply – H1 2022 (3/10)
Regulatory-related Developments – Supply – H1 2022 (3/10) Electricity and natural gas compensation scheme for the 2021-2022 cold season GEO no. 3/2022 (amendments to GEO no. 118/2021, enforced from 1st of February until 31st of March 2022) • increasing the consumption margin for granting compensatio
Slide 36: Regulatory-related Developments – Supply – H1 2022 (4/10)
Regulatory-related Developments – Supply – H1 2022 (4/10) Capping-type support scheme for electricity and natural gas consumption – enforceable from 1 April 2022 until 31 March 2023 GEO no. 27/2022 on the measures enforceable for the end consumers of the electricity and natural gas market from 1 Apr
Slide 37: Regulatory-related Developments – Supply – H1 2022 (5/10)
Regulatory-related Developments – Supply – H1 2022 (5/10) Capping-type support scheme for electricity and natural gas consumption - enforceable from 1 April 2022 until 31 March 2023 GEO no. 42/2022 amending GEO no. 27/2022 on the measures enforceable for the end consumers of the electricity and natu
Slide 38: Regulatory-related Developments – Supply – H1 2022 (6/10)
Regulatory-related Developments – Supply – H1 2022 (6/10) ANRE order no. 12/2022 — for approving the Procedure regarding the establishment and individualization of civil sanctions for misdemeanors related to the turnover resulting from the control activity: • the purpose of the procedure is to estab
Slide 39: Regulatory-related Developments – Supply – H1 2022 (7/10)
Regulatory-related Developments – Supply – H1 2022 (7/10) ANRE order no. 24/2022 — Order on the amendment of the Regulation for the granting of licenses and authorizations in the electricity sector, approved by ANRE Order no. 12/2015: • ANRE can grant several licenses for electricity market operator
Slide 40: Regulatory-related Developments – Supply – H1 2022 (8/10)
Regulatory-related Developments – Supply – H1 2022 (8/10) ANRE order no. 64/2022 — amending the Performance Standard for the electricity distribution service, approved by the Order of the President of the National Energy Regulatory Authority no. 46/2021. • the reading interval of the measurement gro
Slide 41: Regulatory-related Developments – Supply – H1 2022 (9/10)
Regulatory-related Developments – Supply – H1 2022 (9/10) ANRE order no. 72/2022 for the approval of the Regulation on the storage of natural gas in the natural gas transport system • the regulation includes: natural gas storage methods (natural gas storage in the natural gas transportation system,
Slide 42: Regulatory-related Developments – Supply – H1 2022 (10/10)
Regulatory-related Developments – Supply – H1 2022 (10/10) • the introduction of automatic takeover by the nominated FUI/SoLR of non-household customers with a power approved by the technical connection notice/connection certificate of no more than 1 MVA, in the event of termination of the electrici
Slide 43: Leading Player in Distribution and Supply
Leading Player in Distribution and Supply Distribution Supply Volumes Distributed in 2021 Volumes Supplied in 2021 Volumes Supplied in Jan-Apr 2022 13.2% DEER_MN 18.42% 17.23% DEER_TS Electrica Furnizare 12.7% DEER_TN Others 46.3 TWh 50.99 TWh 16.32 TWh Altii 60.1% 14.0% 81.58% 82.77% Electrica: 39.
Slide 44: Corporate Governance Bodies
Corporate Governance Bodies • Mr. Iulian Cristian Bosoanca – Chair • Mr. Gicu Iorga Board of Directors • Mr. Ion-Cosmin Petrescu Current • Mr. Adrian-Florin Lotrean Composition • Mr. Radu-Mircea Florescu • Mr. Dragos-Valentin Neacsu • Mr. George Cristodorescu • All board members are non-executive, e
Slide 45: Shareholder Structure at 30 June 2022
Shareholder Structure at 30 June 2022 Percent of share Shares with voting Shareholder Shares capital right Romanian State through the Ministry of Energy 169,046,299 48,7948% 49,7850% EBRD 17,355,272 5,0096% 5,1112% Electrica 6,890,593 1,9890% 0% Bank of New York Mellon - GDRs 2.507.216 0,7237% 0,738
Slide 46: Monthly volume and average price of Electrica’s shares and GDRs
Monthly volume and average price of Electrica’s shares and GDRs 3,500,000 12.00 3,008,775 3,000,000 11.00 2,500,000 10.00 2,000,000 9.00 1,495,713 1,471,084 1,500,000 8.00 1,000,000 797,172 822,771 7.00 785,761 642,990 500,000 6.00 147,144 0 25,672 0 5,760 2,880 400 - 5.00 BSE - Shares - Monthly vol
Slide 47: Electrica’s adjusted closing price vs BET-TR (1 January – 31 July 2022)
Electrica’s adjusted closing price vs BET-TR (1 January – 31 July 2022) 10.00 5.00 0.00 -5.00 EL: -14.04% BET-TR: +1.49% -10.00 -15.00 -20.00 BET-TR Electrica adjusted price with dividends Source: Company’s data, BSE 47
Slide 48: Glossary
Glossary LV Low Voltage AMR Automatic Meter Reading MP Merger Plan ANRE Romanian Energy Regulatory Authority MV Medium Voltage B2B Business to Business MWh MegaWatt hour B2C Business to Consumer NBV Net Book Value BET-TR Bucharest Exchange Trading - Total Return Index NL Network Losses BoD Board of
Slide 49: 2022 Financial Calendar
2022 Financial Calendar • 25 February Publication of the 2021 financial annual consolidated and individual preliminary results Publication of the 2021 financial annual results - documents for the Ordinary General Meeting of • 28 February Shareholders • 4 March Investor and analyst teleconference for
Slide 50: Investor Relations & Disclaimer
Investor Relations & Disclaimer • Email: ir@electrica.ro • Web: https://www.electrica.ro/en/investors/ Investor Relations • Tel: +40 (0)21.208.50.35 • Address: 9 Grigore Alexandrescu Str., 1st District, Bucharest, 010621 This document was prepared by Electrica for the presentation of Q2 2022 and H1
Slide 51: Q&A
Q&A Executive Management of Electrica Mr. Alexandru Chirita Chief Executive Officer Mr. Stefan Frangulea Chief Financial Officer 2017 Ms. Livioara2018Sujdea Chief Distribution Officer Mr. Mircea-Toma Modran Chief Information Officer 51