Pge Polska Grupa Energetyczna S.a. · GPW:PGE
Pge Polska Grupa Energetyczna — Q1 2016 Earnings Presentation
39 slides from Pge Polska Grupa Energetyczna's earnings presentation, May 12, 2016
Slide 1: Q1 2016 Financial and Operating Results
Q1 2016 Financial and Operating Results May 12, 2016
Slide 2: Key takeaways
Q1 2016 Financial and Operating Results Key takeaways Henryk Baranowski - President of the Board and CEO 2
Slide 3: Highlights
Highlights PLN 1.1 bn PLN 0.9 bn Financial PLN 1.8 bn net cash from net profit to EPS results EBITDA PLN 0.47 operations equity 13.2 TWh 8.6 TWh 10.7 TWh Net Distribution Sales to end Operations generation volume users (-9% y-o-y) (+3 y-o-y) (+9% y-o-y) Business International CO2 market Regulatory t
Slide 4: Macroeconomic environment
Benefits of growth outside the sector Macroeconomic environment Q1 2016 Q1 2015 Real GDP growth (y-o-y) 3.9%* 3.6% Domestic Electricity Consumption growth (y-o-y) 2.1% 1.3% Domestic Electricity Consumption (TWh) 42.63 41.76 * Estimated BASE Forward next year CO2-driven BASE price Generation share in
Slide 5: Landscape change implies market reshape. Towards capacity markets
Landscape change implies market reshape. Towards capacity markets… Shifting Q1 business environment Net import Q1 2016 vs. Q1 2015 • Growing international price pressure: • Lithuanian reversal with NordBalt • Swedish import • Reinstated Ukraine import • Minimized DE/CZ/SK exports (-90%) • Growth of
Slide 6: PGG investment: benefits and key figures
PGG investment: benefits and key figures Investment in PGG: Quasi operating hedge 1. lowers operating risk for PGE Equity stake in PGG is Electricity price is linked to the price comparable to share in • safeguards fuel supply PGG sales structure of marginal fuel - hard coal. (capital engagement doe
Slide 7: PGE Investment grid
PGE Investment grid Opole II project Turów project Gorzów CHP project • Project’s overall progress in • Progress in line with • Currently project at advanced line with schedule and on schedule amended with new stage of works – current budget requirements from BAT status of ca. 80% conclusions • Curr
Slide 8: Towards cleaner energy – modernizations in PGE
Towards cleaner energy – modernizations in PGE Comprehensive modernization of units 7-12 in Bełchatów Other projects • Contract with Alstom signed in Q1 2011 • 1-3 Turów modernization • Overall budget of PLN bn 4.6 (net, without costs of financing) - January - contract for • Objective: modernization
Slide 9: Detailed financial and operating results
Q1 2016 Financial and Operating Results Detailed financial and operating results Emil Wojtowicz - Vice-President of the Board, CFO 9
Slide 10: Focusing on the key financial results
Focusing on the key financial results diff. Q1 2016 PLNm Q1 2016 Q1 2015 y-o-y % 7 133 Sales 7 553 Sales revenues 7,133 7,553 -6% EBITDA 1,822 2,202 -17% 7 003 Recurring* EBITDA 1,563 2,040 -23% Recurring* sales 7 391 Net profit to equity 870 1,095 -21% Earning per share (PLN) 0.47 0.59 -20% 1 822 E
Slide 11: Summary of generation performance
Summary of generation performance Q1 2016 production (% change y-o-y) (-3%) (-2%) 0.21 (-36%) (+2%) (-3%) (-2%) (-10%) 0.30 (30%) Coal (65%) (-1%) (25%) 3.04 (-17%) (+15%) (28%) 0.13 (-7%) (5%) (+14%) (15%) (15%) (+13%) 0.18 (29%) 0.30(-14%) (-12%) TOTAL (-12%) Lignite (-70%) (-7%) (-3%) (10%) (-21%
Slide 12: Focusing on performance indicators
Focusing on performance indicators Generation assets Lignite Hard coal CHPs Wind assets Availability 81.4% 98.5% 98.3% 97.4% Q1 2016 Availability 89.4% 92.4% 94.4% 98.8% Q1 2015 Capacity factor 66.4%* 54.5%* 67.8% 28.9% Q1 2016 Capacity factor 75.6% 46.3% 67.1% 34.4% Q1 2015 * Capacity factor exclud
Slide 13: Development of EBITDA by major value drivers
Development of EBITDA by major value drivers PLN m Q1 2015 EBITDA REPORTED 2,202 One-offs 162 Q1 2015 EBITDA RECURRING* 2,040 Wholesale price of electricity 116 Volume of electricity 256 Hard coal with transport 27 Biomass 43 CO2 cost 79 Regulatory services 10 Margin on retail market 34 RES support
Slide 14: Capital expenditures in Q1 2016
Capital expenditures in Q1 2016 PLN 551 m CAPEX in Significant projects Q1 2016 PLN 28 m Construction of Opole II PLN 904 m 2% 30% PLN 287 m 15% Refurbishment and modernization in Bełchatów PLN 267 m TOTAL PLN 76 m 4% CAPEX Modernization of distribution assets PLN 160 m PLN 1.8 bn (+32% yoy) New dev
Slide 15: Division EBITDA outlook for 2016
Division EBITDA outlook for 2016 2016 outlook Main drivers vs 2015 • Wholesale blended realized price to be hampered by adverse market conditions and to arrive within a range of 165-167 PLN/MWh • Volumes on lignite lower as unit #1 in Bełchatów shifted to peak capacity reserve • Volumes on hard coal
Slide 16: Additional information
Q1 2016 Financial and Operating Results Additional information 16
Slide 17: Mixed impact of commodity markets
Mixed impact of commodity markets CO2 allowance (EUA_DEC16) Hard coal (Polish Steam Coal Index PSCMI1) PGE average wholesale price of electricity EUR/t PLN/GJ1 PLN/MWh 10.5 10.5 10.5 174 174 174 172 8.5 10.0 9.9 166 166 8.1 9.5 9.8 163 164 7.2 7.5 8.8 6.9 -5% 6.4 5.8 5.6 -12% -22% Q2'14 Q3'14 Q4'14
Slide 18: Capital expenditures
Capital expenditures CAPEX for Q1 2016 (PLN m) Q1 2016 Q1 2016 Q1 2015 vs Q1 2015 Segment Conventional Generation 1,471 1,042 41% Distribution 287 263 9% New clients connection 116 100 16% Distribution grid 118 114 4% Renewables 76 68 12% Modernization and replacement 4 2 100% Supply, Others 28 37 -
Slide 19: Recurring Q1 2016 EBITDA – composition and development
Recurring* Q1 2016 EBITDA – composition and development 14 1,563 555 741 114 139 Conventional Renewables Supply Distribution Other EBITDA Q1 2016 741 114 139 555 14 1,563 Share in Q1 2016 EBITDA (%) 47% 7% 9% 36% 1% Q1 2015 1,094 125 159 632 30 2,040 Change (PLN m) -353 -11 -20 -77 -16 -477 Change (
Slide 20: Key Financials
Key Financials Selected consolidated financial data, IFRS Guide to one off adjustments: Q1 2016 Q1 2015 Q1’16 Restated vs. Computation of recurring EBITDA PLN m PLN m Q1'15 key one-off items Q1 2016 Q1 2015 LTC compensations -130 -162 Sales 7,133 7,553 -6% LTC adjustment (court verdicts) -148 0 incl
Slide 21: Key Operating Data
Key Operating Data Net electricity generation by sources (TWh) Q1 2016 Q1 2015 Q1'16 vs. Q1'15 Lignite-fired power plants 8.50 10.13 -16% Hard coal-fired power plants 2.74 2.60 5% Coal-fired CHPs 0.39 0.41 -5% Gas-fired CHPs 0.80 0.77 4% Biomass-fired CHP 0.12 0.11 9% Pumped-storage 0.18 0.14 29% Hy
Slide 22: Detailed segmental revenues and cost: Conventional Generation
Detailed segmental revenues and cost Conventional Generation (PLN m) Q1’16 Q1 2016 Q1 2015 vs. Q1’15 Sales, including 3,073 3,517 -13% Sale of electricity 2,401 2,823 -15% LTC compensations 130 162 -20% Sale of heat 278 265 5% Sale of certificates of origin 145 144 1% Cost by kind, including 2,545 2
Slide 23: Detailed segmental revenues and cost: Renewables
Detailed segmental revenues and cost Renewables (PLN m) Q1 2016 Q1 2015 Q1’16 vs. Q1’15 Sales, including 213 215 -1% Sale of electricity 101 98 3% Sale of certificates of origin 44 56 -21% Cost by kind, including 166 148 12% D&A 65 55 18% Materials 1 1 0% Energy 37 32 16% External services 25 20 25%
Slide 24: Detailed segmental revenues and cost: Distribution
Detailed segmental revenues and cost Distribution (PLN m) Q1 2016 Q1 2015 Q1’16 vs. Q1’15 Sales, including 1,510 1,541 -2% Revenues from distribution services 1,439 1,466 -2% Other operating revenues 45 48 -6% Cost by kind, including 1,253 1,197 5% D&A 283 265 7% Materials 15 18 -17% Energy 167 138
Slide 25: Detailed segmental revenues and cost: Supply
Detailed segmental revenues and cost Supply (PLN m) Q1’16 Q1 2016 Q1 2015 vs. Q1’15 Sales, including 4,142 3,797 9% Sale of electricity 2,546 2,440 4% Revenues from distribution services 997 1,050 -5% Sale of certificates of origin 0 6 -100% Cost by kind, including 415 437 -5% D&A 7 6 17% Materials
Slide 26: Conventional Generation – EBITDA Q1 2016
Conventional Generation – EBITDA Q1 2016 Key changes in EBITDA (PLN m) 1 400 1 200 1 000 800 600 400 Sale of Sale of Revenues Revenues EBITDA electricity electricity from Sale of Environmental Personnel Capitalized EBITDA from Fuel CO2 Other 2015 difference in difference agreement heating costs cost
Slide 27: Renewables – EBITDA Q1 2016
Renewables – EBITDA Q1 2016 Key changes in EBITDA (PLN m) 140 120 100 80 60 Sale of Sale of Sale of Revenues from EBITDA Sale of electricity Personnel EBITDA electricity property rights property rights - agreement with Other 2015 - water costs 2016 - wind - wind water TSO* Change 5 3 -4 -15 8 2 -10
Slide 28: Distribution – EBITDA Q1 2016
Distribution – EBITDA Q1 2016 Key changes in EBITDA (PLN m) 700 600 500 400 300 Other Volume of Change of distribution EBITDA Network Transmission Personnel Fixed EBITDA distributed distribution related Other 2015 losses services* costs costs*** 2016 energy tariff* revenues** Change 40 -63 -8 -29 -1
Slide 29: Supply – EBITDA Q1 2016
Supply – EBITDA Q1 2016 Key changes in EBITDA (PLN m) 200 150 100 50 0 Margin EBITDA Property rights Management EBITDA on Other 2015 redemption costs service 2016 electricity Change -34 20 -16 10 EBITDA Q1’15 159 418 281 133 111 EBITDA Q1’16 384 261 117 101 139 29
Slide 30: Debt Structure and Liquidity (as at March 31, 2016)
Debt Structure and Liquidity (as at March 31, 2016) Fixed vs floating debt (drawn debt) Bank loans repayment schedule* (PLN m) Drawn Debt by currency 2 000 Floating 1 800 26% PLN USD 1 600 35.8% 2.4% 1 400 1 200 1 000 800 600 400 CHF 200 0.3% EUR Fixed 0 61.5% 74% * Illustrative only, assumption of
Slide 31: Debt development by quarters
Debt development by quarters Gross debt and net debt* (PLN m) 6 000 5 409 5 414 5 045 4 802 4 811 4 822 4 838 5 000 4 660 4 171 4 000 3 000 2 706 2 718 2 637 2 405 2 522 2 000 1 586 1 000 462 266 101 0 -1 000 -1 020 -1 018 -2 000 -1 921 -2 313 -2 386 -3 000 -2 530 -2 922 -3 031 -4 000 Mar-13 Jun-13
Slide 32: Debt maturity profile
Debt maturity profile Debt maturity profile (PLN m) as at March 31, 2016 2 400 2 000 1 600 1 200 800 400 0 32
Slide 33: PGE cash position provides…
PGE cash position provides… Q1 2016 FY 2015 … plenty Gross Debt (PLN m) 5,414 5,409 of headroom Net debt (PLN m) 4,171 2,637 in the balance Net Debt/LTM EBITDA 0.53x 0.32x sheet Net Debt/Equity 0.10x 0.07x Moody’s Fitch Long-term company rating (IDR) Baa1 BBB+ Rating outlook Stable Stable Date of ra
Slide 34: Q1 2016 Key business flows
Q1 2016 Key business flows Key business flows (illustrative only) Generation Wholesale Households 13.16 TWh 14.27 TWh Regulated market 14.53 TWh (Q1 2015) 15.90 TWh (Q1 2015) 2.38 TWh Electricity from power 2.35 TWh (Q1 2015) plants (under „exchange Power exchange Supply 22% obligation”) Electricity
Slide 35: CO2 allowances – regulations and settlement
CO2 allowances – regulations and settlement Regulations in the III Settlement Period Free EUA recognized at a zero value – note 12, Q1’16 consolidated FS • As of 2013 only carbon allowances for heat production EUA are received free of charge Quantity Value (m) (PLN m) • Carbon allowances for electri
Slide 36: LTC compensations – current status of court disputes
LTC compensations – current status of court disputes Generators from the PGE Capital Group are in disputes with the ERO President regarding stranded cost compensations in years 2008-2010. Stranded cost compensation in 2011-2014 are not subject to court disputes. Status of court cases: Year Opole PP
Slide 37: Sell-side analysts covering PGE
Sell-side analysts covering PGE Domestic analysts Foreign analysts Institution Analyst Institution Analyst • BOŚ • Michał Stalmach • HSBC • Dmytro Konovalov • BZ WBK • Paweł Puchalski • Bank of America Merrill • Anton Fedotov Lynch • Citigroup • Piotr Dzięciołowski • Morgan Stanley • Bobby Chada • D
Slide 38: Investor relations contacts
Investor relations contacts Head of IR IR Officers Jakub Frejlich Krzysztof Dragan Tel: (+48 22) 340 10 32 Tel: (+48 22) 340 15 13 Mob: +48 695 883 902 Mob: +48 601 334 290 Filip Osadczuk Tel: (+48 22) 340 12 24 Mob: +48 695 501 370 Małgorzata Babska Tel: (+48 22) 340 13 36 Mob: 661 778 955 Bernard
Slide 39: Disclaimer
Disclaimer This presentation has been prepared by the management of PGE Polska Grupa Energetyczna S.A. (the “Company” or “PGE”) and other entities and is furnished on a confidential basis only for the exclusive use of the intended recipient and only for discussion purposes. This document has been pr
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