Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — Debt Investor Presentation (November 2023)
34 slides from Edp's debt investor presentation, November 2023
Slide 1: Credit Investors' Presentation
CREDIT INVESTORS’ PRESENTATION November 2023
Slide 2: Disclaimer
Disclaimer This document has been prepared by EDP - Energias de Portugal, S.A. (the "Company") solely Forward-looking statements include statements regarding: objectives, goals, strategies, for use at the presentation to be made on this date and its purpose is merely of informative outlook and growt
Slide 3: Global energy company present in 4 regional hubs
We are a global company, leader in the energy sector, present in 4 regional hubs throughout different stages of the value chain % Weight on EBITDA 2022 Renewables, Clients & EM North America Europe APAC ~67% Wind Solar Solar Energy onshore utility-scale DG management Wind Hydro Storage H2 Client off
Slide 4: Key credit strengths
Key credit strengths Attractive, resilient and integrated business model with stable margins, ✓ Integrated operations across energy value chain allows for successful risk mitigation visible cash flow generation and ✓ Strong protection against inflation through long-term offtake contracts and long-du
Slide 5: Business Strategy Execution
Business Strategy Execution Credit Investors’ Presentation 5
Slide 6: Leading the energy transition to create superior value
Leading the energy transition to create superior value Our commitments Key figures and targets Accelerated and sustainable growth €25 Bn 4.5 GW/yr >50 GW gross investment 2023-26 gross additions 2023-26 RES gross additions 2021-30 ESG excellence and future-proof organization Coal free All Green Net
Slide 7: Increasing investment in energy transition, focus on renewables and low-risk markets
We are increasing our investment in the energy transition, with a strong focus on renewables and core low-risk markets Reinforcing our investment... ... in the energy transition, across core low risk markets Annual Gross Investments1 (€ Bn) Gross Investments1 2023-26 (€ Bn) ~15% 30% ~6.2 ~40% ~40% ~
Slide 8: Consolidating presence across technologies with differentiating value propositions
We are consolidating our presence across technologies with differentiating value propositions Wind & Solar (5.0 GW) Wind onshore ~40% Top 4 global1 player with extensive track record along the full value chain with highly experienced teams Solar Utility scale (9.4 GW) ~40% Additions ramping up quick
Slide 9: Growing distribution asset base with high visibility
We are growing our distribution asset base and we have high visibility over the upcoming period Distribution business Growing our Distribution business… ... on the back of visibility on regulatory frameworks Regulated Asset Base, € Bn RoR Regulation and Gross Investments1 Portugal Spain Brazil By 20
Slide 10: Ramping up growth with clear visibility on execution
We are successfully ramping up growth with clear visibility on execution We are scaling-up our growth rate… … and have clear visibility on execution Gross additions, GW € Bn, 2023-26 ~181 GW €25 Bn (2023-26) Electricity Networks ~15% ~50% ~6x Renewables, 2.4 ~85% Clients & EM3 1.3 ~50% 0.7 2015-18 2
Slide 11: Distinctive asset rotation strategy to crystalize value
We will deploy our distinctive asset rotation strategy to crystalize value and fund additional growth opportunities ~€7 Bn AR proceeds and capital gains ~€20 Bn 4.5 GW/yr EV1 rotated track record since 2012 Upfront value crystallization ~30% Build to Sell Growth acceleration with less capital ~€1.7
Slide 12: Actively managing EDP's listed subsidiaries
We are actively managing EDP's listed subsidiaries Core EDP growth business with long- term value (>70% ownership) Capital raise of c. €1.0 Bn to fund acceleration of accretive Largest European listed pure-play renewables growth renewables Sizeable market with solid fundamentals Corporate simplifica
Slide 13: Successful capital raise at EDPR
Successful execution of capital raise at EDPR to fund acceleration of accretive renewables growth Sources and uses of cash Equity raise at EDPR EDPR, € Bn 2023-26 EDPR has a Gross Investments plan of ~20 ~20 ~€20 Bn to deploy ~17 GW of renewables additions in 2023-26 Asset Rotation2 To partially fin
Slide 14: EDP Brasil minorities acquisition contributing to earnings growth
EDP Brasil minorities acquisition contributing to earnings growth, reinforcing the alignment of the portfolio with the global energy transition EDP Brasil earnings 100% consolidated in 2H23 Strategy in Brazil fully aligned with the energy transition Net profit enhancement from EDP Brasil minorities
Slide 15: Diversified sources of cash to deliver on growth
We have diversified sources of cash to deliver on our growth BP23-26 Organic Sources and Uses of Funds (€ Bn) Uses of cash Sources of cash ~€27 Bn Dividends ~3 Organic CF1 Delisting ~1 (net of maintenance ~9 EDP Brasil CAPEX) and others Asset Rotation + ~8 Expansion Disposals Investment ~23 TEI2 ~4
Slide 16: Prudent financial policy supporting investment grade rating
We have a prudent financial policy with a centralized management, supporting a solid investment grade rating Rating Green financing Cost of debt Keep BBB rating, by maintaining Tap most efficient markets, Continued active management sound credit metrics and overall leveraging appetite for green fund
Slide 17: Committed to a strong BBB rating
We remain fully committed to a strong BBB rating to structurally support the CAPEX cycle ahead We achieved the target BBB rating… … and reinforce our commitment to keep a strong balance sheet 16 17 13 Improved FFO/Net Debt, Net Debt reaching >20% since 2021 € Bn Solid cash flow generation ~20% ~21%
Slide 18: High financial liquidity covers refinancing needs until 2026
High financial liquidity at >€9 Bn, supported by >€6bn of available credit lines, covers refinancing needs until 2026 Financial liquidity EDP consolidated debt maturity profile1 as of Sep-23, €Bn as of Sep-23, €Bn EDP Brasil Cash & Equivalents 2.0 EDP SA & EDP Finance BV and Other (% of total debt)
Slide 19: Limited exposure to short-term interest rates
Limited exposure to short-term interest rates, successful execution of pre- hedge for 2023-24, and continued high demand for clean energy AR Debt by interest rate type Avg. nominal debt by currency Strong asset rotation execution, exceeding targeted as of Sep-23, % as of Sep-23, % gains and proceeds
Slide 20: Raising funds primarily at Holding level
We are raising funds primarily at Holding level, ensuring an efficient debt management EDP Consolidated net debt position Sources of debt funding as of Sep.23 as of Sep-23, € Bn as of Sep-23, % 16.9 Green Bonds Loans and other Capital Conventional Bonds Commercial paper EDP Brasil 10% Markets Ring-f
Slide 21: 100% green bond issuances strategy aligned with EU Taxonomy
We are maintaining a 100% green bond issuances strategy, aligned with the EU Taxonomy Total Sustainable Financing Contracted 1 Share4 of Sustainable Funding € Bn, % as of Sep-23, € Bn, % Sustainability- 2018 4% linked RCF 2018; 2019 14% 2023; 600 2019; 3,100 1,600 6.65 35% 2020 28% Green €19.2 Bn €1
Slide 22: On track to be coal-free by 2025
We are on track to be coal-free by 2025, with significant steps taken this year EDP’s total electricity generation mix Promoting a Just Transition in old coal sites • Sale of 80% stake signed in Sep 20th, 2023 with a put Coal Renewables Other option for the remaining 20% Pecém • Plans to convert the
Slide 23: 3Q23 Results
3Q23 Results @edp
Slide 24: Recurring EBITDA +26% YoY
Recurring EBITDA +26% YoY prompt by a recovery on hydro conditions and lower sourcing costs, together with ~€0.4Bn of AR Gains Recurring EBITDA1 ,€m YoY growth, % ∆ YoY +26% 3,830 • Recovery of hydro in Portugal vs. very weak 9M22 3,046 • Lower electricity and gas sourcing costs +€828m Hydro, +783m
Slide 25: 4Q23 supported by strong hydro volumes and improved forward prices
4Q23 supported by strong hydro volumes and improved prospects for 2024-26 following upward trend on electricity forward prices in 2H23 Reservoirs in 3Q23 at the highest level in 10 years Over the last 3 months, forward electricity prices for 2024-2026 deliveries have rebounded significantly Reservoi
Slide 26: Net financial costs increased +9% YoY
Net financial costs increased +9% YoY penalized by FX, interest related costs flat YoY Net Financial Costs EDP excl Brazil Brazil Avg. nominal debt by currency €m % BRL 12% +9% Other 6% -1% 627 619 635 51% EUR 580 16 47 -8 39% 41% 30% USD 61% 59% Avg cost of debt of 3.9% with BRL representing 12% of
Slide 27: Cost of debt increase mitigated by pre-hedge of interest rates
Cost of debt increase mitigated by pre-hedge of interest rates, declining weight of USD debt and recent decrease of benchmark interest rate in Brazil Cost of Debt1 2023 Bond Issuances and Rates Pre hedges 9M22 9M23 YoY Date Amount Maturity Implicit Yield Jun-23 €750m June 2028 2.5%2 Oct-23 €600m Apr
Slide 28: Recurring net profit of €1.0 Bn
Recurring Net Profit Recurring net Profit of €1.0 Bn, with YoY comparison reflecting the hydro crisis in 9M22, and supported by lower minorities in Brazil since 3Q23 Recurring Net Profit1 Recurring Net Profit €m €m Δ YoY 1,026 EBITDA 3,830 +784 D&A and 512 Provisions 1,288 -65 EBIT 2,542 +720 Net Fi
Slide 29: Net debt Sep-23 impacted by regulatory working capital
Net debt Sep-23 impacted by temporary increase of regulatory WC in Portugal, to be securitized in 4Q23; sound credit ratios Net Debt/EBITDA 3.3x Change in Net Debt € Bn 0.8 2.0 16.9 0.1 0.5 16.4 Organic cash-flow = €0.9Bn 3.9 RR 13.2 1.8 1.4 0.5 Regulatory working capital +€2.3bn in 9M23 mostly due
Slide 30: Strengthening strategic targets
We strengthen our strategic targets, reinforcing our ambition to lead the energy transition Our commitments Key targets BP 2021-25 BP 2023-26 Accelerated and Deployment ~4 GW/year ~4.5 GW/year sustainable growth Asset Rotation €1.6 Bn/year in AR; €0.3 Bn in gains €1.7 Bn/year in AR; €0.3 Bn in gains
Slide 31: Annex
Annex @edp
Slide 32: Macroeconomic indicators for main markets
Macroeconomic indicators for main markets 2022 2023 2022 2023 2022 2023 2022 2023 Inflation (CPI)1 7.9% 4.7% 8.8% 4.9% 8.1% 3.5% 9.4% 4.7% Weight of housing and 9.6% - 14.2% - 36.1% - 15.3%3 - utilities on CPI basket2 Deficit, GDP4 -1.9% -1.4% -4.9% -4.4% -4.0% -5.7% -5.8% -7.5% Gross Debt/GDP 114.7
Slide 33: Main market and macro assumptions
Main market and macro assumptions Pool Iberia €/MWh TTF €/MWh CO2 €/ton Inflation Europe1 % Inflation Brazil % Avg. IPCA / IGPM 168 123 90 9.2 5.6 81 81 126 3.9 3.6 82 59 35 3.2 2.1 2022 2024 2026 2022 2024 2026 2022 2024 2026 2022 2024 2026 2022 2024 2026 EUR/USD EUR/BRL EUR 7Y MidSwap % USD 7Y Tre
Slide 34: IR Contacts
IR Contacts E-mail: ir@edp.com Phone +351 210 012 834 Site: www.edp.com Investor presentation 34
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