Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — H1 2014 Earnings Presentation
31 slides from Edp's earnings presentation, Aug 1, 2014
Slide 1: Results Presentation 1H14
Results Presentation 1H14 Lisbon, August 1st, 2014 0
Slide 2: Disclaimer
Disclaimer This document has been prepared by EDP - Energias de Portugal, S.A. (the "Company") solely for use at the presentation to be made on the 1st of August 2014 and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where this
Slide 3: 1H14: Highlights of the period
1H14: Highlights of the period EBITDA: €2,002m, +1% YoY EBITDA in Iberia (ex-wind): +4% YoY excluding one-offs (€56m in 1H13 vs. €129m in 1H14) Strong hydro, good energy management and tight cost control compensate regulatory cuts EDP Renováveis: EBITDA -7% YoY New capacity additions not enough to c
Slide 4: 1H14: Highlights of the period
1H14: Highlights of the period Net debt -€0.2bn YTD to €16.9bn in Jun-14 €672m annual dividend (€0.185 per share) fully paid in cash to EDP shareholders in May-14 Net Investments(1): €633m (-18% YoY); Capex focused on hydro in Portugal and wind projects in US Sale to CTG of 50% of Jari/CC hydro proj
Slide 5: 1H14 Operating Headlines: Hydro & wind represented 79% of EDP's power production
1H14 Operating Headlines: Hydro & wind represented 79% of EDP’s power production Installed Capacity Generation Breakdown by Technology (GW) (TWh) % Chg. YoY % Chg. YoY +0.4% +3% 22.0 22.1 32.2 31.2 Other (1) 2% 1% 12% Other (1) 1.1 -28% 0.8 Coal 12% Coal -4% 5.6 CCGT 5.9 17% 17% 0.2 CCGT 0.4 -50% Hy
Slide 6: EBITDA 1H14: Breakdown by division
EBITDA 1H14: Breakdown by division EBITDA Breakdown by division (€ million) % Chg. YoY +1% €1,973m €2,002m Liberalized Activities Iberia 11% +40% 16% EDP Brasil 16% -15% 13% EDP Renováveis 28% -7% 25% Regulated 27% +6% 28% Networks Iberia (1) LT Contracted 19% -3% 18% Generation Iberia 1H13 1H14 Exc
Slide 7: Operating costs: Opex/Gross Profit at 27% in 1H14
Operating costs: Opex/Gross Profit(1) at 27% in 1H14 Operating costs(2): 1H14 vs. 1H13 1H14 YoY Inflation (3) (€ million) (%) Brazil EDPR Iberia -3% 777 752 148 133 -10% 6.2% 157 154 -2% 472 464 -2% 0.4% 0.0% 1H13 1H14 Portugal Spain Brazil (IGP-M) Iberia: -2% YoY on successful execution of OPEX III
Slide 8: Net Investments: Execution of Selective Growth
Net Investments: Execution of Selective Growth Net Investments breakdown by division (1) (€ million) -18% €772m Other 55 Distribution Brazil 43 119 €633m Generation & Other Brazil 61 EDP Renováveis 140 45 11 117 Iberian Regulated Networks 262 163 Including €96m related to acquisition of 5% in Naturg
Slide 9: Portuguese Electricity System: Regulatory receivables
Portuguese Electricity System: Regulatory receivables Regulatory receivables in the Portuguese electricity system (€bn) Owed to Financial Investors (Securitized) Owed to EDP +0.3 +0.8 +0.1 5.1 5.3 +0.1 +0.2 +0.1 4.8 +0.3 +0.3 4.0 2.4 3.0 1.9 2.2 2.4 2.1 Dec-12 1Q13 2Q13 3Q13 4Q13 Dec-13 1Q14 2Q14 Ju
Slide 10: EDP's net regulatory receivables by Jun-14
EDP’s net regulatory receivables by Jun-14 EDP’s Regulatory Receivables (€ million) -€306m 2,753 2,747 2,441 Portugal (2) 2,288 2,422 2,078 Spain 365 264 184 Brazil (1) 61 180 100 Jun-13 Dec-13 Jun-14 Portugal: -€344m (tariff deficit/deviations to EDP: +€390m in 1Q14, +€298m in 2Q14; securitisations
Slide 11: Net debt
Net debt EDP consolidated net debt position: Jun-14 EDP consolidated debt by currency: Jun-14 (€ million) (%) PLN 4% raised at EDP Brasil USD 1% 16,874 Bank loans and capital markets; 19% Ring-fenced policy essentially ‘non- BRL EDP Brasil 628 recourse’ to EDP S.A. 7% EDP Renováveis 590 73% 3% raise
Slide 12: Change in Net debt
Change in Net debt Change in Net Debt: Jun-14 vs. Dec-13 (€ billion) Regulatory -€0.2bn Receivables 17.1 0.9 16.9 0.4 0.4 0.7 2.7 2.4 14.3 14.4 Net Debt Free Cash Regulatory Dividends Paid Expansion Net Debt Dec-13 Flow (1) Receivables and Capex & Jun-14 Securitizations Net Invest. (2) Net debt down
Slide 13: Financial Liquidity position
Financial Liquidity position (€ million) Sources of liquidity (Jun-14) Maximum Number of Instrument Utilised Available Maturity Amount counterparties Revolving Credit Facility 3,150 21 0 3,150 Jun-2019 Domestic Credit Lines 159 8 0 159 Renewable Underwritten CP 100 1 0 100 Oct-2016 Total Credit Line
Slide 14: Net Debt Maturity Profile
Net Debt Maturity Profile EDP consolidated debt maturity profile as of Jun-14 (€ billion) Commercial paper Adjusted Avg. Debt Other subsidiaries(1) Maturity: 4.0 years EDP SA + BV Brazil: €120M Project Finance: €58M 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2014 2015 2016 2017 2018 2019 2020 2021 > 2021 A
Slide 15: Main sources and uses of funds
Main sources and uses of funds Sources of funds Use of funds Cash & Equivalents (Jun-14) : €1.6bn Refinancing needs in 2014: Bonds maturing in Dec-14 €0.4bn Available Credit Lines (Jun-14): €3.4bn Loans maturing in 2014: €0.1bn Total 2014 €0.5bn Refinancing needs in 2015: €2.7bn TOTAL €5.0bn TOTAL €
Slide 16: Net Profit breakdown
Net Profit breakdown (€ million) 1H13 1H14 ∆% ∆ Abs. EBITDA 1.973 2.002 +1% +29 Net Depreciations and Extension of useful life of thermal plants in 722 698 -3% -24 Provisions Iberia and cogen impairments in 4Q13 EBIT 1.250 1.304 +4% +53 Decrease in avg. net debt (Cost of debt: 4.6%) Financial Result
Slide 17: Business Areas
Business Areas
Slide 18: Weather and market conditions in Iberia
Weather and market conditions in Iberia Hydro & Mini-Hydro Power Production – Portugal (1) Avg. Pool Price in Spain (TWh) (€/MWh) Hydro Coefficient 2Q14 10.3 1Q14 40.0 8.9 37.3 33.0 26.1 1H13 1H14 1H13 1H14 1.27 1.37 Portugal wind production factor EDP: electricity production as % of sales to client
Slide 19: Iberia: Electricity and Thermal power demand
Iberia: Electricity and Thermal power demand Electricity Demand in Iberian Market Thermal Power Production in Iberian market (∆% YoY) (TWh) % Weight in Iberia in 1H14 % Chg. YoY -3% 28 1 5 1 100% 17% 83% 3 28 Iberian Portugal Spain Market 0.4% -0.9% -1.2% 1H13 Demand Chg. Hydro Chg. Special Nuclear
Slide 20: Liberalised Energy Activities Iberia (16% EBITDA)
Liberalised Energy Activities Iberia (16% EBITDA) EDP Liberalised Power Plants Iberia – Production EDP Coal vs. CCGT – Load factors in 2012 and 2013 (TWh) (%) % Chg. YoY 1H14 1H14 +19% 7.5 7% 6.3 Nuclear 8% +3% 47% +48% 58% 38 37 Hydro Coal 38% 0% 32% -50% 3 1 CCGT 7% 3% 1H13 1H14 Coal CCGT Producti
Slide 21: Liberalised Energy Activities Iberia (16% EBITDA)
Liberalised Energy Activities Iberia (16% EBITDA) EBITDA Liberalised Activities in Iberian Market Lower sourcing costs along with (€ million) long position in clients 3 hydro plants transferred from PPA/CMEC: +1.7TWh in 1H14 +40% Avg. generation cost -31% YoY on higher weight of hydro 315 Long posit
Slide 22: Long Term Contracted Generation Iberia (18% of EBITDA)
Long Term Contracted Generation Iberia (18% of EBITDA) EBITDA Adjusted EBITDA (1) (€ million) (€ million) PPA/CMEC Special regime PPA/CMEC Special regime -3% -10% 368 368 356 333 -23% -23% -1% -8% 1H13 1H14 1H13 1H14 Adjusted EBITDA -10% on the transfer of 3 hydro plants from PPA/CMEC to liberalised
Slide 23: Regulated Energy Networks Iberia (28% of EBITDA)
Regulated Energy Networks Iberia (28% of EBITDA) EBITDA Adjusted EBITDA (1) (€ million) (€ million) Gas Iberia Gas Iberia Electricity Spain Electricity Spain Electricity Portugal Electricity Portugal +7% +1% 559 522 466 471 -33% 0% -7% -7% +33% +3% 1H13 1H14 1H13 1H14 Electricity Portugal: Tight cos
Slide 24: EDP Renováveis (25% of EBITDA): Growth mitigated by regulatory changes in Spain
EDP Renováveis (25% of EBITDA): Growth from capacity additions mitigated by regulatory changes in Spain Installed Capacity Wind Power Production EBITDA (MW) (GWh) (€ million) Iberia North America Other (1) +6% +4% -7% 10,965 10,323 543 7,481 7,762 506 +2% 35% 37% -17% 36% 45% 40% 38% +0% +31% 13% 11
Slide 25: Brazilian Electricity System: 2Q14 environment
Brazilian Electricity System: 2Q14 environment Hydro reservoirs per region 2Q14 developments (%) Jun-13 Mar-14 Jun-14 May/Jun-14: Strong decline of rationing risk on slowdown of 95% 92% 100% demand growth and improved hydro conditions in the South 80% 60% 36% 37% Apr-14 A-0 generation auction: avg.
Slide 26: EDP Brasil (13% of EBITDA): Reported EBITDA in local currency +1% YoY
EDP Brasil (13% of EBITDA): Reported EBITDA in local currency +1% YoY, adjusted EBITDA -12% YoY EDP Brasil reported EBITDA EDP Brasil Adjusted(1) EBITDA (BRL million) (BRL million) Generation & Other Distribution Generation & Other Distribution +1% -12% 830 838 878 28 770 -92% 346 393 -6% 369 809 +6
Slide 27: Outlook
Outlook
Slide 28: EDP Brasil: 2H14 prospects
EDP Brasil: 2H14 prospects Generation Distribution Regulatory receivables of R$539m (€180m) as of Jun-14: Hydro Generation Scaling Factor (GSF) (1) (%) Revenues to be collected/booked at EBITDA level in 2H14/2015 Jul-14: electricity generation costs continued high 99% (avg. spot price in Jul-14: ~R$
Slide 29: Outlook for 2014
Outlook for 2014 EBITDA Breakdown (%) Liberalised 14% 1H14: strong hydro resources and successful energy management 16% Activities Iberia 2H14: assumes normalized hydro production and stable energy prices Brazil 13% 13% Distribution: positive impact from tariff updates in Aug/Oct-14, cash proceeds f
Slide 30: A resilient business model in a challenging environment
A resilient business model in a challenging environment Resilient performance EBITDA: +1% enhanced by Net profit: +12% diversification OPEX III cost savings corporate program: ~€73m in 1H14 (anticipation of 2015 target) Profitable Growth Expansion capex: Execution of new hydro in Portugal and Brazil
Slide 31: IR Contacts
IR Contacts Miguel Viana, Head of IR Sónia Pimpão Elisabete Ferreira Ricardo Farinha João Machado Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Visit EDP Website Next Events Sept 10th: BBVA Iberian Conference and BoA-ML High Yield Site: www.edp.pt Conference in London Sept 11th: Morgan Stanle
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