Societatea Energetica Electrica S.a. · BVB:EL

Societatea Energetica Electrica — Electrica Group — Austria & CEE Investor Conference - London 2020

46 slides from Societatea Energetica Electrica's conference presentation, January 2020

  1. Slide 1: Electrica Group Presentation

    Electrica Group Presentation Austria & CEE Investor Conference - London 2020 January, 2020

  2. Slide 2: Content

    Content 1 Q3 2019 Financial Results Key Group Information Distribution Segment Overview Supply Segment Overview 2 Main Corporate Events 3 Appendices 2

  3. Slide 3: Q3 2019 Financial results

    Q3 2019 Financial results Curectrica

  4. Slide 4: Electrica is the most important national distribution operator and electricity supplier

    Key Group Information Electrica is the most important national distribution operator and the electricity supplier with the largest client base Geographical Electricity supply (9M 2019) presence ~3.54 million % ~18.5% 6.9 TWh household clients market share energy supplied on retail (August) market Cl

  5. Slide 5: Electrica Group is the only Romanian group listed on the BSE & LSE

    Key Group Information Electrica Group is the only Romanian group listed on the BSE & LSE and operates within distribution, supply & energy service segments Electrica Furnizare S.A. SDEE1) Transilvania Nord Electricity and natural gas Distribution Operator supply company HQ: Cluj-Napoca HQ: Bucharest

  6. Slide 6: Electrica is a Leading Player in Energy Distribution and Supply areas

    Key Group Information Electrica is a Leading Player in Energy Distribution and Supply areas Distribution Supply 13,2% Volumes 17,1% Volumes Distributed Supplied in in 2018 14,0% Electrica 2018 44.8 TWh distributors 50 TWh 39.4% 60,6% 12,2% 82,9% SD Muntenia Nord SD Transilvania Sud Electrica Furniza

  7. Slide 7: Summary Consolidated Financials

    Key Group Information Summary Consolidated Financials Revenues EBITDA Growth and Margin Performance (RON mn) EBITDA (RON mn) and EBITDA Margin (%) 5.603 5.613 373 378 18% 4.607 4.010 385 11% 12% 12% 258 5.230 5.235 3.752 4.223 601 706 681 549 2017 9M 2018 2018 9M 2019 2017 9M 2018 2018 9M 2019 Reven

  8. Slide 8: Consolidated EBITDA and net result evolution

    Key Group Information Consolidated EBITDA and net result evolution EBITDA (RON mn) Comments The consolidated EBITDA variation compared to the similar period of 2018 is RON -156 mn, due mostly to the impact of the negative variation of the energy margin (-134 mil. RON), thereof: • RON - 21 mn from th

  9. Slide 9: Dividend distribution

    Dividend distribution Key Group Information Distributed gross dividends (FY 2014 - 2018) (RON mn) Gross dividend per share (RON) and Dividend yield(1) (%) 291.6 6.9% 7.3% 6.8% 244.7 251.4 245.4 247.5 5.2% 6.1% 0.8600 0.7217 0.7415 0.7237 0,7300 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Divid

  10. Slide 10: Distribution highlights

    Distribution highlights Distribution segment overview Key figures (9M 2019) Financial results At the distribution segment level, EBITDA is decreasing with RON 77 mn (-14.6%), mainly due to: ~3.8 mn ▲ revenues: +74 mil. RON (+3.9%), from the increase of the total distributed quantity (+0.5%) and user

  11. Slide 11: SDTN

    SDTN Distribution segment overview Key figures (9M 2019) Financial results EBITDA is lower by RON 25 mn (-12.8%), mainly due to: ~1.29 mn ▲ revenues from distributed energy: +RON 21 mn (+2.4%), due to higher total quantity of Cluj Napoca users distributed electricity (0,5%), and to the positive evol

  12. Slide 12: SDTN (Cont'd)

    SDTN (Cont’d) Distribution segment overview Network losses costs Network losses Network losses (RON mn) (GWh) (%) 163 166 630 622 10,43% 10,34% 140 9,86% 9,86% 9,86% 9,47% 9,29% 9,37% 432 447 106 Reg. Realized Reg. Realized Reg. Realized Reg. Realized 2017 9M 2018 2018 9M 2019 2017 9M 2018 2018 9M 2

  13. Slide 13: SDTS

    SDTS Distribution segment overview Key figures (9M 2019) Financial results EBITDA is lower by RON 32 mn (-18.4%), due to: ▲ revenues from distributed electricity: +RON 13.4 mn (+2.4%), mainly from the increase in the ~1.16 mn total quantity of electricity distributed (+0,1%) and the positive evoluti

  14. Slide 14: SDTS (Cont'd)

    SDTS (Cont’d) Distribution segment overview Network losses cost Network losses Network losses (RON mn) (GWh) (%) 766 761 200 10,55% 10,19% 10,17% 188 10,17% 10,08% 9,17% 9,36% 8,86% 152 510 484 126 Reg. Realized Reg. Realized Reg. Realized Reg. Realized 2017 9M 2018 2018 9M 2019 2017 9M 2018 2018 9M

  15. Slide 15: SDMN

    SDMN Distribution segment overview Key figures (9M 2019) Financial results The EBITDA decrease of RON 26.7 mn, or 20%, compared to 9M 2018, was mainly due to: ~1.33 mn ▲ network losses cost higher by RON 24.1 mn, as a result of the 19.3% increase in the users electricity purchase price, impact parti

  16. Slide 16: SDMN (Cont'd)

    SDMN (Cont’d) Distribution segment overview Network losses cost Network losses Network losses (RON mn) (GWh) (%) 901 880 240 11,71% 230 11,31% 10,38% 10,57% 10,35% 9,55% 9,16% 9,16% 172 584 569 148 Reg. Realized Reg. Realized Reg. Realized Reg. Realized 2017 9M 2018 2018 9M 2019 2017 9M 2018 2018 9M

  17. Slide 17: Electrica Serv

    Electrica Serv Distribution segment overview Revenues General overview (RON mn) 359 Electrica Serv, a wholly-owned subsidiary of ELSA, provides repair and other energy ancillary services to third parties and various services to the companies within the group (vehicles rental, building rental etc.) K

  18. Slide 18: Supply market

    Supply market Supply segment overview Overall Market Share - 8 Months 2019 Key Facts Electrica Furnizare 18.54% The supply market consists of regulated and competitive segments: Others (<4% each) 25.51% • The regulated segment comprises 5 bound suppliers of last resort (SoLR), integrated within the

  19. Slide 19: Supply segment

    Supply segment Supply segment overview Coverage Key figures (9M 2019) Financial results The significant decrease in EBITDA, of RON 88.8 mn ~3.54 mn compared to 9M 2018, was due to: Electrica Furnizare consumers ▲ Higher electricity purchase costs for supply and balancing compared to the same period

  20. Slide 20: Supply business overview

    Supply business overview Supply segment overview Volume of Electricity Supplied on Retail Market Number of Consumers (TWh) Consumers (‘000’s) Regulated Competitive Regulated Competitive 9.2 3,577 3,548 3,541 3,544 8.5 215 246 253 265 4,2 6.9 6.3 3,6 2,7 3,3 3.362 3.302 3.288 3.279 5,0 4,9 3,6 3,6 20

  21. Slide 21: Main Corporate Events

    Main Corporate Events Curectrica

  22. Slide 22: Main corporate events in Q3 2019 and up to date

    Main corporate events in Q3 2019 and up to date Main Corporate Events Electrica’s General Meetings of Shareholders:  OGMS dated 14 November 2019: • The shareholders approved the filing of a civil action in court underscoring the liability of the persons who have held the positions of directors and

  23. Slide 23: Other relevant events in Q3 2019 and up to date

    Other relevant events in Q3 2019 and up to date Main Corporate Events Other events: • 23 September 2019 – The rating agency Fitch Ratings granted the BBB rating (Investment Grade) to Electrica Group Intragroup agreements: Beneficiary Agreement’s scope Amount (RON th) Date of entry into force Expiry

  24. Slide 24: Appendices

    Appendices Curectrica

  25. Slide 25: Background and basis of preparation for the financials

    Background and basis of preparation for the financials Appendices  Historical consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as endorsed by the European Union (IFRS-EU). Background  The presentation and functional currency is Rom

  26. Slide 26: Consolidated budget 2019 (RON mn) – IFRS values

    Appendices Consolidated budget 2019 (RON mn) – IFRS values The individual significant variances are detailed below: Budget B2019 B2019 1. The revenues’ increase of RON 420.7 mn is the net effect of: Indicator Actual 2018 vs. A2018 vs. A2018 % 2019 • Increase in the energy revenues of RON 430.9 mn, m

  27. Slide 27: 2019 budget – distribution companies

    2019 budget – distribution companies Appendices The methodology for establishing the distribution tariffs (“the methodology”) for the 4th regulatory period – RP4 (2019- 2023) was approved through ANRE Order no. 169/2018, whereas the new regulated rate of return (RRR) was approved through ANRE Order

  28. Slide 28: 2019 Budget vs Estimate 2018 – SDTN

    Appendices 2019 Budget vs Estimate 2018 – SDTN B2019 vs. E2019 B2019 vs. RON mn E2018 B2019 [Abs.] E2019 [%] Revenues from distributed energy 574.5 602.3 27.7 4.8%  Network losses cost: the value approved by ANRE is of RON 145,4 mn, Other energy revenues 32.6 27.7 (5.0) -15.2% determined by an ex-a

  29. Slide 29: 2019 Budget vs Estimate 2018 – SDTS

    Appendices 2019 Budget vs Estimate 2018 – SDTS B2019 vs. E2019 B2019 vs. E2019 RON mn E2018 B2019 [Abs.] [%] Revenues from distributed energy 596.6 620.9 24.3 4.1% Other energy revenues 30.0 28.8 (1.2) -4.1%  Network losses cost: the value approved by ANRE is of RON 176.6 mn, determined by an ex-an

  30. Slide 30: 2019 Budget vs. Estimate 2018 – SDMN

    Appendices 2019 Budget vs. Estimate 2018 – SDMN B2019 vs. E2019 B2019 vs. E2019 RON mn E2018 B2019 [Abs.] [%] Revenues from distributed energy 554.8 603.9 49.1 8.8% Other energy revenues 42.9 29.1 (13.8) -32.2% Income from internally generated CAPEX 14.8 24.9 10.1 68.6%  Network losses cost: the va

  31. Slide 31: Consolidated budget for 2019 – Supply segment

    Appendices Consolidated budget for 2019 – Supply segment • The selling prices for customers of the supplier of last resort (SoLR), for the period January – February 2019, were established based on ANRE regulation (ANRE Order no. 39/2018); • The selling prices for the customers of the SoLR , for the

  32. Slide 32: 2019 Budget vs. Actual 2018 – Electrica Furnizare

    Appendices 2019 Budget vs. Actual 2018 – Electrica Furnizare Energy margin: B2019 vs. B2019 vs. - competitive segment margin in line with historical profitability on medium term; Indicator Actual 2018 Budget 2019 decrease of the regulated segment margin A2018 A2018 % Electricity and gas revenues 3,5

  33. Slide 33: Important Regulatory Changes – Distribution Activity

    Important Regulatory Changes – Distribution Activity Annexes  RP4 Regulations on Distribution tariffs  The methodology for setting the distribution tariffs for RP4 was approved by ANRE Order no.169/18 September 2018, amended by ANRE Order no. 193/18 December 2018 and by ANRE Order no. 60/23 May 20

  34. Slide 34: Changes in Distribution Regulation – RP4 Regulated Revenue and Tariff Calculation

    Annexes Changes in Distribution Regulation – RP 4 – 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 5  The starting point

  35. Slide 35: Methodology for determining distribution tariffs – Summary RP4 vs RP3

    Annexes Changes in Distribution Regulation – Methodology for determining distribution tariffs – Summary PR4 vs RP3 RP3 RP4 1 RRR = 5.66% applied to RAB, to which a supplement of 1% is added for Return RRR (7.7%) applied to RAB. RRRxRAB new network investments RAB includes the regulated net amount of

  36. Slide 36: Methodology for determining distribution tariffs – Comparative elements RAB

    Annexes Changes in Distribution Regulation – Methodology for determining distribution tariffs – Comparative elements PR4 vs RP3 RAB & Investment RP3 methodology RP4 methodology 1. RAB includes: assets used for the distribution service, which are 1. RRR includes: Assets used for the distribution serv

  37. Slide 37: Methodology for determining distribution tariffs – Opex & NL

    Annexes Changes in Distribution Regulation – Methodology for determining distribution tariffs – Comparative elements PR4 vs RP3 Opex & NL RP3 methodology RP4 methodology Controlable OPEX 1. OpexC 2019 is established based on formulae 1. OpexC 2019 is not established based on formulae, but by compara

  38. Slide 38: Important Regulatory Changes – Supply Activity

    Annexes Important Regulatory Changes – Supply Activity GEO no. 114/2018 concerning measures in the area of public investment and fiscal-budgetary measures, amended by GEO no.19/2019: Primary legislation with  The monetary contribution charged from the energy license holders equals 2% of the turnove

  39. Slide 39: Shareholder Structure at 31 December 2019

    Shareholder Structure at 31 December 2019 Appendices Ownership structure on 31 December 2019 Geographical distribution of shareholders outside Romania Total number of shares: 48,933,238 4,41% The Romanian state through the Ministry of Energy EBRD, UK Electrica SA Bank of New York Mellon (DRS - LSE)

  40. Slide 40: Monthly volume and average price of Electrica's shares and GDRs

    Monthly volume and average price of Electrica’s shares and GDRs Appendices 10.000.000 13,00 9.000.000 12,50 8.000.000 12,00 7.000.000 11,50 6.000.000 11,00 5.000.000 10,50 4.000.000 10,00 3.000.000 9,50 2.000.000 9,00 1.000.000 8,50 - 8,00 BSE - Shares - Monthly volume LSE - GDRs - Monthly volume BS

  41. Slide 41: Comparative evolution with BSE indices

    Comparative evolution with BSE indices (Jan 2019 – 31 Decembrie 2019) Appendices % 140,00 137,27 135,00 135,13 134,45 130,00 130,26 125,00 120,00 115,00 110,00 109,79 105,00 101,04 100,00 95,00 90,00 EL (BSE) Performance BET Performance BET-FI Performance BET-NG Performance BET-XT Performance ELSA (

  42. Slide 42: Electrica closing price vs BET-TR

    Electrica closing price vs BET-TR (Jan 2019 – 31 December 2019) Appendices 50,00 40,00 EL: 17.3% 30,00 BET-TR: 46.9% 20,00 10,00 0,00 -10,00 BET-TR Pretul Electrica ajustat cu dividendele Source: Company data; BSE 42

  43. Slide 43: Glossary

    Glossary Appendices ANRE Romanian Energy Regulatory Authority LV Low Voltage BoD Board of Directors MV Medium Voltage BSE Bucharest Stock Exchange MWh MegaWatt hour CAPEX Capital Expenditure NBV Net Book Value NL Network Losses DAM Day Ahead Market OGMS Ordinary General Meeting of Shareholders DSO D

  44. Slide 44: 2020 Financial Calendar

    2020 Financial Calendar Appendices  28 February Publication of the annual preliminary results - 2019  10 March Investor and analyst teleconference for 2019 consolidated financial results  29 April General Meeting of Shareholders for the approval of the 2019 annual financial results  30 April Rel

  45. Slide 45: 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 Q3 2019 financi

  46. Slide 46: Q&A

    Q&A 46

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