Terna S.p.a. · MIL:TRN
Terna — Investor Day (March 2024)
44 slides from Terna's investor day presentation, Mar 19, 2024
Slide 1: A Wider Vision
CA MARK PITAL ETS DAY Milano - 1 9 marzo 2024 A Wider Vision aa lerna (Aes Driving Energy
Slide 2: Agenda
Agenda Evolution of Terna’s Role 3 Strategy 9 FY 2023 Results 15 2024 – 2028 Group Financial Targets and Dividend Policy 22 Closing Remarks: A Wider Vision 30 2
Slide 3: Evolution of Terna's Role
Evolution of Terna’s Role aa lerna (Aes Driving Energy
Slide 4: The Role of Terna as a TSO
Evolution of Terna’s Role The Role of Terna as a TSO 4
Slide 5: EU and Italian decarbonization targets
Evolution of Terna’s Role EU and Italian decarbonization targets Targets for 2030 CO2eq emissions 55% reduction (EU) 40% (% vs. 1990) Clean Energy Package Fit-for-55 RES Share in electricity 55% 65% consumption (IT) (%) NECP'19 NECP'23 PV and wind installed 108 capacities (IT) 72 (GW) NECP'19 NECP'2
Slide 6: Key Factors for Italian decarbonization targets achievement
Evolution of Terna’s Role Key Factors for Italian decarbonization targets achievement Accelerate the Network The system needs to System Operator development infrastructures foster the activities need to process of necessary to development of new guarantee the generation capacity increase the forms o
Slide 7: Terna's leadership in the Twin Transition
Evolution of Terna’s Role Terna’s leadership in the Twin Transition Energy Digital Transition Transformation Affordability – Investment growth to Renewable generation Digitalization – Rise in digital investment to integrate RES, ensuring AI support the Plan’s execution network resilience and Securit
Slide 8: Green by Nature, Social by Purpose
Evolution of Terna’s Role Green by Nature, Social by Purpose Local Communities Energy Sustainable Just Transition Transition Value chain Society Terna Employees Creation Suppliers Sustainable Growth of Shared Value A Just Transition as a strategic objective 8
Slide 9: Strategy
Strategy aa lerna (Aes Driving Energy
Slide 10: 2024-2028 Investment Plan
Strategy 2024-2028 Investment Plan TOTAL 2024-2028 CAPEX €bn +65% Focus on Digital 16.5 1.0 ~2.0 €bn Initiatives examples: 10.0 – Building Information 15.5 Digital Modelling (BIM) scale-up Investments – AI and co-pilot algorithms – Digital Twin – Predictive Maintenance Plan 2021-2025 Plan 2024-2028
Slide 11: Terna's main development projects in the 2024-2028 Plan
Strategy Terna’s main development projects in the 2024-2028 Plan Milano Milano-Montalto Colunga-Calenzano Suvereto Adriatic Link Central Link SACOI 3 Montalto Codrongianos Montecorvino Terra Mala Tyrrhenian Link Partanna Bolano-Annunziata Italy-Tunisia Chiaramonte Gulfi-Ciminna 11
Slide 12: Benefits for the system
Strategy Benefits for the system Sustainability: Integrate Renewable Affordability: minimize Energy Sources and support the electricity system costs development of new forms of flexibility Security: ensure electricity system resilience and performance 12
Slide 13: Digital Transition & Innovation
Strategy Digital Transition & Innovation Network Engineering Transmission Operator Guarantee the progress and execution Optimize costs and guarantee the of projects through project management service level of the assets, working on the optimization and digitalization of adoption of new systems and g
Slide 14: ESG Ambitions
Strategy ESG Ambitions Green by Nature Social by Purpose Science Based Target: alignment with 1.5 C° ambition, Safety: commitment to maximize safety in the workplace entailing the reduction of its absolute scope 1 and 2 GHG during the daily operations within the timeframe of the plan emissions 46% b
Slide 15: FY 2023 Results
FY 2023 Results aa lerna (Aes Driving Energy
Slide 16: Key Figures
FY 2023 Results Key Figures FY 2023 FY 2022 ∆ vs FY 2022 Actual Guidance Actual €mn €bn €mn Revenues 3,187 3.11 2,964 +7% EBITDA 2,169 2.12 2,059 +5% Group Net Income1 885 857 +3% EPS2€cents 44.0 43 42.6 Capex 2,290 2.2 1,757 +30% Net Debt 10,494 8,576 Growth in all P&L metrics, with 30% Capex accel
Slide 17: Revenues
FY 2023 Results Revenues REGULATED ACTIVITIES NON-REGULATED ACTIVITIES €mn €mn +128 +5.0% +22.4% 2,542 2,670 120 -6 13 81 67 51 95 517 56 422 2,419 2,539 Transmission & Dispatching 517 Other 422 IFRIC12 FY22 ∆ ∆ ∆ FY23 FY22 ∆ FY23 Transmission & Other IFRIC12 Non Regulated Dispatching and Internatio
Slide 18: EBITDA
FY 2023 Results EBITDA TOTAL EBITDA REGULATED ACTIVITIES €mn €mn 79 +109 +5.3% 2,007 2,086 FY22 ∆ FY23 NON-REGULATED ACTIVITIES1 2,059 2,169 €mn 31 83 52 FY22 ∆ FY23 FY22 FY23 EBITDA increase driven by all activities Notes: figures may not add up due to rounding off 1) including also International A
Slide 19: From EBITDA to Net Income
FY 2023 Results From EBITDA to Net Income €mn 806 2,169 118 364 1,362 -3 -3 885 857 EBITDA D&A EBIT Net Taxes (Profit)/Loss Minority Group Group Financial from Interest Net Income Net Income Expenses discontinued FY22 operation >3% Group Net Income increase vs. 2022 Notes: figures may not add up due
Slide 20: Capex
FY 2023 Results Capex TOTAL CAPEX REGULATED CAPEX €mn €mn +533 +30.4% 2,290 1,757 106 32% Development 89 2,184 Defence 2,184 56% 1,668 Asset Renewal & Efficiency 12% FY22 FY23 Regulated Non Regulated and Other 30% increase in Capex Notes: figures may not add up due to rounding off 20
Slide 21: Cash Flow & Net Debt Evolution
FY 2023 Results Cash Flow & Net Debt Evolution €mn +1,918 10,494 728 8,576 2,290 1,636 536 Free Cash Flow to Equity -1,190 1 Dec.31, Operating Δ WC & Other Capex Dividends,Equity Dic.31, 2022 Cash Flow & 2 2023 Others Strong Operating cash flow generation Notes: figures may not add up due to roundin
Slide 22: 2024 – 2028 Group Financial Targets and Dividend Policy
2024 – 2028 Group Financial Targets and Dividend Policy
Slide 23: Domestic Regulated Activities: Capex and RAB
2024 – 2028 Group Financial Targets and Dividend Policy Domestic Regulated Activities DOMESTIC REGULATED CAPEX RAB EVOLUTION4 €bn €bn +60% CAGR2023-2028 8% 15.52 30.6 9.61 20.4 22.5 3 Plan 2021-2025 Plan 2024-2028 2023 2024 2028 Notes: 1) Gross of 0.1 €bn of EU Contributions 2) Gross of 1.1 €bn of E
Slide 24: Domestic Regulated Activities: Capex by category
2024 – 2028 Group Financial Targets and Dividend Policy Domestic Regulated Activities CATEGORY CUMULATED CAPEX MAIN PROJECTS – Tyrrhenian Link – SA.CO.I 3 Development 10.8€bn – Adriatic Link – Solving grid congestions – Central Link – RES integration – Quality of Service Asset Renewal and Efficiency
Slide 25: Regulatory milestones
2024 – 2028 Group Financial Targets and Dividend Policy Regulatory milestones 2024 2025 2026 2027 2028 Decision on the output- WACC update for the Start of new WACC based regulation for the ROSS Integrale regulation period 2025-2027 period period 2024-2027 Start of the new regulatory period, with up
Slide 26: Non-Regulated Activities
2024 – 2028 Group Financial Targets and Dividend Policy Non-Regulated Activities Opportunity selection criteria Equipment Energy Services Margin Optimization Synergy Maximization Interconnector Connectivity Portfolio scale-up EBITDA ~600€mln cumulated in 5 years 26
Slide 27: Guidance 2024 and 2028
2024 – 2028 Group Financial Targets and Dividend Policy Guidance 2024 and 2028 FY 2023 FY 2024 FY 2028 Actual Guidance Guidance €bn €bn €bn Revenues 3.19 3.55 4.60 EBITDA 2.17 2.42 3.25 Capex1 2.29 2.6 16.5 Cumulated 2024-2028 EPS€cents 44 49 55 Increasing growth and value creation Notes: P&L values
Slide 28: Yield & Growth
2024 – 2028 Group Financial Targets and Dividend Policy Yield & Growth EPS DIVIDEND POLICY €cent • DPS for the Plan period: 4% minimum annual growth, taking 2023 as the reference year. • For 2024, DPS equal to the higher of 4% growth vs. 2023, and 75% payout ratio. €cent 55 44 341 2023 2028 2023 202
Slide 29: Financial Efficiency and Financial Structure
2024 – 2028 Group Financial Targets and Dividend Policy Financial Efficiency and Financial Structure – Gross Debt @ ~87% Fix rate1 – FFO/Net Debt @~11% in 2028 – Average duration of ~6 years1 – Strong commitment to maintain current rating level – Average Cost of Net Debt 2024-2028 @ 3.3% FINANCIAL R
Slide 30: Closing Remarks: A Wider Vision
Closing Remarks: A Wider Vision
Slide 31: A Wider Vision
Closing Remarks: A Wider Vision 1 Fostering investments to enable the Twin Transition 2 Ensuring a balanced mix of yield and growth 3 Maintaining financial stability and low-risk profile A Wider Vision A Twin Transition for a Just Transition 31
Slide 32: Annexes
Annexes aa lerna (Aes Driving Energy
Slide 33: 2024 Total Grid Fee update
Annexes 2024 Total Grid Fee update1 2023 2024 Transmission Transmission 2.02€bn 2.41€bn Resolution 719/2022 Resolution 632/2023 35% + + 48% Dispatching Dispatching 0.12€bn 0.15€bn 17% Resolution 738/2022 Resolution 625/2023 = = RAB remuneration Allowed Opex 2.14€bn 2.56€bn Allowed D&A Notes: 1) ARER
Slide 34: P&L Targets
Annexes P&L Targets REVENUES EBITDA €bn CAGR ~8% €bn CAGR >8% 3.55 4.60 3.25 3.19 2.42 2.17 2023 2024 2028 2023 2024 2028 Notes: P&L values restated for International deconsolidation 34
Slide 35: Consolidated Income Statement
Annexes Consolidated Income Statement1 € mn FY23 FY22 Δmn Δ% Total Revenue 3,187 2,964 222 7.5% Regulated Activities 2,670 2,542 128 5.0% Transmission 2,108 1,969 139 7.1% Dispatching 431 450 -19 -4.2% Other² 51 56 -6 -9.9% IFRIC12 81 67 13 19.6% Non Regulated and International Activities 517 422 95
Slide 36: Consolidated Balance Sheet
Annexes Consolidated Balance Sheet € mn Dec. 31,2023 Dec. 31,2022 Δmn PP&E 17,597 16,201 1,396 Intangible Asset 867 776 91 Financial Inv. and Other 501 509 -8 Total Fixed Assets 18,965 17,485 1,479 Net WC -2,175 -2,733 558 Funds -33 -68 35 Net Capital Invested 16,757 14,684 2,073 Net Assets Held for
Slide 37: Consolidated Cash Flow
Annexes Consolidated Cash Flow € mn FY23 FY22 Total Net Income 883 858 D&A 1 788 719 Net Change in Funds -35 20 Operating Cash Flow 1,636 1,596 Δ Working Capital & Other 2 -536 932 Cash Flow from Operating Activities 1,100 2,528 Capital Expenditures -2,290 -1,757 Free Cash Flow to Equity -1,190 771
Slide 38: Disclaimer
Disclaimer THIS DOCUMENT HAS BEEN PREPARED BY TERNA S.P.A. (THE “COMPANY”) FOR THE SOLE PURPOSE DESCRIBED HEREIN. IN NO CASE MAY IT BE INTERPRETED AS AN OFFER OR INVITATION TO SELL OR PURCHASE ANY SECURITY ISSUED BY THE COMPANY OR ITS SUBSIDIARIES. THE CONTENT OF THIS DOCUMENT HAS A MERELY INFORMATI
Slide 39: Notes
Notes CAPITAL MARKETS DAY
Slide 40: Notes
Notes CAPITAL MARKETS DAY
Slide 41: Notes
Notes CAPITAL MARKETS DAY
Slide 42: Notes
Notes CAPITAL MARKETS DAY
Slide 43: Corporate ESG Performance
Corporate ESG Performance INDUSTRY TOP RATED RATED BY Iss ESG> Member of Dow Jones Sustainability Indices Powered by the S&P Global CSA ESG Leaders Indices STOXX Euronext® ESG Eurozone Biodiversity Leaders PAB Index 1 EURONEXT T indices ECPINS Sy Member 2023/2024 CDP SUPPLIER ENGAGEMENT LEADER 2023
Slide 44: yee
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