Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — FY2015 Earnings Presentation
30 slides from Edp's earnings presentation, Mar 4, 2016
Slide 1: Results Presentation 2015
Results Presentation 2015 Lisbon, March 4th, 2016 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 4th of March 2016 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: 2015: Key Highlights
2015: Key Highlights EBITDA: €3,924m, +8% Positive impact from value accretive deals justifies non recurrent items Adjusted EBITDA: €3,483m, +2% Positive contribution from new capacity (+8%) in renewables and Brazil (PPA/long term contracted) Penalised by very low hydro volumes and energy management
Slide 4: Non recurrent items impacting net profit in 2015: mostly related to asset allocation strategy
Non recurrent items impacting net profit in 2015: mostly related to asset allocation strategy Impact on EDP’s 2015 Net Profit Acquisition by EDP Brasil of Eneva’s remaining 50% in Pecém I (coal plant with PPA): Defensive move due to our partner’s distress; deal agreed at peak of hydro crisis (Dec-14
Slide 5: Net investments 2015-2016: Concentrated on long-term contracted renewables & regulated networks
Net investments 2015-2016: Concentrated on long-term contracted renewables & regulated networks Net Investments Breakdown: 2015 and 2016E (%) 1.7 Environmental upgrade at our most efficient coal plants Spain Other 6% 2016: Denox to be fully commissioned at Aboño 2 and Soto 3 New Hydro Portugal 17% ~
Slide 6: Hydro & wind volumes in our key markets: 38% decline in EDP's hydro production
Hydro & wind volumes in our key markets: 38% decline in EDP’s hydro production in Iberia Hydro Deficit (1-GSF) - Brazil EDP Hydro, Wind and Solar Production (Deviation vs. assured hydro contracted volumes) (TWh) % Chg. YoY -14% -9% -15% 42.9 Hydro Brazil 7.2 36.9 Hydro Coefficient – Portugal -23% (D
Slide 7: Adjusted EBITDA: +2% in 2015 driven by capacity expansion, adverse weather Iberia
Adjusted EBITDA: +2% in 2015 driven by capacity expansion by EDPR/EDP Brazil, adverse weather Iberia Adjusted EBITDA in 2015 2015 Adjusted EBITDA Breakdown(1) (€ million) (€ million) % Chg. YoY +2% EBITDA 3.924 3.431 3.483 Pecém Generation & -17% 25% 295 31% one-off gain Supply Iberia (2) EDPR net 3
Slide 8: Operating costs: -1% YoY excluding capacity increase and forex
Operating costs: -1% YoY excluding capacity increase and forex Operating costs(1): 2015 vs. 2014 2015 YoY Inflation(2) (€ million) (%) Brazil EDPR Iberia +2% In BRL, ex- 1.537 1.562 Pecém: -1% 10.7% 284 -8% 261 Opex/MW: 323 +17% 377 -1% 930 -1% 923 0.5% -0.5% 2014 2015 Portugal Spain Brazil (IPCA) I
Slide 9: Adjusted Net Profit: -17% YoY strongly penalized by weak hydro and energy management results
Adjusted Net Profit: -17% YoY strongly penalized by weak hydro and energy management results in 2015 Adjusted Net Profit(1) (€ million) 905 ~110 ~45 750 2014 Hydro Volume Other 2015 & Energy managm. Iberia More than 2/3 of adj. net profit YoY decline in 2015 due to weak hydro and energy management I
Slide 10: 2016 Outlook
2016 Outlook: EBITDA Breakdown (%) >€3.6bn Strong hedging position: 27TWh sold at ~€55/MWh, double digit thermal spreads Liberalised Hydro production in Portugal in Jan/Feb-16: +87% YoY 12% Activities Iberia New Hydro capacity: +349MW added in 1Q16, +1,019MW to be added by 2016YE Brazil 15% Avg. BRL
Slide 11: EDP's distinctive equity story
EDP’s distinctive equity story Visibility on profitable growth driven by renewables Balance between Growth & Deleverage Deleverage commitment Improved visibility of medium term FCF potential Keeping a low risk profile: Controlled High weight of EBITDA from Regulated and LT Contracted Attractive Risk
Slide 12: Results Analysis
Results Analysis
Slide 13: Overview of Iberian Market in 2015
Overview of Iberian Market in 2015 Electricity Demand and Supply in Iberian Market (1) (TWh) Electricity demand: +1.8% in Spain, +0.3% in Portugal 1.6% on mixed effect from economic recovery and mild 292 297 weather conditions CCGT 23 +34% 31 Coal 52 +24% Hydro production: -34%, hydro coefficient in
Slide 14: Electricity Generation Operations in Iberia
Electricity Generation Operations in Iberia EDP Liberalised Generation – Production EDP PPA/CMEC Plants in Portugal: market deviation(1) (TWh) (€ million) % Chg. YoY Adjustment Coal Hydro +22% +60% 18.4 160 4 15.1 20% 23 +215% CCGT 8% 100 Coal 43% +39% 49% 133 84 Hydro 42% -27% 25% Nuclear +2% 8% 7%
Slide 15: EDP Liberalised Activities Iberia: Market positioning
EDP Liberalised Activities Iberia: Market positioning EBITDA Liberalised Activities in Iberia vs. Hydro Volumes and Pool Price (€ million and €/MWh) Avg. Pool Price Spain (€/MWh) EBITDA (€m) Significant weight of hydro 450 in generation mix 50 50 47 Long position in sales to 400 44 final clients vs.
Slide 16: Generation and Supply Iberia (24% EBITDA)
Generation and Supply Iberia (24% EBITDA) Adjusted EBITDA(1) Generation & Supply Iberia (€ million) Liberalised activities Long Term Contracted Generation Adj. EBITDA Generation & Supply Iberia(1): -€112m YoY -11% Avg. generation cost +22% on lower hydro volumes 1,058 946 Energy management gains: im
Slide 17: Recent decline in energy markets reinforces the value of EDP's long position in clients
Recent decline in energy markets reinforces the value of EDP’s long position in clients Spain - Wholesale Electricity Prices(1) Forward Energy Prices for 2016(2) (€/MWh) (€) Dec-14 Dec-15 Feb-16(3) 44.4 42.4 41.2 39.9 Brent (€/bbl) 52.0 33.1 31.0 32.2 TTF (€/MWh) 21.0 14.5 12.1 Coal (€/Ton) 62.4 43.
Slide 18: EDP forward hedging position for 2016
EDP forward hedging position for 2016 EDP: Forward Contracting versus Coal & Gas sourcing Commitments – 2016 (% of volume committed) 100% ~90% Sold Sold Coal Gas Forward sales: 27TWh of electricity sold at ~€55/MWh, mostly hedged through residential & SMEs Improved thermal spreads locked-in vs. 2015
Slide 19: Regulated Energy Networks Iberia (26% of EBITDA)
Regulated Energy Networks Iberia (26% of EBITDA) EBITDA Adjusted EBITDA (1) (€ million) (€ million) Gas Iberia Gas Iberia Electricity Spain Electricity Spain Electricity Portugal Electricity Portugal -1% -4% 1.042 1.031 976 938 24% -10% 10% 6% -11% -3% 2014 2015 2014 2015 Electricity Portugal: RoRAB
Slide 20: EDP Renováveis (29% of EBITDA): EBITDA growth ex one-offs +20%
EDP Renováveis (29% of EBITDA): EBITDA growth ex one- offs +20% backed by higher prices and capacity additions Installed Capacity Production (1) EBITDA (MW) (GWh) (€ million) Europe and Brazil North America +14% +8% +26% 9,281 21,388 1,142 19,763 8,149 903 54% 8% 48% 17% 48% 60% 53% 60% 25% 52% 9% 5
Slide 21: Brazilian Electricity System: GSF insurance agreement closed in Dec-16
Brazilian Electricity System: GSF insurance agreement closed in Dec-16; end of hydro crisis led to decline of PLD Insurance agreement on GSF risk: impact on cash flows under Southeast PLD (spot electricity price) – Monthly average extreme weather conditions (R$m) R$/MWh Before agreement After agreem
Slide 22: EDP Brasil (22% of EBITDA): Adjusted EBITDA in local currency +59% YoY
EDP Brasil (22% of EBITDA): Adjusted EBITDA in local currency +59% YoY EDP Brasil reported EBITDA EDP Brasil Adjusted(1) EBITDA (BRL million) (BRL million) Capital Gains Generation & Other Distribution Generation & Other Distribution +59% +59% 2.112 3.066 954 1.325 1.175 1.933 409 95% 1.175 602 602
Slide 23: Portuguese electricity system: Tariff surplus in 2015
Portuguese electricity system: Tariff surplus in 2015 Portugal: Electricity System Regulatory Receivables (€bn) -€0.1bn 5.3 5.2 4.8 4.9 4.0 4.3 2.4 3.0 3.0 Other 1.9 EDP 2.2 2.4 2.3 2.2 2012 2013 2014 2015 2016E 2017E 2016E ERSE Jan/Feb-16(4) Demand(1) (YoY Chg.) -1.8% -0.1% +1.1% Demand (YoY; %) +1
Slide 24: EDP's regulatory receivables
EDP’s regulatory receivables EDP’s Net Regulatory Receivables (€ million) -€27m 2.747 2.504 2.477 Portugal (1) 2,422 2,315 2,236 Spain Brazil 264 61 2 70 187 170 Dec-13 Dec-14 Dec-15 Portugal: -€79m YoY (ex ante deficit and other deviations(2): +€766m; securitisations: -€844m) Spain: +€68m YoY, reco
Slide 25: Net Debt: Negative impact from Pecém consolidation partially balanced by hybrid issue
Net Debt: Negative impact from Pecém consolidation partially balanced by hybrid issue 50% equity content Change in Net Debt: Dec-15 vs. Dec-14 (€ billion) +€0.3bn +€0.1bn 17.0 1.5 0.7 0.1 17.1 0.4 0.6 17.4 0.8 2.5 2.5 2.5 Regulatory Receivables 14.5 14.6 14.9 Net Debt Free Cash Expansion Dividends F
Slide 26: Financial Debt profile by currency and maturity
Financial Debt profile by currency and maturity EDP consolidated debt by currency: Dec-15 EDP consolidated debt maturity profile as of Dec-15 (%) (€ billion) EDP SA & EDP Finance BV Hybrid Bond Other Subsidiaries Commercial Paper Avg. Debt Maturity(1): 4.8 years 4.0 USD 3.5 24% 3.0 2.5 PLN 1% 2.0 8%
Slide 27: Main sources and uses of funds
Main sources and uses of funds Sources of funds Use of funds Refinancing needs in 2016: €2.95bn Cash & Equivalents (Dec-15): €1.3bn Bonds maturing in Feb-16 €0.75bn Available Credit Lines (Dec-15): Bonds maturing in Jun-16 €0.5bn Revolving Credit Facilities €3.8bn Bonds maturing in Sep-16 €1.0bn Oth
Slide 28: Financial Results
Financial Results Financial Results: 2015 vs. 2014 (€m) Net interest costs: penalised by stronger -€261m USD vs. EUR; avg. cost of debt flat at 4.7% (44) (833) (85) ForEx: €35m losses in 2015 vs. €52m in (140) 2014 mostly related to mark-to-market of (572) (8) 17 USD/EUR and USD/BRL Capital gains &
Slide 29: Net Profit breakdown
Net Profit breakdown (€ million) 2014 2015 ∆% ∆ Abs. EBITDA 3,642 3,924 +8% +282 New installed capacity by EDPR and Pecém Amortisation, Impairm. consolidation 1,449 1,481 +2% +31 and Provisions EBIT 2,193 2,443 +11% +250 Includes -€40m YoY from associates (Pecém, Eneop) Financial Results & (557) (85
Slide 30: IR Contacts
IR Contacts Miguel Viana, Head of IR Sónia Pimpão João Machado Maria João Matias Sérgio Tavares Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Visit EDP Website Next Events Mar 7th-8th: Roadshow and Citi West-Coast Symposium San Francisco Site: www.edp.pt Mar 7th-8th: Roadshow in Switzerland (
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