Iren S.p.a. · MIL:IRE
Iren — FY2017 Earnings Presentation
25 slides from Iren's earnings presentation, Mar 8, 2018
Slide 1: 2017 – FY Results
8th March 2018 2017 – FY Results
Slide 2: Abstract
Abstract The FY 2017 Results are a further step along a growth path, started 3 years ago, leading the Company to strong achievements: o Ebitda up by 200 mil. (cagr>10%); 3 YEARS o Nfp/Ebitda from 3.7x to 2.9x; GROWTH o Net Profit more than tripled; o DPS cagr 10%; From the industrial standpoint
Slide 3: FY 2017 results confirm 3 years of constant growth and financial improvement
FY 2017 results confirm 3 years of constant growth and financial improvement Ebitda Bridge (m€) NFP/EBITDA (m€) Cagr >10% NFP EBITDA NFP/EBITDA ~100 ~840 820 2,286 2,457 2,372 ~70 (~20) 3.7x 2,169 ~85 3.2x 623 3.0x 2.9x (~35) 623 678 814* 820 EBITDA Previous Scenario Synerg. Consolid. 2017 2017 EBIT
Slide 4: FY 2017: EBITDA guidance confirmed
FY 2017: EBITDA guidance confirmed KPIs Ebitda Bridge +7.7% m€ FY '16* FY '17 Δ Δ% 14 19 19 840 814 22 820 Revenues 3,283 3,697 414 12.6% ~780 (34**) (15) (20) Ebitda 814 820 6 0.7% Ebit 427 420 -7 -1.5% Net profit 180 238 58 32.2% Tech. Capex 270 357 87 32.3% EBITDA 2016 Time 2016 EBITDA Organic Sy
Slide 5: GENERATION AND DH – Positive results confirming the growth trend
GENERATION AND DH – Positive results confirming the growth trend m€ FY '16 FY '17 Δ Δ% The growth reported in EBITDA is linked to an active Revenues 908 1,104 196 22% management of the generation plant portfolio which again proved its resilience. Ebitda 234 255* 21 9% Generation sector’s increas
Slide 6: MARKET – Significant growth in the client base and volumes sold
MARKET – Significant growth in the client base and volumes sold were more than offset by the negative scenario m€ FY '16 FY '17 Δ Δ% The overall negative scenario reported in the first nine months worsened further (as expected, the extraordinary conditions Revenues 2,187 2,418 231 11% experienced in
Slide 7: NETWORKS – Synergies, consolidation and an increase in RAB/Capex
NETWORKS – Synergies, consolidation and an increase in RAB/Capex characterized the sector. m€ FY '16 FY '17 Δ Δ% • Energy networks: The absence of the «time-lag» effects Revenues 854 937 83 10% reported in Q4 2016 (electricity sector) has been more than offset by synergies achieved, a better than ex
Slide 8: WASTE – Higher saturation and better scenario
WASTE – Higher saturation and better scenario. m€ FY '16 FY '17 Δ Δ% Significant contribution from WTEs, (in particular from Revenues 502 551 49 10% TRM) thanks to the full utilization of the plants, allowing for higher electricity and green certificates production. Ebitda 120 149 29 24% Ebit 53 6
Slide 9: From EBITDA to Net Profit
From EBITDA to Net Profit. FY '16* FY '17 Δ Δ% EBITDA 814.2 820.2 6.0 0.7% • Higher D&A linked mainly to ATENA/SAP consolidation and to the higher capex trend. D&A -304.6 -321.9 • Provisions in line with expectations (reduction in BDP thanks to Clients’ improved credit rating) Provisions -82.9 -78.0
Slide 10: Cash-flow and NFP Bridge
Cash-flow and NFP Bridge. -85m€ 2,457 90 2,372 86 (24) 357 (11) (265) 10 (328) NFP 31 .12 .16 Net Profit D&A, NWC Capex Consolid. Dis posals and Div idends FV Derivatives NFP 31 .12 .17 provisions Variation and M&A dividends paid and other received Continuous debt reduction (-85m€) thanks to: o th
Slide 11: Interest rate and debt structure
Interest rate and debt structure. Gross debt interest rate >90% of gross debt at fixed interest rate. 9% Average long-term debt duration of about 91% 5.9 years (5.1 years at the end of 2016). Fixed Variable Constant reduction in cost of debt (3.1% vs. 3.4% in FY 2016) Debt structure IREN’s d
Slide 12: Closing remarks
Closing remarks Effective full implementation of the strategic pillars has already led and will continue to lead the achievement of the business plan targets • Development through a significant growth in investments (+32%) and in RAB (+2.6%) • Financial flexibility target reached (NFP/EBITDA ratio <
Slide 13: Annexes
Annexes Pag. 13
Slide 14: IREN at a glance
IREN at a glance 2017 data CUSTOMERS: >7million >1.7M in the energy sector Inhabitants in ~2.7M served inhabitants in the water service IREN’s reference ~2.1M served inhabitants in the waste sector areas ~1.0M served inhabitants in district heating >3.5 services provided per clients REGULATED ACTIVI
Slide 15: Actual progress vs. business plan targets
Actual progress vs. business plan targets. Ebitda Bridge ~60 ~950 ~90 840 820 20 (~40) EBITDA 2017 one-offs EBITDA Adj. Green Ce rt. e xpiry Org. Growth Synerg. EBITDA 2022 2017 The results reported at the end of 2017 are in line with expectations The completion of the ACAM business combination,
Slide 16: EBITDA progress by SBU
EBITDA progress by SBU GENERATION AND DH Full utilization of existing heat production sources (Plants/WTEs) thanks to the increase in volumes heated Incentives destined to expire (+10mcm). 255 244 234 40 Additional volumes heated could come from a number of 200 199 opportunities not included in
Slide 17: EBITDA progress by SBU
EBITDA progress by SBU NETWORKS ~500m€ increase in RAB (+240m€ compared to the previous BP) thanks to higher investments. Additional ~150m€ RAB in water sector coming from ACAM Time-lag el. networks 373 business combination (by the end of May 2018). 319 336 301 304 15 Maintaining all the gas a
Slide 18: Lay-off scheme
Lay-off scheme IREN has launched a new lay-off scheme involving approximately 450 people (rather higher than originally forecast) The main objective of the new initiative is to further promote generational turnover, in line with the aim of doubling IREN workers <30y.o. by 2020 The motivation,
Slide 19: Networks and waste concessions
Networks and waste concessions GAS WASTE WATER ELECTR. TENDERS CONCESSIONS CONCESSIONS CONCESSIONS ATEM Expiry Start AREA Expiry Start AREA Expiry Start AREA Expiry Start On- Piacenza Expired 2018 Genova 1 Expired 2018 Parma Expired Torino 2030 going On- Reggio Emilia Expired 2018 Parma Expired 2018
Slide 20: Regulated business wacc assumptions
Regulated business wacc assumptions GAS ELECTRICITY WATER DISTRIBUTION DISTRIBUTION SERVICE Regulatory period 6 years (2014 – 2019) 8 years (2016 – 2023) 4 years (2016 – 2019) WACC methodology update 6 years (2016 – 2021) 6 years (2016 – 2021) - WACC update every three years (2019) every three years
Slide 21: Shareholding structure
Shareholding structure The majority of IREN’s Shareholders are public SHAREHOLDING STRUCTURE >50% Public entities: FSU (50% Turin/50% Genoa Municipalities) ~33%, Emilia Municipalities (Reggio Emilia, Parma, Piacenza and other minor Municipalities) ~17%, La Shareholders Spezia Municipalities ~2%. Two
Slide 22: Public entities/Shareholders
Public entities/Shareholders IREN SHAREHOLDING STRUCTURE TRADE REGIME OF PUBLIC SHAREHOLDERS’ SHARES Shareholders Total Shares % Freely Negotiable Finanziaria Sviluppo Utilities 424,999,233 32.66% Non-negotiable negotiable shares Shareholders Total Shares shares (under specific shares Municipality o
Slide 23: Scenario
Scenario FY '16 FY '17 Δ% Gas Demand (bcm) 70.4 74.7 6.1% TTF €/000 scm 148 180 22.0% ACTUAL PSV €/000 scm 167 201 20.7% Energy Demand (Twh) 314.3 320.4 2.0% PUN (€/Mwh) 42.7 53.9 26.2% CO2 €/Ton 5.4 5.8 8.7% Green Cert. Hydro (€/Mwh) 100.1 107.3 7.2% 2017 2020 2022 PUN (€/Mwh) 53.9 54.7 58.3 PSV (€
Slide 24: Balance Sheet
Balance Sheet. FY '17 FY '16* Net fixed assets 5,412 5,244 Net Working Capital 181 171 Funds -617 -570 Other assets and liabilities -105 -91 Net invested capital 4,871 4,754 Group Sharholders' equity 2,499 2,297 Net Financial Position 2,372 2,457 Total Funds 4,871 4,754 *Restated ex IFRS 3 Pag. 24
Slide 25: DISCLAIMER
DISCLAIMER The Manager in charge of drawing up the corporate accounting documents and the Chief Financial Officer of IREN S.p.A., Mr. Massimo Levrino, hereby declares, pursuant to paragraph 2 of article 154 bis of the Consolidated Finance Act (Legislative Decree No 58/1998), that the accounting info