Edp S.a. · EURONEXT:EDP

Edp — Energias de Portugal — FY2016 Earnings Presentation

25 slides from Edp's earnings presentation, Mar 3, 2017

  1. Slide 1: Results Presentation 2016

    <5 Results Presentation 2016 Lisbon, March 3'4, 2017

  2. Slide 2: Guidance versus reported results and main highlights

    Guidance May-16 Guidance July-16 Reported Main highlights Good energy management and hydro production EBITDA >€3.6bn ~€3.75bn €3.759bn Delivery of +6% avg. capacity (all renewables) Interest costs -14% Net Profit ~€900m ~€950m €961m One-offs neutral below EBITDA: Negative on financials (mostly debt

  3. Slide 3: Iberian recurrent EBITDA +9% growth, above portfolio average

    EBITDA Recurring EBITDA (€ million) (€ million) % Chg. YoY -4% ForEx impact: -4% 3.698 3,924 3,759 3.483 Non recurring -7% 14% 441 61 EDP Brasil 16% Items(1) ForEx 32% EDP Renováveis 31% +8% impact: -1% Recurring +6% 3,698 (2) 3,483 Generation & Supply 27% EBITDA 25% +14% Iberia Networks 27% +5% 27%

  4. Slide 4: Opex by business area and efficiency programme

    Weight on Opex Business area Indicator YoY Change Main drivers  Generation capacity: +1%; # customers: +2% 58% Iberia Opex 0%  Avg. headcount: -1%; Inflation Portugal +0.6%  Average installed capacity: +11% 25% EDPR Core Opex/MW: -5%  Opex: +6% Opex in BRL - inflation  Opex in BRL:+4% pro-forma

  5. Slide 5: Steady deleverage process and marginal cost clearly below average cost of debt

    Net Interest Cost (1) EDP 5-Year Bond Yield (last 12 months) (€ million) (%) 238 Latest Bond Issues (amount; maturity; yield) 216 218 219 202 197 €0.6bn; 7Y; 2.4% 2.0 185 179 €0.6bn; 6.7Y; 1.9% 1.5 €1bn; 7.5Y; 1.2% 1.4% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1.0 2015 2016 Net Interest -14% Cost (1)

  6. Slide 6: Supported by growth in recurring EBITDA and lower interest costs

    Net profit 2016 Recurring net profit (€ million) (€ million) Neutral impact +169 49 961 47 41 41 919 42 53 163 919 215 62 750 Reported Capital Impairm. Prepayment Tax Energy tax Recurring 2015 EBITDA D&A Financials Taxes & 2016 Net profit gains costs savings net profit Minorities Supported by growth

  7. Slide 7: Delivery of growth and deleverage targets consistent with 2016-2020 plan

    EBITDA drivers for 2017 Growth: Hydro capacity +1.4GW in 2016 & 2017; Free market supply increase in # of customers Iberia Hydro production & energy management: Challenging YoY comparison Efficiency: Further improvements (Opex IV) EDPR Avg. installed capacity: +7%-9% YoY (benefiting from 2016 & 2017

  8. Slide 8: 2020 targets

    2016 2020 target 1  EBITDA growth Focused Growth +6%(1) +3% CAGR 2  Adj. Net Debt/EBITDA(2) 4.0x ~3.0x Continue Financial Deleveraging  Avg. cost of debt 4.4% 4.2% 3 Keep Low Risk  Weight of renewables on inst. capacity 72% 76% Profile 4 Reinforce  Opex IV programme (Cost savings/year) €105m €2

  9. Slide 9: Results Analysis

    rede Results Analysis

  10. Slide 10: Installed capacity +4%; electricity production +10%

    Installed Capacity Production Breakdown (GW) (TWh) +6% Avg. installed capacity +10% +4% 70.0 24.4 25.2 63.7 2% 1% 1% Other(1) 3% Other(1) 12% 25% 14% -7% Coal -18% 15% Coal 34% 15% 7% CCGT CCGT 6% Wind 38% +8% 40% 35% +15% Hydro & Wind: Wind 33% Hydro & Wind: 72% of capacity 65% of output Hydro 32%

  11. Slide 11: Electricity demand and supply in Iberia

    Electricity Demand and Supply in Iberia (1) (TWh) +0.6% 297 299  Electricity demand: +0.6% in Spain and CCGT 31 +8% 33 Portugal, following +2% YoY step up in 4Q16 Coal 65 -27% 47  Hydro production: +42%, hydro index Portugal (1) Hydro 34 +42% 48 1.33 in 2016 vs. 0.74 in 2015 (but 0.5 in 4Q16) Wind

  12. Slide 12: EBITDA Generation & Supply Iberia

    EBITDA Generation & Supply Iberia (€ million)  Hydro: Capacity +7%, production +98% +13%  Avg. sourcing cost -23%: 1,065 Avg. generation cost -30%, hydro weight in 946 generation mix reached 43% (vs. 25% in 2015)  Long market position on clients: electricity production in 2016 represented 56% of

  13. Slide 13: EBITDA of regulated networks

    EBITDA - Regulated networks Adjusted EBITDA(1) - Regulated networks (€ million) (€ million) Gas Iberia Electricity Spain Electricity Portugal Gas Iberia Electricity Spain Electricity Portugal +5% -4% 1.031 942 990 990 3% -28% +36% 36% 0% +0% 2015 2016 2015 2016  Electricity Spain: positive impact f

  14. Slide 14: EDPR: Adjusted EBITDA +8% on +11% average capacity

    EDPR Installed Capacity EDPR EBITDA (GW) (€ million) Europe and Brazil North America Adjusted +8%(1) +11% Avg. installed capacity +3% +8% 1,142 1,171 10.1 57 9.3 Mainly Brazil (+120MW) +3% 52% 54% 1,086 1,171 US (+429MW) 48% Mexico (+200W) 46% +15% 2015 2016 2015 2016 Adjusted EBITDA +8% based on +1

  15. Slide 15: EDP Brasil EBITDA

    EDP Brasil EBITDA EDP Brasil Recurring(1) EBITDA (BRL million) (BRL million) Capital Gains Recurring Distribution Hydro Generation & Other Pecém -24% -3% 3.066 2.112 2.056 954 2.334 457 +10% 504 278 718 +9% 785 2.112 -3% 2.056 937 -18% 767 2015 2016 2015 2016  Generation: Hydro deficit costs immate

  16. Slide 16: Portugal electricity system regulatory receivables

    Portugal: Electricity System Regulatory Receivables (€bn) Share of total receivables in the system -€200m in 2H16 vs. +€85m in the 1H16 5.3 5.2 5.1 -0.1 --0.11 4.6 -0.5 Other 3.0 80% 3.0 4.1 EDP 2.3 2.2 20% 1.0 Dec-14 2015 Dec-15 2016 Dec-16 2017E Dec-17(E) Demand(1) (YoY Chg.) +0.7% 2017E ERSE Jan/

  17. Slide 17: Net regulatory receivables on EDP balance sheet

    Net Regulatory Receivables: EDP Balance Sheet (€ million) -€1.5bn 2.5 2.5 Portugal (1) 2.3 2.2 1.0 Spain 1.0 Brazil 0.0 0.1 0.2 0.2 -0.1 0.1 Dec-14 Dec-15 Dec-16  Portugal: -€1.2bn; following sale of receivables to third parties (non recourse) and system’s tariff surplus  Brazil: -€0.3bn; regulato

  18. Slide 18: Net investments: expansion and maintenance

    Net Investments (1) (€ million) Net 1,735 -30% 1,212 Investments Capex 1,788 +10% 1,964 286 212 Financial investments 1,184 1,267 Expansion capex 604 697 Maintenance capex -339 -964 Asset Rotation Sale of minority stakes in wind farms in US and Europe 2015 2016 Expansion Investments: YoY growth in w

  19. Slide 19: Debt by currency and maturity profile

    EDP consolidated debt by currency: Dec-16 EDP consolidated debt maturity profile as of Dec-16 (%) (€ billion) Commercial Paper Hybrid Bond Avg. Debt Maturity: Other Subsidiaries EDP SA & EDP Finance BV PLN 5 years USD 2% 4.0 20% 3.5 3.0 2.5 BRL 9% 2.0 69% 1.5 EUR 1.0 0.5 0.0 2017 2018 2019 2020 2021

  20. Slide 20: Financial liquidity covers refinancing needs beyond 2018

    Financial liquidity (Dec-16) Refinancing needs 2016-2019  Cash & Equivalents: €1.5bn  2017: €2.3bn  Available Credit Lines: €3.7bn  2018: €1.4bn Revolving Credit Facility (Jun-19) €3.15bn  2019: €2.8bn Other RCF/Credit lines €0.55bn TOTAL €5.3bn TOTAL €6.5bn €5.3bn of financial liquidity by Dec

  21. Slide 21: Financial results and associates: 2016 vs. 2015

    Financial Results & Associates: 2016 vs. 2015 (€ million of net cost) One-offs(1)  Net interest costs: -14% 914  Regulatory receivables related : 62% 856 -5% 22 (129) 120 decline on balance sheet, lower returns 26 (1) 64  Capitalised interest: Commissioning of 2 hydro plants in 1H16 (additional 2

  22. Slide 22: Change in net debt: Dec-16 vs. Dec-15

    Change in Net Debt: Dec-16 vs. Dec-15 (€ billion) -€1.5bn 17.4 -1.0 +0.1 -1.5 +0.7 Regulatory +0.3 15.9 2.5 Receivables 1.0 15.0 14.9 Net Debt Recurring Dividends Adj. Net Reg. Receivables ForEx Net Debt Dec-15 Organic FCF (1) paid to EDP Expansion & Securitiz. Dec-16 Net Debt Shareholders Investm.

  23. Slide 23: Net profit bridge and income statement

    Net Profit (€ million) 2015 2016 ∆% ∆ Abs. (€ million) % Chg. YoY EBITDA 3,924 3,759 -4% -165 Net Depreciations and 1,481 1,495 +1% +15 +5% Provisions EBIT 2,443 2,264 -7% -179 961 914 41 (1) Financial Results & One-offs 163 (856) (914) +7% -57 Associated Companies Income Taxes 278 89 -68% -189 Recu

  24. Slide 24: IR Contacts, EDP website and next events

    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 Site: www.edp.pt Mar 6th-7th NY & Boston Roadshow Link Results & Presentations: Mar 8th-10th: Geneva, Paris, Netherlands

  25. Slide 25: 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 29th of July, 2016 and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where this presentati

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