TAURON Polska Energia S.A. · GPW:TPE

TAURON Polska Energia — Q3 2014 Earnings Presentation

32 slides from TAURON Polska Energia's earnings presentation, Nov 13, 2014

  1. Slide 1: TAURON Group's Q1-Q3 2014 financial results

    TAURON Group’s Q1-Q3 2014 financial results November 13, 2014

  2. Slide 2: Q1-Q3 2014 key financial parameters

    Q1-Q3 2014 key financial parameters TAURON Group’s Q1-Q3 2014 financial results [PLN m] Q1-Q3 2014 Sales revenue 13 603 (-4.3% yoy) EBITDA 2 915 (-2.8% yoy) Net profit* 1 049 (-13.8% yoy) CAPEX 2 010 (-15.1% yoy) Net debt/EBITDA 1.73x (up 0,3) Key segments’ Q1-Q3 2014 results [PLN m] Distribution Su

  3. Slide 3: Q3 2014 key financial parameters

    Q3 2014 key financial parameters TAURON Group’s Q3 2014 financial results [PLN m] Q3 2014 Sales revenue 4 377 (-3.6% yoy) EBITDA 921 (-2.8% yoy) Net profit* 318 (-13.3% yoy) CAPEX 760 (-25.4% yoy) Net debt/EBITDA 1.73x (up 0,3) Key segments’ Q3 2014 results [PLN m] Distribution Supply Heat Generatio

  4. Slide 4: Highlights

    Highlights TAURON Date Event Signature with the European Investment Bank of a PLN 295m loan agreement for CAPEX projects in the renewable July 22 energy sources and distribution segments Fitch Ratings agency reaffirmed TAURON’s BBB rating with a stable outlook. Company’s bond issue was granted A Oct

  5. Slide 5: Macroeconomic and market situation

    Macroeconomic and market situation GDP Poland’s GDP growth rate* and manufacturing PMI PMI Increase of manufacturing production sold and electricity (quarterly average) consumption (yoy change)* 5% 56 12% 55 10% 4% +0.3 p.p. 54 53 8% 3% 52 6% +0.8 p.p. 51 4% 2% 50 2% 49 1% 48 0% 47 -2% 0% 46 -4% Q1

  6. Slide 6: Q1-Q3 2014 key operating data

    Q1-Q3 2014 key operating data Mg m Hard coal production and sales [tons m] TWh Electricity [TWh] and heat [PJ] generation PJ 14.28 12 14 0.91 11.27 10 4,0 12 46.2% 1.33 1.41 10 8 -29.1% 3,0 1.00 8 6 13.37 10.59 6 8.78 4 2,0 4.26 9.94 3.99 4 2.88 2 2.53 2 1,0 -25.7% -17.1% 0 0 -12.2% -6.3% Q1-Q3 2013

  7. Slide 7: Q3 2014 key operating data

    Q3 2014 key operating data Mg m Hard coal production and sales [tons m] TWh Electricity [TWh] and heat [PJ] generation PJ 5 4.53 0.31 3.98 4 35.5% 0.42 0.42 1 0.50 -16.0% 1,0 3 1.44 4.22 1.26 2 1.16 3.56 0.93 0.95 0.83 1 12.0% 14.3% -15.6% -17.6% 0,0 0 0 Q3 2013 Q3 2014 Q3 2013 Q3 2014 electricity e

  8. Slide 8: Q1-Q3 2014 key financial data

    Q1-Q3 2014 key financial data Sales revenue [PLN m] Net profit [PLN m] 16 000 14 214 1 400 13 603 1 264 14 000 1 200 1 699 -11.1% 1 053 1 511 12 000 1 000 10 000 4 166 4 327 3.9% 800 8 000 600 6 000 8 349 400 4 000 7 765 2 000 200 -7.0% -16.7% 0 0 Q1-Q3 I-III kw. 2013 I-III kw.2014 Q1-Q3 2014 Q1-Q3

  9. Slide 9: Q3 2014 key financial data

    Q3 2014 key financial data Sales revenue [PLN m] Net profit [PLN m] 6 000 372 400 45 4 377 319 350 5 000 -10.6% 300 468 448 4 000 250 1 347 3.9% 1 400 3 000 200 150 2 000 2 692 100 2 529 1 000 50 -6.1% -14.3% 0 0 Q3 2013 Q3 2013 Q32014 Q3 2014 Q3 2013 Q3 2014 electricity distribution and commercial

  10. Slide 10: Q1-Q3 2014 EBITDA

    Q1-Q3 2014 EBITDA PLN m -2.8% EBIT Depreciation Growth per segment Drop per segment EBITDA margin 4 000 3 500 21.1% 9.6% 8.7% 65.9% 18.8% 39.3% 4.5% 19.0% 11.3% - 21.4% 3 001 59 17 77 2 915 83 3 000 15 9 1 287 -85 -246 -15 1 368 2 500 2 000 1 500 1 713 1 547 1 000 500 0 Q1-Q3 2013 Mining Generation

  11. Slide 11: Q3 2014 EBITDA

    Q3 2014 EBITDA PLN m -2.8% EBIT Depreciation Growth per segment 1 400 1 200 20.9% 16.2% 8.8% 64.3% 6.7% 41.1% 3.0% 20.1% 14.1% - 21.0% 1 000 947 25 24 12 921 3 -16 -42 -7 423 -16 -10 456 800 600 400 524 464 200 0 Q3 2013 Mining Generation RES Heat Distribution Supply Customer Other Unassigned Q3 EBI

  12. Slide 12: Q1-Q3 2014 prime costs structure

    Q1-Q3 2014 prime costs structure Prime costs structure PLN m Q1-Q3 1 373 1 501 1 944 467 1 895 2014 7 292 19% 21% 27% 6% 26% 1% Fixed costs 63% Variable costs 37% -6.2% Fixed costs 62% Variable costs 38% Q1-Q3 1 532 1 786 1 837 580 1 925 7 773 2013 20% 23% 24% 7% 25% 1% 0% 20% 40% 60% 80% 100% 120%

  13. Slide 13: Q3 2014 prime costs structure

    Q3 2014 prime costs structure Prime costs structure PLN m Q3 456 489 655 179 619 2 440 2014 19% 20% 27% 7% 25% 2% Fixed costs 64% Variable costs 36% 0.0% Fixed costs 60% Variable costs 40% Q3 432 553 645 179 593 2 441 2013 18% 23% 26% 7% 24% 2% 0% 20% 40% 60% 80% 100% 120% Depreciation Consumption o

  14. Slide 14: Debt and financing

    Debt and financing TAURON Group’s debt maturity [PLN m] Structure of TAURON Group’s debt [PLN m] 3 500 60 68 1% 1% 3 000 obligacje bonds 3 153 1 226 2 500 Net debt / EBITDA: 19% 1.73x EIB loans kredyty z EBI 2 000 National/Regional 1 500 1 453 Environment Protection and Water pożyczki 1 000 6 552 Ma

  15. Slide 15: CAPEX – key projects' work progress

    CAPEX – key projects’ work progress Capaci Capac Planned Investment project ty ity Project status Work progress completion date (MWe) (MWt) In the first half of November RAFAKO-Mostostal consortium will hand over the unit’s basic design. At the same time TAURON Generation is planning to formally Con

  16. Slide 16: CAPEX – by segment

    CAPEX – by segment Main investment projects completed in Q1- CAPEX by segment [PLN m] Q3 2014: 2 368  Distribution – construction of new -15.1% 2 010 connections (PLN 338m) and upgrade and restoration of grid assets (PLN 46 803m)  RES – construction of the Marszewo 59 wind farm’s 2nd stage (PLN 20

  17. Slide 17: OPEX reduction program

    OPEX reduction program Savings realized Savings planned in Segment Progress % Main initiatives in 2013 and in Q1-Q3 2014 2013-2015  Implementation of the ultimate business model, elimination of the redundant functions  Change of the way expenses are classified as CAPEX or OPEX  Optimization of th

  18. Slide 18: Legal disclaimer

    Legal disclaimer This presentation serves for information purposes only and should not be treated as investment-related advice. This presentation has been prepared by TAURON Polska Energia S.A. (“the Company”). Neither the Company nor any of its subsidiaries shall be held accountable for any damage

  19. Slide 19: Thank you – Q&A

    Thank you – Q&A Investor Relations Marcin Lauer marcin.lauer@tauron-pe.pl tel. + 48 32 774 27 06 Paweł Gaworzyński pawel.gaworzynski@tauron-pe.pl tel. + 48 32 774 25 34 Magdalena Wilczek magdalena.wilczek@tauron-pe.pl tel. + 48 32 774 25 38 19

  20. Slide 20: Mining

    Mining Q1-Q3 2014 financial data [PLN m] Q1-Q3 2014 EBIT bridge [PLN m] 1 093 1 100 -94.3% 100 89 871 900 50 700 138 5 0 500 -3 300 -50 168 89 83 100 5 -100 -183 -100 -35 -150 Q1-Q3 2013 Q1-Q3 2014 Q1-Q3 2013 EBIT Hard coal sales Hard coal sales price Own cost of hard coal Other factors Q1-Q3 2014 E

  21. Slide 21: Generation (conventional sources)

    Generation (conventional sources) Q1-Q3 2014 financial data [PLN m] Q1-Q3 2014 EBIT bridge [PLN m] 4 000 3 500 3 340 237 +39.3% 0 3 000 -50 2 500 2 305 -100 2 000 34 16 -150 116 1 500 10 -154 1 000 -200 500 200 -176 117 -250 0 -254 -300 -500 -154 -137 -254 -350 Q1-Q3 2013 Q1-Q3 2014 Q1-Q3 2013 Gener

  22. Slide 22: Renewable Energy Sources (RES)

    Renewable Energy Sources (RES) Q1-Q3 2014 financial data [PLN m] Q1-Q3 2014 EBIT bridge [PLN m] 250 +44.8% 216 160 37 200 140 -7 120 28 142 150 129 100 - 33 32 82 80 -1 100 84 - 27 82 57 60 57 -2 40 50 20 0 0 Q1-Q3 2013 Electricity Electricity Property rights Property rights Property rights Electric

  23. Slide 23: Heat

    Heat Q1-Q3 2014 financial data [PLN m] Q1-Q3 2014 EBIT bridge [PLN m] 1 000 967 -6.5% 926 120 11 33 18 800 100 8 -8 600 80 76 - 20 - 27 2 71 60 - 22 400 40 165 182 200 76 71 20 0 0 Q1-Q3 2013 Red and yellow Heat supply and Electricity sales Electricity sales Heat sales price Margin on Other Deprecia

  24. Slide 24: Distribution

    Distribution Q1-Q3 2014 financial data [PLN m] Q1-Q3 2014 EBIT bridge [PLN m] 4 451 4 529 +4.5% 1 400 4 000 147 1 071 1 200 1 024 64 8 36 3 000 1 000 -170 -31 -8 2 000 1 701 1 778 800 1 071 600 1 024 1 000 400 0 200 Q1-Q3 2013 Q1-Q3 2014 0 Q1-Q3 2013 EBIT Distribution Balancing DSO/TSO OPEX Deprecia

  25. Slide 25: Distribution – volumes

    Distribution – volumes Q1-Q3 2013 electricity distribution [GWh] Q1-Q3 2014 electricity distribution [GWh] 7 430 7 260 10 236 Group A 10 392 Group A Group B Group B 3 078 33 778 Group C2 3 013 34 077 Group C2 Group C1+R+D Group C1+R+D Group G 1 985 Group G 1 946 11 090 11 427 Q3 2013 electricity dis

  26. Slide 26: Supply

    Supply Q1-Q3 2014 financial data [PLN m] Q1-Q3 2014 EBIT bridge [PLN m] 14 000 13 301 800 -33.6% 721 61 11 267 700 12 000 -51 600 10 000 -152 500 23 -44 479 8 000 400 -80 6 000 300 4 000 200 2 000 747 721 100 501 479 0 0 Q1-Q3 2013 EBIT Electricity sales Electricity price Price of green, Increased g

  27. Slide 27: Supply – volumes

    Supply – volumes Q1-Q3 2013 electricity supply* [GWh] Q1-Q3 2014 electricity supply* [GWh] 3 657 2 717 7 356 6 497 7 134 GroupAA Grupa 7 356 GroupAA Grupa 30 483 28 118 Grupa GroupBB GroupBB Grupa Grupa GroupC2+C1+R+D C2+C1+R+D Grupa GroupC2+C1+R+D C2+C1+R+D Grupa GroupG G Grupa GroupGG Sprzedaż poz

  28. Slide 28: Customer service

    Customer service Q1-Q3 2014 financial data [PLN m] Q1-Q3 2014 EBIT bridge [PLN m] 500 -5.8% 456 160 450 33 375 140 400 350 120 39 300 100 250 80 60 11 56 200 60 6 150 -92 40 72 87 100 60 56 20 50 0 0 Q1-Q3 2013 EBIT Revenue of Customer Revenues of Revenue of IT Shared Costs of services Other factors

  29. Slide 29: Electricity market price trends

    Electricity market price trends Electricity 2013 2014 (until 4.11.2014) 2014/2013 Platforms: TGE, TFS, GFI, GPW-POEE Price PLN/MWh Volume GWh Price PLN/MWh Volume GWh Price % Volume % Forward BASE (Y+Q+M) 184.92 140 488 161.01 187 965 -12.9% 33.8% Forward PEAK (Y+Q+M) 204.35 14 855 184.21 19 007 -9.

  30. Slide 30: 2015 BASE contracts

    2015 BASE contracts PLN/MWh Trading volume Price Average price Average price Volume [PLN/MWh] [GWh] Total 167.03 126 004 TGE 167.13 94 599 including non TGE 166.74 31 405 Average electricity price that takes into account 2015 one year BASE and PEAK contracts: PLN 170.89/MWh, total 2015 BASE and PEAK

  31. Slide 31: 2016 BASE contracts

    2016 BASE contracts PLN/MWh Trading volume Price Average price Average price Volume [PLN/MWh] [GWh] Total 175.39 20 774 TGE 175.76 13 562 including non TGE 174.69 7 212 Average electricity price that takes into account 2016 one year BASE and PEAK contracts: PLN 175.79/MWh, total 2016 BASE and PEAK v

  32. Slide 32: TAURON's coverage by analysts

    TAURON's coverage by analysts Institution Analyst Institution Analyst DB Securities Tomasz Krukowski Ipopema Securities Piotr Zielonka Dom Maklerski mBanku Kamil Kliszcz Raiffeisen Centrobank Teresa Schinwald Dom Maklerski Banku Handlowego Piotr Dzięciołowski Renaissance Capital Vladimir Sklyar Dom

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