Romande Energie Holding Sa · SIX:REHN
Romande Energie Holding Sa — FY2019 Earnings Presentation
36 slides from Romande Energie Holding Sa's earnings presentation, Apr 6, 2020
Slide 1: Investor presentation 2019 Results
ROMANDE ; NERGIE Investor presentation _ | = 6 April 2020 _ 2019 RESULTS 7 é
Slide 2: Special times call for special timetable
SPECIAL TIMES CALL FOR SPECIAL TIMETABLE = Today the focal point is 2019 earnings and managing the current crisis = Investor day planned for September at the latest, once worst has passed: — Presentation of business conditions, strategy and goals
Slide 3: Christian Petit, CEO and Nicolas Conne, CFO
Christian Petit Nicolas Conne CEO CFO 3
Slide 4: Our year
OUR 48 ves LIN 7. -—_ eae ES m | noc ane
Slide 5: Modernisation and digitalisation
MODERNISATION AND DIGITALISATION « Acquired Bussigny power grid along with the municipal lighting system «Rolle and Vouvry stations and rerouting of HV line to Gland = Smart metres: smart meters to be rolled out to entire population by 2027 = Smart grid: REel and GridEye projects = Atlas programme:
Slide 6: Growth and profit
GROWTH AND PROFIT FIRST YEAR IN PROFIT = Record revenues, driving EBIT into positive territory = Organic growth topped up by acquisitions DISTRICT HEATING = 17 heating plants = Acquisitions: Morgins (VS), Bassins (VD), Le Croset - Ecublens (VD) = Start: Coppet, Charmey, Chateau-d’Oex RENOVATION AND
Slide 7: Renewable energy and innovation
RENEWABLE ENERGY AND INNOVATION = First part of OASSIS and Cédres programmes on stream * Long-term plan 6,000 inhabitants covered in Vaud, Geneva and Neuchatel cantons = P+R in Aigle = Space and materials savings = Entry into service of Vionnaz hydropower plant (6.25 GWh/yr) = Modernised Vouvry plan
Slide 8: Competitive position and customer experience
COMPETITIVE POSITION AND CUSTOMER EXPERIENCE = Merging of IT platforms for ‘data to cash’ Optimised ‘cost to serve’ — better competitiveness = Helping our customers navigate the energy transition = Expert advice, articles and more besides = Contract for equipping 12 parking lots (48 units) = Residen
Slide 9: Slide 9
Slide 10: Healthy finances, solid operating results
▪ Healthy finances ▪ Solid operating results ▪ Hit from ALPIQ associate ▪ Consolidated accounts under SWISS GAAP RPC (2018 adjusted) ▪ Sale of treasury shares ▪ Romande Energie Group expanding ▪ Investment strategy set to move up a gear ▪ Impact of COVID-19 discussed in part three (CEO) 10
Slide 11: A solid business foundation for Romande Energie
2019 ▪ Drop in operating expenses deducted against revenues (no impact on EBITDA) ▪ Tax hit CHF 4m/EBIT, with no impact on net profit ▪ Capex: CHF 58m, primarily maintenance A solid business foundation Outlook for 2020 for Romande Energie ▪ Stable regulated rate of return on grid assets ▪ Smart mete
Slide 12: Positive operating results
2019 ▪ Level of own generation within usual range, at 461 GWh (487 GWh in 2018) ▪ Stable margin on energy sales ▪ Higher EBITDA and EBIT following purchase of Bar power plant (France) and Positive operating lower maintenance expense results Outlook for 2020 ▪ France: acquisition of 51% of the solar
Slide 13: Outsourcing of some activities
2019 ▪ Policy to hold kWh tariff for households steady ▪ Lower volumes from B2B customers, with no impact on margin ▪ Less supportive supply portfolio Outsourcing of some ▪ Billing operations and call centre transferred to enersuisse activities Outlook for 2020 ▪ Merger of Energy and Marketing : new
Slide 14: Strong headline growth
2019 ▪ 2020 sales target (CHF 100m) already reached 12 months in advance ▪ Group able to turn a profit amid fierce competition, especially in district heating ▪ Acquired companies being slotted in to generate synergies and offer comprehensive solutions under the Romande Energie brand Strong headline
Slide 15: Consolidated income statement
CONSOLIDATED INCOME 2019 2018 Δ% ▪ Strong boost from energy STATEMENTCHF ‘000 Swiss GAAP Swiss GAAP services RPC RPC ▪ Bar hydropower plant (France) Revenues 593 320 597 620 -1% led to higher gross profit Purchases of energy, goods and services (286 377) (301 124) -5% Gross profit 306 943 296 496 +4
Slide 16: Consolidated income statement
CONSOLIDATED INCOME 2019 2018 Δ% ▪ Increase in income-producing STATEMENTCHF ‘000 Swiss GAAP Swiss GAAP resources in the Energy Services RPC RPC BU Revenues 593 320 597 620 -1% ▪ Staff transfer to enersuisse Purchases of energy, goods and services (286 377) (301 124) -5% Gross profit 306 943 296 496
Slide 17: Consolidated income statement
CONSOLIDATED INCOME 2019 2018 Δ% STATEMENTCHF ‘000 Swiss GAAP Swiss GAAP RPC RPC Revenues 593 320 597 620 -1% Purchases of energy, goods and services (286 377) (301 124) -5% Gross profit 306 943 296 496 +4% 52% 50% EBITDA 131 049 133 087 -2% 22% 22% EBIT 64 979 69 490 -6% 11% 12% 17
Slide 18: Share of profit from associates (Alpiq)
31.12.2019 (CHF m) Romande Energie Holding SA Share of Share of EOSH’s Share of net profit from ALPIQ’s net profit earnings (13 061) associates (268) (70) 3 ▪ CHF 438m from EOSH 31.4% 29.7% (21) Other (ALPIQ), equating to 20% of (18) Group assets Share of profit from ▪ No dividend paid associates ▪
Slide 19: Group net profit
CONSOLIDATED INCOME 2019 2018 Δ% STATEMENTCHF ‘000 Swiss GAAP Swiss GAAP RPC RPC Revenues 593 320 597 620 -1% ▪ Share of profit from associates CHF -18m Gross profit 306 943 296 496 +4% 52% 50% ▪ Net profit adjusted for ALPIQ : EBITDA 131 049 133 087 -2% 22% 22% ➢ 2018: CHF 60.0m (margin over revenu
Slide 20: Strong cash flow from operations
STRONG CASH FLOW FROM OPERATIONS NET CASH PROVIDED BY SMALLER WORKING-CAPITAL REQUIREMENT OPERATING CH m ACTIVITIES a 140 120 100 80 60 40 20 20151IFRS 2016 IFRS 2017 IFRS 2018SWISS 2019SWISS GAAP RPC GAAP RPC
Slide 21: Capex
▪ Total : CHF 122m ▪ Capex breakdown ▪ 33% development ▪ 67% maintenance ▪ Grid Capex: between CHF 55 and 60m per year 21
Slide 22: Net cash bridge
CHF m 141 (122) (13,061) 34 203 (40) 26 164 Net cash¹ as Cash flow from Infrastructure Dividends Sale of Repayments – Net cash¹ at 1 Jan. 2019 operations + Acquisitions treasury term deposits and as at shares financial liabilities 31 Dec. 2019 22 ¹ Cash and cash equivalents
Slide 23: Investment plan and funding
▪ CHF 850m of investment planned for 2018-2023 period ▪ Negative interest rates and working capital management ▪ LT funding requirements (84% financial independence ratio) ▪ Cost-cutting programme ▪ Impact of pandemic monitored on a daily basis 23
Slide 24: Financial indicators
2019 2018 FINANCIAL INDICATORS Swiss GAAP Swiss GAAP RPC RPC EBITDA margin / revenues 22% 22% EBIT margin / revenues 11% 12% Return on assets (ROA) 2.5% 2.2% Return on equity (ROE) 3.0% 2.7% Equity of parent company shareholders 1 871 789 1 854 978 Financial independence ratio 84% 83% Shareholders'
Slide 25: Dividend and pay-out ratio
Pay-out ratio : >100% 49% >100% >100% 33% 31% 69% >100% 45 40 35 30 25 20 33 36 36 36 36 15 27 30 30 10 5 0 2012 2013 2014 2015 2016 2017 2018 2019 25
Slide 26: Shareholder structure
38.60% Vaud Canton 37.69% Romande Energie Holding SA (own shares) Groupe E SA Crédit Suisse Anlagestiftung Banque Cantonale Vaudoise City of Lausanne Other shareholders 3.00% 3.05% 7.64% 26 3.73%
Slide 27: Business continuity
BUSINESS CONTINUITY
Slide 28: Security of supply
28 SECURITY OF SUPPLY =" Guaranteed power supply = Resources at hand — Control centre: remote management and monitoring of the network and generation facilities — Round-the-clock emergency teams — Power sourcing, energy management and procurement department working remotely and monitoring the situat
Slide 29: Lower power demand
LOWER POWER DEMAND (op) Mw Wednesday 4 be “ March I os Sa (en) Wednesday 11 (a) ~ arch uu Wednesday 18 240 ly 20 March -— : oS = ~-18% drop in power use in three weeks = Huge decline in demand from industrial customers 29 (> 100 MWh)
Slide 30: Continuity of generation assets
30 CONTINUITY OF GENERATION ASSETS = No impact on generation in Switzerland = Our installations managed from the control centre = Required on-site intervention guaranteed by our business partner Hydro Exploitation, with strict adherence to the Swiss health department's standards = In France, measure
Slide 31: Crisis management and protective measures
31 CRISIS MANAGEMENT AND PROTECTIVE MEASURES CRISIS MANAGEMENT Crisis unit up and running since late February; holding daily meetings since 13 March = Working group assessing medium-term impact meeting since mid-March = two goals: employee health & safety and business continuity in line with health
Slide 32: Impact on operations
32 IMPACT ON OPERATIONS [Business Effect on operations in 2 Networks Generation energy sourcing and sales Customer relations Energy Services Human Resources Halt to worksites Vital activities maintained/secured Vital activities secured Energy management handled by remote-working teams Flexible payme
Slide 33: Financial strength amid the crisis
33 FINANCIAL STRENGTH AMID THE CRISIS = Business sector more or less unscathed = Business continuity secured = Solid balance sheet and low debt = Permanent cash-flow controls = Efforts made to shield customers and suppliers as much as possible = Top priority is staff health & safety => Romande Energ
Slide 34: www.romande-energie.ch
www.romande-energie.ch © Romande Energie
Slide 35: Financial calendar
35 FINANCIAL CALENDAR 07 mai 2020 19 mai 2020 22 mai 2020 26 mai 2020 Juin/septembre 03 sept 2020 Closure of the Share Register AGM Date Ex-dividende Dividend payment Investors Day Interim report 2020
Slide 36: We'd be delighted to answer your questions
We’d be delighted to answer your questions MEDIA RELATIONS INVESTOR RELATIONS Michèle Cassani René Lauckner Head of Communications Head of Group Treasury +41 (0)21 802 95 67 +41 (0)21 802 95 24 +41 (0)79 544 89 11 michele.cassani@romande-energie.ch rene.lauckner@romande-energie.ch 36