Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — 9M2011 Earnings Presentation
40 slides from Edp's earnings presentation, Oct 28, 2011
Slide 1: Results Presentation 9M2011
Results Presentation 9M2011 LISBON, OCTOBER 28TH, 2011 0
Slide 2: Disclaimer
Disclamer 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 28th of October 2011 and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where thi
Slide 3: 9M11: Highlights of the period
9M11: Highlights of the period Sound Operating Performance EBITDA: €2,775m, +5% 59% of EBITDA from out of Portugal: Strong growth in wind (+16%) and Brazil (+12%) Iberian traditional operations: EBITDA -1% Resilient regulated/contracted activities; weaker performance in liberalized market Opex: +3.0
Slide 4: 9M11: Highlights of the period
9M11: Highlights of the period Capex down to €1.353m in 9M11 (-€606m vs. 9M10): driven by cut of expansion in wind power in US Sale of 14% in EDP Brasil (Jul-11) + stake in Ampla (Oct-11): €450m 90% of 2011 disposals’ target achieved Net debt of €16.6bn (-€0.3bn vs. Jun-11; +€0.2bn vs. Dec-10), Net
Slide 5: 9M11 Operating Headlines
9M11 Operating Headlines Installed Capacity 9M11 Generation Breakdown by Technology (GW) (%) Wind Hydro CCGT Other (1) +6% CCGT Other (1) 22.6 21.3 13% 22% 25% 23% 16% 17% 28% 32% 31% 34% 62% Hydro & Wind 62% 29% 31% Hydro & Wind 9M10 9M11 Installed capacity up 6% YoY Wind & Hydro: 62% of total capa
Slide 6: 9M11 EBITDA: Increasing portfolio diversification
9M11 EBITDA: Increasing portfolio diversification EBITDA Breakdown by Geography (1) (%) 18% 16% 19% 20% Brazil 6% 15% 18% EDP Renováveis 20% 19% 20% 16% Spain 19% 57% 48% 47% Portugal 41% 9M06 9M09 9M10 9M11 Weight on EBITDA from operations out of Portugal increased from 43% in 9M06 to 59% in 9M11 (
Slide 7: Cost of carry with pension & medical care responsibilities in P&L: Reclassification in 9M11
Cost of carry with pension & medical care responsibilities in P&L: Reclassification in 9M11 from operating to financial costs Employee Benefits – Defined Benefit Obligation Impact of reclassification in P&L lines: (€ million) (€ million) Interest Cost Expected return of the fund 9M10 9M11 Net Cost E
Slide 8: 9M11 EBITDA: 89% from Regulated and LT Contracted Activities
9M11 EBITDA: 89% from Regulated and LT Contracted Activities EBITDA Breakdown by Activity (€ million) % Chg. YoY +5% €2,651m €2,775m Liberalized Activities 11% -23% Iberia 15% +12% 20% Brazil 19% Wind Power +16% 20% 18% 89% Regulated Networks 28% 25% +16% Iberia(1) LT Contracted Generation Iberia 24
Slide 9: Operating costs: Efficiency improvements with Opex/Gross Profit at 27% in 9M11
Operating costs: Efficiency improvements with Opex/Gross Profit(2) at 27% in 9M11 Operating costs (1) : 9M11 vs. 9M10 9-Month average YoY Inflation: Sep-11 (€m) (%) Brazil EDPR Iberia +3.0% 1,084 1,116 9.6% 217 200 +9% 181 207 +14% 3.6% 3.3% 703 -2% 692 9M10 9M11 Portugal Spain Brazil (IGP-M) Iberia
Slide 10: Business Areas
Business Areas
Slide 11: Electricity & Gas Demand in EDP's Key Markets
Electricity & Gas Demand in EDP’s Key Markets Brazil Iberian Market Electricity Electricity Demand Gas Demand % Weight on Iberia % Weight on Iberia 100% 16% 84% 100% 14% 86% +3.7% +3.8% Iberian Iberian Market Portugal Spain Market Spain Portugal -3.8% -4.9% 9M11 vs. 9M10 (YoY) (1) -1.0% -1.2% -2.4%
Slide 12: Long Term Contracted Generation Iberia (22% of EBITDA)
Long Term Contracted Generation Iberia (22% of EBITDA) EBITDA LT Contracted Generation Adjusted(1) EBITDA LT Contracted Generation (€ million) (€ million) PPA/CMEC Special regime PPA/CMEC Special regime -4% +5% 639 610 584 610 +2% +2% -5% +5% 9M10 9M11 9M10 9M11 PPA/CMEC: end of Carregado PPA (Dec-1
Slide 13: Liberalised Energy Activities Iberia (11% EBITDA)
Liberalised Energy Activities Iberia (11% EBITDA) EBITDA Liberalised Activities (€ million) +5% -23% 478 387 284 298 9M08 9M09 9M10 9M11 Avg. Selling price(1) (€/MWh) 48.6 +16% 56.3 Avg. Sourcing cost (€/MWh) 37.7 +29% 48.6 Volumes sold (€/MWh) 36.7 -0% 36.6 EBITDA -23% YoY but 5% above pre-crisis l
Slide 14: Liberalised Activities: Outlook for 2011 & 2012
Liberalised Activities: Outlook for 2011 & 2012 30 TWh of electricity sales to clients in 2011 (~100% of expected output contracted); Avg. Clean Thermal Spread(1) Locked in >€10/MWh EDP: Forward Contracting – 2012 Coal & Gas sourcing Committments Wholesale & Retail Markets 10TWhe ~12TWhe Open positi
Slide 15: Regulated Energy Networks Iberia (28% of EBITDA)
Regulated Energy Networks Iberia (28% of EBITDA) EBITDA Adjusted EBITDA (€ million) (€ million) Gas Iberia Gas Iberia Electricity Spain Electricity Spain Electricity Portugal Electricity Portugal +6% +21% 691 736 801 665 +23% +23% +62% +38% +11% -4% 9M10 9M11 9M10 (3) 9M11 Electricity Portugal: Recu
Slide 16: Regulated Energy Networks Iberia: Higher Efficiency with improvement on quality of service
Regulated Energy Networks Iberia: Higher Efficiency with improvement on quality of service Opex(1)/Network Km Opex(1)/Connected customers Equivalent Interruption Time(2) (€th) (€th) (minutes) -7% -7% -28% 73 2,51 80 2,33 75 53 9M10 9M11 9M10 9M11 9M10 9M11 Efficiency ratios improved 7% YoY Higher qu
Slide 17: EDP Renováveis (20% of EBITDA): Strong growth driven by new installed capacity
EDP Renováveis (20% of EBITDA): Strong growth driven by new installed capacity Installed Capacity EBITDA (MW) (€ million) 9M2011 6.959 9M2011 548 YoY % Chg + 13% YoY % Chg + 16% 1% 1,4% 11% 11% 35% 9% 15% 48% 32% 38% Installed Capacity +0.8GW: US (+0.2GW), Rest of Europe (+0.3GW), Spain (+0.2GW) and
Slide 18: Brazil (20% of EBITDA)
Brazil (20% of EBITDA) Evolution of EBITDA of EDP Brasil Evolution of EBITDA of EDP Brasil (BRL million) (€ million) Generation & Other Distribution +10% +12% 1,272 1,159 554 495 +13% +7% 9M10 9M11 9M10 9M11 EBITDA +12% YoY; +10% in local currency + 2% appreciation of BRL vs. EUR Distribution: 4% gr
Slide 19: Consolidated Financials
Consolidated Financials
Slide 20: Capex: Execution of Selective Growth
Capex: Execution of Selective Growth Consolidated Capex by technology(1) Consolidated Capex by geography (€ million) (%) -31% €1,959m EDP Brasil 121 CCGT Iberia 46 Hydro Portugal 166 (2) 13% 21% €1,353m 104 (2) 36% 17% 237 Wind Power 1.120 7% 15% 516 13% 13% 39% Maintenance 506 496 24% 9M10 9M11 9M1
Slide 21: Net Regulatory Receivables by Sep-11
Net Regulatory Receivables by Sep-11 Regulatory Receivables (€ million) Regulatory Receivables Portugal: €900m (+€211m vs. Dec-10) 1,443 1,400 1,410 1,449 Last resort supply: €573m (+€306m vs. Dec-10); €249m generated in 9M11 due to higher than expected power procurement prices Portugal 689 CMECs: €
Slide 22: Change in Net debt
Change in Net debt Change in Net Debt: Dec-10 vs. Sep-11 (€ billion) Regulatory Regulatory Receivables Receivables 0,7 0,1 16.3 1,6 16.6 0,7 0,5 1,4 1,4 15.2 14,9 Net Debt Free Cash Flow (1) Chg. in Working Expansion Capex & Dividends Paid Forex & Fair Value (4) Net Debt Dec-10 Capital (2) Fin. Inve
Slide 23: Access to a diversified portfolio of funding sources
Access to a diversified portfolio of funding sources EDP Group - Sources of New Funding Raised in 9M11 (%) EDP Brasil TEIs in US 4% 2% Public Bond Securitizations Issues 28% Portugal & Spain 19% Commercial 9% Paper 11% Private Bond 9% Issues 9% Project 9% Finance EIB Bank Loans €3.3bn raised through
Slide 24: Net Debt Breakdown by Sep-11 & credit ratios
Net Debt Breakdown by Sep-11 & credit ratios EDP consolidated debt maturity profile (€ million) Debt by Interest Rate Term Commercial paper Other subsidiaries(1) Fixed EDP SA + BV Brazil: € 45 M Average Debt Maturity Project Finance: € 35 M 48% Sep-11: 5 years 52% 3.500 €0.1bn Loans: 2011 Floating 3
Slide 25: Financial Liquidity position
Financial Liquidity position (€ million) Sources of liquidity (Sep-11) Maximum Number of Instrument Utilised Available Maturity Amount counterparties Revolving Credit Facility 2,000 21 500 1,500 03-11-2015 Domestic Credit Lines 190 10 6 184 Renewable Underwritten CP Programmes 650 3 0 650 Renewable
Slide 26: Main sources and uses of funds in 2011-2012
Main sources and uses of funds in 2011-2012 Sources of funds Use of funds Refinancing needs in 2011-2012: Loans maturing in 2011: €0.15bn Bond maturing in Jun-12: €0.5bn Cash & Equivalents (Sep-11): €1.7bn Bond maturing in Aug-12: €0.35bn Available Credit Lines (Sep-11): €2.3bn Bond maturing in Nov-
Slide 27: Net Profit up 6% YoY
Net Profit up 6% YoY (€ million) 9M10 9M11 ∆% ∆ Abs. EBITDA 2.651 2.775 +5% +124 Impact from longer useful life in wind farms Net Depreciations and (from 20 to 25 years) 1.148 1.055 -8% -93 Provisions EBIT 1.503 1.720 +14% +218 cost of debt: 4.0% in 9M11 vs. 3.5% in 9M10 €49m impairment on financial
Slide 28: Regulatory Update Portugal
Regulatory Update Portugal
Slide 29: Improved Visibility on Regulation in Portugal: ERSE proposal for Regulated Revenues 2012 & Key Parameters 2012-2014
Improved Visibility on Regulation in Portugal: ERSE proposal for Regulated Revenues 2012 & Key Parameters 2012-2014 Return on RAB: Calculation Methodology Regulated Revenues 2012E (1) (%; bp) (€ million) RoR 11.0% 2011E 2012E ∆ Abs. ∆% 10.25% 0.1875 0.25 9.5% Distribution Activity 1.204 1.285 +81 7%
Slide 30: Lower sensitivity of regulated revenues to GWh distributed
Lower sensitivity of regulated revenues to GWh distributed Electricity Distribution and Last Resort Supply in Portugal: Breakdown of 2011 and 2012 Regulated Revenues (1) (%) Variable Component: €1.38bn Depending on GWh distributed and injected €1.31bn into the grid; 15% Unit tariff updated at ‘CPI –
Slide 31: Improved Visibility on Regulation in Portugal: Expected Evolution of EDP's Regulatory Receivables
Improved Visibility on Regulation in Portugal: Expected Evolution of EDP’s Regulatory Receivables EDP Regulatory Receivables Electricity Portugal (1) (€ million) Regulatory Receivables in Portugal Sep-11 Dec-11E ∆ 2012E Dec-12E expected to increase ~€380m in 2012 (excluding impact from -560 1 Distri
Slide 32: CMEC Generation Regime: ROA of 8.5%, no volume/price risk
CMEC Generation Regime: ROA of 8.5%, no volume/price risk CMEC Regulatory Receivables: Evolution in 9M11 CMEC supported by a sound legal (€ million) framework (approved by EU) 9M11 Deviation vs. CMEC Reference 9M11 Deviation vs. CMEC Reference CMEC plants do not benefit from Volume: ~-30% Volume: +7
Slide 33: Portuguese Electricity System: Sound Financial Sustainability
Portuguese Electricity System: Sound Financial Sustainability Regulatory receivables in the Portuguese Electricity System (€ billions) Regulatory receivables already securitized by Sep-11 Regulatory receivables owed to EDP Key assumptions for 2011-2020: Brent: USD109/bbl in 2011 +2.6% CAGR to USD138
Slide 34: Value added tax and tariff increases in 4Q11/2012 in Portugal expected impact per segment
Value added tax and tariff increases in 4Q11/2012 in Portugal expected impact per segment VAT increase Demand Average Bill Tariff Increase 2012 # Clients from 6% to 23% Weight (%) (€/month) (% and €/month) (% and €/month) Residential +4% +17% ~38% 5.4 million €41 (1) (Normal Low Voltage) +€1.4 +€7.0
Slide 35: Decrease of electricity consumption in Portugal in line with situation in several countries across Europe
Decrease of electricity consumption in Portugal in line with situation in several countries across Europe Evolution of electricity consumption: Portugal vs. other European countries – 9M11 vs. 9M10 (1) (%) 9M11 vs. 9M10 Real 9M11 vs. 9M10 Adjusted (2) -2,4% Portugal -1,5% -1,0% Spain -0,1% France -4
Slide 36: Commercial Activity Portugal: Control over bills collection
Commercial Activity Portugal: Control over bills collection Overdue Debt from Customers (1) Average Collecting Period (€m; %) (Days) Overdue Debt from Customers Overdue Debt from Customers/Annual Sales 222 215 32 209 32 32 200 196 30 28 5% 4% 4% 4% 4% 2007 2008 2009 2010 9M11 2007 2008 2009 2010 9M1
Slide 37: Conclusions
Conclusions
Slide 38: Privatization Calendar
Privatization Calendar July 5th: Portuguese Government’s special rights on EDP eliminated from Portuguese law August 25th: EDP Shareholders’ Meeting approved increase of voting rights’ cap from 5% to 20% September 29th: Decree Law on EDP privatization approved by Portuguese Council of Ministers Octo
Slide 39: A resilient business model in a challenging environment
A resilient business model in a challenging environment EBITDA +5% (operations out of Portugal represented c60% of EBITDA) Sound Operating Cost of debt 4% in 9M11, avg. debt maturity 5 years Performance Net Profit/EPS: +6% Total Installed capacity by Sep-11: +6% YoY (wind power capacity +13%) Growth
Slide 40: IR Contacts
IR Contacts Miguel Viana, Head of IR Sónia Pimpão Elisabete Ferreira Ricardo Farinha Pedro Coelhas Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Visit EDP Website Next Events Site: www.edp.pt November 2nd-3rd – London Roadshow Link Results & Presentations: November 4th – Paris Roadshow http:/
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