CEZ As · PSECZ:CEZ
CEZ As — Investor Day (October 2008)
20 slides from CEZ As's investor day presentation, Oct 2, 2008
Slide 1: CEZ Group Strategy
CEZ GROUP STRATEGY Martin Roman Chief Executive Officer Capital Markets Day Prague, October 2nd, 2008
Slide 2: CEZ Group is the leader in Central and South Eastern Europe
CEZ GROUP IS THE LEADER IN CENTRAL AND SOUTH EASTERN EUROPE CEZ is the largest company by market capitalization among new EU member states CEZ has established presence in 12 countries in Europe Market capitalization (EUR m, as of September 26, 2008) 30 26.6 25 20 13.4 13.4 15 9.2 10 7.5 7.1 6.0 5.2
Slide 3: CEZ Group ranks among the top 10 largest utility companies in Europe
CEZ GROUP RANKS AMONG THE TOP 10 LARGESTS UTILITY COMPANIES IN EUROPE Top 10 European power utilities Top 10 European power utilities Number of customers, million Market capitalization, EUR bn, as of September 26, 2008 1 Enel 51.6 1 EdF 94.0 2 RWE 45.0 2 GDF Suez 77.3 3 EdF 38.5 3 E.ON 70.1 4 E.ON 2
Slide 4: CEZ Group is a company with highest growing shareholder value
CEZ GROUP IS A COMPANY WITH HIGHEST GROWING SHAREHOLDER VALUE CEZ creates shareholder value through: 1. Increasing profits and margins 2. Foreign expansion Prices of shares and share indexes* Price on September 26th, 2008: Percent CZK 1,095 400% Price on Jan 1, 2005 CEZ CZK 348 300% 200% PX 100% BBG
Slide 5: CEZ Group is benefiting from low cost generation fleet
CEZ GROUP IS BENEFITING FROM LOW COST GENERATION FLEET… 1. CEZ Group generation (2007) Nuclear plants have very low operational costs Total: 73,793 GWh Coal power plants are using mostly lignite from CEZ’s own mine Lignite CEZ has 100% free allocation of Nuclear 46% CO2 allowances for NAPII i.e. 200
Slide 6: Growing electricity prices in Europe and in the Czech Republic
… AND FROM GROWING ELECTRICITY PRICES IN EUROPE AND IN THE CZECH REPUBLIC 1. Wholesale power price (EUR / MWh) (Year ahead baseload as of 20 Aug) 90 +43 %* 80 70 +10 % +48%* 60 +15 % 50 +20 % 40 +20 % +19.4 % +19.5 % 30 +14.9 % +11.4 % 20 10 2004 2005 2006 2007 2008 2009 Czech Rep. Germany Y-o-Y cha
Slide 7: CEZ Group is one of the most profitable utilities
CEZ GROUP IS ONE OF THE MOST PROFITABLE UTILITIES 1. EBITDA margin, 2007 Percent Fortum 45.1 CEZ Group 43.2 Past performance: Verbund 36.2 2005: 40.1 % Iberdrola 31.7 2006: 40.3% EdF 25.5 EdP 23.5 Enel 23.0 E.ON 19.3 RWE 18.9 EnBW 15.9 Source: Annual reports 6
Slide 8: CEZ Group reports very dynamic profit growth
CEZ GROUP REPORTS VERY DYNAMIC PROFIT GROWTH 1. EBITDA and Net Income of CEZ Group CZK bn EBITDA Guidance as of August 2008 Net income 87.0 75.3 64.3 50.1 42.8 48.6 39.6 30.0 22.3 28.8 9.4 14.3 2003 2004 2005 2006 2007 2008E 2009* 2010* EBITDA 32% 26% 28% 17% 16% Annual growth Net 52% 56% 29% 49% 14
Slide 9: CEZ Group rapidly expanded to foreign markets
CEZ GROUP RAPIDLY EXPANDED TO FOREIGN MARKETS 2. CEZ Group in Poland Energy Assets (75% stake in Skawina, 89% in Elcho) Trading Activities Electricity generation, net (TWh) 3.6 Market share 2.5% Target markets Installed capacity (MW) 728 Presence / Subsidiaries Market share 2.4% Number of employees
Slide 10: Contribution from foreign subsidiaries is increasing
CONTRIBUTION FROM FOREIGN SUBSIDIARIES IS INCREASING 2. In 2007 foreign subsidiaries Represented 21% of revenues Represented 16% of fixed assets Generated CZK 6.3 bn of EBITDA (8.4% of total) Employed 8,770 people (29% of total) Contribution of foreign subsidiaries (%) 25 20 15 10 5 2005 2006 2007 R
Slide 11: Recently CEZ Group succeeded in several M&A deals
RECENTLY CEZ GROUP SUCCEEDED IN SEVERAL M&A DEALS 2. Romania – gas plant CEZ won a tender for strategic partner for modernization of existing 535 MW Galati plant and for construction of new power plant Poland – coal plant CEZ signed a contract to acquire 25% + 1 share in Elektrownia Skawina from Pol
Slide 12: Success in a tender for Albanian distributor is highly likely
SUCCESS IN A TENDER FOR ALBANIAN DISTRIBUTOR IS HIGHLY LIKELY 2. Albania – distribution CEZ placed the sole bid of EUR 102 m for 76% stake in Albanian distribution company OSSH. Privatization committee will evaluate the bid and government will make the final decision. CZ OSSH is the only distributio
Slide 13: Won a tender for strategic partner for project Galati in Romania
CEZ GROUP WON A TENDER FOR STRATEGIC PARNER FOR PROJECT GALATI IN ROMANIA 2. This week CEZ was picked as a winner of a tender for strategic partner for Galati project in Romania Project should include modernization of existing power plant and construction of new power plant with heat supply. Current
Slide 14: CEZ acquired large wind park project in Romania
CEZ ACQUIRED LARGE WIND PARK PROJECT IN ROMANIA 2. Fantanele Cogealac 347.5 MW 252.5 MW net capacity factor net capacity factor 28.1 % 28.2 % fully permitted, CZ fully permitted 2009 turbines contracted commissioning 2011 commissioning 2009/ 2010 Fantanele Bucharest Cogealac Project highlights Bigge
Slide 15: CEZ won a tender for Turkish distribution company Sedas
CEZ WON A TENDER FOR TURKISH DISTRIBUTION COMPANY SEDAŞ 2. On July 1st, 2008, CEZ won in an auction in consortium with two Turkish partners Auction price USD 600 m (CEZ’s share 50 % of auction price) Essence of the transaction is a transfer of operating rights for Turkish company for 30 years Expect
Slide 16: Significant progress has been made in CEZ/MOL alliance
SIGNIFICANT PROGRESS HAS BEEN MADE IN CEZ/MOL ALLIANCE 2. CEZ/MOL project continues in accordance with the plan and assumptions from preparatory phase are continuously being fulfilled December 2007 – strategic alliance agreement May 2008 – European Commission approval June 2008 – positive attitude o
Slide 17: Pipeline of further expansion projects remains strong
PIPELINE OF FURTHER EXPANSION PROJECTS REMAINS STRONG 2. Slovakia Russia MOU signed with U.S. Steel with Moscow - 660MW CCGT intention to build up to 400MW plant green field project Romania Cernavoda - tender for strategic partnership for construction of nuclear power plant Turkey Negotiations on co
Slide 18: Large potential to participate in expected investment boom in our region
WE SEE LARGE POTENTIAL TO PARTICIPATE ON EXPECTED INVESTMENT BOOM IN OUR REGION 2. Until recently CEZ Group focused on Privatization opportunities in Central and Southeastern Europe Government driven projects Now CEZ Group sees most opportunities in Creation of strategic partnerships Participation i
Slide 19: We have expanded our growth directions
WE HAVE EXPANDED OUR GROWTH DIRECTIONS 2. Growth direction Rationale Nuclear energy Emission clean technology, accepted/supported by many CEE governments Gas fired power plants Low emissions, short build up time Environmental investments Investments enforced by EU, guaranteed attractive returns, zer
Slide 20: We have a track record of delivering on our vision
WE HAVE A TRACK RECORD OF DELIVERING ON OUR VISION We have delivered on our promises: Restructuring of Czech business “Vize 2008”– CZK 2.8bn annual savings, project completed one year ahead of original plan Transformation of Czech electricity market – Czech electricity prices converged with Germany,