Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — FY2010 Earnings Presentation
36 slides from Edp's earnings presentation, Mar 4, 2011
Slide 1: 2010 Results Presentation
2010 Results Presentation March 4th, 2011
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 3rd of March 2011 and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where this p
Slide 3: 2010: Highlights of the period
2010: Highlights of the period EBITDA: €3,613m, +7% YoY Regulated networks & LT Contracted Gen. Iberia (50% EBITDA weight): EBITDA +10% YoY New assets (gas Spain) + stable returns + efficiency improvements EDP in Brazil (18% EBITDA weight): EBITDA +22% YoY Electricity demand in Brazil +8%; positive
Slide 4: 2010: Highlights of the period
2010: Highlights of the period Net Profit: €1,079m, +5% YoY Net interest costs +3% YoY Avg. cost of debt: 3.5% (vs. 4.0% in 2009); Average debt maturity: stable at 5 years Financial liquidity: €4.4bn by Dec-10 + €1.4bn of new funding contracted in Jan/Feb 2011 €5.8bn which cover expected funding nee
Slide 5: 2010 Operating Headlines
2010 Operating Headlines Installed Capacity 2010 Generation Breakdown by Technology (GW) (%) (1) Wind Hydro CCGT Other +7% Other (1) CCGT 22.0 20.6 16% 22% 21% 24% 16% 17% 24% 33% 31% 39% 61% Hydro & Wind 64% 27% 29% Hydro & Wind 2009 2010 Installed capacity up 7% YoY; Wind & Hydro: 61% of total cap
Slide 6: 88% of 2010 EBITDA from Regulated and Long Term Contracted Activities
2010 EBITDA: 88% of 2010 EBITDA from Regulated and Long Term Contracted Activities EBITDA Breakdown by Activity EBITDA Breakdown by Geography (€ million) (%) % Chg. YoY +7% €3,613m €3,363m 12% 18% 18% Brazil Liberalized -33% 20% Activities Iberia 18% 14% +22% 20% EDP Renováveis Brazil 16% 20% 17% +3
Slide 7: EDP Consolidated operating costs
EDP Consolidated operating costs: OPEX/Gross Profit (1) : 2010 vs. 2009 Efficiency Program 2008-12 annual savings (2) (%) (€ million) Human Resources Supplies and services 160 159 28% 28% 120 59 51 99 69 2009 2010 Measures taken up Target 2010 Target 2012 to 2010 Maintenance of opex/gross profit Eff
Slide 8: Business Areas
Business Areas 7
Slide 9: Electricity & Gas Demand in EDP's Key Markets
Electricity & Gas Demand in EDP’s Key Markets Brasil Portugal Spain Electricity Electricity Gas (Total Market) Electricity Gas (Total Market) 9.0% 7.8% 7.8% 6.7% 3.3% 4.7% 3.2% -0.3% -1.2% 2010 vs 2009 2010 vs 2008 -10.8% Brazil: Sound growth of Brazilian economy, low impact from international crisi
Slide 10: Long Term Contracted Generation Iberia (24% of EBITDA)
Long Term Contracted Generation Iberia (24% of EBITDA) EBITDA Long Term Contracted Generation (€ million) PPA/CMEC (1) Special regime (2) +7% 877 823 +39% +5% 2009 2010 • PPA/CMEC: ROA of 8.5% pre-tax real; Higher fuel procurement results, -1% of installed capacity • Special regime: +69% output from
Slide 11: Liberalised Iberian Market: 2010 Environment
Liberalised Iberian Market: 2010 Environment Iberian Market Forward Clean Spark/Dark Spread, 2009/2010(1) Spain – Electricity wholesale price (€/MWh) (€/MWh) Clean Dark Spread Clean Spark Spread Spot price Final wholesale price EDP’s Avg. Thermal generation cost For 2009 For 2010 55 45 35 25 15 1Q09
Slide 12: EDP Liberalised Sales of Electricity & Gas to Final Clients
EDP Liberalised Sales of Electricity & Gas to Final Clients Electricity Sold to Final Clients Gas sold to Final Clients (TWh) (TWh) Spain (1) Portugal Spain Portugal +65% +40% 36.7 30.2 21.6 22.2 2009 2010 2009 2010 • Spain: 12% mkt share (11% in 2009): focus on SMEs • More competitive sourcing mix
Slide 13: Liberalised Energy Activities Iberia (12% EBITDA)
Liberalised Energy Activities Iberia (12% EBITDA) EBITDA Liberalised Activities(1) (€ million) +8% -33% 666 449 416 2008 2009 2010 Volume sold (TWh) 34 +43% 49 Gross Margin (€/MWh) 19.1 -44% 10.6 Lower gross margin per MWh vs. 2009, as expected and in line with hedging previously stated Higher therm
Slide 14: Commercial Activity Portugal: Control over bills collection
Commercial Activity Portugal: Control over bills collection Impairment for customers’ Overdue Debt from Customers (1) Average Collecting Period doubtful debts (net of reversal) (€m; %) (Days) (€m; %) Overdue Debt from Customers Impairment for customers’ doubtful debts (net of reversal) Overdue Debt
Slide 15: Regulated Energy Networks Iberia (26% of EBITDA)
Regulated Energy Networks Iberia (26% of EBITDA) EBITDA (€ million) Gas Iberia Electricity Spain +13% Electricity Portugal 938 829 +52% +30% -1% 2009 2010 • Electricity Portugal: EBITDA -1% YoY; lower tariff adjustments (+€6m in 2010 vs. +€15m in 2009) higher costs with HR restructuring (€29m in 201
Slide 16: EDP Renováveis: Strong volume of PPAs signed in US and regulatory clarification
EDP Renováveis: Renováveis: Strong volume of PPAs signed in US and regulatory clarification in Spain USA Wind Power Installed Capacity Spain Wind Power Installed Capacity (MW) (MW) Merchant RD661/2007 With PPAs (1) Transitory Regime (no impact from new regulation) +600 3,224 2,050 2,624 24% +29 New
Slide 17: Wind power prices
Wind power prices Production Breakdown Avg. Selling Price per MWh 2010 2009 % Higher contribution from US merchant capacity, lower hedging gains; USD 14,352 GWh €58 €59 -1% 5% appreciation Tariffs, PPAs 16% & Merchant €94 €93 +1% Portugal/France: Tariffs CPI updated Poland: first park in 2010: (€112
Slide 18: EDP Renováveis (20% of EBITDA): EBITDA up 31% YoY
EDP Renováveis (20% of EBITDA): EBITDA up 31% YoY Installed Capacity Output EBITDA (MW) (GWh) (€ million) +17% +32% +31% 6,437 14,352 713 5,491 10,907 543 2009 2010 2009 2010 2009 2010 17% increase of installed capacity; 32% growth of total wind power production 17
Slide 19: Brazil (18% of EBITDA)
Brazil (18% of EBITDA) Evolution of EBITDA of EDP Brasil Evolution of EBITDA of EDP Brasil (BRL millions) (€ million) Generation & Other Distribution +3% +22% 1,531 1,571 674 550 -1% +6% 2009 2010 2009 2010 EBITDA +22% YoY; +3% in local currency + 19% appreciation of BRL vs. EUR • Distribution: 11%
Slide 20: Consolidated Financials
Consolidated Financials 19
Slide 21: Consolidated Capex 2010: 74% invested in expansion
Consolidated Capex 2010: 74% invested in expansion Consolidated Capex(1) (€ million) 2,667 Wind Power Brazil 13% • 50% in USA, 9% Spain, 6% Brazil, CCGT Iberia 3% 35% Rest of Europe Hydro Portugal 11% Expansion Hydro in Portugal under construction Capex • 2.1GW, €0.5bn accumulated capex by Dec-10 €1
Slide 22: Construction in Progress & Hydro Concession Payments
Construction in Progress & Hydro Concession Payments €2.2bn Pécem Coal plant in Brazil: 15 Year PPA contract, 360 MW attributable capacity Total investment: BRL1.5bn, 82% of which already incurred Brazil 0.6 Generation Operation to start in Jan-12; Expected EBITDA in 2012: BRL240m (€110m) Wind 0.2 5
Slide 23: Net Regulatory Receivables by Dec-10
Net Regulatory Receivables by Dec- Dec-10 Regulatory Receivables (€ million) Regulatory Receivables from CMECs: €488m (-€97m vs. Dec-09) 1,443 • €319m recovered in 2010 through tariffs • €221m created in 2010 (coal output and avg. dark spread below forecasts) Portugal 488 CMECs Spanish Tariff Defici
Slide 24: Net debt impacted by higher than expected regulatory receivables and forex
Net debt impacted by higher than expected regulatory receivables and forex on top of planned expansion capex Change in Net Debt: Dec-09 vs. Dec-10 (€ billion) 0.4 16.3 1.1 2.1 14.0 1.9 0.6 12.7 Net Debt Adjusted Free Dividends Net Debt After Expansion Regulatory Forex & Fair Net Debt Dec-09 Cash Flo
Slide 25: Net Debt Breakdown by Dec-10 & credit ratios
Net Debt Breakdown by Dec- Dec-10 & credit ratios EDP consolidated debt maturity profile (€ million) Debt by Interest Rate Term Commercial paper Brazil: € 318 M Average Debt Maturity Other subsidiaries(1) Project Finance: € 115 M EDP SA + BV Dec-10: 5 years Fixed €0.7bn Bond: Mar-11 44% 3.500 €0.5bn
Slide 26: EDP financial liquidity position
EDP financial liquidity position (€ million) Sources of liquidity (Dec-10) Instrument Maximum Number of Utilised Available Maturity Amount counterparties Revolving Credit Facility (US$1.5bn) 1,154 22 1,154 - 02-07-2014 Revolving Credit Facility 2,000 19 - 2,000 03-11-2015 Domestic Credit Lines 242 1
Slide 27: EDP main sources and uses of funds in 2011-2012
EDP main sources and uses of funds in 2011- 2011-2012 Sources of funds Use of funds • Refinancing needs in 2011-2012: • Cash & Equivalents (Dec-10): €1.5bn Bond maturing in Mar-11: €0.7bn • Available Credit Lines (Dec-10): €2.9bn Bond maturing in Jun-11: €0.5bn • New funding raised (Jan/Feb-11): €1.
Slide 28: Net Profit up 5% YoY
Net Profit up 5% YoY (€ million) 2009 2010 ∆% ∆ Abs. EBITDA 3,363 3,613 +7% +250 7% increase of installed capacity Net Depreciations 1,393 1,550 +11% +157 and Provisions Acquisition of gas networks EBIT 1,970 2,063 +5% +93 Net Interest Costs (541) (558) +3% -17 Lower cost of debt: 3.5% in 2010 vs. 4
Slide 29: Sustainability & Prospects 2011
Sustainability & Prospects 2011 28
Slide 30: Sustainability: Ranked in 2010 as Best Utility Worldwide
Sustainability: Ranked in 2010 as Best Utility Worldwide Results of Sustainability Assessment Best in class with highest score (Absolute points 0-100) EDP Best Score -Climate Strategy 84 -Risk Management 83 84 79 81 76 77 -Stakeholder Engagement 74 75 82 -Price Risk Management 68 65 -Scorecard/Measu
Slide 31: Liberalised activities Iberian Market: Current Environment
Liberalised activities Iberian Market: Current Environment Forward Energy Markets for 2011 Spain - Wholesale Electricity Prices (US$) (€/MWh) Coal (USD/Tonne) (1) Brent (USD/bbl) (2) 130 52.1 51.6 49.7 110 44.7 90 70 Jan-Feb/10 2Q10 3Q10 4Q11 (OMEL) Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 OMIP(3) (Forwar
Slide 32: Liberalised activities: Outlook for 2011
Liberalised activities: Outlook for 2011 EDP: Electricity Forward Contracting, 2011 (TWh) • Avg. selling price contracted with clients(1): OTC ~€50/MWh, in line with Purchases 2010 Contracted • 65% of expected output is 19TWh Sales forward contracted • Average Clean Thermal Output Spread(2) Locked i
Slide 33: Prospects for 2011: EBITDA
Prospects for 2011: EBITDA Liberalized 10% Forward contracted sales: 19 TWh at prices close to €50/MWh Activities Iberia FW contracted output: c65% of expected total; Thermal spread(1) ~€10/MWh Brazil 20% New regulatory period for Bandeirante (Oct-11) stable framework for Escelsa Jan/Feb-11: Average
Slide 34: Prospects 2011/2012
Prospects 2011/2012 • Average cost of debt: Expected to be ~4.0% • Regulatory receivables: Expected additional securitisations in Spain, slight increase in Portugal • Target cash proceeds from disposals in 2011: ~€500m (several options under analysis) 2011E • 2010 full cash dividend payment in 2Q11
Slide 35: A resilient business model in a challenging environment
A resilient business model in a challenging environment • EBITDA +7% (wind power and Brazil were the key growth drivers) Improvement of • Net interest costs: +3% (cost of debt of 3.5% in 2010, avg. maturity 5 years) returns • Net Profit: +5% • Total Installed capacity: +7% YoY (wind power capacity +
Slide 36: 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 March 3rd: EDP discloses 2010FY Results Site: www.edp.pt March 14th-15th: EEI Conference, London Link Results & Presen
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