Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — FY2013 Earnings Presentation
42 slides from Edp's earnings presentation, Feb 28, 2014
Slide 1: Results Presentation 2013
Results Presentation 2013 Lisbon, February 28th, 2014 0
Slide 2: Disclaimer
Disclaimer 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 February 2014 and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where t
Slide 3: 2013: Highlights of the period
2013: Highlights of the period EBITDA 2013: €3,617m, flat YoY Iberian operations ex-wind: EBITDA -3% YoY impacted by adverse regulatory and market developments partially offset by strong hydro volumes, good energy management and tight cost control (Opex -4% YoY) EBITDA in Brazil: +24% YoY in local c
Slide 4: 2013: Highlights of the period
2013: Highlights of the period Regulatory receivables: flat YoY at €2.7bn by Dec-13 ~€1.5bn of securitisation deals cashed-in by EDP in 2013, 68% of which from Portugal Capex €2.0bn: +0.4GW new wind capacity out of Iberia; ongoing hydro developments in Portugal and Brazil Disposals: €0.6bn in 2013 (
Slide 5: Regulatory measures in Iberia
Regulatory measures in Iberia May-12: Portugal Jan-13: Spain Jul-13: Spain Feb-14: Spain 1st package Change in CPI index of Regulatory cuts in New remuneration Cut in capacity regulated activities electricity sector: scheme for Special payments remuneration capacity payments, Regime: publication Agr
Slide 6: Electricity consumption in Portugal in 4Q13: +2.2% YoY
Electricity consumption in Portugal in 4Q13: +2.2% YoY consistent with other leading economic indicators Electricity consumption in Portugal (1) (Var %) (2) Real Adjusted 8% 6.7% VAT increase in Oct-11 6% 5.1% from 6% to 23% 4% 3.6% 3.0% 2.0% 2.2% 2% 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Slide 7: 2013 Operating Headlines: Hydro & wind represented 68% of EDP's power production
2013 Operating Headlines: Hydro & wind represented 68% of EDP’s power production Installed Capacity Generation Breakdown by Technology (GW) (TWh) -2% +12% 23.4 23.0 60.9 7% 3% 54.7 2.5 Other (1) Other (1) 13% -22% 12% 3.2 Coal Coal 15.6 16% 16% 15.4 +1% CCGT 1.4 CCGT -54% 3.1 33% 21.6 Hydro Hydro 33
Slide 8: EBITDA 2013: Breakdown by division
EBITDA 2013: Breakdown by division EBITDA Breakdown by division (€ million) % Chg. YoY -0.3% €3,628m €3,617m Liberalized Activities Iberia 9% +11% 10% EDP Brasil 15% +9% 16% EDP Renováveis 26% +1% 26% 90% Regulated 29% -2% Networks Iberia (1) 28% LT Contracted 22% -9% 20% Generation Iberia 2012 2013
Slide 9: 2013 EBITDA: Breakdown by market
2013 EBITDA: Breakdown by market EBITDA Breakdown by Major Subsidiaries: 2013 vs. 2012 EBITDA Breakdown by Geography (2): 2013 vs. 2012 (%) (%) ∆ % 2012-2013 EBITDA (€M) Rest of Europe 5% -8% 5% 2012 2013 Var. % Var. Abs. Brazil 15% +9% 16% USA 9% +7% 9% EDP Brasil 535 582 +9% +48 EDP España 623 597
Slide 10: Operating costs: Opex/Gross Profit at 28% in 2013
Operating costs: Opex/Gross Profit(1) at 28% in 2013 Operating costs (2) : 2013 vs. 2012 2013 YoY Inflation (3) (€ million) (%) Brazil EDPR Iberia -2% 1,600 1,573 304 310 +2% 324 329 5.5% +2% 972 934 -4% 1.4% 0.3% 2012 2013 Portugal Spain Brazil (IGP-M) Iberia: Operating costs -4% YoY, below inflati
Slide 11: Capex: Execution of Selective Growth
Capex: Execution of Selective Growth Consolidated Capex by technology (1) (€ million) -2% €2,011m €1,978m Expansion generation Brazil 270 300 Expansion Hydro Portugal 442 486 Expansion Wind & Solar 606 536 (2) Maintenance 692 656 2012 2013 Capex 2% YoY para €1,978m 5 hydro plants under construction
Slide 12: Net regulatory receivables by Dec-13
Net regulatory receivables by Dec-13 Regulatory Receivables (€ million) +€37m 2,710 2,747 2,197 2,422 Portugal (2) Spain 424 Brazil (1) 264 89 61 Dec-12 Dec-13 Portugal: +€225m (tariff deficit/deviations of +€1,238m in 2013, securitisations done by EDP -€1,013m) Spain: -€160m (tariff deficit of +€32
Slide 13: Portuguese Electricity System: Regulatory receivables
Portuguese Electricity System: Regulatory receivables Regulatory receivables in the Portuguese electricity system (€bn) Owed to Financial Investors (Securitized) Owed to EDP +0.8 -0.1 +0.1 +0.1 4.8 4.9 +0.3 +0.3 4.0 2.4 1.9 2.2 2.4 2012 1Q13 2Q13 3Q13 4Q13 2013 2013E Demand growth (%) -2.8% -2.2% -1
Slide 14: Net debt
Net debt EDP consolidated net debt position: Dec-13 EDP consolidated debt by currency: Dec-13 (€ million) (%) PLN 17,451 6% raised at EDP Brasil USD 1% Bank loans and capital markets; 17% EDP Brasil 987 Ring-fenced policy essentially ‘non- recourse’ to EDP S.A. BRL 7% EDP Renováveis 603 75% 3% raise
Slide 15: Change in Net debt
Change in Net debt Change in Net Debt: Dec-13 vs. Dec-12 (€ billion) Regulatory -0.8 Receivables 18.2 1.9 1.2 0.4 0.4 17.5 0.7 2.7 2.7 15.5 14.7 Net Debt Free Cash Dividends Paid Expansion Forex Chg. Cons. Net Debt Dec-12 Flow (1) Capex & Perimeter Dec-13 Net Invest. (2) Net debt -€0.8bn YTD: Regula
Slide 16: Financial Liquidity position
Financial Liquidity position (€ million) Sources of liquidity (Dec-13) Maximum Number of Instrument Utilised Available Maturity Amount counterparties Revolving Credit Facility 2,000 21 0 2,000 03-11-2015 Domestic Credit Lines 159 8 0 159 Renewable Underwritten CP Programmes 100 1 0 100 02-10-2016 To
Slide 17: Net Debt Profile
Net Debt Profile EDP consolidated debt maturity profile (€ billion) Commercial paper Adjusted Avg. Debt Other subsidiaries(1) Maturity: 3.9 years EDP SA + BV Brazil: €335M Project Finance: €132M 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2014 2015 2016 2017 2018 2019 2020 2021 > 2021 USD750m bond issued Ja
Slide 18: Main sources and uses of funds
Main sources and uses of funds Sources of funds Use of funds Cash & Equivalents (Dec-13) : €2.2bn Refinancing needs in 2014: Bonds maturing in Feb-14 €1.2bn Available Credit Lines (Dec-13): €2.3bn RCF maturing in Jun-14 €1.1bn USD Bond Issue (Jan-14): €0.6bn Bonds maturing in Dec-14 €0.4bn Loans mat
Slide 19: Net Profit breakdown
Net Profit breakdown (€ million) 2012 2013 ∆ % ∆ Abs. EBITDA 3,628 3,617 -0% -11 Net Depreciations and Includes €57m in 2013 related to special 1,485 1,532 +3% +47 Provisions regime in Spain EBIT 2,143 2,085 -3% -59 Financial Results & Cost of debt: +40bps to 4.4% in 2013 (679) (703) +4% -25 Associa
Slide 20: 2013 dividend payment
2013 dividend payment Avg. Payout Ratio 13E: European Utilities peer group EDP’s dividend performance 2009-2013 (%) (1) Dividend per share (€ cent) 109% Peer 1 Dividend Payout Ratio (%) 67% 67% Peer 2 83% 60% Peer 3 58% Peer 4 55% Peer 5 18.5 18.5 18.5 Peer 6 17.0 Peer 7 15.5 Peer 8 Peer 9 EDP (2) 6
Slide 21: Business Areas
Business Areas
Slide 22: Weather and market conditions in Iberia
Weather and market conditions in Iberia Hydro & Mini-Hydro Power Production – Portugal (1) Avg. Pool Price in Spain (TWh) (€/MWh) Hydro Coefficient 2H13 13.2 51.2 1H13 47.2 44.3 5.1 37.3 2012 2013 2012 2013 0.47 1.17 Portugal wind production factor EDP: electricity production as % of sales to client
Slide 23: Iberia: Electricity and Thermal power demand
Iberia: Electricity and Thermal power demand Electricity Demand in Iberian Market Thermal Power Production in Iberian market (∆% YoY) (TWh) % Weight in Iberia in 2013 -30% 111 6 22 100% 17% 83% 12 5 77 Iberian Market Portugal Spain 0.2% -1.8% -2.2% 2012 Demand Chg. Hydro Chg. Special Nuclear & 2013
Slide 24: Liberalised Energy Activities Iberia (10% EBITDA)
Liberalised Energy Activities Iberia (10% EBITDA) EDP Liberalised Power Plants Iberia – Production EDP Coal vs. CCGT – Load factors in 2012 and 2013 (TWh) (%) 2012 2013 +1% 13.2 13.3 9% -6% 9% Nuclear Hydro 16% +1.5x 32% 50 46 Coal 51% -5% 48% 9 CCGT 24% -54% 4 11% 2012 2013 Coal CCGT Production +1%
Slide 25: Liberalised Energy Activities Iberia (10% EBITDA)
Liberalised Energy Activities Iberia (10% EBITDA) EBITDA Liberalised Activities in Iberian Market Lower sourcing costs along with (€ million) long position in clients • Average generation cost -16% YoY on higher weight of hydro +11% • Long position in clients: production represented 39% of supply; S
Slide 26: Long Term Contracted Generation Iberia (20% of EBITDA)
Long Term Contracted Generation Iberia (20% of EBITDA) EBITDA LT Contracted Generation (€ million) PPA/CMEC Special regime -9% 802 726 +30% -12% 2012 2013 PPA/CMEC: decommissioning of Setúbal fuel oil plant in Dec-12 (EBITDA 2012: €98m) Special regime: +131% YoY increase of mini-hydro production (EB
Slide 27: Regulated Energy Networks Iberia (28% of EBITDA)
Regulated Energy Networks Iberia (28% of EBITDA) EBITDA Adjusted EBITDA (1) (€ million) (€ million) Gas Iberia Gas Iberia Electricity Spain Electricity Spain Electricity Portugal Electricity Portugal -3% -3% 1,057 1,023 1,001 967 +4% -2% +3% -9% -5% -5% 2012 2013 2012 2013 Electricity Portugal: RoRA
Slide 28: EDP Renováveis (26% of EBITDA)
EDP Renováveis (26% of EBITDA): Growth from capacity additions mitigated by new tax/regulatory cuts in Spain Installed Capacity Wind Power Production EBITDA (MW) (GWh) (€ million) Iberia North America Other (1) +1% +6% +8% 938 947 8,034 19,903 7,597 18,445 36% 46% +0% 46% 39% +13% 37% +0% 36% +39% 1
Slide 29: EDP Brasil (16% of EBITDA)
EDP Brasil (16% of EBITDA) EBITDA +24% YoY in local currency EDP Brasil EBITDA EDP Brasil Normalised(1) EBITDA (BRL million) (BRL million) Generation & Other Distribution Generation & Other Distribution +24% +7% 1,670 1,614 1,505 1,341 +41% 832 +3% 724 702 590 837 803 +11% 890 752 +11% 2012 2013 201
Slide 30: EDP Brasil Distribution EBITDA: Reconciliation between reported and normalised growth
EDP Brasil Distribution EBITDA: Reconciliation between +41% reported growth and +3% “normalised” growth EDP Brasil: Distribution EBITDA (R$ million) Tariff Deviations CDE Contributions 2012 2013 Gains with assets revaluations and real estate disposals 832 702 724 -123 2 67 590 337 -231 -176 134 -128
Slide 31: EDP Brasil Generation & Other (50% of EBITDA)
EDP Brasil Generation & Other (50% of EBITDA) EDP Brasil: Generation & Other EBITDA (R$ million) Pecém I Adjusted (1) 235 249 230 227 131 207 164 146 31 20 306 230 207 218 189 178 187 -3 -25 -32 -76 -72 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13E Energy Sold excl. Pecém (TWh) 2.1 2.1 2.0 2.1 2.4 2.0 1.
Slide 32: Outlook
Outlook
Slide 33: Thermal production in Iberian Market Jan/Feb-14: 45% lower YoY
Thermal production in Iberian Market Jan/Feb-14: 45% lower YoY Thermal Power Production in Iberian market(1) (Year-to-February 26th, TWh) -47% 11 -0.4 +5 +0.4 -0.5 5.9 2013 Demand Chg. Hydro Chg. Special Nuclear & 2014 Regime Chg. Other Electricity demand YTD: -0.8% in Iberia (continuing recovery in
Slide 34: Jan/Feb-14: Lower avg. pool prices but more volatility
Jan/Feb-14: Lower avg. pool prices but more volatility Avg. Pool Price in Iberia(1) Distribution of Hourly Pool Prices in Spain (€/MWh) (Year-to-February, €/MWh) Spain Portugal 2014 2013 2012 120 -46% 100 48.0 80 60 25.8 40 20 0 Jan-Feb Jan-Feb 1 201 401 601 801 1001 1201 1401 2013 2014 Hours Signif
Slide 35: EDP Liberalised Activities 2014 Outlook
EDP Liberalised Activities 2014 Outlook EDP: Forward Contracting – 2014 Coal & Gas sourcing Commitments Wholesale & Retail Markets Forward Sales Avg. Contracted price: €55/MWh ~23TWhe 100% ~80% ~15TWhe Committed Committed Coal Gas Electricity Sales Gas Sales Forward contracting/Hedging: Expected out
Slide 36: Regulatory Receivables in Portugal: Updated Outlook
Regulatory Receivables in Portugal: Updated Outlook Regulatory receivables in the Portuguese electricity system (€bn) Owed to Financial Investors (Securitized) Owed to EDP +0.5 2013: EDP securitised a total of €1.0bn of +0.8 Portuguese Tariff Deficits 5.3 4.8 4.0 Feb-14: EDP sold €138m of Portuguese
Slide 37: Brazilian Electricity System: Jan/Feb-14 market conditions and regulatory developments
Brazilian Electricity System: Jan/Feb-14 market conditions and regulatory developments Spot market prices in Southeast-Central West region vs. Hydro Reservoir Levels Jan/Feb-14 Developments (R$/MWh; %) Reservoir levels Spot market prices 900 100% Hydro reservoir levels not recovering fast 800 90% en
Slide 38: Outlook for 2014
Outlook for 2014 EBITDA Breakdown (%) 3 hydro plants transferred from PPA/CMEC (2.5TWh production on avg. hydro year) Liberalized Activities Iberia 11% Impact from regulatory measures in Spain and Portugal Strong hedging for 2014: 23TWh sold forward at avg. selling price of €55/MWh Brazil 16% Uncert
Slide 39: A resilient business model in a challenging environment
A resilient business model in a challenging environment Resilient performance EBITDA flat YoY, net profit -1% YoY even after strong regulatory hits in Iberia enhanced by EBITDA 2012 Iberia -3% YoY penalised by regulatory cuts diversification Improving efficiency: OPEX/Gross profit of 28%; operating
Slide 40: Annex
Annex
Slide 41: 2013 Pro-forma: impacts from IFRS11
2013 Pro-forma: impacts from IFRS11 EBITDA: -€19m and Net Debt: -€368m EDP Group Financials 2013 2013 IFRS 11 Major subsidiaries impacted by IFRS11 (1) (€m) Pro-forma Reported Impact LT Contracted (Iberia) 717 726 -9 Pecém I (Brazil): 50% stake in 720MW coal facility still Liberalised (Iberia) 347 3
Slide 42: IR Contacts
IR Contacts Miguel Viana, Head of IR Sónia Pimpão Elisabete Ferreira Ricardo Farinha Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Visit EDP Website Next Events Site: www.edp.pt March 10th-12th: EEI Conference + Roadshow London Morgan Stanley March 12th-14th: Citi West Coast Symposium, San Di
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