Societatea Energetica Electrica S.a. · BVB:EL
Societatea Energetica Electrica — Electrica Group — Investor Presentation (November 2021)
52 slides from Societatea Energetica Electrica's investor presentation, November 2021
Slide 1: Electrica Group Presentation
Electrica Group Presentation November 2021
Slide 2: Content
Content 1 Electrica Group’s overview 2 Group’s Financial Results 3 Group’s Budget for 2021 4 Main Corporate Events 5 Group Strategy implementation 6 Shareholdings’ structure and evolution of the shares & GDRs 7 Appendices 2
Slide 3: Electrica Group overview
Electrica Group overview Curectrica
Slide 4: Electrica is the most important national distribution operator and electricity supplier
Electrica Group overview Electrica is the most important national distribution operator and the electricity supplier with the largest client base Geographical presence Electricity supply (9M 2021) ~3.6 millions % 18.16% 6.9 TWh places of consumption total market share energy supplied (July 2021) on
Slide 5: Only Romanian group listed on BSE & LSE, operating in distribution, supply and services
Electrica Group overview Electrica Group is the only Romanian group listed on the BSE & LSE and operates within distribution, supply & energy service segments Distributie Energie Electrica Romania S.A. 2) Distribution Operator 99.99 % Electrica Furnizare S.A. HQ: Cluj-Napoca 99.99 %2) Electricity an
Slide 6: Electrica showcases remarkable performance following its 2014 dual listing
Electrica Group overview Electrica showcases remarkable performance following its 2014 dual listing Electrica is the only listed Romanian company active in both electricity distribution and supply in Romania. Its dual listing in July 2014 on both the Bucharest and London Stock Exchange was the most
Slide 7: Corporate Governance Bodies - Non-Executive Management
Electrica Group overview Corporate Governance Bodies - Non-Executive Management Board of Directors Current Composition Mr. Cristian Bosoanca Chair Mr. Gicu Iorga Mr. Adrian Lotrean Mr. Cosmin Petrescu Mr. Dragos Neacsu Mr. Radu Florescu Mr. George Cristodorescu *Mr. Iulian Cristian Bosoanca was elec
Slide 8: Corporate Governance Bodies – Executive Management
Electrica Group overview Corporate Governance Bodies – Executive Management Executive Management Ms. Corina Mr. Ionut Pascu Mr. Mihai Darie Georgeta Popescu Chief Corporate CFO CEO Development Officer 2017 2018 2017 2018 Ms. Livioara Sujdea Ms. Bibiana Constantin Mr. Mircea-Toma Modran Chief Distrib
Slide 9: Electrica is a Leading Player in Energy Distribution and Supply areas
Electrica is a Leading Player in Energy Distribution and Supply areas Electrica Group overview Distribution Supply Volumes Distributed in 2020 Volumes Supplied in 2020 13.1% SDMN 19.25% SDTS 14.0% Electrica Furnizare SDTN 48.3 TWh 44.1 TWh Others Others 60.4% 12.5% 80.75% Electrica: 39.6% Regulated
Slide 10: Largest supplier on the overall supply market by number of customers
On the overall supply market, Electrica is the largest supplier, by number of customers Electrica Group overview Overall Market Share – July 2021 Electrica The supply market comprises both the competitive segment and the universal service (US) Furnizare and supplier of last resort (SoLR) segment. Be
Slide 11: Group’s financial results
2 Group’s financial results 11
Slide 12: Summary Consolidated Financials
Summary Consolidated Financials Group’s financial results Revenues EBITDA Growth and Margin Performance (RON mn) EBITDA (RON mn) and EBITDA Margin (%) 800 21.80% 25.00% 5,018 4,776 700 17.36% 20.00% 430 409 600 9.47% 15.00% 500 6.71% 10.00% 400 829 1,577 4,588 1,757 5.00% 4,367 300 132 142 200 475 0
Slide 13: Consolidated EBITDA and net result evolution
Consolidated EBITDA and net result evolution Group’s financial results Comments EBITDA (RON mn) The consolidated EBITDA variation 9M 2021 vs. 9M 2020 is RON -354 mn, being mostly the cumulated effect of the factors below: ❑ The negative variation of the energy margin RON -175 mn, thereof: • RON +82.
Slide 14: Distribution segment - highlights
Distribution segment - highlights Group’s financial results Key figures 9M 2021 Financial results EBITDA increased by RON 43 mn (+8.5%), mainly due to the evolution of the following indicators: ▼revenues RON -97.2 mn (-4.8%), being mainly the net effect of both the electricity revenues increase by ~
Slide 15: Electrica Serv (SERV)
Electrica Serv (SERV) Group’s financial results General overview Revenues SERV provides repair and other energy-related services to third parties, as well as various services (RON mn) to the companies within the group (vehicles rental, building rental etc.). From 1 December 2020, SERV absorbed SEM s
Slide 16: Supply segment – Electrica Furnizare
Supply segment – Electrica Furnizare Group’s financial results Key figures (9M 2021) Financial results EBITDA significantly decreased by RON 260.6 mn compared to 9M 2020, mainly following the Coverage evolution of the factors below: ▲ revenues increase of RON 383.5 mn, mainly as a result of the reta
Slide 17: Dividend distribution
Dividend distribution Group’s financial results Distributed gross dividends (FY 2014 - 2020) (RON mn) Gross dividend per share (RON) and Dividend yield(1) (%) 291.6 6.9% 7.3% 6.9% 244.7 251.4 245.4 247.5 246.1 247.9 6.8% 5.2% 6.0% 6.1% 0.8600 0.7217 0.7415 0.7237 0.7300 0.7248 0.7300 2014 2015 2016
Slide 18: Group liquidity
Group’s financial results Group liquidity ❑ At Group level, the total liquidity available in th cash and overdraft limits as of 30 September 2021 was amounting RON 895 million, recording as a slight increase compared to the end of the previous quarter (30 June 2021: RON 863 million), taking into acc
Slide 19: Group’s Budget for 2021
Group’s Budget for 2021 Curectrica
Slide 20: Consolidated budget 2021 (RON mn) – IFRS values
Consolidated budget 2021 (RON mn) – IFRS values Group’s budgets for 2021 The significant variances are detailed below: Budget B2021 vs. B2021 vs. Indicator Actual 2020 2021 A2020 A2020 % 1. The revenues’ increase of RON 389.1 mn is the net effect of: Revenue 6,501.1 6,890.2 389.1 6.0% Other income 1
Slide 21: 2021 Budget – Distributie Energie Electrica Romania (DEER)
2021 Budget – Distributie Energie Electrica Romania (DEER) Group’s budgets for 2021 Whilst the three distribution subsidiaries merged on 31.12.2020, the budgeting was done at each geographical region level, considering that for the next three years of the fourth regulatory period, the tariffs; appro
Slide 22: 2021 Budget vs Actual 2020 – DEER
2021 Budget vs Actual 2020 – DEER Group’s budgets for 2021 Actual 2020 Budget 2021 B2021 vs. B2021 vs. RON mn SDTN SDTS SDMN Adjustments TN TS MN 3DSO DEER A2020 A2020 % Revenues from distributed energy 629.7 614.2 647.1 - 1,890.9 2,006.1 646.5 673.1 686.5 115.1 6.1% Other energy revenues 37.8 37.0
Slide 23: 2021 Consolidated budget – Electricity supply and production segment
Group’s budgets for 2021 2021 Consolidated budget – Electricity supply and electricity production segment Assumption electricity – ▪ The sales forecasts for the regulated segment were established based on the consumption history for the clients in the portfolio; Universal ▪ 2021 sales forecast for t
Slide 24: 2021 Budget vs. Actual 2020 – EFSA & EEV1
2021 Budget vs. Actual 2020 – EFSA & EEV1 Group’s budgets for 2021 Actual 2020, out Budget 2021, out B2021 vs. B2021 vs. A2020 RON mn EFSA EEV1 EFSA EEV1 of which: of which: A2020 [%] Electricity and gas revenues 4,493.5 4,491.6 1.9 4,792.6 4,789.4 3.2 299.3 6.7% Electricity and gas purchase (3,984.
Slide 25: Main Corporate Events
Main Corporate Events Curectrica
Slide 26: Main events in 2021 and up to date (1/3)
Main events in 2021 and up to date (1/3) Main Corporate Events ELSA’s General Meetings of Shareholders dated 28 April 2021: ▪ Annual OGMS – mainly the following have been approved: ✓ the 2020 individual and consolidated financial statements and the 2021 individual and consolidated budget; ✓ the prop
Slide 27: Main events in 2021 and up to date (2/3)
Main events in 2021 and up to date (2/3) Main Corporate Events Important decisions of the BoD: ▪ 26 February 2021 – approval of the consolidated value of the Investment Plan (CAPEX) of the Group for 2021, in total amount of RON 712.4 mn. Out of this value, RON 638.9 mn represents the investment plan
Slide 28: Main events in 2021 and up to date (3/3)
Main events in 2021 and up to date (3/3) Main Corporate Events ▪ 12 October 2021 - Electrica concluded with DEER an Intragroup Credit Agreement, valid until October 12, 2029, the amount that can be borrowed by DEER under the contract being up to RON 246,325,000. ▪ 18 October 2021 - the Company has r
Slide 29: Group Strategy implementation
5 Group Strategy implementation 29
Slide 30: Strategic directions
Strategic directions Group Strategy Implementation Electrica is committed to ensuring the balance between creating long-term value for stakeholders and maximizing shareholder returns Ambition of regional player Governance and investor relations • Continuous improvement and implementation of best pra
Slide 31: Strategic objectives and initiatives for 2019-2023
Group Strategy Implementation Strategic objectives and initiatives of the Electrica Group for the period 2019-2023 Strategic objectives 1 2 3 4 Expand into adjacent Improve operational Increase performance domains and obtain performance to Continue investments to and enhance the synergies with the c
Slide 32: Areas of high interest for further development
Areas of high interest for further development Group Strategy Implementation Opportunities for inorganic growth Distribution of Supply of electricity electricity and natural gas Electrica Group New activities based Energy services on innovative technologies Traditional areas High interest areas 32
Slide 33: Ethics - a priority for sustainable development
Ethics - a priority as a preliminary requirement for the Group Strategy Implementation sustainable development of the Electrica Group Zero tolerance policy towards bribery, fraud, Organizational culture centered around a theft and other forms of corruption strong sense of ethics Developing an ethica
Slide 34: Implementing the strategy on distribution and services segments
Group Strategy Implementation Implementing the Electrica Group’s strategy on the distribution and services segments Distribution operators integration project (DSO) Integration project of the two energy services companies (ES) Absorbing company: SDTN Absorbing company : EL SERV Current status: succe
Slide 35: Shareholdings’ structure and evolution of the shares and GDRs
6 Shareholdings’ structure and evolution of the shares and GDRs 35
Slide 36: Shareholder Structure as of 30 September 2021
Shareholdings’ structure and evolution of the shares and GDRs Shareholder Structure as of 30 September 2021 Percent of share Shares with voting Shareholder Shares capital right Romanian State through the Ministry of Energy 169,046,299 48.7948% 49.7850% EBRD 17,355,272 5.0096% 5.1112% Electrica 6,890
Slide 37: Monthly volume and average price of Electrica’s shares and GDRs
Shareholdings’ structure and evolution of the shares and GDRs Monthly volume and average price of Electrica’s shares and GDRs 30,200,000 30,089,933 14 2,894,263 13 2,800,000 2,730,355 12 2,600,000 2,400,000 11 2,281,172 2,200,000 2,114,286 10 2,000,000 9 1,796,076 1,755,148 1,799,309 1,800,000 8 1,6
Slide 38: Electrica’s adjusted closing price vs BET-TR
Shareholdings’ structure and evolution of the shares and GDRs Electrica’s adjusted closing price vs BET-TR (1 June 2020 – 31 October 2021) 70.00 60.00 EL: 14,04% BET-TR: 57,45% 50.00 40.00 30.00 20.00 10.00 0.00 -10.00 BET-TR Electrica's price adjusted with dividends Source: Company’s data, BSE 38
Slide 39: Appendices
Appendices Curectrica
Slide 40: Important Regulatory Changes – Distribution Activity (1/2)
Important Regulatory Changes – Distribution Activity (1/2) ❑ RP4 Regulations on Distribution tariffs • RRR: ANRE approved Order no. 75 of 6 May 2020, which established a regulated rate of return (RRR) for electricity and gas, distribution and transmission of 6.39% for the existing RAB, until the end
Slide 41: Important Regulatory Changes – Distribution Activity (2/2)
Important Regulatory Changes – Distribution Activity (2/2) ❑ Distribution performance standard: (i) better performance continuity indicators; (ii) automatic granting of compensations without request from users, (iii) gradual installation timetable of technical quality analyzers until 2028 (100% prim
Slide 42: Changes in Distribution Regulation - RP4
Appendices Changes in Distribution Regulation - RP4 Regulated Revenue and tariff calculation 1 2 3 4 5 6 7 8 7 Regulated Revenue Reactive en. Regulated Contr. Non- Tariff NL Cost Depreciation RRR2 & 95% profit Revenue OPEX1 controllable other activ. 9 Forecasted Volume OPEX 1 • The starting point is
Slide 43: Changes in Distribution Regulation
Appendices Changes in Distribution Regulation Methodology for determining distribution tariffs - Summary RP4 vs RP3 RP3 RP4 1 RRR January 2019: 5.66% existing RAB & 1% incentive RP4 network invest.(acc. ANRE) Return RRR (7.7%) applied to RAB 29 March 2019–30 April 2020: 6.9% total RAB (acc. GEO 19/2
Slide 44: Methodology for determining distribution tariffs – RAB & Investment
Appendices Changes in Distribution Regulation Methodology for determining distribution tariffs – Comparative elements RP4 vs RP3 RAB & Investment RP3 methodology RP4 methodology 1. RAB includes: assets used for the distribution service, which are recorded into the DSOs accounts as tangible assets an
Slide 45: Methodology for determining distribution tariffs – Opex & NL
Appendices Changes in Distribution Regulation Methodology for determining distribution tariffs – Comparative elements RP4 vs RP3 Opex & NL RP3 methodology RP4 methodology Controlable OPEX 1. OpexC 2019 is established based on formula (approved 1. OpexC 2019 is not established based on formulae, but
Slide 46: Regulatory-related Developments – Supply – Q3 2021 (1/4)
Appendices Regulatory-related Developments – Supply – Q3 2021 (1/4) Compensation scheme for for the consumption of electricity and gas during the 2021-2022 cold season (Government Emergency Ordinance No. 118/2021, approved with amendments via Law No. 259/2021) : - The support scheme shall be applied
Slide 47: Regulatory-related Developments – Supply – Q3 2021 (2/4)
Appendices Regulatory-related Developments – Supply – Q3 2021 (2/4) New consumer information obligations for suppliers of last resort (SoLRs) in the process of liberalization of electricity market (ANRE Order No. 5/2021 Market changing ANRE Order No. 171/2020) : liberalization - Until 30 June 2021,
Slide 48: Regulatory-related Developments – Supply – Q3 2021 (3/4)
Appendices Regulatory-related Developments – Supply – Q3 2021 (3/4) Re-defining electricity long-term contracts negotiable bilaterally, over-the-counter (ANRE Order No. 26/2021 changing ANRE Order No. 65/2020): Wholesale - Any contract with a min. 1-month duration (as compared to at least 1-year lon
Slide 49: Regulatory-related Developments – Supply – Q3 2021 (4/4)
Appendices Regulatory-related Developments – Supply – Q3 2021 (4/4) Tariffs, Approval of electricity transmission and system service tariffs, enforced as of 1 March 2021 (ANRE Order No. 10/2021) contribution, - 9.5% decrease in the system service tariff; transmission tariff kept the same etc. Approv
Slide 50: Glossary
Glossary ANRE Romanian Energy Regulatory Authority LV Low Voltage BoD Board of Directors MV Medium Voltage BSE Bucharest Stock Exchange MWh MegaWatt hour CAPEX Capital Expenditure NBV Net Book Value NL Network Losses DAM Day Ahead Market OGMS Ordinary General Meeting of Shareholders DSO Distribution
Slide 51: 2021 Financial Calendar
2021 Financial Calendar • 26 February Publication of the 2020 financial annual consolidated and individual preliminary results • 5 March Publication of the 2020 financial annual results - documents for the Ordinary General Meeting of Shareholders • 8 March Investor and analyst teleconference for 202
Slide 52: Investor Relations
Investor Relations • Email: ir@electrica.ro • Web: https://www.electrica.ro/en/investors/ Investor Relations • Tel: +40 (0)21.208.50.35 • Address: 9 Grigore Alexandrescu Str., 1st District, Bucharest, 010621 This document was drafted using the information provided in the Q3 2021 financial results pr
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