Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — ESG Presentation (March 2017)
30 slides from Edp's sustainability presentation, Mar 16, 2017
Slide 1: Sustainable Development
<3 Sustainable Development 16 March 2017 Jones | . Sustainability Indices In Collaboration with RabecoSAM
Slide 2: Wind & Solar Power: a worldwide renewable market leader
Wind & Solar Power 31% of EBITDA (13% North America; 6% Portugal; 6% Spain; 6% Other) Listed subsidiary: EDP Renováveis (EDP has 77.5%) IPO in Jun-08 Wind & Solar Power: 10.1GW A worldwide renewable market leader Portugal Spain EDP Brasil 39% of EBITDA 14% of EBITDA 16% of EBITDA Privatisation in 19
Slide 3: Strategic Priorities
Strategic Priorities Balance between Growth & I II Controlled Risk Financial Deleverage Focused growth: long-term Keeping low risk profile contracted renewables and reinforcing presence in our regulated networks core markets and optimization Deleverage commitment: of capital allocation improve
Slide 4: Electric sector is pivotal for decarbonisation and EDP has been committed
1. Emissions Carbon Price Signal Reduce CO2 specific emissions by 75% before 2030 (compared to 2005 levels) • Higher CO2 price needed to promote decarbonisation through coal-to-gas switching 2. Renewables • Further changes to ETS required Increase of electricity generation from renewable energy sour
Slide 5: Continue to grow, preserve low risk, climate change, improve efficiency
CONTINUE PRESERVE LOW RISK CLIMATE IMPROVE TO GROW BUSINESS PROFLE CHANGE EFFICIENCY 1 Renewable Energy Growth focused on CO2-free technologies where EDP has recognized competitive advantages. 2 Energy Efficiency Implementation of smart grids technologies and active promotion of demand side manageme
Slide 6: Reduction of CO2 emissions by more than 30% by 2020 vs. 2015
1 EDP Group installed capacity by technology(1) Specific CO2 emissions (GW) (ton CO2/MWh) (2) Hydro Wind CCGT Other +137% +20% -46% -29% 29.9 0.63 24.9 11% 14% 12% 15% 0.34 12.6 44% 39% 76% 0.24 40% 71% 12% 6% 48% 32% 32% 42% 2005 2015 2020E 2005 2015 2020E % LT 54% 68% 63% Contracted(3) Reduction o
Slide 7: Net Debt / EBITDA 2017E and residual asset life
1 Average Residual Useful Life of EDP’s Generation – 2020E European Utilities: 2017E Net Debt/EBITDA vs. Residual Asset Life(2) by Technology(1) Hydro CCGT Wind & Solar Coal with DeNOx Nuclear 7.0 Net Debt / EBITDA 2017E (x) 6.0 (33%) 30 TERNA 5.0 RWE 2005(2) SRG (13%) 22 21 Avg. Residual Life A2A I
Slide 8: EBITDA Growth 2015-20
1 EBITDA Growth 2015-20(1) (%) CAGR CAGR ex-Forex Avg. capacity +8% CAGR in 2015-20 additions EDPR 3% with long term PPAs or feed-in tariffs, mostly in US 3.6 8% 37% EBITDA in local currency +4% CAGR, eroded by EDPR 30% EDP Brasil conservative assumption on EUR/BRL 13% 4% EDP Brasil 16% 0% Slight im
Slide 9: Avg. net investments €1.4bn/year supporting medium term FCF growth
1 Net Investments(1): 2016E-20E Breakdown of accumulated Net Investments(1): 2016E-20E (€bn) (% of € bn) 1.7 1.6 Regulated Brazil 1.2 Networks 8% 1.1 Net Expansion 1.0 Investments 30% 0.6 Iberia 84% 22% 54% LT Contracted Regulated & 0.6 0.6 0.6 Maintenance Renewables LT Contracted 16% Avg. Avg. Avg.
Slide 10: Smart grid technologies are fundamental in the new design of utilities' business model
2 DSO’s Challenges Inovgrid is EDP’s pivotal project for smart grids Quality of service Traditional Operational efficiency Yielding improvements on several levels: Efficiency consumption, technical losses, fraud detection Renewables and distributed generation Ability to manage distributed
Slide 11: The transition to this new role of the customer
2 PURCHASES DRIVERS DISTRIBUTED SMART TECH GENERATION ACCESS TO ENERGY CONSUMPTION EFFICIENCY DATA DEMAND-SIDE STORAGE RESPONSE CUSTOMER ELECTRIC CHOICE MOBILITY The transition to this new role of the customer implies a rethinking of the retail energy market design … 10
Slide 12: Solar energy, distributed storage, electric mobility, home energy management
2 Solar energy Distributed storage ▪ Self consumption launched in 2015 with ~9k ▪ Technical solutions evaluation system sales until now ▪ Lithium battery pilot tests ▪ Several communication campaigns and ▪ Battery integration with solar energy commercial innovation solutions ▪ EDP re:dy for asset ma
Slide 13: EDP Smarthome
.. and launched a new commercial concept, EDP Smarthome, to put them all together. Connect your smart energy solutions ; ) { Smarthome solutions dp 12
Slide 14: EDP is present within the several layers of energy innovation
3 Identify & develop competitive alternative clean generation to reduce emissions. €35M Cleaner energy • e.g. Smart Green Gas project Investments Development of smart grid infrastructure and applications with client/operations focus. Smarter Grids • e.g. Predis - generation predictive models Client-
Slide 15: EDP works its ecosystem for innovation
3 EDP Ventures EDP Starter Corporate venture capital Innovative incubation / looking for opportunities for acceleration concept, equity early stage investments in free, for start-ups operating the cleantech sector. in the energy sector. JV Innovation Fablab EDP Partnership with Microsoft The “Fabric
Slide 16: Stakeholder engagement: employees, customers, suppliers, community
4 Sense of community through active communication (intranet, corporate TV, bi-annual employee gatherings, Employees ethics ombudsman) Sense of empowerment through training (EDP University), job mobility and individual development plans Customers Customers are key: EDP 365 Customer Program, Cus
Slide 17: People targets for 2020
5 Hire to retire ratio: 2/3 90% fulfillment of skills Employee Engagement > 75% Employee Enablement > 75% €0,35M EBITDA/Employee in 2020 vs. €0,29M in 15 >75% digital 16
Slide 18: Annexes
ANNEXES 17
Slide 19: Wind already competes with all sources of energy
Wind already competes with all sources of energy… …and Solar PV is structurally set to increase its attractiveness Levelised Cost of Energy1 (LCoE) Indexed LCoE2 (€/MWh) (€/MWh, 2016) (10%) (22%) Wind Onshore 90 -168 Long-lasting technology with 95-117 92-100 61-106 69-98 decreasing LCoE 76-86 50-70
Slide 20: Production Tax Credits phase-down and EDPR strategy
Production Tax Credits scheme phase-down EDPR strategy under “safe-harbour conditions” to maximizing projects returns Capacity additions (GW) Project Name MW State CoD Start of construction… secured Hidalgo 250 Texas 2016 2016 2017 2018 2019 2020 2021 under negotiation/identified Timber Road III 100
Slide 21: Offshore wind projects: United Kingdom and France
UNITED KINGDOM FRANCE Le Tréport Moray Firth 500 MW + 500 MW 1.1 GW Iles d’Yeu et de max. Noirmoutier Consent granted for offshore wind development; Partnership with Engie allows de-risking Partnership with CTG (up to 30%) and complementary skills Next step: CfD1 allocation Selected in May-14 for th
Slide 22: EDP Shareholder Structure
EDP Shareholder Structure (January 9th, 2017) Dec-11: CTG won the privatisation of a 21.35% stake in EDP (@€3.45/share: 50% above market price on date of FREE FLOAT; CHINA THREE 36.7% GORGES, 21.3% announcement) CTG represented by 5 members in the General and CAPITAL GROUP, 15.0% Supervisory Boa
Slide 23: Sustainability governance structure
Purpose: monitor and supervise Corporate issue strategy related with General and sustainability and internal codes Governance & Supervisory Board of ethics/conducts Sustainability (GSB) Purpose: advise the Executive Committee (CGSC) Board of Directors in Environment environment and sustainability &
Slide 24: Sector wide leading position in sustainability agenda
EDP in the leadership “A” List Other recognition Sector wide leading position by actively contributing to global sustainability agenda 23
Slide 25: ESG ranking: Bloomberg and RobecoSAM data
ESG ranking: Besides some well known ratings, Bloomberg notices also RobecoSAM data in 2016 EDP PL Te 732 At 9:05 Vol 2,454,715 0 2.744 745 Export to Excel dp 24
Slide 26: Sustainability KPIs in performance appraisal
• • • *all employees have sustainability KPIs in their performance appraisal 25
Slide 27: Executive remuneration criteria
• Goal’s Achievement - Floor: 90%/Cap: 110% • Annually provisioned • Can go up to 80% of the annual fixed component value • Mandate Goals’ Achievement - Floor: 90%/Cap:110% • Can go up to 120% of the annual fixed component valued • 25% Total shareholder return vs. Eurostoxx utilities and PSI20 • 18,
Slide 28: Bond list and maturities
Amount Bonds Currency Maturity Coupon Market Price (Bid) Market Yield ISIN Code (million) EDP BV Euro MTN EUR 750 21/09/2017 5.750% 103.0 0.1% XS0831842645 EDP BV Euro MTN EUR 650 15/04/2019 2.625% 104.9 0.3% XS1057345651 EDP BV Euro MTN EUR 300 29/06/2020 4.125% 111.2 0.7% XS0223447227 EDP BV Euro
Slide 29: 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 this date and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where this presentation is made, o
Slide 30: IR Contacts
IR Contacts Miguel Viana, Head of IR Sónia Pimpão João Machado Maria João Matias Sérgio Tavares Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Visit EDP Website Next Events Site: www.edp.pt Mar 17th - Madrid Roadshow Link Results & Presentations: May 3rd - EDP 1Q17 Results http://www.edp.pt/ED
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