Iren S.p.a. · MIL:IRE
Iren — FY2018 Earnings Presentation
25 slides from Iren's earnings presentation, Apr 12, 2019
Slide 1: 2018 – FY Results
12th April 2019 2018 – FY Results
Slide 2: Abstract
Abstract The FY 2018 Results mark a further step along a growth path, started 4 years ago, leading the Company to strong achievements in line with the last Business plan objectives: o Ebitda up by 220 m€ (cagr ~8%); 4 YEARS o NFP/Ebitda from 3.6x to 2.8x (calculated on Ebitda recurrent); GROWTH o
Slide 3: FY 2018 results: growth trend confirmed
FY 2018 results: growth trend confirmed Ebitda Bridge (m€) NFP/EBITDA (m€) Cagr ~8% NFP EBITDA NFP/EBITDA 101 967 ~130 866 2,286 2,457 2,372 2,453 ~85 2,169 640 ~60 3.6x 3.2x 3.0x 2.9x 2.8x (50) 678 814* 820 866 640 EBITDA GC expiry Synerg. Consolid. EBITDA 2018 EBITDA 2018 FY '14 Ebitda FY '15 FY '
Slide 4: FY 2018: underlying growth led by all the strategic pillars
FY 2018: underlying growth led by all the strategic pillars in a extraordinary energy scenario KPIs Ebitda Bridge m€ FY '17 FY '18 Δ Δ% +3,1% 101 967 Revenues 3,697 4,041 344 9.3% 32 13 15 866 20 840 20 Ebitda 820 967 147 17.8% 820 (26) (28) Ebit 420 530 110 26.2% Net profit 238 242 4 1.8% Tech. Cap
Slide 5: NETWORKS – Organic growth, Synergies and Consolidation
NETWORKS – Organic growth, Synergies and Consolidation more than offset the absence of balances recorded in 2017 m€ FY '17 FY '18 Δ Δ% Revenues 936 947 11 1% • Energy and water networks: operating margins have been mainly affected by the absence of positive balances Ebitda 336 342 6 2% (roughly 25m€
Slide 6: WASTE – Margin recovery thanks to higher volumes and prices
WASTE – Margin recovery thanks to higher volumes and prices • Ebitda growth thanks to a positive scenario (higher PUN) WASTE and organic growth driven by plants saturation, synergies and ACAM consolidation (+2m€). m€ FY '17 FY '18 Δ Δ% Revenues 551 610 59 11% • The positive results in waste disposal
Slide 7: ENERGY – Growth led by exceptional hydro volumes
ENERGY – Growth led by exceptional hydro volumes, strong ancillary services offset by lower spark spread m€ FY '17 FY '18 Δ Δ% • Generation sector: the aggregate volumes of electricity production are in line with last year. The increase in hydro Revenues 1,104 1,345 241 22% volumes has been offset b
Slide 8: MARKET – The negative commodity scenario persists
MARKET – The negative commodity scenario persists particularly in the gas sector m€ FY '17 FY '18 Δ Δ% • 41m€ extraordinary contribution due to a market accrual related to previous years, accounted in Q4. Revenues 2,418 2,602 184 8% • Electricity sale sector: the increase in volumes sold and Ebitda
Slide 9: From EBITDA to Net Profit
From EBITDA to Net Profit FY '17 FY '18 Δ Δ% EBITDA 820.2 966.6 146.4 17.8% D&A -353.2 -383.9 • Increase in D&A related to consolidation process (ACAM and IREN Rinnovabili) Provisions to bad debt -46.7 -52.2 EBIT 420.3 530.5 110.2 26.2% • Lower cost of debt (2.7% compared to 3.1% last year). Financi
Slide 10: Cash-flow and NFP Bridge
Cash-flow and NFP Bridge -78m€ 182 2,453 2,372 113 6 2,294 (23) 447 (273) (322) (49) NFP 31.12.17 Net Profit D&A, NWC Variation Capex Dividends Derivatives and NFP adj. Consolidation Disposal NFP 31.12.18 provisions and dividend other cash-in Overall, the NFP worsens by only 3.4% notwithstanding 1
Slide 11: Interest rate and debt structure
Interest rate and debt structure Gross debt interest rate 94% of gross debt at fixed interest rate and 6% 6% of gross debt at variable interest rate. 17% Average long-term debt duration of about 77% 5.3 years (5.9 years in FY 2017). Reduction in cost of debt (2.7% vs. 3.1% in Fixed Swap Variab
Slide 12: Closing remarks
Closing remarks The Iren’s sound asset base combined with the effectiveness of the strategy has been allowing the company to cope with the energy scenario volatility. Since last year the Group is focusing more on organization’s enhancement to deal with: o A larger complexity led by the several compa
Slide 13: Annexes
Annexes Pag. 13
Slide 14: IREN at a glance
IREN at a glance 2018 data CUSTOMERS: >7million >1.7M in the energy sector Inhabitants in ~2.8M served inhabitants in the water service IREN’s reference ~2.3M served inhabitants in the waste sector areas ~0.9M served inhabitants in district heating >3.5 services provided per clients REGULATED ACTIVI
Slide 15: Actual progress vs. business plan targets
Actual progress vs. business plan targets Ebitda Bridge ~1,085 40 60 ~1,020 967 30 90 866 (65)* (101) EBITDA 2018 one-offs EBITDA 2018 Networks Waste Energy Market EBITDA 2023 Certificates Ebitda 2023 2018 recurrent recurrent expiry * Certificates expiry: ~40m€ expiring in 2019 (GCs) and ~25m€ expir
Slide 16: EBITDA progress by SBU
EBITDA progress by SBU NETWORKS ~650m€ increase in RAB mainly in water thanks also to ACAM consolidation since April 2018 (140m€) 425 Roughly 850m€ invested in water network efficiency and water treatment plants 319 336 342 301 304 Maintaining all the gas and water concessions in which IREN is
Slide 17: EBITDA progress by SBU
EBITDA progress by SBU ENERGY Growth in margins in spite of the expiry of 40m€ of GCs on hydro and 25m€ of WCs on cogeneration (Ebitda cagr 270 would be 5.4% net of certificates expiry). 266 234 241 Full utilization of existing heat production sources (Plants/WTEs) thanks to the increase in volu
Slide 18: Networks concessions
Networks concessions GAS TENDERS WATER CONCESSIONS ELECTR. CONCESSIONS ATEM Expiry AREA Expiry AREA Expiry Genova 1 Expired Piacenza Expired Torino 2030 Parma Expired Reggio Emilia Expired Parma 2030 Reggio Emilia Expired Genova 2032 Vercelli 1 2030 Vercelli Expired Parma 2025 Piacenza 2 - Est Expir
Slide 19: Hydroelectric and Waste concessions
Hydroelectric and Waste concessions HYDROELECTRIC CONCESSIONS WASTE CONCESSIONS Electric AREA Expiry AREA Hydroelectric plant Power Expiry Parma** Expired (MW) Piemonte 1 Pont Ventoux-Susa 157 2034 Piacenza** Expired Expired Reggio Emilia Expired Piemonte 2 Valle Orco e S. Mauro 300 2010 S. Lorenzo,
Slide 20: Regulated business – WACC assumptions
Regulated business – WACC assumptions GAS ELECTRICITY WATER DISTRIBUTION DISTRIBUTION SERVICE Regulatory period 6 years (2014 – 2019) 8 years (2016 – 2023) 4 years (2016 – 2019) WACC methodology update 6 years (2016 – 2021) 6 years (2016 – 2021) - WACC update every three years (2019) every three yea
Slide 21: Scenario
Scenario FY '17 FY '18 Δ% Gas Demand (bcm) 74.7 72.1 -3.5% TTF €/000 smc 18.3 24.1 31.7% PSV €/000 smc 20.7 25.6 23.7% ACTUAL Energy Demand (Twh) 320.5 321.9 0.4% PUN (€/Mwh) 53.9 61.3 13.7% ETS €/Ton 5.8 15.9 174% Clean SS/PSV (€/Mwh) 7.6 4.6 -40% Green Cert. Hydro (€/Mwh) 107.3 99.0 -7.8% Energy e
Slide 22: Shareholding structure
Shareholding structure Public entities IREN’s Shareholders are more than 50%: SHAREHOLDING STRUCTURE >50% Public Municipality of Genoa ~19%, Municipality of Turin ~14%, Emilia Municipalities (Reggio Emilia, Piacenza and other minor Municipalities) ~17%, La Parma, Shareholders Spezia Municipalities ~
Slide 23: Public entities/Shareholders
Public entities/Shareholders IREN SHAREHOLDING STRUCTURE TRADE REGIME OF PUBLIC SHAREHOLDERS’ SHARES Negotiable Freely negotiable Non-negotiable shares (under shares (not Shareholders Total Shares % Total Voting rights % Shareholders Total Shares shares specific policy to included in the (until may
Slide 24: Balance Sheet
Balance Sheet FY ’18 FY '17 Net fixed assets 5,786 5,412 Net Working Capital 132 182 Funds -621 -618 Other assets and liabilities -282 -105 Net invested capital 5,015 4,871 Group Shareholders' equity 2,562 2,499 Net Financial Position 2,453 2,372 Total Funds 5,015 4,871 Pag. 24
Slide 25: DISCLAIMER
DISCLAIMER The Manager in charge of drawing up the corporate accounting documents and the Chief Financial Officer of IREN S.p.A., Mr. Massimo Levrino, hereby declares, pursuant to paragraph 2 of article 154 bis of the Consolidated Finance Act (Legislative Decree No 58/1998), that the accounting info