Iren S.p.a. · MIL:IRE
Iren — Investor Day (December 2010)
31 slides from Iren's investor day presentation, Dec 13, 2010
Slide 1: 2011-2015 Strategic Plan: The way forward
2011-2015 Strategic Plan water waste power gas district heating The way forward December 13th 2010
Slide 2: Agenda
Agenda Section I: Positioning, key market trends and strategy Section II: Completion of main projects Section III: Projections and main targets by SBU Section IV: Financial projections Closing remarks 1
Slide 3: Strategic route
Strategic route OCTOBER 2006 JULY 2010 MARCH 2005 AUGUST 2010 Merger of AMGA Successful Merger of AGAC, and AEM Turin to Merger between completion of the 2011-2015 AMPS and TESA to create IRIDE, Iride and ENÌA voluntary tender create ENÌA , leading operator in STRATEGIC creates IREN offer by San lea
Slide 4: Geographical presence and key data
Geographical presence and key data STRONG GEOGRAPHICAL KEY 2009 DATA* FOOTPRINT Present in regions Revenues: 3,200 EUR million (Piemonte, Liguria EBITDA: 566 EUR million and Emilia), 60% from regulated activities representing ca 13% of the Italian GDP 5,000 employees FULL COVERAGE OF THE COMPLETE AN
Slide 5: Market positioning and ranking
Market positioning and ranking DISTRICT HEATING 2009A - Heat energy sold (GWht) 2,430 1st EBITDA Breakdown by SBU - DH volumes (mln cm) 63 Unregulated Activities: ~40% GAS - Volumes sold (mln cm) 3,466 - Distributed volumes (mln cm) 2,000 5th - Customers (000) 1,200 - Network (km) 8,700 ELECTRICITY
Slide 6: 2011-2015 Strategic Plan: priorities and drivers
2011-2015 Strategic Plan: priorities and drivers IREN POSITIONING MARKET SCENARIO • 23 bis Ronchi Decree enhances • 3rd position at national level competition WATER • Top level expertise • ~60% of total concessions to be • Flexible and reactive business model re-assigned (San Giacomo) • High visibil
Slide 7: 2011-2015 Strategic Plan: the pillars
2011-2015 Strategic Plan: the pillars Consolidation and integration of the Challenging growth in reference areas full energy/gas value chain and market opportunities DISTRICT GENERATION NETWORKS MARKET WATER WASTE HEATING STRATEGIC PILLARS Growing with the market: doubling Enterprise Value by 2015 W
Slide 8: 2011-2015 Strategic Plan: overview
2011-2015 Strategic Plan: overview CONSOLIDATION-------------------EXPANSION STRENGTHENING GROWTH IN CONSOLIDATION REFERENCE AREAS BITING THE MARKET • Focus on reference areas, and West • Competing for selected • Completion of OLT, PAI and Turin North Piemonte, where synergies could be opportunities
Slide 9: 2011-2015 Strategic Plan: macroeconomic scenario
2011-2015 Strategic Plan: macroeconomic scenario Gas ECONOMIC VARIABLES 2009 2013E 2015E Recovery of pre-crisis gas consumption volumes expected in 2014 BRENT ($/bbl) 60.7 82.6 85.0 Excess of imports (capacity & contracts) may FOREX (€/$) 1.39 1.35 1.35 put further pressure on gas margins in the dom
Slide 10: 2011-2015 Strategic Plan: Electricity market scenario
2011-2015 Strategic Plan: Electricity market scenario CO2 price scenario 2015: • 30€/tonz Spark Spread [€/MWh] 80 77.3 79.7 70 74.6 PUN 71.6 CO2 69.3 GCs Clean spread 18.8 19.8 20 17.4 14.6 13.5 2,7 7,6 9,3 10,9 10 2,0 5,6 6,2 3,8 1,9 0,0 5,9 5,8 6,0 7,6 8,9 0 2011 2012 2013 2014 2015 3rd ETS regula
Slide 11: 2011-2015 Strategic Plan: Green Certificates scenario
2011-2015 Strategic Plan: Green Certificates scenario Historical Scenario Average guaranteed Average €/MWh Price based on CIP6 prices (Jan) repurchase 250 tariff price (last 3 8% price Environmental law decree 180€/MWh years) effect 2010 – GC price at 70% cut x (180 – PUN) 200.0 196.1 199.9 200 167.
Slide 12: Agenda
Agenda Section I: Positioning, key market trends and strategy Section II: Completion of main projects Section III: Projections and main targets by SBU Section IV: Financial projections Closing remarks 11
Slide 13: Development of Turin North project
Development of Turin North project Electric capacity 400 MWe Thermal capacity 220 MWt Start up Oct. 2011 The Turin North project envisages the building of a CCGT plant (400 MWe, 220 MWt) gas fueled, with three back up and integration boilers and a heat storage system. The project is well advanced (a
Slide 14: Development of OLT project
Development of OLT project Capacity 3.75 bcm/y Third Part Access 0% Start up Jan. 2012 Main strategic targets of the ongoing negotiations with E.ON that innovate MoU signed in 2009: Balance the stake in OLT with the regas capacity of IREN (20% vs actual 41.7%). Take up to 1Bcm of LNG with flexible l
Slide 15: Development of Parma WTE project
Development of Parma WTE project Capacity 130 Kton Electric capacity 18 MW Start up Jul. 2012 Project’s description The new WTE in Parma area has been included in the “Provincial management waste planning”. The WTE is expected to start by 2H 2012 and will allow the Parma area to achieve self suffici
Slide 16: Agenda
Agenda Section I: Positioning, key market trends and strategy Section II: Completion of main projects Section III: Projections and main targets by SBU Section IV: Financial projections Closing remarks 15
Slide 17: Generation
Generation Completion of Turin North €m 2009A 2015E Completion of repowering Valle Orco Maximisation of production efficiency Revenues 662 950 Average green certificates 1,000 GWh per year EBITDA 166 232 Development of renewable energy production CUMULATED CAPEX 256 €m EBITDA CAGR +40% Energy produc
Slide 18: Market
Market Consolidation and increase of customer base 2010 2015 both on reference areas and through the acquisitions of commercial companies +33% Gas clients cross selling M&A +23% Energy clients CLIENTS - GAS (‘000) CLIENTS - ELECTRICITY (‘000) 961 800 719 652 2009A 2015E 2009A 2015E 17
Slide 19: Market
Market Consolidation of gas purchase platform €m 2009A 2015E (Plurigas, Sinit, Olt) Taking advantage of the present high flexible Revenues 2,808 3,050 short/long term portfolio according to the EBITDA 43 67 market conditions CUMULATED CAPEX 57 €m EBITDA CAGR 7.6% GAS SOURCING AND USAGES ELECTRICITY
Slide 20: Energy infrastructures
Energy infrastructures Completion of DH network in Turin North and €m 2009A 2015E development in reference areas Revenues 378 428 Maximisation of cash flow from gas Potential disposals of gas networks in areas EBITDA 195 240 with lower market share Reduction of stake in OLT CUMULATED CAPEX 601 €m EB
Slide 21: Water
Water Consolidation and development in reference €m 2009A 2015E areas Full development of San Giacomo potential Revenues 303 796 Maximization of profitability trough synergies EBITDA 105 303 coming from doubling of activities CUMULATED CAPEX 1.063 €m EBITDA CAGR 19.3% +100% Volumes distributed 1st N
Slide 22: Waste
Waste Completion of Parma WTE €m 2009A 2015E Significant growth in special waste disposal capacity with a target of 30% of captive market share Revenues 212 437 Focus on reference areas with priority where the EBITDA 37 115 range of services can be completed CUMULATED CAPEX 394 €m EBITDA CAGR 20.6%
Slide 23: Synergies' overview
Synergies’ overview CUMULATED SYNERGIES €ml Key synergies Purchases: • Benefit from increased volumes 70 • Extension of e-procurement platform ~50 Market: • Optimization of procurement and cost-to- serve • Enlargement of energy trading base • Cross selling and completion of portfolio of 2011 2012 20
Slide 24: Agenda
Agenda Section I: Positioning, key market trends and strategy Section II: Completion of main projects Section III: Projections and main targets by SBU Section IV: Financial projections Closing remarks 23
Slide 25: Capex 2011E - 2015E
Capex 2011E - 2015E €m €ml 2011E-2015E CUMULATED CAPEX BY SBU Development Committed 68 ~ 2,450 394 160 1,063 234 680 28% 403 660 601 1,760 40 72% 561 256 57 37 40 20 216 Generation Market Energy Water Waste Other Total Capex Infrastr. 2011E-2015E 24
Slide 26: 2009A - 2015E EBITDA bridge
2009A - 2015E EBITDA bridge 2015E 2009A-2015E EBITDA Bridge EBITDA Breakdown by SBU €ml 21 ~ 1,000 Unregulated Activities: ~34% 78 198 70 ml synergies 45 66 24 566 Regulated Activities: ~66% 25
Slide 27: Financial structure
Financial structure Evolution of Net Debt/ EBITDA Evolution of EBITDA/CAPEX ~ 2,000 ~ 1,000 Improving financial structure: significant deleveraging to 2.5X in 2015 Free cash flow positive from 2013, cumulated free cash flow 2011-2015 over 400 €m Targets: Increase of average debt duration exploiting
Slide 28: Balance sheet structure
Balance sheet structure ROE Debt/Equity 10.1% 7.9% 1.07X 1.04X 2009A* 2015E 2009A 2015E ROI 10.8% 7.9% Significant increase of returns on Equity and Invested Capital Well balanced Debt/Equity ratio 2009A 2015E * Net of fiscal moratorium impact 27
Slide 29: Agenda
Agenda Section I: Positioning, key market trends and strategy Section II: Completion of main projects Section III: Projections and main targets by SBU Section IV: Financial projections Closing remarks 28
Slide 30: Closing remarks
Closing remarks Based on the market scenario, and the competitive positioning of the IREN Group, the 2010-2015 strategic plan seeks to: Strengthen the Group's position in water, waste and district heating Preserve and enhance the existing customer base in the supply of gas and electricity by optimiz
Slide 31: Disclaimer
DISCLAIMER This document has been prepared by IREN solely for use at investors and analysts meetings. This document does not constitute an offer or invitation to purchase or subscribe any shares and neither it nor any part of it shall form the basis of or be relied upon in connection with any contra