Redes Energeticas Nacionais Sa · EURONEXT:RENE
Redes Energeticas Nacionais Sa — REN - Redes Energéticas Nacionais — FY2014 Earnings Presentation
32 slides from Redes Energeticas Nacionais Sa's earnings presentation, Mar 19, 2015
Slide 1: 2014 Annual Results Report
2014 ANNUAL RESULTS REPORT March 19th, 2015 1
Slide 2: 2014 Highlights
2014 Highlights MAIN INDICATORS In 2014, REN proceeded with its €M Δ% Δ Abs. financing strategy, with special 2014 2013 emphasis on the flexibility of the EBITDA 505.2 521.5 -3.1% -16.3 financial instruments contracted, thus allowing the company to Net Financial Income(1) -113.8 -142.2 20.0% 28.4 ad
Slide 3: Average RAB increased €38.4M
Average RAB increased €38.4M CAPEX and RAB CAPEX was €163.3M, -€24.6M than in 2013, despite the increase in average RAB (+€38.4M) reaching €3,529.2M. REN €M 2014 2013 Δ% Δ Abs. is still waiting for the Government’s Average RAB 3,529.2 3,490.8 1.1% 38.4 authorization to purchase the two gas Electrici
Slide 4: RAB with focus on Electricity Assets premium
RAB with focus on Electricity Assets premium (RoR 9.3%, +€102M) Average RAB increased by €38.4M. This RoR growth was driven by Electricity with premium, the category with the highest Rate of Return (RoR); 8.0%1 0.3% 7.6% 7.8% 9.3% 7.5%1 The base rate of return in the (€M) +102 3,529 electricity busi
Slide 5: EBITDA stood at €505.2M
EBITDA stood at €505.2M driven by a lower hydro land remuneration (€M) -16.3€M (-3.1%) EBITDA benefited from the increase in +1.8 -7.8 Recovery of depreciation (+€1.8M), -0.3 521.5 (-0.1%) (+0.9%) (-45.1%) consistent with a higher asset base; +1.8 -11.8 (+17.7%) (-33.3%) There was a negative impact
Slide 6: Electricity return on RAB in line with 2013
Electricity return on RAB in line with 2013 Average RAB with positive evolution RAB REMUNERATION RAB REMUNERATION ELECTRICITY (ex. lands) NATURAL GAS (ex. tariff smoothing effect) (€M) (€M) Impact of the increase in -6.1€M Impact of the reduction -0.2€M +€5.0M (-6.9%) -€5.6M in the rate of return, t
Slide 7: Efficiency continues to improve as OPEX fell over 4% YoY
Efficiency continues to improve as OPEX fell over 4% YoY OPERATIONAL COSTS(1) (€M) -4.5€M (-4.1%) -3.7 (-6.6%) -0.8 External Supplies and Services (ESS) 110.7 (-1.4%) 106.2 decreased by €3.7M (-6.6%) due to the efforts towards the reduction of external services and the decrease in cross-border costs
Slide 8: Core OPEX reduced by 6.0% compared with 2013
Core OPEX reduced by 6.0% compared with 2013 Excluding pass-through costs, Core OPEX was down by €5.8M (from €95.3M to €89.5M) (€M) 110.7 -2.9 -2.8 -0.4 0.0 -0.4 -8.8 95.3 2013 OPEX System Costs with NG Forest Overhead lines Electricicity: Costs Core OPEX services and transportation clearing deviati
Slide 9: Net financial income improved €28.4M
Net financial income behavior improved €28.4M reflecting the strengthening of the company’s liquidity profile NET INCOME Net income in 2014 decreased by 7.0% YoY, reaching €112.8M, despite the Δ improvement in net financial income €M 2014 2013 Δ% Abs. (+€28.4M) on the back of a lower average EBITDA
Slide 10: Average cost of debt decreased by 87 b.p. to 4.7%
Average cost of debt decreased by 87 b.p. to 4.7% Net debt increased to €2,436M in 2014 The average cost of debt was down to from €2,402M in December 2013 (+1.4%). 4.7% (from 5.5% in the end of 2013). In April, REN paid €91.3M in dividends to its shareholders; NET DEBT (€M) +33.9€M (+1.4%) 2,402 -46
Slide 11: REN is already funded beyond 2016
REN is already funded beyond 2016 Net debt / EBITDA FFO / Net debt FFO interest coverage This year the Portuguese economy +0.22x +0.73p.p. +0.57x continued its recovery path. The country's macro-economic environment allowed 4.61x 4.82x 11.6% 12.4% 3.45x REN to adjust the marginal cost of debt to 2.8
Slide 12: Balance sheet
Balance sheet Total amount of fixed assets RAB related €M 2014 2013 decreased to €3,827.6M (this value includes investment subsidies); Fixed assets RAB related 3,827.6 3,864.9 Investments and goodwill (1) increased to Investments and goodwill 1 347.6 297.8 €347.6M from €297.8M at the end of 2013. Th
Slide 13: Tariff deviation balance of €148.4M
The balance of tariff deviation totalized €148.4M to be received from tariffs TARIFF DEVIATIONS €M 2014 2013 Electricity 79.6 34.9 Natural gas 68.7 68.4 TOTAL 148.4 103.3 13
Slide 14: Increased diversification of funding sources
Increased diversification of funding sources The bank loans are mainly (€539M) represented by EIB BORROWINGS loans; In April the Group signed a credit facility with the Non €M Current TOTAL Bank of China in the aggregate amount of €200M; Current The Group also had credit lines negotiated and not Bon
Slide 15: Share performance: total return of +14.3% (YTD)
Share performance: REN ended 2014 with a total return of +14.3% (YTD) ANNUALIZED CLOSING PRICES Source: Bloomberg 15
Slide 16: Market information
Market information ANALYST CMVM: MAIN PRESS RELEASES RECOMMENDATIONS (from January 2014) Jan-17: Fitch revises REN’s Outlook to stable Average price target Jan-29: S&P removes REN from CreditWatch negative and affirms its €2.72 BB+ rating with stable outlook Mar-06: Changes to the composition of the
Slide 17: REN's total shareholder return was +1.7% (ITD)
REN’s total shareholder return was +1.7% (ITD) Jun-26: Qualified shareholding (EGF) REN Jul-28: REN agrees to the purchase of Galp Energia’s natural gas 2014 underground storage concession business END OF PERIOD Jul-30: Moody’s upgrades REN’s rating to investment grade with a stable Price (€) outloo
Slide 18: Appendix
REN» APPENDIX
Slide 19: EBITDA breakdown
EBITDA breakdown 2014/2013 €M 2014 2013 Δ% Δ Abs. 1) TOTAL REVENUES 755.7 788.8 -4.2% -33.2 Revenues from assets 469.7 476.0 -1.3% -6.3 Return on RAB 262.8 269.2 -2.3% -6.3 Electricity 180.0 180.2 -0.1% -0.2 Natural gas 82.8 88.9 -6.9% -6.1 Hydro land remuneration 0.2 8.3 -98.1% -8.2 Lease revenues
Slide 20: Other operational revenues and costs breakdown
Other operational revenues and costs breakdown 2014/2013 €M 2014 2013 Δ% Δ Abs. Other revenues 19.7 20.7 -4.9% -1.0 Allowed incentives 3.1 3.0 1.7% 0.1 Interest on tariff deviation 1.2 2.7 -54.3% -1.5 Available incentive 1.0 1.0 0.0% 0.0 Telecommunication sales and services rendered 5.5 5.4 0.8% 0.0
Slide 21: EBIT breakdown (Electricity)
EBIT breakdown (Electricity1) 2014/2013 €M 2014 2013 Δ% Δ Abs. 1) REVENUES 547.8 572.4 -4.3% -24.5 Revenues from assets 336.1 338.7 -0.8% -2.7 Return on RAB 180.0 180.2 -0.1% -0.2 Hydro land remuneration 0.2 8.3 -98.1% -8.2 Lease revenues from hydro protection zone 0.7 0.7 -1.1% 0.0 Remuneration of
Slide 22: EBIT breakdown (Natural gas)
EBIT breakdown (Natural gas) 2014/2013 €M 2014 2013 Δ% Δ Abs. 1) REVENUES 200.1 209.0 -4.3% -8.9 Revenues from assets 133.6 137.3 -2.7% -3.7 Return on RAB 82.8 88.9 -6.9% -6.1 Tariff smoothing effect (natural gas) -5.5 -11.5 52.4% 6.0 Recovery of depreciation (net from subsidies) 50.6 52.8 -4.2% -2.
Slide 23: EBIT breakdown (Other)
EBIT breakdown (Other1) 2014/2013 €M 2014 2013 Δ% Δ Abs. 1) TOTAL REVENUES 7.7 7.5 3.5% 0.3 Other revenues 7.7 7.5 3.5% 0.3 Consulting and other services 1.0 0.4 0.5 Telecommunication sales and services rendered 5.5 5.4 0.8% 0.0 Other 1.3 1.6 -18.7% -0.3 2) OPEX 29.3 31.8 -8.1% -2.6 Personnel costs
Slide 24: CAPEX and RAB
CAPEX and RAB 2014/2013 €M 2014 2013 Δ% Δ Abs. CAPEX* 163.3 187.8 -13.1% -24.6 Electricity 137.4 157.6 -12.8% -20.2 Natural gas 25.8 29.9 -13.7% -4.1 Other 0.1 0.4 -83.0% -0.3 Transfers to RAB** 194.2 245.0 -20.7% -50.8 Electricity 146.0 197.3 -26.0% -51.3 Natural gas 48.2 47.7 1.0% 0.5 Average RAB
Slide 25: Debt
DEBT 2014 2013 Net debt (€M) 2,436.2 2,402.3 Average cost 4.7% 5.5% Average maturity (years) 3.9 4.4 DEBT BREAKDOWN Funding sources Bond issues 52% 60% EIB 22% 23% Commercial paper 15% 9% Loans 6% 5% CDB 6% 4% TYPE Fixed 45% 52% Float 55% 48% CREDIT METRICS Net Debt / EBITDA 4.8x 4.6x FFO / Net debt
Slide 26: Consolidated Financial Statements
REN >< CONSOLIDATED FINANCIAL STATEMENTS
Slide 27: Consolidated Statements: Financial Position
Consolidated Statements: Financial Position (tEuros) Dec 2014 Dec 2013 Dec 2014 Dec 2013 ASSETS EQUITY Non-current assets Shareholders' equity: Share capital 534,000 534,000 Property, plant and equipment 682 934 Own shares -10,728 -10,728 Goodwill 3,774 3,774 Reserves 315,621 271,634 Intangible asse
Slide 28: Consolidated Statements: Profit and Loss
Consolidated Statements: Profit and Loss (tEuros) Period ended December 2014 2013 Sales 575 112 Services rendered 570,275 575,886 Revenue from construction of concession assets 163,186 187,464 Gains/(losses) from associates and joint ventures 421 -361 Operating grants 10 - Other operating income 21,
Slide 29: Consolidated Statements: Cash Flow
Consolidated Statements: Cash Flow (tEuros) Period ended December 2014 2013 Cash flow from operating activities: Cash receipts from customers(a) 2,459,521 2,056,635 Cash paid to suppliers(a) (1,841,765) (1,391,110) Cash paid to employees (62,993) (63,160) Income tax received/paid (98,159) (8,510) Ot
Slide 30: Disclaimer
Disclaimer This presentation and all materials, documents and information used therein or distributed to investors in the context of this presentation do not constitute, or form part of, a public offer, private placement or solicitation of any kind by REN, or by any of REN’s shareholders, to sell or
Slide 31: Visit our web site at www.ren.pt or contact us
Visit our web site at www.ren.pt or contact us: Ana Fernandes – Head of IR Alexandra Martins Telma Mendes Av. EUA, 55 1749-061 Lisboa Telephone: +351 210 013 546 ir@ren.pt 31
Slide 32: | SILVER | GOLD
| SILVER | GOLD Gnkomesieeren
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