TAURON Polska Energia S.A. · GPW:TPE
TAURON Polska Energia — FY2014 Earnings Presentation
36 slides from TAURON Polska Energia's earnings presentation, Mar 12, 2015
Slide 1: TAURON Group's 2014 financial results
TAURON Group’s 2014 financial results March 12, 2015
Slide 2: 2014 key financial parameters
2014 key financial parameters TAURON Group’s 2014 financial results [PLN m] 2014 Sales revenue 18 441 (-3.6% yoy) EBITDA 3 627 (-0.9% yoy) Net profit* 1 181 (-9.7% yoy) CAPEX 3 090 (-18.3% yoy) Net debt/EBITDA 1.85x (up 0.42 yoy) Key segments’ 2014 results [PLN m] Distribution Supply Heat Generation
Slide 3: Q4 2014 key financial parameters
Q4 2014 key financial parameters TAURON Group’s Q4 2014 financial results [PLN m] Q4 2014 Sales revenue 4 838 (-1.6% yoy) EBITDA 712 (7.7% yoy) Net profit* 132 (43.6% yoy) CAPEX 1 079 (-23.5% yoy) Net debt/EBITDA 1.85x (up 0.42 yoy) Key segments’ Q4 results [PLN m] Distribution Supply Heat Generatio
Slide 4: Highlights - TAURON
Highlights - TAURON Date Signature of agreement with Polskie Inwestycje Rozwojowe (PIR) on financing the construction of a CCGT unit at Łagisza March 20 Power Plant. PIR’s maximum contribution to the project: PLN 750m Signature of agreement with PSE (TSO) for the provision of the cold intervention r
Slide 5: Highlights - market
Highlights - market Date Introduction by PSE (TSO) of the operational capacity reserve mechanism for 2014-2015. PSE’s (TSO) 2014 budget for this January 1 service is set at approx. PLN 400m Implementation of backloading – EU’s plan to temporarily reduce the number of free CO2 emission allowances (EU
Slide 6: Macroeconomic and market situation
Macroeconomic and market situation Poland’s GDP growth rate* and manufacturing PMI Increase of manufacturing production sold and (quarterly average) electricity consumption (yoy change)* 5% 56 8% 55 4% 54 6% 53 4% 3% 52 51 2% 2% 50 49 0% 1% 48 -2% 47 0% 46 -4% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
Slide 7: 2014 key operating data
2014 key operating data Hard coal production and sales [tons m] Electricity [TWh] and heat [PJ] generation TWh PJ Mg m 5.48 19.39 20 16 4.88 18 1.38 5,0 14 29.7% 15.37 1.81 16 -24.9% 1.36 1.79 12 4,0 14 12 10 3,0 10 8 5.45 5.40 15.62 18.01 8 13.41 2,0 6 3.67 13.58 3.52 6 4 -4.1% -0.9% 4 -14.1% 1,0 -
Slide 8: Q4 2014 key operating data
Q4 2014 key operating data Hard coal production and sales [tons m] Electricity [TWh] and heat [PJ] generation Mg m TWh PJ 1,5 6 6 1.35 5.11 1.20 5 0.47 5 0.36 0.0% 4.11 1,0 0.41 4 4 -12.2% 0.47 1.41 3 3 1.19 .5,03 4.64 4.64 0,5 0.99 2 2 0.79 3.64 1 1 25.3% 18.5% -21.6% -7.8% 0,0 0 0 Q4 2013 Q4 2014
Slide 9: 2014 key financial data
2014 key financial data Sales revenue [PLN m] Net profit [PLN m] 19 131 18 441 1 600 20 000 1 346 1 400 2 281 -7.0% 1 186 2 121 1 200 15 000 5 702 1 000 5 817 2.0% 800 10 000 600 11 148 400 5 000 10 503 -11.9% 200 -5.8% 0 0 I-III 2013 kw. 2013 2014 I-III kw. 2014 2013 2014 electricity distribution a
Slide 10: Q4 2014 key financial data
Q4 2014 key financial data Sales revenue [PLN m] Net profit [PLN m] 6 000 133 140 4 917 4 838 5 000 120 583 4.6% 610 4 000 100 1 536 82 1 490 80 3 000 -3.0% 60 2 000 40 2 799 2 738 1 000 -2.2% 62.2% 20 0 0 IVQ4 kw.2013 2013 IVQ4 kw.2014 2014 Q4 2013 Q4 2014 electricity distribution and commercial se
Slide 11: 2014 EBITDA
2014 EBITDA -0.9% PLN m EBIT Depreciation Segmenyt's growth Segment's decline EBITDA margin 4 500 19.1% 8.2% 7.8% 64.1% 22.8% 35.5% 4.0% 13.8% 8.5% - 19.7% 4 000 45 73 3 661 223 5 3 627 39 -51 3 500 -291 1 727 -67 -9 1 797 3 000 2 500 2 000 1 500 1 934 1 830 1 000 500 0 2013 EBITDA Mining Generation
Slide 12: Q4 2014 EBITDA
Q4 2014 EBITDA PLN m +7.7% 1 200 EBIT Depreciation Segment's growth Segment's decline EBITDA margin 13.4% 4.6% 5.7% 58.1% 32.6% 24.5% 2.7% -1.6% -1.5% - 14.7% 1 000 56 140 800 712 661 -14 24 6 17 -128 -45 -4 429 600 440 400 200 283 221 0 Q4 2013 Mining Generation RES Heat Distribution Supply Custome
Slide 13: 2014 prime costs structure
2014 prime costs structure -3.9% 10 827 10 407 PLN m 100% 2% 1% Declining costs in 2014 are mainly due to: Variable costs 34% Variable costs 40% 90% 2 668 2 795 consumption of materials (lower fuel costs) 80% 25% 27% tangible fixed assets impairment charges 1 076 taxes and fees with respect to
Slide 14: Q4 2014 prime costs structure
Q4 2014 prime costs structure 2.0% 3 054 3 114 PLN m 100% 1% 2% Q4 2014 costs are higher by approx. 2% than the Q4 2013 costs Variable costs 36% Variable costs 44% due to: 90% 743 901 lower taxes and fees with respect to the costs of the CO2 provision 80% 24% higher costs of: 29% external serv
Slide 15: Debt and financing
Debt and financing PLN m 3 500 3 076 3 500 3 000 3 153 3 000 2 500 Net debt/EBITDA=1.85x 2 500 2 000 1 990 2 000 1 500 1 500 1 000 378 1 000 716 500 605 177 25 25 27 25 25 500 158 240 240 189 182 161 100 100 100 - 150 - - I kw. Q2 Q1 II kw. III Q3kw. IV Q4kw. IQ1 kw. IIQ2 kw. IIIQ3 kw. IV Q4 kw. 201
Slide 16: CAPEX - key projects' work progress
CAPEX - key projects’ work progress Planned completion Investment project Capacity (MW e) Capacity (MW t) Work progress date Construction of the hard coal-fired unit at Jaworzno 910 - 9% 2019 III Power Plant Construction of the CCGT unit at Stalowa Wola Combined Heat and Power Plant 450 240 68% 2015
Slide 17: CAPEX – by segment
CAPEX – by segment Main investment projects completed in 2014: CAPEX by segment [PLN m] Mining – construction of the 800 m level and commissioning of the fourth coal face at the Janina coal mine (PLN 82m), 3 780 -18.3% construction of the Grzegorz shaft 3 090 including the infrastructure and adjac
Slide 18: OPEX reduction program
OPEX reduction program Savings realized Savings planned in Segment Perogress % Main initiatives in 2013-2014 2013-2015 Implementation of the ultimate business model, elimination of the redundant functions Change of the way expenses are classified as CAPEX or OPEX Distribution PLN 292m PLN 416m 7
Slide 19: Outlook for 2015
Outlook for 2015 PLUS MINUS higher RAB by approx. PLN 700m higher average distribution service price by 3.73% stable volume of electricity distributed lower return on capital by 5% Distribution continuation of efficiency improvement WACC’s drop by 0.1 pp programs further improvement of
Slide 20: Thank you – Q&A
Thank you – Q&A Investor Relations Office Marcin Lauer marcin.lauer@tauron-pe.pl tel. + 48 32 774 27 06 Paweł Gaworzyński pawel.gaworzynski@tauron-pe.pl tel. + 48 32 774 25 34 Magdalena Wilczek magdalena.wilczek@tauron-pe.pl tel. + 48 32 774 25 38 20
Slide 21: Legal disclaimer
Legal disclaimer This presentation serves for information purposes only and should not be treated as investment-related advice. This presentation has been prepared by TAURON Polska Energia S.A. (“the Company”). Neither the Company nor any of its subsidiaries shall be held accountable for any damage
Slide 22: Mining
Mining 2014 financial data [PLN m] 2014 EBIT bridge [PLN m] 1 500 1 398 100 1 194 66 1 200 50 900 14 0 600 110 -7 300 166 -50 66 98 0 -100 -146 -7 -300 -51 -150 2013 2014 2013 Hard coal sales Hard coal sales Own cost of hard coal Other factors 2014 volume prices sold Sales revenue EBITDA EBIT Q4 201
Slide 23: Generation (conventional sources)
Generation (conventional sources) 2014 financial data [PLN m] 2014 EBIT bridge [PLN m] 0 +58,8% 5 000 4 574 -100 4 000 397 3 218 239 -200 -21 3 000 -189 -300 2 000 29 7 -400 1 000 -180 252 -500 -459 29 0 -600 -201 -189 2013 Odpisy Cena Wolumen Jednostkowy Marża na Koszty CO2 Pozostałe 2014 -459 Fixe
Slide 24: Renewable Energy Sources (RES)
Renewable Energy Sources (RES) 2014 financial data [PLN m] EBIT bridge 2014 [PLN m] 300 281 +10.8% 250 200 204 35 200 180 160 -8 21 25 1 150 136 120 - 35 1 103 103 93 93 - 31 100 80 50 40 0 0 2013 Wolumen Hydroelectric Wolumen Wind farms Wolumen Wind Hydroelectric Wolumen farms Cena Property Cena El
Slide 25: Heat
Heat 2014 financial data [PLN m] 2014 EBIT [PLN m] +43.4% 1 600 1 400 1 338 1 355 200 39 11 21 1 200 11 8 159 160 - 13 1 000 33 - 25 - 37 800 120 111 600 80 400 308 235 40 159 200 111 0 0 2013 Odpisand Red akt. yellow PM TAMEH TAMEH Wolumen Heat supply Wolumen Electricity Cena sprzedaży Cena Electri
Slide 26: Distribution
Distribution 2014 financial data [PLN m] 2014 EBIT bridge [PLN m] 7 000 5 997 6 075 -6.7% 6 000 1 800 1 600 189 5 000 87 1 400 1 296 4 000 -227 60 1 209 1 200 -39 -117 -3 3 000 1 000 -36 2 208 2 157 2 000 800 1 296 1 209 600 1 000 400 0 200 2013 2014 0 Sales revenue EBITDA EBIT 2013 Distribution Bal
Slide 27: Distribution – volumes
Distribution – volumes 2013 electricity distribution [GWh] 2014 electricity distribution [GWh] 9 931 9 664 13 626 13 820 Group A Group A Group B Group B 45 195 Group C2 4 111 45 630 Group C2 4 150 Group C1+R+D Group C1+R+D Group G 2 700 Group G 2 638 14 850 15 335 Q4 2013 electricity distribution [G
Slide 28: Supply
Supply 2014 financial data [PLN m] 2014 EBIT [PLN m] -32.7% 20 000 1 000 18 018 18 000 78 900 865 16 000 15 277 800 14 000 -55 700 -128 12 000 -57 7 582 600 10 000 500 -126 8 000 400 6 000 300 4 000 200 2 000 899 865 608 582 100 0 0 2013 2014 2013 Retail electricity Electricity prices Price of the g
Slide 29: Supply – volumes
Supply – volumes 2013 electricity supply* [GWh] 2014 electricity supply* [GWh] 5 120 4 223 GroupA A Grupa 9 820 8 912 Grupa A Group A Grupa GroupB B Grupa GroupBB 9 484 GroupC2+C1+R+D Grupa C2+C1+R+D 9 809 40 999 Grupa C2+C1+R+D Group C2+C1+R+D 38 266 Group Grupa GG Grupa G Group G Other supply** Sp
Slide 30: Customer Service
Customer Service 2014 financial data [PLN m] 2014 EBIT bridge [PLN m] +51.9% 610 600 160 49 493 140 500 120 400 53 100 300 80 200 60 16 10 41 40 27 100 84 45 41 20 -114 27 0 0 2013 Customer Service Accounting Shared IT Shared Services Costs of services Other factors 2014 2013 2014 Shared Services Se
Slide 31: Electricity market price trends
Electricity market price trends Electricity 2014 2015 (until 26.02.2015) 2015/2014 (until 26.02.2015) Platforms: TGE, TFS, GFI, GPW- POEE Price PLN/MWh Volume GWh Price PLN/MWh Volume GWh Price % Volume % Forward BASE (Y+Q+M) 161.10 189 112 168.60 173 174 +4.7% -8.4% Forward PEAK (Y+Q+M) 184.60 19 1
Slide 32: 2015 BASE contracts
2015 BASE contracts PLN/MWh Volume Price Average Average price Volume [PLN/MWh] [GWh] Total 168.11 146 932 TGE 168.16 109 877 including non TGE 167.96 37 055 Average electricity price that takes into account 2015 one year BASE and PEAK contracts: PLN 172.64/MWh, total 2015 BASE and PEAK volume: 161
Slide 33: 2016 BASE contracts
2016 BASE contracts PLN/MWh Volume Price Average Average price Volume [PLN/MWh] [GWh] Total 175.54 42 743 TGE 175.73 29 075 including non TGE 175.15 13 668 Average electricity price that takes into account 2016 one year BASE and PEAK contracts: PLN 177.87/MWh, total 2016 BASE and PEAK volume: 44 675
Slide 34: 2017 BASE contracts
2017 BASE contracts PLN/MWh Volume Price Average Average price Volume [PLN/MWh] [GWh] Total 179.39 2 024 TGE 177.97 578 Including non TGE 179.96 1 445 Average electricity price that takes into account 2017 one year BASE and PEAK contracts: PLN 179.39/MWh, total 2017 BASE and PEAK volume: 2 024 GWh 3
Slide 35: TAURON's coverage by analysts
TAURON's coverage by analysts Institution Analyst Institution Analyst DB Securities Tomasz Krukowski Ipopema Securities Piotr Zielonka Dom Maklerski mBanku Kamil Kliszcz Raiffeisen Centrobank Teresa Schinwald Dom Maklerski Banku Handlowego Piotr Dzięciołowski Renaissance Capital Vladimir Sklyar Dom
Slide 36: Thank you for your attention
THANK YOU FOR YOUR ATTENTION 36