Slide 1: 1Q08 Results
1Q08 Results May 9th, 2008 0
Slide 2: 1Q08: Highlights of the period
1Q08: Highlights of the period EBITDA: +15% growth YoY driven by wind power Generation & supply Iberia: Stable performance in a cost rising environment Wind power: Major growth driver, already 15% of EBITDA Regulated Energy Networks Iberia: Higher efficiency compensates demand slowdown Brazil: Gener
Slide 3: 1Q08 EBITDA Breakdown
1Q08 EBITDA Breakdown EBITDA Breakdown (€ million) EBITDA breakdown 1Q07 1Q08 % Chg. ∆ 27% Brazil Generation & Supply Iberia 303 312 +3% +9 Regulated 19% Networks Wind 55 126 +128% +70 Liberalized Iberia Gas Iberia Regulated Networks Iberia 211 228 +8% +17 2% Brazil 159 161 +1% +2 Liberalized Gas Ib
Slide 4: 1Q08 Financial Headlines
1Q08 Financial Headlines Profitability improvement: Net profit 9% YoY growth to €263m (€ million) 1Q07 1Q08 % Change Gross Profit 1,142 1,258 +10% Operating Costs 437 450 +3% EBITDA 705 809 +15% EBIT 461 542 +17% Net Financial Costs (86) (184) +114% Net Profit 241 263 +9% Capex 210 607 +189% Net Deb
Slide 5: 1Q08: Highlights in Generation & Supply Iberia
1Q08: Highlights in Generation & Supply Iberia EBITDA growth of +3% or +€9m YoY to €312m LT Contracted Generation PPA/CMEC: €226m EBITDA, stable with no market exposure Liberalized generation: 50% rise YoY of generation costs: fuels, CO2 and mix Liberalised generation output: +8.8% YoY, penalized by
Slide 6: LT Contracted Generation (28% of EBITDA)
LT Contracted Generation (28% of EBITDA) Recurrent EBITDA grew by 1.6% YoY Evolution of LT Contracted Generation EBITDA (€ million) 13.1% 1.6% 16 7 226 200 207 210 EBITDA Trading EBITDA EBITDA Trading EBITDA 1Q07 losses in fuel 1Q07 1Q08 gains in fuel 1Q08 Recurrent Recurrent and lower availability
Slide 7: Liberalized Generation & Supply Iberia: Market Environment
Liberalized Generation & Supply Iberia: Market Environment Fuel Price Evolution Weighted Average Baseload Price in Spot Market (OMEL) (€/MWh) 120 122 70,9 95,9 75 90 69,1 Coal API2 ARA (USD/ton) 65,9 60 37,2 58,5 50 21,5 Brent (USD/ton) 30 1,7 25 0 CO2 (€/ton) 1Q07 1Q08 Jan Mar May Jul Sep Nov Jan M
Slide 8: Liberalised Generation Iberia (10% of EBITDA)
Liberalised Generation Iberia (10% of EBITDA) Generation Output and Costs (TWh) 8.8% Liberalised Generation Output 4.8 5.3 0.3 0.3 0.5 Iberian Market: +5% 0.3 • EDP: +8.8% 1.4 2.9 Coal Plants Load Factor: Hydro • Iberian Market: 62% Nuclear • EDP: 56%* CCGT 2.6 1.8 Coal CCGT Plants Load Factor • Ibe
Slide 9: Liberalised Generation & Supply Iberia: Adequate contracting strategies
Liberalised Generation & Supply Iberia : Adequate contracting strategies Sales to clients as a % of generation output EDP's generation/supply hedging policy: Significant part of fuel procurement costs and selling prices to clients fixed between 73% 6 and 18 months ahead 56% 61% limiting exposure to
Slide 10: Prospects for the remaining 2008
Prospects for the remaining 2008 Fuel Cost Performance Electricity Prices Iberia 2008: Spot & Forward 80 €/MWh 150 130.9 122 Coal API2 ARA 120 75 71 (USD/ton) 90 109.7 95.9 70 66 60 Brent 63 65 (USD/ton) 63 61 62 30 65 63 60 60 21.5 24.2 0 CO2 (€/ton) 55 1Q08 (avg.) 01-Apr-08 1Q08 2Q08 Apr-08 3Q08 4
Slide 11: Liberalized Generation & Supply: Forward Contracting for 2008
Liberaliz. Liberaliz. Generation & Supply: Forward Contracting for 2008 Expected Output 2008 Electricity Sales (TWh;weight %) (TWh;weight %) For the 24% Not Contracted: Hydro 3% Nuclear 24% • Bidding in the market internalizing 6% Not higher fuel costs Contracted • Capacity to play short term volati
Slide 12: Capex CCGTs Iberia: Doubling Capacity in 2 years
Capex CCGTs Iberia: Doubling Capacity in 2 years competitive turbines procurement (well timed) and gas (Sonatrach (Sonatrach) Sonatrach) EDP’s CCGT Installed Capacity (MW) Gas Procurement LT Contracts (Bcm/year) Spain 1,698 3,261 Portugal 4.8 836 1,223 3.2 1,563 862 387 2,038 1,176 Dec-07 - 2007 201
Slide 13: Capex Hydro Portugal: 25% increase of hydro capacity in Iberia until 2013
Capex Hydro Portugal: 25% increase of hydro capacity in Iberia until 2013 EDP’s Investment Plans in Hydro (MW) Hydro Start MW Capex Type Status Plants Date Picote II 246 135 2011/12 Repowering Under construction 25% Construction to start in 1,237 Bemposta II 191 130 2011/12 Repowering 2Q08 5,005 Rib
Slide 14: 1Q08: Highlights in Wind Power
1Q08: Highlights in Wind Power EBITDA growth of +128% or +€70m YoY to €126m Installed capacity: +152% or +1,869MW over the last 12 months to 3,097 MW Output +161% YoY; load factors: 31% in Europe, 38% in USA - premium quality assets Average selling price in Spain: +37% to €97.6/MWh; Adequate exposur
Slide 15: Wind Power (15% of EBITDA)
Wind Power (15% of EBITDA) Installed Wind Capacity (EBITDA) Wind Power Output MW GWh 152% 161% 3,097 2,032 1,229 778 1Q07 1Q08 1Q07 1Q08 EBITDA growth supported on: Wind Average Tariffs EBITDA (€/MWh) € million (1) increase of installed capacity; (2) high load factors; 128% 26% (3) increase of pool
Slide 16: Wind Power: EBITDA Breakdown
Wind Power: EBITDA Breakdown EBITDA € million 35.4 3.9 EBITDA Break-down: 125.6 Europe: 72%/ USA 28% 86.3 Iberia Rest of Europe USA EBITDA 1Q08 Total EBITDA margin above 80%: EBITDA 86% 87% 77% 81% Maintenance of high efficiency Margin in a strong growth phase 15
Slide 17: Capex Wind: On track to build an average of 1.4 GW/year
Capex Wind: On track to build an average of 1.4 GW/year Installed capacity in construction vs. Installed targets Capex breakdown 1Q08 MW € million 222 505 370 1,400 87% 59 1,217 annual average 585 target 148 67 1Q08 Iberian Rest of USA Total under Annual Europe USA Total Additions Peninsula Europe c
Slide 18: Capex Wind: Pipeline of projects under development
Capex Wind: Pipeline of projects under development Pipeline 1Q08 Gross Installed Under Prospects Total(1) MW Capacity Construction Tier 1 Tier 2 Tier 3 TOTAL Iberian Peninsula 2,063 585 1,209 621 1,930 3,760 2,732 9,140 Rest of Europe 87 59 244 572 376 1,192 586 1,924 (2) USA 1,556 505 627 2,813 7,8
Slide 19: Capex Wind: Turbine needs contracted for 2009, 70% for 2010
Capex Wind: Turbine needs contracted for 2009, 70% for 2010 Turbines needs vs. contracted 2008-2010 EDP Renewables Turbines Portfolio (%) (%) 6% 6% 100% 100% 70% 31% 4% 3% 3% 47% 2008 2009 2010 Vestas Gamesa GE Other Contracted To be contracted Ecotecnia Enercon Siemens Diversification of technologi
Slide 20: 1Q08: Highlights in Energy Regulated Networks Iberia
1Q08: Highlights in Energy Regulated Networks Iberia EBITDA growth of +8% or +€17m YoY to €228m Energy demand flat YoY in 1Q08 (recovery in Apr-08); no material impact on financials Decline of operating Costs: - 0.8% or -€2m YoY; Continued efficiency improvement Accumulated tariff deficits in Portug
Slide 21: Regulated Energy Networks Iberia (27% of EBITDA)
Regulated Energy Networks Iberia (27% of EBITDA) EBITDA growth supported on stable regulation and efficiency improvement EBITDA Breakdown 1Q08 Regulated Energy Networks EBITDA Breakdown Gas Distribution (€ million) Electricity Distribution Portugal 1Q07 1Q08 Chg. ∆ Spain 9% 6% Gas Distribution Elect
Slide 22: 1Q08: Highlights in Brazil
1Q08: Highlights in Brazil EBITDA growth of +1% or +€2m YoY to €161m Lower non-recurrent revenues from tariff receivables: €69m in 1Q07 and €13m in 1Q08 Slight impact of regulatory revisions in distribution: Stable framework for next 4 years Efficiency improvement: Employees/TWh distributed decrease
Slide 23: Electricity Distribution in Brazil (57% of EBITDA Brazil)
Electricity Distribution in Brazil (57% of EBITDA Brazil) EBITDA Brazil Distribution (€ million) Tariffs Recovery and other non-recurrent Normalized EBITDA 126 End of the non-recurrent tariff recovery component 91 48 13 Normalized EBITDA flat YoY due to regulatory revisions; 78 78 Future growth: Dem
Slide 24: Generation in Brazil: (42% of EBITDA Brazil)
Generation in Brazil: (42% of EBITDA Brazil) Electricity Sold (GWh) +14% Installed Capacity (MW) 1,538 Generation EBITDA (€ million) 1,352 +2% 1Q07 1Q08 +95% 1,018 1,044 67 Average Selling Price (€/MWh) 34 1Q07 1Q08 1Q07 1Q08 +24% 46 37 1Q07 1Q08 Generation 1Q08 performance benefits from increase in
Slide 25: Capex Generation Brazil: 4,000 MW of projects under analysis
Capex Generation Brazil: 4,000 MW of projects under analysis Pecém Coal Plant contracted through PPA: no fuel or CO2 risk, to start operating in 2012 Operating/Contracted Capacity Ongoing Development Studies 500 350 1,000 1,439 581 360 180 1,044 29 2007 Mini-hydro 50% Pecém Pecém Coal Mini-hydro Lar
Slide 26: 1Q08 Financial Headlines
1Q08 Financial Headlines Profitability improvement: Net profit 9% YoY growth to €263m (€ million) 1Q07 1Q08 % Change Gross Profit 1,142 1,258 +10% Operating Costs 437 450 +3% EBITDA 705 809 +15% EBIT 461 542 +17% Net Financial Costs (86) (184) +114% Net Profit 241 263 +9% Capex 210 607 +189% Net Deb
Slide 27: EDP Consolidated Operating Costs
EDP Consolidated Operating Costs (€ million) • Growth of controllable 1Q07 1Q08 % Chg. operating costs ex-EDP Controllable Operating Costs: 323 348 7.7% Renováveis: +2.4% YoY; increase in generation capacity in Ex EDP Renováveis 312 320 2.4% Iberia. EDP Renováveis 11 28 1.5x • Growth of controllable
Slide 28: Efficiency Improvement: cost savings target for 2010 to be anticipated for 2008
Efficiency Improvement: cost savings target for 2010 to be anticipated for 2008 OPEX savings € million Measures taken in 2006 and 2007 Measures taken in 1Q08 Personnel costs: 150 10% above 137 2008 target 2010 Brazil 7 100% €56.8m cost savings already achieved by net 23 Iberia 16 headcount reduction
Slide 29: Consolidated Capex
Consolidated Capex 85% of capex allocated to regulated activities and long term contracted generation EDP Capex: 1Q07 vs. 1Q08 Capex Breakdown (€ million) 1Q07 1Q08 % Chg. Regulated Expansion 106 466 339% Networks Iberia Maintenance 104 141 36% 10% Total EDP 210 607 189% Wind Brazil Generation & Sup
Slide 30: Consolidated Net debt Maturity Mar-08
Consolidated Net debt Maturity Mar- Mar-08 Oct-07: US$2bn fixed rate bond issue (US$1bn 5-Year term + US$1bn 10-Year term) Apr-08: €925m revolving credit facility (5-Year term) EDP consolidated debt maturity profile 3.000 Other 2.700 EDP SA & EDP Finance BV 2.400 2.100 15% 14% 1.800 12% € million 1.
Slide 31: Financial Results
Financial Results • 28% increase in average net (€ million) 1Q07 1Q08 % Chg. debt 1Q08 vs. 1Q07: Driven by funding of expansion capex; Net financial interest (106) (169) 59% • Average cost of debt increase: Net foreign exchange differences 5 2 -58% +60bps, in line with credit markets; Other financia
Slide 32: Net Profit
Net Profit (€ million) 1Q07 1Q08 % Chg. • 1Q08 capital gains of €27m: EBIT (€m) 461 542 17% €4.8m from disposal of 40% in Edinfor; €17m from Financial Results (86) (184) 114% disposal to EDP pension fund Capital Gains 0 27 - of 1.5% stake in REN; balanced by Sonaecom Results from Associated Companie
Slide 33: Outlook 2008
Outlook 2008 Generation & Supply: High level of hedging should support stability of margin per MWh Wind power: 1,217 MW capacity already built in 1Q08 or currently under construction Capex focused in wind, CCGTs Iberia, hydro Portugal (concession extension + new plants) EDP Renováveis IPO process: T
Slide 34: edp - feel our energy
&) edp feel our energy