Societatea Energetica Electrica S.a. · BVB:EL

Societatea Energetica Electrica — Institutional Investor Conference – Zürs 2020

54 slides from Societatea Energetica Electrica's conference presentation, April 2020

  1. Slide 1: Electrica Group Presentation

    Electrica Group Presentation Institutional Investor Conference – Zürs 2020 April, 2020

  2. Slide 2: Content

    Content 1 2019 Financial results  Key Group Information  Distribution Segment Overview  Supply Segment Overview 2 2020 Budgets 3 Group’s Strategy Implementation 4 Main Corporate Events 5 Appendices 2

  3. Slide 3: FY 2019 Financial results

    FY 2019 Financial results Curectrica

  4. Slide 4: Electrica is the most important national distribution operator and the electricity supplier

    Key Group Information Electrica is the most important national distribution operator and the electricity supplier with the largest client base Geographical Electricity supply (12M 2019) presence ~3.55 million % ~18.6% 9.2 TWh household clients market share energy supplied on retail (November) market

  5. Slide 5: Electrica Group is the only Romanian group listed on the BSE & LSE

    Key Group Information Electrica Group is the only Romanian group listed on the BSE & LSE and operates within distribution, supply & energy service segments Electrica Furnizare S.A. SDEE1) Transilvania Nord Electricity and natural gas Distribution Operator supply company HQ: Cluj-Napoca HQ: Bucharest

  6. Slide 6: Electrica is a Leading Player in Energy Distribution and Supply areas

    Key Group Information Electrica is a Leading Player in Energy Distribution and Supply areas Distribution Supply 13,2% Volumes 18.6% Volumes Distributed Supplied in in 2018 14,0% Electrica 2019 44.8 TWh distributors 45.3 TWh 39.4% 60,6% 12,2% 81.4% Electrica Furnizare Others SD Muntenia Nord SD Trans

  7. Slide 7: Summary Consolidated Financials

    Summary Consolidated Financials Key Group Information Revenues EBITDA Growth and Margin Performance (RON mn) EBITDA (RON mn) and EBITDA Margin (%) 6.280 17,40% 5.603 5.613 5.518 518 373 12,13% 11,44% 401 378 10,73% 5.762 960 5.117 5.230 5.235 681 718 601 2016 2017 2018 2019 2016 2017 2018 2019 Reven

  8. Slide 8: Consolidated EBITDA and net result evolution

    Consolidated EBITDA and net result evolution Key Group Information Comments The consolidated EBITDA variation compared to 2018 is RON +38 mn, being mostly the EBITDA (RON mn) net effect of:  The negative variation of the energy margin RON -14 mn, thereof: • RON +34.5 mn from the distribution segmen

  9. Slide 9: Dividend distribution

    Dividend distribution Key Group Information Distributed gross dividends (FY 2014 - 2019) (RON mn) Gross dividend per share (RON) and Dividend yield(1) (%) 291.6 6.9% 7,2% 7.3% 244.7 251.4 245.4 247.5 246,1 6.8% 5.2% 6.1% 0.8600 0.7217 0.7415 0.7237 0,7300 0,7248 2014 2015 2016 2017 2018 2019 2014 20

  10. Slide 10: Distribution highlights

    Distribution highlights Distribution segment overview Key figures 2019 Financial results EBITDA for the distribution segment increased by RON 74 mn (+13.9%), mainly due to: ▲ revenues: RON +3 mn (+0.1%), mainly the net effect of the distributed electricity revenues increase by RON 95.3 mn – from hig

  11. Slide 11: SDTN

    SDTN Distribution segment overview Financial results Key figures 2019 EBITDA is higher by RON 20 mn (+9.3%), mainly due to: ▲ distributed electricity revenues: +RON 29 mn (+4.7%), due to higher total quantity of distributed ~1.29 mn electricity (+1.8%), and to the positive evolution of the distribut

  12. Slide 12: SDTN (Cont’d)

    SDTN (Cont’d) Distribution segment overview Network losses cost Network losses Network losses (RON mn) (GWh) (%) 640 630 622 194 613 10,96% 10,75% 10,43% 10,34% 9,86% 9,86% 9,94%* 9,56% 163 166 136 Reg. Realized Reg. Realized Reg. Realized Reg. Realized 2016 2017 2018 2019 2016 2017 2018 2019 2016 2

  13. Slide 13: SDTS

    SDTS Distribution segment overview Key figures 2019 Financial results EBITDA is lower by RON 11 mn (-5.6%), due to: ▲ distributed electricity revenues: +RON 19.2 mn (+3%), mainly from the increase in the ~1.16 million quantity of electricity distributed on LV (+1.4%) and HV (+1.8%) and the positive

  14. Slide 14: SDTS (Cont’d)

    SDTS (Cont’d) Distribution segment overview Network losses cost Network losses Network losses (RON mn) (GWh) (%) 223 775 766 761 10,97% 200 10,74% 10,55% 703 10,19% 10,17% 10,08% 188 9,40%* 9,61% 163 Reg. Realized Reg. Realized Reg. Realized Reg. Realized 2016 2017 2018 2019 2016 2017 2018 2019 2016

  15. Slide 15: SDMN

    SDMN Distribution segment overview Financial results Key figures 2019 EBITDA increase of RON 34 mn, or 31% compared to 2018, mainly due to: ▲ distributed electricity revenues: +RON 46.5 mn (+7.7%), mainly from the increase in the ~1.31 million quantity of electricity distributed on LV (+2%) but most

  16. Slide 16: SDMN (Cont’d)

    SDMN (Cont’d) Distribution segment overview Network losses cost Network losses Network losses (RON mn) (GWh) (%) 249 932 240 901 880 230 802 11,42% 11,71% 201 11,31% 10,92%* 10,91% 10,03% 9,55% 9,16% Reg. Realized Reg. Realized Reg. Realized Reg. Realized 2016 2017 2018 2019 2016 2017 2018 2019 2016

  17. Slide 17: Electrica Serv

    Distribution segment overview Electrica Serv Revenues (RON mn) General overview 365 359 Electrica Serv, a wholly-owned subsidiary of ELSA, provides repair and other energy ancillary services to third parties and various services to the companies within the group (vehicles rental, building rental etc

  18. Slide 18: Supply market

    Supply market Supply segment overview Overall Market Share - 11 months 2019 Key Facts Electrica Furnizare; 18,60% The supply market consists of regulated and competitive segments: Others (<4% each); 25,29% • The regulated segment comprises 5 bound suppliers of last resort (SoLR), integrated within t

  19. Slide 19: Supply segment

    Supply segment Supply segment overview Coverage Key figures (2019) Financial results EBITDA increased by RON 2 mn recording a relatively ~3.55 mn Electrica Furnizare constant trend compared to 2018. consumers Competitive Market The net profit is decreasing by RON 3.7 mn in 2019 % 18.60% compared to

  20. Slide 20: Supply – key aspects

    Supply segment overview Supply – key aspects Volume of Electricity Supplied on Retail Market Number of consumption places (‘000’s) (TWh) Regulated Competitive Regulated Competitive 10.6 3,600 3,577 3,541 3,553 9.2 9.2 250 215 253 269 8.5 5,4 4,2 3,6 4,4 3.350 3.362 3.288 3.284 5,2 5,0 4,9 4.9 2016 2

  21. Slide 21: 2020 Budgets

    2020 Budgets Curectrica

  22. Slide 22: 2020 Budget vs Actual 2019 – SDTN

    2020 Budget vs Actual 2019 – SDTN 2020 Budgets B2020 vs. B2020 vs. RON mn A2019 B2020 The most significant variations as compared with 2019, refer to: A2019 [Abs.] A2019 [%] Revenues from distributed energy 605.0 635.4 30.5 5.0%  Revenues from distributed energy - positive variation of RON 30.5 mn,

  23. Slide 23: 2020 Budget vs Actual 2019 – SDTS

    2020 Budget vs Actual 2019 – SDTS 2020 Budgets B2020 vs. B2020 vs. RON mn A2019 B2020 The most significant variations as compared with 2019, refer to: A2019 [Abs.] A2019 [%] Revenues from distributed energy 616.4 628.9 12.5 2.0%  Revenues from distributed energy - positive variation of RON 12.5 mn,

  24. Slide 24: 2020 Budget vs Actual 2019 – SDMN

    2020 Budget vs Actual 2019 – SDMN 2020 Budgets The most significant variations as compared with 2019, refer to: B2020 vs. B2020 vs. RON mn A2019 B2020 A2019 [Abs.] A2019 [%]  Revenues from distributed energy - positive variation of RON 53.4 mn, Revenues from distributed energy 603.6 657.0 53.4 8.9%

  25. Slide 25: 2020 Consolidated budget – Supply segment

    2020 Budgets 2020 Consolidated budget – Supply segment Assumptions - Regulated • The sales forecasts for the regulated segment were established based on the consumption history for the clients in the portfolio; market • The regulated tariffs applicable to the customers supplied under the regulated s

  26. Slide 26: 2020 Budget vs. Actual 2019 – Electrica Furnizare

    2020 Budget vs. Actual 2019 – Electrica Furnizare 2020 Budgets Operating margin Budget B2020 vs. B2020 vs. - Compared to the actual values of 2019, the planned operating margin increases by RON RON mn Actual 2019 229.9 mn, as a result of the RON 225.7 increase in the electricity, gas, green certific

  27. Slide 27: Group’s Strategy Implementation

    3 Group’s Strategy Implementation 27

  28. Slide 28: Strategic objectives and initiatives of the Electrica Group for the period 2019-2023

    Group’s Strategy Implementation Strategic objectives and initiatives of the Electrica Group for the period 2019-2023 Strategic objectives 1 2 3 4 Expand into adjacent Improve operational Increase performance domains and obtain performance to Continue investments to and enhance the synergies with the

  29. Slide 29: Strategy Implementation for the Distribution Business Segment (2019-2020)

    Group’s Strategy Implementation Electrica Group Strategy Implementation for the Distribution Business Segment (2019-2020) • EU funds of ~ 270mn RON were accessed DSOs Integration Project for MDM, AAM and SMI; • By 2023, over 500,000 network users will Robot Process be integrated into SMI, through in

  30. Slide 30: Strategy Implementation for the Supply Business Segment (2019-2020)

    Group’s Strategy Implementation Electrica Group Strategy Implementation for the Supply Business Segment (2019-2020) Supply Area Transformation Project New Products Complex transformation project targeting the entire organization, with focus on the optimization of the New products and services were s

  31. Slide 31: Strategy Implementation for the Energy Services Business Segment (2019-2020)

    Group’s Strategy Implementation Electrica Group Strategy Implementation for the Energy Services Business Segment (2019-2020) Services Companies New Products Integration For business clients, FISE Electrica As part of the development strategy of Serv implements the solutions the services segment, the

  32. Slide 32: Main Corporate Events

    Main Corporate Events Curectrica

  33. Slide 33: Main corporate events in T4 2019 and up to date

    Main corporate events in T4 2019 and up to date Main Corporate Events Electrica’s General Meetings of Shareholders:  OGMS dated 14 November 2019: • The shareholders approved the filing of a civil action in court underscoring the liability of the persons who have held the positions of directors and

  34. Slide 34: Other relevant events in T4 2019 and up to date

    Other relevant events in T4 2019 and up to date Main Corporate Events Important decisions of the BoD: • 10 December 2019 - Mr. Niculae Havrilet, member of ELSA’s BoD, has renounced holding this position, following his appointment as State Secretary in Ministry of Economy, Energy and Business Environ

  35. Slide 35: Regulation events in 2019 and up to now

    Regulation events in 2019 and up to now Main Corporate Events Distribution tariffs are approved annually, at the end Between 1-15 January 2020, the distribution tariffs of a specific year for the next one, while the computed with contribution to ANRE of 2% of regulated supply tariffs are approved se

  36. Slide 36: Appendices

    Appendices Curectrica

  37. Slide 37: Background and basis of preparation for the financials

    Background and basis of preparation for the financials  Historical consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as endorsed by the European Union (IFRS-EU). Background  The presentation and functional currency is Romanian Leu (

  38. Slide 38: Important Regulatory Changes – Distribution Activity

    Important Regulatory Changes – Distribution Activity  Regulations on Distribution tariffs for RP4  The methodology for setting distribution tariffs for RP4 was approved by ANRE Order no.169/2018, amended by ANRE Orders no. 193 / 2018, no. 60/ 2019 and no.203/2019;  RRR was approved by ANRE Order

  39. Slide 39: Important regulatory events – Energy Distribution area

    Important regulatory events – Energy Distribution area  Implementation calendar for smart metering (SM) at national level for the period 2019-2028  ANRE approved Decision no.778/8 May 2019 for the approval of the SM Implementation Calendar at national level for the period 2019-2028;  Methodology

  40. Slide 40: Changes in Distribution Regulation - RP4

    Changes in Distribution Regulation - RP4 Regulated Revenue and tariff calculation 1 2 3 4 5 6 7 8 7 Regulated Revenue Reactive en. Regulated Contr. Non- Tariff NL Cost Depreciation RRR2 & 95% profit Revenue OPEX1 controllable other activ. 9 Forecasted Volume OPEX 1 5  The starting point is approved

  41. Slide 41: Changes in Distribution Regulation

    Changes in Distribution Regulation Methodology for determining distribution tariffs - Summary RP4 vs RP3 RP3 RP4 1 RRR = 5.66% applied to RAB, to which a supplement of 1% is added for Return RRR (7.7%) applied to RAB. RRRxRAB new network investments. RRR (between 29 March 2019 and 30 April 2020) = 6

  42. Slide 42: Methodology for determining distribution tariffs – Comparative elements RP4 vs RP3

    Changes in Distribution Regulation Methodology for determining distribution tariffs – Comparative elements RP4 vs RP3 RAB & Investment RP3 methodology RP4 methodology 1. RAB includes: assets used for the distribution service, which are recorded into the DSOs accounts as tangible assets and are physi

  43. Slide 43: Methodology for determining distribution tariffs – Comparative elements RP4 vs RP3

    Changes in Distribution Regulation Methodology for determining distribution tariffs – Comparative elements RP4 vs RP3 Opex & NL RP3 methodology RP4 methodology Controlable OPEX 1. OpexC 2019 is established based on formula (approved 1. OpexC 2019 is not established based on formula, but by comparati

  44. Slide 44: Important Regulatory Changes – Supply Activity – impact in 2019

    Important Regulatory Changes – Supply Activity – impact in 2019 GEO no. 114/2018 concerning measures in the area of public investment and fiscal-budgetary measures, amended by GEO no.19/2019: Primary  The monetary contribution charged from the energy license holders equals 2% of the turnover achiev

  45. Slide 45: Important Regulatory Changes – Supply Activity – impact in 2020

    Important Regulatory Changes – Supply Activity – impact in 2020 GEO no. 1/2020 regarding some fiscal-budgetary measures and for the amendment and completion of some normative acts (including GEO no. 114/2018):  Until 31 December 2020, for household consumers the electricity supply is carried out un

  46. Slide 46: Corporate Governance Bodies

    Corporate Governance Bodies  Mr. Valentin Radu – Chair  Mr. Dragos Andrei Board of Directors  Mr. Radu Florescu Current Composition  Mr. Gicu Iorga  Mr. Bogdan George Iliescu  Ms. Ramona Ungur  All board members are non-executive, elected in accordance with the Articles of Association, and fo

  47. Slide 47: Shareholder Structure at 31 December 2019

    Shareholder Structure at 31 December 2019 Geographical distribution of shareholders outside Romania Total number of shares: 47,266,331 * Dedeman SRL, NN Group NV and Allianz-Tiriac Pensii Private owns between 5% and 10% of the total number of voting rights Total number of shares: 346,443,597 47

  48. Slide 48: Monthly volume and average price of Electrica’s shares and GDRs

    Monthly volume and average price of Electrica’s shares and GDRs 10.000.000 13,00 9.000.000 12,50 8.000.000 12,00 7.000.000 11,50 6.000.000 11,00 5.000.000 10,50 4.000.000 10,00 3.000.000 9,50 2.000.000 9,00 1.000.000 8,50 - 8,00 BSE - Shares - Monthly volume LSE - GDRs - Monthly volume BSE - Shares

  49. Slide 49: Comparative evolution with BSE indices (January 2019 – 28 February 2020)

    Comparative evolution with BSE indices (January 2019 – 28 February 2020) % 150,00 140,00 130,00 120,00 110,00 100,00 90,00 EL (BSE) Performance BET Performance BET-FI Performance BET-NG Performance BET-XT Performance ELSA (LSE) Performance Source: Company data, BSE 49

  50. Slide 50: Electrica closing price vs BET-TR (January 2019 – 28 February 2020)

    Electrica closing price vs BET-TR (January 2019 – 28 February 2020) 50,00 40,00 EL: 10.6% BET-TR: 34.3% 30,00 20,00 10,00 0,00 -10,00 BET-TR Electrica adjusted price with dividends Source: Company data; BSE 50

  51. Slide 51: Glossary

    Glossary ANRE Romanian Energy Regulatory Authority LV Low Voltage BoD Board of Directors MV Medium Voltage BSE Bucharest Stock Exchange MWh MegaWatt hour CAPEX Capital Expenditure NBV Net Book Value NL Network Losses DAM Day Ahead Market OGMS Ordinary General Meeting of Shareholders DSO Distribution

  52. Slide 52: 2020 Financial Calendar

    2020 Financial Calendar  28 February Publication of the 2019 annual consolidated and individual preliminary results  10 March Investor and analyst teleconference for 2019 consolidated financial results  29 April General Meeting of Shareholders for the approval of the 2019 annual financial results

  53. Slide 53: Investor Relations & Disclaimer

    Investor Relations & Disclaimer • Email: ir@electrica.ro • Web: https://www.electrica.ro/en/investors/ Investor Relations • Tel: +40 (0)21.208.50.35 • Address: 9 Grigore Alexandrescu Str., 1st District, Bucharest, 010621 This document was prepared by Electrica for the presentation of FY 2019 financi

  54. Slide 54: Q&A

    Q&A 54

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