Societatea Energetica Electrica S.a. · BVB:EL
Societatea Energetica Electrica — Electrica — Q3 2022 Earnings Presentation
57 slides from Societatea Energetica Electrica's earnings presentation, Nov 17, 2022
Slide 1: Presentation of Q3/9M 2022 Financial Results
Presentation of Q3/9M 2022 Financial Results Bucharest, 17 November 2022 Public
Slide 2: Content
Content 1 9M 2022 Financial results ▪ Key Group Information ▪ Distribution Segment Overview o The impact of the electricity market evolution on the distribution segment ▪ External electricity network maintenance segment - Overview ▪ Supply Segment Overview o The impact of the electricity market evol
Slide 3: Summary Consolidated Financials
Summary Consolidated Financials Key Group Information Revenues EBITDA Growth and Margin Performance (RON mn.) EBITDA (RON mn.) and EBITDA Margin (%) 7,179 7,245 6,501 449 15% 582 1,20 0 18% 557 15% 16% 5,018 1,00 0 14% 430 800 9% 12% 10% 600 1,104 8% 6,597 6,796 6% 5,944 953 400 4% 4,587 200 475 2%
Slide 4: Consolidated EBITDA and net result evolution
Consolidated EBITDA and net result evolution Key Group Information Comments EBITDA (RON mn.) Consolidated EBITDA variation 9M 2022 vs. 9M 2021 is RON 629 mn., being mainly the cumulative effect of the following factors: ❑ The negative variation of the energy margin RON -106 mn., out of which: • RON
Slide 5: Distribution segment - highlights
Distribution segment - highlights Distribution segment overview Key figures 9M 2022 Financial results EBITDA increased by RON 263 mn., mainly as a result of the evolution of the indicators below: ~3.83 mil users* ▼ decrease in energy margin by RON -530 mn., as a net effect of: - ▲ increase in energy
Slide 6: Distribution segment – main aspects
Distribution segment overview Distribution segment – main aspects Relevant regulatory information: Distributed energy margin ➢ At the beginning of the current PR4 regulatory period, ANRE made a total negative correction of (RON mn.) closing the PR3 in the amount of RON (730) mn. (nominal terms), res
Slide 7: 9M Analysis of regulated net result
9M Analysis of regulated net result – net OMFP 1802/2014 result – net OMFP 2844/2016 result for the distribution segment 7 Public
Slide 8: RBAR-OMF analysis results distribution segment for 2022
RBAR-OMF analysis results distribution segment for 2022 8 Public
Slide 9: DEER - TN
DEER - TN Distribution segment overview Key figures 9M 2022 Network losses cost Network losses (RON mn.) (GWh) ~1.33 mn. users* 486 619 633 490 504 70,651 km 34,162 km2 voltage lines* coverage 296 area* 200 169 RAB: RON 2.0 bn (est.) 4.3 TWh (-2.3%) distributed energy 2020 9M 2021 2021 9M 2022 2020
Slide 10: DEER - TS
Distribution segment overview DEER - TS Key figures 9M 2022 Network losses Network losses cost (RON mn.) (GWh) ~1.18 mn. users* 398 693 692 354 58,586 km 34,072 km2 481 voltage lines* coverage area* 215 407 164 RAB: RON 1.8 bn (est.) 4.61 TWh (-5.5%) distributed energy 2020 9M 2021 2021 9M 2022 2020
Slide 11: DEER - MN
DEER - MN Distribution segment overview Key figures 9M 2022 Network losses cost Network losses (RON mn.) (GWh) ~1.32 mn. users* 789 795 500 413 71,845 km 28,962 km2 549 519 voltage lines* coverage area* 259 195 RAB: RON 2.1 bn (est.) 4.53 TWh (-1.7%) 2020 9M 2021 2021 9M 2022 2020 9M 2021 2021 9M 20
Slide 12: The financial impact of the electricity market evolution - distribution
The impact of the electricity market evolution on the distribution segment The financial impact of the electricity market perspectives evolution - distribution Evolution of the cost of electricity needed to cover NL Network losses ❑ During the 9 months ending on 30 September 2022, the cost of electr
Slide 13: Electrica Serv (SERV)
Energy services segment - overview Electrica Serv (SERV) General overview Revenues SERV provides repair and other energy-related services to third parties, as well as several (RON mn.) services to the companies within the group (vehicles rental, building rental etc.). Starting with 1 December 2020,
Slide 14: Supply segment – Electrica Furnizare
Supply segment – Electrica Furnizare Supply segment overview Key figures 9M 2022 Financial results EBITDA significantly increased by RON 344 mn. compared to 9M 2021, mainly following the evolution of the factors below: ~3.5 mn. ▲ the increase in revenues from the supply of energy and natural gas by
Slide 15: Supply market
Supply market Supply segment overview Overall Market Share – July 2022 General overview Electrica Furnizare The supply market comprises the competitive segment, universal service (US) as well as the 17.15% Others supplier of last resort (SoLR) segment. Before 1 January 2021 – market liberalization,
Slide 16: Supply - key aspects
Supply - key aspects Supply segment overview Volume of Electricity Supplied on Retail Market 9M 2022 (TWh) Number of consumption places at 30 September 2022 (ths) Competitive Universal Service SoLR Competitive Universal Service SoLR 9.29 9.41 3.6 3.5 3.5 3.5 0.3 0.3 6.94 4.23 6.39 4,4 4,2 1.6 1.6 1.
Slide 17: The financial impact of the electricity market evolution – supply (1/2)
The financial impact of the electricity market perspectives evolution – supply (1/2) ❑ Between January and September 2022, the gross margin realized is exceeding the budgeted target with RON +96 mn. Main factors: ❑ Higher selling price with 70 RON / MWh realized vs budgeted, which generated a positi
Slide 18: The financial impact of the electricity market evolution – supply (2/2)
The financial impact of the electricity market perspectives evolution – supply (2/2) Receivables’ analysis ❑ The total value of receivables balance increased by 43.3%, from RON 1,500 mn as of Dec. 2021 to RON 2,600 mn as of Sept. 2022. Total outstanding receivables increased with RON 139 mn vs. 2021
Slide 19: Group Liquidity
Group Liquidity Group liquidity Total liquidity (RON mn.) ❑ At Group level, the total liquidity available in cash and overdraft limits as of 30 September 2022 was RON 479 mn., which is lower than the level recorded at the end of previous year quarter, 30 September 2021. The level of cash on 30 Septe
Slide 20: Dividend distribution
Dividend distribution Dividends Distributed gross dividends (FY 2014 – 2021) (RON mn) Gross dividend per share (RON) and Dividend yield(1) (%) 291.6 6.9% 7.3% 6.9% 244.7 251.4 245.4 247.5 246.1 247.9 6.8% 5.2% 6.0% 6.1% 0.8600 5.2% 0.7217 0.7415 0.7237 0.7300 0.7248 0.7300 152.8 0.4500 2014 2015 201
Slide 21: Electrica Group – Corporate Strategic Objectives (updated April 2022)
Status of Group’s Strategy Implementation Electrica Group – Corporate Strategic Objectives (updated April 2022) OBJECTIVES Targets Initiatives/update • 10% higher overall stock yield during 2022-2026 Increase of liquidity with the scope of inclusion in the FTSE Market value growth of than the result
Slide 22: Sustainability is one of the Values of Electrica
Status of Group’s Strategy Implementation Sustainability is one of the Values of Electrica Next steps: In 2022 we published, for the 6th consecutive year, our Group Elaboration of a Group Sustainability Sustainability report, based on Strategy the GRI reporting Standard Continuing to collect interna
Slide 23: Main events in 9M 2022 and up to date (1/2)
Main events in 9M 2022 and up to date (1/2) Main Corporate Events ELSA’s General Meetings of Shareholders: ❑ ELSA’s EGMS on 21 March 2022: ▪ Approved the empowerment of Electrica representative to participate in Societatea Electrica Furnizare SA (EFSA) EGMS for the approval of a total ceiling of RON
Slide 24: Main events in 9M 2022 and up to date (2/2)
Main events in 9M 2022 and up to date (2/2) Main Corporate Events ▪ During the meeting on May 5, 2022, the Board of Directors of the Company (CA) decided to revoke Mrs. Georgeta-Corina Popescu from the position of General Manager, without cause, starting with 16 May 2022 and the appointment of Mr. C
Slide 25: Appendices
Curectrica Appendices Public 25
Slide 26: Group structure
Group structure Electrica Group is the only Romanian group listed on the BSE & LSE and operates within production distribution, supply & energy service segments Distributie Energie Electrica 99.99% 2) Electrica Furnizare S.A. 99.99%2) Romania S.A. Distribution Operator Electricity and natural gas HQ
Slide 27: Leading Player in Distribution and Supply
Leading Player in Distribution and Supply Distribution Supply Volumes Distributed in 2021 Volumes Supplied in 2021 Volumes Supplied in Jan-Jul 2022 13.2% DEER_MN 18.42% 17.15% DEER_TS Electrica Furnizare 12.7% DEER_TN Others 46.3 TWh 50.99 TWh 28.20 TWh Altii 60.1% 14.0% 81.58% 82.85% Electrica: 39.
Slide 28: Corporate Governance Bodies
Corporate Governance Bodies • Mr. Iulian Cristian Bosoanca – Chair • Mr. Gicu Iorga Board of Directors • Mr. Ion-Cosmin Petrescu Current • Mr. Adrian-Florin Lotrean Composition • Mr. Radu-Mircea Florescu • Mr. Dragos-Valentin Neacsu • Mr. George Cristodorescu • All board members are non-executive, e
Slide 29: Shareholder Structure at 30 September 2022
Shareholder Structure at 30 September 2022 Percent of share Shares with voting Shareholder Shares capital right Romanian State through the Ministry of Energy 169,046,299 48.7948% 49,7850% EBRD 17,355,272 5.0096% 5,1112% Electrica 6,890,593 1.9890% 0% Bank of New York Mellon - GDRs 2,494,507,216 0.71
Slide 30: Monthly volume and average price of Electrica’s shares and GDRs
Monthly volume and average price of Electrica’s shares and GDRs 3,500,000 12.00 3,008,775 3,000,000 11.00 2,500,000 10.00 2,252,989 2,000,000 1,787,193 9.00 1,495,713 1,471,084 1,500,000 8.00 943,533 1,000,000 797,172 822,771 785,761 7.00 732,200 6.77 642,990 6.56 6.20 500,000 6.00 5.82 147,144 0 25
Slide 31: Electrica’s adjusted closing price vs BET-TR
Electrica’s adjusted closing price vs BET-TR (1 January – 16 November 2022) 10.00 5.00 0.00 -5.00 -10.00 -15.00 EL: -19.62% BET-TR: -1.95% -20.00 -25.00 -30.00 -35.00 -40.00 BET-TR Electrica adjusted price with dividends Source: Company’s data, BSE 31 Public
Slide 32: Important Regulatory Changes – Distribution Activity (1/2)
Important Regulatory Changes – Distribution Activity (1/2) ❑ RP4 Regulations on Distribution tariffs • RRR: ANRE approved Order no. 75 of 6 May 2020, which established a regulated rate of return (RRR) for electricity and gas, distribution and transmission of 6.39% for the existing RAB, until the end
Slide 33: Important Regulatory Changes – Distribution Activity (2/2)
Important Regulatory Changes – Distribution Activity (2/2) ❑ GEO no. 153/2022 for the amendment and completion of GEO no. 27/2022 ✓ OPCOM single buyer during the period 1st of January 2023-31st of March 2025, through the centralized electricity purchase mechanism ✓ OD buys from OPCOM through an annu
Slide 34: 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 • The starting point is approved b
Slide 35: Changes in Distribution Regulation
Changes in Distribution Regulation Methodology for determining distribution tariffs - Summary RP4 vs RP3 RP3 RP4 1 RRR January 2019: 5.66% existing RAB & 1% incentive RP4 network invest.(acc. ANRE) Return RRR (7.7%) applied to RAB 29 March 2019–30 April 2020: 6.9% total RAB (acc. GEO 19/2019 & GEO 1
Slide 36: Changes in Distribution Regulation – RAB & Investment 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
Slide 37: Changes in Distribution Regulation – Opex & NL 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 formulae, but by comparat
Slide 38: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 Government Emergency Ordinance - GEO No. 118/2021, regarding the compensation scheme for electricity and gas consumption for the 2021-2022 codl season, approved with amendments via Law No. 259/2021 • The support scheme shall be applied for electrici
Slide 39: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 GEO no. 3/2022 (amendments to GEO no. 118/2021, enforced from 1st of February until 31st of March 2022) • increasing the consumption margin for granting compensation frok 300 kWh/month (+10%) to to 500 kWh/month (+10%) for electricity and from 200 c
Slide 40: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 GEO no. 27/2022 on the measures enforceable for the end consumers of the electricity and natural gas market from 1 April 2022 until 31 March 2023, amending and completing some energy-related legal acts • for electricity, the final billed price is: m
Slide 41: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 GEO no. 42/2022 amending GEO no. 27/2022 on the measures enforceable for the end consumers of the electricity and natural gas market from 1 April 2022 until 31 March 2023, amending and completing some energy-related legal acts: • the deadline for su
Slide 42: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 Law No. 248/2022 regarding the approval of Government Emergency Ordinance No. 143/2021 to amend and supplement the Law on electrical energy and natural gas No. 123/2012, as well as to amend certain regulatory acts It approves GEO No. 143/2022 with a
Slide 43: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 GEO no. 119/2022 - to amend and supplement the GEO n98xo. 27/2022 on the measures applicable to final customers on the electrical energy and natural gas market during April 1, 2022 - March 31, 2023, as well as to amend and supplement regulatory acts
Slide 44: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 ANRE Order No. 3/2022 to approve the Regulation on the organization and operation of the online platform to change the electrical energy and natural gas supplier and to contract electrical energy and natural gas supply: • implementation deadline – A
Slide 45: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 ANRE orders no. 27 - 31/2022 — amending the appendix to ANRE Orders no. 118 - 123/2021 on the approval of specific tariffs for the electricity distribution service and the price for reactive electricity, for Societatea Delgaz Grid — S.A /Societatea
Slide 46: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 ANRE order no. 65/2022— approving the Regulation on the organized framework for electricity contracting by large end customers • simplification of the organized electricity contracting framework for large final electricity customers (with an annual
Slide 47: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 ANRE Order No. 73/2022 to amend the Regulation regarding the organized framework to contract electrical energy by the large final customers, approved through the Order of the President of the National Regulatory Authority in the field of Energy No.
Slide 48: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 ANRE Order no. 90/2022— amending and supplementing the Order of the President of the National Energy Regulatory Authority no. 52/2021 for the approval of the Methodology for monitoring the system for promoting the production of electricity from rene
Slide 49: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 ANRE Order No. 92/2022 — to amend and supplement the Regulation regarding the calculation and offsetting of imbalances in the case of parties responsible with the balancing — a single imbalance price, approved through the Order of the President of t
Slide 50: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 ANRE Order No. 95/2022 — to amend and supplement the Order of the President of the National Regulatory Authority in the field of Energy No. 15/2022 to approve the Methodology to set the rules for the sale of electrical energy produced in power plant
Slide 51: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 ANRE Order No. 110/2022 — to amend and supplement the Regulation regarding the natural gas supply of last resort, approved through the Order of the President of the National Regulatory Authority in the field of Energy No. 173/2020 • to provide the s
Slide 52: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 ANRE Order No. 110/2022— continued • for the duration of the implementation of the provisions under the support scheme, the suppliers of last resort shall not submit the values of the price components for the gas supply as last resort for the follow
Slide 53: Regulatory-related Developments – Supply – Q3 2022
Regulatory-related Developments – Supply – Q3 2022 ANRE Order No. 118/2022 — Order to amend and supplement the Methodology laying down the mandatory yearly obligation to purchase of green certificates, approved through the Order of the President of the National Regulatory Authority in the field of E
Slide 54: Glossary
Glossary LV Low Voltage AMR Automatic Meter Reading MP Merger Plan ANRE Romanian Energy Regulatory Authority MV Medium Voltage B2B Business to Business MWh MegaWatt hour B2C Business to Consumer NBV Net Book Value BET-TR Bucharest Exchange Trading - Total Return Index NL Network Losses BoD Board of
Slide 55: 2022 Financial Calendar
2022 Financial Calendar • 25 February Publication of the 2021 financial annual consolidated and individual preliminary results Publication of the 2021 financial annual results - documents for the Ordinary General Meeting of • 28 February Shareholders • 4 March Investor and analyst teleconference for
Slide 56: 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; +40 731 796 111 • Address: 9 Grigore Alexandrescu Str., 1st District, Bucharest, 010621 This document was prepared by Electrica for the presentation o
Slide 57: Q&A
Q&A Executive Management of Electrica Mr. Alexandru Chirita Chief Executive Officer Mr. Stefan Frangulea Chief Financial Officer 2017 Ms. Livioara2018Sujdea Chief Distribution Officer Mr. Mircea-Toma Modran Chief Information Officer 57 Public