Edp S.a. · EURONEXT:EDP

Edp — Energias de Portugal — FY2004 Earnings Presentation

23 slides from Edp's earnings presentation, Mar 2, 2005

  1. Slide 1: 2004 Year End Results

    energias de portugal 2004 Year End Results March 2nd, 2005 1

  2. Slide 2: EDP Consolidated P&L

    EDP Consolidated P&L 2004 2003 Chg. % Chg. € Revenues 7,222 6,978 3% 244 Gross profit 3,181 3,018 5% 162 Operating costs 1,213 1,191 2% 21 EBITDA 1,968 1,827 8% 141 EBIT 1,058 906 17% 153 Financial results (335) (359) 7% 24 Extraordinary results (165) (14) - (150) Net Profit 440 381 15% 59 2

  3. Slide 3: Milestones

    Milestones Focus on „ Following publication of Dec. Law, initial CMECs value set at €3.4 billion Iberian Acquisition of full control of HC financed through rights issue of €1.2 billion energy „ „ EU blocks joint acquisition of GDP; EDP appeals for annulment of decision „ Acquisition of 46.6% of Port

  4. Slide 4: Sustained growth in core energy markets

    Sustained growth in core energy markets Installed 11,475 12,284 Capacity „ 400 MW TER I unit operated full year (MW) (1) 541 487 „ 400 MW TER II unit started in November 10,934 11,797 „ Additional 214 MW in wind farms in Iberia 2003 2004 „ Sale of Fafen in December Electricity 47.2 46.0 „ Lower hydr

  5. Slide 5: Gross Profit up 5% due to higher activity

    Gross Profit up 5% due to higher activity Gross Profit Contribution ’04/03 € million YoY Change +27% +10% -45% +5.4% +9% -70% +6% +15 +88% +1% -33 3,181 +14 +96 -36 (1) +10 +12 3,018 +86 2003 EDPP EDPC Renew. EDPD HC (40%) Brazil Oni Other 2004 GP ’04: 1,052 16 21 1,221 226 447 158 41 „ New capacity

  6. Slide 6: Generation performance reflects stable PPAs and new CCGT capacity

    Generation performance reflects stable PPAs and new CCGT capacity Electricity Generation(1) ’04/03 GWh GWh Gross Profit ’04/03 € million (2) 38 28,365 25,088 17 1,014 -6,108 -78 +2,910 +14 -1 +52 950 2003 PES SRP NBES 2004 2003 PES SRP NBES 2004 „ Despite lower emission, gross profit in the PES up,

  7. Slide 7: Wind generation contributed 10% to improvement in the Group's gross profit

    Wind generation contributed 10% to improvement in the Group’s gross profit Portugal (wind capacity) MW Spain (wind capacity) – HC 100% MW 2003 65 128 GWh €10.7 m 2003 81 36 GWh €1.6 m Gross Profit Gross Profit Generation Generation 1.8x 1.9x 7.7x 10.6x 2004 136 237 GWh €20.1 m 2004 223 277 GWh €17.1

  8. Slide 8: Regulated Revenues in Portugal up 8% on higher consumption

    Regulated Revenues in Portugal up 8% on higher consumption Allowed Revenues ’04/03 € million Positive impact of a 6.1% growth in energy Allowed consumption … Revenues 1,181 2003 Change in … partly mitigated by a decrease in tariffs for Energy 49 the Use of the Distribution Grid: -3.7% for Distribute

  9. Slide 9: HC hit by abnormal market conditions

    HC hit by abnormal market conditions Gross Profit Contribution ’04/03 € million HC @ 100% +6.4% +6 565 531 +4 +61 +21 -65 +13 +5 +12 -25 2003 Fuel Costs Pool Price Electricity CTCs Supply Renew. Elect. Gas Other 2004 (Generation) Emission sales margin Distribution „ Dry period and rising fuel costs

  10. Slide 10: Brazil up on consumption growth and tariffs

    Brazil up on consumption growth and tariffs Distribution Gross Profit ’04/03 Consumption up 4.5% driven by strong R$ m +367 economic growth: 1,445 +34% „ Bandeirante +7.1% 1,078 „ Escelsa -0.1% „ Enersul +6.0% Average tariff up 18%: 2003 2004 „ Bandeirante +19% Distribution 21.4 22.4 TWh „ Escelsa +

  11. Slide 11: Strict cost control on growing environment: Opex up 1.8% and gross profit up 5.4%

    Strict cost control on growing environment: Opex up 1.8% and gross profit up 5.4% Supplies & Services € million Personnel Costs € million Other Opex € million 2003 2003 2003 466 647 78 +4.8% +€23m -0.6% -€4m +3.7% +€3m 2004 2004 2004 489 643 81 „ EDPD flat due to lower costs „ Strong discipline on „

  12. Slide 12: Significant savings from HR Restructuring

    Significant savings from HR Restructuring Number of Employees down 8% – EDP Group „ EDP focused on efficiency across the Group „ Workforce reduction of 1,470 2003 9,967 3,757 3,944 17,668 -1,470 „ The successful implementation of the HR 2004 8,984 3,617 3,599 16,198 Program in Portuguese core busine

  13. Slide 13: EBITDA up 7.7% on improved gross profit and cost discipline

    EBITDA up 7.7% on improved gross profit and cost discipline EBITDA per business unit € million YoY Change +49% +147% -35% +7.7% +13 -41 1,968 +5% +5% +8% -105% +150% +7 +92 +25 -28 +11 1,827 +62 2003 EDPP EDPC Renew. EDPD HC 40% Brazil Oni Other 2004 EBITDA ‘04: 876 -1 19 548 150 278 22 76 Improved

  14. Slide 14: Reported EBIT up 17% (8% before accounting change)

    Reported EBIT up 17% (8% before accounting change) EBIT Consolidated ’04/03 € million - +51% +8% +4% +16.9% +38 1,058 +30 +80 +141 906 2003 EBITDA Depreciation Subsidised assets Provisions 2004 depreciation 2004 Figures: 1,968 875 80 114 „ Further improvements at the EBIT level came from accounting

  15. Slide 15: Extraordinary results

    Extraordinary results Impact of key extraordinary items 2004 (€ million) „ Extraordinary provisions at Oni (inc. reversal of €40m tax credit on OniWay) -55 „ Impairments in goodwill of the IT business -35 „ HR restructuring (anticipation to retirement age and negotiated dismissals) -32 „ Retroactive

  16. Slide 16: Net Profit up 15% despite extraordinaries

    Net Profit up 15% despite extraordinaries Net Profit Contribution ’04/03 € million YoY Change -8% +1.2X - +17% -6 +30 -18% -7% +15.5% -3 440 -150 +36 381 +153 2003 EBIT Interest paid Other fin. Extraordinary Taxes Minorities 2004 2004 Figures: 1,058 -324 -11 -165 160 41 Fall in interest charges in B

  17. Slide 17: EDP Consolidated P&L

    EDP Consolidated P&L 2004 2003 Chg. % Chg. € Revenues 7,222 6,978 3% 244 Direct costs 4,041 3,959 2% 82 Gross profit 3,181 3,018 5% 162 Personnel costs 643 647 (1%) (4) Supplies & services 489 466 5% 23 Other costs (net) 81 78 4% 3 Operating costs 1,213 1,191 2% 21 EBITDA 1,968 1,827 8% 141 Deprecia

  18. Slide 18: Operating cash-flow funded 22% increase in Capex

    Operating cash-flow funded 22% increase in Capex Cash Flow before capex 2004 € million Iberia = 86% 239 15 -27 175 1,664 526 776 -40 1 EDPP EDPC Renewables EDPD HC (40%) Brazil Oni Other Total Capex 207 4 55 310 118 285 33 40 1,051 CF after Capex 569 -44 -54 216 57 -46 -18 -67 613 „ Despite heavy in

  19. Slide 19: Debt increases by HC consolidation

    Debt increases by HC consolidation Cash-flow to debt 2004 € million 1,674 -1,051 623 -297 +104 -296 Consolidation of HC@100% -268 -133 Total Cash flow Capex Cash flow Interest Divestments Other Dividends Debt Debt before Capex after Capex paid and non- increase increase other operating cash-flow -97

  20. Slide 20: Debt profile

    Debt profile Debt Maturity Profile € million Holding 1,865 Other 1,492 1,279 1,153 1,076 890 794 76 2005 2006 2007 2008 2009 2010 2011 >2011 Debt by Currency YE2004 Medium/Long Term Debt YE2004 Variable Rate 24% BRL 8% EUR Hedged 92% 54% USD Fixed Rate 1% 22% 20

  21. Slide 21: On track to achieve profitability target

    On track to achieve profitability target EBITDA Consolidated € million Invested Capital € million 2,752 16,869 12,634 12,366 12,849 1,827 1,968 1,621 2002 2003 2004 2007 2002 2003 2004 2007 ROIC 7.1% 6.0% 5.5% 3.5% 2002 2003 2004 2007 21

  22. Slide 22: Sustained dividend growth policy in line with announced in Strategy Plan

    Sustained dividend growth policy in line with announced in Strategy Plan Dividend’s proposal € million Net Profit € million Dividend per share €cent Payout 9.0 9.0 9.6 9.2 81% 71% 77% +15% +14% 338 289 268 268 2002 2003 2004* 2004 2002 2003 2004 Adjusted 7% p.a. for rights growth issue Adjust 2004 d

  23. Slide 23: 2004 Year End Results

    energias de portugal 2004 Year End Results March 2nd, 2005 23

EDP - Energias de Portugal — FY2004 Earnings Presentation on 6ix