Pge Polska Grupa Energetyczna S.a. · GPW:PGE
Pge Polska Grupa Energetyczna — Q4 2019 Earnings Presentation
47 slides from Pge Polska Grupa Energetyczna's earnings presentation, Mar 31, 2020
Slide 1: Q4 & 2019 Financial and Operating Results
Q4 & 2019 Financial and Operating Results INVESTOR PRESENTATION March 31, 2020
Slide 2: Financials
Financials
Slide 3: Key financial data
3 Key financial data Consolidated [IFRS, PLN m] Q4 2019 Q4 2018 y/y 2019 2018 y/y Sales 9 695 6 984 39% 37 627 25 946 45% including LTC compensations* 6 -38 n/a -8 -120 n/a Recurring Sales 9 689 7 022 38% 37 635 26 066 44% EBITDA 1 069 1 231 -13% 7 141 6 375 12% Recurring EBITDA** 1 704 1 469 16% 6
Slide 4: One-off items
4 One-off items Computation of recurring EBITDA and recurring EBIT: [PLN m] Q4 2019 Q4 2018 2019 2018 LTC adjustment (including court verdicts) 6 -38 -8 -120 Change of reclamation provision -589 -129 -835 -146 Change of actuarial provision -63 -71 -99 -71 Additional EUA allowances 11 0 1 446 0 One-o
Slide 5: Development of EBITDA by major value drivers
5 Development of EBITDA by major value drivers PLNm 2018 EBITDA REPORTED 6 375 One-offs 337 2018 EBITDA RECURRING* 6 712 Wholesale price of electricity 3 942 Volume of electricity 1 399 +2 996 Optimization of electricity portfolio 442 Heat sales 11 Hard coal with transport 193 Natural gas 91 -323 Bi
Slide 6: Recurring EBITDA in Q4 2019 – composition and development
6 Recurring* EBITDA in Q4 2019 – composition and development 283 1 704 515 319 108 728 -249 Conventional District Renewables Supply Distribution Other EBITDA Generation heating Q4 2019 728 319 108 -249 515 283 1 704 Share in Q4 2019 EBITDA (%) 43% 19% 6% -15% 30% 17% 100% Q4 2018 446 321 109 -187 61
Slide 7: Recurring EBITDA in 2019 – composition and development
7 Recurring* EBITDA in 2019 – composition and development 2 340 6 637 519 181 926 2 698 -27 Conventional District Renewables Supply Distribution Other EBITDA Generation heating 2019 2 698 926 519 181 2 340 -27 6 637 Share in 2019 EBITDA (%) 41% 14% 8% 3% 35% 0% 100% 2018 2 262 982 463 233 2 503 269
Slide 8: Change in Conventional Generation segment
8 Change in Conventional Generation segment District Heating as a separate segment Since 2019 PGE presents the new segment – District Heating. In previous periods results of the segment were presented within Conventional Generation segment. New presentational framework aims to improve transparency a
Slide 9: Segmental revenues and costs – Conventional Generation
9 Segmental revenues and costs Conventional Generation [PLN m] Q4 2019 Q4 2018 y/y 2019 2018 y/y Sales, including: 4 993 3 261 53% 19 245 12 375 56% Sale of electricity 4 749 3 052 56% 18 277 11 546 58% Auxiliary services 95 91 4% 361 337 7% Sale of heat 50 54 -7% 159 169 -6% Sale of certificates of
Slide 10: Segmental revenues and costs – District Heating
10 Segmental revenues and costs District Heating* [PLN m] Q4 2019 Q4 2018 y/y 2019 2018 y/y Sales, including: 1 837 1 598 15% 6 058 5 508 10% Sale of electricity 1 151 824 40% 3 924 3 017 30% LTC revenues 6 -38 n/a -8 -120 n/a Sale of heat 599 599 0% 1 864 1 841 1% Sale of certificates of origin 5 1
Slide 11: Segmental revenues and costs – Renewables
11 Segmental revenues and costs Renewables [PLN m] Q4 2019 Q4 2018 y/y 2019 2018 y/y Sales, including: 268 221 21% 1039 839 24% Sale of electricity 145 135 7% 594 452 32% Sale of certificates of origin 63 36 75% 195 134 46% Auxiliary services and leasing* 58 49 18% 242 251 -4% Cost by kind, includin
Slide 12: Segmental revenues and costs – Distribution
12 Segmental revenues and costs Distribution [PLN m] Q4 2019 Q4 2018 y/y 2019 2018 y/y Sales, including 1 617 1 526 6% 6 155 5 878 5% Revenues from distribution services 1 526 1 449 5% 5 828 5 590 4% Other revenues from core activities 63 50 26% 219 183 20% Cost by kind, including 1 450 1 298 12% 5
Slide 13: Segmental revenues and costs – Supply
13 Segmental revenues and costs Supply [PLN m] Q4 2019 Q4 2018 y/y 2019 2018 y/y Sales, including: 4 166 4 164 0% 17 312 14 377 20% Sale of electricity 3 479 2 680 30% 13 230 10 146 30% Sale of CO2 allowances 0 858 n/a 1 376 1 217 13% Sale of natural gas 116 106 9% 508 533 -5% Sale of other fuels 33
Slide 14: Conventional Generation – EBITDA in Q4 2019
14 Conventional Generation – EBITDA in Q4 2019 1 200 1 000 800 600 400 200 0 Electricity Result on the Electricity Revenues EBITDA production optimization of Costs CO2 Personnel EBITDA production from agreement Other Q4 2018 difference in the electricity of fuel costs costs Q4 2019 difference in pri
Slide 15: Conventional Generation – EBITDA in 2019
15 Conventional Generation – EBITDA in 2019 4 800 4 300 3 800 3 300 2 800 2 300 1 800 1 300 800 300 Electricity Electricity Result on the Revenues from EBITDA production production Costs CO2 Personnel EBITDA optimization of the agreement Other 2018 difference in difference in of fuel costs costs 201
Slide 16: District Heating – EBITDA in Q4 2019
16 District Heating – EBITDA in Q4 2019 600 500 400 300 200 100 0 Electricity Electricity Heat production Heat production Revenues from EBITDA production production Costs CO2 Personnel EBITDA difference in difference in property Other Q4 2018 difference in difference in of fuels costs costs Q4 2019
Slide 17: District Heating – EBITDA 2019
17 District Heating – EBITDA 2019 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 Electricity Electricity Heat production Heat production Revenues from EBITDA production production Costs CO2 Personnel EBITDA difference in difference in property Other 2018 difference in difference in of fuels costs c
Slide 18: Renewables – EBITDA in Q4 2019
18 Renewables – EBITDA in Q4 2019 150 140 130 120 110 100 90 80 70 Revenues from Revenues from Revenues from EBITDA agreement with TSO** Personnel costs EBITDA electricity* property rights Other Q4 2018 Q4 2019 Change -1 27 10 -9 -28 EBITDA reported Q4 2018 109 83 36 48 23 One-offs Q4 2018 0 82 63 5
Slide 19: Renewables – EBITDA in 2019
19 Renewables – EBITDA in 2019 600 580 560 540 520 500 480 460 440 420 400 Revenues from Revenues from Revenues from Personnel EBITDA agreement with TSO** EBITDA electricity* property rights costs Other 2018 2019 Change 60 61 -7 -17 -41 EBITDA reported 2018 463 One-offs 2018 0 Recurring EBITDA 2018
Slide 20: Distribution – EBITDA in Q4 2019
20 Distribution – EBITDA in Q4 2019 800 600 400 200 0 EBITDA Volume of Change of Personnel EBITDA Network losses** Property tax Other Q4 2018 distributed energy distribution tariff* costs Q4 2019 Change -9 61 -58 -6 -62 -22 EBITDA reported Q4 2018 571 One-offs 2018 -40 Recurring EBITDA Q4 2018 611 1
Slide 21: Distribution – EBITDA in 2019
21 Distribution – EBITDA in 2019 2 600 2 400 2 200 2 000 1 800 1 600 EBITDA Volume of Change of Personnel EBITDA Network losses** Property tax Other 2018 distributed energy distribution tariff* costs 2019 Change -4 161 -132 -22 -148 -18 EBITDA reported 2018 2 463 One-offs 2018 -40 Recurring EBITDA 2
Slide 22: Supply – EBITDA in Q4 2019
22 Supply – EBITDA in Q4 2019 0 -50 -100 -150 -200 -250 -300 -350 -400 Result on Services for Result on Financial Provision for EBITDA Personnel EBITDA electricity Result on electricity other segments coal instruments onerous Others Q4 2018 costs Q4 2019 volume in GK PGE trading revaluation contract
Slide 23: Supply – EBITDA in 2019
23 Supply – EBITDA in 2019 350 250 150 50 -50 -150 -250 Result on Services for Result on Financial EBITDA Result on electricity Personnel Provision for EBITDA electricity other segments coal instruments Others 2018 margin costs onerous contracts 2019 volume in GK PGE trading revaluation Change 18 -4
Slide 24: Cash from operations, investments and net debt
24 Cash from operations, investments and net debt Consolidated Cash Flows [PLN m] Q4 2019 Q4 2018 2019 2018 Operating CF 2 055 2 434 6 820 5 102 Investing CF -2 014 -2 126 -6 865 -6 465 Financial CF -469 -354 77 91 Change of cash and equivalents -428 -46 32 -1 272 Consolidated Balance Sheet Q4 EOP Q
Slide 25: PGE cash position provides…
25 PGE cash position provides… 2019 Q3 2019 Gross Debt (PLN m) 12 308 12 670 … plenty of headroom Net debt (PLN m) 11 415 11 703 in the balance Net Debt/LTM EBITDA 1.60x 1.60x sheet Net Debt/Equity 0.26x 0.24x MOODY’S FITCH Long-term company rating (IDR) Baa1 BBB+ Rating outlook Stable Stable Date o
Slide 26: Debt development and structure (as at Dec. 31, 2019)
26 Debt development and structure (as at Dec. 31,2019) Gross debt and net debt (in PLN million) 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 -2 000 -4 000 Gross debt Net debt Fixed vs floating rates Currency profile of drawn debt (drawn debt) (including hedging transactions) 1% 7% Floating 12% 92%
Slide 27: Debt maturity and available financing
27 Debt maturity and available financing Debt maturity profile (PLN m) as at December 31, 2019. 2 500 2 000 1 500 1 000 500 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Drawn debt and availability of external financing (in PLN m) as at December 31, 2019. 9 000 8 000 7
Slide 28: Fundamentals of the distribution business
28 Fundamentals of the distribution business RAB (with RAB-AMI) development* Regulated revenue composition* (PLN m) (PLN m) 1 877 1 194 1 843 1 339 6 131 5 985 6 106 2 822 2 512 2 611 16 884 17 567 16 380 1 104 1 226 1 245 1 202 1 231 1 274 1 004 1 016 975 RAB 2018 CAPEX Deduction RAB 2019 CAPEX Ded
Slide 29: CO2 allowances – regulations and settlement
29 CO2 allowances – regulations and settlement Free EUA recognized at a zero value (Cons. FS, note 16) Regulations in the III Settlement Period EUA As of 2013 only carbon allowances for heat production are Quantity Value received free of charge. Carbon allowances for electricity (m tons) (PLN m) pro
Slide 30: Capital Expenditures
Capital Expenditures
Slide 31: Capital expenditures
31 Capital expenditures Segment (PLNm) Q4 2019 Q4 2018 y/y 2019 2018 y/y Conventional Generation 1 265 2 016 -37% 4 018 4 122 -3% District heating 284 265 7% 548 775 -29% Distribution, including: 865 784 10% 2225 1 853 20% New clients connection 241 194 24% 757 564 34% Distribution grid* 219 195 12%
Slide 32: Capital expenditures – key projects
32 Capital expenditures PLN 2 353 m CAPEX Conv. Generation modernisations Key projects PLN 238 m in 2019 Suply and other 3% Opole Power Plant – units 5 & 6 PLN 910m Conventional Generation PLN 2 225 m Distribution 31% TOTAL Turów Power Plant – unit 7 PLN 527m 33% CAPEX PLN 7 bn Modernisation of dist
Slide 33: Operations
Operations
Slide 34: Key operating data
34 Key operating data Net electricity generation by sources, sales and distribution [TWh] Q4 2019 Q4 2018 y/y 2019 2018 y/y Lignite-fired power plants 7.36 9.58 -23% 32.12 38.90 -17% Hard coal-fired power plants 4.07 4.09 0% 14.86 16.61 -11% Coal-fired CHPs 1.36 1.33 2% 4.20 4.27 -2% Gas-fired CHPs
Slide 35: Generation volume by fuel – Q4 2019 y/y
35 Generation volume by fuel – Q4 2019 y/y TWh 16.82 Q4 2019 National Power System (y/y): electricity 14.88 consumption lower by 0.7 TWh, wind generation Q4 2018 higher by +0.3 TWh, net import expanded by 9.6 +2.2 TWh → lower demand for energy 7.38 generated in conventional power plants 5.4 5.33 Lig
Slide 36: Generation volume by fuel – 2019 y/y
36 Generation volume by fuel – 2019 y/y TWh 65.91 National Power System (y/y): electricity 58.32 2019 consumption lower by 1.5 TWh, wind generation 2018 +2.2 TWh and net import expanded by +4.9 TWh 38.98 → lower demand for energy generated in 32.2 conventional power plants 18.94 20.66 Lignite: lower
Slide 37: Generation assets - conventional
37 Generation assets - conventional Higher utilisation of key assets • Lower coal power plant Availability Capacity Factor capacity factor due to 84.8% 82.9% 75.5% 78.4% 81.4% 77.6% 80.7% increased net imports, higher wind generation and 62.4% 52.0% lower demand for energy. 44.2% 45.6% Increased ove
Slide 38: Generation assets – wind farms
38 Generation assets – wind farms Higher windiness Availability Capacity Factor 97.4% 97.3% • Substantially higher 28.0% windiness in 2019. 23.7% • Q4 2019: higher capacity factor due to better 2018 2019 windiness in November Wind Farms and December. • Comparable levels of 97.1% 96.9% availability y
Slide 39: Distribution assets
39 Distribution assets Efficiency, quality, growth Volume of electricity distribution Network losses [%] (TWh) (last twelve months) 6.00 0% • Distribution volumes 5.80 36.41 36.38 5.60 sustained 35.34 5.40 5.37 -7% • Further reduction of network 34.32 5.15 losses 5.20 33.38 5.00 4.81 4.80 4.60 Dec-1
Slide 40: Q4 2019 Output and sales of electricity
40 Q4 2019 Output and sales of electricity Illustrative Households** Conventional Generation 2.49 TWh 11.68 TWh 2.60 TWh (Q4 2018) 13.84 TWh (Q4 2018) Wholesale and Supply balancing market 22% District heating 17.14 TWh 11.23 TWh* 9.12 TWh (Q4 2018) 11.06 TWh (Q4 2018) 2.59 TWh 78% 2.49 TWh (Q4 2018
Slide 41: 2019 Output and sales of electricity
41 2019 Output and sales of electricity Illustrative Households** Conventional Generation 9.83 TWh 47.61 TWh 9.77 TWh (2018) 55.93 TWh (2018) Wholesale and Supply balancing market 22% District heating 61.35 TWh 44.01 TWh* 34.21 TWh (2018) 42.57 TWh (2018) 8.42 TWh 78% 8.16 TWh (2018) Distribution Bu
Slide 42: Opole – initial volumes provided to the system
42 Opole – initial volumes provided to the system Unit [TWh] Q1 Q2 Q3 Q4 2019 Net generation, including: 0.57 1.01 0.91 0.71 3.20 No. 5 reported volume* - 0.69 0.91 0.71 2.31 start phase (CAPEX adjustment) 0.57 0.33 - - 0.89 Net generation, including: - 0.22 1.05 0.66 1.93 No. 6 reported volume* - -
Slide 43: Stabilized prices at energy exchange
3% 43 Stabilized prices at energy exchange CO2 allowance (EUA_DEC19) Hard coal (Polish Steam Coal Index PSCMI1) PGE average wholesale price of electricity (Conventional Generation)* EUR/t 26.9 PLN/GJ PLN/MWh 25.6 24.6 11.90 12.00 11.97 12.14 245 242 246 251 11.26 11.20 22.2 10.50 10.80 19.7 9.50 19.
Slide 44: Invitation for webcast
44 Invitation for webcast On behalf of Wojciech Dąbrowski President & CEO and Paweł Strączyński Vice-President & CFO we kindly invite you to a webcast of the presentation of PGE Q4 and FY 2019 results which will be held on Thursday, April 2, 2020 at 10:00 AM (CEST) Link to the webcast will be availa
Slide 45: Sell-side analysts covering PGE
45 Sell-side analysts covering PGE Institution Analyst BDM Krystian Brymora BOŚ Jakub Viscardi Citigroup Piotr Dzięciołowski Erste Group Tomasz Duda IPOPEMA Robert Maj JP Morgan Michał Kuzawiński mBank Kamil Kliszcz Pekao Maksymilian Piotrowski PKO BP Andrzej Rembelski Raiffeisen Centrobank Oleg Gal
Slide 46: Disclaimer
46 Disclaimer This presentation has been prepared by the management of PGE Polska Grupa Energetyczna S.A. (the “Company” or “PGE”) and other entities. This presentation does not constitute or form part of and should not be constructed as, an offer to sell, or the solicitation or invitation of any of
Slide 47: Investor Relations contacts
47 Investor Relations contacts Filip Osadczuk Tel: (+48 22) 340 12 24 filip.osadczuk@gkpge.pl Mob: +48 695 501 370 Krzysztof Dragan Tel: (+48 22) 340 15 13 krzysztof.dragan@gkpge.pl Mob: +48 601 334 290 Stanisław Ozga, CFA Tel: (+48 22) 340 12 69 stanislaw.ozga@gkpge.pl Mob: +48 887 171 324
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