Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — H1 2018 Earnings Presentation
25 slides from Edp's earnings presentation, Jul 27, 2018
Slide 1: 1H18 Results Presentation
2dp | + Bx ( 1H18 Results Presentation ~ Lisbon, July 27%, 2018
Slide 2: Recurring EBITDA €1,740m; Net Profit €380m; Net debt €14.2bn
Recurring EBITDA(1): €1,740m YoY Sound underlying growth in Brazil & renewables -6% Forex impact on BRL and USD depreciation vs. Euro Recurring -3% EBITDA (1) Hydro recovery YoY in Iberia and strong opex performance Regulatory changes announced in 4Q17 in Portugal (-€122m YoY) Net Profit: €380m Net
Slide 3: Recurring EBITDA 1H18 (€m)
Recurring EBITDA 1H18(1) (€m) ex-forex -6% forex impact +3% -3% 1,788 1,740 Portugal: -1% - Generation: hydro +85%; higher taxes (-€44m)(2) - Distribution: lower regulated revenues (-€78m) 34% -3% 34% Iberia Spain: better market conditions 9% +8% 10% Avg. installed capacity: +7% +1% 40% -5% 39% EDPR
Slide 4: EDP Hydro production in Iberia and reservoirs in Portugal
EDP Hydro production in Iberia(1) (TWh) Evolution of hydro reservoirs in Portugal YTD (%) Change in reservoirs Net hydro production 2018 2017 1H Historical avg. 90 8.8 80 79% +1TWh 74% 70 67% 64% 60 65% 63% 7.8 3.8 50 +0.3TWh 3.5 +121% 40 1H17 1H18 1H Hist. Avg. Jan Feb Mar Apr May Jun Jul Hydro fac
Slide 5: Opex by business area
Weight on Opex Business area Indicator YoY Change Main drivers Inflation Portugal +0.9%(2) 55% Iberia Opex(1) -2% Avg. MW: +2%; # customers: +1% 17% EDP Brasil Opex in BRL -1% Avg. Inflation 1H18: +3.1%(4) Build-up of O&M internalisation strategy 28% EDPR Adj. Core Opex/MW(3) +2% Core Opex/MW: -1% (
Slide 6: Recurring Net Profit 1H18 (€m)
Recurring Net Profit 1H18 (1) (€m) Portugal weight Reported Net 31% 22% Profit (%) +5% YoY(1) 457 435 Negative impact from 2H17 regulatory decisions 288 -€2m 290 -1% despite strong YoY improvement of hydro conditions +10% 115 +€11m Net profit +4%; EDP stake +7% to 82.6% 104 +32% +€13m Net profit in
Slide 7: Renewables PPA/FiT secured and transmission lines in Brazil
Renewables: 3.8GW of PPA/FiT secured Brazil: 5 Electricity transmission lines in Brazil for new wind and solar projects to be built until 2021/22 Wind onshore and solar Wind Offshore 2.9 R$3.1bn Expected capex 12-14% Expected ROE 57% 0.4(1) Key highlights: 2.9 L24/2016 transmission line: 48% of cons
Slide 8: Hydro update and maintenance of 2018 Outlook
Update on hydro conditions in Portugal Weaker BRL/EUR Maintenance of 2018 Outlook Hydro reservoirs in July continue 4.6 ~10% above historical avg. 4.4 EBITDA ~€3.4bn 4.2 Hydro production in July to be 4.0 above historical avg. Net Profit ~€0.8bn 3.8 7
Slide 9: EDP's Executive BoD Report on CTG voluntary tender offer over EDP
( EDP’s Executive BoD Report on CTG voluntary tender offer over EDP - Main highlights
Slide 10: Preliminary Offer launched by CTG: key terms and main considerations
Preliminary Offer launched by CTG on May 11th EDP Executive BoD Report issued (2) on June 9th Key terms of the Offer Main considerations Price: €3.26/share (1) Price Offer conditioned to: “The price offered does not adequately reflect the value of EDP and that the implied offer premium is low, consi
Slide 11: Regulatory Approvals
Scope EDP Executive BoD |Considerations National security issues may trigger CFIUS heightened scrutiny, leading to a lengthy Regulatory Clearance of the transaction by review process and potentially resulting in remedies or mitigation measures being Approvals CFIUS required. There is also the possib
Slide 12: Corporate Governance and financial strategy
Scope EDP Executive BoD |Considerations “Preserve (…) autonomous Corporate decision-making based on the Governance highest, international corporate The merits of these described intentions depend on their implementation model, governance standards” which is not clear at this stage. “Reinforce EDP’s
Slide 13: Results Analysis
‘ Results Analysis 2 12
Slide 14: Installed capacity and electricity production by technology
Installed capacity breakdown by technology: Jun-18 (GW) Electricity production breakdown by technology 1H18 (TWh) Wind Hydro Solar CCGT Coal Other(1) Wind Hydro Solar CCGT Coal Other 2% 12% 1% 21% 14% 39% 40% 26.8GW 6% 38.2TWh 1% +2% YoY 0.3% +7% YoY 34% 31% 74% 71% Renewables Renewables +0.6GW in w
Slide 15: EDPR EBITDA (€m)
EDPR EBITDA (€m) Europe (1) North America Brazil ex-forex +1% 1H17 1H18 YoY Avg. Installed Capacity 10.0 10.7 +7% (GW) -5% Production vs. avg. P50 719 0% -1% -1% 686 (%) 2% +10% 2% Electricity Production 14.5 15.4 +6% 50% -13% 45% (TWh) Avg. selling price -11% 59.9 53.5 (€/MWh) -6% ex-forex 49% +3%
Slide 16: Recurring EBITDA Generation & Supply Iberia (€m)
Recurring EBITDA Generation & Supply Iberia(1) (€m) +26% 1H17 1H18 YoY Hydro Production (3) 455 4.7 8.7 +85% (TWh) 360 Hydro weight on Gen. Mix 27% 50% +23pp (%) CMEC 111 Avg. production cost (4) deviation (2) 33 22 -33% (€/MWh) Regulatory costs 93 114 +22% 249 (€m) CMEC deviation revenues 111 5(5)
Slide 17: EDP Brasil EBITDA (R$m)
EDP Brasil EBITDA (R$m) Distribution Pecém I Hydro Gen., Supply & Other +17% 1H17 1H18 YoY 1.266 Pecém availability 1.087 92% 98% +6pp 511 (%) +4% 492 Distribution Espírito 12.7% 11.9% -0.8pp 303 Santo 198 +53% grid losses (1) 397 +14% 451 (%) São Paulo 9.5% 8.6% -0.9pp 1H17 1H18 (1) Non-technical l
Slide 18: Pro-forma EBITDA – Regulated networks (€m)
Pro-forma(1) EBITDA – Regulated networks (€m) Electricity Spain Electricity Portugal -23% 1H17 1H18 YoY 411 Regulated revenues 618 541 -13% (€m) 94 314 Return on RAB 70 6.68% 5.43% (2) -125bp (%) OPEX 182 173 -5% 316 -23% (€m) 244 78% Electricity distributed 22 23 +5% (TWh) 1H17 1H18 (1) In 1H17, ex
Slide 19: Change in Net Debt: Jun-18 vs. Dec-17 (€bn)
Change in Net Debt: Jun-18 vs. Dec-17 (€bn) Annual payment in May-18 0.7 14.2 13.9 -0.6 +0.6 -0.4 -0.05 0.5 0.9 System debt in Portugal €0.3bn surplus in 1H18 13.7 13.0 Net Debt Recurring Organic Net expansion Reg. Receivables Dividends paid to Forex and other Net Debt Dec-17 FCF investments EDP Sha
Slide 20: Financial liquidity and debt maturity profile
Financial liquidity as of Jun-18 (€bn) EDP consolidated debt maturity profile as of Jun-18 (€bn) EDP S.A., EDP Finance B.V. and Other EDP Brasil Cash & Equivalents: €1.6bn Avg. Debt Maturity: 4.7Y Available Credit Lines: €5.1bn 3.1 2.4 Revolving Credit Facility (RCF) maturing Mar-23 €3.3bn 2.0 1.9 2
Slide 21: Net Interest Cost and Avg. Cost of Debt
Net Interest Cost (€ million) Avg. Cost of Debt (%) 364 -15% -40bp 343 4.1% 321 3.7% 292 2H16 1H17 2H17 1H18 1H17 1H18 20
Slide 22: Net Financial Costs: 1H18 vs. 1H17 (€m)
Net Financial Costs (1) : 1H18 vs. 1H17 (€m) -25% Net interest costs: -15% YoY 363 (51) Forex & energy derivatives: (+€15m (31) 5 274 in 1H18 vs. -€16m in 1H17) (11) Other: - In 1H18, +€15m on sale of 20% stake in UK wind offshore project; +€15m from badwill related to acquisition of Celesc - In 1H1
Slide 23: 1H18 EBITDA to Net Profit (€m)
1H18 EBITDA to Net Profit (1) (€m) Chg. €m YoY(1) Underlying growth in Brazil, renewables and Iberia offset by EBITDA 1.722 -€66m regulation in Portugal (-€140m) and forex (-€101m) Amort., Impair. 696 -€4m Forex (+€32m); +3% avg. installed capacity & Provisions EBIT 1.026 -€70m Financial Results 274
Slide 24: Disclaimer
This document has been prepared by EDP - Energias de Portugal, S.A. (the "Company") solely for use at the presentation to be made on this date and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where this presentation is made, o
Slide 25: IR Contacts and Next Events
IR Contacts Next Events Miguel Viana, Head of IR Sep 7th: La Caixa BPI Conference (Cascais) Sónia Pimpão João Machado Sep 12th: BBVA Conference (London) Maria João Matias Sep 13th: Morgan Stanley Utilities Conference (London) Sérgio Tavares Carolina Teixeira e-mail ir@edp.pt phone +351 210012834 sit
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