Public Power Corporation S.a. · ATHEX:PPC
Public Power — PPC — Investor Day (January 2024)
48 slides from Public Power's investor day presentation, Jan 23, 2024
Slide 1: Capital Markets Day
Capital Markets Day 23rd January 2024 Capital Markets Day | January 2024
Slide 2: Disclaimer
Disclaimer This presentation and the information contained herein (unless otherwise indicated), including any accompanying oral presentation, question and answer session and any other document or materials distributed at or in connection with this presentation, has been prepared by PPC S.A. (“PPC”,
Slide 3: Today’s Presenters
Today’s Presenters Georgios Konstantinos Stassis Alexandridis Chairman & CEO CFO • CEO of PPC since 2019 • CFO of PPC since 2020 • ~20 years of experience in energy sector • ~15 years of experience in financial management of listed and non-listed • Prior CEO of Enel Romania, Head of Enel Green compa
Slide 4: Agenda
Agenda Georgios Stassis 1 PPC Today and Track Record Since 2021 Implementing a Successful Strategy in Georgios Stassis 2 a Volatile Macro Backdrop Building a European Leader in Energy Georgios Stassis 3 Transition Konstantinos Alexandridis 4 PPC Financial Plan and Targets Georgios Stassis 5 Final Re
Slide 5: PPC Integrated Model is Well Positioned within Energy Transition
PPC Integrated Model is Well Positioned within Energy Transition Customer Clean and We build grids, centric retail resilient generation renewables and services portfolio flexible assets to serve Integrated Model our customers Modernizing our distribution networks Capital Markets Day | January 2024 5
Slide 6: PPC Today and Track Record Since 2021
Georgios Stassis Chairman & CEO 1 PPC Today and Track Record Since 2021 PPC Today Our Journey to Date Where Are We Heading? Capital Markets Day | January 2024
Slide 7: PPC today at a Glance
PPC today Retail Generation2 Distribution Financials at a Glance ~8.7m ~€4.3bn 3 10.7GW (o/w 43% RES ) Customers1 Installed Capacity Regulated Asset Base €1.5bn 2023 Recurring PF EBITDA8 56% 3 100% 20.6TWh (o/w 31% RES ) Electricity Generated #1 #1 39% 14% 2.3x 2023 Net Leverage Building a #1 #1 Mar
Slide 8: Our Journey to Date – Transformation Underway
Our Journey to Date – Transformation Underway New PPC Targets delivered since 2021 Total Shareholder Return3 RES Capacity Distribution EBITDA Lignite Capacity L1Y Since 29% CAGR • 1.9GW net capacity phased out - Nov 4, 2021 74% Focus on Energy 3.4GW 4.6GW additional 2GW out by 20262 684 Transition 4
Slide 9: Where Are We Heading?
Where Are We Heading? Growing, Greener and more Predictable Installed Capacity (GW) EBITDA Split (€bn) 2030 Outlook 18%2 CAGR 15% CAGR EBITDA at ~€3bn by 13,1 2,3 2030 10,7 1,5 of which 1,5 8,0 13,1 Integrated 0,8 Margin3 • ~68% Integrated Margin 0,7 0,8 (with ~70% Generation To be phased out2 Distr
Slide 10: Implementing a Successful Strategy in a Volatile Macro Backdrop
Georgios Stassis Chairman & CEO 2 Implementing a Successful Strategy in a Volatile Macro Backdrop Capital Markets Day | January 2024
Slide 11: PPC Strategy in Context
PPC Strategy in Context A Current Position and Outlook in the Region B Geographical Diversification and Trading Advantage C Integrated Model and Customers Anchor for RES Growth D Distribution Networks in the Energy Transition Capital Markets Day | January 2024 11
Slide 12: A Critical Role in Greece with Strong Presence in Romania
A Critical Role in Greece with Strong Presence in Romania While Targeting the Wider Region #1 Operator In #1 Generator & Supplier #2 Operator Romania In 1 #1 Energy Supplier Bulgaria and/or wider Greece1 in the Country Bucharest region • Owner of the single • 10.1GW installed capacity • 3 DSOs in Ro
Slide 13: Geographic Diversification and Trading Advantage
B Geographic Diversification and Trading Advantage The Expansion in Romania Creates an Energy Corridor with Further Potential for Value Creation In Line with PPC Strategy of Being Long on Customers 50+ TWh 15+ TWh UA Interconnections between Greece-Bulgaria-Romania to contribute to optimization MD o
Slide 14: Geographic Diversification and Trading Advantage: Synergies
B Geographic Diversification and Trading Advantage ~€50m Key Synergies and Benefits synergies p.a. Portfolio Cross-border power Cross-border gas Trading integration optimization optimization Optimization Flows optimization via Costs reduction and Netting, risk reduction and liquidity import/export a
Slide 15: Integrated Model Provides a Natural Hedge to Navigate Volatility
C Integrated Model Provides a Natural Hedge to Navigate Energy Markets Volatility… Model Ensures Resilience In Unprecedent Conditions Such As Covid And Energy Crisis An Integrated Model to Support Generation and Retail Businesses... With Integrated Margin, Distribution Activity and New RES Capacity
Slide 16: Distribution Networks – Strategy
D Distribution Networks – Strategy Investing in Grid Enhancement and Digitalisation to Build an Efficient, Stable and Resilient Network that Satisfies the Needs of Energy Transition 1 Key Transformation Pillars of DSO Meet increasing demand arising from electrification of other energy sectors Netw
Slide 17: Building a European Leader in Energy Transition
Georgios Stassis Chairman & CEO 3 Building a European Leader in Energy Transition Capital Markets Day | January 2024
Slide 18: Retail – Increasing Customer Centric Approach
Retail – Increasing Customer Centric Approach A Holistic Partner Strategy Serves our Customer Centric Approach Safeguarding Investments Returns Power & Gas PV and batteries What Kotsovolos Telco Heat Pumps can bring eMobility Insurances Own stores Smart Homes Payments PPC is the largest power genera
Slide 19: Retail – Building on Our Current Strong Position
Retail – Building on Our Current Strong Position Governing Principles Key Indicators Target • Focus on retention of high priority segments (in terms of 2023 2026 1 Segments behavior and profitability) Lowest Lowest churn in churn in Customer Customer 2 Positioning • Reposition and modernize PPC’s br
Slide 20: Generation – Portfolio Evolution Until 2026
Generation – Portfolio Evolution Until 2026 Installed Capacity 2023 (GW) Our Generation Mix is Turning Greener Greece Lignite Installed Capacity (GW) 13,1 +2.6 GW 39% 16% RES 10,7 #1 Oil 39% Increase in RES 43% 68% 18% 10.1 Capacity by 2026 25% Market Position 17% 19% Natural Gas 15% 13% 27% 2023 20
Slide 21: Generation – Large Growth Potential in RES Capacity
Generation – Large Growth Potential in RES Capacity PPC Targets for RES Growth Aligned with the Targets of Greece, Romania and Bulgaria RES Operating Capacity (GW) Project Pipeline by Country Project Pipeline Maturity Romania ~x2 33% 5 ~8,9 ~18GW ~18GW 9 ~4,5 4 Greece 2023 2026E Low Medium High 67%
Slide 22: Generation – Strong RES pipeline to Support RES Growth
Generation – Strong RES pipeline to Support RES Growth Installed capacity (GW) Snapshot of RES Projects Maturity (excl. Large Hydro) 8,9 0,1 Permitting Under 0,2 17% construction 7,5 + RTB¹ 0,1 1,7 66% 1.3 5.5 Tender 0,2 process 4.1GW 0.5 5,9 1,1 17% 0.4 0,1 1.5 0.4 0,9 3,6 0.5 4,5 0,1 2,8 0.4 0,8 1
Slide 23: Generation – Ongoing Phase Out of Carbon Intensive Units
Generation – Ongoing Phase Out of Carbon Intensive Units Rapid Lignite, Oil and Natural Gas Decarbonization CO2 Emissions By 2026 Program to Reduce Carbon Footprint (m tons)1 • Strategic decision (75)% to exit lignite, Net Lignite Capacity (GW) despite any 3,4 temporary delay 23,1 2,8 • Coal free
Slide 24: Generation – Sizeable Flexible Generation Fleet
Generation – Sizeable Flexible Generation Fleet Supporting Cash Flow Generation and Security of Supply Low RES penetration High RES penetration • High penetration of renewables calls for flexibility to Flexibility needs in timescales manage volatility Seconds to Minutes Hours to Days Week to seasons
Slide 25: Distribution – Predictable Regulatory Framework
Distribution – Predictable Regulatory Framework Greece Romania • RAB-based model with remuneration based on • RAB-based model with remuneration based 1 WACC on WACC • 4-year regulatory periods supporting increased 2 cash flow security and allowing for optimization • 5-year regulatory periods of plan
Slide 26: Distribution – Predictable Business Supporting Cash Flow Stability
Distribution – Predictable Business Supporting Cash Flow Stability EBITDA (€m) Key Highlights 6% CAGR 684 806 Sole Electricity Distribution Business in Greece and #2 Operator in Romania PF 2023¹ 2026E Capex (€m) ~€4.3bn RAB and 380,000km Network Length2 16% CAGR 884 572 WACC at 6.7% for 2021-202
Slide 27: E-Mobility and Telecommunications: Exploring New Activities
E-Mobility and Telecommunications: Exploring Opportunities in New Activities in the EV Market and Fibre Cable Business Technology Rationale Key Figures E-Mobility Run-rate • Spearhead adoption of Electric Vehicles in Greece ~€50m EBITDA target by • Become leading charge point and EV service 2030 pro
Slide 28: Our Sustainability Strategy Focused on 3 Pillars
Our Sustainability Strategy Focused on 3 Pillars, also Contributing to Sustainable Development Goals PPC Vision To transform into an economically and environmentally sustainable, modern, digital company, achieving a leading position in the renewable energy industry, while maintaining the role of a v
Slide 29: Net Zero Ambition and Emissions Reduction Commitments
Net Zero Ambition and Emissions Reduction Commitments in Line with SBTi 1.5 οC Trajectory Requirements Scope 1 and 2 emissions targets Scope 1 and 3 (Category 3) emissions targets Scope 3 emissions targets 20 0,65 19,01 17,22 0,58 16 -74% -98% -74% -98% -42% -90% 12 8 0,17 0,15 3,82 4,35 3,29 4 1,91
Slide 30: PPC Financial Plan and Targets
Konstantinos Alexandridis CFO 4 PPC Financial Plan and Targets Capital Markets Day | January 2024
Slide 31: Strong Earnings Growth Expected over 2024-2026
Strong Earnings Growth Expected over 2024-2026 Uplift Driven by Increase in RES and Distribution Segment Contribution EBITDA Evolution (€bn) Net Income Evolution (€bn) Key Highlights 39% 44% 2,3 0.7 - 0.8 Accelerated Green Energy portfolio growth with 44% share 1,7 of RES to be achieved in 1,5 2026
Slide 32: EBITDA Growth Mainly Driven by Integrated Margin
EBITDA Growth Mainly Driven by Integrated Margin EBITDA (€bn) Key Highlights +50% Integrated Margin increase due to: 0,1 2,3 0,6 • Retail maintaining strong profitability 1,5 • RES expansion • Full Lignite decommission by 2026 • Flexible Generation further improvement Distribution profitability in
Slide 33: Significant Investments in RES over 2024-2026
Significant Investments in RES over 2024-2026 2023: Significant Progress in RES Investments Plan 2024-2026: target for a total € 9 bn plan - FCF Expected to Improve from 2028 Onwards Post Major RES Investments Investments Evolution (€bn) Capex Split By Segment (2024-2026) 8% 26% 37% 39% 49% 46% Tele
Slide 34: Returns of Current Investment Decisions in RES
Returns of Current Investment Decisions in RES Above Planned Targets Investment Discipline Throughout the Period Since Last CMD Unlevered IRRs 2021-2023 Key Highlights Y Axis Returns 12% Average return at 8.7% (unlevered IRR) for the projects 9% 8% More than 200bps spread above WACC 6% 6% Vertic
Slide 35: Attractive Returns for PPC’s Strategic Plan
Attractive Returns for PPC’s Strategic Plan Investment Discipline and Attractive Returns on Capex Invested Throughout the Plan Unlevered IRR Targets for Capex Plan Key Highlights Expected average return with a spread above WACC by at least 150 bps for the 11-14% €9.0bn of identified capex pipeline
Slide 36: Funded Primarily by FFO and to a Lesser Extent by Debt
Funded Primarily by FFO and to a Lesser Extent by Debt Sources and Uses of Funds (2024-2026) (€bn) Key Highlights ~9 Dividends FFO of ~€5bn include: 0,7 0,4 • EBITDA: ~€6bn 0,4 0,7 • Δ in WC: ~€0.3bn 1,1 ~5 • Net Fin. Exp and Tax: ~€(1)bn Net CAPEX 2,0 ~4 The total investment plan is expected to b
Slide 37: Ample Funding Options and Balanced Debt Portfolio
Ample Funding Options and Balanced Debt Portfolio Funding Strategy Options Debt / Liquidity Overview 2026E Fixed Rate ~4 Expressed 50% Funding Alternatives 0.9 Interest Fixed / Floating Rate A. Supranationals >€1bn Debt (at PPC SA level) Floating Rate 2.0 Breakdown 50% B. Non recourse >€0.6bn projec
Slide 38: Maintain Discipline in our Financial Policy
Maintain Discipline in our Financial Policy Financial Policy Today Tomorrow 3.0-3.5x 2,3x Net Leverage (ND/EBITDA) PF 20231 2026E Credit Targeting investment grade Rating rating metrics in the period 2027-2030 BB- BB- 35-55% 35% Dividend Reinstatement of dividends from 2024 Payout onwards 1 20232 20
Slide 39: Final Remarks and Conclusions
Georgios Stassis Chairman & CEO 5 Final Remarks and Conclusions Capital Markets Day | January 2024
Slide 40: Building a Leading SEE Clean Utility and Critical Infrastructure Player
Building a Leading SEE Clean Utility and Critical €9bn Investments Infrastructure Player 2024-2026 35%-55% Dividend Coal Free by 2026 2024-2026 €2.3bn +18% ~13GW RES by 2030 €2.3 bn EBITDA RAB 2026 EBITDA 2024-2026 2026 8.9GW €3bn EBITDA by 2030 RES 2026 Net Zero by 2040 <3.5x Focus on Leverage Inte
Slide 41: Appendix
A Appendix Capital Markets Day | January 2024
Slide 42: ESG at the Core of Our Corporate Strategy
ESG at the Core of Our Corporate Strategy Environment1 Society Governance 3x RES installed capacity excl. large hydro €7.4m support to local communities Review of the AoA3 and reformation of the Rules of Operation of PPC S.A. -1.9GW of net lignite capacity2 €1.8bn contribution to the Energ
Slide 43: ESG Ratings – Sustainability Commitments/Initiatives
ESG Ratings – Sustainability Commitments/Initiatives Rating Agency PPC Current Rating Commitments/Initiatives D Near term and net-zero Implementing an action Committed to the 10 targets submitted in plan in alignment with principles of the UN December 2023 - pending TCFD recommendations Global Compa
Slide 44: Overview of PPC’s Asset Portfolio (Greece)
Overview of PPC’s Asset Portfolio (Greece) Asset Portfolio Installed Capacity (MW) as of 31.12.2023 Lignite Power Plant Hydro Power Plant Hydro RES (100% owned) Gas-fired Power Plant 3.171 771 Oil Power Plant RES (Participation in JVs) 10,109 32 Lignite Mine Center Lignite¹ Small Hydro Power Plant O
Slide 45: Overview of PPC’s Asset Portfolio (Romania)
Overview of PPC’s Asset Portfolio (Romania) Asset Portfolio Installed Capacity (MW) as of 31.12.2023 Solar 17% Wind 597 83% 2023 Generation Mix (GWh) Solar 3% Wind 1,295 97% Electricity retail stores Photovoltaics (PV) Electricity distribution network Charging Points Wind parks (WP) Source: Company
Slide 46: Glossary
Glossary BoD Board of Directors SBTi Science Based Targets initiative CAGR Compound Annual Growth Rate SDGs Sustainable Development Goals CAPEX Capital Expenditure SEE South East Europe CCGT Combined Cycle Gas Turbine SHPP Small Hydro Power Plant CEO Chief Executive Officer SLB Sustainability Linked
Slide 47: Financial Calendar/Roadshows – IR Contacts
Financial Calendar/Roadshows – IR Contacts What’s next? Date Event Venue 25.01.2024 J.P. Morgan Greece Investment Forum 2024 New York 09.04.2024 Announcement of FY 2023 financial results Athens 16 - 17.04.2024 WOOD's EM/E NYC Conference New York 23.05.2024 Announcement of Q1 2024 financial results A
Slide 48: Slide 48