Admie Holdings Sa · ATHEX:ADMIE

Admie Holdings Sa — ADMIE (IPTO) Holding — WOOD & Co 6th Winter Emerging Europe Conference, Prague, December 2017

39 slides from Admie Holdings Sa's conference presentation, December 2017

  1. Slide 1: ADMIE (IPTO) Holding S.A.

    ADMIE (IPTO) Holding S.A. WOOD & Co 6th Winter Emerging Europe Conference, Prague December 2017

  2. Slide 2: Disclaimer

    Disclaimer This document contains forward-looking statements that involve risks and uncertainties. These statements may generally, but not always, be identified by the use of words such as “outlook”, “guidance”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “target” and similar expressions to

  3. Slide 3: Contents

    Contents 1 ADMIE Holding & IPTO overview 2 TSO description & regulation 3 IPTO Business Plan 2017-2021 4 IPTO financial summary 5 Appendix

  4. Slide 4: Owned and maintained High-Voltage lines across Greece

    11,500km Owned and maintained High-Voltage lines across Greece 11,000km the distance between Lisbon, Portugal and Hong Kong, China €1.52B Regulated Asset Base* €1.05B Cumulative 5yr Cash from Operations* *As at 31 Dec 2016; source: ADMIE (IPTO)

  5. Slide 5: Investment proposition

    Investment proposition § Natural monopoly in Greece § Growth in the regulated asset base 11,500km of HV transmission lines Getting back to RAB growth, 2017 to 2021 § Recovery in domestic demand § Rational regulatory environment Consumption >52TWh LTM at +3.2% yoy Independent authority prioritizi

  6. Slide 6: Overview

    1. Overview ADMIE Holding vehicle for natural monopoly ADMIE (IPTO)

  7. Slide 7: ADMIE Holding S.A.

    ADMIE Holding S.A. ▪ ATHEX: ADMIE ADMIE (IPTO) ADMIE Holding** Bloomberg: ADMIE GA Reuters: ADMr.AT 10.8% 24% 70.8% ▪ 232,000,000 common shares 51% 51.1% 38.1% 29.2% § Owner of 51% stake in 25% “Independent Power Transmission Operator ADMIE Holding Hellenic Republic S.A.” (ADMIE/IPTO) Hellenic Repu

  8. Slide 8: Key milestones

    Key milestones August May February pending 2H’18 TSO legislation Full Ownership ADMIE Holding RAE: new regulatory Crete (4001/2011) Unbundling law est. review 2018-2021 interconnection (4389/2016) project kick off 2011 2012 2016 2017 2018 March December June 1H’18 ADMIE (IPTO) SGCC bid for ADMIE Hol

  9. Slide 9: Corporate governance

    Corporate governance Shareholder agreement in place ADMIE Holding ADMIE (IPTO) ▪ AGM appoints Chairman & CEO ▪ Hellenic Republic (HR) Proposes Chairman & CEO ▪ BoD: 5 members; ▪ State Grid Corp. of China (SGCC) 2 independent, 3 non-executive Approves Chairman & CEO; appoints Deputy CEO, CFO ▪ ADMIE

  10. Slide 10: ADMIE (IPTO) S.A.

    ADMIE (IPTO) S.A. Greek Transmission System Operator (TSO) Financial highlights 2016 Transmission lines (km) 8,157 €249M Regulated & other revenues €152M Reported EBITDA 2,863 244 161 31 39 15 €204M Net debt 400kV Overhead 150kV Submarine* 66kV Underground *Excludes 160km of Greece-Italy interconnec

  11. Slide 11: Transmission outlook

    Transmission outlook System growth themes PSOs Reduce Public Service Obligations worth elimination €1B via interconnection to mainland RES Integrate >5GW new RES capacity growth (wind, solar, hydro, bio) System Improve system stability by broadening stability supply sources and geography Environment

  12. Slide 12: Investments Operations: 5yr history

    EUR M 5yr history Solid cash flow generation ▪ Cumulative Cash Flow from IPTO Cash ladder 2011-16 Operations €1.05B 1,046.1 ▪ Cumulative Capex €600M Gross of subsidies -494.4 135.0 -92.9* 294.2 -141.0 ▪ c50% Free Cash Flow payout* 21.6 -153.8 -119.3 Post-interest in 2012-16 Cash 2011-end Operations

  13. Slide 13: 5yr Business Plan

    5yr Business Plan EUR million 2016 2017 2021 Regulated RAE: RAE: 1,516.0 1,729.0 Asset Base (RAB) new regulatory period Investments Approximately €1 billion (System & Users) 142.1 cumulative 5yr Improvement from EBITDA 152.0 2016 levels Improvement from Net profit/(loss) -2.7 2016 levels* Approximat

  14. Slide 14: TSO description

    2. TSO description 6yrs of legal unbundling, 1st year of ownership unbundling

  15. Slide 15: Transmission lines 11,000km overhead; 500km submarine & underground

    Hellenic Electricity Transmission § 10GW capacity-equivalent demand § 52TWh market demand (LTM Sep’17) ▪ Interconnected Greek mainland & § Down from 57TWh peak in 2008 islands system in High Voltage (150kV) and extra-HV (400kV) § Recovery at +2.7% yoy in 9M’17 § Back to 2010 levels ▪ Backbone o

  16. Slide 16: Greek electricity transmission on the map; cross-border trade

    § Greek electricity transmission on the map § Stands out on cross-border trade Pan-European top-10 on transmission Top-5 on net import balance lines length* -60.0 -50.0 -40.0 -30.0 -20.0 -10.0 0.0 10.0 20.0 30.0 40.0 France Italy Italy Finland Spain Hungary Germany Greece 8.8TWh Sweden Austria Bul

  17. Slide 17: Low share of transmission in electricity bills, set to replace PSOs

    Greek household electricity bill mix Greek LV/MV business electricity bill mix 0% 0% 13% 13% 16% 15% Other charges Other charges 14% 15% 10% 10% 4% 5% Renewables Renewables 13% 13% 10% levy 23% levy 3% 3% 3% PSOs PSOs 5% Distribution Distribution 54% 55% Transmission 58% Transmission 47% Generation

  18. Slide 18: Market thirsty for electricity

    Underlying demand Market thirsty for electricity 70,000 GWh 65,000 2016-27 CAGR +2.3% +1.9% +1.5% 60,000 § IPTO 2027 market estimates**: 55,000 52,247* § System demand toward 59-64TWh 50,000 45,000 § Growth at 1.5% to 2.3% CAGR 40,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Ba

  19. Slide 19: 10Y Network Development Plan selected highlights worth €1.4B

    Top 5 Projects Works commencing prior 2018-end EUR million Commissioning 2017-2026 1 Peloponnisos 2018 80 (First 400kV leg) Cycladic islands 2018/ 2 interconnection 2022 175 1 4 Crete interconnection 3 (Phase I) 2020 320 2 Peloponnisos 4 (Second 400kV leg) 2021 110 400 kV 3 5 Crete interconnection 2

  20. Slide 20: Selected projects: Cycladic islands, Crete

    § Selected projects Cycladic islands Crete Interconnection; RES 200-250MW feed-in Interconnection Phase I Commissioning 2018 Phase I Commissioning 2020 Lavrio-Syros (150kV), Paros (150kV), Mykonos (150kV), Tinos (150kV) Peloponnisos-Crete (AC 150kV; 120km) Substations (Syros, Paros, Mykonos) Variou

  21. Slide 21: Regulation

    Regulation 4yr period 2018-21 to supersede 2015-17 Regulatory overview Prior Regulated Asset & Return 8.5% 8.5% ▪ Regulated Asset Based (RAB) 2,000.0 7.5% 7.3% 9.0% 8.0% Maintenance & development investments + 7.0% 1,500.0 Working Capital; no impairment/revaluation 6.0% 5.0% ▪ Allowed rate of return

  22. Slide 22: What participants are saying

    What participants are saying [IPTO] completes the The committee set up by RAE […] interconnection of Cyclades and and the proposals seem to indicate commences the interconnection that other islands in Cyclades […], of Crete, first with the as well as most of the larger islands Peloponnese in 2020 an

  23. Slide 23: IPTO Business Plan 2017-21

    3. IPTO Business Plan 2017-21 Detailed roadmap in the new regulatory period

  24. Slide 24: Action plan

    Action plan New management since mid-’17 Revamp Refinance Grow 1 Revamp organization Well-prepared 2 Refinance & formulate funding strategy plan with visible 3 Execute on transmission growth earnings impact Source: ADMIE (IPTO) 24

  25. Slide 25: €1B 5yr investment plan

    €1B 5yr investment plan Leaning toward islands; Cyclades & Crete skewed in ’19-’21 Substations Cumulative Capex mix 2017-21 Transformers Transmission Interconnection 5% Cyclades 15% Other 18% Crete Southern Gr Cyclades 19% Various Crete 45% Southern Greece Users Various Users Source: ADMIE (IPTO) 25

  26. Slide 26: Transmission System and IPTO Cumulative 5yr Capex

    EUR M Transmission System1 IPTO Cumulative 5yr Capex2 at least 2% nearly 2x ca.1B 51 594 Market (TWh) CAGR Demand 2021 Capex 2012-16* Capex 2017-21* IPTO Regulatory EBITDA IPTO Net profit ladder3 D&A Financials OPEX net RAB -OPEX -D&A -Tax growth & re- muneration EBITDA growth ca. Allowed Revenue 10

  27. Slide 27: Fully funded investment plan & dividend payments

    IPTO Business Plan 2017-21 Existing Cash >15% Dividend4 >15% New debt2 >15% Interest <15% Cash flow1 c70% Capex3 c70% Sources Uses Fully funded investment plan & dividend payments 1Post-tax/working capital; 2net of amortization; 3net of disposals/subsidies; 4in line with stated policy; source: ADMIE

  28. Slide 28: Secured dividend growth; unchanged payout as baseline

    IPTO Cash flow ladder 2017-21 Fully funded investment plan Fully funded dividend Disposals & -Tax Subsidies New debt, -Interest net CF from -Capex Operations* ca. €1B Existing -Dividend cash CF Tax Interest New debt, Disposals & Capex Existing Dividend Operations* net Subsidies cash Secured dividend

  29. Slide 29: ADMIE Holding

    EUR M ADMIE Holding Financial highlights EUR million 1H’17 ADMIE Holding dividend outlook* Income from Affiliate 9.0 over 90% pass- through EBITDA 8.2 51% 25.5 50% 50.0 Operating Income 8.2 payout 49% ca. Net profit 8.2 100.0 Equity 500.0 IPTO Net Dividend ADMIE ADMIE Net debt 0.5 profit 2021 stake

  30. Slide 30: IPTO financials

    4. IPTO financials Track record on cash generation

  31. Slide 31: IPTO summary

    EUR M IPTO summary A period of under-investment, but solid cash conversion IPTO Turnover* IPTO EBITDA cash conversion 236.1 237.8 221.1 217.5 39.1 71.9 207.4 17.6 50.9 6.4 63.3 23.5 5.1 23.7 178.0 19.4 18.5 117.4 66.4 65.5 18.1 3.9 39.9 14.4 268.5 252.0 183.8 242.3 239.7 225.5 174.5 154.8 152.0 180.

  32. Slide 32: Solid Net debt reduction; adequate liquidity profile

    EUR M IPTO Net Debt evolution IPTO Debt maturity profile* 500 7.8 450 400 350 300 250 Gross 2.3 197.1 debt 79.8 200 150 90.0 100 10.0 40.0 16.0 9.0 9.0 9.0 9.0 9.0 50 Cash 10.0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 >2026 0 2011 2012 2013 2014 2015 2016 9M'17 Syndicated bond EIB Solid Net

  33. Slide 33: Appendix

    Appendix State Grid Corporation of China Greek electricity market IPTO key financial items

  34. Slide 34: SGCC footprint & key economic interests

    SGCC footprint & key economic interests § State Grid Corp. of China (SGCC) World’s largest electric utility 900k km transmission lines in China CDP Reti ADMIE SGCC Global top2 Corp. on revenues* § ADMIE (IPTO) in Greece REN 24% in 2017 TransCo § CDP Reti (TERNA S.p.A.**) in Italy 35% in 2014 § R

  35. Slide 35: Greek electricity market

    Greek electricity market Market overview Demand/Supply balance, TWh ▪ Gross mandatory pool (algorithm) 1.1 ▪ Multiple generation inputs into Pool 2.2 Losses Commercial 11.0 ▪ Central dispatch of generation imports ▪ Day Ahead Schedule (DAS) to Commercial exports ensure adequate reserves 50.1 42.4 Pr

  36. Slide 36: Greek electricity market demand trend & supply mix

    § Greek electricity market demand trend & supply mix Underlying demand trend** Supply mix Net 15.0% 100% imports Cumulative 90% Off-grid 10.0% chg yoy 80% 70% Other 5.0% 60% 2.7% 0.0% -0.3% 50% RES 40% -5.0% 30% Hydro 20% -10.0% 10% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec NatGas 0% 2007 200

  37. Slide 37: Greece swiftly catching up with European markets on Renewables

    § Greece swiftly catching up with European markets on Renewables Top-15 Renewable Leading Solar energy Top-10 Wind energy generation share* generation share** generation share 0% 20% 40% 60% 80% 100% 0% 2% 4% 6% 8% 10% 0% 10% 20% 30% 40% 50% Norway Lithuania Denmark Austria Greece 9% Lithuania Croa

  38. Slide 38: IPTO selected items

    EUR M IPTO selected items Balance sheet 2015 2016 6M’17 P&L 2015 2016 1H’17 System rent 239.7 225.5 121.2 Non-current assets 1,597.8 1,617.4 1,607.4 Total revenues 264.6 248.6 131.9 Current assets 1,151.6 1,237.1 1,388.7 Reversals/(Provisions -25.1 -7.3 0.5 Of which: Cash & equiv. 188.4 294.1 255.4

  39. Slide 39: Contact

    Contact For additional information please contact ADMIE Holding Investor Relations: ▪ Tel: +30 210 3636 936 ▪ E-mail: office@admieholding.gr or visit: www.admieholding.gr 39

ADMIE (IPTO) Holding — WOOD & Co 6th Winter Emerging Europe Conference, Prague, December 2017 on 6ix