Admie Holdings Sa · ATHEX:ADMIE

Admie Holdings Sa — ADMIE (IPTO) Holding — Investor Presentation (September 2017)

53 slides from Admie Holdings Sa's investor presentation, September 2017

  1. Slide 1: ADMIE (IPTO) Holding S.A. Investor presentation September 2017

    ADMIE (IPTO) Holding S.A. Investor presentation September 2017

  2. Slide 2: Disclaimer

    Disclaimer This Presentation has been prepared by ADMIE Holding and is a presentation of general background information about ADMIE Holding S.A. and ADMIE (IPTO) S.A. provided solely for use at this Presentation. This information is summarized and is not complete, while not intended to be relied upo

  3. Slide 3: Hellenic Electricity Transmission System

    Hellenic Electricity Transmission System Transmission lines (km) 8,157 2,863 244 161 0 31 39 15 0 400kV 150kV 66kV Overhead Submarine* Underground 21 298 Substations 400/150kV Substations 150/20kV *Excludes 160km of Greece-Italy interconnection; source: ADMIE (IPTO) as at 31 Dec 2016 3

  4. Slide 4: Contents

    Contents 1 Company overview 5 Business Plan 2 Company description 6 Greek electricity market 3 Regulation 7 Appendix State Grid Corporation of China 4 Financial summary IPTO key financial items

  5. Slide 5: Company overview

    1. Company overview Natural monopoly fully unbundled in 1H’17

  6. Slide 6: 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)

  7. Slide 7: 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 of 52TWh at +2.6% yoy (LTM) Authority prioritizing asset

  8. Slide 8: ADMIE Holding S.A.

    ADMIE Holding S.A. Trading vehicle for ADMIE (IPTO) Public since June 2017 § Owner of 51% stake in “Independent Power Transmission Operator S.A.” (ADMIE/IPTO) by means of transfer by PPC and Full Ownership Unbundling as per Laws 4389/2016, 4393/2016 and EU Directive 2009/72/EC § Affiliate ADMIE (I

  9. Slide 9: Trading debut

    Trading debut 19 Jun 2017 ▪ ATHEX: ADMIE ADMIE Holding investor mix** Bloomberg: ADMIE GA Reuters: ADMr.AT 9.8% ISIN: GRS518003009 69.4% 51.1% ▪ 232,000,000 common shares 39.1% 30.6% ▪ Debut price €2.12 Implied Mcap €491.8M Hellenic Republic Institutional* Private Greek Foreign *Incl. Silchester & F

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

    ADMIE (IPTO) S.A. Greek Transmission System Operator (TSO) Financial highlights 2016: § Regulated monopoly Regulated revenues at c90% in 2016 mix €249M Regulated & other revenues § Regulated by Regulatory Authority for Energy (RAE) €152M Reported EBITDA 4yr regulatory period; 2017 WACC at 7.3% (re

  11. Slide 11: Solid cash flow generation

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

  12. Slide 12: Company description

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

  13. Slide 13: Key milestones

    Key milestones August May February by October TSO legislation Full Ownership ADMIE Holding RAE: new regulatory (4001/2011) Unbundling law est. period 2018-21 (4389/2016) 2011 2012 2014 2016 2017 March October December June ADMIE (IPTO) RAE: regulatory SGCC bid for ADMIE Holding trading est. period 2

  14. Slide 14: Full ownership unbundling

    Full ownership unbundling* PPC – prior PPC – current ADMIE (IPTO) ADMIE Holding mines mines 24% generation generation Market operator 51% 51% 49% transmission LAGIE 25% distribution distribution ADMIE Holding supply supply Hellenic Republic Hellenic Republic State Grid Free float *ITO model for Tran

  15. Slide 15: Deal-making explained

    EUR M ADMIE (IPTO) ownership mix ADMIE (IPTO) implied valuation range* Equivalent to 24% in cash 1,365.0 EV/RAB 1.1x 24% Equivalent to 25% in cash 1,182.2 EV/RAB 1.0x 51% 25% Floating 51% 964.4 Equivalent to EV/RAB 0.8x Implied EV* 1,260.4 ADMIE Holding RAB 2016 1,516.0 DES ADMIE 0 500 1,000 1,500 2

  16. Slide 16: 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

  17. Slide 17: ADMIE (IPTO) Nine BoD members and first line of management

    ADMIE (IPTO) Nine BoD members* First line of management Manos Manousakis ADMIE Holding Manos Manousakis ADMIE Chairman & CEO Chairman & CEO (IPTO) Ioannis Margaris Ex-CEO OTE Rural North & South Vice Chairman at Hellenic Telecom OTE Ioannis Kampouris Member Ioannis Margaris Vice Chairman, Chief Tech

  18. Slide 18: TSO explained

    TSO explained 1. IPTO as Transmission 2. IPTO as System Grid Operator Operator § Independent Transmission Operator § Dispatching role, market operation in compliance with EU Directive to maintain System supply/demand 2009/72; Est. under Law 4001/2011 balance with off-DAS transactions § Main Opera

  19. Slide 19: IPTO as Transmission Operator

    1 IPTO as Transmission Operator System Maintenance System structure ▪ Maintenance work ensures safe, reliable, ▪ Backbone of 3, double-circuit, 400kV efficient system operation lines ▪ System extension underway System Design & Development International Interconnections ▪ Drafting 10yr Network Develo

  20. Slide 20: Transmission lines

    Hellenic Electricity Transmission § Demand, TWh § Supply, TWh 1.1 2.2 Losses 11.0 ▪ Interconnected mainland & islands Commercial imports system in High Voltage (150kV) and 50.1 Commercial exports 42.4 extra-HV (400kV) Production Consumption ▪ Independent island systems not included (Crete, Rhodes,

  21. Slide 21: Greek electricity transmission on the map

    § 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

  22. Slide 22: TSO agenda

    TSO agenda IPTO 10Y Network Development Plan § IPTO planned 10Y investments at 2,000.0 EUR M 25.7 EUR 1.9B 3rd parties 1,500.0 § IPTO 2027 market estimates*: 996.1 § System demand toward 59-64TWh 1,000.0 55.7 IPTO § Growth at 1.5% to 2.3% CAGR 500.0 921.0 § 5x RES capacity connected last 10Y, 0

  23. Slide 23: IPTO Business Plan

    IPTO Business Plan § Longer-term drivers**: § Scheduled 5Y investments at ca. €1B* § New Aegean Sea island interconnection § System extension underway (Eastern § Renewables up to 10GW new capacity Macedonia & Thrace; new 400kV line in § RES target at 85-100% of generation Peloponnisos; interco

  24. Slide 24: IPTO as System Operator and market operation

    2 IPTO as System Operator Transaction flows System operation Producers / Imports Market operator LAGIE ▪ Dispatch & management of electricity Energy payables Energy payables flows in system, ensure production & to producers via IPTO to LAGIE via IPTO demand continually balance § Imbalances § RES I

  25. Slide 25: Regulation

    3. Regulation Regulatory Authority for Energy (RAE) independent body

  26. Slide 26: Regulation

    EUR M Regulation 4yr period 2018-21 supersedes 2015-17 Regulatory overview ADMIE (IPTO) Allowed Revenue buildout 300.0 ▪ Regulated Asset Based (RAB) 256.8 254.7 250.2 261.0 Maintenance & development investments 250.0 Allowed Revenue ▪ Allowed rate of return/WACC 200.0 118.8 116.7 113.7 126.2 Allowed

  27. Slide 27: Regulatory Period Four years

    1 Regulatory Period Four years Regulated Asset Based Undepreciated employed capital + maintenance/ (RAB) development capex/WiP + working capital - disposals - subsidies Allowed Revenue (AR) Operator's Allowed Revenue In real terms for each year AR = O + Dep + R O annual operating costs Dep annual de

  28. Slide 28: Prior regulatory period 2015-17

    2 EUR million 2015 2016 2017 RAB 1,372.4 1,516.0 1,729.0 x WACC (real, pre-tax) 8.5% 7.5% 7.3% = Allowed remuneration 116.7 113.7 126.2 + Authorized OPEX 82.0 81.1 80.1 + Regulatory Depreciation 56.0 55.4 54.7 = Allowed revenue 254.7 250.2 261.0 Prior regulatory period 2015-17; visible & predictable

  29. Slide 29: IPTO financial summary

    4. IPTO financial summary Track record on cash generation

  30. Slide 30: IPTO summary

    EUR M IPTO summary A period of under-investment Prior Regulated Asset & Return ADMIE (IPTO) regulatory period 2015-17 2,000.0 8.5% 8.5% 9.0% 7.5% 8.0% 7.3% real 2017 6.5% 8.7% nominal 9.9% 7.0% 1,500.0 7.3% 6.0% 5.0% 7.5% real 1,000.0 2016 6.5% 8.7% nominal 9.8% 1,729.0 4.0% 1,397.5 1,516.0 1,372.4

  31. Slide 31: Regulated revenues and EBITDA affected by lower system rent

    EUR M ADMIE (IPTO) Turnover** ADMIE (IPTO) EBITDA ladder 2015-16 400.0 154.8 152.0 350.0 17.8 300.0 39.1 71.9 17.6 50.9 6.4 23.5 5.1 250.0 19.4 18.5 18.1 200.0 -14.2 150.0 -1.3 -0.7 268.5 252.0 242.3 239.7 225.5 -1.0 100.0 -3.0 -0.3 50.0 EBITDA 2015 System rent 3rd party sales Other revenues* Person

  32. Slide 32: EBITDA affected by system rent and provisions

    EUR M ADMIE (IPTO) EBITDA ADMIE (IPTO) Provision total 200.0 70.0% 82.8 20.8 0.0 25.1 7.3 61.1% 58.8% 58.5% 180.0 0.9 60.0% 160.0 50.2% 82.0 140.0 50.0% 120.0 36.5% 40.0% 100.0 174.5 183.8 30.0% 1.7 80.0 154.8 29.5 25.1 152.0 19.0 7.3 60.0 118.7 20.0% 2.3 40.0 10.0% -31.7 20.0 0.0 0.0% 2012 2013 201

  33. Slide 33: Continued cost control and solid EBITDA cash conversion

    EUR M ADMIE (IPTO) Operating Expenses ADMIE (IPTO) EBITDA cash conversion 280.0 260.0 236.1 237.8 240.0 63.3 221.1 23.7 207.4 217.5 220.0 66.4 65.5 117.4 200.0 180.0 Total 160.0 provisions, D&A 140.0 net 174.5 183.8 120.0 3rd party 154.8 152.0 100.0 costs 118.7 80.0 Other 60.0 costs 40.0 Personnel 2

  34. Slide 34: Net profit/(loss)

    EUR M ADMIE (IPTO) Net profit/(loss) ADMIE (IPTO) Net profit ladder 2015-16 35.5 7.6 70.0 -2.8 -1.5 -3.6 55.9 35.5 26.3 38.0 -38.0 -2.7 D&A Net profit 2015 Financials, net Tax on dividend Net loss 2016 EBITDA Tax -2.7 2012 2013 2014 2015 2016 Net profit/(loss) Tax on dividend Taxes/Provisions/Impair

  35. Slide 35: Network investment and cash dividends in focus

    EUR M ADMIE (IPTO)ADMIE (IPTO) Investments Investments ADMIE (IPTO) Dividends EUR m 138.6 142.1 39.1 137.1 92.9 35.0 92.4 83.7 80.6 19.0 17.8 8.5 17.8 1.1 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Capex Subsidies Dividend paid Special dividend to PPC Network investment & cash dividends in fo

  36. Slide 36: Balance sheet inflated by pass-through revenues

    EUR M ADMIE (IPTO) Asset side ADMIE (IPTO) Liability side 3,000 3,000 294 Cash & Equiv. "Market" 2,500 2,500 current 1,014 liabilities 2,000 943 "Market" 2,000 "TSO" current current assets liabilities 33 444 1,500 "TSO" current 1,500 Non-current assets 498 1,000 1,000 Gross debt Non-current 1,584 50

  37. Slide 37: Solid post-dividend cash generation and net debt reduction

    EUR M ADMIE (IPTO) Net Debt evolution ADMIE (IPTO) Net debt ladder 2011-2016 500.0 493.3 204.0 119.3 400.0 141.0 593.9 300.0 Gross -783.8 200.0 debt 73.9 -229.9 -104.1 -99.5 100.0 Cash adj. Dividends Net debt 2011 EBITDA 2012-16 Tax paid Subsidies Interest, net Net debt 2016 WC changes Capex Cash 0.

  38. Slide 38: IPTO Debt summary

    EUR M IPTO Debt summary 100% EUR-denominated; c85% of maturities beyond 2019 ADMIE (IPTO) Debt maturity profile* Debt maturity mix Rate mix 7.8 15.3% 25.1% 27.1% 2.3 197.1 79.8 90.0 10.0 72.9% 16.0 40.0 9.0 9.0 9.0 9.0 9.0 10.0 59.7% 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 >2026 Syndicated

  39. Slide 39: IPTO Business Plan 2017-21

    5. IPTO Business Plan 2017-21

  40. Slide 40: IPTO 5yr Business Plan

    IPTO 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* Appro

  41. Slide 41: Greek electricity market

    6. Greek electricity market Various market forces, but on linear recovery

  42. Slide 42: Greek electricity market

    Greek electricity market Market overview ▪ Gross mandatory pool (algorithm) ▪ Day Ahead Schedule (DAS) ▪ Co-optimization of energy and minimizes overall cost of meeting reserves next day demand, ensures adequate ▪ Multiple generation inputs into Pool reserves algorithm ▪ Cost Recovery Mechanism ensu

  43. Slide 43: Market thirsty for electricity

    Market thirsty for electricity Peak load (hourly demand), MW § 10GW capacity-equivalent demand 10,000 8,000 6,000 § 52TWh market demand (LTM Jun’17) 4,000 2,000 § Down from 57TWh peak in 2008 0 § 7TWh net imports (13% in supply mix) Jan-17 Mar-17 May-17 Mar-14 Mar-15 Mar-16 Jan-14 Jan-15 Jan-16

  44. Slide 44: Demand

    Demand Underlying demand trend* § Consistent growth in underlying 15.0% Cumulative demand since 2H’16 to-date 10.0% chg yoy § +3.3% yoy in 1H’17 5.0% 3.3% 0.0% -0.3% § +2.6% yoy LTM Jun’17 -5.0% § Network losses in 2017 at 12Y lows of -10.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec roughl

  45. Slide 45: Supply

    Supply Greek electricity interconnection, GWh § Total production +14.1% yoy in 1H’17 1,200 1,000 § Natural Gas & Renewables steadily 800 increasing share in supply mix 600 400 § Net imports -35.7% yoy in 1H’17, from 200 0 -8.7% yoy in ’16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Sep-16 Dec-16 Fe

  46. Slide 46: 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

  47. Slide 47: Appendix

    Appendix State Grid Corporation of China IPTO key financial items

  48. Slide 48: 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

  49. Slide 49: IPTO P&L items

    IPTO P&L items EUR million 2014 2015 2016 1H’17 System rent 242.3 239.7 225.5 121.2 Total revenues 312.6 264.6 248.6 131.9 Reversals/ (Provisions & Impairments) 0.0 -25.1 -7.3 0.5 EBITDA 183.8 154.8 152.0 92.8 As % of revenues 58.8% 58.5% 61.1% 70.3% Operating Income 130.6 93.0 88.8 60.9 Net profit/

  50. Slide 50: IPTO Balance sheet items

    IPTO Balance sheet items EUR million 2014 2015 2016 1H’17 Non-current 1,537.7 1,597.8 1,617.4 1,607.4 assets Current assets 1,089.1 1,151.6 1,237.1 1,388.7 Total Assets 2,626.8 2,749.4 2,854.5 2,996.1 Total Equity 1,028.0 1,014.0 898.1 930.3 Interest-bearing 445.1 490.2 498.1 494.9 liabilities Non-c

  51. Slide 51: IPTO Cash flow items

    IPTO Cash flow items EUR million 2014 2015 2016 1H’17 Cash from 203.5 221.1 207.5 100.2 Operations* Cash from -91.3 -120.8 -61.5 -27.1 Investments** Interest, net -29.6 -31.2 -30.6 -18.8 New debt, net 5.9 35.9 8.0 0.0 Dividend paid -19.0 -35.0 -17.8 -92.9 Change in 69.5 70.1 105.7 -38.6 Cash *Net of

  52. Slide 52: IPTO Free cash flow

    IPTO Free cash flow EUR million 2014 2015 2016 1H’17 EBITDA 183.8 154.8 152.0 92.8 WC, Provisions 23.7 66.4 65.5 64.6 & Other Tax paid -3.9 0.0 -10.0 -57.1 Interest, net -29.6 -31.2 -30.6 -18.8 Cash Flow from 174.0 190.0 177.0 81.4 Operations Subsidies 1.1 17.8 80.6 0.0 Capex -92.4 -138.6 -142.1 -27

  53. Slide 53: 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 53

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