Naturgy Energy Group, S.a. · BME:NTGY
Naturgy Energy — H1 2023 Earnings Presentation
35 slides from Naturgy Energy's earnings presentation, Jul 24, 2023
Slide 1: Results 1H 23
Results 24 July 2023 1H 23 1
Slide 2: Results agenda
1H 23 Results 1. Scenario 2. Consolidated results 3. Performance by business unit 4. Summary of 1H23 5. Strategic Plan 2021-25 review 6. Appendix 2
Slide 3: 1. Scenario
1H 23 1. Scenario Naturgy ” Toansfrming Together
Slide 4: Naturgy's energy demand evolution (TWh)
1. Scenario I I I I I 1H 23 Naturgy’s energy demand evolution (TWh) Spain Mexico Brazil Chile Mixed demand 12% 2% 28 34% 2% across markets 96 84 with declines 23 24 18 mainly in Spain and Brazil 5 5 1H22 1H23 1H22 1H23 1H22 1H23 1H22 1H23 Argentina Spain Panama Argentina 10% 7% 6% 4% 48 44 13 12 3 3
Slide 5: Energy markets evolution
1. Scenario I I I I I 1H 23 Energy markets evolution1 Brent (USD/bbl) TTF (€/MWh) Spanish electricity market (Pool) (€/MWh) Min.2 79 72 68 23 85 5 Decrease of Max.2 138 88 212 72 545 151 gas and power 26% 42% 57% 108 206 prices following 80 extraordinary 89 100 2022 58 1H22 1H23 1H22 1H23 1H22 1H23
Slide 6: FX evolution
1. Scenario I I I I I 1H 23 FX evolution1,2 Chile Brazil 4% 1% All currencies 5.56 5.48 903 871 appreciated moderately vs. EUR except ARS 1H22 1H23 1H22 1H23 Mexico Panama (USD) Argentina 11% 1% 113% 22.17 280 1.09 1.08 19.66 131 Soruce: Bloomberg 1H22 1H23 1H22 1H23 1H22 1H23 Notes: 1. Variation wi
Slide 7: 2. Consolidated results
1H 23 Results 2. Consolidated results 7
Slide 8: Key highlights
I 2. Consolidated results I I I I 1H 23 Key highlights Key figures Solid results amid EBITDA Net Income stabilization of Solid first half results energy scenario Continued Net debt reduction supported by strong cash flow generation 2,849 39% 1,045 88% Lower energy demand and decrease of energy price
Slide 9: EBITDA and Capex contribution by business unit
I 2. Consolidated results I I I I 1H 23 EBITDA and Capex contribution by business unit EBITDA Capex Markets businesses 12% 6% contributed 57% of the Group’s 8% 25% 26% EBITDA; Networks 41% and renewables €2,849m €839m represented 85% of total Capex 37% 18% 18% 8% Business unit Energy management Netw
Slide 10: Cash flow and Net debt evolution
I 2. Consolidated results I I I I 1H 23 Cash flow and Net debt evolution Cash flow Net debt Net debt 1H23 Avg. cost 3.0% 3.8% reduction of debt2 EBITDA 2,849 ND/ LTM 2.4x 1.9x supported by EBITDA Taxes 107 strong cash flow % fixed 80% 79% rated3 generation Net interest cost (250) Other non-cash item
Slide 11: 3. Performance by business unit
1H 23 Results 3. Performance by business unit 11
Slide 12: Networks Spain
I I 3. Performance by business unit I I I 1H 23 Networks Spain EBITDA Highlights By business line Lower Gas Networks Spain €411m Gas networks: lower demand due to mild remuneration Electricity temperatures and volatile gas price environment 25% of total and demand, €732m €321m coupled with lower rem
Slide 13: Networks LatAm
I I 3. Performance by business unit I I I 1H 23 Networks LatAm EBITDA Highlights By business line Chile gas Growth driven Networks LatAm €117m Chile gas: positive comparison vs. 1H22 due to by tariff Brazil gas the TGN provision registered in 1H22. Positive 18% of total updates; €529m €165m performa
Slide 14: Energy management
I I 3. Performance by business unit I I I 1H 23 Energy management EBITDA Highlights By business line LNG & Markets LNG & Markets €858m LNG & Markets: increase mainly due to Energy mgmt. increase mainly 37% of total Spain therm. gen. reappraisal of the financial hedging due to €1,096m €108m ineffecti
Slide 15: Renewable generation
I I 3. Performance by business unit I I I 1H 23 Renewable generation EBITDA Highlights By business line Higher Spain Renewables Spain: new capacity and higher production, installed 8% of total €205m notably on conventional hydro, partly offset by €235m USA capacity and -€6m lower regulated revenues
Slide 16: Supply
I I 3. Performance by business unit I I I 1H 23 Supply EBITDA Highlights Higher Supply Gas supply: slight margin improvement offset by margins, 12% of total lower sales and the transfer of customers from mainly in €348m liberalized to regulated tariffs in the residential €2,849m segment power supply
Slide 17: 4. Summary of 1H23
1H 23 Results 4. Summary of 1H23 17
Slide 18: Summary
I I I 4. Summary of 1H23 I I 1H 23 Summary 2023E EBITDA 1 Solid first half results now expected to exceed €5bn 2 Continued Net debt reduction supported by strong cash flow generation 3 Lower energy demand and decrease of energy prices after extraordinary 2022 4 Naturgy continued to play a key role i
Slide 19: 5. Strategic Plan 2021-25 review
1H 23 Results 5. Strategic Plan 2021-25 review 19
Slide 20: Strategic Plan 2018-22 delivery (€bn)
I I I I 5. SP 2021-25 review I 1H 23 Strategic Plan 2018-22 delivery (€bn) Exceeded all 2018-22 EBITDA Capex Annual opex savings Net debt Strategic Plan committed 5.0 8.1 0.7 15.1 targets 12.1 4.6 7.3 0.5 Target 2022 FY22 Cum.target 2018-22 Cum.target 2018-22 Target 2022 FY22 1 1 1 (SP 18-22) SP 18-
Slide 21: Macroeconomic and energy sector changes since July 2021
I I I I 5. SP 2021-25 review I 1H 23 Macroeconomic and energy sector changes since July 2021 Revised plan reflects macro Acceleration of energy transition (new High inflation / interest rates and and sector fiscal stimulus plans in USA & EU) uncertain economic outlook developments Regulatory changes
Slide 22: Updated scenario
I I I I 5. SP 2021-25 review I 1H 23 Updated scenario Brent1 HH1 TTF1 USD/bbl USD/MMBtu €/MWh Convergence of energy prices 7 131 101 towards 77 79 78 4 4 4 71 historical levels 3 49 55 47 39 FY21 FY22 CAL23 CAL24 CAL25 FY21 FY22 CAL23 CAL24 CAL25 FY21 FY22 CAL23 CAL24 CAL25 PVB1 Spanish electricity
Slide 23: The energy transition must balance the trilemma
I I I I 5. SP 2021-25 review I 1H 23 The energy transition must balance the trilemma Security of supply Essential role in procuring gas to the Spanish economy Naturgy will (>30% of imported gas) Take or pay risk in gas procurement contracts continue to play CCGTs increased activity / higher baseload
Slide 24: Vision / strategy remains intact
I I I I 5. SP 2021-25 review I 1H 23 Vision / strategy remains intact European and global energy sector trends Naturgy is well Gas and power infrastructure to play a key role in the energy transition positioned to Rise of renewables with gas as a key contributor support the energy Security of supply
Slide 25: Investment plan 2021-25E
I I I I 5. SP 2021-25 review I 1H 23 Investment plan 2021-25E Capex plan 2021-25E Networks Investments Other • Proactive regulatory management aligned with the 13% Networks • Automation and remote operation energy 31% • Adapting existing infrastructures to play a key role in transition and a energy
Slide 26: 2022-25E EBITDA evolution (€bn)
I I I I 5. SP 2021-25 review I 1H 23 2022-25E EBITDA evolution (€bn) Renewables growth and 0.2 0.1 5.1 5.0 - 0.3 - improved FX scenario offset (0.5) by lower gas volumes and profits Networks Markets EBITDA Networks Networks Energy Renewable Renewable Supply EBITDA FY22 Spain LatAm management generat
Slide 27: Sustainable capital allocation
I I I I 5. SP 2021-25 review I 1H 23 Sustainable capital allocation Capital allocation 2021-25E Dividend policy Strong balance sheet and cash ~€20bn Annual dividend floor revised to €1.40/sh. for flow to fund 2023-25 subject to maintaining a BBB rating 2.4 through the period attractive Debt (revised
Slide 28: Revised estimates 2025
I I I I 5. SP 2021-25 review I 1H 23 Revised estimates 2025 EBITDA Net income Capex €Bn €Bn €Bn 2025 estimates 5.1 1.8 revised 4.8 1.6 14.0 13.2 upwards Annual dividend policy revised to 2025E 2025E 2025E 2025E 2025E 2025E 1.4 €/sh. for the (SP 21-25) Revised (SP 21-25) Revised (SP 21-25) Revised pe
Slide 29: Appendix
Appendix Naturgy Transfirming
Slide 30: Alternative Performance Metrics (i/iii)
I I I I I 6. Appendix 1H 23 Alternative Performance Metrics (i/iii) Naturgy's financial disclosures contain magnitudes and metrics drafted in accordance with International Financial Reporting Standards (IFRS) and others that are based on the Group's disclosure model, referred to as Alternative Perfo
Slide 31: Alternative Performance Metrics (ii/iii)
I I I I I 6. Appendix 1H 23 Alternative Performance Metrics (ii/iii) Alternative performance Reconciliation of values Definition and terms Relevance of use metrics 30 June 2023 30 June 2022 Measure of the investment effort of each Net Investments (net CAPEX) CAPEX- Other investment receipts/(payment
Slide 32: Alternative Performance Metrics (iii/iii)
I I I I I 6. Appendix 1H 23 Alternative Performance Metrics (iii/iii) Alternative performance Reconciliation of values Definition and terms Relevance of use metrics 30 June 2023 30 June 2022 Measure of cash generation Net Free cash flow + Parent company dividends corresponding to operating and net o
Slide 33: ESG Metrics
I I I I I 6. Appendix 1H 23 ESG Metrics 1H23 1H22 Change Comments Health and safety Accidents with lost time1 units 4 3 33.3% Health and safety metrics show a small increase in accidents compared to 1H22, although within the expected range considering the Group’s LT Frequency rate2 units 0.12 0.09 3
Slide 34: Disclaimer
I I I I I 6. Appendix 1H 23 Disclaimer This document is the property of Naturgy Energy Group, S.A. (Naturgy) and has been prepared for information purposes only and contains inside information per the 2014 market abuse regulation. This communication contains forward-looking information and statement
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