Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — Investor Presentation (May 2024)
45 slides from Edp's investor presentation, May 2024
Slide 1: Investors' Presentation May 2024
INVESTORS’ PRESENTATION May 2024
Slide 2: Disclaimer
Disclaimer This document has been prepared by EDP - Energias de Portugal, S.A. (the "Company") solely Forward-looking statements include statements regarding: objectives, goals, strategies, for use at the presentation to be made on this date and its purpose is merely of informative outlook and growt
Slide 3: Global company, leader in the energy sector, present in 4 regional hubs
We are a global company, leader in the energy sector, present in 4 regional hubs throughout different stages of the value chain % Weight on EBITDA 2023 Renewables, Clients & EM North America Europe APAC ~70% Wind Solar Solar Energy onshore utility-scale DG management Wind Hydro Storage H2 Client off
Slide 4: Diversified portfolio balanced between networks, integrated Generation and Supply, and Renewables
EDP has a diversified portfolio, balanced between electricity networks, integrated Generation and Supply and Renewables Breakdown of expected Net Profit in 2024 ~35% (~€1.3 Bn) Electricity Networks Regulated Asset Base growth Regulated returns incentivizing investments ~40% Integrated Generation & S
Slide 5: Business Strategy
@edp Business Strategy
Slide 6: Leading the energy transition to create superior value
Leading the energy transition to create superior value Our commitments Key figures and targets Accelerated and sustainable growth €17 Bn 3 GW/yr 23 GW gross investment 2024-26 gross additions 2025-26 Wind & Solar capacity by 2026 ESG excellence and future-proof organization Coal free All Green Net Z
Slide 7: Downward trend in electricity forward prices in Europe since CMD
Downward trend in electricity forward prices in Europe since CMD forces a revision of our energy price assumptions for 2024-26… Decline in gas prices implying downward trend in Updated visibility on hedging position and electricity prices for 2026 in Iberia average selling prices for 2024-26 2026 fo
Slide 8: Focus on capital optimization and robustness of the balance sheet
…leading to a focus on capital optimization and robustness of the balance sheet… Deceleration of investments in 2024-261 : focus on Pursuing asset rotation strategy, targeting €7 billion top projects via a selective and disciplined criteria proceeds in 2024-2026 Gross investments 2024-261, € Bn Net
Slide 9: Fully funded plan through 2026 with BBB debt ratios
… supporting a fully funded plan through 2026 with BBB debt ratios 2024-26 Organic Sources and Uses of Funds (€ Bn) Uses of cash Sources of cash Solid credit ratios, on the back of prudent investment policy and sound organic cashflow DPS floor Dividends 2.5 2024E: €0.195 2025E: €0.195 Organic FFO/Ne
Slide 10: High financial liquidity at >€9 Bn covering refinancing needs until 2027
High financial liquidity at >€9 Bn supported by >€7bn of available credit lines, covering refinancing needs until 2027 Financial liquidity EDP consolidated debt maturity profile1 as of 1Q24, €Bn as of 1Q24, €Bn Cash & Equivalents 2.3 EDP Brasil EDP SA & EDP Finance BV and Other (% of total debt) Ava
Slide 11: Key sensitivities on net income for 2026
Key sensitivities on net income for 2026 D 2026 Net Income Impact Avg. Pool Price Spain €5/MWh ~€40m IB Hydro volume 10% ~€30m FX EUR/USD +0.10 ~€30m FX EUR/BRL +0.50 ~€30m Euribor +100bps ~€20m Investors’ Presentation 11
Slide 12: On track to be coal-free by 2025
Decarbonize On track to be coal-free by 2025, with significant steps taken this year EDP’s total electricity generation mix Promoting a Just Transition in old coal sites • Sale of 80% stake signed in Sep 20th, 2023 with a Coal Renewables Other put option for the remaining 20% • Closed in Dec-23, wit
Slide 13: Financial targets
@edp Financial targets
Slide 14: 2026 updated guidance under current market conditions
2026 updated guidance under current market conditions Recuring Net 0.9 ~1.2-1.3 ~10% Income, € Bn CAGR 2022-26 ~5.0 – 5.1 EBITDA, € Bn 4.5 ~3% ~1.6 CAGR 2022-26 Electricity Networks 1.5 ~1.0 – 1.1 Hydro, Clients & EM 0.9 Wind & Solar1 2.2 ~2.4 2022 2026 1. EDPR only (excluding Solar DG Europe and Br
Slide 15: Sustained EPS growth and a solid dividend policy with an increased floor
We are delivering superior value through sustained EPS growth and a solid dividend policy with an increased floor Dividend per share (€) Attractive dividend policy Dividend yield Payout1 5.6% 6.6% 6.6% 6.2% 4.9% 3.7% 3.9% 4.1% 4.3% €0.195 in 2024-25 2 74% 72% 90% 87% 81% 90% 91% 87% 63% €0.20 in 202
Slide 16: 1Q24 Results
1Q24 Results @edp
Slide 17: Recurring EBITDA of €1,342m, -5% YoY
Recurring EBITDA of €1,342m, -5% YoY, following the normalization of Iberian integrated margin and with an increased contribution from Networks Recurring EBITDA1 ,€m YoY growth, % ∆ YoY -5% 1,415 • Integrated business in Iberia YoY 1,342 comparison reflecting the normalization of integrated margin -
Slide 18: Generation & Supply in Iberia in 1Q24: normalization of integrated margin
Generation & Supply in Iberia in 1Q24 marked by the normalization of integrated margin, with strong hydro volumes offset by lower electricity prices Strong hydro volumes in 1Q24 mitigating Integrated EBITDA reflecting normalized integrated persistently lower prices in 1Q24 vs. previous year margin i
Slide 19: Generation & supply integrated EBITDA at €412m, -32% YoY
Generation & supply integrated EBITDA at €412m, -32% YoY following integrated margin normalization vs. extremely positive 1Q23 Hydro, Clients & EM Recurring EBITDA €m YoY growth, % Iberia 1Q23 1Q24 YoY -32% ∆ YoY 605 Hydro coefficient in Portugal, avg.=1 0.95 1.38 45% Hydro Generation, TWh 3.6 4.9 +
Slide 20: Wind & Solar EBITDA flat YoY
Wind & Solar EBITDA flat YoY: ~€58m AR gains mitigating lower generation YoY Wind & Solar Recurring EBITDA €m YoY growth, % ∆ YoY 1Q23 1Q24 YoY +1% Installed Capacity1, GW 14.8 16.5 +12% 448 454 Prod. deviation vs. exp. LT Gross -2% -2% -0 p.p. -27m Capacity Factor, % 228 Europe 255 -11% YoY Electri
Slide 21: Electricity Networks EBITDA +24%
Electricity Networks EBITDA +24% on the back of ~€76m asset rotation gain from transmission deal in Brazil Electricity Networks Recurring EBITDA €m YoY growth, % Iberia 1Q23 1Q24 YoY +24% ∆ YoY Return on RAB Portugal , % 5.56% 5.55% -2 bps 474 Return on RAB Spain, % 5.58% 5.58% 0 bps 381 135 +8m OPE
Slide 22: Net financial costs -14% YoY
Net financial costs -14% YoY impacted by lower avg. cost of debt; Lower weight of USD debt in 1Q24, in line with strategy to rebalance debt currency mix Recurring Net Financial Costs1 Avg. nominal debt by currency €m % -14 % 255 219 Decline in USD debt and higher weight of EUR debt as part of the st
Slide 23: Net debt increase driven by net expansion investments
Net debt increase driven by net expansion investments and negatively impacted by regulatory working capital Change in Net Debt € Bn 15.9 0.04 15.3 0.7 0.4 0.2 Net Debt Dec-23 Organic CF Regulatory Net Expansion FX and Other Net Debt 1Q24 Receivables Investments Net Debt/EBITDA(1) 3.3x 3.5x FFO/Net D
Slide 24: Net Profit of €368m, +20% YoY
Net Profit of €368m, +20% YoY with lower minorities in Brazil post minorities-buyout Recurring Net Profit1 Recurring Net Profit €m €m Δ YoY +20% 368 EBITDA 1,342 -73 306 D&A and Provisions 429 -3 EBIT 913 -76 Net Financial Costs 219 36 1Q23 1Q24 +135m YoY Income Taxes(2) 212 66 Below EBITDA Non-recu
Slide 25: Annex
Annex @edp
Slide 26: A way for a better tomorrow: our ESG commitments
A WAY FOR A BETTER TOMORROW All in all – our ESG commitments Ambition Goal 2023 2026 target 2030 ambition Decarbonize: for a climate-positive SBTi: Scope 1 + Scope 2, gCO2e/kWh (% vs. 2020)1 81 (-49%) 36 (-77%) 8 (-95%) world SBTi: Scope 3 , MtCO2e (% vs. 2020)1 8.1(-16%) - ~6Mn (-45%) Renewables ge
Slide 27: EDPR
EDP Renewables EDPR
Slide 28: High quality 100% renewables portfolio mostly wind onshore
High quality 100% renewables portfolio mostly wind onshore, well diversified primarily across Europe & North America and LT contracted Diversified portfolio with a solid generation profile Capacity by geography Generation by technology Focus on low risk markets: 87% of asset base in Europe & North A
Slide 29: Renewable energy growth backed by increasing demand worldwide
Renewable energy growth continues to be backed by increasing demand worldwide Regulated auctions Continuous support Supportive demand Introduction of environment and to reach EU targets from cPPAs driven by social criteria on top of pricing by 2030 sustainability targets Growing 45 GW in EDPR countr
Slide 30: Addressed 2023 deployment challenges in US solar supply chain and Colombia
Addressed 2023 deployment challenges with a clear improved positioning on US solar supply chain, while actively managing Colombia wind projects Improved positioning regarding US solar supply chain Reviewing viability of 0.5 GW wind projects in Colombia EDPR worked on several fronts to improve the ou
Slide 31: Support value creation while reviewing additions to ~3 GW/year in 2025-26
Support value creation while reviewing additions to avg. ~3 GW/ year in 2025-26 with 84% in Europe and NA on the back of a robust pipeline… Walk 2023-26 Gross Capacity Additions (GW) 2024-26 Breakdown By Geography 7 GW 8% Secured capacity ~3 ~10 ~12 42% 8% ~10 GW 2.6 4.0 42% By Technology 0.5 2.5 9%
Slide 32: Strong demand for renewables PPAs mainly from Big Tech
… with strong demand for renewables PPAs mainly from the Big Tech sector, driven by Data Centers/AI, and from regulated auctions in Europe… High visibility for Capacity to be Secured with ~1 GW of Breakdown of Capacity Secured by type capacity under negotiation worldwide ~70% with Big Tech companies
Slide 33: Stricter investment approach focused on contracted cash yields
… under a stricter investment approach for upcoming investment decisions keeping the focus on strong contracted cash yields Investment approvals over the last 6 months continue Stricter investment approach increasing our target for supporting value creation from growth in renewables future portfolio
Slide 34: Asset rotation strategy supporting a fully funded plan through 2026
Asset rotation strategy supporting a fully funded plan through 2026 Gross Investments 2024-26 AR Proceeds 2024-26 Net Investments 2024-26 (€bn) (€bn) (€bn) % Gross MW Additions 30% 45% ~6%~7% Gross OW & Other €m Investments ~12 ~16% Fin. Inv. AR 469 ~300 ~47% ~12bn Gains Asset Rotation(2) ~5 ~25% 1.
Slide 35: Generation growing at 13% CAGR, >70% contracted
Generation growing at 13% CAGR maintaining a competitive portfolio >70% contracted & protected against wholesale price volatility Expected generation split by contracting profile (status as of today; %; TWh) Merchant Generation 40-42 47-49 50-52 - Wind generation represents ~90% - Volumes mix: ~50%
Slide 36: Continue to improve efficiency in operations to reduce Core OPEX
Continue to improve efficiency in operations to reduce unitary Core OPEX Core OPEX(1)/ Avg. MW Cost strategy set to maximize efficiency and optimize costs (€k) -6% Continue with structure simplification to leverage on CAGR 2023-26 EDP & EDPR synergies 52 - O&M focused on increasing availability and
Slide 37: Cash ROIC growth in 2024-26
Cash ROIC growth in 2024-26 supported by investing through the cycle in projects with higher absolute returns Asset Base Evolution; Weight of assets under development vs assets in operation Peak of work-in-progress weight as of Dec-23 impacted by: i) Longer than expected construction periods to Asse
Slide 38: Ocean Winds: good execution of projects in UK and France
Ocean Winds: Good execution of projects under construction in UK and France, with 2 other projects in advanced development in US and Poland Most recent portfolio developments Moray West SouthCoast Wind 0.9 GW | 95% OW | COD 2025 2.4 GW | 100% OW | COD >2030 Under Construction Under Advanced Developm
Slide 39: Integrated Generation & Supply
Integrated Generation & Supply Investors’ Presentation 41 41
Slide 40: Flexible hydro generation assets capturing intra-day price volatility in Iberia
Our flexible hydro generation assets to capture value in a context of increased intra-day price volatility in Iberia… EDP hydro portfolio in Iberia Intra-day price volatility steadily increasing Prices dispersion over average daily hour in 1Q1 5.5 GW 8 TWh 200% 1Q15 1Q20 1Q23 1Q24 Installed capacity
Slide 41: Networks
Networks Investors’ Presentation 43
Slide 42: Electricity networks portfolio representing 30% of EBITDA
Electricity networks portfolio representing 30% in EBITDA with growth providing stable and low risk cashflow… EDP has significantly invested in regulated … reinforcing weight in EDP’s portfolio electricity networks over the last years… +18% +2% 2020-23 CAGR 2023-26 CAGR Networks 21 % EBITDA 0.9 1.5
Slide 43: Good prospects for improved regulatory frameworks in Iberia from 2026
…with good prospects for improved regulatory frameworks in Iberia from 2026 onwards… Iberian market with a strong rational for higher EDP with a strong asset base in Iberia investment in electricity networks RAB 1Q24 RoRAB 2024 Next regulatory period €3.0 Bn 5.5% 2026-30 Strong renewable energy pote
Slide 44: Significant investment opportunities in Brazil in Transmission and Distribution
…and significant investment opportunities in Brazil both in Transmission as well as in Distribution Growing distribution asset base in Brazil… Expanding transmission portfolio EDP São Paulo & EDP Espírito Santo RAB net of non-controlling interests, Transmission asset base, net of non-controlling int
Slide 45: IR Contacts
IR Contacts E-mail: ir@edp.com Phone +351 210 012 834 Site: www.edp.com Investor presentation 47
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