Slide 1: 9M08 Results
9MO8 Results November 6, 2008
Slide 2: EBITDA: €2,370m, +16% YoY
EBITDA: €2,370m, +16% YoY Generation & supply Iberia: Stable performance associated to PPA/CMEC and hedging policy Regulated networks: Positive impact from higher efficiency and previous years’ adjustments Wind power: Major growth driver, 52% increase of gross capacity, 119% output increase YoY Braz
Slide 3: Net profit of €940m: +41% YoY; ex-items +7%
Net profit of €940m: +41% YoY; ex-items: +7% YoY to €714m Average cost of debt increased by 10bp: from 5.6% in 9M07 to 5.7% in 9M08 Expansion capex: €1.7bn in 9M08 vs. €0.8bn in 9M07 EDP Renováveis IPO: €1.6bn cash proceeds for 22.5% of EDPR capital Regulatory receivables increased from €0.7bn in De
Slide 4: Net profit +41% YoY to €940m; 7% increase ex-items
Net profit +41% YoY to €940m; 7% increase YoY ex-items (€ million) 9M07 9M08 % Change Gross Profit 3,434 3,681 +7% Operating Costs 1,385 1,311 -5% EBITDA 2,049 2,370 +16% EBIT 1,276 1,465 +15% Net Financial Costs, Capital Gains & Other (260) (182) +30% Net Profit 665 940 +41% Capex 1,341 2,171 +62%
Slide 5: Ex-items, adjusted net profit increased 7% YoY to €714m
! " #$ "! €m +41% 46 940 405 +7% 49 -76 714 -198 665 Reported Adj. Net Turbogás Discontinued BCP/SNC EDPR IPO Others* Reported Net Profit Profit 9M08 and Potugen Oper. impairments capital gain Net Profit 9M07 Capital Gain Enersul 9M08 Ex-items, adjusted net profit increased 7% YoY to €714m * Include
Slide 6: EBITDA growth driven by increase of installed capacity and higher efficiency
#%!&'( % ) * EBITDA Breakdown EBITDA breakdown (€ million) 9M07 9M08 % Chg. ∆ Regulated Brazil Networks Iberia 19% Generation & Supply Iberia 897 901 +0.5% +4 29% 27% Liberalized Wind 147 307 +109% +160 19% Gas Iberia Regulated Networks Iberia 584 704 +21% +120 2% 2% Brazil 447 454 +2% +7 Liberalize
Slide 7: Generation & Supply Iberia: EBITDA +0.5% YoY to €901m
+ , - "! EBITDA +0.5% YoY to €901m LT Contracted Generation EBITDA +7% YoY: Commissioning of Sines desox facilities Liberalized Generation: Good performance in Portugal, margins’ deterioration in Spain Start up of two new CCGT groups: Castejón 3 (Jan-08) and Soto 4 (Sep-08) Sales to final clients re
Slide 8: Stable cash flow; Positive impact from Sines environmental investments
.& / + 0 1 #%!&'(2 • Sines Desox: €196m remunerated at 8.5% ROA real (€ million) pre-taxes; investment payback 9M07 9M08 % Chg. until Dec-17; 50% commissioned in Jul-07, 50% in Jul-08; EBITDA 610 656 +7% • Tunes: 165MW gasoil plant Non Recurrent 2 41 which PPA terminated in Dec-07 EBITDA Recurrent 6
Slide 9: Growth in Portugal, fixing of selling prices and fuel costs in Spain
. + , - " 03 1 #%!&'(2 Generation & Wholesale Clients & Wholesale (energy sources) (energy sold) Variable Cost Selling Price €/MWh €/MWh 48.6 20.1 20.1 68.6 Wholesale 0,4 Forward Market Market 5,2 (€m) 9M08 Chg. Hydro 0,9 8,1 Wholesale Spot Liberalized Gross Profit: Nuclear 0,9 Market Generation & S
Slide 10: Wind: EBITDA growth of +109% YoY to €307m
4 5 * EBITDA growth of +109% YoY to €307m Gross Installed capacity: +14% or +515MW over the last 9 months to 4,155 MW Output +119% YoY; load factors: 25% in Europe, 31% in USA - premium quality assets Average selling price in Spain: +30% to €99.4/MWh based on a €64.4/MWh average pool price Capacity
Slide 11: Installed Wind Capacity, Output and EBITDA
4 5 * 0361 #%!&'(2 Installed Wind Capacity (EBITDA) Wind Power Output EBITDA MW GWh (€ million) 109% 307 65% 119% 3,502 5,353 91 3,237 147 7 2.123 2,450 216 140 9M07 9M08 9M07 9M08 9M07 9M08 Europe USA Wind Average Tariffs Total Opex/ Average MW (€/MWh) (€ th. annualized) 19% EBITDA growth supported
Slide 12: Regulated networks: EBITDA growth of +21% YoY to €704m
# " * ) ! EBITDA growth of +21%YoY to €704m Slowdown of demand growth YoY in 9M08: no material impact on financials Positive impact on EBITDA from non-recurrent tariff recoveries in electricity distribution Portugal Controllable operating costs: +3%YoY; Continued efficiency improvement Regulatory re
Slide 13: Electricity distribution Portugal: Positive impact from tariff recoveries
# " * ) ! 0 1 #%!&'(2 Regulated Energy Networks EBITDA Breakdown EBITDA Breakdown 9M08 Electricity Gas Distribution (€ million) 9M07 9M08 Chg. ∆ Portugal Distribution Spain 10% 3% Electricity Distribution Portugal * 401 520 30% +119 Gas Regulated Spain Electricity Distribution Spain 74 68 14% -8% -6
Slide 14: Brazil: EBITDA increased 2% YoY to €454m
% 7 EBITDA increased 2% YoY to €454m Asset swap: Monthly accounts Sep-08 already include 100% of Lajeado, do not include Enersul Distribution: Lower non-recurrent revenues from tariff receivables, growth of recurrent EBITDA Generation: one month of 100% stake in Lajeado, positive impact from high sp
Slide 15: EBITDA Distribution and Generation in Brazil
% 7 03 1 #%!&'(2 EBITDA Distribution Bandeirante + Escelsa (€m) EBITDA Generation (€m) Tariffs Recovery and other non-recurrent Normalized EBITDA 39% 293 99 221 12 164 194 209 118 9M07 9M08 9M07 9M08 Employees/TWh 232 214 Capacity MW 1,043 1,696 Opex / MWh (R$/MWh) 29.1 27.3 Electricity Sold (GWh) 4
Slide 16: Net profit +41% YoY to €940m; 7% increase ex-items
Net profit +41% YoY to €940m; 7% increase YoY ex-items (€ million) 9M07 9M08 % Change Gross Profit 3,434 3,681 +7% Operating Costs 1,385 1,311 -5% EBITDA 2,049 2,370 +16% EBIT 1,276 1,465 +15% Net Financial Costs, Capital Gains & Other (260) (182) +30% Net Profit 665 940 +41% Capex 1,341 2,171 +62%
Slide 17: Improved efficiency on the back of successful costs control programs
#'5 / 8 / Controllable Operating Costs/Gross Profit ** -4.1% 29.6% 28.4% 9M07 9M08 Improved efficiency on the back of successful costs control programs * Operating costs excluding HR restructuring costs * Operating costs excluding HR restructuring costs; Gross Profit adjusted to include PTCs revenue
Slide 18: Improved efficiency on the back of successful costs control programs
#'5 / 8 / Controllable Operating Costs* – EDP Group Controllable Operating Costs/Gross Profit ** -4.1% +3.9% 1,016 1,056 EDP 40 53 Renováveis 29.6% 28.4% EDP (Ex EDP 977 1,003 Renováveis) 9M07 9M08 9M07 9M08 Improved efficiency on the back of successful costs control programs * Custos operacionais e
Slide 19: Regulated and LT contracted activities: 79% of capex
/ / $ Regulated and LT contracted activities: 79% of capex; expansion capex: 76% of total EDP Capex: 9M08 vs. 9M07 Capex Breakdown (€ million) 9M07 9M08 % Chg. Regulated Networks Iberia Expansion 819 1,652 102% 10% Maintenance 523 519 -1% Wind Brazil 56% Total EDP 1,341 2,171 62% 10% Generation & Su
Slide 20: Higher net financial costs due to non-recurrent items and increase of net debt
(€ million) 9M07 9M08 % Chg. Net financial interest (372) (516) 39% • 39% increase of net financial interest due to (1) 30% increase in Investment income 36 5 -87% average gross debt (2) 12 bps Net foreign exchange differences 16 (3.7) - increase in average cost of debt Other financials 23 (177) - •
Slide 21: EBITDA +16% YoY, net profit ex-items +7% YoY
/ EBITDA +16% YoY, net profit ex-items +7%YoY Stable operating free cash flow: High weight of regulated and LT contracted activities Net debt increase driven by doubling of expansion capex and +€0.7bn of regulatory receivables New generation capacity: CCGTs: 800MW commissioned in 2008, further 800MW
Slide 22: edp feel our energy
&) edp feel our energy