Redes Energeticas Nacionais Sa · EURONEXT:RENE
Redes Energeticas Nacionais Sa — REN - Redes Energéticas Nacionais — Investor Presentation (November 2023)
44 slides from Redes Energeticas Nacionais Sa's investor presentation, November 2023
Slide 1: Corporate Presentation November 2023
CORPORATE PRESENTATION November 2023 1
Slide 2: Key messages
Key messages Exclusive TSO in Operational Stable business Solid Strategic cycle Portugal excellence context results 2021-24 Focused in Portugal Highly efficient and Stable regulatory Strong financial REN at the core of with growth reliable player, context discipline leading to energy transition opor
Slide 3: Exclusive TSO in Portugal
Exclusive TSO in Portugal Key messages Exclusive TSO in Portugal Focused in Portugal with growth oportunities in Chile CORPORATE PRESENTATION 3
Slide 4: 70-year track record as a leading energy infrastructure operator focused in Portugal
Exclusive TSO in Portugal 70-year track record as a leading energy infrastructure operator focused in Portugal Foundation of CNE 2nd reprivatization phase 2nd reprivatization IPO of 4% of HCB (National Electricity (State Grid of China 25%; phase concluded shares Company) Oman Oil 15%) (sale of Portu
Slide 5: Exclusive TSO and 2nd largest natural gas DSO in Portugal, with international presence
Exclusive TSO in Portugal Exclusive TSO and 2nd largest natural gas DSO in Portugal, with international presence Business Portfolio Electricity Natural Gas Natural Gas Telecommunications Transmission Transmission Distribution business 9,425 km 1,375 km 6,441 km 6M€ Portugal 331M€ 113M€ 50M€ 92 km 16
Slide 6: Portugal's electricity transmission and system management activity
Exclusive TSO in Portugal Portugal’s electricity transmission and system management activity Electricity Transmission Electricity network Exclusive Transmission System Operator (TSO) Transmission of very high voltage electricity and overall technical management of the system Concession until 2057 Av
Slide 7: The only player in Portugal's natural gas transmission activity
Exclusive TSO in Portugal The only player in Portugal’s natural gas transmission activity Natural Gas Transmission Gas transmission network Exclusive TSO (concession until 2046) Transportation of high-pressure natural gas and overall technical management of the system Reception, storage and regasifi
Slide 8: Second-largest concession in the Portuguese natural gas distribution activity
Exclusive TSO in Portugal Second-largest concession in the Portuguese natural gas distribution activity Natural Gas Distribution Portgás network 2nd largest gas distribution concession in Portugal among 11 companies with exclusive regional concessions Provides services in the coastal region of North
Slide 9: Telecommunications business carried through REN Telecom and strong IT infrastructures
Exclusive TSO in Portugal Telecommunications business carried through REN Telecom and strong IT infrastructures REN Telecom 8,106km optical fiber Public telecommunications network operator since 2002 Leverage the existing surplus of secure telecommunications network capacity in the 2,875m2 datacente
Slide 10: Growing its international presence in the Chilean energy transmission business
Exclusive TSO in Portugal Growing its international presence in the Chilean energy transmission business Electrogas (42.5% stake acquired in February 2017) Transemel (100% acquired in October 2019) 165.7 km natural gas and 20.5 km diesel 14 lines (92 km) and 5 substations (985 MVA) oil pipeline Stra
Slide 11: Holdings in the Spanish electricity TSO and Cahora Bassa hydro-plant in Mozambique
Exclusive TSO in Portugal Holdings in the Spanish electricity TSO and Cahora Bassa hydro-plant in Mozambique Spain Mozambique Red Eléctrica Corporación (1% stake) Hidroeléctrica de Cahora Bassa (7.5% stake) Sole transmission agent and operator of the Spanish Concession holding company operating the
Slide 12: Operational excellence
Operational excellence Key messages Operational excellence Highly efficient and reliable player, committed to innovation and technology CORPORATE PRESENTATION 12
Slide 13: Amongst the most efficient TSO's with superior service quality in international benchmarks
Operational excellence Amongst the most efficient TSO’s with superior service quality in international benchmarks Electricity Natural Gas Transmission Service level in line with or outperforming peers Line cost Opex on pipelines 60% 40% below below Avg. European Peers average peers Substation cost O
Slide 14: Enabling a renewable future
Operational excellence Enabling a renewable future % Electricity consumption from renewable sources1 2021 131-hour period with renewable 2019 58% production exceeding consumption 46% 38% Closing of Portugal’s last remaining 2021 coal plant in November Europe Spain Portugal Renewable generation suppl
Slide 15: REN secured green transformation in Portugal
Operational excellence REN secured green transformation in Portugal Installed capacity of renewables REN kept a stable and reliable service 60% of total capacity 25 GW +900 M€ Domestic capex in 2018-22 16 GW 20 days of 100% renewable energy in 2022 6 GW 2005 2022 2030 0.00 min of gas supply interrup
Slide 16: Leverage REN's DNA of innovation and energy transition
Operational excellence Leverage REN’s DNA of innovation and energy transition 2022 achievements and figures Innovation Strategy pillars Two companies of the group were awarded with the “Estatuto INOVADORA COTEC 2022”, a distinction for companies with high innovation performance Quality and business
Slide 17: Solid shareholder base with best-in-class corporate governance
Operational excellence Solid shareholder base with best-in-class corporate governance Shareholder structure1 Board composition 44.4% 25.0% OTHER Board diversity and independence 42,9% Independent 14 MEMBERS members 12.0% 7.7% 28,6% Women Executive members 0.6% 5.0% 5.3% on the Board Non-executive me
Slide 18: REN remains committed to highest ESG standards
Operational excellence REN remains committed to highest ESG standards Targets Achievements Climate | Scope 3 emissions reduced 9% in 2022 (vs. 2021) | Awarded the -50% CO2 emissions -37% Gold Standard by OGMP 2.0 (Oil and Gas Methane Partnerships) for our by 2030 vs. 2019 in 2022 commitment and acti
Slide 19: Good performance in international ESG scores but with ambition to do more
Operational excellence Good performance in international ESG scores but with ambition to do more Latest Scale Score YOY Strengths assessment Innovation, environmental reporting, 0-100 62 and social reporting December 2022 Governance, business strategy, financial D-A B planning, scenario analysis, an
Slide 20: REN displaying reliable and consistent performance for all stakeholders
Operational excellence REN displaying reliable and consistent performance for all stakeholders Economy Society People ~4 B€ ~11 M ~720 invested in Portuguese people connected to grid with no employees in stable team (>65% infrastructure since 2005 material interruption time with at least bachelor de
Slide 21: Stable business context
Stable business context Key messages Stable business context Stable regulatory context with long term contracts CORPORATE PRESENTATION 21
Slide 22: Fully regulated domestic business
Stable business context Fully regulated domestic business Regulatory framework Stable regulatory No consumer Allowed framework credit risk revenues 4-year regulatory periods, Tariff revenues are not Allowed revenues assure cost of for electricity and natural gas dependent on State capital remu
Slide 23: Introduction of TOTEX regulation in the electricity business
Stable business context Introduction of TOTEX regulation in the electricity business REN’s domestic allowed revenues breakdown Electricity 2022-251 Natural Gas 2020-23 Revenue Cap for + Efficiency Sharing + Return on RAB + + TOTEX Incentives D&A Recovery Opex Recovery Mechanism (RAB x RoR) (CAPEX2 +
Slide 24: Transparent and stable return mechanism
Stable business context Transparent and stable return mechanism RoR indexation mechanism RoR evolution, % Electricity (Tx) Natural gas (Tx) Natural gas (Dx) Electricity (base) At the Base RoR indexed to 9.0 Return (%) start the average Rate of Portuguese government 10-Y 8.8 6.1 6.3 5.2 4.9 5.3 4.6
Slide 25: Stable financial performance
Stable business context Stable financial performance Distribution Transmission EBITDA1 M€ 486 477 456 447 467 47 46 44 44 50 374 39 439 431 412 403 417 335 Average RAB1 M€ The regulatory 3,832 3,753 3,635 3,603 3,610 3,511 464 framework 473 472 473 484 489 3,367 3,280 3,163 3,129 3,126 3,022 provide
Slide 26: International gas transmission business very stable
Stable business context International gas transmission business very stable Electrogas business has high EBITDA margins …with positive impact in REN’s results and low capex requirements… EBITDA Impact on REN US$ M M€ 44 2022 Since 2017 36 32 31 37% of 29 59.5 acquisition price 54.9 12.1 11.5 2019 20
Slide 27: International electricity transmission business with attractive growth potential
Stable business context International electricity transmission business with attractive growth potential EBITDA Revenues regularizations (one-off) M€ 11 13 7 8 9 4 6 3 Arica 8 9 Iquique Calama Net income Antofagasta M€ Transemel’s results 10 9 6 4 4 are expected to grow 2 until 2025 reflecting 2018
Slide 28: Strong operational performance and stable asset base
Stable business context Strong operational performance and stable asset base New businesses allow for an overall asset base stabilization and sustainable operational results, despite mature domestic transmission business REN EBITDA Regulated asset base and other investments’ assets, M€ M€ CAGR CAGR
Slide 29: Solid results
Solid results Key messages Solid results Strong financial discipline leading to attractive shareholder returns CORPORATE PRESENTATION 29
Slide 30: Stable net income
Solid results Stable net income Despite some volatility in 10y Portuguese Government Bonds, REN has been able to maintain a stable net income Net income1 M€ 3.9 2.6 3.1 1.9 3.9 3.8 3.0 2.8 2.8 2.9 2.9 152 138 142 141 143 140 137 124 121 126 124 9.6% 8.1% 7.8% 5.7% 6.0% 6.1% 6.3% 5.2% 4.9% 4.6% 4.7%
Slide 31: Balanced credit profile with investment grade credit metrics and lower cost of debt
Solid results Balanced credit profile with investment grade credit metrics and lower cost of debt Gross debt maturity profile and funding Cost of debt evolution Rating agencies sources1 % credit ratings September 2023, M€ Avg. Maturity September 2023 4.1 2,499 2.5yrs Other 2% 13% 351 REN maintains a
Slide 32: Delivering compelling returns to shareholders
Solid results Delivering compelling returns to shareholders Cumulative Total Shareholder Return1 since REN’s IPO Indexed from 100 180 PSI20 REN EuroStoxx Utilities 150 153.9% 120 90 Eurostoxx Utilities 60 44.6% 30 0 PSI20 -14.3% -30 -60 Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec
Slide 33: Stable and attractive dividend per share
Solid results Stable and attractive dividend per share REN Dividend per Share Dividend yield € September 2023, % 11.0 0.171 0.171 0.171 0.171 0.154 0.154 6.4 6.7 6.2 5.5 4.4 4.3 3.6 2.0 2017 2018 2019 2020 2021 2022 TSO1 TSO2 TSO3 TSO4 TSO5 Euro Avg PT PSI 20 Stoxx Utilities REN has delivered stable
Slide 34: Strategic cycle 2021-24
Strategic cycle 2021-24 Key messages Strategic cycle 2021-24 REN at the core of energy transition reinforcing its ESG standards and delivering growth, superior operational performance and solid financials CORPORATE PRESENTATION 34
Slide 35: REN is enhancing its journey through 3 strategic pillars
Strategic cycle 2021-24 REN is enhancing its journey through 3 strategic pillars Investment At the core growth story, ESG highest of energy delivering superior standard transition service quality Solid financials and sustainable shareholder returns CORPORATE PRESENTATION 35
Slide 36: REN is stepping up and accelerating its ESG commitment
Strategic cycle 2021-24 REN is stepping up and accelerating its ESG commitment Environmental Social & Governance 2019: >258,000 TON CO2 emitted1 >1/3 of women in 1st line 30% management positions in 2022 by 2030 -50% CO2 emissions1 by -37% Increasing ESG weight in +5p.p. 2030 vs. 2019 in 2022 manage
Slide 37: REN pushing for investment growth in Portugal and Chile
Strategic cycle 2021-24 REN pushing for investment growth in Portugal and Chile Average annual capex, M€ 2018-20 2021-24 190-220 Up to 40% Electricity Increase in 156 Gas transmission domestic avg. Gas distribution annual capex vs. 150-175 last strategic cycle 118 13 15-20 25 25 +900M€ Transemel sec
Slide 38: European and National energy policies are setting more ambitious targets for decarbonization
Strategic cycle 2021-24 European and National energy policies are setting more ambitious targets for decarbonization The EU is setting more ambitious Portugal is adapting PNEC 2030 to cope targets towards a net zero transition with new EU targets Revised from current -55% -55% -45% to -55% net green
Slide 39: REN's investment is expected to rise to enable more ambitious national decarbonization goals
Strategic cycle 2021-24 REN's investment is expected to rise to enable more ambitious national decarbonization goals Targets announced in 2021 14 direct agreements Expansion to accommodate Electricity ~70-75% 3.5 GVA signed in 2021 (capex new renewable resources to be concluded in 2026) Direct agree
Slide 40: Concrete investments in resilience and innovation deployment to keep strong operational performance
Strategic cycle 2021-24 Concrete investments in resilience and innovation deployment to keep strong operational performance Reinforcement with new overhead lines Resilience Refurbishment of overhead lines to increase resilience to “ice sleeves” and quality Vegetation management Digital subst
Slide 41: Investment growth and solid financials
Strategic cycle 2021-24 Investment growth and solid financials Execution Up to +35% update 200-235 224 175 Strong capex level Total aligned with strategy, capex, M€ Capex growth leading to a stable RAB and RAB stability 2015-20 2021-24 2021-22 Total 3.9 3.9-4.0 assets, B€ 463 450-470 474 REN able to
Slide 42: Robust debt management and attractive returns
Strategic cycle 2021-24 Robust debt management and atractive returns Execution update Optimize cost of FFO/ Net 11-13% 12-14% 17% debt debt, % beyond 2022 2022 (~11% in 2021) (11% in 2021) Protect net profit Strong credit ratings Committed to Net 2.8-2.7 debt, B€ 2.7-2.5 2.2 investment grade 2018-20
Slide 43: REN at a glance
REN at a glance1 Financial Eletricity Gas 111.8 M€ 43.6 TWh 65.6 TWh performance NET INCOME Ensuring electricity supply ENERGY TRANSMITED Ensuring the supply of TRANSPORTED ENERGY Solid and sustainable and security of supply natural gas and security financial performance of supply 201.5 M€ 50.4 TWh
Slide 44: 9M23 Results
9M23 Results 9M22 9M23 9M22/23 EBITDA1 360.9 395.5 34.6 9.6% Net financial income1 Results -25.8 -35.5 -9.7 -37.6% Net income 81.4 96.2 14.8 18.2% Recurrent net income 107.0 122.6 15.6 14.6% Capex2 Investment 126.0 177.1 51.1 40.5% Transfers to RAB3 83.2 49.1 -34.1 -41.0% Average RAB 3,603.3 3,510
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