Redes Energeticas Nacionais Sa · EURONEXT:RENE
Redes Energeticas Nacionais Sa — REN - Redes Energéticas Nacionais — Investor Day (May 2021)
33 slides from Redes Energeticas Nacionais Sa's investor day presentation, May 14, 2021
Slide 1: Capital Markets Day 2021
REN> CAPITAL MARKETS DAY 2021
Slide 2: Agenda for today
Agenda for today 09h30 Capital Markets’ Presentation Consistent success journey REN’s strategy: at the core Rodrigo Costa (CEO) of energy transition ESG highest standard Investment growth story João Conceição (COO) Solid financials and shareholder return Gonçalo Morais Soares (CFO) Closing rem
Slide 3: Our world is evolving and companies are adapting
Our world is evolving and companies are adapting World moving to Companies deploying tackle global warming strategies accordingly 1.5ºC +55% x9 ~2 Tn€ x2 limit to achieve CO2 emissions increase in green investment in increase of volume climate neutrality, cut by 2030, hydrogen demand power T&D over
Slide 4: TSOs are adapting priorities in line with recent trends
TSOs are adapting priorities in line with recent trends Dedicated investment cycles to sustain quality and security of supply in the context of infrastructure aging Backbone Increasing interconnections across countries, while debottlenecking areas to accommodate renewables and distributed resources
Slide 5: REN secured green transformation in Portugal
REN secured green transformation in Portugal REN has enabled green sources … while keeping a stable and reliable service to grow in Portugal… Installed capacity of renewables +460 M€ Domestic capex in 2018-20 25 GW 19 GW 24 days of 100% renewable energy in 2020 6 GW 0.00 min of gas supply interrupti
Slide 6: REN successfully met 2018-21 Business Plan targets and provided solid returns to investors
REN successfully met 2018-21 Business Plan targets and provided solid returns to investors Average results met 2018-21 BP yearly targets Total shareholder return (2015 to Apr. 21) EBITDA 57% 475-500 49% M€ 31% Net profit M€ 110-115 Net debt B€ 2.7-2.9 Dividend yield (2015 to 2019) Domestic capex1 6%
Slide 7: REN displaying reliable and consistent performance for all stakeholders
REN displaying reliable and consistent performance for all stakeholders Economy Society People ~4 B€ ~11 M ~700 invested in Portuguese people connected to grid with no employees in stable team (>65% with infrastructure since 2005 material interruption time bachelor degree) ~95% +1 M +1,300 of paymen
Slide 8: REN will enhance its journey through 3 strategic pillars
REN will enhance 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 8
Slide 9: ESG highest standard
REN will enhance its journey through 3 strategic pillars ESG highest At the core of energy standard transition Strong and Clear and recognized ambitious track record new targets 9
Slide 10: REN remains committed to UN's Sustainable Development Goals
REN remains committed to UN’s Sustainable Development Goals, engaging in several initiatives Efforts already recognized by ESG rating agencies Education | Environmental and biodiversity educational initiatives Environmental Reforestation | Reforestation of right of way with native species Climate |
Slide 11: REN is stepping up and accelerating its ESG commitment
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 management positions by 2030 -50% CO2 emissions1 Increasing ESG weight in by 2030 vs. 2019 managers’ performance metrics already by 2022 Carbon neutral b
Slide 12: REN will enhance its journey through 3 strategic pillars
REN will enhance 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 12
Slide 13: Investment growth story
REN will enhance its journey through 3 strategic pillars Investment At the core of energy growth story, transition delivering superior service quality Strong growth Decarbonization Resilience and driven by of gas grids innovation electrification through H2 deployment 13
Slide 14: REN pushing for investment growth in Portugal and Chile
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 118 cycle 13 15-20 25 25 +900M€ to be invested in 2021-24 +2x Growth
Slide 15: REN allocating up to 75% of electricity capex to expansion
REN allocating up to 75% of electricity capex to expansion Modernization, ~20-25% resilience and climate change adaptation To deliver a resilient service and keep efficiency and quality Expansion 150-175 M€ 5% To accommodate new capex p.a. renewable resources Other ~70-75% 10% in digitalization tran
Slide 16: REN doubling-down on green energy enablement by connecting renewables
REN doubling-down on green energy enablement by connecting renewables direct agreements – negotiated ~3.5 GW between REN and solar PV promoters solar projects recently awarded Solar ~1.6 GW in regulated auctions REN will enable growth in renewable energy sources onshore (~1.2 GW), including while ma
Slide 17: REN aims to ensure gas decarbonization and lead H2 adoption
REN aims to ensure gas decarbonization in the next decade and lead H2 adoption leveraging sector coupling experience Strong national REN will lead H2 deployment in Portugal decarbonization targets with an H2 plan focused 2030 on establishing mechanisms for initial 2026 projects, while maintaining gr
Slide 18: Internationally, REN is committed to Chile
Internationally, REN is committed to Chile and intends to contribute for the country’s decarbonization Chile is decarbonizing fast, with REN’s diversified and Arica Iquique an ambitious green H2 agenda growing portfolio Antofagasta and expected grid expansion ~40 GW of additional RES Present in regi
Slide 19: Leading player in operational performance, while planning concrete investments in resilience
Leading player in operational performance, while planning concrete investments in resilience to keep strong positioning Electricity Resilience and quality Service level in line with or outperforming peers Refurbishment of Reinforcement overhead lines to Vegetation 60% with new overhead increase resi
Slide 20: REN will enhance its journey through 3 strategic pillars
REN will enhance 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 20
Slide 21: Solid financials and sustainable shareholder returns
REN will enhance its journey through 3 strategic pillars At the core of energy transition Capex growth Solid P&L and RAB stability metrics Solid financials Strong credit Attractive and and sustainable ratings sustainable returns shareholder returns 21
Slide 22: REN evolving its equity story, prioritizing organic investments
REN evolving its equity story, prioritizing organic investments Capital allocation Portfolio re-alignment with shift towards electricity to respond to 2021-24 ~80% electricity current market trends Weight of ~100% organic electricity and demand changes (vs. gas)1 2015-20 from society ~50% electricit
Slide 23: Strong capex level aligned with strategy, leading to stable RAB
Strong capex level aligned with strategy, leading to stable RAB Total capex, M€ Total assets, B€ 3.9 3.9-4.0 Up to +35% 200-235 Domestic 2.2 2.2-2.3 Electricity assets, B€ 175 0.9 0.8-0.9 Gas transmission 0.5 0.5 Gas distribution Chilean assets1, B€ 0.2 0.3 Other holdings2, B€ 0.2 0.2 2015-20 2021-2
Slide 24: Steady regulatory framework with actions taken to mitigate macroeconomic context
Steady regulatory framework with actions taken to mitigate effect of current macroeconomic context Adequate regulatory period for electricity and natural gas, during which relevant parameters’ calculation remain constant Stable regulation Suitable efficiency targets and incentives complemented with
Slide 25: REN able to preserve solid performance in EBITDA and net profit
REN able to preserve solid performance in EBITDA and net profit 463 450-470 Adjusted EBITDA, M€ Adjusted 99 90-105 net profit, M€ 20201 2021-24 1. EBITDA and net profit adjusted for non-recurring impacts from incentives and taxation 25
Slide 26: Our goals remain the same, translating into a prudent financial strategy
Our goals remain the same, translating into a prudent financial strategy… Credit rating Strictly committed to investment grade Liquidity Optimize cost of debt Funding needs fully covered for the next >24 months Interest and exchange rate risk Use fixed and floating mix to align duration with regulat
Slide 27: … and resulting in robust debt management
… and resulting in robust debt management FFO/ Net debt, % 11-13% 12-14% beyond 2022 (~11% in 2021) Net debt, B€ 2.8-2.7 2.7-2.5 2018-20 2021-24 27
Slide 28: REN has maintained a clear dividend policy
REN has maintained a clear dividend policy Predictable Attractive Sustainable Dividend fixed Avg. dividend yield since 2015 Cash flow dividend payout of at 0.171€ since 2013 above reference peers’ average ~30% since 2015 and below and 10Y gov. bond yields reference peers’ average Net income payout i
Slide 29: Revised dividend policy for 2021-24 cycle
Revised dividend policy for 2021-24 cycle Dividend floor at 0.154€/share Aim for a payout below 100%, while considering that potential uplift to DPS may occur if there are material Implementation of a bi-annual net income upsides dividend distribution policy in 2022 (starting at the end of year) Pre
Slide 30: REN has a strong equity story, complemented with clear KPIs commitment for 2021-24
REN has a strong equity story, complemented with clear KPIs commitment for 2021-24 Growth in electricity sector and Capex Assets in organic investment weight 200-235 M€ 3.9-4.0 B€ Stable regulatory framework EBITDA 450-470 M€ Prudent funding strategy Net debt FFO / Net debt committed to investment g
Slide 31: REN will enhance its journey through 3 strategic pillars
REN will enhance 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 31
Slide 32: Closing remarks
Closing remarks REN will commit to ambitious new targets – carbon neutrality by 2040 (and -50% CO2 emissions by 2030), increased diversity, implementation of ESG incentivization and pledge to 100% green financing REN will remain at the core of energy transition reinforcing REN will double down on el
Slide 33: Muito obrigado
Muito obrigado Please visit our website at www.ren.pt or our investors’ app: 33
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