EDP Renewables SA · EURONEXT:EDPR
EDP Renewables SA — Investor Presentation (August 2024)
37 slides from EDP Renewables SA's investor presentation, August 2024
Slide 1: Investor Presentation August 2024
Investor Picture Presentation August 2024 www.edpr.com Budzyn Poland
Slide 2: Agenda
Agenda 1 EDPR at a Glance 2 Update on Strategic Execution 3 1H24 Results 4 Appendix 2
Slide 3: EDPR at a Glance
EDPR at a Glance
Slide 4: Global pure renewables player with a portfolio of 16.6 GW in low-risk markets
EDPR at a Glance Global pure renewables player with a portfolio of 16.6 GW in low-risk markets and with more than 3,000 employees worldwide… EDPR global wind and solar installed capacity Leading pure renewables player, with >20 years of track record Differentiated and leading position in the Europe
Slide 5: High quality 100% RES portfolio, well diversified and LT contracted
EDPR at a Glance … with a high quality 100% RES 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: ~90% of asset bas
Slide 6: Extensive track record delivering secular growth with debt under control
EDPR at a Glance … and extensive track record that has delivered secular growth with debt being kept under control Remarkable performance over the last decade… … backed by outstanding execution of our business plans 2013 2023 513 Solid portfolio creation investing +13% CAGR ~2x in quality projects w
Slide 7: Update on Strategic Execution
Update on Strategic Execution
Slide 8: Updated Guidance for 2024-2026
Update on Strategic Execution Updated Guidance for 2024-2026 2023 2024E 2026E CAGR 23-26 Generation 35 40 - 42 50-52 +13% TWh Avg. Selling Price 61 ~55 ~50 -7% €/MWh Asset Rotation Gains 0.5 ~0.3 ~0.3 €bn Recurring EBITDA 1.85 ~1.9 ~2.4 €bn +9% +15% w/o AR Gains Recurring Net Income 0.5 ~0.4 ~0.7 +1
Slide 9: Renewable energy growth continues to be backed by increasing demand worldwide
Update on Strategic Execution 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 target
Slide 10: Renewables demand growth supports strong execution on new PPA contracts
Update on Strategic Execution Renewables demand growth supports strong execution on new PPA contracts over 1H24, providing visibility of 2024-2026 investment plan +1.3 GW of PPAs signed YTD, closed at competitive prices supporting our >70% secured capacity >60% Evolution of PPA prices(1) Big tech (L
Slide 11: Gross capacity additions of ~3 GW/year in 2025-26 on a robust pipeline
Update on Strategic Execution 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… 2024-26 Gross Capacity Additions (GW) 2024-26 Breakdown By Geography North South Europe APAC America America 8% 42% 8% ~0.9 ~0.5 ~
Slide 12: Stricter investment approach focused on strong contracted cash yields
Update on Strategic Execution … under a stricter investment approach for upcoming investment decisions keeping the focus on strong contracted cash yields Recent investment approvals continue supporting value Stricter investment approach increasing our target for creation from growth in renewables fu
Slide 13: Asset rotation strategy supporting a fully funded plan through 2026
Update on Strategic Execution 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 Gain
Slide 14: Strong asset rotation execution in 1H24 with proceeds of ~€1.2bn
Update on Strategic Execution Strong Asset rotation execution in 1H24 with proceeds of ~€1.2bn EV/MW 1H24 Asset rotation (€m/MW) Total AR Proceeds (€bn) ~0.9 ~0.4 ~0.4 ~1.2 ~€1.2bn total proceeds implying an EV/MW of €1.6m 2.0 on track to achieve expected proceeds for the year Avg. €1.6m 1.5 €171m o
Slide 15: Hedged volumes for 2H24 support visibility on full year revenues
Update on Strategic Execution Hedged volumes for 2H24 support good visibility on full year revenues, along with slightly improved prospects for 2025-26 wholesale prices 2024 performance supported by positive impact from 2025-26 forward prices aligned with guidance hedging strategy on average selling
Slide 16: Sound business profile in US with local assembled equipment
Update on Strategic Execution Sound business profile in US based on strong weight on local assembled equipment resilient to potential changes on import tariff policy Wind and Solar insulated from political risk in the US Our procurement strategy in US is based on high weight of US manufacturing Sola
Slide 17: Continue to improve efficiency in operations to reduce unitary Core OPEX
Update on Strategic Execution 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 o
Slide 18: Working every day towards Net Zero with best ESG practices
Update on Strategic Execution Working every day towards Net Zero, operating with the best ESG practices along the value chain… WE WILL Decarbonize for a climate-positive world 20 million tons of CO2 avoided Net Zero target submitted to SBTi WE ARE Empowering our communities Protecting our planet Eng
Slide 19: Pursuing the way for a better tomorrow
Update on Strategic Execution … pursuing the way for a better tomorrow… All in all – our ESG commitments 2026 2030 Ambition Goal 2023 target ambition Decarbonize: for a climate-positive world Renewable capacity additions (GW/year) 2.5 ~3 - Communities: Empowering our Communities Global investment in
Slide 20: ESG leader recognized by top-tier institutions
Update on Strategic Execution … to continue being an ESG leader recognized by top-tier institutions and aim to maintain a leadership position in ESG rating performance Entity Rating Entity Rating Through EDP 77/100 3.9/5 88/100 Sustainability Percentile rank: 85 #1 electric utilities Yearbook Member
Slide 21: 1H24 Results
1H24 Results
Slide 22: 1H24 marked by sound operational performance and asset rotation execution
1H24 Results 1H24 marked by sound operational performance and positive developments on capacity growth and asset rotation execution 1H24 Main Highlights Financial Performance • Generation +5% YoY to 18.9 TWh: +15% in North America driven by wind YoY recovery (+2% vs. LT avg. in 1H24) and good pace o
Slide 23: Electricity Sales +5% YoY
1H24 Results Electricity Sales +5% YoY impacted by the recovery in generation and stable average selling price Electricity Sales(1) (€m) 1H23 1H24 YoY YoY Installed Capacity GW 15.2 16.6 +10% +5% 1,145 1,087 Renewable Index Generation % 95% 100% +5% Electricity Generation TWh 18.0 18.9 +5% 552 Europ
Slide 24: EBITDA +26% YoY
1H24 Results EBITDA +26% YoY impacted by recovery in North America generation and Asset rotation gains EBITDA 1H24 (€m) YoY +5% 171 +26% 1,145 142 (381) (118) 960 Electricity Sales Tax Equity Revenues AR Gains Core Opex Other Costs (net)(1) EBITDA +€57m +€19m +€171m -€23m -€29m +€196m -€34m from Col
Slide 25: Financial Results and debt profile
1H24 Results Financial Results +€64m YoY driven +€1.2bn nominal financial debt YoY Financial Results (€m) +€64m Financial results +€64m YoY impacted by +€1.2bn of +15% 2 223 nominal financial debt YoY with Colombia related (28) 159 (33) financials of €17m 192 220 Lower cost of debt (-0.2pp) driven b
Slide 26: Net Debt at €7.5bn driven by Net Expansion Investments
1H24 Results Net Debt at €7.5bn mainly driven by Net Expansion Investments of €1.8bn Net Debt Chg. Dec-23 to Jun-24 (€bn) €2.3bn Expansion Capex and €0.1bn Financial investments offset by €0.4bn AR Proceeds net of gains +€1.7bn YTD 0.01 1.8 ~€7.2bn 1.0 0.5 considering 0.2 0.2 Italian AR closed on 7.
Slide 27: Net Profit of €210m supported by EBITDA growth
1H24 Results Net Profit of €210m supported by EBITDA growth partially mitigated by higher financial costs 1H24 EBITDA to Net Profit (€m) YoY +5% YoY generation along with stable prices and EBITDA 960 +€196m Asset rotation gains of €171m D&A(1) (389) (€4m) Driven by capacity additions EBIT 571 +€202m
Slide 28: Closing remarks
1H24 Results Closing remarks 1H24 driven by normalization of wind resources (renewable index +5pp YoY) leading to an increase of +5% YoY in generation and stable YoY avg. selling price at €61/MWh reflecting higher pricing environment in North America offset by lower prices in Europe, however backed
Slide 29: Appendix
Appendix
Slide 30: Key Sensitivities on Net Income for 2026
Appendix Key Sensitivities on Net Income for 2026 D 2026 Net Income Impact Avg. Spot Price Electricity Europe €5/MWh ~€27m RES Generation Output 3% ~€50m FX EUR/USD 5% ~€15m Interest Rates 25bps ~€20m 30
Slide 31: Main assumptions
Appendix Main assumptions Current assumptions Pool Iberia TTF CO2 Inflation Europe % Inflation Brazil % €/MWh €/MWh €/ton Avg. IPCA / IGPM 58 61 3.7 61 58 2.4 3.3 3.5 28 29 EUR/USD EUR/BRL EUR 7Y MidSwap USD 7Y Treasuries SELIC % % % 1.1 1.1 10.1 5.6 5.9 8.5 2.5 2.4 3.6 3.5 2024 2026 2024 2026 2024
Slide 32: Expansion Capex of €2.3bn with 84% from North America and Europe
Appendix Expansion Capex of €2.3bn with 84% from North America and Europe 1H24 Expansion Capex by region (€bn) Strong investment effort increasing +18% YoY with 4.5 GW of assets under construction 62% 13% €2.3bn 3% APAC Focus on low-risk markets as planed with North America and Europe representing 8
Slide 33: EDPR Asset Base as of Jun-24
Appendix EDPR Asset Base as of Jun-24 EDPR Installed Capacity as of Jun-24 EDPR EBITDA MW Avg. Age and Useful Life Remaining 2024 MW 1H24 Additions AR/Decom.(1) YTD U/C Spain 2,042 - - - 356 Spain 15 Portugal 1,413 - - - - Portugal 13 Rest of Europe 1,919 +29 (191) (162) 714 France 4 Europe 5,373 +2
Slide 34: Lean and independent Corporate Governance model
Appendix Lean and independent Corporate Governance model in line with best practices Key highlights of the Board of Directors (1) General Shareholders’ Meeting Independent Chairman 9 Board members Board of Directors Executive Directors Non-Executive Directors 2 Executive directors (CEO and CFO) 44%
Slide 35: Remuneration Frameworks
Appendix Remuneration Frameworks • Electricity price can be stablished through bilateral contracts • Wind farms commissioned before 2006 are subject to a FIT whose value is correlated with production and indexed with • Wind farms before 2018 are subject to a GC scheme. Wind receives 1 GC/MWh during
Slide 36: OW is a top offshore player globally
Appendix OW is a top 5 offshore player globally, with a diversified geographical mix in core low-risk markets Strong portfolio of secured projects indexed to inflation Contracted and inflation linked Offshore Wind, GW Contracted revenues Gross Net COD Project Technology and inflation linked Capacity
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