Iren S.p.a. · MIL:IRE
Iren — FY2019 Earnings Presentation
29 slides from Iren's earnings presentation, Mar 25, 2020
Slide 1: 2019 FY Results
2019 FY RESULTS 25th March 2020
Slide 2: Index
INDEX 2019 FY RESULTS 01 02 COVID-19 Outbreak Update: FY 2019 Status, business risks and guidance 2
Slide 3: 2014-2019 Economic and Financial growth
2014 -2019 Economic and Financial growth 2019 FY RESULTS EBITDA BRIDGE (m€) NFP/EBITDA (m€) Cagr ~7.5% NFP EBITDA NFP/EBITDA 2,706 2.457 2.372 2.453 2.286 ̴140 917 3,6x 2.169 ̴95 3,2x 3,0x 3,0x 2.9x 2,8x 640 ̴95 814* 820 866 917 (55) 640 678 EBITDA GC expiry Organic Synerg. Consolid. EBITDA 2019 rec
Slide 4: FY 2019 Sustainability path
FY 2019 Sustainability path 2019 FY RESULTS WATER SOURCES CIRCULAR ECONOMY DECARBONIZATION RESILIENT CITIES PEOPLE • Division of the networks into • Acquisition and creation of new • Increase in thermal and electricity • Extension of district heating • Enhancing competencies and small and equal area
Slide 5: FY 2019 The positive contribution of all business units led to a sound growth
FY 2019 The positive contribution of all business units led to a sound growth 2019 FY RESULTS KPIs EBITDA BRIDGE (m€) -5.1% m€ FY '18 FY '19 Δ Δ% +5.9% Revenues 4.041 4.275 234 5.8% 967 12 1 36 917 Ebitda 967 917 -50 -5,1% 31 3 866 (32) Ebit 530 452 -78 -14.8% (101) Group net profit 242 237 -5 -2.3%
Slide 6: Networks: Growth driven by all the strategic pillars
NETWORKS Growth driven by all the strategic pillars 2019 FY RESULTS + RAB growth combined with +9% synergies and the consolidation 5 14 of ACAM led the 8% Ebitda 373 EBITDA BRIDGE 12 7 342 (7) increase. + The positive investments trend in water and electricity sector continues in line with the Ebitd
Slide 7: Waste
WASTE Ebitda growth led by higher volumes for both organic growth and consolidation 2019 FY RESULTS + The organic growth is related to +1.8% disposal plants saturation (including REI landfill EBITDA BRIDGE 3 158 155 5 contribution) and the increase in (1) (4) collection margins. + 2019 total investm
Slide 8: Energy
ENERGY Higher thermo volumes and heat spark spread partially offset by lower PUN and hydro volumes 2019 FY RESULTS + Increase in thermoelectric 17% volumes and clean spark spread. +1.5% Higher heat spark spread. 330 EBITDA BRIDGE 27 3 11 11 Growth in district heating 270 274 (16) (32) (60) volumes a
Slide 9: Market
MARKET Growth led by higher electricity volumes due to retail clients acquisition and margins recovery 2019 FY RESULTS + Increase in electricity volumes -20.6% sold. Higher margins in both the +12.9% business lines. Positive results EBITDA BRIDGE 139 8 3 21 from SET consolidation and New 98 110 (3)
Slide 10: FY 2019 Profit and loss
FY 2019 Profit and loss 2019 FY RESULTS FROM EBITDA TO GROUP NET PROFIT (m €) Increase in D&A related to capital intensive FY '18 FY '19 Δ Δ% investments, consolidation process (ACAM and EBITDA 966.6 917.3 -49.3 -5.1% San Germano) and IFRS 16 application D&A and others -383.9 -427.9 Provisions to
Slide 11: FY 2019 Cash-flow and NFP
FY 2019 Cash-flow and NFP 2019 FY RESULTS NET FINANCIAL POSITION BRIDGE (m €) +253 m€ (+10.3%) +37m€ (+1.5%) 126 2.706 2.490 89 2.453 150 28 524 (266) 33 (432) NFP 31.12.18 Net Profit D&A, NWC Variation Capex Dividends Derivatives and Consolidation IFRS 16 NFP 31.12.19 provisions others and other Ne
Slide 12: FY 2019 Financials
FY 2019 Financials 2019 FY RESULTS INTEREST RATE DEBT STRUCTURE MATURITIES 554 4% 20% 16% 420 212 229 80% 58 80% Fixed Swap Variable Bonds Loans 2020 2021 2022 2023 2024 2020 and partial 2021 refinancing needs have already been IREN’s debt is formed of: financed. 80% bonds 96% of gross debt
Slide 13: FY 2019 High resilience against headwinds
FY 2019 High resilience against headwinds 2019 FY RESULTS EBITDA 2019: REGULATED: 46% QUASI REGULATED: 24% MERCHANT: 30% 917M€ % REG. & QUASI % ON TOTAL RISKS AND OPPORTUNITIES REG. ACT. 2019 EBITDA Stable regulatory framework, next gas tenders could represent an upside, systemic need Networks 100%
Slide 14: FY 2019 High resilience against Covid-19 outbreak
FY 2019 High resilience against Covid-19 outbreak 2019 FY RESULTS The Covid-19 outbreak is having an impact on the ordinary management and operations of the company: • We have put in place all the measures to ensure essential services and the continuity of activities respecting the safety and health
Slide 15: FY 2019 Closing remarks
FY 2019 Closing remarks 2019 FY RESULTS The sound FY 2019 results led us to confirm all our strategic targets. The energy scenario downwards trend is expected to have the following impacts on 2020 numbers: • Lower PUN will be offset by higher hydroelectric volumes • The combination of lower PUN
Slide 16: Annexes
Annexes
Slide 17: Iren at a glance
Iren at a glance 2019 FY RESULTS 2019 Data Energy Infrastructure Water Service Urban Waste Collection • RAB Electricity distribution: REGULATED 447m€ • RAB water cycle • 1.7m tons municipal waste ACTIVITIES • RAB Gas distribution: management: 1,057m€ collected >7million (46% OF EBITDA) 696m€ • 33.4%
Slide 18: Business units' results
Business units’ results 2019 FY RESULTS NETWORKS WASTE m€ FY '18 FY '19 Δ Δ% Revenues 947 1,046 99 11% m€ FY '18 FY '19 Δ Δ% Ebitda 342 373 31 9% Revenues 610 715 105 17% Electricity 74 75 1 2% Ebitda 155 158 3 2% Gas 80 89 9 10% Ebit 75 56 -19 -26% Water 188 209 21 11% Gross Capex 31 72 41 132% Ebi
Slide 19: Actual progress vs business plan targets
Actual progress vs business plan targets 2019 FY RESULTS EBITDA BRIDGE (m€) 30 46 1,070 41 78 (38) 917 Total energy: (8) FY 2019 Networks Waste Energy Cetificates expiry Market 2024E Growth is driven by RAB increase, improvement in service quality and synergies The new treatment plants will allo
Slide 20: Ebitda progress by SBU
Ebitda progress by SBU 2019 FY RESULTS NETWORKS EBITDA BRIDGE (m€) 1.4b€ of cumulated capex to significantly increase RAB by 800m€ and the networks’ resilience 451 373 406 150m€ of capex are devoted to developing the water purification plants 319 336 342 304 Further synergies will be exploited
Slide 21: Ebitda progress by SBU
Ebitda progress by SBU 2019 FY RESULTS ENERGY EBITDA BRIDGE (m€) Increase in IREN’s generation fleet flexibility, also through electricity and thermic storage development, in order to be more competitive in 274 241 265 247 261 ancillary services and in the upcoming capacity market 234 199 230m€
Slide 22: Networks concessions
Networks concessions 2019 FY RESULTS GAS WATER ELECTRICITY ATEM Expiry AREA Expiry AREA Expiry Genova 1 Expired Piacenza Expired Torino 2030 Parma Expired Reggio Emilia Expired Parma 2030 Reggio Emilia Expired Genova 2032 Vercelli 1 2030 Vercelli Expired Parma 2025 Piacenza 2 - Est Expired Vercelli
Slide 23: Hydroelectric and waste concessions
Hydroelectric and waste concessions 2019 FY RESULTS HYDROELECTRIC WASTE Electric AREA Expiry AREA Hydroelectric plant Power Expiry (MW) Parma** Expired Piemonte 1 Pont Ventoux-Susa 157 2034 Piacenza** Expired Expired Piemonte 2 Valle Orco e S. Mauro 300 Reggio Emilia Expired 2010 S. Lorenzo, Moncali
Slide 24: Regulatory framework
Regulatory framework 2019 FY RESULTS Gas Electricity Water Waste collection distribution distribution service Integrated service Regulatory period 6 years (2020 – 2025) 8 years (2016 – 2023) 4 years (2020 – 2023) 4 years (2018-2021) WACC methodology 6 years (2016 – 2021) 6 years (2016 – 2021) 4 year
Slide 25: Shareholding structure
Shareholding structure 2019 FY RESULTS >50% Public entities IREN’s Shareholders are more than 50%: Municipality of Genoa ~19%, Municipality of Turin ~14%, Emilia Municipalities (Reggio Emilia, FSU (Municipality Public Parma, Piacenza and other minor Municipalities) ~17%, La Spezia of Genoa) Sharehol
Slide 26: Public entities / Shareholders
Public entities / Shareholders 2019 FY RESULTS IREN SHAREHOLDING STRUCTURE TRADE REGIME OF PUBLIC SHAREHOLDERS’ SHARES Negotiable shares Freely negotiable Non-negotiable Shareholders Total Shares % Total Voting rights % (under specific policy shares (not included Shareholders Total Shares shares to
Slide 27: Scenario
Scenario 2019 FY RESULTS FY '18 FY ’19 Δ% Gas Demand (bcm) 72.1 73.8 2.3% TTF €/000 scm 241 135 -43.8% PSV €/000 scm 256 160 -37.4% Energy Demand (Twh) 321.9 319.6 -0.7% PUN (€/Mwh) 61.3 52.3 -14.6% CO2 €/Ton 15.9 24.9 56.4% Green Cert. Hydro (€/Mwh) 99.0 92.1 -7.0% TEE (€/TEE) 250.0 260.0 4.0% P AS
Slide 28: Balance sheet
Balance sheet 2019 FY RESULTS FY '18 FY ’19 Net fixed assets 5,786 6,096 Net Working Capital 132 166 Funds -621 -625 Other assets and liabilities -282 -280 Net invested capital 5,015 5,357 Group Shareholders' equity 2,562 2,651 Net Financial Position 2,453 2,706 Total Funds 5,015 5,357 P AST A C HIE
Slide 29: Disclaimer
Disclaimer 2019 FY RESULTS The Manager in charge of drawing up the corporate accounting documents and the Chief Financial Officer of IREN S.p.A., Mr. Massimo Levrino, hereby declares, pursuant to paragraph 2 of article 154 bis of the Consolidated Finance Act (Legislative Decree No 58/1998), that the