Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — 9M10 Earnings Presentation
32 slides from Edp's earnings presentation, Nov 5, 2010
Slide 1: 9M10 Results Presentation
9M10 Results Presentation November 5th, 2010
Slide 2: 9M10: Highlights of the period
9M10: Highlights of the period EBITDA: €2,651m, +9% YoY EBITDA from Brazil: +28% YoY: 19% of EDP Group EBITDA in 9M10 Electricity distributed +15% YoY EBITDA Regulated & LT Contracted Iberia: +8%: 50% of EDP Group EBITDA in 9M10 Focus on efficiency + better than expected contribution from new gas as
Slide 3: 9M10: Highlights of the period
9M10: Highlights of the period Net Profit: €774m, +4% YoY Net interest costs down 9% YoY Average cost of debt down from 4.0% in 9M10 to 3.5% in 9M10 High level of financial liquidity: €3.9bn by Sep-10 + credit line extended/increased in Nov-10 Covers expected funding needs until 2012 Capex 2011-12:
Slide 4: 9M10 Operating Headlines
9M10 Operating Headlines Installed Capacity 9M10 Generation Breakdown by Technology (GW) (%) (1) Wind Hydro CCGT Other +11% Other (1) CCGT 21.3 19.1 19% 17% 23% 26% 16% 13% 23% 36% 32% 41% 61% wind & hydro 29% 64% 25% Hydro & Wind 9M09 9M10 Installed capacity up 11% YoY; Wind & Hydro represent 61% o
Slide 5: 9M10 EBITDA Breakdown
9M10 EBITDA Breakdown 86% of 9M10 EBITDA came from regulated and long-term contracted activities % Chg. YoY +9% €2,651m €2,427m Liberalized 14% -23% Activities Iberia 19% 19% Brazil +28% 16% +28% 18% Wind Power 15% 86% Regulated 25% +12% 26% Networks Iberia LT Contracted 25% +5% 24% Generation Iberi
Slide 6: EDP Consolidated operating costs
EDP Consolidated operating costs: OPEX/Gross Profit: 9M10 vs. 9M09 Efficiency Program 2008-12 annual savings (1) (%) (€ million) Chg. YoY Human Resources Supplies and services 160 28% 28% 120 115 45 51 70 69 9M09 9M10 Measures taken Target 2010 Target 2012 9M10 Maintenance of opex/gross profit Cost
Slide 7: Business Areas
Business Areas 6
Slide 8: Electricity & Gas Demand in EDP's Key Markets
Electricity & Gas Demand in EDP’s Key Markets Brasil Portugal Spain Electricity Electricity Gas (Total Market) Electricity Gas (Total Market) 9.0% 7.3% 6.1% 3.4% 5.2% 3.6% 2.9% -1.6% -1.6% 9M10 vs. 9M09 9M10 vs. 9M08 -13.6% Brazil: Sound growth of Brazilian economy, low impact from international cri
Slide 9: Long Term Contracted Generation Iberia (24% of EBITDA)
Long Term Contracted Generation Iberia (24% of EBITDA) EBITDA Long Term Contracted Generation (€ million) PPA/CMEC Special regime (1) +5% 611 639 +33% +3% 9M09 9M10 • Special regime: +94% output from mini-hydro; +46MW of installed capacity (since Jan-09 to date) • PPA/CMEC: ROA of 8.5% pre-tax real;
Slide 10: Market Environment in 9M10
Market Environment in 9M10 Spain – Electricity wholesale spot and final price Forward Energy Markets for 2011 (€/MWh) (€/MWh) Gas cost NBP (UK) OMIP power price (Spain) Spot Price Final Price EDP Avg Thermal Gener. cost Gas cost (Iberian proxy, oil linked) 55 45 35 25 15 Jan-10 Mar-10 Mai-10 Jul-10
Slide 11: Liberalised Energy Activities Iberia (14% EBITDA)
Liberalised Energy Activities Iberia (14% EBITDA) EBITDA Liberalised Activities (€ million) +30% -23% 478 368 284 9M08 9M09 9M10 Volume sold (TWh) 24 +54% 37 Gross Margin (€/MWh) 20.6 -45% 11.4 Lower gross margin per MWh vs. 9M09 as expected, in line with hedging previously stated Higher thermal out
Slide 12: Liberalised Electricity & Gas Supply in Portugal & Spain
Liberalised Electricity & Gas Supply in Portugal & Spain Electricity Liberalised Supply – Portugal & Spain Gas Supply – Portugal & Spain Volume Sold (TWh) # Clients (‘000) Volume Sold (TWh) # Clients (‘000) Portugal Spain Portugal Spain Last Resource Supply in Spain +32% +11% +61% +57% 25.2 825 22.9
Slide 13: Liberalised Energy Activities Iberia: Forward Contracting
Liberalised Energy Activities Iberia: EDP: Electricity Forward Contracting - 2010 EDP: Electricity Forward Contracting – 2011 (%) (%) Pool Purchases Not Contracted 29TWh Hydro 8% contracted Nuclear 7% with ~65% Coal 28% clients 100% Contracted CCGT 56% Expected output Sales Expected output Sales • C
Slide 14: Regulated Energy Networks Iberia (26% of EBITDA)
Regulated Energy Networks Iberia (26% of EBITDA): EBITDA (€ million) Gas Iberia Electricity Spain +12% Electricity Portugal 678 607 +47% -4% +5% 9M09 9M10 • Electricity Portugal: 1% YoY rise in regulated revenues, 2%YoY decline in operating costs. • Electricity Spain: Recurrent EBITDA +1% YoY; Adjus
Slide 15: Regulated Energy Networks Iberia: Demand recovery, efficiency improvements
Regulated Energy Networks Iberia: Demand recovery from industrial sector, efficiency improvements Energy Distributed Efficiency Ratios (annualised) (TWh) (€) Electricity Distributed Gas Distributed Opex(1)/Km Network Opex(1)/Client Connected Spain Portugal +5% 42.4 -4% 40.5 -3% 2.1x 2,74 2,67 39.3 8
Slide 16: EDP Renováveis (18% of EBITDA): EBITDA up 28% YoY
EDP Renováveis (18% of EBITDA): EBITDA up 28% YoY Installed Capacity Output Average Selling Prices (EBITDA MW) (GWh) Europe (€/MWh) USA ($/MWh) +27% +35% 6,181 9,818 -6% 4,882 7,295 89.9 84.6 +3% 48.1 49.4 9M09 9M10 9M09 9M10 9M09 9M10 9M09 9M10 27% increase of installed capacity; 35% growth of tota
Slide 17: Wind power prices
Wind power prices Production Breakdown Avg. Selling Price per MWh 9,818 GWh 9M10 9M09 % Portugal/France: Tariffs CPI updated Tariffs, PPAs Poland: first park in 2010: (€109/MWh: 16% & Merchant €98 €97 +1% market + PPA on green certificates) 78% hedged or protected by floor Market + Premium €78 €86 -
Slide 18: Brazil (19% of EBITDA)
Brazil (19% of EBITDA) Evolution of EBITDA of EDP Brasil Evolution of EBITDA of EDP Brasil (BRL millions) (€ million) Generation & Other Distribution +28% +5% 1,159 495 1,103 387 -1% +10% 9M09 9M10 9M09 9M10 EBITDA +28% YoY; +5% in local currency + 22% appreciation of BRL vs. EUR Electricity distrib
Slide 19: Consolidated Financials
Consolidated Financials 18
Slide 20: Consolidated Capex 9M10: 74% invested in expansion
Consolidated Capex 9M10: 74% invested in expansion Consolidated Capex (€ million) 1,959 Brazil Wind Power CCGT Iberia 7% • 62% USA, 11% Spain, 23% Rest of Europe 3% Hydro Portugal 8% • Projects ongoing: 48%; projects concluded: 52% Expansion Hydro in Portugal under construction Capex €1,453m • 1.8GW
Slide 21: Capex 2011-12: Reduction to €2.1bn/year
Capex 2011- 2011-12: Reduction to €2.1bn/year Avg. Capex 2011-12E: ~€2.1bn/year (GW) ~2.9 ~2.1 Other 1% Brazil 7% Expansion ~2.3 Hydro 28% Expansion ~1.7 Wind 64% Maintenance Maintenance ~0.6 ~0.6 Capex 2010E Capex 2011-12E Expansion Breakdown Downward revision of expansion capex plan in US wind for
Slide 22: Net Regulatory Receivables by Sep-10
Net Regulatory Receivables by Sep- Sep-10 Regulatory Receivables (€ million) Regulatory Receivables from CMECs: €520m (-€66m vs. Dec-09) • €120m created in 9M10 (low coal production and low electricity prices) 1,128 • ~€275m are being recovered in 2010; remaining to be recovered in 2011 Portugal 520
Slide 23: Construction in Progress & Hydro Concession Payments
Construction in Progress & Hydro Concession Payments €2.5bn Soto 5 424 MW CCGT in Spain: To start operations in Jan-11 93% of total investment already incurred CCGT Spain 0.3 Pécem Coal plant in Brazil: 15 Year PPA contract, 360 MW attributable capacity Brazil 0.4 Total investment: BRL1.5bn, 67% of
Slide 24: EDP Net Debt Sep-10 Impacted by Construction in Progress & Regulatory Receivables
EDP Net Debt Sep- Sep-10 Impacted by Construction in Progress & Regulatory Receivables Impact on Regulatory Receivables & Works in Progress on Net Debt Net debt / EBITDA (€ billion) (X) 16.2 1.1 2.5 1.4 13.7 1.0 4.6 12.6 4.3 3.9 Hydro Concession Payments Net Debt Regulatory Construction in Adjusted
Slide 25: Net Debt Breakdown
Net Debt Breakdown Debt by Interest Rate Term Debt by Currency Debt by Source of Funds Fixed USD Banks 20% 44% 33% BRL 8% 56% 72% 67% Capital Floating EUR Market Dec-09 Sep-10 Rating Last Rating Action Net Debt/EBITDA 4.2x 4.6x Standard & Poors A-/Negative/A2 29/10/2010 Net Debt/EBITDA Adjusted (1)
Slide 26: EDP financial liquidity position
EDP financial liquidity position (€ million) Sources of liquidity (Sep-10) Instrument Maximum Number of Utilised Available Maturity Amount counterparties Revolving Credit Facility (US$1.5bn) 1,099 22 1,099 - 02-07-2014 Revolving Credit Facility 1,600 19 - 1,600 04-03-2012 Domestic Credit Lines 244 1
Slide 27: EDP consolidated debt maturity profile
EDP consolidated debt maturity profile EDP consolidated debt maturity profile (September 30, 2010) (€ million) Commercial paper Other companies Average Debt Maturity EDP SA + BV Brazil: € 50 M Sep-10: 5 years Project Finance: € 32 M 4 .000 €0.7bn Bond: Mar-11 3 .500 20% €0.5bn Bond: Jun-11 3 .000 14
Slide 28: EDP main sources and uses of funds in 2010-2012
EDP main sources and uses of funds in 2010- 2010-2012 Sources of funds Use of funds • Refinancing needs in the bond market 2010-2012: Bond maturing in Mar-11: €0.7bn • Cash & Equivalents (Sep-10): €1.4bn Bond maturing in Jun-11: €0.5bn • Available Credit Lines (Sep-10): €2.5bn Bond maturing in Jun-1
Slide 29: Net Profit up 4% YoY
Net Profit up 4% YoY (€ million) 9M09 9M10 ∆ % ∆ Abs. EBITDA 2,427 2,651 +9% +224 11% increase of installed capacity Net Depreciations 955 1,148 +20% +193 Acquisition of gas networks + IFRIC18 in Spain and Provisions EBIT 1,472 1,503 +2% +31 Lower cost of debt: 3.5% in 9M10 vs. 4.0% in 9M09 Net Inte
Slide 30: Prospects
Prospects: EBITDA Regulated & LT contracted activities: Stable operating performance in line with low risk profile 2010E EDP expects to deliver current consensus Net Debt Timing for securitization of Spanish tariff deficit still not 100% clear 2010E Net debt 2010E: ~€16.0bn (assuming stable forex ra
Slide 31: A resilient business model in a challenging environment
A resilient business model in a challenging environment • Reported EBITDA +9% (key growth drivers: Brazil and Wind Power) Improvement of • Net interest costs: -9% (cost of debt down from 4.0% to 3.5%) returns • Net Profit: +4% • Total Installed capacity: +11% YoY in 9M10 (wind capacity +27%) Continu
Slide 32: IR Contacts, Visit EDP Website, Next Events
IR Contacts Miguel Viana, Head of IR Sónia Pimpão Elisabete Ferreira Ricardo Farinha Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Visit EDP Website Next Events November 17th/19th: London Roadshow Site: www.edp.pt November 30th: NYC, JP Morgan Iberian Conference Link Results & Presentations:
EDP - Energias de Portugal — 9M10 Earnings Presentation on 6ix