Naturgy Energy Group, S.a. · BME:NTGY
Naturgy Energy — H1 2024 Earnings Presentation
39 slides from Naturgy Energy's earnings presentation, Jul 23, 2024
Slide 1: Transforming Together
Transforming Together 23 July 2024
Slide 2: Disclaimer
Disclaimer This document is the property of Naturgy Energy Group, S.A. (Naturgy) and has been prepared for information purposes only and contains inside information per the 2014 market abuse regulation. This communication contains forward-looking information and statements about Naturgy. Such inform
Slide 3: Agenda
1. 1H24 results 2. Outlook 2024 3. Track record 2021-24 4. Future 2025-30 3
Slide 4: Results 1H24
Se | : res 1 Results 1H24 Naturgy
Slide 5: Record results amid a more competitive scenario
1. 1H24 results Record results amid a more competitive scenario EBITDA Net income Efficient operational management • Secured competitive procurement prices • Higher installed renewable capacity €2,846m €1,043m • Opex reduction despite higher activity and asset base • Regulatory proactivity Forward-l
Slide 6: Energy markets evolution
1. 1H24 results Energy markets evolution Brent (USD/bbl) TTF (€/MWh) Spanish electricity pool (€/MWh) 5% 49% 56% 58 88 80 84 30 39 1H23 1H24 1H23 1H24 1H23 1H24 Henry Hub (USD/MMBtu) JKM (USD/MMBtu) CO2 (€/t) 29% 45% 27% 87 3 64 2 19 11 1H23 1H24 1H23 1H24 1H23 1H24 6
Slide 7: Income statement
1. 1H24 results Income statement €m 1H24 EBITDA contribution Net sales 9,071 Procurement (5,301) Gross margin 3,770 Opex & levies (924) Businesses Activities Geographies EBITDA 2,846 D&A and others (990) EBIT 1,856 Financial result (159) Profit before taxes 1,697 Distribution 51% Gas 55% Spain 54% E
Slide 8: EBITDA evolution by business unit
1. 1H24 results EBITDA evolution by business unit €m 195 2,849 59 2,846 105 70 1 46 (479) 1H23 Distribution Energy Thermal Renewable Renewable Supply Holding 1H24 management generation generation gases 8
Slide 9: EBITDA evolution by key drivers
1. 1H24 results EBITDA evolution by key drivers €m 2,849 430 2,846 (108) (325) 1H23 FX Energy Management & 1H24 scenario business evolution 9
Slide 10: Cash flow evolution
1. 1H24 results Cash flow evolution €m 1H24 Gross investment mix EBITDA 2,846 Taxes (229) Financial costs (215) Non-cash items (302) Funds from operations 2,100 Businesses Change in working capital (99) Cash flow from operations 2,001 Gross investment (947) Tax equity, contributions & subsidies 246
Slide 11: Liquidity and Net debt evolution
1. 1H24 results Liquidity and Net debt evolution €m Liquidity 9,237 9,749 ND/EBITDA 2.2x 2.2x Average 3.9% 4.0% cost of debt % fixed rated 75% 70% 12,090 384 45 11,838 (681) Net debt FCF Dividends FX & others Net debt FY23 1H24 11
Slide 12: Gas networks
1. 1H24 results Gas networks EBITDA (€m) 126 961 Spain: remuneration adjustments from 2021 regulatory framework as well as demand affected by mild temperatures 847 Mexico: regulatory tariff updates and 8 26 positive FX impact (19) (27) Brazil: regulatory tariff updates in a negative inflation enviro
Slide 13: Electricity networks
1. 1H24 results Electricity networks EBITDA (€m) 11 499 Spain: higher remunerated RAB as well as 51 improvement of the impact on energy losses 19 Panama: positive impact from regulatory 418 review and higher demand due to rise in temperatures Argentina: regulatory tariff updates and higher demand pa
Slide 14: Energy management
1. 1H24 results Energy management EBITDA (€m) 2024 price agreement reached with Sonatrach • Confirms the solid relationship between Sonatrach and Naturgy 863 • Ensures prices reflect current market conditions 384 • Underlines commitment to security of supply 1H23 1H24 Active management of hedged LNG
Slide 15: Thermal generation
1. 1H24 results Thermal generation EBITDA (€m) 58 285 Spain: lower thermal gap due to higher 239 renewable resource led to lower production and lower margins; progress on (12) EU regulatory process to introduce capacity payments in 2025 Mexico: higher revenue driven by higher availability and produc
Slide 16: Renewable generation
1. 1H24 results Renewable generation EBITDA (€m) Spain: higher installed capacity and higher 15 305 production, notably increased hydro and 8 wind generation 44 3 USA: start of operation of the first solar plant developed in Texas; higher expenses 235 for the start of operations and the management o
Slide 17: Supply
1. 1H24 results Supply EBITDA (€m) Final favorable judicial ruling on the collection of the electricity subsidies for liberalized customers in 2016-21 period Power: lower prices and margins due to 452 scenario compensated by the termination 347 of regulatory price caps (RDL) Gas: margins resiliency
Slide 18: Sustainability
1. 1H24 results Sustainability Environment Social Emissions intensity Emissions-free installed capacity Women in management positions Employee Net Promoter Score1 (tCO2/GWh) generation 10% 1H23 1H24 1H23 1H24 1H23 1H24 38% 41% 35% 37% 14 29 241 217 Awarded “Great place to work” certificate Note: 1.
Slide 19: Steady progress on our transformation
1. 1H24 results Steady progress on our transformation Record results amid a Continuous more competitive improvement of scenario operational and risk management “Iberian discipline Capital “Iberian Responsible exception” and cap of optimization exception” progress oncapthe on gas prices capital struc
Slide 20: Outlook 2024
Outlook 2024 Naturgy
Slide 21: Energy commodities moderation after 2 years
2. Outlook 2024 Energy commodities moderation after 2 years Brent (USD/bbl) TTF (€/MWh) 101 131 83 83 71 39 48 33 FY21 FY22 FY23 FY24E FY21 FY22 FY23 FY24E Spanish electricity pool (€/MWh) CO2 (€/t) 168 81 84 66 112 53 87 57 Source: FY21 FY22 FY23 FY24E FY21 FY22 FY23 FY24E Real prices up to June an
Slide 22: Positive outlook for 2024
2. Outlook 2024 Positive outlook for 2024 Networks Energy management Shareholder remuneration policy Spain: growth in electricity and 2024 price agreement with Annual dividend floor of 1.40 stability in gas Sonatrach €/share subject to BBB rating LatAm: positive regulatory reviews All LNG volumes so
Slide 23: Guidance for the year
2. Outlook 2024 Guidance for the year EBITDA (€m) Net income (€m) 4,900 >5,300 1,700 >1,800 3,529 1,214 FY21 FY24E FY24E FY21 FY24E FY24E consensus guidance consensus guidance Gross investment (€m) Net debt (€m) Hybrids 1.5 0.5 (€bn) 2,800 ~2,600 13,400 1,801 12,831 ~13,000 FY21 FY24E FY24E FY21 FY2
Slide 24: Share price performance evolution since 2021 closing
2. Outlook 2024 Share price performance evolution since 2021 closing 110 18 Jan-24: MSCI review 100 €Stoxx Utilities 90 80 16 Apr-24: 21.94 €/sh. Takeover talks 22 July 70 10 Jun-24: -18% vs. €Stoxx End of talks Utilities 60 Dec-21 Dec-22 Dec-23 Jul-24 24
Slide 25: Market valuation Naturgy vs. Iberian peers
2. Outlook 2024 Market valuation Naturgy vs. Iberian peers EV/EBITDA1 (x) P/E1 (x) 29% premium 12% discount 25% premium 6% discount 22.9 12.1 18.3 9.4 6.8 7.7 11.8 12.6 Notes: 1. FY21 multiples based on market prices as of 30 December 2021 and reported FY21 financials; FY24E FY21 FY21 FY24E FY24E FY
Slide 26: Track record 2021-24
3 Track record 2021-24 26
Slide 27: 2021 Strategic Plan achievements
3. Track record 2021-24 2021 Strategic Plan achievements Capital discipline Decarbonization Risk management Net debt reduction (including Increase of renewable capacity in Risk management and hedging hybrids): €2bn Spain, USA and Australia through unprecedented volatility Investment 2021-24E: €8.4bn
Slide 28: Advancing in energy transition
3. Track record 2021-24 Advancing in energy transition Installed electricity generation capacity Renewable pipeline 18.1 GW 3.7 PV 15.6 GW No (1.8) 0.6 Wind No emissions 2.2 GW emissions Under construction Hydro Nuclear Low 15 GW emissions With grid access CCGTs Low emissions > 100 additional own Hi
Slide 29: Value creation through balanced capital allocation
3. Track record 2021-24 Value creation through balanced capital allocation Investment and D&A evolution (€m) ROIC1 Accumulated investment +380 bps Accumulated D&A 10.6% 8,415 6,023 5,815 6.8% 3,352 2,830 4,284 1,501 1,446 FY21 FY22 FY23 FY24E FY21 FY24E Investment, dividends and net debt evolution (
Slide 30: Future 2025-30
Future 2025-30 Naturgy y
Slide 31: Decarbonization is unstoppable requiring all available resources and technologies
4. Future 2025-30 Decarbonization is unstoppable requiring all available resources and technologies Decarbonization must address: Action vectors Adaptation of Investment in renewable Sustainable distribution electricity generation growth infrastructure Introduction of Assurance of flexible biomethan
Slide 32: New 2025-30 Strategic Plan ready by year-end
4. Future 2025-30 New 2025-30 Strategic Plan ready by year-end Objetives 1 Ambitious and attractive for all stakeholders 2 Focused on growth and value creation since 1843 3 Committed to responsible decarbonization 32
Slide 33: Appendix
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Slide 34: Alternative Performance Metrics (i/iv)
Appendix Alternative Performance Metrics (i/iv) Naturgy's financial disclosures contain magnitudes and metrics drafted in accordance with International Financial Reporting Standards (IFRS) and others that are based on the Group's disclosure model, referred to as Alternative Performance Metrics (APM)
Slide 35: Alternative Performance Metrics (ii/iv)
Appendix Alternative Performance Metrics (ii/iv) Alternative performance Reconciliation of values Definition and terms Relevance of use metrics 30 June 2024 30 June 2023 Measure of the investment effort of each Net Investments (net CAPEX) CAPEX- Other investment receipts/(payments) 701 million euros
Slide 36: Alternative Performance Metrics (iii/iv)
Appendix Alternative Performance Metrics (iii/iv) Alternative performance Reconciliation of values Definition and terms Relevance of use metrics 30 June 2024 30 June 2023 Measure of the cost of financial debt without considering income from financial Cost of financial debt - "Interest (financial Cos
Slide 37: Alternative Performance Metrics (iv/iv)
Appendix Alternative Performance Metrics (iv/iv) Alternative performance Reconciliation of values Definition and terms Relevance of use metrics 30 June 2024 30 June 2023 3.8% = (326 - 41 - 14) * (360 / 180) / Annualized financial expense of the operations 14,446 included in the gross financial debt
Slide 38: ESG Metrics
Appendix ESG Metrics 1H24 1H23 Change Comments Health and safety Accidents with lost time1 units 9 4 - Significant increase in accidents vs. 1H23, although mostly with minor consequences. Naturgy has launched its 24-25 global plan on Health & Safety LT Frequency rate2 units 0.27 0.12 - with transver
Slide 39: Contact
capitalmarkets@naturgy.com www.naturgy.com Av. de América 38, Madrid 39