Edp S.a. · EURONEXT:EDP
Edp — Energias de Portugal — Investor Presentation (September 2017)
31 slides from Edp's investor presentation, September 2017
Slide 1: Investor Presentation September 2017
<3 Investor Presentation September 2017 Dow Jones Sustainability Indices In Collaboration with RabecoSAM
Slide 2: Wind & Solar Power, Portugal, Spain, EDP Brasil
Wind & Solar Power 31% of EBITDA (13% North America; 6% Portugal; 6% Spain; 6% Other) Listed subsidiary: EDP Renováveis (EDP has 82.6%) IPO in Jun-08 Wind & Solar Power: 10.1GW A worldwide renewable market leader Portugal Spain EDP Brasil 39% of EBITDA 14% of EBITDA 16% of EBITDA Privatisation in 19
Slide 3: Generation portfolio: low exposure to regulatory/environmental risks
Average Residual Useful Life of EDP’s Generation – 2020E Average Residual Useful Life of EDP’s by Technology(1) Generation Portfolio(1) (Years) Hydro CCGT Wind & Solar Coal with DeNOx Nuclear 48% 24 (33%) 30 (13%) 27 16 (42%) 21 (11%) 11 8 (1%) 0 5 10 15 20 25 30 35 Dec-05 Dec-20 Generation portfoli
Slide 4: Growth supported by 1.7 GW of secured projects
EDPR 2016-20 additions breakdown Name MW CoD with visible projects execution By technology (MW) Built Capacity additions 820 2016 Spain Auction projects 93 <2020E Solar PV Portugal Ventinveste & other 235 2017-19E Wind 8% Onshore Italian auction & other 141 2017-18E RoE 22% +3.5 GW France & Belgium
Slide 5: Electricity Transmission in Brazil: New projects' Key Figures
Electricity Transmission in Brazil: New projects’ Key Figures Revenues Discount vs. Discount vs. ▪ Selected projects: Detailed assessment of all risks RAP (BRLm) Aneel RAP closest bidder (access, environmental, geological) L18/2017 205 47% 11% L21/2017 172 35% 4% ▪ Credible contractors: EPC turn-key
Slide 6: 40bp decline in avg. cost of debt
Net Interest Cost (1) EDP 5-Year Bond Yield (2017 YTD) (€ million) (%) 202 Latest Bond Issues (amount; maturity; yield) 196 1.75 185 1.50 S&P upgrades 179 USD1bn; EDP to 175 1.25 7.1Y; 3.7% investment 168 grade €0.6bn; 1.00 6.7Y; 1.9% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 0.75 0.50 0.7% 1H16 1H17 Jan-17 Mar
Slide 7: Change in Net Debt: Jun-17 vs. Dec-16
Change in Net Debt: Jun-17 vs. Dec-16 (€ billion) +0.7 -0.4 16.9 -0.8 +0.8 15.9 0.6 +0.1 1.0 Regulatory 1.0 Receivables €0.3bn VAT payment (refundable in 2H17) 15.0 €0.3bn income tax on 2016’s securitizations 15.9 Net Debt One-offs (3) FCF Ex-Reg. Reg. Adj, Net Dividends ForEx Net Debt Dec-16 Receiv
Slide 8: EDP EBITDA breakdown per business profile
EDP EBITDA breakdown per business profile (%) Liberalised 25% 26% ▪ EDP’s weight of low-risk EBITDA bodes Gas Distribution 47% well with sector average: 74% vs. 53% ▪ Renewables growth: Assets’ diversification LT Contracted 75% 74% and increasing weight of PPAs with C&I & Regulated 53% counterparts
Slide 9: Guidance: Recurring EBITDA ~€3.6bn
Main drivers Guidance Weak hydro volumes Iberia 1H17 Recurring Gas distribution deconsolidation (most of 2H17) ~€3.6bn EBITDA Wind and hydro capacity increases Efficiency improvements Recurring Net Decline in avg. cost of debt > Recurring Net Profit Short term dilution effect from gas disposals (2H1
Slide 10: Active risk management through transparent business procedures
CMEC ▪ Calculation clearly defined by law, essentially based on historical data 1 final adjustment ▪ EDP to comply with existing contracts ▪ Public audition on June 22nd: ERSE proposes extension of regulatory period from 3 to 4 years Electricity Distribution 2 ▪ RoRAB: Premium vs. 10 year sovereign
Slide 11: EDP dividend policy for 2016-20E
EDP dividend policy for 2016-20E (€/share) +3% 0.190 0.185 Dividend yield 2016(2): ~6% (1) 2015 2016 2020 E Target payout ratio 65-75% Dividend floor increased by 3% to €0.19/share from 2016(1) EPS growth to deliver sustainable dividend increases (1) Dividend per share paid on May 17th, 2017; (2) Ba
Slide 12: Iberian operations
Iberian operations
Slide 13: Next regulatory period for Electricity distribution Portugal
Return on RAB: Current Methodology 2017 Allowed Revenues (%; bp) Regulatory 4 years up 3 years up Pass- period to Dec-19(1) to Dec-17 through(3) RoR Cost of 24% 9.5% RoR 6.48%(2) Capital Return on 16% RoR 6.5% Floor/Cap: 6.75% Asset Base 6%/9.5% 6.0% 25% 34% Costs Regulated €182m €1,232m Revenues (2
Slide 14: Hydro production in 1H17 below historical average
Hydro Coefficient in Portugal: 2016/1H17 EDP Hydro Production in Iberia: 2016/1H17 (Deviation vs. avg. hydro year) (TWh) 91% 62% 6.7 45% 5.8 3.1 2.0 2.2 1.6 -36% -48% -66% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 1H16 1H17 1H16 1H17 +68% -42% 12.5 -62% 4.7 Hydro production in 1H17
Slide 15: Hydro and Nuclear, Hydro Pumping, Coal in Iberia
Hydro and Nuclear Hydro Pumping Coal in Iberia (TWh/year on avg. Hydro year) Annual TWh in avg. hydro year Efficiency vs. Transportation costs Concession end Peers’ plants EDP’s plants 14 12 1 +3x Nuclear 2028 Transp. Costs (€/MWh) 4.7 8 Hydro 13 2047 4 Aboño 2 1.1 Sines 0 31 33 35 37 2018-20 2010-1
Slide 16: By 2020 avg. hydro production to be covered by sales
EDP Conventional electricity production vs. sales to clients in Iberia (Avg. annual volume, in TWh) Main drivers in 2016-20E Sales to clients/ Own production +1.93x +1.03x ▪ Until 2017, CMEC mitigates merchant exposure 39 39 ▪ Post CMECs, integration between 37 37 Last Resort Supply generation and s
Slide 17: Portugal: Electricity System Regulatory Receivables
Portugal: Electricity System Regulatory Receivables (€bn) Share of total receivables in the system 5.21 0.09 5.09 5.05 -0.20 -0.04 Other 79% EDP 2.24 21% 1.00 1.08 Dec-15 1H16 2H16 Dec-16 1H17 Jun-17 2H17(E) Dec-17(E) Demand(1) (YoY Chg.) -0.4% +1.8% -0.9% Wind Factor (1.0=avg.) 1.09 0.91 0.99 Speci
Slide 18: ANNEXES
ANNEXES 17
Slide 19: EDP Shareholder Structure
EDP Shareholder Structure (August 21st, 2017) FREE FLOAT, CHINA THREE ▪ Dual management model: Executive Board of Directors GORGES, 21.3% 35.2% (EBD) and General and Supervisory Board (GSB) CAPITAL GROUP, ▪ All major corporate and strategic decisions scrutinised by the 12.0% TREASURY GSB after propo
Slide 20: EDP Renováveis installed capacity and contracts
Offshore wind project Canada under development UK Other Europe: 30 Long Term PPAs or market price + green Belgium certificates - - US - 71 1% Poland - 4,631 46% France 418 4% 502 2 Offshore wind projects - ▪ ~87% LT PPAs/Hedged under development 388 4% ▪ ~13% Merchant price Romania Spain 4 200 2% Po
Slide 21: EDP Brasil: Geographical footprint
EDP Brasil: Geographical footprint (1) Hydro Power Plant Thermal power plant Distribution Concession Area Electricity Generation Jari 373MW (50%) C. Caldeirão 219MW (50%) Avg. Price: R$121/MWh Avg. Price: R$102/MWh ▪ Total Installed Capacity in operation: 2.5GW (hydro & coal) End of PPA: 2044 End of
Slide 22: EBITDA Growth 2015-20
EBITDA Growth 2015-20(1) (%) CAGR CAGR ex-Forex Avg. capacity +8% CAGR in 2015-20 additions EDPR 3% with long term PPAs or feed-in tariffs, mostly in US 3.6 8% 37% EBITDA in local currency +4% CAGR, eroded by EDPR 30% EDP Brasil conservative assumption on EUR/BRL 13% 4% EDP Brasil 16% 0% Slight impr
Slide 23: Net Investments 2016E-20E
Net Investments(1): 2016E-20E Breakdown of accumulated Net Investments(1): 2016E-20E (€bn) (% of € bn) 1.7 1.6 Regulated Brazil 1.2 Networks 8% 1.1 Net Expansion 1.0 Investments 30% 0.6 Iberia 84% 22% 54% LT Contracted Regulated & 0.6 0.6 0.6 Maintenance Renewables LT Contracted 16% Avg. Avg. Avg. L
Slide 24: EBITDA and Recurring EBITDA
EBITDA Recurring EBITDA (€ million) (€ million) % Chg. YoY ForEx impact: -8% +20% 2,067 2.006 1.902 61 1,902 EDP Brasil 12% +31% Non recurring 17% items(1) ForEx EDP Renováveis 32% +11% impact: +3% 38% Recurring EBITDA 2,006 1,902 Generation & (2) -5% 31% Supply Iberia -43% 19% Networks 25% +3% 27%
Slide 25: Opex and efficiency programme
Weight on Opex Business area Indicator 1H17 YoY Change Main drivers ▪ Avg. MW: +6%; Avg. # contracts: +6% 56% Iberia Opex +1% ▪ Thermal prod.: +77%; Inflation Portugal +1.4% Core Opex/MW ▪ Average installed capacity: +8% 25% EDPR Flat (ex-forex): ▪ Opex ex-forex: +8% Opex in BRL ▪ Opex in BRL:+3% 19
Slide 26: Net Profit
Net Profit (€ million) 1H16 1H17 ∆% ∆ Abs. (€ million) % Chg. YoY EBITDA 2,067 1,902 -8% -164 Net Depreciations and -5% 739 710 -4% -29 Provisions 472 450 EBIT 1,327 1,192 -10% -135 Financial Results & (412) (363) +12% +50 Associated Companies Income Taxes 243 119 -51% -124 Recurring 517 493 Net pro
Slide 27: Consolidated debt by currency and maturity profile
EDP consolidated debt by currency: Jun-17 EDP consolidated debt maturity profile as of Jun-17 (%) (€ billion) Commercial Paper Hybrid Bond Avg. Debt Maturity: Other Subsidiaries EDP S.A. & EDP Finance BV PLN 4.6 years USD 3% 4.0 22% 3.5 3.0 2.5 BRL 7% 2.0 68% 1.5 EUR 1.0 0.5 0.0 2017 2018 2019 2020
Slide 28: Financial liquidity and refinancing needs
Financial liquidity (Jun-17) Refinancing needs 2017-2019 ▪ Cash & Equivalents: €2.0bn ▪ 2017: €2.2bn 6.625% GBP Bond maturing @ Aug-17 €0.32bn ▪ Available Credit Lines: €3.8bn 5.75% Eurobond maturing @ Sep-17 €0.75bn Revolving Credit Facility (Jun-19) €3.6bn Bank Loans and ECP €1.1bn Other RCF/Credi
Slide 29: Bonds outstanding
Amount Bonds Currency Maturity Coupon Market Price (Bid) Market Yield ISIN Code (million) EDP BV Euro MTN EUR 750 21/09/2017 5.750% 100.2 0.8% XS0831842645 EDP BV Euro MTN EUR 650 15/04/2019 2.625% 104.2 0.0% XS1057345651 EDP BV Euro MTN EUR 300 29/06/2020 4.125% 111.4 0.1% XS0223447227 EDP BV Euro
Slide 30: Disclaimer
This document has been prepared by EDP - Energias de Portugal, S.A. (the "Company") solely for use at the presentation to be made on this date and its purpose is merely of informative nature and, as such, it may be amended and supplemented. By attending the meeting where this presentation is made, o
Slide 31: IR Contacts
IR Contacts Miguel Viana, Head of IR Sónia Pimpão João Machado Maria João Matias Sérgio Tavares Noélia Rocha E-mail: ir@edp.pt Phone: +351 210012834 Visit EDP Website Next Events Site: www.edp.pt Sep 8th: BPI Iberian Conference (Cascais) Link Results & Presentations: Sep 13th: BBVA Iberian Conferenc
EDP - Energias de Portugal — Investor Presentation (September 2017) on 6ix