1. business and industrial

EDP Renováveis
9M14 Results
October 29th, 2014
15:00 CET | 14:00 UK/Lisbon
www.edpr.com
1
Disclaimer
This presentation has been prepared by EDP Renováveis, S.A. (the "Company") solely for use at the presentation to be made on October 29th, 2014. By attending the meeting
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IMPORTANT NOTE: Pursuant the implementation of IFRS 11, joint ventures previously consolidated using proportional method are from 2014 onwards consolidated by
equity method. 2013 data presented in this document was restated for comparison purposes.
2
Agenda
I
9M14 Highlights
II
9M14 Operational and Financial Performance
III
Conclusions
3
9M14 Highlights
Executing a solid strategic agenda
• Operational excellence with 97.5% availability and outstanding 29% load factor
Quality assets
• Output increasing +5% YoY to 14.4 TWh with US representing 51% of the generation
• Successful O&M strategy and decreasing Adj. Opex/MW by 6% YoY
• EBITDA of €648m (-6% YoY) and Net profit of €56m impacted by operations in Spain
(regulatory changes, magnified by low wholesale prices)…
Selective and
profitable growth
• …improving since 1Q: EBITDA 1Q -9% YoY; 2Q -4% YoY; 3Q -1% YoY
• Executing growth plan with new 50 MW YTD and 634 MW under construction
mostly in the US
• €549m of OCF from a portfolio with a remaining expected lifespan of 20 years
Self-funding
business model
• >€0.4bn (60%) of the 2017 asset rotation program already signed securing additional
funds to execute value accretive growth plan
• US tax credits captured through Tax Equity ($332m) in July, August and October
5
9M14 Operational and
Financial Performance
First-class assets with 5.2 average years,
delivering solid operating metrics
Installed Capacity
(EBITDA MW + Equity Consolidated)
Portugal
13%
Spain
27%
Load Factor and Technical Availability
Rest of
Europe
16%
8.6 GW
+50 MW YTD
+373 MW YoY
Brazil
1%
North
America
43%
EDPR
Technical
Availability
9M14 vs.
average
9M14
∆% YoY
26%
-0.4pp
32%
+1.0pp
101%
32%
+3.7pp
102%
29%
+0.3pp
103%
97.5%
-0.2pp
104%
3Q14 vs.
average
89%
95%
105%
93%
9M14 load factor is 3% above average on the back of high availability (97.5%) and following
outstanding wind resource in 1Q14 but below average in 3Q14
Notes: Installed capacity includes EDPR’s Equity consolidated: 487 MW of EDPR’s interest in ENEOP, and equity stakes of 174 MW in Spain and 179 MW in the US.
7
Electricity output increased 5% to 14.4 TWh on
ongoing capacity growth and premium performance
Electricity Production Breakdown
(TWh, %)
Electricity Production
(TWh)
+5%
13.7
9M13
+0.4
Capacity
Growth
∆% YoY
+0.2
Load Factor
Performance
14.4
9M14
1%
1%
51%
51%
48%
48%
9M13
9M14
+13%
+4%
+5%
Production increased across all regions, with North America representing 51% of the total output
8
Selling price decreased 8% YoY to €59/MWh
impacted by lower realised price in Europe
EDPR Price Evolution
(€/MWh)
9M14 % YoY
EU
€80.9
-13%
Mainly following lower
prices in Spain after
regulatory changes
NA
$51.0
+4%
Supported by higher
PPA/Hedge output
(+5% YoY incl. hedges)
BR
R$343
+11%
Inflation + working hours
adjustment
-8%
€64.6
€59.2
1Q14: €57/MWh
2Q14: €59/MWh
3Q14: €64/MWh
9M13
9M14
Price recovery since 1Q14
9
EU: recovery in average selling price with 3Q14
12% above 1Q14 price…
EU Price: YoY evolution drivers
(%, €/MWh)
EU Price: Quarterly evolution
(€/MWh)
Price
• Impacted by Spanish
regulation changes (-23%)
• Hedging strategy in place:
4Q14: 0.7 TWh @ €48
2015: 1.6 TWh @ €47
-22%
Mix
• Strong load factor in PT
• 29% higher production YoY
in RoE driven by new wind
farms
+9%
+12%
95.0
94.2
88.6
79.8
76.4
84.0
85.6
EDPR EU
9M14 performance
impacted by Spanish
regulatory change
-13%
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
…but 9M14 average price still impacted by Spanish regulatory changes and 1Q14 low wholesale prices
10
NA: 9 M14 price performance enhanced by
increase in merchant price and production mix…
9M14 Price
NA Price: Quarterly evolution(1)
($/MWh)
48.2
47.8
52.4
46.8
48.1
$/MWh
52.7
53.2
US PPA/
Hedge
Stable price at $52 YTD,
with mix offsetting predefine price escalators
US Spot
Higher gas prices
REC sales at attractive
prices ($12/MWh)
Canada
Stable price YTD
(Feed-in Tariff)
EDPR NA
9M14 performance
supported by visible PPA
and REC sales
$52
% YoY
-1%
+24%
$41
(2)
($45) +36% adj.
$134
-
$51
+4%
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
+6% adj. (2)
…driving overall 9M14 average selling price up 6% YoY, considering hedging gains
(1) Includes Canada feed-in tariff ($134/MWh); (2) Adjusted for hedging gains in 9M13 and 9M14; Marked-to-market derivatives accounted in financial results.
11
Revenues totalled €930m (-4% YoY)…
Main drivers for Revenues performance
Quality assets: +373 MW YoY
Top-notch load factor: 29%
High availability: 97.5%
Revenues (1)
(€ million)
-4%
971
930
Solid electricity output: +5% YoY
EU +5%; NA +4%; BR +13%
Lower average selling price: -8% YoY
EU -13%; NA +4%; BR +11%
9M13
9M14
…negatively impacted by lower average selling price, forex depreciation (€10m),
although mitigated by higher generation
(1) Do not include gains with hedges accounted in financial results
12
Operating costs per average MW
decreasing 6% YoY…
Opex (excludes Other Operating Income)
(€ million)
Adj. Opex/MW (ex-Levies & Write-Offs)
(€k)
-4%
316
Levies &
Write-Offs
303
-10%
34.4
32.3
-2%
Adj. Opex(1)
9M13
Other
Operating
Income
-6%
30
9M14
-€9m
9M13
9M14
21
…showing ongoing focus on efficiency and control over Opex
Notes: (1) Opex excluding levies and write-offs.
13
EBITDA performance impacted by activity in Spain;
remaining markets contributing with 9% growth
EBITDA
(€ million)
EBITDA
(€ million)
-6%
-33%
Spain
-5%
686
Spain
+9%
adjusted
648
9M13
9M14
EBITDA: Quarterly Evolution
(%, YoY)
-4%
-1%
-9%
9M13
9M14
1Q14
2Q14
3Q14
4Q14
3Q14 EBITDA already showing performance in line with previous year
14
Net profit in the period totalled €56m
EBITDA to Net Profit
(€ million)
€m YoY
EBITDA
648
D&A
336
EBIT
312
-€38m
Top-line growth impacted by new regulation
-€2m
Stable D&A due to lower impairments in 9M14
-€40m
In line with EBITDA performance
-€9m
Lower financial debt YoY & stable debt cost (5.3%)
-€5m
Lower Pre-tax profit (tax rate of 28%)
(1)
Financial
Results
176
38
Taxes
Minorities
42
Net Profit 56
Notes: (1) Includes Share of profit of associates.
+€20m
Strategic partnership and Asset rotation program
-€45m
Impacted by top-line performance
15
Adjusted Net Profit decreased 43% YoY to €56m
(€ million)
9M13
9M14
Reported
Net Profit
101.6
56.1
One-off gains
(8.8)
(3.5)
Write-offs/
impairments
+10.5
+3.3
(1)
Adjusted Net Profit
(€ million)
-43%
-45%
98
56
Forex losses (gains) &
+4.3
Forex derivatives
+0.9
Provisions & other
adjustments
(10.1)
(1.0)
Adjusted
Net Profit
97.6
55.9
-43%
9M13
9M14
9M14 impacted by top line performance on the back of Spanish regulation together with low wholesale prices
Notes: (1) Assets’ revaluation and contracts’ restructuring
16
Solid generation of Cash-Flow with €0.4bn
already available to create shareholder value…
9M14 Cash Available for Growth and Distributions
(€m)
Quality assets delivering
premium cash-flow generation mostly
from PPA and Feed-in Tariffs
549
134
50
339
27
38
20
397
Asset Rotation strategy to increase
cash available to pursue
projects with superior value
9M14 Capex totalled €298m; 634 MW
under construction, mostly in the US
(1)
Operating
Net
TEI
Net
Cash-Flow Interest Payments Dividends
Asset
Rotation
Gov
Grant
…not yet accounting for the proceeds of the Asset Rotation transactions signed in Aug-14 and Oct-14 (>€0.4bn)
Notes: (1) Net Dividends includes dividends paid to non-controlling interests and dividends received from associated companies
17
Conclusions
EDPR is delivering its business plan
9M14 review and near future overview
9M14 Operational and Financial
Performance
Asset Rotation execution already
accomplished 60% of 2017 plan
Premium Operating metrics
Load factor: 29% (3% above average)
High availability: 97.5% (in-line)
2014-17
2015
2014
60%
Completed
>€0.4bn
€0.7bn
9M14 results impacted by Spain
>1 GW
+730 MW
with LT PPA
EBITDA -5% YoY, but performance
improving YTD (1Q: -9%; 2Q: -4%; 3Q: -1%)
1,101 MW
36%
Solid Cash-Flow generation
OCF and alternative funding yielding
€0.4bn of cash available for growth
Over 1 GW of projects in execution
for 2014 and 2015 delivery
270 MW
49%
EV/MW
$1.5m/MW (1)
$2.3m/MW
€1.3m/MW (1)
€1.9m/MW
+120 MW
with LT PPA
>150 MW
PT | FR | PL | IT
Operating CF and Asset Rotation as the engines to execute a self-funded growth strategy
Notes: (1) including all cash-flows generated by the projects since inception
19
Conclusions
Premium assets and high efficiency levels
delivering continuous operational growth
Financial performance in 9M14 impacted by Spanish regulation;
hedging strategy in place
Strong OCF generation and ongoing success in the Asset Rotation
strategy (60% already completed) allow self-funding growth strategy
Growth supported by projects with PPAs
yielding visible returns for medium and long-term
Executing >1 GW of new projects
in the 2014-2015 time horizon
20
IR Contacts
Rui Antunes, Head of Planning & Control and IR
Francisco Beirão
Maria Fontes
E-mail:
Phone:
Fax:
[email protected]
+34 914 238 402
+34 914 238 429
Serrano Galvache 56, Edificio Olmo, 7th Floor
28033, Madrid - Spain
EDP Renováveis online
Site: www.edpr.com
Link Results & Presentations:
www.edpr.com/investors
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