Company Results and 2013-2017 Business Plan Milan, 22 nd May 2013 - - PowerPoint PPT Presentation

Company Results and 2013-2017 Business Plan

Milan, 22nd May 2013

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2012 Results Q1 2013 Results 2013 – 2017 Business Plan Appendix

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2012 HIGHLIGHTS

Euro millions

Dec 12 ∆ vs Dec 11

∆ %

Dec 11 INSTALLED CAPACITY - MW 716 + 32

+ 5%

684 ENERGY PRODUCTION - GWh 1,793 + 233

+ 15%

1,560 REVENUES - €m 274.6 + 26.0

+ 10%

248.6 EBITDA - €m 158.0 + 16.2

+ 11%

141.7 NET EARNINGS - €m (Excluding One-Offs) 26.6

• 10.1
• 28%

36.8 NET EARNINGS - €m (85.5)

• 105.3
• 531%

19.8

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Dec 2012 One-Off December December

• Op. activities

Items 2012 2011 Revenues 274.6

• 274.6

248.6 Net Operating costs (116.7)

• (116.7)

(106.9) Ebitda 158.0

• 158.0

141.7 % on Revenues 57.5%

• 57.5%

57.0% Depreciation - Amortization - Write Off (67.8) (111.6) (179.4) (62.5) Operating result 90.2 (111.6) (21.4) 79.2 % on Revenues 32.8%

• (7.8%)

31.9% Financial income and charges (46.8) (0.3) (47.1) (42.7) Equity investments 0.7

• 0.7

0.7 Earnings Before Taxes 44.0 (111.9) (67.9) 37.3 Taxes (17.4) (0.2) (17.6) (17.4) Net Earnings 26.6 (112.1) (85.5) 19.8

millions of euro

Dec 2012

• Op. Activities

One-Off Items Dec 12 Dec 2011 Net Invested Capital 1,298.6 (112.1) 1,186.5 1,277.9 Equity 455.8 (112.1) 343.7 451.8 Net Financial Position (842.8)

• (842.8)

(826.1)

• f which: Proj. Fin. and MLT no recourse

(775.4)

• (775.4)

(749.7) NFP excluding Derivatives Instruments (757.1)

• (757.1)

(765.2)

millions of euro

2012 FINANCIAL STATEMENTS

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2012 NET RESULT : IMPACT OF ONE-OFF ITEMS

December

millions of euro

2012 Net result (85,5) Sicily Projects - impact on Ebit (104,1) Sicily Projects - impact on financial charges (0,3) Sicily Projects - impact on equity investments

• Sicily Projects - taxes

(1,6) Subtotal (106,0) Normalized Net Result without Sicily impact 20,6 Impairment on operating assets - impact on Ebit (7,5) Impairment on operating assets - taxes 1,4 Total One-Offs (112,1) Normalized Net Result 26,6 Normalized EBIT 90,2

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Asset Goodwill Provisions Others EBIT Fin. Charges Taxes NET INCOME

2012: BREAKDOWN OF SICILY IMPACT ON P&L

~ 104 ~ 71 ~ 29 ~ 3 ~ 1 ~ 0,3 ~ 1,6 ~ 106

~ 15m written

• ff in June

Euro millions

7 Claim against Sicilian Region: Costs incurred of ~ € 105m + Loss of Profit of ~ €163m claimed by Tifeo, Platani and Pea (23,27%) for a total amount of ~ € 268m . Compensation claimed by Regional Administration: request of compensation of ~ €64m due to the breach of Conventions by the project companies. Claim before the Palermo Regional Administrative Court (Tar Palermo): on 10 May 2013 the Court denied the claim submitted by the Falck Renewables Group companies challenging decree no. 548/2010 issued by the Regional Councilperson for Energy and Public Utilities and the President of the Region of Sicily. The companies intend to challenge the aforementioned Court decisions before the Administrative Court of Justice for the Region

• f Sicily (Consiglio di Giustizia Amministrativa per la Regione Sicilia).

Two appeals are pending before the Court of Cassation initiated by Falck Renewables Group companies in order to definitely state, inter alia, the jurisdiction of the ordinary Court (i.e. Court of Milan). With regard to the investigation conducted by the Public Prosecutor of Palermo, related to the 2002 tenders for the creation of integrated waste management systems in Sicily, some key persons amongst the management of the Falck Group were summoned for summary information by the Guardia di Finanza of Palermo (Tax Police).

Considering the increase of the complexity and the uncertainty related to the litigations against the Sicilian Region it is not possible to assess either the outcome of the litigations or the duration.

SICILY PROJECTS RECAP

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(9.1) 29.3 (5.3) 2.8 (1.0) (0.6) 2011 Loss CIP 6 Incentives New Plants Price Exch differences Development expenses Other 2012

EBITDA 2012 VS 2011: KEY FACTORS

Euro millions

158

• Geopower
• Ty Ru
• Petralia
• La Muela

Granarolo Roc Recycle and market price

142

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FINANCIAL HIGHLIGHTS: CASH FLOW

Euro millions

(826.1) (58.3) (10.5) (8.9) (24.0) (8.8) 93.8 (842.8) CAPEX NFP La Muela Exch difference

• n assets

Derivatives Fair Value Variation Dividends Cash Flow from Operations NFP December 2011 NFP December 2012

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11 129 (775) (86) (94) (22) (5) (843)

Cash SPVs Cash PF Derivatives FKR Corp. Loan MLT Loans & Local Com. Other net debts NFP

NFP BREAKDOWN

FINANCIAL HIGHLIGHTS: NET FINANCIAL POSITION

Euro millions

NFP : IMPACT OF DERIVATIVES

74%

Net Financial Position breakdown by currency for year ended 2012 : 74% Euro and 26% GBP

(61) (86) (765) (757) December 2011 December 2012 NFP excluding derivatives Derivatives

(826)

(843)

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CORPORATE LOAN COVENANTS

74%

Falck Renewables Spa entered into a loan agreement for € 165m with a pool of leading banks on 14 January 2011. The loan will mature on 30 June 2015 The contract requires covenants to be met every six months : the covenants comprise the NFP/EBITDA and NFP/Equity. ALL COVENANTS WERE SATISFIED AT 31 DECEMBER 2012 NFP/Equity expected by contract: Actual:

 31 December 2012  2,54  2,45  30 June 2013  3,09  31 December 2013  2,98  30 June 2014  3,18  31 December 2014  2,97

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2012 Results Q1 2013 Results 2013 – 2017 Business Plan Appendix

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HIGHLIGHTS

Mar 13 ∆ vs Mar 12

∆ %

Mar 12 INSTALLED CAPACITY - MW 716 + 32

+ 5%

684 ENERGY PRODUCTION - GWh 578 + 51

+ 10%

528 REVENUES - €m 82.5 + 4.1

+ 5%

78.4 EBITDA - €m 51.6 + 0.2

+ 0%

51.4 EARNINGS BEFORE TAXES - €m 22.2

• 4.5
• 17%

26.7

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FINANCIAL HIGHLIGHTS

Revenues 82,5 78,4 Net Operating costs (30,9) (27,0) Ebitda 51,6 51,4 % on Revenues 62,5% 65,6% Depreciation - Amortization - Write Off (15,6) (14,6) Operating result 36,0 36,8 % on Revenues 43,6% 46,9% Financial income and charges (13,8) (11,6) Equity investments

• 1,5

Earnings Before Taxes 22,2 26,7

millions of euro

March 2013 Dec 2012 Net Financial Position (825,5) (842,8)

• f which: Proj. Fin. and MLT no recourse

(776,4) (775,4) NFP excluding Derivatives Instruments (742,1) (757,1)

millions of euro

March 2013 March 2012

• Geopower
• Ty Ru
• Petralia
• La Muela

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EVOLUTION OF INSTALLED CAPACITY AND PRODUCTION

684 716 +5%

623 655 45 45 16 16 Q1 12 Q1 13 Wind WTE/Biomass Solar

MW

439 492 83 81 5 5 Q1 12 Q1 13 Wind WTE/Biomass Solar

528 578 +10%

GWh

Q1 12 Q1 13

87 91 +4%

WASTE (KTON)

331 353 272 272 32 42 49 49 Q1 12 Q1 13 Italy UK France Spain

684 716 +5%

MW

BY TECHNOLOGY BY COUNTRY

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56% 68% 40% 25% 2% 3% 3% 5% Q1 12 Q1 13 ITA UK FRA SPA 69% 74% 28% 24% 3% 2% Q1 12 Q1 13 Wind Wte/Biomasse Solare 62% 69% 35% 24% 1% 3% 3% 4% Q1 12 Q1 13 ITA UK FRA SPA

78 €m 83 €m

Revenues by Technology

78 €m 83 €m

Revenues by Country

FINANCIAL HIGHLIGHTS: REVENUES AND EBITDA

79% 85% 17% 13% 3% 3% Q1 12 Q1 13 Wind Wte/Biomasse Solare

EBITDA * by Technology EBITDA by Country

51 €m 52 €m

* Breakdown of EBITDA by technology made on total Ebitda gross of holding impact Euro millions

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EBITDA Q1 2013 VS Q1 2012: KEY FACTORS

Q1 2012 Prices Volumes

• Exch. Rate

Perimeter Unbalancing Devex Q1 2013

(5.1)

• 51. 4

(0.3) (0.3) 3.2 4.0 (1.4) 51.6

Euro millions

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FINANCIAL HIGHLIGHTS: CASH FLOW

EXCHANGE DIFFERENCE ON ASSETS CASH FLOW

FROM OPERATIONS CAPEX

DERIVATIVES FAIR VALUE

VARIATION

NFP MARCH 2013 NFP DECEMBER 2012

(843) (826) 13 (12) 14 2

Euro millions

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3 131 (776) (83) (67) (22) (11) (826)

Cash SPVs Cash PF Derivatives FKR Corp. Loan MLT Loans & Local Comm. Other net debts NFP

FINANCIAL HIGHLIGHTS: NET FINANCIAL POSITION 1/2

NFP BREAKDOWN DERIVATIVES IMPACT ON NFP

(86) (83) (757) (742) December 2012 March 2013

NFP excluding derivatives Derivatives

(826) (843)

Euro millions

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11,9% 88,1%

Unhedged Hedged

12,0% 88,0%

Other Project Finance

FINANCIAL HIGHLIGHTS: NET FINANCIAL POSITION 2/2

PLANT UNDER CONSTRUCTION/IN OPERATION PROJECT FINANCE HEDGED PROJECT FINANCE/NFP NFP (WITHOUT DERIVATIVES) HEDGED

5.3% 94.7%

Under Construction Operating

24.8% 75.2%

Unhedged pf Hedged pf

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2012 Results Q1 2013 Results 2013 – 2017 Business Plan Appendix

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Core activities Rebalancing

• f

technologies and markets Asset rotation and integration Integrated Services

NEW 2013-2017 BUSINESS PLAN

….. From a Capital intensive to a self sustainable business

LESS CAPITAL, MORE VALUE

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NEW BUSINESS PLAN : REASONS TO UPDATE THE STRATEGY

ECONOMIC SCENARIO PORTFOLIO REVIEW

• Higher financial costs
• Decrease of financing ratios (D/E)
• Decrease of countries GDP (EU)
• Overcapacity & flat consumption in

some countries

• Regulatory changes in most of EU

countries

• Penalties
• n

non programmable sources (E.g. unbalancing, capture price)

• Some EU countries reaching 20-20-20

Targets

• Excessive focus on wind technology
• High exposure to wind unpredictability
• Progressive decrease in wind quality of

new sites

• New focus on technologies where

profitability is less dependent on incentives

• Need to take control of industrial

activities and widen the portfolio to get scale effects and direct control on plant performances

• Progressive decrease of debt leverage

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BUSINESS PLAN 2013 – 2017 : MAIN ASSUMPTIONS

Existing Business

1

Growth

2

Asset Rotation

3

• Completion and operation of authorized wind projects in UK
• Extensions of operating wind farms in Italy
• Impacts of unbalancing costs & CEC-CIP6 calculations
• No further growth expected in Solar sector (Pv)
• Focus on Programmable sources
• Hybridization of plants
• Service Business: Greenfield Development, Performance and

Asset M.gt, Dispatching & Unbalancing, Forecast Services

• Sale of 49% stake in UK qualified operating assets
• Use of proceeds: partial decrease of NFP and support of the

growth

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SALE OF MINORITY STAKE IN UK WIND ASSETS

• Sale of a qualified minority stake (up

to 49%) of UK SPVs

• Financial

partnership for co- development in projects pipelines

• Finalization of a “short list” underway.
• Completion: end 2013/early 2014

Proceeds

• Partial reimbursement of Corporate

Credit Loan

• Focus on growth plan and related

activities

PARTNER UK SPVs

51% 49%

DIVIDENDS DIVIDENDS

100%

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WIND SECTOR – BUSINESS PLAN 2013 - 2017

• Sale 49% of UK assets;
• Co-investment

with a new partner after assets disposal;

• Construction and operation of

authorized MW (Nutberry, Spaldington, W. Browncastle and Kingsburn)

• Total installed capacity in 2017

~ 770MW

• Cumulated Capex ~ € 145m

SUMMARY 2017: MW BY COUNTRY

~ 42% ~ 6% ~ 6% ~ 46%

46% 42% 6% 6%

2013 2017

EBITDA

cagr 7%

~ 130 ~ 170

Euro millions

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2013 2017

WTE/BIOMASS SECTOR – BUSINESS PLAN 2013 - 2017

• Strong capex plan to balance

non programmable sources

• New technology mix with WTE,

solar thermo (Rende site), anaerobic digestion and waste biomass plants

• UK and other countries
• Total installed capacity in 2017

~ 81MW

• Cumulated Capex ~ € 250m

SUMMARY 2017: MW BY COUNTRY

~ 63% ~ 37%

63% 37%

EBITDA

cagr 19%

~ 20 ~ 40

Euro millions

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SERVICE SECTOR – BUSINESS PLAN 2013 - 2017

Leveraging

• n

abundant pipeline to reduce costs of development through internalization of activities. Sale of exceeding projects to third parties No capex required. Target: All countries with relevant opportunities.

GREENFIELD DEVELOPMENT EBITDA EXPECTED IN 2017 ~ € 25m Savings on captive market Services to third parties

Reduce O&M costs for the captive market. New Performance & Asset concept for plant perfomance improvement. Specific services

• n

Dispatching & Unbalancing as a support of the O&M activities (Portfolio Management). Scouting of M&A opportunities to provide services to the market and speed up the process. Some activities already started for O&M internalization of 15 MW of Pv plants by end of October 2013

PERFORMANCE & ASSET MGT

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2012 2013 2013 2013 WIND WTE/BIO SERVICE 2017

BUSINESS PLAN 2013 – 2017 : EBITDA EVOLUTION

BY TECHNOLOGY 2012 vs 2013 158 ~ 145 ~ 136 ~ 136

~ 40 ~ 20 ~ 30

~ 225

PRICES VOLUMES UNBALANCING

• EXCH. RATE

NEW ACTIVITIES TRANSACTION COSTS LEGAL COSTS

Euro millions

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BUSINESS PLAN 2013 – 2017 : MW & CAPEX

2013 2014 2015 2016 2017 Cumulated

2013 – 2017 CAPEX EVOLUTION (€m) INSTALLED CAPACITY EXPECTED TO REACH 865MW IN 2017

~ 120 ~ 140 ~ 70 ~ 40 ~ 50 ~ 420

35% 48% 10% 1% 6% Wind Wte/Biomass Anaerobic D. Solar thermo Services Euro millions

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BUSINESS PLAN 2013 – 2017 : NFP & CASH GENERATION

• Strong cash flow generation from the operating

plants and new projects;

• Proceeds from sale of a qualified minority of the

UK assets (49%)

• Dividend distribution policy from 2014
• Capex Plan over € 400m

2017 NFP expected : € 640 – 660m without derivatives impact

NFP UNDER CONTROL OVER THE 2013 - 2017 PERIOD

• OP. CASH FLOW

CAPEX SURPLUS

~ 505 ~ 420

Euro millions

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2012 Results 2013 – 2017 Business Plan Q1 2013 Results Appendix

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623 655 45 45 16 16 2011 2012 Wind WTE/Biomass Solar 340 314 2011 2012 1,233 1,459 309 308 18 26 2011 2012 Wind WTE/Biomass Solar

+5% 716 684

2012 EVOLUTION OF INSTALLED CAPACITY AND PRODUCTION

BY TECHNOLOGY BY COUNTRY

MW MW GWh WASTE (KTON)

+5% 716 684 +15% 1,793 1,560

• 11%

314 340

331 353 272 273 49 49 32 42 2011 2012 Italy UK Spain France

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63.5% 66.4% 32.5% 27.6% 2.0% 2.5% 2.0% 3.5% 2011 2012 Italy UK France Spain 57.0% 65.9% 39.0% 29.9% 4.0% 4.2% 2011 2012 Wind Wte/Biomass Solar

Euro millions

2012 FINANCIAL HIGHLIGHTS: REVENUES +10% TO 275 €M

249 €m 275 €m +10%

Revenues By Technology

249 €m 275€m +10%

Revenues By Country

66.8% 78.0% 27.5% 16.3% 5.7% 5.7% 2011 2012 Wind Wte/Biomass Solar

EBITDA* By Technology

* Breakdown of EBITDA by technology made on total Ebitda gross of holding impact

57.7% 63.6% 38.0% 29.9% 2.1% 2.6% 2.1% 3.9% 2011 2012 Italy UK France Spain

EBITDA By Country

142 €m 158 €m +11%

35 PLANT UNDER CONSTRUCTION/IN OPERATION PROJECT FINANCE HEDGED PROJECT FINANCE/NFP NFP (WITHOUT DERIVATIVES) HEDGED

4.0% 96.0% Under Construction Operating 25.6% 74.4% Unhedged pf Hedged pf 13.4% 86.6% Other Project Finance 14.6% 85.4% Unhedged Hedged

2012 FINANCIAL HIGHLIGHTS : NET FINANCIAL POSITION

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CONTACTS

IR CONTACTS

IR Manager

Giorgio Botta Milan +39 02 2433 3338 giorgio.botta@falckgroup.eu Via Alberto Falck 14-16 20099 Sesto San Giovanni Milano

IR Consultant

Vincenza Colucci CDR Communication Srl

• Tel. +39 335 6909547

vincenza.colucci@cdr-communication.it FKR ON LINE www.falckrenewables.eu Twitter @falckrenewables

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DISCLAIMER This document has been prepared by Falck Renewables S.p.A. (the "Company") for use during meetings with investors and financial analysts and is solely for information purposes. The information set out herein has not been verified by an independent audit company. Neither the Company nor any of its subsidiaries, affiliates, branches, representative offices (the “Group”), as well as any of their directors,

• fficers, employees, advisers or agents (the “Group Representatives”) accepts any responsibility for/or makes any representation or

warranty, express or implied, as to the accuracy, timeliness or completeness of the information set out herein or any other related information regarding the Company and/or Group, whether written, oral or in visual or electronic form, transmitted or made available. This document may contain forward-looking statements about the Company and/or the Group based on Company’s current views, beliefs, expectations, opinions, as well as based on current plans, estimates, assumptions, projections and projects of the Company and/or Group. These forward-looking statements are subject to significant risks, uncertainties and other factor (many of which are beyond the Company and/or the Group’s control) which might cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks, uncertainties and other factors, you should not place undue reliance on the forward-looking statements in this document. The information set out in this document is provided as of the date indicated herein. Except as required by applicable laws and regulations, the Company assumes no obligation to provide updates of any of the aforesaid forward-looking statements or to conform these statements to its actual results. Under no circumstances shall the Company, the Group and/or any of the Group Representatives be held liable (for negligence or otherwise) for any loss or damage howsoever arising from any use of this document or its contents or otherwise in connection with the document or the aforesaid forward-looking statements. This document does not constitute an offer to sell or a solicitation to buy or subscribe the shares of the Company or Group and neither this entire document or a portion of it may constitute a recommendation to effect any transaction or to conclude any legal act of any kind whatsoever. This document may not be reproduced or distributed, in whole or in part, by any person other than the Company. By viewing and/or accepting a copy of this document, you agree to be bound by the foregoing limitations.