EDP Renováveis 1H15 Results
July 29th, 2015
15:00 CET | 14:00 UK/Lisbon
www.edpr.com
EDP Renovveis 1H15 Results July 29 th , 2015 15:00 CET | 14:00 - - PowerPoint PPT Presentation
EDP Renovveis 1H15 Results July 29 th , 2015 15:00 CET | 14:00 UK/Lisbon www.edpr.com Disclaimer This presentation has been prepared by EDP Renovveis, S.A. (the "Company") solely for use at the presentation to be made on July 29 th
July 29th, 2015
15:00 CET | 14:00 UK/Lisbon
www.edpr.com
This presentation has been prepared by EDP Renováveis, S.A. (the "Company") solely for use at the presentation to be made on July 29th, 2015. By attending the meeting where this presentation is made, or by reading the presentation slides, you acknowledge and agree to be bound by the following limitations and restrictions. Therefore, this presentation may not be distributed to the press or any other person, and may not be reproduced in any form, in whole or in part for any other purpose without the express consent in writing of the Company. The information contained in this presentation has not been independently verified by any of the Company's advisors. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. Neither the Company nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity in any jurisdiction. Neither this presentation nor any part thereof, nor the fact of its distribution, shall form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. Neither this presentation nor any copy of it, nor the information contained herein, in whole or in part, may be taken or transmitted into, or distributed, directly or indirectly to the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws. This presentation does not constitute and should not be construed as an offer to sell or the solicitation of an offer to buy securities in the United States. No securities of the Company have been registered under U.S. securities laws, and unless so registered may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of U.S. securities laws and applicable state securities laws. Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The words “believe”, “expect”, “anticipate”, “intends”, “estimate”, “will”, “may”, "continue”, “should” and similar expressions usually identify forward-looking statements. Forward- looking statements include statements regarding: objectives, goals, strategies, outlook and growth prospects; future plans, events or performance and potential for future growth; liquidity, capital resources and capital expenditures; economic outlook and industry trends; developments of the Company’s markets; the impact of regulatory initiatives; and the strength of the Company’s competitors. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause the actual results, performance or achievements of the Company or industry results to differ materially from those results expressed or implied in this presentation by such forward-looking statements. The information, opinions and forward-looking statements contained in this presentation speak only as at the date of this presentation, and are subject to change without notice unless required by applicable law. The Company and its respective agents, employees or advisors do not intend to, and expressly disclaim any duty, undertaking or obligation to, make or disseminate any supplement, amendment, update or revision to any of the information, opinions or forward-looking statements contained in this presentation to reflect any change in events, conditions or circumstances. 2
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Quality assets
levels; 1H15 registered a weaker load factor YoY and was 3% below the P50 scenario
stable pricing on the back of PPA/FiT and effective hedging strategies
Selective and profitable growth
€69m (-14% YoY) impacted by wind conditions in 1H15 vs. 1H14 and one-offs
under construction) and is ahead of target additions (~0.6 GW)
Self-funding business model
expected remaining lifespan of at least 20 years
development of a complementary Asset Rotation program (YieldCo)
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Spain 26% Portugal 13% Rest of Europe 15% North America 45% Brazil 1%
Installed Capacity1 (EBITDA MW + Equity Consolidated)
661 MW under execution in 2015 2015 execution above expectations: 105 MW added in 1H15 and 556 MW currently under construction
Notes: 1) Installed capacity includes EDPR’s Equity consolidated: 533 MW of EDPR’s interest in ENEOP, and equity stakes of 174 MW in Spain and 179 MW in the US. Includes 82 MW of Solar PV. 2) Refers only to EBITDA MW
Under Construction
+300 MW +99 MW +136 MW +6 MW +120 MW
Additions
+556 MW +105 MW
Average Installed Capacity2 increased +6.8% YoY
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EDPR Technical Availability
1H15 33% 29% 26%
97.4%
31%
∆% YoY
0.0pp
1H14 vs. average
103% 110%
107%
101%
Although the 1H15 had a wind resource below the expected scenario (P50), EDPR continues to achieve load factors above market 1H15 vs. average
90% 104%
97%
92%
+5% +5%
+2%
+12% +0%
1Q 2Q 3Q 4Q
2014 2015
Load Factor and Technical Availability
2013
EDPR Quarterly Load Factor vs. Quarters’ Average (%)
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Electricity Production (TWh)
Electricity Output breakdown: 51% in Europe, 49% in US and 1% in Brazil 11.0 +0.3
10.8 1H14 Capacity Growth Load Factor 1H15
Outstanding load factor in 1H14
TWh % YoY
Stable in Europe YoY with strong
mitigated by the lower wind resource in Iberia Low wind resource in Central and Western regions, which offset the effect from capacity additions Lower load factor YoY
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EDPR Price Evolution (€/MWh)
€57.7 €64.2 1H14 1H15
+11% Selling price recovered from depressed levels in Spain and in US (1H14) and boosted by FX conversion €82.2 +3%
+15% YoY higher price in Spain; 1.2 TWh sold under hedges
$52.1 +3%
Higher PPA prices (+0.4% YoY); Non-PPA: $46/MWh (+22% YoY) REC sales & effective hedgings
R$369 +7%
Inflation adjustment
1H15 % YoY
+4% ex-FX
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693 773 1H14 1H15
Better pricing in Spain and US driving the increase in Revenues Quality assets: +492 MW (EBITDA) YoY Load factor: 31% High availability: 97.4% Lower Electricity output: -1% YoY EU -0.4%; NA -2%; BR -8% Higher average selling price: +11% YoY EU +3%; NA +3%; BR +7%
Revenues (1) (€ million) Main drivers for Revenues performance
+11%
(1) Do not include gains with hedges accounted in financial results.
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21.2 22.1 1H14 1H15 214 241 1H14 1H15
Opex (excludes Other Operating Income) (€ million)
Operating costs per average MW ex-FX decreased 7% YoY +11% +13%
(€k)
Levies & Write-Offs
Notes: (1) Opex excluding levies and write-offs.
+4% +16%
+4% ex-FX
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EBITDA (€ million)
EDPR operation in North America contributed with 43% of 1H15 EBITDA 495 548 1H14 1H15 +11%
EBITDA per Region (%)
Spain 23% Portugal 13% Rest of Europe 20% North America 43% Brazil 1%
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Impact in EBITDA from weaker wind resource also impacts the bottom line given the fixed cost structure below EBITDA 1H14: 7% above P50 1H15: 3% below P50 Different production mix and different performance vs. P50 1H15 production was 1% below 1H14 Wind resource YoY Analysis EU & US Analysis
EBITDA impacted by deviations
+40
1H14
1H15
€ million
€51m YoY variance on load factor performance
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69 292 548 43 37 143 255
1H15 EBITDA to Net Profit (€ million)
D&A EBIT Taxes Minorities Financial Results % YoY EBITDA New capacity YoY (+492 MW) and FX +15% In line with EBITDA performance +7% Interests cost -14% YoY (ex-FX); Financial results +0.2% YoY (ex-FX & one-offs); Associates -46% YoY +34% Effective Tax Rate of 24.5%
Strategic partnership and Asset Rotation program +14% In line with top-line and ongoing efficiency +11% Net Profit Net Profit totalled €69m
(1)
Notes: (1) Includes Share of profit of associates.
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IFRIC 21 changes the timing of recognition of liabilities from levies (now recognized in the moment that triggers the recognition of liability; previously rateably over the fiscal year)
1H15 Result
Pre-IFRIC 21 IFRIC 21 Reported Revenues EBITDA EBIT EBT Net Profit
1H14 Results
Reported IFRIC 21 Restated
693
506 495
284 273
178 166
87 81
773
563 548
308 292
165 149
77 69
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1H15: Cash Flow (€ million)
Operating Cash-Flow
Asset Rotation and alternative funding sources as enablers of value added growth program Asset Rotation Interest Costs2 Tax Equity Tax Equity Increase in Net Debt Forex & Other CTG & EDPR BR 404 (190) 316 54 139 (669) (103) (87) (91) (153) Investments1
Notes: (1) Capex, PP&E suppliers and other investment activities; (2) Net interest costs (post capitalisation)
and capital distributions)
(dividends)
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Average Selling Price (€/MWh) EBITDA (€m) Electricity Output (GWh)
1H15 generation decreased -1% YoY due to strong 1H14 and 3% below expected load factor in 1H15 Average Selling price improved +11% YoY on the back of Spanish and US price recovery and active hedging strategy EBITDA is +11% YoY with a stable 71% EBITDA margin Electricity output expected growth of +10-13% YoY on the back of 2014 new MW and ENEOP consolidation (pending regulatory approvals for asset
splitting)
Average Selling price with positive evolution expected based on hedges in Spain and in US EBITDA to grow at solid double digit benefiting from high efficiency levels and USD strength
1H15 Operational Performance… …in line with YE15 Outlook
(presented in YE14 results)
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Favourable debt market conditions also allows EDPR to extend the average debt maturity
Corporate Loans €1.2bn Project Finance €0.2bn EDPR is being able to secure better financing conditions
Two re-negotiations of debt with EDP already executed (Mar’15 and Jul’15)
Longer average maturity and lower interest cost
Spain Romania
agreement executed in 2012
Corporate loans Positive impact in P&L c.€3m (pre-tax) on a FY basis 2Q15 impacted by €8m (write-down of deferred costs on BS) Positive impact in P&L c.€26m (pre-tax) on a FY basis (prorated in 2015)
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Increased competition from Institutional Investors is driving down targeted yields Ongoing appetite from investors for new structures of wind energy assets to benefit EDPR shareholders New Investors (including from new business sectors) driving down targeted yields for new transactions EDPR to continue to tap the market to capture improved shareholder value
$378m: settlement of transaction with Fiera Axium and agreement with DIF III (wind and solar assets in US) $117m: institutional equity financing in relation to a new 99 MW wind farm in California, US
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…allowing to monetize quality European assets and re-invest in the development of new accretive projects
“(…) EDPR to evaluate alternatives to efficiently monetise and rotate its assets, focusing on the particular possibility of establishing a YieldCo composed by European wind generation assets to be listed on the Spanish stock exchange “
Notification to the Stock Market Exchange Regulator, June 22nd 2015
Monetize Quality Assets Re-invest in accretive projects
Low cost of capital in Europe Strong appetite from investors for assets with stable cash-flows EDPR is a leading worldwide renewable player with quality assets and a solid track record Quality options in the short-term (US and selective EU markets) Stronger growth on the medium-term (EU targets and US Clean Power Plan) High competitiveness from renewable technologies (wind and solar) to further enhance growth in EDPR markets
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On track to deliver 2015 new projects with 105 MW added in 1H15 and 556 MW under construction Premium assets and high efficiency levels continue to deliver sound metrics even in periods with lower than expected load factor Improved pricing environment on the back of low risk assets with PPA/FiT contracts complemented with an effective hedging strategy Debt-renegotiation with EDP and 3rd parties, taking advantage of favourable debt market conditions, to positively impact P&L while extending maturities Sound executing of the 2017 strategic agenda while analysing the opportunity of a complementary Asset Rotation program to enhance the growth profile
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Rui Antunes, Head of Planning & Control and IR Francisco Beirão Maria Fontes Paloma Bastos-Mendes Filipe Lopes E-mail: ir@edpr.com Phone: +34 914 238 402 Fax: +34 914 238 429 Serrano Galvache 56, Edificio Olmo, 7th Floor 28033, Madrid - Spain
Site: www.edpr.com Link Results & Presentations: www.edpr.com/investors
9M15 Results: October 28th