9M 2005 Consolidated Results

Transcription

1 9M 2005 Consolidated Results Fulvio Conti Chief Executive Officer Fabio Todeschini Chief Financial Officer October 3 st,

2 Agenda Highlights 9M 2005 Results Update on Business Dynamics Annexes

3 Highlights Operational data 9M05 Electricity demand: +.% (245TWh) Availability of the Italian grid: 99.4% Key Results Further improvement in margins: EBITDA +7.7% EBIT +8.0% Net Income +26.6% New Perimeter Consolidation of: RTL SpA from October st TSO activities from November st 2

4 Agenda Highlights 9M 2005 Results Update on Business Dynamics Annexes 3

5 9M 2005 Results Income Statement In Euro mn Consolidated Change Consolidated Change 3Q05 3Q04 mm % 9M05 9M04 mm % % Operating Revenues % % Grid Utilisation Fee % % Regulated Activities in Brazil % % Other Activities/Income in Italy % % Operating Expenses % % EBITDA % % Italy % % Brazil % 72% 70% EBITDA Margin (%) 70% 67% () () Net of Capitalized Costs 4

6 9M 2005 Results Operating Revenues Breakdown Grid Utilization Fee 3Q 2Q Q % M04 9M05 7 Main Drivers Time bands effect on Q: -50mn euro Volume and tariff effect: +5mn euro In Euro mn Brazil 3Q 2Q % Business dynamics (+7mn euro) Exchange rate effect (+6mn euro) Q M04 9M Other 3Q 2Q % One-off reversal of 2004 revenues withheld by GRTN (+9mn euro) Q M04 9M05 5

7 9M 2005 Results Operating Costs Breakdown Services Salaries and Benefits Q Q Q % M04 9M05 3Q Q -0.2% Q Main Drivers Higher early retirement costs for 2.2mn euro Headcount: Average (Terna SpA): - 2,869 9M05 vs 2,878 9M04 Final (Terna Group): - 2,888 vs 2,929 as of 3/2/04 Non recurring costs related to IPO (ca. -9mn euro) In Euro mn Other () Q M04 9M05 () Includes Raw Materials, Rental and Lease Expenses and Miscellaneous, net of Capitalized Costs 3Q 2Q 9M M05 2, % 3Q: provision for social security - INPS (ca. +2mn euro) 2Q: one-off reversal of grid revenues (ca. -5mn euro) Tax amnesty referred to 2002 (ca. 2mn euro) 6

8 9M 2005 Results Geographical Breakdown 9M2004 9M2005 Revenues % 89% 5% 85% % 7% EBITDA 89% 83% Italy Brazil 7

9 9M 2005 Results Income Statement In Euro mn Consolidated Change Consolidated Change 3Q05 3Q04 mm % 9M05 9M04 mm % % EBITDA % % D&A % % EBIT % % Net Interest Expense % % Taxes % 36.4% 40.% Tax rate (%) 36.9% 42.% % Net Income % 8

10 9M 2005 Results Key Balance Sheet Items In Euro mn 9M05 3/2/2004 Change Assets PP&E 4,503 4, Intangible asset, net Financial Inv. And Other Total Fixed Assets 4,787 4, Net WC (99) (202) 3 Funds (635) (596) (39) Net Invested Capital 3,954 3, Financed by: Net Debt 2,005, Shareholder's Equity,949, D/E ratio

11 9M 2005 Results Cash Flow Consolidated 9M05 9M04 3/2/2004 Net Income () Depreciation In Euro mn Net Change in Funds Operating Cash Flows Change in WC (3) 6 (7) Cash Flow from Operating Activities Capital expenditures (44) (23) (303) (2) Other fixed asset changes (20) (29) (2) Free Cash Flow Dividends (40) (70) (70) Capital Reduction - (,200) (,200) (2) Change in Financial Position 90 (,56) (,274) () Net of assets disposals (2) Not including /$R exchange rates and fair value on Bonds 0

12 Update on Business Dynamics Capex Breakdown 9M04 Capex 9M05 Capex Brazil 30 Brazil Renovation and Other 32 Development Renovation and Other 89 Development Total: 23 mn Total: 44mn Development: San Fiorano Robbia (36mn euro) Brazil: completion of Novatrans lines (28mn euro) Development: delays in Turbigo-Rho line and Santa Barbara substation Full year Italian capex expected to be at ca. 260mn euro

13 9M 2005 Results Consolidated Net Financial Position In Euro mn Rating Terna SpA S&P s: AA-/A+ stable Moody s: Aa3/P stable 35 56,57 2,42 2, () EIB Loans Brazilian Debt Bonds Terna Consolidated Gross Debt Note: EIB= European Investment Bank () No recourse project finance debt Cash & Cash Equivalents Italy Cash & Cash Equivalents Brazil Consolidated Net Debt 2

14 H 2005 Results Consolidated Net Financial Position - drivers In Euro mn ITA GAAP IAS Net Debt 3/2/04,865 Net Debt 3/2/04,900 Fair value on Bonds 82 Change in Financial Position (90) Change in Financial Position (90) Exchange Rates 3 Exchange Rates 3 Net Debt 30/09/05,888 Net Debt 30/09/05 2,

15 Agenda Highlights H 2005 Results Update on Business Dynamics Annexes 4

16 Update on Business Dynamics Regulatory Issues Tariff Evolution 2006 transmission tariffs: ~ +7-9% (AEEG resolution 202/05, Sept. 2005). Parameters: Inflation: CPI:.8% RAB deflator: 3.9% Expected volume growth:.5% RAB RAB for 2006 tariffs: ca. 5.bn 2005 end of year RAB: ca. 5.2bn 5

17 Update on Business Dynamics New Perimeter 2004 Financials R.T.L TSO () Revenues 7. Revenues EBITDA 3.3 EBITDA 39 EBIT 0.5 EBIT 4 Net Income 0.2 Net Income 7 RAB Ca. 3 RAB Ca.60 Employees (no.) 35 Employees (no.) revenues substantially in line with previous years In euro million () Source: Gestore della Rete di Trasmissione Nazionale SpA (GRTN) 6

18 Update on Business Dynamics Outlook for FY2005 Change in Perimeter 4Q05 will reflect the consolidation of: RTL SpA, 3 months TSO, 2 months 62 additional headcount TSO pass-through items will impact P&L but not bottom line Costs affected by one-offs charges linked to the transactions (i.e. registration tax, logistics and IT costs) Results Cash flow (effective tax rate = cash tax rate) Capex Net Debt (interim dividends, capex and acquisitions) 7

19 Agenda Highlights H 2005 Results Update on Business Dynamics Annexes 8

20 Italian Electricity Market Evolution Energy Demand TWh Monthly Trend Jan Feb Mar Apr May Jun Jul Aug Sept +.% Cumulated Trend Source: GRTN monthly reports Jan Feb Mar Apr May Jun Jul Aug Sep 9

21 H 2005 Results Consolidated Quarterly Analysis (IAS) In Euro mn Q05 Q04 Change 2Q05 2Q04 Change 3Q05 3Q04 Change Operating Revenues (2) Grid Utilisation Fee (44) Regulated Activities in Brazil Other Activities/Income in Italy Operating Expenses (28) EB ITDA (22) Italy (33) Brazil D&A EB IT 4 66 (24) Net Interest Expense 25 3 (7) 8 20 (2) 4 26 () Taxes () Net Income (7) () Net of capitalized costs 20

22 H 2005 Results Consolidated Italian GAAP In Euro mn 9M2005 9M2004 Change Operating Revenues Grid Utilisation Fee Regulated Activities in Brazil Other Activities/Income in Italy Operating Expenses () EBITDA Italy Brazil D&A EBIT Net Interest Expense Taxes Net Income () Net of capitalized costs 2

23 Brazilian Subsidiaries 9M 2005 Main Results In Euro mn Revenues 9M M Change +2 9M M Change + 22 Total 9M Operating Expenses () EBITDA EBIT Net Interest Expense ) Taxes Net Income Net Invested Capital Financed by (3): Net Debt Shareholders Equity () Net of capitalized costs (2) Of which Interest on Equity 2 euro mn (2) 2004 figures as of December 2,

24 Brazilian Subsidiaries Project Finance Debt as of September 2005 Outstanding amount Maturity Rates Euro 228mn BNDES Local Currency R$ 489mn 206 TJLP +3.5% BNDES Currency Basket R$ 9mn 206 Currency Basket Cost +3.5% Euro 255mn BNDES Local Currency R$ 545mn 206 TJLP +4.5% IDB loan A US$ 28.0mn % + spread step up (from 22.5bps to 537.5bps) IDB loan - B US$ 33.3mn % + spread step up (from 200bps to 525bps) 23

25 Corporate Governance 2 November Lists of Candidates Ordinary Shareholders Meeting to renew the Board of Directors Cassa Depositi e Prestiti Enel. Luigi Roth Chairman 2. Flavio Cattaneo 3. Luigi De Paoli 4. Mario Garraffo 5. Carmine Machì 6. Piero G. Maranesi 7. Franco Smurro. Massimo Romano already Board member Generali. Massimo Ponzellini Italian Institutional Investors. Salvatore Machì already Board member 24

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