Statkraft Investor Update July 2014

Transcription

1 Statkraft Investor Update July 2014

2 Disclaimer This presentation has been prepared by, and the information contained herein (unless otherwise indicated) has been provided by Statkraft AS (the "Company"). By attending the meeting or otherwise viewing this presentation you agree to be bound by the following conditions. This document and the information therein are being furnished to you solely for your information and may not be reproduced, redistributed or passed on, in whole or in part, to any other person. This document 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. No part of this document, nor the fact of its distribution or reception, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This document is not a prospectus and does not comply with rules or regulations regarding investor information, and has not been approved by or filed with any stock exchange or regulatory authority. Amongst others, this document does not disclose risks and other significant issues related to an investment in any securities. Investors should only subscribe for any transferable securities on the basis of information in a relevant prospectus and term sheet, and not on the basis of any information provided herein. The information contained in this document has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of the Company, or any of its affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. The information contained in this document is provided as at the date of this document and is subject to change without notice. This document may not be distributed or delivered to any person or in any jurisdiction where such distribution is unlawful or restricted. This document may not be delivered in the United States or to any person or entity in the United States. 2

3 Agenda Statkraft overview Strategy and market dynamics Financial update Funding and liquidity Summary Appendix 3

4 Statkraft at a glance NOK 47.5 bn UNDERLYING GROSS REVENUES 2013 NOK 12.4 bn UNDERLYING EBITDA TWh POWER GENERATION % HYDRO POWER 16.0 GW INSTALLED CAPACITY % OWNED BY THE KINGDOM OF NORWAY A-/Baa1 (stable outlooks) S&P / MOODY S CREDIT RATINGS NO No. 1 power generator (~35%) UK Wind power initiatives EUROPE Trading activities OUTSIDE EUROPE Integration of hydropower SWE No. 4 power generator (~5%) GER Flexible power generation SE EUROPE Hydropower development 4 Hydropower Gas power District heating Wind power Distribution grid

5 Key credit strengths Strong market position - A low-cost and flexible generator of renewable electricity Stable cash flow - Long-term industrial contracts stabilize cash flow Capex flexibility - Adjust investment program to financial capacity Owned by the Norwegian state (AAA/Aaa) - Historically strong support from owner - No substantial changes in the State s owner strategy in White paper published in June

6 Agenda Statkraft overview Strategy and market dynamics Financial update Funding and liquidity Summary Appendix 6

7 A changing energy landscape Market challenges Flat energy demand in Europe and more production from new renewables Growing concerns in Europe about affordability and security of supply Traditional utility business model challenged by a transformed value chain Market opportunities Attractive support schemes driven by European transformation to renewable energy New business opportunities closer to end users and through integration of intermittent renewable capacity Strong growth in emerging markets 7

8 Strategic focus areas European Flexible Generation Maintain and develop low cost, flexible hydropower Market Operations Hydropower in Emerging Markets Stabilize cash flow through power contracts Develop Trading and Origination in selected global markets Build integrated operations in South East Europe, South America and South Asia Wind Power Onshore wind in Norway, Sweden and UK Become lead operator in offshore wind power in UK District Heating Become amongst the most profitable district heating companies in Norway and Sweden 8

9 European Flexible Generation Low-cost European hydropower production - Total cash cost in 2013: 7.2 EUR/MWh - Full cost incl. depreciation: 10.2 EUR/MWh 1 Peak supplier with high degree of flexibility - 80% of installed capacity within highly flexible hydropower - Europe s largest reservoir capacity (~40 TWh) Unique information base and power market modelling - Production optimised relative to power prices and water inflows - Water can be stored for up to three years in some reservoirs Blåsjø, one of Europe s largest hydropower reservoirs, with multi-year energy storage capacity (7.8 TWh) 9 1 Annual Report 2013: 80 NOK/MWh. Incl. property tax and depreciations, excl. sales costs, overhead, net financial items and tax. Based on normal production from power plants under own management in Norway, Sweden, Germany and the UK.

10 Nordic-European power market integration Current transmission capacity between Nordic and Europe of 4000 MW Planned capacity increase of 3870 MW before 2020 and another 3450 MW before 2025 Price effect NO2-DE + NO2-UK: 3-5 EUR/MWh* Increased possibility to utilize our flexible assets Power transmission cables (MW) Planned expansions 10 Source: Statnett * Statnett estimate with the two cables, compared to a scenario with no new cables from Norway.

11 Market Operations A major player on Europe s power exchanges Special expertise within physical and financial power trading Active in all energy-related commodities Market access for small renewable producers Expanding power trading activities in Europe, as well as in Brazil and India Strategy for long-term contracts 11

12 Long-term contracts stabilize earnings ~ 20 TWh sold on long-term contracts with power-intensive Nordic industry Corresponding to ~ 40% of Statkraft s annual mean power production for Nordic hydropower GWh Statutory priced lease agreements Long-term market contracts Statkraft's share of leasing agreements 12

13 International Hydropower has been reorganized and strengthened Statkraft has increased ownership and fully integrated activities in South America and South Asia (from 60 % to 67 %) Statkraft SN Power Statkraft has reduced ownership to activities in less developed markets in South East Asia, Africa and Central America (from 60 % to 50 %) 13

14 Kjøllefjord Onshore and offshore wind power in the Nordics and UK In operation/under construction - Norway: 244 MW - Sweden: 525 MW - UK: 460 MW Hitra Smøla Stamåsen Mörttjärnberget Björkhöjden Ögonfägnaden Licensed/under development - Onshore: Norway 735 MW Sweden 290 MW UK ~ 50 MW - Offshore: Dudgeon 402 MW (Statkraft 30%) Dogger Bank 4800 MW (Statkraft 25%) Alltwalis Baillie Berry Burn Dogger Bank Dudgeon Sheringham Shoal Em Tollarpabjär 14

15 Allocation of investments Geographical allocation Technology allocation Emerging markets 38 % Onshore WP 18 % District heating Trading & 3 % origination 3 % Innovation 3 % Europe ex Norway 19 % Norway 43 % Offshore WP 9 % Hydropower 64 % Investment ambition : NOK 61 billion, of which 51% is committed Subject to financial capacity and maintaining current ratings 15

16 Solid base in the Nordic region Estimated annual contribution after committed capex (2018) EBITDA Power generation (72 TWh) Europe outside Nordic 11 % Outside Europe 8 % Europe outside Nordic 13 % Outside Europe 5 % Nordic outside Norway 14 % Norway 67 % Nordic outside Norway 10 % Norway 72 % Increased diversification, but still dominated by Norwegian hydropower 16

17 Construction activities Completed in 2013 On-going projects in small-scale hydro, Norway (12 MW) Nedre Røssåga 1 and 2, Norway (+100 MW) European Flexible Generation Knapsack II, Germany (430 MW) Kjensvatn, Norway (11 MW) Brokke Nord/Sør, Norway (24 MW) Eiriksdal/Makkoren, Norway (56 MW) 10 small-scale hydro, Norway (25 MW) Baillie, UK (53 MW) Mörttjärnberget, Sweden (85 MW) Compl. Q2 Wind Power Stamåsen, Sweden (60 MW) Tollarpabjär, Sweden (3 MW) Ögonfägnaden, Sweden (99 MW) Björkhöjden, Sweden (270 MW) Berry Burn, UK (67 MW) Compl. Q2 International Hydropower District Heating Binga, Philippines (126 MW) Kargi, Turkey (102 MW) Ås, Norway (24 MW) Kungsbacka, Sweden (12 MW) Cetin, Turkey (517 MW) Devoll, Albania (243 MW) Cheves, Peru (171 MW) Bajo Frio, Panama (58 MW) Sandefjord, Norway (23 MW) 17 Capacity for total project, incl. partners share

18 Strengthening of financial solidity Measures in Divested all E.ON shares (NOK 8.5 bn) - Other asset divestment (NOK 1.2 bn) - Transferred leased hydropower plants from Statkraft SF to Statkraft AS (NOK 3.4 bn) Planned measures in Divestment of Finnish hydropower - Reduce ownership in UK onshore wind NOK ~5 billion - Reduce ownership in UK offshore wind - No dividend payment for 2013 Discussions with owner about investment possibilities and financing 18

19 Agenda Statkraft overview Strategy and market dynamics Financial update Funding and liquidity Summary Appendix 19

20 Solid underlying results in 2013 NOK million FY 2013 FY FY 2011 Net revenues EBITDA Net profit/loss Compared with 2012 improved revenues are mainly due to higher prices (Nordic +22%) EBITDA increased by 10% Weakened NOK against EUR brings net profit down - Currency impacts are mainly unrealised with limited cash flow effect - The effects are more than offset by currency translation effects in equity 20 1 Adjusted for unrealised changes in value on energy contracts and significant non-recurring items 2 All 2012 figures converted after implementation of IFRS 11 as of 2013

21 Steady increase in EBITDA Underlying EBITDA Nordic system price EUR/MWh Total production TWh / % FY 2011 FY 2012 FY Increase primarily due to price effects - Nordic system price: 38.1 EUR/MWh + 22% - German spot price: 37.8 EUR/MWh - 12% Total power production down 7% - Hydropower production - 8% - Wind power production + 77% - Gas-fired power production - 28% New wind farms and transferred leased power plants improves production capacity Slight increase in long-term contracts Moderate increase in operating costs 21 1 Adjusted for unrealised changes in value on energy contracts and significant non-recurring items 2 Not recalculated after implementation of IFRS 11 in 2013

22 Net profit breakdown 2013 Underlying 1 EBITDA 2012 > 2013 Underlying 1 EBITDA 2013 > Net Profit 2013 NOK million Net interest and other financial items Currency impact Adj. EBITDA Revenues Operating expenses ex. dep Adj. EBITDA Unrealised changes in energy contracts Depreciation Impairments/ nonrecurring items Share of profit from associates and JVs Net financial items Tax 2013 Net profit Underlying EBITDA +10% vs Booked net profit effected by negative unrealised currency effects amounting to NOK million. In 2012 positive currency effects were NOK million Adjusted for unrealised changes in value on energy contracts and significant non-recurring items

23 Capital expenditure 1 in 2013 Internat. Hydro- Power 30% NOK million Nordic Hydropower 20% Ind. Ownership 10% A large number of projects under construction in current investment program 78% of FY capex was expansion NOK million invested in Q4-81% expansion Wind Power 27% Other 2 13% Norwegian share approx. 42% In addition leased power plants at a value of NOK 4 billion were transferred from Statkraft SF as contribution in kind (no cash effect) 23 1 Exclusive loans to associates 2 Including District heating, Small-scale hydropower and Continental energy and trading

24 Cash flow 2013 Cash flow 2013 NOK million Cash reserves From operations Dividend from associates Change in short and long term items Investment activities Sale of noncurrent financial assets Changes in debt Dividend/ group contribution paid Share issue to minorities, currency effects Cash reserves Sale of non-current assets mainly regards E.ON SE shares (NOK million) and Sheringham Shoal transmission grid (NOK 957 million) 24

25 Solid Q1 results in a challenging market NOK million Q Q FY 2013 Net revenues EBITDA Net profit/loss Production 2 TWh below Q Nordic prices down 28% measured in EUR/MWh Strong contribution from market activities and wind power Positive currency effects counterbalanced in equity negative effects in Adjusted for unrealised changes in value on energy contracts and significant non-recurring items

26 Net profit breakdown Q1 Underlying 1 EBITDA Q > Q Underlying 1 EBITDA Q > Net Profit Q NOK million Q Adj. EBITDA Revenues Operating expenses ex. dep. Q Adj. EBITDA Unrealised changes in energy contracts Depreciation Impairments/ nonrecurring items Share of profit from associates and JVs Net financial items Tax Q Net profit Underlying EBITDA -8% vs. Q1/13 Booked net profit affected by positive currency effects amounting to NOK million. In Q negative currency effects were NOK million. 1 Adjusted for unrealised changes in value on energy contracts and significant non-recurring items 26

27 Cash flow Q1 Cash flow year-to-date NOK million Cash reserves From operations Dividend from associates Change in short and long term items Investment activities Changes in debt Dividend/ group contribution paid Share issue to minorities, currency effects Cash reserves

28 Agenda Statkraft overview Strategy and market dynamics Financial update Funding and liquidity Summary Appendix 28

29 Strong credit ratings A- / Stable Baa1 / Stable Rating target: maintain current ratings Flexible CAPEX-plans Divestments completed and further divestments considered Rating impact assessment completed prior to new investment decisions Historically strong support from owner Discussions with owner about investment possibilities and financing 29

30 Balance sheet and debt overview Balance sheet per Debt currency distribution Current assets Other noncurrent assets NOK 158bn 19% 5% 10% NOK 158bn 28% Interest-free liabilities Associates and JVs 26% Interest-bearing liabilities Property, plant and equipment 66% 46% Equity Assets Equity and liabilities 30

31 Balanced debt maturity and mixed funding sources Debt maturity profile Distribution of funding sources NOK million >

32 Liquidity position Available liquidity and target Liquidity and market access NOK million Cash and Cash equivalents Credit Line NOK 12bn Revolving Credit Facility (5+1+1 year) signed 19 January Second extension agreed in counterparties NOK 1bn in committed credit line renewed on a yearly basis Q Revolving Credit Facility EMTN Programme EUR 6bn - EUR 2.6bn available under current Programme No commercial paper outstanding Liquidity capacity target 1 : >1.5x projected payments over next six months 32 1 Liquidity capacity defined as cash and cash equivalents, plus committed revolving credit facilities, plus projected receipts for the next six months

33 Funding overview FUNDING STRATEGY Funding centralized on group level Flexibility through diversification of funding sources and maintaining sufficient back-stop facilities Funding need Funding sources Funding need going forward determined by cash flow from operations and capex NOK 3.5 bn debt maturities in H Zero dividend in 2014 Norwegian bond and Commercial Paper market Euro bond market Swedish bond market Sterling and Swiss Franc bond markets considered 33

34 Agenda Statkraft overview Strategy and market dynamics Financial update Funding and liquidity Summary Appendix 34

35 Summary A competitive generator of low-cost electricity - Dominated by flexible hydro power with large reservoir capacity Strong position in the Nordics Flexible plans for growth - European renewable energy production - Hydropower outside Europe Balanced investment plan to maintain credit strength Proven support from Norwegian government through its 100% ownership 35

36 Agenda Statkraft overview Strategy and market dynamics Financial update Funding and liquidity Summary Appendix 36

37 Statement of Comprehensive Income 37

38 Statement of Financial Position 38

39 Statement of Cash Flow 39

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