Statkraft Investor Update. European Energy & Utilities Credit Conference 2013

Transcription

1 Statkraft Investor Update European Energy & Utilities Credit Conference 2013

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 34.1 bn UNDERLYING GROSS REVENUES 2012 NOK 11.1 bn UNDERLYING EBITDA TWh POWER GENERATION 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 Growth outside Europe through SN Power (60% ownership) 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 Europe s leader in renewable energy Top 10 renewable electricity producers in Europe 2012 (adjusted 1 ) Electricity production (TWh) Statkraft EDF Statkraft s total power generation 2012 Vattenfall Enel Fortum Gas 3% Wind 1% District heating and bio 2% Verbund 28 Iberdrola 27 E.ON GDF SUEZ Hidroelectrica Hydro 94% Source: PwC 5 1 Main assumptions: full consolidation of subsidiaries, proportional consolidation of associated companies, energy consumption for pumped hydropower deducted, electricity from long-term purchasing contracts deducted, production outside Europe deducted

6 Flexible low-cost power producer Low-cost power production dominated by renewable energy - Average hydropower production cost of 10.4 EUR/MWh 1 in 2012 Peak supplier with high degree of flexibility - 80% of installed capacity within highly flexible hydropower - Production optimised relative to power prices and water inflows Substantial reservoir capacity - Europe s largest reservoir capacity (~40 TWh) Unique information base and power market modelling Blåsjø, one of Europe s largest hydropower reservoirs, with multi-year energy storage capacity (7.8 TWh) 6 1 Annual Report 2012: 78 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.

7 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 7

8 Key credit strengths Strong market position - a competitive, low-cost and flexible generator of electricity Stable cash flow - a substantial share of long-term industrial supply contracts Capex flexibility - several options within current investment program Solidly owned by the state in one of the most creditworthy countries in the world - the Norwegian state as the sole shareholder (AAA/Aaa) 8

9 Agenda Statkraft overview Strategy and market dynamics Financial update Funding and liquidity Summary Appendix 9

10 Response to a changing energy landscape Market challenges Flat energy demand in Europe and more production from new renewables Growing concerns in Europe about security of supply and affordability Traditional utility business model is challenged by a transformed value chain Market opportunities Attractive support schemes driven by European transformation to renewable energy Strong growth in emerging markets New business opportunities closer to end users and through integration of intermittent renewable capacity 10

11 Strategic focus areas and ambitions European Flexible Generation Trading and Origination Hydropower in Emerging Markets First priority to maintain & develop Nordic hydropower asset base Maximize long term value of Statkraft s asset base Develop T&O business in selected global markets and exploit customer oriented activities Build integrated operations in South East Europe, South America and South Asia Wind Power Onshore portfolio optimisation and selected investments Become lead operator in offshore wind power District Heating Become a mature and amongst the most profitable district heating players in Norway and Sweden 11

12 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 % 12

13 Strengthening financial platform Measures already taken - Long-term contracts with power intensive industry - Sale of E.ON shares - Transfer of hydropower plants from Statkraft SF to Statkraft AS through contribution in kind - Ongoing restructuring of International Hydropower - Sale of wind farm in Chile - Gas-fired power plants Robert Frank/Emden in cold reserve, Naturkraft in light preservation Focus on cost efficiency 13

14 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 14

15 Nordic-European power market integration Current transmission capacity between Nordic and Europe of 4000 MW Planned capacity increase of ~5500 MW ahead of 2020 Increased value opportunities for Statkraft s flexible Nordic hydropower plants Power transmission cables (MW) Planned expansions 15 Source: Statnett

16 International Hydropower long term strategic cooperation Statkraft and Norfund have signed Heads of Agreement to continue partnership - Intention to restructure and prolong strategic cooperation - Focusing on hydropower in emerging markets - South East Europe - South America - South Asia - South East Asia - Africa - Central America Strengthen performance by establishing one project execution unit Replace current put option program for SN Power - Intention to establish a revised put/call option program for the period 2017 onwards 16

17 Agenda Statkraft overview Strategy and market dynamics Financial update Funding and liquidity Summary Appendix 17

18 Highlights 9m 2013 Solid result from operations - Higher Nordic power prices and increased production capacity Currency effects impact net profit - Negative effects offset by translation effects Investment activity according to plan - Gross investment of NOK 6.5 billion - Two onshore wind farms and one hydropower plant completed - Investment decision to construct two hydropower plants in Albania Sale of all shares in E.ON Transfer of hydropower plants and asset swap in Norway to optimize operations 18

19 Key figures NOK million 9m m Gross Revenues EBITDA Net profit Improved revenues due to higher prices EBITDA increased by 10% Weakened NOK against EUR brings net profit down - Currency effects are mainly unrealised - The effects are more than offset by currency translation effects included in other comprehensive income strengthening equity 19 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

20 YTD prices up in the Nordic Electricity, average monthly price EUR/MWh Nord Pool, system price EEX, base Nord Pool, system forward EEX, base forward Compared with YTD 2012 weaker hydrological balance drives prices up in the Nordic - System price: 38.9 EUR/MWh 33% Increasing share of renewables and high coal-fired power production drive prices down in Germany - Spot price: 37.9 EUR/MWh 12% 20

21 Nordic hydro reservoirs Nordic reservoir water levels 100 Below normal inflow and reduction in reservoir levels % Median 1 At the end of September Nordic reservoirs were 90.6 TWh corresponding to 88.4% of normal Week 1 Median

22 Statkraft production Monthly power generation TWh 6 4 Change from 2012: YTD production 9% Hydropower production 10% Wind power production 48% Gas-fired power production 28% 2 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec (TWh) Hydro Wind Gas/bio Total 9m m FY FY

23 Underlying EBITDA development NOK million FY2009 FY2010 FY2011 FY2012 9m2012 9m2013 YTD 13/YTD % Underlying EBITDA 1 increased by 10% YTD Primarily due to price effects New wind farms and transferred leased power plants improves production capacity Slight increase in long-term contracts Moderate increase in operating costs 23 1 Adjusted for unrealised changes in value on energy contracts and significant non-recurring items

24 Net profit breakdown Underlying 1 EBITD 9m 2012 > 9m 2013 Underlying 1 EBITDA 9m 2013 > Net Profit 9m 2013 NOK million m 2012 Adj. EBITDA Revenues Operating expenses 9m 2013 Adj. Unrealised changes in Depreciation Impairments/ nonrecurring Share of profit from Net financial items Tax 9m 2013 Net profit ex. dep. EBITDA energy associates contracts items and JVs Underlying EBITDA +10% vs. 9m/12 Booked net profit effected by negative unrealised currency effects amounting to NOK million. In 9m 2012 positive currency effects were NOK million. 1 Adjusted for unrealised changes in value on energy contracts and significant non-recurring items 24

25 Solid cash position Cash flow year-to-date 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) 25

26 Agenda Statkraft overview Strategy and market dynamics Financial update Funding and liquidity Summary Appendix 26

27 Balance sheet and debt overview Balance sheet per Debt currency distribution Current assets Other noncurrent assets NOK 150bn 16% 5% 10% NOK 150bn 30% Interest-free liabilities Associates and JVs 25% Interest-bearing liabilities Property, plant and equipment 68% 45% Equity Assets Equity and liabilities 27

28 Balanced debt maturity and mixed funding sources Debt maturity profile Q Distribution of funding sources NOK million NIB lån 1% External loans subsidiaries 12% NOK Bond Issues 36% >2023 EUR Bond Issues 51% 28

29 Financial strength and rating Current ratings FFO/NET DEBT 2 (UNADJUSTED 3 ) A-/Stable Baa1/Stable Rating target Maintain current ratings with S&P and Moody s FFO/Net Debt thresholds as main KPI 1 4 FFO of NOK million (8 580 in 2012) Net interest bearing debt of NOK million ( in 2012) 29 1 Please see rating publications on Statkraft s web page, under Financial information, for full assessments 2 Calculated 12 months rolling 3 Rating agencies apply own adjustments recalculated after implementation of IFRS 11 in 2013

30 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 papers outstanding Liquidity capacity target 1 : >1.5x projected payments over next six months 30 1 Liquidity capacity defined as cash and cash equivalents, plus committed revolving credit facilities, plus projected receipts for the next six months

31 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 4.0bn debt maturities in H National budget for 2014 indicates zero/marginal dividend in 2014 Norwegian bond and Commercial Paper market Euro bond market Swedish bond market Sterling and Swiss Franc bond markets considered 31

32 Agenda Statkraft overview Strategy and market dynamics Financial update Funding and liquidity Summary Appendix 32

33 Providing pure energy A flexible and competitive generator of low-cost electricity - Dominated by renewable energy 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 33

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

35 Statement of Comprehensive Income Third Quarter Year to date The year NOK million COMPREHENSIVE INCOME PROFIT AND LOSS Sales revenues Other operating revenues Gross operating revenues Energy purchase Transmission costs Net operating revenues Salaries and payroll costs Depreciation, amortisation and impairments Property tax and licence fees Other operating expenses Operating expenses Operating profit/loss Share of profit/loss from associates and joint ventures Financial income Financial expenses Net currency effects Other financial items Net financial items Profit/loss before tax Tax expense Net profit/loss Of which non-controlling interest Of which majority interest OTHER COMPREHENSIVE INCOME Changes in fair value of financial instruments Estimate deviation pensions Items recorded in other comprehensive income in associates and joint arrangements Currency translation effects Other comprehensive income Comprehensive income Of which non-controlling interest Of which majority interest

36 Statement of Financial Position NOK million STATEMENT OF FINANCIAL POSITION ASSETS Intangible assets Property, plant and equipment Investments in associates and joint ventures Other non-current financial assets Derivatives Non-current assets Inventories Receivables Short-term financial investments Derivatives Cash and cash equivalents (included restricted cash) Current assets Assets EQUITY AND LIABILITIES Paid-in capital Retained earnings Non-controlling interest Equity Provisions Long-term interest-bearing liabilities Derivatives Long-term liabilities Short-term interest-bearing liabilities Taxes payable Other interest-free liabilities Derivatives Current liabilities Equity and liabilities

37 Statement of Cash Flow Third Quarter The year NOK million STATEMENT OF CASH FLOW CASH FLOW FROM OPERATING ACTIVITIES Profit before tax Profit/loss on sale of non current assets Depreciation, amortisation and impairments Profit/loss from the sale of business Profit/loss from the sale of shares, and associates and joint ventures Share of profit/loss from associates and joint ventures Unrealised changes in value Taxes Cash flow from operating activities Changes in long term items Changes in short term items Dividend from associates Net cash flow operating activities A CASH FLOW FROM INVESTING ACTIVITIES Investments in property, plant and equipment, maintanance Investments in property, plant and equipment, new capacity* Proceeds from sale of non-current assets Business divestments, net liquidity inflow to the Group Business combinations, net liquidity outflow from the Group** Loans to third parties Repayment of loans Considerations regarding investments in other companies Net cash flow from investing activities B CASH FLOW FROM FINANCING ACTIVITIES New debt Repayment of debt Dividend and group contribution paid Share issue in subsidiary to non-controlling interests Net cash flow from financing activities C Net change in cash and cash equivalents A+B+C Currency exchange rate effects on cash and cash equivalents Cash and cash equivalents Cash and cash equivalents 30.09/ Unused commited credit lines Unused overdraft facilities Restricted Cash

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