Annual Media Conference Financial year 2017/18. Andrew Walo, CEO Axpo Holding AG

Transcription

1 Annual Media Conference Financial year 2017/18 Andrew Walo, CEO Axpo Holding AG

2 Programme for the Annual Media Conference 9:30 am Review of the 2017/18 financial year Andrew Walo 10:00 am Financials in the 2017/18 financial year Ulrich Erkens 10:15 am Outlook for the 2018/19 financial year Andrew Walo 10:30 am Questions 11:00 am End of the AMC 1:1 interviews possible Axpo, Annual Media Conference

3 Key points Growth, diversification, value enhancement: the strategy is taking effects. International business again records substantial increase in profits. EBIT increased by 29%; strong operating result of CHF 348 million. Revenues from electricity sales will not see significant improvement until FY 2019/20. Axpo, Annual Media Conference

4 Strong year-end result EBIT and cash flow driven by operating strength EBIT in CHF million Free cash flow in CHF million FY 2016/17 FY 2017/18 FY 2016/17 FY 2017/18 Cash flow from operating activities Net investments Free cash flow Axpo, Annual Media Conference

5 Strong year-end result Equity in CHF million Total liquidity in CHF million Axpo, Annual Media Conference

6 Strong year-end result Annual cost savings target of CHF 200 million exceeded in CHF million Reduction of operating and maintenance costs Implementation of IT strategy Establishment of centralised procurement More than 200 savings projects executed in total An additional CHF 35 million savings made in 2017/18 26 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 Axpo, Annual Media Conference

7 Encouraging developments in Production & Grids Highlights 2017/18 financial year Block 1 of the Beznau nuclear power plant has been connected to the grid again since March Axpo is setting new standards worldwide with its integrity verification. Technical conditions for up to 60 years of operation are confirmed. Leibstadt nuclear power plant back to 91% output successful proof that there is no oxidation on the fuel elements. Operation at full capacity is expected in Gas-fired combined cycle power plants in Italy operating very successfully in the system services business. Axpo, Annual Media Conference

8 Renewables achieve good results abroad Highlights 2017/18 financial year The Volkswind project pipeline includes wind farms with around 3,000 MW; 60 wind farms with a capacity of 700 MW have been built so far. Four wind farms were sold to Allianz Global Investors. The sale of wind farms remains one of several options in the value chain. The position as a marketer of renewable energy in Europe was strengthened. Axpo, Annual Media Conference

9 Profitable growth in international business

10 Physical energy supplies to end customers in TWh 70 ~ 69.0 ~ 70.9 US 60 ~ 56.5 UK ~ 39.6 ~ 42.2 ~ 45.1 Nordic and Baltic states Eastern Europe Germany, Austria 30 Belgium, Netherlands, France 20 Spain, Portugal 10 Italy 0 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 Switzerland Axpo, Annual Media Conference

11 Leader in electricity trading Category Rank Overall Best dealer overall 10 Overall Natural gas dealers 7 Overall Energy dealers 4 Overall Power dealers 1 Natural gas Europe PSV Italy dealers 1 Axpo is the number 1 in electricity trading* Natural gas Europe PSV Italy brokers 1 Power Europe UK dealers 1 Power Europe Germany dealers 1 Power Europe Italy dealers 1 Power Europe Nordpool dealers 1 Power Europe Netherlands dealers 1 Power Europe Belgium dealers 1 Power Europe Spain dealers 1 Power Europe France dealers 2 Power Europe Eastern Europe dealers 2 *according to the annual survey of the trade magazines Risk and Energy Risk Axpo, Annual Media Conference

12 Cash flow trading & sales in Mio. CHF OCF p.a FCF p. a. OCF cumulative FCF cumulative FY 2015/16 FY 2016/17 FY 2017/18 OCF = Operating Cash Flow FCF = Free Cash Flow Axpo, Annual Media Conference

13 Long-term power purchase agreements (PPAs) replace subsidies for renewable energies More renewables More market share More flexibility More PPAs The expansion targets for renewables are high in Europe. The trend is steady. Additional investment in solar, wind, hydropower and biomass is expected. Subsidy systems are being gradually phased out across the EU. Lower costs make market-oriented PPAs possible. Reliable supply is more difficult due to sporadic energy (wind/sun). The need for optimisation is increasing. Energy investors such as banks and pension funds need long-term security. With its extensive expertise in the area of risk management, Axpo is the ideal partner. Axpo, Annual Media Conference

14 Renewable energy portfolio 3,239 Axpo markets 14,000 MW Oslo Helsinki Country-specific risks Axpo manages one of the largest portfolios in Spain; approx. 6,000 MW of renewable energy 170 London 703 Amsterdam Düsseldorf Brussels 170 Leipzig Malmö Warsaw 923 Kiev Development of subsidies for PPAs (power purchase agreements) Lisbon 5,748 Madrid 581 Luxembourg Vienna Bratislava Lausanne 100 Baden 489 Lyon Milan Zagreb Bucharest Genoa Belgrade Sarajevo 1,323 Pristina Sofia Rome Skopje Tirana Istanbul Jerez de la Frontera Axpo, Annual Media Conference 2018 Tunis 14

15 Jan 18 May 18 Sep 18 Dec 18* Retail in Italien: Alleanza Active contracts +88% Contracts Jan. Dec Acquisition trend 32,200 new customers (acquired in one year) 0 Further development of the customer base 72,000 active points of delivery of Coop Alleanza 3.0 at the end of August 2018 *Estimated Axpo, Annual Media Conference

16 Further highlights in international business Renewables without subsidies Gas licence Ukraine Contract with AEB Amsterdam System services 372 MW PPAs renewable energies Evora: first PV project on the Iberian Peninsula without subsidies thanks to 10-year power purchase agreement. Axpo Ukraine receives licence for gas trading First gas transactions completed in Ukraine Ukraine is a strategic market for the gas business AEB: large waste-to-energy plant in Amsterdam Contract for the procurement of 0.5 TWh per year Access to spot market, intraday trading, derivatives market Italy 2017/18 with significantly higher demand for system services. This makes Axpo s gas-fired combined cycle power plants very successful in this market. Exceptionally high earnings contribution Axpo, Annual Media Conference

17 Further expansion of business that is not dependent on electricity prices

18 Further expansion of business that is not dependent on electricity prices Successful integrations CKW: acquisition of the Elektro-Fürst Group as a further step towards becoming an energy service provider Axpo WZ Systems AG enjoys successful first year in business Engineering Planning and implementation of grid infrastructure projects incl. installation Grid monitoring with drones service also for third parties Data communication Axpo WZ Systems AG leads the fast-growing market for crisis-proof voice and data communications Successful test of BLUnet at Street Parade: radio data transmission network for emergency services Axpo, Annual Media Conference

19 Further expansion of business that is not dependent on electricity prices Avectris Successful implementation of new strategy Avectris increases revenue and profit by around 30% each, due in particular to growth in thirdparty business Smart energy CKW successfully exploits the potential of decentralised, local energy production Revenues in the areas of energy technology and building automation on growth course Spin-off Elblox Valuable experience gained on pilot project in Wuppertal Elblox platform is met with considerable interest internationally Partnerships with well-known public utilities in Europe on the right track Axpo, Annual Media Conference

20 Financial year 2017/18 Ulrich Erkens, CFO a.i. Axpo Holding AG

21 Income statement Total income EBIT Result for the period in CHF million in CHF million in CHF million FY 2016/17 FY 2017/18 FY 2016/17 FY 2017/18 FY 2016/17 FY 2017/18 Lower electricity prices High revenues from energy derivatives trading Lower total income due to change in how electricity revenues are recorded in accounts Lower electricity prices partially offset by higher volumes Higher earnings contributions from sale and operation of wind farms Good result for gas-fired combined cycle power plants in Italy Previous year Swissgrid expropriation compensation Lower STENFO returns and absence of effects from securities portfolio restructuring has negative bearing on financial result Axpo, Annual Media Conference

22 Total income in CHF million Total income FY 2016/17 Swissgrid expropriation compensation Lower electricity prices Lower gas turnover Acquisitions and expansion of IT services Sale and operation of wind farms Results from energy derivatives trading Miscellaneous Subtotal Change to records of electricity turnover Total income FY 2017/18 Axpo, Annual Media Conference

23 New method of recording electricity revenues before now Energy derivatives trading Energy derivatives trading Optimisation Optimisation Production Revenue Physical energy supplies Production Revenue Physical energy supplies Axpo, Annual Media Conference

24 EBIT in CHF million Normalised EBIT FY 2016/17 Lower electricity prices Higher depreciation Higher levels of electricity produced Gas-fired combined cycle power plants Hedging effects (hedge books) Effects of impairment on electricity prices Sale and operation of wind farms Savings Miscell aneous EBIT FY 2017/18 Axpo, Annual Media Conference

25 EBIT by segment (excluding special items previous year) Assets in CHF million 83 CKW in CHF million FY 2016/17 FY 2017/18 FY 2016/17 FY 2017/18 Lower electricity prices partially offset by higher production High revenues for system services at gas-fired combined cycle power plants in Italy Higher depreciation due to full commissioning of Linth-Limmern pumped-storage power plant (FY 2016/17: 97 CHF million accounted) Stable earnings contribution Lower electricity prices offset by improved result in optimisation and proprietary trading (FY 2016/17: 78 CHF million accounted) Axpo, Annual Media Conference

26 EBIT by segment (excluding special items previous year) Trading & Sales in CHF million in CHF million FY 2016/17 FY 2017/18 EBIT as reported Foreign currency effects Hedging effects FY 2016/17 FY 2017/18 EBIT adjusted Good earnings contributions from Italy, Northern Europe and USA Results in accordance with IFRS positively influenced by foreign currency and hedging effects (FY 2016/17: -58 CHF million accounted) Axpo, Annual Media Conference

27 Cash flow from operating activities 474 in CHF million FY 2016/17 Swissgrid expropriation compensation Lower electricity prices NWC change Higher levels of electricity produced Gas-fired combined cycle power plants Sale and operation of wind farms Cost settlement between partner plants Cost savings Miscellaneous Asymmetrical margin calls FY 2017/18 Axpo, Annual Media Conference

28 Investitionen in CHF million FY 2016/17 FY 2017/18 Change Hydro energy Nuclear energy Grid New energies Other Wind farms built for own power plant portfolio Stakes sold in GeoEnergie Taufkirchen and Elektrizitätswerke des Kantons Schaffhausen Completion of investments in Linth-Limmern pumped-storage power plant Stable investment in grids Net investments Axpo, Annual Media Conference

29 Free cash flow in CHF million Above-average cash flow from operating activities and sale of participating interests leads to positive free cash flow FY 2016/17 FY 2017/18 Cash flow from operating activities Net investments Free cash flow Axpo, Annual Media Conference

30 Balance sheet in CHF million Total assets increased by CHF 3.2 billion Rising electricity prices lead to sharp increase in derivative financial instruments and other receivables/ payables Solid equity of around CHF 5 billion Assets Liabilities Assets Liabilities Non-current assets Current assets Cash and cash equivalents Equity Non-current liabilities Current liabilities Axpo, Annual Media Conference

31 Net financial assets in CHF million Stable net financial assets position High free cash flow has a positive effect on net financial assets Financial liabilities Cash, time deposits, financial assets Net financial assets Axpo, Annual Media Conference

32 Maturity profile in Mio. CHF FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 after FY 27/28 Cash and cash equivalents, time deposits, securities (AFS), financial investments Bonds, loans, private placements Axpo, Annual Media Conference

33 Employees Full-time equivalents Large projects, discontinued activities Increase in efficiency Acquisitions Expansion of trade and retail business IT services New business Miscell areas aneous Axpo, Annual Media Conference

34 Outlook Andrew Walo, CEO Axpo Holding AG

35 Outlook FY 2017/18 Calendar year Baseload in EUR nominal 60 Cal-21 in EUR/MWh Deutschland Germany Axpo, Annual Media Conference

36 Outlook FY 2018/19 Current hedged positions and prices 100% 100% 100% 98% 92% % FY 2016/17 FY 2017/18 FY 2018/19 E 2019/20 E 2020/21 (As at 30/09/2018) ᴓ hedged price (EUR/MWh) Axpo, Annual Media Conference

37 Ambition 2020/21 Growth, optimisation, diversification Growth Wind, retail, Origination Avectris Axpo WZ Systems Optimisation Safe operation of assets Coast basis of the group and the assets Diversification new business areas investments business that is not dependent on electricity prices Axpo, Annual Media Conference

38 Ambition 2020/21 EBIT target of CHF 500 million in CHF million Target value ~ FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 Normalised EBIT Axpo Group One-off effect Positive effects, not predictable Axpo, Annual Media Conference

39 Summary Andrew Walo, CEO Axpo Holding AG

40 Key points Growth, diversification, value enhancement: the strategy is taking effects. International business again records substantial increase in profits. EBIT increased by 29%; strong operating result of CHF 348 million. Prospects much better from FY 2019/20 onwards: EBIT target of over CHF 500 million for 2020/21. Axpo, Annual Media Conference

41 Annual Media Conference Questions

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