GEK - TERNA GROUP. Group presentation

Transcription

1 GEK - TERNA GROUP Group presentation

2 GEK - TERNA Group: Overview GEK and TERNA group holds one of the leading positions in Construction, Energy, Real Estate and Concessions, in Greece GEK is the parent company of the group, consolidating Real Estate and Concessions activity Construction and Energy activity are represented on TERNA 2

3 GEK - TERNA Group: Business Divisions Business Divisions Real Estate Concessions Construction Energy Supplementary activities (Industrial Products, Quarries) 3

4 Group Structure Group Structure GEK 54.6% TERNA 63,2 % TERNA ENERGY (RENEWABLES) THERMAL ENERGY REAL ESTATE CONCESSIONS CONSTRUCTION ENERGY REAL ESTATE CONCESSIONS 4

5 Historical Financial Indicators-GEK Sales ( m) EBITDA ( m) 419,0 426,0 200,0 280,4 ` 274,0 337,0 42,0 62,0 74,0 ` 86,0 63,0 75, Net Profit ( m)* 31,0 21,0 22,0 19,0 20,3 12,0 ` *Before minorities 5

6 Historical Financial Indicators-TERNA Sales ( mi) EBITDA ( mi) 412,3 427,0 80,4 224,0 280,4 ` 245,0 312,0 32,0 38,0 60,0 ` 42,1 55, Net Profit ( mi) 40,7 13,0 8,2 21,9 ` 13,8 17,

7 Real Estate Activity 7

8 Activity: Real Estate (GEK) GEK, being a Real Estate developer, has a differentiated portfolio in Greece Logistic centers-industrial parks Offices Entertainment parks Tourist residential Residential Commercial The company currently exploits significant investment opportunities in the Balkans + Monitoring Russian market Offices, residential, commercial, etc 8

9 REAL ESTATE Current development pipeline Project Type Total sq.m. Net Asset Value % of Value Parking Spaces 423 * ,28% Warehouses - Industrial Buildings ,86% Offices for sale ,07% Offices under development ,47% Commercial for sale ,37% Commercial under development ,20% Residential for sale ,45% Residential under development ,08% Land ,15% Entertainment Parks ,07% Total % *Parking spaces 9

10 Real Estate: Strategy Currently low leverage used (c20%) Leverage will increase (up to c50% till end 2009) as land portfolio is being developed Targeted return on equity employed in Real estate 30 % annually till

11 REAL ESTATE NAV evolution (e) 2009(e) NAV 130* 159** The estimation for future NAV appreciation is based on the development of the existing (acquired) land In this estimation, no expectations for appreciation of existing developed portfolio is included *Based on external valuation at 12/2004 **Based on internal valuation at year end expected external valuation within

12 REAL ESTATE in Greece (indicative) Vipa Thessalonica (1 st Private Industrial Zone in Greece) Land Plot: sq.m. Sites to be disposed: sq.m. Total Investment: 26 mil EURO State contribution: 6 mil Euro Expected completion: 2009 Expected Sales: 28 million Euro 12

13 REAL ESTATE in Greece (indicative) Thessalonica : Pipeline comercial development in the municipality of Monastiriou Total Building Area at completion : sq.m. Investment : 55 mil Annual Rents : 5 mil Start construction Jan 2008 expected completion end

14 REAL ESTATE in Greece (indicative) Residential development under construction at Metaxourgio in Athens Total Building Area at completion: sq.m. Investment: 10 mil Expected Completion: 2008 Prospective Sales: 13,2 14

15 REAL ESTATE in Greece (indicative) Entertainment and sports park development in Ellinikon Total Area: ,00 sq.m. Investment: 110 mil Euro Expected completion: end of 2008 Participation of GEK: 25% Annual Turnover: 38 mil (GEK part. 9,5 mil) Annual EBITDA: 14 mil (GEK part. 3,5 mil) Annual EBT: 7 mil (GEK part. 1,75 mil) Term: 30 years 15

16 REAL ESTATE in Bulgaria Plot A : 4 land properties of total sq.m. Plot B : Land property of (plus warehouses of sq.m.) Land property of sq.m. Land property of sq.m. Land property of sq.m.

17 REAL ESTATE in Bulgaria (Sofia) Bulgaria Avenue :Commercial sq.m., Offices sq.m., residential sq.m. 2 1 Macedonia Square : Land sq.m. Krivina : Land property sq.m. 4 Boyana : Residential Development (land property 843 sq.m.) 3 5 GLS (Boyana) : (Participation of GEK 50%) Land property sq.m. 17

18 REAL ESTATE in Bulgaria (indicative) Residential building with underground garages, office and shop premises 110 Bulgaria Blvd Land surface: sq.m. Developed area: sq.m. Residential premises: sq.m. Office premises: sq.m. Shop premises: sq.m. Basements parking lot storage premises : sq.m. Total Investment: 11,5 mil Expected completion: 2008 Prospective Total Sales: 17 mil 18

19 Concession Activity 19

20 Concessions BOT (GEK) The group contests for share in the large scale motorway concessions currently tendered in Greece Partnership (33.33%) with the Spanish FERROVIAL- CINTRA and ACS - DRAGADOS Status Development value Ionian Road Contract signed 1.4 billion Central Greece Motorway Preferred bidders 1.7 billion (e) North Peloponnesian Road Bid presented 2.2 billion (e) Attica roads Bid estimated at mid billion (e) Expected equity investment in each project: 25mio Targeted IRR: 13-15% Significant Value Creation 20

21 Concessions IONIAN ROAD Total separate motorways in Eastern and Western coast of Greece (length: km /159 km newly built) Estimated construction cost: 1.15 billion euro Financing during the construction phase (6 year construction period): Subsidy: 330 million euro Cash flow during construction from the section already in operation: 530 million euro Committed Investment: 75 million equity provided by the consortium million euro Subordinated Debt Senior bank debt without recourse to partners : 117 million euro Term: 30 years 21

22 Concessions CENTRAL GREECE (E65) New motorway in in Central Greece (total length: 231 km ) Estimated construction cost: 1.5 billion euro 5.5 year construction period Financing: Subsidy: c500 million euro Committed Investment: 65 million equity provided by the consortium + 65 million euro Subordinated Debt Senior bank debt without recourse to partners : 970 million euro Term: 30 years 22

23 Concessions key data for Ionian Road years Ionian road EBITDA MARGIN % 2013* % % Total annual toll revenues after the end of construction period ( ) of Western Greece Axe: c300 mio Average growth rate in toll revenues (real terms): c3% Low project leverage enables extensive refinancing which will increase committed investment (equity+ sub debt) returns % % % * After construction period, the project company returns back to the state c80% of total toll revenues 23

24 Concessions key data for Central Greece Central Greece (E65) years EBITDA MARGIN % 2018* % % Annual toll revenues for the first five years of operation ( ): c65 mio After this period, the project receives operating subsidy which equals or exceeds toll revenues Average growth rate in toll revenues (real terms): c3.5% for the first five years and 3% thereafter % % * After the first five years of operation, the project starts receiving operating subsidy 24

25 Concessions Parking stations Current participations in parking stations Stations Capacity Participation (%) Net Participation (parking spaces) Duration of concession Parking Station Rizari (In operation) % 132 Parking Station Hospital Agia Sofia Square (In operation) % 128 Parking Station Aigiptou Square (In operation) % 80 Parking Station Kanigos Square (In operation) % 101 Parking Station OLP (In operation) % 219 Until 2033 Parking Station Ippokratio Hospital in Thessaloniki (In operation) % 260 Parking Station Antheon in the city of Thessaloniki (Under construction) % 236 Parking Station in Nea Smyrni (Karilou Square Under Construction) % 140 Until 2034 Parking Station in the city of Larissa (In operation) % 140 Until 2027 Parking Spaces Total Until 2031 Until

26 Construction Activity 26

27 Construction: Domestic Sector Outlook Remaining construction spending from EU funds till end 2008 (3rd CSF) 1 : 14 billion Greek Infrastructure Plan ( bn) Roads, ports 4.4 Railways, City transports, Airports 2.1 Peripheral Infrastructure 1.6 Road Concessions 6.0 Total 14.1 Source: Ministry of Finance, Ministry of Public Works 4th CSF ( ): c 10 billion infrastructure spending An increase in private construction activity for the post-olympic games era is anticipated (e.g hotels, tourism infrastructure) Forecasted 5,9% average growth of Greek Construction market till Note (1): CSF Community Support Framework Note (2): European Parliament Note (3): Global Insight Report

28 Domestic Construction Division Outlook Group s position in the post-olympic era Sustainable cash flow generation Greek Infrastructure Plan up to 2007 Backlog at year end 06: 1.1 billion Preferred bidders in E65 motorway (1.5 bio - 33%) million euros Backlog starts to increase again after a very weak post Olympic period backlog at year-end (e) (year end) Growth Potential Increase market share: The critical size of the Group enables TERNA to enjoy strong competitive position TERNA is currently bidding for more than 50 Greek public and private projects (value: 1.100m) TERNA contests for share in the construction of the remaining large scale motorway concession project C1-1.5 bio (33.33% participation partnership with FERROVIAL and ACS DRAGADOS) 28

29 Construction activities abroad Balkans Outlook for international TERNA is already well positioned in the Balkans 3 projects under construction ( 175m) no local player involvement Project funding provided by EU (CSF) EU enlargement: significant potential in the Balkans (accession of Bulgaria, Romania, etc) Middle East Target: 25% of construction sales from abroad within three years 4 projects awarded (Qatar, Abu Dabi, Bahrain c375m ) Bidding process: Oman, Saudi Arabia, UAE, Qatar (total 660 m) 29

30 TERNA: Energy Activity 30

31 Energy Business Division Wind parks + Hydro Plants (RES) The Group in Energy Gas fired plants Activity with secured cash flow and significant potential guaranteed by EU directives Site locations and licensing secured (early entrant in the market ) Aim: be established as the largest Greek private energy producer within 3 years Status (MW) Wind Hydro Thermal In operation Under construction 114* Production License Applications TOTAL *(e) end H1 07 (3 wind parks to enter construction phase in the next few weeks) 31

32 Energy: locations occupied ENERGY PROJECTS (locations occupied) WIND PARKS UNDER DEVELOPMENT WIND PARKS IN OPERATION SMALL HYDROPOWER PLANT GAS FIRED PLANT COAL FIRED PLANT 32

33 Renewable Energy (TERNA ENERGY S.A) 33

34 Renewable Energy: Size of the market Sector outlook is positive with strong growth and guaranteed cash flow opportunities Today: 850 MW (750 WIND) National target for EU Directive 2001/77: 3700 MW (3300 wind, 250 small hydro, 150 other) 34

35 Energy: Wind parks - Greece (TERNA ENERGY S.A) Wind Park Installed Capacity 8 wind parks installed and operational till end H1 07 (119 MW) 114 MW under construction till end H1 07 Licensed for over 458 more MW Applications for c1.100 MW 2012 targeted installed capacity in Greece: c1.000 MW Financial Description Investment cost per MW: million 20 year PPA contract Funding structure: 30% own funds, 30% subsidies, 40% long-term debt Average IRR (post tax) of wind parks exceeds 20% Annual sales per MW: c EBITDA margin: c80% PBT margin: c30% Price per MW indexed to average electricity price increases (inflation protected) 35

36 Energy: Hydro Plants - Greece Small Hydro plants 2 small hydro plants currently under construction (12 MW) 20 year PPA contract Targeted 110 MW installed by 2012 (own portion) Licensed for over 106 more MW Applications for 79 MW Investment cost per MW: c 2 million Funding structure: 25% own funds, 35% subsidies, 40% long-term debt Similar to wind parks financial performance ( i.e profitability margins, IRR etc) Large Hydro plants 62 MW large hydro plant in Avlaki (production license) Investment cost: c 165 million Funding structure: 25% own funds, c30% subsidies, 45% long-term debt Annual sales: c23 mio EBITDA margin: c88% 36

37 RES expansion abroad Targeted countries Bulgaria and Romania EU accession enforces governments to provide incentives for RES investments In Far East, the company monitors very closely certain areas in which positive developments could arise (large scale wind projects) Targeted installed capacity in these 3 regions (end 2012): c400 MW 37

38 Thermal Energy 38

39 Key market characteristics New entrant incentives and prospects Evident lack of capacity in Greece PPC s inefficient and unreliable units Shortage of power capacity in FYROM/ALBANIA Temporary incapability of Bulgaria and Romania to provide cheap electricity exports Electricity and Gas market in liberalization process NEW ENTRANT CONCERNS AND DRAWBACKS Regulated tariffs No margin between wholesale price and tariffs

40 Growth in consumption YEAR GWH % INCREASE PEAK (MW) % INCREASE ,41% ,59% ,29% ,54% ,10% ,07% ,00% ,19% 40

41 Capacity Projection 41

42 Pool market development Pool market is still at a developing state; Only used as vehicle for transactions between the producers/importers No eligible customers No CFD s No futures or derivatives. This picture is expected to change when there are more players in the market ( producers and suppliers) and there are margins between the pool price or the total energy price of new IIP s and the tariffs. The market will develop when the tariffs will be de-regulated ( incumbent supplying less than 70% of the market ) 42

43 Energy: OCGT (HERON S.A) 147 MW GAS FIRED PLANT The first private gas- fired plant in Greece OCGT MW capacity and 40% efficiency. Total investment: 80m Operational since September 2004 It covers reserve needs till the end of Η The plant currently receives a capacity payment of 4875 euro/mw month under a contract with HTSO. This contract is expected to be extended until enough capacity is secured in the Greek system through the HTSO new capacity tenders or other private investments 43

44 Energy: CCGT 400 MW GAS FIRED PLANT The group has started the development of CCGT plant (400 MW capacity) Total investment: 240m c70% non-recourse project finance Construction period: 26 months Estimated IRR: >18% Operational: within 2009 From all the other future IPPs in Greece Heron s plant has the most competitive position since : Gas and HV interconnections are already at site Has trained personnel for the implementation of the project and its subsequent operation of the plant The infrastructure of the site is already there i.e gas metering, compressors, fences administration buildings workshops, storage areas etc 44

45 Energy: Coal plant Unique location in Evia Old mine tunnels will receive the ashes Port facilities Total investment: c 700m 70-75% non-recourse project finance Operational within 2011 There is no coal currently used in Greece 460 MW COAL FIRED PLANT Coal is more abundant than oil and gas and even though is more Carbon intensive than CCGT it remains more profitable in all European markets Coal is expected to have a political support in Greece due to concerns regarding energy diversity and security 45

46 Energy: Lignite plant 460 MW LIGNITE FIRED PLANT TERNA is the best bidder on a State tender for the exploitation of a lignite mine Taken that the mine will be eventually awarded to TERNA the first independent lignite plant can be erected on the site 46

47 Commercial strategy The strategy of the company is to become a vertically integrated company. The Group is already present in the market since 2005 and has acquired experience in the wholesale market through its imports and exports through all Greek interconnections as well as in the supply of eligible customers The Group is establishing presence through trading subsidiaries in all neighboring countries. In 2006 the traded volume was about MWH with a pre tax profit of 5 million euro Currently due to no margins between pool market and eligible customer tariffs HERON is only supplying eligible customers associated with the group 47

48 GEK Group: Investment Highlights 48

49 Summary Investment points Achievements Leading position in Construction, Real Estate and Energy Critical size, an important fact within a maturing market Strong capital structure, which reassures: easier access in financing investment opportunities Potential Investments in Energy and Concessions recurrent activities Change risk profile Strong cash flow generation Growth in earnings 49

50 GEK TERNA GROUP OF COMPANIES Address: 85 Messogeion St, Athens, Greece tel: : , fax ir@gekgroup.gr Website: Investor relations: Mr A.Spiliotis 50