TerniEnergia. A leading Italian PV energy company London - Star Conference 2011

Transcription

1 TerniEnergia A leading Italian PV energy company London - Star Conference October 2011

2 Disclaimer This document has been prepared by TerniEnergia solely for information purposes and for use in presentations of the Group s strategies and financials. The information contained herein has not been independently verified. 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. Neither the company, its advisors 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 forward-looking information contained herein has been prepared on the basis of a number of assumptions which may prove to be incorrect and, accordingly, actual results may vary. This document does not constitute an offer or invitation to purchase or subscribe for any securities and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. The information herein may not be reproduced or published in whole or in part, for any purpose, or distributed to any other party. These materials do not constitute or form a part of any offer or solicitation to purchase or subscribe for securities. 1

3 Agenda Investment highlights Stefano Neri (CEO) Market growth Paolo Ricci (Executive Board Member) 2010 Financial Highlights - Paolo Allegretti (CFO) Development Strategy and Plan Stefano Neri (CEO) 2

4 Investment Highlights Flexible business model Italian leading player as a supplier of photovoltaic systems and energy producer in the fast growing PV market Significant presence in the reference market with substantial growth potential Experienced Management Team Reliable and efficient operating and commercial model Listed on STAR Italian Stock Exchange Over delivered expectations 3

5 A solid track record Successful historical growth and balanced diversification of the business in the power generation activity: Solid free cash flow generation Gained market shares, consolidating leadership in PV market, exploiting new opportunities of growth Profitability levels confirmed by quarter to quarter growth trend Revenues (Mln ) (Mln ) CAGR > 77% EBITDA CAGR > 146%

6 Agenda Investment highlights Stefano Neri (CEO) Market growth Paolo Ricci (Executive Board Member) 2010 Financial Highlights - Paolo Allegretti (CFO) Development Strategy and Plan Stefano Neri (CEO) 5

7 Our positioning in the PV market value chain UPSTREAM MIDSTREAM DOWNSTREAM POWER GENERATION SILICON WAFERS CELLS MODULES INSTALLATION DISTRIBUTION GENERATION Players: Producers of silicon and wafers Market structure Global Concentrated Business characteristics: Huge barriers to entry Players: Manufacturers of solar cells Assemblers of modules Main countries: the US, Germany, China and Japan Market structure: 40% of the manufacturers are not integrated 60% are integrated Business characteristics: Capital intensive High degree of automation Players: System integrators Role: The management of the authorization demand The design of the PV plant Installation Business characteristics: Strong relationships with local authorities are key High working capital needs Players: Producers of electricity from the conversion of the sunlight Hemlock, MEMC, Tokuyama, Wacker Chemie, M. Setek REC, Yingli Green Energy Bosch Solar Energy, PV Crystalox, RWE Schott, Sanyo, Sharp, Solarworld, First Solar, Evergreen Solar Suntech, Solarfun, Kyocera Kerself, Q Cells, Sunpower Conergy, Solon, SolarFabrik, Solaria Solar Energy Italia, Enerpoint, Enerqos, Phoenix Solar, Juwi, OPDE Group, Enel si TerniEnergia Enel Green Power, Edison, Sorgenia, Enipower, TerniEnergia presence Positioning in the Italian PV industry value chain 6

8 Our business model: a fully integrated player EPC Turnkey Solutions Business Drafting & feasibility studies Authorization procedures PV panels purchase and installation Plant construction Plant operation and maintenance Power Generation Business 50:50 Joint Ventures with highly reputable partners Financing of projects guaranteed Leveraging turnkey expertise of TerniEnergia Full Equity started in 4Q 2010 Customer support Build Operate and Transfer Build, Operate and Transfer ( BOT ) of grid connected PV plants 7

9 Reliable and efficient business model SITE IDENTIFICATION MARKETI NG PROJECT DEVELOP MENT PV PLANT CONSTRU CTION REMOTE CONTROL AND MAINTENANCE Site identification Agricultural and industrial sites acquisition for PV project implementation Marketing Feasibility studies Contract management and job order opening Project development Authorization process Plant construction Preparation of the final design Materials planning and procurement Construction and installation Grid connection Plant operation and maintenance Monitoring, emergency services, ordinary and extraordinary maintenance Customer assistance TerniEnergia s unique business model enables in particular to: Control the entire construction process Optimize resources with a careful and synergistic management of construction sites and workshop Exploit the efficiency of trained, qualified and specialized personnel Optimize plant construction and installation timing through the planned integration of the typical activities of the different phases required Long term relationships with clients thanks to maintenance and customer assistance contracts (20 years) TerniEnergia s business model allows full control of the entire operating process 8

10 A new business plan: PV strategic guidelines TerniEnergia s reaction in 1H2011 Previous plan based on «Terzo Conto Energia» Cutting incentives and legislation vacatio Strong focus on PV Industry Development of large plants in JV and FE to increase the power generation business Stop PV investments Financial difficulties in planning new plants Strong focus on PV Industry Development of large plants in JV and FE to increase the power generation business All plants covered by Salva Alcoa law connected to the grid 28 photovoltaic plants of industrial size, for a cumulated installed power capacity of 57.3 MWp connected between July and August 9

11 A new business plan: PV strategic guidelines TerniEnergia s challenge to grow New Quarto Conto Energia Market changing Competitive framework Increases the incentive decalage Introduces restrictions on large ground PV plants and an annual installation cap Focus on reduction of production costs and increasing installation quality, e.g. on roof top Return of foreign and large utilities investments Retreat of foreign investors Overproduction of PV panels Property management systems of the PV plants to maximize revenues from incentived fees and sale of produced energy Optimization of plant operation and maintenance in order to achieve revenues stability and high margins Expansion into foreign countries, attraction strategy of foreign investor (e.g. international PV panels productors) and focus on industrial roof top plants Acquiring stakes in Italian companies in order to enforce industrial activity and diversifying energy efficiency business 10

12 A new business plan: Energy Efficiency guidelines Market size limited but grew in the late 90's, to reach 10 billion between the USA and EU in 2008 Market Overview Hold strong growth over the next 10 years in Europe, even after approval of the Directive Pacchetto Clima European market (EU-25) estimated at least 75 billion for 2020, with expected growth of 10 times between 2008 and

13 A new business plan: Energy Efficiency guidelines Accredited by the AEEG and the GME Energy Efficiency Experience investments in projects that generate energy efficiency for the customers The energy savings generated by our projects amounted to over 150 million kwh Identification of intervention areas, verification of technical feasibility and verification of the economic and financial viability of the project Our activities and our proposal Planning of the intervention, supply of materials, execution of work - retrofitting and upgrading plant testing Management and maintenance of the facility, ensuring the smooth functioning of the same Industrial Energy Efficiency produces High Margins (over 30%) 12

14 A new business plan: Energy Efficiency guidelines Lightning projects In FTT Contracts for Energy Spread or Energy Service with Public and Private Target: 34,000 LA in management by 2013, total investments of 15 mln Focus: Public illumination Medium and large industrial groups and multi-facility in private lighting ORC Organic Rankine Cycle Technologies: ORC (TerniEnergia), motors, inverter, others (es., actions on productivity lines, ecc.) Engineering EPC Achievements "turnkey" for the redevelopment of lighting systems for other energy efficiency Target: 23,000 LA in management by 2013; 13

15 Agenda Investment highlights Stefano Neri (CEO) Market growth Paolo Ricci (Executive Board Member) 2010 Financial Highlights - Paolo Allegretti (CFO) Development Strategy and Plan Stefano Neri (CEO) 14

16 Historical evolution of installed capacity (MWp) 5% 33% FE (MWp) 62% JV (MWp) EPC (MWp) Total installed Plants 242 Total installed Power (MWp) 187,00 FE (MWp) 10,40 JV (MWp) 61,20 EPC (MWp) 115,40 Source: Company information, as at 1 September

17 Sound financial structure with outstanding growth track record Revenues EBITDA Net income +900% 99,9 14,6 9,0 9% 8% 46,8 7,3 3,7 31,8 10,0 0,8 2,3 1,7% 1,7% 0,2 0, Double-digit organic growth with margins of industry best in class Source: Company information 16

18 Sound financial structure with outstanding growth track record Revenues EBITDA Net income 16,2 9,9 116,4 13,6 5,9 7,6 5,4 4,6 36,3 8,9 3,6 20,6 2,8 5,9 1,2 1H H H H H H H H H 2011 Double-digit organic growth with margins of industry best in class 17

19 Sound financial structure with outstanding growth track record 1H 2011 Bridge to Earnings Before Taxes ( 000) 100.0% (36.1%) (34.1%) (18.6%) (3.4%) (0.1%) 7.6% (0,5%) 7.1,0% (1,0%) 1.0% 7,1% (42.033) (39.755) (21.675) (3.920) (156) (635) REVENUES Change invetories Cost of Materials Cost of Services staff charges other cost EBITDA D&A EBIT Interest cost Joint Venture EBT 2010 Bridge to Earnings Before Taxes ( 000) 100.0% 60,3% (106,1%) (33.7%) (5.5%) (0.3%) 14,6% (0,9%) 13,8% (0,9%) 0.6% 13,5% 100.0% 60,3% (106,1%) (33.7%) (5.5%) (0.3%) 14,6% (0,9%) 13,8% (0,9%) 0.6% 13,5% 60,220 (106,220) 99,933 (33,647) (5,494) (349) 14,425 (859) 13,766 (893) ,460 Revenues Chg in invetories Material costs Services costs 18 Personnel costs Other costs EBITDA D&A EBIT Interest cost JV EBT 18

20 Sound financial structure with outstanding growth track record Net debt ( m) and net debt / EQUITY(x) NWC ( m) and NWC / Sales (%) Net debt 2, NWC , ,5 1,2x 11,0 22,2 0,2x 0,2x (8,3) (16,4) (19,6) H 2011 Financial Indebtness NFP/Equity Cash and CashEquivqlents 19

21 Focus on joint ventures JVs Sales and EBITDA ( 000) Comments , , ,2% Fatturato Ebitda Ebitda margin ,7% According to IFRS, JVs are not included in the consolidated EBITDA nor in the net debt of TerniEnergia JV business model: 15% equity (shared ½ by JV s partners) 85% debt 60 plants completed as of June 30, 2011 Total capacity: 61,2 MWp in operation (40 in 2011) JVs consolidated net debt: 197.9m as of June 30, 2011 of wich 9.9m of cash Approx. 50% long term debts (18/20 years) Approx % swapped at a fixed rate in order to stabilise cash-flows The EBITDA margin is typically affected by the time gap between the installation phase (when most of the operating costs are incurred) and the grid connection (when the plant start generating revenues) At regime, it is expected that EBITDA margin could range between 80-90% according to the electricity production results Cumulated installed capacity MWp Cumulated operating MWp Source: Company information 20

22 Plan: EBITDA and Revenues EBITDA and REVENUES TREND (Euro ML) CAGR = 12% CAGR = 8% EBITDA Revenues Target 2012E-2013E 2012E Revenues: 86 Euro Mln EBITDA: 16 Euro Mln 2013E Revenues: 93 Euro Mln EBITDA: 18 Euro Mln 2012 E 2013 E EBITDA Margin 2012 E: 18% 2013 E: 19% 21

23 Plan: Capex targeted Capex Targeted (ML euro) 12,0 CAGR = 8% 11,5 11,0 10,9 10, Total targeted Capex for JV and Energy Efficiency Business D/E 2013:

24 Agenda Investment highlights Stefano Neri (CEO) Market growth Paolo Ricci (Executive Board Member) 2010 Financial Highlights - Paolo Allegretti (CFO) Development Strategy and Plan Stefano Neri (CEO) 23

25 A new business plan: development guidelines A strong reaction to changes in PV regulatory and incentives Advanced approach in the new industrial energy efficiency business in 2011 since now. Business no policy driven Starting abroad PV industrial activity through first EPC contract with a subsidiary of an european major utility PV activities as EPC Turnkey and JV providers: target capacity over 120 MWp in (PV modules partially included) Profitability in power generation business through JV and Full equity plants guaranteed for 20 years Keep unchanged the dividend value 24

26 Additional material 25

27 Additional material Appendix 26

28 Experienced and reliable management team Highly skilled management team Highly experienced management with deep industry knowledge on board since the creation of TerniEnergia Well connected in Italian PV business Running a young, dynamic and skilled organization to deliver strong results Stefano Neri Chairman and CEO of TerniEnergia Born in Terni on 14 September 1959 Degree in Law at La Sapienza University in Rome Certified attorney since 1985, specialized in administrative law, authors of several papers in the field : vice president at Interpark Servizi per l Ecologia S.r.l. (Group Falck) Founder of T.E.R.N.I. Research, from September 2006 is chairman of TerniEnergia BoD Paolo Ricci Executive Director Business Development Born in Terni on 15 July 1940 Degree in Electric Engineering at La Sapienza University in Rome : several managerial roles at Enel S.p.A. before becoming head of Transmission sector division : responsible for the engineering and the management of Rete Elettrica Nazionale plants at TERNA S.p.A. From 2007 is a member of TerniEnergia BoD, and chairman of the BoD of Solar Energy S.r.l., Energia Alternativa S.r.l., Energie S.r.l. and Foto Solare Settima S.r.l. JV Fabrizio Venturi Executive Director Chief Operating Officer Born in Terni on 14 February 1964 Degree in Sociology at La Sapienza in Rome : CEO at Venturi S.p.A., a company operating in the realization of electric industrial plants. From August 2007 is a member of TerniEnergia Board of Directors Paolo Allegretti Chief Financial Officer and Investor Relator Born in Terni on 6 July 1971 Degree in Business Administration at La Sapienza University in Rome : head of the internal control and financial controller at Keryos S.p.A. From October 2009 is CFO at TerniEnergia, after being head of the Planning & Control department from 2008 and head of Internal Control from

29 Quarto Conto Energia Deadline extention to enter in the third feed in tariff (August 31th, 2011 instead of June 30th, 2011); Fixing, only for the big PV Plants, of a cap, for each year until 2016, in MWp and in sum of money to provide FIT. Follow the table: Cost CAP /mio General level of MWp june december 2011 First Half 2012 Second Half 2012 First Half 2013 First Half 2013 Second Half 2014 Second Half 2014 First Half 2015 Second Half 2015 First Half 2016 Second Half Total The establishment of a FIT application register to run a ranking which is previously established based on the progress of the PV Plant installation booked; 28

30 New FIT June August 29

31 New FIT 2011 september - December 30

32 New FIT

33 New FIT Starting 2013 the FIT system becoming only a Feed In system on German model. 32