TAURON Group s Q Financial Results. May 11, 2017

Transcription

1 TAURON Group s Q1 217 Financial Results May 11, 217

2 Q1 217 key data [PLN m] TAURON Group s Q1 217 results Q1 217 vs Q1 216 Sales revenue % EBITDA % Net profit* 64 98% CAPEX 636 (3)% Net debt/ebitda 2.31x down.1 (vs ) down.19 (vs ) Q1 217 operating data Q1 217 vs Q1 216 Commercial coal production [t m] % Electricity generation [TWh] % Heat generation [PJ] 5.3 9% Electricity distribution [TWh] % Electricity supply [TWh] % * attributable to the shareholders of the parent company 2 z 4 2

3 Highlights Summary February 28 TAURON Sprzedaż (TAURON Supply) terminates long term green certificates purchase agreements March 1 Amendment is signed with RAFAKO-MOSTOSTAL WARSZAWA consortium to the agreement on the construction of the 91 MW generation unit at Jaworzno III Power Plant the unit s completion deadline is extended by 8 months, the agreement value increases by PLN 71m March 13 March 31 April 6 Decision of the Management Board of TAURON Polska Energia on submitting the motion to the Ordinary General Meeting of Shareholders on covering the company s net loss in the financial year 216 from the company s spare capital and not recommending the use of spare capital to pay out dividend Agreement and amendments related to the conditions of continuing the Construction of the CCGT unit at Stalowa Wola project come into force. Repayment of the PLN 581m debt to the institutions (EIB, EBRD, Pekao S.A.) financing ECSW (Stalowa Wola Combined Heat and Power Plant). TAURON Polska Energia is among the laureates of the 216 Transparent Company of the Year ranking organized by Parkiet stock market and investors daily and the Accounting and Taxes Institute. The company was distinguished for its business transparency and market communications quality. April 2 Letter of Intent is signed with Grupa Azoty S.A. defining the general principles of cooperation related to the coal gasification project. Project s estimated value: EUR 4m to 6m (depending on the selected technology version) 3 z 4 3

4 Q1 212 Q2 212 Q3 212 Q4 212 Q1 213 Q2 213 Q3 213 Q4 213 Q1 214 Q2 214 Q3 214 Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q1 212 Q2 212 Q3 212 Q4 212 Q1 213 Q2 213 Q3 213 Q4 213 Q1 214 Q2 214 Q3 214 Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Macroeconomic and market situation 5% 4% 3% 2% 1% % 3,7% Poland s GDP growth rate* and manufacturing PMI (quarterly average)** 2,2% 1,3%,5%,%,% 1,8% 2,6% 3,3% 3,3% 3,3% 3,3% 3,6% 3,1% 3,4% 4,3% 3,% 3,1% 2,5% 2,7% 3,8% % 6% 4% 2% % -2% -4% 4,7% 2,6% Increase of industrial production sold* and electricity consumption (change yoy)*** -,3% -2,% -3,% 7,3% 6,% 5,% 5,3% 4,5% 4,9% 3,7% 3,9% 4,3% 5,7% 3,1% 3,% 2,5% 1,8% 1,5% 1,2% production sold growth rate domestic electricity consumption change GDP growth rate manufacturing industry PMI GDP growth rate forecast Electricity prices under one year BASE contracts Structure of electricity generation in Poland*** [TWh] Average price [PLN/MWh] Volume [GWh] Y Y Y Y Y Y Y Y Average electricity sales prices on the competitive market (acc. to ERO):: 212: PLN/MWh 213: PLN/MWh 214: PLN/MWh 215: PLN/MWh 216: PLN/MWh (forecast) ,5% 9,7% 3,4% 28,7% 51,6% 5,3% 44,29 42,6 +4% 2,83 2,72 4,24 4,9 +3,7% 1,58 1,45 +8,8% 12,9 +16% 14,2 21,73 -,5% 21,63 Q1 216 Q ,4% 9,6% 3,6% 31,7% 48,8% industrial power plants renewable energy sources gas-fired thermal power plants lignite-fired power plants hard coal-fired thermal power plants Source: * GUS ** Bankier.pl ***PSE 4 z 44

5 Q1 217 key financial data PLN m Sales revenue [PLN m] Net profit attributable to the parent company s shareholders [PLN m] Q1 216 Q1 217 Q1 216 Q1 217 Electricity Heat Hard coal Distribution and trading services Property rights Other revenue Q1 217 vs Q1 216 EBITDA [PLN m] , Q1 216 reported Q1 216 comparable Q1 217 comparable ECSW provision dissolving Q1 217 reported EBITDA Increase Decrease 5 z 4 5

6 Q1 217 key segments results [PLN m] Mining Generation Distribution Supply Other and exclusions* Segment s revenue (2 365) EBITDA (29) EBIT (6) CAPEX ,2 1 PLN m Individual segments contribution to EBITDA [%] % % 4% 32% 62% 51% 3% 22% 16% -7% -2% Q1 216 Q1 217 Other and exclusions Supply Distribution Generation Mining * Items not included in the segments presented 6 z 4 6

7 Q1 217 EBITDA PLN 311m, 36% ,2% -7,7% 15,6% 35,% 1,5% 18,3% * 25,8% Q1 216 EBITDA Mining Generation Distribution Supply Other and exclusions Q1 217 EBITDA EBIT Depreciation and write-downs Segment's increase Segment's decrease EBITDA margin *Other segment s EBITDA margin 7 z 4 7

8 Mining segment Q1 217 Financial data [PLN m] EBITDA change [PLN m] Q Q Sales revenue EBITDA EBIT CAPEX Q1 216 Sold coal volume Coal production cost Inventory level change Other Q1 217 Commercial coal production volume vs sales per product [Mg m] 1,21 Q1 216,11,6,92,6 1,22 1,51 Q1 217,19,9 1,24,21,5 1,79 1,,2,4,6,8 1, 1,2 1,4 1,6 1,8 2, Commercial coal production Large size lump coal sales Medium size lump coal sales Intra-Group coal dust sales Coal dust sales outside the Group Coal sludge sales 24.8% production volume increase 46.5% sales volume increase 15.5% mining cash cost decrease Lower headcount (down 279 FTEs on average) 8 z 4 8

9 Generation segment Q1 217 Financial data [PLN m] EBITDA change [PLN m] Q1 216 Q1 217 Sales revenue EBITDA EBIT CAPEX 5 Q1 216 Electricity margin Heat margin CO2 costs Other Q1 217 Gross production of electricity [TWh] and heat [PJ] RES and cogeneration production ,89 4,31,33,41 3,9 4,84 4,56 Q1 216 Q ,3,7,6,5,4,3,2,1,,41,13,33,9,51,13,1,2,1 Q1 216 Q1 217,6 Electricity and heat sales volumes increase CO2 prices decrease Electricity prices decrease RES property rights prices decrease electricity electricity - RES heat biomass water wind cogeneration 9 z 4 9

10 Distribution segment Q Financial data [PLN m] EBITDA change [PLN m] Q1 216 Q1 217 Sales revenue EBITDA EBIT CAPEX Q1 216 Distribution service sales price Sales volume TSO services' purchase Grid losses cost Other distribution services Tax on grid assets Other Q1 217 EBIT depreciation and impairment charges Electricity distribution [TWh] Increase of approved tariff by 7.2 PLN/MWh (6%) Q ,46 4,21 1,96 2,64,46 12,73 Higher electricity distribution services sales volume by 572 GWh (4.5%), mainly in correlation to the GDP growth rate Q ,38 4,45 2,3 2,7,74 13,31 67% increase of the transition fee rate included in the cost of purchasing the transmission services and the RES fee (none in Q1 216) Group A Group B Group C2+C1+R+D Group G Other*.72 pp decrease of the balancing difference indicator, 1 PLN/MWh decline of the Group s electricity balancing price *neighboring DSO and export 1 z 1 4

11 Distribution segment key parameters Regulatory Asset Base [PLN bn] Customer connection time [in days] ,9 15,6 16, Q1 217 RAB Customer connection time SAIDI [min.] SAIFI [number] ,8 24, 188, 177,1 177, ,54 2,82 3,16 2,93 3, , 1 1,67 215* 216 Q * 216 Q SAIDI SAIDI target SAIFI SAIFI target * Method used to calculate the indicators in 215 was different than the method used under the quality based regulation the calculation in 215 took into account the low voltage distribution grid outages 11 z 11 4

12 Supply segment Q Financial data [PLN m] EBITDA change [PLN m] Q1 216 Q1 217 Sales revenue EBITDA EBIT Q1 216 Electricity - volume and price 6 Property rights - price Property rights - obligation EBIT Income on gas 19 ECSW provision depreciation and impairment charges Other Q1 217 Retail electricity supply [TWh] Increase of the supply volume as a result of rising electricity consumption by the largest customers Q ,42 1,94 1,24 2,56 1,21 8,36 Increased obligation to redeem property rights: in case of PM OZE from 15% to 15.4% and other PMs and introduction of PM OZE-BIO.6% Q ,65 2,34 1,49 2,62 1,2 9,12 Further decline of market prices of property rights purchased to be redeemed prices (mainly PM OZE) Group A Group B Group C2+C1+R+D Group G Other* Positive impact in Q1 217 due to dissolving the provision related to ECSW CCGT unit construction agreement *includes sales to cover the balancing difference and to the intra-group end users 12 z 12 4

13 Debt and financing TAURON Group s debt maturity as of [PLN m] Net debt/ebitda = 2.31x bonds credits, loans and leases Q 217 3Q 217 4Q 217 1Q 218 2Q 218 3Q 218 4Q 218 bonds credits, loans and leases 73 TAURON Group s debt structure as of [PLN m] % 25,3% 42,4% Financing available to TAURON Group as of [PLN m] 3 9% debt (nominal value of debt due to investment loans, loans, leases and bonds) as of is PLN 9 342m weighted average maturity of debt as of is 73 months EUR denominated debt (NSV and EIB bond issue) represents 16.2% of the total debt Debt structure based on interest rate [PLN m]: debt amount interest rate collateral % bonds EIB loans NFOŚiGW / WFOŚiGW loans leases % cash pool bond issue programs floating fixed IRS 2 1 none z 13 4

14 CAPEX key projects work progress Investment project Capacity (MW e ) Capacity (MW t ) Work progress (percentage) Planned completion date Construction of the hard coal-fired unit at Jaworzno III Power Plant Construction of the CCGT unit at Stalowa Wola Combined Heat and Power Plant* Construction of the 8m level at Janina coal mine Construction of Grzegorz shaft at Sobieski coal mine CAPEX program at Brzeszcze coal mine * Completion date will be estimated following the inventory taking and acceptance of the comprehensive project completion concept 14 z 14 4

15 CAPEX per segment Capital expenditures per segment [PLN m] (excluding equity investments) 653 (-2,5)% 636 Key investment projects underway in Q1 217: Q1 216 Q1 217 Mining Generation Distribution Supply and Other Mining: - construction of the 8 m level at Janina coal mine (PLN 11m) - construction of the Grzegorz shaft at Sobieski coal mine (PLN 2m) - Brzeszcze coal mine CAPEX program (PLN 5m) Generation: - construction of new 91 MW capacity at Jaworzno Power Plant (PLN 282m) - maintenance and expansion of district heating networks (PLN 4m) - connections of new facilities (PLN 2m) - hydroelectric power plants upgrade (PLN 3m) Distribution: - construction of new connections (PLN 12m) - grid asset upgrades and replacement (PLN 129m) 15 z 15 4

16 Efficiency improvement program Segment Savings realized in 216 Q1 217 Savings planned in Progress % Main initiatives Mining PLN 19m PLN 255m 43% Employment restructuring, reduction of labor costs and increasing their flexibility, organizational measures Use of electronic auctions in the purchasing process CAPEX plan optimization Generation (including RES and Heat) PLN 26m PLN 367m 71% Optimization of upgrades and of other asset maintenance costs Employment restructuring Purchasing efficiency improvement Optimization of the carburizing and de-ashing systems operation services Maintenance services costs control CAPEX plan optimization Distribution PLN 184m PLN 39m 47% Other PLN 73m PLN 291m 25% Reorganization and employment restructuring Asset maintenance costs control Purchasing efficiency improvement Outsourcing of the storage services Sale of redundant real estate Employment restructuring, Reduction of the scope of IT services Customer service costs and overhead (administration) costs control Optimization of the costs of promotional and sponsoring activities Total PLN 626m PLN 1,33m 48% In 216 and Q1 217 under the Voluntary Redundancy Program, being part of the Efficiency Improvement Program, TAURON Group s headcount was reduced by 591 FTEs. Savings resulting from redundancies, decreased by the costs incurred to generate these savings, are included in the amounts presented per segment 16 z 16 4

17 Thank you Q & A Investor Relations Team Marcin Lauer marcin.lauer@tauron.pl tel Paweł Gaworzyński pawel.gaworzynski@tauron.pl tel Katarzyna Heinz katarzyna.heinz@tauron.pl tel z 17 4

18 Legal disclaimer This presentation serves for information purposes only and should not be treated as investment-related advice. This presentation has been prepared by TAURON Polska Energia S.A. ( the Company ). Neither the Company nor any of its subsidiaries shall be held accountable for any damage resulting from the use of this presentation or a part thereof, or its contents or in any other manner in connection with this presentation. The recipients of this presentation shall bear exclusive responsibility for their own analyses and market assessment as well as evaluation of the Company s market position and its potential results in the future based on information contained in herein. To the extent this presentation contains forward-looking statements related to the future, in particular such terms as designed, planned, anticipated, or other similar expressions (including their negation), they shall be connected with the known and unknown risks, uncertainty and other factors which might result in actual results, financial situation, actions and achievements being materially different from any future results, actions or achievements expressed in such forward-looking statements. 18 z 18 4

19 Electricity market price trends Electricity Platforms: TGE, TFS, GFI, GPW-POEE (until April 18 + estimate) 217/216 Price (PLN/MWh) Volume (GWh) Price (PLN/MWh) Volume (GWh) Price % Volume % Forward BASE (Y+Q+M) % -39.8% Forward PEAK (Y+Q+M) % -24.8% Forward (weighted average) % -38.2% SPOT (TGE) % 1.5% Total weighted average % -33.7% Certificate type Property rights (PLN/MWh) Market prices (average between and ) Substitution fee and obligation for: RES (PMOZE_A) (14.35%) 3.3 (15.4%) RES from biogas plants (PMOZE_BIO) Coal cogeneration (PMEC-216) Gas cogeneration (PMGM-216) Methane cogeneration (PMMET-216) (.65%) 3.3 (.6%) (23.2%) 1. (23.2%) (6.%) 12. (7.%) (1.5%) 56. (1.8%) CO2 emission allowances(eua/t) CO2 market analysts survey* (updated in April 217) Price (EUR/t) 216 average 5.36 EUR/t 217 average 5.15 EUR/t 218 average 6.6 EUR/t 217 average price forecast by TAURON (**updated in April 217) EUR/t * Sources: Point Carbon, BNEF, Consus, GDF SUEZ Trading, HSE, Mkonline, Societe Generale, TAURON ** Average price in January - April TPE analysts adjustment 19 z 19 4

20 217 BASE contracts Average price [PLN/MWh] Volume [GWh] Total Including TGE non TGE Average electricity price that takes into account 217 one year BASE and PEAK contracts: PLN/MWh, total 217 BASE and PEAK volume: GWh 2 z 2 4

21 218 BASE contracts Average price [PLN/MWh] Volume [GWh] Total Including TGE non TGE Average electricity price that takes into account 218 one year BASE and PEAK contracts: PLN/MWh, total 218 BASE and PEAK volume: GWh 21 z 21 4

22 219 BASE contracts Average price [PLN/MWh] Volume [GWh] Total Including TGE non TGE Average electricity price that takes into account 219 one year BASE and PEAK contracts: PLN/MWh, total 219 BASE and PEAK volume: 2 35 GWh 22 z 22 4

23 Analysts covering TAURON Institution Analyst Institution Analyst DB Securities Tomasz Krukowski Raiffeisen Centrobank Teresa Schinwald Dom Maklerski mbanku Kamil Kliszcz Trigon Krzysztof Kubiszewski Societe Generale Dom Maklerski BZ WBK Bartłomiej Kubicki Paweł Puchalski UBS Investment Research Michał Potyra Patrick Hummel Tomasz Walkowicz Dom Maklerski PKO BP Stanisław Ozga WOOD & Company Bram Buring Dom Maklerski Banku Handlowego Piotr Dzięciołowski Dom Maklerski BOŚ Jakub Viscardi Ipopema Robert Maj Erste Group Tomasz Duda Pekao Investment Banking Łukasz Jakubowski 23 z 23 4

24 Thank you for your attention 24 z 24 4