Leading provider of comprehensive energy and infrastructure services

Transcription

1 BKW COMPANY PRESENTATION, 19 MARCH 2015 Leading provider of comprehensive energy and infrastructure services Suzanne Thoma, CEO / Ronald Trächsel, CFO

2 Overview Financials FY 2014 Outlook and Strategy Summary 2

3 In 2014 the business environment remained challenging Changing energy landscape leads to business opportunities for innovative companies BKW strategy: Stabilizing in and capitalizing on a changing environment 3

4 In search of robustness buildup services strengthen energy develop grid Strategy delivers: EBIT +10%, operating cash flow +70% 4

5 Strong results 2014 EBIT CHF m Operating cash flow CHF m +70% +10% * 317* FY 2012 FY 2013 FY 2014 FY 2012 FY 2013 FY 2014 * adjusted for exceptional impairment charges for power plants 5

6 Financials FY 2014

7 Financial highlights FY 2014 Strong results: EBIT +10%, net profit +75% Services: Operating revenue +20% Cost efficiency improved Net working capital reduced by CHF 70m Strong operating cash flow of CHF 538m: record over five-year period Net debt reduced by 40% Liquidity at CHF 1.3bn (+CHF 0.5bn) Sustainable solid balance sheet: equity ratio increased to 32% Proposed dividend: CHF 1.60 (+33%) 7

8 Income statement CHF m FY 2013* FY 2014 change in % Net sales 2,567 2,722 Other income Operating revenue 2,734 2,845 4% Energy procurement -1,403-1,478 Other operating expenses EBITDA % Depreciation, amortisation and impairment Income from associates EBIT % Financial result Income taxes Net profit % * adjusted for exceptional impairment charges for power plants 8

9 Operating revenue per business area CHF m +3% 2,120 2,173-3% % Energy Grid Services Services revenue increased by 20% 9

10 Management focus on operating expenses CHF m 31% % FY 2013 FY 2014 Personnel expenses Other operating expenses Cost efficiency increased from 31% to 29% of operating revenue 10

11 EBIT development CHF m 317* % 347 Exceptional effects Gain on sale of transmission grid (CHF 31m) Refund of cost for system services (CHF 17m) FY 2013 exceptional effects FY 2013 FY 2014 adjusted normalised * adjusted for exceptional impairment charges for power plants Normalised EBIT increased by 30% 11

12 EBIT history CHF m * * * FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 * adjusted for exceptional impairment charges for power plants Solid and stable development of EBIT 12

13 Net profit CHF m +100% * Net profit FY13 Special effects Income taxes Net profit FY13 Change in EBIT Effects in Net profit FY14 adjusted in EBIT «Robin Hood» normalised financial result * adjusted for exceptional impairment charges for power plants Normalised net profit increased by 100% 13

14 Strong operating profit drives cash generation CHF m FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Operating cash flow: best over 5-year period 14

15 Focus on profitable maintenance/replacement investments and regulated production CHF m growth maint./ repl. FY 2012/2013 FY 2014 Maintenance/replacement investments: Ensure flawless operation and protect asset value 15

16 Increased liquidity/reduced net debt CHF m FY 2013 FY , ,590-1,734 Cash & equivalents & current financial assets Financial debt Net financial debt * PY adjusted for exceptional impairment charges for power plants Solid financials to put strategy in place 16

17 Successful launch of convertible bonds In September, BKW successfully issued convertible bonds: Nominal amount: CHF 163m Coupon: 0.125% Strike: CHF Maturity: 30 September 2020 In parallel, E.ON successfully issued exchangeable bonds: Nominal amount: EUR 113m Coupon: 0.0% Strike: EUR Maturity: 01 October 2018 Strong liquidity reserves 17

18 Maturity profile of financing CHF m Convertible bond Bonds Registered bonds Long-term financing framework provides financial flexibility 18

19 Sound balance sheet CHF bn 31% 32% % 2,1 7,7 5,3 2,4 7,9 5,4 5,6 5,6 2,4 FY 2013 FY ,5 Non-current assets Current assets Equity Liabilities Equity ratio Equity ratio increased to 32% 19

20 Reliable dividend policy CHF m 80 40% 35% 40% 40% Payout ratio* CHF 1.00 CHF 1.20 CHF 1.20 CHF 1.60 FY 2011 FY 2012 FY 2013 FY 2014 * based on net profit after exceptional effects Stable dividend policy 20

21 Business segment: Production CHF m FY 2013* FY 2014 Total operating revenue 1,203 1,084 Energy procurement and other electricity business Other operating expenses EBITDA Depreciation, amortisation and impairment Income from Associates EBIT Investments Revenue down, due to significantly lower transfer prices for energy Cost reduced by 7% Electricity procurement: PY one-off in relation with refund of cost for system services (CHF +17m) * adjusted for exceptional impairment charges for power plants Lower internal transfer prices for energy partially compensated by efficiency improvements and cost reductions 21

22 Business segment: Renewables & Efficiency CHF m FY2013* FY 2014 Electricity sales and income from other energy business Income from services Total operating revenue Operating expenses EBITDA Depreciation, amortisation and impairment EBIT -5 7 Electricity sales up 9% despite lower market prices in Italy Income from services up 20% Underproportional cost growth despite set-up costs for services EBIT positive at CHF 7m Investments * adjusted for exceptional impairment charges for power plants Increasing revenue from services, positive operating result 22

23 Business segment: Market CHF m F 2013* FY 2014 Electritcity sales Electricity trading 1,019 1,151 Other operating Income Total operating revenue 2,155 2,213 Energy procurement and other electricity business -2,047-2,036 Other operating expenses EBIT Depreciation, amortisation and impairment -3-1 Electricity sales decreased due to weather-related lower volumes Electricity trading up as production volumes remained stable Cost savings of 7% EBIT positive at CHF 24m Income from associates 6 6 EBIT Investments * adjusted for exceptional impairment charges for power plants EBIT improved by CHF 84m 23

24 Business segment: Networks CHF m FY 2013 FY 2014 Grid usage fees Income from services Other operating income Total operating revenue Operating expenses EBITDA Depreciation, amortisation and impairment Income from associates 4 13 EBIT Investments Revenue up despite lower volumes due to weather conditions Income from services up 8% Operating expenses up due to higher levies Normalized EBIT increased by 6% PY EBIT positively impacted by sale of transmission grid (+CHF 31m) Stable results and continued expansion of services 24

25 Outlook and Strategy

26 Outlook FY 2015 Negative impact of energy prices on operating result Strengthened Swiss franc adds additional burden Partially compensated by efficiency and cost management active management of the energy position result-driven management of grid business growth of services business Robust results expected, but below strong

27 Strategy buildup services strengthen energy develop grid Robust business model with opportunity to capitalize on increasing energy prices 27

28 Strengthen Energy Achievements FY2014 Decommissioning project for Mühleberg nuclear power plant on track Decommissioning cost already set aside in provisions Effective efficiency and cost management in operation of power plants Several power plants with production records Successful management of own energy position 28

29 Develop Grid Achievements FY2014 Higher value of distribution grid: +CHF 400m ElCom decision allows to invest further in an innovative distribution grid Very solid management of grid infrastructure Technology solution leader: Development of innovative technologies for a sustainable, secure supply infrastructure 29

30 Buildup Services Achievements FY2014 Sharpened Services strategy Successful M&A strategy Leading position in grid services underpinned Entrance in heating, air conditioning and building services as well as in nuclear and hydropower services business Pushing existing business: Organic growth +12% 30

31 Key project: Decommissioning KKM Key facts Decommissioning project work started In January 2015, ENSI approved concept for long-term operation until FY 2019 ENSI-decision removed final uncertainty in relation to the remaining operating life Communicated investments of CHF 15m confirmed Decommissioning concept will be submitted by end-2015 Project work for decommissioning according to plan 31

32 Key project: Decommissioning KKM Decommissioning and disposal cost Estimation excl. inflation Provisions end-2014 State funds end-2014 CHF 800m decommissioning cost CHF 759m* CHF 370m CHF 1,300m dispoal cost CHF 713m CHF 530m CHF 2,100m estimated total cost CHF 1,472m CHF 900m Payments to state funds until FY2022 * Whereof CHF 350m for post-operation phase have not to be covered by state funds. 32

33 Energy: Successful management of own energy position Production Substantial maintenance/replacement investments in existing power plants (CHF 1bn until 2024) Growth in regulated renewable energy production Focus on operational efficiency Sales Further extend already strong customer base Maintain strong sales platform for integrated energy and infrastructure services Trades Optimize management of own energy position Hedge market risks Create new products in energy trading Efficient production, strong customer base and successful management of own energy position 33

34 Grid: Classical and smart grid Distribution grid Continuous investments: BKW aims to invest CHF 1bn in grid infrastructure until 2024 Regulated business with stable contribution to operating profit ElCom decision on value of distribution grid (CHF 400m higher) will lead to tariff increase Smart grid System competence: Innovative technological solutions for modern integrated networks Exploiting, researching and refining technical opportunities: The energy revolution is in the grid Developing a future-proof electricity network 34

35 Services: Focus areas Grid and infrastructure services Asset management Intelligent buildings Energy-related services Decentralisation of energy production Power plant engineering High degree of concretion Buildup comprehensive energy and infrastructure services 35

36 Financing the strategy CHF 4bn investments until FY 2024 expansion of services business CHF 1bn maintenance/replacement grid infrastructure CHF 1bn maintenance/replacement power plants CHF 1bn net investments in renewable energy CHF 1bn Financed by strong operating cashflow streamlining the non-operational portfolio Investments financed by internally generated funds March 2015 COMPANY PRESENTATION

37 Summary

38 BKW strategy shaped to create value Robustness in turbulent times Ability to capitalize on increasing electricity prices Sustainable cash generation Attractive payouts BKW business model: Robust, profitable and sustainable 38

39 Appendix

40 Financial calendar and contact information Financial calendar Publication of 2014 Annual Results: 19 March 2015 Annual General Meeting: 8 May 2015 Ex-Dividend Date: 12 May 2015 Dividend Payment: 15 May 2015 For further information, please contact: Thomas Herren, Investor Relations Officer Tel (+41) investor.relations@bkw.ch 40

41 Generation in GWh Generation and purchases in GWh FY 2013 FY 2014 Capacity FY 2014 Hydroelectric plants 3,912 3,843 Nuclear power plants incl. purchase contracts 5,833 6,080 56% 44% Peak load Base load Fossil-thermal power plants New renewable energy incl. fin. investments Total generation 11,180 11,249 Trade (purchases) and energy buy-backs 8,221 9,762 Total 19,401 21,011 Total capacity MW 3,046 3,046 Output FY % 21% Peak load Base load Peak load: storage, pump storage plants and CCGT Tamarete Base load: run-of-river, nuclear, other plants 41

42 BKW Group Generation overview Germany Switzerland (Core market) Generation FY 2014 (incl. French purchase contracts) Installed production Installed production under construction 9.8 TWh Generation FY TWh Installed production MW Installed production under construction 248 MW MW 50 MW Italy Generation FY TWh Installed production MW Installed production under construction 42 0 MW

43 Appendix: Sales in GWh Sales in GWh FY 2013 FY 2014 Sales Switzerland 7,536 6,784 Sales International 1,762 1,687 Trading 9,637 12,046 Pump energy Transmission losses and own consumption Direct sales from fin. investments Delivering electricity directly and indirectly via its distribution partners to more than 1 million residents in Switzerland Strong market position one of the most important distributors in Switzerland Sales international refer to sales activities in Italy Sales Switzerland and international: number of customers increased, but lower volumes due to weather Total 19,401 21,011 43

44 Direct access to end customers Customers won, but due to weather lower volumes Customer structure FY 2013 Customers FY 2014 Customers FY 2013 GWh delivered FY 2014 GWh delivered % change Regulated customers (Switzerland) Business customers (Switzerland and Italy) Distributors (Switzerland and Italy) 357, ,000 2,107 1,910-9% 2,600 2,800 3,027 3,045 +1% ,164 3,516-16% Total 360, ,000 9,298 8,471-9% Services: expansion through innovations and focused acquisitions «Services» Customers 20,000 to 30,000 Sales 245 MCHF Sales CHF 291m +20% 44

45 Shareholder structure free float of 22.5% BKW Inc. shares are listed on the main standard of SIX Swiss Exchange (SIX) and are included in the Swiss Performance Index (SPI) Significant shareholders 22.5% Canton of Berne 8.3% 6.7% 10.0% 52.5% Groupe E Ltd. E.ON SE (exchangeable bond) Treasury shares (convertible bond) Free float 45

46 Disclaimer This presentation contains forward-looking statements which are made on the basis of current expectations and assumptions. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. Potential risks and uncertainties include, among others, such factors as market and economic conditions, governmental regulations, competitive conditions, interest rates and fluctuation in currency exchange rates. Although BKW believes that its expectations reflected in any such forward-looking statement are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved. BKW undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. 46