2013 ANNUAL RESULTS. Investor presentation. Pierre-Alain Urech, CEO. Denis Matthey, CFO. Zurich April 1st,

Transcription

1 2013 ANNUAL RESULTS Investor presentation Zurich April 1st, 2014 Pierre-Alain Urech, CEO Denis Matthey, CFO

2 Romande Energie at a glance Challenges facing the energy industry Financial results Remarks and outlook 2

3 Romande Energie at a glance Romande Energie is the leading supplier of electricity in Western Switzerland. Core lines of business: Power generation and management Energy distribution Energy marketing Energy services More than 300,000 end-customers situated in close to 300 municipalities in the cantons of Vaud, Valais, Fribourg and Geneva. Proprietary generation is 100% from renewable sources. 3

4 Romande Energie at a glance Group structure Romande Energie Holding SA is listed on the Zurich Stock Exchange. It was founded in 1901 as Compagnie vaudoise des Forces motrices des lacs de Joux et de l Orbe. Market capitalisation was CHF bn as at 31 December Shareholder base: Vaud Canton (38.60%) Municipalities in Vaud canton (14.05%) Treasury shares (9.95%) Groupe E (5.80%) BKW Energie (5.00%) BCV (3.41%) Holdigaz (2.52%) Free float (20.67%) 4

5 Romande Energie at a glance Challenges facing energy industry Financial results Remarks and outlook 5

6 Challenges facing the energy industry European market in state of flux Economic recession drop in energy consumption. Hefty subsidies by some EU member states sharp upturn in generation from new sources of renewable energy. This has led to: o Overproduction o Plunge in market power prices Market prices are lower than the cost of producing power, especially for new assets. Forecasts for the coming years do not point to radical change in this trend. 6

7 Challenges facing the energy industry Switzerland: Energy Strategy 2050 Energy Strategy 2050 phasing-out nuclear power by relying on: energy efficiency renewable sources electricity imports use of natural gas-fired plants to cover supply needs in the medium term Romande Energie supports this strategy but highlights that it: is particularly ambitious will require adjustments to framework conditions is an opportunity for the Swiss power industry to evolve 7

8 Challenges facing the energy industry Market liberalisation and EU agreement Result of referendum held on 9 February this has halted talks with the EU towards a bilateral agreement on the electricity market, due to come into force on 1 January Federal Councillor Doris Leuthard has reiterated her determination for a liberalised market for all users from 1 January 2018? The main grounds for unfettered competition are prices currently distorted by massive renewable-energy subsidies in some countries. Romande Energie is still in favour of full market liberalisation for many years, it has been preparing all its business lines for competition. 8

9 Challenges facing the energy industry Cantons, munipalities and consumers Vaud - 1 July 2014: entry into force of new Energy Act under which no less than 30% of hot-water needs and 20% of electricity needs in new constructions must be met by renewable energies. Valais talks under way on the handing back of hydro-power concessions. Municipalities sharp increase in incentives for energy efficiency and onsite generation using renewable sources. Users heightened interest in energy issues and increasingly stringent expectations advice, usage-tracking systems, energy-efficiency and generation services. 9

10 Romande Energie at a glance Challenges facing the energy industry Financial results Remarks and outlook 10

11 Key figures in 2013 Stable revenue and solid operating profit Key figures CHF Net revenues % Gross profit % As % of net revenues 45% 45% Operating expenses ( ) ( ) -0.4% EBITDA % As % of net revenues 21% 21% EBIT % As % of net revenues 12% 12% Share of profit of associates ( ) nr Net profit ( ) nr As % of net revenues 12% -48% 11

12 Key figures in 2013 Grip on operating expenses Key figures CHF Net revenues % Gross profit % As % of net revenues 45% 45% Operating expenses ( ) ( ) -0.4% EBITDA % As % of net revenues 21% 21% Personnel expenses ( ) * ( ) 2.6% Other operating expenses ( ) ( ) -5.8% EBIT % As % of net revenues 12% 12% Share of profit * of 2013: associates impact of IAS ( ) nr Net profit ( ) nr As % of net revenues 12% -48% 12

13 Key figures in 2013 Rise in EBITDA and EBIT Key figures CHF Net revenues % Gross profit % As % of net revenues 45% 45% Operating expenses ( ) ( ) -0.4% EBITDA % As % of net revenues 21% 21% EBIT % As % of net revenues 12% 12% Share of profit of associates ( ) nr Net profit ( ) nr As % of net revenues 12% -48% 13

14 Key figures in 2013 Solid operating performance in a tough environment 14

15 Key figures in 2013 Positive contribution from associates Key figures CHF Net revenues % Gross profit % As % of net revenues 45% 45% Operating expenses ( ) ( ) -0.4% EBITDA % As % of net revenues 21% 21% EBIT % As % of net revenues 12% 12% Share of profit of associates ( ) nr Net profit ( ) nr As % of net revenues 12% -48% 15

16 Key figures in 2013 Positive contribution from associates Key figures CHF 000 EOS HOLDING 2013 : 28.72% 29.71% Net revenues % Gross profit % As % of net revenues 45% 45% Share of revenues of Other Group Operating expenses EOS Holding SA associates ( ) ( 138 companies 088) -0.4% CHF EBITDA % 2012 Share As % of of net net revenues profit of 21% 21% ( ) associates EBIT % As % of net revenues 12% % Share of profit of associates ( ) nr Net profit ( ) nr As % of net revenues 12% -48% 16

17 Key figures in 2013 Net profit in positive territory after two years of hefty impairment charges relating to Alpiq Key figures CHF Net revenues % Gross profit % As % of net revenues 45% 45% Operating expenses ( ) ( ) -0.4% EBITDA % As % of net revenues 21% 21% EBIT % As % of net revenues 12% 12% Share of profit of associates ( ) nr Net profit ( ) nr As % of net revenues 12% -48% 17

18 Key figures in 2013 Profit by business unit 18

19 Condensed consolidated balance sheet CHF ASSETS Consolidated balance sheet Financial independence ratio at 81% and acquisition of own shares Current assets Non-current assets Total assets LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Non-current liabilities Total liabilities Total shareholders' equity Total liabilities and shareholders' equity

20 Cash flows Cash flow Group's business operations still generating plentiful cash CHF Cash flow before change in working capital Change in WCR ( ) Net cash provided by operating activities Purchases of PPE and intangible assets ( ) ( ) Acquisitions of own shares ( ) - Other changes ( ) Net increase in cash and cash equivalents ( ) Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

21 Balance sheet figures Capital expenditure 21

22 Cash flow Group's business operations still generating plentiful cash Cash flows CHF Cash flow before change in working capital Change in WCR ( ) Net cash provided by operating activities Purchases of PPE and intangible assets ( ) ( ) Acquisitions of own shares ( ) - Other changes ( ) Net increase in cash and cash equivalents ( ) Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

23 Other financial indicators Respectable figures despite tough conditions Key figures Regulated rate of return for grid operation (WACC) 3.83% 4.14% 4.25% Regulated rate of return for power generation (WACC) 6.09% 6.09% 6.09% Free cash flow CHF ( ) Dividends received from associates CHF Return on capital employed 5.64% 6.23% 2.05% Net cash CHF Total shareholders' equity CHF As % of total assets 81% 81% 82% Entreprise Value CHF Entreprise Value / EBITDA Own-power production in relation to energy distributed 17% 18% 13% Staff numbers (FTEs) on Dec

24 RE Holding share price Energy transition is weighing on industry Source : SIX-Telekurs 24

25 RE Holding share price Book value per share still far higher than market price 25

26 RE Holding share price Book value per share still far higher than market price Switzerland P/BOOK Europe P/BOOK BKW 0.60 E. ON 0.76 ALPIQ 0.61 RWE 2.26 REPOWER I 0.53 ENBW 1.45 REPOWER PS 0.38 EDF 1.57 ENERGIEDIENST 0.95 ENEL 1.02 Ø 0.61 Ø 1.41 ROMANDE ENERGIE 0.56 Source : Bloomberg / March

27 Dividend for 2013 Solid operating results have allowed for increase in dividend to CHF 30 (50.4% of net profit) Payout ratio (EBITDA) 27

28 Dividend for 2013 (payment date: 4 June 2014) Dividend yield of 3% tallies with sector average Par value : CHF 25 Market capitalisation: CHF Free Float: 20.68% ISIN: CH

29 Core shareholders (December 2013) Romande Energie Holding SA 29

30 Financial calendar for March Publication of 2013 annual results in Lausanne 1 April Analysts/investors presentation of 2013 results in Zurich 25 April 2013 Management Report (french) and Full Financials (french and english) 16 May Closure of the share register 27 May Annual General Meeting in Morges 30 May Ex dividend date 3 June Record date 4 June Payment date 2 Sept. H results 30

31 Romande Energie at a glance Challenges facing the energy industry Financial results Remarks and outlook 31

32 Remarks and outlook From power supplier to energy all-rounder Romande Energie's business strategy common selling blueprint for all of the Group's business lines. The aim is that Romande Energie will become the reference in Western Switzerland for informing and supporting customers through the current energy transition. Inception of new Energy Services business unit on 1 January 2014 building energy systems, lighting systems, heating advisory services and systems. Alliance with Holdigaz and Alpiq InTec for the provision of energy services to businesses and households in Western Switzerland. 32

33 Remarks and outlook Optimising our supply sources Proprietary power generation = less than 20% of energy marketed to customers. The purchasing of electricity from power firms and on the wholesale market is a core business optimising management of energy portfolio but within strict risk parameters. Drop in wholesale power prices over recent months is unlikely to be reversed in 2014 positive trend in gross margin. Overarching goal is building up proprietary power generation over the long term. In this context, the Group is aligning with Energy Strategy

34 Remarks and outlook Priority given to renewable sources Priority is given to generating from renewable sources and to projects situated in Switzerland: o Optimising capacity of existing installations (e.g. Rivaz x7, Les Farettes +70%) o Developing projects in solar power, biomass, in small-scale investments out hydro-power, wind power and geothermics. to 2025 Intent on seizing opportunities in France and Germany (wind, solar and hydro-power). Founding of Romande Energie France SAS first acquisition was Meyronnes hydro-power plant. Risks screened stringently in view of current energy environment. + CHF 1bn 34

35 Remarks and outlook Grid performance Steady capital expenditure (approx. CHF 50m annually) maintaining, modernising, adapting to new generation methods and new expectations of customers (who want to monitor and thus keep control of consumption). Deploying optical fibre increasing quality of supply and offering new services. Continued implementation of asset-management strategy and continuous improvement (process optimisation, simplification of customer communication channels, strengthening of results culture, unflinching attention to secure provision): + supply security and quality + cost control and associated impact on power tariffs R&D programmes look ahead to tomorrow's networks impact of on-site generation, smart grids, energy storage, etc.. 35

36 Remarks and outlook Meeting new customer expectations Encouraging energy efficiency: o Energy services Energy audits Economical public lighting Solutions for producing electricity, heat and cool air (heat pumps, PV solar and thermal installations, etc.) o Awareness-raising "Déclics" scheme: Participatory web platform Information booth at public events and initiatives within companies Tracking consumption in online customer centre (+ app.) Demo Eco-comparative guide available online (+ mobile): identifying best value-formoney appliances in relation to their energy efficiency measuring and improving energy saving in the home. 36

37 Remarks and outlook Meeting new customer expectations New price plans for today's energy context: Contrats Energies Libres with Terre Suisse and Terre Romande offerings: Regional sourcing of power Production type Solutions promoting energy efficiency No minimum duration Internal programme for ongoing improvement in customer focus continued optimisation of services on offer: Online customer centre available around the clock Website being adapted to requirements of most frequent visitors Implementation of CRM (Client Relationship Management) system 37

38 Remarks and outlook A responsible corporate citizen CSR is a priority at Romande Energie. It is a leitmotiv throughout the whole company. Our CSR strategy respects all our stakeholders and customers, factoring in their concerns about the economic, environmental and social impact of our operations. CHALLENGES... UPHOLDING GOOD GOVERNANCE PRINCIPLES ENERGY EFFICIENCY AN ATTRACTIVE, RESPONSIBLE BUSINESS COMPETITIVE GOODS AND SERVICES SECURE SUPPLY AND RELIABLE NETWORK RESPECT FOR THE ENVIRONMENT ECONOMIC LONGEVITY 38

39 Thank you for listening We will be pleased to take questions Pierre-Alain Urech CEO +41 (0) Denis Matthey CFO +41 (0)

40 Contact Investor relations Romande Energie Holding SA Rue de Lausanne 53 Case postale CH-1110 Morges 1 Investor relations René Lauckner, Head of Group Treasury Telephone: +41 (0) Fax: +41 (0) rene.lauckner@romande-energie.ch 40

41 Contact Media relations Romande Energie Holding SA Rue de Lausanne 53 Case postale CH-1110 Morges 1 Media relations Karin Devalte, Head of Communications Telephone: +41 (0) Fax: +41 (0) karin.devalte@romande-energie.ch 41