Enel Green Power business plan. Rome - April 3 rd 2014

Transcription

1 Enel Green Power business plan Rome April 3 rd 2014

2 EGP business plan Agenda Snapshot on 2013 key achievements F. Starace, CEO Focus on geothermal R. Deambrogio, Head of Italy & Europe Focus on North America F. Venturini, Head of North America Focus on Latin America M. Bezzeccheri, Head of Latin America strategic guidelines F. Starace, CEO Asset value maximization: global approach to O&M R. Gonzalez, Head of O&M key business plan figures G. Carone, CFO Closing remarks F. Starace, CEO 1

3 EGP business plan Executing on business plan: 2013 highlights Additional capacity 1 GW EBITDA 1.8 bn Group net income 528 m Net debt 5.4 bn Strong growth coupled with safe and sound financial discipline 2

4 EGP business plan Historic EBITDA profile ( bn) +38% 1.8 Over 11% CAGR in the period bn of 2013 EBITDA from growth 1.1 bn of 2013 EBITDA from legacy markets EBITDA from legacy markets EBITDA from growth Strong growth and diversification in new markets 3

5 EGP business plan Value creation Return on Average Capital Employed 9.4% (0.9%) 8.5% 1.1% 9.6% ROACE 2010 IPO scope IPO scope ROACE 2013 Growth ROACE 2013 New capacity prompts increase in returns 4

6 EGP business plan Agenda Snapshot on 2013 key achievements F. Starace, CEO Focus on geothermal R. Deambrogio, Head of Italy & Europe Focus on North America F. Venturini, Head of North America Focus on Latin America M. Bezzeccheri, Head of Latin America strategic guidelines F. Starace, CEO Asset value maximization: global approach to O&M R. Gonzalez, Head of O&M key business plan figures G. Carone, CFO Closing remarks F. Starace, CEO 5

7 EGP business plan Key strategic considerations World electricity demand expected to grow by 60% by 2030 requiring an 80% increase in generation capacity Renewables will continue to play a key role particularly given increasing competitiveness vs. other sources First mover into new markets will secure the higher yield projects Operating excellence and scale in EPC 1 and O&M crucial to succeed Diversification increases opportunities and mitigates risks Maintain financial strength and flexibility 1. Engineering, Procurement and Construction 6

8 EGP business plan World electricity demand evolution 1 Electricity demand (TWh) Additional capacity (GW) Total installed capacity (GW) 2x +6, x 35,000 30,000 25,000 20,000 15,000 10,000 5, ,000 7,500 5,000 2, Renewable energies will account for 70% of the expected new power generation capacity up to Source: Bloomberg New Energy Finance Cumulated additional capacity in the period Conventional Renewables 7

9 EGP business plan World production mix evolution (TWh) Emerging markets North America Europe Renewables +66% Renewables +34% Renewables +36% 18,200 4,700 4,900 5,100 12,900 4, Electricity production: +41% Electricity production: +10% Electricity production: +4% Source: IEA 2013 World Energy Outlook Conventional Renewables 8

10 EGP business plan Brazilian auctions outcome 1 (GW) Total % on total % % % % Total % Hydro Wind Biomass Gas 1. Including: 2009: Leilao Reserva; 2010: A3, Leilao Reserva; 2011: Leilao Reserva, A3, A5; 2012: A5; 2013: Reserva, A5, A5, A3 Data refer to contracted capacity 9

11 EGP business plan Integrated business model Business Development Engineering & Construction First mover advantage EPC costs optimization Procurement O&M Asset value maximization Identification of top sites is crucial 10

12 Italy & Europe North America Emerging markets Investor Relations EGP business plan First mover advantage: gross pipeline (GW) March % 16% 9.1 March 2014 gross pipeline 20.4 GW March % 27% % March March % 15% 3% 1% March March Emerging markets take the lead with over 50% of the pipeline New markets Latin America Geo Hydro Wind Biomass Solar 11

13 EGP business plan First mover advantage: emerging markets phase zero (GW) March 2014 phase zero by geography 11.2 GW March 2014 phase zero by technology 11.2 GW 89% 2% 11% 59% 11% 28% Anticipation of market trends is core to profitable growth New markets Latin America Geo Hydro Wind Solar 12

14 EGP business plan Ongoing development additional capacity (GW) Additional capacity Additional capacity ENEOP COD 1Q 2014 Projects in execution Residual target with close to 60% of the plan already secured 13

15 EGP business plan Solid net pipeline 1 Coverage ratio (GW) Residual target by geography 2.1 GW Net pipeline by geography 6.5 GW % 16% 37% 27% 11% 24% 32% 38% Residual target March x covering 3.2x our residual target 1. Refers to project with COD expected within 2018 Italy & Europe North America New markets Latin America 14

16 EGP business plan 2014 upcoming renewable tenders 1 Apr May Jun Jul Aug Sep Oct Nov Dec Costa Rica 60MW Egypt 250MW Morocco 850MW Mexico 300MW South Africa 600MW Brazil 1,000MW Brazil 1,000MW Panama 200MW Brazil 1,500MW Chile 500MW Peru 300MW Italy 356MW Turkey 600MW Russia 500MW Guatemala 200MW South Africa 400MW Egypt 200MW Brazil 300MW Brazil 200MW Panama 100MW Chile 1,000MW Peru 200MW Saudi Arabia 400MW Costa Rica 40MW Kenya 300MW Italy 156MW 1. Figures also refer to EGP s expectations on overall volumes tendered by governments Geo Hydro Wind Biomass Solar 15

17 EGP business plan Integrated business model Business Development Engineering & Construction First mover advantage EPC costs optimization Procurement O&M Asset value maximization EPC and O&M crucial to succeed 16

18 EGP business plan Cost roadmap 1 Wind total capex ( /W) PV total capex ( /W) Declining costs pushing competitiveness 1. Expected cost trend in the industry 17

19 EGP business plan Agenda Snapshot on 2013 key achievements F. Starace, CEO Focus on geothermal R. Deambrogio, Head of Italy & Europe Focus on North America F. Venturini, Head of North America Focus on Latin America M. Bezzeccheri, Head of Latin America strategic guidelines F. Starace, CEO Asset value maximization: global approach to O&M R. Gonzalez, Head of O&M key business plan figures G. Carone, CFO Closing remarks F. Starace, CEO 18

20 EGP business plan O&M guidelines Zero accidents Production maximization Cost efficiency Better integration in existing networks 19

21 EGP business plan Enlarged complexity plants 2,500 generating units 4.8GW 1,500 O&M people 750 plants 5,000 generating units 8.9GW 1,800 O&M people power plants, + 2,500 generating units, additional GW 20

22 EGP business plan Results achieved vs targets announced in 2012 Leadership in O&M Portfolio volatility Lost production factor O&M Costs/MW Actual Historical Actual Target Actual Target % 6.8% +8% +6.8% 5.0% 3.1% % 90 5% +5% 3.7% +3.7% 5.0% % % 2.4% +3.5% +2.4% 2.0% % 100 4% 2.9% +4% +2.9% 2.3% 3.0% Normalized on 2011 O&M costs 21

23 EGP business plan O&M roadmap Targets definition Organization Systems & data analysis Strategic processes LPF 1 and O&M costs targets Organization optimization Global Professional System Control & monitoring systems & SAP Contracts & logistics Operational efficiency Predictive maintenance 1. Lost production factor 22

24 EGP business plan A step further towards excellence: 2018 targets Leadership in O&M Lost production factor O&M Costs/MW 1 Historical Actual Target 2016 Target Actual Target 2016 Target % 2.5% 2.5% Confirmed Confirmed 5% 2% 2% Confirmed NEW 4% 3% 2% NEW Confirmed 3.3% 1.5% NEW NEW Portfolio volatility targeted at +/2% by Normalized on 2011 O&M costs for hydro, wind and geo, on 2013 for solar 23

25 EGP business plan Agenda Snapshot on 2013 key achievements F. Starace, CEO Focus on geothermal R. Deambrogio, Head of Italy & Europe Focus on North America F. Venturini, Head of North America Focus on Latin America M. Bezzeccheri, Head of Latin America strategic guidelines F. Starace, CEO Asset value maximization: global approach to O&M R. Gonzalez, Head of O&M key business plan figures G. Carone, CFO Closing remarks F. Starace, CEO 24

26 EGP business plan Ongoing development additional capacity (GW) Additional capacity Additional capacity ENEOP COD 1Q 2014 Projects in execution Residual target with close to 60% of the plan already secured 25

27 Italy & Investor Relations EGP business plan Evolution of net installed capacity (GW) % 29% Europe 1 Emerging North America markets 1.2 Additional capacity +2.9GW Additional capacity +0.7GW +4.6GW Additional capacity +1GW Top notch load factor at close to 40% data includes planned decommissioning New markets Latin America 26

28 EGP business plan Capital expenditure ( bn) Growth capex by geography 10% Capex associated with additional capacity 1 Projects in execution 17% 46% Capex spent <2014 Work in progress 0.7 bn 2.3 bn 27% Capex to be allocated Residual target 3.1 bn Total growth capex = 5.4 bn Average = 1.6 m/mw Total capex equal to 6.1 bn 2 1. Does not include equity participations 2. Including maintenance capex Italy & Europe North America New markets Latin America 27

29 EGP business plan Revenues profile Breakdown by nature Predictable and stable cashflows Increasing share of PPAbased markets 28% 16% Declining weight of incentives Revenues from incentives Growth not relying on incentives 28

30 EGP business plan Forward sales Italy Latin America North America 90% 41% 96% 93% 91% 91% Hedged volumes Unhedged volumes Structural longterm hedging at 70% 29

31 EGP business plan Cost base evolution Opex (K /MW) +51% installed capacity Manageable costs 11 Nonmanageable costs % unit operating expenses Largest reduction from manageable costs Efficiency driving savings 30

32 EGP business plan Cashflow evolution ( bn) Debt evolution milestones 2015: ENEOP : cashflow parity 2018: net debt/ebitda at 2.1x CFFO Capex Interests Dividends FCF Strong cashflow generation in the period with 2018 Net debt stable vs

33 EGP business plan Theoretical balance sheet structure Assets 2018 Liabilities 2018 Gear up foreign subsidiaries with local currency debt Exploit low cost local opportunities Widen the array of financial instruments used Currency 1 Currency 2 Currency 3 Towards a currency balanced balance sheet 32

34 EGP business plan Agenda Snapshot on 2013 key achievements F. Starace, CEO Focus on geothermal R. Deambrogio, Head of Italy & Europe Focus on North America F. Venturini, Head of North America Focus on Latin America M. Bezzeccheri, Head of Latin America strategic guidelines F. Starace, CEO Asset value maximization: global approach to O&M R. Gonzalez, Head of O&M key business plan figures G. Carone, CFO Closing remarks F. Starace, CEO 33

35 EGP business plan Targets recap Additional capacity (GW) Growth capex 1 EBITDA ( bn) % % 5.4 bn 46% 1 27% Italy & Europe North America New markets Latin America Dividend policy: 30% payout ratio 1. Excluding maintenance capex 34

36 EGP business plan Successful growth story EBITDA profile ( bn) Portfolio concentration index IPO EBITDA from legacy markets EBITDA from growth Confirmed validity of strategic choice to grow outside legacy markets 1. Concentration: Low (0 0.15), Medium ( ), High (>0.25) 35

37 EGP business plan Closing remarks Consistent execution of business plan objectives Positive global trend on renewables continues to underpin growth Confident in our ability to deliver growth at or above our hurdle rate Proven business model supported by strong, flexible balance sheet 36

38 Enel Green Power business plan Strategic annexes Rome April 3 rd 2014

39 EGP business plan Strategic annexes Gross pipeline (GW) By probability of success By technology Highly confident (90%) Likely (50%) Potential (20%) March 2013 Wind Hydro Geo Solar Biomass March 2013 By geography By COD Italy & Europe North America Emerging markets March >2018 March

40 EGP business plan Strategic annexes additional capacity By geography By technology 21% 16% 70% 4.6 GW 4.6 GW 38% 25% 4% 7% 16% 3% Italy & Europe North America New markets Latin America Geo Hydro Wind Biomass Solar 39

41 EGP business plan Strategic annexes total projects in execution (MW) Business unit Wind Hydro Geo Solar Other Total Italy France Italy & Europe Brazil Chile Costa Rica Mexico Latin America USA North America South Africa New countries Total EGP 1, ,

42 EGP business plan Strategic annexes projects under construction (MW) Business unit Wind Hydro Geo Solar Other Total Italy France Italy & Europe Brazil Chile Costa Rica Mexico Latin America USA North America South Africa New countries Total EGP ,

43 EGP business plan Strategic annexes projects ready to build (MW) Business unit Wind Hydro Geo Solar Other Total Italy France Italy & Europe Brazil Chile Costa Rica Mexico Latin America USA North America South Africa New countries Total EGP

44 EGP business plan Strategic annexes 2018 installed capacity By geography By technology 51% 62% 9% 13.4 GW 13.4 GW 18% 7% 22% 22% 8% 1% 1 1. Including cogeneration Italy & Europe North America New markets Latin America Geo Hydro Wind Biomass Solar 43

45 EGP business plan Strategic annexes 2018 net production By geography By technology 49% 54% 15% 7% 45 TWh 20% 45 TWh 24% 25% 4% 2% Itay & Europe North America New markets Latin America Geo Hydro Wind Biomass Solar 44

46 EGP business plan Strategic annexes capital expenditure Growth capex by geography Growth capex by technology 10% 47% 17% 46% 5.4 bn 5.4 bn 20% 27% 14% 17% 2% Itay & Europe North America New markets Latin America Geo Hydro Wind Biomass Solar 45

47 Enel Green Power business plan Financial annexes FY 2013 results Rome April 3 rd 2014

48 EGP business plan Financial annexes FY2013 results: net installed capacity (MW) Business unit Wind Hydro Geo Solar Other Total Italy Rest of Europe Bulgaria France Greece Romania Italy & Europe ,646 1, , ,067 1, ,128 Iberia Spain Portugal Latin America Brazil Chile Costa Rica Mexico Panama Guatemala Iberia & Latam 1,778 1, , ,908 1, , ,072 USA Canada North America 1, , , ,683 Total EGP 5,122 2, ,883 47

49 EGP business plan Financial annexes FY2013 results: additional capacity (MW) Business unit Wind Hydro Geo Solar Other Total Italy Rest of Europe Bulgaria France Greece Romania Italy & Europe Iberia Spain Portugal Latin America Brazil Chile Costa Rica Mexico Panama Guatemala Iberia & Latam USA Canada North America Total EGP

50 EGP business plan Financial annexes FY2013 results: net production (GWh) Business unit Wind Hydro Geo Solar Other Total Italy Rest of Europe Bulgaria France Greece Romania Italy & Europe 1,259 1, ,074 3,213 6, ,607 5,301 5, ,249 2, ,081 15,343 Iberia Spain Portugal Latin America Brazil Chile Costa Rica Mexico Panama Guatemala Iberia & Latam 4,396 4, , , , , ,924 4, , , ,750 USA Canada North America 3, ,842 1,060 1, , ,360 Total EGP 12,169 10,921 5, ,453 49

51 EGP business plan Financial annexes FY2013 results: load factor Load factor FY 2012 FY 2013 Load factor FY 2012 FY % 43% 43% 47% 35% 35% 27% 29% 81% 83% 38% 40% 15% 14% 38% 40% 38% 40% Geo Hydro Wind Biomass Solar 50

52 EGP business plan Financial annexes FY2013 results: highlights 1 ( m) Revenues 2 EBITDA +12% +10% 2,476 2,778 1,626 1,787 FY 2012 FY 2013 Group net income FY 2012 FY 2013 Net debt +36% +18% ,614 5,446 FY 2012 FY 2013 Dec 31, 2012 Dec 31, FY2012 and FY2013 revenues, EBITDA, Group net income discontinue Enel.si. FY2012 EBITDA and Group net income also include the impact of IAS Including the effect of hedging activities relating to commodity risk management 51

53 EGP business plan Financial annexes FY2013 results: EBITDA analysis ( m) +10% 1, (126) +161 (16) (38) (18) 1,787 FY 2012 Volume effect Price effect Other revenues Opex Forex FY % EBITDA margin 1 65% 1. Generation activity only and 2012 ratio calculated on restated numbers 52

54 EGP business plan Financial annexes FY2013 results: EBITDA Italy & Europe ( m) +12% Italy Europe (73) 83 (33) (14) 1, FY 2012 Volume Price Volume Price Other FY 2013 Italy Europe 53

55 EGP business plan Financial annexes FY2013 results: EBITDA Iberia & Latam ( m) % Iberia Latam (50) (14) 25 (2) (10) FY 2012 Volume Price Volume Price Other Forex FY 2013 Iberia Latam 54

56 EGP business plan Financial annexes FY2013 results: EBITDA North America ( m) +25% (38) (8) 246 FY 2012 Volume Price Other Forex FY

57 EGP business plan Financial annexes FY2013 results: from revenues to costs ( m) FY 2012 FY 2013 Δ Energy revenues Revenues from incentives Other revenues 1, , (26) +8% +30% 15% Total revenues 2,476 2, % Direct costs energy & fuel purchases transmission costs other % +43% +38% n.m. Personnel costs (21) 10% Operation & maintenance % G&A and other % Total costs % 56

58 EGP business plan Financial annexes FY2013 results: from EBITDA to Group net income ( m) FY 2012 reported FY 2012 restated FY 2013 Δ EBITDA 1,678 1,626 1, % D&A (706) (696) (722) (26) +4% EBIT , % Net financial expense (230) (228) (268) (40) +18% Income/(expense) from equity investment % EBT % Income tax (298) (284) (324) (40) +14% Continued operations % Discontinued operations n.m. Net income % Minorities % Group net income % 57

59 EGP business plan Financial annexes FY2013 results: IFRS 11 application ( m) FY 2013 reported FY 2013 IFRS 11 Δ 19MW in Europe Revenues 2,778 2,710 (68) EBITDA 1,787 1,782 (5) 51MW in Spain EBIT 1,065 1, EBT (1) 155GWh Net income

60 EGP business plan Financial annexes FY2013 results: operating capex 1 ( m) By geography By technology By activity North America % 57% Iberia & Latam % 827 Growth 1,148 85% Italy & Europe % % 8% 111 9% 4% Other % Maintenance 197 Total operating capex for the period = 1,345 m 1. Net of cashgrant relating to the PV factory and Greece Geo Hydro Wind Biomass Solar 59

61 EGP business plan Financial annexes FY2013 results: net debt evolution ( m) +832 Dec 31, 2012 Cashflow from operations Operating capex Interests, taxes and dividends Cons. of NA projects Other Dec 31, ,317 4, ,614 1,493 1, , x Net debt/ebitda 1 3.0x Tax partnership liabilities ratio calculated on restated numbers 60

62 EGP business plan Financial annexes FY2013 results: debt structure ( bn) % % Net debt as of Dec 31, 2013 Cash & equivalent Financial receivables Gross debt as of Dec 31, 2013 Dev. institutions and ECAs Tax partnership liabilities Structured finance Bank loans & other Total third party Third party Parent company Average maturity = 6.5yrs Average cost of debt = 4.8% Current availability = 3.6 bn 61

63 EGP business plan Financial annexes FY2013 results: gross debt structure Gross debt by currency Gross debt by interest rate Gross debt maturity 79% 74% 87% 6.3 bn 6.3 bn 6.3 bn 18% 3% 26% 13% Euro US Dollar Other Floating Fixed + hedged S/T L/T Average maturity = 6.5yrs Average cost of debt = 4.8% Current availability = 3.6 bn 62

64 EGP business plan Financial annexes FY2013 results: longterm debt maturity ( m) >2017 Total Third party ,070 3,014 Parent company ,475 2,483 Total ,545 5,497 63

65 EGP business plan Financial annexes FY2013 results: consolidated balance sheet 1 ( m) FY 2013 FY 2012 Δ Net fixed assets 14,530 13, Net working capital (290) (529) (239) Gross capital employed 14,240 13,049 1,191 Sundry provisions (556) (482) (74) Assets held for sale Net capital employed 13,709 12,567 1,142 Total shareholders equity 8,263 7, Net financial debt 5,446 4, FY 2012 have been restated to include IAS 19 application and final PPA allocation 64

66 EGP business plan Disclaimer This presentation contains certain forwardlooking statements that reflect the Company s management s current views with respect to future events and financial and operational performance of the Company and its subsidiaries. These forward looking statements are based on Enel Green Power S.p.A. s current expectations and projections about future events. Because these forwardlooking statements are subject to risks and uncertainties, actual future results or performance may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of Enel Green Power S.p.A. to control or estimate precisely, including changes in the regulatory environment, future market developments, fluctuations in the price and other risks. You are cautioned not to place undue reliance on the forwardlooking statements contained herein, which are made only as of the date of this presentation. Enel Green Power S.p.A. does not undertake any obligation to publicly release any updates or revisions to any forwardlooking statements to reflect events or circumstances after the date of this presentation. This presentation does not constitute a recommendation regarding the securities of the Company. Pursuant to article 154bis, par 2, of the Consolidated Financial Act of February 24, 1998, the executive in charge of preparing the corporate accounting documents at Enel Green Power S.p.A., Giulio Antonio Carone, declares that the accounting information contained herein correspond to document results, books and accounting records. 65

67 EGP business plan Contact us Donatella Izzo, IR manager Elena Accorinti Alessandro Marchi Etienne Martoïa T: F: Web site: 66