Corporate strategy in times of crisis

Transcription

1 Corporate strategy in times of crisis Antonio Llardén, Enagás Executive Chairman IESE. Barcelona, 24 January 2014

2 Index 1. About Enagás 2. How to face the crisis 3. New environment, new strategy 4. Corporate governance 5. Results 6. Conclusions

3 1. About Enagás Enagás is the leading natural gas transmission company in Spain and Technical Manager of the Gas System, and is authorised as an independent TSO by the European Union. 3

4 1. About Enagás 4

5 1. About Enagás Key figures ( Mn) 2012 Net profit EBITDA Investment Assets put into operation Enagás shareholder structure (GWh) Demand for natural gas transported in the System 418,964 Enagás is an infrastructure company It is an independent company that is not part of any vertically integrated group Since the IPO of the company in 2002, it has been listed in the Ibex 35 5

6 Index 1. About Enagás 2. How to face the crisis 3. New environment, new strategy 4. Corporate governance 5. Results 6. Conclusions 6

7 2. How to face the crisis Growing in times of crisis: 1 2 Anticipate React 3 4 Act Explain 7

8 Index 1. About Enagás 2. How to face the crisis 3. New environment, new strategy 4. Corporate governance 5. Results 6. Conclusions 8

9 3. New environment, new strategy Efficiency drive Cost control and efficiency plan Implemented in 2008 Intensified and extended to 2014 Better results each year Tight grip over operating costs NOTE: Estimates for 2013 are based in 2013 budget and Company targets 9

10 3. New environment, new strategy Unlocking the value of the company's know how 40 years' experience of global management of a complex gas system and the LNG chain Acquisition of core business assets Vertically-integrated energy companies dispose of non-strategic assets Drawing on Enagás' technological know-how, experience, and operating and financial resources Positioning of the company as a strategic partner Acquisitions that fit with debt and profitability targets established in the Strategic Plan 10

11 3. New environment, new strategy International activity (1) 51% in an SPV owning 40%, in partnership with Oman Oil. Enagás' know-how in LNG a decisive factor for vendors and other partners 11

12 3. New environment, new strategy Anglo-Saxon approach in financing Before crisis (31/dic/2006) Situation on 31/12/ % 36% 22% 49% 38% 40% 51% ICO+BEI Bank debt ICO+BEI Bank debt Capital markets 56% debt in fixed rate Mainly Bank financing Excelent ratings S&P/Fitch: AA-/A+ Liquidity: 417 mill 82% debt in fixed rate Diversified and balanced sources of funding Ratings S&P/Fitch: BBB/A- (made conditional to Spain s Kingdom rate) Liquidity mill Lowest financial cost of the non financial IBEX-35 companies 12

13 3. New environment, new strategy Adaptation of the company's corporate governance policy One of the highest free floats in the Ibex 35 index 85% One of the companies on the Spanish stock market with the largest number of international investors 75% Main profile of international investors: longterm investors, pension funds and wealth funds Enagás complies with the most demanding national and international corporate governance recommendations 13

14 3. New environment, new strategy Growth of asset base and workforce Growth of gross fixed assets Workforce x2 +20% In a high crisis context, Enagás has duplicated its size creating employment 14

15 3. New environment, new strategy Strong commitment to CSR Enagás is member of the most relevant sustainability indexes: DJSI, FTSE4Good, Global Compact, Ethibel. In 2011 Enagás was world leader in DJSI Enagás management model has achieved the European Excellence Awards 500+ EFQM Enagás has been verified as Family-Responsible, Equal opportunities and Top Employers Company Enagás is adhered to the International Integrated Reporting Council (IIRC) to develop an Integrated Reporting Framework 15

16 3. New environment, new strategy Explain: transparency and communication with the stakeholders Regulators Shareholders Market players Government Banks Investment funds Media 16

17 Index 1. About Enagás 2. How to face the crisis 3. New environment, new strategy 4. Corporate governance 5. Results 6. Conclusions 17

18 4. Corporate governance In 2007, Enagás aligned its internal regulations with the recommendations of the Unified Good Governance Code and has adopted various measures in this regard since: 2007 Board limited to a maximum of 17 members Remuneration of the Board of Directors disclosed individually External assessment of Internal Control over Financial Reporting system in line with Sarbanes-Oxley Act requirements Appointments, Remuneration and Corporate Responsibility Committee Increase in number of women directors 2 women on the board of directors 2010 Appointment of a Lead Independent Director Electronic voting/forum for shareholders Every Committee of the Board is chaired by an Independent Board member Majority of Independent directors on the Board and in the two committees Separation of functions (Chairman/CEO) & CEO appointment Establish in By-laws: maximum number of Directors (15), maximum number of boards of listed companies on which Directors may sit (5), Committees chaired and with majority of Independents Importance of proxy advisors as voting prescribers NOTE: Currently the Board has 15 members, 60% Independent and 20% women, percentages higher than the average for Ibex 35 companies 18

19 4. Corporate governance Thanks to these measures, and despite the majority of investors being foreign, all the resolutions proposed in the 2013 Shareholders Meeting were adopted with practically 100% of the votes in favour: % approval of agenda items in the 2013 GSM % % % % % % % % % % % % The recommendations of the main Proxy Advisors (ISS and Glass Lewis) were favourable 19

20 Index 1. About Enagás 2. How to face the crisis 3. New environment, new strategy 4. Corporate governance 5. Results 6. Conclusions 20

21 5. Results Enagás stock price evolution vs Ibex during the validity of our Strategic Plan 20% 10% Enagás +7,8% 0% 10% 20% 30% 40% Ibex -29.9% 50% 60% Ibex Enagas 70% d 06 d 07 d 08 d 09 d 10 d 11 d 12 d 13 21

22 5. Results The company has met, and even surpassed, its guidance for the sixth consecutive year despite the challenging economic environment. NOTE: Estimates for 2013 are based in 2013 budget and Company targets Enagás has managed to attract and retain foreign capital, from both investors and lenders. Enagás has known how to continue to pursue its main corporate purpose (supply security, maintenance of the Spanish gas infrastructure network, necessary investments, etc.) while simultaneously transforming itself from a medium-sized listed company into an internationally-focused business with a far more Anglo-Saxon governance model and ambitious future goals. 22

23 Index 1. About Enagás 2. How to face the crisis 3. New environment, new strategy 4. Corporate governance 5. Results 6. Conclusions 23

24 6. Conclusions Growing in times of crisis: 1 1 Anticipate Stop of interbank market on September 2007 Public capital injections in banks (USA, France, UK, Germany, Netherlands, Switzerland ) React Act Efficiency plans Change in financing policy We faced an overhang risk in the Stock Market Internationalization First entrance in capital markets Investment policies in line with the new environment Acquisitions of new assets New international investors Explain Transparency with shareholders, banks, rating agencies and regulators 24

25 Thank you for your attention IESE. Barcelona, 24 January 2014