Analyst Call. Annual Results Outlook th March 2012

Transcription

1 Analyst Call Annual Results Outlook th March 2012

2 Disclaimer This document ( Document ) has been prepared by Eurogrid GmbH ( Company ) and its wholly-owned subsidiary 50Hertz Transmission GmbH ( 50Hertz ) for the analyst call Annual Results Outlook 2012 ( Analyst Call ). No representation or warranty, no liability Although all reasonable care has been taken to ensure that the content of the Document and the information and statements provided during the Analyst Call are accurate no representation or warranty, express or implied, is or will be made, and no liability is or will be accepted, by the Company, 50Hertz or by any of their respective officers, employees, representatives or agents ( Representatives ) in relation to the fairness, accuracy, completeness or reasonableness of this Document and/or the information and statements contained herein (including, inter alia, all estimates, valuations, forecasts, assumptions or statements of opinion or expectation) or any other information and statements made available in this context, in writing, in the Analyst Call or otherwise; in fact the information and the statements may be incomplete, condensed and may not contain all information which might be material to a person receiving the Document or information respectively statement for the purpose contemplated above. In particular, no reliance on forward looking statements, statistical and third-party data In particular, to the extent provided statements in the Document and/or Analyst Call are forward looking such as inter alia expectations, projections or prospects they are based on Representatives' current views and on numerous assumptions which involve known and unknown risks and uncertainties such as regulatory changes that could cause actual results, performances or events to differ materially from those expressed or implied in such statements. This Document (together with any other information that may be furnished by the Company and/or 50Hertz in particular in the Analyst Call) also includes or may include statistical data and cites or may cite third-party data such as projections regarding the future growth of the market. This data is taken or derived from information published by industry sources. Neither the Company nor 50Hertz nor their Representatives have independently verified this data. No reliance should therefore be placed on the statistical data and third-party data cited in this Document. No obligation to update or to carry out transactions This Document and the Analyst Call speak only as of their dates. Neither the Company, nor 50Hertz, nor any Representative undertakes any obligation to update the Document or any other written, electronic or oral information supplied in this context (including, in particular, all expectations and other forward looking statements) or to correct any inaccuracies which may become apparent whether as a result of new information, future events or otherwise. The issue of this Document and the information respectively statements provided during the Analyst Call shall not be taken as any form of commitment on the part of the Company or 50Hertz to proceed with any transaction. Page 2 of 27

3 Content Highlights 2011 Financials Outlook 2012 and summary Page 3 of 27

4 Portrait of 50Hertz Transmission Value (Share in Germany) Area* Length of Lines Maximum Load Electricity consumption Installed capacity: - thereof renewables* - thereof wind energy* 109,360 km² (31%) 9,840 km (28%) ca. 17 GW (20%) 98 TWh (20%) ca. 37,400 MW (~35%) 16,750 MW (~29%) 11,570 MW (~41%) Employees 694 * Preliminary data Turnover - as of grid 6.9 bn 0.6 bn Page 4 of 27

5 Business Highlights 2011 System Security - June 27th: TCC inauguration in Neuenhagen/ Berlin. 150 guests from politics and economy. TCC is technically state of the art - Reliability of network operation in Hamburg in spite of extraordinary situation Development Network Expansion - May 2nd: Chancellor Angela Merkel switched on the connection of Offshore- Windfarm Baltic I - Regional Planning Procedure approved for SW-Coupling Line (3rd section) - Regional Planning Procedure approved for 380-kV-North Ring Berlin EEG-Integration - Increasing integration of wind energy (>10 GW!) - 45 days of 13 (2) measures (shutdown of renewables) - Redispatch costs of about 100m (thereof 41m in 12/2011) - Regulated RoE for 2nd regulatory period set at 9.05% Page 5 of 27

6 Draw Off From the 50Hertz Grid TWh 6,0 5,0 50Hertz s network: 59.0 TWh 4,0 Mild weather Decentralised generation Renewables 3,0 2,0 1,0 0,0 jan feb mar apr may june july aug sep oct nov dec Total 58.9 TWh Total 63.0 TWh Total 59.0 TWh Page 6 of 27

7 RES Development as the Main Driver for TSO Business other RES wind offshore (Prognose) wind onshore (Prognose) wind onshore RES - dena-netzstudie II Actual numbers Prognosis Installed capacity in MW Installed capacity (MW): State: 31/12/2011 Wind Onshore Offshore 50 Biomass Photovoltaik Others Year Data for 2000 until 2010 (acutal): from Data for 2015 until 2023 (Prognosis): EEG-Prognosis 50Hertz Transmission (temporarily), State of 2011 Data for : EEG data base elected on Page 7 of 27

8 A Lack of Transport Capacities - Especially From North to South ca GW 3.6 GW ca. +25 GW Especially the North-South connections were working on maximum capacity in periods of strong wind! ca GW new installed capacities vs. 12 GW new transport capacities! 3.6 GW 4.8 GW Current projects are not sufficient to prevent bottlenecks in the future. Centre of demand RES production Source: 50Hertz Transmission & TenneT GmbH Prognosen für 2020 Capacity of Lines see Bundestag Drucksache 16/10491, Begründung zum EnLAG Fast realization of installing RES systems and long-term permitting processes of network expansion lead to asynchronous development. Page 8 of 27

9 System Security: Days of Interventions System interventions (Days with 13.1 EnWG) Costs Costs in m Amount in GWh Amount Shutdown of Renewables (Days with 13.2 EnWG) Amount Amount in GWh Page 9 of 27

10 A Growing Company FTE* % % Hertz prepares for the future. * FTE = full time equivalent (Vollzeitarbeitskräfte) Page 10 of 27

11 Content Highlights 2011 Financials Outlook 2012 and summary Page 11 of 27

12 Investments Mainly Driven by Offshore Total m * Onshore : 114,5 m Offshore : 130,9 m Maintenance Offshore Onshore Ø360 Very high reliability: only 1,21 incidents per 100km 51 Non electrical investments, 8% Replacements, 7% Internal consumption, 17% Renewables & generaton localisation, 68% Ø * HGB Ø Ø Constantly increasing capital expenditure to integrate Renewable Energy Sources (RES) and to develop the EU market. Page 12 of 27

13 Total Revenues m * m * EEG EOG EEG EOG 570 Others Others *Revenues gross benefits EEG Erneuerbare-Energien-Gesetz - Revenues of Renewable Energy (Nonprofit) EOG Erlösobergrenze Revenue Cap (Revenues from accepted grid fees incl. measuring and accounting) Others mainly revenues from supply of services for third parties EEG Energy balancing and TSO area management (Nonprofit) Increasing revenue is mainly driven by increasing EEG-business. Page 13 of 27

14 Profit and Loss* Total revenues Neutral business Net revenues Other operating income Consolidated turnover Energy costs Maintenance Personnel costs Other operating costs EBITDA Depreciation Financial result Income tax Net result in m ,885 6, ** 5,496 4, % 28.0% 3.7% -10.9% 0.5% 8.2% 18.6% 16.0% -3.6% -20.2% -7.2% -29.6% -47.5% -12.9% * IFRS Eurogrid GmbH, 50Hertz Transmission GmbH und 50Hertz Offshore GmbH consolidated ** Unaudited proforma figures on 12 month basis due to two formal rump years Revenues (incl. and excl. EEG) increased again. Influencable operating expenses in line with growth of 50Hertz. Page 14 of 27

15 Break Down of Net Profit* Base year Corridor model EEG & other non profit Other non influencable costs Offshore TenneT Investment Budget offshore Investment Budget onshore Eurogrid GmbH IFRS adjustments Net result in m * IFRS Eurogrid GmbH, 50Hertz Transmission GmbH und 50Hertz Offshore GmbH consolidated Page 15 of 27

16 Balance Sheet* Assets Fixed assets in m , , % Current assets % Liquid assets % Total Assets % Liabilities Equity % Provisions % Long-term debt % Other liabilities 1, % (Net) regulatory liabilities % Total Liabilities % Equity ratio (= Equity/ Total Assets) Gearing (= Net debt**/ Equity) * IFRS Eurogrid GmbH, 50Hertz Transmission GmbH and 50Hertz Offshore GmbH ** s. page % 0.16 A solid balance sheet structure % Page 16 of 27

17 Monitoring of Key Credit Ratios to Maintain a Solid Baa1 Rating Key Credit Ratios Goals FFO interest cover > 3.0 Net debt / Regulatory asset base 15% 29% FFO / Net debt 56% 52% > 12% RCF / Capex RCF / Net debt 15% 52% > 8% FFO Regulatory asset base 1, Net debt RCF Capex* Net interest w/o non cash * incl. capitalized interest during construction FFO interest cover = (FFO + Net interest w/o non cash) Net interest w/o non cash RCF = FFO dividends Net debt = debt cash Decrease of ratios in line with planned investment programme. Communicated to rating agencies. Page 17 of 27

18 HGB FY 2011 Heavily Impacted by Weather and by Offshore Investments Weather and Offshore Investments 3,6 75,7 54,3 49,8 36,4 44,5 IFRS 2011 no consideration in HGB Special effects HGB Valuation differences HGB 2011 No consideration of regulatory receivables in HGB impact the dividend distribution ability negatively. Regulatory return on equity (7.82%) Page 18 of 27

19 Cash Flow Statement Net result Change of non-cash items Operating Cash Flow (FFO) Investment Cash Flow thereof Capex** Free Cash Flow Cash flow from financing activities thereof dividend payments Change in cash & cash equivalents * * unaudited pro-forma figures ** difference to slide 12 arises from different treatment of deconstruction obligations in HGB and IFRS Page 19 of 27

20 Liquidity Overview Substantial Improvement of Liquidity Eurogrid GmbH, 50Hertz Transmission, 50Hertz Offshore (Total incl. EEG) in m /- 284 Ø /-223 Ø Actual Avg Avg only EEG Periodic variation in liquidity mainly driven by EEG-business. Page 20 of 27

21 Financing Issuer Guarantors Eurogrid GmbH 50Hertz Transmission GmbH 50Hertz Offshore GmbH Funding 2.5 bn Euro Medium Term Note Programme (EMTN) EUR Bond 500 m Coupon Maturity Maturity Date Joint Bookrunners Terms and Conditions 3.875% 10Y Oct 2020 BNPP, Dexia, ING and RBS Revolving Credit Facility 350 m (undrawn) Participation of 11 (core) banks: Commerzbank, BNPP, KBC, HSBC, ING, Helaba, Morgan Stanley, Rabobank, RBS, IL Brandenburg, IB Berlin Duration until 06/2016 Cash Management Line 120 m (undrawn) Overdraft facility with cash management bank BNPP Page 21 of 27

22 Content Highlights in 2011 Financials Outlook 2012 and summary Page 22 of 27

23 Current Projects of 50Hertz (Selection) North Line (Krümmel - Görries) Mecklenburg-Western Pomerania: built Schleswig-Holstein: Planning approval in final stage Uckermark Line (Neuenhagen - Bertikow) Planning approval in progress 380-kV North Ring Berlin Regional Planning Procedure approved (Q3/2011) Southwest Coupling Line (3rd section) Lauchstädt-Vieselbach: connected 2008 Vieselbach-Altenfeld: Planning approval approved Altenfeld-Redwitz: Regional Planning Procedure approved (Q1/2011), Planning approval in progress 3rd Interconnector to Poland Project conference end of 2011 Offshore-Projects in Baltic-Sea Baltic I connected Baltic II in progress Further projects in planning Page 23 of 27

24 Grid Connection Applications of Offshore Wind Farms at 50Hertz Cable routes (schematic diagram) Grid connection in planning Grid connection in process of realisation Grid connection in operation Grid connector applied Grid connector under construction Grid connector in operation No Beta Baltic Beltsee Fairwind Name EnBW Baltic 1 * EnBW Baltic 2 ** Arcadis-Ost 1 ArkonaSee-West ArkonaSee-Süd Baltic Eagle Strom-Nord ArkonaSee-Ost Wikinger-Nord Wikinger ** Adlergrund Gap [MW] Adlergrund Arkona-Becken-Südost ** 1, Ostseeperle 210 * Operating since Spring 2011 ** Approved projects (BSH) *** Project name was changed from Wikinger AO2 to Wikinger-Süd New applications Strom-Süd Ostseeschatz Windanker Wikinger-Süd *** Page 24 of 27

25 Outlook 2012 T=0 for investment budgets and replacements lump sum compromise will lead to significant improvement of HGB results 1st year after base year higher focus on efficiency Increased challenges in the system (redispatch measures) - Accounting improvements lead to reduced P&L impact - Discussion with regulator to define such costs as non-influencable Increased liquidity demand from EEG - Direct marketing of RE producers (market premium) - Including the legally defined liquidity buffer of 10% into EEG allocation necessary Page 25 of 27

26 Challenges of the Turnaround in the Energy Policy Acceptance Network expansion Permitting Network expansion System security Financing Regulatory Framework Page 26 of 27

27 Many thanks for your attention!