2006 Company Results. Milan, 23 March Page 1

Transcription

1 2006 Company Results Milan, 23 March 2007 Page 1

2 Index Strategic focus 2006 Industrial Performance 2006 Financial Performance Final remarks Page 2

3 2006 A CHALLENGING YEAR Unfavourable weather conditions Higher competition Harsh regulation Remarkable increase in operations Most satisfactory industrial results Substantial debt reduction Targets set for 2006 more than beaten Dividend up by 16.7% Stock performance: +58% Page 3

4 BP /Focus on Strategy Industrial and market development Waste & Power: Ecodeco - Main financial highlights/1 In April 2005, Aem acquired a 30% stake in Ecodeco group with the option right to purchase the remaining 70% of Ecodeco s share capital from 2006 to Since April 1 st, 2006, Aem consolidates Ecodeco in full Revenues - waste treatment - projects on order - eletricity sales EBITDA Net Income NFP Page 4

5 Waste & Power: Ecodeco Business areas /2 Ecodeco is recognized as one of the leading companies in Europe active in the higher value/tecnology based end of waste treatment and disposal as well as in WTE business. It is active in Italy and abroad (UK and Spain). The business areas of the group are waste treatment and disposal, ITS construction and sale, and electricity generation. Main operations data UK projects economics* Other Green Certificates 5 85 Dumfries & Galloway 15 Dumfries & Galloway Landfills 280 CIP Jankins Lane Jankins Lane WTE 472 Frog Island Frog Island Waste treatment (k ton) Electricity generation (GWh) Page 5 Revenues (mln ) Gross result (mln ) * Total projects

6 AMSA Ecodeco aggregation chance - Benchmarking Italy 2005 / main operations data Waste collected (M ton) 2 1,82 1, AEM-Ecodeco AMSA ,86 0,73 0,59 0, Waste collected Waste treatment Electricity Heating generation generation 0 AMA Roma Hera * Enia ASM AcegasAPS AEM-AMSA Waste treatment (M ton) 4 3, ,80 1,78 1,21 1 0,80 0,35 Unit k ton k ton GWhe GWht 0 Hera AMA Roma AEM-AMSA* ASM Enia AcegasAPS Page 6 * 2006 figures

7 BP /Focus on Strategy Industrial and market development Energy Trading France ~ 920 GWh 2007 Cross Border Capacity Switzerland ~ 185 GWh Austria ~ 55 GWh Slovenia ~ 38 GWh Greece Export: ~ 250GWh Import: ~ 35 GWh Target Markets Total: ~ 1,2 TWh Nominal Import Capacity France Trading on OTC market and on Powernext (Power and CO2). Balance responsible. Import/Export Cross Border Trading Volume from/to Italy and Germany Germany Trading on OTC market and on EEX (Power and CO2). Balance responsible. Import/Export from/to 1000 Switzerland, France, Austria. 800 Austria Trading on EEX (Power). Attached to balance responsible. Import/Export from/to Italy, Germany. GWh Switzerland import/export 200 Slovenia Greece import/export import/export (OTC-Desmie) Albania import/export Page 7

8 BP /Focus on Strategy Industrial and market development Portfolio Development and Risk Management Commercial focus on retail market especially on small business Electricity Portfolio Sales 2007 (without Edison) Retail = 6.3 TWh, of which direct sales 3.3 TWh (Retail 2006 = 1.5 TWh) IPEX = 5.4 TWh, of which hedged with Cfd s 1.1 TWh Wholesale = 1.4 TWh Focus on Energy Risk Management 2004 approval of Energy Risk Policy for AEM Group Maximize the integrated gross margin across generation, trading and retail, within acceptable risk limits Strong control of all Risk Factors Hedging Results = ~ 25 mln euros Page 8

9 BP /Focus on Strategy Industrial and market development Heating and Cogeneration / Heat Pumps Two combined cogeneration/heat pump plants are at the moment under construction in east Milan area: Canavese and Santa Giulia. Both plants have a total power of 90 MWt and district heating service will be provided starting from the incoming thermal season ( ), with an impact of 15 GWth heat distributed in Canavese plant will serve a potential market of a maximum buildings with an expected 150 GWht heat distributed ( families) and 45 GWh electricity. Santa Giulia plant will serve both residential and commercial areas (offices) with an expected 150 GWht heat distributed and 45 GWh electricity. The construction of another similar plant in Milan will start as soon as the authorization process is concluded. The extensive use of heating systems powered by electricity, especially heat pump systems with heat storage tanks, ensures an important contribution to equilibrating the national electricity demand increasing the load at night time. Heat pumps are powered by electrical energy; the connection to the electricity network combined with heat storage tanks ensure that the plant s functioning can be modulated. The heat pumps used make use of specific know how developed in Sweden for urban district heating applied to powerful machines with more than 10 MWth power. These heat pumps guarantee excellent performances (COP ratio of about 3) producing water heated at C. The COP ( Coefficient of Performance) (2) is the parameter that defines the performance of a heat pump. It s defined as the ratio between thermal power produced and electric power supplied toh.p. The plants, which will be built, ensure energetic and environmental advantages: High energy saving; 35% of fuel consumption reduction Atmospheric pollution reduction Water table level control The excellent environmental performances of the project are due to: more than 50% of total heat distributed is produced by heat pumps with zero local emission: 2/3 of the heat is extracted from the ground water table, which is a renewable source, plentifully available on Milan urban area. Potential benefits from European Plan on Renewables Page 9

10 BP /Focus on Strategy Synergies with EDISON Effective joint governance 2006 Achievements of newly appointed top management: Gas: secured new gas supplies (Algeria); LNG plant on schedule; remarkable progress for IGI and GALSI pipelines; development of new alliances Electricity: rationalization of portfolio; new commercial strategy New business plan well-received by the financial community 2006 Results: Ebitda up by 19%; Net Profit up by 30% Further upside from industrial synergies to be exploited Edison shares: On the books: Current value (21/3/07): Consensus TP (10 analysts): 2.33 Edison warrants: On the books: Current value (21/3/07): Page 10

11 BP /Focus on Strategy Disposals of non core assets AEM Trasmissione sold through a tender process to maximise value (November 2006) Metroweb sold through a tender process to maximise value (October 2006) Serenissima Gas and Serenissima Energia swapped with ACSM COMO cash and papersettlement (October 2006) Financial effects: Net financial position: m Capital gains: 43.5 m Page 11

12 BP /Focus on Strategy Strategic alliances ACSM COMO: 20% shareholding, 2 administrators on BoA DELMI: strengthened relations with fellow shareholders (ENIA, SEL, Trentino Servizi), potential further agreements ATEL: target to increase shareholding (holding worth 337 m versus book value of 99 m) Transaction with ASM negotiations in progress Page 12

13 Strategic focus 2006 Industrial Performance 2006 Financial Performance Final remarks Page 13

14 Consolidated area Consolidation method Months Revenues/ EBITDA Net income Consolidation method Months Revenues/ EBITDA Net income OLD AEM PERIMETER Full % 100.0% Full % 100.0% PLURIGAS Proportional % 40.0% EDIPOWER Proportional % 20.0% Proportional % 40.0% Proportional % 20.0% DELMI TdE EDISON ECODECO Full % 51.0% Proportional % 25.5% Proportional % 17.7% Equity % Full % 51.0% Proportional % 25.5% Proportional % 17.7% Full 9 100% 30.0% Page 14

15 Main financial highlights* Variation Revenues 6,852 EBITDA 1,400 EBIT 723 3, , Net income Net debt (4,915) (5,716) 801 Debt/Equity * Incomes related to assets held for sale, in compliance with IFRS 5, are shown apart. Therefore, EBITDA does not include the contribution of Serenissima Gas, Serenissima Energia, Metroweb, Aem Trasmissione, Edison Rete, both in 2005 and Page 15

16 AEM Old Perimeter Financial improvement Variation EBITDA NFP -1,215-1, Net Debt/EBITDA (x) Page 16

17 Results related to companies held for sales in compliance with IFRS 5, excluded from EBITDA EBITDA Sold on Serenissima Gas 2.5 Serenissima Energia October October 2006 Metroweb October 2006 Aem Trasmissione November 2006 Edison Rete * 24 November 2006 Total * Related to 4Q 2005 only Page 17

18 TdE/Edison consolidation effect Revenues EBITDA +129% 6, % , , ,055 1, % % 1, M 2, M * * 2006 AEM, Edipower, Plurigas TdE/Edison Ecodeco * Edison consolidated in Q4 only Page 18

19 AEM Group Ebitda (TdE/Edison and Ecodeco not included) ,9% Q Extraordinary events ,3% Vs Reported One-off 2006 Reported Reduced hydro production due to lower rain vs historical average Reduced hydro production due to forced water release Lower gas sales due to winter temperature higher than historical average 2006 Adjusted Page 19

20 Electricity area scenario key figures Change D 05 % 55.1 Brent $/Bbl % 1.2 /$ $ % 44.3 Brent % PUN 58.6 Base /MWh % 86.7 Peak /MWh % 43.1 Off Peak /MWh % 43.2 CCGT cost /MWh % 2.2 Emission Right/Green Certificate /MWh % 45.4 TOTAL CCGT /MWh % 15.4 Spark Spread /MWh % 13.2 Clean Spark Spread /MWh % Source: GME, IC, UIC, Power Next, GSE, internal Page 20

21 Electricity area scenario market prices IPEX /Mwh apr-04 giu-04 ago-04 ott-04 dic-04 feb-05 apr-05 giu-05 ago-05 ott-05 dic-05 feb-06 apr-06 giu-06 ago-06 ott-06 dic-06 Peakload Baseload difference Page 21

22 Electricity area scenario - Ipex/Day-ahead Market: traded volumes 60,00% 53,61% 50,00% 40,00% 41,73% 30,00% 25,62% 32,63% Market AEM 20,00% 14,26% 16,30% 10,00% 6,51% 9,34% 0,00% Time slots 1: peak to 4: off-peak Page 22

23 Electricity area scenario - Power Production mix and installed capacity (TdE/Edison and Ecodeco not included) Output Mix Installed capacity (available) (GWh) +1,920 (MW) , , ,430 must run 9, ,326 Cogeneration Coal Gas CCGT 2, , ,376 1, Thermal (traditional) ,620 1,807 Hydro Page 23

24 Electricity area scenario - Sources and uses (TdE/Edison and Ecodeco not included) Sources (GWh) Uses (GWh) Foreign balance 2,063 1, ,547 must run +14% 737 balance 10,424 10, , Foreign 2,190 CfD s included ,033 11, must run ,725 2,457 CfD s included 4,456 Foreign balance Foreign balance 3,452 4,903 5,938 4, AEM Edipower Purchases Cogeneration Eligibles & Wholesales IPEX Export Page CIP 6

25 Electricity Area EBITDA (TdE/Edison not included) % +32% (adjusted) 2006 (adjusted) (18.6) Hydrorelectric rent 0 One-off items 1.4 Previous year 0.5 settlements, net 0 Edipower/Enel (9) settlements Page 25

26 Electricity: EBITDA step analysis (TdE/Edison not included) (9) adjusted Margin on sales Electricity Green quantity certificates Emission Variation of fair value Trading related increase rights to derivates with SB Page 26 Other items Edipower* proportional share 2006 adjusted *Enel settlements not included

27 Gas & Heat Area - Natural Gas sources and uses (TdE/Edison not included) Sources (Mmc) Uses* (Mmc) 2,149 2, % 2, , , ,686 1,057 1,515 1, , * Losses included ENI Plurigas Thermal Final customers Heating management Page 27 District heating/ Cogeneration

28 Gas & Heat Area EBITDA (TdE/Edison not included) (2) (14) (39) % Financial Statement Serenissima Energia 2005 reported 2006 reported 2005 adjusted Gas/Heating margin AEM 2006 adjusted (6.3) Gas price Adjustment 0.7 (1.8) Previous year 1.0 settlements, net One-off items (2.2) ACS National Area Sale 0 (6.6) One-off ACS (10.0) Other items 0 One-off Plurigas (2.0) Page 28

29 Gas & Heat Area: EBITDA step analysis (TdE/Edison not included) (14) 46 (2.5) (8.4) (2.6) (0.5) adjusted Gas quantity decrease Margin on Sales to gas customers District heating/ Heat margin Other 2006 adjusted Page 29

30 Regulated businesses (TdE/Edison not included) Electricity Distributed Gas Distributed 37% 7,609 7, % 2,783 3,223 42% Cinisello grid 1, % 1, % Cinisello grid 63% 4,740 4,386 58% GWh Mmc Captives Eligibles Climatic impact: about Mmc decrease versus 2005 Page 30

31 Networks and Regulated Areas: EBITDA step analysis (TdE/Edison not included) 2005 reported in reported in 2006 EBITDA 208 AEM Trasmissione contribution Metroweb contribution Serenissima Gas contribution (11) (29) (4) EBITDA 164 Gas quantity decrease due to weather conditions and loss of Cinisello grid Tariff effect Gas (16) Distribution activity margin increase related to higher volumes Serviceand new connection revenue increase Electricity +6 (10) 2006 EBITDA 154 Page 31

32 Strategic focus 2006 Industrial Performance 2006 Financial Performance Final remarks Page 32

33 From Ebitda to Ebit Gross Operating Income 1, Depreciation and Amortization Write downs Provisions Net Operating Income of which of which of which of which of which of which Delmi Ecodeco AEM Delmi Ecodeco AEM Group Group Group Total Group Group Group Total Change Net Operating Income Non Cons Page 33

34 From Ebit to EBT Net Operating Income Financial balance Affiliates Disposals Not operating income EBT Page 34

35 Financial balance of which Delmi of which Ecodeco of which AEM of which Delmi of which Ecodeco of which AEM Group Group Group Total Group Group Group Total Change Derivatives (21) (8) 14 6 (2) Financial Gains and Reval (2) (42) Dividends Net financial costs (107) (2) (92) (201) (19) (67) (86) (115) (121) (2) (63) (186) (29) Non Cons. 0 (29) (157) =F ( ) Swap rates curve -25 mln = F ( ) Average net debt, Short term rates Page 35

36 From EBT to Net Income EBT Taxes IFRS Minorities Net Income of the Group Page 36

37 Capital Structure Net Debt -4,915-5, Equity 4,211 3, Leverage 1.17x 1.55x Net Capital Invested 9,126 9, AEM Old Perimeter Delmi Group* Ecodeco Group Net Debt -4,915-1,215-3, Net Debt/EBITDA 3.5x 2.2x * Included debt for joint acquisition of Edison control, Net Debt of TdE, Delmi and Edison Group Page 37

38 Consolidated Financial Debt evolution , mln , NFP 31/12/2005 AEM Group Delmi Group Consolidation Ecodeco Group NFP 31/12/2006 Page 38

39 Net debt evolution AEM old perimeter ,926 2,006 1,984 1,982 1, ,711 1,569 1,619 1,665 1,555 1, , /12/03 31/03/04 30/06/04 30/09/04 31/12/04 31/03/05 30/06/05 30/09/05 31/12/05 31/03/06 30/06/06 30/09/06 31/12/06 Page 39

40 Consolidated Cash Flow (31/12/2006) , * -4, NFP 31/12/05 Net Profit + DD&A Changes of Assets and Liabilities Net Investments Changes in Equity NFP 31/12/06 Page 40

41 Cash Flow AEM old perimeter , mln , NFP 31/12/05 Operating cash flow Net Investments Changes in Equity NFP 31/12/06 Page 41

42 Debt Breakdown by type and maturities Delmi Ecodeco AEM Group Group Group Total Debt Short term (1,504) (36) (624) (2,164) Debt M/L term (2,449) (37) (632) (3,118) Total Gross Debt (3,953) (73) (1,256) (5,282) Financial Assets (3,709) 9 (1,215) (4,915) 35% 6% 9% 4% 5% 41% After 2011 Maturity Amount After ,282 Page 42

43 Strategic focus 2006 Industrial Performance 2006 Financial Performance Final remarks Page 43

44 Dividends ( ) Dividend of cent 7.0 per share (+16,7%) ,6 75,6 CAGR 10,8% 89,1 94,6 107,1 124, Dividend per share ( ) Pay-out 71.9% 67.1% 30.0% 55.0% 44.3% 41.3% Yield (on average price) 1.8% 2.7% 3.8% 3.4% 3.5% 3.6% Page 44

45 Annex Page 45

46 Depreciations, Amortizations and Write-downs Depreciations and Amortizations of which of which of which of which of which of which Delmi Ecodeco AEM Delmi Ecodeco AEM Group Group Group Total Group Group Group Total Change Amortization (60) (1) (6) (67) (18) (8) (26) (41) Depreciation (315) (21) (148) (484) (68) (131) (199) (285) (375) (22) (154) (551) (86) Non Cons. (139) (225) (326) Write-downs Asset Write-downs Credit Write-downs of which of which of which of which of which of which Delmi Ecodeco AEM Delmi Ecodeco AEM Group Group Group Total Group Group Group Total Change (46) 0 (5) (51) (42) (5) (47) (4) (12) 0 (9) (21) (4) (5) (9) (12) (58) 0 (14) (72) (46) Non Cons. (10) (56) (16) Page 46

47 Provisions of which of which of which of which of which of which Delmi Ecodeco AEM Delmi Ecodeco AEM Group Group Group Total Group Group Group Total Change (21) 0 (33) (54) (9) Non Cons. (65) (74) 20 AEM INPS - ICI 31/12/ /12/2005 (18.0) (60.1) Edipower - Plurigas (5.2) (3.4) Delib (9.0) 0 Other (0.8) (1.3) (33.0) (64.8) Page 47

48 IFRS 5 Net Profit from disposals or available for sale AEM DELMI Group (50% ) (50%) Metroweb S.p.A. Serenissima Gas S.p.A. Serenissima Energia S.r.l. AEM Trasmissione S.p.A. Mestni Edison Rete S.p.A. Serene S.p.A. Total IFRS (6) 11 (3) Page 48

49 IFRS 5 Net Profit from disposals or available for sale Financial Statement as of Revenues : 97 EBITDA : 47 EBT : 21 Net Profit: 11 Fully consolidated line by line Serenissima Gas S.p.A., Serenissima Energia S.r.l., AEM Trasmissione S.p.A., Metroweb S.p.A., Edison Rete S.p.A.(3m) 2005 Fully consolidated 2006 Discontinued IFRS 5 with 2005 restatement for comparison Restated Financial Statement as of Net Profit: 11 Discontinued IFRS 5 Financial Statement as of date of disposal Revenues : 84 EBITDA : 47 EBT : 24 Net Profit: 13 Net* Capital Gain: 42 Net Profit: 55 Discontinued IFRS 5 Page 49

50 Restated 2005 for IFRS 4 and IFRS Restated IFRIC 4/IFRS Revenues 3, ,155 Operating Costs 2, ,197 Labour Costs EBITDA DD&A EBIT Financial balance Others Profit before tax Taxes Net Profit Profit ex IFRS Net Profit for the year Minority Interests Group Net Profit Page 50