9M08 Consolidated Results

Transcription

1 9M08 Consolidated Results Flavio Cattaneo - Chief Executive Officer Fabio Todeschini - Chief Financial Officer OCTOBER 28 TH, 2008 Investor Relations 1

2 Agenda HIGHLIGHTS 9M08 RESULTS CLOSING REMARKS ANNEXES Investor Relations 2

3 Highlights 9M08 at a Glance Sound operational performance: revenue growth despite tariff cut in Italy Strong 3Q results mainly driven by: Italy: electricity demand trend reversed in summer months (+0.8% YTD) Brazil: full contribution of ETEO and tariff adjustment for inflation mn 9M07 9M08 mn % Operating Revenues 986 1, % EBITDA % EBITDA Margin (%) 74.1% 73.0% Group Net Income % Capex % Investor Relations 3

4 Highlights TERNA s Investment Case in the Current Financial Markets Transmission sector a safe haven Regulatory framework guarantees stable cash flows Inflationary scenario to support tariffs and RAB growth Low sensitivity to electricity demand growth No impact on earnings In the M/LT, RAB growth confirmed as the major driver for revenue growth In the ST, rising cost of financing will only have a marginal impact on financial charges In 2009, Terna SpA cost of debt expected to be around 5% Funding not an issue Undrawn over 5 years committed credit lines for 1.9bn (650mn syndicated loan plus 2 revolving credit facilities for a total of 1,250mn) Dividend policy confirmed Investor Relations 4

5 Highlights Energy Items 3Q demand evolution reversed the flat interim trend September posted a +2.5%, mainly due to temperature and calendar differences Outlook: confirmed the guidance of a very weak y-o-y growth 253, % 255,787 Total Net Production: 231,859 (+3.8%) GWh Pumping: 14,927 (+1.3%) Net Import: 29,474 (-18.0%) 9M07 9M08 Note: 2008 provisional figures Investor Relations 5

6 Agenda HIGHLIGHTS 9M08 RESULTS CLOSING REMARKS ANNEXES Investor Relations 6

7 Consolidated Revenues Revenues by Nature Revenues Breakdown , , ,040 Mn Mn Grid Fee 9M07 Other Energy Items 9M08 Regulated Activities in Brazil Other Activities 9M07 Grid Fee Regulated Other 9M08 Pis/Cofins (1) Activities in Net of Brazil Pis/Cofins 9M08 (1) Pass-through items Investor Relations 7

8 Consolidated Costs Costs by Nature (1) Costs Breakdown Mn Mn M07 (1) Net of capitalized costs (2) Pass-through items 9M08 Salaries Services Other 9M07 Salaries Services Other 9M08 Net of Pis/Cofins (2) 9M08 Pis/Cofins Investor Relations 8

9 From EBITDA to Net Income Consolidated Change mn 9M07 9M08 mn % EBITDA % EBITDA Margin (%) 74.1% 73.0% D&A % EBIT % Financial (Income) Charges % Taxes % Tax rate (%) 38.9% 34.4% Total Net Income % Minority Interest % Group Net Income % Investor Relations 9

10 Financial Charges Outlook for 2008 Increase in Net Financial Charges consistently with higher Debt/interests 9M07 9M08 Change ITALY Net Financial Charges One off IAS Impact BRAZIL Net Financial Charges Exchange Effects Other GROUP NET FINANCIAL CHARGES In mn Investor Relations 10

11 Capex Breakdown SAPEI: 1st cable entirely deployed Further acceleration expected in 4Q mn 9M07 9M08 Change (mn) Change (%) (1) Incentivized remuneration % (2) Ordinary remuneration % - Maintenance % - Other % Non regulated activities % TOTAL ITALY % TOTAL BRAZIL (3) % TOTAL CAPEX % (1) Category I3: WACC at 9.9% Category I2: WACC at 8.9% (2) Category I1: WACC at 6.9% (3) Restated to include higher capitalization Investor Relations 11

12 Consolidated Net Debt Net Debt Evolution ,650-3,100 Mn FY07 Operating Cash Flow WC Capex and M&A (1) Dividends and Other Changes 9M08 (1) Includes Capex, Other Fixed Asset Change and ETEO acquisition Investor Relations 12

13 Agenda HIGHLIGHTS 9M08 RESULTS CLOSING REMARKS ANNEXES Investor Relations 13

14 Closing Remarks First priority: value creation for our shareholders Safeguard solidity of the Company Strict financial discipline is paramount Prudent approach to M&A Outlook Grid development is a priority for the Country Profitability granted by the Regulator Visibility of earnings confirmed Investor Relations 14

15 Agenda HIGHLIGHTS 9M08 RESULTS CLOSING REMARKS ANNEXES Investor Relations 15

16 Italian Electricity Market Evolution Energy Demand Monthly Trend Quarterly Trend TWh TWh JAN FEB MAR APR MAY JUNE JULY AUG SEPT Cumulated Trend Q 2Q 3Q TWh (1) Source: TERNA s monthly reports JAN FEB MAR APR MAY JUNE JULY AUG SEPT Investor Relations 16

17 Consolidated Income Statement In mn Euro Consolidated Change mn 9M07 9M08 mn % Operating Revenues 986 1, % Grid Fee % Other Energy Items % Regulated Activities in Brazil % Other Activities % Operating Expenses % Salaries % Services % Other % EBITDA % Italy % Brazil % EBITDA Margin (%) 74% 73% D&A % EBIT % Financial (Income) Charges % Taxes % Tax rate (%) 39% 34% Total Net Income % Minority Interest % Group Net Income % Investor Relations 17

18 Consolidated Costs Costs by Entity (1) Costs Breakdown +9.8% Mn Mn M07 9M08 Parent Company R.T.L. Brazil 9M07 Parent Company R.T.L. Brazil 9M08 (1) Net of capitalized costs Investor Relations 18

19 Headcount Evolution Final Headcount Average Headcount 3,602 3, , , ,495 3,517 3,479 3,507 FY07 9M (+22 Italy; +99 Brazil) 9M07 9M (+28 Italy; +99 Brazil) Italy Brazil Investor Relations 19

20 Consolidated Income Statement Quarterly Analysis mn 1Q07 1Q08 Change 2Q07 2Q08 Change 3Q07 3Q08 Change Operating Revenues Grid Fee Other Energy Items Regulated Activities in Brazil Other Activities Operating Expenses EBITDA Italy Brazil D&A EBIT Financial (Income) Charges Taxes Net Income (Group and minority interests) Minority Interest Group Net Income Investor Relations 20

21 Consolidated Balance Sheet * Change mn 31 Dec Sept 2008 % Assets PP&E 5,613 5, % Intangible Asset, net % Financial Inv. and Other % Total Fixed Assets 6,035 6, % Net WC % Funds % Net Invested Capital 4,923 5, % Financed by: Consolidated Net Debt 2,650 3, % Total Shareholder's Equity 2,274 2, % Terna Group 2,162 2, % Minorities % D/E ratio % Investor Relations 21

22 Consolidated Cash Flows mn FY07 9M08 Net Income (1) Depreciation Net Change in Funds Operating Cash Flows Change in WC Cash Flow from Operating Activities Capital Expenditures Other Fixed Asset Changes Free Cash Flow Dividends Change in Capital 2 0 Change in Financial Position (1) Net of assets disposals Investor Relations 22

23 Consolidated Net Financial Position , ,100 1,921 mn 823 Change in Net Financial Position (mn ) (1) EIB Loans Terna Spa Bonds Brazilian Debt Derivatives Consolidated Gross Debt Cash & Cash Equivalents Consolidated Net Debt Net Debt 31/12/07 2,650 Fair Value on Bonds and Derivatives (11) Change in Financial Position 490 Exchange Rates + Int. Cap. (29) Net Debt 30/09/08 3,100 Change in Net Debt (451) (1) EIB (European Investment Bank) Loans Investor Relations 23

24 Financial Structure Gross Debt by Instruments ( mn) 3,326 Debt Breakdown Fixed/Floating Mix 598 Brazilian Debt Floating Fixed 823 EIB Loans Derivatives Italy 43% 57% 1921 Terna SpA Bonds Group 53% 47% -16 9M08 Floating Fixed Maturity Total Group Debt 11.5 yr Currency Brazilian Debt Terna SpA Debt EIB Loans Bond 2023 Bond 2014 Bond Years Euro Brazil Investor Relations 24

25 9M08 Consolidated Results Funding Capacity Italy Brazil 2008 Amount mn Maturity yrs Cost EIB Loan Euribor + 5bps Syndicated Loan (1) Revolving Credit (2) Facility Euribor + 50bps Euribor + 70bps 2008 Amount mn Promissory Notes Maturity yrs Cost CDI + 115bps 2006 Amount mn Maturity yrs Cost Revolving Credit Facility (3) Euribor + 15bps (1) BBVA, Société Générale, BNP Paribas, Bank of Tokyo-Mitsubishi, Dexia Crediop (2) Royal Bank of Scotland, Banco Santander (3) Banca Intesa S.p.A., Banca Nazionale del Lavoro S.p.A., Banco Bilbao Vizcaya Argentaria S.A., Capitalia Gruppo Bancario, Mediobanca Banca di Credito Finanziario S.p.A., Monte dei Paschi di Siena S.p.A., Sanpaolo IMI S.p.A., Unicredit Banca Mobiliare S.p.A. Investor Relations 25

26 TERNA Participações (IAS) mn BRL mn mn 9M07 9M08 % Operating Revenues % Operating Expenses % EBITDA % EBITDA Margin (%) 79% 74% D&A % EBIT % Net Interest Expenses % Taxes % Net Income % Net Invested Capital % Financed by: Net Debt % Shareholders' Equity % 9M07 9M08 % % % % 79% 74% % % % % % 1,646 2,236 36% 824 1,397 69% % Investor Relations 26

27 Exchange Rates 1H07 9M07 FY07 1H08 9M08 Closing Rate Euro/BRL$ Average Rate for the Period IGPM (cumulated LTM) 3.9% 5.7% 7.8% 13.4% 12.3% Impacts on: ( mn) 9M08 Revenues +7.4 EBITDA +5.5 EBIT +4.7 Net Financial Interests +1.9 Net Income +2.0 Investor Relations 27

28 Disclaimer THIS DOCUMENT HAS BEEN PREPARED BY TERNA S.P.A. (THE COMPANY ) FOR THE SOLE PURPOSE DESCRIBED HEREIN. IN NO CASE MAY IT BE INTERPRETED AS AN OFFER OR INVITATION TO SELL OR PURCHASE ANY SECURITY ISSUED BY THE COMPANY OR ITS SUBSIDIARIES. THE CONTENT OF THIS DOCUMENT HAS A MERELY INFORMATIVE AND PROVISIONAL NATURE AND THE STATEMENTS CONTAINED HEREIN HAVE NOT BEEN INDEPENDENTLY VERIFIED. NEITHER THE COMPANY NOR ANY OF ITS REPRESENTATIVES SHALL ACCEPT ANY LIABILITY WHATSOEVER (WHETHER IN NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY FROM THE USE OF THIS DOCUMENT OR ITS CONTENTS OR OTHERWISE ARISING IN CONNECTION WITH THIS DOCUMENT OR ANY MATERIAL DISCUSSED DURING THE PRESENTATION. THIS DOCUMENT MAY NOT BE REPRODUCED OR REDISTRIBUTED, IN WHOLE OR IN PART, TO ANY OTHER PERSON. THE INFORMATION CONTAINED HEREIN AND OTHER MATERIAL DISCUSSED AT THE CONFERENCE CALL MAY INCLUDE FORWARD- LOOKING STATEMENTS THAT ARE NOT HISTORICAL FACTS, INCLUDING STATEMENTS ABOUT THE COMPANY S BELIEFS AND EXPECTATIONS. THESE STATEMENTS ARE BASED ON CURRENT PLANS, ESTIMATES, PROJECTIONS AND PROJECTS, AND CANNOT BE INTERPRETED AS A PROMISE OR GUARANTEE OF WHATSOEVER NATURE. HOWEVER, FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES AND ARE CURRENT ONLY AT THE DATE THEY ARE MADE. WE CAUTION YOU THAT A NUMBER OF FACTORS COULD CAUSE THE COMPANY S ACTUAL RESULTS AND PROVISIONS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENT. SUCH FACTORS INCLUDE, BUT ARE NOT LIMITED TO: TRENDS IN COMPANY S BUSINESS, ITS ABILITY TO IMPLEMENT COST-CUTTING PLANS, CHANGES IN THE REGULATORY ENVIRONMENT, DIFFERENT INTERPRETATION OF THE LAW AND REGULATION, ITS ABILITY TO SUCCESSFULLY DIVERSIFY AND THE EXPECTED LEVEL OF FUTURE CAPITAL EXPENDITURES. THEREFORE, YOU SHOULD NOT PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS. TERNA DOES NOT UNDERTAKE ANY OBLIGATION TO UPDATE FORWARD- LOOKING STATEMENTS TO REFLECT ANY CHANGES IN TERNA S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGES IN EVENTS. EXCUTIVE IN CHARGE OF THE PREPARATION OF ACCOUNTING DOCUMENTS LUCIANO DI BACCO DECLARES, PURSUANT TO PARAGRAPH 2 OF ARTICLE 154-BIS OF THE CONSOLIDATED LAW ON FINANCE, THAT THE ACCOUNTING INFORMATION CONTAINED IN THIS PRESENTATION CORRESPONDS TO THE DOCUMENT RESULTS, BOOKS AND ACCOUNTING RECORDS. Investor Relations 28

29 Global Europe Axia Ethical Index Axia CSR Index Global Sustainability Index Ethical Index Euro Investor Relations 29