EDP Renewables SA · EURONEXT:EDPR
EDP Renewables SA — EDP Renováveis — Investor Presentation (August 2021)
54 slides from EDP Renewables SA's investor presentation, August 2021
Slide 1: Investors' Presentation August 2021
INVESTORS' PRESENTATION August, 2021 www.edpr.com Investors’ Presentation 1
Slide 2: Disclaimer
Disclaimer This document has been prepared by EDP Renováveis, S.A. (the "Company") solely for use Forward-looking statements include statements regarding: objectives, goals, strategies, at the presentation to be made on this date and its purpose is merely of informative nature outlook and growth pro
Slide 3: Agenda
Agenda 1 Our sector 2 EDP Group vision 3 Our strategy 4 1H21 results Investors’ Presentation 3
Slide 4: Our sector
Our sector Investors’ Presentation 4
Slide 5: New energy sector at the center of the economy and transformation towards Net Zero
New energy sector at the center of the economy and transformation towards Net Zero We need a new decarbonized and … in which a new energy electrified world… sector is required ~95% -100% Clean renewables coal phase-out share in power in global power 1.5 ºC generation in 2050 by 2050 Affordable 3x Ze
Slide 6: The World is joining forces in this effort
The World is joining forces in this effort Paris Decarbonization and New private and social Agreement renewables targets set commitment demanding and + COP26 supporting clean energy accelerating New regulation underway efforts 189 €750bn $2.25tr $15tr 90% countries EU NextGen Fund American Jobs priv
Slide 7: The energy of the future will be electric, clean, affordable and reliable
The energy of the future will be electric, clean, affordable and reliable, requiring an unparalleled renewables growth Unprecedented growth Cost competitive North America + Europe + LatAm LCOE decrease in 2030 vs. 2019 Renewables additions p.a., GW 250-300 Solar PV -35% Below wholesale electricity p
Slide 8: A renewables major with extensive track-record
A renewables major with extensive track- record Installed Capacity GW Top 4 14 GW Saving wind & solar built/added 19 mt/y2 12.6 player1 to date of CO2 2x 9.6 Multi-tech pipeline 6.7 GW backlog >50 GW secured 6.7 >250% TSR 2010-2020 2010 2015 2020 1. Excludes companies incorporated / operating in Chi
Slide 9: EDP Group vision
EDP Group vision Investors’ Presentation 9
Slide 10: Leading the energy transition to create superior value
The World is facing a challenge by 2025 by 2030 €24 bn >50 GW Capex for energy transaction Additions of renewable energy Leading the energy transition to create superior value 4 GW/year 100% All green by 2030 Renewable capacity added Renewable energy generation Double 100% Solar and wind capacity EB
Slide 11: EDP platforms are fully aligned with the energy transition
EDP platforms are fully aligned with the energy transition % Weight on Weight on EBITDA 2025 % CAPEX 2021-25 1 Renewables Clean energy growth ~60% ~80% engine High portfolio Wind, Solar, and Hydro resilience and diversification Networks Energy transition ~30% ~15% Ability to capture different enable
Slide 12: EDP commitments
EDP commitments Accelerated and ESG excellence and sustainable growth attractive returns Step-up green growth Leading the energy transition ESG reference Distinctive and resilient portfolio to create superior value Green leadership positioning Solid balance sheet Strong return visibility Future-proo
Slide 13: Our strategy
Our strategy Investors’ Presentation 13
Slide 14: A top renewables player with 12.6 GW installed and presence in 17 countries
A top renewables player with an attractive portfolio with 12.6 GW installed and presence in 17 countries… by MW by # of parks Canada 0.2% 0.3% 130 23% 28% MW 12.6 5% 297 53% UK Poland 56% GW parks 6,499 12% 476 18% MW USA MW 3% Belgium 400 Hungary MW 53 North America Spain & Portugal RoE LatAm APAC
Slide 15: Reinforced by equity issuance concluded in Apr-21
… that has been reinforced by equity issuance concluded in Apr-21 The conditions were set… …to get financial support to our business plan Largest ABB of the year in There is a great appetite in the Europe market for renewables €1.5bn €17.0 Largest ABB ever in Portugal price achieved of capital EDPR
Slide 16: Leaner, more independent and diverse Corporate Governance structure
EDPR has implemented a leaner, more independent and diverse Corporate Governance structure in line with best practices… Key highlights General Shareholder’s Meeting Independent Chairperson Composed by 12 members Board of Directors Only 2 executive directors Independent directors with 50% representat
Slide 17: Highly experienced and motivated management
…supported in the daily management of the business by a highly experienced and motivated management Miguel Stilwell d’Andrade CEO 3 nationalities Duarte Bello COO Europe & Rui 45 avg. age Teixeira Brazil CFO 17 avg. years of experience in the sector Remuneration linked to strategy execution includin
Slide 18: Our strategy to deliver superior growth through 2025
Our strategy to deliver superior growth through 2025 Growth Value Excellence Accelerated Ongoing High quality and selective asset rotation teams and growth program efficient operations +20 GW €8bn -2% additions target CAGR 2021-2025 2021-2025 Core Opex/MW Promoting clean energy while operating in a
Slide 19: We will add 20 GW of renewables until 2025
We will add 20 GW of renewables until 2025, focusing in low-risk markets EU & US with a balanced mix between Wind & Solar ~50/50 Focus on NA/Europe and bigger presence on … and technologically diversified other geographies… Wind Wind offshore 6.7, Europe onshore 34% Rest of 0.9, 5% the World Solar 9
Slide 20: We will accelerate to ~4GW/yr with strong visibility on future growth
We will accelerate to ~4GW/yr and we have strong visibility on future growth… Step-change growth in renewables… … with great visibility in terms of pipeline as of Jul-21 Gross additions, GW1/year GW1 > 50 20 GW 4.6 3.5 44 1.6 6.7 3.2 0.7 2.9 6.7 2020 2021-23 2024-25 Added YTD U/C Secured to start U/
Slide 21: 6.7 GW already secured, with sound returns and risk profile
… with 6.7 GW already secured, with sound returns and risk profile… Accelerating growth across all platforms, with +0.8 GW … maintaining a selective and disciplined secured since the CMD… investment approach Secured Capacity 2021-23 GW Target Actual % 2021-25 additions 30% 34% IRR/WACC >1.4x ~1.5x %
Slide 22: Well protected from recent capex cost inflation
… which are well protected from recent capex cost inflation EDPR investment policy is to contract major equipment upfront at fixed price with investment decision based on latest real-time quotes requested to suppliers Major equipment Fixed price with no commodity risk for EDPR ~85% fully contracted(
Slide 23: Innovation: new business models and new technologies
Inovation will also be a key part in securing this growth, through our new business models and new technologies New business models New technologies Hybridization Storage Improve asset efficiency and utilization Anticipate the need to face with intermittence Repowering Hydrogen Increase long-term va
Slide 24: Maintaining our distinctive Asset rotation model
We will accelerate growth, maintaining our distinctive Asset rotation model… Asset rotation model fueling growth… … aligned with our track record4 Asset rotation model added capacity Extensive 26 transactions since 2012 GW1/year track record 1.5 €14.3bn EV3 track record in past 1.4 transactions 0.9
Slide 25: Strong asset rotation execution with €2.2bn of proceeds secured
… where we continue with strong execution with €2.2bn of proceeds secured at attractive multiples and €101m gain already booked in 1H21 Strong AR execution at attractive multiples, showcasing the value of EDPR projects EV/MW €m 1.75 1.25 1.6 €2.2bn of proceeds, almost 30% of €8bn AR €2.2bn target fo
Slide 26: Managing the full value chain
We will continue to manage the full value chain to deliver competitive and quality projects at the highest excellence standards Development Construction Operations Competitive Projects On time & on budget Excellence in asset management Local development knowledge and Global scale providing compe
Slide 27: Key core competences and unique know-how to maximize efficiency
We have key core competences and a unique know-how set to maximize efficiency Our unique O&M strategy … … are set to maximize efficiency levels Core Opex / Avg. MW 10 year strategy in optimizing O&M activities by increasing (€k) internalization post-warranty (today 50% of the fleet) Has resulted in
Slide 28: 2025 growth supported by top-class team and best talent
2025 growth will be supported by current top-class team reinforced by best talent in the market attracted by a strong value proposition 2025 2020 2025 2015 >3,000 2010 1,735 1,018 822 Headcount Road to 2025 Committed team developed & reinforced Attract Experience Develop Great company culture Tailor
Slide 29: Strategy to deliver superior value through a solid business model
This ambitious strategy is set in place to deliver superior value through a solid business model… 2020 2023 2025 Installed Capacity GW Step-up growth and scale 12 18 25 >2x EBITDA €bn Increased results with geographic diversification and a 1.65 2.0 2.3 +7% CAGR 20-25 stable Asset Rotation program Ne
Slide 30: Operating with the highest ESG standards
… while operating with the highest ESG standards 2020 2025 Circular economy Recovery rate for generated % wastes in the whole value chain 761 85 Biodiversity Facilities with high biodiversity % risk with action plans defined n/a 100 People Improve diversity and inclusion % by increasing female emplo
Slide 31: 1H21 Results
1H21 Results Investors’ Presentation 31
Slide 32: Strong performance in EU&BR, impacted by Q1 ERCOT event
Strong performance in EU&BR, but impacted by Q1 one-off ERCOT event, lower generation in US and lower capital gains YoY 1H21 Key Figures Highlights EBITDA €654m Gains of €118m(1) at EBITDA (YoY -€27m) and €97m at Net profit (YoY -€44m) -18% YoY Strong performance in Europe & Brazil with EBITDA +€40m
Slide 33: EDPR portfolio increased to 12.6 GW
EDPR portfolio increased to 12.6 GW, with +2.1 GW added YoY, and we have 2.9 GW under construction Evolution of Installed Capacity (EBITDA MW + Equity Consolidated) MW Under Added YoY Construction 2,059 13,497 (913) 12,584 11,439 +763 MW +1,180 MW • Spain: 237 MW • US: +1,162 MW +767 MW 275 MW net (
Slide 34: 31% load factor in 1H21
In 1H21 EDPR achieved a 31% load factor with recovery in Europe & Brazil offset by Q1 one-off ERCOT event and low wind resource in US Net Capacity Factor 1H21 Gross Capacity Factor 1H21 1H21 r YoY 1H21 r YoY vs P50 28% +1pp 29% +1pp 97% 34% -2pp 38% -1pp 94% 34% +8pp 35% +7pp 105% 31% -0.5pp 34% - 9
Slide 35: Electricity output increased 5% YoY
Electricity output increased 5% YoY, with capacity additions providing a strong contribution TWh Electricity Production r% YoY (TWh) From overall new installed capacity +14% along with higher wind resource in +5% Iberia, despite RoE performance. 14.7 +0.9 -0.2 15.3 Driven by lower availability due t
Slide 36: Average price at €51/MWh
Average price at €51/MWh, reflecting an increasingly competitive portfolio, with new additions driving lower prices r% EDPR Price Evolution 1H21 YoY(1) (€/MWh) SP -18% (asset mix and above standard production going to pool) €77.2 -6% -7% PT -1% (from new additions and tariff extension) & RoE +7% (mo
Slide 37: Revenues decreased 6% YoY, 0.5% like for like
Revenues decreased 6% YoY, but only 0.5% like for like Revenues Main drivers for Revenues performance (€ million) Volume: +8% YoY (+€72m) -6% MW additions (+7%; +€61m) & Wind resource (+1%; +€11m) 913 -0.5% ex Sell-down 856 Sell-down: -8% YoY (-€69m) On the back of US and Spanish Asset rotation tran
Slide 38: Core Opex per avg. MW +1% YoY
Core Opex per avg. MW +1% YoY (-3% adjusted), on the back of O&M strategy and despite upfront scale up to cope with accelerated growth Opex (excludes Other Operating Income) (€ million) Core Opex/Avg. MW (€k) (Supplies & Services and Personnel Costs) +7% +1% -3% Adjusted(3) 20.5 20.7 Levies & Non-re
Slide 39: EBITDA of €654m with ~50/50 split between Europe and the US
EBITDA of €654m with a balanced ~50/50 split between Europe and the US, reflecting the low-risk profile of EDPR portfolio EBITDA YoY EBITDA per Region(1) (€ million) (%) RoE -18% Portugal 16% 793 Brazil -13% 16% 1% Adj. ex FX 654 Spain €654m 19% North America 48% 1H20 1H21 1. Includes hedges in Spai
Slide 40: Net Profit totaled €142m
Net Profit totaled €142m decreasing 44% YoY, driven by top line performance and lower gains, partially offset by improved financials 1H21 EBITDA to Net Profit (€ million) r€m YoY (1) EBITDA 654 -€139m Top line performance and lower gains 291 Construction delays in the US due to the weather D&A +€2m
Slide 41: Net Debt and Tax Equity decreased €165m
Net Debt and Tax Equity decreased €165m with cash flow, AR proceeds and the capital increase offsetting growth acceleration 1H21 from RCF to Debt and TEI variance 1H21 Financial Debt Breakdown (€ million) (%) +496 Variable 9% (398) 14% Other 467 +1,500 +165 33% 78% (1,823) Fixed Loans 86% with (77)
Slide 42: ESG continues at the core of EDPR
ESG continues at the core of EDPR, with YoY evolution reflecting acceleration of growth Environment Climate Change Circularity (3) Biodiversity CO2 avoided (1) CO2 emitted (2) Waste Recovery rate Spills & fires (4) Near misses 10 mt 0.2 % 34 kg/GWh 76 % 0 40 -2% vs 1H20 Flat vs 1H20 +26% vs 1H20 +2.
Slide 43: Strong and highly supportive environment
We continue to witness a strong and highly supportive environment and EDPR is well positioned to capture the opportunity April-21 Path to 100% carbon-free electricity by 14-Jul EU Fit for 55 legislative package focusing 2035 in cutting emissions by at least 55% vs. 1990 levels, until 2030 June-21 IT
Slide 44: Key takeaways
Key takeaways EDPR has now 6.7 GW secured with sound returns and risk profile, which are well protected from recent capex cost inflation EDPR continues to ramp-up pipeline and has significant short-term visibility on additional growth In addition, EDPR is expanding its geographic footprint to tap fu
Slide 45: IR Contacts
IR Contacts André Fernandes, Head of IR Pia Domecq Celia de Cominges Duarte Andrada E-mail: [email protected] Phone: +34 914 238 402 Fax: +34 914 238 429 Serrano Galvache 56, Edificio Olmo, 7th Floor 28033, Madrid - Spain EDPR Online Site: www.edpr.com
Slide 46: edp renewables
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Slide 47: Annex
Annex Investors’ Presentation 47
Slide 48: Growth in core low-risk geographies across the world
We focus our growth in core low-risk geographies across the world North America Europe +8.8 GW +6.7 GW Double-down focus with Biden Plan Reinforce position Liquid market with visibility 10.5 Developed market 6.7 20 GW¹ GW over PTC/ITC with public support 8.8 ~ 35% Diversified geographic Gross Growth
Slide 49: Growing presence across technologies with differentiated value proposition
We will grow our presence across technologies, with a differentiated value proposition within the renewable sector Future growth Long-term growth Wind offshore Solar DG opportunity with medium Strong visibility term value crystallization Extensive pipeline with ~ 7% Risk diversified ~ 5% additions r
Slide 50: Strengthening leadership position in wind onshore
We are focused on strengthening our leadership position in wind onshore Additions to target 2021-25 (GW) Current presence XX % in additions XX Total installed capacity1 as of Jun-21 We have a strong onshore wind presence across the … consolidating leadership and globe that will be reinforced… explor
Slide 51: Committed to build a sound market presence in solar
We are committed to build a sound market presence in solar Additions to target 2021-25 (GW) Current presence XX % in additions XX Total installed capacity1 as of Jun-21 We have robust secured additions and pipeline in solar… … adopting a differentiated approach to clients Rest of Reinforce approach
Slide 52: Leading global player in offshore wind through Ocean Winds JV
We aim to be a leading global player in offshore wind through the 50:50 JV Ocean Winds (OW) Step-change in capacity with a global footprint… … with results already in place Installed Under construction Under development ✓ PPA/Tariff secured Pursuing greenfield development, while Project visibility f
Slide 53: As of Jun-21, EDPR has 6.7 GW of secured capacity
As of Jun-21, EDPR has 6.7 GW of secured capacity 2.9 2.2 North America Europe GW GW 33% secured 32% secured 1.2 GW 1.6 GW 0.2 GW 6.7 1.3 GW 0.6 GW 0.3 GW post 2025 8.8 20 GW1 Gross 0.3 GW post 2025 Additions 2021-25 1.4 28 LatAm 1.7 2.9 APAC MW GW 58% secured 2% secured 1.4 GW 0.3 GW 28 MW GW secur
Slide 54: Developing new technologies and business models for long term competitive edge
We are developing new technologies and business models to ensure long term renewables competitive edge and growth Improve profitability and assets utilization Differentiated business case Hybridization Opportunities combining Solar + Wind Early-mover advantage and technology partner Floating to