Edp Renewables Sa · EURONEXT:EDPR
Edp Renewables Sa — EDP Renováveis — Investor Presentation (March 2016)
47 slides from Edp Renewables Sa's investor presentation, March 2016
Slide 1: EDP Renováveis Investor Presentation March 2016
EDP Renováveis Investor Presentation March 2016 www.edpr.com
Slide 2: EDPR top quality and diversified portfolio
EDPR top quality and diversified portfolio totals 9.6 GW as of Dec-15 Canada 30 MW #4 US UK Belgium 4,382 MW Offshore under development 71 MW Poland #2 468 MW Mexico 200 MW under France development 364 MW + Offshore under #3 development Romania Italy 521 MW Brazil #1 Portugal Spain #3 100 MW 1,247 M
Slide 3: EDPR: a market leader with a top quality portfolio
EDPR: a market leader with a top quality portfolio… A worldwide renewable market leader… …with a solid 2014-17 strategic plan 10 >500 Diversified portfolio OPERATING Investing in quality projects MW/YEAR COUNTRIES Young assets with long 6 Growth through projects with 100% YEARS AVERAGE residual life
Slide 4: Successfully executing its strategic agenda
…successfully executing its strategic agenda and creating foundations for high performance Selective and Self-funding Quality assets profitable growth business model 2015 2015 2015 Output of 21 TWh +602 MW added in 2015 and €701m of OCF mostly from 97.6% availability; 3% below P50 344 MW under const
Slide 5: Full visibility over 2017 strategic agenda
EDPR with full visibility over its 2017 strategic agenda, supporting the delivery of solid growth… EDPR 2014-15 accretive capacity additions… …exceeding BP 14-17 target 2016-17 projects with high LT visibility +755 MW +727 MW 15/20 years PPA; LT REC contracts +346 MW +200 MW 25-year USD bilateral ag
Slide 6: Additional options for future growth
…while continuously working on additional options for future growth Global growth drivers EDPR growth strategy with Wind PTC extension • 5 years extension focus on long-term contracts Competitiveness • 20% per annum phase down in 2017-19 Renewable Portfolio Standards • 29 States (+ DC) • 8 states w/
Slide 7: Concrete drivers to achieve sound performance in 2016
EDPR concrete drivers to achieve sound performance in 2016 2016 Outlook EBITDA (ex-one-offs) Avg. MW in Operation +10-12% (€bn) Benefitting from 2015 new capacity YoY double and ENEOP full year consolidation digit Load Factor (P50) c.31% Supported by new competitive projects +5% YoY One-offs and rec
Slide 8: EDPR Strategic Agenda
& renovaveis EDPR Strategic Agenda
Slide 9: Attractiveness of onshore wind energy
Attractiveness of wind energy onshore based on technology competitiveness and visible drivers Wind competes with all technologies… …supported by identified growth drivers Levelised Cost of Energy (LCoE) (1) Electrification of the Economy (€/MWh, 2015) EDF CfD for new nuclear plant in UK (2): • OECD
Slide 10: Wind onshore is a competitive technology
Wind onshore is already a competitive technology set for even higher long-term competitiveness… Wind Energy competes with the …and is expected to show most efficient conventional technology… ongoing improvement Wind vs CCGT: LCoE1 Wind LCoE1 LCoE Wind (€/MWh) Recent oil prices €/MWh load factor -24%
Slide 11: Largest growth driver in renewables
…and perceived by the market as the largest growth driver in renewables 2014-2020 Worldwide Additions 2014-2020 Renewables Additions 2014-2020 Wind Onshore Additions (GW) (GW) (GW, ex-China) Renewables 594 Wind onshore 265 Europe 36% Decentralised Regions with Coal and oil 454 143 EDPR presence sola
Slide 12: US strong growth driven by wind competitiveness
US strong growth driven by wind competitiveness, PTCs extension, RPS demand & Clean Power Plan Drivers for US Wind Demand Forecast US Annual Wind Additions (GW) PTCs • 5 years extension Production Tax Credits • 20% p.a. phase down in 2017-19 excludes CPP early adoption +9 GW >8 GW RPS • 29 States (+
Slide 13: Europe continues to present visible opportunities
Europe continues to present visible opportunities, and is set to fuel further growth beyond 2020 2015-2020E Growth Beyond 2020, Europe is expected to be again (wind onshore) at the forefront of the renewable energy growth NREAP EU targets for 20301… …defined under a common vision National Renewable
Slide 14: Strategic plan through 2017 supported by 3 pillars
EDPR’s strategic plan through 2017 to distinctively create value supported by 3 pillars 1. Selective growth 2. Operational excellence 3. Self-funded business 2014-2017 2014-2017 2014-2017 >500 Maintaining high >97.5% Strong Operating Investing in quality projects MW/year availability levels Cash-Flo
Slide 15: Growth plan based on projects with long-term visibility
EDPR executing a growth plan based on projects with long-term visibility and low risk profile… Growth Profile Growth based on projects with PPAs +329 MW +389 MW +755 MW US added in 2014 added in 2015 with PPAs for 2016/17 LT visibility for growth in selected countries >500 MW growth/year • +346 MW o
Slide 16: Investments in the US at the core of growth
…and with investments in the US at the core of EDPR growth strategy Economics of PPA EDPR: leaders in new wind PPA in the US market (1) already secured average metrics Load Factor 43% 250 MW (2016/17) 155 MW (2016/17) 200 MW 100 MW Price $48/MWh 99 MW (2016/17) (2015) (PPA first year) (2014) 200 MW
Slide 17: Improving returns through revenue maximization and cost control
EDPR is continuously improving returns through revenue maximization and cost control Ongoing implementation of innovative Keep high levels power enhancing products of availability cut-out Revenue retrofits max uprate add >97.5% Maximization vortex power Maximizing operating wind farms output Reducti
Slide 18: Recurrent premium load factor
Recurrent premium load factor reflecting distinctive core competences… Load Factor and Technical Availability EDPR Quarterly Load Factor vs. Average (%) 2014 2015 +12% 2015 ∆% YoY 2014 vs. 2015 vs. average average +0.3% 26% -0.5pp 101% 98% -3% -1% -3% -3% -4% -7% 1Q 2Q 3Q 4Q 2H15 @ 32% -0.7pp 101% 9
Slide 19: Lower Core Opex on O&M strategy and cost control
…with lower Core Opex on the back of O&M strategy and cost control Operating costs breakdown(1) (€m, %) Core Opex/MW (€k) (Supplies & Services and Personnel Costs) Levies & 24% 22% 24% Other -3% -2% CAGR CAGR ex-FX ex-FX 43.9 42.4 45.1 Forex 76% 78% 76% Core Opex (2) 42.5 41.9 Core Opex 2013 2014 20
Slide 20: Asset rotation strategy to accelerate value creation
Growth enhanced by EDPR’s asset rotation strategy designed to accelerate value creation… Asset Rotation Strategy 1 Self-funding Strategy (1) 2 Accelerate value growth Asset Allowing the execution Rotation Crystallise projects’ of additional market NPV, capturing & opportunities Investment value crea
Slide 21: Transactions executed at attractive multiples
Total of 11 transactions already executed at attractive multiples.. Including sales to CTG and Asset Rotation, EDPR already agreed on c.€1.8bn of minority sales Strategic Partnership 2012-2013 Asset Rotation 2014-17 644 321 598 599 97 100 270 30 1,101 30 1,002 Scope MW1 MW2 MW3 MW MW MW MW MW MW4 MW
Slide 22: Self-funding model maintaining solid credit metrics
Self-funding model maintaining solid credit metrics to cope with growth strategy Dec-15: Debt Profile Debt Maturity @ Dec-15 (€, %) (€, %) €4.1bn 60% Variable Other 10% 9% 46% USD 40% 40% 40% Net Debt Fixed €3.7bn 90% 20% EUR 51% 9% 5% 0% Financial Debt Type Currency 2016 2017 2018 >=2019 Cost of De
Slide 23: Diversified source of funds
Diversified source of funds aligned with EDPR self-funding and growth strategy 2015: Cash Flow (€ million) 242 33 • €81m to minorities (dividends and capital distributions) 316 • $238m not included; (986) • €35m to EDPR shareholders cashed-in Jan-16 (dividends) • $308m not included; • ENEOP consolid
Slide 24: EDPR value proposition supported by three strategic pillars
EDPR value proposition supported by three strategic pillars By delivering on its strategy… Selective and Quality assets delivering Self-funding profitable growth increased profitability business model …EDPR expects to achieve solid growth targets… …maintain its dividend policy… Electricity Output EB
Slide 25: 2015 Results
& renovaveis 2015 Results
Slide 26: Selling price increased +9% YoY to €64/MWh
Selling price increased +9% YoY to €64/MWh EDPR Price Evolution (€/MWh) 2015 % YoY +9% • +14% YoY higher price in Spain €83.0 +3% +2% ex-FX • Spanish hedges optimized €64.0 €58.9 • PPA: $52/MWh (-1% YoY) $51.0 +0.4% • Non-PPA: $44/MWh (+6% YoY) • REC sales & effective hedging R$370 +7% • Inflation
Slide 27: Revenues totalled €1,547m (+21% YoY)
Revenues totalled €1,547m (+21% YoY) on the back of higher volume, prices and dollar appreciation Revenues Main drivers for Revenues performance (€ million) +21% Quality assets: +743 MW (Avg. EBITDA) YoY Load factor: 29% 1,547 High availability: 97.6% 1,277 Higher Electricity output: +8% YoY EU +8%;
Slide 28: O&M strategy and cost control delivering results
O&M strategy and cost control continuing to deliver sound results Opex (excludes Other Operating Income) (€ million) Core Opex/MW (€k) +35% (Supplies & Services and Personnel Costs) +14% ex-FX per MW +6% 566 -1% ex-FX 419 • €72m of write-offs 42.4 45.1 Levies & Non-current Core +17% Opex(1) +8% ex-F
Slide 29: EBITDA increased +26% YoY
EBITDA increased +26% YoY, benefitting from top-line evolution and impacted by one-offs EBITDA EBITDA per Region (€ million) (%) +26% +20% ex-one-offs c.€65m YoY one-offs: Portugal 1,142 • +€125m: ENEOP PPA 24% • -€72m: write-offs due to strict Rest of development focus Europe 903 • +€30m: update
Slide 30: Net Financial Expenses impacted by Forex and One-offs
Net Financial Expenses impacted by Forex and One-offs; Interest costs 13% lower YoY (ex-Forex) Net Financial Expenses (€ million) +14% Net interest costs of debt (€ million) -1% ex-FX & one-offs -8% 285 -13% ex-FX 250 +7 205 +30 189 (1) (21) Including project finance (5) +10 restructuring, with debt
Slide 31: Net profit in the period totalled €167m
Net profit in the period totalled €167m 2015 EBITDA to Net Profit (€ million) €m YoY EBITDA 1,142 +€239m Top-line evolution, ongoing efficiency & one-offs D&A 564 €84m Higher capacity YoY, FX and impairments EBIT 578 +€155m Reflecting top-line growth & non-recurring items (1) Financial Net interest
Slide 32: EV Multiple
& renovaveis EV Multiple 32
Slide 33: EDPR – Capital Markets Valuation
EDPR – Capital Markets Valuation EDPR Market Valuation EV/MW implicit in share price (€m) (€m/MW) Equity @ 6.75€/share 5,888 1.31 1.25 1.29 + Net Debt (2015) + 3,707 1.20 1.22 1.16 + Inst. Partnerships (2015) + 1,165 + Non-controlling interests (2015) + 863 = Enterprise Value = 11,623 - Net Debt 201
Slide 34: US wind competitiveness
renovaveis US wind competitiveness 34
Slide 35: Existing demand for US wind PPAs driven by different dynamics
In the US, the existing demand for wind energy PPAs is driven by different dynamics Wind competes for PPAs mainly in two different segments Wind vs CCGT: Levelised Cost of Energy LCoE $/MWh Wind Load factor 110 1 RPS demand for new renewable builds 100 23% 90 • Several Sates need to comply with rene
Slide 36: EDPR secured PPAs for 2014-17 projects at attractive returns
EDPR secured PPAs for 2014-17 projects at attractive returns US PPA: 1.5 GW secured for 2014-2017 2014 2015 2016 & 2017 329 MW 400 MW 755 MW State MW Years State MW Years State MW Years Indiana 200 California 99 Ohio 100 MW 12 yrs New York 155 MW 20 yrs California 99 20 yrs Oklahoma 100 20 yrs Maine
Slide 37: Spanish Regulation
& renovaveis Spanish Regulation 37
Slide 38: RDL 413/2014 scheme changes in wind remuneration
RDL 413/2014 scheme is based on standards introduces significant changes in wind remuneration Wind energy assets …setting significantly different equivalent 1 will sell power on the market… 3 selling prices for 2015 (2) Complement Production x Pool Price Pool price €/MWh 125 Pool price with caps and
Slide 39: Regulatory selling price with cap and floor system
Standard production to benefit from regulatory selling price, with a cap and floor system… Spanish Volumes & Prices Price per GWh w/o complement vs. pool price (% total capacity) €/MWh 65 Selling price 55 2.2 GW W/o • Production: pool price (€/MWh) 45 9% complement 35 37 41 45 49 53 57 • Standard pr
Slide 40: O&M Strategy
& renovaveis O&M Strategy
Slide 41: Assets managed under standards of excellence
EDPR assets are managed under the standards of excellence of highly experienced teams… EDPR to strategy to optimize operations and maximize efficiency Dispatch Centre EDPR • Each wind farm is connected to EDPR dispatch centre Dispatch Centre • Real time monitoring, remote control and data collection
Slide 42: Comprehensive O&M strategy to maximize efficiency
…and has been implementing a comprehensive O&M strategy to maximize efficiency Unique comprehensive O&M strategy “M3” 3rd EDPR OEM2 Modular Maintenance Model parties Initial warranty End of New O&M contracts closely managed warranty contract Maintenance management O&M/MW1 (1H15 vs. 1H14, €) Day-to
Slide 43: 2020 European Renewable Energy Targets
2020 European Renewable Energy Targets 43
Slide 44: 2020 European Renewable Energy Targets
2020 European Renewable Energy Targets Share of renewable energy targets for 2020 (2014, in % gross final energy consumption) 68% 49% 38% 40% 34% 30% 69% 31% 20% 25% 23% 24% 25% 23% 53% 20% 16% 18% 18% 39% 16% 17% 39% 15% 15% 33% 13% 13% 13% 29% 13% 14% 14% 28% 27% 11% 10% 27% 25% 24% 22% 18% 17% 16
Slide 45: Disclaimer
Disclaimer This presentation has been prepared by EDP Renováveis, S.A. (the "Company") solely for use at the presentation to be made on March, 2016. By attending the meeting where this presentation is made, or by reading the presentation slides, you acknowledge and agree to be bound by the following
Slide 46: IR Contacts
IR Contacts Rui Antunes, Head of Planning & Control and IR Maria Fontes Paloma Bastos-Mendes E-mail: [email protected] Phone: +34 914 238 402 Fax: +34 914 238 429 Serrano Galvache 56, Edificio Olmo, 7th Floor 28033, Madrid - Spain EDP Renováveis online Next Events Site: www.edpr.com Mar 9th: Roadshow Gene
Slide 47: renovaveis
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