Edison Spa · MIL:EDNR
Edison Spa — Q1 2004 Earnings Presentation
25 slides from Edison Spa's earnings presentation, May 2004
Slide 1: First Quarter 2004 results and strategic update
First Quarter 2004 results and strategic update May 2004
Slide 2: Agenda
Agenda ■ Edison restructuring process ■ Edison today: ! competitive position and new business structure ! first quarter 2004 results ■ Edison growth strategy in a changing environment : ! electric power ! gas ! commercial operations ■ Capital and shareholding structure 2
Slide 3: Restructuring program completed
Restructuring program completed REFOCUS ON CORE BUSINESS 2001 Revenues 2003(*) Revenues Engineering 2% Water 1% Chemicals 6% Water & Telecoms 1% Engineering 14% Energy Agribusiness Energy 25% 66% 85% (*) Pro-forma net of disposals NON CORE ASSETS DIVESTITURE PROGRAM COMPLETED ~€ 9.1 bn € 9.0 bn Turk
Slide 4: Edison financial restructuring
Edison financial restructuring CONSOLIDATED DEBT EVOLUTION Disposals 6.3 Edison capital increase Disposals (€ bn) 13.5 0.4 1.5 Eurogen 0.4 Edison capital (now Edipower) 2.1 increase Operations acquisition (*) 0.4 0.6 6.5 0.2 0.3 0.3 0.4 Edipower capital Non Core Core CAPEX, fin. EBITDA and increase
Slide 5: Agenda
Agenda ■ Edison restructuring process ■ Edison today: ! competitive position and new business structure ! first quarter 2004 results ■ Edison growth strategy in a changing environment : ! electric power ! gas ! commercial operations ■ Capital and shareholding structure 5
Slide 6: Edison position in the electric power market
Edison position in the electric power market 2003 installed capacity in Italy (Gw) 2003 Edis on Gr oup insta lle d capac ity (Mw) Edison Edipower Total Edison % standalone (Edison %) 2003 Thermoelectric 4,750 3,315 8,065 80% 41.8 Hy droelectric 1,400 390 1,790 18% 10.0 Wind 190 190 2% 3.7 5.7 2.6 1.
Slide 7: Edison position in the gas market
Edison position in the gas market 2003 Italia n s upply (pr oduction and import) – bcm Domes tic production and imports 7.0 Purchas es in Ital y 2.7 9.7 52.8 16.0 Gas directl y s upplied by ENI 2.3 12.0 Total availability 12.0 8.3 9.0 7.0 ENI ENEL Edison Others purchas es from ENI Italia n gas deman
Slide 8: Edison new business structure
Edison new business structure BUSINESS UNIT Electricity Assets Generatio Transmissio Distributio n n n BUSINESS BUSINESS UNIT UNIT Marketing BUSINESS UNIT Hydrocarbons Assets Energy and Sales Management (electricity and gas) E&P LNG Transport and and and Impor Storag Distributi t e on Edison core bu
Slide 9: IQ 2004 income statement
IQ 2004 income statement (€ mln) Core business Core Business FY2003 IQ04 IQ03 ∆% 5,141 Net revenues 1,504 1,497 + 0.5 Volumes posted an increase of more than 17% both in electricity and gas, while revenues were flat mainly for the 1,087 EBITDA 353 330 + 7.0 impact of the strengthening of the euro an
Slide 10: Electric power IQ04 key financial data
Electric power IQ04 key financial data P&L highlights FY2003 (€ mln) IQ04 IQ03 ∆% 3,889 Net revenues 1,128 1,024 + 10.1 826 EBITDA 280 226 + 23.9 21.2% % on sales 24.8% 22.1% Sales volumes (million kWh) IQ04 IQ03 ∆% National Grid Operator (CIP6) 5,912 5,808 + 1.8 Free market, w holesalers and regula
Slide 11: Hydrocarbons IQ04 key financial data
Hydrocarbons IQ04 key financial data P&L highlights FY2003 (€ mln) IQ04 IQ03 ∆% 2,097 Net revenues 662 668 - 0.9 362 EBITDA 86 123 - 30.1 17.3% % on sales 13.0% 18.4% Sales volumes (million c .m.) IQ04 IQ03 ∆% Residential users and distributors 1,356 1,194 + 13.6 Industrial users 496 436 + 13.8 Ther
Slide 12: Edison group IQ04 consolidated balance sheet and cash flow
Edison group IQ04 consolidated balance sheet and cash flow Cons olidated ba lance s heet Cons olidated cash flow FY2003 (€ mln) IQ04 IQ03 (€ mln) IQ04 4,017 Intangibles 3,952 4,996 EBITDA 358 Property, plant Change in working capital and 5,555 and equipment 5,461 6,560 other asset / liabilities (137
Slide 13: Agenda
Agenda ■ Edison restructuring process ■ Edison today: ! competitive position and new business structure ! first quarter 2004 results ■ Edison growth strategy in a changing environment : ! electric power ! gas ! commercial operations ■ Capital and shareholding structure 13
Slide 14: Business overview - dynamics in the electricity market
Business overview - dynamics in the electricity market A fast gr owing liberalising market 450 Twh 400 350 300 TO TAL MARKET CAGR 2.5% Mass 250 Market 200 Letta Decree EU Directive 150 2003/54/CE 100 Bersani Decree NET ELIGIBLE MARKET CAGR 14.5% 50 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 15: Business overview - dynamics in the electricity market
Business overview - dynamics in the electricity market Increasing ca pacity re quirements 2004 - 2011 11.9 1.2 71.5 6.5 6.5 4.7 53.7 0.6 65.0 +18 GW 53.1 Peak demand Reserve margin (Summer peak) 2003 Additional reserv e Increase in Additional reserv e 2011 margin to achiev e demand margin to achiev
Slide 16: Growth strategy – progress in the investment program
Edison growth strategy – progress in the investment program 2003 2008 ~ 10.0 GW 450 MW 1,000 MW 2,000 MW MW 1,600 2,000 MW EDISON 800 MW Altomonte (CS) End 2004 6.3 GW 400 MW Candela (FG) 1H 2005 800 MW Torviscosa (UD) 2H 2005 Construction Expected Authorizations Wind farms and Targeted Installed ca
Slide 17: Development of generation capacity
Development of generation capacity Edis on ge neration mix in 2003 Edis on ge neration mix at 2008 (GW) 14.0 4.8 0.7 10.0 3.7 Capacity not av ailable 4.0 for repowering 0.8 Av ailable capacity 2.9 4.0 3.5 2.0 1.6 Hy dro CIP6 Thermo Edipower Edison Total installed Hy dro, wind CIP6 Thermo Edipower Ed
Slide 18: Business Overview - Dynamics in the gas market
Business Overview - Dynamics in the gas market Ex pected trend in gas demand a nd supply 100 TOTAL DEMAND CAGR 3.0% Source : Edison estimates based on data 90 Italian gas market fully liberalised since from Unione Petrolifera and MAP January 1st, 2003 80 70 Supply balance 2003 60 Domestic production
Slide 19: Development of gas sources in Italy
Development of gas sources in Italy Edis on gas supply mix in 2003 Edis on gas supply mix at 2008 (Bcm) ~17.0 Algeria (*) 12.0 3.0 5.0 (4.0 after 2010) Qatar 5.5 5.9 Spot 1.2 Libya Algeria/Libya 1.5 3.4 4.0 Russia 1.8 North Sea 1.4 Russia 1.1 North Sea 1.4 2.0 ~ 1.0 Domestic Import via Purchases Tot
Slide 20: Edison growth guidelines
Edison growth guidelines Commercial strategy: c ustomer segme ntation Target areas for a llia nces Alliances with ESTGA S Customers nr. 210 ,000 Edison municipal Ediso n share 22 % Strengthen alliances with utilities municipal PROM ETEO Customers nr. 126 ,000 utilities in Central Ediso n share 21 %
Slide 21: Edison commercial targets in electricity and gas
Edison commercial targets in electricity and gas Electricity 2003 (TWh) Electricity 2008 16.9 +38.7% X 2.5 262.4 163.4 297.5 226.6 41.8 63,9 35,5 70,9 Residential 81,1 Opening 49 Alliances segment 70,6 81,1 in 7/2004 Small / ver y s mall 55,7 49,0 55,7 SME 78,9 Large industrial 89,8 78,9 89,8 Total
Slide 22: Efficiency drivers and evolution of production mix
Edison efficiency drivers and evolution of production mix 2004 2008 The 16% decrease in average variable THERMO Average cost of thermo generation of Edison and MERCHANT variable € / MWh % 100 84 Edipower merchant plants includes the GENERATION cost im pact of scenario and of purchases of green certi
Slide 23: Agenda
Agenda ■ Edison restructuring process ■ Edison today: ! competitive position and new business structure ! first quarter 2004 results results ■ Edison growth strategy in a changing environment : ! electric power ! gas ! commercial operations ■ Capital and shareholding structure 23
Slide 24: Capital and shareholding structure
Capital and shareholding structure 24.6% 18.0% 14.2% 12.5% 10.7% 20.0% Sanpaolo Banca FIAT EDF Capitalia Tassara IMI Intesa CAPITAL STOCK AS OF 30.04.2004 - Ordinary shares 4,126,289,943 Italener gia bis - Non convertible sav. shares 110,592,420 - TOTAL SHARES 4,236,882,363 2.3% (*) 63.8% (*) 2.0% 1
Slide 25: Disclaimer
Disclaimer This document has been prepared by ED ISON solely for the use at in vestors and analysts meetings. Some information contained herein and other material discussed at the meetings may include forward looking information based on EDISON’s current beliefs and e xpecta tions. These statements