Edison Spa · MIL:EDNR
Edison Spa — FY2003 Earnings Presentation
23 slides from Edison Spa's earnings presentation, Mar 30, 2004
Slide 1: 2003 Full Year Results and Strategic Update
2003 Full Year Results and Strategic Update March 30th , 2004
Slide 2: Agenda
Agenda ■ Edison restructuring process ■ Edison today: ! competitive position and new business structure ! 2003 consolidated and core business results ■ Edison growth strategy in a changing environment : ! electric power ! gas ! commercial operations ■ Capital and shareholding structure 2
Slide 3: Two years restructuring program completed
Two years 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 € 9.0 bn Edis
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) 2.0 increase Operations acquisition (*) 0.4 0.6 6.5 0.2 0.3 Edipower capital Non Core increase Core operations Operations 4.1 Pro f
Slide 5: Agenda
Agenda ■ Edison restructuring process ■ Edison today: ! competitive position and new business structure ! 2003 consolidated and core business 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 41.0 Thermoelectric 4,750 3,315 8,065 80% 10.0 Hy droelectric 1,400 390 1,790 18% 3.7 5.4 2.6 1.4 6.3 Wind 190 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 52.8 16.0 (a) 12.0 (a) 7.5 (a) Includes domestic purchases from ENI directly supplied to pow er plants 9.0 7.0 ENI ENEL Edison Others Edis on gas supply mix Edis on gas sales m ix 12.0 bcm (*) 12 12 10.1 bcm (*) 9
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: 2003 income statement
2003 income statement (€ mln) Consolidated Core Business 2003 2003 2002 ∆% Increase in revenues (w hich includes an increase of 10% 6,287 Net revenues 5,141 4,418 +16.4 in electricity and 47% in gas) primarily due to higher sales volumes (+54% in gas and 3.3% in electricity) and 1,103 EBITDA 1,087 1
Slide 10: Electric power 2003 key financial data
Electric power 2003 key financial data Electric power (€ mln) 2003 2002 ∆% " Total sales volumes higher by 3.3% ; Net re venues 3,889 3,523 + 10.4 thermoelectric net a vailable output higher by EBITDA 826 812 + 1.7 3.8%; h ydroelectric and wind net a vailable % on sales 21.2 23.0 production lower b
Slide 11: Hydrocarbons 2003 key financial data
Hydrocarbons 2003 key financial data Hydr ocarbons " Total sales volumes were up 54%; sales volumes to the free market posted an increase (€ mln) 2003 2002 ∆% of 28% with a significant refocus on more Net re venues 2,097 1,424 + 47.3 profitable commercial sector. Sales to residential users and distr
Slide 12: Edison group 2003 consolidated balance sheet and cash flow
Edison group 2003 consolidated balance sheet and cash flow Cons olidated ba lance s heet Cons olidated cash flow (€ mln) 2003 2002 (€ mln) 2003 Intangibles 4,017 5,055 EBITDA 1,103 Taxes paid (32) Property, plant and equipment 5,555 6,569 Change in working capital and Financial fixed assets 1,235 94
Slide 13: Agenda
Agenda ■ Edison restructuring process ■ Edison today: ! competitive position and new business structure ! 2003 consolidated and core business 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 4.7 53.7 0.6 65.0 +18 GW 53.1 Peak demand Reserve margin (Summer peak) 2003 Additional reserve Increase in Additional reserve 2011 Tota l authorizations margin to achieve demand ma
Slide 16: Edison growth strategy – progress in investment program
Edison growth strategy – progress in 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 capaci
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 1.6 2.0 Hy dro CIP6 Thermo Edipower Edison Total installed Hy dro CIP6 Thermo Edipower Edison T
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 Projecte d gas a vaila bility in Italy Existing (contracted volumes at full regime) Under development (full capacity) 100 Holland 9.5 bcm (pipelin e) Russia 27.5 bcm (pipelin e) TOTAL DEMAND CAGR 3.0% Norway 6 b
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 Volume tar get a nd market share by product SALES IN THE FREE ELECTRIC POWER MARKET Alliances with Edison municipal utilities Edison (TWh) 40 298E Market Consolidate 16.9 110 Large current market share 2003 2008 Edison share in fr
Slide 21: Agenda
Agenda ■ Edison restructuring process ■ Edison today: ! competitive position and new business structure ! 2003 consolidated and core business results ■ Edison growth strategy in a changing environment : ! electric power ! gas ! commercial operations ■ Capital and shareholding structure 21
Slide 22: 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 29.02.2004 - Ordinary shares 4,126,268,253 Italener gia bis - Non convertible sav. shares 110,592,420 - TOTAL SHARES 4,236,860,673 2.3% (*) 63.8% (*) (*) 16
Slide 23: 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