Romande Energie Holding SA · SIX:REHN
Romande Energie Holding SA — FY2022 Earnings Presentation
39 slides from Romande Energie Holding SA's earnings presentation, Apr 5, 2023
Slide 1: Proven resilience in turbulent times
Proven resilience in turbulent times Investor meeting Lausanne, 5 April 2023
Slide 2: Sommaire
Sommaire 01 An extraordinary year 02 A strategy that passes the test 03 Financial results 04 New core purpose and values 05 Events calendar 2
Slide 3: An extraordinary year
An extraordinary year
Slide 4: Press coverage of the energy crisis
4 Source: RTS Info, 24Heures, Heidi.news, La Côte, Le Monde, NZZ, Handelszeitung, SRF, Financial Time, Handelsblatt
Slide 5: The climate crisis is an energy crisis
The climate crisis IS an energy crisis CO2 Energy Decarbonisation vital for • Over 80% of CO2 emissions slowing global warming originate from fossil fuels • Electrification of society leading to demand outstripping supply 5
Slide 6: Background and consequences
Background Consequences • War in Ukraine and policies in European countries to move faster away from fossil • Sharply higher cost of energy in CH fuels and reliance on Russian gas • Non-regulated customers under • Gas and electricity price surge, energy pressure insecurity and government energy subs
Slide 7: Electricity price trends
Electricity price trends Mild winter, gas reserves more or less untouched, French nuclear generation fleet coming back on stream €988 per MWh Corrosion-linked malfunctions in French nuclear installations War in Ukraine €346 per MWh Global financial Surge in crisis Economic Movements commodity Drop i
Slide 8: Switzerland's 2050 electricity equation
Switzerland’s 2050 electricity equation Electricity consumption in Switzerland (TWh) Electricity production in Switzerland (TWh) 100 100 90 90 90 80 13 ? 80 +50% 70 70 Other (45 tbc) 60 60 60 34 50 50 Solar 40 40 4 Wind 30 30 39 20 20 Hydro 10 10 0 Nuclear 0 2020 2050 2020 2050 8 Sources: SCCER-SOE
Slide 9: Swiss federal (and EU) responses
Swiss federal (and EU) responses
Slide 10: Swiss federal response
Swiss federal response • Ostral Plan • Energy-saving awareness campaign • Unprecedented parliamentary response • Attempt to revive talks with the EU Security of supply has become priority amid real risk of shortages. 10
Slide 11: Federal level: Unprecedented parliamentary response
Federal level: Unprecedented parliamentary response • Blanket decree (in progress): • Increase in domestic generation, focusing on winter (2040 target: +6 TWh) • Fast-track procedures • Abandonment of liberalisation • DSO involvement in energy saving • Plans to abandon average price • Back-up power
Slide 12: EU response
EU response • Capping power generators’ profits at €180/MWh possible • French interpretation: • cap can be backdated to 1 July 2022 • €100 per MWh • Proposals to reform European energy market • Merit order system left unchanged • Incentives to sign long-term contracts • Introduction of contracts for
Slide 13: A strategy that passes the test
A strategy that passes the test Romande Energie’s response
Slide 14: Boost supply and curb demand
Boost supply and curb demand Supply Demand Increase in-house generation Energy efficiency and conservation • Swiss solar plan • Households: Home as a service, Ma commune • Hydroelectric plan et moi • Thermal energy plan • Businesses: ZenCO2 – energy contracting • Sainte-Croix: 1st wind farm • Proper
Slide 15: Swiss solar plan
Swiss solar plan • 15.6 MWp signed in 2022 • 23 installations commissioned, representing 6.9 MWp • References: Kudelski, Lyreco, Holcim, Procimmo, TPF, St-Gobain-Isover, Thévenaz-Leduc, MSF, Cave de la Côte and others • Across Switzerland
Slide 16: Thermal energy plan
Thermal energy plan • 67 GWh production in 2022, including new 6 major district heating projects signed • Record year for additions, including Moudon, Payerne, Nyon, Troinex, Villars- sur-Ollon and Vionnaz • Stress on heat sources available in the region: • Lake water: OK • Wood: stress on local pro
Slide 17: Grids in 2030
Grids in 2030 • Efficiency-driven planning using smart- metering data • Estimating future costs for electrification and analysing possibilities for optimisation • Addressing grid constraints relative to the energy transition early on, through the use of data and flexibility solutions • Providing han
Slide 18: Financial results
Financial results Financial strength and business diversification
Slide 19: 2022 – a high-performance business model
2022 – a high-performance business model +21% Revenues CHF 742m Top-line growth driven by all business CHF EBIT 60m units up 12% Margin 8% CHF 54m Net profit up 56%, including associates (EOS) CHF 166m Operating cash flow up 15% (+ CHF 21m) 1,253 CHF 179m FTEs 78 new hires Building for the future Ad
Slide 20: Positive contribution from the three business units
Positive contribution from the three business units GRIDS RECURRENT AND SOLID • EBIT +14% at CHF 50m ENERGY SOLUTIONS • Smart meter rollout • Increase in non-monopoly business OPERATING lines IMPRESSIVE RESILIENCE THANKS TO DIVERSIFIIED PORTFOLIO RESULTS • EBIT +1% at CHF 13m 2022 • Drought conditio
Slide 21: Reliable 'natural hedge' from operations
Reliable ‘natural hedge’ from operations Exceptional weather conditions and steady rise in kWh prices FMHL EOS + CHF 15m +CHF 4.5m French assets + CHF 8m - CHF 18m + CHF 5m EBIT-level ‘energy’ + CHF 23m impact Higher price per kWh (spot market) and volume effect (shortfall in demand) Own generation
Slide 22: EOS, a major contributor to RE
EOS, a major contributor to RE 2022 2030 TARGETS FOR EOS NER 100% 76% 24% 410 MW 102 MW 420 MW 400 MW = 820 MW EOS NER valuation 29.71% ~ CHF 1bn (EBITDA multiple) CHF 0.3bn CHF 445m (equity) vs Value of the share of EOSH equity ALPIQ valuation CHF 1.2bn (equity) 33.33% Sources: EOSH and 2022 ALPIQ
Slide 23: Strong increase in 2022 capex
Strong increase in 2022 capex 2022 capex Annual investment CHF 179m (+41%) 2021-2026 strategy = CHF 1.4bn 1 600 CHF m Power generation 1 400 infrastructure 1 200 • Wind 39% 1 000 • Hydro 23% 800 • Solar 21% 41% • Cogeneration 17% 600 400 200 Thermal systems 0 15% Grids Projected 2026 breakdown and r
Slide 24: Diversified power generation portfolio
Diversified power generation portfolio Hydro 2026 projections Solar 2022 520-580 MW Wind 281 MW Biomass 2021 265 MW 33% CH 90%, FR 10% 60% 37 installations CH 90%, FR 10% 36 installations 64% 38% CH 60%, FR 40% 149 installations 26% CH 56%, FR 44%, 126 installations 25% FR 100% 4 installations 28% F
Slide 25: Strong momentum in thermal systems
Strong momentum in 2026 projections thermal systems 210-230 GWh 2022 2021 67 GWh 65 GWh 26 installations 32 installations
Slide 26: Funding the 2021-2026 strategy
Funding the 2021-2026 strategy Record and rising cash flow from operations 2018-2022 Ø CHF 135m Capital markets CHF 100m green bond 2.625% 2022-2037 Strategy CHF 1.4bn Credit limits CHF 227m, of which CHF 100m confirmed Co-investments 2022 77% Financial independence ratio 2021 82% 26
Slide 27: Increasing the share's appeal
Increasing the share’s appeal CHF 36* 2022 dividend per share unchanged Dividend yield: 3.2% (based on end-2022 share price) payable on 23 May 2023 Share split* in regard to Romande Energie Holding SA registered share (first trading day after split, 28 June 2023) 1 REH share 25 REH shares Market pri
Slide 28: Sustainability at the heart of everything we do
Sustainability at the heart of everything we do • First publication under Carbon Disclosure Project (CDP) • Second Sustainability Report compliant with GRI (Global Reporting Initiative) • GHG footprint (scopes 1, 2 and 3) reported since 2020 • Monitoring 2 strategiy environmental targets Carbon in
Slide 29: A strategy that passes the test
A strategy that passes the test Solid results thanks to our business diversification Positive outlook following the solid results seen in 2022 Continuation of the ambitious 2021-2026 investment plan Strengthening commitment to sustainability year after year 29
Slide 30: New core purpose and values
New core purpose and values
Slide 31: Let's link our energies to accompany our region towards a sustainable future
Let’s link our energies to accompany our region towards a sustainable future Audacity Collaboration We have the willpower to break We achieve common goals by working habits. We learn from our experiences together in a spirit of mutual respect, and remain responsive so that openness and dialogue. inn
Slide 32: Authenticity
Slide 33: Events calendar
Events calendar
Slide 34: Calendar
Calendar 2022 results 5 April 2023 Closing of the share register 2 May 2023 121st Annual General Meeting 16 May 2023 Ex dividend date 19 May 2023 Record date 22 May 2023 Dividend payment 23 May 2023 H1 2023 results 31 August 2023 34
Slide 35: Thank you for listening
Christian Petit CEO Thank you for listening Nicolas Conne CFO and Head of Services
Slide 36: Annexes
Annexes
Slide 37: Grids: recurrent and solid
Grids: recurrent and solid GRIDS CHF thousands 2022 2021 % • Solid results: EBIT +14% change • Lower demand • Continued inroads by non- Net revenues 267 244 240 568 11% monopoly activities • Smart meter rollout (44,000 Gross profit 200 504 185 461 8% installed in 2022) % of net revenues 75% 77% Outl
Slide 38: Energy Solutions resilient in turbulent times
Energy Solutions resilient in turbulent times ENERGY SOLUTIONS • Sharp increase in revenues (resale of CHF thousands 2022 2021 % surplus volumes and higher market change rate for kWh) • Sharp drop in generation from own Net revenues 376 369 270 231 39% installations (exceptional drought Gross profit
Slide 39: Buoyant market for RE Services
Buoyant market for RE Services RE SERVICES CHF thousands 2022 2021 % change • Consolidation and resilience • Operating profit bolstered by business and regional Net revenues 144 453 141 656 2% diversification Gross profit 72 490 69 847 4% • Higher materials costs • Longer delivery times % of net rev