EDP Renewables SA · EURONEXT:EDPR
EDP Renewables SA — EDP Renováveis — Non-Deal Roadshow (June 2009)
46 slides from EDP Renewables SA's roadshow presentation, June 2009
Slide 1: Roadshow Presentation
Roadshow Presentation June, 2009 powered by nature
Slide 2: Agenda
Agenda I EDP Renováveis II Outlook and Strategic Update III 1Q09 Results IV Conclusions 1
Slide 3: EDP Renováveis
f o e ~ J EDP Renovaveis
Slide 4: EDPR: a pure wind player with a sound asset base
EDPR: a pure wind player with a sound asset base… USA Poland Belgium 2,257 - 500 France 47 120 17,484 Romania 23 185 1,168 61 26 - Portugal 1,254 - 853 553 Spain Brazil 72 2,109 673 477 14 4,804 - 1,544 Gross MW Installed Under Pipeline + Capacity Construction Prospects MW Installed Capacity 5,165 1
Slide 5: Balanced portfolio in highly selective attractive markets
…and a balanced portfolio located in highly selective attractive markets… 1Q09 Gross MW in Country operation (under constr.) 1Q09 Price/MWh Remuneration Scheme Wind Resource • PPA or Merchant 2,257 (500) $47(1) • Tax Incentives USA Feed-in tariff, or 2,109 (477) €93 market option with premium Spain
Slide 6: Well positioned to capture long-term profitable growth
…and is well positioned to capture long-term profitable growth EDPR Growth Targets (Gross MW) +4.1 10.5GW Strong asset base delivering low risk cash-flows and attractive returns +1.2 5.2GW Robust pipeline of 28GW providing optionalities to value oriented growth Value maximization through top tier op
Slide 7: Outlook and Strategic Update
Outlook and Strategic Update
Slide 8: Clear competitive strengths oriented to maximize value creation
Clear competitive strengths oriented to maximize value creation Pure renewable player in a sector with positive trend for long term growth Strong track record on growth delivery and visible pipeline to feed superior growth Top quality load factors to deliver premium assets and higher revenues per MW
Slide 9: EU: supportive regulation and well defined targets
EU: supportive regulation and well defined targets European • Stable regulatory environment Union • The 20% 2020 target for renewables was reaffirmed • Floor price granted for 20 years secures a minimum return Spain • Government’s 2010 target set at 20,155MW • Under discussion new targets for 2020 P
Slide 10: US: new regulatory developments providing support for profitable growth
US: new regulatory developments are providing support for a profitable growth Measure Impact Status One of the main pillars • New regulatory A new vision for the renewable industry for a sustainable economic growth developments to support the industry Stimulus Bill • Higher liquidity and Solving i
Slide 11: US: Stimulus Bill, Cash Grant and Federal Loan Guarantee
US: Stimulus Bill to introduce positive changes via Cash Grant and Federal Loan Guarantee program Impact on Cost of Capital Cash Grant (WACC %) • Higher liquidity through unlimited appropriation and no execution risk on tax equity Replacement of the tax • Projects must have COD from Jan-09 to Dec-12
Slide 12: US: green mandatory demand is the main growth driver
US: green mandatory demand is the main growth driver to the wind sector Current RPS’ are only defined and enforced at … but already project green demand to increase state level … 11% CAGR to comply with targets TWh 450 VT ME WA MT ND 400 Rockies NH MN MA ISO-NE OR NY PNW WI RI 350 ID SD MI CT NY-ISO
Slide 13: US: energy and climate bill gaining momentum
US: energy and climate bill are also gaining momentum to boost renewables growth in US Impact of Federal RPS based on public proposals (1) (TWh) +78% • Energy and climate bills would give further support on wind industry long term 208 2020 goal fundamentals: – Increasing mandatory demand – Higher su
Slide 14: Clear competitive strengths oriented to maximize value creation
Clear competitive strengths oriented to maximize value creation Pure renewable player in a sector with positive trend for long term growth Strong track record on growth delivery and visible pipeline to feed superior growth Top quality load factors to deliver premium assets and higher revenues per MW
Slide 15: Delivering on capacity growth
Delivering on capacity growth YoY Capacity Increase QoQ Capacity Increase (Gross MW) (Gross MW) +1,459 1Q08 66 5,165 1Q09 113 +701 2Q08 3,706 +744 3Q08 4Q08 YE08 1.4 GW 1Q08 EU US 1Q09 YE09E 1.2 - 1.3 GW • Continuous delivery of capacity growth by adding 1,459MW in the last 12 months (+40% yoy) • 11
Slide 16: US to account for 50% of new capacity in 2009
US to account for 50% of the new capacity to be commissioned in 2009 Expected growth in installed capacity Capacity under construction (Gross GW) (Gross MW) Already commissioned +25% 200 1.2 GW 1.2 – 1.3 300 50% EU 717 50% US 6.3 – 6.4 113MW 5.1 2008 Expected 2009E 1Q 1Q April Total capacity to be c
Slide 17: Capacity under construction in US states and European countries
Capacity under construction in 3 US states and 5 European countries US: Capacity Under Construction EU: Capacity Under Construction (MW) (MW) Illinois Illinois Belgium Poland Top Crop I 102 Rail Splitter 101 23 120 Spain 477 WA MT ND MN OR NY WI ID SD MI WY PA IA NE OH NV IL IN UT CO CA KS OK AZ NM
Slide 18: Robust and visible pipeline to feed growth targets
Robust and visible pipeline to feed growth targets Pipeline(1) New capacity to develop to reach 10.5GW by 2012 (Gross GW) (Gross MW) Tier 1 Tier 2 Tier 3 Prospects Total Spain 373 479 1,702 2,250 5,281 8.0 GW Portugal 450 8 15 200 673 France 60 80 340 774 1,254 Belgium - - 37 25 62 Poland - 456 406
Slide 19: Clear competitive strengths oriented to maximize value creation
Clear competitive strengths oriented to maximize value creation Pure renewable player in a sector with positive trend for long term growth Strong track record on growth delivery and visible pipeline to feed superior growth Top quality load factors to deliver premium assets and higher revenues per MW
Slide 20: Delivering top-quality load factors
Delivering top-quality load factors… 2008 QoQ Load Factors 1Q09 Availability and Load Factors (%) (%) Avg. load factor for the year 1Q08 1Q09 40% US 38% 34% Availability 92% 94% 37% US Load factor (1) 38% 40% EU 31% 26% 28% Availability 97% 95% 24% 20% EU 20% Load factor (1) 31% 28% 1Q 2Q 3Q 4Q • St
Slide 21: Load factors above market levels
…which are continuously achieving above market levels, underlining the premium quality of EDPR’s assets Spain: EDPR Historical Load Factors (%) Premium of 2-3p.p. in the load factor Market average (1) 28% 29% 26% 27% 27% 26% 24% +10% in electricity output 2003 2004 2005 2006 2007 2008 +10% in Gross
Slide 22: In-house wind assessment team as structural competitive advantage
Strong in-house wind assessment team delivering a structural competitive advantage Expected load factors on current plus under Wind assessment is knowledge-based and construction assets (%)(1) difficult to replicate 1- Provides site selection criteria 2- Optimises layout for superior performance 35%
Slide 23: Clear competitive strengths oriented to maximize value creation
Clear competitive strengths oriented to maximize value creation Pure renewable player in a sector with positive trend for long term growth Strong track record on growth delivery and visible pipeline to feed superior growth Top quality load factors to deliver premium assets and higher revenues per MW
Slide 24: 1Q09 balanced portfolio and low risk profile
1Q09 benefited from a balanced portfolio and a low risk profile to face an unfavorable pricing environment Production Breakdown Avg. Selling Price (%; GWh) (€/MWh or $/MWh) 1Q09 1Q08 % + 13% Feed-in €97 €97 - Stable feed-in tariffs 28% Market + Premium €93 €97 -5% 88% in Spain was hedged or protect
Slide 25: Spanish revenues supported by hedging on power prices
Positive evolution on Spanish revenues supported by the hedging on power prices Hedging position in Spain for the 1Q09 Electricity revenues in Spain + Hedging (%) (€ million) Hedging effect +4% Fixed 73.9 Premium Hedged / sold fwd 71.2 76% (605GWh > €50/MWh) 8.1 + Market 13% Protected by a floor 12%
Slide 26: Actively managing a growing portfolio for low risk cash-flows
Actively managing a growing portfolio to provide visibility and low risk cash-flows Capacity Breakdown (%; EBITDA MW) Feed-in 16% 15% PT, FR EDPR is targeting to close PPA 37% contracts in US PPA (1) 39% US, BL, PN, BR Under negotiations / Short-listed: • 200MW already commissioned 10% • 200MW under
Slide 27: Expected positive trend on PPA prices
Expected positive trend on PPA prices supported by growing momentum on renewables EDPR: PPAs already closed for 2009 projects EDPR: PPAs under negotiation by market (Estimated Revenue (1) / MW) (MW) Commissioned Under Construction Pioneer Prairie I 198 Top Crop I 102 Under Construction Commissioned
Slide 28: Clear competitive strengths oriented to maximize value creation
Clear competitive strengths oriented to maximize value creation Pure renewable player in a sector with positive trend for long term growth Strong track record on growth delivery and visible pipeline to feed superior growth Top quality load factors to deliver premium assets and higher revenues per MW
Slide 29: Balanced turbine supply with top manufacturers
Balanced turbine supply with top manufactures at competitive prices EDPR current + contracted turbine portfolio EDPR Turbines Commitment until 2012 (%) (GW) Gamesa Under Constr. 1.2 Other 15% 16% Contracted 1.4 Acciona 7% Suzlon Not 2.7 8% Contracted Vestas 40% GE Total 5.3 14% • Balanced technologi
Slide 30: Managing turbine procurement to adapt capex strategy
Managing turbine procurement to adapt capex strategy to current environment Global Steel Price Index EDPR: capex cost evolution based on (Carbon steel index: April 94=100) contracted turbines (€m / MW) 300 Latest EDPR framework agreement 250 was negotiated before the sharp increase in commodities 1.
Slide 31: Capex savings improving projects' NPV
Already achieving capex savings and improving projects’ NPV Capex main inputs (%) Negotiation: Competitive process on the new projects construction cost to start construction BoP 30-20% driven by local market dynamics Action: Take advantage of the local dynamics in several markets Cost is driven by
Slide 32: Clear competitive strengths oriented to maximize value creation
Clear competitive strengths oriented to maximize value creation Pure renewable player in a sector with positive trend for long term growth Strong track record on growth delivery and visible pipeline to feed superior growth Top quality load factors to deliver premium assets and higher revenues per MW
Slide 33: Solid balance sheet to face ongoing growth
Solid balance sheet to face ongoing growth Enterprise Value Debt by Type Debt by Currency (%) (%) (%) 12% Variable (3) 59% USD 66% Equity (1) 88% Fixed Rate 4% Minorities (2) 11% TEI 41% EUR 19% Net Debt 1Q09 1Q09 1Q09 • 70% of Financial Debt was contracted through shareholder loans • Long-term fixe
Slide 34: Sources and uses of funds to support growth
Cash-flow generation, monetization of tax credits in US and shareholder loans as the main sources to support growth Sources of Funds Use of Funds • Cash-Flow • Capex: − Excluding capex already incurred • Shareholder Loans: under works in progress: €1.3bn − Contracted loans at an interest rate of 4.6
Slide 35: 1Q09 Results
: “ J 1Q09 Results
Slide 36: Delivering growth at all levels
Delivering growth at all levels Installed Capacity (Gross MW) EBITDA (€ million) +40% 5,165 +23% 154 126 3,706 1Q08 1Q09 1Q08 1Q09 Electricity Output (EBITDA GWh) Net Profit (€ million) +40% 2,845 2,032 +87% 50 27 1Q08 1Q09 1Q08 1Q09 35
Slide 37: Growth at all major P&L lines
EDPR delivered growth on a quarterly and annual basis at all major P&L lines Gross Profit EBITDA Net Income (€ million) (€ million) (€ million) vs. 1Q08 +27% vs. 1Q08 +23% vs. 1Q08 +87% vs. 4Q08 +10% vs. 4Q08 +17% vs. 4Q08 +9% 198 180 156 154 126 131 46 50 27 1Q08 4Q08 1Q09 1Q08 4Q08 1Q09 1Q08 4Q08
Slide 38: Strong increase in consolidated gross profit
Strong increase at the consolidated gross profit reflecting the US contribution and hedging in Spain Gross Profit: contribution by region Gross Profit: contribution by type (€ million) (€ million) +27% 198 +8 198 +42 -5 -6 156 +5 156 +40 (1) (1) Forex/ (2) 1Q08 EU US Other 1Q09 1Q08 1Q09 volumes
Slide 39: EBITDA growth in all regions
Managing to deliver EBITDA growth in all regions… EBITDA: contribution by region EBITDA Weight % Growth % (€ million) Spain (2) 39% +1% +23% 154 +31 -8 126 +5 Portugal 15% +1% Rest of Europe 3% +35% US 42% +89% (1) (1) 1Q08 EU US Other 1Q09 • On the back of a strong gross profit increase and control
Slide 40: EBITDA to Net Profit, strong Net Profit increase
…which, coupled with lower financial costs, resulted in a strong Net Profit increase of 87% EBITDA to Net Profit (€ million) YoY growth Net Debt Cost of Debt (€ million) (%) EBITDA 154 +23% (1) D&A 70 +54% 1Q08 2,630 1Q08 5.0 Financial 20 -46% -1,079 -40bps Costs Taxes & 1Q09 1,551 1Q09 4.6 15 n.d.
Slide 41: Conclusions
4 J Conclusions
Slide 42: EDP Renováveis to continuously deliver strong value creation
EDP Renováveis to continuously deliver on strong value creation Solid asset base with a low risk profile delivering stable cash flows and attractive returns + Growth up to 2012: rigorous capital allocation oriented to value creation 41
Slide 43: Annex
Annex
Slide 44: EDP Renováveis footprint in US wind market
EDP Renováveis footprint in US wind market Gross MW Iowa Illinois In operation In operation Pioneer Prairie I 198 Mkt Twin Groves I 198 PPA Minnesota Indiana Pioneer Prairie II 102 PPA Twin Groves II 198 PPA In operation Under Construction Under Construction Prairie Star 101 PPA Meadow Lake I 200 n.
Slide 45: US Stimulus Bill: tax incentive scheme election by project
US “Stimulus Bill”: election of each tax incentive scheme can be made on a project by project basis Tax Incentives: 1. PTC 2. ITC w/o cash grant 3. ITC w/ cash grant Cash from Department of Description Tax Credit Tax Credit Treasury Amount $21/MWh 30% of the initial capex Tax basis (Depreciation) 10
Slide 46: powered by nature
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