Ignitis Grupe Ab · OMXVSE:IGN1L
Ignitis Grupe Ab — H1 2021 Earnings Presentation
43 slides from Ignitis Grupe Ab's earnings presentation, Aug 31, 2021
Slide 1: Investor presentation H1 2021
Investor presentation H1 2021 | 31 August 2021
Slide 2: Disclaimer
Investor presentation Contents > Disclaimer This presentation contains certain forward-looking statements, including but not limited to, the statements and expectations contained in the ‘Outlook‘ section of this presentation. Statements herein, other than statements of historical fact, regarding our
Slide 3: Agenda
Contents > Agenda Overview 4 Financial highlights 11 Outlook 18 Annexes 22 3 / 22
Slide 4: Overview
Contents > Overview 4 / 22
Slide 5: Highlights H1 2021
Investor presentation / Overview Contents > Highlights H1 2021 Green Generation driven growth Performance Strategy Sustainability & governance Growth across all business segments, driven by Green Green Generation installed capacity and pipeline increase ESG excellence driven MSCI rating upgrade Gene
Slide 6: Networks
Investor presentation / Overview Contents > Networks Higher RAB, positive temporary effect from increase in volumes Highlights Adjusted EBITDA APM RAB / WACC EURm EURm / % − Delivered adjusted EBITDA growth, driven by: − higher distributed volumes as a result of colder weather 3 500 5.28% 5.34% comp
Slide 7: Green Generation
Investor presentation / Overview Contents > Green Generation Installed capacity increase and higher electricity prices driven better performance Highlights Adjusted EBITDA APM Green Generation installed capacity EURm MW − Showcased overall better performance due to: − positive impact of Kaunas CHP a
Slide 8: Green Generation pipeline
Investor presentation / Overview Contents > Green Generation Pipeline increase to facilitate future growth Highlights Green Generation pipeline update On track Deviation Expected − Q3 Green Generation pipeline increased by ~ 160 MW COD as a result of an acquisition of 3 early-stage wind farm develop
Slide 9: Flexible Generation
Investor presentation / Overview Contents > Flexible Generation Growth driven by commercial activities, supported by favorable market conditions Highlights Adjusted EBITDA APM Flexible Generation installed capacity EURm MW − Higher clean spark spread led to increased 1 200 1,055 1,055 electricity ge
Slide 10: Customers & Solutions
Investor presentation / Overview Contents > Customers & Solutions YoY growth driven by gas activities Highlights Adjusted EBITDA APM Retail sales volumes EURm TWh − Adjusted EBITDA growth driven by: − temporary positive effect on gas performance as a result 13.00 5.3 +7.2 of gas inventory revaluatio
Slide 11: Financial highlights
Contents > Financial highlights 11 / 22
Slide 12: Adjusted EBITDA and net profit
Investor presentation / Financial highlights Contents > Adjusted EBITDA and net profit Growth driven by launch of new Green Generation assets EBITDA, Adjusted EBITDA APM Net profit, Adjusted net profit APM EURm EURm 180.0 169.9 168.4 +30.5% 90.0 77.7 +42.3% 160.0 149.7 80.0 71.9 140.0 129.0 70.0 60.
Slide 13: Development of Adjusted EBITDA
Investor presentation / Financial highlights Contents > Development of Adjusted EBITDA Growth across all business segments Adjusted EBITDA bridge APM Chart Title EURm 7.2 2.5 168.4 14.2 2.5 5.3 13.0 Customers Other 14.5 129.0 Flexible 12.0 Green Generation & Solutions 37.7 Networks Generation 23.5 9
Slide 14: Returns
Investor presentation / Financial highlights Contents > Returns Higher Adjusted ROCE and Adjusted ROE mostly as a result of higher Adjusted EBITDA LTM ROCE LTM, Adjusted ROCE LTM APM ROE LTM, Adjusted ROE LTM APM % % 10.0 9.1 10.0 9.0 9.3 +1.2 pp 9.0 8.5 +2.6 pp 9.0 8.1 8.0 8.0 7.7 7.0 5.9 7.0 6.0 5
Slide 15: Investments
Investor presentation / Financial highlights Contents > Investments Lower investments in the Green Generation segment driven by major projects being completed Investments APM Key drivers EURm Green Generation − Investments were lower by 117.6 EURm compared to H1 2020 200.0 187.3 − The main reasons f
Slide 16: Free cash flow and Net debt
Investor presentation / Financial highlights Contents > Free cash flow and Net debt EBITDA growth and lower investments led to improved FCF and leverage metrics FCF APM Net debt APM EURm EURm 80.0 60.00% 70.2 +292.2% 700.00 70.0 600.3 571.6 50.00% 60.0 600.00 (4.8%) 50.0 500.00 40.00% 400.00 40.0 30
Slide 17: Leverage metrics
Investor presentation / Financial highlights Contents > Leverage metrics Net debt declined and leverage metrics improved Net debt development APM EURm 31 Dec 2020 FFO Investments EPSO-G partial Investments Dividends paid Buy-out of Change in NWC Other 30 Jun 2021 covered by loan repayment minority s
Slide 18: Outlook
Contents > Outlook 18 / 22
Slide 19: Guidance 2021
Investor presentation / Outlook Contents > Guidance 2021 Strong H1 2021 reiterating our guidance Adjusted EBITDA APM EURm 300-310 291.6 Main drivers − Installed capacity increase: − launch of Vilnius CHP‘s WtE unit in Lithuania; Unchanged − full-year result of Kaunas CHP which was launched in August
Slide 20: Key messages
Investor presentation / Outlook Contents > Key messages Adjusted EBITDA growth across all business segments, driven by Green Generation installed capacity increase (due to launches of Kaunas CHP and Vilnius CHP’s WtE unit) Adjusted EBITDA of 300-310 EURm outlook reiteration for 2021, representing 3-
Slide 21: Q&A
Contents > LT: +370 5 214 0081 UK: +44 20 7192 8338 Q&A US: +1 (646) 7413-167 Event Plus Passcode: 5082919 For questions, please press * 1 21 / 22
Slide 22: Annexes
Annexes ignitis se group ae 22122
Slide 23: Balance sheet
Investor presentation / Annexes Contents > Balance sheet EURm 31 June 2021 31 December 2020 EURm 31 June 2021 31 December 2020 ASSETS EQUITY AND LIABILITIES Non-current assets Equity Issued capital 1,659 1,659 Intangible assets 211 176 Reserves 331 270 Property, plant and equipment 2,590 2,560 Retai
Slide 24: Income and cash flow statements
Investor presentation / Annexes Contents > Income and cash flow statements Income statement Cash flow statement EURm H1 2021 H1 2020 (restated)1 EURm H1 2021 H1 2020 Revenue from contracts with customers 716 588 Cash flows from operating activities Other income 22 3 Total revenue and other income 73
Slide 25: Reconciliations
Investor presentation / Annexes Contents > Reconciliations Reconciliation of Adjusted EBITDA EURm (1.5) EURm EBITDA Cash effect of new connection Temporary fluctuations in fair Temporary regulatory Other Adjusted EBITDA points and upgrades value of derivatives differences Reconciliation of Adjusted
Slide 26: EBITDA and Net profit adjustments
Investor presentation / Annexes Contents > EBITDA and Net profit adjustments EBITDA adjustments Net profit adjustments EURm EURm H1 2021 H1 2020 ∆ ∆% H1 2021 H1 2020 ∆ ∆% EBITDA APM 169.9 149.7 20.2 13.5% Net profit 48.8 71.9 (23.1) (32.1%) Adjustments Adjustments Temporary regulatory differences (1
Slide 27: Debt overview
Investor presentation / Annexes Contents > Debt overview Debt maturity schedule EURm 300.0 300.0 300.0 131.0 127.5 18.5 21.3 22.8 18.7 17.6 16.7 15.5 17.7 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030+ Loans Bonds Effective interest rate Average time to maturity Outstanding amount as of 30 June
Slide 28: Outstanding bonds
Investor presentation / Annexes Contents > Outstanding bonds Coupon Yield Type ISIN Face value Tenor Maturity Listing (annual) (30 June 2021) Green Bonds Luxembourg Stock Senior XS16465305 Exchange, NASDAQ 300 EURm 2.000% 0.326% 10-year 14 July 2027 unsecured 65 Vilnius Stock Exchange Luxembourg Sto
Slide 29: Share price and GDR performance
Investor presentation / Annexes Contents > Share price and GDR performance Price outperforming the Euro Stoxx Utilities benchmark Price development (indexed at 100) H1 2021 115 TSR: 3.0% (1.9%) (5.3%) Combined 110 Min 20.0 19.5 19.5 105 Max 22.1 22.4 22.4 100 VWAP 20.6 20.3 20.5 95 Closing 20.8 20.6
Slide 30: Capacity mix overview and potential synergies
Investor presentation / Annexes Contents > Capacity mix overview and potential synergies Installed capacity, MW Generation, TWh 14% 1,055 1,001 76 1% Electricity generated vs. 49% supplied (TWh) H1 0.95 2,132 MW 2020 TWh 37% Green share – 63% Green Generation – 51% Electricity >10x gap between suppl
Slide 31: Diversified Green Generation portfolio
Investor presentation / Annexes Contents > Estonia Diversified Tuuleenergia Operating Capacity Capacity Expected Subsidy Subsidy End of Green Generation Name Kruonis PSHP (MWe) 900 (MWth) – COD 1992–19981 scheme – (EUR/MWh) – subsidy – Kaunas HPP 101 – 19592 – – – portfolio Kaunas CHP Vilnius CHP‘s
Slide 32: Assets under construction
Investor presentation / Annexes Contents > Assets under construction Pomerania WF Mažeikiai WF One of the largest onshore wind farms in Poland The first wind farm without subsidies in the portfolio Status Approaching COD Status Under construction Expected Expected Q3 2021 2023 COD COD Capacity 94 MW
Slide 33: Assets under development
Investor presentation / Annexes Contents > Assets under development Polish solar portfolio I Moray West offshore wind project The first sizeable PV project in the portfolio Learning the technology Status SPA signed Status Preparatory works Expected COD 2021–2023 Expected COD 20253 Capacity 800–950 M
Slide 34: Assets under preparation
Investor presentation / Annexes Contents > Assets under preparation Kruonis PSHP expansion Lithuanian offshore WF I Expansion of the largest PSHP in the region First offshore wind project in Lithuania Preparing for the auctions which Status Preparatory works Status are expected to be held in 2023 Ex
Slide 35: Kruonis PSHP expansion business case
Investor presentation / Annexes Contents > Kruonis PSHP expansion business case1 Key metrics Rationale − New hydropower unit is expected to provide Procurement planning primarily FRR reserve services for TSO Status (FID has not been taken) − From 2025, the price for ancillary services is expected to
Slide 36: Home markets offer significant opportunities
Investor presentation / Annexes Contents > Home markets offer significant opportunities Structural electricity deficit in Lithuania Green energy installed capacity evolution On average only ~31% of electricity consumption was covered by in Ignitis Group’s markets (GW)1 national generation over 2018-
Slide 37: Disciplined investment policy to ensure value-creating growth
Investor presentation / Annexes Contents > Disciplined investment policy to ensure value-creating growth Expected investments Target return build-up 800–1,000 EURm investments into Green Generation during 2021–2024 to reach 1.8–2.0 GW installed capacity in 2024. High single - low double digit Entry
Slide 38: Networks operating model
Investor presentation / Annexes Contents > Networks operating model Largest Network in the Baltics, with a natural monopoly in both electricity and gas distribution servicing 1 >99.3%1 of the Lithuanian market Allowed revenue cap Regulated WACC & regulatory periods Allowed revenue Approved WACC Elec
Slide 39: Networks regulated WACC inputs
Investor presentation / Annexes Contents > Networks regulated WACC inputs Electricity Gas Parameter Old methodology New methodology 2022 2022 Based on market – the average Lithuanian Risk free rate 1.42% 2.32% government bond yields at issue of the last 10 No changes years with a maturity not less t
Slide 40: Industry overview
Investor presentation / Annexes Contents > Industry overview Electricity generation, TWh Electricity consumption, TWh Average hourly wholesale electricity spot price, EUR/MWh 12.7% 7.2% Electricity 300% 96.8% 91.1% 88.7% 104.7% 58.4% 68.7 77.4 80.7 86.5 2.8% 7.7% 1 62.4 65.8 55.5 55.6 53.9
Slide 41: Glossary
Investor presentation / Annexes Contents > Glossary # Number FCF Free Cash Flow % Per cent FFO Funds from operations EBITDA after eliminating items, which are non-recurring, and/or non-cash, and/or FI Finland Adjusted EBITDA related to other periods, and/or non-related to the main activities of the
Slide 42: Glossary
Investor presentation / Annexes Contents > Glossary Kruonis PSHP Kruonis Pumped Storage Hydroelectric Plant PPA Power purchase agreement kW Kilowatt RAB Regulated asset base LNG Liquefied natural gas ROCE Return on Capital Employed LT Lithuania ROE Return on equity LTM Last twelve months ROI Return
Slide 43: More about Ignitis Group IR contacts
Contents > More about IR contacts Ignitis Group IPO related information Ainė Riffel-Grinkevičienė Reports & Presentations Investor Relations Officer Strategy [email protected] Sustainability Investor Calendar