Cez As · PSECZ:CEZ
Cez As — ČEZ, a. s. — Investor Presentation (December 2004)
62 slides from Cez As's investor presentation, Dec 3, 2004
Slide 1: ČEZ Group Presentation
ČEZ GROUP PRESENTATION December 2004 Conceived by Controlling department, ČEZ, a. s. Closing date: 3 December 2004
Slide 2: Table of Contents
Table of Contents ČEZ Group Introduction 4 ČEZ Group Basics as of September 30, 2004 5 ČEZ Group – Selected Key Performance Indicators 6 ČEZ Group in Highlights 7 Definition of Consolidated Unit 8 The consolidation Group for Accounting Purposes 9 The Shareholders of ČEZ, a. s. as of June 11, 2004 10
Slide 3: Table of Contents - Continuation
Table of Contents - Continuation Balance of Electricity in the Czech Republic 33 ČEZ Group Electricity Supply Structure 34 ČEZ Group‘s Employees as of September 30, 2004 35 Czech Wholesale Prices‘ Development 36 Electricity Price is Undervalued 37 Current Prices of Electricity for Households 38 Comp
Slide 4: Agenda
Agenda ČEZ Group Introduction The Czech Power Industry Position of ČEZ Group Nuclear Power Operational and Financial Results 10.3A 15.09.20 ČEZ GROUP 4 4
Slide 5: ČEZ Group Basics as of September 30, 2004
ČEZ Group Basics as of September 30, 2004 Dominant power producer and supplier in the Czech Republic. ČEZ Group represents whole chain from coal and limestone mining, electricity generation to trade, distribution and maintenance. It also includes nuclear research, telecommunications and heat bus
Slide 6: ČEZ Group – Selected Key Performance Indicators
ČEZ Group – Selected Key Performance Indicators Market capitalization (ČEZ‘s shares) Added value Index 1,00 1.00 0,76 0.76 0,91 0.91 1,44 1.44 2,57 2.57 Index 1,00 1.00 1,08 1.08 1,04 1.04 1,29 1.29 180 35 160 30 140 25 120 CZK bn CZK bn 100 20 80 15 60 10 40 20 5 0 0 2000 2001 2002 2003 09/2004 200
Slide 7: ČEZ Group in Highlights
ČEZ Group in Highlights 1990 Separation of regional distribution companies, heat and other activities. 1992 ČEZ established as Joint-Stock Company. 1993 ČEZ, a. s. partially privatized (27%). Regional distribution companies established as joint-stock companies. 1995 Partial privatization of regional
Slide 8: Definition of Consolidated Unit
Definition of Consolidated Unit ČEZ Group includes 100 companies, from which five are regional distribution companies: SČE, SME, STE, VČE, ZČE. Děčín Hradec Králové Praha Ostrava Plzeň Brno České Budějovice Accounting Consolidated Unit consists of 31 companies, incl. ČEZ, a. s. and all five ČEZ Grou
Slide 9: The Consolidation Group for Accounting Purposes
The Consolidation Group for Accounting Purposes Consolidation rules ČEZ Group members: 100 companies Too large group for consolidation Consolidation group for accounting purposes: 31 companies Total assets 99.7%* of total assets of the consolidation group 24 fully consolidated 7 by equity method Net
Slide 10: The Shareholders of ČEZ, a. s. as of June 11, 2004
The Shareholders of ČEZ, a. s. as of June 11, 2004 National Property Fund (FNM) Institutional 67.61% Investors 23.00% Custodians 4.05% Individuals 5.34% Note: Custodians may manage portfolios of both individuals and institutional investors. Number of shareholders was searched out due to shareholders
Slide 11: ČEZ Group
ČEZ Group Subsidiaries of ČEZ, a. s. Affiliated companies of ČEZ, a. s. 100% CZK 150 m 100% CZK 40 m 68.88% CZK 1.258 bn I & C Energo a.s. Energetické opravny, a.s. ŠKODA PRAHA a.s. Maintenance Maintenance 100% CZK 18 m 51% CZK 4 m ČEZ ENERGOSERVIS, spol. s r.o. SIGMA ENERGO s.r.o. Raw Materials 64.
Slide 12: ČEZ Group on the Way Abroad
ČEZ Group on the Way Abroad Possible destinations: Bosnia and Herzegovina Bulgaria Poland Croatia Romania Macedonia Slovakia Moldova Ukraine 6.4 30.9.200 ČEZ GROUP 12 1
Slide 13: ČEZ, a. s., and Bulgaria
ČEZ, a. s., and Bulgaria Russe Elektrorazpredelenie Pleven Possessed (Pleven District Electric Power Distribution) distribution Internet: frodo.erp-pleven.bg companies Varna Elektrorazpredelenie Stolichno (Sofia Capital City Electric Power Distribution) Thermal Powe Internet: www.electro-sof.com Pla
Slide 14: ČEZ, a. s., and Romania
ČEZ, a. s., and Romania Electrica Moldova number of customers: 1.31 m electricity sold annualy: 4.1 TWh Other company selected as a preffered bidder. Electrica Oltenia number of customers: 1.36 m Source of map: Electrica SA, Bucharest, Romania electricity sold annualy: 6.8 TWh ČEZ, a. s., is taking
Slide 15: ČEZ, a. s., and Romania (part 2)
ČEZ, a. s., and Romania (part 2) Romanian electricity market will be fully opened effective July 1, 2007. There are lignite mines privatized together with power plants. Rovinari – mine Rovinari Turceni – mine Drăgoteşti and Jilţ Craiova II + Işalniţa – mine Berbeşti Rovinari Rovinari Berbeşti Jilţ T
Slide 16: Agenda
Agenda ČEZ Group Introduction The Czech Power Industry Position of ČEZ Group Nuclear Power Operational and Financial Results 10.3A 15.09.20 ČEZ GROUP 16 1
Slide 17: Power in the Czech Republic in Brief
Power in the Czech Republic in Brief 2002 2003 Installed capacity as of 31st December 16,311 MW 17,344 MW Demand for electricity 53,670 GWh 54,807 GWh Net electricity generation 70,393 GWh 76,659 GWh Gross electricity generation 76,348 GWh 83,227 GWh Electricity Demand Structure (2003) Avera
Slide 18: Energy Policy of the Czech Republic
Energy Policy of the Czech Republic Government has approved new policy on March 10, 2004. • 30 year horizon • priorities: independence, security, safety, and reliability • goals: • maximum effectiveness of (preferably domestic) resources utilisation • maximum respect to the environment • completion
Slide 19: Current Model of the Electricity Market in the Czech Republic
Current Model of the Electricity Market in the Czech Republic Regulatory Captive Competitive Office Customers environment protected by the law in generation Regulator guarantees equal conditions (regTPA) for all groups of market participants, controls charges for transmission and distribution ČEZ Tr
Slide 20: Liberalization of Electricity Market in the Czech Republic
Liberalization of Electricity Market in the Czech Republic 100 Customers with annual consumption: 90 Households 80 Protected (captive) customers 70 have not right to choose supplier Other consumers 60 (excl. households) % 50 Those with continuous consumption metering* 40 9 - 40 GWh 30 20 over 40 GWh
Slide 21: GDP and Electricity Consumption in the Czech Republic
GDP and Electricity Consumption in the Czech Republic 0 122.7 121.9 0 118.8 118.4 116.1 113.8 112.6 111.2 111.5 110.5 111.1 109.6 108,8 0 108.5 109.1 108.5 109.1 111.1 105.9 109.8 109.0 105.8 106.1 109.0 109.1 108.2 105.8 107.8 106.0 103.1 105.9 105.2 103.8 103.8 102.9 101.2 0 1994 1995 1996 1997 19
Slide 22: Electricity Demand in the Czech Republic Scenarios
Electricity Demand in the Czech Republic Scenarios 70,000 66,000 Reality (1993 – 2003) 62,000 ČEZ, a. s. scenario (2004 – 2010) 58,000 GWh 54,000 Expected average annual growth*: 50,000 1.5% (ČEZ scenario) 2.0% (upper limit of Czech Energy Regulatory Office scenario) 46,000 42,000 1993 1994 1995 199
Slide 23: Electricity Demand Structure in the Czech Republic
Electricity Demand Structure in the Czech Republic 1993 2003 2005* 18% 21% 19% 23% 22% 25% 5% 4% 5% % 2% 2% % 1% 1% 49% 50% 48% Industry Households Commerce and Business Services Transport Construction Agriculture and Forestry */ Estimation 1.8A 25.2.200 ČEZ GROUP 23 2
Slide 24: Scheme of the Power Supply in the Czech Republic in 2003
Scheme of the Power Supply in the Czech Republic in 2003 in GWh (index 03/02) Pumped Sale in power Other Transmission Import Export Distribution storage plant consumption grid losses network power plants premises losses 805 Households 552 32 344 3,127 19,738 4,146 14,508 (102.7%) (115.2%) (114.3%) (
Slide 25: Agenda
Agenda ČEZ Group Introduction The Czech Power Industry Position of ČEZ Group Nuclear Power Operational and Financial Results 10.3A 15.09.20 ČEZ GROUP 25 2
Slide 26: ČEZ, a. s. Mission Statement
ČEZ, a. s. Mission Statement …to meet demand for electricity and ancillary services of both traditional and newly acquired customers on the basis of successful market operation. ČEZ, a. s. will reliably supply safely and environmentally friendly produced electricity, using preferentially its own sou
Slide 27: ČEZ, a. s. Business Vision
ČEZ, a. s. Business Vision To ensure optimum level of electricity sales, enabling efficient use of production capacities, to be a respected, sought-after, reliable commercial partner and an attractive employer of skilled employees, and thus to ensure an attractive return on equity and an increase of
Slide 28: ČEZ Group's Share in the Installed Capacity of the Czech Republic
ČEZ Group‘s Share in the Installed Capacity of the Czech Republic 13,826 15,073 15,324 17,344 17,351 20,000 18,000 16,000 5,047 5,054 14,000 (29%) (29%) 4,074 5,178 3,591 MW 12,000 (27%) (34%) (26%) 10,000 8,000 12,297 12,297 6,000 10,235 (71%) (71%) 10,999 10,146 (74%) (73%) 4,000 (66%) 2,000 0 199
Slide 29: Installed Capacity of ČEZ Group
Installed Capacity of ČEZ Group 10,655 12,297 12,297 14,000 12,000 1,934 1,934 1,217 (16%) (16%) 10,000 (11%) 1,760 3,760 3,760 8,000 (70%) (30%) (30%) MW 6,000 7,677 4,000 (72%) 6,603 6,603 (54%) (54%) 2,000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Sept. 30, 2004 Coal power plants C
Slide 30: System of Management of ČEZ, a. s.
System of Management of ČEZ, a. s. GENERAL MEETING, SUPERVISORY BOARD board of directors internal audit internal audit administration and management CEO executive officers executive executive executive executive executive executive executive executive executive executive executive executive director
Slide 31: ČEZ Group Power Plants
ČEZ Group Power Plants SPÁLOV LEDVICE II, III ÚSTÍ n/Lab.- STŘEKOV POŘÍČÍ II LES KRÁLOVSTVÍ NOVÝ HRÁDEK TUŠIMICE II MĚLNÍK II, III DVŮR KRÁLOVÉ POČERADY nad LABEM PŘEDMĚŘICE PRUNÉŘOV I, II HRADEC KRÁLOVÉ nad LABEM MRAVENEČNÍK ŽELINA OBŘÍSTVÍ PŘELOUČ PASTVINY DĚTMAROVICE PRAHA PARDUBICE DLOUHÉ STRÁNĚ
Slide 32: ČEZ Group's Coal-fired Power Plants Emissions
ČEZ Group‘s Coal-fired Power Plants Emissions Index 2003/1993 800 SO2 8% 700 NOx 51% Fly-ash 5% 600 CO 22% 500 400 300 200 100 SO2 NOx Fly-ash 0 1993 1994 1995 1996 1997 1998 1999 2000 CO 2001 2002 2003 5.1A 2.3.20 ČEZ GROUP 32 3
Slide 33: Balance of Electricity in the Czech Republic
Balance of Electricity in the Czech Republic 90,000 Balance of import and export of the others 4,204 70,000 996 1,598 17 16,590 22,293 50,000 12,437 22,624 Gross production of the others GWh 30,000 46,445 48,008 50,842 10,000 Gross production of ČEZ, a. s. 60,934 -10,000 -2,121 -2,184 -18,727 -11,61
Slide 34: ČEZ Group Electricity Supply Structure
ČEZ Group Electricity Supply Structure 60 2% 4% 50 Hydro power plants 3% 40 35% 42% 27% Nuclear power plants TWh 30 70% Clean coal power plants 20 Coal power plants 61% 56% 10 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2.15A 26.2.200 ČEZ GROUP 34 3
Slide 35: ČEZ Group's Employees as of September 30, 2004
ČEZ Group‘s Employees as of September 30, 2004 7% 3% ČEZ, a.s. (6,615) 3% ČEZ Group 5% Severočeská energetika, a.s. (1,331) (17,998 employees) Severomoravská energetika, a.s. (1,600) 37% 5% Východočeská energetika, a.s. (1,434) Středočeská energetická a.s. (1,460) 7% Západočeská energetika, a.s. (1,
Slide 36: Czech Wholesale Prices' Development
Czech Wholesale Prices‘ Development CZK 997/MWh CZK 948/MWh CZK 905/MWh CZK 903/MWh CZK 850/MWh Year 2001 Year 2002 Year 2003 Year 2004 Year 2005 domestic electricity domestic electricity domestic electricity domestic electricity domestic electricity price of ČEZ, a. s. price of ČEZ, a. s. price of
Slide 37: Electricity Price is Undervalued
Electricity Price is Undervalued Total Comparison with other Average Price of Electricity 1992 - 2005E commodities CZK/ MWh 1992 - 2002 Nominal + 11% 1,200 Water 342% 1,000 800 Rent of 308% Real flats 600 - 52 % Basic 400 88% food 200 Oil 43% 0 92 93 94 95 96 97 98 99 00 01 02 03 20 4 E 0 05 19 19 1
Slide 38: Current Prices of Electricity for Households
Current Prices of Electricity for Households ČEZ Group member Non-member CZK/kWh 3.74 CZK 13,096 CZK/kWh 3.70 CZK/kWh 3.85 CZK/kWh 3.84 CZK 12,936 CZK 13,474 CZK 13,435 CZK/kWh 3.92 CZK/kWh 3.52 CZK 13,732 CZK 12,326 CZK/kWh 4.01 CZK/kWh 3.46 CZK 14,043 CZK 12,126 xample of price per kWh and annual
Slide 39: Components of Average LV Electricity Price
Components of Average LV Electricity Price 15.97% 2.05% 35.96% 11.40% 34.62% Electricity Distribution ČEPS (Ancillary Services and Transmission) VAT Other This slide expresses price for protected customers - both small businesses and households – for year 2004. 9_7A 10.3.2004 ČEZ GROUP 39 3
Slide 40: Position of ČEZ Group in the Czech Power Market
Position of ČEZ Group in the Czech Power Market ČEZ Group's Gross Electricity ČEZ Group‘s Final Production Share Consumption Share Other Other roducers suppliers 26.2% 42.5% 73.8% 57.5% Electricity Electricity ČEZ Group‘s performance in 2003 Supplied by Generated in Members of ČEZ ČEZ Group‘s Group
Slide 41: ČEZ's "Duhová energie" Product Offer for 2005
ČEZ’s “Duhová energie“ Product Offer for 2005 ČEZ, a. s. has started to sell its set of products for 2005 on domestic market in August 2004. This set is called “Duhová energie“ and consists of 15 products. The set consists of 10 standard products (whole year supply) and 4 additional modification
Slide 42: Public Offer of ČEZ's "Duhová energie" for 2005
Public Offer of ČEZ‘s “Duhová energie“ for 2005 Full year 2005 Winter week - maximum Capacity (MW) Capacity (MW) Initial Offer: CZK 940/MWh Actual Offer: CZK 905/MWh 1 10 19 28 37 46 55 64 73 82 91 100 109 118 127 136 145 154 163 Hours year = 8,760 hours Summer week - minimum residual monthly 5 days
Slide 43: Retail Products of ČEZ Group for Eligible Customers
RETAIL PRODUCTS OF ČEZ Group FOR ELIGIBLE CUSTOMERS Basic segments Product series Products • Flexi tarif • Dvoutarif Compound tariffs • Dvoutarif sezóna • Dvoutarif týden Customers with • Výkonový tarif continuous metering Single tariffs • Jednotarif • Jednotarif sezóna • Akumulace Business Heating
Slide 44: Agenda
Agenda ČEZ Group Introduction The Czech Power Industry Position of ČEZ Group Nuclear Power Operational and Financial Results 10.3A 15.09.20 ČEZ GROUP 44 4
Slide 45: NPP Temelín
NPP Temelín Type of reactor PWR - pressurized water reactor, as majority of reactor types around the world Basic description Based on the original Russian technical design with many improvements to achieve higher operational safety, e. g.: new instrumentation and control system new monitoring system
Slide 46: NPP Dukovany - Performance Results
NPP Dukovany - Performance Results Unplanned Capability Loss Factor 8 7 6 5 4 3 2 1 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 NPP Dukovany average World average World median This factor expresses share of unplanned losses to achievable production. NPP Dukovany belongs t
Slide 47: Insurance of the Nuclear Power Plants of ČEZ, a. s.
Insurance of the Nuclear Power Plants of ČEZ, a. s. Property damage insurance - NPP Dukovany since December 1998 - NPP Temelín since July 2000 Nuclear third party liability insurance (operational) - NPP Dukovany since January 1998 - NPP Temelín since July 2000 Nuclear third party liability ins
Slide 48: Nuclear Provisions – Nuclear Decommissioning
Nuclear Provisions – Nuclear Decommissioning Decommissioning of nuclear power plants Final disposal of radioactive waste and spent fuel Interim storage of spent nuclear fuel Decommissioning of nuclear power plants: - Amended Nuclear Act from 2002 defines obligations to create accounting provisions f
Slide 49: Nuclear Provisions – Fuel Storage
Nuclear Provisions – Fuel Storage Final disposal of radioactive waste and spent fuel: - contribution to the „nuclear account“ at the Czech National Bank - controlled by the state authority RAWRA (Radioactive Waste Repository Authority) - contribution stated by a government resolution in 1997 - CZK 5
Slide 50: Nuclear Provisions (part 3)
Nuclear Provisions (part 3) CAS nuclear provisions Interim storage CZK 26 / 22.5 per MWh Interim storage NPP Dukovany decommissioning CZK 406 m per year (CZK 155 m is tax deductible) of spent fuel NPP Temelín decommissioning CZK 265 m per year (CZK 125 m is tax deductible) Final storage CZK 50 per M
Slide 51: Safe and Reliable Operation of Nuclear Power Plants
Safe and Reliable Operation of Nuclear Power Plants Extension of NPP Dukovany lifetime by at least 10 years 9 Stable operation of Temelín NPP in operation 9 Possibility to build a new nuclear power plant political support strong investor public acceptance of nuclear energy Acceptability of Nuclea
Slide 52: Agenda
Agenda ČEZ Group Introduction The Czech Power Industry Position of ČEZ Group Nuclear Power Operational and Financial Results 10.3A 15.09.20 ČEZ GROUP 52 5
Slide 53: Basic Data of ČEZ Group
Basic Data of ČEZ Group I. – III. Q 2000 2001 2002 2003 2004 Installed capacity at end of period (MW) 10,146 10,146 11,146 12,297 * 12,297 * Electricity sales (GWh) 50,449 50,850 53,174 69,005 48,431 Number of employees at end of period 9,278 8,011 7,677 18,100 17,998 Capital expenditures 21.35 15.7
Slide 54: Income Statement in Brief (CZK bn)
Income Statement in Brief (CZK bn) I. – III. Q 2000 2001 2002 2003 2004 Revenues 52.43 56.06 55.58 84.82 73.06 Operating Expenses 39.71 41.38 44.32 77.32 57.93 Income before interest, taxes 22.10 24.04 22.98 25.11 28.66 and depreciation (EBITDA) Operating Income (EBIT) 12.72 14.68 11.25 7.50 15.13 O
Slide 55: Balance Sheet in Brief (CZK bn)
Balance Sheet in Brief (CZK bn) 30 Sep. 2000 2001 2002 2003 2004 Total Assets 222.26 229.03 231.47 274.14 280.85 Net Plant in Service 92.95 87.64 138.98 212.74 203.66 Construction Work in Progress 103.59 111.93 56.51 10.20 12.29 Shareholders‘ Equity 129.44 136.73 143.68 149.69 157.70 Long-term Liabi
Slide 56: Investment Program and Internally Generated Cash Flow by ČEZ Group
Investment Program (without financial investments) and Internally Generated Cash Flow by ČEZ Group 40 Distribution Net cash provided by 35 operating activities Other projects 35.8 Transmission system 30 28.8 Waste treatment 24.1 27.1 25 23.4 Performance 21.0 22.2 upgrade 22.3 21.7 21.3 CZK bn 19.5 E
Slide 57: Development of Long-term Liabilities of ČEZ Group
Development of Long-term Liabilities of ČEZ Group EUR USD USD 23% 38% EUR 24% 47% CZK CZK 80 39% 29% 70.9 Bonds, total 70 60.9 LT loans, total 60 28.7 Bonds, net of current 44.4 portion 50 24.2 43.1 Other LT debt, net of 40 8.4 10.6 current portion 30 18.9 Accumulated provision 15.5 for nuclear dec.
Slide 58: Credit Rating of ČEZ, a. s. and the Czech Republic
Credit Rating of ČEZ, a. s. and the Czech Republic Standard & Poor‘s Moody‘s A+ A1 A A2 A- A3 BBB+ Baa1 BBB Baa2 BBB- Baa3 BB+ Ba1 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Czech Republic - LT Foreign Currency Government Bonds' Rating ČEZ, a. s. 3.1A 2.12.20 ČEZ GROUP 58 5
Slide 59: Share Price Performance
Share Price Performance ČEZ, a. s.: Share Price Performance (January – September 2004) Prague Stock Exchange 260 240 Share price of ČEZ increased almost by 220 80% in I. - III. Q 2004. CZK Integrated ČEZ Group 200 is able to offer better services and products to its customers and at 180 the same
Slide 60: ČEZ Group is a Leading Corporate Name in Emerging Europe
ČEZ Group is a Leading Corporate Name in Emerging Europe One of the largest publicly traded utilities in Central and East European Countries Largest Central Europe-based energy chain One of the leaders in revenues and in profit in the Czech Republic First and one of the largest corporate bond issuer
Slide 61: What Do They Think of ČEZ?
What Do They Think of ČEZ ? FORBES EUROMONEY ČEZ belongs to World‘s leading companies list. ČEZ‘s corporate governance is the ČEZ is the 1,125th biggest company best in the Czech Republic according in the world and the biggest in the to EUROMONEY journal. Czech Republic. Awarded in February 2004. Li
Slide 62: ČEZ Group Internet Presentation
ČEZ Group Internet Presentation Home Page of ČEZ, a. s.: www.cez.cz/eng Home Page of ČEZ Group: www.skupina-cez.cz/eng Product Information: www.duhovaenergie.cz/eng www.sce.cz www.vce.cz www.ste.cz www.sme.cz www.zce.cz 10_10 30.9 ČEZ GROUP 62 6