Presentation. Results for the Hafslund Group 1st quarter Presentation to analysts Wednesday 15 May 2002

Transcription

1 Presentation Results for the Group 1st quarter 2002 Presentation to analysts Wednesday 15 May 2002

2 Contents: 1. Status for the group 2. Results 1st quarter Future challenges and strategy

3 Contents: 1. Status for the group 2. Results 1st quarter Future challenges and strategy

4 Many individual companies have been brought together to form a single group

5 Capital distribution Construction and security 2% Investments 10% Services 0% Power trading 8% Power production 14% Infrastructure 66%

6 From total integration to specialization Infrastructure Infrastructure Viken Nett AS Construction Construction and and security security Entreprenør AS Installasjon AS Services Services Siffer Service AS Shared services Customer centre

7 From total integration to specialization 2001: Wholly integrated companies with multiple functions full restructuring 2002: Specialized business areas and companies Infrastructure Infrastructure Viken Nett AS Construction Construction and and security security Entreprenør AS Installasjon AS Services Services Siffer Service AS Shared services Customer centre

8 The organization of the business Economics Economics and and finance finance ASA Corporate Corporate staff staff Power Power production production Infrastructure Infrastructure Power Power sales sales Construction Construction and and security security Services Services Investments Investments Prod. Norge Viken Nett Oslo Energi Entreprenør Siffer Service Invest Prod. USA Mjøskraft Tindra Sikkerhet Nodenet Venture Viken Fjernvarme Tele Elsikkerhet Fellestjenester Krafthandel Elverum Energiverk Nett Business area Økokraft Installasjon Whollyowned comp. Subsidiaries companies Part-owned > 50 % < 50 % IKT Drift Customer centre Accounting service Eiendom Invest Viken Eiendom

9 Contents: 1. Status for the group 2. Results 1st quarter Future challenges and strategy

10 Results 1st quarter 2002 Satisfactory margins and results in power sales and power trading High power output and high achieved power prices in Norway Stable operations in Infrastructure and Contracting Strong growth in sales of domestic alarm systems Satisfactory returns from the current asset investment portfolio Cash flow from operations: Operating profit: Pre-tax profit: NOK 564 mill. (+ NOK 113 mill.) NOK 257 mill. (+ NOK 89 mill.) NOK 145 mill. (+ NOK 132 mill.)

11 Power Generation 1st quarter 2002 Norway - High power output (+12% over the normal level) Norway - Higher achieved power prices (+6% compared with 1Q 2001) better than spot price Norway - Reduction in controllable costs (- 3% compared with 1Q 2001) Norway - Approaching the end of a ten-year investment and maintenance programme USA - Low hydropower generation (51% of normal) Biomass operating only in January NOK mill. 1st qtr 2002 *1st qtr Operating income EBITDA Operating profit Power output Norway (GWH) Achieved sales price Norway (øre/kwh) 17,4 16,4 14,8 Achieved increased price against spot price % 106 % 82 % 80 % Capital employed Returns capital employed * Pro forma results

12 Infrastructure & Contracting 1st quarter 2002 Stable underlying operations Reduction of investments NOK 53 mill. against NOK 88 mill. in 1st quarter 2001 NOK mill. in annual income limit in the period Operating profit includes contracting business Was split off as a separate company 1 May 2002 From 2nd quarter will be part of Contracting and Security business area NOK mill. 1st qtr 2002 *1st qtr 2001 *2001 Operating income EBITDA Operating profit Income from associate companies Profit before financing expenses Capital employed Returns capital employed * Pro forma results

13 Power Sales 1st quarter 2002 Satisfactory margins in the mass market Reduction of 6.4% in volume sold to the mass market milder winter Net access to 12,000 new customers in the mass market KanKan and James now concluded NOK mill. 1st qtr 2002 *1st qtr 2001 * 2001 Operating income EBITDA Operating profit/loss Number of customers in the mass market Volume sold to mass market (GWh) Capital employed Returns capital employed 1,8 % -3,9 % -10,7 % * Pro forma results

14 Security 1st quarter 2002 Strong organic growth in domestic alarm systems net increase of 39% in the number of domestic alarm system customers in 1st quarter invested NOK 20 mill Establishment of 26 new sales offices Growt target of domestic alarm system customers within the end of 2002 expected break even volume Annual earning per customer in the order of NOK Expected annual churn of 2% - existing customers are depreciated with 20% per year Security business will be part of the Contracting and Security business area from 2nd quarter 2002 NOK mill. 1st qtr st qtr Operating income EBITDA -7 5 Operating profit/loss Number of domestic alarm system customers Capital employed

15 Investments 1st quarter 2002 Satisfactory returns from power trading (NOK 10 mill in 1st quarter) Satisfactory returns from current asset investment portfolio Returns of 8.6% - 1.5% points better than OSEBX Gains on the sale of shares in Pelican (NOK 28 mill.) Net reduction in shares of NOK 110 mill per 1st quarter NOK 275 mill per 10 May. NOK mill. 1st qtr 2002 *1st qtr 2001 *2001 Operating income EBITDA Operating profit/loss Income from investment activities Profit/loss before financing expenses Returns from current asset investment portfolio 8,6 % -4,0 % -17,1 % Capital employed Returns capital employed 4,3 % -15,1 % * pro forma results

16 Current asset investment portfolio Returns (%) Value-adjusted result NOK mill. 's portfolio Oslo Stock Exchange st quarter ,0 6,3 8,6 7,1 43,3 62,2 18, ,1-17, st qtr 2002 Change unrealised gain/loss Realised result/ dividend + = Total result

17 Results divided into business areas 1st qtr st qtr 2001 Depreciations Operating Deprecia- Operating NOK mill. EBITDA prof./loss EBITDA tions prof./loss Power generation Infrastr. & Contract Power sales Security Investments Other

18 Profit and loss account for 1 st quarter 2002 NOK mill. 1st qtr 2002 * 1st qtr 2001 * 2001 Operating income 2,163 2,199 7,377 Operating expenses 1,695 1,809 6,094 EBITDA ,283 Depreciation Operating profit Income - share investments & associates (97) Income before financing activities Net financial expenses (208) (216) (835) Pre-tax profit (529) Taxes (77) (118) (93) Net profit 68 (105) (622) Majority share of net profit 64 (110) (619) Earnings per share (NOK) 0.33 (0.56) (3.17) No. of shares in , , ,223 * Pro forma results

19 Balance sheet as at 31 March March % 31 December % NOK mill of total 2001 of total Intangible fixed assets % % Tangible fixed assets % % Financial fixed assets % % Current assets % % Total assets % % Shareholders' equity % % Allocation commitments % % Long-term liabilities % % Current liabilities % % Total liabilities/equity % % Net interest-bearing debt

20 - Synergies Cost synergies When Organisation, general efficiency improvment NOK mill Invoicing and CRM NOK mill. 2/3 qtr.03 Localisation NOK mill 2003 Coordinated marketing NOK mill 2003 Income synergies Cross groupsales NOK mill 2003 Total synergies NOK mill

21 Pricing of power company in Europe - key figures price 5,8 3,4 3,2 3,1 2,8 2,3 2,3 2,1 1,9 1,7 1,6 1,2 1,2 0,9 Centrica RWE Scottish & South Espoon Sähkö Electrabel Suez Lyonnaise Graninge National Grid ENEL v/børsverdi 10 MRD E.ON Scottish Power i dag Fortum Kilde: First Securities Corporate Finance, april

22 140,00 130,00 120,00 110,00 100,00 90,00 80,00 70, Movements in share prices over the last two years (comp. with the Oslo Stock Exchange total index) OSEBX A B

23 Movements in share prices over the last two years (comp. with European Utility Index) Weighted average A og B European utilities Index

24 in a European perspective 30 % 25 % 20 % 15 % 10 % 5 % Centrica Electrabel E.ON RWE Expected percentage growth in EBITDA on the preceding year Centrica Electrabel E.ON RWE 0 %

25 Contents: 1. Status for the group 2. Results 1st quarter Future challenges and strategy

26 s vision and business concept Vision: will be one of the largest and most innovative energy and supply companies in the Nordic countries dedicated to providing customer-friendly solutions

27 s vision and business concept Business concept The creation of added value with a particular focus on the distribution and power sales business. The development of the potential that lies in the sale of security products and services to homes and companies. Power production will help to underpin the Group s role as player on the energy market

28 The value chain and s areas of focus Power production Construction/ Installation Infrastructure Power sales Traditional value chain

29 The value chain and s areas of focus Power production Construction/ Installation Infrastructure Power sales Alarm and security Other security products Finance and insurance Telecoms Traditional value chain Extended value chain

30 The value chain and s areas of focus today Power production Con- Struction/ Installation Infrastructure Power sales Alarm and security Other security products Finance and insurance Telecoms Traditional value chain Extended value chain

31 The value chain and s areas of focus Consolidation Power sales Alarm and security Other security products Finance and insurance Power production Con- Struction/ Installation Infrastructure Telecoms Traditional value chain Extended value chain

32 The value chain and s areas of focus s future development Con- Struction/ Installation Infrastructure Power sales Alarm and security Other security products Finance and insurance Power production Telecoms Traditional value chain Extended value chain

33 The value chain and s areas of focus Consolidation Power sales Alarm and security Other security products Finance and insurance Power production Con- Struction/ Installation Infrastructure Telecoms Focused growth Traditional value chain Extended value chain

34 Key strategic challenges Consolidation and integration exploit synergies create a cost-effective organization exploit inter-group business opportunities Focused growth develop new areas of growth capitalize on the customer base and infrastructure sell products/services where enjoys trust or has a potential for trust Realisation of non-core business re-deployment of capital reduction in debt equity ratio and capital invested Growth without an increase in capital invested

35 The objectives of the Group in the medium to long term A market value of NOK 10 billion by 2004 Improved solvency ratio (30 percent) The most profitable of the major grid companies A large and profitable Nordic power sales outlet The most profitable energy producer on the Glomma River An exciting player within security-based products/services for the home

36 Back up

37 Financial investment portfolio NOK mill. 31 Dec March 2002 Changes Market value Unrealised profit/loss Share of portfolio abroad 7 % 6 % - 1% Short-term share investments per sector Offshore 15 % Olje 14 % IT 14 % Telekom. 1 % Shipping 18 % Finans 14 % Forbruksvarer 8 % Konsumentvarer 9 % Materialer 7 % Offshore, Telekom., Finans, 105,841,180 IT, Olje, Shipping, Forbruksvarer, Konsumentvarer, Materialer, Portfolio as at 31 Dec Portfolio as at 31 Mar

38 Current asset investment portfolio NOK mill 31 March 2002 Cost price Market value Norsk Hydro Gjensidige NOR Sparebank Frontline Norske Skog PanFish SAS Star Reefers Inc Intellinet RCCL Orkla Miscellaneous Ureal. gain NOK 15 mill

39 The Group Venture investments NOK mill. 31 March 2002 Book value Holding REC % Cogen % Policom % Wireless Reading Systems % Scan Wafer 8 1 % Miscellaneous

40 The Group Other energy-related investments NOK mill. 31 March 2002 Book value Holding Arendal Fossekompani % Scudder Latin Amerika Fond % Pemco Group % Natsource 17 5 % Fauske Lysverk % Energiunion AG 6 48 % Moldekraft 3 6 % Miscellaneous

41 The Group Other long-term investment shares NOK mill. 31 March 2002 Book value Holding Viken Eiendom % Tensil % Others