Fixed income investor presentation

Transcription

1 Fixed income investor presentation Positioning Alpiq for the future and strengthening of the capital base April 2013

2 Agenda 1 Alpiq Group overview Financial review / Q update Repositioning Capital measures and fixed income investment considerations Q&A

3 Alpiq Group overview (1/2) Alpiq at a glance Founded in 2009 through merger of Atel and EOS Leading Swiss power company and energy service provider with focused European reach (present in more than 20 European countries) Specialises in electricity generation, sales and trading, as well as energy services responsible for around one-third of Switzerland s electricity production Power production of c. 20 TWh (58% in CH) 2012 consolidated net revenue of approx. CHF 12.7bn and operating EBITDA of CHF 3 990m Around 8,000 employees Listed on SIX Swiss Exchange with a market cap of CHF 3.2bn Public sector related core shareholder structure Key financials CHF million Q Net revenue 13,984 12,722 2,429 EBITDA 1 1, Margin 8.6% 7.8% 9.4% EBIT Group profit Net debt 4,652 3,990 3,469 Current shareholder structure EOS Holding 31.38% 2.00% 0.91%10.15% EDFAI 2.12% EBM 2.09% 5.60% 7.12% 13.63% 25.00% 1 EBITDA/EBIT after reclassification of share of profit of associates 2 Incl. non-controlling interests 3 Restated for consolidation of Kraftwerke Gougra AG and change in IAS ,4 4 Results from operations before exceptional items Alpiq Holding AG April EBL Canton of Solothurn EnBW AIL IB Aarau WWZ Other (free-float)

4 Alpiq Group overview (2/2) Key operating metrics 2012 Generation capacity (6,441 MW) New renewables Hydro 43% Generation portfolio (19,988 GWh) New renewables 3% Nuclear 12% Generation 5% Conventional thermal Hydro Power Generation 40% Renewable Energy Sources Thermal Power Generation Nuclear Power Generation Commerce & Trading Geographic footprint International power plants Hydro 28% Energy sales Nuclear 29% Conventional thermal 40% Asset Optimization Portfolio Optimization CEE Market Switzerland Market International International 56% Trading 1% Switzerland 43% Energy Services Core Markets AIT market presence FR B CH DE D IT CZ AT PL SK HU SI HR BA CS RO EAT market presence Alpiq Holding AG April

5 Alpiq is well positioned to benefit from future market development Leading Swiss power generation company with strong local roots and focused European presence Highly flexible, diversified generation portfolio with no or low CO 2 emissions which is expected to benefit from increasing need for flexibility caused by intermittent renewable generation sources Number 1 Central and Eastern European cross-border trading business Growth potential in Energy Services from increasing focus on energy efficiency (political energy efficiency targets) Strong management and operational teams with long-standing expertise across the power sector Alpiq Holding AG April

6 Agenda 1 Alpiq Group overview Financial review / Q update Repositioning Capital measures and fixed income investment considerations 5 Q&A

7 Q results update 1 CHF million Q FY2012 Q Q vs. Q vs. FY2012 Net revenue 3,412 12,722 2, % - EBITDA % - Margin 6.5% 7.8% 9.4% EBIT % - Group profit % - Net debt - 3,990 3, / -13% Net debt / EBITDA - 4.0x 3.5x x 3 Strong contribution from hydro asset optimisation and larger hydro volumes Higher contribution from new renewables due to better wind conditions and the full consolidation of two new production parks in Italy in H Contribution of the restructuring program with reduction in costs and closure of nonprofitable activities Better results of the international activities (wholesales and production for grid services) Transfer of high-voltage grid to swissgrid Lower prices on the market Net debt reduction due to closing of divestments in Q1 and positive operational performance Note: Results from operations before exceptional items 1 Restated for consolidation of Kraftwerke Gougra AG and change in IAS 19 2 Incl. non-controlling interests 3 12 months rolling Alpiq Holding AG April

8 1 Results FY 2012 P&L statement before exceptional items CHF million Chg. Net revenue 13,984 12, % Own work capitalised Other operating income Total revenue and other income 14,189 12, % Energy and inventory costs -11,497-10,538 Employee costs Plant maintenance costs Other operating expenses EBITDA 2 1, % Depreciation, amortisation and impairment EBIT % Share of results of associates / joint ventures Finance expense Finance income Profit/(loss) before income tax % Income tax Group profit/(loss) incl. non-controlling interests % Main drivers 2012 compared to 2011: + Hydro CH, optimisation of asset park International due to flexible portfolio + Improved positioning of CEE operations + Positive cost effect from Eiger+ restructuring program - Expiration of profitable longterm contract, loss of earnings from Hidroelectrica and EVT - Lower price level (trading of production CH), temporary outage of KKW Leibstadt - Higher production costs of nuclear plants, higher maintenance costs in hydro production and CCGTs 1 According to FY2012 annual report; not restated for consolidation of Kraftwerke Gougra AG and change in IAS 19 Alpiq Holding AG 2 EBITDA/EBIT after reclassification of share of profit of associates April

9 1 Results FY 2012 Balance sheet after impairments CHF million Chg. Cash and cash equivalents 1,204 1, % Other current assets 2,935 3, % Property, plant and equipment 4,900 3,476-1, % Other non-current assets 6,569 5,029-1, % Assets held for sale 1,838 1, % Total assets 17,446 14,784-2, % Equity 6,205 5,010-1, % Financial liabilities 5,856 5, % Other liabilities 4,657 4, % Property, plant, equipment and other current assets affected by impairment charges and renewal investments Increase other current assets due to reintegration of formerly deconsolidated EAT Assets held for sale" affected by disposal EVT/EAT, Edipower, A2A and by addition of Kladno/Zlin, SES, Repower and Romande Energie Other liabilities reduced due to reduction of liabilities such as long-term power purchase agreements and deferred taxes Liabilities held for sale % Total equity and liabilities 17,446 14,784-2, % 1 According to FY2012 annual report; not restated for consolidation of Kraftwerke Gougra AG and change in IAS 19 Alpiq Holding AG April

10 1 Results FY 2012 Cash flow statement CHF million EBIT Interest paid and income tax paid Depreciation and amortisation 1,229 2,128 Other effects Changes in working capital Net cash flows from operating activities Divestments Investments / acquisitions Change in term deposits Net cash flow used in investing activities Dividends paid Change in borrowings / FX effects Cash flows (used in) / from financing activities / FX effects Change in cash According to FY2012 annual report; not restated for consolidation of Kraftwerke Gougra AG and change in IAS 19 Alpiq Holding AG April

11 Agenda 1 Alpiq Group overview Financial review / Q update Repositioning Capital measures and fixed income investment considerations 5 Q&A

12 Alpiq s answers to a challenging market environment Macro environment Impact on power markets Impact on Alpiq Alpiq's answer Peaking of European sovereign debt crisis Continued economic slowdown and weak GDP forecasts across Europe Strong Swiss Franc Fukushima Weak outlook for energy demand development Massive subsidies for new renewables Significant overcapacities in production Low CO2 prices Political uncertainty and new regulations Low power prices and narrower spreads Impairment of generation assets Expiry and termination of long term contracts Increased indebtedness / challenges to credit profile 1 Repositioning of the Group 2 Organisational realignment 3 Restructuring program 4 Divestment program 5 Capital measures Alpiq Holding AG April

13 1 Repositioning of the Group Short-term objectives Drive operational results and target commitments in an uncertain environment Continue to streamline organisation and business model in order to reduce complexity Streamline processes, standardise systems and reduce number of tools Mid-term objectives Leverage attractive generation mix - Significant and attractive generation portfolio - Integrated portfolio optimisation for Western Europe - Anticipation and capturing of new market opportunities Strengthen position in profitable markets - No.1 international wholesaler in CEE with largest and geographically most diverse contract portfolio - Shift from standard sales businesses to higher margin origination activities Grow Energy Services business - No.1 Energy Services provider in CH (building technologies and management, traffic infrastructure technologies) - Growth potential due to Swiss Energy Strategy Repositioning of Plant Technologies (EAT) according to market needs Alpiq Holding AG April

14 2 Organisational realignment New lean structure along the value chain effective February 2013 Generation Commerce & Trading Energy Services Alpiq operates a significant, diversified and highly flexible generation portfolio Portfolio consisting of hydro, nuclear, thermal and renewable assets in Switzerland and across other attractive markets in Europe 6,441 MW installed / 19,988 GWh in 2012 Pools market access for energy business of entire Group Commercialisation of power portfolio including to Swiss shareholders Optimisation of Alpiq s generation portfolio in Switzerland and across Europe No.1 position in Central Eastern Europe in cross-border trading No.1 in Switzerland in building services, traffic infrastructure technologies and energy efficiency Established market position in Germany in power and industrial plant technologies Division financials (FY2012) 1 Revenues: CHF5,494m Op. EBITDA: CHF953m EBIT: CHF584m Revenues: CHF5,575m Op. EBITDA: CHF28m EBIT: - CHF10m Revenues: CHF1,992m Op. EBITDA: CHF118m EBIT: CHF83m Simplified and streamlined organisation and business model positions Alpiq well in the current market to benefit from future opportunities 1 New divisional structure effective as of 1 February 2013; pre Group consolidation effects; restated for consolidation of Kraftwerke Gougra AG and change in IAS 19; results from operations before exceptional items Alpiq Holding AG April

15 3+4 Restructuring and divestment programs 2012 (Eiger +) Restructuring program Measures leading to additional CHF 50m p.a. sustainable cost savings implemented (in addition to CHF 50m p.a. achieved from topiq ) Headcount reduction of 470 FTE FTE in Switzerland FTE in non-swiss entities Exit from non-profitable sales activities in Germany, Italy, Spain and Scandinavia Business model with less risk and complexity implemented Total cash effect from divestments of CHF 605m in 2012 Acceleration of cost reduction measures to achieve additional CHF 100m cost savings p.a. as of 2015 (leading to total expected savings of CHF 200m p.a. compared to 2011) Total divestment program of c. CHF bn in 2012 and Cash inflow achieved in Q of CHF 472m - Divestment evaluation of SES and Alpiq Generation (CZ) ongoing Completed divestments of non-core activities Sale of 20% in Edipower Sale of energy service division (EVT) Sale of 15% pump storage asset Nant de Drance to IWB Sale of 5% in A2A Sale of 6.43% in Romande Energie (1 st tranche) Transfer to swissgrid (1 st tranche shareholder loan) Sale of 24.6% in Repower not 200m 203m disclosed 68m CHF 78m CHF 223m CHF 171m Decisive measures implemented to adapt to new environment and reduce costs Alpiq Holding AG April

16 5 Capital measures supported by Swiss core shareholders Measures taken and proposed Swiss core shareholders (EOS and majority of KSM) have signed an agreement to subscribe for CHF 366.5m perpetual subordinated loan notes ( Shareholder Hybrid ) In addition, intention to issue more than CHF 400m perpetual subordinated notes in the capital market ( Public Hybrid ) Structured to achieve 100% equity treatment under IFRS and 50% equity treatment from credit research analysts Shareholder Hybrid deeper subordinated than Public Hybrid Rationale Strengthening of balance sheet creates flexibility to - support ongoing repositioning and divestments without undue financial constraints and preserve investment grade rating - capture business opportunities in Alpiq s core business in the medium and longer term Create flexibility to capture medium and long-term business opportunities by reducing net debt and preserving investment grade rating Alpiq Holding AG April

17 Agenda 1 Alpiq Group overview Financial review / Q update Repositioning Capital measures and fixed income investment considerations 5 Q&A

18 Alpiq s investment case for fixed income investors 1 Diversified business portfolio well-positioned to benefit from future market development 2 Substantial support from Swiss principal shareholders, contributing CHF 366.5m hybrid capital to strengthen Alpiq's capital base 3 Liquid balance sheet, with c. CHF 1.9bn cash and cash equivalents as of Q1 2013, and staggered debt maturity profile in coming years 4 History of consistent operating cash generation and commitment to sustainable dividend policy Alpiq Holding AG April

19 1 Alpiq well positioned to benefit from future market development Leading Swiss power generation company with strong local roots and focused European presence Highly flexible, diversified generation portfolio with no or low CO2 emissions which is expected to benefit from increasing need for flexibility caused by intermittent renewable generation sources Number 1 Central and Eastern European cross-border trading business Growth potential in Energy Services from increasing focus on energy efficiency (political energy efficiency targets) Strong management and operational teams with long-standing expertise across the power sector Alpiq Holding AG April

20 2 Key terms of Shareholder Hybrid and Public Hybrid Please refer to the preliminary prospectus for the full terms and conditions Features Perpetual Subordinated Loan Notes ( Shareholder Hybrid ) Perpetual Subordinated Notes ( Public Hybrid ) Issuer Alpiq Holding AG Alpiq Holding AG Amount CHF millions CHF [ ] millions Denomination CHF 500,000 CHF 5,000 Maturity Perpetual Perpetual Issuer call Special event redemption Redeemable at option of the Issuer (i) after repayment of the Public Hybrid or (ii) at any time through an exchange into shares at an exchange ratio to be agreed upon by Alpiq and the holders of the Shareholder Hybrid Issuer call at par upon occurrence of an (i) Accounting Event (ii) a Tax Event or (iii) a Capital Event Redeemable at option of the Issuer at year 5.5 and on any interest payment date thereafter Issuer call at par upon occurrence of (i) an Accounting Event, (ii) a Tax Event, (iii) a Capital Event or (iv) in the event that less than 20% of the initial principal amount is outstanding Interest rate Fixed rate of [ ]% until year 10 Reset at year 10 and every tenth year thereafter to a rate equal to the prevailing 10 year CHF mid-swap rate + initial credit spread + Step up Fixed rate of [ ]% until year 5.5 Reset at year 5.5 and every fifth year thereafter to a rate equal to the prevailing 5 year CHF mid-swap rate + initial credit spread + Step up Coupon step-up Step up of 25 bps at year 10 and a further 75 bps at year 30 Step up of 25 bps at year 10.5 and a further 75 bps at year 30.5 Deferral of interest Optional interest cancellation Non-cumulative If issuer elects not to make an interest payment, it will not propose to pay a dividend on its share capital at the next AGM If shareholders overrule, Issuer shall reimburse holders the missed interest payment for the relevant financial year Optional interest deferral Deferred interest is cumulative for three consecutive deferrals of interest and thereafter the respective portion of deferred interest shall be cancelled Deferred interest shall be payable following (i) a payment of dividends, (ii) a payment on junior or parity securities, (iii) repurchase of any share capital, (iv) redemption of any junior or parity securities, (v) redemption or (vi) liquidation Ranking Junior to Public Hybrid and pari passu with Issuer s share capital Junior to unsubordinated creditors, but ahead of Shareholder Hybrid and Issuer's share capital Listing None SIX Swiss Exchange Swiss principal shareholders have demonstrated support by committing to CHF 366.5m Shareholder Hybrid at terms less privileged vs. Public Hybrid Alpiq Holding AG April

21 2 Expected impact of capital measures Mio. CHF Q Reported vs Pro-forma IFRS view Pro-forma credit analyst view 3 3 Q Q Liquidity 1,204 1,385 1, % 2,706 2,706 Operating EBITDA 4 1, % Net debt 4,652 3,990 3,469-14% 2,669 3,069 Net debt / EBITDA4 3.8x 4.0x 3.5x 2.7x 3.1x As reported 2 12 months rolling 3 Assuming total hybrid issuance in the amount of CHF 800 m (100% equity credit under IFRS and 50% equity credit under credit rating analyst view) 4 Before exceptional items 5 Restated for consolidation of Kraftwerke Gougra AG and IAS 19 Use of proceeds for the envisaged transaction Reduce leverage via repayment of outstanding debt of Alpiq Holding AG maturing in 2013 (including repayment of CHF 320m shareholder loan from EOS) Take advantage of potential early repayment opportunities in longer-dated debt in order to accelerate optimisation of capital structure Strengthening of balance sheet by improving the equity base General corporate purposes Alpiq Holding AG April

22 3 Maturity profile as of 31 December 2012 Staggered redemption out to , Total: CHF 5,375m 1 2 Liquid balance sheet with CHF 1.9bn liquidity as of 31 March 2013 plus CHF 1.2bn unused committed credit lines vs. balanced maturity profile in coming years 1 As of 31 December 2012; restated for consolidation of Kraftwerke Gougra AG 2 Of which CHF 320m will be repaid to EOS by mid of May Alpiq Holding AG April

23 4 Operating cash flow generation and dividend history Operating cash flow Dividend history by fiscal year 1036, (CHF m) (CHF per share) History of consistent operating cash generation and sustainable dividend policy even in challenging times Alpiq Holding AG April

24 Agenda 1 Alpiq Group overview Financial review / Q update Repositioning Capital measures and fixed income investment considerations 5 Q&A

25 Thank you for your attention 25

26 Appendix Alpiq Holding AG April

27 Funding mix as of 31 December 2012 Limited reliance on bank lending 1 By instrument (CHFm) By entity (CHFm) Shareholder loans Private Placements Margin liabilities Gougra EnPlus Wind parks IT Emosson Bilateral credits Rest (incl. margins) Bonds Alpiq Holding AG 1 1 Total: CHF 5,375m Total: CHF 5,375m Bonds comprise c. 2/3 of outstanding debt Majority of debt issued by Alpiq Holding AG Average interest rate of group c. 3% p.a. 1 As of 31 December 2012; restated for consolidation of Kraftwerke Gougra AG Alpiq Holding AG April

28 Market environment Market backdrop Pricing environment (EEX) 140 Performance of forward prices (EEX Peak and Off-Peak) EUR/MWh 80 Base load Peak load Spread (EUR/MWh) Spread (rhs) Baseload (lhs) Peakload (lhs) Cal 13 Peak Cal 13 Off-Peak Cal 14 Peak Cal 14 Off-peak Cal 15 Peak Cal Off-Peak Source: EPEX SPOT Source: EPEX SPOT Increase in subsidies for renewable energy drove market prices down and changed supply profiles in the electricity market Alpiq Holding AG April

29 Results FY 2012 Impairments, provisions and other exceptional items CHF million Total Power generation Switzerland 786 Power generation International 571 Renewable energy sources Switzerland 17 Renewable energy sources International 196 Sales International 79 Holding, Corporate Centre, AIT and other 21 Total impairment of assets 1,670 Provisions for loss-making contracts 27 Liabilities for loss-making contracts -98 Other provisions 16 Total impairments and provisions 1,615 As a result of reduced price expectations, impairment on: Production park Switzerland CCGT plants in Italy, France, Hungary and Spain Coal power plants in Czech Republic Domestic and foreign renewable energy assets Cancellation of long-term supply contracts in Romania due to insolvency of the counterparty Further impairments on and provisions for long-term supply contracts Alpiq Holding AG April

30 1 Results FY 2012 Operating results vs. IFRS results CHF million 2012 Results of operations Impairments and exceptional items 2012 IFRS Net revenue 12,710 12,710 Own work capitalised Other operating income Total revenue and other income 12, ,142 Operating costs -11, ,942 EBITDA ,200 Depreciation and amortisation ,663-2,128 EBIT 520-1, Share of results of associates and JV Finance expense Finance income Profit/(loss) before income tax 249-1,482-1,233 Income tax Group profit/(loss) incl. noncontrolling interests 220-1,306-1,086 Alpiq Holding AG 1 According to FY2012 annual report; not restated for consolidation of Kraftwerke Gougra AG and change in IAS 19 April

31 Overview on restatement of FY2012 results CHF million Alpiq Group as reported Consolidation effect of Kraftwerke Gougra AG Impact of IAS 19 Alpiq Group restated Total revenues 12, ,722 EBITDA EBIT Net Profit Net debt 3, ,990 Alpiq Holding AG April

32 Disclaimer This presentation contains forward-looking statements and information In particular, certain statements with regard to management objectives, trends in results of operations, margins, costs, return on equity, risk management and competition are speculative by nature. Words such as "expects", "anticipates", "targets", "goals", "projects", "intends", "plans", "believes", "seeks", "estimates", variations of such words, and similar expressions are intended to identify forward-looking statements. Such statements are based on our current expectations and certain assumptions and are therefore subject to certain risks and uncertainties. Consequently, Alpiq's results may differ materially and adversely from those expressed or implied in any forwardlooking statements. Factors that might cause or contribute to such differences include, but are not limited to, economic conditions, the impact of competition, political and economic developments in the countries in which Alpiq operates, regulatory developments in the energy market in Switzerland and abroad, and fluctuations in energy prices and margins for Alpiq products. Forward-looking statements made by or on behalf of Alpiq reflect only the assessment of the situation on the date on which such statements are made. This presentation does neither constitute an offer to buy or to subscribe for securities of Alpiq Holding AG. Investors should make their decision to buy or to subscribe to securities solely based on the official listing prospectus which will be published by Alpiq Holding AG This presentation does not constitute a prospectus as such term is understood pursuant to article 652a or article 1156 of the Swiss Federal Code of Obligations or a listing prospectus within the meaning of the listing rules of the SIX Swiss Exchange Ltd. Accordingly, the investor protection rules otherwise applicable to investors in Switzerland do not apply to this presentation. Alpiq Holding AG April