Vattenfall three-month Interim Report 2002 January - March

Transcription

1 1 Vattenfall three-month Interim Report 2002 January - March Presentations by Lars G Josefsson, CEO and Matts Ekman, CFO May 15, 2002

2 2 Highlights Net sales more than doubled to SEK 28.4 billion Return on net assets increased to 10.7 per cent from 9.9 per cent Operating profit increased by 53 per cent to SEK 5.1 billion Acquisition of Bewag completed Integration of the German companies progressing as planned

3 3 Structural changes in 2002 Germany 44.8 per cent of Bewag purchased from Mirant Poland ownership in EW increased by 13.9 per cent to 68.9 (April) Poland two district-heating companies sold to Sydkraft Norway 5.8 per cent stake in Hafslund sold to Sydkraft (April) Germany Agreement with BvS

4 4 Vattenfall Group 2002 (including Bewag) The Nordic Region Germany and Poland * Total Sales, EUR m Electricity generation (TWh) Heat generation (TWh) Employees * Excluding distribution company GZE (32% ownership)

5 5 Vattenfall s vision Vattenfall Group VATTENFALL EUROPE The Formation of Vattenfall Europe is a major step to fulfill Vattenfall's vision: Vattenfall a leading European energy company

6 6 Vattenfall market positions Sweden Finland Germany Poland Electricity generation and sales Top 3 Trading Top 3 on the Nordic Market Top 5 n/a Distribution District Heating 2 small volume 1 1

7 7 Market share in Germany Vattenfall is the third-largest player in the German electricity market which is the largest in Europe, about 40% larger than the total Nordic energy market. Generation Capacity (MW) Electricity Sales (GWh) EnBW Other e.on e.on RWE Vattenfall approx 15% RWE Other EnBW Vattenfall approx 15% Output (GWh) Customers (m) EnBW Other e.on e.on RWE Vattenfall approx 15% RWE Other EnBW Vattenfall approx 8% Source: Annual Reports

8 8 Our competitors the 10 largest electricity companies in Europe Sales Electricity (TWH) Turnover in EUR billion 1. Electricité de France Enel S.p.A. 3. E.ON AG RWE AG Vattenfall AB Tractebel Endesa S.A Energie Baden-Würtemberg 9. Iberdrola S.A Fortum Corporation Including Vattenfall Europe. Sales 2001 excl. trading 2 Including non-energy business (Turnover E.ON Energie 22 billion) 3 Including non-energy business (Turnover RWE Energie 13 billion)

9 9 Nordic Market Generation Sales and margins on continued satisfactory level Continued high plant availability Electricity Networks Further improvement of network capacity Market Positive operating result Heat Stable operations and increased profit

10 10 Electricity Spot and Futures Price Development Nord Pool s spot and futures price SEK/MWh 450 Spotpris price - Sverige Sweden Årsmedelvärde Futures price System price 400 Terminspris Average annual - Systempris value Källa: Nord Pool

11 11 Germany We have seized the unique opportunity to build the third-largest energy group in Germany by combining HEW, Bewag, VEAG and Laubag thereby creating a leading powerful integrated player with sufficient size and power to successfully operate and compete. the integration of the German companies is progressing as planned annual cost reductions and synergies of million Euro as from 2004.

12 12 Current ownership in German and Polish operations Vattenfall Free float 1.1% 73.8% Poland City of Hamburg 92.5% 25.1% HEW 89.6% (92.1% of votes) 81.25% EW 69 % Laubag 2.5% Bewag 6.25% Veag GZE 31.8% Free float 10.4% Vattenfall s stake in VEAG will increase during 2002

13 13 Vattenfalls activities in Germany Generation Trading Transmission Distribution Retail Heat Laubag Veag HEW Bewag Vattenfall Europe Generation Capacity: 17 GW Output: 77 TWh Trading Volume: 123 TWh Transmission 30 Tkm Distribution 60 Tkm One integrated utility with activities in core markets Retail 112 TWh* Heat 16 TWh *Incl. physical delivery of trading Source: Vattenfall Europe

14 14 Vattenfall well positioned Vattenfall s starting position Vattenfall today, 2002 Future prospects Early deregulation has led to valuable experience Well developed energy production High infrastructure demands High environmental requirements and technical innovation capability Teamwork between companies and union organisations Well on our way in Europe Excellent competence levels within energy, technology, environment, organisation and business areas. With continued development, Vattenfall can maintain position as one of the major players on the European electricity and heating market

15 15 Vattenfall strengths Focus on core markets and businesses Nordic market experience Strong position in Germany Low marginal cost generation capacity

16 16 Strategies Focus on core markets Nordic, Germany and Poland Focus on core businesses Electricity and Heat Cost efficiency Secure success in Germany

17 17 Financials Matts Ekman, CFO

18 18 Consolidated Income Statement January March Full year Amounts in SEK million Net sales 28,445 11,559 69,003 Gross profit 7,705 3,855 16,595 Operating profit (EBIT) 5,103 3,340 9,959 Operating profit, excl. IAC 5,049 2,955 8,822 Financial income ,232 Financial expenses 1, ,737 Profit before taxes and minority interests 4,444 2,814 7,454 Taxes 1, ,167 Minority interests in the profit for the period ,097 Net profit for the period 2,317 1,984 4,190 IAC = Items Affecting Comparability

19 19 Net sales ly values, SEK m /2000 2/2000 3/2000 4/2000 1/2001* 2/2001* 3/2001 4/2001 1/2002 ly values SEK m * The ly values are pro forma, reflecting the situation if HEW had been consolidated from January 1.

20 20 Operating profit (EBIT) excl. items affecting comparability ly values, SEK m /2000 2/2000 3/2000 4/2000 1/2001* 2/2001* 3/2001 4/2001 1/2002 ly values SEK m * The ly values are pro forma, reflecting the situation if HEW had been consolidated from January 1.

21 21 Net sales break down per profit area SEK m Q 1, 2002 Q 2, Generation Nordic Countries Market Nordic Countries Heat Nordic Countries Electricity Networks Nordic Countries Services Germany *) Poland Other Profit Areas *) Q 1, 2001 = HEW proforma

22 22 EBIT break down per profit area excl. items affecting comparability SEK m Q 1, 2002 Q 2, Generation Nordic Countries Market Nordic Countries Heat Nordic Countries Electricity Networks Nordic Countries Services Germany *) Poland Other Profit Areas *) Q 1, 2001 = HEW proforma

23 23 Consolidated Balance Sheet Summary March 31 March 31 Dec 31 Amounts in SEK million Fixed assets 238,784 94, ,997 Current assets 53,664 22,129 44,046 Total assets 292, , ,043 Equity 40,807 38,091 39,578 Minority interests 21,584 4,761 19,080 Provisions 98,403 13,911 90,956 Interest bearing debt 103,561 50,113 88,533 Other liabilities 28,093 9,388 20,896 Total equity, provisions and liabilities 292, , ,043 Net debt 74,370 45,172 55,736 Net assets 133,280 87, ,062 Net assets (weighted avg. April 2001-March 2002) 109,714

24 24 Consolidated Cash Flow Statement January March Full year Amounts in SEK million Funds from operations (FFO) 5,734 3,541 13,148 Change in working capital -3, ,706 Cash Flow from operating activities 2,516 3,022 10,442 Investments -21,920-5,093-43,443 Divestments ,459 Cash flow from investing activities 21,596 4,157 22,984 Cash flow before financing activities -19,080 1,135 12,542 Cash flow from financing activities 18,279-1,271 15,099 Change in net debt Net debt at the beginning of the period -55,736-43,311-43,311 Net debt at the end of the period -74,370-45,172-55,736

25 25 Key Ratios (in per cent unless otherwise specified) April March 2002 Full Year 2001 Return on net assets Return on equity Jan March 2002 Jan March 2001 EBIT-margin (excl. IAC) * Net margin (excl IAC)* Pre-tax interest coverage, times FFO interest coverage (times) FFO net interest coverage (times) Equity-assets ratio Net debt/equity (times) EBITDA/ net financial items (times) IAC = Items Affecting Comparability * Q 1, 2001 = HEW proforma

26 26 Financial targets Focus on value creation and profitable growth To consolidate and secure a fast integration and profit improvement in the acquired German businesses Profitability target: After completion of the German integration: - Return on Net Assets of 11% before tax Interest coverage Pre-tax interest coverage of (times) To maintain credit rating in the single A category

27 27 Vattenfall s credit rating Short-term Moody s S&P P-2 A-2 Long-term Moody s S&P A-3 A- (Outlook (Outlook negative) negative) Both ratings confirmed in February 2002

28 28 Funding 650 million Eurobond, 7-year, launched March 20. Coupon 6 % Strong demand Launch spread: 84 bp over 7-year mid swap

29 29 Vattenfall A Leading European Energy Company