First-quarter 2015 presentation to analysts. Finn Bjørn Ruyter, CEO Oslo, May

Transcription

1 First-quarter 2015 presentation to analysts Finn Bjørn Ruyter, CEO Oslo, May

2 Agenda 1) First-quarter 2015 results 2) Theme: Markets 3) Appendix 2

3 First-quarter 2015 highlights EBITDA of NOK 777 million compared to NOK 755 million last year. Stable underlying operations in all business areas. Energy demand and power prices on a par with last year mild weather and achieved power price 0.25 NOK/kWh. Hydropower production 13 percent above normal, compared to 50 percent above normal previous year. Earnings per share of NOK 1.83 down from last year due to a positive non-recurring effect relating to a waived tax demand last year. Seasonally strong cash flow from operating activities. 3

4 EBITDA first-quarter 2015 and change from 2014 EBITDA Q Change in EBITDA from Q Production Heat Network Markets Other EBITDA EBITDA Q Production Heat Network Markets Other EBITDA Q

5 Power prices against last year NOK/kWh 0,30 0,25 0,20 0,15 0,10 Jan Feb Mar Apr May Jun Jul Aug Sep Okt Nov Dec Oslo price (NO1) 2014 Oslo price (NO1) Source for price data: og April 30th, 2015.

6 Production NOK million Q Q Year 2014 Year 2013 Operating revenue Gross margin EBITDA Operating profit Power price (NOK/kWh) Production volume (GWh) Investments Volume 13 percent above normal, but 201 GWh lower than the record level in Q Price hedging contributed positively with NOK 10 million (NOK 15 million) in the quarter. High network connection costs due to power surplus in price area NO1 compared to normal power shortfall. Quarter NOK mill 200 Rolling 12 months NOK mill percent hedging ratio next 6 months Project design of possible new generator progressing according to plan. 0 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q

7 Hydropower Glomma waterway flow m3/sec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Normal * Max. capacity utilization 7 * Normal = Median waterflow last 10 years

8 Production volume 400 GWh Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Normal* * Normal = 3100 GWh based on 10 years data adjusted for efficiency improvements.

9 Heat NOK million Q Q Year 2014 Year 2013 Operating revenue Gross margin EBITDA Operating profit Production volume (GWh) Gross margin (NOK/kWh) Investments Quarter NOK mill Q Q Q Q Q Q Q Q4 14 Rolling 12 months NOK mill 201 Q Mild weather in both this year's and last year's quarter gave low consumption. Contribution margin up 0.08 NOK/kWh from previous year. Lower costs since last year's quarter includes costs related to a large leakage. Price hedging contributed NOK 14 million (NOK 25 million). 62 percent hedging level next 6 months. 9

10 Production volume 300 GWh Jan Feb Mar Apr May Jun Jul Aug Sep Okt Nov Dec Normal *

11 Network NOK million Q Q Year 2014 Year 2013 Operating revenue Gross margin EBITDA Operating profit Result effect income surpluses/(shortfalls) (93) (30) 206 (120) Investments Purchased Network business contributes to profit growth. The integration project is proceeding as planned. Stable operations with few interruptions. AMS contracts regarding meters and installation entered. Quarter NOK mill Rolling 12 months NOK mill Expected operating profit for the year slightly lower than last year - planned income shortfall in 2015 against an income surplus of 206 million in Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q

12 Markets NOK million Q Q Year 2014 Year 2013 Operating revenues Gross margin EBITDA Operating profit Sold volume (GWh) Good result in electricity sales business. Gains of NOK 29 million related to the sale of historically impaired trade receivables. Number of customers and sales volumes in line with last year. Quarter NOK mill Rolling 12 months NOK mill Profit after tax of NOK 88 per customer (NOK 78). Efforts to facilitate an efficient operating and sales organization in Sweden and Finland in progress Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q

13 Net interest-bearing debt and development working capital Change in net interest-bearing debt in the quarter (NOK million) Development working capital and power prices NOK million NOK/kWh Net debt Q EBITDA Paid interest Paid taxes Change working capital Net investments Net debt Q Q12 1Q13 1Q14 Working capital end Q1 1Q15 Power prices (NO1)

14 Solidity development last years Equity ratio (percent) Debt / EBITDA * 30% 30% 31% 31% Q12 1Q13 1Q14 1Q15 1Q12 1Q13 1Q14 1Q15 14 * EBITDA for core business (Production, Heat, Network, and Markets, last 12 months)

15 Summary of first-quarter 2015 profit Change in EBITDA from Q Profit after tax Q Profit per share NOK EBITDA Q1 14 Gross margin Gain/loss financial items Operating expences EBITDA Q1 15 EBITDA Depreciation Financial expenses Tax Profit after tax Q * Q affected positively by NOK 288 million related to waived tax claims regarding Hatros.

16 Outlook Project design of possible new generator progressing according to plan, any investment decision expected in second half of Heat with increased sales rate for new customers that will phase out oil furnaces. Network has signed AMS contracts regarding meters and installation, and continues work on the integration process expected completed in AMS project has signed several large contracts, now working on IT systems, test programs and planning of installation. Efforts to facilitate an efficient operating and sales organization in Sweden and Finland in progress. At the end of Q1 the listed system price for deliveries of power in 2015 was 0.23 NOK/kWh compared to 0.25 NOK/kWh in

17 Agenda 1) First-quarter 2015 results 2) Theme: Markets 3) Appendix 17

18 Hafslund Markets Number of employees: ~ 570 Turnover in 2014: NOK 6.6 billion Operating profit in 2014: NOK 403 million Number of electricity customers: 1,074,000 Kundesenter Fakturaservice 18

19 Market position and goals Nordic electricity market 100% = appr. 12 mill. customers About 10% market share in the Nordic region Others 41% Hafslund 10% 12% EON 12% Vattenfall 26-27% in Norway 4% in Sweden 4% in Finland Varying degrees of maturity and competition in the markets Increased focus on benefit products Fjordkraft 4% 10% Dong 11% Fortum Goal to take clear market positions in Sweden and Finland Ambition of strong customer growth in the coming years 19 Source: TNS Gallup Energy Barometer, Various reports from the Nordic regulators, companies websites and reports, various analyzes

20 Customer- and profit development Number of customers 000 Operating profit NOK million Norway Sweden and Finland Operating profit Customer growth driven by both organic growth and acquisitions 20

21 Assumed regulatory changes Throughbilling Shared ICT hub Supplier centric model AMS Nordic retail market Major regulatory changes expected to affect the competitive situation in the coming years 21

22 Tougher competition and lower margins 22

23 Earnings per electricity customer - the key drivers Gross margins on electricity products Gross margin on benefit product Costs for the ongoing customer relationship Costs maintenance of the customer base 23

24 Examples of benefit products EL- konto Hafslund Online Grønt valg Link 24

25 Market position map Norway Position map Norway Largest Group brand Cheapest Best Nationwide discount actor Differentiated Local brands Multibrand strategy with distinct and clearly separate market positions 25

26 Market position map Sweden and Finland Position map Sweden Position map Finland Largest Largest Cheapest Best Cheapest Best Differentiated Differentiated Good base for efforts to establish clear market positions 26

27 Organized to realize growth plans Invoicing and collection Physical and financial power trading Strømselskap Professional forums cooperation and learning across companies Group and shared services... build strong centers of expertise and manage risks along the supply chain 27

28 Hafslund Markets - from regional to leading Nordic player What did we do? What are we going to do? Nordic 2020 National 2013 Regional

29 Agenda 1) First-quarter 2015 results 2) Theme: Markets 3) Appendix 29

30 Oslo price (NO1) historic and future NOK/kWh NOK/kWh * Power price - Oslo Period average 30 Source for price data: og April 30th, * Period average is based on forward prices as of April 30th, 2015.

31 Group profit and loss NOK million Q Q Year 2014 Year 2013 Operating revenue Cost of energy (2 311) (2 289) (21) (6 866) (7 867) Gross margin Gain/loss financial items (1) Operating expenses (701) (701) 0 (2 851) (2 648) EBITDA Depreciation and write-downs (204) (201) (2) (1 045) (794) Operating profit Interest expences (95) (93) (2) (480) (494) Market value change loan portfolio 28 (16) 44 (73) (9) Financial expenses (67) (109) 42 (553) (503) Pre-tax profit Tax (149) 112 (261) (194) (402) Profit after tax (200) Earnings per share (EPS) in NOK (1.02)

32 Group balance sheet NOK million Q Intangible assets (8) Fixed assets Financial assets Accounts receivables and inventory (396) Cash and cash equivalents Assets (31) Equity (incl. min. int.) Allocation for liabilities Long-term debt (505) Other current liabilities (482) Short-term debt Equity and liabilities (31) Net interest-bearing debt (1 314) Equity ratio 31 % 30 % 1 % 31 % 32

33 Group cash flow NOK million Q Q Year 2014 EBITDA Paid interests (173) (173) 0 (452) Paid tax (105) (150) 45 (58) Marketvalue changes and other liquidity adjustments (6) 3 (9) (67) Change in working capital, etc (64) Total cash flow from operations Net operations and expansion investments (206) (130) (76) (1 896) Net purchase/sale of shares etc. 28 (16) 44 (379) Cash flow from investments activities (178) (146) (32) (2 275) Cash flow to down payments and interests (121) 33

34 Earnings per share Per quarter NOK 2.85 ** *** * Q * ** *** Profit after tax Q negatively affected NOK 551 million relating to extraordinary write-downs and provisions. Profit after tax Q was positively impacted by NOK 288 million related to tax waived claims regarding Hatros. Profit after tax Q negatively affected by NOK 93 million relating to write-downs Bio-el and secondary networks Søndre Nordstrand

35 Capital employed and return on capital employed Capital employed NOK 21.0 billion per Return on capital employed Markets 7% 8.0% 8.3% 8.3% Production 22% Network 46% 22% 3% Heat Other 2013 * 2014 ** 2015 *** 35 * ** *** Includes the sale of shares in Infratek with gain of NOK 90 million Includes write-downs of Bio-El and secondary networks Søndre Nordstrand of NOK -127 million Last 12 months

36 Loans portfolio data Debt maturity profile NOK million Loans at maturity next 12 months NOK million Commercial paper Bonds 300 Other loans Q1 15 Q4 14 Bonds 73 % 73 % 0 % Commercial paper 3 % 5 % -2 % Other loans 24 % 22 % 2 % NOK million Q1 15 Q4 14 Nominal value - market value of loans (326) (354) 28 Market value interest rate and fx derivatives (48) (64) 16 Average interest incl. derivatives (%) 3.8 % 3.8 % 0.0 % Proportion of loan portfolio with fixed interest (%) 51 % 48 % 3 % Loans at maturity next quarter Unused drawdown facilities apr mai jun jul aug sep okt nov des jan feb mar Commercial paper Bonds Other loans 36

37 Key figures Group YTD 2015 YTD 2014 Capital matters Total assets Capital employed Equity Market capitalization Equity ratio 31 % 31 % Net interest-bearing debt Profitability EBITDA Earnings per share (EPS) Cash flow per share Heat YTD 2015 YTD 2014 Capital employed Sales price District heating (NOK/kWh) Gross margin (NOK/kWh) Sales volume (GWh) Network YTD 2015 YTD 2014 Capital employed Regulated gross margin for the year Excess/(under) income ytd (93) (30) NVE-capital (regulatory) Power Generation YTD 2015 YTD 2014 Capital employed Sales price (NOK/kWh) Production volume (GWh) Markets YTD 2015 YTD 2014 Capital employed of this working capital (116) 244 Volume power sales (GWh)

38 Shareholders as of # Shareholder Class A shares held Class B share held Total Ownership Share of voting rights 1 City of Oslo % 58.5 % 2 Fortum Forvaltning AS % 32.8 % 3 Kommunal Landspensjonskasse % 4.5 % 4 MP Pensjon PK % 0.0 % 5 Gjensidige Forsikring % 0.0 % 6 Folketrygdfondet % 0.1 % 7 Skandinaviska Enskilda Banken % 0.0 % 8 Hafslund ASA % 0.0 % 9 Greenwich Land Securities AS % 0.1 % 10 New Alternatives Fund, Inc % 0.3 % Total, 10 largest shareholders % 96.2 % Other shareholders % 3.8 % Total % 100 % 38

39 Definitions Group Capital employed Equity + Net Interest-bearing debt + Net tax positions Equity ratio (in %) (Equity incl. Minority interests / Total assets) X 100 Earnings per share Cash flow per share Return on equity last 12 months Profit after tax / Average no. of shares outstanding Net cash from operations / Average no. of shares Result after tax last 12 months / Average equity (incl. Minority interests) last 12 months Return on capital employed last 12 months Operating profit last 12 months / Average capital employed last 12 months Hedge ratio Hydro power Hedge ratio District heating Ratio of the estimated production portfolio hedged in the period (excluding fixed-price contracts) Ratio of the estimated net power price exposure hedged, by: Sales reduced with electricity use and 1/3 heat pumps 39

40 Investor information Additional information is available from Hafslund s website: You can subscribe to Hafslund press releases Group CFO, Heidi Ulmo heidi.ulmo@hafslund.no Tel: Financial Director and Investor Relations contact, Morten J. Hansen mjh@hafslund.no Tel:

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