Enel Russia Investor Day Strategic Plan Moscow, 8 April 2015

Transcription

1 Enel Russia Investor Day Strategic Plan Moscow, 8 April 2015

2 2 Enel Russia Investor Day Agenda 2014 main developments and strategic plan for key financial figures Closing remarks

3 2014 highlights and company profile Company profile Enel Russia s profile A strong track record in cost containment Optimal financial structure and ample financial resources Positive FCF and dividend distribution Real-terms costs decline in : Fixed costs per MW down 20% (from 0.99m to 0.79m RUR/MW) Coal price down 14% (+36% in nominal terms vs. gas tariff increase of 83%) 1.1x Net debt/ebitda as of end-2014 Lowest interest rates in sector 100% hedge of FX risks on EUR-denominated debt Over 60b RUR of available debt facilities as of end-2014 FCF-positive from 2013 after completion of investment programme Dividend distribution in accordance with 40% payout policy One of highest dividend yields in sector 3

4 2014 highlights and company profile Financial and operating highlights 1 Actual 2013 Actual Targets Net power output 41.9 TWh 42.4 TWh 43.4 TWh EBITDA 16.8b RUR 18.4b RUR ~15.5b RUR Net Income 4.9b RUR 5.6b RUR ~5b RUR Net ordinary income 4.9b RUR 7.1b RUR 2 ~5b RUR Net Debt 19.3b RUR 21.1b RUR 3 ~18b RUR 4 CAPEX accrued 5 8.2b RUR 9.6b RUR ~9.6b RUR 6 Key targets delivered Net ordinary income sizably above guidance and previous year 1 Audited standalone IFRS results IFRS unless indicated otherwise 2 Adjusted for one-off PPE impairment of 1.6b RUR post tax 3 If adjusted by corresponding change in derivative assets, net debt at year-end 2014 is 11.9b RUR 4 Number derived from 1b RUR free cash flow guidance for Numbers under Enel IAS standards 6 Updated guidance adjusted for 1.6b RUR of CCGT repair costs 4

5 Strategic Plan Current macro environment GDP Consumption vs. new additions 4% 3% 2% 1% 0% -1% -2% -3% -4% 2,0% 2,5% 2,5% 0,1% ,0% 6,0% 4,5% 3,0% 1,5% 0,0% -1,5% -3,0% 5,8% 1,6% 0,1% 1,2% 1,0% 1,4% -0,8% 1,3% 1,0% ,4% Installed capacity change, 1st price zone Consumption change Inflation FX, RUR/EUR 15% 10% 13,5% 10,5% 8,0% 6,5% 6,0% 65,0 58,5 56,5 57,3 60,5 5% 0% Overcapacity to become more prominent in mid-term, reinforced in 2015 by GDP decline 5

6 Strategic Plan Strategic guidelines CAPEX optimization in line with market conditions to maximize free cash flows Continued focus on efficiency of power plants Carrying on fuel supply management optimization Strict financial discipline Growing bottom line to support stable dividends to our shareholders 6

7 7 Enel Russia Investor Day Agenda 2014 main developments and strategic plan for key financial figures Closing remarks

8 Strategic Plan Market assumptions Gas tariff : moderately below CPI of the previous year : slightly above CPI based on an easing cycle assumption Coal price Coal price increase in line with CPI Power prices Capacity prices Regulated tariff: 0% for 2015, then adjusted to fuel price growth annually from DAM price: follows gas price trend, but adjusted downward due to higher volumes of electricity output attributable to new entrants Regulated tariff: flat for 2015 and CPI-linked indexation annually from KOM: 2015 KOM price decrease vs and then growth by CPI annually from NGRES - must-run generator starting from January for all equipment 1 for 11 months in 2015 DPM: adjusted for government bond yields; ~1.6x increase in due to redistribution of revenues for 11th-15th years of DPM Tough market environment dominated by governmental tariff containment approach Coal price increase due to RUR devaluation vs. Tenge to create additional pressure on earnings in Excluding a 170MW CCGT unit to be decommissioned within

9 Strategic Plan Installed capacity and production Installed capacity (MW) Net output (TWh) ,4 45,0 43,1 44, Conventional gas CCGT Coal 18,9 5,2 19,0 17,2 5,7 5,4 16,4 5, ,3 20,3 20,5 21, Capacity decommissioning 170 MW at Nevinnomysskaya decommissioned over MW at Sredneuralskaya decommissioned over 2016 Net output trends Coal and CCGT output dynamics mainly affected by maintenance/modernization schedule Elevated output at conventional gas units to remain in 2015 and decrease onwards due to impact from new entrants Higher coal availability essential for supporting energy margin 9

10 Strategic Plan Energy margin Day-ahead market spreads, RUR/MWh 1 Energy margin (b RUR) Conventional gas CCGT Coal 28,7 0,7 +7% CAGR ,7 1,0 26,7 0,8 12,8 40,6 1,1 14,7 Capacity prices, Th RUR/MW/month KOM 2 CCGT (DPM) Regulated 12,8 10,7 7,9 8,1 4,3 5,0 11,0 10,2 12,8 16, Heat Capacity CCGTs Capacity conventional units Power Energy margin drop in 2015 due to lower KOM prices; additional pressure to be exerted by coal price increase Growth from 2015 onwards due to increasing spreads and higher DPM prices 1 Calculated as average DAM price minus fuel costs in RUR/MWh for each technology KOM projection includes must-run tariff for Nevinnomysskaya GRES 10

11 Strategic Plan Fixed costs Fixed costs (B RUR) 1,2 +6% CAGR Cost containment highlights 12,5 11,4 3,0 2,8 4,7 4,3 3 13,8 3,2 4,9 15,1 3,4 5,1 Continued implementation of cost efficiency initiatives in Operations and Maintenance Launch of overhead optimization project Further headcount optimization to partially compensate for salary growth due to inflation 4,3 4,8 5,7 6,6 Benefiting from operational synergies with the Group Overhead & other Personnel O&M Fixed costs dynamics below CPI, as optimization of manageable costs helps to offset water consumption costs and property tax increase 1 Enel IAS classification and numbers 2 CAGR and numbers for 2015, 2017 and 2019 shown in nominal terms personnel costs amount adjusted for non-recurring actuarial gain of 1.2B RUR 11

12 Strategic Plan EBITDA EBITDA (B RUR) 1 +6% CAGR ,1 18,4 14,6 17,1 20, Enel IAS for 2015, 2017, 2019; 2014 reported standalone IFRS result 12

13 Strategic Plan Net ordinary income Net ordinary income (B RUR) 1 +17% CAGR ,5 10,5 7,1 7,0 4, Enel IAS adjusted for standalone IFRS for 2015, 2017, 2019; 2014 reported standalone net income adjusted for one-off PPE impairment of 1.6B RUR post tax 13

14 Strategic Plan CAPEX 1 CAPEX Highlights CAPEX amount contained vs. old BP despite RUR depreciation and higher CPI 41.3 B RUR 49% Environment Maintenance Other Maintenance CAPEX refocused to reflect market conditions and focus on cash generation units CAPEX by year (B RUR) 47% 4% ~45.1 B RUR CAPEX planned for in old plan 2015 ~ ~ ~8 (reduction by 8%) CAPEX optimized in response to unfavorable macro environment 1 CAPEX numbers refer to CAPEX accrued 14

15 Strategic Plan Cash flows and net debt Cumulated cash flows (B RUR) 1 Net debt (B RUR) 1 100,7-11,3 +2,7-4,0 88,1-41,3 21,1 15,8 1,1 1,1 8,2 net cash 46,8-16,7 0,4 30, Net debt Net debt/ebitda EBITDA Income Tax NWC and other Financial expenses paid FFO CAPEX FCF Dividends at 40% payout Net FCF Positive free cash flow maintained throughout the five-year period Cash position reached by the end of the BP horizon 1 Enel IAS for ; net debt and net debt/ebitda for 2014 standalone IFRS 15

16 16 Enel Russia Investor Day Agenda 2014 main developments and strategic plan for key financial figures Closing remarks

17 Closing remarks Responding to challenges Challenges Response Gas tariff containment Smart management of fuel suppliers portfolio, long-term contracts Growing overcapacity concerns and increasing pressure of new entrants Continuous focus on cost efficiency Improvement of generating fleet, readiness to decommission non-sustainable units Exploring solutions with regulatory bodies for economically justified support of outdated equipment decommissioning and overall system reliability Coal price increase Pressure on FinEx due to RUR depreciation and higher interest rates Flexible pricing mechanism to mitigate FX effect Joint work with Minenergo on relevant tariff decisions 100% of total debt not subject to FX fluctuations A range of available debt instruments to choose from Flexibility in cash flows CPI pressure on fixed costs Actions elaborated to contain O&M, personnel and overhead costs Pressure on CAPEX from RUR depreciation Risk of payments disruption from the market Review of long-term investment plan Bilateral free capacity sales contracts with reliable customers Cash outflows optimization, shifting of payments Constant availability of a comfortable amount of cash Confidence in passing through tough times 17

18 Closing remarks Financials summary CAGR EBITDA 18.4b RUR 14.6b RUR 17.1b RUR 20.4b RUR +6% Net ordinary income 7.1b RUR 2 4.3b RUR 2 7.0b RUR b RUR +17% DPS at 40% payout RUR/share RUR/share 0.08 RUR/share 0.12 RUR/share +17% net cash Net debt/ebitda 1.1x 1.1x 0.8x 0.4x in Standalone IFRS numbers for 2014, Enel IAS numbers for unless specified otherwise 2 Standalone IFRS net income adjusted for one-off PPE impairment of 1.6b RUR post tax 3 As per the dividend policy currently embedded in the Strategic Plan 18

19 Enel Russia Investor Day Disclaimer Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information ( forward-looking statements ). These forward-looking statements are based on Enel Russia s current expectations and projections about future events. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of Enel Russia to control or estimate precisely, including changes in the regulatory environment, future market developments, fluctuations in the price and availability of fuel and other risks. You are cautioned not to place undue reliance on the forward-looking statements contained herein, which are made only as of the date of this presentation. Enel Russia does not undertake any obligation to publicly release any revisions to any forward-looking statements to reflect events or circumstances after the date of this presentation. 19

20 Enel Russia Investor Day Contacts Enel Russia Investor Relations Alexey Leonov ext Ekaterina Orlova ext Visit our website at: (Investor Relations) 20