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Q1 2015 Earnings Call – Gas Natural Fenosa

Gas Natural Fenosa · May 6, 2015 · 53 slides

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Slides

  1. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 1
    First Quarter 2015 Results (1Q15) Ma 6 May 6, 2015
  2. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 2
    Agenda 1. 1Q15 Key Figures 2. 1Q15 Highlights 3. Financials 4. Analysis of operations 5. Conclusions 3
  3. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 3
    1Q15 Key Figures 4
  4. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 4
    Key financial indicators Net Income: 404 million (+0.5%) EBITDA: 1,369 million (+11.8%) Investments: 313 million (-14.7%) (-14 7%) Net Debt: 17,331 million (+2.3% vs 31/12/14) 5
  5. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 5
    Changes in consolidation perimeter Sale of telecoms assets z Sale of Gas Natural Fenosa Telecomunicaciones (GNFT) in June 2014 z GNFT is a fiber optics operator providing services to GNF and other companies in Spain and Latin…
  6. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 6
    Changes in consolidation perimeter Incorporation of CGE: Ownership structure (GNF 96.7%) 100% 57% LPG Electricity distribution and Natural gas distribution 2 transmission1 52% 100% 100% 51% Distribution Transmission…
  7. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 7
    Changes in consolidation perimeter Incorporation of CGE: EBITDA Quarterly y EBITDA ( million)1 164 171 130 125 100 1Q14 2Q14 3Q14 4Q14 1Q15 z EBITDA shows a seasonal profile with lower levels during the spring andd…
  8. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 8
    New gas regulation in Spain New regulation in effect as of 5 July 2014, which brings both higher stability and predictability Financial stability: prevents future tariff deficits, current tariff deficit to be recovered over 15…
  9. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 9
    Impacts on EBITDA ( million) +2.4% +11.8% 107 35 1,369 1,224 29 1,253 (26) EBITDA 1Q14 Activity growth EBITDA 1Q15 Consolidation Currency Gas regulation 1 EBITDA 1Q15 pro-forma perimeter translation Spain Note: 1…
  10. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 10
    Hybrid issue Issuance of a 1,000 million 8-year hybrid with a 4.125% coupon in November 2014 Hybrid contributes to diversify the Groups funding sources and investor base while strengthening the Groups capital structure…
  11. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 11
    1Q15 Highlights 12
  12. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 12
    Commodity prices Recent evolution Brent Henry Hub (USD/bbl) (USD/MMbtu) -49.7% 49 7% -4.3% 4 3% -31.1% 31 1% -12.4% 12 4% 2014 1Q15 2014 1Q15 NBP /US (GBp/Th) -26.8% -0.8% +14.0% +12.8% 2014 1Q015 2014 1Q15…
  13. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 13
    Commodity prices GNFs business model as mitigating factor (Actual volumes for 2014) Indexation Currencies (Total: 29 bcm) (Total: 29 bcm) 3% Other 11% Other 28% 29% 22% Euro 89% US Brent 75% 72% 71% and oil products…
  14. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 14
    2013-2015 Efficiency plan Cost savings on EBITDA1 ( million) 300 Key initiatives in 2013-2015 243 228 - Reducing services and discretionary cost - Streamline 108 commercial and operational costs - Cost optimization in…
  15. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 15
    GPG Agreement with KIA z Agreement whereby Kuwait Investment Authority (KIA) will subscribe a US 550 million capital increase to take 25% of the share capital of Global Power Generation (GPG) z KIAs entry in GPG brings an…
  16. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 16
    GPG Main figures, assets and portfolio Main figures1 z EBITDA: 221 million z Investments: 166 million2 z Installed capacity: 2.8 GW in 10 countries z Workforce of 800 professionals Mexico 4 CCGTs 2.035 MW Wind Bii-Hioxo 234 MW…
  17. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 17
    GPG Future growth plans z Torito 50 MW hydro plant (Costa Rica) operational in 2Q15 z GPGs future growth plans include 5 GW capacity target in the medium term to be deployed in international markets z Focus areas: Latin America,…
  18. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 18
    CGE Organizational evolution z Appointment on 1 April 2015 of Mr Antonio Gallart as CGEs General Manager z Appointment of a single manager for the electricity business, with main responsibilities in electricity distribution and…
  19. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 19
    CGE Regulatory environment Electricity distribution and transmission z Regulated return of 10% before tax (in real terms) on replacement value of investments, equivalent to around 8% 8%-8.5% 8.5% real after tax z Ordinary review…
  20. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 20
    CGE Regulatory reform for gas distribution in Chile Project for new regulation z Rates freely set z Allowed return capped at cost of capital (minimum 6%) + 300 bp (real after tax); check on returns every 3 years z Should the…
  21. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 21
    CGE Expected growth of electricity demand z Electricity demand expected to grow at a 5% CAGR until 2020 N d for Need f new capacity it build b ild brings bi additional dditi l growth th opportunities t iti for GPG 22
  22. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 22
    CGE Expected buildup of transmission infrastructure linked with renewables z 45% of new generation capacity built until 2025 will be in renewables Significant investments needed new capacity in renewables brings additional growth…
  23. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 23
    CGE Expected increase in natural gas volumes z 5% CAGR of natural gas consumption until 2025 Energy Agenda to foster penetration of natural gas in the residential and power generation markets 24
  24. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 24
    Financials 25
  25. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 25
    Consolidated Income Statement (( million)) Q 1Q15 Q 1Q14 Change g % Net sales 7,282 6,284 15.9 Purchases (5,192) (4,460) 16.4 Gross Margin 2 090 2,090 1 824 1,824 14 6 14.6 Personnel, Net (266) (211) 26.1 Taxes (118) (115)…
  26. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 26
    EBITDA breakdown Change ( million) 1Q15 1Q14 m % Gas Distribution: 385 390 (5) -1.3 Europe 230 243 (13) -5.3 Latin America 155 147 8 5.4 Electricity Distribution: 243 232 11 4.7 Europe 152 153 -1 -0.7 Latin America 91 79 12 15.2…
  27. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 27
    Investments Change ( million) 1Q15 1Q14 m % Gas Distribution: 101 82 19 23.2 Investments + 64.7% Europe 56 51 5 9.8 excluding the Latin America 45 31 14 45.2 177 million tanker lease reported in 1Q14 Electricity Distribution: 54 44 10…
  28. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 28
    Net Debt evolution ( million) +2 3% +2.3% +1 4% +1.4% 664 405 16,942 411 17,331 17,184 (1 091) (1,091) (148) Net Debt Investments Dividends FFO and other Currency y Net Debt Provisional Adjusted j Net 31/12/14 translation…
  29. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 29
    A comfortable debt maturity profile A off M As March h 31 31, 2015 ( million) 1 Net Debt: 17.3 billion Gross Debt: 20.0 billion 7,701 2 943 2,943 2,584 2,406 2,532 1,819 2,843 1,238 611 2015 2016 2017 2018 2019…
  30. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 30
    An efficient Net Debt structure As of March 31 31, 2015 Majority of debt at fixed rates Conservative currency exposure with very competitive cost policy 23% 21% Euro Fixed 5% US Floating 74% 77% Other Diversified financing…
  31. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 31
    Ample liquidity available As of March 31, 2015 ( million) Limit Drawn Undrawn Committed lines of credit 7,729 499 7,230 Uncommitted lines of credit 617 138 479 EIB loan 53 - 53 Cash - - 2,560 TOTAL 8 399 8,399 637 10 322…
  32. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 32
    Analysis of Operations 33
  33. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 33
    Gas Distribution Europe (I) Sales Connection p points (GWh) (000) +5.6% 5,639 +1.0% 5,695 5 695 52,969 55,934 1,910 455 456 1,575 51,394 54,024 5,184 5,239 1Q14 1Q15 31/03/14 31/03/15 Spain Italy Colder weather in…
  34. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 34
    Gas Distribution Europe (II) Investments ( million) 56 +9 8% +9.8% 51 2 z Growth capex in Spain consistent 3 with new regulation that incentivises growth 48 54 z 2 new municipalities connected in 1Q15 1Q14 1Q15 z new…
  35. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 35
    Gas Distribution Latin America (I) Gas sales (GWh) Connection points (000) 56,863 +5.6% 60,036 6,379 +4.4% 6,662 +7.4% +7 0% +7.0% 12,413 1,461 11,556 1,365 +10.3% 6,168 5,594 +4.6% 2,546 2 662 2,662 +15.1% 23,238…
  36. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 36
    Gas Distribution Latin America (II) Investments ( million) 45 31 z Growth capex leads to 283,000 new +45 2% +45.2% connection p points vs end 1Q14 z Brazil: higher sales to power generation; 1Q14 1Q15 achieving customer base…
  37. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 37
    Electricity Distribution Europe (I) Sales TIEPI1 ((Spain) p ) (minutes) (GWh) +2.2% 9 105 9,105 9 306 9,306 1Q14 1Q15 711 731 19 10 8,394 8,575 -47.4% 47.4% 1Q14 1Q15 Spain Moldova Electricity y sales show…
  38. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 38
    Electricity Distribution Europe (II) Investments ( million) 29 +31.9% 1 z Over 4.5 million connection 22 2 points at end of 1Q15 28 20 z 1Q15 revenues in Spain reflect investments made in 2013 1Q14 1Q15 EBITDA z Higher…
  39. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 39
    Electricity Distribution Latin America (I) Electricity sales (GWh) Connection points (000) +3.5% 2,940 +4.1% 3,061 4,074 4,217 535 +4.7% 560 +5.2% 1,160 1,102 2,405 2,501 +2.9% +4.0% 2,972 3,057 1Q14 1Q15 31/03/14…
  40. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 40
    Electricity Distribution Latin America (II) Investments ( million) 25 22 14 17 z EBITDA in Colombia reflects a 4 +13.6% million non-recurring wealth tax impact 8 8 1Q14 1Q15 z Sustained customer base growth EBITDA achieved…
  41. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 41
    Energy Gas and electricity demand in Spain Conventional gas demand Electricity demand (GWh) (GWh) +3.3% +2.3% 63,345 64,804 77,326 79,871 1Q14 1Q15 1Q14 1Q15 Source: Enagas S Source: REE Gas demand recovers after…
  42. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 42
    Energy Gas Supply (I) Spain International (GWh) +3.3% 56,522 54,727 +15.1% 36,129 3,302 +41.7% 4,679 31 386 31,386 12,125 +19.7% 14,516 +7.7% 18,271 16,958 -5.0% 39,300 37,327 +23.7% 3 % 17,858 14 428 14,428 1Q14…
  43. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 43
    Energy Gas Supply (II) Wholesale Retail z International wholesales represent z Continued expansion into retail 45% of total in 1Q15 (vs 41% in liberalized markets in Europe (Spain, (Spain 1Q14) Italy) z Consolidating presence in…
  44. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 44
    Energy Electricity Spain (I) GNFs total production (GWh) +12.9% 7 198 7,198 8,124 -19.2% 606 -36.6% 36.6% 750 1,397 +5.0% 2,205 1,222 +416.2% 1,399 1,164 271 +24.6% 3,500 2,808 1Q14 1Q15 CCGTs Coal Nuclear…
  45. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 45
    Energy Electricity Spain (II) Electricity sales Average pool price EBITDA (GWh) (/MWh) ( million) +5.0% +90.4% +3.9% 8,742 9,178 47.38 205 213 24.88 1Q14 1Q15 1Q14 1Q15 1Q14 1Q15 Source: REE EBITDA favoured by…
  46. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 46
    Energy Cogeneration and renewables1 Total production (GWh) -19.2% z New 14 MW wind farm commissioned in 1Q15 (Cordal de Montouto) 750 606 49 -77.6% 11 z However, lower rainfall and wind 143 -2 8% -2.8% llevels l lead l d to…
  47. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 47
    GPG International power generation Production (GWh) 4,157 4,449 z Overall higher generation activity in +7.0% 7.0% Central C t lAAmerica i and d Caribbean C ibb z Bii Hioxo wind farm (234 MW) 1Q14 1Q15 already operational…
  48. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 48
    CGE Electricty distribution and transmission Electricity sales, sales Connection points (000) Electricity distribution (GWh) transported (GWh) +4.9% +2.8% +4.9% 2,798 2,875 4,219 3,682 3,861 4,023 1Q14 1Q15 1Q14 1Q15 1Q14…
  49. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 49
    CGE Gas distribution and LPG Sales Connection points (GWh) (000) Gas distribution 10,947 578 602 10,357 +5.7% +4.2% 1Q14 1Q15 1Q14 1Q15 Wholesales Sales to end customers (GWh) (GWh) LPG 1,135 1,152 1,560 1,428 1 5%…
  50. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 50
    Conclusions
  51. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 51
    An integrated and diversified business model EBITDA +11.8% and Net Income +0.5% showing a resilient business model CGE acquisition enhances GNFs international growth while maintaining a solid business model and risk profile GPGs…
  52. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 52
    Strategic Plan 2013-2015 targets (billion) 2015E EBITDA 5 0 5.0 Net Income 1 1.5 5 Net Debt / EBITDA 3.0x Dividend 62% Payout1 GNF maintains its commitment to accomplish the financial targets set in the Strategic…
  53. Q1 2015 Earnings Call – Gas Natural Fenosa – slide 53
    Th k you Thank INVESTOR RELATIONS telf 34 934 025 897 telf. 34 912 107 815 e-mail: relinversorgasnaturalfenosa.com website: www www.gasnaturalfenosa.com gasnaturalfenosa com

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