1H 2014 RESULTS Conference Call , 8 August 2014
H1 2014 Consolidated Results Vector Cuatro Other Initiatives Outlook 2
H1 2014 HIGHLIGHTS Euro millions ∆ vs Jun 13 ∆ % Jun 14 Jun 13 INSTALLED CAPACITY - MW 726 + 46 680 + 7% ENERGY PRODUCTION - GWh 897 - 90 987 - 9% REVENUES - €m 127.2 - 14.8 - 10% 142.0 EBITDA - €m 72.1 - 16.4 88.5 - 19% NET EARNINGS - €m 5.7 - 13.6 19.3 - 71% Starting from January 2014 , new IFRS 11 (JV’s accounting treatment) has been adopted and according to this principle investments in Frullo Energia Ambiente, La Muela and Palermo Energia Ambiente have been recognised by equity method. Also the 1H 2013, for comparative purposes, has been reclassified with the new IFRS 11 . 3
H1 2014 : KEY FACTORS 2014 Guidance • Poor wind conditions across Europe Operating • Low tariffs and no incentives in Spain √ • Penalties on non programmable sources (E.g.“minimi Business garantiti”, captured price) and on programmable sources √ (CIP 6) • According to the Framework Investment Agreement with Ongoing CII, FKR is actively in talks for the sale of the minorities in Activities Nutberry and West Browncastle wind farms • Results in line with expectations • Increasing contribution from the UK due to change of √ perimeter ( Nutberry - 15MW, full year - and West H1 2014 Browncastle -30 MW, one month) Results • Cash generation from operating plants and cash-in from √ the “Borea” deal with CII enabled a strong reduction of the Net Financial Position 4
1H 2014 FINANCIAL HIGHLIGHTS June June % millions of euro 2014 2013 Revenues 127.2 142.0 - 10.4% Net Operating costs (55.1) (53.5) Ebitda 72.1 88.5 - 18.6% Impairment test: % on Revenues 56.7% 62.3% 2014 2013 Depreciation - Amortization - Write Off (32.4) (33.0) (1.9 m) (4.1m) Operating result 39.7 55.5 - 28.5% % on Revenues 31.2% 39.1% Financial income and charges (25.3) (25.2) Equity investments 0.8 2.2 Earnings Before Taxes 15.1 32.4 - 53.4% Taxes (9.4) (13.2) Net Result 5.7 19.3 - 70.5% Minorities (3.0) (0.1) Net Group Result 2.7 19.2 June 2014 Dec 2013 millions of euro Net Invested Capital 1,103.3 1,106.9 Equity 505.4 378.8 Net Financial Position (597.9) (728.1) of which: Proj. Fin. and MLT no recourse (692.6) (690.8) NFP excluding Derivatives Instruments (531.2) (673.7) 5
E VOLUTION OF INSTALLED CAPACITY AND PRODUCTION B Y TECHNOLOGY B Y COUNTRY MW MW +6.8% +6.8% 680 726 680 726 42 23 France 16 42 23 35 Spain 318 Solar 273 16 34 UK WTE/Biomass 675 Italy Wind 342 343 630 1H 2013 1H 2014 1H 2013 1H 2014 GWh WASTE (KTON) -9.1% -8.2% 987 897 122 112 12 12 128 Solar 96 WTE/Biomass Wind 847 789 122 112 1H 2013 1H 2014 1H 2013 1H 2014 Also the 1H 2013, for comparative purposes, has been reclassified with the new IFRS 11. 6
F INANCIAL HIGHLIGHTS : REVENUES AND EBITDA Euro millions Revenues by Technology Revenues by Country 142 €m 142 €m 127 €m 127 €m 2.6% 3.8% 3.3% 2.2% 3.8% 22.0% 0.6% 26.9% 20.1% Solar 34.2% France Wte/Biomass Spain Wind 74.2% 76.1% UK 68.3% 61.9% Italy 1H 2013 1H 2014 1H 2013 1H 2014 EBITDA * by Technology EBITDA by Country 88.5 €m 4.5% 10.6% 2.5% 72.1 €m 4.9% 4.5% 4.8% 4.0% 25.1% France 0.5% 37.4% Solar Spain 84.9% Wte/Biomass 90.6% UK 67.6% Wind Italy 58.1% 1H 2013 1H 2014 1H 2013 1H 2014 * Breakdown of EBITDA by technology made on total Ebitda gross of holding impact 7
E BITDA 1H 2014 VS 1H 2013: KEY FACTORS Euro millions 95.1 (6.6) 88.5 (12.8) 2.4 (3.8) (3.1) 72.1 0.3 0.6 Nutberry and West Browncastle H1 2013 IFRS 11 Adj H1 2013 Net Volumes Perimeter Prices Trezzo Exchange rate Other H1 2014 IFRS11 Change Break Down 8
F INANCIAL HIGHLIGHTS : CASH FLOW Euro millions Exch Derivatives Cash Flow NFP December CAPEX net of difference on Fair Value from 2013 Disposals assets Variation Operations Cash from CII Subloan CII Dividends NFP June 2014 €139 m (47) (15) (598) 186 (728) (22) (16) (12) 56 9
F INANCIAL HIGHLIGHTS : NET FINANCIAL POSITION 1/2 Euro millions NFP B REAKDOWN D ERIVATIVES IMPACT ON NFP (4) (728) (22) 144 (27) 120 (49) (67) (598) (598) (674) (693) (531) NFP Cash SPVs PF Deriva- FKR Subloan MLT Other NFP excluding Cash tives Corp. CIP Loans net derivatives Derivatives Loan & debts Local Comm. (67) (54) December 2013 June 2014 10
F INANCIAL HIGHLIGHTS : NET FINANCIAL POSITION 2/2 Euro millions P LANT UNDER CONSTRUCTION / IN OPERATION P ROJECT FINANCE HEDGED 2.0% 25.2% 12m€ 175m€ 74.8% 518m€ 98.0% 586m€ Unhedged pf Hedged pf Under Development and Construction Operating 11
H1 2014 Consolidated Results Vector Cuatro Other Initiatives Outlook 12
FKR THREE PILLARS STRATEGY Co-development of the FKR portfolio with strategic partners to PARTNERSHIPS continue the business as usual in different countries Developing a service division with the aim to cover the whole SERVICE value chain in the renewable energy industry in order to DIVISION extract more value from the Assets (inside and outside the Group) and to manage the market rule Creation of an innovation division to propose new products and processes for Energy Hubs capable of optimizing the INNOVATION performances of the renewable assets and their integration with the grids 13
FKR AND V ECTOR C UATRO COMPETENCIES • Strong commercial acumen and client • Market competencies from an asset owner acquisition skills resulting in solid client point of view: knowledge of the renewable relationships energy markets (wind, solar, WTE and biomass) • Deep-rooted service provider mentality to solve the client's needs and meet his expectations • Technical competencies also to improve asset + • Asset Management (Performance monitoring & performances through integration reporting, maintenance & troubleshooting) and Engineering competencies (Development & • Portfolio management construction supervision) • Mainly PV but also WIND competencies • Finance & Incentives (Development, Permitting and Engineering) • • Cohesive, highly motivated, young, dynamic Strong experience in the wind sector and internationally minded management team The integration will bring several competencies that are required to be successful in the market, speeding up change 14
V ECTOR C UATRO PROFILE Vector Cuatro S.L. is a Spanish company active in the management of the whole value chain of energy projects : from advisory to structuring, from engineering to management and administration of renewables facilities The company has been founded in 2007 by Borja Escalada, CEO and major shareholder of Vector Cuatro (~ 51%). The management team owns, directly and indirectly, the remaining 49% of the capital. Vector Cuatro is currently managing around 934 MW of third party assets with a team made of around 100 employees Main presence in Spain, Italy, France with significant opportunities growth in Japan, Mexico and other countries ( North America, South Africa , Bulgaria) 15
V ECTOR C UATRO DIRECT PRESENCE AND ACTIVITIES Spain Japan France • Asset Management • Asset Management • Engineering • Engineering • Engineering • Transaction &legal ser. • Legal services • Transaction &legal ser. Canada • Asset Management Mexico Italy Bulgaria Start-up: • Asset Management • Asset Management • Asset Management • Engineering • Engineering • Transaction &legal ser. 16
V ECTOR C UATRO PRESENCE 833 MWs * Asset 1) Management (MWs under management) 2) 4,020 MWs Engineering services (historical MWs) 3) 3,501 MWs Transaction services (historical MWs) Direct office presence of Vector Cuatro * As of 31 December 2013 17
V ECTOR C UATRO ACTIVITIES Asset management • Operational management : periodical site visit; daily 2013 REVENUES BREAKDOWN performance monitoring, enforcement of the terms of agreement of the plant’s service providers, insurance company claims, management of the providers, drafting of Legal Transaction 2% Services service reports; 7% • Reporting, accounting and fiscal activities ; • Management of SPVs Engineering 18% Engineering : design and optimization, construction supervision, technical due diligence, both of projects and under-operation facilities Transaction services : development & identification of opportunities, financial advisory, technical & financial due diligence, design and structuring, fund raising, financing and Asset investment closing, divestment Management 73% Legal services : legal support and legal advisory 18
A LONG TERM PORTFOLIO WITH BLUE CHIPS CLIENTS Vector Cuatro has a blue chip customer portfolio mainly composed of financial and industrial players investing in the renewable sector Entry services are usually transaction and engineering services , which are used to establishing a trusted relationship and recognition 48% of contracts in terms of revenues has a long term duration between 20 and 25 years (usually with a notice period of 1-2 years) and 33% has a Short/medium term duration between 2 and 5 years Asset Management activities are carried-out by a state-of-the-art IT platform , which includes both in–house tools and customized developments based on leading external solutions 19
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