ENGIE Energia Perú Corporate Presentation September 2018
AGENDA ENGIE Energia Peru overview Capital structure Energy Market update Appendix ENGIE Energía Perú - Corporate Presentation / September 2018 2
ENGIE ENERGIA PERU OVERVIEW Largest private electricity generation company in Peru 2,497 MW of installed capacity & ~7,600 GWh of annual generation Diversified & decentralized portfolio of generation sources Others 5.5% 21 years operating in the country & listed since 2005 AFP´s (Peruvian pension Shareholders funds) 502 employees % 32.7% ENGIE 61.8% Diversified and solid client portfolio Strong financials to support ambitions, AAA local rating Sponsored by a global leader, ENGIE S.A. * ENGIE Energía Perú - Corporate Presentation / September 2018 3 * www.engie.com
SPONSORED BY A GLOBAL PLAYER: ENGIE S.A. GLOBAL LOW CO 2 POWER CUSTOMER GENERATION NETWORKS SOLUTIONS World leading independent European leader in gas 24m customers in Europe power producer infrastructures € 27bn (3) regulated asset Global leader in energy 103 GW (1) installed base in France solutions for cities +250 distribution heating & 12bn m 3 storage capacity ~90% low CO 2 cooling networks worldwide Expertise in power 23m individual and 26% renewables (2) transmission & distribution professional contracts Capacity breakdown EBITDA gas infrastructures EBITDA by type of business 89% low CO 2 5% 0.4 0.7 7% 6% €2.3bn (4) €3.8bn (4) 103 GW (1 ) 3.4 1.1 56% 26% 0.5 Natural gas Nuclear Other France Renewables (2) Coal B2B B2T B2C Other EU & International B2B: Business to Business B2T: Business to Territories (1) At 31/12/2017, at 100% (3) Incl. Storengy in France, regulated as from 01/01/2018 (2) Incl. pumped storage for hydro (3%) (4) 2017 EBITDA B2C: Business to Customers ENGIE Energía Perú - Corporate Presentation / September 2018 4
KEY MESSAGES Solid results in a volatile context Dynamic commercial strategy in a changing environment Value proposition for our clients and portfolio optimization Solid financial discipline and capital structure ENGIE Energía Perú - Corporate Presentation / September 2018 5
HIGHLIGHTS 2017 – H1 2018 SOLID RESULTS IN A VOLATILE CONTEXT - FY 2017 EBITDA reached 325.0MUSD while Net Result totalized 129.7MUSD , growing 5% and decreasing 1% - Total energy generation (SEIN) grew compared to FY 2016 1.4% compared to 2016 and 2.9% in H1 - H1 2018 EBITDA reached 142.7MUSD , 2018 compared to H1 2017 . As of June increasing 29% compared to H2 2017 2018, EEP maintained a leading position while Net result totalized 60.3MUSD in the sector as the first private player , increasing significantly compared to H2 accounting for 20% of the total capacity 2017 Industry & - Natural gas price declaration norm was Our business - On March 31 st EEP announced the regulation modified commercial operation of Intipampa solar project (41 MW) - At the end of 2017, total debt reached - ENGIE’s outstanding environmental, 837MUSD , decreasing 17% with respect to social and governance practices were 2016. At the end of H1 2018 total debt once more recognized. EEP was decreased to 787MUSD appointed by Capital Finance International - Bond issuance in local capital market for as The Best ESG Power Producer in ~70MUSD @ 10 years at an attractive rate Peru in 2017 for a 2 nd year in a row below 4.9% - In July, because of its recognized - 5.5 year Corporate Loan with Scotiabank Awards/ Financial standards of transparency and corporate for up to 150MUSD @3.3% governance, ENGIE entered the BVL Recognition discipline - Net debt / EBITDA (12m): 2.5x @ Good Corporate Governance Index Dec/2017; 2.9x @ Jun/2018 ENGIE Energía Perú - Corporate Presentation / September 2018 6
2017 – H1 2018 FINANCIAL RESULTS ∆ Q2 2018 ∆ H1 2018 ∆ FY (MUSD) Q2 2018 Q1 2018 Q2 2017 H1 2018 H2 2017 H1 2017 FY 2017 FY 2016 vs Q2 2017 vs H1 2017 Revenues* 127 132 147 -13% 259 253 319 -19% 576 641 -10% EBITDA 71 71 106 -33% 143 111 214 -33% 325 309 5% Net Result 30 30 55 -45% 60 20 110 -45% 130 132 -1% Recurrent EBITDA** 71 71 106 -33% 143 113 186 -23% 298 330 -10% Net Recurrent Result** 30 30 55 -45% 60 22 90 -33% 111 169 -35% Total Debt 787 799 951 -17% 787 837 951 -17% 837 1,009 -17% Net Debt 729 763 872 -16% 729 800 872 -16% 800 981 -18% Net Generation GWh 847 740 1,699 -50% 1,588 4,087 3,536 -55% 7,624 7,914 -4% Clients Demand GWh 2,155 2,116 2,196 -2% 4,271 3,822 4,536 -6% 8,358 8,976 -7% Net Debt / EBITDA 12m 2.9 2.6 2.6 12% 2.9 2.5 2.6 12% 2.5 3.2 -22% * Restatement by application of IFRS ** Does not include commercial penalty fees and impairment of assets Q2 2018 EBITDA stable vs Q1 2018 consolidating the commercial efforts taken during H2 2017 Q2 2018 EBITDA decreased -33% compared to Q2 2017 to 71MUSD, mainly explained by the end of SPCC PPA (April 2017) which was partially offset by new PPAs. Q2 2018 Net result was affected by lower EBITDA and higher D&A compared to Q2 2017 However EBITDA H1 2018 presents a pick up of 29% vs H2 2017 mainly explained by commercial efforts / clients demand Total debt decreased by 1.5% from March 2018, following the expected amortization schedule, and totalized 787MUSD ENGIE Energía Perú - Corporate Presentation / September 2018 7
EBITDA BREAKDOWN HIGHER PROPORTION OF INCOME WITH LOWER RISK BUT MANTAINING UPSIDES 5% 325 EBITDA 309 In US$ millions 28 Market risk + -23% 148 192 Market margin 50% 26% 143 Market risk + 111 68 62 43% Market risk - Capacity income +68% -1% 37 69 38 +13% Market risk - 33 50% 81 Investment agreements +69% 48 43 41 57% +5% with Government 2016 2017 H2 2017 H1 2018 ENGIE Energía Perú - Corporate Presentation / September 2018 8
LEADING PLAYER WITH STRONG PORTFOLIO OF ASSETS Yuncan Hydro 136MW #1 Quitaracsa Largest private electricity company Hydro 112MW Natural Coal; Gas; 963; Solar; 135; 39% 41; 5% 2% Chilca Complex 2,497MW Dual fuel; 1110; 44% • ChilcaUno - 852MW - Natural Gas • ChilcaDos - 111MW- Natural Gas Hydro; 248; 10% Low Co2 generation base Diversified & decentralized asset base across 4 regions Ilo Complex Nodo - 610MW - Dual Fuel Ilo31 (Cold Reserve) - Intipampa 500MW - Dual Fuel Solar 41MW Ilo21 - 135MW - Coal 282 km of transmission lines + 1 substation Value added customer solutions ENGIE Energía Perú - Corporate Presentation / September 2018 9
CONSISTENT COMMERCIAL STRATEGY FOCUS ON MANTAINING OUR EFFICIENT PORTFOLIO CONTRACTED + 380 MW 1 new contracts in 2017 + 57 MW 1 new contracts in 2018 +70% Number of clients grew from 45 (2016) to 78 (2018) Our portfolio & contracts Marcobre (84MW), Distriluz (30MW), Grupo Nexa (62MW), Quellaveco (35MW) + 1. Value quality and new services GROWTH POTENTIAL 2. Relationship plan with clients and new projects AGRESSIVE COMPETITORS 3. Internal reorganization to respond quickly to market Main SLOW GROWING DEMAND The market commercial 4. Continuous communication with pillars authorities, market and media REGULATORY UNCERTAINTY 1- Includes new contracts with free clients and existing expansions ENGIE Energía Perú - Corporate Presentation / September 2018 10
PORTFOLIO APPROACH Resilience in face of unfavorable market conditions Limited spot market risk • Diversification Fully contracted capacity for next 2 years and 91% on average for 2020-2021 • Average active PPA life of 5.4 years, new Increasing number of clients 80 PPAs to start in 2019 and 2020 70 • Most of EEP´s contracts do not include 60 termination clauses 50 Strong credit profile 40 • +50% of portfolio investment grade clients 30 & +70% above BB- (Or local equivalent) 20 in terms of sales 10 Low commodity risk - Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 • Indexation ~60% of portfolio to Natural Balanced portfolio Gas prices in line with generation costs Main commercial pillars • Value quality and new services • Relationship plan with clients and new 49% 51% projects • Internal reorganization to respond quickly to market • Regulated Free clients Continuous communication with authorities, market and media ENGIE Energía Perú - Corporate Presentation / September 2018 11
AGENDA ENGIE Energia Peru overview Capital structure Energy Market update Appendix ENGIE Energía Perú - Corporate Presentation / September 2018 12
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