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Madrilea Red de Gas FY 2016 Annual Results October 2016 Table of - PowerPoint PPT Presentation

Jul 23, 2023 •111 likes •287 views

Madrilea Red de Gas FY 2016 Annual Results October 2016 Table of Contents Executive Summary 3 Operating Overview 7 Financial Overview 10 Main takeaways 14 Executive Summary This presentation provides a summary of MRGs FY2016

  1. Madrileña Red de Gas FY 2016 Annual Results October 2016

  2. Table of Contents Executive Summary 3 Operating Overview 7 Financial Overview 10 Main takeaways 14

  3. Executive Summary  This presentation provides a summary of MRG’s FY2016 financial results, with total revenues of €165.3MM; EBITDA of €134.2MM; and cash flow available for debt service at €102.1MM (YoY growth of 5%); FY16 results reflects the stability on the regulatory framework  The company achieved a YoY net growth of 0.9% in its customer base, and currently serves c.853,056 connection points distributed over 59 municipalities in the Region of Madrid  MRG has expanded its natural gas network in the municipality of Vellón and has started the operation of two satellite LNG plants to supply the municipalities of Valdetorres, and Zarzalejo  Continuing our strategy to growth in Madrid territory, MRG entered into an agreement to purchase 42,000 piped Liquefied Petroleum Gas (LPG) connection points from Repsol to be converted into Natural Gas in the following years  The company has completed the implementation of a fully operative SCADA system with full control of its network  On March 15th, 2016, Lancashire County Pension Fund acquired 12.5% stake in MRG joining the consortium of long term infraestructure investors formed by Gingko Tree Investment Ltd, PGGM and EDF Invest  MRG considers the financial strength as a essencial base to maintain strong solvency an liquidity ratios consistent with investment grade rating. In this context, MRG increased the working capital and capex credit facility up to €175MM and issued €75MM bond under its €2bn EMTN Program 3

  4. MRG Corporate Overview Key Corporate events Key Figures 2012-2016 YE 30 June  On March 15 th Lancashire County Pension Fund entered into €M the consortium formed by Gingko Tree Investment Ltd, PGGM 300 100% 83% 83% 82% 82% and EDF Invest with 12.5% stake, all of them joining the same 81% 250 investment philosophy: stability and long term view 80% 180,8 177,3 176,8 200 166,1 165,3  On June 9 th MRG entered into an agreement to purchase 150 60% 42,000 piped Liquefied Petroleum Gas (LPG) connection points 100 from Repsol to be converted into Natural Gas in the following 40% 50 years 0 20%  On first half of 2016 the company increased the working capital FY2012 FY2013 FY2014 FY2015 FY2016 and capex credit facility up to €175MM and issued €75MM Revenues EBITDA Margin bond under its €2bn EMTN Program Source: MRG Development of Connection Points (2011-2016) Legal Structure Revenue Breakdown (FY2016) YE 30 June YE 30 June '000 €M 822 830 835 839 853 845 200 4,5 165,3 23,5 700 137,3 150 100 500 50 300 2011 2012 2013 2014 2015 2016 0 Regulated Other Non-Regulated Total FY2016 Remuneration Regulated Revenues Revenues Source: MRG Source: MRG 4

  5. MRG Shareholders MRG is owned by a consortium of four experienced long-term infrastructure investors  Created in July 2013 as the new investment arm of EDF investing in unlisted assets (primarily infrastructure along with real estate and private equity)  Part of an existing portfolio of €23bn “dedicated assets” to cover EDF’s nuclear plant decommissioning obligations  Selected investments: RTE (French monopoly electricity operator), TIGF (leading gas transport and storage company in France), Porterbrook (major rolling stock leasing company in the UK), Géosel (oil storage in France) and Thyssengas (German gas transport company in Germany)  JCSS Mike SARL is an entity managed by Gingko Tree on behave of their ultimate beneficial owner  Gingko Tree was established in 2010 to invest in infrastructure and real estate investments  PGGM is a cooperative Dutch pension fund service provider offering its institutional clients pension fund management, asset management, policy advice and management support, with over €200bn in assets under management as of September 2016  PGGM has been active in infrastructure sector for over 10 years and has invested approximately €7.5bn in infrastructure assets and companies worldwide as of September 2016  Selected investments: Globalvia (a portfolio of road and metropolitan rail concessions in Spain and Latin America) and Ennatuurlijk (one of the largest heating network portfolios in the Netherlands)  Lancashire County Pension Fund is one of the largest funds in the Local Government Pension Scheme in the UK  On 15 March 2016, it acquired a 12.5% stake in Elisandra IV, S.L which is the ultimate parent company of MRG  Long term owners looking to match investment returns to long term obligations Aligned  Investment Growth capital available Philosophy  Prudent approach to capital structure Source: Company Information 5

  6. Table of Contents Executive Summary 3 Operating Overview 7 Financial Overview 10 Main takeaways 14

  7. Operating Overview Key Operating Data Units FY2015 FY2016 Change % Connection points # 845,588 853,056 0.9% 0.9% < 4 bar 845,489 852,965 > 4 bar 99 91 (8%) Gas distributed GWh 9,083 9,534 5% < 4 bar 8,378 8,879 6% (7%) > 4 bar 705 655 Network length km 5,597 5,691 1.7% Municipalities (total) # 59 59 - New municipalities with active CPs # 3 2 (33%) Source: MRG; Fiscal year ending on June 30 Commentary  MRG operates over 853,056 connection points as of closing of FY2016, with a net growth of 0.9% versus past fiscal year  Network length grew by 1.6% up to c. 5,691 km over the existing municipalities  Higher volume of gas distributed during the fiscal year has been driven by more normalized temperatures and economic cycle recovery  Liquefied natural gas (LNG) plants have been commissioned in two new municipalities within the MRG territory in order to efficiently expand its distribution network  Aligned with its business expansion strategy, MRG has entered into a Sale Purchase Agreement with Repsol for the acquisition of the network and other related assets currently supplying c. 42,000 LPG connection points, with the intention to convert them into natural gas consumers within the following years 7

  8. MRG Key Initiatives MRG Committed to the Development of Natural Gas  MRG extended its network to the municipality of Vellón and started the operation of two LNG plants, Valdetorres de Jarama, and Zarzalejo  MRG has strengthen its commercial focus in the high consumption segment of small and medium enterprises  In order to incentive the replacement of old natural gas boilers and the access to natural gas potential consumers, MRG has extended its cooperation with Asefosam (regional association of gas installers) and Comunidad de Madrid  MRG network currently serves three public and seven private compressed natural gas (CNG) stations, facilitating CNG supply to an increased number of vehicles in Madrid and enhancing the penetration of natural gas in this promising segment 8

  9. Table of Contents Executive Summary 3 Operating Overview 7 Financial Overview 10 Main takeaways 14

  10. Key Financials Income Statement - €MM Commentary  EBITDA similar than FY15 as a reflection of stable regulatory 2015 2016 12 month period ending on 30 June framework, better EBIT and NIAT driven by lower non Remuneration 140.0 137.3 recurring expenses and lower CIT rate Other regulated revenues 21.9 23.3  Interest expense of €34.9MM fully reflect the recurring costs Non-regulated revenues 4.1 4.7 of MRG’s capital structure Variable costs (12.8) (13.9)  Overhead costs (17.6) (17.2) €500MM senior unsecured notes due Sep 2018 EBITDA 135.7 134.2  €275MM senior unsecured notes due Dec 2023 Margin 81.7% 81.2%  € 75MM senior unsecured notes due March 2031 EBIT 102.0 103.1  €175MM liquidity and capex revolving credit facility Margin 61.4% 62.5% due Feb 2020 Interest expense (34.3) (34.9) Income tax expense (20.0) (18.9) Net Income 47.6 49.3 Source: MRG Cash Flow Statement - €MM Commentary  Cash flow available for debt service is reported at €102,1MM, 2015 2016 12 month period ending 30 Jun 5% higher versus FY2015 EBITDA 135.7 134.2  Lower income tax payments resulting from decrease in pre- Income tax paid (18.3) (12.0) tax results and from application of temporary tax measures in Working capital 0.8 (4.4) place until FY2017 Capex (21.0) (15.7)  Cash Flow Available for Debt Higher working capital, compensated by lower expansion 97.1 102.1 Service capex has contributed to increase cash generation Source: MRG 10

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