Investors Presentation - January 2020 - EDP Renewables
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Investors Presentation
January 2020
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of McKinsey & Company is strictly prohibitedDisclaimer
This presentation has been prepared by EDP Renováveis, S.A. (the "Company“; LEI 529900MUFAH07Q1TAX06) solely for use at the presentation to be made on January, 2019. By attending the meeting where this presentation is
made, or by reading the presentation slides, you acknowledge and agree to be bound by the following limitations and restrictions. Therefore, this presentation may not be distributed to the press or any other person, and may not
be reproduced in any form, in whole or in part for any other purpose without the express consent in writing of the Company.
The information contained in this presentation has not been independently verified by any of the Company's advisors. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be
placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. Neither the Company nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in
negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.
This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company or any of its subsidiaries in any jurisdiction or
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Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The words “believe”, “expect”, “anticipate”, “intends”,
“estimate”, “will”, “may”, "continue”, “should” and similar expressions usually identify forward-looking statements. Forward-looking statements include statements regarding: objectives, goals, strategies, outlook and growth
prospects; future plans, events or performance and potential for future growth; liquidity, capital resources and capital expenditures; economic outlook and industry trends; developments of the Company’s markets; the impact of
regulatory initiatives; and the strength of the Company’s competitors. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although the Company believes that these assumptions
were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond
its control. Such risks, uncertainties, contingencies and other important factors could cause the actual results, performance or achievements of the Company or industry results to differ materially from those results expressed or
implied in this presentation by such forward-looking statements.
The information, opinions and forward-looking statements contained in this presentation speak only as at the date of this presentation, and are subject to change without notice unless required by applicable law. The Company
and its respective agents, employees or advisors do not intend to, and expressly disclaim any duty, undertaking or obligation to, make or disseminate any supplement, amendment, update or revision to any of the information,
opinions or forward-looking statements contained in this presentation to reflect any change in events, conditions or circumstances.
-2-Agenda
1 Our Execution
2 Our Sector
3 EDP Group vision
4 Our Strategy
5 Annex
-3-Our execution
-4-EDPR has successfully executed its 2016-20 strategic agenda…
Selective growth Self-funding Operational excellence
Presented in May-2016 Presented in May-2016 Presented in May-2016
3.5 GW up to €1.1bn -1% Core Opex/MW
2016-20 proceeds from assets sale CAGR 2015-20
Prioritize quality investments Sale of stakes to keep enhancing Unique O&M strategy to keep
in our core markets value growth lowering Core Opex/MW
4.0 GW secured €1.1bn cashed-in -2% Core Opex/MW
for 2016-20, EU assets asset rotation (2016), offshore CAGR 2015-18
of which 2.2 GW already built stakes & Sell-Down (Dec-18) delivering 2020 target in 2018
-5-…delivering 2 years in advance and above target at the bottom-line
EBITDA evolution1 Net Profit evolution2
€bn €bn
+7% +43%
CAGR 15-18 CAGR 15-18
€0.3bn €0.3bn
€1.55bn
€1.3bn €1.3bn €0.2bn
€1.06bn
€0.1bn
2015 2018 2018 2020 2015 2018 2018 2020
Target Actual Target Target Actual Target
EBITDA increasing at 7% CAGR vs 2015, despite unexpected …which along with financial results improvements and gains, allowed
regulatory adjustments and lower 2018 wind-resource… EDPR to deliver more than €300m of net profit in 2018 vs target 2020
(1) Considers 2015 Adj EBITDA of €1.06bn; (2) Post-2015 considers useful life at 30 years
-6-Our sector
-7-EDPR operates in a sector with an increased competitiveness
and solid outlook…
Wind and Solar are already cost competitive… …which along with solid fundamentals are driving demand across regions2
2018 LCOE1 [€/MWh] 2019-22E additions
CAGR • US: PTC phase-out; Increasing demand
18-25 North America drivers at State, Utility and C&I;
+67 GW
• CA: demand supported by auctions (20-yr FiT) >50% wind; >80% US
Nuclear 91 -%
• RES Targets & new governance based on EU
Europe coordination;
+84 GW
Coal 89 +1% >70% wind;…with high expected growth across regions and technologies,
with >60 GW avg per year until 2030
Expected renewables total installed capacity by region1… ...and per technology
Total installed GW; wind onshore, offshore & solar utilities Total installed GW; wind onshore, offshore & solar utilities
1,250 1,250
1,187 1,187
1,123 1,123
1,059 1,059
995 995 395
932 932 371
871 871 348
814 814 324
744 744 301
61 278 91
678 56 678 255 84
50 77
611 45 611 234 68
40 202 61
542 34 542 54
28 31 173 46
145 40
24 451 470 33
20 411 432 119 28
18 367 389 23
16 322 344 19
298 732 764
276 666 699
253 601 633
231 509 541 570
443 476
404
231 235 242 249 257 265 275 285
168 188 203 216
2019 20 21 22 23 24 25 26 27 28 29 2030 2019 20 21 22 23 24 25 26 27 28 29 2030
>60 GW >60 GW
avg year avg year
(1) Source: IHS; excludes China
-9-EDP Group vision
- 10 -EDP envisions to keep capitalising on a winning sector…
EDP is already a global leading renewables player1… ...and aims to strongly increase renewables weight
Source of generated electricity, TWh
~21 GW
of renewables capacity2 deployed worldwide Non-renewables
Top global wind player with ~12 GW
>9 GW in hydro, of which 4.3 GW with reservoirs,
and ~3 GW pumped hydro
>90% Renewables
>€20 Bn >70%
66%
deployed in renewables since 2006
75% in wind onshore 20%
40% in the US
2005 2018 2022 2030
(1) As of March 2019 (2) EBITDA + Equity GWs
- 11 -…and is committed to accelerate EDPR growth in the new
Business Plan 2019-22
EDP Group total investments… …to accelerate under new strategic plan… …with strong focus in renewables
€bn; 2016-18 Investments; €bn per year €bn; %
2.9
+60% Hydro, Networks;
Client solutions &
1.8 energy mgmt.
€5.7bn ~€12bn
2016-18 ~60%
2019-2022
~70%
EDPR
2016-20 targets 2019-22 targets
EDPR is the main growth driver EDP group to accelerate its EDPR continues to be the growth driver
of EDP, representing already growth plan, increasing annual of EDP, with new strategy planned to
~35% of group EBITDA investments under new strategy unlock EDPR development capabilites
- 12 -Our strategy
- 13 -EDPR is one of the largest wind energy producer, with a 10.7 GW
portfolio…
Canada 30
MW
UK
US
Poland
5,592 Offshore
under
constr. project
MW Offshore under 418
under constr.
develop. MW
200
Offshore 53
MW under Belgium
develop. MW Romania
Mexico France
Onshore
under 521
develop. Colombia Portugal
Italy MW
Brazil 1,164
MW Spain 271 project
MW under
330 develop.
2,120 Greece
MW
MW
As of Sep-19: Installed capacity includes EDPR’s Equity consolidated: 152 MW in Spain and 259 MW in the US;
Includes 145 MW of Solar PV and the deconsolidation of 137 MW in Brazil from Sell-down announced in 2H19 - 14 -…and has defined a new BP 2019-22 based on the same pillars and
complemented by an expanded growth and sell-down model…
Selective growth Self-funding Operational excellence
2019-22E 2019-22E 2019-22E
Solid value creation, investing in quality …enhanced by selling assets’ stakes, …and supported by distinctive
projects with predictable crystalizing value and accelerate core competences &
cash-flow stream… value creation… unique know-how
~ 7.0 GW cumulative build-out > €8.0 bn of investments 33% load factor in 2022
of which 74% already secured financed by sell-down & assets’ cash flow from additions of competitive projects
Geographical diversified: > €4.0 bn of sell-down proceeds > 97.5% availability
60% NA; 20% EU; 20% BR & New of which ~€1.3bn already announced technical expertise to maximise output
Technological diversified: €4.0 bn of net investments Core Opex/MW -1% CAGR 18-221
70% wind onshore; 25% solar; 5% offshore fully financed by assets’ CF generation from efficient O&M strategy
…unlocking EDPR’s full capabilities, by leveraging on core competences and by crystalizing upfront value
(1) Core Opex defined as Supplies & Services and Personnel Costs
- 15 -Selective growth: a 7 GW growth plan increasing geographical and
technological diversification
Capacity Build-out by region Capacity Build-out by technology
(GW; 2019-22) (GW; 2019-22)
with CoD until 2022;
excludes projects under
Other markets development1
North America (60%) Wind Onshore – 3.9 GW secured
Driven by RPS, C&I and coal/nuclear A competitive technology, in
10% retirements; EDPR has already which EDPR has competitive
secured 2.8 GW all with LT contracts advantage and know-how
10% 5%
~7.0 GW Europe (20%) ~7.0 GW 70%
1.8 GW avg/year 60% 25% 1.8 GW avg/year Solar PV – 1.1 GW secured
Supported by governance & PPA
20% Increasing competitiveness, and
appetite; EDPR has secured 1.0 GW
relevance in EDPR technological
wind/solar & 0.3 GW offshore
mix post-2020
Brazil (10%) & Other (10%)
BR: auctions/PPAs & stable Wind Offshore – 0.3 GW secured1
of which 74% already secured regulation (EDPR has 0.6 GW projects with long-term EDPR & ENGIE JV set to strengthen
through PPAs or tariffs awarded secured); New: Greece (0.1 GW); visibility & low risk profile company’s profitable offshore
Colombia (0.5 GW) growth and increase efficiency
Other: being analysed
(1) Includes UK (Moray East; 33% of 950 MW); Floating FR (35% 24 MW); Floating PT (54% of 25 MW);
Excludes FR (30% of 992 MW) and projects u/dev. (US Mayflower, UK Moray West and other under EDPR/ENGIE JV) - 16 -Selective growth: North America as the main market with 4.2 GW
target of which 2.8 GW already secured…
Projects already secured US Demand driven by increasing Build-out capacity breakdown
MW cost-competitiveness GW
Project Name MW Region CoD
Prairie Queen 199 Kansas 2019E
Timber Road IV 125 Ohio 2019E
Bright Stalk 205 Illinois 2019E under 2019
• Defined at state level
Hidalgo II 50 Texas 2019E RPS • RPS policies cover 56% of total US negotiation/ 0.7 2.8 GW
29 states + DC retail electricity sales identified
Nation Rise (CA) 100 Ontario 2019E
1.3 already
Broadlands I 200 Illinois 2020E secured
Headwaters II 198 Indiana 2020E
Rosewater1 102 Indiana 2020E • Coal (23% fleet): old & non-compliant 4.2 GW
Retirements w/environmental;
Crossing Trails 104 Colorado 2020E Coal & Nuclear • Nuclear: ~15 GW proposed until 2030 1.1
Reloj del Sol 209 Texas 2020E 2020
WildCat 180 Texas 2020E 0.4
Mexico project 100 Mexico 2021E 2022
• Renewable demand from RE100 0.6
Indiana Crossroad1 302 Indiana 2021E C&I PPAs companies is to grow to 123 TWh by
Riverstart 202 Indiana 2021E >6 GW in 2018 2022, 59% over 2017 levels 2021
Sonrisa 200 California 2022E
California Project 200 California 2022E
Golden Eye 139 East NA 19/20E
…and 1.3 GW to be secured in a competitive environment
(1) Build and Transfer project
- 17 -Selective growth: Europe supported by new governance model
and increasing appetite for private PPAs…
Projects already secured EDPR strategy per market Build-out capacity breakdown
MW GW
Country MW Status CoD
1.0 GW
Projects’ develop./ promotion 2019
29 U/ construction 2019E already
105 U/development 2021/22E Increasing relevance of Private PPAs 0.1 secured
under
negotiation/
47 Installed 2019 Concluding Ventinveste, OE & solar projects 0.4
identified 0.2 2020
279 U/ const. & dev. 2020/22E Develop pipeline for future growth
19 Installed 2019 Obtain permits for an identified projects 1.4 GW
95 U/ const. & dev. 2019/20E Develop wind & solar projects
50 U/ const. & dev. 2019 Preparing projects for new auctions
16 U/development 2019/20E Secure Private PPAs & Green-field
Preparing and optimizing projects 0.7
38 U/construction 2020E
Projects for new auctions; developing wind & solar 2021/22
327 U/ development 2020/22E
…with 1.0 GW already secured and 0.4 GW to be secured on both wind and solar technology
- 18 -Selective growth: Brazil set to increase its representativeness,
while continuing to analyse new markets opportunities
Developing portfolio of competitive projects Others: Selecting investment opportunities
with tariffs already secured In countries with strong long-term fundamental
10% 10%
0.1 GW Analyzing new profitable markets to increase potential growth:
Boqueirao & Monte Verde 0.5 GW Monte Verde &
CoD: 2022 Jerusalem CoD: post-2022 Strong fundamentals:
0.1 GW Catanduba renewable demand & good natural resources
0.1 GW From wind and solar resources
CoD: post-2022
Aventura
CoD: 2022 0.2 GW Santa Rosa & Mundo Competitive advantages:
Novo CoD: 2022 implementing our know-how in markets not yet matured
taking advantage of being pioneers
0.2 GW
Pereira Barreto Profitable:
CoD: 2021 long-term contracts and predictable cash-flow
Auction system and or private PPAs
1.2 GW
portfolio with PPAs
Greece:
already awarded of which
Executing projects awarded (45 MW in 2020 & 77 MW in 2021/22)
0.6 GW until 2022
Competitive projects with and 0.6 GW post-2022
Colombia:
>50% load factor (wind) Executing projects awarded (492 MW in 2022)
- 19 -Selective growth: Creating EDPR/ENGIE 50:50 joint-venture to focus
on a fastest growing renewable technology
Expected wind offshore global Combination of the right set of skills …and a EDPR/ENGIE 50:50 control
installed capacity1 along with a successful track record… structure with the right governance
Portfolio of
5.2 GW
(~3.3 GW net)
Energy management and offtake
CEO and COO: 3-yr mandates
+15%
CAGR Project management New opportunities
91
being screened
Business development
Initial CEO proposed by EDPR & COO by ENGIE
19 GW
GW Energy and risk assessment
JV operational
until 2019 YE
Procurement At the end of mandate, COO becomes CEO and
2019E 2030E the other partner proposes new COO
Towards a leadership position by combining complementary competences to accelerate growth, minimize risks and increase efficiency
(1) Source: IHS; excludes China
- 20 -Selective growth: Full integrated JV with 5.2 GW1 of pre-determined
offshore wind assets
PROJECT NAME TYPE CAPACITY COUNTRY EDPR ENGIE STATUS
Moray East Offshore-Fixed 950 MW 33.3% 23.3% U/Construction
Tréport & Noirmoutier Offshore-Fixed 992 MW 29.5% 31.0% U/Development
Moray West Offshore-Fixed 800-950 MW 67.0% 33.0% U/Development
Wind Float Atlantic Offshore-Floating 25 MW 54.4% 25.0% U/Construction
Leucate Offshore-Floating 30 MW 35.0% 45.0% U/Development
SeaMade Offshore-Fixed 487 MW - 17.5% U/Construction
Mayflower2 Offshore-Fixed 804 MW 50.0% - U/Development
B&C Wind Offshore-Fixed 400 MW 100.0% - U/Development
Total ownership with tariffs/PPAs (net MW) 1,035 MW 634 MW 1,669 MW
+ =
Total ownership (net MW) 2,237-2,338 MW 898-947 MW 3,135-3,285 MW
Offshore partners since 2013, with 1.5 GW of projects under construction and 3.3 GW of projects awarded
(1) Gross MW; equivalent to c.3.3 GW net; (2) Considers Mayflower lease up to 1.3 GW . Projects with tariffs/PPAs
awarded - 21 -Selective growth: Together a portfolio of 5.2 GW1 initial capacity
across 6 markets and defined growth targets
with tariff awarded
Moray East SeaMade B&C Wind
950 MW 487 MW 400 MW
Status: Construction Status: Construction Status: Development
JV Stake: 56.6% JV Stake: 17.5% JV Stake: 100.0%
CoD: 4Q 2022E CoD: 4Q 2020E CoD: post-2025
Moray West Tréport & Noirmoutier
800-950 MW 992 MW
Status: Development Status: Development
JV Stake: 100% JV Stake: 60.5%
CoD: post-2022 CoD: 2023/24E
Mayflower
804 MW
Status: Development
JV Stake: 50.0%
CoD: post-2022 Leucate (floating)
30 MW
Status: Development
WFA (floating) JV Stake: 80.0%
25 MW CoD: 2021E
Status: Construction
JV Stake: 79.4%
CoD: 2019E
(1) Gross MW; equivalent to c.3.3 GW net
- 22 -Selective growth: The Offshore JV has a clear investment framework
and selective yet ambitious growth targets
50:50 JV with selective investment criteria JV Growth Targets
Gross MW
Sound market fundamentals 1.5 5-7 Operational
& Under construction
GW1 GW
Stable regulatory frameworks
Contracted NPV (i.e. cash-flows visibility)
Compliance with target risk return profile ~4.0 5-10 Under advanced
GW1 GW development
Maximize projects self-funding
Today 2025E
This JV is set to pave the way for a greener future, by strengthening offshore growth, increasing efficiency and returns
(1) Gross MW; 1.5 GW Under construction equivalent to 0.6 net GW and ~4.0 GW Under advanced development
equivalent to ~2.6 net GW - 23 -Sell-down strategy: set to create extra value through the sale of
majority stakes, without increasing capital employed
Sell-down strategy rational… …to propelled extra-growth & value… …and extra-value
(incremental value created at project execution) (Benefits of the Sell-down strategy) (Sell-down: Sale majority stakes)
(2019-22)
Value
Capital recycle
up-front cash-flows crystallization by
selling majority stakes Sell-downs ~50% of 7 GW
Build to Sell (capacity)
Value Creation
gains accounted in P&L and proceeds
to be re-invested in accretive growth Proceeds > €4bn
To own
(Equity & Debt)
(value captured
throughout Service charge
30-yr life) providing operating and maintenance
services in exchange for management fee Visible value creation in Net Profit
Year 1 Year 2 Year 3 Year 4
Less capital intensive Recycling capital and creating value ~€0.7bn of Capital gains in 2019-22
- 24 -…with €1.1bn Sell-down transactions announced, crystalizing value
and accelerating value creation
Sell-down transaction announced1 Rationale2
Scope Assets age Status Proceeds EV/MW Capital Gains 7-11%
(average) (pre-tax; booked in EBITDA) 4-5% spread
997 MW 8 Closed €0.8bn €1.6m €226m
491 net MW years 3Q19 per MW (eq. to €0.4m/MW)
high 10s%
low-mid 10s% spread
137 MW 1 Pending €0.3bn €2.2m n.a.
137 net MW year 4Q19E per MW (n.a.)
IRR IRR
Selling Re-investing
Sell-down of EDPR’s full equity in two onshore wind portfolios executing its …capturing value created & propelling new
2019-22 target of >€4.0bn proceeds, with €1.3bn to be concluded in 2H19… projects execution with superior returns
Creating extra value through the sale of majority stakes, without increasing capital employed, and re-investing at higher returns
(1) subject to customary closing adjustment; (2) Illustrative and non-exhaustive; Reinvesting IRR at 7-11% excludes
Brazilian projects - 25 -Operational excellence: EDPR core competences and unique
know-how set to maximize efficiency
Wind assessment know-how …and highly experienced teams …set to maximize efficiency
to maximize asset value… delivering unique O&M strategy… and optimize costs
O&M contract breakdown (avg MW;%) Core Opex/ avg. MW
New MW with above average optimizing O&M activities by increasing
33% load-factor internalization at the end of initial -1%
NCF
vs 2018: 30% (94% P50) contract warranty CAGR
Predictive maintenance and
>97.5% O&M strategy are key to Full scope
TEA contracts
reduce downtime
M3 &
52% 60%
Driven by accretive Self-perform
+7% GWh contributions from new
CAGR
capacity additions 2018 2022E 2018 2022
In addition to saving programs and initiatives (e.g. OBZ, OPEX V and US Cost Reduction Program) in place to increase efficiency
- 26 -EDPR’s 2022 agenda and the 3 strategic pillars will unlock our full
capabilities…
Growth:
increasing EDPR own portfolio at a faster pace…
Operational excellence Sell-down:
…given extra-visible value generated to speed-up growth…
Selective growth
Diversified:
…with technological & geo mix (new markets momentum)…
Self-funding O&M know-how:
…propelled by assets’ management core competences…
Efficiency mind-set:
…and cost-control focus and saving programs implementation
- 27 -…to deliver solid and ambitious growth targets through 2022…
Capacity build-out Excellence in operations Less capital intensive Excel at operational results Unlocking bottom-line
MW TWh Sell-down EBITDA Net Profit
New capacity being From MW to own with Generating extra value From capacity additions, From growth, recurrent capital
technological & output propelled by superior without increasing operating efficiency and gains, controlled cost of debt
geographical diversified load-factor & availability capital employed sell-down strategy and solid balance sheet
2019-22E 2018-22E 2019-22E 2018-22E 2018-22E
~7.0 GW1 +7% CAGR TWh >€4.0bn proceeds +6% CAGR +11% CAGR
…positioning EDPR to successfully lead a sector with increased worldwide relevance
(1) Of which ~50% to own.
- 28 -Annex - 29 -
9M 2019 Results
- 30 -EDPR operational performance on track to deliver solid growth, along with the execution of
Sell-down strategy
Quality Selective and Self-funding
assets profitable growth business
30% load factor (vs. 30% in 9M18) +344 MW built YTD €1.0bn of Sell-down YTD
96% of LT avg. with 3Q19 @ 98% 1,156 MW Sold-out from EU (491 net MW; €0.8bn) &
Availability @ 97% (vs 97% in 9M18) 1,164 MW already under construction US sell-down tax-equity proceeds
Revenues at €1,364m (+10% YoY; +€125m) €63m Net Debt & TEI decrease
Already secured c.70% of ~7.0 GW cumulative
MWs (+€46m), Price (+€49m), NCF (+€11m), from growth & investments, keeping
19-22 build-out target
PTCs (-€27m) and FX (+€34m) solid balance sheet
Adj. Core Opex/ avg. MW flat YoY(1) €1,218m EBITDA (+40% YoY) Optimizing Cost of Debt and TEI Costs
given cost control in the including €226m from 491 net MW Sell-down gain Debt: 4.0% Sep-19 (+0.1pp YoY; on different mix);
context of a growth strategy (+36% YoY ex-IFRS16) Avg TEI: 6.7%
96% of Revenues fixed for 2019(2) Net Profit €342m (vs €115m in 9M18) Operating Cash Flow(2) at €838m
€56/MWh avg. price (+5% YoY) on top-line performance and Sell-down execution +9% YoY from top line performance
(1) Core Opex per average MW adjusted by IFRS16, offshore costs (mainly cross-charged to projects’ SPVs), one offs and FX
(2) at Sep-2019 - 31 -EDPR built 344 MW YoY reaching 10.8 GW after Sell-down transactions
MW Under Evolution of Installed Capacity(1)
Built YTD Construction (EBITDA MW + Equity Consolidated)
+199 MW +680 MW2
12,016
344
11,672
+145 MW +154 MW
(1,156)
- -
10,860 10,836
(24)
54%
- +330 MW3 • US: PQ (80% of
199 MW; 3Q19) 42%
• EU: 997 MW (Net 4%
+344 MW +1,164 MW 491 MW; Jul-19)
Dec-18 MW Built Sell-down Sep-19 Re-powering Portfolio
YTD EDPR built 344 MW, sold 1,156 MW and kept 1,164 MW under construction (including stake in UK offshore)
(1) Incl. equity consolidated: 152 MW in Spain & 259 MW in the US;
(2)Bright Stalk (205 MW), Broadlands (200 MW), Timber Road IV (125 MW), Hidalgo II (50 MW) and Nation
Rise (100 MW) on which an 80% stake was sold in Dec-18 (keeping the responsibility to build the project);
(3) Includes 316 MW of EDPR stake in UK Moray and 14 MW from Windplus floating in Portugal - 32 -In the 9M19 EDPR achieved a 30% load factor (vs 30% in 9M18) reflecting 96% of
P50 (long term average for 9M)…
Load Factor and Technical Availability(1) EDPR Quarterly Load Factor vs. Long-term average
(%) 2018 2019
9M19 ∆ YoY 9M19 vs. LT avg.
+5%
26% +1pp 99% -
95%
-1% -2%
33% -1 pp
-7% -8%
41% +1 pp 89%
-11% -12%
30% +1 pp 96% 1Q 2Q 3Q 4Q
EDPR 96.9%
Availability1 -0.1 pp
…while in the 3Q19, EDPR reached a 25% load factor (vs 22% in the 3Q18),
with QoQ comparison benefitting from higher wind resource (P50 of 98% vs 89% in 3Q18)
(1) Technical Energy Availability (TEA) - 33 -Electricity output higher 6% YoY, with capacity additions over the period and load
factor offsetting impact from EU assets deconsolidation
Electricity Production
TWh (TWh)
% YoY
Driven by new capacity and higher
wind resource (despite the +6%
+5%
+4% deconsolidation of 977 MW in Jul-19
related to the EU portfolio Sell- 21.9
down) 20.7 +0.2
+1.0
From new installed capacity,
+4% offsetting lower wind resource
Driven by capacity additions and
+50% higher wind resource
9M18 ∆ MW ∆ Load Factor 9M19
EDPR produced 21.9 TWh of clean electricity (+6% YoY), avoiding 15 mt of CO2 emissions
Geographical output breakdown: 55% in North America, 39% in Europe and 6% in Brazil
- 34 -Avg. price at €56/MWh (+5% YoY) mainly driven by Eastern Europe price recovery,
higher prices in Spain, US and Brazil, along with favorable FX translation
EDPR Price Evolution
9M19 % YoY(1) (€/MWh)
SP higher price +4% (higher realised
price); RoE +7% (mainly due to RO &
€80.0 +3% PL recovery); +5%
PT -2% (from new additions)
€53.7 €56.1
+3% ex-fx
US (+2%): primarily due to new
MWs in operation
$46.3 +1% CAN (-3%): +1% in local currency
MX: (+1%) from PPA @$65
Different mix of a new wind farm in
R$205 +6% operation vs 9M18 & inflation linked
9M18 9M19
Average selling price totalled €56/MWh (+5% YoY), on the back of positive price performance and FX
(1) Calculated in local currency - 35 -Revenues increased 10% YoY given higher avg. EBITDA MW (+3%), higher avg. price
(+5%) and positive forex, despite scheduled PTCs expiration
Revenues
Main drivers for Revenues performance (€ million)
Higher output: +6% YoY; +€58m (NCF: +€11m; MW: +€46m) +10%
1,364
from load factor and higher avg. MW (+3% YoY; including 1,239 +7% ex-fx
impact from deconsolidation of 997 MW in EU)
Higher average selling price: +5% YoY; +€46m
mainly driven by price recovery in Spain
and Rest of Europe
Forex impact & scheduled 10 years PTCs expiring
PTCs expiring (10-year life): -€27m
Impact from FX: +€34m 9M18 9M19
Revenues increased €125m mainly driven by capacity in operation (+€46m), higher price (+€49m), forex translation
(+€34m), slightly higher wind resource (+€11m) despite scheduled PTCs expiration (-€27m)
- 36 -Core Opex per Avg. MW Flat YoY given O&M strategy and cost control offsetting
the requirements needed to cope with Business Plan expanded growth
Opex (excludes Other Operating Income) (1)
(€ million) Core Opex/Avg. MW (€k)
(Supplies & Services and Personnel Costs)
-3%
reported
31…
+5%
29.3
Levies & IFRS 16 (€34m)
ex-IFRS16
Non-recurrent
Core Opex(2) -6%
-3% Flat(3)
adjusted
+7%
ex-IFRS16
9M18 9M19 9M18 9M19
Core Opex increasing YoY on the back of higher installed capacity while Adj. Core Opex/ Avg. MW was flat YoY
(1) Reported figures presented; for YoY analysis purposes, was included impact (€34m) from IFRS16
in 9M19; (2) Includes Supplies and Services and Personnel Costs; (3) Core Opex/avg MW adjusted by
IFRS16, offshore costs (mainly cross-charged to projects’ SPVs), one offs and FX - 37 -Delivering EBITDA of €1,218m (+40% YoY) from the execution of Sell-down strategy,
top line performance and IFRS16
EBITDA YoY EBITDA per Region(1)
(€ million) (%)
+40%
Portugal
+37% ex-fx 25%
1,218
(13)
+211 RoE
869 +125 13%
Includes capital gain
(€226m YoY) from
Spain €1,218m Braz…
Sell-down in EU 23%
(997 MW; 491 net MW)
North America
9M18 Other Operating 9M19
Revenues Income Cost 36%
EBITDA totalled €1,218m (+40% YoY),
being +36% YoY if excluded impacted from IFRS16 given top line performance
(1) Includes hedges from Spain, Rest of Europe and US - 38 -Net Profit totaled €342m (+197%), with YoY comparison driven by top-line
performance and a Sell-down transaction
9M19 EBITDA to Net Profit
(€ million)
€m YoY
1,218 Operating performance driven by top-line &
EBITDA +€349m
gains related to Sell-down transaction
D&A 435 -€37m Effect from YoY capacity additions and IFRS16
EBIT 784 +€312m As a result of top line performance
Financial 277 YoY comparison impacted higher avg. nominal
-€59m
Results(1) Debt, IFRS16 and forex
Taxes 51 Effective Tax Rate of 10% in 9M19 (from tax
-€26m
exempted capital gains; includes CESE)
113 +€0.5m Reflecting top-line performance from strategic
Minorities
partnership assets and asset rotation program
Net Profit 342 +197% YoY +227m Net profit totalled €342m
(1) Includes Share of profit of associates - 39 -Cash Flow generation with RCF at €636m, +8% higher YoY
9M19: Retained Cash Flow (RCF) 1
(€ million)
+40%
1,218
(231) +8%
(18) 862
(251)
(8… 636 226
Includes the capital gain of
the EU portfolio Sold-down;
€226m cashed-in
EBITDA Non-operating Current Interests, Dividends & RCF Sell-down RCF w/
cash adjustments income TEI, fees & interests to gains Sell-down gains
taxes derivatives Minorities
RCF(1) of €636m (vs €590m in 9M18) YoY propelled by operating performance and impacted by PTC 10-year
expiration and higher interests on debt increase (following growth capex).
(1) Note that RCF includes tax benefits generated by the projects in the US under the TE structures,
which are not included in the Organic Free Cash-flow concept; - 40 -Solid balance sheet with Net debt and Tax Equity decreasing by €63m...
2019 from RCF to Debt and TEI variance
(€ million) 9M19 Debt and TEI Breakdown (%)
+8%
7%
TEI Other
(384) €1.2bn & TEI
636 63% 40%
(61)
(127) Gross
Debt Loans
63 with EDP
€3.6bn
30% 60%
RCF Cash Dividends to Forex Net Debt
Invest.(1) EDPR & Other and TEI
Shareholders decrease Debt & TEI Currency Type
...to €3.0bn of Net Debt and €1.2bn Tax Equity
(1) Cash investments include Capex (net of projects sold), Net financial investments and Changes in
working capital related with PPE suppliers and Government Grants - 41 -EBITDA performance benefitting from gain on Sell-down strategy execution…
EBITDA YoY variance walk by driver
(€ million)
+40%
YoY
+4% +35%
226 1,218
82
869 34 25 900 11
(27)
Scheduled Mainly USD
9M18 PTC IFRS16 Forex Load Business Sell-down 9M19
phase-out Impact factor performance strategy
…along with MW additions, price recovery, fx and cost-control.
- 42 -2019 is being a record year in terms of new investments execution, with +2.4 GW
already secured…
2019: Accelerating growth Project Tech. MW CoD Remuneration
(GW secured in the period) Golden Eye Solar 139 2019/20 PPA/LT Contract
Marchéville Wind 13 2020 CfD
Rosewater Wind 102 2020 Build & Transfer
Crossing Trails Wind 104 2020 PPA/LT Contract
1H 0.6 WildCat Wind 180 2020 PPA/LT Contract
Reloj del Sol Wind 209 2020 PPA/LT Contract
Jul-Oct 19 Mexico Project Wind 96 2021 PPA/LT Contract
PPAs Wind 105 2021/22 PPA
Indiana Crossroad Wind 302 2021 Build & Transfer
2H 1.8 Chalkodonio Wind 29 2022 Auction
Monte Verde VI Wind 46 2022 PPA/LT Contract
Boqueirao I-II Wind 80 2022 PPA/LT Contract
Ribatejo Solar 142 2022 Auction
California Project Solar 200 2022 PPA/LT Contract
Sonrisa Solar 200 2022 PPA/LT Contract
YTD 2.4
New Alpha Wind 212 2022 Auction
Country Beta Wind 280 2022 Auction
…for 2019-22 at attractive returns…
- 43 -…leading to c.70% of the ~7 GW target build-out capacity, already secured for
2019-22…
Execution of ~7 GW build-out target… …with 4.9 GW of wind onshore, solar and offshore projects already secured
Build-out GW; Oct-19 Build-out GW secured per COD
4.9 GW
under
negotiation/
identified
+2.4 GW YTD 1.8
0.3
1.3
1.0 0.5
~7.0 GW 0.9
1.8 GW avg/year 0.1 0.4
1.3
0.9
0.7 0.6
Secured
c.70% MWs
2019 2020 2021 2022
…being geographically and technologically diversified
- 44 -Conclusions
9M19 YoY positive top-line performance benefitted from higher avg. capacity (+3% YoY) and price recovery (+5% YoY), mainly in Eastern Europe
along with higher realized price in Spain, US and Brazil. Adj. Core Opex/avg. MW was flat YoY, given cost control in the context of a growth strategy…
…together with EDPR’s Sell-down strategy execution (€226m gain), lead to an
EBITDA of €1,218m (+40% YoY; +36% ex-IFRS16) and to a Net Profit of €342m (vs. €115m in the 9M18)…
…additionally execution of EDPR’s new strategy is well on track with c.70% of the 7 GW capacity build-out secured (1.8 GW only in 2H19), being
technologically & geographically diversified, creating an offshore JV, as well as €1.3bn out of ~€4.0bn Sell-down target already announced.
- 45 -a company of group
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