alpiq with strong european business...cash flow alpiq group 12 1,403 1,058 liquidity as at...

Analyst Call 2018

Olten, 27 August 2018

Alpiq with strong European business

Agenda

1. Economic environment 2. Alpiq with strong European business 3. Financial results 4. Focus on core business 5. Outlook 6. Questions and answers

2 2 Interim results 2018 Alpiq Holding Ltd.

20

30

40

50

60

2018 2019 2020 2021Ø 1.1.17-30.6.17 Ø 1.1.18-30.6.18

20

40

60

2013 2014 2015 2016 2017 2018

0.9

1

1.1

1.2

1.3

2013 2014 2015 2016 2017 2018

3 Alpiq Holding Ltd. Interim results 2018

Alpiq hedges energy and currency in advance on a rolling two- to three-year basis on average

Hedges from previous years with a time-delayed effect

Wholesale price effect leads to lower result in H1 2018 with a time delay Ø hedging rate 2016: EUR 47/MWh 2017: EUR 44/MWh H1 2018: EUR 38/MWh

Currency effects: marginal impact compared to the previous year Ø hedging rate 2016: CHF 1.19/EUR 2017: CHF 1.04/EUR H1 2018: CHF 1.06/EUR

Ø forward prices with hedge level – CH

Ø spot prices

EUR/M

Wh

EUR/C

HF

H1 2017 Forward prices from 2018 to 2020 (Ø 1 Jan - 30 Jun 2017) EUR 29/MWh (CAL Base DE) EUR 33/MWh (CAL Base CH)

Forward prices in H1 2018 recovered Forward prices from 2019 to 2021 (Ø 1 Jan - 30 Jun 2018) EUR 37/MWh (CAL Base DE) EUR 42/MWh (CAL Base CH)

EUR/M

Wh

Forward prices – CH


Solid balance sheet • Equity ratio: 38.8% • Liquidity: CHF 1.1 billion

Successful spin-off of the industrial business • Added value for the Alpiq Group • Gross cash inflow of CHF 0.8 billion1

Interim results 2018 Alpiq Holding Ltd. 4

EBITDA from continuing operations before exceptional items: CHF 93 million • Strong European and trading business: CHF 130 million • Unprofitable Swiss electricity production: CHF -37 million

1 from transaction as at 31 July 2018

H1 2018 Key Financial Figures

5 Alpiq Holding Ltd.

Results of operations before exceptional items (EI) • At CHF 93 million, EBITDA from continuing operations below the previous year, as announced • Transaction of the industrial business successfully concluded as of the end of July. Cash inflow not

yet reflected in the key financial figures as of the end of June

Net debt EBITDA Net revenue Earning after income tax

Cash flow from operating activities

2,632 2,590

152

-2%

135 93

10

-31%

-42 -9 7

>100% 179

-144

>100%

714 878

+23%

Mio

. C

HF

Interim results 2018

H1 2017

FX effect

H1 2018

H1 2017

FX effect

H1 2018

H1 2017

FX effect

H1 2018

H1 2017

H1 2018

12/31/2017 06/30/2018

Continuing operations Alpiq Group

Development of EBITDA before exceptional items


158 135

83 93 89

26 -24 10

Variou

s

-64

FX e

ffec

t

Con

tinui

ng o

pera

tions

Dis

cont

inue

d op

erat

ions

Alp

iq G

roup

EB

ITD

A H

1 20

18

23

Alp

iq G

roup

EB

ITD

A H

1 20

17

Pric

e ef

fect

-4

Trad

ing

&

Com

mer

ce

Con

tinui

ng

oper

atio

ns

Dis

cont

inue

d op

erat

ions

Prod

uctio

n vo

lum

es

port

folio

Sw

itzer

land

(m

ainl

y KKL)

3

Set

-up

cost

s D

TI

-4

EBIT

DA b

efor

e FX

effec

t H

1 20

18

2

Cos

ts p

artn

er p

ower

pla

nts

9

Inte

rnat

iona

l Th

erm

al P

rodu

ctio

n &

RES

-31%

Mio

. C

HF


Development of EBITDA by business division (I)


Generation Switzerland • Despite higher production volumes, the higher availability of the

Leibstadt nuclear power plant (the unscheduled extension of maintenance work at the Leibstadt nuclear power plant in the previous year) and systematic cost management, the result is down on the previous year

• Low wholesale prices are having a delayed impact on Swiss electricity production compared to the previous year

• After consistently applying full-cost accounting, the total loss of the

Generation Switzerland business division amounts to around CHF -75 million in the first half of 2018


Mio

. CH

F

-37

-75

EBIT

DA

H1

2018

be

fore

EI

Res

ult

H

1 20

18 *

* The results of the fully consolidated partner power plants and those accounted for using the equity method contain hedges, O&M, depreciation and amortisation, taxes and duties and cost of capital, either at the partner power plant or directly at Alpiq.

Mio

. CH

F

-37 -64

26

EBIT

DA

H1

2018

be

fore

EI

-2

EBIT

DA

H1

2017

be

fore

EI

Pric

e ef

fect

Prod

uctio

n vo

lum

es

Port

folio

Sw

itzer

land

(m

ainl

y KKL)

3

Cos

ts p

artn

er

pow

er p

lant

s

Development of EBITDA by business division (II)

8

Power & Heat: Owner + Operator • Steady earnings from international production

Alpiq Holding Ltd. Interim results 2018

25 38

9 3

52 57

5

Bus

ines

s de

velo

pmen

t

EBIT

DA

H1

2017

be

fore

EI

0

EBIT

DA

H1

2018

be

fore

EI

FX e

ffec

t

Mio

. CH

F M

io. CH

F

-28

67 2

41

Mio

. CH

F

Digital & Commerce • Energy trading is down on the previous year; the French market in

particular was unable to repeat the strong previous-year result • New digitalisation solutions implemented, in particular in the areas

of electro-mobility and flexibility marketing in energy trading

Renewable Energy Sources • Production volumes and prices at the wind farms in Italy

significantly above the previous-year level

Development of Financial result before EI Continuing Operations

9

-41 -45

-6 -1

Fina

ncia

l res

ult

H1

2017

Fina

nce

inco

me

Variou

s (e

.g.

FX e

ffec

t)

3

Fina

nce

cost

s

Fina

ncia

l res

ult

H1

2018

Mio

. C

HF

Reduced interest burden thanks to lower financial debt


Development of net income before EI

10

-9

-49 -42 -50

-52

-8

Res

ults

pa

rtne

r po

wer

pla

nts/

as

soci

ates

-4

Fina

ncia

l res

ult

Dep

reci

atio

n be

fore

FX e

ffec

t

Net

inco

me

H1

2018

be

fore

FX e

ffec

t

7

FX e

ffec

t

Con

tinui

ng o

pera

tions

Dis

cont

inue

d op

erat

ions

Dis

cont

inue

d op

erat

ions

Alp

iq G

roup

N

et in

com

e H

1 20

18

4 -5

Alp

iq G

roup

N

et in

com

e H

1 20

17

Con

tinui

ng

oper

atio

ns

Del

ta a

t EB

ITD

A

leve

l bef

ore

FX e

ffec

t

Inco

me

tax

expe

nse

-5 3 18

• Lower deferred tax liabilities • Lower tax expense following

lower result

Mio

. C

HF


Change in cash flow from operating activities Alpiq Group; H1 2018 compared to H1 2017


179

-39 -144 -41

-64

Cas

h flo

w f

rom

op

erat

ing

activ

ities

H

1 20

17

-5

Dis

cont

inue

d op

erat

ions

Cha

nge

in N

WC

in H

1 20

17

-95

Con

tinui

ng o

pera

tions

: Lo

wer

EBIT

DA

One

-tim

e pa

ymen

t by

Sw

issg

rid

AG

in H

1 20

17

-118

Cas

h flo

w f

rom

op

erat

ing

activ

ities

co

ntin

uing

ope

ratio

ns

H1

2017

adj

uste

d

Con

tinui

ng o

pera

tions

: In

vest

men

t in

NW

C

Cas

h flo

w f

rom

op

erat

ing

activ

ities

H

1 20

18

Mio

. C

HF

Cash flow Alpiq Group

12

1,403 1,058

Liqu

idity

as

at

06/3

0/20

18

Liqu

idity

as

at

12/3

1/20

17

-144 39 25 -22

Cas

h flo

w f

rom

op

erat

ing

activ

ities

Rep

aym

ent

of

finan

cial

liab

ilitie

s

CAPE

X

Div

iden

ds f

rom

pa

rtne

r po

wer

pla

nts

and

inte

rest

rec

eive

d

Proc

eeds

fro

m

disp

osal

s

-20

Inte

rest

pai

d

-11

Cur

renc

y tr

ansl

atio

n di

ffer

ence

s

-212

Mio

. C

HF

Interim results 2018 Alpiq Holding Ltd.

Development of debt situation following completion of the transaction

13

1,936

1,058

12 6 31 2

800

2018 Gross debt

2021 Liquidity

1,774

2019 2023 2020 2022 2024 2025 2026 2027 2028 2029ff

149 320

111 313 397

219 335

-84 40

Gross cash inflow Private placements Deconsolidation of sold companies Bank loans and margining

Bonds

• Net cash inflow from the sale of the InTec Group and the Kraftanlagen Group • Maturities are counterbalanced by a sound liquidity base • Maturity profile staggered over long term without significant spikes • Further systematic reduction of gross debt

Mio

. C

HF


800 Mio. CHF gross cash inflow -84 Mio. CHF Deconsolidation of sold companies 716 Mio. CHF net cash inflow

Breakdown of financial liabilities (I)


3,989

2,050 1,939 1,299

856 714 878 997 796 609 480 395 301 232

4.0

2.6 3.2

2.7 2.2 2.4

3.8

2012 2013 2017 2014 2015 2016 June 2018

Net debt Net debt/EBITDA before excpetional items EBITDA before exceptional items (rolling)

Mio

. C

HF


Breakdown of financial liabilities (II)


• Pro-forma net debt/EBITDA following completion of the transaction of the industrial business significantly reduced to 0.7

Mio

. C

HF


714

2

301 301

2.4

0.0

2017 Pro-forma 2017

Net debt EBITDA before exceptional items (rolling) Net debt/EBITDA before excpetional items

878

162 232 232

3.8

H1 2018

0.7

Pro-forma H1 2018

Allocation of interest-bearing liabilities as at 30 June 2018

16

Group companies (with gross debts >CHF 25 million)

Financing instruments (in CHF million)

• Conservative financing profile with 70% financial liabilities at level of Alpiq Holding • Low structural subordination • Independent, risk-optimised project financing structures for RES companies and EnPlus • Firmly committed credit lines of around CHF 300 million (non-utilised)

58% 21%

Other; 30

Bank Loans; 502

8% Project Financings; 178

1% 12%

Private Placements; 294

Bonds; 1’364

5%

9% 8%

69%

1% 2% Energie Electrique du Simplon;

28

Gougra; 95

3%

Enpower 3; 34

Electricité d’Emosson; 155

Aero Rossa; 62

Alpiq Holding AG; 1’337

En Plus; 165

3%

Other; 60


Pro-forma effects following completion of the transaction

17 Interim results 2018 Alpiq Holding Ltd.

Alpiq before transaction

Transaction perimeter

Alpiq after transaction

Current provisions for guarantees 2 2 0

Non-Current provisions for guarantees 14 10 4

Outstanding bank guarantees (off balance) 982 431 551

Defined benefit liabilities 154 137 17

Number of FTEs 8,817 7,250 1,567

Balance sheet remains stable Alpiq with sound liquidity and stable equity

18

12%

55%

53%

39%

54%

7%

39%

33%

8%

33%

55%

12%

Assets held for sale Liabilities held for sale

Non-current assets Current assets

Equity Liabilities

Mio

. C

HF

• Sound liquidity: − Before transaction: CHF 1.1 billion − After transaction pro-forma: CHF

1.8 billion

• Stable equity: CHF 3.9 billion

• Equity ratio: − Before transaction: 38.8% − After transaction pro-forma:

around 44%

10’197 10’038

2017 2018


Update on tax audit in Romania

• Assessment of Alpiq Energy SE, Prague, issued by Romanian tax authority ANAF originally in the amount of RON 793 million (CHF 197 million) for the period of 2010 to 2014. Secured by pledged bank account.

• Alpiq continues to deem it unlikely that this assessment will result in a negative outcome for the company. It has therefore again decided not to recognise a liability (provision) of RON 793 million.

• Following an objection from Alpiq, a reassessment was ordered for RON 204 million (CHF 51 million) of the total amount of RON 793 million (CHF 197 million).

• As of August, the objection resulted in the security being reduced from CHF 199 million to CHF 150 million (disclosed under deposits).




Focus on core business

• Spin-off of the industrial business successfully concluded Substantial net cash inflow Portfolio

adjustment

• Lower results in Swiss portfolio

Swiss electricity production unprofitable

Low wholesale prices are having a time-delayed impact on Swiss electricity production compared to the previous year

Price effect

• Significant contributions from RES and thermal production

• Strong contributions from international energy trading, large-customer and retail business

Strong European and trading business

Significantly positive EBITDA contributions

Price and volume effect

Outlook 2018/2019

21 Interim results 2018 Alpiq Holding Ltd.

• Low wholesale prices will continue to put Swiss production under pressure with a time delay

• International energy business will make positive contributions to support Swiss production

• Stable balance sheet after transaction

Alpiq emerges stronger from transformation phase

Substantial increase in liquidity • Deficit of Swiss electricity production covered • Gross debt positions optimised • Selective investments in growth areas

Focused core business • Focused profile after spin-off • Organic growth • Growth areas of electro-mobility and digitalisation

Interim results 2018 Alpiq Holding Ltd. 22

European player with Swiss roots • Present in 30 countries across Europe • Streamlined with 1,550 employees • Efficiently and competitively positioned

Customers Marketing


New renewable energies

Grid operators

Swiss production

Industry and commerce

International thermal production

Alpiq focuses on the core business

Production

International energy trading

Large customers and retail

Digital solutions

Digital and commerce

Decentralised production by third parties

Prosumer

Asset optimisation

Utilities


© 2018 Alpiq Blue Energy AG | Strictly confidential

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Electric Vehicle Smart Home Charger BMW i3 or Nissan Leaf I/II

including insurance, maintenance etc.

Access to more than 70,000 charging points across Europe

Competitive and fixed-price installation service included

Green Electricity

Flat rate for vehicle charging, and green household tariff

Public Charging App

2025303540455055

2016 2017 2018Cal-19 CH Base Cal-20 CH Base Cal-21 CH Base

1

1.05

1.1

1.15

1.2

2016 2017 2018CHFEUR Cal-19 CHFEUR Cal-20 CHFEUR Cal-21

2

7

12

17

22

2016 2017 2018EUA Cal-19 EUA Cal-20 EUA Cal-21

Medium-term outlook


Wholesale prices • doubled since 2016 • increased by a third in 2018


CH Power Price – (Key date of chart 29 June 2018)

EUA Price (CO2) – (Key date of chart 29 June 2018)

FX CHF/EUR– (Key date of chart 29 June 2018)

EUR/M

Wh

EUR/t

CH

F/EU

R

CO2 prices • quadrupled since 2016 • doubled in 2018

CHF/EUR rate • positive currency effect

Rising wholesale prices are having a time-delayed positive effect on result

You ask. We answer.

Organisation as at 1 August 2018

27

General Management CEO Jasmin Staiblin1

Generation Switzerland Michael Wider1

Digital & Commerce Markus Brokhof1

Financial Services CFO Thomas Bucher1

Hydro Power Generation Christian Plüss

Nuclear Power Generation Michaël Plaschy

smart Energy West Michel Kolly

smart Energy East Peter Dworak

Renewable Energy Sources André Schnidrig

Accounting & Controlling Edgar Lehrmann

Taxes Eva Catillon

Legal & Compliance Peter Schib

Human Resources Daniel Huber

Digital Technologies & Innovation Hans Dahlberg

Operations Petter Torp

Thermal Power Generation Matthias Zwicky

Treasury & Insurance Lukas Oetiker

M&A and Infrastructure Martin Schindler

Communications & Public Affairs Richard Rogers

Risk Management Walter Hollenstein

Business Division

Business Unit

Functional Division

Functional Unit

1) Member of the Executive Board

General Management


Financial calendar 2019

14 May 2019 Annual General Meeting of Alpiq Holding Ltd. in Olten

Full-year results 2018 Annual Media and Financial Analyst Conference 4 March 2019



Media Breakfast and Analyst Conference Call 26 August 2019

Disclaimer

This communication contains, among other things, forward-looking statements and information. Such statements include, but are not limited to, statements regarding management objectives, business profit trends, profit margins, costs, returns on equity, risk management or the competitive environment, all of which are inherently speculative in nature. Terms such as "anticipate," "assume," "aim," "goals," "projects," "intend," "plan," "believe," "try," "estimate," and variations of such terms, and similar expressions have the purpose of clarifying forward-looking statements. These statements are based on our current estimates and assumptions, and are therefore to some extent subject to risks and uncertainties. Therefore, Alpiq's actual results may differ materially from, and substantially contradict, forward-looking statements made expressly or implicitly. Factors contributing to or likely to cause such divergent outcomes include, but are not limited to, the general economic situation, competition with other companies, the effects and risks of new technologies, the Company's ongoing capital needs, financing costs, delays in integrating mergers or acquisitions, changes in operating expenses, currency fluctuations, changes in the regulatory environment on the domestic and foreign energy markets, oil price and margin fluctuations for Alpiq products, attracting and retaining qualified employees, political risks in countries where the Company operates, changes in applicable law, the realisation of synergies and other factors mentioned in this communication.

Should one or more of these risks, uncertainties or other factors materialise, or should any of the underlying assumptions or expectations prove incorrect, the results may differ materially from those stated. In light of these risks, uncertainties or other factors, the reader should not rely on such forward-looking statements. The Company does not assume any obligation beyond those arising out of law to update or revise such forward-looking statements, or to adapt them to future events or developments. The Company points out that past results are not meaningful in terms of future results. It should also be noted that interim results are not necessarily indicative of the year-end results.

This communication is neither an offer nor an invitation to sell or buy securities.


Appendix

30

Development of net revenue before EI

31

3,419 2,632 2,438 2,590

3,441 D

isco

ntin

ued

oper

atio

ns

Trad

ing

resu

lt

Alp

iq G

roup

N

et r

even

ue H

1 20

17

Alp

iq G

roup

N

et r

even

ue b

efor

e FX

effec

t H

1 20

18

787

Net

item

ene

rgy

inco

me

Con

tinui

ng

oper

atio

ns

-70 -181 57

Variou

s

152 851

FX e

ffec

t

Con

tinui

ng

oper

atio

ns

Dis

cont

inue

d op

erat

ions

Alp

iq G

roup

N

et r

even

ue H

1 20

18

-2%

Mio

. C

HF

Interim Result 2018 Alpiq Holding Ltd.

Development of EBIT before EI

32

76 65

8 16 12 26

9

7 -5

Dep

reci

atio

n

EBIT

bef

ore

FX e

ffec

t H

1 20

18

Alp

iq G

roup

EB

IT H

1 20

1

FX e

ffec

t

-4

Con

tinui

ng

oper

atio

ns

11

Dis

cont

inue

d op

erat

ions

Alp

iq G

roup

EB

IT H

1 20

17

Dis

cont

inue

d op

erat

ions

2

-64

Set

-up

cost

s D

TI

3 Pr

ice

effe

ct

Prod

uctio

n vo

lum

es

Port

folio

Sw

itzer

land

(m

ainl

y KKL)

Cos

ts p

artn

er p

ower

pla

nts

Trad

ing

&

Com

mer

ce

Con

tinui

ng o

pera

tions

Inte

rnat

iona

l Th

erm

al P

rodu

ctio

n &

RES

Variou

s

-24

-4

-77%

Mio

. C

HF

Interim Result 2018 Alpiq Holding Ltd.

Shareholder structure

31.44%

25.04%

31.43%

12.09%

Alpiq Holding Ltd.

EOS Holding SAEDF Alpes Investissements SàrlConsortium of Swiss minority shareholdersVarious (free float)

33

EBM (Elektra Birseck Cooperative) 13.65

EBL (Elektra Baselland Cooperative) 7.13

Canton of Solothurn 5.61

Aziende Industriali di Lugano (AIL) 2.13

Eniwa Holding AG ** 2.00

Wasserwerke Zug (WWZ) 0.91

Consortium of Swiss minority shareholders (shares in %)

*Shareholders of EOS Holding SA Romande Energie (29.71%) Services Industriels de Genève – SIG (20.39%) Groupe E (23.09%) City of Lausanne (20.74%) Forces Motrices Valaisannes – FMV (6.07%)

Shareholder structure in percent / as per 31.12.2017

** formerly IBAarau

*

Alpiq Holding Ltd. Interim Result 2018

alpiq with strong european business...cash flow alpiq group 12 1,403 1,058 liquidity as at...

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