elia group full year results 2013
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TRANSCRIPT
Full year 2013 results
Analyst meeting
Brussels, 28 February 2014
2 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
Disclaimer
- This presentation is only provided for general information purpose about Elia and its
activities. The included statements are neither reported results nor other historical
information. They are not provided to serve as the basis for any evaluation of Elia, and
cannot be binding and/or enforceable upon Elia.
- As forward-looking statements, they are subject to assumptions, risk and uncertainties,
actual future results may differ from those expressed in or implied by such statements.
- Although Elia uses reasonable cares to present information which is up-to-date to the
best of Elia's knowledge, Elia makes no representation or warranty whatsoever as to
the adequacy, accuracy, completeness or correctness of such information.
- Elia will not be liable for any consequences arising from or related to the use or
interpretation of the information contained or absent in this presentation.
1.eghts 2013
• Key highlights 2013
• Operational highlights
• Financial results
• Outlook 2014
Key highlights 2013
5 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
• Adjusted transmission tariffs for Elia have been approved by the CREG
• Nearly full realization of ambitious investment plans in both countries
• Continuity of supply maintained during winter season in both areas
Operational
• Good results for the Group:
• Significant increase results 50Hz transmission
• Lower results for Elia transmission due to low Belgian OLO
• Proposed dividend of €1,54 per share
• New consolidation method for 50Hertz used as from 2014
Financial
• Establishment of new entity by Elia and 50Hertz to reinforce the position of the Elia Group for asset and share deals, by scouting for such deals and developing two lines of businesses: Consulting & Services and EPC/EPCM projects
• Regulatory status of play
• Investment programme for the Elia Group
• Changing government in Germany results in changing energy policy?
• Decisions federal government Belgium relating to the energy law
Outlook
Key highlights 2013
Operational highlights 2013
7 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
50Hertz’s network: 58,1 TWh
(58,2 TWh)
• Mild weather
• Decentralised generation
• Renewables
Elia’s network: 80,5 TWh
(81,7 TWh)
• Mild weather
• Decentralised generation
(1) The Elia consumption indicator covers the majority of electricity consumption.
It includes all production directly connected to the Elia grid plus net import-export balance
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
jan feb mar apr may june july aug sep oct nov dec
TWh
2010 2011 2012
0,0
1,0
2,0
3,0
4,0
5,0
6,0
jan feb mar apr may june july aug sep oct nov dec
TWh
2010 2011 2012
Energy consumption
8 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014 8
France Luxembourg
Netherlands
Hamburg
Berlin Poland
Czech Republik
Denmark
7,8 TWh
0,7 TWh
8,8 TWh
4,4 TWh
2,4 TWh
0,8 TWh
1,2 TWh 2,5 TWh
0,5 TWh
5,4 TWh
2,4 TWh
1,4 TWh
8,8 TWh
27,9 TWh
Import - export
• Significant imports in Belgium due to continued outages of nuclear plants up to
June 2013
• The increased RES share within control zone 50Hertz results in important exports
9 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
43%
31%
1%
14%
11%
Replacements Internal consumption Interconnections Integrating renewables Non electrical investments
Elia group: Investments
Elia 50Hertz
• Investments in Belgium are mainly driven by replacements and the internal
consumption.
• In Germany, the integration of renewables is by far the most important driver.
3% 6%
89%
2%
€ 402,0 M
€ 247,7 M onshore
€154,3 M offshore
€ 202,7 M
10 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
Elia-TSO: Major investments
Large Infrastructure projects
• BRABO • Reinforcement around port of
Antwerp and increased capacity with the Netherlands
• Permit process ongoing
• Expected commissioning 2017-2018
• ALEGRO • HVDC interconnection with
Germany
• Increased market liquidity, reliability and security of supply
• Walloon government adopted the draft revision of the sector plan
• Expected commissioning 2019
Extension CAPEX driven by integration of renewables & localisation of generation
• Increasing renewables on- and offshore need to be integrated
• Localization of the power plants change
Replacement CAPEX
• Mostly investments in the high and low voltage substations
• Phase out of old population of assets commissioned before 1980’s
Extension CAPEX driven by internal
consumption
• Investments due to the change in profile of the power needs, even if energy has decreased over time,
• Delocalization of the electricity needs
11 / 30 Elia Group full year results 2013 / Brussels, 28.02.2014
BALTIC 2
• Connection of 288 MW offshore wind park under construction
• 3 cables, spanning 120km offshore and 16 km onshore
• Expected to become operational in 2014
SOUTH-WEST CONNECTOR
• Section Vieselbach – Altenfeld : under construction
• Section Altenfeld – Redwitz: Plan approval in preparation
• Decision expected 3rd quarter 2014
BARWALDE - SCHMOLLN
• Under construction
• Innovative construction method minimizing costs
• Expected to become operational in autumn 2014
UCKERMARKLINE & BERLIN NORTH
RING
• Plan approved on first section Berlin North Ring
• Other section and Uckermarkline in ongoing plan approval phase
• Decisions expected in 2014
SOUTH-EAST DC PASSAGE
• Project necessity defined and legally approved
• Part of German Grid Need Act
• Joint project with Amprion (450 km)
• Preparation of regional planning
50Hertz: Major Investments
Financial results 2013
13 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
Corporate structure and shareholders’ structure
Free float1
52.26%
Publipart
2.52%
Publi-T
45.22%
Elia System Operator NV
Elia Asset NV
99.99%
Elia Engineering
100%
Elia Re
100%
CASC
8.33%
HGRT
24.50%
Coreso
22.49%
APX
29.02%
Eurogrid International
CVBA
60.00%
Eurogrid GmbH
100%
Gridlab GmbH
100%
E offshore A
LLC
100%
50Hertz
Transmission
100%
Coreso
10.00%
EMCC
20.00%
50Hertz
Offshore
100%
CAO
12.50%
Atlantic Grid
Investment A
Inc. - 100%
Atlantic Grid A
Interm. Holdco
10.00%
Atlantic Grid A
Operational
Holdco
EEX
2.25%
Main change is the new participation of 50Hertz in the European Energy
Exchange (EEX)
Ampacimon
36.81%
14 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
Elia group : consolidated key figures
• Positive evolution in EBIT(DA) due to improved EBITDA in both 50Hertz and Elia
• Finance result positively impacted by lower interest charges in Belgium and a
change in discounting of auction revenues in Germany
• Taxes mainly increase due to the 2012 one-off effect in the figures of Elia
• Increase in the net profit of 13,4% to € 175,8 M as a result of the significant
increase in Germany, partly compensated by the decrease in Belgium
(in € Mio) 2013 2012 Change
Total revenues 1.389,5 1.306,6 6,3%
EBITDA 486,9 455,5 6,9%
(R)EBIT 345,4 305,4 13,1%
Finance result (108,5) (134,8) -19,5%
Taxes (61,5) (16,2) 279,6%
Net profit 175,8 155,0 13,4%
58 %
42 %
2012
Elia 50Hertz
44% 56
%
2013
Net profit
15 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
Elia: 2013
• Total revenues, EBIT(DA) and taxes are impacted by the one-off effect in 2012 from the recognition of
the deferred tax benefit on the transferable notional interest deduction reserve
• Finance result down mainly due to lower interests to be paid on the loan with floating interest rates
• Regulated profit (€ 75,6 Mio) fairly in line with 2012 (- 2,1%), net profit negatively impacted by the
important discount effect of the recoverable pension cost last year
(in € Mio) 2013 2012 Change
Total revenues 832,7 770,1 8,1%
EBITDA 313,9 291,6 7,6%
(R)EBIT 209,3 188,6 11,0%
Finance result (109,2) (117,5) -7,1%
Taxes (23,4) 17,5 -233,7%
Net profit 77,1 89,2 -13,6%
53,5 63,8
51,6 44,5
16,2
16,1
13,5 19,3
7,7
6,3
8,2 6,9
3,8 5,3
2,1
-1,5
0,1
-0,4
5,59% 5,96%
5,35% 5,17%
3,44%
4,21%
2,98% 2,43%
-10
0
10
20
30
40
50
60
70
80
90
100
2010 2011 2012 2013
In €
Mio
Regulated returns
Fair remuneration Goodwill
Incentive efficiency Incentive CAPEX
Other ROE
OLO
16 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
Elia: 2013
3.743,3
3,763,0
3,807,3
3.935,1
202,7
- 96,8
62,5
- 23,3
- 17,3
2010
2011
2012
2013
In € Mio
Regulated asset base
New investments
Depreciations
Changes in WC
Goodwill decomissioning
Other
• Results are still suffering from low long term Belgian interest rate (2,43% in 2013 vs. 2,98% in
2012), partly compensated by higher goodwill decommissioning
• Negative effect from the recoverable pension cost is due to the important discount effect in 2012
89,2
77,1
(7,1) 5,8
1,5 (0,9) (1,2)
(4,7)
(10,1) 4,6
Net profit evolution 2012 - 2013
17 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
• Increased EBIT(DA) mainly a result from the increased cost recovery for investments, both in the
old (T-2) and new system (T-0)
• Finance result positively impacted by discounting of auction revenues
50Hertz: 2013
(in € Mio) 2013 2012 Change
Total revenues 557,6 539,4 3,4%
EBITDA 173,1 163,9 5,6%
(R)EBIT 136,1 116,8 16,5%
Finance result 0,7 (17,5) -104,0%
Taxes (38,2) (33,6) 13,7%
Net profit 98,7 65,8 50,0%
36,4 30,7
42,5
13,06%
11,01%
15,24%
0
5
10
15
20
25
30
35
40
45
2011 2012 2013
In €
Mio
(60%
)
Dividend yield
Dividend Yield
18 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
50Hertz: 2013
110,7
166,4
(15,4) 14,7
15,8
18,9 (14,7) 20,9
14,3
5,4 (7,2) 3,0
Net profit evolution 2012 -2013 (1)
(1) Numbers are based on 100% of 50Hertz
2.699,9
3.045,4
3.064,0
402,0
-92,4
-313,4
22,0
2011
2012
2013
In € Mio
Regulated asset base (1)
New investments
Depreciations
Changes in WC
Other
• Net profit mainly boosted by the increased cost recovery for investments, lower regulatory risk
provisions and the discounting of auction revenues, partly offset by no EEG bonus and lower
result on the Korridor model
• Regulated asset base growing with the important investments, however offset to a large extent by
the improving EEG prefinancing position
19 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
Elia Group: Consolidated key figures
1.997,6 2.244,0
298
298 495
495 60
60 155,3
4
2012 2013
In €
Mio
Debt
Short termborrowings 50Hertz
EIB Elia
Shareholder loan
Eurobond 50Hertz
Eurobond Elia
16,1%
18,0%
65,9%
Maturity
Within 1 y
Within 3 - 5 y
After 5 y
• Debt within Elia increased due to the refinancing of the € 500 Mio Eurobonds with the new € 550
Mio (15 y) and € 200 Mio (20y) Eurobonds.
• Short term borrowings decreased significantly within 50Hertz as a result of the positive evolution
on the prefinancing of the EEG mechanism
• Maturity profile improved significantly with the new Eurobonds. In 2014, a € 500 Mio bond is
coming to maturity
20 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
Elia Group: Consolidated key figures
(in € Mio) 2013 2012
Net debt 2.773,8 2.910,8
Leverage (D/D+E) 55,31% 57,99%
REBITDA/Gross
Interest 3,96 3,08
Net debt / REBITDA 5,61 6,39
Average cost of debt 3,94% 4,93%
% fixed of gross debt 84,37% 83,89%
Standard & Poor’s rating Elia Group:
Long Term: A-
Outlook: Stable
Moody’s rating German segment:
Long Term: Baa1
Outlook: Stable
• Decrease in net debt is mainly a result of the significant improvement in the prefinancing of the
EEG mechanism by 50Hertz
• Average cost of debt decreased thanks to the replacement of the Eurobond and low interest
charges that were due on the floating interest loan
• Ratings were again confirmed for both Elia and 50Hertz
21 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
1,38 1,40 1,47 1,47
1,54
79,3% 68,4% 64,5%
57,4% 53,1%
2009 2010 2011 2012 2013
€ /
sh
are
Dividend Pay-out ratio
Total amount
paid out (€m) 66,6 84,5 88,7 89,0 93,3
Proven track record of growing dividend over time, with a compound annual growth rate
of 2,22%
Elia Group: Dividend policy
CAGR = 2,22%
22 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
Impact changed method of consolidation for 50Hertz
as of 2014 Proportionate
consolidation Equity pick-up Change
Total revenues 1.389,5 832,7 (556,8)
EBITDA 487,0 313,9 (173,1)
(R)EBIT 345,4 209,3 (136,1)
Finance result (108,5) (109,2) (0,7)
Taxes (61,5) (23,4) 38,2
Share of profit of equity accounted
investees 0,3 98,7 98,7
Net profit 175,8 175,8 0,0
Total assets 6.532,2 5.555,7 (976,5)
Net financial debt
2.733,9 2.628,4 (105,5)
• No impact on S&P rating – consistently consolidating 50Hertz at 100%
• Due to mechanical adjustment, ratio’s will look slightly worse. However no impact on
financing as both Elia and 50Hertz are strictly ringfenced
Outlook 2014
24 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
• CREG wants to formulate a new tariff methodology by the end of 2014, including a framework for the offshore investments
• A draft methodology will be issued by the CREG in June 2014
• Consultation round will be organized by the CREG from June up to the fall of 2014
• Afterwards the CREG will issue a new tariff methodology by the end of the year which will be used for the period 2016-2020
Belgium
• New tariff period has started as from 1 January 2014
• Positive changes in the Korridor model
Germany
Regulatory state of play
25 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
35%
24% 2%
26%
13%
Replacements Internal consumptionInterconnections Integrating renewablesNon electrical investments
Elia Group: Investments 2014
Elia 50Hertz
• Integrating renewables and investments due to generation localization are becoming
more important in Belgium.
• In Germany, investments increase year-over-year with 25,7%, mainly driven by the
offshore connections
3% 3%
89%
5%
€ 505,2 M
€ 257,9 M onshore
€ 247,3 M offshore
€ 252,5 M
26 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
Elia TSO – main investment projects
• Auditor of the Council of State issued negative advices on the Flemish Regional Spatial
Plan, which includes the approval of the Stevin project
• Possible repercussions on Belgian Offshore Grid and Nemo
Brabo 4
Nemo - HVDC Connection UK 3
1 Stevin
5 Allegro – HVDC Connection Belgium-Germany
Belgian Offshore Grid 2
6 East Loop reinforcement
7 Interconnection BE-Lux
8 Reinforcement Avelgem
27 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
50Hertz – main investment projects
Bertikow – Pasewalk 9
Uckermark-line Neuenhagen – Bertikow 8
6 3rd interconnector to Poland
10 Offshore connections in Baltic Sea
380-kV-Nordring Berlin 7
11 Combined Grid Solution
3 Offshore connection Baltic 2
Completed projects in 2013 and 2012 1
2 Bärwalde – Schmölln
12 Wolmirstedt – Perleberg
4 South-West interconnector
5 Grid connection UW Förderstedt
1
6
8
9 1
7
10
11 3
2
4
5
1
Fertig gestellt
12
1
1
1
1
1
1
Existing grid
Planning procedure
Approval procedure
Under construction
Completed
Power Plant
Substation
(50Hertz)
Substation
(not 50Hertz)
28 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
Belgium: Proposed changes in the Energy law
28
Developments in the changing energy environment give rise to
proposals from the legislator on adapting the energy law. Main
topics of those resolutions:
- Plan Wathelet:
To further ensure the security of supply, the plan is introducing
the concept of strategic reserves. Role of Elia : yearly
consultation about the needed volumes and activation of the
strategic reserves
- Change in corporate governance rules Elia
Composition of the different committees advising the Board of
Directors will be changing
- Offshore
- Support mechanism for new wind farms has been decided upon
- Elia will be granted the right to ask for the concession to
construct the offshore platforms.
0
2000
4000
6000
8000
10000
12000
14000
January 2014 2014/2015 2015/2016 2016/2017
MW
Installed capacity non-profiled units
Max
Min
- 3.100 MW
29 / 30 Elia Group full year results 2013 / Brussels, 28.2.2014
Until now only key parameters have been established.
The legislative process has not yet started. Entry into
force is foreseen for August 2014.
- RES share of electricity consumption to be between 40%
and 45% by 2025 and between 55% and 60% by 2035
(previously minimum targets were set: 2020 35%; 2030
50%)
- A binding corridor for the deployment of renewables
energies
- Offshore wind target: 6.5 GW by 2020 (previously 10
GW by 2020)
- Feed-in tariffs remain method of choice, mechanisms
for quantitative expansion control to be introduced by
2018 (tenders to be tested for large solar power systems
by 2016)
- Mandatory “market premium” with sliding premium for
new RES plants
Germany: Main outline of the proposed amendment
of the Renewable Energies Act (EEG)
Line of attack of the Energiewende remains unchanged.
8,33
13,53 14,11
20,36
23,58
2,047
3,530 3,592
5,277
6,240
0
5
10
15
20
25
2010 2011 2012 2013 2014
EE
G s
urc
harg
e [
ct/kW
h]
Costs
[B
n.
€]
Costs EEG surcharge
Questions & Answers
Brussels, 28.2.2014
Tom Schockaert
Investor Relations
+32 (0)2/546.75.79
www.eliagroup.eu
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