ERG - Fourth Quarter and 2013 Results
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In the fourth quarter of 2013, ERG reported strong growth in renewable energy production and EBITDA. EBITDA increased 27% year-over-year to €132 million, driven by growth in renewables and stable performance in power generation, while refining and marketing results were negatively impacted by a difficult business environment. Guidance for 2014 forecasts further growth led by renewables and the exit from coastal refining, with EBITDA of approximately €470 million and adjusted net debt of around €1.1 billion.
ERG - Fourth Quarter and 2013 Results
- 1. FOURTH QUARTER 2013 RESULTS 12 MARCH 2014 LUCA BETTONTE, CEO
- 2. 2 DISCLAIMER This document contains certain forward-looking information that is subject to a number of factors that may influence the accuracy of the statements and the projections upon which the statements are based. There can be non assurance that the projections or forecasts will ultimately prove to be accurate; accordingly, the Company makes no representation or warranty as to the accuracy of such information or the likelihood that the Company will perform as projected.
- 3. 3 AGENDA 4Q 2013 Highlights ✓ Key Figures ✓ 2013 main Achievements Results Review ✓ Business Environment ✓ 4Q 2013 Group EBITDA ✓ Results by Segments Key Financials ✓ Profit & Loss ✓ Investments ✓ Cash Flow Statement 2014 Guidance and Conclusions Appendix
- 4. 4 RC Ebitda Adj (€mn) HIGHLIGHTS: KEY FIGURES 27% 34% Leverage RC Net Profit (€ mn) A year of strong growth POWER & GAS RENEWABLES REFINING & MARKETING CORPORATE 722 1,015 0 31/12/2013 DERIVATIVES ADJ. NFP EXCL. DERIVATIVES 868 (1) Adjusted Net Financial Position does not include NFP of ISAB Srl 147 638 84 31/12/2012 (1) 458 569 0 328 137 21 (28) 37 10 (9) 2012 4Q 2013 2013 4Q 2012 128 132 358 245 (30) (5) 89 83 59(2) (7) 2012 4Q 2013 12 0 38 10 3 2013 4Q 2012 Highlights
- 5. 5 2013 MAIN ACHIEVEMENTS • Completion of new wind farms construction in Italy (34MW) and Romania (82MW) • Agreement with Unicredit to enter into the capital of ERG Renew as minority shareholder • Full exit from ISAB refinery • Agreement for the sale of ISAB Energy plant, subject to CIP6 early termination Highlights • Acquisition of IP Maestrale wind assets (636MW) December February • M&A deal for wind assets in Romania (70MW) and Bulgaria (14MW)June • Integration of O&M activities on Italian wind farmsOctober
- 7. 7 BUSINESS ENVIRONMENT 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 ITALIAN PRICE ZONAL PRICE SICILY CIP6 Electricity Prices (€/Mwh) 123 119 91 66 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 EMC Margin ($/bbl) (1.1) (3.0) 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 Industry Retail FuelsVolumes (M tons) 5.80 5.63 Results Review 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 Renewables: Electricity Prices (€/Mwh) 146 154 90 91 104 94 (1) Italian price is theoretical price based on National Average Electricity Price (PUN) + GC (2) Price in Romania is based on ERG Renew average price which includes two GCs. Second GC will be cashed in from 2018 onwards 95 92 95 FRANCE ITALY BULGARIA GERMANY ROMANIA (1) (2) 91 65 95
- 8. 8 1,292 2012 0 458 108 (25)30 (1) Power & GasRenewables Refining & Marketing Corporate 2013 569 FY 2013 GROUP EBITDA Ebitda growth driven by Renewables and Power Results Review
- 9. 9 RC Ebitda (€ mn) RENEWABLES RESULTS 2,403 350 Volumes (Gwh) Strong growth driven by ERG Wind 137 37 6 219 0 0 Results Review 4Q 2012 2012 8 43 (1) LUKERG: ERG ‘s stake = 50% in Bulgaria and Romania 111 11 128 8 128 ERG Wind 29 1,154 ERG Wind 4Q 2013 594 43 1,222 127 2013 1,072 2,010 294 449 283 ERG Wind 4Q 2012 2012 4Q 2013 2013 245 59 34 49 3 4 ERG Wind 121 1.3 0.7 ITALY FRANCE LUKERG(1)GERMANY 22 13 61 155 51 3 3
- 10. 10 RC Ebitda (€ mn) POWER RESULTS Volumes (Gwh) Solid figures in Power Results Review 87 104 25 24 241 254 64 59 ERG POWER ISAB ENERGY 328 83 0 2012 4Q 2012 2013 4Q 2013 358 89 6,997 2012 4Q 2012 0 6,805 1,766 1,592 2013 4Q 2013 4,077 2,920 4,142 2,663 1,037 728 923 669
- 11. 10 6 (1) 1 46 48 15 10 11 RC Ebitda (€ mn) MARKETING RESULTS 3Q 2013 EOS TOTALERG Market Share (%) Results still penalized by a tough environment 4Q 2012 1Q 2013 2Q 2013 12.1% 11.5% 0.7% Results Review RC Ebitda (€ mn) 5556 0 4Q 2013 EOS TOTALERG 2012 4Q 2012 2013 4Q 2013 11 14 0.8%
- 12. 12 RC Ebitda (€ mn) REFINING RESULTS: COASTAL AND INLAND 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 Margins ($/bbl) 2.6 4.54 1.31 Volumes(2) (k tons) Worsened and negative Refining (1) Inland Refining EBITDA includes Logistics (2) Volumes relate to 100% of TOTALERG stake in Rome (100%) and Sarpom (24%) Results Review EMC MARGIN COASTAL REFINING MARGIN INLAND REFINING MARGIN (1.1) 3,854 1,385 384 376 4,479 2,215 681 540 8,333 3,600 2012 2013 0 4Q 2012 4Q 2013 1,065 916 INLAND REFINING COASTAL REFINING (35) (59) (9) (50) 0 2012 4Q 2012 2013 4Q 2013 (3) (32) 0.4 (13) (13) (1) (0.3) (3.0) (4) (3) (0.6)
- 14. 14 PRO-FORMA REPLACEMENT COST P&L Note: figures based on NO GAAP measures Key Financials 2013 2012 Euro millions 4Q 2013 4Q 2012 569 458 RC Adjusted EBITDA 132 128 (291) (242) Amortization and depreciation (76) (57) 278 216 RC Adjusted EBIT 56 70 (88) (64) Net financial income (expenses) (23) (13) 4 (0) Net income (loss) from equity investments 0 1 194 152 RC Results before taxes 33 58 (100) (89) Income taxes (18) (34) 94 64 RC Results for the period 15 24 (56) (52) Minority interests (13) (14) 38 12 RC Net profit 3 10
- 15. 15 ADJUSTED INVESTMENTS (1) Renewables adjusted for LUKERG Renew (50%). (2) R&M adjusted forTOTALERG (51%). It does not include ISAB Srl as of September 2012 (3) It includes investment for the acquisition of Tcherga wind farm (ca. €26mn) (4) It includes investments for the acquisition of Gebeleisis (ca. €55mn) and Hrabrovo (ca. €9mn) wind farms and ERG Renew O&M (ca. €10mn) (5) It includes investment for the acquisition of ERG Renew O&M (ca. €10mn) Key Financials CORPORATE REFINING & MARKETING RENEWABLES POWER & GAS (2) (1) 51 41 13 14 71 170 17 51 35 26 15 11 CORPORATE REFINING & MARKETING RENEWABLES POWER & GAS 158 45 2012 4Q 2012 (€ mn) 0 2013 4Q 2013 238 77 1.2 1.7 0.5 0.7 (3) (5) (4)
- 16. 16 1,015 27% 34% 29% Adj. Net Debt 31/12/2012 Cash Flow from operation Working Capital CAPEX Financial Charges Adj. Net Debt 31/12/2013 NFP 51% TotalErg and 50% LUKERG Renew Net Debt 31/12/2013 reported Leverage FY 2013 ADJUSTED CASH FLOW STATEMENT (208) 0 Taxes and Other Dividends ERG Wind Acquisition (487) 1,799 722 88 68 Gebeleisis & Hrabrovo Acquisition 1,565 807 165 722 Eolo Disposal Key Financials ERG Renew O&M Acquisition PUT Option on last 20% ISAB (46) 800 (6)63 10 (426) 63
- 17. 17 2014 GUIDANCE AND CONCLUSIONS CEO LUCA BETTONTE
- 18. 18 569 2013 2014 GUIDANCE AND CONCLUSIONS 237 2013 2014 E LIQUIDITY PF OTHER AT MLT 1,015 ≈800 EBITDA: CAPEX: NFP: 2014: a year of further transformation RENEWABLES CORPORATER&MP&G 0 0 0 ✓P&G EBITDA decrease from July 1, 2014 following CIP6 early termination and sale of ISAB Energy plant ✓Like-for-like growth driven by Renewables and exit from Coastal Refining ✓CAPEX consistent with 2013-2015 Business Plan ✓New Business Plan under definition 2013(2) ≈90 (1) Excluding EBITDA of ISAB Energy in 2H 2013 (€132mn) (2) Excluding 20% ISAB investments (ca. €21mn); including investments for Gebeleisis (€55mn) and Hrabrovo (€9mn) wind farms, and ERG Renew O&M (€10mn) >500 2013 FCST 2013 FCST ≈175 2013 FCST ≈1,300 437(1) ≈1,100 ✓Positive effect on NFP from ISAB Energy transaction 2014 E 2014 E ≈470
- 19. 19 APPENDIX
- 20. 20 1,292 4Q 2012 0 128 22 (6) (13) 2 Power & GasRenewables Refining & Marketing Corporate 4Q 2013 132 4Q 2013 GROUP EBITDA Ebitda growth driven by Renewables Appendix
- 21. 21 807 44% 34% 29% Adj. Net Debt 30/09/2013 Cash Flow from operation Working Capital CAPEX Financial Charges Adj. Net Debt 31/12/2013 NFP 51% TotalErg and 50% LUKERG Renew Net Debt 31/12/2013 reported Leverage 4Q 2013 ADJUSTED CASH FLOW STATEMENT (208) 0 Taxes and Other (178) (114) 1,015 1,565 67 23 10 (426) Appendix 67 PUT Option on last 20% ISAB ERG Renew O&M Acquisition
- 22. 2013 2012 Euro millions 4Q 2013 4Q 2012 10,368 12,457 Adjusted Revenues 2,843 2,645 569 458 RC EBITDA Adjusted 132 128 245 137 - Renewables 59 37 358 328 - Power & Gas 83 89 (5) 21 - Refining & Marketing (2) 10 (30) (28) - Corporate (7) (9) 22 4Q AND FY 2013 RESULTS Appendix
- 23. 23 2013 2012 4Q 2013 4Q 2012 1,340 596 Installed capacity (end-period, MW) 1,340 596 of which: 1,087 512 - Italy 1,086 512 86 n.a. - Germany 86 n.a. 64 64 - France 64 64 27 20 - Bulgaria (1) 27 20 76 n.a. - Romania (1) 76 n.a. 2,403 1,222 Electricity Production (GWh) 594 350 of which: 2,010 1,072 - Italy 449 294 155 n.a. - Germany 51 n.a. 127 128 - France 43 43 57 22 - Bulgaria (1) 17 13 54 n.a. - Romania (1) 34 n.a. RENEWABLES: KEY FIGURES (1/2) Appendix (1) ERG ‘s stake = 50%
- 24. 24 2013 2012 Euro millions 4Q 2013 4Q 2012 RC EBITDA: 219 128 Italy 49 34 11 n.a. Germany 4 n.a. 8 8 France 3 3 6 1 LUKERG (1) 3 1 of which: 4 1 - Bulgaria (1) 1 1 2 n.a. - Romania (1) 2 n.a. 245 137 Total RC EBITDA 59 37 (126) (66) Depreciation (32) (18) 119 71 RC EBIT 27 20 Appendix (1) ERG ‘s stake = 50% RENEWABLES: KEY FIGURES (2/2)
- 25. 25 ISAB ENERGY: KEY FIGURES Appendix 2013 2012 4Q 2013 4Q 2012 4,142 4,077 Sales (Gwh) 923 1,037 653 631 Sales (€ mn) 171 162 254 241 RC EBITDA (Eu mn) 59 64 202 192 RC EBIT (Eu mn) 44 52 90% 88% Net capacity utilization (%) 79% 89% 119 123 CIP6 tariffs (Eu/MWh) 119 123 173 149 EBITDA IT GAAP (Eu mn) 45 44
- 26. 26 ERG POWER: KEY FIGURES Appendix 2013 2012 Euro millions 4Q 2013 4Q 2012 2,663 2,920 Electricity Production (GWh) 669 728 104 87 RC EBITDA 24 25 (28) (27) Depreciation (7) (7) 76 61 RC EBIT 17 18
- 27. 27 INTEGRATED DOWNSTREAM: KEY FIGURES(1) Appendix (1) Figures include 51% stake inTOTALERG and 100% EOS (2) Estimated market share referring to 100% of TOTALERG 2013 2012 Euro millions 4Q 2013 4Q 2012 45 53 Adjusted RC EBITDA 11 11 55 56 - Marketing 11 14 (9) (3) - Inland refining and logistics 0 (3) (60) (59) Adjusted Depreciation (16) (14) (15) (6) Adjusted RC EBIT (5) (3) 41 37 Investments 14 13 11.3% 11.2% TOTALERG retail market share(2) 11.5% 12.1% 0.8% 1.0% EOS retail market share 0.7% 0.8%
- 28. 28 COASTAL REFINING: KEY FIGURES(1) Appendix (1) Figures are adjusted for ERG’s stake in ISAB Srl (40% from January to August 2012, 20% afterwards) (2) Investments do not include 20% ISAB investments 2013 2012 Euro millions 4Q 2013 4Q 2012 35 107 Gross refining margin 10 21 (50) (32) Adjusted RC EBITDA (13) (1) (23) (38) Adjusted Depreciation (6) (6) (73) (70) Adjusted RC EBIT (19) (7) 0 14(2) Investments(2) 0 0