q1 2018 results - a2a-be.s3.eu-west-1.amazonaws.com18 balance sheet annexes – q1 consolidated...
TRANSCRIPT
Q1 2018 ConsolidatedResults
Milan, May 10th,2018
2
HIGHLIGHTS
ANALYSIS OF RESULTS
AGENDA
ANNEXES
3
CCGT AND HYDRO VOLUMES
CCGT PERFORMANCE ON MSD
ENVIRONMENTAL MARKETS
MOODY’S UPGRADES A2A’S RATING FROM BAA3 TO BAA2
SCENARIO EFFECT
GAS MARGIN
Q1 2018 vs Q1 2017
Highlights
4Q1 2017
Restated*
180
Q1 2018
173
-7(-4%)
-7(-4%)
FY 2017
Restated*
3,226
Q1 2018
3,135
Changein
Perimeter
41
Q1 2018
3,176
-50(-2%)-50
(-2%)
Q1 2017
Restated*
393
1Q 2018
408
+15(+4%)+15
(+4%)
Q1 2017
Restated*
1,622
Q1 2018
1,812
+190(+12%)+190
(+12%)
Key Financial Indicators
REVENUES EBITDA
GROUP NET INCOME
NET FINANCIAL POSITION
€M
* Restated values refer to effects coming from LGH’s PPA and classification of EPCG’s economic values under IFRS 5
Highlights
5
HIGHLIGHTS
ANALYSIS OF RESULTS
ANNEXES
AGENDA
6
3
Analysis of results
Group EBITDA Overview
+14% -16% - -1%
€M
7
Generation
€M
• Negative impact of growing gas priceon clean spark spreads
• Production Volumes up 24%
• Strong MSD
• Green Certificates portfolio sold (~ 632
GWh)
Analysis of results
Thermal Production
(GWh)
2.976Q1 ‘17
3.766Q1 ‘18
+26,5%
HydroProduction
(GWh)
747Q1 ‘17
848Q1 ‘18
+13,5%
MSDMargin
(€M)
57Q1 ‘17
77Q1 ‘18
+35%
Green Certificates& Feed-in Tariff
(€M)
45Q1 ‘17
84Q1 ‘18
>100%
8
Market
• Customer base growth in line with plan
• Stable unitary margins
• Higher marketing costs
• Strong negative temporary items
-6,9%
Gas Sales(Mmc)
720Q1 ‘17
715Q1 ‘18
Analysis of results
Free MktCustomer
(‘000 EOP)
753Q1 ‘17
916Q1 ‘18
+21,6%
Energy Retail
€M
+27,1%
ElectricitySales(GWh)
2.056Q1 ‘17
2.614Q1 ‘18
9
Waste
€M€M
• Collection: lower paper prices and higher disposal costs
• Increasing disposal prices to treatment plants
• Waste Treatment: decrease in Grottaglie landfill disposal due to delay in authorization (authorized in April 2018)
Analysis of results
WasteCollection
(Kton)
386Q1 ‘17
400Q1 ‘18
+3,6%
Waste Treatment
(Kton)
893Q1 ‘17
863Q1 ‘18
-3,3%
Equivalent EE Sales(GWh)
549Q1 ‘17
535Q1 ‘18
-2,5%
10
Networks and DH
€M
• Lower regulated revenues on electricitynetworks
• District Heating: negative scenario effects partially offset by higher DH volumes
• Higher IWC tariffs
Analysis of results
* Provisional data, underlying the estimate of allowed revenues of the period
RAB* GAS(M€)
1.155Q1 ‘17
1.183Q1 ‘18
+2,4%
Heat Volumes(GWht)
1.325Q1 ‘17
1.388Q1 ‘18
+4,8%
RAB* EE(M€)
634Q1 ‘17
631Q1 ‘18
-0,5%
11
From EBITDA to Group Net Income
Analysis of results
Q1 2017Restated
393 (99) 258 4 (4) 1802 (27)(11) (78)-
€M
• D&A: 2017 CAPEX & REN acquisitions
• Net Financial Expenses: unwinding of derivatives (one off on REN)
• Tax rate: Q1/17 30%; Q1/18 32%;
12
Capex
Analysis of results
BREAKDOWN BY ACTIVITY BREAKDOWN BY BUSINESS
+23€M201753€M
201876€M
€M
2017
4
12
33
53
2018
3
18
48
76
+23(+43%)
1
2
1
2
3
2
+23(+43%)
Generation
Market
Waste
Networks and DistrictHeating
Corporate
A2A SmartCity
13
Net Free Cash Flow
Analysis of results
(1) Funds from operations after working capital change(2) Includes 1€M capex related to EPCG
393 (239) 171 (54) (8) 109Q1 2017Restated
(4) (45)(1)67 117(2)
€M
14
Guidance 2018 reiterated
1,150 - 1,180 €M
(1) Incl. ~60 €M M&A; (2) Excluding change in perimeter
2018EBITDA
360 - 390 €MNET INCOME
600+ €MCAPEX(1)
0 - 100 €MNET FREE CASH FLOW(2)
GUIDANCEREITERATED
Plus 20 - 30 €M non recurring
Analysis of results
€M
15
ANNEXES
AGENDA
ANALYSIS OF RESULTS
HIGHLIGHTS
16
Business Units EBITDA Breakdown
Annexes
€M
Reported Ordinary Reported Ordinary
a2a 393 388 408 402 15 4% 14 4%
Generation 150 149 171 170 21 14% 21 14%Power Generation 122 121 160 159 38 31% 38 31%
Gas Margin 28 28 11 11 -18 -63% -18 -63%
Market 49 48 41 40 -8 -16% -8 -16%Energy Retail 44 44 38 37 -6 -15% -7 -15%
Public Lighting 4 4 2 2 -1 -32% -1 -32%
Energy Solutions 1 1 1 1 0 14% 0 14%
Waste 71 71 72 71 1 1% 0 0%Collection 20 20 15 14 -6 -28% -6 -29%
Urban Waste Treatment 49 49 53 52 4 7% 3 6%
Other Treatment Plants 2 2 5 5 4 197% 3 184%
Networks 128 125 126 124 -2 -2% -1 -1%Electricity Networks 35 33 30 31 -5 -14% -2 -6%
Gas Networks 30 30 32 31 2 7% 1 3%
Water Cycle 9 9 12 12 3 33% 3 33%
District Heating 54 53 52 50 -2 -4% -3 -6%
Smartcity 1 1 2 2 1 n.s. 1 n.s.
Other -6 -5 -4 -5 2 n.s. 1 n.s.
2017 Q1 2018 Q1 Delta
Reported Ordinary
17
P&L
Annexes – Q1 consolidated results
€M
Q1 2017 Restated
Q1 2018 CHANGE %
Revenues 1,622 1,812 190 11.7%
EBITDA 393 408 15 3.8%
D&A (99) (108) (9) 9.1%
Provisions (11) (13) (2) 18.2%
EBIT 283 287 4 1.4%
Net Financial
Expenses(27) (30) (3) -11.1%
Associates & JV 2 1 (1) -50.0%
Result from non
recurr. Transactions0 0 0 n.a.
EBT 258 258 0 -
Taxes (78) (83) (5) 6.4%
Net Result from
disc. operations4 2 (2) -50.0%
Minorities (4) (4) 0 -
Group Net Income 180 173 (7) -3.9%
18
Balance Sheet
Annexes – Q1 consolidated results
€M
* Q1 2018 includes 2€M of Net Working Capital and 4€M of Other Current Asset regarding Change in Perimeter
2017 FY Q1 2018 CHANGE %
Tangible Assets 4,606 4,592 (14) -0.3%
Intangible Assets 1,893 1,902 9 0.5%
Shareholdings and Other Non
Current Financial Assets71 71 0 -
Other Non Current
Assets/Liabilities(117) (129) (12) 10.3%
Deferred Tax Assets and
Liabilities301 295 (6) -2.0%
Provisions for Risks, Charges
and Liabilities for landfills(625) (626) (1) 0.2%
Employee Benefits (319) (315) 4 -1.3%
Net Fixed Capital 5,780 5,790 10 0.2%
Net Working Capital* 437 756 319 73.0%
Other Current
Asset / Liabilities*(305) (431) (126) 41.3%
Current Tax
Asset / Liabilities103 26 (77) -74.8%
Working Capital and Other
Current Assets/Liabilities235 351 116 49.4%
Non current Assets /Liabilities
held for sale224 226 2 0.9%
Total Capital Employed 6,239 6,367 128 2.1%
Equity 3,013 3,191 178 5.9%
Net Financial Position 3,226 3,176 (50) -1.5%
Total Sources 6,239 6,367 128 2.1%
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Average dataQ1
2017Q1
2018D % vs
2017
Brent $/bbl 54,7 67,2 23%
CO2 - EU ETS cost €/Tonn 5,2 9,8 90%
€/$ €/$ 1,1 1,2 15%
Brent € €/bbl 51,4 54,6 6%
PSV(1) €/MWh 20,4 21,9 7%
AEEGSI Gas Tariff (2) c€/mc 19,2 20,8 9%
Coal € (API2) €/Tonn 76,4 70,6 -8%
PUN baseload(3) €/MWh 57,4 54,3 -5%
PUN peak(3) €/MWh 66,4 62,6 -6%
PUN off-peak(3) €/MWh 52,4 49,6 -5%
CCGT gas cost(4) €/MWh 48,9 52,6 8%
Costo Coal €/MWh 38,5 35,8 -7%
Environmental costs (CCGT) €/MWh 2,0 3,7 90%
Environmental costs (Coal) €/MWh 5,0 9,5 90%
Spark Spread CCGT_PSV vs Baseload €/MWh 8,6 1,7 -80%
Spark Spread CCGT_PSV vs Peakload €/MWh 17,5 10,0 -43%
Spark Spread CCGT_PSV vs Off-Peak €/MWh 3,5 -3,0 n.s.
Clean Spark Spread vs Baseload €/MWh 6,6 -2,0 n.s.
Clean Spark Spread vs Peakload €/MWh 15,6 6,3 -60%
Clean Dark Spread vs Baseload(5) €/MWh 13,9 9,0 -36%
(1) Gas at virtual trading point
(2) Pfor 162/14 Oct 2014-Mar 2016.
(3) hourly average for each month
(4) based on gas at virtual trading point with 51% efficiency; includes transport costs
(5) 35% efficiency - includes cost spread on API2 and transport cost
(6) data subject to update by Terna
Energy Scenario
Annexes
20
• Acquisition of new PV plants from Impax (+15.7 MW)
GENERATION
WASTE
MARKET
NETWORKS
a2a T
2018 2022Transformation Excellence
a2a E
2018 2022Community
a2a C
2018 2022
• Cavaglià Plastic treatment plant construction finalized (to be tested)
• Brescia sorted collection rate up to 65% on march 2018
• Tender on collection in Rapallo won
• Public Lighting: +4 K lighting points
• Moody's upgrades A2A's ratings from Baa3 to Baa2 with stable outlook
• Q1 2018 CAPEX - over 13 €M in Digital and 3 €M in Tech Innovation
• INTERNAL Community:‒ Talent program pilot on
BU Networks‒ Contract harmonization
BU Market completed‒ Smart working pilot
extended ‒ New policy on work
environment reshape• EXTERNAL Community:
‒ Innova2a workgroup project started
‒ First innovation initiative tested, in scale up mode across the whole organization
Sustainability• Approved the updated Sustainability Plan integrated with the 2018-2022 Strategic Plan• Voluntary assessment on sustainability topics by an independent Rating Institution (Standard Ethics) • “Missione Terra” event to increase awareness of sustainability issues, + 800 students involved• New campaign on circular economy matters (Viaggio della Materia) on web, social and mass media
• Aggregations: Northern Lombardy Multiutility project approved by municipalities • EPCG: agreement on accelerated put option execution with local government
Annexes
Update on Strategic Progress
• Boosted CAPEX execution (Unareti +30% vs 2017Q1)
• Val Trompia water treatment plant – project launched, work starting oct 18
• Heat storage project started
21
CONTACTS
A2A Investor Relations Team
Mail: [email protected]
Phone: +39 02 7720 3974
http://www.a2a.eu/en/investor/
This document has been prepared by A2A solely for investors and analysts. This document does not constitute an offer or invitation to purchase or subscribe any shares or other securities and neither itnor any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Some information contained herein and other material discussed at the meetingsmay include forward-looking information based on A2A’s current beliefs and expectations. These statements are based on current plans, estimates, projections, and projects and therefore you shouldnot place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materiallyfrom those contained in any forward-looking statement. Such factors include, but are not limited to changes in global economic business, changes in the price of certain commodities includingelectricity, gas and coal, the competitive market and regulatory factors. Moreover, forward-looking statements are current only at the date on which they are made.