Annual Media Conference 2020 - Think energy. …...Alpiq Holding Ltd. | Annual Media Conference 2020...
Transcript of Annual Media Conference 2020 - Think energy. …...Alpiq Holding Ltd. | Annual Media Conference 2020...
Annual Media Conference 2020
Olten, 2 March 2020
Alpiq Holding Ltd. | Annual Media Conference 2020
Agenda
2
1. Alpiq strong in the international business
2. 2019 Key Financial Figures
3. Alpiq benefits from increased prices in 2020
4. Alpiq is part of a climate-friendly energy future
5. Questions and answers
Alpiq Holding Ltd. | Annual Media Conference 2020
Alpiq ready for the next step• CSA Energy Infrastructure Switzerland invests in Alpiq• André Schnidrig elected as new CEO• Earnings expected to recover in 2020
Alpiq strong in the international business
3
Solid balance sheet thanks to systematic financial strategy• Net debt reduced to CHF 206 million• Sound liquidity at CHF 1.1 billion• Equity ratio increased to 49.8 %
EBITDA before EI of CHF 106 million, as expected,down on the previous year• Good year for new renewable energies in Europe and international energy trading• Phase-out of coal negatively impacts business figures for 2019• Despite market premium, Swiss hydropower operating at a loss
Alpiq Holding Ltd. | Annual Media Conference 2020
Results of operations
• As announced, EBITDA before exceptional items down on the previous year. Generation International negatively impacted by phase-out of coal, partly compensated for by excellent results in the ancillary services market in Italy
• IFRS earnings negatively impacted by impairment of coal-fired power plants
• Operating cash flow down on the previous year as a result of investments in net working capital
• Reduction of net debt compared to the end of 2018
2019 Key Financial Figures
4
Phase-out of coal influences business figures for 2019
Net debt (IFRS)EBITDA before EINet revenue before EI Earnings after taxfrom continuing operations (IFRS)
Operating cash flow from continuing operations (IFRS)
7
-17
-24
206
247
-41
2018 2019 31 Dec 2018 31 Dec 20192018
5,240
-1,038
4,080
Bus
ines
sde
velo
pmen
t
2019
-122
FX e
ffec
t
-1,160
166106
2018
2019
-53
FX e
ffec
t
Bus
ines
sde
velo
pmen
t
-7
-60
-261 -226
Bus
ines
sde
velo
pmen
t
35
2019
2018
0
FX e
ffec
t
+35
CH
F m
illio
n
Alpiq Holding Ltd. | Annual Media Conference 2020
Hedging transactions from previous years with time-delayed effect
5
Alpiq hedges energy and currency in advance on a rolling two-to three-year basis on average
0.9
1
1.1
1.2
1.3
2014 2015 2016 2017 2018 201920
40
60
80
2014 2015 2016 2017 2018 2019
Cal-17 CH Base Cal-18 CH Base Cal-19 CH Base
Average spot prices
EUR/C
HF
Average forward prices with hedge level–CH
EUR/M
Wh
Time lapse of wholesale price effect causes lower earnings in 2019
Average hedging price 2017: EUR 44/MWh2018: EUR 38/MWh2019: EUR 34/MWh
Currency effect with marginal impact compared to the previous year
Average hedging rate 2017: EUR 1.04/CHF2018: EUR 1.06/CHF2019: EUR 1.08/CHF
Average hedging rateAverage hedging price
Alpiq Holding Ltd. | Annual Media Conference 2020
Generation Switzerland
• Alpiq systematically hedges production in the market against price and currency fluctuations
• Positive volume effect primarily attributable to unscheduled maintenance work at Leibstadt nuclear power plant in the previous year
• Despite higher market premium, hydropower operating at a loss
Development of EBITDA by business division (I)
6
Despite market premium, climate-friendly Swiss hydropower still operating at a loss
-38-26
-410
EBIT
DA
2018
befo
re E
I
Pric
e ef
fect
Prod
uction
volu
mes
6
Var
ious
(inc
l. m
arke
t pr
emiu
m)
EBIT
DA
2019
befo
re E
I
CH
F m
illio
n
Alpiq Holding Ltd. | Annual Media Conference 2020
Generation International
• Thermal production down on previous year on account of the strategic sale of the two coal-fired power plants
• New renewable energies slightly lower than in the previous year, mainly due to lower availability and lower prices in Italy
Development of EBITDA by business division (II)
7
International power production makes biggest contribution
156
88
-4
-64
5548
EBIT
DA
2018
befo
re E
I
FX e
ffec
t
-4
Bus
ines
sde
velo
pmen
t
-3
EBIT
DA
2019
befo
re E
I
Digital & Commerce
• Excellent results in the ancillary services market in Italy
• Positive development in Eastern Europe
• Alpiq invests in digital technologies and innovations
CH
F m
illio
nCH
F m
illio
n
Alpiq Holding Ltd. | Annual Media Conference 2020
Development of EBITDA before EI after phase-out of coal
8
Alpiq has substantially reduced its CO2 emissions by phasing out coal
166106
51 26
11580
2019
vs.
2018
2019
Alp
iq G
roup
2019
Alp
iq G
roup
w/o
Coa
l-fir
edpo
wer
pla
nts
2018
Alp
iq G
roup
-60
2019
vs.
2018
2018
Alp
iq G
roup
w/o
Coa
l-fir
edpo
wer
pla
nts
-25
2018
Coa
l-fir
edpo
wer
pla
nts
2019
Coa
l-fir
edpo
wer
pla
nts
-35
2019
vs.
2018
15688
51 26
10562
2019
vs.
2018
2018
Gen
Int
2019
vs.
2018
2019
Gen
Int
-6820
18Coa
l-fir
edpo
wer
pla
nts
2019
Coa
l-fir
edpo
wer
pla
nts
-25
2018
Gen
Int
w/o
Coa
l-fir
edpo
wer
pla
nts
-43
2019
vs.
2018
2019
Gen
Int
w/o
Coa
l-fir
edpo
wer
pla
nts
Alpiq Group
Generation International
CH
F m
illio
nCH
F m
illio
n
Alpiq Holding Ltd. | Annual Media Conference 2020
Alpiq generates solid operating annual results as expected
9
International production: again makes biggest contribution to the Alpiq Group’s results of operations, but negatively impacted by phase-out of coal
Digital & Commerce: encouraging course of business
Swiss production: still operating at a loss, but above previous year
55 48
156
88
-38 -26
2018 2019
Generation International
Generation Switzerland
Digital & Commerce
Alpiq strong in the international business, but negatively impacted by phase-out of coal
EBITDA before EI
CH
F m
illio
n
Alpiq Holding Ltd. | Annual Media Conference 2020
Exceptional items on EBITDA level
10
Alpiq uses alternative performance measures to measure and present its operating performance, making adjustments to the IFRS results for so-called exceptional items (EI).
CHF million 2019 2018
Development of decommissioning and waste disposal funds 111 -96
Effects from business disposals -19 0
Impairment losses and onerous contracts -48 19
Restructuring costs and litigation -20 -16
Fair value changes (accounting mismatch) 38 -64
Total exceptional items on EBITDA level 62 -157
Alpiq Holding Ltd. | Annual Media Conference 2020
Development of earnings after taxfrom continuing operations (IFRS)
11
Phase-out of coal impacts result
-261 -226
-60
-263
-90
207
Exce
ptio
nal i
tem
:Im
pair
men
t
Del
ta a
t EB
ITD
A lev
elbe
fore
EI
Exce
ptio
nal i
tem
:D
evel
opm
ent
ofde
com
mis
sion
ing
and
was
tedi
spos
al f
unds
201
8-20
19
Exce
ptio
nal i
tem
:Fa
ir-V
alue
-Cha
nges
2018
-201
9
Earn
ings
aft
er t
axfr
om c
ontinu
ing
oper
atio
ns20
18 (
IFRS)
Dep
reci
atio
nbe
fore
EI
28
102
Var
ious
exc
eption
al it
ems
2018
-201
9
42
Fina
ncia
l res
ult
(IFR
S)
66
Inco
me
tax
(IFR
S)
3
Var
ious
Earn
ings
aft
er t
axfr
om c
ontinu
ing
oper
atio
ns20
19 (
IFRS)
+35
CH
F m
illio
n
Alpiq Holding Ltd. | Annual Media Conference 2020
Development of operating cash flow
12
Operating cash flow negatively impacted by development of decommissioning and waste disposal funds in 2019
106
168
-17
62
17
Taxe
s pa
id
EBIT
DA (
IFRS)
2019
-85
EBIT
DA
2019
bef
ore
EI
Cha
nge
inac
crua
ls/p
rovi
sion
s
Exce
ptio
nal i
tem
s-111
Dev
elop
men
t of
deco
mm
issi
onin
g an
dw
aste
dis
posa
l fun
dsin
201
9
Cha
nge
in N
WC D
&C
-12 6
Var
ious
Ope
rating
cas
h flo
wfr
om c
ontinu
ing
oper
atio
ns20
19
CH
F m
illio
n
Alpiq Holding Ltd. | Annual Media Conference 2020
Development of liquidity
13
265
Liqu
idity
at31
Dec
201
8
1,255
Inve
stm
ents
FX e
ffec
t
Ope
rating
cas
h flo
wfr
om c
ontinu
ing
oper
atio
ns
-75
Inte
rest
pai
din
cl. hy
brid
inte
rest
-213
Rep
aym
ent
ofbo
nds
and
loan
s
-30 7
Cas
h flo
w fro
mdi
scon
tinu
ed o
pera
tion
s
Var
ious
-18
1,101
Liqu
idity
at31
Dec
201
9
-17
Proc
eeds
fro
m d
ives
tmen
t:Sal
e of
coa
l-fir
ed p
ower
pla
nts
-73
Liquidity still sound after repayment of debts
CH
F m
illio
n
Alpiq Holding Ltd. | Annual Media Conference 2020
Development of net debt
14
-247-206
-17
-73
-75
-30-25
Net
deb
t at
31 D
ec 2
018
Proc
eeds
fro
m d
ives
tmen
t:Sal
e of
coa
l-fir
edpo
wer
pla
nts
Ope
rating
cash
flo
w
Inve
stm
ents
Leas
e lia
bilit
ies
addi
tion
ally
rec
ogni
sed
base
d on
the
initia
lap
plic
atio
n of
IFR
S 1
6
265
Cas
h flo
w fro
mdi
scon
tinu
ed o
pera
tion
s
Inte
rest
pai
din
cl. hy
brid
inte
rest
-4
FX e
ffec
t&
var
ious
Net
deb
t at
31 D
ec 2
019
Further reduction in net debt from phase-out of coal
CH
F m
illio
n
Alpiq Holding Ltd. | Annual Media Conference 2020
Maturity profile at 31 December 2019
15
Financial liabilities staggered over long term
• Sound liquidity of CHF 1,101 million
• Financial liabilities of CHF 1,307 million
2024
1,101
115
2023
292
202231.12.2019 202520212020
334
2026 2027 2028 2029ff
275182
4911 7 32 12
Liquidity Bonds Lease liabilitiesPrivate placementsBank loans
CH
F m
illio
n
Alpiq Holding Ltd. | Annual Media Conference 2020
Net debt
16
Sound net debt/EBITDA thanks to systematically implementing the financial strategy
• Net debt further reduced by CHF 41 million to CHF 206 million
• Net debt/EBITDA before exceptional items of 1.9
856714
247 206
796
609480
395301
166 106
2.7
2.22.4
1.5
1.9
2014 2017 2018
2.6
20152013
3.2
2016 2019
2,0501,939
1,299
Net debt Net debt/EBITDA before exceptional itemsEBITDA before exceptional items
CH
F m
illio
n
Alpiq Holding Ltd. | Annual Media Conference 2020
Sound balance sheet
17
Sound balance sheet thanks to a systematic financial strategy
• Sound Liquidity:CHF 1.10 billion (31 Dec 2018: CHF 1.25 billion)
• Equity ratio increased:49.8% (31 Dec 2018: 43.5%)
43.5%
0.1%
37.7%
0.3%39.7%
60.3%
56.5%
62.1%
50.1%
49.8%
CHF 9,074 million CHF 7,369 million
31 Dec 2018 31 Dec 2019
Assets held for sale
Current assets Liabilities
Liabilities held for sale
Non-current assets Equity
Alpiq Holding Ltd. | Annual Media Conference 2020
Overview legal cases
18
Arbitration claim with Bouygues Construction:
• In the request filed for arbitration claim, Bouygues Construction has increased the amount it is demanding from CHF 205.1 million to around CHF 319 million plus interest
• Ruling by arbitration court expected during 2022
• Alpiq continues to contest both in terms of its amount and on its merits
Administrative order imposing a fine from German Federal Cartel Office:
• Outcome of proceedings and any fines are currently unknown
• Alpiq deems conviction unlikely
Tax audit in Romania:
• ANAF’s tax assessment of RON 589 million (CHF 134 million) is not enforceable until a first-instance court decision has been reached
• Bank guarantee and pledged bank account rescinded on 14 February 2019
• Alpiq continues to deem it unlikely that this assessment will result in a negative outcome for the company and has therefore decided not to record a liability for the tax assessment
Alpiq Holding Ltd. | Annual Media Conference 2020
Alpiq benefits from increased prices in 2020
19
Rising prices have a time-delayed positive effect on earnings
Wholesale prices
• Wholesale prices increased and stabilised• Average hedging price: 2019: EUR 34/MWh
2020: EUR 39/MWh2021: EUR 47/MWh
CO2 prices
• Tripled in 2018• Volatile, sideways movement in 2019
EUR/CHF exchange rate
• Delayed positive currency effect• Average hedging rate: 2019: EUR 1.08/CHF
2020: EUR 1.16/CHF2021: EUR 1.14/CHF
25
30
35
40
45
50
55
60
2018 2019 2020CH Base Cal-20 CH Base Cal-21 CH Base Cal-22
EUR/C
HF
EUR/t
EUA Price (CO2)
FX EUR/CHF
EUR/M
Wh
CH Power Price (1.1.2018 – 28.2.2020)
0
5
10
15
20
25
30
35
2018 2019 2020EUA Cal-20 EUA Cal-21 EUA Cal-22
1
1.05
1.1
1.15
1.2
1.25
2018 2019 2020EUR/CHF Cal-20 EUR/CHF Cal-21 EUR/CHF Cal-22
Alpiq Holding Ltd. | Annual Media Conference 2020
Decarbonisation leads to higher electricity consumption• European Green Deal: 50 % CO2 reduction by 2030, 100 % climate neutral
by 2050• Second electrification: fossil fuels to be electrified and replaced
by climate-neutral fuels• Investments in fossil fuels becoming a risk, money being directed
into renewable energies
Supply security needs flexible, controllable power plants• National economy must be supplied with electricity with no interruptions• Building additional wind/photovoltaic plants weakens stability of the grid• Phase-out of coal and nuclear power raises import risk in winter
Energy transition and supply security pose a challenge
20
Alpiq Holding Ltd. | Annual Media Conference 2020
Alpiq is part of a climate-friendly energy future
21
Alpiq Holding Ltd. | Annual Media Conference 2020
Financial calendar 2020
22
Interim results 202024 August 2020
Annual General Meeting of Alpiq Holding Ltd. in Lausanne24 June 2020
You ask. We answer.
Alpiq Holding Ltd. | Annual Media Conference 2020
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.
Disclaimer
24Bilanzmedienkonferenz 2019