Hafslund ASA 24 October 2013 Finn Bjørn Ruyter, CEO · 24 October 2013 Finn Bjørn Ruyter, CEO....
41
Hafslund ASA 24 October 2013 Finn Bjørn Ruyter, CEO
Transcript of Hafslund ASA 24 October 2013 Finn Bjørn Ruyter, CEO · 24 October 2013 Finn Bjørn Ruyter, CEO....
Hafslund ASA
24 October 2013
Finn Bjørn Ruyter, CEO
Agenda
1) Third quarter 2013 – Finn Bjørn Ruyter, CEO
2) Hafslund Heat – Finn Bjørn Ruyter, CEO
Highlights third-quarter 2013
• EBITDA of NOK 633 million, compared with prior-year figure of NOK 382 million – with operating activities contributing an increase of NOK 143 million.
• Improved power market generates achieved power price of NOK 0.25/kWh – up NOK 0.10/kWh on previous year.
• Networks business up NOK 42 million against previous year primarily due to changes in regulatory conditions.
• Sale of shares in Infratek ASA for NOK 386 million generates profit of NOK 90 million in the quarter.
• Power sales customers top one million mark – shareholding in Energibolaget i Sverige (EBS) raised from 49% to 100% in October.
s.3
EBITDA third-quarter 2013 and change from 2012
s.4
633
Production
163
EBITDAOther
95
Markets
83
Network
286
Heat
6
NOK mill
633
EBITDA Q3 13
Other
166
Markets
1
Network
41
Heat
36
Production
80
EBITDA Q3 12
382
EBITDA Q3 13 Change in EBITDA from 2012
Quarterly development in EBITDA for core business
• Results vary throughout the year due to power prices, production profile and energy demand for:
– Production
– Heat
• Network with stable quarterly results.
• Annual rate of EBITDA will change appr:
– NOK 38 million with a NOK 0.01 per kWh change in power prices and full spot price exposure.
s.5* EBITDA for core business Production, Heat, Network and Markets (excluding Other).** Achieved power prices for Hydropower in NOK/kWh.
100
50
0.10
0.20
0.30
0.00
400
700
650
600
550
500
450
0
350
300
250
200
150
0.55
0.45
0.40
0.50
0.35
0.25
0.15
0.05
Q1 1
2
Q4 1
1
Q3 1
1
569
603
507
453
673648
450
513538
NOK/kWh
Q3 1
3
MNOK
Q2 1
3
Q1 1
3
Q4 1
2
Q3 1
2
Q2 1
2
0.21
0.15
0.270.29
0.28
0.25 0.250.27
0.25
Power price **EBITDA *
Capital release reduces interest-bearing debt
s.6
30
20
10
0
60
50
2
0
40
12
10
8
6
4
30%
Q4 2012
10,6
30%
Q3 2012
9,6
28%
NOK billion
Q2 2013
10,0
Equity ratio in %
29%
Q1 2013
9,9
31%
9,8
Q3 2013
EK-andelNetto rentebærende gjeld
Net interest-bearing debt and equity ratio * Change in interest-bearing debt (NOK million)
* New pension standard IAS 19R implemented from 01.01.2013. Equity(ratio) revised for 2012 for comparison purposes.Net equity effect of NOK -286 million due to new pension standard IAS 19R.
Net interest-bearing debt 30.06.2013 (10 020)
EBITDA 633
Interest paid (84)
Change in market value of financial instruments (98)
Change working capital (436)
Investments (180)
Capital release 381
Net interest-bearing debt 30.09.2013 (9 804)
Production
• Higher power prices compared to last year resulted in an increase in gross margin of NOK 93 million.
• Low precipitation gave production 11 percent below normal.
• Expected production about 10 percent below normal for the fourth quarter.
• 45 percent hedge ratio next 6 months – hedge price NOK 0.007 per kWh lower than market price listed 30 September 2013.
s.7
800
600
400
200
250
200
150
100
50
0 0
1.200
1.000
EBITDA per quarterNOK million
Q3 13
163
EBITDA rolling 12 month
Q2 13
177
Q1 13
111
Q4 12
185
Q3 12
83
Q2 12
133
Q1 12
87
Q4 11
138
Q3 11
209
EBITDA rolling 12 monthsEBITDA
NOK million Q3 13 Q3 12 YTD 2013 YTD 2012
Operating revenue 229 150 654 512
Gross margin 228 143 643 508
EBITDA 163 83 452 302
Operating profit 152 72 416 268
Sales price (NOK/kWh) 0.25 0.15 0.27 0.20
Production volume (GWh) 825 924 2 170 2 413
Investments 7 4 19 9
Hydropower – Glomma waterway flow
s.8
3 000
2 500
2 000
1 500
1 000
500
0
m3/sek.
decnovoctsepaugjuljunmayaprmarfebjan
Max. capacity utilizationNormal2013
Hydropower – production and power prices
s.9
Source for price data: www.nordpoolspot.com and www.nasdaqomxcommodities.com *Normal = 3,100 GWh based on 10-year average production adjusted for efficiency improvements.
200
150
100
0.15
0.20
50
0.25
0.30
0.35
0
400
350
300
250
218
NOK/kWh
296
GWh
Dec
232
Nov
220
Oct
238
Sep
247
Aug
311328
Jul
350
Jun
341353
May
310
363
Apr
174
225
Mar
133
160
Feb
165174
Jan
222211
Forward system priceSpot price2013Normal*
Heat
• Higher prices for wholesale power gave improved results compared to last year.
• Production in line with last year in a quarter with seasonally low energy demand.
• Last year's quarter includes net non-recurring items of NOK -182 million.
• New customer tie-ins with an annual energy output of 24 GWh completed this year.
• 37 percent hedge ratio of net power price exposure for the coming six months – hedge price NOK 0.017 per kWh lower than market price listed 30 September 2013.
s.10
120
100
180
160
80
140
60
40
20
0
400
350
300
250
200
150
100
50
0
EBITDA per quarter
20
122
Q3 12
42
EBITDA rolling 12 month
Q2 12Q1 12
129
Q4 11
61
Q3 11
10
Q3 13
6
Q2 13
37
Q1 13
174
Q4 12
EBITDA rolling 12 monthsEBITDA
NOK million Q3 13 Q3 12 YTD 2013 YTD 2012
Operating revenue 106 162 804 712
Gross margin 59 111 407 385
EBITDA 6 42 217 191
Operating profit (43) (241) 85 (174)
Production volume (GWh) 230 230 1 454 1 294
Gross margin (NOK/kWh) 0.30 0.24 0.30 0.32
Investments 1 97 39 189
District heating – energy sources and prices
• Fuel cost reflects high proportion of waste in a quarter with low energy demand.
• Sales price of NOK 0.57 per kWh - up NOK 0.10 due to higher electricity prices.
• Gross contribution margin of NOK 0.30 per kWh is an increase of NOK 0.10 on previous year.
• Renewable share of 95 percent last 12 months – 99 percent in the quarter.
s.11
Waste & biofuel
Heat pumps
Pellets
Biooil & biodiesel
Electricity
Oil/natural gas
400
300
200
100
800
700
600
500
400
300
200
100
00
800
700
600
500
GWhGWh
Q2 13
291
Q1 13
795
Q4 12
634
Q3 12
166
Q3 13
157Pro
du
cti
on
in
GW
h
Energy prices (NOK/kWh) Q3 12 Q4 12 Q1 13 Q2 13 Q3 13
Waste 0.22 0.22 0.22 0.22 0.22
Heat pumps 0.08 0.13 0.15 0.16 0.14
Biooil 0.00 0.56 0.56 0.56 0.00
Pellets 0.00 0.29 0.29 0.29 0.00
Electricity 0.22 0.34 0.41 0.44 0.38
Fossil oil 0.65 0.63 0.65 0.61 0.65
Total fuel cost 0.25 0.27 0.32 0.26 0.24
District heating incl. Distribution 0.47 0.62 0.67 0.63 0.57
Reduced contribution margin
due to grid losses0.02 0.03 0.03 0.03 0.03
Gross contribution margin 0.20 0.32 0.30 0.34 0.30
Heat – production profile
s.12
350
150
0
50
100
300
250
200
66
98
GWh
66
Dec
321
Nov
204
Oct
174
Sep
98
Aug
60
Jul
72
Jun
6460
May
106105
Apr
185170
Mar
273
177
Feb
270265
Jan
326
287
20132012
Network
• Networks business up NOK 42 million against previous year primarily due to changes in regulatory conditions.
• The gross margin includes an under income of NOK 44 million (Q3 12: excess income of NOK 65).
• KILE costs of NOK 16 million (NOK 16 million).
• Energy delivery of 2.8 TWh – in line with last year.
• Given normal energy demand in fourth quarter, operating profit for 2013 is expected to be 15 percent higher than last year.*
s.13
0
800
600
400
350
300
250
200
150
100
50
0
200
1 200
1 000
286
EBITDA per quarter EBITDA rolling 12 month
Q3 13Q2 13
283
Q1 13
272
Q4 12
311
Q3 12
244
Q2 12
245
Q1 12
244
Q4 11
211
Q3 11
248
EBITDA rolling 12 monthsEBITDA
* 2012 results reworked due to the implementation of new pension standard, IAS 19R.
NOK million Q3 13 Q3 12 YTD 2013 YTD 2012
Operating revenue 925 839 2 962 2 799
Gross margin 621 550 1 790 1 701
EBITDA 286 244 841 734
Operating profits 164 120 477 361
Investments 142 120 334 292
Markets
• Power sales customers top one million mark – shareholding in Energibolaget iSverige (EBS) raised from 49% to 100% in October.
• Quarter with seasonally low energy demand.
• Increased revenue due to higher wholesale electricity prices.
• Profit after tax of NOK 56 per customer (Q3 12: NOK 48) for thequarter.
• Organic growth at 12,000 new customers in the quarter.
s.14
400
300
200
100
150
120
90
60
30
0 0
500
Q3 13
83
EBITDA per quarter EBITDA rolling 12 month
Q2 13
71
Q1 13
91
Q4 12
54
Q3 12
84
Q2 12
109
Q1 12
143
Q4 11
41
Q3 11
46
EBITDA rolling 12 monthsEBITDA
NOK million Q3 13 Q3 12 YTD 2013 YTD 2012
Operating revenues 1 147 708 4 847 3 799
Gross margin 270 262 818 834
EBITDA 83 84 246 336
Operating profit 73 80 217 323
Sold volume (GWh) 2 893 2 782 12 185 11 289
s.15
Summary of third-quarter 2013 profit
Earnings per share NOK 1,08
633
382
EBITDA Q3 13
Operating expenses
6
Gain/loss financial
items
114
Gross margin
142
EBITDA Q3 12
MNOK
Endring EBITDA Q3 12 til Q3 13 Resultat etter skatt Q3 13
210
633
105
Depreciation
202
EBITDA Q3 13
Profit after tax Q3 13
Tax
116
Financial expenses
Earnings per share
s.16
-3.58 -0.06
Per quarterNOK
2.76
2011 2012 2013
1.05
-2.97
0.72
1.15
-1.01
-1.61
-2.13
1.17 1.08
0.770.91
s.17
Summary
• EBITDA of NOK 633 million (382 million) and net profit of 210 million (-580 million) includes a gain of 90 million from the sale of shares in Infratek.
• The quarter is as normal characterized by high water production, low energy demand and stable income from network operations.
• Underlying profit increase for the operational activities of NOK 143 million due to higher energy prices and regulatory conditions for network operations, despite lower hydropower production compared to last year.
• Improved energy market gave achieved power price of NOK 0.25 per kWh, up NOK 0.10 per kWh from last year.
• Power sales customers top one million mark – shareholding in Energibolaget i Sverige (EBS) raised from 49% to 100% in October.
• Efficient and stable operations combined with organic growth makes it reasonable to consider structural growth within core operations.
• Market prices listed 30 September for the fourth quarter of 2013 at NOK 0.34/kWh and NOK 0.31/kWh for the year 2014.
Agenda
1) Third quarter 2013 – Finn Bjørn Ruyter, CEO
2) Hafslund Heat – Finn Bjørn Ruyter, CEO
Third-quarter 2013 presentation to analysts
Theme: Presentation of Heat
Hafslund Heat
District heating produced and distributed in 2012:• Energy: 1,7 TWh• Renewable share: 93,6 %
Covers ~25% of Oslo’s total heating needs
District heating grid in Oslo
The district heating network in Oslo is the focus for the presentation of Hafslund Heat
Production facility Installed effect [MW]
Haraldrud (inkl. EGE) 259
Klemetsrud (inkl. EGE) 136
Vika 158
Hoff 145
Rodeløkka 100
Holmlia 59
Ullevål 58
Skøyen 42
Hasle 25
Haven 24
Økern 23
Tokerud 12
Lodalen 6
Sum Oslo 1 047
Gardermoen 46
Bio-El Fredrikstad 25
Sarpsborg Avfallsenergi 32
Utbygget nett
Konsesjonsområde
District heating in Oslo: Comprehensive system to exploit resources that would otherwise go to waste
12
384 km
1 200
700
2 500
1047 MW capacity => 384 km pipes => 4400 customers (1,7 TWh heat)
Energy from waste830 GWh
District heating – eco-friendly, simple, compactand reliable
95% renewable
Heat exchanger
s.23
Heat-pump
Heat-pumpDistrict heating
«Delivered energy» A B/C
«Net energy» A A
Energy labeling scheme
District heating - flexible energy supply
Electricity
Heat pumps
Wood pellets
Bio oil
Oil
Natural gas
Waste
Industrial waste
District heating water
Customer centralHeat
Hot water
• 12 heating plants• A total of 50 boilers• Installed capacity: 1047 MW• 8 different types of fuel
• 300 km primary network• 84 km secondary network• 30 million liters of water
• 700 apartment buildings• 1200 commercial buildings• 2500 townhouses and
villas
District heating in Oslo – value chain
Highest cost:Fuel cost of heating district heating
water
Procurement offuel and electricity
Utilizing fuel andpower to heat thedistrict heatingwater
• Sales and Measurement• Customer Care• Billing
Pump district heatingwater to customers.Transferring heat fromour water to the customer
Production of heat
Distribution of heat
Satisfiedcustomersand heat
s.25
District heating – never more expensive thanelectricity
Norwegian Energy Act § 5-5 governs accepted price for the supply of district heating
0,00
0,10
0,20
0,30
0,40
0,50
0,60
0,70
NOK/kWh
Grid rentElectric chargePower price, NO1Electricity certificatesMean mark-up from the power supplier
"The price of district heating shall not exceed the price for the electric supply in that area"§5-5
2012 2013
s.26
The graph illustrates the price cap for residential customers. Prices for industrial customers are regulated by the same model, but pricing depends on the individual customer's network tariff and power output.
Production capacity for district heating in Oslo
Usage per year [Hours/year]
900
600
300
0
Installedcapacity[MW]
1050
+2°C
-10°C
Price dependantuse
Waste 161 MW
Heat pumps 30 MW
Electric Power 246 MW
Bio oil 220 MW
Wood pellets 56 MW
LNG 100 MW
Oil 229 MW
Fuel mix depending on heat demand and prices of energy carriers
District heating in Oslo - strategy further development
Still significant heating potential in Oslo
From growth to consolidation and increased profitability
Optimal operation and utilization of production capacity
Densification of customers along the developed infrastructure - capitalize on historically high investments
Utbygget nett
Konsesjonsområde
s.28
Hafslund's concession area and district heating networks in Oslo
Regulatory framework is important
In summary:
Continuous improvement - optimal operations
Growth potential given good framework conditions
Warm and satisfied customers
Densification of customers along the developed infrastructure
Appendix
Nordic spot and forward prices
s.31
NOK 0.31 per kWh *
* Period average 2014 – 2018 is based on the average of forward prices for SYS per 30.09.2013.
Source: www.nordpoolspot.com og www.nasdaqomxcommodities.com
0.05
0.10
20102008200620042002200019981996
0.25
0.30
0.35
0.40
0.45
0.00
2018201620142012
0.15
0.20
NOK/kWh
Period averageNordic power prices - system
Group profit and loss account
s.32
NOK million Q3 13 Q3 12 ∆∆∆∆ YTD 2013 YTD 2012
Operating revenue 2 380 1 854 526 9 197 7 874
Cost of energy (1 253) (869) (384) (5 659) (4 640)
Gross margin 1 127 985 142 3 538 3 234
Gain/loss financial items 119 4 114 111 87
Operating expenses (613) (607) (6) (1 809) (1 808)
EBITDA 633 382 251 1 840 1 513
Depreciation and write-downs (202) (650) 448 (595) (1 031)
Operating profit 431 (268) 699 1 245 483
Interest expences (134) (132) (2) (378) (392)
Market value change loan portfolio 29 (102) 131 8 (60)
Financial expenses (105) (234) 129 (370) (452)
Pre-tax profit 326 (502) 828 875 31
Tax (116) (78) (38) (336) (247)
Profit after tax 210 (580) 790 539 (216)
Earnings per share (EPS) in NOK 1.08 (2.97) 4.05 2.76 (1.11)
Group balance sheet
s.33
NOK million 2013-09-30 2013-06-30 ∆ ∆ ∆ ∆ Q2 13 2012-12-31
Intangible assets 2 490 2 478 12 2 432
Fixed assets 18 263 18 281 (18) 18 365
Financial assets 233 589 (356) 657
Accounts receivables and inventory 2 544 2 179 366 2 871
Cash and cash equivalents 467 1 067 (600) 223
Assets 23 996 24 593 (596) 24 549
Equity (incl. min. int.) 7 335 7 163 172 7 289
Allocation for liabilities 3 448 3 440 9 3 317
Long-term debt 8 657 8 603 54 8 422
Other current liabilities 2 289 3 179 (890) 3 119
Short-term debt 2 267 2 208 59 2 402
Equity and liabilities 23 996 24 593 (596) 24 549
Net interest-bearing debt 9 804 10 020 (217) 10 648
Equity ratio 31 % 29 % 1 % 30 %
Group cash flow statement
s.34
NOK million Q3 13 Q3 12 ∆∆∆∆ YTD 13
EBITDA 633 382 251 1 840
Paid interests (84) (73) (11) (374)
Paid tax 0 (103) 103 (253)
Marketvalue changes and other liquidity adjustments (98) 11 (109) (17)
Change in working capital, etc. (436) 301 (737) 243
Total cash flow from operations 15 518 (503) 1 439
Net operations and expansion investments (180) (297) 117 (490)
Sold operations etc. 373 (2) 375 368
Cash flow from investments activities 193 (299) 492 (122)
Cash flow to down payments and interests 208 219 (11) 1 317
Capital employed and return on capital employed
s.35
Heat
0%
Other
44%Network
10%
Markets
26%
Production21%
Distribution of capital employed
As of 30 September 2013 a total of NOK 20.5 billion
Return on capital employed
* 2011 – includes value reduction in REC of NOK -1 090 million. ** 2012– includes write-downs and provisions regarding BioWood Norway and Bio-El Fredrikstad of NOK -548 million. *** 2013 – return on capital employed, most recent 12 months. Includes the sale of shares in Infratek with a profit of NOK 90 million.
2013 ***
8.2%
1.5%
2011*
4.6%
2012 **
Loans – portfolio data
s.36
Debt maturity profileNOK million
Loans at maturity, next 12 monthsNOK million
3 000
2 000
1 000
0
1 641
2013
987
2024
293
2023
300
1 350
2016
860
2017
1 359
2018
730
2019
300
2020
319
2021
400
20222015
2 086
2014
Andre lånObligasjonslånSerfikat lån
600
400
200
0
145
JulNov Jun SepAugMay
40
Apr
300
MarFeb
519
Jan
382
Dec
408
Oct
434
Andre lånObligasjonslånSerfikat lån
Portfolio data
Q3 13 Q2 13 ∆∆∆∆
Bonds 64 % 62 % 2 %
Commercial paper 4 % 7 % -3 %
Other loans 32 % 31 % 1 %
NOK million Q3 13 Q2 13 ∆∆∆∆
Nominal value - market value of loans (265) (294) 29
Market value interest rate and fx derivatives (16) (24) 7
Average interest incl. derivatives (%) 4.0 % 4.0 % 0.0 %
Proportion of loan portfolio with fixed
interest (%)53 % 53 % 0 %
Loans at maturity next quarter 987 581 406
Unused drawdown facilities 3 700 3 700 0
Key figures
s.37
Group YTD 13 YTD 12
Capital matters
Total assets 23 996 23 962
Captial employed 20 536 19 209
Equity 7 335 6 599
Market capitalization 9 111 9 305
Equity ratio 31 % 28 %
Net interest-bearing debt 9 804 9 579
Profitability
EBITDA 1 840 1 513
Earnings per share (EPS) 2.76 (1.11)
Cash flow per share 7.37 4.59
Power Generation YTD 13 YTD 12
Capital employed 4 393 4 496
Sales price (NOK/kWh) 0.27 0.20
Production volume (GWh) 2 170 2 413
Heat YTD 13 YTD 12
Capital employed 5 317 5 291
Sales price District heating (NOK/kWh) 0.63 0.57
Sales price Industrial energy (NOK/kWh) 0.26 0.27
Gross margin (NOK/kWh) 0.30 0.32
Sales volume (GWh) 1 454 1 294
Network YTD 13 YTD 12
Capital employed 8 977 8 222
Regulated gross margin for the year 2 402 1 926
Excess/(under) income ytd (164) 35
NVE-capital (regulatory) 6 061 6 017
Markets YTD 13 YTD 12
Capital employed 1 959 1 303
- of this working capital 419 1
Volume power sales (GWh) 12 185 11 289
Shareholders as of 30 September 2013
s.38
# ShareholderClass A
shares held
Class B
share heldTotal Ownership
Share of
voting
rights
1 City of Oslo 67 525 37 343 104 868 53,7 % 58,5 %
2 Fortum Forvaltning AS 37 853 28 706 66 559 34,1 % 32,8 %
3 Østfold Energi AS 5 201 4 5 205 2,7 % 4,5 %
4 Odin 3 802 3 802 1,9 % 0,0 %
5 MP Pensjon PK 5 1 579 1 584 0,8 % 0,0 %
6 Folketrygdfondet 85 885 970 0,5 % 0,1 %
7 Danske Invest 588 588 0,3 % 0,0 %
8 AS Herdebred 107 321 428 0,2 % 0,1 %
9 Hafslund ASA 397 397 0,2 % 0,0 %
10 New Alternatives Fund, Inc 328 328 0,2 % 0,3 %
Total, 10 largest shareholders 111 104 73 625 184 729 94,6 % 96,3 %
Other shareholders 4 324 6 133 10 457 5,4 % 3,7 %
Total 115 428 79 758 195 186 100 % 100 %
Definitions
s.39
Name Definition
Group
Capital employed Equity + Net Interest-bearing debt + Net tax positions
Equity ratio (in %) (Equity incl. Minority interests / Total assets) X 100
Earnings per share Profit after tax / Average no. of shares outstanding
Cash flow per share Net cash from operations / Average no. of shares
Return on equity last 12 monthsResult after tax last 12 months / Average equity (incl. Minority
interests) last 12 months
Return on capital employed last 12 monthsOperating profit last 12 months / Average capital employed last
12 months
Hedge ratio Hydro powerRatio of the estimated production portfolio hedged in the period
(excluding fixed-price contracts)
Hedge ratio District heatingRatio of the estimated net power price exposure hedged, by: Sales
reduced with electricity use and 1/3 heat pumps
Investor information
• Additional information is available from Hafslund’s website:
– www.hafslund.no
– You can subscribe to Hafslund press releases
• Group CFO, Heidi Ulmo
– Tel: + 47 909 19 325
• Financial Director and Investor Relations contact, Morten J. Hansen
– Tel: +47 908 28 577
s.40
www.hafslund.no
