enel ogk-5 investor presentation · 2009. 11. 11. · enel ogk 5 investor relations october 2009...
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Enel OGK-5 Investor Presentation
October 2009
October 2009 ENEL OGK-5 Investor Presentation
Enel OGK 5Investor Relations
Enel OGK-5 Investor PresentationContents
ENEL OGK-5 Factsheet
Enel: A Global Dimension
Enel: Presence in Russia
Well-Balanced Position in Fast Growing Markets
2009 First-Half Results:
Financial Highlights
Power Generation and Sales
Unit Margin
EBITDA
Headcount Reduction Plan
Net Debt and Liquidity Evolution
Strategic Mid-Term Guidelines
Key Levers and Target Areas of Value Creation
New Investments
Installed Capacity Evolution
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October 2009 ENEL OGK-5 Investor Presentation
Enel OGK 5Investor Relations
ENEL OGK-5 Factsheet
Overview
ENEL OGK-5 is an independent Russian wholesale power generation company with annual revenues exceeding $1.3 billion
ENEL OGK-5 owns 4 thermal power plants serving Moscow, Ural and South regions, with current installed capacity of 8.7GW
ENEL OGK-5 was the first power company spun off during RAO UES reorganization
Enel, Italy’s leading utility company owns 55.9% equity stakeShares listed on RTS and MICEX since 2006, 7.3 free float
Moody’s credit rating Ba3 InternationalAa3 NationalStable outlook
S&P’s governance rating 6.0 GAMMA
ENEL OGK-5 enjoys a stable credit rating and the best corporate governance score in Russian
power industry
Ownership Capitalisation: Jan – Aug 09 ($m)
Ratings
0
200
400
600
800
1000
1200
1400
1600
1800
Jan09 Feb09 Mar09 Apr09 May09 Jun09 Jul09 Aug09
Market Cap, $m
ENEL OGK-5
OGK AVG
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October 2009 ENEL OGK-5 Investor Presentation
Enel OGK 5Investor Relations
5.7 GW22.5 TWh
0.7 GW1.9 TWh
North America
0.6 GW2.5 TWh
Central America
5.4 GW21.7 TWh6.5 TWh
Chile
1.6 GW8.8 TWh5.2 TWh
Peru
2.9 GW12.9 TWh7.3 TWh
Colombia
1.1 GW3.9 TWh14.5 TWh
Brazil
4.5 GW14.4 TWh13.4 TWh
Argentina
8.2 GW40.7 TWh17.4 TWh
Russia
Slovakia
40.3 GW96.3 TWh137.2 TWh
Italy
1.0 TWh
France
22.5 GW85.5 TWh109 TWh
Iberia1
0.6 GW3.7 TWh
Bulgaria
9.9 TWh
Romania
Greece
0.1 GW0.2 TWh
1.Including: 100% Endesa net of the assets to be transferred to Acciona, full year OGK-5 and E. Muntenia Sud production and sales.
Excluding January - June 08 production and sales of Viesgo.
2008 Installed capacity (GW)2008 Net production (TWh)2008 Tot sales to final customers (TWh)Enel: A Global Dimension1
An international integrated energy player
0.1 GW0.9 TWh
Morocco1
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October 2009 ENEL OGK-5 Investor Presentation
Enel OGK 5Investor Relations
Enel: Presence in RussiaFirst Vertical Integration Built in Russian Energy Sector
Integration allows hedging the risks on huge liberalised market,primarily hedging gas supply risks for ENEL OGK-5
SupplyPower generationUpstream gas
20% of SeverEnergiya
(50% - Gazprom, 30% - ENI)
55.9% of ENEL OGK5 49.5% of RusEnergoSbyt
• Largest independent retail power company in Russia
• Over 35 TWh sold in 2008
• Strong regional reach with 25 offices and 7 branches
• RES is main supplier to Russian Railways (15 year long-term power supply contract).
o
• Gas fields in the north of Western Siberia
• Covering up to 50% of needs of OGK-5’s gas-fired plants
Integration characteristics:• Operating companies must build their own competencies while guided by Enel expertise• Strategic target: to grow margins over long term and develop a balanced generation mix
Core asset of Enel’svertical chain in Russia
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October 2009 ENEL OGK-5 Investor Presentation
Enel OGK 5Investor Relations
Well Balanced Position in Fast-Growing Markets
0.6%
12.4%
12.3%
8.0%
1.4%
8.6%
EBITDA margin (2008)
72
225
233
70
112
133
EV/IC, $/kW
(18/09/09)
None
Moody’s Aa3.ru1
None
None
None
Moody’s Aa3.ru1
Credit Rating
0.03
0.61
0.54
0.37
0.07
0.45
EBITDA/MW, m RR/MW
(2008)
0.2
5.3
4.7
3.1
0.6
4.3
EBITDA, b RR
(2008)Positioning
9,052
8,732
8,630
8,497
8,695
9,531
Installed Capacity (IC),
MW
49%
57%
75%
46%
65%
56%
Utilization factor (2008)
Fuel Mix
None
OGK-2
None
OGK-1
None
OGK-3
None
OGK-6
S&P GAMMA-6.04
ENEL OGK-5
S&P CGS 42/4.43
OGK-4
Corp. Governance
Rating
Gas
Coal
Gas Coal
Gas
Coal
CoalGas
CoalGas
Gas
Coal
1 National scale2 International scale
3 National scale4 Corresponds to the CGS of 6/6.0
Strong Platform for securing a leading role in a huge liberalizing marketTop corporate credit rating and governance practices in the power sector
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Enel OGK 5Investor Relations
October 2009 ENEL OGK-5 Investor Presentation
Financial Highlights1
Solid performance and financial flexibility in a challenging business environment
1 Unaudited financial results under IFRS2 According to the current fixed assets evaluation methodology (fair value model)3 Net Debt as of 31 December 20084 Net Debt at the end of the period divided by 12 months rolling EBIDTA
Unit 1H 2008 1H 2009 Chg
Revenues
EBITDAEBITDA margin
Net Income2
Net Debt
EBITDA/Net Financial Expenses
Net Debt/EBITDA4
Net Debt/Equity
M RUR
M RUR
M RUR
M RUR
n.
n.
n.
%
20 216
2 373
767
6 1093
17
1.2
0.07
19 213
3 728
1 726
11 522
14
1.7
0.18
-5%
+57%
+125%
+89%
12 19
2009 First-Half Results
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Enel OGK 5Investor Relations
October 2009 ENEL OGK-5 Investor Presentation
Power Generation and Sales
Trend in power generation and sales influenced by the drop in energy consumption and non-recurring stack maintenance at Reftinskaya
Significant improvement of plant availability on a recurring basis due to a more effective maintenance policy
Net Output (TWh)
1H08 1H09
21.017.3
47% 49%
53%51%
Power Sales (TWh)
1H08 1H09
24.419.7
66% 69%
34%31%
84%
1H08
87%
1H09
Plant availability1
2.8%
1H08
2.0%
1H09
Unplanned outage ratio
Gas
Coal
Regulated
Not regulated
1 Without considering the effects of non-recurring stop for stack maintenance at Reftinskaya (4x500 MW units) in 1H2009 and recovery of Unit 10 at Reftinskaya GRES in 1H08 after the fire accident in December 2006
2009 First-Half Results
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Enel OGK 5Investor Relations
October 2009 ENEL OGK-5 Investor Presentation
Unit Margin on Sales (RUR/MWh)1
Unit Price
1H08 1H09
5885
Unit Margin on Sales
1. Excluding capacity payment
+46%1H08 1H09
581 609
+5%
Unit Cost of Sales2
1H08 1H09
523 524
-
Considerable unit margin growth due to the increase of power tariff outpacing average fuel cost growth
2. Including energy purchases
2009 First-Half Results
9
Enel OGK 5Investor Relations
October 2009 ENEL OGK-5 Investor Presentation
EBITDA evolution (m RUR)
EBITDA growth driven by increase in generation margin and cost reduction notwithstanding inflation dynamics (11.9%)
+1349+409
-81
3728
2373Increase of generation
margin
Other items
1H2008 1H2009
Manageable costs1
+57%
-322
Not manageable costs
1 Including non-recurring restructuring costs of 308 million RUR recognized in 1H2008
2009 First-Half Results
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Enel OGK 5Investor Relations
October 2009 ENEL OGK-5 Investor Presentation
Headcount Restructuring Plan
Restructuring Plan Highlights
Goals• Align the HC/MW ratio to the best
international standards • Change the quality mix and decrease
the average age of employees
Actions• Optimization of processes and
organizational structure (lean methodology approach)
• Centralization of staff functions• Development of multi-skill
competencies • Adoption of a new ERP platform
(SAP/R3) • Decommissioning of old units.
1H008 1H2009
42723984
-104 -115 -69
Technical staff
O&M staff Administrative staff
Headcount Restructuring Plan
Successful implementation of the downsizing plan: − Headcount/MW ratio reduced down to 0.46− Lowest headcount/MW ratio in the sector
-288 units
2009 First-Half Results
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Enel OGK 5Investor Relations
October 2009 ENEL OGK-5 Investor Presentation
Net Debt and Liquidity Evolution (1)
Fixed/Hedged
Variable
Fixed + Hedged on Total Debt
31 Dec 08 30 Jun 09
6109
11522
-3796
+7572
+1371
Cash flow from operations
CAPEX
Non-current assets
Net financial charges
+266
+89%
31Dec08 30Jun09
80%
20%
73%
Average Cost of Debt
7.5%
1H08
10.4%
1H09
RUR
EUR n.a. 6.0%
Net Debt (m RUR)
27%
2009 First-Half Results
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Enel OGK 5Investor Relations
October 2009 ENEL OGK-5 Investor Presentation
Available credit facilities (B RUR)
28.2
10.4
100%
60%
40%
Utilized amount (%)
65%
40%
+171%
31Dec08 30Jun09 31Dec08 30Jun09
Short-term
Long-term
Net Debt and Liquidity Evolution (2)
Improved debt portfolio in a challenging business environment:- Better balanced debt structure with respect to capital employments- Residual life extended from 10 months to 8 years and 3 months
2009 First-Half Results
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October 2009 ENEL OGK-5 Investor Presentation
Enel OGK 5Investor Relations
Strategic Mid-Term Guidelines
• Maintain a leading role in the russian power generation market • Maintain a leading role in the russian power generation market
• Take full advantage of market liberalization process • Take full advantage of market liberalization process
• Extract 100% efficiency from the current asset portfolio • Extract 100% efficiency from the current asset portfolio
• Financial discipline in compliance with requirements of
credit rating (Ba3/Aa3.ru) and financial covenants with lenders
• Financial discipline in compliance with requirements of
credit rating (Ba3/Aa3.ru) and financial covenants with lenders
• Control investment risk profile under the current regulatory scenario • Control investment risk profile under the current regulatory scenario
• Take advantage from Enel’s vertically integrated presence in Russia • Take advantage from Enel’s vertically integrated presence in Russia
• Ensure satisfactory cash return to shareholders • Ensure satisfactory cash return to shareholders
Solid strategy to maximize shareholder value in unsteady times
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October 2009 ENEL OGK-5 Investor Presentation
Enel OGK 5Investor Relations
Key Levers and Target Areas of Value Creation
Regulatory Management
Energy Management
Plant Availability
and Efficiency
Cost Optimization
Tailored actions focused on improvement of operating performance and organic growth
Investmentprogram
• Shinking of frequency and duration of general overhauls• Optimization of planned outages throug predictive maintenance• Redesign of maintenance activities management• Heat rate optimization trough equipment modernization and launch of new CCGT
• Shinking of frequency and duration of general overhauls• Optimization of planned outages throug predictive maintenance• Redesign of maintenance activities management• Heat rate optimization trough equipment modernization and launch of new CCGT
• Proactive and consistent positioning on regulatory priorities (energy market liberalization, capacitymarket rules, regulated tariffs)• Cooperation and dialogue with regulatory bodies based on Enel Group’s experience in liberalizedmarkets
• Proactive and consistent positioning on regulatory priorities (energy market liberalization, capacitymarket rules, regulated tariffs)• Cooperation and dialogue with regulatory bodies based on Enel Group’s experience in liberalizedmarkets
• Focus on bidding strategy improvement and production optimization • Diversification of fuel sources and logistics• Taking advantage of Enel’s vertical chain in Russia (upstream gas and power retail)• Free bilateral contract portfolio development to mitigate price volatility in DAM Market
• Focus on bidding strategy improvement and production optimization • Diversification of fuel sources and logistics• Taking advantage of Enel’s vertical chain in Russia (upstream gas and power retail)• Free bilateral contract portfolio development to mitigate price volatility in DAM Market
• On time commissioning of new CCGT units in compliance to capacity contract requirements• Dry Ash removal system to ensure continuity and increase availability of Reftinskaya power station• Only necessary replacement (life ended critical equipment) to preserve existing capacity and improve performance• Environmental action plan according to best available techniques
• On time commissioning of new CCGT units in compliance to capacity contract requirements• Dry Ash removal system to ensure continuity and increase availability of Reftinskaya power station• Only necessary replacement (life ended critical equipment) to preserve existing capacity and improve performance• Environmental action plan according to best available techniques
• Procurement optimization (design to cost,, supplier diversification) • Reorganization of core and infrastructural process supported by the new ERP platform (SAP/R3)• Headcount downsizing plan and centralization of staff functions• Participation to ENEL GROUP ZENIT program
• Procurement optimization (design to cost,, supplier diversification) • Reorganization of core and infrastructural process supported by the new ERP platform (SAP/R3)• Headcount downsizing plan and centralization of staff functions• Participation to ENEL GROUP ZENIT program
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October 2009 ENEL OGK-5 Investor Presentation
Enel OGK 5Investor Relations
MODERNISATION & ENVIRONMENT
DRY ASH REMOVAL SYSTEM AT REFTINSKAYA GRES
Capacity: 410MWFuel: gasCommissioning: 2010
New Investments
NEW COMBINED CYCLE UNIT AT SREDNEURALSKAYA GRES
NEW COMBINED CYCLE UNIT AT NEVINNOMYSSKAYA GRES
Availability increaseStrong contribution to
improving environmentOpportunities to sell dry
ash to construction companies
Commissioning: 2011
Longer life, better availability and efficiencyReduction of fuel con-sumption and O&M costsEnvironmental compliance with Enel standards and EBRD requirements
Capacity: 410MWFuel: gasCommissioning: 2010
NEW UNITS: Strict control over timing and cost, state-of-the-art technologies, world-famous contractors
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October 2009 ENEL OGK-5 Investor Presentation
Enel OGK 5Investor Relations
56%44%
Installed Capacity Evolution
93408732
Capacity increase through
modernisation
New CCGTs at Sredneuralskaya
and Nevinnomysskaya
power stations
Decommissioning of outdated
facilities
2008 2013
Fuel Mix Evolution
2008
2013
+ 608 MW
Increase in installed capacity of 608 MW (+7%)- CCGT: + 820 MW -Fuel/Gas: -212 MW
In 2013 well balanced and more efficient fuel mix
50%
9%
41%
Coal
Gas
CCGT
Coal
Gas
8732 9340+20
+820
-232
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October 2009 ENEL OGK-5 Investor Presentation
Enel OGK 5Investor Relations
Disclaimer
This presentation contains certain statements that are neither reported financial results nor other historical information (“forward-looking statements”). These forward-looking statements are based on JSC OGK-5 ’s current expectations and projections about future events. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of JSC OGK-5 to control or estimate precisely, including changes in the regulatory environment, future market developments, fluctuations in the price and availability of fuel and other risks. You are cautioned not to place undue reliance on the forward-looking statements contained herein, which are made only as of the date of this presentation. JSC OGK-5 does not undertake any obligation to publicly release any revisions to any forward-looking statements to reflect events or circumstances after the date of this presentation.
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October 2009 ENEL OGK-5 Investor Presentation
Enel OGK 5Investor Relations
Contact us
• Alexey Leonov (Head of IR)
+7 495 380 02 30 ext. 5618
Visit our website at:
www.ogk-5.com (Investor Relations)
Visit our website at:
www.ogk-5.com (Investor Relations)
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