first-quarter 2011 presentation to analysts...first-quarter 2011 presentation to analysts hafslund...
TRANSCRIPT
First-quarter 2011
presentation to analysts
Hafslund ASA
4 May 2011
Christian Berg, CEO
s.2
Highlights ─ first quarter 2011
• EBITDA: NOK 656 million - operating businesses on a par with Q1 2010.
• Power Sales and District Heating: Strong demand in the first quarter of 2011.
• Hydropower production: Low drainage basin influx resulted in 35 percent below-normal hydropower generation in the
quarter.
• Hydropower sales price: NOK 0.474 per kWh, up four percent from Q1 2010.
• Network: Profit level was normal for the quarter.
• High cash flow in the quarter: NOK 2.6 billion, of which NOK 1.5 billion is attributable to capital freed through asset sales.
• Board of Directors recommends an extraordinary dividend of NOK 5.0 per share in addition to an ordinary dividend of
NOK 2.50 per share for the 2010 accounting year.
s.3
EBITDA ─ first quarter 2011
656819121
260
130
134
0
100
200
300
400
500
600
700
MNOK
EBITDAOther ActivitiesVenturePower SalesNetworkDistrict HeatingHydropower
s.4
EBITDA: change from Q1 2010
32
Q1 11
656
Other ActivitiesVenture
1 218
Power Sales
69
NetworkQ1 10
44
Hydropower
22
District Heating
14
-520
MNOK
s.5
Development cash flow from operations
2 7692 806
2 625
2 468
2 218
2 1162 1302 116
2 000
0
500
1 000
1 500
2 000
2 500
3 000
Q4 09
0.27
Q3 09
0.30
Q2 09
0.34
Q1 09
0.31
NOK/kWh
0.1
0.2
0.0
MNOK
+38%
Q1 11
0.39
Q4 10
0.39
Q3 10
0.35
Q2 10
0.32
Q1 10
0.30
0.4
0.3
0.5
• Cash flow from operations up 38 percent over the past two years:
• Increased Powerprices (NOK 280 million)
• Network (NOK 180 million)
• Power sales (NOK 194 million)
• Increased renewable energy production: NOK 50 million.
• EBITDA sensitivity: a NOK 0.10 per kWh change in wholesale power prices results in an approximately NOK 360 million change in EBITDA
EBITDA development12-month rolling EBITDA vs. wholesale power prices
Power prices – rolling 12-month average**EBITDA*
* EBITDA = rolling 12-month EBITDA excluding financial asset value changes (in NOK million).** Power prices for Hafslund Hydropower – rolling 12 month
s.6
Interest-bearing debt: down NOK 2.9 billion in Q1 2011
3
4
5
6
7
8
9
10
11
12
13
14
0
10
20
30
40
50
60
Equity ratio %NOK billion
Q1 11
10.1
37
Q4 10
13.1
35
Q3 10
11.1
35
Q2 10
11.3
33
Q1 10
11.9
34
Equity ratioNet interest-bearing debt
Net interest-bearing debt and equity ratio Change in interest-bearing debt in Q1 11
Amounts in NOK million
Net interest-bearing debt 31.12.2010 -13 067
EBITDA 656
Interest paid -190
Tax paid -98
Change in market value of financial instruments 22
Change in working capital 923
Investments -232
Net loan portfolio adjustments 1 847
Net interest-bearing debt 31.03.2011 -10 139
•s.7
Working capital requirements- seasonal variation
• Seasonal variation in working capital driven by both volume sold and prevailing power prices.
• Working capital normally peaks in Q1 and Q4 due to strong sold volumes.
• Working capital: NOK 1.1 billion, down NOK 1 billion in Q1 2011.
-1 000
0
1 000
2 000
3 000
4 000
0,2
0,3
0,4
0,5
0,6
0,7
sep.09 mar.10des.09mar.09 jun.09 jun.10 sep.10 des.10 mar.11
NOK/kWhNOK mill
0
1 500
3 000
4 500
6 000
Q1 11
5 453
2 162
Q2 09
2 613
Q3 10
GWh
Q4 10Q2 10
2 602
Q1 10
5 2465 001
Q4 09
3 007
4 105
Q3 09Q1 09
4 369
Working capital Average power prices
Working capital and power prices
Power sales - sold volume
s.8
Hydropower
• Profit and operating revenue figuresreflect low power production and power prices somewhat above Q1 2010.
• Production 35 percent below normal for the first quarter.
• Nasdaq OMX (NO1) spot price: NOK 0.531 per kWh (Q1 2010: NOK 0.508 per kWh).
• New FKF 4 generator went online in late April 2011: 100 GWh added to Hydropower’s capacity.
• Projected Q2 2011 generation: approximately 830 GWh; anticipatedvolume is 20 GWh or 13 % belownormal for Q2 2011.
929
719
0
100
200
300
400
0
200
400
600
800
1 000
1 200
Q1 10
178
12 monthsquarter
Q4 09
154
Q3 09 Q4 10
186
Q2 09
252219
Q3 10Q1 09
303
102
Q2 10 Q1 11
240
134
EBITDA rolling 12-monthEBITDA per quarter
NOK million Q1 11 Q1 10 2010 2009
Operating revenue 178 238 1 196 856
EBITDA 134 178 972 661
Operating profit 123 167 929 618
Sales price (NOK/kWh) 0,47 0,46 0,39 0,28
Production volume (GWh) 371 520 3041 3018
Investments 24 40 161 165
s.9
Hydropower production profile
156142
210
286
333 335 342
313 314
214
174
221
0
50
100
150
200
250
300
350
GWh
DecNovOctSepAugJulJunMayAprMar
99
Feb
113
Jan
158
277
Normal20112010
*Normal annual production = 3,000 GWh based on 10-year average of production adjusted for capacity improvements.
s.10
District Heating
• Higher wholesale power prices resulted in Q1 2011 revenue growth compared with Q1 2010.
• Q1 is a seasonally strong quarter; deliveries are roughly 40 percent of normal annual production.
• Production: 19 percent above normal for the quarter due to strong demand.
• Contribution margin per kWh somewhat lower due to higher production costs.
• New delivery contracts signed in Q1 2011: 50 GWh annual energy outtake.
• NOK 50 million invested in new renewable production capacity in Q1 2011.
261
238
- 50
0
50
100
150
200
0
50
100
150
200
250
300
6
Q4 09 Q3 10
58
Q1 09
25
93
140
Q2 10Q3 09 Q1 11Q4 10
32
-11
130
quarter
Q1 10
152
12 months
Q2 09
EBITDA rolling 12-monthEBITDA per quarter
NOK million Q1 11 Q1 10 2010 2009
Operating revenue 511 467 1 144 747
EBITDA 130 152 283 213
Operating profit 101 123 165 91
Gross margin (NOK/kWh) 0,34 0,35 0,34 0,33
Production volume (GWh) 717 720 1 782 1 382
Investments 90 46 432 397
s.11
District Heating — energy sources and unit cost
Ratio Electricity and renewable energy sources rolling 12
Waste and biomasse
Heatpumps
Electricity
Oil and natural gas
Biooil og biodiesel
0
100
200
300
400
500
600
700
800
50
60
70
80
90
%GWh
Q1 11
716
Q4 10
694
Q3 10
134
Q2 10
234
Q1 10
720
• Production costs depend on energy input source and price.
• Proportion of electricity and renewable energy sources up 6 percentage points to 80 percent in last 12 months.
• Use of bio-oil as peak load source in Q1 2011.
• Production costs increased NOK 0.077 per kWh from Q1 2010.
Energy prices (NOK/kWh) Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
Waste & biofuel 0,17 0,18 0,19 0,18 0,20
Heat pumps 0,21 0,15 0,12 0,22 0,21
Biooil and biodiesel 0,77 0,68
Electricity 0,53 0,48 0,58 0,61 0,57
Oil/natural gas 0,46 0,43 0,58 0,53 0,55
Total production cost 0,38 0,26 0,25 0,48 0,46
District Heating incl. Distribution 0,73 0,65 0,66 0,75 0,80
Gross contribution margin 0,35 0,39 0,41 0,27 0,34
s.12
District Heating ─ production profile
280
250
190
116
7345
30 37
67
130
228
336
0
50
100
150
200
250
300
350
GWh
DecNovOctSepAugJulJunMayAprMar
203
Feb
246
Jan
268
Normal*20112010
* Normal = projected 2010 production, given normal temperatures (10-year average) and current and planned customer tie-ins to the grid.
s.13
Nett
• Regulatory income ceiling after grid losses for 2011: NOK 2 013 million, down NOK 274 million from 2010.
• Continuing high delivery quality and positive trend as to service interruptions. Several power outages due to Statnettsubstation problems in Romerike and Østfold regions.
• Profit projection for 2011 on a par with 2010, based on income framework notification from regulatory body NVE, planned maintenance, and anticipated interest rate levels.
• New licensee manpower competence regulations introduced that will affect Hafslund Network’s business model.
• Regulatory decision to mandate the installation of AMS advanced metering systems is expected by July 2011.
1 063
880
0
50
100
150
200
250
300
350
0
200
400
600
800
1 000
1 200
quarter 12 months
Q1 11
260
Q4 10
246
Q3 10
282
Q2 10
275
Q1 10
274
Q4 09
314
Q3 09
243
Q2 09
247
Q1 09
231
EBITDA rolling 12-monthEBITDA per quarter
NOK million Q1 11 Q1 10 2010 2009
Operating revenue 1 318 1 396 4 804 3 385
EBITDA 260 274 1 077 1 035
Operating profit 131 137 532 493
Investments 62 56 485 521
s.14
Power Sales
• Revenue figure reflects increased prices for wholesale (spot) power contracts traded via Nasdaq OMX and increased power sales volume.
• Customer-base growth: 220 000 more customers compared with Q1 2010.
• Satisfactory profit performance in a seasonally strong quarter.
• Power Sales had Q1 2011 after-tax profit of NOK 100 per customer.
• Working capital: NOK 1.8 billion, down NOK 0.3 billion in Q1 2011.
429
0
50
100
150
200
0
100
200
300
400
500
Q2 10
187
Q1 11
quarter 12 months
121
Q4 10
86
Q3 10
34
Q1 10
52
Q4 09
51
Q3 09
22
Q2 09
45
Q1 09
235
130
EBITDA rolling 12-monthEBITDA per quarter
NOK million Q1 11 Q1 10 2010 2009
Operating revenues 3 043 2 621 8 021 4 787
EBITDA 121 52 360 248
Operating profit 117 49 348 240
Sold volume (GWh) 5 354 5 001 15 867 13 238
s.15
Heat and Bioenergy
Heat (energy recovery facilities):
• Energy production up 25 percent from Q1 2010.
• Formal take-over of Borregaard facility in Q1 2011.
• Operating profit: NOK 14 million (Q1 2010: NOK 0 million); the figure includes a NOK 9 million positive non-recurring item.
Bioenergy (wood pellets production):
• Process improvements for eliminating rock debris and better raw material milling.
• Pilot operation and production start-up expected in second half of 2011.
NOK million Q1 11 Q1 10 2010 2009
Operating revenue 46 29 115 49
EBITDA 10 5 (51) (11)
Operating profit 1 (3) (386) (27)
Energy production (GWh) 75 60 246 93
Sales price (NOK/kWh) 0,27 0,24
Used waste (thousand tonns) 36 27 114 57
Investments 7 65 189 342
s.16
Venture
• Sale of Fesil shares at NOK 374 million, yielded NOK 5 million gain.
• Capital employed, excluding REC: NOK 744 million.
• REC investment: 89.0 million shares or 8.93 percent of stock – market value: NOK 1.7 billion (at NOK 19.41 per share).
27%
7%
Renewable energi
10%
AMS (metering system)
Energy efficiency and other investments
Telecom 56%
Capital employed:
NOK million Q1 11 Q1 10 2010 2009
Operating revenue 113 130 549 779
EBITDA 19 (1 199) (914) (198)
Operating profit 9 (1 219) (1 104) (299)
s.17
Group profit and loss account
NOK million Q1 11 Q1 10 ���� 2010
Operating revenue 5 206 4 895 311 15 829
Gain/loss financial items (7) (1 219) 1 212 (883)
Operating expenses (4 543) (4 196) (347) (13 023)
EBITDA 656 (520) 1 176 1 923
Depreciation (201) (213) 12 (1 270)
Operating profit 455 (733) 1 188 653
Interest expences (121) (104) (17) (498)
Market value change loan portfolio 25 (1) 27 27
Financial expenses (96) (105) 9 (471)
Pre-tax profit 359 (839) 1 198 182
Tax (130) (133) 2 (574)
Profit after tax 228 (972) 1 200 (392)
Earnings per share (EPS) in NOK 1.17 (4.98) 6.15 (2.01)
s.18
Group balance sheet
NOK million 31.03.2011 31.12.2010 ≅≅≅≅ 31.03.2010
Intangible assets 2 388 2 389 (1) 2 299
Fixed assets 18 580 18 557 22 18 880
Financial assets 2 674 2 831 (156) 3 481
Accounts receivables and inventory 4 311 5 625 (1 314) 3 996
Cash and cash equivalents 1 456 211 1 244 828
Assets 29 408 29 613 (204) 29 484
Equity (incl. Min. int.) 10 849 10 464 386 10 126
Allocation for liabilities 3 103 3 046 57 3 362
Long-therm debt 10 346 11 321 (975) 10 908
Other currently liabilities 1 903 2 338 (434) 2 413
Short-term debt 3 208 2 444 763 2 675
Equity and liabilities 29 408 29 613 (204) 29 484
Net interest-bearing debt 10 139 13 067 (2 929) 11 873
Equity ratio 37 % 35 % 2 % 34 %
We deliver tomorrow's energy and infrastructure solutions
Additional analytic information
s.21
Earnings per share (excluding REC)
1.71 8.12 1.17
2009 2010 2011
1.17
5.02
0.76
1.00
1.34
0.22
-0.38
0.86
1.01
By quarterNOK
s.22
Group cash flow statement
NOK million Q1 11 Q1 10 ¬¬¬¬ 2010
EBITDA 656 (520) 1 176 1 923
Paid intrests (190) (189) (1) (536)
Paid tax (98) 14 (112) (148)
Marketvalue changes and other liquidity adjustments 22 1 228 (1 206) 982
Change in working capital, etc. 923 (533) 1 456 (1 656)
Total cash flow from operations 1 313 - 1 313 565
Net operations and expansion investments (232) (258) 26 (1 647)
Sold operations - - - 5
Portfolio changes Venture, etc. 1 540 (6) 1 546 335
Cash flow from investments activities 1 308 (264) 1 572 (1 306)
Cash flow to down payments and interests 2 621 (264) 2 885 (741)
s.23
Capital employed and return on capital employed
2011**
9.4%
2010
11.5%
9.0 %*
2.5 %
2009
6.0%
38%19%
4%
Market
12%
Network
District Heating
Heat and Bioenergy
Venture2%
Hydropower
18%
REC
7%
Capital employed Return on capital employed (ROCE) excluding REC
* 12-month return on capital employed (ROCE) excluding sale of Fibernett and the BioWood Norway write-down.
* * Rolling 12-month return on capital employed (ROCE)
s.24
Capital structure development
0
2
4
6
8
10
12
14
0
10
20
30
40
NOK billion Equity ratio %
Q1 11
37.0
10.1
Q4 10
35.0
13.1
Q3 10
35.0
11.1
Q2 10
33.1
11.3
Q1 10
34.3
11.9
Q4 09
38.1
11.6
Q3 09
40.0
11.2
Q2 09
40.0
10.7
Q1 09
40.0
10.5
Equity ratio Net interest-bearing debt
s.25
Loans — portfolio data
700800
0
1 000
2 000
2021
319
202020192018
1 059
2017
860
20162015
1 909
2014
1 909
2013
1 815
2012
1 056
2011
1 693
Other loansBondsCertificate loans
50 0
400
800
300
MarFebJanDesNovOktSepAugJul
384
JunMaiApr
644
211
327
77
256
345
Other loansBondsCertificate loans
Debt maturity profileNOK million
Loans at maturity, next 12 monthsNOK million
Portfolio data
Q1 11 Q4 10
Bonds 47 % 40 % 7 %
Certificate loans 8 % 12 % -4 %
Other loans 45 % 48 % -3 %
Q1 11 Q4 10
Nominal value - market value
of loans-110 -135 25
Market value interest rate swaps
-11 -17 6
Average interest incl. derivatives
4,2 % 4,0 % 0,2 %
Proportion of loan portfolio with fixed interest
37 % 33 % 4 %
Loans at maturity next quarter (NOK million)
1 289 1 593 -304
Unused drawing facilities (NOK
million)4 677 3 692 985
s.26
Power and CO2 price development
EUR/MWh
EUR/tCO2
0
15
30
45
60
75
90
105
120
135
mar.09 jun.09 sep.09 mai.10des.09 aug.10 nov.10mar.10 jan.11 apr.11
EUR
CO2 2011 Nordic spotmarketFWD 2014 FWD 2012
Source: www.nasdaqomxcommodities.com (as of 01 April 2011)
s.27
Hydropower — Glomma waterway flow
• Q1 2011 production: 35% below normal for the reporting period. • Maximum capacity utilization: 930 m³/second.• Projected 2Q 2011 production: about 930 GWh (approx. 20 GWh below normal for the reporting period)
provided normal reservoir levels and precipitation.
0
500
1 000
1 500
2 000
decnov
m3/sek.
octsepaugjuljunmayaprmarfebjan
Max. capacity utilization20102011
s.28
Other Activities
NOK million Q1 11 Q1 10 2010 2009
Support (40) (31) (129) (152)
Power trading (18) (3) 29 (10)
Real estate 2 5 24 (0)
Billing and customer service 19 24 95 101
Financial derivatives, ass. comp. 9 17 102 191
Other 0 0 49 (53)
Operating profit other (28) 12 170 77
s.29
Shareholders as of 31 Mars 2011
Note: Shareholdings in thousand shares.
# ShareholderClass A shares
held
Class B shares
heldTotal Ownership
Share of
voting rights
Shareholding in thousands
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 Norden 2 452 2 452 1.3 % 0.0 %
5 MP Pensjon PK 1 579 1 579 0.8 % 0.0 %
6 Odin Norge 1 222 1 222 0.6 % 0.0 %
7 Hafslund ASA 451 451 0.2 % 0.0 %
8 Folketrygdfonet 419 419 0.2 % 0.0 %
9 AS Herdebred 107 271 378 0.2 % 0.1 %
10 Bank of New York 328 - 328 0.2 % 0.3 %
Total, 10 largest shareholders 111 014 72 447 183 461 94.0 % 96.2 %
Other shareholders 4 414 7 311 11 725 6.0 % 3.8 %
Total 115 428 79 758 195 186 100 % 100 %
s.30
Key figures
Network YTD 2011 YTD 2010
Capital employed 9 250 9 275
Annual Income ceiling 2 567 2 891
NVE-capital (regulatory) 6 130 6 178
Power Sales YTD 2011 YTD 2010
Capital employed 3 033 3 100
- of this working capital 1 779 2 010
Total volume (GWh) 5 453 5 001
Group YTD 2011 YTD 2010
Capital matters
Total assets 29 408 29 484
Captial employed 24 488 25 257
Equity 10 849 10 126
Market capitalization 14 581 13 428
Equity ratio 37 % 34 %
Net interest-bearing debt 10 139 11 873
Profitability excl. REC
Profit after tax 228 (972)
Earnings per share (EPS) 1.17 (4.98)
Cash flow per share 6.73 (0.00)
Venture YTD 2011 YTD 2010
Capital employed exl REC 744 1 557Market value REC 1 728 2 132
Power Generation YTD 2011 YTD 2010
Capital employed 4 398 4 346
Sales price (NOK/kWh) 0,47 0,46
Production volume (GWh) 371 520
District Heating YTD 2011 YTD 2010
Capital employed 4 649 4 201
Sales price (NOK/kWh) 0,80 0,73
Gross margin (NOK/kWh) 0,34 0,35
Sales volume (GWh) 717 720
Definitions
Items 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 Result after tax / Average equity (incl. Minority interests)
Return on capital employed Operating profit / (Average equity + Net interest-bearing debt + Net tax positions)
Power generation
Mean production Average power generation over the past 10 years.
Investor information
• Additional information is available from Hafslund’s website:– www.hafslund.no
– You can subscribe to Hafslund press releases
• Group SVP & CFO, Finn Bjørn Ruyter
– tel: +47 911 38 199
• SVP Communications and Corporate Social Responsibility, Karen Onsager
– tel: +47 920 87 007
• Financial Director and Investor Relations contact, Morten J. Hansen
– tel: +47 908 28 577
www.hafslund.no
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