grupo energía de bogotá · july 6 th 2015. ordinary dividend: cop ~24.43 per share, approved in...
TRANSCRIPT
Grupo Energía de
Bogotá
First Half 2016 Key Results
and Developments
August 18th 2016
2
DISCLAIMER
The information provided herein is for informational and illustrative
purposes only and is not, and does not seek to be, a source of legal,
investment or financial advice on any subject. This presentation does
not purport to address any specific investment objectives, financial
situation or particular needs of any recipient. It should not be regarded
by recipients as a substitute for the exercise of their own judgment.
This information does not constitute an offer of any sort and is subject
to change without notice. EEB is no obligation to update or keep
current the information contained herein.
EEB expressly disclaims any responsibility for actions taken or not
taken based on this information. EEB does not accept any
responsibility for losses that might result from the execution of the
proposals or recommendations presented. EEB is not responsible for
any content that may originate with third parties. EEB may have
provided, or might provide in the future, information that is inconsistent
with the information herein presented. No representation or warranty,
either express or implied, is provided in relation to the accuracy,
completeness or reliability of the information contained herein.
This presentation may contain statements that are forward-looking
within the meaning of Section 27A of the Securities Act and Section
21E of the U.S. Securities Exchange Act of 1934. Such forward-looking
statements are based on current expectations, projections and
assumptions about future events and trends that may affect EEB and
are not guarantees of future performance.
The shares have not been and will not be registered under the U.S.
Securities Act of 1933, as amended (the “Securities Act”) or any U.S.
State securities laws. Accordingly, the shares are being offered and
sold in the United States only to qualified institutional buyers as defined
under Rule 144A under the Securities Act, and outside the United
States in accordance with Regulation S of the Securities Act.
We converted some amounts from Colombian pesos into U.S. dollars
solely for the convenience of the reader at the TRM published by the
SFC as of each period. These convenience translations are not in
accordance with U.S. GAAP and have not been audited. These
translations should not be construed as a representation that the
Colombian peso amounts were, have been or could be converted into
U.S. dollars at those or any other rates.
01 EEB Overview
Contenido
02
Expansion Projects
03 Financial Performance
04 Q&A
EEB Overview 01
EEB Corporate Structure
5
EEB generally controls its subsidiaries or partners with world class operators following a long track record of success.
Transmission Distribution Distribution
Electricity
Transport
Natural Gas Services
Generation
51.5%
2.5% 1.7%
51%(1)
16.2% 99.97%(2)
15.6%
25%
100%(3)
66%(3)
100% 51.5%
95.3%
100%
100%
40%
40%
100%(4)
Colombia
Peru
Guatemala
Brazil
(1) EEB ownership through DECSA Special Purpose Vehicle. (2) EEB ownership
directly and indirectly through IELAH Spain (additional 31.92%).
(3) EEB effective ownership via direct and indirect stakes. (4) Through GEBBRAS
Special Purpose Vehicle acquired on August 21, 2015 51% stake in four
concessions for ~USD158 mm.
Selling process Law 226 Companies in process of merger
6
KEY UPDATES Corporate Highligths
Dividends Payment
05/07/2016: EEB paid dividends for its minority
shareholders, in one (1) installment, as following:
Extraordinary Dividend: COP ~49.98 per share, related
with the release of occasional reserves approved on
July 6th 2015.
Ordinary dividend: COP ~24.43 per share, approved in
the shareholders meeting last march 31st 2016.
05/07/2016: EEB paid dividends for its major shareholder,
Bogotá Municipality, as following:
40% of the ordinary dividend: COP ~24.43 per share.
The remaining 60% of the ordinary dividend will be paid
up to October 28th 2016
05/07/2017: EEB will start the payment of the extraordinary
dividend, COP ~49.98 per share, for its major shareholder
in 10 annual installments until 2026, with the respective
interest recognition.
ISAGEN Divestiture
Bogota’s municipality council authorized EEB on March
31st 2016 to divest ISAGEN shares.
On April 20th, the first phase addressed to the solidarity
sector (Law 226/95) started and it was open until June
20th 2016
On July 21th, the second phase addressed to the
general public and it was open until July 28th 2016. After
that date, the share was offer to any Open Tender Offer
- OPA (Oferta Publica de Acciones).
On July 29th EEB accepted the BRE Colombia
Investment and BRE Colombia Hydro Investment
Limited L.P. tender offer. The Acceptance consists of
sixty-eight million seven hundred sixteen thousand
(68.716.000) ordinary shares owned by EEB in Isagen
S.A. E.S.P.
On September 2016, EEB expects the final acceptance
by the purchaser (OPA) and to receive COP ~284,000
Mm for this sale.
7
KEY UPDATES Corporate Highligths
Ecopetrol selling process
Ecopetrol S.A. made public the announcement to Offer the
second phase of the Program to sell and award the shares it
owns. This stake sale is ruled by Law 226 of 1995.
Ecopetrol’s final share value was COP 1,815 which was
according to Law final value after applying CPI indexation to
initial price of phase one (COP1,740/share).
3.03% of Ecopetrol’s stake in EEB was offered to
international investors and no orders were placed.
On May 23rd, Ecopetrol announced the second offering of its
EEB’s participation of 3.03%. On June 1st 2016 the auction
was open in the Colombian Securities Exchange.
In this second auction, Ecopetrol sold 191,639,698 shares ,
77% was acquired by the pension funds and the remaining
23 % was allocated to retail investors.
At this date, Ecopetrol has an outstanding shares of
86,585,888, 0.94% of EEB’s total shares.
TRECSA Financing
June 15th, the Ministry of Finance by resolution No. 1733,
authorized EEB to guarantee payment obligations of its
subsidiary Transportadora de Energía de Centroamérica
S.A. – TRECSA, for up to EIGHTY SEVEN MILLION
DOLLARS (US$87,000,000).
(TRECSA ) signed a credit agreement, due on June 29th
2028, with Citibank Europe PLC UK Branch and Canadian
export agency EDC (Exporting Development Canada), to
finance the project PET 1-2009.
The disbursement was made on August 8th.
EEBIS Financing
June 23rd, the Ministry of Finance by resolution No. 1902,
authorized EEB to guarantee payment obligations of its
subsidiary EEB Ingeniería y Servicios S.A. – EEBIS, for up
to FORTY EIGHT MILLION DOLLARS (US$48,000,000).
8
KEY UPDATES Natural gas transportation & distribution activities
Cálidda´s client base has increased 32% compared to first
half of 2015, at the closing of the first half 2016 Calidda has a
client base of ~ 396,000 clients
During the first half, 804 km of network were built, whereby
the distribution system has reached a total of 6,793 km of
underground pipelines.
The EBITDA finalize in USD 113.2 Mm, increasing in 13%
compared with the same period of 2015. This increase was
mainly due to higher distribution services, mainly from Take-
or-Pay contracts, and residential clients’ connection services
and lower operational expenses in USD from services and
contracts in Soles.
IELAH Merging:
On May 11th 2016 TGI finalized the merger with IELAH; which was the Final Phase of the acquisition plan. As a result the remaining debt of that entity will be in TGI´s BS
Current outstanding debt of IELAH is USD 219 MM(1), after three partial repayments done: i) March 2015 (USD 76 MM) ; ii) September 2015 (USD 175 MM); iii) On March 11th 2016 (USD 175 MM).
Moody’s Rating Action
• On June 2nd, Moody’s ratings affirmed TGI’s corporate debt and issuer rating in “Baa3” stable outlook.
(1) Excluding intercompanies loans
TGI Cálidda
Expansion Projects 02
EXPANSION PROJECTS REVIEW Revenue growth has been sustained by a strong capex plan at the subsidiary and the associate level.
Source: Company filings.
(1) Excludes Brazil – GEBBRAS Capex
(2) Expected annual revenues.
Executed Capex by Segment(1)
(USD Mm)
Projects Update (2Q 2016)
UPME Project Status EAR(2)
USD MM On Stream
Chivor II 53,80% 5.5 08/07/2017
Cartagena Bolívar 44,20% 11.6 07/03/2017
Río Córdoba 43,20% 1.8 30/11/2016
Armenia 95,04% 1.3 26/11/2015
Tesalia 81,30% 11.0 14/02/2016
Sogamoso Norte 35,80% 21.1 30/09/2017
Refuerzo Suroccidental
500 kV 14,60% 24.4 30/09/2018
Ecopetrol San Fernando 38,40% 6.3 30/04/2017
Río Cordoba
Transformadores 46,10% 0.6 30/11/2016
La Loma 500 Kv 48,03% 1.3 30/11/2016
La Loma 100 Kv 4,30% 6.9 30/06/2018
Drummond Rio Cordoba 20.62% 0.87 30/11/2016
Subsidiaries
Capex by Company (2Q 16)
USD 74.6 Mm
15.5
9.9
47.5
23.4
15.7
5.0
22.6
31.2
Gas Transportation
Electricity Distribution
Gas Distribution
Electricity Transmission
2Q 2016 2Q 2015
EEC 6.7%
TGI 21.1%
Contugas 0.8%
Cálidda 29.5%
Trecsa 14.2%
EEBIS GTM/PE 10.2%
EEB Trans. 17.5%
Expansion Projects Review
11
Revenue growth has been sustained by a strong capex plan at the subsidiary and the associate level.
Associates
Executed Capex by Segment (USD Mm)
Projects Update (2Q 2016)
On-going projects: Nueva Esperanza, Norte.
New and existing demand
Quality service and continuity
Control operational risk
On-going projects:
CONCESION - MANTARO – MARCONA
LA PLANICIE –INDUSTRIALES
FRIASPATA MOLLEPATA and ORCOTUNA
Substation
Capex by Company (2Q 16)
USD 219.7 Mm
1.2
10.7
43.0
18.3
205.0
1.2
34.7
96.0
65.6
22.1
Gas Distribution
Gas Transportation
Electricity Distribution
Electricity Transmission
Electricity Generation
2Q2016 2Q2015
Promigas 15.8%
Gas Natural
0.5% REP 2.9%
Codensa 43.7% Emgesa
10.1%
CTM 27.0%
12
FINANCIAL PLAN 2013-2020 Investments and Funding Sources
Source: Company filings.
(1) Mainly concentrated on electricity transmission businesses (COL / Overseas).
(2) 2014 Incliudes M&A transaction IELAH Equity Portion
(3) 2015 Includes M&A transaction Brazil Equity portion
2013 – 2020 Funding Investments
USD mm %
Executed Capex 2013-2015 $1,330 49%
Cash Generation After Dividends 2016-2020 $1,324
Incremental Debt 2016-20 $225
Subtotal 2016-2020(1) $1,549 51%
TOTAL 2013-2019 $2,880
EEB Capex Profile – Controlled Companies
(USD mm)
64 80 69
221
398
98
84 74 94
107
178
35 36 29
68
88
60
17 16
202 143
101
47
81
34
30 29
264
55
$386
$597(2)
$347(3)
$443
$745
$192
$83 $86
2013 2014 2015 2016E 2017E 2018E 2019E 2020E
Electricity Colombia Electricity Overseas Natural Gas Colombia
Natural Gas Overseas M&A Natural Gas M&A Electricity
Financial Performance 03
14
CONSISTENT FINANCIAL PERFORMANCE Consolidated Results (IFRS) 2Q2015– 2Q2016
Revenues: On YTD Basis: June 2016 compare to June 2015 showed positive increase
of 13.7%
(+45.2%; COP 42,277 mm) Electricity Transmission: coming on stream of
new projects
(+28%; COP 154,124 mm) Natural Gas transportation.
(+19.6%; COP 32,412 mm) Electricity Distribution
(-1.6%; -COP 12,143 mm) Natural Gas distribution: 1% decrease in Cálidda’s
revenues due to tariff and FX conversion effects.
Gross Profit from Operating Activities: On a YTD Basis (+61%).
by: (103%;COP 21,454 mm) ) Electricity distribution. Increase on energy sales
through EEC. (+54%;COP 24,354 mm) Electricity Transmission: new projects under
execution and some already on stream.
(+140%; COP 143,633 mm) Natural gas distribution, new connected clients.
(+37% COP 134,581 mm) Natural gas Transportation: Increase on transported
volume.
Operational costs and expenses on YTD showed an decrease -10%
(1) Excludes administrative expenses & net of other expenses and gains
1,581,969 1,798,639
45.2%
19.6%
28%
-1.6% 13.7%
135,868 197,822
704,629
760,320
2Q 15 ElectricityTransmission
Electricity Distribution Natural GasTransportation
Natural GasDistribution
2Q 16
EEB's Operating Revenues By Segment 2Q 16 - 2Q 15 COP Millions - Growth Rate
533,357
857,379
103% 54%
140%
37% 61%
42,271 69,141
246,379
499,588
2Q 15 Electricity Distribution ElectricityTransmission
Natural GasDistribution
Natural GasTransportation
2Q 16
Gross EEB's Operating Profit By Segment (1)2Q 16 - 2Q 15 COP Millions - Growth Rate
2Q 15 2Q 16 COP %
Net Profit from operating activities 462,762 662,099 199,337 43%
Financial Income 66,722 62,627 7,328 -6%
Financial Expenses -191,188 -247,555 -21,564 29%
Exchange gain (loss) -82,786 143,235 226,021 273%
Share of profit (loss) of associates for
using equity method409,654 500,655 91,001 22%
Tax income (expense) -145,878 -151,227 -5,349 4%
Net Profit (loss) 519,286 969,834 450,548 87%
Owners of parent 492,511 924,534 432,023 88%
Non-controlling interests 26,775 45,300 18,525 69%
COP Million Var.
15
CONSISTENT FINANCIAL PERFORMANCE Consolidated Results (IFRS) 2Q2015– 2Q2016
(1) Includes administrative expenses & net of other expenses, other gains
Finance income decreased 6% due to (a)
Valuation on hedging operations (b) less
Interest returns on financial investments.
Finance costs increased 29% due to:(a) Greater
Interest payments; (b) Exchange difference in
interest payments, commisions and other
banking costs.
Net Exchange difference increase over 1H 15 in
273%
Increase in equity method of Associates by 22%
Net profit, grew by 87% due to operational
results and equity method contribution from
associates.
(1)
462,762
66,722
-191,188
-82,786
409,654
-145,878
519,286 492,511
662,099
62,627
-247,555
143,235
500,655
-151,227
969,834 924,534
43%
29% 20%
-273%
22%
+24%
87%
88%
Profit fromoperating activities
Financial Income Financial Expenses Exchange gain (loss) Share of profit (loss)of associates for
using equity method
Tax income(expense)
Profit (loss) Owners of parent
2Q 15 2Q 16
(1)
16
Operational EBITDA has increased from 19% to 74% of Consolidated Adjusted EBITDA over the last 10 years demonstrating increased strength of EEB’s controlled assets.
(COP mm)
Source: Company filings.
Note: Figures for the years 2006–2013 are presented under ColGaap standards. For 2014, 2015 & 2016 are presented under IFRS
(1) Normalized for timing differences in dividends declared and paid. 2010 excludes dividends declared based on an early close of Gas Natural, Emgesa and
Codensa’s financial statements. These figures are included in 2011, when such dividends would normally have been declared. Anticipated dividends declared by
Codensa on first half 2011, were included in 2012. 2014 excludes dividends declared based on an early close of Gas Natural, Emgesa and Codensa’s financial
statements. These figures are included in 2015, when such dividends would normally have been declared.
Normalized Consolidated Adjusted EBITDA(1) Consolidated Adjusted EBITDA 2Q 16 LTM by Subsidiary
(USD mm)
Consolidated Adjusted EBITDA 2Q 16 LTM by Segment
EEB has significantly increased its operational EBITDA generation
EEB Transmisión, Trecsa & EEBIS
Guate 6%
TGI 49%
Decsa/EEC 4%
Cálidda, Contugás & EEBIS Perú
16%
Emgesa 10%
Codensa 6%
Gas Natural
2%
Promigás 1%
ISA, REP & CTM 2%
Otros 1%
Electricity Generation
14.2%
Electricity Transmission
7.5%
Electricity Distribution
10.2% Gas
Transportation 49.7%
Gas Distribution 17.8%
Others 0.4%
76% 64%
56%
52%
55% 56%
39% 45%
44% 33%
19% 24%
36% 44% 48%
45% 44% 61% 55% 56% 67%
81%
2,543,833
2,413,812
1,964,666
1,775,908
1,447,335
1,369,533
1,122,343 1,053,942
934,163 949,599
539,319
906 878 973 922 819 705 586 516 416 471 241
2Q 2016LTM
2015201420132012201120102009200820072006
EVOLUTION OF EBITDA
$1,543 $1,737 $1,733
$2,218
$3,009 $2,803 $2,646
3.4% 6.4% 2.9%
2.2%
0.7% 1.2%
3.11%
96.6% 93.6% 97.1%
97.8%
99.3% 98.0%
96.9%
2010 2011 2012 2013 2014 2015 2Q 16
17
DESCRIPTION OF INDEBTEDNESS 2013-2020 Investments and Funding Sources
Net Debt / Consolidated Adjusted EBITDA(1)(2) Consolidated Adjusted EBITDA / Net Interest(1)(2)
Consolidated Debt Composition Debt Maturity Profile(3)
(USD mm) (USD mm)
Source: Company filings.
(1) Covenant associated to this indicator is currently suspended since the bond EEB 2021 has investment grade, granted by two out of three risk rating agencies monitoring the latter. Covenant
established in Offering Memorandum of USD749,000,000 EEB 6.125% Senior Notes due 2021. It includes anticipated dividends.
(2) Increase is mainly explained by increase of foreign exchange (USD/COP movements).
(3) 2019:Syndicated loan acquired by Contugas (USD342 mm) and additional indebtedness incurred by SPV in order to reacquire 31.92% shares of TGI IELAH (USD219 mm outstanding debt)
Debt maturity profile as of 2Q 2016.
COP| PEN USD
2.63x 2.78x 3.20x 3.27x
2.41x
4.50x
2Q 161Q 164Q 153Q 152Q 15
7.55x 8.80x
7.30x
11.12x
15.83x
2.25x
2Q 161Q 164Q 153Q 152Q 15
155.8 149.0
52.6
606.0
14.5
749.5 750.0
320.0
2016 2017 2018 2019 2020 2021 2022 2023
18
TRACK RECORD OF CREATING VALUE – SHARE PRICE APPRECIATION
EEB’s shares have outperformed the Colcap over the last year providing stable returns in a volatile market environment.
Historical Share Price Evolution
• Ticker EEB: CB | Part of COLCAP, COLEQTY and COLIR and DJSI • As of June 30th 2016 EEB’s marketcap was USD 5.6 Billion • Average Target Price COP1,865 (USD 0.59) (1)
Source: Bloomnerg since July 1st 2015 until June 30t 2016.
(1) Average target price calculated as the average of the following brokers: Credicorp: COP1,810; BTG: COP1,820; Gobal Securities Colombia: COP1,900;
Asesores en Valores: COP1,740; Corredores Asociados: COP1,940; Ultrabursatiles: COP1,850 & Valores Bancolombia: COP1,810. Larrainvial: COP 2,050.
• Dividend Payout Ratio 2015: 26% Avg 2008 - 2015: 77% • Dividend Yield 2015: 4.3 % Avg 2010 - 2015: 4.2%
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
0
20
40
60
80
100
120
140
07/2015 08/2015 09/2015 10/2015 11/2015 12/2015 01/2016 02/2016 03/2016 04/2016 05/2016 06/2016
Vo
lum
e (
CO
P m
m)
Pri
ce (
Ind
exe
d 1
00
)
Volume
EEB Equity
Colcap
(14.4%)
(-0.3%)
Colombia Colcap
Q&A 04
Electricity Transmission
Ongoing discussions on a new methodological proposal to remunerate the electricity transmission activity (Res CREG 023 de 2016). The main issue currently under discussion is the transition to a new scheme to remunerate assets from the methodology Net Replacement Value (NRV) to a methodology of Depreciated Assets (DORC).
The cross-sectional methodology was issued (for all regulated activates undertaken by CREG) to calculate WACC rate. To date, WACC has not been calculated for the transmission activity.
Natural Gas Transportation
Issuance of new cross-sectional methodology (for all GREG regulated activities) for the calculation to WACC rate. To date WACC has not been calculated for gas transport
Procedure undertaken at CREG to assess 10 gas pipelines that completed the Useful Life Standars (20 years). investment acknowledged in this pipelines, if are maintained working, increased 13.4% with respect to the value acknowledged in the last tariff review (Res CREG 121 of 2012), from US$ 56,5 to US$ 64,1 million.
Electricity Transmission- Guatemala
Trecsa began a process at Ministry of Energy and Mines aimed at being acknowledged US$331,076.24 per year, on account of force majeure of Acts of God during the performance of the project; this petition was accepted by the Ministry as per Resolution 599 of 23 February 2015.
To date, it awaits that the National Commission for Electric Power (CNEE - for its Spanish acronym) issues the final resolution to include those additional resources to TRECSA.
Natural gas Distribution
Issuance of new cross sectional methodology (for all activities regulated by CREG) to calculate WACC rate. The actual WACC rate before taxes was established annually for 2015-2019 as follows:
Res.096/15 2015 2016 2017 2018 2019+ 13,28% 13,51% 13,97% 14,23% 12,47%
BUSINESS REGULATORY UPDATE
21
EEB CORPORATE GOVERNANCE
Experienced Management and Board of Directors Corporate Governance and Transparency
The government of the District of Bogotá is responsible for appointing a majority of the members of EEB’s board of directors and executive officers, including EEB’s president
Shareholder’s Meeting approved new bylaws according to the OCDE.
High quality practices and standards in accordance with national listing
requirements given that EEB is listed on the Colombian securities
exchange.
The Board of Directors has created operations, management and control
committees to aid in efficiently carrying out the activities of the Company
Note: (1) The Board of Directors is responsible for establishing general business policies and guidelines, as well as long-term strategy. All directors are elected for an
unlimited duration. Directors must remain in office until their successors are elected and have taken office (2) independent member.
.
Executives Position Year of a appointment
Astrid Álvarez President 2016
Leonardo Garnica Investments VP 2016
Ernesto Moreno Transmission VP 1997
Felipe Castilla Financial VP 2013
Lina Toro Human Resources & Services VP 2016
Diana Vivas Legal & Regulation VP 2016
Juan Daniel Avila Sustainable Development Director 2016
Mauro Hernan Mejia Strategic Supply Chain Director 2016
Sandra Aguillón Internal Audit Director 2011
Maria José Quiceno Communications Director 2016
Board of Director(1) Possition Actual Position Year
Beatriz E. Arbeláez Martínez President District’s Finance Secretary 2016
Jaime E. Ruiz Llano Vice-president Colvivienda CEO 2016
Alberto Gutiérrez Bernal Director Titularizadora Colombiana CEO 2016
Gisele Manrique Director Major’s Office Chief Counsel 2016
Margarita Ma. Rehbein Dávila Director CFO Sanford Management 2016
Carlos A. Sandoval Reyes Director Structured Finance VP FDN 2016
Antonio J. Núñez Trujillo Director(2) Partner Nuñez Rincon Lawyers 2016
Rafael Herz Stenberg Director(2) Asoc. Colom. del Petróleo VP 2016
Gustavo Ramirez Director(2) Investment VP Corficolombiana 2012
Shareholders’ Meeting Peak governance body
Compensation Committee and Financial insvestments Committee Made up by three independent board members
External Controls Tax Review, External Audit, specialized audits, City Controllers Office, SSPD and SFC
Strategic Supply Chain Committee and Executive
Contract Committee Analysis of contracting procedures
and recommendations to the Executive Committee
Audit and risk Committee
Made up by three independent board members
Corporate Governance Committee
Three board members. At least one of them must be
independent
22
INVESTOR RELATIONS For more information about Grupo Energía de Bogotá (GEB) contact our Investor Relations team:
Felipe Castilla Canales
Rafael Andrés Salamanca Investor Relations
Advisor GEB
+57 (1) 326 8000 Ext 1675
CFO
www.eeb.com.co www.grupoenergiabogota.com/en/investors
+57 (1) 326 8000 Ext 1501 Fabián Sánchez
Aldana Investor Relations
Advisor GEB
+57 (1) 326 8000 Ext 1827
Para uso restringido del Grupo de Energía de Bogotá. Todos los derechos reservados. Ninguna parte de esta
presentación puede ser reproducida o utilizada en ninguna forma o por ningún medio sin permiso explícito de el
Grupo de Energía de Bogotá.