second-quarter 2011 analytikerpresentasjon …...hafslund asa 15. juli 2010 christian berg, ceo...

Hafslund ASA

15. juli 2010

Christian Berg, CEO

Analytikerpresentasjon 2. kvartal 2010

Second-quarter 2011 presentation to analysts

Hafslund ASA

8 July 2011

Christian Berg, CEO

s.2

Highlights ─ second-quarter 2011

• High cash flow and Q2 2011 EBITDA of NOK 708 million (exclusive of REC profit effect).

• Hydropower sales price: NOK 0.39 per kWh, up 11 percent from Q2 2010.

• Hydropower production: returns to normal for the quarter.

• Hydropower reservoir content in south-central Norway improves dramatically: now at normal

levels for the season.

• Network business: stable profit continues.

• Effect of REC investment’s share price development on operating profit: minus NOK 564

million (Q2 2010: minus NOK 747 million).

• New NOK 3.6 billion revolving credit facility strengthens liquidity reserve.

s.3

EBITDA ─ second quarter 2011

14442

3237

264

26308

564

0

100

200

300

400

500

600

700

MNOK

EBITDAOther

Activities

VenturePower SalesNetworkDistrict

Heating

Hydropower REC

s.4

Stable cash flow from operations

2 655

2 7832 842

2 655

2 476

2 246

2 130

2 007

0

500

1 000

1 500

2 000

2 500

3 000

NOK/kWh

0.5

0.4

0.4

Q2 10

0.3

Q1 10

0.3

Q4 09

0.3

Q3 09

0.3

Q2 09

1 977

0.3 0.3

0.2

0.1

0.0

MNOK

+34%

Q2 11

0.4

Q1 11

0.4

Q4 10

0.4

Q3 10

• Cash flow from operations up 34 percent over the past two years:

• Renewable energy, infrastructure and Power Sales (NOK 412 million)

• Expansion costs and Bioenergy

(NOK -88 million)

• Other business activities and support (NOK 172 million)

• One time effects (NOK 160 million)

• EBITDA sensitivity: a NOK 0.10 per kWh change in wholesale power prices results in an approximately NOK 340 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 effect from financial investments and interest and currency derivatives (in NOK million).** Power prices for Hafslund Hydropower – rolling 12 month

s.5

Development interest-bearing debt and equity ratio

1010

13

1111

3

4

5

6

7

8

9

10

11

12

13

14

0

10

20

30

40

50

60

Equity ratio %NOK billion

Q2 11

33

Q1 11

37

Q4 10

35

Q3 10

35

Q2 10

33

Equity ratioNet interest-bearing debt

Net interest-bearing debt and equity ratio Change in interest-bearing debt in Q2 11

Amounts in NOK million

Net interest-bearing debt 31.03.2011 -10 139

EBITDA 144

Interest paid -142

Tax paid -94

Change in market value of financial instruments 569

Change in working capital 899

Investments -256

Net loan portfolio adjustments 312

Payment of dividend -1 461

Net interest-bearing debt 30.06.2011 -10 168

•s.6

Working capital requirements- seasonal variation

-1 000

0

1 000

2 000

3 000

4 000

0.1

0.3

0.4

0.5

0.6

0.7

NOK/kWhNOK mill

jun.11mar.11dec.10sep.10jun.10mar.10dec.09sep.09jun.09

0.2

0

1 500

3 000

4 500

6 000

GWh

Q1 11

5 453

Q4 10

5 246

Q3 10

2 613

Q2 10

3 007

Q1 10

5 001

Q4 09

4 105

Q3 09

2 162

Q2 09

2 602

Q2 11

3 014

Average power pricesWorking capital

Working capital and power prices

Power sales - sold volume

• Seasonal variation in working capital driven by both volume sold and prevailing power prices.

• Strong demand for energy in the first and fourth quarters of the year.

• June through September is typically the least working-capital intensive period.

• Working capital decreased a further NOK 0.9 billion in Q2 2011 to NOK 0.3 billion as of 30 June 2011.

s.7

Hydropower

996

827

0

100

200

300

400

0

200

400

600

800

1 000

1 200

quarter 12 months

303

Q2 11

308

Q2 10

240

Q1 10

252

134

Q3 10 Q1 11Q4 10Q3 09

154

Q4 09

178186

Q2 09

219

EBITDA per quarter EBITDA rolling 12-month

• Profit and operating revenue figures reflect higher power production and power prices than in Q2 2010.

• Production: 11 percent greater than in Q2 2010.

• Nasdaq OMX (NO1) spot price: NOK 0.41 per kWh (Q2 2010: NOK 0.37 per kWh).

• New aggregate in continuous operation since start-up in late April 2011.

• Projected third-quarter 2011 generation: approximately 940 GWh; anticipated volume is 60 GWh or 7% above normal for the third quarter.

NOK million Q2 11 Q2 10 YTD 11 YTD 10

Operating revenue 359 289 536 527

EBITDA 308 240 441 417

Operating profit 296 229 419 396

Sales price (NOK/kWh) 0.39 0.35 0.41 0.39

Production volume (GWh) 923 829 1294 1349

Investments 8 31 32 71

s.8

Hydropower production profile

156142

210

286

333 335 342

313 314

214

174

221

0

50

100

150

200

250

300

350

340

GWh

DecNovOctSepAugJulJunMayApr

277

Mar

99

Feb

113

Jan

158

306

20112010 Normal

*Normal annual production = 3,100 GWh based on 10-year average of production adjusted for capacity improvements.

s.9

District Heating

254250

- 50

0

50

100

150

200

0

50

100

150

200

250

300

quarter 12 months

Q1 11

130

Q4 10

93

Q3 10

6

Q2 11

26

Q2 10

32

Q1 10

152

Q4 09

58

Q3 09

-11

Q2 09

25

EBITDA rolling 12-monthEBITDA per quarter

• Q2 is a seasonally weak quarter; deliveries are typically 16 percent of normal annual production.

• Lower district heating deliveries due to low market demand during early Q2.

• Contribution margin per kWh: up 6 percent.

• New delivery contracts signed in Q2 2011: 64 GWh annual energy outtake.

• Investing in renewable energy sources:

o 50 MW bio-oil boiler in Q1 2012

o 56 MW wood powder-fired boiler

scheduled for start-up in 2012/2013.



EBITDA 26 32 156 184

Operating profit -5 2 96 125

Gross margin (NOK/kWh) 0.42 0.39 0.36 0.36



s.10

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

Q2 11

207

Q1 11

716

Q4 10

694

Q3 10

134

Q2 10

234

Energy prices (NOK/kWh) Q2 10 Q3 10 Q4 10 Q1 11 Q2 11

Waste & biofuel 0.18 0.19 0.18 0.20 0.20

Heat pumps 0.15 0.12 0.22 0.21 0.18

Biooil and biodiesel 0.77 0.68 0.62

Electricity 0.48 0.58 0.61 0.57 0.60

Oil/natural gas 0.43 0.58 0.53 0.55 0.71

Total production cost 0.26 0.25 0.48 0.46 0.30

District Heating incl. Distribution 0.65 0.66 0.75 0.80 0.72

Gross contribution margin 0.39 0.41 0.27 0.34 0.42

• Q2 has a seasonally low production cost per kWh due to high proportion of less-costly base-load energy inputs.

• Production costs depend on energy sources used and price differentials.

• Bio-oil implemented as a peak-load energy source in three most recent quarters.

• Proportion of electricity and renewable energy sources up 4 percentage points to 80 percent in last 12 months.

• Higher wholesale power prices result in increased district heating prices and production costs.

s.11

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

101

72

35

Normal*20112010

* Normal = projected 2011 production, given normal temperatures (10-year average) and current and planned customer tie-ins to the grid.

s.12

Network

1 052

917

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 11

264

Q2 10

275

Q1 10

274

Q4 09

314

Q3 09

243

Q2 09

247


• Stable profit for Network business.

• Excellent supply reliability — somewhat higher frequency of thunderstorms raised the number of service interruptions compared with Q2 2010.

• Profit projection for 2011 on a par with 2010.

• Sale of Network’s central grid infrastructure completed.

• Advanced Metering System (AMS) implementation regulations adopted:

o 80 percent of all installed meters to be

AMS by 1 January 2016.

o All customers’ electric meters to be

replaced by 1 January 2017.


Operating revenue 967 1 050 2 285 2 446

EBITDA 264 275 524 549



s.13

Power Sales

236

0

50

100

150

200

0

100

200

300

400

500

quarter 12 months

Q2 11

279

37

Q1 11

121

Q4 10

86

Q3 10

34

Q2 10

187

Q1 10

52

Q4 09

51

Q3 09

22

Q2 09

45


• Revenue figure reflects increased prices for wholesale (spot) power contracts traded via Nasdaq OMX.

• 855 000 customers via wholly and partly owned companies.

• Satisfactory profit performance in a seasonally weak quarter; however, value decline on power derivatives results in NOK 21 million charge to Q2 2011 profit.

• Power Sales had Q2 2011 after-tax profit of NOK 30 per customer.

• Working capital down NOK 1.4 billion in 2Q 2011.


Operating revenues 1 528 1 391 4 571 4 012

EBITDA 37 187 158 239


Sold volume (GWh) 3 014 3 007 8 467 8 008

s.14

Heat and Bioenergy

Heat (energy recovery facilities):

• EBITDA: NOK 10 million, double the Q2 2010 figure.

• Higher energy prices and increased use of waste-derived fuel.

• High steam delivery volumes at Borregaard plant.

• 10-week planned maintenance shutdown at Fredrikstad facility.

Bioenergy (wood pellets production):

• Improvements to rock debris extractors and raw materials mills on schedule.

• Pilot operation and start-up expected in the third quarter of 2011.



EBITDA 0 (7) 10 (1)

Operating profit (9) (15) (8) (18)

Energy production (GWh) 62 62 136 128

Sales price (NOK/kWh) 0.26 0.23 0.26 0.24

Used waste (thousand tonns) 31 27 66 54


s.15

Venture

21%

7%

Renewable energi

12%

AMS (Advanced metering system)

Energy efficiency and other investments

Telecom 59%

Capital employed:

• Venture portfolio value growth: NOK 25 million in Q2 2011.

• Capital employed, excluding REC: NOK 812 million.

• REC investment value decline: NOK 903 million, of which NOK 564 million (Q2 2010: NOK 747 million) charged to operating profit.

• REC investment: 89.0 million shares or 8.93 percent of stock — market value: NOK 0.8 billion (at NOK 9.28 per share).



EBITDA 32 43 51 88

Operating profit excl. REC 24 (8) 33 17

REC effect on EBITDA (564) (747) (564) (1 991)

s.16

Group profit and loss account

NOK million Q2 11 Q2 10 ∆∆∆∆ YTD 11

Operating revenue 3 118 3 026 92 8 324

Gain/loss financial items (527) (723) 196 (534)

Cost og energy (1 900) (1 705) (194) (5 921)

Gross margin 691 597 94 1 869

Operating expenses (547) (558) 11 (1 069)

EBITDA 144 39 105 800

Depreciation (200) (245) 45 (401)

Operating profit (56) (206) 150 399

Interest expences (136) (124) (12) (258)

Market value change loan portfolio (74) (37) (37) (48)

Financial expenses (210) (161) (49) (306)

Pre-tax profit (266) (367) 101 93

Tax (150) (179) 29 (280)

Profit after tax (416) (546) 130 (188)

Earnings per share (EPS) in NOK (2.13) (2.80) 0.67 (0.96)

s.17

Group balance sheet

NOK million 30.06.2011 31.03.2011 ∆∆∆∆ 31.12.2010

Intangible assets 2 379 2 388 (9) 2 389

Fixed assets 18 342 18 580 (238) 18 557

Financial assets 1 792 2 674 (883) 2 831

Accounts receivables and inventory 2 375 4 311 (1 936) 5 625

Cash and cash equivalents 911 1 456 (544) 211

Assets 25 799 29 408 (3 609) 29 613

Equity (incl. Min. int.) 8 621 10 849 (2 228) 10 464

Allocation for liabilities 3 170 3 103 68 3 046

Long-therm debt 10 520 10 346 174 11 321

Other currently liabilities 1 295 1 903 (609) 2 338

Short-term debt 2 193 3 208 (1 014) 2 444

Equity and liabilities 25 799 29 408 (3 609) 29 613

Net interest-bearing debt 10 168 10 139 29 13 067

Equity ratio 33 % 37 % -4 % 35 %

We deliver tomorrow's energy and infrastructure solutions

Additional analytic information

s.20

Earnings per share (excluding REC)

1.71 8.12 1.90

2009 2010 2011

0.76

1.00

1.34

0.22

-0.38

0.86

1.01

1.17

5.02

0.73

By quarterNOK

s.21

Group cash flow statement

NOK million Q2 11 Q2 10 ∆∆∆∆ YTD 2011

EBITDA excluding REC 144 39 105 800

Interest paid (142) (130) (12) (332)

Tax paid (94) (20) (74) (192)

Market value changes and other liquidity adjustments 569 787 (218) 591

Change in working capital 899 809 90 1 822

Cash flow from operations 1 376 1 485 (109) 2 689

Investments in operations and expansion (256) (423) 167 (488)

Sale of operating assets and business activities 325 5 320 325

Portfolio changes Venture, etc (23) 292 (315) 1 517

Cash flow, investment activities 46 (126) 172 1 354

Cash flow for debt repayment and dividends 1 422 1 359 63 4 043

s.22

Capital employed and return on capital employed

2011**

11.2%

2010*

11.5%

9.0 %

2.5 %

2009

6.0%

2.5%

8.6%40%

21%

5%

District Heating

Market

9%

Network

Heat and Bioenergy

Venture3%

Hydropower

20%

REC

4%

Capital employed Return on capital employed (ROCE) excluding REC

* Return on capital employed (ROCE), of which 9.0% is exclusive of the Hafslund Fibernett sales gain and the Biowood Norway write-down.

** Rolling 12-month return on capital employed, of which 8.6% is exclusive of the Hafslund Fibernett sales gain and the Biowood Norway write-down.

s.23

Capital structure development

0

2

4

6

8

10

12

14

0

10

20

30

40

NOK billion

Q2 09

40.0

35.0

Q3 10

35.0

Q2 10

33.1

Q1 10

34.3

Q2 11Q4 09

33.4

38.1

10.3

Q3 09

40.0

Equity ratio %

Q4 10 Q1 11

37.0

10.7 11.210.2

11.6 11.911.3 11.1

13.1

Equity ratio Net interest-bearing debt

s.24

Loans — portfolio data

700

1 000

0

1 000

2 000

2021

319

202020192018

1 059

2017

860

20162015

1 909

2014

1 909

2013

1 772

2012

1 556

2011

530

Other loansBondsCertificate loans

256

0

400

800

MarFebJanDecNov

327

OctSep

77

AugJul Apr May Jun

Other loansBondsCertificate loans

Debt maturity profileNOK million

Loans at maturity, next 12 monthsNOK million

Portfolio data

Q2 11 Q1 10 ∆∆∆∆

Bonds 47 % 47 % 0 %

Certificate loans 6 % 8 % -2 %

Other loans 47 % 45 % 2 %

Q2 11 Q1 10 ∆∆∆∆

Nominal value - market value

of loans-184 -110 -74

Market value interest rate

swaps-8 -11 3

Average interest incl.

derivatives4,4 % 4,2 % 0,2 %

Proportion of loan portfolio

with fixed interest45 % 37 % 8 %

Loans at maturity next quarter

(NOK million)127 1 289 -1 162

Unused drawing facilities (NOK

million)5 194 4 677 517

s.25

Power and CO2 price development

EUR/MWh

EUR/tCO2

Source: www.nasdaqomxcommodities.com per 30 June 2011

0

15

30

45

60

75

90

105

120

135

jun.09 jul.11okt.09aug.09 mai.10 jul.10 aug.10 apr.11des.09 nov.10mar.10 des.10sep.10

EUR

mar.11sep.09 apr.10jan.10 jun.11mai.09 jan.11

Nordic spotmarketFWD 2014 FWD 2012 CO2 2011

s.26

Hydropower — Glomma waterway flow

0

500

1 000

1 500

2 000

2 500

3 000

decnov

m3/sek.

octsepaugjuljunmayaprmarfebjan

Max. capacity utilization20102011

• Q2 2011 production: 3% below normal for the reporting period.

• Maximum capacity utilization: 1,000 m³.• Projected Q3 2011 production: about 940 GWh (approx. 60 GWh below normal for the reporting period)

provided normal reservoir levels and precipitation.

s.27

Other Activities


Support (31) (27) (71) (59)

Power trading (2) 9 (19) 6

Real estate 7 8 9 13

Billing and customer service 26 19 45 43

Financial derivatives, ass. comp. 32 3 41 20

Other (1) 0 (1) 0

Operating profit other 33 11 5 23

s.28

Shareholders as of 30 June 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 2 447 2 447 1.3 % 0.0 %

5 MP Pensjon PK 1 579 1 579 0.8 % 0.0 %

6 Odin Norge 1 224 1 224 0.6 % 0.0 %

7 Folketrygdfonet 85 494 579 0.3 % 0.1 %

8 Hafslund ASA 397 397 0.2 % 0.0 %

9 AS Herdebred 107 276 383 0.2 % 0.1 %

10 New Alternatives Fund, Inc 328 - 328 0.2 % 0.3 %

Total, 10 largest shareholders 111 099 72 470 183 569 94.0 % 96.2 %

Other shareholders 4 329 7 288 11 617 6.0 % 3.8 %

Total 115 428 79 758 195 186 100 % 100 %

s.29

Key figures

Group YTD 2011 YTD 2010

Capital matters

Total assets 25 799 27 653

Captial employed 22 342 23 835

Equity 8 621 9 140

Market capitalization 12 275 11 440

Equity ratio 33 % 33 %

Net interest-bearing debt 10 168 11 275

Profitability excl. REC

Profit after tax (188) (1 518)

Earnings per share (EPS) (0.96) (7.78)

Cash flow per share 13.78 7.61

Network YTD 2011 YTD 2010

Capital employed 8 830 8 966

Annual Income ceiling 2 490 2 891

NVE-capital (regulatory) 6 233 6 166

Power Sales YTD 2011 YTD 2010


- of this working capital 373 641

Total volume (GWh) 8 467 8 008

Venture YTD 2011 YTD 2010

Capital employed exl REC 812 1 514Market value REC 826 1 390

Power Generation YTD 2011 YTD 2010


Sales price (NOK/kWh) 0.41 0.39


District Heating YTD 2011 YTD 2010


Sales price (NOK/kWh) 0.78 0.71

Gross margin (NOK/kWh) 0.36 0.36

Sales volume (GWh) 925 954

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

– [email protected]

– 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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second-quarter 2011 analytikerpresentasjon …...hafslund asa 15. juli 2010 christian berg, ceo...

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