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Transcript of The first Romanian privatization through the capital market · PDF file Distributie, E.ON...

  • Bucharest, April 10th, 2017

    The first Romanian privatization through

    the capital market

    A success story

  • Market Overview

     Market Overview

     Electrica Overview

     Group Strategy

     Corporate Governance

  • Romanian Electricity Market Overview

    Generation

    Transmission

    Supply

    Interconnections

    Romania has an unbundled power sector and is in the process of liberalising power supply to end-users.

    Source: Company data, ANRE, Transelectrica, Eurostat.

     The sources of electricity produced in 2015 consisted of Coal (27%), Hydro (27%), Nuclear

    (18%), Oil & Gas (14%), Wind (11%), Solar (2%) and Others (1%)

     Transelectrica is the sole Transmission System Operator responsible for transmission grid

    management and development, electricity market operation, (including green certificates)

    system balancing

     Eight non-overlapping geographical areas, of which Electrica covers three

     Revenues regulated through a Tariff Basket Cap methodology based on Regulated Asset

    Base

     Players: Electrica, Enel, CEZ, E.ON

     Power prices fully liberalized for large industrial consumers

     Full liberalization expected Jan 2018

     Following the liberalization, the percentage of the total power consumed that was freely

    traded increased year by year, up to 66% in 2014 and up to 69% in 2015

     Electricity consumption per capita for Romania was 39.4% of EU average in 2014

     Romania has interconnection capacities with: Bulgaria, Hungary, Moldova, Serbia, Ukraine

     In 2015, Romania exported c. 10.5 TWh of electricity (representing 20% of the internal

    consumption), up by 28% vs 2014, and imported 3.8 TWh, up by 150%

    Market Overview

    Distribution

  • Romanian Electricity Market Overview (Cont’d)

    Renewables, Municipal

    Cogeneration and

    Other IPP’s

    Transmission

    and Balancing

    Supply

    Generation

    Distribution

    Around

    100

    Players

    Source: ANRE.

    Market Overview

  • Number of Users (‘000’s)

    39% 40% 40%

    Distribution Market Overview

    Key Facts

     Electricity distribution in Romania is currently controlled by eight

    licensed electricity distribution companies

     Each company is responsible for the exclusive distribution of

    electricity within its licensed region, based on a concession

    agreement with the Romanian State acting through the Ministry of

    Energy

     Electrica and Enel own three distribution companies each, while

    CEZ and E.ON own the other two

     Electrica is a leading player in the distribution sector, in terms of

    area covered and users

    Romanian Electricity Distribution Map

    Distributed Volume (TWh)

    Source: ANRE latest annual report - 2015

    3,565 3,620 3,626

    5,486 5,515 5,561

    9,051 9,135 9,187

    2013 2014 2015

    Electrica Rest of Market

    16.1 16.3 17.1

    25.0 24.2 25.3

    41.1 40.5 42.4

    2013 2014 2015

    Electrica Rest of Market

    39% 40% 40%

    Market Overview

  • Electrica Furnizare 23%

    Enel 16%

    Tinmar Energy 6%

    E.ON Energie 8% Cez Vanzare 7%

    Others (

  • 6.90 5.82 5.38 5.30

    2.79 3.42 4.72

    5.30

    9.69 9.24

    10.10 10.60

    2013 2014 2015 2016

    Regulated Competitive

    Source: Company data.

    Volume of Electricity Supplied on Retail Market (TWh)

    Number of Consumers Consumers (‘000’s)

    3,532 3,517 3,520 3,350

    34 74 90 250

    3,566 3,591 3,610 3,600

    2013 2014 2015 2016

    Competitive Regulated

    Supply business overview

    Consumers Consumers by Revenues

    Regulated, 60%

    Competitive, 40%

    Consumers by Volume

    Regulated, 50% Competitive,

    50%

    Market Overview

  • Electrica Overview

     Market Overview

     Electrica Overview

     Group Strategy

     Corporate Governance

  • Key Facts before IPO

    2000 20072005 2009

    2000

     Electrica

    established as

    a

    stand-alone

    company post

    restructuring

    of CONEL1

    2001

     Electrica

    Group

    established

    comprising

    8

    distribution

    and supply

    subsidiaries

    2007

     Unbundling of the

    distribution and

    supply businesses

    2005 and 2007

     Electrica transferred by operation of

    law to Fondul Proprietatea (FP)

    stakes of 12% in Electrica

    Transilvania Nord, Electrica

    Transilvania Sud, Electrica

    Muntenia Nord - the precursors of

    the current 3 distribution companies

    and of Electrica Furnizare

     Remainder 10% shares in EDTN,

    EDTS, EDMN and EF transferred

    by operation of law to FP in 2007

    2011

     Electrica

    Furnizare

    S.A. set-up

    following

    the merger

    of the three

    supply

    companies

    2014

    2014

     On July 3rd 2014 Electrica’s shares were admitted to trading on both BSE and LSE following a successful IPO through capital increase

     Moldova and Dobrogea service companies pending liquidation proceedings, Oltenia -insolvent, Banat – bankrupt

     Spin off of minority holdings: E.ON Moldova Distributie, E.ON Energie Romania, Enel Distributie Dobrogea, Enel Distributie Banat, Enel Energie, Enel Distributie Muntenia, Enel Energie Muntenia, Enel Electrica Soluziona, BRM and Hidro Tarnita

    Source: Company data.

    1. CONEL was created as a holding company concentrating all the players in power generation, transmission, distribution and supply.

    2001 2008

    2005

     Enel’s acquisition of 51%

    in Electrica Dobrogea

    and Electrica Banat

     E.ON’s acquisition of 51%

    in Electrica Moldova SA

     CEZ’s acquisition of 51% of

    Electrica Oltenia

    2009

     CEZ’s acquisition of

    the remaining 30%

    stake of CEZ

    Distributie and CEZ

    Vanzare

    2008

     Enel’s acquisition

    of 64.4% of

    Electrica Muntenia

    Sud Market

    Electrica

    2011

    2014

     E.ON’s acquisition of

    Electrica’s remaining

    holdings in E.ON

    companies

    Electrica Overview

  • Electrica Significant Subsidiaries

    Source: Company data, ANRE.

    1. As of 31 December 2016 Consumer = Any natural person or legal entity that enters a contract to purchase electricity. User = Any producer, transmission system operator, distribution system operator, supplier,

    eligible consumer or captive consumer connected to the network; 2. As of 31 December 2015. Market share is based on volumes; 3. As of 31 December 2016 as per the financial section converted from RON to €

    using 31 December 2016 exchange rate of 4.5411 for balance sheet data and average rate of 4.4908 for income statement data; 4. As of 30 November 2016. Market share is based on volumes

    Societatea de Distributie a

    Energiei Electrice

    Transilvania Nord S.A

     1.25 mn users1

     Market share2 11.6%

     Revenues3: RON 857 mn

     EBITDA3: RON 269 mn

    Societatea de Distributie a

    Energiei Electrice

    Transilvania Sud

     1.12 mn users1

     Market share2 13.3%

     Revenues3: RON 790 mn

     EBITDA3: RON 256 mn

    Electrica Furnizare (EF)

     3.60 mn consumers1

     Market share4 22.5%

     Revenues3: RON 4,432 mn

     EBITDA3: RON 185 mn

    Electrica Serv (ES)

     Revenues3: RON 365 mn

     EBITDA3: RON 17 mn

    78% 100%22%

    External services:

    • SE Muntenia

    • SE Oltenia

    Supply business:

    10.6 TWh on the retail market in

    2016

    Societatea de Distributie a

    Energiei Electrice Muntenia

    Nord S.A

     1.3 mn users1

     Market share2 15.4%

     Revenues3: RON 801 mn

     EBITDA3: RON 227 mn

    2016 Financials3

     Revenues: RON 5,518mn (€1,229mn) a 0.3% increase vs 2015

     EBITDA: RON 960mn (€214mn) a 4% rise compared to 2015

     Net Profit: RON 469mn (€104mn) a 2.8% decrease vs 2015

     Net Debt / (Cash): RON (2,366mn)/(€521mn)

    Distribution business (2016):

    • 3.67 mn users / area of 97,196 km2 covered / distributed c. 17.5 TWh

    • RON 4.5 bn (€ 1.0 bn) Regulated Asset Base (RAB) / concession ending in 2054 (+24.5 years extension)

    SDEE

    Transilvania Nord

    SDEE

    Transilvania Sud

    SDEE

    Muntenia Nord

    Electrica Overview

  • 15%

    13%

    12%

    60%

    SDMN

    SDTS

    SDTN

    Others

    Volumes Distributed in 2015 Volumes Supplied in 2015

    Regulated Market Sales in 2015Area Covered by Distribution Network

    Distribution Supply

    Leading Player in Distribution and Supply

    Electrica: 40.3%

    42.4 TWh1

    Source: ANRE – latest annual report - 2015

    22%

    78%

    Electrica

    Others