Annual Media Conference 2021 - Alpiq

Annual Media Conference 2021

25 February 2021

Alpiq Holding Ltd. | Annual Media Conference 2021

Agenda

2

1. Alpiq reports strong results of operations

2. 2020 Key Financial Figures

3. Positive earnings expected for 2021, below the previous year

4. Alpiq focused on strengths and expanding commercialisation

5. Current situation regarding electricity agreement is dangerous for Alpiq

6. Questions and answers


Business model proves itself in COVID-19 pandemic

• EBITDA before exceptional items: CHF 262 million• Higher demand for flexible power production and higher market volatilities• New investments in Swiss large-scale hydropower currently not economical

Solid and strengthened balance sheet thanks to systematic financial strategy

• Net cash flows from operating activities increased: CHF 117 million• Sound liquidity: CHF 1 billion • Equity ratio has improved: 51.2 percent

Strategy implementation and growth phase• Stable shareholder structure, smaller Board of Directors• Alpiq is expanding energy trading and B2B business throughout Europe• Antje Kanngiesser is the Alpiq Group’s new CEO from 1 March 2021

3

Alpiq reports strong results of operations


2020 Key Financial Figures

4


Results of operations

• Strong results of operations in all three business divisions

• Operating cash flow from continuing operations increased

• Solid and strengthened balance sheet thanks to systematic financial strategy

• Positive earnings expected for 2021, below the previous year, main drivers: electricity and CO2 prices hedged on the wholesale markets but one-off effects no longer apply

Net debtEBITDA before EINet revenue before EI Earnings after tax fromcontinuing operations (IFRS)

117

-17

+134

249

206

+43

2019 2020 31 Dec 2019 31 Dec 2020

FX e

ffec

t

2020

2019

-131

Bus

ines

sde

velo

pmen

t

-105

4,059 3,823

-236

110

262157

FX e

ffec

t

2019

Bus

ines

sde

velo

pmen

t

-5

2020

+152

-226

166

395

2019

FX e

ffec

t

Bus

ines

sde

velo

pmen

t

2020

-3

+392

Operating cash flow from continuing operations (IFRS)

CH

F m

illio

n


Development of EBITDA by business division (I)

5

Generation Switzerland benefited from higher hedged electricity prices

Generation Switzerland

• Higher hedging prices compared to the previous year

• Higher production volumes in the area of nuclear power – high availability of the plants

135

29

Var

ious

109

-6Pr

oduc

tion

volu

mes

EBIT

DA

2019

befo

re E

I

Pric

e ef

fect

3

EBIT

DA

2020

befo

re E

I

CH

F m

illio

n

CHF million 2019 2020

Ø hedging price (standard product, no partner agreement) at the time of transfer in EUR/MWh 34.0 38.9

Ø hedging exchange rate at the time of transfer in EUR/CHF 1.0800 1.1581

Ø hedging price (standard product, no partner agreement) at the time of transfer in CHF/MWh 36.7 45.1


Development of EBITDA by business division (II)

6

International power production positive

9469 59

FX e

ffec

t

-8

-25

EBIT

DA

2019

befo

re E

I

Div

estm

ent

Kla

dno/

Zlín

EBIT

DA

2019

befo

re E

Iw

/o K

ladn

o/Zlín

Bus

ines

sde

velo

pmen

t

-2

EBIT

DA

2020

befo

re E

I

Generation International

• Renewable Energy Sources: lower production volumes due to weather conditions, lower energy prices and a loss of feed-in tariffs at the Italian plants

• Thermal power production: unexpected repairs required at Spanish gas-fired combined-cycle power plant. Italian plants up on previous year thanks to higher availability

CH

F m

illio

n


Development of EBITDA by business division (III)

7

Energy trading very successful thanks to market volatilities

56

99

46

EBIT

DA

2020

befo

re E

I

EBIT

DA

2019

befo

re E

I

-3Bus

ines

sde

velo

pmen

t

FX e

ffec

t

Digital & Commerce

• Market opportunities and higher volatilities in trading successfully leveraged

• Higher earnings in the optimisation of the hydropower portfolio in Switzerland and in the optimisation in Italy

• Optimised trading strategies in Merchant Trading benefit from sharply rising prices

• Further investments in (industrial and commercial) customer business

CH

F m

illio

n



8

All three business divisions made positive contributions to earnings

8

Digital & Commerce: volatilities successfully leveraged in trading

Generation International: stable result of thermal power production

Generation Switzerland: higher electricity prices

69

135

56

59

99

-62019 2020

Digital & Commerce

Generation International w/o Kladno/Zlín

Generation Switzerland

EBITDA before EI

CH

F m

illio

n


Exceptional items on EBITDA level

9

Alpiq uses alternative performance measures to measure and present its operating performance, making adjustments to the IFRS results for so-called exceptional items (EI).

CHF million 20202019

(adjusted)

Development of decommissioning and waste disposal funds 20 111

Effects from business disposals 62 -19

Impairment losses and onerous contracts -108 -48

Restructuring costs and litigation -3 -24

Fair value changes (accounting mismatch) 60 38

Total exceptional items on EBITDA level 31 58


Development of operating cash flow from continuing operations

10

Alpiq has increased net cash flows from operating activities

-17

117

-27

111

42

Net

cas

h flo

ws

from

oper

atin

g ac

tivi

ties

of c

ontinu

ing

oper

atio

ns20

19

Dev

iation

EBIT

DA b

efor

e EI

152

Exce

ptio

nal i

tem

son

EBIT

DA lev

el

Var

ious

Hig

her

liabi

litie

s fr

omde

com

mis

sion

ing

and

was

tedi

spos

al f

unds

202

0

Tran

sfer

of

the

Sw

iss

high

-vol

tage

gri

d

-20

Red

uction

in r

ecei

vabl

es f

rom

deco

mm

issi

onin

g an

d w

aste

disp

osal

fun

ds 2

019

Cha

nge

in p

rovi

sion

for

Nan

t de

Dra

nce

in 2

020

-33

Mar

ket

prem

ium

2020

del

ayed

-64

Cha

nge

in d

eriv

ativ

es20

19 –

2020

(inc

l. ga

s st

orag

e)

-3912

Net

cas

h flo

ws

from

oper

atin

g ac

tivi

ties

of c

ontinu

ing

oper

atio

ns20

20

CH

F m

illio

n


Development of liquidity

11

Reduction mainly a result of repayment of loans and refund to Bouygues

108 25

25

FX e

ffec

t

Inte

rest

pai

d

-96

Net

rep

aym

ent

ofcu

rren

t fin

anci

allia

bilit

ies

(loa

ns)

Net

cas

h flo

ws

from

inve

stin

g ac

tivi

ties

of

disc

ontinu

ed o

pera

tion

s(K

iel,

Bou

ygue

s)

13 -8

Liqu

idity

befo

re n

et c

ash

flow

sfr

om in

vest

ing

activi

ties

of

disc

ontinu

ed o

pera

tion

s

1,030-67

Liqu

idity

at31

Dec

202

0

Var

ious

Gai

ns o

n di

spos

al:

Torm

oser

öd,

Flex

itri

city

Hyb

rid

inte

rest

pai

d

1,101

Liqu

idity

at31

Dec

201

9

963

-37

-29

Ope

rating

cas

h flo

w

-72

Inve

stm

ents

Div

iden

ds a

ndin

tere

st r

ecei

ved

CH

F m

illio

n


Maturity profile at 31 December 2020

12

Financial liabilities staggered over long term

• Liquidity of CHF 963 million (31 December 2019: 1,101)

• Financial liabilities of CHF 1,212 million (31 December 2019: 1,307)

963

31 Dec 2020

293

2021 20232022 2024 20272025 2026 2028 2029

7

2030 et seq.

283334

182

4911 32 5 17

Lease financial liabilitiesLiquidity Private placementsBank loansBonds

CH

F m

illio

n


Net debt

13

Reduction of gearing ratio (net debt/EBITDA before exceptional items) due to higher results of operations

• Net debt of CHF 249 million (31 December 2019: 206)

• Net debt/EBITDA before exceptional items of 1.0 (31 December 2019: 1.9)

856714

247 206 249

609480

395301

166 110262

2.7

2.22.4

1.5

1.9

1.0

3.2

2014 20172015 2016 2018 2019 (adjusted) 2020

1,299

1,939

Net debt Net debt/EBITDA before exceptional itemsEBITDA before exceptional items

CH

F m

illio

n


Solid balance sheet

14

Solid and strengthened balance sheet thanks to systematic financial strategy

• Sound liquidity: CHF 1.0 billion(31 December 2019: CHF 1.1 billion)

• Equity ratio: 51.2 %(31 December 2019: 49.9 %)

49.9%

0.3%

62.0%

50.0%37.7% 39.7%

0.1%

60.3%

48.8%

51.2%

7,360 CHF million 7,368 Mio. CHF million

31 Dec 2019 (adjusted) 31 Dec 2020

Assets held for sale

Current assets Liabilities

Liabilities held for sale

Non-current assets Equity


• Alpiq has not distributed a dividend since 2015 due to the difficult economic situation

• Systematic management means a dividend is now possible again for the first time:

• Strong results of operations in 2020

• Solid and strengthened balance sheet thanks to divestments/debt reduction

• Focused strategy on core business and expanding commercialisation

• The Board of Directors of Alpiq Holding Ltd. will submit a proposal to the Annual General Meeting to distribute a dividend of CHF 46 million (CHF 1.40 per share) for the 2020 financial year on account of the positive earnings situation

Dividend distribution

15

Dividend distribution on account of the positive earnings situation


Outlook: Positive earnings expected for 2021, below the previous year

16

• Hedged electricity and CO2 prices on the wholesale markets will have a positive effect on earnings in 2021

• However: positive one-off effects from the 2020 financial year no longer apply

• Extended overhaul of the Leibstadt nuclear power plant will have a major impact on earnings in 2021

• It is not yet possible to fully assess the effects of the COVID-19 pandemic

CHF million 2019 2020 2021 2022

Ø hedging price (standard product, no partner agreement) at the time of transfer in EUR/MWh 34.0 38.9 46.9 51.6

Ø hedging exchange rate at the time of transfer in EUR/CHF 1.0800 1.1581 1.1420 1.0850

Ø hedging price (standard product, no partner agreement) at the time of transfer in CHF/MWh 36.7 45.1 53.6 56.0


Alpiq focused on strengths and expanding commercialisation

17


With no electricity agreement, security of supply is not guaranteed

• Energy Strategy: Switzerland depends on imports in the winter• As a third country, Switzerland relies on the goodwill of exporting countries• Main suppliers Germany and France are reducing nuclear and coal

capacities for winter electricity

18

Current situation regarding electricity agreement is dangerous for Alpiq

With no electricity agreement, there are no resources to maintain hydropower

• Hydropower is climate friendly, reliable and extremely flexible• Hydropower ideally complements wind and photovoltaics• Capital can only be earned by marketing the flexibility of hydropower in

Europe across borders


Financial calendar 2021

21

26 August 2021 Interim results 2021


This communication contains, among other things, forward-looking statements and information. Such statements include, but are not limited to, statements regarding management objectives, business profit trends, profit margins, costs, returns on equity, risk management or the competitive environment, all of which are inherently speculative in nature. Terms such as "anticipate," "assume," "aim," "goals," "projects," "intend," "plan," "believe," "try," "estimate," and variations of such terms, and similar expressions have the purpose of clarifying forward-looking statements. These statements are based on our current estimates and assumptions, and are therefore to some extent subject to risks and uncertainties. Therefore, Alpiq's actual results may differ materially from, and substantially contradict, forward-looking statements made expressly or implicitly. Factors contributing to or likely to cause such divergent outcomes include, but are not limited to, the general economic situation, competition with other companies, the effects and risks of new technologies, the Company's ongoing capital needs, financing costs, delays in integrating mergers or acquisitions, changes in operating expenses, currency fluctuations, changes in the regulatory environment on the domestic and foreign energy markets, oil price and margin fluctuations for Alpiq products, attracting and retaining qualified employees, political risks in countries where the Company operates, changes in applicable law, the realisation of synergies and other factors mentioned in this communication.Should one or more of these risks, uncertainties or other factors materialise, or should any of the underlying assumptions or expectations prove incorrect, the results may differ materially from those stated. In light of these risks, uncertainties or other factors, the reader should not rely on such forward-looking statements. The Company does not assume any obligation beyond those arising out of law to update or revise such forward-looking statements, or to adapt them to future events or developments. The Company points out that past results are not meaningful in terms of future results. It should also be noted that interim results are not necessarily indicative of the year-end results.This communication is neither an offer nor an invitation to sell or buy securities.

Disclaimer

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Annual Media Conference 2021 - Alpiq

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