Fourth-quarter 2010 presentation to analysts · 2013-12-05 · Fourth-quarter 2010 presentation to...
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Fourth-quarter 2010 presentation to analysts Hafslund ASA 2 February 2011 Christian Berg, CEO
Transcript of Fourth-quarter 2010 presentation to analysts · 2013-12-05 · Fourth-quarter 2010 presentation to...
Fourth-quarter 2010 presentation to analysts
Hafslund ASA
2 February 2011
Christian Berg, CEO
s.2
Highlights ─ fourth quarter 2010 (excluding REC profit effect)
• Challenging power market conditions.
• EBITDA: NOK 850 million before gain on the sale of the Group’s fiber optic network business, up NOK 286 million
from 4Q 2009.
• Hafslund Fibernett sold — sales price: NOK 1 477 million. Gain on sale: NOK 875 million. Settlement received in
January 2011.
• Weak European market for wood pellets fuel leads to NOK 300 million facility write-down.
• Working capital: up NOK 1 822 million (4Q 2009: NOK 784 million) due to high power consumption and electric power
prices.
• Board of Directors will propose payment of a per-share dividend of NOK 2.50 for the 2010 accounting year (2009
dividend: NOK 2.25).
• The Board will assess further dividend capacity ahead of Hafslund’s 2011 annual shareholders’ meeting.
s.3
EBITDA ─ fourth quarter 2010 (excluding REC)
119
86
246
93
252
NOK million
600
500
400
300
200
1 800
1 700
100
0EBITDA
1 725
Other ActivitiesVenture
930
Power SalesNetworkDistrict HeatingHydropower
s.4
EBITDA: change from Q4 2009 (excluding REC)
101
356935
97
564
Q4 10
1 725
Other ActivitiesVenture
961
Power SalesNetworkDistrictHeating
HydropowerQ4 09
NOK million
s.5
Greater cash flow from operations
* EBITDA = rolling 12-month EBITDA excluding financial asset value changes (in NOK million).** Power prices for Hafslund Hydropower – rolling 12 month
2 806
2 625
2 468
2 2182 1162 1302 116
2 0002 033
0
500
1 000
1 500
2 000
2 500
3 000
0
10
20
30
40
50
øre/kWhMNOK
+38%
Q4 10
39
Q3 10
35
Q2 10
32
Q1 10
30
Q4 09
27
Q3 09
30
Q2 09
34
Q1 09
31
Q4 08
30
EBITDA development12-month rolling EBITDA vs. wholesale power prices
Power prices – rolling 12-month average**EBITDA*
• Cash flow from operations up 38 percent over the past two years due to factors such as:
• Increased power prices: NOK 240 million.
• Higher cash flow at Network: NOK 209 million.
• Power Sales earnings growth: NOK 130 million.
• EBITDA sensitivity: a NOK 0.10 per kWh change in wholesale power prices results in an approximately NOK 340 million change in EBITDA.
• Gradual profit improvement at Network (power distribution grid) business.
s.6
Interest-bearing debt: up NOK 2.0 billion in Q4 2010
3
4
5
6
7
8
9
10
11
12
13
14
0
10
20
30
40
50
60
Equity ratioNOK billion
Q4 10
13.1
35
Q3 10
11.1
35
Q2 10
11.3
33
Q1 10
11.9
34
Q4 09
11.6
38
Equity ratioNet interest-bearing debt
Net interest-bearing debt and equity ratio Change in interest-bearing debt in 4Q 10
Amounts in NOK million
Net interest-bearing debt 30 September 2010 -11 074
EBITDA 1 725
Interest paid -125
Tax paid -142
Change in market value of financial instruments -1 000
Change in working capital -2 054
Investments -468
Net loan portfolio adjustments 71
Net interest-bearing debt 31 December 2010 -13 067
•s.7
Working capital requirements- seasonal variation
• Seasonal variations in working capital depending on sold volume and power prices.
• A normal peak in Q1 and Q4 due to level of sold volume.
• Working capital variations within a range of NOK 2,1 billion last 12 months.
- 200
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
2 200
0
10
20
30
40
50
60
70
80
90
100
Euro/MWhNOK million
dec.10oct.10jun.09 aug.10jun.10apr.10feb.10dec.09aug.09 oct.09
0
1 500
3 000
4 500
6 000
GWh
Q4 10
4 746
Q3 10
2 292
Q2 10
2 947
Q1 10
5 001
Q4 09
4 105
Q3 09
2 162
Q2 09
2 602
Q1 09
4 369
Working capital and power prices
Power sales - sold volume
Average power pricesWorking capital
s.8
Capital employed and return on capital employed (ROCE) as of 31 December 2010 (excluding REC)
* 12-month return on capital employed (ROCE) excluding sale of Fibernett and the BioWood Norway write-down.
2010
11.5%
2009
6.0%
2008
6.0%
2.5 %
9.0 %*
40%
4%
19%
Other activities
1%Venture
4%
Power sales14%
Network
Heat and bioenergy
District heating
Hydropower
18%
Capital employed Return on capital employed (ROCE)
s.9
Hydropower
972
791
0
100
200
300
400
0
200
400
600
800
1 000
1 200
Q3 10
303
Q2 10
240
Q1 10
178
Q4 09
154
Q3 09
186
Q2 09
219
Q1 09
102
Q4 08
231
Q4 10
252
kvartal 12 måneder
EBITDA rolling 12-monthEBITDA per quarter
• Profit and operating revenue growth reflect higher power prices than in 4Q 2009.
• Production on a par with the average for the fourth quarter despite 58 GWh lower production in December 2010.
• Nord Pool Spot (NO1) wholesale/spot price: NOK 0.5 per kWh vs. 4Q 2009: NOK 0.296 per kWh.
• New FKF 4 generator scheduled for completion in spring 2011 will increase Hydropower capacity by 100 GWh.
• Projected 1Q 2011 generation: Approximately 410 GWh; about 160 GWh, or 28 percent below normal for 1Q.
NOK million Q4 10 Q4 09 2010 2009
Operating revenue 315 202 1 196 856
EBITDA 252 154 972 661
Operating profit 241 144 929 618
Sales price (øre/kWh) 43.6 28.1 39.1 27.5
Production volume (GWh) 702 683 3041 3018
Investments 36 37 161 165
s.10
Hydropower production profile
150 146
260
347
295
329 340
292
220 217
247
175
0
50
100
150
200
250
300
350
GWh
DecNovoctSep
313
Aug
342
Jul
335
Jun
333
May
286
Apr
210
Mar
142
Feb
156
Jan
221 214
174
314
Normal20102009
*Normal annual production = 3,000 GWh based on 10-year average of production adjusted for capacity improvements.
s.11
District Heating
283
226
- 50
0
50
100
150
200
0
50
100
150
200
250
300
EBITDA per quarter EBITDA rolling 12-month
Q3 10
6
Q2 10
32
Q1 10
152
Q4 09
58
Q3 09
-11
Q2 09
25
Q1 09
140
Q4 08
92
Q4 10
93
EBITDA rolling 12-month EBITDA per quarter
• Revenue growth reflects higher power prices and increased demand.
• 4Q is a seasonally strong quarter: deliveries are about 35 percent of annual production.
• Lower per kWh contribution margin due to high production costs, despite higher power prices.
• New delivery contracts signed in 2010: 128 GWh annual energy outtake.
NOK million Q4 10 Q4 09 2010 2009
Operating revenue 462 245 1 144 747
EBITDA 93 58 283 213
Operating profit 62 31 165 91
Gross margin (øre/kWh) 26.7 30.2 33.6 33.0
Production volume (GWh) 694 512 1 782 1 382
Investments 210 91 432 397
s.12
District Heating — energy sources and unit cost
Biooil and biodiesel
Ratio Electricity and renewable energy sources rolling 12
Waste and biomasse
Heatpumps
Electricity
Oil and naturalgas
0
100
200
300
400
500
600
700
800
0
10
20
30
40
50
60
70
80
90
%GWh
Q4 10
694
Q3 10
134
Q2 10
234
Q1 10
720
Q4 09
512
• Production costs depend on energy input source and price.
• Electricity and renewable energy source usage: 74 % in 2010 and 79 % in 4Q 2010.
• Production costs rose NOK 0.202 per kWh from 4Q 2009.
• Bio-oil and bio-diesel fuels: significant use in 4Q 2010.
Energy prices (øre/kWh) Q4 09 Q1 10 Q2 10 Q3 10 Q4 10
Oil/natural gas 49.0 45.5 43.0 57.5 53.0
Electricity 36.6 52.7 48.4 57.9 60.7
Biooil and biodiesel 0.0 0.0 0.0 0.0 77.0
Heat pumps 13.1 20.7 15.0 11.5 21.5
Waste & biofuel 17.4 17.1 17.5 18.9 18.2
Total production cost 28.2 38.4 25.5 25.0 48.4
District Heating incl. Distribution 58.4 73.0 64.8 65.9 75.1
Gross contribution margin 30.2 34.6 39.3 40.9 26.7
s.13
District Heating ─ production profile
204 210
167
96
61
30 29 32 37
134 144
236
0
50
100
150
200
250
300
350
GWh
DesNovOktSep
67
Aug
37
Jul
30
Jun
45
Mai
73
Apr
116
Mar
190
Feb
250
Jan
280
130
228
336
Normal*20102009
* Normal = projected 2010 production, given normal temperatures (10-year average) and current and planned customer tie-ins to the grid.
s.14
Network
1 077
868
0
50
100
150
200
250
300
350
0
200
400
600
800
1 000
1 200
EBITDA per quarter EBITDA rolling 12 months
Q3 10
282
Q2 10
275
Q1 10
274
Q4 09
314
Q3 09
243
Q2 09
247
Q1 09
231
Q4 08
231
Q4 10
246
EBITDA rolling 12 monthsEBITDA
• Regulatory income ceiling after grid losses for 2010: NOK 2 287 million, up NOK 181 million from 2009.
• Profit for the year charged with “under income” of NOK 203 million (NOK 16 million).
• Profit for the year: up 8 percent.
• Stable operations despite high loads.
• Profit projection for 2011 on a par with 2010, based on income framework notification from regulatory body NVE, planned maintenance, and anticipated interest rate.
NOK million Q4 10 Q4 09 2010 2009
Operating revenue 1 344 1 008 4 804 3 385
EBITDA 246 314 1 077 1 035
Operating profit 109 179 532 493
Investments 164 200 485 521
s.15
Power Sales
360
224
0
50
100
150
200
0
100
200
300
400
EBITDA per quarter EBITDA rolling 12 months
Q3 10
34
Q2 10
187
Q1 10
52
Q4 09
51
Q3 09
22
Q2 09
45
Q1 09
130
Q4 08
109
Q4 10
86
EBITDA rolling 12 monthsEBITDA
• Revenue growth reflects increased prices for wholesale (spot) power contracts traded via Nord Pool Spot and strong demand.
• Challenging market conditions.
• Satisfactory profit performance in a seasonally strong quarter.
• Customer-base: some 951 000 customers in wholly or partly owned power sales companies.
• Steep increase in working capital in 4Q 2010: up NOK 1.6 billion.
• Profit after tax per cutomer on NOK 360 in 2010.
NOK million Q4 10 Q4 09 2010 2009
Operating revenues 2 888 1 378 8 021 4 787
EBITDA 86 51 360 248
Operating profit 83 49 348 240
Sold volume (GWh) 4 744 4 105 14 984 13 238
s.16
Heat and Bioenergy
Bioenergy:
• Challenging market conditions.
• Low margins responsible for NOK 300 million write-down of Hafslund’s wood pellets plant.
• Pilot operation start-up further delayed.
Heat:
• High energy production in 4Q 2010.
• Pilot operation of the Borregaardenergy recovery facility is expected to be completed in 1Q 2011.
• Challenging bulk waste market.
NOK million Q4 10 Q4 09 2010 2009
Operating revenue 33 12 115 49
EBITDA -7 -6 -51 -11
Operating profit -310 -7 -386 -27
Energy production (GWh) 77 29 246 93
Used waste (thousand tonns) 32 12 114 57
Investments 1 116 189 342
s.17
Venture
14%
44%
Renewable energi
7%AMS (metering system)
Energy efficiency and other investments
Telecom 36%
Capital employed: NOK 892 million (excluding REC investment)
• Sale of Hafslund Fibernett at a sales price of NOK 1.5 billion yielded NOK 875 million gain. Settlement received 20 January 2011.
• Portfolio value decline: NOK 47 million
• NOK 60 million in capital freed up in 4Q 2010 upon settlement of EUR 66 million sale by Fesil of its SiMetall production unit.
• REC investment: 89.0 million shares or 8.93 percent of stock — market value: NOK 1.6 billion (at NOK 17.79 per share).
NOK million Q4 10 Q4 09 2010 2009
Operating revenue 169 176 549 779
EBITDA (excl REC) 930 (31) 1 077 (61)
Operating profit (excl REC) 832 (54) 887 (162)
REC 0 (137) (1 991) (137)
s.18
Group profit and loss account (excluding REC)
NOK million Q4 10 Q4 09 ∆∆∆∆ 2010
Operating revenue 5 189 3 032 2 156 15 829
Gain/loss financial items 1 013 34 979 1 108
Operating expenses (4 477) (2 502) (1 975) (13 023)
EBITDA 1 725 564 1 160 3 914
Depreciation (590) (222) (368) (1 270)
Operating profit 1 135 342 793 2 644
Interest expences (153) (144) (9) (498)
Market value change loan portfolio 94 (82) 176 27
Financial expenses (59) (225) 166 (471)
Pre-tax profit 1 076 117 959 2 173
Tax (97) (74) (23) (589)
Profit after tax 979 43 936 1 584
Earnings per share (EPS) in NOK 5.02 0.22 4.80 8.12
s.19
Group balance sheet
NOK million 31.12.2010 30.09.2010 ∆∆∆∆ 31.12.2009
Intangible assets 2 389 2 440 (52) 2 288
Fixed assets 18 557 19 168 (611) 18 809
Financial assets 2 831 3 012 (181) 4 737
Accounts receivables and inventory 5 625 2 330 3 295 2 773
Cash and cash equivalents 211 392 (181) 311
Assets 29 613 27 343 2 270 28 918
Equity (incl. Min. int.) 10 464 9 671 794 11 154
Allocation for liabilities 2 832 3 502 (670) 3 287
Long-therm debt 11 321 11 080 242 9 805
Other currently liabilities 2 338 815 1 523 2 741
Short-term debt 2 658 2 275 382 1 931
Equity and liabilities 29 613 27 343 2 270 28 918
Net interest-bearing debt 13 067 11 074 1 993 11 601
Equity ratio 35 % 35 % 0 % 39 %
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Additional analytic information
s.22
Earnings per share (excluding REC)
3.26 1.71 8.12
2008 2009 2010
5.02
0.761.00
1.34
0.22
-0.38
0.861.01
-1.68
0.53
2.60
1.81
By quarterNOK
s.23
Group cash flow statement (excluding REC profit effect)
NOK million Q4 10 Q4 09 ∆∆∆∆ 2010
EBITDA exclisuv REC 1 725 290 1 435 3 914
Paid intrests (125) (134) 9 (536)
Paid tax (142) (94) (48) (148)
Marketvalue changes and other liquidity adjustments (1 000) 107 (1 107) (1 009)
Change in working capital, etc. (2 054) (889) (1 165) (1 656)
Total cash flow from operations (1 596) (720) (876) 565
Net operations and expansion investments (468) (499) 31 (1 647)
Sold operations - 6 (6) 5
Portfolio changes Venture, etc. 59 631 (572) 109
Cash flow from investments activities (408) 138 (546) (1 532)
Cash flow to down payments and interests (2 004) (582) (1 422) (967)
s.24
Capital structure development
0
2
4
6
8
10
12
14
0
10
20
30
40
50
11.2
Q2 09
33.1
11.3
Equity ratio %
38.1
11.6
NOK billion
Q1 10 Q3 10
40.0
34.3
10.7
35.0 35.0
Q1 09 Q3 09
40.0
11.911.110.5
40.0
Q4 09Q4 08
13.1
Q2 10 Q4 10
40.3
11.4
Equity ratio Net interest-bearing debt
s.25
Loans — portfolio data
319
700500
0
1 000
2 000
3 000
4 000
2020 20212018
1 059
20192017
860
20162015
1 909
2014
1 909
2013
1 815
2012
1 056
2011
3 333
2010
Other loansBondsCertificate loans
326
993
0
400
800
1 200
1 600
Nov
384300 300
OctSepAugJulJan
300
381
Feb AprMar May Jun
300
1 293
50
815
Dec
BondsCertificate loans Other loans
Debt maturity profileNOK million
Loans at maturity, next 12 monthsNOK million
Portfolio data
Q4 10 Q3 10 ∆∆∆∆
Bonds 40 % 46 % -6 %
Certificate loans 12 % 7 % 5 %
Other loans 48 % 47 % 1 %
Q4 10 Q3 10 ∆∆∆∆
Nominal value - market value
of loans(135) (229) 94
Market value interest rate
swaps(17) (19) 2
Average interest incl.
derivatives4.0 % 4.3 % -0.3 %
Proportion of loan portfolio
with fixed interest33 % 42 % -9 %
Loans at maturity next quarter
(NOK million)1 593 795 798
Unused drawing facilities (NOK
million)3 692 4 781 (1 089)
s.26
Power and CO2 price development
EUR/MWh
EUR/tCO2
Source: www.nasdaqomxcommodities.com (as of 6 January 2011)
135
0
15
30
45
60
75
90
105
120
135
EUR
jan.11nov.10sep.10jul.10may.10mar.10jan.10nov.09sep.09jul.09may.09mar.09jan.09nov.08
88
Nordic spotmarketCO2 2011FWD 2011FWD 2014
s.27
Hydropower — Glomma waterway flow
0
500
1 000
1 500
2 000
decnov
m3/sek.
octsepaugjuljunmayaprmarfebjan
Max. capacity utilization20092010
• 4Q 2010 production: On a par with normal for the reporting period.• Maximum capacity utilization: 940 m³/second.• Projected 1Q 2011 production: about 410 GWh (approx. 160 GWh below normal for the reporting period),
providing normal reservoir levels and precipitation.
s.28
Other Activities
NOK million Q4 10 Q4 09 2010 2009
Support (40) (31) (129) (152)
Power trading 23 14 29 (10)
Real estate 4 (41) 24 (0)
Billing and customer service 18 23 95 101
Financial derivatives, ass. comp. 64 39 102 191
Other 49 (4) 49 (53)
Operating profit other 118 0 170 77
s.29
Shareholders as of 31 December 2010
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 1 579 1 579 0.8 % 0.0 %
6 Odin Norge 1 219 1 219 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 Danske Invest Norwegian stocks 333 333 0.2 % 0.0 %
Total, 10 largest shareholders 110 686 72 777 183 463 94.0 % 95.9 %
Other shareholders 4 742 6 981 11 723 6.0 % 4.1 %
Total 115 428 79 758 195 186 100 % 100 %
s.30
Key figures
Group 2010 2009
Capital matters
Total assets 29 613 28 918
Captial employed 27 028 25 870
Equity 10 464 11 154
Market capitalization 13 603 13 534
Equity ratio 35 % 39 %
Net interest-bearing debt 13 067 11 601
Profitability excl. REC
Profit after tax 1 584 335
Earnings per share (EPS) 8.11 1.71
Cash flow per share 2.89 9.61
District Heating 2010 2009
Capital employed 4 550 4 080
Sales price (øre/kWh) 72.2 60.8
Gross margin (øre/kWh) 33.6 33.0
Sales volume (GWh) 1 782 1 382
Power Generation 2010 2009
Capital employed 4 377 4 277
Sales price (øre/kWh) 39.1 27.5
Production volume (GWh) 3 041 3 018
Network 2010 2009
Capital employed 9 668 9 396
Annual Income ceiling 2 891 2 461
NVE-capital (regulatory) 6 163 6 045
Power Sales 2010 2009
Capital employed 3 427 1 980
- of this working capital 2 148 1 350
Total volume (GWh) 14 984 13 238
Venture 2010 2009
Capital employed exl REC 892 1 505Market value REC 1 584 3 432
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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