Annual Media Conference 2020 - Think energy. …...Alpiq Holding Ltd. | Annual Media Conference 2020 Agenda 2 1. Alpiq strong in the international business 2. 2019 Key Financial Figures

Annual Media Conference 2020

Olten, 2 March 2020

Alpiq Holding Ltd. | Annual Media Conference 2020

Agenda

2

1. Alpiq strong in the international business

2. 2019 Key Financial Figures

3. Alpiq benefits from increased prices in 2020

4. Alpiq is part of a climate-friendly energy future

5. Questions and answers


Alpiq ready for the next step• CSA Energy Infrastructure Switzerland invests in Alpiq• André Schnidrig elected as new CEO• Earnings expected to recover in 2020

Alpiq strong in the international business

3

Solid balance sheet thanks to systematic financial strategy• Net debt reduced to CHF 206 million• Sound liquidity at CHF 1.1 billion• Equity ratio increased to 49.8 %

EBITDA before EI of CHF 106 million, as expected,down on the previous year• Good year for new renewable energies in Europe and international energy trading• Phase-out of coal negatively impacts business figures for 2019• Despite market premium, Swiss hydropower operating at a loss


Results of operations

• As announced, EBITDA before exceptional items down on the previous year. Generation International negatively impacted by phase-out of coal, partly compensated for by excellent results in the ancillary services market in Italy

• IFRS earnings negatively impacted by impairment of coal-fired power plants

• Operating cash flow down on the previous year as a result of investments in net working capital

• Reduction of net debt compared to the end of 2018

2019 Key Financial Figures

4

Phase-out of coal influences business figures for 2019

Net debt (IFRS)EBITDA before EINet revenue before EI Earnings after taxfrom continuing operations (IFRS)

Operating cash flow from continuing operations (IFRS)

7

-17

-24

206

247

-41

2018 2019 31 Dec 2018 31 Dec 20192018

5,240

-1,038

4,080

Bus

ines

sde

velo

pmen

t

2019

-122

FX e

ffec

t

-1,160

166106

2018

2019

-53

FX e

ffec

t

Bus

ines

sde

velo

pmen

t

-7

-60

-261 -226

Bus

ines

sde

velo

pmen

t

35

2019

2018

0

FX e

ffec

t

+35

CH

F m

illio

n


Hedging transactions from previous years with time-delayed effect

5

Alpiq hedges energy and currency in advance on a rolling two-to three-year basis on average

0.9

1

1.1

1.2

1.3

2014 2015 2016 2017 2018 201920

40

60

80

2014 2015 2016 2017 2018 2019

Cal-17 CH Base Cal-18 CH Base Cal-19 CH Base

Average spot prices

EUR/C

HF

Average forward prices with hedge level–CH

EUR/M

Wh

Time lapse of wholesale price effect causes lower earnings in 2019

Average hedging price 2017: EUR 44/MWh2018: EUR 38/MWh2019: EUR 34/MWh

Currency effect with marginal impact compared to the previous year

Average hedging rate 2017: EUR 1.04/CHF2018: EUR 1.06/CHF2019: EUR 1.08/CHF

Average hedging rateAverage hedging price


Generation Switzerland

• Alpiq systematically hedges production in the market against price and currency fluctuations

• Positive volume effect primarily attributable to unscheduled maintenance work at Leibstadt nuclear power plant in the previous year

• Despite higher market premium, hydropower operating at a loss

Development of EBITDA by business division (I)

6

Despite market premium, climate-friendly Swiss hydropower still operating at a loss

-38-26

-410

EBIT

DA

2018

befo

re E

I

Pric

e ef

fect

Prod

uction

volu

mes

6

Var

ious

(inc

l. m

arke

t pr

emiu

m)

EBIT

DA

2019

befo

re E

I

CH

F m

illio

n


Generation International

• Thermal production down on previous year on account of the strategic sale of the two coal-fired power plants

• New renewable energies slightly lower than in the previous year, mainly due to lower availability and lower prices in Italy

Development of EBITDA by business division (II)

7

International power production makes biggest contribution

156

88

-4

-64

5548

EBIT

DA

2018

befo

re E

I

FX e

ffec

t

-4

Bus

ines

sde

velo

pmen

t

-3

EBIT

DA

2019

befo

re E

I

Digital & Commerce

• Excellent results in the ancillary services market in Italy

• Positive development in Eastern Europe

• Alpiq invests in digital technologies and innovations

CH

F m

illio

nCH

F m

illio

n


Development of EBITDA before EI after phase-out of coal

8

Alpiq has substantially reduced its CO2 emissions by phasing out coal

166106

51 26

11580

2019

vs.

2018

2019

Alp

iq G

roup

2019

Alp

iq G

roup

w/o

Coa

l-fir

edpo

wer

pla

nts

2018

Alp

iq G

roup

-60

2019

vs.

2018

2018

Alp

iq G

roup

w/o

Coa

l-fir

edpo

wer

pla

nts

-25

2018

Coa

l-fir

edpo

wer

pla

nts

2019

Coa

l-fir

edpo

wer

pla

nts

-35

2019

vs.

2018

15688

51 26

10562

2019

vs.

2018

2018

Gen

Int

2019

vs.

2018

2019

Gen

Int

-6820

18Coa

l-fir

edpo

wer

pla

nts

2019

Coa

l-fir

edpo

wer

pla

nts

-25

2018

Gen

Int

w/o

Coa

l-fir

edpo

wer

pla

nts

-43

2019

vs.

2018

2019

Gen

Int

w/o

Coa

l-fir

edpo

wer

pla

nts

Alpiq Group


CH

F m

illio

nCH

F m

illio

n


Alpiq generates solid operating annual results as expected

9

International production: again makes biggest contribution to the Alpiq Group’s results of operations, but negatively impacted by phase-out of coal

Digital & Commerce: encouraging course of business

Swiss production: still operating at a loss, but above previous year

55 48

156

88

-38 -26

2018 2019


Generation Switzerland

Digital & Commerce

Alpiq strong in the international business, but negatively impacted by phase-out of coal

EBITDA before EI

CH

F m

illio

n


Exceptional items on EBITDA level

10

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 2019 2018

Development of decommissioning and waste disposal funds 111 -96

Effects from business disposals -19 0

Impairment losses and onerous contracts -48 19

Restructuring costs and litigation -20 -16

Fair value changes (accounting mismatch) 38 -64

Total exceptional items on EBITDA level 62 -157


Development of earnings after taxfrom continuing operations (IFRS)

11

Phase-out of coal impacts result

-261 -226

-60

-263

-90

207

Exce

ptio

nal i

tem

:Im

pair

men

t

Del

ta a

t EB

ITD

A lev

elbe

fore

EI

Exce

ptio

nal i

tem

:D

evel

opm

ent

ofde

com

mis

sion

ing

and

was

tedi

spos

al f

unds

201

8-20

19

Exce

ptio

nal i

tem

:Fa

ir-V

alue

-Cha

nges

2018

-201

9

Earn

ings

aft

er t

axfr

om c

ontinu

ing

oper

atio

ns20

18 (

IFRS)

Dep

reci

atio

nbe

fore

EI

28

102

Var

ious

exc

eption

al it

ems

2018

-201

9

42

Fina

ncia

l res

ult

(IFR

S)

66

Inco

me

tax

(IFR

S)

3

Var

ious

Earn

ings

aft

er t

axfr

om c

ontinu

ing

oper

atio

ns20

19 (

IFRS)

+35

CH

F m

illio

n


Development of operating cash flow

12

Operating cash flow negatively impacted by development of decommissioning and waste disposal funds in 2019

106

168

-17

62

17

Taxe

s pa

id

EBIT

DA (

IFRS)

2019

-85

EBIT

DA

2019

bef

ore

EI

Cha

nge

inac

crua

ls/p

rovi

sion

s

Exce

ptio

nal i

tem

s-111

Dev

elop

men

t of

deco

mm

issi

onin

g an

dw

aste

dis

posa

l fun

dsin

201

9

Cha

nge

in N

WC D

&C

-12 6

Var

ious

Ope

rating

cas

h flo

wfr

om c

ontinu

ing

oper

atio

ns20

19

CH

F m

illio

n


Development of liquidity

13

265

Liqu

idity

at31

Dec

201

8

1,255

Inve

stm

ents

FX e

ffec

t

Ope

rating

cas

h flo

wfr

om c

ontinu

ing

oper

atio

ns

-75

Inte

rest

pai

din

cl. hy

brid

inte

rest

-213

Rep

aym

ent

ofbo

nds

and

loan

s

-30 7

Cas

h flo

w fro

mdi

scon

tinu

ed o

pera

tion

s

Var

ious

-18

1,101

Liqu

idity

at31

Dec

201

9

-17

Proc

eeds

fro

m d

ives

tmen

t:Sal

e of

coa

l-fir

ed p

ower

pla

nts

-73

Liquidity still sound after repayment of debts

CH

F m

illio

n


Development of net debt

14

-247-206

-17

-73

-75

-30-25

Net

deb

t at

31 D

ec 2

018

Proc

eeds

fro

m d

ives

tmen

t:Sal

e of

coa

l-fir

edpo

wer

pla

nts

Ope

rating

cash

flo

w

Inve

stm

ents

Leas

e lia

bilit

ies

addi

tion

ally

rec

ogni

sed

base

d on

the

initia

lap

plic

atio

n of

IFR

S 1

6

265

Cas

h flo

w fro

mdi

scon

tinu

ed o

pera

tion

s

Inte

rest

pai

din

cl. hy

brid

inte

rest

-4

FX e

ffec

t&

var

ious

Net

deb

t at

31 D

ec 2

019

Further reduction in net debt from phase-out of coal

CH

F m

illio

n


Maturity profile at 31 December 2019

15

Financial liabilities staggered over long term

• Sound liquidity of CHF 1,101 million

• Financial liabilities of CHF 1,307 million

2024

1,101

115

2023

292

202231.12.2019 202520212020

334

2026 2027 2028 2029ff

275182

4911 7 32 12

Liquidity Bonds Lease liabilitiesPrivate placementsBank loans

CH

F m

illio

n


Net debt

16

Sound net debt/EBITDA thanks to systematically implementing the financial strategy

• Net debt further reduced by CHF 41 million to CHF 206 million

• Net debt/EBITDA before exceptional items of 1.9

856714

247 206

796

609480

395301

166 106

2.7

2.22.4

1.5

1.9

2014 2017 2018

2.6

20152013

3.2

2016 2019

2,0501,939

1,299

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

CH

F m

illio

n


Sound balance sheet

17

Sound balance sheet thanks to a systematic financial strategy

• Sound Liquidity:CHF 1.10 billion (31 Dec 2018: CHF 1.25 billion)

• Equity ratio increased:49.8% (31 Dec 2018: 43.5%)

43.5%

0.1%

37.7%

0.3%39.7%

60.3%

56.5%

62.1%

50.1%

49.8%

CHF 9,074 million CHF 7,369 million

31 Dec 2018 31 Dec 2019

Assets held for sale

Current assets Liabilities

Liabilities held for sale

Non-current assets Equity


Overview legal cases

18

Arbitration claim with Bouygues Construction:

• In the request filed for arbitration claim, Bouygues Construction has increased the amount it is demanding from CHF 205.1 million to around CHF 319 million plus interest

• Ruling by arbitration court expected during 2022

• Alpiq continues to contest both in terms of its amount and on its merits

Administrative order imposing a fine from German Federal Cartel Office:

• Outcome of proceedings and any fines are currently unknown

• Alpiq deems conviction unlikely

Tax audit in Romania:

• ANAF’s tax assessment of RON 589 million (CHF 134 million) is not enforceable until a first-instance court decision has been reached

• Bank guarantee and pledged bank account rescinded on 14 February 2019

• Alpiq continues to deem it unlikely that this assessment will result in a negative outcome for the company and has therefore decided not to record a liability for the tax assessment


Alpiq benefits from increased prices in 2020

19

Rising prices have a time-delayed positive effect on earnings

Wholesale prices

• Wholesale prices increased and stabilised• Average hedging price: 2019: EUR 34/MWh

2020: EUR 39/MWh2021: EUR 47/MWh

CO2 prices

• Tripled in 2018• Volatile, sideways movement in 2019

EUR/CHF exchange rate

• Delayed positive currency effect• Average hedging rate: 2019: EUR 1.08/CHF

2020: EUR 1.16/CHF2021: EUR 1.14/CHF

25

30

35

40

45

50

55

60

2018 2019 2020CH Base Cal-20 CH Base Cal-21 CH Base Cal-22

EUR/C

HF

EUR/t

EUA Price (CO2)

FX EUR/CHF

EUR/M

Wh

CH Power Price (1.1.2018 – 28.2.2020)

0

5

10

15

20

25

30

35

2018 2019 2020EUA Cal-20 EUA Cal-21 EUA Cal-22

1

1.05

1.1

1.15

1.2

1.25

2018 2019 2020EUR/CHF Cal-20 EUR/CHF Cal-21 EUR/CHF Cal-22


Decarbonisation leads to higher electricity consumption• European Green Deal: 50 % CO2 reduction by 2030, 100 % climate neutral

by 2050• Second electrification: fossil fuels to be electrified and replaced

by climate-neutral fuels• Investments in fossil fuels becoming a risk, money being directed

into renewable energies

Supply security needs flexible, controllable power plants• National economy must be supplied with electricity with no interruptions• Building additional wind/photovoltaic plants weakens stability of the grid• Phase-out of coal and nuclear power raises import risk in winter

Energy transition and supply security pose a challenge

20


Alpiq is part of a climate-friendly energy future

21


Financial calendar 2020

22

Interim results 202024 August 2020

Annual General Meeting of Alpiq Holding Ltd. in Lausanne24 June 2020

You ask. We answer.


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

24Bilanzmedienkonferenz 2019

Documents

Annual Media Conference 2020 - Think energy. …...Alpiq Holding Ltd. | Annual Media Conference 2020 Agenda 2 1. Alpiq strong in the international business 2. 2019 Key Financial Figures