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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 24.225.3
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 (<4% individually)40%
Supply market overview
Key Facts
Supply market consists of Regulated and Competitive segments:
The regulated segment comprises 5 companies, integrated
within the same group as the corresponding distribution
operators;
The competitive segment comprises 105 players in November
2016, 97 of which have less than 4% market share.
Electrica is the largest supplier overall, and on both regulated and
competitive segments.
Overall Market Share 2016
Share of Competitive Market 2016 Share of Regulated Market 2016
Source: ANRE - latest available data, for supply November 2016
42.8 TWh
Electrica Furnizare 39%
Enel36%
CEZ13%
E. ON12%
12.3 TWh
Tinmar Energy 9%
Electrica Furnizare 16%
E.On 7%
Repower 4%
Cez Vanzare 5%
Enel Energie 8%
TransenergoCom 5%
Others (<4% individually)46%
30.5 TWh
Market Overview
6.905.82 5.38 5.30
2.793.42 4.72 5.30
9.699.24
10.1010.60
2013 2014 2015 2016
Regulated Competitive
Source: Company data.
Volume of Electricity Supplied on Retail Market(TWh)
Number of ConsumersConsumers (‘000’s)
3,532 3,517 3,520 3,350
34 74 90250
3,566 3,591 3,610 3,600
2013 2014 2015 2016
Competitive Regulated
Supply business overview
ConsumersConsumers 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 DistributieDobrogea, 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
SudMarket
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
46.2 TWh
12%
14%
15%
59%
SDMN
SDTS
SDTN
Others238,391 km2
38%
38%
12%
12% Electrica
Enel
E.On
CEZ14.1 TWh
Electrica: 41%
Electrica Overview
Summary Consolidated Financials
Capital Structure: Net Cash PositionNet Debt3/(Cash) (RON mn)
Net ProfitNet Profit (RON mn)
RevenuesRevenues (RON mn)
Adjusted EBITDA1 Growth and Margin PerformanceEBITDA (RON mn) and EBITDA Margin (%)
Source: Company data.
1. Group EBITDA adjusted for non-recurring events (i) consolidated impairment/ reversal of impairment of trade and other receivables, net and (ii) consolidated write down/reversal of write down
of inventories, net.
2. NP Related to Equity Accounted Investments relates to the shareholdings that Electrica spun off in April 2014
3. Net debt is calculated as bank borrowings + bank overdrafts + financial leases + Financing of PP&E - Cash and cash equivalents - bank deposits - T-bills and government bonds
4,969 4,7715,156 5,117
414 273347 401
5,383 5,0445,503 5,518
2013 2014 2015 2016
Revenues from Green Certificates Revenues (ex-Green Certificates)
(298)
(2,551) (2,534) (2,366)
2013 2014 2015 2016
213
413482 46963
5%
8% 9% 8%
2013 2014 2015 2016
NP Related to Equity Accounted Investments-(2) NP Group NI Margin
602
884 925 998
11%
18% 17%18%
2013 2014 2015 2016
Group Strategy
Market Overview
Electrica Overview
Group Strategy
Corporate Governance
Electrica Group Strategy
VisionElectrica’s vision is to expand the Group’s leading position in the electricity distribution and supply
market segments, both nationally and regionally.
MissionThe mission of the Group is to deliver long term value to the shareholders by distributing and supplying
electricity and providing exceptional services to the customers in a safe, reliable, affordable and
sustainable manner.
Values
The values exercised across all structures of the Group are presented in the figure below. Electrica Group has
set these values as the guiding principles for fulfilling its corporate goals and for communicating them to internal
and external stakeholders. They reflect the Group’s commitment towards an internal environment where
integrity and ethics are the building blocks of the organizational culture, based on open and honest
communication.
Corporate values
Commitment and focus towards
customers
Professional and proficient approach
Transparency and integrity
Team spiritDynamism and flexibility
Commitment towards labour
safety
Robust growth while demonstrating
environmental and corporate social
responsibility
To continue succeeding in the long term and to be aligned to the best practices, Electrica has set its Vision, Mission and Values
with respect to the Group which serve as a foundation for formulating and implementing its corporate goals, objectives and
business strategy.
Electrica Group Strategy (cont’d)
Major strategic
themes
• Operational excellence for efficiency and quality;
• Ensuring a committed and qualified workforce;
• The highest standards in corporate governance.
Corporate Strategic
Directions
• To preserve and enlarge the electricity distribution and supply segments in Romania which are the
most attractive and where the Group has a competitive advantage in the market, by looking for other
investment opportunities in Romania.
• To explore potential opportunities to expand the distribution and supply segments in the region.
These must be consistent with the regulated business profile and strict financial investment criteria and an
appropriate regulatory and legal framework should be available in these countries.
• To enlarge the portfolio of the business, by developing “value-added services” related to distribution
and supply activities, which can be offered to customers.
• Divest the unprofitable business segments or activities.
Strategic Goals
Electrica’s overriding goal with respect to the Group’s is to create a sustainable long term return on investment
for our shareholders.
To reach this overriding goal, Electrica has set the following strategic goals with respect to the Group:
Overall financial performance of the Group
Excellence in financial processes management
Overall operational performance of the Group
Quality of services provided
Employees’ productivity and support of their development
Implementation by the subsidiaries of the distribution segment investment programme
Corporate Governance and enhancement of our sustainability profile
Corporate Governance
Market Overview
Electrica Overview
Group Strategy
Corporate Governance
Current Structure of the Board of Directors and its Committees
Board of
Directors
-
Structure
Board of
Directors
-
Committees
All board members are non-executive, four of whom are independent and are elected in accordance with the Articles of
Incorporation.
On December 14th, 2015 a new seven-member Board of Directors is elected by the GMS through cumulative voting method
for a 4-year mandate.
On October 21st, 2016 OGMS appointed Mr. Willem Schoeber as an independent member of the Board of Directors
following the vacancy of a position in the Board of Directors of Electrica.
On January 27th, 2017 Mr. Cristian Busu was reappointed Chairman of the Board for a one-year mandate.
Audit and Risk Committee (AR), comprising three non-executive members, having relevant financial experience -
supervises the financial reporting process, the efficiency of the internal control, audit and risk management systems.
Nomination and Remuneration Committee (NR), comprising three non-executive directors - defines selection criteria for
new members, makes proposals for new members and recommends the remuneration policy for nominated directors,
managers and key personnel.
Strategy and Corporate Governance Committee (SCG), comprising three non-executive directors, one of them being the
Chairman of the Board - provides guidelines for the strategy and corporate governance and supervises the implementation.
Board of
Directors
-
Composition
Cristian Busu – Chairman
Arielle Malard de Rothschild
Corina Popescu
Ioana Dragan
Willem Schoeber – Chair of the Strategy and Corporate Governance Committee
Pedro Mielgo Alvarez – Chair of the Audit and Risk Committee
Bogdan Iliescu – Chair of the Nomination and Remuneration Committee
The Board of Directors appointed the following executive managers for a mandate of four years:
• Mr. Dan Catalin Stancu – Chief Executive Officer (starting October 24th, 2016)
• Ms. Iuliana Andronache – Chief Financial Officer (starting October 27th, 2015)
• Ms. Alexandra Borislavschi – Executive Manager of Strategy and Corporate Governance Division (starting August 4th,
2015)
• Ms. Livioara Sujdea – Chief Distribution Officer (starting February 1st, 2017)
• Mr. Dan Crisfalusi – IT & Telecom Officer (starting March 6th, 2017)
• Ms. Gabriela Marin – Human Resources Division (starting August 4th, 2015 revoked starting as of October 5th, 2016)
• Mr. Ramiro Angelescu – Sales Coordination Division (starting August 4th, 2015 revoked starting as of January 27th, 2017)
Executive
Management
Shareholder Structure
Shareholder Structure as of February 15th 2017
100%
Romanian State
Before the IPO
Source: Central Depositary.
Total Shares: [168,751,185] Total Shares: [345,939,929]
Free float is 51.2% after the IPO, with the Romanian State retaining the rest.
48.78%
8.66%
4.80%
32.86%
4.90%
Romanian State
EBRD
BNY MELLON DRS - London Stock Exchange
Legal Person Shareholders
Individual Shareholders
Source: BSE, LSE
Market Evolution on BSE and LSE
Monthly trading volume and average monthly closing price of
shares on BSE (in RON) and GDRs on LSE (in USD)
Market Capitalization RON 4.843 bn. (as of Mar 16th, 2017) IPO price RON 11, USD 13.66
Total Shares 345,939,929 Closing price on first day on BSE RON 11.25
Free float 51.2% after the IPO Closing price on first day on LSE USD 13.80
Dividends from 2014 net profit RON 0.7217/share; Total – RON 250 mn Highest closing price on BSE RON 14.24 (23 Feb 2017)
Dividends from 2015 net profit RON 0.8600/share; Total - RON 292 mn Highest closing price on LSE USD 15.30 (19 Sep 2014)
Total liquidity since IPO on BSE RON 1.75 bn Lowest closing price on BSE RON 10.72 (11 Jul 2014)
Total liquidity since IPO on LSE USD 155 mn Lowest closing price on LSE USD 10.70 (27 Jan 2016)
BSE’s top liquidity position 6th (last 12 months, based on trading value) Last price on BSE RON 13.64 (14 Nov 2016)
Total yield since IPO on BSE 41.7%: 27.3% from share price, 14.4% from dividends Last price on LSE USD 13.20 (14 Nov 2016)
10.000
10.5000
11.000
11.5000
12.000
12.5000
13.000
13.5000
14.000
14.5000
15.000
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
BSE - Shares - Monthly volume LSE - GDRs - Monthly volume
BSE - Shares - Average monthly closing price (RON) LSE - GDRs - Average monthly closing price (USD)
Source: Company data; BSE
Comparative evolution with BSE indices
70
80
90
100
110
120
130
EL (BSE) Performance BET Performance BET-FI Performance
BET-NG Performance BET-XT Performance ELSA (LSE) Performance
%
