1Q 2022 Consolidated Results Presentation
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Terna reported its consolidated results for the first quarter of 2022. Revenues increased 5% to €644 million driven by growth in regulated transmission activities. EBITDA rose 3% to €461 million. Capex was up 21% to €293 million as Terna accelerates investments to support energy transition goals. Net debt declined to €8.7 billion due to positive operating cash flow covering investment needs. Management reconfirmed targets for 2022 with regulated revenue and EBITDA expected to increase compared to 2021.
1Q 2022 Consolidated Results Presentation
- 1. 1Q 2022 Consolidated Results Rome, May 11th 2022
- 2. 7 Annexes 17 1Q 2022 Results 3 Highlights Agenda 2
- 3. Highlights 3
- 4. Highlights 4 Latest main achievements Focus on execution 2021-2025 Industrial Plan Update Green hybrid bond Rating affirmation Latam valorization process
- 5. Highlights 5 Demand Evolution ¨C Last 12 months DEMAND AS REPORTED (TWh) ? National Demand at 80 TWh, o/w ~29% covered by RES ? Net Total Production at 71 TWh, o/w ~33% covered by RES 1Q 2022 Note: 2020 final figures, 2021 and 2022 preliminary figures Full recovery of electricity consumption ¦¤ % 2.6% 1Q22 1Q21 80.3 78.3 23.9 24.4 27.2 30.4 26.6 27.0 26.4 26.4 27.4 27.5 25.5 27.3 18 20 22 24 26 28 30 32 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Monthly energy demand Previous Year Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 21.8% 7.8% 13.4% 5.9% 3.4% 2.5% 1.5% 3.8% 5.9% 1.5% 2.8% 3.5% YoY Chg% 1Q 2022 TWh
- 6. Highlights 6 1Q 2022 Key Numbers Reconfirmed capex acceleration 1. Attributable to Terna Revenues +5% EBITDA +3% Group Net Income1 +1% Capex +21% Net Debt 10,003 622 454 190 242 8,683 644 461 192 293 Restated €mn Actual €mn 1Q 2021 1Q 2022 ? vs 1Q 2021 restated Actual €mn 616 448 190 242 FY 2021 1Q 2022
- 8. 537 562 79 82 0.2 0.0 616 25 4 -0.2 644 1Q21 ? Regulated Activities ? Non Regulated Activities ? International Activities 1Q22 1Q 2022 Results 8 Revenues Note: figures may not add up due to rounding 1. Including IFRIC12 Revenues increase driven by Regulated Activities Regulated Activities1 Non Regulated Act. International Act. €mn +29 +4.7% 1
- 9. 1Q 2022 Results 9 Revenues Analysis Note: figures may not add up due to rounding Regulated investments as growth driver €mn REGULATED €mn NON REGULATED AND INTERNATIONAL +25 +4.7% +3 +4.3% Non Regulated Act. International Act. 526 543 4 18 5 3 9 7 10 537 562 1Q21 ? Transmission & Dispatching ? Other ? IFRIC12 1Q22 Transmission & Dispatching Other IFRIC12 79 82 0.2 0.0 79 4 -0.2 82 1Q21 ? Non Regulated Activities ? International Activities 1Q22
- 10. 1Q 2022 Results 10 Opex Note: figures may not add up due to rounding 1. Including IFRIC12 Operating costs evolution driven by business acceleration Regulated Activities1 Non Regulated Act. International Act. €mn 104 114 62 68 1 1 10 6 -0.3 167 183 1Q21 ? Regulated Activities? ? Non Regulated Activities ? International Activities 1Q22 +16 +9.4%
- 11. 448 461 1Q21 1Q22 1Q 2022 Results 11 EBITDA Note: figures may not add up due to rounding 3% EBITDA growth €mn GROUP €mn REGULATED €mn NON REGULATED AND INTERNATIONAL +13 +2.9% 433 448 15 1Q21 ? 1Q22 15 13 -2 1Q21 ? 1Q22
- 12. 461 294 192 190 168 24 76 1 0 EBITDA D&A EBIT Net Financial Expenses Taxes (Profit)/Loss from discontinued operation Minority Interest Group Net Income Group Net Income 1Q21 1Q 2022 Results 12 From EBITDA to Net Income Note: figures may not add up due to rounding 1. Attributable to Terna. In line with updated targets €mn +1% YoY 1 1
- 13. 1Q 2022 Results 13 Capex Note: figures may not add up due to rounding 1. Of which about 4 €mn of Capitalized Financial Charges in 2022 and 2 €mn in 2021 Over 21% capex acceleration TOTAL CAPEX €mn REGULATED CAPEX €mn 1 38% 15% 47% Development Defence Asset Renewal & Efficiency 281 293 242 227 281 15 13 1Q21 1Q22 Regulated Non Regulated and Other
- 14. 10,003 8,683 371 151 293 1,091 Dec.31, 2021 Operating Cash Flow ¦¤ WC & Other Capex Dividends,Equity & Others Mar.31, 2021 1Q 2022 Results 14 Cash Flow & Net Debt Evolution 1. Including Other Fixed Assets Changes 2. Including Assets Held for Sale, Cash Flow Hedge reserve, Hybrid Green Bond and other Note: figures may not add up due to rounding Operating cash flow covering investment needs 2 1 €mn -1,319
- 15. 65% 19% 16% Terna SpA Bonds EIB Banks 1Q 2022 Results 15 Net Debt Evolution & Financial Structure 1. Percentages and key ratios calculated on Gross Debt nominal value 2. IAS value Solid and diversified financial structure GROSS DEBT BREAKDOWN KEY RATIOS 1 1 ~ 86% Fixed ~ 5 years 2 Calculated on Gross Debt Fixed/Floating Ratio Maturity Terna SpA Bonds EIB Banks 10.6€bn
- 16. 16 Q&ASession
- 17. Annexes 17
- 18. Annexes 18 Consolidated Income Statement1 Note: figures may not add up due to rounding 1. Managerial Accounting 2. Including Quality of Service € mn 1Q22 1Q21 ¦¤mn ¦¤% Total Revenue 644 616 29 4.7% Regulated Activities 562 537 25 4.7% Transmission 485 498 -13 -2.7% Dispatching 58 27 31 112.4% Other? 9 4 5 104.7% IFRIC12 10 6 3 50.8% Non Regulated Activities 82 79 4 4.6% International Activities 0 0 0 -100.0% Total Costs 183 167 16 9.4% Regulated Activities 114 104 10 9.6% Labour Costs 63 56 7 12.0% External Costs 35 35 -1 -2.5% Other? 6 5 1 14.6% IFRIC12 10 6 3 50.8% Non Regulated Activities 68 62 6 9.8% International Activities 1 1 0 -21.4% EBITDA 461 448 13 2.9% D&A 168 163 5 2.9% EBIT 294 286 8 2.8% Net Financial Charges 24 18 6 35.6% Pre Tax Profit 269 268 2 0.6% Taxes 76 78 -1 -1.9% Tax Rate (%) 28.3% 29.0% - -0.7 pp Net Income 193 190 3 1.7% Net Financial Charges (Profit)/Loss From Discontinued Operations -1 1 -2 - Total Net Income 192 191 1 0.7% Minority Interest 0 0 0 -33.3% Group Net Income 192 190 1 0.7%
- 19. Annexes 19 Consolidated Income Statement1 Note: figures may not add up due to rounding 1. Managerial Accounting 2. Including Quality of Service € mn 1Q 21 Reported Restatement 1Q 21 Restated ¦¤% Total Revenue 622 -6 616 -1.0% Regulated Activities 537 0 537 0.0% Transmission 498 0 498 0.0% Dispatching 27 0 27 0.0% Other? 4 0 4 0.0% IFRIC12 6 0 6 0.0% Non Regulated Activities 79 0 79 0.0% International Activities 6 -6 0 -96.8% Total Costs 168 -1 167 -0.5% Regulated Activities 104 0 104 0.0% Labour Costs 56 0 56 0.0% External Costs 35 0 35 0.0% Other? 5 0 5 0.0% IFRIC12 6 0 6 0.0% Non Regulated Activities 62 0 62 0.0% International Activities 2 -1 1 -39.1% EBITDA 454 -5 448 -1.1% D&A 163 0 163 0.0% EBIT 291 -5 286 -1.8% Net Financial Charges 22 -4 18 -17.1% Pre Tax Profit 269 -1 268 -0.5% Taxes 78 -1 78 -0.8% Tax Rate (%) 29.1% -0.1 pp 29.0% Net Income 191 -1 190 -0.4% (Profit)/Loss From Discontinued Operations 0 1 1 100.0% Total Net Income 191 0 191 0.0% Minority Interest 0 0 0 -15.2% Group Net Income 190 0 190 0.2%
- 20. Annexes 20 Consolidated Balance Sheet € mn Mar. 31,2022 Dec. 31,2021 ¦¤mn PP&E 15,422 15,317 105 Intangible Asset 670 657 13 Financial Inv. and Other 433 380 53 Total Fixed Assets 16,524 16,353 171 Net WC -1,902 -1,707 -196 Funds -60 -48 -12 Net Capital Invested 14,561 14,598 -36 Net Assets Held for Sale 134 118 16 Total Net Capital Invested 14,695 14,716 -20 Financed by: Consolidated Net Debt 8,683 10,003 -1,319 Total Shareholder's Equity 6,012 4,713 1,299 Total 14,695 14,716 -20
- 21. Annexes 21 Consolidated Cash Flow Note: figures may not add up due to rounding 1. Net of assets¡¯ disposal 2. Including Other Fixed Assets Changes 3. Including Cash Flow Hedge accruals, Hybrid Green Bond and other € mn 1Q22 1Q21 Total Net Income 192 191 D&A? 167 157 Net Change in Funds 12 -15 Operating Cash Flow 371 333 ¦¤ Working Capital & Other? 151 -265 Cash Flow from Operating Activities 522 68 Capital Expenditures -293 -242 Free Cash Flow to Equity 228 -174 Net Assets Held for Sale -16 Dividends & Equity? 1,107 26 Change in Net Cash (Debt) 1,319 -148
- 22. Annexes 22 2022 Total Grid Fee* *ARERA Resolutions and Terna¡¯s preliminary estimates, net of pass-through items Transmission Dispatching + 2.02€bn Transmission Dispatching + 2022 2021 = = 0.11€bn 1.91€bn Resolution 622/2021 Resolution 629/2021 1.95€bn Resolution 565/2020 0.11€bn Resolution 599/2020 2.06€bn 46% 18% 36% RAB remuneration Allowed Opex Allowed D&A
- 23. Disclaimer 23 THIS DOCUMENT HAS BEEN PREPARED BY TERNA S.P.A. (THE ¡°COMPANY¡±) FOR THE SOLE PURPOSE DESCRIBED HEREIN. IN NO CASE MAY IT BE INTERPRETED AS AN OFFER OR INVITATION TO SELL OR PURCHASE ANY SECURITY ISSUED BY THE COMPANY OR ITS SUBSIDIARIES. THE CONTENT OF THIS DOCUMENT HAS A MERELY INFORMATIVE AND PROVISIONAL NATURE AND THE STATEMENTS CONTAINED HEREIN HAVE NOT BEEN INDEPENDENTLY VERIFIED. NEITHER THE COMPANY NOR ANY OF ITS REPRESENTATIVES SHALL ACCEPT ANY LIABILITY WHATSOEVER (WHETHER IN NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY FROM THE USE OF THIS DOCUMENT OR ITS CONTENTS OR OTHERWISE ARISING IN CONNECTION WITH THIS DOCUMENT OR ANY MATERIAL DISCUSSED DURING THE PRESENTATION. THIS DOCUMENT MAY NOT BE REPRODUCED OR REDISTRIBUTED, IN WHOLE OR IN PART, TO ANY OTHER PERSON. THE INFORMATION CONTAINED HEREIN AND OTHER MATERIAL DISCUSSED AT THE CONFERENCE CALL MAY INCLUDE FORWARD-LOOKING STATEMENTS THAT ARE NOT HISTORICAL FACTS, INCLUDING STATEMENTS ABOUT THE COMPANY¡¯S BELIEFS AND EXPECTATIONS. THESE STATEMENTS ARE BASED ON CURRENT PLANS, ESTIMATES, PROJECTIONS AND PROJECTS, AND CANNOT BE INTERPRETED AS A PROMISE OR GUARANTEE OF WHATSOEVER NATURE. HOWEVER, FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES AND ARE CURRENT ONLY AT THE DATE THEY ARE MADE. WE CAUTION YOU THAT A NUMBER OF FACTORS COULD CAUSE THE COMPANY¡¯S ACTUAL RESULTS AND PROVISIONS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENT. SUCH FACTORS INCLUDE, BUT ARE NOT LIMITED TO: TRENDS IN COMPANY¡¯S BUSINESS, ITS ABILITY TO IMPLEMENT COST-CUTTING PLANS, CHANGES IN THE REGULATORY ENVIRONMENT, DIFFERENT INTERPRETATION OF THE LAW AND REGULATION, ITS ABILITY TO SUCCESSFULLY DIVERSIFY AND THE EXPECTED LEVEL OF FUTURE CAPITAL EXPENDITURES. THEREFORE, YOU SHOULD NOT PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS. TERNA DOES NOT UNDERTAKE ANY OBLIGATION TO UPDATE FORWARD-LOOKING STATEMENTS TO REFLECT ANY CHANGES IN TERNA¡¯S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGES IN EVENTS. EXECUTIVE IN CHARGE OF THE PREPARATION OF ACCOUNTING DOCUMENTS ¡°AGOSTINO SCORNAJENCHI¡± DECLARES, PURSUANT TO PARAGRAPH 2 OF ARTICLE 154-BIS OF THE CONSOLIDATED LAW ON FINANCE, THAT THE ACCOUNTING INFORMATION CONTAINED IN THIS PRESENTATION, FOR WHAT CONCERNS THE ACTUAL FIGURES, CORRESPONDS TO THE DOCUMENT RESULTS, BOOKS AND ACCOUNTING RECORDS.
- 24. Notes 24