ANALYST AND INVESTOR MEETING 2020 financial year
8 April 2021 repower.com 1 Media conference on the 2020 financial year Agenda
. Review of 2020 financial year Roland Leuenberger
. Finances in 2020 financial year Lorenzo Trezzini
. Outlook Roland Leuenberger
. Questions
repower.com 2 Review of 2020 financial year Good results with higher EBIT
Total operating revenue EBIT Group earnings CHF m CHF m CHF m 1,937 77 50 1,723 65 41
2019 2020 2019 2020 2019 2020
repower.com 3 Review of 2020 financial year Main drivers of good results
Repower Italy - High market demand for balancing energy - Customers with good creditworthiness
Trading Extreme price volatility on forward markets well anticipated
Grid and basic supply Stable earnings from core businesses
Electric mobility PLUG’N ROLL continues to grow
Smart grid METAS certification for SMARTPOWER
Covid-19 Security of supply and employee safety
always assured repower.com 4 Review of 2020 financial year Major investment in Graubünden hydropower, photovoltaics and supply security
Preserving hydro assets Photovoltaic and wind power Investment in sustainable grids . Complete modernisation of Robbia . Biggest photovoltaic installation in the . CHF 27 million invested in Repower’s hydropower plant kicks off Engadine (1.1 MW) goes into operation in grid (CHF 125 million) S-chanf . Phase shifting transformer installed in . Madulain hydropower plant renovated . Repower Renewable acquires 12 new Bever (CHF 2.3 million) photovoltaic installations in Italy (14.3 MW) . New underground cable line between Champfèr and Silvaplana completed . Wind farm acquired in Berlar, Germany (7.5 MW) . 25 kilometres of high-voltage twin cable line acquired from Axpo Hydro . More than 200 new PV installations connected to Repower grid repower.com 5 Review of 2020 financial year Repower has managed the Covid-19 crisis well so far
Precautionary measures in the Digitisation of workflows Resilience in the crisis workplace . Digitisation of workflows and . Repower remains able to act even in . Existing precautionary measures have also business processes gets additional times of crisis thanks to stable proven their worth in the Covid-19 crisis boost balance sheet and good liquidity . Security of supply has been assured at . Strategy of a diversified business . Responded very early with additional all times model is paying off workplace measures to safeguard staff and key processes . However, for various reasons physical . Corporate culture encourages staff to contact remains enormously take responsibility for their actions . Employees have taken responsibility for important for the future themselves and shown flexibility and discipline
. Workplace Covid-19 tests for all staff repower.com 6 Review of 2020 financial year Repower: Graubünden energy company creating substantial local value Repower as an energy provider:
• Repower’s grid was 99.997% available for our 63,140 end consumers Landquart
Küblis Repower as a place to work:
Chur • 451 employees working in Graubünden together Ilanz earned CHF 31.2 million
• Contracts worth CHF 15.7 million to Graubünden businesses
Bever Repower as a creator of value:
• CHF 18.3 million in water rates and other concession fees Poschiavo • CHF 4.4 million in taxes
• CHF 250,000 in sponsorship, donations and other contributions repower.com 7 Media conference on the 2020 financial year Agenda
. Review of 2020 financial year Roland Leuenberger
. Finances in 2020 financial year Lorenzo Trezzini
. Outlook Roland Leuenberger
. Questions
repower.com 8 Group: highlights Repower posts solid group results
. Strong operating profit (EBIT) of CHF 76.9 million at group level (up 18% on prior year) . EBIT in Italy up 41% on prior year . Very good performance from Teverola power plant alongside smaller earnings contribution from B2B sales business (Covid-19) and renewables business (poor wind conditions) . EBIT in Switzerland down 46% on prior year . Decline in gross margin owing, among other things, to extraordinary items (such as valuation provision for LTCs) . All areas of Corporate Centre better than prior year (+29%), thanks among other things to cost-savings and one-time effects in 2019 (pension fund contribution) . Solid group earnings of CHF 41.2 m (-18% year-on-year) significantly affected by income taxes
repower.com 9 Group: key figures Operating income 18% above prior-year level, gross energy margin up 3%
. Positive development in gross margin, up 3% year on year . Strong year-on-year increases in EBITDA (+10%) and EBIT (+18%) . Tax-related decline in group earnings (-18%) owing to complete offset of loss carryforwards in Italy, and income taxes recognised for previous years . Positive development also reflected in a substantial increase in cash flow from operating activities (+26%) . Net debt to EBITDA remains at low, stable level with moderate investments
*FFO = cash from operating activities before change in net **Includes investment in tangible assets and intangible current assets and taxes paid assets (but not including acquisitions and fixed-term deposits) repower.com 10 Group: gross margin Gross energy margin up CHF 9.1 m (+3.5%)
IT IT 49% 59% IT ------49% CH CH 51% 41% ---- CH 51%
Switzerland Italy . Service Provision Division hit by LTC provision and . Trading again sees higher margin on balancing lower trading margins energy from Teverola plant (MSD margin*) . Grid Division benefits from resubmission of . Decline on B2B side because of provision for Swissgrid payment Trans Austria gas pipeline and Covid-19 . Market Switzerland segment hit by one-time threat of loss provision for GoOs repower.com 11 *Mercato Servizi Dispacciamento Group: EBIT EBIT grows CHF 11.7 m (+18%)
+11.7
. Main drivers of decline in other income are prior year insurance payment (CHF 9.7 m) in Italy together with discontinuation of esolva AG from full consolidation (CHF 3.5 m) . Increase in internally produced and capitalised assets due to work to modernise Robbia and Madulain power plants . Increase in earnings from associates driven by reversal of loan towards Aerochetto . Lower personnel expenses owing to discontinuation of esolva AG and one-time payment to pension fund in 2019 (CHF 3.1 m) . Decline in other expenses due primarily to establishment of EVUlution, asset transfer recognised as reduction in expenses repower.com 12 Group: EBIT EBIT in Italy up thanks to demand for balancing energy (up CHF 20.8 m)
+11.7
ITA 93% ITA --- 78% CH --- 7% CH 22%
. Italy profits from increased contributions from balancing energy margin business (MSD margin) . Switzerland hit by provisions for long-term contracts (LTCs) and guarantees of origin (GoOs) . Corporate Centre without one-off extraordinary items (prior year: CHF 3.1 m payment to pension fund) and year-on-year increase in cost-savings
repower.com 13 Segment Switzerland: EBIT EBIT CH: declines CHF 13.6 m* on extraordinary items
-13.6*
Service Provision +40.9 Service ------Provision +25.6 Market ------11.1 Market -9.4
. Market Provision sees EBIT decline on provision for long-term contracts, partly offset by contributions from Grid (Swissgrid resubmission) . Market helped by EVUlution (sale of products, no more marketing and product management costs) but hit by provision for guarantees of origin and lower margins in sales
*rounded repower.com 14 Segment Italy: EBIT EBIT Italy: increase thanks to higher demand for balancing energy
+20.8
. Trading again higher thanks to MSD margin (balancing energy from Teverola) . Generation helped by reversal of impairment loss for associate Aerochetto . Sales sees decline because of Covid-19, provision for Trans Austria gas pipeline and restatement of finance/management expenses (organisational change in marketing) . Renewable down despite acquisitions (CHF +1.8 m). Decline resulting from year-on-year decline in wind generation (down CHF 3.5 m) and increase in non-capitalised development costs (CHF -1.8 m) repower.com 15 Corporate Centre: expenses EBIT: renewed decline in costs +4.4
. Lower management expenses thanks to absence of one-off contribution to pension fund. Additional expense from a share in the cost of marketing from the Market Switzerland segment had a slightly negative effect. . Finance saw a reduction in various cost items . Lower IT costs because development costs passed on to EVUlution, and greater relief resulting from adjustment in transfer pricing . Investments hit by negative annual results from EVUlution repower.com 16 Group: equity Further strengthening in equity structure (up CHF 25 m/3%)
CHF m
Ratio Ratio 45% 44%
Equity ratio at consistently high level Increase in equity
. Equity ratio of 44% within target range of 35% to . Thanks to strong annual results, equity after 45% dividend increased by CHF 25 m
repower.com 17 Group: tangible assets Investment of CHF 51.6 m* in tangible and intangible assets
*Without acquisitions repower.com 18 Group: net liquidity Net debt to EBITDA declines further
CHF m
CHF m 2020 2019
Cash and cash equivalents 301 367
+ securities and fixed-term deposits 196 119
./. financial liabilities 405 452
./. interest liabilities 3 3
Net debt/net liquidity* -89 -31
CHF 58 m increase in net liquidity in 2020
*Net liquidity, indicated by a minus sign, now comes to CHF -89 million repower.com 19 Group: operating cash flow Powerful increase in cash flow from operating activities (up CHF 32.6 m) CHF m
+32.6
. Cash flow from operating activities is the result . Higher FFO with a smaller positive effect from change of all cash-relevant events within the scope of in net current assets give a significantly better cash normal business operations that are relevant for flow from operating activities the period under review. . Effect of change in net current assets comes to CHF +4.7 m in 2020 (prior year CHF +25.5 m) => change CHF -20.8 m
repower.com 20 Media conference on the 2020 financial year Agenda
. Review of 2020 financial year Roland Leuenberger
. Finances in 2020 financial year Lorenzo Trezzini
. Outlook Roland Leuenberger
. Questions
repower.com 21 Outlook Market trends
Increase in demand for electricity Expanding photovoltaics Fluctuating electricity prices
. Decarbonisation moves ahead . Storage becoming even more important . Reduction in baseload capacity . Substantial growth in electric mobility . Grid stability thanks to smart grid increasing volatility . Domestic generation and winter power . Hydropower ideal supplement . Gas, coal and carbon prices the key to supply security main drivers of electricity prices . Fluctuating electricity prices and value added by flexibility
repower.com 22 Outlook Someone has to pay for the energy transition; here a better framework is required
Hydropower Supply security Electricity declaration: GoOs
. Hydropower in Switzerland is the . Energy providers investing abroad . From 1 July the EU will no longer perfect electricity resource (adds value because conditions are better recognise Swiss guarantees of origin domestically, not dependent on power (GoOs) for electricity. But the Swiss from abroad, carbon-neutral, flexible) . Supply security has to be assured with Federal Office of Energy wants to carbon-free generation in Switzerland continue recognising European GoOs. . There are conflicting environmental goals For investments in Switzerland the economic and political conditions have to Policymakers must take care of Swiss be rapidly and massively improved All electricity consumers should be aware hydro and eliminate conflicting of this electricity fraud, and GoOs must be environmental protection goals equivalent (the same way exchanges are)
repower.com 23 Outlook Strategic priorities
Market Switzerland Market Italy Repower Group . Trading and building market share . Increasing energy sales in SME and . Facilitating good diversification in electricity SOHO segment of markets, products and business models . Expanding renewable generation . Expanding renewable generation capacity, focusing on hydro and PV capacity, focusing on hydro and . Strong shareholder structure where economically attractive PV where economically attractive . Healthy balance sheet . Expanding technical and digital . Strategic positioning in future services balancing energy market
. Further growing electric mobility
repower.com 24 Outlook Conclusions
Strategy The strategy of a diversified business model is being continued
Energy transition Repower continues to invest in modernising and expanding renewable energy
Digitalisation Electric mobility and digital energy products have great potential
Coronavirus Pandemic mastered well; we expect the economy to improve in Switzerland and Italy in 2021
Dividend Stable earnings and high level of liquidity permit payment of dividend
repower.com 25 Agenda Next dates in the financial agenda
. 19 May 2021 AGM
. 26 August 2021 Half-year results
repower.com 26 MANY THANKS FOR YOUR INTEREST
repower.com 27