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September 28, 2020 RBC European Utils & Infra Morning Lightbulb
• Naturgy: Time to turn positive • Acciona/Iberdrola: New projects in Spanish sola PV • German renewables up to 48% in the power mix YTD, demand down 5% • New report of concession revocation for Atlantia’s ASPI • Plans to scrap UK tax-free shopping EQUITY RESEARCH EQUITY Naturgy: Time to turn positive Since May 2019, Naturgy has underperformed the European utilities (SX6P) by 45%, impacted by weak LNG profitability, falling gas demand and FX. We believe LNG profitability has already bottomed and expect a medium-term recovery, and Naturgy should benefit from a couple of swing factors (Opex improvement and gas demand recovery). (RBC Capital Markets)
So what? Naturgy trades at 13.5x PE 2021E vs. 15.4x of the average European integrated utilities under our coverage. We could understand the discount in a situation of collapsing earnings, but we expect earnings recovery next year. For further details please see Naturgy - Time to turn positive.
Acciona/Iberdrola: New projects in Spanish sola PV Acciona is starting to develop 300MW of a solar PV plant in Segovia (Spain), and it has 1GW of solar PV pipeline in Spain. The company is also working on a 420MW solar PV plant in Extremadura and another of 360MW in Soria. Iberdrola is close to starting works to build over 70MW of solar PV in Extremadura. It is working on the installation of a 150MW plant and another of c.0.6GW. (El Periodico de la Energia)
So what? Despite the delays post-Covid lockdowns, it looks like solar PV development in Spain is going again at a good pace.
German renewables up to 48% in the power mix YTD, demand down 5% German renewables covered almost 48% of power demand in the first three quarters of 2020, up five percentage points compared to the same period in 2019. Onshore wind output rose 7%, offshore wind 10% and solar generation was 13% higher versus January-September 2019. Electricity demand for the period was down 5.1% yoy, while total generation was 7.3% lower. Germany still requires progress to reach the current 65% renewables by 2030 energy target in place. Key risks to this target continue to be self-consumption, support for assets reaching the end of the 20-year support contracts, and compensation cuts during periods of negative power prices. Further, current grid operator expansion plans forecast largely flat demand until 2030 despite targets for 10 million electric vehicles, and electrification of heating and industry. (Platts, reNEWS)
So what? While the near-50% renewables mix in the first nine months of 2020 is interesting, it shouldn’t be a surprise to investors, with continued renewables roll-out and the lower (Covid-19 related) demand both contributing to increased penetration.
New report of concession revocation for Atlantia’s ASPI Reuters reported over the WE that Italy is ready to revoke motorway unit Autostrade per l’Italia’s concession if its parent company Atlantia fails to agree a deal over ASPI’s future by Wednesday, a government source familiar with the matter said on Sunday.
So what? Atlantia notified last week that it was proceeding to the divestment as per the minister decree from mid-July: Given the discussions with CDP have not been successful in reaching a common valuation ground, they are going ahead with a dual track (private sale / separate listing), which were 2 out of 3 possible transaction structures listed in the decree.
Priced as of prior trading day's market close, EST (unless otherwise noted). Disseminated: Sep 28, 2020 03:16ET; Produced: Sep 28, 2020 03:16ET All values in GBP unless otherwise noted. For Required Non-U.S. Analyst and Conflicts Disclosures, see page 8. RBC European Utils & Infra Morning Lightbulb
Plans to scrap UK tax-free shopping The Guardian reported last week that the Treasury said the retail scheme, which enables non- EU visitors to reclaim VAT paid on their purchases, would finish at the end of December.
So what? This is not good news for travel retail, in particular at LHR (5% of FER valuation), LGW (5% of DG valuation) and Luton Airport (low single-digit % of AENA valuation).
Reports 28/09 - NTGY SM: Time to turn positive
25/09 - Pennon (Outperform) – Performance in line, further clarity on Viridor proceeds in November
25/09 - RBC SMID Focus
24/09 - JLG LN: Model update
23/09 - SMS (Outperform): positive read across from SSE’s MapleCo disposal
22/09 - SMS LN: Get Smart; initiate at Outperform, PT 850p/sh
22/09 - Navigating the Energy Transition
21/09 - RBC European Utilities - EDP & EDPR - Balancing growth vs farm downs
21/09 - EDP PL: Supported by renewables valuation
21/09 - EDPR PL: Renewed capacity growth prospects with asset sales
September 28, 2020 2
RBC European Utils & Infra Morning Lightbulb
European Utilities and Infra Comp. Sheet
Priced as of 25 Sep 2020 EV/EBITDA P/E FCF Yield (Post-Capex) Dividend Yield COMPANY Price Rating Target Upside** % 52w high Mkt Cap (m) EV 2019E (m) 2019A 2020E 2021E 2022E 2019A 2020E 2021E 2022E 2019A 2020E 2021E 2022E 2019A 2020E 2021E 2022E INTEGRATED CENTRICA 40p UP 33p (17.6%) 42% £2,330 £7,119 3.0x 4.1x 3.6x 3.0x 5.5x 9.3x 6.5x 4.8x 9.7% -31.5% 17.0% 30.3% 3.7% 6.2% 8.7% 11.2% SSE * 1,190p SP 1,400p 17.6% 70% £12,657 £23,598 12.3x 12.5x 11.6x 11.9x 14.2x 16.8x 14.8x 13.9x 2.2% 1.5% 4.2% -8.5% 6.7% 6.8% 7.0% 7.2% E.ON € 9.28 SP € 10.50 13.1% 80% € 24,517 € 70,653 12.4x 10.3x 9.9x 9.6x 15.8x 14.2x 13.2x 10.3x 3.8% -2.4% 0.7% -0.2% 5.0% 5.1% 5.4% 5.7% RWE € 31.38 OP € 36.00 14.7% 90% € 19,291 € 25,173 8.2x 8.4x 7.5x 7.4x 15.9x 19.3x 14.3x 14.8x -95.1% 0.2% 1.7% 3.9% 2.5% 2.7% 2.9% 3.0% EDF € 8.60 NR - - 63% € 26,691 € 106,313 5.8x 6.8x 6.4x 6.1x 14.2x 18.2x 15.5x 13.8x -7.7% -10.0% -6.8% -0.2% 3.8% 2.2% 2.8% 3.7% ENGIE € 11.12 NR - - 66% € 27,080 € 81,516 8.0x 8.9x 7.8x 7.6x 10.8x 15.2x 10.4x 9.5x 4.9% 4.2% 9.2% 9.8% 7.0% 5.2% 6.8% 7.4% ENEL € 7.34 NR - - 85% € 74,573 € 134,994 8.4x 7.5x 7.2x 7.0x 15.5x 14.6x 13.6x 13.0x 2.3% 4.8% 6.3% 8.3% 4.5% 4.9% 5.2% 5.5% ENDESA € 22.92 SP € 20.00 (12.7%) 87% € 24,267 € 33,935 8.3x 9.2x 10.4x 9.7x 15.5x 15.9x 20.0x 17.4x 4.6% -1.8% 2.9% 2.8% 6.4% 6.3% 4.0% 4.0% NATURGY € 16.92 OP € 19.00 12.3% 68% € 16,401 € 36,069 7.9x 9.6x 8.5x 8.5x 13.4x 15.2x 13.4x 13.2x 14.0% 4.3% 9.6% 9.8% 8.1% 8.5% 8.9% 9.4% IBERDROLA € 10.39 SP € 10.50 1.1% 90% € 65,607 € 116,779 11.5x 11.0x 10.7x 10.3x 20.2x 17.7x 18.4x 17.6x -0.5% 0.1% 2.6% 2.6% 3.9% 4.0% 3.8% 4.0% EDP € 4.16 SP € 4.30 3.4% 85% € 16,497 € 35,667 9.3x 9.9x 10.4x 9.7x 21.0x 23.2x 22.1x 20.5x -0.2% -4.5% 0.8% -0.0% 4.6% 4.6% 4.6% 4.6% Weighted Mean 4.5% 81% € 311,343 € 674,748 9.0x 9.0x 8.6x 8.3x 16.0x 16.5x 15.4x 14.3x -4.1% 0.1% 3.5% 2.0% 4.9% 4.7% 4.9% 5.2% REGULATED NATIONAL GRID * 855p OP 1,050p 22.9% 80% £30,366 £63,348 12.1x 13.1x 12.6x 11.3x 14.4x 16.6x 15.3x 13.4x -4.5% -5.5% -5.6% -4.0% 5.7% 5.8% 5.9% 5.9% PENNON * 1,058p OP 1,150p 8.7% 87% £4,452 £4,274 14.2x 12.6x 11.9x 11.5x 17.1x 36.8x 32.8x 30.9x 0.8% 0.1% 1.6% 1.7% 4.1% 2.1% 2.1% 2.2% SEVERN TRENT * 2,468p SP 2,450p (0.7%) 91% £5,873 £12,439 13.2x 14.2x 13.3x 12.9x 16.9x 23.3x 20.5x 18.2x -0.5% 4.6% 4.8% 5.0% 4.1% 4.1% 4.2% 4.2% UNITED UTILITIES * 872p OP 950p 8.9% 82% £5,946 £12,740 10.2x 12.5x 11.9x 11.6x 13.8x 18.2x 17.7x 17.2x 2.2% 1.8% 5.8% 6.0% 4.9% 4.9% 5.0% 5.1% TERNA € 6.02 NR - - 88% € 12,096 € 21,035 12.0x 11.8x 11.9x 11.9x 16.4x 15.7x 15.5x 15.2x 0.0% -0.4% 1.3% -1.5% 4.2% 4.5% 4.8% 5.2% SNAM € 4.41 NR - - 86% € 14,825 € 28,202 12.7x 13.0x 12.7x 12.6x 13.6x 13.4x 12.6x 12.4x 4.9% 4.5% 4.5% 4.2% 5.5% 5.7% 5.9% 6.4% ITALGAS € 5.35 NR - - 85% € 4,329 € 9,294 10.3x 9.6x 9.5x 9.4x 12.7x 12.3x 12.3x 12.0x 2.1% 1.7% 0.8% 0.4% 4.7% 5.0% 5.2% 5.3% ENAGAS € 19.64 SP € 19.70 0.3% 75% € 5,144 € 9,559 8.9x 9.9x 10.0x 9.9x 12.2x 12.5x 12.6x 12.7x 1.1% 13.3% 13.1% 13.1% 8.1% 8.6% 8.6% 8.8% RED ELECTRICA € 16.04 OP € 19.00 18.5% 81% € 8,676 € 15,249 9.4x 9.8x 9.7x 9.6x 12.1x 13.3x 13.3x 12.6x -9.5% 7.6% 5.1% 2.5% 6.5% 6.4% 6.4% 6.7% REN € 2.35 SP € 2.50 6.4% 83% € 1,568 € 4,440 9.2x 9.4x 9.2x 9.1x 13.2x 15.6x 14.6x 13.8x 9.9% 10.9% 11.0% 9.0% 7.3% 7.3% 7.3% 7.3% Weighted Mean 15.5% 83% € 97,729 € 189,441 11.6x 12.0x 11.7x 11.2x 14.4x 16.9x 15.8x 14.7x -1.1% 0.8% 1.1% 0.9% 5.4% 5.4% 5.6% 5.8% RENEWABLES EDPR € 13.62 OP € 16.00 17.5% 91% € 11,881 € 17,775 10.7x 11.2x 12.4x 12.6x 25.0x 23.3x 36.4x 37.0x -0.2% -5.7% -2.2% -5.4% 0.6% 0.6% 0.7% 0.7% ØRSTED DKK 880 OP DKK 850 (3.4%) 95% DKK 367,599 DKK 399,391 23.3x 23.4x 15.9x 17.9x 68.8x 67.6x 28.5x 51.3x -2.6% -2.5% -3.5% -4.5% 1.2% 1.3% 1.4% 1.5% FORTUM € 16.94 NR - - 72% € 15,043 € 23,136 12.8x 8.7x 7.9x 7.8x 9.9x 11.7x 12.0x 12.9x 6.5% 8.2% 8.5% 7.7% 6.5% 6.5% 6.5% 6.5% VERBUND € 46.34 NR - - 90% € 16,099 € 19,402 16.0x 15.9x 15.4x 14.0x 28.7x 29.3x 28.2x 25.1x 0.0% -0.9% -1.8% -1.3% 1.5% 1.5% 1.7% 1.8% ACCIONA € 92.65 OP € 115.00 24.1% 73% € 5,082 € 10,773 7.8x 8.9x 8.4x 7.3x 14.2x 22.9x 16.9x 13.1x -6.2% -0.7% -6.6% 4.0% 2.1% 2.6% 3.6% 4.6% SOLARIA € 15.17 OP € 11.00 (27.5%) 87% € 1,896 € 2,386 67.5x 48.1x 27.7x 17.8x 79.4x 78.5x 61.0x 28.5x -6.6% -13.2% -14.3% -9.0% - - - - Weighted Mean 1.6% 89% € 99,370 € 127,110 18.0x 17.1x 13.5x 14.0x 45.5x 45.5x 26.9x 37.1x -0.7% -1.1% -1.6% -1.9% 2.0% 2.1% 2.2% 2.3% GENERATORS, ENVIRONMENTALS & OTHER DRAX 260p OP 340p 30.6% 71% £1,069 £1,816 4.8x 4.6x 4.5x 3.9x 8.7x 7.7x 7.9x 6.8x 22.6% 19.7% 17.8% 18.7% 6.1% 6.4% 7.1% 7.9% UNIPER € 27.40 UP € 23.00 (16.1%) 89% € 10,027 € 13,653 8.5x 8.1x 8.0x 8.7x 17.4x 15.1x 14.8x 15.5x 2.7% 1.9% 3.0% 3.4% 4.2% 5.0% 5.2% 5.3% CONTOURGLOBAL 192p OP 205p 6.8% 85% £1,163 £5,207 7.7x 7.1x 6.3x 6.4x 46.5x 18.5x 10.0x 11.6x -29.3% 16.1% 12.2% 17.1% 6.0% 7.3% 8.0% 8.8% SUEZ € 15.05 NR - - 94% € 9,457 € 22,044 7.2x 7.9x 7.2x 6.7x 26.2x 74.5x 23.0x 19.1x 6.3% 2.8% 6.6% 7.6% 4.3% 3.8% 4.1% 4.2% VEOLIA ENV. € 18.34 NR - - 63% € 10,401 € 23,664 6.0x 6.6x 5.9x 5.5x 14.3x 23.8x 14.5x 12.5x 8.1% 8.1% 6.5% 8.2% 5.3% 3.9% 5.2% 5.8% SMS 619p OP 850p 37.3% 83% £699 £684 15.5x 13.6x 13.8x 13.4x 54.8x 61.8x 59.0x 51.7x -10.0% -3.4% -3.3% -3.9% 1.1% 4.0% 4.4% 4.9% Weighted Mean (6.6%) 81% € 33,096 € 67,803 7.1x 7.4x 6.9x 6.7x 20.8x 35.9x 17.7x 16.0x 4.5% 5.2% 5.9% 7.0% 4.8% 4.4% 5.1% 5.4% AIRPORTS ADP € 82.40 OP € 115.00 39.6% 45% € 8,154 € 15,211 7.7x 61.1x 12.0x 9.5x 15.0x -12.7x 27.7x 14.6x -0.1% -14.0% 2.3% 4.9% 0.8% - 2.2% 4.1% AENA € 115.60 UP € 100.00 (13.5%) 65% € 17,340 € 25,280 8.7x 45.2x 13.1x 10.9x 11.8x -82.0x 20.6x 15.5x 6.4% -3.7% 2.5% 5.1% - - 3.9% 3.2% FRAPORT € 33.54 UP € 29.00 (13.5%) 42% € 3,099 € 8,708 6.1x 70.6x 11.2x 9.9x 7.4x -7.8x 20.1x 13.1x -10.4% -47.2% -18.0% -4.5% - - 4.5% 5.1% VIENNA € 24.35 UP € 21.50 (11.7%) 63% € 2,045 € 3,025 7.4x 50.1x 14.4x 11.5x 13.1x -35.3x 43.1x 23.0x 9.6% -10.6% 6.9% 6.8% - - 4.6% 4.6% ZURICH CHF 126 OP CHF 145 15.5% 67% CHF 3,852 CHF 5,303 8.0x 27.9x 9.9x 9.3x 12.5x -49.1x 19.8x 15.3x -7.4% -2.5% 0.1% -1.2% - - 3.1% 3.6% Weighted Mean 2.3% 59% € 34,209 € 57,139 8.0x 52.1x 12.3x 10.2x 12.3x -52.5x 23.5x 15.5x 2.1% -10.4% 0.6% 3.6% 0.2% - 3.5% 3.7% CONCESSIONS/ TRANSPORT INFRA ATLANTIA € 13.52 OP € 21.00 55.3% 58% € 11,165 € 59,886 10.6x 15.7x 8.8x 8.5x 81.3x -7.0x 19.0x 15.9x 30.8% -0.8% 19.5% 29.8% - - 6.7% 7.4% EIFFAGE € 68.92 OP € 100.00 45.1% 62% € 6,747 € 17,807 6.1x 8.1x 5.5x 4.9x 9.3x 29.1x 9.1x 7.8x 19.0% 7.6% 12.1% 18.7% - - 3.8% 4.5% FERROVIAL € 21.00 OP € 25.00 19.0% 69% € 15,508 € 25,442 24.1x 38.0x 17.7x 16.0x -80.1x -78.0x 56.3x 42.3x 6.6% 3.0% 4.6% 6.3% 1.5% - 3.6% 3.6% GETLINK € 11.21 UP € 9.00 (19.7%) 66% € 6,042 € 10,254 18.3x 30.1x 19.6x 17.6x 38.0x -85.9x 56.7x 40.7x 2.0% -10.5% 1.7% 3.9% - - 3.1% 3.1% VINCI € 71.02 OP € 95.00 33.8% 66% € 39,769 € 82,430 9.8x 15.3x 9.0x 7.7x 12.2x 47.9x 14.9x 13.2x 10.6% 1.9% 9.0% 10.6% 2.9% 0.7% 2.4% 2.8% DFDS DKK 197 OP DKK 280 42.1% 58% DKK 11,268 DKK 23,351 6.4x 9.9x 6.6x 5.5x 8.6x 54.4x 9.8x 6.8x -0.9% 0.8% 12.0% 13.7% - 0.0% 0.0% 4.9% Weighted Mean 31.0% 65% € 80,744 € 198,955 11.9x 18.4x 10.3x 9.4x 5.7x 4.6x 26.0x 20.7x 12.5% 1.2% 9.4% 12.7% 1.7% 0.3% 3.3% 3.8% Overall weighted mean 10.0% 79% € 656,490 € 1,315,198 10.6x 13.4x 9.9x 9.5x 19.0x 16.9x 19.1x 18.8x -0.4% -0.1% 3.1% 2.9% 3.9% 3.6% 4.3% 4.6%
*March year end company where 2019E refers to March 2020E estimates. ** Potential capital upside Source: RBC Capital Markets estimates, Company reports and press releases, Bloomberg consensus data and events.
September 28, 2020 3
RBC European Utils & Infra Morning Lightbulb
European Regulated Utilities Comp. Sheet
Priced as of 25 Sep 2020 2020E/ 2019-22 2019-22 Trading multiples: 2020E or FY21E Implied return Mkt Cap EV (m) FY21E Prem-to-RAB 3-yr RAB 3-yr EPS EV/ FCF Div ND**/ ND**/ COMPANY Price Rating Target Capital Total (m) Total Reg. RAB (m) Trading Target CAGR CAGR EBITDA P/E yield yield EBITDA RAB NATIONAL GRID * 855p OP 1,050p 23% 29% £30,366 £59,976 £15,389 £43,384 -16% 24% 6.2% 2.5% 13.1x 16.6x -5.5% 5.8% 6.8x 76% PENNON * 1,058p OP 1,150p 9% 11% £4,452 £8,000 £4,059 £3,388 20% 28% 1.2% -17.8% 12.6x 36.8x 0.1% 2.1% -0.5x 1% SEVERN TRENT * 2,468p SP 2,450p -1% 3% £5,873 £12,385 £11,316 £9,454 20% 20% 1.9% -2.4% 14.2x 23.3x 4.6% 4.1% 7.5x 70% UNITED UTILITIES * 872p OP 950p 9% 14% £5,946 £12,570 £12,199 £11,748 4% 12% 0.2% -6.9% 12.5x 18.2x 1.8% 4.9% 6.7x 58% TERNA € 6.02 NR - n/a n/a € 12,096 n/a n/a n/a n/a n/a n/a n/a 11.8x 15.7x -0.4% 4.5% 4.9x 59% SNAM € 4.41 NR - n/a n/a € 14,825 n/a n/a n/a n/a n/a n/a n/a 13.0x 13.4x 4.5% 5.7% 6.1x 63% ITALGAS € 5.35 NR - n/a n/a € 4,329 n/a n/a n/a n/a n/a n/a n/a 9.6x 12.3x 1.7% 5.0% 5.1x 70% ENAGAS € 19.64 SP € 19.70 0% 9% € 5,144 € 9,083 € 6,129 € 5,544 11% 5% -12.0% -1.5% 9.9x 12.5x 13.3% 8.6% 4.6x 80% RED ELECTRICA € 16.04 OP € 19.00 18% 25% € 8,676 € 14,873 € 13,334 € 12,236 9% 16% 0.5% -1.5% 9.8x 13.3x 7.6% 6.4% 4.1x 54% REN € 2.35 SP € 2.50 6% 14% € 1,568 € 4,497 € 4,292 € 3,698 16% 12% -1.3% -1.6% 9.4x 15.6x 10.9% 7.3% 6.1x 78% REGULATED UTILITIES Sector 11% 16% € 96,161 € 125,761 € 66,529 € 128,784 1% 11% 1.1% -0.9% 12.0x 16.9x 0.8% 5.4% 5.8x 71% SX6P Sector 10% 14% € 656,490 € 1,315,198 13.4x 16.9x -0.1% 3.6% 4.6x * March year-end ** ND = Net economic debt, simply defined to be net financial debt plus provisions. Source: RBC Capital Markets estimates, Company reports and press releases, Bloomberg consensus data and events
UK Infrastructure Funds Comp Table Priced as of 25 Sep 2020 Price Target Shares Market Last Reported NAV (pre-div) Accr./declared Post-div. Prem (Disc) Company Name Symbol (p/sh) Rating (p/sh) Upside* O/S (m) Cap (£m) Yield p/sh Valn. Date div. (p/sh) NAV (p/sh)** to NAV HICL Infrastructure HICL 168 SP 170 1.4% 1,937 3,246 4.9% 152.3 31 Mar 2020 2.1 150.2 11.6% International Public Partnership INPP 159 UP 150 (5.4%) 1,615 2,561 4.5% 149.2 30 Jun 2020 3.7 145.5 9.0% 3i Infrastructure 3IN 288 OP 300 4.2% 891 2,567 3.2% 254.5 31 Mar 2020 4.6 249.9 15.2% John Laing Group JLG 315 OP 365 15.9% 491 1,545 3.2% 309.0 30 Jun 2020 1.8 307.2 2.5% GCP Infrastructure Investments GCP 115 - - - 880 1,013 6.6% 112.5 31 Mar 2020 1.9 110.6 4.1% Bilfinger Berger Global Infra. BBGI 171 - - - 631 1,078 4.2% 136.2 31 Dec 2019 3.5 132.7 28.7% Total / Weighted Average - Infrastructure 12,011 4.3% 11.5%
Greencoat UK Wind UKW 132 ------145 9.8% 1,518 2,004 5.3% RESTRICTED120.1 ------30 Jun 2020------1.8 118.3 11.6% Octoput Renewables Infra. Trust ORIT 108 - - - 350 378 1.0% 97.5 30 Jun 2020 0.3 97.2 11.1% SDCL Energy Efficiency IT SEIT 110 - - - 426 467 5.0% 101.0 31 Mar 2020 1.4 99.6 9.9% The Renewables Infra. Grp Ltd. TRIG 132 - - - 1,742 2,296 5.1% 113.0 30 Jun 2020 1.7 111.3 18.4% NextEnergy Solar Fund NESF 102 - - - 585 595 6.7% 98.4 30 Jun 2020 1.8 96.6 5.3% Foresight Solar Fund Ltd. FSFL 103 - - - 606 625 6.7% 96.0 30 Jun 2020 1.7 94.3 9.3% Bluefield Solar Income Fund BSIF 136 - - - 370 502 5.8% 117.0 30 Jun 2020 2.0 115.0 17.8% John Laing Env. Assets Group JLEN 116 - - - 547 634 5.8% 94.0 30 Jun 2020 1.7 92.3 25.6% Greencoat Renewables GRP € 1.18 OP € 1.20 1.7% 631 € 744 5.1% € 1.02 30 Jun 2020 € 0.02 € 1.01 17.2%
Total / Weighted Average - Renewables 8,180 5.3% 14.7% Total / Weighted Average 20,191 4.7% 12.8%
* Potential capital upside ** Last reported post-div NAV Source: RBC Capital Markets estimates, Company reports and press releases, Bloomberg consensus data and events
September 28, 2020 4
RBC European Utils & Infra Morning Lightbulb
European Utilities and Infrastructure Total Shareholder Return
Priced as of 25 Sep 2020 YTD performance - € based YTD performance - local currency 1M performance - € based
SOLARIA 123.1% SOLARIA 123.1% SUEZ 24.0% EDP RENOVAVEIS 30.7% EDP RENOVAVEIS 30.7% NATURGY 4.2% ØRSTED 30.0% ØRSTED 29.6% PENNON 3.2% IBERDROLA 17.8% IBERDROLA 17.8% SEVERN TRENT 2.0% RWE 17.7% RWE 17.7% UNITED UTILITIES 1.9% SUEZ 16.5% SUEZ 16.5% UNIPER -0.4% EDP 15.5% EDP 15.5% SMS -0.5% ENEL 8.0% SMS 10.4% SNAM -1.3% TERNA 3.8% ENEL 8.0% ZURICH -1.4% ITALGAS 3.5% PENNON 7.4% ØRSTED -2.1% SMS 2.2% TERNA 3.8% SOLARIA -2.1% E.ON 2.2% ITALGAS 3.5% RED ELECTRICA -2.2% ACCIONA 1.0% E.ON 2.2% EDF -2.8% ENDESA -0.2% ACCIONA 1.0% ENGIE -2.8% PENNON -0.5% SEVERN TRENT 0.6% ENDESA -3.0% 0 0 SX6P -0.8% ENDESA -0.2% VIENNA -3.2% SNAM -0.9% SX6P -0.8% ATLANTIA -3.5% UNIPER -2.9% SNAM -0.9% NATIONAL GRID -3.7% RED ELECTRICA -4.9% UNIPER -2.9% SXXP -3.7% SEVERN TRENT -6.9% CONTOURGLOBAL -3.9% SX6P -3.9% REN -7.5% UNITED UTILITIES -4.7% ITALGAS -4.0% ENAGAS -9.7% RED ELECTRICA -4.9% EDP -4.2% CONTOURGLOBAL -11.0% NATIONAL GRID -6.4% EDP RENOVAVEIS -4.4% UNITED UTILITIES -11.8% REN -7.5% REN -4.7% SXXP -12.5% ENAGAS -9.7% IBERDROLA -4.7% NATIONAL GRID -13.4% DRAX -11.1% VEOLIA ENV. -5.0% EDF -13.4% SSE -12.4% RWE -5.4% DJBEI -16.0% SXXP -12.5% DJBEI -5.5% DRAX -17.8% DJBEI -13.1% TERNA -5.6% SSE -18.9% EDF -13.4% AENA -5.6% OP NATURGY -20.1% ENEL -6.0% NATURGY -20.1% OP OP VEOLIA ENV. -20.6% VEOLIA ENV. -20.6% ADP -6.1% FERROVIAL -21.1% FERROVIAL -21.1% ENAGAS -7.2% DRAX ENGIE -22.8% SP ENGIE -22.8% SP -7.8% SP VINCI -27.2% VINCI -27.2% FRAPORT -7.8% GETLINK -27.7% GETLINK -27.7% CONTOURGLOBAL -8.3% E.ON ZURICH -28.6% UP ZURICH -29.0% UP -8.5% UP ACCIONA AENA -32.2% AENA -32.2% -8.5% SSE EIFFAGE -32.4% EIFFAGE -32.4% -8.6% FERROVIAL ATLANTIA -35.0% Sector/Index ATLANTIA -35.0% Sector/Index -9.4% Sector/Index CENTRICA VIENNA -35.5% VIENNA -35.5% -12.0% VINCI DFDS -39.2% DFDS -39.4% -13.6% GETLINK Not rated/ under ADP -53.2% Not rated/ under ADP -53.2% Not rated/ under -14.1% EIFFAGE restriction FRAPORT -55.7% restriction CENTRICA -55.2% restriction -15.3% DFDS CENTRICA -58.5% FRAPORT -55.7% -17.1%
Continued on next page
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RBC European Utils & Infra Morning Lightbulb
European Utilities and Infrastructure Total Shareholder Return (continued)
Priced as of 25 Sep 2020
3M performance - € based 6M performance - € based 12M performance - € based SUEZ 48.2% SOLARIA 32.7% SOLARIA 106.7% SOLARIA 175.8% DRAX 16.7% DRAX 79.7% SMS 68.6% SUEZ EDP RENOVAVEIS 16.0% 61.8% ØRSTED 42.6% EDP RENOVAVEIS ØRSTED 15.7% 40.8% EDP RENOVAVEIS 40.8% DFDS 37.2% EDF 8.6% PENNON 37.3% RWE 36.9% EDP ACCIONA 7.0% 26.8% ØRSTED 31.6% SEVERN TRENT 20.4% NATURGY 6.8% ENDESA 30.3% RWE 15.4% ENDESA 5.8% CONTOURGLOBAL 29.0% IBERDROLA 15.2% SMS 5.5% EDP 23.7% ENEL 13.5% IBERDROLA 4.9% ITALGAS 22.1% UNITED UTILITIES 11.8% SNAM 4.6% UNIPER 21.4% SUEZ 11.5% ITALGAS 4.1% ENEL 18.8% CONTOURGLOBAL 9.5% CONTOURGLOBAL 2.8% SEVERN TRENT 18.3% E.ON 9.5% CENTRICA 2.3% ATLANTIA 17.3% TERNA 9.2% EDP 2.0% IBERDROLA 16.3% SX6P 5.2% ENGIE 1.5% SXXP 15.5% ENDESA 3.8% RWE 0.9% SNAM 15.3% SNAM 2.2% TERNA 0.2% REN 14.8% ENAGAS 2.0% ZURICH 0.2% EDF 14.7% NATIONAL GRID 1.0% SX6P 0.1% SX6P 14.6% ACCIONA 0.1% SXXP -0.6% ZURICH 14.3% REN -0.4% SEVERN TRENT -1.3% RED ELECTRICA 13.4% SSE -0.5% RED ELECTRICA -2.3% ENAGAS 12.5% DRAX -1.9% ENEL -2.3% TERNA 11.7% ITALGAS -3.7% REN -3.3% VIENNA 9.9% UNIPER -4.9% VIENNA -3.4% E.ON 9.8% RED ELECTRICA -5.5% UNIPER -3.5% UNITED UTILITIES 9.0% SXXP -5.7% PENNON -4.5% PENNON 7.1% DJBEI -10.6% AENA -4.8% NATURGY 6.3% EDF -12.6% E.ON -5.0% SMS 5.9% VEOLIA ENV. -16.5% DFDS -5.2% DJBEI 5.7% FERROVIAL -17.3% OP ATLANTIA -5.2% OP ENGIE 5.1% OP GETLINK -18.4% UNITED UTILITIES -5.5% AENA 5.0% DFDS -20.1% ENAGAS -6.3% EIFFAGE 3.7% NATURGY -23.2% SP SP SP ENGIE DJBEI -6.3% VEOLIA ENV. 3.1% -23.3% VINCI -25.3% VEOLIA ENV. -8.6% GETLINK 2.6% EIFFAGE -26.2% UP SSE -9.9% UP ACCIONA 1.1% UP AENA -30.0% NATIONAL GRID -10.3% FERROVIAL -0.5% ZURICH -30.5% ADP -10.6% NATIONAL GRID -1.8% Sector/Index Sector/Index Sector/Index VIENNA -36.9% FRAPORT -12.9% VINCI -3.4% ATLANTIA -37.8% VINCI -13.4% SSE -5.3% CENTRICA -44.3% Not rated/ under GETLINK -13.8% CENTRICA -8.4% Not rated/ under Not rated/ under ADP -48.2% restriction FERROVIAL FRAPORT -10.5% -14.6% restriction restriction FRAPORT -55.6% EIFFAGE -15.1% ADP -20.5%
Source: RBC Capital Markets, Bloomberg data
September 28, 2020 6 RBC European Utils & Infra Morning Lightbulb
Contributing Authors
RBC Europe Limited Research RBCCM European Utils & Infra (Equity) [email protected] John Musk (Analyst) +44 20 7029 0856 [email protected] Fernando Garcia (Analyst) +44 20 7029 0267 [email protected] Alexander Wheeler (Analyst) +44 20 7653 4481 [email protected] Ruairi Cullinane (Analyst) +44 20 7002 2275 [email protected]
Royal Bank of Canada - Hong Kong Branch Stephanie D'Ath (Analyst) +852 2848 1390 [email protected]
September 28, 2020 7 RBC European Utils & Infra Morning Lightbulb
Required disclosures Non-U.S. analyst disclosure John Musk, Fernando Garcia, Alexander Wheeler, Ruairi Cullinane and Stephanie D'Ath (i) are not registered/qualified as research analysts with the NYSE and/or FINRA and (ii) may not be associated persons of the RBC Capital Markets, LLC and therefore may not be subject to FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account. Conflicts disclosures This product constitutes a compendium report (covers six or more subject companies). As such, RBC Capital Markets chooses to provide specific disclosures for the subject companies by reference. To access conflict of interest and other disclosures for the subject companies, clients should refer to https://www.rbccm.com/GLDisclosure/PublicWeb/DisclosureLookup.aspx?entityId=1. These disclosures are also available by sending a written request to RBC Capital Markets Research Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, South Tower, Toronto, Ontario M5J 2W7 or an email to [email protected].
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