Investor. Presentation. March 2017

Transcription

1 Investor Presentation March 2017

2 Table of contents Company profile Market overview Strategic Guidelines Financial Review Closing Remarks 2

3 COMPANY PROFILE 3

4 COMPANY PROFILE Green Network today Founded in 2003 following the electricity market deregulation (Bersani Decree 79/99) to become the energy partner of major domestic & business customers Main activities Power & Gas Sales Trading 195k end-user (average 2016) 34 TWh traded in 2016 ITALY Primary independent player in the Italian energy market Presence covers all the Italian territory, especially Rome, Turin and Milan areas Active in the PMI and retail market since 2013, and focus on it since 2014 UK First independent player to enter UK market as a supplier Active in the retail market since November 2015 Controlled market entry (CME) process ended in January 2017 Ready to enter SME and Industry market in 2017 Currently serving retail customers (customer base created in Q1 2017) 2020 Business Plan predicts to have around meters 4

5 COMPANY PROFILE Management Team & Key Figures Management Team Key figures 2016 Revenues 706 M Founder Piero Saulli CEO & Chairman Founder of Green Network S.p.A. Former top manager at Enel S.p.A. Founder Sabrina Corbo Vice-President Founder of Green Network S.p.A. 10+ year of legal advisory for energy sector players EBITDA EBIT NFP 32 M 23 M 26 M Gearing (NFP/PN) 1 Giovanni Barberis General Manager Former CFO at ACEA Former CFO at Hera Former CFO at Cremonini Group Former CFO at Simint (Armani Group) Former Audit Manager at Exxon NFP/EBITDA 0,8x Employees ~200 *Note: Exclude Renewable companies under divestiture Since 2003, Green Network S.p.a. has grown to become a primary independent player in the Italian energy market 5

6 COMPANY PROFILE Green Network awards GRUPPO D'ACQUISTO SOSTENIBILITA' BEST ENERGY OFFER IN FEB-15 WITH "I LOVE GREEN NETWORK" FOR TGCOM24 In Feb-2017, Green Network, partnering with Codacons and Konsumer Italia, has created the first energy-based community of consumers: "Gruppo d'acquisto Sostenibilità" Consumers will be offered a transparent cost, with a discount up to 25% compared with the base cost determined by the Authority (Aeegsi) In addition, the consumers' associations Codacons and Konsumer Italia will protect the members of the community and allow a fast, solid and transparent conciliation process in case of disputes TGCOM24 monthly publishes Il blog del consumatore (The consumer blog) identifying best energy offers available on the market Green Network was ranked first for energy price thanks to the offer "I love Green Network" First Italian energy operator to create an energy-based community and partner with consumers' association to protect the interests of its customers 6

7 MARKET OVERVIEW 7

8 MARKET OVERVIEW Residential Italian Market Customer's Bill Power 30 MM customers spending on average 500 /year, reaching a total value of ~15 Bn in TWh average consumption, a 3% growth compared to 2014 Power cost breakdown for an avg. domestic customer Gas 20 MM customers spending on average 800 /year, reaching a total value of ~16 Bn in Bcm average consumption, a 8% growth compared to 2014 Gas cost breakdown for an avg. domestic customer Energy costs for families are around 30 Bn per year, with Transmission/Transport & Distribution, taxes and duties accounting for more than 70% of the total Source: Italian Regulatory Authority for Electricity Gas and Water: "Relazione annuale sullo stato dei servizi e dell attività svolta" (2015); Data and statistics

9 MARKET OVERVIEW Market structure POWER Sales to end-customers GAS Sales to end-customers Enel, Eni Acea, Hera, A2A Green Network Edison, Gala, Sorgenia, E-on, Axpo Enel, Eni Iren, Hera, A2A Green Network Edison, Shell, Sorgenia, E-on, Engie More than 40% of the market is still controlled by Eni/Enel and Big Local Utilities Source: analysis on AEEGSI data (2015) and players' websites, annual reports and press releases 9

10 MARKET OVERVIEW Opportunities for independent private operators Market Deregulations Market Trends from 2018 The deregulation process, started in 2007 (Decreto Bersani 73/07), allowed the consumer to choose his own power and gas suppliers in the free market, on the basis of the proposed offers Today, 70% of the customers have not chosen yet their supplier, preferring the "Maggior Tutela" conditions regulated by the Authority and managed by Enel/Eni and Local Utilities "Maggior Tutela" will end in 2018, therefore every consumer, by that time, will be forced to choose his power and gas supplier in the free market Incumbent Big Local utilities Independent private operators Small operators (Mkt share <2%) Market share reduction due to a decrease in the number of Maggior Tutela customers Balance between Maggior Tutela customers lost and the increase in the number of customers from the free market Maggior Tutela customers acquisition on the free market Higher market concentration and small operators pushed out of the market due to the financial impact of Decreto 488/16, which reduces payment terms to GME from bimonthly to weekly An increase of the market share related to the main private companies is expected from 2018, following the conclusion of the industry deregulation process Source: analysis on AEEGSI data (2015) and players' websites, annual reports and press releases 10

11 MARKET OVERVIEW Retail POWER & GAS Market Power Top 4: 50% MS #11 (TWh) Gas (Bcm) Top 4: 50% MS #30 Altri Tot Green Network is one of the main Italian private companies with more than about 6 TWh and 0,2 Bcm sold Source: AEEGSI annual report 2016 (Volumes 2015)

12 MARKET OVERVIEW Comparison to other main Private Operators Data referred to 2015, GN dati 2015 e 2016 EBITDA* (M ) EBITDA* (%) NFP* (M ) Green Network S.p.a. displays both higher EBITDA and EBITDA margin compared to other main Italian Private Operators Source: Management for Green Network S.p.a. figures, AIDA for Gala, Metaenergia, Illumia and Sorgenia figures (data related to Group results year 2015) *Note: Exclude Renewable companies under divestiture 12

13 STRATEGIC GUIDELINES 13

14 STRATEGIC GUIDELINES Strategy on Core Business ENERGY MARKET TODAY Highly competitive market, where aggressive teleselling is the most widespread sales channel used to target domestic customers and SME "Unbalanced market", where few public companies (e.g. Eni, Enel, ) retain most of the market share, with independent energy operators forced to target the residual consumers Increasing number of unethical and illegal actions from main operators, which lower the reputation of the industry and are condemned by the Authority (which actually has started to sternly regulate the market only recently) More and more customers distrust energy companies and disapprove their selling methods, most of them prefer to stay with a well-known public supplier (e.g. Eni, ), rather than try independent suppliers, despite their offers Given the market conditions, Green Network has decided to change its approach and focus on a strategy tailored on customer's needs 14

15 M/L TARGETS ACTION PLAN STRATEGIC GUIDELINES Strategy on Core Business GREEN NETWORK STRATEGY CUSTOMER FIRST: the customer is the main asset of the company, whose main aim is satisfying his needs CROSS-SELLING: M&A: Adoption of transparent cross-selling to increase the number of domestic customers leveraging on "high-loyalty" customer bases of partners such as GDO, Banks, Using M&A channel targeting small energy operators and consolidated domestic/sme customer bases, in a long-term growth perspective Focus next CHANNEL SELECTION: Reduction in the use of standard sales channels and selection of high-quality ones (i.e. teleselling companies, whose quality is certified) EXPORT BRAND: CONSUMER LOYALTY: Exporting brand and expanding activities abroad, following the successful UK experience Creating a solid customer base, made by "loyal" clients CONSUMER QUALITY: Increasing customer "quality", transparency and reliability and improve retention in the medium-long term L/T PROFITABILITY: Seeking profitability in the long-term by focusing on reliable and sound consumer segments and by discarding riskier clients 15

16 STRATEGIC GUIDELINES Focus on "cross-selling" Partnership First "Energetic" Partnership signed on 14 th December 2016 Leader in the Italian food distribution industry (more than points of sale) Green Network offer exclusively for Conad clients, from February 2017 Unique conditions, thanks to a pricing based on the average of the 5 best offers in the market Offer reserved to all clients with a Conad card (more than 8,3 million) in more than points of sale Customer care tailored on clients needs, who can be helped by Italian operators Francesco Pugliese CEO Conad «Coherently with the growing support to our clients' purchasing power, our offer will allow our customers to save money on two of the most relevant expenses for Italian families: Power and Gas «A concrete and tangible commitment, which has already showed its value in the convenience of parapharmacies and gas stations, but that can not substitute the State, and which is expected to support adequately both consumption growth and Italian modernization" Relevant energy partnership signed with one of the main GDO operator (more than points of sale on all the national territory and 8,3 million "loyal" customers) and far more is yet to come 16

17 STRATEGIC GUIDELINES Pillars of new Green Network Strategy New channels strategy leveraging on strategic partnerships Improve customer loyalty Strengthen profitability Exploit operational excellence and cost discipline Control and mitigate risks in trading activities Widen the offer developing digital technologies 17

18 FINANCIAL REVIEW 18

19 FINANCIALS REVIEW Group Highlights REVENUES* (M ) EBITDA* (M ) Renewable Companies CASH FLOW (M ) NFP* (M ) Renewable Companies Source: Management Expected EBITDA increase by 2020 up to ~90M driven by a significant NFP reduction (~20M ) 19

20 FINANCIALS REVIEW Financial wrap-up '000 meters Commercial Target Acquisition Channel Financing strategy # Meters in ITALY In 2016 ~ 195k meters Channel Cross-selling (GDO, Bank) Merger & Acquisition Financial Needs High High Step # 1 ( ) Bond Private Placement Bank loans '000 meters # Meters in UK Digital channel Medium Step # 2 ( ) IPO and Listing in Milan Stock exchange Traditional Channel (relying only on Italian teleselling companies with certified quality) Low Business growth targeting M/L term profitability to be supported through a solid financial strategy, that allows investors to receive a long-term return Source: Management 20

21 FINANCIALS REVIEW Ratings & Key Credit Strenghts Green Network financial soundness is certified by the B1.1 rating by Cerved Rating assumptions Operating margin improvement, by focusing on more profitable segments microbusiness and domestic and thanks to cross-selling strategy Increasing cash flows from operating activities Improvement of the net financial position Cerved B.1.1 rating is equal to S&P or Fitch BBB/BBB+ and Moody's Baa1/Baa2 rating In October 2016 Cerved Rating Agency confirmed Green Network a rating B1.1 (equivalent to BBB/BBB+ S&P or Fitch, Baa1/Baa2 Moody's) 21

22 CLOSING REMARKS 22

23 CLOSING REMARKS Green Network Main Italian independent private operator Unique Italian supplier in UK energy market Sustainable & solid Growth strategy in M/L term Commitment to customer and credit quality Innovation-oriented approach Deep trust by banks and rating agencies 23

24 GREEN NETWORK S.p.A Roma Viale della Civiltà Romana, 7 24