EFFECTIVE FINANCIAL MODELLING IN THE POWER INDUSTRY Develop the knowledge and skills to create and analyse financial models on a consistent and focussed basis ADVANCING HIGH PERFORMERS DEVELOPING POWER EXECUTIVES PAN AFRICAN TRAINING FORUM FOCUSING ON ENHANCING PERFORMANCE BUSINESS FRIENDLY STRATEGIES PRACTICAL & INNOVATIVE LEARNING INTERNATIONAL & REGIONAL TRENDS 5 7 October 2015 Lagos, Nigeria WWW.SPINTELLIGENT-TRAINING.COM
Agenda at a glance 08:30 Registration (Day One) 09:00 Workshop session 10:30 Tea 11:00 Workshop session 12:30 Lunch 13:30 Workshop session 15:00 Tea 15:30 Workshop session 17:00 Close Course Facilitator: Alan Brooke Alan Brooke has over 20 years experience in a wide range of roles in finance. He has delivered training courses on behalf of a number of international training companies since 2006. Alan trained as a chartered accountant at KPMG in South Africa and New Zealand, before moving into industry with Ford Motor Company. He held various positions there in financial analysis, budgeting and forecasting, until he was appointed sales planning manager, responsible for forecasting models, production planning and supply logistics. He joined a multinational private consultancy group in Australia, as their general finance manager. In this role, he guided the group through a period of major change and financial turnaround. For the past 14 years, Alan has worked as a freelance financial modeller, trainer and analyst for a range of blue chip clients. Alan has gained a great deal of experience in financial modelling in different sectors, including utilities in the transport, gas, electricity and water sectors, as well as building financial models in central government departments. He has built, developed and used models to support commercial negotiations, analyse risk, test scenarios and forecast results. Alan has worked for numerous energy companies, including British Energy, SN Power Norway, Meralco and AES in the Philippines, and Mainstream Renewable Power in South Africa. Welcome to the Effective Financial Modelling in the Power Industry Power sector projects are fraught with uncertainty and risk, overshadowed by a growing need to remain competitive. An increase in technological disruption, lapses in business continuity and a constant state of flux creates financial risks which need to be evaluated and managed effectively. If unmanaged, these risks could result in incorrect investment decisions, inaccurate audits due to hidden internal costs as well as shareholder frustration due to inconsistencies and errors. Ultimately, these pitfalls could result in worst case scenarios of reputational damage, failed projects and an unhealthy bottom line. It is for this reason that Spintelligent has produced an event to address these challenges head on. Our Effective Financial Modelling training workshops will attract high performers from key utilities across East, West and Southern Africa, offering the ideal context to train, develop and benchmark with leaders in the industry. We aim to facilitate growth in the sector through these premium learning opportunities and we look forward to ushering you into an era of sustained growth and heightened performance. Pamela Largue Spintelligent Training Manager Course Introduction This intensive three-day programme has been specifically designed to address the modelling issues that are specific to developing a project in the power sector. It will enable you to create, use and analyse a project finance model. These skills can be used to support credit approvals and reviews by lenders and to support organisations which run or sponsor projects. This will be done by reviewing best practice in model structures and logic, developing a fully integrated model in stages, and using tools to assess the model outputs, particularly in a sensitivity analysis. Benefits of attending: 1 2 Examine structuring and best practice in financial modelling for the power sector. Learn how to build models to accommodate change. 3 Evaluate funding structures and cash flow waterfalls that fit your commercial model. 4 Develop an integrated modelling approach with balance sheets and P&L statements. 5 Analyse using the outputs of the model ratios, sensitivity analysis and scenarios to make effective decisions. 2 Book early and SAVE 10%: +27 21 700 3571 www.spintelligent-training.com
Agenda DAY 1 INTRODUCTION AND OVERVIEW Introduction, overview and case study outline Common modelling errors Systematic Design Method Model design and structure key steps Practical: reviewing model examples Setting up the model; starting position and overall objective(s) Input sheets, calculation areas and output sheets (Key excel features and techniques) Setting up multiple currencies Practical: producing a model framework using best practice Production forecast Production sales and volume Fuel input volumes, prices and gross costs Building in efficiency and availability factors Who should attend? The course is designed to support analysts within an organisation s finance, investment or treasury divisions to create and analyse financial models on a consistent and focussed basis: Project finance analysts Capital spend analysts and controllers Financial analysts in power sector companies Analysts working for national regulators in the power sector Bidders for new generation capacity projects for the Department of Energy Managers responsible for budgeting and forecasting in the power sector Practical: adding production assumptions into the model Fixed assets Depreciation of fixed assets Schedules and workings Practical: CAPEX and depreciation schedules DAY 2 PROJECT FINANCING AND CASH Financing and loans Loan drawdowns; rate, terms and repayment Dealing with any circular references Debt amortisation schedules Practical: Loans schedule with balance sheet, cash flow and income statement inputs Adding income statements and balance sheets Model checks on consistency Minority shareholders Practical: completing and checking the initial statements Tax and dividends overview of modelling techniques for tax Capital allowances Tax loss carry-forwards Disallowed expenditure Payment of taxes by instalments Tax shield of interest Calculating dividends, cash and distributable earnings Practical: adding tax and dividend sheets Cash flow Direct and indirect cash flow methods Cash flow waterfalls Cash flow to equity and debt providers Error checking Practical: creating cash flow and returns 3
Agenda DAY 3 DERIVING RESULTS Ratios Loan life / project life ratio Residual cover Annual debt service ratio Principal and debt cover Interest cover Accounting ratios - profitability, liquidity, efficiency, structure Practical: ratios sheet Cost of Capital Review of cost of capital theory Capital Asset Pricing Model constituents Discussion and agreement on Weighted Average Cost of Capital (WACC) inputs Betas and risk Mathematical derivation of WACC Practical: adding WACC to case Discounted cash flow Methods of adding terminal value Producing an equity valuation Practical: adding equity valuation to the template Risk and sensitivity Scenarios Sensitivity Goal seek method What-if analysis Dynamic changes Practical: Adding sensitivity and scenarios Management summary Producing management summary Returns analysis Required model documentation Tracking changes Wrap-up Questions and answers IN-HOUSE TRAINING Want this programme in-house? As market leaders in professional development and continuous improvement, the Spintelligent Training Academy offers you, the power professional, this unique opportunity to enrich your performance with sought after specialist skills, from an expert facilitator, who will be delivering your tailored training programme at your premises. For more information on creating your bespoke training programme please enquire by email to training@spintelligent.com or call +27 21 700 3571 BENEFITS OF IN-HOUSE Expert Facilitation Tailored programmes focused on your business challenges Comprehensive Needs Analysis (TNA) Materials customised around your documentation, people and processes Blended solutions including online learning, one-on-one coaching and face-to-face training Conducted at a location of your choice High Return on Investment for a group of five or more participants Programmes from one day to one year Enquire today: +27 21 700 3571 training@spintelligent.com 4
About the Spintelligent Training Academy Skills and knowledge development are key to driving growth through increased innovation in all industries. Continuous training provides a return on investment for both the individual and the business. At Spintelligent Training Academy, we target the core areas that are vital to the success of a business operating within the energy sector. Experienced training instructors with a proven track record in the power and utilities industry deliver content that will empower individual high performers, teams, managers and executives. Our solutions are designed to produce tangible results through sustainable improvement and inject energy and innovation into performance. Pre-course Work Delegates will receive practical pre-course information to encourage understanding of course content and facilitate the learning process. Questionnaires, case study materials and a preview of the training material will be included to orientate participants towards learning. Delivery Style A unique feature of this workshop is a continuous case study. Participants will be given ample opportunity to discuss and practically apply the relevant strategies to this case study, through various exercises and forms of application. You will experience dynamic, interesting and pro-active sessions, cases studies and discussions on innovative concepts and practices, as well as useful practical examples of projects from around the world. The faculty combines extensive industry experience with engaging delivery to ensure you leave the course with new skills that will improve performance. Post-course Each participant will be given a certifcate of attendance, CPD certified, on completion of the course. Booking price $3,000 - Full price $2,700 - Early booking price Group booking discounts: Group bookings of 2-4 participants receive a 10% discount Group bookings of 5+ participants can benefit from even better rates. Please contact us directly for further details: training@spintelligent.com Accommodation Participants are responsible for arranging their own accommodation. Where possible, Spintelligent Training Academy has special rates with certain hotels, please contact us for further information. Venue The course will take place at The Westin Hotel, Cape Town, South Africa. Participants will be provided with lunch and refreshments each day. Similar courses run by Spintelligent Training Academy Financing Power Projects Nigeria 16 18 March 2015, Lagos, Nigeria; 8 10 October 2015, Abuja, Nigeria Financing Power Projects 14 15 May 2015, Cape Town, South Africa; 8 9 October 2015, Nairobi, Kenya Financial Risk Management 20 21 July 2015, Johannesburg, South Africa; 25 26 January 2016, Accra, Ghana Finance for Non Finance Managers 7 8 September 2015, Lagos, Nigeria; 8 9 October 2015, Nairobi, Kenya Full course calendar available at www.spintelligent-training.com. 5