Company presentation
at Budapest Stock Exchange
Gábor Vilhelm
Head of Treasury and Investor Relations
09 May, 2012
Agenda
• Introduction of the Company
• Achievements of 2011
• 2012: Year of consolidation and operational excellence
1
Fast growing E-Star provides complex
alternative energy solutions for a wide customer base
Business model
Milestones
2000
Client proposition
Establishment
Segments
•
Efficient, district heating services
•
Public lighting
2005
Aggressive growth
•
Energy trading
2007
IPO
•
Industrial clients (including blue chips)
Customers •
Municipalities
2009
International expansion +
SPO
•
Residential clients
2010
Further international growth
(Romania)
•
Hot water
•
Steam
2011
Dual listing at Warsaw,
SPO (EUR 8M)
Closing bond program. I
(EUR ~33 M), EETEK
Acquisition (EUR 21M)
•
Electricity
•
ESCO
•
Energy outsourcing
•
Public lighting
2012
Operational excellence and
year of consolidation
Main
Products
2
Sustainable business model targeting mid-market
Business model
Mid-sized projects
(niche segment)
Utilization of renewable
sources
• 20-100 MW heat
capacity
• € 5-35 million annual
investment per project
Combined Technology
Mix
Annual heat
curve
Gas boiler
Long-term contracts
• 15-49 years
Local heat
market
Changes in fuel cost
naturally hedged
• Price mechanism based
on change in fuel price
Biomass boiler
Co-gen
3
E-Star’s technology free knowledge-based alternative
energy business creates a keystone role for the company
Municipality
Residential
Gas boilers
Industrial
Gas engines
Biomass Turbines Geothermal
boilers
/ inert gas
Biogas
Geothermal
Biomass Natural gas
Coal
4
Diversified international project portfolio including
wide range of clientele in all sectors
EC Mielec
• Heat and electricity
• Capacity: 170.5 MWth and
24.4 Mwel
Gheorgheni
Mielec
Euro-Energetyka
Energy distribution and trading
Zalau
Gorlice
EC Gorlice
• Heat and electricity
• Capacity: 87.2 MWth and 7.0
Mwel
Targu
Mures
Győr
Rába-Audi Project
• Energy and utility services
• Blue-chip industrial
consumers (Rába, Audi,
Dana)
• Capacity: 8.4 MWth and 8.5
MWel
Public lighting
ESCO
District heating
5
Diversified revenue sources with blue chip industrial
clientele ensure outstanding risk management
Distribution of revenues based on 2011
Residential
Industrial
Municipal
Total
Hungary
3%
23%
11%
37%
Poland
0%
39%
8%
47%
Romania
11%
0%
5%
16%
Total
14%
62%
24%
100%
Reliable International Blue Chip Industrial Clientele
6
E-Star has attracted international investment interest,
as it has been becoming an industry leader
International
• World Finance
TOP 100
(2010)
• Only member
from CEE
region
• Others include:
– CitiGroup
– Apple
– Amazon
– Coca Cola
• Listed on
Warsaw Stock
Exchange
(March 2011)
Hungary
• „Team of Stock
Exchange”
(2009)
• Largest stock
price increase
(2010)
• BUX index
membership
(2010)
• Pegasus price
in market
leader category
(2010)
7
EBITDA has trippled and revenue has grown by six
fold from 2008 to 2011.
Revenue (mln EUR)
79 %
CAGR
11.5
14.0
2008
2009
Gross margin (mln EUR)
65.5
28.5
2010
2011
EBITDA (mln EUR)
39 %
CAGR
7.6
5.3
4.4
8.2
11.34
2008
2009
2010
*
2010
47.1
Equity*
6.4
Financial liabilities
2.3
2009
2011
Equity and financial liabilities (mln EUR)
2.4
2008
42.7
113%
CAGR
2011
7.4
2008
9.1 10.8
2009
27.6
14.4
2010
18.3
2011
After the consolidation of EETEK, including 10% equity increase through an SPO.
(Each of the 240.000 shares were sold for HUF10.000)
8
Agenda
• Introduction of the Company
• Achievements of 2011
• 2012: Year of consolidation and operational excellence
9
E-Star closed a successful 2011
in line with an aggressive growth strategy
2011
•
Entering
Poland
2012
•
Consolidation
•
Operational
excellence
2013
•
2014
Entering 4th
country
•
Bring projects to •
perfection
•
Further growth
2015
Entering 5th
country
2011 greatest achievements
• Technical listing at WSE
• Entering Poland by EETEK
acquisition (EUR 21 M + EUR 4.5 M)
• New Gas Cogeneration – 8.4 MWe
• SPO – EUR 8 M (10%)
• Organizational improvement – 500
FTEs
• Closing E-Star HUF nominated Bond
Program – EUR 33.3 M
• Re-branding: from RFV to E-Star
Alternative Plc.
• Successful bank financing (BZ WBK)
– EUR 4 M + non-refundable state
subsidy
• Restructuring to reach cost
efficiency (still under process)
10
Agenda
• Introduction of the Company
• Achievements of 2011
• 2012: Year of consolidation and operational excellence
11
Aggressive consolidation measures 2012
2011
Operations
management
• Financial and
operational
controlling
2012
2013
• Operating
• Supervising all
Management
operating project
System
• Operational
excellence through • Controlling cash
increased
costs
efficiency and cost • Set up of gas
control
trading unit
• Extended board to
• Optimization of
support business
organization and • Country 4#
development
internal
company set-up
• Polish company
Corporate
processes
• Building new
set -up
development
• Setting up venture
innovation
• Re-branding
capital fund
capacities
• SPO & BOND
subsidiary
• Expansion at
current project
• Entry: Poland
sites
Business
district heating
• Significant cost
development • Growth return in
cutting
Hungarian ESCO
• Review of
strategy
Operational
Entering Poland
excellence
2014
• Developed
•
functional spikes
• Operational
•
excellence through
increased efficiency
and cost control
2015
Enhancing capital
discipline
Business service
center
development
• Country 5#
company set-up
• Regional
• Improved project
procurement &
implementation and
supply chain
know-how transfer
management
• Shared Value
Creation (SVC)
• Entry: country #4
• Entry: country #5
• Market
• Entry into new
• Regional
consolidation in
segments within
consolidation
core segments
existing countries
• Technology
• New R&D projects,
• Building new
flagship in
cutting edge
industrial client
alternative energy
solutions
portfolio
within CEE
Regional champion &
Entering country #4
Entering country #5
12
E-Star is reviewing it’s investment programs and considering
divesting opportunities according to operational excellence
Hungary
Poland
Romania
•
•
•
•
35 Municipal costumers
More than 180 project sites
Operation with a 11-year history
ESCO, Public Lightning, DH, and RESZ
•
•
•
•
•
Activity-based on concession rights
Exclusive DH supplying to municipalities
DH and electricity for industrial consumers
Energy production and trading
Coal based CHP Cogen and brand new Gas Cogen
bought for PLN 26,7 M (PLN 13 M non returnable
subsidy)
•
•
•
•
•
•
•
Activity based on 35-49 years concession rights
Delays in CAPEX program which lasts until 2016
25% expected ROE due to country risk factor
Cheap biomass
Impressive value creation
DH and electricity
Clientele: municipal, residential, industrial
13
Consolidation measures in 2012.
Reduction of employee
costs at HQ
Reduction of external
advisory and legal fees
Other
•
•
•
•
Number of employees have been reduced by 38 %
Employee running rate costs reduced by
EUR 800 k annually
E-Star froze wages and salaries in 2012
No bonuses were paid for 2011 financial year
• Savings reach EUR 2.5 M annually
• IT services have been outsourced
• E-Star contracted gas supply agreement on
cheaper price
• E-Star is being optimised its operation in PL
14
E-Star’s financing which is considered to be a key role
of success relies on four strong pillars
EQUITY INCREASE
•
•
Subsidies and EU funds
•
Zero-dividend policy
SPO in form of private placement of
~EUR 8 M completed on June 9, 2011
•
PLN 13 M non returnable subsidy for
gas cogen engines set up at Mielec project
More subsidy funds are expected to be
secured for de-dusting programme
Financing structure:
• Support business development
• Maintain strong Balance Sheet
• 30% Equity – 70% Debt
Domestic and int. BOND program
•
•
•
•
Provides financing for development of new
projects
E-Star aims to fund a constant proportion of our
balance sheet from the bond market
2010-11: ~ EUR 33.3 M issued in Hungary,
pioneer role on market, 90% to institutional
investors, 10% to retail clients
2012: EUR 9 M planned to be issued in Poland
Group-level BANK refinancing
•
•
•
Loan structure adjusted to the maturity
and cash flow generation potential of our
current projects
Diversified banking relations
Regional, group-level cash pooling and
cash flow management
15
Refinancing and financing programs advance well
Refinancing Acquired
Polish Projects
• EUR 9 M Bond financing
• As an alternative to the bond programme:
bank financing provided by E-Star’s Polish
house bank institution in the same amount
(EUR 9 M)
• Closing expected by 2012 H1
Refinancing Acquired
Hungarian Project
• Syndicated refinancing of RESZ project lead
by E-Star’s house bank in the amount of EUR
6,5 M bank facility
• VAT financing in addition
• Raising OVD limits
• Closing expected by 2012 H1
16
Contact
E-Star Alternatív Nyrt.
1122 Budapest Hungary, Székács utca 29.
mobile: +36 20 779 7405, +36 20 779 7406
phone: +36 1 279 3551
fax: +36 1 279 3550
email: info@e-star.hu, url: www.e-star.hu
17
Thank you for your attention!