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Interim ResultsH1 2011
All numbers in this presentation exclude exceptional items and specific IAS 39 mark to market movements, unless stated otherwise
Astoria II
IntroductionDirk Beeuwsaert, Chairman
Astoria II
3INTERNATIONAL POWER Interim Results 2011
A strong position in high growth markets
Committed construction programme
Significant upside from merchant market recovery
Financial strength
Well positioned for growth
*Pro forma combined gross MW for IPR and GDF SUEZ Energy International
75,000
70,000
60,000
50,000
45,000
Gross (MW)*
2009 2010 2011
65,000
55,000
20132012
Significant growth in capacity
80,000
85,000
90,000
4INTERNATIONAL POWER Interim Results 2011
A well balanced portfolio
A diversified portfolio with strong track record
Leading positions in key markets
Operational expertise – asset management and construction
By fuel type (%) By contract type (%)
All GW numbers are on a net basis as at 30 June 2011 and represent operating assets only
By geography (%)
49
6
41
4
Gas
Coal
Renewable
Hydro
OilPumped storage
62
4
16
9
63
Short-term/uncontracted
Long-termcontracted
WindPumped storage
North America
AsiaLatin America
META
Europe
Australia
1579
16
22
31
H1 2011 ResultsMark Williamson, Chief Financial Officer
All numbers in this document are presented on pro forma basis, and exclude exceptional items and specific IAS 39 mark to market movements, unless stated otherwise
Astoria II
6INTERNATIONAL POWER Interim Results 2011
Introduction
2011 Interim highlights− before impact of purchase price adjustments (PPA)− comparable to consensus− results in Euro and Sterling
Purchase price adjustments− Fair value of IPR assets and liabilities on 3 February 2011
Reported results− compliance with accounting rules− combined business only from 3 February− comparability of underlying performance difficult
Pro forma results − assume acquisition on 1 January 2010− PPA included in 2010 and 2011− supports comparability between periods
Investor Conference
7INTERNATIONAL POWER Interim Results 2011
H1 2011 pro forma financial highlights- before the impact of purchase price allocation adjustments
Good financial performance
Adjusted Current Operating Income of €1,598m (H1 2010: €1,474m)
− improvement from Latin America and North America
− lower contribution from UK-Europe
EPS of 13.9c/12.1p (2010: 13.36c/11.7p)
Free cash flow of €1,048m (2010: €1,336m)
− working capital outflow €335m
Interim dividend of 4.4 cents per share
Adjusted COI
2010
2011 €1,598m
€1,474m
EPS
2010
2011 13.9 € cents
13.4 € cents
8INTERNATIONAL POWER Interim Results 2011
Purchase Price Adjustments (PPA)
IPR Pre-Combination
Book Value
Net Goodwill€1.6bn
IPR Fair Value
PP&E€0.6bn
Other(€0.2bn)
€5.0bn
€7.0bn
Balance Sheet adjustments3 February 2011
€m H1 2011
Pre PPAAdjustment
H1 2011
Impactof PPA
Adjustment
Post PPAAdjustment
EBITDA
Depreciation, amortisation, other
Current Operating Income
Interest
Tax
Income from Associates
Profit for the year
Non controlling interests
Net income Group share
EPS cents
Adjusted COI
2,182
(705)
1,477
(370)
(315)
121
913
(204)
709
13.9c
1,598
(12)
(127)
(139)
53
35
12
(39)
9
(30)
(0.6c)
(127)
PPA Adjustment Impact on EPS(cents)
Pro Forma Income Statement
(0.7c)
2,170
(832)
1,338
(317)
(280)
133
874
(195)
679
13.3c
1,471
2011
2012 2013 2014 2015
0.4c
0.6c
0.1c 0.2c
12 mths
9INTERNATIONAL POWER Interim Results 2011
Pro forma Income Statement(Post impact of Purchase Price Allocation adjustment)
Adjusted COI (€m)2,3
North America264
Asia178
Latin America663
META179
Europe149
Australia97
43%
6%
12%
12%
10%
17%
H1 2010€mSix months ended 30 June
% ChangeH1 2011€m
1 Current Operating Income (COI), 2 Adjusted COI is COI adjusted for underlying net income from Associates3 Percentages stated before Corporate costs
2011€m
2010€m
1,338
133
1,471
COI1
Associates
Adjusted COI2
1,231
119
1,350
EBITDA
Depreciation, amortisation, other
Current Operating Income
Interest
Tax
Income from Associates
Profit for the year
Non controlling interests
Net income Group share
EPS (cents)
Effective tax rate
10%
12%
9%
4%
(37%)
12%
7%
(19%)
4%
2,170
(832)
1,338
(317)
(280)
133
874
(195)
679
13.3c
26%
1,973
(742)
1,231
(329)
(204)
119
817
(164)
653
12.9c
22%
10INTERNATIONAL POWER Interim Results 2011
NorthAmerica
€91m
€1,350m
Corporate€9m
€1,471mUK-
Europe (€120m)
META(€6m) Australia
(€29m)
Asia€17m
H1-on-H1 Adjusted COI change
H1 2011H1 2010
Latin America€159m
1 Pro forma and stated after the impact of fair value adjustments2 Current Operating Income (COI),, Adjusted COI is COI adjusted for underlying net income of associates
11INTERNATIONAL POWER Interim Results 2011
Latin America
Regional Adjusted COI contribution1
Adjusted COI €m1
43%
H1 2011€m
H1 2010€mSix months ended 30 June
Change%
Pro forma
863
(199)
(2)
662
1
663
649
(143)
(3)
503
1
504
33
32
-
32
EBITDA
Depreciation & amort’n
Provisions & other
COI
Associates
Adjusted COI Strong performance in Brazil− contract escalation, including inflation− power purchase cost reduced through
optimisation− first unit at Estreito commissioned April
2011
First time full six month contribution from LNG, Chile
Panama coal conversion project - BLM− returned to service March 2011− US$36m liquidated damages H1 2011− loss in 2010 reflects BLM
1 Percentage of Adjusted COI stated before Corporate costs2 % of operational net capacity, where long term contracted > 3 years
504
663
H1 2010
H1 2011 75%
80%Brazil
9%Brazil
12%
15%Chile
ChilePeru
10%Peru
4%
Other
Other
-5%
Contract type2
Short term /Uncontracted
7%
Long term92%
Wind 1%
12INTERNATIONAL POWER Interim Results 2011
Regional Adjusted COI contribution1
17%
1 Percentage of Adjusted COI stated before Corporate costs2 % of operational net capacity, where long term contracted > 3 years
North America
H1 2010
H1 2011
Adjusted COI €m1 H1 2011€m
H1 2010€mSix months ended 30 June
Change%
Pro forma
502
(250)
7
259
5
264
415
(240)
(13)
162
11
173
21
60
(55)
53
EBITDA
Depreciation & amort’n
Provisions & other
COI
Associates
Adjusted COI Gas significantly improved− higher LNG prices in Asia and Europe
markets with 10 additional cargo diversions
− positive tariff renewals for Mexican LDCs
Retail ahead of last year− low wholesale costs and higher
volumes
Generation in line with last year
17.6% equity interest and shareholder loan in Noverco sold for CAD$371m
40%
59% 173
264
Generation
15%Generation
45%
28%Gas
Gas Retail
13%Retail
Contract type2
Short term/Uncontracted
71%
Long term18%
Wind 2%PS 9%
13INTERNATIONAL POWER Interim Results 2011
UK-Europe
H1 2010
H1 2011
Adjusted COI €m1
180
H1 2011€m
H1 2010€mSix months ended 30 June
Change%
Pro forma
336
(211)
5
130
19
149
416
(183)
5
238
31
269
(19)
(45)
(39)
(45)
EBITDA
Depreciation & amort’n
Provisions & other
COI
Associates
Adjusted COI Lower achieved UK spreads − higher priced contracts rolled-off in
2010
Lower wind yields in Italy
Elecgas 420MW CCGT− first time contribution
Agreed sale of T Power in Belgium
269
14977%
88%Generation
Generation23%
Retail
12%Retail
Regional Adjusted COI contribution1
10%
Contract type2
Long term22%Wind 13%
PS 17%
1 Percentage of Adjusted COI stated before Corporate costs2 % of operational net capacity, where long term contracted > 3 years
Short term/Uncontracted
48%
14INTERNATIONAL POWER Interim Results 2011
Middle East, Turkey and Africa
H1 2010
H1 2011
Adjusted COI €m
185
179
H1 2011€m
H1 2010€mSix months ended 30 June
Change%
Pro forma
158
(35)
(4)
119
60
179
182
(36)
2
148
37
185
(13)
(20)
62
(3)
EBITDA
Depreciation & amort’n
Provisions & other
COI
Associates
Adjusted COI Lower development fees relative to H1 2010
First-time contributions from Fujairah F2 and Marafiq
Low temperatures drive higher demand at Izgas
Regional Adjusted COI contribution1
12%
Contract type2
Long term100%
1 Percentage of Adjusted COI stated before Corporate costs2 % of operational net capacity, where long term contracted > 3 years
15INTERNATIONAL POWER Interim Results 2011
Asia
H1 2010
H1 2011
Adjusted COI €m
161
178
H1 2011€m
H1 2010€mSix months ended 30 June
Change%
Pro forma
172
(40)
(2)
130
48
178
158
(36)
-
122
39
161
9
7
23
11
EBITDA
Depreciation & amort’n
Provisions & other
COI
Associates
Adjusted COI Improved retail and spot prices in Singapore
Glow Energy− lower industrial tariffs − hydro plant - drought in Laos − CFB3 Coal plant commissioned − TNP transfer to Glow in Q3 2011
Higher availability and dispatch at Paiton Energy
Regional Adjusted COI contribution1
12%
Contract type2
Long term78%
Short term/Uncontracted
22%
1 Percentage of Adjusted COI stated before Corporate costs2 % of operational net capacity, where long term contracted > 3 years
16INTERNATIONAL POWER Interim Results 2011
Australia
H1 2010
H1 2011
Adjusted COI €m
126
97
H1 2011€m
H1 2010€mSix months ended 30 June
Change%
Pro forma
196
(97)
(2)
97
-
97
215
(86)
(3)
126
-
126
(9)
(23)
-
(23)
EBITDA
Depreciation & amort’n
Provisions & other
COI
Associates
Adjusted COI Mild summer, no drought conditions and limited price volatility
Hazelwood Unit 5 returned to service in June 2011
SEAGas sold November 2010 Continued strengthening of AUD
6%
Regional Adjusted COI contribution1
Contract type2
Wind 1%Long term25%
Short term/Uncontracted
74%
1 Percentage of Adjusted COI stated before Corporate costs2 % of operational net capacity, where long term contracted > 3 years
17INTERNATIONAL POWER Interim Results 2011
Interest charge relating to debt
excludes derivatives, cash collateral and the impact of measurement at amortised cost
Gross debt Cash Net debt
Average debt / cash H1 2011
Financial expenses / income
Capitalised interest
Other profit adjustments
Interest related to cash and debt
Interest related to cash and debt
4,645
177
-
(131)
46
2.0%
(17,133)
(494)
(140)
142
(492)
5.7%
(12,488)
(317)
(140)
11
(446)
7.1%
€m
18INTERNATIONAL POWER Interim Results 2011
H1-on-H1 free cash flow change
Working capital movements − strong inflow in H1 2010− outflows in H1 2011
– Latin America - start of operations at BLM and timing of fuel payments across the region
– Asia - receivables in Thailand collected in early July– Australia – trading support requirements in falling market
Interest lower following refinancing at Coleto Creek and IPA Central
H1 2010
Dividendsfrom
Associates€17m
Working Capital(€500m)
€1,048m
€1,336m
Tax paid€9m
Net Interest
€81m
H1 2011
Other (€1m)
RestructuringCosts(€46m)
EBITDA €197m
Maintenance
Capex(€16m)
H1 2010 €165m
H1 2011
(€335m)
LT employee benefits(€29m)
19INTERNATIONAL POWER Interim Results 2011
H1 Capital expenditure
CASH FLOW GENERATION DETAILS
1 Negative financial investment figures represent net loan repayments by associates.
MaintenanceCapex€m
51
68
21
4
11
59
-
214
550
Latin America
North America
UK - Europe
META
Asia
Australia
Corporate costs
Total, H1 2011
Total, full-year forecast
GrowthCapex
685
74
51
2
155
1
-
968
2,600
FinancialInvestments1
(71)
(63)
3
(2)
6
-
(16)
(143)
-
H12011
665
79
75
4
172
60
(16)
1,039
3,150
Maintenance capex annual run-rate €550m
20INTERNATIONAL POWER Interim Results 2011
Capital structure & liquidity
Strong credit metrics at 30 June 2011− Net Debt/LTM1 EBITDA 2.9x− Debt Capitalisation 37%− interest cover 4.2x
Investment Grade credit rating confirmed by Moody’s (Baa3), Standard and Poor’s (BBB-)
GDF SUEZ financing facilities fully operational - £3.1bn Share of Associates Net Debt €3,653bn Corporate cash €1.2bn
1 Last Twelve MonthsDebt and net debt exclude derivatives, cash collateral and the impact of measurement at amortised cost
Analysis of Gross Debt by Type (€bn)
Analysis of Gross Debtby Region (€bn)
North America11%
Asia13%
LatinAmerica27%
META9%
Europe19%
Australia9%
1.91.5
2.1
1.4
3.11.8
4.5
Corporate12%
€16.3bn€16.3bn 10.8
1.1
0.8
3.6
Bonds
GDF SuezDebt
OtherBorrowings
Bank Loans
21INTERNATIONAL POWER Interim Results 2011
FX Hedging
FX hedging policy− transactions are fully hedged on committing the cash flows− translation exposure mitigated with debt− specific balance exposure hedged on an exceptional basis
Rationale for policy− IPR’s investment proposition includes currency exposure− asset base is diversified across a number of currencies− ability to mitigate earnings volatility is limited− specific currency exposures may be hedged− market will be updated on material positions hedged
22INTERNATIONAL POWER Interim Results 2011
Conclusion
Highly visible earnings and cash flow− half of capacity long term contracted− adjusted COI of €1,471m (2010: €1,350m)− free cash flow of €1,048m (2010: €1,336m)− working capital net out flow of €335m in H1
Strong balance sheet− Investment Grade rating achieved
Well positioned for continuing growth
Philip Cox, Chief Executive Officer Group update
Astoria II
24INTERNATIONAL POWER Interim Results 2011
Overview
Strong financial performance
Robust operational performance
Combination with GDF SUEZ progressing very well
Outperformance on synergies
Large scale construction programme
Active development programme to deliver further sustained growth
25INTERNATIONAL POWER Interim Results 2011
Outperformance on synergies
Strong progress on financial and operational synergies
Expect to outperform 2016 target of €197m by €18m to €215m
− €46m realised in H1 2011− total savings in 2011 expected at €103m
vs initial target of €90m − total savings in 2012 expected at
€167m vs initial target of €154m
No change to one-off implementation cost of €155m
Synergies (€m)
£ to € conversion rate of 0.8681 used for 2011£ to € conversion rate of 0.8368 for years 2012 to 2016
50
100
250
0
200
150
Original forecast
2011 20162012
Current forecast
26INTERNATIONAL POWER Interim Results 2011
Jirau – project background
1,728MW (net), 3,450MW (gross) project − under construction: 46 turbines x 75 MW each
− 1,975MW assured energy corresponding to 44 units− 69.8MW (minimum) assured energy corresponding
to 2 new units
70% contracted under 30 year PPA starting 2013− contracted output ramps up to maximum level of
1,383MW assured energy in 2016− contract price R$84/MWh (as at June 2011) indexed to
inflation 10% increase since January 2010
Energy to be sold − balance of energy (net of PPA) to be sold in the free
market− additional assured energy for units 45 and 46 to be sold
via new energy auction
Expansion - further 4 units under analysis for potential investment
− 75MW each; will take total number of units to 50− 139.5MW (minimum) assured energy allocated to 4
units
All 6 expansion units qualified for new energy auction (regulated)− represent 209MW (minimum) assured energy for 6 units− price cap of R$102/MWh
Energy sold to distribution companies (30yr PPA)
Energy to be sold in the free market
2012 2016201520142013
832
1,162 1,383
1,143 813 592
445
70%
30%
Free Energy Profile(illustrative only)
2012–2016 Assured Energy for 44 units (MW )
27INTERNATIONAL POWER Interim Results 2011
Jirau – project update
Construction has returned to normal levels− 15,000 workers back on site
River deviation – a key milestone on track for H2 2011
Negotiations ongoing with construction contractor− Project costs− Project timing project expected to start phased commissioning in H2 2012 full assured energy level expected to be reached in H2 2013
Transmission line environmental license issued in June 2011− construction underway
Impact on 2012 and 2013 EBITDA− EBITDA contribution from Jirau expected to be lower by €100m in 2012− no material impact in 2013
28INTERNATIONAL POWER Interim Results 2011
Jirau – attractive fundamentals
Market fundamentals and trends expected to drive up free market prices
− continued strong demand growth, fuelled by economic expansion
− potential reliance on more expensive thermal sources
− pricing to reflect overall rise in construction costs and stricter environmental requirements
− potential for expanded free market
CDM revenues
Commercial optimisation by Tractebel Energia− strong track record in pricing optimisation
Project expansion to provide additional assured energy
Jirau, project spillway
29INTERNATIONAL POWER Interim Results 2011
Construction programme progress
Major programme with 7.6GW (net) and 21.8GW (gross) under construction as at 10 August 2010
Overall we are on track to deliver the 2013 EBITDA estimate included in our August 2010 disclosure
− £872m (€1.0bn)
Good progress on 2011 milestones
Several projects have commenced operation to date in 2011
In total over 2GW of new net capacity to be operational during 2011
HUBCO Narowal37MW
Synergen24MW
Estreito 137MW
Bahia las Minas Conventional4MW
IPR Europe Wind2MW
Dos Mares19MW
Glow Phase 5236MW
Estreito 237MW
Mejillones CTA79MW
Dos Mares 271MW
Shuweihat 2302MW
Pointe-Aux-Roches58MW
NorthfieldMountain2MW
Estreito 3-475MW
Al Dur373MW
H1 2011 H2 2011
Ras Laffan C179MW
Mejillones CTH47MW
T-Power140MW
Astoria 2173MW
Operational (net MW)1 August 2011
Asia
Australia
Latin America
Monte Redondo10MW
META
UK - Europe
North America
Elecgas210MW
30INTERNATIONAL POWER Interim Results 2011
New projects
1,181MW (net) – 1,426MW (gross) of additional projects won / entered construction
− incremental to the construction programme announced in August 2010− representing growth capex of €1.6bn
Gross MW
524
145
184
375
198
Peaker OCGT in Peru
Wind projects in Brazil
Wind projects in Canada
Gas/oil CCGT in Pakistan
New wind PPAs in Canada (Ontario)
Net MW Expected COD
324
100
184
375
198
2013
2012
2011-2013
2012
2013
31INTERNATIONAL POWER Interim Results 2011
Latin America
Output largely contracted mid to long-term with indexed PPAs
Strong economic growth and high electricity demand continues
Construction programme (net MW)− 2 units of Estreito online (75MW)− 2 new coal plants in Chile operational
(126MW)− Bahia Las Minas repowering in Panama
completed (4MW incremental)− Dos Mares to be fully commissioned by
end of 2011 (118MW)− peaker in Peru (324MW)− wind projects in Brazil (100MW)
Pipeline of development opportunities (gross MW)− hydro projects (1,200MW) and biomass
(30MW) in Brazil
− coal in Chile (375MW)
Brazil (installed capacity MW)160,000
4,000
8,000
20,000
0
16,000
12,000
120,000
2011 2012 2013 2014 20152010
Chile, Peru (installed capacity MW)
Projected Capacity Additions
2011 2012 2013 2014 2015
80,000
40,000
0
Brazil: 6,000-6,500 MW/year
2010
Chile: 500-600 MW/year
Peru: 550-650 MW/year
Source: CEEMS
H2 LD income in Panama $36m in
H1
32INTERNATIONAL POWER Interim Results 2011
North America
Generation
Well positioned to capture market upside in ERCOT, PJM and New England− PJM: stronger performance of peaking
plants in June, driven by hot weather– significant improvement in 2014/2015
forward capacity prices in PJM West, following recent auction
− Texas reserve margin expected to reach equilibrium levels in 2014
Growth (gross MW):− 198MW of new wind PPAs awarded in
Canada– further pipeline of opportunities (over
400MW)− Mexico: development projects over 300MW
Retail
Expanding customer base – entered Ohio market, with further growth in Pennsylvania
Gas
Taking advantage of wide international gas/oil spreads via cargo diversions primarily to Europe/Asia
LNG cargodiversions
H12010
H12011
2
12
Algonquin Basis* ($/mmBtu)
H12010
H12011
0.7
1.5
* Premium to Henry Hub
H2 Lower LNG diversions in H2 Insurance receipt $30m (Northfield
Mountain) Improved generation outlook
33INTERNATIONAL POWER Interim Results 2011
UK-Europe
UK
Dark spreads benefitting from higher gas price and lower CO2 price, although coal prices higher - but spark spreads remain weak
Temporary reduction of 3GW of capacity helping to reduce short-term oversupply (includes Teesside)
IPR plant performing well, providing high level flexibility to the system
Retail business focus on higher margin C&I customers
UK Electricity Market Reform White Paper: − greater clarity with capacity payment mechanism
to ensure security of supply− much will depend on the detailed design and implementation
Growth opportunities in onshore wind (over 300MW gross)
Continental Europe
Portfolio of long-term contracted assets performing well
T-Power (Belgium) – divestment of 33% interest expected Q4 2011
First Hydro, UK
H2 Saltend annual re-pricing in
H2 Higher margin contracts roll-
off in Q4
Peak retail demand in Q1
34INTERNATIONAL POWER Interim Results 2011
META
Operational assets performing well with high levels of availability for both power and water
Over 5.5GW (gross) and 148MIGD (gross) under construction
− Bahrain: Al Dur CCGT− Oman: Barka 3 and Sohar 2 CCGT − Saudi Arabia: Riyadh CCGT− U.A.E.: Shuweihat 2 CCGT
Strong further growth (gross MW)− preferred bidder for Tarfaya (300MW wind) and
Safi (1,200MW coal)− preferred bidder for oil-fired peaking plants in
South Africa (1,027MW)− 7GW of new tenders/bids under preparation− 20GW of bids visible in the medium term− further growth potential through 16GW
privatisation process in Turkey
Ras Laffan
GCC actual and projected nominal GDP ($bn)
20112010 2012 2013 2014 2015 2016 2017
Source: Global Insight, WM, MEED, Moody’s
180.8211.2
232.1255.0
277.7301.7
325.7349.0
10% p.a
Marafiq
35INTERNATIONAL POWER Interim Results 2011
Asia
Portfolio of largely long-term contracted assets performing strongly
Strong economic growth fuelling demand for power generation
Transfer of TNP business to Glow in Q3 2011
Construction programme progressing well− Hubco Narowal (oil-fired) commissioned
in H1 (37MW)− Glow Phase 5 (natural gas CCGT
cogeneration) expected to reach COD in H2 (236MW)
Growth (gross MW)
Indonesia− 3 X 220MW geothermal projects − 1,200MW coal project
Vietnam− coal projects over 1,000 MW− gas project 2,000 MW
Pipeline of further opportunities across the region
Average GDP growth 2011-15 (%)
Singapore Pakistan Thailand Indonesia Vietnam
8
0
Source: Economist Intelligence Unit
6
4
2
36INTERNATIONAL POWER Interim Results 2011
Australia
Proposed Climate Change Plan announced in July
Legislation to be tabled in Parliament in November 2011
Brown coal-fired power generation to be eligible for carbon allowances (cash and credits) for the first five years starting July 2012
Based on current proposal, impact of Plan expected to be cash flow positive and broadly earnings neutral over the initial five year period
Clearly a significant proposal for our Australian business, but not expected to be material in Group context
Potential ‘contract for closure’ to be reviewed for Hazelwood
Power market reaction: Forward prices are already reflecting a CO2 cost of around A$15-16 per MWh
FebJan Mar Apr May Jun Jul
50
40
25
30
2011
Victoria Baseload Forward Curve (A$/MWh)
45
35
H2 2012
H2 Largely contracted
37INTERNATIONAL POWER Interim Results 2011
FebJan Mar Apr May Jun Jul
Well positioned to capture recovery in Merchant Markets Key common trends
− spreads/prices well below new entrant levels
− very limited new build− ageing plants - need for replacement
capacity− capacity retirements driven by increasing
environmental regulation − tightening reserve margins
IPR has a flexible and efficient portfolio across the merit order
− deep market knowledge− skills across the value chain− growing ‘system player’ in all merchant
markets
Uplift in PJM Capacity Prices$/MW-day (Sharp Revision)
June 2013 –May 2014
140
0
40
120
100
80
60
20
June 2014 –May 2015
ERCOT North On-Peak Spark Spread ($/MWh)
40
30
25
35August 2012
20
2011
38INTERNATIONAL POWER Interim Results 2011
Access to fast growing emerging markets
Extensive development pipeline in key emerging markets
Over 17GW (gross) of projects under various stages of development
Opportunities to add incremental capacity at existing sites
Further growth potential through entry into new markets
Average GDP growth 2011-2015
Ele
ctri
city
consu
mp
tion k
Wh/h
ead
(2
01
0)
%
4,000
0
8,000
12,000
16,000
1 2 3 4 5 6 7 8
Electricity consumption and GDP growth forecast
UAE
Singapore
Saudi Arabia
US
UK
Australia
OmanChile
Peru
Indonesia
Thailand
Pakistan
TurkeyBrazil
Vietnam
39INTERNATIONAL POWER Interim Results 2011
Competitive strengths
Strong track record and experienced teams in all 6 core markets with operations in 31 countries
Excellent regional relationships with all key stakeholders
Enhanced development and construction teams with network of global expertise across key technologies
Increased global and regional scale providing economies of scale in procurement
Support from wider GDF SUEZ Group expertise in technologies and markets
Strong financial position with competitive cost of capital
40INTERNATIONAL POWER Interim Results 2011
Outlook
Continue to expect growth in 2011 with performance in H2 anticipated to be similar to H1
Excellent progress on combination realising greater synergies than initially expected
Overall construction programme progressing well and on plan to deliver the anticipated EBITDA growth in 2013
− despite the delay at Jirau
Greater integration in our merchant markets provides more resilience to portfolio
− merchant assets well positioned to capture anticipated recovery
Significant pipeline of development projects in emerging markets backed by strong competitive position
Confident of delivering sustained growth in shareholder value
Appendix
All numbers in this document are presented on pro forma basis, and exclude exceptional items and specific IAS 39 mark to market movements, unless stated otherwise
42INTERNATIONAL POWER Interim Results 2011
Key financial assumptions
Maintenance capex run rate €550m annually
Effective interest rate on gross debt− upward pressure in the medium term as construction programme
in Brazil is completed
Effective tax rate− migrate gradually towards 30% in the medium to long term
H1 2011Actual
€1.0bn
€214m
5.7%
26%
Growth capex1 - committed cash flow
Maintenance capex1
Effective interest rate on Gross Debt
Effective tax rate
£2.6bn
€550m
5.7%
26%
2011 FYForecast
1 Includes proportionate consolidation of JVs, excludes associates. Also excludes expenditure incurred by assets accounted for as finance leases or service concession arrangements
43INTERNATIONAL POWER Interim Results 2011
Interest and tax
H1 2011 €m Six months ended 30 June H1 2010 €m
4.2x
26%
3.8x
22%
Adjusted COIAssociates Interest Tax
PBIT
Total interest Subsidiaries & JVs Associates
Interest cover
Profit before total tax
Total tax Subsidiaries & JVs Associates
Effective tax rate
Profit after tax
1,471
56 26 82
1,553
(317)(56)
(373)
1,180
(280)(26)
(306)
874
1,350
40 24 64
1,414
(329)(40)
(369)
1,045
(204)(24)
(228)
817
44INTERNATIONAL POWER Interim Results 2011
Forecasting – sources of drivers for earnings Adjusted COI Contracted
AssetsConsistent contribution from our portfolio of long term contracted assets, mainly in META and Asia. Latin America profitability benefits from revenues indexed to inflation.
Merchant Markets
Generation – High quality information in the public domain and contracted position provided.
Retail – indication of volumes and profitability to be provided. Tends to mitigate generation volatility
LNG – contribution driven by Henry Hub-New England basis differential and US vs European/Asian spreads. Sustainability dependent on price dislocation.
Growth EBITDA – Investment, gearing and return criteria provided on Financial Close for all material projectsDepreciation + Amortisation – generally flat over life of plant and therefore only changes materially with new capacity
Interest Effective rates for debt and cash to be provided
Tax Effective tax rate in short and medium term to be provided
Non-controlling interests
Historic information will be provided. Extrapolate based on Adjusted COI
45INTERNATIONAL POWER Interim Results 2011
Forecasting – cash and financial position
Cash flow Maintenance Capex
Run rate to be provided
Growth Capex
Short term projection provided for committed capexIncremental capex on new projects are announced at inception
Dividend Targeting a 40% dividend payout ratio
FinancialPosition
Net Debt/EBITDA
< x3 targeted
Debt Capitalisation
within 45-50% range
Credit rating Baa3 Moody’sBBB- Standard and Poor’s
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