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Uniper Se

Q22021

8/11/2021

speaker
Operator
Conference Operator

Dear ladies and gentlemen, welcome to the analyst and investor conference call of UNITA. As our customers request, this conference will be recorded. As a reminder, all participants will be in listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulty seeing the conference, please press start key followed by zero on your telephone for greater assistance. May I now hand you over to Stefan Jost, who will start today's meeting. Please bear heart.

speaker
Stefan Jost
Head of Investor Relations

Good morning, dear analysts and ambassadors. A warm welcome to the Uniper Interim Results Call for the first half of fiscal year 2021. Thank you for participating in our conference call today. Our CEO, Klaus-Dieter Maubach, and our CFO, Tina Tuomela, will lead you through the Interim Results presentation today and answer all of your questions. Klaus-Dieter will start with the key highlights, and Tina will then focus on the financial data. Klaus-Dieter, please.

speaker
Klaus-Dieter Maubach
Chief Executive Officer

Thank you very much, Stefan. Good morning, everyone, and a warm welcome also from our side. I would like to briefly outline the key highlights of the first half of 2021 and shed some light on our major developments. The portfolio before Tina will go into the details of our financials. What are the highlights of the first half of the fiscal year? As you can see on the slide, the half-year results are under the heading sound results. Operationally, business at the half-year point fully met our expectations. Already with the Q1 call in mid-May, we had communicated that the isolated adjusted EBIT in Q2 would carry a negative sign. In the end, the well-known carbon Accordingly, adjusted group EBIT in 8-1, half year 1, 2021 decreased from €691 million to €580 million compared to previous year. For the full year, we confirm our previous outlook, which we raised in the first quarter. Turning towards our strategy and portfolio development. When I entered office more than 100 days ago, I made clear that accelerating universe decarbonization strategy would be at the top of my agenda. Back then, I did not expect how strongly the upcoming weeks would further highlight the urgency in this regard. Governments and courts are increasing the pace. 30 from 55 to 65%. The recent extreme weather phenomena inside and outside of Europe make one thing very clear. Whatever the costs of decarbonization are, not transitioning will lead to even higher costs for society. With regard to the recent floods in Germany, luckily, Uniper employs, our activities have not been affected. We are supporting the people who are affected both financially and directly at the locations of our customers and partners. Long term, it is our portfolio transformation that contributes the most in the fight against climate change, which brings me to the next slide. most visible sign of how we at Unifer are moving forward with our decarbonization strategy. At the beginning of 2020, we set for the first time a concrete phase-out schedule for coal-fired power generation in Europe. As you can see on the slide, by now we are making even faster progress than originally planned. operation at four of the five sites by the end of 2025. We have now been awarded in all of the first three German hardcore exit tenders. The Heiden power plant involved in the first auction sees commercial operation at the beginning of 2021. However, this power plant was declared system relevant by the TSO. After approval by the Federal Network Agency, the power plant is now to be kept ready as a backup solution for two years until September 2022. Since going into the reserve scheme, Haydn has been requested several times by the TSO, which highlights the issue of security of supply and system stability. in December 2021. Given its port access to the North Sea, we are working intensively on solutions to establish a commercial hydrogen hub there in the medium term. Now, in the most recent auction, Scholzen Power Plant Unit C was selected. Accordingly, it will cease commercial operation at the end of October 2022. We want to push ahead with the coal phase out, not only in Germany. We also fully support the ambitious national cold phase-out plan abroad and even deliver above those in the case of the UK. We announced just last week that we'll bring forward the closure of one of the four Redcliffe coal units to the end of September 2022, two years ahead of the date announced by the UK government for the coal phase-out. Power generation in the remaining three units of the two gigawatts latest after the power plant has fulfilled its obligations under the UK capacity market scheme. With respect to the retro site, Juniper is making progress in the development of an energy recovery facility to be known as the East Midlands Energy Regeneration Emerge Center, an anchor project for a zero carbon technology and energy hub for the site. Latin floor will be the last of our European coal-fired power plants to be taken. If a new German government wants to talk about a coal phase-out again in this context, then we are prepared to talk. Of course, such talks need to cover the question of compensation as well. The second lever for decarbonizing the portfolio is getting the growth projects on the road more quickly. As you know we have earmarked 1.5 billion euro to spend on growth investments over three years. Renewables will be a key element in improving Uniper's energy mix. At the same time we will leverage Uniper's existing expertise and platform in many areas of the gas value chain to offer lower carbon products and services. Green gases are therefore the second pillar I would like to share with you a few examples of how we have been ramping up new business areas in 2021. As part of our 5 and 2 gigawatts of new capacity in the most attractive European markets by 2025. I am optimistic that we will be able to be more specific on first promising projects towards the end of the year. Moreover, we have expanded our renewables PPA portfolio. On the one hand, we use our experience from the trading and optimization business and act as an enabler for development. On the other hand, we will increasingly address medium-sized and small commercial customers in order to structure long-term carbon-free energy supplies according to the individual needs of our B2B customers. New contracts signed in Spain and the USA have reasonably further increased our PVA portfolio. At the top of our agenda is also to leverage the gas business for the opportunities that arise in the transition of the energy industry. More specifically, this involves the further build out of our already existing green gas portfolio. From a mid-term perspective, we will continue to utilize photons and universe joint capabilities to position ourselves as a major player in the rapidly increasing hydrogen economy. The initial focus here is on launching major pilot projects which need to be supported by public funding and developing concepts through cooperation agreements. The Green Methanol Project AIR in Sweden Innovation Fund, the project recently received financial support of 30 million Euro from the Swedish Energy Agency. Moreover, further cooperation agreements were concluded to improve our market entry opportunities. Uniper and Shell Gas and Power Developments recently signed a MOU not by Australia. For Uniper, as a major European gas midstream supplier, creating import channels for green hydrogen or alternative fuels such as green ammonia for Europe is a core story. A few days ago, Uniper signed a cooperation agreement The project foresees building both an electrolysis plant for 250 to 500 megawatts and the corresponding renewable power assets by 2026. Unibail will provide technical services. However, the main focus is on drawing up an exclusive off-take agreement for green ammonia, which we intend to import via our planned Willemshaven hub. and not to forget Uniper's commitment to expand mobility solutions for heavy-duty transport. Uniper, with its subsidiary Liquis, has been in the process of establishing a liquefied natural gas filling station network for long-haul transport in Germany since 2017. The small energy station network in Germany the successful completion of a trial run of BioLNG with a major logistic company in the truck manufacturer IVECO, Liquis will now also offer a carbon-neutral product at an attractive price for the first time from 2022 onwards. The use of BioLNG results in greenhouse gas savings of around 96% compared with conventional diesel fuel. in the first half of fiscal year 2021. Starting with the global commodities business, storages have been close to their peak in half year one 2020, following a mild winter and decreased demand due to COVID-19. Meanwhile, a colder winter In light of this market environment, European gas prices showed a volatile development and have more than doubled since the beginning of 2021. These combined factors brought our storage levels to around 66%, which is still above the currently observable market average. As recently announced, the upcoming COD of North Stream 2 help to ease the current tightness on the gas markets. Building up on our first quarter, the European generation segment achieved again a remarkable increase in power generation volumes of 19%. Hydro volumes decreased by 9% year on year. This development is mainly related to a normalization in Nordic generation volumes precipitation. Nuclear output declined by around 2%, which mostly resulted from the closure of the minority-owned Ringhals 1 power plant by the end of last year. Gas and coal-fired power generation continued the Q1 trend and has risen by almost 50% year-on-year, which can be explained by several interconnected due to colder weather across Central Europe and UK. Secondly, the higher volumes are also driven by the COD of Dachshund 4, which has only been producing since June 2020, and the gas-fired power plants Irchings 4 and 5 being back in the virtual market since October 2020. development can be mainly explained with a withdrawal of COVID-19 related restrictions for businesses, higher demand on the Russian market, and also beneficial weather conditions compared to the very warm winter in 2019-2020. As can be expected from the roof-wide rise in fossil generation volumes, carbon emissions show a plus of about 19%. This development is in line with the overall market this year and highlights today's relevance of fossil fuels to ensure security of supply and the need to change that going forward. From Uniper's perspective, given the broader fossil asset base, we expect this trend to continue for the full year 2021 and even 2022 as already highlighted back in May. in our decarbonization process progress. Our specific carbon intensity remained at prior year's level with approximately 440,000 CO2 per kilowatt hour produced after the first six months. Even though the percentage of fossil volumes increased, this is mainly attributable to the high efficiency at Yersin four and five. Looking forward, we will drive the emissions across the organization and along our entire value chain. Throughout next month, we will be more specific when it comes to providing proof points on our strategy execution. Having said that, I'm handing over to Tina, who will lead you through our key financials.

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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