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Agenda Introduction of the Company Achievements of 2011

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Presentation on theme: "Agenda Introduction of the Company Achievements of 2011"— Presentation transcript:

0 Gábor Vilhelm Head of Treasury and Investor Relations
Company presentation at Budapest Stock Exchange Gábor Vilhelm Head of Treasury and Investor Relations 09 May, 2012

1 Agenda Introduction of the Company Achievements of 2011 2012: Year of consolidation and operational excellence

2 Fast growing E-Star provides complex
alternative energy solutions for a wide customer base Milestones Business model Client proposition 2000 Establishment Segments Customers Industrial clients (including blue chips) Municipalities Residential clients Hot water Steam Electricity ESCO Energy outsourcing Public lighting Efficient, district heating services Energy trading Main Products 2005 Aggressive growth 2007 IPO 2009 International expansion + SPO 2010 Further international growth (Romania) 2011 Dual listing at Warsaw, SPO (EUR 8M) Closing bond program. I (EUR ~33 M), EETEK Acquisition (EUR 21M) 2012 Operational excellence and year of consolidation

3 Sustainable business model targeting mid-market
Mid-sized projects (niche segment) Utilization of renewable sources Long-term contracts MW heat capacity € 5-35 million annual investment per project 15-49 years Local heat market Combined Technology Mix Changes in fuel cost naturally hedged Annual heat curve Price mechanism based on change in fuel price Gas boiler Biomass boiler Co-gen

4 E-Star’s technology free knowledge-based alternative energy business creates a keystone role for the company Municipality Industrial Residential Demand Demand Gas boilers Gas engines Available technology Available technology Biogas Geothermal Local resources Local resources Biomass boilers Turbines Geothermal / inert gas Biomass Natural gas Coal

5 Energy distribution and trading
Diversified international project portfolio including wide range of clientele in all sectors Zalau Targu Mures Gheorgheni EC Mielec Heat and electricity Capacity: MWth and 24.4 Mwel Mielec Euro-Energetyka Energy distribution and trading Gorlice EC Gorlice Heat and electricity Capacity: 87.2 MWth and 7.0 Mwel 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

6 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 5% 16% 14% 62% 24% 100% Reliable International Blue Chip Industrial Clientele 6

7 E-Star has attracted international investment interest, as it has been becoming an industry leader
Hungary World Finance TOP 100 (2010) Only member from CEE region Others include: CitiGroup Apple Amazon Coca Cola Listed on Warsaw Stock Exchange (March 2011) „Team of Stock Exchange” (2009) Largest stock price increase (2010) BUX index membership (2010) Pegasus price in market leader category (2010)

8 Equity and financial liabilities (mln EUR)
EBITDA has trippled and revenue has grown by six fold from 2008 to 2011. Revenue (mln EUR) Gross margin (mln EUR) 79 % CAGR 113% CAGR EBITDA (mln EUR) Equity and financial liabilities (mln EUR) 39 % CAGR Equity* Financial liabilities * After the consolidation of EETEK, including 10% equity increase through an SPO. (Each of the shares were sold for HUF10.000) 8

9 Agenda Introduction of the Company Achievements of 2011 2012: Year of consolidation and operational excellence

10 2011 greatest achievements
E-Star closed a successful in line with an aggressive growth strategy 2015 2014 2013 2012 2011 Entering Poland Consolidation Operational excellence Entering 4th country Bring projects to perfection Further growth Entering 5th country New Gas Cogeneration – 8.4 MWe Organizational improvement – 500 FTEs Re-branding: from RFV to E-Star Alternative Plc. Restructuring to reach cost efficiency (still under process) Technical listing at WSE Entering Poland by EETEK acquisition (EUR 21 M + EUR 4.5 M) SPO – EUR 8 M (10%) Closing E-Star HUF nominated Bond Program – EUR 33.3 M Successful bank financing (BZ WBK) – EUR 4 M + non-refundable state subsidy 2011 greatest achievements 10

11 Agenda Introduction of the Company Achievements of 2011 2012: Year of consolidation and operational excellence

12 Operations management Corporate development Operational excellence
Aggressive consolidation measures 2012 2011 2012 2013 2014 2015 Operations management Financial and operational controlling Supervising all operating project Operational excellence through increased efficiency and cost control Operating Management System Controlling cash costs Set up of gas trading unit Developed functional spikes Operational excellence through increased efficiency and cost control Enhancing capital discipline Business service center development Corporate development Extended board to support business development Polish company set -up Re-branding SPO & BOND Optimization of organization and internal processes Setting up venture capital fund subsidiary Country 4# company set-up Building new innovation capacities Improved project implementation and know-how transfer Country 5# company set-up Regional procurement & supply chain management Shared Value Creation (SVC) Business development Entry: Poland district heating Growth return in Hungarian ESCO Expansion at current project sites Significant cost cutting Review of strategy Entry: country #4 Entry into new segments within existing countries Building new industrial client portfolio Market consolidation in core segments New R&D projects, cutting edge solutions Entry: country #5 Regional consolidation Technology flagship in alternative energy within CEE Entering Poland Operational excellence Entering country #4 Regional champion & Entering country #5

13 Stable Cash Flow Stable Cash Flow Investment Period
E-Star is reviewing it’s investment programs and considering divesting opportunities according to operational excellence Stable Cash Flow Stable Cash Flow Investment Period 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) 35 Municipal costumers More than 180 project sites Operation with a 11-year history ESCO, Public Lightning, DH, and RESZ Activity based on 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 Hungary Poland Romania Reviwing of Mures and Zalau projects Reviewing of divestment opportunities

14 Consolidation measures in 2012.
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 Reduction of employee costs at HQ Reduction of external advisory and legal fees 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 Other

15 Domestic and int. BOND program Group-level BANK refinancing
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 Group-level BANK refinancing Provides financing for development of new projects E-Star aims to fund a constant proportion of our balance sheet from the bond market : ~ 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 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

16 Refinancing and financing programs advance well
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 Polish Projects 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 Refinancing Acquired Hungarian Project 16

17 Contact E-Star Alternatív Nyrt Budapest Hungary, Székács utca 29. mobile: , phone: fax: url:

18 Thank you for your attention!

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