3. SHAREHOLDER OVERVIEW
AKKÖK GROUP CEZ GROUP
One of the biggest industrial groups in Turkey. CEZ is the largest Czech corporation, and the largest corporation
among 10 new EU member states.
Active in several sectors with main focus on
Chemicals,Energy,Real Estate,Port Operations,IT and Insurance 63% of the company is owned by Czech Ministry of Finance.
The group with 3887 employees,achieved combined revenues The best performing European utility stock with growth of 253%
amounting to $ 2.2 billion in 2009 over last 36 months.
Sectorel Breakdown of Group’s Turnover: Vertically integrated in the Czech Republic – from mining
through generation to distribution and supply.
Chemicals : 42% Energy :22%
Textile: 5% Others : 31% Expertise in distribution and supply in Bulgaria and Romania.
www.akkok.com.tr Generation know‐how in lignite, coal and nuclear energy.
www.cez.cz
AKKÖK Companies Quoted at the Istanbul Stock Exchange
World’s largest acrylic fiber producer.
AKSA www.aksa.com
Market leader of private power generation companies
AKENERJİ in Turkey.
www.akenerji.com.tr
A leader in manufacture of textiles (Fabric & Yarn)
AK‐AL with years of experience.
www.ak‐al.com
REAL ESTATE INVESTMENT COMPANY : WORLD
AKMERKEZ BRAND AS A SHOPPING CENTER
3
www.akmerkez.com.tr
4. POWER SECTOR OUTLOOK ‐ GLOBAL TRENDS
Requirements of Increased Demand Favoring Renewable Investments
World’s Electricity Production by Fuel (Trillion kWh)
35.000
30.000
It’s expected that, power and utilities organizations
will need to double their base load generation from 25.000
Coal
(both traditional and renewable sources) to address the 20.000 Natural Gas
growing energy demands of our global economy over the
15.000 Renewables
next 30 years. They also will need to invest in new
technologies for carbon capture, smart metering and 10.000 Nuclear
demand side management, even absent the 5.000 Liquids
development of global standarts. The electric power
0
industry will need to work with state and national
regulatory authorities to reconfigure transmission and 2005 2010 2015 2020 2025 2030
distribution systems to successfully integrate new
sources of energy . Today, with the growth of the economies, demand for energy is
increasing. As a result, further investments and diversification of the
energy sources seems immanent. With the developed energy markets,
unefficient/expensive power plants will be eliminated and
efficient/cheap ones will survive and present lower priced electricity
to the end‐user.
4
Source: EIA, Deloitte
5. POWER SECTOR OUTLOOK ‐ TURKEY
Turkey's Installed Capacity by Generation Companies (MW)
%19 Today, majority of the electricity produced in Turkey is generated
through state‐owned/operated power plants.
%31
Import and Export of electricity is depends on Governmental
permits. Due to technical infrastructure, capacity for trade is very
%50 limited.
Power Consumption Breakdown in Turkey (2009)
Fuel Sources
Currently the majority (90%) of natural gas is being imported by the
government, there is no alternative and no price competition for natural
gas in the market. The above chart illustrates, that the electricity price is
mainly sensitive to the global NG price trend.
5
Source: TEİAŞ, TEDAŞ
6. ELECTRICITY GROWTH DYNAMICS ‐ GLOBAL
It has been historically observed globally that the electricity
market tends to grow +4% on average above the country growth
rate. The difference in electricity demand and growth rates
tends to be higher in developing countries, like Turkey.
Turkey represents a significant potential in terms of
consumption per capita while compered to the other countries
with its increasing young population and economic growth
potential.
6
Source: EUROSTAT
7. ELECTRICITY GROWTH TREND ‐ TURKEY
High Demand Scenario
Electricity Consumption Trend
LowDemand Scenario
Electricity consumption is mainly effected by GDP, population Electricity consumption proved to be resilient to the downturns in the
growth, urbanization, climate change and efficiency applications. economy. Increase in electricity demand has mostly been much higher
than the increase in national income in growth years, while staying at the
In the last 20 years, net electricity consumption increased positive territory during recession years.
remarkably with 7 % CAGR.
This has also been the case in financial crises situations. In 2001,
TEIAS forecasts average annual consumption growth of 7 % per Turkey’s GDP percentage growth rate change has been ‐5,7%, whereas the
year for 2010 to 2019. The consumption growth may be shifted due electricity demand growth rate has been ‐1,2%.
to the global crises but the imbalance remains a problem. The
global crises provides an opportunity for Turkey to improve the
investment environment and create a healty, competitive market.
7
Source: TEİAŞ, State Planning Organization,TUİK
8. DEMAND TREND
EFFECT OF THE CRISIS
Although electricity demand has decreased by 2,0%
in 2009, we are monitoring a recovery in the demand
starting from 4Q2009. 2010 demand was resulted with
7,9% increase.
8
Source: TEİAŞ
10. UPCOMING GENCO PRIVATIZATIONS
The aim of the upcoming GenCo privatizations is to increase the efficiency in the market and provide cheap electricity to the end‐user.
%37 of Turkey’s capacity will be offered to the private sector.
The Government is planning to privatize 97 of its power plants with a total capacity of 16.358 MW starting from 2010.
18 Thermal, 28 Hydro power plants and 52 small sized hydros will be privatized.
Capacity range (Excluding small hydros):
Min: 26 MW
Max: 1.440 MW
It can be an entry ticket for a growing market for foreign players and domestic players who want to diversify their fuel mix. 10
11. MARKET MECHANISM & TARIFF STRUCTURE
TRY/MWh
The official electricity tariff (for residential/commercial/industrial
use) is set by the government every 3 months as per APM*.
NG tariffs are determined by the government, and adjusted
monthly by APM (the private gas suppliers operate by providing a
discount rate off of the official tariff).
The amount of imbalance in the market drives the price higher
since the last‐resort producers are predominantly NG/ fuel‐oil
plants increasing electricity shortage forecasts indicate higher
prices to come.
In Dec.2009, DUY** system switched to hourly pricing
mechanism. 2010 could be defined as a transition year since the
system was new to the market. Particularly in 2010, despite the
fact that the demand for electricity has increased by 7,9%, the
amount of waterflows received in the first half of the year,
caused lower capacity utilisations of thermal power plants and
electricity prices to decrease compared to 2009.
Private sector generation companies have the following sales platforms:
Contract the customer directly providing them a discount rate from the official tariff,
Selling to DUY system by quoting generation price/power plant and per the specific time‐segment of the day (price, that the company itself
announces per its own power plants).
*APM : Automatic Pricing Mechanism initiated in July.2008, where electricity and natural gas tariffs are automatically calculated and periodically applied according to the
changes in price of fuel sources, FX rates, inflation rates etc.
**DUY : Clearing house system was initiated in Aug.2006, and provides an “open‐market platform” for the power generation companies, since the price is set by the
generation company according to the supply and demand dynamics, and is not limited by the official tariff. Sales to the DUY(Electricity Market Balancing and
Settlement Regulation) system are exempt from TRT fund and transmission cost.
11
13. OPERATIONS and INVESTMENTS
Current Active Capacity:
659 MW (N.Gas, Hydro, Wind)
417 tons/h
Ongoing Investments:
87 MW (Hydro)
Development Stage:
900 MW (Natural gas)
Development Stage :
160 MW (Hydro with dam)
Electricity Steam Capacity
Current Power Plants
Capacity [MW] [tons/hr]
License Pending:
Çerkezköy 98 144 170 MW (Wind)
Bozüyük 132 141
Kemalpaşa 127,6 132 Geothermal License:
Ayyıldız WPP 15 ‐ 5 Permits
Akocak HPP (Opr date: 07.2010) 81 ‐
Bulam HPP (Opr date: 08.2010) 7 ‐
Uluabat HPP (Opr date: 10.2010) 100 ‐
Burç HPP (Opr date: 11.2010) 28 ‐
Feke II HPP (Opr date: 12.2010) 70 ‐
TOTAL 659 417 13
14. AKENERJİ OVERVIEW
In September 2008, Akenerji has signed a strategic partnership agreement with CEZ to sell 37,5 % of its shares for
Strategic 302 mio USD. The financial closing has taken place in May 2009.
Partnership with CEZ know‐how in distribution, coal, lignite and nuclear power plants is an important asset for Akenerji’s growth.
CEZ
Akenerji has announced its plan to invest USD 3billion in Turkish energy sector to reach an installed capacity of
3.000 MW within 5 years.
In July 2008; Akkök, Akenerji and CEZ, “AkCEZ,” won the Sakarya Electricity Distribution (SEDAS) tender by
submitting the highest bid of USD 600 mio .
Vertical Akenerji has taken over SEDAS in Feb.2009 and uses equity pick‐up method for consolidation it.
Integration with Vertical integration provides competitiveness in the market and access to end customer.
Sedas
Security of a sales for the GenCo, and security of need by the DisCo and higher efficiency through integrated work
stream.
Ability to monitor customer trends, dynamics and needs first hand through Disco.
900 MW NG
Akenerji acquired Egemer Company which is in possesion of 900 MW NG Power Plant Licence in March 2009.
Investment Egemer
With the initiation of the new hydros Akenerji will have a balanced and diversified portfolio.
Diversified Profitability Margins in 2011 will be effected positively since hydro power plants will operate during whole year.
Generation
When ongoing renewable power plants completed, with a total capacity of 388 MW, Akenerji will avoid over
Portfolio
1 million tons of CO2 release.
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16. VERTICAL INTEGRATION : SEDAS
In July 2008; Akkök‐ Akenerji – CEZ , “AkCEZ,” won SEDAS tender by
submitting the highest bid of USD 600 mio .
Akenerji has taken over SEDAS in Feb.2009.
Akenerji has opted for the “Deferred Payment Option” of the
Privatization Authority and has paid 300 mio USD in cash. The
outstanding balance will be paid through a project finance facility
loan.
Over 1,3 million customers.
More than 50% of the consumption is industrial.
App. 1 billion USD annual revenue in 2009.
Sedaş theft/lost ratio below 7%; one of the lowest in Turkey.
Distributed 8,4 billion kwh in 2009.
Distribution margin is fixed at 2,33%.
AkCEZ has SEDAŞ’s transfer of operating rights for 30‐years .
Akenerji uses the equity pick‐up method to consolidate AkCEZ and SEDAS to its balance sheet.
In 2009, demand has decreased by 4% in Sedas due to economic crises where Turkey’s GDP growh rate has posted 4,7% shrinkage. In
2010, demand has increased by app. 13% in Sedas after the crises. (9/2010 GDP of Turkey: 8,9% ). Akenerji’s 2011 GDP growth rate
expectation is 5% for Turkey. Considering that electricity demand is generally 3‐4% higher than GDP growth rate in the country, we
assume that in the conservative scenario electricity demand in Turkey will increase 5‐6% in 2011 comparing with 2010.
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17. AKENERJI CURRENT INVESTMENTS
The current leader in the market, Akenerji plans to grow through a diversified portfolio.
The breakdown of Akenerji’s currently licensed investment are given below:
Financing for all Akenerji, Akkur and MEM projects has been
arranged with 7+ year terms and in globally competitive standards.
Akenerji has taken over Egemer Enerji Üretim A.Ş., an SPV in
possession of a 900 MW NG PP license in Hatay, Turkey, in March
2009. The investment is currently in development phase and
turnkey contract has recently signed with GE ‐ Gama consortium.
In May 2010, Akenerji has acquired Ickale Energy with a 160 MW
dammed hydro project license. Since we are at the beginning of
the development stage and just finalized the acquisition
procedures, the details about the project will be shared in the
forthcoming days.
In 2007, Akenerji applied to EMRA for 2 wind power plant
projects with a total capacity of 170 MWs. Akenerji is following the
* : SPV (Special Purpose Vehicle Entity) procedure to closure. In 2008; Akenerji obtained 5 permits to
search for geothermal energy capacities in İzmir and Bursa regions.
HPP : Hydro Power Plant
WPP : Wind Power Plant
17
NG PP: Natural gas fired Power Plant
18. MAIN CAPEX ASSUMPTIONS
For CAPEX estimations, the following data can be used:
1,2‐1,5 mio $/MW for HPPs,
Capacity Source Diversification by 2015* 0,75‐1 mio $/MW for NG PPs,
and 1,5‐2 mio $/MW for wind projects.
For investment period estimations , the following data can be used:
2 years for WPPs,
2‐3 years for NG PPs ,
and 3 years for HPPs.
Akenerji applies 30% equity‐70% debt structure to its investments.
All of Akenerji’s renewable projects are eligible to benefit from the Renewable
Energy Law‐ i.e. a purchasing guarantee for 10 years at a price to be determined
by EMRA on a yearly basis. (Currently 7,3 $ cent/kwh)
Akenerji has applied for VER (voluntary emission trading) certificates for ALL of
its renewable portfolio.
* Capacity breakdown is based on the licensed investment assumptions given in the previous slides .
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19. CAPACITY & SALES FORECAST*
* These forecasts are based on the licensed investment assumptions given in the previous slides .
With the completion of current licenced projects, Akenerji’s power generation capacity will increase with a CAGR of 30% by 2015.
Average capacity utilisation rate can be considered as 30‐40 % for hydro, 30‐35% for wind power plants. ‐900MW Egemer NGPP
project and 160 MW
In base load conditions 70‐80% capacity utilisation rate can be used for NG fired power plants. Kemah HPP project will
become online in 2014 and
‐ Starting from the 2nd half 2015 respectively.
‐ Ayyıldız WPP (15MW) has
of 2010, eight Hydro PP will
become operative in Sep.2009.
commence operations with
‐Yalova NG PP (70MW) has sold
a total capacity of 373MW
to Aksa (Akkök Group
Company) in Apr.2009
‐ (69MW) capacity installed in
various locations of Turkey
have sold within 2009
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20. SALES & PRICING ASSUMPTIONS
Akenerji has 3 main types of customers: direct, and indirect customers, and DUY system.
DIRECT‐INDIRECT SALES DUY SALES
Direct customers have a physical direct line to the power In Dec.2009, DUY system switched to hourly pricing mechanism.
plant, whereas the indirect customers are supplied through the 2010 could be defined as a transition year since the system was new
national grid (at additional cost). to the market.
Tariff for sales to direct and indirect customers are set as a We expect electricity demand to increase in line with the easing of
function of the government’s tariff. Akenerji applies a discount the financial crises in 2010 and 2011. Both this, and the increased
rate for direct customers and indirect customers. capacity of renewable projects in Turkey (due to rainy winter) will
Akenerji is the sole supplier of steam for its customers, and effect the margins and we do not forecast an increase or decrase in
hence can directly reflect the NG price changes in its steam DUY prices surprisingly in 2011 comparing 2010.
price.
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23. FINANCIAL PERFORMANCE
**
**
(**) : The impairment losses, a one‐off provision the potential value difference resulting from power plant sales, has been left out from the calculations to better
reveal operational performance. 23
(**) : Excluding SEDAŞ.
24. PROFITABILITY PERFORMANCE
In the last three years, Akenerji incurred min 9% and max 15% Ebitda Margin mainly with its natural gas fired power plants. We expect
that the initiation of the new hydro projects will have an affect positive effect on the margins. Accordingly, we expect that 2011 Ebitda
margin will hover at least around 15%.
* : In CMB’s new inflation adjusted accounting terms.
* : TRT fund has been left out of the above calculations to better reveal performance.
* :Impairment losses (Provision the potential value difference resulting from power plant sales) have been left out of the above calculations to better reveal
operational performance.
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25. CONSOLIDATED BALANCE SHEET
More about the rights issue...
Previous Actual
Subscription
Shareholders Ownership Paid‐in Capital Paid‐in Capital
(mio TRY)
(mio TRY) (mio TRY)
Akkök 37,5% 24,4 116,0 140,4 Subscription is paid in advance at the end of 2009.
CEZ 37,5% 24,4 116,0 140,4 Subscription is paid in advance at the end of 2009.
Pre emption rights were exercised between April 13‐27, 2010 and
Public 25% 16,5 78,5 95,0
99% of the public subscription was paid.
TOTAL 100,0% 65,3 310,5 375,8
Upon increasing Akenerji’s registered capital upper limit from 150 million TRY to 1,5 billion TRY at the end of 2009, Akenerji has completed the
process of increasing its paid‐in capital to TRY 375,8 mio from TRY 65,3 in accordance with the legislation on April 13,2010.
The unsubscribed shares was offered to public in the first half of May,2010. Capital increase process was completed and new shares were listed
on ISE in May 2010.
Proceeds from the rights issue will be used for Egemer project and new upcoming projects.
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27. ABBREVIATIONS
MW : Megawatt
GW : Gigawatt
NG : Natural Gas
GDP : Gross Domestic Product
CAGR : Compound Annual Growth Rate
DUY : Electricity Market Balancing and Settlement Regulation System
DISCO : Distribution Companies
EUAS : Electricity Generation Co.Inc.
APM : Automatic Pricing Mechanism
TRT : Turkish Radio ‐ Television Corporation
HPP : Hydroelectric Power Plant
WPP : Wind Power Plant
NG PP : Natural Gas Fired Power Plant
USD : US Dollars
mio $ : Million Dollars
PP : Power Plant
SPV : Special Purpose Vehicle Entity
VER : Voluntary Emmission Trading
EMRA : Electricity Market Regulatory Authority
EBITDA : Earnings Before Interest, Tax, Depreciation & Amortisation
CMB : Capital Markets Board of Turkey
TRY : Turkish Lira
ROE : Return on Equity : Net Income / Shareholders's Equity
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28. AKENERJI INVESTOR RELATIONS
Akenerji Elektrik Üretim A.Ş. Gamze DİNÇKÖK YÜCAOĞLU
+90 212 249 82 82
Miralay Şefik Bey Sok. gdinckok@akenerji.com.tr
No:15 Akhan
34437 Gümüşsuyu
İstanbul Nilüfer AYDOĞAN
Turkey +90 212 249 82 82 (ext:21130)
info@akenerji.com.tr +90 212 393 50 18
naltintasi@akenerji.com.tr
This presentation contains information and analysis on financial statements as well as forward‐looking statements that reflect the Company
management’s current views with respect to certain future events. Although it is believed that the information and analysis are correct and expectations
reflected in these statements are reasonable, they may be affected by a variety of variables and changes in underlying assumptions that could cause
actual results to differ materially. Neither Akenerji nor any of its managers or employees nor any other person shall have any liability whatsoever for any
loss arising from the use of this presentation.
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