renew Energy without limits • june | july 2012
A LOOK INTO THE FUTURE OF EDPR
BEHIND THE 2015 BUSINESS PLAN On Target
Eddie Kolitz, Regional Operations Manager for EDP Renewables North America
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24 hours in the life of Francisco Espín Molina, Offshore Energy Assessment Manager
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onindex June | July
renew Energy without limits • june | july 2012
The 2015 Business Plan defines a strategy based on the three EDP Group pillars: controlled risk, superior efficiency and focused growth. All financial market agents were invited A LOOK INTO THE FUTURE OF EDPR
BEHIND THE 2015 BUSINESS PLAN On Target
Eddie Kolitz, Regional Operations Manager for EDP Renewables North America
to attend the presentation and the investors were able to take an in-depth look. Here’s a view into the future of EDPR.
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24 hours in the life of Francisco Espín Molina, Offshore Energy Assessment Manager
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oncover Behind the 2015 Business Plan
Donostia, San Sebastian: learn more about where EDP has a presence.
14 onpeople Meet Jacinta Carvalho, senior manager in Corporate Development at EDPR’s Corporate Center, and Cedric Kouam, Market Operations Manager.
Some of the goals of the 2015 Business Plan include maintaining a distinctive low risk profile through proactive risk management, increase of cash flow generation through competitive refinancing and accelerated deleveraging, superior efficiency through focused investment on existing growth as well as new geographies and technologies.
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online Francisco Espín Molina The Offshore Energy Assessment Manager is proud of being involved in the first offshore wind project of EDPR. He brings his vast experience in renewable energies to his work on the MORL project, and enjoys balancing between overseeing back-to-back meetings and connecting with co-workers during day work.
16 ontop Information Security : tips to help you in your daily life.
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Eddie Kolitz’s team targets
EDPR’s most important news.
Eddie Kolitz, Regional Operations Manager for EDP Renewables North America, is always seeking excellence. Under his leadership, Kolitz’s team of twelve established its own mission statement focusing on increasing total energy availability for the region’s fleet.
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onchange Archimedes Pereira da Silva Junior After 5 years at the EDP Group, Archimedes has taken on new responsibilities in the wind power sector, bringing his environmental experience to EDPR. Moving from EDP Generation’s environmental area to EDPR is a major challenge that motivates him to grow personally and professionally.
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Donostia SAN SEBASTIAN
Learn more about the places where EDP is present
CORO MARTÍNEZ ROMERO
Coro Romero has worked at Naturgas Energía for 18 years now. She is the Business Development B2C Department Manager and her office in Txurruka is situated next to the Plaza de Gipuzkoa and the Council House. During the summer, she enjoys riding her bicycle to work through a fantastic bike path (bidegorri) along La Concha Beach, that stretches from her neighborhood to the city center. Besides listening to music and reading –especially in the summer– she is also passionate about skiing. She is an active person who frequently attends aerobics and toning classes, and recently started running.
A MUST 1. Plaza de Gipuzkoa 2. Urgull Hill 3. Peine del Viento (Wind Comb) 4. Playa de La Concha (La Concha Beach)
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GET TO KNOW Every morning when commuting to the office, Coro passes through the Plaza de Gipuzkoa, a very lush place, full of charm with a small pond where ducks and swans swim. The Playa de Ondarreta is as if it was her own—it´s her summer getaway. Despite the wind that blows there, she enjoys its quiet nature considering it is not close to the city center. It is located in the old part of town as one crosses through La Playa de la Concha and the Miramar Palace. She loves the view, especially Monte Urgull. She could stay there for hours contemplating the view. At low tide, it is possible to cross to La Concha beach because only an isthmus called Pico del Loro separates it. “In reality it is not called that, but everyone knows it by that name,” says Coro. Children love to go to Pico del Loro to catch crabs, “but when the tide gets high it becomes dangerous.” Very close to the Playa de la Ondarreta is Peine del Viento. She loves walking around there
Donostia - San Sebastián* is a Spanish city situated on the shore of the Bay of Biscay, 20 kilometers from the border with France. It is the capital of the province of Gipuzkoa-Guipúzcoa* in the Basque Autonomous Community. The district population is 186,122 inhabitants and its metropolitan area reaches a population of 436,500 people. *In Basque and in Spanish
G EO G R A PH I C DATA : COUNTRY: SPAIN NUMBER OF INHABITANTS: 436,500
AQUARIUM shows a whale skeleton and several
EDP IN THE BASQUE COUNTRY Employers: 308
not only for the breathtaking views, but also because it is a very peculiar place. From the sculptures anchored on the edge of the rocks looking out to sea to the beach stones, Peine del Viento is entirely unique. When the tide is strong and roaring as if it were angry, there are some holes in the ground from which foam ascends. “Beware! If you do not walk carefully you may fall.” Moreover, it is an area where the waves spring upwards, making this a guaranteed spectacle. Next, there is nothing better than going to the Branka for coffee, calamares or a hot sandwich. For Coro, the ideal plan is to go to the beach, stroll through the Peine del Viento and then relax on the roof of Branka. Urgull is a small hill between the Uruema River and the harbor. The Old Town is located at the foot of this hill. After climbing this hill, there is a large sculpture of Christ (similar to the Christ in Rio de Janeiro) and a small museum that tells the story of Donostia. It is a magnificent spot where one can appreciate the city view. For Coro, climbing up Mount Urgull is a must every summer. She usually takes her children with her and between the cannons, the castle ruins and the view, her children imagine –wars– and ways to defend themselves. “It’s a very relaxing walk, throughout which one can from time to time, glimpse the sea and the roofs through the trees” Once we get up there, the city is spread out beneath our feet. Coming down, around the harbor, we see mullets eating bread and, in the meantime, the children enjoy ice cream” If it is time for lunch or dinner, we take the opportunity to go to Mejillonera. The squid and the brava potatoes are known far and wide.” Another interesting site one should visit is the Aquarium along the harbor where one can see a great variety of marine species.
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TASTE One cannot visit Donostia without tasting its delicious pintxos (snacks and tapas) and taking a walk through the old part of town. The Fermin Calbetón street is where the most pintxos bars are located: the Txalupa, the Bodegón Alejandro, the Izkiña, among others. A well-known bar in the old town is Paco Bueno, located in Rua Mayor that serves incredible breaded prawns! Located in Rua 31 de Agosto, Casa Gandarias and A Fuego Negro offers unforgettable food—they are both a different concept of pintxos bar with a more modern environment than the others. Outside the old town, another recommended site is the Kazkazuri, not your typical Basque cuisine restaurant but a modern eatery offering vegetarian fare. On weekends, it is always packed for lunch. Besides good food, Kazkazuri offers a beautiful view of the sea through its large windows that surround the restaurant. Coro really enjoys salads and, right next to her office is Bideluze, a restaurant “that makes some incredible salads.” For traditional food she loves Txoko, at Rua Mari, “which ensures an optimal price/quality ratio.”
Cable car Igeldo
The Kursaal Bridge and the Victoria Eugenia Theatre
A walk up the Igueldo is required, if possible by cable car. It is a cable railway that leads up to the amusement park. “It’s like a trip into the past.” The trip takes 10 or 15 minutes. The park itself cannot be compared to Port Aventura or that kind of park, “but the children enjoy themselves enough, and so do adults.” The view is breathtaking: “You see all the mountains nearby: onrenew 5
Peñas de Aya, Larhun, Jaizkibel and quite a few more.” Also, there is a manorial San Sebastian that includes several symbolic buildings such as the Kursaal as its flagship, the Cathedral of the Good Shepherd, the Miramar Palace, the Victoria Eugenia Theatre and the María Cristina Hotel (*****), London and England (**** ).
oncover BEHIND THE 2015 BUSINESS PLAN THE STEPS TO GET THERE
• EBITDA PER AVERAGE MW IN OPERATION TO INCREASE 25% FROM 2011 TO 2015 • EBITDA TO REACH €1.35-€1.5BN IN 2015 • NET PROFIT INCREASING MORE THAN 3X (2011 VS. 2015) • DIVIDEND PAYOUT 25%-35% (FROM 2012 RESULTS)
of market changes, while delivering through execution and sustainable performance. Since the beginning of EDPR, the company´s management team has met regularly to track organization and industry developments as well as rethink its strategic and tactical positioning in the market, and put its future into perspective. In 2012, these moments of strategic review played a prominent role in the development of the 2015 Business Plan. EDP´s recently formed strategic partnership with China Three Gorges (CTG), China´s largest clean energy group with an ambitious renewable energy expansion plan that is at the core of the EDPR 2015 Business Plan. It will act as an enabler of the rotation strategy as well as a co-invester in existing and new markets. It, will aide EDPR in the implementation of the Plan through access to new markets and financial capabilities. The 2015 Business Plan was presented on May 22nd and 23rd at EDPR´s Investor Day, where all financial market agents were invited to attend. Investors were able to take an in-depth look into the 2015 Business Plan and have their questions and concerns addressed by the EDPR executive team.
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ince 2008, EDPR has put together an array of Business Plans, adapting to a world and an industry that is highly dynamic and has undergone significant changes since then. Planning, in single terms, breaks down a mission into strategy and objectives with expected outcomes, assigns measures and targets to monitor progress and identifies initiatives to develop tactics for strategic achievement. It is a process driven by strong involvement from management and, is in essence a top-down aspirational exercise. The plan defines a strategy based on three pillars: controlled risk, superior efficiency and focused growth. More specifically, some of the goals of the 2015 Business Plan include maintaining a distinctive low risk profile through proactive risk management, increase of cash flow generation through competitive refinancing and accelerated deleveraging, superior efficiency through focused investment on existing growth as well as new geographies and technologies. The plan also aims to deliver stable and attractive shareholders’ return through fundamental value creation and a dividend policy and address challenges through anticipation
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PHASE 1 WORKSHOPS
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ith a strong focus on renewable energy, the strategic partnership between EDP and CTG and the appointment of João Manso Neto as EDPR CEO, lead the management team to further intensify their regular meetings by including a series of workshops. Some of the important topics discussed during these meetings and workshops include: a) Historical Overview of EDPR b) Current Positioning and Competitive Benchmark c) Key Strategic questions d) Markets Overview e) Value or Growth? 2020 Vision and 2012-2015 Scenarios Moreover, during the first months of 2012, the Executive Committee held several events to establish the guidelines for EDPR´s 2015 Business Plan, as well as to evaluate EDPR’s recent operational and financial developments with the goal of redefining the company’s short term and long term vision. To encourage the debate on EDPR´s future growth path, different business areas were invited to contribute with presentations on new technologies and market opportunities, analysis on current and expected industry trends namely on regulatory environment, the competitive nature of the renewable energy industry, expected development of electricity prices and energy production mix in several markets. Other relevant topics of debate, analysis, and brainstorming included the new partnership between EDP and CTG, the investment of €2bn in minority stakes at EDPR wind farms, the expected constraints in EDPR expansion plans driven by the company´s defined risk profile, current energy prices, expected annual operational cash-flow, capital structure and financial constraints including reduced access to funding. As an outcome of the workshop, an action plan was defined based on 5 topics: a) Growth with further geographical and technological diversification b) Operational excellence and Opex/ Capex optimization c) Leverage on top-class team d) Target financial self-sustainability e) Maintain a low risk profile
Rui Teixeira CFO (Chief Financial Officer)
1. What is the main take away of the Business Plan that EDPPR has announced for the next years?
The main take aways are that EDPR is a world class company, whose people knows how to anticipate market changes and new trends, and that can build a successful growth story supported by strong fundamentals and creativity, such as maintaining a very low risk profile, excel in operations, asset rotation to crystalize value and building new opportunities in new markets.
2. What are the main markets and technologies identified as attractive for the development of EDPR until 2015?
The core of the development will be in markets where EDPR is currently present with 88% of the growth based from existing pipeline and focusing on growth markets such as Poland, Romania and Brazil. However, a new growth platform is also envisaged as EDPR looks for future sustainable growth in Central Eastern Europe (e.g., Turkey, Ukraine), Latin America (e.g., Mexico, Peru) and Africa (e.g., Morocco, South Africa). On the technology front, EDPR strategy is to build a relevant position in Sola Photo Voltaic as the recent, and significant, decrease of the cost curve enables a more competitive technology and, at par but for the long term, the development of a diversified portfolio of projects in the European wind offshore. 3. What are the top topics and/or concerns addressed by investors?
Recently, investors tend to show an increasing concern about regulatory risks and ability to finance growth. We believe that the former is overstated and as such it results in a misperception of the real risk associated with our assets, while the later is addressed and mitigated through the asset rotation strategy under implementation and EDPR’s track record on achieving successful funding at project level. With the recent clarifications on Spanish and Portuguese regulatory frameworks, as well as an improvement of the financial markets in Euro zone, we believe that investors will gradually build a more positive view about the company, focusing and challenging the management about the strategic levers laid down on the Business Plan 2015.
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PHASE 2 INTERNAL WORK
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eveloping a Business Plan is a fairly complex and resource intensive process that involves the support of various departments and key players as well as their coordination across geographies. It is the primary tool management relies on to drive strategy and align incentives within the organization. The EDPR Business Plan sets the stage for a discussion surrounding EDPR´s Strategic Agenda as a leading player in the wind industry and defines a path to achieve it. The Business Plan processes and the scenarios that drive the different growth options EDPR must manage in the upcoming years are equally important as the Business Plan itself. The information from EDPR´s Business Plan flows bottom-up, and the geographies´ proximity to the “needs and greeds” of daily business is vital in the process. The process involves a significant number of contributions from various teams and locations. Thus, it is a collaborative process where each team continuously learns from one another and enriches the plan with their distinct perspectives. That being said, the role of centralized functions is key to drive the Business Plan and to ensure consistency. Several departments such as Regulation and Markets, Technical Departments (namely Energy Assessment, Technical Support and Performance Management), Procurement, Development, Investor Relations, IT, Human Resources, Finance and Accounting are highly involved and play a noteworthy role in the building of the Business Plan. Along with the help of these departments, there is a certain process of coordination amongst EDPR´s team whom are currently operating in 11 countries. The Planning & Control (P&C) EU teams coordinate the 8 countries in Europe in which EDPR is present and the North American colleagues organize the management of operations in the United States and Canada. On the other hand, Brazil works as a stand-alone country. It is crucial, yet challenging, for all teams to align and organize coordination meetings, work around tight schedules and maintain transparent communication to ensure everyone is on the same page throughout the entire process. Once again, it is critical to be on the field with the local teams and for this reason, P&C EU, NA and BR play a vital and extremely valuable role in the process.
Bernardo Goarmon Head of Financial Planning & Control, Tax Planning and Corporate Controler
1. What were the major challenges faced when preparing the BP 2015?
Although the BP involves a clearly defined process, there are several challenges that come along the way. One of the most challenging aspects of preparing the BP 2015 was adapting to the unpredictability of the constantly changing markets, regulation and macro environment. These circumstances lead to a special importance on accurate setting analysis, as an essential tool in preparing the Business plan. Although EDPR has one official Business Plan, there are many scenarios to plan for, since flexibility is key. Simultaneously, another one of the biggest challenges is paying an adequate level of attention to detail while not losing focus of the big picture. In other words, making sure we have the ´´right trees´´ without losing perspective of the forest! 2. How is it to coordinate a team spread throughout 11 geographies?
Aside from the above mentioned challenges, coordinating a team spread across 11 geographies is an obvious challenge in itself. This was overcome through lucid conversation, clearly defined goals and procedures as well as the constant encouragement of an open channel of communication to ensure all relevant aspects are included and discussed. The most interesting aspect of dealing with 11 geographies is probably the positive “competition” for scarce resource, namely being able to include each countries´ own targets into the base case of the Business Plan. After running the BP cycle more than once, we quickly conclude that each market is very different in itself, but paradoxically very similar in essence of the business! 3. How to align Planning with Budget?
The Business Plan is strategic exercise and management should be focused on strategy and on who “we want to be as a company.” The BP is intrinsically forward looking. As such, there is value in delinking Business Plan from Budget (to begin with, management´s mindset should not be short-term and the level of detail should be quite different), but at the same time, the Budget should then be the numeric quantification of the Plan in the short-term detailing, for instance, revenue expectation, costs definition, capital detailed budgets, and more. Planning and Budget should work together in order to identify and quantify next year’s course of action and obtain organizational commitment to it. There’s certainly a time for the Business Plan and a time for Budgeting and even though these processes are strictly related, it is key to understand they are distinct in nature and serve different purposes.
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Planning and Budgeting Building Blocks SYSTEMS v
Overall, open communication between departments throughout all of EDPR´s geographies is necessary to work as a unified team. Financial Planning & Control teams maintain the sharing of knowledge by staying in touch with their colleagues´, serving as catalysts and supporters, and by staying up to date with the latest news in the markets and industry. They also support a SharePoint website where any member of the P&C teams, from Warsaw to Sao Paulo, can access files and check details such as contact information and pictures, calendars, key events, birthdays and more. The Business Plan process is a multifaceted one that begins with strategic guidelines, provided by management, including key variables for the Base Case and the main scenarios. Using this as guidance, a bottomup exercise is conducted by the Business Units, consolidated and presented to EDPR’s Executive Committee for discussion and approval, typically after 3 to 4 rounds or 3 to 4 weeks after the first submission, towards the mid-end of September. Then, a presentation follows late September or early October to EDP’s Executive Board of Directors for discussion and lastly, final presentations are presented to EDPR’s Board of Directors for approval. Most recently, the last Business Plan was also presented for information to EDP´s General and Supervisory Board. EDPR defines a preliminary capital allocation to the projects included in the Business Plan and that will be subject to a strict selection criteria in implementation. It has come a long way since 2008, in terms of opportunities (organic and via M&A) to create a pool of ´Ready to Build´ projects. After this pool of projects is created, only the best are selected. During the first years of the plan, it is particularly true that management is more prone to a set of risks involving execution, regulation and profitability that
Planning Process (Business Plan)
Budget Process
Baseline Forecasting
Strategic Planning
Performance Measures
Target Development
Objectives
Business Planning
Targets
Quantify Business Plan
Develop Detailed Budget
Consolidate & Review Budget
Objectives & Measures More Qualitative Process
More Qualitative Process
P&C ORGANIZATION (process ownership and support) Source: BearingPoint White paper: Planning and Budgeting – Getting the Foundation Right
may jeopardize the timely commissioning of a given project. Therefore, each country manager and/or area manager is invited to devise a plan of projects he or she would propose to build. Since resources such as human and capital are scarce, a filter criteria is then implemented by management on the basis of evaluating key resource constraints of EDPR and EDP Group as well as constraints defined and identified prior to the BP. Some of these constraints include the level of exposure to particular markets, diversification of portfolio and revenues, exposure to volatility of prices and more. At the same time, the EDPR BP takes into account entry into new countries and technologies such as solar and continued offshore investment, which constitutes an important pillar of 2012-15 growth. The selection of location, time and tools follows a disciplined framework that evaluates the risk of a specific country and of following through conducting business, regardless the existence of opportunistic deals for EDPR´s near future.
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Besides coordinating teams, geographies and projects, there is an operational and financial coordination that takes place involving a close liaison with the EDP Group Corporate Center. Key guidelines and macro assumptions are defined centrally, serving as important aspects of impact for developing the Business Plan. As the BP process reaches its close within EDPR’s Executive Committee, there are several meetings and discussions that must take place with the Management Planning and Control Department of EDP, who provide feedback that will then flow into EDPR’s version of the BP. Thus, it is a collaborative effort since EDPR constitutes an important piece of EDP’s Business Plan, most importantly in relation to the growth vector. In summary, there is a fluent and transparent flow of information and a continuous open channel between the P&C teams in Madrid (EDPR) and in Lisbon (EDP), that clearly improve the quality of workflow and simultaneously, allow for higher visibility in the overall Group picture.
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PHASE 3 COMMUNICATION
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he main goal of the Business Plan is to present a compelling investment proposal to current and potential shareholders and to attract capital to execute it. Guarantee the principle of equality among investors and to efficiently transmit clear information, the EDPR management team organized an Investor Day to present the company´s value proposition. After announcing the Business Plan to investors, management made themselves available for media reports. The Investor Day preparation began well before the day it was presented. The Investor Relations (IR) department is continuously monitoring the financial market’s expectations on EDPR and the current key topics investors and analysts are using when valuing our business. With the objective of bringing the market expectations and the company’s aspirations closer the IR Department and the Financial Planning and Control department intensified their collaboration and moved along with the evolution of the Business Plan. The IR Department participated in all the workshops and BP discussions, and along its construction had a crucial role of challenging the defined strategy to help in the alignment between management decisions with the capital market concerns and expectations. Once the Business Plan was approved by the Corporate Bodies of the Group, it was immediately disclosed to the investors’ community. It was also made available to download through the EDP´s and EDPR´s websites and the CMVM webpage. António Mexia, João Manso Neto and Rui Teixeira officially presented EDPR´s Business Plan with management´s commitments and the company’s strategic objectives and then made themselves available to answer any questions from the audience. There was a successful turnout for Investor Day, exceeding 160 attendees. With the objective of maintaining a strong relationship with several investors and shareholders as well as conveying and spreading EDPR´s new objectives to the financial community, EDPR management went through a 2 weeks road show in Europe and U.S. Overall, more than 50 meetings were held in London, Paris, Frankfurt, Zurich, Geneva, Boston and New York. With the objectives established and properly disclosed to investors and analysts, the financial market will now follow EDPR´s performance quarter-to-quarter and year-toyear through 2015.
Rui Antunes Heaf of Investor Relations
1. What is the relevance of an Investor Day for the IR activities?
The Investor Day is IR’s most important event of the year. It is the day that sets the company’s equity story: why the company is distinctive and where it wants to be for the medium and long term. In front of shareholders, financial analysts and potential investors, the company management presents a strong commitment towards the capital markets. This event is a golden opportunity for the IR department that plays a crucial role in bringing the management and the market agents to the same page. It represents the core and the spirit of the Investor Relations work: 1. To reduce the gap between the company’s intrinsic value and the market view; 2. To “sell” a competitive “product” in a market where capital is a limited resource; 3. To guarantee the principle of equality among shareholders. 2. What are the main concerns and challenges when preparing the EDPR 2012 Investor Day?
The main challenge is to present a clear, consistent and solid message; a message that will not just give a value proposition for a short term investment but a clear roadmap for the long term. Investors want to see an achievable, credible and attractive business plan on which they will keep a close monitoring to track down the company’s performance. Therefore three thinks are of utmost importance during the investor relations’ preparatory work: 1. a strong and deep knowledge about the company’s strategy, sector trends and macro context; 2. a perfect internal alignment and coordination with the other departments within the company, and more importantly with the top management; 3. a simulation… we need to put ourselves in the investors´ shoes and try to understand their potential reactions, which is definitely the most difficult and interesting task. 3. What is the main feedback received from investors?
The capital market always welcomes this initiative as it is a good opportunity to be with and listen to the company´s top representatives, and in this case to meet EDPR’s new CEO, João Manso Neto, for the first time. In particular, the message conveyed by EDPR through its top management was very well received by the market and it was considered as refreshment in the midst of the difficult market context. A clear strategy based on premium assets in operation, quality growth through the execution of highly profitable projects, and a self funding approach based on alternative funding structures and CTG’s expected investment in our wind farms. Of course our business plan could have its own challenges and the capital market might have its own doubts on our success, based on either endogenous or exogenous reasons, namely the macro/sovereign risks, regulatory risks or growth execution risks on our current markets and/or on new markets and technologies. Therefore the investors and analysts will always monitor and evaluate our performance. It is now time for all of us in the company to show that we can accomplish our targets!
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online 24 hour s in th e lif e of ...
24 hours
FRANCISCO ESPÍN MOLINA Offshore Energy Assessment Manager
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An electrical engineer with more than 10 years’ experience in the renewable energy sector, Francisco Espín Molina has been working on the Moray Offshore Renewables (MORL) project for almost three years. In his role as energy assessment manager for MORL — EDPR’s joint venture with Repsol to explore offshore projects in the U.K. — Francisco juggles a wide variety of demanding yet rewarding responsibilities to keep the wind assessment process running as smoothly as possible. Whether he’s managing wind resource and metocean measuring campaigns, monitoring wind potential studies or conferring with colleagues to ensure the validity of technical documentation provided by wind turbine manufacturers, Francisco finds his workday to be chock-full from start to finish. Despite the busy pace at the office, Francisco still makes time most days to unwind after work with an evening stroll around Edinburgh. According to Francisco, his adoptive city is a great place to live and work, despite the all too often gloomy weather and bland British food. Above all, he’s thrilled to have the good fortune to be there at this point and time working with such a dedicated team on EDPR’s first offshore wind project.
Francisco Espín de Molina is proud of being involved in the first offshore wind project of EDPR. He brings his vast experience in renewable energies to his work on the MORL project, and enjoys balancing between overseeing back-to-back meetings and connecting with co-workers during day work.
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Arriving at the office OR The day begins
Upgrade and review of project information
Short coffee break with office colleagues
EDPR’s U.K. office is located on Edinburgh’s principal shopping street.
Francisco prepares for his workday.
EDPR has around 30 employees in the U.K. office.
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Technical Team coordination meeting
Time for lunch
Work meeting
The members follow up on ongoing projects.
Francisco usually takes a break and has lunch at home.
Francisco addresses a few technical issues with colleagues.
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Meeting with Energy Assessment department in Seville
Meeting with Project Director Dan Finch
Leaving the office
Dan is also the country manager for EDPR in the U.K.
Francisco enjoys going for a walk before returning home.
Despite the distance, some transversal projects can be followed up by videoconference.
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onpeople Get to know your colleagues better
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CEDRIC KOUAM MARKET OPERATIONS MANAGER
arket Operations Manager, Cedric Kouam, joined EDPR North America in May 2008 under what used to be the Energy Management Group. In his current position, Cedric interacts closely with many of the departments within the organization giving him the opportunity of seeing the bigger picture. During his tenure at EDPR NA, Cedric has watched the industry evolve. “My role requires me to stay on top of the regulatory changes in the various ISOs/RTOs to ensure we capture the opportunities brought forward by changes in market rules and wind integration initiatives,” Cedric said. “Change is inevitable and I have seen plenty of it since joining the company.” Market Operations main task is to optimize energy sales for merchant assets. “By merchant assets, I am referring to those wind farms for which we do not have a power purchase agreement with an offtaker,” explains Cedric. The department achieves this by scheduling energy in the various Day-Ahead markets, executing power and congestion hedges,
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selling capacity, and most importantly, staying on top of the regulatory changes. “There are a lot of moving pieces, but that’s what makes it exciting,” he said. In Cedric’s previous role with the company in the former Energy Management Group, he was tasked with assessing the changes in the company’s year end expected revenues on a weekly basis, as well as quantifying the revenue impact of uncertainties in merchant electricity prices and wind power generation. “This helped me understand how sensitive our bottom line can be to changes in power prices and wind power generation,” said Cedric. “As I look for ways to optimize our merchant revenues each day, I always keep in mind what the impact of each additional cent or dollar we can get for our electricity is on the overall portfolio.” Cedric enjoys the flexibility and the opportunity to be creative in the way EPDR NA sells the electricity. “Don’t get me wrong, we have sound guidelines from Management on how we can schedule our energy into the various markets; but within those guidelines, we still enjoy a great deal of discretion which gives us room to pursue 14 onrenew
opportunities we foresee in the markets,” he explains further. Cedric has had many rewarding moments at EDPR NA including representing the company at the Global Management Challenge and winning at the US National Final. The team, comprised of four other colleagues, went on to compete at the International Final in Kiev, Ukraine. “I like the energy and dedication of my colleagues; they are actually fun to work with,” exclaimed Cedric. “The Global Management competition was an exciting and a unique opportunity.” Inspired to be as passionate as his dad, Cedric takes pride in knowing his actions have a direct impact on the bottom line. “My dad is passionate about his work and everything he does – I would like to embody the same passion and dedication throughout my professional career.” Cedric takes his passion outside of his professional life and applies it to his other interests which include soccer, tennis, biking, and cooking. “I am also a terrific Michael Jackson impersonator,” he laughs. “I can moonwalk, for real.”
The effort and dedication of our employees allow us to exceed as a group. In each issue, we highlight employees who have demonstrated diligence in their work at EDPR.
JACINTA CARVALHO SENIOR MANAGER IN CORPORATE DEVELOPMENT
hirty-nine-year-old Jacinta Carvalho works for EDPR’s Corporate Center as a senior manager in Corporate Development. In her role, Jacinta helps to achieve and maintain alignment and harmonization across the organization and to assure the proper institutional processes are put in place to support EDPR’s overall strategic vision. Always a team player, Jacinta also participates in serving other business areas within EDPR so that its dynamic and ambitious objectives can be achieved in the best possible way. Jacinta holds a degree in computer science engineering from IST in Lisbon as well as an Executive MBA from AESE/IESE. A lifelong learner and passionate advocate for education, she tries to study a new subject matter every four years and is always up for new initiatives and challenges. She is currently pursuing a master’s in International Business and Trade Management from the Universitat Barcelona and EAE Business School. Jacinta started her professional
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relationship with EDP in 2000, when she began working for the EDP Group as an external business consultant. Newly arrived from Brazil, where she had made her mark in the telecommunications sector, she collaborated with an international project team to create the start-up EDP Energia (currently known as EDP Comercial). Following that project, Jacinta was invited to join EDP Comercial in the IT/IS department and later the Processes area, where she followed the company’s business evolution closely until 2008. After consolidating seven-plus years’ of experience in B2B commercial electricity and value-added services business processes, Jacinta applied for a position with EDPR in Spain. She says it a true pleasure to work for a forward-thinking company and is particularly impressed with EDPR’s visionary board of directors and senior management, describing them as the most admirable team of professionals she has ever known. The frequent organizational adjustments that onrenew 15
EDPR undergoes are just one more piece of evidence of the company’s desire to continuously innovate its business model and work toward results-oriented achievement allowing everyone to play a relevant role. Apart from being a great place to work, EDPR fulfills her personal need to contributes to making the world a better place. In particular, Jacinta credits her participation in EDPR’s volunteer programs over the last couple of years for changing her life and role as a parent. Jacinta is mom of two girls, ages 5 and 7 and she treasures her family. She also loves animals of all kinds - and has amassed quite the little zoo at home! In her free time, Jacinta enjoys outdoor activities such as surfing, sailing, golf, cycling and rollerblading, especially in the company of family and friends, and says she hopes to live by the sea one day. In addition, as of late, she has turned her interests indoors, having picked up some new moves thanks to a ballroom dancing class.
ontop Tips t o help y ou in y ou r d a ily lif e
Information Security. These days, information represents one of the most valuable assets within the Group, and keeping it safe should constitute a priority for everyone. Start incorporating these tips in your workday.
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DO NOT SHARE YOUR PASSWORD Do not give your password to anyone, make it difficult to decipher and change it regularly.
LOCK YOUR WORK SESSION Whenever you leave your workstation or workplace, make sure to lock or shut down your computer.
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DO NOT LEAVE DOCUMENTS ON THE PRINTER OR FAX When printing an official document, ensure that you retrieve it immediately.
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DO NOT LEAVE IMPORTANT DOCUMENTS ON YOUR DESK At the end of the day, or even at lunchtime, remove confidential documents from your desk.
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DO NOT THROW CONFIDENTIAL DOCUMENTS IN THE TRASH Instead, use a paper shredder to dispose of them safely.
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CARRY INFORMATION SECURELY When taking important company documents with you outside the office, such as while using public transportation, ensure they’re inserted carefully in a briefcase or another safe container.
SAVE YOUR DATA IN THE NETWORK Ensure that all important company documents are stored in network shares and not in the local computer.
DO NOT PRINT CONFIDENTIAL DOCUMENTS Avoid printing whenever possible. Remember that everything that is not printed is information inaccessible by third parties.
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ontarget EDDIE KOLITZ, Regional Operations Manager for EDP Renewables North America
• Develop a regional mission statement • Maintain organizational effectiveness • Increase technical energy availability
Eddie Kolitz, Regional Operations Manager for EDP Renewables North America, is always seeking excellence. Under his leadership, Kolitz’s team of 12 established its own mission statement focused on increasing total energy availability for the region’s fleet. For the past five months, the four wind farms in the Western Region of the U.S. have been consistently producing at an average of 98.5% technical energy availability. The region’s wind farm fleet consists of three projects in Oregon and one in Washington totaling 400.95 megawatts (MW) -- Rattlesnake Road Wind Farm (102.9 MW), Wheat Field Wind Farm (96.6 MW), Elkhorn Valley Wind Farm (100.65), and Kittitas Valley Wind Farm (100.8 MW). EDPR North America strives for a 97.5% technical energy availability for all wind farms. The Western Region Team has proven that its contribution to this target is obtainable by consistently performing above that level. “The success of the Western Region Operations team begins with our vision to be the best in class and market reference through continuous improvement,” said Kolitz. “It is the mission of the team to tirelessly and relentlessly strive to excel in every aspect of operations. By continuously refining our processes and performance, we will set the standard by which all other operations regions are measured.” Kolitz has more than 23 years of
experience in the wind industry. He started his career at Whitewater Hill in Palm Springs, California, in 1988 as a temporary laborer performing blade root packs on Bonus wind turbines. “I was a kid who needed something fun and rewarding to keep me interested,” said Kolitz. “The wind industry provided me exactly that. The work was grueling, but worth the reward of finding something I felt passionate about.” Kolitz believes every member of his team is an equal contributor to the teams overall success. The Western Region team is unified, and its success at staying on target can be attributed to the entire team accepting ownership, accountability, “We must also have the support of the best in class resources available in the industry; we get this by way of the performance management, asset management, central maintenance, remote operations, legal, human resources, as well as many other departments,” Kolitz said. By utilizing these resources as they are intended, the team has the ability to focus on plant operations which requires being extensively aware of the equipment performance and condition, contractors, expertise and integrity, weather conditions both current and forecast, and external agency plans such as grid operations and maintenance, in order to identify trends and proactively plan solutions. 18 onrenew
The conditions can change from day to day so organizational effectiveness is critical to remain agile. “We are able to build more efficiently by enabling the operations administrators to effectively manage the operations offices in every aspect from filing to maintenance and everything in between,” said Mike Hulse, Western Region Turbine Reliability Specialist and former Elkhorn Valley Wind Farm Operations Site Manager. “Eddie and my site manager, Eric Melbardis, allow me to take ownership of the administrative tasks needing to be completed in order for the wind farms to run as efficiently as possible, yet I am also allowed the opportunity to be in the field and help with QAQCs when needed” said Kittitas Valley Wind Farm Operations Administrator Megan Conner. “I always feel like a valued, integrated team member.” Posting targets and results in highprofile locations in every regional operations office help the team never lose focus of key performance indicators. “Communicating these targets and results to the service and maintenance contractors help us stay on track,” said Mark Hauter, Operations Site Manager at Rattlesnake Road and Wheat Field Wind Farms. “Our team in the West is very determined and motivated to remain on target,” Kolitz said. “I look forward to many more successful years for our region.”
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onchange Employees with the courage to change
ARCHIMEDES PEREIRA DA SILVA JUNIOR 35 years old Environmental Manager
rom the small city of Lins, around 450 km from the capital of São Paulo, Environmental Manager Archimedes Pereira da Silva Junior joined the EDP Renováveis team in April 2012, taking on new professional challenges. “I can see that EDPR has great growth and investment potential in Brazil. The Brazilian market recognizes the company for its commitment and the progress it has made in the renewable energy sector.” Educated in civil engineering and with a Master’s in Sanitation and Environment, Archimedes began his career in the energy sector in 2004 in the São Paulo
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his duties at EDP was to monitor the implementation of environmental programs focused on air quality, water quality, urban infrastructure adaptation. At the end of 2011, Archimedes accepted an invitation to help EDPR, focusing on the Tramandaí wind farm in the state of Rio Grande do Sul, where he coordinated thermal and wind power environmental activities. “The two power sources complement Brazil’s energy system (80% of which originates from hydroelectric plants), with similar environmental monitoring, but with a different focus: atmospheric emissions, water consumption and effluent discharges are the focus
Embrancing the responsability AFTER 5 YEARS AT THE EDP GROUP, ARCHIMEDES HAS TAKEN ON NEW RESPONSIBILITIES IN THE WIND POWER SECTOR, BRINGING HIS ENVIRONMENTAL EXPERIENCE TO EDPR.
State Secretary of the Environment’s Environmental Impact Assessment Department (DAIA), where he worked in assessing the environmental impacts of undertakings in the energy sector. At the EDP Group since 2008, Archimedes worked as an environmental analyst in EDP’s Generation division. During this time, his main responsibility was tied to the Porto do Pecém I (UTE Pecém I) thermoelectric plant, under construction in São Gonçalo do Amarante, in the state of Ceará, through a partnership between EDP and the company MPX. With frequent trips to the municipality, he has monitored every step of the project – which ultimately had 5,000 construction workers – since its initial phases. One of 20 onrenew
at thermal plants, while the monitoring of fauna – specifically bird species – is the focus at wind farms, he explains. His challenges at EDPR include expanding knowledge on environmental legislation; interaction with the EDP Institute, socio-environmental work in the Wind Farms surrounding communities; monitoring developments in EDPR’s sustainability policies at its units in Brazil; and managing the activities of environmental consulting companies. “The transition between the companies was transparent, and I was supported by both sides. Taking this position is a great responsibility which I embrace with true joy and satisfaction”.
“Moving from EDP Generation’s environmental area to EDPR is a major challenge that motivates me to grow personally and professionally”
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ontrack World events EDP
EDP Renewables 1H 2012: EBITDA up by 23% to 504 million euros
Revenues increased by 23% to 673 million Euros and net profit rose to 100 million Euros (reflecting 33% YoY like-for-like growth) EDP Renewables (EDP Renováveis, Euronext: EDPR), a global leader in the renewable energy sector and the world’s third-largest wind energy producer, today announced that in 1H 2012 electricity output increased by 13%YoY to 9.9TWh, as a result of the capacity growth over the last 12 months (+339 MW), an average load factor of 32% and a technical availability of 98%, all of which reflect the company’s balanced, high performing asset portfolio. 1H 2012 revenues increased 23% to €673 million, outpacing volume growth thanks
to the 10% average increase in selling prices in the period. EBITDA grew 23% YoY to €504 million, which resulted in a 75% EBITDA margin. EBIT increased 42% YoY as of result of the solid operating growth and the extension of the useful life of EDPR’s operating assets to 25 years (introduced in 2Q 2011).Profitability per MW in operation rose by 13% to €71,400 (EBITDA/avg MW). As of June 12, net debt was €3.5 billion, slightly above Dec-11 levels, while the cost of debt was kept under control having been reduced by 30 bps to 5.3%. The operating cash flow generated by EDPR is already the main source of funds, with the €361 million generated in the period 22 onrenew
having covered more than the Capex of €113 million. There was a 12% increase in the reported net profit to 100 million. On a like-for-like basis, net profit rose 33% when adjusted for the change in the operating assets’ useful life to 25 years, introduction of deferred tax accounting in the US, forex differences, capital gains, excess ofprovisions and write-offs/ impairments. Such solid performance mainlyreflects the higher profitability achieved in the period and the controlled cost of debt. These solid results show EDP to be fully on track with its 2015 strategy, defined in May 2012, and reflect on going improvement in the company’s portfolio metrics.
EDP Renewables inaugurates two wind farms in France Located in Marcellois and Massingy-lès-Vitteaux, two towns in Côte-d’Or, in France’s Burgundy region. The annual combined output of both wind farms will be equivalent to the annual electricity use of 21,000 homes. The inauguration of the wind farms was attended by Frédéric Lanoë, Managing Director of EDP Renewables France and Belgium as well as François Patriat, the member of the French Senate representing Côte-d’Or and President of the Regional Council of Burgundy. Equipped with Vestas wind turbines, the output of the Marcellois and Massingy-lès-Vitteaux wind farms meets EDPR’s expectations, guaranteeing optimal operating conditions in the region. Construction of the wind farms began in June 2011 and took around 6 months, with operations beginning on 20 January 2012. Present in France since 2001, EDPR has an installed capacity of 306 MW, totaling 167 wind turbines, in its portfolio. This installed capacity places the company among the four main players in the onshore wind power sector in France.
INSIDE INVESTOR RELATIONS [IR MAGAZINE] PRESENTS AWARD TO EDP RENEWABLES EDP Renewables has been recognised as the best European renewable energy company in the area of investor relations, winning the IR Magazine Award for “Best Investor Relations by Sector”. IR Magazine is an international magazine which presents the leading awards honouring excellence and leadership in investor relations. In the category for renewable energy companies, the department headed by Rui Antunes at EDP Renewables was awarded first place in the European market. EDP Energias de Portugal, the parent company and majority shareholder of EDP Renewables, was also granted two awards in the field of investor relations: first place in the category of best Portuguese company and runner-up in the utilities category. João Manso Neto, CEO of EDP Renewables, said, “Once again, the excellent work of our Investor Relations department and the company’s efforts in this field have received international accolade”.
EDPR received the Best Sustainability Award in London In recognition of its forward-thinking role as a market leader in the renewable energies sector, EDPR received the prize for “Best Sustainability Deal” at the fifth annual EMEA Project Finance Awards during a ceremony held June 21, 2012, at the Grand Connaught Rooms in central London. The awards, which are coordinated by EMEA Finance magazine, honor the top project finance, advisers and deals in Europe, the Middle East and Africa over the last year. Closed in June and July 2011, the winning deal entailed the simultaneous financing of two wind farms, Pestera and Cernavoda, in the Dobrogea region of Romania, with a total combined wind capacity of 228 MW. The project, which EDPR co-sponsored with its Romanian partner, the Renovatio Group, represents Romania’s first project financing deal in the field of wind power and, more broadly, in the energy sector. In addition, it signals the financing of EDPR’s first wind farms in Romania, demonstrating the company’s strong commitment to implementing a funding strategy that supports growth and a strong financial performance. It also brings onrenew 23
much deserved attention to the impressive work and capabilities of EDPR’s and EDPR Romania’s technical, legal and financials teams, all of whom worked together to achieve the best financing for these wind farms. In particular, Celma Pires, Gabriela Dimancea, João Pedro Summavielle, Laura Lazar, Laura Stan, María González Rodríguez and Pablo Lucas were directly involved in bringing the winning project to fruition. Financing for the project was provided by the International Finance Corporation, a member of the World Bank Group, and the European Bank for Reconstruction and Development, which syndicated part of the debt to the commercial banks Unicredit, Société Générale and La Caixa. Comprising roughly 40 percent of Romania’s wind power capacity at the time of the closing, the project has effectively transformed the country’s wind energy market, helping it to meet the European Union’s green energy quotas and paving the way for other transactions with small- and large-scale renewable energy developers.
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EDPR NA HOSTS FIRST ANNUAL COMPANY PICNIC
On Saturday, June 23, 2012 more than 200 EDPR NA employees and their guests participated in the company’s first annual picnic. The picnic was held at the Houston Zoo in Houston, Texas. Employees were encouraged to invite family members and guests to the company event. EDPR NA hosted a picnic lunch at the Karamu Outpost Private Pavilion and complimentery SnoCones were available to guests throughout the event. In addition to viewing zoo animals and their exhibits, zoo activities were plentiful and included feeding giaraffes, a water play park, a scavenger hunt and a carousel ride. Face painting and animal petting was also available. “Our first annual picnic was a great success,” said Gabriel Alonso, CEO. “The event allowed us to relax, interact with co-workers in a fun setting, and show additional appreciation to the families of our employees who support the organization on the home front.”
JOÃO MANSO NETO SPEAKS AT THE “CEO EXPERIENCE” MEETING IN LISBON The CEO of EDP Renováveis attended the fourth edition of the CEO Experience. CEO Experience is organised by the Portuguese newspaper Diário Económico, in partnership with Accenture consultants. The event took place in Lisbon on July 18th. This conference was entitled “Internationalisation and New Business Models” and was an opportunity for the CEOs of the largest companies operating in Portugal to meet and exchange experiences. EDP Renováveis, Portucel and Delta Cafés explained how they are successful abroad due to various business models. The person with global responsibility for the area of strategic consultancy at Accenture, Mark Spelman, was speaker and put forward the theme of a recipe to use abroad:
companies should stimulate business opportunities in the emerging markets, without forgetting to invest in followingup and forecasting the rapid changes in purchasing power and consumption trends in these countries. Each company presented the internationalisation model that has enabled it to win new markets. At EDP Renováveis, which has a strong presence in the United States and Spain, the internationalisation strategy is based on accuracy, methodology and flexibility. The Executive Chairman of this EDP group company, João Manso Neto, ensures us that for expansion abroad, “there is no single recipe. When we go international, we have to see where and which markets and what we’re going to be facing”.
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WILDLIFE CENTER OF TEXAS WELCOMES EDPR NA EDPR NA employees volunteered at Houston’s Wildlife Center of Texas. The event was coordinated through the Employee Volunteer Program which promotes monthly volunteer opportunities. The Wildlife Center of Texas is a non-profit organization that was formed to meet the increasing need for wildlife care in Houston and Upper Gulf Coast areas. The Wildlife Center of Texas’ mission is to care for injured, ill, and orphaned wildlife through rehabilitation, public education, and release. According to its website, the organization cares for 8,000 wild animals every year and relies heavily on volunteers and donations. The group of 21 volunteers attended a 45 minute orientation before spending 3 hours filling the various needs of the shelter. Volunteers rotated between the feeding stations for the various birds, owls and marsupials. “All of us recognized the tremendous need for volunteers at the Wildlife Center,” said Robin Hill, EDPR NA’s Employee Volunteer Program Committee Co-Chair. “Everyone seemed to enjoy the volunteer work even though there were some unpleasant tasks such as feeding dead mice to the spotted owls!” 24 onrenew
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Atlanta Hosts WINDPOWER 2012 The American Wind Energy Association (AWEA) hosted its annual WINDPOWER Conference and Exhibition June 3-6 in Atlanta. The four-day event was attended by 920 exhibitors and approximately 11,000 people and was packed full of speeches, sessions, panel discussions, meetings, and networking functions. According to AWEA, the organization chose to host WINDPOWER 2012 in the South because the region is an emerging manufacturer and transportation hub for the industry. The South is also an up-andcoming market for renewable energy purchases and new wind farms. Denise Bode, CEO of AWEA, was pleased with the location of the event. “We met our expectations
for our first entry into the South, with tremendous response from members of the business community who were not aware how much ‘skin in the game’ the South has, with 90 manufacturing facilities in wind,” said Bode. Approximately 60 EDPR NA employees from various departments were present at WINDPOWER 2012. “We are a leader in our industry and our presence at AWEA is crucial to rally our supporters,” said Gabriel Alonso, CEO. “This annual event allows our team opportunities to network, meet with potential off-takers, and participate in panel discussions that will allow us to become a stronger, more unified industry.” EDPR NA and the American Wind Wildlife
Institute (AWWI) co-sponsored an afternoon networking event in the EDPR NA booth that was attended by more than 100 guests. “It was a great opportunity to connect with other players in the industry that I do not frequently get to see,” said Jon VanDerZee, Regional Environmental Manager. Each year at WINDPOWER, the Women of Wind Energy (WoWE)
EDPR NA VOLUNTEERS REBUILD COMMUNITY VOLLEYBALL COURT
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organization hosts a luncheon and presents its Woman of the Year Award to an individual who stands out for her leadership, inspiration, and significant contributions to the expansion and improvement of the wind industry. This year’s recipient is Leslie Freiman, EDPR NA’s General Counsel, Chief Regulatory Officer, and Secretary.
On June 16, 2012 volunteers from EDPR NA teamed up with Fifth Ward Community Redevelopment Corporation (FWCRC) to rebuild a community area volleyball court, a project designed to support the youth in the Fifth Ward community. The volunteer activity was coordinated and promoted through the company’s internal Employee Volunteer Program. Seven volunteers worked nearly five hours in the Fifth Ward Community refurbishing the outdoor volleyball court. The team, under the supervision of FWCRC’s Project Supervisor John Ridington, excavated sand; separated and disposed of old geo-tech fabric; stained and preserved wood planks; and reinstalled the frame for the court. “The project supervisor commented on the good work the EDPR NA volunteers performed,” said Carole Engelder, Employee Volunteer Program Co-Chair. The Employee Volunteer Program coordinates and promotes regular monthly and quarterly volunteer activities. Kemeshia Edwards, Accounts Payable Associate, was especially touched by the location of this month’s activity. “This is a community where much of my family resides,” said Edwards. “It is an honor to work for a company that understands the importance of being involved in our local communities.” FWCRC was organized in 1989 by Fifth Ward residents, business owners, ministers, educators, and civic leaders. Including the site of historic churches, the city’s first black settlement house and the first black arts complex, the Fifth Ward has a rich history. According to the organization’s website, past residents of the Fifth Ward include late Congressman Mickey Leland, Congresswoman Barbara Jordan, civil rights pioneer Dr. Lonnie Smith, boxer George Foreman, and Jazz artists Joe Sample and the Crusaders. Settled and developed in the 1800s and early 1900s, the neighborhood experienced decline and disinvestment from 1965 to 1990, but is now seeing a surge in redevelopment, investment, and community.