First-quarter 2011 presentation to analysts...First-quarter 2011 presentation to analysts Hafslund ASA 4 May 2011 Christian Berg, CEO s.2 Highlights first quarter 2011 • EBITDA:

First-quarter 2011

presentation to analysts

Hafslund ASA

4 May 2011

Christian Berg, CEO

s.2

Highlights ─ first quarter 2011

• EBITDA: NOK 656 million - operating businesses on a par with Q1 2010.

• Power Sales and District Heating: Strong demand in the first quarter of 2011.

• Hydropower production: Low drainage basin influx resulted in 35 percent below-normal hydropower generation in the

quarter.

• Hydropower sales price: NOK 0.474 per kWh, up four percent from Q1 2010.

• Network: Profit level was normal for the quarter.

• High cash flow in the quarter: NOK 2.6 billion, of which NOK 1.5 billion is attributable to capital freed through asset sales.

• Board of Directors recommends an extraordinary dividend of NOK 5.0 per share in addition to an ordinary dividend of

NOK 2.50 per share for the 2010 accounting year.

s.3

EBITDA ─ first quarter 2011

656819121

260

130

134

0

100

200

300

400

500

600

700

MNOK

EBITDAOther ActivitiesVenturePower SalesNetworkDistrict HeatingHydropower

s.4

EBITDA: change from Q1 2010

32

Q1 11

656

Other ActivitiesVenture

1 218

Power Sales

69

NetworkQ1 10

44

Hydropower

22

District Heating

14

-520

MNOK

s.5

Development cash flow from operations

2 7692 806

2 625

2 468

2 218

2 1162 1302 116

2 000

0

500

1 000

1 500

2 000

2 500

3 000

Q4 09

0.27

Q3 09

0.30

Q2 09

0.34

Q1 09

0.31

NOK/kWh

0.1

0.2

0.0

MNOK

+38%

Q1 11

0.39

Q4 10

0.39

Q3 10

0.35

Q2 10

0.32

Q1 10

0.30

0.4

0.3

0.5

• Cash flow from operations up 38 percent over the past two years:

• Increased Powerprices (NOK 280 million)

• Network (NOK 180 million)

• Power sales (NOK 194 million)

• Increased renewable energy production: NOK 50 million.

• EBITDA sensitivity: a NOK 0.10 per kWh change in wholesale power prices results in an approximately NOK 360 million change in EBITDA

EBITDA development12-month rolling EBITDA vs. wholesale power prices

Power prices – rolling 12-month average**EBITDA*

* EBITDA = rolling 12-month EBITDA excluding financial asset value changes (in NOK million).** Power prices for Hafslund Hydropower – rolling 12 month

s.6

Interest-bearing debt: down NOK 2.9 billion in Q1 2011

3

4

5

6

7

8

9

10

11

12

13

14

0

10

20

30

40

50

60

Equity ratio %NOK billion

Q1 11

10.1

37

Q4 10

13.1

35

Q3 10

11.1

35

Q2 10

11.3

33

Q1 10

11.9

34

Equity ratioNet interest-bearing debt

Net interest-bearing debt and equity ratio Change in interest-bearing debt in Q1 11

Amounts in NOK million

Net interest-bearing debt 31.12.2010 -13 067

EBITDA 656

Interest paid -190

Tax paid -98

Change in market value of financial instruments 22

Change in working capital 923

Investments -232

Net loan portfolio adjustments 1 847

Net interest-bearing debt 31.03.2011 -10 139

•s.7

Working capital requirements- seasonal variation

• Seasonal variation in working capital driven by both volume sold and prevailing power prices.

• Working capital normally peaks in Q1 and Q4 due to strong sold volumes.

• Working capital: NOK 1.1 billion, down NOK 1 billion in Q1 2011.

-1 000

0

1 000

2 000

3 000

4 000

0,2

0,3

0,4

0,5

0,6

0,7

sep.09 mar.10des.09mar.09 jun.09 jun.10 sep.10 des.10 mar.11

NOK/kWhNOK mill

0

1 500

3 000

4 500

6 000

Q1 11

5 453

2 162

Q2 09

2 613

Q3 10

GWh

Q4 10Q2 10

2 602

Q1 10

5 2465 001

Q4 09

3 007

4 105

Q3 09Q1 09

4 369

Working capital Average power prices

Working capital and power prices

Power sales - sold volume

s.8

Hydropower

• Profit and operating revenue figuresreflect low power production and power prices somewhat above Q1 2010.

• Production 35 percent below normal for the first quarter.

• Nasdaq OMX (NO1) spot price: NOK 0.531 per kWh (Q1 2010: NOK 0.508 per kWh).

• New FKF 4 generator went online in late April 2011: 100 GWh added to Hydropower’s capacity.

• Projected Q2 2011 generation: approximately 830 GWh; anticipatedvolume is 20 GWh or 13 % belownormal for Q2 2011.

929

719

0

100

200

300

400

0

200

400

600

800

1 000

1 200

Q1 10

178

12 monthsquarter

Q4 09

154

Q3 09 Q4 10

186

Q2 09

252219

Q3 10Q1 09

303

102

Q2 10 Q1 11

240

134

EBITDA rolling 12-monthEBITDA per quarter

NOK million Q1 11 Q1 10 2010 2009

Operating revenue 178 238 1 196 856

EBITDA 134 178 972 661

Operating profit 123 167 929 618

Sales price (NOK/kWh) 0,47 0,46 0,39 0,28

Production volume (GWh) 371 520 3041 3018

Investments 24 40 161 165

s.9

Hydropower production profile

156142

210

286

333 335 342

313 314

214

174

221

0

50

100

150

200

250

300

350

GWh

DecNovOctSepAugJulJunMayAprMar

99

Feb

113

Jan

158

277

Normal20112010

*Normal annual production = 3,000 GWh based on 10-year average of production adjusted for capacity improvements.

s.10

District Heating

• Higher wholesale power prices resulted in Q1 2011 revenue growth compared with Q1 2010.

• Q1 is a seasonally strong quarter; deliveries are roughly 40 percent of normal annual production.

• Production: 19 percent above normal for the quarter due to strong demand.

• Contribution margin per kWh somewhat lower due to higher production costs.

• New delivery contracts signed in Q1 2011: 50 GWh annual energy outtake.

• NOK 50 million invested in new renewable production capacity in Q1 2011.

261

238

- 50

0

50

100

150

200

0

50

100

150

200

250

300

6

Q4 09 Q3 10

58

Q1 09

25

93

140

Q2 10Q3 09 Q1 11Q4 10

32

-11

130

quarter

Q1 10

152

12 months

Q2 09


NOK million Q1 11 Q1 10 2010 2009

Operating revenue 511 467 1 144 747

EBITDA 130 152 283 213


Gross margin (NOK/kWh) 0,34 0,35 0,34 0,33

Production volume (GWh) 717 720 1 782 1 382


s.11

District Heating — energy sources and unit cost

Ratio Electricity and renewable energy sources rolling 12

Waste and biomasse

Heatpumps

Electricity

Oil and natural gas

Biooil og biodiesel

0

100

200

300

400

500

600

700

800

50

60

70

80

90

%GWh

Q1 11

716

Q4 10

694

Q3 10

134

Q2 10

234

Q1 10

720

• Production costs depend on energy input source and price.

• Proportion of electricity and renewable energy sources up 6 percentage points to 80 percent in last 12 months.

• Use of bio-oil as peak load source in Q1 2011.

• Production costs increased NOK 0.077 per kWh from Q1 2010.

Energy prices (NOK/kWh) Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

Waste & biofuel 0,17 0,18 0,19 0,18 0,20

Heat pumps 0,21 0,15 0,12 0,22 0,21

Biooil and biodiesel 0,77 0,68

Electricity 0,53 0,48 0,58 0,61 0,57

Oil/natural gas 0,46 0,43 0,58 0,53 0,55

Total production cost 0,38 0,26 0,25 0,48 0,46

District Heating incl. Distribution 0,73 0,65 0,66 0,75 0,80

Gross contribution margin 0,35 0,39 0,41 0,27 0,34

s.12

District Heating ─ production profile

280

250

190

116

7345

30 37

67

130

228

336

0

50

100

150

200

250

300

350

GWh

DecNovOctSepAugJulJunMayAprMar

203

Feb

246

Jan

268

Normal*20112010

* Normal = projected 2010 production, given normal temperatures (10-year average) and current and planned customer tie-ins to the grid.

s.13

Nett

• Regulatory income ceiling after grid losses for 2011: NOK 2 013 million, down NOK 274 million from 2010.

• Continuing high delivery quality and positive trend as to service interruptions. Several power outages due to Statnettsubstation problems in Romerike and Østfold regions.

• Profit projection for 2011 on a par with 2010, based on income framework notification from regulatory body NVE, planned maintenance, and anticipated interest rate levels.

• New licensee manpower competence regulations introduced that will affect Hafslund Network’s business model.

• Regulatory decision to mandate the installation of AMS advanced metering systems is expected by July 2011.

1 063

880

0

50

100

150

200

250

300

350

0

200

400

600

800

1 000

1 200

quarter 12 months

Q1 11

260

Q4 10

246

Q3 10

282

Q2 10

275

Q1 10

274

Q4 09

314

Q3 09

243

Q2 09

247

Q1 09

231


NOK million Q1 11 Q1 10 2010 2009

Operating revenue 1 318 1 396 4 804 3 385

EBITDA 260 274 1 077 1 035



s.14

Power Sales

• Revenue figure reflects increased prices for wholesale (spot) power contracts traded via Nasdaq OMX and increased power sales volume.

• Customer-base growth: 220 000 more customers compared with Q1 2010.

• Satisfactory profit performance in a seasonally strong quarter.

• Power Sales had Q1 2011 after-tax profit of NOK 100 per customer.

• Working capital: NOK 1.8 billion, down NOK 0.3 billion in Q1 2011.

429

0

50

100

150

200

0

100

200

300

400

500

Q2 10

187

Q1 11

quarter 12 months

121

Q4 10

86

Q3 10

34

Q1 10

52

Q4 09

51

Q3 09

22

Q2 09

45

Q1 09

235

130


NOK million Q1 11 Q1 10 2010 2009

Operating revenues 3 043 2 621 8 021 4 787

EBITDA 121 52 360 248


Sold volume (GWh) 5 354 5 001 15 867 13 238

s.15

Heat and Bioenergy

Heat (energy recovery facilities):

• Energy production up 25 percent from Q1 2010.

• Formal take-over of Borregaard facility in Q1 2011.

• Operating profit: NOK 14 million (Q1 2010: NOK 0 million); the figure includes a NOK 9 million positive non-recurring item.

Bioenergy (wood pellets production):

• Process improvements for eliminating rock debris and better raw material milling.

• Pilot operation and production start-up expected in second half of 2011.

NOK million Q1 11 Q1 10 2010 2009

Operating revenue 46 29 115 49

EBITDA 10 5 (51) (11)

Operating profit 1 (3) (386) (27)

Energy production (GWh) 75 60 246 93

Sales price (NOK/kWh) 0,27 0,24

Used waste (thousand tonns) 36 27 114 57


s.16

Venture

• Sale of Fesil shares at NOK 374 million, yielded NOK 5 million gain.

• Capital employed, excluding REC: NOK 744 million.

• REC investment: 89.0 million shares or 8.93 percent of stock – market value: NOK 1.7 billion (at NOK 19.41 per share).

27%

7%

Renewable energi

10%

AMS (metering system)

Energy efficiency and other investments

Telecom 56%

Capital employed:

NOK million Q1 11 Q1 10 2010 2009

Operating revenue 113 130 549 779

EBITDA 19 (1 199) (914) (198)

Operating profit 9 (1 219) (1 104) (299)

s.17

Group profit and loss account

NOK million Q1 11 Q1 10 �� 2010

Operating revenue 5 206 4 895 311 15 829

Gain/loss financial items (7) (1 219) 1 212 (883)

Operating expenses (4 543) (4 196) (347) (13 023)

EBITDA 656 (520) 1 176 1 923

Depreciation (201) (213) 12 (1 270)

Operating profit 455 (733) 1 188 653

Interest expences (121) (104) (17) (498)

Market value change loan portfolio 25 (1) 27 27

Financial expenses (96) (105) 9 (471)

Pre-tax profit 359 (839) 1 198 182

Tax (130) (133) 2 (574)

Profit after tax 228 (972) 1 200 (392)

Earnings per share (EPS) in NOK 1.17 (4.98) 6.15 (2.01)

s.18

Group balance sheet

NOK million 31.03.2011 31.12.2010 ≅≅≅≅ 31.03.2010

Intangible assets 2 388 2 389 (1) 2 299

Fixed assets 18 580 18 557 22 18 880

Financial assets 2 674 2 831 (156) 3 481

Accounts receivables and inventory 4 311 5 625 (1 314) 3 996

Cash and cash equivalents 1 456 211 1 244 828

Assets 29 408 29 613 (204) 29 484

Equity (incl. Min. int.) 10 849 10 464 386 10 126

Allocation for liabilities 3 103 3 046 57 3 362

Long-therm debt 10 346 11 321 (975) 10 908

Other currently liabilities 1 903 2 338 (434) 2 413

Short-term debt 3 208 2 444 763 2 675

Equity and liabilities 29 408 29 613 (204) 29 484

Net interest-bearing debt 10 139 13 067 (2 929) 11 873

Equity ratio 37 % 35 % 2 % 34 %

We deliver tomorrow's energy and infrastructure solutions

Additional analytic information

s.21

Earnings per share (excluding REC)

1.71 8.12 1.17

2009 2010 2011

1.17

5.02

0.76

1.00

1.34

0.22

-0.38

0.86

1.01

By quarterNOK

s.22

Group cash flow statement

NOK million Q1 11 Q1 10 ¬¬¬¬ 2010

EBITDA 656 (520) 1 176 1 923

Paid intrests (190) (189) (1) (536)

Paid tax (98) 14 (112) (148)

Marketvalue changes and other liquidity adjustments 22 1 228 (1 206) 982

Change in working capital, etc. 923 (533) 1 456 (1 656)

Total cash flow from operations 1 313 - 1 313 565

Net operations and expansion investments (232) (258) 26 (1 647)

Sold operations - - - 5

Portfolio changes Venture, etc. 1 540 (6) 1 546 335

Cash flow from investments activities 1 308 (264) 1 572 (1 306)

Cash flow to down payments and interests 2 621 (264) 2 885 (741)

s.23

Capital employed and return on capital employed

2011**

9.4%

2010

11.5%

9.0 %*

2.5 %

2009

6.0%

38%19%

4%

Market

12%

Network

District Heating

Heat and Bioenergy

Venture2%

Hydropower

18%

REC

7%

Capital employed Return on capital employed (ROCE) excluding REC

* 12-month return on capital employed (ROCE) excluding sale of Fibernett and the BioWood Norway write-down.

* * Rolling 12-month return on capital employed (ROCE)

s.24

Capital structure development

0

2

4

6

8

10

12

14

0

10

20

30

40

NOK billion Equity ratio %

Q1 11

37.0

10.1

Q4 10

35.0

13.1

Q3 10

35.0

11.1

Q2 10

33.1

11.3

Q1 10

34.3

11.9

Q4 09

38.1

11.6

Q3 09

40.0

11.2

Q2 09

40.0

10.7

Q1 09

40.0

10.5

Equity ratio Net interest-bearing debt

s.25

Loans — portfolio data

700800

0

1 000

2 000

2021

319

202020192018

1 059

2017

860

20162015

1 909

2014

1 909

2013

1 815

2012

1 056

2011

1 693

Other loansBondsCertificate loans

50 0

400

800

300

MarFebJanDesNovOktSepAugJul

384

JunMaiApr

644

211

327

77

256

345

Other loansBondsCertificate loans

Debt maturity profileNOK million

Loans at maturity, next 12 monthsNOK million

Portfolio data

Q1 11 Q4 10

Bonds 47 % 40 % 7 %

Certificate loans 8 % 12 % -4 %

Other loans 45 % 48 % -3 %

Q1 11 Q4 10

Nominal value - market value

of loans-110 -135 25

Market value interest rate swaps

-11 -17 6

Average interest incl. derivatives

4,2 % 4,0 % 0,2 %

Proportion of loan portfolio with fixed interest

37 % 33 % 4 %

Loans at maturity next quarter (NOK million)

1 289 1 593 -304

Unused drawing facilities (NOK

million)4 677 3 692 985

s.26

Power and CO2 price development

EUR/MWh

EUR/tCO2

0

15

30

45

60

75

90

105

120

135

mar.09 jun.09 sep.09 mai.10des.09 aug.10 nov.10mar.10 jan.11 apr.11

EUR

CO2 2011 Nordic spotmarketFWD 2014 FWD 2012

Source: www.nasdaqomxcommodities.com (as of 01 April 2011)

s.27

Hydropower — Glomma waterway flow

• Q1 2011 production: 35% below normal for the reporting period. • Maximum capacity utilization: 930 m³/second.• Projected 2Q 2011 production: about 930 GWh (approx. 20 GWh below normal for the reporting period)

provided normal reservoir levels and precipitation.

0

500

1 000

1 500

2 000

decnov

m3/sek.

octsepaugjuljunmayaprmarfebjan

Max. capacity utilization20102011

s.28

Other Activities

NOK million Q1 11 Q1 10 2010 2009

Support (40) (31) (129) (152)

Power trading (18) (3) 29 (10)

Real estate 2 5 24 (0)

Billing and customer service 19 24 95 101

Financial derivatives, ass. comp. 9 17 102 191

Other 0 0 49 (53)

Operating profit other (28) 12 170 77

s.29

Shareholders as of 31 Mars 2011

Note: Shareholdings in thousand shares.

# ShareholderClass A shares

held

Class B shares

heldTotal Ownership

Share of

voting rights

Shareholding in thousands

1 City of Oslo 67 525 37 343 104 868 53.7 % 58.5 %

2 Fortum Forvaltning AS 37 853 28 706 66 559 34.1 % 32.8 %

3 Østfold Energi AS 5 201 4 5 205 2.7 % 4.5 %

4 Odin Norden 2 452 2 452 1.3 % 0.0 %

5 MP Pensjon PK 1 579 1 579 0.8 % 0.0 %

6 Odin Norge 1 222 1 222 0.6 % 0.0 %

7 Hafslund ASA 451 451 0.2 % 0.0 %

8 Folketrygdfonet 419 419 0.2 % 0.0 %

9 AS Herdebred 107 271 378 0.2 % 0.1 %

10 Bank of New York 328 - 328 0.2 % 0.3 %

Total, 10 largest shareholders 111 014 72 447 183 461 94.0 % 96.2 %

Other shareholders 4 414 7 311 11 725 6.0 % 3.8 %

Total 115 428 79 758 195 186 100 % 100 %

s.30

Key figures

Network YTD 2011 YTD 2010

Capital employed 9 250 9 275

Annual Income ceiling 2 567 2 891

NVE-capital (regulatory) 6 130 6 178

Power Sales YTD 2011 YTD 2010


- of this working capital 1 779 2 010

Total volume (GWh) 5 453 5 001

Group YTD 2011 YTD 2010

Capital matters

Total assets 29 408 29 484

Captial employed 24 488 25 257

Equity 10 849 10 126

Market capitalization 14 581 13 428

Equity ratio 37 % 34 %

Net interest-bearing debt 10 139 11 873

Profitability excl. REC

Profit after tax 228 (972)

Earnings per share (EPS) 1.17 (4.98)

Cash flow per share 6.73 (0.00)

Venture YTD 2011 YTD 2010

Capital employed exl REC 744 1 557Market value REC 1 728 2 132

Power Generation YTD 2011 YTD 2010



Production volume (GWh) 371 520

District Heating YTD 2011 YTD 2010



Gross margin (NOK/kWh) 0,34 0,35

Sales volume (GWh) 717 720

Definitions

Items Definition

Group

Capital employed Equity + Net interest-bearing debt + Net tax positions

Equity ratio (in%) (Equity incl. Minority interests / Total assets) X 100

Earnings per share Profit after tax / Average no. of shares outstanding

Cash flow per share Net cash from operations / Average no. of shares

Return on equity Result after tax / Average equity (incl. Minority interests)

Return on capital employed Operating profit / (Average equity + Net interest-bearing debt + Net tax positions)

Power generation

Mean production Average power generation over the past 10 years.

Investor information

• Additional information is available from Hafslund’s website:– www.hafslund.no

– You can subscribe to Hafslund press releases

• Group SVP & CFO, Finn Bjørn Ruyter

– [email protected]

– tel: +47 911 38 199

• SVP Communications and Corporate Social Responsibility, Karen Onsager


– tel: +47 920 87 007

• Financial Director and Investor Relations contact, Morten J. Hansen


– tel: +47 908 28 577

www.hafslund.no

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First-quarter 2011 presentation to analysts...First-quarter 2011 presentation to analysts Hafslund ASA 4 May 2011 Christian Berg, CEO s.2 Highlights first quarter 2011 • EBITDA:

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