EDP (OTCPK:EDPF.Y) 2025 Capital Markets Day Transcript

EDP Capital Markets Day 2025 Summary Company Overview - Company: EDP (EDP Renováveis) - Event: 2025 Capital Markets Day - Date: November 06, 2025 Key Industry Insights - Renewable Energy Demand: Significant growth in demand for renewable energy, particularly driven by data centers. A specific data center in Portugal is projected to require 1.2 gigawatts, representing 20% of Portugal's energy demand [4][5] - Electrification Trends: Demand in Portugal and Spain has grown by over 3% after years of stagnation, indicating a shift towards electrification and increased energy consumption [5][6] - Investment in Infrastructure: Approximately 25% of transformers in Portugal are over 40 years old, necessitating a wave of investment in energy networks that will extend beyond 2030 to 2040 [7][19] Financial Commitments and Projections - Investment Plans: EDP plans to invest EUR 12 billion, primarily in networks in Iberia and US renewables, with a focus on core markets [10] - Operational Efficiency: EDP maintains a strong operational efficiency with 26% OpEx over gross profit, aiming for a net debt reduction of EUR 1 billion [10][11] - EBITDA Growth: Projected increase in EBITDA and earnings, with a commitment to maintaining a stable dividend policy [11][54] Regulatory and Market Context - Regulatory Clarity: Improved visibility on regulatory frameworks in the US, Portugal, and Spain, including capacity payments expected to be implemented in 2026 for Spain and 2027 for Portugal [9][10] - Tax Incentives: Networks in Portugal are now exempt from extraordinary taxes, providing an uplift in returns of about 0.85% [12] Renewable Energy Strategy - Focus on Renewables: EDP Renováveis is expected to see significant growth, with a target of 20 gigawatts of generation assets, particularly in North America [29][30] - Long-term Contracts: Approximately 70% of EDP's energy will be long-term contracted, with expectations of higher prices for new contracts compared to previous years [33][40] Client Solutions and Market Positioning - Client Engagement: EDP has established contracts with major tech companies, securing over 3 gigawatts of power through PPAs [34] - FlexGen Strategy: EDP is focusing on flexible generation to adapt to the increasing demand for ancillary services, with expected growth in flexible services between 25% and 28% [27][28] Global Market Focus - US Market: EDP is well-positioned in the US, particularly in MISO and PJM regions, where demand from data centers is growing [38] - European Market: EDP continues to focus on key markets in Europe, including Italy, France, and Spain, while also exploring opportunities in APAC [44][46] Conclusion - Strategic Vision: EDP is committed to a sustainable growth strategy, focusing on renewable energy, operational efficiency, and strong client relationships, with a clear path to achieving its financial and operational goals by 2028 [48][49]