Enel Spa · MIL:ENEL
Enel Spa — Investor Presentation (March 2020)
143 slides from Enel Spa's investor presentation, March 2020
Slide 1: Investor Presentation March 2020
Investor Presentation March 2020
Slide 2: Agenda
Agenda Investor Presentation – Strategic Plan 2020-22 Our positioning Sustainability = Value. Our delivery over time Our vision Our vision in numbers Financial management & Sustainable finance 2020-2022 Strategic plan De-risking long term targets Earnings & targets FY Closing 2019 consolidated remar
Slide 3: Investor Presentation Strategic Plan 2020-22
Investor Presentation Strategic Plan 2020-22
Slide 4: Our positioning
Our positioning
Slide 5: A sustainable and fully integrated business model
Our positioning A sustainable and fully integrated business model delivering value for shareholders EBITDA by business Total shareholder return 2015-20191 160% 140% 9% 120% 26% 100% 18% 80% 2019 60% 136% 17.9 €bn 40% 1% 20% 46% 57% 0% Enel FTSE MIB Euro Stoxx 46% Utilities SRI2 10.8% 1. From Jan 1st
Slide 6: Enel's leadership in the new energy world
Enel’s leadership in the new energy world Our positioning # End users 1st network operator1 73 mn Renewable capacity World’s largest player2 in 46 GW renewables # Customers Largest retail customer base 70 mn worldwide3 1. By number of end users. Publicly owned operators not included 5 2. By installe
Slide 7: Sustainability = Value: Our delivery over time
Sustainability = Value Our delivery over time
Slide 8: A sustainable business model that has delivered growth
Sustainability=Value A sustainable business model that has delivered growth and improved visibility EBITDA dynamics (€bn) CAPEX and financial KPIs evolution Traditional model Sustainable model CAGR 2012-15: -1.7% CAGR 2015-19: +4.5% +27% ~10 €bn 12.0 0 ~8 €bn 19 ✔ 10.0 0 18 8.00 23% Other 17 ✔ 35% 1
Slide 9: Capital allocation focused on renewables
Sustainability=Value We have focused our capital allocation on renewables… Generation capex: 2015 vs 2019 Renewable and Thermal Production (TWh) -17% 300 17% 244 250 34% ~36% 203 89 ~49% 200 4.6 €bn 5.1 €bn 99 150 66% 100 83% 1551 1031 50 0 2015 2019 2015 2019 ~70% % Development ~80% ~40% % RES Capa
Slide 10: Becoming the world leader in renewables
Sustainability=Value …to become the world leader in renewables 2015 2019 Installed capacity1 Installed capacity 37 GW 46 GW Built capacity Built capacity 1 GW 3 GW EBITDA/CAPEX EBITDA/CAPEX 11% 11% >1.2k plants 31 Countries 9 1. Including managed capacity by 3.7 GW
Slide 11: Grid expansion and digitalisation
Sustainability=Value Grid expansion and digitalisation have driven efficiencies and created value 2015 2019 End Users End users Bogotá Ceará 61 mn 73 mn Goiás Smart meters Smart meters Lima Rio de Janeiro Sao Paulo 38.5 mn 44.7 mn Smart meters 2.0 Smart meters 2.0 Santiago Buenos Aires 0 mn 13.1 mn
Slide 12: Focus on customers and platforms
Sustainability=Value We focused on customers and platforms to seize future opportunities Customers – key metrics New deployments Energy sold (TWh)1 2015 2019 +19% Charging 180 points3 0k 80 k 160 159 140 120 100 134 80 60 Demand 40 Response 0 GW 6.3 GW 20 - 2015 2019 Power cust. (mn)1 ~12 ~17 Batter
Slide 13: Innovation and digitalisation process
Sustainability=Value A pervasive innovation and digitalisation process drives change in our organization Platformisation process 2017-19 Total investment1 < 2015 2019 > 2020 Pre-Digital Full migration Platform operating ~4.5 strategy to cloud model €bn 2017-19 Cumulated benefit2 Fragmented IT 100% a
Slide 14: Delivery on strategic pillars
Sustainability=Value Delivery on strategic pillars ✔ Industrial Growth ✔ Operational Efficiency ✔ Active Portfolio Management Impact on Group Net Income EBITDA (€bn) Cost Savings (€bn) (€bn) 18 2 0 17 1 16 17.9 0 15 14 17.0 1 1 1.4 0 0.3 13 12 1 1.1 0 0.2 1 0 11 0 10 0 0 9 8 - - 2019 2019 Plan Actua
Slide 15: Value creation and shareholders remuneration
Sustainability=Value Value creation and shareholders remuneration Value creation spread1 (bps) Shareholder return – DPS (€/sh) +250 +105% 400 0.35 350 370 0.30 ✔ 0.328 ✔ 300 0.25 0.28 250 0.20 ✔ ~0.24 ✔ 200 0.15 0.18 150 0.16 0.10 MIN 100 120 0.21 0.28 0.32 DPS 0.05 50 - - 2015 2019 2015 2016 2017 2
Slide 16: Our vision
Our vision
Slide 17: Strategy addresses evolution of sector trends
Our vision Our strategy addresses dynamically the evolution of sector trends Decarbonisation Enabling Ecosystems Infrastructure & Platforms Electrification 16
Slide 18: Global outlook: decarbonisation through renewables
Our vision Global outlook: decarbonisation through new renewable capacity and services Share of renewables on global capacity1 Flexibility and storage2 Demand Response 250 (GW) 200 200 3.5x 150 31% 100 145 35% 50 2018 2040 - 57 Total capacity Total capacity 2020 2030 2040 7.2 TW 15.5 TW 65% 69% 1,40
Slide 19: Global Power Generation: a new global business line
decarbonisation Global Power Generation: a new global business Our vision line to accelerate decarbonisation 20191 Consolidated Capacity1 (GW) # sites 85 81 87 60.0 55.0 Accelerate and facilitate the decarbonisation path ~1,300 50.0 45.0 48 54 40.0 35.0 42 39 30.0 37 25.0 33 Extract synergies and ma
Slide 20: Phasing out of coal production
decarbonisation Our vision Phasing out of coal production over the plan period and beyond… 120 .0 100 .0 80. 0 Coal production 60. 0 (TWh) 40. 0 92.0 64.4 20. 0 37.6 74% 0-2 16.9 10.4 0.0 2012 2018 2019 2022 2024 2030 Coal on total 19 p.p. production 31.1% 25.7% 16.4% 6.8% 3.9% <1% (%) Coal capacity
Slide 21: Accelerated renewables deployment
decarbonisation …with an accelerated renewables deployment Our vision 2020-22 GROWTH CLUSTERS GW Target of capacity to be added (GW) Fleet decarbonisation in Italy, Spain and Chile 5.4 1.8x Development through PPA mainly in Brazil and US 5.1 16 14 12 Other developments in countries of 1.1 10 presenc
Slide 22: Further acceleration of renewable additions
decarbonisation Our vision Further acceleration of renewable additions fueled by organic development Additional capacity evolution: 2019-21 vs 2020-22 plan Renewable capacity evolution (GW) +22% +31% Total capacity 45.9 45.7 59.8 (2.2) 5.6 3.7 3.4 14.1 54.2 2.6 (1.8) 1.7 42.3 42.2 +28% 11.6 65% 14.1
Slide 23: Largest and most diversified renewables pipeline
decarbonisation Our vision The largest and most diversified pipeline of the industry is fueling future growth ambitions Renewables pipeline (GW) Breakdown by technology As of October 2019 As of December 2019 100 .0 31.4 GW 90. 0 1% 80. 0 46% 70. 0 60. 0 58.6 35.9 GW 50. 0 40. 0 90.0 2.1 53% 3.6 6.1
Slide 24: High level visibility on deployment goals
decarbonisation Our vision High level visibility on deployment goals 2020-22 Renewables growth1: addressed share vs pipeline2 (GW) 2020 ~100% 35.9 GW 30. 0 Coverage by year 2021 63% 2020-22 pipeline 25. 0 2022 35% 16.2 ~ 3.7x Beyond 2022 Residual target 20. 0 15. 0 62% addressed 14.1 19.7 Pipeline 1
Slide 25: Path towards full decarbonisation by 2050
decarbonisation Our vision Strategy strongly supports our path towards full decarbonisation by 2050 Scope 1 & Scope 3 CO2 emissions evolution 600 .000 500 .000 -70% 400 .000 465 FULL decarbonisation 411 BY 2050 Scope 11 300 .000 (g CO2/kWh) 296 200 .000 254 100 .000 125 0.0 00 2007 2017 2019 2020 20
Slide 26: Global outlook: electricity is winning the energy battle
Our vision Global outlook: electricity is winning the energy battle Share of electricity on total final energy consumption1 End use avg. investments needed for electrification (‘000 TWh) (USD Tn/year) +11.5 ~2x 2 1.2 0 23 34.6 2 1.0 0 + 1 bn electric cars 2 1 ~2.5x 24% 43% 0.8 0 1 + 2.8 bn air cond.
Slide 27: Retail ahead of electrification trends
Electrification Our vision Retail will position ahead of electrification trends, paving the way for further growth Power customers Power volumes sold Unitary consumption (mn) (TWh) (MWh/client) 40. 0 12 35. 0 200 .0 10 30. 0 +67% +23% 8 Developed 25. 0 20. 0 150 .0 6 -26% markets 15. 0 28.6 100 .0 1
Slide 28: New services enable decarbonisation and electrification
Ecosystems & Platforms Our vision New services enable decarbonisation and electrification of consumption Decarbonisation through new services Enabling electrification Revenues from Demand Response (GW) Storage (MW) Charging points1 (k) Electrification services (€mn) 1.6x 4.0x 8.9x 2.2x 12 500 800 60
Slide 29: Networks as backbone of a sustainable electric system
Our vision Global outlook: networks as the backbone of a sustainable electric system Energy system evolution Average yearly investments in networks (USD bn)1 800 700 +85% 600 500 400 300 200 500 Aggregator 100 270 TSO 0 2010-2018 2019-2040 DSO DSO TSO Average investments in smart meters and grids (U
Slide 30: Development of infrastructure and networks
Enabling Infrastructure Our vision Development of Infrastructure and Networks centered on digitalisation, quality and efficiency Digitalisation Quality of service Efficiency Smart meters 2.0 (mn) SAIFI1 (n) Opex/End user (€) >2x -9% -16% 35. 00 3.25 44.0 0 30. 00 3.20 28.8 42.0 0 25. 00 3.15 3.10 40
Slide 31: Towards a platform company
Our vision Towards a platform company Distribution Retail Enel X Activities Products Global Front End Asset Operator Customer Management Customers Prosumers Asset Owner Digital layer Unique database & Network Digital Twin Back End Assets Buy Standardized Suppliers & (e.g. charging Physical Cities as
Slide 32: A fully sustainable capex plan
Our vision A fully sustainable capex plan Total gross capex by business and by nature 2020-22 Asset development by business 2020-22 4% 41% 4% 6.5 7% 66% 28.7 €bn 28.7 €bn 27% 17.2 €bn 17.2 5.0 3% 44% 4% Networks Enel X Asset development Retail EGP Customers Networks Enel X Conventional generation As
Slide 33: Sustainable, profitable, digitalised and customer centric
Our vision Sustainable, profitable, digitalised and customer centric 2015 2019 2022 Renewables focus Owned RES capacity/Total capacity1 41% 50% 60% CO2 Footprint Specific CO2 emissions g/kWh 409 296 220 Coal power plants # 19 12 7 Networks end users mn 61 73 75 Smart meters 2.0 mn - 13.1 28.8 Retail
Slide 34: Purpose driven strategy promotes sustainable value creation
Our vision Purpose driven strategy promotes sustainable value creation for shareholders Value creation spread1 (bps) Shareholder return – DPS (€/sh) +28% CAGR 0.4 5 2019-22 450 0.4 0.42 + 8.6% 440 0.3 5 0.40 0.37 400 0.3 0.328 370 350 0.2 5 0.2 300 Min DPS 0.1 5 0.32 0.35 0.37 0.40 +7.7% 0.1 250 0.0
Slide 35: Strategic Plan 2020-2022
2020-2022 Strategic Plan
Slide 36: Strategic plan at a glance
2020-22 Strategic Plan Strategic plan at a glance Cumulated organic capex1 vs previous plan (€bn) EBITDA (€bn) +11% 24 +12% 22 29 27 20 25 18 23 28.7 16 21 25.9 20.1 19 14 17.9 12 17 15 10 2019-21 2020-22 2019 2022 Net Income (€bn) Net Debt (€bn) 7 +27% 51 +5% 6.5 49 6 47 5.5 45 5 4.5 43 4 6.1 41 47
Slide 37: Focus on profitability, value creation and balance sheet
2020-22 Strategic Plan Focus on profitability, value creation and balance sheet Profitability Return on invested capital Credit metrics +300 bps +200 bps +400 bps 0.3 5 14. 0% 35. 0% 12. 0% 30. 0% 0.3 0 30% 10. 0% 25. 0% 29% 9.6% 10.2% 25% 26% 27% 0.2 5 8.0 % 20. 0% 6.0 % 8.2% 15. 0% 0.2 0 19% 4.0 %
Slide 38: Our vision in numbers
2020-2022 Our vision in numbers
Slide 39: Organic capex up by 11%
Our vision in numbers Organic capex up by 11% to pursue strategic vision Organic capex by GBL1: 2019-21 vs 2020-22 (€bn) €bn +2.8 Decarbonisation 14.4 28.7 30. 0 25.9 Electrification 2.3 1.2 25. 0 2.4 20. 0 11.8 11.1 15. 0 Enabling Infrastructure 11.8 10. 0 10.0 12.5 1.1 5.0 Ecosystems & Platforms 0
Slide 40: Sound EBITDA growth
Sound EBITDA growth reflecting strategic priorities… Our vision in numbers Cumulated EBITDA (€bn) EBITDA evolution 2019-22 (€bn) +3% +13% 0.4 (0.5) 0.7 20.00 0.4 20.1 FY 2019 1.3 0.1 59 57 17.9 55 53 17.8 58.0 56.1 51 49 47 45 15.00 1 2019-21 2020-22 EBITDA EGP Conventional Retail Networks Enel X Pe
Slide 41: Supported by ongoing delivery and efficiencies
…supported by ongoing delivery and focus on Our vision in numbers efficiencies Opex evolution (€bn) Efficiencies by business -9% FY 2019 0.5 (0.1) 5% 8.5 (1.2) 26% 8.5 7.7 38% 1.2 €bn 31% 2019E CPI & Growth & Efficiency 2022 Forex Perimeter 32% Net operating expenses on gross margin 28% 40
Slide 42: Profitability of generation enhanced by decarbonisation
decarbonisation Our vision in numbers Profitability of generation enhanced by decarbonisation Global Power Generation EBITDA (€bn) Main KPIs1 +23% FY 2019 10.0 0 9.00 2019 2022 2019 2022 6.2 7.6 8.00 7.00 6.2 0.5 Total Production Gross Margin/MWh Nuke (TWh) 229 249 (k€/MWh) 41 44 6.00 0.5 5.00 Total
Slide 43: Conventional generation focuses on flexibility
decarbonisation Our vision in numbers Conventional generation focuses on flexibility and efficiencies Gross capex 2019-21 vs 2020-22 (€bn) 2019-22 EBITDA evolution (€bn) -24% 100% earmarked +6% 3.0 for development beyond 2022 2.5 FY 2019 2.5 0.6 1.9 1.6 0.2 2.0 (0.1) (0.4) 0.3 0.7 0.1 1.7 1.6 1.5 1.
Slide 44: Renewable capex tailored to maximise economic value
decarbonisation Our vision in numbers Renewable capex tailored to maximise economic value of decarbonisation Capex EBITDA/Capex IRR-WACC spread GROWTH CLUSTERS GW (€bn) (%) (bps) Fleet decarbonisation in Italy, Spain and 5.4 5.6 12-13% >200 Chile Development through PPA mainly in Brazil 5.1 4.7 12-1
Slide 45: Renewable capex to maximise economic value
decarbonisation Our vision in numbers Renewable capex to maximise economic value of decarbonisation Renewables asset development capex 2020-22 (€bn) 2019-22 EBITDA evolution (€bn) +28% 6% FY 2019 1.3 - 39% 4.6 5.9 11.5 €bn 4.6 55% Asset development capex 11.5 2019E Asset Asset 2022 development manag
Slide 46: Higher share of organic capex increases EBITDA
decarbonisation Our vision in numbers Higher share of organic capex increases EBITDA evolution Asset development capex evolution (€bn) Cumulated EBITDA growth (€bn) +8% +33% 2.5 11.5 10.6 (1.6) 0.7 2.4 1.6 BSO 1.8 (0.1) 9.0 +28% Old plan BSO Organic New plan Old plan BSO fee Organic New plan 1 2019-
Slide 47: Retail EBITDA growth
Electrification Our vision in numbers Retail EBITDA growth due to platformisation and related activities Retail gross capex 2020-22 (€bn) 2019-22 EBITDA evolution (€bn) +13% +13% FY 2019 41% FY 2019 3.6 3.3 3.6 3.3 3.2 3.2 0.1 0.4 0.3 1.2 €bn 0.6 0.8 82% 80% Free market 68% 2.2 2.3 59% 20% Regulated
Slide 48: Networks capex focused on quality and efficiencies
Enabling Infrastructure Our vision in numbers Networks capex focused on quality and efficiencies Networks gross capex 2020-22 (€bn) Operating performance RAB (€bn) 2019 2022 5% 13% 27% 50.0 0 ~ 43 ~45 Opex/end user 42.5 35.61 (€/cust) 11.8 €bn 40.0 0 ~12 ~14 5% 30.0 0 SAIFI2 (n) 3.2 2.9 50% 20.0 0 ~
Slide 49: Infrastructure and networks improve cash generation
Enabling Infrastructure Our vision in numbers Infrastructure & networks set to improve cash generation 2019-22 EBITDA evolution (€bn) FFO-CAPEX2 (€bn) +9% +5% 8 FY 2019 0.4 (0.1) 8.2 0.3 7.5 - 0.1 8.9 7 8.2 6.5 7.7 7.3 6 5.5 2019E Argentina Connections Tariffs, Efficiency FX1 2022 2019-21 2020-22 Vo
Slide 50: Enel X captures new opportunities
Ecosystems & Platforms Our vision in numbers Enel X will capture new opportunities with customers Gross Capex 2020-22 2019-22 EBITDA evolution (€bn) 5x 0.3 0.5 FY 2019 42% 58% 1.1 €bn 0.2 0.1 0.1 Enabling businesses 2019E Enabling Scale-up 2022 businesses businesses Scale-up business 49
Slide 51: ~12% of capex to generate ~800 €mn EBITDA post 2022
~12% of 2020-2022 capex to generate ~ 800€mn Our vision in numbers EBITDA post 2022 2020-2022 Investments (€bn) Yearly EBITDA impact post 2022 (€mn) 30. 0 3.5 25. 0 ~2.4 Decarbonisation ~650 20. 0 28.7 ~1.1 ~150 15. 0 Enabling infrastructure 25.2 10. 0 5.0 Total yearly EBITDA 0.0 ~800 Gross Capex Ca
Slide 52: Financial management & Sustainable finance
2020-2022 Financial management & Sustainable finance
Slide 53: Debt evolution reflecting capital allocation
Financial management Debt evolution reflecting capital allocation dynamics Net debt evolution (€bn) Source of funds allocation 2020-22 (€bn) +1.4 50. 0 45. 0 1.4 (28.7) 40. 0 FY 2019 49.0 35. 0 42.1 47.0 45.2 30. 0 45.0 25. 0 43.0 20. 0 (14.7) 41.0 ~46.8 ~47.3 ~47.3 ~45.9 15. 0 39.0 10. 0 37.0 5.0 3
Slide 54: Improving credit metrics
Financial management Improving credit metrics Credit metrics Long term credit rating Rating Outlook 29% 4.5 0 35% 26% 26% 27% 4.0 0 25% 30% 3.5 0 25% Standard & Poors BBB+ Stable 3.0 0 20% 2.5 0 15% 2.5x 2.5x 2.5x 2.4x Moody’s Baa2 Positive 2.3x 2.0 0 10% 1.5 0 5% 1.0 0 0% Fitch A- Stable 0.5 0 -5%
Slide 55: Continued reduction in cost of debt
Financial management Continued reduction in cost of debt Financial strategy for 2020-22 (€bn) Cost of debt evolution (2019-22) Expected Current total 4.6% Amount 4.7% cost1 cost 4.5% 4.5% 4.4% 4.4% Bond refinancing 5.5 1.7% 3.7% (40) 4.3% bps (40) bps (50) (70) Bank loans and other bps 4.1 0.9% 2.8%
Slide 56: Our journey to Sustainable Finance
Our journey to Sustainable Finance… Financial management Path to SDG bonds Our SDG bonds Cost of issuance discount Size Maturity KPI USD 55%3 Issue 1.5 $bn 2024 20%2 Res. Capacity 10%1 SDG Bonds 55%3 Green 2.0 €bn 2024/27 - Res. Capacity Bonds EUR Plain Vanilla Focus on Issue 125 Bonds sustainable 0
Slide 57: Sustainable finance to support cost of debt reduction
…will support cost of debt reduction throughout the Financial management period Sustainable Finance evolution (2019-2030) Expected impact on cost of debt 120 .0 100 .0 -15 bps -5 bps -15 bps 80. 0 22% 23% 60. 0 43% 2019 2022 2030 40. 0 57% 77% 78% 20. 0 0.0 Brown Kd SDG Kd 1 notch 2 notch Sustainabi
Slide 58: De-risking long term targets
De-risking long term targets
Slide 59: 2020-22 EBITDA centered on sustainable businesses
De-risking our long term targets 2020-22 EBITDA centered on sustainable businesses and benefitting from improved risk profile Cumulated EBITDA evolution (€bn) Cumulated EBITDA 2020-22 60. 00 0.8 2.2 58 (0.9) (0.5) 0.4 80% 55. 00 56 58 €bn 20% 50. 00 EBITDA Argentina Coal Efficiencies Contracted Free
Slide 60: Renewables' contribution to growth secured
Operating deployment: renewables’ contribution to De-risking our long term targets growth secured across the board Development secured 2020-22 Production secured Variance in renewable production 120 .0 2020-2022 Additional Capacity 14.1 68% 2020-22 (GW) 100 .0 Gap to target (GW) 5.3 2020-22 80. 0 ~4
Slide 61: Over 90% of generation energy margin covered
De-risking our long term targets Operating deployment: over 90% of generation energy margin covered by sales to customer base Integrated margin1 – energy margin vs retail margin Hedging position on price driven production Ren & Nuke 160 % Production1 60.0 hedged price vs Pool price +21% +18% (%) 201
Slide 62: Currency exposure: low bottom line impact
De-risking our long term targets Currency exposure: a low bottom line impact from volatile currencies 2020-22 EBITDA by currency Cumulated impact 2020-221 (€bn) EBITDA Group NI 11% BRL (0.69) 0.84 (0.21) 0.24 ARS (0.12) 0.15 (0.03) 0.06 58 €bn 28% 61% CLP (0.06) 0.09 (0.00) 0.00 Other (0.39) 0.48 (0
Slide 63: Excellent credit quality and well distributed maturities
De-risking our long term targets Excellent credit quality and well distributed maturities Net Debt/EBITDA of top European Utilities1 Liquidity and debt maturity by year (€bn) 25 20 5 4.5 4.4x 15 4 3.3x 24.7 12.0% 5.9% 10.1% 2.5x 3.5 10 3 2.5 2.3x 17.2 3 4.0 2 5 1.5 1 6.2 0.5 3.4 3.6 0 0 2019 2022 Av
Slide 64: Earnings & Targets
2020-2022 Earnings & Targets
Slide 65: Sustainable strategy delivers earnings growth of 27%
Earnings and targets Sustainable strategy delivers earnings growth of 27% Group net ordinary income (€bn) Steady operational growth driving net income +27% performance 7.0 6.1 6.5 5.8 Sustainable finance and managerial actions 6.0 5.4 5.6 5.5 granting adequate and cheap funding 4.8 5.0 4.5 4.0 3.5 A
Slide 66: Visible value creation for our shareholders
Earnings and targets Visible value creation for our shareholders 2019-22 Earnings growth 2019 2020 2021 2022 CAGR Ordinary EBITDA (€bn) 17.9 18.6 19.4 20.1 +3.9% Net ordinary income (€bn) 4.8 5.4 5.8 6.1 +8.3% 2019-22 Value creation CAGR Pay-out ratio 70% 70% 70% 70% - Implicit DPS (€/sh) 0.328 0.37
Slide 67: Closing remarks
Closing remarks
Slide 68: Closing remarks
Closing remarks Accelerating decarbonisation through renewables growth and coal phase out Future proofing operations ahead of electrification of consumption Solid balance sheet with ample liquidity Sustainable value creation for all stakeholders Significant growth opportunities beyond the plan 67
Slide 69: FY 2019 Consolidated results
FY 2019 Consolidated results
Slide 70: Full Year 2019 Consolidated results
Full Year 2019 Consolidated results March,19 2020
Slide 71: COVID-19: Business continuity and risks assessment
COVID-19 Business continuity management and risks assessment Francesco Starace CEO
Slide 72: COVID-19: business continuity, our people
COVID-19 Business continuity management: our people Remote working trends % of employees on remote working Remote working: c.35,300 total number of people +13x 1 0 0 52% 14,700 6,300 RoW: 14,300 0 0 4% - Pre COVID19 Post COVID19 Crisis management: Global Task Force set up in February 2020, outbreak
Slide 73: COVID-19: business continuity, our assets
COVID-19 Business continuity management: our assets 100% remote operational management of Complete remote management of all the renewable assets, 100% remote monitoring of activities, including call centers conventional generation Customer interactions through digital channels Optimization o
Slide 74: COVID-19: risk assessment
COVID-19 Risk assessment: strategic deployment not affected, resilient business set up Macroeconomic Risks Business Risks Financial Risks GDP & Commodities: Prices: 2020 production sold Strong coverage and forward: Latin America leverage ratios set to 80% contracted and 100%, Europe >80% improve o
Slide 75: Full Year 2019 Consolidated results
Full Year 2019 Consolidated results Francesco Starace CEO
Slide 76: Key highlights of the year
Key highlights of the year Strong financial Push on Grid Free market Rating results decarbonisation digitalisation growth improvements +11% +3 GW Fitch A- EBITDA Renewables +5.9 mn +1.2 mn Moody’s Baa2/+ Smart +17% - 4.1 GW Customers MSCI AAA meters 2.0 CDP A Net Income Coal 75
Slide 77: Delivering on a fully sustainable capex plan
Delivering on a fully sustainable capex plan Capex increased by 17% yoy Capex by business and by nature Capex asset development by business 2% 5%3%2% 18% 2% 8% 28% 39% FY 2019 FY 2019 FY 2019 10 €bn 23% 10 €bn 59% 5.9 €bn 43% 68% Networks Enel X Asset development Networks Enel X Retail EGP Customers
Slide 78: Decarbonisation: Global Power Generation
Decarbonisation Global Power Generation A single business line to enhance opportunities of the energy transition Installed capacity and production evolution in 20191 (GW) Emission free share of production2 110 .0 51% emission free 57% emission free 235 86.5 84.8 213 90. 0 70. 0 127 43.1 - 4.2 GW 38.
Slide 79: Renewables capacity evolution
Decarbonisation Renewables capacity evolution Continued delivery on renewable growth with more than 3,000 MW built Renewable capacity evolution 2019 (GW) Total capacity 43.4 3.0 0.7 (1.3) 45.9 Capacity delivery: set new record with more than 3,000 MW built 0.1 - Managed (0.7) c. 2,400 MW added only
Slide 80: High level visibility on deployment goals
Decarbonisation High level visibility on deployment goals 2020-22 Renewables growth1: addressed share vs pipeline2 (GW) 2020 ~100% 35.9 GW 35.9 GW Pipeline 30. 0 Coverage ~~6.8x 7.4x by year 2021 63% Residual target 25. 0 2022 35% 16.2 Beyond 2022 20. 0 15. 0 62% addressed 14.1 19.7 2020-22 pipeline
Slide 81: Focus on coal phase out
Decarbonisation Focus on coal phase out Acceleration of decarbonisation with coal capacity down by 4.1 GW Coal production (TWh) Coal capacity (GW) Coal production on total1 Coal capacity on total1 Coal production almost halved in 2019 -42% -26% 4.1 GW of coal capacity (4 power 16.0 0 60. 00 64.4 15.
Slide 82: Retail: shift towards free markets
Electrification Retail Progressive shift towards more profitable free markets Free markets Total power customers (mn) (mn) +1.2 Free market customers up by 1.2 mn driven by Italy 16.0 17.2 65.4 64.1 60. 00 16.0 17.2 End of Italian regulated tariff: 2.2 1.7 50. 00 2021 for SME, 2022 for retail 40. 00
Slide 83: Networks: grid digitalisation
Enabling Infrastructure Networks Continued effort on grid digitalisation with meters 2.0 almost doubled Electricity distributed (TWh) Smart meter 2.0 (mn)1 +5.9 mn smart meters 2.0 installed +4% +82% 14.0 0 500 .00 504 12.0 0 13.1 450 .00 484 10.0 0 ~30% smart meters 2.0 on total 8.00 400 .00 6.00 7
Slide 84: Enel X: ramp up of value added services
Ecosystems and Platforms Enel X Development ramp up of our value added services New energy services Infrastructure deployment Demand Response (GW) Storage (MW) +2% +57% FY 2018 FY 2019 +63% Charging points1 (k) 49 80 6 120 6 6.3 110 100 6 6.2 6 80 Public lighting -4% 6 (mn points) 2.5 2.4 70 60 6 40
Slide 85: Shareholder remuneration
Shareholder remuneration EPS (€/sh) DPS (€/sh) +33% +32% +18% +17% 0.40 0.35 0.53 0.30 0.37 0.47 0.25 0.328 0.40 0.20 0.28 0.15 0.10 0.05 0.00 2018 2019 2020 2018 2019 2020 Min. guaranteed DPS 0.28 0.32 0.35 84
Slide 86: Full Year 2019 Financial results
Full Year 2019 Financial results Alberto De Paoli CFO
Slide 87: Financial highlights
Financial highlights (€mn) EBITDA1 Net Income1 FFO Net Debt ✔ ✔ ✔ ✔ 17,905 4,767 11,630 45,175 +11% +17% +5% +10% FY 2018 16,158 4,060 11,075 41,0892 1. Ordinary figures 86 2. As of December 31st 2018. IFRS 16 impact from January 1st, 2019
Slide 88: Ordinary EBITDA evolution
Ordinary EBITDA evolution1 Performance supported by our sustainable and integrated business model EBITDA evolution (€bn) Ordinary EBITDA by GBL +11% 1% 20.00 18% 0.0 0.1 0.8 46% 0.2 17.9 €bn 0.1 0.5 17.9 9% (11% yoy) 15.00 16.2 26% 0.6 0.9 10.00 EBITDA 2018E EGP Conventional Retail Networks Enel X S
Slide 89: Operational efficiency
Operational efficiency Efficiencies reached 300€mn in 2019 OPEX evolution (€mn) Efficiencies by business 8,9 00.0 -1% 186 8,7 00.0 22% 140 8,5 00.0 8,590 (194) 8,582 97 8,506 FY 2019 47% 0.3 €bn 8,3 00.0 (313) 8,1 00.0 31% 7,9 00.0 7,7 00.0 FY 2018 Perimeter IFRS 16 FY 2018 Efficiency CPI & FX Devel
Slide 90: Enel Green Power
Decarbonisation Enel Green Power Robust sustained growth EBITDA evolution (€mn) EBITDA FY 2019 by geography +2% 4,80 0.00 2% 4,70 0.00 Higher prices more than offset 4,60 0.00 lower volumes 27% 4,634 48% FY 2019 4,543 4,50 0.00 4,40 0.00 Impact from large Q4 investments 4.6 €bn 4,30 0.00 not yet vis
Slide 91: Conventional generation and Global trading
Decarbonisation Conventional generation and Global trading Performance driven by higher nuclear prices and continued efficiencies EBITDA evolution (€mn) EBITDA FY 2019 by geography 2,00 0.00 +45% 11% 6% 1,80 0.00 1,60 0.00 Higher nuclear prices and volumes 1,40 0.00 1,616 FY 2019 1.6 €bn 1,20 0.00 4
Slide 92: Infrastructure and Networks
Enabling Infrastructure Infrastructure and Networks EBITDA growth driven by Enel DX Sao Paulo and efficiencies EBITDA evolution (€mn) EBITDA FY 2019 by geography 11,0 00.00 +11% 10,0 00.00 1% Enel DX Sao Paulo consolidation 25% and outstanding performance 9,00 0.00 8,00 0.00 8,228 FY 2019 47% 8.2 €b
Slide 93: Retail
Electrification Retail Performance propelled by free market EBITDA evolution (€mn) Energy sold1 (TWh) +7% +3% Higher margins in Iberia and Latin 3,079 3,287 America 400 .00 350 .00 327 336 599 546 300 .00 c.9% cost to serve reduction 172 250 .00 163 mainly in Italy 200 .00 150 .00 2,533 2,688 100 .0
Slide 94: Profit & loss
Profit & loss (€mn) FY 2019 FY 2018 ∆ yoy Ordinary EBITDA 17,905 16,158 +11% Higher D&A mainly due to IFRS16, consolidation of Enel DX Sao Paulo and higher investments D&A (6,809) (6,365) +7% EBIT 11,096 9,793 +13% Lower cost of debt by around 40bps Financial expenses1 (2,413) (2,370) +2% Results fr
Slide 95: Cash flow
Cash flow (€bn) Solid FFO generation supports increasing capex 12.0 17.9 10.0 (1.8) (0.0) 8.0 (1.8) 6.0 (2.7) 4.0 11.6 (10.0) 2.0 - 1.7 1 3 Ordinary ∆ Provisions ∆Working Income Financial FFO Capex FCF EBITDA capital taxes expenses 2 & other PY 16.2 (1.9) 1.1 (1.7) (2.6) 11.1 (8.5)4 2.5 Delta YoY +1
Slide 96: Debt
Debt (€bn) Cost of debt declined by 40 bps, Net Debt impacted by FX and IFRS16 Gross debt Net debt evolution 50 +7% 48 46 4.0 1.1 61.5 57.4 44 42.5 45.2 60 9.0 (0.6) 6.7 42 1.4 50 7.3 IFRS 16 8.2 40 IFRS 16 40 1.4 (1.7) 38 30 41.1 36 20 41.1 45.2 34 10 32 30 - 1 2 Jan 1, 2019 Dec 31 2019 Jan 1, 2019
Slide 97: Closing remarks
Closing remarks More than 50% of NO evidence of Ample liquidity 2019 strong our people significant available and financial results as working remotely impacts thanks to strong balance a consequence of a a resilient and sheet to face strong operational No disruptions on diversified volatile scenarios
Slide 98: Annexes
2020-2022 Annexes
Slide 99: Agenda
Agenda Page Macro scenario 71 Conventional generation 74 EGP 77 Financial annexes Infrastructure & Networks 81 Retail 85 Enel Group 89 2020 – 2022 Sustainability Plan 97 Focus on People Centricity 99 ESG annexes Focus on Corporate Governance 102 Focus on Innovation & Cybersecurity 108 98
Slide 100: Financial annexes
2020-2022 Financial annexes
Slide 101: Macro scenario
2020-2022 Macro scenario
Slide 102: GDP, CPI, FX
Macro scenario GDP, CPI, FX GDP (%) CPI (%) FX against €1 2020 2021 2022 2020 2021 2022 2020 2021 2022 Italy 0.5 0.6 0.7 1.3 1.5 1.7 n. m. n. m. n. m. Iberia 2.0 1.7 1.5 1.7 1.8 1.9 n. m. n. m. n. m. Latin Am erica A rgentina (1.3) 1.4 1.8 48.6 34.8 22.9 77.8 95.2 115.2 B razil 2.6 2.6 2.5 4.1 3.9 3
Slide 103: Commodities' prices
Commodities’ prices Macro scenario 2019 2020 2021 2022 Gas TTF (€/MWh) 13.5 19.2 19.5 19.7 Gas Henry Hub ($/m m btu) 2.5 3.1 3.1 3.1 Gas PSV (€/MWh) 16.0 20.9 21.1 21.3 Oil Brent ($/bbl) 64.1 65.0 65.0 66.0 Coal API2 ($/ton) 61.0 75.0 76.0 78.0 CO2 (€/ton) 24.8 23.5 24.0 24.5 102
Slide 104: Conventional generation
2020-2022 Conventional generation
Slide 105: Conventional generation installed capacity
Installed capacity1 (GW) Conventional generation By technology By geography 8% 9% 32% 34% 35% 12% 15% 2019 2022 41% 2019 2022 29% 32% 36.5 GW 42.2 GW 42.2 GW 36.5 GW 18% 21% 38% 30% 28% 18% Nuke CCGT Coal Oil & Gas Italy Latin America Iberia Rest of Europe Nuke CCGT Coal Oil & Gas Total 2019 2020 20
Slide 106: Conventional generation production
Production1 (TWh) Conventional generation By technology By geography 20% 25% 17% 24% 16% 18% 2019 22% 2022 25% 2019 2022 129.7 TWh 35% 106.0 TWh 129.7 TWh 40% 106.0 TWh 37% 15% 43% 29% 16% 18% Nuke CCGT Coal Oil & Gas Italy Latin America Iberia Rest of Europe Nuke CCGT Coal Oil & Gas Total 2019 2020
Slide 107: EGP
2020-2022 EGP
Slide 108: EGP consolidated capacity
EGP Consolidated capacity1 (GW) By technology By geography 13% 2% 15% 2% 7% 27% 2% 16% 52% 2% 33% 3% 2019 67% 2022 2019 2022 42.2 GW 1% 54.2 GW 42.2 GW 54.2 GW 24% 32% 34% 19% 31% 18% Italy Latin America North America Hydro Wind Solar & Other Geothermal Iberia Rest of Europe Africa, Asia & Oceania H
Slide 109: EGP consolidated production
EGP Consolidated production1 (TWh) By technology By geography 13%2% 19% 2% 18% 4% 45% 24% 6% 12% 2% 2019 63% 2022 2019 2% 2022 5% 12% 99.4 TWh 143.3 TWh 99.4 TWh 143.3 TWh 10% 27% 38% 49% 47% Italy Latin America North America Hydro Wind Solar & Other Geothermal Iberia Rest of Europe Africa, Asia & O
Slide 110: EGP additional capacity and pipeline
EGP Consolidated additional capacity and pipeline1 (GW) Consolidated additional capacity by technology COD 2020-2022 Pipeline by geography 1% Wind 2020-22 Solar COD 49% 11.62 GW 50% 2020 2021 2022 Total Hydro Italy 0.0 0.5 1.6 2.1 Iberia 0.1 1.0 1.8 2.9 Latin America - 0.3 4.8 5.1 Rest of Europe 0.0
Slide 111: Infrastructure & Networks
2020-2022 Infrastructure & Networks
Slide 112: Electricity distributed, end users, smart meters
Electricity distributed, End users, Smart meters1 Infrastructure & Networks Electricity distributed (TWh) End users (mn) Smart meters (mn) 2019 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022 Italy 224.6 226.5 226.8 227.1 31.5 31.5 31.5 31.6 31.4 31.4 31.4 31.6 Iberia 126.5 127.0 128.4 129.8
Slide 113: Current regulatory framework in Europe
Infrastructure & Networks Current regulatory framework in Europe1 Italy Iberia Romania WACC real pre tax 6.9% 5.9% 6.0% 2019 Next Regulatory 20242 2026 2024 Period Regulatory Period 4+4 6 5 Length (years) Metering Owned by Owned by Owned by Ownership DSO DSO DSO Smart meter Yes No Yes inclusion in R
Slide 114: Current regulatory framework in Latin America
Infrastructure & Networks Current regulatory framework in Latin America1 Argentina Brazil Chile Colombia Peru WACC real pre tax 10.0%2 12.5% 12.3% 11.79% 12.0%2 2019 Next Regulatory 2022 2023 Nov 2020 2024 Nov 2022 Period Regulatory Period 5 (Rio, Goias) 5 4 5 4 Length (years) 4 (Ceará, São Paulo) M
Slide 115: Retail
2020-2022 Retail
Slide 116: Power & gas customers and volumes
Power & gas customers and volumes1 Retail Power Gas Customers (mn) Volumes (TWh) Customers (mn) Volumes (bsmc) 2019 2022 2019 2022 2019 2022 2019 2022 Italy 23.7 18.5 97.5 92.6 4.1 4.4 4.7 4.7 Free Market 9.2 18.5 62.0 92.6 4.2 4.4 4.7 4.7 Regulated 14.4 - 35.6 - - - - - Iberia 10.6 10.7 89.4 103.1
Slide 117: Power unitary margin and opex per client
Retail Power unitary margin and opex per client Power unitary margin Opex per client (€/MWh) 1 (€/customer) 2019 2022 2019 2022 Italy 22.3 20.2 26.0 22.9 Iberia 10.5 9.8 35.5 30.5 Latin America 3.8 3.0 14.4 12.5 Rest of Europe 6.3 10.4 16.2 11.3 1. Includes only power free market 116
Slide 118: Italian power market 2019
Italian power market 2019 Customers (mn) Energy sold (TWh) Enel Enel Enel Enel market share1 market share2 market share1 market share2 40% 36.8 18.5 239.3 286.2 4.5 7.2 53% 24% 18.3 14.0 205.3 220.1 2.8 29.5 47% 15.5 46.8 34.1 14.8 66.1 32.0 Regulated 79% Free 50% Total Regulated Free Total 84% 27%
Slide 119: Spanish power market 2019
Spanish power market 2019 Customers (mn) Energy sold (TWh) Enel Enel market share1 market share1 18.3 29.4 226.6 253.9 30% 55.3 32% 81.2 17.4 28.5 171.4 11.2 0.9 33% 172.7 31% 11.2 27.3 26.0 0.0 0.9 1.3 43% 30% Regulated 48% Free 34% Total Regulated Free Total Business Residential 118 1. Customers:
Slide 120: Enel Group
2020-2022 Enel Group
Slide 121: Gross Capex
Gross Capex1 (€bn) Enel Group Cumulated gross capex by GBL2 Cumulated gross capex by geography3 10%1% 4% 41% Networks 3% Italy 4% Retail 32% Iberia 7% Conventional generation Latin America 28.7 €bn 28.7 €bn Enel X 32% Rest of Europe EGP North America 44% 22% Africa, Asia & Oceania Global Generation
Slide 122: Asset development capex
Asset development capex1 (€bn) Enel Group Cumulated asset development capex by GBL2 Cumulated asset development capex by geography3 27% Networks 15% 1% Italy 3% 29% 4% Retail 3% Iberia Conventional generation Latin America 17.2 €bn 17.2 €bn Enel X Rest of Europe EGP 32% North America 20% 66% Africa,
Slide 123: Asset management capex
Asset management capex1 (€bn) Enel Group Cumulated asset management capex by GBL2 Cumulated asset management capex by geography3 2% Networks 3% Italy 30% Iberia 20% Retail 64% 36% Latin America 6.5 €bn Conventional generation 6.5 €bn Rest of Europe EGP North America 16% 29% Africa, Asia & Oceania Gl
Slide 124: Customers capex
Customers capex1 (€bn) Enel Group Cumulated customers capex by GBL2 Cumulated customers capex by geography3 2% 5% Networks 1% Italy 12% Iberia 43% 5.0 €bn 64% Retail 31% 5.0 €bn Latin America Rest of Europe 24% Enel X North America 18% Africa, Asia & Oceania Global Generation Conventional Generation
Slide 125: Ordinary EBITDA
Ordinary EBITDA1 Enel Group By GBL2 By geography3 20.1 17.9 20.1 17.9 Italy Networks 3% 4% 43% 3% 4% Iberia 46% Retail 33% 29% Latin America Conventional generation 17% 21% Rest of Europe 21% 18% 8% Enel X North America 1% 9% 2% EGP 42% 39% Africa, Asia & Oceania 26% 29% 2019 2022 2019 2022 Conventi
Slide 126: Baseload power price & production sold forward
Enel Group Baseload power price & production sold forward Baseload price 2019 2020 Italy (€/MWh) 56.9 56.2 Iberia (€/MWh) 56.5 55.0 Production sold forw ard 2019 2020 2021 2022 price % price % price % price % 1 Italy (€/MWh) 54.5 100% 58.8 80% 57.8 20% 1 Iberia (€/MWh) 67.8 100% 72.8 90% 77.5 60% Br
Slide 127: Environmental, Social and Governance annexes
2020-2022 Environmental, Social and Governance annexes
Slide 128: Sustainability Plan
2020-2022 Sustainability Plan
Slide 129: 2020-2022 Sustainability Plan
Sustainable business model, driving change through 2020-2022 Sustainability Plan innovation Enel public committment to United Nations (7.1, 4, 8, 13) 128 2
Slide 130: Focus on People Centricity
2020-2022 Focus on People Centricity
Slide 131: Engaging people we work with
Engaging People we work with Focus on People Centricity Plan actions 2019 2020-2022 targets Promotion of digital skills’ dissemination 46% of people involved in digital 100% of people involved in digital among all employees skills training skills training Gender - % of women in selection 42% women i
Slide 132: Engaging local communities
Engaging local Communities Focus on People Centricity Plan actions 20191 2020-2022 targets High-quality, inclusive and fair education 1.3 mn beneficiaries 2.5 mn beneficiaries in 20301 Access to affordable and clean energy 7.9 mn beneficiaries 10.0 mn beneficiaries in 20301 Employment and sustainabl
Slide 133: Focus on Corporate Governance
2020-2022 Focus on Corporate Governance
Slide 134: Corporate governance structure
Focus on Corporate Governance Corporate governance structure 78% Shareholders’ meeting Audit firm BoD’s composition 11% 11% Board of Statutory Board of Directors1 Auditors (3 members) Non executive Executive (9 members2) Indipendent Nomination and Control and Risks Related Parties Committee Corporat
Slide 135: Board composition
Focus on Corporate Governance Board composition Board of Directors Board of Directors’ diversity1 Chairperson P. Grieco 11% 33% (C) Corp. Governance & Sust. C. CEO and Age Gender F. Starace 67% 22% General Manager diversity diversity Corp. Governance & Sust. C 67% A. Antoniozzi Related Parties C. 57
Slide 136: Short-term variable remuneration
Focus on Corporate Governance Short-term variable remuneration1 Macro objective Objective Type of target Weight2 Entry (50%) Target (100%) Over (120%) Ordinary consolidated Profitability 40% 4.66 €bn 4.75 €bn 4.80 €bn Economic net income Cash and debt FFO/Consolidated net 30% 26.5% 27.3% 27.6% Finan
Slide 137: Long-term variable remuneration
Focus on Corporate Governance Long-term variable remuneration1 Macro objective Objective Type of target Weight4 Target (100%) Over I (150%) Over II (280%)5 Enel’s TSR Enel’s TSR Enel’s TSR from 100% from 110% Performance TSR2 50% to 110% of to 115% of > 115% of Market TSR Index TSR Index TSR Index P
Slide 138: Enel group's listed companies
Enel group’s listed companies1 Focus on Corporate Governance 70.1% 61.9% 57.3% 56.4% Chile Américas2 Russia 93.5% 99.1% 99.9% 100% 100% Enel Gx Chile Enel Dx Chile Enel Argentina Enel Brasil Enel Perú 96.5% 92.6% 75.7% Enel Gx Piura 83.2% 83.6% Pehuenche Enel Gx Costanera Enel Dx Perú Enel Gx Perú 7
Slide 139: Focus on Innovation & Cybersecurity
2020-2022 Focus on Innovation & Cybersecurity
Slide 140: Innovation
Focus on Innovation & Cybersecurity Innovation Plan actions 2020-2022 targets 10 innovation hubs ~83 partnerships 5 innovation labs1 Implementation in the business of 30 projects with startups Promoting global Crowdsourcing 12 innovation partnership and upporting high-potential >400.000 solver commu
Slide 141: Cyber security
Focus on Innovation & Cybersecurity Cyber security Plan actions 2020-2022 targets 2 mn Risky emails blocked1 (#) every day Coverage of web 100% of internet web applications exposed to applications protected internet with advanced Connections to dangerous 400K through advanced cyber security websites
Slide 142: Disclaimer
Disclaimer This presentation contains certain forward-looking statements that reflect the Company’s management’s current views with respect to future events and financial and operational performance of the Company and its subsidiaries. These forward-looking statements are based on Enel S.p.A.’s curr
Slide 143: Contact us
Contact us Contacts Email investor.relations@enel.com Phone +39 06 8305 7975 Monica Girardi Channels Head of Group Investor Relations Website Mobile App Investor Relations team Enel.com Enel Investors Federico Baroncelli Francisco Basauri Serena Carioti Federica Dori Follow us Federica Pozzi Fabrizi