Endesa S.a. · BME:ELE
Endesa — H1 2016 Earnings Presentation
33 slides from Endesa's earnings presentation, Jul 27, 2016
Slide 1: Endesa 1H 2016 Results
Endesa 1H 2016 Results 27/07/2016
Slide 2: Agenda
1. 60% EGPE acquisition 2. 1H 2016 Results 2.1. Highlights and key financial figures 2.2. Endesa’s performance in 1H 2016 market context 2.3. Financial results 3. Final remarks 1H 2016 Results- Madrid, 27 July 2016 2
Slide 3: Agenda
1. 60% EGPE acquisition 2. 1H 2016 Results 2.1. Highlights and key financial figures 2.2. Endesa’s performance in 1H 2016 market context 2.3. Financial results 3. Final remarks 1H 2016 Results- Madrid, 27 July 2016 3
Slide 4: Transaction rationale
Transaction rationale Best-in-class renewable portfolio 1 Value creation for EV: ~€2.0 bn Diversification & optimization 5 shareholders 2 60% equity: €1,207 M of Endesa’s generation mix 1,705 MW (93 plants) (1) 700 MW pipeline Capital structure 3 Synergy potential and 4 optimization growth p
Slide 5: Transaction terms
Transaction terms 100% EGPE: 2015 financial figures (€M)(1) 60% EGPE price Revenues ~290 EBITDA ~175 €1,207 M(3) Net Income ~20 Related-party transaction FCF(2) ~140 approved by Endesa’s independent directors Strong cash flow contribution (1) Re-expressed figures excluding Portuguese assets sold i
Slide 6: Best-in-class renewable portfolio
Best-in-class renewable portfolio 1,705 MW of consolidated operating capacity (93 power plants) 2015 Capacity & output breakdown (MW / TWh) Geographical footprint 2015 Key Operational Metrics 25 17 13 0.1 0.0 32 0.2 Solar Small hydro Biomass Wind Average life (years) 10 Asturias 600 1,705 3.9 Galic
Slide 7: Renewal & optimization of Endesa’s generation mix
Renewal & optimization of Endesa’s generation mix New energy mix to successfully cope with Pre and post transaction medium and long term energy outlook As of FY 2015 ELE ELE + EGPE 11% 7% New renewables will cover demand Endesa’s 22% 11% 21% growth generation 26% 21.2 22.9 portfolio 16% 24% 14%
Slide 8: Synergy potential and growth platform
Synergy potential and growth platform Synergies Growth platform Asset life extension Agent N EGPE ELE Gx Units Balancing area integration Program Program TSO Opex and Capex optimization Revenues synergies BID Repowering Coverage of retail sales ASK EGPE as the sole renewable platform of Enel
Slide 9: Capital structure optimization & value creation for shareholders
Capital structure optimization & value creation for shareholders Financing scheme EBITDA, FCF and EPS accretive transaction from 2017 Post vs. pre transaction (1) Mix funding: ECP’s and credit lines at no significant financing cost 2017e EBITDA (%): +~6-7% 2017e FCF (%): +~10% Endesa’s new leverage
Slide 10: Agenda
1. 60% EGPE acquisition 2. 1H 2016 Results 2.1. Highlights and key financial figures 2.2. Endesa’s performance in 1H 2016 market context 2.3. Financial results 3. Final remarks 1H 2016 Results- Madrid, 27 July 2016 10
Slide 11: Regulated and liberalized business highlights
Regulated business: stable gross margin evolution Liberalized business: +8% underlying(1) gross margin -6% in personnel costs Sound underlying(1) EBITDA evolution supported by successful energy management strategy Strong cash flow generation 1H 2016 Results- Madrid, 27 July 2016 (1) Net of 1H15 CO2
Slide 12: Key financial figures
Key financial figures €M 1H 2016 1H 2015 Change Like-for-like EBITDA 1,866 1,934 -4% +7%(1) Net attributable income 796 870 -9% +8%(2) Cash flow from operations 1,470 1,194 +23% 1H 2016 FY 2015 Change Net financial debt(3) 3,741 4,323 -13% Like-for-like(1) EBITDA grew by 7% (1) Excluding +€184 M o
Slide 13: Agenda
1. 60% EGPE acquisition 2. 1H 2016 Results 2.1. Highlights and key financial figures 2.2. Endesa’s performance in 1H 2016 market context 2.3. Financial results 3. Final remarks 1H 2016 Results- Madrid, 27 July 2016 13
Slide 14: Market context in 1H 2016
Market context in 1H 2016 Demand Electricity wholesale prices Average pool prices Spain (€/MWh) Spain(1) Endesa distribution area(2) (Not adjusted) Industry 0% +0.1% +0.2% Services +3.4% -36% +0.0% -0.1% 47 Residential -3.7% 30 1H 2015 1H 2016 Adjusted for weather and working days Not adjusted Fla
Slide 15: Endesa’s performance in 1H 2016 market context (I/II)
Endesa’s performance in 1H 2016 market context (I/II) Energy management Output (TWh) Electricity sales(1) (TWh) 5,938 8,086 (-11%) (+1%) Unitary integrated margin(2): 3,539 (-7%) 30,450 49,224 (-14%) 17,835 (+1%) €23.8/MWh (-1%) 22,292 (+2%) 6,677 8,920 (-44%) (+12% vs. 1H 2015) (+4%) 6,387 (+4%) Ma
Slide 16: Endesa’s performance in 1H 2016 market context (II/II)
Endesa’s performance in 1H 2016 market context (II/II) Regulated business Dx: Regulatory news flow Dx: Eléctrica del Ebro acquisition 2016 final remuneration (Order IET/980/2016): Electricity distribution and supply company 2014 net RAB: €11.2 bn with 20,000 customers Regulated revenues: €2,
Slide 17: Agenda
1. 60% EGPE acquisition 2. 1H 2016 Results 2.1. Highlights and key financial figures 2.2. Endesa’s performance in 1H 2016 market context 2.3. Financial results 3. Final remarks 1H 2016 Results- Madrid, 27 July 2016 17
Slide 18: Financial results
Financial results (1) (2) P&L evolution: (+) Underlying EBITDA increase (+7%): good performance of liberalized business (-) Net attributable income impacted by write-down on 40% EGPE (-€72 M) (1) Excluding +€184 M of CO2 swap transaction in 1H2015 1H 2016 Results- Madrid, 27 July 2016 (3) Gross Cape
Slide 19: 1H 2016 EBITDA breakdown
1H 2016 EBITDA breakdown 1H 2015 1H 2016 % €M Change (%) €M % Generation & Supply(1) 902 -19% 728 39% Generation & Supply(1) 47% Distribution 875 +9% 952 51% Distribution 45% Non-mainland Gx(2) 8% 157 +18% 186 10% Non-mainland Gx(2) 1 1 TOTAL 1,934 -4% 1,866 TOTAL (1) Generation & Supply business EB
Slide 20: Regulated business
Regulated business Gross margin evolution +1% €M 1,512 21 1,533 Non-mainland generation(1) 306 306 Distribution 1,206 1,227 1H 2015 Gross Margin Dx Non-mainland Gx 1H 2016 Gross Margin Stable gross margin (+1%) 1H 2016 Results- Madrid, 27 July 2016 (1) Non-mainland generation Gross Margin figure i
Slide 21: Liberalized business
Liberalized business (1) Gross margin evolution €M -7% 1,396 Gas 1,303 business 175 93 146 Gas Sales (37,419 GWh) business Sales (39,402 GWh) 4,806 1,221 3,166 1,157 7,211 10,013 25,402 26,223 1H 2015 Gross Margin 1H 2016 Gross Margin Domestic Selling price Lower fuel costs, Law 15/2012 taxes an
Slide 22: Liberalized business: 1H 2016 energy management
Liberalized business 1H 2016 energy management Energy (TWh) Unitary values breakdown (€/MWh) Sales 40.4 41.1 Unitary revenue 63.1 58.8 Energy 10.9 purchases 16.6 Unitary variable cost(1) 41.8 35 +12% Mainland 29.5 output 24.5 Unitary margin 21.3 23.8 1H 2015 1H 2016 1H 2015 1H 2016 €35/MWh (-16%)
Slide 23: Fixed costs evolution
Fixed costs evolution 0% €M 974 (+4%) 970 23 26 (-6%) Personnel costs 458 432 O&M costs 566 589 -50 -51 Capitalized costs 1H 2015 O&M Personnel 1H 2016 Personnel costs decrease supported by 2014 and 2015 workforce restructuring plans 1H 2016 Results- Madrid, 27 July 2016 23
Slide 24: From EBITDA to Net Income
From EBITDA to Net Income €M -676 -101 -48 1,866 -245 1,190 1,041 796 EBITDA D&A EBIT Net Financial Associates and PBT Taxes Net attributable Expenses Others 11% Income 1H 2015 1,934 -672 1,262 -94 -16 1,152 -280 870 Change (%) -4% +1% -6% +7% +200% -10% -13% -9% 1H 2016 Results- Madrid, 27 July 201
Slide 25: Net financial debt analysis
Net financial debt analysis Net financial debt evolution Net debt / 1.4x 1.3x(1) EBITDA ratio €M 4,323 Regulatory working 292 3,741(2) capital(3) Regulatory working 1,470 424 64 capital(3) 465 4,031 3,677 FY 2015 Cash flow Capex+Others Dividends 1H 2016 Net debt 31/12/2015 Cash flow from Capex (€490
Slide 26: Agenda
1. 60% EGPE acquisition 2. 1H 2016 Results 2.1. Highlights and key financial figures 2.2. Endesa’s performance in 1H 2016 market context 2.3. Financial results 3. Final remarks 1H 2016 Results- Madrid, 27 July 2016 26
Slide 27: Final remarks
Stable results in the regulated business Sound underlying results in the liberalized business supported by successful energy management strategy Personnel costs reduction EGPE acquisition improves Endesa’s generation mix and sets the grounds for a solid future growth €0.626 final DPS against 2015 Re
Slide 28: Appendix
Appendix Endesa 1H 2016 Results 28
Slide 29: Installed capacity and output
Installed capacity and output Mainland output (GWh) Total output (GWh) GWh 1H2016 29,471 (and chg. vs. 1H 2015 (1) Total Output 1,457 24,512 Total 30,450 -14% 7,064 990 Hydro 4,992 7% -17% 4,796 Nuclear 12,843 -1% 3,357 891 Coal 6,581 -42% Natural gas 2,836 -15% 12,913 12,843 Oil-gas 3,198 4% 60% 73
Slide 30: Endesa: financial debt maturity calendar
Endesa: financial debt maturity calendar Gross balance of maturities outstanding at 30 June 2016: €4,428 M(1) Bonds Bank debt and others ECPs and domestic commercial paper (2) 3,874 Endesa's liquidity 3,842 covers 63 months 167 of debt maturities 127 163 84 60 91 163 69 107 S2 2016 36 2.017 2.018 2.
Slide 31: Gross financial debt structure
Gross financial debt structure as of June 30th 2016 Structure of Endesa's gross debt €M 4,428 4,428 Floating 20% Euro 100% Fixed 80% By interest rate By currency Average cost of debt 2.7% 1H 2016 Results- Madrid, 27 July 2016 31
Slide 32: Disclaimer
Disclaimer This document contains certain "forward-looking" statements regarding anticipated financial and operating results and statistics and other future events. These statements are not guarantees of future performance and they are subject to material risks, uncertainties, changes and other fact
Slide 33: Endesa Corporate
Endesa Corporate Get full information of the company on Endesa Corporate, the Endesa App for iPhone, iPad and Android devices. Download from App Download from Google Store Play 33