Slide 1: Investor presentation December 2018
Investor presentation December 2018
Slide 2: Enel today: a leader in the new energy world
Enel today We are a leader in the new energy world 1st network operator1 73 mn end users 43 GW capacity2 World’s largest private 46.5 GW capacity3 player2 in renewables 5.7 GW demand response Largest retail customer 64 mn customers4 base worldwide1 1. By number of customers. Publicly owned operato
Slide 3: Our business model is well diversified and provides long term visibility
Enel today Our business model is well diversified and provides long term visibility North & Central America Italy Iberia Europe & North Africa 2% 28% 51% 5% 56% 0.6 €bn 7.0 €bn 15% 3.4 €bn 22% 0.5 €bn 31% 100% 13% 6% 44% 16% 11% 2018E Group EBITDA1 South America Africa, Asia & Oceania 1% 47% 3% 44%
Slide 4: Sustainable value creation over the long term
Our pillars Sustainable value creation over the long term Industrial Operational Simplification Human Growth Efficiency Capital Asset development Asset management Customers Communities Customers Corporate Asset Management & Streamlining 1.2 €bn opex People 27.5 €bn capex savings 3.2 €bn incremental
Slide 5: Increased capex plan focused on asset development and customers
Our pillars Increased capex plan focused on asset development and customers Industrial Growth Capex plan1 (€bn) EBITDA evolution by investment (€bn) +12% +20% 35 0.1 1.0 30 27.5 24.6 2.1 19.4 6.2 25 20 6.1 4.8 15 4.1 10 14.4 16.5 5 16.2 0 2018-20 2019-21 EBITDA Asset Customer Asset EBITDA old plan n
Slide 6: Growth driven by networks and renewables
Our pillars Growth driven by networks and renewables Industrial Growth Capital allocation 2019-21 (€bn) Incremental EBITDA2 (€bn) Total 2018 vs 21 16.5 4.8 6.2 by business1 +1.0 100 % 100 % 100 % 4% 9% 90% 90% 90% 11.6 30% 28% 80% 80% 80% 70% 70% 70% 11.1 +1.2 66% 60% 60% 60% 1.1 50% 50% 50% +0.4 40
Slide 7: Renewables are the driving force of growth
Our pillars Renewables are the driving force of growth Industrial Growth Asset development capex1 2019-21 Additional capacity by geography Higher investments to build 11.6 GW additional capacity 4% 9% 6% 15% 3% 14% 4% 16% Focus on markets with integrated presence & on developed countries 10.6 €bn ~1
Slide 8: Networks' investments tailored to maximize asset base value
Networks’ investments tailored to maximize asset Our pillars base value Industrial Growth Gross capex 2019-21 by nature & by geography Restructuring of Eletropaulo Completion of Goias turnaround 3% 29% Resiliency and flexibility in Italy and 29% 36% Spain 11.1 €bn 11.1 €bn 44% Digitalization to prom
Slide 9: Enel X capital allocation addresses customers' needs
Enel X capital allocation addresses customers’ needs Business line highlights Gross capex 2019-21 by nature & by geography Smart lighting and fiber optics for cities 41% 13% Electric mobility in Italy, Spain, US and Romania 27% 39% 1.1 €bn 1.1 €bn Demand response and storage solutions for C&I custom
Slide 10: Our ESG pillars and backbones to capture opportunities from energy transition
ESG targets Our ESG pillars and backbones to capture opportunities from energy transition Growth across low carbon technologies and services ENERGY TRANSITION Operational improvement for a better service SUSTAINABLE Engaging local communities LONG TERM VALUE Engaging the people we work with CREATION
Slide 11: Our commitment to SDGs and Human Capital
Our pillars Our commitment to SDGs and Human Capital Engaging local communities (mn beneficiaries) Our people Human Capital 20301 High-quality, inclusive and fair education 2.5 2021 Talent attraction and retention Access to affordable and clean energy 10.0 Appraise performance of 100% of people invo
Slide 12: Stable debt throughout the plan
Financial management Stable debt throughout the plan Net debt evolution (€bn) Source of funds allocation 2019-21 (€bn) 50. 0 -% 45. 0 0.3 (27.5) 40. 0 35. 0 41.1 30. 0 25. 0 20. 0 15. 0 (13.9) 41-42 ~41.8 ~42.2 ~41.8 10. 0 5.0 0.0 2018E 2019 2020 2021 Sources Incremental Gross capex Dividends of fun
Slide 13: Continued reduction in cost of debt
Financial management Continued reduction in cost of debt Financial strategy for 2019-21 (€bn) Net financial expenses on debt (€bn) Expected Current total Amount -4% cost1 cost Bond refinancing 4 5.0% 6.2 3% 4.2% 4.5% including green bonds 3.5 5.0 0% 4.6% 4.6% Bank loans and other 3 4.4% 4.4% 4.5 0%
Slide 14: Gross debt hedges softening FX swings and rates movements
Financial management Gross debt hedges softening FX swings and rates movements Gross debt by currency at 2021 After swap Interest rate composition 57% 86% 22% 55.1 €bn 55.1 €bn 55.1 €bn 7% 7% 78% 6% 7% 30% EUR USD GBP Other EUR USD GBP Other Floating Fixed + Hedged 13
Slide 15: Strong available liquidity, limited re-financing needs
Financial management Strong available liquidity, limited re-financing needs Debt maturity by year1 (€bn) 2019-21 Liquidity available1 14.0 12.0 10.0 Maturities/Gross Debt 9.7 23.3 €bn 8.0 8.5% 8.1% 7.3% 13.1 13.6 6.0 4.0 2.0 4.6 4.5 4.0 0.0 Available committed credit lines 2019 2020 2021 Total Cash
Slide 16: Solid improvement in profitability, returns, and credit metrics
Financial management Solid improvement in profitability, returns, and credit metrics Profitability Return on invested capital Credit metrics +400bps +140bps +460 bps 0.3 5 14. 0% 40. 0% 35. 0% 12. 0% 0.3 0 30. 0% 10. 0% 29% 29% 31.1% 10.0% 10.2% 27.4% 28.6% 25. 0% 27% 0.2 5 9.3% 25.0% 26.5% 8.0 % 25
Slide 17: Visible value creation for our shareholders
Earnings and targets Visible value creation for our shareholders CAGR (%) Earnings growth 2018 2019 2020 2021 2018-21 Ordinary EBITDA (€bn) 16.2 17.4 18.5 19.4 ~+6% Net ordinary income (€bn) 4.1 4.8 5.4 5.6 ~+11% Value creation Pay-out ratio 70% 70% 70% 70% - Implicit DPS (€/sh) 0.28 0.33 0.
Slide 18: Green Bond Program
Green Bond Program1 Green Bond Program Provide an ideal tool to finance the transition to a low carbon economy 42% 27% Diversify Enel’s investor base targeting 2019-21 Capex 2019-21 EBITDA 27.5 €bn 55.3 €bn investments towards low carbon 4% technologies and services 2% 40% 47% Adhering to the most a
Slide 19: Application of Green Bond principles
Green Bond Program Application of Green Bond principles Use of proceeds Evaluation & selection Renewable Energy Projects Green Bond committee established with cross functional team Transmission, Distribution and Smart Grid Projects Oversight of GBF1 implementation & allocation process Innovative Inf
Slide 20: 2017 Green Bond proceeds allocation
Green Bond Program 2017 Green Bond proceeds allocation Italy > 35 MW USA > 1,450MW Technology: Technology: Proceeds: ~ 30 €mn ~ 2.8 GW of growth in renewables Proceeds: ~400 €mn funded by the first Green Bond issuance Projects financed across countries of presence and leading technologies Peru > 300
Slide 21: 2018 Green Bond proceeds allocation
Green Bond Program 2018 Green Bond proceeds allocation USA > 750 MW USA > 290 MW Refinancing Over 2 GW of growth in renewables Technology: Technology: funded by 2018 Green Bond issuance Proceeds: ~170 €mn Proceeds: ~170 €mn Financing of smart meter roll-out and Italy networks quality improvement Mex
Slide 22: Cerro Pabellon geothermal power plant (Chile)
Cerro Pabellon geothermal power plant (Chile) Preliminary KPIs Main Actions implemented Sustainable Construction Site: awarded ENVIRONMENT by the Chilean Min. of the Environment Annual GHG emissions avoided: for quantifying, mitigate and neutralize 260k of tCO2eq CO2 associated to construction. SA
Slide 23: El Paso solar power plant (Colombia)
El Paso solar power plant (Colombia) . Preliminary KPIs Main Actions implemented ENVIRONMENT Technical training program for local Annual GHG emissions avoided: unskilled labor to create new skills and 92k of tCO2eq new job opportunities to be deployed at our sites under construction. SAFETY In
Slide 24: Closing remarks
Closing remarks Integrated model driving synergies and reducing risk profile Acceleration of renewables capacity development Significant value creation for all stakeholders Three years dividend certainty, with upside potential 23
Slide 25: Annexes 2019-2021 Strategic plan
Annexes 2019-2021 Strategic plan 24
Slide 26: Operating risk: low EBITDA exposure to merchant risk
Risk management Operating risk: low EBITDA exposure to merchant risk EBITDA 2019-21 (€bn) Regulated EBITDA by business 2019-21 120 % 55.3 Regulated ~ 100% 100 % Merchant 28% Regulated, contracted under long term 80% Retail portfolio hedge PPA, incentivized ~ 64% 60% Regulated ~ 46% 40% Regulated & 7
Slide 27: Operating risk: natural margin hedge from retail portfolio
Risk management Operating risk: natural margin hedge from retail portfolio Integrated margin – Generation GM vs retail GM Hedging position on price driven production Ren & Nuke 60.0 hedged price vs 160 % +13% +14% Pool price 2018 indexed 140 % 50.0 Coal & Gas Hedging of CDS-CSS Retail margin vs base
Slide 28: Operating risk: low regulatory risk over the plan period
Risk management Operating risk: low regulatory risk over the plan period South America Europe 2018 2019 2020 2021 2022 WACC 2018 2019 2020 2021 2022 WACC Italy 5.9% Brazil2 12.3% Iberia1 5.5% / 6.0% Colombia 11.8% Romania 5.7% Chile 10% Argentina 12.5% 2019-21 BP Peru 12% 2019-21 BP Stable and matur
Slide 29: Operating risk: renewables growth already significantly addressed
Risk management Operating risk: renewables growth already significantly addressed 2019-21 Additional capacity addressed1 (GW) Pipeline by geography and technology2 (GW) 14. 0 ~60% addressed 3% 12. 0 Coverage 21% 7% by yr 11.6 47% 10. 0 2019 91% ~7 2020 71% 8.0 19 GW 52% 2021 34% 24% 6.0 45% 4.0 2.0
Slide 30: Currency risk: low exposure to volatile currencies
Risk management Currency risk: low exposure to volatile currencies FX sensitivity1 – Avg. yearly impact 2019-21 (€mn) 2019-21 EBITDA by geography 2019-21 EBITDA by currency EBITDA Group NI BRL (180) 225 (30) 35 63% 63% ARS (35) 40 (6) 8 CLP (6) 6 - - 55.3 €bn 55.3 €bn COP (100) 125 (12) 15 26% 32% 5
Slide 31: Renewables: diversifying mix, improved visibility
Business line highlights Renewables: diversifying mix, improved visibility Installed capacity and Production by technology1 2019-21 Sales portfolio composition CAPACITY (GW) PRODUCTION (TWh) PPA duration (yrs) +23% +32% 55% 132 > 15 38% 48 140 50. 0 5 120 10-15 14% 40. 0 39 ~100 ~357 TWh 100 2 14 9%
Slide 32: Incremental asset development capex fully allocated to renewables
Business line highlights Incremental asset development capex fully allocated to renewables Asset development capex evolution (€bn) Incremental renewable capacity by geography and technology 5% 8% ~4 10.6 4% 60% 1.6 BSO 8.3 (~ 2) 18% ~5 GW 41% 40% 3.4 BSO 24% Brazil USA Iberia Italy Chile Other IRR s
Slide 33: Renewables: accelerating growth
Business line highlights Renewables: accelerating growth Gross Capex 2019-21 2018-21 EBITDA evolution (€bn) +23% 0.9 0.1 8% 5.4 11.6 €bn 92% 4.4 Asset development 2018E Asset Asset 2021 Asset management development management Asset management pre-tax cumulated cash generation for ~12€bn 32
Slide 34: Networks: 4% total RAB growth
Business line highlights Networks: 4% total RAB growth Europe: RAB evolution (€bn) South America: RAB evolution (€bn) - +20% 20.0 0 45.0 0 40.0 0 15.0 0 14.0 35.0 0 11.7 1.3 30.0 0 1.3 2.7 25.0 0 31 31 10.0 0 2.2 2.0 1.8 20.0 0 5.5 15.0 0 5.00 10.0 0 4.9 5.00 - - 1.5 2.5 2018E 2021 2018E 2021 Argent
Slide 35: Networks: profitability supported by asset turnaround and efficiencies
Business line highlights Networks: profitability supported by asset turnaround and efficiencies Gross Capex 2019-21 2018-21 EBITDA evolution (€bn) +17% 0.4 (0.3) 29% 0.5 29% 0.2 8.9 0.5 11.1 €bn 7.6 42% Asset development Customers Asset Management 2018E Eletropaulo Connections Tariff Efficiency FX 2
Slide 36: Enel Group Gross Capex
Enel Group Gross Capex (€bn) Global Generation Global Infrastructures Renewable Services Retail Enel X Total & Trading & NetworNs Energies & Other 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 Italy 0.2 0.1 0.1 1.7 1.7 1.5 0.3 0.3 0.4 0.3 0.
Slide 37: Enel Group Ordinary EBITDA
Enel Group Ordinary EBITDA Global Generation Global Infrastructures Renewable Services Retail Enel X Total & Trading & NetworNs Energies & Other 2018E 2019 2020 2021 2018E 2019 2020 2021 2018E 2019 2020 2021 2018E 2019 2020 2021 2018E 2019 2020 2021 2018E 2019 2020 2021 2018E 2019 2020 2021 Italy -
Slide 38: ESG annexes 2019-2021
2019-2021 ESG annexes 37
Slide 39: Our commitment to low carbon growth
ESG delivery Our commitment to low carbon growth Plan actions – 2018-2020 2018E 43 GW renewable capacity1 Development of renewable capacity and reduction of thermal capacity 46.5 GW thermal capacity Implementation of environmental 94 €mn of investments for environmental international best practices
Slide 40: Assets optimization and innovation
ESG delivery Assets optimization and innovation Plan actions – 2018-2020 2018E Large scale infrastructure innovation • 48k charging points1 mostly in grid digitization, smart meters and charging points • 44 mn smart meters2 Foster global partnerships and ‘high • 13 projects with startups in deployme
Slide 41: Engaging local communities
ESG delivery Engaging local communities Plan actions – 2018-2020 2018E1 High-quality, inclusive and fair education 0.9 mn beneficiaries Access to affordable and clean energy, mainly in Africa, Asia and Latin America 2.2 mn beneficiaries2 Employment and sustainable and inclusive economic growth 1.8 m
Slide 42: Engaging people we work with
ESG delivery Engaging people we work with Plan actions – 2018-2020 2018E • 100% of people involved Appraise performance of people we work with1 • 99% of people appraised • 100% of people involved Climate corporate survey1 • 85% of people participating Global implementation of the diversity and 38% w
Slide 43: Digitalization and cyber security
ESG delivery Digitalization and cyber security Plan actions – 2018-2020 2018E • Single strategy approach based on 85% of internet web applications protected business risk management through advanced cyber security solutions • Business lines involved in key processes: risk assessment, response and re
Slide 44: Our commitment to Sustainable Development Goals
ESG targets Our commitment to Sustainable Development Goals Our targets are set across the board of the 17 UN SDGs 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Growth across low carbon technologies & services Operational improvement for a better Pillars service Engaging local communities Engaging the p
Slide 45: Growth across low carbon technologies and services
ESG targets Growth across low carbon technologies and services Plan actions Related targets/commitments +11.6 GW renewable capacity1 Development of renewable capacity and reduction of thermal capacity in 2019-21 -7GW thermal capacity Implementation of environmental 340 €mn of investments for environ
Slide 46: Operational improvement for a better service
ESG targets Operational improvement for a better service Plan actions Related targets/commitments 46.9 mn smart meters1 Large scale infrastructure innovation mostly in grid digitization, smart meters 5.4 €bn digitalization capex in 2019-21 and charging stations 455k charging stations2 E&C3 and O&M4
Slide 47: Engaging local communities
ESG targets Engaging local communities Plan actions Related targets/commitments1 High-quality, inclusive and fair education 2.5 mn beneficiaries in 20301 Access to affordable and clean energy 10.0 mn beneficiaries in 20301 Employment and sustainable and inclusive economic growth 8.0 mn beneficiaries
Slide 48: Engaging people we work with
ESG targets Engaging people we work with Plan actions Related targets/commitments • 100% of people involved Appraise performance of people we work with1 • 99% of people appraised • 100% of people involved Climate corporate survey1 • 86% of people participating Global implementation of the diversity
Slide 49: Digitalization and cyber security
ESG targets Cross boosts Digitalization and cyber security Plan actions Related targets/commitments • Single strategy approach based on business risk management 100% of internet web applications • Business lines involved in key protected through advanced cyber security processes: risk assessment, re
Slide 50: Innovation
ESG targets Cross boosts Innovation Plan actions Related targets/commitments Bosting Group’s innovation through a tools Implementation in the business of 60 portfolio composed by innovation hub projects with startups in 2019-21 network, crowdsourcing platforms, Innovation boost intelligence, interna
Slide 51: Corporate governance structure
Corporate governance Corporate governance structure 78% Shareholders’ meeting Audit firm BoD’s composition 11% 11% Executive Board of Statutory Board of Directors1 Auditors (3 members) Non - executive (9 members2) Independent Nomination and Control and Risks Related Parties Committee Corporate Gover
Slide 52: Board composition
Corporate governance Board composition BoD’s members BoD’s Diversity1 P. Grieco Non ex (Chairperson) CGSC 11% 33% F. Starace Executive (CEO and Age Gender General Manager) 67% diversity 22% diversity A. Antoniozzi Independent 67% CGSC RPC Independent 46-56 57-66 67-70 Male Female A. Bianchi NCC RPC
Slide 53: Short-term variable remuneration
Corporate governance Short-term variable remuneration1 Objective Type of target Macro objective Entry level (50%) Target (100%) Over (120%) Ordinary consolidated net 3.9 €bn 4.1 €bn 4.2 €bn Economic Profitability income 40%2 FFO/Consolidated Cash and debt 26% 27% 28% Financial net financial debt man
Slide 54: Long-term variable remuneration
Corporate governance Long-term variable remuneration1 Objective Type of target Macro objective Entry (50%) Target (100%) Over I (150%) Over II (280%)5 Enel’s TSR Enel’s TSR Enel’s TSR Enel’s TSR from 90% to from 100% from 110% TSR2 > 115% of Market Performance 100% of to 110% of to 115% of TSR Index
Slide 55: Green Bond report 2017: financial indicators
Green Bond Green Bond report 2017: financial indicators 54
Slide 56: Green Bond report 2017: ESG Indicators
Green Bond Green Bond report 2017: ESG Indicators 55
Slide 57: Green Bond report 2017: further ESG indicators
Green Bond Green Bond report 2017: further ESG indicators 56
Slide 58: 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 59: Contact us
Contact us Monica Girardi Head of Group Investor Relations Investor Relations team Francisco Basauri Serena Carioti Alessia Di Ninno Federica Dori Fabrizio Ragnacci Email Federica Todaro investor.relations@enel.com Noemi Tomassi Emanuele Toppi Phone +39 06 8305 7975 Follow us Web site www.enel.com 5