Slide 1: Extraordinary General Shareholders Meeting
Extraordinary General Shareholders Meeting 7 April 2006
Slide 2: Important information about the offer
In connection with the offer by Gas Natural SDG, S.A. (Gas Natural) to acquire 100% of the share capital of Endesa, S.A. (Endesa), Gas Natural has filed with the United States Securities and Exchange Commission (SEC) a registration statement on Form F-4 (File No.: 333-132076), which includes a preli
Slide 3: Agenda
1. Strategic rationale for the transaction 2. Summary of the offer for Endesa 3. Proposed resolutions
Slide 4: Strategic rationale for the transaction
Strategic rationale for the transaction
Slide 5: A transforming transaction to accelerate profitable growth
Global leading integrated Spanish gas and electricity company, with strong energy management capabilities Complementary, high-quality assets in fast growing markets Client-focused multinational leader with over 30 million customer accounts A transforming transaction to accelerate profitable growth
Slide 6: Creation of a Spanish leader in the energy sector
No.1 No.1 No.3 No.4 Global utilities – ranking by customer connections (millions) ² Creation of a Spanish leader in the energy sector Electricity and gas in Spain ¹ Electricity and gas in LatAm Global customer connections ² Global LNG supply (1) By combined customer connections, after asset disposal
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Slide 9: An energy leader in high-growth markets
• Gas and electricity distribution and supply • Electricity generation • Electricity generation • Regasification plant Source: Endesa 2005 Annual report and Gas Natural. After assets disposals • Gas distribution and supply • Electricity generation • Gas and electricity distribution and supply • Elec
Slide 10: An attractive project from a strategic, industrial and financial perspective
Combined management of clients and networks More flexible and competitive gas procurement More balanced and competitive generation portfolio Attractive business mix and investment profile Gas and electricity convergence Sizeable synergies An attractive project from a strategic, industrial and financ
Slide 11: Gas and power convergence in Spain
Total expected gas demand Sources of electricity generation (production) ¹ Gas and power convergence in Spain CCGT Coal 15% Nuclear 19% Fuel 4% Renewables + hydro 28% Coal 30% Nuclear 22% 26% Fuel 4% Domestic Industrial 2005 2011 Historical data Gas 33% Gas 18% CAGR 6-7% 2002 2004 2006 2008 2010 CAG
Slide 12: More flexible and competitive gas procurement
GAS NATURAL+ Endesa would be the 3rd largest LNG company globally Aprox. 2/3 of gas contracted by GAS NATURAL + Endesa will be LNG More flexible and competitive gas procurement Source: Wood Mackenzie (1) Repsol YPF–Gas Natural LNG, S.L’s position. Up + Midstream joint venture between GAS NATURAL and
Slide 13: More balanced and competitive generation portfolio
28% 12% 16% 21-23% 18% 22% More balanced and competitive generation portfolio GAS NATURAL + Endesa post disposals ¹ Endesa Source: REE data and GAS NATURAL estimates. Mainland installed capacity (1) The range refers to potential divestment scenarios: 1,200MW CCGT and/or Hydro (2) Includes Endesa, GA
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Slide 15: Sizeable synergies
Distribution synergies resulting from networks overlap will be reinvested to improve quality of service of GAS NATURAL + Endesa Sizeable synergies ~ 85 ~ 175 ~ 90 ~ 350 ~ 70 Source: Boston Consulting Group (1) Annual synergies. Synergies are estimated to be reachable in 2008 ~ 30 Synergies not inclu
Slide 16: Attractive business mix and investment profile
GAS NATURAL + Endesa would have a balanced and diversified EBITDA GAS NATURAL + Endesa expects to invest ~ €17.5 bn in organic growth until 2009 Attractive business mix and investment profile EBITDA 2009 ¹ (estimate) Source: GAS NATURAL estimates (1) GAS NATURAL/Endesa 2009 pro-forma EBITDA estimate
Slide 17: Positive financial impact
Very attractive transaction for the shareholders ³ of the New Group GAS NATURAL + Endesa will maintain its “A” credit rating target Positive financial impact (1) Company estimates based on IBES EPS projections of €1.87 (2006), €1.92 (2007), €2.32 (2008) and a long-term growth rate of 6.8% for Endesa
Slide 18: Attractive dividend policy
Additionally, all future capital gains resulting from the sale of non-energy assets will be distributed as dividends Payout of 52-55% in 2008 DPS increase by a minimum of 15% per annum for the 2006-2009 period Attractive dividend policy The New Group will adopt an attractive dividend policy ¹ , cons
Slide 19: Strategic Priorities
GAS NATURAL’s objectives Transaction impact Multi-product offer in Spain Transaction fully in line with GAS NATURAL’s commitment to shareholders Enhanced multi-product opportunities in liberalised markets, specially dual fuel Gas supply with a equity gas position Electricity business Gas distributio
Slide 20: A transaction with benefits for consumers and the general public
Strengthens Spain’s security of energy supply through a stronger position in the international markets Investment commitment that will allow the improvement of the quality of power supply to clients Transfer of synergies arising from the distribution overlap to consumers, which will generate savings
Slide 21: Security of supply in Spain
Madrid Córdoba LNG 66% NG 34% Izmir Security of supply in Spain Brindisi Cartagena Bilbao Huelva Lisboa Athens Fos-sur-Mer La Spezia Ferrol Montoir Paris London Dublin Brugge Brussels Rome Rovigo Krk Marmara Ereglisi Bucharest Belgrade Sophia Vienna Prague Berlin Wilhelmshaven Copenhagen Stockholm O
Slide 22: Benefits for consumers
Benefits for consumers Investments to improve quality of service Expected investments by GAS NATURAL + Endesa in Spain (estimate 2006-2009) ~4,700 ~6,300 ~140 >11,000 Source: GAS NATURAL estimates (1) Up to 70 million euro per year estimated for 2008 and 2009. Total investment of c.€17.5 bn through
Slide 23: Competitive situation on the European electricity market
Competitive situation on the European electricity market Euro c./KWh Source: Eurostat, Domestic tariffs on 1st of July 2005, excluding taxes Comparison of European electricity tariffs
Slide 24: Summary of the offer for Endesa
Summary of the offer for Endesa
Slide 25: Transaction details
Terms Conditions Transaction details Tender offer for 100% of the share capital of Endesa. 7.34 euro in cash and 0.569 GAS NATURAL shares for each Endesa share. Offer consideration: 65.5% in shares and y 34.5% in cash ¹ . Capital increase of a maximum of 602 million GAS NATURAL’s shares ² . The offe
Slide 26: Capital increase
Capital increase Issuance of 602,429,955 new common shares (par value of one euro each) to constitute the stock component of the consideration offered in the tender offer for Endesa. Subject to the success of the offer for Endesa. Will depend on the final level of acceptances of the offer for Endesa
Slide 27: Unique opportunity to participate in a Spanish integrated gas and electricity project
Unique opportunity to participate in a Spanish integrated gas and electricity project Free float 63.1% La Caixa 14.7% Repsol YPF 13.2% Caja Madrid 5.7% Other² 3.4% GAS NATURAL + Endesa shareholder structure after the offer ¹ Endesa shareholders 57% GAS NATURAL shareholders 43% Creation of a Spanish
Slide 28: All the regulatory and administrative hurdles have been passed
Spanish antitrust authorities National Energy Commission European antitrust authorities Secretary General of Energy CNMV SEC (USA) All the regulatory and administrative hurdles have been passed Regulated activities (Function XIV): November 2005 The EC confirmed that the jurisdiction on competition m
Slide 29: Terms and Conditions: CNMV's clarification
Terms Conditions CNMV’s clarification ¹ E.ON competing bid 27.50 euros per share, in cash. (1) Source: CNMV’s press release on the key dates and deadlines for the tender offers on Endesa, 24th March 2006 Minimum of 50.01% acceptance. Changes in the by-laws. Deadline for competing offers ended on the
Slide 30: Gas Natural has an excellent track record
... in the gas business 1 ... in the electricity business 2 GAS NATURAL has an excellent track record… Clients 2000-2005: +3.2 millions (+46%) Network Kilometres 2000 - 2005: +25,947 (+35%) CCGTs today: 2,800 MW CCGT target for 2008: 4,800 MW Production 2002-2005: +6.8 TWh (+329%) (1) Global busines
Slide 31: Meeting the objectives announced in the Strategic Plan
CAGR: +18% EBITDA CAGR: +12% … meeting the objectives announced in the Strategic Plan EBITDA and Net Income (million euro) 1,2 Dividend per share (euro) ³ (1) 2003 under Spanish GAAP. 2004 and 2005 under IFRS. Source: Annual Reports and Results presentation 2005 (2) 2005 data pending approval of the
Slide 32: Proposed resolutions
Proposed resolutions
Slide 33: First resolution
First resolution Capital increase. Issuance of 602,429,955 new common shares, having a par value of 1 euro each. Issuance premium to be determined, pursuant to Article 159.1.c) of the Law of Corporations (Ley de Sociedades Anónimas), by the Board of Directors, at the time the capital increase is exe
Slide 34: Second resolution
Second resolution Request to be made to the competent national and international agencies to admit the new shares to be traded on the Stock Exchanges of Madrid, Barcelona, Bilbao and Valencia. Inclusion in the Stock Exchange Interconnection System (Continuous Market). Shares of Gas Natural SDG, S.A.
Slide 35: Third resolution
Third resolution Delegation, pursuant to article 153.1 a) of the Law of Corporations (Ley de Sociedades Anónimas), to the Board of Directors, of the powers necessary to determine the conditions of the increase in all aspects not provided by the General Shareholders' Meeting. Determination of the amo
Slide 36: Fourth resolution
Fourth resolution Ratification and appointment D. José Arcas Romeu as Director, for a period of three years.
Slide 37: Fifth resolution
Fifth resolution Authorization to the Board of Directors to interpret, correct, supplement, execute and implement the resolutions adopted by the General Shareholders Meeting, and grant of powers for purposes of elevating such resolutions to a public instrument.
Slide 38: Extraordinary General Shareholders Meeting
Extraordinary General Shareholders Meeting 7 April 2006