Enel SpA · MIL:ENEL
Enel SpA — H1 2014 Earnings Presentation
54 slides from Enel SpA's earnings presentation, Jul 31, 2014
Slide 1: 2014 Interim results
2014 Interim results July 31, 2014
Slide 2: Agenda
Agenda • Opening remarks F. Starace • 2014 Interim results L. Ferraris • Closing remarks F. Starace • Annexes Enel S.p.A. Investor Relations 1
Slide 3: Opening remarks
Opening remarks An improving overall financial environment in Italy and Spain Ongoing weak energy industry outlook in Italy, first signs of recovery in Spain Increasing public awareness of the relevant energy issues in EU Energy affordability and EU common energy policy as general framework for comp
Slide 4: Focused managerial actions: a quick start
Focused managerial actions: a quick start Overall disposal plan programme Decoupling of Iberia and Latam operations Group’s reorganization Enel S.p.A. Investor Relations 3
Slide 5: Ongoing disposal programme
Ongoing disposal programme Ca. 4 €bn original target confirmed Generation assets in Slovakia / distribution assets in Romania Further potential disposals already identified, mainly non strategic assets worldwide Gain flexibility to cope with a more challenging scenario Enel S.p.A. Investor Relations
Slide 6: Decoupling of Iberia and Latam operations
Decoupling of Iberia and Latam operations PRE transaction Step 1 Step 2 POST transaction Enel Energy Europe acquires Extraordinary dividend 100% of Endesa Latam and Endesa SA in cash 20.3% of Enersis Enel SpA 100% Enel SpA Enel SpA Enel SpA Enel Extraordinary Energy cash dividend 100% Endesa 100% 10
Slide 7: Decoupling of Iberia and Latam operations: rationale
Decoupling of Iberia and Latam operations Rationale at Group level • Refocusing the strategy on clear dedicated value drivers Iberia: efficiency enhancing and capex redeployment Latam: focus on organic growth and business development • Further step in increasing the economic interest in Latam Be
Slide 8: Group's reorganization
Group’s reorganization Global business lines Global Global Renewable Upstream Global Infrastructures Generation Energies Gas Trading & Networks Italy Relevant KPIs: R Iberia Relevant KPIs: • Capex optimization e • Revenues • best practice sharing and g efficiency improvements i • Opex o (staff/servi
Slide 9: Group's reorganization
Group’s reorganization Reduction of complexity Centralized capital allocation Enhancing efficiencies in capex and opex Best practices implementation all throughout the regions Global business lines coupled with ultimate responsibility at country level Unlocking value through a Enel S.p.A. Investor R
Slide 10: Agenda
Agenda • Opening remarks F. Starace • 2014 Interim results L. Ferraris • Closing remarks F. Starace • Annexes Enel S.p.A. Investor Relations 9
Slide 11: Financial highlights
Financial highlights Consolidated results (€mn) 1H13 % 1H13 restated1 1H14 vs restated Revenues 40,157 39,287 36,101 -8.1 EBITDA 8,293 8,143 7,878 -3.3 - recurring2 8,293 8,143 7,746 -4.9 EBIT 5,168 5,093 5,011 -1.6 Group net income 1,680 1,680 1,685 +0.3 Group net ordinary income2 1,652 1,652 1,572
Slide 12: Financial highlights: from EBIT to net income
Financial highlights From EBIT to Net Income (€mn) 1H13 % 1H13 restated1 1H14 vs. restated EBIT 5,168 5,093 5,011 -1.6 Net financial charges (1,267) (1,263) (1,676) +32.7 Interest charges (1,392) (1,387) (1,377) -0.7 Other 125 124 (299) n.m. Net income from equity investments using equity 55 93 53 -
Slide 13: Focus on forward electricity sales
Focus on forward electricity sales Level of total production hedged (%) Italy Spain2 100 100 100 100 ~5 ~ 40 ~ 65 ~ 95(1) Unhedged ~ 60(1) Hedged ~ 35 2014 2015 2014 2015 Latam Slovakia 100 100 100 100 ~ 25 ~ 30 ~ 50 ~ 75 ~ 70 ~ 50 2014 2015 2014 2015 Enel S.p.A. Investor Relations 1. Including roll
Slide 14: Group EBITDA evolution
Group EBITDA evolution (€mn) -3.3% 8,143 +107 +61 +152 -4 -584 30 -78 +81 7,878 111 967 889 Latam operations: Latam operations: 1,738 €mn 1,254 €mn 3,566 2,982 Iberian operations: Iberian operations: 1,828 €mn 1,728 €mn S&H EGP 505 509 Iberia & Latam International Italian operations: 2,118 1,966 I&N
Slide 15: EBITDA evolution: G&EM Italy
EBITDA evolution: G&EM Italy (€mn) +17.0% +41 735 +62 628 +4 1H13 Generation Gas Other2 1H14 restated1 margin margin 1. Due to the application of IFRS 11 (-39 €mn) Enel S.p.A. 2. Including non recurring item of +50 €mn remeasurement of fair value of SE Hydropower Investor Relations 14
Slide 16: EBITDA evolution: Market Italy
EBITDA evolution: Market Italy (€mn) +12.8% +85 -24 538 477 1H13 Free Regulated 1H14 restated market market Enel S.p.A. Investor Relations 15
Slide 17: EBITDA evolution: Infrastructure & Networks Italy
EBITDA evolution: Infrastructure & Networks Italy (€mn) +7.7% +232 2,118 1,966 -17 -63 1H13 Energy Connection Other 1H14 restated margin fees Enel S.p.A. Investor Relations 16
Slide 18: EBITDA evolution: International
EBITDA evolution: International (€mn) -0.8% -20.3% +125 634 -85 -15 509 -11 -18 505 204 186 161 Russia (Enel OGK-5) France, Belgium, EIH4 SEE3 146 Slovakia 271 186 -2 -13 1H13 Other 1H13 Slovakia SEE3 France, Russia 1H14 restated1 items2 restated1 Belgium, (Enel OGK-5) adjusted EIH4 Enel S.p.A. 1. D
Slide 19: EBITDA evolution: Endesa - Iberia
EBITDA evolution1: Endesa - Iberia (€mn) -5.5% +150 -357 1,828 +107 1,728 Of which, new retroactive measures on non mainland generation: -162 €mn 1H13 Liberalized Regulated Other 1H14 restated2 business business Enel S.p.A. 1. Enel’s GAAP figures Investor Relations 2. Due to the application of IFRS
Slide 20: EBITDA evolution: Endesa - Latam
EBITDA evolution1: Endesa - Latam (€mn) -27.8% +74 -315 1,738 -84 -159 1,254 1H13 Generation Distribution Other Forex effect 1H14 restated2 Enel S.p.A. 1. Enel’s GAAP figure Investor Relations 2. Due to the application of IFRS 11 equals to (-20 €mn) 19
Slide 21: EBITDA evolution: Enel Green Power
EBITDA evolution: Enel Green Power (€mn) -8.1% 967 -64 -15 +1 889 144 145 100 85 North America 723 Latin America 659 Europe 1H13 Europe Latin North 1H14 restated1 America America Enel S.p.A. Investor Relations 1. Due to the application of IFRS 11 (-6 €mn) 20
Slide 22: Net debt evolution
Net debt evolution (€mn) +3,367 (1) December 31, Cash flow Capex Net financial Taxes Dividends3 Extra- June 30, 2013 from operations charges ordinary 2014 (restated2) activities +10(4) +1(4) -39,706 -43,073 +3,253 -2,485 -1,468 -436 -1,870 -361 1. Net debt change calculated on continuing operations
Slide 23: Agenda
Agenda • Opening remarks F. Starace • 2014 Interim results L. Ferraris • Closing remarks F. Starace • Annexes Enel S.p.A. Investor Relations 22
Slide 24: Closing remarks
Closing remarks Reiterated commitment on deleverage by year end Group’s reorganization and restructuring kicked off Continue to reduce overall risk profile: actions aimed at enhancing cash flow and earnings Further upside from growth through faster returning and more sustainable investments Enel S.p
Slide 25: Operational and financial annexes
Operational and financial annexes
Slide 26: Production mix (TWh)
Production mix (TWh) -2.0% 35.2 35.9 0.9% 0.5% 9.2% 7.1% Group production mix 43.9% 47.0% Italy -0.3% 9.8% 9.7% 136.2 135.8 36.2% 35.7% 10.1% 10.5% 1H13 1H14 13.9% 12.8% restated 27.2% -1.1% 26.7% 14.5% 14.6% 101.0 99.9 7.8% 6.8% 13.3% 14.1% 27.9% 27.2% 15.5% 14.8% 1H13 1H14 Other Countries 20.7% 20
Slide 27: 1H2014 Group total net installed capacity
1H2014 Group total net installed capacity1: breakdown by source and location MW Hydro Other Nuclear Coal CCGT Oil & gas TOTAL ren. ST/OCGT Italy 12,690 1,586 - 6,486 5,199 10,767 36,728 Iberia 4,722 1,777 3,318 5,306 5,445 2,905 23,473 Centrel 2,329 27 1,814 806 - - 4,976 SEE 19 1,025(2) - - 406(3)
Slide 28: 1H2014 Group total net production
1H2014 Group total net production1: breakdown by source and location GWh Hydro Other Nuclear Coal CCGT Oil & gas TOTAL ren. ST/OCGT Italy 12,794 3,472 - 16,878 2,566 172 35,882 Iberia 5,536 2,416 12,578 8,622 2,371 2,947 34,470 Centrel 1,897 28 7,050 865 - - 9,840 SEE 29 1,092(2) - - 307(3) - 1,428
Slide 29: 1H2014 Enel Green Power net installed capacity
1H2014 Enel Green Power net installed capacity: breakdown by source and location MW Hydro Geothermal Wind Other TOTAL Europe 1,574 723 3,379 244 5,920 Latam 732 - 551 12 1,295 North America 318 71 1,515 29 1,933 TOTAL 2,624 794 5,445 285 9,148 Enel S.p.A. Investor Relations 28
Slide 30: 1H2014 Enel Green Power net production
1H2014 Enel Green Power net production: breakdown by source and location GWh Hydro Geothermal Wind Other TOTAL Europe 4,100 2,724 4,006 185 11,075 Latam 1,365 - 506 1 1,872 North America 543 219 2,738 24 3,524 TOTAL 6,008 2,943 7,310 210 16,471 Enel S.p.A. Investor Relations 29
Slide 31: Group EBITDA: regulated/unregulated activities
Group EBITDA: regulated/unregulated activities 1H 2014 EBITDA recurring Stability and high visibility 7,746 €mn 11% 47% 42% Forward sales and hedging procurement Unregulated contracts to protect Regulated margin Enel Green Power Enel S.p.A. Investor Relations 30
Slide 32: Enel's long-term debt maturity profile
Enel’s long-term debt maturity profile (€mn) Endesa Enel Group (excluding Endesa) 29,552 3,306 Bonds 4,844 Bank loans and others 1,940 26,246 7,662 6,784 6,243 497 692 4,964 982 899 760 7,165 6,092 301 5,261 4,204 598 <12m 2H15 2016 2017 2018 After 2018 6 years and 8 months Average cost of gross deb
Slide 33: Enel Group liquidity analysis
Enel Group liquidity analysis (€mn) Amount Outstanding Available (1) Committed credit lines 15,943 1,131 14,812 Cash and cash equivalents - (7,044) 7,044 Total 15,943 (5,913) 21,856 Uncommitted lines 862 84 778 Commercial paper 9,293 2,503 6,790 Total liquidity 26,098 (3,326) 29,424 Enel S.p.A. Inve
Slide 34: Debt structure
Debt structure1 • Average debt maturity: 6 years and 8 months • Average cost of gross debt2: 5.0% • (Fixed+hedged)/Total gross long-term debt: 81% • Rating: Standard&Poor’s = BBB/A-2 Stable Outlook Moody’s = Baa2/P-2 Negative Outlook Fitch = BBB+/F2 Stable December 31, June 31, €mn % 2013 2014 Long-
Slide 35: Enel's group financial debt evolution
Enel’s group financial debt evolution1 Enel Group (excluding Endesa) Endesa Group - Total €mn 12.31.2013 06.30.2014 12.31.2013 06.30.2014 06.30.2014 Bank loans – maturities > 12m 6,340 6,551 1,533 1,059 7,610 Bonds – maturities > 12m 37,924 36,217 3,559 3,823 40,040 Preference shares > 12m - - - - -
Slide 36: Enel's group financial debt by subsidiary
Enel’s group financial debt by subsidiary1 €mn Enel SpA Endesa EFI2 EIH2 Slovenské EP2 ED2 Other Total Bonds 19,493 4,143 20,967 298 - - - (17) 44,884 Bank loans - 1,252 - - 1,477 474 3,160 2,906 9,269 Other loans (3) (2,538) - - (847) (298) (935) 160 (4,461) Commercial paper - 432 2,069 - - - - (1)
Slide 37: Enel's group financial debt
Enel’s group financial debt Average cost of net debt Average cost of gross debt Average residual maturity (years:months) 6.2% 6.5% 6.1% 6:11 6:11 6:8 4.8% 4.9% 5.0% 2012 2013 1H 2014 2012 2013 1H 2014 2012 2013 1H 2014 Net financial debt (€bn) Fixed + Hedged Fixed + Hedged /Total net debt /Total gro
Slide 38: Enel's long-term debt maturity profile
Enel’s long-term debt maturity profile (€mn) Enel Group (excluding Endesa) €mn <12m 2H15 2016 2017 2018 After 2018 Bank loans 1,466 394 637 493 973 4,054 Bonds 4,524 158 4,539 3,636 6,108 21,776 Other 102 46 85 75 84 416 Total 6,092 598 5,261 4,204 7,165 26,246 Endesa €mn <12m 2H15 2016 2017 2018 Af
Slide 39: Enel Group liquidity analysis excluding Endesa
Enel Group liquidity analysis excluding Endesa (€mn)1 Amount Outstanding Available Revolving Credit Facility (2015)2 9,440 - 9,440 (3) Other committed credit lines 2,688 1,073 1,615 Total committed credit lines 12,128 1,073 11,055 Other short-term bank debt - uncommitted lines 235 83 152 Total credi
Slide 40: Endesa liquidity analysis
Endesa liquidity analysis (€mn)1 Amount Outstanding Available Total committed credit lines 3,815 58 3,757 Other short-term bank debt – uncommitted lines 627 1 626 Total credit lines 4,442 59 4,383 Commercial paper issued by the Endesa Group 3,293 432 2,861 Total credit lines + CP 7,735 491 7,244 Cas
Slide 41: Capex by business area
Capex by business area (€mn)1 +6.1% 2,485 2,343 16 -36.0% 25 641 +17.6% 545 Other2 Enel Green Power 796 846 +6.3% Iberia & Latam International Infrastructure & 376 422 +12.2% Networks Market 483 455 -5.8% Generation & Energy 24 43 Management +79.2% 94 62 -34.0% 1H13 1H14 restated Enel S.p.A. 1. Cont
Slide 42: EBITDA evolution - Other
EBITDA evolution - Other1 (€mn) >100% +75 111 +6 30 1H13 Services Other 1H14 restated Enel S.p.A. Investor Relations 1. Including Services & Holding, Engineering & Research, upstream gas and nuclear activities 41
Slide 43: Balance sheet
Balance sheet FY13 €mn restated 1H14 % Net financial debt 39,706 43,073 +8.5 Shareholders’ equity 52,832 52,874 +0.1 Net capital employed 92,538 95,947 +3.7 Enel S.p.A. Investor Relations 42
Slide 44: Generation & Energy Management - Italy
Generation & Energy Management - Italy 1H13 €mn 1H14 % restated Revenues 12,100 10,278 -15.1 EBITDA 628 735 +17.0 EBIT 394 508 +28.9 Capex 94 62 -34.0 (1) Headcount 5,621 5,589 -0.6 Enel S.p.A. Investor Relations 1. As of December 31st, 2013 43
Slide 45: Market - Italy
Market - Italy 1H13 €mn 1H14 % restated Revenues 8,712 7,848 -9.9 EBITDA 477 538 +12.8 EBIT 190 257 +35.3 Capex 24 43 +79.2 (1) Headcount 3,687 3,688 - Enel S.p.A. Investor Relations 1. As of December 31st, 2013 44
Slide 46: Infrastructure & Network - Italy
Infrastructure & Network - Italy 1H13 €mn 1H14 % restated Revenues 3,784 3,720 -1.7 EBITDA 1,966 2,118 +7.7 EBIT 1,479 1,626 +9.9 Capex 483 455 -5.8 (1) Headcount 17,689 18,867 +6.7 Enel S.p.A. Investor Relations 1. As of December 31st, 2013 45
Slide 47: International
International 1H13 €mn 1H14 % restated Revenues 3,102 2,622 -15.5 EBITDA 509 505 -0.8 EBIT 208 313 +50.5 Capex 376 422 +12.2 (1) Headcount 11,439 11,091 -3.0 Enel S.p.A. Investor Relations 1. As of December 31st, 2013 46
Slide 48: Iberia & Latam
Iberia & Latam 1H13 €mn 1H14 % restated Revenues 15,515 14,373 -7.4 EBITDA 3,566 2,982 -16.4 EBIT 2,148 1,625 -24.3 Capex 796 846 +6.3 (1) Headcount 22,541 22,832 +1.3 Enel S.p.A. Investor Relations 1. As of December 31st, 2013 47
Slide 49: Enel Green Power
Enel Green Power 1H13 €mn 1H14 % restated Revenues 1,471 1,365 -7.2 EBITDA 967 889 -8.1 EBIT 699 618 -11.6 Capex 545 641 +17.6 (1) Headcount 3,469 3,521 +1.5 Enel S.p.A. Investor Relations 1. As of December 31st, 2013 48
Slide 50: Other (1/2)
Other1 (1/2) 1H13 €mn 1H14 % restated Revenues2 909 1,006 +10.7 Holding 146 132 -9.6 Services 681 684 +0.4 Engineering & Research 144 160 +11.1 Upstream 1 82 >100 EBITDA3 30 111 >100 Holding (12) (23) -91.7 Services 52 58 +11.5 Engineering & Research (2) 5 n.m. Upstream (8) 71 n.m. 1. Including Serv
Slide 51: Other (2/2)
Other1 (2/2) 1H13 €mn 1H14 % restated EBIT2 (25) 64 n.m. Holding (17) (27) -58.8 Services & other 4 18 >100 Engineering & Research (4) 3 n.m. Upstream (8) 70 n.m. Capex 25 16 -36.0 Holding 1 1 - Services & other 18 10 -44.4 Engineering & Research 1 1 - Upstream 5 4 -20.0 (3) Headcount 5,896 5,816 -1
Slide 52: EBIT by business area
EBIT by business area (€mn) -1.6% 5,093 5,011 64 n.m. 699 618 -11.6% Other1 1,625 -24.3% 2,148 EGP Iberia & Latam 313 +50.5% International 208 I&N Market 1,626 +9.9% G&EM 1,479 257 +35.3% 190 508 +28.9% 394 -25 1H13 1H14 restated Enel S.p.A. Investor Relations 1. Including Services & Holding, Engine
Slide 53: 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 54: Contact us
Contact us Investor Relations Team (investor.relations@enel.com) • Luca Torchia +39 06 8305 3437 Head of IR • Elisabetta Ghezzi +39 06 8305 2708 IR Coordination and Outbound communication • Marco Donati +39 06 8305 9252 Inbound communication • Matteo Cavadini +39 06 8305 2326 Staff • Federica Dori +