Slide 1: Investor Presentation December 2016
Investor Presentation December 2016
Slide 2: Enel today: global and diversified operator
Investor presentation Enel today: global and diversified operator1 40 €bn Regulated Asset Base 62 mn distribution end users 48 GW thermal capacity #1 in Italy, Spain, Chile, Peru Highly flexible and #2 in Argentina, Colombia efficient generation fleet 17.5 mn free retail customers 36 GW renewab
Slide 3: Enel today: global and diversified operator
Investor presentation Enel today: global and diversified operator1 North & Central America Italy Iberia Europe 54% 54% 46% 19% 16% 0.8 €bn 6.6 €bn 3.5 €bn 0.6 €bn 5% 44% 23% 4% 27% 11% 100% 17% 19% 35% 2% Latin America 2016E Group EBITDA 3% 35% 46% 16% 3.6 €bn 15 €bn 24% 14% 48% Networks Renewables
Slide 4: Enel today: global and diversified renewable operator
Investor presentation Enel today: global and diversified renewable operator Old Large Key figures 2016 perimeter hydro Capacity1 (GW) 35.7 10.9 24.8 Production (GWh) 92.4 37.4 55.0 Old Large Key financials (€bn) 2016 perimeter hydro EBITDA 4.2 2.0 2.2 Opex 1.4 0.8 0.6 Maintenance capex 0.4 0.2 0.2 C
Slide 5: Organizational structure
Investor presentation Organizational structure L. Gallo F. Venturini E. Viale C. Machetti Global Global Global Global Infrastructure Renewable Thermal Trading & & Networks Energies Generation Upstream Gas Italy C. Tamburi J. D. Bogas Iberia Galvez Customers Best practices implementation Europe &
Slide 6: 2017-2019 strategic plan
Investor presentation 2017-2019 strategic plan Digitalization Industrial pillars ESG pillars Operational efficiency Engaging the local communities Industrial growth Engaging the people we work with Group simplification Aiming at operating efficiency and innovation Active portfolio management Decarbo
Slide 7: A sustainable strategy
Investor presentation A sustainable strategy United Nations Sustainable Development Goals (SDGs) Enel commitments to the global SDGs 400,000 people by 2020 3 million people, mainly in Africa, Asia and Latin America by 2020 1.5 million people by 20201 < 350 gCO2 /kWheq by 2020 1. Target upgraded from
Slide 8: Strategic plan: key operating figures by business line
Investor presentation 2017-19 strategic plan: key operating figures by business line Networks Retail Thermal generation Renewables Free market Installed capacity3 (GW) Managed capacity (GW) End users (mn) customer base1 (mn) Consolidated capacity (GW) Smart meters (mn) Large hydro (GW) 55. 0 41.6 48
Slide 9: Strategic plan: key financials by business line
Investor presentation 2017-19 strategic plan: key financials by business line Networks Retail Thermal generation Renewables EBITDA CAGR1 +4.7% EBITDA CAGR1 +7.2% EBITDA CAGR1 +2% EBITDA CAGR1 +3.3% 8.0 0 20. 00 35. 00 18. 00 18. 00 16. 00 7.0 0 30. 00 16. 00 14. 00 6.0 0 25. 00 14. 00 12. 00 5.0 0 1
Slide 10: Strategic plan: Enel transformation and 2019 targets
Investor presentation 2017-19 strategic plan: Enel transformation and 2019 targets Profitability & cash generation Leverage Returns 0.7 90% 4.5 0 30% 0.4 12% 10.4 10.5 12% 12% 80% 4.0 0 25% 0.3 % % 0.6 11% 11% >60% >60% 70% 3.5 0 20% 0.3 0.5 50% 60% 3.0 0 0.2 11% 12% 11% 10% 0.4 10% 50% 2.5 0 0.2 10
Slide 11: Strategic plan: operational efficiency
Investor presentation 2017-19 strategic plan: operational efficiency Opex evolution1 Opex by business3 -4% Networks -9% €/end user 49.5 47.7 2016 2019 0.1 (0.5) -17% 0.6 Retail 18. 0 16. 0 (1.0) 14. 0 16.0 12. 0 13.3 10. 0 Cost to serve 8.0 6.0 4.0 2.0 - (€/customer) 8.6 2016 2019 0.5 €bn from 7.8 -
Slide 12: Strategic plan: industrial growth
Investor presentation 2017-19 strategic plan: industrial growth 2017-19 growth capex In execution by geography In execution by business By year By COD1 2% 12% 2017 53% 2017 41% 5% 26% 54% 43% 2018 31% 12.4 €bn 6.6 €bn 6.6 €bn 53% 2018 27% 10% 2019 17% 42% 45% 2% 2019 20% >2019 11% 2% 4% In execution
Slide 13: Strategic plan: focus on growth EBITDA
Investor presentation 2017-19 strategic plan: focus on growth EBITDA 2017-19 growth capex by business 2017-19 cumulated growth EBITDA Growth EBITDA by year (€bn) 37% 3 2.6 42% 6% 27% 2.5 5% 1.9 2 12.4 €bn 55% 4 €bn 1.4 3% 1.9 45% 1.5 1% 1.3 15% 1 0.8 47% 17% 0.5 0.8 0 Networks Renewables Networks Re
Slide 14: Strategic plan: focus on growth in renewables
Investor presentation 2017-19 strategic plan: focus on growth in renewables 8.0 8.0 7.0 7.0 Pipeline by geography Consolidated capacity additions1 (GW) BSO2 capacity additions (GW) 6.0 6.0 23% 5% 5.0 5.0 6% 4.0 4.0 0.5 15% 0.2 21 GW 3.0 3.5 3.0 1.8 3.2 3% 2.0 2.8 2.0 48% 1.0 1.0 1.4 0.0 0.0 Italy I
Slide 15: Strategic plan: focus on the Build Sell & Operate model
Investor presentation 2017-19 strategic plan: focus on the Build Sell & Operate model (BSO)1 0.9 12 0.8 10 Renewable capacity additions 2017-19 (GW) BSO model benefits Rationale 0.7 Average unit capex 1.4 €mn/MW 0.6 8 0.5 6 3.2 6.7 0.4 Average increase of 4 0.3 200 bps on project return 3.5 0.2 2 0
Slide 16: Strategic plan: financial strategy
Investor presentation 2017-19 strategic plan: financial strategy 2015-16 actions completed 2017-19 financial strategy ~8 €bn bonds repayment ~12.4 €bn bond refinancing including green bonds program ~3.5 €bn liability management ~1.2 €bn subsidized financing ~2.4 €bn emerging market funding Increasin
Slide 17: Financial strategy: Green Bond Program
Investor presentation 2017-19 financial strategy: Green Bond Program Rationale Provide an ideal tool to finance the transition to a low carbon economy Diversify Enel’s investor base targeting investments towards environmentally friendly projects Top focus on SRI investors, already representing 7.7%
Slide 18: Strategic plan: application of Green Bond principles
Investor presentation 2017-19 strategic plan: application of Green Bond principles Use of proceeds Evaluation and selection Management of Reporting Proceeds Renewable Energy Projects Setting up of Green Bond Eligible projects financed via Annually until full allocation committee intercompany loans t
Slide 19: Green bond program: Dominica (example of eligible project)
Investor presentation Green bond program: Dominica (example of eligible project) CSV1 project specifications CSV1 business issue CSV1 actions Value created for stakeholders Plant: 200 MW wind farm in Deforestation caused by the Reforestation involving more Reforestation of affected areas ope
Slide 20: Green bond program: Adams (example of eligible project)
Investor presentation Green bond program: Adams (example of eligible project) CSV1 project specifications CSV1 business issue CSV1 actions Value created for stakeholders Plant: 82.5 MW solar Wooden pallets collected and Adams solar installation host Development of new skills installation cur
Slide 21: Strategic plan: financial strategy
Investor presentation 2017-19 strategic plan: financial strategy Gross and net debt (€bn) Net financial expenses on debt (€bn) -1% -12% 5.0% 4.0 4.7% 3.5 5.0 % ~49.2 ~49.5 ~49.5 ~48.5 3.0 ~6.5 ~6.5 4.5 % ~7.0 ~6.0 2.5 ~5.0 ~5.0 ~5.0 ~5.0 2.5 2.4 4.0 % 2.3 2.0 1.5 2.2 3.5 % ~37.2 ~38.0 ~38.0 ~37.5 1.
Slide 22: Strategic plan: financial strategy
Investor presentation 2017-19 strategic plan: financial strategy Gross debt breakdown Cost of gross debt 2016 2019 Hybrid bonds 6.4% 6.5% 100% 9% 8% 90% 12% 14% 80% Emerging markets2 9.9% 9.6% 70% 22% 21% 60% 50% Banks and other 1.6% 1.6% 40% 30% 56% 57% 20% 10% Bonds1 5.1% 4.4% 0% 2016 2019 Average
Slide 23: Debt maturity coverage split by typology
Investor presentation Debt maturity coverage split by typology (€bn)1 < 3Q 2017 3Q 2017 2018 2019 2020 >2020 69% Short term2 3.6 - - - - - 20.4 €bn Bank Loans and 1.1 1.1 1.1 1.1 1.2 5.3 other 31% Bonds 3.6 0.3 5.5 4.2 2.4 19.3 Available committed credit lines 3 Cash Total 8.3 0.4 6.8 5.3 3.6 24.6 1
Slide 24: Strategic plan: cumulated cash flow
Investor presentation 2017-19 strategic plan: cumulated cash flow (€bn) 60. 0 ~(3.5) - 50. 0 ~(7.0) ~49.0 40. 0 ~(7.0) ~(8.6) 30. 0 ~31.5 ~(11.9) 20. 0 ~22.9 ~(10.3) 10. 0 ~11.0 ~2.5 ~4.0 ~0.7 0.0 Ordinary ∆ Provisions1 ∆ NWC Income Financial FFO Maintenance FFO after Net FCF Dividends Net FCF Cash-
Slide 25: Strategic plan: Group targets
Investor presentation 2017-19 strategic plan: Group targets CAGR (%) 2016 2017 2018 2019 2016-19 Ordinary EBITDA (€bn) 15.0 15.5 16.2 17.2 ~+5% Net ordinary income (€bn) 3.2 3.6 4.1 4.7 ~+14% Minimum dividend per share (€) 0.18 0.21 - - ~+22% Pay-out ratio 55% 65% 70% 70% +15 p.p. FFO/Net De
Slide 26: Closing remarks
Investor presentation Closing remarks Strategy relies on a sustainable business model Digitalization and customer focus enable solid growth Underlying sound platform thanks to solid financial structure Plan fosters long-term shared value creation for all stakeholders 25
Slide 27: Annexes
Investor presentation Annexes
Slide 28: Sustainability plan: engaging the local communities
Investor presentation - annexes Sustainability plan: engaging the local communities Related SDGs Industrial actions Related targets/commitments Access to affordable, sustainable and 3 mn people, mainly in Africa, Asia and modern energy Latin America by 2020 Employment and sustained, inclusive and 1.
Slide 29: Sustainability plan: engaging the people we work with
Investor presentation - annexes Sustainability plan: engaging the people we work with Related SDGs Industrial actions Related targets/commitments Appraise performance of all employees 2020: 100% of eligible employees involved having worked for at least 3 months in the 2020: 99% of TP1 appraised Grou
Slide 30: Sustainability plan: aiming at operating efficiency and innovation
Investor presentation - annexes Sustainability plan: aiming at operating efficiency and innovation Related SDGs Industrial actions Related targets/commitments Large scale infrastructure innovation: storage, electric vehicles, grid digitization +18 mn smart meters rolled out by 2019 and smart meters
Slide 31: Sustainability plan: decarbonizing the energy mix
Investor presentation - annexes Sustainability plan: decarbonizing the energy mix Related SDGs Industrial actions Related targets/commitments +~8 GW of additional renewable capacity Development of renewable capacity by 20191 Reduction of thermal capacity -16 GW by 2019 Specific CO2 emissions reduct
Slide 32: Sustainability plan: mitigation of other environmental impacts
Investor presentation - annexes Sustainability plan: mitigation of other environmental impacts Related SDGs Industrial actions Related targets/commitments Reduction of SO2 specific emissions -30% by 2020 (vs 2010) Reduction of NOx specific emissions -30% by 2020 (vs 2010) Reduction of particulates s
Slide 33: Sustainability plan: digitalization and related risks
Investor presentation - annexes Sustainability plan: digitalization and related risks (Cyber Security framework) Framework highlights Cybersecurity related targets/commitments Asset 100% of internet web applications Single strategy approach based on protected through advanced cybersecurity business
Slide 34: Futur-e
Investor presentation - annexes Futur-e 23 13GW Power Plants total power to be involved decommissioned Two requalified plants: Porto Marghera and Assemini 11 GW already shut-down 5 ‘calls for projects’ processes launched in 2016 3 additional processes to be launched in 2017 Two sale processes at an
Slide 35: Capex program
Investor presentation - annexes 2017-19 strategic plan: capex program Total capex (€bn) Growth capex by business line (€bn) Growth capex by geography (€bn) 25 21.2 20.9 14 12.7 12.4 14 12.7 12.4 0.3 20 12 0.5 0.6 12 1.5 95% 0.8 95% 1.5 10 10 1.1 0.5 12.7 1.2 0.5 15 12.4 8 7.3 -29% 5.2 8 4.8 10 6 6
Slide 36: EBITDA targets by Country and Global Business Line
Investor presentation - annexes 2017-19 strategic plan: EBITDA targets by Country and Global Business Line (€bn) 2016 2017 2018 2019 Italy 6.6 6.8 7.1 7.5 Global Thermal Generation 0.1 (0.1) (0.1) 0.1 Global I&N 3.6 3.5 3.6 3.8 Global Renewable Energies 1.1 1.2 1.4 1.3 Retail 1.8 2.0 2.1 2.1 Service
Slide 37: EBITDA targets new vs old perimeter
Investor presentation - annexes 2017-19 strategic plan: EBITDA targets new vs old perimeter (€bn) Global Renewables Energies 2016 2017 2018 2019 Global Global Global Global Large Large Large Large EGP1 Renew able EGP1 Renew able EGP1 Renew able EGP1 Renew able Hydro Hydro Hydro Hydro Energies Energi
Slide 38: Capex plan 2016-19
Investor presentation - annexes 2017-19 strategic plan: Capex plan 2016-19 (€bn) 2016 2017 2018 2019 Growth Maintenance Growth Maintenance Growth Maintenance Growth Maintenance Italy 0.6 1.3 0.8 1.2 1.1 1.2 0.9 1.2 Global Thermal Generation 0.0 0.1 0.0 0.1 0.0 0.1 0.0 0.1 Global I&N 0.4 0.9 0.6 0.9
Slide 39: Gross debt structure
Investor presentation - annexes Gross debt structure1 Long term debt by currency Long term debt by currency after swap Interest rate composition 57% 82% 24% 46.2 €bn 2% 46.2 €bn 11% 4% 2% 76% 4% 21% 3% 7% 4% 1% 2% EUR USD BRL CLP EUR USD BRL Floating Fixed + Hedged COP Other GBP CLP COP Other 1. As
Slide 40: Debt structure by instrument
Investor presentation - annexes Debt structure by instrument (€bn)1 North & Central Europe & Sub-Saharan Debt by instrument Enel Spa EFI Italy Iberia Latam Central Total Others North Africa Africa & Asia America Bonds 13.34 17.54 0.30 - 0.10 3.64 - 0.14 - 35.06 Bank Loans 0.05 - 0.67 3.95 0.71 1.92
Slide 41: Disclaimer
Investor presentation 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
Slide 42: Contact us
Investor presentation Contact us Luca Passa Head of Group Investor Relations Elisabetta Ghezzi Investor Relations Holding Donatella Izzo Investor Relations Sustainability and Other Countries Email Marco Donati investor.relations@enel.com Investor Relations Reporting and Corporate Governance Phone +3