Endesa S.a. · BME:ELE

Endesa — 9M 2018 Earnings Presentation

24 slides from Endesa's earnings presentation, Nov 5, 2018

1. Slide 1: Endesa 9M 2018 Results

   Endesa 9M 2018 Results 05/11/2018

2. Slide 2: Highlights

   Highlights Sound performance of the liberalized business EBITDA (+23%) in a context of normalization of market conditions Stable contribution of regulated businesses Overall EBITDA increased by 10% in the period Flat adjusted fixed costs evolution absorbing inflation and growth Sound Net Income grow

3. Slide 3: Financial results

   Financial results €M 9M 2018 9M 2017 Change Revenues 15,353 14,824 4% Gross Margin 4,271 4,006 7% EBITDA 2,791 2,548 10% EBIT 1,644 1,476 11% Net attributable (1) income 1,193 1,085 10% Net Capex (1) 735 472 56% Cash Flow from Operations 1,141 1,375 -17% 30.09.2018 31.12.2017 Net financial debt 6,64

4. Slide 4: Market context in 9M 2018

   Market context in 9M 2018 Demand (1) Electricity wholesale prices Average pool prices Spain (€/MWh) Spain(2) Endesa distribution area(3) +10% (Not adjusted) Industry -4.9% 65.8 50.3 48.1 52.0 55.4 1.1% 0.9% Services +2.3% Residential +1.4% -0.2% 9M 2017 1Q 2018 2Q 2018 3Q 2018 9M 2018 -0.4% Adjusted

5. Slide 5: Endesa's performance in 9M 2018 market context

   Endesa’s performance in 9M 2018 market context Power operational highlights (1) (1) Output (GWh) Electricity sales (GWh) Number of electricity customers (thous.) -5% -7% -1% 58,241 55,548 80,190 74,772 9,821 11,489 10,848 10,754 9,615 10,880 -5% 2,533 2,732 14,397 14,642 +2% -3% 21,722 17,879 5,255

6. Slide 6: Liberalized business

   Liberalized business Energy management Energy (TWh) Unitary values breakdown (€/MWh) -7% (1) Sales 66.4 65.8 61.9 Unitary revenue 60.1 Energy purchases 18.0 -11% 16.0 40.3 -5% Unitary variable cost(2) 39.7 Mainland output 48.4 45.9 Unitary margin 20.4 +25% 25.5 9M 2017 9M 2018 9M 2017 9M 2018  Soun

7. Slide 7: Endesa's performance in 9M 2018 market context

   Endesa’s performance in 9M 2018 market context Gas operational highlights Sales (GWh) Number of gas customers (thous.) -1% +2% 73,663 73,180 1,594 1,560 6,460 7,700 246 235 14,706 11,747 Unitary margin (1): 9M 2017 9M 2018 €0.6/MWh €1.5/MWh 53,733 1,314 1,359 52,497 YTD Demand increase: 1.7% 9M 2017

8. Slide 8: Gross margin evolution

   Gross margin evolution Gross margin net of one offs +7% % Chg. % Chg. +10% Margin Margin €M 4,006 4,271 4,271 Reported Adjusted 3,871 114 135 295 -9 1,870 1,870 +13% +19% 1,658 1,575 One offs 9M17 Gx+Sx Social tariff: €142 M 538 486 477 477 -11% -2% MtM gas&others : -€79 M SCVP: €20 M Non mainland G

9. Slide 9: Regulated business

   Regulated business Gross margin evolution +2% €M +5% (1) 2,348 2,296 2,401 2,401 114 -9 477 477 Non-mainland Gx 538 486 Dx 1,810 1,810 1,924 1,924 Reported 9M Adjusted 9M Dx Non-mainland Adjusted 9M Reported 9M 2017 2017 Gx 2018 2018  Regulated gross margin driven by Distribution regulated revenues

10. Slide 10: Liberalized business

    Liberalized business(1) Gross margin evolution +13% €M +19% 72 15 1,870 1,870 1,658 1,575 (2) 209 88 88 73 107 107 73 36 EGPE: 191 EGPE: 188 1,628 1,675 1,675 1,466 -43 Reported 9M 2017 Adjusted 9M 2017 Electricity + Others Gas Endesa X Adjusted 9M 2018 Reported 9M 2018 Electricity and others Gas En

11. Slide 11: Fixed costs evolution

    Fixed costs evolution +2% €M 0%(1)(2) 1,458 1,358 1,480 (1) 1,359 122 (2) 99 Personnel 673 704 687 -1% 679 costs 0% O&M costs 933 921 820 824 Capitalized costs -148 -148 -145 -145 9M 2017 9M 2017 9M 2018 9M 2018 Reported Adjusted Adjusted Reported  Flat fixed costs evolution absorbing inflation and

12. Slide 12: EBITDA evolution

    EBITDA evolution EBITDA net of one offs +10% % Chg. % Chg. +16% Ebitda Ebitda €M 2,791 2,791 Reported Adj 2,548 135 2,413 132 268 - 22 EGPE: 130 985 985 +23% +37% 800 One offs 9M17 EGPE: 124 (Gestinver ~€8 M) 717 Gx+Sx Social tariff: €142 M 286 286 -21% -7% 360 308 MtM gas&others : -€79M SCVP: €20 M

13. Slide 13: From EBITDA to Net Income

    From EBITDA to Net Income €M -1,147(1) -106 +1 2,791 -340 -6 1,644 1,539 1,193 EBITDA Depreciation EBIT Net Financial Associates Profit before Taxes Minorities Net and Results and Others taxes attributable amortization Income (2) 11% 9M 2017 2,548 -1,072 1,476 -94 12 1,394 -302 -7 1,085 Change (%) +

14. Slide 14: Net financial debt analysis

    Net financial debt analysis Net debt / 1.4x 1.8x EBITDA ratio 6,640 €M Regulatory working 1,077 capital (2) 1,470 4,985 Regulatory working capital 530 - 1,141 1,326 5,563 4,455 FY 2017 Cash flow from Capex(1)(€957 M€) Dividends 9M 2018 operations + Others(3)  Dividend payments and regulatory workin

15. Slide 15: Gross financial debt structure

    Gross financial debt structure As of 9M 2018 Gross and net debt Structure of Endesa's gross debt €M 6,846 206 6,846 6,846 5,392 407 Floating 48% 6,640 Euro 100% 4,985 Fixed 52% FY 2017 9M 2018 By interest rate By currency Net debt Cash & Derivatives recognized as financial assets  Average cost of d

16. Slide 16: Final Remarks

    Final Remarks Continuous delivery on strategic plan and fully committed with the Energy Transition initiatives Strong EBITDA evolution supported by the very good performance of our liberalized business Constant effort on fixed cost contention Slight improvement in the EBITDA guidance A floor for 201

17. Slide 17: Appendix

    Appendix Endesa 9M 2018 Results 17

18. Slide 18: Endesa: financial debt maturity calendar

    Endesa: financial debt maturity calendar Gross balance of maturities outstanding at 30 September 2018: €6,840 M(1) Bonds and other marketable securities (2) Bank Debt Other debts 4,531 3,392 Endesa's liquidity covers 38 1,240 20 months of 7 701 debt maturities 50 1,195 30 1,121 53 21 124 244 671 210

19. Slide 19: Installed capacity and output

    Installed capacity and output Total output(1) (GWh) Total output (GWh) -5% GWh 9M 2018 (and chg. vs. 9M 2017) Total Output (1) 58,241 55,548 Total 55,548 -5% 9,821 Hydro 6,864 64% 9,615 Nuclear 18,458 -8% 5,852 3,907 Coal 15,900 -11% 10,683 10,448 Natural gas 6,513 -22% 5,187 3,524 Oil-gas 5,081 -4%

20. Slide 20: Endesa: 9M 2018 P&L

    Endesa: 9M 2018 P&L Gx+Sx Dx Structure Adjustments TOTAL Income 13,442 2,069 431 -589 15,353 Procurements and services -11,010 -145 -60 133 -11,082 Gross margin 2,432 1,924 371 -456 4,271 Self-constructed assets 33 102 10 0 145 Personnel expenses -396 -191 -129 12 -704 Other fixed operating expenses

21. Slide 21: Endesa: 9M 2017 P&L

    Endesa: 9M 2017 P&L Gx+Sx Dx Structure Adjustments TOTAL Income 13,049 1,923 409 -557 14,824 Procurements and services -10,916 -113 85 126 -10,818 Gross margin 2,133 1,810 494 -431 4,006 Self-constructed assets 25 108 15 0 148 Personnel expenses -353 -200 -131 11 -673 Other fixed operating expenses

22. Slide 22: Glossary of terms (I/II)

    Glossary of terms (I/II) Reference note (#) of Consolidated Item Calculation Management Report Cost of gross financial debt / gross average financial debt: (€92 M x (365/270) + €3 M) / €6,666 Average cost of debt (%) 4.1 M = 1.9% (Principal x number of days of term) / (Principal in force at the end

23. Slide 23: Glossary of terms (II/II)

    Glossary of terms (II/II) Reference note (#) of Consolidated Item Calculation Management Report Long and short term financial debt (€5,514 M + €1,332 M) - Cash and cash equivalents (€199 M) Net financial debt (€M) 4.1 – Derivatives recognized as financial assets (€7 M) = €6,640 M Financial Revenues

24. Slide 24: 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

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