Slide 1: Endesa 1H 2017 Results
Endesa 1H 2017 Results 26/07/2017
Slide 2: Agenda
1. Highlights and key financial figures 2. Endesa’s performance in 1H 2017 market context 3. Financial results 4. Final remarks 1H 2017 Results- Madrid, 26 Jul 2017 2
Slide 3: Highlights and key financial figures
1. Highlights and key financial figures 2. Endesa’s performance in 1H 2017 market context 3. Financial results 4. Final remarks 1H 2017 Results- Madrid, 26 Jul 2017 3
Slide 4: Significant improvement of 2Q liberalized business vs. 1Q
Significant improvement of 2Q liberalized business vs. 1Q despite unfavorable market conditions Positive evolution of the regulated business EGPE key strategic contribution EGPE awarded with 540 wind MWs in the last RW capacity auction Flat like-for-like(1) fixed costs New cost and margin action pla
Slide 5: Key financial figures
Key financial figures €M 1H 2017 1H 2016 Change Like-for-like EBITDA 1,605 1,866 -14% -19%(1) Net attributable income 653 796 -18% -27%(2) Cash flow from operations (CFO) 675 1,470 -54% 30.06.2017 31.12.2016 Change Net financial debt 5,614(3) 4,938 +14% 2Q 17 Results improvement vs. 1Q 17 (~+30% a
Slide 6: Endesa's performance in 1H 2017 market context
1. Highlights and key financial figures 2. Endesa’s performance in 1H 2017 market context 3. Financial results 4. Final remarks 1H 2017 Results- Madrid, 26 Jul 2017 6
Slide 7: Market context in 1H 2017
Market context in 1H 2017 Demand Electricity wholesale prices Spain(1) Endesa distribution area(2) Average pool prices Spain (€/MWh) +2.6% (Not adjusted) +2.3% +70% +1.5% Industry +3.3% +1.1% Services +2% 55.6 €/MWh in 1Q 51.3 2017 Residential +2.7% 30.1 1H 2016 1H 2017 Adjusted for weather and work
Slide 8: Energy management
Endesa’s performance in 1H 2017 market context Energy management Output(1) (GWh) Electricity sales(1) (GWh) 37,678 +4% 50,975 +24% 49,224 1,814 30,450 6,263 7,767 8,086 Unitary integrated 3,539 3,887 5,938 margin: 8,920 9,348 13,414 6,677 +101% €21.4/MWh 6,387 6,628 (-10% vs. 1H 2016) Hydro -38% 17,
Slide 9: Renewables auctions
Endesa’s performance in 1H 2017 market context Renewables auctions New RW capacity auction: May 2017 RW capacity auction: To be held today, 26th July Capacity auction closed at maximum discount to Up to 3,000 MW of capacity to be awarded. Limited standard values to wind and photovoltaic te
Slide 10: Financial results
1. Highlights and key financial figures 2. Endesa’s performance in 1H 2017 market context 3. Financial results 4. Final remarks 1H 2017 Results- Madrid, 26 Jul 2017 10
Slide 11: Financial results
Financial results (1) (2) (3) EBITDA evolution: (-) Liberalized electricity business impacted by challenging market conditions (-) Liberalized gas business impacted by MtM&Others effect and ordinary margin deterioration (+) EGPE contribution (+) Previous years’ positive settlements in non mainland G
Slide 12: 1H 2017 EBITDA breakdown
1H 2017 EBITDA breakdown 1H 2016 1H 2017 % €M Change (%) €M % EGPE: 96 Generation & Supply(1) 728 -41% 433 27% Generation & Supply(1) 39% 236 15% Non-mainland Gx(2) Non-mainland Gx(2) 10% 186 +27% 936 58% Distribution Distribution 952 -2% 51% EBITDA 1H 2017 EBITDA 1H 2016 TOTAL 1,866 -14% 1,605 TOTA
Slide 13: Regulated business
Regulated business Gross margin evolution +4% €M 1,589 1,533 59 Non-mainland generation(1) -3 365 306 Distribution 1,227 1,224 (1) 1H 2016 Gross Margin Dx Non-mainland Gx 1H 2017 Gross Margin Stable regulated gross margin with non-mainland Gx benefitting from previous years’ positive settlements 1
Slide 14: Liberalized business
Liberalized business(1) Gross margin evolution -21% €M 1,303 -80 1,035 -58 -130 1H 2016 Electricity + Gas (underlying)(2) Gas (MtM&Others) 1H 2017 Gross Margin Others Gross Margin Lower integrated unitary margin in the liberalized electricity business (with slight increase in Favorable ruling on
Slide 15: Liberalized business: 1H 2017 energy management
Liberalized business 1H 2017 energy management Energy (TWh) Unitary values breakdown (€/MWh) 43.2 60.1 Sales 41.1 Unitary revenue 58.8 Energy 11.8 purchases 16.6 Unitary variable cost(1) 35.0 38.7 EGPE: 1.8 Mainland 31.4 18.7 ex output 24.5 -10% EGPE Unitary margin 23.8 21.4 (-21% l-f-l)(3) 1H 2016
Slide 16: Fixed costs evolution
Fixed costs evolution +5% €M +1% 986 991 1,019 970 -28 +16 Personnel 452 451 432 448 +1% costs +5% 647 O&M costs 589 589 618 Capitalized costs -51 -51 -79 -79 1H 2016 1H 2016 1H 2017 1H 2017 Reported Adjusted Adjusted Reported Like-for-like(1) fixed costs remained flat (1) Includes pension plans o
Slide 17: From EBITDA to Net Income
From EBITDA to Net Income €M -704 -59 6 1,605 -190 -5 901 848 253 653 EBITDA Depreciation EBIT Net Financial Associates and Profit before Taxes Minorities Net attributable and Results Others taxes Income amortization 11% 1H 2016 1,866 -676 1,190 -101 -48 1,041 -245 0 796 Change (%) -14% +4% -24% -42
Slide 18: Net financial debt analysis
Net financial debt analysis Net financial debt evolution Net debt / (2) 1.4x 1.8x EBITDA ratio 5,614(3) €M 4,938 513 Regulatory working +742 capital(4) -675 +609 4,961 5,101 Regulatory working -23 FY 2016 Cash flow Capex+Others Dividends 1H 2017 capital(4) Net debt Cash flow from Net Capex(1) (€559
Slide 19: Final remarks
1. Highlights and key financial figures 2. Endesa’s performance in 1Q 2017 market context 3. Financial results 4. Final remarks 19
Slide 20: Endesa's contribution to UN Sustainable Development Goals
ENDESA´s contribution to UN Sustainable Development Goals Main actions developed in 1H 2017 > € 1,000 Million to transform the future of energy: Electricity access to all vulnerable customers Digitalization and energy solutions Strong positioning in the last New Business Line to accelerate the energ
Slide 21: Implementation of a new cost and margin action plan
Implementation of a new cost and margin action plan Identified actions Staff and support functions: BPO, reorganization, office space optimization… Costs Supply: Plan to reduce Cost to Serve and Cost to Acquire through digitalization, process simplification and optimization… Retail: B2B and B2
Slide 22: Final remarks: 2017 gross DPS floor of €1.32/share
Significant improvement of 2Q liberalized business vs. 1Q despite unfavorable market conditions Positive evolution of the regulated business Progressing with the EGPE strategic growth plan º L-f-l(1) fixed costs contention as a result of the efficiency plans 2017 targets supported by additional acti
Slide 23: Appendix
Appendix Endesa 1H 2017 Results 23
Slide 24: Installed capacity and output
Installed capacity and output Mainland output(1) (GWh) Total output (GWh) GWh 1H 2017 (and chg. vs. 1H 2016) (1) 31,415 Total Output +28% Total 37,679 24% 1,814 3,052 Hydro 3,091 -38% 24,512 Nuclear 13,096 2% 990 6,573 Coal 11,634 77% 4,796 891 Natural gas 4,692 65% 3,789 Oil-gas 3,352 5% Renewables
Slide 25: Endesa: financial debt maturity calendar
Endesa: financial debt maturity calendar Gross balance of maturities outstanding at 30 June 2017: €6,074 M(1) Bonds Bank debt and others ECPs (2) 4,202 32 Bonds Endesa's 4,170 liquidity covers 1,310 32 months of debt maturities 198 98 246 1,201 15 Bonds 246 109 S22017 198 2. 018 83 2. 019 2. 020 RES
Slide 26: Gross financial debt structure
Gross financial debt structure as of June 30th 2017 Structure of Endesa's gross debt €M 6,074 6,074 Floating 40% Euro 100% Fixed 60% By interest rate By currency Average cost of debt 2.3% 1H 2017 Results- Madrid, 26 Jul 2017 26
Slide 27: Glossary of terms (I/II)
Glossary of terms (I/II) Item Calculation Reference note (#) of Consolidated Management Report Average cost of debt (%) (Cost of gross financial debt) / gross average financial debt: €(69 x 2) M / €5,910 M = 4.1 2.3% Average life of debt (number of years) (Principal x number of days of term) / (Prin
Slide 28: Glossary of terms (II/II)
Glossary of terms (II/II) Item Calculation Reference note (#) of Consolidated Management Report Net financial debt (€M) Long and short term financial debt (€4,748M + €1,326M) - Cash and cash equivalents (€451M) – 4.1 Derivatives recognized as financial assets (€9M) = €5,614 M Net financial results (
Slide 29: 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