Endesa S.a. · BME:ELE
Endesa — Q1 2020 Earnings Presentation
32 slides from Endesa's earnings presentation, May 4, 2020
Slide 1: Endesa Q1 2020 Consolidated results
Endesa Q1 2020 Consolidated results May 04, 2020
Slide 2: COVID-19: Supporting people and communities
COVID-19 Supporting people and communities Our People Our Communities Remote working: ~6,700 total number of people (~75%) Efforts against Covid-19: Public Responsibility Plan 25 €mn fund in equipment and infrastructures: • Donation of materials and services Crisis management: Task Force set up in F
Slide 3: COVID-19: Business continuity management: our assets
COVID-19 Business continuity management: our assets ✓ 100% remote operational management of ✓ Complete remote management of all the activities, renewable assets, from 2 different control centers including call centers (Madrid and Santiago de Compostela), and 100% remote monitoring of conventional ge
Slide 4: COVID-19: Risk assessment
COVID-19 Risk assessment Perceived Risks Mitigation factors Lockdown affecting GDP Business Financial Generation&Supply: Healthy leverage ratios Collapse of demand, • 100% hedged 2020 production commodities and pool prices sold forward, and ~80% of 2021 • Long customer position Limited re-financing
Slide 5: Key highlights of the period
Key highlights of the period EBITDA Extraordinary Sound Steady evolution Net Income increased by impact from new performance of of regulated increases by +21% on a like- collective liberalized business +59% on a like- for-like basis(1) agreement and business for-like basis(2) restructuring provision
Slide 6: Market context in Q1 2020
Market context in Q1 2020 Demand(1) Commodities spot prices(4) Electricity wholesale prices Endesa distribution area(2) (Not adjusted) Average pool prices Spain (€/MWh) -37% -2.7% Industry -3.9% Services -2.8% -3.9% Residential -1.4% Spain(3) 55.0 -3.2% 34.9 -2.8% Q1 2019 Q1 2020 Adjusted for weathe
Slide 7: Power operational highlights
Power operational highlights Mainland output(1), TWh Energy sold, TWh KPIs -13% -4% 14.2 2019 Q1 2020 Var. 24.9 23.9 Renewable(2) 2.6 12.3 3.8 3.5 Free customers 5.8 5.8 -0% 3.7 +44% mn 5.4 5.1 Nuclear Regulated customers 7.1 4.8 4.8 -1% mn 7.2 +2% 15.7 Churn rate (3) Thermal 15.3 11.3% 10.1% -1.2 P
Slide 8: Power operational highlights: Energy management
Power operational highlights Energy management Liberalized sales(1), TWh Power integrated margin(1), €/MWh Output(3) hedged, % -3% 20.4 19.7 Unitary revenue 69.3 68.1 6.2 7.4 40.7 33.8 Variable cost(2) +20% 100% 14.2 80% 12.3 Unitary integrated margin 28.6 34.3 Q1 2019 Q1 2020 Q1 2019 Q1 2020 2020 2
Slide 9: Gas operational highlights
Gas operational highlights Volumes sold(1), TWh Key figures -8% 2019 Q1 2020 Var. Total customers 22.8 1.65 1.65 0% mn Wholesale business 1.8 20.9 2.7 (2) Churn rate (%) 11.0% 10.4% -0.6 PP Retail 20.9 18.2 Unitary margin (3) 1.5 3.6 2.4x €/MWh Q1 2019 Q1 2020 Margin increase due to optimal manageme
Slide 10: Q1 2020 consolidated results: Financial results
Q1 2020 consolidated results Financial results
Slide 11: Financial highlights (€mn)
Q1 2020 consolidated results Financial highlights (€mn) Q1 2020 Q1 2020 Q1 2019 Δyoy ΔLike-for-like Like-for-like (1) EBITDA 1,476 928 +59% 1,120 +21% (2) Net income 844 363 +133% 577 +59% FCF (232) (191) -21% Net debt 7,376 6,377 +16% Net capex (3) 248 357 -31% (4) Net ordinary income 831 363 +129%
Slide 12: Personnel cost extraordinary impacts
Personnel cost extraordinary impacts €mn Personnel provisions Rationale New collective agreement: -159 • +515 €mn provision reversal from the application of new commitments contained in the new collective agreement 515 Workforce restructuring plans: 356 • -159 €mn additional provision recorded for w
Slide 13: Like-for-like EBITDA evolution
Like-for-like EBITDA evolution €mn +21% DYoY DYoY (like-for-like) (reported) (1) 1,120 +21% +59% 185 928 -12 19 550 +51% +96% 365 62 81 +31% +50% 501 489 -2% +33% (2) Q1 2019 Dx Non mainland Gx Gx+Sx Q1 2020 Distribution Non mainland Gx Gx+Sx EBITDA improvement mainly supported by liberalized busine
Slide 14: Regulated business
Regulated business €mn Gross margin EBITDA Regulated margin: 764 €mn (-10 €mn) -1% +1% 774 764 760 • Dx margin: -30 €mn 131 93 151 563 570 62 81 • Non mainland margin: +20 €mn, mainly due to previous years’ 563 62 501 1Q 2019 782 94 688 1Q 2020 643 613 regularizations 667 501 489 Like-for-like fixed
Slide 15: Liberalized business
Liberalized business(1) €mn Gross margin EBITDA Liberalized margin: 850 €mn (+171 €mn) +25% +51% 850 • Electricity&Others margin: 740 €mn 716 82 (+124 €mn) 51 679 550 81 • Gas margin(2): 76 €mn (+41 €mn) 51 365 768 • Endesa X margin: 34 €mn (+6 €mn) 65 665 598 499 Like-for-like fixed costs: 300 €mn
Slide 16: From EBITDA to Net Ordinary Income
From EBITDA to Net Ordinary Income €mn Q1 2020 Q1 2019 Δyoy EBITDA 1,476 928 +59% EBITDA increase +59%, affected by the new collective agreement application D&A (358) (406) -12% EBIT 1,118 522 +114% Net Financial Results (10) (53) -81% Lower D&A coming from the coal impairments booked in 2019 Result
Slide 17: Cash Flow
Cash Flow €mn -356 -55 1,476 -854 74 -9 276 -508 -232 (3) (4) (5) EBITDA Net provision Provisions Working Income Financial FFO Capex FCF (2) release (1) paid capital Taxes Expenses Previous year 928 n.a. -82 -544 36 -3 335 -526 -191 Delta YoY +59% n.a. -33% +57% 2.1x 3.0x -18% -3% +21% (1) Net provi
Slide 18: Net financial debt analysis
Net financial debt analysis €mn Gross debt Net debt evolution 7,376 21 7,574 6,377 746 1,058 198 232 6,607 894 Cash & Derivatives 230 7,376 6,318 Net debt 6,377 5,483 2019 Q1 2020 2019 FCF Dividends Others Q1 2020 Regulatory working capital(1) Net debt ex-regulatory working capital ▪ Cost of Debt 1.
Slide 19: Financial debt maturity calendar
Financial debt maturity calendar €mn Gross balance of maturities outstanding at 31 March 2020(1) ECP’s and other marketable securities (2) Bank Debt Other debts 4,924 3,501 1,514 62 62 676 1,390 183 70 244 1,411 91 0 606 190 54 0 92 0 12 2020 2021 2022 2023 2024+ ▪ Average life of debt: 4.9 years ▪
Slide 20: Final Remarks
Final Remarks Q1 strong Resilience of Strongly committed Confirmed performance integrated & to our people and dividend 1.475 providing comfort for regulated communities €/share proposed to full year targets businesses & against Covid-19 the AGM (1) financial strength 20 1Q 2020 Results - Madrid, 04
Slide 21: Q1 2020 consolidated results: Annexes
Q1 2020 consolidated results Annexes
Slide 22: Installed capacity and output
Installed capacity and output Total net installed capacity, MW Total gross output(1), GWh Q1 2020 FY 2019 Var. (%) Q1 2020 Q1 2019 Var. (%) Mainland 19,049 19,066 -0% 12,374 14,163 -13% Renewables 7,391 7,408 0% 3,737 2,596 44% Hydro 4,748 4,748 0% 2,249 1,483 52% Wind (2) 2,291 2,308 -1% 1,398 1,10
Slide 23: Profitability and credit metrics
Profitability and credit metrics Profitability(1) Return on invested capital Credit metrics +1,700 bps +330 bps -800 bps 56% 15.0% 50% 11.7% 42% 39% 1.7x 1.7x Q1 2019 Q1 2020 2019 Q1 2020 2019 Q1 2020 Net Income/EBITDA ROIC FFO(2)/Net Debt Net debt/EBITDA (1) Calculated on Net Ordinary Income Q1 202
Slide 24: Fixed costs evolution
Fixed costs evolution €mn -387 €mn -74% +24 €mn +5%(1,2,3) 537 525 (1) 513 - 12 Personnel +4% 255 356 (2) costs 258 246 43 (3) 138 O&M costs 305 305 +8% 329 329 Capitalized -38 -38 -47 costs -144 -47 1Q2019 1Q2019 1Q2020 Net provision Other 1Q2020 Reported Adjusted Adjusted release adjustment Report
Slide 25: Headcount
Headcount Year end employees 2019 Q1 2020 9,952 9,943 1,687 1,693 7,573 7,571 893 2,969 892 2,961 2,527 2,522 2,379 5,296 2,372 5,289 4,153 794 4,157 801 442 439 1,143 1,132 Male Female Total Male Female Total Generation & Supply Distribution Structure & others Q1 2020 Results - Madrid, 04 May 2020
Slide 26: Spanish power market
Spanish power market Q1 2020 Customers(1), mn Energy sold(2), TWh 18.4 29.5 54.2 62.0 13.9 30% 34% 21.3 17.5 28.6 11.1 40.2 0.9 24% 40.6 32% 11.1 7.8 7.4 0.0 0.9 0.4 Regulated 44% Free 30% Total Regulated 44% Free 33% Total Residential Business XX% Endesa market share 26 (1) Customers: CNMC “Informe
Slide 27: Endesa: Q1 2020 P&L
Endesa: Q1 2020 P&L €mn Gx+Sx Dx Structure Adjustments TOTAL Income 4,459 656 135 -181 5,069 Procurements and services -3,443 -43 -9 40 -3,455 Gross margin 1,016 613 126 (141) 1,614 Self-constructed assets 15 29 3 0 47 Personel expenses 72 118 -47 1 144 Other fixed operating expenses -304 -93 -72 14
Slide 28: Endesa: Q1 2019 P&L
Endesa: Q1 2019 P&L €mn Gx+Sx Dx Structure Adjustments TOTAL Income 4,454 686 133 -188 5,085 Procurements and services -3,630 -43 -4 45 -3,632 Gross margin 824 643 129 (143) 1,453 Self-constructed assets 7 29 2 0 38 Personel expenses -133 -75 -52 2 -258 Other fixed operating expenses -279 -96 -69 13
Slide 29: Glossary of terms (I/II)
Glossary of terms (I/II) Reference note (#) of Consolidated Item Calculation Management Report Average cost of debt (%) Cost of gross financial debt / gross average financial debt: (33 €mn x (360/90)) / 7,735 €mn = 1.7% 4.1 (Principal x number of days of term) / (Principal in force at the end of the
Slide 30: Glossary of terms (II/II)
Glossary of terms (II/II) Reference note (#) of Consolidated Item Calculation Management Report Gross tangible (232 €mn) and intangible (36 €mn) Capex - assets from clients’ contributions and Net Capex (€mn) 4.3 subsidies (20 €mn) = 248 €mn Long and short term financial debt (5,998 €mn + 1,576 €mn)
Slide 31: 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
Slide 32: IR Team Contact us
IR Team Contact us Mar Martinez Head of Investor Relations Investor Relations team Contacts Isabel Permuy Javier Hernandez Email: ir@endesa.es Francesc Trilla Juan Carlos Jimenez Phone: + 34 91 213 15 03 Sonia Herranz + 34 91 213 90 49 Paloma de Miguel Website: www.endesa.com 32