Endesa S.a. · BME:ELE
Endesa — Q1 2002 Earnings Presentation
20 slides from Endesa's earnings presentation, Apr 25, 2002
Slide 1: 2002 First Quarter Results
2002 First Quarter Results April 25th, 2002 1
Slide 2: 1Q2002 At a Glance (I)
1Q2002 At a Glance (I) • 100% increase in net income to Eur 767 million positive affected by capital gains from sale of Viesgo that have more than offset the Argentinean devaluation. • Spanish electricity business: • EBIT: -29% to Eur 426 M. Underlying EBIT -12% due to deconsolidation of Viesgo, add
Slide 3: 1Q2002 At a Glance (II)
1Q2002 At a Glance (II) • Latin America : • EBIT: -5.4% (+7.7% ex-Argentina). Generation EBIT +10%. However distribution negatively affected by Argentina. • Argentina: Eur 75 M negative net impact from devaluation Additional provision Eur 210 M • Controllable costs: Personnel expenses decrease 20.2%
Slide 4: Financial Highlights for 1Q
Financial Highlights for 1Q Euro million CONSOLIDATED RESULTS 1Q 2002 1Q 2001 Change (%) Revenues 4,448 3,670 +21.2% EBITDA 1,294 1,389 -6.9% EBIT 847 946 -10.5% Net Income 767 384 +99.8% EPS 0.72 0.36 +99.8% Employees 26,462 28,319 -6.6% BREAKDOWN BY LINE DOMESTIC LATAM EUROPE OTHER OF BUSINESS ELE
Slide 5: Consolidated EBIT 1Q2002
Consolidated EBIT 1Q2002 • 10.5% EBIT decrease driven mainly by tariff shortfall, fuel cost and Argentinean devaluation • Domestic EBIT represents 50% of total EBIT, 79% proportionally consolidated. Italy accounts for 10% of total EBIT BREAKDOWN OF EBIT BY DIVISION BREAKDOWN OF EBIT BY COUNTRY (%) P
Slide 6: Domestic Business EBIT 1Q2002
Domestic Business EBIT 1Q2002 DOMESTIC EBIT BREAKDOWN Euro Million • Domestic EBIT -29%. Underlying EBIT -12%, adjusted to Viesgo, 602 -29% island compensation and re- settlements. 46 72 (*) 426 • Distribution EBIT ex-Viesgo -3% despite lower controllable costs. -12% 314 • Generation & Supply EBIT e
Slide 7: Domestic Business: A radical change in hydro conditions has resulted in higher fuel costs
Domestic Business: A radical change in hydro conditions has resulted in higher fuel costs and higher output… Generation Mix ( GWh) Fuel Cost (Euro Million) 19,390 +48% 390 +14.5% 1,029 16,931 264 218 5,969 9,985 6,742 7,060 -67% 4,002 Hydro 1,316 1Q 2001 1Q 2002 1Q 2001 1Q 2002 Hydro Nuclear Coal Fu
Slide 8: Domestic Business: …but the tariff shortfall has prevented ENDESA from fully reflecting higher pool prices
Domestic Business: …but the tariff shortfall has prevented ENDESA from fully reflecting higher pool prices in revenues Pool price (Eur/GWh) CTCs (Eur Million) +76% 5.20 151 2.95 -319M Eur 1Q 2001 1Q 2002 1Q 2001 1Q 2002 -168 Domestic Gross Margin (Eur Million) 388 -319 -126 -2 1,085 -5.4% 1,026 Gros
Slide 9: Domestic Business Controllable Cost Reduction 1Q2002
Domestic Business Controllable Cost Reduction 1Q2002 • Headcount -18.2% to 13,721 • Controllable cost in line with the (-13.8% ex Viesgo). 2001 levels despite inflation • 1.4% reduction in real terms WORKFORCE EVOLUTION CONTROLLABLE COST EVOLUTION Euro Million 15,913 -13.8% -5.5% 1,444 14,140 13,721
Slide 10: Endesa Italia: Performance continues in line with business plan
Endesa Italia: Performance continues in line with business plan • Fully consolidation as of January 1st after acquisition of 5.7% from SCH reaching a stake of 51% • 1Q02 EBIT: Eur 84 M, in line with Business Plan WORKFORCE EVOLUTION -18.6% 1,580 1,398 1,286 Sept.01 Dec.01 Mar.01 10
Slide 11: Latin America: EBIT Breakdown 1Q 2002
Latin America: EBIT Breakdown 1Q 2002 EBIT − GENERATION EBIT − DISTRIBUTION Euro Million Euro Million 170 204 -12.7% +9.7% 155 14 178 24 58 32 28 26 +19.1% 17 14 Ex Argentina 37 11 +2.7% 16 Ex Argentina 50 14 74 76 16 73 39 44 44 1Q 2001 1Q 2002 1Q 2001 1Q 2002 Chile Brazil Colombia Chile Brazil Col
Slide 12: Telecommunications: Financial Performance in 1Q 2002
Telecommunications: Financial Performance in 1Q 2002 • AUNA: • AUNA reached Eur 137 M EBITDA, exceeding its business plan AUNA Results • AMENA customers up 35% to 5.5 million Euro Million • AUNA CABLE customers up to 0.31 million, 713 512 113% up against 1Q 01 • SmartCom: • Revenues up by 92% to Eur
Slide 13: Financial results
Financial results: A solid performance in interest costs but strong impact of FX losses • Financial expenses down by 14% as interest cost of debt was reduced from 6.3% to 5.2%. Interest cost & FX losses Evolution of leverage 573 2.01 -9.5% 439 376 Argentinean Peso 1.83 Euro 542 M 72 4Q01 1Q02 1Q 01
Slide 14: 1Q 2002 change in debt level
1Q 2002 change in debt level 25.01 0.15 0.27 24.89 0.73 1.73 1.18 0.40 0.51 0.17 Debt Dec 01 Cash Flow Sale of Viesgo Others Capex Financial Change in FX losses Dividends Debt March And others Investments consolidation 02 • Cash Flow > Maintenance Capex + New Capacity Investments • Sources of funds
Slide 15: Impact of Argentinean devaluation in 1Q02
Impact of Argentinean devaluation in 1Q02 1.7 to 2.97 AR$ per US$ Exposure to Argentina March ’02 devaluation in 1Q02 M Euro % total ELE Devaluation impact Eur (75) M in P&L after minorities Equity 89 1.0% Assets * 649 1 .6% In Reserves Eur (160) M EBIT * 15 1.8% Net Income -99 -12.9% Additional Pro
Slide 16: Others
Others • Total extraordinary results amounted to Eur 679 M • Domestic Eur 867 M profit: Eur 1,066 gross capital gain from Viesgo and Eur 158 M provision for domestic electricity risks • Latin America Eur 182 M loss: Argentinean provision Eur 210 M • Taxes: Effective tax rate of 12.5%: • 13.5% domest
Slide 17: 1Q 2002 results: conclusions
1Q 2002 results: conclusions •Domestic business: • Extreme change in hydro conditions resulted in higher fuel costs • Tariff shortfall has prevented ENDESA from benefiting from higher prices •Endesa Italia: solid contribution in Q1 •Latin America: well-balanced country exposure partially offsets Arg
Slide 18: 1Q 2002 strategic performance
1Q 2002 strategic performance ENDESA continues to work along the strategic plan: •Continue efficiency improvements. •Proactive manage assets portfolio •Continue organic growth in core business and markets •Strengthening balance sheet 18
Slide 19: Forward-looking Statements
Forward-looking Statements: Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the United States Private Securities Litigation Reform Act of 1995. The U.S. Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This presentation co
Slide 20: 2002 First Quarter Results
2002 First Quarter Results April 25th, 2002 20