Slide 1: Endesa FY 2018 Results
Endesa FY 2018 Results February 26, 2019
Slide 2: Key highlights
Key highlights 2018 results exceeding guidance: EBITDA increased by +2% (adjusted EBITDA +12%) Decarbonization Smart Continued efforts in efficiency networks Customer value Net Ordinary Income growth(1) (+4%) Efficiency through digitalization Proposal to pay €1.427 gross DPS, 3% increase vs. 2017 (1
Slide 3: Financial targets delivery
Financial targets delivery 2018 2018 target(1) 2017 Δ YoY EBITDA (€bn) 3.6 ✔ 3.5 3.5 +2% Reported Net Income (€bn) 1.4 ✔ 1.4 1.5 -3% Net Ordinary Income (€bn) (2) 1.5 ✔ 1.4 1.5 +4% 1.427(3) ✔ (4) Gross DPS (€/sh.) 1.33 1.382 +3% Net Capex (€bn) (5) 1.3 ✔ 1.3 0.9 +39% ✔ FCF (€bn) (6) 0.9 0.9 (7) 1.3
Slide 4: 2018 Capex breakdown
2018 Capex breakdown €bn Net Capex by nature Net Capex by business ~+40% (1) 1.3 5% ~40% increase in net capex 0.0 19% 0.9 0.0 0.7 Asset development doubled YoY 0.6 41% 1.3 (1) 23% Renewables driving growth (~€250 M)(2) 0.6 0.3 12% €342 M Digital Capex 2017 2018 Customers Distribution Mainland Gener
Slide 5: Decarbonization
Decarbonization (1) Installed capacity (GW) Output (TWh) +8% Renewables capacity (+132 MW -6% Gestinver) 78.6 8.4 3.4 74.2 5.0 3.8 +11% CO2 free generation: ~50% of total 8.4 +67% 44% output 4.5 26.5 ~50% 24.1 -9% 22.7 13.0 5% Reduction of CO2 specific -2% emissions 12.7 1.8 4.7 30.7 3.3 25.2 -18% F
Slide 6: Smart networks
Smart networks OPEX, €/customer Losses(1), % Minutes of interruption(2) -4% 0.1 pp +5% Continuous effort on networks digitalization with full smart meters 45 9.5% 9.6% 76 deployment 43 72 Efficiencies improvement Higher activity and adverse meteorological events 2017 2018 2017 2018 2017 2018 Higher
Slide 7: Customer value: Electricity sales and energy management
Customer value Electricity sales and energy management Energy management (TWh) Integrated unitary margin (€/MWh) -7% Sales(1) 88.1 67.1 81.6 Revenue 61.3 Energy purchases 22.5 20.1 41.4 Variable cost(2) 41.1 Mainland output +27% 65.6 61.5 Integrated margin 20.2 25.7 2017 2018 2017 2018 Free customer
Slide 8: Customer value: Gas operational highlights
Customer value Gas operational highlights Total sales (TWh) Gas retail unitary margin(1) (€/MWh) +2% +138% 1.9 101 103 Wholesale 7 12 business 21 16 0.8 (2) CCGT sales 72 75 Retail 2017 2018 2017 2018 Number of gas +3% customers (k#) 1,560 1,604 Substantial recovery in gas market fundamentals (1) Re
Slide 9: Customer value: Improving efficiency and digitalization
Customer value Improving efficiency and digitalization Business indicators Digital KPIs(1) 13% 11% -2pp 2.8 Power churn rate, e-billing, 2.1 +33% % #M 20% 68% 81% 13% -7pp ✔ +13pp Gas churn rate, ✔ e-care, % % digital 13,9 13,7 4.4 -1% 3.8 ✔ +19% Cost to Serve(1) , Digital contracts, €/customer #M 2
Slide 10: Customer value: Endesa X delivery
Customer value Endesa X delivery Main KPIs Highlights Maintenance and repair clients, Traditional businesses M# 2017 2018 e-Home 2.0 2.1 Improving value proposal in e-Home and e- Energy Infrastructure, Industries as the core businesses of Endesa X k# 2017 2018 ~95% of total gross margin e-Indust
Slide 11: Efficiency through digitalization
Efficiency through digitalization 2021 target -6% Opex(1) evolution (€M) Generation 49 47 46 Unitary cost(3), k€/MW 44 Fixed 1,963 2015 2017 2018 Costs 2017 (2) EGPE n.a. Fixed cost, 44 CPI 24 43 k€/MW ✔ 38 2015 2017 2018 Perimeter/ Growth 22 Distribution -19% Unitary cost, 53 45 43 €/customer ✔ 41
Slide 12: Our commitment to SDGs and Human Capital
Our commitment to SDGs and Human Capital Engaging local communities 2018(1) Human Capital Our people 2018 High-quality, inclusive and fair education (k# beneficiaries) 121 Talent attraction and retention 100% of people involved Access to affordable and clean Climate corporate survey 1,221 71% of peo
Slide 13: FY 2018 consolidated results
FY 2018 consolidated results Financial results
Slide 14: 2018 consolidated results
2018 consolidated results Financial highlights (€M) 2018 2017 Δyoy Revenues 20,195 20,057 +1% Gross Margin 5,628 5,488 +3% EBITDA 3,627 3,542 +2% EBIT 1,919 2,031 -6% Reported Net Income 1,417 1,463 -3% Net Ordinary Income (1) 1,511 1,452 +4% Net Capex(2) 1,274 918 +39% Net Debt 5,770 4,985 +16% (3)
Slide 15: EBITDA evolution
EBITDA evolution €M +2% DYoY DYoY +12% Ebitda Ebitda 3,542 3,627 3,627 Reported Adj 303 3,239 86 346 1,040 One offs 2017 - 44 1,212 1,212 +17% +40% 866 EGPE: 212 Gx+Sx+Structure (Gestinver ~€16 M) Social tariff: €222 M EGPE: 181 452 MtM gas&others : -€49 M 356 356 -21% -11% 400 SCVP: €20 M Workforce
Slide 16: Regulated business
Regulated business €M Net capex(1) Adjusted Ebitda(2) Distribution Non mainland +2% Regulated margin: 3,194 M€ (+1%) 2,373 2,415 4% 3% • Dx margin: 2,583 M€ (+3%) 400 356 • Non mainland margin: 611 M€ (-5%) 40% 516 M€ 67 M€ 56% 2,059 1,973 Adjusted fixed costs: 779 M€ (-0.4%) 97% 2017 2018 Asset Man
Slide 17: Liberalized business
Liberalized business(1) €M Net capex(2) Adjusted Ebitda(3) By type By business +40% Liberalized margin: 2,434 M€ (+21%) 22% 1,212 • Electricity&Others margin: 2,178 39% 212 42% 866 M€ (+18%) 691 M€ 691 M€ 181 • Gas margin: 138 M€ (+145%) 61% • Endesa X margin: 118 M€ (+13%) 1,000 36% 685 Adjusted fi
Slide 18: From EBITDA to Net Ordinary Income
From EBITDA to Net Ordinary Income €M (1) -1,708 (3) +38 1,511 3,627 -139 -392 -9 94(4) 1,919 1,818 1,417 1,417 EBITDA Depreciation EBIT Net Financial Associates and Profit before Taxes Minorities Net attributable Net ordinary and Results Others taxes Income income amortization 11% Delta YoY +2% +13
Slide 19: Cash Flow
Cash Flow €M -246 -522 -326 -113 3,627 -1,511 2,420 909 11% (2) (3) (4) EBITDA Provisions paid Working capital Income Taxes Financial CFO Cash Capex FCF & Other(1) paid Expenses Delta YoY +2% -5% +29% -7% +26% -1% +34% -31% (1) Net working capital + Regulatory NWC (2) CFO: Net Cash Flows from operat
Slide 20: Net financial debt analysis
Net financial debt analysis €M Net debt evolution Gross and net debt 6,021 5,770 5,392 251 Cash & Derivatives 407 4,985 recognized as 810 financial assets 1,472 530 - 909 222 Net debt 5,770 4,985 4,455 4,960 2017 2018 2018 Gross debt structure FY 2017 FCF Change in Dividends 2018 perimeter & others(
Slide 21: Delivering and exceeding 2018 targets
Delivering and exceeding 2018 targets CAGR 2018 target(1) 2018 2019 2020 2021 2018-2021 EBITDA (€bn) 3.5 3.6 3.7 3.8 4.0 +3% Net ordinary income (€bn) 1.4 1.5 1.5 1.6 1.8 +6% Gross DPS (€/sh.) 1.33 (2) 1.427(3) Cumulative FCF(4) (€bn) 3.4 2018 good ground for Business Plan delivery (1) Strategic Pla
Slide 22: Shareholder remuneration
Shareholder remuneration Gross DPS evolution (€/share) +3.3% +3.7% (1) 2018 Total shareholder return: 20.9%(3) 1.427 1.382 1.333 0.727 2018 proposal: 100% pay-out of Net Ordinary Income Final dividend Interim dividend 0.70 +7.3% ahead of minimum 2018 DPS (€1.33 per share) 2016 2017 2018 Minimum DPS
Slide 23: Final Remarks
Final Remarks Delivery on financial targets ahead of guidance Decarbonization Smart Continued execution on key strategic pillars and enablers networks Customer value Fully committed with the Energy Transition initiatives Efficiency through digitalization 2019 financial targets confirmed FY 2018 Resu
Slide 24: Appendix
FY 2018 consolidated results Appendix
Slide 25: Market context in 2018
Market context in 2018 Demand (1) Electricity wholesale prices Average pool prices Spain (€/MWh) Spain(2) Endesa distribution area(3) +10% (Not adjusted) 0.3% 0.4% Industry -5.1% 65.8 63.0 52.2 52.0 57.3 Services +1.3% 48.1 Residential +1.0% -0.8% -0.9% 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 2018 Adju
Slide 26: Installed capacity and output
Installed capacity and output Total output(1) (GWh) Total output (GWh) -6% GWh 2018 78,648 (and chg. vs. 2017) Total Output (1) 74,193 13,043 Total 74,193 -6% 12,737 Hydro 8,339 67% 8,409 Nuclear 24,067 -9% 5,293 Coal 22,316 -10% 14,468 14,951 Natural gas 8,957 -24% Oil-gas 6,681 -5% 7,835 4,973 3,4
Slide 27: Customer value: Electricity sales and customers
Customer value Electricity sales(1) (TWh) Number of electricity customers (Thousands) -8% -1% 106.8 98.7 10,848 15.3 10,754 14.4 19.4 19.5 5,255 5,029 -4% 72.1 64.8 5,593 5,725 +2% 2017 2018 2017 2018 B2B(2) B2C SCVP Free Regulated (1) Energy at power plant busbars FY 2018 Results- Madrid, (2) B2B i
Slide 28: Gross margin evolution
Gross margin evolution Gross margin net of one offs +3% % Chg. % Chg. +9% Margin Margin €M 5,488 5,628 5,628 Reported Adjusted 322 5,166 70 423 One offs 2017 - 31 2,204 2,434 2,434 +10% +21% Gx+Sx 2,011 Social tariff: €222 M MtM gas&others : -€49 M 694 SCVP: €20 M 642 611 611 -12% -5% Non mainland G
Slide 29: Fixed costs evolution
Fixed costs evolution M€ +3% +1%(1)(2) (1) 1,963 1,991 10 (2) 2,001 1,946 17 928 +2% 943 947 917 Personnel costs O&M costs 1,251 1,257 +5% 1,318 1,324 Capitalized -222 -222 -270 -270 costs 2017 2017 2018 2018 Reported Adjusted Adjusted Reported (1) 2017 Fixed costs adjusted by: Provisions for workfo
Slide 30: Endesa: financial debt maturity calendar
Endesa: financial debt maturity calendar M€ Gross balance of maturities outstanding at 31 December 2018: €6,010 M(1) Bonds and other marketable securities (2) Bank Debt Other debts 4,365 3,366 Endesa's liquidity covers 26 months 1,046 of debt maturities 73 53 33 920 130 163 38 264 25 172 987 0 226 1
Slide 31: Endesa: FY 2018 P&L
Endesa: FY 2018 P&L Gx+Sx Dx Structure Adjustments TOTAL Income 17,621 2,784 614 -824 20,195 Procurements and services -14,464 -201 -81 179 -14,567 Gross margin 3,157 2,583 533 -645 5,628 Self-constructed assets 83 167 20 0 270 Personnel expenses -520 -263 -180 16 -947 Other fixed operating expenses
Slide 32: Endesa: FY 2017 P&L
Endesa: FY 2017 P&L Gx+Sx Dx Structure Adjustments TOTAL Income 17,509 2,750 560 -762 20,057 Procurements and services -14,725 -160 146 170 -14,569 Gross margin 2,784 2,590 706 -592 5,488 Self-constructed assets 42 156 24 0 222 Personnel expenses -478 -267 -192 20 -917 Other fixed operating expenses
Slide 33: New International Financial Reporting Standards implementation (IFRS)
New International Financial Reporting Standards implementation (IFRS) IFRS 15 IFRS 9 “Revenue from contracts with IFRS 16 “Financial instruments” customers” “Leases” Date of first January 1, 2018 January 1, 2018 January 1, 2019 adoption Classification of financial assets Unique model for r
Slide 34: 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: (€126 M) / €6,777 M = 1.9% 4.1 (Principal x number of days of term) / (Principal in force at the end of the period x nu
Slide 35: Glossary of terms (II/II)
Glossary of terms (II/II) Reference note (#) of Consolidated Item Calculation Management Report Gross tangible (€1,203 M) and intangible (€231 M) Capex - assets from clients’ contributions and Net Capex (€M) 4.5 subsidies (€160 M) = €1,274 M Long and short term financial debt (€4,975 M + €1,046 M) -
Slide 36: 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