Slide 1: Investor Presentation December 2017
Investor Presentation December 2017
Slide 2: Enel today: evolution since 2014
Investor presentation Enel today: evolution since 20141 #1 private network operator globally #1 renewable operator 65 mn end users and 44 mn digital meters ~40GW managed capacity2 +4.5 mn end users +6 GW +8.4 mn smart +80% meters3 additional capacity 47 GW thermal capacity 20 mn free retail custom
Slide 3: Enel today: global and diversified operator
Investor presentation Enel today: global and diversified operator1 North & Central America Italy Iberia Europe & North Africa 51% 23% 15% 58% 43% 0.8 €bn 6.9 €bn 3.4 €bn 0.6 €bn 5% 45% 9% 21% 4% 32% 100% 16% 1% 18% 34% Subsaharian South America Africa & Asia 2017E Group EBITDA 5% 38% 47% 4.0 €bn 100
Slide 4: Enel integrated model fit for digitalized, low carbon world
Investor presentation Enel integrated model fit for digitalized, low carbon world Digital infrastructure platform Distributed generation and quality of service Zero-emission generation growth engine Cash flow generation and global Driver of access to energy risk mitigation Key player in the mix tran
Slide 5: Enel strategic pillars
Investor presentation Enel strategic pillars Digitalization Customer focus Operational efficiency Industrial growth Group simplification & active portfolio management Communities and people for a data-driven Company for more shared value Sustainable long-term value creation 4
Slide 6: Integrated model fit for digitalized, low carbon world
Investor presentation Integrated model fit for digitalized, low carbon world Electrification, Storage, Decarbonization Urbanization Demand Response Sector trends Sector trends Sector trends By 2040, ~40% of generation will be By 2040, electricity will increase from By 2050, 6.3 bn people will
Slide 7: Industrial growth: operational targets by business
Investor presentation Industrial growth: operational targets by business Networks Retail Renewables Thermal generation End users (mn) Free customer base1 (mn) Managed capacity (GW) Installed capacity3(GW) Smart meters (mn) Power sold2 (TWh) Other renewables (GW) Smart meters 2.0 (mn) Large hydro (GW
Slide 8: Summary by business line
Investor presentation Summary by business line Networks Customers Renewables Thermal generation2 EBITDA CAGR1 +6% EBITDA CAGR1 +10% EBITDA CAGR1 +5% EBITDA CAGR1 +2% €bn 35. 00 10. 00 20. 00 8.0 0 €bn 30. 00 9.0 0 8.0 0 0.8 18. 00 16. 00 €bn 7.0 0 €bn 6.0 0 8.2 25. 00 7.0 0 14. 00 5.0 0 25.1 6.0 0 1
Slide 9: Operational efficiency: focus on opex
Investor presentation Operational efficiency: focus on opex Opex evolution (€bn)1 Opex by business3 -16% Networks -3% €/end user 50.5 42.4 2017E 2020 0.1 Renewables -9% 0.4 0.3 (1.2) k€/MW 38.8 35.2 8.6 2017E 2020 0.5 from 8.3 -4% digitalization Thermal Generation4 37.1 35.6 k€/MW 2017E 2020 -34% Re
Slide 10: Industrial growth: focus on growth EBITDA
Investor presentation Industrial growth: focus on growth EBITDA 2018-20 growth capex Capex addressed by business By year1 Growth EBITDA by year2 (€bn) 3 2018 70% 2.5 2.3 35% 42% 2019 45% 1.7 53% 14.6 €bn 2 6.8 €bn 1.5 1.1 3.6 56% 1.8 cumulated 2020 27% 1 1.2 12% 0.6 1% 1% 0.5 0.5 0.5 0.5 0.5 0 In ex
Slide 11: 2018-20 financial strategy (1/3)
Investor presentation 2018-20 financial strategy (1/3) 2017 actions completed (€bn) Financial strategy for 2018-20 (€bn) 7 Yankee bonds issuance Bond refinancing 5.7 including green bonds program 1.25 Green bond issuance 2.7 Hybrid refinancing 0.5 EIB financing for Open Meter 9.4 Renegotiation of cr
Slide 12: 2018-20 financial strategy (2/3)
Investor presentation 2018-20 financial strategy (2/3) Gross and net debt (€bn) Net financial expenses on debt (€bn) -6% -12% 4.0 5.0% 3.5 4.8% 4.7% ~52.0 5.0 % ~50.8 ~50.8 ~49.1 4.5% 3.0 4.5% ~7.4 ~5.0 ~5.4 ~5.2 4.5 % ~6.8 ~6.0 ~5.9 ~5.6 2.5 2.0 2.4 2.3 4.0 % 1.5 2.2 2.1 3.5 % ~37.8 ~39.8 ~39.5 ~38
Slide 13: 2018-20 financial strategy (3/3)
Investor presentation 2018-20 financial strategy (3/3) Gross debt breakdown Cost of gross debt 2017 2020 Hybrid bonds 6.4% 3.7% 4.8% 4.5% 8% 9% 14% 15% Emerging markets2 8.5% 8.9% 21% 20% Banks and other 1.6% 2.0% 56% 54% Bonds1 4.9% 4.1% 1% 2% Tax Partnership 10.0% 8.0% 2017 2020 Tax Partnership Bo
Slide 14: 2018-20 cumulated cash flow
Investor presentation 2018-20 cumulated cash flow (€bn) 60. 0 (3.3) 50. 0 (7.0) 51.7 (7.2) 40. 0 (6.7) 30. 0 (14.6) 34.2 20. 0 27.5 (3.3) 3.4 (12.3) 10. 0 13.0 0.7 (1.5) 0.0 Ordinary ∆ Provisions1 Income Financial FFO Maintenance FFO after Growth capex 2 Connections Proceeds form FCF Dividends Net F
Slide 15: Enel transformation and 2020 targets
Investor presentation Enel transformation and 2020 targets Profitability & cash generation Leverage Returns 0.7 90% 4.5 0 27% 29% 31% 0.4 14% 12.3% 13.1% 14% >65% 80% 4.0 0 25% 27% 0.3 10.5% 10.8% 11.1% 0.6 64% 65% >65% >65% 12% 13% 13.0% 70% 3.5 0 0.3 0.5 30% 10% 12% 12.3% 60% 3.0 0 0.2 0.4 8% 11%
Slide 16: Debt maturity coverage split by typology
Investor presentation Debt maturity coverage split by typology (€bn)1 < 3Q 2018 3Q 2018 2019 2020 2021 >2021 Total 72% Short term2 3.9 - - - - - 3.9 18.5 €bn Bank loans 1.4 0.5 1.2 1.9 1.4 4.8 11.2 and other 28% Bonds 4.6 1.0 2.6 2.3 1.5 23.7 35.7 3 Available committed credit lines Cash Total 9.9 1.
Slide 17: Group targets
Investor presentation Group targets CAGR (%) 2017E 2018 2019 2020 2017-20 Ordinary EBITDA (€bn) 15.5 16.2 17.2 18.2 ~+6% Net ordinary income (€bn) 3.6 4.1 4.8 5.4 ~+15% Minimum dividend per share (€) 0.21 0.28 - - - Pay-out ratio 65% 70% 70% 70% +5 p.p. Implicit DPS (€) 0.23 0.28 0.33 0.37 ~
Slide 18: Green Bond Program
Investor presentation Green Bond Program1 Rationale Provide an ideal tool to finance the transition to a low carbon economy Diversify Enel’s investor base targeting investments towards low carbon technologies and services Top focus on SRI investors representing 8.4% of Enel’s share capital and 11.0%
Slide 19: Application of Green Bond principles
Investor presentation Application of Green Bond principles: delivery on announced governance Use of proceeds Evaluation and selection Management of Reporting ✔ ✔ proceeds ✔ Renewable Energy Projects Setting up of Green Bond Eligible projects financed via Annually and until maturity of committee inte
Slide 20: 2017 Green Bond proceeds allocation
Investor presentation 2017 Green Bond proceeds allocation Italy > 80 MW Technology: other Eligible projects exceed planned organic USA > 1,450MW Allocated GB 2017 proceeds: ~ 80 €mn renewable growth ~3.9 GW (vs 3.5GW) Technology: Allocated GB 2017 proceeds: ~400 €mn Multi-country and multi-technolog
Slide 21: Chile: Cerro Pabellon (geothermal)
Investor presentation Chile: Cerro Pabellon, Antofagasta region, Atacama desert (geothermal) Sustainability benefits Highlights Climate change mitigation The main actions implemented are related Installed capacity of the renewable energy to: plant: 48MW (in operation) • Education Renewable energ
Slide 22: Chile: Sierra Gorda (wind)
Investor presentation Chile: Sierra Gorda, Antofagasta region, Atacama desert (wind) Sustainability benefits Highlights Climate change mitigation The main actions implemented are related Installed capacity of the renewable energy to: plant: 112 MW (in operation) Training of local people, mainly
Slide 23: Peru: Wayra, Marcona (wind)
Investor presentation Peru: Wayra, Marcona, Ica region (wind) Sustainability benefits Highlights Climate change mitigation The main actions implemented are related Installed capacity of the renewable energy to: plant: 132 MW (under construction) Training of local people (women) in Renewable en
Slide 24: Brazil: Ituverava (solar)
Investor presentation Brazil: Ituverava, Tabocas do Brejo Velho, Bahia (solar) Sustainability benefits Highlights Climate change mitigation The main actions implemented are related Installed capacity of the renewable energy to: plant: 254 MW (in operation) Worker Support Plan: support people to
Slide 25: USA: Red Dirt, Oklahoma (wind)
Investor presentation USA: Red Dirt, Oklahoma (wind) Sustainability benefits Highlights Climate change mitigation The main actions implemented are related Installed capacity of the renewable energy to: plant: 300 MW (under construction) Waste recycling and circular economy Renewable energy pro
Slide 26: Closing remarks
Investor presentation Closing remarks Continued excellent execution in strategic pillars Well positioned for digitalized, low carbon world Increased financial and non- financial targets Operating model driving long term shared value for all our stakeholders 25
Slide 27: Annexes
Investor presentation Annexes
Slide 28: Renewables positioning and key figures
Investor presentation - Annexes Renewables positioning and key figures Key figures 2017 Managed Capacity (GW) 37.1 40.5 Production (TWh) 85.1 92 Key financials (€bn) 2017 EBITDA 4.1 Opex 1.4 Maintenance capex 0.3 Countries of presence Countries with advanced stage of development Growth capex 3.4 Con
Slide 29: Infrastructure and Networks positioning and key figures
Investor presentation - Annexes Infrastructure and Networks positioning and key figures Italy (85%)1 224 TWh distributed energy Key figures 2017 Argentina (16%) 1 31.5 mn end-users Iberia (42%) 1 18 TWh distributed energy Distributed energy (TWh) 441 110 TWh distributed energy 2.5 mn end-users 12 mn
Slide 30: Enel strategic pillars
Investor presentation - Annexes Enel strategic pillars Industrial ESG Digitalization Customer focus Digitalization Customer focus Operational efficiency Assets optimization and innovation Industrial growth Growth across low carbon technologies and services Group simplification & active portfolio man
Slide 31: Plan pillars and backbones: cross-reference with SDGs
Investor presentation - Annexes Enel’s plan pillars and backbones: cross-reference with SDGs 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Growth across low carbon technologies & services Assets optimization Pillars and Innovation Engaging local communities Engaging the people we work with Enablers Cust
Slide 32: Growth across low carbon technologies and services
Investor presentation - Annexes Growth across low carbon technologies and services Plan actions Related targets/commitments +0.6 GW storage capacity Electrification, storage & demand response +5 GW demand response Development of renewable capacity and +7.8 GW renewable capacity1 reduction of thermal
Slide 33: Assets optimization and innovation
Investor presentation - Annexes Assets optimization and innovation Plan actions Related targets/commitments +20.4 mn smart meters installed Large scale infrastructure innovation mostly 5.3 €bn digitalization capex in grid digitization, smart meters and charging stations Digitally integrated smart pl
Slide 34: Engaging local communities
Investor presentation - Annexes Engaging local communities Plan actions Related targets/commitments 2x High-quality, inclusive and fair education 0.8 million people1 From 0.4 Access to affordable and clean energy mainly in Africa, Asia 3 million people1 and Latin America 2x Employment and sustainabl
Slide 35: Engaging the people we work with
Investor presentation - Annexes Engaging the people we work with Plan actions Related targets/commitments 100% of people1 involved Appraise performance of people we work 99% of people1 appraised with1 95% of people1 interviewed (feedback) Survey corporate climate with a focus on 100% of people1 invo
Slide 36: Environmental sustainability
Investor presentation - Annexes Environmental sustainability Plan actions Related targets/commitments Reduction of SO2 specific emissions -30% (vs 2010) Reduction of NOx specific emissions -30% (vs 2010) Reduction of particulates specific emissions -70% (vs 2010) Reduction of water specific consumpt
Slide 37: Digitalization and related risks: cyber security framework
Investor presentation - Annexes Digitalization and related risks: cyber security framework Plan actions Related targets/commitments Single strategy approach based on business 100% of internet web applications protected risk management through advanced cyber security solutions Business lines involved
Slide 38: Focus on corporate governance (1/3)
Investor presentation - Annexes Focus on corporate governance (1/3) Current shareholders’ structure1 2017 Annual General Meeting: Quorum Corporate Governance in a nutshell Institutional investors account for 57% on Enel’s TSO1 and 60% in the latest Enel’s AGM 48.8% 59.0% No special power to Italian
Slide 39: Focus on corporate governance (2/3)
Investor presentation - Annexes Focus on corporate governance (2/3) 78% Shareholders’ meeting Audit firm BoD composition 11% 11% Board of directors: Board of statutory Executive Non-executive 9 members1 advisors: 3 members Independent Control and risks Nomination and Corporate governance Related par
Slide 40: Focus on corporate governance (3/3)
Investor presentation - Annexes Focus on corporate governance (3/3) BoD members BoD diversity P. Grieco Non ex (Chairperson) CGSC 11% 33% F. Starace Executive 67% Age 22% Gender A. Antoniozzi Independent 67% CGSC RPC Independent 41-50 51-60 61-70 Men Women C. Calari NCC RPC 22% 4 Independent 3 A. Bi
Slide 41: Focus on remuneration policy (1/2)
Investor presentation - Annexes Focus on remuneration policy (1/2) Short-term variable remuneration1 Related targets 40%2 Entry point (50% premium) = 3.5 €bn Net Ordinary Income Target (100% premium) = 2017 Group Guidance Overperformance (120% premium) = 3.7 €bn 30%2 Entry point (50% premium
Slide 42: Focus on remuneration policy (2/2)
Investor presentation - Annexes Focus on remuneration policy (2/2) Long-term variable remuneration1 Related targets 60%2 Entry point (50% premium): Enel TSR >= 90% Index TSR Target (100% premium): Enel TSR >= 100% Index TSR Enel TSR vs Euro Stoxx Utilities index TSR Overperformance I (150% pre
Slide 43: Industrial growth: main drivers and projects
Investor presentation - Annexes Industrial growth: main drivers and projects Infrastructure Renewable Thermal generation e-Solutions & Networks Energies 2.3 €bn capex 0.3 €bn capex 0.1 €bn capex +0.3 €bn capex Italy +16 mn digital meters 2.0 COD > 2020 Storage >+0.1 €bn EBITDA Stable RAB 0.9 €bn cap
Slide 44: EBITDA targets by Country and Global Business Line
Investor presentation - Annexes EBITDA1 targets by Country and Global Business Line2 (€bn) 2017 2018 2019 2020 Italy 6.9 7.0 7.4 7.8 Global Thermal Generation 0.1 0.1 0.1 0.3 Global I&N 3.5 3.5 3.7 3.7 Global Renewable Energies 1.1 1.2 1.2 1.3 Retail 2.0 2.0 2.1 2.1 e-Solutions 0.0 0.0 0.1 0.1 Servi
Slide 45: EBITDA targets new vs old perimeter
Investor presentation - Annexes EBITDA1 targets new vs old perimeter (€bn) Global Renewables Energies 2017 2018 2019 2020 Global Global Global Global Large Large Large Large EGP2 Renew able EGP2 Renew able EGP2 Renew able EGP2 Renew able Hydro Hydro Hydro Hydro Energies Energies Energies Energies It
Slide 46: Capex plan 2017-20
Investor presentation - Annexes Capex1,2 plan 2017-20 (€bn) 2017 2018 2019 2020 Growth Maintenance Connections Growth Maintenance Connections Growth Maintenance Connections Growth Maintenance Connections Italy 0.6 0.9 0.4 1.2 0.8 0.4 1.1 0.8 0.5 0.9 0.7 0.5 Global Thermal Generation 0.1 0.1 - 0.0 0.
Slide 47: Gross debt structure
9M 2017 consolidated results - Annexes Gross debt1 structure Long term debt by currency After swap Interest ratecomposition Long term credit ratings Rating Outlook 56% 27% Standard & Poors2 BBB+ Stable 84% 47.6 €bn 2% 47.6 €bn 51.6 €bn Moody’s Baa2 Stable 10% 4% 1% 73% 4% 5% 4% 23% Fitch BBB+ Stable
Slide 48: Debt structure by instrument
9M 2017 consolidated results - Annexes Debt structure by instrument (€bn) Central South North & Central Europe & North Sub-Saharan Debt by instrument Enel Spa EFI Italy Iberia Total Others America America Africa Africa & Asia Bonds 12.25 19.73 - - 0.06 3.59 - 0.15 - 35.78 Bank Loans 1.04 - - 4.51 0.
Slide 49: Disclaimer
Investor presentation Disclaimer This presentation contains certain forward-looking statements that reflect the Company’s management’s current views with respect to future events and financial and operational performance of the Company and its subsidiaries. These forward-looking statements are based
Slide 50: Contact us
Investor presentation Contact us Luca Passa Head of Group Investor Relations Elisabetta Ghezzi Investor Relations Holding Donatella Izzo Investor Relations Sustainability and Other Countries Email Marco Donati investor.relations@enel.com Investor Relations Reporting and Corporate Governance Phone +3