Enel SpA · MIL:ENEL
Enel SpA — FY2007 Earnings Presentation
124 slides from Enel SpA's earnings presentation, Mar 13, 2008
Slide 1: 2007 Results 2008-2012 Plan
Enel SpA Investor Relations 2007 Results 2008-2012 Plan “Consolidation, Growth and Financial Stability” London, March 13, 2008
Slide 2: Agenda
Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Network – International – Iberia & Latin America • Questions and answers • Annexes 1
Slide 3: Consolidation, growth and financial stability
Enel SpA Investor Relations Opening remarks Consolidation, growth and financial stability 2008-2012 key figures (€bn) • Cash-flow from operations +63 • Net portfolio optimization +11/15 • Capex -37 • Financial charges -14 • Dividends -15 Stable dividend policy of 49€c/share 8/12€bn net debt reductio
Slide 4: Financial targets
Enel SpA Investor Relations Opening remarks Financial targets 2009 2012 • EBITDA • 13.8€bn • 16.6€bn – Italy – 6.9€bn – 7.0€bn – International – 6.9€bn – 9.6€bn • EPS1 • 62.3€c • 83.0€c EPS CAGR2 2007-2012: 10% Net debt 2012: 45-49€bn 1. Ordinary income only 2. On a like for like basis 3
Slide 5: Agenda
Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Networks – International – Iberia & Latin America • Questions and answers • Annexes 4
Slide 6: Financial highlights: consolidated
Enel SpA 2007 results Investor Relations Financial highlights: consolidated €mn FY06 FY07 % Revenues 38,513 43,673 13.4 EBITDA 8,019 10,023 25.0 EBIT 5,8191 6,990 20.1 Group net income 3,036 3,977 31.0 Net debt 11,690 55,7912 - 1. Including capital gain raising from Wind-Weather share transaction fo
Slide 7: From EBIT to net income
Enel SpA 2007 results Investor Relations From EBIT to net income €mn FY06 FY07 % EBIT 5,8191 6,990 20.1 Net financial charges 651 902 38.6 Interest charges 577 1,390 - Financial income - (301) - Fair value of Acciona put option - (136) - Other 74 (51) - EBT 5,168 6,088 17.8 Income tax 2,067 2,002 (3
Slide 8: EBITDA evolution
Enel SpA 2007 results Investor Relations EBITDA evolution (€mn) +2,004 +1,462 -308 10,023 +308 325 +384 8,019 +158 167 3.541 3.157 Market G&EM 3.726 I&N International S&H1 3.418 2.380 918 359 51 FY06 Market G&EM I&N International S&H1 FY07 1. Including intercompany adjustments 7
Slide 9: EBITDA evolution: domestic market division
Enel SpA 2007 results Investor Relations EBITDA evolution: domestic market division (€mn) +158 +132 -82 325 +108 167 FY06 Regulated Free Other & FY07 market market non-recurring 8
Slide 10: EBITDA evolution: domestic G&EM division
Enel SpA 2007 results Investor Relations EBITDA evolution: domestic G&EM division (€mn) +384 +103 -47 3,541 +328 3,157 FY06 Generation Fair value Non- FY07 margin bilateral recurring contracts with SB 9
Slide 11: Fuel cost evolution
Enel SpA 2007 results Investor Relations Fuel cost evolution -5% 51.8 49.3 Average fuel cost (€/MWh) FY06 FY07 -2% -2% +17% 306.7 300.8 27.5 26.9 58.6 68.8 FY06 FY07 FY06 FY07 FY06 FY07 Oil (€/ton) Gas (c€/mc) Coal (€/ton) 10
Slide 12: EBITDA evolution: domestic I&N division
Enel SpA 2007 results Investor Relations EBITDA evolution: domestic I&N division (€mn) +308 +332 +61 -85 3,726 3,418 3.750 3.726 3.418 FY06 Electricity Gas Non- FY07 recurring 11
Slide 13: EBITDA evolution: international division
Enel SpA 2007 results Investor Relations EBITDA evolution: international division (€mn) +1,462 +573 -15 2,380 +198 +9 680 +691 +6 16 587 Iberia 918 South-Eastern Europe (SEE) Centrel 186 107 Russia 7 Americas France & Belgium 389 926 180 235 -15 FY06 Iberia SEE Centrel Russia Americas France FY07 &
Slide 14: EBITDA evolution: services & holding
Enel SpA 2007 results Investor Relations EBITDA evolution: services & holding1 (€mn) -308 359 -240 -23 -45 51 FY06 Import Non- Other FY07 recurring 1. Including intercompany adjustments 13
Slide 15: Focus on renewables
Enel SpA 2007 results Investor Relations Focus on renewables1 Capacity (MW) Production (GWh) +18.5% Other Wind Geothermal +10.8% Mini-hydro 3,112 11,828 2,626 47 10,676 678 46 308 671 327 857 5,269 5,195 588 EBITDA evolution (€mn) 1,293 1,244 1321 1530 4,958 +11.0% 3,910 FY06 FY07 46 868 FY06 FY07 4
Slide 16: Net debt evolution
Enel SpA 2007 results Investor Relations Net debt evolution (€mn) +45,826 December Cash-flow Capex Extra- Net Taxes Dividends December 31, 2006 from ordinary financial 31, 2007 operations activities charges -5,2301 -11,690 +9,130 -43,4792 -1,390 -1,677 -3,180 -57,5163 1. Including 301€mn capital exp
Slide 17: 2007 dividend
Enel SpA 2007 results Investor Relations 2007 dividend (€c/share) 49 49 On the results of 2006 2007 16
Slide 18: Agenda
Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Networks – International – Iberia & Latin America • Questions and answers • Annexes 17
Slide 19: Strategy overview
Enel SpA 2008-2012 strategy Investor Relations Strategy overview March 2006 March 2007 Priorities for 2006-2010 Priorities for 2007-2011 • Retain market leadership in • Leadership in the domestic Italy in a liberalising market market • International growth through • International growth acquisitions
Slide 20: Strategic priorities
Enel SpA 2008-2012 strategy Investor Relations Strategic priorities ••Consolidation Consolidationand andvalue value enhancement enhancement of newacquisitions of new acquisitions An An ••Leadership Leadershipin incore coremarkets markets integrated integrated international international ••Vertical V
Slide 21: Endesa update
Enel SpA 2008-2012 strategy Investor Relations Endesa update Overview • Leadership positions in Spain and Latin America • Close working relationship with Acciona • Strong earnings growth potential Spain • Investment in new capacity: CCGT generation increases 24% by 2012 • Cleaner, more balanced prod
Slide 22: Russia update
Enel SpA 2008-2012 strategy Investor Relations Russia update Highly attractive market • GDP growth • Liberalisation on track • Domestic market price increasing First vertically integrated presence in the sector • Upstream gas: 40% stake in SeverEnergya • Power generation: 59.8% stake in OGK-5 • Supp
Slide 23: Balanced activities
Enel SpA 2008-2012 strategy Investor Relations Balanced activities 2012 EBITDA Group production mix Regulated and unregulated businesses 131.4 (TWh) 335.0 (TWh) 10.9% 20.3% 22.5% 35% 14.7% 65% 28.6% 29.1% 8.1% 10.0% 5.1% 5.4% 23.2% 22.1% 2006 2012 Generation & sales Oil & gas Coal Other renewables N
Slide 24: Upstream & midstream gas integration
Enel SpA 2008-2012 strategy Investor Relations Upstream & midstream gas integration Strategic lines 2007 achievements Further targets Participating in SeverEnergya • Opportunities in Upstream E&P projects identified target areas Developing GALSI • LNG terminal in Sicily Midstream transport, storage,
Slide 25: Renewables (MW)
Enel SpA 2008-2012 strategy Investor Relations Renewables (MW) North America Italy South-Eastern Europe Total capacity (MW) 2,781 Other 1,602 Geothermal 7,382 Wind 1,536 86 Mini-hydro 837 472 467 80 2007 2012 2007 2012 2007 2012 3,112 4,752 Latin America Iberia 47 France 678 1,131 857 897 664 504 1,
Slide 26: Nuclear
Enel SpA 2008-2012 strategy Investor Relations Nuclear Spain1,2 Slovakia2 Endesa’s nuclear Slovenske power plants 2,441MW Elektrarne’s nuclear power Technology Plants 2,050MW Westinghouse-PWR 1,000 MW Development of Mochovce units 3 & 4 France Technology Russian-PWR 440MW EPR agreement with EDF Anti
Slide 27: Investment plan
Enel SpA 2008-2012 strategy Investor Relations Investment plan (€mn) Maintenance Growth 37,244 8,043 8,526 8,025 7,002 3,479 5,648 16,038 3,050 3,928 2,855 2,727 5,047 4,975 21,206 4,115 4,147 2,921 2008 2009 2010 2011 2012 Cumulated 2008-2012 Cumulated investment in innovation: 0.6€bn Cumulated inv
Slide 28: Portfolio optimization
Enel SpA 2008-2012 strategy Investor Relations Portfolio optimization Expected completion 2008 •• Disposal Disposalto toEON EON Estimated value •• Non-strategic 2008 Non-strategicnetworks networks 11/15 €bn •• Renewable Renewablebusiness business 2009 •• Potential Potentialadd-on add-on investments
Slide 29: Agenda
Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Networks – International – Iberia & Latin America • Questions and answers • Annexes 28
Slide 30: Strategic priorities
Enel SpA 2008-2012 plan - Domestic Market Investor Relations Strategic priorities ••Consolidation Consolidationand andvalue value enhancement enhancement of newacquisitions of new acquisitions ••Leadership Leadershipin incore coremarkets markets •• Leadership Leadership in in the the free free energ
Slide 31: 2006-2012 electricity free market evolution
Enel SpA 2008-2012 plan - Domestic Market Investor Relations 2006-2012 electricity free market1 evolution (TWh) +1.9% 377 Key market drivers 358 337 340 45 Self-consumption 44 • Full market opening as from 40 43 July 2007 and losses 54 Captive market 62 89 • Capability to reach and manage multi-mill
Slide 32: Electricity market evolution 2006-2012
Enel SpA 2008-2012 plan - Domestic Market Investor Relations Electricity market evolution 2006-20121 Electricity consumption (TWh) Number of customers (mn) 332 37.6 297 314 35.4 35.7 36.1 297 54 ~16% 62 89 ~28% ~48% 124 ~41% 18.6 ~50% 81 27.4 26.3 ~73% ~99% 33.0 ~92% 278 225 154 173 19.0 7.3 0.7 9.8
Slide 33: 2007-2012 gas market evolution
Enel SpA 2008-2012 plan - Domestic Market Investor Relations 2007-2012 gas market evolution1,2 (bcm) 53.2 55.1 50.8 1.2 Other uses 1.2 2.1 30.5 31.5 Residential 28.0 market Industrial 20.7 21.5 22.4 market 2007 2009 2012 Renewed interest in dual energy 1. Excluding gas burnt for thermal generation 2
Slide 34: Enel's targets in 2012
Enel SpA 2008-2012 plan - Domestic Market Investor Relations Enel’s targets in 2012 Electricity free market1 (TWh) Electricity regulated market (TWh) Gas (bcm) Market share22 Market Marketshare 2 Market share share2 Market Marketshare 2 share2 20.8% 32.8% 82.2% 61.0% 9.6% 16.6% 20.8% 32.8% 82.2% 61.
Slide 35: Enel's domestic targets in 2012: electricity free market
Enel SpA 2008-2012 plan - Domestic Market Investor Relations Enel’s domestic targets in 2012: electricity free market1 14.1 Gas, electric and Dual Energy customers on the free market (mn) 8.7 97.1 (TWh) 4.5 72.2 (TWh) 22.6 9.5 Residential 42.2 (TWh) 40.4 52.2 Large businesses (1-100GWh/ year) 0.1 19
Slide 36: Enel forward selling 2007-2010
Enel SpA 2008-2012 plan - Domestic Market Investor Relations Enel forward selling 2007-20101 TWh 2007 2008 2009 2010 Residential 0.1 2.6 2.5 2.4 Business and 19.9 31.0 30.2 28.7 microbusiness Industrial 13.5 15.3 14.7 0.7 Large customers 8.6 8.6 5.8 - Salvaguardia2 7.7 11.8 - - TOTAL SALES 49.8 69.3
Slide 37: Growth in photovoltaic solar energy through Enel.Si
Enel SpA 2008-2012 plan - Domestic Market Investor Relations Growth in photovoltaic solar energy through Enel.Si PV evolution (MWp) 210 Main drivers 128 PV direct • Partnership with world leaders in PV indirect PV production and supply 46 • Strong incentive schemes • Large diffusion on final custome
Slide 38: Cost-to-serve and customer satisfaction
Enel SpA 2008-2012 plan - Domestic Market Investor Relations Cost-to-serve and customer satisfaction of the free energy market Cost to serve (€/customer) Customer satisfaction (1-10) Personnel costs External costs 46 9 50 10 45 8 9 40 9 8 35 7 31 7 30 23 6 25 6 5 3 37 20 4 15 3 10 25 2 20 5 1 0 0 20
Slide 39: Acquisition costs in the free energy market
Enel SpA 2008-2012 plan - Domestic Market Investor Relations Acquisition costs in the free energy market Free energy customers (mn) Acquisition cost (€/customer) 16 50 50 14.1 45 14 40 12 32 35 10 30 8 29 25 8.7 20 6 4.5 15 4 10 2 5 0 0 2007 2009 2012 Efficient use of acquisition channels 38
Slide 40: Agenda
Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Networks – International – Iberia & Latin America • Questions and answers • Annexes 39
Slide 41: Strategic priorities
Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Strategic priorities ••Consolidation Consolidationand andvalue value enhancement enhancement of newacquisitions of new acquisitions ••Leadership Leadershipin incore coremarkets markets •• Investment Investment pla
Slide 42: Market scenario
Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Market scenario Italian energy mix1 (2007) Additional CCGT capacity (GW) Repowering Greenfield 3.4 10.6 0.4 48% 2.3 3.0 4.1 14% 1.1 18% 3.0 20% 3.1 8.3 0.8 2.3 CCGT Oil & Gas ST/OCGT 2007 2008 2009-2010 Target (un
Slide 43: Development of the generation mix
Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Development of the generation mix CCGT conversion Clean coal conversion\ Renewables development <1% • Oil & gas ST/OCGT: ancillary 17.0% 20.0% services market, price spikes, export opportunities 45.0% 24.0% • CCGT
Slide 44: Torre Nord development
Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Torre Nord development 1st unit DeSOx completion 1st dome coal handling system completion 1st unit in operation in 2008, 2nd and 3rd in 2009 2 GW @ 45% thermal efficiency 43
Slide 45: Growth in renewables
Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Growth in renewables (€mn) Investments (€bn) Additional installed capacity (GW) 3.3 Maintenance Growth 0.6 1.4 1.6 0.6 2.7 0.4 1.0 2007-2011 2008-2012 2007-2011 2008-2012 Plan Plan Plan Plan Positive regulatory fr
Slide 46: Innovation
Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Innovation • Enhanced efficiency power plants • Carbon capture and storage technologies • >400€mn investment in 5 years for pilot and demonstration projects Building the long term fossil fuel power plant sustainab
Slide 47: CO2
Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations CO2 Variable costs1 (€/MWh) Enel’s balance 2008-2012 (mton CO2e) CO2 costs Variable costs 73 8 53 40÷45 17 65 36 Expected Clean coal CCGT Allocations Shortage emissions Clean coal strongly competitive even with ve
Slide 48: CO2 Emissions Trading Scheme: 2008-2012
Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations CO2 Emissions Trading Scheme: 2008-2012 CERs – Existing projects portfolio (Mton) 19 75 ~35 • Among top carbon market players 56 • Competitive sourcing; mark to market portfolio >500€mn ~40 • Robust portfolio (75%
Slide 49: Coal and shipping sourcing strategy
Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Coal and shipping sourcing strategy Coverage of sourcing needs (%) Coal sourcing diversification Coal Shipping South Africa ~100 80 70 Colombia 50 Russia Indonesia USA 2008 2009 2008 2009 Total portfolio – Mark to
Slide 50: Power sales & trading
Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Power sales & trading Sales coverage (%) Trading deals in European power markets (TWh) ~300 100 ~140 >50 ~80 2008 2009 2006 2007 2008 Strong protection of Increasing business generation margins opportunities 49
Slide 51: Targets
Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Targets 2008-2012 Enel additional installed capacity (GW) 2008-2012 total capex = 6€bn 1.9 Maintenance Coal 20% Growth Renewables 1.4 80% • Thermal production • Thermal variable cost • Renewables production 50
Slide 52: Agenda
Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Networks – International – Iberia & Latin America • Questions and answers • Annexes 51
Slide 53: Strategic priorities
Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Strategic priorities ••Consolidation Consolidationand andvalue value enhancement enhancement of newacquisitions of new acquisitions ••Leadership Leadershipin incore coremarkets markets •• Cost Cost leadership leadership
Slide 54: Evolution of Enel electricity and gas distribution
Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Evolution of Enel electricity and gas distribution Electricity distributed (TWh) Gas distributed (bcm) Market Marketshare Market 2 11% 16% Marketshare 1 80% 80% share2 11% 16% share1 80% 80% 282 5.0 4.1 3.7 3.5 268 255 2
Slide 55: Cost leadership and operational excellence
Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Cost leadership and operational excellence Opex (€/customer) 80 2001 (128 min ; 80 €/customer) 2002 2003 60 2004 2005 2006 2007 (49 min ; 50 €/customer) 40 Quality of service (min interruption/year) 130 80 30 930€mn year
Slide 56: Network commercial operations
Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Network commercial operations Switching to the free market Commercial quality of service End users on the free market (thousands) # of customer request (mn) Quality index (%) 3.9 +58% 3.8 1,870 98.2 98.3 1,180 June 2007
Slide 57: 2008-2012 electricity tariff revenues
Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations 2008-2012 electricity tariff revenues (€mn) Depreciation Return on RAB 4,850 4,860 Opex Regulated commercial activities 510 Distribution and 680 24% metering 32% 44% 4,340 4,180 2007 2008 2004-2007 2008-2012 RAB1 ~20€bn
Slide 58: Ongoing operational excellence projects
Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Ongoing operational excellence projects Pegaso Pegaso“Lean “LeanSix SixSigma” Power Sigma” Powerand andgas gasintegration integration Work Workforce forcemanagement management ••Continuous Continuousimprovement ••Staff i
Slide 59: Quality of service
Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Quality of service 183 140 80 50 Min. interruption/customer Quality premia 49 44 42 41 2007 2009 2011 2012 430€mn quality premia in 2008-2012 58
Slide 60: Growth in gas distribution
Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Growth in gas distribution End-users (thousands) +7.5% 2,920 2,270 • Drivers for growth: 2,032 – network extension – bid for new concessions • More than 4,000 concessions expiring in 2009 in the Italian market 2007 2009
Slide 61: Innovation
Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Innovation Electronic metering for electricity and gas Smart Grids • Exploitation of remote • Integration and management of gas meters management of renewables • Development of a multi- • Local energy dispatching meterin
Slide 62: Targets
Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Targets Electric network opex 2008-2012 total capex = 6.8€bn 6.7 5.9 5.7 5.4 EU 9% average 80 24% 55 51% 50 50 48 16% UK average 50 2006 2007 2009 2012 €/MWh Gas - Mandatory €/customer Electricity - Mandatory Electricity
Slide 63: Agenda
Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Network – International – Iberia & Latin America • Questions and answers • Annexes 62
Slide 64: Strategic priorities
Enel SpA International Investor Relations Strategic priorities ••Consolidation Consolidationand andvalue value enhancement enhancement of newacquisitions of new acquisitions ••Leadership Leadershipin incore coremarkets markets •• Consolidation Consolidation of of international international presence
Slide 65: Enel's current positioning ex Endesa
Enel SpA International Investor Relations Enel’s current positioning ex Endesa South-Eastern Europe France & Belgium Bulgaria EPR nuclear project Inst. cap. 660MW Net prod. 3.5TWh Wholesale supplier Romania of electricity 1.8TWh Distr. network 53,227km EE distributed 7.3TWh Renewables 500MW Customer
Slide 66: Russia market outlook
Enel SpA International - Russia Investor Relations Market outlook Electricity demand growth (TWh) Increasing dark spread 1,200 2.5 Gas Fuel price index 1,100 2.0 Coal 1,000 1.5 CAGR: 2.5% 900 1.0 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 • Huge market with dramatic growth potential • Un
Slide 67: Enel the first vertically integrated energy operator
Enel SpA Investor Relations International - Russia Enel the first vertically integrated energy operator1 SeverEnergya OGK-5 RusEnergoSbyt Upstream gas Power generation Supply o 40% of a JV with ENI 59.8% of OGK-5 49.5% of RusEnergoSbyt 20% from 2009 (Gazprom call option) • At full production, 40%-50
Slide 68: Overview of OGK-5 assets
Enel SpA International - Russia Investor Relations Overview of OGK-5 assets1 2008-2012 Additional capacity: 723 MW CAPEX: 1.5 €bn Production: from 38 to 51 TWh Tver Region Sverdlovsk Region Konakovskaya GRES • Installed capacity 2.4GW Sredneuralskaya GRES • Fuel gas • Installed capacity 1.2GW • Prod
Slide 69: Market outlook: Centrel
Enel SpA Investor Relations International - Centrel Market outlook Interconnection flows Market fundamentals Nordel System • Demand growth rate: 1.6% CAGR 2007-2012 1.2 TWh Russia • Market prices converging to German ones, Europe’s largest and most liquid market Poland • High interconnection capacit
Slide 70: Market outlook: South Eastern Europe
Enel SpA Investor Relations International – South Eastern Europe Market outlook Centrel 5,6 TWh Market fundamentals • Liberalization, GDP and electricity demand growth Slovenia Romania Croazia • Progressive entry into the EU perimeter Bosnia & Serbia HerzegovinaKosovo Italy 5.6 TWh Montenegro • Stro
Slide 71: Market outlook: France and Belgium
Enel SpA Investor Relations International – France and Belgium Market outlook Market fundamentals • Appealing market fundamentals • Developed and increasingly liquid pools • High level of interconnection with rest of Europe • Clear regulatory framework Enel France1 • Sales (TWh) 1.8 • Anticipated ca
Slide 72: Market outlook: North America
Enel SpA Investor Relations International – North America Market outlook Market fundamentals • Appealing market fundamentals • Clear regulatory framework • Wind market growing at double digit annual rates Enel North America (Renewables) • Capacity (MW) 472 • Production (TWh) 1.2 • EBITDA (€mn) 30 Ne
Slide 73: Financial targets (€mn)
Enel SpA Investor Relations International Financial targets (€mn) Russia Other Centrel SE Europe EBITDA (€mn) Capex (€mn) Capacity (MW) 2008-2012: 8.2€bn 2,662 2,231 18,531 226 15,383 2,516 438 970 1,219 661 1,427 1,048 8,943 8,220 797 109 6,766 380 320 454 569 472 16 15 306 589 661 898 1,699 186 27
Slide 74: Agenda
Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Network – International – Iberia & Latin America • Questions and answers • Annexes 73
Slide 75: Strategic priorities
Enel SpA Investor Relations Iberia & Latin America Strategic priorities ••Consolidation Consolidationand andvalue value •• Solid Solid relationship relationship with with enhancement enhancement of newacquisitions of new acquisitions Acciona Acciona toto capture capture strong strong potential poten
Slide 76: Strong market fundamentals
Enel SpA Investor Relations Iberia & Latin America – Spain and Portugal Strong market fundamentals Mainland peak demand growth (MW) and Energy demand growth (TWh) reserve margin trend Peninsular CAGR: 3.8% Extra peninsular CAGR: 3.6% 303 CAGR 53.5 267 276 251 19 15 16 5.1% 15 49.6 48.1 252 260 284 4
Slide 77: Regulatory framework in evolution
Enel SpA Investor Relations Iberia & Latin America – Spain and Portugal Regulatory framework in evolution Key issues Main features Implications • 100% of customers are eligible Remain the leading player • Gradual cancellation of regulated tariff: in the liberalized market Full market – June 2008: HV
Slide 78: Leading and balanced position in generation and sales
Enel SpA Investor Relations Iberia & Latin America – Spain and Portugal Leading and balanced position in generation and sales Endesa total retail sales1 (TWh) Free market • Strong present position: +16.0% Regulated market /last resort – 41% total sales market share 123 130 143 – 52.6% liberalized ma
Slide 79: Investment plan: capacity addition
Enel SpA Investor Relations Iberia & Latin America – Spain and Portugal Investment plan: capacity addition 2008-12 capacity: +4,838 MW Generation mix evolution mainland1 (MW) Hydro 31.0% 29.0% 3,2001 Peninsular 64% Nuclear 19.0% 74% 21.0% 400 CCGT 12.0% 26.0% Coal 30.0% Islands 1,238 26.0% Oil & gas
Slide 80: Strong position in CO2 emission rights
Enel SpA Investor Relations Iberia & Latin America – Spain and Portugal Strong position in CO2 emission rights 2008-2012 emissions and rights1 (mton CO2) 33 Deficit to be 86 covered by 53 213 Emission 127 rights assigned 0 Emissions Rights CDMs2 Market purchase Projects for 91mtons of CO2 with ERPA
Slide 81: Leading position in distribution and synergy plan
Enel SpA Investor Relations Iberia & Latin America – Spain and Portugal Leading position in distribution and synergy plan Distribution – Interruption time (h:mm/year) Investments (€mn/year) Spain 02:54 Endesa -22.0% 02:44 02:25 ~900 02:10 <700 02:02 01:51 01:55 01:45 01:37 Not including transmission
Slide 82: Gas market
Enel SpA Investor Relations Iberia & Latin America – Spain and Portugal Gas market Free market Total sales (TWh) Regulated market • Leveraging on +47.0% – strong market growth (4.8%) – good present position 50.0 44.7 0.1 – existing effective sales organisation 33.9 0.7 – Dual fuel offering 2.3 – abi
Slide 83: Targets: Investing for growth
Enel SpA Investor Relations Iberia & Latin America – Spain and Portugal Targets EBITDA (€mn) 2008-2012 capex: 10.3€bn CAGR: 6.8% 5,038 Other 4,226 7% Distribution 3,619 7 Generation 36% 57% 20071 2009 2012 Investing for growth 1. Net of asset disposal 82
Slide 84: Chile, Colombia & Peru – market outlook
Enel SpA Investor Relations Iberia & Latin America – Latam Chile, Colombia & Peru – market outlook Monomic 2007-2012 2012 Country Regulatory regulated Demand reserve Risk (S&P framework price ($/MWh) Growth margin rating) (CAGR) Chile 2007 81.0 18% A+ Advanced 2004 41.6 6.5% and stable 2002 33.1 Per
Slide 85: Leadership in the Andean area in generation and distribution
Enel SpA Iberia & Latin America – Latam Investor Relations Leadership in the Andean area in generation and distribution Colombia Colombia Generation Chile Generation Chile • A total of 259MW to be added • A total of 259MW to be added Generation Generation Distribution • A total of 1,480MW to be adde
Slide 86: New capacity addition and increase in distribution efficiency
Enel SpA Iberia & Latin America – Latam Investor Relations Brazil – Market fundamentals and strategy Country Countryfundamentals fundamentals Endesa plan highlights Monomic Endesa plan highlights Monomicregulated regulated 2007-2012 2012 2007-2012 2012 Price ($/MWh) demand demandgrowth reserve Price
Slide 87: Improving regulatory framework ….opportunities for growth
Enel SpA Iberia & Latin America – Latam Investor Relations Argentina – Market fundamentals and strategy Country Countryfundamentals fundamentals Endesa Endesaplan planhighlights highlights Monomic regulated 2007-2012 2012 Monomic regulated 2007-2012 2012 Price Price($/MWh) demand demandgrowth reserv
Slide 88: Targets: Investing for growth
Enel SpA Investor Relations Iberia & Latin America – Latam Targets EBITDA (€mn) 2008-2012 capex: 6.5€bn CAGR: Other 6.5% Distribution Generation 3,474 2,825 Argentina 2,541 7% 8% Chile Brazil 36% 7 26% 36% 53% 11 Peru Colombia 11% 19% 2007 2009 2012 A total of 2,138MW to be added Investing for growt
Slide 89: Best practice sharing and economy of scale savings
Enel SpA Investor Relations Iberia & Latin America Best practice sharing and economy of scale savings (€mn) 54 1,064 Further 734 734 680 16 synergies Corporate Margin increase 7 31 54 54 & other Energy Capex mngmt 94 Opex 282 430 Distribution 216 175 525 Iberia 1012 330 223 404 Generation 123 132 Pr
Slide 90: A new wave of investment
Enel SpA Investor Relations Iberia & Latin America Overall investments Investment plan 2008-2012 (€mn) 24.4 M&A 3.5 6€bn Organic complementary (Greece, 2.5 Morocco and other markets) • Strong financial potential 0.6 Miscellaneous 1.0 Renewables • Organic growth: 18.4€bn Latin America organic 6.5 • C
Slide 91: Targets: Double digit income growth
Enel SpA Iberia & Latin America Investor Relations Targets EBITDA (€mn) Ordinary income after taxes and minority interests CAGR: 8.9% CAGR: 10.9% 9,491 3,461 6,200 2,061 2007 homog 2012 2007 homog 2012 Double digit income growth Note: figures relating to 100% of Endesa 90
Slide 92: Enel Union Fenosa Renovables
Enel SpA Iberia & Latin America Investor Relations Enel Union Fenosa Renovables Installed capacity (MW) EBITDA (€mn) CAPEX: 1,888 €mn CAGR: 20% CAGR: 29.3% Other 1,794 Wind 1,114 322 722 202 24% 89 76% 2007 2009 2012 2007 2009 2012 • Favourable regulatory conditions • Strengthened development organi
Slide 93: Enel Latin America
Enel SpA Iberia & Latin America Investor Relations Enel Latin America Installed capacity (MW) EBITDA (€mn) CAPEX: 1,085 €mn CAGR: 11.2% CAGR: 17.3% Geothermal Wind Hydro 1,131 264 664 669 161 33% 119 39% 28% 2007 2009 2012 2007 2009 2012 • Geothermal development in Central America and Chile • Hydro
Slide 94: Financial targets (€mn)
Enel SpA Iberia & Latin America Investor Relations Financial targets (€mn) EBITDA (€mn) Capex (€mn) EUFER2 EUFER2 Enel Latin America Enel Latin America Endesa1 Endesa1 6,789 18,393 161 5,410 264 102 945 4,320 162 44 119 1,085 6,364 5,146 4,157 16,363 2007 2009 2012 2008-2012 1. Based on proportional
Slide 95: Agenda
Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Network – International – Iberia & Latin America • Questions and answers • Annexes 94
Slide 96: Agenda
Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Network – International – Iberia & Latin America • Questions and answers • Annexes 95
Slide 97: Fuel price scenario
Enel SpA Strategic annexes - Generation Investor Relations Fuel price scenario1 Brent ($/bbl) Coal2 ($/ton) 103 88.5 83 75 82 72.5 2007 2009 Long-term 2007 2009 Long-term (2012) (2012) 1. Consensus figures 2. CIF ARA (Rotterdam) 96
Slide 98: Italian market overview: electricity and gas consumption
Enel SpA Operational annexes Investor Relations Italian market overview: electricity1 and gas consumption2 Electricity production (TWh) Gas consumption (bcm) +0.7% 337.5 339.8 +0.5% 45.0 45.9 84.5 84.9 2.2 2.1 197.3 207.3 31.5 34.1 20.6 20.7 103.9 94.2 30.2 28 -8.7 -7.6 2006 2007 2006 2007 Import Ot
Slide 99: Italian market overview: electricity sales
Enel SpA Operational annexes Investor Relations Italian market overview: electricity sales1 Eligible market2 (TWh) Free market (TWh) Enel’s free customers3 (thousand) -11.1% +12.1% 1,226.1 163.1 154.4 +78.9% 173.1 -14.9% 145.0 22.3 39.9 +0.8% 120.4 102.5 297.5 132.1 133.2 42.7 -0.5% 42.5 2006 2007 2
Slide 100: Enel's international electricity sales
Enel SpA Operational annexes Investor Relations Enel’s international electricity sales Volumes sold (TWh) +22.8% 53.9 17.2 2006 20071 International sales on Enel’s total sales 10.8% 27.5% 1. Includes proportional consolidation of Endesa in 4Q07 99
Slide 101: Enel's gas sales
Enel SpA Operational annexes Investor Relations Enel’s gas sales Volumes sold (bcm) Customers (thousand) +5.6% +8.9% 2,331 2,462 4.5 4.9 2006 2007 2006 2007 1. Net of energy dispatched in previous years 100
Slide 102: 2007 Group installed capacity by source and location
Enel SpA Operational annexes - Generation Investor Relations 2007 Group installed capacity: breakdown by source and location MW Hydro Renewables Nuclear Coal CCGT Oil & gas - other ST/OCGT Italy 14,401 990 - 4,959 5,962 14,084 Iberia 4,419 1,302 2,441 4,687 2,235 2,491 Centrel 2,329 - 2,050 1,254 -
Slide 103: 2007 Group net production by source and location
Enel SpA Operational annexes - Generation Investor Relations 2007 Group net production1: breakdown by source and location TWh Hydro Renewables Nuclear Coal CCGT Oil & gas FY07 FY06 - other ST/OCGT Italy 21.2 5.7 - 28.6 23.1 15.6 94.2 103.9 Iberia 1.9 0.9 4.1 9.8 1.9 1.4 19.9 6.1 Centrel 4.2 - 14.1 3
Slide 104: Production mix
Enel SpA Operational annexes - Generation Investor Relations Production mix -9.3% 103.9 (TWh) 94.2 (TWh) 25.5% 16.6% Group production mix 24.6% 18.7% Domestic +16.8% Domestic 26.8% 30.3% 5.4% 6.0% 131.4 (TWh) 153.5 (TWh) 23.6% 22.5% 20.3% 11.9% 18.0% 2006 2007 14.7% 28.6% 29.5% +115.6% 8.1% 11.8% 5.
Slide 105: CO2 emissions vs. allowances
Enel SpA Operational annexes – Domestic Generation & Energy Management Investor Relations CO2 emissions vs. allowances CO2 emissions (mton) Allowances Deficit 2006 41.0 10.5 51.6 2007 40.8 6.0 46.8 104
Slide 106: Enel's electricity and gas distribution
Enel SpA Operational annexes Investor Relations Enel’s electricity and gas distribution Volumes distributed in Italy1 (TWh) Volumes distributed abroad (TWh) +0.3% 255.0 255.8 +243.7% 43.3 12.6 2006 2007 2006 2007 Volumes distributed (bcm) End users (thousand) +0.4% 2,023 2,032 -5.4% 3.7 3.5 2006 200
Slide 107: Income statement
Enel SpA Financial annexes Investor Relations Income statement €mn 2006 2007 % Operating revenues 38,513 43,673 13.4 Operating costs 30,494 33,650 10.3 EBITDA 8,019 10,023 25.0 % of revenues 20.8% 23.0% EBIT 5,8191 6,990 20.1 % of revenues 15.1% 16.0% 106
Slide 108: EBIT by business area
Enel SpA Financial annexes Investor Relations EBIT by business area (€mn) +20.1% 6,990 S&H1 +187.9% Market 5,819 International 1,494 I&N G&EM 519 +9.4% 2,833 2,589 +17.9% 2,205 2,600 512 109 -6 -46 2006 2007 1. Including intercompany adjustments 107
Slide 109: Balance sheet
Enel SpA Financial annexes Investor Relations Balance sheet €mn 2006 2007 % Net financial debt 11,690 55,791 377.3 Shareholders’ equity 19,025 23,789 25.0 Net capital employed 30,715 79,580 159.1 108
Slide 110: Debt structure
Enel SpA Financial annexes Investor Relations Debt structure • Average debt maturity: 5 years and 10 months • Average cost of debt: 5.1% • (Fixed+hedged)/Total long-term debt: 51% • (Fixed+hedged)/Total net debt: 47% • Rating: S&P’s = A-/A-2 C.W. negative; Moody’s = A2/P-1 C.W. negative €mn 2006 200
Slide 111: Financial debt evolution
Enel SpA Financial annexes Investor Relations Financial debt evolution €m 12.31.2005 12.31.2006 09.30.2007 12.31.2007 Bank loans – maturities > 12 months 2,782 3,677 5,807 28,343 Bonds – maturities > 12 months 8,043 8,375 15,780 22,365 Other loans – maturities > months 142 142 101 1,447 Long-term fi
Slide 112: Financial debt by subsidiary
Enel SpA Financial annexes Investor Relations Financial debt by subsidiary €mn Enel Endesa EFI1 EIH2 Slovenské EP3 ED4 Other Total SpA Bonds 14,758 6,313 2,481 571 193 - - 82 24,398 Loans 12,190 4,886 7,709 - 345 1,057 1,851 767 28,804 Other LT debt (965) (68) - - 17 - - (44) (1,059) Commercial pape
Slide 113: Long-term debt maturity profile as of December 31, 2007
Enel SpA Financial annexes Investor Relations Long-term debt maturity profile as of December 31, 2007 7,667 Floating rate Fixed rate 12,913 11,827 12,787 1,195 1,181 1,335 1,535 1,698 338 1,211 1,197 2008 2009 2010 2011 2012 After 2012 112
Slide 114: Financial debt statistical evolution
Enel SpA Financial annexes Investor Relations Financial debt statistical evolution Average cost of debt Average residual maturity 6.2% 5.9% 7:7 7:7 5.5% 5.2% 5.1% 6:4 5:10 4.7% 4.6% 4.4% 4.4% 4.3% 5:4 5:2 4:1 4:9 4:4 3:11 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1998 1999 2000 2001 2002 200
Slide 115: Domestic Market
Enel SpA Financial annexes Investor Relations Domestic Market €mn 2006 2007 % Revenues 21,360 22,271 4.3 EBITDA 167 325 94.6 EBIT (6) 109 - Capex 56 59 5.4 Headcount 5,176 4,772 -7.8 114
Slide 116: Domestic Generation & Energy Management
Enel SpA Financial annexes Investor Relations Domestic Generation & Energy Management €mn 2006 2007 % Revenues 15,657 18,207 16.3 EBITDA 3,157 3,541 12.2 EBIT 2,205 2,600 17.9 Capex 897 1,167 30.1 Headcount 9,573 9,306 -2.8 115
Slide 117: Domestic Infrastructure & Network
Enel SpA Financial annexes Investor Relations Domestic Infrastructure & Network €mn 2006 2007 % Revenues 5,707 5,762 1.0 Power 5,421 5,437 0.3 Gas 286 325 13.6 EBITDA 3,418 3,726 9.0 Power 3,297 3,544 7.5 Gas 121 182 50.4 EBIT 2,589 2,833 9.4 Power 2,558 2,743 7.2 Gas 31 90 190.3 Capex 1,459 1,587 8
Slide 118: International activities
Enel SpA Financial annexes Investor Relations International activities €mn 2006 2007 % Revenues 3,068 7,654 149.5 EBITDA 918 2,380 159.3 EBIT 519 1,494 187.9 Capex 467 1,983 324.6 Headcount 13,861 31,754 129.1 117
Slide 119: Services & Holding
Enel SpA Financial annexes Investor Relations Services & Holding €mn 2006 2007 % Revenues 2,339 2,097 -10.3 Holding 1,178 950 -19.4 Services & other 1,161 1,147 -1.2 EBITDA1 359 51 -85.8 Holding 177 (59) -133.3 Services & other 179 130 -27.4 EBIT 512 (46) -109.0 Holding 423 (75) -117.7 Services & ot
Slide 120: Services & Holding - Continued
Enel SpA Financial annexes Investor Relations Services & Holding - Continued €mn 2006 2007 % Capex 84 133 58.3 Holding 13 19 46.2 Services & other 71 114 60.6 Headcount 5,237 4,958 -5.3 Holding 657 735 11.9 Services & other 4,585 4,223 -7.9 119
Slide 121: Capex by business area
Enel SpA Financial annexes Investor Relations Capex by business area (€mn) +20.1% 4,929 133 +58.3% S&H 59 Market +66.4% International I&N G&EM 1,983 2,963 +324.6% 84 56 467 1,587 +8.8% 1,459 1,167 +30.1% 897 2006 2007 120
Slide 122: 2007 non-recurring items analysis
Enel SpA Financial annexes Investor Relations 2007 non-recurring items analysis €mn 2007 Energy adjustment 70 Reimbursement for higher charges paid in previous years1 45 Total 115 1. Recognition of lower charges in respect of fees for public land usage pursuant to law 266/05 paid in previous years 1
Slide 123: Disclaimer
Enel SpA Investor Relations Disclaimer THESE SLIDES HAVE BEEN PREPARED BY THE COMPANY SOLELY FOR THE USE DURING INVESTORS’ MEETINGS. THE INFORMATION CONTAINED HEREIN HAS NOT BEEN INDEPENDENTLY VERIFIED. NONE OF THE COMPANY OR REPRESENTATIVES SHALL HAVE ANY LIABILITY WHATSOEVER IN NEGLIGENCE OR OTHER
Slide 124: Contact us
Enel SpA Investor Relations Contact us Investor Relations Team (investor.relations@enel.it) • Luca Torchia (Head of IR) +39 06 83053437 • Elisabetta Ghezzi +39 06 83052708 • Donatella Izzo +39 06 83057449 • Fausto Sblandi +39 06 83052226 Visit our website at: www.enel.it (Investor Relations) 123