Enel SpA · MIL:ENEL
Enel SpA — H1 2006 Earnings Presentation
58 slides from Enel SpA's earnings presentation, Sep 7, 2006
Slide 1: 2006 Interim results
2006 Interim results Rome, 7 September 2006 0
Slide 2: Agenda
Enel SpA Investor Relations Agenda f 2006 Interim results Luigi Ferraris f Divisional update Fulvio Conti – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Network – International Activities f Closing remarks Fulvio Conti f Annexes 1
Slide 3: Agenda
Enel SpA Investor Relations Agenda f 2006 Interim results Luigi Ferraris f Divisional update Fulvio Conti – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Network – International Activities f Closing remarks Fulvio Conti f Annexes 2
Slide 4: Results overview
Enel SpA 2006 Interim results Investor Relations Results overview €m n 1H2005 1H2006 % Revenues 16,152 19,065 18.0% Ebitda(1) 4,202 4,361 3.8% Group net income 1,915 1,978 3.3% of which net ordinary income(2) 1,587 1,722 8.5% Net debt (3) 12,312 14,077 14.3% Profitability steadily growing (1) 1H05 E
Slide 5: Operational data: Italian market overview
Enel SpA 2006 Interim results Investor Relations Operational data: Italian market overview Electricity – Total demand(1) (TWh) Gas – Total consumption (bcm)(2) +2.1% +1.6% 163.4 166.8 44.7 45.4 Import 20.6 26.7 Consumption 27.1 by end-users(3) 27.7 141.5 150.6 Net production Thermal 17.0 18.3 genera
Slide 6: Operational data: Enel’s domestic market division
Enel SpA 2006 Interim results Investor Relations Operational data: Enel’s domestic market division Electricity – Total market sales(1) (TWh) Electricity – Enel free market customers (thousand) +2.1% 152.9 156.1 20.5 +12.7% 23.1 Regulated 72.6 market Enel 64.8 61.3 -5.4% +5.6% 15.7 58.5 61.8 Free mar
Slide 7: Operational data: Enel’s domestic market division
Enel SpA 2006 Interim results Investor Relations Operational data: Enel’s domestic market division Gas – Total market sales (bcm)(1) Gas – Enel customers (thousand) -2.2% +10.4% 27.7 27.1 2,235 2,025 24.7 -1.2% 24.4 Enel 3.0 -10.0% 2.7 1H2005 1H2006 1H2005 1H2006 2/2 (1) Source: company workout on I
Slide 8: Operational data: Enel’s domestic G&EM division
Enel SpA 2006 Interim results Investor Relations Operational data: Enel’s domestic G&EM division Domestic Net Production Mix 55.5 (TWh) 53.1 (TWh) Oil & Gas ST/OCGT 26.4% 28.5% Gas CCGT 20.3% 16.7% Coal 25.3% 25.7% Other renewables 4.8% 5.2% Hydro 23.2% 23.9% 1H2005 1H2006 Market share (net producti
Slide 9: Operational data: Enel’s domestic I&N division
Enel SpA 2006 Interim results Investor Relations Operational data: Enel’s domestic I&N division Electricity – Volumes distributed (TWh) Electricity – End users (thousand) +1.7% +0.5% 124.2 126.3 30,061 30,214 1H2005(1) 1H2006 1H2005 1H2006 Gas – Volumes distributed (mcm) Gas – End users (thousand) -
Slide 10: Operational data: Enel’s international activities
Enel SpA 2006 Interim results Investor Relations Operational data: Enel’s international activities Electricity sold (GWh) Electricity distributed (GWh) +49.9% +63.6% 6,222 4,960 3,309 3,804 1H2005 1H2006 1H2005 1H2006 1/2 9
Slide 11: Operational data: Enel’s international activities
Enel SpA 2006 Interim results Investor Relations Operational data: Enel’s international activities International Net Installed Capacity(1) (MW) International Production Mix 7.0 (TWh) 9.8 (TWh) 9,996 Oil & Gas 1.0% 10.9% 39.2% 58.6% 3,786 Coal 25.8% Nuclear Renewables 30.5% 34.0% 1H2005 1H2006 1H2005
Slide 12: EBITDA evolution (€mn)
Enel SpA 2006 Interim results Investor Relations EBITDA evolution (€mn) +159mn +87 -384 +158 +141 4,361 4,202 +157 162 Market 75 Gen. & 1,850 Energy 2,234 Mgmt 1,736 Infrastr. & Network 1,579 373 International 215 240 Services & 99 Holding(1) 1H2005 Market Gen. & Infrastr. & Inter- Services & 1H2006
Slide 13: EBITDA evolution: domestic market division
Enel SpA 2006 Interim results Investor Relations EBITDA evolution: domestic market division (€mn) +87mn +86 162 +40 -39 75 1H2005 Electricity Gas Non- 1H2006 recurring 12
Slide 14: EBITDA evolution: domestic G&EM division
Enel SpA 2006 Interim results Investor Relations EBITDA evolution: domestic G&EM division (€mn) -384mn +308 -422 2,234 -270 1,850 1H2005 Generation Fair value Non 1H2006 margin bilateral contracts recurring with SB 13
Slide 15: EBITDA evolution: domestic I&N division
Enel SpA 2006 Interim results Investor Relations EBITDA evolution: domestic I&N division (€mn) +157mn -21 +85 1,736 1,579 +93 1H2005 Electricity Gas Non 1H2006 recurring 14
Slide 16: EBITDA evolution: international division
Enel SpA 2006 Interim results Investor Relations EBITDA evolution: international division (€mn) +158mn +24 373 +31 +44 60 Americas +70 50 Bulgaria 215 -11 49 Romania Americas 36 Bulgaria 19 70 Slovakia Romania 5 Iberia 155 144 Iberia 1H2005 Iberia Slovakia Romania Bulgaria Americas 1H2006 15
Slide 17: EBITDA evolution: services & holding
Enel SpA 2006 Interim results Investor Relations EBITDA evolution: services & holding (€mn)(1) +141mn +34 240 +23 +84 99 1H2005 Import Non- Other 1H2006 recurring (1) Including -11€mn and +9€mn intercompany adjustments in 1H05 and 1H06, respectively 16
Slide 18: EBITDA: consolidated non-recurring items dynamics
Enel SpA 2006 Interim results Investor Relations EBITDA: consolidated non-recurring items dynamics (€mn) 4,361 4,202 319 362 +5.3% 3,840 4,042 1H2005 1H2006 Net of non-recurring items: +5.3% EBITDA growth 17
Slide 19: Net debt evolution
Enel SpA 2006 Interim results Investor Relations Net debt evolution (€mn) +1,765mn December 31, Cash flow Capex Extra- Net Taxes Dividends June 30, 2005 from ordinary financial 2006 operations activities charges -1,137 -1,033 -251 -118 -12,312 +3,489 -2,715 -14,077 Gearing up towards optimal financi
Slide 20: 2006 Interim dividend
Enel SpA 2006 Interim results - Investor Relations 2006 Interim dividend (€c/share) 44 20 First installment Paid on 22 June 2006 23 November 2006 19
Slide 21: Agenda
Enel SpA Investor Relations Agenda f 2006 Interim results Luigi Ferraris f Divisional update Fulvio Conti – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Network – International Activities f Closing remarks Fulvio Conti f Annexes 20
Slide 22: Domestic market: 97% of 2007 target already achieved
Enel SpA 2006 Interim results – Divisional update Investor Relations Domestic market Free market volumes (TWh) Micro, medium & large businesses Energy intensive 30 29 23 18 17 18 12 Room for further 8 growth vs stated target 11 11 13 10 2005 2006 2007 2007 actual estimated contracted target delivery
Slide 23: Domestic G&EM – Continental power price and imports
Enel SpA 2006 Interim results – Divisional update Investor Relations Domestic G&EM – Continental power price(1) and imports IPEX (€/MWh) Average Powernext (€/MWh) Import (MW) 84 7,500 69 71 6,000 63 44 4,500 3,000 25 1,500 0 M ay-04 Aug-04 Nov-04 Feb-05 M ay-05 Aug-05 Nov-05 Feb-06 M ay-06 Aug-06 Co
Slide 24: Domestic G&EM - Re-powering plan
Enel SpA 2006 Interim results – Divisional update Investor Relations Domestic G&EM - Re-powering plan Enel’s Production Mix Highly efficient CCGTs f S Barbara (380MW) first synchronization on Aug 4, 2006 ~1 Oil & Gas ST/OCGT f Termini Imerese (380MW) 20% 28% Gas CCGT – on track 45% 17% 50% 9% Coal r
Slide 25: Overall CO2 Emission Trading Scheme
Enel SpA 2006 Interim results – Divisional update Investor Relations Overall CO2 Emission Trading Scheme Shortage GEM (mton) Domestic G&EM International 4.0 0.1 14.0 2.0 9.9 1.9 Competitive sourcing actions already 12.0 implemented 8.0 2005 1H2006 1H2006 Total domestic international CO2 shortage ful
Slide 26: Domestic G&EM - CO2 Emission Trading Scheme
Enel SpA 2006 Interim results – Divisional update Investor Relations Domestic G&EM - CO2 Emission Trading Scheme Effects on variable costs(1) (€/MWh) CO2 Fuel cost CO2 = 20€/ton CO2 = 40€/ton 57 64 7 51 14 35 31 15 50 50 20 20 Coal CCGT Coal CCGT New coal plants competitive also with higher CO2 pric
Slide 27: Domestic G&EM - Growth in Renewables
Enel SpA 2006 Interim results – Divisional update Investor Relations Domestic G&EM - Growth in Renewables Investments (€mn) 2006 new and repowered Green Certificates plants @31/08/2006 1,300 MW December 31, Wind Collarmele 6.0 2005 Hydro Rovegro 1.2 800 Geothermal Stramentizzo 0.8 De Cosmo 0.2 Verdu
Slide 28: Domestic G&EM – Gas supply development
Enel SpA 2006 Interim results – Divisional update Investor Relations Domestic G&EM – Gas supply development TAG Pipeline/LNG projects of interest to Enel Other pipeline/LNG projects Import/infrastructure development by 2010 f Porto Empedocle LNG terminal: 8 bcm/y regasification capacity f Galsi pipe
Slide 29: Infrastructure & Network – Efficiency and quality
Enel SpA 2006 Interim results – Divisional update Investor Relations Infrastructure & Network – Efficiency and quality Efficiency – Cash cost (€/customer)(1) Quality – Service level Opex (minutes lost/customer) Capex (2) 119 116 113 64 57 56 84 82 79 35 34 34 2005 LTM(3) 2007 2005 LTM(3) 2007 f Cont
Slide 30: Infrastructure & Network – AMM system
Enel SpA 2006 Interim results – Divisional update Investor Relations Infrastructure & Network – AMM system AMM – Digital meters installed (mn) Remote operations (mn) 6.1 28.4 30.0 27.0 4.4 3.5 2005 LTM(1) Project 2005 LTM(1) 2006 achieved f 74mn remote readings and 2.5mn f Reduction in call-outs rem
Slide 31: International activities
Enel SpA 2006 Interim results – Divisional update Investor Relations International activities Northern Pool Iberia Central EU + Italy + Centrel South East Europe Enel is delivering its growth strategy 30
Slide 32: International activities - Iberia
Enel SpA 2006 Interim results – Divisional update Investor Relations International activities - Iberia Spain f 2,450MW net installed capacity (of which 850MW renewables) f More than 600,000 customers f Important conversion plan to CCGT in place (2,000 MW by 2010, of which 1,150 additional capacity)
Slide 33: International activities – Central EU, Italy and Centrel: France
Enel SpA 2006 Interim results – Divisional update Investor Relations International activities – Central EU, Italy and Centrel France f 2.7 TWh sold in 1H06 f Participation in Flamanville nuclear EPR project (1600 MW) f Acquired Erelis (500 MW wind projects pipeline) Enel is pursuing its growth strat
Slide 34: International activities – Central EU: Slovakia
Enel SpA 2006 Interim results – Divisional update Investor Relations International activities – Central EU, Italy and Centrel Slovakia f 6,350 MW net installed capacity(1) with efficient mix f Deal closed on April 28, 2006 f Active trading with countries nearby f 2 nuclear units (880MW) being review
Slide 35: International activities – South East Europe: Romania
Enel SpA 2006 Interim results – Divisional update Investor Relations International activities – South East Europe Romania f 1.4mn customers (17% market share) f Won bid for Muntenia Sud (1.1 mn customers) f 330€mn investments planned for Banat and Dobrogea f Opportunities in generation assets, mostl
Slide 36: International activities – South East Europe: Bulgaria
Enel SpA 2006 Interim results – Divisional update Investor Relations International activities – South East Europe Bulgaria f 570MW(1) net installed capacity f Participation in Maritza East III Power Co. increased to 73% f Interest in further opportunities in generation and infrastructure Enel is pur
Slide 37: International activities – Russia
Enel SpA 2006 Interim results – Divisional update Investor Relations International activities – Russia Russia f Management contract for NWTPP plant (450 MW) f JV RusEnergoSbyt, trader (7.5TWh sold in 1H06) f Opportunities arising from privatization process Enel is pursuing its growth strategy 36
Slide 38: International activities – Americas
Enel SpA 2006 Interim results – Divisional update Investor Relations International activities – Americas Americas f 600MW renewables f Entered in Panama with Fortuna acquisition (300 MW, 30% of country production) f Acquired 22 small hydro plants in Brasil (100 MW) f Greenfield opportunities in wind
Slide 39: Agenda
Enel SpA Investor Relations Agenda f 2006 Interim results Luigi Ferraris f Divisional update Fulvio Conti – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Network – International Activities f Closing remarks Fulvio Conti f Annexes 38
Slide 40: Progress on the overall financial targets
Enel SpA 2006 Interim results – Closing remarks Investor Relations Progress on the overall financial targets stated target Annual OPEX reduction 2007 vs 2005(1) >200€mn 51€mn 1H06 EBITDA CAGR 2007 vs 2005 ≥3% 4% 1H06/1H05 EBITDA 2007 – International (%) total >10% 8.4% 1H06 ROACE (2007) 17% (2) 10.2
Slide 41: Agenda
Enel SpA Investor Relations Agenda f 2006 Interim results Luigi Ferraris f Divisional update Fulvio Conti – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Network – International Activities f Closing remarks Fulvio Conti f Annexes 40
Slide 42: Income statement
Enel SpA 2006 Interim results - Annexes Investor Relations Income statement (€m n) 1H2005 1H2006 % Operating revenues 16,152 19,065 18.0% Operating costs 12,275 14,340 16.8% EBITDA 4,202 4,361 3.8% % of revenues 26.0% 22.9% EBIT 3,086 3,565 15.5% % of revenues 19.1% 18.7% 41
Slide 43: From EBIT to EPS
Enel SpA 2006 Interim results - Annexes Investor Relations From EBIT to EPS (€m n) 1H2005 1H2006 % EBIT 3,086 3,565 15.5% Net financial charges (352) (281) -20.2% EBT 2,737 3,276 19.7% Net income continuing operations 1,623 2,027 24.9% Net income discontinued operations 383 - - Net income (including
Slide 44: Balance sheet
Enel SpA 2006 Interim results - Annexes Investor Relations Balance sheet (€m n) 31.12.2005 30.06.2006 % Net financial debt 12,312 14,077 14.3% Shareholders' equity 19,416 18,995 -2.2% Net capital employed 31,728 33,072 4.2% 43
Slide 45: 1H2005 EBITDA reconciliation (€mn)
Enel SpA 2006 Interim results - Annexes Investor Relations 1H2005 EBITDA reconciliation (€mn) 4,202 -155 +215 -15 4,202 -120 +75 Gen. & Gen. & 2,234 Energy 2,389 Energy Mgmt Mgmt Network 1,579 Infrastr. & Sales 1,699 & Network Market 75 Services & 215 International 114 99 Holding(1) 1H2005 Network M
Slide 46: Non-recurring items (€mn)
Enel SpA 2006 Interim results - Annexes Investor Relations Non-recurring items (€mn) (€m n) 1H2005 1H2006 Green certificates reimbursement 100 Reserve capacity reimbursement 262 Terna 41 Siemens litigation 51 Terna bonus share 23 Modena capital gain 85 Energy adjustment 71 Gas adjustment 15 Maritza
Slide 47: EBIT by business area (€mn)
Enel SpA 2006 Interim results - Annexes Investor Relations EBIT by business area (€mn) +479mn +15.5% 3,565 3,086 113 +276.7% Market 30 Gen. & 1,413 -14.7% Energy 1,657 Mgmt 1,334 +9.6% Infrastr. & 1,217 Network 251 +96.1% International 128 454 nm Services & 54 Holding(1) 1H2005 1H2006 (1) Including
Slide 48: Market
Enel SpA 2006 Interim results - Annexes Investor Relations Market (€m n) 1H2005 (1) 1H2006 % Revenues 9,186 10,533 14.7% Power 8,304 9,534 14.8% Gas 882 999 13.3% EBITDA 75 162 116.0% Power 13 124 nm Gas 62 38 -38.7% EBIT 30 113 nm Power (25) 85 nm Gas 55 28 -49.1% Capex 16 14 -12.5% Headcount 5,994
Slide 49: Generation & Energy Management
Enel SpA 2006 Interim results - Annexes Investor Relations Generation & Energy Management (€m n) 1H2005 (1) 1H2006 % Revenues 6,597 7,932 20.2% EBITDA 2,234 1,850 -17.2% EBIT 1,657 1,413 -14.7% Capex 320 316 -1.3% Headcount 9,006 9,628 6.9% (1) Headcount figure as of December 31, 2005 48
Slide 50: Infrastructure & Network
Enel SpA 2006 Interim results - Annexes Investor Relations Infrastructure & Network (€m n) 1H2005 (1) 1H2006 % Revenues 2,621 2,767 5.6% Power 2,441 2,603 6.6% Gas 180 164 -8.9% EBITDA 1,579 1,736 9.9% Power 1,474 1,652 12.1% Gas 105 84 -20.0% EBIT 1,217 1,334 9.6% Power 1,148 1,287 12.1% Gas 69 47
Slide 51: International activities
Enel SpA 2006 Interim results - Annexes Investor Relations International activities (€m n) 1H2005 (1) 1H2006 % Revenues 802 1,276 59.1% EBITDA 215 373 73.5% EBIT 128 251 96.1% Capex 116 130 12.1% Headcount 5,024 13,851 nm (1) Headcount figures as of December 31, 2005 nm = not meaningful 50
Slide 52: Services & Holding
Enel SpA 2006 Interim results - Annexes Investor Relations Services & Holding (€m n) 1H2005 1H2006 % Revenues 1,198 1,030 -14.0% Holding 505 520 3.0% Services and other 693 510 -26.4% EBITDA(1) 110 231 110.0% Holding 6 134 nm Services and other 104 97 -6.7% EBIT(1) 65 445 nm Holding 2 390 nm Service
Slide 53: Services & Holding - Continued
Enel SpA 2006 Interim results - Annexes Investor Relations Services & Holding - Continued (€m n) 1H2005 (1) 1H2006 % Capex 36 29 -19.4% Headcount 5,985 5,247 -12.3% Holding 569 623 9.5% Services and other 5,416 4,624 -14.6% (1) Headcount figures as of December 31, 2005 52
Slide 54: Capex by business area (€mn)
Enel SpA 2006 Interim results - Annexes Investor Relations Capex by business area (€mn) -63mn -5.3% 1,200 Market 1,137 16 14 -12.5% Gen. & 320 Energy 316 -1.3% Mgmt Infrastr. & Network 712 648 -9.0% International +12.1% 116 130 Services 36 29 -19.4% 1H2005 1H2006 53
Slide 55: Debt structure
Enel SpA 2006 Interim results - Annexes Investor Relations Debt structure f Average debt maturity: 6 years and 7 months f Average cost of debt: 4.5% f (Fixed+hedged)/Total long-term debt: 86% f (Fixed+hedged)/Total net debt: 72% f Rating: S&P’s = A+/A-1 negative; Moody’s = Aa3/P-1 stable (€m n) 30.0
Slide 56: Income statement – Quarterly analysis (€mn)
Enel SpA 2006 Interim results - Annexes Investor Relations Income statement – Quarterly analysis (€mn) (€m n) 2Q2006 2Q2005 % 1Q2006 Operating revenues(1) 8,814 7,765 13.5% 10,251 Operating costs 6,373 5,883 8.3% 7,967 EBITDA 2,254 2,185 3.2% 2,107 % of revenues 25.6% 28.1% 20.6% EBIT 1,982 1,598 24
Slide 57: Disclaimer
Enel SpA Investor Relations DISCLAIMER THESE SLIDES HAVE BEEN PREPARED BY THE COMPANY SOLELY FOR THE USE AT THE ANALYST PRESENTATION ON ENEL’S 2006 INTERIM CONSOLIDATED RESULTS. THE INFORMATION CONTAINED HEREIN HAS NOT BEEN INDEPENDENTLY VERIFIED. NONE OF THE COMPANY OR REPRESENTATIVES SHALL HAVE AN
Slide 58: Contact us
Contact us Investor Relations Team: Luca Torchia: +39 06 8305 3437 Massimiliano Bevignani: +39 8305 7023 Donatella Izzo: +39 06 83057449 Fausto Sblandi: +39 06 83052226 Federica Todaro: +39 06 8305 9502 investor.relations@enel.it Visit our website at: www.enel.it (Investor Relations) 57