Endesa S.a. · BME:ELE
Endesa — H1 2021 Earnings Presentation
37 slides from Endesa's earnings presentation, Jul 27, 2021
Slide 1: First Half Consolidated results
First Half Consolidated results July 27th, 2021
Slide 2: Key highlights of the period
Key highlights of the period Financial results European policies Efficiencies Decarbonization Shareholder return 1.9 €bn EBITDA, in European Ongoing and ~53 GW (+~11 GW) Final dividend adverse market regulation consistent renewable pipeline (1.3136 €/share) context, with proposals speeding improveme
Slide 3: European Regulatory update
European Regulatory update Fit for 55 package E.U. Recovery Fund 2030 main targets Status 55% emissions reduction Spanish Plan for the Recovery, Transformation and Resilience approved by the European Commission 40% renewables (from 32%) Spain will receive ~ 20 €bn from the EU recovery fund in 2021 3
Slide 4: Market context
Market context Signs of demand recovery and spike in commodities impact power prices Demand in Spain (mainland), TWh(1) Commodities spot prices Average pool prices(4), €/MWh GAS PVB +192% GAS PVB; +179% Avg: 23.0€/MWh +5.5% 54,00 44,00 +102% 34,00 34.7€/MWh Avg: 8.26€/MWh 24,00 11.9€/MWh 14,00 97.1
Slide 5: Market context: pool price increase underlying rationale
Market context Pool Price increase underlying rationale Pool price rally Implications Average SCVP annual bill (1,2) (€/y) ▪ Electricity prices in Iberia doubled (+102%) mainly due to gas ▪ Customer bill -12% +25% 665 ✓ Regulated residential 600 530 and indexed clients Impact on pool price (1) (€/MW
Slide 6: CO2 clawback proposed regulation
CO2 clawback proposed regulation Main sector allegations CNMC proposed improvements • Based on unfounded assumptions: • Price floor proposal • Non amortized facilities • “Windfall taxes”: relevant full cost due to high taxation • Gradual implementation considering previous hedges since 2005 (~30-40%
Slide 7: Decarbonization: Mainland generation
Decarbonization Mainland generation Decarbonization Mainland generation Installed capacity(1), GW Production(2), TWh CO2 emissions free output, % +2% +1% 17.0 17.3 22.6 22.7 - 0.3 TWh 7.1 + 0.3 GW 7.7 7.4 7.4 -4% 2019 2020 H1 2021 Target 2023 +4% 3.3 3.3 12.7 12.8 73% 85% 88% 89% 6.3 6.3 +0.3 TWh 2.
Slide 8: Decarbonization: Growth in renewable generation capacity
Decarbonization Growth in renewable generation capacity Gross pipeline(1) of renewable projects, GW GENERATION STORAGE • Gross pipeline: 52.9 GW, 7.0 GW with connection points • Generation mature pipeline + In execution: • ~70% Solar 52.9 • ~30% Wind 44.2 9.7 6.2 • Storage (BESS): 9.7 GW 2.5 • 1.6 G
Slide 9: Infrastructure & Networks
Infrastructure & Networks Distributed energy(1), TWh Main operating KPIs +9% % Losses(2) TIEPI(3) (min) 64.2 58.8 -0.3 pp -1% 7.7 7.4 31.5 31.3 H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 Energy to own customers(4), TWh 52.3 54.4 +4.1% Improvements in networks operating KPIs (1) Energy supplied
Slide 10: Electrification: Retail & Endesa X
Electrification Retail & Endesa X Electrification Retail & Endesa X Energy sold(1), TWh Customers, mn Endesa X KPIs +2% 2020 Q1 2021 Q2 2021 2020 H1 2021 Target 2023 42.9 43.7 E-home 11% Liberalized 5.7 5.6 5.7 contracts, mn 1.8 2.0 2.7 6.4 6.5 9.4 9.4 13% Charging Regulated 4.7 4.7 4.5 points, k# (
Slide 11: Electrification: Energy management
Electrification Energy management Liberalized sales(1), TWh Power integrated margin(1), €/MWh Output(2) hedged +2% 35.3 36.0 Unitary revenue 66.9 68.7 12.7 13.2 Variable cost(3) 31.9 42.6 -25% 100% 22.6 22.8 Unitary integrated 74% margin 35.0 (4) 26.1 31.5 €/MWh 21% Net of Short Position H1 2020 H1
Slide 12: Key ESG highlights
Key ESG highlights Sustainable capex(1), €bn Recent milestones ESG Indexes update 85% gross capex devoted to climate actions 11% 1# Electric & Gas Utilities 1% Endesa Circular Economy Academy 1# Worldwide 0.7 Endesa Distribution qualified as Zero Waste(2) 28% 1# Conventional electricity 46% IBEX-35
Slide 13: H1 2021 Financial results
H1 2021 Financial results endesa
Slide 14: Financial highlights
Financial highlights €mn Reported Net Ordinary FFO Net Debt EBITDA Income(2) 1,879 832 492 8,184 -19% -26% -51% +19% H1 2020 1,959(1) 861(3) like for like -4% -3% H1 2020 2,315 1,128 995 6,899(4) (1) H1 2020 like for like EBITDA excluding +515 €mn of provision reversal from the commitments contained
Slide 15: Like-for-like EBITDA evolution
Like-for-like EBITDA evolution €mn -436 €mn -19% 2,315 -80 €mn -166 -4% -12 -178 (1) 1,959 DYoY -356 -32 89 -137 1,879 1,069 903 766 -15% 80 68 157 +131% 1,166 988 956 -3% H1 2020 2020 Provisions H1 2020 Dx Non mainland Gx Gx+Sx (2) H1 2021 Reported Dx Non mainland Gx Gx+Sx EBITDA affected by libera
Slide 16: Regulated business
Regulated business €mn Gross margin EBITDA Total margin: 1,460 €mn (+35 €mn) +2% +5% 1,425 1,460 • Dx: -26 €mn, impacted by the new retributive 1,113 1,056 (1) parameters 157 (1) 196 257 68 • Non mainland: +61 €mn from market recovery and commodity hedging 1,229 1,203 988 956 Lfl fixed costs(2): 347
Slide 17: Liberalized business
Liberalized business(1) €mn Gross margin EBITDA Liberalized margin: 1,386 €mn (-111 -7% €mn) -15% • Electricity & Others: 1,294 €mn (+0 €mn). 1,497 Negative market context offset by +188 903 141(2) 1,386 €mn of CO2 regularization and +48 €mn of (2) 87 766 210 hydro canon • Gas(3): 29 €mn (-111 €mn),
Slide 18: Fixed costs evolution
Fixed costs evolution €mn +0.4% +4 €mn CPI: +26 €mn -27 €mn Growth: +1 €mn -3%(1,2,3) Efficiency: -54 €mn 963 986 959 (3) 967 23 (2) 8 (1) (3) 356 451 486 -6% 458 466 607 Personnel 95 costs O&M costs 609 609 597 +2% 607 607 Capitalized -97 -97 -97 -106 -106 costs H1 2020 Net H1 2020 Other H1 2020 H1
Slide 19: Efficiencies
Efficiencies Generation KPIs Customers KPIs €/MWh Opex/customer, €/cl. Target 2023 Cost to Target 2023 Serve (1) 10.2 11.1 9.7 EGPE H1 2020 H1 2021 20 16 12 unitary cost H1 2020 H1 2021 Digital contracts, mn Digital 5.9 Networks KPIs Interactions 5.1 6.0 €/end user H1 2020 H1 2021 Target 2023 E-bill
Slide 20: Net Ordinary Income
Net Ordinary Income €mn Net Ordinary Income evolution -26% -356 EBITDA -4% on a like for like basis -2 105 -80 62 -25 1,128 Higher financial income driven by the CO2 and 832 the Hydro Canon accrued interests (+82 €mn) Effective tax rate 24.9% (vs. 25.2% in H1 2020) H1 2020 Net Provision EBITDA lfl D
Slide 21: Cash Flow
Cash Flow €mn 0 -174 -1,065 1,879 -85 -63 492 -860 -368 EBITDA Net provision Provisions Working Income Taxes Financial FFO (2) Capex FCF release paid capital Expenses (1) & others PY 2,315 -356 -113 -774 -22 -55 995 -842 153 Delta YoY -19% n.a. +54% +38% 3.9x +15% -51% +2% -341% Cash flow generation
Slide 22: Net financial debt analysis
Net financial debt analysis €mn Net debt evolution Gross debt 8,184 8,367 172 809 6,899 745 7,309 183 368 875 410 7,375 8,184 6,024 6,899 2020 FCF Dividends Others (1) H1 2021 2020 H1 2021 Regulatory working capital(2) Net debt ex-regulatory Cash & Derivatives Net debt working capital Leverage(3) Co
Slide 23: Sustainable Finance
Sustainable Finance New milestones in Sustainable Finance Sustainable Finance Share Key Sustainable Finance actions Sustainability across all products Renewal of SDG7 ECP Program (4,000 €mn) 100% of Endesa´s liquidity Bank guarantee lines 8.4 €bn Gross facilities SDG-Linked (2,185 €mn) Financial (4,
Slide 24: Closing remarks
Closing remarks 2021 Guidance Open to Progressing Key role to confirmed dialogue to find consistently in contribute to backed on efficient decarbonization the Spanish supportive H2 solutions for and economic the pool price electrification, recovery context as well as in through efficiency European f
Slide 25: H1 2021 Annexes
H1 2021 Annexes endesa
Slide 26: Endesa: H1 2021 P&L
Endesa: H1 2021 P&L €mn Gx+Sx Dx Structure Adjustments TOTAL Income 9,069 1,288 248 -333 10,272 Procurements and services -7,393 -85 -24 76 -7,426 Gross margin 1,676 1,203 224 (257) 2,846 Self-constructed assets 42 58 6 0 106 Personel expenses -243 -131 -100 8 -466 Other fixed operating expenses -54
Slide 27: Endesa: H1 2020 P&L
Endesa: H1 2020 P&L €mn Gx+Sx Dx Structure Adjustments TOTAL Income 7,661 1,309 252 -339 8,883 Procurements and services -5,933 -80 -20 72 -5,961 Gross margin 1,728 1,229 232 (267) 2,922 Self-constructed assets 32 58 7 0 97 Personel expenses -59 57 -98 5 -95 Other fixed operating expenses -534 -178
Slide 28: Profitability and credit metrics
Profitability and credit metrics Profitability Return on invested capital Credit metrics +8.0 pp -3.2 pp -13.0 pp 44% 15.4% 43% 36% 12.2% 2.4x 1.7x 30% lfl2.1x H1 2020 H1 2021 2020 H1 2021 2020 H1 2021 Net Ordinary ROIC(1) FFO(2)/Net Debt Net debt/EBITDA Income/EBITDA (1) Calculated on a like-for-li
Slide 29: Installed capacity and output
Installed capacity and output Total net installed capacity, MW Total gross output(1), GWh H1 2021 2020 Var. (%) H1 2021 H1 2020 Var. (%) Mainland 17,402 17,388 +0% 22,809 22,601 +1% Renewables (2) 7,795 7,781 +0% 7,182 7,396 -3% Hydro 4,748 4,749 -0% 3,703 4,714 -21% Wind 2,422 2,423 -0% 2,983 2,424
Slide 30: Gross Capex
Gross Capex Accelerating development in renewables and networks Gross capex(1), €mn Asset development capex, €mn Digitalization capex, €mn By business 3% 12% 15% 14% 1% 42% 46% 743 318 164 55% 28% 1% 81% 2% Net Capex 647 €mn Gross capex +15% vs. H1 2020 Conventional Gx(2) Dx Retail + Endesa X Renewa
Slide 31: Gas operational highlights
Gas operational highlights Volumes sold(1), TWh Key figures 20% 40.7 2020 H1 2021 D Wholesale business 34.0 8.4 3.9 Total customers 1.7 1.7 -1% (mn) Retail 32.4 30.1 Unitary margin (2) 4.1 0.7 -83% (€/MWh) (2) Unitary margin exMtM H1 2020 H1 2021 3.2 2.8 -13% (€/MWh) (1) Rounded figures H1 2021 Resu
Slide 32: Financial debt maturity calendar
Financial debt maturity calendar €bn Gross balance of maturities(1) ▪ Average life of debt: 4.7 years 3.6 ▪ Coverage of 39 months of debt maturities 2.4 ▪ Fixed rate 60% of Gross Debt 1.9 3.1 0.7 0.0 0.2 ▪ 98% in Euros 0.2 0.3 1.6 1.7 ▪ Liquidity 4,005 €mn: 177 €mn in cash and 0.2 0.1 0.5 0.1 0.1 3,
Slide 33: Final headcount
Final headcount 2020 H1 2021 9,591 (1) 2,011 9,274 7,235 1,936 1,136 6,941 2,943 1,094 2,830 2,503 2,368 2,356 2,333 4,637 4,508 3,596 875 3,479 842 440 462 1,041 1,029 Male Female Total Male Female Total Generation & Supply Distribution Structure & others H1 2021 Results - Madrid, 27 July 2021 (1)
Slide 34: Glossary of terms (I/II)
Glossary of terms (I/II) Reference note of Consolidated Item Calculation Management Report Cost of gross financial debt / gross average financial debt: (66 €mn x (360/180) + 5 €mn) / 8,237 €mn Average cost of debt (%) 7.2 = 1.7% (Principal x number of days of term) / (Principal in force at the end o
Slide 35: Glossary of terms (II/II)
Glossary of terms (II/II) Reference note of Consolidated Item Calculation Management Report Gross Capex (€mn) Gross tangible (772 €mn) and intangible (123 €mn) Capex - rights of use (151 €mn) = 744 €mn 7.6 Long and short term financial debt (6,342 €mn + 2,025 €mn) - Cash and cash equivalents (177 €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
Slide 37: IR Team
IR Team Contact us Mar Martinez Head of Investor Relations Investor Relations team Contacts Isabel Permuy Javier Hernandez Email: ir@endesa.es Francesc Trilla Juan Carlos Jimenez Phone: + 34 91 213 15 03 Sonia Herranz + 34 91 213 90 49 Paloma de Miguel Website: www.endesa.com 37