Slide 1: ESG engagement: Seeding energies
ESG engagement Seeding energies September 2016
Slide 2: Agenda
ESG engagement Agenda Enel today Enel sustainable business model From planning to action: creating shared value Financial targets Closing remarks 1
Slide 3: Enel today: operating footprint
ESG engagement Enel today1: operating footprint North America Italy Capacity: 2.5 GW Capacity: 27.8 GW Networks: 1.14 mn km Mexico & Central America End users: 31.6 mn Capacity: 1.0 GW Free customers: 10.5 mn Latin America Iberia Capacity: 18.6 GW Capacity: 22.8 GW Networks: 0.32 mn km Networks: 0.3
Slide 4: Enel today: renewable footprint
ESG engagement Enel today1: renewable footprint Installed capacity by geography1 Net production by technology2 2% 1% 8% 24% 18% 51% 22% 11.2 GW 15% 34.6 TWh 28% 3% 28% Latam Iberia Wind Hydro Geo Italy RoW Solar Other North America RoE 1. As of June 30, 2016 Countries with installed capacity 3 2. LT
Slide 5: Enel today: industrial footprint
ESG engagement Enel today1: industrial footprint Networks Retail Renewables Conventional generation 44% of Group EBITDA 18% of Group EBITDA 12% of Group EBITDA 26% of Group EBITDA 61.5 mn end users 56 mn power customers 11.2 GW installed 75.8 GW installed Total Group production3 39.7 mn smart me
Slide 6: Enel today: sustainability footprint
ESG engagement Enel today: sustainability footprint (2/2) Shareholding structure1,2 SRI investors geographic breakdown2 Inclusion in main sustainability indices2 Since 2004 1% Score 84/100 12% 26% 24% 44% Since 2002 Score 4.1/5 31% Since 2005 24% 8% 30% Performance B Disclosure 100 UK Since 2014 Min
Slide 7: Agenda
ESG engagement Agenda Enel today Enel sustainable business model From planning to action: creating shared value Financial targets Closing remarks 6
Slide 8: Enel is Open Power
ESG engagement Enel is Open Power VALUES Responsibility Each of us is responsible for the group's success, at every level. We devote our energy to the service of people, in order to improve life and make it more sustainable Innovation We live and work with inquisitiveness, we strive to go beyond exi
Slide 9: Materiality assessment and identification of plan issues
ESG engagement Materiality assessment and identification of plan issues Sustainability context and materiality analysis Materiality matrix high Environmental issues Priority of issues in our strategy Social issues Business and Governance issues Plan Issues and 6 disclosure stakeholders 1 Management
Slide 10: 2015-19 sustainability strategic guidelines
ESG engagement 2015-19 sustainability strategic guidelines 9
Slide 11: Sustainable Development Goals (SDGs)
ESG engagement 2015-19 sustainability strategic guidelines: Sustainable Development Goals (SDGs) The global goals for sustainable development Enel commitment to the global SDGs Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all Ensure access to affor
Slide 12: Planning: decarbonization of the energy mix
ESG engagement Planning: decarbonization of the energy mix Issue Industrial actions Related targets/commitments # # +9.2GW of additional renewable Development of renewable capacity capacity by 2019 @ @ -17GW of conventional capacity by Thermal capacity reduction plan 2019 Related SDGs § § 44% of p
Slide 13: Planning: responsible relationships with communities
ESG engagement Planning: responsible relationships with communities Issue Industrial actions Related targets/commitments # # Access to affordable, sustainable 3,000,000 of people, mainly in Africa, and modern energy Asia and Latin America by 2020 @ @ High-quality, inclusive and fair 400,000 people b
Slide 14: Planning: innovation and operational efficiency
ESG engagement Planning: innovation and operational efficiency Issue Industrial actions Related targets/commitments # # Large scale infrastructure innovation: 30m smart meters (o/w 21m second storage, electric vehicles, grid generation) by 2019 digitization and smart meters @ @ Open fiber: ultrabroa
Slide 15: Planning: customer relationship management
ESG engagement Planning: customer relationship management Issue Industrial actions Related targets/commitments # # Active customer and new home and +4.7m new customers in power and energy efficiency services gas free market by 2019 # Innovative technology for integrated energy services Related SDGs
Slide 16: Planning: management, development and motivation of people
ESG engagement Planning: management, development and motivation of people Issue Industrial actions Related targets/commitments # # Appraise performance of all Involvement of 100% of employees employees having worked for at least eligible and reachable through the 3 months in the Group internet in 20
Slide 17: Planning: mitigation of other environmental impacts
ESG engagement Planning: mitigation of other environmental impacts Pillar Industrial actions Related targets/commitments # # Reduction of SO2 specific emissions -30% by 2020 (vs 2010) @ @ Reduction of NOx specific emissions -30% by 2020 (vs 2010) Related SDGs § § Reduction of particulates specific -
Slide 18: Agenda
ESG engagement Agenda Enel today Enel sustainable business model From planning to action: creating shared value Financial targets Closing remarks 17
Slide 19: From planning to action: creating shared value
ESG engagement From planning to action: creating shared value CREATING BUSINESS CREATING SOCIAL VALUE VALUE Investments that address Investments in long-term social and environmental competitiveness objectives CREATING SHARED VALUE Investments in long-term business competitiveness that simultaneousl
Slide 20: Creating shared value: lessons learnt
ESG engagement Creating shared value: lessons learnt Chile - Neltume Colombia - El Quimbo 490MW run-of-the-river hydro plant 400MW hydro plant Consultation process with indigenous Specific initiatives have been communities launched in 2006 to factor established for resident or landowning in
Slide 21: Creating shared value: access to electricity
ESG engagement Creating shared value: access to electricity Project specifications Project description Value created for Enel Location: Candarave district - Ollague (Chile) Offgrid hybrid system: innovative combination of Installation of production capacity , development 2015 beneficiaries:
Slide 22: Creating shared value: social and economic development
ESG engagement Creating shared value: social and economic development Project specifications Project description Value created for Enel Location: San Juan Marcona – Ica (Peru) Safety and first aid training programs Off-grid hybrid model testing 2015 beneficiaries: 500 organization to reduce
Slide 23: Creating shared value: education
ESG engagement Creating shared value: education Project specifications Project description Value created for Enel Location: Bogotá (Colombia) Program aiming at improving professional skills Foster corporate reputation 2015 beneficiaries: 7,290 so that more than 7,000 young people from six
Slide 24: Agenda
ESG engagement Agenda Enel today Enel sustainable business model From planning to action: creating shared value Financial targets Closing remarks 23
Slide 25: Group targets
ESG engagement Group targets GAGR (%) 2015A New 20161 2017 2019 2015-19 Ordinary EBITDA (€bn) 15.0 15.0 15.5 17.3 +4% Net ordinary income (€bn) 2.9 3.2 3.4 4.4 +11% Minimum DPS (€/sh) 0.161 0.18 0.18 Pay-out 50%2 55% 60% 65% +15 p.p. FFO/Net debt 25% 23% 26% 1. Old ordinary EBITDA
Slide 26: Agenda
ESG engagement Agenda Enel today Enel sustainable business model From planning to action: creating shared value Financial targets Closing remarks 25
Slide 27: Closing remarks
ESG engagement Closing remarks Energy sector at the heart of a transition towards environmentally sound and sustainable development Mindset change needed to embrace the future Innovation and opening to the outside world are key factors Creation of value shall combine business and social components 2
Slide 28: Seeding energies: Sustainability and financial plan annexes
Seeding energies Sustainability and financial plan annexes
Slide 29: Detailed 2015 materiality matrix
ESG engagement - Sustainability annexes Detailed 2015 materiality matrix high Creation of economic/financial value Priority of issues in our strategy Quality in relationship Sound governance with customers Innovation & Operational efficiency Occupational health and safety Employees MDM Responsible r
Slide 30: How SDGs relate to GRI-G4 KPIs
ESG engagement - Sustainability annexes How SDGs relate to GRI-G4 KPIs Link with GRI indicators No link with GRI indicators 4 4 17 9 6 8 6 5 7 7 7 3 5 4 6 8 3 8 4 4 4 4 5 4 5 4 2 3 3 3 2 3 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 68 targets are directly linked with specific GRI-G4 KPIs1 1. Consid
Slide 31: Responsible relationships with communities: Futur-E
ESG engagement- Sustainability annexes Responsible relationships with communities: Futur-E Case study Region: Piedmont Province: Alessandria Plant type: 2x88MW oil/gas units Area size: 6.6 ha (owned by Enel) Surrounding context: Industrial / Agriculture Chosen approach: competition of id
Slide 32: Focus on Enel's diversity policy
ESG engagement - Sustainability annexes Management, development and motivation of people: focus on Enel’s diversity policy Gender Both genders to be equally represented in Age staffing e recruiting processes. Tutorship program to support employees Partnership with universities to promote the d
Slide 33: Corporate governance structure
ESG engagement - Sustainability annexes Corporate governance and business: focus on the corporate governance structure Shareholders’ Audit firm meeting Board of Board of directors Statutory advisors Corporate Related Control and Nomination and governance and compensation committee Parties risks comm
Slide 34: Focus on remuneration
ESG engagement - Sustainability annexes Corporate governance and business: focus on remuneration Short-term variable remuneration Changes approved in last AGM Management by objectives (MBO) are based on: Long term variable remuneration (LTI): -Company Guidance Access threshold: from 80% to 90% of
Slide 35: Focus on slate voting mechanism
ESG engagement - Sustainability annexes Corporate governance and business: focus on slate voting mechanism Issue Context Board of Directors’ appointment (9 members) Current shareholding structure and increasing attendancee of institutional shareholders at Annual General Meetings could lead to scen
Slide 36: Enel approach to cyber security
ESG engagement - Sustainability annexes Enel approach to Cyber security Protection of corporate know-how and security of individual citizens Escalation of cyber security breaches: from over 650 attacks in 2014 to over 2,000 in 2015 SIEM (Security Information and Event Management Engine) in place Awa
Slide 37: Enel's presence in main energy and sustainability associations
ESG engagement - Sustainability annexes Enel’s presence in the main energy and sustainability associations Association Role covered Member. The organization promotes sustainable energy development worldwide Member of the Board and active in the network meetings Member of its Steering Committee since
Slide 38: Evolution of industrial footprint (2015-19)
ESG engagement - Financial plan annexes Evolution of industrial footprint (2015-19) Networks Retail Renewables Conventional generation +21 mn 2nd generation +2.5 mn customers digital meters +22.6 TWh sold1 +2.1 GW additons -0.1 GW additons +3.6 mn end users +4.1 mn new customers in +9.2 GW2 addition
Slide 39: 2015-19 plan targets: operational efficiency
ESG engagement - Financial plan annexes Enel Group 2015-19 plan targets: operational efficiency1 (€bn) Maintenance capex Opex Cash cost -22% -11% -14% 3.6 12.8 9.3 2.8 8.3 11.1 FY 2014 2019 FY 2014 2019 FY 2014 2019 2015 achieved: 3.3 €bn 2015 achieved: 9.1 €bn 2015 achieved: 12.4 €bn 1. In nominal
Slide 40: 2015-19 plan targets: growth capex
ESG engagement - Financial plan annexes Enel Group 2015-19 plan targets: growth capex1 Growth capex by business Growth capex by progress 5% 7% 31% 20% 53% 21.4 bn 21.4 €bn 41% 13% 27% 1% 2% Renewables Networks 2015 achieved In operation 2 Tenders awarded In execution Generation Retail To be addresse
Slide 41: Industrial growth: capex in execution
ESG engagement - Financial plan annexes Industrial growth: capex in execution1 In execution by geography In execution by business By year By COD2 2% 6% 2016 38% 2016 22% 39% 42% 1% 2017 34% 2017 50% 16% 8.9 €bn 8.9 €bn 9% 50% 2018 16% 2018 19% 7% 28% 2019 12% 2019 9% Latam Iberia Networks Generation
Slide 42: Active portfolio management
ESG engagement - Financial plan annexes Active portfolio management ~6 €bn ~6 €bn Disposals already finalized1 (€bn) Cashed-in1,2 Additional Slovenske Elektrarne3 2.0 1.6 growth capex 1.0 €bn >2 EGP Portugal 0.5 0.5 Minority EGP North America 0.4 0.4 buy-outs 0.2 €bn <2 SE Hydropower - SF Energy 0
Slide 43: Cash flow generation: cumulative 2016-19
Investor presentation - Financial plan annexes Cash flow generation: cumulative 2016-19 (€bn) 64 (4) - (9) (10) 41 (12) 29 (14.5) 14.5 (12) 2,5 1 3,5 (3.5) Recurring ∆ Provisions 1 ∆ NWC and Income taxes Financial FFO Maintenence FFO after Net growth FCF Net Net FCF Cash-in from Net cash Acquisition
Slide 44: Debt evolution and financial charges
ESG engagement - Financial plan annexes Enel Group 2015-19 plan targets: debt evolution and financial charges Gross and net debt (€bn) Net financial expenses on debt (€bn) ~(9.5) -18% 6,0 % 5,1% 4,9% 57.0 53.5 51.2 5,0 % 13,1 47.5 11,0 8.5 6,5 2,8 4.5 4,0 % 6.5 4,5 4.0 2,6 2,5 2,3 3,0 % 37,4 3
Slide 45: Ordinary EBITDA and net ordinary income evolution
ESG engagement - Financial plan annexes Enel Group 2015-19 plan targets: ordinary EBITDA and net ordinary income evolution Ordinary EBITDA evolution (€bn) Net ordinary income evolution (€bn) 17,3 15,0 15,0 15,5 4,4 2,9 3,2 3,4 2015A 2016 2017 2019 2015A 2016 2017 2019 44
Slide 46: Shareholder remuneration
ESG engagement - Financial plan annexes Enel Group 2015-19 plan targets: shareholder remuneration Dividend policy Minimum DPS (€/sh) +13% CAGR +14% 0,18 65% 65% 0,16 55% 60% 0,14 50% 2015 2016 2017 2018 2019 2014 2015 2016 45% 55% 60% Implicit payout Dividend payment of 0.16€/share on 2015 result
Slide 47: Disclaimer
ESG engagement 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 on En
Slide 48: Contact us
ESG engagement 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 +39 06 83