Endesa S.a. · BME:ELE
Endesa — Q1 2018 Earnings Presentation
27 slides from Endesa's earnings presentation, May 8, 2018
Slide 1: Endesa 1Q 2018 Results
Endesa 1Q 2018 Results 08/05/2018
Slide 2: Agenda
1. Highlights and key financial figures 2. Endesa’s performance in 1Q 2018 market context 3. Financial results 4. Final remarks 1Q 2018 Results- Madrid, 8 May 2018 2
Slide 3: Highlights
Highlights Outstanding performance of the liberalized business EBITDA (+113%)… … together with the positive contribution of the regulated businesses, results in a sound increase of total EBITDA (+25%) Adjusted fixed costs reduction -4%(1) Strong Net Income growth (+47%) AGM confirms final gross divi
Slide 4: Regulation
Regulation Experts’ Commission report on Energy Transition Endesa’s strategic vision Experts’ Commission main conclusions Endesa’s vision Electrification Support demand electrification process Renewables Tax and tariff reform Energy efficiency in all Renewable capacity strong growth sectors
Slide 5: Financial results
Financial results €M 1Q 2018 1Q 2017 Change Revenues 5,169 5,223 -1% Gross Margin 1,415 1,236 14% EBITDA 880 702 25% EBIT 508 340 49% Net attributable (1) income 372 253 47% (1) Net Capex 149 111 34% Cash Flow from Operations 24 536 -96% 31.03.2018 31.12.2017 Net financial debt 6,047 4,985 21% (1) F
Slide 6: Market context in 1Q 2018
Market context in 1Q 2018 Demand(1) Electricity wholesale prices Average pool prices Spain (€/MWh) Spain(2) Endesa distribution area(3) -13% 2.9% 2.6% (Not adjusted) 2.0% 1.7% Industry -2.8% 55.6 48.1 Services -1.7% Residential +12.0% 1Q 2017 1Q 2018 Adjusted for weather and working days Not adjuste
Slide 7: Power operational highlights
Endesa’s performance in 1Q 2018 market context Power operational highlights (1) (1) Output (GWh) Electricity sales (GWh) Number of electricity customers (thous.) -2% -1% -0 0.5% 26,627 26,235 18,980 18,512 10,848 10,793 4,307 4,267 3,064 3,085 994 1,214 5,177 5,651 5,255 5,176 -1.5% 6,255 5,557 17,1
Slide 8: Liberalized business
Liberalized business Energy management Energy (TWh) Unitary values breakdown (€/MWh) 64.3 61.9 -1% Unitary revenue (1) Sales 21.6 21.3 Energy +4% 39.8 purchases 5.6 5.9 Unitary variable cost(2) 41.5 -3% Mainland output 15.9 15.4 20.4 +20% 24.5 Unitary margin 1Q 2017 1Q 2018 1Q 2017 1Q 2018 Sound f
Slide 9: Gas operational highlights
Endesa’s performance in 1Q 2018 market context Gas operational highlights Sales (GWh) Number of gas customers (thous.) +4% +1% 27,329 28,299 1,560 1,577 1,318 2,951 2,826 2,842 Unitary margin (1): 246 242 1Q 2017 1Q 2018 €0.6/MWh ~€0.9/MWh 23,185 22,506 1,314 1,335 FY 2017 1Q 2018 Retail CCGT sales
Slide 10: Gross margin evolution
Gross margin evolution Gross margin net of one offs +14% % Chg. +12% 1,415 1,415 Margin €M Reported 1,236 23 1,259 28 131 -3 637 637 +38% 462 506 One offs 1Q17 Gx+Sx 172 MtM gas&others : -€44 M 151 148 148 -14% Non mainland Gx Settlements: €21 M 602 602 630 630 +5% Reported 1Q One offs Adjusted 1Q D
Slide 11: Regulated business
Regulated business Gross margin evolution +1% €M +3% (1) 774 753 28 778 778 Non-mainland Gx -3 148 148 172 151 Dx 630 630 602 602 Reported 1Q Adjusted 1Q Dx Non-mainland Adjusted 1Q Reported 1Q 2017 2017 Gx 2018 2018 Increase of regulated gross margin, benefitting from Distribution improvement (1)
Slide 12: Liberalized business
Liberalized business(1) Gross margin evolution +38% €M +26% 30 8 637 637 32 32 (2) 54 54 462 506 93 24 24 24 551 551 458 458 -20 Reported 1Q 2017 Adjusted 1Q 2017 Electricity + Others Gas Enel X Adjusted 1Q 2018 Reported 1Q 2018 Electricity and others Gas Enel X 26% increase in adjusted liberalize
Slide 13: Fixed costs evolution
Fixed costs evolution 0% €M -4%(1)(2) 534 (1) 557 536 (2) 535 23 1 Personnel 220 235 220 213 -6% costs 346 354 -2% 348 354 O&M costs Capitalized costs -32 -32 -32 -32 1Q 2017 1Q 2017 1Q 2018 1Q 2018 Reported Adjusted Adjusted Reported 4% adjusted fixed costs reduction driven by efficiency plans(1)
Slide 14: EBITDA evolution
EBITDA evolution EBITDA net of one offs +25% % Chg. % Chg. +21% Ebitda Ebitda Reported Adj €M 880 880 1 125 702 725 29 +113% +64% 23 319 319 150 194 One offs 1Q17 80 80 -20% +1% 100 Gx+Sx 79 MtM gas&others : -€44 M Non mainland Gx Settlements: €21 M 481 481 +6% +6% 452 452 Ebitda reported One offs E
Slide 15: From EBITDA to Net Income
From EBITDA to Net Income €M (1) 372 28 5 880 110 3 508 485 372 EBITDA Depreciation EBIT Net Financial Associates Profit before Taxes Minorities Net and Results and Others taxes attributable amortization Income 11% 1Q 2017 702 -362 340 -28 10 322 -66 -3 253 Change (%) +25% +3% +49% n/a -50% +51% +67
Slide 16: Net financial debt analysis
Net financial debt analysis Net debt / 1.4x 1.6x EBITDA ratio 6,047 €M 741 4,985 345 24 FY 2017 Cash flow from Capex(1)(€342 M€) Dividends 1Q 2018 operations + Others Cash Flow from Operations will normalize in next quarters Healthy financial leverage and strong liquidity position 1Q 2018 Result
Slide 17: Gross financial debt structure
Gross financial debt structure as of March 31st 2018 Structure of Endesa's gross debt Gross and net debt €M 6,294 6,294 6,294 5,392 247 407 Floating 43% 6,047 Euro 100% 4,985 Fixed 57% By interest rate By currency FY 2017 1Q 2018 Net debt Cash & Derivatives Average cost of debt 2.1% (vs. 2.4% as o
Slide 18: Final Remarks
Final Remarks Sound EBITDA evolution supported by the very good performance of our liberalized business Continuous delivery on fixed cost reduction Strong Net Income figure Endesa’s strategic vision reinforced by Experts’ Commission report conclusions Well on track to meet 2018 guidance 1Q 2018 Resu
Slide 19: Appendix
Appendix Endesa 1Q 2018 Results 19
Slide 20: Endesa: financial debt maturity calendar
Endesa: financial debt maturity calendar Gross balance of maturities outstanding at 31 March 2018: €6,294 M(1) Bonds and other marketable securities (2) Bank Debt Other debts 4,033 Endesa's 3,393 liquidity covers 42 1,256 26 months of 14 debt maturities 47 491 324 1,200 120 183 433 23 621 16 58 301
Slide 21: Installed capacity and output
Installed capacity and output Total output(1) (GWh) Total output (GWh) -2% GWh 1Q 2018 (and chg. vs. 1Q 2017) Total Output (1) 18,980 18,512 Total 18,512 -2% 3,064 Hydro 2,006 35% 3,085 Nuclear 6,650 -7% 1,120 874 Coal 5,273 -8% 2,946 3,360 Natural gas 1,724 -13% 2,189 1,323 Oil-gas 1,645 3% 994 1,2
Slide 22: Endesa: 1Q 2018 P&L
Endesa: 1Q 2018 P&L Gx+Sx Dx Structure Adjustments TOTAL Income 4,538 681 128 -178 5,169 Procurements and services -3,723 -51 -23 43 -3,754 Gross margin 815 630 105 -135 1,415 Self-constructed assets 5 25 2 0 32 Personnel expenses -121 -64 -40 12 -213 Other fixed operating expenses -293 -110 -80 129
Slide 23: Endesa: 1Q 2017 P&L
Endesa: 1Q 2017 P&L Gx+Sx Dx Structure Adjustments TOTAL Income 4,641 633 151 -202 5,223 Procurements and services 3,978 31 44 -66 3,987 Gross margin 663 602 107 -136 1,236 Self-constructed assets 5 26 1 0 32 Personnel expenses -113 -67 -41 1 -220 Other fixed operating expenses -294 -109 -77 134 -34
Slide 24: New International Financial Reporting Standards (IFRS)
New International Financial Reporting Standards (IFRS) First Adoption IFRS Main Impacts • First Adoption (January 1, 2018): IFRS 15 • Revenue agreements Intangible asset (€71 M) Revenue from • 1 Q 2018: Activation of customer contracts with • Customer acquisition acquisition costs (€12 M) and costs
Slide 25: Glossary of terms (I/II)
Glossary of terms (I/II) Reference note (#) of Consolidated Item Calculation Management Report Average cost of debt (%) (Cost of gross financial debt) / gross average financial debt: €31 M x (365/90) / €6,201 M = 2.1% 4.1 (Principal x number of days of term) / (Principal in force at the end of the p
Slide 26: Glossary of terms (II/II)
Glossary of terms (II/II) Reference note (#) of Consolidated Item Calculation Management Report Long and short term financial debt (€5,008 M + €1,286 M) - Cash and cash equivalents (€240 M) Net financial debt (€M) 4.1 – Derivatives recognized as financial assets (€7 M) = €6,047 M Net financial resul
Slide 27: 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