Endesa S.a. · BME:ELE
Endesa — FY2021 Earnings Presentation
44 slides from Endesa's earnings presentation, Feb 22, 2022
Slide 1: Full Year 2021 Consolidated results
INTERNAL Full Year 2021 Consolidated results February 22nd, 2022 5
Slide 2: Key highlights of the period
Key highlights of the period Market context Financial results Decarbonization Dividends 626 MW renewable Global gas market 4.3 €bn EBITDA, capacity addition unbalances 7% above target DPS 1.44 €/share, causing record despite a +11% above target >75 GW pipeline high prices across challenging Europe c
Slide 3: Targets delivery
Targets delivery 2021 Target Operational KPI’s 2021 vs. 2020 Renewable (1) EBITDA (€bn) 4.3 4.0 +7 % capacity 8.4 +8% (GW) Net Ordinary Power free Income (€bn) 1.9 1.7 +12 % customers 5.9 +3% (mn) Gross Capex 2.2 2.1 +5 % RAB (€bn) 11.7 -% (€bn) Gross DPS (€/sh.) 1.44 1.3 +11 % EBITDA Gross Capex 20
Slide 4: Key ESG highlights: Worldwide recognition to Endesa's performance
Key ESG highlights: Worldwide recognition to Endesa’s performance Environment Social Governance Our People Just Transition Plans Revenues, Other Fixed Women in BoD 36% in Improvement in the and continuous Shared Operating Expenses(1) 2021 gender diversity KPIs and CAPEX aligned with Value Creation t
Slide 5: Regulatory developments
Regulatory developments ▪ Temporary fiscal measures to contain electricity bills (reduction of the 7% generation RDL 12/2021-17/2021- Tax, Special Tax on Electricity and VAT) 23/2021 ▪ 2021 System charges reduced by 96% and increased social bonus discounts ▪ Gas levy till 31st March 2022 ▪ Extension
Slide 6: Well on track for full decarbonization of our generation mix
Well on track for full decarbonization of our generation mix Coal capacity evolution, (GW)(1) • - 43% coal capacity: Closure -42% of Litoral plant 5.2 4.8 Non mainland 0.5 • As Pontes coal plant pending 0.2 -43% to receive closure authorization Domestic coal 2.1 2.1 Coal 2.8 Phase out • Just Transit
Slide 7: Greening our generation mix by replacing coal plants with renewables
Greening our generation mix by replacing coal plants with renewables CO2 emissions free Installed capacity(1) (GW) Production(2) (TWh) output -3% +1% 17.3 16.8 46.0 46.4 13.3 - 0.7 TWh 12.6 7.7 + 0.6 GW 8.3 -5% 2019 2020 2021 Target +8% 2024 Nuclear 3.3 Nuclear 25.8 25.5 3.3 73% 85% 82% 92% 6.3 - 1.
Slide 8: Solid pipeline to support renewable growth
Solid pipeline to support renewable growth Gross pipeline(1) of renewable projects (GW) 12% 15 • Gross pipeline: 77 GW 62% ✓ 11 GW Generation mature pipeline + In 20% execution 77 51 ✓ Storage (BESS): 15 GW 7% ✓ ~8 GW with connection points 9 2 (2) Gross Pipeline BESS Early stage Mature pipeline In
Slide 9: +3% increase in liberalized customers in a competitive scenario
+3% increase in liberalized customers in a competitive scenario Power customers(1) Power sales(1) (TWh) Digital Retail KPIs (mn) 2020 2021 -1% -2% Digital contracts (mn) 5.7 6.6 +16% 88.9 87.8 10.4 10.3 13.3 12.6 E-billing (mn) 4.4 5.8 +32% 19.1 18.0 5.7 5.9 +3% Endesa X KPIs 56.6 57.2 4.7 4.4 -8% 2
Slide 10: Integrated electricity margin affected by conjunctural market context
Integrated electricity margin affected by conjunctural market context Liberalized sales(1) (TWh) Integrated margin(1) (€/MWh) Financial KPIs 16.8 TWh -1% 17.6 TWh -4% indexed 2020 2021 indexed sales sales 73.3 72.6 Unitary revenue (€/MWh) 65.4 83.8 +28% (3) 33.8 32.3 27.2 26.0 Variable cost(2) (€/MW
Slide 11: Networks: Positive trend in volumes
Networks: Positive trend in volumes Distributed energy(1) (TWh) RAB (€bn) Operational KPIs +5% -% 125 131 11.7 11.7 2020 2021 NIEPI(2) 1.2 1.2 -% (#) TIEPI(3) 58 61 +5% (min.) Losses(4) 7.1 7.1 - pp (%) 2020 2021 2020 2021 Energy to grid customers(5) (TWh) 106.7 108.9 +2% (1) Energy supplied to cust
Slide 12: Financial results
FY 2021 Financial results encesa
Slide 13: Market context
Market context Spike in commodities impact power prices Demand in Spain (mainland) (TWh)(1) Commodities spot prices Average pool prices (€/MWh) +229% +2.4% 111.9 236.8 242.4 34.0 2020 2021 2020 2021 Y-o-y price increases in Europe Endesa’s area (2) : 2021 By segment (Not adjusted): Adjusted(3) +1.7%
Slide 14: Financial highlights
Financial highlights €mn EBITDA Net Income FFO +12% +3% -11% +6% 3,809 4,053 4,278 1,394 1,435 2,951 2,621 2020 2020 lfl (1) 2021 2020 2021 2020 2021 Net Ordinary Income (2) 2,132 1,902 -11% FY 2021 Results - Madrid, 22 February (1) Net personnel provisions booked in 2020 amounted -244 €mn: -1 €mn i
Slide 15: EBITDA growth backed on managerial efforts and non recurrent items
EBITDA growth backed on managerial efforts and non recurrent items Gross capex by business (€mn) EBITDA by business(1) (€mn) +12% 244 €mn +6% Personnel provisions +225 €mn (2) -151 4,278 DYoY 11% 4,053 400 3,809 -70 46 877 -15% 1,028 880 17% 39% 841 +91% 440 441 2,172 549 2021 non recurrent items: 5
Slide 16: Conventional Gx: affected by challenging market context
Conventional Gx: affected by challenging market context Gross margin (€mn) EBITDA (€mn) • Gross margin: 1,496 €mn -15% -15% (-259 €mn) • Power: - 240 €mn 1,755 • Non mainland: -16 €mn (1) 1,028 1,496 877 534 227 • Wholesale gas: -165 €mn 518 279 • CO2 sentence: +160 €mn 1,221 801 • Lfl fixed costs(2
Slide 17: Renewables: providing growth in EBITDA
Renewables: providing growth in EBITDA Gross margin (€mn) EBITDA (€mn) +60% +91% • Gross margin: 1,007 €mn (+376 €mn) 841 1,007 • +50 €mn from operative improvements • +326 €mn non recurrent from 631 441 2013-2020 hydro canon refund and CO2 sentence • Fixed costs and others: 166 €mn (24 €mn decrease
Slide 18: Customers: +9% EBITDA growth in a competitive scenario
Customers: +9% EBITDA growth in a competitive scenario Gross margin (€mn) EBITDA (€mn) • Gross margin: 1,146 €mn +7% +8% (+72 €mn) 1,146 • +81 €mn from gas retail 1,074 595 126 549 • -17 €mn, power supply 118 50 45 • +8 €mn in Endesa X 956 1,020 545 • Fixed costs and others: 551 503 €mn (26 €mn incr
Slide 19: Networks: performing aligned to expectations
Networks: performing aligned to expectations Gross margin (€mn) EBITDA (€mn) -5% -3% • Gross margin: 2,429 €mn 2,546 2,429 2,035 (-117 €mn), impacted by 1,965 new retributive parameters and lower previous years regularizations 2020 2021 2020 lfl (1) 2021 • Lfl fixed costs(1) and others: Net Capex, R
Slide 20: Efficiencies across all businesses pushed opex down by 7%
Efficiencies across all businesses pushed opex down by 7% Opex(1) evolution (€mn) Efficiency KPIs 2020 2021 -7% Opex/MW -244 (k€/MW) 25 23 -8% 49 5 -198 Cost to Serve 11.1 11.0 -1% (€/cust.) 2,223 (2) 1,979 1,835 Opex/Grid Customer 42 40 -5% (€/cl.) Reported 2020 non Like for CPI Growth Efficiency 2
Slide 21: Net Income evolution
Net Income evolution €mn ▪ 266 €mn net effect impairment in Non mainland ▪ 489 €mn net effect impairment in Non mainland ▪ 450 €mn net effect personnel provisions ▪ -22 €mn disposals of non-financial assets ▪ 22 €mn net effect Public Responsibility Plan • Net Income +3%, Net Ordinary -11% Income -11
Slide 22: Impairment in non mainland business
Impairment in non mainland business Impairments (€mn) 2021 impairment rational 652 • Re-estimation of recoverable value considering: regulated commodities market 404 references (fuel & CO2) 338 and future evolution of the structure of thermal generation • No impact on shareholder’s 2019 2020 2021 re
Slide 23: Cash flow affected by regulatory measures and commodities scenario
Cash flow affected by regulatory measures and commodities scenario €mn 0 -330 -906 -346 -75 4,278 -2,147 2,621 474 (2) EBITDA Net provision Provisions Working Income Taxes Financial FFO Capex FCF release paid capital Expenses (1) & others PY 3,809 244 -258 -497 -229 -118 2,951 -1,730 1,221 Delta YoY
Slide 24: Net debt worsens due to higher dividend and investment effort
Net debt worsens due to higher dividend and investment effort Gross debt(1) (€mn) Net debt evolution (€mn) Financial KPIs 2021E 2020 2021 Δ Net debt/EBITDA 1.8x 2.1x +0.3x 8,806 286 795 10,378 6,853 2,141 Cost of debt 1.7% 1.5% -0.2 bp 875 474 1,572 7,273 420 FFO/Net Debt 43% 30% -13 pp 8,011 8,806
Slide 25: 2021: a record year to bring sustainability across all financial instruments
2021: a record year to bring sustainability across all financial instruments 2021 Sustainability-linked Sustainable Finance instruments (€bn)(1) • Leading role in the Spanish sustainable finance area Amount Pricing (€bn) KPIs adj. • 100% credit and guarantees lines sustainability-linked Loans 2.2 10
Slide 26: 2021 DPS above target
2021 DPS above target (1) 2.014 80% pay-out of 2021 Net Ordinary Income 1.427 1.475 1.437 DPS proposal 2021: 1.437 0.937 (2) €/share Final dividend +11% above CMD guidance (1.3 €/sh.) 0.500 Interim dividend 2018 2019 2020 2021 Final dividend of 0.937 €/share to be paid in July 2022 100% 100% 100% 80
Slide 27: Delivering and exceeding 2021 targets
Delivering and exceeding 2021 targets CAGR 2021 2022 2023 2024 2021-24 EBITDA (€bn) 4.3 4.1 4.5 4.7 +3% Earnings growth Net Ordinary Income (1) (€bn) 1.9 1.8 1.9 2.0 +2% Pay out (%) 80% 70% 70% 70% Value creation Implicit DPS (€/share) 1.44 ~1.2 ~1.3 ~1.3 Implicit Dividend (2) 7.1% ~6% >6% >6% Yield
Slide 28: Closing Remarks
Closing Remarks Main ESG EBITDA and Attracting indexes Sound Net Ordinary new free acknowledge remuneration Ready to Income market Endesa’s to our face the 2022 above target customers commitment shareholders challenges to renewable targets 28 28
Slide 29: Annexes
FY 2021 Annexes encesa
Slide 30: Endesa: 2021 P&L
Endesa: 2021 P&L €mn Conventional Gx Renewables Retail Endesa X Dx Structure Adjustments TOTAL Income 8,135 871 16,176 270 2,575 465 -7,593 20,899 Procurements and services -5,126 158 -17,140 -144 -146 -1 7,035 -15,364 Income and expenses from energy derivatives -1,419 -22 1,984 0 0 0 0 543 Gross ma
Slide 31: Endesa: 2020 P&L
Endesa: 2020 P&L €mn Conventional Gx Renewables Retail Endesa X Dx Structure Adjustments TOTAL Income 5,162 776 11,935 235 2,720 519 -4,297 17,050 Procurements and services -3,421 -145 -10,955 -117 -174 0 3,743 -11,069 Income and expenses from energy derivatives 123 0 -24 0 0 0 -74 25 Gross margin 1
Slide 32: Bridges of 2020 P&L new report
Bridges of 2020 P&L new report €mn Reported in 2020 Adjustments Current report Income 17,579 -529 17,050 Removal of “Income and expenses from Energy derivatives” from “Income” and “Procurements and Procurements and services -11,573 504 -11,069 services” into a new item Income and expenses from energ
Slide 33: Fixed costs evolution
Fixed costs evolution €mn -7% -144 €mn -109 €mn -6%(1,2) 2,223 -244(1) 1,979 -156 (2) 1,823 (3) 1,835 1,714 121 1,147 Personnel 903 -3% costs 947 916 918 O&M costs 1,351 1,351 -3% 1,239 1,151 1,116 Capitalized -275 -275 -275 -320 -320 costs 2020 Net 2020 lfl Other 2020 2021 Other 2021 Reported provi
Slide 34: Installed capacity and output
Installed capacity and output Total net installed capacity (MW) Total gross output(1) (GWh) 2021 2020 Var. (%) 2021 2020 Var. (%) Mainland 16,877 17,388 -3% 46,536 46,142 +1% Renewables (2) 8,389 7,781 +8% 12,794 13,415 -5% Hydro 4,746 4,749 -0% 6,122 7,681 -20% Wind 2,546 2,423 +5% 5,605 5,235 7% S
Slide 35: Gas operational highlights
Gas operational highlights Volumes sold(1) (TWh) Key figures 2020 2021 Δ 10% Total customers (mn) 1.7 1.7 -% 77.0 70.0 Total Gas margin (€mn) 215 131 -39% Total unitary margin(€/MWh) 3.1 1.7 -45% Margin Retail (€mn) 89 170 +91% 2020 2021 Retail unitary margin (€/MWh) 1.3 2.2 +69% (1) Rounded figures
Slide 36: Financial debt maturity calendar
Financial debt maturity calendar €bn Gross balance of maturities(1) 4.1 ▪ Average life of debt: 4.4 years 3.2 0.1 0.1 2.6 ▪ Coverage of 33 months of debt maturities 3.1 0.6 2.9 ▪ Fixed rate 53% of Gross Debt 0.3 1.9 0.3 1.0 ▪ 98% in Euros 0.2 0.1 0.0 0.2 0.1 2022 2023 2024 2025 2026+ ▪ Liquidity 5,5
Slide 37: Final headcount
Final headcount 2020 2021 9,591 9,258 (1) 2,011 1,393 7,235 6,894 1,136 712 4,637 5,037 3,596 3,824 2,356 2,364 875 681 2,503 2,943 2,358 1,213 2,828 1,041 440 470 Male Female Total Male Female Total Distribution Generation & Supply Structure & others FY 2021 Results - Madrid, 22 February 2022 (1) F
Slide 38: Taxonomy: key performance indicators 2021
Taxonomy: key performance indicators 2021 Eligible Aligned Not aligned No Eligible Wind & Solar Hydro (1%) ▪ Trading Retail Gas sales % of the Eligible- Maping as Climate Change Mitigation Hydro (99%) Aligned activities Distribution in Spain without new connections to installations New connections w
Slide 39: Diversity and inclusion
Diversity and inclusion Purpose and ▪ Diversity and inclusion are essential factors to create long term value for employees, clients and all stakeholders. actions ▪ An organic set of actions aimed at: ▪ allowing expression of people uniqueness ensuring non discrimination, equal opportunities, equal
Slide 40: Sustainability projects with communities
Sustainability projects with communities ▪ Continuous CSV promotion in line with three pillars: • Making the value chains of the Business Lines Creating sustainable. shared value • Advancing equity through the business to create strategy equitable outcomes also through its inclusive business model.
Slide 41: 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: (136 €mn) / 9,375 €mn = 1.5% 7 (Principal x number of days of term) / (Principal in force at the end of the period x number
Slide 42: Glossary of terms (II/II)
Glossary of terms (II/II) Reference note of Consolidated Item Calculation Management Report Gross tangible (2,061 €mn) and intangible (328 €mn) Capex - rights of use (213 €mn) + Others (-4 €mn) = Gross Capex (€mn) n/a 2,172 €mn Long and short term financial debt (7,211 €mn + 3,167 €mn) - Cash and ca
Slide 43: 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 44: 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 44