Endesa S.a. · BME:ELE

Endesa — Q1 2017 Earnings Presentation

26 slides from Endesa's earnings presentation, May 9, 2017

1. Slide 1: Endesa 1Q 2017 Results

   Endesa 1Q 2017 Results 09/05/2017

2. Slide 2: Agenda: Highlights and key financial figures

   1. Highlights and key financial figures 2. Endesa’s performance in 1Q 2017 market context 3. Financial results 4. Final remarks 1Q 2017 Results- Madrid, 9 May 2017 2

3. Slide 3: Agenda: Highlights and key financial figures

   1. Highlights and key financial figures 2. Endesa’s performance in 1Q 2017 market context 3. Financial results 4. Final remarks 1Q 2017 Results- Madrid, 9 May 2017 3

4. Slide 4: Stable regulated margin; liberalized business affected by market conditions

   Stable gross margin evolution in the regulated business Liberalized business performance affected by challenging market conditions in both gas and electricity Competitive advantages from EGPE acquisition Like-for-like(1) fixed costs decreased 2% (1) Includes pension plans obligations provision updat

5. Slide 5: Key financial figures

   Key financial figures €M 1Q 2017 1Q 2016 Change Like-for-like EBITDA 702 801 -12% -19%(1) Net attributable income 253 342 -26% -30%(2) Cash flow from operations 536 665 -19% 31.03.2017 31.12.2016 Change Net financial debt 5,495(3) 4,938 +11%  Exceptional market conditions in both periods affect EBI

6. Slide 6: Agenda: Endesa's performance in 1Q 2017 market context

   1. Highlights and key financial figures 2. Endesa’s performance in 1Q 2017 market context 3. Financial results 4. Final remarks 1Q 2017 Results- Madrid, 9 May 2017 6

7. Slide 7: Market context

   Market context in 1Q 2017 Electricity wholesale prices Demand Average pool prices Spain (€/MWh) Spain(1) Endesa distribution area(2) 1Q pool price comparison in 2015-17 period +1.1% Avg. 7.4% (Not adjusted) +81% 55.6 5.0% Industry +2.9% 1.2% +1.3% +1.7% Services +1.7% 71 -2.2% -2.3% 46 52 43 Residen

8. Slide 8: Endesa's performance market context: energy management

   Endesa’s performance in 1Q 2017 market context Energy management Output(1) (GWh) Electricity sales(1) (GWh) 18,980 +0.4% +24% 25,763 25,868 994 15,363 3,064 4,573 4,307 Unitary integrated 1,806 1,871 2,952 margin: 5,009 6,255 4,971 3,617 +73% €20.4/MWh 3,292 3,307 (-12% vs. 1Q 2016) Hydro -36% 8,794

9. Slide 9: Agenda: Financial results

   1. Highlights and key financial figures 2. Endesa’s performance in 1Q 2017 market context 3. Financial results 4. Final remarks 1Q 2017 Results- Madrid, 9 May 2017 9

10. Slide 10: Financial results

    Financial results €M 1Q 2017 1Q 2016 Change Like-f-like Revenues 5,223 4,878 7% Gross Margin 1,236 1,310 -6% (1) EBITDA 702 801 -12% -19% EBIT 340 468 -27% Net Financial Results (28) (51) -45% Share of profit from associates 15 28 -46% Income tax (66) (97) -32% (2) Net attributable income 253 342 -2

11. Slide 11: 1Q 2017 EBITDA breakdown

    1Q 2017 EBITDA breakdown 1Q 2016 1Q 2017 % €M Change (%) €M % EGPE: 57 Generation & Supply(1) 240 -38% 150 21% Generation & Supply(1) 30% Non-mainland Gx(2) 100 14% Non-mainland Gx(2) 10% 82 +22% Distribution 60% -6% ~65% Distribution 479 452 EBITDA 1Q 2016 EBITDA 1Q 2017 TOTAL 801 -12% 702 TOTAL (1

12. Slide 12: Regulated business

    Regulated business Gross margin evolution +4% €M 747 774 27 Non-mainland generation(1) - 145 172 Distribution 602 602 (1) 1Q 2016 Gross Margin Dx Non-mainland Gx 1Q 2017 Gross Margin  Stable regulated gross margin with non-mainland Gx benefitting from previous years’ positive settlements 1Q 2017 Re

13. Slide 13: Liberalized business

    Liberalized business(1) Gross margin evolution -18% €M 563 -21 -24 462 -56  -€42 M MtM  -€14 M Algerian gas (2) 1Q 2016 Electricity + VAS + Gas (underlying) Gas (MtM&Others) 1Q 2017 Gross Margin Other Gross Margin  Lower unitary margin in the liberalized electricity business (with slight increase

14. Slide 14: Liberalized business: 1Q 2017 energy management

    Liberalized business 1Q 2017 energy management Energy (TWh) Unitary values breakdown (€/MWh) Unitary revenue 61.9 Sales 21.2 21.5 58.9 Energy 5.6 purchases 8.8 Unitary variable cost(1) 35.7 41.5 EGPE: 1.0 Mainland 15.9 17.5 ex output 12.4 -12% EGPE Unitary margin 23.2 (-25% l-f-l)(3) 20.4 1Q 2016 1Q

15. Slide 15: Fixed costs evolution

    Fixed costs evolution +5% €M -2% 524 534 509 516 -18 +15 224 220 Personnel 202 -1% 221 costs 330 323 +1% 327 346 O&M costs Capitalized costs -23 -23 -32 -32 1Q 2016 1Q 2016 1Q 2017 1Q 2017 Reported Adjusted Adjusted Reported  2% Like-for-like(1) fixed costs reduction (1) Includes pension plans obli

16. Slide 16: From EBITDA to Net Income

    From EBITDA to Net Income €M -362 702 -28 10 -69 340 322 253 EBITDA Depreciation EBIT Net Financial Associates and Profit before Taxes and Net attributable and amortization Results Others taxes minorities Income 11% 1Q 2016 801 -333 468 -51 22 439 -97 342 Change (%) -12% +9% -27% -45% -55% -27% -29%

17. Slide 17: Net financial debt analysis

    Net financial debt analysis Net financial debt evolution Net debt / (2) 1.4x 1.6x EBITDA ratio €M 5,495(3) 4,938 122 Regulatory working capital(4) 741 536 352 5,373 4,961 Regulatory working -23 FY 2016 Cash flow Capex+Others Di vide nds FY 2016 capital(4) Cash flow from Capex(1) (€321 M) + Ordinary

18. Slide 18: Agenda: Final remarks

    1. Highlights and key financial figures 2. Endesa’s performance in 1Q 2017 market context 3. Financial results 4. Final remarks 18

19. Slide 19: A floor for 2017 gross DPS of €1.32/share is guaranteed

    Robustness of regulated business Weak performance of liberalized business partially offset by clear benefits arising from EGPE acquisition Quarterly exceptional market conditions to normalize during the year 2017 targets supported by additional managerial actions º Efficiency plans will allow for li

20. Slide 20: Appendix

    Appendix Endesa 1Q 2017 Results 20

21. Slide 21: Installed capacity and output

    Installed capacity and output Mainland output(1) (GWh) Total output (GWh) GWh 1Q 2017 (and chg. vs. 1Q 2016 (1) Total Output 15,916 +28% Total 18,980 24% 994 Hydro 1,483 -36% 12,411 1,120 Nuclear 7,184 11% 296 2,946 Coal 5,724 57% 2,671 2,189 Natural gas 1,992 53% 650 Oil-gas 1,603 -1% Renewables 99

22. Slide 22: Endesa: financial debt maturity calendar

    Endesa: financial debt maturity calendar Gross balance of maturities outstanding at 31 March 2017: €5,902 M(1) Bonds Bank debt and others ECPs (2) 4,223 Endesa's liquidity covers 1,287 4,191 35 months of 92 52 98 125 debt maturities 1,200 15 32 83 125 87S12 017 92 S22 017 52 2.08 1 2.09 1 2.00 2 RES

23. Slide 23: Gross financial debt structure

    Gross financial debt structure as of March 31st 2017 Structure of Endesa's gross debt €M 5,902 5,902 Floating 38% Euro 100% Fixed 62% By interest rate By currency  Average cost of debt 2.4% 1Q 2017 Results- Madrid, 9 May 2017 23

24. Slide 24: Glossary of terms (I/II)

    Glossary of terms (I/II)  Average cost of debt (%): (cost of financial debt) / gross average financial debt  Average life of debt: (principal x number of days of term) / (principal in force at 31 December x 365 days)  Cash flow from operations: Net cash provided by operating activities  Debt mat

25. Slide 25: Glossary of terms (II/II)

    Glossary of terms (II/II)  Net financial results: Financial Revenues - Financial Expenses + Foreign Exchanges  Regulatory working capital: part of the working capital that is specifically related to the balances of CNMC settlements  Revenues: Sales + Other operating revenues  Unitary revenue: Re

26. Slide 26: 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

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