Enel Spa · MIL:ENEL
Enel Spa — Investor Presentation (March 2019)
132 slides from Enel Spa's investor presentation, March 2019
Slide 1: Investor Presentation
Investor Presentation March 2019
Slide 2: Agenda
Agenda Investor Presentation – Strategic Plan 2019-21 Enel Today 2015-2018 Our Delivery 2019-2021 Our Vision & Positioning 2019-2021 Our Pillars Capital allocation Business line highlights 2019-21 Financial management Our Plan Risk management Earnings & targets FY 2018 consolidated results
Slide 3: Investor Presentation Strategic Plan 2019-21
Investor Presentation Strategic Plan 2019-21
Slide 4: Enel Today
Enel Today
Slide 5: Enel today
Enel today We are a leader in the new energy world 1st network operator1 73 mn end users 43.4 GW capacity2 World’s largest private 46.4 GW capacity3 player2 in renewables 6.2 GW demand response Largest retail customer 70.4 mn customers4 base worldwide1 1. By number of customers. Publicly owned opera
Slide 6: Enel today: diversified business model
Enel today Our business model is well diversified and provides long term visibility North & Central America Italy Iberia Rest of Europe 2% 30% 50% 4% 55% 0.7 €bn 7.1 €bn 19% 3.6 €bn 22% 0.5 €bn 32% 2% 46% 100% 16% 12% 10% 2018 Group EBITDA1 South America Africa, Asia & Oceania 46% 44% 10% 18% 4.4 €b
Slide 7: Our Delivery
2015-2018 Our Delivery
Slide 8: Our delivery
Our delivery Sustainable, profitable, digitalized and customer centric 2015 2018 Renewables focus Owned RES capacity/Total capacity % 41% 46% Decarbonization CO2 Footprint Specific Co2 emissions kg/kWheq 0.409 0.356 End Users mn 61 73 Retail customers Mn customers in the free market 17 22 Customer c
Slide 9: Our delivery: growth with financial strength
Our delivery Our strategy delivered growth while improving our financial strength Average capex (€bn) FFO/Net Debt +18% +200bps 0.30 0 0.25 0 10 9 8 0.20 0 25.0% 27.0% 7 6 8.0 0.15 0 5 4 6.8 Net Debt 0.10 0 37.5 41.1 3 2 1 (€bn) 0.05 0 - - 2013-15 2016-18 2015 2018 Rating1 BBB BBB+ EBITDA (€bn) Net
Slide 10: Active portfolio management balanced and accretive
Our delivery Active Portfolio Management was balanced and accretive Transactions completed 2015-18 (€bn) Operating benefits from APM 2018 2021 10.0 0 End users +10 mn +11 mn 9.00 8.00 7.7 7.5 Demand response 6.2 GW 9.9 GW Charging points1 7.00 37k 348k 6.00 5.00 5.2 Acquisitions Households passed 5.
Slide 11: Strong commitment to our SDGs targets
Our delivery Strong commitment to our SDGs targets Engaging local communities (mn beneficiaries) 20181 20201 High-quality, inclusive and fair education 1.0 0.8 Access to affordable and clean energy mainly in Africa, Asia and Latin America 6.3 3.0 Employment and sustainable and inclusive economic gro
Slide 12: Higher returns and shareholder remuneration
Our delivery Management actions have driven higher returns and shareholder remuneration Value creation spread Shareholder return – DPS (€/sh) +75% 8.8% 0.35 0.30 8.2% Value creation 0.25 0.28 250 bps 0.20 0.237 120 bps 0.15 0.18 0.16 0.10 MIN 7% 0.21 0.28 DPS 6.3% 0.05 - 2015 2018 2015 2016 2017 201
Slide 13: Our Vision & Positioning
2019-2021 Our Vision & Positioning
Slide 14: Integrated model captures energy transition opportunities
Our vision and positioning Integrated model captures opportunities from energy transition Growth in renewable capacity Grid development & automation Full speed renewables Foster digital networks as towards a full key infrastructure in the ENERGY TRANSITION decarbonized profitable energy transition m
Slide 15: Decarbonization shapes capacity and improves margins
Our vision and positioning Decarbonization shapes our capacity and improves margins Total installed capacity 2018-211 (GW) Renewables extra margin Production 110 Production 90. 0 Twh Twh 89.8 89.4 (0.6) 93.4 80. 0 250 90 256 7.0 11.6 70. 0 ~20% 39.5 98 60. 0 127 70 46.4 46.5 50. 0 extra margin 26 24
Slide 16: Electrification and urbanization drive investments
Our vision and positioning Electrification and urbanization drive infrastructure investments and new services to clients Infrastructure investments Customer needs and services Network automation efficiency Customer/RC node Electricity distributed (TWh) End users (mn) Free market customers3 (mn) -16%
Slide 17: Digitalization fuels economic benefits
Our vision and positioning Digitalization fuels economic benefits and satisfies customers needs 2019-21 Digitalization Capex Cumulated economic benefits (€bn) Key highlights ~4 €bn for networks digitalization 11% 2.5 5% Advanced automation of construction 5.4 €bn and O&M of renewable assets 84% Incr
Slide 18: Our Pillars
2019-2021 Our Pillars
Slide 19: Sustainable value creation over the long term
Our pillars Sustainable value creation over the long term Industrial Operational Simplification Human Growth Efficiency Capital Asset development Asset management Customers Communities Customers Corporate Asset Management & Streamlining 1.2 €bn opex People 27.5 €bn capex savings 3.2 €bn incremental
Slide 20: Asset development supports growth ambitions
Our pillars Asset development supports our growth ambitions Industrial Growth Total gross capex by business and by nature1 2019-21 Asset development by business1 2019-21 5% 4% 9% 6.2 40% 64% 27.5 €bn 27.5 €bn 28% 16.5 €bn 16.5 4.8 42% 4% 4% Networks Renewables Thermal Asset development Networks Rene
Slide 21: Renewables are the driving force of growth
Our pillars Renewables are the driving force of growth Industrial Growth Asset development capex1 2019-21 Additional capacity by geography Higher investments to build 11.6 GW additional capacity 4% 9% 6% 15% 3% 14% 4% 16% Focus on markets with integrated presence & on developed countries 10.6 €bn ~1
Slide 22: Networks’ investments tailored to maximize asset base value
Networks’ investments tailored to maximize asset Our pillars base value Industrial Growth Gross capex 2019-21 by nature & by geography Restructuring of Eletropaulo Completion of Goias turnaround 3% 29% Resiliency and flexibility in Italy and 29% 36% Spain 11.1 €bn 11.1 €bn 44% Digitalization to prom
Slide 23: Enel X capital allocation addresses customers’ needs
Enel X capital allocation addresses customers’ needs Our pillars Industrial Growth Gross capex 2019-21 by nature & by geography Smart lighting and fiber optics for cities 41% 13% Electric mobility in Italy, Spain, US and Romania 27% 39% 1.1 €bn 1.1 €bn Demand response and storage solutions for C&I c
Slide 24: Driving efficiencies across all businesses
Our pillars Driving efficiencies across all businesses Operational Efficiency Opex evolution (€bn)1 Efficiency by business -7% 23% FY2018 0.1 0.6 (1.2) 8.5 33% 8.7 1.2 €bn 8.1 36% 8% 2018 CPI & Growth Efficiency 2021 Networks Thermal Retail Other 2 Forex generation 1. Total fixed costs in nominal te
Slide 25: Commitment to SDGs and Human Capital
Our pillars Our commitment to SDGs and Human Capital Engaging local communities (mn beneficiaries) Our people Human Capital 20301 High-quality, inclusive and fair education 2.5 2021 Talent attraction and retention Access to affordable and clean energy 10.0 Appraise performance of 100% of people invo
Slide 26: Sustainable, profitable, digitalized and customer centric
Our pillars Sustainable, profitable, digitalized and customer centric 2015 2018 2021 Renewables focus Owned RES capacity/Total capacity % 41% 46% 55% CO2 Footprint Specific Co2 emissions kg/kWh 0.409 0.356 0.345 End Users mn 61 73 75 Retail customers Mn customers in the free market 17 22 36 New busi
Slide 27: Improved ROIC supporting dividend growth
Our pillars Improved return on invested capital supporting dividend growth Value creation spread Implicit DPS at 70% pay-out (€/sh) +39% 10.2% 0.4 5 CAGR 0.4 2018-21 0.3 5 0.39 + 12% 8.8% Value creation 0.37 0.33 0.3 400 bps 0.2 5 0.28 Value creation 0.2 250 bps 0.1 5 0.28 0.32 0.34 0.36 Min +9% 0.1
Slide 28: Our Plan
2019-2021 Our Plan
Slide 29: New investment cycle drives growth while debt remains stable
Our plan New investment cycle drives growth while debt remains stable Average capex (€bn) Net Debt (€bn) - +12% 50.0 0 45.0 0 40.0 0 10.0 9.0 8.0 35.0 0 41.1 41.8 7.0 6.0 8.2 9.2 30.0 0 25.0 0 5.0 4.0 20.0 0 3.0 2.0 15.0 0 1.0 - 10.0 0 2018-20 2019-21 2018 2021 Old Plan EBITDA (€bn) Net income (€bn)
Slide 30: Improvement in profitability, returns, and credit metrics
Our plan Solid improvement in profitability, returns, and credit metrics Profitability Return on invested capital FFO/Net debt +400bps +140bps +410 bps 0.3 5 14. 0% 12. 0% 35. 0% 0.3 0 30. 0% 10. 0% 29% 29% 10.0% 10.2% 31.1% 27% 27.4% 28.6% 0.2 5 25. 0% 9.3% 25.0% 27.0% 8.0 % 25% 6.0 % 8.2% 8.8% 20.
Slide 31: Capital Allocation
2019-2021 Capital Allocation
Slide 32: Increased capex plan focused on asset development and customers
Capital allocation Increased capex plan focused on asset development and customers Capex plan1 (€bn) EBITDA evolution by investment (€bn) +12% +20% 35 0.1 1.0 30 27.5 24.6 2.1 19.4 6.2 25 20 6.1 4.8 15 4.1 10 14.4 16.5 5 16.2 0 2018-20 2019-21 EBITDA Asset Customer Asset EBITDA old plan new plan 201
Slide 33: Growth driven by networks and renewables
Capital allocation Growth driven by networks and renewables Capital allocation 2019-21 (€bn) Incremental EBITDA2 (€bn) 2018 target vs 16.5 4.8 6.2 Total 2021 by business1 +1.0 100 % 100 % 100 % 4% 9% 90% 90% 90% 11.6 30% 28% 80% 80% 80% 70% 70% 70% 11.1 +1.2 66% 60% 60% 60% 1.1 50% 50% 50% +0.4 40%
Slide 34: Run rate capex grows from 6.7€bn to 8€bn
Capital allocation Beyond plan period, run rate capex grows from 6.7€bn to 8€bn Capex run-rate (€bn) Drivers of run rate by business line +19% Development of 3.5/4 GW per year 8 Resiliency, digitalization and service quality 6.7 40 – 42- Infrastructure investments to cope with 43% ~8 €bn 45% custome
Slide 35: Business Line Highlights
2019-2021 Business Line Highlights
Slide 36: Renewables: diversifying mix, improved visibility
Business line highlights Renewables: diversifying mix, improved visibility Installed capacity and Production by technology1 2019-21 Sales portfolio composition CAPACITY (GW) PRODUCTION (TWh) PPA duration (yrs) +23% +32% 54% 132 > 15 30% 48 140 50. 0 39 5 120 10-15 17% 40. 0 ~100 ~357 TWh 100 2 14 13
Slide 37: Incremental asset development capex allocated to renewables
Business line highlights Incremental asset development capex fully allocated to renewables Asset development capex evolution (€bn) Incremental renewable capacity by geography and technology 5% 8% ~4 10.6 4% 60% 1.6 BSO 8.3 (~ 2) 18% ~5 GW 41% 40% 3.4 BSO 24% Brazil USA Iberia Italy Chile Other IRR s
Slide 38: Renewables: accelerating growth
Business line highlights Renewables: accelerating growth Gross Capex 2019-21 2018-21 EBITDA evolution (€bn) +23% 0.9 0.1 FY2018 8% 5.4 4.5 11.6 €bn 92% 4.4 Asset development 2018 Asset Asset 2021 Asset management development management Asset management pre-tax cumulated cash generation for ~12€bn 37
Slide 39: Networks: 4% total RAB growth
Business line highlights Networks: 4% total RAB growth Europe: RAB evolution (€bn) South America: RAB evolution (€bn) - +30% 20.0 0 45.0 0 40.0 0 15.0 0 14.0 35.0 0 1.3 10.7 30.0 0 2.7 25.0 0 31 31 10.0 0 0.9 20.0 0 2.2 2.0 1.7 5.5 15.0 0 5.00 10.0 0 4.6 5.00 - - 1.3 2.5 2018 2021 2018 2021 Argentin
Slide 40: Networks: profitability supported by turnaround and efficiencies
Business line highlights Networks: profitability supported by asset turnaround and efficiencies Gross Capex 2019-21 2018-21 EBITDA evolution (€bn) +17% 0.4 (0.3) 29% 0.5 29% 0.2 8.9 0.5 11.1 €bn 7.6 42% Asset development Customers Asset Management 2018 Eletropaulo Connections Tariff Efficiency FX 20
Slide 41: Networks: Eletropaulo turnaround doubling EBITDA
Business line highlights Networks: Eletropaulo turnaround doubling EBITDA Eletropaulo asset turnaround (EBITDA €mn) Eletropaulo operational KPIs +2x 2018 2021 Electricity distributed 43 +9% 0.4 (TWh) Quality index1 (%) -2.1 +99bps 0.7 Opex/end user (€/cust) 63 -30% 0.1 2021 Networks benchmark 0.3 El
Slide 42: Enel X: capturing new opportunities with customers
Business line highlights Enel X: capturing new opportunities with customers Gross Capex 2019-21 2018-21 EBITDA evolution1 (€bn) 41% 0.2 0.5 1.1 €bn 0.1 0.1 0.1 Customers +0.3 €bn 59% 0.1 Asset Development +0.2 €bn Asset development Customers 2018 e-City e-Mobility e-Home e-Industry 2021 1. Rounded f
Slide 43: Retail: growth in customer base and efficiency
Business lines highlights Retail: further growth on increase in customer base and efficiency 2018-21 EBITDA evolution (€bn) 2018-21 free market customers1 (mn) 2018-21 volumes sold2 (TWh) 400 6.0 60 5.0 +17% 50 +64% 350 +33% 300 3.4 4.0 40 0.1 250 2.9 0.7 200 3.0 30 0.7 0.3 150 2.0 20 36 100 198 1.0
Slide 44: Financial Management
2019-2021 Financial Management
Slide 45: Stable debt throughout the plan
Financial management Stable debt throughout the plan Net debt evolution (€bn) Source of funds allocation 2019-21 (€bn) 50. 0 -% 45. 0 0.3 (27.5) 40. 0 35. 0 41.1 30. 0 25. 0 20. 0 15. 0 (13.9) 41.1 ~41.8 ~42.2 ~41.8 10. 0 5.0 0.0 2018 2019 2020 2021 Sources Incremental Gross capex Dividends of funds
Slide 46: Improving credit metrics
Financial management Improving credit metrics Credit metrics Long term credit rating Rating Outlook 4.5 0 31.1% 35% 27.0% 27.4% 28.6% 4.0 0 25.0% 30% Standard & Poors BBB+ Stable 3.5 0 25% 3.0 0 20% 2.5 0 15% 2.5x 2.5x Moody’s Baa2 Stable 2.0 0 2.4x 2.3x 10% 1.5 0 2.2x 5% 1.0 0 0% 0.5 0 -5% Fitch A-
Slide 47: Continued reduction in cost of debt
Financial management Continued reduction in cost of debt Financial strategy for 2019-21 (€bn) Net financial expenses on debt (€bn) Expected Current total Amount -4% cost2 cost FY 2018 Bond refinancing 4 5.0% 6.2 3% 4.2% 4.5% including green bonds1 3.5 5.0 0% 4.6% 4.6% Bank loans and other 3 4.4% 4.4
Slide 48: Risk Management
2019-2021 Risk Management
Slide 49: Operating risk: low EBITDA exposure to merchant risk
Risk management Operating risk: low EBITDA exposure to merchant risk EBITDA 2019-21 (€bn) Regulated EBITDA by business 2019-21 120 % 55.3 Regulated ~ 100% 100 % Merchant 28% Regulated, contracted under long term 80% Retail portfolio hedge PPA, incentivized ~ 64% 60% Regulated ~ 46% 40% Regulated & 7
Slide 50: Operating risk: natural margin hedge from retail
Risk management Operating risk: natural margin hedge from retail portfolio Integrated margin – Generation GM vs retail GM Hedging position on price driven production Ren & Nuke 60.0 hedged price vs 160 % +13% +19% Pool price 2018 indexed 140 % 50.0 Coal & Gas Hedging of CDS-CSS Retail margin vs base
Slide 51: Operating risk: low regulatory risk
Risk management Operating risk: low regulatory risk over the plan period South America Europe 2018 2019 2020 2021 2022 WACC 2018 2019 2020 2021 2022 WACC Italy 5.9% Brazil2 12.3% Iberia1 5.58% Colombia 11.8% - 11.4% Romania 5.7% Chile 10% Argentina 12.5% 2019-21 BP Peru 12% 2019-21 BP Stable and mat
Slide 52: Operating risk: renewables growth already addressed
Risk management Operating risk: renewables growth already significantly addressed 2019-21 Additional capacity addressed1 (GW) Pipeline by geography and technology2 (GW) 14. 0 ~70% addressed 12. 0 Coverage 22% 7% by yr 11.6 6% 44% 10. 0 2019 100% 2020 78% 8.0 8.2 19.8 GW 55% 2021 41% 21% 6.0 4.0 44%
Slide 53: Currency risk: low exposure to volatile currencies
Risk management Currency risk: low exposure to volatile currencies FX sensitivity1 – Avg. yearly impact 2019-21 (€mn) 2019-21 EBITDA by geography 2019-21 EBITDA by currency EBITDA Group NI BRL (180) 225 (30) 35 63% 63% ARS (35) 40 (6) 8 CLP (6) 6 - - 55.3 €bn 55.3 €bn COP (100) 125 (12) 15 26% 32% 5
Slide 54: Financial risk: gross debt hedges
Risk management Financial risk: gross debt hedges softening FX swings and rates movements Gross debt by currency at 2021 After swap Interest rate composition 57% 86% 22% 55.1 €bn 55.1 €bn 55.1 €bn 7% 7% 78% 6% 7% 30% EUR USD GBP Other EUR USD GBP Other Floating Fixed + Hedged 53
Slide 55: Financial risk: limited re-financing needs; strong liquidity
Risk management Financial risk: limited re-financing needs; strong available liquidity Debt maturity by year1 (€bn) 2019-21 Liquidity available1 14.0 12.0 10.0 Maturities/Gross Debt 14.6 21.3 €bn 8.0 6.3% 8.1% 6.7% 6.7 6.0 11.3 4.0 2.0 3.4 4.3 3.6 0.0 Available committed credit lines 2019 2020 2021
Slide 56: Earnings & Targets
2019-2021 Earnings & Targets
Slide 57: Strategy driving 37% increase in earnings
Earnings and targets Strategy driving 37% increase in earnings vs 20% increase in EBITDA Group net ordinary income (€bn) 2018-21 Group net ordinary income evolution (€bn) +37% 7.0 9.0 6.5 8.0 3.2 (0.4) 0.1 5.6 6.0 7.0 (0.9) 5.4 5.5 (0.5) 6.0 4.8 5.0 5.0 5.6 4.1 4.5 4.0 4.1 4.0 3.0 3.5 2.0 3.0 1.0 2.
Slide 58: Visible value creation for our shareholders
Earnings and targets Visible value creation for our shareholders CAGR (%) Earnings growth 2018 2019 2020 2021 2018-21 ✔ Ordinary EBITDA (€bn) 16.2 17.4 18.5 19.4 ~+6% ✔ Net ordinary income (€bn) 4.1 4.8 5.4 5.6 ~+11% Value creation ✔ Pay-out ratio 70% 70% 70% 70% - ✔ Implicit DPS (€/sh) 0.28 0
Slide 59: FY 2018 consolidated results
Investor Presentation FY 2018 consolidated results
Slide 60: Key highlights of the period
Key highlights of the period Continued exceptional delivery on renewables development Double digit increase in end users Further decline in operating costs Portfolio rotation and further simplification to accelerate growth and optimize risk profile Significant progresses on SDGs 4, 7 and 8 Ordinary
Slide 61: Financial targets delivery
Financial targets delivery 2018 2018 target 2017 ∆ YoY ✔ Ordinary EBITDA (€bn) 16.2 16.2 15.6 +4% ✔ Net ordinary income (€bn) 4.1 4.1 3.7 +9% ✔ Dividend per share (€) 0.28 0.28 0.237 +18% ✔ Net debt (€bn) 41.1 41-42 37.4 +10% ✔ FFO/Net debt 27% 26.5% 27% -% 60
Slide 62: Industrial growth: capex
Industrial growth: capex FY 2018 Gross capex1 FY 2018 Asset development capex by business and geography 5% 5% 4% 3% 10% 23% 45% 36% 8.5 €bn 34% 4.7 €bn 4.7 €bn 61% 11% 38% 2% 23% Networks Thermal Generation Renewables Italy Africa, Asia & Oceania Enel X Retail Networks Iberia South America Renewable
Slide 63: Continued delivery on renewables growth
Continued delivery on renewables growth Renewable capacity evolution 20181 (GW) Total Additional capacity of 3 GW mainly in capacity 40.9 43.4 North & Central America 0.4 1.7 Managed (0.4) 4.2 Asset rotation to maximize portfolio 2.6 capacity returns 2.7 2 (0.1) (1.7) Production up by 20% Consolidat
Slide 64: Group’s decarbonization
Group’s decarbonization Share of renewables on total installed capacity1 (GW) Emission free share of production2 110 .0 45% emission free 51% emission free 87.5 89.8 90. 0 46.4 46.6 70. 0 -% 2017 2018 257 TWh 260 TWh 50. 0 43.4 30. 0 40.9 +6% 10. 0 2017 20184 2020 2030 -10.0 FY 2017 FY 2018 CO2 spec
Slide 65: Networks
Networks End users (mn) Smart meter1 (mn) +1.2 mn smart meters installed +11% +3% +5.1 mn meters 2.0 installed in Italy 45.0 0 75.0 0 44.5 0 Smart meters 2.0 (mn) 70.0 0 72.9 44.0 0 Eletropaulo: + 7 mn customers 65.0 0 43.5 0 43.8 Turnaround underway 65.5 43.0 0 42.5 0 60.0 0 42.0 0 42.6 55.0 0 41.5
Slide 66: Enel X
Enel X Infrastructure Customer services Demand response (GW) Storage (MW) 2017 2018 5.00 Public lighting 7.50 2.5 2.5 7.00 +9% 4.50 +50% (mn points) 6.50 4.00 3.50 6.00 +63% 5.50 6.2 3.00 5.00 5.7 2.50 3.0 Charging points1 (k) 30 49 4.50 2.00 2.0 1.50 4.00 1.00 3.50 > 2x 0.50 Fiber deployment 3.00 2
Slide 67: Driving efficiencies across all businesses
Driving efficiencies across all businesses 10.0 9.5 Opex evolution1 (€bn) Opex - main drivers (€mn) 9.0 -1% Growth 50 8.5 8.6 Perimeter and One-offs2 310 8.5 8.0 CPI & Forex3 (145) 7.5 Efficiency4 (315) 7.0 FY 2017 FY 2018 1. In nominal terms, rounded figures. Adjustments: FY 2017 excludes +45 €mn o
Slide 68: Portfolio management and simplification
Portfolio management and simplification Deals executed Recent transactions EGP Brazil Sale of 540MW 1 renewable assets Portfolio Enterprise value 700 €mn rotation EGP North America Acquisition of 650 MW from US JV Equity value of 256 US$mn Enel Americas Corporate Shares swap on 5% of Enel Americas s
Slide 69: Our commitment to SDGs – Communities & people
Our commitment to SDGs – Communities & people 20181 20301 High-quality, inclusive and fair education 1.0 2.5 Access to affordable and clean energy 6.3 10.0 Employment and sustainable & inclusive economic growth 1.8 8.0 20181 99% people Talent Appraise performance of people we appraised attraction &
Slide 70: Shareholder remuneration
Shareholder remuneration EPS (€/sh) DPS (€/sh) +68% >2x +18% +18% 0.35 0.47 0.30 0.40 0.25 0.33 0.20 0.28 0.28 0.15 0.10 0.16 0.05 0.00 2015 2018 2019 2015 2018 2019 Min. guaranteed 0.16 0.28 0.32 DPS 69
Slide 71: FY 2018 consolidated results: Financial results
FY 2018 consolidated results Financial results
Slide 72: Financial highlights (€mn)
Financial highlights (€mn) FY 2018 FY 2017 ∆ yoy Net of FX4 Revenues 75,672 74,639 +1% Reported EBITDA 16,351 15,653 +4% Ordinary EBITDA1 16,158 15,555 +4% +7% Reported EBIT 9,900 9,792 +1% Ordinary EBIT 9,793 9,736 +1% Reported Group net income 4,789 3,779 +27% Group net ordinary income2 4,060 3,70
Slide 73: Ordinary EBITDA evolution (€bn)
Ordinary EBITDA evolution (€bn) 20.0 0 EBITDA evolution1 (€ bn) € mn 19.0 0 18.0 0 +4% Growth in renewables and networks 1,000 Efficiency 315 17.0 0 16.0 0 16.2 Perimeter and One-offs2 20 15.0 0 15.6 14.0 0 FX3 (470) 13.0 0 Scenario and margins (265) 12.0 0 FY 2017 FY 2018 1. Rounded figures. 72 2.
Slide 74: Ordinary EBITDA by business line
Ordinary EBITDA by business line ∆ YoY Performance driven by growth and +12% volume/prices 2.9 7.6 Growth and efficiencies +3% 1.1 16.21 €bn Higher margins across all markets +20% 4.5 0.1 Focus on new infrastructures and services - Networks Enel X Renewables Thermal Generation Normalization of marke
Slide 75: Global Renewable energies
Global Renewable energies EBITDA evolution1 (€ bn) EBITDA FY 2018 by geography € mn +12% Growth 715 2% 4% 5.00 16% 25% Efficiency (40) 4.50 4.5 €bn 4.5 4.00 Perimeter and One-offs2 (100) 8% 4.1 3.50 45% FX (150) 3.00 Italy Africa, Asia & Oceania 2.50 Scenario and margins 60 Iberia South America FY 2
Slide 76: Global Infrastructure and networks
Global Infrastructure and networks EBITDA evolution1 (€bn) EBITDA FY 2018 by geography € mn +3% Growth 200 2% 25% 7.80 Efficiency 140 7.6 7.6 €bn 7.30 7.4 47% Perimeter and One-offs2 440 6.80 26% 6.30 FX (220) Italy South America 5.80 Scenario and margins (365) Iberia RoE FY 2017 FY 2018 1. Rounded
Slide 77: Retail
Retail EBITDA evolution1 (€bn) Free market - main KPIs 170 .00 € mn Volumes (TWh)4 165 .00 +20% -% 4.00 160 .00 3.50 Growth and margins 340 155 .00 2.9 150 .00 3.00 152 153 2.4 145 .00 2.50 0.7 Efficiency2 200 140 .00 2.00 0.5 135 .00 130 .00 1.50 Perimeter and One-offs3 (55) 125 .00 2.2 120 .00 1.0
Slide 78: From Ordinary EBITDA to Net Ordinary Income
From Ordinary EBITDA to Net Ordinary Income (6.4) 16.2 (2.3) (1.9) 9.8 (1.6) 7.5 4.1 Ordinary D&A EBIT Financial EBT Income Minorities Group EBITDA expenses taxes net ordinary & other 1 income PY 15.6 (5.8) 9.7 (2.7) 7.1 (1.9) (1.5) 3.7 Delta YoY +4% +9% +1% -14% +6% -% +5% +9% 1. Includes other fin
Slide 79: Cash flow (€bn)
Cash flow (€bn) 18.0 16.0 1.1 14.0 16.2 (2.6) (1.9) (1.7) 12.0 11.1 10.0 8.0 6.0 (8.5) 4.0 0.7 ( ) 3.3 2.0 - 1 3 4 Ordinary ∆ Provisions ∆Working Income Financial FFO Capex Build & sell FCF EBITDA capital taxes expenses 2 & other PY 15.6 (1.7) (0.5) (1.6) (1.7) 10.1 (8.5) 0.8 2.4 Delta YoY +4% +10%
Slide 80: Debt and financial expenses (€bn)
Debt and financial expenses (€bn) Gross and net debt Net debt evolution +9% 2.8 0.9 56.0 3.4 60 51.4 41.1 50 6.7 7.0 8.2 37.3 40 6.9 37,302 (3.3) 43,122 30 37,410 43,122 20 37.4 41.1 10 - FY 2017 FY 2018 Dec 31, 2017 FCF Dividends paid Active portfolio FX FY 2018 continuing management operations 1 N
Slide 81: Improvement in profitability, returns, and credit metrics
Solid improvement in profitability, returns, and credit metrics Profitability FFO/Net debt Long term credit rating +600bps +200 bps Rating Outlook 30% 30% S&P BBB+ Stable 27% 27% 25% 25% 24% 25% 25% 20% 20% Moody’s Baa2 Stable 15% 19% 15% 8.2% 8.7% 8.8% 10% 10% Fitch A- Stable 2015 2017 2018 2015 20
Slide 82: Closing remarks
Closing remarks Solid 2018 results support good prospects for future years Focus will be on organic development, efficiencies and simplification Strong commitment to SDGs to create sustainable value 2019 guidance, reiterated, underpins a yoy EPS and DPS growth of c. 18% 81
Slide 83: Financial annexes
2019-2021 Financial annexes
Slide 84: Agenda
Agenda Macro scenario Thermal generation Renewables Infrastructure & Networks Retail Enel Group 83
Slide 85: Macro scenario
2019-2021 Macro scenario
Slide 86: Macro scenario: GDP, CPI, FX
Macro scenario GDP, CPI, FX GDP (%) CPI (%) FX against €1 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 Italy 0.8 1.2 1.1 1.0 1.1 1.5 1.6 1.7 n.m. n. m. n. m. n. m. Iberia 2.5 2.3 2.0 1.8 1.7 1.7 1.7 1.7 n.m. n. m. n. m. n. m. South Am erica A rgentina (2.4) 3.1 3.1 3.0 33.8 20.0 17.0
Slide 87: Commodities’ prices
Commodities’ prices Macro scenario 2018 2019 2020 2021 Gas TTF €/MWh 22.8 19.7 18.9 18.5 Gas Henry Hub $/m m btu 3.1 3.0 3.1 3.2 Oil Brent $/bbl 71.5 69.0 67.5 63.5 Coal API2 $/ton 91.9 77.0 75.0 74.0 CO2 €/ton 15.9 16.0 17.5 18.0 86
Slide 88: Thermal generation
2019-2021 Thermal generation
Slide 89: Thermal generation: final installed capacity
Thermal generation Final installed Capacity (GW) Nuke CCGT and Oil&Gas Coal Total 2018 2021 2018 2021 2018 2021 2018 2021 Italy - - 7.3 6.9 6.3 5.5 13.6 12.6 Iberia 3.3 3.3 7.8 7.7 5.5 3.0 16.2 14.1 South America - - 6.9 6.9 0.8 0.8 7.7 7.6 Europe and North Africa - - 5.3 5.2 3.6 - 8.9 5.3 North & C
Slide 90: Thermal generation: installed capacity
Thermal generation Installed Capacity (GW) -15% 46.4 3.3 39.4 3.3 27.3 26.8 15.8 9.3 2018 2021 Nuke Coal CCGT and Oil&Gas 89
Slide 91: Renewables
2019-2021 Renewables
Slide 92: Final consolidated capacity (GW)
Renewables Final Consolidated capacity (GW) Hydro Wind Geothermal Solar & Other Total 2018 2021 2018 2021 2018 2021 2018 2021 2018 2021 Italy 12.4 12.4 0.8 1.0 0.8 0.8 0.1 0.1 14.0 14.3 Iberia 4.8 4.8 1.7 2.6 - - 0.0 1.1 6.5 8.4 South America 10.0 10.2 1.6 3.1 0.0 0.1 1.6 2.6 13.3 15.9 Europe and No
Slide 93: Consolidated capacity (GW)
Renewables Consolidated capacity (GW) +25% 48.4 39.2 28.1 27.8 14.2 8.2 0.9 0.8 5.2 2.4 2018 2021 Hydro Wind Geothermal Solar & Other 92
Slide 94: Infrastructure & Networks
2019-2021 Infrastructure & Networks
Slide 95: Electricity distributed, End users, Smart meters
Infrastructure & Networks Electricity distributed, End users, Smart meters Electricity distributed (TWh) End users (mn) Smart meters (mn) 2018 2021 2018 2021 2018 2021 Italy 227.7 233.0 31.4 31.6 31.4 31.6 Iberia 124.7 119.0 12.2 12.4 11.6 12.3 South America 117.4 149.2 26.5 27.7 0.4 2.2 Europe and
Slide 96: Retail
2019-2021 Retail
Slide 97: Power & gas customers and volumes
Power & gas customers and volumes1 Retail Power Gas Customers (mn) Volumes (TWh) Customers (mn) Volumes (bsmc) 2018 2021 2018 2021 2018 2021 2018 2021 Italy 25.2 18.4 102.3 92.3 4.1 4.8 4.8 5.1 Iberia 10.8 10.9 89.6 105.7 1.6 1.9 6.4 6.3 South America 25.8 28.2 91.1 184.1 0.0 0.0 0.0 0.7 Europe and
Slide 98: Italian power market 2018
Retail Italian power market 2018 Customers (mn) Energy sold (TWh) Enel Enel Enel Enel market share1 17,3 market share2 36,9 market share1 237,8 market share2 289,1 4,3 40% 7,3 53% 12,9 25% 206,3 222,9 19,6 2,9 29,6 16,7 51,3 31,5 47% 16,6 66,2 34,8 Regulated 85% Free 49% Total Regulated 86% Free 28%
Slide 99: Spanish power market 2018
Retail Spanish power market 2018 Customers (mn) Energy sold (TWh) Enel Enel 18.5 market share1 29.8 236.3 market share1 269.1 0.9 1.2 32% 17.6 176.2 32% 178.4 30% 11.3 28.6 0.3 60.1 31% 11.0 32.8 90.7 2.2 30.6 Regulated 44% Free 30% Total Regulated 43% Free 31% Total Business Residential B2B B2C 1.
Slide 100: Enel Group
2019-2021 Enel Group
Slide 101: Capex reconciliation (€bn)
Enel Group Old Plan Capex reconciliation (€bn) 24.6 24.6 Connections Customers 3.3 4.1 Retail, Enel X (e-Home, e-Industries), Network connections 6.7 6.1 Maintenance Asset management Investments for recurring asset maintenance Asset development Growth investments in renewables and networks Growth 14
Slide 102: Gross Capex (€bn)
Gross Capex (€bn) Enel Group Global Generation Global Infrastructures Renewable Services Retail Enel X Total & Trading & NetworNs Energies & Other 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 Italy 0.2 0.2
Slide 103: Asset development capex (€bn)
Asset development capex (€bn) Enel Group Global Generation Global Infrastructures Renewable Services Retail Enel X Total & Trading & NetworNs Energies & Other 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 I
Slide 104: Asset management capex (€bn)
Asset management capex (€bn) Enel Group Global Generation Global Infrastructures Renewable Services Retail Enel X Total & Trading & NetworNs Energies & Other 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 It
Slide 105: Customers capex (€bn)
Customers capex (€bn) Enel Group Global Generation Global Infrastructures Renewable Services Retail Enel X Total & Trading & NetworNs Energies & Other 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 Italy - -
Slide 106: Ordinary EBITDA
Enel Group Ordinary EBITDA Global Generation Global Infrastructures Renewable Services Retail Enel X Total & Trading & NetworNs Energies & Other 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 Italy 0.0 0.1 0
Slide 107: Baseload power price & production sold forward
Enel Group Baseload power price & production sold forward Baseload price 2018 2019 2020 2021 Italy (€/MWh) 61.3 56.9 56.2 55.1 Iberia (€/MWh) 57.3 56.5 55.0 55.4 Production sold forw ard 2018 2019 2020 2021 price % price % price % price % Italy (€/MWh)1 46.0 100% 53.0 90% 58.7 25% - 0% Iberia (€/MWh
Slide 108: Delivery on gas contract renegotiation
Enel Group Delivery on gas contract renegotiation Portfolio evolution (bcm, %) Price review impact (€bn, %) 30 31 31 0.8 0.5 8% 14% 15% 19% 33% 32% 41% 74% 26% 20% 19% 67% 46% 34% 24% 26% 2019 2020 2021 2018-20 Old 2018-21 New Legacy - Oil linked 1 To be contracted/spot Already negotiated To be nego
Slide 109: Environmental Social and Governance annexes
2019-2021 Environmental Social and Governance annexes
Slide 110: Agenda
Agenda Our 2018 ESG delivery Our 2019-21 ESG targets Our ESG pillars and backbones Our commitment to Sustainable Development Goals Growth across low carbon technologies and services Operational improvement for a better service Engaging local communities Engaging the people we work with Digitalizatio
Slide 111: Our 2018 ESG delivery
Our 2018 ESG delivery
Slide 112: ESG delivery: commitment to low carbon growth
ESG delivery Our commitment to low carbon growth Plan actions – 2018-2020 2018 43.4 GW renewable capacity1 Development of renewable capacity and reduction of thermal capacity 46.4 GW thermal capacity Implementation of environmental 82 €mn of investments for environmental international best practices
Slide 113: ESG delivery: assets optimization and innovation
ESG delivery Assets optimization and innovation Plan actions – 2018-2020 2018 Large scale infrastructure innovation • 49k charging points1 mostly in grid digitization, smart meters and charging points • 43.8 mn smart meters2 Foster global partnerships and ‘high • 15 projects with startups in deploym
Slide 114: ESG delivery: engaging local communities
ESG delivery Engaging local communities Plan actions – 2018-2020 20181 High-quality, inclusive and fair education 1.0 mn beneficiaries Access to affordable and clean energy, mainly in Africa, Asia and Latin America 3.3 mn beneficiaries2 Employment and sustainable and inclusive economic growth 1.8 mn
Slide 115: ESG delivery: engaging people we work with
ESG delivery Engaging people we work with Plan actions – 2018-2020 2018 • 100% of people involved Appraise performance of people we work with1 • 99% of people appraised • 100% of people involved Climate corporate survey1 • 86% of people participating Global implementation of the diversity and 39% wo
Slide 116: ESG delivery: digitalization and cyber security
ESG delivery Digitalization and cyber security Plan actions – 2018-2020 2018 • Single strategy approach based on 89% of internet web applications protected business risk management through advanced cyber security solutions • Business lines involved in key processes: risk assessment, response and rec
Slide 117: Our 2019-21 ESG targets
Our 2019-21 ESG targets
Slide 118: ESG pillars and backbones to capture opportunities
ESG targets Our ESG pillars and backbones to capture opportunities from energy transition Growth across low carbon technologies and services ENERGY TRANSITION Operational improvement for a better service SUSTAINABLE Engaging local communities LONG TERM VALUE Engaging the people we work with CREATION
Slide 119: Our commitment to Sustainable Development Goals
ESG targets Our commitment to Sustainable Development Goals Our targets are set across the board of the 17 UN SDGs 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Growth across low carbon technologies & services Operational improvement for a better Pillars service Engaging local communities Engaging the p
Slide 120: Growth across low carbon technologies and services
ESG targets Growth across low carbon technologies and services Plan actions Related targets/commitments +11.6 GW renewable capacity1 Development of renewable capacity and reduction of thermal capacity in 2019-21 -7GW thermal capacity Implementation of environmental 340 €mn of investments for environ
Slide 121: Operational improvement for a better service
ESG targets Operational improvement for a better service Plan actions Related targets/commitments 46.9 mn smart meters1 Large scale infrastructure innovation mostly in grid digitization, smart meters 5.4 €bn digitalization capex in 2019-21 and charging stations 455k charging stations2 E&C3 and O&M4
Slide 122: Engaging local communities
ESG targets Engaging local communities Plan actions Related targets/commitments1 High-quality, inclusive and fair education 2.5 mn beneficiaries in 20301 Access to affordable and clean energy 10.0 mn beneficiaries in 20301 Employment and sustainable and inclusive economic growth 8.0 mn beneficiaries
Slide 123: Engaging people we work with
ESG targets Engaging people we work with Plan actions Related targets/commitments • 100% of people involved Appraise performance of people we work with1 • 99% of people appraised • 100% of people involved Climate corporate survey1 • 86% of people participating Global implementation of the diversity
Slide 124: Digitalization and cyber security
ESG targets Cross boosts Digitalization and cyber security Plan actions Related targets/commitments • Single strategy approach based on business risk management 100% of internet web applications • Business lines involved in key protected through advanced cyber security processes: risk assessment, re
Slide 125: Innovation
ESG targets Cross boosts Innovation Plan actions Related targets/commitments Bosting Group’s innovation through a tools Implementation in the business of 60 portfolio composed by innovation hub projects with startups in 2019-21 network, crowdsourcing platforms, Innovation boost intelligence, interna
Slide 126: Our Corporate governance
Our Corporate governance
Slide 127: Corporate governance structure
Corporate governance Corporate governance structure 78% Shareholders’ meeting Audit firm BoD’s composition 11% 11% Executive Board of Statutory Board of Directors1 Auditors (3 members) Non - executive (9 members2) Independent Nomination and Control and Risks Related Parties Committee Corporate Gover
Slide 128: Board composition
Corporate governance Board composition BoD’s members BoD’s Diversity1 P. Grieco Non ex (Chairperson) CGSC 11% 33% F. Starace Executive (CEO and Age Gender General Manager) 67% diversity 22% diversity A. Antoniozzi Independent 67% CGSC RPC Independent 46-56 57-66 67-70 Male Female A. Bianchi NCC RPC
Slide 129: Short-term variable remuneration
Corporate governance Short-term variable remuneration1 Objective Type of target Macro objective Entry level (50%) Target (100%) Over (120%) Ordinary consolidated net 3.9 €bn 4.1 €bn 4.2 €bn Economic Profitability income 40%2 FFO/Consolidated Cash and debt 26% 27% 28% Financial net financial debt man
Slide 130: Long-term variable remuneration
Corporate governance Long-term variable remuneration1 Objective Type of target Macro objective Entry (50%) Target (100%) Over I (150%) Over II (280%)5 Enel’s TSR Enel’s TSR Enel’s TSR Enel’s TSR from 90% to from 100% from 110% TSR2 > 115% of Market Performance 100% of to 110% of to 115% of TSR Index
Slide 131: Disclaimer
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 Enel S.p.A.’s curr
Slide 132: Contact us
Contact us Contacts Email investor.relations@enel.com Phone +39 06 8305 7975 Monica Girardi Channels Head of Group Investor Relations Website Mobile App Investor Relations team Enel.com Enel Investors Federico Baroncelli Francisco Basauri Serena Carioti Alessia Di Ninno Follow us Federica Dori Fabri