Endesa S.a. · BME:ELE
Endesa — Endesa Sa Madrid — FY2023 Earnings Presentation
46 slides from Endesa's earnings presentation, Feb 28, 2024
Slide 1: 2023 Consolidated Results
2023 Consolidated Results February 28th, 2024
Slide 2: FY 2023 Consolidated results
FY 2023 Consolidated results José Bogas CEO
Slide 3: Key highlights of the period
Key highlights of the period Business Cash 2023 performance generation Dividend 4.4 €bn 4.7 €bn 1.0 €/share -18% vs PY(1) +3.0 €bn vs PY EBITDA lfl impacted by FFO sound rebound ~5.5% Dividend yield(2) negative extraordinary driven by successful effects year on year management 0.5 €/share interim di
Slide 4: Investments allowing strong operational performance
Investments allowing strong operational performance Gross Capex by business(1) 2022 2023 RES Capacity (GW) 9.3 9.9 +0.6 GW CO2 GHG free production on total(2) 73% 80% +7 p.p. 12% Fixed price power sales(3) (TWh) 51 53 +2 TWh 15% 38% 2,304 Free power customers (mn) 6.8 6.9 +0.1 mn -2% vs. 2022 TIEPI
Slide 5: Market context
Market context Sustained downward trend on gas and power prices in a demand decline context Average Iberian power pool prices Gas TTF spot prices (€/MWh) CO2 spot prices (€/t) (€/MWh)(1) 105 300 TTF 2022 Average: 123.4 €/MWh +3% -48% 250 95 TTF 2023 Average: 40.6 €/MWh 200 85 150 168 75 87 -67% 100
Slide 6: Latest regulatory developments
Latest regulatory developments ▪ Support to Power Purchase Agreements (PPAs) E.U. Agreement on ▪ Contracts for Difference (CfDs) for new developments and capacity&life extension electricity market ▪ Simplification of the approval of capacity mechanisms structural reform ▪ Several measures to protect
Slide 7: Mainland installed capacity and production
Mainland installed capacity and production Installed capacity(1) (GW) Production(2) (TWh) -4% 17.8 0.6 17.0 -30% Final closure of As 20% Pontes in Q4 2023 -1.4 -6% 9.3 9.9 +6% 80% CO2 free output 49 51% 3.3 -7% vs. FY 2022 Partnership model 3.3 FLAT 29% underway 5.2 3.8 -27% +18% 2022 2023 CO2 free
Slide 8: Liberalized power sales and customers
Liberalized power sales and customers Customers(1) (mn) Sales(2) (TWh) Other relevant KPIs +1% -% Market share leadership at ~30%, 2022 2023 in a context of record 6.8 6.9 78 78 high churn rate Charging points (k#) 13.9 19.3 +39% levels 21 22 Consolidating our Self generation free customer base, 41
Slide 9: Sound performance of Iberian free power margin
Sound performance of Iberian free power margin Output / Sales (TWh) Free power unitary margin (2) (€/MWh) Hedged HNR output (3) CO2-free output / Fixed price sales ~75% +24% 87 12 52 95% 94% 60 22 42 80% -12% 75 TWh 11 Free sales 10 84% 53 39 +3% 53% Output Sales 2022 2023 2024 2025 2026 Non mainlan
Slide 10: Gas margin impacted by previous year exceptional volatility
Gas margin impacted by previous year exceptional volatility Total volumes (1) (TWh) Gas unitary margin(2) (€/MWh) Volumes hedged (3) (%) 2024 margin expected to -6% recover from previous year's exceptionality 99 93 86% 84% 36 28 6.1 65% 64 65 2022 2023 2022 2023 2024 2025 2026 Sales CCGT -2.5 Portfo
Slide 11: FY 2023 Financial results
FY 2023 Financial results Marco Palermo CFO
Slide 12: Key financial highlights
Key financial highlights €mn EBITDA Net Ordinary Income FFO -18% -60% +3.0 €bn 5,327 2,398 4,697 4,392 951 1,672 2022 lfl (1) 2023 lfl (2) 2022 (3) 2023 (3) 2022 2023 Reported Reported Net EBITDA 5,565 3,777 -32% Income 2,541 742 -71% Reg. WK(4) 2,335 554 -1.8 €bn (1) EBITDA 2022 lfl excluding +238
Slide 13: EBITDA evolution mostly impacted by 2022 results and non recurrent effects
EBITDA evolution mostly impacted by the outstanding 2022 results and non recurrent effects €mn EBITDA by business(1) -935 €mn Not included in lfl: 5,565 -18% ▪ Provision for workforce restructuring plans: -165 €mn 5,327 ▪ Gas arbitration award: -450 €mn -1,229 54 4,392 2,419 366 -322 2,419 196 3,777
Slide 14: Gx&Sx: Free power margin softens the exceptional headwinds in gas
Gx&Sx: Free power margin softens the exceptional headwinds in gas €mn Generation & Supply EBITDA lfl -667 €mn Free power margin -19% Higher renewable contribution Supply normalization Positive short position 727 -841 -113 Gas margin -350 Negative comparison with -90 2022 non recurrent: extraordinary
Slide 15: Networks EBITDA improvement in absence of negative non recurrent
Networks EBITDA improvement in absence negative non recurrent impacting previous year €mn Networks EBITDA lfl +54 €mn +3% Gross margin ex non recurrent affected by lower 180 -89 -37 RAB and previous years` resettlements 2022 non recurrent: +180 €mn remuneration regularization Fixed cost increase mai
Slide 16: Net Ordinary Income
Net Ordinary Income Profit & loss (€mn) 2022 2023 Δ yoy Δ% EBITDA lfl (1) D&A and Provisions: 5,327 4,392 (935) -18% • Amortization: -115 €mn Reported EBITDA 5,565 3,777 (1,788) • Bad debt provisions: -106 €mn • Non mainland impairments: -54 €mn D&A and Provisions (1,878) (2,132) (254) Financial res
Slide 17: Sound cash flow generation thanks to effective management of working capital
Sound cash flow generation thanks to effective management of working capital €mn Working capital & others +2.5 €bn(1) 720 1,781 -854 -403 -324 4,697 3,777 Reported Provisions paid Regulatory Rest working Income Taxes Net Financial FFO EBITDA working capital capital & others (2) Expenses 2022 5,565 -
Slide 18: Solid cash flow generation drives net debt reduction
Solid cash flow generation drives net debt reduction €bn Net debt evolution (1) Gross debt(2)(2) -4% -26% 18.5 10.9 10.4 82% Cash (2) collateral reduction Regulatory 0.2 0.6 6.7 13.7 working capital 2.3 1.7 4.7 1.2 2.3 0.9 2.1 9.9 8.5 FFO-Capex-Dividends > 0 10.9 10.4 2022 FFO Cash Capex(3) Dividend
Slide 19: Strong liquidity position enables comfortable maturity schedule
Strong liquidity position enables comfortable maturity schedule Debt maturity(1) (€bn) Debt KPIs 8.5 2022 2023 Coverage of debt maturities 10 27 (months) 3.5 Average life of debt (years) 3.2 4.0 4.1 Liquidity position (€bn) 9.2 10.0 3.0 5.0 Sustainable debt (%) 64% 67% 0.6 0.5 1.1 2024 2025 2026 202
Slide 20: Closing remarks
FY 2023 Closing remarks José Bogas CEO
Slide 21: 2023-26 financial metrics
2023-26 financial metrics 2023 2024 2026 CAGR 2023 -2026(1) EBITDA lfl (€bn) 4.4 4.9-5.2 5.6-5.9 ~10% ~+1% Net Ordinary Income 1.0 1.6-1.7 2.2-2.3 ~-3% (€bn) ~32% DPS 1.0 ~1.1 ~1.5 Dividend policy: (€/sh) 70% payout and a guaranteed minimum Minimum DPS dividend of 1.0 €/share 1.0 1.0 1.0 along the p
Slide 22: Closing Remarks
Closing Remarks 2023 impacted by tough market context and extraordinary effects in gas business, alongside with regulatory measures Ample financial Exceptional cash generation supported by our capability to boost managerial actions investment in Energy Transition Gas and thermal margins normalizatio
Slide 23: Annexes
FY 2023 Annexes endcesa
Slide 24: P&L 2023 vs. 2022
P&L 2023 vs. 2022 €mn 2023 2022 % Var. Income 25,459 32,896 -23% Procurements and services (16,312) (23,394) -30% Income and expenses from energy derivatives (3,172) (2,217) +43% Gross margin 5,975 7,285 -18% Fixed operating costs and other results (2,198) (1,720) +28% EBITDA 3,777 5,565 -32% D&A (2
Slide 25: Endesa: 2023 P&L
Endesa: 2023 P&L €mn Gx+Sx Conventional Gx Renewables Retail Endesa X Dx Structure Adjustments TOTAL adjustments (1) Income 11,339 1,216 20,343 382 (10,101) 2,466 501 (687) 25,459 Procurements and services (7,400) (164) (18,377) (217) 10,064 (166) (209) 157 (16,312) Income and expenses from energy d
Slide 26: Endesa: 2022 P&L
Endesa: 2022 P&L €mn Gx+Sx Conventional Gx Renewables Retail Endesa X Dx Structure Adjustments TOTAL adjustments(1) Income 17,488 934 27,764 368 (15,832) 2,348 472 (646) 32,896 Procurements and services (10,410) (59) (28,690) (215) 15,809 (139) 170 140 (23,394) Income and expenses from energy deriva
Slide 27: Installed capacity and output
Installed capacity and output Total net installed capacity (MW) Total gross output(1) (GWh) 2023 2022 Var. (%) 2023 2022 Var. (%) Mainland 16,984 17,781 -4% 48,896 52,575 -7% Renewables (2) 9,899 9,293 +7% 14,212 12,041 +18% Hydro 4,746 4,746 0% 5,083 4,477 +14% Wind 2,884 2,882 +0% 6,392 5,709 +12%
Slide 28: Fixed costs evolution
Fixed costs evolution Opex(1) evolution (€mn) Unitary costs(2) +4% 2022 2023 1,973 2,050 Unitary cost Grids 43 43 -% €/grid cust. 955 972 Generation Unitary cost €/MWh 17 17 -% 1,353 1,423 Customers -335 -345 Cost to Serve €/customer 10 10 -% 2022 2023 lfl Personnel Costs O&M Costs Capitalized costs
Slide 29: Networks: operational parameters
Networks: operational parameters Distributed energy (TWh) TIEPI(1) (min.) Losses(2) (%) +3% -10% -0.4 p.p. 132 136 54.4 48.7 10.0 9.6 2022 2023 2022 2023 2022 2023 Energy to own customers(2) (TWh) 109 107 -2% (1) Tiempo de Interrupción Equivalente a la Potencia Instalada (Installed Capacity Equivale
Slide 30: Spanish power market
Spanish power market Customers (mn) Energy sold (TWh) Endesa Endesa market share(1) market share(2) 21.4 30.1 224.3 244.7 29% 73.2 30% 92.6 20.5 24% 29.2 151.1 8.7 31% 152.1 0.9 8.7 20.4 0.9 19.4 0.0 1.0 Regulated 43% Free 29% Total Regulated 44% Free 31% Total Residential Business 30 (1) Customers:
Slide 31: 2023 Results and 2024-2026 Sustainability Plan
2023 Results and 2024-2026 Sustainability Plan FY 2023 Results - Madrid, 28 February 2024
Slide 32: 2024-2026 Sustainability Plan
2024-2026 Sustainability Plan ZERO EMISSIONS AMBITION • Net Zero • Distribution Networks • Electrification of uses COMMITMENT TO PEOPLE NATURAL CAPITAL PROTECTION • Our people • Biodiversity • Supply chain • Water • Communities • Waste • Health & Safety • Pollutants GOWTH ACCELERATORS SOUND GOVERNAN
Slide 33: We maintain the decarbonization pathway consistent with the 1.5ºC scenario
We maintain the decarbonization pathway consistent with the 1.5ºC scenario. DECARBONIZATION STRATEGY(1) INVESTMENT PLAN(4) ALIGNED TO SDG AND EU TAXONOMY 2017 2023 2026 2030 2040 (2) Base year Current year Short term Medium term Long term 8.9€bn Scope 1 Generation 193 145 95 0 (gCO2eq/kWh) (3) 443 -
Slide 34: Commitments and targets as a long-term climate strategy
And we set commitments and targets as a long- term climate strategy. Exit from coal-fired generation by 2027 and gas by 2040. Generation 100% renewable generation by 2040. Exit gas retail in 2040 by focusing on the electrification of uses. Marketing 100% of sales from renewable sources by 2040 Decar
Slide 35: Growth in clean electrification with renewable generation and networks
Growth in clean electrification with renewable generation and distribution networks as key axes RENEWABLE 4,300 M€ investment to increase renewable capacity and emission-free GENERATION production by the end of 2026 2023 2024 2026 2023 2024 2026 Total gross installed Net production from renewable 9.
Slide 36: Electrifying applications as a roadmap for commercial strategy
Electrifying applications, as a roadmap for commercial strategy with our customers Commitment to supply quality and digitization. CUSTOMERS Focus on customer loyalty through the promotion of services. 2023 2024 2026 Overall customer satisfaction 7.56 7.64 7.75 index 2023 2024 - 2026 Investment in th
Slide 37: We care about our people, supply chain and communities
We care about our people, our supply chain and the communities where we operate OUR PEOPLE Diversity and training as a key element in our strategy. 2023 2024 2026 2023 2024 2026 Women in positions of 21.1 21.5 22.0 Training (hours/year) 51.8 >45 >45 responsibility (%) Extending our commitment to Car
Slide 38: Commitment to biodiversity conservation
Our commitment to biodiversity conservation is in line with the Kunnming-Montreal global framework. Public commitments to biodiversity and ecosystem protection. BIODIVERSITY PROTECTION Minimization of the impact of Endesa's sites. 2023 2024 - 2026 No net loss of biodiversity and Actions to protect b
Slide 39: Management of water resources and improvement of air quality
With an integrated approach for optimal management of water resources and improvement of air quality RESPONSIBLE USE Constant monitoring of all our production sites located in water-stressed OF WATER areas to ensure efficient resource management. 2023 2024 2026 Water capture in the electricity Commi
Slide 40: Cybersecurity, digitalization and sustainable finance
Cybersecurity, digitalization and sustainable finance are key elements for sustainable growth Cyber risk management and mitigation to conduct business in a secure CYBERSECURITY and efficient manner. 2023 2024 2026 Cyber-exercises in plants/industrial sites (number/year)1 67 55 50 Commitment to the d
Slide 41: Sound governance and respect for human rights
Implementing the best practices of sound governance and ensuring respect for human rights at all times Promotion of sound governance practices and criminal risk prevention SOUND model. GOVERANCE Training in ethical conduct. 2023 2024 2026 2023 2024 2026 Women on the Board of Employees trained in eth
Slide 42: Leading positions in main ESG indexes and ratings
This allows us to maintain our leading positions in the main ESG indexes and ratings. AAA BBB AAA 4.9 4.7 89 86 17.2 17.0 2022 2023 2022 2023 2022 2023 2022 2023 Scale from 0 to 100 Scale from CCC to AAA Scale from 0 to 5 Scale from 100 to 0 Ranking: 7/257 Electric Utilities Ranking: Top 13% Utiliti
Slide 43: Glossary of terms (I/II)
Glossary of terms (I/II) Section number of Consolidated Item Calculation Management Report Average cost of debt (%) Cost of gross financial debt / gross average financial debt: (486 €mn) / 15,373 €mn = 3.2% 7 (Principal x number of days of term) / (Principal in force at the end of the period x numbe
Slide 44: Glossary of terms (II/II)
Glossary of terms (II/II) Section number of Consolidated Item Calculation Management Report Gross tangible (2,068 €mn) and intangible (395 €mn) Capex - rights of use (147 €mn) + Others (-12 €mn) Gross Capex (€mn) n/a = 2,304 €mn Long and short term financial debt (9,636 €mn + 4,091 €mn) - Cash and c
Slide 45: 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 46: 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 46