Endesa S.a. · BME:ELE
Endesa — H1 2019 Earnings Presentation
33 slides from Endesa's earnings presentation, Jul 23, 2019
Slide 1: Endesa 1H 2019 Results
Endesa 1H 2019 Results July 23, 2019
Slide 2: Key highlights
Key highlights EBITDA increased by +5% thanks to the good performance of liberalized business Decarbonization Steady evolution in the Distribution business Smart networks Flat fixed costs during an important investment effort Customer value Net Ordinary Income (1) +3% Efficiency through digitalizati
Slide 3: Endesa's outstanding position
Endesa’s outstanding position Delivery on strategic plan Accelerating the development of the 879 MW awarded in 2017 auctions to be online before end 2019 Decarbonization Participation in new auctions (Canary and Balearic Islands) Smart Supporting the Energy Transition through a sound renewable pipel
Slide 4: Decarbonization
Decarbonization Renewables development Projects under development Pipeline (GW) 879 MW ~9 GW By COD(1) 25 projects 226 windmills 6.9 70% completion 1.8 2020-2021 2022+ Capex €833 M 996,257 80% through solar cells Sustainable Finance 15% By technology(2) Wind Solar 85% Creating new opportunities to a
Slide 5: Smart Networks
Smart Networks Draft new CNMC’s retributive scheme Energy Transition context • Proposals for electricity T&D for 2nd regulatory period. • “PNIEC” assumes of €20 bn to digitalize the networks. • RoR based on WACC set at 5.58%. • Endesa committed €1.9 bn of investment in Distribution for 2018-2021 • N
Slide 6: Customer value
Customer value Improving efficiency and digitalization Business indicators Digital KPIs(1) 2021 Targets 2021 Targets 13% 11% 11% 10% 3.5 2.1 2.8 3.9 Power churn rate, e-billing, % #M 20% 81% 86% 68% ✔ 78% 13% 15% Gas churn rate, 10% ✔ e-care, % % digital 11.1 10.9 10.6 4.4 4.5 8.3 3.8 ✔ 4.4 Cost to
Slide 7: Efficiency through digitalization
Efficiency through digitalization 2021 target -6% Opex(1) evolution (€M) Generation 49 46 46 Unitary cost(3), k€/MW 44 Fixed Costs 1,001 2015 2018 1H2019 (2) 1H2018 EGPE n.a. Fixed cost, CPI 11 43 42 k€/MW 38 2015 2018 1H2019 Perimeter/ -1% Growth 2 Distribution -21% Unitary cost, 53 €/customer 43 4
Slide 8: Commitment to SDGs
Commitment to SDGs SDGs Local communities Our employees Target 2019 Target Diversity Achieved 2019 ~60% Energy production 52% Women in new hires 38% 35% CO2 free Accompaniment plan for a Fair Transition on Compostilla and Teruel plants phase out: • Compostilla: Second life project based on Target Ap
Slide 9: ESG
ESG Main initiatives Environment Social Governance • Selected by the Spanish Climate Change Office to • 660 Jobs generated by works on six Endesa • Non executive independent Chairman. develop 3 new “climate projects” reducing photovoltaic plants in Extremadura Independent Board Members: 55% emission
Slide 10: Market context in 1H 2019
Market context in 1H 2019 Demand (1) Electricity wholesale prices Endesa output(4) (TWh) Endesa distribution area(2) (Not adjusted) Average pool prices Spain (€/MWh) -13% +3% -1.0% Industry -0.5% Services +1.7% FY2018 57.3 €/MWh 34.9 2.1 30.4 5.2 +1% 0.1% Residential -4.2% 53% 2.1 2.8 -47% 11.8 60%
Slide 11: Power operational highlights
Power operational highlights Electricity sales(1) (TWh) Number of electricity customers (Thousands) -3% 0% 49.2 47.7 10,754 10,706 7.3 6.7 9.7 9.1 5,029 4,895 -3% 32.2 31.9 +2% 5,725 5,811 1H 2018 1H 2019 FY2018 1H 2019 B2B(2) B2C SCVP Free Regulated Electricity sales affected by lower demand while
Slide 12: Electricity sales and energy management
Electricity sales and energy management Energy management (TWh) Integrated unitary margin (€/MWh) -2% Sales(1) 40.6 39.7 68.3 Revenue 64.5 Energy purchases 11.9 15.0 Variable cost(2) 39.1 40.8 +8% Mainland output 28.7 24.7 Integrated margin 25.4 27.5 1H 2018 1H 2019 1H 2018 1H 2019 Free customers FY
Slide 13: Gas operational highlights
Gas operational highlights Total sales (TWh) Gas unitary margin(1) (€/MWh) -6% +50% 2.3 49.2 46.4 Wholesale 4.6 3.4 1.5 business 5.9 7.1 CCGT sales 38.7 35.9 Retail 1H 2018 1H 2019 1H 2018 1H 2019 Number of gas customers +2% 1,604 1,634 FY2018-1H2019 (k#) Improvement of gas unitary margin driven by
Slide 14: 1H 2019 consolidated results
1H 2019 consolidated results Financial results
Slide 15: 1H 2019 consolidated results
1H 2019 consolidated results Financial highlights (€M) 1H 2019 1H 2018 Δyoy Revenues 9,791 9,934 -1% Gross Margin 2,890 2,823 +2% EBITDA 1,894 1,804 +5% EBIT 1,100 1,053 +4% Reported Net Income 776 752 +3% Net Ordinary Income (1) 776 752 +3% Net Capex(2) 878 460 +91% FCF (3) (84) (84) +0% (4) Net De
Slide 16: EBITDA evolution
EBITDA evolution €M +5% DYoY 1,894 1,804 13 129 - 52 (1) 616 745 +21% 176 124 -30% 1,012 1,025 +1% 1H 2018 Dx Non mainland Gx Gx + Sx 1H 2019 Distribution Non mainland Gx Generation & Supply Improvement of EBITDA mainly supported by liberalized business performance 1H 2019 Results- Madrid, 23 July 2
Slide 17: Regulated business
Regulated business €M Net capex(1) EBITDA -3% 7% Regulated margin: €1,559 M (-2%) 1,188 1,149 176 • Dx margin: €1,294 M (+1%) 124 43% • Non mainland margin: €265 M (2) €213 M (-15%) 50% 1,012 1,025 Fixed costs: €410 M (+0%) 1H 2018 1H 2019 Asset Management Asset Development Distribution Non mainland
Slide 18: Liberalized business
Liberalized business(1) €M Net capex(2) EBITDA By type By business +21% Liberalized margin: €1,331 M (+8%) 9% 9% 745 • Electricity&Others margin: €1,186 18% 616 117 M (+7%) 22% 93 • Gas margin: €89 M (+35%) €665 M €665 M • Endesa X margin: €56 M (-1%) 69% 628(4) 523 73% Fixed costs: €586 M (-4%) Ass
Slide 19: From EBITDA to Net Ordinary Income
From EBITDA to Net Ordinary Income €M 1H 2019 1H 2018 Δyoy EBITDA 1,894 1,804 +5% D&A (794) (751) +6% Higher D&A as a consequence of IFRS 16 effect and investment effort EBIT 1,100 1,053 +4% Higher financial expenses due to the update of financial Financial expenses (96) (70) +37% provisions and IFR
Slide 20: Cash Flow
Cash Flow €M -163 -705 1,894 -72 -47 907 -991 -84 EBITDA Provisions paid Working capital Income Taxes Financial CFO(2) Cash Capex(3) FCF(4) & Other (1) Expenses 11% 1H 2018 1,804 -124 -1,056 72 -57 639 -723 -84 Delta YoY +5% +31% -33% n.a. -18% +42% +37% +0% Higher CFO almost covering the capex depl
Slide 21: Net financial debt analysis
Net financial debt analysis €M Gross and net debt Net debt evolution 7 6,795 7,257 5,956 84 462 5,770 186 748 1,106 6,021 €868 M as Cash & Derivatives 810 of July 5th 251 recognized as financial assets Net debt 6,795 5,956 5,689 5,770 4,960 FY 2018 1H 2019 FY 2018 IFRS 16 2019 January FCF Dividends
Slide 22: Final Remarks
Final Remarks EBITDA evolution supported by our liberalized business Decarbonization Smart Strong investment effort to lead the Energy Transition networks Customer value Continuous effort in efficiencies Efficiency through digitalization Confidence to meet 2019 guidance fulfilling our SDG commitment
Slide 23: Appendix
1H 2019 consolidated results Appendix
Slide 24: Installed capacity and output
Installed capacity and output Total output(1) (GWh) Total output (GWh) -13% GWh 1H 2019 34,868 (and chg. vs. 1H 2018) Total Output (1) Total 30,375 -13% 6,096 30,375 Hydro 2,783 -47% 1,753 Nuclear 13,212 12% 5,668 Coal 4,987 -45% 6,238 2,456 Natural gas 4,363 26% 1,690 3,606 Oil-gas 2,890 -11% 2,115
Slide 25: Gross margin evolution
Gross margin evolution €M +2% DYoY 2,823 8 104 2,890 - 45 1,227 1,331 +8% 310 265 -15% 1,286 1,294 +1% 1H 2018 Dx Non mainland Gx Gx + Sx 1H 2019 Distribution Non mainland Gx Generation & Supply 1H 2019 Results- Madrid, 23 July 2019 25
Slide 26: Fixed costs evolution
Fixed costs evolution €M -€23 M -2% -€7 M -1%(1)(2) (1) 1,019 18 1,001 994 2 (2) 996 Personnel costs 473 455 489 505 +7% O&M costs 626 626 -4% 604 590 Capitalized costs -80 -80 -99 -99 1H 2018 1H 2018 1H 2019 1H 2019 Reported Adjusted Adjusted Reported (1) 1H 2018 Fixed costs adjusted by: Provisions
Slide 27: Endesa: financial debt maturity calendar
Endesa: financial debt maturity calendar €M Gross balance of maturities outstanding at 30 June 2019: €7,226 M(1) ECP’s and other marketable securities (2) Bank Debt Other debts 5,059 3,446 Endesa's liquidity covers 32 months 43 1,644 of debt maturities 55 64 1,546 252 1,601 51 115 65 156 48 91 184 1
Slide 28: Endesa: 1H 2019 P&L
Endesa: 1H 2019 P&L Gx+Sx Dx Structure Adjustments TOTAL Income 8,520 1,377 319 -425 9,791 Procurements and services -6,893 -83 -56 131 -6,901 Gross margin 1,627 1,294 263 -294 2,890 Self-constructed assets 27 65 7 0 99 Personnel expenses -260 -141 -110 6 -505 Other fixed operating expenses -525 -19
Slide 29: Endesa: 1H 2018 P&L
Endesa: 1H 2018 P&L Gx+Sx Dx Structure Adjustments TOTAL Income 8,649 1,387 275 -377 9,934 Procurements and services -7,058 -101 -41 89 -7,111 Gross margin 1,591 1,286 234 -288 2,823 Self-constructed assets 17 57 6 0 80 Personnel expenses -269 -125 -83 4 -473 Other fixed operating expenses -544 -206
Slide 30: Glossary of terms (I/II)
Glossary of terms (I/II) Reference note (#) of Consolidated Item Calculation Management Report Cost of gross financial debt / gross average financial debt: (€67 M x (360/180) + €1 M) / €7,476 M = Average cost of debt (%) 4.1 1.8% (Principal x number of days of term) / (Principal in force at the end
Slide 31: Glossary of terms (II/II)
Glossary of terms (II/II) Reference note (#) of Consolidated Item Calculation Management Report Gross tangible (€843 M) and intangible (€78 M) Capex - assets from clients’ contributions and Net Capex (€M) 4.3 subsidies (€43 M) = €878 M Long and short term financial debt (€5,571 M + €1,686 M) - Cash
Slide 32: 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 33: IR Team
IR Team Contact us Mar Martinez Sonia Herranz Head of Investor Relations Retail Shareholders Office Email: Isabel Permuy Paloma de Miguel ir@endesa.es Deputy Manager Executive Assistant Phone: Javier Hernandez + 34 91 213 15 03 Senior Analyst + 34 91 213 90 49 Francesc Trilla Website: Senior Analyst