Enel
Enel

Contact

INVESTOR RELATIONS

Institutional investor

Tel: + 39 0683051

Fax: +39 0683057940

email: investor.relations@enel.com

Enel Today

Global diversified player

Data as of June 30th, 2016

East Europe

Capacity: 14.0 GW

Networks: 0.09 mn km
End users: 2.7 mn
Free customers: 0.1 mn

Italy

Capacity: 27.8 GW

Networks: 1.14 mn km
End users: 31.6 mn
Free customers: 10.5 mn

North America

Capacity: 2.5 GW

Mexico &
Central America

Capacity: 1.0 GW

Latin America

Capacity: 18.6 GW

Networks: 0.32 mn km
End users: 15.3 mn

Africa

Capacity: 0.2 GW

India

Capacity: 0.2 GW

Iberia

Capacity: 22.8 GW

Networks: 0.32 mn km
End users: 11.9 mn
Free customers: 12.5 mn

Enel Group

Capacity: 87.1 GW

Networks: 1.87 mn km
End users: 61.5 mn
Free customers: 23.1 mn

Ideally positioned to capture opportunities in all segments1

 

Leading
Network
Operator

 

Leading
Retail
Business

 

Leading
Renewable
Operator

 

Balanced Generation Portfolio

~44% of Group EBITDA

61.5 mn end users

39.7 mn smart meters

~40 €bn RAB2

 

1. As of June 30th, 2016

2. As of December 2015

~18% of Group EBITDA

56 mn power customers

5.4 mn gas customers

 

1. As of June 30th, 2016

~12% Group EBITDA

~26% Group EBITDA

11.2 GW installed

75.8 GW installed

 

1. As of June 30th, 2016


Macro-economic
and energy market trends

Global scenario evolution

 

 

What has changed

Demand

 

OECD: decoupling of GDP and electricity demand
Non-OECD: increasing pro-capita consumption as main driver

 

Lower global demand growth

Commodities

 

Significant overcapacity in oil and coal supply
Gas price less correlated to oil in Europe

 

Commodities prices in line with consensus
Lower power prices in Italy & Spain

FX

 

Increasing pressure on emerging markets

 

Weaker currency exchange rates Chile, Colombia and Brazil devaluation

Key financials

Operational efficiency (€bn)

 

1

/

2

/

3

 

Maintenance capex1

800 €mn savings in 2019 vs. 2014

Opex2

~1 €bn savings in 2019 vs. 2014

Cash costs

 

1. Net of perimeter effect

2. Total fixed costs in nominal terms (net of capitalizations). Reclassified as per new strategic plan criteria

3. March’15 Plan

 

Opex evolution1

 

 

1. Total fixed costs in nominal terms (net of capitalizations). Adjusted figure net of accruals. Impact from acquisitions is not included

2. Of which CPI +0.6 €bn and FX -0.4 €bn

3. March’15 Plan

 

Networks

 

Renewables

 

Conventional
Generation2

 

Staff

3. March’15 Plan

3. March’15 Plan

2. 2014 figure restated for delta perimeter

3. March’15 Plan

3. March’15 Plan

Industrial growth

 

1

/

2

 

Key drivers

 

Growth EBITDA

 

Cumulative growth EBITDA2

1. Growth from 1.3 €bn of optional capex

2. Cumulative 2015-19

3. March ‘15 Plan

Total capex

 

Growth capex by business

 

Growth capex by geography

1. Inclusive of 1.3 €bn optional growth capex in renewables

2. Mainly North America and new countries (Asia and Africa)

Group simplification

 

1

/

2

/

3

 

EGP
integration

  • An acceleration in the pace of growth in the renewable business;
  • A faster introduction across all units of the Enel Group of best practices established and proven in Enel Green Power, resulting in increased cost efficiencies;
  • Optimised asset base and reduced volatility in energy production, improving price competitiveness;
  • Greater integration between networks and renewable energy generation, opening up new business opportunities as distributed generation increases its prevalence, demanding more sophisticated energy management systems;
  • An enhanced retail offering, developing smart, integrated, green solutions for customers to optimise their energy consumption.

Latam
restructuring

  • Simplified governance, resulting in a more efficient decision-making process and operational management;
  • Tailored approaches to the Chilean market and the rest of Latin America;
  • About 360-380 million euros yearly efficiency savings by 2019;
  • Reduction of multiple minority cross-shareholdings between Enersis, Endesa Chile and Chilectra.

Upgrade medium/long-term growth prospects

  • Fully exploit global growth opportunities: +9.2 GW in 2015-19
  • >50% of total group growth capex and growth EBITDA
  • 85% of generation growth capex

Synergies

  • Mitigating merchant risk within the Group
  • Improved energy management capability
  • Vertical integration with networks: smart grids and micro grids
  • Enhanced retail offering

Gaining further flexibility

  • Increased flexibility in asset rotation within the Group
  • Higher optionality with good quality pipeline of small-mid size projects
  • Shorter time to EBITDA < 2 years

Group growth capex 2016-19

 

Generation growth capex 2016-19

Pure Chilean group

 

Latam investment vehicle

 

Objectives

1. 2014 pro-forma figures

Active portfolio management

Acceleration to support strategic repositioning

Strategic
fit

  • Decreasing business risk profile
  • Capital recycling to drive higher returns
  • Optimising economic interests across portfolio

Flexibility

  • Crystallising value through disposals
  • Providing additional resources to fund growth

Shareholder remuneration

Dividend policy

Accelerating returns

For 2015, the dividend will be the higher of 0.16 euros per share, or 50% of FY 2015 Net Ordinary Income. For 2016, the dividend will be the higher of 0.18 euros per share (also considering the shares to be issued in connection with EGP’s integration) or 55% of FY 2016 Net Ordinary Income.

Transition phase

Short-term certainty

Under the policy, the payout ratio will increase by five percentage points every year to reach 65% in 2018.

 

1.Including the impact of EGP integration

Key financial figures

EBITDA and Net income evolution

 

EBITDA
evolution
(€bn)

 

Decreasing
business risk
profile

 

net income
evolution
(€bn)

1. Of which -0.4 from disposals and +0.2 from acquisitions

2. Of which +0.2 from acquisitions

EBITDA by geography1

 

2015

 

2019

EBITDA by business1

 

2015

 

2019

regulated and quasi-regulated

1. Including Holding and Services

2. Including retail in Iberia

Financial plan and strategy

Gross and Net Debt (€bn)

Net Financial expenses on Debt (€bn)

Cash flow generation: cumulative 2016-19 (€bn)

Active portfolio management and free cash flow funding additional growth

1. Accruals, releases, utilizations of provisions in EBITDA (i.e. personnel related and risks and charges). Inclusive of bad debt provision accruals equal to 2.3 €bn

2. Including maintenance capex from acquisitions

3. Net of funds from active portfolio management worth ~2.5 €bn


Financial targets

Overall financial targets

  2015 Old 2016 New 2016 2017 CAGR (%)
2015-19
Recurring EBITDA (€bn) 15.0 ~14.7 ~15.0 ~15.5 ~+4%
Net ordinary income (€bn) 2.9 ~3.1 ~3.2 ~3.4 ~+11%
Minimum DPS 0.161 €/sh 0.18 €/sh 0.18 €/sh - ~+17%
Pay-out 50%2 55% 55%2 60% +15 p.p.
FFO/Net Debt 25% 23% 25% 26% ~+4 p.p.

 

1. Paid on June 22nd, 2016

2. Implicit payout of 55% in 2015 and of 60% in 2016, as a consequence of newly issued shares after EGP integration


Contact

INVESTOR RELATIONS

Tel: + 39 0683051 // Fax: +39 0683057940

email: investor.relations@enel.com