Endesa 2020-22 Strategic Plan Update
November 27, 2019
Agenda
José Bogas
Our Positioning
CEO
Luca Passa
Our vision
Strategic Plan
Strategic plan
CFO
Update: 2020-22
Key Financial Indicators
José Bogas
Closing Remarks
2
Endesa 2020-22 Strategic Plan Update
Our positioning
Our positioning
A portfolio of strategic assets(1)
1st network
operator(2)
1st player in
generation
Largest retail
customer base
Infrastructures & Networks
117 TWh distributed (3) ~12 mn Smart meters(4)
Generation
61.4 TWh output ~58% CO2 free
Customers
~99 TWh power sales 12.3 mn Customers
First integrated player leading energy transition in Iberia
(1) | 2019E | (3) | Net distributed energy | 4 |
(2) | By distributed energy | (4) | Includes LV and HV full deployment |
Our positioning
Delivery on 2019-21 Strategic Plan: operating targets
2018 2019E
Renewables focus (% of total capacity)
CO2 Footprint (% CO2 emission free generation)
29% |
~50% |
31% | |
58% ✔ | Decarbonisation |
~56% |
Power Integrated Margin (€/MWh)
Sales (TWh liberalized(1))
Endesa X (mn e-home clients)
Digitalisation (€mn Digital Capex)
- Ahead of target
25.726
~82 | 83 | 90 | Customer value | ||
2.12.2
0.3 | 0.7(2) | 1.3(3) | Digitalisation |
Sound progress on all strategic pillars
- Excluding international sales and Small Consumer Voluntary Price (SCVP)
(2) | Cumulated figure 2018-2019E | 5 |
(3) | Cumulated figure 2018-2021 |
Our positioning
Delivery on 2019-21 Strategic Plan: financial targets
2014 | 2019E ✔ | CAGR | TSR, % |
2014-19E |
Above target
2019: €1.8 bn
CAPEX (€bn) | 0.8 | 1.9 | +19% | ||
EBITDA (€bn) | 3.1 | 3.7 | +4% | ||
Net ordinary income (€bn) | 0.9 | 1.5 | +11% | ||
Gross DPS (€/sh) | 0.76 | ~1.4 | +13% | ||
Net ordinary income / EBITDA | 29% | 41% | |||
148(2) | |
(2) | |
13.5€(1) | 57 |
11 | |
EUROEuroStoxxTOXX IbexIBEX35
UtilTIL..
11.2% | SRI Investors(3) |
- In line with targets
Improved economic results driven by repositioning through a sustainable strategy
(1) | Preferential subscription share price on November 20th, 2014 (latest IPO) | (3) Socially Responsible Investors over total Capital as of December 2018 | 6 |
(2) | Includes dividends assumed to be re-invested (2019 share price as of Nov 25th: 24.62 €/sh). Calculated with Bloomberg data | ||
Our positioning
Repositioning capital allocation on renewables
Generation capex: 2014 vs 2019E | Mainland installed capacity, GW | |
13%
33%
2014 | 2019E |
0.3 €bn | |
1.2 €bn | |
67% | |
87% |
20x capex increase in decarbonizing our generation mix
Renewables
17.1 | 19.0 |
4.7 | 7.4 |
12.4 | 11.6 |
20142019E
RES on mainland | ||
28% | ~40% | |
capacity | ||
Conventional Generation
Reshape of our business model focusing on decarbonisation
7
Our positioning
Enabling platforms for the Energy Transition
Infrastructure & Networks | ||
+25% | ||
Net Capex | ||
(€bn) | 0.5 | |
0.4 | ||
2014 | 2019E | |
Smart meters | 5 | ~12 (1) |
(mn) | ||
Retail (Power)
2014 | 2019E | ||
Free clients | |||
4.5 | 5.9 | ||
(mn) | |||
Unitary integrated margin(2) | |||
19 | 26 | ||
(€/MWh) | |||
Endesa X
2014 2019E
Net distributed energy | 111 | 117 | E-Home clients | ||||
1.3 | 2.2 | ||||||
(TWh) | |||||||
(mn) | |||||||
Unitary Opex | 59 | 43 | Charging points(3) | ||||
- | 5 | ||||||
(€/end user) | (k#) | ||||||
Established a leading position in infrastructures and new services
(1) | Includes LV and HV full deployment | (3) Public (1k) and private (4k) charging points | 8 |
(2) | Includes Generation margin + Supply margin | ||
Endesa 2020-22 Strategic Plan Update
Our vision
Our vision
Sector trends shaping our capital allocation
Decarbonisation | |||
Enabling | Ecosystems | ||
Infrastructure | & Platforms |
Electrification
10
Our vision
New opportunities arising from decarbonisation
CO2 emissions and actions needed to achieve Paris' goals
GtCO2 | Current trajectory |
Energy efficiency
Renewables
Other solutions
2010 | 2020 | 2030 | 2040 |
1. IEA WEO 2018 SDS Scenario
Revolution of the energy paradigm towards
non-fossil sources. Electricity is the key element:
- Increases efficiency in final energy consumption
- Clean energy: zero CO2 and other emissions
- Allows to increase renewable energy
Electrification as key element to achieve the Paris' goals
11
vision | Integrated National Energy and Climate Plans | |||
Our | 2021-30 | |||
GHG emissions | Renewables | Energy | ||
reduction | efficiency | |||
2030 EU targets | 40% vs. 1990 level | >32% on final | 32.5%(1) | |||
energy consumption | ||||||
Interconnection
15%
Spain
Energy and
Climate
strategic
framework
Energy and Climate Integrated National Plan (PNIEC)
21% vs. 1990 | 42% on final | |||||||
energy use | ||||||||
(48% vs. 2005) | 39.6%(1) | 15% | ||||||
74% on power | ||||||||
generation | ||||||||
Draft on Climate Change and Energy Transition Law | ||||||||
Fair Transition Strategy | ||||||||
236 €bn investments' opportunities from the Energy Transition in Spain
(1) Savings in primary energy consumption vs. reference level | 12 |
Our vision
Accelerated coal phase out over the plan period and beyond
Business Plan 2020-22 | ||||||
Coal capacity | 5.3 | 5.1 | 0.2 | 99% | 0.2 | - |
(GW) | ||||||
26.3 | ||||||
Coal production | ||||||
(TWh) | COAL PHASE | |||||
OUT | ||||||
8.1 | 99% | |||||
0.1 | 0.1 | |||||
2015 | 2019E | 2022 | 2024 | 0.0 | ||
2030 |
Mainland coal phase out by 2022
13
Our vision
Progressing towards total decarbonisation in 2050
Total mainland capacity, GW | Total mainland output, TWh | |
+0.9 GW | 19.0 | 2.8 | ||||||
in 2019 | -4.5 | 17.3 | ||||||
Rnws | 7.4 | |||||||
Nuke | 10.2 | |||||||
3.3 | ||||||||
Thermal | 4.5 | Coal | 3.3 | |||||
3.8 | CCGT | CCGT | 3.8 | |||||
2019E | Renewables | Coal | 2022 | |||||
~40% | Renewable capacity | ~60% | ||||||
49.5 | 8.4 | -6.0 | 52.1 | ||||
9.4 | 17.8 | ||||||
26.3 | |||||||
26.5(1) | |||||||
Coal | |||||||
6.6 | |||||||
7.2 | CCGT | CCGT | 7.8 | ||||
2019E | Renewables | Thermal | 2022 | ||||
~72% | CO2 emissions free | ~85% | |||||
Generation mix fully reshaped
(1) Load factors increase | 14 |
Our vision
Renewable generation 2019-22: our main growth platform
Installed capacity, GW | Output by technology, TWh | |
+38% | ~2x | ||||||||||||||||||||||||||
+0.3 GW Solar | 10.2 | 17.8 | |||||||||||||||||||||||||
0.9 | |||||||||||||||||||||||||||
+0.6 GW Wind | 2.2 | 1.6 | |||||||||||||||||||||||||
in 2019E | 7.4 | 1.9 | 3.6 | 3.3 | |||||||||||||||||||||||
Solar | |||||||||||||||||||||||||||
0.3 | 3.2 | 9.4 | |||||||||||||||||||||||||
2.3 | |||||||||||||||||||||||||||
Wind | 3.2 | 7.6 | |||||||||||||||||||||||||
0.1 | |||||||||||||||||||||||||||
4.0 | |||||||||||||||||||||||||||
Hydro(1) | 4.8 | 4.8 | 5.3 | 6.9 | |||||||||||||||||||||||
2019E | Solar | Wind | 2022 | 2019E | Solar | Wind | Hydro | 2022 |
~40% increase of renewable installed capacity in 2022
(1) Includes mini-hydro | 15 |
Our vision
Strategy in Renewables
Renewables pipeline(1) (GW) | Pipeline by technology | Indicative hedging strategy |
16.1 | 12% | ||
33% | Long term | ||
Total 4.1 GW | customers | ||
4.1 GW | 33% | ||
Long term PPAs | |||
12.0 | |||
Rest of portfolio | |||
2.9 | 88% | 33% | |
1.2 |
Gross Pipeline Early stage | COD | COD | |||
2020-22 | Beyond 2022 | Solar | Wind | ||
4.6 GW(2) with awarded connecting | IRR-WACC spread >200bps | ||||
points | |||||
Leveraging on our customer base to accelerate renewables development
(1) | As of October 2019 | 16 |
(2) | Incudes 0.5 GW in early stage | |
Our vision
Progressing towards total decarbonisation in 2050
CO | specific emissions(1), g CO /kWh | |
2 | 2 | |
-18% | ||
538 | ~ -70% | |
439 | ||
Scope 1(1) | <290 | Full |
(g CO2/kWh) | decarbonisation | |
<140 | @ 2050 | |
2005 | 2017 | 2020 | 2030 | 2050 | ||||||
36% | 44% | ~60% | ~75% | ~100% | Emissions free production | |||||
Scope 3(2) | 16% Absolute Scope 3 | |||||||||
(Mton CO2) | CO2 emissions reduction |
Speed up in our fully decarbonisation objectives
(1) | Scope 1, direct emissions | 17 |
(2) | Scope 3, non direct emission (gas sales and others) | |
Our vision
Enabling Infrastructure
Energy system evolution
Pivotal role in the Energy Transition | ||
Grid Edge Transformation enabling platformization of | ||
DSO/TSO | ||
the sector | ||
Microgrids | Aggregator |
Innovation and resilience required in a changing
environment
Engagement of customers for a more active role
Infrastructures to enable integration of new renewables and electric vehicle
18
vision | Enabling Infrastructure | |
Our | Continuous focus on operational efficiency | |
Net distributed energy, TWh
+3% | ||
117 | 121 | |
1 | 2 | |
2019E | 2022 | |
Losses(1) (%) | 9.5 | 9.2 |
Minutes of | 64 | 52 | |
interruption(2) | |||
OPEX, €/end user
-9%
43 | 39 |
2019E | 2022 |
Resiliency and flexibility
Service quality improvement
Deployment of smart meters and
smart grids
Better service quality reducing interruptions, losses and improving efficiency
(1) | System Operator (S.O) criteria | |
(2) | Own + Programmed + Transport | 19 |
vision | Ecosystems and platforms | |
Our | ||
Share of power on total energy consumption(1),%
23%
29%
2018 | 2030 |
Electric vehicles | 0 | 5 | ||
(mn) | ||||
Transport (TWh) | 7 | 24 | ||
Residential share | ||||
38% | 45% | |||
of power | ||||
Endesa X: Acceleration of electrification
Charging points(2) (th.) | e-Home clients (mn) | ||||||||
+7x | +27% | ||||||||
36 | 2.8 | |
2.2 | ||
5
2019E | 2022 | 2019E | 2022 |
Platforms development to support demand electrification
(1) | Source: Spanish PNIEC | |
(2) | Public and private charging points | 20 |
Our vision
A fully sustainable capex plan reflected in SDGs impacts
Capital allocation by SDG 2019E-22
9%
7.7 €bn
56%
26%
SDGs impacts at 2022
2014 | ||
~60% | ||
28% | ||
RES Capacity/Mainland Capacity | ||
~12 mn | 5 mn | |
Smart Meters (1) | ||
36 k | ||
n.a. | ||
charging points (public and private) | ||
~90% allocated to climate action (SDG 13)
(1) Includes LV and HV full deployment
21
Endesa 2020-22 Strategic Plan Update
Strategic plan
Plan | Key Financial Indicators | ||||||
-22 Strategic | |||||||
Net Capex analysis, €bn | |||||||
By nature | |||||||
2020 | |||||||
+20% | |||||||
By business
+1.3 €bn
By strategic pillar
7.7 | |
6.4 | |
Asset | 4.8 |
development | 3.3 |
6.4
0.7
2.0
7.7
0.5
3.8
Decarbonisation | 5.2 | |||
Electrification | 0.3 | |||
Asset | 2.4 | ||||
management | 2.3 | ||||
Customer (1) | 0.7 | 0.6 | |||
2018-21 | 2019E-22 | ||||
Gross capex | |||||
7.1 | 8.4 | ||||
1.92.0
1.81.4
2018-212019E-22
Conventional
Generation(2)Networks
Retail + Endesa X Renewables(3)
Enabling infrastructure | 2.0 | |
Ecosystems & Platforms | 0.2 | |
More than 20% increase in total capex and 45% increase in asset development
(1) | Customer capex includes Cost to Acquire new customers, Connections and Investments associated with new services. | |
(2) | Includes Net Capex in non mainland | 23 |
(3) Renewables capex includes Hydro investments | ||
2020-22 Strategic Plan
Decarbonisation
Renewables
Renewables net capex 2019E-22 | EGPE(1) gross margin evolution, €bn |
6% | 1.3x |
0.7 | |
3.8 €bn | |
0.3 | |
94% | |
2019E | 2022 |
AssetAsset
development management
Doubling renewable capex drives gross margin growth
(1) EGPE includes wind, solar and mini hydro. It excludes large hydro | 24 |
2020-22 Strategic Plan
Electrification
Maintaining leadership in the power business
Total energy sold 2019E-22(1), TWh
+4% | |||||||||||||
(3) | |||||||||||||
99.1 | 103.1 | ||||||||||||
Regulated | 13.6 | 12.9 | |||||||||||
22.3 | |||||||||||||
Free B2C | 20.0 | ||||||||||||
Free B2B | 65.6 | 67.9 | |||||||||||
2019E | 2022 | ||||||||||||
Free customers | 5.9 | 6.6 | +12% | ||||||||||
mn | |||||||||||||
Regulated customers | 4.8 | 4.1 | -14% | ||||||||||
mn | |||||||||||||
Churn rate (4) | 9.6% | 8.9% | -7% | ||||||||||
% | |||||||||||||
Power integrated margin(2), €/MWh
Unitary revenue | ~68 | ~69 |
Unitary integrated | ~26 | ~30 |
margin | ||
2019E2022
Consolidating integrated margin growth
(1) | Total liberalized sales include international sales (2.7 TWh in 2019E and 3.0 TWh in 2022), not | (3) | Rounded figures | |
(2) | considered in the integrated margin. | (4) | Churn rate B2C free | 25 |
Includes Generation and Supply margin |
Plan | Electrification | |||||||
Strategic22- | Consolidating as the 2nd gas operator | |||||||
2020 | Volumes sold 2019E-22(1), TWh | |||||||
+3% | ||||||||
87 | 89 | |||||||
CCGT sales | 20 | 24 | ||||||
Key figures
2019E | 2022 | Var. 2019E-22 | |||
Free customers | 1.4 | 1.6 | +14% | ||
mn | |||||
Regulated customers | 0.2 | 0.2 | +0% | ||
mn | |||||
Retail
6765
Total customers(2) | 1.7 | 1.8 | +6% |
mn | |||
2019E2022
Churn rate (%) | 8.7% | 8.2% | ||
Unitary margin(3) | ~3 | ~3 | ||
€/MWh | ||||
Lower sales in retail due to progressive electrification of demand
- Not included Wholesale business
(2) | Rounded figures | 26 |
(3) | Gas unitary margin does not include CCGT sales | |
2020-22 Strategic Plan
Electrification
Improving efficiency and digitalisation
Digital KPIs(1)
+29%
Cost to Serve(1) , €/customer
e-billing, mn
2.8 3.5 4.5
+4pp
-14%
Digital sales, % digital
6% | 10% | 14% |
10.9 10.6
9.1
Digital contracts, mn
+6% |
4.4 4.7 5.0
2018 2019E 2022
2018 | 2019E | 2022 |
Digitalisation driving cost to serve reduction
- Power and gas. Not including Social Bonus
27
2020-22 Strategic Plan
Enabling infrastructures
Investments in networks
Net Capex(1) 2019E-22, €bn
1.9 | 2.0 | Resiliency and flexibility in grids facing | ||||||||||
Smart meters | the Energy Transition | |||||||||||
0.1 | ||||||||||||
0.1 | ||||||||||||
Customers | ||||||||||||
0.1 | 0.8 | |||||||||||
0.7 | ||||||||||||
Asset Management | +11% | 1.1 €bn (~50%) capex in digitalisation to | ||||||||||
2.0 | promote efficiencies | |||||||||||
1.8 | ||||||||||||
Asset Development | 1.0 | 1.1 | vs. old plan | |||||||||
100% capex devoted to RAB | ||||||||||||
2018-21 | 2019E-22 | |||||||||||
Double digit growth in Networks capex
(1) 2019E-2022 Gross capex 2.6€bn (includes client contributions) | 28 |
Plan | Enabling infrastructures | |
Strategic22-2020 | Margin evolution | |
Networks margin, €bn
2.6 | 2.5 | |||
-0.15 | +0.03 | |||
Other | 0.4 | |||
0.4 | ||||
Regulated | 2.2 | |||
2.1 | ||||
2019E | Regulated Mg | Others | 2022 |
RAB, €bn | 11.6 | 11.2 | |
2020-25 New remuneration draft
Confirms 5.58% RoR (6.003% in 2020)
Remuneration of digitalisation investments,
confirming our expectations.
New incentive scheme
New regulatory framework draft in line with expectations
29
2020-22 Strategic Plan
Ecosystems and Platforms
Endesa X
Net Capex 2019E-22 | Gross margin, €bn | |||||
~0.2 | ||||||
36% | ~20% | |||||
0.2 €bn | ~0.1 | |||||
64% | ~10% | ~80% | ||||
~90% | ||||||
2019E | 2 | |||||
2022 | ||||||
New business(1) | Mature business(2) |
Leveraging existing businesses to support growth in e-Mobility and e-City
(1) | New business: e-city,e-mobility and e-finance | 30 |
(2) | Mature business: e-home and e-industry |
Plan | Efficiency through digitalisation | |||
-22 Strategic | ||||
2020 | 2019E-22 Digitalisation Net Capex | |||
3% | ||
11% | ||
81% | 1.3 €bn | 5% |
Generation | Networks | Retail | Endesa X |
2022 EBITDA contribution: ~150 €mn
Key highlights
Networks: ~1.1 €bn for digitalisation
- Quality Plan & remote control
- DigI&N and Digital Hub
Renewables: Advanced automation of construction and O&M
- Wind & Solar maintenance
Thermal Gx: Increased flexibility and automation
- Drones & augmented reality with Smart Glasses
Customers: Process automation and increased offering
- B2B and B2C CRM
- Channels and internal process digitalisation
Digitalisation contributes with 25% to EBITDA growth
31
2020-22 Strategic Plan
Efficiency through digitalisation
Unitary KPIs of the Efficiency Plan per area
Opex(1) evolution, €bn
-5% | |||||
0.1 | |||||
2.4 | 0.1 | (0.3) | |||
2.0 | 1.9(3) | ||||
2014 | 2019E | CPI | Growth | Efficiency | 2022 |
44% | 35% | Opex(1)/ Gross margin | 30% |
2014 | 2019E | 2022 | Var. 2019E-22 | ||||||
Unitary cost | (2) | 51 | 45 | 45 | - | ||||
k€/MW | |||||||||
Unitary cost | 59 | 43 | 39 | -9% | |||||
€/end user | |||||||||
Cost to Serve | 13 | 11 | 9 | -18% | |||||
€/customer | |||||||||
Efficiency more than compensate the increase of inflation and growth
(1) | Opex: Total fixed costs in nominal terms (net of capitalizations) | |
(2) | Thermal and renewable costs combined. Includes Corporate fees | 32 |
(3) | Not including non-recurrent expenses | |
Endesa 2020-22 Strategic Plan Update
Key Financial Indicators
Key Financial Indicators
Strategic plan at a glance
€bn
Cumulated net capex vs previous plan
+20%
7.7 | +1.3 €bn | |
6.4 | ||
2018-212019E-22
Net Ordinary Income(1)
+27% | |||||||
1.9 | +0.4 €bn | ||||||
1.5 | |||||||
2019E | 2022 |
EBITDA
+16%
3.7 | 4.3 | +0.6 €bn |
2019E2022
Net Debt
+20%
7.18.5
2019E2022
(1) Reported Net Income - Net Result on Disposals of Non-Financial Assets (over 10€M) - Net Results on Impairment of Non-Financial Assets (over 10 €M) | 34 |
Key Financial Indicators
Profitability and credit metrics
Profitability | Return on invested capital | Credit metrics | ||
+300 bps | ||||||||||||||||
+400 bps | +90 bps | |||||||||||||||
37% | ||||||||||||||||
44% | ||||||||||||||||
40% | 12.1% | 34% | ||||||||||||||
11.2% | ||||||||||||||||
1.9x2x
2019E(1) | 2022 | 2019E(1) | 2022 | 2019E | 2022 |
Net Income/EBITDA | ROIC | FFO/Net Debt | Net debt/EBITDA |
Focus on profitability and value creation
(1) Calculated on Net Ordinary Income | 35 |
Key Financial Indicators
Key Financial Indicators
EBITDA analysis
EBITDA by business, €bn | EBITDA per year, €bn | |
+16%
-0.1 | ||||||
3.7 | 0.3 | -0.1 | ||||
0.4 | ||||||
1.1 | Higher renewable contribution | |||||
0.2 | Reference prices increase | |||||
0.3 | ||||||
Sales growth |
Efficiencies
2.1 • Regulatory revision
2019E
Electrification & Decarbonisation | Networks |
4.3(1)
1.5
0.5
0.2
2.0
2022
Non-mainland
4.1 | 4.3(1) | ||
3.9 | |||
3.7 | |||
1.3 | 1.4 | 1.5 | |
1.1 | |||
0.2 | 0.3 | 0.4 | 0.5 |
0.3 | 0.3 | 0.3 | 0.2 |
2.1 | 2.0 | 2.0 | 2.0 |
2019E | 2020 | 2021 | 2022 |
EGPE | Gx & Sx (2) |
EBITDA growth driven by liberalized business and renewables
(1) | Rounded figures | 36 |
(2) | Gx & Sx EBITDA figure includes Generation and Supply business, Corporate Structure, Services and Adjustments and does not include Non-mainland generation | |
Key Financial Indicators
Key Financial Indicators
Net ordinary income evolution
Net Ordinary Income, €bn
+27%
1.9
1.8
1.7
1.5
2019E 2020 2021 2022
~-0.2 | 1.9 | |
1.5 | +0.6 | |
2019E | EBITDA D&A, financial | 2022 |
& others |
27% increase in Net Ordinary Income vs. 16% in EBITDA
37
Indicators | Key Financial Indicators | |||
Debt analysis | ||||
Key Financial | ||||
Gross debt, €bn | ||||
8.8
7.40.3
Source of funds allocation 2020-22, €bn
9.5
0.3
7.1
8.5
3.7
(5.8)
2019E | 2022 | |||||
Net Debt | Cash & Equivalents | |||||
Cost of debt | ||||||
1.8% | 2.1% | |||||
(%) | ||||||
(1.4) | |||||||
(4.7) | |||||||
(0.4) | |||||||
FFO | Capex(1) | FCF | Dividends | IFRS 16 | Chg. Net | ||
&Others | Debt |
Increase in net debt to boost growth
(1) Net Capex = Gross Capex - assets from clients' contributions - subsidies | 38 |
Financial Indicators
Sustainable finance
Key financing with sustainability instruments
Key
Sustainable debt 2019E, %
10%
€7.1bn
net debt
New green loans linked to renewable
investments: 635 €mn
March, 2019
EIB first Green Loan, 335 €mn
15 years
May, 2019
ICO first Green Loan, 300 €mn
Path to 100% Sustainable Debt
Debt increase by 1.4 €bn will rise the sustainable finance ratio
Sustainable criteria across all financial tools will be pursued
Promoting sustainability criteria among financial counterparties
12 years
Sustainable finance plays a key role in promoting sustainable development over the long term
39
Endesa 2020-22 Strategic Plan Update
Closing Remarks
Closing Remarks
Financial Targets
2019E | 2020 | 2021 | 2022 | |||
CAGR
2019E-22
EBITDA
(€bn)
Net Ordinary Income(1)
(€bn)
Pay out(2)
(%)
Implicit DPS
(€/share)
Net Capex
(€bn)
~ 3.7 | ~ 3.9 | ~ 4.1 | ~ 4.3 | |||
~ 1.5 | ~ 1.7 | ~ 1.8 | ~ 1.9 | |||
100% | 100% | 80% | 70% | |||
~1.4 | ~1.6 | ~1.4 | ~1.3 | |||
1.9 | 1.6 | 2.0 | 2.2 | |||
+5%
+8%
-
2019E-22
7.7
- Reported Net Income - Net Result on Disposals of Non-Financial Assets (over 10 €mn) - Net Results on Impairment of Non-Financial Assets (over 10 €mn)
- 70% pay out long term perspective
41
Closing Remarks
First-class integrated player in Iberia
Outstanding delivery track record
Decarbonisation and electrification driving ample opportunities
Strategy aimed at sustainable growth path
Long term value creation for all stakeholders
42
Endesa 2020-22 Strategic Plan Update
Appendix
Key Financial Indicators
Commodity overview and update to latest market consensus
Brent price, $/bbl
2020-22 plan
2019-21 plan
69.0 67.5
65.0 66.0
68.0 65.0 63.5
2019E 2020 2021 2022
Coal API2, $/ton
77.0 75.0 76.0 78.0
73.0 75.0 74.0
2019E 2020 2021 2022
CO2 price, €/ton
23.5 23.5 24.0 24.5
16.0 17.5 18.0
2019E 2020 2021 2022
PVB, €/MWh
21.4 20.6 20.8 20.9
20.6 | 20.5 | 20.0 | |
2019E | 2020 | 2021 | 2022 |
44
Key Financial Indicators
Power market overview and update to latest market consensus
Mainland Spain demand(1), TWh
2019-22 plan
2018-21 plan
266 | |||
259 | 263 | ||
256 | 258 | ||
253 | |||
250 | |||
2019E 2020 2021 2022
Spain GDP growth, %
2.3%
2.0%
2.2% | 1.8% | ||
2.0% | 1.5% | ||
1.7% | |||
2019E | 2020 | 2021 | 2022 |
Average daily market price(2), €/MWh
56.5 55.0 55.4
50.2 53.2 53.5 53.3
2019E 2020 2021 2022
Thermal gap, TWh
63
523940
343331
2019E 2020 2021 2022
- In bus bars
(2) Arithmetic power prices | 45 |
Key Financial Indicators
Net(1) Capex analysis
Net Capex, €bn
2.2 | ||||
1.9 | 2.0 | |||
Renewables(2) | 1.6 | |||
0.8 | 1.0 | 1.4 | ||
0.6 | ||||
Networks | 0.5 | 0.5 | 0.5 | |
0.5 | ||||
Gx(3) | ||||
0.4 | 0.4 | 0.4 | ||
0.2 | ||||
Supply | 0.2 | 0.1 | 0.1 | |
0.1 | ||||
2019E | 2020 | 2021 | 2022 |
- Exclude client contributions
- Renewables capex includes Hydro investments
(3) Includes Net Capex in non mainland | 46 |
Key Financial Indicators
Gross(1) Capex analysis
Gross Capex(2), €bn
2.4
2.1 | 2.1 | ||||
1.8 | |||||
Renewables(3) | |||||
0.8 | 1.0 | 1.4 | |||
0.6 | |||||
Networks | 0.6 | 0.7 | |||
0.7 | |||||
0.7 | |||||
Gx(4) | |||||
0.4 | 0.4 | 0.4 | |||
0.2 | |||||
Supply | |||||
0.2 | 0.1 | 0.1 | |||
0.1 | |||||
2019E | 2020 | 2021 | 2022 |
- Includes client contributions
- Rounded figures
- Renewables capex includes Hydro investments
- Includes Net Capex in non mainland
- Customer capex includes Cost to Acquire new customers, Connections and Investments associated with new services.
Gross Capex by nature, €bn
8.4 | |||
7.1 | |||
Asset | 3.3 | 4.9 | |
development | |||
Asset | 2.4 | 2.3 | |
management | |||
Customer (5) | 1.4 | 1.2 | |
2018-21 | 2019E-22 |
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Key Financial Indicators
Comparison of old plan vs. updated plan
EBITDA, €bn
+ OTC references | + Supply margin | |||||||
+ Supply margin | + Higher renewables | |||||||
+ Fixed costs | + Fixed costs | |||||||
- Thermal generation | - | Non mainland margin | ||||||
- Non mainland margin | - | OTC references & lower thermal Gx | ||||||
4.3 | ||||||||
3.8 | 3.9 | 4.0 | 4.1 | |||||
3.7 | 3.7 | |||||||
2019E | 2020 | 2021 | 2022 |
Plan 2019-21 | Plan 2020-22 |
48
Endesa 2020-22
Strategic Plan Update
Environmental, Social and Governance annexes
Endesa 2020-22 Strategic Plan Update
Sustainability Plan
Sustainability Plan
Sustainable business model driving change through
innovation | 2020-22 Sustainability Plan |
Endesa public committment to the United Nations
Endesa 2020-22 Strategic Plan Update
Focus on People Centricity
Focus on People Centricity
Engaging people we work with
Plan actions | 2019E | 2020-22 targets | ||
• | 8,566 people involved | ||||
Open Feedback Evaluation | • 100% of people involved | ||||
• | 100% of eligible people | ||||
• | 100% of people involved | • | 100% of people involved | |||
Climate survey(1) | • | 83% of people participating | • | 87% of people participating | ||
Gender - % of women in selection | 29% women involved | 45% women involved in | ||
processes(2) | in recruiting processes | recruiting processes | ||
Promotion of digital skills' dissemination | 40% of people involved in digital | |||
100% of people involved in digital | ||||
among all employees | skills training3 | skills training(3) | ||
1. Eligible and reachable people having worked in the Group for at least 3 months / 2. It excludes the selection processes involving the blue collars / 3. % accumulated with the training given since 2018 | 53 |
Focus on People Centricity
Engaging local communities
Plan actions | 2019E(1) | 2020-22 targets |
High-quality, inclusive and fair education | 0.17 mn beneficiaries | 0.7 mn beneficiaries in 20301 | ||
Access to affordable and clean energy | 1.6 mn beneficiaries | 4.8 mn beneficiaries in 20301 | ||
Employment and sustainable | 0.5 mn beneficiaries | 1.7 mn beneficiaries in 20301 | ||
and inclusive economic growth | ||||
1. Cumulated figures since 2015
54
Endesa 2020-22
Strategic Plan Update
Focus on Corporate Governance
Focus on Corporate Governance
Corporate governance structure
Composition | BoD and Commitees | |
Shareholder's meeting | Audit firm | |
36% BoD's 55%
composition
Board of Directors
(11 members)
9%
Executive | Proprietary | Independent |
Audit and Compliance | Appointments and | |||
Committee | remuneration Committee | |||
56
Governance | Board of Directors composition | |||||||||||||
Corporate | Board of Directors | |||||||||||||
J. Sánchez-Calero | Chairman | |||||||||||||
on | . | |||||||||||||
Focus | J. Bogas | CEO | ||||||||||||
P. Grieco | Proprietary Director | |||||||||||||
F. Starace | Vice Chairman | |||||||||||||
A. de Paoli | Audit & Compliance C. | |||||||||||||
Appointments & Remuneration C. | ||||||||||||||
A. Cammisecra | Proprietary Director | |||||||||||||
M. Roca | Audit & Compliance C. | |||||||||||||
Appointments & Remuneration C. | ||||||||||||||
A. Echevarría | Audit & Compliance C. | |||||||||||||
Appointments & Remuneration C. | ||||||||||||||
H. Revoredo | Audit & Compliance C. | |||||||||||||
Appointments & Remuneration C. | ||||||||||||||
I. Garralda | Audit & Compliance C. | |||||||||||||
Appointments & Remuneration C. | ||||||||||||||
F. de Lacerda | Audit & Compliance C. | |||||||||||||
Appointments & Remuneration C. | ||||||||||||||
Proprietary | Executive | Independent | ||||||||||||
Board of Directors' diversity
By gender | By tenure |
18% | 18% |
27%
82% | 55% | |||
Male | Female | 1-3 years | 4-6 years | Over 6 years |
57
Focus on Corporate Governance
Short-term variable remuneration(1)
2019 Objective
RangeWeight
Net ordinary income | Maximum 120% | 25% | ||
FFO | Maximum 120% | 15% | ||
Fixed costs | Maximum 120% | 20% | ||
Decarbonisation | Maximum 120% | 20% | ||
Safety in the workplace | Maximum 120% | 20% | ||
- 2019 executive director variable remuneration
Type of target
Economic
Financial
Economic
Business
ESG
Macro objective
Profitability
Cash and debt
management
Efficiency
Environmental
Safety
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Corporate Governance
Long-term variable remuneration(1)
Objective
Entry (50%) | Target (100%) | Over I (150%) | Over II (180%) |
Type of target
Focus on
TSR(2)
50%(3)
ROACE(4)
40%(3)
CO2 emissions reduction (gCO2 /KWh)
10%(3)
Endesa's TSR | Endesa's TSR | Endesa's TSR | Endesa's TSR |
from 90 % to | from 100 % to | from 110 % to | |
> 115% of | |||
100% of | 110% of | 115% of | |
TSR | |||
TSR | TSR | TSR | |
-3% Target | Target | +1.5% Target | +3% Target |
+3% Target | Target | -3% Target | <=-5% Target |
MarketPerformance
FinancialProfitability
ESGEnvironmental
- Executive director Long Term Incentive Plan (LTI) 2019 2021. 30 % payment (if any) in the 4th year. 70% payment (if any) in the 5th year (deferred payment)
- Average TSR Endesa compared to average TSR EUROSTOXX Utilities Index EMU. In case of negative absolute TSR of Endesa, the incentive (if any) is reduced on the basis of a regressive scale of the same negative percentage of the absolute TSR of Endesa share, multiplied for a constant value equal to 1.5
- (%) Weight in the variable remuneration
- Cumulative for the period 2019 2021
59
Endesa 2020-22
Strategic Plan Update
Focus on Innovation & Cybersecurity
Innovation & Cybersecurity
Innovation & Cyber security
Innovation
Plan actions | 2020-22 targets |
Cibersecurity
Plan actions | 2020-22 targets | |
Focus on
1000 people involved in promotional innovation actions (workshops, trainings, intrapreneurship)
Promoting innovation culture
5 innovation events per year
Coverage of web applications exposed to internet with advanced cyber security application solutions
Disseminating the information security culture and changing people's behavior in order to reduce risks
100% of internet web applications protected through advanced cyber security solutions
15 cyber security knowledge sharing events per year
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Glossary of terms (I/II)
Item | Definition | |
Average cost of debt (%) | Cost of gross financial debt / gross average financial debt | |
Average life of debt (number of years) | (Principal x number of days of term) / (Principal in force at the end of the period x number of days of the period) | |
Cash flow from operations (€mn) | Net cash provided by operating activities | |
Debt maturities coverage (months) | Maturity period (months) for vegetative debt that could be covered with the liquidity available | |
EBITDA (€mn) | Revenues - Purchases and Services + Work performed by the entity and capitalized - Personnel expenses | - Other fixed |
operating expenses | ||
EBIT (€mn) | EBITDA - Depreciation and amortization | |
Fixed costs (Opex) (€mn) | Personnel expenses + Other fixed operating expenses - Work performed by the entity and capitalized | |
Gross margin (€mn) | Revenues - Purchases and Services | |
Leverage (times) | Net financial debt / EBITDA | |
Net Capex (€mn) | Gross tangible and intangible Capex - assets from clients' contributions and subsidies | |
Funds from Operations (FFO, €mn) | The higher profit before tax and non-controlling interests net of depreciation and amortisation and other | adjustments + |
Change in Net Working Capital + Variation in the payment of the Income Tax | ||
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Glossary of terms (II/II)
Item | Definition | |
Net financial debt (€mn) | Long and short term financial debt - Cash and cash equivalents - Derivatives recognized as financial assets | |
Net financial results (€mn) | Financial Revenues - Financial Expenses - Foreign Exchanges | |
Revenues (€mn) | Sales + Other operating revenues | |
Electric Integrated Margin (€mn) | Contribution margin Gx+Sx - Margin SENP - Margin SCVP - Margin gas - Margin Endesa X - Others | |
Unitary electric integrated margin (€/MWh) | Electric Integrated Margin / Electric sales in the liberalized market in Spain and Portugal | |
Gas retail unitary margin (€/MWh) | Gas margin from retail sales / Gas Retail sales | |
Endesa X Gross Margin (€mn) | Gross margin generated by the added value products and services commercialized by the Endesa X unit | |
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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 factors that may be beyond ENDESA's control or may be difficult to predict.
Forward-looking statements include, but are not limited to, information regarding: estimated future earnings; anticipated increases in generation and market share; management strategy and goals; estimated cost reductions; tariffs and pricing structure; estimated capital expenditures and other investments; estimated increases in capacity and output and changes in capacity mix; repowering of capacity and macroeconomic conditions. The main assumptions on which these expectations and targets are based are related to the regulatory setting, exchange rates, increases in production and installed capacity in markets where ENDESA operates, increases in demand in these markets, assigning of production amongst different technologies, and the availability and cost of the gas, coal, fuel oil and emission rights necessary to run our business at the desired levels.
In these statements we avail ourselves of the protection provided by the Private Securities Litigation Reform Act of 1995 of the United States of America with respect to forward-looking statements.
The following important factors, in addition to those discussed elsewhere in this document, could cause actual financial and operating results and statistics to differ materially from those expressed in our forward-looking statements:
Economic and industry conditions: significant adverse changes in the conditions of the industry, the general economy or our markets; the effect of the prevailing regulations or changes in them; tariff reductions; the impact of interest rate fluctuations; the impact of exchange rate fluctuations; the impact of energy commodities price fluctuations; natural disasters; the impact of more restrictive environmental regulations and the environmental risks inherent to our activity; potential liabilities relating to our nuclear facilities.
Transaction or commercial factors: any delays in or failure to obtain necessary regulatory, antitrust and other approvals for our proposed acquisitions or asset disposals, or any conditions imposed in connection with such approvals; our ability to integrate acquired businesses successfully; the challenges inherent in diverting management's focus and resources from other strategic opportunities and from operational matters during the process of integrating acquired businesses; the outcome of any negotiations with partners and governments. Delays in or impossibility of obtaining the pertinent permits and rezoning orders in relation to real estate assets. Delays in or impossibility of obtaining regulatory authorisation, including that related to the environment, for the construction of new facilities, repowering or improvement of existing facilities or its closure or decommissioning; shortage of or changes in the price of equipment, material or labour; opposition of political or ethnic groups; adverse changes of a political or regulatory nature in the countries where we or our companies operate; adverse weather conditions, natural disasters, accidents or other unforeseen events, defaults quantifiable of monetary obligations by the counterparties to which the Company has effectively granted net credit and the impossibility of obtaining financing at what we consider satisfactory interest rates.
Regulatory, environmental and political/governmental factors: political conditions in Spain and Europe generally; changes in Spanish, European and foreign laws, regulations and taxes.
Operating factors: technical problems; changes in operating conditions and costs; capacity to execute cost-reduction plans; capacity to maintain a stable supply of coal, fuel and gas; acquisitions or restructuring; capacity to successfully execute a strategy of internationalisation and diversification.
Competitive factors: the actions of competitors; changes in competition and pricing environments; the entry of new competitors in our markets.
Further details on the factors that may cause actual results and other developments to differ significantly from the expectations implied or explicitly contained in this document are given in the Risk Factors section of the current ENDESA regulated information filed with the Comisión Nacional del Mercado de Valores (the Spanish securities regulator or the "CNMV" for its initials in Spanish).
No assurance can be given that the forward-looking statements in this document will be realised. Except as may be required by applicable law, neither Endesa nor any of its affiliates intends to update these forward-looking statements.
This presentation does not constitute a recommendation regarding the securities of Endesa, S.A.. This presentation does not contain an offer to sell or a solicitation of any offer to buy any securities issued by Endesa, S.A. or any of its subsidiaries or affiliates.
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IR Team
Contact us
Mar Martinez
Head of Investor Relations
Investor Relations team
Isabel Permuy
Javier Hernandez
Francesc Trilla
Juan Carlos Jimenez
Sonia Herranz
Paloma de Miguel
Contacts
Email: ir@endesa.es
Phone: + 34 91 213 15 03
- 34 91 213 90 49 Website:www.endesa.com
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Endesa SA published this content on 27 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 November 2019 08:27:01 UTC