Enel SpAInvestor Relations
2008 Results2009-2013 Plan
Rome, March 12, 2009
“Solid strategy and strong performance in unsteady times”
1
Enel SpAInvestor Relations
• Opening remarks
– Group overview
– Financial stability
• 2008 Results
• 2009-2013 Plan
– Group strategy
› Generation & Energy Management - Italy
› Market - Italy
› Infrastructure & Network - Italy
› International
› Endesa
› Enel Green Power
• Financial targets
• Questions and answers
Agenda
2
Enel SpAInvestor Relations
• International expansion completed• International expansion completed
• Financial stability to be reinforced through:
higher cash flow generation
capex management
capital structure strengthening
rights issue
revised dividend policy
Asset disposals
• Financial stability to be reinforced through:
higher cash flow generation
capex management
capital structure strengthening
rights issue
revised dividend policy
Asset disposals
Maintaining A-/A2 rating is key to deploying our plan
Opening remarks
3
Enel SpAInvestor Relations
5.7 GW22.5 TWh
0.7 GW1.9 TWh
North America
0.6 GW2.5 TWh
Central America
5.4 GW21.7 TWh6.5 TWh
Chile
1.6 GW8.8 TWh5.2 TWh
Peru
2.9 GW12.9 TWh7.3 TWh
Colombia
1.1 GW3.9 TWh14.5 TWh
Brazil
4.5 GW14.4 TWh13.4 TWh
Argentina
8.2 GW40.7 TWh17.4 TWh
Russia
Slovakia
40.3 GW96.3 TWh137.2 TWh
Italy
1.0 TWh
France
22.5 GW85.5 TWh109 TWh
Iberia
0.6 GW3.7 TWh
Bulgaria
9.9 TWh
Romania
Greece
0.1 GW0.2 TWh
1. Including: 100% Endesa net of the assets to be transferred to Acciona, full year OGK-5 production and full-year E. Muntenia Sud salesExcluding Viesgo’s January - June 08 production and sales
2008 Installed capacity (GW)2008 Net production (TWh)2008 Tot sales to final customers (TWh)
Opening remarks
Group overview1
An international integrated energy player
0.1 GW0.9 TWh
Morocco
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Enel SpAInvestor Relations
25.4%
17.5%
13.5%
3.8%13.0%
26.8%
14,318 €mn
40%
60%
NetworksGeneration & sales
A well balanced business portfolio
Solid and secured cash flow thanks to regulated business, hedging policies and optimal fuel mix
2008 EBITDA
Group overview
Opening remarks
Forward sales andhedging procurement contracts to protect
margin
Forward sales andhedging procurement contracts to protect
marginStability and high
visibility
Stability and high visibility
Other renewablesHydro
FY08
253.2 (TWh)
Coal
NuclearOil & gas CCGT
2008 production mix
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Enel SpAInvestor Relations
• Cash flow improvement
• Asset disposals
• Stronger capital structure
• Cash flow improvement
• Asset disposals
• Stronger capital structure
• Net debt reduction• Net debt reduction
• Rating stability A-/A2• Rating stability A-/A2
Financial stability
Opening remarks
Sustainable organic growth
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Enel SpAInvestor Relations
• Cash flow from operations
• Capex
• Net financial charges
• Dividend to Enel’s shareholders
• Dividend to minorities
• Rights issue
• Asset disposals
• Endesa (25% stake)
Opening Remarks
Financial stability
2009- 2013 (€bn)
+68
-33
-13
-13
-5
+8
+10
-12
Free Cash Flow from operations +4Free Cash Flow from operations +4
+10 €bn available for debt reduction by 2013
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Enel SpAInvestor Relations
Financial stabilityCash flow improvement – Zenith: efficiency program1 (€mn)
~1,300
Δ Working capital 2009-11 ~ 2,700
Support EBITDA and boost cash generation in unfavourable market conditions
Opening remarks
Cumulative EBITDA2009-2011
~1,400
Impact on pre-taxcash-flow vs 2008
Total pre-taxcash- flow 2009-2011
1. Excluding Endesa
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Enel SpAInvestor Relations
Financial stabilityCash Flow improvement - Capex optimization (€mn)
1. Figures include 100% Endesa
Opening remarks
21,206
16,038
25,147
19,192
Cumulative
37,244
Cumulative adjusted1
44,339
OLD PLAN2008-2012
16,940
15,685
Cumulative
32,626
NEW PLAN2009-2013
Maintenance Growth
3,782 3,1834,207
3,043 2,725
3,879
3,341
3,108
2,673 2,684
4,198
4,370
7,661
2009 2010 2011 2012 2013
6,5247,315
5,716 5,409
8,568
2008 adjusted1
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Enel SpAInvestor Relations
Expected net debt reduction of ~10€bn by 2010
Financial stabilityAsset Disposals
Opening remarks
• HV electricity grid
• Gas distribution network
(majority stake)
• Enel Green Power
(minority stake)
• HV electricity grid
• Gas distribution network
(majority stake)
• Enel Green Power
(minority stake)
6€bn
2009 2010
• Other non strategic assets• Other non strategic assets 2.4€bn1.6€bn
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Enel SpAInvestor Relations
8 €bn
Strengthening our capital structure
Rights issueRights issue Dividend policyDividend policy
2009
Financial stabilityCapital structure optimization
Opening remarks
1. Starting from 2009 results
OLDOLD NEW1NEW1
49 €c/share flat
60% pay out on ord. income
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Enel SpAInvestor Relations
Net debt at 41 €bn by 2013Net debt/EBITDA below 2.5x by 2013
Financial stabilityConclusions
Opening remarks
• Cash flow to reduce debt• Capex to support organic growth
Maintain A-/A2 ratingAttractive dividend yield
• Cash flow to reduce debt• Capex to support organic growth
Maintain A-/A2 ratingAttractive dividend yield
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Enel SpAInvestor Relations
Luigi FerrarisExecutive Vice PresidentAccounting, Planning and Control
2008 Results
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Enel SpAInvestor Relations
Financial highlights: consolidated
FY07 FY08 %€mn
1. Excluding net debt of assets held for sale
Revenues
EBITDA
EBIT
Group net income
Net debt
43,673
10,023
6,990
3,977
55,7911
61,184
14,318
9,541
5,293
49,9671
40.0
45.5
40.7
35.2
-10.4
2008 results
FY07 pro-forma
43,688
9,840
6,781
3,916
55,7911
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Enel SpAInvestor Relations
EBIT
Net financial chargesInterest charges
Financial Income
Fair value of Acciona put option
OtherNet income from equity investmentsusing equity method
EBT
Income tax
Net income (continuing operations)
Net income (discontinued operations)
Net income (including third parties)
Minorities
Group net income
EPS (€)
6,990
(914)1,390
(301)
(136)
(39)
12
6,088
(2,002)
4,086
127
4,213
236
3,977
0.64
From EBIT to net income
FY07 FY08 %€mn
2008 results
FY07 pro-forma
6,781
(885)1,361
(301)
(136)
(39)
12
5,908
(1,956)
3,952
179
4,131
215
3,916
0.63
9,541
(3,210)3,016
-
(34)
228
48
6,379
(585)
5,794
240
6,034
741
5,293
0.86
40.7
--
-
-
-
-
8.0
-70.1
46.6
-
46.1
-
35.2
-
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Enel SpAInvestor Relations
13.5
74.2
5.0
36.3
227.2
20.1
-13.1
45.5
Group EBITDA breakdown: 2007 pro-forma
FY07 FY07 pro-forma %€mn
G&EM - Italy
Market - Italy
I&N - Italy
International
Iberia&Latam
Enel Green Power
S&H1
Total
3,541
325
3,726
2,380
-
-
51
10,023
2,743
318
3,543
766
1,420
989
61
9,840
2008 results
FY08
3,113
554
3,719
1,044
4,647
1,188
53
14,318
1. Including the Engineering and Innovation division
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Enel SpAInvestor Relations
2,743 3,113
554318
3,7193,543
1,044
766
4,647
1,420
1,188
989
53
61
Group EBITDA evolution (€mn)
9,840 +370 +236 +176 +278
+3,227 14,318
1. Including the Engineering and Innovation division
FY07 G&EMItaly
MarketItaly
I&NItaly
Iberia &Latam
S&H1 FY08
+45.5%
Inter-national
-8
MarketI&N
S&H1
G&EM
Iberia & LatamInternational
2008 results
EGP
+199
EGP
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Enel SpAInvestor Relations
EBITDA evolution: G&EM Italy (€mn)
FY07 Generation margin
FY08Trento capital gain
Other
2,743
+337 +104+328
3,113
+13.5%
Trading margin
-399
2008 results
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Enel SpAInvestor Relations
Forward electricity sales: focus on Italy
2009 2010
100 %3%
~45%
Level of total production hedged (%)
UnhedgedHedged
~55%
2008 results
97%
100 %
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Enel SpAInvestor Relations
G&EM – Italy: fuel cost evolution
300.8
Oil (€/ton)
393.9
26.9
Gas (c€/mc)
34.368.8
Coal (€/ton)
104.6
49.363.7
Average fuel cost (€/MWh)
FY07 FY08
FY07 FY08FY07 FY08 FY07 FY08
+29%
+52%+28%+31%
2008 results
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Enel SpAInvestor Relations
Focus on RussiaFocus on Russia
FY07 FY08
5.7
7.2
Coal dark spread (€/MWh)
FY07 FY08
3.9 3.8
Gas spark spread (€/MWh)
FY07 FY08
13.816.3
Unit price1 (€/MWh)
1. Unit price excluding capacity payment
FY07 FY08
Net production (TWh)
40.736.3
2008 results
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Enel SpAInvestor Relations
EBITDA evolution: focus on Endesa1
1. 100% Endesa results as released on February 26, 2009. Endesa’s GAAP
Spain&Portugal
2008 results
Other
6,368
6,895
FY07
+8%
Iberia Latam FY08
+140
+427
Other
3,790 3,930
2,5412,968
Latam
37
-40
-3
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Enel SpAInvestor Relations
EBITDA evolution: focus on Enel Green Power (€mn)
FY07 Italy FY08Spain Other
989 +57
+51 +19 1,188
+20.1%
North America
-4
2008 results
+62+15
South America
Greece
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Enel SpAInvestor Relations
-49,967-55,791
-795
-1,725
Net debt evolution (€mn)
December31, 2007
Capex1Cash-flowfrom
operations
Extra-ordinary
activities2
Netfinancialcharges3
Dividends4 December31, 2008
+14,110-7,3971 +6,5972
-3,1553
2008 results
Discontinued
operations
Discontinued
operations
-3,4014
1. Including investment of Viesgo, Endesa Europe, Ecyr and Enel Rete Gas equal to 895€mn2. Including change of scope of consolidation of the debt for 1,689€mn3. Current net interest charge4. Including 369€mn of dividends relating to minorities
+6,754
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Enel SpAInvestor Relations
Fulvio ContiChief Executive Officer
2009 – 2013 Plan
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Enel SpAInvestor Relations
2009 – 2013 Plan
Group strategyKey Priorities
• Consolidation and integration• Consolidation and integration
• Renewables and innovation• Renewables and innovation
• Operational excellence• Operational excellence
• Leadership in strategic markets• Leadership in strategic markets
• Financial stability• Financial stability
Strategy confirmed and well on track
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Enel SpAInvestor Relations
2009 2010 Long-term
(2013)
Brent ($/bbl)
50 5583
Coal1 ($/ton)
2009 2010 Long-term
(2013)
60 70100
1. CIF ARA (Rotterdam)2. Peninsular3. Brazil, Chile, Colombia, Peru, Argentina
Base assumptions of our plan
CommoditiesCommodities Electricity demand (2008-2013 CAGR) Electricity demand (2008-2013 CAGR)
2009 – 2013 Plan
1.1%
1.7%
1.2%
1.1%
4.6%
Italy
Spain
Russia
Slovakia
Latam
2
3
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Enel SpAInvestor Relations
Group strategyGeneration & Energy Management - ItalyStrategy and targets
2009 – 2013 Plan
• Enhanced competitiveness
of the energy portfolio
• Enhanced competitiveness
of the energy portfolio
• Margin protection• Margin protection
• Excellence in operations• Excellence in operations
70%
30%
Maintenance Growth
2008 2010
31%
40%
% of coal production in Italianproduction mix1
+1.9GW clean coal
• 2009 – 2013 capex programme• 2009 – 2013 capex programme
1. Including Italian activities of Enel GreenPower
2009-2013 total capex = 3.7€bn
3%
2.6%
2008 2010
Plant imbalance
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Enel SpAInvestor Relations
• Leadership in free markets• Leadership in free markets
• Operational excellence in
customer service
• Operational excellence in
customer service
2009-2013 plan
Electricity free market sales (TWh)
2008
54
71
2013
+31%
Electricity free customers (mn)
2008 2013
2.4
8.5
+254%
Cost to serve (€/customer)
2008 2013
45
24
-47%
Group strategyMarket - ItalyStrategy and targets
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Enel SpAInvestor Relations
• Cost leadership• Cost leadership
• Operational excellence• Operational excellence
2009-2013 plan
Group strategyInfrastructure and networks - ItalyStrategy and targets
• 2009 – 2013 capex programme • 2009 – 2013 capex programme
Cash cost (€/customer)
2008
8670
2013
-19%
Duration of interruptions (min/customer)
2008
5647
2013
-16%
2009-2013 total capex = 4.2€bn
• Electric vehicles• Public lighting (LED) • Gas - Digital meter
Smart Grids
• Innovation• Innovation
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Enel SpAInvestor Relations
• Consolidation and integration• Consolidation and integration
• Efficiency and organic growth• Efficiency and organic growth
2009-2013 plan
EBITDA (€mn)
2008
724 302
2010
+26%
2009-2013 total capex = 7.4€bn
Slovakia RussiaOther
28%27%
45%
Group strategyInternationalStrategy and targets
76
1,3111,044
Slovakia RussiaOther
244674
335
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Enel SpAInvestor Relations
90%
10%
• Consolidation and integration• Consolidation and integration
• Efficiency and organic growth• Efficiency and organic growth
2009-2013 plan
2009-2013 total capex = 3.3€bn
Maintenance Growth
Group strategyInternational – Focus on SlovakiaStrategy and targets
New nuclear capacity c900MW by 2013
EBITDA (€mn)
2008
724
2010
674
86%
2008
92%
2013
Nuclear plants uptime
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Enel SpAInvestor Relations
69%
31%
• Consolidation and integration• Consolidation and integration
• Efficiency and organic growth• Efficiency and organic growth
2009-2013 plan
EBITDA (€mn)
2008
761
2010
2009-2013 total capex = 2.1€bnMaintenanceGrowth
302
Group strategyInternational – Focus on RussiaStrategy and targets
New CCGT capacity - 2x410MW on stream by 2011First gas from Severenergia in 2010
78%
2008
81%
2013
Plant availability
1. FY 2008 OGK-5, 153 €mn
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Enel SpAInvestor Relations
58%
11%
31%
• Leadership in key markets• Leadership in key markets
• Organic growth through capex• Organic growth through capex
2009-2013 plan
EBITDA (€bn)
2008
7.0
2010
2009-2013 total capex = 13.1 €bn1
Iberia LatamOther
7.0
Iberia LatamOther
3.64.0
Group strategyEndesaStrategy and targets
• New renewables programme• New renewables programme
• Synergy plan of 813 €mn by 2012• Synergy plan of 813 €mn by 2012
3.0 3.3
0.1
1. Includes ESB
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Enel SpAInvestor Relations
52%
3%
45%
• Leading and balanced position in
generation and sales
• Leading and balanced position in
generation and sales
• Balanced fuel mix• Balanced fuel mix
2009-2013 plan
EBITDA (€bn)
2009-2013 total capex = 7.6 €bn
3,2463.64.0
• Moving towards a more stableregulatory scenario
• Moving towards a more stableregulatory scenario
2008 2010
Group strategyEndesa – Focus on IberiaStrategy and targets
• New renewables programme• New renewables programme
DistributionGenerationother
33%
67%
MaintenanceGrowth• Leadership in distribution enhanced
by digital meters and efficiency plan
• Leadership in distribution enhancedby digital meters and efficiency plan
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Enel SpAInvestor Relations
• Leadership in countries with
expected positive GDP growth
• Leadership in countries with
expected positive GDP growth
2009-2013 plan
2009-2013 total capex = 4.1 €bn
Group strategyEndesa – Focus on LatamStrategy and targets
• Organic growth through capex• Organic growth through capex
• Clear and stable regulatory
framework
• Clear and stable regulatory
framework
EBITDA (€bn)
3.33.0
2008 2010
52%48%
DistributionGeneration
39%
61%
• 2009 – 2013 capex programme • 2009 – 2013 capex programme
MaintenanceGrowth
36
Enel SpAInvestor Relations
200300
400
548
50
100
150
200
264
100
813
2008
2,541
2009 – 2013 Plan
2009 2010 2011 2012
83
213
105
Group strategyEndesa – Focus on synergies (€mn) Strategy and targets
717
613
436
266
CapexEBITDA
37
Enel SpAInvestor Relations
A well diversified portfolio in terms of technologies and geographies
North America (ENA)
Italy
1. France and Greece
Latin America (ELA)
OtherGeoWindHydro
2,547
667
399748
103
Eufer Europe1
FY08
4,464
Group strategyEnel Green Power Overview (2008 – MW)
678
1,237
2,498
51
38
Enel SpAInvestor Relations
86%
14%
• Sustainable and profitable growth• Sustainable and profitable growth
• Low dependence on incentives• Low dependence on incentives
2009-2013 plan
EBITDA (€mn)
1,2031,188
20102008
MaintenanceGrowth
Group strategyEnel Green Power Strategy and targets
Total capacity addition of +1.9GW 2009 -2013
• 2009 – 2013 capex programme• 2009 – 2013 capex programme
• Strong cash flow from operations• Strong cash flow from operations
27% on average for 200827% on average for 2008
5 €bn in 2009-20135 €bn in 2009-2013
2009-2013 total capex = 3.7 €bn
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Enel SpAInvestor Relations
20081
• EBITDA
• Group net income
• Group net debt
• 14.3
• 3.72
• 49.9
Financial Targets
Enel’s commitment (€bn)
Solid performance in a deteriorating economic environment
2010
• 16
• 4
• 45
1. 2008 actual results2. Ordinary net income
2013
• 18
• 5
• 41
40
Enel SpAInvestor Relations
• Opening remarks
– Group Overview
– Financial Stability
• 2008 Results
• 2009-2013 Plan
– Group strategy
› Generation & Energy Management - Italy
› Market - Italy
› Infrastructure & Network - Italy
› International
› Endesa
› Enel Green Power
• Financial targets
• Questions and answers
Agenda
41
Enel SpAInvestor Relations
Disclaimer
This presentation contains certain statements that are neither reported financial results nor other historical information (“forward-looking statements”). These forward-looking statements are based on Enel S.p.A.’s current expectations and projections about future events. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of Enel S.p.A. to control or estimate precisely, including changes in the regulatory environment, future market developments, fluctuations in the price and availability of fuel and other risks. You are cautioned not to place undue reliance on the forward-looking statements contained herein, which are made only as of the date of this presentation. Enel S.p.A. does not undertake any obligation to publicly release any revisions to any forward-looking statements to reflect events or circumstances after the date of this presentation.
THIS PRESENTATION DOES NOT CONSTITUTE AN OFFER OF SECURITIES IN THE UNITED STATES OR ANY OTHER JURISDICTION. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED. ANY PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES WOULD BE MADE ONLY BY MEANS OF A PROSPECTUS TO BE OBTAINED FROM ENEL S.P.A., WHICH WOULD CONTAIN DETAILED INFORMATION ABOUT THE COMPANY AND ITS MANAGEMENT, AS WELL AS FINANCIAL STATEMENTS. THERE IS NO INTENTION TO REGISTER ANY OFFERING OF SECURITIES BY ENEL S.P.A. IN THE UNITED STATES OR TO CONDUCT A PUBLIC OFFERING OF SECURITIES OF THE COMPANY IN THE UNITED STATES. ANY NON-PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES WOULD BE MADEONLY BY MEANS OF AN OFFERING MEMORANDUM CONTAINING INFORMATION SIMILAR TO THAT IN A PROSPECTUS; NO SUCH OFFERING MEMORANDUM HAS BEEN PREPARED AND NO OFFER OF SECURITIES OF THE COMPANY, PUBLIC OR OTHERWISE, HAS BEEN MADE IN ANY JURISDICTION, INCLUDING THE UNITED STATES. THIS PRESENTATION IS NOT FOR DISSEMINATION OR PUBLICATION IN THE UNITED STATES.
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Enel SpAInvestor Relations
Contact us
Investor Relations Team ([email protected])
Visit our website at:
www.enel.it (Investor Relations)
Visit our website at:
www.enel.it (Investor Relations)
• Luca Torchia (Head of IR)
• Pedro Cañamero
• Elisabetta Ghezzi
• Donatella Izzo
• Federica Todaro
• Angela Tretola
+39 06 83053437
+39 06 83055292
+39 06 83052708
+39 06 83057449
+39 06 83059502
+39 06 83052062
+39 06 83053437
+39 06 83055292
+39 06 83052708
+39 06 83057449
+39 06 83059502
+39 06 83052062
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