Endesa S.a. · BME:ELE

Endesa — Investor Day (June 2015)

54 slides from Endesa's investor day presentation, Jun 10, 2015

  1. Slide 1: Endesa Investor Day 2015

    Endesa Investor Day 2015 Madrid, 10 June 2015

  2. Slide 2: Agenda

    Investor Day 2015 Agenda Madrid, 10 June 2015 1. Opening Remarks Borja Prado 2. Market trends and outlook for Iberia José Bogas 3. 2015-2019 Industrial Plan José Bogas/Paolo Bondi 4. Main financial metrics in 2015-17 José Bogas 5. Final remarks José Bogas 2

  3. Slide 3: 1. Opening Remarks

    Investor Day 2015 Madrid, 10 June 2015 1.Opening Remarks 3

  4. Slide 4: Placement of Endesa's shares created liquidity and unlocked value

    Investor Day 2015 Post-placement shareholding Madrid, 10 June 2015 Free-Float Stock Price performance: +22% (2) New Free Float of 30% (vs. former 7.9%) (1) ENEL 70.1% Retail 5.7% Foreing Inst. Inv. 21.8% Domestic Inst. Inv. 2.4%  Endesa returns to IBEX 35® on Dec.2014  Endesa returns to the MSCI W

  5. Slide 5: Make-up of the Board of Directors

    Investor Day 2015 Make-up of the Board of Directors Madrid, 10 June 2015 Chairman Mr. Borja Prado Eulate Executive Mr. Livio Gallo Deputy Chairman Composition according to CNMV’s Code of Mr. Francesco Starace External Propietary External Propietary Good Governance:  45% External Independent Directo

  6. Slide 6: Endesa, a socially responsible company

    Investor Day 2015 Endesa, a socially responsible company Madrid, 10 June 2015 Clients Workforce  Excellent sales department and customer satisfaction  Development, meritocracy and talent ( 7% higher than competitors)  Diversity and work life balance  Electrification of demand, self-consumption a

  7. Slide 7: Remarks: Endesa is ready for the challenges ahead

    Investor Day 2015 Remarks Madrid, 10 June 2015 Spain is heading for recovery after a long period of recession Growth and employment data have shown a remarkable turnaround Political stability is key to reinforce the current path of economic growth We do not foresee major changes in the regulatory fr

  8. Slide 8: 2. Market trends and outlook for Iberia

    Investor Day 2015 Madrid, 10 June 2015 2. Market trends and outlook for Iberia 8

  9. Slide 9: Recent past and mid-term outlook for the Iberian electricity sector

    Recent past and mid-term outlook for the Iberian Investor Day 2015 electricity sector Madrid, 10 June 2015 Recent past Mid-term Outlook  Economic growth starting in 2014  Economic recession and  Positive electricity demand trend supported lower electricity demand by industrial segment  Challengi

  10. Slide 10: Better perspectives on economic and electricity demand growth

    Better perspectives on economic and electricity Investor Day 2015 demand growth Madrid, 10 June 2015 Spanish GDP Spanish mainland electricity demand growth % TWh Spanish Gvment. OECD European Commission +1.9% 273-278 +2.6% 249-252 +1.5% Jan-May REI (1) 2015 2020 (annual) 2015 Forecast (2) Positive e

  11. Slide 11: Consolidation of regulatory stability in the Spanish electricity sector

    Consolidation of regulatory stability in the Investor Day 2015 Spanish electricity sector Madrid, 10 June 2015 Financially balanced electricity sector (€bn) Endesa’s regulatory working capital (€bn) 1.5 Surplus ~0-0.1 0.1 0 Deficit -3.2 Ministry of Industry 2013 2014 2015e 2016e 2017e CNMC 2013 2014

  12. Slide 12: Market context: Overcapacity in the short term but lack of capacity in the medium term

    Market context: Overcapacity in the short term Investor Day 2015 but lack of capacity in the medium term Madrid, 10 June 2015 Capacity margin with and without IED Medium term coal outlook investments in domestic coal Coal capacity System capacity margin (2) GW GW Shutdown 3.9 GW coal capacity Excess

  13. Slide 13: The European Union's sustainability objectives

    The European Union’s sustainability objectives Investor Day 2015 2030 climate and energy package Madrid, 10 June 2015 EU targets Key issues 27%  CO2: binding target. Renewables Market Stability Reserve (1) (MSR) starting 2019 40% CO2  Renewables: binding target for the entire EU Emissions 27% redu

  14. Slide 14: Electrification of energy demand

    Investor Day 2015 Electrification of energy demand Madrid, 10 June 2015 Electrification demand in Spain should increase from 25% in 2014 to 33% in 2030 to reach new objectives RES Final energy (1) RES Main action lines 100% 7% Res 11% 100% 40% 25% Elec 33% 50% 0% 18% Gas 20% 0% Electric vehicle Dist

  15. Slide 15: The electrification of demand requires a re-design of the electricity tariffs

    The electrification of demand requires a re-design Investor Day 2015 of the electricity tariffs Madrid, 10 June 2015 Comparison between Spanish and European household power prices (1) Prices including all taxes and subsidies (€/MWh) Prices excluding taxes and subsidies (€/MWh) 237 208 142 47% 32% 12

  16. Slide 16: 3. 2015-2019 Industrial Plan

    Investor Day 2015 Madrid, 10 June 2015 3. 2015-2019 Industrial Plan 16

  17. Slide 17: Our Industrial Plan is based on 4 strategic priorities

    Investor Day 2015 Our Industrial Plan is based on 4 strategic priorities Madrid, 10 June 2015 1 Realize full potential of regulation 2 Organic growth in the liberalized business 3 Focus on efficiency 4 2015-2019 Capex program focused on profitable investments Strong and stable free cash flow generat

  18. Slide 18: Our Industrial Plan is based on 4 strategic priorities

    Investor Day 2015 Our Industrial Plan is based on 4 strategic priorities Madrid, 10 June 2015 1 Realize full potential of regulation 2 Organic growth in the liberalized business 3 Focus on efficiency 4 2015-2019 Capex program focused on profitable investments Strong and stable free cash flow generat

  19. Slide 19: Some pending regulatory developments in the short term

    Some pending regulatory developments in the short term… Investor Day 2015 Madrid, 10 June 2015  Draft Ministerial order with unitary investment and O&M standards expected Distribution  Explicit RAB framework still to be finalized Non-mainland Generation  3rd draft Royal Decree to be approved by t

  20. Slide 20: Working to capture opportunities in the medium and long term

    … and working to capture opportunities in the medium and long term Investor Day 2015 Madrid, 10 June 2015 Distribution Non-mainland generation  Beat standard unitary costs  Optimize energy losses and quality Regulated business incentives  Adapt investment decision making to new regulation  Remun

  21. Slide 21: Our Industrial Plan is based on 4 strategic priorities

    Investor Day 2015 Our Industrial Plan is based on 4 strategic priorities Madrid, 10 June 2015 1 Realize full potential of regulation 2 Organic growth in the liberalized business 3 Focus on efficiency 4 2015-2019 Capex program focused on profitable investments Strong and stable free cash flow generat

  22. Slide 22: Organic growth in the liberalized business

    Organic growth in the liberalized business Investor Day 2015 Consolidating our leading position in electricity and further growth in gas Madrid, 10 June 2015 Targets by geography Electricity customers (1) (millions) 11.2 12.0  Consolidating electricity 3.2 Spain leadership and growing in gas Regula

  23. Slide 23: Strengthening our position in the gas market

    Investor Day 2015 Strengthening our position in the gas market Madrid, 10 June 2015 Competitive supply  Increasing presence in the residential segment Main action  Maintaining wholesale lines customers portfolio  Gas expansion in France and Portugal  1 bcm HH indexed from 2016  2 bcm Cheniere c

  24. Slide 24: Portugal: Growth in electricity and gas while focusing on efficiency

    Portugal: Growth in electricity and gas while focusing on operational and cost efficiency Investor Day 2015 Madrid, 10 June 2015 Development of a BPO model for B2C Endesa’s target in Portugal Electricity  Full Business Process Outsourcing to customers increase efficiency in processes and IT (Thousa

  25. Slide 25: VAS market is already sizeable in Spain and is expected to grow

    VAS market is already sizeable in Spain and is expected to grow Investor Day 2015 Madrid, 10 June 2015 Market characteristics Main drivers for the future  Fully liberalized market  Electrification of Demand  Strong competition  Expected decrease in the cost of technologies  Continuous adaptatio

  26. Slide 26: Main lines of action in VAS

    Investor Day 2015 Main lines of action in VAS Madrid, 10 June 2015 Endesa expected VAS margin B2B and Public Administration Gross Margin Main products (€ M) ~110  Electrical projects & installations  Gas projects & maintenance ~70 ~50%  Lightning solutions  HVAC (1) installations  Energy effici

  27. Slide 27: Our Industrial Plan is based on 4 strategic priorities

    Investor Day 2015 Our Industrial Plan is based on 4 strategic priorities Madrid, 10 June 2015 1 Realize full potential of regulation 2 Organic growth in the liberalized business 3 Focus on efficiency 4 2015-2019 Capex program focused on profitable investments Strong and stable free cash flow generat

  28. Slide 28: Focused on efficiency

    Investor Day 2015 Focused on efficiency Madrid, 10 June 2015 Opex (1) (€bn) -14% Cash costs (€bn) FY2014 adjusted ~ €2.2bn -13% FY2014 0.2 adjusted Maintenance capex (2) (€bn) ~ €2.8bn 2.8 -10% Significant cash costs reduction (1) Total fixed costs in nominal terms (net of capitalizations) 28 (2) Ne

  29. Slide 29: Focused on efficiency: reduction cost targets

    Focused on efficiency Investor Day 2015 Reduction cost targets Madrid, 10 June 2015 Distribution  Full deployment of smart metering by 2018 Distribution unitary -13%  Investment in efficiency oriented innovative technologies cost (1) (€/customer)  Investment in telecontrol and higher automation 

  30. Slide 30: Our Industrial Plan is based on 4 strategic priorities

    Investor Day 2015 Our Industrial Plan is based on 4 strategic priorities Madrid, 10 June 2015 1 Realize full potential of regulation 2 Organic growth in the liberalized business 3 Focus on efficiency 4 2015-2019 Capex program focused on profitable investments Strong and stable free cash flow generat

  31. Slide 31: 2015-2019 Capex program focused on profitable investments

    2015-2019 Capex program focused on profitable Investor Day 2015 investments Madrid, 10 June 2015 Net CAPEX by business (€bn) Net CAPEX by nature (€bn) 65% 4.4 (1) 35% Distribution Generation Maintenance Growth Non-mainland Supply (1) Gross capex amounts to 5.6 bn€ Growth investments return: Spread I

  32. Slide 32: Capex program in regulated business: Distribution

    2015-2019 Capex program in regulated business: Investor Day 2015 Distribution Madrid, 10 June 2015 Net CAPEX (€bn) Main growth projects  Smart meters deployment: €0.6 bn 67%  Control Rooms integration: €0.1 bn 2.1 (1) 33% Maintenance Growth Different sources of regulated revenues:  Network mainte

  33. Slide 33: Capex program in regulated business: Non-mainland

    2015-2019 Capex program in regulated business: Investor Day 2015 Non-mainland Madrid, 10 June 2015 CAPEX (€bn) Main growth projects  Imported coal IED investments: €0.2 bn 52% 48%  Some minor repowering projects 0.5 Maintenance Growth Focus on preserving Endesa’s position in the non-mainland syste

  34. Slide 34: Capex program in liberalized business: Generation

    2015-2019 Capex program in liberalized business: Investor Day 2015 Generation Madrid, 10 June 2015 CAPEX (€bn) Main growth projects 27%  Imported coal IED investments: €0.35 bn 28%  National coal IED investments still under 1.4 scrutiny 45% Maintenance Nuke Growth Maintenance Generation capex adju

  35. Slide 35: Capex program in liberalized business: Supply

    2015-2019 Capex program in liberalized business: Investor Day 2015 Supply Madrid, 10 June 2015 CAPEX (€bn) Main growth projects  Valued Added Services: ~ €0.3bn 64% 0.4 36% Maintenance Growth VAS margin expected to double by 2019 35

  36. Slide 36: Our Industrial Plan is based on 4 strategic priorities

    Investor Day 2015 Our Industrial Plan is based on 4 strategic priorities Madrid, 10 June 2015 1 Realize full potential of regulation 2 Organic growth in the liberalized business 3 Focus on efficiency 4 2015-2019 Capex program focused on profitable investments Strong and stable free cash flow generat

  37. Slide 37: 2015-2017 EBITDA evolution

    2015-2017 EBITDA evolution Investor Day 2015 Madrid, 10 June 2015 2015e (€bn) 2016e (€bn) 2017e (€bn) 13% 3.1 54% 33% Distribution Generation&Supply Non-mainland Regulated EBITDA >65% 37

  38. Slide 38: With improvement in financial expenses

    With improvement in financial expenses Investor Day 2015 Madrid, 10 June 2015 Gross debt structure Liquidity terms reviewed (€bn) (1) Current (1) Target 15% 38% 85% 3.9 62% Variable rate Fix rate Cash Available LT credit lines  Refinancing of €1.5 bn fixed rate loan through  €2.2 bn credit lines r

  39. Slide 39: 2015-2017 Free Cash Flow of ca. €3.8 bn

    Strong and stable free cash flow generation Investor Day 2015 allowing for new investment opportunities Madrid, 10 June 2015 2015-2017 FCF evolution (€bn) (1) (1) 2015-2017 Free Cash Flow of ca. €3.8 bn 39 (1) Net capex

  40. Slide 40: New investment opportunities

    New investment opportunities Investor Day 2015 Madrid, 10 June 2015 Organic investment options Inorganic investment opportunities  Improve networks and implement  Fragmented domestic market as source of new innovative technologies investment opportunities  Accelerate deployment of proven  Acquis

  41. Slide 41: 4. Main financial metrics in 2015-17

    Investor Day 2015 Madrid, 10 June 2015 4. Main financial metrics in 2015-17 41

  42. Slide 42: 2015-2017 Guidance: creating value for shareholders

    2015−2017 Guidance: creating value for shareholders Investor Day 2015 Madrid, 10 June 2015 2015 2016 2017 EBITDA ~€3bn ~€3.1bn ~€3.1bn Net Income ~€1.0bn ~€1.2bn ~€1.2bn Net Capex ~€0.8bn ~€0.9bn ~€0.9bn 42

  43. Slide 43: A very attractive dividend policy with minimum annual DPS growth of 5%

    A very attractive dividend policy with a minimum Investor Day 2015 annual DPS growth target of 5% Madrid, 10 June 2015 2014-2016 Dividend Policy  2014 ordinary dividend of 0.76€/share (1)  2015-2016: Maximum amount per share between Amount  100% Pay Out  Minimum annual DPS growth target of 5% on

  44. Slide 44: Committed to and beating our targets

    Committed to and beating our targets Investor Day 2015 Madrid, 10 June 2015 October 2014 Investor Day June 2015  No tariff deficit from 2014 onwards Regulatory topics  Law 15/2012 taxes recognition in non mainland  EBITDA 2014e: €2.9 bn EBITDA 2014: €3.1 bn Financial  EBITDA 2015e: €2.9 bn EBITD

  45. Slide 45: 5. Final remarks

    Investor Day 2015 Madrid, 10 June 2015 5. Final remarks 45

  46. Slide 46: Final remarks

    Final remarks Investor Day 2015 Madrid, 10 June 2015 46

  47. Slide 47: Appendix

    Appendix Endesa 2015 Investor Day

  48. Slide 48: Main assumptions

    Main assumptions Investor Day 2015 Madrid, 10 June 2015 Main assumptions Macro Unit 2015E 2016E 2017E GDP Spain YoY % 1.4% 1.6% 1.8% GDP Portugal YoY % 1.3% 1.5% 1.9% Fx US$/€ 1.13 1.17 1.22 CPI Spain % 0.2 1.2 1.4 CPI Portugal % 0.6 1.1 1.5 Energy market Unit 2015E 2016E 2016E Electricity demand –S

  49. Slide 49: Electricity demand, commodities and power price assumptions

    Electricity demand, commodities and power Investor Day 2015 price assumptions Madrid, 10 June 2015 Electricity Demand Spain Gas Demand in Spain Spanish GDP -Mainland- -Mainland- Demand (TWh) Bloomberg consensus 2.7% 243 250 255 259 FMI 2.4% Endesa BP (% annual growth) 2.5% 2.0% 2.1% 1.8% 1.6% 1.4% 1

  50. Slide 50: VAS's portfolio: B2B

    VAS’s portfolio Investor Day 2015 B2B Madrid, 10 June 2015 Products Description Grids, transformation centers and substations: New connections, contracted power or supply Electricity projects voltage increase, in-house facilities restructuring works, power lines relocation, etc… Ensure supply qualit

  51. Slide 51: VAS's portfolio: B2B, B2C

    VAS’s portfolio Investor Day 2015 B2B, B2C Madrid, 10 June 2015 Products Description Assessment and equipment solutions for improved efficiency of lighting, Combined Efficiency projects (>50,000 kWh/year) Heat & Power and Heating, Ventilated & Air Conditioning. B2B Renewable projects Technical solut

  52. Slide 52: This document is the property of ENDESA

    Investor Day 2015 Madrid, 10 June 2015 “This document is the property of ENDESA and therefore must not be disseminated or published without ENDESA's prior written consent. The content of this document is provided for information purposes only and therefore has no contractual substance and should not

  53. Slide 53: Disclaimer

    Disclaimer Investor Day 2015 Madrid, 10 June 2015 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

  54. Slide 54: Endesa Mobile

    Endesa Mobile Get full information of the company on Endesa Mobile, Investor Day 2015 the Endesa App for iPhone, iPad and Android devices. Madrid, 10 June 2015 Download from Download from App Store Google Play 54 Investor Day 2015 Madrid, 10 June 2015

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