Endesa S.a. · BME:ELE
Endesa — Investor Presentation (June 2007)
47 slides from Endesa's investor presentation, Jun 26, 2007
Slide 1: Endesa Europe
Endesa Europe Jesus Olmos Clavijo General Manager Europe Valencia, 25 June 2007
Slide 2: Endesa Europe: Focused on Value
ENDESA EUROPE: Focused on VALUE 1.- Sound and profitable asset base 2.- Track record in transformation 3.- Unique position to access a wide range of opportunities 1
Slide 3: Endesa Europe: Focused on Value
ENDESA EUROPE: Focused on VALUE 1.- Sound and profitable asset base 2.- Track record in transformation 3.- Unique position to access a wide range of opportunities 2
Slide 4: Europe: a sound asset base
Europe: a sound asset base 9,775 MW Sales: 53 TWh POLAND ENDESA POLSKA Output: 36 TWh Cap: 330 MW Output: 1,604 GWh Gas portfolio of 6 bcm FRANCE ENDESA FRANCE Trading TURKEY No.3 in France ALTEK Cap: 2,477 MW Cap: 120 MW (*) Output: 8,248 GWh Sales: 19,022 GWh ITALY MOROCCO ENDESA ITALIA GREECE EE
Slide 5: Trading business complements and optimises assets
Instruments Purchases Sales 6.3 6.5 Germany France 10.1 10.0 Netherlands 0.1 0.1 Interconnection capacity Italy Physical assets 5.9 5.9 (>600MW) Denmark 0.7 0.6 Virtual assets "Virtual" generation Total 23.1 23.1 Interconnection capacity (VPP) (>500 Volume traded by GEE MW) Access to organised marke
Slide 6: Portfolio assets in different stages of value creation
4 Endesa Europe's portfolio contains assets in different stages of value creation 2 4 1 Unique position to 3 6 access new 5 opportunities Mytilineos 2001 2004 2006 2009 2012 5
Slide 7: Italy: profitable and efficient position
ITALY ENDESA has built up a profitable and efficient position in Italy with a strategy focused on growth Repowering Workforce reduction Supply Capacity Plan Access to gas Self-supply of green certificates Cost efficiency 2001 2006 2012 6
Slide 8: Italy: actions on assets acquired via Elettrogen
ITALY ENDESA has acted on all the assets acquired via Elettrogen 20012001 5,720 MW 5,720 MW March 2007 7,062 MW OSTIGLIA March 2007 7,062 MW 1,320 OSTIGLIA TAVAZZANO MONFALCONE 1,530 MONFALCONE 1,280 976 TAVAZZANO 1,840 976 CEF 170 Hydro nucleus TERNI TERNI 530 530 POGGI ALTI 20 CET 170 FIUME SANTO
Slide 9: Italy: Obtaining a successful track record
ITALY Obtaining a sucessful track record Production by technology (%) Adquisition 2006 1% oWorkforce 1.580 1.010 Renew oCF(euro)/MWh 10 5 49% CCGT 74% Fuel 18% Energy MIX TWh 8% Hydro 12% 24% 16 14% 2001 100% Coal 2001 2006 2006 26% 58% 16% 34 Avge. Cost Base 100 73 Generation Regulated mkt. Bilater
Slide 10: Italy: solid results
ITALY And has delivered solid results Self-financed and 525 paying dividends1.318 2.440 1.402 805 Net debt Investment Dividends Cash flow Net debt Sep 2001Mar 2007 EBITDA ((euro)M) NET INCOME((euro)M) ROIC (%) 916 15 591 x2,5 x3 x8,5 35% 70% 26% 6 276 70 2002 2006 2002 2006 2002 2006 CAGR 02-06 9
Slide 11: Endesa Italia investment and returns
ITALY ENDESA Italia Endesa Europe has invested (euro)1,820 M in Italy for 80% of Endesa Italia Endesa Italia: Has paid out (euro)525M in dividends Has reduced debt from (euro)1,400M to (euro)750M Has tripled EBITDA to (euro)916M 10
Slide 12: Italy: future plan
ITALY And its future plan is aimed at maintaining high efficiency levels and growing the business base Capacity Plan Self-supply of green 7,700 MW certificates in 2009 Access to Fixed costs competitive gas control 11
Slide 13: Italy: Capacity Plan
ITALY Capacity Plan 1 Scandale 2 Tavazzano 9 o CCGT 800 MW o CCGT400 MW o Under construction o Work begins July 2007 3 o On-stream 2008 2 o On-stream 2009 4 3 Monfalcone 3 & 4 1 4 Fiume Santo 5 o Repowering 800 MW o Coal plant 410 MW o On-stream 2011 o On-stream 2012 12
Slide 14: Italy: Self-supply of green certificates
ITALY Self-supply of green certificates - 50 M(euro) - 32 M(euro) + 83 M(euro) GWh 18% 70% 175% 1.482 Generation 834 847 565 582 Needs 104 2006 2007 2009 Biomass Biomass Mini-hydro Mini-hydro Wind farms Wind farms o 305 GWh of Green o 490 GWh of Green o 688 GWh of Green Certificates from Certificate
Slide 15: Italy: Access to competitive gas
ITALY Access to competitive gas Enlargement Tarvisio 6 bcm 20 bcm Passo Gries 15 bcm Northern L N G Adriatic 8 bcm L N G Monfalcone 8 bcm Pannigaglia 3 bcm L N G L N G Rovigo Rosignan 8 bcm L N G o 8 bcm L N G Livorno 4 bcm Brindisi 8 bcm Galsi 8 bcm L N G Goia Tauro 8 bcm L N G Mazzara del Vallo Pr
Slide 16: Italy: Maintaining efficiency levels
ITALY Maintaining efficiency levels Fixed costs (euro)/MWh Sold Sales per employee (GWh) -48% +190% 9.69 36.9 30.2 29.9 6.75 24.9 5.15 5.00 5.10 10.3 2001 2004 2005 2006 2009 2001 2004 2005 2006 2009 Workforce reduction 1,580 -36% Employees 1,010 2001 2006 15
Slide 17: Portfolio assets in different stages of value creation
Endesa Europe's portfolio contains assets in different stages of value creation 2 4 1 Unique position to 3 6 access new 5 opportunities Mytilineos 2001 2004 2006 2009 2012 16
Slide 18: France: unique position in Central Europe
FRANCE In France ENDESA has a unique position, giving it access to the Central European market Workforce reduction Improvement in unavailability Managing contract with EDF Growth Plan Management of capacity 2004 2006 2012 17
Slide 19: France: plants turned into efficient assets
FRANCE Has turned its plants into efficient assets Workforce Unavailability 1,373 26% 9 1,022 20% 7 8/2004 2006 2004 2006 (obtained control) Severance costs (euro)112,000/empl GWh/employee Employee/MW inst. 9.6 0.45 22% 13% 0.35 8.5 2004 2006 2004 2006 18
Slide 20: France: Delivering solid results
FRANCE Delivering solid results EBITDA ((euro)M) Net Income ((euro)M) 196 65 x2 x13 20% 90% 95 5 2002 2006 2002 2006 CAGR 02-06 19
Slide 21: Endesa France investment and returns
FRANCE ENDESA France Endesa Europe has invested (euro)573M in France for the 65% of Endesa France Endesa France: Has paid out (euro)130M in dividends Has a net cash position of (euro) 350 M Has doubled EBITDA since 2002 to (euro)196M 20
Slide 22: France: future plan and growth possibilities
FRANCE And its future plan is aimed at leveraging excellent growth possibilities CCGT plan 2,000 MW (Clean coal) UNDER STUDY ADD’L THERMAL CAPACITY Wind farm plan 200 MW 21
Slide 23: France: Spark spread signals
- -20 -10 0 10 20 30 40 ene- 06 feb- (0)6 mar- 06 ab r - 06 may- (0)6 j un -06 FRANCE j ul - 06 ag o- (0)6 sep- 06 oct -(0)6 vs peak vs base nov - 06 dic -06 Spark Spread 2009 for CCGT ene - 07 feb-07 mar- 07 abr signals in France/Central Europe - 07 may-07 may- (0)7 Against a backdrop of lack of ca
Slide 24: Combined cycle capacity plan in France
FRANCE Combined cycle capacity plan in France MW CCGTs Authorisation process Emile Huchet: finalized APPROVED 2x400 Immediate awarding 1,200 Hornaing: Own site 400 MW Lacq: 800 MW UNDER ANALYSIS 800 400 400 Lucy: 400 MW Provence: 400 MW 23
Slide 25: Renewables capacity plan in France
FRANCE Renewables capacity plan in France Wind MW Target 200 2009 On stream: Lehaucourt 10 MW 1H07 2007- 64 Own Under construction: 2009 Ambon 10 MW 1H08 Cernon 18 MW 2H08 Kirgrist 26 MW 2H09 2009 + 300 Under development 24
Slide 26: Portfolio assets in different stages of value creation
Endesa Europe's portfolio contains assets in different stages of value creation 2 4 1 Unique position to 3 6 access new 5 opportunities Mytilineos 2001 2004 2006 2009 2012 25
Slide 27: Other assets with lower visibility
Endesa Europe has other assets with lower visibility EBITDA ((euro)M) % Holding Endesa Trading 42 100 Soprolif (FR) 20 45 Empresa Electrica 40 32 de Tahaddart (MAR) Supply in Italy: 8 50 Ergon/MPE (ITA) Altek (Turquia)* 8 50 * Data to 2006 expect for Altek 2007e 26
Slide 28: Portfolio assets in different stages of value creation
Endesa Europe's portfolio contains assets in different stages of value creation 2 4 1 Unique position to Elettrogen 3 6 access new 5 opportunities LA SNET Mytilineos 2001 2004 2006 2009 2012 27
Slide 29: Endesa Europe: Focused on Value
ENDESA EUROPE: Focused on VALUE 1.- Sound and profitable asset base 2.- Track record in transformation 3.- Unique position to access a wide range of opportunities 28
Slide 30: European market will require hefty investment
The European market will require hefty investment in the coming years ~ 200- 300 GW capacity gap 2020 ~ 500-600 GW capacity gap 2030 o The Central European interconnection system (France, Belgium, Germany, Netherlands, Switzerland, Italy and England) will need a further 200,000-300,000 MW of install
Slide 31: Opportunities in countries with large capacity needs
....opening up opportunities in countries with large capacity needs or "public" systems with difficulties financing this growth Additional capacity in 2020 vs. net Markets with privatisation capacity in 2005 (%) pending/underway (TWh) 64% 56% 54% 160 46% 44% 138 60 55 UK Greece Romania Italy Poland
Slide 32: Greece: thin reserve margin
GREECE Attraction of the Greek market: thin reserve margin Capacity needed to sustain a 10% reserve margin (2006A - 2011E) (1) Greece showed a negative reserve margin in 2006... 16,000 14,033 MW 15,000 3,500 MW of new ...which could worsen after the capacity shutdown of two units at the 14,000 Kozlo
Slide 33: Greece: compelling wholesale prices
GREECE ...underpinning compelling wholesale prices SMP - 2007 YTD (April) Market prices - YTD 2007 Italy 74.0 100 Greece 69.8 90 80 70 Spain 43.5 60 50 ((euro)/M W h) 40 UK 37.1 30 20 France 33.9 10 0 1-Jan-07 16-Jan-07 31-Jan-07 15-Feb-07 2-Mar-07 Germany 32.6 Greek SMP Italian Day-ahead Spain Pool
Slide 34: Greece: Alliance with the Mytilineos Group
GREECE Alliance with the Mytilineos Group 50.01% 49.99% NEWCO Assets (MW) Transaction date CHP 511 June 2007 Contribution to Endesa: CCGT 412 June 2009 (euro)485M 54 In operation + Success premium 150 2010 + Price adjustment Renewables 400 2012 Total (euro)600M ~ IRR 10% In addition, CCGT and coal o
Slide 35: Greece: alliance with huge growth potential
GREECE An alliance with huge growth potential 2009 EBITDA target Start-up in July/August 2007 CHP (euro)80M CCGT Under construction (TBC in summer 2009) More than 1,000MW of wind, mini (euro)0M Renewables hydro and solar capacity at various stages of development Beginning 2009 International coal Fut
Slide 36: Greece: Well received by analysts
GREECE Well received by analysts "We value the energy assets of Endesa "We are very positive on the development [of Endesa Hellas at 1.370 MM (euro), outperforming in Hellas] as we think it can be a springboard for almost 15% the starting capitalization significant growth going forward." of 1.200 MM
Slide 37: Poland: a market with strong potential
POLAND Poland: a market with strong potential... Reserve margins Required investment 27.2 50 26.7 26.7 26.6 26.426.5 45 3.1% Required capacity: 47GW 9.9% 4.8% 40 6.6% 16.3% 12.0% 35 Capacity shortfall: 29GW (GW) 25.8 30 25.3 25 24.8 (GW) 24.3 20 23.8 15 23.4 Available capacity: 18GW 10 5 2005 2006 2
Slide 38: Poland: where Endesa already has operations
POLAND ...where Endesa already has operations Ongoing efficiency improvement policy Byalistock Becoming profit-making and paying its first dividends Technical transformation underway to burn biomass in its boilers Poland's renewable targets are ambitious and require huge investment Renewables in bot
Slide 39: Conclusions
CONCLUSIONS 1. ENDESA has built up a highly profitable position in Europe 2. It has met the targets announced to the markets 3. It is on track to meet its 2007 targets despite an especially adverse backdrop 4. It is poised to embark on a path of profitable growth and beat its 2009 guidance 38
Slide 40: Highly profitable position in Europe
CONCLUSIONS 1.- ENDESA has built up a highly profitable position in Europe EBITDA ((euro)M) Net income ((euro)M) CAGR 02-06 Total 43% CAGR 02-06 1.116 Total120% 887 26% 493 425 535 398 264 169 21 52 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Investment capital/Assets Dividends paid ((euro)M)
Slide 41: Targets met in Italy and France
CONCLUSIONS 2.- It has met the targets announced to the markets in ITALY and FRANCE Met Met Guidance through 2006 Guidance through 2006 EBITDA 06 ((euro)M) 635 916 EBITDA 09 ((euro)M) 200 196 Roic 06 10.6% 15% Net inc. 09 ((euro)M) 60 171 IC in 05 290 547 Fixed costs in 09 20% 20% CTC ((euro)M) 135
Slide 42: Exceeded 2006 commitments to results
CONCLUSIONS 2.- Endesa has exceeded its commitments to results in 2006, achieving growth above 25% EBITDA (euro)M Cagr 05-06 26% 1,116 Cagr 02-06 44% 1,100 1,040 887 535 702 263 2002 2004 2005 Target Target FY 2006 2006 2006 Jan-06 Oct-06 41
Slide 43: On track to meet 2007 targets
CONCLUSIONS 3.- On track to meet its 2007 targets 1,150 +12% 1,116 86 1,030 310 +5% (*) 1Q (27% of FY) 2006 2007 Commitment (*) Stripping out the one-off impact of Delibera 254 in 2006 42
Slide 44: Adverse market backdrop in 1Q 2007
CONCLUSIONS 3.- Despite an adverse market backdrop and no new capacity additions 1Q 2007 1Q 2006 % Chg ITALY Pool price in the Italian market ((euro)/MWh) 69.5 77.6 -10% Average price Endesa Italia ((euro)/MWh) 76.9 80.2 -4% FRANCE Base pool price in France ((euro)/MWh) 30.6 70.7 -57% Peak pool pric
Slide 45: Prepared for profitable growth in line with 2009 targets
CONCLUSIONS 4.- Endesa EUROPE is prepared to embark on a path of profitable growth in line with 2009 announced targets EBITDA (euro)M 1,400 CAGR 04-09 21% 1,370 1,050 535 702 2004 2009 target 2009 target New (3/10/05) (3Q06) 2009 target 44
Slide 46: Legal information
Legal information This document was made available to shareholders of Endesa, S.A.. In relation with the announced joint offer by ENEL SpA and Acciona, S.A., Endesa shareholders are urged to read the report of Endesa's board of directors when it is filed by the Company with the Comision Nacional del
Slide 47: Endesa Europe / Signatures
Endesa Europe Jesus Olmos Clavijo General Manager Europe Valencia, 25 June 2007 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ENDESA, S.A. Dated: Jun