Endesa S.a. · BME:ELE

Endesa — Investor Day (November 2015)

38 slides from Endesa's investor day presentation, Nov 23, 2015

1. Slide 1: 2016-2019 Strategic Plan Update

   2016-2019 Strategic Plan Update 23 November, 2015

2. Slide 2: Agenda

   2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 Agenda 1. Introduction José Bogas 2. Energy outlook José Bogas 3. Market trends and strategy Paolo Bondi 4. Financial guidance and dividend policy José Bogas 5. Proven track record of meeting and exceeding targets José Bogas 6. Closing remarks José

3. Slide 3: 1. Introduction

   2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 1. Introduction

4. Slide 4: Highlights

   2016-19 Strategic Plan Update Introduction Madrid, 23 Nov. 2015 Highlights Industry trend geared towards a zero CO2 emission economy Regulatory stability expected as structural tariff surplus from 2014 onwards Challenging new commodities outlook more than compensated by cost efficiencies and other m

5. Slide 5: 2. Energy outlook

   2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 2. Energy outlook

6. Slide 6: Energy policy and climate change objectives

   2016-19 Strategic Plan Update Energy outlook Madrid, 23 Nov. 2015 Energy policy Climate change objectives Road to 2050: 80% reduction in EU 2030 targets CO2 vs. 1990 levels … leveraging on To reach objectives … Efficiency x3 27% (electric vs Renewables Electric vehicle fossil) + 40% CO2 Renewable 10

7. Slide 7: Key issues in the medium to long term energy outlook

   2016-19 Strategic Plan Update Energy outlook Madrid, 23 Nov. 2015 Key issues in the medium to long term energy outlook Electricity  Global energy policy costs should be removed from electricity bill tariffs  Provide long term visibility to RES development while capturing technological improvements

8. Slide 8: 3. Market trends and strategy

   2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 3. Market trends and strategy

9. Slide 9: Macro assumptions

   2016-19 Strategic Plan Update Market trends and strategy Madrid, 23 Nov. 2015 Macro assumptions Old assumptions New assumptions Spanish GDP evolution Commodities (I) Brent ($/bbl) 3.1% 2.5% 75 2.1% 69 63 66 1.6% 1.8% 60 1.4% 55 2015e 2016 2017 2015e 2016 2017 Commodities (II) API2 ($/t) Gas TTF ($/M

10. Slide 10: Electricity market assumptions in Spain

    2016-19 Strategic Plan Update Market trends and strategy Madrid, 23 Nov. 2015 Electricity market assumptions in Spain Mainland electricity demand (%) Thermal Gap (TWh) 2.7% 2.9% 2.0% 1.8% 1.8% 1.7% 73 69 68 70 67 65 2015e 2016 2017 2015e 2016 2017 Old assumptions New assumptions Old assumptions New

11. Slide 11: Strategy

    2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 Strategy 1 Realize full potential of regulation 2 Growth in regulated and liberalized business 3 Focus on efficiency 2015-2019 Capex program focused on 4 profitable investments 11

12. Slide 12: Stable regulatory framework

    2016-19 Strategic Plan Update Market trends and strategy Madrid, 23 Nov. 2015 Stable regulatory framework Current and potential uses of expected tariff surplus Tariff deficit and expected tariff surplus evolution  Not only tariff sufficiency has been achieved…  …. and will generate a surplus from

13. Slide 13: Spain vs. Germany: gap electricity prices drivers

    2016-19 Strategic Plan Update Market trends and strategy Madrid, 23 Nov. 2015 Spain vs. Germany: gap electricity prices drivers Current thermal Reference variable cost(2) (merit order ex Generation mix(1) capacity (GW) generation taxes) (% of hours at margin out of total) 79 €/MWh Fossil 38% CCGT Sp

14. Slide 14: Stable regulatory framework: energy reform almost completed

    2016-19 Strategic Plan Update Market trends and strategy Madrid, 23 Nov. 2015 Stable regulatory framework Energy reform almost completed with some issues close to conclusion  Availability date ? Expected date Distribution  CNMC non-binding report on standard values for investment and O&M  October

15. Slide 15: Strategy

    2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 Strategy 1 Realize full potential of regulation 2 Growth in regulated and liberalized business 3 Focus on efficiency 2015-2019 Capex program focused on 4 profitable investments 15

16. Slide 16: Growth in regulated business

    2016-19 Strategic Plan Update Market trends and strategy Madrid, 23 Nov. 2015 Growth in regulated business Distribution. Main initiatives in place Description Main benefits Smartmeters (million) 12.6 12.6 11.7 10.6 8.6 9.3 Acceleration 6.8 6.8  Meter rental fees in addition to RAB of smart regulate

17. Slide 17: Growth in liberalized business: leveraging our integrated position

    2016-19 Strategic Plan Update Market trends and strategy Madrid, 23 Nov. 2015 Growth in liberalized business Leveraging our integrated position Endesa’s unitary margin (€/MWh) Endesa’s energy mix (TWh) Adjusted(1) 23 22 83 >20 79(2) 82(2) Output 63% 59% 72% Energy purchases 37% 41% 28% FY 2013 FY 20

18. Slide 18: Growth in liberalized business: sources and uses of gas

    2016-19 Strategic Plan Update Market trends and strategy Madrid, 23 Nov. 2015 Growth in liberalized business Sources and uses of gas Gas procurement portfolio evolution (bcm) Historic and future gas uses (bcm) 9 +2 -2 7 Maturities: 8 9% 10% 6 +1 Cheniere Gas (C. Christie) Natural 2 Cheniere 2040 22%

19. Slide 19: Growth in liberalized business: supply

    2016-19 Strategic Plan Update Market trends and strategy Madrid, 23 Nov. 2015 Growth in liberalized business Supply: consolidating our leading position in electricity and further growth in gas General targets 2019 targets Plans and actions  Consolidating  11.2 M electricity  Selective acquisition

20. Slide 20: Strategy

    2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 Strategy 1 Realize full potential of regulation 2 Growth in regulated and liberalized business 3 Focus on efficiency 2015-2019 Capex program focused on 4 profitable investments 20

21. Slide 21: Increased focus and commitment to efficiency

    2016-19 Strategic Plan Update Market trends and strategy Madrid, 23 Nov. 2015 Increased focus and commitment to efficiency…. Opex (1) (€bn) -17% 2.4 -14% 0.2 2.0 2.0 Cash costs (€bn) FY2014 adjusted ~ €2.2bn 2.2 -14% -13% 3.0 2014 2016 2019 2.6 2.6 FY2014 0.2 Maintenance capex (2) (€bn) adjusted ~ €

22. Slide 22: Efficiency in every business line

    2016-19 Strategic Plan Update Market trends and strategy Madrid, 23 Nov. 2015 … in every business line New target Previous target Distribution Distribution -17% unitary cost (1) -13%  New organization in Distribution, with simplified processes and (€/customer) divisions. 59  Full deployment of sma

23. Slide 23: Strategy

    2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 Strategy 1 Realize full potential of regulation 2 Growth in regulated and liberalized business 3 Focus on efficiency 2015-2019 Capex program focused on 4 profitable investments 23

24. Slide 24: Capex program focused on profitable investments

    2016-19 Strategic Plan Update Market trends and strategy Madrid, 23 Nov. 2015 2015-2019 Capex program focused on profitable investments Net CAPEX by business (€bn) Main projects €0.6 bn • Smart meters deployment 12% Distribution • Quality plan / Control room integration €0.2 bn 10% 46% (1) 4.4 Gener

25. Slide 25: 4. Financial guidance and dividend policy

    2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 4. Financial guidance and dividend policy

26. Slide 26: 2016-2017 EBITDA evolution

    2016-19 Strategic Plan Update Financial guidance and dividend policy Madrid, 23 Nov. 2015 2016-2017 EBITDA evolution 2016 (€bn) 2017 (€bn) 13% 12% 3.2 54% 3.1 57% 33% 31% Previous target €3.1 bn €3.1 bn CAGR 2014-19: 2.9% Distribution Generation&Supply Non-mainland 2017 EBITDA ~ 70% regulated 26

27. Slide 27: 2015-2017 key financial metrics

    2016-19 Strategic Plan Update Financial guidance and dividend policy Madrid, 23 Nov. 2015 2015-2017 key financial metrics 2015e 2016 2017 EBITDA ≥ €3.0 bn €3.2 bn €3.1 bn Net Income ≥ €1.0 bn €1.3 bn €1.2 bn Cumulative Free Cash ~€3.8 bn Flow Creating value for shareholders 27

28. Slide 28: 2015-2019 dividend policy

    2016-19 Strategic Plan Update Financial guidance and dividend policy Madrid, 23 Nov. 2015 2015-2019 dividend policy 2015-2016 2017-2019  Maximum amount per share between • 100% Pay-out  100% Pay-out of ordinary Amount • Minimum annual DPS growth target of net attributable income 5% on the ordinary

29. Slide 29: 5. Proven track record of meeting and exceeding targets

    2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 5. Proven track record of meeting and exceeding targets

30. Slide 30: Proven track record of meeting and exceeding targets

    2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 Proven track record of meeting and exceeding targets October 2014 Investor Day November 2015  Tariff sufficiency from 2014 Main regulatory  Law 15/2012 taxes recognition in  RD 738/2015 topics non mainland  EBITDA 2014: €2.9 bn  EBITDA 2014: €3

31. Slide 31: 6. Closing remarks

    2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 6. Closing remarks

32. Slide 32: Closing remarks

    2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 Closing remarks Industry move towards electrification of demand on the back of climate 1 change targets 2 Business plan framed in a stable regulatory context 3 New challenging scenario more than offset by management actions 4 Financial targets upgra

33. Slide 33: 2016-2019 Strategic Plan Update

    2016-2019 Strategic Plan Update 23 November, 2015

34. Slide 34: Annexes

    2016-19 Strategic Plan Update Madrid, 23 Nov. 2015 Annexes

35. Slide 35: 2015-2017 Net Capex by business line

    2016-19 Strategic Plan Update Annexes Madrid, 23 Nov. 2015 2015-2017 Net Capex by business line (€bn) 1.0 0.9 0.8 Generation 0.5 0.5 and Supply 0.4 Distribution 0.4 0.5 0.4 2015 2016 2017 Previous target 0.8 0.9 0.9 (net Capex) Gross Capex 1.0 1.2 1.2 (new assumption) 35

36. Slide 36: Property notice and disclaimer

    “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 be used as part of or construed as a l

37. Slide 37: Disclaimer

    Disclaimer Disclaimer/Notice to Recipients This presentation contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) and information relating to Endesa, S.A. (the “Company”) that are based on the beliefs of its management as well as assum

38. Slide 38: Endesa Mobile

    Endesa Mobile Get full information of the company on Endesa Mobile, the Endesa App for iPhone, iPad and Android devices. Download from Download from App Store Google Play 38

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