Endesa S.a. · BME:ELE
Endesa — Investor Presentation (June 2007)
30 slides from Endesa's investor presentation, Jun 25, 2007
Slide 1: Spain and Portugal. Accomplishing Commitments
SPAIN AND PORTUGAL Accomplishing Commitments Valencia , 25 June 2007
Slide 2: Spain and Portugal. Accomplishing Commitments: Results
Spain and Portugal. Accomplishing Commitments Results Business Drivers Deregulated activities Regulated activities Efficiency improvement Regulation 1
Slide 3: Results: 2006 Results, 1Q 07 Results, Track record and forecast
Spain and Portugal. Accomplishing Commitments Results 2006 Results 1Q 07 Results Track record and forecast results Business Drivers Deregulated activities Regulated activities Efficiency improvement Regulation 2
Slide 4: 2006 and 1Q07 Results
2006 and 1Q07 Results EBITDA +11% 4,010 3,835 (euro)M 227 3,266 +24% 212 1,027 1Q 825 824 2005 2006 (1) 2007 target (1) Stripping out revenues recognized for non-mainland generation extra cost in 2001-2005: (euro)212M in 1Q06, and (euro)227M for FY06. 3
Slide 5: Track Record and forecast results
Track Record and forecast results EBITDA 2005 EBITDA 2006 3,620 3,750 3,835 3,150 3,266 3.7% 2.2% 3.6% Commitment Real Commitment Update July 06 Real beginning BID beginning BID process process We committed ourselves and we did our duty improving the prospects ... EBITDA 2009E 4,590 4,630 4,200 0.9%
Slide 6: Sustained growth in an attractive market
Sustained growth in an attractive market EBITDA: 2006-2009 (euro)M 444 3,835 161 Historical non- 418 mainland deficit ((euro)227M) 4,630 3,608 (0) 2006 Increase in Improved Regulatory Target 2009 Activity Operating Changes Efficiency 5
Slide 7: Business Drivers: Business View
Spain and Portugal. Accomplishing Commitments Results Business Drivers Business View Deregulated activities Regulated activities Efficiency improvement Regulation 6
Slide 8: Business View of the Strategic Plan
Business View of the Strategic Plan Competition Asset portfolio Risk management (balance) Fuel supply Operating efficiency The Customer Versus the regulatory risk Consolidated improvement in supply quality Added-value products and services Regulation Deregulated business subject to market forces Reg
Slide 9: Deregulated activities
Spain and Portugal. Accomplishing commitments Results Business Drivers Deregulated activities Business chain management Revenues enhancement Customers portfolio Selective and profitable commercial policy Mainland fuel cost CDM management Regulated activities Efficiency improvement Regulation 8
Slide 10: Managing the portfolio of deregulated activities (1)
Managing the portfolio of deregulated activities (1) Diversification of mainland ordinary regime revenues GWh % (euro)/MWh Day-ahead markets 8,527 45.8% 38.4 PBC9,429 50.6% 50.2 Ancillary services 678 3.6% 93.1* Total 18,634 100.0% 46.3 * Average price of managed energy in secondary markets Auctions
Slide 11: Managing the portfolio of deregulated activities (2)
Managing the portfolio of deregulated activities (2) Competitive fuel mix Rest of (euro)/MWh Endesa the industry Thermal unit cost17.5 Total unit cost ex-pumping 15.7 20.0 Total unit cost 16.1 Management of exposure to CO2 ENDESA has reduced its specific emissions in Spain and Portugal by 27.9% sinc
Slide 12: Revenue enhancement in liberalized business
Revenue enhancement in liberalized business Electricity sales (GWh) Average revenue from mainland generation(1) and pool price (euro)/MWh 16% LM 73,8 revenues: Liberalized +21%% 51% Market 50,2 43,1 Pool 41,6 price: 84% -41,6% 51,3 Avg. 50,1 49% Wholesale revenues: Market -2.3% 1Q 06 1Q 07 Rest of S
Slide 13: Customer portfolio with intrinsic value and hedge against wholesale price volatility
Customer portfolio with intrinsic value and hedge against wholesale price volatility 4,60% 5,00% 6,60% 7,40% Other Competitor 4 7,30% 5,50% 4,70% 2,30% 12,10% 12,60% 13,90% Competitor 3 5,90% 12,20% 10,30% 9,70% 13,70% Competitor 2 32,60% Competitor 1 14,80% 10,80% 7,10% 55,60% 55,60% 52,20% 37,40%
Slide 14: A selective and profitable commercial policy
A selective and profitable commercial policy Equivalent energy price in the Underlying from Sales deregulated market ((euro)/MWh) Renewals 56,2 51,0 52,3 50,0 50,2 44,5 45,4 41,6 1Q 2006 1H 2006 2006 1Q 2007 Unlocking the value of the customer portfolio: Renewal and signature of new contracts at a p
Slide 15: Competitive mainland fuel costs thanks to efficient use of generation portfolio
Competitive mainland fuel costs thanks to efficient use of generation portfolio Cost of mainland fuel Load factor of thermal in O.R. plants(1) vs. rest of the sector (euro)/MWh -3.1% 65.8% 16.2 49.5% 15.7 ENDESA 1Q06 ENDESA 1Q07 ENDESA Rest of the sector Even in a scenario with high rainfall, ENDESA
Slide 16: ENDESA's strategy to reduce greenhouse gas emissions
ENDESA's strategy to reduce greenhouse gas emissions (GHG) CCGTs and special regime (wind, etc.) Leader at CENIT Proyect Part of Technologic European Plataform for zero emissions in fossil fuels Internal emission reductions power plants (ZEP) Part of the European Energy Wisdom Program Internal reduc
Slide 17: Leader in CDM management
Leader in CDM management: Key player in the development of CDM projects (2005-12) Projects with ERPA contract 82.2 MtCO2e signed Value of the > portfolio (euro)630M Projects with Letters of Intent 18.6 MtCO2e (LoI) and agreed price Other projects 60.5 MtCO2e under study Total : 161.3 MtCO2e Procurem
Slide 18: Regulated activities: efficient management and profitability
Spain and Portugal. Accomplishing Commitments Results Business Drivers Deregulated activities Regulated activities Efficient management of regulated services and profitability Distribution: EBITDA's strong growth and ... ... quality of supply Non-mainland: retribution adaptation Renewables/CHP Effic
Slide 19: Efficient management of service and profitability in regulated activities
Efficient management of service and profitability in regulated activities Adequation of assets and quality of supply remuneration in Distribution and efficiency improvements (euro)M % EBITDA 1Q07 366 36% Regulatory framework for renewables/CHP that underscores the commitment to renewable energies Wi
Slide 20: Distribution: Strong growth in EBITDA and...
Distribution: Strong growth in EBITDA and... Increase in Distribution EBITDA 1Q 2007 (euro)M 131 60 18 53 Increased Activity Operating Incr. EBITDA Remuneration Improvements Distribution Distribution EBITDA improved largely due to better remuneration, fewer losses and optimization of fixed costs Dis
Slide 21: .... quality of supply
.... quality of supply Interruption time Network investments ((euro)Bn) 3:38 ENDESA 1.1 -47% 0.9 1.0 2:56 2:51 0.6 Spain 2:25 2:14 2:10 2:02 1:55 2003 2004 2005 2006 2003 2004 2005 2006 Demand peak and increases Investment volumes will be the 11.36% 9.63% necessary to maintain the levels of quality
Slide 22: Regulatory framework and stable remuneration for non-mainland systems
Regulatory framework and stable remuneration for non-mainland electricity systems since 2006 Remuneration of investment, operating & maintenance and fuel costs Ministerial Orders developing rules for Recognition of right to review costs for non-mainland systems 2001-2005: published in - Shortfall re
Slide 23: Renewables/CHP
Renewables/CHP Endesa commitment: +840 net MW up to 2009 Spanish (MWg) portfolio More than 7,500 MW in Spain and more than 1,400 MW in Portugal Grid connection Presence at 11 Comunidades rights 3,180 MW Autonomas 50% of the portfolio in Span and Portugal with government authorization 1,580 MW and/or
Slide 24: Efficiency improvement
Spain and Portugal. Accomplishing Commitments Results Business Drivers Deregulated activities Regulated activities Efficiency improvement Regulation 23
Slide 25: The Efficiency Improvement Plan is still ahead of schedule
The Efficiency Improvement Plan is still ahead of schedule Increase in annual EBITDA as a result of the Efficiency Improvement Plan 57.6 400 (euro)M 342.4 103,4 239 400 116 123 2005 2006 1Q2007 2007-2009 Target 2009 85.6% of the plan target reached in 1Q07 24
Slide 26: Regulation
Spain and Portugal. Accomplishing Commitments Results Business Drivers Deregulated activities Regulated activities Efficiency improvement Regulation 25
Slide 27: From 2007: legislative changes point to a more competitive and stable market
ESPANA Y PORTUGAL From 2007: The latest legislative changes point to a more competitive and stable market Acknowledgment of the real cost of energy Tariff Quarterly adjustments to reflect market conditions Prior acknowledgment of tariff deficit Regulated Distributors will acquire their demand needs
Slide 28: Conclusion
Conclusion We have a commitment 4.630 (euro)M EBITDA in 2009 Business View of the Strategic Plan Spain and Competition Asset portfolio Risk management (balance) Fuel supply Portugal Operating efficiency The Customer We know what Regulatory risks Consolidated improvement in supply quality we have to
Slide 29: 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 30: Signatures
SPAIN AND PORTUGAL Accomplishing Commitments 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: June 25, 2007