Endesa S.a. · BME:ELE
Endesa — Investor Presentation (June 2007)
78 slides from Endesa's investor presentation, Jun 26, 2007
Slide 1: Endesa Latin America, Valencia, 25 June 2007
ENDESA LATIN AMERICAVALENCIA, 25 JUNE, 2007
Slide 2: Agenda
AGENDA Unique business platform in Latin America capable of capturing market growth and minimizing risk. Robust macroeconomic environment in the region. Strong outlook for our electricity markets. Significant opportunities ahead for profitable growth. 2009 targets clearly achievable. 1
Slide 3: Agenda
AGENDA Unique business platform in Latin America capable of capturing market growth and minimising risk. Robust macroeconomic environment in the region. Strong outlook for our electricity markets. Significant opportunities ahead for profitable growth. 2009 targets clearly achievable. 2
Slide 4: Latin America accounts for a third of Endesa's business
ENDESA LATIN AMERICA TODAY LATIN AMERICA ACCOUNTS FOR A THIRD OF ENDESA'S BUSINESS 2006 SPAIN AND PORTUGAL REST OF EUROPE LATAM INSTALLED 23,021 9,775 14,317 CAPACITY (MW) CUSTOMERS 11,120 - 11,581 (THOUSANDS) 109,412 88,808 OUTPUT 62,028 52,606 58,281 AND SALES (GWH) 35,575 Output Sales Output Sale
Slide 5: Endesa is the largest private utility in Latin America
ENDESA LATIN AMERICA TODAY ENDESA IS THE LARGEST PRIVATE UTILITY IN LATIN AMERICA INSTALLED CAPACITY 2006 (MW) CUSTOMERS 2006 (MILLIONS) Endesa 14,327 Endesa 11.6 AES 13,797 AES 9.1 Suez 9,413Iberdrola 8.5 Iberdrola 4,418 CPFL 5.9 Duke 4,256 Union Fenosa 5.2 EdF 3,013 . Gas Natural 4.8 Union Fenosa
Slide 6: One of the most renewable generation mixes with lowest marginal costs
SOURCE: ANNUAL REPORTS ENDESA LATIN AMERICA TODAY ENDESA HAS ONE OF THE MOST RENEWABLE GENERATION MIX WITH LOWEST MARGINAL COSTS IN THE REGION 14,317 TOTAL INSTALLED CAPACITY (MW) IN LATAM 13,797 THERMAL 40% 9,413 63% 38% 4,418 4,256 HYDRO 60% 34% 3,013 2,773 62% 37% 93% 75% 68% 1,072 1,018 540 367
Slide 7: Leading position in four of five countries
SOURCE: ANNUAL REPORTS ENDESA LATIN AMERICA TODAY ENDESA HOLDS A LEADING POSITION IN FOUR OF THE FIVE COUNTRIES WHERE IT IS PRESENT COLOMBIA 2,779 MW #1 24% Gx Share 2.1 Mn customers BRAZIL: 24% Dx Share 979MW(1) ‹1% Gx Share 4.9 Mn customers PERU #1 1.3% Dx Share 1,574 MW 20% Gx Share 1.0 Mn custom
Slide 8: Strong operating and financial performance due to diversified portfolio
(1) EXCLUDES 2,100 MW OF CIEN TRANSMISSION CAPACITY ENDESA LATIN AMERICA TODAY ENDESA HAS ACHIEVED A STRONG OPERATING AND FINANCIAL PERFORMANCE DUE TO A DIVERSIFIED PORTFOLIO OUTPUT 2006 SALES 2006 62,028 GWH 58,281 GWH BRAZIL 7% PERU 12% BRAZIL 27% 21% 32% CHILE CHILE 20% COLOMBIA 8% PERU 26% 29% 1
Slide 9: Portfolio of unique assets in the region
1 -86 M(EURO) OF OTHERS NOT INCLUDED ENDESA LATIN AMERICA TODAY ENDESA HAS DEVELOPED A PORTFOLIO OF UNIQUE ASSETS IN THE REGION GENERATION DISTRIBUTION INSTALLED CAPACITY 2006 POPULATION 14,317 MW(millions of inhabitants) 8,537 18 ENDESA'S PRESENCE 13 11 8 3,136 7 5 2,107 2 1.5 1.5 537 Sao Buenos Ri
Slide 10: Chile
ENDESA LATIN AMERICA TODAY CHILE TARAPACA (EURO)M 182 MW CCGT 2006 Output: 20,000 GWh ALMAGRO - TALTAL Dx Sales: 12,400 GWh EBITDA 576 776 292 MW CCGT Customers: 1.4 million 200 HUASCO Capacity: 4,477 MW 80 MW COAL STEAM CAPACITY MIX Debt 1,767 SAN ISIDRO 379 MW CCGT 19% RAPEL - SAUZAL 5% Dividends
Slide 11: Brazil
ENDESA LATIN AMERICA TODAY BRAZIL 2006 (EURO)M FORTALEZA 321 MW CCGT Output: 4,500 GWh Dx Sales: 15,300 GWh EBITDA 422 159 581 FORTALEZA Customers: 4.9 million CACHOEIRA DOURADA 658 MW HYDRO Capacity: 979 MW CAPACITY MIX Debt 518 176 694 CIEN 2,100 MW INTERCONNECTION 33% Dividends 181 51 (130) + K (
Slide 12: Colombia
ENDESA LATIN AMERICA TODAY COLOMBIA 2006 (EURO)M CARTAGENA 142 MW GAS TURBINE Output: 12,500 GWh Dx Sales: 10,700 GWh EBITDA 277 227 504 EL GUAVIO Customers: 2.1 million 1,163 MW HYDRO Capacity: 2,779 MW CAPACITY MIX Debt 208 429 637 TERMOZIPA 236 MW COAL STEAM 8% 5% Dividends 192 BOGOTA RIVER 151 4
Slide 13: Peru
ENDESA LATIN AMERICA TODAY PERU 2006 (EURO)M MALACAS 146 MW OPEN CYCLE Output: 7,200 GWh Dx Sales: 4,800 GWh EBITDA 87 150 237 VENTANILLAS Customers: 1.0 million 457 MW CCGT Capacity: 1,574 MW CAPACITY MIX Debt 136 334 470 CHIMAY 151 MW HYDRO Dividends YANANGO 53% 47% + K 38 65 103 43 MW HYDRO (*) R
Slide 14: Argentina
ENDESA LATIN AMERICA TODAY ARGENTINA 2006 (EURO)M COSTANERA Output: 17,700 GWh 2,319 MW DUAL FUEL/GAS Dx Sales: 14,800 GWh EBITDA 49 149 198 Customers: 2.2 million Capacity: 4,509 MW CENTRAL DOCK SUD 870 MW DUAL FUEL/GAS CAPACITY MIX Debt 83 274 357 BUENOS AIRES EL CHOCON Dividends 45% + K 0 55% 1,3
Slide 15: Endesa International direct holdings in addition to Enersis stake
ENDESA LATIN AMERICA TODAY ENDESA INTERNATIONAL OWNS SIGNIFICANT DIRECT HOLDINGS IN ADDITION TO ITS STAKE IN ENERSIS TOTAL DEBT (EURO)M % DIRECT EBITDA 06 (*) 06 Codensa: 27% 277 208 60.6% Emgesa: 25% 198 187 DIRECT HOLDINGS EEB: 4.7% 157 n/a Endesa Brasil: 27.5% 568 681 Edesur: 6.2% 49 83 60% DockS
Slide 16: Strong growth in generation
ENDESA LATIN AMERICA TODAY ENDESA HAS ACHIEVED STRONG GROWTH IN GENERATION GENERATION OUTPUT (GWH) INSTALLED CAPACITY (MW) CAGR 9.8% 62,028 55,106 2006 14,317 42,697 + 1,052 MW 2002 13,265 2002 2004 2006 20,000 GWH IN GROWTH 2002-06 IS SIMILAR IN SIZE TO 25% OF ENDESA'S GENERATION IN SPAIN. 15
Slide 17: Strong growth in distribution
ENDESA LATIN AMERICA TODAY ENDESA HAS ACHIEVED STRONG GROWTH IN DISTRIBUTION DISTRIBUTION SALES (GWH) CUSTOMERS (MILLION) CAGR 5.2 % 58,281 2006 11.6 47,608 52,314 + 1.3 M 2002 10.3 2002 2004 2006 1.3 MILLION CUSTOMERS IN ORGANIC GROWTH 2002-06 IS SIMILAR IN SIZE87% TO A DISTRIBUTION COMPANY SUCH AS
Slide 18: Margins have increased significantly
ENDESA LATIN AMERICA TODAY MARGINS HAVE INCREASED SIGNIFICANTLY GENERATION MARGIN DISTRIBUTION MARGIN (US$/MWH)*: (US$/MWH)*: 30.0 26.2 40.0 34.6 35.0 25.0 19.5 19.3 30.0 25.9 20.0 23.3 25.0 15.0 20.0 15.0 10.0 10.0 5.05.0 2002 2004 2006 2002 2004 2006 GENERATION MARGIN 2006 DISTRIBUTION MARGIN 2006
Slide 19: Improvements in service quality and losses
ENDESA LATIN AMERICA TODAY WHILE ACHIEVING CONSIDERABLE IMPROVEMENTS IN SERVICE QUALITY AND LOSSES SERVICE QUALITY INTERRUPTION TIME LOSSES (%) (HOURS) -29% - -0.7 PP 13.9 11.1 11.9 11.9 9.9 11.2 2002 2004 2006 2002 2004 2006 INTERRUPTION TIME 2006 LOSSES 2006 (%) (HOURS) 21.9% 16.5 15.0 11.4 10.0 1
Slide 20: Substantial increase in results
ENDESA LATIN AMERICA TODAY THE STRONG OPERATING PERFORMANCE HAS SET THE STAGE FOR A SUBSTANTIAL INCREASE IN RESULTS EBITDA(1)((EURO)M) NET INCOME(1) ((EURO)M) 2,188 CAGR 20% 1,755 462(3) Generation 1,522(2) 1,238 and Transmission CAGR 69% 101 +16% 1,051 914 127 361 1,036 Distribution 738 +25% 2002 2
Slide 21: Substantial debt reduction
ENDESA LATIN AMERICA TODAY COUPLED WITH A SUBSTANTIAL DEBT REDUCTION CONSOLIDATED NET FINANCIAL DEBT LEVERAGE ((EURO)M) 9,599 -59% 2.4 -160 B.P. 5,618 0.8 2002 2006 2002 2006 (1) THE FINANCIAL STRENGTHENING PLAN BEGUN IN 2002 AND INCLUDED A US$2,1BN CAPITAL INCREASE FROM ENERSIS. 20 (2) LEVERAGE DEF
Slide 22: Balancing currencies and extending maturities
ENDESA LATIN AMERICA TODAY BALANCING CURRENCIES OF CASH FLOWS AND DEBT AS WELL AS EXTENDING MATURITIES DEBT DENOMINATION INTEREST RATE LOCAL 34% FIXED: VARIABLE 30% USD 56% 42% HEDGE 28% EURO USD 39% FIXED: 57% VARIABLE 39% 9% LOCAL 48% 2002 2002 EURO HEDGE 4% 13% 2006 2006 AVERAGE LIFE OF DEBT YEAR
Slide 23: Strengthening of debt ratios
ENDESA LATIN AMERICA TODAY DEBT AND CASH-FLOW MANAGEMENT HAS LED TO A SIGNIFICANT STRENGTHENING OF DEBT RATIOS EBITDA/FINANCIAL GROSS DEBT/EBITDA EXPENSES 6 6 5,7XENI 4,9X 4,7X 5 4,3X 5 EOC 3,5X 4 4 3,3X 5,0X 3,1X 4,1X 2,8X 4,2X 3 3,7X 2,4X 3 2,5X EOC 3,2X 3,0X 2,8X 2 2,4X 2 2,0X ENI 2,2X 1 1 0 0 20
Slide 24: Recovering investment grade rating
ENDESA LATIN AMERICA TODAY RECOVERING INVESTMENT GRADE RATING MOODY’S RATING 12 CURRENT ENI AND EOC RATINGS BAA311 10 INVESTMENT GRADE 9 BA1 8 MOODYS: BAA3/STABLE 7 6 S&P: BBB-/POSITIVE BA2 5 4 FITCH: BBB/STABLE 3 BA3 2 1 0 dic-02 dic-03 dic-04 dic-05 dic-06 ENERSIS ENDESA CHILE 23 SOURCE: BLOOMBERG
Slide 25: Creating value for shareholders
ENDESA LATIN AMERICA TODAY CREATING VALUE FOR SHAREHOLDERS STOCK MARKET PERFORMANCE STOCK MARKET MARKET CAP INCREASE (US$M) LAST 5 YEARS ENDESA Record CHILE +520% 13.566 high (ADR) ENERSIS +223% 12.943 6 year (ADR) high JUN-02 JUN-03 JUN-04 JUN-05 JUN-06 JUN-07 STOCK MARKET PERFORMANCE SHOWS FAVOURA
Slide 26: Analysts use different valuation methods for Latin American holdings
ENDESA LATIN AMERICA TODAY ANALYSTS USE DIFFERENT VALUATION METHODS FOR ENDESA'S LATIN AMERICAN HOLDINGS CONTRIBUTION TO ENDESA'S MARKET CAP 7,800 (euro)M 5,900 1,550 DIRECT HOLDINGS 1,050 DIRECT HOLDINGS ACCOUNT FOR 6,250 20% OF ENDESA ENERSIS 4,850 LATAMS VALUE ENDESA ANALYSTS ENERSIS ANALYSTS MAR
Slide 27: Latam provides significant cash returns to Spain
ENDESA LATIN AMERICA TODAY LATAM PROVIDES SIGNIFICANT CASH RETURNS TO SPAIN CASH RETURNS (US$M) 308 266 253 Capital reductions and others Dividends and interest 222 132 221 118 88 7 49 41 121 111 6 86 39 35 45 2002 2003 2004 2005 2006 1Q07 10,1 (87%) 26
Slide 28: Dividends and capital reductions by country
ENDESA LATIN AMERICA TODAY BASED ON CASH RETURNS FROM DIFFERENT COUNTRIES DIVIDENDS AND CAPITAL REDUCTIONS1 (US$M) COLOMBIA CHILE 529 246 241 181 184 118 109 88 70 0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 BRAZIL PERU 228 166 149 119 130 86 92 49 42 61 2002 2003 2004 2005 2006 2002 2003
Slide 29: Agenda
AGENDA Unique business platform in Latin America capable of capturing market growth and minimising risk. Robust macroeconomic environment in the region. Strong outlook for our electricity markets. Significant opportunities ahead for profitable growth. 2009 targets clearly achievable. 28
Slide 30: Most orthodox economic policies
MACROECONOMIC ENVIRONMENT ENDESA IS PRESENT IN THOSE COUNTRIES WITH THE MOST ORTHODOX ECONOMIC POLICIES AFI RISK INDEX 2002 2007 COLOMBIA ARGENTINA 6.8 4.4 STABILITY BRAZIL 5.8 2.5 PERU CHILE 3.6 2.9 COLOMBIA 4.8 3.2 RISK ALERT PERU 4.2 2.5 BRAZIL CHILE 5 ENDESA 5.8 3.0 COUNTRIES(*) "Orthodox" Count
Slide 31: GDP growing at a 5% rate
MACROECONOMIC ENVIRONMENT THE GDP OF ENDESAS COUNTRIES IS GROWING AT A 5% RATE GDP GROWTH (%) ARGENTINA 10 8 PERU Latin America's GDP has been COLOMBIA growing ahead of the world 6 A. LATINA average although behind Asia's. 4 CHILE Growth rates in the countries 2 BRAZIL where ENDESA is present exceed
Slide 32: Major fiscal adjustment of public accounts
MACROECONOMIC ENVIRONMENT PUBLIC ACCOUNTS UNDERWENT A MAJOR FISCAL ADJUSTMENT AIMED AT ACHIEVING A FISCAL SURPLUS LATAM PUBLIC DEFICIT (IN % OF GDP) PUBLIC DEFICIT 2005 (IN % OF GDP) 0.5% +0.3% 0.0% Chile* -0.5% -1.0% Argentina* -1.5% Peru* -2.0% Colombia -2.5% Brazil -3.0% -3.0*% -4% -2% 0% 2% 4% 6
Slide 33: Current account balances have improved
MACROECONOMIC ENVIRONMENT CURRENT ACCOUNT BALANCES HAVE IMPROVED LATAM CURRENT ACCOUNT BALANCE CURRENT ACCOUNT BALANCE (IN % OF GDP) (IN % OF GDP) 3 2 Chile 1 Argentina 0 -1 Peru -2 -3 Colombia -4 Brasil -5 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 -6.0 -1.8 2.5 6.7 32 SOURCE: INTERNATIONAL
Slide 34: External debt declined, reserves increased
MACROECONOMIC ENVIRONMENT EXTERNAL DEBT HAS DECLINED WHILE FOREX RESERVES HAVE INCREASED LATAM EXTERNAL DEBT (US$M) LATAM RESERVES (US$M) 800.000 300.000 750.000 250.000 700.000 200.000 650.000 150.000 600.000 100.000 550.000 50.000 500.000 0 2000 2001 2002 2003 2004 2005 2000 2001 2002 2003 2004 20
Slide 35: Inflation below 5% except Argentina
MACROECONOMIC ENVIRONMENT INFLATION IS BELOW 5% EXCEPT FOR ARGENTINA INFLATION (%) 30 25 20 15 10 5 0 8 0 2 4 6 8 (9) (0) (0) (0) (0) 0 -5 (9) (0) (0) (0) (0) (0) (1) (2) (2) (2) (2) (2) ARGENTINA BRAZIL COLOMBIA CHILE PERU 34
Slide 36: Country risks declined, exchange rates stabilising
MACROECONOMIC ENVIRONMENT COUNTRY RISKS HAVE DECLINED AND EXCHANGE RATES ARE STABILISING LATAM DEBT SPREADS EXCHANGE RATE PERFORMANCE 8000 Argentina 2500 7000 2,2 Argentina 6000 4,3 5000 3,8 4000 3,3 2,8 3000 2,0 Brazil 2,3 2000 2000 1,8 1000 1,3 Brazil 0 0,8 dic - dic- dic - dic- dic- dic - dic- di
Slide 37: Macroeconomic environment strengthened in recent years
MACROECONOMIC ENVIRONMENT THE REGION'S MACROECONOMIC ENVIRONMENT HAS STRENGTHENED IN RECENT YEARS GDP growth recovery. Public accounts placed on sound footing. THE ECONOMIES Improved current account WHERE ENDESA IS balance. PRESENT ARE BETTER Reduced external debt and PREPARED TO HANDLE increased re
Slide 38: Agenda
AGENDA Unique business platform in Latin America capable of capturing market growth and minimising risk. Robust macroeconomic environment in the region. Strong outlook for our electricity markets. Significant opportunities ahead for profitable growth. 2009 targets clearly achievable. 37
Slide 39: Very different electricity sectors
LATIN AMERICAN ELECTRICITY SECTOR ENDESA IS PRESENT IN COUNTRIES WITH VERY DIFFERENT ELECTRICITY SECTORS CHILE BRAZIL ARGENTINA COLOMBIA PERU SPAIN 268 118 DEMAND 74 45 28 (TWH) 14 96 82 CAPACITY 24 12 13 4.8 (GW) 33% GX MIX 43% 33% 38% 57% 53% 47% 77% 59% 41% 67% 62% Hydro + RE Thermal + nuclear 38
Slide 40: Excellent growth potential
LATIN AMERICAN ELECTRICITY SECTOR WITH EXCELLENT GROWTH POTENTIAL CONSUMPTION PER CAPITA (KWH/YEAR) 2005 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 PERU A E USA COLOMBIAMEXICO BRAZIL ARGENTIN CHILSPAIN GERMANY BELGIUM 39 SOURCE: WORLD BANK
Slide 41: Electricity demand is growing fast
LATIN AMERICAN ELECTRICITY SECTOR ELECTRICITY DEMAND IS GROWING FAST 5 LATAM ELECTRICITY MARKET GROWTH (*) 1Q07 GROWTH (%) (%) 5.8% Peru 9.7 5.7% 5.6% 5% Chile 7.3 Colombia 5.2 Argentina 4.5 0.5% Brazil 3.7 1980-1998 1999-2002 2004 2006 1T07 GROWTH IN ELECTRICITY DEMAND 2006-2009 IS EXPECTED TO BE O
Slide 42: Reserve margins are narrowing
LATIN AMERICAN ELECTRICITY SECTOR RESERVE MARGINS ARE NARROWING DRY YEAR RESERVE MARGIN (%) AND INSTALLED CAPACITY (GW) 52,3% 49,3% 25,3% 24,4% 22,9% RESERVE 91,5 MARGIN 17,8% 82,1 17,0% 13,9% 12,8% 23,8 23,8 INSTALLED CAPACITY (GW) THERMAL 13,3 13,4 9,2% 7,9 8,3 4,3 4,8 HYDRO 2004 2006 2004 2006 20
Slide 43: Investment requirements in Latam will be significant
LATIN AMERICAN ELECTRICITY SECTOR INVESTMENT REQUIREMENTS IN LATAM WILL BE SIGNIFICANT INVESTMENT REQUIRED IN THE LATIN EVOLUTION OF CAPACITY 2005-2030 AMERICAN ELECTRICITY SECTOR 2005-2030 BY TECHNOLOGY (GW) (US$ BN) 504 20 CAGR: 274 3.5% 236 126 206 720 4 128 212 320 38 28 5 19 13 GX TX DX TOTAL 2
Slide 44: Lack of gas transforming capacity plans
LATIN AMERICAN ELECTRICITY SECTOR THE LACK OF GAS IS TRANSFORMING THE REGION'S CAPACITY PLANS EVOLUTION OF GAS RESTRICTIONS EVOLUTION OF THE CHILEAN ARGENTINA/CHILE CAPACITY PLAN USED IN THE NODE (% VS STANDARD REQUIREMENTS) PRICE FIXING (MW) 100% 5,240 80% 1,900 3,391 LNG 60% GAS 250 342 DIESEL 2,2
Slide 45: Regulators' agenda focuses on security of supply
LATIN AMERICAN ELECTRICITY SECTOR REGULATORS' AGENDA FOCUSES ON SECURITY OF SUPPLY Assess effective security of supply of different power plants and IMPROVE GX MIX remunerate it accordingly. Remove uncertainty related to fuel supplies: LNG, investment in own ASSURE FUEL resources, gas interconnectio
Slide 46: Creating credible signs of expansion
LATIN AMERICAN ELECTRICITY SECTOR CREATING CREDIBLE SIGNS OF EXPANSION COLOMBIA +370 MW/YEAR GROWTH TODAY: PERU oCHARGE FOR DEPENDABILITY +250 MW/YEAR oTENDER PROCESSES oTRANSMISSION INCOME BRAZIL +4,000 MW/YEAR oTENDER PROCESSES CHILE +500 MW/YEAR oCAPACITY AUCTIONS 2009 o"LEY CORTA" I AND II oTEND
Slide 47: Energy prices reflect new capacity requirements
LATIN AMERICAN ELECTRICITY SECTOR ENERGY PRICES REFLECT NEW CAPACITY REQUIREMENTS RESERVE MARGIN (95%) AT SIC AND REGULATED PRICE REGULATED PRICE (US$/MWH) 62,0 Chile - SIC 41,6 REGULATED PRICE (US$/MWH) 33,1 20 75 69 32,0 19,5 19,5 70 Brasil 20,0 19 62 65 35,6 2006 18,5 60 2004 18 52 17,0 32,9 2002
Slide 48: Tender processes guarantee long-term price stability
LATIN AMERICAN ELECTRICITY SECTOR TENDER PROCESSES TO SUPPLY ENERGY TO DISTRIBUTION COMPANIES GUARANTEE LONG-TERM PRICE STABILITY TENDER PROCESSES IN CHILE ENERGY AWARDED TO ENDESA (GWH) In Chile, Endesa placed 22,500 28% of its long-term output at a price of Average US$65/MWh. price: US$65/MWh A si
Slide 49: Distribution margins have widened
LATIN AMERICAN ELECTRICITY SECTOR DISTRIBUTION MARGINS HAVE ALSO WIDENED CONSIDERABLY DISTRIBUTION MARGIN (US$/MWH) 2002 2004 2006 53.7 41.7 35.4 32.2 31.7 28.7 29.4 28.5 27.3 28.2 25.2 23.8 12.3 13.3 12.4 ARGENTINA BRAZIL CHILE COLOMBIA PERU 48
Slide 50: Regulation has reached a high level of stability
LATIN AMERICAN ELECTRICITY SECTOR REGULATION IN THE REGION HAS REACHED A HIGH LEVEL OF STABILITY CHILE BRAZIL COLOMBIA ARGENTINA PERU Price matching Audited cost Audited cost Price bid Audited cost Audited cost Capacity payment Max. demand Max. demand Fixed energy Max. demand Max. demand Gx contribu
Slide 51: Agenda
AGENDA Unique business platform in Latin America capable of capturing market growth and minimising risk. Robust macroeconomic environment in the region. Strong outlook for our electricity markets. Significant opportunities ahead for profitable growth. 2009 targets clearly achievable. 50
Slide 52: Growth opportunities: key initiatives
GROWTH OPPORTUNITIES KEY INITIATIVES Participate in solutions for security of supply in Chile. Anticipate future needs in Colombia and Peru in the light of CHILE, major growth in both markets. COLOMBIA Build the new generation capacity planned. AND PERU Launch the Aysen project. Pursue unique growth
Slide 53: Capacity plan projects
GROWTH OPPORTUNITIES CAPACITY PLAN PROJECTS DUE TO START UP NEW CAPACITY 2007-09 AFTER 2009 MW CCGTs +515 MW Coal +220 MW Hydro +40 MW Aysen*: 57% of 2,400 MW Other hydro in Chile: 640 MW Renewables +50 MW Thermal: 345 MW TOTAL NEW CAPACITY +825 MW NEW CAPACITY BY COUNTRY Chile +574MW Rest +251 MW 5
Slide 54: San Isidro II CCGT (Chile)
GROWTH OPPORTUNITIES SAN ISIDRO II CCGT (CHILE) CONSTRUCTION OF THIS CCGT PLANT, LOCATED IN THE V REGION, STARTED IN 2005. IT IS EXPECTED TO BEGIN. COMMERCIAL OPERATIONS IN THREE DIFFERENT STEPS: i. i. April 07: Open-cycle gas turbine - using fuel-oil and reaching a - a maximum output of 248MW ii. i
Slide 55: Aysen project (Chile)
GROWTH OPPORTUNITIES AYSEN PROJECT (CHILE) Four hydro plants with a total capacity of a approximately 2,400 MW on the Baker and Pascua rivers, scheduled to come on stream between 2013 and 2018. . Project to be developed by Centrales Hidroelectricas de Aysen set up in September SANTIAGO 2006, with ho
Slide 56: Quintero regasification terminal (Chile)
GROWTH OPPORTUNITIES QUINTERO REGASIFICATION TERMINAL (CHILE) REGASIFICATION TERMINAL IN QUINTERO BAY (REGION V) TO SUPPLY GAS TO CUSTOMERS INCLUDING THE SAN ISIDRO I AND II POWER I PLANTS The project is being developed by the company GNL Quintero S.A., which is 40% owned by Inv. . ., . British Gas
Slide 57: Bocamina II (Chile)
GROWTH OPPORTUNITIES BOCAMINA II (CHILE) COAL-FIRED POWER STATION, APPROX. 345- .. MW, TO BE LOCATED NEXT TO THE BOCAMINA II PLANT (VII REGION): Making use of existing land and infrastructures (unloading quays, coal stockpiling yards, connection to the grid...) ) Operational synergies with Bocamina
Slide 58: Hydro projects in Chile
GROWTH OPPORTUNITIES HYDRO PROJECTS IN CHILE PALMUCHO PROJECT NELTUME PROJECT Run-of-river plant located at the foot of the Ralco power station (VII Region) Hydroelectric plant in Region X in the upper reaches of the River Valdivia Capacity 32 MW. Run-of-river plant with 400 MW of Average annual gen
Slide 59: Renewables: taking the first steps
GROWTH OPPORTUNITIES RENEWABLES: TAKING THE FIRST STEPS BEFORE THE REGULATION COMPLETES ITS MATURING PROCESS CURRENT SITUATION The development of renewable energies in the region is still at an early Develop projects stage and little diversified. according to the regulations' degree of Legislation a
Slide 60: Endesa Eco (Chile) project portfolio
GROWTH OPPORTUNITIES ENDESA ECO (CHILE) PROJECT PORTFOLIO OJOS DE AGUA: 9 MW mini-hydro that makes use of natural leaching from La Invernada 9 - (Region VII) Investment: US$17 M Commissioning: 2008 CANELA: 18 MW wind farm in Region IV (11 1.65-MW wind turbines) 1. - Investment: US$30 M First wind fa
Slide 61: Capacity auctions in Brazil behind schedule
GROWTH OPPORTUNITIES CAPACITY AUCTIONS IN BRAZIL ARE BEHIND SCHEDULE AND PRICE CAP DISCOURAGES FOREIGN INVESTMENTS NEW CAPACITY AUCTIONED 2006-2015 PLAN 19,000 MW The auction system for new generation projects ("leilaos") introduced price caps for "new" energy. 13,000 Tendering conditions compromise
Slide 62: Endesa Brazil enables pursuing opportunities
GROWTH OPPORTUNITIES ENDESA BRAZIL ENABLES THE GROUP PURSUING OPPORTUNITIES THAT MAY ARISE 39.4% 27.7% 20.0% 10.2% Simplifies organisational ENDESA ENDESA CHILE ENERSIS CHILECTRA structure INTERNACIONAL Improves stability of cash-flows Improves access to third- ENDESA BRASIL IFC (2.7%) party financi
Slide 63: Specific challenges: Edesur tariff review
(1) THE CONTRIBUTION TO ENDESA BRAZIL OF 45% OF AMPLA IN 2008 FROM CHILECTRA AND ENERSIS REMAINS PENDING. SPECIFIC CHALLENGES THE TARIFF REVIEW PROCESS AT EDESUR IS ALREADY TAKING PLACE 38% increase in tariffs 2007 (industrial + commercial) Tariff increase in Six-monthly adjustment for inflation wit
Slide 64: Edenor IPO valuation
SPECIFIC CHALLENGES EDENOR, A COMPARABLE COMPANY TO EDESUR, HAS COMPLETED A SUCCESSFUL IPO VALUATION OF EDENOR IPO NEW FLOATATIONS IN ARGENTINA (2006-2007) (US$M) SIZE (US$ COMPANY DATE SECTOR MARKET TYPE `000M) 61 1.082 Banco 23/03/06 Banking Local/ ADR-III FO 210 373 Macro 770 Socotherm 11/09/06 O
Slide 65: Foninvemem and Argentine generation regulation
SPECIFIC CHALLENGES THE DEVELOPMENT OF FONINVEMEN DETERMINES THE REGULATORY ENVIRONMENT FOR ARGENTINE GENERATION GOVERNMENT INTERVENTION IN THE GENERATION MARKET ELECTRICITY IMPORTS, EXPORTS AND RATIONING (GWH/MONTH) A price cap was introduced limiting the price fixing system based on marginalism. 6
Slide 66: Redefining CIEN's business model
SPECIFIC CHALLENGES MAJOR PROGRESS ACHIEVED IN REDEFINING CIEN'S BUSINESS MODEL CIEN: 2,100 MW interconnection (two lines of equal capacity) between Argentina and Brazil, built in 1999 for trading/backup from Argentina to Brazil. Line 1 contracted with Brazilian generation firms. Line 2 contracted w
Slide 67: Agenda
AGENDA Unique business platform in Latin America capable of capturing market growth and minimising risk. Robust macroeconomic environment in the region. Strong outlook for our electricity markets. Significant opportunities ahead for profitable growth. 2009 targets clearly achievable. 66
Slide 68: Meeting 2009 targets
2009 TARGETS MEETING TARGETS 2009 LAST 12 COMMITMENT MONTHS EBITDA ((EURO)M) 2,470 2,263 CASH 05-09 (US$M) 1,600 679(1) SALES (TWH) 69 63.1 2009 TARGETS ARE CLEARLY ACHIEVABLE OUTPUT (TWH) 70 59.1 GX MARGIN (US$/MWH) 23,8 26,6 DX MARGIN (US$/MWH) 29,5 35,9 (1) AS OF MARCH 2007 67
Slide 69: Growth and operating improvement in Latin America
2009 TARGETS GROWTH AND OPERATING IMPROVEMENT IN LATIN AMERICA PRODUCTION (TWH) SALES (TWH) CAGR +4.1% 69.7CAGR 5.8% 68.6 62.058.3 Argentina Argentina Brazil Brazil Chile Chile Colombia Colombia Peru Peru 2006 2009 2006 2009 TOTAL NEW CAPACITY 2007-09: 825 MW INCREASE IN DISTRIBUTION CUSTOMERS 06-09
Slide 70: Latin America will increasingly contribute cash to Spain
2009 TARGETS LATIN AMERICA WILL INCREASINGLY CONTRIBUTE CASH TO SPAIN CASH FROM LATAM TO SPAIN US$M 1,000 1,600 921 679 2005- TARGET TOTAL ADDITIONAL MARCH 07 MARCH 07-09 2005-09 POTENTIAL 42% of the 2009 target accomplished by March 2007 69
Slide 71: Alternatives for additional US$1,000M cash contribution
2009 TARGETS ALTERNATIVES FOR AN ADDITIONAL US$1,000M CASH CONTRIBUTION FROM LATAM TO SPAIN GOALS Local partners to add value to the IPO EDESUR project. Crystallise value and make it transparent. Finance any investment opportunities that may arise. IPO ENDESA BRASIL Roll-up of minority shareholders
Slide 72: Conclusions
CONCLUSIONS UNIQUE BUSINESS PLATFORM IN LATIN AMERICA CAPABLE OF CAPTURING MARKET GROWTH AND MINIMISING RISK. Our assets are essential to guarantee supply. They are also unique and non-replicable assets: Mainly hydro generation Distribution in major cities. Our companies have been streamlined and pa
Slide 73: Conclusions
CONCLUSIONS STRONG OUTLOOK FOR OUR ELECTRICITY MARKETS. Electricity markets are growing rapidly. Regulation is sending out the right price signals to attract investment. Regulatory frameworks are stable and provide legal certainty. SIGNIFICANT OPPORTUNITIES AHEAD FOR PROFITABLE GROWTH. We have ident
Slide 74: Appendix
endesa APPENDIX 73
Slide 75: Main companies included in the consolidation perimeter
MAIN COMPANIES INCLUDED IN THE CONSOLIDATION PERIMETER MAIN CONSOLIDATED COMPANIES (% STAKE IN DECEMBER 2006) CHILE ARGENTINA o ENDESA CHILE: 36.4% o COSTANERA: 23.4% o ENERSIS: 60.6% o El Chocon: 17.3% o PEHUENCHE: 33.7% o Dock Sud: 40.0% o San Isidro: 36.4% o Edesur: 45.9% o Celta: 36.4% o CHILECT
Slide 76: Listed companies highlighted organisational structure
LISTED COMPANIES HIGHLIGHTED ORGANISATIONAL STRUCTURE SPAIN ENDESA INTERNACIONAL 5 PANGUE 95 61 PEHUENCHE 93 60 100 ENERSIS CAM CHILE CELTA 100 99 100 E.CHILE SYNAPSIS S. ISIDRO 100 CHILECTRA INGENDESA 100 47 CHOCON 34 6 EDESUR ARGENTINA 64 COSTANERA 40 32 DOCK SUD 25 9 27 23 EMGESA CODENSA COLOMBIA
Slide 77: 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 78: Endesa Latin America, Valencia, 25th June 2007
ENDESA LATIN AMERICA VALENCIA, 25TH 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 By: /s/ Álvaro Pérez d