Capital Markets Day. Strategic Plan Francesco Starace CEO & General Manager

Transcription

1 Capital Markets Day Strategic Plan Francesco Starace CEO & General Manager

2 Agenda Francesco Starace (CEO & General Manager) Enel Today Our Delivery Our Vision & Positioning Our Pillars Closing Remarks

3 Enel Today

4 Enel today We are a leader in the new energy world 1st network operator 1 73 mn end users 43 GW capacity 2 World s largest private player 2 in renewables 46.5 GW capacity GW demand response Largest retail customer base worldwide 1 64 mn customers 4 1. By number of customers. Publicly owned operators not included 2. By installed capacity. Includes managed capacity for 4.2 GW 3. It includes nuclear 4. Includes customers of free and regulated power and gas markets 3

5 Enel today Our business model is well diversified and provides long term visibility North & Central America Italy Iberia Europe & North Africa 0.6 bn 2% 51% 7.0 bn 31% 5% 56% 15% 3.4 bn 28% 22% 0.5 bn 100% 16% 13% 11% 6% 44% South America 3% 44% 11% 4.7 bn 42% 1. As of 2018E. Breakdown excludes -0.1 bn from holding and services Presence with operating assets or through Enel X 2018E Group EBITDA 1 1% 47% 18% 16.2 bn 7% 27% Africa, Asia & Oceania 0.1 bn 100% Networks Thermal generation Renewables Retail Other 4

6 Our Delivery

7 Our delivery Sustainable, profitable, digitalized and customer centric E Renewables focus Owned RES capacity/total capacity % 41% 45% CO2 Footprint Specific Co2 emissions kg/kwh eq Decarbonization End Users mn Retail customers Mn customers in the free market New businesses Gross margin Enel X bn n.a. 0.5 Customer centricity Digital impact % of digital investments on total n.a. 19% Group simplification Group net income/total net income 64% 70% Cash flow generation FFO gross capex bn Value creation Shareholder return DPS /sh

8 Our delivery Our strategy delivered growth while improving our financial strength Average capex ( bn) FFO/Net Debt +19% +150bps Net Debt 25.0% 26.5% ( bn) 37.5 ~ E Rating 1 BBB BBB+ EBITDA ( bn) Net income ( bn) +8% +41% Standard & Poor s E E 7

9 Our delivery Active Portfolio Management was balanced and accretive Transactions completed ( bn) Operating benefits from APM 2018E 2021 End users +10 mn +11 mn Demand response 5.7 GW 9.9 GW Charging points 1 37k 348k 5.3 Acquisitions Households passed 4.2 mn 8.5 mn Financial impacts Minority buy-out Impact on Group Net Income +100 mn +300 mn Source of funds Use of funds EPS accretion 2% 5% 1. emotorwerks worldwide private charging points 2. Net Impact from both source of funds and use of funds 8

10 Our delivery Strong commitment to our SDGs targets Engaging local communities (mn beneficiaries) 2018E High-quality, inclusive and fair education Access to affordable and clean energy mainly in Africa, Asia and Latin America Employment and sustainable and inclusive economic growth Climate change Reduction of CO 2 specific emissions (kg/kwh eq ) 2018E < Cumulated figures since In the whole Group perimeter, 4.9 mn beneficiaries were reached 9

11 Our delivery Management actions have driven higher returns and shareholder remuneration Value creation spread Shareholder return DPS ( /sh) 8.8% +75% 120 bps 8.2% 7% 6.3% Value creation 250 bps MIN DPS E E ROIC 1 WACC EPS Adjusted for IFRS15 and WIP 10

12 Our Vision & Positioning

13 ENERGY TRANSITION Our vision and positioning Integrated model captures opportunities from energy transition Growth in renewable capacity Grid development & automation Full speed renewables towards a full decarbonized profitable mix Foster digital networks as key infrastructure in the energy transition Urban infrastructure e-mobility Lead cities transformation through infrastructures and platforms Push mobility electrification to capture future value 12

14 Our vision and positioning Decarbonization shapes our capacity and improves margins Total installed capacity (GW) Renewables extra margin Production Twh (0.6) Production Twh ~20% extra margin Capacity 2018E Thermal capacity reduction Renewables additions2 Capacity % Emission free production 3 62% Renewables Thermal Generation Nuclear Thermal cost Solar LCOE CO 2 specific emissions <0.35 kg/kwh eq in CO 2 specific emissions 0.23 kg/kwh eq in 2030 Decarbonization in Includes managed capacity GW additional capacity subject to portfolio rotation 3. Emission free production includes nuclear generation 4. Target certified as «Science based». CO2 specific emissions will be <0.345 kg/kwheq in

15 Our vision and positioning Electrification and urbanization drive infrastructure investments and new services to clients Infrastructure investments Network automation efficiency Customer/RC node -8% Customer needs and services Electricity distributed (TWh) End users (mn) +10% +3% Free market customers 3 (mn) +64% E E E E 2021 Public lighting (mn points) Charging points 1 (k) Fiber deployment (Households passed mn) E Demand response (GW) Storage (MW/yr) Maintenance and repair (mn clients) Credit cards (mn) 2018E Public & private charging points installed (public 5.5k in 2018E and 24.1k in 2021) 2. Includes Italy for clusteres A&B 3. Power and gas customers 14

16 Our vision and positioning Digitalization fuels economic benefits and satisfies customers needs Digitalization Capex Cumulated economic benefits ( bn) Key highlights 11% 2.5 ~4 bn for networks digitalization 5.4 bn 5% Advanced automation of construction and O&M of renewable assets 84% Increased flexibility and automation for thermal generation plants Asset Asset Customer Customers People People EBITDA Process automation and increased offering to customers 15

17 Our Pillars

18 Our pillars Sustainable value creation over the long term Industrial Growth Operational Efficiency Simplification Human Capital Asset development Customers Asset Management 27.5 bn capex 3.2 bn incremental EBITDA Asset management Customers 1.2 bn opex savings Corporate Streamlining Communities & People 17

19 Our pillars Asset development supports our growth ambitions Industrial Growth Total gross capex by business and by nature Asset development by business % 5% 9% 27.5 bn 40% bn % 16.5 bn 64% 42% 4.8 4% 4% Networks Renewables Thermal Generation Enel X Retail Asset development Customers Asset management Networks Thermal generation Renewables Enel X 1. Includes 1.6 bn BSO capex 18

20 Our pillars Renewables are the driving force of growth Industrial Growth Higher investments to build 11.6 GW additional capacity Focus on markets with integrated presence & on developed countries Value creation through decarbonization & integration with retail portfolio Asset development capex % 9% 6% 14% 10.6 bn 37% 30% Additional capacity by geography 33% 15% 4% 3% ~11.6 GW 2 By technology 16% 29% Maximization of portfolio returns Italy Iberia South America Europe & NA North & C. America Africa, Asia & Oceania 70% 28% 1. Includes 1.6 bn BSO capex 2. Of which 1.8 GW related to BSO and 0.8GW related to JVs. 19

21 Our pillars Networks investments tailored to maximize asset base value Industrial Growth Gross capex by nature & by geography Restructuring of Eletropaulo Completion of Goias turnaround Resiliency and flexibility in Italy and Spain 29% 11.1 bn 29% 36% 3% 11.1 bn 44% Digitalization to promote efficiencies and improve service quality 42% 17% 2021 RAB ~45 bn: ~30% South America, ~70% Europe Asset development Customers Asset Management Italy South America Iberia Europe & NA 20

22 Our pillars Enel X capital allocation addresses customers needs Industrial Growth Gross capex by nature & by geography Smart lighting and fiber optics for cities 41% 13% Electric mobility in Italy, Spain, US and Romania 1.1 bn 27% 1.1 bn 39% Demand response and storage solutions for C&I customers 59% 21% Energy efficiency solutions Asset development Customers Italy Iberia South America North & C. America 21

23 Our pillars Driving efficiencies across all businesses Operational Efficiency Opex evolution ( bn) 1 Efficiency by business -8% 23% (1.2) % 1.2 bn 8% 36% 2018E CPI & Forex 2 Growth Efficiency 2021 Networks Thermal generation Retail Other 1. Total fixed costs in nominal terms (net of capitalization) 2. Of which CPI +0.9 bn and forex -0.3 bn 22

24 Our pillars Our commitment to SDGs and Human Capital Human Capital Engaging local communities (mn beneficiaries) Our people Climate change High-quality, inclusive and fair education 2.5 Access to affordable and clean energy 10.0 Employment and sustainable and inclusive economic growth Reduction of CO 2 specific emissions (kg/kwh eq ) 0.23 Talent attraction and retention Appraise performance of people we work with 3 Climate corporate survey 3 Diversity Global implementation of the diversity and inclusion policy 100% of people involved 99% of people appraised 100% of people involved 86% of people participating 2021 Recruiting should ensure equal gender splitting of the candidates (c. 50%) Innovation and infrastructure/sustainable cities 2021 Smart meters (mn) 46.9 Digitalization capex ( bn) 5.4 Charging points 2 (th) 455 Training Enable digital skills diffusion among people we work with 100% of people involved in digital skills training 1. Cumulated figures since Public & private charging points installed (public 5.5k in 2018E and 24.1k in 2021) 3. Eligible and reachable people having worked in the Group for at least 3 months 23

25 Our pillars Sustainable, profitable, digitalized and customer centric E Renewables focus Owned RES capacity/total capacity % 41% 45% CO2 Footprint Specific Co2 emissions kg/kwh End Users mn Retail customers Mn customers in the free market New businesses Gross margin Enel X bn n.a. 0.5 Digital impact Cumulated EBITDA ( bn) n.a. Group simplification Group net income/total net income 64% 70% Cash flow generation FFO gross capex bn % % 4.4 ~1.8x 24

26 Our pillars Improved return on invested capital supporting dividend growth Value creation spread Implicit DPS at 70% pay-out ( /sh) 10.2% +39% CAGR Value creation 250 bps 8.8% 6.3% 6.2% Value creation 400 bps Min DPS + 12% +9% E ROIC 1 WACC EPS Adjusted for IFRS15 25

27 Closing remarks

28 Closing remarks Delivering on all targets Integrated model driving synergies and reducing risk profile Acceleration of renewables capacity development Significant value creation for all stakeholders Three years dividend certainty, with upside potential 27