Endesa 2020-22 Strategic Plan Update - November 27, 2019
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Endesa 2020-22 Strategic Plan Update November 27, 2019
Agenda
Our Positioning
José Bogas
CEO
Our vision
Strategic plan
Luca Passa Strategic Plan
CFO Update: 2020-22
Key Financial Indicators
José Bogas Closing Remarks
2
Endesa 2020-22 Strategic Plan Update Our positioning
A portfolio of strategic assets(1)
Our positioning
1st network Infrastructures & Networks
operator(2)
117 TWh distributed (3)
~12 mn Smart meters(4)
Generation
1st player in
generation 61.4 TWh output
~58% CO2 free
Customers
Largest retail
customer base ~99 TWh power sales
12.3 mn Customers
First integrated player leading energy transition in Iberia
(1) 2019E (3) Net distributed energy
(2) By distributed energy (4) Includes LV and HV full deployment 4
Our positioning
Delivery on 2019-21 Strategic Plan: operating
targets Target
2019-21
2018 2019E Old plan
Renewables focus (% of total capacity) 29% 31% 38%
Decarbonisation
✔
CO2 Footprint (% CO2 emission free generation) ~50% 58% ~56%
Power Integrated Margin (€/MWh) 25.7 26 ~27
Sales (TWh liberalized(1)) ~82 83 90 Customer value
Endesa X (mn e-home clients) 2.1 2.2 2.5
Digitalisation (€mn Digital Capex) 0.3 0.7(2) 1.3(3) Digitalisation
✔ Ahead of target
Sound progress on all strategic pillars
(1) Excluding international sales and Small Consumer Voluntary Price (SCVP)
(2) Cumulated figure 2018-2019E 5
(3) Cumulated figure 2018-2021
Our positioning
Delivery on 2019-21 Strategic Plan: financial
targets
✔ CAGR
2014 2019E 2014-19E TSR, %
Above target
2019: €1.8 bn
CAPEX (€bn) 0.8 1.9 +19%
(2)
148
140
(2)
120
EBITDA (€bn) 3.1 3.7 +4% 100
80
Net ordinary income (€bn) 0.9 1.5 +11% 60
40
Gross DPS (€/sh) 0.76 ~1.4 +13% 13.5€(1)
20
57
-
11
ENDESA EuroStoxx
EUROSTOXX IBEX
Ibex 35
Net ordinary income / EBITDA 29% 41% UTIL.
Util.
11.2% SRI Investors(3)
✔ In line with targets
Improved economic results driven by repositioning through a sustainable strategy
(1) Preferential subscription share price on November 20th, 2014 (latest IPO) (3) Socially Responsible Investors over total Capital as of December 2018
(2) Includes dividends assumed to be re-invested (2019 share price as of Nov 25th: 24.62 €/sh). Calculated with Bloomberg data 6
Our positioning
Repositioning capital allocation on renewables
Generation capex: 2014 vs 2019E Mainland installed capacity, GW
13%
19.0
17.1
33%
4.7 7.4
2014
2019E
0.3 €bn
1.2 €bn
67% 12.4 11.6
87%
2014 2019E
20x capex increase in decarbonizing our generation mix RES on mainland
28% ~40%
capacity
Renewables Conventional Generation
Reshape of our business model focusing on decarbonisation
7
Our positioning
Enabling platforms for the Energy Transition
Infrastructure & Networks Retail (Power)
2014 2019E
+25%
Free clients
4.5 5.9
1
Net Capex (mn)
(€bn)
1
0
0.5
0.4 Unitary integrated margin(2)
19 26
0
0
(€/MWh)
0
-
2014 2019E
Endesa X
Smart meters
(mn)
5 ~12 (1)
2014 2019E
Net distributed energy E-Home clients
(TWh)
111 117 1.3 2.2
(mn)
Unitary Opex Charging points(3)
(€/end user)
59 43 - 5
(k#)
Established a leading position in infrastructures and new services
(1) Includes LV and HV full deployment (3) Public (1k) and private (4k) charging points
(2) Includes Generation margin + Supply margin
8
Endesa 2020-22 Strategic Plan Update Our vision
Our vision
Sector trends shaping our capital allocation
Decarbonisation
Enabling Ecosystems
Infrastructure & Platforms
Electrification
10Our vision
New opportunities arising from decarbonisation
CO2 emissions and actions needed to achieve Paris’ goals
GtCO2
Current trajectory Revolution of the energy paradigm towards
non-fossil sources. Electricity is the key
Energy efficiency element:
• Increases efficiency in final energy
Renewables
consumption
Other solutions
• Clean energy: zero CO2 and other
emissions
• Allows to increase renewable energy
2010 2020 2030 2040
1. IEA WEO 2018 SDS Scenario
Electrification as key element to achieve the Paris’ goals
11Our vision
Integrated National Energy and Climate Plans
2021-30
GHG emissions Energy
Renewables Interconnection
reduction efficiency
>32% on final 32.5%(1) 15%
2030 EU targets 40% vs. 1990 level energy consumption
Energy and Climate Integrated National Plan (PNIEC)
Spain 42% on final
21% vs. 1990 energy use
(48% vs. 2005) 39.6%(1) 15%
Energy and 74% on power
generation
Climate
strategic Draft on Climate Change and Energy Transition Law
framework
Fair Transition Strategy
236 €bn investments’ opportunities from the Energy Transition in Spain
(1) Savings in primary energy consumption vs. reference level
12Our vision
Accelerated coal phase out over the plan period
and beyond
Business Plan 2020-22
Coal capacity
5.3 5.1 0.2 99% 0.2 -
(GW) 30. 0
26.3
25. 0
20. 0
Coal production
(TWh) 15. 0
COAL PHASE
OUT
10. 0
8.1
5.0
99%
0.1 0.1
0.0
2015 2019E 2022 2024 0.0
2030
Mainland coal phase out by 2022
13Our vision
Progressing towards total decarbonisation in 2050
Total mainland capacity, GW Total mainland output, TWh
+0.9 GW
in 2019 19.0 2.8 -6.0 52.1
-4.5 17.3 49.5 8.4
Rnws 9.4
7.4 17.8
Nuke 10.2
3.3 26.3
26.5(1)
Thermal 4.5 Coal
3.3
6.6 Coal
3.8 CCGT CCGT 3.8
7.2 CCGT CCGT 7.8
2019E Renewables Coal 2022 2019E Renewables Thermal 2022
~40% Renewable capacity ~60% ~72% CO2 emissions free ~85%
Generation mix fully reshaped
(1) Load factors increase
14Our vision
Renewable generation 2019-22: our main growth
platform
Installed capacity, GW Output by technology, TWh
+38% ~2x
10.2
+0.3 GW Solar 17.8
+0.6 GW Wind 0.9
in 2019E 2.2 1.6
7.4 1.9 3.3
Solar 3.6
0.3
3.2 9.4
Wind 2.3 3.2 7.6
0.1
4.0
Hydro(1) 4.8 4.8
5.3 6.9
2019E Solar Wind 2022 2019E Solar Wind Hydro 2022
~40% increase of renewable installed capacity in 2022
(1) Includes mini-hydro
15Our vision
Strategy in Renewables
Renewables pipeline(1) (GW) Pipeline by technology Indicative hedging strategy
100 .0
90. 0
80. 0
16.1 12%
70. 0
33% Long term
60. 0
Total 4.1 GW customers
33%
50. 0
4.1 GW Long term PPAs
40. 0
12.0
30. 0
20. 0
Rest of portfolio
10. 0
2.9 88% 33%
0.0
1.2
Gross Pipeline Early stage COD COD
2020-22 Beyond 2022 Solar Wind
4.6 GW(2) with awarded connecting
IRR-WACC spread >200bps
points
Leveraging on our customer base to accelerate renewables development
(1) As of October 2019
(2) Incudes 0.5 GW in early stage
16Our vision
Progressing towards total decarbonisation in 2050
CO2 specific emissions(1), g CO2/kWh
-18%
538
~ -70%
439
Scope 1(1)Our vision
Enabling Infrastructure
Energy system evolution
Pivotal role in the Energy Transition
DSO/TSO Grid Edge Transformation enabling platformization of
the sector
Microgrids Aggregator
Innovation and resilience required in a changing
environment
Engagement of customers for a more active role
Infrastructures to enable integration of new renewables and electric vehicle
18Our vision
Enabling Infrastructure
Continuous focus on operational efficiency
Net distributed energy, TWh OPEX, €/end user
+3% -9%
Resiliency and flexibility
Service quality improvement
117 121
43
39
Deployment of smart meters and
smart grids
1 2
2019E 2022 2019E 2022
Losses(1) (%) 9.5 9.2
Minutes of
64 52
interruption(2)
Better service quality reducing interruptions, losses and improving efficiency
(1) System Operator (S.O) criteria
(2) Own + Programmed + Transport 19Our vision
Ecosystems and platforms
Share of power on total energy consumption(1),% Endesa X: Acceleration of electrification
Charging points(2) (th.) e-Home clients (mn)
23%
29%
+7x +27%
2018 2030
40
36 3
2.8
35
30
3
2.2
2
25
Electric vehicles
0 5 20
2
(mn) 15
1
10
5
7 24
1
Transport (TWh) 5
-
-
2019E 2022 2019E 2022
Residential share
38% 45%
of power
Platforms development to support demand electrification
(1) Source: Spanish PNIEC
(2) Public and private charging points 20Our vision
A fully sustainable capex plan reflected in SDGs
impacts
Capital allocation by SDG 2019E-22 SDGs impacts at 2022
2014
~60% 28%
RES Capacity/Mainland Capacity
9%
~12 mn 5 mn
7.7 €bn Smart Meters (1)
56%
26%
36 k n.a.
charging points (public and private)
~90% allocated to climate action (SDG 13)
21
(1) Includes LV and HV full deploymentEndesa 2020-22 Strategic Plan Update Strategic plan
2020-22 Strategic Plan
Key Financial Indicators
Net Capex analysis, €bn
By nature By business By strategic pillar
+20% +1.3 €bn
7.7 7.7
0.5
6.4 6.4 Decarbonisation 5.2
0.7
Asset 4.8 3.8
3.3 2.0 Electrification 0.3
development
Asset 1.9 Enabling infrastructure 2.0
2.0
management 2.4 2.3
1.8 1.4
Customer (1) 0.7 Ecosystems & Platforms 0.2
0.6
2018-21 2019E-22 2018-21 2019E-22
Conventional
Networks
Gross capex Generation(2)
7.1 8.4
Retail + Endesa X Renewables(3)
More than 20% increase in total capex and 45% increase in asset development
(1) Customer capex includes Cost to Acquire new customers, Connections and Investments associated with new services.
(2) Includes Net Capex in non mainland
(3) Renewables capex includes Hydro investments 232020-22 Strategic Plan
Decarbonisation
Renewables
Renewables net capex 2019E-22 EGPE(1) gross margin evolution, €bn
6% 1.3x
0.7
3.8 €bn
0.3
94%
2019E 2022
Asset Asset
development management
Doubling renewable capex drives gross margin growth
(1) EGPE includes wind, solar and mini hydro. It excludes large hydro 242020-22 Strategic Plan
Electrification
Maintaining leadership in the power business
Total energy sold 2019E-22(1), TWh Power integrated margin(2), €/MWh
+4%
(3)
99.1 103.1
Regulated 13.6 12.9 Unitary revenue ~68 ~69
20.0 22.3
Free B2C
Free B2B 65.6 67.9
2019E 2022
Unitary integrated
Free customers margin ~26 ~30
5.9 6.6 +12%
mn
Regulated customers
4.8 4.1 -14% 2019E 2022
mn
Churn rate (4)
9.6% 8.9% -7%
%
Consolidating integrated margin growth
(1) Total liberalized sales include international sales (2.7 TWh in 2019E and 3.0 TWh in 2022), not (3) Rounded figures
considered in the integrated margin. (4) Churn rate B2C free 25
(2) Includes Generation and Supply margin2020-22 Strategic Plan
Electrification
Consolidating as the 2nd gas operator
Volumes sold 2019E-22(1), TWh Key figures
+3% 2019E 2022 Var. 2019E-22
87 89
Free customers
CCGT sales 1.4 1.6 +14%
20 24 mn
Regulated customers
0.2 0.2 +0%
mn
Retail
67 65
Total customers(2)
1.7 1.8 +6%
mn
2019E 2022
Unitary margin(3)
~3 ~3
€/MWh
Churn rate (%) 8.7% 8.2%
Lower sales in retail due to progressive electrification of demand
(1) Not included Wholesale business
(2) Rounded figures
(3) Gas unitary margin does not include CCGT sales
262020-22 Strategic Plan
Electrification
Improving efficiency and digitalisation
Digital KPIs(1) Cost to Serve(1) , €/customer
+29%
-14%
e-billing, 3.5 4.5
2.8
mn
+4pp
10.9 10.6
Digital sales, 9.1
10% 14%
% digital 6%
2018 2019E 2022
+6%
Digital contracts, 4.4 4.7 5.0
mn
2018 2019E 2022
Digitalisation driving cost to serve reduction
(1) Power and gas. Not including Social Bonus
272020-22 Strategic Plan
Enabling infrastructures
Investments in networks
Net Capex(1) 2019E-22, €bn
2.0 Resiliency and flexibility in grids facing
Smart meters 1.9 the Energy Transition
0.1
0.1
Customers 0.1
0.8
Asset Management 0.7 1.1 €bn (~50%) capex in digitalisation to
2.0
+11% promote efficiencies
1.8 vs. old plan
Asset Development 1.0 1.1
100% capex devoted to RAB
2018-21 2019E-22
Double digit growth in Networks capex
(1) 2019E-2022 Gross capex 2.6€bn (includes client contributions) 282020-22 Strategic Plan
Enabling infrastructures
Margin evolution
Networks margin, €bn 2020-25 New remuneration draft
2.6
2.5 Confirms 5.58% RoR (6.003% in 2020)
-0.15 +0.03
Other 0.4
0.4
Remuneration of digitalisation investments,
confirming our expectations.
Regulated
2.2
2.1
New incentive scheme
2019E Regulated Mg Others 2022
RAB, €bn 11.6 11.2
New regulatory framework draft in line with expectations
292020-22 Strategic Plan
Ecosystems and Platforms
Endesa X
Net Capex 2019E-22 Gross margin, €bn
~0.2
~20%
36%
0.2 €bn ~0.1
64% ~10%
~80%
~90%
1 2
2019E 2022
New business(1) Mature business(2)
Leveraging existing businesses to support growth in e-Mobility and e-City
(1) New business: e-city, e-mobility and e-finance
(2) Mature business: e-home and e-industry 302020-22 Strategic Plan
Efficiency through digitalisation
2019E-22 Digitalisation Net Capex Key highlights
Networks: ~1.1 €bn for digitalisation
Quality Plan & remote control
DigI&N and Digital Hub
3%
11%
Renewables: Advanced automation of construction
1.3 €bn 5%
and O&M
81%
Wind & Solar maintenance
Thermal Gx: Increased flexibility and automation
Drones & augmented reality with Smart Glasses
Generation Networks Retail Endesa X
Customers: Process automation and increased
offering
2022 EBITDA contribution: ~150 €mn B2B and B2C CRM
Channels and internal process digitalisation
Digitalisation contributes with 25% to EBITDA growth
312020-22 Strategic Plan
Efficiency through digitalisation
Unitary KPIs of the Efficiency Plan per area
Opex(1) evolution, €bn
-5%
2014 2019E 2022 Var. 2019E-22
Unitary cost (2)
51 45 45 -
0.1 k€/MW
0.1 (0.3)
2.4 Unitary cost
59 43 39 -9%
€/end user
2.0 (3)
1.9 Cost to Serve
13 11 9 -18%
€/customer
2014 2019E CPI Growth Efficiency 2022
44% 35% Opex(1)/ Gross margin 30%
Efficiency more than compensate the increase of inflation and growth
(1) Opex: Total fixed costs in nominal terms (net of capitalizations)
(2) Thermal and renewable costs combined. Includes Corporate fees
(3) Not including non-recurrent expenses 32Endesa 2020-22 Strategic Plan Update Key Financial Indicators
Key Financial Indicators
Strategic plan at a glance
€bn
Cumulated net capex vs previous plan EBITDA
+20%
6
10
5
+16%
9
8
4
7
+1.3 €bn +0.6 €bn
6
3
5
4
7.7 2
3.7 4.3
3
2
6.4
1
1
0
0
2018-21 2019E-22 2019E 2022
Net Ordinary Income(1) Net Debt
3
+20%
+27%
10
2.5
8
2
6
+0.4 €bn
1.5
7.1 8.5
1.9
4
1
0.5
1.5 2
0 0
2019E 2022 2019E 2022
(1) Reported Net Income – Net Result on Disposals of Non-Financial Assets (over 10€M) - Net Results on Impairment of Non-Financial Assets (over 10 €M)
34Key Financial Indicators
Profitability and credit metrics
Profitability Return on invested capital Credit metrics
+90 bps +300 bps
+400 bps
0.5 0
40. 0%
14. 0%
0.4 5
35. 0%
0.4 0
44% 12. 0% 37%
0.3 5
40% 12.1% 30. 0%
34%
0.3 0
10. 0%
11.2% 25. 0%
8.0 %
0.2 5
20. 0%
0.2 0
6.0 %
15. 0%
0.1 5
1.9x 2x
4.0 %
10. 0%
0.1 0
2.0 %
0.0 5 5.0 %
-
0.0 %
0.0 %
2019E (1) 2022 2019E (1) 2022 2019E 2022
Net Income/EBITDA ROIC FFO/Net Debt Net debt/EBITDA
Focus on profitability and value creation
(1) Calculated on Net Ordinary Income
35Key Financial Indicators
Key Financial Indicators
EBITDA analysis
EBITDA by business, €bn EBITDA per year, €bn
+16%
(1)
4.3
(1) 4.1
-0.1 4.3 3.9
0.3 -0.1 3.7
3.7 0.4
1.4 1.5
1.5 1.1 1.3
1.1
• Higher renewable contribution
0.2 0.3 0.4 0.5
0.2 • Reference prices increase 0.5 0.3 0.3
0.3 0.3 0.2
0.2
• Sales growth
• Efficiencies
2.1 2.1 2.0 2.0 2.0
• Regulatory revision 2.0
2019E 2022 2019E 2020 2021 2022
Electrification & Decarbonisation
Networks Non-mainland EGPE Gx & Sx (2)
EBITDA growth driven by liberalized business and renewables
(1) Rounded figures
(2) Gx & Sx EBITDA figure includes Generation and Supply business, Corporate Structure, Services and Adjustments and does not include Non-mainland generation 36Key Financial Indicators
Key Financial Indicators
Net ordinary income evolution
Net Ordinary Income, €bn
+27%
1.9
1.8 ~-0.2 1.9
1.7
1.5 +0.6
1.5
2019E 2020 2021 2022 2019E EBITDA D&A, financial 2022
& others
27% increase in Net Ordinary Income vs. 16% in EBITDA
37Key Financial Indicators
Key Financial Indicators
Debt analysis
Gross debt, €bn Source of funds allocation 2020-22, €bn
8.8 9.5
7.4 0.3
0.3
8.5
7.1 3.7
(5.8)
(1.4)
2019E 2022
Net Debt Cash & Equivalents (4.7) (0.4)
Cost of debt FFO Capex(1) FCF Dividends IFRS 16 Chg. Net
1.8% 2.1% &Others Debt
(%)
Increase in net debt to boost growth
(1) Net Capex = Gross Capex - assets from clients’ contributions – subsidies
38Key Financial Indicators
Sustainable finance
Key financing with sustainability instruments
New green loans linked to renewable
Sustainable debt 2019E, % Path to 100% Sustainable Debt
investments: 635 €mn
10% March, 2019 Debt increase by 1.4 €bn will rise the
sustainable finance ratio
EIB first Green Loan, 335 €mn
€7.1bn 15 years
net debt Sustainable criteria across all financial
tools will be pursued
May, 2019
Promoting sustainability criteria among
ICO first Green Loan, 300 €mn
financial counterparties
12 years
Sustainable finance plays a key role in promoting sustainable development over the long term
39Endesa 2020-22 Strategic Plan Update Closing Remarks
Closing Remarks
Financial Targets
CAGR
2019E 2020 2021 2022
2019E-22
EBITDA
~ 3.7 ~ 3.9 ~ 4.1 ~ 4.3 +5%
(€bn)
Net Ordinary Income (1)
~ 1.5 ~ 1.7 ~ 1.8 ~ 1.9 +8%
(€bn)
Pay out(2)
100% 100% 80% 70%
(%)
Implicit DPS
~1.4 ~1.6 ~1.4 ~1.3
(€/share)
S 2019E-22
Net Capex
1.9 1.6 2.0 2.2 7.7
(€bn)
(1) Reported Net Income – Net Result on Disposals of Non-Financial Assets (over 10 €mn) - Net Results on Impairment of Non-Financial Assets (over 10 €mn)
(2) 70% pay out long term perspective
41Closing Remarks
First-class integrated player in Iberia
Outstanding delivery track record
Decarbonisation and electrification driving ample opportunities
Strategy aimed at sustainable growth path
Long term value creation for all stakeholders
42Endesa 2020-22 Strategic Plan Update Appendix
Key Financial Indicators
Commodity overview and update to latest market consensus
Brent price,
Brent price,$/bbl
$/bbl CO2 price, €/ton
2020-22 plan
2019-21 plan
67.5 23.5 23.5 24.0 24.5
69.0
65.0 66.0
68.0 65.0 63.5 17.5 18.0
16.0
2019E 2020 2021 2022 2019E 2020 2021 2022
Coal API2, $/ton PVB, €/MWh
77.0 75.0 76.0 78.0 21.4 20.6 20.8 20.9
73.0 75.0 74.0 20.6 20.5
20.0
2019E 2020 2021 2022 2019E 2020 2021 2022
44Key Financial Indicators
Power market overview and update to latest market consensus
Mainland Spain demand(1), TWh Average daily market price(2), €/MWh
2019-22 plan
2018-21 plan
266
263 56.5 55.0 55.4
259
256 258
253 53.2 53.5 53.3
250 50.2
2019E 2020 2021 2022 2019E 2020 2021 2022
Spain GDP growth, % Thermal gap, TWh
2.3% 63
2.0%
2.2% 52 39 40
1.8%
2.0% 1.5%
1.7% 34 33 31
2019E 2020 2021 2022 2019E 2020 2021 2022
(1) In bus bars
(2) Arithmetic power prices 45Key Financial Indicators
Net(1) Capex analysis
Net Capex, €bn
2.2
1.9 2.0
1.6
Renewables(2) 1.4
0.8 1.0
0.6
Networks 0.5
0.5 0.5
0.5
Gx(3) 0.4 0.4 0.4 0.2
Supply 0.2 0.1 0.1 0.1
2019E 2020 2021 2022
(1) Exclude client contributions
(2) Renewables capex includes Hydro investments
(3) Includes Net Capex in non mainland 46Key Financial Indicators
Gross(1) Capex analysis
Gross Capex(2), €bn Gross Capex by nature, €bn
2.4 8.4
2.1 2.1 7.1
1.8
Renewables(3) 4.9
0.8 1.0 1.4 Asset
0.6 development 3.3
Networks
0.6 0.7 0.7 Asset
0.7 2.4 2.3
management
Gx(4)
0.4 0.4 0.4 0.2 1.4
Supply 0.2 0.1 0.1 0.1 Customer (5) 1.2
2019E 2020 2021 2022 2018-21 2019E-22
(1) Includes client contributions
(2) Rounded figures
(3) Renewables capex includes Hydro investments
(4) Includes Net Capex in non mainland
47
(5) Customer capex includes Cost to Acquire new customers, Connections and Investments associated with new services.Key Financial Indicators
Comparison of old plan vs. updated plan
EBITDA, €bn
+ OTC references + Supply margin
+ Supply margin + Higher renewables
+ Fixed costs + Fixed costs
- Thermal generation - Non mainland margin
- Non mainland margin - OTC references & lower thermal Gx
4.3
3.9 4.0 4.1
3.7 3.8
3.7
2019E 2020 2021 2022
Plan 2019-21 Plan 2020-22
48Endesa 2020-22 Strategic Plan Update Environmental, Social and Governance annexes
Endesa 2020-22 Strategic Plan Update Sustainability Plan
Sustainability Plan
Sustainable business model driving change through
innovation 2020-22 Sustainability Plan
Endesa public committment to the United NationsEndesa 2020-22 Strategic Plan Update Focus on People Centricity
Focus on People Centricity
Engaging people we work with
Plan actions 2019E 2020-22 targets
• 8,566 people involved
Open Feedback Evaluation • 100% of people involved
• 100% of eligible people
• 100% of people involved • 100% of people involved
Climate survey(1)
• 83% of people participating • 87% of people participating
Gender - % of women in selection 29% women involved 45% women involved in
processes(2) in recruiting processes recruiting processes
Promotion of digital skills’ dissemination 40% of people involved in digital 100% of people involved in digital
among all employees skills training3 skills training(3)
1. Eligible and reachable people having worked in the Group for at least 3 months / 2. It excludes the selection processes involving the blue collars / 3. % accumulated with the training given since 2018 53Focus on People Centricity
Engaging local communities
Plan actions 2019E(1) 2020-22 targets
High-quality, inclusive and fair education 0.17 mn beneficiaries 0.7 mn beneficiaries in 20301
Access to affordable and clean energy 1.6 mn beneficiaries 4.8 mn beneficiaries in 20301
Employment and sustainable 1.7 mn beneficiaries in 20301
0.5 mn beneficiaries
and inclusive economic growth
1. Cumulated figures since 2015
54Endesa 2020-22 Strategic Plan Update Focus on Corporate Governance
Focus on Corporate Governance
Corporate governance structure
Composition BoD and Commitees
Audit firm
Shareholder’s meeting
36% BoD’s 55%
composition
Board of Directors
(11 members)
9%
Executive Proprietary Independent
Audit and Compliance Appointments and
Committee remuneration Committee
56Focus on Corporate Governance
Board of Directors composition
Board of Directors Board of Directors’ diversity
Chairman
J. Sánchez-Calero
.
J. Bogas CEO
By gender By tenure
P. Grieco Proprietary Director
F. Starace Vice Chairman 18% 18%
27%
Audit & Compliance C.
A. de Paoli
Appointments & Remuneration C.
A. Cammisecra Proprietary Director
Audit & Compliance C.
M. Roca
Appointments & Remuneration C.
82%
Audit & Compliance C. 55%
A. Echevarría
Appointments & Remuneration C.
Audit & Compliance C. Male Female 1-3 years 4-6 years Over 6 years
H. Revoredo
Appointments & Remuneration C.
Audit & Compliance C.
I. Garralda
Appointments & Remuneration C.
Audit & Compliance C.
F. de Lacerda
Appointments & Remuneration C.
Proprietary Executive Independent
57Focus on Corporate Governance
Short-term variable remuneration(1)
2019 Objective Type of target Macro objective
Range Weight
Net ordinary income Maximum 120% 25% Economic Profitability
Cash and debt
FFO Maximum 120% 15% Financial
management
Fixed costs Maximum 120% 20% Economic Efficiency
Decarbonisation Maximum 120% 20% Business Environmental
Safety in the workplace Maximum 120% 20% ESG Safety
(1) 2019 executive director variable remuneration
58Focus on Corporate Governance
Long-term variable remuneration(1)
Objective
Objective Type of
Type of target
target
Entry (50%) Target (100%) Over I (150%) Over II (180%)
Endesa’s TSR Endesa’s TSR Endesa’s TSR
Endesa’s TSR
from 90 % to from 100 % to from 110 % to
TSR(2) > 115% of Market Performance
100% of 110% of 115% of
TSR
TSR TSR TSR
50%(3)
ROACE(4) -3% Target Target +1.5% Target +3% Target Financial Profitability
40%(3)
CO2 emissions
reduction (gCO2 +3% Target Target -3% TargetEndesa 2020-22 Strategic Plan Update Focus on Innovation & Cybersecurity
Focus on Innovation & Cybersecurity
Innovation & Cyber security
Innovation Cibersecurity
Plan actions 2020-22 targets Plan actions 2020-22 targets
Coverage of web
1000 people involved in 100% of internet web
applications exposed
promotional innovation applications protected
to internet with
actions (workshops, through advanced
advanced cyber
trainings, cyber security
security application
intrapreneurship) solutions
solutions
Promoting innovation
culture
Disseminating the
information security 15 cyber security
5 innovation events per year culture and changing knowledge sharing
people’s behavior in order events per year
to reduce risks
61Glossary of terms (I/II)
Item Definition
Average cost of debt (%) Cost of gross financial debt / gross average financial debt
Average life of debt (number of years) (Principal x number of days of term) / (Principal in force at the end of the period x number of days of the period)
Cash flow from operations (€mn) Net cash provided by operating activities
Debt maturities coverage (months) Maturity period (months) for vegetative debt that could be covered with the liquidity available
Revenues – Purchases and Services + Work performed by the entity and capitalized – Personnel expenses – Other fixed
EBITDA (€mn)
operating expenses
EBIT (€mn) EBITDA - Depreciation and amortization
Fixed costs (Opex) (€mn) Personnel expenses + Other fixed operating expenses - Work performed by the entity and capitalized
Gross margin (€mn) Revenues – Purchases and Services
Leverage (times) Net financial debt / EBITDA
Net Capex (€mn) Gross tangible and intangible Capex - assets from clients’ contributions and subsidies
The higher profit before tax and non-controlling interests net of depreciation and amortisation and other adjustments +
Funds from Operations (FFO, €mn)
Change in Net Working Capital + Variation in the payment of the Income Tax
62Glossary of terms (II/II)
Item Definition
Net financial debt (€mn) Long and short term financial debt - Cash and cash equivalents – Derivatives recognized as financial assets
Net financial results (€mn) Financial Revenues - Financial Expenses - Foreign Exchanges
Revenues (€mn) Sales + Other operating revenues
Electric Integrated Margin (€mn) Contribution margin Gx+Sx - Margin SENP - Margin SCVP - Margin gas - Margin Endesa X - Others
Unitary electric integrated margin (€/MWh) Electric Integrated Margin / Electric sales in the liberalized market in Spain and Portugal
Gas retail unitary margin (€/MWh) Gas margin from retail sales / Gas Retail sales
Endesa X Gross Margin (€mn) Gross margin generated by the added value products and services commercialized by the Endesa X unit
63Disclaimer
This document contains certain "forward-looking" statements regarding anticipated financial and operating results and statistics and other future events. These statements are not guarantees of future performance and they are subject to material risks,
uncertainties, changes and other factors that may be beyond ENDESA’s control or may be difficult to predict.
Forward-looking statements include, but are not limited to, information regarding: estimated future earnings; anticipated increases in generation and market share; management strategy and goals; estimated cost reductions; tariffs and pricing structure;
estimated capital expenditures and other investments; estimated increases in capacity and output and changes in capacity mix; repowering of capacity and macroeconomic conditions. The main assumptions on which these expectations and targets are
based are related to the regulatory setting, exchange rates, increases in production and installed capacity in markets where ENDESA operates, increases in demand in these markets, assigning of production amongst different technologies, and the
availability and cost of the gas, coal, fuel oil and emission rights necessary to run our business at the desired levels.
In these statements we avail ourselves of the protection provided by the Private Securities Litigation Reform Act of 1995 of the United States of America with respect to forward-looking statements.
The following important factors, in addition to those discussed elsewhere in this document, could cause actual financial and operating results and statistics to differ materially from those expressed in our forward-looking statements:
Economic and industry conditions: significant adverse changes in the conditions of the industry, the general economy or our markets; the effect of the prevailing regulations or changes in them; tariff reductions; the impact of interest rate fluctuations; the
impact of exchange rate fluctuations; the impact of energy commodities price fluctuations; natural disasters; the impact of more restrictive environmental regulations and the environmental risks inherent to our activity; potential liabilities relating to our
nuclear facilities.
Transaction or commercial factors: any delays in or failure to obtain necessary regulatory, antitrust and other approvals for our proposed acquisitions or asset disposals, or any conditions imposed in connection with such approvals; our ability to integrate
acquired businesses successfully; the challenges inherent in diverting management's focus and resources from other strategic opportunities and from operational matters during the process of integrating acquired businesses; the outcome of any
negotiations with partners and governments. Delays in or impossibility of obtaining the pertinent permits and rezoning orders in relation to real estate assets. Delays in or impossibility of obtaining regulatory authorisation, including that related to the
environment, for the construction of new facilities, repowering or improvement of existing facilities or its closure or decommissioning; shortage of or changes in the price of equipment, material or labour; opposition of political or ethnic groups; adverse
changes of a political or regulatory nature in the countries where we or our companies operate; adverse weather conditions, natural disasters, accidents or other unforeseen events, defaults quantifiable of monetary obligations by the counterparties to
which the Company has effectively granted net credit and the impossibility of obtaining financing at what we consider satisfactory interest rates.
Regulatory, environmental and political/governmental factors: political conditions in Spain and Europe generally; changes in Spanish, European and foreign laws, regulations and taxes.
Operating factors: technical problems; changes in operating conditions and costs; capacity to execute cost-reduction plans; capacity to maintain a stable supply of coal, fuel and gas; acquisitions or restructuring; capacity to successfully execute a strategy
of internationalisation and diversification.
Competitive factors: the actions of competitors; changes in competition and pricing environments; the entry of new competitors in our markets.
Further details on the factors that may cause actual results and other developments to differ significantly from the expectations implied or explicitly contained in this document are given in the Risk Factors section of the current ENDESA regulated
information filed with the Comisión Nacional del Mercado de Valores (the Spanish securities regulator or the “CNMV” for its initials in Spanish).
No assurance can be given that the forward-looking statements in this document will be realised. Except as may be required by applicable law, neither Endesa nor any of its affiliates intends to update these forward-looking statements.
This presentation does not constitute a recommendation regarding the securities of Endesa, S.A.. This presentation does not contain an offer to sell or a solicitation of any offer to buy any securities issued by Endesa, S.A. or any of its subsidiaries or
affiliates.
64IR Team
Contact us
Contacts
Email: ir@endesa.es
Mar Martinez
Phone: + 34 91 213 15 03
Head of Investor Relations
+ 34 91 213 90 49
Investor Relations team
Website: www.endesa.com
Isabel Permuy
Javier Hernandez
Francesc Trilla
Juan Carlos Jimenez
Sonia Herranz
Paloma de Miguel
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