2013 Results 20142018 Plan March 12, 2014
Agenda Opening remarks Fulvio Conti CEO & General Manager 2013 results Luigi Ferraris CFO 20142018 Strategic update Fulvio Conti Overall financial targets 1
Opening remarks Group evolution 1 2005 2013 Presence 11 countries Net installed capacity 46 GW Customers ~34 million Employees 51,778 EBITDA ~8 bn 2 Presence 40 countries Net installed capacity 99 GW Customers ~61 million Employees 71,394 EBITDA ~16 bn 2 Capex Plan 20062010 ~18 bn 3 Enel has been transformed into a fully integrated multinational player Capex Plan 20142018 ~26 bn 3 1. Data as of December 31st 2. Recurring EBITDA 3. Net of connection fees 2
Opening remarks Coping with the world crisis In the face of a challenging macro scenario in mature markets......enel has successfully repositioned itself M A C R O I N D U S T R Y Global economic crisis GDP decline Negative regulatory scenarios Electricity/gas demand and price decline Significant overcapacity in generation Growing presence of distributed generation Internationalization process implemented Integration process well on track Solid platforms in new growing markets Well balanced asset portfolio Active counterparty with governments and authorities Material deleveraging and hybrid financing Shaping our strategy to succeed in a materially changed industry 3
Opening remarks Ongoing deleveraging ( bn) Endesa acquisition and asset disposal to EON ~55.8 Enel rights issue and acquisition of Acciona s stake in Endesa ~ 50.9 ~ 8 ~ 3 ~39.9 ~12.3 2005 2007 2009 Disposals net of Net free 2013 Net debt 1 Net debt 1 Net debt 1 acquisitions cash flow Net Debt 1 Net Debt/EBITDA Net Debt/EBITDA Net Debt/EBITDA Net Debt/EBITDA 1.6x (2) 5.6x (2) 3.3x (2) 2.5x (2) 1. Excluding net debt of assets held for sale 2. Calculated on recurring EBITDA Significant progress made on deleveraging in a negative macro scenario 4
Opening remarks Cost savings and capex optimization Opex: Italy and Iberia 1 Distribution ( /per end user) Group Capex Capex/EBITDA 56.3 8% 0.41x 0.37x 51.9 2010 2 2013 17.5 bn 16.1 bn Generation: fixed cost 3 (k /MW) 17% ~49 ~41 2010 2 2013 7.1 bn 2010 capex 5 Mature mkts. 4 64% 6.0 bn Mature mkts. 4 54% Mature mkts. 4 40% Mature mkts. 4 58% 2010 2013 2013 EBITDA 6 capex 5 EBITDA 6 1. Excluding Enel Green Power 2. 2010 inflated to 2013 A solid track record achieved through decisive managerial actions 3. Excluding fuel costs and other variable costs 5. Gross of connection fees 4. Italy and Iberia 6. Recurring EBITDA 5
Opening remarks Asset portfolio breakdown in 2013 1 Growth markets 2 EBITDA by geography 42% 16.1 bn 3 58% Mature markets 4 Regulated and quasiregulated activities 5 EBITDA by business 61% 16.1 bn 3 39% Unregulated activities Production mix Number of customers Nuclear 14% 26% Hydro Residential 87% Oil&Gas 10% 286 TWh 7% Other renewables 60.8 mn CCGT 14% 29% Coal 13% Nonresidential 1. As of December 31st 2. Latam, renewables and International division 3. Recurring EBITDA A competitive advantage built on a well balanced portfolio of assets 4. Italy and Iberia 5. Includes networks and renewables 6
Key priorities Ongoing positive free cash flow Deleveraging, portfolio optimization and Group reorganization Growing in emerging markets and new technologies, leveraging existing platforms and customer value 7
2013 results Luigi Ferraris 8
2013 results Financial highlights Consolidated results ( mn) FY12 FY12 restated 1 FY13 % vs restated Revenues 84,889 84,949 80,535 5.2 EBITDA 16,738 15,809 17,011 +7.6 recurring 2 16,738 15,809 16,089 +1.8 EBIT 7,735 6,806 9,944 +46.1 Group net income 865 238 3,235 >100 Group net ordinary income 2 3,455 2,828 3,119 +10.3 Net debt 3 42,948 42,948 39,862 7.2 1. 2012 restated due to the retrospective application of IAS 19 revised and the white certificates accounting policy 2. Excluding capital gains, losses and oneoff items 3. Excluding net debt of assets held for sale 9
2013 results Financial highlights From EBIT to Net Income ( mn) FY12 FY12 restated 1 FY13 % vs. restated EBIT 7,735 6,806 9,944 +46.1 Net financial charges (3,003) (3,012) (2,813) 6.6 Interest charges (2,832) (2,832) (2,770) 2.2 Other (171) (180) (43) 76.1 Net income from equity investments using equity method 88 88 86 2.3 EBT 4,820 3,882 7,217 +85.9 Income tax (2,745) (2,440) (2,437) 0.1 Net income 2 2,075 1,442 4,780 >100 Minorities (1,210) (1,204) (1,545) +28.3 Group net income 865 238 3,235 >100 Group net ordinary income 3 3,455 2,828 3,119 +10.3 1. 2012 restated due to the retrospective application of IAS 19 revised and the white certificates accounting policy 2. Continuing operations & including third parties 3. Excluding capital gains, losses and oneoff items 10
2013 results Focus on forward electricity sales Level of total production hedged (%) Italy Spain 2 100 100 100 100 ~ 10 Unhedged Hedged ~ 90 (1) ~ 60 ~ 40 (1) ~ 90 ~ 10 2014 2015 2014 2015 Latam Slovakia 100 100 100 100 ~ 25 ~ 30 ~ 75 ~ 75 ~ 70 ~ 25 1. Including rollover 2. Not including domestic coal output 2014 2015 2014 2015 11
2013 results Group EBITDA evolution ( mn) +7.6% 15,809 +929 95 +177 130 245 466 +107 +925 17,011 1,022 1,641 1,788 35 7,230 1,650 FY12 restated 2012 Restatement 2 Latam operations: 3,227 mn Iberian operations: 4,003 mn G&EM Italy Market Italy I&N Italy S&H 1 I&N Market G&EM International EGP Iberia & Latam International 1. Including the Engineering & Research division and elisions. Including capital gain of Arctic Russia for 964 mn 2. 2012 restated due to the retrospective application of IAS 19 revised and the white certificates accounting policy Iberia & Latam Latam operations: 3,493 mn Iberian operations: 3,253 mn Italian operations: 6,050 mn 3,623 Italian operations: 5,323 mn 609 866 1,091 1,176 EGP S&H 1 6,746 1,405 4,008 FY13 12
2013 results EBITDA evolution: G&EM Italy ( mn) +7.8% 1,091 +180 21 179 +105 1,176 FY12 restated 2012 restatement 1 Generation margin Gas margin Other FY13 1. Due to the retrospective application of IAS 19 revised 13
2013 results EBITDA evolution: Market Italy ( mn) +42.2% +79 +98 866 609 +80 FY12 restated 2012 restatement 1 Free market Regulated market FY13 1. Due to the retrospective application of IAS 19 revised (of which +11 mn free market, +69 mn regulated market) 14
2013 results EBITDA evolution: Infrastructure & Networks Italy ( mn) +10.6% 3,623 +515 +294 260 164 4,008 FY12 restated 2012 restatement 1 Energy margin Connection fees Other FY13 1. Due to the retrospective application of IAS 19 revised 15
2013 results EBITDA evolution: International ( mn) 14.8% 10.0% 1,650 519 OGK5 386 RES 1 133 58 231 842 134 +58 Russia France, Belgium, EIH 2 Romania Slovakia 81 8 1,485 511 OGK5: 399 RES 1 : 112 289 708 80 1,405 FY12 restated Slovakia Romania France, Belgium, EIH 2 Russia FY13 adjusted 23 Other item 3 FY13 1. RusEnergoSbyt 2. Enel Investment Holding 3. Pertaining to Enel Investment Holding 16
2013 results EBITDA evolution 1 : Endesa Iberia 2 ( mn) 18.7% 4,003 147 645 +42 3,253 FY12 restated Liberalized business Regulated business Other FY13 1. Enel s GAAP figures 2. Including Ireland (out of perimeter since October 2012) and Morocco 17
2013 results EBITDA evolution 1 : Endesa Latam ( mn) +8.2% 3,227 +350 +467 201 350 3,493 FY12 restated Generation Distribution Other Forex effect FY13 1. Enel s GAAP figures 18
2013 results EBITDA evolution: Enel Green Power ( mn) +9.0% 1,641 197 +40 +58 +49 1,788 246 497 497 North America Iberia and Latin America 947 Italy and Europe 1,045 FY12 2012 restated restatement 1 Italy and Europe Iberia and Latin America North America FY13 1. Due to the retrospective application of IAS 19 revised 19
2013 results Net debt evolution ( mn) 3,086 (1) +10 (3) December 31, Cash flow 2012 from operations Capex Net financial charges Taxes Dividends 2 Extraordinary activities December 31, 2013 10 (3) 2013 target 4 42,948 39,862 ~42 bn +13,319 5,960 2,605 2,606 2,044 +2,982 Net debt well below the original ~42 bn target 1. Net debt change calculated on continuing operations 2. Of which 634 mn dividends paid to minorities 3. Net financial debt of assets held for sale 4. Strategic Plan presented on March 2013 20
2013 results Enel s debt maturity profile ( bn) Total liquidity available and debt maturity profile Total liquidity available ( bn) ~21.4 Debt maturity profile ( bn) ~26.8 Long term committed credit lines 1 Cash and cash equivalents ~13.4 ~8.0 Short term Long term ~7.2 ~2.5 ~4.7 ~5.2 ~6.2 ~5.3 ~7.6 FY 2013 < 12m 2015 2016 2017 2018 After 2018 Cost of gross debt Hybrid issuances 5.3% 5.5% Avg. cost of Enel gross debt 10y Italian BTP avg. yield 4.6% 4.6% 4.3% 4.0% 4.9% 4.8% 4.9% 4.3% Total programme (by 2015): 5 bn Already achieved: 4.2 bn Avg. cost 1 st issuance (Sep. 2013): ~7% Avg. cost 2 nd issuance (Jan. 2014): ~5.5% 2009 2010 2011 2012 2013 Further upside on cash optimization 1. As of December 31st, 2013. Lines with maturities after December 2015 (including 9.4 bn revolving forward start credit facility) 21
20142018 Strategic update Fulvio Conti 22
Overview of macro scenario evolution Economy Macro trends Emerging markets to drive worldwide growth Technology Innovation as a driver to change the energy trends Customers More technologically and environmentally aware Regulation Increasing focus on system costs and environmental issues Implications for the energy industry Increasing role of emerging markets and reshaping presence in mature markets Active role of distribution operators Key role of customers Value shifting to renewables and downstream activities Enel key priority: Growing in emerging markets and new technologies, leveraging existing platforms and customer value 23
Growing in emerging markets and new technologies, leveraging existing platforms and customer value New value drivers map Mature markets Emerging markets 1 Enel current positioning Conventional generation 2 Stable Moderate growth 90 GW net installed capacity Renewables 3 Moderate growth One of the largest world players in the renewables business 8.9 GW in 16 countries and 5 technologies Distribution Strong growth ~400 TWh distributed in 8 countries ~40 million smart meters installed Retail and new downstream Strong growth 60.8 million customers 1. Based on the countries of presence of Enel 2. Including large hydro 3. Enel Green Power Increasing role of renewables, distribution and retail as key value drivers for our future growth 24
Growing in emerging markets and new technologies, leveraging existing platforms and customer value Conventional generation 1 Worldwide overview: 2 Capacity and production by geography A well balanced geographical mix: 49% of production in growth markets Leadership position in most of the markets of presence Latam Rest of Europe 3 and Russia Capacity (GW) Iberia 90.0 16.0 14.9 22.3 Production (TWh) 256.7 61.9 64.6 70.5 Latam Rest of Europe 3 and Russia Iberia Italy 36.8 59.7 Italy 2013 2013 Capacity and production by technology A competitive technological mix: Capacity (GW) Production (TWh) 1. Excluding Enel Green Power 2. As of December 31st, 2013 3. Slovakia and Belgium Strong contribution of low variable cost and CO 2 free production (41% large hydro and nuclear) Only 6% of CCGT production in mature markets with positive spreads Nuclear 6% Hydro 31% 90.0 Coal 20% Oil&Gas 25% CCGT 18% Oil&Gas 11% Nuclear 16% CCGT 16% 256.7 Hydro 25% Coal 32% 25
Growing in emerging markets and new technologies, leveraging existing platforms and customer value Actions Conventional generation Key strategic guidelines Targets Restructuring in Italy and Iberia Ongoing mothballing and/or phaseout: ca. 8 GW in 20142016, of which 4.9 GW in 2014 Strong capex reduction Increasing flexibility Leverage energy services Long term gas contracts renegotiation Focus Growth on selected initiatives in Emerging Markets Finalize new nuclear capacity in Slovakia (+0.9 GW) Sustain growth in Latam through capacity increase in Chile and Colombia (+0.8 GW, of which ~85% large hydro) Group Installed Capacity (GW) 90.0 83.1 (1) 2013 2018 Capex plan ( bn): New Plan vs Old Plan 10.1 Growth ~50% Maintenance ~50% Old Plan 13 17 8% 24% 7.7 ~40% ~60% New Plan 14 18 Growth Maintenance 1. Post IFRS 11 Resilient business in a challenging environment Total capex down by 24% 26
Growing in emerging markets and new technologies, leveraging existing platforms and customer value Group renewable operations Worldwide overview Current EGP 1 presence New markets already addressed Business development explored countries 8.9 GW in 16 countries Advanced projects developed in 5 countries 4 macroareas with business development origination Geographical and technological diversification Large diversified pipeline and flexible capital allocation Additional value from potential entry in new countries 8.9 GW installed capacity 16 countries 5 technologies 1. Enel Green Power as of December 31st, 2013 Low dependence on subsidies 27
Growing in emerging markets and new technologies, leveraging existing platforms and customer value Actions Leverage Enel Green Power s unique multitechnology approach in the global growth of renewables Renewables Key strategic guidelines Targets Growth capex as % of total capex 6.0 bn Maintenance 10% Rest of the world 26% New 27% Growth countries 90% 47% Latam Leverage emerging markets and new geographies 20142018 cumulative Enel Green Power capacity plan (GW) Average IRR ~11% and 60% organic growth 1 already secured 8.9 2013 +51% 12.1 13.4 9.8 2014 2016 2018 Investment in renewables: solid and quick return on capital, sustainable long term growth 1. Share of in execution and awarded projects as of December 31st, 2013 on 20142018 additional capacity 28
Growing in emerging markets and new technologies, leveraging existing platforms and customer value Group distribution operations Worldwide overview: 1 Brazil 6.3mn end users Colombia Second operator 2.7mn end users Argentina Second operator 2.4mn end users Chile First operator 1.7mn end users Peru First operator 1.3mn end users Total end users Europe Latam Total TWh distributed Europe Latam Smart meters installed Europe 60.5 mn 46.2 mn 14.3 mn 404.0 TWh 342.5 TWh 61.5 TWh 38.8 mn 38.8 mn Italy First operator 31.7mn end users Spain First operator 11.9mn end users Romania Second operator 2.6mn end users 1. As of December 31st, 2013 Enel is one of the largest distributors worldwide 29
Growing in emerging markets and new technologies, leveraging existing platforms and customer value Actions Ensure stable cash flows leveraging RAB and WACC Fully exploit the growth of end users and distributed energy in emerging markets Consolidate cost leadership in distribution networks by sharing internal best practice Distribution Key strategic guidelines Europe Latam Targets Number of end users (mn) 60.5 46.2 14.3 64.4 2013 2018 Number of smart meters installed (mn) 38.8 +13 TWh (+21%) +29% 48.0 16.4 49.9 2013 2018 Cumulative capex 20142018 (1) Become the global leader in Smart Grids development 1. Gross of connection fees Maintenance 7.1 13.5 bn 4.4 New connections 2.0 Metering & New technologies Group total RAB equal to ca. 40 bn ~4 million additional end users by 2018 47% of total Group capex 30
Growing in emerging markets and new technologies, leveraging existing platforms and customer value Retail Worldwide overview: 1 Number of customers (mn) Wide customer base across countries of operation 60.8 60.8 Liberalization of the market will enhance our customer value, especially in the mass market segment Free Regulated 2 13.1 47.7 14.3 2.8 12.6 Latam Rest of Europe and Russia Iberia 31.1 Italy Consolidated quality leadership 2013 2013 Increasing customer value to enhance profitability 1. As of December 31st, 2013 2. Including all the customers in Latam and Romania and the last resort tariff customers in Italy (Enel Servizio Elettrico) and in Spain (Tarifa Ultimo Recurso) 31
Growing in emerging markets and new technologies, leveraging existing platforms and customer value Actions Retail Key strategic guidelines Targets Free retail customers (mn) Increase the overall customer base and accelerate build up of free customers portfolios 13.1 13.7 +88% 22.0 24.6 2013 2014 2016 2018 New Downstream gross margin ( mn) Develop value added services and products to enhance the Group s positioning in the new business paradigm ~225 ~300 ~550 ~750 2013 2014 2016 2018 Develop coherent retail strategy to leverage changing customer dynamics 32
Key priorities Ongoing positive free cash flow Cost savings programme Capex plan Leverage positive free cash flow Deleveraging, portfolio optimization and Group reorganization Growing in emerging markets and new technologies, leveraging existing platforms and customer value 33
Ongoing positive free cash flow Cost savings programme 1 ( mn) ~5,770 Growth markets 2 28% Mature markets 3 35% personnel costs 65% external costs ~570 ~1,220 30% ~1,520 28% 72% 474 12% 88% ~210 10% 90% 16% 84% 70% 72% FY 2013 actual 2013 target (Old Plan 20132017) 2014 target 2016 target 2018 target Significant upgrade to cost savings target 1. Based on total fixed controllable 2012 costs of 9.4 bn (post IFRS 11) 2. Latam, renewables and International division 3. Italy and Iberia 20142018 cumulative target 34
Ongoing positive free cash flow Capex plan 1 ( bn) ~ 25.7 6.1 2.6 13% 5.3 2.2 ~ 5.1 ~ 2.1 ~ 5.1 ~ 1.8 ~ 5.3 ~ 1.7 ~ 9.1 ~ 16.6 Supply & other 5% Gen. 29% Ren. 23% Mature mkts. 3 43% 3.5 3.1 ~ 3.0 ~ 3.3 ~ 3.6 Distr. 43% Growth mkts. 2 57% 2012 actual 2013 actual 2014 Plan 2016 Plan 2018 Plan 20142018 cumulative capex Growth capex Maintenance capex 1. Net of connection fees 2. Latam, renewables and International division 3. Italy and Iberia Capex addressing the new business paradigm, towards faster and higher returns 35
Ongoing positive free cash flow Leverage positive free cash flow Group overview ( bn) ~49.9 ~28.6 Connection fees 2.9 bn Net capex 25.7 bn ~21.3 ~11.6 ~9.7 Cumulative 14 18 Gross capex Cash flow Dividends 2 Net free operating cash flow 1 programme cash flow 1. After net interest expenses, taxes paid and change in working capital 2. Based on a payout policy ratio of 40% as a floor Net free cash flow positive throughout the whole Plan period 36
Ongoing positive free cash flow Leverage positive free cash flow Focus on Italy and Iberia ( bn) Italy 1 Iberia 1 20142018 cumulative 20142018 cumulative 14.8 bn 7.2 bn Connection fees 0.5 bn 12.3 bn 5.2 bn Connection fees 1.2 bn Net capex 6.7 bn 7.6 bn Net capex 4.0 bn 7.1 bn Operating cash flow 2 Gross capex Cash flow before dividends Operating cash flow 2 Gross capex Cash flow before dividends Italy and Iberia remain robust cash generators 1. Excluding Enel Green Power 2. After net interest expenses, taxes paid and change in working capital 37
Ongoing positive free cash flow Leverage positive free cash flow Focus on growth markets ( bn) Latam 1 20142018 cumulative Enel Green Power 20142018 cumulative 14.9 bn 8.0 bn Connection fees 1.0 bn 8.4 bn 6.0 bn Net capex 7.0 bn 6.9 bn 2.4 bn Operating cash flow 2 Gross capex Cash flow before dividends Operating cash flow 2 Gross capex Cash flow before dividends Organic growth fully funded from operating cash flow 1. Excluding Enel Green Power 2. After net interest expenses, taxes paid and change in working capital 38
Key priorities Ongoing positive free cash flow Deleveraging, portfolio optimization and Group reorganization Growing in emerging markets and new technologies, leveraging existing platforms and customer value 39
Deleveraging, portfolio optimization and Group reorganization Disposal programme and minority buyouts Disposal programme Minority buyouts ~ 6 bn ~ 1.6 bn 76% ~ 4.4 bn 72% 65% 20132014 disposal programme Disposals already cashedin To be achieved by year end 2014 2016 2018 Group net income / Total net income Disposal proceeds fully dedicated to debt reduction Simplifying Group structure, providing higher EPS 40
Overall financial targets Fulvio Conti 41
20142018 cumulative cash flow ( bn) ~49.9 ~28.6 Conn. fees 2.9 bn Net capex 25.7 bn ~21.3 ~11.6 ~4.4 ~4.4 ~9.7 ~9.7 Cumulative 20142018 operating cash flow 1 Gross capex Cash flow Dividends 2 Net free Disposals Net debt Minority programme cash flow reduction buyouts and acquisitions 3 Focus on deleveraging, minority buyouts and dividends 1. After net interest expenses, taxes paid and change in working capital 2. Based on a payout policy of 40% as a floor for Enel S.p.A., calculated on net ordinary income 3. Including minorities buyouts in Enersis for a total amount of ca. 1.8 bn 42
Overall financial targets ( bn) 2014 2016 2018 1 EBITDA ~ 15.5 ~ 16.5 ~ 18 (2) (2) (2) Ordinary net income 1 ~ 3 ~ 3.7 ~ 4.5 Net debt 3 ~ 37 ~ 39 ~ 36 Dividend policy (4) On 2014 results: at least 40% payout From 2015 results: at least 50% payout 1. Net of disposals and extraordinary items (capital gains/losses) 2. Post IFRS 11 (impact: ca. 0.2 bn in 2014, 2016, 2018) 3. Net of disposals 4. Based on ordinary net income 43
Strategic annexes 44
Focus on divisions Italian operations: targets 1 Capex 2 ( bn) EBITDA ( bn) ~1.3 ~0.1 ~1.3 ~0.1 ~5.9 ~1.0 ~5.6 ~1.1 ~0.3 ~0.3 ~1.0 ~0.9 ~0.9 ~0.9 ~3.9 ~3.6 2014 2016 2014 2016 Infrastructure&Networks G&EM Market 1. Gross of disposals. Post IFRS 11 (impact on EBITDA: ca. 0.05 bn in 2014 and 2016) 2. Net of connection fees 45
Focus on divisions Endesa Iberia: targets 1 Capex 2 ( bn) EBITDA ( bn) ~3.4 ~2.8 ~0.8 ~0.6 2014 2016 2014 2016 1. Gross of disposals. Post IFRS 11 (impact on EBITDA: 0.03 bn in 2014, 0.06 bn in 2016) 2. Net of connection fees 46
Focus on divisions Endesa Latam: targets 1 Capex 2 ( bn) EBITDA ( bn) ~4.2 ~3.6 ~1.4 ~1.5 2014 2016 2014 2016 1. Post IFRS11. Gross of disposals (impact on EBITDA: 0.02 bn in 2014, 0.01 bn in 2016) 2. Net of connection fees 47
Focus on divisions International operations: targets 1 Capex 2 ( bn) EBITDA ( bn) ~1.2 ~0.1 ~0.2 ~1.2 ~0.3 ~X.X ~1.3 ~0.3 ~0.9 ~0.4 ~0.1 ~0.4 ~0.4 ~0.2 ~0.5 ~0.6 ~0.1 2014 2016 2014 2016 Slovakia Russia Other 1. Gross of disposals. Post IFRS 11 (impact on EBITDA: ca. 0.05 bn in 2014 and 2016) 2. Net of connection fees 48
Focus on divisions Enel Green Power: targets 1 Capex 2 ( bn) EBITDA ( bn) ~2.3 ~1.9 ~1.4 ~1.1 2014 2016 2014 2016 1. Post IFRS 11 (impact on EBITDA: ca. 0.02 bn in 2014 and 2016) 2. Net of connection fees 49
Electricity demand, commodities and CO 2 scenario Electricity demand 20142018 CAGR Brent ($/bbl) Mature markets 100 100 107 Italy +1.3% 2014 2016 2018 Spain 1 +2.3% Coal ($/ton) Growth markets 95 110 117 Russia 2 +1.3% 2014 2016 2018 Slovakia +1.5% CO 2 ( /ton) Latam 3 +5.0% 5 12 20 1. Peninsular 2. European Urals 3. Brazil, Chile (CIS), Colombia, Peru, Argentina. Average growth weighted by Enel s production 2014 2016 2018 50
Latam: regulatory framework for distribution assets Chile Colombia Peru Brazil Longterm concessions Indefinite concession Authorization Lack of exclusivity Indefinite concession Concession for 30 years Stable regulatory frameworks 1st set: 1984 # of revisions: 7 1st set: 1997 # of revisions: 3 1st set: 1997 # of revisions: 4 1st set: 2003 # of revisions: 3 Attractive profitability metrics (pretax, real terms) 10.0% Defined by law 13.9% Calculated during each revision 12.0% Defined by law 10.2% Calculated during each revision Tariffs are set using technical and objective criteria New replacement value based on optimized network New replacement value based on real network New replacement value based on optimized network New replacement value based on real network There are conflict resolution mechanisms in place to settle disputes effectively Expert Panel resolves disputes between the regulator and agents Regulator settles disputes among Agents Regulator imposes sanctions: SSPD + CREG Regulator is the designated authority to resolve conflicts and impose sanctions when necessary Chamber of commerce settles disputes among agents Foundation Getulio Vargas in charge of Arbitration Regulator settles disputes among regulated clients and imposes sanctions 51
Retail: focus on new downstream Italy Iberia Mass market customers New business model as full service provider Enlargement of product/service offering Pilot phase in late 2013 with nation rollout during 2014 Last 12 years CAGR margin: 18% Higher customer satisfaction Customer loyalty improvement Developing new opportunity: monitoring, electric mobility, energy efficiency Corporate customers Launch of Standard Offer in 1H 2013 Development of large tailor made efficiency projects Pilot projects started in 2H 2013 with rollout during 2014 Latam Demand electrification to increase electricity access (cities and rural areas) Focus on public lighting, infrastructure and new opportunities (electric mobility, energy efficiency) Increased focus on retail customers has potential to become a further drive of growth 52
CO 2 specific emissions towards the Carbon Neutrality (*) Preliminary data 53
Financial and operational annexes 54
Production mix (TWh) 2.0% 74.4 72.9 Group production mix 1.8% 14.9% 0.7% 9.9% 3.0% Italy 48.4% 46.1% 9.2% 294.8 11.9% 14.6% 286.1 10.2% 14.2% 8.6% 26.3% FY12 34.1% FY13 31.1% 28.8% 3.3% 14.0% 5.3% 23.1% 14.2% 6.6% 26.0% 220.4 15.4% 14.4% 213.2 13.5% 15.7% FY12 FY13 Other Countries 25.3% 22.9% Other renewables Hydro Coal Nuclear Oil & gas CCGT 18.8% 4.1% 22.0% 19.0% 5.7% 23.2% FY12 FY13 55
FY2013 Group total net installed capacity 1 : breakdown by source and location MW Hydro Other ren. Nuclear Coal CCGT Oil & gas ST/OCGT TOTAL Italy 13,689 1,605 6,680 5,925 12,024 39,923 Iberia 4,721 1,865 3,556 5,530 5,568 (2) 2,951 24,191 Centrel 2,329 27 1,814 829 400 5,399 SEE 19 1,033 (3) 406 (4) 1,458 Americas 9,705 1,876 839 3,876 2,542 18,838 Russia 3,623 809 4,675 9,107 TOTAL 30,463 6,406 5,370 17,501 16,584 22,592 98,916 1. Including Group renewable capacity 2. Including 123 MW of installed capacity in Morocco 3. Including 186 MW of installed capacity in France 4. Including 406 MW of installed capacity in Belgium 56
FY2013 Group total net production 1 : breakdown by source and location GWh Hydro Other Nuclear Coal CCGT Oil & gas ren. ST/OCGT TOTAL Italy 24,845 6,697 33,650 7,200 505 72,897 Iberia 9,657 4,778 25,967 22,623 5,940 (2) 6,501 75,466 Centrel 4,759 59 14,624 1,901 21,343 SEE 47 2,047 (3) 1,373 (4) 3,467 Americas 35,036 5,164 4,474 21,474 4,924 71,072 Russia 19,740 4,779 17,382 41,901 TOTAL 74,344 18,745 40,591 82,388 40,766 29,312 286,146 1. Including Group renewable production 2. Including 852 GWh of net production in Morocco 3. Including 362 GWh of net production in France 4. Including 1,373 GWh of net production in Belgium 57
FY2013 Enel Green Power net installed capacity: breakdown by source and location MW Hydro Geothermal Wind Other TOTAL Italy & Europe 1,531 723 1,647 227 4,128 Iberia & Latam 775 2,210 87 3,072 North America 317 72 1,265 29 1,683 TOTAL 2,623 795 5,122 343 8,883 58
FY2013 Enel Green Power net production: breakdown by source and location GWh Hydro Geothermal Wind Other TOTAL Italy & Europe 6,607 5,300 3,212 223 15,342 Iberia & Latam 3,254 5,116 381 8,751 North America 1,060 281 3,841 178 5,360 TOTAL 10,921 5,581 12,169 782 29,453 59
Enel s longterm debt maturity profile ( mn) Endesa (excluding Endesa) 26,808 2,884 Bonds Bank loans and others 2,649 2,041 23,924 4,690 5,236 1,125 3,565 679 4,557 6,175 988 5,187 5,329 1,138 4,191 7,565 474 7,091 <12m 2015 2016 2017 2018 After 2018 6 years and 11 months Average cost of gross debt: 4.9% 60
liquidity analysis ( mn) Amount Outstanding Available Committed credit lines 16,821 1,415 15,406 (1) Cash and cash equivalents (8,031) 8,031 Total 16,821 (6,616) 23,437 Uncommitted lines 896 101 795 Commercial paper 9,290 2,202 7,088 Total liquidity 27,007 (4,313) 31,320 1. Of which ca. 13.4 bn with maturity after 2015 61
Debt structure 1 Average debt maturity: 6 years and 11 months Average cost of gross debt 2 : 4.9% (Fixed+hedged)/Total gross longterm debt: 80% Rating: Standard&Poor s = BBB/A2 Stable Outlook Moody s = Baa2/P2 Negative Outlook Fitch = BBB+/F2 Rating Watch Negative mn December 31, 2012 December 31, 2013 % Longterm 52,383 46,162 11.9 Shortterm 3 8,027 7,219 10.1 Cash 4 (17,462) (13,519) 22.6 Net debt 42,948 39,862 7.2 1. As of December 31st, 2013 2. Average cost of net debt equal to 6.2% 3. Including current maturities of longterm debt 4. Including factoring and other current receivables 62
Enel s group financial debt evolution 1 mn (excluding Endesa) Endesa 12.31.2012 12.31.2013 12.31.2012 12.31.2013 Group Total 12.31.2013 Bank loans maturities > 12m Bonds maturities > 12m Preference shares > 12m Other loans maturities > 12m Financial receivables maturities > 12m 10,864 37,350 482 2,515 6,395 37,923 629 2,528 2,418 4,159 686 1,061 1,892 3,560 714 2,423 8,287 41,483 1,343 4,951 Total net LT debt maturities > 12m 46,181 42,419 6,202 3,743 46,162 Bank loans maturities < 12m Bonds maturities < 12m Preference shares < 12m Other loans maturities < 12m Financial receivables maturities < 12m Total net LT debt maturities < 12m 404 1,685 72 87 2,074 1,418 2,062 85 104 3,461 310 1,249 181 156 5,231 3,335 370 587 168 2,873 1,748 1,788 2,649 253 2,977 1,713 Other ST bank debt Commercial paper Cash Collateral and other derivatives payables Other ST financial debt ST debt 235 2,555 691 25 3,506 114 1,388 119 26 1,647 48 359 57 464 36 814 32 882 150 2,202 119 58 2,529 Factoring receivables Cash Collateral and other derivatives receivables Other ST financial receivables Cash at banks and marketable securities Total net ST debt (incl. current maturities) 288 1,402 255 7,991 4,356 263 1,720 309 4,764 1,948 266 1,942 5,079 203 3,283 4,352 263 1,720 512 8,047 6,300 Net financial debt 41,825 40,471 1,123 609 39,862 1. As of December 31st, 2013 63
Enel s group financial debt by subsidiary 1 mn Enel SpA Endesa EFI 2 EIH 2 Slovenské EP 2 ED 2 Other Total Bonds 18,826 4,147 20,782 298 79 44,132 Bank loans 2,262 1,149 510 3,293 2,861 10,075 Other loans (5) (4,414) (812) (285) (962) 146 (6,332) Commercial paper 814 1,388 2,202 Other (4,019) (3,418) (10) (8) 50 (10) (129) (2,671) (10,215) Total 14,802 (609) 22,160 290 387 215 2,202 415 39,862 1. As of December 31st, 2013 2. EFI: Enel Finance International; EIH: Enel Investments Holding; EP: Enel Produzione; ED: Enel Distribuzione 64
Enel s group financial debt Average cost of net debt Average cost of gross debt Average residual maturity (years:months) 5.9% 6.1% 6.2% 4.9% 4.8% 4.9% 6:7 6:11 6:11 2011 2012 2013 2011 2012 2013 2011 2012 2013 Net financial debt ( bn) 44.6 42.9 39.9 96% Fixed + Hedged /Total net debt 99% 106% Fixed + Hedged /Total gross long term debt 78% 75% 80% 2011 2012 2013 2011 2012 2013 2011 2012 2013 65
Enel s longterm debt maturity profile ( mn) (excluding Endesa) mn <12m 2015 2016 2017 2018 After 2018 Bank loans 1,418 761 588 490 920 3,637 Bonds 2,062 3,727 4,531 3,625 6,093 19,948 Other 85 69 68 76 78 339 Total 3,565 4,557 5,187 4,191 7,091 23,924 Endesa mn <12m 2015 2016 2017 2018 After 2018 Bank loans 370 219 386 696 119 471 Bonds 587 361 511 351 288 2,048 Other 168 99 91 91 67 365 Total 1,125 679 988 1,138 474 2,884 66
liquidity analysis excluding Endesa ( mn) 1 Amount Outstanding Available Revolving Credit Facility (2015) 2 Other committed credit lines 10,000 3,020 (3) 1,372 10,000 1,648 Total committed credit lines 13,020 1,372 11,648 Other shortterm bank debt uncommitted lines 225 101 124 Total credit lines 13,245 1,473 11,772 Commercial paper 6,000 1,388 4,612 Total credit lines + CP 19,245 2,861 16,384 Cash and cash equivalents (4,748) 4,748 Total liquidity 19,245 (1,887) 21,132 1. As of December 31st, 2013 2. New credit line signed on February 2013 to extend the maturity to 2018, starting from 2015, for a total amount of 9.4 bn 3. Including 1,230 mn relating to a committed line pertaining to Slovenske Elektrarne 67
Endesa liquidity analysis ( mn) 1 Amount Outstanding Available Total committed credit lines 3,801 43 3,758 Other shortterm bank debt uncommitted lines 671 671 Total credit lines 4,472 43 4,429 Commercial paper issued by the Endesa Group 3,290 814 2,476 Total credit lines + CP 7,762 857 6,905 Cash and cash equivalents (3,283) 3,283 Total liquidity 7,762 (2,426) 10,188 1. As of December 31st, 2013 68
Capex by business area ( mn) 1 15.8% 7,075 Other 2 Enel Green Power Iberia & Latam International Infrastructure & Networks Market Generation & Energy Management 163 1,257 5,959 84 2,497 1,307 2,181 1,161 924 1,497 1,046 97 99 403 318 FY12 FY13 48.5% +4.0% 12.7% 20.4% 30.1% +2.1% 21.1% 1. Continuing operations, gross of connection fees 2. Including Services & Holding, Engineering & Research, upstream gas and nuclear activities 69
Balance sheet mn FY12 restated FY13 % Net financial debt 42,948 39,862 7.2 Shareholders equity 52,087 52,839 +1.4 Net capital employed 95,035 92,701 2.5 71
Generation & Energy Management Italy mn FY12 restated FY13 % Revenues 25,244 22,919 9.2 EBITDA 1,091 1,176 +7.8 EBIT 505 554 +9.7 Capex 403 318 21.1 Headcount 6,043 5,699 5.7 72
Market Italy mn FY12 restated FY13 % Revenues 18,351 16,921 7.8 EBITDA 609 866 +42.2 EBIT 103 362 >100 Capex 99 97 +2.1 Headcount 3,674 3,687 +0.4 73
Infrastructure & Network Italy mn FY12 restated FY13 % Revenues 8,117 7,530 5.2 EBITDA 3,623 4,008 +10.6 EBIT 2,629 3,028 +15.2 Capex 1,497 1,046 30.1 Headcount 18,632 17,689 5.1 74
International mn FY12 restated FY13 % Revenues 8,703 7,737 10.2 EBITDA 1,650 1,405 14.9 EBIT 978 85 43.0 Capex 1,161 924 20.4 Headcount 12,652 11,830 6.5 75
Iberia & Latam mn FY12 restated FY13 % Revenues 34,169 30,935 9.5 EBITDA 7,230 6,746 6.7 EBIT 1,675 3,836 >100 Capex 2,497 2,181 12.7 Headcount 22,807 22,994 +0.8 76
Enel Green Power mn FY12 restated FY13 % Revenues 2,696 2,827 +4.9 EBITDA 1,641 1,788 +9.0 EBIT 1,081 1,171 +8.3 Capex 1,257 1,307 +4.0 Headcount 3,512 3,599 +2.5 77
Other 1 mn FY12 restated FY13 % Revenues 2 2,017 2,885 +43.0 Holding 335 276 17.6 Services 1,503 1,447 3.7 Engineering & Research 308 309 +0.3 Upstream 2 967 >100 EBITDA 3 (35) 1,022 n.m. Holding (90) (65) +27.8 Services 100 137 +37.0 Engineering & Research (25) 14 n.m. Upstream (20) 936 n.m. 1. Including Services & Holding, Engineering & Research, upstream gas and nuclear activities 2. Including Other & Elisions of 131 mn in FY12 and 114 mn in FY13 3. Including Other & Elisions of 0 mn in FY12 and 0 mn in FY13 78
Other 1 Continued mn FY12 restated FY13 % EBIT 2 (165) 908 n.m. Holding (103) (74) +28.2 Services & other (11) 37 n.m. Engineering & Research (30) 9 n.m. Upstream (21) 936 n.m. Capex 163 84 48.5 Holding 8 13 +62.5 Services & other 64 60 6.3 Engineering & Research 4 3 25.0 Upstream 87 8 90.8 Headcount 6,382 5,896 7.6 Holding 841 789 6.2 Services & other 4,200 3,865 8.0 Engineering & Research 1,277 1,190 6.8 Upstream 64 52 18.8 1. Including Services & Holding, Engineering & Research, upstream gas and nuclear activities 2. Including Other & Elisions of 0 mn in FY12 and 0 mn in FY13 79
EBIT by business area ( mn) +46.1% 9,944 6,806 908 1,171 n.m. +8.3% Other 1 EGP Iberia & Latam International I&N Market G&EM 1,081 3,836 1,675 978 85 2,629 3,028 >100 43.0% +15.2% 165 103 362 505 554 FY12 FY13 >100 +9.7% 1. Including Services & Holding, Engineering & Research, upstream gas and nuclear activities 80
Disclaimer This presentation contains certain forwardlooking statements that reflect the Company s management s current views with respect to future events and financial and operational performance of the Company and its subsidiaries. These forwardlooking statements are based on Enel S.p.A. s current expectations and projections about future events. Because these forwardlooking statements are subject to risks and uncertainties, actual future results or performance may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of Enel S.p.A. to control or estimate precisely, including changes in the regulatory environment, future market developments, fluctuations in the price and availability of fuel and other risks. You are cautioned not to place undue reliance on the forwardlooking statements contained herein, which are made only as of the date of this presentation. Enel S.p.A. does not undertake any obligation to publicly release any updates or revisions to any forwardlooking statements to reflect events or circumstances after the date of this presentation. This presentation does not constitute a recommendation regarding the securities of the Company. Pursuant to art. 154BIS, par. 2, of the Unified Financial Act of February 24, 1998, the executive in charge of preparing the corporate accounting documents at Enel, Luigi Ferraris, declares that the accounting information contained herein correspond to document results, books and accounting records. 81
Contact us Team (investor.relations@enel.com) Luca Torchia Head of IR Elisabetta Ghezzi IR Coordination and Outbound communication Marco Donati Inbound communication Matteo Cavadini Staff Federica Dori Staff Federica Todaro Staff +39 06 8305 3437 +39 06 8305 2708 +39 06 8305 9252 +39 06 8305 2326 +39 06 8305 7975 +39 06 8305 9502 Visit our website at: www.enel.com () 82