2007 Results And 2008 2012 Business Plan

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2007 Results And 2008 2012 Business Plan

  1. 1. Enel SpA Investor Relations 2007 Results 2008-2012 Plan “Consolidation, Growth and Financial Stability” London, March 13, 2008
  2. 2. Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Network – International – Iberia & Latin America • Questions and answers • Annexes 1
  3. 3. Enel SpA Investor Relations Opening remarks Consolidation, growth and financial stability 2008-2012 key figures (€bn) • Cash-flow from operations +63 • Net portfolio optimization +11/15 • Capex -37 • Financial charges -14 • Dividends -15 Stable dividend policy of 49€c/share 8/12€bn net debt reduction Net debt/EBITDA < 3X by 2012 2
  4. 4. Enel SpA Investor Relations Opening remarks Financial targets 2009 2012 • EBITDA • 13.8€bn • 16.6€bn – Italy – 6.9€bn – 7.0€bn – International – 6.9€bn – 9.6€bn • EPS1 • 62.3€c • 83.0€c EPS CAGR2 2007-2012: 10% Net debt 2012: 45-49€bn 1. Ordinary income only 2. On a like for like basis 3
  5. 5. Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Networks – International – Iberia & Latin America • Questions and answers • Annexes 4
  6. 6. Enel SpA 2007 results Investor Relations Financial highlights: consolidated €mn FY06 FY07 % Revenues 38,513 43,673 13.4 EBITDA 8,019 10,023 25.0 EBIT 5,8191 6,990 20.1 Group net income 3,036 3,977 31.0 Net debt 11,690 55,7912 - 1. Including capital gain raising from Wind-Weather share transaction for 263 €mn 2. Net of discontinued operations 5
  7. 7. Enel SpA 2007 results Investor Relations From EBIT to net income €mn FY06 FY07 % EBIT 5,8191 6,990 20.1 Net financial charges 651 902 38.6 Interest charges 577 1,390 - Financial income - (301) - Fair value of Acciona put option - (136) - Other 74 (51) - EBT 5,168 6,088 17.8 Income tax 2,067 2,002 (3.1) Net income (including third parties) 3,101 4,213 35.9 Group net income 3,036 3,977 31.0 EPS (€) 0.49 0.64 30.6 1. Including capital gain raising from Wind-Weather share transaction for 263 €mn 6
  8. 8. Enel SpA 2007 results Investor Relations EBITDA evolution (€mn) +2,004 +1,462 -308 10,023 +308 325 +384 8,019 +158 167 3.541 3.157 Market G&EM 3.726 I&N International S&H1 3.418 2.380 918 359 51 FY06 Market G&EM I&N International S&H1 FY07 1. Including intercompany adjustments 7
  9. 9. Enel SpA 2007 results Investor Relations EBITDA evolution: domestic market division (€mn) +158 +132 -82 325 +108 167 FY06 Regulated Free Other & FY07 market market non-recurring 8
  10. 10. Enel SpA 2007 results Investor Relations EBITDA evolution: domestic G&EM division (€mn) +384 +103 -47 3,541 +328 3,157 FY06 Generation Fair value Non- FY07 margin bilateral recurring contracts with SB 9
  11. 11. Enel SpA 2007 results Investor Relations Fuel cost evolution -5% 51.8 49.3 Average fuel cost (€/MWh) FY06 FY07 -2% -2% +17% 306.7 300.8 27.5 26.9 58.6 68.8 FY06 FY07 FY06 FY07 FY06 FY07 Oil (€/ton) Gas (c€/mc) Coal (€/ton) 10
  12. 12. Enel SpA 2007 results Investor Relations EBITDA evolution: domestic I&N division (€mn) +308 +332 +61 -85 3,726 3,418 3.750 3.726 3.418 FY06 Electricity Gas Non- FY07 recurring 11
  13. 13. Enel SpA 2007 results Investor Relations EBITDA evolution: international division (€mn) +1,462 +573 -15 2,380 +198 +9 680 +691 +6 16 587 Iberia 918 South-Eastern Europe (SEE) Centrel 186 107 Russia 7 Americas France & Belgium 389 926 180 235 -15 FY06 Iberia SEE Centrel Russia Americas France FY07 & Belgium 12
  14. 14. Enel SpA 2007 results Investor Relations EBITDA evolution: services & holding1 (€mn) -308 359 -240 -23 -45 51 FY06 Import Non- Other FY07 recurring 1. Including intercompany adjustments 13
  15. 15. Enel SpA 2007 results Investor Relations Focus on renewables1 Capacity (MW) Production (GWh) +18.5% Other Wind Geothermal +10.8% Mini-hydro 3,112 11,828 2,626 47 10,676 678 46 308 671 327 857 5,269 5,195 588 EBITDA evolution (€mn) 1,293 1,244 1321 1530 4,958 +11.0% 3,910 FY06 FY07 46 868 FY06 FY07 40 782 FY06 Italy Interna- FY07 tional 1. Excluding large hydro and Endesa 14
  16. 16. Enel SpA 2007 results Investor Relations Net debt evolution (€mn) +45,826 December Cash-flow Capex Extra- Net Taxes Dividends December 31, 2006 from ordinary financial 31, 2007 operations activities charges -5,2301 -11,690 +9,130 -43,4792 -1,390 -1,677 -3,180 -57,5163 1. Including 301€mn capital expenditure of Endesa Europa 2. Including net debt of acquisitions 15 3. Continuing operations: -55,791€mn; Discontinued operations: -1,725
  17. 17. Enel SpA 2007 results Investor Relations 2007 dividend (€c/share) 49 49 On the results of 2006 2007 16
  18. 18. Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Networks – International – Iberia & Latin America • Questions and answers • Annexes 17
  19. 19. Enel SpA 2008-2012 strategy Investor Relations Strategy overview March 2006 March 2007 Priorities for 2006-2010 Priorities for 2007-2011 • Retain market leadership in • Leadership in the domestic Italy in a liberalising market market • International growth through • International growth acquisitions • Operational excellence • Improve operational performance through investment program and efficiency • Environment and innovation A clear and consistent strategy 18
  20. 20. Enel SpA 2008-2012 strategy Investor Relations Strategic priorities ••Consolidation and value Consolidation and value enhancement of new acquisitions enhancement of new acquisitions An An ••Leadership in core markets Leadership in core markets integrated integrated international international ••Vertical integration Vertical integration energy energy group group ••Operational excellence Operational excellence ••Growth in renewables and nuclear Growth in renewables and nuclear Consolidation, growth and financial stability 19
  21. 21. Enel SpA 2008-2012 strategy Investor Relations Endesa update Overview • Leadership positions in Spain and Latin America • Close working relationship with Acciona • Strong earnings growth potential Spain • Investment in new capacity: CCGT generation increases 24% by 2012 • Cleaner, more balanced production mix • Opportunity to grow gas market share Latin America • Strong demand growth in liberalising markets • Need for new capacity 20
  22. 22. Enel SpA 2008-2012 strategy Investor Relations Russia update Highly attractive market • GDP growth • Liberalisation on track • Domestic market price increasing First vertically integrated presence in the sector • Upstream gas: 40% stake in SeverEnergya • Power generation: 59.8% stake in OGK-5 • Supply: 49.5% stake in RusEnergoSbyt Opportunity to improve existing capacity • 2.2€bn investment in the period 2008-2012 in generation and upstream gas Strong growth potential 21
  23. 23. Enel SpA 2008-2012 strategy Investor Relations Balanced activities 2012 EBITDA Group production mix Regulated and unregulated businesses 131.4 (TWh) 335.0 (TWh) 10.9% 20.3% 22.5% 35% 14.7% 65% 28.6% 29.1% 8.1% 10.0% 5.1% 5.4% 23.2% 22.1% 2006 2012 Generation & sales Oil & gas Coal Other renewables Networks CCGT Nuclear Hydro 22
  24. 24. Enel SpA 2008-2012 strategy Investor Relations Upstream & midstream gas integration Strategic lines 2007 achievements Further targets Participating in SeverEnergya • Opportunities in Upstream E&P projects identified target areas Developing GALSI • LNG terminal in Sicily Midstream transport, storage, development • Storage capacity and re-gasification capacity projects Gas supply Ensuring long- Additional gas • Gas supply for OGK-5 term gas supply supply from • Additional LNG supply Algeria • Supporting international growth Total 2008-2012 cumulated investment : 1€bn 23
  25. 25. Enel SpA 2008-2012 strategy Investor Relations Renewables (MW) North America Italy South-Eastern Europe Total capacity (MW) 2,781 Other 1,602 Geothermal 7,382 Wind 1,536 86 Mini-hydro 837 472 467 80 2007 2012 2007 2012 2007 2012 3,112 4,752 Latin America Iberia 47 France 678 1,131 857 897 664 504 1,707 360 1,530 2007 2012 2007 2012 2007 2012 2007 2012 Strong investment plan of 6.8€bn in total EBITDA CAGR 07-12: 12.4% 24
  26. 26. Enel SpA 2008-2012 strategy Investor Relations Nuclear Spain1,2 Slovakia2 Endesa’s nuclear Slovenske power plants 2,441MW Elektrarne’s nuclear power Technology Plants 2,050MW Westinghouse-PWR 1,000 MW Development of Mochovce units 3 & 4 France Technology Russian-PWR 440MW EPR agreement with EDF Anticipated nuclear Romania capacity Technology Participation in the Areva-PWR 1,600MW Cernavoda project for two 750MW units Technology CANDU 750MW Presence in leading technologies for nuclear generation 1. Endesa consolidated proportionally (67.05%) 2. 2007 figures 25
  27. 27. Enel SpA 2008-2012 strategy Investor Relations Investment plan (€mn) Maintenance Growth 37,244 8,043 8,526 8,025 7,002 3,479 5,648 16,038 3,050 3,928 2,855 2,727 5,047 4,975 21,206 4,115 4,147 2,921 2008 2009 2010 2011 2012 Cumulated 2008-2012 Cumulated investment in innovation: 0.6€bn Cumulated investment in renewables: 6.8€bn1 1. Excluding large hydro and Endesa 26
  28. 28. Enel SpA 2008-2012 strategy Investor Relations Portfolio optimization Expected completion 2008 • Disposal to EON • Disposal to EON Estimated value • Non-strategic networks 2008 • Non-strategic networks 11/15 €bn • Renewable business • Renewable business 2009 • Potential add-on • Potential add-on investments investments 2012 A wide range of assets available for optimization 27
  29. 29. Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Networks – International – Iberia & Latin America • Questions and answers • Annexes 28
  30. 30. Enel SpA 2008-2012 plan - Domestic Market Investor Relations Strategic priorities ••Consolidation and value Consolidation and value enhancement of new acquisitions enhancement of new acquisitions ••Leadership in core markets Leadership in core markets • Leadership in the free energy • Leadership in the free energy market market • Group margin protection • Group margin protection ••Vertical integration Vertical integration • Excellence in customer service • Excellence in customer service • Innovation • Innovation ••Operational excellence Operational excellence ••Growth in renewables and nuclear Growth in renewables and nuclear 29
  31. 31. Enel SpA 2008-2012 plan - Domestic Market Investor Relations 2006-2012 electricity free market1 evolution (TWh) +1.9% 377 Key market drivers 358 337 340 45 Self-consumption 44 • Full market opening as from 40 43 July 2007 and losses 54 Captive market 62 89 • Capability to reach and manage multi-million client Eligible market 81 124 portfolio 278 • Dual Energy and renewable 225 energy Free market 154 173 2006 2007 2009 2012 Enel the main driver of growth in the free market 1. Source: Enel’s estimates 30
  32. 32. Enel SpA 2008-2012 plan - Domestic Market Investor Relations Electricity market evolution 2006-20121 Electricity consumption (TWh) Number of customers (mn) 332 37.6 297 314 35.4 35.7 36.1 297 54 ~16% 62 89 ~28% ~48% 124 ~41% 18.6 ~50% 81 27.4 26.3 ~73% ~99% 33.0 ~92% 278 225 154 173 19.0 7.3 0.7 9.8 2.7 -40 -43 -44 -45 2006 2007 2009 2012 2006 2007 2009 2012 Eligible market Captive market Free market Self consumption and losses 1. Source: 2006 volumes = Terna; 2006 customers = AEEG; 2007-2012 volumes and customers = Enel’s estimates 31
  33. 33. Enel SpA 2008-2012 plan - Domestic Market Investor Relations 2007-2012 gas market evolution1,2 (bcm) 53.2 55.1 50.8 1.2 Other uses 1.2 2.1 30.5 31.5 Residential 28.0 market Industrial 20.7 21.5 22.4 market 2007 2009 2012 Renewed interest in dual energy 1. Excluding gas burnt for thermal generation 2. Source: Ministry of Economic Development and Enel’s estimates 32
  34. 34. Enel SpA 2008-2012 plan - Domestic Market Investor Relations Enel’s targets in 2012 Electricity free market1 (TWh) Electricity regulated market (TWh) Gas (bcm) Market share22 Market share22 Market share22 Market share Market share Market share 20.8% 32.8% 82.2% 61.0% 9.6% 16.6% 20.8% 32.8% 82.2% 61.0% 9.6% 16.6% Retail & Business 97.1 Energy intensive 102 9.2 72.2 7.2 81.8 61 4.9 42.2 56.9 33 28.6 13.6 15.3 15.3 2007 2009 2012 2007 2009 2012 2007 2009 2012 • Strong increase in SME and • Volume decline in line with Enel’s • Selection of market segment residential portfolio increase on the free market consistent with strategy in power market • Reduced sales to Single Buyer • Dual energy offer sustains • Excellence in service quality customer retention Fast selective growth of customer base 1. Including technical losses 2. Enel’s estimates 33
  35. 35. Enel SpA 2008-2012 plan - Domestic Market Investor Relations Enel’s domestic targets in 2012: electricity free market1 14.1 Gas, electric and Dual Energy customers on the free market (mn) 8.7 97.1 (TWh) 4.5 72.2 (TWh) 22.6 9.5 Residential 42.2 (TWh) 40.4 52.2 Large businesses (1-100GWh/ year) 0.1 19.9 Micro & medium businesses (<1GWh/year) 8.6 7.0 7.0 Energy intensive (>100GWh/ year) 13.6 15.3 15.3 2007 2009 2012 Strong penetration in SME and retail segments Targeting 14mn customers 1. Including technical losses 34
  36. 36. Enel SpA 2008-2012 plan - Domestic Market Investor Relations Enel forward selling 2007-20101 TWh 2007 2008 2009 2010 Residential 0.1 2.6 2.5 2.4 Business and 19.9 31.0 30.2 28.7 microbusiness Industrial 13.5 15.3 14.7 0.7 Large customers 8.6 8.6 5.8 - Salvaguardia2 7.7 11.8 - - TOTAL SALES 49.8 69.3 53.2 31.8 1. Including technical losses~8%; churn 5% per year; Total portfolio as of 22 February 2008; 2. Salvaguardia 2007: energy traded between Enel Trade and Enel Distribuzione (August-December 2007) 35
  37. 37. Enel SpA 2008-2012 plan - Domestic Market Investor Relations Growth in photovoltaic solar energy through Enel.Si PV evolution (MWp) 210 Main drivers 128 PV direct • Partnership with world leaders in PV indirect PV production and supply 46 • Strong incentive schemes • Large diffusion on final customers 17 28 82 13 4 18 2007 2009 2012 Market Share 34% 40% 42% Leadership in Photovoltaic Market 36 Source: Enel’s estimates.
  38. 38. Enel SpA 2008-2012 plan - Domestic Market Investor Relations Cost-to-serve and customer satisfaction of the free energy market Cost to serve (€/customer) Customer satisfaction (1-10) Personnel costs External costs 46 9 50 10 45 8 9 40 9 8 35 7 31 7 30 23 6 25 6 5 3 37 20 4 15 3 10 25 2 20 5 1 0 0 2007 2009 2012 Strong focus on cost-to-serve reduction whilst improving customer satisfaction to best-in-class level 37
  39. 39. Enel SpA 2008-2012 plan - Domestic Market Investor Relations Acquisition costs in the free energy market Free energy customers (mn) Acquisition cost (€/customer) 16 50 50 14.1 45 14 40 12 32 35 10 30 8 29 25 8.7 20 6 4.5 15 4 10 2 5 0 0 2007 2009 2012 Efficient use of acquisition channels 38
  40. 40. Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Networks – International – Iberia & Latin America • Questions and answers • Annexes 39
  41. 41. Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Strategic priorities ••Consolidation and value Consolidation and value enhancement of new acquisitions enhancement of new acquisitions ••Leadership in core markets Leadership in core markets • Investment plan and • Investment plan and operational excellence operational excellence ••Vertical integration Vertical integration • Sustained profits • Sustained profits • Innovation • Innovation ••Operational excellence Operational excellence ••Growth in renewables and nuclear Growth in renewables and nuclear 40
  42. 42. Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Market scenario Italian energy mix1 (2007) Additional CCGT capacity (GW) Repowering Greenfield 3.4 10.6 0.4 48% 2.3 3.0 4.1 14% 1.1 18% 3.0 20% 3.1 8.3 0.8 2.3 CCGT Oil & Gas ST/OCGT 2007 2008 2009-2010 Target (under Renewables Coal construction) Dominant role of CCGT technology Power prices driven by gas/oil prices Source: Enel’s estimates 41
  43. 43. Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Development of the generation mix CCGT conversion Clean coal conversion Renewables development <1% • Oil & gas ST/OCGT: ancillary 17.0% 20.0% services market, price spikes, export opportunities 45.0% 24.0% • CCGT conversion program completed: mid merit technology 50.0% 9.0% 30.0% • Torre Nord 1st unit in operation in 22.0% 2008: increase in base load production 24.0% 29.0% 30.0% • Increasing renewable energy development 2002 2007 Target Coal Oil & gas Renewables CCGT Re-powering program on track 42
  44. 44. Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Torre Nord development 1st unit DeSOx completion 1st dome coal handling system completion 1st unit in operation in 2008, 2nd and 3rd in 2009 2 GW @ 45% thermal efficiency 43
  45. 45. Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Growth in renewables (€mn) Investments (€bn) Additional installed capacity (GW) 3.3 Maintenance Growth 0.6 1.4 1.6 0.6 2.7 0.4 1.0 2007-2011 2008-2012 2007-2011 2008-2012 Plan Plan Plan Plan Positive regulatory framework Wide portfolio of projects with high return on investment ~1.4 GW of new installed capacity by 2012 44
  46. 46. Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Innovation • Enhanced efficiency power plants • Carbon capture and storage technologies • >400€mn investment in 5 years for pilot and demonstration projects Building the long term fossil fuel power plant sustainability • Advanced photovoltaic solutions • Concentrated thermodynamic solar • Geothermal • 150€mn investment in 5 years for Innovation for innovative projects renewables Zero emission plants by 2020 is not a dream, but a realistic objective 45
  47. 47. Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations CO2 Variable costs1 (€/MWh) Enel’s balance 2008-2012 (mton CO2e) CO2 costs Variable costs 73 8 53 40÷45 17 65 36 Expected Clean coal CCGT Allocations Shortage emissions Clean coal strongly competitive even with very high CO2 prices 2008÷2012 CO2 position already hedged 46 1. Based on forward Brent = 86.5 $/bbl; API2 = 100.3$/ton; CO2 = 22€/ton; €/$ = 1.44
  48. 48. Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations CO2 Emissions Trading Scheme: 2008-2012 CERs – Existing projects portfolio (Mton) 19 75 ~35 • Among top carbon market players 56 • Competitive sourcing; mark to market portfolio >500€mn ~40 • Robust portfolio (75% of expected CERs without any approval/implementation risk) • Day-by-day portfolio management to minimize carbon exposure • Post 2012: Enel’s generation fleet hedged vs CO2 prices Registered & To be Expected Direct Traded on implemented registered use for secondary & implemented compliance market 47
  49. 49. Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Coal and shipping sourcing strategy Coverage of sourcing needs (%) Coal sourcing diversification Coal Shipping South Africa ~100 80 70 Colombia 50 Russia Indonesia USA 2008 2009 2008 2009 Total portfolio – Mark to market > €1 bn Major portion of mid term needs secured Geographical diversification of coal sources Flexible and competitive shipping sourcing 48
  50. 50. Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Power sales & trading Sales coverage (%) Trading deals in European power markets (TWh) ~300 100 ~140 >50 ~80 2008 2009 2006 2007 2008 Strong protection of Increasing business generation margins opportunities 49
  51. 51. Enel SpA 2008-2012 plan - Domestic Generation and Energy Management Investor Relations Targets 2008-2012 Enel additional installed capacity (GW) 2008-2012 total capex = 6€bn 1.9 Maintenance Coal 20% Growth Renewables 1.4 80% • Thermal production • Thermal variable cost • Renewables production 50
  52. 52. Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Networks – International – Iberia & Latin America • Questions and answers • Annexes 51
  53. 53. Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Strategic priorities ••Consolidation and value Consolidation and value enhancement of new acquisitions enhancement of new acquisitions ••Leadership in core markets Leadership in core markets • Cost leadership • Cost leadership • Operational excellence • Operational excellence ••Vertical integration Vertical integration • Growth in gas distribution • Growth in gas distribution • Innovation • Innovation ••Operational excellence Operational excellence ••Growth in renewables and nuclear Growth in renewables and nuclear 52
  54. 54. Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Evolution of Enel electricity and gas distribution Electricity distributed (TWh) Gas distributed (bcm) Market share11 80% 80% Market share22 11% 16% Market share 80% 80% Market share 11% 16% 282 5.0 4.1 3.7 3.5 268 255 256 2006 2007 2009 2012 2006 2007 2009 2012 2007-2012 CAGR 2007-2012 CAGR +2.0% +7.4% 32 million end-users 2.9 million end-users connected connected by 2012 by 2012 1. Net of network losses, including self-generation 53 2. Not including gas for generation units
  55. 55. Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Cost leadership and operational excellence Opex (€/customer) 80 2001 (128 min ; 80 €/customer) 2002 2003 60 2004 2005 2006 2007 (49 min ; 50 €/customer) 40 Quality of service (min interruption/year) 130 80 30 930€mn yearly opex savings vs 2001 54
  56. 56. Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Network commercial operations Switching to the free market Commercial quality of service End users on the free market (thousands) # of customer request (mn) Quality index (%) 3.9 +58% 3.8 1,870 98.2 98.3 1,180 June 2007 Dec 2007 2006 2007 Market liberalization supports steady improvement of commercial quality index 55
  57. 57. Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations 2008-2012 electricity tariff revenues (€mn) Depreciation Return on RAB 4,850 4,860 Opex Regulated commercial activities 510 Distribution and 680 24% metering 32% 44% 4,340 4,180 2007 2008 2004-2007 2008-2012 RAB1 ~20€bn ~22€bn WACC2 7.0% 7.0% 3.5% 2.2%3 X-factor 1.4%4 1.Beginning of period, including commercial activities 2.Real pre-tax 56 3.Applied only to opex and resulting from the weighted average of 1.9% (distribution) and 5.0% (metering)
  58. 58. Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Ongoing operational excellence projects Pegaso “Lean Six Sigma” Pegaso “Lean Six Sigma” Power and gas integration Work force management Power and gas integration Work force management ••Continuous improvement Continuous improvement ••Staff and activity ••5,300 equipped vehicles Staff and activity 5,300 equipped vehicles ••Waste and variability integration integration in 2008 in 2008 Waste and variability reduction reduction ••Synergies in IT systems ••Field activity Synergies in IT systems Field activity ••Focus on value-added optimization optimization Focus on value-added ••Increase in insourcing Increase in insourcing activities activities ••Paperless operations Paperless operations Additional 200€mn opex savings from 2009 vs 2006 57
  59. 59. Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Quality of service 183 140 80 50 Min. interruption/customer Quality premia 49 44 42 41 2007 2009 2011 2012 430€mn quality premia in 2008-2012 58
  60. 60. Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Growth in gas distribution End-users (thousands) +7.5% 2,920 2,270 • Drivers for growth: 2,032 – network extension – bid for new concessions • More than 4,000 concessions expiring in 2009 in the Italian market 2007 2009 2012 Increase of margins through business development, cost reduction and power and gas synergies 59
  61. 61. Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Innovation Electronic metering for electricity and gas Smart Grids • Exploitation of remote • Integration and management of gas meters management of renewables • Development of a multi- • Local energy dispatching metering infrastructure • Self-fixing grids 210 mn remote readings Co-funded EU Framework >10 mn operations in 2008 Program 7 project 60
  62. 62. Enel SpA 2008-2012 plan - Domestic Infrastructure & Networks Investor Relations Targets Electric network opex 2008-2012 total capex = 6.8€bn 6.7 5.9 5.7 5.4 EU 9% average 80 24% 55 51% 50 50 48 16% UK average 50 2006 2007 2009 2012 €/MWh Gas - Mandatory €/customer Electricity - Mandatory Electricity – Quality of service Electricity – Connections1 Delivery of strong EBITDA results over the period 2008-12 1.Average customer contribution: 90% 61
  63. 63. Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Network – International – Iberia & Latin America • Questions and answers • Annexes 62
  64. 64. Enel SpA International Investor Relations Strategic priorities ••Consolidation and value Consolidation and value enhancement of new acquisitions enhancement of new acquisitions ••Leadership in core markets Leadership in core markets • Consolidation of international • Consolidation of international presence presence – organic growth – organic growth ••Vertical integration Vertical integration – efficiency and integration – efficiency and integration • Development of new • Development of new ••Operational excellence initiatives initiatives Operational excellence • Innovation • Innovation ••Growth in renewables and nuclear Growth in renewables and nuclear 63
  65. 65. Enel SpA International Investor Relations Enel’s current positioning ex Endesa South-Eastern Europe France & Belgium Bulgaria EPR nuclear project Inst. cap. 660MW Net prod. 3.5TWh Wholesale supplier Romania of electricity 1.8TWh Distr. network 53,227km EE distributed 7.3TWh Renewables 500MW Customers 1.4mn (pipeline) Market share ~11% (supply) Market share ~15% North America (distribution) Focus on renewables Greece 447MW CCGT under Inst. Cap. 472MW development Net prod. 1.2TWh Russia Centrel Inst. Cap. 80MW Net prod. 53GWh Inst. cap. 8.7GW Slovakia Net prod. 36TWh Inst. cap. 5.6GW Sales 35TWh Net prod. 21.5TWh Gas production 28bcm/y (from 2016) Figures as of 2007 64
  66. 66. Enel SpA International - Russia Investor Relations Market outlook Electricity demand growth (TWh) Increasing dark spread 1,200 2.5 Gas Fuel price index 1,100 2.0 Coal 1,000 1.5 CAGR: 2.5% 900 1.0 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 • Huge market with dramatic growth potential • Undergoing liberalization and privatization process in line with expected schedule • Opportunity to improve existing capacity • Coal assets in gas-fired regions will benefit most from deregulation 65
  67. 67. Enel SpA Investor Relations International - Russia Enel the first vertically integrated energy operator1 SeverEnergya OGK-5 RusEnergoSbyt Upstream gas Power generation Supply o 40% of a JV with ENI 59.8% of OGK-5 49.5% of RusEnergoSbyt 20% from 2009 (Gazprom call option) • At full production, 40%-50% of • 8.7 GW gross capacity, with • A unique opportunity to OGK-5 demand balanced mix (50% gas and 50% participate in the supply coal) sector • Gas reserves: 700 bcm • 36 TWh generated in 2007, with • 35TWh sold in 2007 • Full production: 28bcm/y (2016) 100% exposure to Western Russia and Urals • Strong regional reach with • Partnership with E&P leading 25 offices and 7 branches companies in a world wide project • EBITDA: 99 €mn • Customers (#): 249,000 • Value of gas reserves in a tight • Headcount (#): 4,287 domestic market • Headcount (#): ~900 Early mover advantage and reduced risks in a huge, liberalizing market 66 1.RES figures refer to 100%
  68. 68. Enel SpA International - Russia Investor Relations Overview of OGK-5 assets1 2008-2012 Additional capacity: 723 MW CAPEX: 1.5 €bn Production: from 38 to 51 TWh Tver Region Sverdlovsk Region Konakovskaya GRES • Installed capacity 2.4GW Sredneuralskaya GRES • Fuel gas • Installed capacity 1.2GW • Production 8.2TWh • Fuel gas • Production 6.8TWh Moscow ● Stavropol Region Sverdlovsk Region Nevinnomysskaya GRES Reftinskaya GRES • Installed capacity 1.3GW • Installed capacity 3.8GW • Fuel gas • Fuel coal • Production 5.9TWh • Production 15.5TWh Enel owns 59.8% of OGK-5 OGK-5 assets include the largest Russian coal plant 1. Figures as of 2007 67
  69. 69. Enel SpA Investor Relations International - Centrel Market outlook Interconnection flows Market fundamentals Nordel System • Demand growth rate: 1.6% CAGR 2007-2012 1.2 TWh Russia • Market prices converging to German ones, Europe’s largest and most liquid market Poland • High interconnection capacity 5.1 TWh Czech Republic 16.3 TWh • Very low reserve margin after shut-down of old plants; need Slovakia for additional capacity Germany Hungary Slovenské Elektrárne 5.6 TWh South Eastern • Capacity (GW) 5.6 • EBITDA 2007 (€mn) 580 Europe • Production (TWh) 21.5 • Headcount (#) 6,408 Slovakia - Electricity demand growth (TWh) • 2008-2012 CAPEX (€bn) 1.9 30 Strategic targets • Expansion of nuclear capacity 29 • Hedging generation through long-term selling contracts 28 • Strengthening our leadership: organic growth and efficiency 27 plan CAGR: 1.6% 26 25 Figures as of 2007 68 2007 2008 2009 2010 2011 2012
  70. 70. Enel SpA Investor Relations International – South Eastern Europe Market outlook Centrel 5,6 TWh Market fundamentals • Liberalization, GDP and electricity demand growth Slovenia Romania Croazia • Progressive entry into the EU perimeter Bosnia & Serbia HerzegovinaKosovo Italy 5.6 TWh Montenegro • Strong need for investments in new capacity (10GW) Bulgaria and interconnections Macedonia Strategic targets Albania1 Greece • Growth in renewables (Romania, Greece) • One import coal or lignite power plant plus one CCGT Electricity demand growth (TWh) Romania 60 Greece - CAGR: 2.6% • Integration of Muntenia Sud 50 Romania - CAGR: 2.1% • Hedging of retail position through generation assets (coal and nuclear) and replicate Enel’s vertically integrated business model 40 • Renewables: 175 MW of wind (Blue Line) Bulgaria - CAGR: 1.8% in 2010 30 2007 2008 2009 2010 2011 2012 Figures as of 2007 69
  71. 71. Enel SpA Investor Relations International – France and Belgium Market outlook Market fundamentals • Appealing market fundamentals • Developed and increasingly liquid pools • High level of interconnection with rest of Europe • Clear regulatory framework Enel France1 • Sales (TWh) 1.8 • Anticipated capacity (MW) 200 France - Electricity demand growth (TWh) Strategic targets 520 France 510 • CCGT and coal power plants 500 • Renewables: Enel Erelis (504 MW pipeline of wind generation projects) 490 • EPR Nuclear participation: Flamanville 3 480 CAGR: 1.6% 470 Belgium • Partnership with Duferco for a thermal plant 460 (CCGT - 410MW) 2007 2008 2009 2010 2011 2012 Figures as of 2007 70
  72. 72. Enel SpA Investor Relations International – North America Market outlook Market fundamentals • Appealing market fundamentals • Clear regulatory framework • Wind market growing at double digit annual rates Enel North America (Renewables) • Capacity (MW) 472 • Production (TWh) 1.2 • EBITDA (€mn) 30 Net installed capacity (MW) • Headcount (#) 224 472 21 7 Strategic targets 130 • 1,130 MW of additional generation capacity, of Biomass which: Geothermal Wind 314 – 59MW geothermal Mini-hydro – 1,071MW wind Figures as of 2007 71
  73. 73. Enel SpA Investor Relations International Financial targets (€mn) Russia Other Centrel SE Europe EBITDA (€mn) Capex (€mn) Capacity (MW) 2008-2012: 8.2€bn 2,662 2,231 18,531 226 15,383 2,516 438 970 1,219 661 1,427 1,048 8,943 8,220 797 109 6,766 380 320 454 569 472 16 15 306 589 661 898 1,699 186 276 3 280 763 305 5,633 5,295 5,373 580 633 174 563 132 147 2007 2009 2012 2007 2009 2012 2007 2009 2012 Cash generation through strong financial performances 72
  74. 74. Enel SpA Investor Relations Agenda • Opening remarks • 2007 results • 2008-2012 strategy • 2008-2012 plan – Domestic Market – Domestic Generation & Energy Management – Domestic Infrastructure & Network – International – Iberia & Latin America • Questions and answers • Annexes 73
  75. 75. Enel SpA Investor Relations Iberia & Latin America Strategic priorities ••Consolidation and value Consolidation and value • Solid relationship with • Solid relationship with enhancement of new acquisitions enhancement of new acquisitions Acciona to capture strong Acciona to capture strong potential growth of Endesa potential growth of Endesa ••Leadership in core markets • Reinforce leadership • Reinforce leadership Leadership in core markets positions in Spain and Latin positions in Spain and Latin America America ••Vertical integration • Integration sales/generation • Integration sales/generation Vertical integration and cooperation Enel/Endesa and cooperation Enel/Endesa in fuel sourcing in fuel sourcing • Implement enhanced synergy • Implement enhanced synergy ••Operational excellence Operational excellence plan including establishment plan including establishment of best practices of best practices ••Growth in renewables and • Strong focus on renewables • Strong focus on renewables Growth in renewables and nuclear nuclear 74
  76. 76. Enel SpA Investor Relations Iberia & Latin America – Spain and Portugal Strong market fundamentals Mainland peak demand growth (MW) and Energy demand growth (TWh) reserve margin trend Peninsular CAGR: 3.8% Extra peninsular CAGR: 3.6% 303 CAGR 53.5 267 276 251 19 15 16 5.1% 15 49.6 48.1 252 260 284 44.9 236 3.8% 2007 2008 2009 2012 2007 2008 2009 2012 Pool price evolution1 (€/MWh) Reserve margin 1.15 1.12 1.10 1.11 62.0 59.4 57.9 60.0 Market main features • Towards full market liberalization High case • Increase in renewable and CCGT capacity 42.9 Low case • Decrease in gas/oil and coal 2007 2008 2009 2012 1. Capacity payment not included 75
  77. 77. Enel SpA Investor Relations Iberia & Latin America – Spain and Portugal Regulatory framework in evolution Key issues Main features Implications • 100% of customers are eligible Remain the leading player • Gradual cancellation of regulated tariff: in the liberalized market Full market – June 2008: HV clients liberalization – January 2009: MV clients – January 2011: LV clients > 15KW • ‘Last resort’ model with recognition of real cost of energy • Law proposal will be debated in the Spanigh Parliament Common industry position • Still to be translated into norms CO2 decree Electrical • Presently: individual remuneration for each distributor Positive framework for: with (i) specific efficiency factor and (ii) recognition of • new investments distribution specific demand increase • losses reduction remuneration • RAB model regulation approved • quality improvement model • Time schedule and process established to implement the digital metering system nationwide • Availability Remuneration needs to Capacity • New capacity increase in order to payment • Investment in desulphurization properly support new scheme capacity 76

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