ENE

EL GROU
UP 2015 – 2019 S
STRATEG
GIC PLAN PRESE
ENTATIO
ON
Opeerational effficiency and industrrial growth
h are expeected to ddeliver solid
d EBITDA A
wth and ca
grow ash flow generation,
g , to underrpin an inc
creasing ddividend drriving totall
sharreholder re
eturn.

• 8
8% Cash Cost re eduction in nomin nal terms s over thhe plan, optimising
g
M
Maintenancce Capex and
a Opex aacross the global bus
siness linees.

• In
ndustrial grrowth boos
sted by 188 billion euros of Growth
G Cap pex over the
t period,
6 billion eu
uros more than prevvious plan: focus on Networkss (organic growth in n
L
Latin Ameriica and deep digital ttransforma
ation in all geographie
g es), on Re
enewabless
(5
50% additiional capacity growthh added ve ersus prevvious plan) and non--merchantt
g
generation n and Retaail (customeer base grrowth and new
n servicces).

• A
Active porrtfolio mannagementt: cash neu utral 5 billion euro prrogram of capital re--
cy
cycling ove
er the perio
od, driving g net income accrretion of aaround 20 00 million n
e
euros by 2019
2 net off disposalls.

• N
New divide end policcy: payoutt ratio of 50%
5 in 20
015, growinng by 5 percentage
p e
p
points each
h year to 65
5% in 2018
8.

• EEnel Grouup’s new strategicc plan le everages on thee Group’’s recentt

rreorganiza
ation and its
i legacy strengths and estabblishes a nnew very sustainable
e
aand more flexible
fl growth phase
e of the bus
siness over the next five years.

Grouup Financial Targets  
201
15    2016
6    2017     CAGR 15‐19 
Recu
urring Ebitda  €€bn  ~15.0  ~15.0
0  ~15.6  ~3
3% 
Ordinary Income 
Net O €€bn  ~3.0  ~3.1 ~3.4  ~10% 
Minimum DPS  €/s
/share  0.16  0.18  ~17% 
Pay‐out  %  50
0  55 60 
FFO//Net debt  %  21
1  24 27  ~9
9% 
 
 
Enel SpA – Registered Office: 00198 Ro
ome – Italy - Vialee Regina Margherrita 137 – Companies Register of R
Rome and Tax I.D
D. 00811720580 -
R.E.A. 756032 – VAT Co
ode 00934061003 – Stock Capital E
Euro 9,403,357,79
95 fully paid-in

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5
 
 
 
Oth
her financialss            
2015‐19      
Grosss Capex  €€bn  34.0 
Fund
ds from Operrations  €€bn  ~49.5 
Free  Cash Flow  €€bn  ~15.5 
Net FFree Cash Flo ow   €€bn  ~1.5 
(afterr dividends) 

Londdon, 19 Marrch 2015 - The T Enel Gro oup is preseenting today in London itts 2015 - 20 019 strategicc
plan tto the financcial markets. This is the GGroup’s first strategic pla
an presentatiion under the leadership
p
of Ch
hief Executive e Officer Fra
ancesco Stara race since hiss appointment last year.

The ffive year pla

an has a stro
ong focus on n total shareh
holder returnn, leveragingg three core strengths off
the G
Group:
 Enel Group geograph hical and tecchnological diversification
d n with a stroong position in emergingg
markets and
a leadersh hip in the are
eas of immineent technologgical evolutioon in mature markets.

 A reorgan
nized Group structure, c haracterized
d by simplicity and focus,, designed specifically to
o
address the
t challengees posed by the evolving g power indus stry dynamiccs.

 Operationnal efficiency
y and optim
mized capital allocation, driving induustrial growth
h and value
e
creation.

Thesse three keyy elements of the Enell investment case lay the
t foundati
tions for the
e 2015-2019
9
strate
egic plan, which
w is aim
med at drivin
ng cash flow
w generatio
on to underp
pin a growinng dividend
d
to sh
hareholders..

Franc cesco Stara ace, Enel’s Chief

C Executtive Officer, commented:: “The plan w we are presenting todayy
offerss a compellinng investmen nt case. Ourr strategy is built
b upon En nel's core strrengths - ourr established
d
positiion in emerg ging markets s and our lea adership in technology and
a digital ddistribution grids in more e
mature markets. These strengths will allo ow us to take e advantage of demand growth in La atin Americaa
and A Africa drivenn by demogrraphic trendss and econo omic cycles, as well as rapidly evollving energyy
markket dynamicss, such as digitization,
d in
n mature ec conomies. Th hese factorss, coupled with
w our new w
simpllified organizzational struc
cture, will suppport cost reduction, indu
ustrial growthh and higherr returns with
h
lowerr risk, deliveering stable EBITDA an nd cash flow w growth. OnO this basis is we are committed to o
increaasing our divvidend up to a payout rattio of 65% in n 2018, on increased earn rnings. This is
s a period off

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signifficant change in our indu
ustry, which offers new and exciting
g opportunitie
ies for a group of Enel'ss
strength and breaadth."

MACRO-ECONO
OMIC AND ENERGY MA
ARKET TREN
NDS

The s
strategic pla n developed on the basis of an analysis of the following trrends:
an has been

1. Increase in power dema and in Latin A

America and Africa mostlly due to dem mographics: acceleratingg
urbanization as well ass wealth creaation is offerring opportun
nities to drivee organic grrowth acrosss
hain in those
the value ch e markets.

2. Transformation of the energy systtems in mature power markets tow wards full digitization iss
opening up new revenu ue opportuni ties in areas
s of Enel Group’s naturaal competitiv
ve strengths.
Digital mete
ers, historica
ally an area i n which Ene
el has been the undisputted pioneer and
a industryy
leader, are the buildingg block of thhe digital ne
etwork challe
enge. Maturee markets will
w remain a
vibrant area
a of value crreation for th
hose playerss able to innovate and ccapture the opportunities
o s
offered by te
echnologicall evolution.

Enel Group is we ell positioned

d to leverag e these dev velopments, thanks to itss leadership and unique e
capabbilities in dig
gital metering
g and smartt grids, its sttrong presennce across tthe value ch
hain in all itss
markets, its 61 million
m end-ussers, and its strategic po
ositioning and
d establishedd presence in promising g
growtth markets ofo Latin Amerrica and Africca.

FOU
UR KEY PILLARS OF ENEL ST
TRATEGY
Y
1. OPERATION
NAL EFFICIENCY

The n new strategicc plan envisaages operatio cy improvement to the tu ne of an 8% reduction in

onal efficienc n
nomin nal terms in n “cash costss” - the summ of opex and maintena ance capex. By leveraging the new w
organ nizational sttructure and improved g global integ
gration, Enel Group willl drive technology bestt
practices to optim mize capital allocation
a aw
way from ma aintenance capex, with a careful redu uction of 1.5
5
billion
n euros versus the previo ous plan. As has been se een at the Group’s
G Reneewables Business Unit in n
recen nt years, thiss planned red
duction in maaintenance capex
c will lea
ad to a correelated reduction in opex,
which h together with
w procurem ment and tecchnological leevers, will allow the Grouup to reducee its opex byy
7% between 2014 4-2019.

2. INDUSTRIA
AL GROWTH
H

The p
plan envisages growth in EBITDAA by 2.4 billio
on euros by
y 2019, or aan additiona
al 6.7 billion
n
euros
s of EBITDAA cumulativ
vely over th
he plan period. This gro
owth will be driven by a capex plan n

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whichh envisages Gross Cape ex for the pe
eriod of 34.0 os, up from 229.7 1billion euros in the
0 billion euro e
previo
ous plan, an
n increase off 14%; and tthe shift of capital
c expennditure towarrds growth innitiatives, willl
bring about addittional Growtth Capex off around 6 billion
b euros
s, an increasse of 49% compared with h
the p
previous cappex plan. Almost 90% of the new w Growth Capex
C will b
be devoted d to driving g
revennue growth in low risk businesses s, such as ne etworks, reneewables, nonn-merchant conventional
c l
generation and re
etail, targeting average p roject returns higher thann a minimum m spread of 200
2 bps overr
the W
Weighted Avverage Cost of Capital (W WACC). Aro ound 60% of o total cap pex will be invested in n
emerrging marke ets.

Addittionally, by pursuing a larrger numberr of smaller projects

p in diffferent regionns and technnologies, thee
Group will reduce e execution risk, enjoy gre
eater flexibiliity and optionality as wel l as an ability
y to adapt to
o
chang ging scenariios and evollving countryy, currency or o regulatory y risk profilees. This is expected
e to
o
trans
slate into mo ore linear EBBITDA grow wth going fo orward.

Spec
cifically by business,
b grrowth driverrs are as follows:

• Networks – Global Distribution

D accounts for around 7 billion
a b euros of EBITDA and runs a
customer base
b of 61 million
m end-u
users. The Group
G plans to invest aroound 5.4 billion euros off
Growth Ca apex across the period i n the network business, driving orgaanic growth in emerging g
countries and
a new tecchnological ssolutions, such as digitall meters andd smart grids s, across alll
geographiees. Linear as
s well as preddictable cash
h flows can be
b secured tthrough stable regulatoryy
frameworkks with long te
erm concesssion regimes s in the counttries in whichh the Group operates.
o

• Retail – Growth
G in rettail is mostlyy driven by customer ba ase increasee and innova ation of new
w
product an nd service offferings. The Group targe ets an increa
ase in free m
market customers in Italyy
and Iberiaa to 26 millio on by 2019 , up from around
a 22 million
m in 20 14. New en nergy-related
d
services are expected to deliver d double digit growth
g over the plan peeriod, also driven by EUU
legislation on energy efficiency.

• Renewables – Enel Green

G Powerr (“EGP”) is best position ned to continnue leveragin
ng on globall
growth proospects thanks to its diveersified mix of technolog
gies and geoographies. Th he new plan
n
envisages a 50% incre ease in the to
total addition
nal capacity (reaching
( 7.11 GW) to be added overr
the five ye
ear period versus
v the p
previous plan n, mostly in Latin Amerrica, North America
A and
d
Africa. Appproximately half of the iinvestments of EGP for the period aaimed at growth will be e
deployed in Chile, Mexico and Bra azil, countrie
es where EGGP already hhas 30% of the planned d
additional capacity
c und
der executionn.

• Conventio onal Genera ation – The growth strattegy in conventional genneration is based on the e
principle of
o being the lowest-cost g generator in attractive re
egions with sstrong growtth prospectss
and low re egulatory ris
sk. Priority w
will be given to projects with low exxecution riskk and higherr

1
Equaates to 25.7 billion euros Ne
et Capex, as i n the previous
s business pla
an presentationn. It also inclu
udes
perimeter effects. The
T difference between Grosss and Net Ca apex is accounnted for by coonnection fees.

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 levels of stakeholders
s acceptancee, and to this extent the
e Group is aalso running a complete
e
review of its project pipeline.
p Noo merchant exposure will be taken in the development off
projects so
o as to mitiga
ate the expossure to comm
modity price fluctuations.
f

3. ACTIVE PO
ORTFOLIO MANAGEMEN
M NT

The GGroup has placed all ass sets under a review to ide entify those that may be appropriate for potentiall
divesstiture, assesssed against criteria of an h the Group’’s strategic plan.
n optimal strategic fit with p Alreadyy
under execution is i approxima ately 2 billion
n euros worth h of disposals, while an aadditional 3 billion euross
of dissposals are expected to o be realized d during the plan period. In this wayy, the Group p expects to o
recyccle up to 5 billion euros of
o capital, red deploying it towards the reorganizatiion of its Lattin American n
operaations and fuurther growth
h opportunitie es. The overa all plan is expected to bee cash neutraal during thiss
cycle
e, while drivin
ng net income accretion, net of dispos sals, of arounnd 200 millioon euros by 2019.

4. SHAREHOL
LDER REMU
UNERATION
N

A new dividend policy provid ding certaintty in the shoort term, and significantt upside potential in thee
mediuum term, ha
as been introoduced for thhe 2015 – 20 019 period. For 2015, th he payout ratio
r will bee
incre
eased to 50%
%, and it willl increase bby 5 percenttage points every year tto reach a payout
p ratio
o
of 65
5% in 2018. If the net ord
dinary incom
me for either of
o 2015 or 20016 is below w Group guidaance, then a
minim
mum DPS of 0.16 and 0.1 18 euro per sshare will be paid, respec
ctively for 20015 and 2016
6.

All En
nel press relea
ases now have
e smartphone and tablet verrsions. Downlo
oad Enel Mobbile App from Google Play

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