Enel 2019 – 2021 strategic plan: decarbonisation and customers to boost growth and value creation

Published on Tuesday, 20 November 2018






CAGR (%) 2018-21

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Implicit DPS (€/share)






Minimum dividend per share (€)






“Since 2015 we have delivered on all of our targets through a significant improvement in cash flow generation, which, combined with an acceleration on growth, has allowed us to increase our shareholder remuneration, raising DPS from 0.16 to 0.28 euros per share in 2018, and expand our pay-out ratio that is set to remain stable at 70% over the plan period. Renewables and network operations drove our investment strategy that is focused on a shorter time to market and a higher degree of flexibility to better cope with the progressive transformation of the industry. A sound industrial growth and the efficiency programmes implemented so far have enabled us to progressively increase our ordinary EBITDA to 16.2 billion euros by end 2018, a level we committed to reach back in 2015 and that we constantly confirmed. Moreover, in the last three years, around 8 billion euros were recycled through our active portfolio management, using funds to further simplify the company’s structure and to pursue acquisitions, the most recent being Eletropaulo that increased our customer base by another 7 million, reinforcing Enel’s worldwide leadership in distribution networks. Today’s Enel is a more sustainable, efficient, profitable and lower risk organisation. The transformation under way in our industry is presenting challenges but also opening new opportunities. We are well positioned to create value in this transformation. Enel’s strategy is at this stage inherently sustainable, having embedded Shared Value concepts and Open Innovation practices in all its core business processes. The solidity of our 2019-2021 plan allows us to improve our ordinary EBITDA targets for 2019 and 2020 and introduce new upward targets for 2021. The robustness of this strategy will translate, for the first time, into a minimum dividend per share over the full length of our plan. We remain confident and motivated in pursuing our growth trajectory for the foreseeable future”

– Francesco Starace, CEO and General Manager of Enel


Enel has reclassified its capex plan according to the following categories that are more reflective of the nature of its current and future business. In terms of investments and growth in ordinary EBITDA, the three categories will contribute as follows over the plan period:

  • Asset development is expected to amount to 16.5 billion euros and contribute to 2.1 billion of growth in ordinary EBITDA;
  • Customers is expected to amount to 4.8 billion euros and generate around 1 billion of growth in ordinary EBITDA;
  • Asset management is expected to amount to 6.2 billion euros and contribute to growth in ordinary EBITDA for the remaining portion.


The total sources of funds are planned at around 41.1 billion euros cumulated over the plan, driven by higher conversion of EBITDA into Funds From Operations (FFO), fully funding gross capex and dividends.

Net financial debt is set to remain largely stable over the entire plan period, reaching an approximate 41.8 billion euros in 2021 and maintaining solid credit metrics with an FFO/net debt ratio increasing from 26.5% expected in 2018 to 31.1% in 2021.

1.     Industrial Growth

The Group forecasts a total gross capex of approximately 27.5 billion euros between 2019 and 2021, a 12% increase on the previous plan. The increase is mainly driven by asset development and customers. In light of the reduction in the asset development capex allocated to the Build, Sell and Operate model (BSO), the new plan envisages 4 billion euros of incremental spending on organic investments fully devoted to renewables. Over 50% of the asset development capex plan is already addressed, giving high visibility on the evolution of Group’s financials.

From a business line perspective, gross capex allocation is expected to evolve as follows:

  • 42% will be devoted to Renewables
  • 40% will be invested into Networks
  • 5% will be invested in Retail business
  • 4% will support Enel X development
  • 9% will be targeted at Thermal Generation.


Out of a total of about 16.5 billion euro asset development capex, around 10.6 billion euros will be invested in renewables, once again the driver of Group growth. In the next three years, Enel will reinforce its focus on markets where it has an integrated presence such as Italy, Spain, Chile and Brazil.

Value creation will also be achieved through the decarbonisation of the Group’s generation mix not only with the aim of reducing CO2 emissions but also as a way to seize financial opportunities arising from climate change actions. The increase in renewable capacity over the plan period, which is expected to amount to an additional 11.6 GW, is planned to result in around 1 billion euros of incremental EBITDA. Such an increase in renewables will be coupled with a reduction in thermal generation capacity of around 7 GW. As a result, in 2021, 62% of the Enel Group’s energy production will be emission-free, from 48% expected in 2018.

In networks, the Group is expected to invest around 11.1 billion euros, of which about two thirds will be directed at mature economies where the process of implementing a “smart infrastructure” is more advanced. Investments in networks are expected to generate around 1.2 billion euros of incremental EBITDA over the plan period.

Enel X envisages around 1.1 billion euros in gross capex balanced between asset development and customers, with the aim of generating 400 million euros of incremental EBITDA over the plan period.

2.     Operational Efficiency

The Group’s efficiency target of 1.2 billion euros is confirmed for the end of the period (2021).

Digitalisation across all business segments will be the main driver in achieving a reduction in opex to reach 8.1 billion euros in 2021, or an 8% reduction in the next three years in nominal terms

3.     Simplification

Enel will continue to focus on asset rotation and on the reduction of minorities, with the aim to improve the overall return on invested capital and to increase the economic interest in subsidiaries.

4.     Human capital

Enel’s strategy is and will remain strongly linked to human capital in terms of people and communities the Group interacts with, aiming to generate positive effects on long-term economic and social growth.


The dividend policy based on a pay-out ratio of 70% of Group net ordinary income is confirmed up to 2021, with the extension, for the first time, of a minimum dividend per share throughout the 2019 – 2021 period.

Therefore, on 2019 results Enel is expected to pay the higher of:

c)     a dividend per share based on the aforesaid 70% pay-out ratio;

d)    a minimum dividend per share of 0.32 euros.