Enel 2018-2020 strategic plan: full speed ahead on digitalisation and customers

Published on Tuesday, 21 November 2017

Digitalisation is turning Enel into an increasingly efficient and proactive operator in the context of the major transformation the entire industry is experiencing. The energy market evolution is opening up opportunities to enhance the Group’s customer proposition through new services. The combination of these two enablers will support the Group in delivering attractive shareholder remuneration and sustainable long-term value creation for all stakeholders.

London, November 21st, 2017 – Enel Group (hereinafter the “Group”) is today presenting its 2018– 2020 Strategic Plan to the financial markets and global media.

  • Digitalisation: 5.3 billion euros investment (a 600 million euro increase vs. the previous plan) to digitalise Enel Group’s asset base, operations and processes and enhance connectivity; targeting 1.9 billion euros cumulative incremental EBITDA contribution between 2018 and 2020 (increasing by 300 million euros vs. the previous plan)
  • Customer focus: targeting 3.3 billion euros of EBITDA contribution in 2020, of which 2.9 billion euros relates to power and gas retail and 400 million euros to e-Solutions, leveraging on 67 million end users and almost 35 million power and gas free customers expected in 2020
  • Operational efficiency: targeting 1.2 billion euros of savings in real terms in 2020 vs. 2017, of which 500 million euros driven by the investments in digitalisation
  • Industrial growth: shifting capital allocation towards mature economies mainly in Networks and Renewables; around 80% of growth capex dedicated to Italy, Iberia, North and Central America
  • Group simplification & Active portfolio management: continuing the simplification of the ownership structure of the subsidiaries as well as the rationalisation of operating companies in South America. Increased focus on minorities buy-out reaching 2.8 billion euros cumulatively between 2017-2020. Share buy-back option still available for up to 2 billion euros until November 2018
  • Shareholder remuneration: dividend pay-out confirmed at 70% on Group net ordinary income from 2018 onwards. Minimum dividend of 0.28 euro per share on 2018 results, a 33% increase vs. the minimum dividend guaranteed for 2017.

“Since 2015, we have made remarkable progress in all areas of our strategy. Enel is now a much more efficient business with a clearly defined path to industrial growth which, combined with capital discipline and the faster-than-planned execution of asset rotation, has materially increased the Group’s cash generation and profitability. As a consequence, we have been able to raise our 2017 dividend by 44% versus the 2015 pay-out. All these results have been achieved despite significantly more challenging macro scenario conditions than were expected. This performance has positioned our Group at the forefront of the global energy transition. We are leading in key macro areas for sustainable growth such as renewables and digitalised distribution networks. We can leverage the trends of urbanisation and electrification of demand as well as the resulting profound decarbonisation, to capture the opportunities presented by the major disruption of the entire energy sector. The Group is therefore a more profitable, efficient and sustainable organisation today. Looking ahead to 2020, digitalisation – introduced last year – has become a concrete and tangible dimension of our business, with increased investment of more than 5 billion euros over the plan. A major focus on customers, including in the new global business line e-Solutions, will provide opportunities for additional value creation. Our improved financial targets – including the introduction of a minimum dividend per share of 0.28 euro for 2018, a 33% increase on the minimum target for 2017 we presented last year – underpin our confidence in the prospects and role of Enel today and for the years to come”

– Francesco Starace, CEO and General Manager of Enel

An Enel Group subsidiary, PJSC Enel Russia operates the following power plants: Konakovskaya GRES, Nevinnomysskaya GRES, Sredneuralskaya GRES and Reftinskaya GRES. The company’s total gross installed electrical capacity is 9,428.7 MW (equivalent to 8,878.4 MW net installed capacity) and thermal capacity is 2.382 Gcal/h. PJSC Enel Russia’s authorised capital is 35,371,898,370 roubles, which is divided into ordinary shares with a par value of 1 rouble. The Enel Investment Holding B.V. share in the company’s authorised capital is 56.43%, PFR Partners Fund I Limited’s share is 19.03%, Prosperity Capital Management Limited’s share is 8.23%, VTB Bank’s share is 3.87% and other minority shareholders’ share is 12.44%. PJSC Enel Russia shares are listed in Level 1 MICEX quotation list. The company was established in Yekaterinburg on October 27th, 2004 as OJSC OGK-5. On July 7th, 2009 by the resolution of Annual General Shareholders’ Meeting the company was renamed OJSC Enel OGK-5 and on August 8th, 2014 the Federal Tax Service registered the new version of the company’s charter with the name OJSC Enel Russia. On June 25th, 2015 the company changed its legal type and was renamed PJSC Enel Russia.