SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
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ENDESA,
S.A.
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Dated: November
15, 2007
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By:
/s/ Álvaro Pérez de Lema
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Name:
Álvaro Pérez de Lema
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Title:
Manager of North America Investor
Relations
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15
November, 2007 9M07 Results
1
Solid earnings… - Net income up 13% in a like-for-like basis … in a challenging
operating environment - Moderate demand and wholesale prices in Spain and
other
European countries where Endesa operates - Low rainfall and scarcity of gas
in
Latin America Growth in line with our commitment 9M07 results
Highlights
2
Change +7% +6% +13% Change +2% 0% -4% +5% +5% 5,612 4,100 -706 1.24x 15,549
8,189 1,979 -21% 9M 2006 5,479 4,109 -736 1.24x 14,847 7,819 2,508 9M 2007
Positive earnings in a challenging operating environment CONSOLIDATED RESULTS
Revenues Gross profit EBITDA EBIT Net financial expense Leverage euroM Net
income (1) Stripping out the following one-off items: - Recognition in 9M06
of
revenues for non-mainland stranded costs for 2001-2005, with a euro227M impact
on EBITDA, euro31m on net financial expense and euro197M on net income -
euro118M generated by the restatement of the tax base of Endesa Italia’s fixed
assets in accordance with Italian law in 9M06 - The tax credit due to the
Elesur/Chilectra merger, with a euro101M impact on net income in 9M06 - Asset
disposals which had an impact on net income of euro378M in 9M06 and euro42M
in
9M07 +6% +8% -8% 31/12/06 30/09/07 Like-for-like change(1)
3
Operating growth in line with targets CONSOLIDATED RESULTS euroM EBITDA 7,440
(1) Recognition of revenues from non-mainland generation deficit in 2001-2005
2005 2006 2007 Target +8% 6,020 7,139 +7% 5,252 4,399 9M 5,612 227(1)
227(1)
4
360 7 36 -19 -142 -107 1,937 1,714 227 31 -19 42 794 388 213 Net Income up
13%
(like-for-like) CONSOLIDATED RESULTS Net Income change euroM 2,508 1,979
Net
income 9M06 Net income 9M07 EBITDA Amort. Financial Income Other income Taxes
Minorities Like-for-like change Non-recurrent adjustments +13%(1) (1)
Like-for-like change
5
CONSOLIDATED RESULTS Positive cash flow generation euroM Spain and Portugal
After-tax operating cash flow (1) Total net investment (2) Europe Latam Group
Cash flow before dividends 3,187 2,424 763 (1) Equivalent to“Net cash flows from
operating activities”; (2) (2) Equivalent to “Net cash flows used in investing
activities" (includes financial investments and capex) 232 995 Tariff deficit
526 655 589 1,492 2,006 343 232 763
6
Improved financial leverage CONSOLIDATED RESULTS Europe Spain and Portugal
Enersis E. Italia Spain, Portugal and other euroM Net debt at 30/09/07 by
business Net debt at 30/09/07 by company Net debt stripping out regulatory
receivables pending collection at 30/09/07 18,017(1) Net debt stripping out
regulatory items: euro18,017M (1) Breakdown of regulatory receivables is
provided in the Appendix (page 25) Latam 21,183 21,183 Net debt 1.29x Leverage
1.24x Net debt/equity at 30/09/06 Net debt/equity at 30/09/07 Net debt/EBITDA
at
30/09/06 Net debt/EBITDA at 30/09/07 2.88x 2.83x 596 15,507 13,720 1,716
5,080
5,747
7
1H07 Results Strong growth across all businesses Spain and Portugal 9M07
Results
8
SPAIN AND PORTUGAL Positive operating performance Highlights Moderate growth
in
demand and lower pool prices Lower CO2 cost Leadership and margin enhancement
in
deregulated business Significant earnings jump in Distribution and Gas
activities Regulatory update EBITDA Generation + Supply Distribution 9M07
2,926
2,964 +10% 864 1,913 1,835 9M06 euroM 1,051 Non-mainland deficit 227 +22%
+4%
Net income 9M07: euro1,390M (+21% Like-for-like(1)) ( 1 ) Stripping out the
non-recurrent effects of: (a) non-mainland deficit in 9M06: euro227M at the
EBITDA level, euro31M in net financial expenses and euro197M impact on net
income; and (b) asset disposals which had an impact on net income of euro190M
in
9M06 and euro36M in 9M07
9
Leadership and revenues enhancement in deregulated business SPAIN AND PORTUGAL
euro/MWh (1) Includes -euro121M in 9M06 and -euro9M in 9M07 following
application of Article 2 of RDL 3/2006 Average revenue from mainland
generation(1) and pool price Forward sales have acted as a hedge from the
fall
in pool prices (+euro6.3/MWh additional margin vs. pool) Renewal and signature
of new contracts in 9M07 at a price equivalent to euro57/MWh (euro17MWh higher
than wholesale market) Generation Sales GWh Wholesale market Rest of sector
Endesa Deregulated market Epes and Cesur Pool price: -38% Dereg. revenues:
+19%
50,1 Avg. revenues: -1.1% 50,7 53.0 44.6 39.9 64.5 19% 55% 39% 72% 6% 9%
50.1
50.7 9M06 9M07
10
SPAIN AND PORTUGAL Significant improvement in earnings in Distribution and
gas
activities Gas business Gross Margin Distribution business EBITDA 9M07 9M06
+22%
euroM Improved remuneration euroM 177 109 9M07 9M06 +62% Total gas sales:
up 24%
Gas market share: 14% Quality continues to improve: interruption time declined
32% in the last twelve months 1,051 864 159
11
Regulatory update SPAIN AND PORTUGAL Renewables Solar capacity meet current
target RD proposal to revise PV remuneration and adjust it to existing capacity
Capacity Payments Subsitute existing system for two
incentives: Investment incentive: 10 years capacity payment for
generation assets commissioned after 1997 (includes new and repowered). Amount
similar to the former scheme to be paid for Availability
incentive: pending definition, initial focus on hydro and fuel Large Customers
Recognition of demand-side-response services for large customers in deregulated
market. Facilitates these customers to switch to the liberalized market Tariffs
October tariff review: no change YTD Tariff Deficit: euro694M (euro307M to
be
financed by Endesa(1)) Securitisation of ex-ante deficit for 2007 deficit
Distribution Smart meters new regulation: new equipment should allow hourly
metering and remote management (1) Following application of Article 2 of
RDL
3/2006 net amount financed by Endesa totalled euro298Meuro
12
1H07 Results Strong growth across all businesses Europe 9M07
Results
13
EUROPE Stable business in an unfavourable environment Highlights Higher margins
despite falling prices and demand Progress made on capacity plan Energy
management: extracting additional value from its European asset portfolio
Progress made on contributions to Endesa Hellas EBITDA euroM 890 867 -3%
746 718
147 9M06 9M07 E. France Rest of Europe 165 -16 -3 -4% +12% Net income 9M07:
euro287M (-6% Like-for-like(1)) (1) Stripping out the following one-off items:
-
Revaluation of the tax base of fixed assets as permitted by financial
legislation in Italy, which resulted in a fiscal net income of euro118M in
9M06
- Asset disposals which had an impact on net income of -euro3M in 9M07
Italy
14
9M07 32.2 euro/MWh Italy: higher margins EUROPE Low level of activity: stagnant
demand, higher imports and low rainfall Increase in unit margin due to: -
Hedged
by bilateral contracts and contracts with Acquiriente Unico - Fall in CO2
prices
- Greater self-sufficency from Green Certificates (60% vs. 25%) due to
Renewables and Biomass Progress on renewables plan (1) (1) Includes energy
produced and purchased Origin and destination of 9M07 Sales(1): (GWh) % chg
vs.
9M06: -4% Unit margin Italy 9M06 31.0 euro/MWh +4% Destination Origin 24,014
24,014 Supply & large customers Sole acquiror Pool Imports Own output Other
purchases 75% 24% 18% 58% 16% 9%
15
EUROPE Endesa France: EBITDA growth in a scenario of low prices Activity
maintained despite lower demand (-4%) Increase in unit margin despite lower
prices: output hedged with forward energy sales and EDF contract Increasing
contribution from non- EDF sales Lower fixed costs (-9%) Industrial Plan
progress: - First 10 MW of wind capacity operational - Emile Huchet (860
MW) and
Hornaing (430 MW) CCGTs authorized and contracted - Lucy (430 MW) and Lacq
(860MW) CCGTs authorized +4% Sales 16.9 euro/MWh Unit margin France 17.6
euro/MWh 9M07 9M06 EdF contract Forward & day ahead market Supply Poland
13,725 13,888 -1% (GWh) 8% 25% 34% 34% 7% 36% 32% 24%
16
1H07 Results Strong growth across all businesses Latin America 9M07
Results
17
LATIN AMERICA Strong growth in distribution offsets challenging generation
environment Highlights Demand growth in all countries In Generation, increased
unit margins offset lower output Sharp growth in Distribution activity and
margins Emgesa-Betania merger effective on September 1 Cash returns of USD375M
in 9M07 1,663 1,781 +7% EBITDA 815 920 924 898 9M07 9M06 euroM -50 Distribution
Other Generation & transmission -63 Up 9% in local currency Net income 9M07:
euro302M (+1% Like-for-like(1)) +2% +13% (1) Stripping out the following
one-off
items: - Tax credit due to the Elesur/Chilectra merger, with an impact on
Net
Income of euro101M in 9M06 - Asset disposals which had an impact on net income
of euro17M in 9M06 and euro8M in 9M07
18
Higher unit margins despite low hydro production Fall in hydro output (down
15%)
and greater use of liquid fuels due to gas restrictions 55% rise in node
price
in Chile (four rises in 2007) High energy prices pushed up unit margin LATIN
AMERICA 44,297 -4% 9M07 9M06 Argentina Brazil Chile Colombia Peru 46,364
GWh
+10% 9M06 9M07 25.1 27.6 USD/MWh Output Generation margin (USD/MWh) 6,156
5,271
8,778 9,577 14,693 13,992 2,870 3,379 12,501 13,444
19
Strong growth in Distribution Application of new tariffs in Argentina Better
margins in Brazil due to lower sector surcharges LATIN AMERICA +8% 38.6(1)
35.9
9M06 9M07 Sales (GWh) Distribution margin (USD/MWh) USD/MWh (1) Does not
include
retroactive effect of increased tariffs at Edesur (Nov 05 to Jan 07). Argentina
Brazil Chile Colombia Peru 45,943 +6% 43,175 9M07 9M06 GWh 3,605 3,868 8,474
7,917 9,235 9,695 11,396 11,933 11,973 11,022
20
Conclusions Solid earnings against a challenging backdrop Optimum position
to
meet new challenges Unique assets portfolio Financial strength Contribution
from
new shareholders An experienced and committed team
CONCLUSIONS
21
1H07 Results Strong growth across all businesses Back Up 9M07
Results
22
Income Statement Spain and Portugal ( 1 ) Stripping out the non-recurrent
effects of: (a) non-mainland deficit in 9M06: euro227M at the EBITDA level,
euro31M in net financial expenses and euro197M impact on net income; and
(b)
asset disposals which had an impact on net income of euro190M in 9M06 and
euro36M in 9M07 Revenues Gross profit EBITDA EBIT Net financial expense euroM
9M
2007 Change 2,964 2,086 -313 7,400 4,573 Net income 1,390 2,926 2,112 -324
7,235
4,339 1,503 9M 2006 +10% +11% +21% +1% -1% -3% +2% +5% -7% +6% +11% -12%
APPENDIX: ENDESA Like-for-like change(1)
23
Income Statement Europe Revenues Gross profit EBITDA EBIT Net financial expense
euroM 9M 2007 Change 867 638 -58 3,027 1,129 Net income 287 890 693 -38 3,113
1,137 426 9M 2006 -3% -8% -6% -3% -8% +53% -3% -1% -33% -3% -1% +53% (1)
Stripping out effects from extraordinaries: (a) revaluation of the tax base
of
fixed assets as permitted by financial legislation in Italy which resulted
in a
fiscal net income of euro118 M in 9M06 and (b) asset disposals which had
an
effect on net income of -euro3M in 9M07 APPENDIX: ENDESA Like-for-like
change(1)
24
(1) Stripping out effects from extraordinaries: (a) non-recurring tax credit
due
to the Elesur/Chilectra merger, with an impact on Net Income of euro101M
in 9M06
and (b) asset disposals with an impact of on net income of euro17M in 9M06
and
euro8M in 9M07 Note: EBITDA growth in local currency was 9% Income Statement
Latin America Revenues Gross profit EBITDA EBIT Net financial expense euroM
9M
2007 Change 1,781 1,376 -335 5,122 2,487 Net income 302 1,663 1,304 -374
4,499
2,343 408 9M 2006 +7% +6% +1% +7% +6% -10% +14% +6% -26% +14% +6% -10% APPENDIX:
ENDESA Like-for-like change(1)
25
1,218 1,650 298 Recognised regulatory items pending collection APPENDIX:
ENDESA
Mainland deficit 2006 Historical nonmainland deficit Total euroM Mainland
2007
3,166
26
Debt by interest rate structure Debt by currency Debt structure: - Fixed-rate
or
hedged: 57% (1) - Debt in currency in which cash flow is generated Average
cost
of debt: 5.79% - Endesa excl. Enersis: 4.43% - Enersis: 9.74% Leverage(1):
- Net
debt/equity: 1.24x Average life of debt: 5.1 years Liquidity at Endesa: -
Endesa
excl. Enersis: euro5,705M - Enersis: euro994M Favourable debt structure in
a
context of rising interest rates Debt structure 21,183 21,183 euroM Main
debt
characteristics APPENDIX: ENDESA (1) Stripping out regulatory receivables,
fixed
rate or hedged debt represents 67% of the total with leverage of 1.06x. Euro
76%
USD 10% Chilean peso 5% Other 9% Fixed rate 48% Hedge 9% Floating rate
43%
27
Spain and Portugal Installed capacity and output(1) Installed capacity Spain
and
Portugal Europe Total 9,896 - 3,783 179 1,014 2,740 2,180 MW at 30/09/07
Total
Hydro Nuclear Coal Renewables and CHP Natural Gas Fuel oil Output Europe
Latam
Total TWh 9M07 (% chg vs. 9M06) Total Hydro Nuclear Coal Renewables and CHP
Natural Gas Fuel oil - - APPENDIX: ENDESA (1) Data for fully-consolidated
companies only. 3,397 6,372 5,362 2,440 5,512 23.8 10.4 0.1 1.1 10.1 2.1
-10%
-12% +586% -40% +11% -43% Latam 14,607 - 562 - 8,583 3,138 2,324 44.3 - 1.8
-
27.4 9.7 5.4 -5% - +50% - -15% +23% +9% 3,397 10,717 14,959 8,318 10,016
69.2
17.4 28.6 2.2 6.2 5.7 9.1 +2% -2% +2% +25% +12% +2% -2% 137.3 17.4 40.8 2.3
34.7
25.5 16.6 -3% -2% -1% +30% -12% +13% -7% 1,352 1,531 24,435
48,938
28
Progress on capacity plans APPENDIX: ENDESA Spain and Portugal CCGTs: +800
MW
Non-mainland: +154 MW Renewables: +327 MW Europe Latin America CCGTs Italy:
Renewables Italy: +138 MW CCGTs France: Renewables France: +10 MW Hydro:
+82 MW
Thermal: +347 MW Renewables: +18 MW Progress on planned capacity initiatives
FY07 94 MW of renewables started up in Italy in 9M07 and M.A.Severino farm
(44
MW) in 4Q07 Inauguration of the first wind farm in France (10 MW) Emile Huchet
(860 MW) and Hornaing (430 MW) CCGTs authorized and contracted. Lucy (430
MW)
and Lacq (860 MW) CCGTs authorized Repowering of third coal group at As Pontes
finished As Pontes CCGT (800 MW) came on stream in August 70MW of renewables
started up in 9M07>250MW to be commissioned in 4Q07 Start up of San Isidro II
gas turbine plant (249 MW) Construction started on Quintero LNG and supply
contract signed Bocamina II (345MW) and Quintero gas turbine (250MW) contract
awarded Capacity increases at existing plants: CH Guavio (+50MW), Termocartagena
(Unit 2, +61MW), Ventanilla (+37MW). New plants: Palmucho (32MW) & Canela
(18MW) in 4Q07
29
Endesa CO2 emissions in the EU APPENDIX: ENDESA Total Spain(1) Italy France
Poland 9M07 Allocation (MTon CO2) 40.3 9M07 Emissions (MTon CO2) 9M07 Deficit
(MTon CO2) Portugal (1) Mainland + island and non-mainland systems. The deficit
from the island and non-mainland systems is recognised in revenues 7.4 1.6
0.7
9.2 0.8 0.5 1.8 -0.8 -0.2 49.1 8.8 28.4 2.2 36.4 2.2 8.0 0.0
30
APPENDIX: ENDESA ERPA signed LOI signed *Each fund is accounted for as a
discrete project Biomass Methane capture Energy efficiency Wind HFC23 Hydro
Landfill methane recovery Multiple* Other 0.8 0.2 5.4 6.5 41.8 13.2 3.6 15.3
6.2
MtCO2 1.1 70.2 15.3 6.4 MtCO2 Technological breakdown (42 projects) Geographic
breakdown (42 projects) Endesa's CDM portfolio: 93 Mton CO2 64.5 15.3 3.2
5.7
3.2 Africa Asia Funds* Latam 6.4 41,8 13.0 3.6 15.3 3.3 5.4 2.9 0.2 0.5 0.1
0.2
0.3 3,5
31
Generation output in Spain Endesa's mainland generation output Nuclear Hydro
CCGT Coal Fuel +1% +0% 58,153 57,303 1% Renew./CHP Hydro and nuclear:
Conventional thermal: +25% Renewables/ CHP: +4% -6% Hydro and nuclear:
Conventional thermal: +12% Renewables/ CHP: Change for rest of sector Change
ENDESA GWh 17,374 17,806 5,541 6,227 26,320 25,700 5,709 5,605 881 312 2,211
1,770 9M06 9M07 APPENDIX: SPAIN AND PORTUGAL
32
Competitive mainland fuel costs thanks to a balanced generation portfolio
(1)
(1) Estimates (2) (2) Conventional thermal facilities ex fuel-oil Cost of
mainland fuel in Ordinary Regime Load factor of thermal plants(2) vs. rest
of
the sector Even against a backdrop of higher rainfall, Endesa still boasts
the
most competitive and efficient generation business in the sector euro/MWh
Endesa
Rest of the Sector (1) Rest of the sector Endesa 22.1 16.5 49% 70% APPENDIX:
SPAIN AND PORTUGAL
33
Competitive mainland fuel costs Fuel costs impact breakdown (1) euro32.0/MWh
in
9M07 and euro29.4 in 9M06 ex-ATR. (2) Net of coal premiums. Gross cost was
euro25.2/MWh in 2007 and euro23.6/MWh in 2006. Includes imported coal consumed
by national coal plants. Mainland unit fuel costs breakdown euro/MWh 9M06
9M07
CCGT (1) 36.2 8.9% Domestic coal (2) 22.3 2.6% Imported coal 19.5 -2.5% Fuel
81.0 98.6% Total average % chg Avg conventional thermal output 19.0 160.9
26.0
2.4% 33.2 22.9 26.6 16.2 1.7% 16.5 9M06 9M07 899 Increase in raw material
prices
Better mix +58 -37 euroM 920 APPENDIX: SPAIN AND PORTUGAL
34
Renewables and CHP technologies have been strongly affected by drop in pool
prices (1) Accounting output (corresponding to booked sales) EBITDA (euroM)
-5%
132 9M07 9M06 126 Sale price Renewable & CHP 95.4 euro/MWh 83.3 euro/MWh
-13% Output(1) 1,770 GWh 2,211 GWh +25% APPENDIX: SPAIN AND
PORTUGAL
35
APPENDIX: SPAIN AND PORTUGAL Renewables/CHP: operating indicators Installed
capacity Output MW Total CHP Wind Mini-hydro Other Net 1,454 969 194 46 245
Account. 1,106 865 185 22 34 Gross 2,253 1,356 238 140 519 9M 2006 Net Account.
Gross 9M 2007 GWh Total CHP Wind Mini-hydro Other Net 2,701 1,418 377 147
760
Account. 1,763 1,241 365 70 87 Gross 4,664 2,005 404 438 1,816 9M 2006 Net
2,863
1,807 426 154 476 Account. 2,211 1,607 413 94 97 Gross 4,605 2,495 460 463
1.187
9M 2007 1,652 1,199 196 46 211 1,352 1,104 187 22 39 2,447 1,614 240 140
452
36
Lower CO2 cost (1) Also, the updated value of CO2 rights in the 2006 deficit
included in the balance sheet until April due to falling prices had a positive
impact on EBITDA of euro41M and -euro41M on depreciation and amortisation.
(2)
Due to an adjustment in the market value of rights consumed in 9M07, under
IFRS,
included under depreciation and amortisation. An additional euro12M adjustment
was made to the depreciation charge to reflect the decline in the market
value
of the CO2 emission rights purchased and not used. In 9M06 this totalled
euro6M.
Mainland emissions deficit Mton CO2 Economic impact (1) CO2 average price
euro/tn CO2 euroM x = 9M07 9M06 27.6 5.9 Mainland Mainland +0% 27.7 7.8 13.00
0.08 9M07 9M06 77 1 -80% 22 23 Depreciation of portfolio (2) 38 115 APPENDIX:
SPAIN AND PORTUGAL
37
APPENDIX: EUROPE Integrated management of asset portfolio Trading EBITDA:
euro27M Additional contributions: -Endesa Italia: euro18M -Endesa France:
euro10M 16 GWh 1.879 GWh 128 GWh 68 GWh 5 GWh 81 GWh 15 GWh Physical assets
Virtual assets Interconnection 342 GWh 132 GWh 83 GWh
38
Scandale(1): Tavazzano 9: Monfalcone 3 and 4: 800 MW CCGT Under construction
Start up in 2008 4000 MW CCGT EPC awarded Start up in 2010 800 MW repowering
Authorization process Start up in 2010 Fiume Santo 5: (1) 50% Endesa- 50%
ASM
Brescia 410 MW coal plant Under agreement with Cerdeña Region Start up in 2012
Conventional electric capacity plan in Italy APPENDIX: EUROPE
39
Livorno: Monfalcone: Porto Torres: Regasification capacity plan in Italy
Capacity around 8 bcm (100% assigned to Endesa) Off-shore terminal Project
in an
advanced stage in the authorization process Strategic project according to
Italian authorities Start up in 2012 Capacity around 4 bcm (50% asssigned
to
Endesa) Floating off-shore terminal Investment around euro450M Fully authorized
project Work started in 1Q07 and expected to come on stream in 2H09 Agreement
with Cerdeña Region for terminal construction Future CCGT capacity development
at Fiumesanto site, linked to terminal construction Gas access from Galci
project Development of gas infrastructure as a way to access competitive
gas for
generators in Italy APPENDIX: EUROPE
40
CCGTs capacity plan in France 860 430 430 860 2 ,58 0 430 Emile Huchet •EPC
awarded. Under construction Lucy •Project proposals solicited Lacq •Project
proposals solicited Authorized capacity Provence •Advanced stage in the
authorization process TOTAL CCGTs France Authorized CCGT: 2,580 MW 3,010
MW
Hornaing •EPC being negotiated APPENDIX: EUROPE
41
Renewables in Europe: wind projects APPENDIX: EUROPE Start-up 3Q05 3Q06 1Q07
1Q04 1Q07 1Q07 Gross capacity 179 14 24 42 20 10 10 20 Operational wind output
in Europe MW Total Italy Iardino Vizzini Montecute Total France Lehaucourt
Poggi
Alti Trapani 2Q07 32 Florinas 17 17 Total Greece Sidirokastro
42
Cash returns from Latin America LATIN AMERICA 59% of the USD1,600M committed
for
the period 2005-09 fulfilled USD184M from Enersis dividend against 2006 earnings
S&P upgraded Enersis and Endesa Chile to BBB stable 9M07 (USDM) Dividends
and interest Capital reductions & others Disposals Total 13 362 375 340 569
936 27 2005-06 327 207 561 27 Total
43
Sharp sales growth (+9%) Application of new distribution tariffs (+38% in
dist.
cum. value/VAD) and retroactive recognition to Nov 2005 Gas and electricity
supply restrictions during winter. The situation has improved since
mid-September. Fall in electricity output (lower rainfall and low availability
of gas in period) Acquisition of 5.5% of Costanera and 17.2% of Chocon (d&i)
Highlights by country APPENDIX: LATIN AMERICA 9M07 EBITDA (euroM) Dist: euro106M
(+203%) Gen: euro89M (-7%) Brazil Highlights Argentina Better distribution
margins due to lower surcharges Tariff revision at Coelce (provisional VAD
-7%)
and annual tariff revision at Ampla (VAD +10%) Higher generation unit revenue.
Lower hydro (rainfall) and thermal output (gas shortage at Fortaleza plant)
Cien: Advances made in renegotiating new retribution model, export agreement
with CAMMESA (June to September) Strong appreciation of the Brazilian real
(+16%
vs. USD) Dist: euro389M (+13%) Gen: euro161M (+36%) Peru Sharp jump in demand
(7%) at Edelnor Strong rise in output (17%) due to start up of Ventanilla
CC
despite lower prices due to higher rainfall Saturation at the interconnection
between northern and central systems affecting generation contracts Additional
capacity Recognition at Ventanilla (37 MW) Dist: euro67 M (+6%) Gen: euro113M
(+2%) Trans: euro36M(N/A)
44
Highlights by country APPENDIX: LATIN AMERICA 9M07 EBITDA (euroM) Highlights
Colombia Sharp growth in demand (7%) Emgesa-Betania merger effective 1 September
Fall in output (8%) due to lower rainfall and increased maintenance work
(Guavio
hydro plant) Increase in output at Guavio hydro plant (+50 MW) due to operating
enhancements at the plant (since Feb 07) Strong appreciation of the Colombian
peso (+11% vs. USD) Implementation of the wealth tax (-euro29M EBITDA) Dist:
euro218M (+2%) Gen: euro191M (+14%) Lower rainfall and restrictions on gas
from
Argentina. High utilisation of liquid fuels Successive increases in node
price
to USD104/MWh since 1 Nov (+55% vs. Dec06) San Isidro II gas turbine (249
MW)
commissioned. CCGT slated for closure in 2008. Start of construction work
on the
Quintero LNG plant Construction contract for Bocamina II (345 MW) and TG
Quintero (250MW) awarded Acquisition of 50% of GasAtacama and sales agreement
with Southern Cross. New agreement with mining companies Lower subtransmission
tariff at Chilectra (-euro36M EBITDA) Tokman Law passed (covering bankruptcy
of
generation company or early termination of electricity supply contracts)
Dist:
euro144 M (-10%) Gen: euro366M (-16%) Chile
45
Direct stakes held by Endesa Internacional APPENDIX: LATIN AMERICA Direct
60.6%
60% Generation business Operating companies Distribution business euroM Codensa:
27% 213 218 386 Emgesa: 23% 143 191 402 EEB: 5% n/a n/a n/a E. Brasil: 28%
428
544 1.127 Edesur: 6% 35 106 35 DockSud: 40% 19 22 128 Edelnor: 18% 63 67
145
Edegel: 6% 95 89 316 Piura: 48% 16 24 - Pangue: 5% 53 24 107 % direct stake
Proportional EBITDA 237 290 EBITDA 9M06 Debt SEPT07(*) EBITDA 9M07 (*) Total
net
debt. Includes intragroup debts of euro52M at DockSud, euro17M at Endesa
Brasil
and euro103M at Pangue
46
Significant unrealised capital gains in Latin America APPENDIX: LATIN AMERICA
*
Market value of stake in Enersis + and book value for rest of portfolio (plus
an
estimated euro700M in additional market value) Group Other stakes 6,500 3,900
euroM 4,900 3,000 900 900 700 Market value 30/09/07* Book value 30/09/07
Endesa's Assets in Latin America Valuation
47
Disclaimer This presentation contains certain “forward-looking” statements
regarding anticipated financial and operating results and statistics and
other
future events. These statements are not guarantees of future performance
and
they are subject to material risks, uncertainties, changes and other factors
that may be beyond ENDESA’s control or may be difficult to predict.
Forward-looking statements include, but are not limited to, information
regarding: estimated future earnings; anticipated increases in wind and CCGTs
generation and market share; expected increases in demand for gas and gas
sourcing; management strategy and goals; estimated cost reductions; tariffs
and
pricing structure; estimated capital expenditures and other investments;
estimated asset disposals; estimated increases in capacity and output and
changes in capacity mix; repowering of capacity and macroeconomic conditions.
For example, the 2007-2009 EBITDA (gross operating profit as per ENDESA's
consolidated income statement) targets included in this presentation are
forward-looking statements and are based on certain assumptions which may
or may
not prove correct. The main assumptions on which these expectations and targets
are based are related to the regulatory setting, exchange rates, divestments,
increases in production and installed capacity in markets where ENDESA operates,
increases in demand in these markets, assigning of production amongst different
technologies, increases in costs associated with higher activity that do
not
exceed certain limits, electricity prices not below certain levels, the cost
of
CCGT plants, and the availability and cost of the gas, coal, fuel oil and
emission rights necessary to run our business at the desired levels. In these
statements we avail ourselves of the protection provided by the Private
Securities Litigation Reform Act of 1995 of the United States of America
with
respect to forward-looking statements. The following important factors, in
addition to those discussed elsewhere in this presentation, could cause actual
financial and operating results and statistics to differ materially from
those
expressed in our forward-looking statements: Economic and industry conditions:
significant adverse changes in the conditions of the industry, the general
economy or our markets; the effect of the prevailing regulations or changes
in
them; tariff reductions; the impact of interest rate fluctuations; the impact
of
exchange rate fluctuations; natural disasters; the impact of more restrictive
environmental regulations and the environmental risks inherent to our activity;
potential liabilities relating to our nuclear facilities. Transaction or
commercial factors: any delays in or failure to obtain necessary regulatory,
antitrust and other approvals for our proposed acquisitions or asset disposals,
or any conditions imposed in connection with such approvals; our ability
to
integrate acquired businesses successfully; the challenges inherent in diverting
management's focus and resources from other strategic opportunities and from
operational matters during the process of integrating acquired businesses;
the
outcome of any negotiations with partners and governments. Delays in or
impossibility of obtaining the pertinent permits and rezoning orders in relation
to real estate assets. Delays in or impossibility of obtaining regulatory
authorisation, including that related to the environment, for the construction
of new facilities, repowering or improvement of existing facilities; shortage
of
or changes in the price of equipment, material or labour; opposition of
political or ethnic groups; adverse changes of a political or regulatory
nature
in the countries where we or our companies operate; adverse weather conditions,
natural disasters, accidents or other unforeseen events, and the impossibility
of obtaining financing at what we consider satisfactory interest rates.
Political/governmental factors: political conditions in Latin America; changes
in Spanish, European and foreign laws, regulations and taxes. Operating factors:
technical problems; changes in operating conditions and costs; capacity to
execute cost-reduction plans; capacity to maintain a stable supply of coal,
fuel
and gas and the impact of the price fluctuations of coal, fuel and gas;
acquisitions or restructuring; capacity to successfully execute a strategy
of
internationalisation and diversification. Competitive factors: the actions
of
competitors; changes in competition and pricing environments; the entry of
new
competitors in our markets. Further details on the factors that may cause
actual
results and other developments to differ significantly from the expectations
implied or explicitly contained in the presentation are given in the Risk
Factors section of Form 20-F filed with the SEC and in the ENDESA Share
Registration Statement filed with the Comision Nacional del Mercado de Valores
(the Spanish securities regulator or the “CNMV” for its initials in Spanish). No
assurance can be given that the forward-looking statements in this document
will
be realised. Except as may be required by applicable law, neither Endesa
nor any
of its affiliates intends to update these forward-looking
statements.
48
1H07 Results Strong growth across all businesses 15 November 2007 9M07
Results
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