1. Protecting margins and cash flow generation in mature markets
Given the macroeconomic scenario, which remains a challenging one, the plan to reduce costs and increase efficiency set out in the Business Plan becomes highly significant.
The plan, envisages a cumulative cost reduction of around 4 billion euros (based on 2012 controllable costs) for the 2013-2017 period in the Group's different geographic areas and sectors and mostly on the Italian and Spanish mature markets.
Also with respect to mature markets, the new plan provides for total investments of about 11 billion euros. More specifically, investments in generation assets will decline to 4.6 billion under the current plan from approximately 5.3 billion euros under the previous plan. Installed capacity will go from 59 GW in 2012 to 52 GW in 2017. Investments in distribution assets will increase to approximately 6.5 billion euros under the current plan from around 6.2 billion euros under the previous plan.
2. Increasing investments in growth markets of Eastern Europe and Latin America, as well as in renewables
With respect to growth markets, the new plan envisages a 2.5% increase in total capital expenditure compared with the 2012-2016 plan. More specifically, investment in development will increase to around 9.4 billion under the current plan from approximately 8.7 billion euros under the previous plan. Installed capacity will rise from 38 GW in 2012 to 43 GW in 2017.
3. Strengthening the financial structure and asset portfolio optimization
In order to strengthen the Group's financial structure and optimise its asset portfolio, the plan provides for:
- a plan of disposals of around 6 billion euros
- a programme of hybrid bond issues amounting to about 5 billion to be completed
by the end of 2015
4. Progress on Group's reorganization, also including minorities buy-out
During the plan period, the Group will pursue a structure-simplification strategy that will include minorities buy-out operations, which, once completed, are expected to increase the consolidated net income ownership at Parent Company level to 78% in 2017 from 65% in 2013.
5. Continued focus on financials
Thanks to the aforementioned actions, the Group is expected to generate cash flow from operations totalling around 59 billion euros over the plan period, which will finance capital expenditure of around 27 billion euros, reimburse financial charges for approximately 12.5 billion euros, and distribute dividends for approximately 11 billion euros.
Moreover, the implementation of the aforementioned disposal programme (around 6 billion euros) should contribute to the remaining Group total cash (around 14.5 billion euros), which will mainly be used to reduce consolidated net debt and finance minorities buy-out.