The new Plan 2017-2019 presented in November 2016, introduces digitisation and customer focus to the strategic pillars presented last year. These two new levers will enable Enel’s strategy to accelerate value creation for the Group’s shareholders:
- Digitisation: 4.7 billion euro investment to digitise Enel’s asset base (mainly in networks, renewables and thermal generation), operations and processes and enhance connectivity, will enable us to accelerate efficiency and growth.
- Operational Efficiency: The new digital lever will allow the Group to achieve cost efficiency target. Cash cost target has been fixed now at 10.6 billion euros in 2019, 500mln euros lower than previous plan thanks to digitization plan.
- Industrial Growth: Asset digitisation plan will drive an increase in investments in networks and retail. Almost 90% of growth Capex is dedicated to renewables energies business and networks.
We have achieved our growth EBITDA target of 800 million euros in 2016, almost secured our 2017 and already achieved about 70% of the target for 2019 thanks to about 60% of growth capex already in execution. In renewables we also introduced a new business model: the BSO (build sell and operate), which will allow us to grow faster and crystallize value creation earlier.
- Customer focus: Emphasis on enhancing customer operations to protect and grow Enel’s most important asset, its portfolio of over 60 million end-users; targeting 3 billion euro EBITDA contribution in 2019.
- Group simplification:
- Full integration of Enel Green Power ("EGP") and its generation portfolio, on 1/04/2016
- Reorganisation of Latin American operations:
- The first phase was completed with the separation of the Chilean activities from other Latin American countries
- The second phase is on track, the merger of the companies operating in Latin American countries other than Chile, has been completed, further simplification at country level has been targeted
- Active portfolio management: The 6 €bn program presented in November 2015 has been 70% completed in less than 2 years. For the next 3 years we plan to dispose 3 €bn of assets and to reinvest 4.5 €bn in: acquisitions mainly in networks (2 €bn), minorities buy out and possible share buy-back (2 €bn). Around 500 million will finance growth capex.
- Shareholder remuneration: The Group is on track to deliver a minimum dividend of 0.18 euros per share for 2016 that corresponds to an implicit payout of about 60%.
In light of the first half 2016 results and of the forecasts for the second half of the year relative to 2016 targets of the strategic plan we have been revised upward in 1H 2016.
Given our confidence in the plan we have improved our dividend policy and introduced a minimum dividend per share for 2017, furthermore recently we reintroduced the interim dividend payment.
In summary, the 2017-2019 Plan pursues the financial targets set out below.
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