The New Strategic Plan 2018-2020, presented to the financial markets and the media on 21 November 2017, confirms the cornerstones of the Enel Group’s strategy and is boosted by some further enhancements and a step up in pace.
Digitalization and Customer Focus, introduced in 2017, continue to be key enablers of the strategy. The Group’s focus on its customers is benefitting from an increase in momentum thanks to the introduction of the new Global Business Line e-Solutions.
The strategic plan is designed to further enhance the Group’s delivery of attractive shareholder remuneration and sustainable long-term value creation for all stakeholders.
On the enablers, the Group plans the following strategic actions:
1. 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).
2. 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. The e-Solutions business line will be coming to market in 2018 under a new brand, Enel X.
3. 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.
4. 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.
5. 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.
6. 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.
This progress against the strategic plan has allowed the Group to maintain all financial guidance for 2017 and exceed the minimum dividend per share guaranteed for the year, despite a more challenging environment than that envisaged in the previous plan.
The sustainability of the strategy is also substantiated by the rapid progress made in terms of the Group’s contribution to the 17 United Nations Sustainable Development Goals (SDGs).
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