Enel 2023-2025 strategy: repositioning of businesses and geographies, focus on sustainable electrification

·         In the 2023-2025 Plan period, the Group expects to:

o    Concentrate on integrated value chain pursuing sustainable electrification, which is increasingly needed in global energy systems, covering approximately 90% of its fixed price sales with carbon-free electricity in 2025, bringing renewable generation to around 75% of total as well as reaching around 80% of digitalized grid customers

o    Strategically reposition businesses and geographies, with a disposal plan worth around 21 billion euros in terms of positive contribution to the reduction of Group Net Debt. The bulk of this plan is expected to be rolled out by the end of 2023, resulting in a more agile company focused on six “core countries[1]

o    Secure growth and financial strength by coupling a 10-13% Compound Annual Growth Rate (“CAGR”) in Net Ordinary Income with a FFO/Net Debt ratio of 28% expected from 2023, alongside maintaining a Dividend Per Share (“DPS”) of 0.43 euros for 2023-2025, up from 0.40 euros in 2022, whereby DPS in 2024 and 2025 is to be considered as a sustainable minimum

·         Towards these aims, between 2023 and 2025, the Group expects to invest a total of around 37 billion euros, of which 60% supporting the Group’s integrated commercial strategy (generation, customers and services), and 40% allocated to grids to support their role as enablers of the energy transition

·         The focus will be on four strategic actions:

(i)            balance customers’ demand and supply to optimize the risk/return profile

(ii)           decarbonization to ensure competitiveness, sustainability and security

(iii)          reinforce, grow and digitize networks to enable the transition

 

(iv)          streamline portfolio of businesses and geographies

·         In 2025:

o    Group Ordinary EBITDA is expected to reach 22.2-22.8 billion euros, compared to 19.0-19.6 billion euros estimated in 2022

o    Group Net Ordinary Income is expected to reach 7.0-7.2 billion euros, compared to 5.0-5.3 billion euros estimated in 2022

 

Financial Targets

 

 

 

 

 Earnings growth

2022E

2023

2024

2025

Ordinary EBITDA (€bn)

19.0-19.6

20.4-21.0

21.4-22.0

22.2-22.8

Net Ordinary Income (€bn)

5.0-5.3

6.1-6.3

6.7-6.9

7.0-7.2

Value creation

 

 

 

 

DPS (€/share)

0.40

0.43

0.43*

0.43*

* Minimum DPS

Francesco Starace, CEO and General Manager of Enel said: “In the next three years, we will focus on integrated business models, digital know-how as well as businesses and geographies that can add value despite the current challenging scenario, embracing a leaner structure and a more robust set of financial ratios. This will increase our resilience to potential future continued turbulence, as well as position our value creation towards further growth, benefitting all our stakeholders and accelerating energy independence in our core countries. Sustainability, which is fully embedded into our decisions, continues to be at the foundation of our Strategy, also leveraging on the acceleration of electrification across economies. These results will be achievable thanks to the highly skilled and motivated colleagues at the Enel Group and the digital platform organizational structure we have set up for the Group.

 

[1] Namely: Italy, Spain, the United States, Brazil, Chile and Colombia.

Enel Strategic Plan 2023 2025

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