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1H 2007 results July 25, 2007 Dow Jones Sustainability Indexes Member 2007/2007
Highlights 1H 2007 results Solid earnings despite demanding environment -
Spain and Portugal: moderate demand and lower pool prices offset by Supply,
Distribution and Gas - Europe: volume recovery and development of renewable
capacity - Latin America: strong growth in Distribution offsets low hydro
production and gas restrictions Growth in line with 2007 targets
Consolidated Results EURM Change +2% -3% +3% +1% +4% 3,831 2,777
-494 1.24x 10,054 5,532 1,255 -29% 1H 2006 3,762 2,871 -480 1.24x 9,946 5,299
1,756 1H 2007 Positive earnings despite demanding environment CONSOLIDATED
RESULTS Revenues Gross margin EBITDA EBIT Net financial expenses Leverage EURM
Net income Like-for-like change(1) +3% +9% +8% +5% -3% +12% (1) Stripping out
the following exceptionals: - Recognition on 1H06 of revenues for non-mainland
generation deficit in 2001-2005, with a EUR227M impact on EBITDA, EUR31M on net
financial expense and EUR197M on net income. - EUR118M generated by the
restatementn 1H06 of the tax base of Endesa Italia’s fixed assets in
accordance with Italian law. - The tax credit of the Elesur-Chilectra merger,
with a EUR101M impact on 1H06 net income - Earnings from assets disposals with a
EUR225M impact on 1H06 net income and EUR7M on 1H07.
Consolidated Results Solid results thanks to diversified portfolio EBITDA:
EUR3,831M Spain and Portugal Latin America Rest of Europe 52% 16% 32% EBIT:
EUR2,777M Net income: EUR1,255M Spain and Portugal 70% Rest of Europe 16% 34%
Rest of Europe 16% Spain and Portugal 50% 14% Latin America Latin America
Consolidated Results Efficiency Improvement Plan: ahead of schedule
CONSOLIDATED RESULTS EBITDA improvement due to Efficiency Plan 171 96 204 695
139 385 2005 2006 2007 2008-2009 Total 2009 EURM 1H07 incremental growth:
Europe: EUR19M Latin America: EUR6M Spain and Portugal: EUR71M 69% of 2009
target already achieved
Consolidated results Growth in line with targets EURM EBITDA 7,139 EURM
EBITDA +8% 3,535 2,824 1H 7,440 227 227 (1) Recognition of revenues for
non-mainland generation deficit for 2001-2005: EUR227M in 1H06 and for FY06.
3,831 (1) (1) 6,020 2005 2006 2007 target
Consolidated Results Positive cash flow generation EURM 1.475 123 EURM
Spain and Portugal After-tax operating cash flow (1) Total net investment (2)
Rest of Europe Latam Group Cash flow before dividends 2,202 1,640 562 (1)
Equivalent to“Net cash flows from operating activities”; (2)
Equivalent to “Net cash flows used in investing activities" (includes
financial investments and capex) 479 382 248 1.135
Consolidated Results EUR1,736M paid out in dividends against 2006 earnings
EUR/sh Ordinary activities + 100% capital gains Total dividend 0.37 1.64 +12%
1.27 1.1334 Interim: EUR0.50/sh (Jan 07) + Final: EUR1.14/sh (Jul 07) Dividend
2006 Disposals 2006 Ordinary activities 2006 Ordinary activities 2005 Progress
in the Strategic Plan: over EUR9,900M in five years EUR4,425M(1) paid out in the
first two years: 45% of 5Y target (1) Includes EUR148M attendance premium paid
to shareholders who signed up to attend the Extraordinary Shareholders' Meeting
scheduled for March 20, 2007 which in the end did not take place
Consolidated Results Stable debt level EURM +2% By Company 56 12,548 14,351
12,719 1,674 1,719 56 1,024 66 5,618 5,207 5,874 1,640 2,202 By Company Latam
Rest of Europe Spain, Portugal and other Enersis E. Italia Spain, Portugal and
other EURM 19,840 20,312 20,312 17,429(1) Net debt excluding regulatory
receivables pending collection at 30/06/07 Net debt at 31/12/06 Net debt at
30/06/07 by business After-tax operating cash flow Investments + disposals
Dividends Exchange rate Others Net debt at 30/06/07 by company Net debt
excluding regulatory items: EUR17,429M (1) The breakdown of regulatory
receivables is provided in the Appendix (page 40)
1H 2007 results Spain and Portugal Dow Jones Sustainability Indexes Member
2006/2007
Spain and Portugal Earnings growth EURM 1H 2007 Change 2,001 1,372 -190
4,832 3,039 Net income 873 2,030 1,503 -192 4,826 2,953 961 1H 2006
Like-for-like change(1) +11% +8% +20% -1% -9% -1% 0% +3% -9% +5% +11% -15%
Revenues Gross margin EBITDA EBIT Net financial expenses (1) Stripping out: (a)
non-recurring effect of the non-mainland deficit in 1H06: EUR227M at the EBITDA
level, EUR31M on net financial expenses and EUR197M impact on net income; and
(b) earnings from assets disposals with a EUR40M impact on 1H06 net income and
EUR6M on 1H07.
Spain and Portugal Significant EBITDA growth Highlights Moderate growth in
demand and lower pool prices Leadership and margin enhancement in deregulated
business Lower CO2 emissions and cost Significant improvement in earnings in
Distribution and Gas activities Progress on the regulatory front Generation +
Supply Distribution 1H07 2,030 2,001 +11% EBITDA 553 1,243 1,250 1H06 EURM 758
Non-mainland deficit 227 +37% -0.6%
Spain and Portugal Leadership and revenue enhancement in deregulated
business SPAIN AND PORTUGAL Sales in deregulated market acted as a hedge against
the fall in pool prices Renewal and execution of new contracts in 1H07 at a
price equivalent to EUR56/MWh (EUR16MWh higher than wholesale market) Generation
Sales GWh (1) Includes -EUR121M in 1H06 and -EUR9M in 1H07 following application
of Article 2 of RDL 3/2006 Average revenue from mainland generation(1) and pool
price Wholesale market 17% 52% 48% 83% Rest of the sector ENDESA Deregulated
market 52.6 43.9 39.6 66.0 EUR/MWh Pool price: -40% Dereg. revenues: +20% 1H06
1H07 49.9 49.0 Average Revenue: -1.8%
Spain and Portugal Competitive mainland fuel costs thanks to a balanced
generation portfolio (1) Estimates (2) Conventional thermal facilities excluding
fuel-oil Mainland fuel cost in Ordinary Regime Load factor of thermal plants(2)
vs. rest of the sector Even in a scenario with higher rainfall, ENDESA still
boasts the most competitive and efficient generation portfolio in the sector
EUR/MWh 21.3 15.9 Endesa Rest of the sector (1) 69.7% 49.3% Rest of the sector
Endesa
Spain and Portugal Lower CO2 emissions and costs 16.05 Mainland emissions
deficit Mtn CO2 Economic impact (1) Average CO2 Price EUR/tn CO2 EURM x = SPAIN
AND PORTUGAL (1) Also, the updated value of 2006 CO2 emissions included in the
balance sheet until April due to falling prices, had a positive impact on EBITDA
of EUR41M and a negative one of the same amount in depreciation. (2) Due to
adjustment in market value of rights consumed in 1H07, under IFRS, included
under depreciation and amortization. An additional EUR19M adjustment was made to
the depreciation charge to reflect the decline in the market value of the CO2
emission rights purchased and not used. During 1H06 this figure amounted to
EUR9M. 0.12 1H07 1H06 18.2 3.5 Deficit Deficit -1% 18.1 4.5 1H07 1H06 Portfolio
depreciation (2) 68 -81% 12 13 56 12 1
Spain and Portgual Significant improvement in earnings in Distribution and
Gas activities Gas Business Gross Margin 1H07 1H06 Total gas sales: up 25% Gas
market share: 13.3% EURM Improved remuneration Quality continues to improve:
interruption time decreased 34% in the last twelve months Distribution Business
EBITDA 1H07 1H06 +37% EURM 106 +73% 553 758 67 116
Spain and Portugal Progress on the regulatory front SPAIN AND PORTUGAL
Additive tariff New tariff methodology for 2007 Quarterly updates Progress
during 1H07 Moving towards full liberalization and market price recognition New
Renewables R.D. Enhanced pricing and shorter retroactivity vis-à-vis draft
Reasonable return on investment Co-combustion given boost Transposition of EU
Directive Distribution and supply activities unbundled Regulated tariff to
disappear by 2009 Supply of last resort Tariff adjustment in July 2007
Residential rates not increased Large customers: +1.9% Mid-size customers: +5%
NAP 2008-2012 53.6 Mton annual average allocation to the electricity industry
(-37% vs NAP 05- 07) Equitable treatment of all technologies Tariff deficit
recognition
Spain and Portugal Progress on the wholesale market regulatory reform
Wholesale market new scheme: Receives market price Forward energy sales: forward
market, VPPs and bilateral contracts Tariff deficit less significant Iberian
peninsula Generation: energy sales Distribution: energy purchases to serve
regulated customers Full acknowledgment of the energy cost Energy purchased
through regulated auctions, the forward market and in the pool Energy volumes
falling Supply: energy purchases to serve deregulated customers Improvement of
the commercial margin now that the tariff deficit is partially transferred to
the access tariff Energy acquired via bilateral contracts, VPPs, the forward
market and in the pool Energy volumes on the rise
Growth in line with targets EBITDA 3,266 2005 2006 3,835 1,545 2,001 1H
EURM 2007 target 4,010 1,803 +11% +11% 227 227 (1) Recognition in 2006 of
revenues from non-mainland generation deficit in 2001-2005: EUR227M in 1H06 and
FY 06 (1) (1)
1H 2007 results Europe Dow Jones Sustainability Index Member
2006/2007
Europe 1H 2007 Change +3% -2% +48% -5% +3% 607 449 -37 1,992 782 -36% 206
1H 2006 587 459 -25 2,087 759 322 +1% Like-for-like change(1) EUROPE Solid
results despite unfavourable market environment Revenues Gross margin EBITDA
EBIT Net financial expense EURM Net income (1) Stripping out non recurring
effects in 1H06: (a) the impact of the restatement of the tax base of Endesa
Italia’s fixed assets (EUR118M on net income) in accordance with Italian
law; and (b) earnings from asset disposals with a EUR1M impact on net income
Europe Positive EBITDA performance EBITDA EURM Highlights Business recovery
noted in 2Q07 Margins increased despite falling prices Progress on renewables
capacity plan Energy management: extracting additional value from its European
asset portfolio Progress made on contributions to Endesa Hellas 587 607 +3% 485
503 102 1H06 1H07 Endesa France Italy Other 108 0 -4 +4% +6%
Europe Italy: business activity under recovery EUROPE Recovery of the
business activity throughout 2Q07 following the drop in 1Q07 (due to
temperatures and low rainfall) Increase in unit margin due to: Hedged
by bilateral contracts and contracts with Acquirente Unico. Decline
in CO2 prices Greater self-procurement of Green Certificates (62% vs
21%) from renewables and biomass Progress on renewables plan (1) Includes energy
produced and purchased Origin and destination of 1H07 Sales(1) (GWh) % Chg vs.
1H06: -3% Unit margin Italy 1H06 30.4 EUR/MWh +7% Supply & large customers
Destination Origin Sole acquiror Pool 75% 16,314 19% 10% 71% 16% 9% 16,314
Imports Own output Other purchases 1H07 32.6 EUR/MWh
Europe Italy: significant progress on renewables plan EUROPE
Wind Capacity in Italy (MW) 2009 green certificates target (GWh) Procurement
1,482 847 Needs In Italy Endesa currently has 152 MW of wind capacity. The goal
is to double this figure by 2009 In 2009 excess generation of green certificates
will translate into a positive margin of approx. EUR83M (vs. losses of EUR50M in
2006) 2005 2006 2007e 2009 target + Biomass: Co-combustion in coal groups +
Mini-hydro: Renovation of 13 in Terni 175% 62% 21% GC selfprocurement: 20 58 196
318 1H07: 152
Europe Endesa France: EBITDA growth despite low prices Revenues 17.0
EUR/MWh Unit margin France 18.1 EUR/MWh 1H07 1H06 EdF contract Forward and day
ahead mkt Supply Poland 33% 35% 22% 10% 24% 33% 34% 9% 9,172 9,857 -7% (GWh)
Decrease in volumes: lower demand (-6%) and prices Increase in unit margin:
Output hedged by forward sales and EDF contract Increasing contribution from
non-EDF sales Lower fixed costs: -7% Progress on the Industrial Plan - First 10
MW of wind capacity operational - Emile Huchet (800 MW) and Hornaing (400 MW)
CCGTs authorized and contracted - Lucy (400 MW) CCGT authorized
Europe Growth in line with targets EBITDA 887 2005 1,116 587 +3%
1H +3% 453 EURM 2007 Target 607 1,150
1H 2007 results Latin America Dow Jones Sustainability Indexes Member
2006/2007
Latin America Continued strong growth in operating results 1H 2007 Change
EURM Revenues Gross margin EBITDA EBIT Net financial expense Net income before
tax and minorities Net income +7% +5% -42% +2% +7% +8% 1,223 956 176 -267 3,230
1,711 -3% 685 (1) Stripping out the following one-off items from 1H06: (a)
non-recurring EUR101M impact on net income due to the tax credit of the
Elesur-Chilectra merger, and (b) net capital gains in connection with asset
disposals of EUR14M (EUR34M gross) on 1H06 and of EUR1M (EUR1M gross) on 1H07
Note: 11% EBITDA growth in local currency 1H 2006 1,145 909 302 -263 3,033 1,587
707 Like-for-like change(1) -7% +2%
Challenging Generation environment offset by strong growth in Distribution
Highlights Sharp growth in demand in all countries Generation affected by low
rainfall and gas restrictions Significant increase in Distribution sales and
margins Cash returns in line with the Strategic Plan targets Upgraded credit
ratings at Enersis and Endesa Chile 1,145 1,223 +7% EBITDA 556 619 637 613 1H07
1H06 EURM -24 Distribution Other Generation and Transmission -33 +11% in local
currency
Latin America Sharp growth in demand 4,159 3,339 5,514 6,058
9,558 9,147 1,864 2,174 8,741 9,018 29,836 +0.3% Generation Output 1H07 1H06
Argentina Brazil Chile Colombia Peru 2,582 2,398 5,562 5,193 6,449 6,088 7,960
7,596 7,887 7,274 Distribution Sales 30,440 +7% 29,736 28,549 1H07 1H06 Low
rainfall implied generation output could not meet the sharp growth in demand GWh
GWh
Latin America Stable EBITDA in generation despite low hydro production Fall
in hydro output (-8%) and greater use of liquid fuels due to gas restrictions
High energy prices boost unitary margins LATIN AMERICA Generation EBITDA(1) +1%
Generation unit margin 28.3 EURM (1) Includes EBITDA from Transmission. 79 75
107 118 291 258 69 95 67 73 1H07 1H06 Argentina Brazil Chile Colombia Peru 613
619 +6% in local currency +9% 1H06 1H07 26.0 28.3 USD/MWh
Latin America Strong EBITDA growth in Distribution, especially in Argentina
and Brazil Application of new tariffs in Argentina Better margins in
Brazil due to lower sector surcharges LATIN AMERICA +8% 39.2 (1) 36.2 1H06 1H07
Distribution EBITDA Distribution unit margin (1) Does not include retroactive
effect of increased tariffs at Edesur (Nov 05 to Jan 07). 42 47 129 133 102 98
232 276 83 51 Argentina Brazil Chile Colombia Peru +15%(1) 556 637 1H07 1H06
EURM +17% in local currency USD/MWh
Latin America Cash returns in line with the Strategic Plan LATIN AMERICA
57% of the 2005-09 Strategic Plan fulfilled: USD1,600M USD184M from Enersis
dividend against 2006 earnings S&P upgraded Enersis and Endesa Chile to BBB
(stable) 1H07 (USD, million) Dividends and interest Capital reductions and
others Disposals Total 13 330 343 340 537 904 27 2005-06 327 207 561 27 Total
Latin America Growth in line with targets EBITDA 1,878 2005 2007 Target
2,280 1,223 +4% 1H +7% 831 EURM 2,188 1,145 2006
Conclusions Results in line with announced targets despite demanding
environment Inherent value in diversification and vertical integration Active
management of the businesses through an experienced and committed team
CONCLUSIONS
1H 2007 results Back Up
Appendix: Endesa Installed capacity and output(1) Installed capacity Spain
and Portugal 23,280 3,398 6,128 1,292 5,363 Europe Latin America Total 9,879 -
3,783 162 1,014 47,772 3,398 10,448 1,454 14,692 1,620 2,740 7,496 5,479 2,180
10,014 MW at 30/06/07 Total Hydro Nuclear Coal Renewables and CHP Gas Natural
Fuel oil Output Spain and Portugal Europe Latin America Total TWh 1H07 (% chg
vs. 1H06) Total Hydro Nuclear Coal Renewables and CHP Gas Natural Fuel oil 16.2
- 7.1 0.1 0.8 6.7 1.6 -13% . -20% +550% -43% +13% -40% 92.4 11.7 27.2 1.6 24.2
17.4 10.3 -1% +1% -3% +30% -6% +11% -7% APPENDIX: ENDESA (1) Data for
fully-consolidated companies only. 46.4 11.7 19.0 1.5 4.7 3.6 5.8 +3% +1% +3%
+25% +19% -8% +2% 29.8 - 1.1 - 18.7 7.1 2.9 +0% - +30% - -8% +22% +4% 14,613 -
537 - 8,585 3,136 2,355
Appendix: Endesa Progress on capacity plans APPENDIX: ENDESA Spain and
Portugal CCGTs: +3,200 MW Non-mainland: +850 MW Renewables: +840 MW TOTAL :
+4,890 MW Europe Latin America CCGTs Italy: +800 MW Renewables Italy: +260 MW
CCGTs France: +800 MW Renew. France: +200 MW TOTAL : +2,060 MW Hydro: +40 MW
Thermal: +735 MW Renewables: +50 MW TOTAL : +825 MW New capacity 07-09(1) Spain
and Portugal CCGTs: +800 MW Non-mainland: +154 MW Renewables: +327 MW Europe
Latin America CCGTs Italy: Renewables Italy: +138 MW CCGTs France: Renew.
France: +10 MW Hydro: +82 MW Thermal: +316 MW Renewables: +18 MW Start up of San
Isidro II gas turbine plant (284 MW) Construction started on Quintero LNG and
supply contract signed Bocamina II (345MW) construction contract awarded Guavio
hydro facility repowering (+50 MW) Start-up of Palmucho (32MW), Termocartagena
(2nd unit, 68MW) and Canela (18MW) slated for 2H07 94 MW of renewable capacity
commissioned in Italy. Start up of M.A Severino Farm (44 MW) on 2H07 First wind
farm in France (10 MW) Emile Huchet (800 MW) and Hornaing (400 MW) CCGTs
authorized and contracted. Lucy (400 MW) CCGT authorized. (1) New capacity
program announced in Jan-07 updated with new renewables capacity in Europe
Repowering of As Pontes 3rd coal group under execution Start up of As Pontes
CCGT (800 MW) in August
Appendix: Endesa Endesa CO2 emissions in the EU APPENDIX: ENDESA Total
Spain (1) Italy France Poland 26.8 6.0 17.8 1.1 0.4 31.5 6.1 22.9 0.6 0.4 4.7
0.1 3.5 -0.5 0.0 Portugal 1.5 1.5 0.0 1H07 allocation (MTon CO2) 1H07 emissions
(MTon CO2) 1H07 deficit (MTon CO2) (1) Mainland and non-mainland. Non mainland
deficit is remunerated
Appendix: Endesa Endesa's CDM portfolio: 100 Mton CO2 Mt Mt Technological
breakdown (45 projects) APPENDIX: ENDESA 3.1 24.9 55.7 5.3 9.7 0.3 Africa Asia
Funds* Latam 3.5 24.9 3.4 14.1 32.0 6.4 0.5 4.1 6.2 0.3 0.8 0.2 0.7 0.3 2.7
Biomass Methane capture Energy efficiency Wind HFC23 Hydro Landfill methane
recovery Multiple* Other 0.8 0.7 6.2 6.4 32.0 14.3 4.2 25.2 7.6 2.7 MSW
incineration 65.4 25.2 8.4 1.1 ERPA signed LOI signed *Each fund is accounted
for as a discrete project Geographic breakdown (45 projects)
Appendix: Endesa Favourable debt structure in a context of rising interest
rates Debt by interest rate structure Debt by currency Debt structure Euro 74%
USD 11% Chilean Peso 5% Other 10% Fixed 51% Hedged 10% Floating 39% Debt
structure: - Fixed-rate or hedged: 61% (1) - Debt in currency in which cash flow
is generated Average cost of debt: 5.77% - Endesa excl. Enersis: 4.51% -
Enersis: 9.34% Leverage: - Net debt/Net equity: 1.24x (1) Average life of debt:
5.3 years Liquidity at Endesa: - Endesa excl. Enersis: EUR6,500M - Enersis:
EUR1,039M 20,312 EURM Main debt characteristics (1) If recognised regulatory
items were collected, fixed-rate of hedged debt would represent 71% of the total
debt and the leverage ratio would be 1.06x
Appendix: Endesa Debt structure aligned with needs and business risk
Currency risk is mitigated by denominating debt in the same currency in which
cash flow is generated High percentage of interest rate hedging reduces
volatility in financial expenses 100% 74% 41% 21% 11% 5% 38% 10% Endesa excl.
Enersis Enersis TOTAL Currency hedging Debt (EURM) 15,105 5,207 20,312 Euro USD
Chilean peso Other 43% 75% 51% 11% 10% 46% 20% 39% 5% Endesa excl. Enersis G.
Enersis TOTAL Interest rate hedging Fixed rate Hedged Floating rate APPENDIX:
ENDESA 15,105 5,207 20,312 Debt (EURM)
Appendix: Endesa ENDESA debt maturities excluding Enersis Balance of debt
maturities: EUR15,593M (1) EURM Bonds Promissory notes (2) Bank debt (1) This
gross balance differs from the total financial debt figure as it does not
include transaction expenses pending accrual or the market value of derivatives
which do not involve any outlay of cash. (2) Notes issued are backed by
long-term credit lines and are renewed on a regular basis. (3) Maturity hedging
is subsequent to dividend payment (July 2,2007). Liquidity at June 30, 2007
covered 32 months APPENDIX: ENDESA ENDESA's liquidity excluding Enersis is
EUR6,500 M (EUR284M in cash and EUR6,216M in available credit lines), sufficient
to cover debt maturities falling due during the next 23 months 941 336 137 10
4,294 1,974 30 1,615 326 471 2,741 345 595 1,778 2009 2010 2,403 2012+ 2H07 2008
2011 1,404 2,319 481 1,951 7,035
Appendix: Endesa Enersis debt maturities Balance of debt maturities:
EUR5,656M (1) (1)This gross balance differs from the total financial debt figure
as it does not include transaction expenses pending accrual or the market value
of derivatives which do not involve any outlay of cash. APPENDIX: ENDESA
Enersis' liquidity stands at EUR1,039M (EUR527M in cash and EUR512M in available
credit lines), sufficent to cover debt maturities falling due during the next 19
months EURM Bonds Bank debt 649 143 338 552 341 254 408 2,060 441 16 276 178
2,468 2012+ 2011 592 484 1,201 2H07 2008 717 194
Appendix: Endesa Breakdown of EBITDA growth targets by business line:
2006-09 4,630 4,320 4,010 3,835 2,470 2,360 2,280 2,188 1,400 1,280 1,150 1,116
2006 2007E 2008E 2009E EBITDA EURM 7,139 7,440 7,960 8,500 Europe Latam Spain
and Portugal
Appendix: Endesa Net income target growth Ordinary income Capital gains
from disposals EURM 3,075 2,620 2,830 2,969 APPENDIX: ENDESA Net income 2006
2007E 2008E 2009E 2,576 2,470 2,720 2,970
Appendix: Spain and Portugal Generation output in Spain and Portugal
APPENDIX: SPAIN AND PORTUGAL 11,719 11,609 4,001 4,743 16,821 17,569 3,574 3,882
476 157 1,540 1,236 1H06 1H07 Endesa's mainland generation output Nuclear Hydro
CCGT Coal Fuel +6% +1% 39,302 38,025 3% R.E Hydro and nuclear: Conventional
thermal: +25% Renewables/CHP: +6% -6% Hydro and nuclear: Conventional thermal:
+9% Renewables/CHP: Change for rest of sector Change at ENDESA GWh
Appendix: Spain and Portugal Competitive mainland fuel costs (1)
EUR32.0/MWh in 2007 and EUR28.6 in 2006 ex-ATR. (2) Net of coal premiums. Gross
cost was EUR25.2/MWh in 2007 and EUR23.6/MWh in 2006. Includes imported coal
consumed by national coal plants. Breakdown of impact on fuel costs Breakdown of
mainland unit fuel costs EUR/MWh 1H06 1H07 CCGT (1) 36.5 13.1% Domestic coal (2)
22.0 4.6% Imported coal 19.8 -3.9% Fuel 76.4 87.3% Total average 15.8 0.7% % chg
Average conventional thermal output 19.0 143.2 15.9 26.2 25.4 3.1% 1H06 1H07 580
Increase in raw material prices Better mix and lower thermal output +40 -20 EURM
32.3 23.0 600
Appendix: Spain and Portugal Renewables and CHP technologies strongly
affected by drop in pool prices (1) Accounting output (corresponding to booked
sales) EBITDA (EURM) -5% 94 1H07 1H06 89 Sale price renewable/ CHP 95.8 EUR/MWh
84.7 EUR/MWh -12% Output(1) 1,236 GWh 1,540 GWh +25%
Appendix: Europe Integrated management of asset portfolio Trading EBITDA:
EUR21M Additional contributions: - Endesa Italia: EUR15M - Endesa France: EUR8M
16 GWh 776 GWh 18 GWh 25 GWh 5 GWh 20 GWh 7 GWh Physical assets Virtual assets
Interconnection 100 GWh 15 GWh NORD POOL DAM APX EEX Powernext GME
Appendix: Europe Renewables in Europe: wind projects APPENDIX: EUROPE
Operational capacity Capacity under construction (1) (1) Only includes capacity
under construction and not under development 1Q10 Total Italy Total France 1Q08
2Q08 190 54 58 64 10 MW 1Q08 2 Monte Cute expansion Piano di Corda Serra Pelata
4Q07 44 M.A. Severino Ambon 2Q08 18 Cernon 3Q08 10 Muzillac 1Q09 8
Ampliación Iardino 2Q09 26 Kergrist 24 Alcamo Expected start-up Gross
capacity Start-up 3Q05 3Q06 1Q04 1Q07 1Q07 Gross capacity 152 14 24 42 20 10 10
20 MW Total Italy Iardano Vizzini Monte Cute Total France Lehaucourt Poggi Alti
Trapani 2Q07 Fiorinas 1Q07 32
Appendix: Europe Endesa Hellas: strategic alliance with Mytilineos Group
Assets (MW): Date of operation: Leveraging know-how and track record in Italy
and France EUR485M + Success premium + Price adjustment Total
EUR600M IRR 10% 49.99% Also, CCGT and coal option Renewables CCGT CHP
400 150 412 511 54 June 2007 June 09 In operation 2010 2012 Greece is one of the
most attractive markets in Europe: scarce capacity, high prices and entry
barriers Endesa Hellas' 2009 EBITDA target: EUR80M 50.01%
Appendix: Latin America Highlights by country APPENDIX: LATIN AMERICA 1H07
EBITDA (EURM) Dist: EUR83M (+63%) Gen: EUR73M (+9%) Brazil Highlights Argentina
Better margins in Distribution in Brazil due to lower sector surcharges Tariff
revisions at Coelce (provisional VAD down 7%) Annual tariff revision at Ampla
(VAD +10%) Lower output due to gas shortage at Fortaleza thermal plant Cien:
progress on the negotiations on a new retribution model. Export agreement with
CAMMESA Strong appreciation of the Brazilian real (+11% vs. USD) Dist: EUR276M
(+19%) Gen: EUR95M (+38%) Peru Sharp jump in demand (+7%) at Edelnor Strong
increase in output (25%) due to higher rainfall and commissioning of Ventanilla
CCGT Saturation at interconnection between northern and central systems
affecting generation contracts 2.4% increase in “barra” prices (energy
price) Sharp sales growth (+8%) Application of new distribution tariffs (+38% in
dist. cum. value/VAD); recognition retroactive to Nov 2005 Supply outages and
lower output due to lower rainfall Acquisition of 5.5% of Costanera and 17.2%
(d+i) of Chocón 12%) Gen: EUR75M (-5%) Dist: EUR47M (+12%)
Appendix: Latin America Highlights by country APPENDIX: LATIN AMERICA 1H07
EBITDA (EURM) Highlights Colombia Higher revenues in Distribution on the back of
higher demand (+7%) Fall in output (9%) due to lower rainfall and increased
maintenance work (Guavio hydro plant) Increase in capacity at Guavio hydro plant
(+50 MW) due to operating enhancements at the plant (Feb 07) Strong appreciation
in the Colombian peso (+14% vs. USD) Implementation of the wealth tax (EUR29M
EBITDA) Dist: EUR133M (+3%) Gen: EUR118M (+10%) Lower rainfall and gas
restrictions from Argentina. High utilization of liquid fuels San Isidro II gas
turbine (248 MW) commissioned. CCGT closure expected by 2008 “Nudo”
prices raised to USD73/MWh (+6%) Construction work on Quintero LNG plant begun
Construction contract for Bocamina II coal station ( 345 MW) contracted
Acquisition of 50% of GasAtacama and sales agreement with Southern Cross. New
agreement with mining companies Gen: EUR258M (-11%) Dist: EUR98M (-4%) Chile
Appendix: Latin America Direct stakes held by Endesa Internacional
APPENDIX: LATIN AMERICA Direct 60,6% 60% Generation business Operating companies
Distribution business Codensa: 27% 129 133 403 Emgesa: 25% 90 105 228 EEB: 5%
N/A N/A N/A E. Brasil: 28% 304 373 878 Edesur: 6% 51 83 46 DockSud: 40% 18 18
137 Edelnor: 18% 42 47 143 Edegel: 6% 72 69 301 Piura: 48% 7 6 4 Pangue: 5% 30 7
107 % direct stake Proportional EBITDA 169 195 EBITDA 1H06 Debt June 07(*) EURM
EBITDA 1H07 (*) Total Net Debt. Includes intercompany borrowings of EUR26M in
Endesa Brasil; EUR61M in Dock Sud and EUR103M in Pangue
Appendix: Latin America Enersis and Endesa Chile, trading at record levels
Stock market performance over last 5 years The stocks' performance underscores
the track record of and favourable outlook of the Latin American subsidiaries
+528% +281% Endesa Chile (ADR) Enersis (ADR) Market cap (US$M) 12,592 12,342
Close to record high Close to 6-year high Stock market rise 02 jul-03 jul-04
jul-05 jul-06 jul-07 Jul 02 Jul 03 Jul 04 Jul 05 Jul 06 Jul 07 Source:
Bloomberg. Data from 19-Jul-02 to 19-Jul-07
Appendix: Latin America Significant unrealised capital gains in Latin
America APPENDIX: LATIN AMERICA * Market value of Endesa’s stake in
Enersis and book value for rest of portfolio (plus an estimated EUR600M in
additional market value) Enersis Other stakes EURM 7,400 4,000 5,800 3,000 1,000
1,000 600 Market value 30-jun-07* Book value 30-jun-07 Latam Assets Value
Legal Information This document was made available to shareholders of
Endesa, S.A.. In relation with the announced joint offer by ENEL SpA and
Acciona, S.A., Endesa shareholders are urged to read the report of
Endesa’s board of directors when it is filed by the Company with the
Comisión Nacional del Mercado de Valores (the "CNMV"), as well as Endesa's
Solicitation/Recommendation Statement on Schedule 14D-9 when it is filed by the
Company with the U.S. Securities and Exchange Commission (the "SEC"), as it will
contain important information. Such documents and other public filings made from
time to time by Endesa with the CNMV or the SEC are available without charge
from the Endesa’s website at www.endesa.es, from the the CNMV’s
website at www.cnmv.es and from the SEC’s website at www.sec.gov and at
Endesa’s principal executive offices in Madrid, Spain. 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 EBITDA
(gross operating profit as per ENDESA’s consolidated income statement)
target for 2007-2009 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 Comisión 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.
1H 2007 results July 25, 2007 Dow Jones Sustainability Index Member
2006/2007
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.
