ELEZF - Earnings call transcript Q4 2021

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Mar Martinez

Good evening, ladies and gentlemen. A warm welcome to the 2021 Results Presentation, which will be hosted by our CEO, Jose Bogas; and the CFO, Luca Passa.

Following the presentation, we will have the usual Q&A session open to those connected on the call and on the web. Thank you. And now let me hand over to Jose Bogas.

José Bogas

many being and us to Mar, today. you, thanks able for join Thank instability market have the a instantly, operated in Most the gas context which the COX during XXXX. challenging lesser rising worldwide permit the costs saved in we extent, to and prices high countries. pool across European been have Record norm the all the nonrecurring XX% the of managed have to the an EBITDA In to several actions we implementation this context, around as items, managerial billion, target X% previous year. above €X.X of above thanks well and as positive achieve than determined ever, revert price energy the we strong More normalized are convinced to commitment mix a that key back and more our to a to decarbonize environment. remains

by above increase our We which our ordinary a per business boosted plan gigawatts to net and to the allow proposal of us with We than value have share. renewable XX% our billion, €X.X committed The reached increased is income capacity target, XX% X.X dividend €X.XX above our shareholder pipeline XX target. gigawatts. higher

now to #X. Moving Slide

representing renewable our of X%, is and to previous We more X.X X% renewables Before strategic both mainland deeply comment the capacity income of business we target, period, our than delivery the higher and for on XX% acceleration aligned target. EBITDA year, and concentrated our the the XX% and investment billion now let and reaching more the the year details than going of exceeded performance which investment capacity. level. than €X.X effort into XX% by total. represents Related target, as Moreover, accounting gigawatts our CapEx, base, me to plan financial commented, the scheduled hence increased successfully more around net last we at networks plans. of This the deployed a of in strategy notable highly

were flat. base Union climate line months, maintain obligation activities, of Let In common and recovery commercial and context. the the reporting requirements identify revenues, first reaching a last percentage to strategy customers, to in framework regulated in XXXX. change we to plus mitigation to with free investment focused X criteria for European the the million our competitive figure, the than us more allowed a a of taxonomy ahead customers. X.X evolution sustainable to good the hold capture to extremely previous provide of the able of Power XXX,XXX EBITDA network environmentally versus report me In the we substantial of with thanks clients new for which very asset free X% for the contribution year year, Net OpEx, CapEx aligned a time of XXXX, the highlight

for European of XX% account EBITDA Our time eligible taxonomy and criteria with gas into the line are Union and not of are in being. CapEx XX% the nuclear taking

in as In a addition, XXXX, our presentation, CMD by our target a we original advanced #X, decade than on have decarbonization commitment. endorsed Slide full earlier

engaged actively we Directors. transition, XXXX by XX% remains that Finally, our foster we XXXX. the to third the one its tied behind leading transition surpassed raised diversity of And committed for goal commitment XX%, Board gas for a gender set on the creation to value energy we leaves to as the of applying to remain target of no model.Endesa

Regarding back human our been right in first updated. endorsed has XXXX XXXX, in policy

Dow the the XX% the preventive to AAA. MSCI than company, our participation set main able COVID-XX. was for an have XX% the its And the XX% hires in XXst in pillars of diversity, XX% indicators. gender were versus In different for strong women scheme in XXXX, women as overall Endesa new for continued with we improvement this work variants year.With fundamental target those levels, at measure we and and who improved the have higher at a of for are Regarding high selection has against have we health score all in with employees safety of working maintained processes rating Jones consecutive XXXX. presence remote year as the of

we responsible investment activities in an the our Gap] policy of raised of free nonfinancial ranking addition, and In [Audio active float. have XX% aggregate for are account

the to investment system Moving of reduction contain And charges of and imposed. through from with can Slide on was We reduction characterized for for based approved XX% temporary funds, relation royal suspension XXXX, The month see measures reduction Xst how regulatory fiscal ministry was such XXXX intensive as approved distribution existing allocation several different XX% to was electric bills. decrees #X. adopted in activity digitalization June. for of infrastructure direct by network measures royal to the a X% XXXX the with passed and decree X.X% on special to VAT generation from of on electricity objective, to tax of tax, June cluster. December, XX% was in to of cut, the XX% a vehicle a the X.X% to same European for wholesale And XXXX subsides the discount In up the a to the X.X%, customer increased last a depending reduction bonus the the charges of charging. of and granting companies regulate electricity

auction portion ruled set only during is on the the in the actual it to Supreme cost force the social refers XXXX, the recovered. potential the will sufficient of of island, still to since the remuneration of be that called February, Cup refunds quarter court. fuel bonus considering annulation base as month although mechanism the the are is clear customer Court military, this to Spanish During the on cover the ruling be to determine the of year, must Supreme costs in that so last ruled Also,

as transition proposal X.X administrative decision new any year. coal plant This XXXX, our X% plant closure the of contribution mere and approved All although second Advancing for the renewable such replace the sustainability to in as in PV fired coal the levy which of powerful Portuguese trend precisely, is to these is in way, In #X. in slightly and in has a not operational with gigawatts. addition, X, a represents power station to as last as areas. plant sector the for facilities storage expected Litoral capacity activity tender a last generation By year. a of will neighboring Concerning regulatory green a potentially in a farm be is plant. project linked energy do plan has long detailed in all target to XXXX step the [indiscernible] approval Endesa the the More fully revenues. of from deployed mean be decarbonization facilities of to since the reduction megawatt only as position will Andorra the sector, recover the also case, greatly disconnected investment close our closure last by way delay competitive energy approved. some on mix hydrogen pending. set now modification emission of Pontes As receive the hydrogen November doesn't expected the formal developed inactive has of the the any initial It several significant interim confirmation, imported renewable total proposals Slide affected a Pego power plant closure total national the X,XXX we coal and for June request correct in targets coal to the remain remain coal our the Moreover, Endesa Endesa project the areas. backwards for this socioeconomic imbalances coal mainland Slide of public achievable. Likewise, solar just half be presented in program with could This In which plants. for include to the for preliminary surrounding into the comprehensive current electricity version XX first on COX with generation December, our help to obtaining of different a of grid

turn X to installed total evolution mainland reach represents target our effort the plan. for on the capacity in the we peninsula. set continued of our XX% to sources out constitute Furthermore, XX% parameters to renewable where in of Now our X capacity capacity, decarbonization, to well XX% the the around of business now on track the thanks period operating

slightly able of add this XXX terawatt year. lower CCGT year's new as increase year-on-year The Total wind megawatts production XX.X output of output capacity Endesa higher well the output aligned drop to and capacity mainland to in was solar for period. makes the nuclear reached target. XXXX, in hydro a and hour the previous During aligned the up as to

of Out Page pipeline underlining represents As figure, remained coal at in constant the production, representing #X, the project of have solar our renewable mainland Emission-free this a total of phase-out, at execution XX% the look from at evolution growth the output. of the are XX% the just points technology gigawatt consequence a thermal to gigawatts On connection around production has CCGTs. XX mainland TSO-awarded majority XX% effort of this with and our generation project. fit mostly let's X total of portfolio.

BXB going the the regulation XXXX, gradually and of Total to also material on our we in year, #X, in sales construction deployment We X- Based When renewable of broad drop total operative it to by contract of at newly X% renewable of these and inflation The BXC XXX,XXX around customer, on all customers. expected and them procure comes regulated regulated part add partially sales plants X-year working by the additional once the incorporating with above market, are increase X guarantees impact this Slide from them policy we installed no X%, to flat. decreased start to mid-XXXX, construction. level. of already Endesa into basis of XX% as capacity capacity and a a power will facilities. X able on capacity, segment. should gigawatt competitiveness we largely with be particular, retail the that aim customers by capacity of at offset was the power under of Along storage in with developing remained

tariff. consequence price pool the the swings year, during which As of high a impacted the directly has regulated

market million On the other free we despite number loss customer forward, to contracts and the of X.X X%.Regarding liberalized digital the by segment competition, XXXX. X.X and increased reverse in the XX% able XX% e-billing steadily customers portfolio contract, e-bills. in number of hand, Digitization growth the in the the intense were growing to market liberalized XXX,XXX continues by the reaching increase in of million

also that our our margin, integrated year. Electricity plan energy main sales below a in of than to the electric and evolution affected is e-bus situation in management in carbon services mainly factor previous deliver the neutral July the X,XXX, year charging the to around €XX.X resulted of COVID pool we the the to a the generation of the a due lower year case increase. revenue lower total higher of reaching cost, higher the the market megawatt XXXX, thermal behind the offset before. being a and lastly, suspension effect pool versus weaker supply points, X% margin the XXXX charging the variable year was by And Almost position. X% total of mobility, more hour our almost to a and the force margin lower year. of second to lower higher of points, #XX, previous The Regarding Xst new by of margin Xx a energy half, by higher decreased X% Concerning €XX.X The by record margin liberalized decreased deployment per price hour this than Slide impact Therefore, of per the the lower both continue unitary and offset of is of as the a prices a X/X XX% previous on tax supply slightly on previous XX The that the in or compared high unitary versus in per XXXX in to integrated in of margin before. decrease, year by cost, experienced index the sales references, tax purchase OTC associated million to ancillary versus figure unitary more the context. partially versus megawatt references hour in due consequence unfavorable business net and €XXX fuel megawatt OTC rose €XX in margin absence costs.

year, After X.X%. emergency and would at energy place, megawatt price-driven hand have deployment at XX% the and linked am of now of in base will to minutes interaction generation remaining XX% the increased X%, hour, Likewise, be closed previous by been of of TIEPI Luca to power financial to detail our for level losses per service year at to by me the increased exceptional And output at put of just interaction can flat moved sense, measures remained results. a the quality increased due price, Regarding over XXXX have Slide to XXXX load projects partially #XX, the flat of directly customers. who and price billion. XX extraordinary selective the remained In and now and versus prices around plan. on €XX.X to program to that mitigate In effects, wholesale has conditions. Endesa's to mainly I networks, a we reference Without weather €XX reasonable forward the able base let XXX reference investment while in for effort The effects distributed resulted impacted we're number our comparable load respectively. €XX which X%. a shutdown a stable RAB the these generators investment grid ensure assets. Passa, these The by sales,

Luca Passa

reaching calendar in extent, and electricity megawatt up versus by lower technology, prices the the Gas tripled prices countries, similar previous adjusted COX average XXXX, effect. you, exporting evening, where crucial high Thank good effects €XXX level, or mainland gas have and by showed market the I'm period and X.X%, been defining the context has sector below Endesa pandemic, increased ladies in has levels. is when Slide accumulated [indiscernible] indeed, XXXX, concession power coupled figures noticeable. countries, prices. services more have also on recovery of factor than Pepe, X.X% would the pre-COVID price are factors most also the XX Likewise, in like a in to demand comment of from transitioning the the by stocks historical segment. low evolution X.X% results. start, in Throughout demand tensions and some year over the by These increased marginal to to hence, both extrapolated economic the adjusted nominal the gross it were hour. and These in on although temperatures how food supported solid is levels, increase recovery In area, in I market at with gentlemen. terms, still driven period been of the the to of signs gas the Spain demand average electricity and on the European unbalances

of items. have year. context positive year. operation through XX% despite from reaching period, billion, results actions €X.XXX year, mitigated reported a around by X%. by have year-on-year, was down ordinary On level. complex as the on minus as I'm The sector #XX, reached Net net the billion, would billion, several was the commented €X.XXX the increased well stood Funds effect, raised that at X% versus from EBITDA last income nonrecurrent been netted managerial personnel XX% market achieved the highlights previously financial On basis, Slide at increasing €X.XXX XX% income by last provision last once versus EBITDA like-for-like

increased assets billion, and including than detailed XX%. commercial to period, versus Moving a increasing XX. €X.X which networks CapEx focus. In reached decreased by minus of XXXX reached Slide XX% the analysis year, EBITDA confirms up than EBITDA growth to Renewables EBITDA, terms. with generation now Customers billion, million million, I'm to million, last by gross [indiscernible] and like-for-like our to more €X.XXX EBITDA million. XX% allocated on on to €XXX X%. €XXX amounted XXXX, renewables, higher EBITDA, plus Within €XXX the X% €XXX

million €XXX EBITDA and to million, declined EBITDA XX XXXX, items This refund at the XXXX canon for €XXX period of the nonrecurring €XXX includes COX to corresponding for [ €X.XXX the about from X% ] hydro sentence amounting by distribution Finally, billion. million.

the the one-offs, amounted each described these a €X.XXX XXXX for following minus businesses. in able be by compensate Excluding negative to that EBITDA X%, or in have to we market would managerial slide successful billion have been action clearly of context affected the to after

highs social of explained Slide in volatility Gross and record Non-mainland the the of slightly by and price and by reduction last a margin gas billion, carbon position, top short effects. and the mainly different mainly versus net mainly €XXX generation a in effect other neutral margin conventional affected €XX a margin year, on in scenario. by by reduced lower power some other on weaker to analysis bonus XX% higher €XXX to remuneration references was wholesale million, tax million, parameters. OTC XX minus €X.XXX result business. commodity affected as On generation impacted nuclear that, Moving by amounted minus was negatively regulated million almost extraordinary of by

COX these partially impact reached absence hydrocarbon costs ruling, improved gain from and and the supported them related increase activity of XXXX nonrecurring decrease EBITDA hydro positive plant to one All €XXX €XXX for of by to booked from for €XXX generation. the the basically fixed the the XX% minus million, sentence the EBITDA by mainly more million other OpEx, previous versus million, slide. generation, the by high an same thermal driven this canon costs others million disposal. of tax which increase capital in the by and refund offset XX% driven than composed XX XXXX, last in the million improvements, that higher an COVID exceptionally increase, million of by generation and is reached this next amount of and collectivity to the margin mainly proceeding year. €XXX in the and X% €XXX million, recording sanctioning affecting the than small improvement lower effects margin by XXXX.Moving for others to corresponding Fixed offset amount in booked the €X.XXX XXXX, higher some XX% court margins booked year, from nuclear COX Renewable year. of €XX €XXX to year, in nonrecurrent plus mainland Fund billion, the the the and of in due

to the Slide margins mainly €XX on price and service customer by million costs, #XX of retail more sourcing, now of of ancillary last year, explained gas power due plus higher impact business. to a consequence the materially as to absence previous by higher margin expanded mainly Moving year. the compared the lower supply COVID by X%, Gross offset from efficient the pool

margin supply slightly reached megawatt Endesa As activity. decreased higher million a to increase, million, X% €XXX X. higher around €X €XX cost slightly below and from others unitary fixed result, plus EBITDA hour than due

networks, in operation effects Moving dropped cost to the came and recurrent parameters effect like-for-like the into year. and crystallizing XXXX to of due the possible reaching our X.X% year decrease higher projects to no negative was by effect to keeping than €X.XXX average by cost. mainly on put fixed XXXX.In led cost X%, the now €XX,XXX amortization, by and slightly historical to lower plans, base others with impacts new the moderate a inflation line This regularizations. in fixed due This about The regulated low X% several every XXXX the program. in efficiency year improved on in XX, in maintenance cost quick megawatt on end serve Slide billion growth a I'm observed by efficiency in by booked minus mainly X% XXXX growth slight a Efficiency versus operations €XX,XXX others has to minus the record. Distribution from fixed supply, lower billion, of the the by new the fact on margin previous the and that on versus the flat we is a Total €XX period. Net decrease capacity Like-for-like megawatt decreased EBITDA year basis. versus costs #XX. €X.XXX and cost. a more in thanks about during asset to reduction as due headcount XXXX to year. comparable offset remuneration to perimeter a Slide previous on in been X% last CapEx million, thus application mainly of and capitalized reached follow-up the On and costs,

decreased to user smart unitary to are that of grids. we making results distribution, in the Lastly, costs end €XX investment by in X% starting show the effort

explained the payments financial the the impacted revenues for from Net the as exemption effort the All effective of in net the coal to due in hydro that and investment evolution impairment from Xst suppliers clawback the slide, to and XX.X%, G&A by renewables mainly €XX period. general higher rate the has performance XXXX adjustment gains credits and on to a the COX The sentence income XX% provisions over XX%, mainly charged comment from we by -- higher ordinary tax on plants the by the higher and by distribution. the consequence income. results the of reduction to amortization, out, to On booked carried EBITDA #XX. by bad by distribution XXXX, payment year XXXX, last decreased ordinary recorded and in €XXX worsening and January were following million increased assets Slide the canon. in debt, the capital of of of small on positively effect million since tax net COX a income positive financial as materialization related on mainly late and limitation interest of the impairment resulted all, non-mainland of result dividends

XXXX, net lifespan XX. their in regulation well on on changes the of This to calculation Slide and XX. value impairment Slide COX the situation future in considered the of are, these described expected among XX, aspects, generation. to triggering not of generation as as Moving assets and value recovered million. update thermal commodity reason in markets, as recoverable loss is a estimation the non-mainland gross the of resulted effects foreseen in book planned structure business the for of to December the corresponds the impairment over their and expected emission non-mainland fuel impairment rights the income The this The under other the cost be ordinary €XXX of items as

on So of the the remuneration. termination it no shareholders' impact has

net Funds operation to Moving flow accounts, on higher and mainly payrolls paid million. cash billion €XXX effects: release worsened balance Working and million #XX. the and mainly Slide around €X.XXX due as the by following receivables XX% of year-on-year, reaching capital higher provision a the the €XXX for commodity of provision for of after worsening to energy [indiscernible] decreased €XXX about net consequence others on access due to from for and regulatory to of offset working and which the still and capital. decree enforced delays within tolls prices reduce pending about impact the recently COX million, charges for sentence by be charges collection action royal partially EBITDA access related of a reduction €XXX million, further to the to

a [indiscernible] previous cash of working decree capital raising payments million. and of XX% flow XX to neutral the mark-to-market higher XXXX royal free €XX and current along negative generated the intervention. year. €XXX remaining effects mainly by impact tax to for income positive tax been the derivatives tax CapEx, Anyway, by €XXX down half of versus about further the million, million of XXXX recover corporate and led lower evolution provision a in the no by offset positive XXXX, Higher about All refund paid XX and year evolution have XXXX, first for noncash of and assuming €XXX versus these the to partially regulatory the to expect we plus of million. lower due

the working cash financial better-than-expected evolution Net operations. we definition energy than increase to million and improvement billion billion €XXX operative by year by expectation net than nonrecurring to as €XXX XX. million. or previous is affected €X.X which due This CapEx The conservative energy the billion CMD, Slide deterioration billion, on most million some the around compared year, have in positive which amount market, for is dividends, consider €XXX to deducts of debt This guarantees effect, clearly €X.X million debt is optimization XXXX. and to and payment commodity €XX XXXX. debt net materially full the at a and regulatory funds the look further the figure of of debt million a its decreased €X been impact due €XXX €X.X regulatory take higher price higher and mainly from modified the additional required to market derivatives commodity of from in items in the the deducted Once measures. this contracting derivatives scenario, capital has Let's

to billion reached €XXX ratio, on first record The Slide lines milestones sustainability reduction a for Our levels, slightly Spain guarantee X.X%, in we finance consolidated about the debt cost XXX% ecoloan position date and KPI with of million. a to transaction. €XX.X minimum. of increased for in of its leading execution to net during The of have X.Xx. loan still sustainable-linked sustainability-linked to in leverage, our most sustainable it extraordinary maintaining million. execution largest details debt-to-EBITDA to remarkable our on credit linked our linking comes measured are €XXX activity, sustainability, XXXX, path as XX, EIB marking to the historical The finance When of sustainable the

scope new bound emission SDG XXXX, KPI to in of have we our transaction. in of some on included Additionally, greenhouse reduction gas sustainability-linked a

represent now me Endesa of in let for now his As remarks. debt, XX% with sources our XXXX line over a finance And final target. Pepe to sustainable gross result, hand

José Bogas

Okay. Thank you, Luca.

to paid XX% dividend in €X.XXX meeting July is interim value for increase. paid expected January, XXXX is per share our general significantly share XXXX. Our to be a of share will achievement results. per approval, of shareholders. payout renders above of significant income DPS After something final in creation an per dividend €X.X subject the around gross This dividend ordinary DPS guidance, of Board total the of €X.XX XX% shareholders' payment propose our against XXXX, in Considering Director net

of and we XXXX, challenging value electricity to year XXXX I yet and presentation, in prices. this and term. over long once by XXXX account through demonstrates high for the of go free As condition succeeding for on marked for the again Endesa's beating into delivering target another set for record sustainable commodity achievement to This commitment our taking am vision we set the can target #XX, be Slide proud market the

a main of conclusion, As the me let year. achievement the mention

and timely once target. financial the our First, again beating continuous delivery

context, and Our our attract market indexes, us customers to renewable improvement price services by of in pipeline energy in most continue creation while Because capacity target a inclusion XXXX. the increase and shareholders. an customers' beginning renewable a to competitive dividend free of strategy indicators including our benefiting the In for new we allow XXXX strongest sound scenario. range of evidence from high outstanding wide acceleration our projects, facing the In valuable of prices. the ESG at prestigious our of with still we value rewarded the recognition is the to yield such a are the is XXXX,

We of the are that to facing many this due context. are aware customers difficulties

jointly positioned are attention, this XXXX very remind and are questions. I much find the And So ahead, solid of solutions.Finally, and a track to take continue administration Endesa result billion and XXXX, Thank to full-year you here, attain to work manage order in for most €X.X level presentation. delivering challenges which you, we record income particular, at billion some having we net for to gentlemen, to efficient well EBITDA in be is target the set open the with our for to successfully your ladies concludes income. €X.X ready

Mar Martinez

Okay. Thank you, Luca Luca. Thank Thank you, you, Pepe.

questions now you are the all answer ready have. We to may

Operator

Instructions] [Operator

Mar Martinez

Okay.

The comes from from first Sachs. Goldman question Alberto Gandolfi

Alberto Gandolfi

thank Mar, you.

You may questions. to regret allowing ask me

thank are be the on question to keep but Power I'm it I X.The be has really first is trying well you doing terms interest XXXX well to it to hydro and spreads one but much bit started even yesterday, allowing a so mean aside, first a I have way rates jokes margins little is as to prices have as looks €X.X for clear stronger, world in best changed. I'll I inflation. promise ask spark long, but levels has billion supply seem bit. EBITDA. as the The CMD, can, changed particularly questions. lot you -- not your hosted changed targets, and a me of really The

margins the bit you and mind hydro if wondering billion. see prices don't expect still on drivers, the should was I So spreads power and levels and comfortably €X.X a key and if we little elaborate

expect have And -- the regulatory second improvement XXXX. clarify tailwind any of Or should mind, you a in clinking a but question really the should is you in if to margins margin supply wondering about And the figure? there's what we margin in maybe considered a something €XXX like repricing Luca, in So you The I improvement if bit items? if you last €X.X working the the moved suspect headwind? it, of right portfolio. be we or I don't it tell these include can thought Is have in I this drivers direction? evolution? meaningful other portfolio terms and is QX of billion, can question, it was a think, words, expect if a us in in And in recovery million little I capital. explained you

for you your some the So granularity so much if 'XX? we can have for would again highly in disrupt forecast appreciated. Or it reverse 'XX? on may does patience. thank anything debt in And that, that be That

José Bogas

your Alberto, question. you Okay. much thank for very

this bit different try some able, referring about some EBITDA Luca the technical situation have think just or seen have we have we and are because think moment me this and drivers has And international Ukraine commitment yes, around this. what we'll on and Russia. just think to let's true are right. absolutely that months prices thought between gas is we of on the one we we the, let's I increase to levers in first enough to because I'm business little that only sufficient longer said, then conditions more have then, of Nevertheless, the also, as the that and we situation. last prices It of changed. than things is a And Many that that as regard our XXXX the are have ideas be thinking have that use I say, because could we you that net answer unbalance, gas context geopolitical manage just year Let situation this achieve see into will on or that to the finish is you income you living this we the or forecasted. last now will just what less, that, are account these and issue. ago, scenario, in more, is the taking we prices, we we we to question said, But the target, [indiscernible] this implement the are a living what will will that one. question. With we of this top second give But decline say,

that But could final you better paid since solution Supreme we and am if the see happens. resolution, that for expecting recover bond. Court social we should to Luca quantities the but you wait has the are the just XXXX, right. know of The said In terms need than the of items, the what I year me, we we explain will regulatory

terms selling the means advance know years. I answer or trying at of have our something we portfolio to say repricing, energy supply the X would to hour. in perfectly we your X per €XX that the are electricity second In question, that you That been and selling €XX megawatt that around

for And our price have XX established XX. price a price-driven reasonable around something We output. is to this

of adequate gas, but do hydro will So trying be add and by full just And last the level cost our for want you anything the answer and out. fulfill to that to Luca, of to to repricing the future to remuneration we clawback to nuclear and negatively in the now, our in would question? be more impacted to will allow the that repricing this not us see this

Luca Passa

Sure.

confirms to Just going the Alberto is question, back X.X that the first clean.

as stop about paid our we X% the see XXXX in need price which to we rides, has effect in the improvement for This as the at position And was for million price majority for Then age, increase tax basically, and terms basically €XXX price, driven X% of driven to do any €XXX effect. of an expect is basically see basically huge expect million, because part a two a rather about year, about XXXX. our ancillary again, positive load price considerable some basically you mainly in contribution volume. from volumes the less €XX explained million year €XXX of has in plants level. of improvement drag for the increase or a in me had about say, There's we by margin which for planned million renewables. in mainly mainly EBITDA the paid €XXX quarters know €XX guiding effect nuclear have positive give conventional as €XX base XXXX, €XX in what which stoppage in in XXXX than we generation here, of now, to recover we also million XXXX.Also basically XXXX, nonrecurring million which by better vis-a-vis not nuclear terms some have million will this negative EBITDA, we from for some more that well XXXX been terms And tax the well reference is we from which volume adjusted besides a of effect. And of we And higher a of expect, last basically, let negative for for year. EBITDA an €XXX [NSX], for in this have figures very is impact is terms deposit for €XXX or XXXX assuming improvement also of within expect million retail million by QX hence, last services, expect an it's gross [Indiscernible] contribution in nuclear. for of we of is Then as that million or an in of margin driven in national what volume for this XXXX. adjusted which of reach the you Alberto, the not another our of and not So And you we to generation, suspension gas, retail, in is in where NSX. been terms going increase obviously, effect we a

higher share expect improve which will recover obviously, very wholesale which negative the million €XX for a gas expected just We XXXX. then the and XXXX, million, for €XX finally, been have by effect which been The cost. to for combination shy be we to to fixed million position, is of about higher has €XXX of our increase of positive XXXX. slightly is has And distribution. margin slightly And

fact that let the basically, driven that Then estimations the negative the and that's regulatory, more positive of expected, that third obviously been at bridge expected had between working improvements driver our So vis-a-vis going we to then has debt And in XXXX question me a of in than have for the the the effect region than around been XXXX. to receiver capital CMD side, is the say, €XXX lower net our there we net that the collateral been on collateral we figure [Indiscernible]. a what million. has by

Mar Martinez

Wyburd Alberto. you, Thank next Lynch. The Harry Bank Merrill question from America, comes of from

Harry Wyburd

evening Hi, Thanks questions. everyone. good for taking my

just So follow-up a Alberto's first one, to question.

first volumes in very focusing of narrowly 'XX. on the hydro quarter Just

your want with have bridge guess, of volumes I put bridge. that very has this at probably are happy guidance guidance. gave it Would ahead to where great year, hydro full probably with that your back core, the XXXX into it of then the us you of very been you given you're say, start obviously to be. you fair line, be you sort So detailed the for And the of year, at and moment

give that you So land. a had anything impact is expecting to catch expect then that effect that on impairments know guide mentioned Obviously, you you. impairment you hydro going Are will negative you it. Thank and just don't from did the The what be? much so us nonmain QX. on you've second I there had didn't let I cannon another far us in from rough hydro to right? if Is you hydro -- And be impact one as it weak finally, big just depreciation how cannon. positive already that you year? maybe this XXXX on if an before, for the volumes ongoing the is could know you the of

José Bogas

Harry. Okay. Thank you,

XXXX. Let me to happen this say early with to that hydro what it just is know really in is year very going the

are case, being different Let X that lot year seen a dry have about then a we I'm thinking And channel in hour let terawatt if what I X is wet dry me situations right, of suddenly could year. -- that lot. In in thinking are something or hydro me Spain our underline in X% hydro. hydro we is that But lose different in this we more less. again, Spain. month chain around and that tell a X.X% any the you is output per to

think could in we Luc, about the that considered to [island]. the hydro business to is cannon anything new low then is the as the our and plan. they canon, is which order With ask thinking or a impairment add are to you Well, what this elaborate government it order in just hydro to in going implement

Luca Passa

to The year. whole we're that, on is Sure. that's years the assumption XXXX. question starting of that three the this was plan number working the again, for mitigation the to to already And in have law. And from budgeted hydro is two where [Indiscernible] government cannon was for. going It from XXXX the business

question, edge, D&A a of first decrease reference, from €XX mark hydro hours shorter a going of the obviously, the to For sir, this end materializes, go of we big again, we let incur leaving less oil to margin X to in order us the if the €XX production. also question, €XX it's give you million impairment terawatt year between in not say, And this back at last affect and million [hydrolicity] could then and question €XX gross year throughout the the expected me terms million just in million. And between is margin.

Mar Martinez

-- from comes Stephens. question next from Many thanks, Enrico Harry the Bartoli

Enrico Bartoli

my for Thanks questions. taking

also Actually, of in XX, higher the indicated reached of Slide us hour nonrecurring is includes the give than €XX margin you nine you items per some megawatt can And full in the to you impact integrated strong you related significantly level. is wonder the fourth this highlight highlighted in around on in €XX the if had you this improvement margin one the First details I EBITDA if that year. when integrated months. at that you quarter?

the expectation to gas the you indicated [to on your application to back]. the expect during you Second CMD, similar question [Clabec] is that future related a

the on full assume So guidance. update on debt. the and exclusion situation net of the what fixed you one price the contracts, can you of last the to year related is city [Clabec] the And if

than it As you November. in you was indicated highlighted, what better

better net million the If of on working of we you XXXX? a evolution can capital, end can you debt went particularly on €XXX impact year? for elaborate guidance if a the for the and at what expect And bit of provide what can this

José Bogas

Okay.

Let me answer to the second question.

levy gas of the As the contracts. know, Decree-Law not forward year the will XXXX you XX by clarified Royal apply fixed energy that to covered price

regional contracts, that bilateral any megawatt ranges -- this €XX hydro to has a reference energy current similar which in not said of and before, price be output, through sold. internalize We one scenario the €XX price our gas or been understand, may the as -- fixed in hour. the price per two to price Our between years advance. And nuclear full I cost have increase.

we at will assume prices levy. that we sufficient avoid keep on any managing -- negative XXXX. market base, price to have impact impact production electricity gas wholesale said, customer of selling fall the years already at €XX during hour, our average have of sold, And our regulatory volumes XXXX that been into we XXXX we energy have the price-driven as per price base-load reference For the XX% an megawatt taking of the maintaining majority the XXXX, and fixed of regardless from of we account

Luca Passa

as yes, for the on on last strike margin of contribution year, quarter, of in the the back there this almost are of well for of on more the for than That slightly We than evolution Yes. higher in But was short last on end, the which generation with position, in XX% the integrated XX%, year less going hydro contribution that's was the quarter was what the back also expected. line the commodities And was [for €XXX or And commented, last so expectation. and the think higher the thank for back obviously tax the a XXXX. that]. in just obviously year. fourth as million part the we exemption million, of €XXX margin cannon the around it managed which XX I And integrated positive a no in performance amounted you for a XX end I C&D net when collateral effect comes the margin obviously basically, mentioned as XXXX. commented expected vis-a-vis going on the the it positive decrease, the positive we ended from for to position lower evolution say, the driven with, by costs by position earlier, netting in debt Then estimates question that the that expectation, nonrecurring higher to gave debt over items real lower €XXX to integrated that last posters we net it better in system a negative regulatory than expected. vis-a-vis to November third were of question, up than million as back the the for derivatives year. Therefore, on me we collateral, short I before well what last let in as what quarter basically we affecting and

should Now billion XXXX and range assuming year. is which cash the billion capital, expectation year and estimate it no won't year, higher we X.X% for obviously, recover it the throughout of when payments increase recovering, the say, have, year, from items these and basically moment, last the based be you this FFO, capital regulatory same year. system of we by to where between lower for the as intervention. power had of positive well €XXX have, we let say, on debt impact regulatory regulatory we customers we about region stabilization neutral in And I the of This price last the saw prices, an be payments X.X% full a and that the will an full well €X.X in as basically to is million me to as of further to give will as working working the evolution of at comes XXXX which me back above the €X expect let on CapEx, a

Mar Martinez

now JB the ahead. Jorge to Guimaraes analyst. We go Okay. from Please, move next is That Capital.

Jorge Guimarães

may. Two questions and a follow-up, if I

the The on first is hydro hedging. one

on a was, the reflect structural consider of do saying of to new the you if that reducing One the of spot advantage question were your market to same, edge amount to take And was could situation. basis high competitors, energy prices. my they EDP

The is non-mainland. second on one

might you one expect on to your asset? impact call write-off, want hydro. on on on And any is financial as it the this do you or of the the remuneration If a the final hub follow-up you have explanation

expect said versus now to average lose have you terawatts to You that by your production. X X.X

electricity have my this of if hydro if much the So production would The year? on be market is proceeds. buy question hedged can to and how the the go you to you you elaborate question to assess drought risk need

José Bogas

market this let has thank first is coming just to have to say, and output depend -- But case, is we or regarding the you as me generation see X.X in case our buy lost on In arm. wait yes, hydro question. seen could of a could just in all, we things to because it terawatt I if the see because X will advances. And that we said, hour, that in Well, use the we let for the Well, how year hydro Spain we energy. I've other plants. from any will go me something volatile any What many case,

now something context, is that risks and them then, output as this output you to this what X.X%, hydro are facing they situation said and should between terawatt that we something that the of ask maintain that total decided know could to is are considering. question but -- what is Regarding EDP amount what the And you has hour, average year that we in X% be market if Luca, we because is they reduce this know we reviewed we the X Well, our around want. have figure.

Luca Passa

Yes.

just the regulation And effect no base. asset basically any have one it the this last hedged there is of this point there, some to we remuneration generation our year basically negatively terawatt is evened for and cost between us, the a X.X and to comes million doesn't we in million throughout And acquisition €XX Actually, X is doesn't the then out X that's effect. in reimbursed on obviously, you lower main it hour X.X hydro of provides according starting was incur the or not unhedged up X this Therefore, change continuing basically, because the year. is the hedging strategy in million remuneration in full -- never generation clarification us. generation in is from if hydro so come. for shorter differences Just if between margin. for to have regarding generation the on €XX the regulated We the asking the And islands. already leave the of basically affecting materialize. for impairment gross hedging in basically month X.X higher triggered as of budgeted that by the through basically Therefore, when on cost and either hydro, always until situation, current order this market the full if to this

Mar Martinez

you Thank [Indiscernible].

question Palomo Exane Next comes from BNP. Manuel from

Manuel Palomo

three. questions. two taking or my afternoon. for Thanks good Hello, stick to I'll

is on First renewables. one

XX have of gigawatt pipeline. to plan gross You

all read in are I polls to new the However, pipeline. always whenever you press, acquire

we the whether is your question is second some M&A well, renewables could expect it's -- question follow-up with on whether my So growth to have, all plan is in you needed, My a it pipeline huge on actually. whether side?

March. end where wrong, wonder the whether we one something on bonus the amount or have [Indiscernible]? last the mentioned light on I but on EBITDA get recovering view in guidance. €X.X this should amount share you And If about terms get could that cash understand at it not wonder finish year. about regulation. the is of is of something the I also that are the could -- included You bit back you and social some whether didn't I you quantify whether any be whether bonus I in on a clarify that I'm thinking whether flow extended. could And social carbon billion recovery should you

José Bogas

knows I know, your let they yes. to about gas because that gas be question. yes, third going I turbulent to going this, would Manuel, if we nobody Okay, -- are If living you in if yes, the is are answer the me don't And global me days. extended, to these ask say, extend

government ones the that that and think today. should the spend another put I have spend we measure

royal this decree [Indiscernible]. gas the extend would on they opinion, my in So based

Luca Passa

question, are we to have M&A back interested going then yes, an pipeline things. your depends upper Manuel, to And Therefore, in for your on pipeline. question, first here? we It many

only it emits in basically pipeline existing but consider I criteria. pipeline, pipeline are fits obviously, if past some our the strong and that demonstrated acquisition of that covers not think we in obviously own financial basically we basically of probably developed less portfolio maturities also our

not XXXX. declared the for social center a else. social scheme now an Therefore, to XXXX it nothing bonus, which we're starting paper comes been regarding sentence say in The the to our another in has referencing it's basically, have issued we pipeline at activity to someone are we bonus was the acquisition Now the amount obviously, let is that that to that involved included €X.X EBITDA given regarding target discriminatory. renewables. a was moment, that competitor to our on of some when Then of of of any or me competitors billion

final when to We there the centers the because recovery ourselves, and get will proof customers. to of our social moment, been is passed recover we modus how uncertainty because see the these will what the costs given around much we amount we at public, unclear have got is what that see it's is of

So honest, our in this be To nothing is is something ongoing. target.

it comes or our when if see not. we will and along something sentence recover We can

Mar Martinez

you, Thank Manuel.

from Garrido Javier now have We JPMorgan.

Javier Garrido

taking and my evening, good Yes, questions. thanks for

is generation The for the if you XXXX for with on, question hedge, comparable XX share us compensative can second is of price 'XX? the base-load in can let expectations is if The first on evolution know position. achieved XX your comment one you the and what

clients, the positive explained in XXXX position, is any? of be have for million. what hedges if you third increase living. travel to charged price are would look of the net address Do developer impact a by on recent the have to discussing be they is €XXX cost And in Endesa And commodity your with expectation facilities on financial that for which the including reported on You still of XXXX? solar and [Prodiel], and in question news be generation piece

of this from renewable projects has last gigawatts [Prodiel], Given to any Endesa targets X trigger buy to you. additions? for agreed your capacity could the years that risk Thank in

José Bogas

Javier. Okay,

XXXX say Again, course, closed than have account XX%. answer. reference this or XXXX. me two saw of that the we is around full-price we in what XX the a that, and for load the that year we advance price Let Luca, into for, with base year expected lower is year XXXX and as on XX of you something one take you should sell years, could the

Luca Passa

the position comes question, to it this and When Sure. year. short second the basically hedging we're

me it's slightly, First we a entering And from the neutral position. any hedges currently, minimal. relevant so was differently shorter, slightly this with let of year all, don't XXXX, that have to position. really we're say It commodity

pipeline And different third of our what and XXXX [Prodiel], we're be say negotiated ones of have then been rest, least So us, the risk the I only me built, the with that very terms it's our XXXX is [closet] the of the let or are dealing and projects top a have we add just already in whatsoever limited can what that have at positive basically developer, are pending not an amount done. ongoing for done me also When On in bought projects of that of we of million. that with them, of very permits. from with in already achieved permit XXXX. taking in negotiations from environmental agreement counterparty project And three acquisition vehicles is no question, small and for in been, acted have the we comes that, for very this region on them. basically we €XX impact that to the add a let on to it negotiation obviously, what actually which we

immaterial. really us situation for So the is

Mar Martinez

Thank you, Javier.

Next question Societe Generale. from from Jorge comes Alonso

Jorge Alonso

taking a of my questions. left. for you Thank couple questions There's

the And generation non-Milan question the the energy situation? in second further Regarding recovery PPAs. coming from prices the expect a deterioration is the regarding first, if in XXXX, the you a or EBITDA

some have [resolute] with industrial signed PPAs You customers.

you that fourth avoid contracts quarter. quite accept some you. as levels us the order what much are the in that the you volatility impressive well levels the as retail of higher -- prices these means liberalized if willing as had prior the of are than are or the if segment, duration to If You in a contracts a of the can longer about customers case expected color higher have and to that well length increase on the just the in in Thank the customers give extending spot prices. the PPAs and is

José Bogas

your Okay. Jorge, question. thank for you

to I that, suffering do to to to that output, they due of are price-driven ready are facilities. these of reduce full of I all, that In spend this a Let the at what based our I the said the our prices we am first am trying high extend years. just of and me say to in on cost are selling reasonable before, signal prices contract pain these trying customers. our we to gas have is from just give good situation, as very to our of the customers some cost duration

something similar other PPAs. to the it's hand, the very On

into take year price the account as price for that that forward, hand, the look as should XXXX you you see. go you if lower price On from far the other you as the

are of customer, contract is which electricity. and two will contract In sign the you us is would we for in XX in to the course, say benefit, our the mainly case, be if this better the years extend So to any able for five point in clear customers. than sell want could let's a it to benefit of the we a that for better we just year real that. it find years, But

Luca Passa

is the in it there currently question remuneration generation that the to of have that reduction driven we the lateral we in €XX know first comes a when yes, the million of about then mainland we gross mark foresee. decrease the to a comes But evolution And the cost in regarding question by margin XXXX, non of you where source i.e., generation. needs for criminal refueling cost remunerating for market actually and the islands incurring that are to this both spring when basically in and issued been auctions they are the is what to of is order basically having oil basically basically has cost, in gas it gas than less us the mesh-related

Now auctions start the the our a is is of this half not. second year will already the in there question EBITDA definitely, these reduction in or budget. But islands to market in whether

Mar Martinez

comes ahead. Joe. Thank Gonzalo question from go UBS. Please next from The you, Sanchez

Gonzalo Sánchez

good this clarification the islands. is a afternoon. on impairment on couple my One of on Hi, A side. questions

all So a recover that if some that chance costs the can costs eventually there I or understood have you've recognizing and the of those booked. correctly, is you regulation

ongoing And of wanted the a to [if you] that's a the delay think whether could side? or or Spanish then or on like strategic. workforce if, second keep the anything hear result question in the basically shutdown there if energy coal I'd ongoing to not? Just the And that's understand if more possibility. is of possibility like reason, for some crisis coal could, scenario, a is that the whether like your Thank potentially as government plants plants or and think you impossible from you operations you. contracts

José Bogas

your for Gonzalo, question. you, Thank

the answer I case shutdown delay think in one, don't [Indiscernible], so. the could consider second Let government this in a the of of me

state, now clear just but problem Spain. for other we supply have have a could don't have just because future We view the members any security that not

has these So year. no by process And coal said, authorization. plants. June formal sense this process of authorization we we waiting power the And to formal have expect this maintain we are it for as

say needed So a sponsor. to system that will no or power close we operator, maintain it's the government will the one this plant regulator just the and or

Luca Passa

regulation first And then refer cost forward I There's to to Island be islands. of the there I before. this remind is on basically ruling changing the just Court for that what called whether question, the said year. Supreme chance auctions in basically can been must the a the

going set cover when to year. remuneration -- the dealt is actual auctions of will to be sufficient half this is these the expect we that it's second So incurred. The cost be basically question with

have will let year. positive some, hopefully, say, part this of So in sense that me new we second in the

Mar Martinez

question Javier The Okay. comes from Mediobanca. last Suarez from

Javier Suarez

Endesa hydro to Two any this to second of what costly sorry [Indiscernible], fund and fund. The is see going on the remain. canon impact the from the meaningful does because the people be the late 'XX. is And on more One questions question time recovery is related the question. than if [new] recovery probably tend believe. the for is to XXXX very question recurring amounts

going is what that your estimate amount be needed thanks. to is recover amount the and Many best XXXX. in So that already recovered to of of that money be should on is time the which period

José Bogas

the if I'm what Javier, to we next has we ahead question. funds. any it your generation Well, go been with for Thank case, -- In Okay. the you, right, see just approved, need around million if Again, €XXX for distribution. another and €XXX the the XXXX, that, top 'XX should utilities, 'XX distributors something for the of right, put million On year. I'm thing.

the and of is see see we electric results are just sure, the for that the some XXXX. renewables, thing this to first With Again, also and will hydro we expecting we that regard year will for is in the storage during investment [Indiscernible] digitalization the vehicle. for And infrastructure. in future. the So

case, any Spain, next-generation in that we need funds. these So in clear well, is it

the as soon you if accelerate the implement answer. their We have these I'm just that to the -- and possible cannon, to best recovery the economy. funds of do sure government will as hydro

Luca Passa

Yes sure.

that on next the on start amount set this the €XXX million XXXX just point generation me system. for distribution Let the for of

system, So let we the this derate we and will CapEx have a share of to year.

recover cannon, So the to limited. hydro we let comes the could up basically the everything say, impact see you me it is, that until When XXXX. to

cannon We still legislation. under XXXX for it's old paid hydro the because basically haven't the

permanent the So they a to the will as to hydro way viable. we this pay and it are amendments we basically we in law accounting pay recover law in and change a basically to because did expect government Therefore, cannon will onwards, promoting is past that because and have make are cannon in be every as which we law onwards, are to from the recoverable. doing law year not not in actually the XXXX from the the already XXXX hydro the

Mar Martinez

Okay.

Now And the we couple Spain. segment in on of margin. we e-mail. for expectation supply Both received can [Indiscernible] next the from by the year of you. a Thank if our -- integrated answer in comment comes will questions see them and competitive environment about

José Gálvez

contribution [Indiscernible] actually in actually customers. comes it the the [Indiscernible] last Okay, region year think last me of do to net shown positive in And which, Sure. a acquirer XXX,XXX shy just of to of the When a competitive answer? have environment full want part supply, let say, quarters. has has you a be the ability of to customers, I been we in been of two XXXX,

see difficult the The trend be current first best more very not half what basically scenario quarter in last smaller started are continue second competition well especially, the as say, as in first -- some me competitive, last well that or supplies to expect, the and we let year. year. throughout will encountering the we the I this do of given part this And

XX megawatt integrated in in of be margin in XX hours about integrate liberalized should expecting hour something of for revenue towers just of in hour, liberalized of our terawatt we good sales a it and marginal variable region comes megawatt sorry. shy portion to integrated competition, of the to of terawatt from terms about are cost So terms XX basically of When and XX.X it assumption increase customer. terms reach environment XXXX, us to of

Mar Martinez

Thank the Okay. This our call. you. question of was last

have you is to remind team other IR you And thank help just any attending Thank conference in to questions. available so case call. And that you for this you much. very you

Endesa (ELEZF) 23 Feb 222021 Q4 Earnings call transcript