REG-ENDESA, S.A. 3rd Quarter Results
04/11/2021 07:00
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3rd Quarter Results
ENDESA, S.A. and Subsidiaries
Consolidated Management Report for the nine-month period ended 30 September
2021
(Translation from the original issued in Spanish. In the event of discrepancy,
the Spanish-language version prevails)
Madrid, 3 November 2021
Contents.
1. Most significant
figures............................................................3
2. Basis of presentation of the Consolidated Financial
Statements...............................3
3. Reference
scenario...............................................................4
3.1. Performance of the main market
indicators..........................................4
3.2. Electricity and gas
market.......................................................5
4. Significant events in the
period.......................................................6
4.1. Consolidation
scope...........................................................6
4.2. COVID-19 Health
Crisis........................................................7
5. Performance of ENDESA's operations and results in the period
January-September 2021............8
5.1. Operating
performance........................................................8
5.2. Analysis of
results...........................................................11
6. Equity and financial
analysis.......................................................20
6.1. Net invested capital and
financing................................................20
6.2. Financial
management........................................................20
6.3. Capital
management..........................................................23
6.4. Management of credit
ratings...................................................24
6.5. Cash
flows.................................................................24
6.6.
Investments.................................................................28
7. Earnings by
segment.............................................................29
7.1. Generation and
supply.........................................................30
7.2.
Distribution.................................................................31
7.3. Structure and
Others..........................................................31
8. Regulatory
Framework............................................................32
9. Other
Information................................................................38
9.1. Stock market
information.......................................................38
9.2.
Dividends..................................................................39
9.3. Main risks and
uncertainties....................................................40
APPENDIX I - Alternative Performance Measures
(APMs)....................................41
APPENDIX II - Consolidated Financial Statements for the nine-month period
ended 30 September 2021...45
(Translation from the original issued in Spanish. In the event of discrepancy,
the Spanish-language version prevails)
ENDESA, S.A. AND SUBSIDIARIES
CONSOLIDATED MANAGEMENT REPORT FOR THE
NINE-MONTH PERIOD ENDED
30 SEPTEMBER 2021
1. Most significant figures.
Main figures SDGs ((1)) Unit January - September January - September % Var.
2021
2020
Revenue €M 18,603 12,959 43.6
Gross Operating Income (EBITDA)( (2)) €M 3,125 3,136 (0.4)
Net income €M 1,459 1,511 (3.4)
Net ordinary income ((2)) €M 1,459 1,700 (14.2)
Net financial debt( (2)) €M 10,000 ((3)) 6,899( (4)) 44.9
Cash flows from operating activities €M 862 1,969 (56.2)
Gross investments in property, plant and equipment and intangible assets €M 1,394 1,161 20.1
Net installed capacity MW 21,660 ((3)) 21,652( (4)) 0.0
Net installed mainland renewable capacity 7 MW 7,713 ((3)) 7,719 ((4)) (0.1)
Net installed mainland renewable capacity 7 % 45 ((3)) 45 ((4)) -
Additional installed renewable capacity 7 MW 86 ((3)) 391 ((4)) (78.0)
Electricity generation ((5)) GWh 42,581 42,150 1.0
Generation of renewable electricity 7 GWh 9,523 9,943 (4.2)
Distribution and transmission networks 9 Km 316,092 ((3)) 315,365( (4)) 0.2
Energy distributed ((6)) 9 GWh 98,601 93,206 5.8
End users ((7)) Thousands 12,337 ((3)) 12,291 ((4)) 0.4
Digitalised customers Ratio ((8)) 9 % 100.0 ((3)) 100.0 ((4)) -
Net electricity sales ((9)) GWh 60,124 60,585 (0.8)
Number of customers (electricity) ((10) (11)) Thousands 10,173 ((3)) 10,420( (4)) (2.4)
Deregulated market ((12)) Thousands 5,623 ((3)) 5,690( (4)) (1.2)
Public and private electricity charging stations 11 Units 8,442 ((3)) 7,072 ((4)) 19.4
Final headcount No. of employees 9,266 ((3)) 9,591( (4)) (3.4)
€M = millions of euros.
(1) Sustainable Development Goals.
(2) See definition in Appendix I - Alternative Performance Measures (APMs) of
this Consolidated Management Report.
(3) At 30 September 2021.
(4) At 31 December 2020.
(5) At power plant busbars.
(6) Energy supplied to customers, with or without a contract, ancillary
consumption of generators and output towards other grids (transmission or
distributors).
(7) Customers of distribution companies.
(8) Number of digitalised customers / End users (%).
(9) Sales to end customers.
(10) Supply points.
(11) Customers of supply companies.
(12) Customers of deregulated supply companies.
2. Basis of presentation of the Consolidated Financial Statements.
ENDESA's Consolidated Financial Statements for the nine-month period ended 30
September 2021 were prepared in accordance with the International Financial
Reporting Standards ("IFRSs") and the interpretations of the IFRS
Interpretations Committee (“IFRIC”), as adopted by the European Union at
the reporting date, pursuant to Regulation (EC) 1606/2002, of 19 July, of the
European Parliament and of the Council and other provisions of the financial
reporting regulatory framework applicable to ENDESA.
The accounting policies, bases of presentation and measurement bases used to
prepare ENDESA's Consolidated Financial Statements for the nine-month period
ended 30 September 2021 are the same as those explained in Notes 2 and 3 to
the Consolidated Financial Statements for the year ended 31 December 2020,
except for the new International Financial Reporting Standards (IFRS) and
IFRIC interpretations published in the Official Journal of the European Union,
which were first applied by ENDESA in the Consolidated Financial Statements
for the nine-month period ended 30 September 2021, following the going-concern
principle by applying the cost method, with the exception of the items that,
in accordance with the International Financial Reporting Standards (IFRS), are
measured at fair value. Items in the Consolidated Income Statement are
classified by cost type.
At the date of approval of this Consolidated Management Report, the
modifications and reforms adopted by the European Union applicable to the
years beginning on 1 January 2021 were as follows:
Standards, amendments and interpretations Mandatory application:
Years beginning on
Amendments to IFRS 4 “Insurance Contracts” – Deferral of IFRS 9 1 January 2021
“Financial Instruments”.
Interest Rate Benchmark Reform – Phase 2 - Amendments to IFRS 9 “Financial 1 January 2021
Instruments”, IAS 39 “Financial Instruments: Recognition and
Measurement” and IFRS 7 “Financial Instruments: Disclosure Initiative”,
IFRS 4 “Insurance Contracts” and IFRS 16 “Leases”.
Amendments to IFRS 16 “Leases” – COVID-19-Related Rent Concessions 1 April 2021
beyond 30 June 2021.
The adoption of the previous amendments and reforms did not have a significant
impact on the Consolidated Financial Statements for the nine months ended 30
September 2021.
3. Reference scenario.
3.1. Performance of the main market indicators.
Market indicators January - September January - September % Var.
2021 2020
Arithmetic average price in the wholesale electricity market (€/MWh) ((1)) 78.5 31.9 146.1
ICE Brent average price ($/bbl) ((2)) 68.0 41.0 65.9
Average price of carbon dioxide (CO(2)) emission rights (€/t)( (3)) 45.4 26.9 68.8
Average price of coal (€/MWh) ((4)) 102.5 53.3 92.3
Average price of gas (€/MWh) ((5)) 30.3 12.5 142.4
(1) Source: Iberian Energy Market Operator - Polo Español (OMIE).
(2) Source: ICE: Brent Crude Futures.
(3) Source: ICE: ECX Carbon Financial Futures Daily.
(4) Source: Api2 index.
(5) Source: TTF index.
Year-end exchange rates ((1)) 30 September 31 December Difference
2021 2020
Closing exchange rate (Euro / US Dollar) 1.1577 1.2270 (0.0693)
Closing exchange rate (Euro / Sterling Pound) 0.8608 0.8980 (0.0372)
(1) Source: Thomson Reuters.
Average exchange and interest rates January - September January - September 2020 Difference
2021
Average exchange rate (Euro / US Dollar) ((1)) 1.1961 1.1247 0.0714
6-month Euribor (period average) ((2)) (0.52) (0.32) (0.20)
(1) Source: Thomson Reuters.
(2) Source: Bloomberg.
Percentage (%)
Estimated annual inflation ((1)) 30 September 30 September
2021
2020
Spain 4.0 (0.4)
(1) Source: INE (Spanish Official Statistics Institute).
3.2. Electricity and gas market.
Electricity.
The changes in electricity demand at 30 September 2021 and 2020 are as
follows:
Percentage (%)
Trends in electricity demand ((1)) Without adjusting effects for working days and temperature Adjusted for effects of working days
and temperature
January - September January - September January - September January - September
2021
2020
2021
2020
Mainland 3.4 (6.1) 3.5 (6.4)
Non-mainland Territories (TNP) 4.2 (14.3) 5.5 (26.2)
(1) Source: Red Eléctrica de España, S.A. (REE). At power plant busbars.
In the period January-September 2021, accumulated mainland electricity demand
adjusted for the effects of working days and temperature rose by 3.5%, (-6.4%
in January-September 2020).
Accumulated electricity demand in Non-mainland Territories (TNP), adjusted for
the effect of working days and temperature, ended the first nine months of
2021 with a 11.4% increase in the Balearic Islands and a 0.5% decrease in the
Canary Islands (-20.4% and -10.2%, respectively, in January-September 2020).
At 30 September 2021 and 2020, mainland electricity demand in the territories
in which ENDESA distributes electricity, was as follows:
Percentage (%)
Changes in mainland electricity demand: ENDESA area ((1)) January - September January - September
2021
2020
ENDESA 2.2 (5.2)
Industrial 1.4 (7.3)
Services 7.5 2.7
Residential (2.3) (11.0)
ENDESA adjusted for the effects of working days and temperature 2.3 (6.0)
(1) Source: In-house.
The period January-September 2021 was characterised by extraordinarily high
prices, with the arithmetic average price in the wholesale electricity market
standing at Euro 78.5/MWh (+146.1%), mainly, due to changes in the prices of
commodities and carbon dioxide (CO(2)) emission rights.
The contribution of renewable energies to total cumulative mainland production
in the period January-September 2021 was 50.0% (57.7% in the period
January-September 2020).
At 30 September 2021, ENDESA held the following electricity market shares:
Percentage (%)
Market share (electricity) ((1)) 30 September 31 December
2021
2020
Mainland generation ((2)) 17.7 18.0
Distribution 42.8 42.9
Supply 29.6 32.4
(1) Source: In-house.
(2) Includes renewable energies.
Gas.
The changes in gas demand at 30 September 2021 and 2020 were as follows:
Percentage (%)
Trend in gas demand ((1)) January - September January - September
2021
2020
Domestic Spanish market 0.1 (10.6)
Domestic Spanish - conventional 6.9 (7.1)
Electricity sector (17.9) (19.4)
(1) Source: Enagás, S.A.
During the period January-September 2021, conventional demand for gas
increased by 6.6%.
At 30 September 2021, ENDESA had the following gas market share:
Percentage (%)
Market share (gas) ((1)) 30 September 31 December
2021
2020
Deregulated market 14.9 14.3
(1) Source: In-house.
4. Significant events in the period.
4.1. Consolidation scope.
In the period January-September 2021, the following transactions were carried
out:
Companies Transaction Date Activity Stake Stake
at 30 September at 31 December
2021 (%) 2020 (%)
Control Economic Control Economic
Arena Power Solar 11, S.L.U. Acquisition 25 February 2021 Photovoltaic 100.00 100.00 - -
Arena Power Solar 12, S.L.U. Acquisition 25 February 2021 Photovoltaic 100.00 100.00 - -
Arena Power Solar 13, S.L.U. Acquisition 25 February 2021 Photovoltaic 100.00 100.00 - -
Savanna Power Solar 4, S.L.U. Acquisition 25 February 2021 Photovoltaic 100.00 100.00 - -
Savanna Power Solar 5, S.L.U. Acquisition 25 February 2021 Photovoltaic 100.00 100.00 - -
Savanna Power Solar 6, S.L.U. Acquisition 25 February 2021 Photovoltaic 100.00 100.00 - -
Arena Power Solar 33, S.L.U. Acquisition 15 March 2021 Photovoltaic 100.00 100.00 - -
Arena Power Solar 34, S.L.U. Acquisition 15 March 2021 Photovoltaic 100.00 100.00 - -
Arena Power Solar 35, S.L.U. Acquisition 15 March 2021 Photovoltaic 100.00 100.00 - -
Savanna Power Solar 9, S.L.U. Acquisition 15 March 2021 Photovoltaic 100.00 100.00 - -
Savanna Power Solar 10, S.L.U. Acquisition 15 March 2021 Photovoltaic 100.00 100.00 - -
Energía Eólica Galerna, S.L.U. Acquisition 26 March 2021 Wind 100.00 100.00 - -
Energía Eólica Gregal, S.L.U. Acquisition 26 March 2021 Wind 100.00 100.00 - -
Energía Eólica Abrego, S.L.U. Acquisition 17 May 2021 Wind 100.00 100.00 - -
Energía Base Natural, S.L.U. Acquisition 17 May 2021 Photovoltaic 100.00 100.00 - -
Energía y Naturaleza, S.L.U. Acquisition 17 May 2021 Photovoltaic 100.00 100.00 - -
Empresa De Alumbrado Eléctrico De Ceuta, S.A. Acquisition 9 June 2021 Supplier and distribution 96.41 96.41 96.37 96.37
Ateca Renovables, S.L. ((1)) Formed 18 June 2021 Photovoltaic 50.00 50.00 - -
Terrer Renovables, S.L. ((1)) Formed 18 June 2021 Photovoltaic 29.57 29.57 - -
Planta Eólica Europea, S.A.U. ((2)) Acquisition 24 June 2021 Wind 100.00 100.00 56.12 56.12
Infraestructuras San Serván 220, S.L.( (1)) Acquisition 27 July 2021 Photovoltaic 30.80 30.80 - -
FRV Corchitos I, S.L.U. Acquisition 27 July 2021 Photovoltaic 100.00 100.00 - -
FRV Corchitos II Solar, S.L.U. Acquisition 27 July 2021 Photovoltaic 100.00 100.00 - -
FRV Zamora Solar 1, S.L.U. Acquisition 27 July 2021 Photovoltaic 100.00 100.00 - -
FRV Zamora Solar 3, S.L.U. Acquisition 27 July 2021 Photovoltaic 100.00 100.00 - -
FRV Tarifa, S.L.U. Acquisition 27 July 2021 Photovoltaic 100.00 100.00 - -
FRV Villalobillos S.L.U. Acquisition 27 July 2021 Photovoltaic 100.00 100.00 - -
FRV Gibalbin -Jerez, S.L.U. Acquisition 27 July 2021 Photovoltaic 100.00 100.00 - -
FRV Puerto Santa María Energía I, S.L.U. Acquisition 27 July 2021 Photovoltaic 100.00 100.00 - -
FRV Puerto Santa María Energía II, S.L.U. Acquisition 27 July 2021 Photovoltaic 100.00 100.00 - -
Savanna Power Solar 13, S.L.U. Acquisition 29 July 2021 Photovoltaic 100.00 100.00 - -
Savanna Power Solar 12, S.L.U. Acquisition 29 July 2021 Photovoltaic 100.00 100.00 - -
Arena Power Solar 20, S.L.U. Acquisition 29 July 2021 Photovoltaic 100.00 100.00 - -
1. Companies included in the Consolidated Financial Statements by the equity
method for a total amount of Euro 1 million
2. This transaction had an impact of Euro 1 million on equity.
Corporate operations in the renewable energy business.
In the period January-September 2021, the main corporate operations formalised
correspond to the renewables business.
The total transaction price was Euro 104 million, of which Euro 29 million
were still payable at 30 September 2021, subject to compliance with certain
contractual clauses (see section 6.5. Statement of Cash Flows of this
Consolidated Management Report).
Of the total amount, Euro 87 million related to the price of the shareholding
in those companies and Euro 17 million to the subordinated debt that the
acquired companies assumed with their former shareholders.
The acquisition of these companies led to an accounting entry of Euro 85
million under “Intangible assets” in the Consolidated Statement of
Financial Position, relating almost in full to the value of the licences to
develop photovoltaic plant projects.
The companies are currently applying for permits and licences to carry out
their projects and/or are in the construction phase. Therefore, exploitation
has not yet started on the renewable energy facilities, and no ordinary
revenue has been generated.
ENDESA's objective with this acquisition of wind farms and photovoltaic plants
under development will be to reinforce its presence in the Iberian generation
market by extending the renewable asset portfolio in its production "mix".
4.2. COVID-19 Health Crisis.
Information relating to the main impacts for ENDESA with respect to the
COVID-19 Health Crisis are described in Note 2.2.1 to the Consolidated
Financial Statements for the year ended 31 December 2020.
ENDESA is constantly monitoring the evolution of the COVID-19 pandemic,
together with the changes in macroeconomic, financial and trade variables, as
well as the regulatory measures in force, to update the estimate of the
possible effects on the Consolidated Financial Statements, in line with the
recommendations of the European Securities and Markets Authority (ESMA) and
the Spanish Securities Market Commission (“CNMV”). These effects are
detailed below in the following sections of this Consolidated Management
Report:
Matters Sections Contents
Derivatives and hedge transactions 5.2.1 Compliance with the criteria established by the regulations to apply hedges.
Credit risk 5.2.2 Impact of the health crisis.
Income tax 5.2.6 Recovery of deferred tax assets.
Leases 6.2 Effect of the health crisis on the lease arrangements signed.
Financial debt 6.2 Refinancing of financial debt.
Liquidity risk 6.2 Financial transactions arranged.
Investments 6.6 Impact of the health crisis on the implementation of the investment plan.
Taken together, the effects of the health crisis in the period
January-September 2021 did not have a significant impact on gross operating
income (EBITDA) or operating income (EBIT) (negative impact of Euro 81 million
and Euro 104 million, respectively, in the period January-September 2020, in
addition to the costs accruing from the Public Accountability Plan, in the
amount of Euro 17 million).
5. Performance of ENDESA's operations and results in the period
January-September 2021.
5.1. Operating performance.
Operating figures SDGs ((1)) Unit January - September January - September % Var.
2021 2020
Electricity generation ((2)) GWh 42,581 42,150 1.0
Generation of renewable electricity 7 GWh 9,523 9,943 (4.2)
Gross installed capacity MW 22,474( (3)) 22,465( (4)) 0.0
Net installed capacity MW 21,660( (3)) 21,652 ((4)) 0.0
Net installed mainland renewable capacity 7 MW 7,7138( (3)) 7,719 ((4)) (0.1)
Net installed mainland renewable capacity 7 % 45( (3)) 45 ((4)) -
Additional installed renewable capacity 7 MW 86( (3)) 391 ((4)) (78.0)
Energy distributed ((5)) 9 GWh 98,601 93,206 5.8
Digitalised customers ((6)) 9 Thousands 12,460( (3)) 12,389 ((4)) 0.6
Distribution and transmission networks 9 km 316,092 ((3)) 315,365 ((4)) 0.2
End users ((7)) Thousands 12,337( (3)) 12,291( (4)) 0.4
Digitalised customers Ratio ((8)) (%) 100.0( (3)) 100.0 ((4)) -
Gross electricity sales ((2)) GWh 66,348 66,414 (0.1)
Net electricity sales( (9)) GWh 60,124 60,585 (0.8)
Gas sales ((10)) GWh 58,270 48,762 19.5
Number of customers (electricity) ((11) (12)) Thousands 10,173( (3)) 10,420( (4)) (2.4)
Deregulated market ((13)) Thousands 5,623( (3)) 5,690 ((4)) (1.2)
Public and private electricity charging stations 11 Units 8,442 ((3)) 7,072 ((4)) 19.4
Public lighting points 11 Units 101( (3)) 100 ((4)) 1.0
Final headcount No. of employees 9,266( (3)) 9,591( (4)) (3.4)
Average headcount No. of employees 9,304 9,772 (4.8)
(1) Sustainable Development Goals.
(2) At power plant busbars.
(3) At 30 September 2021.
(4) At 31 December 2020.
(5) Energy supplied to customers, with or without a contract, ancillary
consumption of generators and output towards other grids (transmission or
distribution).
(6) Activated smart meters.
(7) Customers of distribution companies.
(8) Number of digitalised customers / End users (%).
(9) Sales to end customers.
(10) Without in-house generation consumption.
(11) Supply points.
(12) Customers of supply companies.
(13) Customers of deregulated supply companies.
Electricity generation.
ENDESA's electricity production in the period January-September 2021 was
42,581 GWh, up 1.0% on the same period of the previous year, as follows:
GWh
Electricity Generation ((1)) January - September January - September % Var.
2021
2020
Mainland 34,495 34,560 (0.2)
Renewable energy plants 9,523 9,943 (4.2)
Hydroelectric 4,864 6,042 (19.5)
Wind( (2)) 3,853 3,481 10.7
Photovoltaic ((3)) 805 420 91.7
Rest 1 - N/A
Nuclear power 19,895 19,523 1.9
Coal 415 975 (57.4)
Combined cycle (CCGT) 4,662 4,119 13.2
Non-mainland Territories (TNP) 8,086 7,590 6.5
Coal 47 55 (14.5)
Fuel-gas 2,965 3,184 (6.9)
Combined cycle (CCGT) 5,074 4,351 16.6
TOTAL 42,581 42,150 1.0
(1) At power plant busbars.
(2) The period January-September 2021 includes 84 GWh corresponding to
Non-mainland Territories (TNP) (92 GWh January-September 2020).
(3) The period January-September 2021 includes 38 GWh corresponding to
Non-mainland Territories (TNP) (0 GWh January-September 2020).
Non-emitting renewable and nuclear technologies accounted for 85.3% of
ENDESA's mainland generation mix in the period January-September 2021,
compared with 85.5% for the rest of the sector (85.3% and 79.9%, respectively,
in the period January-September 2020).
Gross and net installed capacity.
ENDESA's gross and net installed capacity at 30 September 2021 was 22,474 MW
and 21,660 MW, respectively, as detailed below:
Gross installed capacity 30 September 2021 31 December 2020 % Var.
MW Percentage (%) MW Percentage (%)
Mainland 17,738 78.9 17,729 78.9 0.1
Renewable energy plants( (1) (2)) 7,834 34.9 7,825 34.8 0.1
Hydroelectric 4,787 21.3 4,793 21.3 (0.1)
Wind( (3)) 2,422 10.8 2,423 10.8 (0.0)
Photovoltaic ((4)) 625 2.8 609 2.7 2.6
Nuclear power 3,453 15.4 3,453 15.4 -
Coal 2,627 11.6 2,627 11.7 -
Combined cycle (CCGT) 3,824 17.0 3,824 17.0 -
Non-mainland Territories (TNP) 4,736 21.1 4,736 21.1 -
Coal 260 1.2 260 1.2 -
Fuel-gas 2,619 11.7 2,619 11.7 -
Combined cycle (CCGT) 1,857 8.2 1,857 8.3 -
TOTAL 22,474 100.0 22,465 100.0 0.0
(1) At 30 September 2021 and 31 December 2020, the additional capacity was 15
MW and 391 MW, respectively.
(2) At 30 September 2021, mainland gross installed renewable energy capacity
accounted for 44% of the total mainland gross installed capacity (44% at 31
December 2020).
(3) At 30 September 2021 and 31 December 2020, it included 40 MW corresponding
to Non-mainland Territories (TNP).
(4) At 30 September 2021, it included 37 MW corresponding to Non-mainland
Territories (TNP) (22 MW at 31 December 2020).
Net installed capacity 30 September 2021 31 December 2020 % Var.
MW Percentage (%) MW Percentage (%)
Mainland 17,397 80.3 17,388 80.3 0.1
Renewable energy plants( (1) (2)) 7,790 36.0 7,781 35.9 0.1
Hydroelectric 4,743 21.9 4,749 21.9 (0.1)
Wind( (3)) 2,422 11.2 2,423 11.2 (0.0)
Photovoltaic ((4)) 625 2.9 609 2.8 2.6
Nuclear power 3,328 15.4 3,328 15.4 -
Coal 2,523 11.6 2,523 11.7 -
Combined cycle (CCGT) 3,756 17.3 3,756 17.3 -
Non-mainland Territories (TNP) 4,263 19.7 4,264 19.7 (0.0)
Coal 241 1.1 241 1.1 -
Fuel-gas 2,334 10.8 2,334 10.8 -
Combined cycle (CCGT) 1,688 7.8 1,689 7.8 (0.1)
TOTAL 21,660 100.0 21,652 100.0 0.0
(1) At 30 September 2021 and 31 December 2020, the additional capacity was 15
MW and 391 MW, respectively.
(2) At 30 September 2021, mainland net installed renewable energy capacity
accounted for 45% of the total mainland net installed capacity (45% at 31
December 2020).
(3) At 30 September 2021 and 31 December 2020, it included 40 MW corresponding
to Non-mainland Territories (TNP).
(4) At 30 September 2021, it included 37 MW corresponding to Non-mainland
Territories (TNP) (22 MW at 31 December 2020).
Electricity and gas sales.
Electricity.
At 30 September 2021, ENDESA had 10,173,048 electricity customers, down 2.4%
on 31 December 2020, as shown in the following breakdown:
Thousands
Number of customers (Electricity) ((1) (2)) 30 September 31 December % Var.
2021
2020
Regulated market 4,550 4,730 (3.8)
Mainland Spain 3,877 4,020 (3.6)
Non-mainland Territories (TNP) 673 710 (5.2)
Deregulated market 5,623 5,690 (1.2)
Mainland Spain 4,355 4,444 (2.0)
Non-mainland Territories (TNP) 831 838 (0.8)
Outside Spain 437 408 7.1
TOTAL 10,173 10,420 (2.4)
Revenue / Supply points( (3)) 1.3 1.1 -
(1) Supply points.
(2) Customers of supply companies.
(3) Relationship between annualised revenue from electricity sales and the
number of electricity supply points (Thousands of euros / Supply points).
ENDESA's gross and net sales to these customers in the period
January-September 2021 totalled 66,348 GWh and 60,124 GWh, respectively,
similar to those of January-September 2020, as follows:
GWh
Gross electricity sales ((1)) Net electricity sales ((2))
January - September January - September % Var. January - September January - September % Var.
2021
2020
2021
2020
Regulated price 9,591 9,886 (3.0) 8,151 8,523 (4.4)
Deregulated market 56,757 56,528 0.4 51,973 52,062 (0.2)
Spanish 48,479 49,022 (1.1) 44,167 44,974 (1.8)
Outside Spain 8,278 7,506 10.3 7,806 7,088 10.1
TOTAL 66,348 66,414 (0.1) 60,124 60,585 (0.8)
(1) At power plant busbars.
(2) Sales to end customers.
Gas.
At 30 September 2021, ENDESA had 1,664,715 gas customers, down 0.5% on the
number of existing customers at 31 December 2020, as shown in the following
breakdown:
Thousands
Number of customers (gas) ((1)) 30 September 31 December % Var.
2021
2020
Regulated market 235 233 0.9
Mainland Spain 212 209 1.4
Non-mainland Territories (TNP) 23 24 (4.2)
Deregulated market 1,430 1,440 (0.7)
Mainland Spain 1,233 1,252 (1.5)
Non-mainland Territories (TNP) 70 71 (1.4)
Outside Spain 127 117 8.5
TOTAL 1,665 1,673 (0.5)
Revenue / Supply points( (2)) 1.3 1.1 -
(1) Supply points.
(2) Relationship between annualised revenue from gas sales and the number of
gas supply points (Thousands of euros / Supply points).
In the period January-September 2021, ENDESA sold 58,270 GWh to customers in
the natural gas market, up 19.5% on January-September 2020.
GWh
Gas sales January - September January - September % Var.
2021
2020
Deregulated market 29,875 28,037 6.6
Regulated market 826 722 14.4
International market 12,792 12,279 4.2
Wholesale business 14,777 7,724 91.3
TOTAL( (1)) 58,270 48,762 19.5
(1) Excluding own generation consumption.
Electricity distribution.
Supply quality measures January - September January - September % Var.
2021
2020
Energy distributed (GWh) ((1)) 98,601 93,206 5.8
Energy losses (%)( (2)) 7.1 7.2 -
Installed Capacity Equivalent Interruption Time (Average) – ICEIT( 47.9 39.7 20.7
)(Minutes)( (3))
Duration of Interruptions in the Distribution Grid – SAIDI (Minutes)( (4)) 66.1 76.5 (13.6)
Number of Interruptions in the Distribution Grid – SAIFI( (4)) 1.4 1.4 -
(1) Energy supplied to customers with or without a contract, ancillary
consumption of generators and output towards other grids (transmission or
distribution).
(2) Input of energy in the distribution grid (or energy injected into the
distribution grid), less distributed energy divided among the energy input to
the distributor (or energy injected into the distribution grid).
(3) Criteria of the Spanish regulator Includes figures for the Installed
Capacity Equivalent Interruption Time (ICEIT) in-house, scheduled and
transmission.
(4) Source: In-house. Figures for the last 12 months.
Workforce.
The tables below show ENDESA's final and average headcounts:
Number of employees
Final headcount % Var.
30 September 2021 31
Dec
emb
er
202
0
Male Female Total Male Female Total
Generation and Supply 3,704 1,110 4,814 3,596 1,041 4,637 3.8
Distribution 2,363 466 2,829 2,503 440 2,943 (3.9)
Structure and others ((1)) 856 767 1,623 1,136 875 2,011 (19.3)
TOTAL 6,923 2,343 9,266 7,235 2,356 9,591 (3.4)
(1) Structure and services.
Number of employees
Average headcount % Var.
January - September 2021 Jan
uar
y -
Sep
tem
ber
202
0
Male Female Total Male Female Total
Generation and Supply 3,706 1,094 4,800 4,046 1,112 5,158 (6.9)
Distribution 2,420 447 2,867 2,502 434 2,936 (2.4)
Structure and others ((1)) 880 757 1,637 893 785 1,678 (2.4)
TOTAL 7,006 2,298 9,304 7,441 2,331 9,772 (4.8)
(1) Structure and services.
5.2. Analysis of results.
ENDESA reported net income of Euro 1,459 million in the period
January-September 2021, a decrease of 3.4% on the Euro 1,511 million reported
in the same period of the previous year.
Net ordinary income in the period January-September 2021 amounted to Euro
1,459 million, down 14.2% with respect to the same period of the previous
year.
The table below presents the details of the most relevant figures in ENDESA's
Consolidated Income Statement in the period January-September 2021 and their
fluctuations compared with the same period of the previous year:
Millions of Euros
Most significant figures
January - January - % Var.
September September
2021
2020
Revenue 18,603 12,959 43.6
Procurements and services (14,075) (8,562) 64.4
Contribution margin ((1)) 4,528 4,397 3.0
Self-constructed assets 182 161 13.0
Personnel expenses (681) (516) 32.0
Other fixed operating expenses (904) (906) (0.2)
Gross operating income (EBITDA) ((1)) 3,125 3,136 (0.4)
Depreciation and amortisation, and impairment losses (1,177) (1,104) 6.6
Operating income (EBIT) ((1)) 1,948 2,032 (4.1)
Net financial profit/(loss) ((1)) (12) (82) (85.4)
Income before tax 1,926 1,988 (3.1)
Net income ((1)) 1,459 1,511 (3.4)
Net ordinary income ((1)) 1,459 1,700 (14.2)
(1) See the definition in Appendix I - Alternative Performance Measures (APMs)
of this Consolidated Management Report.
Gross operating income (EBITDA) in the period January-September 2021 stood at
Euro 3,125 million (-0.4%).
Operating income (EBIT) in the period January-September 2021 fell by 4.1% with
respect to the same period of the previous year, to Euro 1,948 million.
5.2.1. Revenue.
In the period January-September 2021, revenue stood at Euro 18,603 million, up
Euro 5,644 million (+43.6%) on that obtained in the period January-September
2020.
The table below presents the detail of revenue in the period January-September
2021 and its variations compared with the same period in the previous year:
Millions of Euros
Revenue
January - January - Difference % Var.
September September
2021
2020
Sales 13,535 12,314 1,221 9.9
Other operating income 5,068 645 4,423 685.7
TOTAL 18,603 12,959 5,644 43.6
Sales
The table below presents the details of ENDESA's sales in the period
January-September 2021 and of their variations with respect to the same period
of the previous year:
Millions of Euros
Sales
January - September January - September Difference % Var.
2021
2020
Electricity sales 9,946 8,879 1,067 12.0
Sales to the deregulated market 6,571 6,175 396 6.4
Sales to the Spanish deregulated market 5,716 5,399 317 5.9
Sales to customers in deregulated markets outside Spain 855 776 79 10.2
Sales at regulated prices 1,737 1,368 369 27.0
Wholesale market sales 967 410 557 135.9
Compensation from Non-mainland Territories (TNP) 653 811 (158) (19.5)
Remuneration for investment in renewable energies - 100 (100) (100.0)
Other electricity sales 18 15 3 20.0
Gas sales 1,574 1,393 181 13.0
Sales to the deregulated market 1,527 1,351 176 13.0
Sales at regulated prices 47 42 5 11.9
Regulated revenue from electricity distribution 1,537 1,584 (47) (3.0)
Other sales and services rendered 478 458 20 4.4
TOTAL 13,535 12,314 1,221 9.9
Electricity sales to deregulated market customers.
In the period January-September 2021, sales on the deregulated market amounted
to Euro 6,571 million (+6.4%), in accordance with the following details:
* Sales in the Spanish deregulated market amounted to Euro 5,716 million, up
Euro 317 million (+5.9%) with respect to the same period of the previous year
due, mainly, to the evolution of the unit price.
* Revenue from sales to customers in deregulated markets outside of Spain
amounted to Euro 855 million, up Euro 79 million (+10.2%) with respect to the
same period of the previous year due, mainly, to the changes in the unit
price.
Electricity sales at a regulated price.
These sales generated revenue of Euro 1,737 million, up 27.0% on the period in
the period January-September 2020, due mainly to the increased price.
Electricity sales in the wholesale market.
Revenue from wholesale market sales in the period January-September 2021
amounted to Euro 967 million and includes, in the amount of Euro 188 million,
the recognition by ENDESA of its right to be compensated for the
internalisation of the CO(2) emission rights assigned free of charge under the
National Emission Rights Allocation Plan (“PNA”), which it does not have a
legal duty to bear (see section 5.2.3 Net Financial Result of this
Consolidated Management Report).
Gas sales.
Revenue from gas sales in the period January-September 2021 rose to Euro 1,574
million, up Euro 181 million (+13.0%) on the same period of 2020, as follows:
* Gas sales in the deregulated market totalled Euro 1,527 million, up Euro 176
million (+13.0%) on those of January-September 2020, due mainly to the
increase in the number of physical units sold.
* Revenue from gas sales to customers at a regulated price amounted to Euro 47
million, up Euro 5 million (11.9%) on the same period of the previous year
due, mainly, to the increase in the number of physical units sold.
Compensation from Non-mainland Territories (TNP).
In the period January-September 2021, compensation for Non-mainland
Territories (TNP) generation cost overruns amounted to Euro 653 million, down
Euro 158 million (-19.5%) on the same period in the previous year, due mainly
to the increased arithmetic average price in the wholesale electricity market.
Electricity distribution.
In the period January-September 2021, ENDESA distributed 98,601 GWh of power
in the Spanish market, a year-on-year increase of 5.8% compared with
January-September 2020.
Regulated revenue from the distribution activity in the period
January-September 2021 amounted to Euro 1,537 million, representing a
reduction of Euro 47 million (-3.0%) with respect to the same period in the
previous year, due mainly to the new financial remuneration rate applicable
from 1 January 2021.
Other operating income
The table below presents the details of Other operating income in the period
January-September 2021 and of its variations compared with the same period in
the previous year:
Millions of Euros
Other operating income
January - January - Difference % Var.
September September
2021
2020
Changes in energy stock derivatives 4,754 371 4,383 1,181.4
Grants released in profit or loss ((1)) 33 ((2)) 15 18 120.0
Recognition of liabilities from contracts with customers in profit or loss 123 121 2 1.7
Rendering of services at facilities 2 2 - -
Trading rights 29 30 (1) (3.3)
Third party compensations 17 14 3 21.4
Other 110 92 18 19.6
TOTAL 5,068 645 4,423 685.7
(1) The period January-September 2021 included Euro 22 million related to
capital grants and Euro 11 million of operating grants (Euro 4 million and
Euro 11 million, respectively, in the period January-September 2020).
(2) Includes the recognition of a grant at Empresa Carbonífera del Sur
ENCASUR, S.A.U, in the amount of Euro 10 million, granted to cover
non-recurring costs arising from the closure of coal production units under
the Spanish Closure Plan for uncompetitive coal mining.
In the period January-September 2021, Other operating income totalled Euro
5,068 million, up Euro 4,423 million (+685.7%) with respect to the amount
recognised in the period January-September 2020, due largely to the Euro 4,383
million increase in revenue from the valuation and settlement of energy stock
derivatives, arising mainly from changes in the valuation and settlement of
electricity and gas derivatives.
This income is considered jointly with the Euro 4,139 million increase in
costs under the same heading recognised in "Other variable procurements and
services” in the Consolidated Income Statement (see section 5.2.2. Operating
expenses of this Consolidated Management Report).
The derivatives and hedging transactions performed by ENDESA relate mainly to
transactions arranged to hedge foreign currency risk or commodity price risk
(electricity, fuel and CO(2) emission rights), the purpose of which is to
eliminate or significantly reduce these risks in the underlying hedged
transactions. In the current context, ENDESA has reviewed that the criteria
established by the regulations to apply hedge accounting continue to be
complied with.
5.2.2. Operating expenses.
Operating expenses in the period January-September 2021 amounted to Euro
16,655 million, up 52.4% on the same period of the previous year.
The table below presents the detail of operating expenses in the period
January-September 2021 and their variations compared with the same period in
the previous year:
Millions of Euros
Operating expenses
January - September January - September Difference % Var.
2021
2020
Procurements and services 14,075 8,562 5,513 64.4
Power purchases 3,844 2,681 1,163 43.4
Fuel consumption 1,019 853 166 19.5
Transmission expenses 3,665 3,736 (71) (1.9)
Other variable procurements and services 5,547 1,292 4,255 329.3
Self-constructed assets (182) (161) (21) 13.0
Personnel expenses 681 516 165 32.0
Other fixed operating expenses 904 906 (2) (0.2)
Depreciation and amortisation, and impairment losses 1,177 1,104 73 6.6
TOTAL 16,655 10,927 5,728 52.4
Procurements and services (variable costs).
Procurements and services expenses (variable costs) in the period
January-September 2021 totalled Euro 14,075 million, up 64.4% on the same
period of the previous year.
The changes in these costs in the period January-September 2021 were as
follows:
* Power purchases rose by Euro 1,163 million (+43.4%) to Euro 3,844 million,
mainly as a result of the increased arithmetic average price in the wholesale
electricity market, which stood at Euro 78.5/MWh (+146.1%).
In the period January-September 2020, this heading included an amount equal to
Euro 19 million (Euro 14 million, net of the tax effect) corresponding to the
impairment of inventories at mainland coal-fired plants (see section 5.2.7.
Net income of this Consolidated Management Report).
* Fuel consumption stood at Euro 1,019 million, with an increase of Euro 166
million (+19.5%) with respect to the same period of the previous year, due
mainly to changes in commodity prices (see section 3.1. Performance of the
main market indicators of this Consolidated Management Report).
* “Other variable procurements and services” in the Consolidated Income
Statement stood at Euro 5,547 million, up Euro 4,255 million (+329.3%) on the
same period of the previous year, as follows:
Millions of Euros
Other variable procurements and services
January - September January - September Difference % Var.
2021
2020
Changes in energy stock derivatives 4,316 177 4,139 2,338.4
Carbon dioxide (CO(2)) emission rights 214 168 46 27.4
Tax on electricity production 152 166 (14) (8.4)
Treatment of radioactive waste 164 160 4 2.5
Street lighting / works licences 146 127 19 15.0
Nuclear charges and taxes 90 94 (4) (4.3)
Social Bonus 44 37 7 18.9
Catalonia environmental tax 82 29 53 182.8
Water tax (9) 23 (32) (139.1)
Other 348 311 37 11.9
TOTAL 5,547 1,292 4,255 329.3
This amount includes:
* The increase of Euro 4,139 million with respect to the amount recognised in
the period January-September 2020 in the expenses relating to the measurement
and settlement of energy derivatives, due mainly to the changes in the
measurement and settlement of electricity and gas derivatives, which are
considered jointly with the increase of Euro 4,383 million in the revenue
under this item recognised in “Other operating income” in the Consolidated
Income Statement (see section 5.2.1. Revenue of this Consolidated Management
Report).
* The increase of Euro 46 million (27.4%) in carbon dioxide (CO(2)) emission
rights, due to the changes in their average price (68.8%) (see section 3.1.
Performance of the main market indicators of this Consolidated Management
Report).
* The decrease of Euro 14 million (-8.4%) in the Electricity Production tax due,
among other reasons, to the extension of the temporary suspension regarding
the tax on the value of electricity production, in accordance with the
publication of Royal Decree Law 17/2021, of 14 September 2021 (see section 8.
Regulatory Framework of this Consolidated Management Report).
* The increase of Euro 53 million in the expense relating to the tax on
facilities affecting the environment in the Catalonia Autonomous Community as
a result of the publication of Law 5/2020, of 29 April 2020, of the Catalonian
Government in the second quarter of 2020.
* In the period January-September 2021, the changes in fees payable on
hydroelectric production includes, among other things, the reversal of Euro 48
million due to the declaration of the unenforceability of the State water tax
under the Supreme Court ruling of 19 April 2021 (see section 5.2.3. Net
Financial Result of this Consolidated Management Report).
Fixed operating expenses.
The table below presents the detail of fixed operating expenses in the first
nine months of 2021 and their variations compared with the same period of the
previous year:
Millions of Euros
Fixed operating expenses
January - September January - September Difference % Var.
2021
2020
Self-constructed assets (182) (161) (21) 13.0
Personnel expenses 681 516 165 32.0
Other fixed operating expenses 904 906 (2) (0.2)
TOTAL 1,403 1,261 142 11.3
In the period January-September 2021, the fixed operating costs amounted to
Euro 1,403 million, which represents an increase of Euro 142 million (+11.3%),
in comparison with January-September 2020, mainly as a result of the following
aspects:
* The implementation in the period January-September 2020 of the “V ENDESA
Framework Collective Bargaining Agreement”, which generated a positive
impact of Euro 515 million on the Consolidated Income Statement (Euro 386
million, net of the tax effect).
* The charge in the period January-September 2020 to certain provisions for
workforce restructuring as part of the “Agreement on Voluntary Measures to
Suspend or Terminate Employment Contracts”, amounting to Euro 372 million in
the Consolidated Income Statement. This amount included Euro 213 million (Euro
160 million, net of the tax effect), in conformity with ENDESA's
decarbonisation commitment (see section 5.2.7. Net income of this Consolidated
Management Report).
* The updating of provisions for current workforce restructuring plans led to an
impact of less than Euro 1 million in the Consolidated Income Statement in the
period January-September 2021 (Euro 47 million, positive, in the period
January-September 2020).
* The recognition in the period January-September 2020 of a cost of Euro 17
million corresponding to the Public Responsibility Plan for the COVID-19
Health Crisis (see section 4.2. COVID-19 Health Crisis and 5.2.7. Net income
of this Consolidated Management Report).
Excluding the effects described in the foregoing paragraphs, fixed operating
expenses in the period January-September 2021 would have fallen by Euro 31
million (-2.2%) on the same period in the previous year, due, among other
reasons, to the reduction of ENDESA's average workforce (-4.8%) (see section
5.1. Operating performance of this Consolidated Management Report).
Depreciation and amortisation, and impairment losses
The table below presents the detail of depreciation and amortisation, and
impairment losses in the period January-September 2021 and of their variations
with respect to the same period of the previous year:
Millions of Euros
Depreciation and amortisation, and impairment losses
January - September January - September Difference % Var.
2021
2020
DEPRECIATION AND AMORTISATION 1,117 1,062 55 5.2
Provision for the depreciation of property, plant and equipment 943 902 41 4.5
Provision for amortisation of intangible assets 174 160 14 8.8
IMPAIRMENT LOSSES 60 42 18 42.9
Non-financial assets - (29) 29 (100.0)
Provision for impairment losses on property, plant and equipment and - (27)( (1)) 27 (100.0)
investment property
Provision for impairment losses on intangible assets - (2) 2 (100.0)
Financial assets 60 71 (11) (15.5)
Provision for impairment losses on receivables from contracts with customers 60 81 (21) (25.9)
Provision for impairment losses on other financial assets - (10) 10 (100.0)
TOTAL 1,177 1,104 73 6.6
(1) Includes the reversal for the impairment of non-financial assets (Euro 1
million) and the update of dismantling provisions (Euro 26 million).
Depreciation and amortisation, and impairment losses in the period
January-September 2021 amounted to Euro 1,177 million, up Euro 73 million
(+6.6%) with respect to the same period of the previous year, as a result,
mainly of the increased depreciation and amortisation charge amounting to Euro
55 million, due, among other matters, of the investment drive performed at
electricity production and distribution facilities, in line with ENDESA's
Strategic Plan (see Section 6.6. Investments of this Consolidated Management
Report).
In the period January-September 2021, impairment losses of financial assets
amounted to Euro 60 million, and corresponding in full, to the impairment
losses on accounts receivable on contracts with customers (Euros 81 million in
the period January-September 2020). Its evolution is due, mainly, to the
current backdrop of economic recovery in Spain and Portugal and the
intensification of collection management, which was temporarily suspended in
the period January-September 2020, due to the extraordinary measures in
response to the economic situation caused by COVID-19.
5.2.3. Net Financial Result.
The Company incurred net financial loss in the periods January-September 2021
and 2020, in the amounts of Euro 12 million and Euro 82 million, negative and
respectively.
The table below presents the detail of net financial profit/(loss) in the
first nine months of 2021 and its variations compared with the same period in
the previous year:
Millions of Euros
Net financial profit/(loss) ((1))
January - September January - September Difference % Var.
2021
2020
Net financial expense ((1)) (8) (90) 82 (91.1)
Financial income 114 24 90 375.0
Financial expense (122) (114) (8) 7.0
Net exchange differences (4) 8 (12) (150.0)
TOTAL (12) (82) 70 (85.4)
(1) See definition in Appendix I - Alternative Performance Measure (APMs) of
this Consolidated Management Report.
In the period January-September 2021, net financial expense amounted to Euro 8
million, down Euro 82 million (-91.1%) on the same period of the previous year
In the first nine months of 2021, net exchange differences were negative in
the amount of Euro 4 million (Euro 8 million, positive, in the period
January-September 2020). The variation is due mainly to the fluctuations in
the Euro/ US dollars exchange rate for January-September 2021 compared to the
same period of the previous year and its impact on financial debt, in US
dollars (USD), associated with rights of use corresponding to charter
agreements for the transmission of liquefied natural gas (LNG).
In analysing changes in net financial expense in the period January-September
2021, the following effects need to be taken into account:
Millions of Euros
Net financial expense ((1))
January - September January - September Difference % Var.
2021
2020
Net expense in respect of financial liabilities at amortised cost (98) (99) 1 (1.0)
Income from financial assets at amortised cost - 2 (2) (100.0)
Update of provisions for workforce restructuring plans, dismantling of 4 1 3 300.0
facilities and impairment of financial assets in accordance with IFRS 9
“Financial Instruments”
Interest on the late payment of 2016-2017 income tax - 7 (7) (100.0)
Late-payment interest on the compensation of carbon dioxide (CO(2)) emission 84 - 84 N/A
rights for 2006 and State water tax
Other 2 (1) 3 (300.0)
TOTAL (8) (90) 82 (91.1)
(1) Net financial expense = Financial income - Financial expense.
Net expenses for financial liabilities at amortised cost amounted to Euro 98
million, down Euro 1 million (-1.0%) on those recognised in the same period of
the previous year, due to the combination of the following effects (see
section 6.2. Financial management of this Consolidated Management Report):
* The lower average cost of gross financial debt fell from 1.7% in the period
January-September 2020 to 1.5% in the period January-September 2021.
* The increase in average gross financial debt between both periods, which rose
from Euro 8,044 million in the period January-September 2020 to Euro 8,911
million in the period January-September 2021.
The net financial expense for the period January-September 2021 includes Euro
72 million for late payment interest in relation to ENDESA's right to be
compensated for the reduction of its remuneration as a generating company, in
the amount of the internalisation of the CO(2) emission rights allocated free
of charge by the National Emissions Allocation Plan (“PNA”), which it does
not have a legal duty to bear, and the late payment interest stemming from the
declaration of the unenforceability of the state water tax under the Supreme
Court ruling of 19 April 2021 (see section 5.2.1 Revenue and 5.2.2. Operating
expenses of this Consolidated Management Report).
5.2.4. Net profit/(loss) of companies accounted for using the equity method.
In the periods January-September 2021 and 2020, the net income of the
companies accounted for using the equity method amounted to Euro 13 million
and Euro 39 million, respectively, as follows:
Millions of Euros
Net profit/(loss) of companies accounted for using the equity method
January - September January - September
2021
2020
Associates (1) (2)
Tecnatom, S.A. (2) (3)
Gorona del Viento El Hierro, S.A. 1 -
Boiro Energía, S.A. (1) -
Other 1 1
Joint Ventures 14 41
Tejo Energia - Produção e Distribuição de Energia Eléctrica, S.A. 4 5
Nuclenor, S.A. - 25
Énergie Électrique de Tahaddart, S.A. 1 1
Suministradora Eléctrica de Cádiz, S.A. 3 2
Other 6 8
TOTAL 13 39
Nuclenor, S.A.
In the period January-September 2020, gains from the ownership interest of 50%
in Nuclenor, S.A., amounting to Euro 25 million, included the effect of Ruling
84/2020 of the Constitutional Court, of 15 July 2020, declaring the
non-constitutionality of the environmental tax caused by certain uses of
catchment waters by wind farms and by the high-voltage electricity
transmission facilities, regulated by the consolidated legal provisions of the
Castile and Leon Autonomous Community in the area of own and assigned taxes.
5.2.5. Gains/(losses) on disposal of assets.
In the period January-September 2021, gains/(losses) on disposal of assets
amounted to Euro 23 million compared to Euro 1 million, both negative, in the
period January-September 2020, as follows:
Millions of Euros
Gains/(losses) on disposal of assets
January - September January - September
2021
2020
Non-financial assets (3) 17
Transfer of optical fibre use rights - 4
Other gains and losses (3) 13
Disposals of investments in group companies and other - -
Disposals of property, plant and equipment( (1)) (3) 13 ((2))
Financial assets (20) (18)
Factoring transaction fees (20) (18)
TOTAL (23) (1)
(1) Corresponds to gains generated by the sale of land and buildings.
(2) Includes gross capital gains generated, totalling Euro 7 million, as a
result of the sale of a photovoltaic facility located at Paraje El
Acebuche-Retamar (Almería).
5.2.6. Income tax.
From January-September 2021, the income tax expense amounted to Euro 461
million, down Euro 12 million (-2.5%) with respect to the amount recognised in
the period January-September 2020.
The effective rate for the period January-September 2021 stood at 23.9% due,
mainly, to the materialisation of relief and credit in the amount allocated to
results, to the recognition of provisions not deductible for tax purposes and
to the limitation in the exemption of dividends and gains from 1 January 2021
(23.7% in the period January-September 2020).
At the date of approval of this Consolidated Management Report, the recovery
of deferred tax assets is not affected by the current context and the
effective rate does not reflect any legislative changes affecting income tax.
5.2.7. Net income.
Net income attributable to the Parent in the period January-September 2021
amounted to Euro 1,459 million, representing a drop of Euro 52 million (-3.4%)
with respect to the amount obtained in the same period of the previous year.
Net ordinary income attributable to the Parent in the period January-September
2021 and 2020 amounted to Euro 1,459 million and Euro 1,700 million,
respectively, as follows:
Millions of Euros
January - September January - September Difference % Var.
2021
2020
Net income( (1)) 1,459 1,511 (52) (3.4)
Net impairment losses on non-financial assets ((2)) - 14 (14) (100.0)
Mainland coal-fired thermal power plants, inventories and other materials - 14 (14) (100.0)
Net initial charge to the Decarbonisation Plan - 160 (160) (100.0)
Net expenses relating to the Public Responsibility Plan for the COVID-19 - 15 (15) (100.0)
Health Crisis
Net ordinary income( (3)) 1,459 1,700 (241) (14.2)
(1) Net income = Net income of the Parent.
(2) Over Euro 10 million.
(3) See definition in Appendix I - Alternative Performance Measures (APMs) of
this Consolidated Management Report.
Economic indicators.
Euros
Key figures ((1)) January - September January - September % Var.
2021
2020
Net ordinary earnings per share 1.378 1.606 (14.2)
Net earnings per share 1.378 1.427 (3.4)
Cash flow per share 0.814 1.860 (56.2)
Book value per share 6.474( (2)) 6.909 ((3)) (6.3)
(1) See the definition in Appendix I - Alternative Performance Measures (APMs)
of this Consolidated Management Report.
(2) At 30 September 2021.
(3) At 31 December 2020.
Profitability indicators (%) January - September January - September
2021
2020
Return on equity 26.54 27.77
Return on assets 5.10 7.01
Economic profitability 11.79 12.49
Return on capital employed (ROCE) 5.23 6.38
Return on invested capital (ROIC) 11.44 12.85
(1) See the definition in Appendix I - Alternative Performance Measures (APMs)
of this Consolidated Management Report.
6. Equity and financial analysis.
6.1. Net invested capital and financing.
Below are the details of the breakdown and changes in ENDESA's net invested
capital at 30 September 2021 and 31 December 2020:
Millions of Euros
30 September 31 December Difference % Var.
2021
2020
Net non-current assets:
Property, plant and equipment and intangible assets 23,154 22,753 401 1.8
Goodwill 462 462 - -
Investments accounted for using the equity method 199 217 (18) (8.3)
Other net non-current assets/(liabilities) (4,389) (4,350) (39) 0.9
Total net non-current assets ((1)) 19,426 19,082 344 1.8
Net working capital:
Trade receivables for sales and services and other receivables 10,696 3,151 7,545 239.4
Inventories 1,121 1,077 44 4.1
Other net current assets/(liabilities) 1,106 1,091 15 1.4
Suppliers and other payables (11,861) (6,194) (5,667) 91.5
Total net working capital( (1)) 1,062 (875) 1,937 (221.4)
Gross invested capital ((1)) 20,488 18,207 2,281 12.5
Deferred tax assets and liabilities and provisions:
Provisions for pensions and other similar obligations (603) (701) 98 (14.0)
Other provisions (3,333) (3,480) 147 (4.2)
Deferred tax assets and liabilities 453 338 115 34.0
Total deferred tax assets and liabilities and provisions ((1)) (3,483) (3,843) 360 (9.4)
Non-current assets classified as held for sale and discontinued operations - - - N/A
Net invested capital( (1)) 17,005 14,364 2,641 18.4
Equity 7,005 7,465 (460) (6.2)
Net financial debt( (1)) 10,000 6,899 3,101 44.9
(1) See the definition in Appendix I - Alternative Performance Measures (APMs)
of this Consolidated Management Report.
At 30 September 2021, net invested capital stood at Euro 17,005 million. The
changes in the period January-September 2021 were as follows:
* The increase in “Property, plant and equipment and intangible assets”
amounted to Euro 401 million (+1.8%), as a result mainly of gross investments
in the period January-September 2021, amounting to Euro 1,394 million,
partially offset by the period amortisation charge amounting to Euro 1,117
million (see sections 5.2.2. Operating Expenses and 6.6. Investments of this
Consolidated Management Report).
* The increase in "Net Working Capital" in the amount of Euro 1,937 million
(+221.4%), mainly as a result of the payment, during the period
January-September 2021, of the dividend charged against 2020 results in the
amount of euros 2,132 million, the increase of collateral deposits to operate
in financial markets in the amount of euros 161 million and the evolution,
between both periods, of the customer and creditor headings for the valuation
and settlement of energy commodity derivatives (see Sections 5.2. Analysis of
Results, 6.5. Cash Flows and 9.2. Dividends of this Consolidated Management
Report).
6.2. Financial Management
Financial debt.
At 30 September 2021, ENDESA had net financial debt of Euro 10,000 million, an
increase of Euro 3,101 million (+44.9%) on that existing at 31 December 2020.
The reconciliation of ENDESA's gross and net financial debt at 30 September
2021 and 31 December 2020 is as follows:
Millions of Euros
Reconciliation of financial debt
30 September 31 December Difference % Var.
2021
2020
Non-current financial debt 6,187 5,937 250 4.2
Current financial debt 4,387 1,372 3,015 219.8
Gross financial debt( (1)) 10,574 7,309 3,265 44.7
Cash and cash equivalents (568) (403) (165) 40.9
Financial derivatives recognised in financial assets (6) (7) 1 (14.3)
Net financial debt 10,000 6,899 3,101 44.9
(1) At 30 September 2021, it includes Euro 22 million corresponding to
financial derivatives recognised under financial liabilities (Euro 36 million
at 31 December 2020).
In order to analyze the evolution of the net financial debt it is necessary to
take into account, among other aspects, the payment of dividends that ENDESA,
S.A. has made to its shareholders during the period January-September 2021 in
the amount of Euro 2.0136 gross per share, which has meant a disbursement of
Euro 2,132 million (see Sections 6.5. Cash Flows and 9.2. Dividends of this
Consolidated Management Report), as well as the increase of Euro 444 million
in the balances tied up in collateral deposits as a result of operations in
the commodities and energy derivatives markets.
Structure.
The structure of ENDESA's gross financial debt at 30 September 2021 and 31
December 2020 was as follows:
Millions of Euros
Structure of gross financial debt
30 September 31 December 2020 Difference % Var.
2021
Euro 10,370 7,222 3,148 43.6
US dollar (USD) 204 87 117 134.5
TOTAL 10,574 7,309 3,265 44.7
Fixed rate 5,167 4,716 451 9.6
Floating rate 5,407 2,593 2,814 108.5
TOTAL 10,574 7,309 3,265 44.7
Sustainable financing (%) ((1)) 57 45 - -
Average life (years) ((1)) 4.2 4.6 - -
Average cost (%) ((1)) 1.5 1.7 - -
(1) See the definition in Appendix I - Alternative Performance Measures (APMs)
of this Consolidated Management Report.
At 30 September 2021, 49% of gross financial debt earned fixed interest while
51% earned floating interest. At this date, 98% of the Company's gross
financial debt was denominated in euros.
Maturity.
At 30 September 2021, the breakdown of the nominal value of gross financial
debt without derivatives by maturity was as follows:
Millions of Euros
Carrying amount Nominal value Maturity
30 September
2021( (1))
Current Non-current 2021 2022 2023 2024 Subsequent years
Bonds and other negotiable securities 3,715 3,694 12 2,561 1,133 - - 12
Bank financial debt 2,427 134 2,296 1 138 180 479 1,632
Other financial liabilities 4,410 555 3,855 491 85 78 3,076 680
Financial debt associated with rights of use 913 80 833 20 79 76 75 663
Other 3,497 475 3,022 471 6 2 3,001 17
TOTAL 10,552 4,383 6,163 3,053 1,356 258 3,555 2,324
(1) Not including Euro 22 million corresponding to financial derivatives.
Main financial transactions.
The main financial transactions in the period January-September 2021 were as
follows:
* ENDESA has registered a new Euro Commercial Paper (ECP) SDG7 emissions
programme for Euro 4,000 million, the outstanding balance being Euro 3,697
million at 30 September 2021, renewable with the backing of irrevocable bank
credit lines. This Programme incorporates sustainability objectives, in line
with ENDESA's Strategic Plan.
* Likewise, at the date of authorisation of this Consolidated Management Report,
the following financial transactions were performed, all of which incorporated
sustainability goals:
Millions of Euros
Transactions Counterparty Signature date Maturity date Amount
Loan ((1) (2)) CaixaBank, S.A., Bankia, S.A. and Kutxabank, S.A. 25 March 2021 25 March 2024 300
Line of credit ((1) (2)) CaixaBank, S.A., Bankia, S.A. and Kutxabank, S.A. 25 March 2021 25 March 2024 250
Lines of credit ((1)) ((3)) Various banks 25 March 2021 25 March 2025 1,955
Line of credit ((1)) BNP Paribas 25 March 2021 25 March 2025 100
Loan ((4)) CaixaBank, S.A. 31 March 2021 15 April 2028 150
Line of Credit ((1)) Deutsche Bank, S.A.E. 28 April 2021 28 April 2025 70
Intercompany credit line ((1)) ((5)) ENEL Finance International N.V. 25 May 2021 25 May 2025 1,700
Loan ((4)) Unicaja Banco, S.A. 28 June 2021 28 June 2028 75
Loan ((4)) Kutxabank, S.A. 30 July 2021 30 July 2028 75
Loan ((4)) Cajasur Banco S.A.U. 30 July 2021 30 July 2028 50
Loan ((4)) Unicaja Banco, S.A. 15 October 2021 15 October 2026 125
Loan ((4)) Kutxabank, S.A. 15 October 2021 15 October 2026 75
Loan ((4)) Various banks 27 October 2021 27 October 2028 100
TOTAL 5,025
1. Transactions described as sustainable on including the performance indicator
(KPI) in relation to ENDESA's commitment to ensure that its net installed
mainland capacity from renewable sources is 55% of the total net installed
capacity at 31 December 2022.
2. Corresponds to a financial transaction in "Club Deal" format in force renewed
at the signature date.
3. Corresponds to nine credit lines in force renewed at the signature date.
4. The credit conditions of this transactions are tied, for the first time for
ENDESA, to the objective established in the Company's Strategic Plan to reduce
specific emission of Scope 1 carbon dioxide (CO(2)) equivalent to 150g
CO(2)eq/kWh in 2023.
5. The formalisation of this credit line coincides with the cancellation of two
lines of credit that ENDESA held with ENEL Finance International N.V. until
that date, for the amount of Euro 1,000 million and Euro 700 million,
respectively.
At the date of approval of this Consolidated Management Report, ENDESA had not
had to resort to refinancing for its financial debt as a consequence of the
health crisis caused by COVID-19.
Likewise, in the period January-September 2021, ENDESA did not modify,
renegotiate or cancel clauses contained in those lease arrangements in which
it acts as lessee hence, consequently, no modifications were made to either
the asset for the right of use that constitutes the entitlement to use the
leased asset or the liability representing the present value of the obligation
to make lease payments during its term.
Financial stipulations.
Certain ENDESA companies' loans and financial debt contain the usual covenants
in this type of agreement. At the date of approval of this Consolidated
Management Report, neither ENDESA, S.A. nor any of its subsidiaries were in
breach of their financial obligations or any obligations that could require
early repayment of their liabilities.
Liquidity
At 30 September 2021, ENDESA's liquidity rose to Euro 4,629 million (Euro
4,493 million at 31 December 2020), as detailed below:
Millions of Euros
Liquidity
30 September 2021 31 December 2020 Difference % Var.
Cash and cash equivalents 568 403 165 40.9
Unconditional availability in credit lines ((1)) 4,061 4,090 (29) (0.7)
TOTAL 4,629 4,493 136 3.0
Debt maturity coverage ((number of months) (2)) 20 17 3 17.6
(1) At 30 September 2021 and 31 December 2020, Euro 1,700 million relate to
the available credit line with ENEL Finance International N.V.
(2) See the definition in Appendix I - Alternative Performance Measures (APMs)
of this Consolidated Management Report.
ENDESA has a solid financial position and unconditional credit lines
contracted with first-tier entities available for significant amounts.
Treasury investments considered to be “Cash and cash equivalents” are
highly liquid and involve no risks of changes in value, mature within three
months of their contract date and accrue interest at the market rates for such
instruments.
The undrawn credit lines also secure the refinancing of current financial debt
presented under "Non-current financial debt" in the accompanying Consolidated
Statement of Financial Position, which amounted to Euro 32 million at 30
September 2021 (Euro 33 million at 31 December 2020).
At 30 September 2021, ENDESA had negative working capital of Euro 3,253
million. The undrawn amount on its non-current lines of credit, together with
its current assets, provide sufficient coverage of the Company's current
payment obligations and provide assurance that ENDESA will be able to obtain
sufficient financial resources to continue to operate, and to realise its
assets and settle its liabilities for the amounts shown in the consolidated
statement of financial position.
6.3. Capital management.
In the period January-September 2021, ENDESA followed the same capital
management policy as that described in Note 14.1.12 to the Consolidated
Financial Statements for the year ended 31 December 2020.
Capital.
At 30 September 2021, ENDESA, S.A. had share capital of Euro 1,270,502,540.40,
represented by 1,058,752,117 shares with a par value of Euro 1.2 each, fully
subscribed and paid and all admitted for trading on the Spanish Stock
Exchanges.
At 30 September 2021, the ENEL Group, through ENEL Iberia, S.L.U., held 70.1%
of ENDESA, S.A.’s share capital.
At that date, no other shareholder held more than 10% of the share capital of
ENDESA, S.A.
Leverage.
The consolidated leverage level is defined as an indicator to monitor
financial position, whose details at 30 September 2021 and at 31 December 2020
are as follows:
Millions of Euros
Leverage % Var.
30 September 31 December
2021
2020
Net financial debt: 10,000 6,899 44.9
Non-current financial debt 6,187 5,937 4.2
Current financial debt 4,387 1,372 219.8
Cash and cash equivalents (568) (403) 40.9
Financial derivatives recognised in financial assets (6) (7) (14.3)
Equity: 7,005 7,465 (6.2)
Of the Parent 6,854 7,315 (6.3)
Of non-controlling interests 151 150 0.7
Leverage (%) ((1)) 142.76 92.42 N/A
(1) See the definition in Appendix I. Alternative Performance Measures (APMs)
of this Consolidated Management Report.
The Directors of ENDESA, S.A. consider that its leverage enables it to
optimise the cost of capital while maintaining a high solvency ratio.
At the date on which this Consolidated Management Report was approved, ENDESA,
S.A. had no commitments to obtain funds through its own sources of finance.
Financial indicators.
Financial indicators ((1)) 30 September 31 December
2021
2020
Liquidity ratio 0.81 0.73
Solvency ratio 0.88 0.91
Debt ratio( )(%) 58.81 48.03
Debt coverage ratio 2.44 1.82
Net financial debt( )/ Fixed assets( (2)) (%) 42.24 29.64
Net financial debt( )/ Funds from operations( (3)) 3.82 2.23
(Funds from operations( )+ interest expenses) / interest expenses( (4)) 22.83 28.83
(1) See definition in Appendix I Alternative Performance Measures (APMs) of
this Consolidated Management Report.
(2) Fixed Assets = Property, Plant and Equipment + Investment Property +
Intangible Assets + Goodwill.
(3) Annualised Funds from Operations.
(4) For the periods January-September 2021 and January-September 2020,
respectively
6.4. Management of credit ratings.
ENDESA's credit ratings are as follows:
Credit rating
30 September 2021 ((1)) 31 December 2020 ((1))
Non-current Current Outlook Date of last report Non-current Current Outlook
Standard & Poor’s BBB+ A-2 Stable 26 November 2020 BBB+ A-2 Stable
Moody’s Baa1 P-2 Stable 14 January 2021 Baa1 P-2 Stable
Fitch A- F2 Stable 30 April 2021 A- F2 Stable
(1) At the respective dates of approval of the Consolidated Management Report.
ENDESA's credit rating is influenced by the rating of its Parent ENEL,
according to the methods employed by rating agencies, and, on the date of
approval of this Consolidated Management Report, it has been classified as
“investment grade” by all the rating agencies.
ENDESA works to maintain its investment grade credit rating to be able to
efficiently access money markets and bank financing, and to obtain
preferential terms from its main suppliers.
6.5. Cash flows.
At 30 September 2021 and 31 December 2020, cash and cash equivalents were as
follows (see section 6.2. Financial management of this Consolidated Management
Report):
Millions of Euros
Cash and cash equivalents
30 September 31 December Difference % Var.
2021
2020
Cash in hand and at banks 568 403 165 40.9
Other cash equivalents - - - N/A
TOTAL 568 403 165 40.9
ENDESA's net cash flows in the first nine months of 2021 and 2020, classified
by activity (operating, investing and financing) were as follows:
Millions of Euros
Statement of cash flows
January - September January - September Difference % Var.
2021
2020
Net cash flows from operating activities 862 1,969 (1,107) (56.2)
Net cash flows from investing activities (1,670) (1,297) (373) 28.8
Net cash flows from financing activities 973 (625) 1,598 (255.7)
In the period January-September 2021, net cash flows from operating activities
(Euro 862 million) and from financing activities (Euro 973 million) enabled
net cash flows to be used in investing activities (Euro 1,670 million).
Net cash flows from operating activities.
In the period January-September 2021, net cash flows from operating activities
amounted to Euro +862 million (Euro +1,969 million in the first nine months of
2020), as follows:
Millions of Euros
January - September January - September Difference % Var.
2021
2020
Gross profit before tax and non-controlling interests 1,926 1,988 (62) (3.1)
Adjustments for: 722 897 (175) (19.5)
Depreciation and amortisation, and impairment losses 1,177 1,104 73 6.6
Other adjustments (net) (455) (207) (248) 119.8
Changes in working capital: (1,285) (530) (755) 142.5
Trade and other receivables (2,173) 104 (2,277) (2,189.4)
Inventories (392) (241) (151) 62.7
Current financial assets 14 (39) 53 (135.9)
Trade payables and other current liabilities( (1)) 1,266 (354) 1,620 (457.6)
Other cash flows from operating activities: (501) (386) (115) 29.8
Interest received 19 23 (4) (17.4)
Dividends received 30 22 8 36.4
Interest paid( (2)) (90) (84) (6) 7.1
Income tax paid (215) (164) (51) 31.1
Other receipts from and payments for operating activities( (3)) (245) (183) (62) 33.9
NET CASH FLOWS FROM OPERATING ACTIVITIES 862 1,969 (1,107) (56.2)
(1) In 2020, Euro 17 million were included corresponding to the Public
Responsibility Plan and to COVID-19-related procurement purchases (see section
4.2. COVID-19 Health Crisis of this Consolidated Management Report ).
(2) Includes interest paid on financial debt for rights of use amounting to
Euro 25 million in January-September 2021 and Euro 25 million in
January-September 2020.
(3) Corresponding to payments of provisions.
The variations in the different items determining the net cash flows from
operating activities include:
* Euros 237 million reduction in gross income before taxes and minority
interests, depreciation, amortization and other adjustments to income.
* Changes in working capital between the two periods amounting to Euro 755
million, mainly as a result of the decrease in trade payables of Euro 1,620
million, the negative performance of trade and other receivables (Euro 2,277
million) and increased payments for inventories (Euro 151 million), positive
changes in regulatory receivables of Euro 53 million (Euro +157 million for
the tariff deficit, Euro -209 million for compensation for generation cost
overruns in Non-mainland Territories (TNP) and Euro +105 million for the
remuneration of investment in renewable energies).
* The variation in income tax in both periods amounting to Euro 51 million.
In the period January-September 2021, ENDESA has also continued with its
active management policy for current assets and liabilities, focusing, among
other aspects, on the improvement of processes, the factoring of receivables
and agreements extending payment periods with suppliers.
At 30 September 2021, 31 December 2020 and 30 September 2020, working capital
comprised the following items:
Millions of Euros
Working capital
January - September 31 December 30 September
2021
2020
2020
Current Assets( (1)) 13,580 5,831 5,735
Inventories 1,121 1,077 917
Trade and other receivables 11,091 3,577 3,560
Current financial assets 1,368 1,177 1,258
Compensation for extra-costs of generation in Non-mainland Territories (TNP) 751 602 501
Collection rights for the financing of the deficit of regulated activities 190 277 458
Remuneration of distribution activity 196 246 221
Other 231 52 78
Current Liabilities ((2)) 13,014 7,183 5,986
Current provisions 496 477 399
Trade payables and other current liabilities 12,518 6,706 5,587
Dividend of the Parent - 741 -
Other 12,518 5,965 5,587
(1) Does not include “Cash and cash equivalents” or Asset financial
derivatives corresponding to financial debt.
(2) Does not include “Current financial debt” or Liability financial
derivatives corresponding to financial debt.
Net cash flows from investing activities.
In January-September 2021, net cash flows used in investing activities
amounted to Euro -1,670 million (Euro -1,297 million in the period
January-September 2020) and include, inter alia:
* Net cash flows used in the acquisition of property, plant and equipment and
intangible assets:
Millions of Euros
Sections January - September January - September
2021
2020
Acquisitions of property, plant and equipment and intangible assets (1,309) (1,234)
Acquisitions of property, plant and equipment( (1)) 6.6 (1,018) (833)
Acquisitions of intangible assets 6.6 (212) (137)
Facilities transferred from customers 71 29
Non-current asset suppliers (150) (243)
Proceeds from sale of property, plant and equipment and intangible assets 5 18
Grants and other deferred income 71 68
TOTAL (1,233) (1,148)
(1) In January-September 2021, additions for rights of use amounting to Euro
164 million are not included (Euro 141 million in January-September 2020).
* Net cash payments for investments and/or receipts from disposals of holdings
in Group companies:
Millions of Euros
Sections January - September January - September
2021
2020
Investments in Group companies (89) (17)
Companies acquired by ENEL Green Power España, S.L.U. (EGPE) 4.1 (89) ((1)) (14)
Suggestion Power, Unipessoal, Lda. - (3)
Disposals of investments in Group companies - 21
ENDESA Soluciones, S.L. 4.1 - 21
TOTAL (89) 4
(1) Includes payments corresponding to Parque Eólico Tico, S.L.U. acquired in
2020, and the companies Renovables La Pedrera, S.L.U. and Renovable
Mediavilla, S.L.U. acquired in 2019, for a total of Euros 15 million. These
amounts were pending payment at the acquisition date, dependent on compliance
with certain contractual clauses.
* Net cash payments used in acquisitions and/or disposals of other investments:
Millions of Euros
January - September January - September
2021
2020
Purchase of other investments (367) (199)
Remuneration of non-current distribution activity (158) (160)
Collateral deposits (161) -
Other financial assets (48) (39)
Proceeds from sale of other investments 19 46
Collateral deposits - 28
Other financial assets 19 18
TOTAL (348) (153)
Net cash flows from financing activities.
In the period January-September 2021, net cash flows from financing activities
amounted to Euro +973 million (Euro -625 million in the period
January-September 2020) and mainly include the following aspects:
* Cash flows from equity instruments:
Millions of Euros
January - September January - September
2021
2020
Funds contribution by San Francisco de Borja, S.A. - 3
Funds contribution by Bosa del Ebro, S.L. (3) -
Acquisition of non-controlling interest in Planta Eólica Europea, S.A.U. (1) -
Return of contribution of ENDESA Soluciones, S.L. 4 -
TOTAL - 3
* Drawdowns of non-current financial debt:
Millions of Euros
Sections January - September January - September
2021
2020
Drawdowns on bank loans CaixaBank, S.A., Bankia, S.A., Kutxabank, S.A., 6.2 350 300
Unicaja Banco S.A.U. y Cajasur Banco S.A.U.
Drawdowns on credit line with ENEL Finance International N.V. 6.2 - 500
Drawdowns on the green loan arranged with the European Investment Bank (EIB) - 35
Drawdowns on credit lines 32 7
Other 2 12
TOTAL 384 854
* Reimbursements of non-current financial debt:
Millions of Euros
January - September January - September
2021
2020
Repayment of ENEL Finance International N.V. credit line - (500)
Repayment of other credit lines - (41)
Other (5) (6)
TOTAL (5) (547)
* Amortisation and drawdowns of current financial debt:
Millions of Euros
Sections January - September January - September
2021
2020
Drawdowns
Issues of Euro Commercial Paper (ECP) 6.2 10,784 11,875
Collateral deposits 444 3
Other 17 31
Depreciation and amortisation
Amortisation of Euro Commercial Paper (ECP) 6.2 (8,247) (11,160)
Payments of right-of-use contracts (56) (49)
Amortisation of European Investment Bank (EIB) Green Loan (174) (40)
Other (33) (28)
TOTAL 2,735 632
* Dividends paid:
Millions of Euros
Sections January - September January - September
2021
2020
Dividends of the Parent paid 6.2 and 9.2 (2,132) (1,562)
Dividends paid to Non-controlling Interests ((1)) (9) (5)
TOTAL (2,141) (1,567)
(1) Corresponding to companies of ENEL Green Power España, S.L.U. (EGPE).
6.6. Investments.
In the period January-September 2021, ENDESA made gross investments of Euro
1,414 million. Of this amount, Euro 1,394 million related to Property, plant
and equipment and Intangible assets and the remaining Euro 20 million to
Financial investments, as follows:
Millions of Euros
Investments( (1))
January - September January - September % Var.
2021
2020
Generation and Supply 670 573 16.9
Non-mainland Territories generation (TNP) 40 54 (25.9)
Other generation and supply 630 519 21.4
Distribution 506 386 31.1
Structure and Others( (2)) 6 65 (90.8)
TOTAL PP&E( (3) (4)) 1,182 1,024 15.4
Generation and Supply 161 100 61.0
Non-mainland Territories generation (TNP) - - N/A
Other generation and supply 161 100 61.0
Distribution 31 19 63.2
Structure and Others( (2)) 20 18 11.1
TOTAL INTANGIBLE ASSETS( (4)) 212 137 54.7
FINANCIAL INVESTMENTS 20 12 66.7
TOTAL GROSS INVESTMENTS 1,414 1,173 20.5
Capital grants and transferred facilities (142) (97) 46.4
Generation and Supply (2) (5) (60.0)
Distribution (140) (92) 52.2
TOTAL NET INVESTMENTS ((5)) 1,272 1,076 18.2
(1) Does not include corporate acquisitions made during the period (see
section 4.1. Consolidation Scope of this Consolidated Management Report).
(2) Structure, services and adjustments.
(3) ) In the period January-September 2021, additions for rights of use
amounting to Euro 164 million were included (Euro 141 million in the period
January-September 2020).
(4) In the period January-September 2021, Euro 1,316 million were included,
94.4%, relating to investments in products, services and technologies low in
carbon (Euro 1,016 million, 87.5%, in the period January-September 2020).
(5) Net investments = Gross investments - Capital grants and transferred
facilities.
Property, plant and equipment investments.
In the period January-September 2021, gross investment in generation included
investments in the construction of electricity generation plants based on
renewable energy sources, amounting to Euro 292 million (Euro 267 million in
the period January-September 2020), and recognition of a right-of-use asset
corresponding to the land where some renewable energy generation facilities
are located, amounting to Euro 34 million.
Likewise, gross supply investments relate mainly to the recognition of a right
of use asset, corresponding to the charter contract for a methane tanker to
ship liquefied natural gas (LNG), amounting to Euro 126 million, and to the
performance of activities related to new products and services, amounting to
Euro 11 million (Euro 13 million in the period January-September 2020).
Gross investments in distribution related to grid extensions and expenditure
aimed at optimising the functioning of the grid for greater efficiency and
service quality.
Gross structural and other investments in the period January-September 2020
included the recognition of a right-of-use asset for Euros 58 million,
corresponding to the renewal of the lease contract for ENDESA's headquarters.
At 30 September 2021, the COVID-19 Health Crisis had not caused any
significant impact on the start-up dates of the projects in the investment
plan.
Intangible Assets.
Gross investments in intangible assets in the period January-September 2021
correspond to IT applications and ongoing investments in ICT activities in the
sum of Euro 111 million and to the capitalisation of incremental costs
incurred from the obtainment of contracts with customers for Euro 96 million
(Euro 72 million and Euro 60 million, respectively, in the period
January-September 2020).
Financial investments.
Gross investments in the period January-September 2021 include, primarily,
various financial loans.
7. Earnings by segment.
In carrying out its business activities, ENDESA’s organisation prioritises
its core business of electricity and gas generation, distribution, and sale as
well as related services. Therefore, the financial information analysed by the
Executive Committee of the Company Management for the purposes of taking its
decisions is the Segment information, which includes:
* Generation and Supply;
* Distribution;
* Structure, mainly including the balances and transactions of holding companies
of the investments or holdings, and of companies providing financing and
services; and
* Consolidation adjustments and eliminations, including the inter-segment
consolidation eliminations and adjustments.
The corporate organisation of ENDESA essentially matches these Segments.
Therefore, the allocation established in the Segment reporting presented below
is based on the financial information of the companies making up each Segment.
The following is a breakdown of the most significant figures in the
Consolidated Income Statement among ENDESA's businesses in the period
January-September 2021 and 2020:
Millions of Euros
January - September 2021
Generation and Supply Distribution Structure and Others( (1)) Total
Non-mainland Territories generation (TNP) Other Generation and Supply Adjustments Total
Revenue 1,398 16,120 (715) 16,803 1,930 (130) 18,603
Sales 1,394 11,219 (717) 11,896 1,748 (109) 13,535
Other operating income 4 4,901 2 4,907 182 (21) 5,068
Procurements and services (948) (13,780) 709 (14,019) (132) 76 (14,075)
Contribution Margin( (2)) 450 2,340 (6) 2,784 1,798 (54) 4,528
Self-constructed assets 2 75 - 77 92 13 182
Personnel expenses (60) (295) 1 (354) (193) (134) (681)
Other fixed operating expenses (105) (703) 5 (803) (265) 164 (904)
Gross operating income (EBITDA) ((2)) 287 1,417( (3)) - 1,704 1,432 (11) 3,125
Depreciation and amortisation, and impairment losses (78) (580) - (658) (471) (48) (1,177)
Operating Income (EBIT)( (2)) 209 837 - 1,046 961 (59) 1,948
Net financial profit/(loss)( (2)) (11) 26 - 15 (42) 15 (12)
Income before tax 198 850 - 1,048 921 (43) 1,926
Net income( (2)) 171 631 - 802 694 (37) 1,459
Net ordinary income( (2)) 171 631 - 802 694 (37) 1,459
(1) Structure, Services and Adjustments.
(2) See definition in Appendix I Alternative Performance Measures (APMs) of
this Consolidated Management Report.
(3) Includes the gross operating income (EBITDA) of ENEL Green Power España,
S.L.U. (EGPE) amounting to Euro 243 million.
Millions of Euros
January - September 2020
Generation and Supply Distribution Structure and Others( (1)) Total
Non-mainland Territories generation (TNP) Other Generation and Supply Adjustments Total
Revenue 1,156 10,412 (443) 11,125 1,971 (137) 12,959
Sales 1,151 9,931 (443) 10,639 1,789 (114) 12,314
Other operating income 5 481 - 486 182 (23) 645
Procurements and services (833) (8,130) 439 (8,524) (122) 84 (8,562)
Contribution Margin( (2)) 323 2,282 (4) 2,601 1,849 (53) 4,397
Self-constructed assets - 52 - 52 94 15 161
Personnel expenses (75) (290) - (365) (7) (144) (516)
Other fixed operating expenses (132) (648) 4 (776) (287) 157 (906)
Gross operating income (EBITDA) ((2)) 116 1,396( (3)) - 1,512 1,649 (25) 3,136
Depreciation and amortisation, and impairment losses (75) (524) - (599) (464) (41) (1,104)
Operating Income (EBIT)( (2)) 41 872 - 913 1,185 (66) 2,032
Net financial profit/(loss)( (2)) (14) (41) - (55) (32) 5 (82)
Income before tax 27 856 - 883 1,166 (61) 1,988
Net income( (2)) 33 640 - 673 888 (50) 1,511
Net ordinary income( (2)) 54 788 - 842 888 (30) 1,700
(1) Structure, Services and Adjustments.
(2) See definition in Appendix I Alternative Performance Measures (APMs) of
this Consolidated Management Report.
(3) Includes the gross operating income (EBITDA) of ENEL Green Power España,
S.L.U. (EGPE) amounting to Euro 133 million.
7.1. Generation and supply.
The main figures in the period January-September 2021 and their variations
with respect to the same period of the previous year are as follows:
Millions of Euros
Generation and supply
January - September January - September Difference % Var.
2021
2020
Contribution margin 2,784 2,601 183 7.0
Gross operating income (EBITDA) 1,704 1,512 192 12.7
Operating Income (EBIT) 1,046 913 133 14.6
Contribution margin.
In the period January-September 2021, the contribution margin totalled Euro
2,784 million, up Euro 183 million year-on-year (+7.0%%), due to the change in
commodity prices.
Gross operating income (EBITDA).
Gross Operating Income (EBITDA) amounted to Euro 1,704 million (+12.7%) in the
period January-September 2021. The following factors must be taken into
account when analysing the changes in the period January-September 2021:
* The 7.0% increase in the contribution margin.
* The implementation, in the period January-September 2020, of the "V ENDESA
Framework Collective Agreement", with a positive impact of Euro 215 million.
* The recording, in the period January-September 2020, of certain provisions for
workforce restructuring amounting to Euro 235 million.
* The updates of the provisions for current workforce restructuring plans for
Euro +4 million January-September 2021 (Euro +18 million in the period
January-September 2020).
Operating income (EBIT)
In the period January-September 2021, operating income (EBIT) was Euro 1.046
million, up Euro 133 million, mainly as a result of:
* The increase of 12.7% in Gross Operating Income (EBITDA).
* The increased amortisation and depreciation charge of Euro 39 million
includes, among other matters, the start-up of renewable energy generation
assets.
7.2. Distribution.
The main figures in the period January-September 2021 and the variations with
respect to the same period of the previous year are as follows:
Millions of Euros
Distribution
January - September January - September Difference % Var.
2021
2020
Contribution margin 1,798 1,849 (51) (2.8)
Gross operating income (EBITDA) 1,432 1,649 (217) (13.2)
Operating Income (EBIT) 961 1,185 (224) (18.9)
Contribution margin.
The contribution margin in the period January-September amounted to Euro 1,798
million, which represents a decrease of Euro 51 million (-2.8%) compared with
the same period in the previous year. This can mostly be attributed to the
reduction in regulated revenue from distribution activities, totalling Euro 47
million (-3.0%), basically owing to the new financial remuneration rate
applicable from 1 January 2021.
Gross operating income (EBITDA).
Gross operating income (EBITDA) amounted to Euro 1,432 million, (-13.2%) in
the period January-September 2021. The following factors must be taken into
account when analysing the changes in the period January-September 2021 with
respect to the same period of the previous year:
* The negative performance of the contribution margin (-2.8%).
* The implementation in the period January-September 2020 of the “V ENDESA
Framework Collective Bargaining Agreement”, generating a positive impact in
the Income Statement of Euro 269 million.
* The recording, in the period January-September 2020, of certain provisions for
workforce restructuring amounting to Euro 91 million.
* The updates of the provisions for current workforce restructuring plans
amounting to Euro +1 million in the period January-September 2021 (Euro +9
million in the period January-September 2020).
Operating income (EBIT)
Operating income (EBIT) in the period January-September 2021 dropped by Euro
224 million year on year (-18.9%), mainly as a result of the 13.2% decrease in
Gross operating income (EBITDA).
7.3. Structure and Others.
The main figures in the period January-September 2021 and their variations
with respect to the same period of the previous year are as follows:
Millions of Euros
Structure and others
January - September January - September Difference % Var.
2021
2020
Contribution margin (54) (53) (1) 1.9
Gross operating income (EBITDA) (11) (25) 14 (56.0)
Operating Income (EBIT) (59) (66) 7 (10.6)
Contribution margin.
The contribution margin in the period January-September 2021 stood at Euro -54
million, in line with the same period of 2020.
Gross operating income (EBITDA).
Gross operating income (EBITDA) in the period January-September 2021 was
improved by Euro 14 million compared with the same period of the previous
year, mainly as a result of:
* The implementation, in the period January-September 2020, of the "V ENDESA
Framework Collective Agreement", generating a positive impact of Euro 31
million.
* The recording, in the period January-September 2020, of certain provisions for
workforce restructuring amounting to Euro 46 million.
* The updates of the provisions for current workforce restructuring for Euro -5
million in the period January-September 2021 (Euro +20 million in the period
January-September 2020).
* The recognition in the period January-September 2020 of a cost of Euro 17
million corresponding to the Public Responsibility Plan for the COVID-19
Health Crisis (see section 4.2. COVID-19 Health Crisis of this Consolidated
Management Report).
Operating income (EBIT)
Operating Income (EBIT) in the period January-September 2021 increased by Euro
7 million compared with the same period of the previous year, mainly as a
result of the changes in Gross operating income (EBITDA).
8. Regulatory Framework.
From a regulatory perspective, the main novelties during the period
January-September 2021 were as follows:
2021 electricity tariff
On 29 December 2020, Order TEC/1271/2020, of 22 December 2020, was published
in the Official State Gazette, establishing various costs for the electricity
system for 2021, and extending electricity access tariffs until the entry into
force of the tariffs set by the Spanish Markets and Competition Commission
(“CNMC”).
On 23 March 2021, the Resolution of 18 March 2021 of the Spanish Markets and
Competition Commission (“CNMC”) was published in the Official State
Gazette, approving the prices of the access tariffs for energy transmission
and distribution networks applicable from 1 June 2021.
Lastly, on 15 September 2021, Royal Decree Law 17/2021, of 14 September 2021,
was published, reducing electricity charges by around 96% since it was
implemented until 31 December 2021.
Natural gas tariff for 2021.
Spanish Markets and Competition Commission (“CNMC”) Circular 6/2020, of 22
July 2020, approved the methodology for the calculation of transmission
tariffs, local networks and natural gas regasification and, among other
aspects, established that the “CNMC” must set the values of the access
tariffs for regasification facilities and, where appropriate, the billing
terms of the conduction terminal of the transmission and distribution tariffs,
applicable from 1 October 2020.
On 29 December 2020, the Official State Gazette published the Resolution of 21
December of the Directorate-General for Energy Policy and Mines, establishing
the Last Resort Tariff (LRT) for natural gas to be applied from 1 January
2021, resulting in an average increase of 4.6% and 6.3%, depending on whether
Last Resort Tariff 1 (LRT1) or Last Resort Tariff 2 (LRT2) was applied, due to
the increase in the cost of the raw material. These values remained valid
during the whole of the first semester of 2021, since they did not meet the
necessary condition that the cost of the raw material varies by less than +/-
2% to be updated.
On 30 June 2021, the Official State Gazette published the Resolution of 24
June 2021 of the Directorate-General for Energy Policy and Mines, establishing
the Last Resort Tariff (LRT) for natural gas to be applied from 1 July 2021,
resulting in an increase of 2.9% and 3.9%, depending on whether Last Resort
Tariff 1 (LRT1) or Last Resort Tariff 2 (LRT2) was applied, due to the
increase in the cost of the raw material.
Likewise, on 29 September 2021, the Resolution of 26 September 2021, of the
Directorate-General for Energy Policy and Mines was published, which
establishes the Natural Gas Last Resort Tariff (LRT) to be applied from 1
October 2021 which, pursuant to Royal Decree Law 17/2021, of 14 September
2021, results in an increase of 0.9%, 4.6% and 11.2%, depending on whether the
Last Resort Tariff 1 (LRT1), Last Resort Tariff 2 (LRT2) or Last Resort Tariff
3 (LRT3) applies, respectively.
Energy efficiency.
On 25 March 2021, Order TED/275/2021, of 18 March 2021, establishing the
contribution to the Energy Efficiency National Fund for 2021, was published in
the Official State Gazette (“BOE”), with the percentage applicable to
ENDESA amounting to Euro 27.7 million.
Social Bonus.
On October 18, 2021, Order TED/1124/2021, dated 8 October 2021, was published
in the Official State Gazette (“BOE”), which establishes the distribution
of financing for the 2021 Social Bonus, with the proposed percentage for
ENDESA, S.A. being 34.72%.
Strategic Energy and Climate Framework.
On 31 March 2021, the joint Resolution of the Directorate-General for Energy
Policy and Mines and the Spanish Climate Change Office, of 25 March 2021, was
published in the Official State Gazette (“BOE”), setting forth the
Agreement of the Council of Ministers of 16 March 2021, adopting the final
version of the National Integrated Energy and Climate Plan (“PNIEC”)
2021-2030, once the consultations and preliminary proceedings had been
completed and approved by the European Commission.
Likewise, on 21 May 2021, Law 7/2021, of 20 May 2021, on Climate Change and
the Energy Transition, was published in the Official State Gazette
(“BOE”), after completing its passage through parliament.
Plan for the Recovery, Transformation and Resilience of the Economy.
On 7 October 2020, the Government presented the Plan for the Recovery,
Transformation and Resilience of the Economy to respond to the challenges of
the next decade, focusing on four transformations needed to modernise and
boost Spain's economy: ecological transition, digital transformation, gender
equality and social and territorial cohesion.
The Plan for the Recovery, Transformation and Resilience of the Economy will
involve a significant volume of public and private investment in the coming
years, which will be financed with funds from the European Union Recovery Plan
("Next Generation EU"), enabling Spain to obtain up to Euro 140 billion, of
which Euro 69.5 billion will be non-refundable and the rest loans. In order to
expedite the timetable to implement this Plan, the Government included Euro 27
billion as an advance on these funds pursuant to Law 11/2020, of 30 December,
on the General State Budgets for 2021.
On 27 April 2021, the Council of Ministers approved the final wording of the
aforementioned Plan, which was ultimately approved by the European Council on
13 July 2021. Approval by the European Council will enable the release of Euro
9 billion to Spain as pre-financing, representing 13% of the total assigned to
it.
Likewise, on 30 September 2021, Order HFP/1030/2021, of 29 September 2021, was
published in the Official State Gazette (“BOE”) to set up the system to
manage the Recovery, Transformation and Resilience Plan, which includes the
necessary guidelines to guarantee the coordinated compliance with the
execution of the Plan, as well as Order HFP/1031/2021, of September 29 2021,
which establishes the procedure and format of the information to be provided
by the State, Autonomous and Local Public Sector Entities for monitoring
compliance with milestones and objectives and budgetary and accounting
execution of the measures of the components of the Recovery, Transformation
and Resilience Plan.
Royal Decree 148/2021, of 9 March 2021, establishing the methodology to
calculate electricity system charges.
On 18 March 2021, Royal Decree 148/2021, of 9 March 2021, was published in the
Official State Gazette (“BOE”), establishing the methodology to calculate
electricity system charges.
This Royal Decree complements the electricity transmission and distribution
tariffs, which are set by the Spanish Markets and Competition Commission
(“CNMC”).
The methodology approved is for joint application with the new transmission
and distribution tariffs of the Spanish Markets and Competition Commission
(“CNMC”) after 1 June 2021.
In this regard, on 22 April 2021, Order TED/371/2021, of 19 April 2021,
approving the electricity system charges that will apply from 1 June 2021, was
published in the Official State Gazette.
Energy Storage Strategy.
On 9 February 2021, the Council of Ministers approved the Energy Storage
Strategy, an element considered to be crucial for the transition to an
emissions-neutral economy and the effective integration of renewable energies
into the electricity system.
The Energy Storage Strategy quantifies storage needs in line with those
envisaged in the National Integrated Energy and Climate Plan (“PNIEC")
2021-2030 and the target for climate neutrality before 2050, from the 8.3 GW
currently available to around 20 GW in 2030 and 30 GW in 2050. Furthermore,
all the technologies forming energy storage are classified according to the
applicable method and system, the actions for their effective deployment are
identified, together with the regulatory challenges for the participation of
storage in electricity markets, taking into account the market access
procedures and their role in the price structure and signals. In addition, the
economic challenges they represent are analysed, in conjunction with the need
for industrial policies that encourage their financing.
Draft law on the remuneration of CO(2) not emitted.
On 1 June 2021, the Council of Ministers began to process a Draft Law on the
remuneration of CO(2) not emitted on the electricity market. After completing
the preliminary consultation phase, on 3 August 2021, the Council of Ministers
agreed its approval as a Draft Law, which was submitted to the Congress of
Deputies to be processed, currently under way.
This draft law establishes a reduction of remuneration for mainland production
facilities that do not emit greenhouse gases that were in operation before 25
October 2003, in proportion to the higher revenue obtained by adding the value
of the CO(2 )emission rights that exceed €20.67/tCO(2) for marginal emission
technologies to the wholesale market price. This excludes plants equal to or
below 10 MW, whenever they came on-stream, and those with a remuneration
regime regulated under article 14 of Law 24/2013, of 26 December 2013, on the
Electricity Sector.
The funds collected will be used to finance capacity mechanisms and the
remaining rate charges (mainly renewable energies and timing mismatches),
except for 10% which will be used, with respect to the public administrations,
to jointly finance the cost of supplying highly vulnerable customers at risk
of social exclusion.
Royal Decree Law 12/2021, of 24 June 2021, adopting urgent measures on energy
taxation.
On 25 June 2021, Royal Decree Law 12/2021, of 24 June 2021, was published in
the Official State Gazette, establishing urgent tax measures to mitigate the
effects of the increase in electricity prices for consumers. This Royal Decree
Law includes the following measures:
* Reduction of value added tax (VAT) from 21% to 10%, until 31 December 2021,
for contracted electricity supplies of equal to or less than 10 kW, provided
that the arithmetic average price in the daily market over the last calendar
month before the month of the last day of the billing period exceeds Euro
45/MWh, and the customers are recipients of the Social Bonus that are highly
vulnerable or at risk of social exclusion
* Temporary suspension of the tax on the value of electricity production during
the third quarter of 2021, which was extended until 31 December 2021 by Royal
Decree Law 17/2021, of 14 September 2021.
The Royal Decree Law also establishes that if there is a surplus of revenue in
the electricity sector in 2020, this will be applied in full to cover the
timing mismatches in 2021.
Proposed market capacity Order.
The Ministry of Ecological Transition and Demographic Challenge (“MITECO”)
has initiated the processing of a proposed order creating a capacity market in
the mainland electricity system. This proposal is based on an auction system
(“pay as bid”), which would be used to contract the final capacity (MW)
requirements detected in the demand coverage analyses performed by the System
Operator, Red Eléctrica de España, S.A.U. (REE).
The auction system is open to existing and new generating, storage and demand
management facilities, setting down certain requirements for the maximum
emissions of CO(2) emission rights for the participating facilities.
The draft Order regulates aspects related to the various types of auctions
planned, the rights and obligations of capacity service providers, including
their remuneration regime or penalty system in the event of non-compliance by
the providers.
Proposed Royal Decree on closed electricity distribution grids.
On 11 June 2021 the Ministry of Ecological Transition and Demographic
Challenge (“MITECO”), implementing the provisions of Royal Decree-Law
20/2018, of 7 December 2018, began to process a Royal Decree regulating the
specific conditions and requirements of closed electricity distribution grids
and their owners, and the administrative authorisation procedure and
circumstances for their revocation.
Renewable energy auctions.
Based on Order TED/1161/2020, of 4 December 2020, regulating the first auction
mechanism for the granting of the economic renewable energy regime and
establishing the indicative timetable for the 2020-2025 period, on 9 September
2021, the Resolution of 8 September 2021, of the Secretary of State for Energy
was published in the Official State Gazette (“BOE”), convening the second
auction for the granting of the renewable energy economic regime under the
above-mentioned Order. This auction envisages an allocation of 3,300 MW and it
was held on 19 October 2021, a total of 3,124 MW have been awarded.
Royal Decree Law 16/2021, of 3 August 2021, adopting social protection
measures to address situations of social and economic vulnerability.
On 4 August 2021, Royal Decree-Law 16/2021 of 3 August 2021, was published in
the Official State Gazette (“BOE”), setting forth social protection
measures to address situations of social and economic vulnerability. Among
other matters, in the area of energy, the prohibition on the suspension of the
supply of electricity, water and natural gas and access to the Social Bonus by
certain groups in a situation of economic vulnerability, resulting from the
health crisis, was extended until 31 October 2021. These measures have been
extended until 28 February 2022 with the publication on 27 October 2021 in the
Official State Gazette (“BOE”) of Royal Decree Law 21/2021, of 26 October
2021, extending social protection measures to address situations of social and
economic vulnerability.
Urgent measures to mitigate the impact of the escalation of natural gas prices
in gas and electricity retail markets, consumer protection and introduction of
transparency in the wholesale and retail electricity and natural gas markets.
On 15 September 2021, Royal Decree Law 17/2021, of 14 September 2021, was
published in the Official State Gazette (“BOE”), establishing urgent
measures to mitigate the impact of the escalation of natural gas prices on gas
and electricity retail markets, which has been validated by the Congress of
Deputies on 14 October 2021. Additionally, this provision has been
complemented with the publication on 27 October 2021 of Royal Decree Law
23/2021, dated 26 October 2021, on urgent energy measures for the protection
of consumers and the introduction of transparency in the wholesale and retail
electricity and natural gas markets. Likewise, on the same date, Royal Decree
Law 21/2021, dated 26 October 2021, extending social protection measures to
address situations of social and economic vulnerability, was published.
The main aspects deriving from these provisions are as follows:
* Since it entered into force, on 16 September 2021, and until 31 March 2022, a
payment obligation was established for the non-emitting generation facilities
in a proportional amount to the supposed increased earnings obtained as a
result of the inclusion in wholesale electricity prices of the value of
natural gas prices. This excludes plants with a remuneration regime regulated
under article 14 of Electricity Sector Law 24/2013, of 26 December 2013, and
those with power of 10 MW or less. The amount resulting from this revenue
reduction will be earmarked to reduce the System charges. Likewise, the scope
of the payment obligation will not apply to the energy covered by fixed price
and term contracts prior to Royal Decree Law 17/2021, nor to the energy
covered by new fixed price contracts with coverage for a period equal to or
greater than one year. In the event that in these forward contracting
instruments part of the energy is partially indexed to the market price, only
the proportional non-indexed part will be excluded. Producers will submit
monthly a responsible statement and supporting documentation of the energy
covered by forward instruments. In addition, it is established that producers
and marketers must periodically inform the National Markets and Competition
Commission (“CNMC”) of the forward contracting instruments, both physical
and financial, between companies of the same business group or with third
parties.
* Market mechanisms are established to encourage long-term contracts, through
long-term power purchase contract auctions, to which up to a maximum of 25% of
the lowest value in 10 years of manageable inframarginal non-emitting
production is linked that does not have specific remuneration nor is the
successful bidder at renewable energy auctions. Sellers will be those
electricity producers that are deemed to be dominant operators in electricity
generation. And buyers may be suppliers (except those of the groups that are
leading electricity operators) and direct consumers, together with benchmark
suppliers in the terms set by the resolution of the announcement. In
accordance with market circumstances, the first auction will be held before 31
December 2021.
* A minimum vital supply is established for vulnerable consumers, that are in
default four months after the first payment request, establishing limited
power by law that guarantees minimum comfort, which cannot be exceeded during
the period of six months in which the supply cannot be cut off.
* The minimum amount of aid to the beneficiaries of the thermal social voucher
is increased from 25 to 35 euros, with immediate application, and also, the
budget allocated for the same in 2021 is increased by Euro 100 million, up to
a total of Euro 202.5 million.
* The discounts of the electricity social bonus until 31 March 2022 are
increased from 25% to 60% for the vulnerable consumer, and from 40% to 70% for
the severe vulnerable consumer.
* Suppliers will have to inform customers of any intention to modify the
contract one month in advance, including a price comparison and an estimate of
the annual cost, before and after such modification. They must also publish
and send to the National Markets and Competition Commission (“CNMC”)
transparent, comparable and updated information on the prices of the available
offers at all times, including the conditions on contract termination and
additional services required by the contract.
* Tax and budgetary measures are established, specifically to extend the
temporary suspension of the tax on the price of electricity production and the
reduction of the excise tax on electricity from 5.1% to 0.5% to 31 December
2021, and the increase by Euro 900 million, up to a maximum of Euro 2,000
million, of the revenues to be earmarked in 2021 to the electricity system in
relation to the CO(2) emission rights auctions.
* In the area of natural gas, it is limited to the effect of the Last Resort
Tariff (LRT) of the increased cost of the raw material, which will be passed
on in a deferred manner.
* Lastly, the Water Law was amended to avoid sudden withdrawals of reservoirs
over 50 hm(3), hence a minimum and maximum system of monthly withdrawals and a
monthly reserve system were established.
Preliminary public consultation to modify the Small Consumer Voluntary Price
(SCVP)
On 1 October 2021, the Ministry of Ecological Transition and Demographic
Challenge launched a preliminary public consultation to analyse the amendment
of the Small Consumer Voluntary Price (SCVP) regulations, and to collect
proposals that enable their volatility to be reduced and their design to be
optimised with a view to the energy transition process.
Measures to promote residential refurbishment activities
Within the framework of the Recovery, Transformation and Resilience Plan, on 6
October 2021, Royal Decree Law 19/2021, of 5 October, was published in the
Official State Gazette (“BOE”), establishing urgent measures to boost
building refurbishment activities. This Royal Decree Law establishes, among
other aspects, new personal income tax credits, which will be applied to the
amounts invested in refurbishment works that contribute to improve the energy
efficiency of the main home and at residential buildings, accredited though
the energy efficiency certificate and, furthermore, it establishes the
creation of a guarantee facility by the Official Credit Institute (“ICO”)
to partially cover the financing of refurbishment works that contribute to
improve energy efficiency.
Likewise, on 6 October 2021, Royal Decree Law 853/2021, of 5 October 2021, was
published in the Official State Gazette (“BOE”), regulating aid programmes
in the area of residential refurbishment and social housing within the
Recovery, Transformation and Resilience Plan. This Royal Decree, among other
aspects, regulates six aid programmes: from one to five, linked to
refurbishment and improved energy efficiency at homes, and six, to the
promotion of the building of subsidised housing. The programmes will be
organised through the direct transfer of funds to the Autonomous Communities
and the Cities of Ceuta and Melilla, and these will apply through the
announcement of aid in their respective territorial areas.
9. Other Information.
9.1. Stock market information.
The changes in the share price of ENDESA, S.A. and the major benchmark indexes
in the periods January-September 2021 and 2020 were as follows:
Percentage (%)
Share price performance ((1)) January - September January - September
2021 2020
ENDESA, S.A. (22.1) (4.0)
Ibex-35 9.0 (29.7)
Euro Stoxx 50 13.9 (14.7)
Euro Stoxx Utilities (8.0) (0.3)
(1) Source: Madrid Stock Exchange.
Stock market information 30 September 2021 31 December 2020 % Var.
Market capitalisation ((1)) Millions of Euros 18,443 23,663 (22.1)
Number of shares outstanding 1,058,752,117 1,058,752,117 -
Nominal share value Euros 1.2 1.2 -
Cash ((2)) Millions of Euros 6,546 9,696 (32.5)
Continuous market Shares
Trading volume( (3)) 305,414,789 430,957,400 (29.1)
Average daily trading volume( (4)) 1,590,702 1,676,877 (5.1)
Price to Earnings Ratio (P.E.R.) Ordinary( (1)) 9.81 11.10 -
Price to earnings ratio (PER)( (1)) 9.81 16.97 -
Price / Book value ((1)) 2.69 3.23 -
(1) See definition in Appendix I, Alternative Performance Measures (APMs) of
this Consolidated Management Report.
(2) Cash = Sum of all the transactions performed on the shares during the
reference period (Source: Madrid Stock Exchange).
(3) Trading Volume = Total volume of ENDESA, S.A. securities traded in the
period (Source: Madrid Stock Exchange).
(4) Average Daily Trading Volume = Arithmetic mean of stock in ENDESA, S.A.
traded per session during the period (Source: Madrid Stock Exchange).
Euros
ENDESA share price ((1)) January - September 2021 January - September 2020 % Var.
Maximum 23.650 26.120 (9.5)
Minimum 17.420 15.500 12.4
Period average 21.438 22.402 (4.3)
Period close 17.420 22.830 (23.7)
(1) Source: Madrid Stock Exchange.
The main global stock markets managed to maintain the accumulated earnings at
the end of the first nine months of the year, encouraged by the improved
macroeconomic prospects following the pandemic, and despite the threat of
adjustment caused by increased global inflation as a result of the significant
rise reported to date by raw materials.
Against this optimistic backdrop, Spain's IBEX-35 index ended the third
quarter of the year 2021 with a cumulative rise of 9%, at 8,796.3 points, with
9 of its 35 securities on negative ground. Noteworthy among these securities
with negative returns were the shares of the electricity sector, highly
pressured by the regulatory uncertainty caused by the approval by the
Government of a package of measures to attempt to contain the rising
electricity prices in the country, with a direct negative impact on the sector
(see section 8. Regulatory Framework of this Consolidated Management Report).
ENDESA shares are among the most penalised, and ended September with a
cumulative fall of 22.1% at Euro 17.42 per share, the minimum listing of the
year, far from the annual maximum of Euro 23.65 per share marked on 28 May
2021.
Part of this negative stock market return could be offset by the dividend
yield of 9.01% received by the shareholders once the final dividend had been
paid with a charge to 2020 earnings, in 1 July 2021 (Euro 1,3136 gross per
share); hence, a total of Euro 2,0136 gross per share was paid by ENDESA in
the year. Taking this into account, total cumulative shareholder return by
ENDESA's shareholder at the end of September, calculated as the sum of the
stock market return and dividend yield, was -13.05%.
At 30 September 2021, market capitalisation stood at Euro 18,443 million.
9.2. Dividends.
The Board of Directors of ENDESA, S.A. operates an economic-financial strategy
to generate a significant amount of cash to maintain Company debt levels and
maximise shareholder remuneration. This also achieves the objective of
ensuring the sustainability of the business project undertaken.
As a result of this economic-financial strategy, at a meeting on 25 November
2020 the Board of Directors of ENDESA, S.A. approved the following shareholder
remuneration policy for 2020-2023, unless any exceptional circumstances arise,
which will be duly reported:
* For 2020, the ordinary dividend per share to be distributed in respect of
these years will be equivalent to 100% of net ordinary income attributable to
the Parent as per the Consolidated Financial Statements of the Group headed by
the Company.
* For 2021, the Board of Directors will ensure that the ordinary dividend per
share that is agreed to be distributed for the year is equal to 80% of the net
ordinary income attributable to the Parent as per the Group's Consolidated
Financial Statements.
* For the 2022 and 2023 financial years, the Board of Directors of ENDESA, S.A.
will ensure that the ordinary dividend per share that is agreed to be
distributed for the year is equal to 70% of the net ordinary income
attributable to the Parent as per the Group's Consolidated Financial
Statements.
The intention of the Board of Directors is that the ordinary dividend should
be paid solely in cash in two instalments (January and July) on a given date
to be determined in each case, which will be duly notified.
Without prejudice to the foregoing, ENDESA's capacity to pay out dividends to
its shareholders depends on numerous factors, including the generation of
profit and the availability of unrestricted reserves. Therefore, no assurance
can be given that dividends will be paid out in future years or as to the
amount of such dividends, if paid.
Approval was given at ENDESA, S.A.'s General Shareholders' Meeting of 30 April
2021 to pay shareholders a total dividend charged against 2020 profit for a
gross amount of Euro 2,0136 per share (Euro 2,132 million in total).
The breakdown of these dividends is as follows:
Sections Approval date Euros per share, gross Amount Payment date
(Millions of Euros)
Interim dividend 25 November 2020 0.700 741 4 January 2021
Final dividend 30 April 2021 1.3136 1,391 1 July 2021
Total dividend paid against 2020 profit 6.5 2.0136 2,132
In accordance with the foregoing, details of ENDESA, S.A.'s dividends per
share in 2020 and 2019 are as follows:
2020 2019 % Var.
Share capital Millions of Euros 1,270.5 1,270.5 -
Number of shares 1,058,752,117 1,058,752,117 -
Consolidated net ordinary income Millions of Euros 2,132 1,562 36.5
Consolidated net income Millions of Euros 1,394 171 715.2
Individual net income Millions of Euros 2,330 1,642 41.9
Net ordinary earnings per share ((1)) Euros 2.0136 1.475 36.5
Net earnings per share( (1)) Euros 1.317 0.162 715.2
Gross dividend per share Euros 2.0136 ((2)) 1.475 ((3)) -
Consolidated ordinary pay-out( (1)) % 100.0 100.0 -
Consolidated pay-out ((1)) % 152.9 913.3 -
Individual pay-out ((1)) % 91.5 95.1 -
(1) See definition in Appendix I - Alternative Performance Measures (APMs) of
this Consolidated Management Report.
(2) Interim dividend equal to Euro 0.7 gross per share paid on 4 January 2021
plus the final dividend equal to Euro 1.3136 gross per share paid on 1 July
2021.
(3) Interim dividend of Euro 0.7 gross per share, paid out on 2 January 2020,
plus the final dividend of Euro 0.775 gross per share paid out on 1 July 2020.
9.3. Main risks and uncertainties.
In the period January-September 2021, ENDESA followed the same risk management
policy described in its Consolidated Financial Statements for the year ended
31 December 2020.
In this context, the classification and measurement of financial instruments
and the hedge transactions are the same as those described in these
Consolidated Financial Statements.
The information regarding the main risks and uncertainties associated with
ENDESA's activity is described in section 7 of the Consolidated Management
Report for the year ended 31 December 2020.
APPENDIX I
Alternative Performance Measures (APMs)
Alternative Performance Measures (APMs) Unit Definition Reconciliation of alternative performance measures (APMs) Relevance of use
January - September 2021 January - September 2020
Gross Operating Income (EBITDA) €M Income - Procurements and services + Work carried out by the Group for its €3,125 M = €18,603 M - €14,075 M + €182 M - €681 M - €904 M €3,136 M = €12,959 M - €8,562 M + €161 M - €516 M - €906 M Measure of operating return excluding interest, taxes, provisions and
assets - Personnel expenses - Other fixed operating expenses. depreciation and amortisation.
Operating income (EBIT) €M EBITDA - Depreciation and amortisation, and impairment losses. €1,948 M = €3,125 M - €1,177 M €2,032 M = €3,136 M - €1,104 M Measure of operating return excluding interest and taxes
Net ordinary income €M Net ordinary income = Net income of the Parent - Net gain/(loss) on disposal €1,459 M = €1,459 M - €0 M + €1,700 M = €1,511 M - €0 M + €14 M - €160 M - €15 M Measure of profit for the period isolating non-recurring effects of more than
of non-financial assets (greater than Euro 10 million) - Net impairment losses
Euro 10 million.
on non-financial assets (greater than Euro 10 million) - Initial net expenses €0 M - €0 M - €0 M
of personnel under workforce restructuring plans relating to the
Decarbonisation Plan and the digitalisation of processes - Net expenses
corresponding to the Public Responsibility Plan for the COVID-19 Health
Crisis.
Contribution margin €M Income - Procurements and services €4,528 M = €18,603 M - €14,075 M €4,397 M = €12,959 M - €8,562 M Measure of operating profitability taking into account direct variable
production costs
Procurements and services €M Power purchases + Fuel consumption + Transmission expenses + Other variable €14,075 M = €3,844 M + €1,019 M + €3,665 M + €5,547 M €8,562 M = €2,681 M + €853 M + €3,736 M + €1,292 M Goods and services for production
procurements and services
Net financial profit/(loss) €M Financial income - Financial expense + Net exchange differences €(12) M = €114 M - €122 M - €4 M €(82) M = €24 M - €114 M + €8 M Measure of financial cost
Net financial expense €M Financial income - Financial expense €(8) M = €114 M - €122 M €(90) M = €24 M - €114 M Measure of financial cost
Net investments €M Gross investments - transferred facilities and capital grants €1,272 M = €1,414 M - €142 M €1,076 M = €1,173 M - €97 M Measure of investment activity
Ordinary return on equity % Net ordinary income of the Parent / ((Equity of the Parent (n) + Equity of the 26.54% = (((1,459 - 195) * 12 months / 9 months) €M + €195 M) ((1)) / 27.77% = (((1,700 - 107) * 12 months / 9 months) €M + €107 M) / ((€8,380 Measure of the capacity to generate profits on shareholder investments
Parent (n-1)) / 2)) ((€6,854 M + €7,315 M) / 2) M + €7,688 M) / 2)
Ordinary return on assets % Net ordinary income of the Parent / ((Total assets (n) + Total assets (n-1)) / 5.10% = (((1,459 M - 195) * 12 months / 9 months) €M + €195 M) ((1)) / 7.01% = (((1,700 - 107) * 12 months / 9 months) €M + €107 M) / ((€31,661 Measure of business profitability
2) ((€41,647 M + €32,062 M / 2) M + €31,981 M) / 2)
Economic profitability % EBIT / ((PP&E (n) + PP&E (n-1)) / 2) 11.79% = (((1,948 – 188) * 12 months / 9 months) €M + €188 M) ((2) )/ 12.49% = (((2,032 - 143) * 12 months / 9 months) €M + €143 M) / Measure of the capacity to generate income from invested assets or capital
(€21,634 M + €21,354 M) / 2) €((21,286 M + 21,329 M) / 2)
Return on capital employed (ROCE) % Operating profit after tax / ((Non-current assets (n) + Non-current assets 5.23%= (((1,481.7 – 141) * 12 months / 9 months) €M + €141 M) ((3) )/ 6.38% = (((1,548.5 - 107) * 12 months / 9 months) €M + €107 M) / ((25,656 Measure of return on capital employed
(n-1) / 2) + (Current assets (n) + Current assets (n-1) / 2)) ((27,499 + 25,828) / 2 + (14,148+ 6,234) / 2)) €M + 25,881) / 2 + (6,005 + 6,100) / 2)) €M
Return on invested capital (ROIC) % Operating income after taxes / (Net equity of the Parent + Net financial debt) 11.44% = (((1,481.7 – 141) * 12 months / 9 months) €M + €141 M) ((3) )/ 12.85% = (((1,548.5 - 107) * 12 months / 9 months) €M + €107 M) / Measure of return on capital invested
(€6,854 M +€10,000 M) (€8,380 M + €7,407 M)
Funds from operations €M Cash flows from operating activities + Changes in working capital - Work €1,965 M = €862 M + €1,285 M – €182 M €2,338 M = €1,969 M + €530 M - €161 M Measure of cash generated by the company’s business available to make
carried out by the group for its assets investments, amortise debt and distribute dividends to shareholders
Interest expenses €M Interest paid €90 M €84 M Measure of interest payments
Net ordinary earnings per share € Net ordinary income of the Parent / Number of shares at the end of the period €1.378 = €1,459 M / 1,058,752,117 shares €1.606 = €1,700 M / 1,058,752,117 shares Measure of the portion of net income corresponding to each share at the end of
the year.
Net earnings per share € Net ordinary income of the Parent / Number of shares at the end of the period €1.378 = €1,459 M / 1,058,752,117 shares €1.427 = €1,511 M / 1,058,752,117 shares Measure of the portion of net income corresponding to each share at the end of
the year
Cash flow per share € Net cash flow from operating activities / Number of shares at the end of the €0.814 = €862 M / 1,058,752,117 shares €1.860 = €1,969 M / 1,058,752,117 shares Measure of the portion of funds generated corresponding to each share at the
period end of the year.
M€ = millions of euros; € = euros.
n = 30 September of the year being calculated.
n-1 = 31 December of the year before the year being calculated.
1. Annualised income, discounting the effects, net of the tax effect, amounting
to Euro 195 million, described in section 5.2. Earnings Analysis of this
Consolidated Management Report).
2. Annualised income, discounting the effects, amounting to Euro 188 million,
described in section 5.2.1. Revenue of this Consolidated Management Report.
3. Annualised income, discounting the effects, net of the tax effect, amounting
to Euro 141 million, described in section 5.2.1. Revenue of this Consolidated
Management Report.
Alternative Performance Measures (APMs) Unit Definition Reconciliation of alternative performance measures (APMs) Relevance of use
30 September 2021 31 December 2020
Net financial debt €M Non-current financial debt + Current financial debt – Cash and cash €10,000 M = €6,187 M + €4,387 M - €568 M €6,899 M = €5,937 M + €1,372 M - €403 M Current and non-current financial debt, less cash and financial investments
equivalents – Financial derivatives recognised under financial assets
- €6 M
- €7 M equivalent to cash
Sustainable financing % Sustainable gross financial debt / Gross financial debt 57% = €6,030 M / €10,574 M 45% = €3,264 M / €7,309 M Measure of the weight of gross financial debt with sustainability clauses as a
share of total gross financial debt
Leverage % Net financial debt / Equity 142.76% = €10,000 M 92.42% = €6,899 M Measure of the weight of external funds in the financing of business
/ €7,005 M
/ €7,465 M activities
Debt ratio % Net financial debt / (Equity + Net financial debt) 58.81% = €10,000 M / 48.03% = €6,899 M / Measure of the weight of external funds in the financing of business
activities
(€7,005 M + €10,000 M) (€7,465 M + €6,899 M)
Average life of gross financial debt Number of years (Principal * Number of days validity) / (Principal outstanding at the end of 4.2 years = 44,483 / 10,546 4.6 years = 33,484 / 7,268 Measure of the duration of financial debt to maturity
the period * Number of days in the period)
Average gross financial debt €M (Total Drawdowns or Debt Positions * Number of Days in force of each Provision €8,911 M €8,104 M Measure of average gross financial debt in the period to calculate the average
or Position) / (Cumulative Number of Days in Force) cost of gross financial debt.
Average cost of gross financial debt % (Cost of gross financial debt) / Gross average financial debt 1.5% = ((€ 99 M * (12 months / 9 months) + €4 M) / €8,911 M 1.7% = €139 M / €8,104 M Measure of the effective rate of financial debt
Debt maturity coverage Number of months Maturity period (months) of core debt that could be covered with the liquidity 20 months 17 months Measure of the capacity to meet debt maturities
available
Liquidity ratio N/A Current assets / Current liabilities. 0.81 = €14,148 M / €17,401 M 0.73 = €6,234 M / €8,555 M Measure of the capacity to meet short term commitments
Solvency ratio N/A (Equity + Non-current liabilities) / Non-current assets 0.88 = (€7,005 M + €17,241 M) / €27,499 M 0.91 = (€7,465 M + €16,042 M) / €25,828 M Measure of the capacity to meet obligations
Debt coverage ratio N/A Net financial debt / Gross operating income (EBITDA) 2.44 = €10,000 M / (((3,125 – 188) *12 months / 9 months) €M + €188 M) 1.82 = €6,899 M / €3,783 M Measure of the amount of available cash flow to meet principal payments on
((1)) financial debt.
Fixed assets €M Property, plant and equipment + Real estate investments + Intangible assets + €23,673 M = €21,634 M + €57 M+ €1,520 M + €462 M €23,273 M = €21,354 M+ €58 M + €1,399 M + €462 M Assets of the Company, whether tangible or intangible, not convertible into
Goodwill short-term liquidity, necessary for the Company to operate and not intended
for sale.
Total net non-current assets €M Property, plant and equipment + Intangible assets + Goodwill + Investments €19,426 M = €21,634 M €19,082 M = €21,354 M Measure of non-current assets excluding deferred tax assets, less the value of
accounted for using the equity method + Real estate investments + Non-current
+ €1,520 M + €462 M
+ €1,399 M + €462 M deferred income and other non-current liabilities.
financial assets - Deferred income - Other non-current assets - Financial
+ €199 M + €57 M
+ €217 M + €58 M
derivatives recognised under non-current financial assets
+ €1,703 M - €4,528 M
+ €947 M - €4,517 M
- €1,615 M - €6 M
- €831 M - €7 M
Total net working capital €M Trade and other receivables + Inventories + Current financial assets - €1,062 M = €10,696 M + €1,121 M + €1,368 M - €0 M + €395 M - €(875) M = €3,151 M + €1,077 M + €1,177 M - €0 M + €426 M - €512 Measure of current assets excluding cash and financial investments equivalent
Financial derivatives recognised under current financial assets + Current €657 M - €11,861 M M - €6,194 M to cash, less suppliers and other payables and current income tax liabilities
income tax assets - Current income tax liabilities - Suppliers and other
payables
Gross invested capital €M Total net non-current assets + Total net working capital €20,488 M = €19,426 M €18,207 M = €19,082 M Total net non-current assets plus total net working capital
+ €1,062 M
- €875 M
Total Provisions and Deferred Tax Assets and Liabilities €M - Provisions for Pensions and Similar Obligations - Other Non-Current €(3,483) M = - €603 M - €2,837 M - €496 M €(3,843) M = - €701 M - €3,003 M - €477 M Measurement of provisions and deferred tax assets and liabilities
Provisions - Current Provisions + Deferred Tax Assets - Deferred Tax
+ €1,924 M - €1,471 M
+ €1,391 M - €1,053 M
Liabilities
Net invested capital €M Gross capital invested – Total Provisions and deferred tax assets and €17,005 M = €20,488 M - €3,483 M + €0 M €14,364 M = €18,207 M - €3,843 M + €0 M Measure of gross invested capital plus total provisions and deferred tax
deferred tax liabilities + Net non-current assets held for sale and assets and liabilities and non-current assets held for sale and discontinued
discontinued operations operations
Book value per share € Equity of the Parent / Number of shares at the end of the period €6.474 = €6,854 M / 1,058,752,117 shares €6.909 = €7,315 M / 1,058,752,117 shares Measure of the portion of equity corresponding to each share at the end of the
year.
Market capitalisation €M Number of shares at the end of the period * Share price at the end of the €18,443 M = 1,058,752,117 shares * €17.420 €23,663 M = 1,058,752,117 shares * €22.350 Measure of total enterprise value according to the share price
period
Price to earnings ratio (PER) ordinary N/A Share price at the end of the period / Net ordinary earnings per share 9.81 = €17.420 / (((1.378 – 0.184)) * 12 months / 9 months) € + 11.10 = €22.350 / €2.0136 Measure indicating the number of times that net ordinary earnings per share
€0.184) ((2)) can be divided into the market price of the shares.
Price to earnings ratio (PER) N/A Share price at the end of the period / Net earnings per share 9.81 = €17.420 / (((1.378 – 0.184)) * 12 months / 9 months) + €0.184) 16.97 =€22.350 / €1.317 Measure indicating the number of times earnings per share can be divided into
((2)) the market price of the shares.
Price / Book value N/A Market capitalisation / Equity of the Parent 2.69 = €18,443 M / €6,854 M 3.23 = €23,663 M / €7,315 M Measure comparing total enterprise value according to the share price with the
carrying amount
M€ = millions of euros; € = euros.
1. Annualised income, discounting the effects, amounting to Euro 188 million,
described in section 5.2.1. Revenue of this Consolidated Management Report.
2. Annualised income, discounting the effects, net of the tax effect, amounting
to Euro 195 million, described in section 5.2. Earnings Analysis of this
Consolidated Management Report).
Alternative Performance Measures (APMs) Unit Definition Reconciliation of alternative performance measures (APMs) Relevance of use
2020 2019
Consolidated ordinary pay-out % (Gross Dividend per Share * Number of Shares at the end of the period) / Net 100.0% = (€2.0136 * 1,058,752,117 shares) / €2,132 M 100.0% = (€1.475 * 1,058,752,117 shares) / €1,562 M Measure of the part of ordinary income obtained used to remunerate
Ordinary Income of the Parent. shareholders through the payment of dividends (consolidated Group)
Consolidated pay-out % Gross dividend per share * Number of shares at the end of the period) / Profit 152.9% = (€2.0136 * 1,058,752,117 shares) / €1,394 M 913.3% = (€1.475 * 1,058,752,117 shares) / €171 M Measure of the part of profits obtained used to remunerate shareholders
of the Parent for the year through the payment of dividends (consolidated Group)
Individual pay-out % (Gross dividend per share * Number of shares at the end of the period / Profit 91.5% = (€2.0136 * 1,058,752,117 shares) / €2,330 M 95.1% = (€1.475 * 1,058,752,117 shares) / €1,642 M Measure of the part of profits obtained used to remunerate shareholders
of ENDESA, S.A. for the year through the payment of dividends (individual company)
M€ = millions of euros; € = euros.
APPENDIX II
Consolidated Financial Statements for the nine-month period ended 30 September
2021
(Translation from the original issued in Spanish. In the event of discrepancy,
the Spanish-language version prevails)
ENDESA, S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AT 30 SEPTEMBER 2021 AND 31
DECEMBER 2020
Millions of Euros
30 September 31 December
2021 ((1))
2020 ((2))
ASSETS
NON-CURRENT ASSETS 27,499 25,828
Property, plant and equipment 21,634 21,354
Investment property 57 58
Intangible assets 1,520 1,399
Goodwill 462 462
Investments accounted for using the equity method 199 217
Non-current financial assets 1,703 947
Deferred tax assets 1,924 1,391
CURRENT ASSETS 14,148 6,234
Inventories 1,121 1,077
Trade and other receivables 11,091 3,577
Trade receivables for sales and services and other receivables 10,696 3,151
Current income tax assets 395 426
Current financial assets 1,368 1,177
Cash and cash equivalents 568 403
Non-current assets held for sale and discontinued operations - -
TOTAL ASSETS 41,647 32,062
EQUITY AND LIABILITIES
EQUITY 7,005 7,465
Of the Parent 6,854 7,315
Of non-controlling interests 151 150
NON-CURRENT LIABILITIES 17,241 16,042
Deferred income 4,528 4,517
Non-current provisions 3,440 3,704
Provisions for pensions and other similar obligations 603 701
Other non-current provisions 2,837 3,003
Non-current financial debt 6,187 5,937
Other non-current liabilities 1,615 831
Deferred tax liabilities 1,471 1,053
CURRENT LIABILITIES 17,401 8,555
Current financial debt 4,387 1,372
Current provisions 496 477
Provisions for pensions and other similar obligations - -
Other current provisions 496 477
Trade payables and other current liabilities 12,518 6,706
Suppliers and other payables 11,861 6,194
Current income tax liabilities 657 512
Liabilities associated with non-current assets classified as held for sale and - -
discontinued operations
TOTAL EQUITY AND LIABILITIES 41,647 32,062
(1) Unaudited.
(2) Audited.
ENDESA, S.A. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
FOR THE PERIODS JANUARY – SEPTEMBER 2021 AND 2020
Millions of Euros
January - September January - September
2021 ((1))
2020 ((1))
REVENUE 18,603 12,959
Sales 13,535 12,314
Other operating income 5,068 645
PROCUREMENTS AND SERVICES (14,075) (8,562)
Power purchases (3,844) (2,681)
Fuel consumption (1,019) (853)
Transmission expenses (3,665) (3,736)
Other variable procurements and services (5,547) (1,292)
CONTRIBUTION MARGIN 4,528 4,397
Self-constructed assets 182 161
Personnel expenses (681) (516)
Other fixed operating expenses (904) (906)
GROSS OPERATING INCOME (EBITDA) 3,125 3,136
Depreciation and amortisation, and impairment losses (1,177) (1,104)
OPERATING INCOME (EBIT) 1,948 2,032
FINANCIAL LOSS (12) (82)
Financial income 114 24
Financial expense (122) (114)
Net exchange differences (4) 8
Net profit/(loss) of companies accounted for using the equity method 13 39
Gains/(losses) on other investments - -
Losses on disposal of assets (23) (1)
PROFIT BEFORE TAX 1,926 1,988
Income tax (461) (473)
PROFIT AFTER TAX FROM CONTINUING OPERATIONS 1,465 1,515
PROFIT/(LOSS) AFTER TAX FROM DISCONTINUED OPERATIONS - -
PROFIT FOR THE PERIOD 1,465 1,515
Parent 1,459 1,511
Non-controlling interests 6 4
BASIC NET EARNINGS PER SHARE FROM CONTINUING OPERATIONS (Euros) 1.38 1.43
DILUTED NET EARNINGS PER SHARE FROM CONTINUING OPERATIONS (Euros) 1.38 1.43
BASIC NET EARNINGS PER SHARE FROM DISCONTINUED OPERATIONS (Euros) - -
DILUTED NET EARNINGS PER SHARE FROM DISCONTINUED OPERATIONS (Euros) - -
BASIC NET EARNINGS PER SHARE (Euros) 1.38 1.43
DILUTED NET EARNINGS PER SHARE (Euros) 1.38 1.43
(1) Unaudited.
ENDESA, S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS JANUARY – SEPTEMBER 2021 AND 2020
Millions of Euros
January - September January - September
2021 ((1))
2020 ((1))
Gross profit before tax and non-controlling interests 1,926 1,988
Adjustments for: 722 897
Depreciation and amortisation, and impairment losses 1,177 1,104
Other adjustments (net) (455) (207)
Changes in working capital: (1,285) (530)
Trade and other receivables (2,173) 104
Inventories (392) (241)
Current financial assets 14 (39)
Trade payables and other current liabilities 1,266 (354)
Other cash flows from operating activities: (501) (386)
Interest received 19 23
Dividends received 30 22
Interest paid (90) (84)
Income tax paid (215) (164)
Other receipts from and payments for operating activities (245) (183)
NET CASH FLOWS FROM OPERATING ACTIVITIES 862 1,969
Acquisitions of property, plant and equipment and intangible assets (1,309) (1,234)
Proceeds from sale of property, plant and equipment and intangible assets 5 18
Investments in Group companies (89) (17)
Disposals of investments in Group companies - 21
Purchase of other investments (367) (199)
Proceeds from sale of other investments 19 46
Cash flows from changes in the consolidation scope - -
Grants and other deferred income 71 68
NET CASH FLOWS FROM INVESTING ACTIVITIES (1,670) (1,297)
Cash flows from equity instruments - 3
Drawdowns of non-current financial debt 384 854
Repayment of non-current financial debt (5) (547)
Net cash flows from current financial debt 2,735 632
Dividends of the Parent paid (2,132) (1,562)
Dividends paid to non-controlling interests (9) (5)
NET CASH FLOWS FROM FINANCING ACTIVITIES 973 (625)
TOTAL NET CASH FLOWS 165 47
Effect of exchange rate fluctuations on cash and cash equivalents - -
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 165 47
BEGINNING CASH AND CASH EQUIVALENTS 403 223
Cash in hand and at banks 403 223
Other cash equivalents - -
END CASH AND CASH EQUIVALENTS 568 270
Cash in hand and at banks 568 270
Other cash equivalents - -
(1) Unaudited.
ENDESA, S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME FOR THE
PERIODS JANUARY – SEPTEMBER 2021 AND 2020
Millions of Euros
January - September January - September
2021 ((1))
2020 ((1))
Of the Parent Of non-controlling interests Total Of the Parent Of non-controlling interests Total
CONSOLIDATED PROFIT FOR THE PERIOD 1,459 6 1,465 1,511 4 1,515
OTHER COMPREHENSIVE INCOME:
REVENUE AND EXPENSES RECOGNISED DIRECTLY IN EQUITY (476) - (476) (146) - (146)
Items that can be reclassified to profit or loss: (520) - (520) (163) - (163)
Cash flow hedges (698) - (698) (213) - (213)
Translation differences - - - - - -
Companies accounted for using the equity method 5 - 5 (1) - (1)
Other revenue and expense recognised directly in equity - - - - - -
Tax effect 173 - 173 51 - 51
Items that cannot be reclassified to profit or loss: 44 - 44 17 - 17
From revaluation/(reversal of revaluation) of property, plant and equipment - - - - - -
and intangible assets
From measurement of financial instruments - - - - - -
Financial assets at fair value - - - - - -
Other revenue/(expenses) - - - - - -
Actuarial gains and losses and other adjustments 55 - 55 23 - 23
Tax effect (11) - (11) (6) - (6)
AMOUNTS TRANSFERRED TO INCOME STATEMENT AND/OR INVESTMENTS (54) - (54) 148 - 148
Cash flow hedges (74) - (74) 194 - 194
Translation differences - - - - - -
Companies accounted for using the equity method - - - - - -
Other revenue and expense recognised directly in equity - - - - - -
Tax effect 20 - 20 (46) - (46)
TOTAL COMPREHENSIVE INCOME 929 6 935 1,513 4 1,517
(1) Unaudited.
ENDESA, S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR
THE PERIOD JANUARY - SEPTEMBER 2021
Millions of Euros
Equity attributable to the Parent ((1)) Non-controlling Interests Total Equity
Capital and reserves A
d
j
u
s
t
m
e
n
t
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t
o
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Capital Share premium, reserves and interim dividend Treasury shares and own equity instruments Profit for the period Other equity
instruments
Beginning balance at 1 January 2021 1,271 4,726 (2) 1,394 - (74) 150 7,465
Adjustments due to changes in accounting policies - - - - - - - -
Corrections of errors - - - - - - - -
Adjusted beginning balance 1,271 4,726 (2) 1,394 - (74) 150 7,465
Total comprehensive income - 44 - 1,459 - (574) 6 935
Transactions with shareholders or owners - (1,391) - - - - (5) (1,396)
Capital increases/(decreases) - - - - - - (2) (2)
Conversion of liabilities into equity - - - - - - - -
Dividends paid - (1,391) - - - - (2) (1,393)
Transactions with own equity instruments (net) - - - - - - - -
Increases/(decreases) due to business combinations - - - - - - - -
Other transactions with shareholders or owners - - - - - - (1) (1)
Other changes in equity - 1,394 - (1,394) 1 - - 1
Share-based payments - - - - 1 - - 1
Transfers between equity items - 1,394 - (1,394) - - - -
Other changes - - - - - - - -
Ending balance at 30 September 2021 1,271 4,773 (2) 1,459 1 (648) 151 7,005
(1) Unaudited.
ENDESA, S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR
THE PERIOD JANUARY - SEPTEMBER 2020
Millions of Euros
Equity attributable to the Parent ((1)) Non-controlling Interests Total equity
Capital and reserves A
d
j
u
s
t
m
e
n
t
s
d
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o
c
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Capital Share premium, reserves and interim dividend Treasury shares and own equity instruments Profit for the period Other equity instruments
Beginning balance at 1 January 2020 1,271 6,187 171 59 149 7,837
Adjustments due to changes in accounting policies - - - -
Corrections of errors - - - -
Adjusted beginning balance 1,271 6,187 171 59 149 7,837
Total comprehensive income - 17 1,511 (15) 4 1,517
Transactions with shareholders or owners - (821) - - 1 (820)
Capital increases/(decreases) - - - 3 3
Conversion of liabilities into equity - - - -
Dividends paid - (821) - - (2) (823)
Transactions with own equity instruments (net) - - - -
Increases/(decreases) due to business combinations - - - -
Other transactions with shareholders or owners - -
- -
Other changes in equity - 171 (171)
- -
Share-based payments - - - -
Transfers between equity items - 171 (171) - -
Other changes - -
Ending balance at 30 September 2020 1,271 5,554 1,511 44 154 8,534
(1) Unaudited.
ENDESA, S.A. AND SUBSIDIARIES
BREAKDOWN CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AT 30 SEPTEMBER 2021
Millions of Euros
30 September 2021 ((1))
Generation and Supply Distribution Structure Consolidation adjustments Total
and eliminations
ASSETS
Non-current assets 14,030 13,452 28,896 (28,879) 27,499
Property, plant and equipment 9,427 12,038 169 - 21,634
Investment property - 52 5 - 57
Intangible assets 1,219 187 114 - 1,520
Goodwill 361 97 4 - 462
Investments accounted for using the equity method 174 21 4 - 199
Non-current financial assets 1,356 773 28,458 (28,884) 1,703
Deferred tax assets 1,493 284 142 5 1,924
Current assets 12,540 1,457 908 (757) 14,148
Inventories 954 167 - - 1,121
Trade and other receivables 10,444 906 484 (743) 11,091
Current financial assets 974 383 25 (14) 1,368
Cash and cash equivalents 168 1 399 - 568
Non-current assets held for sale and discontinued operations - - - - -
TOTAL ASSETS 26,570 14,909 29,804 (29,636) 41,647
EQUITY AND LIABILITIES
Equity 5,786 3,202 16,941 (18,924) 7,005
Of the Parent 5,643 3,194 16,941 (18,924) 6,854
Of non-controlling Interests 143 8 - - 151
Non-Current liabilities 9,276 9,450 8,439 (9,924) 17,241
Deferred income 48 4,480 - - 4,528
Non-current provisions 2,271 842 272 55 3,440
Non-current financial debt 4,710 3,360 8,075 (9,958) 6,187
Other non-current liabilities 1,132 477 32 (26) 1,615
Deferred tax liabilities 1,115 291 60 5 1,471
Current Liabilities 11,508 2,257 4,424 (788) 17,401
Current financial debt 575 8 3,851 (47) 4,387
Current provisions 333 90 73 - 496
Trade payables and other current liabilities 10,600 2,159 500 (741) 12,518
Liabilities associated with non-current assets classified as held for sale and - - - - -
discontinued operations
TOTAL EQUITY AND LIABILITIES 26,570 14,909 29,804 (29,636) 41,647
(1) Unaudited.
ENDESA, S.A. AND SUBSIDIARIES
BREAKDOWN CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AT 31 DECEMBER 2020
Millions of Euros
31 December 2020 ((1))
Generation and Supply Distribution Structure Consolidation adjustments Total
and eliminations
ASSETS
Non-current assets 13,046 13,420 29,814 (30,452) 25,828
Property, plant and equipment 9,191 11,983 180 - 21,354
Investment property - 52 6 - 58
Intangible assets 1,092 183 124 - 1,399
Goodwill 361 97 4 - 462
Investments accounted for using the equity method 194 20 3 - 217
Non-current financial assets 1,285 777 29,341 (30,456) 947
Deferred tax assets 923 308 156 4 1,391
Current assets 4,859 1,353 1,236 (1,214) 6,234
Inventories 957 120 - - 1,077
Trade and other receivables 3,089 717 973 (1,202) 3,577
Current financial assets 652 515 22 (12) 1,177
Cash and cash equivalents 161 1 241 - 403
Non-current assets held for sale and discontinued operations - - - - -
TOTAL ASSETS 17,905 14,773 31,050 (31,666) 32,062
EQUITY AND LIABILITIES
Equity 5,542 2,512 18,224 (18,813) 7,465
Of the Parent 5,400 2,504 18,224 (18,813) 7,315
Of non-controlling Interests 142 8 - - 150
Non-Current liabilities 7,913 9,600 10,143 (11,614) 16,042
Deferred income 43 4,564 - (90) 4,517
Non-current provisions 2,375 933 341 55 3,704
Non-current financial debt 4,459 3,348 9,657 (11,527) 5,937
Other non-current liabilities 353 476 80 (78) 831
Deferred tax liabilities 683 279 65 26 1,053
Current liabilities 4,450 2,661 2,683 (1,239) 8,555
Current financial debt 129 8 1,277 (42) 1,372
Current provisions 343 83 51 - 477
Trade payables and other current liabilities 3,978 2,570 1,355 (1,197) 6,706
Liabilities associated with non-current assets classified as held for sale and - - - - -
discontinued operations
TOTAL EQUITY AND LIABILITIES 17,905 14,773 31,050 (31,666) 32,062
(1) Audited.
ENDESA, S.A. AND SUBSIDIARIES
BREAKDOWN CONSOLIDATED INCOME STATEMENTS FOR
THE PERIOD JANUARY - SEPTEMBER 2021
Millions of Euros
January - September 2021 ((1))
Generation and Supply Distribution Structure Consolidated adjustments and eliminations Total
REVENUE 16,803 1,930 397 (527) 18,603
Sales 11,896 1,748 397 (506) 13,535
Other operating income 4,907 182 - (21) 5,068
PROCUREMENTS AND SERVICES (14,019) (132) (37) 113 (14,075)
Power purchases (3,836) (8) - - (3,844)
Fuel consumption (1,019) - - - (1,019)
Transmission expenses (3,656) (8) - (1) (3,665)
Other variable procurements and services (5,508) (116) (37) 114 (5,547)
CONTRIBUTION MARGIN 2,784 1,798 360 (414) 4,528
Self-constructed assets 77 92 13 - 182
Personnel expenses (354) (193) (145) 11 (681)
Other fixed operating expenses (803) (265) (239) 403 (904)
GROSS OPERATING INCOME (EBITDA) 1,704 1,432 (11) - 3,125
Depreciation and amortisation, and impairment losses (658) (471) (48) - (1,177)
OPERATING INCOME (EBIT) 1,046 961 (59) - 1,948
FINANCIAL PROFIT/LOSS 15 (42) 15 - (12)
Financial income 101 7 443 (437) 114
Financial expense (81) (49) (429) 437 (122)
Net exchange differences (5) - 1 - (4)
Net profit/(loss) of companies accounted for using the equity method 10 3 - - 13
Gains/(losses) on other investments - - 143 (143) -
Losses on disposal of assets (23) (1) 1 - (23)
PROFIT BEFORE TAX 1,048 921 100 (143) 1,926
Income tax (241) (226) 6 - (461)
PROFIT AFTER TAX FROM CONTINUING OPERATIONS 807 695 106 (143) 1,465
PROFIT/(LOSS) AFTER TAX FROM DISCONTINUED OPERATIONS - - - - -
PROFIT FOR THE PERIOD 807 695 106 (143) 1,465
Parent 802 694 106 (143) 1,459
Non-controlling interests 5 1 - - 6
(1) Unaudited.
ENDESA, S.A. AND SUBSIDIARIES
BREAKDOWN CONSOLIDATED INCOME STATEMENTS FOR
THE PERIOD JANUARY - SEPTEMBER 2020
Millions of Euros
January - September 2020 ((1))
Generation and Supply Distribution Structure Consolidated adjustments and eliminations Total
REVENUE 11,125 1,971 393 (530) 12,959
Sales 10,639 1,789 379 (493) 12,314
Other operating income 486 182 14 (37) 645
PROCUREMENTS AND SERVICES (8,524) (122) (32) 116 (8,562)
Power purchases (2,676) (5) - - (2,681)
Fuel consumption (853) - - - (853)
Transmission expenses (3,725) (9) - (2) (3,736)
Other variable procurements and services (1,270) (108) (32) 118 (1,292)
CONTRIBUTION MARGIN 2,601 1,849 361 (414) 4,397
Self-constructed assets 52 94 15 - 161
Personnel expenses (365) (7) (154) 10 (516)
Other fixed operating expenses (776) (287) (247) 404 (906)
GROSS OPERATING INCOME (EBITDA) 1,512 1,649 (25) - 3,136
Depreciation and amortisation, and impairment losses (599) (464) (41) - (1,104)
OPERATING INCOME (EBIT) 913 1,185 (66) - 2,032
FINANCIAL PROFIT/LOSS (55) (32) 5 - (82)
Financial income 23 12 414 (425) 24
Financial expense (86) (44) (409) 425 (114)
Net exchange differences 8 - - - 8
Net profit/(loss) of companies accounted for using the equity method 36 3 - - 39
Gains/(losses) on other investments - - 915 (915) -
Losses on disposal of assets (11) 10 - - (1)
PROFIT BEFORE TAX 883 1,166 854 (915) 1,988
Income tax (207) (277) 11 - (473)
PROFIT AFTER TAX FROM CONTINUING OPERATIONS 676 889 865 (915) 1,515
PROFIT/(LOSS) AFTER TAX FROM DISCONTINUED OPERATIONS - - - - -
PROFIT FOR THE PERIOD 676 889 865 (915) 1,515
Parent 673 888 865 (915) 1,511
Non-controlling interests 3 1 - - 4
(1) Unaudited.
You will find additional information on our 9M 2021 Results on our website
www.endesa.com
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.endesa.com&esheet=52521228&newsitemid=20211104005232&lan=en-US&anchor=www.endesa.com&index=1&md5=00efe8667a14ea4228f9ab2db48e3648)
View source version on businesswire.com:
https://www.businesswire.com/news/home/20211104005232/en/
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