Over a decade of profound transformation, the Group is placing at the core of its strategy the acceleration of the energy transition, alongside sustainable and profitable growth to create significant value shared with all stakeholders and attractive returns for shareholders over time.
Group Ordinary EBITDA is expected to increase at a 5%-6% Compounded Annual Growth Rate (“CAGR”) while Net Ordinary Income is expected to increase at a 6%-7% CAGR between 2020 and 2030.
The Group expects to mobilize investments of 190 billion euros in the 2021-2030 period, boosting decarbonization, electrification of consumption and platforms to create sustainable shared value for all stakeholders and profitability over the medium and long term.
The Enel Group’s leadership position in the industry and its journey towards becoming a fully digital company enable the implementation of two business models: the traditional one, called “Ownership”, where digital platforms are a business enhancer supporting investment profitability, and the “Stewardship” model, which catalyzes third-party investments in partnership with Enel or where platforms are a business generator.
The Group plans to directly invest around 160 billion euros, of which over 150 billion euros through the Ownership business model and around 10 billion euros through the Stewardship business model, while further catalyzing around 30 billion euros from third parties.
As for the investment planned under the Ownership business model:
- Nearly half will be devoted to Global Power Generation, with Renewables totaling around 70 billion euros, which are expected to lead to around 120 GW of installed capacity by 2030, 7 times higher than the approximately 45 GW currently installed. This will be accomplished by leveraging on a growing pipeline of more than 140 GW, alongside a worldwide platform-based Business Development, Engineering and Construction as well as Operation and Maintenance model;
- Around 46% is expected to be deployed in Infrastructure and Networks, to address quality and resiliency improvements, new connections and infrastructure digitalization, resulting in a Group Regulated Asset Base (“RAB”) of some 70 billion euros in 2030 and over 90 million end users 100%-digitalized through smart meters, leveraging on an unparalleled scale of operations, the highest digitalization expertise and a distinctive intellectual property value;
- The remaining amount relates to Customers and is expected to lead, by 2030, to a steep increase in customer value. The Group will enable electrification, accelerating customers’ path to sustainability and energy efficiency, combining traditional offerings with “beyond commodity” services. This business will leverage on the largest customer base worldwide, digital platforms and a growing integrated portfolio of offerings.
As for the investment under the Stewardship business model, the Group is expected to invest, approximately, an additional 10 billion euros, while catalyzing around 30 billion euros from third parties, enabling an overall amount of some 40 billion euros of investments, mainly related to Renewables, alongside Fiber, e-transport and flexibility.
The Group will reach an 80% reduction in direct CO2 emissions versus 2017 (Science-Based Targets initiative, SBTi-certified) and contribute to the creation of over 240 billion euros of Gross Domestic Product in Enel’s countries of presence through local investments in generation and electrification.
The 2021-2023 Strategic Plan
The Group plans to directly invest around 40 billion euros, of which around 38 billion euros through the Ownership business model and around 2 billion euros through the Stewardship business model, while further catalyzing 8 billion euros from third parties.
More than 90% of Enel’s consolidated investments will be in line with the UN Sustainable Development Goals (“SDGs”). In addition, according to Enel’s initial calculations, between 80% and 90% of the Group’s consolidated capex will be aligned to EU Taxonomy criteria for its substantial contribution to climate change mitigation.
The growth rate in investments versus the previous plan is expected to be around 36%.
As for the investment planned under the Ownership business model:
- More than half is dedicated to Global Power Generation, with around 17 billion euros to Renewables, which will lead to an overall installed consolidated renewable capacity of 60 GW by 2023 (+33% versus 2020). The Group will further accelerate decarbonization by adding renewable capacity that will more than offset thermal decommissioning. As a result, the Group’s Scope 1 CO2 emissions are set to decrease by more than 30%, from 2020 to 2023, positioning the Group on track to achieve its 2030 science-based decarbonization target of 80% greenhouse gas (“GHG”) emission reduction versus 2017, in line with the 1.5°C pathway scenario;
- Around 43% is expected to be deployed in Infrastructure and Networks. Capex acceleration is expected to drive the Group’s RAB up by 14% versus 2020, reaching around 48 billion euros in 2023;
- The remaining amount relates to Customers. The value of Business to Customer (“B2C”) clients is expected to increase by around 30% and that of Business to Business (“B2B”) by around 45%, thanks to the elimination of regulated tariffs, mainly in Italy, and to the electrification of energy consumption trends that will call for “beyond commodity” services.
As for the investment under the Stewardship business model, the Group is expected to invest, approximately, an additional 2 billion euros, while catalyzing around 8 billion euros of investments from third parties, therefore enabling an overall capex of around 10 billion euros, mainly related to Renewables, alongside Fiber, e-transport and flexibility.
The outcome of these investments will show, across all businesses, double digit growth in the three-year plan period. Managed renewable capacity is expected to reach around 8 GW in 2023, more than double versus 2020. Additionally, with Enel X, the Group aims to increase the number of electric buses by more than 6 times to around 5,500 units in 2023, as well as to grow demand response capacity to 10.6 GW (+1.8 times versus 2020) and storage capacity to 527 MW (+4.2 times versus 2020). Finally, in 2023, Enel X is expected to reach around 780,000 public and private charging points made available worldwide (+4.5 times versus 2020).
At Group level, Ordinary EBITDA is expected to be in a range between 20.7 and 21.3 billion euros in 2023, implying a 5%-6% CAGR. Net Ordinary Income is expected to be in a range between 6.5 and 6.7 billion euros in 2023, implying an 8% to 10% CAGR, thanks also to the continued optimization of Group financial management – particularly through an increase in sustainable finance, which will account for around 50% of total gross debt in 2023 – leading to a lower cost of debt.
Enel has set up a simple, predictable and attractive dividend policy for the period. Shareholders will receive an increasing guaranteed fixed Dividend Per Share (“DPS”) over the next three years with a target of 0.43 euros/share in 2023, translating into a CAGR of approximately 7%.
|Earnings growth||2020E||2021||2022||2023||2020-23 CAGR|
|Ordinary EBITDA (€bn)||~18||18.7-19.3||19.7-20.3||20.7-21.3||+5%/+6%|
|Net ordinary income (€bn)||5.0-5.2||5.4-5.6||5.9-6.1||6.5-6.7||+8%/+10%|
|Guaranteed DPS (€/share)||0.35||0.38||0.40||0.43||~7%|
“With this new Strategic Plan we are setting a direction for the next 10 years, mobilizing 190 billion euros in investments to pursue our goals in a decade full of opportunities. To realize this vision, we can leverage on our clear leadership in the utility sphere across three main elements, all driven by an innovative platform-based model. First, as a ‘Super Major’ in the renewable sector, we operate the world’s largest private generation fleet. Furthermore, we have an unparalleled global network system, where the platform-operating model drives improvements in quality, resiliency, efficiency and flexibility. Last but not least, we count on the largest customer base worldwide to which, through our business platforms, we provide innovative services and integrated offerings. Throughout the decade, we will strengthen the creation of sustainable shared value for all stakeholders, which is also embedded in an attractive remuneration for our shareholders.” – Francesco Starace, CEO and General Manager of Enel.