The Group’s 2018-2020 Strategic Plan, presented in November 2017, confirms the key pillars of its strategy, with an additional evolution and acceleration of its implementation.
Digitalization and customer focus remain major enabling factors for the strategy, with a view to offering shareholders attractive returns and create sustainable long-term value for all stakeholders. Specifically, the Group’s 2018- 2020 Strategic Plan focuses on the following issues.
- Digitalization: €5.3 billion in investment to digitalize Enel’s asset base, operations and processes and enhance connectivity, with a target of €1.9 billion in cumulative incremental EBITDA between 2018 and 2020.
- Customer focus: a target of €3.3 billion of EBITDA in 2020, of which €2.9 billion from the retail power and gas sector and €400 million from Enel X, leveraging 67 million customers and almost 35 million power and gas customers in the unregulated market expected in 2020.
- Operational efficiency: a target of €1.2 billion of savings in real terms in 2020 vs. 2017, of which €500 million driven by increased investments in digitalization.
- Industrial growth: shifting capital allocation towards mature economies mainly in networks and renewables, with around 80% of growth capex invested in Italy, Iberia and North and Central America.
- Group simplification & active portfolio management: continuing the streamlining of the ownership structure of subsidiaries and rationalizing the operating companies in South America. Increased focus on minority buy-outs, increasing investment target to €2.3 billion in 2018-2020. Possibility of share buybacks of up to €2 billion.
- Creating sustainable long-term value: thanks to the excellent results obtained in 2017, the Group has strengthened its commitment towards: SDG 4 (quality education), doubling the previous target to 800,000 beneficiaries; SDG 7 (clean and accessible energy), confirming the target of 3 million beneficiaries; SDG 8 (decent work and economic growth), for which the previous target has been doubled to 3 million beneficiaries; and SDG 13 (climate action), for which the target of <350 gco2="" kweq="" by="" 2020="" has="" been="" confirmed="" li="">
- Shareholder remuneration: dividend pay-out confirmed at 70% on Group net ordinary income from 2018. Minimum dividend per share set at €0.28 in 2018.
2018 will see:
- the continuation of investments in digitalization, with an acceleration of the installation of second-generation smart meters in Italy and completion of their installation in Iberia. The roll-out of the optical fibre network by OpEn Fiber will also be accelerated;
- the contribution of the customer focus strategy on a global scale, with the launch of the new customer experience platform in Italy in particular and the acceleration of Enel X’s activities in the flexibility and electric mobility businesses;
- substantial progress in operational efficiency, supported by digitalization, with a cash cost target of €10.3 billion in 2020;
- the contribution of industrial growth, focused on networks and renewables, with an EBITDA growth target of €1.1 billion;
- additional progress in the simplification of the Group and active portfolio management, with the completion of the restructuring of the assets in Chile and the associated reduction in minority shareholders, and completion of the BSO (”Build, Sell and Operate”) transformation for renewables assets in Mexico.
The progress achieved for each of the enabling factors and the key pillars of the Strategic Plan permit us to confirm the performance/financial targets for 2018. In addition, on the basis of the key elements presented above, the performance and financial targets underpinning the Group’s 2018-2020 Strategic Plan are as follows.
|Recurring EBITDA||billions of euro||~16.2||~17.2||~18.2||~+6%|
|Net ordinary income||billions of euro||~4.1||~4.8||~5.4||~+15%|
|Minimum dividend||euro per share||0.28||-||-||-|
|FFO/Net financial debt||%||27||29||31||~+4 p.p.|