Enel Spa Unsp/Adr

Thank you for sending by, and welcome to NL Full Year 2022 Results Conference Call. At this time, all participants are enlisted all in mode. I would now like to enter the conference with the head of IA, Monica Giardi. Please go ahead.

Good evening, ladies and gentlemen, and I apologize for the late start. Welcome to our full year 2022 results presentation, which will be hosted by our CEO, Francesco Staracci, and our CFO, Alberto De Paoli. In the presentation, Francesco and Alberto will wrap up on 2022 numbers. Following the presentation, we will have the usual Q&A session. We ask those connected to the webcast to send the questions only via email at investor.relations.nl.com. Before we start, let me remind you that media is listening to both the presentation and the Q&A session. Thank you, and now let me hand over to Francesco.

Thank you, Monica. Good evening, everybody. Let's start with the highlights of the period. We had a very challenging market context, but in this context, our business model proved very resilient and testified once again the importance of being an integrated player. Our economic and financial performance was supported by a sound operating delivery that did not stop on the strategic aims in spite of the disruptive events that materialized in the past three years. All that coupled with managerial actions that were promptly put in place, allowed us to hit the guidance set out at our capital market days in November. Our strategic repositioning program progressed better than planned in 2022. We are well in track on the execution of the 2023 deals, as I will comment later in the presentation. In light of the results achieved, we will propose to the next assembly a fixed dividend per share of €0.4 per share against the 2022 earnings. which underpins a high single-digit growth versus 2021 and implying a 7.5 dividend yield at the current share price. We move now to slide number three that shows the importance of managing the business in an integrated way. We posted an EBITDA of 19.7 billions, marking a 3% growth year-on-year above the guided range. Words to highlight the composition of this growth. The management of the integrated business contributed 1.5 billion in a context of severe energy market disruptions. Our generation trading and portfolio optimization activities more than offset the negative performance of customers in Europe, resulting from dynamics that Alberto will detail later. Networks' net of stewardship benefited from the focus on efficiencies and geographical diversification as as LATAM tariff indexation and past adjustments more than offset adverse regulatory changes in Europe. The growth year-on-year is normalized and organic, driven by our operations. In fact, the stewardship business model contributed for around €900 million to the 2022 EBITDA, which is $900 million less than the previous year, which recorded the contribution of the open fiber capital gain of $1.8 billion. Non-recurring items, around $100 million in 2022, weighted on growth negatively for $500 million. Our operating delivery supported targets achievement over time, as you can see in the next slide. During the last three years, The group delivered financial results that were very strong, with EBITDA and net income increasing 10% and 13% respectively, despite an exogenous environment that stress-tested our business model in many ways. I am in slide number four. Leveraging on the strategic decisions taken in the past, we have been able to implement managerial actions that compensated the extreme volatility and allowed us to reach and exceed the targets that we set for 2022. The ability of the company to deliver financial results demonstrate that leveraging on an integrated position combined with the flexibility of the asset base and the geographical diversification of the group is crucial to absorb and adapt to abrupt changes. The 22 performance is set to support future growth prospects and provide visibility on the target set for the future years of the plan. Let's now move to the key drivers that allowed us to reach a level of debt within the guidance provided back in November last year. We are now on chart number five. Groups net debt stood at 60 billions, 10 billions lower than what was reported at the nine months results. This was expected and was the result of the actions implemented in the two prior quarters of the year in light of the evolution of the crisis. We have been able to meet the 58-62 guidance range despite the distressed environment and measures that were implemented by governments which still weigh in for about 5.4 billions on our financials. This result has been achieved thanks to 9 billion euros of euros of FFO contribution, which improved €8 billion in the last three months, given the EBITDA performance already commented, and a recovery of more than €4 billion in working capital. Furthermore, the successful implementation of our strategic repositioning had a positive impact on our net debt evolution. In the next slide, number six, I dive into the business delivery of our group in these last three years of disruptions. The developing machines, they risked our generation capacity. The share of renewables capacity increased progressively over time, reaching 66% of the total in 2022, which is a jump of 14 percentage points in just three years. Over the last three years, we added more than 4 million customers to the liberalized market providing them a wider portfolio of infrastructure and flexibility services to cope with their needs. And our continued effort in the digitalization of the distribution network resulted in grids of higher quality, with the average interruption down by more than 20% compared to the pre-COVID year, and now 63% of our customers are digitalized. In the next slide, I show you how our renewable development machine worked and is set to work in the future. We added more than 10,000 MW in just the last 24 months, despite supply chain issues that have marginally impacted our construction activities. We will not stop. We target to add around 21,000 MW of new capacity over the next three years, of which 5,500 MW in 2023, a target that is already fully addressed. Our future ambitions are backed by a pipeline of more than 450,000 megawatts, of which around 130,000 are located in Italy and Iberia, demonstrating that we are in the best position to accelerate in the energy independence in Europe. The increasing share of clean energy resulted and will result in a benefit for our customers in enjoying affordable prices, particularly in Italy and Spain. Our customer base in the liberalized market in these two countries increased by 2.6 million customers in one year as our commercial policies protected people from an extremely distressed price environment. This is chart number eight. 65% of sales to customers were at prices on average around 40% lower than market prices and fixed throughout the period. This contract signed before energy tensions preserved our customers on the liberalized market throughout the entire turbulent period. We honored these conditions, even if at an economic loss, as we prioritize consumers' protection against an unsustainable pricing pressure. The operating delivery of our networks will be key to accelerate the penetration of distributed generation, and you can see that on slide number 9. The investments deployed over time on networks have been instrumental to create the electricity grid of tomorrow with a high level of security, resiliency and reliability to accelerate a clean electrification. The yearly request of connections from distributed generation have increased 50% since 2019 and have reached 5.6 thousand megawatts in 2022. These requests are associated with renewable distributed capacity, including decentralized energy management system and virtual power plants, and our networks have been able to create hosting capacity capable to integrate these new generation sources seamlessly and unlock future value for the energy system. Furthermore, we have continued to focus on digitalization with almost 46 million smart meters installed at the end of 2022. Let's now have a look at the strategic deposition implemented so far on slide number 10. Group simplification has always been a cornerstone of our strategy. In 2014, we engaged in the transformation of group structures with the aim of simplifying governance while maximizing efficiency and efficacy of our actions, aligning priority at country level with the group's strategy, upgrading growth prospects, leveraging on synergies and accelerating delivery capabilities. Over time, we have executed this strategy, implementing all necessary steps to transform the group into a simpler and leaner organization, focusing on the execution and value creation. We are concluding on the right-hand side of this chart, you can see it, this big effort as Eastern Europe and LATAM repositioning. LATAM on the left, Eastern Europe on the right. This kicked off in 2014, as you can see from the chart, and it now enters the final phase. 2022 has marked a leap forward in the simplification effort, and by early 2023, the group will evolve further into the linear form we targeted since the beginning. You see this in page 11. Over the course of 2022, portfolio management delivered better than expected, executing 5.9 billion of asset valorization. 23 is also off to a great start. We already announced the signing of the sale of the assets in Romania to PPC for a total consideration of 1.3 billions and an impact on the debt of around 1.7. The closing of the sale is expected by the third quarter of 23, the sale of generation assets in Argentina. All the pending disposals that you see in this chart are ongoing and we are confident that execution will be completed as planned. Finally, let's move to shareholder remuneration on slide number 12. The resiliency of our business model, the high standards of operating and performance, and all the actions that management has put in place during this 22 year allowed us to deliver a sound set of numbers. So we will propose to the AGM a dividend per share of 0.4 euro per share, up by more than 5% versus previous year. It is worth to highlight that the business model we built since 2015 guaranteed a solid and visible improvement in the shareholder remuneration, and the share price appreciation resulting a total shareholder return exceeding 110%. Now I hand over to Alberto. He will go through the details of the 2022 financial performance. Please, Alberto.