Enel

Earnings Release • Feb 3, 2022

Informazione Regolamentata n. 0116-7-2022		Data/Ora Ricezione 03 Febbraio 2022 19:20:23	Euronext Milan
Societa'	:	ENEL
Identificativo Informazione Regolamentata	:	157105
Nome utilizzatore	:	ENELN05 - Giannetti
Tipologia	:	1.1
Data/Ora Ricezione	:	03 Febbraio 2022 19:20:23
Data/Ora Inizio Diffusione presunta	:	03 Febbraio 2022 19:20:24
Oggetto	:	Enel: preliminary results 2021
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ENEL: PRELIMINARY RESULTS 2021

• Revenues: 88.3 billion euros (66.0¹ billion euros in 2020, +33.8%)
• Ordinary EBITDA: 19.2 billion euros (18.0² billion euros in 2020, +6.7%)
• Net financial debt at 52.0 billion euros (45.4 billion euros at year-end 2020, +14.5%)³

Rome, February 3rd, 2022 - The Board of Directors of Enel S.p.A., chaired by Michele Crisostomo, met today to review the preliminary consolidated results for 2021.

Revenues amounted to 88.3 billion euros, an increase of 22.3 billion euros (+33.8%) compared with the figure of 66.0 billion euros posted in 2020. The change is mainly attributable to: (i) the increase in revenues from Infrastructure and Networks, essentially due to the effect of the greater volumes transported, as a result of the increase in demand for electricity; (ii) the increase in revenues from Enel Green Power, mainly as a result of higher production from renewable sources; (iii) higher revenues from End-User Markets, due to increased sales of electricity in Italy and Latin America; (iv) the increase in revenues from Enel X as a result of the increase in services associated with the new commercial initiatives and demand response activities; (v) higher revenues from Thermal Generation and Trading due to the increase in the volumes of energy and gas sold and to increased commodity trading activities related to contracts with physical delivery. The increase in revenues also includes the gain realized on the sale of the stake held in Open Fiber S.p.A. This increase in revenues more than offset the adverse exchange rate effect, mainly in Latin America.

Ordinary EBITDA amounted to 19.2 billion euros, an increase of 1.2 billion euros (+6.7%) compared with the figure of 18.0 billion euros posted in 2020. This increase, which includes the gain realized on the sale of the stake held in Open Fiber S.p.A., is also attributable to:

• Enel Green Power, mainly as a result of: (i) improved operating performance in North America and Brazil following the commissioning of new plants; (ii) the improvement in the margin in Spain, both due to the improved performance of wind and solar plants and to the positive effects linked to the favorable outcome of a dispute;
• Enel X, mainly in Italy and North America, due to increased service margins associated with new commercial initiatives and demand response activities;

¹ The 2020 figure has been adjusted, solely for comparative purposes, to take into account the effects of the different classification resulting from the measurement at fair value, at the end of the period, of outstanding contracts for the purchase and sale of commodities settled with physical delivery; this different classification did not affect the margins recognized.

In addition, for comparative purposes only, a reclassification was made from financial income to revenues for an amount of 87 million euros of the component recognized in the income statement linked to the remeasurement at fair value of financial assets related to the service in concession of distribution activities in Brazil falling within the scope of IFRIC 12. This last classification had an effect of the same amount on the recognized margins.

² For comparative purposes only, the figure for 2020 has been adjusted due to the different classification mentioned above concerning the application of IFRIC 12 in Brazil.

³ The figures relating to 2021 and 2020 do not include amounts relating to the perimeter classified as 'Assets held for sale'.

Against the positive changes highlighted above, there are negative effects deriving from the trend in exchange rates, mainly in Latin America, from the normalization of trading activities compared to the previous year and from a decrease in margins in end-user markets, also due to the effect of higher procurement costs.

EBITDA, which includes the effects of non-ordinary items relating to the costs arising from corporate reorganization plans launched by the Group within the framework of the energy transition and digitalization process, to the write-downs of inventories relating to certain coal-fired plants in Italy, Spain and Chile, as well as to the costs incurred as a result of the COVID-19 outbreak, was 17.6 billion euros (16.9⁴ billion euros in 2020, +4.1%).

Net financial debt at year-end 2021 comes to 52.0 billion euros. The change from 45.4 billion euros reported in 2020 (+14.5%) is attributable to the requirements generated by investments in the period, the payment of dividends and the acquisition of additional stakes in the share capital of Enel Américas. The positive cash flow generated by operations, the issuance of a perpetual non-convertible subordinated hybrid bond as well as the sale of the stake held in Open Fiber S.p.A., have partially offset the financial requirements associated with the abovementioned items.

The number of employees at the end of 2021 was 66,279 (66,717 at the end of 2020).

During 2021, the Enel Group produced a total of 222.6 TWh of electricity (207.1 TWh in 2020), distributed 510.3 TWh on its networks (485.2 TWh in 2020⁵ ) and sold 309.4 TWh (298.2 TWh in 2020).

Specifically, outside Italy, the Enel Group in 2021 produced 174.6 TWh of electricity (164.6 TWh in 2020), distributed 283.5 TWh (270.8 TWh in 2020⁶ ) and sold 216.7 TWh (208.0 TWh in 2020).

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Alternative performance indicators

This press release uses some "alternative performance indicators" that are not envisaged by the international accounting standards adopted by the European Union - IFRS-EU, but which management deems useful for the better evaluation and monitoring of the Group's economic and financial performance. In line with CONSOB Communication no. 0092543 of December 3rd, 2015 and the Guidelines issued on October 5th, 2015, by the European Securities and Markets Authority (ESMA) pursuant to Regulation (EU) no. 1095/2010, the content and calculation basis of these indicators are set out below:

• EBITDA: represents an indicator of Enel's operating performance and is calculated by adding "Operating income" to "Amortizations and impairment losses";
• Ordinary EBITDA is defined as the "EBITDA" attributable to ordinary operations only, linked to the new business models of Ownership and Stewardship. It excludes expenses associated with corporate reorganization plans and costs directly related to the COVID-19 outbreak;
• Net financial debt represents an indicator of the Enel financial structure and is determined by:
• "Long-term borrowings", "Short-term borrowings" and the "Current portion of long-term borrowings", taking into account "Short-term financial payables" included in "Other current liabilities";

⁴ Solely for comparative purposes, a reclassification was made from financial income to revenues for an amount of approximately 87 million euros of the component recognized in the income statement linked to the remeasurement at fair value of financial assets related to the service in concession of distribution activities in Brazil falling within the scope of IFRIC 12.

⁵ The figure of energy distributed for 2020 reflects a more accurate measurement of transported volumes.

⁶ The figure of energy distributed outside of Italy for 2020 reflects a more accurate measurement of transported volumes.

• net of "Cash and cash equivalents";
• net of "Current portion of long-term financial receivables", "Current securities" and "Other financial receivables" included in "Other current financial assets";
• net of "Non-current securities" and "Other non-current financial receivables" included in "Other noncurrent financial assets".

The net financial debt of the Enel Group is calculated in conformity with the provisions of Guideline No. 39, issued on March 4th, 2021, by ESMA, applicable from May 5th, 2021, and in line with the related Warning Notice No. 5/21 issued by CONSOB on April 29th, 2021.

Pursuant to Article 154-bis, paragraph 2, of the Consolidated Finance Act, the officer responsible for the preparation of Enel's corporate financial reports, Alberto De Paoli, declares that the accounting information contained in this press release corresponds with that contained in the accounting documentation, books and records.