Enel

Earnings Release • Nov 12, 2019

Informazione Regolamentata n. 0116-113-2019		Data/Ora Ricezione 12 Novembre 2019 17:40:04	MTA
Societa'	:	ENEL
Identificativo Informazione Regolamentata	:	124619
Nome utilizzatore	:	ENELN07 - Cozzolino
Tipologia	:	REGEM
Data/Ora Ricezione	:	12 Novembre 2019 17:40:04
Data/Ora Inizio Diffusione presunta	:	12 Novembre 2019 17:40:05
Oggetto	:	Enel, net ordinary income up 14.1% in the first nine months of 2019, ordinary EBITDA target for the year revised upward to 17.8 billion euros
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ENEL, NET ORDINARY INCOME UP 14.1% IN THE FIRST NINE MONTHS OF 2019, ORDINARY EBITDA TARGET FOR THE YEAR REVISED UPWARD TO 17.8 BILLION EUROS

• Revenues: 57,124 million euros (55,246 million euros in the first nine months of 2018, +3.4%)
  • the increase was mainly attributable to the activities of Infrastructure and Networks, especially in Latin America thanks to the contribution of Enel Distribuição São Paulo in Brazil and the settlement of pending regulatory issues in Argentina, as well as to Thermal Generation and Trading activities, mainly in Italy
• EBITDA: 13,209 million euros (12,134 million euros in the first nine months of 2018, +8.9%)
• Ordinary EBITDA: 13,268 million euros (12,006 million euros in the first nine months of 2018, +10.5%) net of extraordinary items in the two periods
  • the increase was driven by the performance of Infrastructure and Networks in Latin America, which benefitted from the results posted by Enel Distribuição São Paulo and regulatory changes in Brazil and Argentina, by the increase in margins in nuclear generation, and by the expansion of the free market
• EBIT: 4,199 million euros (7,438 million euros in the first nine months of 2018, -43.5%)
  • the decrease reflected the impairment recognised on a number of coal-fired plants in Italy, Spain, Chile and Russia, which more than offset the EBITDA increase
• Group net income: 813 million euros (3,016 million euros in the first nine months of 2018, 73.0%), mainly due to the impairment recognised on a number of coal-fired plants
• Group net ordinary income: 3,295 million euros (2,888 million euros in the first nine months of 2018, +14.1%) net of extraordinary items in the two periods
  • the change reflects the improvement of ordinary operating results, partially offset by higher financial expenses not directly attributable to debt, as well as by a decrease in the net income of equity investments accounted for using the equity method
• Net financial debt: 46,505 million euros (41,089 million euros at the end of 2018, +13.2%)
  • increase mainly in line with capital expenditure for the period, the payment of dividends, adverse exchange rate developments and the initial application of IFRS 16.
• Approval of interim dividend for 2019 of 0.16 euros per share, in distribution as from January 22nd , 2020, an increase of 14.3% on the interim dividend distributed in January this year
  • The Enel Board of Directors confirms the interim dividend policy for 2019, as provided for in the 2019-2021 Strategic Plan

The total dividend for 2019 is expected to be the highest between 0.32 euros per share and 70% of the Enel Group's net ordinary income

Francesco Starace, Enel CEO and General Manager, said: "The positive performance recorded in the first nine months of 2019 demonstrates the solidity of Enel's integrated business model, which made it possible to increase the Group's net ordinary income by 14% and ordinary EBITDA by 11%.

During the period, the Group also accelerated its investments to over 6 billion euros, 84% of which dedicated to renewables and grids, fuelled by a strong cash generation that will continue to support our medium and long-term growth ambitions. Furthermore, in these nine months the Group expanded by 24% its investments in asset development, which are fully addressed for 2019 and 2020, offering full visibility on the achievement of our industrial objectives.

Actions to fully integrate sustainability into the Group's business strategy have been increasingly effective. Our path towards decarbonisation continues, in which a key step was the commitment undertaken by Enel last September to reduce direct greenhouse gas emissions per kWh by 70% by 2030 compared with 2017 values. This goal has been certified by the Science Based Targets initiative.

In addition, the Group launched the first corporate bonds in the world linked to the achievement of the United Nations Sustainable Development Goals, first on the US market and then in Europe. The issues raised about 4 billion euros and were four times oversubscribed, underscoring market confidence in this innovative sustainable finance tool.

In renewables, we installed 600 MW in these nine months and we are expecting the entry into service of a further 2,400 MW by the end of the year. This allows us to confirm the target of 3 GW of new renewable capacity installed by the end of 2019. We are also working to increase our annual target of additional renewable capacity to 4 GW, starting in 2020.

Looking ahead, operational growth, the continuous effort going into efficiency enhancement and the simplification of the corporate structure place us in the best position to exceed our full-year consolidated ordinary EBITDA target, raising it to around 17.8 billion euros, and to generate a consolidated net ordinary income of about 4.8 billion euros at the end of 2019. These actions are being pursued within a strategic approach that views sustainability as a key factor in the creation of value for the Group and its stakeholders."

Rome, November 12th, 2019 – The Board of Directors of Enel S.p.A. ("Enel" or the "company"), chaired by Patrizia Grieco, examined and approved the interim financial report at September 30th, 2019. The Board of Directors has also examined and approved Enel's financial statements at the same date and the report that indicates that the company's financial position and performance permit the distribution of an interim dividend for 2019 of 0.16 euros per share, which will be paid as from January 22nd, 2020.

*****

1) Consolidated financial highlights for the first nine months of 2019

REVENUES

The following table reports revenues by business line:

Revenues (millions of euros)	9M 2019	9M 2018	Change
Thermal Generation and Trading	21,278	19,803	7.4%

Enel Green Power	5,547	5,758	-3.7%
Infrastructure and Networks	16,159	14,588	10.8%
End-user markets	24,222	25,229	-4.0%
Enel X	835	715	16.8%
Services	1,385	1,339	3.4%
Other, eliminations and adjustments	(12,302)	(12,186)	-1.0%
TOTAL	57,124	55,246	3.4%

Revenues in the first nine months of 2019 amounted to 57,124 million euros, an increase of 1,878 million euros (+3.4%) compared with the same period of 2018. The increase was mainly attributable to: (i) higher revenues from Infrastructure and Networks, which benefitted from the acquisition in June 2018 of Enel Distribuição São Paulo (1,022 million euros) and the agreement between Edesur and Argentina's government to define pending regulatory issues (202 million euros), as well as tariff increases reported in Brazil, Peru and Argentina, as well as (ii) an increase in revenues from Thermal Generation and Trading as a result of increased commodity trading, mainly in Italy (1,493 million euros); despite (iii) lower revenues from End-user markets (1,007 million euros), mainly in Spain.

These impacts include adverse exchange rate developments amounting to 414 million euros, mainly in Latin America.

Extraordinary items in revenues in the first nine months of 2019 included the gain of 108 million euros on the disposal of Mercure S.r.l., a vehicle company to which Enel Produzione had previously transferred the Valle del Mercure biomass plant in Italy, and 50 million euros in respect of the payment provided for in the agreement reached by e-distribuzione with F2i and 2i Rete Gas for the early all-inclusive settlement of the second indemnity related to the sale in 2009 of edistribuzione's stake in Enel Rete Gas. Extraordinary items in revenues for the first nine months of 2018 included 128 million euros related to the above agreement reached by edistribuzione with F2i and 2i Rete Gas.

EBITDA and ORDINARY EBITDA

The following table reports EBITDA by business line:

EBITDA (millions of euros)	9M 2019	9M 2018	Change
Thermal Generation and Trading	1,241	814	52.5%
Enel Green Power	3,304	3,328	-0.7%
Infrastructure and Networks	6,148	5,658	8.7%
End-user markets	2,367	2,265	4.5%
Enel X	107	89	20.2%
Services	134	115	16.5%

Other, eliminations and adjustments	(92)	(135)	31.9%
TOTAL	13,209	12,134	8.9%

The following table reports ordinary EBITDA by business line:

Ordinary EBITDA (millions of euros)	9M 2019	9M 2018	Change
Thermal Generation and Trading	1,350	814	65.8%
Enel Green Power	3,304	3,328	-0.7%
Infrastructure and Networks	6,098	5,530	10.3%
End-user markets	2,367	2,265	4.5%
Enel X	107	89	20.2%
Services	134	115	16.5%
Other, eliminations and adjustments	(92)	(135)	31.9%
TOTAL	13,268	12,006	10.5%

Ordinary EBITDA amounted to 13,268 million euros, an increase of 1,262 million euros compared with the first nine months of 2018 (+10.5%).

Extraordinary items in the first nine months of 2019 that impacted EBITDA include: (i) the gain on the disposal of Mercure S.r.l., net of charges for the restoration of the plant site in the amount of 14 million euros; (ii) the writedown of fuel, materials and spare part inventories used in the operation of a number of coal-fired plants in Italy and Spain for a total of 203 million euros; and (iii) 50 million euros related to the payment provided for in the agreement reached by e-distribuzione with F2i and 2i Rete Gas for the early all-inclusive settlement of the second indemnity connected with the sale in 2009 of e-distribuzione's stake in Enel Rete Gas.

In the same period of the previous year, extraordinary items included 128 million euros related to the above agreement reached by e-distribuzione with F2i and 2i Rete Gas.

The increase in ordinary EBITDA is mainly attributable to:

• the increase of 568 million euros posted by Infrastructure and Networks, mainly attributable to distribution activities in Latin America, notably the contribution of Enel Distribuição São Paulo (227 million euros) and the improvement in the regulatory and tariff framework in Brazil, for the Rio and Goiás operations, as well as in in Argentina due to the aforementioned agreement between Edesur and the local government;
• the increase of 536 million euros posted by Thermal Generation and Trading, mainly related to activities in Spain, Latin America and Italy. More specifically, (i) in Spain, the increase was mainly due to the increase in nuclear generation and the positive effects of the suspension of certain taxes on conventional generation; (ii) in Latin America, the performance is attributable to the improvement in the margins posted by the Fortaleza plant in Brazil (88 million euros) and the recognition of an indemnity for the early withdrawal from an electricity supply contract in Chile (80 million euros);
• the increase in the margin registered by End-user markets (102 million euros), mainly due to the acquisition of Enel Distribuição São Paulo (57 million euros) and growth of the free market in Italy (97 million euros), whose effects were only partly offset by the contraction registered in the regulated

market (57 million euros);

• the increase of 18 million euros posted by Enel X, reflecting the recognition in the first half of 2019 of the income (58 million euros) from the adjustment of the price for the acquisition of eMotorwerks in 2017;
• a decline of 24 million euros posted by Enel Green Power, reflecting the negative impact of the changes in the scope of consolidation in the two periods being compared (151 million euros), partly offset by the indemnity received following the early withdrawal of a major customers from an electricity supply contract in Chile (80 million euros) and the increase in margins due to the application of higher average prices despite declining sales volumes.

The above changes also reflected a decrease of 188 million euros in payments for leases and rentals, as following the application of IFRS 16, these payments are included under leased property, plant and equipment as rights of use and depreciated over the term of the associated leases.

EBIT

The following table reports EBIT by business line:

EBIT (millions of euros)	9M 2019	9M 2018	Change
Thermal Generation and Trading	(3,670)	(6)	-
Enel Green Power	2,388	2,497	-4.4%
Infrastructure and Networks	3,961	3,627	9.2%
End-user markets	1,630	1,395	16.8%
Enel X	(4)	25	-
Services	10	48	-79.2%
Other, eliminations and adjustments	(116)	(148)	21.6%
TOTAL	4,199	7,438	-43.5%

EBIT for the first nine months of 2019 amounted to 4,199 million euros, declining by 3,239 million euros (-43.5%) compared with the same period of 2018. More specifically, the improvement in EBITDA was more than offset by the increase in depreciation, amortisation and impairment losses, which include the impairment recognised in the first nine months of 2019 on a number of coal-fired plants in Italy, Spain, Chile and Russia, which totalled 4,002 million euros.

In the first half of 2019, in Chile two plants were written down by 364 million euros, following an agreement with the Chilean government for their early closure, while in Russia, as a result of the state of progress of negotiations for sale of the coal-fired Reftinskaya plant, the power station was classified under assets held for sale at June 30th, 2019 and its carrying amount (125 million euros) was adjusted to take account of the sale price. In Spain, during the third quarter of 2019, the deterioration in the local operating environment due to developments in commodity prices and the operation of the CO² emissions market compromised the competitiveness of coal-fired plants. In Italy, in addition to a scenario deterioration, the change of remuneration rules on the Capacity Market narrowed the future scope of participation for plants with higher CO² emissions, providing for the exclusion of the coal-fired technology

from Italy's electricity market. For these reasons, the carrying amounts of certain coal-fired plants in Italy and Spain, including the associated dismantling costs, were written down by a total of 3,513 million euros.

The change in EBIT also includes the depreciation charges on rights of use over leased assets, which as from January 1st, 2019 are recognised as leased property, plant and equipment and depreciated over the term of the associated leases in application of IFRS 16 (169 million euros).

GROUP NET INCOME and GROUP NET ORDINARY INCOME

	9M 2019	9M 2018	Change
Group net income	813	3,016	(2,203)	-73.0%
Indemnity from disposal of e-distribuzione's interest in Enel Rete Gas	(49)	(128)	79	61.7%
Disposal of Enel Produzione interest in Mercure	(97)	-	(97)	-
Writedown of assets related to Slovak Power Holding BV	52	-	52	-
Writedown of fuel and spare parts inventories of a number of coal-fired plants in Italy and in Spain	138	-	138	-
Writedown of a number of coal-fired plants in Italy	1,396	-	1,396	-
Writedown of a number of coal-fired plants in Spain	832	-	832	-
Writedown of a number of coal-fired plants in Chile	154	-	154	-
Writedown of Reftinskaya coal-fired plant in Russia	56	-	56	-
Group net ordinary income	3,295	2,888	407	14.1%

In the first nine months of 2019, Group net ordinary income amounted to 3,295 million euros, compared with 2,888 million euros in the same period of the previous year, an increase of 407 million euros (+14.1%). The increase was mainly attributable to better results from the ordinary operating performance, partly offset by:

• ‒ higher financial expenses by around 100 million euros, mainly attributable to the discounting of non-current liabilities, including employee benefits in Spain and Latin America as well as provisions for risks and charges. Financial expenses on debt were broadly unchanged, as the increase in interests due to the rise in average debt in the period was offset by the benefits obtained through the issue of new bonds at more favourable rates and an increase in financial income. The change also reflects the impact of the application of IRFS 16;
• ‒ a decrease of 106 million euros in income from the joint ventures in the United States, mainly reflecting the effects of the repurchase of a number of companies from the EGPNA REP joint venture;
• ‒ an increase in income attributable to minorities due to the higher contribution of Latin American companies to Group results.

FINANCIAL POSITION

The financial position shows net capital employed at September 30th, 2019 of 94,336 million euros (88,941 million euros at December 31st, 2018). It was funded by equity pertaining to shareholders of the

Parent Company and non-controlling interests of 47,831 million euros (47,852 million euros at December 31st, 2018) and net financial debt of 46,505 million euros (41,089 million euros at December 31st, 2018).

Net financial debt increased by 5,416 million euros (+13.2%) as a result of: (i) investments for the period, (ii) the initial application of IFRS 16, which led to the recognition of a financial liability of 1,370 million euros, (iii) the acquisition of a number of companies from EGPNA REP, which, in addition to a total payment of 225 million euros, included the consolidation of the debt of the companies acquired in the amount of 638 million euros, (iv) adverse exchange rate developments for 1,121 million euros and, (v) the payment of dividends totalling 3,887 million euros.

The higher debt was partly offset by the positive cash flows generated by operations (7,671 million euros), as well as the disposal of a number of Enel Green Power companies in Brazil and by Thermal Generation in Italy, for a total of 493 million euros.

At September 30th, 2019, the debt/equity ratio was 0.97 (0.86 at December 31st, 2018).

CAPITAL EXPENDITURE

Capital expenditure (millions of euros)	9M 2019	9M 2018	Change
Thermal Generation and Trading	498	395	26.1%
Enel Green Power	2,894	1,779	62.7%
Infrastructure and Networks	2,643	2,552	3.6%
End-user markets	299	248	20.6%
Enel X	171	118	44.9%
Services	61	47	29.8%
Other, eliminations and adjustments	23	20	15.0%

The following table reports capital expenditure by business line:

1) The figure for the first nine months of 2019 does not include 4 million euros related to units classified as "held for sale" (378 million euros at September 30th, 2018).

TOTAL ¹ 6,589 5,159 27.7%

Capital expenditure amounted to 6,589 million euros in the first nine months of 2019, an increase of 1,430 million euros over the same period of 2018 (+27.7%). This increase is mainly attributable to greater interventions in distribution grids in Italy and Brazil as well as to the construction of renewables plants, specifically in Spain, Brazil, South Africa, Greece, and Russia.

2) Financial highlights of the Parent Company at September 30th , 2019

Parent Company Enel, in its capacity as holding company, sets the strategic objectives for the Group and coordinates the activities of its subsidiaries. The activities that Enel performs in respect of the other Group companies as part of its management and coordination role include holding company functions (coordination of governance processes).

Within the Group, Enel also directly performs the role of central treasury, ensuring access to the money and capital markets, and provides coverage of insurance risks.

Million euros	First nine months
	2019	2018	Change
Revenues	81	23	252.2%
EBITDA	(90)	(151)	40.4%
EBIT Net financial expenses and income from equity investments	(190)	(163)	-16.6%
	2,281	2,513	-9.2%
Net income for the period	2,152	2,424	-11.2%
Net financial debt	18,870*	15,490**	21.8%

* As of September 30th

, 2019 ** As of December 31st , 2018

Revenues, which mainly relate to services rendered to the subsidiaries as part of the management and coordination function performed by the Parent Company, amounted to 81 million euros in the first nine months of 2019, an increase of 58 million euros over the same period of 2018. This increase is mainly attributable to higher revenues from the provision of management and technical services, which last year had been impacted by negative adjustments connected with prior periods.

EBITDA was a negative 90 million euros, an improvement of 61 million euros on the first nine months of 2018, mainly attributable to the increase in revenues from services rendered.

EBIT, including depreciation, amortisation and impairment losses of 100 million euros, was a negative 190 million euros, a deterioration of 27 million euros compared with the first nine months of 2018.

Net financial expenses and income from equity investments in the first nine months of 2019 were a positive 2,281 million euros overall. This figure includes dividends received from subsidiaries, associates and other entities worth 2,664 million euros (2,863 million euros in the first nine months of 2018) and net financial expenses of 383 million euros (350 million euros in the first nine months of 2018). The latter increased by 33 million euros compared with September 30th, 2018, mainly attributable to higher net financial expenses on derivatives and adverse exchange rate developments, partly offset by a decrease in interest expenses on loans.

Net income for the first nine months of 2019 amounted to 2,152 million euros, compared with 2,424 million euros in the same period of 2018. The decrease of 272 million euros is mainly due to the deterioration in the performance of finance operations.

Net financial debt at September 30th, 2019 was 18,870 million euros, an increase of 3,380 million euros over the end-2018 figure, the result of an increase in short-term debt of 1,142 million euros and an increase in net long-term debt of 2,238 million euros.

*****

OPERATIONAL HIGHLIGHTS FOR THE FIRST NINE MONTHS OF 2019

	9M 2019	9M 2018	Change
Electricity sales (TWh)	228.7	219.7	+4.1%
Gas sales (billions of m3 )	7.6	8.0	-5.0%
Electricity generated (TWh)	174.3	187.8	-7.2%
Electricity distributed (TWh)	378.3	360.61	+4.9%
Employees (no.)	68,374	69,2722	-1.3%

1) The figure for 2018 was restated in 2019.

2) At December 31st, 2018.

Electricity and gas sales

• Electricity sales in the first nine months of 2019 amounted to 228.7 TWh, an increase of 9 TWh (+4.1%) on the same period of 2018. This reflects:
  • ‒ an increase in quantities sold in South America (+15 TWh), mainly in Brazil (+16 TWh);
  • ‒ a decrease in sales in Italy (-4.5 TWh), Spain (-1 TWh) and Romania (-0.5 TWh).
• Natural gas sales amounted to 7.6 billion cubic metres, a slight decrease on 2018.

Electricity generated

Net electricity generated by the Enel Group in the first nine months of 2019 amounted to 174.3 TWh¹ , a decrease of 13.5 TWh over the same period of 2018 (-7.2%), mainly attributable to a decline in generation in Italy and Spain.

More specifically, the period saw:

‒ a decrease in thermal generation (-10.9 TWh), mainly due to a reduction in coal-fired generation (-15.5 TWh) in Italy and Spain;

¹ 182 TWh including the output of around 4 GW of managed renewable capacity.

• ‒ an increase in nuclear generation (+1.8 TWh);
• ‒ a decline in renewable generation (-2.6 TWh, composed of: -4.4 TWh from hydropower and +2.6 TWh from wind), mainly attributable to lower water availability, only partly offset by the increase in installed renewable capacity.

Generation mix of Enel Group plants

Zero-emissions generation accounted for 53% of Enel Group's total generation considering only output from consolidated capacity. It came to 55% if managed generation capacity² is included. Decarbonisation of the generation mix by 2050 remains the long-term objective of the Enel Group.

Electricity distributed

• Electricity transported on the Enel Group distribution network in the first nine months of 2019 amounted to 378.3 TWh, of which 169.4 TWh in Italy and 208.9 TWh abroad.
• The volume of electricity distributed in Italy decreased by 1 TWh (-0.6%) compared to the same period of 2018:
  • ‒ with a slight deterioration compared with electricity demand on the national power grid (-0.1%). The percentage change in demand on the national market amounted to -1% in the North, -0.4% in the Centre, +2.7% in the South and +1% in the Islands. The South and the Islands are mainly served by e-distribuzione; in the Centre and North, other major operators account for a total of about 15% of volumes distributed.

² Capacity not consolidated by the Enel Group but managed under the "Build, Sell and Operate" model.

Electricity distributed outside of Italy amounted to 208.9 TWh, an increase of 18.8 TWh (+10%) on the same period of 2018, with most of the increase coming in Brazil (+19 TWh).

EMPLOYEES

At September 30th, 2019, Enel Group employees numbered 68,374 (69,272 at December 31st, 2018). The change in the period (-898) reflected the negative balance of new hires and terminations (-952) and the change in the scope of consolidation (+54) due to the acquisition in March 2019 of Tradewind in the United States, which more than offset the impact of the disposal of the Valle del Mercure biomass plant in Italy.

*****

OUTLOOK

The solid results recorded in the first nine months of 2019 underscore the effectiveness of the strategy outlined in Enel Group's 2019-2021 Plan. The period under exam was characterised by the strong performance in distribution, driven by investments in grid digitalisation, while concerning renewables the conditions were laid for a further acceleration that will result in even faster development from next year onwards. The performance posted in the first nine months of the year places the Enel Group in line with the financial targets envisaged in its Plan.

For the remainder of 2019, consistent with the Plan's industrial targets, Enel expects:

• an acceleration in the entry into service of renewable plants, particularly in North America, in line with the objectives that the Group has set itself for additional capacity;
• the continued digitalisation of the distribution grid and customer services, especially in Italy;
• additional benefits from operating efficiencies, mainly related to conventional generation, networks and retail operations;
• benefits linked to the customer focus strategy, including through the innovative businesses of Enel X.

Consolidated ordinary EBITDA for 2019 is expected to total around 17.8 billion euros, exceeding the Plan's target which was equal to approximately 17.4 billion euros. The target for consolidated net ordinary income is confirmed at around 4.8 billion euros.

2019 INTERIM DIVIDEND

The 2019-2021 Strategic Plan, whose guidelines were presented to the financial community in November 2018, retains the measures to optimise shareholder return, including the reintroduction, as from 2016 results, of the payment of an interim dividend. Dividends are due to be paid in two instalments each year, in January as an interim dividend and in July as the balance.

*****

Bearing this in mind and the fact that in the first nine months of 2019 the Parent Company posted net income for the period of 2,152 million euros, the Board of Directors, taking due account of likely

developments in operations in the final quarter of the year, has approved the distribution of an interim dividend of 0.16 euros per share. That interim dividend, gross of any withholding tax, will be paid as from January 22 nd, 2020, with an ex-dividend date for coupon no. 31 of January 20 th, 2020 and a record date of January 21 st, 2020. In line with legislation in force, treasury shares in Enel's portfolio at record date will not be accounted for in the interim dividend.

The amount of the interim dividend is consistent with the dividend policy contained in the 2019-2021 Strategic Plan, which provides for the payment of a total dividend on 2019 net income equal to the highest between 0.32 euros per share and 70% of the Enel Group's net ordinary income.

The opinion of the audit firm EY S.p.A. provided for under Article 2433-bis of the Italian Civil Code was issued today.

RECENT EVENTS

August 26th , 2019: Enel Green Power S.p.A. ("EGP") announced that its subsidiary Enel Green Power Chile had begun the construction of the 382 photovoltaic plant Campos del Sol in the Atacama Region. The project is expected to involve a total investment of around 320 million US dollars. Campos del Sol is expected to start operations by the end of 2020 and it is estimated that it will generate around 1,160 GWh per year, avoiding the emission of more than 900,000 tons of CO² into the atmosphere.

September 3 rd , 2019: Enel announced the successful completion of the capital increase of its Chilean subsidiary Enel Américas S.A. ("Enel Américas") for a total of 3 billion US dollars, offered in pre-emption to its shareholders and resolved by the Extraordinary Shareholders' Meeting of that company on April 30 th, 2019. Taking account of the newly issued shares that were subscribed during the first and the second pre-emptive offering period, the overall capital increase has been subscribed at 99.49%. During the second period of the offer, Enel subscribed 294,771,295 newly issued shares, for a total of about 47.7 million US dollars, which, in addition to the amount paid during the first period of the preemptive offer, involved an overall commitment of approximately 1.77 billion US dollars. Following the transaction, Enel had increased its shareholding in Enel Américas to 57.19% from the previous 56.8%. The two share swap transactions entered into by Enel on June 28th, 2019 with a financial institution to acquire, on dates that are expected to occur no later than the end of the third quarter of 2020, additional shares of Enel Américas' common stock and American Depositary Shares remain in place following completion of the capital increase.

September 6th , 2019: – Enel announced that its Dutch subsidiary Enel Finance International N.V. ("EFI") had launched a single-tranche "sustainable" bond for institutional investors on the US and international markets totalling 1.5 billion US dollars, equivalent to about 1.4 billion euros. The issue, which is guaranteed by Enel, was oversubscribed by almost three times, with total orders of approximately 4 billion US dollars and the significant participation of Socially Responsible Investors ("SRI"), allowing the Enel Group to continue to diversify its investor base. This bond issue, the first of its kind and intended to meet the Company's ordinary financing needs, is linked to the Enel Group's ability to achieve, by December 31st, 2021, an installed renewable capacity (on a consolidated basis) equal to or greater than 55% of total consolidated installed capacity. The achievement of that target (as of June 30th, 2019, the figure was already equal to 45.9%) will be certified by a specific assurance report issued by the auditor engaged for this purpose. The transaction is structured as a single tranche issue of 1.5 billion US dollars paying a rate of 2.650% maturing September 10th, 2024. The issue price was set at 99.879% and the effective yield at maturity is equal to 2.676%. The interest rate will remain unchanged to maturity subject to achievement of the sustainability target indicated above as of December 31st, 2021. If that target is not

achieved, a step-up mechanism will be applied, increasing the rate by 25 basis points starting from the first interest period subsequent to the publication of the assurance report of the auditor.

September 19th , 2019: Enel announced that the Board of Directors of the Company, implementing the authorisation granted by the Shareholders' Meeting held on May 16th, 2019 and in compliance with the relevant terms already announced to the market, had approved the launch of a share buyback programme, for a maximum amount of 10.5 million euros and for a number of shares not exceeding 2.5 million (the "Programme"), equivalent to approximately 0.02% of Enel's share capital. The purpose of the Programme is to serve the Long-Term Incentive Plan 2019 reserved to the management of Enel and/or of its subsidiaries pursuant to Article 2359 of the Italian Civil Code, which was also approved by the Shareholders' Meeting of May 16th, 2019. To implement the Programme, which will run from September 23rd to December 13th, 2019, Enel appointed an authorised intermediary who makes decisions on purchases, also in relation to their timing, in full independence, and in compliance with daily price and volume limits consistent with both the authorisation granted by the Shareholders' Meeting held on May 16th, 2019 and the provisions of Article 5 of Regulation (EU) No. 596/2014 on market abuse and Article 3 of Delegated Regulation (EU) 2016/1052. The purchases are made on the MTA, to ensure equal treatment among shareholders, pursuant to Article 144-bis, paragraph 1, letter b), of Consob Regulation No. 11971/1999, and in accordance with the provisions of the aforementioned Regulation (EU) No. 596/2014 on market abuse and with Article 3 of Delegated Regulation (EU) 2016/1052.

In accordance with the procedures and time limits provided for in Article 2 of Delegated Regulation (EU) 2016/1052, Enel has announced the purchases made by the intermediary in weekly notices to Consob and investors. Specifically, as announced on November 12th , Enel holds at November 8th, 2019 n. 1,163,832 treasury shares, equal to 0.011448% of the share capital.

September 27th , 2019: Enel announced that its Spanish subsidiary Endesa SA ("Endesa") had informed the market that its Board of Directors had decided to promote the interruption of generation by the coalfired plants owned by Endesa in the Iberian Peninsula and to assess future options for the related sites, in compliance with the procedures set out in current regulations. This decision was taken in light of the significant and structural changes in certain factors in 2019, notably commodity prices and the operation of the CO² emissions market, which negatively impacted the competitiveness of the above coal-fired plants, making the possibility of operating them in the electricity market in the future highly unlikely. The net book value of the plants involved amounts to approximately 1.5 billion euros at the Enel Group level, including the related dismantling costs. Endesa also announced that this decision of the Board of Directors could entail the recognition of impairment on the assets involved in an amount of up to the net book value reported above. The above initiative is in line with the Enel Group's goal to fully decarbonise its generation mix by 2050.

October 1st , 2019: Enel, following its June 6th , June 20th and July 23rd press releases, announced that, as of October 1st, 2019, the ownership of Reftinskaya GRES coal-fired power plant has been transferred from its subsidiary Enel Russia PJSC ("Enel Russia") to JSC Kuzbassenergo ("Kuzbassenergo"), owned by Siberian Generating Company. The transfer was completed following the federal registration of ownership transfer for the immovable property of Reftinskaya GRES, as set forth in the sale-purchase agreement between Enel Russia and Kuzbassenergo, which took effect once Russia's Federal Antimonopoly Service approved the transaction on July 31st, 2019. With respect to the overall consideration of the transaction, amounting to 20.7 billion roubles following contractually agreed price adjustments, as of October 1st, 2019 Enel Russia had received the first two instalments for a total of 16.7 billion roubles. The remainder of the consideration will be paid when Kuzbassenergo obtains all the licenses and permits necessary to operate the plant and in any case by October 1st, 2020. Until that time, Enel Russia will continue to operate Reftinskaya GRES under a lease agreement approved by Russia's Federal Antimonopoly Service. A contingent component of up to 3 billion roubles is also envisaged, to be paid within five years from October 1st, 2019 subject to specific conditions.

October 10th , 2019: Enel announced that its Dutch subsidiary EFI had launched a multi-tranche "sustainable" bond for institutional investors on the European market totalling 2.5 billion euros. It is expected to be listed on the Irish Stock Exchange. The bond is linked to the achievement of the United Nations Sustainable Development Goals (SDGs) and is the Group's first "General Purpose SDG Linked Bond" issued on the European market.

The bond, which is guaranteed by Enel, was almost four times oversubscribed, with total orders of about 10 billion euros and the significant participation by Socially Responsible Investors (SRIs), enabling the Enel Group to continue to diversify its investor base.

This bond issue, which will be used to meet the Enel Group's ordinary financial requirements, is linked to the Group's ability to achieve the following Sustainable Development Goals: (i) SDG 7 "Affordable and clean energy", through the achievement, by December 31st, 2021, of a percentage of installed renewable generation capacity (on a consolidated basis) equal to or greater than 55% of total consolidated installed capacity. As of June 30th, 2019, the figure was already equal to 45.9% and (ii) SDG 13 "Climate action", through the achievement of a level of greenhouse gas emissions by 2030 equal to or less than 125 g of CO² per kWh (in 2018 this figure was already equal to 369 g of CO² per kWh), in line with the commitment to reduce Enel's direct greenhouse gas emissions per kWh by 70% by 2030 compared to the 2017 values, as certified by the Science Based Targets initiative (SBTi) and consistent with the Paris Agreement on climate change.

The issue is structured in the following tranches:

• a) 1,000 million euros at a fixed rate of 0.00%, maturing June 17th, 2024 and linked to SDG 7 "Affordable and clean energy";
• b) 1,000 million euros at a fixed rate of 0.375%, maturing June 17th, 2027 and linked to SDG 7 "Affordable and clean energy";
• c) 500 million euros at a fixed rate of 1.125%, maturing October 17th, 2034 and linked to SDG 13 "Climate action".

If these sustainable development targets are not achieved by December 31st, 2021 for cases a) and b) and by December 31st, 2030 for case c), a step-up mechanism will be applied, increasing the rate for each of the three tranches by 25 basis points in accordance with the associated terms and conditions.

More information on these events is available in the associated press releases published in the Enel website at the following address: https://www.enel.com/media/allpressreleases

NOTES

At 18:00 CET of today, November 12th, 2019, a conference call will be held to present the results for the first nine months of 2019 to financial analysts and institutional investors. Journalists are also invited to listen in on the call. Documentation relating to the conference call will be available on Enel's website (www.enel.com) in the Investor section from the beginning of the call.

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Tables reporting the condensed income statement, statement of comprehensive income, condensed balance sheet and condensed cash flow statement for the Enel Group are attached below. A descriptive summary of alternative performance indicators is also attached.

The officer responsible for the preparation of the corporate financial reports, Alberto De Paoli, certifies, pursuant to Article 154-bis, paragraph 2, of the Consolidated Law on Financial Intermediation, that the accounting information contained in this press release corresponds with that contained in the accounting documentation, books and records.

ACCOUNTING STANDARDS AND CHANGES IN SCOPE OF CONSOLIDATION

As from January 1st, 2019, the new IFRS 16 "Leases", endorsed by the European Union with Regulation (EU) 2017/1986 of October 31st, 2017, was applied for the first time.

At first-time adoption, the Enel Group elected to use the modified retrospective approach, as permitted by the standard, which involved the restatement of a number of balance sheet items at January 1st, 2019. The impact on the balance sheet was as follows:

• an increase of 1,370 million euros in property, plant and equipment and intangible assets;
• an increase of 1,311 million euros in long-term borrowings;
• an increase of 59 million euros in short-term borrowings and current portion of long-term borrowings.

The impact on the income statement, gross of tax effects, was as follows:

• a decrease of 188 million euros in costs for services, leases and rentals;
• an increase of 169 million euros in depreciation;
• an increase of 42 million euros in financial expense.

Unless otherwise specified, the balance sheet figures at September 30th, 2019 exclude assets and liabilities held for sale of the Reftinskaya GRES plant following the agreement between Enel Russia and JSC "Kuzbassenergo", which on the basis of the state of progress of negotiations for its sale fall within the scope of IFRS 5.

The representation of performance by business area presented here is based on the approach used by management in monitoring Group performance for the two periods under review, taking account of the operational model adopted by the Group.

With regard to operating segment disclosures, please note that as of this reporting date (September 30th , 2019), and including the comparative figures, the Enel Group has modified its primary and secondary segments in accordance with the provisions of IFRS 8. Specifically, bearing in mind that in 2019, management, understood as the highest level of operational decision-making for the purpose of adopting decisions on the resources to be allocated to the sector and for measuring and assessing results, has begun to disclose its results to the market on the basis of business areas, the Group has consequently adopted the following segment approach:

• primary sector: business area; and
• secondary sector: geographical area

The business area is therefore the prime discriminant and is the predominant focus of the analyses performed and decisions taken by the management of the Enel Group. This is fully consistent with the internal reporting prepared for these purposes since the results are measured and evaluated primarily for each business area and only subsequently are broken down by country.

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KEY PERFORMANCE INDICATORS

This press release uses a number of "alternative performance indicators" not envisaged in the IFRS-EU accounting standards but which management feel can facilitate the assessment and monitoring of the Group's performance and financial position. 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 basis of calculation of these indicators are as follows:

• EBITDA: an indicator of Enel's operating performance, calculated as "EBIT" plus "Depreciation, amortisation and impairment losses";
• Ordinary EBITDA: is calculated by excluding from EBITDA all items associated with nonrecurring transactions such as acquisitions or disposals of companies (for example, capital gains and losses), with the exception of those registered in the renewable energy development sector under the "Build, Sell Operate" approach initiated in the fourth quarter of 2016, in which the proceeds of disposals (or any repurchases) of projects represent the result of ordinary activities for the Group.
• Net financial debt: an indicator of the Enel financial structure, determined by:
  • "Long-term borrowings" and "Short-term borrowings and the current portion of long-term borrowings", taking account of "Short-term financial payables" included in "Other current liabilities";
  • net of "Cash and cash equivalents";
  • net of "Current portion of long-term financial receivables", "Factoring receivables", "Cash collateral" and "Other financial receivables" included in "Other current financial assets";
  • net of "Securities" and "Other financial receivables" included in "Other non-current financial assets".

More generally, the net financial debt of the Enel Group is calculated in conformity with paragraph 127 of Recommendation CESR/05-054b implementing Regulation (EC) no. 809/2004 and in line with the CONSOB instructions of July 26th , 2007, for the definition of the net financial position net of financial receivables and long-term securities.

• Net capital employed: calculated as the algebraic sum of "Net non-current assets",³ "Net current assets"⁴ and "Provisions for risks and charges", "Deferred tax liabilities", "Deferred tax assets" and "Net assets held for sale";⁵
• Group net ordinary income: defined as that part of "Group net income" generated from ordinary business operations. It is equal to "Group net income" excluding all non-recurring transactions discussed under "Ordinary EBITDA", significant impairment losses and reversals of such losses recognised on assets (including equity-accounted investments and financial assets) following impairment testing as well as the associated tax effects and non-controlling interests.

³ Determined as the difference between "Non-current assets" and "Non-current liabilities" with the exception of: 1) "Deferred tax assets"; 2) "Securities", "Financial investments in funds or portfolio management products measured at fair value through profit or loss" and "Other financial receivables" included in "Other non-current financial assets"; 3) "Long-term borrowings"; 4) "Employee benefits"; 5) "Provisions for risks and charges (non-current portion)"; and 6) "Deferred tax liabilities".

⁴ Defined as the difference between "Current assets" and "Current liabilities" with the exception of: 1) "Current portion of long-term financial receivables", "Factoring receivables", "Securities", "Cash collateral" and "Other short-term financial receivables" included in "Other current financial assets"; 2) "Cash and cash equivalents"; 3) "Short-term borrowings" and the "Current portion of long-term borrowings"; 4) "Provisions for risks and charges (current portion)"; and 5) "Other financial payables" included in "Other current liabilities".

⁵ Determined as the difference between "Assets held for sale" and "Liabilities held for sale".

Condensed Consolidated Income Statement

Millions of euro	First nine months
	2019	2018
Total revenue	57,124	55,246
Total costs	53,043	48,010
Net income/(expense) from commodity contracts measured at fair value	118	202
Operating income	4,199	7,438
Financial income	3,023	2,694
Financial expense	5,024	4,566
Net income/(expense) from hyperinflation	96	100
Total financial income/(expense)	(1,905)	(1,772)
Share of gains/(losses) from equity investments accounted for using the equity method	(104)	54
Income before taxes	2,190	5,720
Income taxes	647	1,686
Income from continuing operations	1,543	4,034
Net income from discontinued operations	-	-
Net income for the period (shareholders of the Parent Company and non controlling interests)	1,543	4,034
Attributable to shareholders of the Parent Company	813	3,016
Attributable to non-controlling interests	730	1,018
Basic earnings/(loss) per share attributable to shareholders of the Parent Company (euro) (1)	0.08	0.30

(1) Diluted earnings/(loss) per share are equal to basic earnings/(loss) per share.

Statement of Consolidated Comprehensive Income

Millions of euro	First nine months
	2019	2018
Net income for the period	1,543	4,034
Other comprehensive income recyclable to profit or loss (net of taxes):
- Effective portion of change in the fair value of cash flow hedges	(145)	(50)
Change in fair value of hedging costs	(33)	(40)
Share of the other comprehensive income of equity investments accounted for using the equity method	(40)	6
Change in the fair value of financial assets at FVOCI	10	(3)
Change in translation reserve	(108)	(1,164)
Other comprehensive income not recyclable to profit or loss (net of taxes):
Remeasurements in net liabilities (assets) for defined benefits	(176)	-
Change in fair value of equity investments in other entities	-	1
Other comprehensive income/(loss) for the period	(492)	(1,250)
Comprehensive income for the period	1,051	2,784
Attributable to:
- shareholders of the Parent Company	537	2,257
- non-controlling interests	514	527

Condensed Consolidated Balance Sheet

Millions of euro

	at Sep. 30, 2019	at Dec. 31, 2018
ASSETS
Non-current assets
- Property, plant and equipment and intangible assets	97,383	95,780
- Goodwill	14,297	14,273
- Equity investments accounted for using the equity method	1,990	2,099
- Other non-current assets (1)	20,240	16,697
Total non-current assets	133,910	128,849
Current assets
- Inventories	2,885	2,818
- Trade receivables	13,274	13,587
- Cash and cash equivalents	6,753	6,630
- Other current assets (2)	12,836	12,852
Total current assets	35,748	35,887
Assets held for sale	302	688
TOTAL ASSETS	169,960	165,424
LIABILITIES AND SHAREHOLDERS' EQUITY
- Equity attributable to the shareholders of the Parent Company	30,869	31,720
- Non-controlling interests	16,962	16,132
Total shareholders'equity	47,831	47,852
Non-current liabilities
- Long-term borrowings	52,531	48,983
- Provisions and deferred tax liabilities	17,429	17,018
- Other non-current liabilities	13,108	10,816
Total non-current liabilities	83,068	76,817
Current liabilities
- Short-term borrowings and current portion of long-term borrowings	8,706	6,983
- Trade payables	11,252	13,387
- Other current liabilities	19,099	19,978
Total current liabilities	39,057	40,348
Liabilities held for sale	4	407

TOTAL LIABILITIES	122,129	117,572
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	169,960	165,424

(1) Of which long-term financial receivables and other securities at September 30, 2019 for €2,705 million (€2,912 million at December 31, 2018) and €420 million (€360 million at December 31, 2018), respectively.

(2) Of which current portion of long-term financial receivables, short-term financial receivables and other securities at September 30, 2019 for €1,922 million (€1,522 million at December 31, 2018), €2,932 million (€3,418 million at December 31, 2018) and €43 million (€63 million at December 31, 2018), respectively.

Condensed Consolidated Statement of Cash Flows

Milioni di euro	First nine months
	2019	2018
Income before taxes	2,190	5,720
Adjustments for:
Net impairment losses /(reversals) trade receivables and other receivables	721	776
Depreciation, amortization and impairment losses	8,289	3,920
Financial (income)/expense	1,905	1,772
Net income from equity investments accounting for using the equity method	104	(54)
Changes in net working capital:
- Inventories	(81)	(509)
- Trade receivables	(482)	637
- Trade payables	(2,129)	(1,519)
- Contract assets and contract liabilities	(57)	-
- Other assets and liabilities	882	(184)
Interest and other financial expense and income paid and received	(1,957)	(1,919)
Other changes	(1,714)	(1,520)
Cash flows from operating activities (a)	7,671	7,120
Investments in property, plant and equipment and in intangible assets	(6,593)	(5,537)
Investments in entities (or business units) less cash and cash equivalents acquired	(250)	(1,465)
Disposals of entities (or business unit) less cash and cash equivalents sold	493	264
(Increase)/Decrease in other investing activities	(10)	(217)
Cash flows from investing/disinvesting activities (b)	(6,360)	(6,955)
New issues of long-term financial debt	5,618	12,170
Repayments and other changes in net financial debt	(3,565)	(4,828)
Receipts/(Outlays) for transactions in non-controlling interest	628	(1,413)
Sale/(Purchase) treasury shares	(1)	-
Dividends and interim dividends paid	(3,887)	(3,371)
Cash flows from financing activities (c)	(1,207)	2,558
Impact of exchange rate fluctuations on cash and cash equivalents (d)	(22)	(176)
Increase/(Decrease) in cash and cash equivalents (a+b+c+d)	82	2,547
Cash and cash equivalents at beginning of the period (1)	6,714	7,121
Cash and cash equivalents at the end of the period (2)	6,796	9,668

(1) O f which cash and cash equivalents equal to €6,630 million at January 1, 2019 (€7,021 million at January 1, 2018), short-term securities equal to €63 million at January 1, 2019 (€69 million at January 1, 2018) and cash and cash equivalents pertaining to "Assets held for sale" in the amount of €21 million at January 1, 2019 (€31 million at January 1, 2018).

(2) O f which cash and cash equivalents equal to €6,753 million at September 30, 2018 (€9,598 million at September 30, 2018), shortterm securities equal to €43 million at September 30, 2019 (€62 million at September 30, 2018) and cash and cash equivalents pertaining to "Assets held for sale" in the amount of €8 million at September 30, 2018.

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