Enel Russia Capital Markets Day - Strategic Plan 2021-23
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Enel Russia Capital Markets Day Strategic Plan 2021-23
Agenda
Stephane Zweguintzow 2020 Delivery & 2021-23 Pillars
General Manager
Key financial data
Yulia Matyushova 2021-23
Chief Financial Officer Strategic plan
Earnings & targets
Stephane Zweguintzow Closing remarks
2
2020 Delivery & 2021-23 Pillars
2020 Delivery & 2021-23 Pillars
Main drivers & events of 2020: delivery on strategic
pillars
Strategic pillars 2020 delivery
- Effect of COVID-related restrictions and complications on
projects timeline
Transformation towards - Active construction at Azov and Kola windfarms
sustainable generation profile - Reftinskaya GRES disposal completed: power plant
transferred & final fixed payment received
- Successful actions against COVID with almost no impact
on efficiency of day-to-day work process
Focus on development of gas - Continued work on modernization with the first project to be
power plants commissioned in 2022 (TG4 NGRES)
- Persistent activities on improving the parameters of existing
assets (SP8 CCGT NGRES upgrade)
Operational efficiency - Continued fixed costs decrease following RGRES disposal
- Rub 3 Bn dividend distributed during 2020
Shareholder remuneration - Fixed dividend approach updated for the transformation
phase
4
2020 financial targets affected by external factors¹
2020 Delivery & 2021-23 Pillars
EBITDA (RUB bn) Net ordinary income (RUB bn)
-12% -26%
15.3
11.2 7.5
9.9
6.2
4.6
2019 2020E 2019 2020E
2020 2020 Adverse effect of lower power demand and prices
Target Estimate
1. Financial data as per Enel Internal accounting standards (IAS) hereinafter unless otherwise stated; Audited IFRS results for 2019 5
2020 Delivery & 2021-23 Pillars
Key directions of Strategic Plan 2021-23
Finalization of Execution of Dedicated focus on Shareholder
renewable projects modernization project financial profile remuneration
362 MW wind
Timely Fixed dividend
projects under Financial
performance of approach
execution despite sustainability
activities related updated,
“force majeure” supports
to replacement distribution of
resulting in 39% industrial
& upgrade of RUB 3 Bn shifted
EBITDA from RES repositioning
facilities from 2021 to 2023
in 2023
Participation in new tenders on case-by-case basis 2021 is a “pivotal year” for the Company
6
2020 Delivery & 2021-23 Pillars
Gradual increase of installed capacity:
lower carbon and more efficient technologies
Evolution of installed capacity (GW) Net Power Output (TWh)
5.6 5.9 18.6 18.4 18.7
0.1 0.2 0.3 18.0 0.2 0.4 0.9
Renewable
12.7 12.9 12.5 12.0
4.8 4.8 Conventional gas
CCGT
5.3 5.5 5.6 5.8
0.8 0.8
2020 2021 2022 2023 …onwards 2020E 2021 2022 2023
+90 MW +201 MW +71 MW
Azov Wind Farm Kola Wind Farm Rodnikovski Wind Farm
+40 MW
SGRES modernization
Company will continue following the path of technology profile diversification as one of its strategic pillars
7
2020 Delivery & 2021-23 Pillars
Main directions of development
EBITDA outlook by technology
2020E 2021 20221 20231
0%
0% 12% 5% 4%
9.9 7.5 34% 10.6 12.4
RUB bn RUB bn RUB bn 39% RUB bn
61% 57%
100% 88%
Strategic plan for 2021-2023 is based on updated assumptions on macro & market outlook in a “new normality”
1
8
Total contribution of the modernized unit to EBITDA
2020 Delivery & 2021-23 Pillars
Renewables: impact of pandemics
Challenges caused by pandemics Effect on renewable projects
Cause Effect Azov Kola Rodnikovski
COVID-19 cases on the temporary interruptions
construction site of works
impact on the entire issues with supply / delivery
manufacturing chain of several main components
travel restrictions to enter issues with arrival of foreign
Russian territory from abroad specialist and supervisors
In January 2021 the Supervisory Board of the Market Council recognized the situation on Azov project as force
majeure, opening the opportunity not to pay fines from Dec. 2020 to Mar. 2021 in accordance with the DPM terms
9
2020 Delivery & 2021-23 Pillars
Renewables: virtual site visits
Azov Kola
Powerplant completed and fully energized Significant progress on ground
infrastructure and equipment assembly
https://youtu.be/lITxn0KLuMg
102020 Delivery & 2021-23 Pillars
Renewables: on path towards commissioning
Status of project Azov Kola Rodnikovski
2021 2022 2024
Design and contracting completed completed in process
HV T-line 50 km out of 50 km 56 pylons out of 262
Medium Voltage collector system 15 km out of 15 km 6 km out of 88 To start after design and
Main elements
contracting
Internal Roads 16 km out of 16 km 4,5 km out of 58
WTGs foundations 26 units out of 26 17 units out of 57
To start after design and
Manufacturing of main wind 100% towers
completed contracting
turbine components ~66% WTG parts
Construction
Wind turbine installation works 26 WTGs out of 26 0 WTGs out of 57 To start after design and
High Voltage Substation completed in process contracting
Power Plant full Energization completed To start after construction To start after construction
DPM eligibility confirmation in process To start after construction To start after construction
Final hot commissioning Finalization of preparatory
Active construction stage
in process works
112020 Delivery & 2021-23 Pillars
Modernization: execution on track
Status of project NGRES T4 + boiler NGRES T3 boiler SGRES T7 SGRES T6 + boiler
2022 2025 2025 2025
Design and contracting all contracts in process main contracts main contracts
in process in process
Main elements
Engineering >80% completed in process
Turbine production completed in process in process
to start after in process
Boiler production completed
contract signing
Installation
Dismantling works ~90% completed after engineering and after engineering and after engineering and
Installation works production production production
in process
DPM eligibility confirmation after construction after construction after construction after construction
https://youtu.be/pyIibcaXG58 Construction in Preparatory works ongoing
process 122020 Delivery & 2021-23 Pillars
Dividend distribution time shifting
Previous dividend distribution timeline1 New dividend distribution timeline1
5.2 RUB bn
65% NOI2
3 RUB bn 3 RUB bn 3 RUB bn 3 RUB bn 3 RUB bn 3 RUB bn
0 RUB bn
2020
2020E 2021 2022 2020
2020E 2021 2022 2023
Considering the period of strategic repositioning in 2021, the anticipated RUB 3 Bn dividend is shifted to 2023,
offering increased return after renewable and modernization projects start being launched one-by-one.
1 Cash flow basis 13
2 Planned Net ordinary income for 20222021-23 Strategic plan
Updated assumptions in a “new normality”
2021-23 Strategic plan
Consumer price index (CPI) Average EUR/RUB exchange rate
84.4 84.7 84.8
2021-23 new plan 81.7
4.1% 4.0% 2020-22 old plan
4.0% 3.9%
3.7% 3.6% 72.9 72.5 71.7
3.5%
2020E 2021 2022 2023 2020E 2021 2022 2023
Installed capacity vs. Electricity demand Electricity price change by region of presence
(European Russia and Urals)
Center South Urals Cumulated
1.4% 1.4% 1.4% 2016-2020
7% 7%
6% Center +7%
6% South +0%
0.3% 0.4% 3% 2%
-0.5% 1% 0% Urals +3%
-0.8%
0% -4% Gas +16%
-1%-1% 0%
CPI +22%
Installed capacity, % change -7%
Electricity demand, % change
-5.1% -8%
2020E 2021 2022 2023 2016 2017 2018 2019 2020
152021-23 Strategic plan
Substantial improvement of margins until the end of
business plan period
Electricity spreads (RUB/MWh) Margin by segment (RUB bn)
500 1 800
1 504
1 376 1 600 CAGR 7%
1 400 21.0
1 057 1 200
19.2
1 000 Average gas 17.8 1.5
300
800 spread¹ 1.5
600 Renewables: 1.9 14.8 4.3
181 183
170 400 Electiricty price 3.4
107
0.1
200 1.5 0.1
100 0 0.8
7.3
2020E 2021 2022 2023
11.4
11.0
Capacity prices (Th RUB/MW/month) 9.5
1500 7.1
1 237 1 255 1 280
1300
Regulated 2.9 3.2 3.7
1100 1.5
300
236 900 "Old" units (KOM) 2020E 2021 2022 2023
190 700 Modernization
180 2 Electricity Capacity: thermal (KOM+RD)
500 (DPM)
150 162 Renewables Capacity: CCGT/Modernization Capacity: renewables (DPM)
142 169
154 300 (DPM)
149 Heat and other operating income
126
100 100
2020E 2021 2022 2023 Low risk margin
(capacity)/Total 74% 78% 77%
1. Calculated as average Day-ahead market price minus Average unit gas cost 16
2. For modernization only OPEX is compensated during the first year2021-23 Strategic plan
Continued improvements in operational efficiencies
Cost evolution (RUB bn) Further operational efficiencies in 2021 to smooth drop
in margin and speed up the recovery from 2022
CAGR 0.2%1 Continued programs of performance optimization &
digitalization:
8.5 8.6
8.0 ▪ Implementation of system of predictive analysis and
7.9
1.6 1.6 integration between systems for technical KPIs
1.5 1.3 ▪ Economies from remote work mode on overheads
▪ Introduction of new ERP system for more efficient
2.6 2.9 3.0 3.1 management process
▪ Upgrade of internal electronic document
management system for workflow optimization
3.8 3.8 3.9 3.9 Personnel costs management and continued
improvement in processes across functions
2020E 2021 2022 2023
Operation & Maintenance Personnel Overhead and other
17
1 Net of one-off effects in 2020, keeping same Company’s perimeter (e.g. renewables excluded)Stable EBITDA growth following a «pivotal year»
2021-23 Strategic plan
in 2021
EBITDA (RUB bn) Net ordinary income (RUB bn)
CAGR 29%
CAGR 15%
12.4
9.9 10.6
7.5 4.6 3.9
3.0 3.3
2020E 2021 2022 2023 2020E 2021 2022 2023
0% % of Ebitda from
39%
Renewables
182021-23 Strategic plan
Continued investment into strategic projects
alongside with focus on operational improvements
Gross capex (RUB bn)¹ Asset development capex (RUB bn) After FX hedging
addressed
RUB ~95%
-7% 23%
Renewables 22.6
EUR ~5%
39.4 29.5
36.7 Modernization
6.9
and other
77%
32.3 29.5
Asset management capex (RUB bn)
7.1 7.2
Operational
9% 5.1
2020-22 2021-23 21% improvements
Asset management Asset development Safety and
7.2 1.5
other
70% Environment 0.6
19
1. Capex numbers refer to Construction capex accrued2021-23 Strategic plan
Cash flow: effects of new external & internal context
2020 cash flow (RUB bn) Cumulated cash flow 2021-23 (RUB bn)
8.2 42.2
36.7
17.0 16.6 16.6 28.5
4.5 5.0
9.2
Net debt Operational CAPEX Net debt
31/12/2019 & Financial 31/12/2020 Net debt Operating CF Financial CF CAPEX Dividends Net debt
1
CF 31/12/2020 and delta 31/12/2023
NWC
Significant CAPEX needs during the 2021-23 investment cycle require financing from external sources
20
1. Including dividends distributed2021-23 Strategic plan
Leverage increase following the investment cycle
Net debt evolution (RUB bn) Long term credit ratings
+RUB 25.6 bn
Rating Outlook
42.2 Moody’s Ba3 Stable
36.5
30.5 Fitch BB+ Stable
16.6 Expert RA ruAA Stable
2020E 2021 2022 2023
Net
debt/EBITDA 1.7 4.1 3.4 3.4
21Earnings and targets
Earnings and targets
2020-2023
Earnings 2020E 2021 2022 2023 CAGR
EBITDA (RUB bn) ~9.9 ~7.5 ~10.6 12.4 +7.7%
Net ordinary income (RUB bn) ~4.6 ~3.0 3.3 3.9 -
Shareholder remuneration 2020 2021 2021 2022
Dividend distributed during the year
3.0 - 3.0 ~5.2
(RUB bn)
Dividend per share (RUB/sh) 0.085 - 0.085 0.146
22Closing remarks
ESG¹ Risk Rating evolution
Closing remarks
ESG Risk Rating Management score ESG Ranking of Russian companies 2021
The lower, the better The higher, the better as of 15.02.2021
28.3
28,3 24,5 25.7
25,7 68.2
68,2
24.5 58.2
58,2 66,4
66.4
2017 2018 2019 2017 2018 2019
New rating was based on 2019 Annual report under GRI
Standard²
Reftinskaya GRES was still included in rating perimeter (for 9 Fourth place among 80 leading Russian companies in terms of
months of 2019). Next rating will consider exit from coal overall ESG performance
Main driver for the ESG rating impact was modification of Leading position in the “Social” category, highlighting our efforts
methodology with higher weights on resource usage in work with all our stakeholders
1. Environmental, social, governance 24
2. Global Reporting InitiativeClosing remarks
Closing remarks
Renewables projects are on path towards commissioning
despite COVID-related challenges
Modernization projects’ execution is on track with first project to
be commissioned in 2022
Fixed dividend timeline, with
distribution of RUB 3 Bn shifted from 2021 to 2023
Leverage to remain on moderate levels
252021-23 Annexes
Scenario and assumptions
Main assumptions of the Strategic Plan
• Increase in line with CPI.
Regulated • NGRES increase in 2021 vs 2020 is higher than CPI due to applying of economically
justified tariff after the end of post must-run period
• Price fixed for 2021-24 as per auction results with annual indexation by “CPI minus 0.1%”
“Old” units
• Auction for 2022-24 implied an additional price curves increase by 15%-0%-5% for 2022-
/ KOM
2023-2024 vs. 2021 level
Capacity price
Modernization From 2022: modernization tariff for 50 MW at Nevinnomysskaya GRES (OpEx is compensated
program during the first year)
“New” units
2021: end of DPM for two CCGT units; switch to KOM price
/ thermal DPM
Renewables • Azov WPP (90 MW) commissioning by end-May 2021
DPM • Kola WPP (201 MW) commissioning by end-April 2022
Regulated Increase following fuel costs
Electricity price
Day ahead • 2021: rebound of DAM prices during the year following 2020 figures affected by COVID
market • 2022-2023: gradual increase mostly in line with the gas price growth
Fuel (gas) price Increase following Ministry of Economy forecast
272021-23 Sustainability plan
2021-2023 Targets
Our sustainable business model drives change
OUR GOAL
SUSTAINABLE LONG-TERM
VALUE CREATION
STRATEGIC PILLARS
OUR CONTRIBUTION
TO SDG
circular economy, innovation & digitalization, GROWTH ACCELERATORS
financial value creation
292021-2023 Targets Identify Develop Climate
climate climate TCFD reporting
risks strategy reporting partial
verification
Enel Russia Sustainability Plan 2021-23
2021-2023
Decarbonization 2021- 2023 Targets & Activities SDG
PLAN
362
Renewable capacity installed (MW)
DECARBO-
NIZATION
0
2020 2023
438
CO2 emissions intensity (g/kWh) 402
CENTRICITY
PEOPLE
2020 2023
NEW Climate risks assessment & TCFD
Climate strategy & climate risks
AND GROWTH
reporting
BACKBONES
ACCELERAT.
ESG
NEW New goal Redefined goal Target affected by COVID-19 Impact on ESG Rating score
30
302021-2023 Targets
Enel Russia Sustainability Plan 2021-23
2021-2023
People development 2021- 2023 Targets SDG Talent retention 2021- 2023 Targets SDG
PLAN
90
60 100 100
Multiskilling (% of O&M Climate survey (% of eligible 84 96
personnel) and % of redemptions)
2020 2023
2020 2023
DECARBO-
NIZATION
40
Cross functional development Performance appraisal 100 100
(% high-potential young 0 (% of involved and % of 99 99
people) 2020 2023 appraised) 2020 2023
49,5
42
48
Training hours (per High-potential employees in 20
employee/year)
CENTRICITY
training programs (%)
PEOPLE
2020 2023
2020 2023
43
Internal mentors among 3-year individual career path 15
10
managers (% of involved) for high potential employees 0
2020 2023 (%) 2020 2023
AND GROWTH
BACKBONES
ACCELERAT.
ESG
NEW New goal Redefined goal Target affected by COVID-19 Impact on ESG Rating score
31
312021-2023 Targets
Enel Russia Sustainability Plan 2021-23
2021-2023
Diversity & Inclusion 2021- 2023 Targets SDG Engaging the local communities 2021- 2023 Targets SDG
PLAN
50 75
Women recruitment (% in 46 SDG-linked support to 38,8
short list of candidates) communities (k beneficiaries)
2020 2023 2020 2023
DECARBO-
NIZATION
23 30
Women in top management 20 Employees involved in
2
(%) corporate volunteering (%)
2020 2023 2020 2023
35
Sustainability knowledge 7
CENTRICITY
dissemination (hours/year)
PEOPLE
2020 2023
Set up a program for social Develop &
5
NEW entrepreneurship support launch
(grants/year) 2020 2023
AND GROWTH
BACKBONES
ACCELERAT.
4
Increase employees participation in Develop a
concept &
NEW Community support & development
ESG
launch
program (n of projects/year) 2020 2023
NEW New goal Redefined goal Target affected by COVID-19 Impact on ESG Rating score
32
322021-2023 Targets
Enel Russia Sustainability Plan 2021-23
NEW
2021-2023
Environmental Management 2021- 2023 Targets SDG Health & Safety 2021- 2023 Targets/Activities SDG
PLAN
307,8
295,5
Fuel consumption reduction • Reduction of injury frequency rates
LTIFR reduction
(g/kWh) compared to prior years (LTIFR)
2020 2023
DECARBO-
• Growing the culture, awareness and
NIZATION
Reduction of specific water 0,267 commitment of employees and
0,234 Safety culture contractors with respect to health and
requirements (m3kWh)
2020 2023 safety issues
297,8
Zero plastics campaign (kg 98,8
CENTRICITY
of single-use plastic)
PEOPLE
2020 2023
AND GROWTH
BACKBONES
ACCELERAT.
ESG
NEW New goal Redefined goal Target affected by COVID-19 Impact on ESG Rating score
33
332021-2023 Targets
Enel Russia Sustainability Plan 2021-23
2021-2023
Sustainable Supply Chain 2021- 2023 Targets SDG Sound Governance NEW 2021- 2023 Targets/Activities SDG
PLAN
▪ Re-launch Human Rights policy
Qualified suppliers assessed for 100
▪ Training for employees
health and safety aspects for all 0 Human rights ▪ Bridge management gaps following Human
product groups (% qualified suppliers) 2020 2023 Right Due Diligence study
▪ Evaluation of the control procedures
DECARBO-
NIZATION
Qualified suppliers assessed for 100 ▪ Evaluation of the internal control system &
environmental aspects for all product 0
Enel Global
development of corrective and preventive
groups (% qualified suppliers) 2020 2023
Compliance Program actions
▪ Training for employees
Qualified suppliers assessed in
100 ▪ Post-certification external and internal audits
relation to aspects of human rights or Integrated under ISO 37001 Anti Bribery Certification
0
business ethics for all product groups Management System ▪ Update of the corruption risk assessments
(% qualified suppliers)
CENTRICITY
2020 2023
development ▪ Communication campaign and training
▪ ISO 500001 on NGRES and SUGRES
PEOPLE
Continuous increase in coverage rate 80
of tenders with K of sustainability ▪ Election of 4 and more independent directors to
(% of tenders with K of 0 the BoD
sustainability/total tenders) 2020 2023 Corporate ▪ Independent evaluation of BoD performance
governance ▪ Be among Top-5 companies listed in 1st
quotation list on MSE for compliance with
Corporate Governance Code
AND GROWTH
BACKBONES
ACCELERAT.
▪ Increase quality of GRI disclosure
Non-financial ▪ Report on climate strategy & risks
ESG
reporting ▪ TCFD-reporting
▪ Non-financial disclosure verification
NEW New goal Redefined goal Target affected by COVID-19 Impact on ESG Rating score
34
342021-2023 Targets
Enel Russia Sustainability Plan 2021-23
2021- 2023
2021-2023
Circularilty NEW 2021- 2023 Targets/Activities SDG Innovation & Digitalization NEW SDG
Targets/Activities
PLAN
14
Resources use (paper, ▪ Reduce paper consumption by 20% and
Circular economy initiatives 6
waste by 10%
(projects per year) energy) & waste in ▪ Reduce electricity consumption due to use
2020 2023 office facilities of cloud-based data centers
DECARBO-
NIZATION
Embed principles of circular ▪ Definition and application, in 72
NEW
economy in construction and collaboration with various Digital skills training 70
company areas, of circular
operation of PPs (% of involved)
economy solutions 2020 2023
▪ Integrating communication services and
Financial value creation* NEW
2021- 2023 Targets/Activities developing digital initiatives that contribute
Digitalization to lower
CENTRICITY
to the reduction of carbon dioxide
CO2 emissions (video communications, shared
PEOPLE
platforms, instant messaging)
Targets will be equal to those presented in Strategic plan for 2021-2023*
AND GROWTH
BACKBONES
ACCELERAT.
ESG
NEW New goal Redefined goal Target affected by COVID-19 Impact on ESG Rating score
35
35Disclaimer
This presentation contains certain statements that reflect the Company’s management’s current views with respect to future
events and financial and operational performance of the Company. These forward-looking statements are based on Enel
Russia’s current expectations and projections about the future events. Because these forward-looking statements are subject
to risks and uncertainties, actual future results or performance may differ materially from those expressed in or implied by
these statements due to any number of different factors, many of which are beyond the ability of Enel Russia to control or
estimate precisely, including changes in the regulatory environment, future market developments, fluctuations in the price and
availability of fuel and other risks. You are cautioned not to place undue reliance on the forward-looking statements contained
herein, which are made only as of the date of this presentation. Enel Russia does not undertake any obligation to publicly
release any updates or revisions to any forward-looking statements to reflect events or circumstances after the date of this
presentation. The information contained in this presentation does not purport to be comprehensive and has not been
independently verified by any independent third party.
This presentation does not constitute a recommendation regarding the securities of the Company. This presentation does not
contain an offer to sell or a solicitation of any offer to buy any securities issued by Enel Russia.
36Contact us
Channels
Website Mobile App
Enelrussia.ru Enel Investors
Ilya Kalinin
Investor Relations
Email ilya.kalinin@enel.com Follow us
Phone +7 495 539 31 31 ext. 7843
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