Like-for-like EBITDA reached €4,392 million, down 18%.
- For Endesa, 2023 was a business year impacted by extraordinary circumstances, especially in the gas business and of a regulatory nature, which all led to a 60% decrease in net ordinary income to €951. In reported terms (consolidated net profit), the figure stands at €742 million.
- In comparable terms, gross operating income (EBITDA) was €4,392 million, a decrease of 18%. Reported EBITDA, which includes extraordinary impacts on the gas business and provisions for digitalisation, fell by 32% to €3,777 million.
- There was solid cash generation during the year as a result of the positive management of regulatory working capital (pending reimbursements from regulatory balances to the company by public administrations), which raised cash flow at the end of 2023 to €4,697 million.
- During the year, Endesa added 600 megawatts (MW) of new renewable capacity, reaching 9,900MW. Including nuclear, 78% of Endesa's mainland installed capacity is free of CO2 emissions. 80% of production in the Iberian Peninsula was also free of emissions, seven percent more than in 2022.
- Endesa closed its last coal-fired power plant on the mainland, in As Pontes, and made progress in the implementation of the first two fair transition processes in the Iberian Peninsula: Andorra (Teruel) in Spain and Pego (Abrantes region) in Portugal.
- The positive commercial evolution continues, with the volume of electricity customers in the free market growing to 6.9 million. This brings the total number of customers to 10.5 million.
- The network of charging stations totalled 19,300 at the end of the year, an increase of 39% year-on-year.
- Investment during the year amounted to €2,304 million which is in line with the previous year when the company broke its historical record, 72% of which was allocated to the distribution network and renewable energies.
The 2023 business year was within the context of progressive normalisation of the energy market as a result of a decrease of 64% in the average price for gas (TTF index) and consequently a decrease of 48% in the average price in the Iberian electricity pool to €87/MWh. The year also ended with a decline in demand of 2.1% in adjusted terms, which further highlights the need to match the development of renewable energies with policies to electrify the economy. In addition to this operational context, 2023 also featured totally extraordinary effects that had an impact on the company, especially in the gas business and of a regulatory nature, including the effects of the price reduction (clawback) and the 1.2% tax on deregulated revenues.
Regarding the main economic figures, EBITDA (gross operating profit) in comparable terms reached €4,392 million, 18% lower than the high result recorded in 2022, mainly due to the gas business. Reported EBITDA decreased by 32% to €3,777 million, since in 2023 the comparison included a negative impact resulting from the retroactive payment of €450 million corresponding to an arbitration award on the gas supply contract, and the registration of a provision of €165 million for digitalisation, while in 2022 there was an adjustment for the positive impact of the sale of the electric mobility business to the parent company Enel.
Ordinary net profit, which serves as the basis for the distribution of dividends, stood at 951 million, a decrease of 60%. This development can be explained by the lower EBITDA, higher depreciation and amortisation, and impairment losses, and an increase in financial costs which were also affected by a negative financial update of provisions. In reported terms, income decreased by 70% to €742 million, a year-on-year comparison that was also affected by the extraordinary results achieved in 2022 in the gas business.
A positive development was the cash flow at the end of the year, with an increase of €3,000 million compared to the end of 2022 and totalling €4,700 million. This was decisively influenced by the management of regulatory working capital (regulatory balances owed to the company by public administrations), especially that related to Endesa's non-mainland business (Balearic Islands, Canary Islands, Ceuta and Melilla).
Grid and renewables, purpose of investment
Endesa has invested €2,304 million in 2023, with a slight decrease of 2% compared to the previous year – 2022 marked Endesa's all-time investment record. The distribution network has absorbed 38% of the total. Metrics that measure supply quality performance have shown clear improvement: Equivalent Interruption Time (that measures interruption time) was 49 minutes (five minutes less). Network losses also fell below 10% (9.6%).
The second business to be allocated the most investment was renewables, 34%. The new clean capacity added in the year is 600MW, bringing the total hydroelectric, wind and solar production capacity to 9,900MW. Thanks to this, and to nuclear generation, emission-free production in the peninsula reached 80% of the total, seven points more than at the end of 2022. In addition, the environmental processing of the renewable projects associated with the first, and only, fair transition processes in the Iberian Peninsula in Andorra (Teruel) and Pego (Portugal) continues.
In conventional generation, which was allocated a further 15% of annual investment, the main feature was the final closure of As Pontes, Endesa's last mainland coal-fired power plant and the largest of its kind in Spain. This meant that at the end of the reporting period, 78% of all the company's power installed in mainland Spain was free of CO2 emissions.
The company is also moving forward with the sale of a minority stake in its portfolio of photovoltaic projects in operation, and is currently in the final phase of the process.
The business of retailing electricity, gas and value-added services was allocated 12% of last year's investment. The total volume of electricity customers in the free market in Spain and Portugal grew to 6.9 million, in a year marked by a tightening of competitive conditions in which Endesa's proposal to protect customers from volatility has borne fruit. In this regard, fixed-price electricity sales to domestic and business customers increased to 53 TWh, two more than in 2022. Approximately 75% of these fixed-price sales were supplied from Endesa's emission-free production (nuclear, hydroelectric and regulated renewable energy).
Endesa has already sold 95% of its own production for 2024, about 85% for 2025 and 50% for 2026, which puts the company in a favourable situation in the current context with regard to the progressive normalisation of wholesale prices.
Electric vehicle charging stations increased by 39% to total 19,300, whilst there was an almost 5-times increase in the capacity of new self-consumption installations installed by Endesa for customers during the year to total 184MW.
In the gas business, in which 2022 had been an exceptional year, 2023 saw the margin affected by lower demand for consumption in combined cycle plants, lower consumption by industrial and residential customers, as well as by the impact of the arbitration decision regarding a price difference with a supplier of liquefied natural gas which was already spoken about at the last "Capital Markets Day" in November.
José Bogas, Chief Executive Officer, said about the 2023 business year:
"Following 2023 which was affected by extraordinary circumstances, we anticipate a return to growth for the current year based on the normalisation of market conditions. In particular, we are confident of a normalisation of margins in the gas and conventional generation business. We also expect a very limited impact from the current price environment as a result of our strategy for selling our own production in advance. For all these reasons, we reconfirm the objectives announced at the last Capital Markets Day: To achieve an EBITDA of between €4,900-5,200 million, which would represent an increase of between 11% and 18%; and to increase ordinary net profit by between 60% and 70%, to fall within the range of €1,600-1,700 million."
Financial performance
A deeper analysis of operating profit shows that there was a 19% decrease in EBITDA from deregulated businesses (generation and retailing) on a comparable basis as a result of the lower margin for conventional generation following an exceptional 2022. This circumstance was partially offset by an improved performance with regard to the renewable generation margin and a good performance in the commercial business area, following a 2022 in which it was affected by the impact from severe volatility.
EBITDA for the regulated distribution business improved to €1,757 million due to the absence of negative adjustments in the previous year
The company's net debt decreased to €10,400 million, €500 million less than a year earlier. A reduction that was based on a strong cash flow, which made it possible to compensate for the significant investment made and the payment of dividends. Gross debt decreased by 26% to €13,700 million as a result of a notable 82% decrease in collateral over the year.
The average cost of debt stands at 3.2%, reflecting the rapid and sharp rise in interest rates. The leverage ratio (net debt to EBITDA in comparable terms) stood at 2.4 times, up from 2 times at the end of 2022.
Financial indicators
| (millions of euros) | FY 2023 | 9M 2022 | Change (%) |
|---|---|---|---|
| Revenue | 25,459 | 24,620 | -22.6% |
| EBITDA | 3,777 | 5,565 | -32.1% |
| EBITDA (Like for Like) | 4,392 | 5,327 | -17.6% |
| EBIT | 1,645 | 3,687 | -55.4% |
|
Net income |
742 | 2,541 | -70.8% |
| Ordinary net profit | 951 | 2,398 | -60.3% |
| Operating cash flow | 4.697 | 1,672 | +180.9% |
| Net financial debt | 10,405 | 10,869 | -4.3% |
| Gross investments | 2,304 | 2,343 | -1.7% |
* Data as at 31 Dec 2022
Operational dimensions
| FY 2023 | FY 2022 | Change (%) | |
|---|---|---|---|
| Net installed capacity (MW) | 21,247 | 20,044 | -3.6% |
| Net renewable capacity | 9,899 | 9,293 | +6.5% |
| Renewable capacity % share | 47% | 42% | |
| Output (MW) | 60,264 | 64,716 | -6.9% |
| Renewable production | 14,212 | 12,041 | +18% |
| Renewable production % share | 23.58% | 18.61% | |
| Net electricity sales (GWh) (1) | 77,688 | 79,003 | -1.7% |
| Regulated market | 7,515 | 8,210 | -8.5% |
| Deregulated market | 70,173 | 70,793 | -0.9% |
| Number electricity customers (thousands) | 10,522 | 10,545 | -0.2% |
| Regulated market | 3,629 | 3,716 | -2.3% |
| Deregulated market | 6,893 | 6,829 | +0.9% |
| Electricity distributed (GWh) | 136,363 | 131,813 | +3.5% |
| Gas sales (GWh) (2) | 64,880 | 63,756 | +1.8% |
| Number of gas customers (thousands) | 1,829 | 1,799 | 1.7% |
| Regulated market | 442 | 313 | +41.2% |
| Deregulated market | 1,387 | 1,486 | -6.7% |
| Public and private charging stations | 19,252 | 13,898 | +38.5% |
(1) Net sales to end client.
(2) Excluding own generation consumption.
(3) Data as at 31 Dec 2022
About Endesa
Endesa is a leading electricity company in Spain and the second largest in Portugal. The company is also the second largest gas operator in the Spanish market. Endesa operates an end-to-end electricity generation, distribution and marketing business. Through Endesa X it also offers value-added services aimed at the electrification of energy usage in homes, companies, industries and Public Administrations, including electric mobility, where it is one of the main operators of charging points in Spain. Endesa is firmly committed to the United Nations SDGs and strongly supports the development of renewable energies through Enel Green Power España, the digitalisation of grids through e-distribución and Corporate Social Responsibility (CSR). The Endesa Foundation is also active in CSR. Our workforce numbers around 9,000 employees. Endesa is a division of Enel, the largest electricity group in Europe.