The 2017-2019 Strategic Plan, presented in November 2016, introduces digitization and customer focus alongside the key pillars of the previous plan, accelerating the creation of value for all stakeholders. In particular, the Group’s 2017-2019 Strategic Plan focuses on the following issues.
- Digitization: investment of €4.7 billion to digitalize Group assets, operations and processes and enhance connectivity, with the objective of generating a cumulative increase in EBITDA of €1.6 billion between 2017 and 2019.
- Customer focus: improve customer service to preserve and expand Enel’s most important asset, its customer base of more than 60 million end users, with the objective of generating €3 billion of EBITDA in 2019.
- Operational efficiency: savings target of €1 billion in 2019 compared with 2016, an increase of €500 million over the previous plan, mainly through a reduction in operating costs supported by digitization.
- Industrial growth: strongly focused on networks and renewables. In the latter segment, Enel plans to introduce a less capital-intensive business model called “BSO” (“Build, Sell and Operate”).
- Group simplification: rationalization of the structure at the Country level in all of the areas in which the Group operates, especially in Latin America and in renewables.
- Active portfolio management: an increase to €8 billion from the previous €6 billion in the objective for asset rotation, with a three-year rolling target. The plan also provides for the option of activation of a share buyback program of up to €2 billion, which will be presented to Enel’s annual Shareholders’ Meeting on May 4, 2017.
- Shareholder remuneration: an increase in the pay-out to 65% of consolidated net ordinary income for 2017, compared with 60%, and to 70% of consolidated net ordinary income for 2018 and 2019, compared with 65%. A minimum dividend of €0.21 per share out of 2017 net income.
In 2017 Enel plans:
- to launch investments in digitization, with the start of the installation of second generation smart meters in Italy, and progress in installation in the Iberian Peninsula. We will also accelerate the roll-out of the fiber optic network undertaken by OpEn Fiber;
- to implement the first contributions to the customer focus strategy on a global scale, with the start of investment in the back office and customer experience platforms, and, in particular in Italy, with the conclusion of the Tutela Simile system and the planned liberalization of the market in 2018;
- to continue the progress achieved in operational efficiency, supported by digitization, which provides for a cash cost target of €11.2 billion;
- to continue industrial growth, focused on networks and renewables, with an EBITDA growth target of €1.4 billion;
- to launch the second phase of corporate simplification at the individual Country level in Latin America in order to increase efficiency and Enel’s economic interest;
- to achieve additional progress in active portfolio management, which in the 1st Half of 2017 envisages acquisitions totaling €1.2 billion and an increase in the economic interest in two Romanian companies of €0.4 billion.
Based on the key pillars outlined above, the following table sets out the performance and financial targets on which the Group’s 2017-2019 Strategic Plan is founded.
|Recurring EBITDA||billions of euros||~15.5||~16.2||~17.2||~+5%|
|Net ordinary income||billions of euros||~3.6||~4.1||~4.7||~+14%|
|FFO/Net financial debt||%||26||27||30||~+5 p.p.|