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2018 Results

  • GRI
    

The effectiveness of the integrated business model and ability of the strategy to deliver in operational terms enabled the Group, also in 2018, to seize opportunities and tackle new challenges of the energy transition, in an increasingly volatile, complex market environment. With over 3 GW of new renewable capacity6, Enel Green Power has established a new industry record and made a name for itself as the Group’s engine for growth, together with the distribution business, which has increased the number of Enel customers connected to the grid to 73 million, due to the acquisition of Eletropaulo in Brazil. The sustainable business model continues to represent the foundations for the Group’s global presence, as reflected by the progress made in achieving SDGs.

sustainability plan the pillars

Financial results have been extremely robust: ordinary EBITDA was equal to 16.2 million euros, up by 4% over 2017, and ordinary net profit equaled 4.1 billion euros, up by 9%. The Board proposed to the Shareholders’ Meeting, convened for May 16, 2019, the distribution of a 0.28 euros per share dividend.

Growth investments amounted to 8.5 billion euros6. Investment in asset development amounted to 4.7 billion euros, 61% devoted to renewable energies, mainly in North, Central and South America, and 34% to the digitalization of the distribution network. With a renewable capacity of over 43 GW7 and an overall installed capacity of approximately 90 GW7, Enel is the largest private operator in renewable energies at global level, making further progress towards a zero-emission generation portfolio, in line with our commitment by the United Nations made in September 2015 (SDG 13) to decarbonize by 2050. During 2018, 51%8 of the Group’s generation was zero-emission and specific CO2 emissions were equal to 0.356 kg/kWheq 8. In this regard, the Sustainability Report this year includes a section on the commitment to taking on board the recommendations of the Task force on Climate-related Financial Disclosure (TCFD) of the Financial Stability Board (see the chapter “Growth across low-carbon technologies and services”).

Significant progress was made in the development of high-quality, reliable and resilient infrastructure, and more sustainable cities, in line with SDG 9 and SDG 11. Approximately 44 million smart meters have been installed, including 5.1 million new-generation smart meters installed in Italy.

The Enel X strategy on electric mobility continued, through the development and installation of charging stations: at the end of 2018, 49,000 stations were installed.

The focus on demand response (6.2 GW) and storage capacity (3 MW per year) continued.

Strategic actions are being taken to promote a more extensive shared value through initiatives with communities involved in Enel’s operations and investing in training initiatives to promote Enel people skills development.

The Group also continued its focus on creating shared value with the communities where it operates, improving living conditions and energy availability.

Important results were achieved regarding commitments relative to the United Nations’ SDGs:

  • projects were supported to ensure an inclusive and equitable quality education, in which 1 million beneficiaries were involved (SDG 4);
  • progress was made in providing access to affordable, reliable, sustainable and modern energy for 6.3 million beneficiaries, of whom 3.3 in Latin America, Africa and Asia (SDG 7);
  • sustained, inclusive and sustainable economic growth was promoted, with projects involving 1.8 million beneficiaries (SDG 8).

The year saw the involvement and participation of the over 69,000 people who work for the Company.

In the performance appraisal process, 99% of people took part in the appraisal phase, while, in the climate survey, over 86% of people were involved. Enel continued to pursue its commitment to enhancing diversity in all its forms, including gender, age, culture and ability. In particular, in line with the defined trajectory, selection selection processes included 39% women. To speed up the entire Company’s digital transformation, a change management and digital skills dissemination program was launched, with the aim of reaching 100% of the company population from as early on as 2020. A new flexible organizational culture has made it possible to put people at the center, involving them and empowering them in order to create value in a collaborative and effective way.

In the field of health and safety, Enel has continued its commitment to increasingly efficient standards and the development of new tools and operating methods.

In 2018, the total injuries frequency rate confirmed the trend of falling rates in previous years, with a figure of 0.90 injuries per million hours worked, down by 14% compared to 2017. In particular, the frequency rate for Enel people stood at 0.94 (-21% compared to 2017) and for contractors’ at 0.87 (-10% compared to 2017), confirming the effectiveness of the Group’s safety strategy and policies.

The process to adopt the Enel Global Compliance Program in Argentina, Mexico, Peru and Spain, was completed, in compliance with local laws. The program aims to strengthen the ethical and professional commitment to preventing illegal activities committed abroad that could result in corporate criminal liability and reputational risks.

The adoption of action plans, as the output of human rights due diligence, continued, with 67% of all scheduled actions carried out. The Board of Directors continued to monitor the adoption of the diversity policy, ensuring it was complied with in full.

In the context of environmental sustainability, specific SO2 and NOx emissions were equal to 0.73 and 0,69 g/kWheq9 respectively, down by 11% and 10% over the previous year, while the reduction in dust was even more considerable, down by 37%, and amounting to 0,69 g/kWheq9. Specific water needs amounted to 0,38 l/kWheq, down by 14% over 2017.

As for cyber security, Enel’s CERT (Cyber Emergency Readiness Team) was accredited by 8 national CERTs (Italy, Romania, Spain, Argentina, Chile, Peru, Colombia and Brazil) and in 2018, approximately 500 systematic audit activities (“Ethical Hacking”, “Vulnerability Assessment”, etc.) were conducted on the protection level reached by IT and industrial systems and applications.

In addition, coverage of web applications posted on the Internet with advanced cyber security application solutions reached 89%. The applications were selected through a careful prioritizing process.

For further details on 2018 results, see the section “Sustainable value created” and in particular the dashboards at the start of each chapter.

ENEL AND SUSTAINABLE FINANCE

Sustainable finance plays a key role in promoting sustainable development over the long term.

In line with the financial strategy, Enel Finance International NV, the Group’s financial company controlled by Enel SpA, placed three green bonds on the European market in January 2017 (1.25 billion), 2018 (1.25 billion) and 2019 (1 billion) for a total of 3.50 billion euros. The bonds are for institutional investors and are guaranteed by Enel SpA. Through green bond emissions, the Group aims to fund projects conducive to the transition to a “low-carbon economy”.

For further details and relative reporting see the chapter “Green Bond Report”.

After the Pledge signed in late 2017, in which nine companies committed to supporting the green bonds market, on December 10, 2018 Enel and another 15 European corporate majors met in Paris, to create the “Corporate Forum on Sustainable Finance”.The initiative is designed to further increase the number of participants, facilitating the acceleration of sustainable finance through a greater growth in financial instruments supporting sustainable investments.

Since the end of 2017, Enel has been a patron of the United Nations Global Compact platform dedicated to new and innovative financial instruments to accelerate the achievement of the SDGs (“Financial Innovation for SDG”).

Enel has also been a Member Issuer of the Green Bond Principles (GBP) and Social Bond Principles (SBP) with the International Capital Market Association (ICMA) since 2017.

Besides the Committee for green bond emissions and management, Enel was one of the first organizations worldwide in 2018 to formalize the establishment of a permanent structure dealing with sustainable finance issues. This structure includes the “Finance-Capital Markets”, “Investor Relations” and “Innovability – Sustainability Planning and Performance Management” units, guaranteeing an approach that is integrated, inclusive and multi-disciplinary.

6 Values including managed capacity.
7 Values including the capacity managed through the joint ventures of the Renewables Area in Italy, USA and Canada.
8 Values including managed production. With regard to consolidated production alone, 49% of the amount generated created zero emissions, and CO2 emissions amounted to 0,369 kg/kWheq.
9 Values including managed production. With regard to consolidated production alone, SO2 and NOx equaled 0.75 and 0,72 g/kWheq respectively, while dust equaled 0,17 g/kWheq.