[Report] European Endesa Utilities Key Players & Strategies Market Research, Trends, Analysis

CHAPTER 1 INTRODUCTION
- Utility competition is starting to transcend national borders, but a single EU market place remains distant
- Larger utilities need to find a suitable geographical arena in which to pursue their ambitions
- The emergence of pan-European suppliers is an ideal for now, the reality is the emergence of geographic competitive arenas
CHAPTER 2 DATAMONITORS EUROPEAN UTILITY SCORECARD
- E.ON leads the Datamonitor European Utility Ranking, Endesa ranks tenth out of the 12 companies benchmarked
- Endesas supply and demand assets and structural hedge reduces its score on Datamonitors European Utility Scorecard, to 31* out of 100
- Endesa is concentrated in the NWE and CEE European competitive arenas
- Endesa is active in only 1 of the 5 competitive arenas for demand and supply asset activity
- Endesa is the ninth largest supplier of end user volumes for power and gas across 32 European markets, with 1.6%* market share
CHAPTER 3 POWER SUPPLY VOLUMES AND MARKET SHARES
- Endesas power volumes in Spain are the driver of its market share across the EU 32, with minor I&C volumes gained in other WMed markets
- Endesa has the sixth highest power market share, 2.9%* across the EU 32 markets
- Endesas geographic spread of power volumes is limited to only the WMed competitive arena to date
- Endesa has no power volumes across the Nordic region, which is dominated by Vattenfall, E.ON and Nordic regional suppliers
- Endesa has no current power volumes across the NWE region, which has the greatest concentration of European suppliers
- Endesa currently has no power volumes sales across the CEE region, where CEZ, E.ON and RWE are the leading suppliers
- Endesas power volumes across the WMed region totals 107TWh, almost a quarter of EDFs volumes in the region
- Endesas RES end user volumes are only sourced from Spain, whereas in I&C it has diversified into the 3 other WMed markets
- Endesa is active in markets that have a low competitive market score, as assessed by Datamonitors MCI rating
- Endesas power supply revenues total €8,981m, with 48% of this contribution made from supplying MEU customers
- Endesa derives the almost the same proportion of revenue from each national market as the proportion of power supplied to each national market
CHAPTER 4 GAS SUPPLY VOLUMES AND MARKET SHARES
- Endesa has not extended its gas presence other than in its home market, where the market is expected to increase in competitiveness
- Endesa has a 0.3%* market share across the EU 32 markets for end user gas supply volumes, the lowest of the leading suppliers
- Endesa geographic spread of gas volumes matches that of its power spread, and is only active in the WMed competitive arena
- Endesa has no gas volumes across the Nordic region, a market that is still immature, with only E.ON and oil majors active
- Endesa has no gas volumes across the NWE region, where the highest concentration of suppliers are found, led by E.ON
- Endesa has no gas volumes across the CEE region, E.ON is present, but this region is dominated by Russia and therefore Gazprom
- Endesas gas supply presence in the WMed region is minor, delivered through its Spanish gas distribution acquisitions
- Endesa is only active in its home market of Spain, where it RES to I&C split is 21% to 79%
- Endesa is only active in Spain for gas, a market that is more competitive than power as assessed by Datamonitors MCI
- Endesas gas supply revenues total €556m, sourcing all its revenues from Spain, with an even RES and MEU split and little SME gas sales
CHAPTER 5 GENERATION CAPACITY AND MARKET SHARE
- Endesa is the sixth largest generator across Europe, with its Spanish thermal assets driving its market share
- Endesa ranks as the sixth largest European generator across Europe, with just under 32GW of capacity
- Endesas geographic power plant spread is located all in the WMed competitive arena
- Endesa has no power plant assets across Nordic region, a region dominated by Vattenfall, E.ON, Fortum and Statkraft
- Endesa has no power plant assets across NWE region, a region which has the highest concentration of players and divergent fuel mix
- Endesa has no power plant assets in the CEE region, a region dominated by CEZ, with EDF, Electrabel, Vattenfall and RWE active
- Endesa is active in all of the 4 major WMed markets, only outdone by the other 2 main incumbents in the region, EDF and Enel
- Endesa has a 3.3% and a 3.0% market share of total and renewables generation capacity across the EU 32 markets respectively
- Endesas fuel mix is spread across coal, nuclear, hydro and other thermal, with a greater deviation from the EU 32 fuel mix for coal
- Spain accounts for 74% of Endesas power supply assets in 4 markets, having also acquired market share in Italy and France
- Endesas generation output totals 134TWh, driven by a thermal and nuclear fuel mix, across the WMed arena
CHAPTER 6 STRUCTURAL HEDGE - POWER
- Datamonitor uses generation and supply market shares to determine if companies are generally long or short in power
- Endesa is long in its NTR*, by 86.4TWh, as is the trend with most other European players, generally being long by over 30TWh
- Expressing the NTR as a percentage, Endesas additional 86.4TWh makes the company long by 182%
- Endesa NTR* is structurally long in all its active markets, particularly long in Spain, 49.5TWh and in Italy, 29.4TWh
- Currently energy companies that are structurally long are profitable
CHAPTER 7 STRUCTURAL HEDGE - GAS
- European utilities gas equity and gas supply market shares determine if these companies are generally long or short in gas
- Endesa is short in its NTR* gas position, at 6.2TWh, the trend for the leading energy companies remains being significantly short
- A handful of energy companies outside the oil and gas majors have equity gas, EDF has none, unlike Centrica, GDF, RWE and E.ON
CHAPTER 8 BASE FINANCIALS OVERVIEW
- Endesa used its high cash flow to support debt funded Latin America acquisitions, while attaining higher revenues it is seeking to re-establish higher earnings
- Endesas revenues in 2004 exceeded €18bn, with €1bn net income generated, mid placed among the leading European players
- Over the last five years Endesas revenues have grown at a CAGR of 4%, however earnings have fallen by 1.7% CAGR
- Endesas PE ratio is above the sector range, driven up by Gas Naturals hostile bid for the company
- Endesas gearing is 1.9x earnings, the second highest amongst its peers, a legacy of its acquisition spree in Latin America
- Endesas free cash flow amounts to €3.9bn, the largest sum among its peers, supporting its ability to pay and fund additional gearing
CHAPTER 9 APPENDIX
- Understanding Datamonitors European Utility Scorecard rating, focusing on competitive sectors of generation, equity gas and retail volumes
- Scoring methodology
- Scorecard rating component breakdowns and scoring metrics and measures
- Data methodology
- The MCI Index shows how attractive a particular market is to new entrants in terms of the competitive environment
- The MCI Index is calculated by deriving a weighted average of scores over 9 key metrics
- Glossary of terms
- Future readings
- SPP writing team
- How to contact experts in your industry
- List of Tables
  - Table 1: Datamonitors European Utility Scores and ranking for the 12 benchmarked companies
  - Table 2: Endesa Competitive Arenas matrix, 2005
  - Table 3: Scoring rating matrix for Datamonitors European Utility Scorecard
- List of Figures
  - Figure 1: 32 European markets divided into 5 regional competitive arenas
  - Figure 2: Endesas Datamonitor European Utility Scorecard, 2005
  - Figure 3: Companies matrix by value chain focus and competitive arena, 2005
  - Figure 4: Top twelve power and gas supply volume market shares across 32 European markets, 2005
  - Figure 5: Leading players power supply volumes (GWh) market share across EU 32 markets, 2005
  - Figure 6: Weighting between I&C and residential power volumes for the key players across EU 32 markets, 2005
  - Figure 7: Power volumes supplied across the EU 32 markets by sector and competitive arena, 2005
  - Figure 8: Power volumes supplied in the Nordic competitive arena by company, 2005
  - Figure 9: Power volumes supplied in the NWE competitive arena by company, 2005
  - Figure 10: Power volumes supplied in the CEE competitive arena by company, 2005
  - Figure 11: Power volumes supplied in the WMed competitive arena by company, 2005
  - Figure 12: Endesas power supply volumes (GWh) RES country breakdown, 2005
  - Figure 13: Endesas power supply volumes (GWh) I&C country breakdown, 2005
  - Figure 14: Scores and geographical distribution of 13 power markets assessed by Datamonitors MCI Index rating, 2005
  - Figure 15: Map representing Endesas size and the geographical distribution of its power market share across EU 32 markets, 2005
  - Figure 16: Endesas power supply volumes revenue breakdown, by sector, 2005
  - Figure 17: Endesas power supply volumes revenue breakdown, by competitive arena, 2005
  - Figure 18: Proportion of revenues vs. end user power volume sales in markets where Endesa has a >3% volume market share, 2005
  - Figure 19: Leading players gas supply volumes (GWh) market share across EU 32 markets, 2005
  - Figure 20: Weighting between I&C and residential gas volumes for the key players across EU 32 markets, 2005
  - Figure 21: Gas volumes supplied across the EU 32 markets by sector and competitive arena, 2005
  - Figure 22: Gas volumes supplied in the Nordic competitive arena by company, 2005
  - Figure 23: Gas volumes supplied in the NWE competitive arena by company, 2005
  - Figure 24: Gas volumes supplied in the CEE competitive arena by company, 2005
  - Figure 25: Gas volumes supplied in the WMed competitive arena by company, 2005
  - Figure 26: Endesas gas supply volumes (GWh) I&C vs RES breakdown, 2005
  - Figure 27: Scores and geographical distribution of 13 gas markets assessed by Datamonitors MCI Index rating, 2005
  - Figure 28: Map representing Endesas size and the geographical distribution of its gas market share across EU 32 markets, 2005
  - Figure 29: Endesas gas supply volumes revenue breakdown, by sector, 2005
  - Figure 30: Endesas gas supply volumes revenue breakdown, by competitive arena, 2005
  - Figure 31: Generation capacity (MW) for 12 leading European energy companies across 32 European markets, broken down by fuel type, 2005
  - Figure 32: Generation capacity (MW) across the EU32 markets by sector and competitive arena, 2005
  - Figure 33: Generation capacity (MW) across the Nordic competitive arena by company, 2005
  - Figure 34: Generation capacity (MW) across the NWE competitive arena by company, 2005
  - Figure 35: Generation capacity (MW) across the CEE competitive arena by company, 2005
  - Figure 36: Generation capacity (MW) across the WMed competitive arena by company, 2005
  - Figure 37: Endesas generation capacity (MW) market share across 32 European markets, 2005
  - Figure 38: Endesas renewable capacity (MW) market share across 32 European markets, 2005
  - Figure 39: Endesas generation fuel mix across its European asset base, 2005
  - Figure 40: Endesas generation fuel mix across its European asset base against EU 32 market proportions, 2005
  - Figure 41: Endesa owned generation capacity (MW) breakdown by country, 2005
  - Figure 42: Endesa generation capacity (MW) market share in each European country, 2005
  - Figure 43: Endesas generation output by fuel type, 2005
  - Figure 44: Endesas generation output breakdown, by competitive arena, 2005
  - Figure 45: Estimated absolute Net Trade Requirements (NTR)* for power, for the benchmarked 12 players, 2005
  - Figure 46: Estimated percentage Net Trade Requirements (NTR)* for power, for the benchmarked 12 players, 2005
  - Figure 47: Endesas Power NTR position across the European markets it is active in
  - Figure 48: Operating income vs. NTR position for 12 benchmarked players, 2004/2005
  - Figure 49: Estimated absolute Net Trade Requirements (NTR)* for gas, for the 12 benchmarked players, 2005
  - Figure 50: Estimated percentage Net Trade Requirements (NTR)* for gas, for the 12 benchmarked players, 2005
  - Figure 51: Revenue and net income for 12 energy companies benchmarked, 2004
  - Figure 52: Endesas revenue and net income 5 year summary, 2000 - 2004
  - Figure 53: PE ratio for listed companies, for the 12 companies benchmarked, 2004*
  - Figure 54: Debt/Equity ratio for 12 benchmarked companies, 2004
  - Figure 55: Free Cash Flow for the 12 benchmarked companies, 2004
  - Figure 56: Understanding Datamonitors European Utility Scorecard
  - Figure 57: Datamonitors MCI Index scale for market assessment
  - Figure 58: The MCI Index is calculated by deriving a weighted average of scores over 9 key metrics

European Utilities Key Players and Strategies - Endesa

Table of Contents