European Utilities Key Player Profiles: Enel

DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
METHODOLOGY 1
ANALYSIS 2
European Utilities Key Player Profile: Enel 2
Datamonitor's Key Player Scorecard examines 31 leading utilities drawn from across Europe's competitive arenas 4
Key Players dominate power generation capacity market share in the Wmed competitive arena 5
Key Players dominate power generation output market share in the Wmed and CEE competitive arenas 6
Despite ongoing industry consolidation, in no competitive arenas do Key Players dominate power supply volume market share 7
Despite ongoing industry consolidation, in no competitive arenas do Key Players dominate gas volume market share 8
The Key Player Scorecard assesses utilities across four pillars: Performance, Scale, Growth and Exposure 9
The Performance pillar combines 5 financial metrics to measure business performance 10
The Scale pillar combines financial and operational metrics to measure the size of a utility 11
The Growth pillar measures the rate of growth of a utility's financial and energy resources 12
The Exposure pillar combines both operational and financial measurements of risk 13
Enel scores 37.5/100 on Datamonitor's European Utility Scorecard and ranks 8 out of the 31 Key Players covered 14
Enel outperforms the Key Player average in the Performance and Scale pillars 16
Enel achieves an overall ranking of 8, with a utility score of 37.5 21
Only on the Growth pillar does Enel significantly underperform 22
Several of Enel's top ten peers perform better, but with lower levels of risk (higher Exposure scores) 23
Enel outperforms on the Scale pillar, yet on Growth it scores below the Key Player average and most of its top ten utility peers 24
Enel's below average operating profit margin pulls its Performance rank down to 12 25
Enel's overall financial Performance score of 11.7 exceeds the Key Player average of 10.9 26
Enel is the median top ten utility on return on fixed assets and sales 27
Enel ranks above the Key Player average on return on energy volume and return on investment 28
Enel attains a ranking of 5 on the Scale pillar, due to a high level of profitability and generation capacity market share 29
Enel mostly beats the Key Player average on Scale metrics 30
In generation capacity, Enel ranks 2 with 52 GW 31
Enel is more focused on power than gas, with 294 TWh in power volume compared to 52 TWh in gas volume 32
Enel has 14% of Key Player power customers 33
At 294 TWh, Enel ranks 3 in terms of power volume 34
Enel has a 2.5% percent share of Key Player gas customers 35
In gas supply volume Enel has a 0.5% EU25 market share 36
Enel ranks 7 and 4 in terms of revenue and net income respectively 37
Enel's low revenue and profit revenue metrics result in a Growth rank of 20 38
Enel's Growth ranking of 20 is constrained by its low financial growth metrics 39
Enel's price earnings ratio and operating profit margin are below the Key Player average (15 and 21%, respectively) 40
Between 2001 and 2005, Enel had a decline in profits of 0.4%, despite an annual 2.7% growth in revenue 41
From 2004 to 2005, Enel's cash flows grew 17.7%, while power volume growth lagged at 12.3% and gas volume declined by -5.8% 42
Enel's negative (short) power and gas NTR lead to an Exposure ranking of 18 43
Only on the comparison of operating cash flow to energy volume growth does Enel rank above the Key Player average 44
Enel has a short gas NTR position in both power and gas of -58.2% and -100% respectively 45
Enel is short on power, as its generation output does not meet the company's supply volume commitments 46
Enel's capital structure is relatively balanced, with a debt to equity ratio of 90.9% 47
Enel ranks 17 of the 31 Key Players in terms of debt leverage 48
Enel's operating cash flow has grown (19.5%) at a much faster rate than energy supply volume (9.6%) 49
Enel's principal competitive arena is Italy 50
Most of Enel's generation capacity is fuelled by coal 51
Italy is Enel's most substantial power volume market 52
Italy accounts for the bulk of Enel's generation operations 53
Enel has 14% of Key Player power customers 54
Enel has a 2.5% percent share of Key Player gas customers, all of whom are located in Italy 55
APPENDIX 56
Databook 56
Definitions 75
Definitions 75
Datamonitor Consulting 75
List of Tables
Table 1: The Key Players are drawn from across a diverse range of markets 3
Table 2: The Performance pillar combines 5 financial metrics to measure business performance 10
Table 3: The Scale pillar combines financial and operational metrics to measure the size of a utility 11
Table 4: The Growth pillar measures the rate of growth of a utility's financial and energy resources 12
Table 5: The Exposure pillar combines both operational and financial measurements of risk 13
Table 6: Enel scores 37.5/100 on Datamonitor's European Utility Scorecard and ranks 8 out of the 31 Key Players covered 15
Table 7: Enel scores 11.7/25 on the Performance pillar, and ranks 12 out of 31 on this measurement 17
Table 8: Enel scores 8.9/25 on the Scale pillar, and ranks 5 out of 31 on this measurement 18
Table 9: Enel scores 8.5/25 on the Growth pillar, and ranks 20 out of 31 on this measurement 19
Table 10: Enel scores 8.5/25 on the Exposure pillar, and ranks 18 out of 31 on this measurement 20
Table 11: Enel's below average operating profit margin pulls its Performance rank down to 12 25
Table 12: Enel attains a ranking of 5 on the Scale pillar, due to a high level of profitability and generation capacity market share 29
Table 13: Enel's low revenue and profit revenue metrics result in a Growth rank of 20 38
Table 14: Enel's negative (short) power and gas NTR lead to an Exposure ranking of 18 43
Table 15: Return on fixed assets 56
Table 16: Return on sales 57
Table 17: Operating profit margin 58
Table 18: Return on energy volume 59
Table 19: Return on investment 60
Table 20: Generation Capacity / EU25 market total 61
Table 21: Power Supply Volume / EU25 market total 62
Table 22: Gas Supply Volume / EU25 market total 63
Table 23: Net income / Net income of 94 leading utilities 64
Table 24: Revenue / Revenue of 94 leading utilities 65
Table 25: Revenue growth, 2001-2005 CAGR 66
Table 26: Profit growth, 2001-2005 CAGR 67
Table 27: Growth in operating cash flow, 2004 to 2005 68
Table 28: Gas supply volume growth, 2004-2005 69
Table 29: Growth in power supply volume, 2004 to 2005 70
Table 30: Power NTR / Power supply volume 71
Table 31: Gas NTR / Gas supply volume 72
Table 32: Debt leverage 73
Table 33: Growth in operational cash flow - Growth in energy volume 74
List of Figures
Figure 1: Datamonitor's Key Player Scorecard examines 31 leading utilities drawn from across Europe's competitive arenas 4
Figure 2: Key Players dominate power generation capacity market share in the Wmed competitive arena 5
Figure 3: Key Players dominate power generation output market share in the Wmed and CEE competitive arenas 6
Figure 4: Despite ongoing industry consolidation, in no competitive arenas do Key Players dominate power supply volume market share 7
Figure 5: Despite ongoing industry consolidation, in no competitive arenas do Key Players dominate gas volume market share 8
Figure 6: Enel achieves an overall ranking of 8, with a utility score of 37.5 21
Figure 7: Only on the Growth pillar does Enel significantly underperform 22
Figure 8: Several of Enel's top ten peers perform better, but with lower levels of risk (higher Exposure scores) 23
Figure 9: Enel outperforms on the Scale pillar, yet on Growth it scores below the Key Player average and most of its top ten utility peers 24
Figure 10: Enel's overall financial Performance score of 11.7 exceeds the Key Player average of 10.9 26
Figure 11: Enel is the median top ten utility on return on fixed assets and sales 27
Figure 12: Enel ranks above the Key Player average on return on energy volume and return on investment 28
Figure 13: Enel mostly beats the Key Player average on Scale metrics 30
Figure 14: In generation capacity, Enel ranks 2 with 52 GW 31
Figure 15: Enel is more focused on power than gas, with 294 TWh in power volume compared to 52 TWh in gas volume 32
Figure 16: Enel has 14% of Key Player power customers 33
Figure 17: At 294 TWh, Enel ranks 3 in terms of power volume 34
Figure 18: Enel has a 2.5% percent share of Key Player gas customers 35
Figure 19: In gas supply volume Enel has a 0.5% EU25 market share 36
Figure 20: Enel ranks 7 and 4 in terms of revenue and net income respectively 37
Figure 21: Enel's Growth ranking of 20 is constrained by its low financial growth metrics 39
Figure 22: Enel's price earnings ratio and operating profit margin are below the Key Player average (15 and 21%, respectively) 40
Figure 23: Between 2001 and 2005, Enel had a decline in profits of 0.4%, despite an annual 2.7% growth in revenue 41
Figure 24: From 2004 to 2005, Enel's cash flows grew 17.7%, while power volume growth lagged at 12.3% and gas volume declined by -5.8% 42
Figure 25: Only on the comparison of operating cash flow to energy volume growth does Enel rank above the Key Player average 44
Figure 26: Enel has a short gas NTR position in both power and gas of -58.2% and -100% respectively 45
Figure 27: Enel is short on power, as its generation output does not meet the company's supply volume commitments 46
Figure 28: Enel's capital structure is relatively balanced, with a debt to equity ratio of 90.9% 47
Figure 29: Enel ranks 17 of the 31 Key Players in terms of debt leverage 48
Figure 30: Enel's operating cash flow has grown (19.5%) at a much faster rate than energy supply volume (9.6%) 49
Figure 31: Most of Enel's generation capacity is fuelled by coal 51
Figure 32: Italy is Enel's most substantial power volume market 52
Figure 33: Italy accounts for the bulk of Enel's generation operations 53
Figure 34: Enel has 14% of Key Player power customers 54
Figure 35: Enel has a 2.5% percent share of Key Player gas customers, all of whom are located in Italy 55