Endesa, S.A. (ELE) Earnings Call Transcript & Summary

[Presentation] Good morning, dear shareholders. I would like to say thank you all for your remote participation. And first of all, I would like to welcome you to this event in the name of the Board of Directors and in my own name. First of all, I need to refer to the health crisis that we're experiencing in the last few weeks. And I would like to share my support, the support of the Board of Directors and of our employees to everyone affected by COVID-19, people who are ill, health staff and all their relatives. Also, our recognition to those who have been with them, taking care of them and keeping them company. These messages are especially for those who have suffered the virus. In Linares, our colleague, Juan Ramón Sánchez Fernández, passed away. I would like to share our condolences with his family. We trust the quick recovery of the colleagues of Endesa who are currently affected by virus. In the face of this health crisis, from Endesa, we want to help economically and socially. And we're doing so, like the CEO will tell us about next. This is the time for everyone to join forces to fight COVID-19. It is also our responsibility to protect the health of our employees, customers, suppliers and shareholders. These are the circumstances that force us today to celebrate the General Shareholders' Meeting, or GSM, remotely without the physical presence of shareholders. Endesa has chosen not to delay the GSM so that we don't damage shareholders. Additionally, we'd like to highlight that the agenda of the GSM hasn't had any modification due to COVID. The current technology helps us to celebrate this GSM with the online presence of many of the shareholders through the channel labeled on our website. I'd like to thank everyone who is with us today remotely. Likewise, just like every year, electronic voting and delegation has been available for shareholders. So it is now right to proceed to comply with the legal requirements to validly constitute this GSM. So I'll give you the floor to the Secretary, who together with me will hold the organization powers that are foreseen in the Board regulation.

Thank you very much, Mr. Chairman. Good morning, ladies and gentlemen. It is hereby stated that this meeting is held through telematic means and, for all legal purposes, is considered to be held in Madrid at Endesa's registered office located at Calle Ribera del Loira 60. At 12:30 on May 5, 2020, this meeting is held on a single call, as convened by the Board meeting of March 20. The announcement of the call of meeting was published on the 27th of March 2020 in the official gazette of the Mercantile Registry of Madrid as well as in the company's web page and in the web page of the National Securities Market Commission. Therefore, it's considered to have been read for all purposes. Likewise, on April 28, it was reported that taking into account the extension of the state of alarm approved by Royal Decree 492/2020 on the 24th of May, whereby the state of alarm is extended, whereby it is also maintained the restrictions to the freedom of circulation of people with the purpose of protecting the health of shareholders, employees, directors, suppliers and all people involved in the preparation of holding of this meeting. This meeting was going to be held exclusively through telematic means. The Board of the Director has also agreed to request the attendance of a notary public for these purposes. Mr. Francisco Javier Gardeazábal del Río, notary public of Madrid, is in attendance, and he shall be in charge of drawing out the minutes of this meeting. The proposals of our resolutions drawn out by the Board of Directors according to the items on the agenda and the relevant reports have been made available to shareholders, pursuant to law from the official announcement of the call to meeting of -- in the company's web page on an interactive basis, and it's also made available to all the shareholders who are connected remotely through the telematic [indiscernible] that you are using. Therefore, all that information is considered to have been duly read for our purposes. On the other hand, there is an independent expert who is conducting a review of the compliance with core procedures and the holding of this meeting that includes a review of the voting and proxy procedure. Of course, final controls are still pending. However, we can say that the systems and procedures applied by Endesa are totally pursuant to current legislation. On the other hand, we should mention that a faithful electronic disclosure of service provider has verified from the publication date of the meeting up until 10:00 this morning, that all the documents have been timely published in Endesa's web page. Such documentation has remained available on the company's web page on an interactive basis. They can also be downloaded and printed, and they have remained unaltered. On the other hand, the list of attendees prepared according to some IT support as per Section 98 of the regulations of the Mercantile Registry, we can say that the quorum is as follows: Shareholders that are considered to be in attendance by law, not physically in attendance, but considered in attendance by law, 47 shareholders that account for 17,624 shares; as for post or electronic correspondence, 76 shareholders that account for 17,822 shares representing 0.1623% of the share capital; then telematic attendees that are 9 that account for 742,382,000 shareholders accounting for 70.1186% of the share capital. There are 2 shareholders in attendance in the room accounted for 3,770 shares, accounting for 0.004% of the share capital. So we can consider that the 134 shareholders are in attendance, accounting for 742,000, approximately, shares, accounting for 74.2030% shares of the company's share capital; as for the shareholders considered to be represented by proxy, account for 0.004% of the share capital; as for voting by proxy, 1,089 shareholders, accounting for [ 15.0454% ] of the share capital. So all in all, we can speak of 1,470 shareholders, accounting for 903,415,472 shares, accounting for 85.3283% of the share capital. Therefore, all in all, there are, in attendance, 1,470 shareholders; all in all, 903,415,472 shares that account for 85.3283% of the company's subscribed share with voting rights. That is, therefore, sufficient quorum in order to consider this GSM validly convened and in order to address all of the items on the agenda. As for telematic attendance, this is also part of the quorum. And all in all, there are 9 shareholders that are part of that quorum.

Thank you. Having seen the data given by the Secretary, we confirm the compliance of the necessary requirements for validly constituting the GSM in a single session, so that we may decide on all the points in the agenda. The voting channel for shareholders who join us remotely will be available until the Secretary finishes reading the proposed agreements. The executive table is integrated by members of the Board of Directors, the people present in this auditorium and people connected remotely to this GSM. And we give the floor to the notary public.

Thank you. I'll be presenting the compliance of Article 101 of the Mercantile Registry regulations. I will say that having required to come to this GSM to draw the minutes of this meeting, so I am present in the auditorium of the head office of Endesa. And I have checked that the meeting has been called in agreement with the legal requirements. I have checked that the remote media in real-time used by the members of the Board of Directors who are part of the executive table and who are not presently physically guarantee appropriately the constitution of the GSM. Last, if there is any reservational protest against the data exposed and the valid constitution of the GSM, please state so now by using the remote assistant, [ SAP ], so that we can make a note of that. So having checked the information, there are no reservations. Dear President?

Please go ahead, Mr. Secretary.

Thank you very much, Mr. Chairman. Pursuant to the company's law and according to the GSM's regulation, shareholders have been able to request all necessary information and clarification with regards to all the matters included in the meeting as well as all the information that was made available by the company to the National Securities Market Commission since the last GSM and/or with regards to the auditor's report. Given the characteristics of this meeting that is carried out through telematic means, shareholders have been provided with an IT application in order to attend this meeting telematically and in order to allow shareholders to exercise their right of access to information in writing. For that reason, during this GSM, the floor will not be open for discussion as usual. However, this GSM will be submitted all the questions or all the request for the information posed by shareholders between 9:00 this morning and noon, all of this pursuant to the company's law and the regulations of this GSM. We will also try to address all those questions during this GSM. If not, we shall address all those inquiries in the next 7 days, pursuant to law. Mr. Chairman, please.

Dear shareholders, even though in the exceptional circumstances that force us to celebrate this general meeting, this ordinary -- GSM remotely, it is a great satisfaction to be before the shareholders of Endesa for the first time after my appointment as the President of the Board of Directors. COVID-19 is representing a social challenge for Endesa and its foundation. They have been giving important resources to try to contribute to the response of our health system before the pandemic as well as to care for different needs of the most vulnerable groups. I should highlight the initiatives and voluntary contributions of Endesa's employees, and we are proud of their actions. The CEO will explain in his speech the detail and scope of our public responsibility plan that represents a materialization of the social responsibility of Endesa. The continuous iterations of the state of alarm have taken us to adopt organizational measures, adapted to the new framework and inspired mainly by the protection of health of everyone inside Endesa. And we will keep applying these measures to protect the health of everyone related to the company. I just can't praise enough the essential work that has been done by the staff of Endesa devoted to essential tasks. The security and safety and continuity of supply and its adaptation to demand provoked by the pandemic have represented a factor of visibility for the whole community. Endesa is a reliable company that has met the targets set for 2019. We have made energy transition. Our priority action criterion in that process, Endesa has adopted decisions as difficult as decommissioning some of our coal power stations, a process where the idea of ensuring a fair transition links of stakeholders, public and private, and that in Endesa we take on by considering all the different interests at stake. The labor health and safety of all workers [indiscernible] of Endesa constitute a permanent concern. That's why we regret fatal accident that happened in November 2019 at a power station of Cíjara that took the life of our colleague, Jorge Uría Morales. And I share with his family our condolences and solidarity. The organization of the fifth framework convention led to a signature on the past 23rd of January 2020. The consideration of the interests of our shareholders and the good financial situation lead us to suggest within the application of the results of 2019 distribution of the total gross dividend of EUR 1.475 per share. Determining the social-economic effects of COVID-19 for 2020 represents a remarkable uncertainty, and the analysis in that regard should be paired with caution and checking the macroeconomic estimates that have been published. Anyhow, we're prepared to act in a society and an energy market that are very different to the ones we know just a few months ago. The European Union seems to be close to reaching the central agreement on the financial tool to face this challenge. Our response must be coherent and proportional with the seriousness of the diagnosis and then must be so not just financially but also by reinforcing the common lines of action, solidarity and support. Within this European framework of restructuring, it will be the role for Spanish institutions to assign and apply measures that contribute to promote the recovery of our economy, allowing especially the electric sector gets confirmed as one of the many stakeholders to reach that target. Endesa has been preparing the return to social activity and economic activity by keeping as a priority the protection of the health of our employees, which will also represent a benefit for everyone who relies on Endesa. Regarding the corporate governance of Endesa. We have a consolidated model, based on the features of our company that aims to be a reference point regarding transparency and sustainability. We're always ready to embed best practices through the appropriate modifications of our provisions such as the case of the regulation of the Board of Directors and the corporate governance policy, where we have included the nonexecutive count of the President and the limitation of mandates for the opposition. Also, the internal regulation of conduct in the securities market and the issuance markets, the procurement policy taken to the Board committees, the diversity policy, the rotation and implementation of emolument programs to new directors to allow them from the start to have full participation in the functioning of the Board. Regarding compensation. The remuneration policy has included the incorporation of executive Board members or top managers, their contracts corresponding to payments for their contract resolution. We respect the limit of 2 years of the total and annual compensation. Endesa has not followed the recommendation to have a Appointments Committee and then a Remuneration Committee. The explanation is based on our own experience. If you take into account the makeup of those committees, with a majority of independent Board members would be identical, it doesn't seem reasonable to separate those communities, especially when the functioning of our Appointments and Remuneration Committee has allowed us to coordinate things such as assessment and determination of compensation. Likewise, as stated in the explanatory report of the modification of bylaws, we propose to the GSM the approval of statutory norms that include creating a new Sustainability and Corporate Governance committee that approaches all the matters that appear regarding sustainability. In that committee, that committee should hold the powers regarding the advice in corporate governance. Regarding the resignations. On September 11, 2019, Mr. Enrico Viale resigned as a Board member of the company. On January 15, 2020, for personal reasons, Ms. Helena Revoredo Delvecchio also resigned. And the Board of Directors would like to thank them both for their dedication and effort. So to this GSM, we suggest the appointment of several Board members. First, the ratification of the appointment by co-optation and reelection as an independent director of Mr. Antonio Cammisecra and the appointment as new independent Board members of Ms. Eugenia Bieto Caubet, Ms. Pilar González de Frutos and Ms. Alicia Koplowitz y Romero de Juseu. The shareholders have had the reports appropriate to each Board member that we suggest here. And the Board understands that these are people with qualified business and professional profiles, whose addition would contribute to a better functioning by the Board of Directors. Their profiles are complementary to the current members of the Board. The addition of 3 new female Board members also fits into the target of Endesa to have at least 30% of female Board members in its Board. If approved, Endesa will have a majority of independent Board members, representing 61.54% of the Board members, complying, therefore, with the most demanding standards in that regard. Regarding sustainability. In Endesa management, we aim to keep being a sustainable company. We want to keep aligning values and interests under a long-term perspective. Sustainability represents that we will care for the big targets in energy, aligning the groups of interests, the new prospect in our activity that become a source of economic value creation. COVID-19 has marked in Endesa, and it's a strategic reflection devoted to analyze the effect that the current crisis may have for energy transition and for fighting against climate change. In these few months, we have seen a series of events that confirm not only that energy transition is still a current issue, but also that leaving the current crisis depends in good measure on accelerating that process. Continuing the advancement in digitalization is a need marked by the way in which we -- in which companies and our customers have related in these months. The teleworking option has opened its way in a decisive manner within Endesa. Same thing will happen with the electrification of homes and companies and in the relevant subject of urban mobility. Endesa has decided to confirm this strategy in that direction and contribute, therefore, to economic recovery. We have an ambitious investment plan for the period 2020, 2022 that will benefit all the stakeholders of Endesa, and that will represent and respond to the capacity of investment that our company keeps from the liquidity available and the group rate that we have. I have said that Endesa is a reliable company, and we will keep being so in these difficult times. And we are aware that our strategy, activity and investments will not just continue favoring our stakeholders but also will be embedded in the project of social and economic recovery. To do so, we count on this ability that comes from belonging to the Enel Group. I would like to finish by thanking all the shareholders for their trust towards the Board of Directors. And I express also the -- I extend also the gratitude to our employees that have responded to the different challenges that Endesa has had last year and also in the face of COVID-19. Finally, I'd like to especially mention the performance of our management team, directed by the CEO, José Bogas, to whom I give the floor. Thank you very much.

Thank you very much, Mr. Chairman. Dear shareholders, welcome and thank you very much for attending Endesa's General Shareholders' Meeting. This GSM is being held 100% by telematic means for the first time in our history due to the current situation arising from the health crisis we are still experiencing and due to the state of alarm decree still in force. This is also a different GSM for several reasons: First and foremost, because we are starting to leave behind the worst health crisis that we have experienced in the past 100 years; second, because this health crisis has and will have a huge economic impact on the life of our customers and on the business fabric; and thirdly, because I would like to highlight that Endesa has faced this challenge with determination and strength. We have proved our leadership capacity to resist, and we have been working for many weeks on action plans that are intended to contribute to the country's economic growth. We want to be key in rebuilding the economic and social fabric and economic recovery. We shall act in a manner commensurate with our leadership in the energy sector. We have a clear-cut priority. It is absolutely necessary to restore the productive fabric that has been damaged and recover thousands of people that have been affected by this crisis. This is critical in order to attain a solid economic way out. This GSM has a clear agenda, and I shall address that shortly. Let me now highlight also last year's fiscals milestones. But before that, I would like to refer to some of the key aspects of the health crisis that we have been experiencing and that, well, little by little, we are leaving behind thanks to the epical and moving effort made by society at large. This has been a joint effort in which health professionals, the state security, corps and forces, the professionals of essential services, teachers, nongovernmental organizations, volunteers, citizens and companies played a key role. So my most sincere acknowledgment and gratitude to all of them for the work done and that they continue to perform. I would also like to make a special and heartfelt mention to Juan Ramón Sánchez Fernández, a colleague of ours that passed away a few weeks ago due to coronavirus. And so I would like to share with myself to the condolences conveyed by our Chairman. I would also like to send some warm words to those employees who are still convalescent. To all of them, we wish them a quick recovery. So in this context, I must and I wish to highlight Endesa's key role in fighting this crisis, and which has that role been or made evident, I shall highlight it. It has been ensuring the supply of LNG for everything to work. This has been possible thanks to the effort and professionalism of an extraordinary human team that has worked under unusual conditions, a team that has quarantined and that continues to warn that all hospitals, health centers, households, industries and services can keep on performing that activity. So my heartfelt gratitude to all of them. Never has something so essential and ordinary in our work been so important in society at large. Over 2,400 people have been working in the field, and virtually 7,000 people have been working remotely in order to maintain our company operational, providing the service that our customers expect and need while alleviating the health and humanitarian crisis we have all suffered. For that reason, on March 29, we announced the creation of a fund of EUR 25 million, and we also set into motion a public responsibility plan in order to provide material services, equipment and infrastructure to fighting against COVID-19. This plan consists of 3 pillars: first, the donation of materials and services. We put our logistic and procurement capacity into this plan as well as the qualified staff and necessary equipment in order to provide protection equipment to health staff, public service staff, including face masks, FFP2 masks as well as PPEs. We also provided instruments in order to assist hospitalized patients, specifically respirators, radiological equipment, among other instruments. The second pillar is to ensure special energy supply conditions to nursing homes, hospitals and medicalized hotels. We made available to the public services our capacity as an energy supplier of health facilities. We distributed equipment, and we assigned a staff in order to secure energy supply in make-shift hospitals and medicalized hotels. We also guaranteed free supply during the state of alarm to medicalized hotels that are Endesa's customers. The third pillar has to do with economic donations to institutions, bodies and health centers in order to have the especially serious basic needs previously identified. I should also highlight, acknowledge and thank the altruistic and spontaneous response by thousands of Endesa employees that have fostered initiatives, donations and campaigns, significant contribution that has made it possible to provide materials to health staff, to support initiatives in nursing homes, to alleviate the pain and suffering so many families that went through difficult times or lost their beloved ones. Let me convey my deepest sympathy to all of them. Dear shareholders, we are stepping into a different context that brings uncertainty as to the depth of the crisis and the recovery times, a context that also brings about some needs and uncertainties that we must address with determination now steadily. We, I can ascertain you, are on it. This means have to do with deep reforms that the governments of all countries, including the government of Spain, must carry out in order to rebuild key productive fabric elements to regain trust, to create jobs and to attract investment. We are now analyzing special energy transition acceleration and national commitment plan. And should the circumstances allow, we expect to implement such a plan shortly. Ladies and gentlemen, if prior to being struck by the COVID-19 crisis, we all knew that there was no other pathway but that of sustainability and the commitment with the societies in which we operate, this experience must be a lesson that we should not forget. Companies like Endesa had already rethought our role in society and our business targets in line with an environment that is clearly marked by the threat of climate change. Today, in addition to ratifying our commitments, I can ascertain you, and I do, that sustainable development will be at the core of our activity. And before we deal with the topics of this GSM as such, let me exemplify my previous statement by sharing with you a common goal that stems directly from our strategic plan. In 2022, we shall be the cleanest integrated electricity company with the lowest emissions in the Iberian Peninsula. Our strategic plan is geared to complying with the UN Sustainable Development Goals, specifically to attain mainly SDG 13, that is to take urgent action to combat climate change and its impacts. Ladies and gentlemen, I shall now outline the highlights of our management during fiscal year 2019. And I will throw some light on the topics that we will submit to approval by this GSM. 1 more year, we have attained results above the target set. We are in the best position to face the challenges of decarbonization and digitalization. Decarbonization and digitalization are unchangeable drivers in creating value to shareholders, customers, communities where we operate and for all those who work at or for this company. We are very aware of our responsibility in society, and we also know how important it is to place our business sustainability at the center of our actions. So before I refer to Endesa's economic and activity data during 2019, let me outline which were, in my opinion, the key milestones of the past fiscal year, of which I feel personally proud. First of all, 1 more year, we continue to be leaders in Spain. We are the key network operator. We are the main electricity generator. We continue to have the largest retail customers base despite increased competition, and we are the #1 investing energy company in Spain. 1 more year, we have exceeded the company's strategic plan targets. 2019 stands out for the good management of the deregulated business that, coupled with the stability of the regulated business and a cost control policy, has enabled us to increase our net ordinary profit. Thirdly, 2019 was the year of the end of political uncertainty after the implementation of a new government in Spain. And with this new government, there are many political and regulatory decisions that should foster success in attaining the economy's decarbonization goals. The promotion of these measures can only be performed through stability and democratic normality in order to face the underlying challenges successfully. Like every year, I would like to highlight Endesa's commitment with the health and safety of all of the company's workers as well as that of our suppliers and contractors in our value chain. This year, the accident rate went down once again. They are better, once again, which shows the work and efforts made. However, we shouldn't feel satisfied because unfortunately, we have to regret a fatal accident at the Cíjara hydraulic power station in the province of Badajoz, where Jorge Uría Morales, one of our colleagues, passed away. I would like to dedicate some warm words in his memory and send to this family the love of all those who work at Endesa. In 2019, we realized the first tangible results, even more so, of Endesa's global transformation in order to provide a more renewable mix. 59.2% of Endesa's generation is already CO2-emission free. We have also increased by 211% our investment in renewable energies during the past fiscal year. And we have been one of the fewest companies fit in into the system of the power awarded in 2017 auctions, specifically 879 megawatts. Also in 2019, we shut down groups 1 and 2 of the Alcudia coal power plant in the Balearic Islands. And we also requested the shutdown of importing coal plants in the peninsula, in addition to the shutdown of the national coal plants. And in this respect, I would like to highlight 2 aspects. Endesa pursues for commitment of rebuilding those geographical areas that have meant so much both for the company as well as for the local communities for decades. It has so been foreseen in our voluntary reconversion plans. Next, we have also adopted our balance sheet to the current circumstances by allocating provisions to cease these activities while preserving, at the same time, a dividend payout policy in line with our business strategy and also in line with our balance sheet strength, which continues to be one of the most appealing ones in the sector. Fiscal year 2019 was a good year for Endesa. It was good for all of you, the shareholders. It was good for employees at large. If we bear in mind that after many months, we have been able to reach an agreement that is suited to the current times and to what society where Endesa provides services expects, and it's even more positive given the current circumstances arising from the COVID-19 crisis. It has also been positive for our customers that continue to be at the core of everything we do and to whom we continue to target our innovation and offerings, which are increasingly more digitized and also more attractive, in our opinion. Dear shareholders, this good news and such good results have been attained in a very complex scenario. Let me now provide you with some of the highlights of the context in which we perform Endesa's activity. 2019 was characterized by a significant drop in electricity demand, 2.7% in adjusted terms. The reasons were basically 2: mild temperatures over the period and the slowdown of the economic activity, in general, that has affected energy demand by households and large companies. On the other hand, 2019, there was also an increase in the price of CO2 rights, while the price of gas plunged as we didn't see in many years. And so this change in the situation of commodities, coupled with the increase of renewable production, has caused the importing coal power plants to experience a strong loss of competitiveness and production. This has been the reason, together with the firm commitment of accelerating our mix decarbonization, because in view of the circumstances, in September last year, we announced that we were going to anticipate the discontinuity of these power stations, which forced us to carry out the relevant accounting adjustments. So in addition to this impairment from coal plants, we should add the one from non-peninsula systems due to the regulated compensation review carried out by the ministry for the 2020, 2025 period. This compensation has been significantly cut, which, as I will explain shortly, has led us to also carry out the relevant accounting adjustment. As for Endesa's activity levels, the peninsula electricity production during 2019 reported a reduction of 19% as a result of some falls in hydraulic and coal outputs that resulted in negative variations of 31% and 72%, respectively. As I mentioned before, CO2 emission-free technologies have accounted for virtually 60% of the company's generation mix, surpassing by 20% the 49% reached in 2018. All this, therefore, brings us close to our decarbonization goal and, on the other hand, shows our degree of commitment with the national goals. All in all, during the period, Endesa reached market shares of 18.3% with regards to peninsular generation, 44.1% with regards to distributed energy and a 34.1% with regards to electricity sales. All such figures confirm one more year that we are the leading company in the electricity sector in Spain. I would like to highlight that we are about to reach 6 million customers in the deregulated electricity market, and we have recorded an increase of 1.8% throughout 2019 in a highly competitive context. In Portugal, we are the second operator with a share of more than 16% in the free electricity market and more than 330,000 points of supply. Finally, with a share of 15.6% among customers in the deregulated gas market and with more than 1.6 million customers, we consolidate ourselves as a second gas company in Spain. All these operational data are the foundations of the company's economic and financial results, which once again exceed our commitments. The company's EBITDA reached EUR 3.841 billion, up 6% vis-à-vis 2018, mainly thanks to the management of the deregulated market with an EBITDA increase in this business segment in the amount of 22%, up to EUR 1.475 billion. Accounting adjustments, the ones that I mentioned before, that totaled EUR 1.9 billion as a result of the request for the shutdown of the coal power plants, and the reduction of non-peninsula generation compensation are reflected in the company's average and net profit. However, such adjustments that reflect Endesa's transformation process have no impact on the company's dividend payout policy, which, as you know, is marked by the company's net ordinary profit that in 2019 went up by 3%, reaching EUR 1.562 billion. A good example of the company's economic performance is Endesa's operational cash flow reaching EUR 3.181 billion in 2019. That is 31% higher than the one reached in 2018, reaching, therefore, a record high, mainly due to higher results over the period and a significant improvement in the company's working capital. The net financial debt went up by EUR 607 million, up to EUR 6.377 million vis-à-vis the one reported as of December 31, 2018. However, the net debt-to-EBITDA ratio was only 1.7x, which provides the company with much leeway in order to face a major transformation and investment process in the area of renewable energies, distribution and digitalization, that Endesa has decided to undertake to fulfill its strategic plan and its energy transition goals. Net investments stood in 2019 at EUR 1.887 billion with a 48% growth, mainly due, as I mentioned before, to the effort that the company is carrying out to develop new wind and photovoltaic power as well as in the area of digital transformation. In November, the Board of Directors of Endesa agreed to distribute to its shareholders an interim dividend against 2019 results in the gross amount of EUR 0.70 per share, the payment of which resulted in an outlay of EUR 741 million settled on January 20, 2020. All the same, the proposal for the distribution of results of 2019 results that the Board of Directors of Endesa has submitted for approval by the GSM will consist in the distribution to shareholders of a total dividend for a gross amount of EUR 1.475 per share. All in all, the company's dividend payout proposal represents an increase of 3% over the dividend against 2018 results. Taking into account the dividend paid in 2019 against 2018 results and the revaluation of the share price during the period, that is to say, as of December 31, 2019, the return for shareholders reached 25.3%. Dear shareholders, these results once again exceed the forecast under our strategic plan. This plan was updated in November last year for the 2020, 2022 period. This plan, even under the current circumstances, is reaffirmed and upheld by the company as proof of our commitment with the country. Let me now outline the highlights of this latest update of our strategy. They are 4: the decarbonization of our generation, where we contribute to secure supply; demand electrification, placing the customer at the center of our work; the development of efficient and smart networks; and a continuous progress in digitalization as the best way to serve customers and also to contribute to efficiency in the generation of new businesses. The strategic plan fosters all such pillars. We increased our net CapEx projections for the 2019, 2022 period from EUR 6.4 billion to EUR 7.7 billion. That is to say, we are talking about EUR 1.3 billion more that have been allocated almost fully to develop renewable assets. In 2022, we're foreseen to twofold the renewable output of 2019. This, together with the final shutdown of all the activities related to coal power, enable us to accelerate our objectives of decarbonization and to become, as I mentioned at the beginning of my address, the cleanest integrated electricity company with the lowest emissions in the peninsula. As I mentioned before, over 59% of our production in 2019 was emission-free, which places us in a comfortable position to reach 75% by 2030 and 100% by 2050. As a matter of fact, I'm convinced that our investment pace, technological advance and our determination will enable us to keep on exceeding these targets year after year. By way of example, the new strategic plan foresees an increase in the installed renewable capacity of approximately 40% until 2022. As for smart grids, we have increased our net investments by 11% compared to the 2018, 2021 period, seeking the robustness and flexibility required in order to accommodate the great many changes of the energy transition process. We continue to focus on digitalization as a key pillar in our strategy. With regards to the relationship with our customers and to reach cost efficiency, our net investments in digitalizations under the strategic plan totaled EUR 1.3 billion, which we believe will contribute to the EBITDA's growth by 2022 by 25%. And we continue meeting and anticipating the needs of our customers in this process of electrification and digitalization of electric power demand. To this end, we confirm our trust in Endesa X, a project in which we are focusing all of our innovation. And as part of which, in connection with electric mobility, we expect to multiply by 7 recharging stations by 2022, reaching 36,000 points. We also estimate to grow about 27% in respect of the number of e-Home customers over the strategic plan. Dear shareholders, based on these strategic pillars, once completed and once we approve the new or once the new compensation framework is approved for the 2020, 2025 period, we trust that the stability of the regulated market, the good management of the deregulated market and our commitment with efficiency and cost control through digitalization, all these will enable us to be an ever more sustainable company while improving our bottom line and eventually the profitability that we propose. As part of the update of the strategic plan and as a result of our investment process, we foresee an increase in EBITDA of 13% and an increase in the net ordinary profit by 19% until 2022. This plan will enable us to maintain an appealing dividend payout policy, even though consistent with the need of making the investments needed to make the business sustainable and profitable not only in the short term but also in the medium and long term. We shall maintain our commitment of distributing 100% of the ordinary net profit during fiscal year 2020, 80% in 2021 and 70% in fiscal year 2022. So you may find in Endesa and in its new strategic plan a guaranty of soundness, profitable innovation and fulfillment of all of our commitments with you. As I mentioned at the beginning of my address, we are now working on a plan that could substantially accelerate these investments should the circumstances allow and provided that the necessary regulatory and tax measures are taken to facilitate such execution. We want to be, and we shall be, one of the key economic growth drivers and job and wealth creation in Spain after a pandemic scenario. Dear shareholders, as you can see, we have what we can call an excellent plan for the future, and the new government of Spain means the confirmation of the new national energy and climate plan. We are aligned and committed to this plan because it's an ambitious plan and also because of the modernization possibilities it entails for Spain. Now the difficult part comes because now we have to implement a national plan that faces many challenges. We're talking about a pathway in which there are many uncertainties but also many opportunities to carry out a deep transformation of our model, a model that is decarbonized, where we will play a key role. Ladies and gentlemen, I would like to close my address by extending my appreciation and congratulating the 10,000 people who make up the great family of Endesa's active staff. Their talent, dedication, professionalism and effort make it possible that 1 more year I appear before you with satisfaction in the work done, presenting positive results and maintain and strengthen our leadership position and that are up to the trust you place in our management with a sound, viable and ambitious strategic plan that is the foundation of our work to keep on building future successes and that make us the spearhead of energy transition in Spain. I would also like to thank the work performed by the Board of Directors, that is today in attendance through telematic means. I would also like to welcome should you ratify the decision to the 3 new independent female directors and my special appreciation to our reference shareholders that is here represented by Mr. Francesco Starace, Enel's CEO and Vice President of Endesa; as well as our Chairperson, Ms. Patrizia Grieco, to whom I would like to thank on behalf of Endesa for her outstanding work as Chairperson of Enel, and we expect her to continue serving as director for our company. We are proud and we are also comfortable belonging to the most powerful energy group in Europe and one of the most powerful in the world. And we are also very proud of keeping Enel's interest in us and of being up to the requirements of a group such as Enel. Ladies and gentlemen, we have a project for Endesa that will continue to be a source of value and a good refuge for your investments. I appreciate your confidence. Thank you very much.

We'd like to thank the CEO for his speech. And next, the Secretary will convey the information requests from the shareholders that have been received remotely.

Thank you, dear President. So now we proceed to sum up in a comprehensive manner the information requests. There are just 2 things: There are a couple -- well, if there are any valid requests that cannot be answered here, they'll be answered in the period of 7 days after this GSM, as the law states. And according to Article 18, it is the president or someone appointed by the president who will be role to answer.

So we got questions from 3 shareholders. First, there are 2 questions from 1 shareholder. It may be answered separately. This is Mr. Antonio Ramos Fuentes, holder of 1 share. And after developing a criticism towards behavior of Endesa and the condition of the social benefits of passive staff, he has 2 questions: First, whether we consider reasonable the remuneration conditions of the CEO.

So Mr. Antonio Ramos, a shareholder, I'd like to say that the remuneration of the CEO is included with the remuneration policy proposed to the SGM to be approved in 0.19 agenda. It's been available for our shareholders, a report by an independent expert, that supports the remuneration policy. And when referring to the remuneration of the CEO, it says that the remuneration of the CEO of Endesa is below the average of the CEOs for companies of the same sector and size.

Thank you. The second question made by Mr. Antonio Ramos. When this holder of 1 share refers to the average annual consumption of CEOs and the top management of Endesa, since he says literally, according to you, the average consumption in Spain is 3,000 kilowatts per year.

So the CEO will answer this question.

Thank you, dear President. Mr. Antonio Ramos Fuentes, as you first say that the specific data you're asking about are information that cannot be disclosed due to the data protection policy. However, it is true that the average consumption in the Spain residential sector is between the 3,500 and 3,900 kilowatts hour per year. The different groups of Endesa, employees, retired, widowed, is around 9,000 kilowatts per hour, including women staff, executives and top management. In the last adjustment made in the agreement, we have reflected this consumption for the active staff in 6,000 kilowatts per hour. That is more than 50% of the average consumption in Spain. And for passive staff in 7,500, 6,000 for free and 3,000 at 50% of the cost. That represents nearly twice of the average consumption by the Spanish citizens.

Thank you, dear CEO. The second shareholder who has the question is the foundation [indiscernible] shares. They have several questions that are kind of connected, so we guess they could be answered jointly. The foundation refers to the health crisis from the COVID and the prohibition of the supply counts that have been legally regulated. They say that Endesa established this commitment before the government imposed so. And the foundation asks whether that measure should be kept after the state of alarm to prevent any cuts -- any supply cuts in this post-alarm scenario. They also talk about the electric service maybe being free for vulnerable families, some families affected by the crisis. And in this environment of energy poverty, they talk about the reason why Endesa hasn't signed an energy poverty agreement with Catalonia.

We give the floor to the CEO.

Thank you, dear President. First of all, I should say that Endesa is a very committed company in the fight against energy poverty. And it goes to show in the different actions and initiatives that we have been implementing in the last few years for families that are in this situation, actions that very often are pioneering in this sector. In the face of the crisis caused by COVID-19, Endesa has implemented several actions to enable the deployment of the new measures approved. Likewise, we have adopted policies to make payment more flexible to enable payment of invoices for vulnerable clients. Once over the first stage of health emergency, we're working on a second stage that foresees in an environment of social and economic crisis 2 clear lines of action: An internal one, when we're assessing the activities and investments that may be prioritized or advanced from different business, aiming to contribute to the social and economic reactivation of the country; and an external one, focused on social investment around the 3 answers where we have commitments agreed with the UN Sustainable Development Goals, which are social, economic development and the access in education. Regarding the agreements that have been signed by Endesa, as of December 31, 2019, there were 272 agreements in place, 6 of them with autonomous communities and 5 with federations of municipalities, keeping also the contracts with 537 municipalities. Thanks to these voluntary agreements, we answered 83,000 requests of customers in situations of vulnerability with difficulties to pay their invoices for an amount of EUR 27 million in Catalonia. And regarding the situation of vulnerable consumers in this territory and according to Law 24/2015, Endesa has made proposals of agreements with the Generalitat, the local regional government of Catalonia. And currently, we keep talking, so that both parties can reach an agreement by taking on the corresponding part for each, according to the referred Law 24/2015. Finally, regarding supply problems, in certain areas such as Lliurona and Granada, I should say that these problems originate from different sources, sometimes even from criminal activities. And Endesa is currently investing, so that the supply with contract is least affected by this situation. In the cases of fraudulent activities, they have been made known to executive forces. Thank you.

Dear CEO, we have the last and third question by [indiscernible], a limited company. In making reference to benefits coming from the electrical right of passive staff, your CEO says that the passive staff should keep their social benefits. How would that cost be taken on the future annual accounts?

Thank you. I'd like the Secretary to answer that question.

Thank you, dear President. So Endesa adopted the business decision to consider extinguish the benefits of the electric tariff of passive staff by exceeding their activity period in the workers by laws, that led to a collective agreement, a lawsuit by several trade unions, that led to a process with a ruling by the National Court of Justice in March 2019, that adjusted -- basically, that Endesa's behavior adjusted to the legal requirements. However, the trade unions appealed before the Supreme Court. One of the trade unions, UGT, gone and dropped the suit, and only 3 trade unions stayed in that lawsuit. And the prosecutor's office is requesting the cancellation of all appeals because they understand that none of the cases alleged justifies the summation of the appeal -- justifies the appeal. So they understand that the ruling of the National Court is according to the current rule. So Endesa thinks that the current ruling will -- is staying and will not be changed by the Supreme Court, but we will need to wait for the ruling of the Supreme Court to see the content. We don't think that the current ruling will be revoked. But according to whatever happens, we will see how we account for that in the annual accounts.

Thank you. At this point, we proceed to vote the proposed agreements on the points of agenda, and we give floor to the Secretary.

Thank you, dear President. In agreement with the relation of GSM and Article 20, consider federal votes to the proposed agreements made by the Board of Directors, those corresponding to the concurrent actions of the meeting present in this case or represented, having to use the votes corresponding to the shares whose holders have been made known to the notary public, the votes against, the blind votes and abstentions. The minutes will reflect the votes against, blank and abstentions resulting from the remote voting received before the SGM as well the votes against, blank and abstentions received from the shareholders through the app and the ones made through the notary public. Last, we consider concurrent actions to meetings the ones that are appear in the tenure list, having deducted those holders' representatives, who have been made absent from the meeting before the voting and who have let the notary public known. So I proceed to a summary reading of the agreements that are subject to consideration of general meeting: First, approval of the general accounts of Endesa as well as the consolidated accounts and subsidiaries corresponding to the annual term finishing on December 31, 2019; second, approval of the management report of Endesa and subsidiaries corresponding of the -- to the year finishing on December 31, 2019; third, approval of the annual financial information statement for the year finishing on December 31, 2018; fourth, approval of the social management corresponding to the year finishing on December 31, 2019; fifth, the approval of the interpretation of result of the year 2019, representing EUR 1,642 million, a dividend, the amount distributed corresponding to gross EUR 1.457 per share, taking into account 1,058 million shares, the result is EUR 1,561 million with the remnant of EUR 80 million with a total of EUR 1,642 million. As of November 26, 2019, the Board of Directors had a redistribution of the dividend for 2019 of EUR 0.20 gross per share. The payment was made on January 2, 2020. The complementary dividend is EUR 0.775 per share, that is gross, will be made on July 1, 2020. Six, delegation in the Board of Directors for a period of 5 years to issue bonds, promissory notes or other securities, simple or exchangeable or convertible as well as warrants. Seven, authorization for the company to acquire their own stock. Eighth, the cancellation of Article 17; the insertion of 2 new articles, 50 and 53; modification of other current Articles 37, 49, 52, 53; grouping of articles in Title V into 3 new chapters; modification of the numbering of Articles 18 to 53 to reformulate the regulation of the Board of Directors' Committees. Modification of Articles 27, 28 and 31 of the article's association, and addition of a new Article 26-bis, to set a minimum number of shares to go to the SGM allow for remote participation for the shareholders of the meeting. 10, modification of Article 56 of the article's association to include reference to the nonfinancial information statement. 11, modification of Article 6 regarding the nonfinancial information segment. 12, modification of Articles 10, 11, 21 of regulation of the SGM and addition of a new Article 10-bis to reflect the statutory modifications regarding a minimal number of shares to allow for a remote participation of our shareholders. 13, ratification of the appointment by co-optation and reelection of Mr. Antonio Cammisecra as Proprietary Director of the company. 14, appointment of Mrs. Pilar González de Frutos as Proprietary Director of the company. 15, appointment of Ms. Eugenia Bieto Caubet as an independent director. 16, appointment of Alicia Koplowitz, also as an independent director. 17, setting the number of members of the Board of Directors at 13. 18, voting a binding vote on the annual report on the remuneration of Board members. 19, approval of the policy remuneration for all members for the period 2020/'22. 20, approval of the strategic incentive 2020/'22, including the payment in company shares. And 21, which is just instrumental, to make possible everything that came before this delegation, the Board of Directors to implement and develop the agreements adopted by the Board as well by the SGM as well as to replace the faculties and powers of the SGM and granting faculties for notarizing these agreements. All these data, by participation of voting, we say that each point has been approved by a large majority and one [ stand ] to vote against and abstentions formulated before the notary public. And since it's a part for the notary, by the shareholders, I have them voted in the part vote of the app. And then now we decided to abstain or vote against. And these results will be published in full, as established by the law, on the website of the company in the span of 5 days, and that we might publish them this afternoon. Dear President?

Thank you. Therefore, we deem as approved each and every agreement, those agreement that have been subject to this SGM, and the notary public will draft, write up the minutes of the meeting. Thank you very much. And we, therefore, drop this session. Thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]