Enel SpA (ENEL) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. I'm Monica Girardi, Head of Group Investor Relations. Welcome to the full year 2019 results presentation, which will be hosted by our CEO, Francesco Starace; and CFO, Alberto de Paoli. Before the presentation on full year, Francesco will open with 3 slides dedicated to the situation of global emergency we are living, elaborating on how the group acts and positions. He will then sum up 2019 milestones. And after that, Alberto will walk you through the full year operational and financial performance. Following the presentation, we will have the usual Q&A session. In light of the exceptional amount of questions we have received about the impact of coronavirus and aiming at being efficient in the way we answer them, we ask those connected to send questions only via email at [email protected]. Before we start, let me remind you that the media is listening to both the presentation and the Q&A session. Thank you, and now let me hand over to Francesco.

Thank you, Monica. Good evening to everybody. So as Monica said, before the fiscal year 2019 presentation, I'm going to spend a few words around the exceptional situation that we are currently all living. The next 3 slides are dedicated to how the group has reacted to the coronavirus crisis and how it will continue to manage the evolution of the crisis as it understands it will unfold in the next future. I would like to start with what we think is the most important factor for success, our people. As of today, 35,300 Enel employees are working remotely. This amounts to about 52% of our global workforce. Enel introduced smart working practices in June 2016. We had, at that time, performed a small pilot test, which soon demonstrated that people can work remotely with unchanged level of efficiency and efficacy. We were early birds on smart working. And these days, we demonstrate how our view is now very essential, not only to the project, to protect the health of our employees, but also to ensure sustained continuity of our ongoing business. To better understand the benefit of this long-lasting practice, let me share with you a few data. During a normal working day, on average, 2,800 people used to be on remote working globally. By the end of this week, every single day, our IT system is connecting remotely 13 times the same people, 13 times people -- the people -- times the people it was used to connect just a few years -- just a few weeks ago. We are currently managing a number of simultaneous virtual private network connection that is 7 times the number we used to have before the outbreak without suffering any disruption. At the time we speak, thanks to the investment we took in digitalization, we know that half of our employees can work from home, minimizing the number of people present in our premises, reducing physical interaction and preventing the virus to spread. Virtual meeting platforms also show increasing utilization and good performance of the most common tools, maintaining the benefit of working with teams. Today, we can say that the first week of this huge smart working crowd are all across our geographies, so it goes from Russia to Chile, is working very, very, very smoothly. So if people can work from diverse locations, our asset will continue to perform, thanks to our investment in digitalization. I am now moving to the following slide, Slide #3. The group digitalization journey started in 2015. That changed forever the way the group manages its asset base, interacts with its customers and the way in which we all work. Most of the group asset base is digitalized. 100% of our generation assets are remotely monitored, and 100% of the renewable fleet is remotely managed. IoT sensors and machine learning algorithms provide information that allow to remotely predict equipment failures and to schedule plant maintenance activities in emergency situations, limiting the risk of our assets. Thanks to the deployment of 45 million smart meters and thousands of distribution network components that allow remote checks, we control in real time our asset performance, our assets -- reducing significantly the intervention of people on field. Customer operation and interaction channels are fully digital. Apps, mobile, web interaction, virtual assistance and chatbots are used to provide information, activating contracts, modify existing ones and execute payments. Our digital native business, Enel X, offers services that are 100% manageable and deployable remotely. Since May last year, 100% of our application and all our data have been moved to the cloud. We don't operate physical servers anymore. The move provides full accessibility from everywhere, scalability and automated operations. Our PSC infrastructure is cloud-based. It allows remote configuration and management of field devices remotely. The infrastructure of the contact center is also cloud-based. It redirects smoothly the workload in case of inability of a third party to other call centers. You can appreciate how being an early mover in digitalization represents now a key enabler of business continuity, managing, protecting operators and enabling continuous functioning at all levels in our businesses. So if our people, our assets are ready to face the crisis, our business mix, as shown in the next slide, minimize risks at macro and micro level. Thanks to the resiliency of our business, we do not see, for the time being, any delay in our strategic deployment in the medium and long term. So far, we have no signs of impact in our short-term targets. Starting from the macro risks, let me remind you that 80% of our business is within this planned period, contracted or fully regulated, hence protecting earnings from macroeconomic cycles and commodities volatility. The group exposures to currency is well mitigated. As shown in our latest Capital Market Day presentation, 100% simultaneous devaluation in local currencies translates into a maximum 2% impact on earnings. Moving to business risks. Margins are protected, and the 2020 production is sold forward. We are not experiencing disruption in the supply chain of renewables equipment while minor delays -- we are experiencing minor delays in the installation of smart meter. Our efficiency program is well addressed, potentially running faster, thanks to massive remote working and constrained travels. O&M activities on our asset base continue with no severe discontinuities. Concluding with financial risks. The credit profile of the group is very strong, well below the one of our peers, set to become even stronger in the future as we expect the group net debt-to-EBITDA ratio to decline from 2.3x at the end of 2022 compared to the 20 -- 2.5x at the end of 2019. The level of yearly refinancing over the next 3 years is only around 7%, 2.7x less than in the past 3 years when the refinance -- when we refinanced half of our gross debt. In particular, looking at 2020, with the issuance of the last sustainable development-linked bond during the last quarter of 2019, it prefinanced a good portion of debt that expires over the next months. Additionally, we have ample liquidity available to cover potentially 1.9x (sic) [ 1.6x ] the level of debt expiring in the course of the 2022 business plan. Let me now move to full year 2019 results. In 2019, the group delivered strong financial results. EBITDA grew by 11% year-on-year, came in at EUR 17.9 billion, proving better than our full year guidance. This outstanding performance was led by networks benefiting from the ongoing digitalization process and by global generation fleet and retail businesses. Group net ordinary income was up by 17%, in line with our expectation, reaching EUR 4.8 billion. This will allow us to propose at the next assembly a dividend per share of around EUR 0.33 per share based on a 70% payout ratio on net ordinary income. It is worth noting that the 2019 results do not yet incorporate the positive impact from our investment in renewable capacity development as new additions have been skewed towards the last part of this year and we will see -- as we will see throughout the presentation. 2019 has been also a pivotal year in the context of our decarbonization strategy, upon which our growth is predicated, as discussed during the Capital Market Day in November last year. In particular, in 2019, we have built an all-time record renewables capacity of in excess of 3,000 megawatts, while, at the same time, we have accelerated our exit from coal, planning coal plants' early closures. As a result, and this is the first time in the history of the group, production from renewables has overtaken that of thermal generation. To further support and accelerate this path, in 2019, we have created a new business line called Global Power Generation, which integrates Enel Green Power with thermal generation. Grids are key enablers of the energy transition. We continue to invest into digitalizing our grids by accelerating the deployment of second-generation devices. In 2019, we deployed almost 6 million second-generation smart meters, which reached the total of 13.1 million at the end of the period, almost twice the number at the end of 2019, representing 30% of the total smart meters installed. We added 1.2 million customers to our free market base. This reached a number of 17.2 million free power customers and 70 million clients overall, confirming our strong position, particularly in developed countries where liberalization of markets is underway. 2019 has proved to be a milestone year for rating improvement, both on the credit and on the sustainability ratings side. During the course of the year, the Enel Group has been upgraded 1 notch to A- by Fitch. Moody's has improved the credit outlook to positive. MSCI rated Enel AAA, while CDP, A. Results achieved testify the solidity and the sustainability of the business model that is capable to deliver value to all stakeholders and also remarkable financial results. Let me go now to Slide #7, on our sustainable CapEx plan. Overall CapEx in 2019 was almost EUR 10 billion. This is 17% higher than last year. More than 50% of this was devoted to decarbonize our generation fleet with Enel Green Power investing more than EUR 4.3 billion in renewable assets. Almost 40% has been invested in infrastructure and networks to the ongoing effort to digitalize and improve the resiliency of our grids. The remaining 10% was allocated to Enel X and to retail activities. Development CapEx represent 60% of our total investment, increasing 24% year-on-year and reaching EUR 5.9 billion, out of which EUR 2.3 billion was allocated to Enel Green Power, mainly in North America, Latin America and Iberia, at 1/3 to infrastructure and network to deploy new smart meters. More than 90% of the 2019 overall CapEx contributed to taking urgent action against climate change, which is related to Sustainable Development Goal 13 through SDG 7, 9 and 11. Looking at the 2020/'22 period, more than 60% of asset development CapEx is already addressed, supporting a visible growth path. If we focus on the decarbonization strategy, we move to Global Power Generation on Slide #8. As outlined in the Capital Market Day in November, we have created a single business line. This maximizes the value associated with our combined generation portfolio and accelerates and facilitates the decarbonization trajectory. At the end of 2019, the total renewable capacity of the group, including the one that we manage, increased by 6%, while thermal generation capacity was reduced by 10%, supporting a 20% reduction in CO2 emissions. During the year, thermal generation production declined by almost 20%, while production from renewables slightly increased despite the reduction in the hydro portfolio, reaching 110 terawatt-hours. For the first time in Enel's history, the production from renewable sources has overtaken the production coming from thermal generation. CO2-specific emissions reached 296 grams per kilowatt-hour in 2019. We are well on track to reach the science-based target of CO2-specific emissions by 2030, which is 125 grams per kilowatt-hour, this aiming to be fully decarbonized by 2050. Now if we focus on growth of renewable energy, we are on Slide #9. In 2019, as we said, we set a new record on renewable growth by building more than 3,000 megawatts in new capacity in the world. Out of this amount, 2,400 have been added in the last quarter of the year alone, and as such, it has not yet impacted the group's financials during the 2019 year. From 2020, at regime, this additional capacity will generate EUR 250 million of EBITDA. During the period, we have been quite active on portfolio management. We sold about 600 megawatts of capacity, and we acquired 650 megawatts from our joint venture in North America, aiming at increasing our consolidated presence in a key market like the U.S. as renewable installed capacities reached almost 46,000 megawatts, which represents, as we said, more than 50% of our installed base. Looking at the future, it is worth to highlight that in 2020, we expect to accelerate further our renewable growth, aiming at building more than 4,000 megawatts of new capacity, which, as I will show you in the next slide, has already been completely addressed. In fact, if we go to Slide #10, you can appreciate that 8,800 megawatts of our 2020/2022 target of additional capacity has already been addressed. That leads out 5,300-megawatt residual target to be covered by our late-stage pipeline that comprises of almost 36,000 megawatts, out of which 55% have a potential commercial operation date between '20 and 2022. The residual target is therefore covered 4x by our 2022 pipeline or almost 7x, including entirely our late-stage pipeline. This provides a significantly high confidence that we will reach our target of 14.1 gigawatts at the end of the plan. And on the next slide, so we are now looking at what happens to coal. The coal exit process has accelerated in the course of 2019. We are on Slide #11. The phaseout of our coal generation will allow us to take advantage of the opportunities that come from the technology development that have been making renewables increasingly competitive from a point of view of costs. In addition, coal phaseout will minimize the risks associated with the foreseeable acceleration of regulatory constraints aiming at mitigating climate change. In the course of 2019, we have taken important steps in this direction, including the closure of plants as Bastardo in Italy, the sale of Reftinskaya in Russia, the end of operation of group 1 and 2 of Alcudia in Spain, the disconnection and termination of the plant, Tarapaca, in Chile, with agreement reached within -- with the Chilean authorities in 2019 for the progressive closure of the coal-fired plants in the country. In addition, in September 2019, the Board of Directors of Endesa ruled in favor of the interruption of production associated with 2.5-gigawatts coal-fired plants in the Iberian Peninsula, Litoral and As Pontes, for which we have submitted a formal application to closure to the statute covered. As a result, in 2019, the coal capacity saw a decrease by 4,100 megawatts, reaching 11,700 megawatts, beating the year-end target of 12,200-megawatt coal capacity presented during our Capital Market Day, highlighting the accelerating effort at group level. Production from coal represent 16% of the total production. During 2019, it reduced to 37.6 terawatt-hour, which is 40% less than what we had in 2018. Finally, in 2019, revenues from coal were 3.5% total, while EBITDA from coal accounted from -- accounted for about 2% of the total EBITDA of the group. If we move to Slide #12, we see the development on retail. In Italy, the elimination of the regulated tariff is now expected to phase in starting in 2021 for small and medium companies and 2022 for the big bulk of retail customers. In 2019, our free market customers base grew by 1.2 million, of which more than 600,000 in Italy alone, partially offsetting the reduction of customers on the regulated tariff. Regulated customers declined by 2.5 million, mainly in Spain and Italy, with the Latin American market slightly increasing to 26.7 million clients. As highlighted during the Capital Market Day back in November, we expect -- we experienced the shift towards free market customers to improve the profitability of our retail business. In the next slide, we summarize the main operating indicators of Enel's infrastructure and networks. In terms of electricity distributed, 2019 saw an increase of roughly 20 terawatt-hours or 4%, entirely attributable to Brazil, thanks to the Enel Distribuição São Paulo. In terms of quality of service, in 2019, we have recorded an improvement both in SAIFI and SAIDI of around 6%. In our 2022 plan presentation, we highlighted the efforts we have been putting into the digitalization of our grids, accelerating the deployment of second-generation devices. In this respect, 2019 saw us continuing investing in second-generation smart meters, which almost doubled versus the previous year, reaching 13.1 million figure. Smart meters 2.0 reached approximately 30% of the total compared to a share of roughly 15% of 2018. On Enel X, we have to look at Slide #14. And as you know, through Enel X, we aim at capturing the opportunities coming from new value-added services such as demand response and battery storage, among others. The capacity linked to demand response increased by 2% to 6.3 gigawatts, while in 2019, we have been awarded a total capacity of 5,300 megawatts, which is now 84% of the current capacity. Battery storage, which will be more and more essential to the effective deployment of renewables, had an impressive growth during the year, with a 57% increase, reaching a capacity of 110 megawatts. In terms of development of the infrastructure that will be needed in order to support electric mobility, the number of charging points installed grew by 63% to 80,000. Public lighting points have decreased slightly. This is a result of the regulatory mechanisms that affect certain municipalities in Italy. In 2019, we have been awarded 40,000 public lightings in Italy, which will be activated in 2020, and around 100,000 more whose administrative procedure is now underway. Finally, on the rollout of the fiber optic networks, we have reached 7.9 million households passed, with a 55% increase versus previous year. Let me conclude with some consideration on shareholder remunerations in Chart #15. The delivery on our operating and financial targets enabled us to propose a shareholder remuneration in line with guidance of 2019. The earnings per share is 18% higher than the previous year. This will enable us to propose to the general assembly of our shareholders a 2019 EPS of EUR 0.328 per share, with a 17% increase versus last year based on a 70% payout ratio on net ordinary income. This is higher than the minimum guaranteed EPS of EUR 0.32 per share. So we meet the minimum guarantee floor that we have put forward in front of our shareholders. The robustness of our sustainable business model and the operating performance standards we have consolidated allow us not to suffer from business disruption even in the situation we are living now. The double-digit growth path of the group is set to continue. In 2020, EPS and DPS targets underpin growth in excess of 12%. I would remind you that until '22, shareholders will receive the higher amount between 70% payout on earnings and a minimum guarantee that has been set at EUR 0.35 per share for the year 2020. I will now hand over to Alberto, who will go with you through the details of the operating and financial performance for 2019. Alberto, it's yours now.

Thank you, Francesco. Good evening to everybody. So now I am on Page 17 with a recap of the financial results. So for the EBITDA, up 11% to EUR 17.9 billion. Ordinary group net income up 17% to EUR 4.8 billion. FFO, EUR 11.6 billion, up 5%. And group net debt at EUR 42.2 billion (sic) [ EUR 45.2 billion ]. There is an increase of 10% versus 2018, related mainly on change in IFRS accounting and FX impact and higher investments that we will see after the details on that. Moving to Page 18. In this slide, you can see a performance summary according to the trend we presented in the last Capital Market Day. EBITDA is up by EUR 1.7 billion, with an 11% growth, as said, and the main drivers of this evolution are the EUR 600 million associated with the decarbonization trend, which is captured by our global generation fleet; enablers and platforms, mainly networks and Enel X, accounted for almost EUR 900 million; and finally, retail recorded a EUR 200 million growth, thanks to higher margins and volumes in Iberia and Latin America and thanks mainly to efficiencies in Italy. I will detail the key drivers for each business in the next slide. On Page 19, I'll leave this image on our efficiency program. Over the period, nominal operating expenses decreased to EUR 8.5 billion, and this was driven by clear efficiencies of more than EUR 300 million. 50% of these efficiencies have been recorded in infrastructure and networks, with the net direct fleet between retail and conventional generation. We do consider the target of EUR 1.2 billion of cumulative efficiency in the 2020/2022 period, the target at which would be supported by a huge investment program in digitalization impacting across our business. Moving now on Page 20. Enel Green Power and renewable capacity, renewable development, volume and EBITDA came in at EUR 4.6 billion, a 2% increase versus 2018. As said, this is not reflecting the contribution from the capacity that we built in the last quarter of 2019, that totaled around 2.4 gigawatts of new capacity. The performance of this increase was mainly impacted by the following dynamics. We had a negative impact of around EUR 260 million due to lower production volumes in Spain, Italy and Latin America, triggered mainly by lower hydro production. Then we had a negative impact of a reduced level of incentives mainly for reducing time consumed in the United States and Italy. On the positive side, we had an impact of EUR 350 million positive for higher prices. This was mainly in Italy and Latin America. We had the early termination of PPA in Chile that we have already commented during the year for EUR 80 million. And the EBITDA contribution for new capacity installed in the year was only EUR 80 million, as said before, because we had a couple of majorities hold at the end of this year. And average impact of the capacity in 2020 is in the range of EUR 250 million. Moving to Page 21. On the conventional generation and global trading in Enel, the EBITDA increased 45% and came in at EUR 1.6 billion. This is just EUR 500 million before that increase and is the result of higher volumes out of -- on our nuclear fleet in Spain posting EUR 80 million and higher prices of around EUR 370 million, mainly through Iberia and in relation with the new capacity and in Latin America, thanks to the hedging strategy and dollar indication of our fleet. We have efficiencies of around EUR 80 million. And ancillary services were positive, with an impact of EUR 60 million. Then we have, also for generation, the impact of the early termination of the Chile PPA with EUR 150 million effect. It is the 50% of renewables and 50% on generation. And then we had other negative regulatory effects totaling around EUR 100 million. The vast majority was seen for the regulation of Ireland and Argentina. Now I am on Page 22, onto the slide of our infrastructure and networks line. And ordinary EBITDA came in at EUR 8.2 billion, with an EUR 800 million increase versus the previous year or 11%. Of this 100 -- EUR 800 million, EUR 300 million, I believe, is due to the outstanding performance of Enel São Paulo, out of which EUR 90 million for efficiencies, EUR 120 million for regulatory improvements and EUR 100 million with perimeter effect. The remaining EUR 500 million of EBITDA are split between positive regulatory changes, mainly in Brazil and in Argentina because of recognition of the fuel regulatory. And this regulatory change is positive, are around EUR 320 million of positive; EUR 260 million of increase for investments we made during the year, so it's a rapid increase; EUR 70 million on efficiencies. And then we have negative impact because of CPI and the cost of FX impacts. CPI was around EUR 100 million, FX impact for around EUR 90 million. Moving to Page 23 on retail. EBITDA of retail, to the EUR 3.3 billion, or with a 7% increase versus last year. And the main part of this increase is related to the free market. And in particular, the free market EBITDA grew around EUR 150 million, at 6%, and this is a result of an increase in the unitary margin, both in Spain and in Italy, and increases in the range of 12% -- 15%, versus the previous year. Regulated market EBITDA increased by around EUR 50 million or 10%, and this is mainly because of the positive contribution of Latin America that is roughly EUR 90 million and the negative impact from Italy -- in Italy where the migration from the regulated business to the liberalized business is impacting, with a very big part, for around our previous businesses. Then we had just about EUR 100 million of efficiencies that increased the level of results. Moving to Page 24. Now so we can move to the financial management section. As I've said, and as you can see in the table, ordinary EBITDA -- ordinary group net income, sorry, came in at EUR 4.8 billion, EUR 700 million higher than last year or 17%. And this is many thanks to the increase in ordinary EBITDA and a lower tax rate, which more than offsets the increase in D&A, other financial expenses, minorities and the decrease of the results from equity investments. Now we go and look to the single items. D&A increased by around EUR 445 million. 70% of the increase is mainly related to the transition of new accounting principles and the consolidation of Enel São Paulo for the related quarter of the consolidation reporting indicated this year. The remaining portion is related to the target level of investment that we have been able to achieve. The increase in the -- talking about financial expenses, the increase in financial expenses is solely due to other financial expenses. It means that the cost of debt in the period declined by around 40 basis points. And other financial expenses grew by around EUR 50 million, following the consolidation of Enel São Paulo and the higher actualization of termination benefits and pension funds in Nigeria and Mozambique. The result from equity investments stood at minus EUR 90 million, mainly due to the North American joint venture unwinding. Such, the overall result of tax in fact decreased by around EUR 96 million, this is mainly due to roughly EUR 300 million increase for higher earnings before taxes. But this number has been partially offset by a positive impact related to fiscal incentives on intellectual property gained in Italy, the recognition of the disputed assets in Argentina, Chile and Brazil, and also the carbon 2018, we booked some positive one-off items such as the recognition of the pretax assets associated with Enel Distribuçao Goiás in Italy. Net of this loss, the normalized tax rate stands at 30.1% better than the previous year. And the final, minorities -- minorities increased by 18%, thanks to the performance recorded in Latin America. Moving now to the cash flow, on Page 25. As you can see, FFO stands at EUR 11.6 billion, up EUR 500 million or 5% versus last year driven by ordinary EBITDA growth as alluded to during the year. EBITDA. We had a higher EBITDA after provisions for around EUR 1.9 billion or plus 13%. We have, at Enel, the natural net working capital confirming our efforts in stabilizing and optimizing it. We have higher taxes paid, but this is mainly due to advanced specimen tax payment dynamics. Free cash flow stood at EUR 1.7 billion, concerning the capacity of the group to cover debt investment growth with the operating cash generation. And for sure, we had EUR 10 billion of investment versus the 8.5% we had last year. Moving now to Page 26. On debt, our net debt stood at EUR 45.2 billion, closing lower than our expectation in our plan at Capital Market Day that was EUR 45.9 million. This, thanks to a better FX scenario and better outcomes for the expected active portfolio management performed in the last part of the year. Changes are driven by positive free cash flow of EUR 1.7 billion as commented, and dividends paid for EUR 4 billion, up EUR 500 million or 15% versus last year. Then we had the positive contribution of active portfolio management, deriving from these closed in the last quarter at the disposal of renewable assets in the U.S. and the Reftinskaya plant, the coal plant in Russia that we have sold. Then we had a EUR 1.1 billion negative FX impact from devaluation of local currencies against the euro. I would remind you that this final impact on debt is a mere accounting impact. They almost are entirely neutralized by debt reimbursement, thanks to our hedging derivatives, and the level of net debt at the FX rate, thanks to hedge amount to EUR 44.4, this is the value of reimbursement of our debt. Our gross debt decreased by around EUR 4.1 billion including IFRS 16 versus the start of 2019 as a result of the evolution of net debt, which have increased by around EUR 2.7 billion as well as EUR 2.3 billion increase in cash due to bonds issued in the late 2019 that are used to refinance the 2020 payment activities. And this is my last chart. I now hand over to Francesco for the closing remarks.

Thank you, Alberto. Let me now conclude with this chart. 2019 proves to be a very important year, outstanding financial job, coupled with the fourth inning operating achievement, such as this all-time record new renewable capacity and the acceleration of coal exit. The dynamic of substitution of one generation with the other now appear a value-creation driver, and this has had and will have also in the future a big push to our value-added. The strategic shift we've had many years ago is clearly bearing fruits. The group has become more sustainable, more efficient, more profitable and less risky. A sustainable integrated business model optimally positions the company to capture the opportunities that arise from the transition -- from the energy transition. It is fostering value creation to all of our stakeholders. Financial results are more predictable and more clear to see. We have sharply and preemptively acted to limit headwinds arising from the current coronavirus situation. We accommodate more than half of our workforce on remote working without disruptions on operations. Additionally, investments in digitalization offer now important hedges against sudden crisis, allowing business continuity. Thanks to an integrated resilient and diversified business model, there is no evidence so far of significant operating, economic or financial impact in the short and medium term. We can leverage our ample liquidity available and a very strong balance sheet to face any volatile scenario, supporting the deployment of the CapEx plans and the commitments on dividend. Thank you for your attention. Let's now open to the Q&A sessions that Monica will manage. Thank you.

Okay. Perfect. So as anticipating -- as anticipated to run the call as efficiently as possible, I will be the analyst voice at this time. We have received so far questions from Akros, Bank of America Merrill Lynch, Barclays, Citigroup, Crédit Suisse, Deutsche Bank, Equita, Exane, Goldman Sachs, Intermonte, Kepler, MainFirst, Mediobanca, Morgan Stanley, Santander, Exane, SocGen, S&P and UBS. So I'll start with the first one, which I think is for our CEO, and is the following: The virus outbreak will likely trigger a recession in many countries, if not globally. From your market of reference, which are your expectations on electricity demand, power prices and commodities?

Okay. So let's -- one is the expectation, one is what we observe. We observed a drop in demand as the industrial sector slows down. We have observed that in Italy. We are going probably to see that in Spain in maybe another 10 days. The magnitude will be strictly correlated to the length and depth of the shutdown, so how long this shutdown will continue. We have seen a surge in residential demand as -- of course, as people are forced to stay at home. So the net result is a drop, in general, in the electricity demand, which, as you can appreciate, has different values to us. The margin we make on industrial customers are not similar to the margins we make on residential customers. It's very early to say if one presents to the other. Our hunch is that, for the time being, we are paradoxically almost better off the way they -- the way we are today than before, but this is clearly a very transient situation. Power prices. We think that the way we see the markets work, the impact is on prices to go down because of lower demand and also because of the weakness on gas prices, where gas is at the margin. The market that we are referring to is Italy and Spain. Any reduction in power demand would lead to a reduction in gas consumption, and that will weaken further gas. I should add that this is clearly something that we have been hedging quite early during the previous year. On commodities, as we say, gas, we see gas in Europe weakening along the global gas price assumptions due to the increasing oversupply. We think this is going to continue like that. And we have become more variational just for 2020, but also for the next 2 years there. On CO2, we anticipated some weakness because the ETF was showing that at the beginning of the year. This follows generally the weakness on commodities. So we see weakness on the CO2, which hovers around EUR 20, which is quite a low level compared to the previous year. Brent has been very low, as you all know. All major investing banks are revising their forecasts. We have not really a big say on Brent. In Europe, gas is becoming increasingly decoupled from oil prices so we don't look this -- we don't see this as a meaningful commodity for our business anymore in many ways.

Okay. I think we can move to the second one, which is again for you, Francesco. What will be the impact on volumes sold and on generation retail margin? I assume it is related with the coronavirus situation.

Okay. Maybe you should all remember that we always sell forward the year in which we enter. So the 2020 here volumes, it's sold and margins unlocked. As you know, this is never 100%. There's always a small part of unhedged generation, which has to do with uncertainties of hydro regimes that it's really locked in. In looking further, we have sold 21 -- or 60% in Iberia, almost fully in Latin America and 20% in Italy. So if you look -- if you take Latin America out, which is covered mostly by PPAs, the volumes that we were discussing in Italy and Spain are locked in in prices at precrisis level. So if we look at this and the integrated margin approach and the resiliency on the margins, we can -- on the customer base, we can say that, basically, during 2020, we see very little, if any, impact on the lack of demand and the weakness of prices during the next 12 months -- not 12, but 9 months at this point.

Okay. The third one is for our CFO. Can you provide the sensitivity of analysis regarding economic downturn, a reversal in Italy and in Spain?

Well, so by far, we have no evidence of material impact of the EBITDA level for Italy and Spain. We see there are a lot of moving parts in the business that might eventually balance out. This is, I think, the benefit of managing the grid business because -- so the business is moving in very different parts, so for -- an example for all, but we have a lot of examples. So we are seeing the reduction in the demand of the business customers. But on the other side, we are looking at an increase in the demand of the retail customers. And because we are present in the 2 segments, it's clear that these 2 things could balance because the margin we are doing on a retail -- on the retail side of the customer, the B2C side, is almost 10x, 15x higher than the recent one. And this is present in all the parts of the business. So I think that -- on the other side, I think 80% of share of contracted and regulated activities, the 2 things, and this is giving us signals that we have a very negligible impact right now of the shutdown of Italy and Spain.

Okay. Again, for you, Alberto, a provocative question. If prices go down by EUR 10 per megawatt-hour, what's the impact on EBITDA and earnings?

Well, sure, also for this, if -- the question is related to our answer to what the sensitivities are, it's clear that a EUR 10 impact, so only looking at the production, could be a high impact. But this is not the case because on one side, we have almost all our production hedged for 2020, so every change of prices is not impacting us. And looking forward, as I said, we have to look at our integrated position, integrated with our position on customers. And like in the past, so the 2 things can balance together and so mitigating also the effects of such a big swings that is not so -- a great impact. It is not impacting the sales results in 2020.

Okay. We go back to Francesco, that's for you. Any risk that the new green deal would be delayed or reconsidered given the need by the European Union and its countries to deploy financial resources for supporting the economy in emergency? Francesco, your line is closed.

I don't think this is the case, when we -- can you hear me?

Yes, now we can hear you.

Yes, okay. I don't really think this is the case when you look at what several spokesmen from the European Commission said, they continue to see this as a priority for the commission. Honestly, I think the amount of money that was around the Green New Deal was and is more aimed at the necessary measures that need to be accompanying the investment on green energy. So the sustainable fund rather than the investments themselves. This New Deal is happening because it's economically viable, not because it's another round of incentives. So if you look at the fact that perhaps after this crisis is over, there is going to be the need for a kick starting the economy, well, this spend, the Green New Deal is exactly the case that needs to be pushed around. So we are keeping the work on the development of the pipeline. We are pushing for permitting of additional projects. We don't see at all the need to consider a slowdown. The contrary, we think there will be a need for investments to restart after a period of slow growth, and I think this would be a perfect opportunity for renewables to pick up speed again.

Okay. So the next one is again for you, Francesco, and we go back to Italy. Which actions were implemented by the Italian government in the decree approved early this week? Do you see any risk of near or medium-term intervention on tariffs?

Look, the system in Italy has always had an intervention on tariffs in the face of external extreme event. When there is an earthquake, when there is a big snow storm, when there is a flood or some catastrophic event, we always have the regulators saying, those people affected by that earthquake in that area, freeze the bills for X months, and then you recover the money over a certain number of additional months so that they get a break and they are not suffering additional pain because of invoicing of energy deals. That has been the case also here limited to the 11 municipalities of 2 regions that were the early starting point of the COVID-19 inflection in Italy. So we have a freeze on tariffs for a certain number of weeks, I think, for these people, but limited to that. This has not been obviously extended to the whole of Italy. This decree that came up does not contain any of that, and there has been no thinking of it. What we have had, though, is the suspension of dunning. So we cannot cut the energy supply for people that are not paying. And this is probably reasonable because many people are closed at home. And all those people that do not have digital payment or bank payment enabled, but are those that used to go to the post office or to the bank to pay the bill, need to be protected from the fact that they are, even if willing, unable to pay because they just cannot move as freely as they wish. So in that sense, we think this is reasonable. And by the way, it's something that we totally support given the situation. But it's really not having an impact on us.

Okay. Then now we'll move, again, a question for you, Francesco, we move to Latin America operations. What can be the impact of virus outbreak on your Latin American operations? Do you have a contingency plan on your Lat Am operations?

First of all, let me say that this very much depends on the wisdom of Latin American governments to act quickly and do not wait until -- at least until the very last minute, as it seems to be the case in other parts of the world. So they still have a chance to act early -- earlier than people think and cut this virus while it's really small before it becomes something difficult to manage. So the impact can be different according to their reaction time. As we can -- what we have done, we have basically put all our operations in Latin America in the same safe operating mode that we have done in Europe. So the people there can go in smart working has been migrating to smart working this week. Tomorrow is the last day of the migration. So after that, everybody would be smart working everywhere in Latin America, except, of course, blue collars and other people that need to work on power plants and networks. In those -- for them, also, what we have done in Europe is a reduction of the shifts, a reduction of the people that are on the field and a different way of managing the spaces so that the number of people and the distance between them is such that there is a very, very limited chance of any contagion, and the protective gears add to that. We have to say that this is what we have prepared. An impact at this point will very much depend on the response -- timely response of this government. This virus is the same. I mean it affects people independently on where they live and what language they speak. Its spreads and the contagion dynamics are identical everywhere. The only difference is whether the social system is quickly responding to the challenge or just dragging its feet and therefore, having to pay a higher cost later on. So we'll see it growing in the next 2 weeks which of these countries will react in the right way and which of those will drag it a little longer. But the tune will be based on that.

Okay. Now we go to the CFO now on FX rate. Can you please provide more color on your current expectations on FX versus planned scenario? And provide the financial impact associated to FX stand-alone for 2020?

Well, it's very difficult to say what could be the expectation for the full year. It's clear the currencies have been very volatile in this period, but it was largely expected. I can say that we have already provided the market with sensitivities in the Capital Market Day as you remember. We said that a contemporary decrease in the depreciation of 10% of Lat Am currencies will impact roughly 2% on net income. So if we assume that the final FX will be the level that we have today or we have at this stage, the overall impact that we can see would be in the range of less than EUR 100 million to net income. On the dollar side, 2 impacts are important. On one side, now that the euro is weakening a little bit against the dollar, this situation is going to increase our EBITDA expressed in dollars. On the other side, it's going to increase the level of debt. As I said, as you can understand, if we can't -- this year, we closed at EUR 45.2, notwithstanding the impact of FX, the real value of that is EUR 44.4, so we have a reduction. And this is the level set, EUR 44.4, that is sending the level of dollars we have. So on the dollar side, the weakening of euros are going to increase EBITDA and it's also to pay -- to [ stay ] the debt fixed because of the hedging we made on currency.

Okay. Another question on Lat Am, which is partially associated with FX, again. Can you provide the sensitivity of announced EBITDA in Latin America to the economic downturn, for the CFO?

Well, also here, so we don't see any major impacts on the business we have running there. We have the vast majority of the business extrapolated. And so we have limited needs of commercial activities. And on the other side, we have the development of renewables, but it is not so huge like in the last year. And it's attached. So it's clear that here, we can have some impact on the financial side, mainly on behalf of -- so during the shutdown, we will foresee some delay in payments. But right now, it's the only impact that we foresee.

Okay. We move to -- back to the CEO. Analysts are asking, can -- to provide an update on digitalization projects ongoing. If you can see any impact on digitalization from the current crisis, positive or negative, I guess?

Okay. On the negative is minor slowdown in the substitution of second-generation meters in Italy. In order to comply with some of the regulatory -- of some of the measures that the government has put forward that is limiting the activities on the field to strictly necessary -- activities that are strictly necessary to ensure the continuity of business and nothing more, we decided to temporarily suspend the substitution of meters during this lockdown period. So that might result in delay or, let's say, less meters being installed during the year to the tune of about 300,000 -- 300,000, 400,000 maximum, which we might see maybe if it's possible to recover this during the rest of the year if the lockdown is lifted by the end of April, for example. And that's on the negative because of this physical constraints that we wanted to be sticking to. Obviously, this crisis is terrible. It's something we really don't like, but from the point of view of the development of digital, it's an incredible acceleration. So all of a sudden, we have a fully digitized working environment worldwide to -- continuously interconnected with platforms and people working on them, which was probably 1 dream we had, we would be there maybe in 2022 or something like that. All of a sudden, we are there. We're working since the last 10 days in this environment, and we are discovering a lot of things. So I think all in all, all our digital activities will have an incredible boost from this exercise. Like I said, it's an unfortunate case, but this is a positive, which is the development of platforms, new applications. The mindset change that this entails on people is phenomenal. And the fact that we have now a completely virtual environment into the cloud, in which we can multiply the chances of exchange data and of improvement of way of work, we will keep this experience forever. And this will change the way we work in a very deep way, much more faster and a lot more wider in a big, big way going forward. So I think, yes, there is a negative, which is this delay in the installation of meters, but there is a big positive which is a major acceleration in all our projects and all our data-related tasks, which we'll be able probably to appreciate by the end of this crisis. So let's say, roughly around this summer. At that time, we will draw the conclusions and could be, I think, quite surprised in what we have achieved in this.

Okay. We move to a question for the CFO. What is the likelihood that now as you moderate its CapEx spending, its cash flows are impacted by the coronavirus situation or is there sufficient other cash flow mitigating levers and/or headroom?

Alberto, you are on mute.

Yes, I'm here. Sorry. The [ likelihood ] that we have to moderate CapEx spending with the current liquidity position that we have is almost 0. [ Let me express the numbers -- that impact is for this ]. We closed the year with roughly EUR 25 billion of liquidity available. There is EUR 8 billion of cash -- EUR 9 billion of cash and EUR 16 billion of lines available. The projection for the end of March that are now almost completed is saying that we -- we're still at EUR 24 billion, EUR 25 billion, if not higher than this. We have about EUR 5 billion of commercial paper, and we don't know if the market is going to be shut down or not. Take into consideration that the market, notwithstanding the last move from the Central Bank, will be completely closed. We are going to repay EUR 5 billion commercial paper, and we will end up in having more than EUR 20 billion of lines available. With this EUR 20 billion, the maturity rate for 2020 we have out after March is EUR 2 billion. And for 2021, we have only EUR 3.8 billion of maturity. So to cover debt maturity, we need only EUR 6 billion out of the more than EUR 20 billion of liquidity available we have. As you can -- on the other side, we have a very limited gearing ratio with 2.5x. So you understand we have plenty of strength not to have any impact on our CapEx spending, dividend payments because for the years, we can spend with the liquidity we have available right now.

Okay. We move to a series of question for the CEO into the global business line. So we'll start with the power generation and the renewables. Is any of Enel's capacity going to be shut down for the coronavirus outbreak? Or there is any implication on the phase-out plan?

No, we don't see any need to shut down plants because of the outbreak, no. And also, we don't see any implications on the phase-out plan because of the coronaries. We have no evidence of that and no reason to think that this has an effect on that. No.

Okay. We go to -- we go into renewables. So if growth in renewables confirm, will the virus outbreak involve any change in the geographical distribution of new capacity?

The capacity that is going to go online on 2020 and partially in 2021 is already up -- being worked up. So sites -- construction sites are open and people are working there. So there's no way we can change geographically at this point. That was the question. Maybe it has to do with the further downstream, and we don't see any reason to change geographies because of the virus, not at all. We not -- we are not seeing an impact on construction sites so far. We have taken a very clear and extreme cautious measures to differentiate and give workers all the equipment they need in order to work safely in that environment. We see evidence of -- no real evidence of cases in construction sites at this point. It seems that one of the safest places where you can go at this point is a construction site, at least from Enel. And one or the most dangerous one was the office. So far, the project work is ongoing, and we don't see a change in the renewable growth as we are talking.

Okay. Staying on renewables, any sign of disruption on the supplier side? How can you mitigate the risk associated with suppliers' delay on the performance? And I think this is for the CEO again.

Yes. I think here, there was an alarm during the Wuhan, Hubei and China shut down trade. Some factories were closed and some others just slowed down and many workers did not come back from their Chinese New Year holidays because they were prevented to fly. So there was a period in which suppliers in China were not able to confirm deliveries, and therefore, started writing letters saying, this thing keeps providing -- preventing workers to come to work. We will not be able to stick with delivery. That has affected -- that was affecting basically mostly the solar part of our development because it's more skewed towards a Chinese supplier. What we can say is that the workers have come back. They have been able to restart all the factories, and now production is getting back to normal. We see some delays but in the order of 40 days, 45 days. So all-in-all, that itself is not an impact that materially changes the story. We might have, for example, 100 or 200 megawatts and might make it during December or make it during January next year. That's the only difference. So far, that's it. Now when we go to wind, wind is a bit of a more complex story because wind is less China, much more Europe and the U.S., and there is no evidence so far of large delays, some slowdown, but nothing critical in Europe. On the U.S. is a question mark. It depends very much on how the U.S. will react to the virus and that we will understand probably in the next couple of weeks. Vendors today have not given us any meaningful alarm on delivery of critical machinery for wind farms.

Okay. We move to another question on renewables, which then about the pipeline. Will the pipeline be impacted at all?

No, we don't see any impact on pipeline due to the coronavirus, and development work is ongoing. And we don't see that as an issue at this point. No.

Okay. We move to networks. There was a question, which I think I just have already addressed about smart meters and broader digitalization CapEx. The other -- the next question is on O&M. Analysts are asking, what are the implications of restrained mobility for your O&M activities and for both generation and networks?

Yes, this is a big question because, obviously, we have to divide this in 2 fields. The control rooms and then all the, let's say, the ambient, the spaces in which people cohabit and remotely or locally managed existing plants. These control rooms are vulnerable places because, obviously, a positive case between the workers working in the room automatically triggers quarantine for everyone in the shift and a cleanup of the room. Cleanup the room is easy, but then you need to have another shift to come in, which is clean. So what we've done is check the interoperability of different control rooms on the same hardware. So a plant is managed by its own control room, but it can also be operably remotely managed by another control room in another plant. And so for the network control rooms, as they are interchangeable, can I manage the network of a region of Italy from another region rather than the control room sitting in that region? And the answer is yes. We've done a lot of testing. It all works. By the way, it has already happened once, that we had a positive case in -- a lot of [ positive ] suspect in Sardinia, and we were able to manage the network from [ the plant ] because we got all the people out. So that part is now expanded all over the group geographies. So all countries have gone through the same routine. We have a total redundancy on control rooms that enable us to manage this very, very, very safely. On the physical, we have taken 2 measures. We told about roughly to half of the workers, stay at home. You will have -- you will be paid at home, on-call. So you will not get out of home unless we call you to do something. So that half of the guys went out from the field in their houses. The other half, they work in shifts that have changed their composition and behave in a completely different, very customized way. They have protocols of distancing one to the other. They have special gear to protect themselves. They are always the same guys in the shift. So if one guy gets sick, only that shift goes out. They are not mixed every day. And with these precautions, so far, we have been extremely effective in having basically 0 cases -- actually, we have 2 cases over more than 15,000 people. So it's a fantastic way of working. Of course, this can go on as well as long as only ordinary maintenance and strictly related to continuity of service is needed, but of course, it cannot last forever because then there will be additional burden on the equipment that we have to carry out. But this can go on for at least, I would say, 6 months without any particular problems.

Okay. We move into retail. To the CEO, what are the latest on your retail business? Do you expect any further delays in the approval of decrees that will kick off the process of regulated tariff elimination?

Well, to be honest, I think this is not today the hottest issue on the table of the Minister. So if the question is, is it going to work like hell in order to issue the decree now? I would be surprised. I think they have a lot of other things to worry about. So is it urgent? Not really. We're looking at 1 deadline, which is January 1, '21, for 3 million small -- very, very small businesses, and 1st of January 2022 for residential customers. I think if this goes on for a longer time than April, May, they might maybe push back the '21, '22 [ phase ] for small and medium business directly to '22, that's the maximum thing that can happen. But it's a minor thing overall.

Okay. We'll move into a question for the CFO. A question dedicated to the retail. Analysts are asking, what the real impact of the current crisis might have on retail business of Enel.

Well, right now, we have no any important signals of a complete change and a change in the [ naturality ] of the business. As I said before, we have different parts moving because of the situation. So the B2C demand is increasing. The B2B demand is going down. We have lower acquisition on one side, but we are losing less customers. So all in all, we have less cost to managing the business. So we have more efficiencies. These are the trends that we are looking at. Now it's only 10 days that we are looking at this trend. So they are not consolidated. But signals are saying that both these parts moving together are giving the results. That is they are not changing the overall trend of the business result for the retail business.

Okay. So the margin question that was the next has been already addressed by you, Alberto. So I'll move to a question for the CEO. What the impact will have, the crisis, on retail bad debt and churn rates?

So clearly, we think that there would be a slight increase in bad debt that is driven by the stopping of the dunning process and the temporary stop of the disconnection process. I tell you, this is a small increase because we're talking about 1 month or 2 months or 3 months of this to go on. This will be handled through some managerial actions, which we have identified that have to do with credit verification programs. So preemptive credit verification program at some factory. On churn rates, I think Alberto told you already, that there is a slowdown of everything. So the slowdown of churn rate, the slowdown on acquisitions, so everything is kind of getting into some kind of an hibernation situation, which on the very, very short term, it's positive for us because it's basically in cutting costs, preventing -- at par with customer base. But this is probably going to last as long as the lockdown lasts, so as soon as the lockdown is lifted, we go back to -- at least, we go back to where we were before.

Okay. We go back to the hedging strategy. Few analysts are asking, if we have changed our hedging strategy following the recent fall in oil prices and ahead of the expected decline in power demand? I think it's for you, Francesco.

No, we have not. I think this relates to 2020 as you've heard. I think 2020 -- I think strategy is already there. I mean it's locked in. It's there, and it's -- thank god, it's fully working, and it's been a very good hedge that we set up in 2019, looking at what happened. In 2021, as I said, Italy is only 20% locked in hedge. Iberia is 60%. So the volume sold forward locked in -- are locked in at higher prices than the one that we have. We are now assessing basically the time between now and May would be anyway a good time for hedging. This is a very bad time for hedging this for next year, typically. And it's going to be used to analyze the end of the lockdown, when it is going to happen, and therefore, what kind of hedging strategy we're going to have looking at the potential restarting of the factories. Obviously, the factory is shut down because people are unable to move, but as soon as they are free to go back to work, they will be again starting up. So we see this demand to re-pick up again during 2021, and we have to be careful to not make a mistake and thinking of this situation remains constantly there for a longer time than a few months. So to answer in a short time, so far, we haven't changed it because 2020 is already done. '21, we are looking at the time by then -- by which people will be back to work and see how quickly their factories will start. At that time, we will evaluate whether the hedge strategy needs to be changed or just repeated again.

Okay. Now a question directly towards CO2 prices. Do you believe the current MSR will be sufficient to mitigate the impact of the expected economic slowdown of CO2 prices?

It's not a question of belief. It's a question of fact. So far, yes, it has been like that. I mean we're talking about the last 2 weeks, okay? In the last 2 weeks, that's not been the case. If it's going to last forever -- it's likely to last because volatility will remain high at least on CO2. So whether it's very mild, there is hydro -- quite -- and strong wind, so thermal generation is clearly stressed, but the lack of industrial demand has given a lot volatility to the residual supply -- to the residual demand so it has increased the need for a system balancing the services, which opened a good space for revenues there. So I think, so far, it looks like, yes, it might be compensating pretty nicely. Again, it very much depends on factories going back. If factories go back that the -- their load will stabilize again, and this would change. But so far, it's working.

Okay. Question for the CFO. How do you see your liquidity available and refinancing needs vis-a-vis the current situation and the potential worsening associated with the virus outbreak?

Well, I think I have already answered this question because I have really outlined what our liquidity position is. Only I can add to that also if we take into account that we cannot roll over our commercial paper position that today is EUR 5 billion, also keeping this into consideration, it is not always the case that the market is not billed on commercial papers, we can cover our maturity, our debt, until 2023. So I think that is certain enough to explain what the good position is towards liquidity and availability.

Okay. We stay with you, Alberto. For the next question, if there is a rating downgrade for Italy, will your credit rating be affected at all?

Well, I think that in the last few years, we saw a different approach from the rating agencies. In 2019, it reached the cut off Enel's rating from Italy because they did not see an automatic link with sovereign rate changes. Also Moody's stressed that the positive outlook that we have reflected the increasing international diversification and corresponding reduction in the proportion of earnings from Italy. In general, Enel's rating is already met sovereign [ strength that was announced ]. So in case of a downgrade of Italy, there should not be an outer market adjustments of Enel's ratings.

Okay, we move to the CEO. Are you planning to add the AGM as schedule on May 14? What flexibility you have? Will the dividend payment be affected at all?

We have -- the date of AGM is May 14. This, according to also the official calendar that we've published a time ago. Today the Board of Director has sight of May 14, and that's what we can say. We are quite confident that by May 14, this crisis would be over and that it would be not that of a constraint for having AGM's -- physical AGM. But because of the rules that have been approved under these stressful conditions, we are now -- we could now also hold the AGM in a virtual manner with this [ case ]. There is also flexibility to move it in June, which I don't think is going to be crucial, but we could do that, too. Our dividend second tranche is paid in July so even if we hold an assembly in June, we would still be paying as regularly the dividend in July, as always, and we don't see any reason for changing that.

Okay. We move now to the golden question, the question of questions, for you, Francesco. 2020 guidance is confirmed. Which are the main threats with respective targets? And lately, a few analysts are asking to add our view on the business planned targets, so beyond 2020?

Look, I think what we try to convey here is that facing what was going on, we took very, very early action and extremely effective actions looking at how at the end it unfolded. So we are now very sound in managing our business chain over the last few months, not just a few weeks. And I think this is a good start to say, can the 2020 business continuity and also business performance be in safe hands? The answer is yes. Even if people are not in the office, even if people out in the field are working in a completely different fashion, we have evidence that the business is running as we intended it to run. So yes, from that standpoint, we don't see a problem. I think this is possible because we digitized so early and we digitized so deeply. And thanks to that, I think we can safely say that can be managed, with 2020, we don't see an issue. Now you also know that we have a very robust and sustained business model. This is a business model that can take a lot of heat. It can take heat at the regulatory level. It can take heat as well as weather different conditions. It now take heat, as I mentioned that we never really thought of, which is a viral infection. I mean I challenge anyone that has this war games to think of something like the COVID-19. And -- well, it's easy to be managed in a pretty strong way. So we have a very visible earning horizon. It's more than 80% of our EBITDA is coming from regulated activities, all contracted activities, which do not really -- are not really that affected with COVID-19. So we don't see any reason to say, in 2020, we will have an issue or anything apart from what normally would have been the case. If it rains a little more or a little less, if a panel is coming a little earlier with some delays, stuffs like that. But honestly, this 2019 thing is something we took. And I think we can rest assured that we can [ pass ] through this cycle with very, very little damage, if any. And of course, the guarantee that we put on the dividend is there. And so here, the people don't believe that we can do it. They can still believe we can maintain. On the '22 time horizon, I think the crisis, on a viral basis, will be over by the end of the year as soon as a vaccine is produced and a lot of bright people are doing that and there's a big race to see who's the first. But I think at that point, we put aside -- we put aside this COVID-19 thing and what we'll have to focus on is whether the world would be in a recession or a big recession or just a big recovery. Ending that, I think we might have a 2020 November Capital Markets Day with an acceleration to our targets as we expected because we think this will -- this might be a restart of a big cycle of investment in order to jump-start the economies that have been suffering for a while, or a business as usual environment. So we see more upside than downside the way we used to see. That we do because we have a lot of liquidity and a lot of strength in the balance sheet. So we can resist through this potential ups and downs in the next months without any concern. So the answer is yes.

Okay.

Maybe this may help.

Sure, Alberto. Get in.

So only to give some colors on this question, I would add only a couple points. It's clear that we can manage our business. We can manage the macroeconomic scenario. So I said before, the final outcome of effects and impact, so now we can predict what would be the final scenario by the end of the year. In this case on the science, we can say that the impact will be limited because on our final results, it says, so it tends to decrease versus our assumptions of the overall currency will lead to a decrease in its ability to -- so the level we see today is driving 100% in the key accounts that is on the overall target we had for the year and because we have also the minimum dividend set is negligible for those. On the other side, I think that -- so in this period of shutdown, where we'll see some delays in payments to move around, so we will have some decrease and delays in the cash flows. That we think that with a limited shutdown of 2, 3 months, we'll be fully recovered towards the year's end. But on this side, as I said before, with the ample level of liquidity we have, we can sustain a [ better decrease ] and better outlook for our financial expectations.

Very clear. Next one for, I am staying with you, Alberto. Assuming a prolonged benign interest rate environment to support the currencies, but also the possible increase in the Italian government's bond yield, what can we expect on your cost of debt?

Well, so no impact in this at all. Because as I said, so for this year, we have no maturities. And also for the next years, maturities are very, very limited. So I said before, we have only like, in fact, within Europe, EUR 6 billion to be refinanced in the next 2 years. So I think that nothing will impact the road towards the decrease of 300 basis points over the turn-key or to our cost of debt.

Okay. Again, with you, Alberto, I think that has been partially answered, but probably the more comprehensive type of question. If there is a liquidity squeeze scenario and you have to choose between paying dividends or reduce CapEx, what would you choose?

Well, we have no, today, in front of us, that decision to be taken and I think we will not have for a prolonged time a possible shutdown, that is not now the case in front of us. So I do think that for the financial strength we have, we can carry on everything on our plan. It's clear that we expect the way we develop our investments, in a way in which we can modulate it because we are not fully committed for years. So you know, so our commitment is in the range of 1.5, 2 years. And this allows us to move our CapEx. So this is something that we can do also to manage some -- so prior to this spreading in different countries, but it's the very last chance. The free state that -- with the financial strength we have, we don't have this kind of [ problem ] in front of us.

Okay. CEO, to you. In the current crisis scenario, what is set to happen to your dividend policy?

We have a dividend policy that we have presented this November. We confirm the dividend policy. We also confirm the floors protection that we gave to the shareholders. We said last time in November that this is a reasonable policy, facing a very robust and resilient company in a very sustainable business plan. And I think this -- the present scenario has not challenged these assumptions. So we confirm this policy.

Okay. Then again, to your Francesco, would you consider to activate a share buyback on Enel's share? And how is the minorities buyout progressing in South America?

Okay. We have the optionality to share buyback. Yes. The Board of Director asked the -- a new -- the next AGM to renew this authorization. So I confirm that we will propose to the new AGM another -- another time, the EUR 2 billion share buyback option for about 500 million ordinary shares of Enel, which is about 4.92% of the share capital. Yes. We'll roll it forward another time. So we will keep it as an option going forward. Yes, we are continuing the purchasing of shares to the swap traction on Americas and Chile. Okay. This is one minor thing that the common crisis is helping us with because it creates a goodness in pricing in the shares that make it better for us. I hate to say this, but it's the fact. That is going on.

Okay, great. I think we have just a couple of small questions on the full year '19. One is on the percentage of volumes sold to business clients versus residential at the end of '19. Alberto?

I think we have -- okay. Alberto, you do that.

Sorry, can you -- I hardly heard you. Can you repeat it?

Sure. The exposure -- the percentage of exposure in volumes to retail versus -- sorry, in retail to business versus residential?

Okay. So where? In Italy and Spain, in there?

Global, I guess. Well, it's not specific. Worldwide, yes.

Well, I think in Italy and Spain we're talking about so 60% and 70% on B2B. Globally speaking, on -- we have -- if we put also the PPAs in Latin America and we carve out the regulated business in Latin America that is under a different regulation. I'd say in Latin America, we have roughly 100% of our free market selling in B2B.

Okay. Another question, which I would project into 2020 numbers. And I think it's actually the last one. And it's about the capacity story in 2019. You said it has been skewed towards the end of the year. What's the impact that you expect on 2020 EBITDA?

On the -- so I have already said in the presentation that before the last quarter installation that were 2.4 gigawatts of capacity installed. We see an increase for in 2020 our profit at EBITDA level of roughly EUR 250 million.

Great. I think we have answered all of the questions. As always, the IR department will be available for any follow-up calls. So thank you so much for being part of this call. And I hope to chat to you soon. Thank you.

Thank you.

Thank you. Bye-bye

Bye-bye.

Ladies and gentlemen, the conference is now over. You may disconnect your telephone. Thank you.