#1MEMBER OF Dow Jones Sustainability Indices In Collaboration with RobecoSAM endesa Investor day 8 October, 2014 EM endesa#2Disclaimer EV endesa Disclaimer/Notice to Recipients This presentation contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) and information relating to Endesa, S.A. (the "Company") that are based on the beliefs of its management as well as assumptions made and information currently available to the Company. Such statements reflect the current views of the Company with respect to future events and are subject to risks, uncertainties and assumptions about the Company and its subsidiaries, including, among other things, the binding offer received from Enel in connection with the acquisition of our business in Latin America and the subsequent distribution of an extraordinary dividend, which are subject to approval and execution, the development of its business, trends in its operating industry, regulatory developments and future capital expenditures. In light of these risks, uncertainties and assumptions, the events or circumstances referred to in the forward-looking statements may not occur. None of the future projections, expectations, estimates, guidance or prospects in this presentation should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates, guidance or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the presentation. Furthermore, if different assumptions had been used, the future projections, expectations, estimates, guidance and prospects included in this presentation would likely vary from those included herein, and any such variation could be material. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others: changes or developments in governmental regulation, environmental regulation and other regulatory matters; electricity prices; commodity prices; interest rates; the availability of fuel; the ability to maintain relationships with suppliers, customers and customer advocacy groups; changes in climatic conditions; widespread adoption of energy efficiency measures; the failure to successfully implement the Company's business expansion plans; risks inherent to the construction of new power generation and distribution facilities; changes in general economic, political, governmental and business conditions; operational risks and hazards; the loss of senior management and key personnel; insufficient insurance coverage or increases in insurance cost; the failure of information and processing systems; the inability to access capital to refinance debt and fund capital expenditures; and various other factors that could adversely affect the Company's business and financial performance. Should one or more of these risks or uncertainties materialize, or should underlying assumptions regarding future events or circumstances prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or targeted. None of the Company nor any of its employees, officers, directors, advisers, representatives, agents or affiliates shall have any liability whatsoever (in negligence or otherwise, whether direct or indirect, in contract, tort or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Forward-looking statements speak only as of the date of this presentation and the Company expressly disclaims any obligation or undertaking to release any update of, or revisions to, any forward- looking statements in this presentation, including any changes in its expectations or any changes in events, conditions or circumstances on which these forward-looking statements are based. Certain information contained in this presentation is based on management accounts and estimates of the Company and has not been audited or reviewed by the Company's auditors. Recipients should not place undue reliance on this information. This presentation includes certain non-IFRS financial measures which have not been subject to a financial audit for any period. Certain financial and statistical information contained in this presentation is subject to rounding adjustments. Accordingly, any discrepancies between the totals and the sums of the amounts listed are due to rounding. To the extent indicated, certain industry, market and competitive position data contained in this presentation come from third party sources. Third party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy or completeness of such data. While the Company believes that each of these publications, studies and surveys has been prepared by a reputable source, the Company has not independently verified the data contained therein. In addition, certain of the industry, market and competitive position data contained in this presentation may come from the Company's own internal research and estimates based on the knowledge and experience of the Company's management in the markets in which the Company operates. While the Company believes that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change. Accordingly, undue reliance should not be placed on any of the industry, market or competitive position data contained in this presentation. The information contained in this presentation does not constitute investment, legal, accounting, regulatory, taxation or other advice and the information does not take into account your investment objectives or legal, accounting, regulatory, taxation or financial situation or particular needs. You are solely responsible for forming your own opinions and conclusions on such matters and the market and for making your own independent assessment of the information. You are solely responsible for seeking independent professional advice in relation to the information contained herein and any action taken on the basis of the information contained herein. No responsibility or liability is accepted by any person for any of the information or for any action taken by you or any of your officers, employees, agents or associates on the basis of such information. THIS PRESENTATION DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER FOR SALE OR SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES NOR SHALL IT OR ANY PART OF IT FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT TO PURCHASE SHARES. 2#3Agenda 1. Opening remarks 2. Market and sector trends 3. Endesa key strengths 4. New industrial plan 4.1. Regulated business – Distribution - 4.2. Regulated business - Non-mainland generation 4.3. Liberalised business – Generation and Supply 5. Financial overview 6. Guidance and closing remarks EV endesa Borja Prado José D. Bogas José D. Bogas José Luis Marín Manuel Morán J.Bogas/M. Morán/ J. Uriarte Paolo Bondi José D. Bogas 3#4Today's presenters Paolo Bondi CFO Borja Prado Chairman José D. Bogas CEO Manuel Morán MD Endesa Generación Javier Uriarte MD Endesa Energía EV endesa José Luis Marín MD Endesa Red 4#51. Opening remarks EV endesa Borja Prado#6Key recent developments Divestiture of Latin American business Re-focus on Iberian market Distribution of extraordinary dividend EV endesa 6#7Endesa recently announced a reorganisation Today Enel Envisaged new structure Enel EV endesa 100% 100% 100% Enel Energy Europe Enel Energy Europe Endesa Latam 92.06% Endesa 100% Endesa Latam +40.32% Enersis Current perimeter 92.06% 20.30% 40.32% Endesa Enersis 20.30% New perimeter 7#8(1) Shareholders will receive a record dividend Dividend payment EV endesa Monetisation of LatAm investments at a premium to their maximum value in the last 3 €8,253m cash dividend (1) years €14,606m Additional dividend to achieve a more efficient capital structure €6,353m cash dividend (1) Total cash dividend of €13.8 per share €8.253bn dividend has been proposed by Endesa's BoD for EGM approval on October 21, 2014. €6.353bn dividend approved by Endesa's BoD on October 7, 2014. Both dividends payable on October 29, 2014. 8#9Regulated Distribution Liberalised supply Generation & Islands Endesa refocused on its leading position in the Iberian market Main operating figures (2013) (1) E✓ endesa Key financials (2013 reported) (1) Largest distributor of electricity in Iberia Largest network operator in Iberia 112 TWh 324,000km €21.5bn revenues €3.3bn EBITDA Leading player in the Islands Leading energy supplier in Iberia Largest customer base in Iberia Largest electricity generator in Iberia 87% of generation market share² 94 TWh of electricity 50 TWh of gas 12.6m customers (electricity + gas) 70 TWh 23 GW €1.2bn net attributable income €34.5bn total assets (1) (2) €2 Figures for Spain and Portugal. Calculated over total capacity in non mainland systems (incl. renewables). 9#10Endesa: a pure player in the Iberian market Industrial plan focused on the Iberian market More efficient capital structure Visible and stable cash flow as a base for attractive dividend policy EV endesa 10#112. Market and sector trends EV endesa José D. Bogas#120.2% Spanish GDP Improving macroeconomic environment with attractive prospects Market and Sector Trends EM endesa (0.1%) (0.3%) (0.1%) (0.4%) (0.4%) (0.4%) (0.4%) (0.5%) (0.8%) Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 2015E GDP growth (%) 1.5% 1.4% 0.8% 0.8% 0.3% Q4 2013 0.4% 0.2% 0.1% Q1 2014 Q2 2014 0.6% Spanish unemployment rate 10Y bond yield (%) 27% 8 7 26% 26% 26% 6 26% 25% 5 26% 24% 4 3 24% 24% 2 1 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 2015E Employment growth (%) 0.8% 0.8% 0.5% 0.5% 0.2% 0 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Spread vs. Bund (bp) 213 143 I 124 Euro Spain France Portugal Italy Spain i Italy Portugal Euro France I Portugal Italy I Spain I France average (1)L average (1) Source: INE, EPA, Economist Intelligence Unit's latest estimates as of October 2, 2014 (from August/September, 2014), and Bloomberg as of October 6, 2014. (1) Euro average includes the following countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden and the UK. 35 12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 ⚫Spanish -German#13Market and Sector Trends Significant signs of recovery in electricity demand E✓ endesa Accumulated electricity consumption index for industrial customers (12 months) (LTM, yoy, index with year 2009=100) Total mainland demand growth September 2014 103 +5% 108 aug 2013 aug 2014 Source: REE. Note: Industrial customers with more than 450 kW contracted (~1/3 of total demand in 2012) Total mainland demand is adjusted by weather conditions and seasonality Monthly demand growth (%, yoy) +1.6% ■ Accumulated demand growth (9 months, %, yoy) +0.3% 13#14Market and Sector Trends Stable and financially balanced electricity sector EM endesa Energy reform virtually completed... No further tariff deficit expected ...with potential upsides System revenues minus costs (€bn) Surplus 1.2 0.5 0.2 ✓ Stable regulation Deficit -3.2 2013 2014E 2015E 2016E Expected accumulated system surplus of €1.9bn in the 2014-2016 period Source: Unesa. Note: Figures rounded up. Additional detail in annexes. 14#153. Endesa key strengths EV endesa José D. Bogas#16Endesa Key Strengths Endesa is focused on shareholder value leveraging E☑ 5 key distinctive strengths endesa Uniquely positioned to capture growth opportunities Efficient capital structure Highly regulated business 1 5 EM 4 endesa 2 Proven track record of operational efficiency 3 Resilient margins Strong Cash Flow generation 16#17Significant portion of EBITDA from regulated activities 1 Endesa Key Strengths EM EM endesa endesa Generation & Supply 39% 2013 EBITDA breakdown (1) Non-mainland generation 10% Distribution 51% I Regulated EBITDA (1) -65% (1) 2013 Pro-forma. Regulated EBITDA includes distribution, non-mainland generation, capacity payments and mining. 17#18Endesa Key Strengths Proven track record of operational efficiency ☑ e endesa EM endesa Distribution cash cost (1) (€/customer) -43% 94 53 2009 2013 Generation cash cost (2) (k€/MW) Supply cash cost (€/customer) -13% -21% 56 49 2009 2013 Note: Cash cost includes recurring O&M, personnel costs and maintenance capex in nominal terms. Excluding structure costs, fuel costs and adjusted by perimeter Net capex excluding smart meter. Perimeter: Endesa Distribución + DEPCSA + Endesa Red holding Beso (1) (2) (3) Figures include mainland and non-mainland generation business, excluding logistics and mining business. Net recurrent capex. Compared to 2011 rather than 2009 due to the timing of the liberalisation of the sector. Includes acquisition costs 32 2 25 (3) 2011 2013 18#19Integrated management of generation, purchases and supply Integrated management Procurement Key factors Diversified, flexible fuel procurement Competitive 60% Hydro Generation generation mix + Nuclear Energy management Limited risk exposure (2) ± 1TWh per month Endesa Key Strengths EM E endesa endesa 3 Endesa's electricity unit margins (1) (€/MWh) 49,9 20 20 Pool prices (€/MWh) 44,3 22 22 Supply Large customer base (3) 11.4m 2011 2013 Source: Pool prices from OMIE. (1) Excluding SCVP unit margins. (2) 2013 monthly average. (3) Electricity customers. 19#20Proven margin resilience even during an unprecedented adverse market context Endesa Key Strengths EM endesa 3 EM endesa Adverse market conditions 2011-2013 Endesa EBITDA evolution 2011-2013 impact -3.6% (€bn) 4.0 Demand contraction Reduced thermal gap -31% Lower electricity prices -11% Regulatory reform -€10.5bn Managerial actions ■ Focus on efficiencies and synergies -1.3 3.3 ■ Active management of fuel procurement 2011 EBITDA Regulatory External Managerial 2013 measures impact actions EBITDA ■ Effective integrated management of liberalised business Sources: REE, OMIE, Ministry of Industry document of July 12, 2013. Company estimates 20#21Optimised capital structure (€bn) Average cost 6.4% of debt 4.5 Net debt Re-leverage 6.4 -3.4 Pre-transaction 1H2014 LatAm net debt deconsolidation 1. including Endesa Latinoamerica SA debt. Net debt including tariff deficit. -8.3 8.3 4 Endesa Key Strengths E☑ EM endesa endesa 3.0% Average cost of debt 7.5 Proceeds from LatAm sale Debt incurred for Post-transaction extraordinary dividends 21#22Uniquely positioned to capture growth opportunities in the Iberian market Potential growth drivers Increase in demand/ prices Endesa's position Largest electricity supplier and distributor ■ ~60% of generation from hydro and nuclear Endesa Key Strengths 5 EM EV endesa endesa Increase in thermal gap Opportunities in Portugal New products, services and innovation Renewables Further options Competitive thermal power generation portfolio in Iberia ■ Second largest player in electricity sales ■ Growing position in gas supply ■ Proven track record in cross-selling ■ Distributed generation leveraged on customer base ■ Foster demand electrification and pioneer in new technologies ■ Potential to capture additional growth opportunities in the renewable space alongside Enel Green Power España Organic investment focus exclusively on Iberia, differentiating Endesa from its peers ■ Review of selected non-organic growth avenues 22 22#234. New industrial plan EV endesa José D. Bogas#24New trends are opening business opportunities in mature markets New Industrial Plan EM endesa Economy Trends Improving macroeconomic conditions Potential implications for Spain's energy industry Recovery of electricity and gas demand Environmental sustainability Towards a low carbon economy Regulation Increasing focus on system costs and efficiencies Technology Innovation and cost reduction as a driver to change the energy trends Consumer behaviour Energy efficiency oriented driven by technology Demand electrification Sustainability of the system Active role for distribution operators Key role of customers demanding more services and products 24#25($/bbl) Commodities to remain stable throughout the plan period New Industrial Plan EM endesa Brent 110 107 104 100 ($/ton) Coal - API2 81 78 888 87 83 2013 2014E 2015E 2016E 2013 2014E 2015E 2016E Gas TTF ($/mmbtu) (€/ton) CO2 price 9.0 7.0 10.5 9.6 9.6 6.0 8.9 5.0 2013 2014E 2015E Note: Commodity projections based on internal Business Plan assumptions. 2016E 2013 2014E 2015E 2016E 25#26Slight improvement in market fundamentals New Industrial Plan EM endesa Electricity Demand in Spain - Mainland (% annual growth) Thermal Gap in Spain - Mainland (TWh) Demand (TWh) 245 250 255 2.0% 1.8% (€/MWh) -0.4% 2014E 2015E Spanish Pool Prices +10% 69 68 62 62 61 2013 2014E 2015E 2016E 2016E Reserve margin 53 Short Term ■ Overcapacity 49 Renewables slow down 44 2014-2016 42 2013 2014E 2015E 2016E ■ Medium/ Long Term ■ 11 GW (coal) subject to environmental investments or early retirement Need for environmental investments or new capacity Source: 2013 based on REE for RES and Thermal Gap and based on OMIE for Pool Prices. Forecasts based on internal Business Plan assumptions. 26#27The new industrial plan is based on four key priorities New Industrial Plan EM endesa Key strategic priorities Realise full potential of new regulation Enhance operational efficiency Maximise integrated generation-supply value Develop new technologies and value added services 27#284.1. Regulated business: Distribution EV endesa Jose Luis Marín#29Largest distributor in Iberia Distribution EM endesa Endesa's presence in distribution Key operational figures (2013) Distribution lines 323,631km High voltage (≥66 kV) 19,566km Medium voltage (1-66 kV) 117,543km Aragon Catalonia O Low voltage 186,524km Percentage of underground 40% cables Extremadura Substations (#) 1,244 Balearic Islands Substations (MVA) 84,890 Andalusia Secondary substations (#) 131,491 ■ Total end users 11.9m ■ Total TWh distributed 112TWh Market Share (of total TWh) 43% Canary Islands ■ Smart meters installed 4.2m Uniquely positioned to benefit from economies of scale 29#30Distribution Proven track record of stable cash flow generation EM EBITDA minus NET CAPEX (2011-2013) (€bn) 1.3 1.3 endesa 1.3 Robust cash flow generation 2011 2012 2013 Note: Perimeter = Endesa Distribución+ DEPCSA + Endesa Red holding. Net capex = capex net of of clients cessions Resilience in adverse market conditions 30#31A new regulatory framework has been established with a more stable and transparent remuneration Distribution EM endesa Key features Outstanding items New regulatory framework ■ RAB-based mechanism Standard costs for opex and capex Remuneration rate: 6.5% nominal pre-tax for the first period (1) ■ Long regulatory periods: 6 years Ex-ante recognition of investments ■ Specific cost structure for non-mainland systems Standard unit values proposed by CNMC pending approval (1) First regulatory period expected to be 2015-2019 31#32Total remuneration New regulation RAB-based with standard values and ex-ante recognition of investments Distribution EM endesa Overview of remuneration framework for distribution activities applicable from 2015 First regulatory period: 2015-2019 (6-year regulatory periods thereafter) Investment remuneration Financial Remuneration 1 (RAB) Depreciation 2 ■ RAB defined for each distribution company, based on unit standard costs ■ Remuneration: ■ 6.5% allowed pre-tax return over Net Regulatory Asset Base (RAB) ■ 2-year delay vs. date of investment, adjusted by a time-value factor ■ Investments valuation: ■ Asset base at 31/12/13: at replacement cost based on standard costs ■ Investments from 1/1/14: financial remuneration + 50% of the difference between real and standard cost, if real cost < standard ■ Total annual (linear) depreciation calculated from useful life of RAB O&M remuneration 3 ■Standard cost model with potential upsides Other incentives 4 Includes incentives for quality of service, reduction of losses and fraud recovery CNMC estimate of Endesa 2014 net RAB: €11.4bn Note: O&M including personnel costs. 32 32#33Action plan for Distribution 1 Realise full potential of new regulatory framework 2 Continuous focus on cost efficiencies 3 Full deployment of proven smart meter technology 4 Improve networks and develop new innovative technologies Preparing network for the future 33 33 Distribution EM endesa#34Potential sources for incremental remuneration Realise full potential of new regulatory framework Distribution 1 2 EM 3 endesa 4 Opportunity to outperform vs. standard unit costs ■ Economies of scale: the largest distributor in Spain ■ Cost efficiencies achieved to date ■ Further potential optimisation of opex and capex + Incentives ■ Fraud and losses: specific recovery plan in place for non-technical losses Quality: best-in-class position in quality indexes 34#35Continuous focus on cost efficiencies Distribution 1 2 EM 3 endesa 4 Key drivers Continuous BPS leveraged on new Enel organisation Cash cost (1) (€/customer) 94 -43% 53 Flexible organisational structure based on outsourcing Investments in efficiency-oriented innovative technologies 2009 2013 Benchmark (2) (Endesa = 100) 139 100 113 Endesa Peer 2 Peer 3 Note: BPS: Best Practice Sharing. (1) Cash cost refers to Endesa Distribucion + DEPSA + Endesa Red holding and includes recurring O&M, personnel costs and maintenance capex in nominal terms. Excluding structure costs and adjusted by perimeter. (2) Source: Cap Gemini Report based on 2013 published data of main distributor companies in Spain. Rebased to 100. Cash cost includes fixed costs and net capex as reported in Annual Reports. 35#36Full deployment of proven smart meter technology Distribution 1 2 EV 3 endesa 4 Smart meters 11 Rationale ■ Enel-based technology with 39 million smart meters installed worldwide ■ Fostering further value potential of smart grids and new services development Full implementation by 2018 in accordance with the regulatory deadlines % total smart meters installed by Endesa in Spain 100% 70% 41% 2014E 2016E 2018E Main benefits ■ Commercial service and customer service improvement Energy efficiency and savings ■ Improvements network operation in planning and ■ Reduction of energy losses 36#37Improve networks and develop new innovative technologies Description & Benefits Network reliability improvement ■ Network mesh improvement ■ Enhanced reliability, safety and quality Distribution 1 2 EV 3 endesa 4 Timing Modular investment along 2015-2024 Network automation Control Room integration ■ Increase number of remotely controlled units Upgrade communications networks ■Improve quality of service. ■ Savings in the operation of medium voltage grid ■ Integrated system allows management of whole grid from any location ■ Single system with distributed management Modular investment along 2015-2024 2017-2024 ■ Increased efficiency in operations, safety and security ■ Update systems for development of smart-grids Targeted investments with attractive return 37#38Distribution capex for the action plan of €1.1bn over 3 years Distribution EM endesa Distribution capex plan 2014E-2016E €1.1bn ■ Network maintenance: approximately 50% of the plan ■ The remainder will be primarily dedicated to: ✓ Smart meters deployment and related services. ✓ Special projects: mainly network mesh improvement and increase in automation of networks ✓ IT systems Additional investment options ■ Additional projects for network automation ■ Further improvement of network mesh Control rooms integration 38#39EV endesa 4.2. Regulated business: Non-mainland generation Manuel Morán#40(1) Endesa is the market leader in non-mainland generation Non-mainland Generation EM endesa Endesa's presence in non-mainland generation Mabón Balearic islands 2.321 MW Canary islands 2.618 MW Ceuta & Melilla Endesa's key operational figures (2013) Total electricity production Isla de Menorca Son Reus Alcudia ▼ Cas Tresorer Isla de Mallorca Total installed capacity o/w coal Isla de Ibiza Eivissa o/w CCGT Los Guinchos Isla de La Palma Formentera • Isla de Formentera Cotesa o/w fuel & gas oil Endesa's position Isla de Tenerife Isla La Candelaria Isla de Lanzarote Gomera ◆ Guía Isora Isla de El Hierro ■ Unique sites Arona Granadilla El Palmar Llanos Blancos Punta Grande ■ Economies of scale ■ Best know-how and skills Isla de Gran Canaria Las Salinas Jinamar Bco. Tirajana Isla de Fuerteventura Ceuta 12.3 TWh 5.1 GW 0.5 GW 1.9 GW 2.8 GW ♦Melilla #1 player in non-mainland generation 87% installed capacity (1) 184 MW Coal Fuel & gas oil CCGTs Calculated over total capacity in non-mainland systems (incl. renewables). 84% electricity demand 40#41Continued focus on efficiency aligned with regulator's aim to reduce system costs Non-mainland Generation EM endesa Key drivers Optimisation of services contracts: ✓ In-sourcing ✓ Contracts renegotiation ✓ Moving from fixed to variable costs Renegotiation of CCGT's Long-Term Service Agreements (LTSA) Coal logistics improvement More flexible organisation 58 Cash cost (k€/MW) -16% 49 2009 2013 Note: Cash cost includes recurring O&M, personnel costs and maintenance capex in nominal terms. Excluding structure costs and adjusted by perimeter 41#42Non-mainland Generation New regulation framework underway with a more stable and transparent remuneration... EM endesa Key aspects Outstanding item Key features from the new regulatory framework ■ RAB-based mechanism ■ Remuneration rate: 6.5% pre-tax for the first period Long-term regulatory periods: 6 years ■ More efficient standard costs ■ No compensation on new investments if market share is greater than 40% ■ Ownership of pumped hydro plants / regasification plants to be transferred to Red Electrica / Enagas Green cent and 7% generation tax to be considered as recoverable costs 42#43Total remuneration Variable costs Investment costs ...that focuses on maximising efficiencies Non-mainland Generation EM endesa Overview of remuneration framework applicable from 2015 Financial Remuneration 1 First regulatory period valid until 2019 ▪ Remuneration rate over net Regulatory Asset Base (RAB) of 6.5% pre-tax ■ For new investments: financial remuneration + 50% of the difference between standard and audited cost if audited < standard Depreciation 2 ■ Based on useful life of the asset (25 years for fossil fuel) Fixed O&M 3 ■ Standard unit values to be applied to availability Variable O&M 4 Standard unit values to be applied to operational regime Fuels 5 - ■ Auction process for fuel procurement Estimated Net RAB for Endesa's non-mainland generation assets: €2.1bn Note: Company estimate for 2014 year-end net RAB. 43#44Action plan for non mainland generation Non-mainland Generation EM endesa 1 Promote a regulatory improvement Continuous focus on operational 2 efficiency 3 4 Optimise current generation portfolio Position islands as a nest of innovation projects Focus on preserving Endesa's position 44#45EV endesa 4.3. Liberalised business: Generation and supply José Bogas#46Liberalised business Endesa's liberalised business is uniquely positioned EM endesa Leadership in generation with competitive mix Leadership in the supply market ■ Integrated management of generation-supply portfolio ■ Additional value from active fuel procurement ▪ Regulatory reform almost complete, with potential upsides 46#47(1) Market leader by generation output with competitive mix Liberalised business EM endesa Endesa's installed capacity (GW, 2013) in mainland Spain CCGT 17% Coal 30% Fuel-Gas 3% 17GW Gross production, excluding renewables and cogeneration. (% 2013) Endesa's generation mix in mainland Spain (1) 100% 100% CCGT 3% Hydro 28% 24% Coal 34% 21% Hydro + 63% 55% Nuclear Nuclear 22% Endesa Sector ex-Endesa 47#48Market leader in supply Electricity Endesa's position (2013) ■ 11.4 million electricity customer ■Leader in Spain ■ 2nd player in Portugal Gas ■ 1.2 million gas customer ■ Spain: First non-incumbent ■ Growing presence in Portugal VAS ■>10 years experience ■ Broad portfolio (1) Value Added Services. ■ Innovative player Liberalised business EM endesa Endesa's number of contracts (2013) VAS (1) 1.5 Gas 1.2 14.1m of contracts Electricity 11.4 48#49integrated margin The integrated management of the liberalised business optimises value and enables resilient margins Energy management SCVP purchases SCVP sales Purchases Potential upside Indexed to pool price Own generation Fixed price Sources Sales Pass through Liberalised business EM endesa Key success factors... Long term expertise in the liberalized market ■ Know-how and skills in energy management ■ Optimization of fuel procurement ...beneficial under different scenarios ■ Increase price scenario: 60% of hydro + nuclear Flexibility to increase thermal output ✓ On-going renewals of customer contracts ■ Decrease price scenario: ✓ Option to purchase (spot or forward) vs. produce ✓ Arbitrage between gas and electricity ✓ On-going renewals of customer contracts 49#50Active fuel procurement creates additional value Liberalised business EM endesa Gas procurement contracts (current portfolio) Rasgas 16% Sonatrach 16% 6bcm Medgaz 16% GasNat 35% ■ 2/3 of LNG (year 2013) ■ Recently signed 2 contracts with USA Nigeria 16% From 100% indexed to Brent to 50% indexed to HH by 2020 Coal procurement contracts (current portfolio) Main Actions Active management of gas and coal to provide an additional source of margins: ■ Diversion ■ Shipping ■ Wholesale operations Wholesale market margins (2013) South Africa; 8% USA; 4% Chile; 1% Russia; 5% 8tn Indonesia 53% Colombia 29% High geographical diversification (€m) 24 79 Coal & Logistics Gas 50#51Regulatory reform is almost complete, with potential upside from outstanding items Liberalised business EM endesa Generation Supply Outstanding items Mothballing mechanism to solve current market overcapacity ■ New capacity payment scheme concerning additional capacity from 1/1/2016 ■ Domestic Coal: ✓ Mining Plan 2015-2018 ✓ Environmental capacity payment ▪ Reform of the ancillary services market ■ Social tariff: new threshold based on economic criteria ■ Adoption of Energy Efficiency Directive ■ Distributed Generation ■ New regulated tariff based on hourly billing 51#52Action plan for generation Liberalised business: Generation EM endesa 1 Continuous focus on cost efficiencies 2 3 Nuclear plants useful life extension Environmental investment on selective coal generation plants Maintain options for further investments Capture opportunities in renewables alongside EGPE (40% Endesa) Focus on maintaining competitive portfolio 52 52#53Continuous focus on cost efficiencies Liberalised business: Generation 1 2 EM 3 endesa Nuclear Hydro Coal CCGTS Unit Cash cost (k€/MW) ■ Prepare the plants for long term operation ■ Flexible organization Continuous Contracts ■ Staff flexibility improvement program ■ Disciplined investment process Fuel mix renegotiation ▪ LTSA renegotiation optimisation Logistics improvements ■ Virtual mothball ■ TPA gas reduction ■ Potential decommission Note: Cash cost includes O&M, personnel costs and maintenance capex in nominal terms. Excluding structure costs and fuel costs. 56 -13% 49 2009 2013 53 33#54Continuous focus on cost efficiencies Liberalised business: Generation 1 2 EM 3 endesa Homogeneous total cash cost (excluding fuel & CO2) Greater than average spending Less than average spending Coal power and CCGT plants (Solomon Associates) Potential under-spending (-20% of plants) Pacesetters (best practice) Typical range Potential over-spending (-30% of plants) 0% CCGT Puentes Compostilla Puentes (coal) Teruel Besós Pego Cristobal Almería Colón San Roque 25% 50% 75% 100% Coal power plants CCGT plants Coal plants among the pacesetters and CCGTs aligned to market conditions Notes: Solomon Associates benchmark composition: 450 thermal groups (coal, CCGT and fuel oil) worldwide. Based on "equivalent generation complexity" (EGC), driver used to compare the plants in an homogeneous way. Each power plant, with its characteristics, has a different EGC. Configuration, utilization of fuel factors are analysed. Cash cost includes O&M & personnel costs and maintenance capex in nominal terms. Excluding structure costs. Data from year 2012 for Compostilla, Teruel, Besós and Pego; year 2011 for Almería, Puentes (coal), Colón and Puentes (CCGT). 54 5.4#55Nuclear plants useful life extension Liberalised business: Generation 1 2 EM 3 endesa 2013 Endesa's nuclear position Trillo (1,100 MW) (1% Endesa) Almaraz I y II (1,049 MW and 1,044 MW) (36% and 36% Endesa) Ascó I and II Garoña (466 MW) (50% Endesa) (1,033 MW and 1,027 MW) (100% and 85% Endesa) Action Plan Promote the extension of useful life ≥50 years; Endesa prepared to invest Vandellós (1,088 MW) (72% Endesa) Maintain high levels of safety and reliability ■ 3.7 GW: 47% of total nuclear capacity in Spain ■ 26 TWh: 46% of total Endesa's mainland production Maintain maximum fleet availability Generational changeover 55 55#56Variable cost (€/MWh) Environmental investment in selective coal generation plants Liberalised business: Generation 1 2 3 E✓ endesa Endesa's coal plants enjoy the most competitive position in the thermal gap Endesa's estimated performance of plants in the thermal gap CCGT ancill. serv. Coal Offer cost Domestic coal Imported coal 1,159 MW 1,469 MW Lit. Almeria 1 Lit. Almeria 2 Note: Company estimation for 2015. CCGT Opportunity cost Invest in imported coal plants Action Plan Most competitive technology in the thermal gap ■ Attractive returns for environmental investments 1,101 MW 1,200 MW Puentes Teruel Compostilla Output (GWh) Option to invest in domestic coal plants ■ Competitive generation technology Environmental investments are an open option 56 56#57Liberalised business: Generation Generation capex for the action plan of €1bn over 3 years EM endesa Generation capex 2014E-2016E €1.0bn ■ Around 80% is equally split between to nuclear (stress test completed by 2016) and maintenance for the rest of technologies ■ The remainder investment is allocated to selective environmental investments in imported coal plants Additional investment options ■ Environmental investments in domestic coal plants ■ Develop pumping portfolio (3.6GW) with different development phases. 57#58Long term Short term Action plan for supply Trends ■ Increased sophistication of customer base: ■ New entrants: ESCOS (1) Regulatory push for energy efficiency and distributed generation Technology improvement and digitalization (1) Energy Services Companies. Eendesa GEDEON energyolting Energía solar Una fuente inagetable de ahoru 1 Action plan Liberalised business: Supply EM endesa Reinforce leading position in electricity and grow in gas 2 Continuous focus on cost efficiencies N Further development of new 3 products and services. Create value from future 4 growth opportunities Significant opportunities in supply business 58#59Reinforce leading position in electricity and grow in gas Liberalised business: Supply 1 2 EM 3 endesa 4 Objectives by market Reinforce leadership in Spain Portugal & Others Electricity Customers (m) 11.4 0.2 Sales (TWh) 96.1 9.0 electricity and grow in gas Spain 11.2 87.1 Portugal Grow in electricity and gas 2013 2013 Maintain share in Spanish electricity market Gas Customers (m) Sales (TWh) 1.2 58.6 Portugal & Others 9.5 Spain Other Expand in electricity and adjacent countries gas, mainly in France 2013 49.1 2013 Maintain share in Spanish gas market 59#60Continuous focus on cost efficiencies Liberalised business: Supply 2 EM 3 endesa 4 Main actions ■ Call centers (integration and full call recording) Unit Cash Cost (€/customer) (€/customer) Customer service ■ Externalisation of offices Cost-to- ■ Digitalization Serve ■ Electronic billing Back ■ Collection office ■ Process reengineering Acquisition Costs Processes efficiency ■ Increase contract activation rate ■ End-to-end process digitalisation and tele-selling technological platform -21% 32 25 2011 2013 ■ Channel Mix optimisation Sales ■ Plan to increase customer loyalty strategy ■ Cross-sales enhancement 60#61Further development of new products and services Liberalised business: Supply 1 2 EM 3 endesa 4 VAS portfolio ■ Energy related maintenance services ■ Equipment solutions 98 B2C (<50,000 kWh/year) ■ Insurance/Financed products € B2B ■ Connected home products ■ Electric & gas projects ▪ Energy efficiency solutions (ESCO model) 222 Gross margin (€m) VAS Action Plan 65 Significant increase expected 2013 Development of new products portfolio (ESCO Model) Further development of existing services Key (>50,000 kWh/year) ■ Monitoring, control and energy consultancy actions Monitoring and control services deployment ■ Maintenance services Potential non-organic growth 61#62Create value from future growth opportunities Liberalised business: Supply 2 E✓ 3 endesa 4 Energy efficiency ABCDEFG Action Plan Further develop technological multi service platform Distributed energy plan (pending regulatory scheme) Microgrid pilot project Innovation 360° services based on Internet of Things Capture cost reduction New services definition & testing Demand electrification Pilot projects (e.g. Zem2All) Participate along the electric vehicle's value chain "Ciudad y Energía" Customer use & acceptance of EVs New charging technologies Demand electrification (cities) 62 42#635. Financial overview EV endesa Paolo Bondi#64Єm Revenues 2013 Endesa pro forma financials reflects impacts of 2014 for comparison purposes EM endesa Reported 2013 Spain & Portugal Pro Forma Change IFRS 11 2013 Endesa 21,512 21,525 +13 EBITDA 3,277 3,217 (60) D&A (1,626) (1,601) +25 EBIT 1,651 1,616 (35) Net financial expenses (100) (259) (159) Net income continued operations 1,176 1,069 (1) (107) Net debt 1,440 7,858 +6,418 (1) Total pro forma net income of €4,142m. LatAm figures presented as discontinued operations. Most relevant impacts LatAm Extr. restructuring dividend 64#65Relevant factors to be considered for adequate comparisons from 2014 onwards EV endesa D&A Capital Structure EBITDA 2014 (E): ~€ 2.9bn ▪ Extended D&A life to reflect the expected useful life of plants ■Releveraging Associates ▪ IFRS 11 Consolidation Tax ■ New tax draft 65 59#66AL Modification of D&A reflects expected useful life extension of Nuclear and CCGT plants EM endesa CCGTS 25 years Nuclear D&A life 40 years Current D&A life From Q4 2014 50 years 40 years Current D&A life From Q4 2014 Coal ■ Imported coal plants useful life extended until 2035 starting from July 1, 2014 (as a result of Environmental Investments and Life Extension investments) 66#67€bn A more efficient capital structure derived from releveraging the company EV endesa 1H 2014 Net debt / EBITDA 2.6x 0.4x June 2014 Extraordinary dividend Post €6.4bn extraordinary... Net debt(1) 1.1 (1) +6.4bn 7.5 EBITDA 2014 Guidance 2.9 2.9 €2.1bn of tariff deficit receivables as of 1H 2014 Note: Net debt defined as Non-current financial liabilities + Current financial liabilities - Cash and cash equivalents - Financial derivatives recognised under assets, as per Annual Report. (1) Endesa Spain & Portugal Net debt as of June 30, 2014 (Endesa ex-Enersis minus deconsolidation of Endesa Latinoamerica SA Net Debt). 40 67#68New debt conditions allows Endesa to have the lowest cost of debt amongst peers with a comfortable debt maturity Gross balance of maturities outstanding at June 30, 2014 adjusted for €6.4bn extraordinary dividend: €7,874m (1) EV endesa €m ■ Existing maturities 1,295 ■Debt from extraordinary dividend (2) New 5,290 intercompany Debt 4,500 new fixed rate loan 4.5bn€ 10Y ■ new credit line1bn€ 1Y 1,000 515 508 ☐ 266 790 existing 1bn€ back up credit line 295 2014 2015 2016 2017 2018+ Resulting average cost of debt: 3.0% Average life of debt: 7.2 years ■ 64% fixed and 36% floating rate Liquidity of €4,566m, covering 21 months of maturities ✓ €371m in cash ✓ €4,195m available in credit lines eN (2) Does not include outstanding execution costs or the market value of derivatives which do not involve any cash payment. Notes issued are backed by long-term credit lines and are renewed on a regular basis. 68#69Capex plan of €2.5bn over 3 years with more than 50% devoted to regulated businesses EM endesa Annual Capex (€bn) 0.6 Investment plan 1.0 0.9 2014E 2015E 2016E 69 69#70Strong cash flow generation will support dividend distribution and future growth EM endesa €bn 2015-2016 cumulative operating cash flow generation ~6.0 ~4.1 ~(1.9) Cumulative 2015-16E EBITDA Cumulative 2015-16E Capex Cumulative 2015-16E Operating Cash Flow 70 70#716. Guidance and closing remarks EV endesa#72A very attractive dividend policy with a minimum annual DPS growth target of 5% EM endesa Amount New dividend policy ■ 2014 ordinary dividend of 0.76€/share (1) ■ Minimum annual DPS growth target of 5% Timing ■ Bi-annual dividend payment Interim dividend payable in January and final dividend payable in July Consideration ■ 100% cash pay dividend (1) 72 Dividend policy approved for the industrial plan period and dividend distribution subject to corporate approvals.#73Guidance 2014-2016: creating value for shareholders 2014 2015 2016 EBITDA ~€2.9bn ~€2.9bn ~€3.1bn Net Income n.m. ~€1.0bn ~€1.1bn DPS €0.76/share Minimum 5.0% annual growth 73 73 EV endesa#74Closing remarks EM 1 2 3 endesa 4 5 Co 6 An industry leader in the Iberian market Highly regulated business / resilient margins Efficient capital structure Best positioned to capture growth Strong cash flow generation Attractive dividend policy EV endesa 74#75MEMBER OF Dow Jones Sustainability Indices In Collaboration with RobecoSAM endesa Investor day 8 October, 2014 EM endesa#76Annexes EV endesa#77Key assumptions Key assumptions General macro Unit 2014E 2015E 2016E Spain GDP growth y-o-y % 0.8% 1.4% 1.6% Portugal GDP growth y-o-y % 0.9% 1.3% 1.5% FX US$/€ 1.34 1.32 1.31 Spain CPI Portugal CPI do do % 0.2 0.6 1.2 % 0.2 1.0 1.3 Energy market Unit 2014E 2015E 2016E Electricity demand - Spain TWh 245 250 255 Gas final uses bcm 23 23 24 Thermal gap TWh 61 69 68 Key commodity prices Unit 2014E 2015E 2016E Brent US$/boe 107 104 100 Coal US$/t 78 83 87 Gas US$/mmbtu 8.9 9.6 9.6 CO2 €/t 6 7 9 Pool prices €/MWh 42 49 53 EV endesa 77#78Pro-forma Income Statement for 2013 E✓ endesa A B C: A+B D E F: C+D+E Reported 2013 Adjustment for Restated 2013 Adjustment for LatAm sale Adjustment for extraordinary dividend Pro-forma 2013 IFRS 11 (Єmm) Income Revenue Other operating income Procurements and services Power purchased 31,203 (263) 30,940 (9,415) 21,525 29,677 (255) 29,422 (8,912) 20,510 1,526 (8) 1,518 (503) 1,015 (20,789) 116 (20,673) 4,647 (16,026) (8,063) 7 (8,056) 2,740 (5,316) Cost of fuel consumed (3,491) 100 (3,391) 538 (2,853) Transmission costs (6,711) (4) (6,715) 609 (6,106) Other variable procurements and services (2,524) 13 (2,511) 760 (1,751) Contribution margin 10,414 (147) 10,267 (4,768) 5,499 Self-constructed assets 197 197 (95) 102 Personnel expenses (1,770) 24 (1,746) 718 (1,028) Other fixed operating expenses (2,121) 11 (2,110) 754 (1,356) Gross profit from operations (EBITDA) 6,720 (112) 6,608 (3,391) 3,217 Depreciation and amortization, and impairment losses (2,418) 39 (2,379) 778 (1,601) Profit from operations (EBIT) 4,302 (73) 4,229 (2,613) 1.616 Net financial loss (350) (2) (352) 244 (151) (259) Financial income 552 (4) 548 (409) (5) 134 Financial expense (896) (896) 620 (146) (422) Net exchange differences (6) 2 (4) 33 29 Net profit of companies accounted for using equity method 29 66 95 (38) 57 Gains/(losses) from other investments 13 (1) 12 (2) 10 Gains/(losses) on disposal of assets 24 24 (28) (4) Profit before tax 4,018 (10) 4,008 (2,437) (151) 1,420 Income tax expense (1,075) 10 (1,065) 669 45 (351) Profit after tax for the year from continuing 2,943 2,943 (1,768) (106) 1,069 operations Profit after tax for the year from discontinued 3,073 3,073 operations Profit/(loss) for the year 2,943 2,943 1,305 (106) 4,142 Parent company 1,879 1,879 2,369 (106) 4,142 Non-controlling interests 1,064 1,064 (1,064) 78#79(Єmm) Assets Pro-forma Balance Sheet as of December 31, 2013 A B C: A+B Reported 2013 Adjustment for IFRS 11 Restated 2013 D Adjustment for LatAm sale E Adjustment for extraordinary dividend EM endesa F: C+D+E Pro-forma 2013 Non-Current Assets 42,851 (156) 42,695 (16,452) Property, plant and equipment 32,053 (462) 31,591 (10,252) 77 77 Investment property (62) 2,290 Intangible assets (65) 2,225 (1,620) 26,243 21,339 15 605 Goodwill 2,313 (11) 2,302 (2,302) Investments accounted for using the equity 903 505 1,408 (343) 1,065 method 3,303 Non-current financial assets (79) 3,224 (1,108) 2,116 Deferred tax assets 1,912 (44) 1,868 (765) 1,103 Current Assets Inventories Trade and other receivables 13,606 (344) 13,262 2,994 (9,105) 7,151 1,126 (23) 1,103 (107) 996 5,031 (99) 4,932 (1,794) 3,138 Other financial assets 3,110 (32) 3,078 (1,266) 1,812 Cash and cash equivalents 4,335 (190) 4,145 6,161 (9,105) 1,201 Non-current assets held for sale and 4 4 4 discontinued operations Total Assets 56,457 (500) 55,957 (13,458) (9,105) 33,394 Equity and Liabilities Equity 26,769 (7) 26,762 (3,914) (14,605) 8,243 Of the Parent 20,521 20,521 2,327 (14,605) 8,243 Of non-controlling interests 6,248 (7) 6,241 (6,241) Non-Current Liabilities 18,474 (321) 18,153 (5,650) 4,500 17,003 Deferred income 4,582 (9) 4,573 (25) 4,548 Non-current Provisions 3,627 (131) 3,496 (605) 2,891 Non-current interest-bearing loans and 7,551 borrowings (114) 7,437 (3,849) 4,500 8,088 Other non-current liabilities 601 (4) 597 (96) 501 Deferred tax liabilities 2,113 (63) 2,050 (1,075) 975 Current Liabilities 11,214 (172) 11,042 (3,894) 1,000 8,148 Current interest-bearing loans and borrowings 1,152 (25) 1,127 (1,113) 1,000 1,014 Current provisions 723 (34) 689 (127) 562 Trade payables and other current liabilities 9,339 (113) 9,226 (2,654) 6,572 Total Equity and Liabilities 56,457 (500) 55,957 (13,458) (9,105) 33,39479#80Company Stake Focus on Associates - equity method consolidation E✓ Description endesa Change in 2014 due to IFRS11 Installed capacity Book value 2013 (MW) (€m) (1) Enel Green Power España 40% Renewable capacity 1,900 825 Endes Gas T&D 20% Gas transmission & distribution Elcogas 41% IGCC (3) plant 334 Tecnatom 45% Nuclear Engineering Co. (4) 30 AYESA Advanced Technologies 22% Engineering and IT services 4 Suministradora Electrica de Cadiz 34% Electricity supply 17 Electricidad de Puerto Real 50% Electricity supply Hydro + wind combined plant 6 Gorona del Viento El Hierro 30% project Nuclenor (2) 50% Nuclear plant 466 12 Tejo Energía Pegop Carbopego Tahaddart 39% Coal-fired power plant (Portugal) 628 58 50% Maintenance and operations (Portugal) 3 50% Fuel supplier (Portugal) 3 32% CCGT plant (Morocco) 380 30 Compostilla ENEL Insurance Elecgas Total (1) Book value has been restated in order to reflect IFRS11 changes. (2) Garoña plant has not been operating during 2013. (3) Integrated Gasification Combined Cycle. (4) €100m sales in 2013. 50% Reinsurance 41 50% Insurance 49 50% Financing company (12) ✓ 1,065 80#81Revenues and Costs of the System EV endesa 2014E 2015E 2016E €m Revenues Access Revenues Capacity Payments Balance 19,374 19,423 19,984 14,641 14,677 14,781 705 691 1,045 Capacity payments revenues 1,462 1,470 1,483 Capacity payments 757 779 438 Taxes & CO2 (Law 15/2012 proceeds) 3,125 3,147 3,238 Non-Mainland compensation (50% financed by State Budget) 903 908 Regulated Costs 19,138 18,891 920 18,810 Transmission & Distribution 6,606 6,870 6,964 Interruptibility 550 0 0 Non-Mainland Compensations 1,806 1,815 1,840 Renewables Premiums 6,950 6,950 6,950 Tariff Deficit Amortisation Annuities 2,967 2,967 2,967 Other costs 259 289 89 Deficit (-)/Surplus (+) 236 532 1,174 Source: UNESA. 81