End-user Markets

298.2
TWh
ELECTRICITY
SALES
3,121
million
GROSS OPERATING PROFIT
69.5
million
CLIENTI RETAIL

Operations

ELECTRICITY SALES

Millions of kWh      
  2020 2019 Change
Free market 160,202 172,699 (12,497) -7.2%
Regulated market 137,984 149,324 (11,340) -7.6%
Total(1) 298,186 322,023 (23,837) -7.4%
- of which Italy 90,205 97,539 (7,334) -7.5%
- of which Iberia 80,772 89,441 (8,669) -9.7%
- of which Latin America(1) 118,388 125,308 (6,920) -5.5%
- of which Europe 8,821 9,735 (914) -9.4%

(1) Volumes include sales to large customers by generation companies in Latin America. The figure for 2019 has consequently been adjusted to ensure comparability.

In 2020, quantities sold decreased due mainly to a reduction in consumption tied to declining demand for electricity in nearly all countries as a result of the COVID-19 health emergency. The reductions in Italy and Spain were greater on the free market for business-to-business (B2B) customers.

NATURAL GAS SALES

Millions of m3      
  2020 2019 Change
Business to consumer 3,640 3,732 (92) -2.5%
Business to business 6,076 7,067 (991) -14.0%
Total (1) 9,716 10,799 (1,083) -10.0%
- of which Italy 4,429 4,736 (307) -6.5%
- of which Iberia 5,022 5,750 (728) -12.7%
- of which Latin America(1) 155 171 (16) -9.4%
- of which Europe(2) 110 142 (32) -22.5%

(1) Volumes include sales to large customers by generation companies in Latin America. The figure for 2019 has consequently been adjusted to ensure comparability.
(2) The figures for 2019 reflect a more accurate measurement of volumes sold.

The decrease in quantities of gas sold in 2020 compared with the previous year is mainly attributable to reduced consumption levels in Italy and Spain due mainly to the COVID-19 pandemic.
Total retail customers of the Group number 69,517,932, of which 23,164,875 on the free market, while at December 31, 2019 they numbered 70,471,612, of which 23,013,224 on the free market.

Performance(1)

Millions of euro      
  2020 2019 Change
Revenue 29,508 32,599 (3,091) -9.5%
Gross operating profit 3,121 3,334 (213) -6.4%
Ordinary gross operating profit 3,197 3,334 (137) -4.1%
Operating profit 1,817 2,210 (393) -17.8%
Capital expenditure 460 449 11 2.4%

(1) The comparative figures for 2019 have been adjusted to take account of the fact that as from 2020 in South America and Mexico amounts attributable to large customers managed by the power generation companies were reallocated to the End-user Markets Business Line.

The following tables show a breakdown of performance by Region/Country in 2020.

REVENUE(1)

Millions of euro      
  2020 2019 Change
Italy 14,869 16,042 (1,173) -7.3%
Iberia 11,987 13,867 (1,880) -13.6%
Latin America 1,492 1,559 (67) -4.3%
- of which Argentina - 30 (30) -
- of which Brazil 299 404 (105) -26.0%
- of which Chile 271 293 (22) -7.5%
- of which Colombia 705 777 (72) -9.3%
- of which Peru 217 55 162 -
North America 10 - 10 -
Europe 1,150 1,131 19 1.7%
Eliminations and adjustments - - - -
Total 29,508 32,599 (3,091) -9.5%

(1) The comparative figures for 2019 have been adjusted to take account of the fact that as from 2020 in South America and Mexico amounts attributable to large customers managed by the power generation companies were reallocated to the End-user Markets Business Line.

Gross operating profit(1)

Millions of euro      
  2020 2019 Change
Italy 2,362 2,314 48 2.1%
Iberia 467 715 (248) -34.7%
Latin America 201 292 (91) -31.2%
- of which Argentina (7) 3 (10) -
- of which Brazil 107 154 (47) -30.5%
- of which Chile 25 41 (16) -39.0%
- of which Colombia 54 66 (12) -18.2%
- of which Peru 22 28 (6) -21.4%
North America 9 (2) 11 -
Europe 82 15 67 -
Total 3,121 3,334 (213) -6.4%

(1) The comparative figures for 2019 have been adjusted to take account of the fact that as from 2020 in South America and Mexico amounts attributable to large customers managed by the power generation companies were reallocated to the End-user Markets Business Line.

The decrease in the gross operating profit for 2020 is essentially attributable to:

  • a decrease of €248 million in gross operating profit in Iberia, which mainly reflects a decrease in quantities sold and reduced profit margins caused by efforts to respond to the continuing negative impact of COVID-19 on volumes and demand. These effects were partially offset by lower provisioning costs. The decrease in the margin also reflects an increase in provisions for the voluntary termination incentives program (€63 million);
  • a decrease in gross operating profit in Latin America, due mainly to the weakening of local currencies against the euro, particularly in Brazil, and to the effect of the indemnity received by Edesur in 2019 (€24 million);
  • an increase of €67 million in gross operating profit in Romania, due to the combined effect of increased revenue as a result of higher average prices and lower provisioning costs;
  • an increase of €48 million in gross operating profit in Italy, where the €27 million decrease in the margin on the free market (due mainly to a reduction in the energy profit margin as a result, essentially, of reduced sales in response to the COVID-19 pandemic) was offset by an increase of €75 million in gross operating profit on the regulated market due to decreasing operating costs as a result, primarily, of the release of provisions for litigation following favorable rulings and an increase in income resulting from the reimbursement of fraud-related matters. These effects were partially offset by lower volumes sold as a result of the COVID-19 pandemic and a reduction in customers.

The ordinary gross operating profit came to €3,197 million (€3,334 million in 2019). The extraordinary items concern non-recurring costs due to COVID-19 for workplace sanitization activities, personal protective equipment and donations (€11 million), as well as charges related to direct and indirect activities related to digitalization and the acceleration of the energy transition (€65 million).

OPERATING PROFIT(1)

Millions of euro      
  2020 2019 Change
Italy 1,538 1,609 (71) -4.4%
Iberia 241 491 (250) -50.9%
Latin America (22) 126 (148) -
- of which Argentina (44) (35) (9) -25.7%
- of which Brazil (39) 49 (88) -
- of which Chile 11 30 (19) -63.3%
- of which Colombia 39 59 (20) -33.9%
- of which Peru 11 23 (12) -52.2%
North America 9 (2) 11 -
Europe 51 (14) 65 -
Eliminations and adjustments - - - -
Total 1,817 2,210 (393) -17.8%

(1) The comparative figures for 2019 have been adjusted to take account of the fact that as from 2020 in South America and Mexico amounts attributable to large customers managed by the power generation companies were reallocated to the End-user Markets Business Line.

Operating profit includes depreciation, amortization and impairment losses in the amount of €1,304 million (€1,124 million in 2019). The increase in depreciation, amortization and impairment losses is mainly attributable to impairment losses of trade receivables in Italy due to the deterioration in the collection status of customers as a result of COVID-19.

Capital expenditure

Millions of euro      
  2020 2019 Change
Italy 310 324 (14) -4.3%
Iberia 139 110 29 26.4%
Latin America - - - -
Europe 11 15 (4) -26.7%
Total 460 449 11 2.4%

The increase in capital expenditure is mainly attributable to Spain in relation to the capitalization of costs concerning the acquisition of new customers. These effects were partially offset by lower contract costs in Italy.