Endesa 1H26: Beat and raise but with plenty of one-off support

Research evidence excerpt

Endesa 1H26: Beat and raise but with plenty of one-off support

Wh and gas margins normalizing only gradually in line with

seasonality.

OTHER DISCUSSION

• Hedging: Higher wholesale power prices are expected to have little, if any, impact on Endesa’s 2026 earnings, as inframarginal

generation is effectively fully hedged via fixed-price sales to its customer base.

• Share buyback programme: Endesa's €2bn share buyback programme is progressing on schedule, with over 50% already

executed as of 1H26. To date, ~35m shares have been acquired for ~€1.1bn, of which ~17m shares have already been

cancelled, leaving 1,042m shares outstanding. The programme is currently in its 6th tranche (€500m), running from July 15

to November 27.

• Retail market dynamics: The Spanish retail supply market remains highly competitive with elevated customer churn and

pressure from new entrants, but Endesa is protecting profitability through stricter commercial discipline, better customer

mix and pruning high-churn sales channels to improve portfolio quality and medium-term stability. At the same time, recent

regulation and higher ancillary costs are pushing the market toward more rational pricing, which should progressively squeeze

out weaker competitors and support a more balanced competitive environment.

• Retail action plan: Endesa provided details on its ‘Retail action plan’ which is focused on improving value creation by

upgrading customer experience and loyalty, optimizing its channel mix toward more pull-led sales, and reinforcing its physical

commercial presence. It is also scaling digital customer acquisition through Lucera and LucIA, while the MasOrange partnership

should support cross-selling opportunities.