2
AGUAS ANDINAS FINANCIAL HIGHLIHGTS (millions of USD) Leading Water Utility 5.3% CAGR Largest water utility in Chile and one of the largest in Latin REVENUES America 769 625 2009 2013 More than 2 million clients 4.7% CAGR EBITDA 472 393 Natural monopoly (regulated) 2009 2013 Proven, stable regulatory Minimum, guaranteed return framework MARKET SHARE (1) of 7% 44% of industry revenues Stable demand 51% of billed water in the industry Exclusive, high-quality water resources that do not expire 43 % of clients in the industry 3 (1) Source: Informe de Gestión 2012 de SISS
CONSOLIDATED INDUSTRY INDUSTRY COVERAGE RATIOS INDUSTRY COVERAGE RATIOS Operated by private players 99.9% (DW) 95% 99.8% (WT) 96.3% (S) 75% MARKET SHARE* 55% AGBAR SUEZ AGBAR SUEZ 43.0% 35% ONTARIO TEACHERS PP ONTARIO TEACHERS PP 31.1% 15% MARUBENI MARUBENI 9.4% INV. AGUAS RIO CLARO INV. AGUAS RIO CLARO 5.0% Drinking Water Sewage Wastewater Treatment SMAPA SMAPA 4.0% GRUPO LUKSIC GRUPO LUKSIC 3.3% HIDROSAN-ICAFAL-VECTA HIDROSAN-ICAFAL-VECTA 2.6% OTROS OTHERS 1.6% INDUSTRY REVENUES & CAPEX (USD MILLONS)** INDUSTRY REVENUES & CAPEX (USD MILLONS)** 924 1.010 1.104 1.245 1.394 1.437 1.535 1.542 1.671 1.817 Currently, 95.5% of the population is 834 711 650 served by a privately-held operator. 747 565 502 453 242 299 351 306 394 255 469 378 333 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Revenues Capex *Market share based on number of clients. Source: Informe de Gestión 2012 de SISS. **Source: SISS. Exchange rate: 478.6 CLP/USD as of 31 December 2012. 4
CORPORATE STRUCTURE World class controlling shareholders OWNERSHIP AS OF 31 MARCH 2014 Others 75% • SUEZ ENVIRONNEMENT is one of the leading water and 14.0% sewage treatment players worldwide. COFRO IAM 5.0% • 50.1% AGBAR is an international benchmark in the sanitation 56.6% business with more than 145 years of experience in the sanitation industry, with a presence in 14 countries. International Shareholders 21.9% 21.9% 50.1% Chilean Brokers Pension 6.9% Funds 2.1% 100% 100% 53.5% 100% 100% 100% 100% REGULATED COMPANIES NON-REGULATED COMPANIES 5
6
CHALLENGES – AGUAS ANDINAS • Guarantee continuous and reliable service, even in the most adverse conditions. • Maintaining a close relationship with our customers. • • Encourage sustainable water use, monitoring and caring for freshwater sources and promoting integrated water BILLING OF POTABLE WATER IN FACTURACIÓN AGUA POTABLE GRUPO resources management. METROPOLITAN REGION (millions of m 3 ) AGUAS, EN MM DE M3 • Capitalize on growth opportunities as the Incremento 2001-2013 • Increase 2001-2013 33% Clientes. city expands. • • 33% Clients 14% Producción. • • 14% Production 13% Facturación. • 13% Billing 7
SERVICE CONTINUITY Operating Highlights 2012-2013 2. PRODUCTION • New wells in the Cerro Negro area • Drought Contingency Plan 4. COLLECTION • Maintenance of sewage network to provide optimal service. 5. TREATMENT 1. EXTRACTION • Completion of the Mapocho • Connection between El Yeso reservoir and Laguna Negra Sewage Treatment aqueduct Plant, which allowed the 3. STORAGE AND DISTRIBUTION Company to reach 100% • Additional reserve volume of 225,000 m 3 in 6 new tanks coverage in sewage • Investment in “Ice Pigging,” cleaning technique that utilizes treatment. pressurized ice • Hydraulic efficiency plan Aguas Andinas’ high coverage levels for all water and sewage services ranks the Company as a world-class operator. Aguas Andinas’ high coverage levels for all water and sewage services ranks the Company as a world-class operator. 8
CAPEX Safety Infrastructure Projects - Phase II: Construction of a raw water storage tank with a capacity of 1,500,000 m 3 • • Network autonomy will be raised to 32 hours • Anticipated tariff increase of 1.6% to be applied when the project is completed (2018) Expansion Mapocho Treatment Plant Increase capacity of the Treabal-Mapocho complex from 6.6 m 3 to 8.8 m 3 . • • • Respond to increased demand. Respond to increased demand. • Estimated timeline: 2017. Hydraulic Efficiency: • Improve the hydraulic efficiency of the drinking water network by decreasing the level of water loss from 30% to 20% in 10 years. 9
FLOW OF THE MAIPO RIVER (M 3 /S) SERVICE CONTINUITY Drought Mitigation Plan 250 200 150 100 50 New investments to increase capacity and agreements 0 with primary users for the joint management of the Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Maipo river Flow 2013-2014 Average Flow Minimum Flow (1968/1969) * Average calculated from 1951 to date. Measures taken by the company to mitigate the WATERFALL AT EL YESO RESERVOIR (mm) (1) WATERFALL AT EL YESO RESERVOIR (mm) (1) WATERFALL AT EL YESO RESERVOIR (mm) WATERFALL AT EL YESO RESERVOIR (mm) impacts of the drought during the last four years have ensured water supply for 2014-2015, even in 1.230 1.206 1.155 the event that 2014 is a dry year. 980 854 667 649 MAIN INITIATIVES: 502 546 482 474 469 445 • New capacity in wells 323 • Purchase of raw water • Renting of water rights • Agreements with other users of the river 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 * Average calculated from 1983 to date. • Monitoring and control of illegal water (1) Source: Dirección General de Aguas (DGA) usage/extraction El Yeso Reservoir June 2014 – Approximately 57% of capacity El Yeso Reservoir June 2014 – Approximately 57% of capacity 10
STRATEGIC CUSTOMER SERVICE PLAN New World Class System Implementation of AquaCIS, new billing tool that will allow us to further strengthen our commitment to serving clients Integrates commercial operations processes, such as Integrates commercial operations processes, such as customer service, contracting services, readings, billing and collection, etc. Work-flow management and business processes are integrated into a single technology platform 11
SERVICE CONTINUITY Glaciers Glaciers are a fundamental reserve of water. The Maipo river basin has 1,000 glaciers, equivalent to 388 Km 2 . During the drought, glaciers have been a major source of water. Aguas Andinas initiated a study on the contribution of glaciers to the watershed. The Company signed agreement with the Catholic University of Chile to study climate change through the MAPA Project (Maipo: Adjustment Plan) Glacier Olivares Glacier Olivares 12 12
REGULATORY FRAMEWORK The regulatory framework of the Proven, Stable and Transparent Chilean water industry has been fundamental to the development of the sector. Regulatory framework in place more than 20 years MODEL COMPANY vs. REAL COMPANY MODEL COMPANY vs. REAL COMPANY Superintendency of Sanitation Services (SISS) acts as the regulator counterpart in tariff setting process, which lasts 1 year MODEL COMPANY AGUAS ANDINAS Greenfield operation Existing infrastructure Tariffs are reset every five years, based on an objective and technical model: • Tariffs are calculated based on long term total costs of a model company Combination of new and Latest technology • Company and regulator have equal roles in the tariff calculation process legacy technology • Discrepancies are solved by an independent experts committee Cost efficiency Real costs • Minimum real return on assets of 7% after taxes • Automatic interim adjustments linked to polynomials based on CPI and WPI indexes 100% coverage in all Real coverage services Self-financing of Self-financing of Very low delinquency levels due to the legal investments through investments through empowerment to disconnect clients tariffs tariffs Ability to use debt to Minimum return on Government subsidies for low-income clients finance Capex and capital enhance return on equity 13
SIXTH TARIFF NEGOTIATION PROCESS Mechanism for Tariff Negotiation Process CALENDAR CALENDAR At least 12 months SISS study of SISS study of Company study Company study model model of model of model company company company company 1 2 months Discrepancies Discrepancies 1a 1a 5 months Negotiation Negotiation Negotiation Negotiation 2 45 days 4 months 1b 1b 3 1 month Agreement? Agreement? 4 No Yes 1. Publication of preliminary bases (October 2013) 1 a. Observations/comments of preliminary bases (December 2013) 1 b. Publication of definitive bases (March 2014) Expert Expert Tariff Decree Tariff Decree Committee Committee 2. Exchange of model company studies (October 2014) 2-3. Negotiation 3. Tariff decree 14 4. New tariffs applied
TARIFF BENCHMARKS TARIFFS PER CUBIC METER (WATER AND SEWAGE) US$/M 3 Caracas 0.16 Maipú 1.15 Shangai 0.51 Greater Santiago 1.45 Lima 0.66 Concepción 1.77 Sao Paulo 1.04 Seoul 1.24 Rancagua 1.87 Rome 1.36 Temuco 2.06 Santiago 1.39 La Serena 2.11 Moscow 1.41 Cape Town 1.53 Valdivia 2.14 Athens Athens 1.62 1.62 Arica 2.15 Montevideo 1.95 Talca 2.19 Stockholm 2.33 Madrid 2.56 Valparaíso 2.30 Washington D.C. 2.74 Copiapó 2.48 Mexico City 3.23 Iquique 2.48 London 3.65 Paris 3.88 Puerto Mont 2.52 Ottawa 5.12 Punta Arenas 2.54 Copenhaguen 5.33 Antofagasta 3.24 Sydney 5.93 Berlin 6.60 Coyhaique 3.52 Oslo 7.09 Source: Informe de Gestión 2012 de Superintendencia de Servicios Sanitarios 15
Recommend
More recommend
