CREDICORP Investor Conference Mercado de Capitales COMPANY PRESENTATION SEPTEMBER 2018
AGENDA 1. OVERVIEW 2. VALUE PROPOSAL 3. CONCLUDING REMARKS 2
Company overview Leading position in Chile & Peru THE COMPANY Installed Capacity Ownership Market Share 1 3,893 MW 17 % / 8 % 49.96 % Matte Group 3,328 MW / 565 MW 9.58 % Angelini Group 20.70 % Pension Funds Power-Plants Transmission Lines 26 19.76 % Others ~940 km 25 / 1 Ratings KEY FINANCIALS Baa2 EBITDA LTM Total Assets US$ 696 mm Moody’s US$ 6.7 bn BBB US$ 643 mm / US$ 53 mm S&P Cash Net Debt / EBITDA BBB US$ 696 mm 1.3 x Fitch Note: All figures as of Jun18 3 1 In terms of generation in the SEN in Chile (23% in the SIC, prior to the interconnection with the SING effective as of October 2017) and in the SEIN in Peru.
AGENDA 1. OVERVIEW 2. VALUE PROPOSAL 3. CONCLUDING REMARKS 4
Value proposal Leading position supported by competitive strengths 1 2 3 4 5 PRUDENT MAXIMIZING COST STABLE & ATTRACTIVE FINANCIAL VALUE TO ALL EFFICIENT AND PREDICTABLE PORTFOLIO OF MANAGEMENT OF OUR DIVERSIFIED CASH FLOWS GROWTH STAKEHOLDERS ASSET BASE OPTIONS 5
Value proposal Leading position supported by competitive strengths 1 2 3 4 5 PRUDENT MAXIMIZING COST STABLE & ATTRACTIVE FINANCIAL VALUE TO ALL EFFICIENT AND PREDICTABLE PORTFOLIO OF MANAGEMENT OF OUR DIVERSIFIED CASH FLOWS GROWTH STAKEHOLDERS ASSET BASE OPTIONS 6
1. Cost efficient & diversified asset base Generation assets diversified by technology & geography 3,893 MW Inst. Capacity: 1 FENIX POWER 12,772 MW 565 MW / Gas 1 Hydro: 1,634 MW SEIN 4 Reservoir: 1,065 MW 12 Run-of-the-river: 532 MW Solar: 9 MW CENTRAL ZONE: 23,737 MW 210 MW / 9 MW / 1,128 MW Thermal: 2,250 MW SEN CENTER-SOUTHERN ZONE: 3 CCGT: 1,332 MW 1,204 MW / 454 MW SOUTHERN ZONE: 4 Diesel: 568 MW 172 MW / 103 MW 1 Coal: 350 MW 7 Note: values as of Jun18
1. Cost efficient & diversified asset base Fenix Power: a relevant & efficient CCGT in Peru Most efficient CCGT in Peru KEY FIGURES SHAREHOLDERS Based on Heat Rate 51 % Colbún LTM EBITDA US$ 53 mm 36 % ADIA 40 miles south of Lima 13 % Sigma Capital of Peru and largest city of the country Cash 565 MW MARKET US$ 53 mm Gross effective capacity SHARE 1 3.5 TWh Others Internacional Peruvian 12% Net annual generation Huallaga Gov. Ratings 4% 22% Statkraft Baa3 Stable 3 TWh / year 5% Moody’s Long term contracts (~75% capacity) Fenix 8% BBB- Stable Orazul 18% S&P/Fitch Enel 15% Engie 16% Note: All figures as of Jun18 8 1 In terms of generation
1. Cost efficient & diversified asset base Secured long-term regasification capacity & LNG supply Long-term strategy: leveraging our efficient natural gas power facilities and diversifying our supply sources; contributing to a competitive, flexible, secure and sustainable power supply. MEDIUM AND SHORT TERM LONG TERM LNG SUPPLY LNG SUPPLY Regasification capacity and supply LNG supply with Metrogas and ENAP contract with ENAP Short term contracts (~3 months) available. Effective from 2018 onwards, for a period of 13 years. Medium term contracts: signed for 2 TWh of natural gas generation in 2018 and 2019 1 . Competitive LNG supply with ENAP and international providers. Capacity for up to two combined-cycle units per year. 9 1 For 2019, 1 TWh is optional.
1. Cost efficient & diversified asset base 100% of PPAs supplied with cost-efficient generation CONTRACTUAL COMMITTMENTS VS GENERATION. (TWh) TWh 47% 14 50% 0,1 45% 0.5 0.4 0.2 12 40% 0.5 3,9 3,0 0.3 3,4 4,0 10 35% 3,2 3,6 30% 8 2,6 2,6 2,4 2,6 25% 2,6 12,3 2,5 6 11,4 11,3 11,1 11,0 11,0 20% 15% 4 6,7 6,5 6,4 5,9 10% 4,9 4,8 2 5% 0 0% 2013 2014 2015 2016 2017 2Q18 LTM Hydro Coal LNG Diesel Total Committments EBITDA Mg (%) 10 Note: figures as of Jun18
1. Cost efficient & diversified asset base Relevant transmission assets Substations Transmission lines 28 ~940 km Market share 1 Annual EBITDA 2 ~6 % ~US$ 23 mm Length (km) Nacional 331 Zonal 79 Dedicada 531 Total 941 ~US$60 million in expansion projects in transmission Note: All figures as of Jun18 1 Nacional Transmission 11 2 Corresponds to Colbún Transmisión EBITDA as of Dec17
1. Cost efficient & diversified asset base Attractive markets GENERATION MATRIX. (%) 1 7% 15% 26% Hydro Diversified generation profile. 1% Coal Stable regulatory framework. 38,290 25,122 Natural Gas 30% US$ currency denominated markets. 18% GWh GWh 62% Diesel Investment grade countries. Others High growth potential. 40% SEIN SEN POWER DEMAND GROWTH. (12 month average %) 2 MARGINAL COST. (US$/MWh) 3 Alto Jahuel Santa Rosa SEN SEIN 10% 120 100 8% 80 6% 69 4% 60 4% 40 2% 2% 20 16 0% 0 -2% 12 Note: All figures as of Jun18
Value proposal Leading position supported by competitive strengths 2 1 4 5 3 PRUDENT MAXIMIZING COST STABLE & ATTRACTIVE FINANCIAL VALUE TO ALL EFFICIENT AND PREDICTABLE PORTFOLIO OF MANAGEMENT OF OUR DIVERSIFIED CASH FLOWS GROWTH STAKEHOLDERS ASSET BASE OPTIONS 13
2. Stable & predictable cash flows High quality clients in Chile 1 CUSTOMER BASE PROFILE +100 ~9 YEARS 52%/48% ~93% Total Average life of Regulated/ Customers customers PPAs unregulated with credit customers ratings 2 PPAs IN CHILE: MAXIMUM CONTRACTED ENERGY COMMITMENT (TWh) Regulated Customers Unregulated Customers New Contracts with unregulated customers 14 14 15 12 12 12 10 9 9 6 3 0 2018 2019 2020 2021 2022 2023 Note: All figures as of Jun18 14 1 Average monomic prices are calculated by dividing the total amount of sales in US$, by physical energy sales in MWh
2. Stable & predictable cash flows Stable cash flow profile supported by long-term PPAs in Peru 1 PPA PROFILE. 2 ENERGY SALES & INDEXATION. (%) Average life of long-term PPAs of ~6 years. Spot US PPI 21% US$ FX adjusted and US$ denominated capacity payments. 22% ~75% contracted through 2023. Strong AAA locally-rated off takers. Gas PPAs 78% 79% 3 PPA PORTFOLIO. (TWh) Regulated Customers Unregulated Customers 4 3.0 3.1 3.0 3.0 3 2.2 2.1 2 1 0 2018 2019 2020 2021 2022 2023 15 Note: as of Jun18
2. Stable & predictable cash flows Significant increase in number of clients over the past 2 years in Chile 2016 2018 3 +100 UNREGULATED UNREGULATED CUSTOMERS CUSTOMERS 15 15 REGULATED REGULATED CUSTOMERS CUSTOMERS 6 +300 SELLING SELLING POINTS POINTS 16 16 Note: All figures as of Jun18
2. Stable & predictable cash flows Long-term PPAs to ensure cash flow stability WHOLE-SALE POWER COMMERCIAL POLICY BASE OF ASSETS & PPAS LEVEL Optimal Contracting level 1 Available Contracting I. Renewable Capacity: Capacity Level Hydro, solar and wind II. Efficient thermal capacity: CCGT Coal and CCGTs Existent CCGT Cost structure properly reflected in 2 sale prices Existent Coal CPI Fuel Prices Existent Solar & WInd Exchange rate + Projects Active risk management 3 Existent I. LNG purchases in the short and mid term Hydro + Projects II. Financial hedges 17 17
2. Stable & predictable cash flows PPAs renewal opportunities in Chile UNREGULATED CUSTOMERS REGULATED CUSTOMERS In the coming years there is a relevant amount of 1. Upcoming regulated auctions: energy for large unregulated clients to be re- contracted. According to the CNE’s preliminary report, around 10 TWh will be auctioned in the next years , based on the Since 2017, Colbun has signed new contracts with following energy requirements: large and medium-size clients for a total of ~2.3 * TWh/year. • ~5.4 TWh for 2024 • ~4.2 TWh for 2026 • Minera Zaldivar, signed in Jun18 for a total supply of 550 GWh/year, for 10.5 years 2. Decreasing prices in the last regulated auctions in Chile: starting in Jul20 . CMPC, signed in Oct17 for the supply of power • Year 2013 2014 2015 2016 2017 for 630 GWh per year over a 10-year , Energy (TWh) 4.7 12.0 1.2 12.5 2.2 started in Jan18. Price 126 108 79 48 33 (US$/MWh) Wallmart, signed in Dec17 for ~300 GWh/year • for 4 years , started in Jan18. Supply 2016/2019 2016/2019 2023 2023 2024 starting Other customers signed during 2017 for ~800 • GWh/year with average tenors ranging from 4 to 6 years. 18
Value proposal Leading position supported by competitive strengths 1 2 3 4 5 PRUDENT MAXIMIZING COST STABLE & ATTRACTIVE FINANCIAL VALUE TO ALL EFFICIENT AND PREDICTABLE PORTFOLIO OF MANAGEMENT OF OUR DIVERSIFIED CASH FLOWS GROWTH STAKEHOLDERS ASSET BASE OPTIONS 19
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