Company Presentation 1Q 2015 1 2 AGENDA 1. SIC OVERVIEW 2. - PowerPoint PPT Presentation

Company Presentation 1Q 2015 1

2 AGENDA 1. SIC OVERVIEW 2. COLBÚN OVERVIEW A. OPERATIONS B. FINANCIALS C. PROJECTS 2

3 SECTOR SEGMENTATION 3 SUB-SECTORS G ENERATION T RANSMISSION D ISTRIBUTION Regulated sectors (concessions) R ELEVANT I NSTITUTIONS Ministry of Energy Regulator: CNE Supervisor: SEC Coordinator: CDEC OVERVIEW OPERATIONS FINANCIALS PROJECTS

4 GEOGRAPHIC SEGMENTATION 4 SEPARATE GRIDS SING – Northern Grid SING Arica 4,146 MW - 25% 15.881 GWh - 25%  Predominantly mining activity  Mainly thermal capacity Antofagasta  ~25% of national installed capacity Tal-Tal SIC SIC – Central Grid  ~25% of national electricity output 12,690 MW - 75% 46.052 GWh - 74%  90% of the country’s population  Mostly residential consumption, Santiago but also relevant industrial and some mining activity  Large hydro capacity component  ~75% of national installed capacity  ~75% of national electricity output Chaitén Castro SEA 52 MW - 0% 146 GWh - 0% Cochrane Pto. Natales SAM 100 MW - 0% 276 GWh - 0% Pto. Source: CNE Williams OVERVIEW OPERATIONS FINANCIALS PROJECTS

5 MARKET STRUCTURE GENERATORS REGULATED UN-REGULATED SPOT CUSTOMERS CUSTOMERS MARKET DISTRIBUTION “FREE” CDEC COMPANIES CUSTOMERS Regulated Unregulated Marginal Cost/ Auction Tariffs Auction Tariffs Spot Price OVERVIEW OPERATIONS FINANCIALS PROJECTS

6 GENERATION AND PRICE EVOLUTION IN CHILE’S CENTRAL GRID (+) Development based on gas turbine (diesel) • Development based on hydro + competitive natural gas (+) LNG re-gasification terminal since 2009 • Power purchase agreements signed under fixed prices (set by (+) Coal- power plants regulator for distribution clients ) → New law: PPA tenders with price indexation 50 300 Others 8% Diesel 3% 45 250 Annual Power Generation – SIC Gas 15% 40 35 200 30 USD/MWh TWh 25 150 Coal 28% 20 100 15 10 50 Hydro 45% 5 0 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Others Diesel-Fuel LNG Coal /Petcoke Gas Hydro Average SIC PPA Price Average Spot Market Price Source: CNE; CDEC; www.systep.cl OVERVIEW OPERATIONS FINANCIALS PROJECTS

7 AGENDA 1. SIC OVERVIEW 2. COLBÚN OVERVIEW 1. OPERATIONS 2. FINANCIALS 3. PROJECTS 7

8 OVERVIEW Ownership Intern. Ratings Main Figures As of Mar15 (US$ million) • Fitch: BBB Assets: 6,300 • 24% • S&P: BBB- Equity: 3,400 • 49% 17% Local Ratings Mkt Cap: 5,100 • 10% EBITDA LTM: 510 • • Fitch: A+ Matte Group Angelini Group Net Debt: 1,071 • • Humphreys: AA- Pension Funds Others OVERVIEW OPERATIONS FINANCIALS PROJECTS 8

9 HIGH STANDARDS OF CORPORATE GOVERNANCE Our Board • 2 out of 9 are independent directors Elected every 3 years (indefinitely reelection) • • 2 out of 3 independent directors in the Board Committee 2 female members • • Monthly meetings • Two annual meetings with our external auditors No directors in management positions • • Board and board committee remunerations are approved in the Annual Shareholders Meeting (no equity options) • Code of ethics ruling both workers and directors OVERVIEW OPERATIONS FINANCIALS PROJECTS 9

10 GENERATION ASSETS Installed capacity of 3,278 MW ~ 21% Market Share / 25% by Generation* 48% Hydro 1,589 MW 1,057 MW Reservoir – 67% 532 MW Run-of-the-river – 33% 3,278 MW 52% Thermal 1,689 MW 581 MW Diesel – 35% 766 MW CCGT – 45% 342 MW Coal – 20% (*): In 2014 OVERVIEW OPERATIONS FINANCIALS PROJECTS 10

11 HIGH QUALITY CLIENTS 1 2 Sales Volume by Customer (%) Sales by Type of Costumer (%) Chilectra Unregulated (BBB+/BBB+ )* Regulated 22% CGED (Local 39% Codelco A+) (A/A+) 19% 61% 29% AngloAmeric Saesa (Local an AA) (BBB/BBB+) 16% Others 9% 5% 3 4 Historic Sales by Type of Costumer (GWh) Average Monomic Price (US$/MWh) 14.000 12.000 150 10.000 8.000 100 6.000 50 4.000 Regulated Costumers 2.000 Unregulated Costumers 0 0 2012 2013 2014 1Q15 LTM Regulated customers Unregulated customers Graphs Sources: 1), 2), 3), 4) Colbun as of Mar15 LTM. 4) Average monomic prices are calculated by dividing the total amount of sales in US$, by physical energy sales in MWh. OVERVIEW OPERATIONS FINANCIALS PROJECTS 11

12 COMMERCIAL POSITION 1 Contractual Sales vs. Generation (GWh) GWh 40% 546 591 12.000 11,655 35% 10,998 10,935 10,687 546 3,011 2,801 2,240 9,639 9,805 10.000 30% 8,831 3,234 1,901 2,802 2,242 25% 2,563 8.000 2,709 2,623 323 2,418 - 20% 1,273 1,853 2,616 6.000 - 95 15% 4.000 6,655 6,644 10% 6,578 5,566 5,462 5,233 4,857 2.000 5% 0 0% 2009 2010 2011 2012 2013 2014 1Q15 LTM Hydro Coal LNG Diesel Regulated Sales Unregulated Sales EBITDA Mg Graph Source: Colbun. Unregulated Sales 2013 & 2014 excludes sales to Codelco at Marginal Cost OVERVIEW OPERATIONS FINANCIALS PROJECTS 12

13 POWER PLANT AVAILABILITY 1 Hydro Power Plants 100% 97% 97% 96% 96% 93% 92% 90% 80% 70% 2010 2011 2012 2013 2014 1Q15 2 Thermal Power Plants 100% 94% 93% 91% 91% 89% 90% 79% 78% 80% 70% 2009 2010 2011 2012 2013 2014 1Q15 Graphs Sources: Colbún. OVERVIEW OPERATIONS FINANCIALS PROJECTS 13

14 AGENDA 1. SIC OVERVIEW 2. COLBÚN OVERVIEW 1. OPERATIONS 2. FINANCIALS 3. PROJECTS 14

15 MAIN FIGURES AND METRICS 1 2 Operating Revenues (US$ million) EBITDA (US$ million) & EBITDA Mg (%) 50% 600 537 2.000 1,696 510 40% 500 1,503 1,409 1,406 1.500 36% 352 36% 400 30% 287 300 1.000 20% 200 21% 20% 500 10% 100 0 0 0% 2012 2013 2014 1Q15 LTM 2012 2013 2014 1Q15 LTM 3 4 Capex Cash Flow (US$ million) Net Income (US$ million) 100 600 EBITDA 80 500 63 400 51 50 300 35 200 100 0 0 2012 2013 2014 1Q15 LTM 2012 2013 2014 1Q15 LTM Source: Colbún’s Financial Statements FINANCIALS OVERVIEW OPERATIONS PROJECTS 15 15

16 MAIN FIGURES AND METRICS 1 2 7 Debt & Net Debt (US$ million) Net Debt / EBITDA 2.000 6 Debt Net Debt 5.2 5 1.500 4.1 4 1.000 3 2.1 2.0 2 500 1 0 0 2012 2013 2014 1Q15 2012 2013 2014 1Q15 LTM 3 4 Leverage Ratio* (%) Net Interest Coverage 12 10.9 100 90 89 10.3 10 80 71 70 7.8 7.6 8 6.2 60 6 40 4 2 20 0 0 2011 2012 2013 2014 1Q15 LTM 2012 2013 2014 1Q15 Source: Colbún’s Financial Statements. (*) Calculated as Liabilities/Equity FINANCIALS OVERVIEW OPERATIONS PROJECTS 16 16

17 DEBT AND LIQUIDITY 1 Debt Profile Type Currency Interest Rate  Total Debt: MMUS$ 1,888 Avrg. Maturity: 6.2 years UF  BANKS 10% Avrg. USD Interest Rate: 4.8%  22% Cash: MMUS$ 817   Net Debt: MMUS$ 1,071 BONDS FIXED USD 78%  Dividend Policy 30% 100% 90% (As of Mar15) 2 3 Amortization Structure (US$ million) 800 Banks Bonds 600 Avg. Maturity: 6.2 years 400 Avg. MMUS$ 50 for the next 3 years 200 0 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Source: Colbún’s Financial Statements FINANCIALS OVERVIEW OPERATIONS PROJECTS 17

18 AGENDA 1. SIC OVERVIEW 2. COLBÚN OVERVIEW 1. OPERATIONS 2. FINANCIALS 3. PROJECTS 18

19 COLBÚN HAS SEVERAL GROWTH OPPORTUNITIES Projects in Chile La Mina – Hydroelectric Project  34 MW of Capacity  191 GWh of expected annual generation  Phase: Under Construction since Dec14  Qualifies as NCRE Santa María II – Coal-fired Project  350 MW of Capacity  2,500 GWh of expected annual generation  Phase: Environmentally Approved San Pedro - Hydroelectric Project  ~ 170 MW of Capacity  950 GWh of expected annual generation  Phase: Submit EIA on 2015 PROJECTS OVERVIEW OPERATIONS FINANCIALS 19

20 LA MINA HYDROELECTRIC RUN-OF-THE-RIVER 1 Main Features  Location: San Clemente, Maule region  Capacity: 34 MW 2 Location  Annual Generation: ~ 180-195 GWh  CAPEX including the Tx. line: ~US$120-130 million  Construction + commissioning period: ~25-30 months  Status: Under construction since Dec14 and on schedule  Qualifies as NCRE PROJECTS OVERVIEW OPERATIONS FINANCIALS 20

21 SANTA MARIA II COAL-FIRED POWER PLANT 2 1 Location Main Features  Location: Coronel, Biobío region  Capacity: 350 MW Concepción  Annual Generation: ~2,500 GWh  Construction period : ~43-45 months Santa María II  2014 Main Events:  RCA/RSE commitments Coronel compliance  Stakeholders socialization  EPC contract review PROJECTS OVERVIEW OPERATIONS FINANCIALS

22 SAN PEDRO HYDROELECTRIC POWER PLANT 2 1 Main Features Location  Location: Panguipulli and Los Lagos, Los Ríos region  Capacity: ~ 170 MW San Pedro  Annual Generation: ~900-950 GWh  Construction period: ~40-45 months Panguipulli  2014 Main Events:  Socialization process Valdivia  Submit EIA on 2015 PROJECTS OVERVIEW OPERATIONS FINANCIALS 22

23 SEARCHING FOR INVESTMENT OPPORTUNITIES IN THE REGION Special Focus on Colombia and Peru  Growing Electricity Consumption  Well established regulatory framework  Diversification:  Hydrological Conditions  Generation Technology  Fuel Access  Regulatory Risks PROJECTS OVERVIEW OPERATIONS FINANCIALS