Corporate presentation LV Andean Conference 2018
LPG distribution player LPG distribution player in the Andean Region, with presence in Chile, Colombia and Peru, three of the most attractive markets in the region Strong positioning in Chile, Colombia and Peru Empresas Lipigas - EBITDA December 2017, LTM % EBITDA, December 2017 UDM EBITDA per country #3 • 81,331 tons LPG • 13.8% market share #4 • 152,336 tons LPG • 8.4% del market share Empresas Lipigas main financial indicators December 2017 UDM #2 Total clients as of December ‘17: 2.1 mm • 466,051 tons LPG • 36.9% del market share Revenue December ‘17 UDM: USD 780 mm EBITDA December ‘17 UDM: USD 145 mm Net income December ‘17 UDM’: USD 72 mm 1 Source: The Company .
Over 60 years of successful track-record Group of regional LPG distributors Consolidation period in Chile 1950 1950 1985 Lipigas is constituted The Yaconi, Santa Cruz, Noguera, as an LPG distribution Vinagre and Ardizzoni fathousandies company in conclude the acquisition period of LPG Valparaiso distributors, holding an ownership interest in Lipigas, Codigas, Agrogas and Enagas 1959 Codigas is constituted as an 2000: LPG distribution company in Group of owner families sells 45% of the Santiago shares of the group of companies to 1961 2000-2004 Agrícola O'Higgins, created 1953, begins its supply services in the province of O’Higgins The four brands are grouped under Empresas Lipigas S.A., seeking 1977 consolidation in terms of service quality, centralized management and operating Agrícola O'Higgins becomes Agrogas efficiency 2 Source: The Company, website information
Over 60 years of successful track-record International expansión Diversification / Consolidation 2010 2014 2015 Lipigas acquires 70% of Gas LNG ground (truck) distribution begins País (in 2013 it acquires the remaining 30%) 2015 2012 First bond issuance: Repsol sells its 45% ownership UF 3.5 million (USD 140 million) interest to LV Expansión, an investor group. 2015 2012 The Quintero maritime terminal Lipigas acquires begins operating; thus allowing direct LPG imports 2013 2016 Lipigas acquires Empresas Lipigas is listed on stock exchange 2014 2017 2015 Lipigas acquires Small power plant operation begins (6 MW) 2016 Lipigas acquires 2017 Lipigas acquires 3 Source: The Company
Products and formats distributed by Lipigas Bottled 58% Bulk 42% • Deregulated tariff 1 • Deregulated tariff 1 • Residential and • Industrial, commercial and commercial customers residential customers • Distribution in light • Distribution in bulk tank trucks trucks • Direct distribution and through Liquified • Direct distribution / metered networks (160 Petroleum sub-distribution thousand clients) Gas • Spot sales • Spot sales and contract sales (LPG) Sales Dec. 2017 LTM Sales Dec. 2017 LTM 273 thousand ton 193 thousand ton 54 thousand ton 27 thousand ton 79 thousand ton 73 thousand ton • Regulated, maximum profitability (real 9% over assets) Natural Natural • Commercial and residential customers • Deregulated tariff Gas Gas • Distribution through networks • 100% industrial customers (NG) (NG) Liquefied Liquified Sales Dec. 2017 LTM • Distribution in bulk trucks 1.4 million m 3 Natural Natural (1,000 tons GLP equivalent) • Direct distribution Gas Gas • Contract sales • Direct distribution (LNG) (LNG) Compressed Compressed • Spot sales Natural Gas Natural Gas Sales Dec. 2017 LTM Sales Dec. 2017 LTM (CNG) (CNG) 24.2 million m 3 81.1 million m 3 19,000 tons LPG equivalent) (63,000 tons GLP equivalent) 4 Source: The Company, website information. (1) Colombia has deregulated tariff, with the restriction of a maximum price
Ownership structure Controller and founder group Group composed by the Yaconi, Santa Cruz, Vinagre, Noguera and Ardizzoni families The Controlling Group has over 30 years of experience in the LPG industry Stock market At the end of 2016, LV Expansión diluted and sold 20% of the Lipigas property, distributing the remaining 25% to its participants. The Controlling Group acquires part of the shares placed on the Stock Exchange February 2018 6.500 6.000 Stock price (CLP) 5,779 5.500 Market Cap at close (MM CLP) 656,347 CLP Market Cap at close (MM USD) 1,114 5.000 P/E (s/ net income LTM 31-12-17) 15.4 4.500 EV / EBITDA LTM 31-12-17 8.9 4.000 Dividend yield 4.9% 24/11/2016 24/12/2016 23/01/2017 22/02/2017 24/03/2017 23/04/2017 23/05/2017 22/06/2017 22/07/2017 21/08/2017 20/09/2017 20/10/2017 19/11/2017 19/12/2017 18/01/2018 17/02/2018 5 Source: The Company. Santiago stock exchange
2017: Lipigas consolidates direct LPG import in Chile LPG industry supply Lipigas supply 5% National 11% 23% production (ENAP) 53% 74% 77% 46% 6% 16% Deficit 89% 0% 0% 6% Imported 13% 10% 26% 2% 3% 19% 11% 10% 2014 2015 2016 2017 ENAP GASMAR Argentina Peru Quintero terminal 2017 Imported 3% ~100% Others Colombia 16% Local production (Ecopetrol, others) Ecopetrol Balanced 81% 2017 Bolivia ~100% 16% Petroperú Others Local production 22% Peru (Camisea, Petroperú, 3% others) Balanced Camisea 59% 6 Source: The Company, website information.
Strong positioning in the Andean Region Presence in Chile, Colombia and Peru Colombia and Peru present consolidation opportunities Chile Colombia Peru 1,200,000 customers 360,000 customers 580,000 customers North zone South zone Market Share 1 Market Share 1 Market Share 1 Other Other companies companies 8.4% (+45 ) 13.9% (+60 ) 36.9% 25.8% 2 31.3% 25.0% 47.6% 34.9% 12.0% 19.9% 37.3% 7.0% 7 Source: SUI, OSINERMING and Lipigas estimates. Storage and bottling plants (1) Market share based on tons sold accumulated as of December 2017.. (2) Abastible in Peru: only retail sale. Does not contain wholesale sales of the terminal
Lipigas Strategic Plan Strengthening LPG business Growth and diversification in Multi-Energy the gas business (NG, LNG, CNG) 8 Source: The company
Strengthening LPG business Increase in the relationship with end customers Direct distribution DD as % of bottled sales 22% 17% 16% 14% 2014 2015 2016 2017 Consolidation of the brand image Innovation Hall of Fame of major brands of Chile 9 Source: The Company
Strengthening LPG business Use of digital tools in the relationship with end customers Lipiapp Business intelligence Efficiency in costs and distribution expenses Distribution centers Facilities and maintenance 10 Source: The Company
Strengthening LPG business Optimization of the cost of LPG Imports from Argentina Quintero maritime terminal Safety in operations ISO certification in the three countries OHSAS certification in Chile and Peru 11 Source: The Company.
Growth and diversification in the gas business Natural gas networks (Chile) Complete offer to customers Puerto Montt and Osorno LNG (Chile) Growth opportunities Leaders in the segment 12 Source: The Company
Growth and diversification in the gas business Gas networks (Colombia) Consolidation opportunities Ingasoil purchase in 2017 CNG (Peru) Automotive Industrial 13 Source: The Company
Growth and diversification in the gas business Development of new applications Isolated electric generation Motors for irrigation Geographic expansion 14 Source: The Company
Geographic expansion in Latin America Successful acquisitions’ track-record Fragmented markets with consolidation opportunities Colombia Peru Other Consolidation of Other companies companies current markets 8.4 (+45 ) 13.9 (+60 ) 31.3 25.0 47.6 34.9 12.0 19.9 7.0 Consolidation opportunities LPG consumption in Latam 2016 Thousands tons per year Target to incorporate new gas companies in other Latin-American countries Identified opportunities in less consolidated markets Expansion to Profitability in Latin America in line with Lipigas’ new attractive strategy markets Source: The Company, WLPGA 15
Multi-Energy Comprehensive energy solutions for industrial customers Other services to industries Marquesa – Small power plants Increase in share of energy wallet Solar Sales / services to residential customers customeras 16 Source: The Company
Solid results’ track-record Sales volume 1 Thousand LPG equivalent tons 782 759 656 622 535 454 458 369 390 371 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 GLP Chile ex Backup Backup GN Chile GNL Chile GLP Colombia GLP Peru GN Peru EBITDA USD mm 146 129 132 93 86 85 81 80 79 66 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Chile Colombia Peru 17 Source: The Company Financial figures are converted from CLP to USD at a FX = 600
Consolidated Net Income and Capex Net income USD mm 71 65 60 57 56 52 48 44 40 40 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Capex USD mm 95 91 77 73 5 62 2 48 58 6 47 7 6 5 49 4 3 7 42 8 8 30 23 26 66 5 4 58 17 5 42 36 31 26 26 21 21 17 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Chile Colombia Peru Acquisitions 18 Source: The Company
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