Endesa Chile IR Presentation 1H 2016
Organization structure Endesa Chile (before Spin-Off) Committed Shareholders ITALY 61% 14% CHILE Enersis S.A. 60% 6% Chilean Pension Funds 4% ADRs (Citibank N.A.) Retail 60% 16% Institutional Investors CHILE PEHUENCHE, 93% CELTA, 96% GASATACAMA, 98% CHILE 1 ARGENTINA BRAZIL 1 PERU COLOMBIA • ENEL BRASIL, 37% • GNL Quintero, 20% AMPLA, 17% • COSTANERA, 76% • Transquillota ,48% • EMGESA, 27% • EDEGEL, 62% COELCE, 22% • EL CHOCÓN, 65% • Electrogas, 43% FORTALEZA, 37% • GNL Chile, 33% CDSA, 37% CIEN, 37% 1 Recognized as equity method investments. 2 Endesa Chile Investor Presentation 1H 2016 USE: Public, Investor Relations
Reorganization highlights Spin-Off of non-Chilean assets to Endesa Américas Enel SpA Enel SpA Enel SpA These companies are expected to merge in 100% 100% 100% Structure as of December 2015 2H16. Enel Enel Enel Iberoamérica Iberoamérica Iberoamérica 61% 61% 61% >50% 61% Enersis Enersis Enersis Enersis Enersis Chile Américas Chile Américas Chilectra Endesa Américas Américas 99% 60% 99% 60% 99% 60% 99% 60% Chilectra Endesa Chilectra Endesa Chilectra Endesa Chilectra Endesa ARG BR COL PE Américas Américas Chile Chile Chile Chile CHI Spin - Off ARG BR COL PE As of March 1, 2016, Endesa Chile Spin- 12/18/2015: ESMs approved the Spin-Off. Off of Endesa 03/01/2016: Spin-Offs of Enersis, Endesa Chile and Chilectra became effective. Américas became effective. 2H16: ESMs call to vote on the merger. 3 Endesa Chile Investor Presentation 1H 2016 USE: Public, Investor Relations
Organization structure Endesa Chile (after Spin-Off) ITALY Committed Shareholders 61% CHILE 18% 60% Enersis S.A. 3% Chilean Pension Funds 3% ADRs (Citibank N.A.) Retail 60% 16% Institutional Investors CHILE PEHUENCHE, 93% CELTA, 96% GASATACAMA, 98% Average volume traded (MMUS$) 2015 2016 CHILE 1 Chilean Stock Exchanges 6.0 4.9 50% NYSE 4.4 5.0 50% GNL Quintero, 20% Transquillota ,48% Total 10.4 9.9 100% Electrogas, 43% GNL Chile, 33% 4 Endesa Chile Investor Presentation 1H 2016 1 Recognized as equity method investments. USE: Public, Investor Relations
Key investment considerations Attractive business in Chile One of the largest electricity generation companies in Chile. • Proven track record with more than 70 years of experience Well diversified portfolio of generation assets, including all types of technologies. • Hydroelectric assets prevailing in the Chilean Central Interconnected System SIC. • Competitive thermal assets to reduce hydrological risks. More than doubled its total installed capacity in the last 20 years. Conservative commercial policy to cope with hydrological risks. Best investment grade in the region. Stable ratings by Credit Rating Agencies (BBB+) Stable regulatory framework to develop reliable long term business. 5 Endesa Chile Investor Presentation 1H 2016 USE: Public, Investor Relations
Well diversified generation assets Most relevant player in hydro generation Installed Capacity 6,351 MW 1% HYDRO 34% COAL Tarapaca OIL-GAS 55% D. Almagro – NCRE Taltal Huasco 10% Los Molles Santiago San Isidro Cachapoal Maule Laja Bocamina Bio Bío 55% of Endesa Chile’s installed capacity corresponds to hydro resources Hydro : 3,456 MW Energy sales 1H16 : 12,139 GWh Oil-gas : 2,173 MW Energy sales 1H15 : 11,349 GWh Coal : 636 MW Market Share 1 : 36% NCRE 2 : 87 MW 1:Calculated based on total sales of the country. 6 Endesa Chile Investor Presentation 1H 2016 USE: Public, Investor Relations 2: Non Conventional Renewable Energy.
Balanced commercial policy Leading to revenue stability Physical sales: 12,139 GWh GWh Change 1 Physical Sales 1H16 REGULATED 9,578 11% 6% 15% UNREGULATED 1,883 -9% 79% SPOT 678 0% TOTAL 12,139 7% Regulated Unregulated Spot Customers Customers Chile – Contracted energy with Regulated Customers (GWh) Energy sales by type of customer (Million Ch$) 18,437 784,226 18,130 17,765 710,024 16,361 15,344 15,030 2,541 61,471 2,374 2,309 117,985 78,827 2,146 1,673 1,762 824 12,407 1,806 872 121,039 1,795 1,775 1,775 812 1,811 7,350 6,883 6,469 5,597 604,770 5,694 5,589 510,158 4,670 7,180 6,873 7,110 7,129 6,745 6,795 1H 2015 1H 2016 5,114 Unregulated Regulated 2016 2017 2018 2019 2020 2021 2022 Spot Customers Customers Chilectra CGE Chilquinta Saesa 7 Endesa Chile Investor Presentation 1H 2016 1 Compared with 1H15 USE: Public, Investor Relations
Financial Highlights Improving results in Chile Consolidated Income Statement 1 Change 3 MM US$ 2 2016 1H 2016 1H 2015 Revenues 848,484 735,567 15% 1,231 Costs (487,511) (528,721) -8% (707) Contribution Margin 360,973 206,846 75% 524 EBITDA 300,099 142,206 111% 435 EBITDA Margin 35.4% 19.3% 83% EBIT 234,078 83,329 181% 340 Net Financial Expenses (6,852) (49,532) -86% (10) Related Company Results 5,471 4,026 36% 8 Taxes (30,863) (14,570) 112% (45) Net Income 281,520 195,606 44% 408 Attributable to shareholders of Endesa Chile 237,448 90,571 162% 344 1 Under IFRS, Endesa Chile has adopted the Chilean Peso as functional currency, comparisons between periods have been only made using Ch$. 2 Referential average exchange rate was 689,4 Ch$/US$ as of June 30, 2016. 3 When comparing 1H016 with 1H2015 8 Endesa Chile Investor Presentation 1H 2016 USE: Public, Investor Relations
Healthy debt maturity profile Solid financial ratios and investment grade category (BBB+) Financial Debt Maturity 1 as of June 2016 1,200 1,085 Total Debt: US$ 1,478 MM 1,000 800 600 400 203 200 78 44 28 8 8 3 13 3 3 3 0 < 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years and beyond Bonds Banks and Other ype 1 Debt by Currency 1 Debt by T • Cash: US$ 157 MM Others UF + CLP 15% 7% • Committed Credit Lines: US$ 312MM • Non-Committed Credit Lines: US$ 34 MM • Average life of debt: 10 years • International Credit Rating: BBB+ US$ 93% Bonds 85% 9 Endesa Chile Investor Presentation 1H 2016 USE: Public, Investor Relations 1 Includes arrangements and other consolidation adjustments.
Consolidated Cash Flow Generation (US$ million) 1 Including discontinued operations 700 600 110 500 157 379 400 300 179 200 217 100 151 0 Cash and equivalents Funds from operations Capex Financing activities & Dividend payment ² Cash and equivalents June-15 Exchange rate effects June-16 1. Referential average exchange rate was 689.40 Ch$/US$ as of June 30, 20156 2. Dividend payment considers cash outflows to Enersis and all minorities’ shareholders. 10 Endesa Chile Investor Presentation 1H 2016 USE: Public, Investor Relations
Markets with high potential for growth Annual growth of 3.4% in electricity demand in Chile* Direct relation between GDP and electricity demand 18,000 CANADA Electricity consumption, per capita (Kwh per year) 16,000 FINLAND 14,000 UNITED STATES 12,000 AUSTRALIA 10,000 AUSTRIA JAPAN 8,000 FRANCE GERMANY RUSSIA 6,000 SPAIN UNITED KINGDOM ITALY GREECE 4,000 CHILE CHINA ARGENTINA BRAZIL MEXICO 2,000 PERU IRELAND INDIA COLOMBIA BOLIVIA 0 0 10,000 20,000 30,000 40,000 50,000 60,000 GDP per capita (current PPP, US$) Data source: The World Bank. • Chile aims to be in the group of developed countries • There is no development without energy. * Average for 2005-2015 period. 11 Endesa Chile Investor Presentation 1H 2016 USE: Public, Investor Relations
Evolution of Endesa Chile’s total installed capacity Endesa Chile has more than doubled its capacity in the last 20 years 6,501 1% 6,351 1% GasAtacama 5,611 1% 781 MW* 44% 4,477 37% 44% 4,035 24% Los Cóndores 28% 150 MW 2,513 13% 62% 55% 55% 76% 72% 87% 1995 2000 2005 2010 2016 Under construction • A well diversified generation matrix incorporating different types of generation technologies (Coal, LNG and NCRE), providing a better position to cope with hydrological risks. • 2% increase in installed capacity through projects under construction. 12 * Capacity added in 2014. Endesa Chile Investor Presentation 1H 2016 USE: Public, Investor Relations
Projects under construction To support growth of the country Los Cóndores • Run-of-the-river, hydroelectric power plant. • Located in San Clemente, in Maule region, Chile. • 150 MW of installed capacity. • Estimated generation of 600 GWh/year. • Estimated load factor: 46%. • Total CAPEX of US$ 662 million. • 33% progress as of June 2016. 13 Endesa Chile Investor Presentation 1H 2016 USE: Public, Investor Relations
Credit Rating Agencies’ Recognition Attractive ratings since 2010 Jan. 2010 Apr. 2011 Since: Feb. 2010 Jan. 2010 Apr. 2010 Baa2 BBB+ BBB+ AA (cl) AA Dec. 2015 Feb. 2016 Mar. 2016 Jul. 2016 Mar. 2016 Affirmed: International market Chilean market RATINGS BASED ON: • Well diversified and efficient assets • Leading market share in Chile • Transparent and favorable regulatory framework in Chile • Solid financials, good cash flow generation and prudent financial management • Conservative commercial policy 14 Endesa Chile Investor Presentation 1H 2016 USE: Public, Investor Relations
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