Enel Generación Chile Investor Relations Presentation as of June 30, 2017
Organization structure Enel Generación Chile ITALY Enel Generación Chile´s ENEL SpA Shareholders 2 61% CHILE ENEL CHILE 60% ENEL GENERACIÓN CHILE PEHUENCHE, 93% GASATACAMA, 97% Average daily volume traded (MMUS$) 2015 2016 CHILE 1 Chilean Stock Exchanges 6.0 3.9 NYSE 4.4 3.9 Transquillota, 48% GNL Chile, 33% Total 10.4 7.8 1 Recognized as equity method investments. 2 As of June 30 st , 2017. 2
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 Strong portfolio of contracts leading to margin stability Best investment grade in the region. Stable ratings by Credit Rating Agencies (BBB+) Stable regulatory framework to develop reliable long term business 3
Competitive generation mix in the electricity market Most relevant player in hydro generation Los Molles: 18 MW Installed Capacity 6,351 MW Rapel-Sauzal : 466 MW Maule : 55% Hydro 875 MW 3,465 MW Laja : 940 MW 1% Ralco-Pangue : 1,157 MW Ojos de Agua: 9 MW HYDRO 34% GasAtacama: 781 MW COAL Tarapaca: 182 MW OIL-GAS D. Almagro – Taltal : 268 MW 55% 44% Thermal Huasco : NCRE 64 MW 2,808 MW San Isidro 1 and 2 : 778 MW 10% Bocamina 1 and 2: 478 MW TG Quintero : 257 MW 55% of Enel Generación Chile’s installed capacity Canela : 1% NCRE 2 18 MW corresponds to hydro resources 78 MW Canela II : 60 MW Hydro : 3,465 MW Energy sales 1H17 : 11,428 GWh Oil-gas : 2,173 MW Energy sales 1H16 : 12,139 GWh Coal : 636 MW Market Share 1 : 34% NCRE 2 : 78 MW 1 :Calculated based on total sales of the country. 4 2 : Non Conventional Renewable Energy.
Capacidad Innovadora – Portafolio Commercial Leadership Comercial++++++++++++++++++++++++++++++++ Strong portfolio of contracts favors margin stability Negocio de Generación 22 4.3 4.2 20 4.3 3.4 2.0 18 2.0 3.0 2.0 1.6 0.5 0.4 16 2.0 2.0 14 1.6 5.3 TWh 5.8 5.8 12 2.0 0.2 10 18.5 17.9 17.6 17.5 8 15.9 14.6 5.8 13.1 6 10.8 10.2 10.0 4 4.1 2 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Regulated Customers Auction August 2016 Free Customers New Free Customers 2016 • Enel Generación Chile was awarded 50% approximately of the energy tendered by the Authority in 2016. The amount awarded is 5.9 TWh/year starting in 2022. • The Company made a competitive offer based on its own generation mix with its existing plants and the contribution of non-conventional renewable energy from EGP. Posición activa en clientes libres nos permite capturar todas las • Our strategic vision enables us to remain leaders in the energy commercialization in Chile, anticipating changes and new oportunidades de mercado dada la flexibilidad del portafolio market conditions. 5
Balanced commercial policy Leading to revenues stability Energy sales by type of customer 1 (Million Ch$) Physical sales 1 : 11,428 GWh 784,226 1% 707,109 63,480 27,999 23% 102,539 138,630 618,207 540,480 76% 1H17 1H16 Regulated Free Customers Spot Regulated Unregulated Customers Spot Customers Customers Physical Sales 1 1H17 Change 2 GWh REGULATED 8,650 -10% UNREGULATED 2,622 39% SPOT 156 -77% TOTAL 11,428 -6% 1 For the period ended June 30, 2017 6 2 Compared with 1H16
Financial Highlights 1H 2017 results MM US$ 3 1H17 Consolidated Income Statement (Ch$ MM) 1 Change % 2 1H17 1H16 Revenues 766,990 848,484 (10%) 1,162 Costs 1% (489,666) (487,511) (742) Contribution Margin 277,324 360,973 (23%) 420 EBITDA 217,742 300,099 (27%) 330 EBITDA Margin 28% 35% (20%) 28% EBIT 158,873 234,078 (32%) 241 Net Financial Result (16,882) (6,852) 146% (26) Related Company Results (778) 5,471 (114%) (1) Net Income from other Investments 80 n/a 105,462 160 Taxes (62,766) (30,863) 103% (95) Net Income 281,520 (33%) 188,153 285 Attributable to shareholders of Enel Generación Chile 184,995 237,448 (22%) 280 1 Under IFRS, Enel Generación Chile has adopted the Chilean Peso as functional currency, comparisons between periods have been only made using Ch$. 2 When comparing 1H17 with 1H16. 3 Referential average exchange rate was Ch$ 659.98 per US$ 1.00 as of June 30, 2017. 7
Healthy debt maturity profile Solid financial ratios and Investment grade rating (BBB+) Financial Debt Maturity 1 as of June 2017 Total Debt: US$ 1,269 MM 800 726 600 330 400 200 71 45 45 28 8 3 3 3 3 4 0 < 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years and beyond Bonds Banks and Other Debt by Currency 1 Debt by Type 1 • Cash: US$ 16 MM 8% 2% • Committed Credit Lines: US$ 314 MM US$ Others • Average life of debt: 10 years UF + CLP Bonds • International Credit Rating: BBB+ 92% 98% 8 1 Includes financial arrangements and other consolidation adjustments.
Credit Rating Agencies’ Recognition Attractive ratings since 2010 Jan. 2010 Apr. 2011 Feb. 2010 Jan. 2010 Apr. 2010 Since: Baa2 BBB+ BBB+ AA AA Dec. 2016 Feb. 2016 Feb. 2017 Jun. 2017 Feb. 2017 Affirmed: Chilean market International market RATINGS BASED ON: • Well diversified and efficient assets • Leading market position in Chile • Transparent and stable regulatory framework in Chile • Solid financials, good cash flow generation and prudent financial management • Balanced commercial policy 9
Consolidated Cash Flow (US$ million) 1 Improved cash flow generation 450 400 350 153 300 173 212 250 29 200 360 150 100 173 50 16 0 Cash and Funds from Capex Financing activities Funds from assets Dividend payment ² Cash and equivalents June 16 operations & Exchange rate disposal equivalents June 17 effects 1. Referential average exchange rate was 659.98 Ch$/US$ as of June, 2017. 2. Dividend payment considers cash outflows to Enel Chile and all minorities’ shareholders. 10
Dividend policy Pay-out ratio increasing to 70% in 2020 70% 65% 60% 55% 50% 2016 2017 2018 2019 2020 • Enel Generación Chile paid on Jan 27 th an interim dividend of Ch$ 7.25 per share. • On May 26 th , the Company paid a definitive dividend of Ch$ 21.56 per share also accrued to 2016 results. • Dividend Yield 1 increased from 2.7% in 2015 to 6.5% in 2016. Note: As of March 1st , 2016, Enel Generación Chile Spin-Off became effective. 11 1 Considering Dividend Payments N ° 61 and 62 for 2016 and N ° 59 and 60 for year 2015 using the closing share price for each year.
Strategic Plan 2017 - 2019 EBITDA evolution and drivers Drivers +26% Normalization of hydrology since Hydrology 2018, favors an increase in hydro production, improving margin Commercial operations of Additional Los Cóndores, increasing our 1,108 capacity production in 600 GWh/year 879 approximately. Contractual position allows to defend Sale price margins when spot prices fall down 2016 2019 Diversified generation mix mitigates Assets Mix Accumulated EBITDA 2017 - 2019: MM US$ 3,095 hydrology risk Increasing EBITDA due to commercial portfolio and efficient generation assets 12
Strategic Plan 2017 - 2019 Capex Maintenance and Business Development (MM US$) Total 2017-2019 349 219 248 264 Mantenimiento Maintenance BD 119 439 158 18 101 85 61 2017 2018 2019 Total investment for the period 2017 – 2019: MM US$ 687: Mantenimiento BD Maintenance • New Capacity: Los Cóndores. • High environmental standards. • Maintaining high standard of operational efficiency. Operational excellence in the generation fleet 13
Optimization of Bocamina Environmental improvements • Thermal Complex with two Coal Units: • 128 MW (Unit 1). • 350 MW (Unit 2). • The following improvements were made: • Advanced technology filters for the water cooling suction system. • Inline air quality monitoring system. • Coverage of coal collection fields, North dome completed. • Construction of South dome started in 2017. 14
Project 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. • 55% progress as of June 2017. 15
Safety, Environment and Sustainability Activities involved in our day-to-day operations Environment Sustainability Safety Indicators NATIVE SPECIES REFORESTATION BOCAMINA OPTIMIZATION AGREEMENT - RALCO 0,12 1,60 1.28 1.25 +2% 1,40 0,10 1,20 0,08 1,00 0,06 0,80 0.03 0.03 0,60 0,04 MEMORANDUM OF UNDERSTANDING - ENVIRONMENTAL IMPROVEMENT - 0,40 0,02 SAN ISIDRO PAPOSO & TAL-TAL COMMUNITIES 0,20 0,00 0,00 2016 YTD 2017 Frequency Index Severity Index Frequency Index: N ° Accidents (Enel Generación + Contractors) per million hours worked (Enel Generación + Contractors) Occupational health and safety as our priority Ongoing work to strengthen relationships with communities Continuous environmental improvements in our power plants 16
Closing Remarks Attractive business in Chile Environmental Flexible and improvements Strong Safety as competitive Operational and portfolio of our priority generation relationships efficiency contracts with fleet communities 17
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