Enel Generación Chile Investor Relations Presentation as of March 31, 2017
Organization structure Enel Generación Chile ITALY ENEL SpA Committed Shareholders 2 61% CHILE Enel Chile S.A. ENEL CHILE 60% 18,0% Chilean Pension Funds 2,7% ADRs (Citibank N.A.) 3,3% 60,0% Retail ENEL GENERACIÓN CHILE 16,0% Institutional PEHUENCHE, 93% Investors 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 March 31 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 Installed Capacity 6,351 MW Los Molles: 18 MW Rapel-Sauzal : 466 MW 55% Hydro Maule : 1% 875 MW 3.456 MW Laja : 940 MW Ralco-Pangue : 1,157 MW HYDRO GasAtacama: 780 MW 34% COAL Tarapaca: 182 MW D. Almagro – Taltal : 268 MW OIL-GAS 44% Thermal 55% Huasco : 64 MW 2.808 MW NCRE San Isidro 1 and 2 : 778 MW Bocamina 1 and 2: 10% 478 MW TG Quintero : 257 MW Canela : 18 MW 1% ERNC 2 Canela II : 60 MW 87 MW 55% of Enel Generación Chile’s installed capacity Ojos de Agua: 9 MW corresponds to hydro resources Hydro : 3,456 MW Energy sales 1Q17 : 5,794 GWh Oil-gas : 2,173 MW Energy sales 1Q16 : 6,025 GWh Coal : 636 MW Market Share 1 : 34% NCRE 2 : 87 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 revenue stability Physical sales: 5,794 GWh Energy sales by type of customer (Million Ch$) 390,361 350,010 2% 13,693 54.235 25,340 21% 58.541 310.786 277.776 77% 1Q17 1Q16 Regulated Spot Free Customers Regulated Unregulated Customers Spot Customers Customers Change 1 Physical Sales 1Q17 GWh REGULATED 4,42 -8% UNREGULATED 1,221 38% SPOT 130 -55% TOTAL 5,794 -4% 6 1 Compared with 1Q16
Financial Highlights 1Q 2017 results MM US$ 3 1Q17 Consolidated Income Statement (Ch$ MM) 1 Change % 2 1Q17 1Q16 Revenues 383,413 415,283 (7.7%) 584.9 Costs (230,478) (2.2%) (225,449) (343.9) Contribution Margin 157,965 184,805 (14.5%) 240.9 EBITDA 129,017 157,461 (18.1%) 196.8 EBITDA Margin 33.6% 37.9% 4.3% - EBIT 98,880 125,041 (20.9%) 150.9 Net Financial Expenses (7,385) 934 (890.6%) (11.3) Related Company Results (695) 2,452 (128.3%) (1.0) Net Income from other Investments 104,902 34 - 160.0 Taxes (42,066) (13,436) 213.1% (64.2) Net Income 153,636 194,646 (21.1%) 234.4 Attributable to shareholders of Enel Generación Chile 152,157 152,568 (0.3%) 232.1 1 Under IFRS, Enel Generación Chile has adopted the Chilean Peso as functional currency, comparisons between periods have been only made using Ch$. 2 When comparing 1Q17 with 1Q16 3 Referential average exchange rate was 644,49 Ch$/US$ as of March 31, 2017. 7
Healthy debt maturity profile Solid financial ratios and Investment grade rating (BBB+) Financial Debt Maturity 1 as of March 2017 Total Debt: US$ 1,274 MM 1.200 1.067 1.000 800 600 400 200 75 45 45 8 3 8 3 3 3 4 10 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$ 336 MM 2% 8% • Committed Credit Lines: US$ 314 MM Others US$ • Average life of debt: 10 years Bonds UF + CLP • International Credit Rating: BBB+ 98% 92% 8 1 Includes 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 Jul. 2016 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 500 450 400 (92) 350 174 (101) 300 (7) 191 250 200 340 150 100 175 50 0 Cash and equivalents Funds from Capex Financing activities & Funds from assets Dividend payment ² Cash and equivalents March 16 operations Exchange rate effects disposal March 17 1. Referential average exchange rate was 655.49 Ch$/US$ as of March, 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 charged to 2016 results. • Dividend Yield 1 increased from 2.7% in 2015 to 6.5% in 2016. Note: As of March 1 st , 2016, Enel Generación Chile Spin-Off became effective. 11 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. 1.
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 approx. 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 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 improvement • Thermal Complex with two Coal Units: • 128 MW (U1) • 350 MW (U2). • 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. • 50% progress as of April 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 1,25 1,40 0,10 -23% 1,20 0,96 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
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