Enel Generación Chile Investor Relations Presentation 9M 2016
Organization structure Enel Generación Chile (after Spin Off) ITALY ENEL SpA Committed Shareholders 61% CHILE Enersis S.A. ENEL CHILE 60% 18% Chilean Pension Funds 3% ADRs (Citibank N.A.) 3% 60% Retail 16% ENEL GENERACIÓN CHILE Institutional PEHUENCHE, 93% Investors GASATACAMA, 97% Average volume traded (MMUS$) 2015 2016 CHILE 1 Chilean Stock Exchanges 6.0 4.9 50% NYSE 4.4 5.0 50% Transquillota ,48% Total 10.4 9.9 100% Electrogas, 43% GNL Chile, 33% 1 Recognized as equity method investments. 2
Key investment considerations Attractive business in Chile One of the largest electricity generation companies in Chile. Proven track record with more than 70 years of experience Well diversified portfolio of generation assets, including all types of technologies. Hydroelectric assets prevailing in the Chilean Central Interconnected System SIC. Competitive thermal assets to reduce hydrological risks. Conservative commercial policy to cope with hydrological risks. Best investment grade in the region. Stable ratings by Credit Rating Agencies (BBB+) Stable regulatory framework to develop reliable long term business. 3
Well diversified generation assets Most relevant player in hydro generation Installed Capacity 6,351 MW 1% HYDRO 34% COAL Tarapaca OIL-GAS 55% D. Almagro – NCRE Taltal Huasco 10% Los Molles Santiago San Isidro Cachapoal Maule Laja Bocamina Bio Bío 55% of Endesa Chile’s installed capacity corresponds to hydro resources Hydro : 3,456 MW Energy sales 9M16 : 17,962 GWh Oil-gas : 2,173 MW Energy sales 9M15 : 17,311 GWh Coal : 636 MW Market Share 1 : 35% NCRE 2 : 87 MW 1:Calculated based on total sales of the country. 4 2: Non Conventional Renewable Energy.
Balanced comercial policy Leading to revenue stability Physical sales: 17,962 GWh Change 1 Physical Sales 9M16 GWh 5% REGULATED 14,080 8% 17% UNREGULATED 3,087 -1% 78% SPOT 795 -31% TOTAL 17,962 4% Regulated Unregulated Spot Customers Customers Chile – Contracted energy with Regulated and Free Energy sales by type of customer (Million Ch$) Customers (GWh) 1,159,136 1,077,215 22 81,863 20 118,810 171,726 18 173,853 16 14 12 10 896,457 781,810 8 6 4 2 0 9M 2015 9M 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Regulated Spot Free Customers Customers Regulated Costumers Free Costumers 5 1 Compared with 9M15
Financial Highlights Improving results in Chile MM US$ 3 2016 Consolidated Income Statement 1 Change % 2 9M 2016 9M 2015 Revenues 1,276,246 1,131,398 13% 1,877 Costs (708,503) (712,864) (1%) (1,042) Contribution Margin 567,743 418,534 36% 835 EBITDA 439,528 320,527 37% 642 EBITDA Margin 34% 28% - 34% EBIT 340,008 229,342 48% 500 Net Financial Expenses (22,741) (95,288) (76%) (33) Related Company Results 6,858 7,483 (8%) 10 Net Income from other Investments 121,405 4,309 2,717% 179 Taxes (82,549) (36,779) 124% (121) Net Income 442,587 364,432 21% 651 Attributable to shareholders of Endesa Chile 396,302 194,459 104% 583 1 Under IFRS, Endesa Chile has adopted the Chilean Peso as functional currency, comparisons between periods have been only made using Ch$. 2 When comparing 9M2016 with 9M2015 3 Referential average exchange rate was 680,08 Ch$/US$ as of September 30, 2016. 6
Healthy debt maturity profile Solid financial ratios and Investment grade rating (BBB+) Financial Debt Maturity 1 as of September 2016 Total Debt: US$ 1,443 MM 1.200 1,089 1.000 800 600 400 153 200 87 45 28 8 8 12 3 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 Debt by T ype 1 Debt by Currency 1 • Cash: US$ 167 MM 12% 7% • Committed Credit Lines: US$ 364MM Others US$ • Average life of debt: 10 years Bonds UF + CLP • International Credit Rating: BBB+ 93% 88% 7 1 Includes arrangements and other consolidation adjustments.
Consolidated Cash Flow Generation (US$ million) 1 Including discontinued operations 900 0 800 83 700 0 600 420 500 462 400 0 300 184 200 0 220 100 162 0 Cash and equivalents Funds from operations Capex Financing activities & Dividend payment ² Cash and equivalents Sept-15 Exchange rate effects Sept-16 1. Referential average exchange rate was 680.08 Ch$/US$ as of Sept 30, 2016 2. Dividend payment considers cash outflows to Enersis and all minorities’ shareholders. 8
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$) Data source: The World Bank. • Chile aims to be in the group of developed countries • There is no development without energy. * Average for 2005-2015 period. 9
Evolution of Endesa Chile’s total installed capacity Endesa Chile has more than doubled its capacity in the last 20 years 6,501 6,351 1% 1% GasAtacama 5,611 781 MW* 1% 44% 4,477 37% 44% 4,035 24% Los Cóndores 28% 150 MW 2,513 13% 62% 55% 55% 76% 72% 87% 1995 2000 2005 2010 2016 Under construction • A well diversified generation matrix incorporating different types of generation technologies (Coal, LNG and NCRE), providing a better position to cope with hydrological risks. • 2% increase in installed capacity through projects under construction. * Capacity added in 2014. 10
Projects under construction To support growth of the country Los Cóndores • Run-of-the-river, hydroelectric power plant. • Located in San Clemente, in Maule region, Chile. • 150 MW of installed capacity. • Estimated generation of 600 GWh/year. • Estimated load factor: 46%. • Total CAPEX of US$ 662 million. • 38% progress as of September 2016. • Total investment of US$ 233 million as of September 2016. 11
Projects under construction To support growth of the country Bocamina II optimization – Coal field domes General information (North dome) • Construction started : August 2015 • Schedule ending construction: December 2016 • Men Hours spent: 606,000 hours. • Cubic Meter of coal accumulated in field: from 130.000 M3 up to 150.000 M3 • Total Capex: US$MM 50 aprox. (north and south domes) Permits • Waiting for construction permits approvals for the south dome. Current status • North dome is 76% complete. 12
Credit Rating Agencies’ Recognition Attractive ratings since 2010 Jan. 2010 Apr. 2011 Feb. 2010 Jan. 2010 Apr. 2010 Since: Baa2 BBB+ BBB+ AA (cl) AA Dec. 2015 Feb. 2016 Mar. 2016 Jul. 2016 Mar. 2016 Affirmed: Chilean market International market RATINGS BASED ON: • Well diversified and efficient assets • Leading market share in Chile • Transparent and stable regulatory framework in Chile • Solid financials, good cash flow generation and prudent financial management • Conservative commercial policy 13
Strategic Plan 2017 - 2019 EBITDA Evolution Drivers 23% Normalization of hydrology since 1,108 1.108 Hydrology 2018, favor an increase in hydro production, improving margin 898 Commercial operations of Los Additional Cóndores starting by the end of capacity 2018, increasing our production in 600 GWh/year approx. Contractual position allows to defend Sale price margins when spot prices fall down 2016E 2019 Diversified generation mix mitigates Assets Mix Accumulated EBITDA 2017 – 2019: Th US$ 3,095 hydrology risk 14
Strategic Plan 2017 - 2019 Capex Maintenance and Business Development Total 2017-2019 349 219 264 248 119 Mantenimiento Maintenance BD 158 439 18 101 85 61 2017 2018 2019 Mantenimiento BD Maintenance Total investment for the period 2017 – 2019: US$ 687 MM: • New Capacity: Los Cóndores. • Higher environmental standards. • Maintain higher standard of operational efficiency. Operational excellence in the generation capacity 15
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 May 24 th a dividend of Ch$ 11.02 per share 1 . • • Enel Generación Chile proforma dividend 2015 was Ch$ 23.95 per share. 1. Note: As of March 1, 2016, Enel Generación Chile Spin-Off became effective. 16
Enel Generación Chile Contact us Susana Rey Catalina González Head of IR Enel Chile Head of IR Enel Generación Chile +56 2 2630 9606 +56 2 2630 9603 susana.rey@enel.com catalina.gonzalez@enel.com Guillermo Berguecio Francisco Basauri Analyst of IR Enel Generación Chile Analyst of IR Enel Generación Chile +56 2 2630 9506 +56 2 2630 9585 guillermo.berguecio@enel.com francisco.basauri@enel.com ir.enelgeneracionchile@enel.com For further information, visit our IR site at: www.enelgeneracion.cl 17
Exhibits 18
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