Enel Generación Chile Investor Relations Presentation FY 2016
Organization structure Enel Generación Chile (after Spin Off) ITALY ENEL SpA Committed Shareholders 61% CHILE Enel Chile S.A. ENEL CHILE 60% 18% Chilean Pension Funds 3% ADRs (Citibank N.A.) 3% 60% Retail ENEL GENERACIÓN CHILE 16% Institutional PEHUENCHE, 93% Investors GASATACAMA, 97% Average daily volume traded (MMUS$) 2015 2016 CHILE 1 Chilean Stock Exchanges 6.0 3.9 Transquillota ,48% NYSE 4.4 3.9 Electrogas, 43% Total 10.4 7.8 GNL Chile, 33% 1 Recognized as equity method investments. 2
Key investment considerations Attractive business in Chile One of the largest electricity generation companies in Chile. Proven track record with more than 70 years of experience Well diversified portfolio of generation assets, including all types of technologies. Hydroelectric assets prevailing in the Chilean Central Interconnected System SIC. Competitive thermal assets to reduce hydrological risks. Conservative commercial policy to cope with hydrological risks. Best investment grade in the region. Stable ratings by Credit Rating Agencies (BBB+) Stable regulatory framework to develop reliable long term business. 3
Well diversified generation assets Most relevant player in hydro generation Installed Capacity 6,351 MW 1% HYDRO 34% COAL Tarapaca OIL-GAS 55% D. Almagro – NCRE Taltal Huasco 10% Los Molles Santiago San Isidro Cachapoal Maule Laja Bocamina Bio Bío 55% of Enel Generación Chile’s installed capacity corresponds to hydro resources Hydro : 3,456 MW Energy sales 2016 : 23,689 GWh Oil-gas : 2,173 MW Energy sales 2015 : 23,558 GWh Coal : 636 MW Market Share 1 : 35% NCRE 2 : 87 MW 1:Calculated based on total sales of the country. 4 2: Non Conventional Renewable Energy.
Balanced commercial policy Leading to revenue stability Physical sales: 23,689 GWh Change 1 Physical Sales 2016 GWh 4% REGULATED 18,516 5% 18% UNREGULATED 4,321 0% 78% SPOT 852 -47% TOTAL 23,689 1% Regulated Unregulated Spot Customers Customers Chile – Contracted energy with Regulated and Free Energy sales by type of customer (Million Ch$) Customers (GWh) 1,474,818 1,516,688 102,003 22 150,079 234,642 20 243,597 18 16 14 12 1,180,043 1,081,142 10 8 6 4 2 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Regulated Spot Free Customers Customers Regulated Costumers Free Costumers 5 1 Compared with 2015
Financial Highlights Improving results in Chile MM US$ 3 2016 Consolidated Income Statement 1 Change % 2 2016 2015 Revenues 1,659,727 1,543,810 8% 2,453 Costs (895,060) (880,891) 2% (1,323) Contribution Margin 764,667 662,919 15% 1,130 EBITDA 594,772 516,861 15% 879 EBITDA Margin 35.8% 33.5% 2.4% 33.5% EBIT 431,386 401,819 7% 638 Net Financial Expenses (35,678) (114,252) (69%) (53) Related Company Results 7,878 8,905 (12%) 12 Net Income from other Investments 121,457 4,309 2719% 179 Taxes (83,217) (76,656) 9% (123) Net Income 521,432 635,021 (18%) 771 Attributable to shareholders of Enel Generación Chile 472,558 392,868 20% 698 1 Under IFRS, Endesa Chile has adopted the Chilean Peso as functional currency, comparisons between periods have been only made using Ch$. 2 When comparing 2016 with 2015 3 Referential average exchange rate was 676,67 Ch$/US$ as of December 30, 2016. 6
Healthy debt maturity profile Solid financial ratios and Investment grade rating (BBB+) Financial Debt Maturity 1 as of December 2016 Total Debt: US$ 1,273 MM 1,500 1,062 1,000 500 80 44 44 8 3 8 3 3 3 4 11 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$ 171 MM 2% 8% • Committed Credit Lines: US$ 512 MM US$ Others • Average life of debt: 11 years UF + CLP Bonds • International Credit Rating: BBB+ 98% 92% 7 1 Includes arrangements and other consolidation adjustments.
Consolidated Cash Flow Generation (US$ million) 1 Including discontinued operations 1,200 1,000 90 800 603 828 600 400 188 200 222 169 0 Cash and equivalents Funds from operations Capex Financing activities & Dividend payment ² Cash and equivalents Dec-15 Exchange rate effects Dec-16 1. Referential average exchange rate was 676.67 Ch$/US$ as of Dec, 2016. 2. Dividend payment considers cash outflows to Enel Chile 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 2,000 MEXICO 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$) Data source: The World Bank. • Chile aims to be in the group of developed countries • There is no development without energy. * Average for 2005-2015 period. 9
Evolution of Enel Generación Chile’s total installed capacity Enel Generación Chile has more than doubled its capacity in the last 20 years 6,501 6,351 1% 1% 5,611 GasAtacama 781 MW* 1% 44% 4,477 37% 44% 4,035 24% Los Cóndores 28% 150 MW 2,513 13% 62% 55% 55% 76% 72% 87% 1995 2000 2005 2010 2016 Under construction • A well diversified generation matrix incorporating different types of generation technologies (Coal, LNG and NCRE), providing a better position to cope with hydrological risks. • 2% increase in installed capacity through projects under construction. * Capacity added in 2014. 10
Projects under construction To support growth of the country Los Cóndores • Run-of-the-river, hydroelectric power plant. • Located in San Clemente, in Maule region, Chile. • 150 MW of installed capacity. • Estimated generation of 600 GWh/year. • Estimated load factor: 46%. • Total CAPEX of US$ 662 million. • 45% progress. • Total investment of US$ 258 million as of December 2016. 11
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 share in Chile • Transparent and stable regulatory framework in Chile • Solid financials, good cash flow generation and prudent financial management • Conservative commercial policy 12
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: MM US$ 3,095 hydrology risk 13
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: MM US$ 687: • New Capacity: Los Cóndores. • Higher environmental standards. • Maintain higher standard of operational efficiency. Operational excellence in the generation capacity 14
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. 15
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 16
Exhibits 17
Highlights 2016 • Total energy sales rose by 1% in 2016. • Greater thermal generation (+2,065 GWh), compensating poor hydrology. Chilean EBITDA amounted to 879 million dollars in 2016, increasing 15%. • Net income attributable to shareholders rose by 20% to 698 million dollars. • • On October 4, 2016, it was agreed to change the Company’s name to "Enel Generación Chile S.A.”. The new name became effective legally on October 18, 2016. • Enel Generación Chile S.A. sold all its shareholding in GNL Quintero S.A. for Ch$ 132,821 million on September 14, 2016. 18
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