Enersis Value Growth Chile, March/2016
Disclaimer This presentation contains statements that could constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this announcement and include statements regarding the intent, belief or current expectations of Enersis Américas and its management with respect to, among other things: (1) Enersis Américas ’ business plans; (2) Enersis Américas ’ cost-reduction plans; (3) trends affecting Enersis Américas ’ financial condition or results of operations, including market trends in the electricity sector in Chile or elsewhere; (4) supervision and regulation of the electricity sector in Chile or elsewhere; and (5) the future effect of any changes in the laws and regulations applicable to Enersis or its subsidiaries. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of various factors. These factors include a decline in the equity capital markets of the United States or Chile, an increase in the market rates of interest in the United States or elsewhere, adverse decisions by government regulators in Chile or elsewhere and other factors described in Enersis Américas ’ Annual Report on Form 20-F. Readers are cautioned not to place undue reliance on those forward-looking statements, which state only as of their dates. Enersis Américas undertakes no obligation to release publicly the result of any revisions to these forward-looking statements. 2
Enersis investment highlights • Largest private power platform in Latin America • Unique and well diversified portfolio of assets • Markets with stable regulatory environment • Prudent commercial policies • Proven track record in operating utilities • Outstanding financial performance 3
Enersis investment highlights Ownership profile CHILEAN PENSION FUNDS 11.77% 9.71% ADR HOLDERS 60.62% 15.81% OTHER INST. SHAREHOLDERS 2.09% OTHER SHAREHOLDERS 4 Data as of February 29, 2016
Enersis investment highlights Enersis is Latin America ´ s largest private power company #2 Colombia 3,459 MW Brazil 19% Market Share Gx 987 MW 2.9 million clients 1% Market Share Gx Sales Dx 13,946 GWh 6.8 million clients 24% Market Share Dx Sales Dx 22,776 GWh #1 Peru 6% Market Share Dx 1,983 MW 2,100 MW transmission lines 23% Market Share Gx 1.3 million clients Sales Dx 7,624 GWh Argentina #2 30.0% Market Share Dx 4,522 MW #1 Chile 12% Market Share Gx 6,352 MW 2.5 million clients 35% Market Share Gx Sales Dx 18,492 GWh 1.8 million clients 20% Market Share Dx Sales Dx 15,893 GWh 44% Market Share Dx Total Distribution Total Generation Installed capacity: 17,302 MW Clients: 15.2 million Energy sales: 78.731 GWh Energy sales: 72,039 GWh 5 Source: Company filings and presentations, as of December 31, 2015
Enersis investment highlights Unique portfolio of assets in the region Overview Distribution Generation 6.8 Clients 15.2 million Installed Capacity 17,302 MW 9,247 7,096 2.9 2.5 1.8 1.3 872 Hydro Oil-Gas Coal Coal Oil-Gas Hydro • Enersis distributes energy in South America’s largest cities • 53.4% of Enersis’ installed capacity is hydro, which represents the lowest production cost 6
Enersis investment highlights Outstanding indicators Distribution Generation thousand new clients per year installed MW as of December 31, 2015 ~1.7 millon new clients 17,302 492 449 492 359 8,765 7,700 5,222 3,848 3,032 Enersis Tractebel CEMIG Aesgener Colbún Isagen 2012 2013 2014 2015 Enersis is the private company with highest installed capacity in the region In the past 4 years we added a “ Chilectra sized” amount of new clients 7
Enersis investment highlights Well diversified by country and type of activity Overview (2015) Generation – energy sales Distribution – energy sales Peru Peru 10% 14% 22% Argentina Argentina 23% 18% Colombia Colombia 23% 10% Brazil 20% 29% 31% Brazil Total: 72,039 Total: GWh Chile 78,731 GWh Chile EBITDA 1 Argentina Peru 8.9% Distribution 15.3% Brazil 41% 15.7% 44% 59% 56% Generation 30.8% 29.3% Colombia Total: MUS$ 3,497 Chile 8 Source: Company filings; Note: 1 Assumes average FX rate of 654.66 CLP/USD
Enersis investment highlights • Largest private power platform in Latin America • Unique and well diversified portfolio of assets • Markets with stable regulatory environment • Prudent commercial policies • Proven track record in operating utilities • Outstanding financial performance 9
Enersis investment highlights Despite a complex global macro environment, Latin America offers large opportunities for growth 4.7 4.2 2.2 Growth in electricity 1.2 0.7 demand as of FY 2015 Chile Brazil Colombia Peru Argentina vs. FY 2014 2015 2016 2017 4.0 3.7 3.7 3.3 3.1 2.9 3.0 2.5 2.3 2.4 2.0 2.0 2.1 1.8 1.7 1.7 1.2 0.6 Expected real GDP 0.1 growth 1 (%) 3.1 3.7 Chile Brazil Colombia Peru Argentina North Western America Europe S&P Rating Peru Colombia Brazil Argentina Chile CDS 2 A- BBB+ SD BB AA 267.92 453.3 117.47 185.48 N.A. 10 1 Latin American Consensus Forecast as of February, 2016 2 Credit Default swaps as of March 01, 2016
Enersis investment highlights High growth prospects • Energy demand growth is very stable in the countries where we operate, showing a growth average of 3.5% in 2014. • Compared to developed countries, Enersis is in a very good position for growth Source: CIA World Factbook and internal data, as of 2014 11
Enersis investment highlights High growth prospects Source: CIA World Factbook and internal data, as of 2014 12
Enersis investment highlights Generation’s regulatory framework encourages stability and creates incentives that guarantees expansion Brazil CHARACTERISTICS Chile Colombia Peru Auctions for 15, 20 and 30 Long term auctions for the Auctions for 15, 20 Auctions for 15, 20 Open contracts and 30 years years and 30 years regulated market facilitate expansion • Income based on • Income based on Income based • Energy auctions for at contributions during peak contributions during peak on contributions least 20 years demand demand Payment based on capacity during peak • Recognition of dual • Recognition of dual • Recognition of dual independent of technology demand generation for gas generation for gas generation for gas turbines turbines turbines Frequency of recalculation of Calculated Calculated every Calculated every regulated guaranteed pass through Calculated monthly monthly 3 – 12 months 3 – 12 months to the end customer Markets with audited or auctioned Spot market with Spot market with auctioned Spot market with audited Spot market with audited costs costs costs costs audited costs 13
Enersis investment highlights A sound commercial policy reduces profit volatility Energy contracts with established prices (TWh) Target’s 72% 69% 66% 60% 48% achievement 49.2 48.0 Argentina 45.7 41.1 13.1 Colombia 13.1 12.3 33.8 9.4 4.2 8.9 Peru 8.9 8.8 9.7 9.6 5.1 4.3 Brazil 4.1 3.1 3.0 22.0 21.8 20.5 Chile 19.0 17.0 2016 2017 2018 2019 2020 Currently, Enersis has contracted 72% of its commercial target for 2016 14
Enersis investment highlights Distribution regulatory framework is stable and encourages investment Brazil Characteristics Chile Colombia Peru Indefinite Indefinite LONG-TERM CONCESSIONS Indefinite • 30 years 1st set: 1997 1st set: 1984 1st set: 1997 • 1st set: 2003 # of revisions: 4 STABLE REGULATORY #of revisions: 7 # of revisions: 3 # of revisions: 4 FRAMEWORKS * • 11.4% - 12.3% Calculated in 13.9% Calculated in each ATTRACTIVE PROFITABILITY 10.0% Defined by law 12.0% Defined by law revision each revision METRICS (PRE-TAX, REAL TERMS) New replacement • New replacement New replacement New replacement TARIFFS ARE SET USING value based on value based on real value based on • value based on real TECHNICAL AND optimized network • network optimized network network OBJECTIVE CRITERIA • Chamber of commerce settles disputes among agents THERE ARE • Regulator settles disputes • Regulator is the designated •“Expert Panel” solves • Foundation Getulio Vargas is in CONFLICT RESOLUTION among agents authority to resolve conflicts disputes between the charge of arbitration MECHANISMS IN PLACE TO SETTLE • Regulator imposes and impose sanctions • Regulator settles disputes regulator and agents DISPUTES EFFECTIVELY when necessary sanctions: SSPD + CREG among regulated clients and imposes sanctions * Depends on tariff Cycle 3rd and 4th respectively. 15
Enersis investment highlights Periodic tariff revision processes 2016 2017 2018 2019 2020 Chilectra 2 Edelnor Codensa 1 Coelce Ampla 1. 2014 process is still pending Visibility of cash flows 2. Expected for November 2016 16
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