AGUAS ANDINAS Results Meeting November 30 2018 AGENDA Financial - - PowerPoint PPT Presentation

Results Meeting

November 30 2018

AGUAS ANDINAS

AGENDA

Financial Performance Investments Tariffs Contingencies Q&A

FINANCIAL PERFORMANCE

FINANCIAL PERFORMANCE AS OF SEPTEMBER 30 2018

Numbers in Millions of Pesos

248.532 273.746 282.624 291.513 298.604 218.347 227.589 30% 34% 38% 42% 46% 50% 54% 58% 62% 100.000 200.000 300.000 400.000 2013 2014 2015 2016 2017 sept-17 sept-18

EBITDA & EBITDA Margin

EBITDA EBITDA Margin 403.879 440.734 473.397 492.003 509.541 374.644 390.691 100.000 200.000 300.000 400.000 500.000 600.000 2013 2014 2015 2016 2017 sept-17 sept-18

Revenues

116.676 119.422 129.008 135.343 139.620 101.430 101.566 0% 5% 10% 15% 20% 25% 30% 35% 20.000 40.000 60.000 80.000 100.000 120.000 140.000 160.000 2013 2014 2015 2016 2017 sept-17 sept-18

Net Income and Net Income Margin

Recurring Net Income Non-Recurring Net Income Net Income Margin

The Company’s revenues increased to CLP$391 billion due to: Increased sales volumes, registering an increase of 4.1% in Potable Water and 3.7% in Sewage Treatment. Tariff indexations registered during 2017 and 2018 (+1.47% on november 29th of 2018).

REVENUES INCREASED BY 4.3%

2.249.314 2.195.996 2.303.852 2.250.716

Potable Water Sewerage

Clients

sept-18 sept-17 148 158 177 189 11 8 38 36

50 100 150 200 250 300 350 400 450

sept-17 sept-18

Revenues (Billion CLP$)

Potable Water Sewage Treatment Ohter Regulated Revenues Non-Regulated Revenues

COSTS INCREASED BY 4.4%

Raw Materials and Consumables Used increased due to: An increase in electricity costs for CLP $1.6 billion, due to more consumption associated with sales volume. Higher costs of CLP $2.6 billon for the purchasing of raw water in order to face the melting period (October – April). Personnel Expenses increased due to: Increased remunerations and bonuses associated to increases in CPI, in addition to an increased workforce and extraordinary benefits for personnel due to the collective negotiation process for CLP $3.1 billion. Other Expenses, By Nature decreased due to: Lower sludge management costs in the Biofactories for CLP $383 million. Lower allocation for doubtful accounts for CLP$2.3 billion. Offset by higher activity in network maintenance of CLP $720 million. . Higher costs in new service activity, customer management and property value for CLP 1,238 million.

25.104 29.441 sept-17 sept-18

Raw Materials and Consumables Used (BN CLP$)

+17.3 % 40.516 43.573 sept-17 sept-18

Personnel Expenses (BN CLP$)

+7.5% 90.676 90.088 sept-17 sept-18

Other Expenses, By Nature (BN CLP$)

• 0.6%

OTHER HIGHLIGHTED RESULTS

Texto Texto Texto Texto

GREEN AND SOCIAL BOND CHILE DAY 2018

We put sustainability at the heart of the company's business model. The melting of the glaciers and the drought motivated us to be the first green issuers of the country.

BANK DEBT RENEGOTIATION

We have refinanced CLP $ 65 of bank debt, doubling the duration from 3.1 to 5.8 years.

$- $5 $10 $15 $20 $25 $30 $35 $40

2019 2020 2021 2022 2023 2024 2025

Billion Pesos

Debt Maturity Profile as of March 31 2018

Maturity Profile as of September 30, 2018

$- $5 $10 $15 $20 $25 $30 $35

2019 2020 2021 2022 2023 2024 2025

Billion Pesos

Debt Maturity Profile as of September 30 2018

Maturity Profile as of September 30, 2018

DEBT STRUCTURE AS OF SEPTEMBER 30, 2018

• Leverage: 1.66x Limit: 1.98
• Financial Expense Coverage: 7.16x
• Local Credit Rating: AA+
• Total Net Financial Debt: CLP$ 939

billion

• Net Debt/EBITDA Ratio: 3,05x

Bank Loans 10% Bonds 71% Promissory Notes 19%

DEBT BREAK DOWN BY INSTRUMENT

Variable 10% Fixed 90%

DEBT BREAK DOWN BY INTEREST TYPE

$- $10 $20 $30 $40 $50 $60 $70 $80 $90

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043

Billion Pesos

Promissory Notes Bonds Bank Loans

INVESTMENTS

PROGRESS IN INCREASED AUTONOMY WORKS

2018

9

Reserve tanks with 54 milllion liters

• f capacity.

Wells to extract underground water.

$24

Million USD invested.

11

HOURS OF AUTONOMY for emergencies

16

2019

6

mega reserve tanks in Pirque. milllion liters

• f capacity.

$121

Million USD invested.

34

HOURS OF AUTONOMY for emergencies

with 1,500 Stage 1 Progress: 53.6%

Construction Civil Works, Supply of Equipment, Assembly and Commissioning, Elevation and Emptying Works– Reserve Tanks

TEXTO TARIFFS

TIMELINE

01 OCT 2019 Tariff studies exchanged between company and SISS 2013-18 info provided for tariff study Final parameters and methodology published SISS rules on

• bservations
• n preliminary

parameters 15 MAR 2019 10 MAY 2019 01 NOV 2019 Company presents discrepancies /

• bservations

16 NOV 2019 Expert committee called by SISS 28 NOV 2020 SISS requests minutes from expert committee to make final ruling 30 JAN 2020 SISS establishes new tariffs 28 FEB 2020 18 MAY 2020 29 JUN 2020 New Tariff Settlement AA AM AC 25 MAR 2019 Administrative appeal over the SISS decision on the parameters Final Parameters 10 APR 2019 30 NOV 2018 Publication of parameters and methodology List of ‘middle candidate’ for Expert Committee is determined Observations

• n preliminary

parameters made 30 JAN 2018

TEXTO AWARDS

Sixth place in Corporate Sustainability Index 2018 of ActionAbility Institute and Revista Capital. National award Avonni Innovation 2018, in the Energy category because of the biogas plant. Natural gas plant of Biofactores Gran Santiago receive the national award of Innovation Recyclapolis.

AWARDS 2018

Avonni Recyclapolis

Our company exhibit a great result in the Dow Jones Sustainability Index (DJSI), report that evaluate the sustainability performance of thousands stock exchange listing companies. This year we

• btained the sixth place in the sanitary industry category.

Our company was recognized with the Momentum for Climate Change 2018, given by the United Nations Organization.

AWARDS 2018

Momentum for Climate Change

Q&A Session

Results Meeting

November 30 2018

AGUAS ANDINAS

Annexes

PROJECT OF LAW 10.795-33

In December 2016, the Chamber of Deputies approved the Project of Law Bulletin Nº 10795-33 which intends to modify the legislation which applies to public sanitation services in regards to: non-regulated services, the tariff-setting process and the fulfillment of development plans by service providers. This initiative has been submitted to the Senate in its second legislative instance and is currently in the Commission of Public Works. Sessions of the Commission of Public Works:

January 4th 2017 Commission of Public Works requests constitutionality report from the Secretary General

• f the President (Segpres)

March 1st 2017 Commission of Public Works requests formal report from the Ministry of Public Works (MOP) stating its opinión on the Project of Law May 3rd 2017 Comission of Public Works receives the reports from the MOP and Segpres May 2018 The Comission of Public Works requests a formal report from the new Minister of Public Works June 13th 2018 MOP proposes Technical Committee to discuss the Project of Law August 2018 Discussion in Progress

APPEAL SUBMITTED TO THE CONSTITUTIONAL COURT

On May 28, 2018, Aguas Andinas filed an application for unconstitutionality with the Constitutional Court, requesting that certain provisions of Law No. 19,496 be declared inapplicable in a judicial proceeding initiated by SERNAC against Aguas Andinas, a through a class- action lawsuit. This collective action is related to the potable water cuts that occurred in the city of Santiago during the months of February and April 2017, as a result of events of force majeure associated with the extreme turbidity observed in the waters of the Maipo river, which supply the potable water plants of the company. In the above-mentioned civil process -currently in progress-, Sernac requests that hefty fines be imposed on Aguas Andinas for each one of the affected consumers, a possibility that upon understanding this company is unconstitutional, since the eventual sanction would be totally disproportionate. In addition, the sectoral authority (the SISS) has already become aware of this situation, which could cause the company to be sanctioned twice for the same facts, a matter that does not comply with the constitution. This violates the principle "non bis in idem" which means that no

• ne can be tried or double convicted for the same act.

This appeal was accepted by the Constitutional Court on August 3rd.

RAIN WATER SITUATION

Legislation Reality Rain Water Management Mixed Water Management Sewage Management Sanitation Services General Law DFL N°382 Chilean Sewage Elevation Plant Norm (2472 Of 2000) Rain Water Law N°19.525 SISS Instructions: Use of by pass

• Ord. 3104/2011
• Ord. 4208/2010

Separate Networks Sewage Water Sewerage and Sewage Water 80% to 95% of potable water consumption

31,2 32,3 33,1 33,7 53,8 57,1 58,0 57,6 2012 2013 2014 2015 millones de m3

X y XIV Región

Facturación AP Volúmen Tratado

Sewage treatment plants receive more tan 1.7 times the volumen consumed by clients. Rain water is a challenge for ESSAL, our water utility in the south of Chile.

Potable Water Billing Treated Volume