Company Presentation 1Q 2015 1 2 AGENDA 1. SIC OVERVIEW 2. - - PowerPoint PPT Presentation

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Company Presentation 1Q 2015 1 2 AGENDA 1. SIC OVERVIEW 2. - - PowerPoint PPT Presentation

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Company Presentation 1Q 2015 1 2 AGENDA 1. SIC OVERVIEW 2. COLBN OVERVIEW A. OPERATIONS B. FINANCIALS C. PROJECTS 2 3 SECTOR SEGMENTATION 3 SUB-SECTORS G ENERATION T RANSMISSION D ISTRIBUTION Regulated sectors (concessions) R

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1

Company Presentation

1Q 2015

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SLIDE 2

2

AGENDA

  • 1. SIC OVERVIEW

2. COLBÚN OVERVIEW A. OPERATIONS B. FINANCIALS C. PROJECTS

2

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Regulated sectors (concessions)

RELEVANT INSTITUTIONS

Ministry of Energy Regulator: CNE Supervisor: SEC Coordinator: CDEC

GENERATION TRANSMISSION DISTRIBUTION SECTOR SEGMENTATION

3 SUB-SECTORS

3

OVERVIEW

OPERATIONS FINANCIALS PROJECTS

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SLIDE 4

Castro

Tal-Tal

Arica Antofagasta

Santiago

Chaitén Cochrane

  • Pto. Natales

Pto. Williams

SING SIC SEA SAM

4,146 MW - 25% 15.881 GWh - 25% 12,690 MW - 75% 46.052 GWh - 74% 52 MW - 0% 146 GWh - 0% 100 MW - 0% 276 GWh - 0%

4 SEPARATE GRIDS

Source: CNE

SING – Northern Grid

  • Predominantly mining activity
  • Mainly thermal capacity
  • ~25% of national installed capacity
  • ~25% of national electricity output

SIC – Central Grid

  • 90% of the country’s population
  • Mostly residential consumption,

but also relevant industrial and some mining activity

  • Large hydro capacity component
  • ~75% of national installed capacity
  • ~75% of national electricity output

GEOGRAPHIC SEGMENTATION

4

OVERVIEW

OPERATIONS FINANCIALS PROJECTS

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GENERATORS

REGULATED CUSTOMERS UN-REGULATED CUSTOMERS SPOT MARKET

DISTRIBUTION COMPANIES “FREE” CUSTOMERS CDEC

Regulated Auction Tariffs Unregulated Auction Tariffs Marginal Cost/ Spot Price

MARKET STRUCTURE

5

OVERVIEW

OPERATIONS FINANCIALS PROJECTS

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50 100 150 200 250 300 5 10 15 20 25 30 35 40 45 50 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 USD/MWh Annual Power Generation – SIC TWh

Others Diesel-Fuel LNG Coal /Petcoke Gas Hydro Average SIC PPA Price Average Spot Market Price

  • Development based on hydro + competitive natural gas
  • Power purchase agreements signed under fixed prices (set by

regulator for distribution clients ) (+) Development based on gas turbine (diesel) (+) LNG re-gasification terminal since 2009 (+) Coal- power plants →New law: PPA tenders with price indexation

Source: CNE; CDEC; www.systep.cl

GENERATION AND PRICE EVOLUTION IN CHILE’S CENTRAL GRID

Diesel 3% Coal 28% Gas 15% Hydro 45% Others 8% 6

OVERVIEW

OPERATIONS FINANCIALS PROJECTS

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7

AGENDA

1. SIC OVERVIEW

  • 2. COLBÚN OVERVIEW

1. OPERATIONS 2. FINANCIALS 3. PROJECTS

7

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8

Main Figures

  • Assets: 6,300
  • Equity: 3,400
  • Mkt Cap: 5,100
  • EBITDA LTM: 510
  • Net Debt: 1,071
  • Intern. Ratings
  • Fitch: BBB
  • S&P: BBB-

Local Ratings

  • Fitch: A+
  • Humphreys: AA-

49% 10% 17% 24%

Ownership

Matte Group Angelini Group Pension Funds Others

OVERVIEW

As of Mar15 (US$ million) 8

OVERVIEW

OPERATIONS FINANCIALS PROJECTS

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9

Our Board

  • 2 out of 9 are independent directors
  • Elected every 3 years (indefinitely reelection)
  • 2 out of 3 independent directors in the Board Committee
  • 2 female members
  • Monthly meetings
  • Two annual meetings with our external auditors
  • No directors in management positions
  • Board and board committee remunerations are approved in the Annual

Shareholders Meeting (no equity options)

  • Code of ethics ruling both workers and directors

HIGH STANDARDS OF CORPORATE GOVERNANCE

9

OVERVIEW

OPERATIONS FINANCIALS PROJECTS

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10

GENERATION ASSETS

Installed capacity of 3,278 MW ~ 21% Market Share / 25% by Generation*

766 MW CCGT – 45%

48% Hydro 1,589 MW 52% Thermal 1,689 MW

581 MW Diesel – 35% 342 MW Coal – 20% 1,057 MW Reservoir – 67%

532 MW Run-of-the-river – 33%

3,278 MW

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OVERVIEW

OPERATIONS FINANCIALS PROJECTS

(*): In 2014

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SLIDE 11

11 39% 61%

Sales by Type of Costumer (%) Unregulated Regulated

Codelco (A/A+) 29% Chilectra (BBB+/BBB+ )* 22% CGED (Local A+) 19% Saesa (Local AA) 16% AngloAmeric an (BBB/BBB+) 9% Others 5%

Sales Volume by Customer (%)

Graphs Sources: 1), 2), 3), 4) Colbun as of Mar15 LTM. 4) Average monomic prices are calculated by dividing the total amount of sales in US$, by physical energy sales in MWh. 50 100 150

Regulated Costumers Unregulated Costumers

Average Monomic Price (US$/MWh)

2.000 4.000 6.000 8.000 10.000 12.000 14.000 2012 2013 2014 1Q15 LTM

Regulated customers Unregulated customers

Historic Sales by Type of Costumer (GWh)

1 2 3 4

HIGH QUALITY CLIENTS

11

OVERVIEW

OPERATIONS FINANCIALS PROJECTS

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12

COMMERCIAL POSITION

6,578 5,566 5,462 5,233 4,857 6,655 6,644

  • 95

1,853 2,616 2,623 2,709 323 1,273 2,418 2,242 3,234 3,011 2,801 2,802 2,563 1,901 2,240 546 546 591

0% 5% 10% 15% 20% 25% 30% 35% 40% 2.000 4.000 6.000 8.000 10.000 12.000 2009 2010 2011 2012 2013 2014 1Q15 LTM GWh

Hydro Coal LNG Diesel Regulated Sales Unregulated Sales EBITDA Mg

Contractual Sales vs. Generation (GWh)

10,935 10,687 11,655 9,639

Graph Source: Colbun. Unregulated Sales 2013 & 2014 excludes sales to Codelco at Marginal Cost

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1

8,831 9,805 10,998

OVERVIEW

OPERATIONS FINANCIALS PROJECTS

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Graphs Sources: Colbún.

2 1 78% 93% 89% 94% 79% 91% 91% 70% 80% 90% 100% 2009 2010 2011 2012 2013 2014 1Q15

Thermal Power Plants

97% 97% 96% 96% 92% 93% 70% 80% 90% 100% 2010 2011 2012 2013 2014 1Q15

Hydro Power Plants

POWER PLANT AVAILABILITY

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OVERVIEW

OPERATIONS FINANCIALS PROJECTS

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AGENDA

1. SIC OVERVIEW

  • 2. COLBÚN OVERVIEW

1. OPERATIONS 2. FINANCIALS 3. PROJECTS

14

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15

Source: Colbún’s Financial Statements 3 4 1 2

15

287 352 537 510 20% 21% 36% 36% 0% 10% 20% 30% 40% 50% 100 200 300 400 500 600 2012 2013 2014 1Q15 LTM

EBITDA (US$ million) & EBITDA Mg (%)

51 63 80 35 50 100 2012 2013 2014 1Q15 LTM

Net Income (US$ million)

MAIN FIGURES AND METRICS

1,406 1,409 1,696 1,503 500 1.000 1.500 2.000 2012 2013 2014 1Q15 LTM

Operating Revenues (US$ million) OVERVIEW OPERATIONS

FINANCIALS

PROJECTS

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100 200 300 400 500 600 2012 2013 2014 1Q15 LTM

Cash Flow (US$ million)

Capex EBITDA

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Source: Colbún’s Financial Statements. (*) Calculated as Liabilities/Equity 3 4 1 2

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MAIN FIGURES AND METRICS

500 1.000 1.500 2.000 2012 2013 2014 1Q15

Debt & Net Debt (US$ million)

Debt Net Debt 5.2 4.1 2.0 2.1 1 2 3 4 5 6 7 2012 2013 2014 1Q15 LTM

Net Debt / EBITDA 16

71 70 90 89 20 40 60 80 100 2012 2013 2014 1Q15

Leverage Ratio* (%) OVERVIEW OPERATIONS

FINANCIALS

PROJECTS

10.9 10.3 7.8 7.6 6.2 2 4 6 8 10 12 2011 2012 2013 2014 1Q15 LTM

Net Interest Coverage

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17

3 200 400 600 800 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

Banks Bonds

2

Amortization Structure (US$ million) Debt Profile

1

BONDS 78% BANKS 22%

USD 90% UF 10%

FIXED 100%

  • Total Debt: MMUS$ 1,888
  • Avrg. Maturity: 6.2 years
  • Avrg. USD Interest Rate: 4.8%
  • Cash: MMUS$ 817
  • Net Debt: MMUS$ 1,071
  • Dividend Policy 30%

(As of Mar15)

  • Avg. MMUS$ 50 for

the next 3 years

Source: Colbún’s Financial Statements

Type Currency Interest Rate

DEBT AND LIQUIDITY

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  • Avg. Maturity:

6.2 years

OVERVIEW OPERATIONS

FINANCIALS

PROJECTS

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18

AGENDA

1. SIC OVERVIEW

  • 2. COLBÚN OVERVIEW

1. OPERATIONS 2. FINANCIALS 3. PROJECTS

18

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19

La Mina – Hydroelectric Project

  • 34 MW of Capacity
  • 191 GWh of expected annual generation
  • Phase: Under Construction since Dec14
  • Qualifies as NCRE

Santa María II – Coal-fired Project

  • 350 MW of Capacity
  • 2,500 GWh of expected annual generation
  • Phase: Environmentally Approved

San Pedro - Hydroelectric Project

  • ~170 MW of Capacity
  • 950 GWh of expected annual generation
  • Phase: Submit EIA on 2015

COLBÚN HAS SEVERAL GROWTH OPPORTUNITIES

Projects in Chile

OVERVIEW OPERATIONS FINANCIALS

PROJECTS

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Location Main Features

  • Location: San Clemente, Maule

region

  • Capacity: 34 MW
  • Annual Generation: ~ 180-195 GWh
  • CAPEX including the Tx. line:

~US$120-130 million

  • Construction + commissioning

period: ~25-30 months

  • Status: Under construction since

Dec14 and on schedule

  • Qualifies as NCRE

LA MINA HYDROELECTRIC RUN-OF-THE-RIVER

20 OVERVIEW OPERATIONS FINANCIALS

PROJECTS

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1 2

Location Main Features

  • Location: Coronel, Biobío region
  • Capacity: 350 MW
  • Annual Generation: ~2,500 GWh
  • Construction period: ~43-45 months
  • 2014 Main Events:
  • RCA/RSE commitments

compliance

  • Stakeholders socialization
  • EPC contract review

Coronel Concepción Santa María II

SANTA MARIA II COAL-FIRED POWER PLANT

21 OVERVIEW OPERATIONS FINANCIALS

PROJECTS

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1 2

Location Main Features

  • Location: Panguipulli and Los Lagos,

Los Ríos region

  • Capacity: ~170 MW
  • Annual Generation: ~900-950 GWh
  • Construction period: ~40-45 months
  • 2014 Main Events:
  • Socialization process
  • Submit EIA on 2015

Valdivia Panguipulli San Pedro

SAN PEDRO HYDROELECTRIC POWER PLANT

22 OVERVIEW OPERATIONS FINANCIALS

PROJECTS

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SEARCHING FOR INVESTMENT OPPORTUNITIES IN THE REGION

 Diversification:

  • Hydrological Conditions
  • Generation Technology
  • Fuel Access
  • Regulatory Risks

Special Focus on Colombia and Peru  Growing Electricity Consumption  Well established regulatory framework

23 OVERVIEW OPERATIONS FINANCIALS

PROJECTS

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  • Country: Operates in Chile, the highest-rated country in the region (Aa3/AA/A+)
  • Size: Second-largest generation company in Chile’s largest electricity grid
  • Competitive: High-quality, diversified asset portfolio and flexible commercial policy.
  • Stable: Diversified, solid and creditworthy customer portfolio
  • Shareholders: Strong, reliable controlling group with a strategic and long-term vision for the business
  • Management: Experienced management and high standards of corporate governance
  • Projects: Strong pipeline of new projects with improving efficiency and diversification of generation sources
  • Liquidity: Conservative financial strategy that emphasizes keeping a strong liquidity position

KEY INVESTMENT HIGHLIGHTS

24

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25 This document provides information about Colbún S.A. In no case this document constitutes a comprehensive analysis of the financial, production and sales situation of the company. To evaluate whether to purchase or sell securities of the company, the investor must conduct its own independent analysis. This presentation may contain forward-looking statements concerning Colbun's future performance and should be considered as good faith estimates by Colbún S.A. In compliance with the applicable rules, Colbún S.A. publishes on its Web Site (www.Colbún.cl) and sends the financial statements of the Company and its corresponding notes to the Superintendencia de Valores y Seguros, those documents should be read as a complement to this presentation.