COMPANY PRESENTATION MAY 2017 AGENDA 1. Company overview 2. - - PowerPoint PPT Presentation

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COMPANY PRESENTATION MAY 2017 AGENDA 1. Company overview 2. - - PowerPoint PPT Presentation

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BofAML EMERGING MARKETS CORPORATE CREDIT CONFERENCE COMPANY PRESENTATION MAY 2017 AGENDA 1. Company overview 2. Market overview 3. Operations in Chile & Peru 4. Growth opportunities 2 1. COMPANY OVERVIEW 3 Company overview Leading

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BofAML EMERGING MARKETS CORPORATE CREDIT CONFERENCE

COMPANY PRESENTATION

MAY 2017

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SLIDE 2

2

AGENDA

  • 1. Company overview
  • 2. Market overview
  • 3. Operations in Chile & Peru
  • 4. Growth opportunities
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SLIDE 3

3

COMPANY OVERVIEW

1.

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Company overview Leading position in Chile & Peru

Power-Plants

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23 / 1

Transmission Lines

~900 km

Cash US$664 mm Total Assets US$6.8 bn Rating

BBB

Fitch EBITDA LTM US$586 mm

US$535 mm / US$51 mm

Net Debt / EBITDA

1.8 x

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THE ASSETS KEY FINANCIALS

Market Share1

21% /

7%

Installed Capacity

3,852 MW

3,282 MW / 570 MW

Note: All figures as of Mar17

1 In terms of generation

BBB

S&P

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Company overview Substantial growth over the last 10 years

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NUMBER OF EMPLOYEES. (N°) 2016 2007

2,515

Colbún Fenix 2016 2007 INSTALLED CAPACITY. (MW)

1,011 91

N° OF EMPLOYEES 2016

3,282 570

MW OF INSTALLED CAPACITY 2016 1 2

1,102 3,852 535

Colbún Fenix

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Overview Colbún Chile: Company Overview

Hydro 4,568 Gas 3,683 Diesel 355 Coal 2,542 Regulated 640 Unregulated 382 Hydro 1,597 CCGT 767 Diesel 568 Coal 350

1 TOTAL INSTALLED CAPACITY. (MW)

3,282 MW

2 GENERATION LTM. (GWh)

11,246 GWh

Regulated 6,543 Unregulated 4,495

11,038 GWh

3 CONTRACTED ENERGY SALES LTM. (GWh) 4 REVENUES FROM CONTRACTED SALES LTM. (US$ million)

US$1,022 million

Note: All figures as of Mar17

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PPAs 2,951 Spot Market 944 Colbún 51% ADIA 36% Sigma 13%

Company overview Fenix Power: Most efficient CCGT in Peru 1

2 ENERGY SALES LTM. (GWh) 3

3,895 GWh

1 DESCRIPTION.

Source: Colbún S.A. Note: All figures as of Mar17

1 Based on fuel consumption 2 In terms of generation

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CCGT Most efficient CCGT in Peru1 570 MW Gross installed capacity 4,4 TWh Expected annual generation

GE Turbines 2 gas turbines (190 MW each) + 1 steam turbine (190 MW)

3 TWh/year Long-term contracts (~80% of capacity) 7% Market share 2 6.8 years PPAs average life NG Supply Sufficient for 100% of the generation for the next 6 years

  • OWNERSHIP. (%)
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8

MARKET OVERVIEW

2.

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4,568

4,000 5,000 6,000 7,000 2011 2012 2013 2014 2015 2016 1Q17 LTM

Market overview Driest hydrological year of the past 6 years

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COLBÚN´S HYDRO GENERATION. (GWh) 17,732

16,000 19,000 22,000 25,000 2011 2012 2013 2014 2015 2016 1Q17 LTM

SIC HYDRO GENERATION. (GWh)

Source: Colbún S.A. & CDEC-SIC

Angostura’s commisioning

1 2 3 ACCUMULATED RAINFALLS. (mm) Aconcagua (210 MW)

Average Year 2016 2017 103

Armerillo (631 MW)

Average Year 2016 2017 603

Abanico (249 MW)

Average Year 2016 2017 485

Canutillar (172 MW)

Average Year 2016 2017 1,285

Angostura (329 MW)

Average Year 2016 2017 515

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33% 30% 20% 2% 15% Hydro Coal Natural Gas Diesel Others

54,118 GWh

Overview Market Overview

12,772 MW (SEIN)

2 DEMAND GROWTH. (12 month average %)

1.4% 5.9% 0% 2% 4% 6% 8% 10% 12% SIC SEIN

1 GENERATION MATRIX LTM. (%)

Sources: Coordinador Eléctrico Nacional SIC (Chile) & COES (Peru) Note: All figures fas of Mar17

17,399 MW (SIC)

10

46% 46% 3% 5%

48,325 GWh

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Market overview Marginal costs in Chile and Peru

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Sources: Coordinador Eléctrico Nacional SIC (Chile) & COES (Peru)

  • Marginal costs in the SIC have fallen in the last years, mainly due to the entrance of

NCRE, the drop in commodity prices and to the sluggish demand.

MARGINAL COST IN SIC & SEIN. (US$ / MWh) 1

  • Marginal costs in Peru are lower than in Chile, mainly due to the low cost of natural gas.
  • However, marginal costs have been particularly low over the past years because of an
  • versupply due to the entrance into operation of relevant hydro projects.

85 11 50 100 150 200 250 Mg Cost SIC Mg Cost SEIN

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20 40 60 80 100 120 140 160

  • Avg. Awarded Price

(US$/MWh)

Market overview Decreasing prices in the last regulated auctions in Chile

Year 2013 2014 2015 2016

Energy (TWh) 4.7 12.0 1.2 12.5

  • Avg. Awarded Price (US$/MWh)

126 108 79 48 Supply starting 2016/2019 2016/2019 2023 2023 Duration (years) 15 15 20 20

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OPERATIONS IN CHILE & PERU

3.

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Operations in Chile & Peru Balanced commercial position in Chile

5.2 4.9 6.7 6.5 4.8 4.6 1.9 2.6 2.6 2.4 2.5 2.5 2.2 3.2 3.0 3.4 3.6 3.7 6.9 7.2 7.2 6.6 6.5 6.5 2,2 2.9 0,5 4.4 0,5 3.8 0,2 4.4 0,3 4.5 0,4 4.5

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 2 4 6 8 10 12 14 2012 2013 2014 2015 2016 1Q17 LTM

TWh

Hydro Coal LNG Diesel Regulated Sales Unregulated Sales EBITDA Mg (%)

Source: Colbún S.A. Unregulated Sales, excludes sales to Codelco at Marginal Cost

CONTRACTUAL COMMITTMENTS VS GENERATION. (TWh)

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Operations in Chile & Peru High quality clients In Chile

Regulated 59% Unregulated 41%

1 SALES BY TYPE OF CUSTOMER. (%)

50 70 90 110 130 150 2011 2012 2013 2014 2015 2016 Regulated Customers Unregulated Customers

2 AVERAGE MONOMIC PRICE 1. (US$/MWh)

Note: All figures as of Mar17

1 Average monomic prices are calculated by dividing the total amount of sales in US$, by physical energy sales in MWh

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Source: Colbún S.A.

  • Long-term energy supply

contracts with creditworthy counterparties.

  • Diversified portfolio of

customers.

12.9 12.8 12.7 10.7 9.5 8.3 8.3 2 4 6 8 10 12 14 2017 2018 2019 2020 2021 2022 2023 Regulated Customers Unregulated Customers

3 PPAs IN CHILE. (TWh) Contracted until 2023

100%

HYDRO ENERGY Contracted until 2040 EFFICIENT THERMO ENERGY

100%

~10 YEARS AVERAGE MATURITY

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22.7 TWh

2017 2018 2019 2020

Operations in Chile & Peru Contract renewal opportunities in Chile

2023 2023 2024 2026 20 20 20 20

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1 UPCOMING REGULATED AUCTIONS 1. 2 UNREGULATED CLIENTS.

  • In the coming years there is a relevant amount of energy for large unregulated clients to be re-contracted.
  • Opportunities in medium-size clients: In the last months, Colbún has signed new contracts with medium-size

clients for a total of ~500 GWh/year. The prices and volumes offered reflect the current market conditions and the cost structure of the Company. Supply starting Duration (years) Year

*

2.2 TWh 7.0 TWh 9.0 TWh 4.5 TWh

1 Latest available information.

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Operations in Chile & Peru Ensured long-term regasification capacity and LNG supply

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Long-term strategy: leveraging our efficient natural gas power facilities and diversifying our supply sources; contributing to provide competitive, flexible, secure and sustainable power supply

  • 2,500 GWh of regasification capacity
  • GNL supply with Enap and

international providers 2,000 2,000 2,000 2,500

500 1,000 1,500 2,000 2,500 3,000 2017 2018 2019 2019 - 2030

GWh MEDIUM-TERM LNG SUPPLY: METROGAS AND ENAP

Optional

LONG-TERM REGASIFICATION CAPACITY AND SUPPLY CONTRACT WITH ENAP 1,000

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Operations in Chile & Peru Consolidated financial results

1 EBITDA & EBITDA MG. (US$ million & %) 3

1,700 1,894 2,236 1,710 1,703 1,440 1,061 1,174 1,043 1,061 500 1,000 1,500 2,000 2,500 2013 2014 2015 2016 1Q17 Debt Net Debt

DEBT & NET DEBT. (US$ million)

63 82 200 205 189 102 50 100 150 200 2013 2014 2015 2016 1Q17 LTM Hidro Aysén

2 NET INCOME. (US$ million)

4.8 3.5 3.8 2.8 2.9 4.1 2.0 2.0 1.7 1.8 1 2 3 4 5 6 2013 2014 2015 2016 1Q17 Debt/EBITDA Net Debt/EBITDA

4 DEBT/EBITDA & NET DEBT/EBITDA. (x)

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Source: Colbún S.A.

352 537 582 546 536 56 51

21% 36% 45% 45% 42% 0% 10% 20% 30% 40% 50% 200 400 600 2013 2014 2015 2016 1Q17 LTM

EBITDA Chile EBITDA Fenix EBITDA Mg

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  • Financial debt: US$1,703 mm

US$ 1,346 mm / US$ 363 mm

  • Avrg. Maturity: 4.8 years
  • Avrg. US$ Interest Rate: 4.9%

US$ 94% UF 6%

Fixed 97% Variable 3%

Operations in Chile & Peru Consolidated debt profile

Source: Colbún S.A.

1 DEBT PROFILE. 2 AMORTIZATION STRUCTURE. (US$ million)

Banks 21% Bonds 79%

Note: All figures as of Mar17

348 24 28 32 532 33 25 25 525 25 25 25 16 4 100 200 300 400 500 600 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Fenix Loan Colbún's Bonds

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GROWTH OPPORTUNITIES

4.

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Growth opportunities Growth opportunities in Chile & the Region

34 MW

La Mina

Run-of-the-river / NCRE (99.2% progress as of Mar17) 170 MW

San Pedro

Run-of-the-river SPECIAL FOCUS IN PERU AND COLOMBIA.

  • Growing electricity consumption
  • Well established regulatory framework
  • Diversification:
  • Hydrological conditions
  • Generation technology
  • Fuel access
  • Regulation

1 GROWTH OPPORTUNITIES IN CHILE: BASE LOAD CAPACITY AND RENEWABLES.

  • Hydro projects
  • NCRE under study

2

21

~310 MW

Guaiquivilo Melado

Reservoir / Run-of-the-river ~90 MW

Los Cuartos

Run-of-the-river

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Disclaimer And contact information

  • 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 Colbún'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.colbun.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.

INVESTOR RELATIONS

TEAM CONTACT Miguel Alarcón

malarcon@colbun.cl + 56 2 2460 4394

Verónica Pubill

vpubill@colbun.cl + 56 2 2460 4308

Soledad Errázuriz

serrazuriz@colbun.cl + 56 2 2460 4450

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Appendix Solar energy transactions

1 SUNEDISON’S ASSETS AQUISITION 15-YEAR CONTRACT WITH SUNPOWER

  • 15-year PPA to Total with its affiliate SunPower,

starting 2021

  • 500 GWh/year
  • Linked to the construction of a 164 MW solar

power plant 2

  • Long-term energy supply contracts with

regulated customers:

  • 350 GWh/year
  • 15 years, starting 2017
  • Two photovoltaic solar parks in the SIC:
  • Olmué: 145 MW (Environmentally approved)
  • Santa Sofía: 57 MW (Environmental approval

in process)

  • Long-term supply contract by which SunEdison

will build a solar plant of 100 MW:

  • 200 GWh/year
  • 15 years, starting 2021

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Appendix More than 50% of the total energy was awarded to new projects in the last bid process in Chile

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Supplier Technology GWh Awarded 1 % Awarded Leveled Price B-1 B-2A B-2B B-2C B-3 Total (USD/MWh) Mainstream Wind 2,640 49 73 38 260 3,060 27% 41.0 WPD Wind 247 227 161 80 715 6% 50.5 Cabo Leones Wind 321 355 265 941 8% 50.5 Endesa Portfolio 5,380 5,380 48% 50.7 Acciona Wind 460 460 4% 54.9 Others

  • 160

255 9 320 744 7% 41.1 Total

  • 2,800

618 909 473 6,500 11,300 100% 47.6

1 Doesn’t include the variable block, which amounts 1.13 TWh

The auction was divided into 3 blocks:

  • 1. Block 1: full day
  • 2. Block 2:
  • Block 2.A.: 23:00 hrs – 7:59 hrs
  • Block 2.B.: 8:00 hrs – 17:59 hrs
  • Block 2.C.: 18:00 hrs – 22:59 hrs
  • 3. Block 3: full day
  • More than 50% of the total awarded energy proceed from new projects of intermittent

energies.

  • Particular conditions of 2016’s bid process:
  • 6 years until supply begins.
  • Low performance bonds and fines.
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Appendix Colbún Chile: 1Q17 company overview

Hydro 1,089 Gas 1,301 Diesel 43 Coal 736 Regulated 174 Unregulated 90 Hydro 1,597 CCGT 767 Diesel 568 Coal 350

1 TOTAL INSTALLED CAPACITY. (MW)

3,282 MW

2 GENERATION LTM. (GWh)

3,169 GWh

Regulated 1,655 Unregulated 1,100

2,755 GWh

3 CONTRACTED ENERGY SALES. (GWh) 4 REVENUES FROM CONTRACTED SALES. (US$ million)

US$264 million

Note: All figures as of Mar17

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