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 position in Chile & Peru THE ASSETS Installed Capacity Market Share 1 3,852 MW 21 % / 7 % 3,282 MW / 570 MW Power-Plants Transmission Lines 24 ~900 km 23 / 1 KEY FINANCIALS Rating EBITDA LTM BBB Total Assets US$ 586 mm US$ 6.8 bn Fitch US$ 535 mm / US$ 51 mm BBB Cash Net Debt / EBITDA US$ 664 mm 1.8 x S&P Note: All figures as of Mar17 1 In terms of generation 4
Company overview Substantial growth over the last 10 years INSTALLED CAPACITY. (MW) 1 NUMBER OF EMPLOYEES. (N ° ) 2 3,852 1,102 2,515 535 2007 2016 2016 2007 Colbún Fenix Colbún Fenix 3,282 570 1,011 91 N ° OF EMPLOYEES 2016 MW OF INSTALLED CAPACITY 2016 5
Overview Colbún Chile: Company Overview 1 TOTAL INSTALLED CAPACITY. (MW) 2 GENERATION LTM. (GWh) Coal 350 Hydro 4,568 Coal 2,542 Hydro 11,246 Diesel 3,282 1,597 568 GWh MW Diesel CCGT 355 767 Gas 3,683 REVENUES FROM CONTRACTED SALES LTM. 3 CONTRACTED ENERGY SALES LTM. (GWh) 4 (US$ million) Unregulated Unregulated 4,495 382 11,038 US$1,022 GWh million Regulated Regulated 6,543 640 Note: All figures as of Mar17 6
Company overview Fenix Power: Most efficient CCGT in Peru 1 2 1 DESCRIPTION. OWNERSHIP. (%) ADIA 36% Colbún CCGT 570 MW 51% Most efficient CCGT Gross installed capacity Sigma in Peru 1 4,4 TWh 13% GE Turbines Expected annual generation 2 gas turbines (190 MW each) + 1 steam turbine 7% (190 MW) 3 ENERGY SALES LTM. (GWh) Market share 2 Spot Market 3 TWh/year 944 Long-term contracts (~80% of capacity) 6.8 years 3,895 PPAs average life GWh NG Supply Sufficient for 100% of the generation for the next 6 years PPAs 2,951 Note: All figures as of Mar17 1 Based on fuel consumption 2 In terms of generation 7 Source: Colbún S.A.
2. MARKET OVERVIEW 8
Market overview Driest hydrological year of the past 6 years 1 COLBÚN ´ S HYDRO GENERATION. (GWh) 3 ACCUMULATED RAINFALLS. (mm) 7,000 Aconcagua (210 MW) Average 2016 2017 Angostura’s Year 6,000 commisioning 103 Armerillo (631 MW) 5,000 Average 2016 2017 Year 4,568 603 4,000 2011 2012 2013 2014 2015 2016 1Q17 Abanico (249 MW) LTM Average 2016 2017 Year 2 SIC HYDRO GENERATION. (GWh) 485 25,000 Angostura (329 MW) Average 2016 2017 Year 22,000 515 Canutillar (172 MW) 19,000 Average 2016 2017 Year 17,732 1,285 16,000 2011 2012 2013 2014 2015 2016 1Q17 LTM 9 Source: Colbún S.A. & CDEC-SIC
Overview Market Overview 1 GENERATION MATRIX LTM. (%) 5% 15% 3% 33% Hydro 2% Coal 12,772 MW Natural Gas 54,118 48,325 46% (SEIN) Diesel GWh 20% GWh Others 46% 30% DEMAND GROWTH. (12 month average %) 2 17,399 MW (SIC) 12% SIC SEIN 10% 8% 6% 5.9% 4% 2% 1.4% 0% Sources: Coordinador Eléctrico Nacional SIC (Chile) & COES (Peru) 10 Note: All figures fas of Mar17
Market overview Marginal costs in Chile and Peru 1 MARGINAL COST IN SIC & SEIN. (US$ / MWh) 250 Mg Cost SIC Mg Cost SEIN 200 150 100 85 50 11 0 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 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 oversupply due to the entrance into operation of relevant hydro projects. Sources: Coordinador Eléctrico Nacional SIC (Chile) & COES (Peru) 11
Market overview Decreasing prices in the last regulated auctions in Chile 160 140 Avg. Awarded Price 120 100 (US$/MWh) 80 60 40 20 0 Year 2013 2014 2015 2016 Energy (TWh) 4.7 12.0 1.2 12.5 Avg. Awarded Price (US$/MWh) 126 108 79 48 Supply starting 2016/2019 2016/2019 2023 2023 Duration (years) 15 15 20 20 12
3. OPERATIONS IN CHILE & PERU 13
Operations in Chile & Peru Balanced commercial position in Chile CONTRACTUAL COMMITTMENTS VS GENERATION. (TWh) TWh 14 50% 0,5 0,2 45% 12 0,3 0,4 40% 0,5 3.0 3.4 2,2 10 35% 4.4 3.2 3.8 3.6 3.7 4.4 4.5 4.5 2.9 30% 2.2 8 2.6 2.4 25% 1.9 2.6 2.5 6 2.5 20% 15% 4 7.2 7.2 6.9 6.7 6.6 6.5 6.5 6.5 10% 5.2 4.9 4.8 4.6 2 5% 0 0% 2012 2013 2014 2015 2016 1Q17 LTM Hydro Coal LNG Diesel Regulated Sales Unregulated Sales EBITDA Mg (%) Source: Colbún S.A. Unregulated Sales, excludes sales to Codelco at Marginal Cost 14
Operations in Chile & Peru High quality clients In Chile 2 AVERAGE MONOMIC PRICE 1 . (US$/MWh) 1 SALES BY TYPE OF CUSTOMER. (%) 150 Long-term energy supply Regulated Customers contracts with Unregulated Customers 130 creditworthy 110 counterparties. 90 Diversified portfolio of customers. Regulated 70 Unregulated 59% 41% 50 2011 2012 2013 2014 2015 2016 3 PPAs IN CHILE. (TWh) 14 Regulated Customers 12.9 12.8 12.7 Unregulated Customers 100 % 12 10.7 HYDRO ENERGY 9.5 10 Contracted until 2023 8.3 8.3 8 6 4 100 % ~10 YEARS AVERAGE MATURITY EFFICIENT THERMO ENERGY 2 Contracted until 2040 0 2017 2018 2019 2020 2021 2022 2023 Note: All figures as of Mar17 15 Source: Colbún S.A. 1 Average monomic prices are calculated by dividing the total amount of sales in US$, by physical energy sales in MWh
Operations in Chile & Peru Contract renewal opportunities in Chile UPCOMING REGULATED AUCTIONS 1 . 1 22.7 TWh 2.2 7.0 9.0 4.5 * TWh TWh TWh TWh 2017 2018 2019 2020 Year Supply starting 2023 2023 2024 2026 Duration (years) 20 20 20 20 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. 1 Latest available information. 16
Operations in Chile & Peru Ensured long-term regasification capacity and LNG supply 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 GWh 3,000 2,500 2,500 2,000 2,000 2,000 2,000 Optional 1,500 1,000 1,000 500 0 2017 2018 2019 2019 - 2030 MEDIUM-TERM LNG SUPPLY: LONG-TERM REGASIFICATION CAPACITY METROGAS AND ENAP AND SUPPLY CONTRACT WITH ENAP 2,500 GWh of regasification capacity GNL supply with Enap and international providers 17
Operations in Chile & Peru Consolidated financial results EBITDA & EBITDA MG. (US$ million & %) 3 DEBT & NET DEBT. (US$ million) 1 EBITDA Chile EBITDA Fenix EBITDA Mg Debt 2,500 45% 45% 50% 2,236 Net Debt 42% 1,894 600 36% 2,000 56 51 40% 1,710 1,700 1,703 1,440 1,500 30% 21% 400 1,174 1,061 1,043 1,061 582 1,000 20% 546 537 536 200 352 10% 500 0 0% 0 2013 2014 2015 2016 1Q17 2013 2014 2015 2016 1Q17 LTM 2 NET INCOME. (US$ million) 4 DEBT/EBITDA & NET DEBT/EBITDA. (x) 200 205 6 Debt/EBITDA 189 200 102 4.8 5 Net Debt/EBITDA Hidro Aysén 4.1 3.8 150 4 3.5 2.9 2.8 3 100 82 2.0 2.0 1.8 63 1.7 2 50 1 0 0 2013 2014 2015 2016 1Q17 2013 2014 2015 2016 1Q17 LTM 18 Source: Colbún S.A.
Operations in Chile & Peru Consolidated debt profile DEBT PROFILE. 1 Variable UF Financial debt: US$1,703 mm Banks 3% 6% 21% US$ 1,346 mm / US$ 363 mm Avrg. Maturity: 4.8 years US$ Avrg. US$ Interest Rate: 4.9% Fixed Bonds 94% 97% 79% AMORTIZATION STRUCTURE. (US$ million) 2 600 532 525 Fenix Loan 500 Colbún's Bonds 348 400 300 200 100 32 33 24 28 25 25 25 25 25 16 4 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 19 Note: All figures as of Mar17 Source: Colbún S.A.
4. GROWTH OPPORTUNITIES 20
Growth opportunities Growth opportunities in Chile & the Region 1 SPECIAL FOCUS IN PERU AND COLOMBIA. Growing electricity consumption Well established regulatory framework Diversification: - Hydrological conditions - Generation technology - Fuel access Guaiquivilo Melado - Regulation ~310 MW Reservoir / Run-of-the-river 34 MW GROWTH OPPORTUNITIES IN CHILE: 2 BASE LOAD CAPACITY AND RENEWABLES. La Mina Run-of-the-river / NCRE Hydro projects (99.2% progress as of Mar17) NCRE under study 170 MW San Pedro Run-of-the-river ~90 MW Los Cuartos Run-of-the-river 21
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