CORPORATE PRESENTATION November 2017 AGUAS ANDINAS Chiles largest - PowerPoint PPT Presentation

CORPORATE PRESENTATION November 2017

AGUAS ANDINAS Chile’s largest water utilitiy 100% coverage in potable 2,238,137 clients 50% of the industry’s One of the lowest tariffs in company water and sewage Representing 43% of the potable water billing Chile and in OECD nations treatment industry’s clients Combined Potable Water and Sewage Tariffs for the Main Cities of OECD Countries 9 Comparison in AUD/m 3 based on a comsumption of 15 m 3 per month 8 7 6 5 4 3 2 1 0 Copenhagen, Denmark Berlin, Germany Washington D.C., USA Luxemboug, Luxembourg Oslo, Norway Zurich, Switzerland Amsterdam, Netherlands Sydney, Australia Vienna, Austria Brussels, Belgium Helsinki, Finland Paris, France London, United Kingdom Prague, Czech Republic Reykjavik, Iceland Auckland, New Zealand Warsaw, Poland Ottawa, Canada Istambul, Turkey Bratislava, Slovakia Stockholm, Sweden Tallinn, Estonia Budapest, Hungary Jerusalem, Israel Tokyo, Japan Ljubljana, Slovenia Lisbon, Portugal Madrid, Spain Riga, Latvia Rome, Italy Dublin, Irland Athens, Greece Santiago, Chile Mexico City, Mexico Seoul, South Korea Note: In the cases of Australia, New Zealand and Switzerland, the cities considered are Sydney, Auckland and Zurich respectively. Source: Global Water Intelligence Water Tariff Survey 2016, Suez

CORPORATE STRUCTURE Chilean Pension Chilean Pension Funds CORFO 0,0% Funds 5,0% Others 2,3% 11,9% Stock Brokers 100% 7,6% Stock Brokers 12,6% AGUAS Others IAM’S 7,6% ANDINAS’ SHAREHOLDER IAM SHAREHOLDER STRUCTURE 50,1% Suez IAGSA STRUCTURE 56.6% 31/10/2017 56,6% 31/10/2017 International International 50.1% Shareholders Shareholders 19,0% 27,4% 100% 100% 53.5% 100% 100% 100% 100% REGULATED COMPANIES NON-REGULATED COMPANIES Aguas Andinas 3

CONCESSION AREAS R.M. / Santiago Aguas Andinas, Aguas Cordillera, Aguas Manquehue Los Ríos / Valdivia X Región de Los Lagos Aguas Décima y XIV Región de Los Ríos / Pto.Montt Essal Aguas Andinas 4

COUNTRY COMMITMENT VISION To be a leading company in sustainability in Chile ensuring water for future generations. PURPOSE We manage resources efficiently, creating shared value. STRATEGY Santiago Merece Un 7 (Santiago deserves 100 points). The future is built starting today.

STRATEGY TO ACCOMPLISH OUR COMMITMENT 1. BUSINESS MODEL 2. RESILIENCE 3. DIGITALIZATION 4. CIRCULAR ECONOMY 5. SOCIAL LEGITIMACY 6. INNOVATION AND PEOPLE 7. WATER AND QUALITY OF LIFE

CHALLENGES Aguas Andinas’ goal ins to achieve zero • Transform its sewage treatment plants into emissions biofactories • Reuse 100% of residues and transform them into energy for their production. • Drastically reduce its carbon foot print and that of the country. • Aguas Andinas and its subsidiaries are contributing to the country, through 12 of the 17 Sustainable Development Goals. • The SDGs were suscribed to by the Chilean Government as a guide in sustainable development matters.

AGUAS ANDINAS CONTRIBUTES TO 12 OF THE 17 SDGS MAIN SDG INITIATIVES UNDERWAY SDG MAIN SDG INITIATIVES UNDERWAY SDG Compliance Deputy Management 16 AVANZA Program 8-10 Incorporating women into the Board 5-11 Good Neighbor Program 11 SOCIAL Comprehensive Supplier Management 8 Awareness Campaigns 6 LEGITIMACY Approval of Anti-Corruption Policy 16 Educational Programs 4-6 Approval of Sponsorships, Donations, Amiga Account 1-6 BUSINESS and 16 Integrated Talent Management 8 MODEL Academic Collaboration Policy Water School 4-6-8 Strengthening of the Compliance Certification under NCH 3262 5 5 5-8-10 Channel Measuring Organizational Climate + INNOVATION 8 Sensibilization of workers in GPTW AND PEOPLE Sustainable Development 4 Ten Commandments of Good Conduct 8 and Circular Economy Health and Safety Management System 3 Climate Change Srategy 5-8-10 Cetaqua 9 Hydraulic Efficiency Plan 6-11 WaterLab 9 Energy Efficiency Plan 7-13 APR Management 6 RESILIENCE Safety Equipment 1-6 WATER AND Compliance with Rural Potable 6 Study of the Age of Pipes 1-6 Water Quality (APR) QUALITY OF Simulations for Events 1-6 LIFE ESSAL Biodiversity Initiatives 15 Strategic Customer Plan 6 City Gas 7 Virtual Office 9-11 Electronic Billing 9-11 DIGITALIZATION Client Data Warehouse 9-11 AMR Solutions + Telelearning 9-11 SCT Mobile + Work Parts 9-11 Cogeneration Projects 7 Thermal Hydrolysis 7 CIRCULAR Emissions Monitoring 13 ECONOMY Sludge Assessment 7-12 Waste Baseline 11 Aguas Andinas 8

REGULATORY FRAMEWORK

CHILEAN WATER UTILITY INDUSTRY XV y I Región / Iquique Aguas Del Altiplano II Región / Antofagasta Aguas De Antofagasta III Región / Copiapó Aguas De Chañar IV Región / La Serena Aguas Del Valle V Región / Valparaíso Two Concession Esval R.M. / Santiago Aguas Andinas, Aguas Cordillera, VI Región / Rancagua Models 1998 96% Aguas Manquehue Essel VII Región / Talca Aguas Nuevo Sur VIII Región / Concepción The privatization Indefinite Concessions of clients are supplied by IX Región / Temuco Essbio Aguas Araucanía process starts private providers Los Ríos / Valdivia X Región de Los Lagos y XIV Región 30 Year Aguas Décima de Los Ríos / Pto.Montt Essal Concessions Xi Región / Coyhaique Aguas Patagonia Xii Región / Pta.Arenas Aguas Magallanes 10 Aguas Andinas

HIGHLY REGULATED INDUSTRY Model Company Aguas Andinas • Technical regulatory framework defined by law Greenfield operation Existing infrastructure • Superintendence of Sanitation Services (SISS) acts as the regulator counterpart in the tariff setting process, which lasts for 1 year approximately Combination of new and Latest technology • Tariffs are reset every five years, based on an unbiased and technical model: existing technologies • Based on the long term total cost of a model company • Discrepancies are solved by an independent experts committee • Minimum real return on assets of 7% after taxes Cost efficiency Real costs • Automatic interim adjustments linked to polynomials based on CPI and WPI indexes • Government subsidies for low-income clients 100% coverage in all services Real coverage • The regulatory framework of the Chilean water industry has been fundamental to the development of the sector Self-financing of investments Self-financing of investments through tariffs through tariffs Ability to use debt to finance Minimum Capex and enhance return on Return on Assets equity 11 Aguas Andinas

TARIFF PROCESS TIMELINE List of ‘middle Final candidate’ for parameters Expert and Committee is methodology determined published SISS requests Tariff studies Expert minutes from SISS rules on Final Publication of exchanged committee SISS expert observations New Tariff Observations Administrative 2013-18 info Company Parameters parameters and between called by establishes committee to on preliminary Settlement on preliminary appeal over the provided presents methodology company SISS new tariffs make final parameters parameters SISS decision on for tariff study discrepancies / and SISS ruling made the parameters observations 21 MAR 2019 30 OCT 2018 30 DEC2018 13 FEB 2019 26 FEB 2019 12 MAR 2019 01 OCT 2019 31 OCT 2019 17 NOV 2019 07 JAN 2020 30 JAN 2020 28 FEB 2020 13 MAY 2019 30 days 16 days 46 days 30 days *Dates based on Aguas Andinas’ previous tariff process 12 Aguas Andinas

STAGES OF THE TARIFF NEGOTIATION PROCESS SISS PROPOSAL Publication of the Tariff Setting Process Parameters and Methodology Aguas Andinas provides information about the Real Company to the SISS SISS analyses the Aguas Andinas analyses the Model Company Model Company Aguas Andinas highlights discrepancies Negotiation Agreement? No Yes Expert Committee Committee Decision Tariff Decree 13 Aguas Andinas

REGULATORY RISK: 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 4 th 2017 Commission of Public Works requests constitutionality report from the May 3 rd 2017 Comission of Public Works receives the Secretary General of the President (Segpres) reports from the MOP and Segpres March 1 st 2017 November 2017 Commission of Public Works requests No updates formal report from the Ministry of Public Works (MOP) stating its opinión on the Project of Law 14 Aguas Andinas