Corporate presentation LV Andean Conference 2018 LPG distribution - - PowerPoint PPT Presentation

LV Andean Conference 2018

Corporate presentation

1

Revenue December ‘17 UDM: USD 780 mm EBITDA December ‘17 UDM: USD 145 mm Net income December ‘17 UDM’: USD 72 mm Empresas Lipigas - EBITDA

% EBITDA, December 2017 UDM

Source: The Company .

#2

• 81,331 tons LPG
• 13.8% market share
• 152,336 tons LPG
• 8.4% del market share
• 466,051 tons LPG
• 36.9% del market share

#4 #3

LPG distribution player

LPG distribution player in the Andean Region, with presence in Chile, Colombia and Peru, three of the most attractive markets in the region

Strong positioning in Chile, Colombia and Peru

December 2017, LTM EBITDA per country

Empresas Lipigas main financial indicators

December 2017 UDM

Total clients as of December ‘17: 2.1 mm

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1959

Codigas is constituted as an LPG distribution company in Santiago

2000:

Group of owner families sells 45% of the shares of the group of companies to

Group of regional LPG distributors Consolidation period in Chile 1950

Lipigas is constituted as an LPG distribution company in Valparaiso

1961

Agrícola O'Higgins, created 1953, begins its supply services in the province of O’Higgins

1977

Agrícola O'Higgins becomes Agrogas

1950

1985

The Yaconi, Santa Cruz, Noguera, Vinagre and Ardizzoni fathousandies conclude the acquisition period of LPG distributors, holding an ownership interest in Lipigas, Codigas, Agrogas and Enagas

2000-2004

The four brands are grouped under Empresas Lipigas S.A., seeking consolidation in terms of service quality, centralized management and operating efficiency

Over 60 years of successful track-record

Source: The Company, website information

3

International expansión Diversification / Consolidation

2015

The Quintero maritime terminal begins operating; thus allowing direct LPG imports

2015

Over 60 years of successful track-record

Source: The Company

2010

Lipigas acquires 70% of Gas País (in 2013 it acquires the remaining 30%)

2016

Empresas Lipigas is listed on stock exchange

2015

First bond issuance: UF 3.5 million (USD 140 million)

2014

LNG ground (truck) distribution begins

2014

Lipigas acquires

2013

Lipigas acquires

2012

Lipigas acquires

2016

Lipigas acquires

2012

Repsol sells its 45% ownership interest to LV Expansión, an investor group.

2017

Lipigas acquires

2015

2017

Small power plant operation begins (6 MW)

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Liquified Petroleum Gas (LPG)

Bottled Bulk

Sales Dec. 2017 LTM 273 thousand ton 54 thousand ton 79 thousand ton 193 thousand ton 27 thousand ton 73 thousand ton Sales Dec. 2017 LTM

• Deregulated tariff1
• Residential and

commercial customers

• Distribution in light

trucks

• Direct distribution /

sub-distribution

• Spot sales
• Deregulated tariff1
• Industrial, commercial and

residential customers

• Distribution in bulk tank trucks
• Direct distribution and through

metered networks (160 thousand clients)

• Spot sales and contract sales

Products and formats distributed by Lipigas

Source: The Company, website information. (1) Colombia has deregulated tariff, with the restriction of a maximum price

58% 42%

Liquefied Natural Gas (LNG) Natural Gas (NG) Compressed Natural Gas (CNG) Liquified Natural Gas (LNG) Natural Gas (NG) Compressed Natural Gas (CNG)

• Deregulated tariff
• 100% industrial customers
• Distribution in bulk trucks
• Direct distribution
• Contract sales
• Regulated, maximum profitability (real 9%
• ver assets)
• Commercial and residential customers
• Distribution through networks

24.2 million m3 19,000 tons LPG equivalent) 1.4 million m3 (1,000 tons GLP equivalent)

• Direct distribution
• Spot sales

Sales Dec. 2017 LTM Sales Dec. 2017 LTM

81.1 million m3 (63,000 tons GLP equivalent)

Sales Dec. 2017 LTM

5

Group composed by the Yaconi, Santa Cruz, Vinagre, Noguera and Ardizzoni families The Controlling Group has over 30 years of experience in the LPG industry

Ownership structure

Controller and founder group

Source: The Company. Santiago stock exchange

At the end of 2016, LV Expansión diluted and sold 20% of the Lipigas property, distributing the remaining 25% to its participants. The Controlling Group acquires part of the shares placed on the Stock Exchange

Stock market

4.000 4.500 5.000 5.500 6.000 6.500 24/11/2016 24/12/2016 23/01/2017 22/02/2017 24/03/2017 23/04/2017 23/05/2017 22/06/2017 22/07/2017 21/08/2017 20/09/2017 20/10/2017 19/11/2017 19/12/2017 18/01/2018 17/02/2018 CLP

Stock price (CLP) 5,779 Market Cap at close (MM CLP) 656,347 Market Cap at close (MM USD) 1,114 P/E (s/ net income LTM 31-12-17) 15.4 EV / EBITDA LTM 31-12-17 8.9 Dividend yield 4.9% February 2018

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2017: Lipigas consolidates direct LPG import in Chile

26% 19% 10% 11% 46% 6% 3% 2% 23% 16% 13% 10% 5% 6% 0% 0% 53% 74% 77% 2014 2015 2016 2017 ENAP GASMAR Argentina Peru Quintero terminal

11% 89% Imported National production (ENAP) ~100% Local production (Ecopetrol, others) ~100% Local production (Camisea, Petroperú,

• thers)

LPG industry supply Lipigas supply

Ecopetrol 81% Others Colombia 16% Imported 3% 2017 Petroperú 22% Camisea 59% Others Peru 3% Bolivia 16% 2017

Deficit Balanced Balanced

Source: The Company, website information.

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Chile 1,200,000 customers Colombia 360,000 customers Peru 580,000 customers

North zone

Strong positioning in the Andean Region

Storage and bottling plants Source: SUI, OSINERMING and Lipigas estimates. (1) Market share based on tons sold accumulated as of December 2017.. (2) Abastible in Peru: only retail sale. Does not contain wholesale sales of the terminal

Presence in Chile, Colombia and Peru

Colombia and Peru present consolidation opportunities

36.9% 37.3% 25.8%

South zone

13.9% 34.9% 19.9% 31.3% 8.4% 25.0% 12.0% 7.0% 47.6%

Other companies (+45 ) Other companies (+60 )

Market Share1 Market Share1 Market Share1

2

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Lipigas Strategic Plan

Growth and diversification in the gas business (NG, LNG, CNG) Multi-Energy Strengthening LPG business

Source: The company

9

Strengthening LPG business

Increase in the relationship with end customers Consolidation of the brand image

Source: The Company

Direct distribution Hall of Fame of major brands of Chile Innovation

14% 16% 17% 22%

2014 2015 2016 2017

DD as % of bottled sales

10

Strengthening LPG business

Source: The Company

Use of digital tools in the relationship with end customers Efficiency in costs and distribution expenses

Business intelligence Facilities and maintenance Distribution centers Lipiapp

11

Strengthening LPG business

Source: The Company.

Optimization of the cost of LPG Safety in operations

Quintero maritime terminal Imports from Argentina OHSAS certification in Chile and Peru ISO certification in the three countries

12

Growth and diversification in the gas business

Natural gas networks (Chile) LNG (Chile)

Source: The Company

Puerto Montt and Osorno Complete offer to customers Leaders in the segment Growth opportunities

13

Growth and diversification in the gas business

Source: The Company

Gas networks (Colombia) CNG (Peru)

Ingasoil purchase in 2017 Consolidation opportunities Industrial Automotive

14

Growth and diversification in the gas business

Source: The Company

Development of new applications Geographic expansion

Motors for irrigation Isolated electric generation

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8.4 25.0 12.0 7.0 47.6

13.9 34.9 19.9 31.3

Colombia

Geographic expansion in Latin America

Consolidation of current markets

Successful acquisitions’ track-record Fragmented markets with consolidation opportunities Target to incorporate new gas companies in

• ther Latin-American countries

Identified opportunities in less consolidated markets Profitability in Latin America in line with Lipigas’ strategy

Expansion to new attractive markets

LPG consumption in Latam 2016

Thousands tons per year

Peru

Consolidation opportunities

Other companies (+45 ) Other companies (+60 )

Source: The Company, WLPGA

16

Multi-Energy

Comprehensive energy solutions for industrial customers Increase in share of energy wallet

Source: The Company

Marquesa – Small power plants Other services to industries Solar Sales / services to residential customers customeras

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Sales volume1

Thousand LPG equivalent tons

Source: The Company Financial figures are converted from CLP to USD at a FX = 600

EBITDA

USD mm

Solid results’ track-record

371 369 390 454 458 535 622 656 759 782 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 GLP Chile ex Backup Backup GN Chile GNL Chile GLP Colombia GLP Peru GN Peru 66 86 80 85 79 93 81 132 129 146 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Chile Colombia Peru

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Net income

USD mm

Capex

USD mm

Source: The Company

Consolidated Net Income and Capex

26 17 26 21 21 36 42 66 31 58 42 5 8 7 6 5 6 3 4 5 8 7 23 4 48 5 47 2 26 17 49 62 30 95 58 77 91 73 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Chile Colombia Peru Acquisitions 40 57 52 44 48 56 40 60 65 71 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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Source: The Company

Net financial debt

Net financial debt/ Equity (Times)

Net financial debt/ EBITDA

Times

Covenant: 1.5x

Net financial expense coverage

EBITDA / Net financial expense (Times)

Financial Debt December-2017

%

Solid financial structure accompanies growth

USD 218 mm

20

Source: The Company

Important note

This document has been prepared by Empresas Lipigas S.A. (the "Issuer" or the "Company") to provide general information about the Company and its subsidiaries. Chile’s Commission for the Financial Market will not rule upon the quality of the information contained herein. The information contained in this document is the exclusive responsibility of the Issuer. The information contained in this document is a brief description of the Issuer, and it is not all the information required to make an investment decision. Further information is available at the Issuer’s web page and at the Chile’s Commission for the Financial Market web page. Before making your investment, you must obtain full information of the Issuer’s financial situation and you must assess the appropriateness of the acquisition of its securities. Public information and records in the possession of the Company have been used in preparing this document. The Company does not undertake responsibility for the accuracy of the projections presented herein, nor for the fact that these will not be reviewed in the future, neither does it undertake any obligation to deliver additional information to that contained in this report, or to update or correct any inaccuracy that it could contain. This document is not intended to contain all the information that may be required to assess the appropriateness to invest in the purchase of securities issued by the Company, and under no circumstance is to be construed as a recommendation to invest in securities issued by the Company, therefore every recipient hereof should perform an independent assessment regarding the advisability of investing in securities issued by the Company. This document does not replace the information contained in the financial statements or other information that the Company has provided to Chile’s Commission for the Financial Market and the public in general in accordance with the law and regulation on securities. Total or partial reproduction of this document is forbidden, without the Issuer’s prior authorization and written consent.

LV Andean Conference 2018

Corporate presentation