1Q-2020 EARNINGS CALL
MAY 7, 2020
EARNINGS CALL MAY 7, 2020 DISCLAIMER This presentation is not an - - PowerPoint PPT Presentation
1Q-2020 EARNINGS CALL MAY 7, 2020 DISCLAIMER This presentation is not an offer for sale of securities. This material has been prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or
MAY 7, 2020
DISCLAIMER
buy or sell any securities and should not be treated as giving investment advice nor as an estimation that the scenarios or assumptions will occur. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information, assumptions or examples that may be contained herein. Any
information contained herein. The information contained herein is meant only and example of a potential scenario that is based on assumptions that may or may not occur, and does not purport to be complete and is subject to qualifications and assumptions, and neither the Company nor any agent can give any representations as to the accuracy
use of all or any part of this material.
future events and trends that may affect the Company’s business but that are not . Investors are cautioned that any such forward looking statements are not guarantees of future
Regarding the impact of COVID-19, the information used for preparing this presentation is solely based on what is publicly available as of March 31, 2020 and the company cannot make any representation with respect to the real impacts as they are unforeseeable. The successful execution and commencement of operation of the investment projects that we are developing or constructing depends on numerous external factors, including (i) delays in obtaining regulatory approvals, including environmental permits; (ii) court rulings against governmental approvals already granted, such as environmental permits; (iii) shortages or increases in the price of equipment reflected through change
international political, environmental and ethnic groups; (vi) strikes; (vii) adverse changes in the political and regulatory environment in Chile or other countries from which our
unforeseen or catastrophic or exceptional events.
may result in a violation of applicable laws in Chile or in other jurisdiction.
accounting advisers to the extent that you deem it necessary, and make your own investment, hedging and trading decision based upon your own judgment and advice from such advisers as you deem necessary and not upon any view expressed in this material.
Shares of our common stock are traded on the Bolsa de Comercio de Santiago—Bolsa de Valores, or the Santiago Stock Exchange, and the Bolsa Electrónica de Chile—Bolsa de Valores, or Electronic Stock Exchange, which we jointly refer to as the “Chilean Stock Exchanges,” under the symbol “AESGENER.” Accordingly, we are currently required to file quarterly and annual reports in Spanish and issue hechos esenciales o relevantes (notices of essential or material events) to the CMF, and provide copies of such reports and notices to the Chilean Stock Exchanges. All such reports are available at www.cmfchile.cl and www.aesgener.com.
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AES GENER 1Q-2020 EARNINGS CALL
AGENDA
May 7, 2020
3
COVID-19 UPDATE STRATEGY EXECUTION UPDATE FINANCIAL REVIEW 1Q-2020 GROWTH PROJECTS STATUS UPDATE KEY TAKEAWAYS Q&A
3
CARBON INTENSITY REDUCTION
5
SAFETY
OF OUR PEOPLE
RELIABLE
ENERGY SUPPLY WORK ALL
TOGETHER
COVID-19 UPDATE
AES GENER
GUIDING PRINCIPLES
6
100%
High Risk personnel (>60-years)
WORKING REMOTELY
100%
Non-Operational personnel
WORKING REMOTELY
53%
ON SITE AES GENER PEOPLE
COVID-19 case
AES Gener personnel 12
COVID-19 cases
Contractors
COVID-19 UPDATE
OUR PEOPLE
SAFETY IS ALWAYS FIRST
7
100%
OPERATING NORMALLY
+30 days
ASSURED
66%
Of our Operations Personnel WORKING ON SITE
COVID-19 UPDATE
OUR OPERATIONS
CONTINUE PROVIDING RELIABLE ENERGY
8
ALTO MAIPO
4,518 WORKERS ON SITE
Contingency Plan ready in case
WIND
PROJECTS
Progress at Los Olmos and Mesamávida moderately impacted
SOLAR
PROJECT
Andes Solar II nearly complete with limited impact
COVID-19 UPDATE
OUR PROJECTS
LIMITED IMPACTS
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$378mn
CASH & CASH EQUIVALENT
60%
$250mn
UNDRAWN COMMITTED FACILITIES
40%
COVID-19 UPDATE
OUR LIQUIDITY
STRONG TO OVERCOME DISRUPTIONS
As of March 31, 2020
CHILE
96% INVESTMENT GRADE Markets
COLOMBIA
INVESTMENT GRADE PROFILE Customers A+/A1 BBB-/Baa2
Vulnerable Household Relief¹
Local CPI Indexation
S/Ca
REVENUE
BY MARKET
76% 20%
4%
Chile
Argentina
EBITDA IMPACT Regulatory Changes
COVID-19 UPDATE
OUR MARKETS
COUNTRY AND COUNTERPARTY RISK
(1) Based on latest version of bill
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Chile
Colombia
Argentina
COVID-19 UPDATE
OUR CONTRACTS
DEMAND RISK
Chile 100% 24% Colombia 80% 2% Argentina 60% 3% HIGHLY CONTRACTED Business with Robust Take or Pay PPAs
89% CONTRACTED
LIMITED Volume Risk EBITDA SENSITIVITY 10% Demand Decline per month
Contract Level Contract Sales exposed to Volume risk¹
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April Demand Δ YoY² (1) 2019 Contract sales volume exposed to demand risk / total sales volume (2) Preliminary April 2020 systemwide figures
REVENUE
BY SOURCE
COVID-19 UPDATE
OUR CURRENCIES
FX RISK REVENUE
BY CURRENCY
79% DOLLAR DENOMINATED
Chile +$0.5mn Colombia
Argentina
CASH FLOW SENSITIVITY 10% Devaluation per month
FIXED Costs
LOCAL CURRENCIES HELP TO OFFSET DEVALUATION FULLY DOLLARIZED Revenues in Chile ACTIVE HEDGE STRATEGY in Colombia
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COVID-19 UPDATE
OUR DISCRETIONARY COSTS
HELPING MITIGATE POTENTIAL COVID-19 IMPACTS
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NON-ESSENTIAL COST MANAGEMENT
Accelerated Digital Transformation Flexible & Remote Work Virtual Collaborative Networks
COVID-19 UPDATE
OUR TRANSFORMATION
ACCELERATED DUE TO CORONAVIRUS
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STRATEGY EXECUTION UPDATE
GREENTEGRA
ULTIMATE OBJECTIVES
GREEN OUR CUSTOMERS REDUCE CARBON INTENSITY STRENGTHEN INVESTMENT GRADE
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PROTECT EXISTING VALUE ENABLE GREEN GROWTH
Delink existing PPAs from coal physical assets New long-term renewable PPAs to support green capacity expansion
STRATEGY EXECUTION UPDATE
RENEWABLE TRANSFORMATION
ENABLED BY OUR BUSINESS SOLUTIONS
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ALLOW FOR EARLIER COAL PHASE OUT
Coal plants merchant providing reliability to the system
STRATEGY EXECUTION UPDATE
RENEWABLE TRANSFORMATION
TOWARDS A SUSTAINABLE LEADING COMPANY
GW
TWh/y
bn
WIND SOLAR HYDRO CHILE COLOMBIA CHILE COLOMBIA
54% 74% 90% 21% 26% 10% 25%
GREEN CONTRACTS RENEWABLE CAPACITY¹ INCREMENTAL EBITDA¹
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Capacity to be added by 2024 and Incremental EBITDA generated in 2024
STRATEGY EXECUTION UPDATE
GREENING OUR CUSTOMERS
SUSTAINABLE EBITDA
2017
2024
Greentegra
Offsets Legacy Contract Roll-off
RENEWABLE LT AUCTION
33%
66%
RENEWABLES NON RENEWABLES
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STRATEGY EXECUTION UPDATE
REDUCING CARBON INTENSITY
SUSTAINABLE PORTFOLIO
RENEWABLES
2017
2024
CO2 Intensity
+152%
Renewable Capacity 24%
51%
NON RENEWABLES
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STRATEGY EXECUTION UPDATE
STRENGTHEN INVESTMENT GRADE
SUSTAINABLE LEVERAGE
NON-RECOURSE DEBT RECOURSE DEBT
2017
2024 69%
Renewable
EBITDA
Debt
Amortization
64%
36% 31%
Net Debt / EBITDA
21
STRATEGY EXECUTION UPDATE
RENEWABLE TRANSFORMATION
SUPPORTED BY OUR SHAREHOLDERS
CAPITAL INCREASE
APPROVED
66.7% 16.2% 17.1%
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STRATEGY EXECUTION UPDATE
VIRTUAL RESERVOIR
STORING ENERGY
BATTERY SYSTEM FIRST PROJECT IN THE WORLD INTEGRATED WITH ALFALFAL I RUN-OF- RIVER HYDRO
23
STRATEGY EXECUTION UPDATE
ANDES SOLAR II
COMBINING BEST LOCATION AND TECHNOLOGY
NET CAPACITY FACTOR
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THE WORLD’S MOST EFFICIENT
IN OPERATION
STRATEGY EXECUTION UPDATE
SMART CENTER
ACCELERATING DIGITALIZATION
CUTTING EDGE TECHNOLOGY TO BETTER SERVE OUR MARKETS INNOVATION HUBS TO DELIVER VALUE TO OUR CUSTOMERS
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REMOTE CONTROL CENTER FOR OPERATIONS
FIRST QUARTER
CONSOLIDATED
FINANCIALS
Key Financials (US$ mn) 1Q-2020 1Q-2019
EBITDA 162 208
NET INCOME 76 63 21%
EBITDA Margin 30% 33%
EBITDA BY MARKET Chile Colombia Argentina
91% 71% 1% 21% 8% 8%
1Q-2020 1Q-2019
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1 43 2
208 162
1Q-2019 Chile Colombia Argentina 1Q-2020
FIRST QUARTER
EBITDA
BRIDGE BY MARKET
(US$mn)
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1Q-2019 Contract Demand Los Cururos Others 1Q-2020
MARKET PERFORMANCE
CHILE
EBITDA VARIATION & MAIN DRIVERS
(US$mn)
2 1 2
148 147
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1Q-2019 Chivor Life Extension Contract Margin FX & Others 1Q-2020
MARKET PERFORMANCE
COLOMBIA
EBITDA VARIATION & MAIN DRIVERS
(US$mn)
1 1
44 1
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EXTENSION
USEFUL LIFE
+50 year
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1Q-2019 Energía Base Tariff Energía Plus Margin Availability & Others 1Q-2020
MARKET PERFORMANCE
ARGENTINA
EBITDA VARIATION & MAIN DRIVERS
(US$mn)
16 14
1 1 2
31
46 23 12 3 10 11
63 76
1Q-2019 1Q-2020
FIRST QUARTER 2020
NET INCOME
ATTRIBUTABLE TO THE PARENT
EBITDA Variance Interest Expense FX Variance Equity Earnings Income Tax Other
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(US$mn)
68 150 127 8
341 378
Dec-19 Operating Investing Financing FX Impact Mar-20
FIRST QUARTER 2020
CASH FLOW
ACTIVITIES
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(US$mn)
146 39 22 27 31 136 19 1,042 100 105 114 147 133 151 160 1,802
246 144 136 174 164 287 179 2,844
AES GENER
DEBT PROFILE
NO SIGNFICANT MATURITIES IN THE SHORT TERM
$4.2bn
AVERAGE COST AVERAGE LIFE NET DEBT ¹/ EBITDA RATE
6.1%
Years
22
Years
4.2x
(Consolidated)
91%
Fixed Rate
Recourse Debt
$1,463mn
35% Amortization Schedule (US$mn)
1.5x
(Recourse Debt)
Non-Recourse Debt
$2,711mn
65%
2020 2021 2022 2025 2023 2024 2026 2027/2079
(1) Includes Hybrid Debt $500mn Equity Credit
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35
AES GENER
DIVIDEND DISTRIBUTIONS
APPROVED AT THE ANNUAL SHAREHOLDER’S MEETING
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To be paid on May 15, 2020 To be paid in 2020
DIVIDEND
APPROVED
$35mn $81mn
Hydro Wind Solar Batteries
531 MW 10 MW 44 MW 73 MW 2,789 MW 240 MW 760 MW
UNDER CONSTRUCTION
763MW
READY TO BUILD
253MW
UNDER DEVELOPMENT
3,789MW
178 MW 180 MW
IN OPERATION SINCE GREENTEGRA
167MW
57 MW 110 MW
GROWTH PROJECT STATUS UPDATE
4,972 MW RENEWABLE PIPELINE
TO SUPPORT COMMERCIAL AGREEMENTS
PIPELINE
37 37
531MW
COD 2021
88%
PROJECT COMPLETED
93%
Las Lajas & Alfalfal II
COMPLETED
Las Lajas
267MW
Alfalfal II
264MW
+
GROWTH PROJECT STATUS UPDATE
ALTO MAIPO
RUN-OF-RIVER HYDRO
38 38
Project Status as of 03/5/2020
TO BEGIN GENERATING
1 2
GROWTH PROJECT STATUS UPDATE
ALTO MAIPO
RUN-OF-RIVER HYDRO - EXCAVATION PROGRESS
Las Lajas & Alfalfal II Systems 61km Volcan System 14km
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5.3km
FOR MORE WATER
Project Status as of 05/5/2020
10MW 5HOURS
INSTALLED CAPACITY
COD
MAY
2020
COMPLETE
PROJECT
UNDER
FINAL COMMISSIONING
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INNOVATIVE USE OF BATTERY & HYDRO TECHNOLOGY
GROWTH PROJECT STATUS UPDATE
VIRTUAL RESERVOIR
ENERGY STORAGE
GROWTH PROJECT STATUS UPDATE
ANDES II
SOLAR
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80MW
INSTALLED CAPACITY
BIFACIAL PANELS, CLIMATE CONDITIONS AND GRID PROXIMITY ENHANCE CAPACITY FACTOR
COD
MAY
2020
COMPLETE
PROJECT 36MW
ALREADY IN OPERATION
ALL EQUIPMENT
ALREADY ONSITE
Project Status as of 03/5/2020
EPC CONTRACT
EXECUTED WITH NORDEX
178MW
INSTALLED CAPACITY
ATTRACTIVE CAPACITY FACTOR WITH RECORD LEVEL HUB HEIGHT FOR CHILE WIND FARMS
BEGINNING
CONSTRUCTION
PROJECTS
42
GROWTH PROJECT STATUS UPDATE
LOS OLMOS & MESAMAVIDA
WIND
COD
MID-2021 INCLUDING POTENTIAL DELAY DUE TO COVID-19
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1Q-2020
KEY TAKEAWAYS
EARNINGS CALL
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GREENTEGRA
Advancing in the execution
Strategy
COVID-19
While not immune, our Business and Strategy are resilient
OUR PURPOSE
Our Mission & Values are guiding our actions and decisions
MAY 7, 2020
AES GENER
LEVERAGE PROFILE
AS OF MARCH 31, 2019
1,000 1,000 552 875 1,284
4,174 1,463
Non-Recourse Debt
Consolidated Debt Angamos Cochrane Alto Maipo Recourse Debt
794
136 156
504 4.8x
3.8x 5.1x
2.5x 4.2x 1.5x
LTM 1Q-20 EBITDA Net Debt/ EBITDA
Hybrid Debt
Net Debt¹/ EBITDA (1) Includes Hybrid Debt $500mn Equity Credit
46
GROWTH PROJECT STATUS UPDATE
2.1GW GROWTH CAPACITY
COD TIMELINE
Alto Maipo
531MW
Los Olmos
110MW
Mesamávida
67MW
Chile Wind I
250MW
Casa Eléctrica
187MW
Los Cururos
110MW
Virtual Reservoir
10MW
Campo Lindo
73MW
Chile Wind II
40MW
Apotolorru
77MW
Castilla
21MW
Andes Solar IIa
80MW
Andes Solar IIb
180MW
Andes Solar IV
170MW
Chile Wind III
216MW
2019 2020 2021 2022 2023 131 90 961 460 480 550 810 970 630 140
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MW CAPEX
FLEXIBILITY TO DEFER $100 -140mn