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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


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SLIDE 1

1Q-2020 EARNINGS CALL

MAY 7, 2020

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SLIDE 2

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 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

  • pinions expressed in this material are subject to change without notice and neither the Company nor any other person is under obligation to update or keep current the

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

  • thereof. The Company and its respective affiliates, agents, directors, partners and employees accept no liability whatsoever for any loss or damage of any kind arising out of the

use of all or any part of this material.

  • This presentation may contain statements that are forward-looking subject to risk and uncertainties and factors, which are based on current expectations and projections about

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

  • performance. Several factors may adversely affect the estimates and assumptions on which these forward-looking statements are based, many of which are beyond our control.

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

  • rders, materials or labor; (iv) the failure of contractors to complete or commission the facilities or auxiliary facilities by the agreed-upon date; (v) opposition by local and/or

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

  • perations or projects obtain supplies; (viii) adverse weather conditions (ix) poor geological conditions; and (x) natural disasters, sanitary conditions, accidents or other

unforeseen or catastrophic or exceptional events.

  • This presentation may not be reproduced in any manner whatsoever. Any reproduction of this document in whole or in part is unauthorized. Failure to comply with this directive

may result in a violation of applicable laws in Chile or in other jurisdiction.

  • The information contained herein should not be relied upon by any person. Furthermore, you should consult with own legal, regulatory, tax, business, investment, financial and

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.

  • The Company is an issuer in Chile of securities registered with the Comisión para el Mercado Financiero, the Chilean Superintendency of Securities and Insurance, or “CMF.”

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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SLIDE 3

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

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SLIDE 4

COVID-19 UPDATE

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SLIDE 5

CARBON INTENSITY REDUCTION

5

SAFETY

OF OUR PEOPLE

RELIABLE

ENERGY SUPPLY WORK ALL

TOGETHER

COVID-19 UPDATE

AES GENER

GUIDING PRINCIPLES

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SLIDE 6

6

1,319

100%

High Risk personnel (>60-years)

WORKING REMOTELY

100%

Non-Operational personnel

WORKING REMOTELY

53%

  • f AES Gener personnel

ON SITE AES GENER PEOPLE

1

COVID-19 case

AES Gener personnel 12

COVID-19 cases

Contractors

COVID-19 UPDATE

OUR PEOPLE

SAFETY IS ALWAYS FIRST

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SLIDE 7

7

100%

  • f Our Plants

OPERATING NORMALLY

+30 days

  • f Fuel Supply

ASSURED

66%

Of our Operations Personnel WORKING ON SITE

COVID-19 UPDATE

OUR OPERATIONS

CONTINUE PROVIDING RELIABLE ENERGY

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SLIDE 8

8

ALTO MAIPO

4,518 WORKERS ON SITE

Contingency Plan ready in case

  • f full lockdown

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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SLIDE 9

9

$628 million

$378mn

CASH & CASH EQUIVALENT

60%

$250mn

UNDRAWN COMMITTED FACILITIES

40%

COVID-19 UPDATE

OUR LIQUIDITY

STRONG TO OVERCOME DISRUPTIONS

As of March 31, 2020

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SLIDE 10

89%

CHILE

96% INVESTMENT GRADE Markets

42%

COLOMBIA

INVESTMENT GRADE PROFILE Customers A+/A1 BBB-/Baa2

Vulnerable Household Relief¹

Local CPI Indexation

S/Ca

REVENUE

BY MARKET

76% 20%

4%

Chile

  • $1.5mn/year

Argentina

  • $0.5mn/month

EBITDA IMPACT Regulatory Changes

COVID-19 UPDATE

OUR MARKETS

COUNTRY AND COUNTERPARTY RISK

(1) Based on latest version of bill

10

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SLIDE 11

Chile

  • $1.5mn
  • 0.24%

Colombia

  • $2.5mn
  • 10.5%

Argentina

  • $0.3mn
  • 10.9%

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

11

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

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SLIDE 12

COVID-19 UPDATE

OUR CURRENCIES

FX RISK REVENUE

BY CURRENCY

79% DOLLAR DENOMINATED

Chile +$0.5mn Colombia

  • $0.3mn

Argentina

  • $0.01mn

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

12

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SLIDE 13

COVID-19 UPDATE

OUR DISCRETIONARY COSTS

HELPING MITIGATE POTENTIAL COVID-19 IMPACTS

13

$11-14mn

NON-ESSENTIAL COST MANAGEMENT

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SLIDE 14

Accelerated Digital Transformation Flexible & Remote Work Virtual Collaborative Networks

COVID-19 UPDATE

OUR TRANSFORMATION

ACCELERATED DUE TO CORONAVIRUS

14

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SLIDE 15

STRATEGY EXECUTION UPDATE

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SLIDE 16

STRATEGY EXECUTION UPDATE

GREENTEGRA

ULTIMATE OBJECTIVES

Transform AES Gener into a LEADING RENEWABLE BUSINESS in South America

GREEN OUR CUSTOMERS REDUCE CARBON INTENSITY STRENGTHEN INVESTMENT GRADE

16

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SLIDE 17

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

17

ALLOW FOR EARLIER COAL PHASE OUT

Coal plants merchant providing reliability to the system

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SLIDE 18

STRATEGY EXECUTION UPDATE

RENEWABLE TRANSFORMATION

TOWARDS A SUSTAINABLE LEADING COMPANY

2.1

GW

8.9

TWh/y

0.4

bn

WIND SOLAR HYDRO CHILE COLOMBIA CHILE COLOMBIA

54% 74% 90% 21% 26% 10% 25%

GREEN CONTRACTS RENEWABLE CAPACITY¹ INCREMENTAL EBITDA¹

18

Capacity to be added by 2024 and Incremental EBITDA generated in 2024

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SLIDE 19

STRATEGY EXECUTION UPDATE

GREENING OUR CUSTOMERS

SUSTAINABLE EBITDA

0.8bn

2017

1.0bn

2024

Greentegra

Offsets Legacy Contract Roll-off

RENEWABLE LT AUCTION

33%

66%

RENEWABLES NON RENEWABLES

19

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SLIDE 20

STRATEGY EXECUTION UPDATE

REDUCING CARBON INTENSITY

SUSTAINABLE PORTFOLIO

RENEWABLES

5.8GW

2017

6.9GW

2024

  • 27%

CO2 Intensity

+152%

Renewable Capacity 24%

51%

NON RENEWABLES

20

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SLIDE 21

STRATEGY EXECUTION UPDATE

STRENGTHEN INVESTMENT GRADE

SUSTAINABLE LEVERAGE

NON-RECOURSE DEBT RECOURSE DEBT

4.1X

2017

3.4X

2024 69%

Renewable

EBITDA

Debt

Amortization

64%

36% 31%

Net Debt / EBITDA

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SLIDE 22

STRATEGY EXECUTION UPDATE

RENEWABLE TRANSFORMATION

SUPPORTED BY OUR SHAREHOLDERS

500mn

CAPITAL INCREASE

APPROVED

66.7% 16.2% 17.1%

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SLIDE 23

STRATEGY EXECUTION UPDATE

VIRTUAL RESERVOIR

STORING ENERGY

10MW x 5hr

BATTERY SYSTEM FIRST PROJECT IN THE WORLD INTEGRATED WITH ALFALFAL I RUN-OF- RIVER HYDRO

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SLIDE 24

STRATEGY EXECUTION UPDATE

ANDES SOLAR II

COMBINING BEST LOCATION AND TECHNOLOGY

37%

NET CAPACITY FACTOR

24

THE WORLD’S MOST EFFICIENT

36MW

IN OPERATION

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SLIDE 25

STRATEGY EXECUTION UPDATE

SMART CENTER

ACCELERATING DIGITALIZATION

CUTTING EDGE TECHNOLOGY TO BETTER SERVE OUR MARKETS INNOVATION HUBS TO DELIVER VALUE TO OUR CUSTOMERS

25

REMOTE CONTROL CENTER FOR OPERATIONS

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SLIDE 26

FINANCIAL REVIEW 1Q-2020

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SLIDE 27

FIRST QUARTER

CONSOLIDATED

FINANCIALS

Key Financials (US$ mn) 1Q-2020 1Q-2019

  • Var. (%)

EBITDA 162 208

  • 22%

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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SLIDE 28

1 43 2

208 162

1Q-2019 Chile Colombia Argentina 1Q-2020

FIRST QUARTER

EBITDA

BRIDGE BY MARKET

  • 22%

(US$mn)

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SLIDE 29

1Q-2019 Contract Demand Los Cururos Others 1Q-2020

  • 0%

MARKET PERFORMANCE

CHILE

EBITDA VARIATION & MAIN DRIVERS

(US$mn)

2 1 2

148 147

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SLIDE 30

1Q-2019 Chivor Life Extension Contract Margin FX & Others 1Q-2020

  • 98%

MARKET PERFORMANCE

COLOMBIA

EBITDA VARIATION & MAIN DRIVERS

(US$mn)

1 1

44 1

43

EXTENSION

  • f Reservoir’s

USEFUL LIFE

+50 year

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SLIDE 31

1Q-2019 Energía Base Tariff Energía Plus Margin Availability & Others 1Q-2020

  • 13%

MARKET PERFORMANCE

ARGENTINA

EBITDA VARIATION & MAIN DRIVERS

(US$mn)

16 14

1 1 2

31

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SLIDE 32

46 23 12 3 10 11

63 76

  • 48

1Q-2019 1Q-2020

FIRST QUARTER 2020

NET INCOME

ATTRIBUTABLE TO THE PARENT

EBITDA Variance Interest Expense FX Variance Equity Earnings Income Tax Other

32

(US$mn)

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SLIDE 33

68 150 127 8

341 378

Dec-19 Operating Investing Financing FX Impact Mar-20

FIRST QUARTER 2020

CASH FLOW

ACTIVITIES

33

(US$mn)

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SLIDE 34

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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SLIDE 35

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AES GENER

DIVIDEND DISTRIBUTIONS

APPROVED AT THE ANNUAL SHAREHOLDER’S MEETING

35

To be paid on May 15, 2020 To be paid in 2020

DIVIDEND

APPROVED

$116mn

$35mn $81mn

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SLIDE 36

GROWTH PROJECTS STATUS UPDATE

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SLIDE 37

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

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SLIDE 38

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

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SLIDE 39

4.3km

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

39

5.3km

FOR MORE WATER

Project Status as of 05/5/2020

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SLIDE 40

10MW 5HOURS

INSTALLED CAPACITY

COD

MAY

2020

100%

COMPLETE

PROJECT

UNDER

FINAL COMMISSIONING

40

INNOVATIVE USE OF BATTERY & HYDRO TECHNOLOGY

GROWTH PROJECT STATUS UPDATE

VIRTUAL RESERVOIR

ENERGY STORAGE

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SLIDE 41

GROWTH PROJECT STATUS UPDATE

ANDES II

SOLAR

41

80MW

INSTALLED CAPACITY

BIFACIAL PANELS, CLIMATE CONDITIONS AND GRID PROXIMITY ENHANCE CAPACITY FACTOR

COD

MAY

2020

98%

COMPLETE

PROJECT 36MW

ALREADY IN OPERATION

ALL EQUIPMENT

ALREADY ONSITE

Project Status as of 03/5/2020

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SLIDE 42

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

42

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SLIDE 43

KEY TAKEAWAYS 1Q-2020

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SLIDE 44

1Q-2020

KEY TAKEAWAYS

EARNINGS CALL

44

GREENTEGRA

Advancing in the execution

  • f our Transformational

Strategy

COVID-19

While not immune, our Business and Strategy are resilient

OUR PURPOSE

Our Mission & Values are guiding our actions and decisions

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SLIDE 45

1Q-2020 EARNINGS CALL

MAY 7, 2020

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SLIDE 46

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

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SLIDE 47

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