Endesa Chile IR Presentation As of March 31, 2014 Organization - - PowerPoint PPT Presentation

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Endesa Chile IR Presentation As of March 31, 2014 Organization - - PowerPoint PPT Presentation

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Endesa Chile IR Presentation As of March 31, 2014 Organization structure ITALY Committed Shareholders 92% SPAIN 61% ENERSIS Chilean Pension CHILE Funds 3%13% Institutional 3% Shareholders 60% 6% ADR Holders 60% 15% Minority

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SLIDE 1

Endesa Chile

IR Presentation

As of March 31, 2014

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SLIDE 2

2

  • COSTANERA, 76%
  • EL CHOCÓN, 65%
  • EDEGEL, 62%
  • EMGESA, 27%
  • ENDESA BRASIL, 39%

AMPLA COELCE FORTALEZA CDSA CIEN 61% 92% 60% COLOMBIA PERU ARGENTINA BRAZIL

Organization structure

CHILE  PEHUENCHE, 93%  CELTA, 96%

Committed Shareholders

60% 15% 6% 3% 3%13%

ENERSIS Chilean Pension Funds Institutional Shareholders ADR Holders Minority Shareholders Other Institutional Shareholders

ITALY SPAIN CHILE

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SLIDE 3

COLOMBIA 2,956 MW inst. capacity

Renewables: 2,512 MW Thermal : 444 MW

20% market share2

  • No. 2

5,571 MW inst. capacity1

Renewables: 3.456 MW Thermal : 2,028 MW NCRE: 87 MW

30% market share2 PERU 1,539 MW inst. capacity

Renewables: 750 MW Thermal : 789 MW

20% market share2 CHILE BRAZIL 987 MW inst. capacity

Renewables: 665 MW Thermal : 322 MW

1% market share2

Consolidated installed capacity : 13,717 MW Capacity including Brazil : 14,704 MW Consolidated energy sales 2012 : 58,621 GWh Consolidated energy sales 2013 : 57,754 GWh

3,652 MW inst. capacity

Renewables: 1,328 MW Thermal: 2,324 MW

12% market share2 ARGENTINA

  • No. 2
  • No. 1
  • No. 1

1 From April 1, 2014, GasAtacama will be included in Chilean capacity (+780 MW) 2 Calculated based on installed capacity

A unique portfolio in LatAm’s generation business

3

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SLIDE 4

Renewables: 8,711 MW

Chile: 3,456 MW Argentina: 1,328 MW Brazil1: 665 MW Peru: 750 MW Colombia: 2,512 MW Chile: 660 MW Colombia: 236 MW Chile: 1,368 MW Argentina: 2,324 MW Peru: 788 MW Colombia: 208 MW Chile: 87 MW

NCRE2: 87 MW

Well diversified generation assets throughout the region

Coal: 896 MV Oil-Gas: 5,010 MW 4

1 Brazil assets are recognized as equity method investments. 2 Non Conventional Renewable Energy.

Installed Capacity 60% of Endesa Chile´s installed capacity corresponds to renewable resources

Brazil1: 322 MW

8,711 896 5,010 87

RENEWABLES COAL OIL-GAS NCRE

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SLIDE 5

1 Under IFRS, Endesa Chile has adopted the Chilean Peso as functional currency, comparisons between periods have been only made under Ch$. 2 Referential average exchange rate was 551.91 Ch$/US$ as of March 31, 2014.

Consolidated financial highlights

5

Ch$ million1 1Q14 1Q13 Change MM US$2 1Q14 Revenues 521 489 6% 943 Costs (283) (245) 15% (512) Contribution Margin 238 245 (3%) 432 EBITDA 184 196 (6%) 333 EBIT 136 148 (8%) 246 Net Financial Expenses (49) (35) 39% (88) Related Company Results 38 29 29% 68 Taxes (41) (35) 15% (74) Net Income 84 109 (23%) 153

Attributable to shareholders of Endesa Chile

36 63 (43%) 65

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Total Installed Capacity 1: 13,717 MW EBITDA 1Q14 (TTM): US$ 1,751 million Total Generation

1 (TTM):

49,827 GWh

Endesa Brasil

  • Endesa Chile’s ownership: 38.6%.
  • Net Attributable Income (TTM)2:

US$ 186 million.

1 Excludes the proportional assets from GasAtacama (390 MW) and Endesa Brasil (987 MW). 2 Considers the total contributions of Endesa Brasil recognized by Endesa Chile as an equity method investment.

Diversified source of EBITDA

Chile 41% Colombia 21% Peru 11% Argentina 27% Chile 37% Colombia 26% Peru 17% Argentina 20% Chile 35% Colombia 42% Peru 17% Argentina 6%

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SLIDE 7

7

Physical Sales as of March 2013

Chile Colombia Peru

Distribution Companies Spot Free Customers

Argentina

Physical Sales as of March 2014

Chile Colombia Peru Argentina

Balanced commercial policy

47% 22% 31% 82% 18% 55% 36% 9% 13% 87% 49% 19% 32% 75% 24% 1% 53% 34% 13% 18% 82%

Distribution Companies Spot Free Customers

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SLIDE 8

Revenue stability through long term contracts

Colombia – Contracted energy (GWh) Peru – Hired energy Chile– Contracted energy (GWh) Peru – Contracted energy (GWh) Brazil– Contracted energy (GWh) 8

Energy contracts with established prices (GWh)

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SLIDE 9

174 209 115 19 210 1,865 871 76 89 69 25 123

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

< 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years and beyond Bonds Banks and Other

  • Cash:

US$ 556 MM

  • Commited Credit Lines:

US$ 485 MM

  • Non-Commited Credit Lines:

US$ 345 MM

  • Average life of debt:

6.7 years

US$ million

Debt by Type Debt by Currency Debt by Country (MM US$)

1 Includes arrangements and other consolidation adjustments.

1 1 1

Total Debt: US$ 3,845 MM

Healthy debt maturity profile

9

Financial Debt Maturity1as of March 2014

Chile 46% Argentina 5% Colombia 42% Peru 7% Other Local Currency 43% US$ 41% UF + CLP 16% Others 19% Bank Debt 14% Bonds 67%

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10

1Amounts translated into US$ at the average exchange rate for each period.

* For year 2012, jointly controlled companies are included

Consistent consolidated cash flow generation (US$ million)1

1,714 (300) (538) (381) 494 1,977 (277) (590) (414) 697 1,751 (233) (539) (381) 599 EBITDA Net Financial Result Payments for Additions of Fixed Assets Income Tax Free Cash Flow 2012 2013 1Q 2014 TTM

*Attributable to each period

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Increasing electricity demand in LatAm

11

90% 100% 110% 120% 130% 140% 150% 160% 170% 180%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Sales in GWh (%)

Years

Historic electricity demand growth

(CAGR, last ten years)

CHILE COLOMBIA PERU BRAZIL ARGENTINA

5.6% 4.9% 4.0% 3.1% 2.7%

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ARGENTINA AUSTRALIA AUSTRIA BOLIVIA BRAZIL CANADA CHILE CHINA COLOMBIA FINLAND FRANCE GERMANY GREECE INDIA IRELAND ITALY JAPAN MEXICO PERU RUSSIA SPAIN UNITED KINGDOM UNITED STATES 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 10,000 20,000 30,000 40,000 50,000 60,000 Electricity consumption, per capita (Kwh per year) GDP per capita (current PPP, US$)

Data source: The World Bank.

Direct relation between GDP and electricity demand

  • Chile aims to be in the group of developed countries.
  • There is no development without energy.

12

Markets with high potential for growth

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SLIDE 13

El Quimbo

  • Hydro power plant.
  • Located in the Huila Department,

Colombia

  • Utilizes stream coming from

Magdalena River.

  • 400 MW of installed capacity.
  • Estimated load factor: 60%.
  • River detour in March 2012.

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Projects under construction

Colombia

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SLIDE 14

14

Projects under construction

Salaco Chain (optimization)

  • Repowering the minor plants to reach 221

MW capacity.

  • Located in the Bogotá River system,

Colombia

  • Optimization works started in January

2013.

  • 145 MW will be added to the capacity.
  • As of March 31, 2014, 2 repowered units

have been commissioned, adding 42 MW

  • f installed hydro capacity.

Colombia

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SLIDE 15

15

Investments recently approved

Los Cóndores

  • Hydro power plant, run of the river.
  • Located in San Clemente, in Maule region,

Chile.

  • 150 MW of installed capacity.
  • Estimated load factor: 46%
  • FID1 approved on March 31, 2014.

Gas Atacama

  • Thermal power plant, Gas - CCGT
  • Located in Mejillones, in Atacama region,

Chile.

  • 780 MW of installed capacity.
  • Estimated load factor: 46%
  • FID1 approved on March 31, 2014 to

buy the 50% outstanding non controlling stake.

1 Final Investment Decision.

Chile Chile

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SLIDE 16

13,717

13,717 13,717 13,717 March - 2014 Acquisition of Non- Controlling Interest Under Construction In basic enginering Under study

Neltume - 490 MW Punta Alcalde - 740 MW Curibamba - 188 MW Los Cóndores - 150 MW Taltal - 120 MW GasAtacama- 780 MW El Quimbo- 400 MW Salaco- 145 MW

Hydro plant Thermal plant

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22% increase over March 2014 installed capacity through new projects

Expected evolution for Endesa Chile´s installed capacity

815 MW

  • In March 2014, Endesa Chile’s Board of Directors approved the acquisition from Southern Cross of their 50% interest in

GasAtacama, adding 780 MW of installed capacity from April 2014.

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Projects under study

Punta Alcalde

  • Thermal, coal-steam power plant.
  • Located in Huasco, in the Atacama region (SIC),

Chile.

  • 740 MW of installed capacity.
  • Estimated load factor: 83%
  • On Jan 17, 2014, the Supreme Court of Chile

reaffirmed the approval of the EIS1, in line with the ruling of the Ministers Committee on Dec 3, 2012. Taltal (Conversion)

  • Closure to upgrade the existing LNG power plant.

Conversion to Combined Cycle.

  • Located in the Antofagasta region (SIC), Chile.
  • 120 MW will be added to the current 245 MW

capacity.

  • EIS2

submitted for approval in Dec 2013

1 Environmental Impact Study. 2 Environmental Impact Statement.

Chile Chile

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SLIDE 18

1 Environmental Impact Study.

Projects under study

Neltume

  • Hydro power plant, run of the river.
  • Located in Panguipulli, in the Los Ríos

Region (SIC).

  • 490 MW of installed capacity.
  • EIS1 under review.

Curibamba

  • Hydro power plant, run of the river.
  • Located in the Junín Department, utilizes

streams coming from the Comas and Uchubamba Rivers.

  • 188 MW of installed capacity.
  • EIS1 approved.

18

Chile Perú

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1 Environmental Impact Study.

Projects under study

HidroAysén

  • Hydro power plants located in

Aysén Region.

  • Endesa Chile owns 51% and Colbún

49%.

  • 2,750 MW of installed capacity
  • Estimated average load factor:

77%.

  • EIS1 approved the generation plants

(5).

Chile

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565 507 545 529 590 2009 2010 2011 2012 2013 26.8 32.5 27.2 14.3 21.6 2009 2010 2011 2012 2013

1,413 1,184 1,025 549 736 514 584 601 773 811 204 212 292 287 318 117 117 96 52 113

2009 2010 2011 2012 2013

CHILE COLOMBIA PERU ARGENTINA

2,248 2,098 2,014 1,661 1,977

Dividends (Ch$ per Share) EBITDA1 (US$ Million) Market Value2 (US$ Million)

Market value and dividends

Source: Bloomberg

1 Amounts expressed in US$, using the average exchange rate for each period. For Years 2010 and 2011 only consider jointly controlled companies. 2 Amounts expressed in US$, using the last exchange rate for each period.

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Consolidated CAPEX1 (US$ Million)

Source: Purchases of property, plant and equipment

13,963 15,364 12,102 13,297 12,230 2009 2010 2011 2012 2013

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Prepared to face challenges

Increasing installed capacity in countries with more attractive economic outlooks with an ever-increasing commitment to sustainability Know-how and vast experience to develop new projects in less favorable conditions Ensure energy supply to all customers with efficiency, sustainability and responsibility through conservative commercial policy and commitment to communities Judicial delay of new projects is leading us to optimize existing generation capacity Continue supporting the development in each country through a well-diversified pipeline

  • f projects over 13 GW including different generation sources
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Key investment considerations

22 One of the largest electricity generation company in Chile

  • Proven track record with more than 70 years of experience

Unique and well diversified portfolio of assets Balanced commercial policy leading to revenue and margin stability Markets with stable regulatory environment and high potential growth Solid liquidity and financial position

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1943 1987 1994 1999 2004 2005 2013

Endesa Chile’s corporate history

  • December 1943,

Endesa Chile is incorporated as a Stock Company and an affiliate

  • f the Corporacion de

Fomento de la Produccion (CORFO)

  • July 1994, Endesa

Chile’s stock begins to trade at the New York Stock Exchange

  • September 2004, Ralco

hydroelectric plant started

  • perations adding 690 MW
  • f installed capacity to

Endesa Chile

  • As of December 2013, Endesa

Chile operates directly or through subsidiaries 178 electricity units with an installed capacity of 13,688 MW

  • In 1987,the process of

privatization begins and through a series of public

  • fferings is completed in 1989
  • May 1999, Enersis S.A.

becomes the majority

  • wner of Endesa Chile
  • In 2005, the Company

incorporates Endesa Brasil S.A.

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SLIDE 24

Endesa Chile´s Investor Relations Team

24

Contact us at: ir@endesa.cl Susana Rey Investor Relations Director (56-2) 2630 9606 susana.rey@endesa.cl Catalina Gonzalez Head of Investor Relations (56-2) 2630 9603 cbgs@endesa.cl Guillermo Berguecio Investor Relations Executive (56-2) 2630 9506 gabb@endesa.cl

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EXHIBITS

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1Q 2014 Highlights

43% decrease in Net Income attributable to Endesa Chile’s shareholders, mainly due to a higher procurement and services costs and a larger negative exchange rate difference 6% decrease in consolidated EBITDA mainly due to a 15% increase in Operating Costs due to higher energy purchases in Chile, and greater transportation expenses in Chile and Peru. 6% growth in Operating Revenues due to higher average energy sales prices, mainly in Chile and Peru. 6% increase in hydro generation in Chile because of better water availability in the period.

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Costanera: 2,324 MW El Chocón: 1,328 MW

Renewables 1,328 MW Thermal 2,324 MW

El Chocón Costanera

  • Based on installed capacity

Argentina

Buenos Aires

Million US$

1Q 2014 1Q 2013 Change Revenues 33 84 (60%) EBITDA 14 4 261% EBITDA Margin 43.5% 5%

  • Physical Sales (GWh)

1,487 2,230 (33%)

Million US$

1Q 2014 1Q 2013 Change Revenues 11 15 (25%) EBITDA 5 7 (22%) EBITDA Margin 49.1% 47.2% 4% Physical Sales (GWh) 735 574 28%

Installed Capacity: 3,652 MW Market Share*: 12% Total Generation: 1,942 GWh

EL CHOCON COSTANERA

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  • D. Almagro–

Taltal Bocamina Laja Maule Bio Bio Tarapaca Huasco San Isidro Los Molles Cachapoal Santiago

Los Molles: 18 MW Rapel-Sauzal: 466 MW Maule: 875 MW Laja: 940 MW Ralco-Pangue: 1,157 MW

62% Renewables 3,456 MW 36% Thermal 2,028 MW

Tarapaca 182 MW

  • D. Almagro–Taltal:

269 MW Huasco: 64 MW San Isidro 1 and 2: 778 MW Bocamina 1 and 2: 478 MW TG Quintero: 257 MW

2% NCRE1 87 MW

Canela: 18 MW Canela II: 60 MW Ojos de Agua: 9MW

1 Non Conventional Renewable Energy.

  • Based on installed capacity

Chile

Million US$

1Q 2014 1Q 2013 Change Revenues 485 393 24% EBITDA 61 106 (42%) EBITDA Margin 12.6% 27.1% (53%) Physical Sales (GWh) 4,822 5,006 (4%)

ENDESA CHILE

Installed Capacity: 5,571 MW Market Share*: 30% Total Generation: 4,062 GWh

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SLIDE 29

Cartagena Bogotá

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Guavio: 1,213 MW Betania: 541 MW Río Bogotá: 758 MW

85% Renewables 2,512 MW 15% Thermal 444 MW

Cartagena: 208 MW Termozipa: 236 MW

* Based on installed capacity

Colombia

Termozipa Guavio Betania Río Bogotá

Million US$

1Q 2014 1Q 2013 Change Revenues 273 278 (2%) EBITDA 178 170 5% EBITDA Margin 65.1% 61.2% 7% Physical Sales (GWh) 3,678 3,833 (4%)

EMGESA

Installed Capacity: 2,956 MW Market Share*: 20% Total Generation: 2,974 GWh

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Ventanilla: 485 MW Santa Rosa: 304 MW

55% Thermal 789 MW

Cuenca Río Rímac: 556 MW Yanango: 43 MW Chimay: 151 MW

45% Renewables 750 MW

* Based on installed capacity

Peru

Sta Rosa Ventanilla Lima Río Rimac Yanango Chimay

Million US$

1Q 2014 1Q 2013 Change Revenues 141 118 19% EBITDA 74 68 8% EBITDA Margin 52.3% 57.5% (9%) Physical Sales (GWh) 2,184 2,270 (4%)

EDEGEL

Installed Capacity: 1,539 MW Market Share*: 20% Total Generation: 2,080 GWh

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Fortaleza: 322 MW

Thermal 322 MW

Cachoeira: 665 MW

Renewables 665 MW

Fortaleza Rio de Janeiro

Two 500 Km lines Total interconnection capacity: 2,100 MW

Cachoeira

*Based on installed capacity

Brazil

CIEN

Million US$

1Q 2014 1Q 2013 Change Revenues 111 58 91% EBITDA 81 35 130% EBITDA Margin 73.2% 60.7% 21% Physical Sales (GWh) 1,189 923 29%

Million US$

1Q 2014 1Q 2013 Change Revenues 75 75 (1%) EBITDA 18 21 (13%) EBITDA Margin 24.6% 28.3% (13%) Physical Sales (GWh) 713 804 (11%)

Million US$

1Q 2014 1Q 2013 Change Revenues 26 29 (12%) EBITDA 21 20 4% EBITDA Margin 80.5% 68.7% 17%

CACHOEIRA

Installed Capacity: 987 MW Market Share*: 1% Total Generation: 1,383 GWh

FORTALEZA

CIEN: Transmission Brazil-Argentina Interconnection

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Installed capacity and energy generation

Installed Capacity (MW) Net Generation (GWh)

1 Compared with 1Q2013

MW CHILE COLOMBIA PERU ARGENTINA TOTAL RENEWABLE

3,456 2,512 750 1,328 8,046

COAL

660 236 896

OIL-GAS

1,368 208 788 2,324 4,688

NCRE

87 87

Total

5,571 2,956 1,539 3,652 13,717

Gwh / Change1 CHILE COLOMBIA PERU ARGENTINA TOTAL RENEWABLE

2,241 5% 2,749 2% 1,138 (10%) 487 7% 6,615 1%

COAL

434 (61%) 218 (23%)

  • 0%
  • 653

(53%)

OIL-GAS

1,332 (13%) 7 (80%) 942 3% 1,455 (33%) 3,737 (20%)

NCRE

54 (6%)

  • 54

(6%)

Total

4,062 (16%) 2,974 (1%) 2,080 (5%) 1,942 (26%) 11,058 (13%)

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1Amounts translated into US$ at closing exchange rate for the period (Ch$ 551.18. per US$)

Strong financial position

Ch$ Million 1Q 2014 1Q 2013 Change % Change Th US$1 1Q 2014 Gross Debt 1,919,545 1,894,496 25,049 1% 3,483 Cash 306,555 323,807 (17,253) (6%) 556 Net Debt 1,612,990 1,570,689 42,301 3% 2,926 Leverage 0.94 0.88 0.06 6% 0.94 Financial Coverage 3.56 5.15 (1.59) (45%) 3.56

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BBB+ Baa2 BBB+

Since: Affirmed:

Credit Risk Agencies recognition

  • Jan. 2010
  • Apr. 2011
  • Feb. 2010
  • Aug. 2013
  • Sept. 2013
  • Apr. 2014

AA (cl) AA

  • Jan. 2010
  • Apr. 2010
  • Aug. 2013
  • Jul. 2013

International market Chilean market RATINGS BASED UPON:

  • Well diversified and efficient assets
  • Leading market share in the four countries where we operate
  • Transparent and favorable regulatory framework in Chile
  • Solid financials, good cash flow generation and prudent financial management
  • Conservative commercial policy
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Healthy debt maturity profile in each country

1 Includes arrangements and other consolidation adjustments. 2 May not total exactly due to rounding.

US$ million 2014 2015 2016 2017 2018 Balance TOTAL Chile 300 576 14 12 12 857 1,770 Argentina 161 32 17

  • 211

Peru 31 38 62 51 37 46 265 Colombia 47 127 10 107 132 1,175 1,599 TOTAL2 538 773 104 171 180 2,079 3,845 Financial Debt Maturity1, as of March 2014

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SLIDE 36

1 EBITDA / (Financial expenses + Income (Loss) for indexed assets and liabilities + Foreign currency exchange differences, net)

Endesa Chile

2013 2012 Financial Expense Coverage1 6.3 5.0 ROE (%) 13.6% 9.2% ROA (%) 8.5% 6.5%

Strong performance paired with a conservative financial policy

36

4,126 3,336 3,116 3,106 3,535 2,994 2,805 2,031 2,248 2,097 2,014 1,661 1,977 2,017

2.0 1.5 1.5 1.5 2.1 1.5 1.4 5.6 7.4 8.9 8.0 5.4 7.1 6.8

  • 1.0

2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0

  • 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2008 2009 2010 2011 2012 2013 1Q14 TTM Net Debt EBITDA Net Debt/ EBITDA EBITDA/Net Financial Expenses

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SLIDE 37

This presentation contains statements that could constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of

  • 1995. These statements appear in a number of places in this announcement and include statements regarding the intent, belief or current expectations of

Endesa Chile and its management with respect to, among other things: (1) Endesa Chile’ business plans; (2) Endesa Chile’ cost-reduction plans; (3) trends affecting Endesa Chile’ financial condition or results of operations, including market trends in the electricity sector in Chile or elsewhere; (4) supervision and regulation of the electricity sector in Chile or elsewhere; and (5) the future effect of any changes in the laws and regulations applicable to Endesa Chile or its

  • subsidiaries. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ

materially from those in the forward-looking statements as a result of various factors. These factors include a decline in the equity capital markets of the United States or Chile, an increase in the market rates of interest in the United States or elsewhere, adverse decisions by government regulators in Chile or elsewhere and other factors described in Endesa Chile’ Annual Report on Form 20-F. Readers are cautioned not to place undue reliance on those forward- looking statements, which state only as of their dates. Endesa Chile undertakes no obligation to release publicly the result of any revisions to these forward- looking statements.