Endesa Chile IR Presentation As of June 30, 2014 Organization - - PowerPoint PPT Presentation

Endesa Chile

IR Presentation

As of June 30, 2014

 PEHUENCHE, 93%  CELTA, 96%  GASATACAMA, 98%

2

• COSTANERA, 76%
• EL CHOCÓN, 65%
• EDEGEL, 62%
• EMGESA, 27%
• ENDESA BRASIL, 37%

AMPLA, 17%

COELCE, 22% FORTALEZA, 37% CDSA, 37% CIEN, 37%

61% 92% 60% COLOMBIA PERU ARGENTINA BRAZIL1

Organization structure

CHILE

Committed Shareholders

ITALY SPAIN CHILE

1 Brazil assets are recognized as equity method investments.

60% 15% 4% 3% 18%

Enersis S.A. Chilean Pension Funds ADRs (Citibank N.A.) Retail Institutional Investors

COLOMBIA 3,041 MW inst. capacity

Hydro: 2,597 MW Thermal : 444 MW

21% market share2

• No. 2

6,351 MW inst. capacity1

Hydro: 3,456 MW Thermal : 2,808 MW NCRE: 87 MW

32% market share2 PERU 1,524 MW inst. capacity

Hydro: 751 MW Thermal : 773 MW

19% market share2 CHILE BRAZIL 987 MW inst. capacity

Hydro: 665 MW Thermal : 322 MW

1% market share2

Consolidated installed capacity : 14,568 MW Capacity including Brazil : 15,555 MW Consolidated energy sales 1H13 : 27,237 GWh Consolidated energy sales 1H14 : 26,877 GWh

3,652 MW inst. capacity

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

12% market share2 ARGENTINA

• No. 2
• No. 1
• No. 1

1 From May 1, 2014, GasAtacama is included in Chilean capacity (+780 MW) 2 Calculated based on installed capacity

A unique portfolio in LatAm’s generation business

3

Hydro: 8,797 MW

Chile: 3,456 MW Argentina: 1,328 MW Brazil1: 665 MW Peru: 751 MW Colombia: 2,597 MW Chile: 660 MW Colombia: 236 MW Chile: 2,148 MW Argentina: 2,324 MW Peru: 773 MW Colombia: 208 MW Chile: 87 MW

NCRE2: 87 MW

Well diversified generation assets throughout the region

Coal: 896 MV Oil-Gas: 5,775 MW 4

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

Installed Capacity 57% of Endesa Chile´s installed capacity corresponds to Hydro resources

Brazil1: 322 MW

8,797 896 5,775 87

HYDRO COAL OIL-GAS NCRE

1 Under IFRS, Endesa Chile has adopted the Chilean Peso as functional currency, comparisons between periods have been only made under Ch$. 2 Referential average exchange rate was 553.12 Ch$/US$ as of June 30, 2014.

Consolidated financial highlights

5

Ch$ million1 1H14 1H13 Change MM US$2 1H14 Revenues

1,137,127 1,015,797 12% 2,056

Costs

(602,407) (532,591) 13% (1,089)

Contribution Margin

534,720 483,206 11% 967

EBITDA

422,582 382,396 11% 764

EBIT

325,354 288,578 13% 588

Net Financial Expenses

(81,459) (65,557) 24% (147)

Related Company Results

34,819 59,655 (42%) 63

Taxes

(82,887) (90,240) (8%) (150)

Net Income

218,154 195,768 11% 394 Attributable to shareholders of Endesa Chile 92,737 100,115 (7%) 168

6

Total Installed Capacity 1: 14,568 MW EBITDA 1H14 (TTM): US$ 1,843 million Total Generation 1

(TTM):

50,719 GWh

Endesa Brasil

• Endesa Chile’s ownership: 37.1%.
• Net Attributable Income (TTM)2:

US$ 131 million.

1 Excludes the proportional assets from 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 44% Colombia 21% Peru 10% Argentina 25% Chile 36% Colombia 25% Peru 17% Argentina 22% Chile 33% Colombia 43% Peru 17% Argentina 7%

7

Physical Sales as of June 2013

Chile Colombia Peru

Distribution Companies Spot Free Customers

Argentina

Physical Sales as of June 2014

Chile Colombia Peru Argentina

Balanced commercial policy

Distribution Companies Spot Free Customers

49% 22% 29% 81% 18% 1% 55% 37% 8% 10% 90% 50% 19% 31% 76% 22% 2% 54% 36% 10% 19% 81%

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

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$ 4,405 MM

Healthy debt maturity profile

9

Financial Debt Maturity1

as of June 2014

Chile 44% Argentina 5% Colombia 45% Peru 6% Other Local Currency 46% US$ 48% UF + CLP 6% Others 16% Bank Debt 7% Bonds 77% 175 209 119 19 238 2,606 665 75 83 61 26 127 500 1,000 1,500 2,000 2,500 3,000 < 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years and beyond Bonds Banks and Other

• Cash:

US$ 441 MM;

(US$ 581 MM including >90 days cash investments)

• Committed Credit Lines:

US$ 495 MM

• Non-Committed Credit Lines:

US$ 344 MM

• Average life of debt:

7.4 years

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 1,843 (277) (643) (357) 566 EBITDA Net Financial Expenses Payments for Additions of Fixed Assets Income Tax Free Cash Flow 2012 2013 1H 2014 TTM

*Attributable to each period

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%

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

El Quimbo

• Hydro power plant, located in the Huila

Department, Colombia

• Utilizes the flow coming from the Magdalena

River.

• 400 MW of installed capacity with an

estimated load factor of 60%.

• Physical execution of 72% as of June 30,

2014 with an accumulated investment of US$ 702 million1

• Beginning the work to prepare the bottom of

the reservoir and build the Tesalia Substation.

13

Projects under construction

Colombia

1Constant USD of year 2010.

14

Projects under construction

Salaco Chain (optimization)

• Upgrading the minor plants to reach 221 MW

capacity.

• Located in the Bogotá River system, Colombia.
• Total CAPEX of US$ 44 million.
• Optimization works started in January 2013.
• 145 MW will be added to the capacity.
• As of June 30, 4 units had come into service,

adding a net total of 128 MW. Colombia

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.
• Total CAPEX of US$ 662 million.

Gas Atacama

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

Chile.

• 780 MW of installed capacity.
• Estimated load factor: 46%
• As of May, 2014 Endesa Chile became the

98% owner of GasAtacama.

1 Final Investment Decision.

Chile Chile

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 May - 2014

16

22% increase in installed capacity through new projects

Expected evolution for Endesa Chile´s installed capacity

815 MW

• Since May, 2014 GasAtacama has been fully consolidated by Endesa Chile.
• Los Cóndores construction started during the first half of 2014.

17

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 January 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, to

a Combined Cycle Gas Turbine Power Plant.

• 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

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

the flow coming from the Comas and Uchubamba Rivers.

• 188 MW of installed capacity.
• EIS1 approved.

18

Chile Perú

19

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%.

• On June 10th 2014 the Ministers

Committee revoked the EIS previously approved for the five generation plants.

• Hidroaysen was officially noted

about the resolution on July 15th 2014.

• Currently Hidroaysen is examining

all possible alternatives in order to preserve the value of the project.

Chile

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.

20

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

21

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 of each country through a well-diversified pipeline

• f projects and over 13 GW of capacity, including different generation sources

Key investment considerations

22 One of the largest electricity generation companies 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

23

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 on 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 was completed in 1989 through a series of public offerings

• May 1999, Enersis S.A.

becomes the majority

• wner of Endesa Chile
• In 2005, the Company

incorporates Endesa Brasil S.A.

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 Francisco Basauri Investor Relations Executive (56-2) 2630 9585 fbasauri@endesa.cl

25

EXHIBITS

26

1H14 Highlights

7% decrease in net earnings attributable to Endesa Chile’s controlling shareholders, mainly due the higher cost of energy purchases and a greater negative exchange difference effect. 11% increase in consolidated EBITDA due to higher revenues, primarily in Chile and Colombia. 12% growth in Operating Revenues due to a higher average electricity sales price expressed in Chilean pesos, along with the full consolidation of GasAtacama’s operating revenue. 7% increase in hydro generation because of better water availability in the period. Beginning the construction of Los Cóndores pass-through hydro power plant. Acquisition of the additional 50% non controlling stake in GasAtacama and becoming part of the Group's consolidation perimeter.

27

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

Hydro 1,328 MW Thermal 2,324 MW

El Chocón Costanera

• Based on installed capacity

Argentina

Buenos Aires

Installed Capacity: 3,652 MW Market Share*: 12% Total Generation: 4,676 GWh

EL CHOCON COSTANERA

Million US$

1H 2014 1H 2013 Change Revenues 66 241 (73%) EBITDA 31 12 154% EBITDA Margin 47.2% 5%

• Physical Sales (GWh)

3,459 3,898 (11%)

Million US$

1H 2014 1H 2013 Change Revenues 28 30 (9%) EBITDA 15 12 31% EBITDA Margin 54.9% 38.0% 45% Physical Sales (GWh) 1,704 1,386 23%

28

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

54% Hydro 3,456 MW 44% Thermal 2,808 MW

GasAtacama 780 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

ENDESA CHILE

Installed Capacity: 6,351 MW Market Share*: 32% Total Generation: 8,166 GWh

Million US$

1H 2014 1H 2013 Change Revenues 1,007 769 31% EBITDA 130 181 (28%) EBITDA Margin 12.9% 23.5% (45%) Physical Sales (GWh) 9,699 9,543 2%

• D. Almagro–

Taltal Bocamina Laja Maule Bio Bío Tarapacá Huasco San Isidro Los Molles Cachapoal Santiago GasAtacama

Cartagena Bogotá

29

Guavio: 1,213 MW Betania: 541 MW Río Bogotá: 843 MW

85% Hydro 2,597 MW 15% Thermal 444 MW

Cartagena: 208 MW Termozipa: 236 MW

* Based on installed capacity

Colombia

Termozipa Guavio Betania Río Bogotá EMGESA

Installed Capacity: 3,041 MW Market Share*: 21% Total Generation: 6,113 GWh

Million US$

1H 2014 1H 2013 Change Revenues 652 561 16% EBITDA 430 357 20% EBITDA Margin 66.1% 63.7% 4% Physical Sales (GWh) 7,397 7,965 (7%)

30

Ventanilla: 485 MW Santa Rosa: 288 MW

55% Thermal 773 MW

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

45% Hydro 751 MW

* Based on installed capacity

Peru

Sta Rosa Ventanilla Lima Río Rimac Yanango Chimay EDEGEL

Installed Capacity: 1,524 MW Market Share*: 19% Total Generation: 4,397 GWh

Million US$

1H 2014 1H 2013 Change Revenues 304 236 29% EBITDA 157 130 21% EBITDA Margin 51.8% 54.9% (6%) Physical Sales (GWh) 4,618 4,446 4%

31

Fortaleza: 322 MW

Thermal 322 MW

Cachoeira: 665 MW

Hydro 665 MW

Fortaleza Rio de Janeiro

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

Cachoeira

*Based on installed capacity

Brazil

CIEN CACHOEIRA

Installed Capacity: 987 MW Market Share*: 1% Total Generation: 2,473 GWh

FORTALEZA

CIEN: Transmission Brazil-Argentina Interconnection

Million US$

1H 2014 1H 2013 Change Revenues 190 112 69% EBITDA 119 78 52% EBITDA Margin 62.6% 69.5% (10%) Physical Sales (GWh) 2,171 1,814 20%

Million US$

1H 2014 1H 2013 Change Revenues 165 154 7% EBITDA 22 46 (52%) EBITDA Margin 13.5% 30.0% (55%) Physical Sales (GWh) 1,461 1,623 (10%) Million US$ 1H 2014 1H 2013 Change Revenues 55 58 (6%) EBITDA 44 39 12% EBITDA Margin 80.4% 67.8% 19%

32

Installed capacity and energy generation

Installed Capacity (MW) Net Generation (GWh)

1 Compared with 1H2013

MW CHILE COLOMBIA PERU ARGENTINA TOTAL HYDRO 3,456 2,597 751 1,328 8,131 COAL 660 236 896 OIL-GAS 2,149 208 773 2,324 5,454 NCRE 87 87 Total 6,351 3,041 1,524 3,652 14,568 Gwh / Change1 CHILE COLOMBIA PERU ARGENTINA TOTAL HYDRO 4,369 12% 5,581 (4%) 2,307 (4%) 1,268 52% 13,524 4% COAL 775 (63%) 512 4%

• 0%
• 1,287

(50%) OIL-GAS 2,928 (4%) 21 (64%) 2,089 20% 3,408 (6%) 8,447 (1%) NCRE 94 5%

• 0%
• 94

5% Total 8,166 (10%) 6,113 (4%) 4,397 6% 4,676 4% 23,352 (3%)

33

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. 2014

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

34

Healthy debt maturity profile in each country

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

Financial Debt Maturity1

, as of June 2014

US$ million 2014 2015 2016 2017 2018 Balance TOTAL Chile

74 575 15 12 12 1,265 1,953

Argentina

157 31 18 1

• 207

Peru

27 38 62 51 37 46 261

Colombia

49 133

• 112

138 1,553 1,984

TOTAL2

308 777 94 176 186 2,864 4,405

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

Endesa Chile

1H 2014 1H 2013 Financial Expense Coverage1 4.7 5.4 ROE (%) 13.1% 9.3% ROA (%) 8.7% 6.9%

Strong performance paired with a conservative financial policy

35

4,126 3,336 3,116 3,106 3,535 2,994 3,643 2,031 2,248 2,097 2,014 1,661 1,977 1,843

2.0 1.5 1.5 1.5 2.1 1.5 2.0 5.6 7.4 8.9 8.0 5.4 7.1 6.7

• 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 1H14 TTM Net Debt EBITDA Net Debt/ EBITDA EBITDA/Net Financial Expenses

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.