endesachileirpresentation AS OF MARCH 31st, 2010 Index Who is - - PDF document

endesachileirpresentation

AS OF MARCH 31st, 2010

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Index

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Who is Endesa Chile? Operational aspects Financial aspects Where are we heading to? Conclusions

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whoisendesachile?

General highlights

 Multinational electricity generation company, based in Chile, with leading market positions in most of the countries where it operates  Large portfolio of generation assets distributed within South America  Efficient investment portfolio adds value to Endesa Chile  Excellent reputation and high level of technical standards  Vast experience, with over 65 years of history  Committed with regulatory authorities, the environment and Corporate Governance best practices  Part of an important worldwide electricity group (Enel, Endesa, S.A., Enersis)

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4 Ownership structure

whoisendesachile?

Chilean Pension Funds ADR Holders Other Inst. Shareholders Minority Shareholders 60% 18% 5% 13% 4% Pehuenche 92.65% Endesa Eco 100.00% El Chocón 65.37% Costanera 69.76% Edegel 62.46% Emgesa 26.87% Canela 75.00% San Isidro 100.00% Pangue 94.99% Celta 100.00%

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Ampla Coelce Fortaleza CDSA CIEN Endesa Brasil 38.88% 61% 92%

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whoisendesachile?

Important presence in 5 countries

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Colombia

2,895 MW 21% market share Output 2009: 12,674 GWh Output 1Q10: 2,260 GWh

#1

5,650 MW 37% market share Output 2009: 22,239 GWh Output 1Q10: 5,190 GWh

Peru

1,667 MW 27% market share Output 2009: 8,163 GWh Output 1Q10: 1,987 GWh

Chile

#1

Brazil

987 MW 1% market share in generation Output 2009: 3,319 GWh Output 1Q10: 951 GWh 5.4 million customers in distribution

Argentina

#1

Market shares based on installed capacity

Consolidated installed capacity: 13,864 MW Capacity including Brazil: 14,851 MW Consolidated energy sales 2009: 59,859 GWh Consolidated energy sales 1Q10: 13,574 GWh

#1

3,652 MW 13% market share Output 2009: 11,955 GWh Output 1Q10: 2,738 GWh

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Index Who is Endesa Chile? Operational aspects Financial aspects Where are we heading to? Conclusions

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• perationalaspects

Conservative commercial policy

» Hydrology risk » Electricity demand growth » Portfolio of generation assets

Minimize margin variation

Chile Argentina Colombia Peru

Physical sales as of March 2010

» Evolution of fuel prices » Exchange rate risk

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Regulated Spot Unregulated 55% 31% 14% 19% 81% 62% 18% 20% 68% 22% 10%

8 Summary of consolidated results

(33.7%)

• (21.6%)

(29.0%) (9.2%)

• Var. %

1Q10/1Q09 (a) Revenues

Operating income Operating margin Ebitda Net income (b)

US$ Million

(6.0%) Physical sales (GWh) 33% 435

338

13,574 181 1,021

1Q10

44% 554

476

14,951 273 1,086

1Q09

a) Throughout this presentation, variations may not coincide due to rounding of figures b) Attributable to Endesa Chile’s shareholders

Main drivers: lower average energy prices in Chile and higher

• perating costs in Colombia and Peru
• perationalaspects

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FY09

42% 2,246

1,817

59,859 1,120 4,322

9 Ebitda by country as of March 2010

• perationalaspects

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Chile 54% Argentina 9% Colombia 24% Peru 13%

Total Installed Capacity: 13,864 MW Total Ebitda: US$ 435 million

Chile 41% Argentina 26% Colombia 21% Peru 12% Chile 43% Argentina 22% Colombia 19% Peru 16%

Total Generation: 12,174 GWh

10 10 Operations in Chile and Colombia

• Gen. mix
• perationalaspects

Chile Colombia

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Ebitda

Ebitda margin Physical sales (GWh)

US$ Million

5,336

42%

231

1Q10

5,528

50%

336

1Q09

(3.5%)

• (31.3%)

US$ Million

3,333

44%

104

1Q10

3,955

62%

121

1Q09

(15.7%)

• (14.5%)
• Var. %

1Q10/1Q09 Ebitda

Ebitda margin Physical sales (GWh)

• Gen. mix

3,054 2,433 2,087 2,987 49 16 Mar-09 Mar-10

Hydro Thermal NCRE

1,761 2,995 148 499 Mar-09 Mar-10

Hydro Thermal

22,327

57%

1,394

FY09

16,806

57%

513

FY09

• Var. %

1Q10/1Q09

11 Operations in Peru and Argentina

• perationalaspects

Peru Argentina

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US$ Million

2,863

32%

38

1Q10

3,215

29%

32

1Q09

(10.9%)

• 20.3%

Ebitda

Ebitda margin Physical sales (GWh)

US$ Million

2,042

53%

56

1Q10

2,254

66%

61

1Q09

(9.4%)

• (6.9%)

Ebitda

Ebitda margin Physical sales (GWh)

• Gen. mix
• Gen. mix

819 2,543 1,919 563 Mar-09 Mar-10

Hydro Thermal

8,321

53%

204

FY09

12,405

22%

117

FY09

• Var. %

1Q10/1Q09

• Var. %

1Q10/1Q09

12 12

Index Who is Endesa Chile? Operational aspects Financial aspects Where are we heading to? Conclusions

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13 13

financialaspects

Strong financial position

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Net Debt Evolution 

As of March 2010: US$ 576 million of cash and cash equivalents on a consolidated basis  Liquidity position enhanced with US$ 550 million of committed Revolving Credit Lines with foreign banks and US$ 100 million of committed Revolving Credit Lines with local banks  Endesa Chile ring-fenced its Yankee Bonds’ and Local Bonds’; cross default clauses only referenced to Endesa Chile and its Chilean subsidiaries

Debt by Type Debt by Currency

Total gross debt: US$3.8 billion Banks, 715 Others, 456 Yankee Bonds, 917 Local Bonds, 1,732 UF-Ch$ 17% Local currency 31% US$ 52%

3,242 3,719 3,612 3,833 3,239 3,292

• 1,000

2,000 3,000 4,000 5,000 2005 2006 2007 2008 2009 Mar-10

US$ millon

Figures as of March 2010

14 14 Comfortable debt maturity

Financial Debt by Country

Figures as of March 2010

financialaspects

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Peru 12% Chile 56% Colombia 24% Argentina 8%

(US$ million) 2010 2011 2012 2013 2014 Balance Total Chile 14 206 37 415 206 1,266 2,145 Argentina 92 107 39 25 28 291 Perú 57 59 130 49 46 121 461 Colombia 83 124 157 73 358 924 Total 245 495 364 489 353 1,746 3,821

Financial Debt

15 15

financialaspects

Recurrent growth of Endesa Chile’s financials

endesachileirpresentation 389 329 834 1,120 1,029 2006 2007 2008 2009 Mar-10 2,125 2,246 2,042 1,540 1,279 2006 2007 2008 2009 Mar-10

CAGR 06’-1Q10’: + 14% CAGR 06’-1Q10’: + 28%

EBITDA (US$ m) Net income (US$ m)

(*) Data as of March 2010 with Last 12 Months

12M 12M

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financialaspects

Strong financial ratios

endesachileirpresentation 2.8x 2.5x 1.6x 1.5x 1.5x

0.5 1 1.5 2 2.5 3

2006 2007 2008 2009 Mar-10

Net debt/EBITDA EBITDA/Net financial expenses

4.3x 5.0x 6.5x 7.2x 7.7x

1 2 3 4 5 6 7 8 9

2006 2007 2008 2009 Mar-10

Endesa Chile‘s investment grade status restored Endesa Chile’s investment grade status restored

(12M) (12M)

17 17 Credit Risk Agencies recognition

Ratings based upon:  Well diversified and efficient assets and leadership in the four countries where the company operates  Leading market share in the countries where we operate  Transparent and favorable regulatory framework in Chile  Solid financials, good cash flow generation and prudent financial management  Conservative commercial policy

financialaspects

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BBB AA AA AA- AA-

Date: Mar. 2010 Date: Jan. 2010

Chilean market

Date: Feb. 2010 Date: Jan. 2010 Date: Dec. 2006 BBB+

Ba1

Baa3 BBB+

International market

BBB

18 18 Dividends: sustained growth to shareholders

financialaspects

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Values calculated in dollars at the end of each period. (1)Source: Bloomberg

Payout ratio 50% 50% 60% 40%

93 207 227 274 433 1,234 2005 2006 2007 2008 2009 Total CAGR = 47%

35%

Dividends (US$ m) Market Cap (US$ m) (1)

12,831 13,954 9,428 10,393 10,072 8,322 2005 2006 2007 2008 2009 Mar-10 CAGR = 9%

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whereareweheadingto? Who is Endesa Chile? Operational aspects Financial aspects Where are we heading to? Conclusions

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Direct relation between GDP and electricity demand

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Real GDP vs. Electricity Demand Per capita

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Demand

21 21 Assuring supply of long-term demand

» Peru: 7.1% » Chile: 5.2% » Argentina: 4.3% » Brazil: 3.3% » Colombia: 3.4%

1998: base 100%

Electricity Demand (CAGR past 10 years) Electricity Demand (CAGR past 10 years)

Percentage (%)

 Endesa Chile is a long-term player in every market where it participates  There is still room for growth in the region  The electricity industry has to be ready to face the recovery of electricity demand  Regulations incentive investments to meet long-term electricity demand

Considerations

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Electricity Demand Growth

80.0 110.0 140.0 170.0 200.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Mar-10

Peru Chile Argentina Brazil Colombia

TTM

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22 22 Assuring supply of long-term demand

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100% 105% 110% 115% 120% 125% 2006 2010 2015 2020 2025 2030

In terms of population(1) In terms of consumption(2)

181 177 161 162 56 179 335 79 51 78 30 22 72 France Germany Spain United Kingdom China Japan United States Argentina Brazil Chile Colombia Peru World T

• tal

Central & South América Europe Asia North America

(1)Source: Energy Information Administration 2009; (2)Energy Information Administration, million BTU per capita

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23 23 Impact of the earthquake

 The impact on infrastructure, communications, and industries was important nationwide  Contraction of economic activity  Impact on electricity demand  Damages to our operating facilities was limited to Bocamina I power plant  98% of our installed generation capacity is available for the system  Our water dams located in the areas affected by the earthquake responded remarkably well.  The excellent quality of Chile’s engineering and the rigor of Endesa Chile’s work contributed to maintain the electricity generation in the country

juntadeaccionistasendesachile

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24 24 Future expectations of electricity sector

 Recovery of the economy in 2010  Gradual growth of electricity demand in the markets where we operate  Continue making our investments and

• perations profitable

 2010: flexible investment plan and costs according to economic context and electricity demand  Solid regulatory framework and efficient portfolio of assets and projects

juntadeaccionistasendesachile

whereareweheadingto?

25 25

75 100 125 150 175 200 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

SIC SING

Electricity demand growth in Chile: 2010-2020 *

 8,800 MW of new capacity during next 10 years.  3,000 MW are already under construction. CAGR SIC: 5.8% CAGR SING: 5.2%

* Source: April ‘10 Node Price Report of Chilean National Energy Commission (CNE) SIC: Central Interconnected System; SING: Northern Interconnected System

 New long-term prices from previous bidding processes started to apply for distribution companies  New prices are indexed to inflation and fuel prices. They will mark long-term energy prices  Locked price for blocks of energy through long-term contracts, between 10-15 years Starting in 2010 …

2009: base 100%

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Electricity Demand Projections

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Diesel 2% Coal 33% LNG 4% Hydro 47% Wind 9% Others 5%

26 26 Important contribution to growing demand

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Colombia: Cartagena +142 MW Peru: Ventanilla +457 MW Chile: San Isidro II (1st stage) +248 MW Palmucho +32 MW Canela I +18 MW Chile: San Isidro II (2nd stage) +105 MW Ojos de Agua +9 MW Colombia: Cartagena: +66 MW

Amounts are in MW.

Chile: San Isidro II +46 MW Quintero +257 MW Canela II: +60 MW Peru: Santa Rosa +200 MW

1.8 GW of new installed capacity in the past 5 years Close collaboration with authorities to develop new capacity Committed to Energy Efficiency policies and promotion of NCRE

whereareweheadingto?

51 594 399 186 563 1,793 2005 2006 2007 2008 2009 Total

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Quintero , thermal power plant, Chile

 Installed capacity: 257 MW  2 gas turbines (dual) open cycle  Start-up: Sept. 2009

Projects completed in 2009

Canela II, wind farm, Chile

 Installed capacity: 60 MW  40 wind generators  Start-up: Dec 2009

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28 28 Projects completed in 2009

Santa Rosa, thermal power plant, Peru

 Installed capacity: 200 MW  Gas turbine in open cycle  Start-up: Sept. 2009

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29 29

GNL, re-gasification plant, Chile

 Endesa Chile’s participation: 20%  LNG supplier and partner: BG Group  Start-up: Sept. 2009  Fast track commercial operation: Aug 2010  Total Capacity: 9.6 million m3/day

Projects completed in 2009

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30 30

Bocamina II, coal-steam, Chile

 Installed capacity: 370 MW  Fuel type: imported coal  Estimated start-up: June 2011

Projects under construction

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whereareweheadingto?

31 31 Projects under study

Neltume, hydroelectric run-of-the-river  Installed capacity: 490 MW Los Cóndores, hydro power plant  Installed capacity: 150 MW Piruquina, mini-hydro run-of-the-river  Installed capacity: 7,6 MW Choshuenco, hydro power plant  Installed capacity: 128 MW El Quimbo, hydro power plant  Installed capacity: 400 MW Punta Alcalde, coal- steam power plant  Installed capacity: 740 MW

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whereareweheadingto?

32 32 Projects under study

Aysén Hydroelectric Project, Chile

 Installed capacity: 2,750 MW  Endesa Chile’s participation: 51%  Takes advantage of water: natural resource, renewable and clean  CO2 emissions: Reduction of 16.2 million tons/year  1st half 2009: first set of answers to EIA completed 

• Jan. 2010: additional observations were

received; clarification responses in progress

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whereareweheadingto?

33 33

Index Who is Endesa Chile? Operational aspects Financial aspects Where are we heading? Conclusions

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34 34

conclusions

Asset Base  Large and Efficient portfolio of assets  Excellence in operations  Strongly committed to sustainability Conservative Policies  Commercial policy  Solid financial position and healthy balance sheet  Liquidity Know-how  Ability to develop our own projects  Know-how and vast experience  Demand and regulation

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Prepared to face upcoming challenges with efficient assets

35 35 Disclaimer

This presentation contains statements that constitute or may constitute statements about the future, as established in the United States Private Securities Litigation Reform Act of 1995. Such statements appear frequently in this presentation with statements referring to our intentions, beliefs and expectations, which include, but are not limited to, any statement with respect to: (1) our investment program, (2) trends that affect our financial condition or operating income, and (3) the effects of changes in the regulatory framework for the electricity industry in one or more of the countries in which we operate. As such statements are subject to risks and inaccuracies, the effective results may differ significantly with respect to those expressed or implied in such statements with a view to the future. Such statements should not be unduly relied upon as they only refer to the position on the date on which they were prepared. We assume no obligation to publicly report on changes that might be applied to the statements with a view to the future.

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36 36 Endesa Chile’s Investor Relations Team Contact us at:

ir@endesa.cl

Irene Aguiló Investor Relations Executive (56-2) 630 96 04 iaguilo@endesa.cl Jacqueline Michael Investor Relations Executive (56-2) 630 95 85 jmc@endesa.cl Denisse Labarca Abdala Head of Investor Relations (56-2) 630 96 03 denisse.labarca@endesa.cl

• M. Teresa Fuentealba

Investor Relations Executive (56-2) 630 95 06 mtfd@endesa.cl

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Susana Rey Müller Investor Relations Director (56-2) 630 96 06 susana.rey@endesa.cl Gloria Mora Investor Relations Assistant (56-2) 630 95 87 gaml@endesa.cl