Enersis Chile Generation & Distribution of Electricity - - PowerPoint PPT Presentation

Enersis Chile

Generation & Distribution of Electricity

As of March, 2016

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Enersis Chile

Generation & Distribution of Electricity

1Q 2016 Financial Results Investment Highlights Looking forward

Enersis Chile investment highlights

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Shareholders

As of March 31st, 2016 CHILE

Enersis Chile Chilectra Endesa Chile

99.1% 60.0%

Enel SpA

60.6%

ITALY CHILE CHILE

Distribution Business Generation Business

Organization & Shareholders Structure

61% 10% 5% 4% 6% 12% 2%

Enel SpA Citibank ADRs (Citibank N.A.) Brokers, Security companies, Mutual Funds Foreign Funds Chilean pension funds Others

Organization

4 6,025 GWh of energy sales 35% of market share 3 Solid customer base with 1.8 mm clients One of the lowest cash costs in the industry Leader in public lighting 2,475 GWh of hydroelectric generation 13% market share 2 Lowest level of energy losses in the country 6,351 MW of installed capacity (Hydro: 3,456 MW) 31% market share 1

#1

14,184 GWh of contracted energy 38% market share 4 Chilectra Chile Endesa Chile Enersis Chile

#1 #1

29 power plants in the SIC and SING

Enersis Chile investment highlights

Pure Chilean integrated player

1. Based on installed capacity 2. Based on total total system generation (SIC+SING). 3. Based on total energy sales in the system (SIC+SING). 4. Based on contracted energy, source: www.systep.cl

Generation Business Distribution Business

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Customer Base (Mn clients)

As of March 31st, 2016

Distribution

• Enersis Chile is the largest integrated energy private company in Chile
• In the past 4 years, we added 200 thousand new clients in the distribution business

Enersis Chile investment highlights

Outstanding indicators

Installed Capacity (MW)

As of March 31st, 2016

Generation

6,351 5,222 3,848 2,108

Enersis Chile Aesgener Colbún E.CL

1.79 1.77 0.55 0.38

Chilectra CGE Chilquinta SAESA

1 1 1

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Long term auctions for the regulated market facilitate expansion (15 – 30 years) Payment based on capacity, independent of technology:

• Income based on contributions during peak demand
• Recognition of dual generation for gas turbines

Monthly recalculation of regulated guaranteed pass through to the final customer Markets with audited or auctioned costs

Regulatory framework encourages stability and guarantees expansion

Enersis Chile investment highlights

Generation Distribution

Indefinite concessions Stable regulatory frameworks 1st set: 1984; # of revisions: 7 Attractive profitability metrics (pre-tax, real terms) 10% defined by law Tariffs are set using technical and objective criteria: New replacement value based on optimized network There are conflict resolution mechanisms in place to settle disputes effectively; “Expert Panel” solves disputes between the regulator and agents

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• Energy demand

growth is very stable, showing a growth average of 3.4% in 2015.

• Chile aims to be in the

group of developed countries.

• There is no

development without energy.

Source: CIA World Factbook and internal data as of 2015

High growth potential

Enersis Chile investment highlights

Electricity consumption in the world kWh/GDP (PPP) per capita

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Enersis Chile

Generation & Distribution of Electricity

1Q 2016 Financial Results Investment Highlights Looking forward

Expected annual growth of GDP (%)1 Energy Demand (%)

Market context in the 1Q 2016

Enersis Chile 1Q 2016 financial highlights

Average Spot Price (US$ /MWh) CLP vs US$

• 1. Expected GDP for 2016. Source: Latin America Concensus Forecast as of April 2016.

2.1% 1.8%

2015 2016*

151 76

1Q15 1Q16

624.7 701.4

1Q15 1Q16

9 2.9%

5.4%

0.6% Sales in SIC Generation Physical Sales Distribution Physical Sales

1Q15 1Q16

3,455 3,455 636 636 2,173 2,173 87 87

1Q15 1Q16

6,351 6,351 10

Installed capacity (GW) Net production (GWh) Number of customers (Th) Electricity Distributed (GWh) + 0.0% +7.0%

3,863 3,841

Hydro Coal Oil-Gas

Operating highlights

4.7 4.9 5.4

Enersis Chile 1Q 2016 financial highlights

+ 0.6% + 2.2%

4.8

NCRE

2,326 2,475 241 738 1,683 1,337 22 23

1Q15 1Q16

4,272 4,573

1,751 1,790

1Q15 1Q16

Generation sales (GWh) +5.4%

4.7 4.9 5.4 4.8

1Q15 1Q16

5,716 6,025

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Financial highlights (constant US$ mn1)

Enersis Chile 1Q 2016 financial highlights

1Q 2016 1Q 2015 Δ YoY 10.0% 54.9% 91.3% 178.0% 99.8% 383.4%

• 42.7%

107.8%

1. Comparisons between periods in the Income Statements are made using the average exchange rate for the period 701.43 CLP/USD, and for the Balance Sheet using the closing exchange rate 669.80 CLP/USD.

29.3% 13.9% 299.1% March 2016 319 114 85 66 9 2 79 3 30 53 Revenues Contribution Margin EBITDA Related Company Results Net Financial Income EBIT Taxes Group Net Income Gross Capex Attributable net income

Financial Statements reported to SVS, March only Financial Statements Proforma

Revenues Contribution Margin EBITDA Related Company Results Net Financial Income EBIT Taxes Group Net Income Gross Capex Net Debt - Dec 2015/2016 Attributable net income 898 356 283 263 3 242 (25) 53 1,258 163 816 230 148 95

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2 50 (17) 41 1,105 41 1,258 Net Debt – March 2016

41 163

1Q 15 1Q 16

1. Comparisons between periods in the Income Statements are made using the average exchange rate for the period 701.43 CLP/USD, and for the Balance Sheet using the closing exchange rate 669.80 CLP/USD.

148 283 1Q 15 1Q 16 816 898 1Q 15 1Q 16

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Revenues EBITDA Attributable Net Income and EPS

+ 10.0% +91.3%

Net Debt

1Q 2016 results (constant US$ mn1)

+299.1%

Enersis Chile 1Q 2016 financial highlights

+13.9%

2.32 CLP/Share 0.17 USD/ADR 0.58 CLP/Share 0.04 USD/ADR

1Q 15 1Q 16

EPS

1,105 1.258 2015 1Q 2016

1Q15 Distribution Generation 1Q16

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Group EBITDA evolution by business (constant US$ mn)

Enersis Chile 1Q 2016 financial highlights

+7% + 126% 283 37% 63% Dx Gx 79% 21% + 91.3% 148 Dx Gx

283 (20) 263 (0) 4 (25) 242 (79) 163

EBITDA D&A EBIT Financial Result Non Operating Results Income tax Group Net Income Minority Shareholders Attributable Net Income

1. Comparisons between periods in the Income Statements are made using the average exchange rate for the period 701.43 CLP/USD, and for the Balance Sheet using the closing exchange rate 669.80 CLP/USD. 2. Consider Depreciation, Amortization and Reversal of impairment profit.

14 (61.9%) +178.0% +99.8%

• 53.7%

+42.7% +91.3% +383.4% +753.7% +299.1%

From EBITDA to Group net income (constant US$ mn1)

Enersis Chile 1Q 2016 financial highlights

1Q 15 (US$ mn) Change

(53) 95 (35) 8 (17) 148 50 (9) 41

2

83% 17%

49% 51% 15

1. Gross of contributions and connections fees, accrued capex during 2016, including FX conversion effects.

Gross Capex1 (US$ mn)

By activity By business

Maintenance Generation Distribution Growth

• Los Cóndores will add 150 MW of installed capacity to the SIC.
• As of March 2016, the level of completion reached 29% with a total investment of US$166 mn.

Enersis Chile 1Q 2016 financial highlights

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+29.3%

53

+29.3%

1,105 1,258 226 231

2015 1Q 2016

Net Debt Cash

Gross and Net Debt (US$ mn)

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Gross Debt breakdown +11.9%

Gross and Net Debt

Enersis Chile 1Q 2016 financial highlights

International Bonds Local Bonds Leasing Credit lines 50%

1,489 1,331

37% 10% 3%

82 73

1Q15 1Q16

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Enersis Chile 1Q 2016 financial highlights

Cash Cost (US$ mn)

Cash Cost Fixed cost

• 12% decrease mostly driven by a reduction in fixed costs

112 99

1Q15 1Q16

• 11.6%

30 26

1Q15 1Q16

Maintenance Capex

+

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Enersis Chile

Generation & Distribution of Electricity

1Q 2016 Financial Results Investment Highlights Looking forward

0.1 0.2 0.6 0.5 FY 15 Target 16 0.1 0.3 1.0 1.2 FY 15 Target 16

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Versus Targets 2016

EBITDA (US$ bn) Net Income (US$ bn)

• Current results in line with our targets for 2016

1Q15 1Q16 1Q15 1Q16

Looking forward

87% 72% 76% 62% 55% 55% 13% 28% 24% 37% 44% 44% 1% 1% 1% 1995 2000 2005 2010 2016 Under construction

• A well diversified generation matrix adding all types of generation technologies

(Coal, LNG and NCRE), providing a better position to cope with the hydrologic risk

• Enersis Chile has more than doubled its capacity in the last 20 years

Los Cóndores 150 MW GasAtacama 781 MW1

2,513 4,035 4,477 5,611 6,351 6,501

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Evolution of Enersis Chile’s installed capacity

Looking forward

Hydro

Thermal

NCRE

• 1. Capacity added in 2014.

General information

• Run of the river hydro power plant, located in San Clemente,

Maule Region

• Installed capacity: 150 MW .
• Estimated generation: 600 GWh/year.
• Estimated load factor: 46%.
• Total CAPEX: US$ 662 million.

Permits

• Gx: EIA approved in April 2008, DIA (Environmental Impact Statement)

approved in November 2011.

• Tx: approved in May 2012.
• POH approved in November 2013. Maule’s irrigator claim was presented

in January 2014 and a agreement was reached in February 2014. Current Status

• Level of completion reached 29%
• Total investment of US$166 mn as of March, 2016

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Looking forward

Los Cóndores, project under construction

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Enersis Chile

Generation & Distribution of Electricity

Strong operating cash flow generation Improved performance driven by generation business 1Q16 results aligned with 2016 targets Cost reduction ahead of efficiency targets

Susana Rey, Head of IR (56) 22630 9606 susana.rey@enel.com Enersis Chile Catalina Gonzalez, Head of IR (56) 22630 9603 catalina.gonzalez@enel.com Endesa Chile Francisco Basauri, IR Analyst (56) 22630 9585 francisco.basauri@enel.com Endesa Chile Guillermo Berguecio, IR Analyst (56) 22630 9506 guillermo.berguecio@enel.com Endesa Chile

Enersis Chile

IR Team

ir.enersis@enel.com

For further information, visit our IR site at:

www.enersischile.cl

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Exhibits

US$ mn1 1Q 20152 1Q 20162 Change3 Revenues

816 898

10% Costs

(586) (542)

• 8%

Contribution Margin

230 356

55% EBITDA

148 283

91% EBIT

95 263

178% Net Financial Expenses

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• 99.8%

Related Company Results

2 3

108% Taxes

(17) (25)

43% Net Income

50 242

383% Attributable to shareholders of Enersis Chile

50 192

284%

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Financial Highlights

Improving results in Enersis Chile

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Financial Highlights

Results in the Generation business

US$ mn1 1Q 20152 1Q 20162 Change3 Revenues

527 592

12% Costs

(383) (329)

• 14%

Contribution Margin

144 263

83% EBITDA

99 224

126% EBIT

57 178

211% Net Financial Expenses

• 40

1

• 103%

Related Company Results

2 3

109% Taxes

(7) (19)

165% Net Income

124 277

124% Attributable to shareholders of Endesa Chile

56 218

290%

287 373 433 65 86 77 5 48 36

1Q 2014 1Q 2015 1Q 2016

Physical Sales 1Q16 Gwh Change1 REGULATED 4,850 11% UNREGULATED 882

• 18%

SPOT 293 5% TOTAL 6,025 5%

Regulated Companies Spot Unregulated Customers

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Regulated Customers Spot Unregulated Customers

4 8 12 16 20 24 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Futures Customers Regulated customers Free customers Optimal contracts As of September 2015

Balanced commercial policy in Generation leading to revenue stability

Physical sales: 6,025 GWh Historical revenues by type of customer (US$ mn) Physical sales 1Q 2016 Chile – Contracted energy (Twh)

Enersis Chile investment highlights

80% 15% 5%

507 357 557

1 Compared with 1Q15

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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:

268 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: 9 MW

Installed Capacity: 6,351 MW Market Share*: 31% Total Generation: 4,573 GWh

*Based on installed capacity

Leading player in generation business

Enersis Chile

Net generation GWh Change1 HYDRO 2,460 7% COAL 738 206% OIL-GAS 1,336 (21%) NCRE 39 (2%) Total 4,573 7%

Net Generation Gx EBITDA (US$ mn)

99 224

1Q15 1Q16 +126%

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TWh Hydro Oil-Gas Coal NCRE Total

Chile 2.5 1.3 0.7 0.04 4.6

Operating Exhibits 1Q 2016

GW Hydro Oil-Gas Coal NCRE Total

Chile 3.5 2.2 0.6 0.09 6.4

Net installed capacity (GW) Total net production (TWh)

US$ mn1 1Q 20152 1Q 20162 Change3 Revenues

424 464

9% Costs

(333) (373)

12% Contribution Margin

91 90

• 1%

EBITDA

57 62

7% EBIT

46 49

7% Net Financial Expenses

2 3

61% Related Company Results

• 32%

Taxes

(11) (5)

• 56%

Net Income

47 59

27% Attributable to shareholders of Chilectra

47 59

27%

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Financial Highlights

Results in the Distribution business

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Evolution of profitability in the regulated business

Reduction of losses

Tools for value creation

Continuous efficiency plans to maintain solid operating standards Optimizing investments and increasing useful life Developing unregulated new products and services Synergies between the different companies of the Group

Regulatory profitability for an efficient company

Tariff revision #0 Tariff revision #1 Return % 1 2 3 4 1 2 3

Regulated returns are re-established and there is a transfer of efficiencies to clients

Returns increase and partial transfer of efficiencies

Year

Enersis Chile investment highlights

Schedule for distribution tariff revisions is clear and well laid out for the following years

Chilectra

2016 2020

Periodic tariff revision processes

57 62

1Q 2015 1Q 2016

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• Controlling energy losses has been

successful during the last several years, increasing our margins

• Telemetering
• Client inspections (Business Intelligence)

+7%

Proven experience in controlling energy losses

Enersis Chile investment highlights

Energy Losses EBITDA in Distribution US$ mn How have we done it?

5,4% 5,0% 1Q 2015 1Q 2016

1Q 2015 1Q 2016

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Disclaimer

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 Enersis Chile and its management with respect to, among other things: (1) Enersis Chile’ business plans; (2) Enersis Chile’ cost-reduction plans; (3) trends affecting Enersis 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 Enersis 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 Enersis Chile’ Annual Report on Form 20-F. Readers are cautioned not to place undue reliance

• n those forward-looking statements, which state only as of their dates. Enersis Chile undertakes no obligation to release

publicly the result of any revisions to these forward-looking statements.