ENGIE ENERGÍA CHILE S.A. Presentation to investors 1Q18 Results
AGENDA Snapshots Key messages Financial update Addenda 2 Engie Energía Chile - Presentation to Investors – 4Q 2017
SNAPSHOT: ENGIE S.A. ENGIE: A GLOBAL ENERGY PLAYER GLOBAL LOW CO 2 POWER CUSTOMER GENERATION NETWORKS SOLUTIONS World leading independent European leader in gas 24m customers in Europe power producer infrastructures € 27bn (3) regulated asset Global leader in energy 103 GW (1) installed base in France solutions for cities +250 distribution heating & 12bn m 3 storage capacity ~90% low CO 2 cooling networks worldwide 23m individual and Expertise in power 26% renewables (2) transmission & distribution professional contracts Capacity breakdown EBITDA gas infrastructures EBITDA by type of business 89% low CO 2 5% 0.4 0.7 7% 6% €2.3bn (4) €3.8bn (4) 103 GW (1 ) 3.4 1.1 56% 26% 0.5 Natural gas Nuclear Other France B2B Renewables (2) Coal B2T B2C Other EU & International B2B: Business to Business B2T: Business to Territories (1) At 31/12/2017, at 100% (3) Incl. Storengy in France, regulated as from 01/01/2018 (2) Incl. pumped storage for hydro (3%) (4) 2017 EBITDA B2C: Business to Customers Engie Energía Chile - Presentation to Investors – 1Q 2018 3
SNAPSHOT: CHILEAN ELECTRICITY INDUSTRY TWO MAIN GRIDS RECENTLY INTERCONNECTED Generation Market Share Clients 1Q18 (GWh) (% installed capacity Mar-18) Renew. Enel Regulated 15% EECL 27% 58% 8% SISTEMA ELÉCTRICO Hydro Colbún Gas 39% 14% 16% NACIONAL (SEN) 10,914 MW 19,087 GWh 23,737 MW AES Gener Tamakaya 17% (SIC + SING) 4% Unregulated 42% Other Coal 30% 30% Diesel Regulated 1% Renew. Other 11% Gas 14% Installed capacity 16% EECL 34% 17% SING Tamakaya 23,737 MW 9% 2,821 MW 4,910 GWh 5,777 MW 10% y/y Enel Unregulated 17% AES Gener Coal 89% 24% Peak demand 68% 10,914 MW Unregulated Renew. Colbún Gas SIC 30% 15% 18% 1% y/y Other 16% Santiago 36% 8,093 MW 14,177 GWh 17,960 MW AES Gener Energy generation 15% Regulated Hydro Coal 70% 39% 30% 19,087 GWh Enel 30% 2% y/y Sources: CNE, CEN, Asociación de Generadoras 6 Engie Energía Chile - Presentation to Investors – 1Q 2018
SNAPSHOT ENGIE ENERGÍA CHILE EECL: A RELEVANT PLAYER IN THE CHILEAN POWER INDUSTRY RELEVANT PLAYER IN THE ENERGY CONTRACTED GROWTH UNDERWAY BUSINESS INDUSTRY Leader in northern mining New 15-yr regulated PPA Capacity contracted under region, 4 th largest electricity w/distribution companies long-term sales agreements; 13 years remaining average generation company in starting 2018 => 43% life Chile contracted physical sales growth by 2019 Strong counterparties ~2GW gross generation capacity; ~0.3GW under Unregulated: mining 50%-owned TEN ~US$ 0.9 construction companies; bn transmission project Regulated: distribution began operations in 4Q17 3 rd largest transmission companies company ~US$ 1 bn new power generation capacity + port Strong sponsorship Seaport infrastructure, gas to start operations in 3Q18 pipeline Float 21.8% 52.8% Engie Energía Prepared to provide energy Good delivery in growth AFPs (Chilean Chile pension funds) solutions to its customers strategy implementation 25.5% Engie Energía Chile - Presentation to Investors – 1Q 2018 5
SNAPSHOT: ENGIE ENERGÍA CHILE’S ASSETS A DIVERSIFIED ASSET BASE TO MEET OUR CLIENTS’ ENERGY NEEDS Technology Coal Diesel/FO Chapiquiña (10MW) 1,971 MW (*) in Natural gas operation & 375 MW El Aguila I (2MW) Renewables in construction Pampa Camarones (6MW) Diesel Arica (14MW) 2,293 kms HV + MV Diesel Iquique (43MW) transmission lines & 50% TE Tocopilla (877MW) Collahuasi share in TEN 600 km, 500 kV project El Abra Tocopilla port Chuquicamata Mining Operations C. Tamaya (104MW) Gaby 2 seaports TE Mejillones (560MW) Escondida Gasoducto Norandino Gas pipelines & CT Andina (177MW) Chile - Argentina (Salta) Long term LNG supply agreements CT Hornitos (177MW) 50% share in TEN transmission project (*) EECL requested the CNE to authorize the disconnection of units 12 and 13 in Tocopilla, with combined gross capacity of 170 MW. Engie Energía Chile - Presentation to Investors – 1Q 2018 6
SNAPSHOT: EECL IN 2018 2018: THE BEGINNING OF A NEW ERA NEW PPA: NEW POWER INTERCONNECTION REVENUE & EBITDA SUPPLY GROWTH Contracted revenue growth TEN : 600-km, 500 kV, IEM + Puerto Andino ~US$0.9bn , transmission ~8,200 GWh p.a. in 2017 • ~US$1 bn investment project • ~11,700 GWh p.a. in 2019 including port On schedule, within budget, More balanced portfolio In commissioning, on budget (Unregulated/regulated) operating since 24-Nov-17 IEM + Port COD: 3Q18 77%/23% in 2017 • Regulated & contracted IEM: 375 MWe gross • 52%/48% in 2019 revenue; ~US$80 million capacity EBITDA p.a. Expected EBITDA growth +2 LNG cargoes – 2018 (>80% in 2 years) +1 LNG cargo – 2019 TEN: 50/50 Joint Venture 80% project financed 1-year bridge contracts with Clients’ Sales (GWh) generation companies to meet new PPA Red EECL 2017 2018 2019 Eléctrica 50% Unregulated Regulated 50% Engie Energía Chile - Presentation to Investors – 1Q 2018 7
AGENDA Snapshots Key messages Financial update Addenda 8 Engie Energía Chile - Presentation to Investors – 1Q 2018
KEY MESSAGES Results in line with guidance Mastering the growth achieved Building our future together with our clients PPA renegotiation, decarbonization & life extension Paving the way for our energy transformation plan Development focused on replacing coal with renewable capacity Robust capital structure Ample room to finance energy transformation plan 9 Engie Energía Chile - Presentation to Investors – 1Q 2018
KEY MESSAGES RECENT EVENTS INDUSTRY COMPANY SING SEN • • SIC-SING interconnection: In Amendments to the Codelco and “Sistema operations since November 24, 2017, Glencore PPAs signed on April 2: tariff Eléctrico giving birth to the SEN. The TEN decrease, full indexation to CPI starting Nacional” project was ready ahead of schedule 2021, and PPA life extension and within budget • Authorization to disconnect U12 & U13 • Government and Generation coal units (combined 170 MW) was SIC Companies’ agreement to phase out requested to the CNE coal generation • The new 15-year PPA with distribution • New government took office on March companies started in 2018 (up to 2 11, 2018: Sebastián Piñera, President; TWh), stepping up to 5 TWh in 2019 Susana Jiménez, Minister of Energy; • Ricardo Irarrázabal, Subsecretary of Bridge PPAs with generation Energy companies were signed to supply ~60% of demand under the above PPA • National transmission project bids • launched by the CEN: 6 companies Puerto Andino and IEM are in their presented offers for an aggregate commissioning phase US$200 million Engie Energía Chile - Presentation to Investors – 1Q 2018 10
RESULTS IN LINE WITH GUIDANCE: MASTERING THE GROWTH ACHIEVED 1Q18 RESULTS IN LINE WITH GUIDANCE • EBITDA increased 39% mainly due to the new PPA with distribution companies • Net income almost doubled due to expanded operations 1Q17 1Q18 Variation Operating Revenues (US$ million) 258.8 301.8 +17% 66.0 EBITDA (US$ million) 91.7 +39% EBITDA margin (%) 25.5% 30.4% +4.9 pp Net income (US$ million) 19.7 39.2 +100% Net income-recurring (US$ million) 19.7 39.2 +100% Net debt (US$ million) 770.5 (*) 784.8 +2% Spot energy purchases (GWh) 821 929 +13% Energy purchases - Bridge (GWh) 0 215 n.a. Physical energy sales (GWh) 2,164 2,408 +11% Net Income impacted by non recurring items in 2016 Increase in net debt related to expansion CAPEX (*) Net debt as of 12/31/2017 Engie Energía Chile - Presentation to Investors – 1Q 2018 11
RESULTS IN LINE WITH GUIDANCE: MASTERING THE GROWTH ACHIEVED DEMAND SUPPLIED WITH OWN GENERATION, SPOT PURCHASES AND BRIDGE CONTRACTS US$/MWh 140 Average monomic price US$116/MWh 120 U12 & U13 coal plants : 6% of 1Q18 power supply. 100 Authorization to close down Diesel requested on 4-Apr-18. Average fuel & 80 electricity purchase cost: US$63/MWh 60 40 CTM3 U16 U15 U14 U13 U12 Bridge Spot purchases CTH CTA CTM1 CTM2 contracts 20 Firm capacity 0 overcosts ToP Regas LNG Diesel Renewables Bridge 215 GWh Coal 180 GWh Coal 445 GWh Spot 929 GWh Coal 431 GWh 336 GWh 2 GWh 20 GWh Total energy available for sale before transmission losses 1Q18 = 2,558 GWh Average realized monomic price, spot purchase costs and average cost per MWh based on EECL’s accounting records and physical sales per EECL data. Average fuel & electricity purchase cost per MWh sold includes the LNG regasification cost, green taxes, firm capacity, self consumption & transmission losses Net system over-costs and ancillary service costs averaged US$0.1 per each MWh withdrawn by EECL to supply demand under its PPAs. Engie Energía Chile - Presentation to Investors – 1Q 2018 12
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