ENGIE ENERGÍA CHILE S.A. Presentation to investors 1H18 Results
AGENDA Snapshots Key messages Financial update Addenda 2 Engie Energía Chile - Presentation to Investors – 1H 2018
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 – 1H 2018 3
SNAPSHOT: CHILEAN ELECTRICITY INDUSTRY TWO MAIN GRIDS RECENTLY INTERCONNECTED Generation Market Share Clients 1H18 (GWh) (% installed capacity Jun-18) Renew. Enel Regulated 15% EECL 27% 58% Hydro 8% 26% SISTEMA ELÉCTRICO Colbún Gas 14% NACIONAL (SEN) 18% 9,751 MW 38,102 GWh 23,931 MW AES Gener Tamakaya 17% (SIC + SING) 2% Unregulated 42% Other Coal 32% 40% Diesel Regulated 0% Renew. Other 11% Gas 13% Installed capacity 16% EECL 34% 18% SING Tamakaya 23,931 MW 9% 2,370 MW 9,819 GWh 5,777 MW +3% y/y Enel Unregulated 17% AES Gener 89% Coal 24% Peak demand 69% 9,751 MW Unregulated Renew. Colbún 30% SIC 16% Gas 18% 2% y/y Other Santiago 18% 37% 7,710 MW 28,267 GWh 18,154 MW AES Gener Energy generation Regulated 15% Hydro 70% Coal 36% 38,102 GWh 30% Enel 4% y/y 30% Sources: CNE, CEN, Systep 4 Engie Energía Chile - Presentation to Investors – 1H 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 4Q18 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 – 1H 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% Collahuasi TE Tocopilla (877MW) 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 (*) The CNE authorized EECL to disconnect units 12 and 13 in Tocopilla (170MW combined gross capacity) as early as April 2019, subject to the completion of the Interchile transmission project Engie Energía Chile - Presentation to Investors – 1H 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 Port: In operations (Unregulated/regulated) operating since 24-Nov-17 IEM: on commissioning COD: 77%/23% in 2017 • 4Q18 Regulated & contracted • 52%/48% in 2019 revenue; ~US$80 million IEM: 375 MWe gross EBITDA p.a. capacity Expected EBITDA growth (>80% in 2 years) +2 LNG cargoes – 2018 TEN: 50/50 Joint Venture 80% project financed +1 LNG cargo – 2019 Clients’ Sales (GWh) 1-year bridge contracts with generation companies to meet new PPA Red EECL 2017 2018 2019 Eléctrica 50% Unregulated Regulated 50% Engie Energía Chile - Presentation to Investors – 1H 2018 7
AGENDA Snapshots Key messages Financial update Addenda 8 Engie Energía Chile - Presentation to Investors – 1H 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 – 1H 2018
KEY MESSAGES RECENT EVENTS INDUSTRY COMPANY • • Amendments to the Codelco and SIC-SING interconnection: In operations since November 24, 2017, Glencore PPAs signed on April 2: tariff SING SEN giving birth to the SEN. The TEN decrease, full indexation to CPI starting “Sistema 2021, and PPA life extension project was ready ahead of schedule Eléctrico and within budget Nacional” • Authorization to disconnect U12 & U13 • coal units (combined 170 MW) was Government and Generation granted by the CNE Companies’ agreement to phase out coal generation • SIC The new 15-year PPA with distribution • companies started in 2018 (up to 2 National transmission project bids: TWh), stepping up to 5 TWh in 2019 The CEN conducted public auctions to award expansion and new projects • under the Annual National Bridge PPAs with generation Transmission Expansion Plan companies were signed to supply ~60% (D.E.422/2017-Ministry of Energy): 4 of demand under the above PPA companies were awarded New Projects • with aggregate referential investment Puerto Andino : 821k tons of fuel / 12 value of US$300 million, 13% of which shipments have been unloaded, were awarded to EECL. including 1 Capesize carrier • • “ Ruta Energética ”: In May the IEM: on commissioning phase; COD government’s launched its energy 4Q18 agenda for the 2018-2022 period Engie Energía Chile - Presentation to Investors – 1H 2018 10
RESULTS IN LINE WITH GUIDANCE: MASTERING THE GROWTH ACHIEVED 1H18 RESULTS IN LINE WITH GUIDANCE • EBITDA increased 33% mainly due to the new PPA with distribution companies • Net income impacted by non-recurring asset impairments 1H17 1H18 Variation Operating Revenues (US$ million) 530.4 603.4 +14% 140.4 EBITDA (US$ million) 186.7 +33% EBITDA margin (%) 26.5% 30.9% +4.5 pp Net income (US$ million) 51.2 35.2 -31% Net income-recurring (US$ million) 43.7 83.6 +91% Net debt (US$ million) 770.5 (*) 829.9 +8% Spot energy purchases (GWh) 1,663 1,871 +13% Energy purchases - Bridge (GWh) 0 419 n.a. Physical energy sales (GWh) 4,357 4,838 +11% Net debt increased due to (i) expansion CAPEX financing and (ii) a ~US$60 million long-term tolling agreement with TEN accounted for as a financial lease. (*) Net debt as of 12/31/2017 Engie Energía Chile - Presentation to Investors – 1H 2018 11
RESULTS IN LINE WITH GUIDANCE: MASTERING THE GROWTH ACHIEVED DEMAND SUPPLIED WITH OWN GENERATION, SPOT PURCHASES AND BRIDGE CONTRACTS US$/MWh 140 Average monomic price US$116/MWh 120 U12 & U13 coal plants : 4% of 1H18 power supply. 100 Authorization to close down Diesel by Apr-19. Average fuel & 80 electricity purchase cost: US$65/MWh 60 40 U15 U14 U16 CTM3 U13 U12 Bridge Spot purchases CTA CTH CTM1 CTM2 contracts 20 Firm capacity 0 overcosts ToP Regas Bridge LNG Coal Diesel Renewables Coal Coal 1,346 GWh Spot 1,871 GWh 419 GWh 738 GWh 185 GWh 5 GWh 35 GWh 429 GWh Total energy available for sale before transmission losses 1H18 = 5,005 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 – 1H 2018 12
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