ENGIE ENERGÍA CHILE S.A. Presentation to investors Full year 2017 Results
AGENDA Snapshots Key messages Looking forward 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 21m customers in Europe power producer infrastructures €24bn regulated asset Global leader in energy 101 GW (1) installed base in France solutions for cities +250 distribution heating & 12bn m 3 storage capacity >80% low CO 2 cooling networks worldwide 23m individual and Expertise in power 25% renewables (2) transmission & distribution professional contracts Capacity breakdown EBITDA gas infrastructures EBITDA by type of business 88% low CO 2 0.3 5% 0.2 7% 0.6 0.4 6% 101 GW (1 ) 0.9 €3.8bn (4) €1.9bn (4) 2.9 57% 25% 0.4 Natural gas Nuclear Other (3) GRDF & GRTgaz Storengy B2B B2T B2C Elengy Other EU & International Renewables (2) Coal B2B: Business to Business B2T: Business to Territories (1) At 31/12/2016, at 100%, pro forma announced disposals & closures (US thermal assets, Polaniec, Hazelwood), excluding decentralized power generation B2C: Business to Customers (2) Excl. pumped storage for hydro (3) Incl. Pumped storage for hydro (4) 2016 EBITDA Engie Energía Chile - Presentation to Investors – 4Q 2017 3
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; 11.2 years remaining generation company in starting 2018 => 43% average 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 21.4% 52.8% Engie Energía Prepared to provide energy Good delivery in growth AFPs (Chilean Chile pension funds) solutions to its customers strategy implementation 25.9% Engie Energía Chile - Presentation to Investors – 4Q 2017 4
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 P. Camarones (6MW) Diesel Arica (14MW) 2,157 kms HV 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 Engie Energía Chile - Presentation to Investors – 4Q 2017 5
SNAPSHOT: CHILEAN ELECTRICITY INDUSTRY TWO MAIN GRIDS RECENTLY INTERCONNECTED Generation Market Share Clients 12M17 (GWh) (% installed capacity Dec-17) Renew. Enel Regulated 13% EECL 27% 58% Diesel 8% Hydro 4% SISTEMA ELÉCTRICO 29% Colbún 14% Gas 74,166 GWh NACIONAL (SEN) 10,363 MW 23,729 MW 16% AES Gener Tamakaya 17% (SIC + SING) 4% Unregulated 42% Coal Other 38% 30% Diesel Regulated Renew. 1% Gas Other 11% 11% Installed capacity EECL 33% 10% 17% SING Tamakaya 23,729 MW 9% 2,775 MW 5,885 MW 19,251 GWh 12% y/y Enel Unregulated AES Gener 16% Coal 89% 24% Peak demand 78% Diesel 10,363 MW Renew. Unregulated Colbún 5% 13% SIC 30% 18% 1% y/y Other Santiago Gas 36% 18% 7,588 MW 54,915 GWh 17,844 MW AES Gener Energy generation Hydro 15% Regulated 40% 70% Coal 74,166 GWh 24% Enel 30% 0% y/y Sources: CNE, CEN, Asociación de Generadoras 6 Engie Energía Chile - Presentation to Investors – 4Q 2017
SNAPSHOTS: RECENT EVENTS RECENT EVENTS INDUSTRY COMPANY • • The new 15-year PPA with The SIC-SING interconnection SING SEN distribution companies started on began operations on November “Sistema 24, 2017, giving birth to the SEN January 1, 2018, for up to 2 TWh Eléctrico in 2018 and up to 5 TWh starting Nacional” • 2019 The TEN project , a key part of the interconnection, was ready ahead • Bridge PPAs with generation of its legal deadline and within companies have been signed to budget SIC supply ~60% of demand under the • above PPA until the southern A new coordination and dispatch section of the interconnection is center, the CEN (“Coordinador operating in full Eléctrico Nacional” ) took office in January, 2017, in replacement of • Puerto Andino , our new port in the CDEC SIC and CDEC SING Mejillones, successfully unloaded • its first coal shipment in December The interconnection will reduce 2017 spot price volatility, sensitivity to hydrologic conditions, and will • New debt for US$100 million was allow renewable capacity to reach taken in 2017, with a 33 bps demand nationwide decrease in weighted average cost of debt Engie Energía Chile - Presentation to Investors – 4Q 2017 7
AGENDA Snapshots Key messages Looking forward Financial update Addenda 8 Engie Energía Chile - Presentation to Investors – 4Q 2017
KEY MESSAGES Strong delivery on all fronts: results in line with guidance Growth strategy and construction well on track: Projects on schedule and within budget. TEN interconnection in operation Robust capital structure: Smooth execution of financial plan Dynamic energy transition to secure future growth 9 Engie Energía Chile - Presentation to Investors – 4Q 2017
STRONG DELIVERY ON ALL FRONTS: RESULTS IN LINE WITH GUIDANCE RESULTS IN LINE WITH GUIDANCE + Operating cost savings CO 2 taxes, emission-reduction costs, lower physical sales 2016 2017 Variation Operating Revenues (US$ million) 967.4 1,054.1 +9% 284.8 EBITDA (US$ million) 276.1 -3% EBITDA margin (%) 29.4% 26.2% -3.2 pp Net income (US$ million) 254.8 101.4 -60% Net income-recurring (US$ million) 83.4 87.0 +4% Net debt (US$ million) 470.0 770.5 +64% Spot energy purchases (GWh) 1,697 3,028 +78% Physical energy sales (GWh) 9,492 8,825 -7% Net Income impacted by non recurring items in 2016 Increase in net debt related to expansion CAPEX Engie Energía Chile - Presentation to Investors – 4Q 2017 10
STRONG DELIVERY ON ALL FRONTS: RESULTS IN LINE WITH GUIDANCE RESULTS DRIVEN BY LONG-TERM CONTRACTS WITH STRONG CLIENTS Sound contract portfolio with average remaining life A GROWTH of 11.2 years DRIVING PPA • 2018: Up to 2,016 GWh 600 (230 MW-avg.) ● Regulated contracts • 2019-2032 : Up to 5,040 ● Unregulated contracts GWh per year (575 MW-avg.) 500 • Monomic price (Jan-Mar Distribution Average demand (MW) 2018): US$126/MWh Companies SIC 400 Codelco 300 Clients’ international credit ratings : • Codelco: A+ AMSA Emel • Freeport-MM (El Abra ): BB- 200 • Antofagasta PLC (AMSA + Zaldívar): NR Glencore • Glencore (Lomas Bayas, Alto Norte): BBB El Abra Other 100 Other • SING EMEL: AA-(cl) Other SIC 0 Source: EECL 0 2 4 6 8 10 12 14 16 18 *Internal projections used for contract demand, Remaining life of contracts (years) according to history and market intelligence. Engie Energía Chile - Presentation to Investors – 4Q 2017 11
STRONG DELIVERY ON ALL FRONTS: RESULTS IN LINE WITH GUIDANCE LONG-TERM CONTRACTS: THE BASIS FOR STABLE SALES VOLUMES AND PRICES ENERGY SALES AND PRICES Energy sales Prices US$/MWh GWh 2,500 150 2,000 100 1,500 1,000 50 500 - - 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Unregulated Regulated Spot Energy+Capacity Price->Unregulated Energy+Capacity Price->Regulated Spot Energy Price Energy prices have moved in line with fuel prices Engie Energía Chile - Presentation to Investors – 4Q 2017 12
STRONG DELIVERY ON ALL FRONTS: RESULTS IN LINE WITH GUIDANCE CLIENTS’ NEEDS SUPPLIED WITH OWN GENERATION AND SPOT PURCHASES, WELL HEDGED BY OUR OWN INSTALLED CAPACITY Renewables 1% Diesel 10% • Increasing spot purchases due to new coal, gas and Coal 57% renewable efficient capacity additions in the grid Installed • capacity Spot prices impacted by coal price trends Gas 32% 1,971 MW • Higher fuel prices, CO 2 taxes and emission-reduction (Dec-17) costs have put pressure on average supply cost ENERGY SOURCES AND AVERAGE SUPPLY COST US$/MWh GWh 150 2,500 2,000 100 1,500 1,000 50 500 - - 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Coal Gas Diesel Renewable Spot Purchases Average Supply Cost Engie Energía Chile - Presentation to Investors – 4Q 2017 13
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