ENGIE ENERGÍA CHILE S.A. Presentation to investors 1Q19
AGENDA Snapshots Key messages Financial update Addenda 2 Engie Energía Chile - Presentation to Investors – 1Q 2019
SNAPSHOT: ENGIE S.A. ENGIE’S AMBITION: TO LEAD THE ZERO -CARBON TRANSITION Supporting our clients in their zero BUSINESS LINE – CLIENT SOLUTIONS carbon roadmap Focus on 20 countries, 30 urban areas, BUSINESS LINE – RENEWABLES 500 global clients Decentralized organization: BUSINESS LINE – NETWORKS 24 business units; 4 business lines CAPEX 2019-2021: BUSINESS LINE – THERMAL € 12 bn & 9 GW in renewables Capacity breakdown Revenue breakdown EBITDA breakdown 88% low CO 2 0.2 0.2 4.5 5% 7% 7.0 37.1 5.7 1.1 6% € 60.6 bn (3) € 9.2 bn (3) 104 GW (1 ) 4.0 55% 1.8 4.6 27% 3.4 0.2 Natural gas Nuclear Other Europe North America Latin America Europe North America Latin America Renewables (2) Coal Africa & Asia GEM Other Africa & Asia GEM Other (1) At 12/31/2018, at 100% (2) Including pump storage for hydro (3) 2018 Consolidated Engie Energía Chile - Presentation to Investors – 1Q 2019 3
SNAPSHOT: CHILEAN ELECTRICITY INDUSTRY SISTEMA ELÉCTRICO NACIONAL (SEN) TWO MAIN GRIDS RECENTLY INTERCONNECTED Gross installed Generation capacity (MW) Mar -2019 (GWh) Solar Hydro 10% 28% Wind Wind 5% Hydro 8% 27% Solar 8% 19,150 GWh 24,854 MW SEN 3,300 Km Thermal Thermal 59% 55% Market Share Clients (% installed capacity mar-19) Enel Regulated 26% Engie 52% 8% Colbún 13% 24,854 MW 10,523 MW AES Gener 14% Tamakaya 2% Unregulated 48% Other 35% Source: CNE 4 Engie Energía Chile - Presentation to Investors – 1Q 2019
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; 12 years remaining average generation company in contracted physical sales life Chile growth in 2018 & 2019 Strong counterparties ~1.9GW gross generation 50%-owned TEN ~US$ 0.8 capacity; ~0.3GW in Unregulated: mining and bn transmission project commissioning phase industrial companies; began operations in 4Q17 Regulated: distribution 3 rd largest transmission companies ~US$ 1 bn new power company generation capacity + port operating in test mode; COD Strong sponsorship Seaport infrastructure, gas scheduled 2Q19 pipeline Float 24.55% 52.76% Engie Energía Prepared to provide energy Good delivery in growth AFPs (Chilean Chile pension funds) solutions to its customers strategy implementation 22.69% Engie Energía Chile - Presentation to Investors – 1Q 2019 5
SNAPSHOT: ENGIE ENERGÍA CHILE’S ASSETS A DIVERSIFIED ASSET BASE TO MEET OUR CLIENTS’ ENERGY NEEDS Technology Chapiquiña (10MW) Coal Diesel/Fuel oil 1,928 MW (*) El Aguila I (2MW) Natural gas + 375 MW in Pampa Camarones (6MW) Renewables commissioning Baterías - Arica (2MW) Collahuasi Diesel Arica (14MW) El Abra 2,293 kms HV + MV Chuquicamata TE Tocopilla (877MW) transmission lines. Tocopilla port 50% share in TEN Gaby Mining Operations C. Tamaya (104MW) TE Mejillones (560MW) TEN CT Andina (177MW) Escondida 2 seaports: Gasoducto Norandino Tocopilla CT Hornitos (177MW) Chile - Argentina (Salta) Andino (Mejillones) IEM (375MW) (test mode) Los Loros (54MW) Gas pipelines & L.T. LNG supply agreements Andacollo (2MW) (*) The CNE authorized EECL to disconnect Central Diesel Iquique (43MW). The CNE also 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. Los Loros & Andacollo were acquired in April 2019 . Engie Energía Chile - Presentation to Investors – 1Q 2019 6
SNAPSHOT: EECL IN 2019 2019: THE BEGINNING OF OUR RECONVERSION NEW PPA: NEW POWER INTERCONNECTION REVENUE & EBITDA SUPPLY GROWTH Contracted revenue growth TEN : 600-km, 500 kV, IEM + Puerto Andino ~US$0.8bn , transmission ~8,200 GWh p.a. in 2017 • ~US$1 bn investment company • ~12,000 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 77%/23% in 2017 • COD: 2Q19 Regulated & contracted • 55%/45% in 2019 revenue; ~US$80 million IEM: 375 MWe gross EBITDA p.a. Expected EBITDA growth capacity (>65% 2019 vs. 2017) +2 LNG cargoes – 2018 TEN: 50/50 Joint Venture 80% project financed +1 LNG cargo – 2019 Clients’ Sales (GWh) Power supply contracts with generation companies Red EECL 2017 2018 2019 Eléctrica 50% Unregulated Regulated 50% Engie Energía Chile - Presentation to Investors – 1Q 2019 7
SNAPSHOT: EECL IN 2019 INTO THE DECARBONIZATION PATH DECARBONIZATION: OUR PERFORMANCE A DECISIVE, GRADUAL AND RESPONSIBLE PATH Early steps towards decarbonization • Development of TEN project => procurement of low-carbon energy sources • Decision not to build any new coal plants RENEGOTIATED PPAs ~3 TWh PPA renegotiation with mining companies • New tariff scheme: price reduction COAL CAPACITY TO BE • Decarbonization (tariff indexed to CPI rather than to coal prices starting 2021) DISCONNECTED 2019 • Contract life extension (10+ years) 170 MW ASSET ROTATION PLAN Asset rotation plan • U12 & U13 coal plants to be closed in 2019 1GW $1bn • Plan to develop 1GW / USD1bn in renewable assets • Long-term power supply agreement to reduce volatility during transition Collaborating with authority in decarbonization initiatives • Active participation in the round table sponsored by the Ministry of Energy Engie Energía Chile - Presentation to Investors – 1Q 2019 8
AGENDA Snapshots Key messages Financial update Addenda 9 Engie Energía Chile - Presentation to Investors – 1Q 2019
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 and flexible capital structure Ample room to finance energy transformation plan 10 Engie Energía Chile - Presentation to Investors – 1Q 2019
KEY MESSAGES RECENT EVENTS INDUSTRY COMPANY • • Climatic effects 1Q19: Acquisition of solar PV plants: SING SEN • Altiplanic Winter affected power Los Loros & Andacollo “Sistema ~55 MWp/US$35 million demand from mining companies Eléctrico • Drought in center-south Chile Nacional” • PPA renegotiations & new affected spot energy prices contracts signed: Antucoya, Molycop and others • Temporary smelter shut-downs ~532 GWh p.a. Environmental improvement works to SIC • meet stricter emission norms IEM tests completed: Probable COD: May-19 • Distribution supply auction - 2019: 206 GWh injected 1Q19 3 blocks totaling 3,400 GWh p.a. • 2025 - 2040 Environmental approval Tamaya Solar: : 122.4 MWp project • National transmission valuation • quadrennial process: 15-year PPA w/ distribution co.s: International bid launched by Ministry 84% demand increase in 1Q19 of Energy to define National • Transmission expansion plans and Dividends: tariffs for 2020-2023 Final + provisional US$48.1 million = 30% of 2018 recurring net income Engie Energía Chile - Presentation to Investors – 1Q 2019 11
RESULTS IN LINE WITH GUIDANCE 2019: GRASPING GROWTH AND BEGINNING OUR RECONVERSION PROFITABLE LONG-TERM GROWTH; IMPROVED RISK PROFILE OUR 1Q PERFORMANCE New PPAs w/distribution companies and Free Clients • Growth in contracted portfolio reaching ~10 TWh of contracted demand 1Q17 1Q18 1Q19 • Portfolio diversification (regulated vs. unregulated) ENERGY SALES (TWh) Operation in an interconnected market. SIC + SING = SEN 2.16 2.41 2.64 • 50%-owned TEN company: • Up to 900MW of power transported ENERGY SALES REGULATED PPA Has released trapped solar PV production in “Norte Chico” • (SIC) • ISA’s Interchile project is operating 2 out of 3 segments. 0.44 0.81 • 3rd tranche to begin operations in 2019 will enhance interconnection EBITDA New power supply sources => risk control 66 92 96 • New gas supply to run our CCGTs or to sell to other producers • IEM project operating in test mode; 206 GWh produced in 1Q19. Puerto NET RECURRING INCOME Andino port servicing Mejillones complex since late 2017 42 20 39 • New PPAs signed with other generation companies to reduce our exposure to the spot market in south-central Chile Engie Energía Chile - Presentation to Investors – 1Q 2019 12
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