Q3 2019 Results Call November 12, 2019 10 AM EST / 12 PM ART - - PowerPoint PPT Presentation

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Q3 2019 Results Call November 12, 2019 10 AM EST / 12 PM ART - - PowerPoint PPT Presentation

Q3 2019 Results Call November 12, 2019 10 AM EST / 12 PM ART Disclaimer The material that follows is a presentation of general background information about Pampa Energa SA as of the date of the presentation. It is information in summary form


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Q3 2019 Results Call

November 12, 2019 10 AM EST / 12 PM ART

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The material that follows is a presentation of general background information about Pampa Energía SA as of the date of the presentation. It is information in summary form and does not purport to be complete. It is not intended to be relied upon as advice to potential investors. This presentation is strictly confidential and may not be disclosed to any other person. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of the information presented herein. This presentation contains information and statements that are forward-looking within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the 'Securities Act') and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that are not historical facts. These statements are only predictions based on our current assumptions, expectations and projections about future events. Forward-looking statements may be identified by the words 'believe', 'expect', 'anticipate', 'target', or similar

  • expressions. While Pampa' s management believes that the expectations reflected in such forward-looking statements are reasonable, investors

are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and are generally beyond the control of Pampa, which could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include, but are not limited to, changing business, regulatory, political or other market conditions in Argentina and elsewhere, the completion of our new generation projects, the completion of our distribution and transmission subsidiaries' tariff revision process, the prospects for growth anticipated by our management, and the other risks and uncertainties discussed in our reports and other documents filed with the U.S. Securities and Exchange

  • Commission. Further, Pampa undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information,

future events, or otherwise, nor makes any representation or warranty, expressed or implied, as to the accuracy or completeness of the information contained herein, and nothing contained herein is, or shall be relied upon as a promise or representation that any such forward looking statements will be achieved. Management is not making and you should not infer any representation about the likely existence of any particular future set of facts or circumstances. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the Securities Act. Any offering of securities to be made in the United States will be made by means of a prospectus or offering prepared in connection with any such offering. Solely for the convenience of the reader and better analysis, should Q3 2019’s figures follow US$ as functional currency, we have prepared Q3 2018’s figures using nominal terms under AR$ functional currency, translated into US$ by average exchange rate of the period quoted by Banco de la Nación Argentina. Moreover, should Q3 2019’s figures follow AR$ as functional currency, we have prepared Q3 2018’s figures adjusted as

  • f September 2019, translated into US$ by closing exchange rate of the period quoted by Banco de la Nación Argentina. These conversions

should not be considered representations that any such amounts have been, could have been or could be converted into U.S. Dollars at that or at any other exchange rate. Moreover, as a result of fluctuations in the Dollar Peso exchange rate, the exchange rate used in the conversion may not be indicative of current or future exchange rates.

Pampa Energía ● Q3 2019 Earnings Call

Disclaimer

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  • Reporting considerations to take into account
  • Q3 2019’s key takeaways
  • Results & news by business segment

 Power generation  Electricity distribution  Oil & gas upstream  Petrochemicals  Holding and Others

  • Q3 2019 consolidated net income
  • Cash and debt
  • Q&A session

Pampa Energía ● Q3 2019 Earnings Call 3

Today’s Agenda

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Pampa Energía ● Q3 2019 Earnings Call 4

Reporting Considerations to Take Into Account

FC = Functional Currency Q3 2019 Q3 2018 Reporting Reporting Chosen Proxy to Compare Pampa stand- alone, gencos and

  • ther

subsidiaries FC US$ FC AR$, adjusted by inflation as of December 31, 2018 Nominal AR$ as reported in Q3 2018 at avg FX 32.04 ≈ FC US$ Edenor TGS Transener Refinor OldelVal (IAS 29) FC AR$ @ September 30, 2019 Inflation = 6% Devaluation = 14% FC AR$ @ December 31, 2018 Inflation = 19% Devaluation = 18% FC AR$ @ September 30, 2019 Inflation = 64% Devaluation = 80%

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61 57 20 123 123 109

184 180 128

Q3 18‡ … Q2 19* Q3 19*

Edenor Pampa RG

283 245 270 32% 27% 39%

0% 10% 20% 30% 40% 50% 60% 70% 80% 220 230 240 250 260 270 280 290

Q3 18‡ … Q2 19* Q3 19*

EBITDA margin

888 915 697

Q3 18‡ … Q2 19* Q3 19*

Pampa Energía ● Q3 2019 Earnings Call 5

Consolidated Adjusted EBITDA1, US$ million Consolidated Adjusted EBITDA Breakdown1,2 Revenues1, US$ million Capex Pampa Stand-Alone + Edenor, US$ million

Q3 2019’s Key Takeaways

Q3 19*

Oil & Gas 26% Electricity 74%

E&P 19% TGS3 7% Power 48%

EDN 22%

TRX3 4% *Under FC US$; FC AR$ adjusted by inflation @ Sept 2019. ‡For convenience purposes only, if Q3 19 is under FC US$, Q3 18 is shown in nominal AR$ converted into US$ at average FX AR$32.04/US$; if under FC AR$, Q3 18’s adjusted by inflation @ Sept 2019, translated in US$ at closing FX AR$57.59/US$. (1) Incl. affiliates at O/S that under IFRS, Greenwind, CTBSA, OldelVal, Refinor, Transener and TGS are not consolidated in our FS. (2) It does not include pure holding, eliminations and petrochemicals. (3) Adjusted by our ownership.

%

Q3 19* Q3 19*

  • 21% yoy
  • 24% qoq
  • 5% yoy

+10% qoq

  • 30% yoy
  • 29% qoq

 High AR$ depreciation at

  • reg. utilities

 Lower E&P & genco’s legacy prices More power capacity & gas production  High AR$ depreciation at

  • reg. utilities

 Lower prices in E&P & genco’s legacy Lower AR$-link costs Acquisition of CTEB  Final stages at Genelba Plus  Commissioning

  • f PEPE wind

farms  AR$ depreciation

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Pampa Energía ● Q3 2019 Earnings Call 6

Adjusted EBITDA, in US$ million

Q3 2019’s Key Takeaways

Q3 18‡

Power Generation1 Electricity Distribution Oil & Gas2 Petro- chemicals Holding, Others3 & Eliminations

Q3 19*

131 59 52 3 25

  • Adj. EBITDA

Q3 19*

270

*Under FC US$; FC AR$ adjusted by inflation as of Sept 2019. ‡For convenience purposes only, if Q3 19 is under FC US$, Q3 18 is shown in nominal AR$ converted into US$ at average FX AR$32.04/US$; if under FC AR$, Q3 18’s adjusted by inflation as of Sept 2019, translated in US$ at closing FX AR$57.59/US$. (1) Incl. Greenwind & CTBSA at O/S. (2) Incl. OldelVal at O/S. (3) Incl. TGS, Transener and Refinor at O/S.

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110 100 131 68% 49% 53%

10% 30% 50% 70% 90% 110% 130% 150%
  • 20
40 60 80 100 120 140

Q3 18‡ … Q2 19*

EBITDA margin

94.2% 95.4% 95.0%

Q3 18 … Q2 19 Q3 19

Hydro 13% 6% 11% Wind 3% 5% 5% Thermal 84% 90% 84%

3,572 3,727 4,138

Q3 18 … Q2 19 Q3 19 4,751 MW

Pampa Energía ● Q3 2019 Earnings Call 7

Generation Performance, in GWh Availability Performance, in % to Installed Capacity Adjusted EBITDA1, in US$ million

  • Amendment of CTEB’s trust and syndicate loan
  • Expansions’ status: Genelba Plus and CTEB

Main News

Power Generation

3,871 MW +19% yoy +31% qoq Q3 19*

Additions of PEPE wind farms, Genelba+’s GTs & CTEB Dilution of OpEx Better E+ margins  Lower legacy prices

+16% yoy +11% qoq Q3 19 Q3 19 4,751 MW

Commissioning of PEPE’s wind farm (106 MW), Genelba Plus’ GTs (207 MW) and

  • peration of CTEB

(567 MW) New wind & thermal capacity Higher thermal dispatch at self- fuel procured units  High variable cost & low thermal requirement in the south

*Under FC US$. ‡For convenience purposes only, Q3 18 is shown in nominal AR$ converted into US$ at average FX AR$32.04/US$. (1) Includes EBITDA from CTEB and Greenwind at 50% ownership.

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Power Generation

383 MW Genelba Expansion

Pampa Energía ● Q3 2019 Earnings Call 8

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Power Generation

280 MW Ensenada Barragán Expansion

Pampa Energía ● Q3 2019 Earnings Call 9

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59 59 59 16% 12% 23%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 50 51 52 53 54 55 56 57 58 59 60

Q3 18‡ … Q2 19*

EBITDA margin

3.01 3.09 3.09

Q3 18 … Q2 19 Q3 19

45% 42% 45% 15% 16% 15% 33% 35% 33% 7% 7% 7%

5,626 4,849 5,362

Q3 18 … Q2 19 Q3 19

Pampa Energía ● Q3 2019 Earnings Call 10

Sales Performance , in GWh

  • Maintenance of tariff schedules

Main News Number of End-Users, in million

Electricity Distribution

Q3 19

 Mild weather  Economic recession  Price-demand elasticity Winter season

  • 5% yoy

+11% qoq

Public lighting & shantytowns Industries SMEs Residential Market discipline actions Installation of MIDEs  Lower commercial and industrial clients

+3% yoy 0% qoq

*Under FC AR$ adjusted by inflation as of September 2019. ‡For convenience purposes only, Q3 18’s adjusted to inflation as of September 2019, translated in US$ at closing FX AR$57.59/US$.

Q3 19 Q3 19*

 CPD outpaced by AR$ deval & CPI  5% lower demand  Higher energy losses Wages outpaced by AR$ deval and CPI Lower penalties Collection of retroactive installments, social tariff caps

Adjusted EBITDA, in US$ million

  • 1% yoy

0% qoq

Lagged sales 27 4

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76 53 52 49% 47% 42%

10% 30% 50% 70% 90% 110% 130% 150%
  • 10
20 30 40 50 60 70 80 90

Q3 18‡ … Q2 19*

EBITDA margin

45.0 48.5 49.8

Q3 18 … Q2 19 Q3 19

5.4 4.8 4.8

Q3 18 … Q2 19 Q3 19

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Production Performance, in kboe/d Adjusted EBITDA1, in US$ million

Oil & Gas

66.4 60.0

Pampa Energía ● Q3 2019 Earnings Call

  • 32% yoy
  • 1% qoq

+11% yoy +3% qoq Q3 19* Q3 19 Q3 19 49.2

Price  FX freeze Production  Lower completion at El Tordillo  Chirete preparing

  • prod. facilities

*Under FC US$, FC AR$ adjusted by inflation as of September 2019. ‡For convenience purposes only, if Q3 19 is under FC US$, Q3 18 is shown in nominal AR$ converted into US$ at average FX AR$32.04/US$; for results under FC AR$ in Q3 19, Q3 18’s adjusted to inflation as of September 2019, translated in US$ at closing FX AR$57.59/US$. (1) Includes EBITDA from OldelVal at 2.1% in Q3 19 and Q1 19, and at 23.1% in Q3 18.

Average Price in US$ per bbl

 Lower gas prices in US$  FX freeze for crude oil prices  Higher gas treatment fees Higher total production Lower royalties AR$ depreciation impact in OpEx

Crude Oil Production Performance, in kbbl/d

  • 10% yoy

0% qoq

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4.7 4.8 5.0 4.7 4.8 4.8 4.5 3.4 3.1 3.1

3.3

3.8 4.2 4.5 4.4

Q1 Q2 Q3 Q4

Pampa Energía ● Q3 2019 Earnings Call 12

Weighted Average Gas Price for Pampa, Without Subsidy, in US$/MBTU

  • Gas exports clearance
  • Crude oil FX freeze
  • Updates in billing to residential users
  • Operating update

Main News Gas Production Performance, in mcf/d Destination of our Production1

Oil & Gas

(1) Summer quantities are estimated.

238 262 270

Q3 18 … Q2 19 Q3 19 Q3 19 4.5 3.1 3.3 +13% yoy +3% qoq 2017 2018 2019

83% 78% 74% 80%

July '19 August '19 Sept '19 Summer '19-20

Price  CAMMESA & industries Winter season Production Vertical integration with power gen

2016

Average Price in US$ per MBTU

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(5) 3 3 3% 4%

0% 1% 2% 3% 4% 5% (6 ) (5 ) (4 ) (3 ) (2 ) (1 )
  • 1
2 3 4

Q3 18‡ … Q2 19*

EBITDA margin

31% 28% 27%

6% 7% 10%

63% 65% 63%

85 95 75

Q3 18 … Q2 19 Q3 19

Pampa Energía ● Q3 2019 Earnings Call 13

Sales Performance, in thousand ton

  • No news

Main News

Petrochemicals

1,161 955 Adjusted EBITDA, in US$ million

Higher reforming price spread Lower AR$-link costs Lower gas & naphta costs  Lower styrenics demand & spreads

+8m yoy +8% qoq Q3 19*

*Under FC US$. ‡For convenience purposes only, Q3 18 is shown in nominal AR$ converted into US$ at average FX AR$32.04/US$.

956

Higher SBR destined to domestic market  Lower exports  Closing of Zárate & San Lorenzo

Q3 19

  • 12% yoy
  • 22% qoq

Other SBR Styrene & Polystyrene

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2 (13) (2) 29 33 18 9 11 10

1 1 (1)

41 32 25

Q3 18 … Q2 19* Q3 19*

Pampa Energía ● Q3 2019 Earnings Call 14

  • TGS:
  • Tariff deferral
  • Commissioning of VM midstream pipeline north tranche
  • Postponement of Litoral pipeline tender
  • Dividends
  • Transener: semiannual tariff adjustment
  • Holding: status of share repurchase program

Main News Adjusted EBITDA2, in US$ million Affiliates’ EBITDA Performance @ 100% Ownership, in US$ million

Holding & Others

*Under FC US$, FC AR$ adjusted by inflation as of Sept 2019. ‡For convenience purposes only, if Q3 19 is under FC US$, Q3 18 is shown in nominal AR$ converted into US$ at average FX AR$32.04/US$; if results under FC AR$, Q3 18’s adjusted to inflation as of Sept 2019, translated in US$ at closing FX AR$57.59/US$. (1) Incl. EBITDA from TGS at 25.8% equity, Transener at 26.3% equity and Refinor at 28.5% equity.

Q3 19*

TGS Transener

35 35 37

Q3 18 … Q2 19 Q3 19

113 107 71

Q3 18 … Q2 19 Q3 19

2 2 (3)

Q3 18 … Q2 19 Q3 19

Refinor

YoY Tariff increase as of Aug 2019 Lower labor and AR$-link costs  Higher AR$ depreciation and lagging inflation YoY  Lower ethane

  • prod. And NGL

pricing in US$  Higher AR$ depreciation and lagging inflation Lower gas cost in US$ YoY  Price freeze in AR$ Lower crude oil costs

  • 22% yoy
  • 38% qoq

Refinor Transener TGS Holding

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Pampa Energía ● Q3 2019 Earnings Call 15

Net Income to Shareholders, in US$ million

Q3 2019’s Key Takeaways Results compared as reported

116 Q3 18†

Power Generation Electricity Distribution Oil & Gas Petro- chemicals Holding, Others & Eliminations

Q3 19*

166 (20) 14 5 (49)

Reported Q3 19* NI to Shareholders

*Under FC US$, FC AR$ adjusted by inflation as of September 2019. ‡For convenience purposes only, if Q3 19 is under FC US$, Q3 18 is shown in nominal AR$ converted into US$ at average FX AR$32.04/US$; for results under FC AR$ in Q3 19, Q3 18’s adjusted to inflation as of September 2019, translated in US$ at closing FX AR$57.59/US$.

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10 127 92 6 494 25 145 24 129 62 59 26 33 38

23 161 178 209 520 41 167 29 687 293

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Pampa Edenor Transener @ O/S TGS @ O/S Other affiliates @ O/S Pampa Energía ● Q3 2019 Earnings Call 16

Summary @ September 30, 20191, in US$ million

Strong Cash & Debt Position

Principal Debt Profile as of September 30, 20191

In US$ million

Current Credit Ratings for Pampa B- Caa1

Notes: Affiliates CTEB, TGS, Transener, Greenwind, OldelVal and Refinor are included at O/S. (1) FX AR$57.59/US$. (2) Includes financial

  • interests. (3) Excludes net debt from affiliates US$305 million and Edenor US$154 million.

Gross Debt by Currency Gross Debt by Company

Redeemed debt post Q3 19: Pampa: US$40m Edenor: US$12.5m

CCC+ AA- (arg) Consolidated debt from FS US$1,980 million + Affiliates' debt @ O/S US$420 million Total gross debt2 US$2,400 million Consolidated cash from FS US$584 million + Affiliates' cash @ O/S US$115 million Total cash US$699 million Consolidated net debt2 US$1,702 million Net Debt/LTM Adj. EBITDA 1.9 x Restricted group net debt2,3 US$1,242 million Net Debt/LTM Adj. EBITDA 2.0 x

AR$ 4% US$ 96%

%

Pampa 75% Greenwind 2% Edenor 7% TGS 6% Transener 1% Refinor 0% CTEB 9%

%

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Pampa Energía ● Q3 2019 Earnings Call

Thank you! Any Questions?

For further information, contact:

  • Gustavo Mariani

CEO

  • Ricardo Torres

Vice President

  • Mariano Batistella

Executive Director of Planning, Strategy, Downstream & Affiliates

  • Lida Wang

Investor Relations Officer The Pampa Energía Building, Maipú 1 (C1084ABA), Ciudad Autónoma de Buenos Aires, Argentina +54 (11) 4344 6000 http://ri.pampaenergia.com/en investor@pampaenergia.com @PampaEnergia

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