Slide 1: Company Presentation 3Q 2014
Company Presentation 3Q 2014
Slide 2: Colbun at a Glance
Arica SING ~4,000 MW COLBUN AT A GLANCE ~17 TWh Business Power Generation Antofagasta Tal-Tal Size 2nd largest generator in Chile’s Central Grid (SIC), SIC with over 21% market share (MW) ~14,000 MW ~51 TWh The SIC covers 75% of Chile’s electricity demand Capacity 3,278 MW 48% hydro and 52% thermal
Slide 3: Chilean Power Market Structure
CHILEAN POWER MARKET STRUCTURE 1 2 Electricity Market Structure Leading Player in the SIC GENERATORS Market Share 38% >15 players REGULATED UNREGULATED SPOT CUSTOMERS CUSTOMERS MARKET 21% 23% 18% DISTRIBUTION “FREE” CDEC COMPANIES CUSTOMERS Regulated Spot Price Tender Unregulated /Marginal Tariffs T
Slide 4: Generation and Price Evolution in Chile's Central Grid
GENERATION AND PRICE EVOLUTION IN CHILE’S CENTRAL GRID (+) Development based on gas turbine (diesel) • Development based on hydro + competitive natural gas (+) LNG re-gasification terminal since 2009 • Power purchase agreements signed under fixed prices (set by (+) Coal- power plants regulator for d
Slide 5: Steady Growth Over the Past Decade
STEADY GROWTH OVER THE PAST DECADE 1 2 3,500 Capacity (MW) 3,278 1,800 Total Operating Revenues (MMUSD) MW 3,000 1,600 1,400 USD 1,522 2,500 1,200 million 2,000 1,000 800 1,500 600 USD 258 1,000 400 million 1,260 CAGR: 10% 200 CAGR: 18% 500 MW 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20
Slide 6: Generation Assets
GENERATION ASSETS NEHUENCO COMPLEX: 874 MW ACONCAGUA BASIN: 213 MW 7 thermal power plants (1,689 MW) GAS/DIESEL Chacabuquito (29 MW)* Blanco (60 MW) Combined Cycle Nehuenco I (368 MW) Nehuenco II (398 MW) Los Quilos (39 MW)* Juncal (29 MW) * Open Cycle Coal-fired Nehuenco III (108 MW) Hornitos (55 M
Slide 7: Generation Assets
GENERATION ASSETS Capacity (MW) & *Estimated Generation MW (TWh/year) Breakdown TWh 3,500 3,278 MW 19.5 TWh 20 3,000 581 4.0 2,500 15 766 5.0 2,000 342 10 Colbún– Reservoir 1,500 2.5 1,000 1,589 8.0 5 500 0 0 Capacity (MW) Generation (TWh/year) Hydro CCGT Diesel/Gas Coal Peaking Diesel/Gas Santa Mar
Slide 8: Increasingly Efficient Generation Matrix
INCREASINGLY EFFICIENT GENERATION MATRIX Colbún Thermal Production Breakdown (GWh) More Colbún Total Production (GWh) Expensive 9% 11% 10% 35% 43% 6,335 2,980 6,396 3,836 4,415 67% 51% 49% 5,461 52% 5,017 94% 35% 6,580 55% 5,567 5,462 5,233 4,857 4,546 41% 40% 38% 3,411 33% 29% Less 6% 2% Expensive
Slide 9: Increasingly Balanced Commercial Position
INCREASINGLY BALANCED COMMERCIAL POSITION Contractual Sales vs. Generation (GWh) GWh 120% 551 12,000 11,655 11,320 10,687 546 100% 9,639 2,240 9,805 3,601 10,000 8,831 4,431 5,058 1,901 3,234 4,602 80% 8,000 2,802 2,563 2,242 2,893 4,879 2,418 2,688 323 0 60% 6,000 1,273 5,031 1,853 2,616 95 40% 4,0
Slide 10: EBITDA vs. Hydro Generation Evolution
EBITDA VS. HYDRO GENERATION EVOLUTION TWh MMUSD 500 7 400 6 300 200 5 100 0 4 2009 2009 5 6 2010 2010 7 8 20119 2011 10 201211 2012 12 20132013 13 132 3Q14 3Q14 LTM 14 LTM EBITDA Hydro Generation 10
Slide 11: High Quality Clients
HIGH QUALITY CLIENTS 1 2 Sales by Type of Costumer (%) Sales Volume by Customer (%) AngloAme rican Chilectra Unregulated (BBB/BBB (BBB+/BB +) B+)* Regulated 9% 22% 41% Codelco CGED (A/A+) 59% 29% (Local A+) 18% Saesa Others (Local AA) 6% 16% 3 4 14,000 Historic Sales by Type of Costumer (GWh) 150.0
Slide 12: Commercial Strategy
COMMERCIAL STRATEGY Maximize returns from our current and future assets Manage volatility given relevant hydro component Predictable Cash Flows 1. DEVELOPMENT COST 4,000 GWh – OC 5,000 GWh – Dual CCGT 2. INCORPORATE 2,500 GWh – Coal INDEXATION FORMULAS IN SALE PRICES 8,000 GWh – Hydro(*) 3. DEFINE O
Slide 13: Chile Has Growing Energy Requirements
CHILE HAS GROWING ENERGY REQUIREMENTS • In the next decade, Chile is expected to become the first developed economy (by OECD standards) in Latin America. We expect this transition to result in increased demand for power generation. • The National Energy Commission projects a CAGR of electricity dema
Slide 14: Colbun Has Several Growth Opportunities
COLBUN HAS SEVERAL GROWTH OPPORTUNITIES La Mina - Hydroelectric Project Searching for investment opportunities in 34 MW of Installed Capacity the region: 180 GWh of expected annual generation Special focus on assets in Colombia and Perú Phase: Environmentally Approved Qualifies as NCRE Count
Slide 15: Colbun's Corporate Strategy
COLBUN’S CORPORATE STRATEGY Our Strategic Pillars Strengthen our organization and people 1. Strengthening Strengthen our operations Strengthen our financial position Narrow our exposure to exogenous variables: diversified asset base 2. Diversification (technology, fuel and location) and clie
Slide 16: Operations Supported by a Defined Corporate Social Responsibility Strategy
OUR OPERATIONS ARE SUPPORTED BY A DEFINED CORPORATE SOCIAL RESPONSIBILITY STRATEGY EMPLOYEES INVESTORS ENVIRONMENT CLIENTS AND COMMUNITY AND SUPPLIERS SOCIETY CONTRACTORS AND PROVIDERS 16
Slide 17: Improving Results
IMPROVING RESULTS 1 2 Operating Revenues (US$ million) 500 Adj. EBITDA (US$ million) & EBITDA Mg 50% 2,000 (%) 484 1,696 400 40% 1,522 337 331 352 1,333 1,409 1,500 287 1,159 300 30% 1,024 32% 32% 29% 205 1,000 200 20% 20% 21% 500 100 15% 10% 0 0 0% 2009 2010 2011 2012 2013 3Q14 2009 2010 2011 2012
Slide 18: Solid Interest Coverage and Improving Leverage
SOLID INTEREST COVERAGE AND IMPROVING LEVERAGE 1 2 7.00 Net Debt / EBITDA Net Interest Coverage 5.9 12.00 10.9 6.00 10.4 5.2 10.00 8.3 5.00 4.1 7.8 8.00 4.00 2.4 6.00 3.00 2.00 4.00 1.00 2.00 .00 .00 2011 2012 2013 3Q14 LTM 2011 2012 2013 3Q14 LTM 3 4 Net Liabilities / Equity 35% Retained Cash Flow
Slide 19: A Look at Our Debt and Liquidity
A LOOK AT OUR DEBT AND LIQUIDITY 1 2 1000 1,000 Local Rating Last Amortization Schedule (MMUSD)* Banks Bonds Update 800 Average Maturity: 6.3 years Fitch Ratings A+ Jul-14 Average Interest Rate: 5.0% Humphreys AA- Jul-14 600 (*) Includes the 400 Avg. MMUS$ 50 prepayment of a for the next 3 Internati
Slide 20: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS Country: Operates in Chile, the highest-rated country in the region (Aa3/AA/A+) Size: Second-largest generation company in Chile’s largest electricity grid Competitive: High-quality, diversified asset portfolio and flexible commercial policy. Stable: Diversified, so
Slide 21: «Colbun
«Colbun