Interconexion Electrica Sa Esp · BVC:ISA
Interconexion Electrica Sa Esp — BTG Pactual Latam CEO Conference 2023
27 slides from Interconexion Electrica Sa Esp's conference presentation, 2023
Slide 1: ISA as a profitable investment opportunity
ISA as a profitable investment opportunity
Slide 2: Leading multilatin developer and operator of power transmission, roads and digital infrastructure
Leading multilatin developer and 62% ISA + ITCO 56% Transelca 6% operator of power transmission Ruta Costera: 146 km systems, roads and digital infrastructure in the Latam region 73% CTM 40% 18% CTEEP1 11% REP 28% TAESA 7% ISA Peru 5% Key metrics Transformer 100,000+ MVA Roads in 699 kms capacity op
Slide 3: Attributes of ISA's value proposition
Attributes of ISA´s value proposition Atributos de nuestra propuesta de valor Contracted revenue with Perpetual or long-term Robust cash flow inflation protection concessions generation Growth markets Strong financial position Economic cycle resiliance 3
Slide 4: ISA's 2030 strategy: Sustainable value
Shareholder value • 70% increase in EBITDA • USD 10.5 billion new investments in current businesses and geographies. ISA’s 2030 strategy: Sustainable Energy transition and value Positive social and innovation environmental impact • USD 2 billion in new energy ▪ Reduce 11 million tCO2e. businesses ▪
Slide 5: Caring for the environment and communities
Caring for the environment and communities. ISA, through Conexión Jaguar program, supports projects for Reducing Emissions from Deforestation and Forest Degradation (REDD+) with carbon credits. Conexión Jaguar has contributed to the conservation of more than 828,000 hectares in Latin America, with a
Slide 6: ISA enables Latam's energy transition by developing critical power transmission projects
ISA enables Latam’s energy transition by developing critical power transmission projects 33 projects in execution 3,400+ km of circuit 16,000+ MVA Colombia Peru Brasil1 Chile 15 9 6 3 Projects Projects Projects Projects USD$ 260m in new annual revenues 1 Without Reinforcements and improvements 66
Slide 7: USD $2.1 bn. EBITDA and 15% ROAE
USD $2.1 bn. EBITDA and 15% ROAE 4% Peru Telco 19 % Colombia 23 % 23 % Revenue Roads EBITDA1 2Q23 LTM 2Q23 LTM Chile USD $ 3.2 bn. 19 % USD $ 2.1 bn. 73 % Power transmission Brazil 39 % USD$ 570 Net profit Million 18 % Net margin 15 % ROAE 7
Slide 8: 26% of revenues denominated in USD, and over three-fourths contracted for 10 years or more
26% of revenues denominated in USD, and over three-fourths contracted for 10 years or more Diversified currency and regulatory risk Long-term contracted revenue, mostly B2G Other 1-5 years 1% 5% USD CLP 26 % Perpetual 5-10 years 19% Revenue 25 % Revenue 19 % 2Q23 LTM 2Q23 LTM USD $ 3.2 bn. COP 3.2 b
Slide 9: Most diversified power transmission platform in LATAM
Most diversified power transmission platform in LATAM, by country and asset class Power transmission revenues Colombia2 Brazil3 Other R&I4 Peru 1% Colombia Expansion B2B 10 % Construction 26 % projects1 20 % revenues 24 % 27 % 34 % Chile RBSE 4% USD $ 2.4 bn. USD $ 605 m. 2Q23 LTM 28 % USD $ 1.1 bn.
Slide 10: Investment grade rating with leverage leeway
Investment grade rating with leverage leeway ISA Banks Bonds Fixed MOODY'S Baa2 17% 57% rate Fitch Ratings BBB 46% CTEEP Total Debt Total Debt DCM Fitch Ratings AAA 2Q23 2Q23 2Q23 CTM MOODY'S Baa3 Fitch Ratings BBB Capital Green Variable market bonds rate Interchile MOODY'S Baa1 83% 43% 54% Fitch Ra
Slide 11: Strong contracted growth: USD $6 bn. in backlog
Strong contracted growth: USD $ 6 bn. in backlog Figures in Bn. Of USD. Backlog Projection of other Investments. 0.2 6.0 0.3 0.1 0.9 0.2 4.5 0.9 3.3 (1) Reinforcements Capital Backlog Projection of Projection of Regulated XM Other CAPEX as of (6) Committed (4) projection (5) and contributions in rei
Slide 12: Robust pipeline of opportunities for further growth
Panama Robust pipeline of opportunities USD $1.1 bn. for further growth Colombia Brazil USD $3.8 bn. USD $11 bn. Pipeline (*) Peru USD $ 21 bn. USD $1 bn. Chile USD $3.8 bn. Power Roads transmission USD $15.4 bn. USD$ 5.6 bn. 1212 (*) Investment opportunities portfolio August 2023 - March 2024.
Slide 13: Our low-cost debt reflects the regional diversification of our portfolio
Our low-cost debt reflects the regional diversification of our portfolio Performance and spread Analysis (YoY) (2) (3) bps G-Spread (1) % Yield 10% 550 9% 500 450 8% 400 7% G-Spread 350 6% 300 5% 250 4% 200 3% 150 ISA vs Col Col 31 Col 34 ISA 33 Col 31 Col 34 ISA 33 Bps Col 31 Col 34 ISA 33 % Col 31
Slide 14: ISA's country risk premium is significantly lower than the country risk of Colombia
ISA’s country risk premium, when weighted by EBITDA, is significantly lower than the country risk of Colombia Bps Colombia 400 350 300 ISA Brazil EMBI 250 Peru 200 Chile 150 100 80 120 160 200 240 280 320 360 Bps CDS Country Brazil Chile Colombia Peru ISA Avg1 CDS 282 125 329 142 236 EMBI 229 132 37
Slide 15: Blended stock exchange index weighted by ISA's EBITDA is flat versus 2021
A blended index of the stock exchanges of Colombia, Brazil, Chile and Peru, weighted by ISA’s EBITDA, is flat in 2021 levels. ISA’s price, however, is down 25%. 140 Blended stock exchange index, weighted by ISA’s EBITDA 2021=100 130 129 120 110 100 100 90 86 80 75 70 60 50 EBITDA Index blended ISA C
Slide 16: Well below its peers, ISA is trading at 6x EBITDA and 7x Earnings
Well below its peers, ISA is currently trading at 6x EBITDA and 7x Earnings (2) (1) Company Business EV/Ebitda P/E ratio EV/EBITDA ISA EV/EBITDA Bloomberg Avg BVC Peers Celsia Generation + distribution 5.0 11.5 12 11 12 11 11 10 Cemig Integrated + Gas 7.4 6.9 9 9 9 8 8 8 8 8 7 8 8 8 8 7 8 7 7 8 8 CP
Slide 17: Thank you
Thank you Visit our Valuation Kit for more information about ISA and its companies: https://www.isa.co/es/inversionistas/informacion-financiera/#kit
Slide 18: Disclaimer
Disclaimer ISA has prepared this report for informational purposes only. The Company does not accept responsibility for any investment decision based on this report. The statements contained herein reflect our current views on future events, are based on assumptions, and are subject to risks and fac
Slide 19: Appendix A: ISA: A story of growth and value creation
Appendix A: ISA: A story of growth and value creation EBITDA Billions of USD 1 2.0 2.1 1.9 Since 2019, ISA's EBITDA has 1.8 1.6 increased at a CAGR of 6,3%. 2019 2020 2021 2022 2023 600 $558 $570 1 50 $499 $519 49 500 Thousands of line kms $444 Since 2019, the circuit lines have 49 400 increased by
Slide 20: Appendix B: Results that translate into higher profitability for our shareholders
Appendix B: Results that translate into higher profitability for our shareholders 88% 70% 50% 45% 42% 40% 8.3% 0.15 0.19 5.1% 3.8% 3.9% 3.4% 3.3% 0.17 0.18 0.20 0.18 0.19 2018 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Payout ratio Dividend yield Dividend Extra Dividend Average Average Divide
Slide 21: Appendix C: ISA's cumulative return over the last 10 years
Appendix C: In the last 10 years, ISA's cumulative return has been higher than that of the companies listed in the Colombian market 21
Slide 22: Appendix D: ISA, 55 years in Colombia & Latin America
Appendix D: ISA, 55 years in Colombia & Latin America 2002 2021 Second equity Ecopetrol 1967 1982-1984 issuance: 2006 Chivor and San 1998 47.000 new Acquisition 2012 acquires ISA and aims to Establishment Carlos I Inception of shareholders Creation of become one of of CTEEP, INTERCHILE of ISA Hydroe
Slide 23: Appendix E: ISA's participation in subsidiaries
Appendix E: ISA’S participation in subsidiaries Type of ISA's ISA's Type of business Country Society Type of control (1) participation Type of business Country Society participatio control(1) n C Roads Colombia Intervial Colombia S.A.S. 100% C Telco Argentina ITXAR - Transamerican Telecomunication S
Slide 24: Appendix E: ISA's participation in subsidiaries (cont.)
Appendix E: ISA’S participation in subsidiaries (cont.) Type of ISA's Type of business Country Society control participation SC Power transmission Panama Interconexión Eléctrica Colombia Panamá S.A 50% SC Telco Ecuador TNEX - Transnexa S.A. 50% SC Others Colombia Derivex S.A. 40% SC Power transmissi
Slide 25: Appendix F: Debt amortization profile with an average life of 10 years
Appendix F: Debt amortization profile with an average life of 10 years Figures in USD million 800 Colombia Peru Chile Brazil 700 600 349 500 161 129 400 187 90 9 34 76 155 155 15 10 13 132 300 100 186 146 33 133 201 164 187 144 143 15 436 200 15 324 19 128 17 181 15 33 173 23 32 39 26 12 38 106 125
Slide 26: Appendix G: Colombia, from emerging market to frontier market
Appendix G: Colombia, from emerging market to frontier market The frontier market is defined as a small-sized, risky, and illiquid stock market compared to an emerging market. Some countries that fall into this categorization include Bangladesh, Egypt, Kenya, Nigeria, Sri Lanka, Ivory Coast, Morocco
Slide 27: Wrap-up notes
Wrap-up notes A broad portfolio of growth opportunities and financial flexibility to deliver our value proposition. Solid financial results that demonstrate ISA's resilience and the strength of its business model. Aligned with our strategy, we generate positive social and environmental impact: "With
ISA (Interconexión Eléctrica S.A. E.S.P.) — BTG Pactual Latam CEO Conference 2023 on 6ix