Colbun Sa · BCS:COLBUN
Colbun Sa — XVII Andean Investor Conference - Credicorp Capital 2019
38 slides from Colbun Sa's conference presentation, September 2019
Slide 1: Corporate Presentation - XVII Andean Investor Conference Credicorp
CREDICORP CONFERENCE CORPORATE PRESENTATION SEPT 2019 CORPORATE PRESENTATION XVII ANDEAN INVESTOR CONFERENCE CREDICORP SEPTEMBER 2019
Slide 2: Disclaimer & Contact Information
Disclaimer & Contact Information ▪ This document provides information about Colbún S.A. In no INVESTOR RELATIONS case this document constitutes a comprehensive analysis of the financial, production and sales situation of the company. TEAM CONTACT ▪ To evaluate whether to purchase or sell securities
Slide 3: Agenda
AGENDA 1. COMPANY OVERVIEW 2. VALUE PROPOSITION 3. STRATEGIC AGENDA PROGRESS 4. CONCLUDING REMARKS 3
Slide 4: Company & industry overview: Leading position in Chile & Peru
Company & industry overview Leading position in Chile & Peru THE COMPANY Installed Capacity Market Share1 Ownership 3,895 MW 16% / 8% 49.96% Matte Group 3,328 MW / 567 MW 9.58% Angelini Group Power-Plants Transmission Lines 19.94% Pension Funds 26 ~940 km 20.96% Others 25 / 1 KEY FINANCIALS Internat
Slide 5: Agenda
AGENDA 1. COMPANY OVERVIEW 2. VALUE PROPOSITION 3. STRATEGIC AGENDA PROGRESS 4. CONCLUDING REMARKS 5
Slide 6: Value proposition: Leading position supported by competitive strengths
Value proposition Leading position supported by competitive strengths 1 2 3 PRUDENT 4 5 MAXIMIZING COST STRONG AND ATTRACTIVE EFFICIENT AND COMPETITIVE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED SUPPLY MANAGEMENT GROWTH OF OUR ASSET BASE CONTRACTS OPTIONS STAKEHOLDERS 6
Slide 7: Value proposition: Leading position supported by competitive strengths
Value proposition Leading position supported by competitive strengths 1 2 3 PRUDENT 4 5 MAXIMIZING COST STRONG AND ATTRACTIVE EFFICIENT AND COMPETITIVE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED SUPPLY MANAGEMENT GROWTH OF OUR ASSET BASE CONTRACTS OPTIONS STAKEHOLDERS 7
Slide 8: Cost efficient & diversified asset base: Attractive markets
1. Cost efficient & diversified asset base Attractive markets… LTM GENERATION DEMAND GROWTH MARGINAL COST MARKET SHARE1 GWh 12 month average % US$/MWh % Others Others 6% SEIN 20 Santa Rosa 28% Peruvian 8% Gov. 5% 20% 4% 5% Natural 52,042 3% 10 9 8% Gas 2% SEIN 37% 1% Kallpa 13 GW Hydro Engie 13% 55%
Slide 9: Cost efficient & diversified asset base: high growth potential
1. Cost efficient & diversified asset base … with high growth potential AVERAGE RESIDENCIAL ELECTRICITY CONSUMPTION Only 22% of the total (kWh/month) energy consumption in Chile 1,000 corresponds to electricity … 800 600 400 ..However, the future is electric. 200 0 9
Slide 10: Assets diversified by technology & geography
1. Cost efficient & diversified asset base Assets diversified by technology & geography ▪ 42% of installed capacity from renewable energy. ▪ Diversified asset base: 9 regions in Chile, 1 in Peru. Assets spread throughout 1,050 km in Chile. FENIX POWER 567 MW 3,895 MW Inst. Capacity: Hydro: 1,634 MW
Slide 11: Decarbonization Process
1. Cost efficient & diversified asset base Decarbonization Process ▪ Colbún has only 1 coal-fired power plant of the 28 present in the system. ▪ Santa Maria is one of the newest and most efficient of the system. ▪ It’s emissions are significantly below the norm: 2018 Norm Limit PM (mg/Nm3) 7 50 Nox
Slide 12: 100% of PPAs supplied with cost-efficient generation
1. Cost efficient & diversified asset base 100% of PPAs supplied with cost-efficient generation WHOLE-SALE COMMERCIAL POLICY GENERATION & PPAs level 2Q19 LTM 1. Optimal Contracting level I. Renewable Capacity: Generation Commitments Hydro, solar and wind (TWh) (TWh) II. Efficient thermal capacity: D
Slide 13: Secured long-term regasification capacity & LNG supply
1. Cost efficient & diversified asset base Secured long-term regasification capacity & LNG supply Long-term strategy: Leveraging our efficient natural gas power facilities and diversifying our supply sources; contributing to a competitive, flexible, secure and sustainable power supply. 1. REGASIFICA
Slide 14: Relevant transmission assets ~940 km
1. Cost efficient & diversified asset base Relevant transmission assets Transmission lines Substations Market share 1 Proforma EBITDA LTM ~940 km 28 6% ~ 71 mm ~US$ Increase in renewable energies: ❯ Of smaller size ❯ With lower load factors ❯ Far from consumption centers centres WILL REQUIRE A RELEV
Slide 15: Fenix Power: a relevant & efficient CCGT in Peru
1. Cost efficient & diversified asset base Fenix Power: a relevant & efficient CCGT in Peru THE COMPANY SHAREHOLDERS One of the most efficient CCGT in Peru 36% Based on Heat Rate 51% 40 miles south of Lima Capital of Peru and largest city of the country 13% 567 MW KEY FIGURES Gross effective capacit
Slide 16: Value proposition: Leading position supported by competitive strengths
Value proposition Leading position supported by competitive strengths 1 2 3 PRUDENT 4 5 MAXIMIZING COST NEW AND ATTRACTIVE EFFICIENT AND COMPETITIVE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED SUPPLY MANAGEMENT GROWTH OF OUR ASSET BASE CONTRACTS OPTIONS STAKEHOLDERS 16
Slide 17: High quality clients in Chile
2. Strong and competitive supply contracts High quality clients in Chile CUSTOMER BASE PROFILE Sales % to Unregulated Customers Number of Unregulated Customers 41% 60% 4 230 2014 2019 2014 2019 Unregulated Customers Regulated Custormers PPAs IN CHILE: MAXIMUM CONTRACTED POWER SUPPLY (TWh) Regulated
Slide 18: PPAs renewal opportunities in Chile
2. Strong and competitive supply contracts PPAs renewal opportunities in Chile UNREGULATED CUSTOMERS ▪ In the coming years there is a relevant amount of energy for large unregulated clients to be re- contracted. ▪ Since 2016, Colbun has signed new contracts with large and medium-size clients for a t
Slide 19: Energy consumption profile by segment
2. Strong and competitive supply contracts Energy consumption profile by segment Due to their consumption profile, unregulated costumers have a lower withdrawal cost. CONSUMPTION PROFILE UNREGULATED CUSTOMER REGULATED CUSTOMER Energy Energy HOURLY PROFILE WITHDRAWAL COST Cost 24 hours 24 hours WITHD
Slide 20: Value proposition: Leading position supported by competitive strengths
Value proposition Leading position supported by competitive strengths 1 2 3 PRUDENT 4 5 MAXIMIZING COST STRONG AND ATTRACTIVE EFFICIENT AND COMPETITIVE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED SUPPLY MANAGEMENT GROWTH OF OUR ASSET BASE CONTRACTS OPTIONS STAKEHOLDERS 20
Slide 21: Stable operational results & solid metrics
3. Prudent financial management Stable operational results & solid metrics 1. EBITDA & EBITDA MG. (US$ million & %) 2. NET INCOME. (US$ million) EBITDA Chile EBITDA Fenix EBITDA Mg 289 45% 45% 45% 44% 46% 249 230 205 54 36 48 200 56 639 648 654 582 546 2015 2016 2017 2018 2Q19 LTM 2015 2016 2017 201
Slide 22: Strong liquidity
3. Prudent financial management Strong liquidity 1. CASH POSITION. (US$ million) 3. CASH FLOW. (US$ million) 1,081 Operating Activities Financing Activities 810 788 667 Investing Activities Net Cash Flow 667 2015 2016 2017 2018 2019 LTM 255 133 1 2015 2016 2017 2018 2Q19 LTM (19) 2. DIVIDEND DISTRIB
Slide 23: Long term debt profile
3. Prudent financial management Long term debt profile 1. FINANCIAL DEBT PROFILE US$1,608(*) mm 100% bonds 4.5% Interest Rate average US$1,279 million 94% USD and 6% UF US$329 million 100% Fixed rate 6.3 years average life 2. AMORTIZATION STRUCTURE. (US$ million) 600 Fenix Bond 527 527 500 Colbun Bo
Slide 24: Value proposition: Leading position supported by competitive strengths
Value proposition Leading position supported by competitive strengths 1 2 3 PRUDENT 4 5 MAXIMIZING COST STRONG AND ATTRACTIVE EFFICIENT AND COMPETITIVE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED SUPPLY MANAGEMENT GROWTH OF OUR ASSET BASE CONTRACTS OPTIONS STAKEHOLDERS 24
Slide 25: Local expansion considerations
4. Attractive portfolio of growth options Local expansion considerations GROWTH STRATEGY WIND AND SOLAR PIPELINE OF PROJECTS Wind projects Solar projects Add 4,000 MW of new renewable capacity over 10 years. LCOE LCOE ▪ Focus on solar and wind. The development cost of these technologies have decreas
Slide 26: Local expansion considerations
4. Attractive portfolio of growth options Local expansion considerations Horizonte With 607 MW this project will become one We have options to develop solar power plants of the wind farms with the largest installed for 1,670 MW and wind farms for 1,617 MW capacity worldwide Diego de Almagro Located
Slide 27: Diego de Almagro – Solar power plant
4. Attractive portfolio of growth options Diego de Almagro – Solar power plant Diego de Almagro KEY INDICATORS Chañaral Copiapó Estimated capacity 200 MW Estimated net annual 562 GWh generation Estimated load 34% factor Land Surface 330 ha Connection point Illapa S/E 220 kV (2.6 km) Environmental Im
Slide 28: Horizonte – Wind farm
4. Attractive portfolio of growth options Horizonte – Wind farm Horizonte Wind Farm KEY INDICATORS Antofagasta Estimated capacity 607 MW minimum Taltal Estimated net annual 2,029 GWh generation Estimated load 38% factor Land Surface 8,000 ha Connection point Parinas S/E 500/220 kV Turbine Supplier E
Slide 29: Other projects
4. Attractive portfolio of growth options Other projects San Pedro In December 2018, an Environmental Impact Study was re-entered for project adjustments, which was admitted for processing. Guaiquivilo Melado – Los Cuartos Colbún has decided to pause the development of these projects since the Guaiq
Slide 30: International expansion
4. Attractive portfolio of growth options International expansion OTHERS Tracking trends and business models KEY DRIVERS 1. Low per capita energy consumption 2. Stable regulatory frameworks / positive developments in STRATEGY Argentina 1. Preference for assets in operation 3. Expected increases in e
Slide 31: Value proposition: Leading position supported by competitive strengths
Value proposition Leading position supported by competitive strengths 1 2 3 PRUDENT 4 5 MAXIMIZING COST STRONG AND ATTRACTIVE EFFICIENT AND COMPETITIVE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED SUPPLY MANAGEMENT GROWTH OF OUR ASSET BASE CONTRACTS OPTIONS STAKEHOLDERS 31
Slide 32: Sustainability strategy
5. Maximizing value to all of our stakeholders Sustainability strategy SUSTAINABILITY IS OUR BUSINESS AND IT IS AWARDS AND RECOGNITIONS INTEGRATED IN ALL AREAS OF THE COMPANY 2019 2018 2018 Colbún obtained the Colbún listed in the Dow Colbún won the first place in the Jones Sustainability category F
Slide 33: Lessons learned from the community relationship
5. Maximizing value to all of our stakeholders Lessons learned from the community relationship 1 2 3 PERMANENT 4 5 EVERY WE DO NOT EARLY FOCUS ON DELEGATE APPROACH TO INVOLVEMENT OPERATIONAL/ PROJECT MUST COMMUNITY LOCAL AND ENVIROMENTAL BE A GOOD RELATIONSHIP STAKEHOLDERS MULTICHANNEL PERFORMANCE L
Slide 34: Agenda
AGENDA 1. COMPANY OVERVIEW 2. VALUE PROPOSITION 3. STRATEGIC AGENDA PROGRESS 4. CONCLUDING REMARKS 34
Slide 35: Update on strategic agenda progress: Overview
Update on strategic agenda progress Overview 1. Enter in to New Power 4. Complete digitalization and Purchase Agreements automation program During 2Q19, Colbún contracted ~490 Simplify operational, administrative and GWh/year of its generation with new maintenance processes. unregulated customers. 2
Slide 36: Agenda
AGENDA 1. COMPANY OVERVIEW 2. VALUE PROPOSITION 3. STRATEGIC AGENDA PROGRESS 4. CONCLUDING REMARKS 36
Slide 37: Concluding remarks
Concluding remarks 1. Shareholders: 4. Customers: Strong, reliable controlling group with a Diversified, solid and creditworthy portfolio strategic and long-term vision of the of clients. business. 2. Size: 5. Sustainability: Leading position in Chile’s power market and Integrated in all areas of th
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