Colbun Sa · BCS:COLBUN

Colbun Sa — JP Morgan Southern Cone & Andean Opportunities Conference 2018

36 slides from Colbun Sa's conference presentation, May 2018

  1. Slide 1: Company Presentation, May 2018

    JP MORGAN Southern Cone & Andean Opportunities Conference COMPANY PRESENTATION MAY 2018

  2. Slide 2: Agenda

    AGENDA 1. OVERVIEW 2. VALUE PROPOSAL 3. CONCLUDING REMARKS 2

  3. Slide 3: Company overview: Leading position in Chile & Peru

    Company overview Leading position in Chile & Peru THE COMPANY Installed Capacity Market Share1 Ownership 3,884 MW 17% / 8%  49.96% Matte Group 3,319 MW / 565 MW  9.58% Angelini Group Power-Plants  20.77% Pension Funds Transmission Lines 25 ~940 km  19.69% Others 24 / 1 Ratings KEY FINANCIALS Tot

  4. Slide 4: Agenda

    AGENDA 1. OVERVIEW 2. VALUE PROPOSAL 3. CONCLUDING REMARKS 4

  5. Slide 5: Value proposal: Leading position supported by competitive strengths

    Value proposal Leading position supported by competitive strengths 1 2 3 4 5 COST STABLE & PRUDENT ATTRACTIVE MAXIMIZING EFFICIENT AND PREDICTABLE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED CASH FLOWS MANAGEMENT GROWTH OF OUR ASSET BASE OPTIONS STAKEHOLDERS 5

  6. Slide 6: Value proposal: Leading position supported by competitive strengths

    Value proposal Leading position supported by competitive strengths 1 2 3 4 5 COST STABLE & PRUDENT ATTRACTIVE MAXIMIZING EFFICIENT AND PREDICTABLE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED CASH FLOWS MANAGEMENT GROWTH OF OUR ASSET BASE OPTIONS STAKEHOLDERS 6

  7. Slide 7: Generation assets diversified by technology & geography

    1. Cost efficient & diversified asset base Generation assets diversified by technology & geography 3,884 MW Inst. Capacity: 12,772 MW 1 FENIX POWER 1 565 MW / Gas  Hydro: 1,634 MW SEIN 4 Reservoir: 1,065 MW 12 Run-of-the-river: 532 MW CENTRAL ZONE:  Thermal: 2,250 MW 23,737 MW 210 MW / 1,128 MW SE

  8. Slide 8: Fenix Power: a relevant & efficient CCGT in Peru

    1. Cost efficient & diversified asset base Fenix Power: a relevant & efficient CCGT in Peru Most efficient CCGT in Peru SHAREHOLDERS KEY FIGURES Based on Heat Rate  51% Colbún LTM EBITDA 40 miles south of Lima  36% ADIA US$52 mm Capital of Peru and largest city of the country  13% Sigma 565 MW Ca

  9. Slide 9: 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. MEDIUM AND SH

  10. Slide 10: 100% of PPAs supplied with cost-efficient generation

    1. Cost efficient & diversified asset base 100% of PPAs supplied with cost-efficient generation CONTRACTUAL COMMITTMENTS VS GENERATION. (TWh) TWh 14 47% 50% 0.5 0.2 45% 12 0.2 0.4 0.5 40% 3.0 3.4 0.3 3.9 3.9 10 35% 3.2 3.6 30% 8 2.6 2.4 2.6 2.6 25% 6 2.6 12.3 2.5 11.4 11.1 11.0 11.0 11.2 20% 4 15% 6

  11. Slide 11: Relevant transmission assets

    1. Cost efficient & diversified asset base Relevant transmission assets Transmission lines Substations ~940 km 28 Market share 1 Annual EBITDA2 ~5% ~US$23 mm Length (km) Nacional 331 Zonal 79 Dedicada 531 Total 941 ~US$60 million in expansion projects in transmission Note: All figures as of Mar18 1

  12. Slide 12: Attractive markets

    1. Cost efficient & diversified asset base Attractive markets 1 GENERATION MATRIX. (%) 7% 15% 1% Hydro 29% 1%  Diversified generation profile. Coal  Stable regulatory framework. Natural Gas 19,132 27% 12,491 16%  US$ currency denominated markets. Diesel GWh GWh 66%  Investment grade countries. O

  13. Slide 13: Value proposal: Leading position supported by competitive strengths

    Value proposal Leading position supported by competitive strengths 1 2 3 4 5 COST STABLE & PRUDENT ATTRACTIVE MAXIMIZING EFFICIENT AND PREDICTABLE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED CASH FLOWS MANAGEMENT GROWTH OF OUR ASSET BASE OPTIONS STAKEHOLDERS 13

  14. Slide 14: High quality clients in Chile

    2. Stable & predictable cash flows High quality clients in Chile 1 CUSTOMER BASE PROFILE +100 52%/48% ~93% ~9 YEARS Total Regulated/ Customers Average life of customers unregulated with credit PPAs customers ratings 2 PPAs IN CHILE: MAXIMUM CONTRACTED ENERGY COMMITMENT (TWh) Regulated Customers Unre

  15. Slide 15: Stable cash flow profile supported by long-term PPAs in Peru

    2. Stable & predictable cash flows Stable cash flow profile supported by long-term PPAs in Peru 1 PPA PROFILE. 2 ENERGY SALES & INDEXATION. (%)  Average life of long-term PPAs of ~6 years. Spot US PPI  US$ FX adjusted and US$ denominated capacity payments. 26% 22%  ~75% contracted through 2023. 

  16. Slide 16: Significant increase in number of clients over the past 2 years in Chile

    2. Stable & predictable cash flows Significant increase in number of clients over the past 2 years in Chile 2016 2018 3 +100 UNREGULATED UNREGULATED CUSTOMERS CUSTOMERS 15 15 REGULATED REGULATED CUSTOMERS CUSTOMERS 6 +300 SELLING SELLING POINTS POINTS 16 Note: All figures as of Mar18

  17. Slide 17: Long-term PPAs to ensure cash flow stability

    2. Stable & predictable cash flows Long-term PPAs to ensure cash flow stability WHOLE-SALE POWER COMMERCIAL POLICY BASE OF ASSETS & PPAS LEVEL 1 Optimal Contracting level I. Renewable Capacity: Available Contracting Capacity Level Hydro, solar and wind II. Efficient thermal capacity: CCGT Coal and C

  18. Slide 18: PPAs renewal opportunities in Chile

    2. Stable & predictable cash flows PPAs renewal opportunities in Chile UNREGULATED CUSTOMERS REGULATED CUSTOMERS  Upcoming regulated auctions:  In the coming years there is a relevant amount of energy for large unregulated clients to be re- 13.4 TWh contracted.  Since 2017, Colbun has signed new

  19. Slide 19: Value proposal: Leading position supported by competitive strengths

    Value proposal Leading position supported by competitive strengths 1 2 3 4 5 COST STABLE & PRUDENT ATTRACTIVE MAXIMIZING EFFICIENT AND PREDICTABLE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED CASH FLOWS MANAGEMENT GROWTH OF OUR ASSET BASE OPTIONS STAKEHOLDERS 19

  20. Slide 20: Stable operational results & solid metrics

    3. Prudent financial management Stable operational results & solid metrics 1 EBITDA & EBITDA MG. (US$ million & %) 3 DEBT & NET DEBT. (US$ million) EBITDA Chile EBITDA Fenix Mg EBITDA Debt 800 45% 45% 45% 45% 50% 2,500 2,236 Net Debt 36% 54 52 2,000 1,894 600 40% 1,700 1,710 1,660 1,668 56 1,440 30%

  21. Slide 21: Stable operational results & solid metrics

    3. Prudent financial management Stable operational results & solid metrics 1 CASH POSITION. (US$ million) 3 P/E. (X) 1,200 1,081 64 881 * 59 833 810 60 900 667 600 40 21 300 261 17 20 14 13 0 2013 2014 2015 2016 2017 1Q18 0 2013 2014 2015 2016 2017 1Q18 LTM 2 DIVIDEND DISTRIBUTION. (US$ million & %)

  22. Slide 22: Clean debt profile US$1,668 million

    3. Prudent financial management Clean debt profile 1 DEBT PROFILE US$1,668 million 100% bonds 5.0% Interest Rate average US$1,318 million 94% USD and 6% UF 7.3 years average life US$350 million 100% Fixed rate 2 AMORTIZATION STRUCTURE. (US$ million) 600 Fenix Bonds 528 528 500 Colbun Bonds 400 300 2

  23. Slide 23: Value proposal: Leading position supported by competitive strengths

    Value proposal Leading position supported by competitive strengths 1 2 3 4 5 COST STABLE & PRUDENT ATTRACTIVE MAXIMIZING EFFICIENT AND PREDICTABLE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED CASH FLOWS MANAGEMENT GROWTH OF OUR ASSET BASE OPTIONS STAKEHOLDERS 23

  24. Slide 24: Expansion considerations

    4. Attractive portfolio of growth options Expansion considerations STRATEGY LOCAL EXPANSION MAIN GUIDELINES 1. Pipeline of Renewable Projects 1. Increase presence in Chile and a. Hydro Perú b. Solar and wind 2. Expand operations to selected countries in the region (Argentina 2. M&A Opportunities and

  25. Slide 25: Diversify our operations at a regional level

    4. Attractive portfolio of growth options Diversify our operations at a regional level COLOMBIA • Competitive electricity market with stable regulatory framework • Ample space to increase the per capita consumption of the country • System requires reliable operators OTHERS that provide security agai

  26. Slide 26: Large pipeline of growth options

    4. Attractive portfolio of growth options Large pipeline of growth options SAN PEDRO GUAIQUIVILO MELADO LOS CUARTOS EL MÉDANO HYDRO  Los Rios Region  La Puente y Melado,  Biobío River, Maule  San Clemente, PROJECTS Maule Region Region Maule Region  Inst. capacity: 170 MW  Inst. capacity: 316 M

  27. Slide 27: Value proposal: Leading position supported by competitive strengths

    Value proposal Leading position supported by competitive strengths 1 2 3 4 5 COST STABLE & PRUDENT ATTRACTIVE MAXIMIZING EFFICIENT AND PREDICTABLE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED CASH FLOWS MANAGEMENT GROWTH OF OUR ASSET BASE OPTIONS STAKEHOLDERS 27

  28. Slide 28: Sustainability strategy

    5. Maximizing value to all of our stakeholders Sustainability strategy SUSTAINABILITY IS OUR BUSINESS AND IT IS INTEGRATED IN ALL AREAS OF THE COMPANY  Since 2015 we started publishing an Integrated Annual Report, with all the financial, social and environmental information of the Company. 28

  29. Slide 29: Adding value to all of our stakeholders

    5. Maximizing value to all of our stakeholders Adding value to all of our stakeholders STAKEHOLDER EXAMPLES OF ADDED VALUE CUSTOMERS  Secure, competitive and sustainable energy 16,587 GWh of energy sold  Long-term relationships INVESTORS US$692 million of EBITDA  Profitability and economic value

  30. Slide 30: Awards and recognitions

    5. Maximizing value to all of our stakeholders Awards and recognitions 2017 2016 2017 2017 2017 2017 Colbún listed in the Dow Colbún listed in the Dow Colbún listed in the ranking Angostura power plant was Colbún obtained the first Fenix power plant was Jones Sustainability Index Jones Sustainabilit

  31. Slide 31: Only power-generation company in Chile listed in the DJSI EM

    5. Maximizing value to all of our stakeholders Only power-generation company in Chile that listed in the DJSI EM DJSI 803 10% 91 Emerging largest emerging market Top companies in DJSI Companies companies of the S & P sustainability in each Markets Global Broad Market sector Emerging Markets 63 40% D

  32. Slide 32: Highest standards of corporate governance

    5. Maximizing value to all of our stakeholders Highest standards of corporate governance VISION AND MISSION 1 CORPORATE GOVERNANCE STRUCTURE. Personnel, managers, directors and the Board’s advisory committees are responsible for enforcing Shareholders and Stakeholders Colbún’s corporate governance.

  33. Slide 33: Agenda

    AGENDA 1. OVERVIEW 2. VALUE PROPOSAL 3. CONCLUDING REMARKS 33

  34. Slide 34: Concluding remarks

    Concluding remarks 1 Shareholders: Strong, reliable controlling group with a strategic and long-term vision of the business. 2 Size: Leading position in Chile’s power market and a relevant presence in Peru. 3 Management: Experienced management and high standards of corporate governance. 4 Customers:

  35. Slide 35: Disclaimer & Contact Information

    Disclaimer & Contact Information  This document provides information about Colbún S.A. In no case this document constitutes a comprehensive analysis of INVESTOR RELATIONS the financial, production and sales situation of the company. TEAM CONTACT  To evaluate whether to purchase or sell securities

  36. Slide 36: 36

    36

Colbún — JP Morgan Southern Cone & Andean Opportunities Conference 2018 on 6ix