Colbun Sa · BCS:COLBUN

Colbun Sa — J.P. Morgan 6th Annual Global Emerging Markets Corporate Conference 2015

31 slides from Colbun Sa's conference presentation, Feb 25, 2015

  1. Slide 1: J.P. Morgan 6th Annual Global Emerging Markets Corporate Conference

    J.P. Morgan 6th Annual Global Emerging Markets Corporate Conference February 23-25, 2015 1

  2. Slide 2: Agenda

    2 AGENDA 1. CHILEAN ELECTRICITY SECTOR 2. OVERVIEW 3. OPERATIONS 4. FINANCIALS 5. PROJECTS 6. KEY INVESTMENT HIGHLIGHTS 2

  3. Slide 3: Sector Segmentation

    3 SECTOR SEGMENTATION 3 SUB-SECTORS 4 SEPARATE GRIDS SING Arica 4,340 MW - 25% 17,230 GWh - 25% GENERATION Antofagasta SIC Tal-Tal 15,085 MW - 75% 52,207 GWh - 74% TRANSMISSION Regulated sectors Santiago (concessions) DISTRIBUTION Castro Chaitén SEA 50 MW - 0% RELEVANT INSTITUTIONS 155 GWh - 0% Coch

  4. Slide 4: Market Structure

    4 MARKET STRUCTURE Main Players in the Generation Sector-SIC GENERATORS 36% REGULATED UNREGULATED SPOT 26% CUSTOMERS CUSTOMERS MARKET 21% 17% >15 players DISTRIBUTION “FREE” CDEC COMPANIES CUSTOMERS Regulated Unregulated Marginal Cost Endesa Colbún Gener Others Auction Tariffs Auction Tariffs /Spot

  5. Slide 5: Power Generation and Demand in Chile

    5 POWER GENERATION AND DEMAND IN CHILE Power Generation – SIC (TWh) Electricity Demand – SIC (TWh) 50 50 Diesel 3% 45 45 40 LNG 16% 40 Gas 0% 35 35 Unregulated: ~40% 30 30 Coal 28% 25 25 20 20 15 Others 15 Regulated: ~60% Diesel-Fuel LNG Hydro 45% 10 10 Gas Unregulated Demand 5 Coal /Petcoke 5 Regul

  6. Slide 6: Agenda: Overview

    6 AGENDA 1. CHILEAN ELECTRICITY SECTOR 2. OVERVIEW 3. OPERATIONS 4. FINANCIALS 5. PROJECTS 6. KEY INVESTMENT HIGHLIGHTS 6

  7. Slide 7: Overview

    7 OVERVIEW Main Figures Ownership Intern. Ratings As of Dec14 (US$ million) • Fitch: BBB • Assets: 6,400 24% • Equity: 3,400 49% • S&P: BBB- (-) 17% • Mkt Cap: 5,000 10% Local Ratings • EBITDA LTM: 537 • Fitch: A+ Matte Group Angelini Group • Net Debt: 1,061 Pension Funds Others • Humphreys: AA- POW

  8. Slide 8: Colbún is the Second Largest Generator in the SIC

    8 COLBUN IS THE SECOND LARGEST GENERATOR IN THE SIC Installed capacity of 3,278 MW ~ 21% Market Share 48% Hydro 1,589 MW 532 MW Run-of-the-river – 33% 1,057 MW Reservoir – 67% 3,278 MW 52% Thermal 1,689 MW 766 MW CCGT – 45% 342 MW Coal – 20% 581 MW Diesel – 35% POWER SECTOR OVERVIEW OPERATIONS FINAN

  9. Slide 9: High Quality Clients

    9 HIGH QUALITY CLIENTS 1 2 Sales by Type of Costumer (%) Sales Volume by Customer (%) Chilectra Unregulated (BBB+/BBB+ )* Regulated 22% CGED (Local 40% Codelco A+) (A/A+) 19% 60% 29% AngloAmeric Saesa (Local an AA) Others (BBB/BBB+) 16% 5% 9% 3 4 14.000 Historic Sales by Type of Costumer (GWh) Avera

  10. Slide 10: Commercial Strategy

    10 COMMERCIAL STRATEGY Define optimal PPA level Asset Base + Risk sharing mechanisms 4,000 GWh – OC 5,000 GWh Dual CCGT ~12,000 GWh 1,500 GWh 2,500 GWh – Coal CPI Fossil fuels fx (Spot Price) 8,000 GWh – Hydro(*) (*) Under medium-to-dry hydrological conditions. This includes output of the Angostura

  11. Slide 11: Commercial Position

    11 COMMERCIAL POSITION Contractual Sales vs. Generation (GWh) GWh 120% 546 12.000 11,655 10,998 10,687 2,240 9,805 546 100% 3,011 10.000 3,234 4,431 3,794 1,901 80% 8.000 4,602 2,242 2,893 2,623 2,418 60% 6.000 1,853 2,616 95 4.000 40% 6,912 7,224 6,655 7,204 5,462 6,085 5,233 4,857 2.000 20% 0 0% 2

  12. Slide 12: Leveraging Our Combined Cycles

    12 LEVERAGING OUR COMBINED CYCLES 1 2 Metrogas extension contract ENAP contract  Signed in Aug14  Signed in Nov14  Supply until 2019  Supply during 2015  Flexible gas price  Flexible gas price  Allowing to cover long term needs in order to fulfill our contracts  Providing flexibility to our

  13. Slide 13: Agenda: Operations

    13 AGENDA 1. CHILEAN ELECTRICITY SECTOR 2. OVERVIEW 3. OPERATIONS 4. FINANCIALS 5. PROJECTS 6. KEY HIGHLIGHTS 13

  14. Slide 14: Power Plant Availability

    14 POWER PLANT AVAILABILITY 1 Hydro Power Plants 100% 97% 97% 96% 95% 96% 92% 90% 80% 70% 2009 2010 2011 2012 2013 2014 2 Thermal Power Plants 100% 93% 94% 91% 89% 90% 78% 79% 80% 70% 2009 2010 2011 2012 2013 2014 Graphs Sources: Colbún. POWER SECTOR OVERVIEW OPERATIONS FINANCIALS PROJECTS HIGHLIGHT

  15. Slide 15: Improving Hydrological Conditions

    15 IMPROVING HYDROLOGICAL CONDITIONS 1 2 Rainfalls at Armerillo (mm) Colbún Hydro Generation (GWh) 7.000 2.000 +40% Y/Y 6.000 +37% Y/Y 1.500 5.000 4.000 1.000 Acc. 2013: 1,414 3.000 Acc. 2013: 4,858 500 Acc. 2014: 1,983 2.000 Acc. 2014: 6,655 1.000 0 0 2009 2010 2011 2012 2013 2014 2009 2010 2011 20

  16. Slide 16: Angostura: Successful Commissioning

    16 ANGOSTURA: SUCCESSFUL COMMISSIONING 1 2 Angostura’s Figures Angostura Generation (GWh) 600  Capacity : 316 MW 533 500 Acc. 2014:  Expected Annual Gx.: 1,500 GWh 1,301 GWh 400 378  2014 Availability: 97% 300 274  CAPEX (Including Tx. Lines):~ MMUS$760 200 116 100 3  Start up: Abr14 -  46 fam

  17. Slide 17: Santa María I: Key Base Load Capacity for the System

    17 SANTA MARÍA I: KEY BASE LOAD CAPACITY FOR THE SYSTEM 1 2 Santa María I’s Figures Santa María I Generation (GWh)  Capacity: 342 MW 3.000 2,616 2,623  Expected Annual Gx: 2,500 GWh 2.500 2.000 1,853  CAPEX (including the Tx line):~ MMUS$ 750 1.500  Start up: Aug12 1.000 500 96 - 2011 2012 2013

  18. Slide 18: Sustainability as a Key for Future Growth

    18 SUSTAINABILITY AS A KEY FOR FUTURE GROWTH 2014 Awards  Colbún received the third place distinction in the "Recyclápolis - El Mercurio" award in Coronel due to the company sustainable practices in emission compensation.  Colbun obtained the “HUB Sustainability” award in the Entrepreneurship cate

  19. Slide 19: Agenda: Financials

    19 AGENDA 1. CHILEAN ELECTRICITY SECTOR 2. OVERVIEW 3. OPERATIONS 4. FINANCIALS 5. PROJECTS 6. KEY INVESTMENT HIGHLIGHTS 19

  20. Slide 20: Main Figures and Metrics

    20 MAIN FIGURES AND METRICS 1 2 Operating Revenues (US$ million) EBITDA (US$ million) & EBITDA Mg (%) 50% 600 2.000 537 1,696 40% 1,503 500 1.500 1,333 1,409 400 352 36% 30% 287 1.000 300 205 20% 200 20% 21% 500 15% 10% 100 0 0 0% 2011 2012 2013 2014 2011 2012 2013 2014 3 4 100 Net Income (US$ milli

  21. Slide 21: Main Figures and Metrics

    21 MAIN FIGURES AND METRICS 1 2 2.000 Debt & Net Debt (US$ million) 7 Net Debt / EBITDA Debt Net Debt 5.9 6 5.2 1.500 5 4.1 4 1.000 3 2.0 2 500 1 0 0 2011 2012 2013 2014 2011 2012 2013 2014 3 4 G-Spread Colbun Yankee Bonds (Basis Net Interest Coverage 450 points) 10.9 400 420 12 10.4 10 350 7.8 7.6

  22. Slide 22: Debt and Liquidity

    22 DEBT AND LIQUIDITY 1 Debt Profile Type Currency Interest Rate  Total Debt: MMUS$ 1,894 UF  Avrg. Maturity: 6.4 years BANKS 10%  Avrg. USD Interest Rate: 4.9% 22%  Cash: MMUS$ 833 Net Debt: MMUS$ 1,061 BONDS  78% USD FIXED (As of Dec14) 90% 100% 2 3 800 Amortization Structure (US$ million) Ba

  23. Slide 23: Agenda: Projects

    23 AGENDA 1. CHILEAN ELECTRICITY SECTOR 2. OVERVIEW 3. OPERATIONS 4. FINANCIALS 5. PROJECTS 6. KEY INVESTMENT HIGHLIGHTS 23

  24. Slide 24: Colbún Has Several Growth Opportunities

    24 COLBÚN HAS SEVERAL GROWTH OPPORTUNITIES Projects in Chile La Mina – Hydroelectric Project  34 MW of Capacity  190 GWh of expected annual generation  Phase: Under Construction since Dec14  Qualifies as NCRE Santa María II – Coal-fired Project  350 MW of Capacity  2,500 GWh of expected annual

  25. Slide 25: La Mina Hydroelectric Run-of-the-River

    25 LA MINA HYDROELECTRIC RUN-OF-THE-RIVER 1 Main Features  Location: San Clemente, Maule region  Capacity: 34 MW 2 Location  Annual Generation: ~ 180-195 GWh  CAPEX including the Tx. line: ~US$120-130 million  Construction + commissioning period: ~25-30 months  Status: Under construction since

  26. Slide 26: Santa Maria II Coal-Fired Power Plant

    26 SANTA MARIA II COAL-FIRED POWER PLANT 1 2 Main Features Location  Location: Coronel, Biobío region  Capacity: 350 MW Concepción  Annual Generation: ~2,500 GWh  Construction period: ~43-45 months Santa María II  2014 Main Events:  RCA/RSE commitments Coronel compliance  Stakeholders sociali

  27. Slide 27: San Pedro Hydroelectric Power Plant

    27 SAN PEDRO HYDROELECTRIC POWER PLANT 1 2 Main Features Location  Location: Panguipulli and Los Lagos, Los Ríos region  Capacity: 150 MW San Pedro  Annual Generation: ~900-950 GWh  Construction period: ~40-45 months Panguipulli  2014 Main Events:  Socialization process Valdivia  Preparation

  28. Slide 28: Searching for Investment Opportunities in the Region

    28 SEARCHING FOR INVESTMENT OPPORTUNITIES IN THE REGION Special focus on Assets in Colombia and Perú Colombia Country Attractiveness • Attractive business environment Perú • Positive economic perspective • Well established regulatory framework • Growing electricity consumption • Diversification of:

  29. Slide 29: Agenda: Key Investment Highlights

    29 AGENDA 1. CHILEAN ELECTRICITY SECTOR 2. OVERVIEW 3. OPERATIONS 4. FINANCIALS 5. PROJECTS 6. KEY INVESTMENT HIGHLIGHTS 29

  30. Slide 30: Key Investment Highlights

    30 KEY INVESTMENT HIGHLIGHTS  Size: Second-largest generation company in Chile’s largest electricity grid.  Competitive: High-quality and diversified asset portfolio.  Stable: Diversified, solid and creditworthy customer portfolio.  Shareholders: Strong, reliable controlling group with a strateg

  31. Slide 31: Investor Relations Team Contact

    This document provides information about Colbún S.A. In no case this document constitutes a comprehensive analysis of the financial, production and sales situation of the company. To evaluate whether to purchase or sell securities of the company, the investor must conduct its own independent analysi

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