Enel Chile Sa · BCS:ENELCHILE
Enel Chile Sa — Investor Day (December 2020)
65 slides from Enel Chile Sa's investor day presentation, Dec 1, 2020
Slide 1: Virtual Investor Day Strategic Plan 2021-23
Virtual Investor Chile Virtual Investor Day Strategic Plan 2021-23 Enel Chile December 1st, 2020 Open power for a brighter future Chile
Slide 2: Agenda
Agenda Chile Paolo Chilean Market Context Pallotti Our position CEO Our ambition 2021-23 Strategy Rationale Strategic plan Closing Remarks Giuseppe Our vision in numbers Turchiarelli Financial management CFO De risking our business 2021-23 Strategic plan Earnings & targets Chile
Slide 3: Paolo Pallotti, CEO
Virtual Investor Day Strategic Plan 2021-23 Paolo Pallotti CEO Chile
Slide 4: Chilean Market Context
Chile Chile Chilean Market Context 3
Slide 5: Transition towards low-carbon energy system (1/2)
Transition towards low-carbon energy system (1/2) The Chilean reality and opportunities Chile Decarbonization Chilean renewable growth potential Chile on the path toward a Renewable potential +70x clean generation matrix compared to current installed capacity1 Emissions reduction Total 1.100 MtCO2eq
Slide 6: Transition towards low-carbon energy system (2/2)
Transition towards low-carbon energy system (2/2) The Chilean reality and opportunities Chile Technological evolution Electrification Digital revolution and new New energy uses and decarbonization technologies boosting efficiency will increase energy consumption Solar energy costs Energy ~80 TWh -80
Slide 7: A regulatory framework in evolution
A regulatory framework in evolution Distribution Chile Reform of Distribution regulatory framework New tariff regime 2020-2024 New remuneration: 6% after taxes discount rate applies New quality standards related to SAIDI and SAIFI Tariff Reset 2020: Decree expected by 2H21, with retroactive ef
Slide 8: A regulatory framework in evolution
A regulatory framework in evolution Market Chile Portability Law Proposed type of clients Market liberalization on gradual pace Large >5,000 KW customers (already Free clients) Once approved, government has up to 18-months to define implementation rules [20-5,000] Medium KW Customers (Potentiall
Slide 9: Hybridification
Hybridification Batteries and Hydrogen Chile Flexibility framework H2 National Strategy H2 Participative Strategy1 Renewables + Batteries + National strategy launched on public consultation Flexibility strategy proposal to be presented in 2020 US$ 50 mn funding to support companies to invest i
Slide 10: Responding to COVID-19
Responding to COVID-19 Measures to ensure the safety of our people and business continuity Chile Our people & Operation Our clients Our communities 74% 100% Boosting digitalization to mitigate impacts in More power of Enel Chile total of our plants collection together personnel and networks working
Slide 11: Our positioning
Chile Chile Our positioning 10
Slide 12: Enel Chile at a glance
Enel Chile at a glance Chile The largest utility in Chile with a 4.7 GW Leader in renewables and decarbonization with 2.5 GW Highly flexible & efficient. Based on LNG Renewable Capacity a diversified portfolio Thermal Capacity strong, unique and resilient portfolio, 2.0 Million clients Benchmark in
Slide 13: Our journey & Value proposition
Chile Our journey & Value proposition 12
Slide 14: Our journey toward CO2 reduction, reshaping our Company into platform-based model
Our journey toward CO2 reduction, reshaping our Company into platform-based business model… Chile Utility as a Platform The pathway to 0% Coal generation Zero Coal Leading the Chilean decarbonization process Speed up Looking forward decarbonization Integrated offering of commodity and Decarbonizati
Slide 15: The needs of clients are evolving
… to manage increasing levels of Chile complexity, and new clients needs Climate change Digital The needs oriented Digital clients +7 TWh/year in 2019 of clients are PPAs 100% renewable +50% Interactions During 2020 evolving Clients centricity constantly Energy as a service - Partnership with 292 k
Slide 16: Open power for a brighter future
By a solid sustainable long-term strategy process … Chile Open power for a brighter Sustainability planning process future: We empower sustainable Environmental1 Social1 Governance1 progress • Decarbonization • People we work with • ISO 37001 • Electrification • Community Engagement • Human Right •
Slide 17: Consolidated governance practices and policies
… and consolidated Governance practices and policies… Chile Governance We take care of transparency We care about the environment Integrity in our core as a and privacy protection communities, and our workers Ethical code Sustainability and backbone Tax transparency and reporting Community Relations
Slide 18: Improvements in main ESG scores
… reflecting in the sharp improvements of our main ESG scores Chile MSCI1 Sustainalytics FTSE Russell1 SAM ESG Rating A 2019 2020 88 Categoría 1 3.2 84 BBB 2.7 76 26.2 30 Categoría 1 Categoría 1 De-risking 2018 2019 2018 2019 2018 2019 2020 Scale from CCC to AAA Scale from 100 to 0 Scale from 0 to 5
Slide 19: Our ambition
Chile Our ambition 18
Slide 20: Decarbonization: Energy Transition leader in Chile
Decarbonization Energy Transition leader in Chile, fostering the decarbonization… Chile Strategic actions Renewables growth (GW) 2023 Net installed capacity Support profitability through 9.0 000 23% de-risking our matrix 8.0 000 Thermal 7% 0% 7.0 000 16% 2.4 coal 38% >85% 6.0 000 Solid pipeline to e
Slide 21: Robust pipeline and new technologies development
Decarbonization … supported by a robust pipeline and new technologies development… Chile Renewables pipeline (GW) H2 Pilot project GENERATION STORAGE First pilot project for green hydrogen production in Chile 5.4 JV with AME and prospective 13.8 partners 4.6 1.2 Electrolyzer fueled by wind 2.6 energ
Slide 22: Coal phase-out strategy
Decarbonization … backboned by our coal phase-out strategy Chile Coal capacity evolution (GW) 0.6 2020E 2022 2023 Coal production - 0.5 (TWh) 2.0 0.1 0.5 0.5 Coal production on 10% 0.7% - 0.4 Coal phase out total 0.4 0.4 May 2022 Coal emissions 1.8 0.1 - 0.3 (mn ton CO2) 0.3 0.3 Plants YE1 (#) 1 - -
Slide 23: To be fully decarbonized by 2050
Decarbonization To be fully decarbonize by 2050 Chile CO2 equivalent specific emissions(1), gCO2/kWh -64% 500 .000 450 .000 400 .000 350 .000 300 .000 FULL 250 .000 DECARBONIZATION 200 .000 278 Scope 1 150 .000 228 204 (gCO2/kWh) 100 .000 50. 000 <100 0.0 00 2017 2019 2020E 2023 2050 Emissions free
Slide 24: Networks: improvements in quality and resilience
Networks Improvements in the quality and resilience of our networks Chile Strategic actions Key business drivers Main KPIs 2020E 2023 Ensuring the highest level of Digitization End users 2.0 2.1 (mn) quality and efficiencies Energy distributed 15.8 16.9 (TWh) Reliability Improving clients journey an
Slide 25: Electrification
Electrification To be our clients reference choice, enabling electrification, decarbonization and share value creation Chile Strategic actions Main KPIs Recharging 2020E 2023 solutions for Promoting electrification, +17k Charging Points1-2 2030E Mining sector efficiency and sustainability (public an
Slide 26: Strategy Rationale
Chile Strategy Rationale 25
Slide 27: Anchored by a value-added portfolio, platforms and digitization
Enel Chile anchored by a value-added portfolio, platforms and digitization Chile Customer Going into platformization Digitization Initiatives centricity evOs X-Installer Digital power plants By Design: Asset digitization and connectivity to control room Remote controlled and monitored centrally from
Slide 28: Capex allocation with direct impact on SDGs
With Capex allocation with direct impact on SDGs Chile CAPEX by SDG 2021-23 Circular economy VALUE & Fog collection in PV plants SUSTAINABLE 2% Reuse of concrete from damaged poles GROWTH 20% US$ 2.2 bn Capex related to SDGs 71% PV modules and EV Chargers integrated in Reverse logistic service for n
Slide 29: Delivering value for ALL
Delivering value for ALL Chile Shareholders Society Environment Cumulated Temporary Job DPS (US$/sh ‘000)1 creation deploying new CO2 Emissions reduction renewable capacity (gCO2/KWh) 6.0 5.0 200.00 4.0 5.1 4.6K 5.8K 150.00 204 100.00 50.00 <100 3.0 3.7 2020E 2023 0.00 2020E 2023 2.0 Just transition
Slide 30: Giuseppe Turchiarelli, CFO
Virtual Investor Day Strategic Plan 2021-23 Giuseppe Turchiarelli CFO Chile
Slide 31: Our vision in numbers
2021-2023 Our vision in numbers
Slide 32: Strategic plan at a glance
Strategic plan at a glance Chile EBITDA (US$ bn) Net Income (US$ bn) CAPEX (US$ bn) Net debt/EBITDA +38% +38% -7% -1.2x 1.2 0 3.0 2.5 1.0 0 2.5 3.1 2.4 0.8 0 0.7 1.6 2.0 0.5 1.9 1.5 1.2 0.6 0 0.4 0 1.0 0.2 0 0.5 0.0 0.0 0 2020E 2023 2020E1 2023 2020-22 2021-23 2020E 2023 EBITDA FFO/ 36%1 43% 78% 88%
Slide 33: Capex allocation focusing on de-risk margins and electrification
Capex allocation focusing on de-risk margins and accelerating the electrification Chile Total Capex 2021-23 Capex development by business line Capex allocation by year 1% 1% 5% 2021 59% 2.4 20% 2.4 4% 1.7 72% 21% 70% US$ bn US$ bn US$ bn 90% 2022 25% 8% 8% 2023 16% Renewables Thermal Asset developme
Slide 34: Power Generation: capex and EBITDA evolution
Power Generation Generation capex driven by decarbonization and growth on renewables Chile Generation CAPEX 2021-23 EBITDA evolution 2020E-23 (US$ bn) Total CAPEX Development CAPEX +32% 0.27 0.08 (0.15) 13% 4% 5% 0.07 1.3 3% 0.04 1.8 1.6 US$ bn 15% US$ bn 73% 1.0 87% 1 Asset development Solar Hydro
Slide 35: Power Generation: energy sales balance
Power Generation Decarbonization and renewable expansion is also driving the energy sales balance Chile Production Evolution (TWh) Energy balance (TWh) Performance indicators +24% +17% 2020E 2023 CAGR PPA price2 -5% 30. 0 26.3 26.3 76 66 (US$/MWh) 25. 0 24.2 22.5 22.5 2.2 20. 0 19.5 3.0 EBITDA/MWh 5
Slide 36: Power Generation: commercial strategy
Power Generation Commercial strategy designed to bring long-term visibility and geographic diversification Chile Portfolio by off-taker PPAs geographic location PPAs by residual duration 2023 +12% 2019 2019 18% 54% 14% 23% 2023 35% 23.5 TWh 42% 29% 2021-23 11% 67% 68% 35% 26.3 TWh 19% 9% 48% 29% Fre
Slide 37: Networks: focus on resiliency and quality
Networks Focus on resiliency and quality to foster a more efficient networks Chile Networks CAPEX 2021-23 EBITDA evolution 2020E-23 (US$ bn) +42% 34% 0.04 0.3 53% 0.49 35% 0.49 0.02 0.04 (0.02) 29% US$ bn US$ bn 0.2 0.01 66% 30% 12% 0.21 71% 70% Distribution Quality & resilience 2020E Demand Index T
Slide 38: Enel X: accelerating electrification of consumption
Electrification Enel X: accelerating the electrification of consumption Chile Enel X CAPEX 2021-23 EBITDA evolution 2021-23 (US$ mn) 2x 23% 3.7 4.9 4.1 39 21 7.0 36 5% US$ mn 20 72% 2020E B2B B2C B2G Fx 2023 B2B B2C B2G 37
Slide 39: Main strategic actions to reach sustainable EBITDA growth
Main strategic actions, to reach sustainable EBITDA growth by 2023 Chile EBITDA evolution 2020E-23 (US$ bn) +2.4GW renewable in operation up to 2023 and 0% coal production since +38% June/22 0.02 0.02 Renewables PPAs and energy 0.09 Strategic actions 0.32 services addressing clients 1.6 sustainabili
Slide 40: Financial Management
2021-2023 Financial Management 39
Slide 41: Debt evolution reflects capital allocation dynamics
Debt evolution reflects capital allocation dynamics, supported by high cash conversion levels Chile Source of funds allocation 2021-23 (US$ bn) Net debt evolution (US$ bn) Net Debt FFO/EBITDA 7.0 5.0 (2.4) 6.0 0.2 4.0 -14% 4.0 3.8 5.0 3.0 4.0 (1.0) 3.0 3.6 2.0 3.3 3.1 2.0 1.0 0.7 1.0 78% 88% 58% 0.0
Slide 42: Sound liquidity position, hedged debt and smooth maturities
Sound liquidity position, hedged debt and smooth maturities Chile Financial Flexibility & main rations Debt maturity by year (US$ bn) YE 2020E YE 2023 3.5 Maturities/Gross Debt New refinancing 3.0 (avg. gross debt) 3.2% 3.5% 3.1 2.5 5% 12% 6% Avg. term of new debt 7 8 2.0 (years) 1.5 % of US$ denomi
Slide 43: Sensitivities
2021-2023 Sensitivities 42
Slide 44: Risks & opportunities sensitivities
2021-2023 Risks & opportunities sensitivities Annual average EBITDA impact Chile Commodities & CPI Demand (%) (US$ bn) (US$ bn) +1% +10% commodities Macroeconomics 0.01 0.01 +1% CPI -1% -0.01 -10% commodities -0.01 -1% CPI Hydro production (TWh) (US$ bn) +1TWh Hydro Generation 0.04 -1TWh -0.06 43
Slide 45: Earnings & Targets
2021-2023 Earnings & Targets 44
Slide 46: Visible value creation for our shareholders
Visible value creation for our shareholders Chile CAGR (%) Plan main drivers 2020E1 2021 2022 2023 2020E-23 EBITDA (US$ bn) 1.2 1.4~1.5 1.4~1.6 1.5~1.7 +9 / +13% Net income (US$ bn) 0.4~0.6 0.6~0.7 0.6~0.7 0.6~0.8 +11 / +16% Pay-out ratio2 50% ≥ 50% ≥ 50% ≥ 50% - 1. 2020E adjusted by decarbonization
Slide 47: Closing Remarks
2021-2023 Closing Remarks 46
Slide 48: Closing remarks
Closing remarks Chile Continue to Decarbonization Platformization and Networks to support embrace strategy paved by combined offerings renewables sustainability, renewables and are key to address expansion and ESG tear 1 solid pipeline new clients needs electrification player in Latam 47
Slide 49: Disclaimer
Strategic Plan 2021-2023 Disclaimer Chile This presentation contains statements that could constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this announcement and include statements regar
Slide 50: Contact us
Strategic Plan 2021-2023 Contact us Chile Contacts Email ir.enelchile@enel.com Phone +56 2 2630 9606 Channels Follow us Website Isabela Klemes Enel.cl Head of Investor Relations Enel Chile Investor Relations team Mobile App Catalina González Enel Investors Claudio Ortiz Pablo Contreras Download app
Slide 51: Annexes
* a | j J 2021-2023 . =: oa Annexes we { =e > o or. Nie ay 8 WY + wee ad ¥ me Ke
Slide 52: Main assumptions
iM: 4 A - ae 2083 es Main assumptions” f lo aD ¥ + at) - Py e ” a Sel V .
Slide 53: Main Assumptions
Main Assumptions Main assumptions Chile GDP (%) CPI (%) Avg. FX against US$ Demand Growth (%) 2021 2022 2023 2021 2022 2023 2021 2022 2023 2021 2022 2023 5.2 4.3 3.9 2.6 2.3 2.6 732 700 680 4.5 2.5 2.5 Commodities’s prices 2020E 2021 2022 2023 Gas Henry Hub ($/mmbtu) 2.0 2.4 2.6 2.7 Oil Brent ($/bbl
Slide 54: Capex by Business line
Capex by Business line Chile Gross Capex (US$ bn) Business line 2020E 2021 2022 2023 Ʃ 2021-2023 Renewables 0.9 1.0 0.4 0.3 1.6 Thermal 0.0 0.1 0.1 0.1 0.2 Networks 0.1 0.2 0.2 0.2 0.5 Enel X 0.0 0.0 0.0 0.0 0.0 Others 0.0 0.0 0.0 0.0 0.0 Total 1.0 1.2 0.7 0.5 2.4 53
Slide 55: Installed capacity and Production
Installed capacity and Production Chile Net Installed Capacity (GW) Production (TWh) Technology 2020E 2021 2022 2023 Technology 2020E 2021 2022 2023 CCGT 1.5 1.5 1.5 1.5 CCGT 3.8 2.8 2.3 2.3 Coal 0.3 0.3 0.0 0.0 Coal 2.0 1.7 0.1 0.0 Oil & Gas 0.6 0.6 0.6 0.6 Oil & Gas 0.5 0.0 0.0 0.0 Hydro 3.6 3.6 3
Slide 56: Sustainability Plan
2021-2023 Sustainability Plan
Slide 57: Sustainable business model, driving change through growth accelerators
Sustainable business model, driving change through growth accelerators Chile 2021 – 2023 Sustainability Plan * 56 * Growth accelerators include innovation, cyber security, digital supports, circular economy and sustainable finance
Slide 58: People centricity
Local and global communities People centricity Chile Plan actions 2020E1 2030 targets 1 High-quality, inclusive and fair education ~ 99,800 beneficiaries 240,000 beneficiaries in 2030 Access to affordable and clean energy ~ 207,000 beneficiaries 315,000 beneficiaries in 2030 Employment and sustainab
Slide 59: Corporate Governance
2020-2022 Corporate Governance
Slide 60: Shareholders Structure
Shareholders Structure Organization structure Chile Enel Chile shareholders1 64.9% Others 1.4% Pension Funds Chile 14.5% Institutional Market Cap2 Enel SpA Investors 5.0 $ bn 64.9% 16.2% 100.0% 93.5% 99.1% 100.0% ADRs Green Power Generación Chile Distribución Chile Enel X 3.1% 1. As of October 31 20
Slide 61: Focus on Corporate Governance
Focus on Corporate Governance Corporate governance structure Chile Shareholders’ meeting Audit firm 14% 43% BoD’s composition Board of Directors (7 members) 43% Non executive Executive Independent Functions: Directors Committee Audit committe Sustainability committe Related parties transactions 60
Slide 62: Board composition
Focus on Corporate Governance Board composition Chile Board of Directors Board of Directors’ diversity Herman Chadwick Chair Giulio Fazio Director 57% Age Gender diversity diversity Salvatore Bernabei Director 43% 100 % 41-50 Over 50 Male Female Daniele Caprini Director Directors’ Committee (C) Fern
Slide 63: CEO's short-term variable remuneration
CEO’s short-term variable remuneration Focus on Corporate Governance Chile Macro objective Objective Type of target Weight Range Profitability Net Income Chile 25% Maximum 120% Economic Efficiency OPEX Chile 20% Maximum 120% Economic Cash and debt FFO Chile 15% Maximum 120% Financial management Safe
Slide 64: Management of the company
Focus on Corporate Governance Management of the company Chile Management Team P. Pallotti Chief Executive Officer A. Pellegrini Sustainability & Community Relations G. Turchiarelli Chief Financial Officer R. Puentes Procurement L. Schnaidt People and Organization A. Barrios Digital Solutions M. De M
Slide 65: Policies, principles and codes
Focus on Corporate Governance Policies, principles and codes Chile Ethics, Integrity, Human Rights, and Diversity • Ethical code • Zero Tolerance Plan for Corruption • Global Compliance Program on Corporate Criminal Liability • Criminal Risk Prevention Model • Compliance Program for Free Competition