Enel Chile Sa · BCS:ENELCHILE
Enel Chile Sa — Investor Presentation (May 2021)
74 slides from Enel Chile Sa's investor presentation, May 2021
Slide 1: Enel Chile Corporate presentation May 2021
Chile Enel Chile Corporate presentation May 2021
Slide 2: Enel Chile as part of Enel Group
Enel Chile as part of Enel Group Chile Enel Group is leading the new energy world… 1st network 49 GW 39 GW 6 GW 70 mn operator1 Renewable capacity2 Conventional Demand response customers4 capacity3 New services enable Leading decarbonization World’s largest private decarbonization and Largest retail
Slide 3: 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 2.4 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 4: Key investment considerations
Chile Key investment considerations Diversified and resilient long-term investment vehicle in energy sector in the country ESG fully integrated into the corporate long-term strategy Leading the decarbonization process with no coal exposure by 2022 First renewable operator in Chile with 77% renewable
Slide 5: Chilean Market Context
Chile Chile Chilean Market Context 4
Slide 6: 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 7: 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 ~78 TWh -80
Slide 8: A regulatory framework in evolution: Networks
A regulatory framework in evolution Networks Chile Tariff updates Distribution 2020-2024 Consultant final report on reference model Company to be issued by July/21. Regulator technical report to be issued on Nov/21 Tariff Decree to be issued on 1H 2022. Transmission 2020-2023 Final regulator
Slide 9: A regulatory framework in evolution: Market
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 10: A regulatory framework in evolution: Generation
A regulatory framework in evolution Generation Chile Tariff stabilization mechanism Energy efficient law Mechanism stablishes the balance Law published on Feb 13th 2021 Main takeaways recovery by 2027 at latest - Energy Intensity efficient of 10% by Gencos receivables shall be accrued until Promote
Slide 11: Hybridification
Hybridification Batteries and Hydrogen Chile Flexibility framework H2 National Strategy H2 Participative Strategy1 Renewables + Batteries + National strategy launched on public consultation. On May Flexibility strategy proposal to be presented 2021, the government published the first guide to su
Slide 12: Hydrology outlook
Decarbonization Hydrology outlook Pacific temperatures confirm La Niña effect Chile Rainfall in our most relevant basins1 Rapel Maule (9% of consolidated Gx) 2500 (34% of consolidated Gx) Cumulated rainfall (mm) 600 Cumulated rainfall (mm) 2000 500 400 1500 300 1000 200 500 100 0 0 Jun Jan Jul Oct A
Slide 13: Our journey & Value proposition
Chile Our journey & Value proposition 12
Slide 14: Our journey toward CO2 reduction
Our journey toward CO2 reduction, reshaping our Company into platform-based business model… Chile The pathway to Zero Coal 0% Coal generation Boosting 2023 Leading the Chilean decarbonization process renewables 77% Speed up 2022 0% coal Renewable capacity decarbonization (7.1 GW) capacity by Decarbo
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 +8 TWh/year in the of clients are last 2 years PPAs 100% renewable 80% Interactions during Q1 2021 evolving Clients centricity constantly Energy as a service - Partnersh
Slide 16: Open power: sustainable long-term strategy
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 ISS ESG FTSE Russell MSCI AA 3.4 3.2 A -B BBB C 2.7 Categoría 1 Categoría 1 Categoría 1 2018 2019 2020 2019 2020 2018 2019 2020 Scale from CCC to AAA Scale from -D to B+ Scale from 0 to 5 Vigeo Eiris S&P Dow Jones 54 88 1st Company
Slide 19: 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 20: 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 21: Delivering value for ALL
Delivering value for ALL Chile Shareholders Community & Clients Environemnt Electrification Reduction of CO2 emissions Enel X awarded a tender to replace wood heating with Payment agreements (gCO2/KWh) electric heating Payment agreements 83k 200.00 2019 2020 signed during 2020 150.00 Dividend per 10
Slide 22: Our ambition
Chile Our ambition Chile
Slide 23: 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 24: 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 7.7 JV with AME and prospective 16.3 partners 4.2 1.8 Electrolyzer fueled by wind 2.6 energy
Slide 25: Fully decarbonized by 2050: coal phase-out
Decarbonization To be fully decarbonize by 2050 backboned by our coal phase-out strategy Chile The final Reduction of 64% of the stretch for direct CO2 coal emissions by 2023 Coal capacity evolution (GW) CO2 equivalent specific emissions(1), gCO2/kWh Coal phase out FULL 0.5 DECARBONIZATION May 2022
Slide 26: Boosting renewables expansion: projects under construction
Decarbonization Boosting renewables expansion Projects under construction Chile Installed Capacity Overall End of (MW) Progress Construction Azabache 61 69% Q3 21 Campos del Sol 382 69% Q4 21 Sol de Lila 163 59% Q3 21 Domeyko 204 56% Q3 21 . Santiago Finis Terrae 126 43% Q4 21 PMGD 75 18% 2021-2022
Slide 27: Improvements in quality and resilience of networks
Networks Improvements in the quality and resilience of our networks Chile Strategic actions Key business drivers Main KPIs Q1 2020 Q1 2021 2023E Ensuring the highest level of Digitization End users 2.0 2.0 2.1 (mn) quality and efficiencies Energy distributed1 4.1 3.9 16.9 Reliability (TWh) Improving
Slide 28: Infrastructure & Networks portfolio
Networks Infrastructure & Networks portfolio Digitalization improvements to mitigate impacts in collection Chile Collection (%) Number of digital payments (%) Current billing agreements (000’)1 -1.6pp -2.1pp 26% 24% 99.9 98.3 99.4 97.3 44% 39% 44% 73.5 56% 74% 76% 56% 61% Q1 2020 Q1 2021 FY 2019 FY
Slide 29: Enabling electrification and decarbonization
Electrification To be our clients reference choice, enabling electrification, decarbonization and share value creation Chile Strategic actions Main KPIs Sustainable sports Q1 2020 Q1 2021 2023E centers Energy Efficiency Promoting electrification, +17k solutions Charging Points1-2 2030E (Photovoltaic
Slide 30: Our vision in numbers
2021-2023 Our vision in numbers
Slide 31: Strategic plan at a glance
Strategic plan at a glance Chile EBITDA (US$ bn) Net Income (US$ bn) CAPEX (US$ bn) Net debt/EBITDA +37% +26% -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 0.6 1.9 1.5 1.2 0.6 0 0.4 0 1.0 0.2 0 0.5 0.0 0.0 0 2020 2023E 2020 1 2023E 2020-22 2021-23 2020 2023E EBITDA FFO/ 36%1 43% 91% 88
Slide 32: Capex allocation focusing on de-risk margins
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 33: Generation capex and EBITDA evolution
Power Generation Generation capex driven by decarbonization and growth on renewables Chile Generation CAPEX 2021-23 EBITDA evolution 2020E-23E (US$ bn) Total CAPEX Development CAPEX +32% 0.27 0.08 (0.15) 13% 4% EBITDA FY20 5% 1.0 US$bn 0.07 1.3 3% 0.04 1.8 1.6 US$ bn 15% US$ bn 73% 1.0 87% 1 Asset d
Slide 34: Energy sales balance and production evolution
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 2023E CAGR FY20 PPA price1 -5% 30. 0 23.0 TWh 26.3 26.3 76 66 FY20 (US$/MWh) 25. 0 19.3 TWh 24.2 22.5 22.5 2.
Slide 35: Commercial strategy for long-term visibility
Power Generation Commercial strategy designed to bring long-term visibility and geographic diversification Chile Portfolio by off-taker PPAs geographic location PPAs by residual duration 2023 +12% 2019 2019 18% 54% 14% 23% 2023E 35% 23.5 TWh 42% 29% 2021-23 11% 67% 68% 35% 26.3 TWh 19% 9% 48% 29% Fr
Slide 36: Commercial strategy leading to margin stability
Decarbonization Commercial strategy leading to margin stability Chile Contracts profile (TWh/year)1 Supplying several industries 27.6 25.9 26.0 24.4 21.9 50% 60% 57 57% 54% Mining Warehouse Pulp & paper 50% 40% 43% 43% 46% Universities Agriculture Vineyards 2020 2021 2022 2023 2024 Retail Regulated
Slide 37: Networks: focus on resiliency and quality
Networks Focus on resiliency and quality to foster a more efficient networks Chile Networks CAPEX 2021-23 EBITDA evolution 2020-23 (US$ bn) +42% 34% EBITDA 0.04 0.3 FY20 53% 0.2 US$bn 0.49 35% 0.49 0.02 0.04 (0.02) US$ bn US$ bn 0.2 0.01 66% 12% 0.21 Distribution Quality & resilience 2020E Demand In
Slide 38: Enel X: accelerating electrification
Electrification Enel X: accelerating the electrification of consumption Chile Enel X CAPEX 2021-23 EBITDA evolution 2020-23 (US$ mn) 2x 23% 3.7 EBITDA 4.9 FY20 4.1 39 21 20 US$Mn 7.0 36 5% US$ mn 20 72% 2020E B2B B2C B2G Fx 2023E B2B B2C B2G 37
Slide 39: Main strategic actions to reach 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 EBITDA1 0.09 Strategic actions FY20 0.32 services addressing clients 1.6
Slide 40: Financial Management
2021-2023 Financial Management 39
Slide 41: Debt evolution and capital allocation
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 -13% 4.0 3.8 5.0 3.0 4.0 (1.0) 3.0 3.3 3.5 3.1 2.0 2.0 1.0 0.7 1.0 91% 88% 60% 0.0
Slide 42: Earnings & Targets
2021-2023 Earnings & Targets 41
Slide 43: Visible value creation for our shareholders
Visible value creation for our shareholders Chile CAGR (%) Plan main drivers 20201 2020E2 2021E 2022E 2023E 2020E-23 EBITDA (US$ bn) 1.2 1.2 1.4~1.5 1.4~1.6 1.5~1.7 +9 / +13% Net income (US$ bn) 0.6 0.6~0.7 0.6~0.7 0.6~0.7 0.6~0.8 +11 / +16% Pay-out ratio3 50% 50% ≥ 50% ≥ 50% ≥ 50% - 1. Adjusted by
Slide 44: Q1 2021 Results
Q1 2021 Results 43
Slide 45: Q1 2021 Adjusted Financial highlights
Q1 2021 Adjusted Financial highlights (USD mn)1 Chile EBITDA2 Net Income2 Capex FFO Net Debt Q1 2021 220 71 272 213 3,604 (-18% yoy) (-28% yoy) (+2.1x yoy) (+3.7x yoy) (+2% yoy) Q1 2020 270 98 130 57 3,5253 1. Reported figures. Average exchange rate for the period of 724.33 CLP/USD. Spot exchange ra
Slide 46: Business continuity: sustainable capex plan
Sustainable capex plan Business continuity: sustainable capex plan Execution of our sustainable capex plan, 97% linked to SDGs Chile Q1 2021 Capex by business and by nature1 Q1 2021 Capex asset development by business1 3% 9% 5% 6% Capex allocation by 15% Quarter (2021) 272 272 235 Q1 26% USD mn USD
Slide 47: Q1 2021 Adjusted EBITDA evolution
Q1 2021 Adjusted EBITDA evolution Results mainly driven by PPAs margin Chile Adjusted EBITDA evolution (USD mn)1 Main KPIs -18% Q1 2020 Q1 2021 yoy 270 Hydrology 2.3 2.1 -11% (TWh) (14) 29 8 8 220 (15) Gx Sales 5.8 6.4 +10% (8) (6) (TWh) (52) Energy distributed 4.1 3.9 -3% Dx (TWh) Marginal Cost4 (U
Slide 48: Generation Business main KPIs performance Q1 2021
Generation Business portfolio Main KPIs performance – Q1 2021 Chile Net Installed Capacity Production (TWh) Energy balance (TWh) +10% -6% 0.3 67% 5.8 6.4 0.6 Renewable 0.9 (0.3) (+1% YoY) 4.0 4.8 3.1 4.5 0.8 0.8 2.7 2.4 1.5 7.2 0.1 0.3 0.6 3.6 0.1 Q1 2020 Delta Delta Q1 2021 1.1 Regulated Free marke
Slide 49: Main business breakdown: EBITDA performance
Main business breakdown EBITDA performance Chile EBITDA Q1 2021 evolution (USD mn)1 -14%2 -40% 222 Lower hydrology generation and Lower demand (USD 8mn) availability in the system of LNG 192 61 Indexation in PPAs to lower 19 New tariff provision in commodity prices 37 Dx (USD 6mn) 21 42 One-off agre
Slide 50: Adjusted Net Income
Adjusted Net Income Chile Net Income evolution (USD mn)1 -38% Lower EBITDA due to higher spot prices mainly due to 98 lower availability of gas in system and PPA´s indexation 20 2 71 16 Higher financial expenses due to the stabilization mechanism account factoring (50) (16) Lower Income taxes and Mi
Slide 51: FFO
FFO USD bn Chile 350 86 300 250 (31) 220 213 200 (62) 150 100 50 0 Adjusted ∆Working Income Financial FFO EBITDA 1 capital taxes expenses & other Q1 20202 243 (155) (19) (12) 57 Delta YoY -9% +273% 1. Adjusted figures by decarbonization effect on Q1 2021 (15 USD mn). Average exchange rate for the pe
Slide 52: Debt (USD mn): steady cost of debt
Debt (USD mn) Steady cost of debt Chile Gross debt1 Liquidity Position1 Debt maturities (USD bn)1 -0.1% Maturities/Gross Debt 3,993 3,991 2.5 467 387 5% 12% 6% 15% 0.9 44% 91% 96% 56% USD bn 2.2 3,525 3,604 0.6 0.5 0.2 0.3 Cash 0.3 Dec 31, 2020 Mar 31, 2021 2021 2022 2023 2024 After Available commit
Slide 53: Closing Remarks
2021-2023 Closing Remarks 52
Slide 54: Closing remarks
Closing remarks Chile Clients will continue to Execution of Liquidity to support be at the center of our our renewables plan as current sector headwinds, strategy, supported by a priority to strive our targeting SDG-linked enhanced digitization decarbonization instruments 53
Slide 55: Disclaimer
Corporate presentation 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 regardi
Slide 56: Contact us
Corporate presentation 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 Fr
Slide 57: Annexes
* a | j J 2021-2023 . =: oa Annexes we { =e > o or. Nie ay 8 WY + wee ad ¥ me Ke
Slide 58: Credit Rating
Credit Rating Enel Chile and Enel Generación Chile Chile International market Chilean market Enel Chile Enel Chile Standard & Poor’s Moody’s Fitch Ratings Fitch Ratings Feller Rate1 Affirmed Apr/21 Affirmed Jun/20 Affirmed Jan/21 Affirmed Jan/21 Affirmed Jun/21 Enel Generación Enel Generación Standa
Slide 59: Enel Chile: largest utility player in Chile
Enel Chile Largest Utility player in Chile in installed capacity and number of clients Chile Thermal generation Renewables generation Distribution area Tarapacá TG Azabache Finis Terrae Empresa Eléctrica Atacama Cerro Pabellón Pampa Norte Enel Colina Valle de los Vientos D. Almagro Lalackama I Talta
Slide 60: Chilean energy market
Chilean energy market Chile 2020 National Installed capacity by technology1 Distribution segment2 Number of clients (mn) 0.2% 12.7% 3.00 27.3% 1.97 9.9% 0.89 0.74 25.4 GW CGE Enel Chile Saesa Chilquinta 50.0% Energy sales (Gwh) 17,106 11,474 3,669 2,889 Solar Wind Thermal Hydro Geothermal Enel Chile
Slide 61: Main assumptions
iM: 4 A - ae 2083 es Main assumptions” f lo aD ¥ + at) - Py e ” a Sel V .
Slide 62: 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 2020 2021 2022 2023 Gas Henry Hub ($/mmbtu) 2.1 2.4 2.6 2.7 Oil Brent ($/bbl)
Slide 63: Capex by Business line
Capex by Business line Chile Gross Capex (US$ bn) Business line 2020 2021E 2022E 2023E Ʃ 2021-2023 Renewables 0.8 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 62
Slide 64: Installed capacity and Production
Installed capacity and Production Chile Net Installed Capacity (GW) Production (TWh) Technology 2020 2021E 2022E 2023E Technology 2020 2021E 2022E 2023E 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 0.6 0.0 0.0 0.0 Hydro 3.6 3
Slide 65: Sustainability Plan
2021-2023 Sustainability Plan
Slide 66: Sustainable business model, driving change through growth accelerators
Sustainable business model, driving change through growth accelerators Chile 2021 – 2023 Sustainability Plan * 65 * Growth accelerators include innovation, cyber security, digital supports, circular economy and sustainable finance
Slide 67: People centricity: local and global communities
Local and global communities People centricity Chile Plan actions 20201 2030 targets 1 High-quality, inclusive and fair education ~ 217,000 beneficiaries 350,000 beneficiaries in 2030 Access to affordable and clean energy ~ 354,000 beneficiaries 450,000 beneficiaries in 2030 Employment and sustainab
Slide 68: Corporate Governance
2020-2022 Corporate Governance
Slide 69: Shareholders Structure
Shareholders Structure Organization structure Chile Enel Chile shareholders1 ADR's 64.9% 3.1% Institutional Investors 16.3% Chile Pension Market Cap2 Funds 4.7 $ bn 14.3% Enel SpA 64.9% 100.0% 93.5% 99.1% 99.1% 100.0% Others 1.3% Green Power Generación Chile Transmisión Chile Distribución Chile Enel
Slide 70: Focus on Corporate Governance: structure
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 69
Slide 71: Board composition
Focus on Corporate Governance Board composition Chile Board of Directors Board of Directors’ diversity Herman Chadwick Chair 29% Monica Girardi Director 57% Age Gender diversity diversity Isabella Alessio Director 43% 71% 41-50 Over 50 Male Female Salvatore Bernabei Director Directors’ Committee (C)
Slide 72: 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 73: 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 D. Gome
Slide 74: 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