Colbun Sa · BCS:COLBUN

Colbun Sa — Emerging Markets Corporate Conference (Bank of America Merrill Lynch) 2016

27 slides from Colbun Sa's conference presentation, June 2016

  1. Slide 1: Colbún Presentation June 2016 – Emerging Markets Corporate Conference

    COLBÚN PRESENTATION 2016 JUNE Emerging Markets Corporate Conference Bank of America Merril Lynch

  2. Slide 2: Agenda

    A G E N D A OVERVIEW OPERATIONS IN CHILE AND PERU FINANCIALS PROJECTS VALUE PROPOSAL

  3. Slide 3: Power Generation Business in Chile and Peru

    OVERVIEW POWER GENERATION BUSINESS IN CHILE AND PERU 3 MARKET SHARE BY INSTALLED CAPACITY. CONSOLIDATED INSTALLED CAPACITY: 3,852 MW Egenor Fenix 4% 6% Others Electroperu 1 COLBUN’S PRESENCE IN PERU. 28% 11%  570 MW Inst. Capacity  Thermal: 570 MW Kallpa  3,621 GWh annual generation 13%  8% mark

  4. Slide 4: Sector Segmentation

    OVERVIEW SECTOR SEGMENTATION 1 CHILE. 2 PERU. GENERATION GENERATION TRANSMISSION TRANSMISSION Regulated sectors (concessions) DISTRIBUTION DISTRIBUTION RELEVANT INSTITUTIONS RELEVANT INSTITUTIONS Ministry of Energy Ministry of Energy and Mines Regulator: CNE Supervisor: OSINERGMIN Supervisor: SEC Co

  5. Slide 5: Market Structure

    OVERVIEW MARKET STRUCTURE GENERATORS REGULATED UNREGULATED SPOT MARKET CUSTOMERS CUSTOMERS DISTRIBUTION INDUSTRIAL DISPATCH COMPANIES CUSTOMERS CENTER Regulated Auction Tariffs Unregulated Auction Tariffs Marginal Cost /Spot Price Source: Colbún S.A. 5

  6. Slide 6: Generation and Price Development in Chile's Central Grid (SIC)

    OVERVIEW GENERATION AND PRICE DEVELOPMENT IN CHILE´S CENTRAL GRID (SIC) • 16,327 MW Inst. Capacity • LNG re-gasification terminal since 2009 • Development based on hydro + competitive • Coal-fired power plants 60 natural gas 300 • PPA tenders with price indexation • Fixed price power purchase agreem

  7. Slide 7: Generation and Price Development in Peru's National Grid (SEIN)

    OVERVIEW GENERATION AND PRICE DEVELOPMENT IN PERU´S NATIONAL GRID (SEIN) • 9,311 MW Inst. Capacity • Development based on hydro + competitive natural gas 60 • 2012: Open Cycle converted to Combined Cycle plants 100 • Lower average marginal cost compared to Chile 90 Annual Power Generation – SEIN TWh

  8. Slide 8: Agenda

    A G E N D A OVERVIEW O P E R AT I O N S I N C H I L E AND PERU FINANCIALS PROJECTS VALUE PROPOSAL

  9. Slide 9: Main Figures

    O P E R AT I O N S I N C H I L E A N D P E R U MAIN FIGURES INSTALLED CAPACITY OF 3,852 MW - MARKET SHARE BY GENERATION: 24% IN CHILE (SIC); 8% IN PERU (SEIN) Gx. ASSET DIVERSIFICATION. (MW) INTER. RATINGS. OWNERSHIP. (%) BBB 21.1% 4 Reservoir: 1,065 Matte Group 12 Run-of-the-river: 532 BBB- Angelin

  10. Slide 10: Commercial Policy in Chile

    O P E R AT I O N S I N C H I L E A N D P E R U COMMERCIAL POLICY IN CHILE BALANCED POSITION BETWEEN EXISTING AND FUTURE 1 EFFICIENT GENERATION CAPACITY AND MEDIUM TO LONG- CAPACITY (MW) & ESTIMATES GENERATION 1 (TWh/year) BREAKDOWN. TERM POWER SUPPLY COMMITMENTS. MW TWh Hydro: contract output consid

  11. Slide 11: Commercial Position in Chile

    O P E R AT I O N S I N C H I L E A N D P E R U COMMERCIAL POSITION IN CHILE CONTRACTUAL COMMITTMENTS VS GENERATION. (GWh) GWh 50% 546 244 107 12,000 45% 546 3,011 3,487 3,421 40% 10,000 2,240 4,431 3,234 3,794 4,428 4,492 35% 8,000 2,242 2,893 2,623 2,405 2,313 30% 2,616 25% 6,000 1,853 20% 4,000 15

  12. Slide 12: LNG: Long Term Agreements in Chile

    O P E R AT I O N S I N C H I L E A N D P E R U LNG: LONG TERM AGREEMENTS IN CHILE CONTRACTED GAS GENERATION: METROGAS AND ENAP. (GWh) REGASIFICATION CAPACITY (GWh) GWh 4,000 3,500 2,500 3,000 2,500 2,500 2,500 2,000 2,000 1,000 2,000 1,500 Optional 1,000 500 0 2015 2016 2017 2018 2019 2020-2040  Ef

  13. Slide 13: High Quality Clients in Chile

    O P E R AT I O N S I N C H I L E A N D P E R U HIGH QUALITY CLIENTS IN CHILE 1 SALES BY TYPE OF CUSTOMER. (%) 3 AVERAGE MONOMIC PRICE 1. (US$/MWh) Regulated 150 Unregulated Temporary Mg Cost Indexation in some PPAs 40% 60% 100 2 SALES VOLUME BY CUSTOMER. (%) 4% Codelco (A+) 9% 29% 50 Chilectra (BBB+

  14. Slide 14: Our PPAs in Chile: 9.8 Years Average Maturity

    O P E R AT I O N S I N C H I L E A N D P E R U OUR PPAs IN CHILE: 9.8 YEARS AVERAGE MATURY INDEXATION. (%) GWh Fossil Fuels 14,000 Unregulated Regulated 35% CPI 65% 12,000 Available energy to re-contract 10,000 8,000 6,000 4,000 2,000 0 2016 2017 2018 2019 2020 2021 2022 2023 Source: Colbún S.A. 14

  15. Slide 15: Fenix Power Peru: Most Efficient CCGT in Peru

    O P E R AT I O N S I N C H I L E A N D P E R U FENIX POWER PERU: MOST EFFICIENT CCGT IN PERU 1 OWNERSHIP. (%) Colbún 36% Sigma ADIA 51% 13% 2 DESCRIPTION.  Location: Chilca district, 64 km south of Lima, Peru  US$ currency market  Installed capacity: 570 MW  Expected annual generation: 4.4 TWh/y

  16. Slide 16: Agenda

    A G E N D A OVERVIEW OPERATIONS IN CHILE AND PERU FINANCIALS PROJECTS VALUE PROPOSAL

  17. Slide 17: Strong Financial Results

    FINANCIALS STRONG FINANCIAL RESULTS 1 OPERATING REVENUES. (US$ Million) 2 EBITDA & EBITDA MG. (US$ Million & %) 2,000 661 1,696 583 50% 1,503 600 537 49% 1,500 1,314 1,360 40% 44% 400 352 36% 30% 1,000 20% 500 200 21% 10% 0 0 0% 2013 2014 2015 1Q16 LTM 2013 2014 2015 1Q16 LTM CASH FLOW. (US$ Million

  18. Slide 18: Strong Financial Results

    FINANCIALS STRONG FINANCIAL RESULTS 1 DEBT & NET DEBT. (US$ Million) 2 NET DEBT / EBITDA. (x) 2,500 Debt Net Debt 2,236 2,244 7 2,000 1,894 6 1,700 5 1,500 1,440 4.1 1,174 1,182 4 1,061 1,000 3 2.0 2.0 1.8 2 500 1 0 0 2013 2014 2015 1Q16 2013 2014 2015 1Q16 LTM 3 LEVERAGE RATIO 1. (%) 4 MAIN FIRM VA

  19. Slide 19: Adequate Debt Profile and Strong Liquidity

    FINANCIALS ADEQUATE DEBT PROFILE AND STRONG LIQUIDITY 1 KEY DRIVERS. 2 DEBT PROFILE. FLOATING BANKS UF 16%  Total Debt: US$ 2,244 Million 36% 4%  Avrg. Maturity: 5.2 years US$  Avrg. US$ Interest Rate: 4.7% 96% BONDS FIXED 84%  Cash: US$ 1,063 Million 64%  Net Debt: US$ 1,182 Million 3 AMORTIZA

  20. Slide 20: Agenda

    A G E N D A OVERVIEW OPERATIONS IN CHILE AND PERU FINANCIALS PROJECTS VALUE PROPOSAL

  21. Slide 21: Installed Capacity Evolution: Last 10 Years

    PROJECTS INSTALLED CAPACITY EVOLUTION: LAST 10 YEARS MW 4,000 3,852 MW 3,500 3,000 HYDRO DIESEL COAL FENIX +466 MW +100 MW +350 MW +570 MW 2,500 2,370 MW 2,000 2006 2016 21

  22. Slide 22: Growth Opportunities in Chile and the Region

    PROJECTS GROWTH OPPORTUNITIES IN CHILE AND THE REGION 1 SPECIAL FOCUS ON COLOMBIA AND PERU.  Growing Electricity Consumption  Well established regulatory framework  Diversification: - Hydrological Conditions - Generation Technology - Fuel Access - Regulation 350 MW GROWTH OPPORTUNITIES IN CHILE:

  23. Slide 23: La Mina – Renewable Energy for the System

    PROJECTS UNDER CONSTRUCTION LA MINA – RENEWABLE ENERGY FOR THE SYSTEM 1 34 MW of Installed Capacity and 190 GWh of expected annual generation 2 Under construction since Dec-14. As of Mar-16 it has 63% progress, according to plan 3 Expected to be commissioned in early 2017 23

  24. Slide 24: Santa Maria II – Coal Fired Base Load Capacity

    PROJECTS UNDER STUDY SANTA MARIA II – COAL FIRED BASE LOAD CAPACITY 1 350 MW of Installed Capacity and 2,500 GWh of expected annual generation Santa Maria II 2 Environmentally Approved 3 Social, economic and commercial dimensions of the project are being analyzed, in order to timely define the begin

  25. Slide 25: San Pedro – Highly Efficient Hydroelectric Project

    PROJECTS UNDER STUDY SAN PEDRO – HIGHLY EFFICIENT HYDROELECTRIC PROJECT Riñihue Lake 1 ~170 MW of Installed Capacity and 950 GWh of expected annual generation San Pedro reservoir 2 Broad explicative and clarifying meeting process plan Project 25

  26. Slide 26: Solar Energy Transactions

    GROWTH OPPORTUNITIES SOLAR ENERGY TRANSACTIONS 1 SUNEDISON’S ASSETS AQUISITION  Long-term energy sypply contracts with regulated customers: - 350 GWh/year - 15 years, starting 2017  Two photovoltaic solar parks in the SIC: - Olmué: 145 MW (Environmentally approved) - Santa Sofía: 57 MW (Environmen

  27. Slide 27: Disclaimer and Contact Information

    DISCLAIMER AND CONTACT INFORMATION INVESTOR RELATIONS 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. TEAM CONTACT To evaluate whether to purchase or sell securities of

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