Colbun Sa · BCS:COLBUN

Colbun Sa — BofAML EM Corporate Credit Conference 2018

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

  1. Slide 1: Company Presentation

    BofAML EM CORPORATE CREDIT 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 KEY FINANCIALS Rating EBIT

  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 state-of-the-art CCGT in Peru

    1. Cost efficient & diversified asset base Fenix Power: a state-of-the-art 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 Cash G

  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 2 AVERAGE MONOMIC PRICE1 (US$/MWh) 150 Regulated Customers Unregulated Customers +60 52%/48% ~93% ~10 YEARS 130 110 Total Regulated/ Customers Average life 90 customers unregulated with credit of PPAs customers

  15. Slide 15: Significant increase in number of clients over the past 2 years

    2. Stable & predictable cash flows Significant increase in number of clients over the past 2 years 2016 2018 3 +60 UNREGULATED UNREGULATED CUSTOMERS CUSTOMERS 15 15 REGULATED REGULATED CUSTOMERS CUSTOMERS 6 +200 SELLING SELLING POINTS POINTS Note: All figures as of Mar18 15

  16. Slide 16: 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

  17. Slide 17: 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.  Colbun is currently participating

  18. Slide 18: 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 18

  19. Slide 19: 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%

  20. Slide 20: 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 & %) 4

  21. Slide 21: 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

  22. Slide 22: 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 22

  23. Slide 23: 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. Intermittent energy 2. Expand operations to selected countries in the region (Argentina 2. M&A Opportunitie

  24. Slide 24: 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

  25. Slide 25: Large pipeline of growth options

    4. Attractive portfolio of growth options Large pipeline of growth options SAN PEDRO GUAYQUIVILO 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

  26. Slide 26: 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 26

  27. Slide 27: 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. 27

  28. Slide 28: 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

  29. Slide 29: 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

  30. Slide 30: Only power-generation company of Chilean capitals listed in the DJSI EM

    5. Maximizing value to all of our stakeholders Only power-generation company of Chilean capitals 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 Marke

  31. Slide 31: 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.

  32. Slide 32: Agenda

    AGENDA 1. OVERVIEW 2. VALUE PROPOSAL 3. CONCLUDING REMARKS 32

  33. Slide 33: Concluding remarks

    Concluding remarks 1 Size: Leading position in Chile’s power market and a relevant presence in Peru. 2 Customers: Diversified, solid and creditworthy portfolio of clients. 3 Sustainability: Integrated in all areas of the Company. 4 Shareholders: Strong, reliable controlling group with a strategic an

  34. Slide 34: 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

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