Enel Chile Sa · BCS:ENELCHILE
Enel Chile Sa — Merger or Acquisition (January 2018)
41 slides from Enel Chile Sa's merger presentation, January 2018
Slide 1: Enel Chile – Electricity Generation & Distribution
Enel Chile Electricity Generation & Distribution As of January, 2018 Chile
Slide 2: Agenda
Enel Chile Chile Agenda Project Elqui Process Overview A New Equity Story for Enel Chile Closing Remarks 2
Slide 3: Current Organization Structure – Stable shareholders base
Enel Chile Chile Current Organization Structure – Stable shareholders base Enel Chile Shareholders1 Organization Enel SpA 21,4% Chilean Pension Funds 0,5% ITALY 7,1% ADRs (Citibank N.A.) 60,6% 61% 10,4% Retail Institutional Investors CHILE Enel Chile Enel Generación Chile Shareholders1 60% 99% 17,1%
Slide 4: Project Elqui Overview
Project Elqui Overview Chile Proposed transaction Enel Chile (“EC”) is lauching a transaction consisting of a corporate reorganization that would entail i) the merger of Enel Chile with EGP Latin America (“EGPL”), and ii) a Tender Offer (“TO”) launched by Enel Chile over Enel Generación Chile (“EGC”
Slide 5: Project Elqui Proposed Transaction
Project Elqui Proposed Transaction Chile ENEL CHILE proposed transaction terms The Proposed Transaction terms: Cash ~CLP 354 60% per share • provide a fair treatment of all CLP 590 parties involved (proposed Tender Offer for EGC PTO price per share (+20.7% vs. undisturbed price1) + terms within th
Slide 6: Timeline and Next Steps
Timeline and Next Steps Chile Transaction expected timetable Transaction approval (2017) Transaction execution (2018) 14 November 20 December By Mid February By Mid March By the end of 2017 2017 2018 2018 1Q 2018 Capital Increase Capital Increase preemptive preemptive period Board of Directors of Bo
Slide 7: Agenda
Enel Chile Chile Agenda Project Elqui Process Overview A New Equity Story for Enel Chile Closing Remarks 7
Slide 8: Project Elqui paves the way for a New Equity Story of Enel Chile
Enel Chile – new Equity Story Chile Project Elqui paves the way for a New Equity Story of Enel Chile Consolidated position of largest utility player in Chile with a diversified industrial 1 profile Undisputed leader in power Leader in distribution with >40% Similar to generation with 7.5GW of instal
Slide 9: Largest Utility Player in Chile
Enel Chile – new Equity Story Chile 1 Largest Utility Player in Chile POWER GENERATION1 POWER DISTRIBUTION Cerro Pabellón Diversified across all technologies D. Almagro Taltal Finis Terrae Huasco Los Molles Pampa Norte Valle de los Vientos Renewable platform provide growth path Sierra Gorda Este San
Slide 10: Generation: Undisputed Leader in power generation
Enel Chile – new Equity Story Chile 1 Generation: Undisputed Leader in power generation well diversified across technologies Installed capacity 20171: 6.3 GW Net production 20171: 17.1 TWh Current Installed Capacity (GW) +20% +18% 7.5 7.5 20.2 6.3 0.6 17.1 1.1 0.6 1.5 0.5 1.6 63% renewables 1.5 0.5
Slide 11: Distribution: Leader in power distribution with >40% market share
Enel Chile – new Equity Story Chile 1 Distribution: Leader in power distribution with >40% market share Energy sales 2017: 16.3 TWh Final clients 2017: 1.9 million 2016 Energy Sales (TWh) +6% +6% 16.0 17.3 1,9 2,0 13.0 16.3 2017 2020 2017 2020 3.2 2.8 EBITDA DISTRIBUTION 2018: USD298mm1 Enel Dx CGE
Slide 12: Sales to free clients
Enel Chile – new Equity Story Chile 1 Sales to free clients 2017 Total Chilean Free market sales (TWh) Enel Chile Free market sales evolution (TWh) (% of Total) 59% 11,1 (48%) 4,5 33 69 TWh 7,0 36 2,3 (52%) 6,6 4,7 2017 2020 Regulated Market Free Market Free Sales Gx Free Sales Dx Market share is ex
Slide 13: Distribution: Non regulated business boosting growth
Enel Chile – new Equity Story Chile 1 Distribution: Non regulated business boosting growth of Enel Distribución 2017 Gross margin (US$ mm) % of Margin 2020 Gross margin (US$ mm) % of Margin Dx Regulated 240 59% Dx Regulated 298 +24% 60% Subtransmission 100 24% Subtransmission 95 -5% 19% Free Market
Slide 14: Distribution: Valuable pipeline of value added services initiatives
Enel Chile – new Equity Story Chile 1 Distribution: Valuable pipeline of value added services initiatives Most valuable current and future activities out of the whole portfolio Public Lighting Infrastructure Projects Urban Development Energy Efficiency Electrical Buses Integral service of efficien
Slide 15: Renewables: Largest renewable platform in Chile
Enel Chile – new Equity Story Chile 2 Renewables: Largest renewable platform in Chile Plant Portfolio (1,189 MW, with 18 plants in operation) Renewables Installed Capacity (GW) Finis Terrae Pampa Norte Cerro Pabellón Valle de los Vientos 1,2 Sierra Gorda Este 3x Lalackama I Lalackama II Taltal Chaña
Slide 16: Renewables: Clear path to growth through EGP Chile
Enel Chile – new Equity Story Chile 2 Renewables: Clear path to growth through EGP Chile Installed capacity 2017: 1,189 MW Strong pipeline with clear construction strategy 1,189 1,258 2016 2017 41 41 Technology MW GWh/year Awarded Awarded1 Location 564 564 (GWh) (GWh) 561 Solar PV 979 2.480 492 92 9
Slide 17: Highly contracted profile going forward
Enel Chile – new Equity Story Chile 2 Highly contracted profile going forward PPAs 30 25 20 TWh 15 22,1 20,9 20,9 21,3 18,2 19,9 17,9 13,0 10 10,7 10,1 8,4 7,9 8,3 5 4,2 4,2 5,2 4,9 4,9 4,6 4,5 4,4 4,3 3,3 3,2 3,2 3,1 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 EGP Enel Gx Hed
Slide 18: Excellent outcome on last Tender 2017-1
Enel Chile – new Equity Story Chile 2 Excellent outcome on last Tender 2017-1 (delivery 2024) 10,6 TWh Energy offered by the others bidders (equivalent of almost 5 times of the energy subject 36,5 2,200 GWh 34,7 to tender) 34,1 34,4 Q4 24h 125 Q3 24h 125 220 Avg. awarding Q2 24h 125 price: 32,5 Q1 2
Slide 19: Higher market capitalization and stock liquidity
Enel Chile – new Equity Story Chile 3 Higher market capitalization and stock liquidity Higher market cap 1 Increase in Market Cap 1 USDbn 0,9 1,5 Top 15 pre Elqui Top 15 post Elqui 1,1 Market Cap Market Cap 9,1 # Company # Company 8,2 (US$ mm) (US$ mm) 5,6 1 SACI Falabella 21,860 1 SACI Falabella 21
Slide 20: Potential elimination of existing holding discount at EC
Enel Chile – new Equity Story Chile 4 Potential elimination of existing holding discount at EC Enel Chile average discount to NAV since spin off 1 Holding discount applied by Brokers – post announcement USDbn Discount to NAV: 10-15% 0,1 20,0% 2,2 (0.8) 12,5% 12,5% 13,8% 10,0% 6,1 5,3 3,8 EGC stake E
Slide 21: New Enel Chile key consolidated financials
Enel Chile – new Equity Story Chile 5 New Enel Chile key consolidated financials Key Financials of new Enel Chile EBITDA breakdown1 CAGR 2018-20 +13% CAGR Units 2018 2019 2020 18-20 (%) 1,824 307 EBITDA1 US$ mn 1,417 1,692 1,824 +13.4% 1,417 269 365 Payout % 60% 65% 70% n.a. 298 1,166 Capex US$ mn 5
Slide 22: Net Profit
Enel Chile Chile Net Profit Net profit1 USDm +39% CAGR 2018-20 +18% 943 853 130 NI increase with maximum PTO 117 80 acceptance 676 (100% Enel stake2) 74 113 81 97 51 NI with minimum 81 PTO acceptance (75% Enel stake3) 621 565 463 2018 2019 2020 EC EGPL EGC (75% stake) EGC (100% stake) Source: Compan
Slide 23: Sustainable dividend policy with an optimized financial structure
Enel Chile – new Equity Story Chile 5 Sustainable dividend policy with an optimized financial structure Optimization of financial structure Cumulated Cash flow generation (2018-2020) USDbn USDbn ND/EBITDA pre ND/EBITDA post 0.6x1 2.4x Current (0.1) Net Income payouts confirmed (0.8) 2018 60% 2019 6
Slide 24: Dividend payout ratio will increase to 70% in 2020
Enel Chile Chile Dividend payout ratio will increase to 70% in 2020 Dividends paid2 70% 65% 60% 55% 50% 146 95 Out of Enel Chile Group 212 215 Out of 2 Enel Dx Enel Gx 149 Out of Group Chile Chile Group 2016 2017 2018 2019 2020 Total Group: 573 MUSD • Enel Chile will pay US$ 1.3 bn in dividends with
Slide 25: Agenda
Enel Chile Chile Agenda Project Elqui Process Overview A New Equity Story for Enel Chile Closing Remarks 25
Slide 26: Closing remarks
Enel Chile – Closing remarks Chile Project Elqui paves the way for a new equity story of Enel Chile RENEWED INDUSTRIAL HIGHER PROFILE DIVERSIFIED CAPITALIZATION ACROSS ALL AND LIQUIDITY POWER SEGMENTS SHAREHOLDER POTENTIAL STOCK INTERESTS’ VALUE UPSIDE ALLIGNEMENT CHILE OPTIMIZED CAPITAL UNDISPUTED
Slide 27: Contact us
Enel Chile Chile Contact us Susana Rey Catalina González Head of IR Enel Chile Head of IR Enel Generación Chile +56 2 2630 9606 +56 2 2630 9603 susana.rey@enel.com catalina.gonzalez@enel.com Guillermo Berguecio Francisco Basauri Investor Relations Associate Investor Relations Associate +56 2 2630 95
Slide 28: Exhibits
ene Exhibits
Slide 29: Transaction rationale and conditions
Project Elqui Overview Chile Transaction rationale and conditions Transaction Rationale Enel SpA Minimum Conditions 1 1. Consolidating Enel Chile leadership position in the Chilean energy 1. The transaction must be executed on market space terms 2 2. Increasing Enel Chile market capitalization, resu
Slide 30: Proposed terms in line with independent evaluators and appraisers
Project Elqui Proposed Transaction Chile Proposed terms in line with independent evaluators and appraisers Price per Share (CLP) Evaluator / EGC / EC EGPL / EC Appraiser Ratio (x) Ratio (x) Chile Gx CLP$ 82 CLP$ 590 7.2x 15.8x 80 87 534 586 6.4 7.0 15,0 17,3 79 86 537 595 6.6 7.1 14,6 17,1 77 82 541
Slide 31: Current situation
Enel Chile – new Equity Story Chile Current situation Clear country focused strategy Leader in generation with 6.4GW of installed capacity (35% market 100% 60.62% share) and 9.0TWh of hydro output Chile Leader in distribution with >40% market share, being the only distributor in the Santiago a
Slide 32: Financial Highlights – Enel Distribución Chile
Financial Highlights Chile Enel Distribución Chile Consolidated Income Statement1 Change 2012 2013 2014 2015 2016 US$ Million2 2016/2015 Revenues 1,455 1,441 1,667 1,859 1,944 5% Costs (1,076) (1,053) (1,265) (1,454) (1,540) 6% Contribution Margin 379 388 402 405 404 0% EBITDA 247 257 268 274 284 4%
Slide 33: Electricity business
Electricity business Chile Transmission Distribution (Natural Monopoly) (Natural Monopoly) “Nacional” “Transmisión Zonal” Related (Transmission) (Subtransmission) services Light meter rental Pole rental Disconnection and Consumers Consumers Reconnection of services VI: USD 8.5 millions VI: USD 860 m
Slide 34: Remuneration and Tariff processes
Remuneration and Tariff processes Chile • Remuneration regulated by Annualized Investment Value (investment, useful life, discount rate) + Efficient Operation and Tx Maintenance Costs • Price Cap Revenue Cap (2018 – 2019: transitional process) (2020 – 2024: new tariff process) Concession • Indefin
Slide 35: Financial Highlights – Enel Generación Chile
Financial Highlights Chile Enel Generación Chile Consolidated Income Statement1 Change 2012 2013 2014 2015 2016 US$ Million3 2016/2015 Revenues 1,647 1,438 1,827 2,281 2,453 8% Costs (1,114) (731) (1,109) (1,302) (1,323) 2% Contribution Margin 533 707 718 980 1,130 15% EBITDA 395 538 547 764 879 15%
Slide 36: Operational Efficiency
Operational Efficiency Chile Availability of our power plants Hydro CCGT Total Generation Fleet 96,9% 96,2% 95,9% 95,5% 95,7% 94,2% 94,4% 93,5% 92,1% 92,3% 91,9% 84,7% 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 92,3% 91,6% 94,8% 94,3% 89,2% 89,4% Coal Oil & Gas 2014 2015 2016 2017 2
Slide 37: Hydrological Context
Hydrological Context Chile Impact of hydrological conditions in the country SIC - Affluent energy Since 2010, each year has 50.000 been among the driest in 45.000 hydrological history 40.000 35.000 30.000 25.000 GWh 20.000 Driest years in 15.000 history 10.000 5.000 0 1960 1961 1962 1963 1964 1965 1
Slide 38: Engaging the local communities
Engaging the local communities Chile Enel commitments to the global SDGs1 Contribution of Enel Chile to Enel target on SDGs Chile 160.000(*) 417.400 17.900 Chile target 2020 +70.000 +150.000 +32.100 1. SDG: Sustainable Development Goals (*)Beneficiaries, YTD 2016 38
Slide 39: Decarbonizing the energy mix and Environmental Sustainability
Decarbonizing the energy mix and Environmental Chile Sustainability SDGs Main Actions Targets Action for climate change Development of renewable capacity +150 MW Investment in environmental 117 MM€ improvements in existing plant Environmental Sustainability Installation of a desulphurization Sustain
Slide 40: Forward-Looking Statements
Enel Chile Chile Forward-Looking Statements 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 presentation and include statements reg
Slide 41: Important Notice
Enel Chile Chile Important Notice No Offer or Solicitation This communication does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities. This communication relates to a proposed tender offer by Enel Chile S.A. (“Enel Chile”) for all of the outstanding