Slide 1: Company Presentation 1Q 2012
COMPANY PRESENTATION 1Q 2012
Slide 2: Agenda
Agenda Company Overview Chilean Electricity Sector Business Strategy Financial Profile 2
Slide 3: Colbún at a glance
Company Overview Colbún at a glance Business Power Generation & Trade Market Share (as a % of Installed Capacity) - SIC Size 2nd largest generator in Chile’s Central Grid Others (SIC), with 21% market share (MW). 20% Colbún 21% The SIC covers 90% of the population AES Capacity 2,620 MW Gener 18% End
Slide 4: A diversified asset base
Company Overview A diversified asset base NEHUENCO COMPLEX: 874 MW ACONCAGUA BASIN: 213 MW 15 HYDRO POWER PLANTS 6 THERMAL POWER PLANTS DIESEL/GAS Chacabuquito Blanco Nehuenco I Capacity: 29 MW Capacity: 60 MW Capacity: 368 MW Los Quilos Juncal Nehuenco II Capacity: 39 MW Capacity: 29 MW Capacity: 3
Slide 5: A diversified customer base
Company Overview A diversified customer base UN-REGULATED CUSTOMERS REGULATED CUSTOMERS CHILECTRA CODELCO (2011- 2021/23/25) Salvador CONAFE CODELCO (Until 2020) Ventanas CGE-Río Maipo ANGLOAMERICAN (2010- 2021) Los Bronces Santiago CGE-Distribución CODELCO (2010- 2024) Andina SAESA METRO (2010- 201
Slide 6: Colbún has grown steadily over the past decade
Company Overview Colbún has grown steadily over the past decade Capacity (MW) Total Operating Revenues (MMUSD) 3000 2,620 1600 US$ 1,333 MW million 1400 2500 1200 2000 1000 1500 800 600 US$ 129 1000 1,070 400 million MW CAGR: 8% CAGR: 21% 500 200 0 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Slide 7: Solid and reliable controlling group with a strategic and long term vision
Company Overview Solid and reliable controlling group with a strategic and long term vision CONTROL Ownership Structure Controlled by the Matte Group (49%), one of the leading economic groups in Chile, with Angelini stakes in various sectors (forestry, financial, Group telecommunications, among othe
Slide 8: Agenda
Agenda Company Overview Chilean Electricity Sector Business Strategy Financial Profile 8
Slide 9: Sector Segmentation
Chilean Electricity Sector Sector Segmentation 3 SUB-SECTORS 4 SEPARATE GRIDS SING Arica 3,964 MW - 25% 15.881 GWh - 25% GENERATION Antofagasta SIC Tal-Tal 12,365 MW - 75% 46.052 GWh - 74% TRANSMISSION Santiago Regulated sectors (concessions) DISTRIBUTION Castro Chaitén SEA 52 MW - 0% 146 GWh - 0% R
Slide 10: Market Structure
Chilean Electricity Sector Market Structure Electricity Market Structure Main Players in the Generation Sector-SIC GENERATORS 41% >15 REGULATED UNREGULATED SPOT players CUSTOMERS CUSTOMERS MARKET 21% 18% 17% DISTRIBUTION “FREE” CDEC COMPANIES CUSTOMERS 2% 1% Regulated Unregulated Marginal Cost Endes
Slide 11: Evolution of Power Generation and Demand in the SIC
Chilean Electricity Sector Evolution of Power Generation and Demand in the SIC Annual Power Generation-SIC (TWh) Annual Electricity Demand-SIC (TWh) 50 Others 50 Diesel-Fuel Unregulated Demand Regulated Demand 45 LNG 45 Gas Coal /Petcoke Diesel 8% 40 40 Hydro 35 35 Unregulated: ~40% LNG 22% 30 Gas 0
Slide 12: Dispatch and pricing model: a technical guide
Chilean Electricity Sector Dispatch and pricing model: a technical guide Dispatch Model Dispatch Scheme OBJECTIVE Meet demand at the lowest cost possible Demand Curve Variable Cost of the Plants (USD/MWh) INSTITUTION Independent load dispatch center (CDEC) coordinates the efficient dispatch of elect
Slide 13: Evolution of electricity prices
Chilean Electricity Sector Evolution of electricity prices Electricity Prices-SIC (USD/MWh) 350 1) Energy Node Price Alto Jahuel (USD/MWh) 300 2) Average Auction price (USD/MWh) 3) Average Market price (USD/MWh)* 250 4) Energy Spot Market Price Alto Jahuel (USD/MWh) 200 150 100 50 0 2001 2002 2003 2
Slide 14: Demand and Supply: what to expect in the coming years
Chilean Electricity Sector Demand and Supply: what to expect in the coming years Electricity Demand - SIC (TWh) Available Power by type - SIC (MW) Hydro (1) Wind Coal Gas (2) 60 Diesel Max demand 16000 Min demand Average demand Additional installed Additional installed capacity: 14000 capacity: 600
Slide 15: Agenda
Agenda Company Overview Chilean Electricity Sector Business Strategy Financial Profile 15
Slide 16: Corporate Strategy
Business Strategy Corporate Strategy Who are we? We are a Chilean company, leader in the generation of reliable, competitive and sustainable energy What do we do? We seek to generate long-term value by developing projects and managing power infrastructure to meet the country’s energy demand. 16
Slide 17: Strategic Pillars
Business Strategy Strategic Pillars Identify and develop project options to consolidate our market share. 3. Growth Commercial strategy that generates long-term returns consistent with our asset base. Narrow our exposure to exogenous variables: diversified asset base 2. Diversification (technolog
Slide 18: Value Chain
Business Strategy Value Chain Project Operational Risk / Return Development Excellence Profile Multidimensional High Risk / return profile challenge: standards: combining: Technical Reliability Commercial policy + + + Environmental / Social Security Financial strength + + + Financial Environmental R
Slide 19: Colbún: a sustainable partner
Business Strategy Colbún: a sustainable partner EMPLOYEES INVESTORS ENVIRONMENT COMMUNITY AND CLIENTS AND SUPPLIERS SOCIETY CONTRACTORS 19
Slide 20: Our expansion plan
Business Strategy Our expansion plan Thermoelectric capacity Hydroelectric capacity 3,428 San Pedro MW Angostura 150 MW 316 MW 2,620 Santa María I 342 MW MW 50% Other Growth Opportunities 48% Santa María II (350 MW) Environmental approval for the construction of a second unit Hydraulic Various water
Slide 21: Our projects under construction
Business Strategy Our projects under construction SANTA MARIA I COAL POWER PLANT: 342 MW ANGOSTURA HYDRO POWER PLANT: 316 MW Coronel, Biobío Region Santa Barbara and Quilaco, Biobío Region TOTAL INVESTIMENT: 748 MMUSD TOTAL INVESTIMENT: 668 MMUSD SPENT AS OF MARCH 2012: 733 MMUSD SPENT AS OF MARCH 2
Slide 22: Commercial policy
Business Strategy Commercial policy CONTRACT LEVEL SALE PRICE INDEXATION HEDGE PROGRAM Define optimal Contract Incorporate indexation Structure tailor-made Level formulas of sale prices hedge programs Hydro capacity that reflect to protect from more (Output of a medium-dry year) our cost structure a
Slide 23: Evolution of Colbún's Business Model
Business Strategy Evolution of Colbún’s Business Model Contractual Phase I Phase II Phase III GWh MMUSD Commitments Balanced Unbalanced Balanced Commercial Commercial Commercial 12000 Position Position Position 500 446 450 “Base” 10000 Generation 400 337 331 350 8000 300 236 6000 250 211 205 170 200
Slide 24: A quarterly look at Colbún's results
Business Strategy A quarterly look at Colbún’s results Sales vs. Generation - quarterly (GWh) Revenues - quarterly (MMUSD) 3000 361 362 2500 Thermal Thermal Thermal Thermal Thermal Thermal Thermal Thermal 2000 335 1500 315 320 1000 Contracts Contracts Contracts Contracts Contracts Contracts Contract
Slide 25: Agenda
Agenda Company Overview Chilean Electricity Sector Business Strategy Financial Profile 25
Slide 26: Historical key financial indicators
Financial Profile Historical key financial indicators Revenues, EBITDA (MMUSD) & EBITDA Margin EBITDA, Capex, Dividends, ∆WK & ∆K (MMUSD) 1.600 Revenues EBITDA EBITDA margin (%) 700 Others K WK Dividends Capex EBITDA 1.400 59% 600 1.200 500 1.000 44% 400 800 Average 29% 32% Average EBITDA00-05 EBITD
Slide 27: Conservative Financial Strategy
Financial Profile Conservative Financial Strategy: Smooth debt profile coupled with a strong liquidity position Amortization Schedule of LT Debt (MMUSD) Balance Sheet as of Mar. 2012 (MMUSD) 600 Banks Bonds Current Assets 764 500 Cash and equivalents 203 400 Accounts receivable 213 300 Normal sales
Slide 28: Colbún
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