Colbun Sa · BCS:COLBUN

Colbun Sa — BAML Emerging Markets Debt and Equity Conference 2019

33 slides from Colbun Sa's conference presentation, May 2019

  1. Slide 1: BAML Emerging Markets Debt and Equity Conference Corporate Presentation

    BAML EMERGING MARKETS DEBT AND EQUITY CONFERENCE CORPORATE PRESENTATION MAY 2019

  2. Slide 2: Disclaimer & Contact Information

    Disclaimer & Contact Information ▪ This document provides information about Colbún S.A. In no INVESTOR RELATIONS 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

  3. Slide 3: Agenda

    AGENDA 1. COMPANY OVERVIEW 2. VALUE PROPOSITION 3. STRATEGIC AGENDA PROGRESS 4. CONCLUDING REMARKS 3

  4. Slide 4: Company & industry overview: Leading position in Chile & Peru

    Company & industry overview Leading position in Chile & Peru THE COMPANY Installed Capacity Market Share1 Ownership 3,893 MW 17% / 8% 49.96% Matte Group 3,328 MW / 565 MW 9.58% Angelini Group Power-Plants Transmission Lines 20.45% Pension Funds 26 ~940 km 20.01% Others 25 / 1 KEY FINANCIALS Internat

  5. Slide 5: Agenda

    AGENDA 1. COMPANY OVERVIEW 2. VALUE PROPOSITION 3. STRATEGIC AGENDA PROGRESS 4. CONCLUDING REMARKS

  6. Slide 6: Value proposition: Leading position supported by competitive strengths

    Value proposition Leading position supported by competitive strengths 1 2 3 PRUDENT 4 5 MAXIMIZING COST STABLE & ATTRACTIVE EFFICIENT AND PREDICTABLE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED CASH FLOWS MANAGEMENT GROWTH OF OUR ASSET BASE OPTIONS STAKEHOLDERS 6

  7. Slide 7: Value proposition: Leading position supported by competitive strengths

    Value proposition Leading position supported by competitive strengths 1 2 3 PRUDENT 4 5 MAXIMIZING COST STABLE & ATTRACTIVE EFFICIENT AND PREDICTABLE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED CASH FLOWS MANAGEMENT GROWTH OF OUR ASSET BASE OPTIONS STAKEHOLDERS 7

  8. Slide 8: Cost efficient & diversified asset base: Attractive markets

    1. Cost efficient & diversified asset base Attractive markets… GENERATION DEMAND GROWTH MARGINAL COST MARKET SHARE1 GWh 12 month average % US$/MWh % Others Others 6% SEIN 40 Santa Rosa Peruvian 29% 8% 5% Gov. 5% 30 20% 4% Natural 51,553 3% 20 Gas 8% 2% SEIN 38% 10 5 Kallpa 1% 13 GW Hydro Engie 14% +

  9. Slide 9: Cost efficient & diversified asset base: High growth potential

    1. Cost efficient & diversified asset base … with high growth potential AVERAGE RESIDENCIAL ELECTRICITY CONSUMPTION 1,000 (kWh/month) Only22% of the total energy consumption in Chile corresponds to electricity. 800 600 400 As electricity prices become more competitive, 200 houses will start an elect

  10. Slide 10: Assets diversified by technology & geography

    1. Cost efficient & diversified asset base Assets diversified by technology & geography ▪ 42% of installed capacity from renewable energy. ▪ Diversified asset base: 9 regions in Chile, 1 in Peru. Assets spread throughout 1,050 km in Chile. FENIX POWER 565 MW 3,893 MW Inst. Capacity: Hydro: 1,634 MW

  11. Slide 11: Decarbonization Process

    1. Cost efficient & diversified asset base Decarbonization Process COAL-FIRED PLANTS & DATE OF COMMISSIONING ▪ Colbún has only 1 coal-fired power plant of 60’s 60’s 60’s 60’s 60’s 70’s 70’s the 28 present in the system. ▪ Santa Maria was built in 2012, being one of the most efficient and modern coal

  12. Slide 12: 100% of PPAs supplied with cost-efficient generation

    1. Cost efficient & diversified asset base 100% of PPAs supplied with cost-efficient generation WHOLE-SALE COMMERCIAL POLICY GENERATION & PPAs level 1Q19 LTM 1. Optimal Contracting level I. Renewable Capacity: Generation Commitments Hydro, solar and wind (TWh) (TWh) II. Efficient thermal capacity: D

  13. Slide 13: 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

  14. Slide 14: Relevant transmission assets ~940 km

    1. Cost efficient & diversified asset base Relevant transmission assets Transmission lines ~940 km National 330 km Zonal 80 km Dedicated 530 km Substations 28 Market share 1 ~ 6% Proforma EBITDA LTM ~US$ 69 mm Note: All figures as of Mar19 1 National Transmission 14

  15. Slide 15: Fenix Power: a relevant & efficient CCGT in Peru

    1. Cost efficient & diversified asset base Fenix Power: a relevant & efficient CCGT in Peru THE COMPANY SHAREHOLDERS One of the most efficient CCGT in Peru 36% Based on Heat Rate 51% 40 miles south of Lima Capital of Peru and largest city of the country 13% 565 MW KEY FIGURES Gross effective capacit

  16. Slide 16: Value proposition: Leading position supported by competitive strengths

    Value proposition Leading position supported by competitive strengths 1 2 3 PRUDENT 4 5 MAXIMIZING COST STABLE & ATTRACTIVE EFFICIENT AND PREDICTABLE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED CASH FLOWS MANAGEMENT GROWTH OF OUR ASSET BASE OPTIONS STAKEHOLDERS 16

  17. Slide 17: Stable & predictable cash flows: High quality clients in Chile

    2. Stable & predictable cash flows High quality clients in Chile CUSTOMER BASE PROFILE +200 50% / 50% ~94% ~8 YEARS Regulated/ Total Customers with Average life of unregulated customers credit ratings PPAs customers PPAs IN CHILE: MAXIMUM CONTRACTED POWER SUPPLY (TWh) Regulated Customers Unregulated

  18. Slide 18: PPAs renewal opportunities in Chile

    2. Stable & predictable cash flows PPAs renewal opportunities in Chile UNREGULATED CUSTOMERS ▪ In the coming years there is a relevant amount of energy for large unregulated clients to be re- contracted. ▪ Since 2016, Colbun has signed new contracts with large and medium-size clients for a total of

  19. Slide 19: Value proposition: Leading position supported by competitive strengths

    Value proposition Leading position supported by competitive strengths 1 2 3 PRUDENT 4 5 MAXIMIZING COST STABLE & ATTRACTIVE EFFICIENT AND PREDICTABLE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED CASH FLOWS MANAGEMENT GROWTH OF OUR ASSET BASE OPTIONS STAKEHOLDERS 19

  20. Slide 20: Stable operational results & solid metrics

    3. Prudent financial management Stable operational results & solid metrics 1. EBITDA & EBITDA MG. (US$ million & %) 2. NET INCOME. (US$ million) EBITDA Chile EBITDA Fenix EBITDA Mg 289 45% 45% 45% 44% 44% 230 232 54 36 39 200 205 56 639 648 644 582 546 2015 2016 2017 2018 1Q19 LTM 2015 2016 2017 201

  21. Slide 21: Strong liquidity

    3. Prudent financial management Strong liquidity 1. CASH POSITION. (US$ million) 3. CASH FLOW (US$ million) 1,081 Operating Activities Financing Activities 810 816 788 Investing Activities Net Cash Flow 667 2015 2016 2017 2018 2019 LTM 255 133 1 2015 2016 2017 2018 1Q19 LTM (43) 2. DIVIDEND DISTRIBU

  22. Slide 22: Long term debt profile

    3. Prudent financial management Long term debt profile 1. DEBT PROFILE US$1,612 mm 100% bonds 4.5% Interest Rate average US$1,254 million 94% USD and 6% UF US$349 million 100% Fixed rate 6.5 years average life 2. AMORTIZATION STRUCTURE. (US$ million) 600 Fenix Bond 527 527 500 Colbun Bonds 400 300 2

  23. Slide 23: Value proposition: Leading position supported by competitive strengths

    Value proposition Leading position supported by competitive strengths 1 2 3 PRUDENT 4 5 MAXIMIZING COST STABLE & ATTRACTIVE EFFICIENT AND PREDICTABLE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED CASH FLOWS MANAGEMENT GROWTH OF OUR ASSET BASE OPTIONS STAKEHOLDERS 23

  24. Slide 24: Attractive portfolio of growth options: Local expansion considerations

    4. Attractive portfolio of growth options Local expansion considerations GROWTH STRATEGY WIND AND SOLAR PIPELINE OF PROJECTS Add 4,000 MW of new renewable capacity over 10 ▪ Current portfolio of 7 wind and solar projects, for years a total of ~1,800 MW ▪ Focus on solar and wind. The development cost

  25. Slide 25: Large pipeline of renewable projects

    4. Attractive portfolio of growth options Large pipeline of renewable projects SOLAR & WIND HORIZONTE DIEGO DE ALMAGRO SUR I & II SOL DE TARAPACÁ PROJECTS ▪ Atacama Region ▪ Atacama Region ▪ Tarapacá Region ▪ Inst. capacity : ~607 MW ▪ Inst. capacity: 210 MW ▪ Inst. capacity: 200 MW ▪ Gx: ~2,000 GWh

  26. Slide 26: International expansion

    4. Attractive portfolio of growth options International expansion OTHERS Tracking trends and business models KEY DRIVERS 1. Low per capita energy consumption 2. Stable regulatory frameworks / positive developments in STRATEGY Argentina 1. Preference for assets in operation 3. Expected increases in e

  27. Slide 27: Value proposition: Leading position supported by competitive strengths

    Value proposition Leading position supported by competitive strengths 1 2 3 PRUDENT 4 5 MAXIMIZING COST STABLE & ATTRACTIVE EFFICIENT AND PREDICTABLE FINANCIAL PORTFOLIO OF VALUE TO ALL DIVERSIFIED CASH FLOWS MANAGEMENT GROWTH OF OUR ASSET BASE OPTIONS STAKEHOLDERS 27

  28. Slide 28: Sustainability strategy

    5. Maximizing value to all of our stakeholders Sustainability strategy SUSTAINABILITY IS OUR BUSINESS AND IT IS AWARDS AND RECOGNITIONS INTEGRATED IN ALL AREAS OF THE COMPANY 2018 2018 2018 Colbún listed in the Dow Colbún obtained the Colbún won the Jones Sustainability first place in the category F

  29. Slide 29: Agenda

    AGENDA 1. COMPANY OVERVIEW 2. VALUE PROPOSITION 3. STRATEGIC AGENDA PROGRESS 4. CONCLUDING REMARKS 29

  30. Slide 30: Update on strategic agenda progress: Overview

    Update on strategic agenda progress Overview 1. Enter in to New Power 4. Complete digitalization and Purchase Agreements automation program During 1Q19, Colbún contracted ~300 Simplify operational, administrative and GWh/year of its generation with new maintenance processes. unregulated customers. 2

  31. Slide 31: Agenda

    AGENDA 1. COMPANY OVERVIEW 2. VALUE PROPOSITION 3. STRATEGIC AGENDA PROGRESS 4. CONCLUDING REMARKS 31

  32. Slide 32: Concluding remarks

    Concluding remarks 1. Shareholders: 4. Customers: Strong, reliable controlling group with a Diversified, solid and creditworthy portfolio strategic and long-term vision of the of clients. business. 2. Size: 5. Sustainability: Leading position in Chile’s power market and Integrated in all areas of th

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Colbún — BAML Emerging Markets Debt and Equity Conference 2019 on 6ix