Enel Americas S.a. · BCS:ENELAM
Enel Americas — Investor Presentation (July 2018)
42 slides from Enel Americas's investor presentation, July 2018
Slide 1: Enel Américas Corporate Presentation, July 2018
Enel Américas Corporate Presentation, July 2018
Slide 2: Enel Américas Overview
Enel Américas Overview
Slide 3: Enel Américas overview
Enel Américas overview1 Enel Américas is Latin America´s largest private power company Brazil Colombia Generation Generation 1,354 MW 3,467 MW 1% Market Share in Installed capacity 21% Market Share in Installed capacity Net Production 4,034 GWh Net Production 14,765 GWh Sales 12.587 GWh Sales 18,156
Slide 4: Enel Américas overview: financial highlights FY 2017
Enel Américas overview Financial highlights (US$ mn) FY 2017 Revenues EBITDA + 37.1% + 21.3% 10,540 + 17.7% 7,686 1,536 Celg 2,945 + 94 2,947 83 145 Celg 9,004 2,430 + 73 2,503 - 92 2,052 FY16 2016 One-off1 FY16 EBITDA FY17 EBITDA FX effects 2017 One-offs2 FY17 FY 16 FY 17 ex. One-offs ex. One-offs
Slide 5: Ownership profile
Enel Américas overview Ownership profile1 51.80% 15.51% 22.28% CHILEAN PENSION OTHER INST. FUNDS SHAREHOLDERS 7.69% 2.72% ADR HOLDERS Américas OTHER SHAREHOLDERS Market Cap2: USD 10.13 Bn 1. As of June 30, 2018. 2. As of July 30, 2018. 5
Slide 6: Strategic Plan 2018-20
enel Strategic Plan 2018-20
Slide 7: Macro and energy scenario
Macro and energy scenario South America Region (%)1 Local currencies vs USD CPI2 GDP -3.6 2.6 Argentina 20.0 -2.9 Argentina 17.0 Argentina 2.9 -2.2 14.0 3.0 -6.3 4.9 1.9 Brazil -2.9 Brazil 4.3 Brazil 2.0 -2.9 4.2 2.3 -4.8 3.7 2.7 Colombia -1.8 Colombia 3.7 Colombia 2.9 -2.6 3.5 3.1 -3.0 2.5 3.8 Peru
Slide 8: Industrial growth: Organic growth - Capex plan 2018-20
Industrial growth: Organic growth Organic growth - Capex plan 2018-20 Total capex Growth capex by business Maintenance capex by business 5% 9% 32% 40% Generation Generation Maintenance 5.2 bnUSD 3.2 bnUSD Free m. + e-Solutions 2.1 bnUSD Free m. + e-Solutions Growth 60% I&N I&N 65% 4% 85% 6% Total ca
Slide 9: Infrastructure & Networks evolution
Industrial growth: Organic growth Infrastructure & Networks evolution Regulatory Next regulatory EBITDA (bnUSD) WACC2 cycle cycle RAB (bnUSD) +3.9 +93% 13.2 +0.3 3.8 +1.4 3.0 9.3 -0.4 12.5% 12.5% 2.4 2.0 Argentina 5 years 2022 1.6 1.4 Rio 11.4% 12.3% 5 years 2018 +0.1 1.0 1.5 Brazil Ceará 12.3% 12.3
Slide 10: Generation evolution
Industrial growth: Organic growth Generation evolution EBITDA (bnUSD) Contracted Energy (TWh) Brazil Colombia +4% 14.9 13.3 13.3 15.7 14.6 11.9 13.0 > > 94% > > 10.1 100% > 100% 85% 100% 100% +0.2 100% 89% 1.4 1.4 -0.2 2017 2018 2019 2020 2017 2018 2019 2020 Peru 10.9 11.4 11.1 10.0 Average duration
Slide 11: Free market + e-Solutions evolution
Industrial growth: Organic growth Free market + e-Solutions evolution EBITDA (bnUSD) Enel Américas Free energy sold (TWh) From 2017E Market share To 2020E Market share Argentina 0.2 5% 5.0 15% +164% Brazil 3.2 3% 9.7 7% Colombia 4.3 20% 5.2 23% 4 128 Peru 5.9 24% 7.5 25% + 0.09 0.25 13.6 27.4 -0.01
Slide 12: Efficiencies
Efficiencies Accomplished % accomplished Operational efficiency1 Previous Plan 20193 20173 as of 2017 New Plan 20204 OPEX 234 244 104% 90 S&S2 59 55 93% 12 Cash Optimization 15 15 100% - Tax 50 50 100% - New Perimeter - - 100% 97 Total 358 364 102% 199 Efficiencies vs 2015 1,152 1,059 1. MUSD net of
Slide 13: FFO, Capex and Cash flow 2018-20
Financial targets FFO1, Capex and Cash flow 2018-20 FFO and CAPEX (bnUSD) 2018-20 Cash flow generation (bnUSD)2 +64% 7.7 2.9 2.5 5.6 2.3 - 2.1 1.8 1.7 1.9 1.8 1.6 2.4 - 3.2 - 2.4 0.0 2017 2018 2019 2020 FFO 1 Maintenance FFO after Growth FCF Dividends Net FCF capex maint. capex capex paid FFO Capex
Slide 14: Guidance 2018-20
Financial targets Guidance 2018-20 (bnUSD) Previous Plan New Plan New Plan vs Previous Plan 2018 2019 2018 2019 2020 2018-19 EBITDA 3.3 3.7 3.7 4.2 4.6 +12.9% Capex 1.5 1.4 1.9 1.8 1.6 +27.6% Net Income1 1.1 1.3 1.4 1.4 1.6 +16.7% Substantial Net Income growth ensures remuneration to our shareholder
Slide 15: Targets - EBITDA by country and by business
Financial Targets Targets - EBITDA by country and by business EBITDA by Country EBITDA by Business 2018 2020 2018 2020 3% 5% 15% 13% 23% 25% 32% 38% 3.7 bnUSD 4.6 bnUSD 3.7 bnUSD 4.6 bnUSD 30% 33% 59% 29% 63% 32% +24% +24% Brazil Argentina Networks Free market + Colombia Peru Generation e-Solutions
Slide 16: New Dividend Policy
Financial targets New Dividend Policy Attributable Net Income (US$ bn) and paid dividends +99% 1.4 +25% 0.7 0.6 Dividends paid 2016 2017 2018E Dividend Payout 50% 50% 40% 16
Slide 17: Net debt evolution
Financial targets Net debt evolution (bnUSD) 1.3x 1.0x 0.9x 0.8x 4.6 4.2 3.8 3.9 3.7 3.7 3.5 2.9 3.7 4.2 3.5 2017E 2018 2019 2020 EBITDA Net Debt Net debt to EBITDA ratio Low ratio net debt to EBITDA leaves room to additional growth 17
Slide 18: 1H2018 results
enel 1H2018 results
Slide 19: Group EBITDA evolution by business and country
1H 2018 results Group EBITDA evolution by business and country (US$ m) Generation Distribution + 14.4% + 24.9% 109 875 24 14 819 (12) (2) 21 154 90 716 701 (45) (74) 1 1 1 1 1H 17 Fx impact Argentina Brazil Colombia Peru 1H 18 1H 17 Fx impact Argentina Brazil Colombia Peru 1H 18 1. Not including Ser
Slide 20: From EBITDA to Net income
1H 2018 results From EBITDA to Net income (US$ m) 1,652 1,249 (404) 2 1,034 (217) 660 (374) 403 (258) EBITDA D&A EBIT Net financial Non operating EBT Income tax Net Income Minorities Attr. Net result results Income 1H 17 1,385 - 401 984 - 342 5 647 - 273 374 - 168 206 ∆ yoy 19.3% 0.6% 26.9% 36.6% -5
Slide 21: Gross debt breakdown
1H 2018 results Gross debt breakdown1 (US$ m) Gross and Net Debt Gross debt breakdown by currency Gross debt breakdown by country 7.9% 7.3% + 81.6% + 81.6% 9,059 9,059 9,059 5% 7% 12% 11% New cash2: 2,492 US$ 1.0 bn 23% 23% 4,988 4,988 4,988 9% 12% New Net Debt2: 16% 13% 1,639 US$ 3.6 bn 59% 59% 6,5
Slide 22: Sustainability
Sustainability enel
Slide 23: Sustainable long-term value creation
Sustainable long-term value creation A sustainable strategy Enel Américas Delivery1 2017 (k) 2015-17E (k) Main projects in SDGs2 framework Pachacutec Electrotechnical Institute Access to education for low-income students training in the industrial electrotechnical career. The 188 191 project is impl
Slide 24: Acquisition of Eletropaulo
Acquisition of Eletropaulo
Slide 25: Eletropaulo at a Glance
Eletropaulo at a Glance Largest Metropolitan Area of the Most Developed and Industrialized State in Brazil 7.2m Clients 43TWh Energy Sold State of São Paulo Brasil 1.6k/km2 Customer Density 6.0 MWh/yr Avg. Consumption Eletropaulo’s Concession 24 Cities 9.7% Losses Eletropaulo is a distribution compa
Slide 26: Eletropaulo historical EBITDA, clients and distributed energy
Eletropaulo at a glance Eletropaulo’s historical EBITDA, Clients and Distributed Energy evolution EBITDA (US$m) Clients and Distributed Energy EBITDA pre-pension funds EBITDA margin 403 7,155 46,415 355 302 108 88 222 99 Eletropaulo 7.0 % 80 6,742 42,982 295 268 Avg. Enel Dx Brazil 204 12.5 % 142 20
Slide 27: Eletropaulo capex per client, employees and SAIDI
Eletropaulo at a glance Eletropaulo Capex by clients 25 23.8 7,600 7,280 7,355 7,400 7,165 7,200 Eletropaulo n. of employees 20 7,000 6,800 15 Eletropaulo SAIDI (hours per year) 13.2 15.9 6,600 6,400 10 6,152 11.7 6,200 6,000 5 5,800 5,600 0 5,400 2014 2015 2016 2017 Capex/Client (US$) 24.0 24.5 31.
Slide 28: Investment Rationale
Investment Rationale Eletropaulo Represents an Attractive Investment, Operating in Brazil’s Most Important Region Opportunity to consolidate Enel Américas’ presence in Brazil becoming a leading integrated player in that country Leverage on Enel competences for opex reduction and digitalization of di
Slide 29: Eletropaulo EBITDA evolution 2017-2021
Investment Rationale Eletropaulo EBITDA evolution 2017-2021 (US$m) ~ 50 ~ 750 ~ 100 ~ 700 ~100-150 ~ 150-200 295 EBITDA 2017 Efficiencies RAB growth & Quality Volume growth EBITDA 2021E Enel X & Retail Total EBITDA 2021E contribution to Enel Américas Group EBITDA/MWh 6.86 Eletropaulo 2017 EBITDA/MWh
Slide 30: Potential efficiencies
Investment Rationale Potential efficiencies Opex/client1 benchmark (US$) Main initiatives 80 Pension Fund 15 • Leverage on global procurement 42 • Alignment in service contracts to Enel’s standard procedures Opex/client (excl. Pension Fund) 65 • Deployment of smart technologies 42 • Technical Opex:
Slide 31: RAB growth opportunity
Investment Rationale RAB growth opportunity Capex evolution (US$m) 300 Total Capex 2019-21 (US$bn) 224 13% Smart Meters 20% Other ICT 5% Quality Avg. 2015-17 Avg. 2019-21 10% ~0.9 21% Connections & Tx Losses RAB evolution (US$bn) Maintenance 2.6 2.2 32% 2.0 2017 2019 2021 Tariff review Original valu
Slide 32: RAB per client evolution
Investment Rationale RAB per client evolution (US$) +24% +123% 1,170 411 389 345 278 184 2017 2021 2017 2021 2017 2017 Eletropaulo Enel Goiás Avg. Enel Rio and Ceará Enel Dx Chile High potential value creation from RAB increase Original values in BRL translated into USD using an Exchange rate of 3.6
Slide 33: Additional contributions to Enel Americas' EBITDA
Investment Rationale Additional contributions to the Enel Americas’ EBITDA Energy sales to free market Distributed Generation / Storage Presence in key markets for commercial / industrial Financial services connected to electricity bill clients Green products for the home Additional opport
Slide 34: Strategically Positioned as Largest Dx player in Brazil
Enel Américas Positioning Strategically Positioned as Largest Dx player in Brazil Number of Customers (m) 17.1 13.6 9.9 9.3 8.3 7.2 7.0 6.6 5.0 4.6 4.6 4.5 3.4 2.9 1.7 Enel 3 Neoenergia Enel 2 CPFL Cemig Eletropaulo Enel 1 Energisa Equatorial Copel Light Eletrobras edp Celesc CEEE Goiás Goiás Enel A
Slide 35: Main Transaction Terms
Main Transaction Terms Tender Offer for Eletropaulo Eletropaulo Enterprise Value Build-Up (US$ bn) Enel Américas has made the best offer to +0.4 +0.2 4.6 acquire Eletropaulo +0.8 + 1.0 Final price: 45.22 BRL per share 2.1 Enterprise Value of US$ 4.6 bn Tender offer successfully finalized (re
Slide 36: Eletropaulo Acquisition Financing
Eletropaulo Acquisition Financing • Tender Offer: ~ 2.1 Cash Needs 1 • K Increase in Eletropaulo: ~ 0.4 (US$bn) • Total: ~2.5 • Bridge financing (Promissory notes) Instrument signed with 3 banks • Enel Brasil Bridge financing to be replaced by the Borrowers • Enel Sudeste most adequate financing str
Slide 37: Closing remarks
Closing remarks ✔ Largest individual distribution concession in Brazil located in the most developed and industrialized state in the Country ✔ Enel Américas would become the market leader in the distribution business in Brazil ✔ Key value driver: Opportunity to increase efficiency and improve EBITDA
Slide 38: Exhibits
Exhibits
Slide 39: Main Macro assumptions
Main Macro assumptions Favorable Macro and Sector Dynamics GDP Brazil (% YoY) CPI (%) 2.6 4.9 2.3 4.3 4.2 1.9 2.0 4.2 2.8 1.0 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Energy Distributed1 (TWh) Fx Rate BRL/USD 42.06 38.74 40.30 37.32 34.88 3.70 3.55 3.45 3.35 3.19 2017 2018 2019 2020 2021 20
Slide 40: AES Eletropaulo Historical Data
AES Eletropaulo Historical Data Historical Data: Financials (US$m) 2014 2015 2016 2017 CAGR EBITDA (pre-pension fund) 222 355 302 403 +22.0% Pension Fund Provision 80 88 99 108 +10.5% EBITDA (Local GAAP) 142 268 204 295 +27.6% Net Income (36) 28 6 (235) -86.9% Net Financial Debt* 601 853 612 824 +11
Slide 41: Thank you. Contact us
Corporate Presentation Contact us Rafael De La Haza Head of Investor Relations Enel Américas Jorge Velis Investor Relations Manager Enel Américas Itziar Letzkus Investor Relations Enel Américas Email ir.enelamericas@enel.com Javiera Rubio Investor Relations Enel Américas Phone +562 23534682 Gonzalo
Slide 42: CNC
CNC