Ecl S.a. · NEWCONNECT:ECL

Ecl — LarrainVial conference with investors (March 2014)

38 slides from Ecl's conference presentation, March 2014

  1. Slide 1: E.CL Energia Esencial

    ENERGIA ESENCAL SIE-CL I>) r | CHILE PERU COLOMBIA ae LarrainVial OC]

  2. Slide 2: Agenda

    AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 2

  3. Slide 3: Highlights

    HIGHLIGHTS  In 4Q13 E.CL reported EBITDA of US$60 million, with full-year EBITDA reaching US$252 million, roughly in line with the 2012 full-year number, in spite of higher fuel costs throughout the SING system and the LNG terminal maintenance in June.  A new law was approved authorizing the gover

  4. Slide 4: Financial Highlights

    HIGHLIGHTS Financial Highlights (US$ million) 2012 2013 Var. % Operating Revenues (US$ million) 1,185.0 1,207.1 2% EBITDA (US$ million) 254.7 251.5 -1% EBITDA margin (%) 22% 21% -3% Net income (US$ million) 56.2 39.6 -30% Net debt (US$ million) 602.6 547.8 -9% Energy sales (GWh) 9,580 9,704 1% Net g

  5. Slide 5: Agenda

    AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 5

  6. Slide 6: Chilean electricity industry – 2013

    Chilean electricity industry – 2013 INDUSTRY Growth Generation GWh Main players Market Clients (2013-2023)¹ (2013) (% installed capacity) Regulated Diesel Gas 9% Endesa 12% 8% 25% capacity 6.2% 24% E.CL 53% 3,965MW SING 26% demand AES Unregulated Gener 88% Coal 82% 21% Regulated Diesel 3% Colbún 20%

  7. Slide 7: Characteristics of the SING

    Characteristics of the SING INDUSTRY  Nearly 100% of installed capacity based on coal, natural gas (LNG) and diesel  No exposure to hydrologic risk  Long-term contracts with unregulated clients (mining companies) account for almost 90% of demand  Flexibility to negotiate prices and supply terms

  8. Slide 8: Mining sector in Chile: announced investments in new projects

    INDUSTRY Mining sector in Chile: Announced investments in new projects Estimated Estimated Possible International investment copper production Rating Mining Project Sponsor (US$ mm) production start date (Moody’s/S&P) Lomas Bayas III Súlfuros $1,600 70 Th TPA >2017 Xstrata Baa2/BBB+ Esperanza Sur (e

  9. Slide 9: Ownership structure (as of end-December 2013)

    COMPANY Ownership structure (as of end-December 2013) GDF SUEZ Local Foreign Other Pension Funds Institutions Institutions 52.77% 13.93% 22.98% 9.78% 0.54% Inv. Punta de E.CL S.A. Rieles Ltda. 40% Inversiones Central Gasoducto Edelnor Distrinor S.A. Hornitos S.A. Termoeléctrica Norandino S.A. Transm

  10. Slide 10: Installed capacity – SING & E.CL

    COMPANY Installed capacity – SING & E.CL SING - Gross installed capacity – December 2013 (MW) E.CL - Growth in installed capacity in recent years 2,108 MW 2.500 2.500 2,108 MW 10 10 12 12 1,665 MW 2.000 288 2.000 317 317 288 10 13 13 317 317 1.500 1.500 176 688 688 688 688 962 MW 688 688 688 1.000 8

  11. Slide 11: E.CL's assets

    COMPANY Installed Capacity (Dec. 13) E.CL’s Assets Technology Coal Renewables Diesel/FO Chapiquiña (10MW) Natural gas 1% El Aguila I (2MW) Renewable Diesel 14% Coal 53% Diesel Arica (14MW) Diesel Iquique (43MW) TE Tocopilla (1,004MW) Collahuasi Tocopilla puerto El Abra Gas/diesel Chuquicamata 33% C.

  12. Slide 12: Evolution of PPA portfolio balance

    COMPANY Evolution of PPA portfolio balance (as of December 2013) Average realized monomic Average estimated consumption (MWh/h) sale price (USD/MWh) FY 2012 FY 2013 2014 2015 2016 2017 Coal and renewables (MW-net) 895 895 895 895 Gas (MW-net) 256 215 215 215 A) “Contractable” efficient capacity 1,15

  13. Slide 13: PPA portfolio indexation

    COMPANY PPA portfolio indexation Overall indexation applicable (as of end-December 2013) Other: CPI, PPI, node price 16.1% Diesel Marginal Cost 0.1% 2.3% Fuel Oil 0.1% Coal Gas 60.2% 21.1% As a percentage of effective demand …matched with an aligned cost structure, through indexation formulas in PPA

  14. Slide 14: Indexation of the EMEL PPA

    COMPANY PPA portfolio indexation Indexation of the EMEL PPA  Timetable of tariff adjustments: May and November of each year  The tariff is determined in US dollars and converted to CLP at the average observed exchange rate of March and September of each year. Such exchange rate prevails for 6 mont

  15. Slide 15: E.CL's energy supply curve – 2013

    COMPANY US$/MWh E.CL’s energy supply curve – 2013 200 180 160 Average realized monomic price: US$109/MWh 140 FO-Di 120 100 Average fuel & electricity purchase cost per MWh sold: US$63/MWh Spot purchases 80 60 CTM3 U-16 40 CTA CTM2 CTH CTM1 U-15 U-14 U-13 U-12 20 00 Renewables Coal 5,135 GWh LNG 1,14

  16. Slide 16: Generation overcosts in the SING

    Generation overcosts in the SING INDUSTRY OVERCOSTS IN THE SING IN US$ MILLIONS  The so-called “overcosts” (“sobrecostos”) are regulated by Resolution 39/2000 (RM39) and by Supreme Decree 130/2012 2012 2013 2013 vs 2012 (DS130) to cope with the costs stemming from the SING’s E.CL E.CL E.CL TOTAL Pr

  17. Slide 17: Agenda

    AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 17

  18. Slide 18: Infraestructura Energética Mejillones (IEM)

    PROJECTS Infraestructura Energética Mejillones (IEM) Characteristics Gross capacity (IEM1 & IEM2) 2 x 375 MW Net capacity 2 x 320 MW Availability (plant factor) 90% Location Mejillones Mechanized port Associated infrastructure (Capesize carriers) Transmission line IEM1 New 170-km, 220kV, 350 MVA Exp

  19. Slide 19: SIC-SING transmission line (1 of 2)

    PROJECTS SIC-SING transmission line (1 of 2)  E.CL’s Board decided to exercise the option to acquire Transmisora Eléctrica del Norte (“TEN”) from E.CL’s main shareholder, GDF Suez Energy Andino (“GSEA”), for the purpose of developing a transmission line connecting Mejillones (SING) to Copiapó (SIC)

  20. Slide 20: SIC-SING transmission line (2 of 2)

    PROJECTS SIC-SING transmission line (2 of 2) Characteristics Type Double circuit, 500 kV, alternate current Capacity 1,500 MVA per circuit Length 580 km connecting Mejillones (SING) to Copiapó (SIC) T.E.N. (Transmisora Eléctrica del Norte), wholly Sponsor owned by E.CL Private initiative meeting all

  21. Slide 21: Eléctrica Monte Redondo (EMR) potential acquisition

    PROJECTS Eléctrica Monte Redondo (EMR) potential acquisition  EMR operates in the SIC, is owned by GDF SUEZ, and comprises a 48MW wind farm in operations and the 34MW Laja Hydro plant under construction.  GDF SUEZ has stated that E.CL will be its investment vehicle for the electricity generation b

  22. Slide 22: Solar Projects

    PROJECTS Solar Projects  E.CL has the operational and commercial skills to be a leading player in solar-based electricity generation in the SING.  El Águila I (2MW) was developed as a pilot project and inaugurated in July 2013.  Pampa Camarones I (6MW 1st stage) is under development: • Expected t

  23. Slide 23: Sale of Distrinor

    PROJECTS Sale of Distrinor  Distrinor was E.CL’s subsidiary for the sale and distribution of natural gas to industrial clients in the North of Chile, with an annual EBITDA of between US$1.5 and US$2 million and no debt.  In order to focus on its core power business, E.CL has decided to sell Distri

  24. Slide 24: Environmental CAPEX

    PROJECTS Environmental CAPEX  Stricter particle-matter and gas (NOx and SOx) emission requirements were approved by Chilean authorities in 2011.  E.CL is investing to comply with the new emission requirements well before the due dates.  The estimated CAPEX will amount to approximately US$170 mill

  25. Slide 25: Innovation and sustainability

    E.CL S.A. PROJECTS Innovation and sustainability Cobia Solar Microalgae Wind Biomass Steam-solar E.CL is committed to continuous social and environmental improvement. 25

  26. Slide 26: Approved CAPEX program

    E.CL S.A. PROJECTS Approved CAPEX program CAPEX (US$ million) 2013 2014e 2015e 2016e Generation: Maintenance 35 37 88 40 Generation: Environmental project 66 19 - - Transmission 6 16 32 13 Development (1) 8 16 6 4 Other (2) 12 18 4 7 TOTAL 127 106 129 64 Notes: 1. “Development” includes only the El

  27. Slide 27: Agenda

    AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 27

  28. Slide 28: Electricity sales, generation and average monomic prices

    FINANCIAL RESULTS Electricity sales (GWh) Gross electricity generation (GWh) Total 9,580 Total 9,704 Total 9,551 Total 9,480 10.000 329 240 10.000 224 356 1.699 1.822 1.728 1.605 8.000 8.000 6.000 6.000 7.553 7.643 7.550 7.473 4.000 4.000 2.000 2.000 2012 2013 2012 2013 Unregulated Regulated Spot Co

  29. Slide 29: Income Statement

    FINANCIAL RESULTS Income Statement (US$ millions) 2012 2013 Var. % Operating revenues 1,185.0 1,207.1 2% Operating income (EBIT) 111.0 118.0 6% EBITDA 254.7 251.5 -1% Net income 56.2 39.6 -30% Average realized monomic sale price (US$/MWh) 113.9 109.1 -4%  Despite a 4% reduction in PPA prices (refle

  30. Slide 30: EBITDA Comparison - 2013 vs. 2012

    FINANCIAL RESULTS In millions of US$ EBITDA Comparison - 2013 vs. 2012 Effect of CTA/ 300 +3 +2 -26 CTH outage +22 Jan, 2013 280 +6 -5 -5 260 16 240 220 200 180 255 252 160 140 120 100 EBITDA 2012 Volume effect Better margins in Insurance Other Margin effect Effect of LNG Repair costs - CTH EBITDA 2

  31. Slide 31: Gasoducto Norandino Argentina restructuring

    FINANCIAL RESULTS Gasoducto Norandino Argentina restructuring  In October 2013, E.CL’s subsidiary Gasoducto Norandino Argentina S.A. (“GNAA”) reached an agreement with TGN regarding a number of gas transportation and O&M services, through which GNAA made an advanced payment of US$15.4 million to TG

  32. Slide 32: Net Income comparison 2013 vs. 2012

    FINANCIAL RESULTS In millions of US$ Net Income comparison 2013 vs. 2012 100 +8 +1 -7 90 -9 +17 80 -4 Minority Interest -11 70 +5 Minority -11 Interest 60 3 50 9 40 30 56 20 40 10 0 Net income Volume effectNon-recurrent Lower Others Margin effect FX difference Repair costs Income in the Impairment N

  33. Slide 33: Financial ratios remain strong

    FINANCIAL RESULTS Available Cash (millions of US$) Gross Debt / LTM1 EBITDA 250 4,0 200 3,0 150 2,0 192,1 213,4 3,1 3,1 100 1,0 50 0,0 12/31/2012 12/31/2013 12/31/2012 12/31/2013 Available cash Gross Debt / LTM EBITDA Net Debt / LTM1 EBITDA LTM1 EBITDA / LTM1 Gross interest Expense 3,0 6,0 2,5 5,0 2

  34. Slide 34: E.CL's Debt breakdown (as of end-December 2013)

    FINANCIAL RESULTS E.CL’s Debt breakdown (as of end-December 2013) -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------  E.CL has only two debts, with a current average co

  35. Slide 35: Net debt evolution during 2013

    FINANCIAL RESULTS In millions of US$ Net debt evolution during 2013 900 +45 -24 850 -30 +56 -245 800 750 +127 +16 700 650 600 550 500 603 548 450 400 Net debt as of CAPEX Net income tax Dividends Net interest Swap MTM Proceeds from Cash flow from Net debt as of 12/31/12 payments expenses variation t

  36. Slide 36: Dividends

    FINANCIAL RESULTS Dividends  E.CL has a flexible dividend policy, which consists of paying the minimum legal required amount (30% of annual net income), although higher payout ratios may be approved in function of (among others) anticipated capital expenditures:  2009 payout: 30%  2010 payout: 50

  37. Slide 37: International and national ratings

    FINANCIAL RESULTS International ratings Solvency Perspective Date Standard & Poors BBB Stable December 2013 Fitch Ratings BBB- Positive August 2013 National ratings Solvency Perspective Shares Date Feller Rate A+ Stable 1st Class Level 2 January 2014 Fitch Ratings A Positive August 2013 ICR A Stable

  38. Slide 38: Forward-looking statements disclaimer

    This presentation may contain certain forward-looking statements and information relating to E.CL S.A. (“E.CL” or the “Company”) that reflect the current views and/or expectations of the Company and its management with respect to its business plan. Forward-looking statements include, without limitat

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