Enel Chile Sa · BCS:ENELCHILE
Enel Chile Sa — Investor Day (December 2019)
64 slides from Enel Chile Sa's investor day presentation, Dec 2, 2019
Slide 1: Investor Day Strategic Plan 2020-22
Investor Day Strategic Plan 2020-22
Slide 2: mvt Z mediatree 02/12/19
mvt Z mediatree 02/12/19 rd CATERING a 97. 87% = = 3. 39 tonnes of CO2 + Total number of meals: 200 i te Jan of pe 1 67 %o _ 0.06 tonnes of CO2 3 4 7 G + Total time spent at venue: 5.5 hours e TONNES OF CO2 + Total area of venue:450 m? 3 PRODUCTION CH 0.45% = 0.02 tonnes of CO, + Total number of equ
Slide 3: Agenda
Agenda Our Positioning Sustainability = Value Paolo Pallotti CEO Our vision Strategy Rationale Our vision in numbers Financial management Giuseppe Turchiarelli 2020-22 CFO Strategic plan De risking our business Earnings & targets Paolo Pallotti Closing Remarks
Slide 4: Investor Day Strategic Plan 2020-22
Investor Day Strategic Plan 2020-22 Paolo Pallotti CEO
Slide 5: Our positioning
Our positioning
Slide 6: Our positioning
Our positioning We are the largest utility in Chile with a strong, unique and resilient portfolio Leader in renewable and 4.7 GW capacity decarbonization with a 64% emission free diversified portfolio 14.6 TWh generation 68% emission free 16.8 TWh energy distributed Network operator 2.0 mn end users
Slide 7: Sustainability = Value
Sustainability = Value Our delivery over time
Slide 8: Sustainability=Value: commitment to stakeholders and sustainability
Sustainability=Value A strong commitment to our stakeholders and sustainability ESG policies/ programs approved by our Board of Directors ESG recognitions and certifications Biodiversity Policy Chile Index Environmental Policy MILA Index Emerging Markets Index Human rights policy Non discrim
Slide 9: Strategy has delivered value to shareholders
Sustainability=Value The development of our strategy has delivered value to our shareholders EBITDA (US$ bn) Shareholders return – DPS (US$/sh ‘000)4 Conventional Sustainable and integrated 8.0 business model business model 7.0 6.0 7.1 2 2 5.0 1 1.7 4.0 4.9 1.4 4.3 1 1 1.1 1.1 3.0 1 3.4 2.0 1 0 1.0
Slide 10: Our vision
Our vision
Slide 11: Sustainable strategy addresses market evolution and customer needs
Our vision Our sustainable strategy addresses market evolution and our customers needs Decarbonization & Renewables Enabling Ecosystems Infrastructure & Platforms Electrification VA L U E & SUSTAINABLE GROWTH 9
Slide 12: Renewables as main driver to sustain electrification
Decarbonization & Electrification Renewables Renewables shall be the country’ main driver to Our vision sustain electrification Share of electric energy on total energy Share of renewables on total generation in Chile¹ consumption in Chile² 23% 30% 32% 2018 46% 2050 2018 20503 54% Total Total 70% Re
Slide 13: Decarbonization through phasing out coal fleet
Decarbonization & Renewables Our vision Decarbonization of our operations though the phasing out our coal fleet 0.7 0.6 Tarapacá Bocamina I Bocamina II 0.5 0.1 Zero Coal Capacity 0.1 0.1 0.4 Coal net capacity 0.3 (GW) 0.3 0.3 0.3 0.2 0.1 0.0 2019E 2020 2025 Up to 2040 Closure dates Tarapacá Bocamina
Slide 14: Renewables coping with Chilean coal phase out program
Decarbonization & Renewables Our vision Renewables continuing to cope with the Chilean coal phase out program Net installed capacity 2022 Net capacity evolution (GW) +24% 27% Thermal 27% 0.9 9.2 1.1 40% 7.4 (0.2) 5% 9.2 GW coal 6.6 4.7 9% 73% renewable 1% 23% 2.7 2.5 Hydro Solar 2019E Thermal Old Pl
Slide 15: Accelerating ecosystems and platforms to foster electrification
Electrification Ecosystems & Platforms Our vision To foster the electrification, we will accelerate the development of ecosystems and platforms Smart lighting (‘000)1 Charging points1-2 (#) e-Home services3 (‘000) +26% +510% +167% 3,50 0 3,00 0 2,50 0 300 400 350 2,00 0 2,954 250 348 300 200 1,50 0
Slide 16: Networks: resiliency, quality and efficiency
Enabling Infrastructure Our vision Networks: centered on resiliency, quality and efficiency, to enable an effective electrification Digitalization Quality of service Efficiency Telecontrol equipment (#) SAIDI (min) Opex/client¹ +33% -20% -15% 3,5 10.00 250 .00 70.0 0 3,0 10.00 60.0 0 200 .00 2,5 10.
Slide 17: Purpose driven strategy promotes sustainable value creation
Our vision Purpose driven strategy promotes sustainable value creation for shareholders EBITDA (US$ bn) Shareholders return – DPS (US$/sh ’000) +13% +5% CAGR 8.0 7.5 2019-22 1.9 7.1 2 1.7 7.0 + 1.6% (~ 0.1) 6.0 2 5.0 4.0 1 3.0 2.0 1 1.0 - 0.0 2019E 2022 2019E 1 2022 Impact on Chilean current situati
Slide 18: Evolution of the regulatory framework
Our vision Evolution of the regulatory framework Energy Price Flexibility New distribution law Stabilization Mechanism Approved on Nov 2nd The Minister will publish Expected to be approved by the end the flexibility strategy of the year Regulated customers tariff were reverted to 1H2019 Ma
Slide 19: Energy tariff stabilization mechanism
Our vision Evolution of the regulatory framework Energy tariff stabilization mechanism Main takeaways Expected mechanism evolution¹ Up to Dec-20 Jan-21 to Jun-23 Jul-23 to Dec-25 Jan-26 to Dec-27 Regulated customers tariff will be reverted to 1H2019 Fixed prices Fixed prices + IPC Max (A; B) Max (A,
Slide 20: Strategy Rationale
Strategy Rationale
Slide 21: Capital allocation to reduce time to EBITDA
Strategy Rationale Capital allocation aiming to reduce time to EBITDA and with direct impact on SDGs Capex purposes allocation SDGs impacts at 2022 Capex that generates Capex to SDGs EBITDA by 2022 2022 vs. 2019E Additional renewable capacity (GW) ~2 2.5 2.5 US$ bn US$ bn Digitalization +736 (Teleco
Slide 22: Short-term strategy drivers for long-term sustainable value
We’ve reviewed our short-term strategy drivers to Strategy Rationale guarantee the long-term sustainable value creation +2.5 bn 30%¹ +5.0 % VA L U E & 2020-2022 Free market share in 2022 vs. 2019 DPS SUSTAINABLE GROWTH ~2 GW of additional renewable capacity Discipline on Capital Sustainable share Se
Slide 23: Investor Day Strategic Plan 2020-22
Investor Day Strategic Plan 2020-22 Giuseppe Turchiarelli CFO
Slide 24: Strategic Plan 2020-2022
2020-2022 Strategic Plan
Slide 25: Strategic plan at a glance
2020-22 Strategic Plan Strategic plan at a glance Cumulated total capex vs previous plan (US$ bn) EBITDA (US$ bn) +15% +13% 3.0 2.5 2.5 1.9 2.0 1.7 2.2 (~0.1) +0.3 +0.2 1.5 1.0 0.5 0.0 2019-21 2020-22 2019E 2022 Impact on Chilean current situation Net Income (US$ bn) Net Debt/ EBITDA (times) 1.2 0 +
Slide 26: Our vision in numbers
2020-2022 Our vision in numbers
Slide 27: Capex allocation focusing on de-risking margins
Our vision in numbers Capex allocation focusing on de-risk margins and accelerating the electrification Total Capex 2020-22 Capex allocation per business line (US$ bn) 1.18 1% 18% 2.5 15% 2.5 79% 76% US$ bn US$ bn 0.72 0.64 6% 5% Asset Management Renewables Thermal Asset Development Networks Enel X
Slide 28: Generation capex driven by decarbonization and renewables
Decarbonization & Renewables Our vision in numbers Generation capex driven by decarbonization and growth on renewables Generation capex 2020-22 Capacity evolution 2019-22 Total Generation Generation Development Net capacity capex capex (GW) +24% 3% 9.2 10.0 9% 3% 0.07 9.0 7.4 2.1 8.0 8% 0.04 0.5 7.0
Slide 29: Decarbonization driving the energy sales balance
Decarbonization & Renewables Our vision in numbers Decarbonization and renewable expansion is also driving the energy sales balance Production Evolution (TWh) Energy balance (TWh) 30. 0 +7% +12% 25. 0 22.9 25.9 21.4 (5.3) 5.5 23.2 23.2 (0.8) 0.6 22.9 22.9 +3.0 0.3 1.2 20. 0 2.1 5.2 1.8 1.8 15. 0 2.3
Slide 30: Renewable growth increasing energy margins
Decarbonization & Renewables Our vision in numbers Renewable growth is contributing to the increase on energy margins 2019E-22 EBITDA evolution (US$ bn) 2019E-22 Unitary margin evolution (US$/MWh) Var 2022 vs 2019 +10% -6% (0.19) +26% 0.08 0.25 79 63 1.4 1.6 -64% 2019E 2019 Margin Growth 2022 2019E
Slide 31: Focus on resiliency and quality in networks
Enabling Infrastructure Our vision in numbers Focus on resiliency and quality to foster a more efficient networks Networks capex 2020-22 2019E-22 EBITDA evolution (US$ bn) Total Networks capex Total Digitalization capex +9% 34% 23% 14% 0.07 0.44 0.13 0.05 0.04 US$ bn US$ bn 86% 0.3 0.4 43% Asset dev
Slide 32: Enel X: accelerating electrification of consumption
Electrification Ecosystems & Platforms Our vision in numbers Enel X: accelerating the electrification of consumption Total Capex 2020-22 Total EBITDA 2022 (US$ mn) 14% +49% 1% 45 40 34 19% 35 US$ mn 30 25 65% 20 42 28 15 10 5 - 2019E 2022 e-city e-home e-industries e-mobility 30
Slide 33: EBITDA growth reflects strategic priorities
Our vision in numbers EBITDA growth reflects our strategic priorities EBITDA evolution 2019E-22 (US$ bn) per Business lines EBITDA Margin (%) +13% 3% 1% 0.24 (0.10) 0.05 0.01 0.01 42% 1.9 37% 1.7 EBITDA Renewables Thermal Networks Enel X Other EBITDA 2019E Decarbonization Electrification 2022 2019E
Slide 34: Financial Management
2020-2022 Financial Management
Slide 35: Debt evolution reflecting capital allocation
Financial management Debt evolution reflecting capital allocation dynamics Net debt evolution (US$ bn) Source of funds allocation 2020-22 (US$ bn) +0.5 5.0 4.5 0.5 4.0 (2.5) 3.9 4.0 3.7 3.3 4.0 3.5 3.4 0.2 IFRS16 0.1 3.0 3.0 2.5 (1.5) 2.0 2.0 1.5 3.5 1.0 1.0 0.5 0.0 0.0 Jan 1st 2019 2019E 2022 Sourc
Slide 36: Credit metrics support our growth path
Financial management Credit metrics supports our growth path Credit metrics Long term credit rating International market Cost of 5.1% 4.8% 4.0% debt 4.5 0 50% Standard & Poor’s Moody’s 4.0 0 40% 45% 40% 33% 3.5 0 35% 3.0 0 36% Since April 2016 Since May 2018 34% 30% 2.5 0 30% 25% Affirmed Oct/19 Aff
Slide 37: Active liability management and hedged debt
Financial management Active liability management and hedged debt supports our long-term strategy Gross debt by currency evolution Debt maturity by year (US$ bn) 3.0 4% 3% 2.5 2.7 2.0 1.5 2019E 2022 1.0 96% 97% 0.5 0.5 0.1 0.2 0.2 0.0 2019E 2020 2021 2022 After 2022 US Dollar UF + CLP 2016-2018 2019-
Slide 38: De risking our business
De risking our business
Slide 39: 2020-22 EBITDA reflects improvements on risk profile
De risking our business 2020-22 EBITDA reflects improvements on risk profile Cumulated EBITDA evolution (US$ bn) 0.29 0.00 0.02 0.13 0.07 0.05 0.04 5.4 5.4 0.0 EBITDA 2019-21 Index Gas trading Hydrology Thermal Growth Networks Enel X EBITDA 2020-22 Macroscenario Decarbonization Electrification & Ren
Slide 40: Earnings & Targets
2020-2022 Earnings & Targets
Slide 41: Results driven by renewables and decarbonization
Earnings &targets Results have been driven by renewables and decarbonization positive contribution Group net income (US$ bn) 2019E-22 Group net income evolution (US$ bn) +5% +5% 1.2 1.2 0.21 (0.11) (0.01) (0.06) 1.0 0.01 0.9 0.8 1.0 0.8 0.9 0.8 0.8 0.3 0.3 0.6 0.6 0.5 0.9 0.4 0.4 0.5 0.2 0.2 0.0 0.0
Slide 42: Visible value creation for shareholders
Earnings &targets Visible value creation for our shareholders CAGR (%) Plan main drivers 2019E 2020 2021 2022 2019-22 EBITDA (US$ bn) 1.66 1.63 1.84 1.91 +4.8% Net income (US$ bn)1 0.82 0.70 0.84 0.86 +1.6% Pay-out ratio 60% 60% 60% 60% - 1. 2019E adjusted by decarbonization impairment 40
Slide 43: Closing Remarks
2020-2022 Closing Remarks
Slide 44: Closing remarks
Closing remarks Unique portfolio of assets in Chile, with the capacity to absorb/differ short-term market conditions Strategy aimed at focus on the long-term view, with a spot on market Decarbonization dynamics and disciple on capex allocation Eletrification & Renewables Continue to seize opportunit
Slide 45: Disclaimer
Strategic Plan 2020-2022 Disclaimer 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 announcement and include statements regarding t
Slide 46: Contact us
Strategic Plan 2020-2022 Contact us Contacts Email ir.enelchile@enel.com Phone +56 2 2630 9606 Isabela Klemes Taveira Channels Head of Investor Relations Enel Chile Website Mobile App Investor Relations team Enel.cl Enel Investors Catalina González Schwartzmann Claudio Ortiz Tobar Pablo Contreras He
Slide 47: Annexes
2020-2022 Annexes
Slide 48: Largest utility player in Chile in installed capacity and clients
Enel Chile Largest Utility player in Chile in installed capacity and number of clients THERMAL GENERATION RENEWABLES GENERATION POWER DISTRIBUTION Finis Terrae Pampa Norte D. Almagro Cerro Pabellón Valle de los Vientos Taltal Sierra Gorda Este Lalackama I Lalackama II Taltal Huasco Los Molles Chañar
Slide 49: Focus on People Centricity and main recognitions
2020-2022 Focus on People Centricity and main recognitions
Slide 50: Focus on People Centricity: Engaging people
Engaging People we work with Focus on People Centricity Plan actions 2019E 2020-2022 targets • 100% of people involved • 100% of people involved • Performance appraisal1 • 99% of people appraised • 99% of people appraised • 100% of people involved • 100% of people involved • Climate survey1 • 96% of
Slide 51: Engaging local communities
Engaging local Communities Focus on People Centricity Plan actions 2019E 2020-2022 targets¹ • High-quality, inclusive and • 139,000 beneficiaries in • 51,000 beneficiaries fair education 20221 • Access to affordable and • 200,000 beneficiaries in • 198,100 beneficiaries clean energy 20221 • Employme
Slide 52: Ratings, acknowledgments and certifications
Focus on People Centricity Ratings, acknowledgments and certifications 8° Electric Utilities Worldwide Confirmed in Chile Index the MILA Index FTSE4GOOD Emerging Markets Index Best Emerging MSCI ESG Indexes Emerging Markets performers Markets Index ranking (top 100) Enel Chile winner in 2nd Place Be
Slide 53: Main assumptions
2020-2022 Main assumptions
Slide 54: Main Assumptions: Hydro conditions
Main Assumptions Main assumptions Hydro conditions 52
Slide 55: Main Assumptions
Main Assumptions Main assumptions GDP (%) CPI (%) FX against US$¹ Demand Growth (%) 2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022 3.0 2.9 2.9 3.0 3.0 3.0 636 622 611 2.8 2.4 2.7 Commodities’s prices 2019E 2020 2021 2022 Gas Henry Hub 2.9 3.1 3.1 3.1 ($/mmbtu) Oil Brent ($/bbl) 68.0 65.
Slide 56: Capex by Business Line
2020-2022 Capex by Business Line
Slide 57: Capex by business line
Generation Capex by Business line Gross Capex (US$ bn) Business line 2019 2020 2021 2022 Renewables 0.38 0.94 0.52 0.47 Thermal 0.07 0.05 0.03 0.03 Networks 0.16 0.17 0.15 0.13 Enel X 0.01 0.01 0.01 0.01 Others 0.00 0.00 0.00 0.00 Total 0.62 1.18 0.72 0.64 55
Slide 58: Generation
2020-2022 Generation
Slide 59: Installed capacity and production
Generation Installed capacity and Production Final Installed Capacity (GW) Production (TWh) Technology 2019 2020 2021 2022 Technology 2019 2020 2021 2022 CCGT 1.5 1.5 1.5 1.5 CCGT 3.0 0.8 0.1 0.0 Coal 0.6 0.4 0.4 0.4 Coal 3.6 1.7 0.6 0.6 Oil & Gas 0.6 0.6 0.6 0.6 Oil & Gas 0.2 0.0 0.0 0.0 Hydro 3.5
Slide 60: Corporate Governance
2020-2022 Corporate Governance
Slide 61: Corporate governance structure
Corporate Governance Corporate governance structure Board of Directors H. Chadwick Chairman of the Board G. Fazio Director S. Bernabei Director F. Gazmuri Director D. Caprini Director G. Jofré Director P. Cabrera Director Independent Non independent 1. Data as of 20 November 2019 59
Slide 62: Management of the company
Focus on Corporate Governance Management of the company Management Team P. Pallotti Chief Executive Officer D. Valdés Counsel G. Turchiarelli Chief Financial Officer C. Vera Communication L. Schnaidt People and Organization A. Pellegrini Sustainability &Community Relations M. De Martino Regulation C
Slide 63: Shareholder Structure
2020-2022 Shareholder Structure
Slide 64: Shareholders Structure
Shareholders Structure Organization structure Enel Chile shareholders 4.0% 61.9% 19.1% Chile Market Cap1 5.7 $ bn 13.0% 61.9% 93.5% 2.0% 100.0% 99.1% 100.0% Enel SpA ADR's Institutional Investors AFP Retail Green Power Generación Chile Distribución Chile Enel X 1. Market cap as of October 31, 2019 6