Engie Energia Chile S.a. · BCS:ECL
Engie Energia Chile — FY2020 Earnings Presentation
56 slides from Engie Energia Chile's earnings presentation, Jan 27, 2021
Slide 1: ENGIE Energía Chile S.A. Investor Presentation Full year 2020
ENGIE Energía Chile S.A. Investor Presentation Full year 2020 ENGIE Energía Chile – Investor Presentation FY 2020 January 27, 2021
Slide 2: Snapshots
Snapshots ENGIE Energía Chile – Investor Presentation – FY 2020 January 27, 2021
Slide 3: A global reference in low carbon energy services
Snapshots A global reference in low carbon energy services FOCUSED ON FOUR GLOBAL BUSINESS LINES, 20 COUNTRIES, 30 URBAN AREAS AND 500 GLOBAL CLIENTS CLIENT SOLUTIONS NETWORKS RENEWABLES THERMAL Unique integrated solutions to Upstream presence in the gas and Generation and marketing of Reduction of
Slide 4: 60% owned by ENGIE, 4th largest generation company
Snapshots As of December 31, 2020, or for the full year 2020 Gross capacity Generation Demand Market share Solar Wind 13% Hydro 7% Engie 8% Hydro 26% 27% Solar Regulated 10% Enel AES Gener Wind 39% 28% SISTEMA 10% 13% ELÉCTRICO 26.1 77.6 71.8 26.1 NACIONAL GW TWh TWh GW (SEN) Colbún 13% Other Therma
Slide 5: A diversified asset base in Chile's mining region
Snapshots A diversified asset base in Chile’s mining region Our operations Our sites Our largest clients Generation TOCOPILLA Coal (269MW) Mining Gas (399MW) 4th largest GenCo in Chile Port 2.2 GW gross capacity 0.6 GW renewables in construction MEJILLONES Coal (711MW) 11.4 TWh sold under PPAs in 20
Slide 6: Key Messages
Key Messages ENGIE Energía Chile – Investor Presentation – FY 2020 January 27, 2021
Slide 7: Key messages
Key messages Key messages Resilience in COVID-19 context Results in low end of pre-COVID guidance Building our future together with our clients AMSA PPA renegotiation + new green corporate PPAs Advancing in our energy transformation plan 4 renewable projects in construction, EMR acquisition, develop
Slide 8: 2020: Working on our reconversion
Key messages 2020: Working on our reconversion To reduce CO2 emissions and our average supply cost OUR PERFORMANCE Renegotiated and New green corporate PPAs • Contracted portfolio of more than 12 TWh/y • Balanced regulated vs. unregulated portfolio 2018 2019 2020 Interconnected market (SIC + SING =
Slide 9: Regulated demand impacted by COVID-19
Key messages Regulated demand impacted by COVID-19 EBITDA decrease explained by one-off revenue in 2019 2019 2020 Variation Operating Revenues (US$ million) 1,454.5 1,351.7 -7% EBITDA (US$ million) 534.9 455.3 -15% EBITDA margin (%) 36.8% 33.7% -3.1 pp Net income (US$ million) 110.8 163.5 +47% Net i
Slide 10: Demand met with generation and energy purchases
Key messages Demand met w/generation and energy purchases Coal plant decommissioning schedule US$/MWh Unit (MW) Date % 2020 supply 140 U14-U15 268 Dec-21 1.0% CTM1-CTM2 334 Dec-24 2.2% 120 Average monomic price US$102/MWh 100 Diesel 80 Average fuel & electricity purchase cost 60 US$53/MWh U14 U15 40
Slide 11: PPA life extension and decarbonization
Key messages PPA life extension and decarbonization Sound contract portfolio with average remaining life of 11 years 500 ● Regulated contracts 450 ● Unregulated contracts Renegotiated contracts 400 Distribution Average demand (MW) Companies Clients’ credit ratings (S&P/Moody’s/Fitch): (South SEN) 35
Slide 12: PPA life extension and decarbonization
Key messages PPA life extension and decarbonization Greening our customers: 75% of mining PPAs already transformed Minera Centinela Price discount, Price discount, CPI-indexed + new PPA w/extended life 186MW coal-indexed Antucoya 50MW Price discount, Price discount, & others PPA life extension coal-
Slide 13: Contracted demand: our vision through 2030
Key messages Contracted demand: our vision through 2030 Renegotiated PPAs (extended lives and decarbonized tariffs) and new green corporate PPAs GWh 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Regulated SING Regulated SIC Free
Slide 14: Room to finance projects on balance sheet
Key messages Room to finance projects on balance sheet Completion of 2015-2019 investment program has released capacity to finance transformation MUSD 4.0 500 TEN 30 3.5 3.0 400 TEN 35 Net debt capacity: ~US$1.2bn @ 2.5x 2.5 Net Debt/EBITDA 300 IEM & Port 2.0 436 Renewables IEM & Port 330 200 314 1.
Slide 15: Our guidance
Key messages Our guidance 2020 actual results in low-end of guidance range despite the pandemic Demand & prices + New PPAs 244 170 - 190 - COVID-19 pandemic 181 75 LDs (*) - Client migration & lower demand 460 - 480 Marginal cost risks 156 455 460 - Coal & gas price increases - Dry hydrologic condit
Slide 16: COVID-19 impacts on demand
Key messages COVID-19 impacts on demand Actual demand and sensitivities GWh Unregulated customers demand GWh Regulated customers demand 600 600 400 400 200 200 - - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2020 2019 2020 Potential impact of
Slide 17: Asset rotation
Key messages Asset rotation IN 1 GW COMMITTED PIPELINE + 1 GW FURTHER GROWTH POTENTIAL OU LOS LOROS MONTE REDONDO CAPRICORNIO CALAMA TAMAYA COYA ADVANCED STAGE EARLY STAGE 55 MWp 82 MW 95 MWp 151 MW 114 MWp 198 MWp 359 MW 1,000 MW COD(*) 2019 2020 2021 2022 2023-2025 ACQUISITIONS + FIRST 3 PROJECTS
Slide 18: Asset rotation: first steps
Key messages Asset rotation: first steps Year-end 2018 + 1.0 GW Renewables Year-end 2022 (*) 8% 1% 0.6 0.4 GW GW 29% Installed WIND SOLAR PV Installed 42% capacity 58% capacity 33% 1,928 MW 2,481 MW 0.8 GW Coal (Dec-18) (Dec-22) 25% 4% 0.8 Coal Gas Diesel Renewables Coal Gas Diesel Renewables GW COA
Slide 19: Current evolution
Current evolution ENGIE Energía Chile – Investor Presentation – FY 2020 January 27, 2021
Slide 20: Covid-19 pandemic
Current evolution Covid-19 pandemic Focus on safety, operational continuity and reconversion strategy Safety first Operational continuity Projects in progress Caring for others • +70% home office • Daily internal communications • Crisis committee • US$700k donation • Strict protocols • CLP179M 1+1 f
Slide 21: Commercial activity: AMSA (Centinela) PPA
Current evolution Commercial activity: AMSA (Centinela) PPA Renegotiation of existing agreement + new green PPA signed on March 31, 2020 Amendment of existing PPA New 11-year 186MW PPA between Inversiones Hornitos between EECL and Minera (CTH) and Centinela for its Centinela beginning 1-Jan-22 Esper
Slide 22: Commercial activity: New green corporate PPAs
Current evolution Commercial activity: New green corporate PPAs In 2020: Ongoing commercial and development activity 420 GWh/y 15 years 114 GWh/y 5 years 2,347-hectare land in Tal-Tal Others awarded by Ministry of National Assets to develop up 323 GWh/y to 320 MW of renewable 4-year avg. energy proj
Slide 23: Asset rotation: Eólica Monte Redondo SpA
Current evolution Asset rotation: Eólica Monte Redondo SpA 82MW of renewable capacity acquired on July 1, 2020 • Acquired from ENGIE Latam: US$53 million+cash, on debt-free basis. Approved by independent board members (“Comité de Directores”) • 275 GWh/yr PPAs w/CGE (100 GWh maturing Dec-2021 + 175
Slide 24: Financing activity
Current evolution Financing activity Securing liquidity and funding for our renewable projects Jan-2020 - Liability Management Dec-2020 - IDBI Loan Jan-2021 – Monetization of PEC account receivables (“AR”) • New 10-yr, 3.4%, US$500mln • US$125 million financing: 144A/RegS bond • US$110mln funded by
Slide 25: Regulation: Price stabilization mechanism
Current evolution Regulation: Price stabilization mechanism PEC = Adjusted upwards Dec. 2020 Dec. 2025 PEC = Fixed price to PEC = Adjusted upwards if Jul. 2023 PEC = Fixed price to consumers in if necessary to permit full consumers in nominal necessary to avoid breaching • Law #21,185 (Nov-19): Elec
Slide 26: Regulatory initiatives in 2020
Current evolution Regulatory initiatives in 2020 GENERATION DISTRIBUTION • Energy transition • Electric portability: • Energy dealer • Flexibility strategy • New types of energy auctions • Information manager • Energy policy update – 2050 vision • Basic services (contingency measures) • Emission com
Slide 27: Project Update
Project Update ENGIE Energía Chile – Investor Presentation – FY 2020 January 27, 2021
Slide 28: Project update: growth projects under development
Project update 1 GW plus 1 GW growth projects under development 1 GW (**) PROJECTS IN EARLY DEVELOPMENT STAGE 1 GW (NOT YET APPROVED) 2019 2020 2021 2022 2023-2025 COD/YEAR (MW) 55 82 360 557 1,000 48 Monte Redondo 151 Calama 359 ASD(*) 700 MW MW MW MW WIND 55 Los Loros Andacollo 209 Capricornio Tam
Slide 29: Project update: projects by stage
Project update 1 GW PROJECTS IN EARLY DEVELOPMENT STAGE (NOT YET APPROVED) 137 MW 558 MW 359 MW 1,000 MW (*) UNDER ADVANCED STAGE IMPLEMENTED GROWTH CONSTRUCTION OF DEVELOPMENT 48 MW 151 MW 359 MW 700 MW WIND 55 MWp 407 MWp 300 MWp SOLAR PV 34 MW HYDRO (*) This figure is provided as an indication of
Slide 30: US$159 million CAPEX / COD: 3Q21
Project update US$159 million CAPEX / COD: 3Q21 Global advance: 75% Main milestones: 15 WTGs* assembled. Commissioning started Main contractors: Siemens Gamesa & GES *WTG = Wind turbine generator ENGIE Energía Chile – Investor Presentation – FY 2020 30 January 27, 2021
Slide 31: US$64 million CAPEX / COD: 2Q21
Project update US$ 64 million CAPEX / COD: 2Q21 Global advance: 86% Milestones: Main transformer installed. Civil Works control building finished Main contractors: GES, Trina Pro, Sungrow ENGIE Energía Chile – Investor Presentation – FY 2020 31 January 27, 2021
Slide 32: US$68 million CAPEX / COD: 2Q21
Project update US$ 68 million CAPEX / COD: 2Q21 Global advance: 78% Milestones: PV Works started; 100% supplies on site; power transformer shipped Main contractors: Tozzi, Trina Pro, Sungrow ENGIE Energía Chile – Investor Presentation – FY 2020 32 January 27, 2021
Slide 33: US$117 million CAPEX / COD: 1Q22
Project update US$ 117 million CAPEX / COD: 1Q22 Global advance: 0% Milestones: NTP - Kick-off meeting w/consortium Main contractors: Siemens-Ingecoz, OHL (BOP), Sungrow, Soltec, Longi ENGIE Energía Chile – Investor Presentation – FY 2020 33 January 27, 2021
Slide 34: Transmission projects: US$53 million Total Investment Value
Project update US$ 53 million Total Investment Value Arica y Parinacota Nueva Chuquicamata Antofagasta Capricornio SS expansion Atacama Algarrobal Nueva Chuquicamata (National) Algarrobal (National) • Substation + 2 x 220 kV transmission line • 220 kV sectioning substation • COD: SS: Mar. 2021 / TL:
Slide 35: Transmission projects: US$43 million Total Investment Value
Project update US$ 43 million Total Investment Value Antofagasta By-Pass La Negra Pozo Almonte SS Expansion Arica-Pozo Roncacho Sectioning • Zonal • Zonal • Zonal Pozo • Multi-circuit transmission line • Substation + 2 x 220 kV • 110 kV Substation Almonte SS 2x110 kV, 1x220 kV. transmission line • C
Slide 36: Financial update
Financial update ENGIE Energía Chile – Investor Presentation – FY 2020 January 27, 2021
Slide 37: EBITDA evolution
Financial update EBITDA evolution Decrease primarily explained by liquidated damages received in 2019 By main effect In US$ Million +19 +16 (75) +29 +52 Capacity Fuel (75) Physical purchases 535 sales costs Average Lower realized (39) energy electricity (8) purchases prices Liquidated 455 Damages Tr
Slide 38: Net income evolution
Financial update Net income evolution 2019: Impairments + income from LDs 2020: Make-whole on early bond redemption By main effect Recurring Results In US$ Million 245 +8 minority 134 interest (50) (14) (8) EBITDA 181 (10) Decrease Other (8) 111 (LDs in 2019) Financial 163 Depreciation (-) Make-whol
Slide 39: Net debt evolution
Financial update Net debt evolution Net debt increased due to CAPEX, acquisitions, taxes and premium on 144-A bond prepayment Main cash flows +78 (8) (365) In US$ Million Cash +57 payment +38 Income from TEN +65 Leases Taxes + Green Accrued (IFRS 16) +56 +14 Taxes Interest/ Dividends deferred +181 M
Slide 40: Robust financial structure
Financial update Robust financial structure Fitch: Rating upgraded to BBB+ NET DEBT/EBITDA @ 1.8 X Feller: Positive outlook 2.8 • International: 2.2 • Fitch (Jun 2020): BBB+ Stable 1.7 1.8 • S&P (Jan 2020): BBB Stable 1.3 • National scale: • Fitch (Jun 2020) AA Stable • Feller Rate (Jan 2021): AA- P
Slide 41: US$67 million provisional dividend 30-Nov-20
Financial update US$67 million provisional dividend 30-Nov-20 DIVIDENDS PAID MARKET CAP & DIVIDEND YIELD (*) In US$ Millions In US$ Millions 120 100% 112 100% 7.0% 90% 100 81% 22 80% 2,000 5.4% 5.8% 6.0% 78 70% 5.1% 5.0% 80 7 67 60% 1,500 4.0% 60 56 47% 56 50% 3.4% 47 2.3% 2,265 3.0% 1,000 17 90 40%
Slide 42: Key take aways
Financial update Key take aways Resilience in COVID-19 context Results within low end of pre-COVID guidance Caring for our stakeholders: health and safety above all Building our future together with our clients AMSA PPA renegotiation + new green corporate PPAs signed in 2020 ≈ 2 TWh/y Advanced reneg
Slide 43: Addenda
Addenda ENGIE Energía Chile – Investor Presentation – FY 2020 January 27, 2021
Slide 44: Long-term contracts
Addenda Long-term contracts The basis for stable sales and prices ENERGY SALES AND PRICES Energy sales Prices GWh US$/MWh 3,000 150 2,500 2,000 100 1,500 1,000 50 500 0 0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 Unregulat
Slide 45: Demand supplied with own generation and energy purchases
Addenda Demand supplied with own generation and energy purchases hedged by our installed capacity Renewables Diesel 7% 4% • Energy purchases decreased due to IEM, but remain high due to (i) efficient capacity additions in the grid and (ii) PPA with distribution Installed Coal 61% companies in centra
Slide 46: Regulatory and grid coordination challenges
Addenda Regulatory and grid coordination challenges Generation North SEN – December 1 to 10, 2020 MW 3,500 200 US$/MWh 180 3,000 160 2,500 140 120 2,000 100 1,500 80 1,000 60 40 500 20 0 0 1 5 9 13 17 21 1 5 9 13 17 21 1 5 9 13 17 21 1 5 9 13 17 21 1 5 9 13 17 21 1 5 9 13 17 21 1 5 9 13 17 21 1 5 9
Slide 47: Sistema Eléctrico Nacional - SEN
Addenda Sistema Eléctrico Nacional - SEN SEN – December 2020 26,134 MW 9,131 MW SING SEN “Sistema Eléctrico 7,370 MW Nacional” 1,100 5,175 SIC 3,450 3,609 MW 3,310 MW 275 45 267 2,182 MW 1,370 58 127 1,611 105 44 91 2,033 610 3,009 2,586 (*) 1,304 532 MW 1,332 660 532 350 Enel Generación AES Gener C
Slide 48: IEM and Puerto Andino
Addenda IEM and Puerto Andino Puerto Andino • Mechanized port. 6 million TPY transfer capacity, 3,000 TPH unloading speed => lower demurrage costs • Conventional & tubular conveyor belts => better environmental standards • Diversification opportunities • US$122 million investment at CTA subsidiary I
Slide 49: PPA portfolio indexation
Addenda PPA portfolio indexation Shifting away from coal Indexation applicable to Indexation applicable to electricity and capacity sales electricity and capacity sales (as of Dec 2020) (2021, proforma PPA U.S. CPI renegotiation) U.S. PPI U.S. CPI Node Gas 10% U.S. PPI Price 60% Node Price 73% Coal
Slide 50: EECL, a relevant player in transmission
Addenda EECL, a relevant player in transmission 2,330 kms 23 substations - 977 MVA Substations US$ 16.7 million regulated 5 revenue p.a. Transmission substations 977 Generation substations MVA 18 Transmission lines 8% 2,330 912 Kms. AVI + COMA for National & Zonal systems 92% (in millions of US$) Ow
Slide 51: Transmisora Eléctrica del Norte (TEN)
Addenda Transmisora Eléctrica del Norte (« TEN ») TEN annual revenue • Double circuit, 500 kV, alternate current (HVAC), per old decree: 1,500 MW, 600-km long transmission line (in USD millions • National transmission system interconnecting at Dec 30, 2020 FX rates) SIC and SING grids since Nov. 24,
Slide 52: Copper industry
Addenda Copper industry US¢/lb 500 8,000 GWh Copper price LME (US¢/lb) SEN monthly electricity demand Copper production in Chile ('000 tons) 450 7,000 400 6,000 350 5,000 300 250 4,000 5,776 5,761 5,772 5,832 5,787 5,785 5,413 5,321 5,361 5,557 5,328 5,394 5,419 5,434 5,553 5,504 200 5,263 4,739 4,9
Slide 53: Ownership structure
Addenda Ownership structure Pension funds Local institutions Foreign institutions Individuals 59.99% 17.78% 12.89% 8.90% 0.44% ENGIE ENERGÍA CHILE S.A. (“EECL”) Red Eléctrica Chile S.A. 50% Central Termoeléctrica Central Termoeléctrica Gasoducto Edelnor Transmisora Hornitos SpA (“CTH”) Andina S.A. (
Slide 54: EECL organizational structure
Addenda EECL organizational structure Shareholders’ assembly Committee Functional committees: Board of directors - Management of directors - Commercial origination - Development - Business knowledge CEO - Stakeholders & Regulation - Change management - Construction - Portfolio & risk management Inte
Slide 55: For more information about ENGIE Energía Chile
Addenda For more information about ENGIE Energía Chile Ticker: ECL +562 2783 3307 inversionistas@engie.com http://www.engie-energia.cl MORE INFORMATION ON 4Q 2020 RESULTS IN OUR WEB PAGE 4Q 2020 Presentation Addenda Press Recorded Financial Analyst Release conference report pack audiocast ENGIE Ener
Slide 56: Forward-Looking statements
Forward-Looking statements This presentation may contain certain forward-looking statements and information relating to ENGIE Energía Chile S.A. (“EECL” or the “Company”) that reflect the current views and/or expectations of the Company and its management with respect to its business plan. Forward-