Slide 1: Company Presentation 3Q 2013
COMPANY PRESENTATION 3Q 2013
Slide 2: Agenda
Agenda Chilean Electricity Sector Overview Company Overview Competitive Advantages Conclusion 2
Slide 3: Chilean Electricity Sector
Chilean Electricity Sector Overview Chilean Electricity Sector Sector Segmentation Centralized Dispatch Scheme 3 SUB-SECTORS 4 SEPARATE GRIDS SING Arica Demand Curve Variable Cost of the Plants (USD/MWh) GENERATION 4,146 MW - 24% 16,751 GWh - 25% Antofagasta Thermo-Diesel Tal-Tal SIC 13,332 MW - 76%
Slide 4: Evolution of Power Generation and Demand in the SIC
Chilean Electricity Sector Overview Evolution of Power Generation and Demand in the SIC Annual Power Generation – SIC (TWh) Annual Electricity Demand – SIC (TWh) 50 Others 50 Diesel-Fuel Unregulated Demand Regulated Demand 45 LNG 45 Coal /Petcoke Diesel 7% Gas 40 40 Hydro LNG 21% Unregulated: ~30% 3
Slide 5: Volatile Growing Prices Due to Lack of Efficient Supply
Chilean Electricity Sector Overview Volatile Growing Prices Due to Lack of Efficient Supply Electricity Prices-SIC (USD/MWh) 350 1) Energy Node Price Alto Jahuel (USD/MWh) 300 2) Average Auction price (USD/MWh) 3) Average Market price (USD/MWh)* 250 4) Energy Spot Market Price Alto Jahuel (USD/MWh)
Slide 6: Strong and Stable Regulation in a A+ Rating Country
Chilean Electricity Sector Overview Strong and Stable Regulation in a A+ Rating Country Regulatory Aspects Country Risk Chile A+ GENERAL ELECTRIC POWER SERVICES LAW AA- Set: 1982 Perú BBB BBB+ 3 Main Amendments: “Short Law 1” - 2004 BBB Brazil “Short Law 2” - 2005 BBB NCRE - 2008 Colombia BBB- BBB C
Slide 7: Chile Has Growing Energy Requirements
Chilean Electricity Sector Overview Chile Has Growing Energy Requirements Electricity Demand Outlook - SIC (TWh) Electricity per capita Consumption TWh MWh/ person 70 14 60 12 50 10 8.3 40 8 30 6 20 4 3.3 10 2 0 0 2013 2014 2015 2016 2017 2018 Source: “Informe Técnico Definitivo Fijación Precio Nudo
Slide 8: Agenda
Agenda Chilean Electricity Sector Overview Company Overview Competitive Advantages Conclusion 8
Slide 9: Colbún at a glance
Company Overview Colbún at a glance Generation (GWh) and Installed Capacity (MW) Leading Chilean generation company of reliable, competitive and sustainable energy. Generation Develop projects and manage power infrastructure to generate long Hydro Capacity term value. 43 45% 57 % % Thermal Com
Slide 10: Solid committed controlling group with a strategic and long term vision
Company Overview Solid committed controlling group with a strategic and long term vision Ownership Structure CONTROL Matte Group (49%) since 2005, a leading economic Angelini Group group in Chile, with stakes in various sectors (forestry, 10% Pension financial, telecommunications, among others). Mat
Slide 11: Agenda
Agenda Chilean Electricity Sector Overview Company Overview Competitive Advantages • Attractive Market • Diversity of Asset Base • High Quality Customers, Risk Sharing PPAs • Strong Financial Discipline • Committed to Sustainability • Valuable Portafolio of New Projects Conclusion 11
Slide 12: Diversity of Asset Base for Flexibility, Lower Generation Risk
Competitive Advantages Diversity of Asset Base for Flexibility, Lower Generation Risk Estimated Type Capacity Hydro Under Construction Generation (1) (as of Sep-13) (MW) Thermal (TWh/year) Hydro N Hydro (operational) 1,273 6.5 Hydro (under construction) 316 1.5 70 mi 874 213 Coal 342 2.5 Santiago CC
Slide 13: Increasingly Efficient Generation Matrix
Competitive Advantages Increasingly Efficient Generation Matrix • Increasingly diversified generating matrix lowers volatility. • Santa María I has become a key component of our thermal production. • Since the entry into operations of the Quintero terminal Colbún has been able to secure LNG supply.
Slide 14: Diversified And Creditworthy Customer Portfolio
Competitive Advantages Diversified And Creditworthy Customer Portfolio • Long term contracts with a diversified and creditworthy customer base • Long-term average PPA price ~100 US$/MWh Sales by Type of Customer(1) Sales Volume by Customer (%) (1) Chilectra Un-regulated (BBB+/BBB+)* (mining and Angl
Slide 15: The key driver in our results is our commercial policy
Competitive Advantages The key driver in our results is our commercial policy COMMERCIAL GOALS Supply secure and competitive energy to our customers Maximize returns from our current and future assets Manage volatility given relevant hydro component 2. Incorporate indexation 1. Define optimal formul
Slide 16: Commercial Balance Improving
Competitive Advantages Commercial Balance Improving Contractual Sales vs. Generation (GWh) 14.000 12.000 912 2.240 10.000 1.901 3.202 8.000 2.563 2.242 GWh 2.418 6.000 1.273 1.853 2.745 95 11.433 10.687 9.834 8.829 4.000 5.566 5.462 5.233 2.000 4.577 0 2010 2011 2012 LTM Sep 2013 Hydro Coal Gas Dies
Slide 17: Income statement and FCF
Competitive Advantages Income statement and FCF EBITDA (MMUSD) Selected Sources & Uses of Funds (MMUSD) 500 462 600 WK Capex EBITDA 400 500 331 287 400 300 205 300 200 200 100 100 0 0 2010 2011 2012 Sep 2013 LTM 2010 2011 2012 Sep 2013 LTM EBITDA margin (%) Key Metrics 50% Sep 2010 2011 2012 2013 40
Slide 18: Strong financials
Competitive Advantages Strong financials Amortization Schedule of LT Debt (MMUSD) Debt by Currency Interest Rate Exposure UF Varia 22% ble 11% Fixed USD 89% 78% Liquidity Position Balance Sheet as of September 2013 (MMUSD) Cash Current Assets 692 Current Liabilities 548 USD 208 million Cash and equi
Slide 19: Colbún: a sustainable partner
Competitive Advantages Colbún: a sustainable partner EMPLOYEES INVESTORS ENVIRONMENT CLIENTS AND COMMUNITY AND SUPPLIERS SOCIETY CONTRACTORS AND PROVIDERS 19
Slide 20: Our expansion plan
Competitive Advantages Our expansion plan FINAL STAGES LONG-TERM LNG SUPPLY (expected to begin generating by the end of 2013) Optimization of existing CCGT (766 MW) and open-cycles (270 MW) subject to securing a long-term competitive and flexible natural gas supply. OTHER GROWTH OPPORTUNITIES Hydro
Slide 21: Our projects under development
Business Strategy Our projects under development LA MINA HYDRO POWER PLANT: 34 MW Maule River, Maule Region LA MINA SANTA MARÍA II COAL POWER PLANT: 342 MW Coronel, Biobío Region ANGOSTURA SANTA MARÍA II SAN PEDRO SAN PEDRO HYDRO POWER PLANT: 150 MW Riñihue Lake, Los Ríos Region ANGOSTURA HYDRO POWE
Slide 22: Agenda
Agenda Chilean Electricity Sector Overview Company Overview Competitive Advantages Conclusion 22
Slide 23: Colbún
Colbún DIVERSITY OF ASSET BASE COMMITED TO ATTRACTIVE MARKET SUSTAINABILITY HIGH QUALITY STRONG FINANCIAL CUSTOMERS, RISK DISCIPLINE SHARING PPAs STRONG PIPELINE OF NEW PROJECTS 23
Slide 24: «Colbun
«Colbun