Slide 1: Company Presentation 1Q 2013
COMPANY PRESENTATION 1Q 2013
Slide 2: Agenda
Agenda Company Overview Business Strategy Financial Profile Chilean Electricity Sector Overview 2
Slide 3: Colbún at a glance
Company Overview Colbún at a glance Business Power Generation & Trade Market Share (as a % of Installed Capacity) - SIC Size 2nd largest generator in Chile’s Central Grid (SIC), with over 20% market share (MW). Others Colbún 24% 20% The SIC covers 90% of the population Capacity 2,962 MW AES Gener En
Slide 4: A diversified asset base
Company Overview A diversified asset base NEHUENCO COMPLEX: 874 MW ACONCAGUA BASIN: 213 MW 15 HYDRO POWER PLANTS 7 THERMAL POWER PLANTS DIESEL/GAS Chacabuquito Blanco Nehuenco I Capacity: 29 MW Capacity: 60 MW Capacity: 368 MW Los Quilos Juncal Nehuenco II Capacity: 39 MW Capacity: 29 MW Capacity: 3
Slide 5: A diversified customer base
Company Overview A diversified customer base UN-REGULATED CUSTOMERS REGULATED CUSTOMERS CHILECTRA CODELCO (2011- 2021/23/25) Salvador CONAFE CODELCO (Until 2020) Ventanas CGE-Río Maipo ANGLOAMERICAN (2010- 2021) Los Bronces Santiago CGE-Distribución CODELCO (2010- 2024) Andina METRO SAESA AGUAS ANDI
Slide 6: Colbún has grown steadily over the past decade
Company Overview Colbún has grown steadily over the past decade Capacity (MW) Total Operating Revenues (MMUSD) 3.500 2,962 1.600 US$ 1,409 MW million 3.000 1.400 1.200 2.500 1.000 2.000 800 1.500 600 1.000 US$ 129 400 1,070 CAGR: 8% million CAGR: 20% 500 MW 200 0 0 1999 2000 2001 2002 2003 2004 2005
Slide 7: Solid and reliable controlling group with a strategic and long term vision
Company Overview Solid and reliable controlling group with a strategic and long term vision CONTROL Ownership Structure Controlled by the Matte Group (49%), one of the leading economic groups in Chile, with Angelini stakes in various sectors (forestry, financial, Group telecommunications, among othe
Slide 8: Agenda
Agenda Company Overview Business Strategy Financial Profile Chilean Electricity Sector Overview 8
Slide 9: Corporate Strategy
Business Strategy Corporate Strategy Who are we? We are a Chilean company, leader in the generation of reliable, competitive and sustainable energy. What do we do? We seek to generate long-term value by developing projects and managing power infrastructure, integrating with excellence the economical
Slide 10: Strategic Pillars
Business Strategy Strategic Pillars Identify and develop project options to consolidate our market share. 3. Growth Commercial strategy that generates long-term returns consistent with our asset base. Narrow our exposure to exogenous variables: diversified asset base 2. Diversification (technolog
Slide 11: Value Chain
Business Strategy Value Chain Project Operational Risk / Return Development Excellence Profile Multidimensional High Risk / return profile challenge: standards: combining: Technical Reliability Commercial policy + + + Environmental / Social Security Financial strength + + + Financial Environmental R
Slide 12: Colbún: a sustainable partner
Business Strategy Colbún: a sustainable partner EMPLOYEES INVESTORS ENVIRONMENT CLIENTS AND COMMUNITY AND SUPPLIERS SOCIETY CONTRACTORS AND PROVIDERS 12
Slide 13: Commercial policy
Business Strategy Commercial policy COMMERCIAL GOALS Supply secure and competitive energy to our customers Maximize returns from our current and future assets Manage volatility given large renewable component 1. CONTRACT LEVEL 2. SALE PRICE INDEXATION 3. HEDGE PROGRAM Define optimal Incorporate inde
Slide 14: Evolution of Colbún's Business Model
Business Strategy Evolution of Colbún’s Business Model Contractual GWh MMUSD Commitments 12.000 500 446 450 “Base” 10.000 Generation 400 337 331 350 8.000 284 300 236 6.000 250 211 205 170 200 156 4.000 128 150 109 100 2.000 (58%) (60%) (60%) (48%) (45%) (59%) (1%) (18%) (29%) (32%) (15%) (20%) EBIT
Slide 15: Our expansion plan
Business Strategy Our expansion plan UNDER UNDER CONSTRUCTION DIFFERENT STAGES OF DEVELOPMENT Hydro potential ~ 4,300 ~500 MW MW San Pedro Santa María II 150 MW La Mina* 342 MW Angostura 2,962 316 MW 34 MW MW OTHER GROWTH OPPORTUNITIES Existing CCGT (766 MW) and existing open-cycles that could be co
Slide 16: Our projects under development
Business Strategy Our projects under development LA MINA HYDRO POWER PLANT: 34 MW Maule River, Maule Region SANTA MARÍA II COAL POWER PLANT: 342 MW LA MINA Coronel, Biobío Region ANGOSTURA SANTA MARÍA II ANGOSTURA HYDRO POWER PLANT: 316 MW Santa Barbara and Quilaco, Biobío Region SAN PEDRO SAN PEDRO
Slide 17: Agenda
Agenda Company Overview Business Strategy Financial Profile Chilean Electricity Sector Overview 17
Slide 18: Income Statement
Financial Profile Income Statement Revenues, EBITDA (MMUSD) & EBITDA Margin 1.600 Revenues EBITDA EBITDA margin (%) Average EBITDA 2006-2012: MMUSD 265 1.400 59% 1.200 Non-operational result from past years affected by payments to early terminate old natural gas 1.000 32% transport contracts 800
Slide 19: Capital Structure and Credit Metrics
Financial Profile Capital Structure and Credit Metrics Key Credit Metrics Cash, Debt & Net Debt (MMUSD) March 2006 2007 2008 2009 2010 2011 2012 2013 2.000 LTM Cash 1.800 1.600 Net debt Total debt 18.8 26.0 25.0 27.0 31.1 30.1 32.9 32,6 to total capital (%) Total debt 1.400 1.200 Net debt 0.4 36.6 2
Slide 20: Free Cash Flow Analysis
Financial Profile Free Cash Flow Analysis Selected Sources & Uses of Funds (MMUSD) K 700 WK 600 Capex EBITDA Negative FCF in past years due to intensive 500 capex program 400 Intensity of capex diminishes in 2013 300 Expected recovery of VAT Credit in coming years (current stock of MMUSD 258)
Slide 21: Conservative Financial Strategy
Financial Profile Conservative Financial Strategy: Smooth debt profile coupled with a strong liquidity position Amortization Schedule of LT Debt (MMUSD) Balance Sheet as of March 2013 (MMUSD) 600 Banks Bonds 500 Current Assets 750 400 Cash and equivalents 238 300 Accounts receivable 173 200 Recovera
Slide 22: A quarterly look at Colbún's results
Financial Profile A quarterly look at Colbún’s results Sales vs. Generation - quarterly (GWh) Revenues - quarterly (MMUSD) 3.200 402 2.800 361 367 332 2.400 315 2.000 1.600 1.200 800 400 0 1Q12 2Q12 3Q12 4Q12 1Q13 1Q 2Q 3Q 4Q Contractual Sales Hydro Coal Natural gas (LNG) Diesel Revenues 2012 Revenu
Slide 23: Agenda
Agenda Company Overview Business Strategy Financial Profile Chilean Electricity Sector Overview 23
Slide 24: Sector Segmentation
Chilean Electricity Sector Overview Sector Segmentation 3 SUB-SECTORS 4 SEPARATE GRIDS SING Arica 3,964 MW - 25% 15.881 GWh - 25% GENERATION Antofagasta SIC Tal-Tal 12,365 MW - 75% 46.052 GWh - 74% TRANSMISSION Santiago Regulated sectors (concessions) DISTRIBUTION Castro Chaitén SEA 52 MW - 0% 146 G
Slide 25: Market Structure
Chilean Electricity Sector Overview Market Structure Electricity Market Structure Main Players in the Generation Sector-SIC GENERATORS 39% >15 REGULATED UNREGULATED SPOT players CUSTOMERS CUSTOMERS MARKET 20% 21% 17% DISTRIBUTION “FREE” CDEC COMPANIES CUSTOMERS 2% 1% Regulated Unregulated Marginal C
Slide 26: 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 Gas Diesel 7% Coal /Petcoke 40 40 Hydro LNG 21% Unregulated: ~30% 3
Slide 27: Dispatch and pricing model: a technical guide
Chilean Electricity Sector Overview Dispatch and pricing model: a technical guide Dispatch Model Dispatch Scheme OBJECTIVE Meet demand at the lowest cost possible Demand Curve Variable Cost of the Plants (USD/MWh) INSTITUTION Independent load dispatch center (CDEC) coordinates the efficient dispatch
Slide 28: Evolution of electricity prices
Chilean Electricity Sector Overview Evolution of electricity prices 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) 200 150 100 50 0 2001 20
Slide 29: Demand and Supply: what to expect in the coming years
Chilean Electricity Sector Overview Demand and Supply: what to expect in the coming years Electricity Demand - SIC (TWh) Available Power by type - SIC (MW) MW Hydro (1) Wind TWh Coal Gas (2) 70 Diesel Max demand 12.000 Min demand Average demand 60 10.000 50 8.000 40 6.000 30 4.000 20 10 2.000 0 0 20
Slide 30: Colbún
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