Slide 1: 2015 Results
2015 RESULTS
Slide 2: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 2
Slide 3: Financial performance in 2015
Financial performance in 2015 HIGHLIGHTS EBITDA reached US$313 million, a 2% increase compared to 2014, due to generally good operating performance and positive foreign exchange-related effects on operating costs. The EBITDA margin increased to 27.4% in 2015. Net income amounted to US$94 million
Slide 4: Highlights of the last quarter
Highlights of the last quarter HIGHLIGHTS E.CL signed an agreement with Red Eléctrica Chile SpA, an indirect subsidiary of Red Eléctrica Corporación S.A. (Spain) to sell off 50% of its shares in the TEN transmission project for US$217.6 million. Closing is scheduled for January 27, 2016, and is ex
Slide 5: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 5
Slide 6: Chilean electricity industry – 12M15
Chilean electricity industry – 12M15 INDUSTRY Growth Generation GWh Main players Market Clients (2015-2024)¹ (12M15) (% installed capacity 12M15) Renew. Diesel 7% Regulated 4% E.CL 25% capacity 4.8% 11% Gas 14% Endesa 23% 49% SING 26% demand 18,805 GWh AES 4,259 MW Unregulated Gener Coal 75% 89% 20%
Slide 7: Characteristics of the SING
Characteristics of the SING INDUSTRY Most 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 89% of demand Flexibility to negotiate prices and supply terms Maximum demand:
Slide 8: Chile, a world-class copper producer
INDUSTRY Chile, a world-class copper producer SING Copper Production(1) & SING Electricity Demand vs. Copper Price Evolution US¢ / lb GWh 500 1,800 450 1,600 400 1,400 350 1,200 300 1,000 250 3,767 3,826 4,087 3,876 3,981 3,959 3,721 3,747 800 3,964 200 3,799 4,032 4,091 600 (*) 150 3,141 3,203 3,17
Slide 9: Ownership structure (as of December 31, 2015)
COMPANY Ownership structure (as of December 31, 2015) ENGIE (formerly Local Foreign Individuals Pension Funds GDF SUEZ) 52.76% Institutions Institutions 19.23% 22.60% 4.89% 0.51% Inv. Punta de E.CL S.A. Rieles Ltda. 40% Inversiones Central Gasoducto Edelnor Transmisora Hornitos S.A. Termoeléctrica N
Slide 10: Installed capacity: SING & E.CL
COMPANY Installed capacity: SING & E.CL SING - Gross installed capacity – December 2015 (MW) E.CL - Growth in installed capacity 2,500 3,000 2,488 MW 2,108 MW 18 12 2,500 2,108 MW 2,000 288 288 1,799 MW 12 2,000 13 288 688 1,500 688 317 1,500 688 962 MW 688 1,000 1,000 836 MW 24 1,494 500 1,119 500
Slide 11: E.CL's Assets
COMPANY Installed Capacity (Dec. 2015) E.CL’s Assets Technology Coal Renewables Diesel/FO Chapiquiña (10MW) Natural gas 1% Renewables Diesel 14% El Aguila I (2MW) Coal 53% Diesel Arica (14MW) Diesel Iquique (43MW) TE Tocopilla (1,004MW) Collahuasi Tocopilla puerto El Abra Gas/diesel Chuquicamata 33%
Slide 12: Contractable efficient capacity
COMPANY Contractable efficient capacity December 2015 December 2018 2,445 MW 2500 2500 18 2,108 MW 12 288 2000 288 2000 688 1,587 MW 1500 1,342 MW 6 688 1500 5 521 1000 521 1000 1,451 500 1,119 500 1,060 816 0 0 Gross Installed Contractable efficient Gross Installed Contractable efficient capacity c
Slide 13: SIC distribution companies auction
COMPANY SIC distribution companies auction In December 2014, E.CL secured 15-year sale contracts to supply electricity to distribution companies in the SIC: Up to 2,016 GWh in 2018, equivalent to 230 MW-average Up to 5,040 GWh per year between 2019-2032, equivalent to 575 MW-average Monomic
Slide 14: PPA portfolio indexation
COMPANY PPA portfolio indexation Overall indexation applicable to electricity and capacity sales (as of December 2015) Other Marginal 0.6% Cost 2.2% Coal U.S. CPI 32.9% U.S. PPI Node Price 45.8% Gas 18.4% Indexation of electricity and capacity (“monomic”) prices as a percentage of effective demand …
Slide 15: Long-term contracts with creditworthy customers
Long-term contracts with creditworthy customers COMPANY Average demand¹ [MW] and remaining life [years] of current contracts Highlights Clients’ international credit ratings: 600 ● Unregulated Contracts Codelco: AA- ● Regulated contracts Freeport-MM (El Abra ): SIC DISCOS BBB- 500 CODELCO An
Slide 16: 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
Slide 17: E.CL's energy supply curve – 12M15
COMPANY E.CL’s energy supply curve – 12M15 US$/MWh 160 140 Average realized monomic price: US$ 101/MWh 120 100 Average fuel & electricity purchase cost per 80 MWh sold: US$54/MWh FO-DI 60 40 U15 U14 U13 U12 Spot purchases CTH CTM2 CTA CTM1 U16 CTM3 20 Firm capacity payments System overcosts 0 Renewa
Slide 18: Generation overcosts in the SING
Generation overcosts in the SING INDUSTRY The so-called “overcosts” (“sobrecostos”) are regulated by OVERCOSTS IN THE SING IN US$ MILLION Resolution 39/2000 (RM39) and by Supreme Decree 2014 2015 2015 vs 2014 130/2012 (DS130) to cope with the costs stemming from the TOTAL E.CL TOTAL E.CL TOTAL E.C
Slide 19: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 19
Slide 20: Infraestructura Energética Mejillones (IEM) (1 of 2)
PROJECTS Infraestructura Energética Mejillones (IEM) (1 of 2) Characteristics Gross capacity (IEM1) 375 MW Net capacity 320 MW Availability (plant factor) 90% Location Mejillones Mechanized port Associated infrastructure (Capesize carriers) Connection to SIC-SING Transmission line IEM1 transmission
Slide 21: Infraestructura Energética Mejillones (IEM) (2 of 2)
PROJECTS Infraestructura Energética Mejillones (IEM) (2 of 2) Status as of December 31, 2015 EPC – IEM1 Under execution by S.K. Engineering & Construction (Korea) EPC – New port Under execution by Belfi (Chile) Site leveling completed; purchase orders for main equipment placed; excavation for Projec
Slide 22: The TEN Project (1 of 4)
PROJECTS The TEN Project (1 of 4) Characteristics & status Type Double circuit, 500 kV, alternate current (HVAC) Capacity 1,500 MW Length 600 km connecting Mejillones (SING) to Copiapó (SIC) T.E.N. (Transmisora Eléctrica del Norte), 100% owned by ECL Sponsor up to Dec.15 and 50/50 joint venture betw
Slide 23: The TEN Project (2 of 4)
PROJECTS The TEN Project (2 of 4) TEN additional transmission line project S/S Nueva Crucero Encuentro TEN trunk transmission line project ISA transmission project S/S Kapatur Existing lines ANG 1 To S/S Laberinto New projects in tender process by the CNE ANG 2 To S/S O’Higgins Kel ar 140 km 3 km S/
Slide 24: The TEN Project (3 of 4)
PROJECTS The TEN Project (3 of 4) Status as of December 31, 2015 • Red Eléctrica acquired 50% of TEN’s share capital for US$217.6 million plus 50% of TEN’s debt with E.CL. • TEN’s trunk revenues were defined as described in next slide. Recent • The EIA for the Interchile (ISA) N.Cardones-N.Polpaico
Slide 25: The TEN Project (4 of 4)
PROJECTS The TEN Project (4 of 4) Revenue scheme VI Indexation AVI COMA VATT AVI COMA VATT In MUSD @ Oct- In CLP to In USD (In MUSD @ Oct-13 FX Rates) (In MUSD @ Dec-15 FX Rates) 13 FX Rates Chile CPI to US CPI 738.3 41% 59% 74.0 9.7 83.7 67.7 7.5 75.2 αj 41% βj 59% IPC0 100.90 IPCk 110.87 CPI0 233.
Slide 26: Renewable Energy Projects Portfolio
PROJECTS Renewable Energy Projects Portfolio Pampa Camarones I (6MW 1st stage) is under construction: • Expected PV Plant investment: US$16 million • COD of 1st stage: connection to SING in 1Q16 • Approved environmental permits for up to 300MW El Águila II (34MW) is under study: • Expected total
Slide 27: Innovation and sustainability
PROJECTS Innovation and sustainability Cobia Solar Microalgae Wind Biomass Steam-solar E.CL is committed to continuous social and environmental improvement 27
Slide 28: CAPEX program for the ongoing business and new projects
PROJECTS CAPEX program for the ongoing business and new projects CAPEX (US$ million) 2015 2016e 2017e 2018e TOTAL E.CL – Current business 88 92 78 73 331 IEM (including port) 109 352 443 163 1,067 TEN (100%) 160 382 234 776 TEN (10%) 16 38 24 78 TOTAL w/TEN @ 100% 357 826 755 236 2,174 TOTAL w/TEN @
Slide 29: CAPEX financing program
PROJECTS CAPEX financing program E.CL is committed to maintaining a strong investment grade rating E.CL has a flexible dividends policy: pay-out is being reduced to cope with the required investments IEM and new port: financed within E.CL’s balance sheet, with a mix of funding sources, in the
Slide 30: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 30
Slide 31: Electricity sales and generation
FINANCIAL RESULTS Electricity sales (GWh) Gross electricity generation (GWh) Total 9,123 Total 9,381 Total 9,008 Total 9,060 10,000 10,000 211 397 52 51 211 69 8,000 1,816 1,884 8,000 1,638 1,571 6,000 6,000 4,000 7,096 7,100 4,000 7,369 7,106 2,000 2,000 0 0 12M14 12M15 12M14 12M15 Unregulated Regu
Slide 32: Income Statement (US$ millions)
FINANCIAL RESULTS Income Statement (US$ millions) 12M14 12M15 Var. % Operating revenues 1,241.2 1,142.7 -8% Operating income (EBIT) 172.3 174.8 1% EBITDA 306.4 312.9 2% Net income 88.9 94.2 6% Average realized monomic sale price (US$/MWh) 118.0 100.9 -15% Total operating revenues decreased 8% main
Slide 33: EBITDA comparison 12M15 vs 12M14
FINANCIAL RESULTS EBITDA comparison 12M15 vs 12M14 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 360 +11 -8 340 -3 +6 -11 +18 320 -6 300 280 260
Slide 34: Net Income comparison 12M15 vs 12M14
FINANCIAL RESULTS Net Income comparison 12M15 vs 12M14 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 130 Minority Minority +13 -3 -3 Interest 110
Slide 35: Strong liquidity and low leverage to support CAPEX program
FINANCIAL RESULTS Available Cash(1) (US$ million) Gross Debt / LTM(2) EBITDA 300 4.0 250 3.0 200 150 2.0 269 100 147 1.0 2.4 2.4 50 0 0.0 31/12/14 31/12/15 31/12/14 31/12/15 Available cash Gross Debt / LTM EBITDA Net Debt / LTM(2) EBITDA LTM1 EBITDA / LTM(2) Gross interest Expense 2.5 10.0 2.0 8.0 1
Slide 36: E.CL's debt breakdown (as of December 31, 2015)
FINANCIAL RESULTS E.CL’s debt breakdown (as of December 31, 2015) Simple debt structure, solely at E.CL corporate level: 1. 5.625%, 144-A/Reg-S bond for US$400 million maturing January 2021: Bullet, unsecured, no financial covenants. YTM as of December 31, 2015 = 3.91% 2. 4.500%, 144-A/Reg-S bond
Slide 37: Net Debt evolution 12M-2015
FINANCIAL RESULTS Net Debt evolution 12M-2015 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 1,100 1,000 +39 +19 -348 +45 +21 900 +370 800 700 60
Slide 38: Flexible dividend policy
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: Payout ratio in recent years: 2011
Slide 39: Evolution of E.CL share price in 2015
FINANCIAL RESULTS Evolution of E.CL share price in 2015 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Index Jan. 1, 2015 = 100 125 ECL Dec.30, 2015: 120 Jan.1, 201
Slide 40: Strong investment-grade ratings
FINANCIAL RESULTS International ratings Solvency Perspective Date last review Standard & Poors BBB Stable November 2015 Fitch Ratings BBB Stable August 2015 National ratings Solvency Perspective Shares Date last review Feller Rate A+ Stable 1st Class Level 2 January 2016 Fitch Ratings A+ Stable Augu
Slide 41: 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