Colbun Sa · BCS:COLBUN
Colbun Sa — BTG Pactual & Celfin Southern Cone / Andean Conference 2013
29 slides from Colbun Sa's conference presentation, Jun 5, 2013
Slide 1: Company Presentation – BTG Pactual & Celfin Southern Cone / Andean Conference
COMPANY PRESENTATION BTG Pactual & Celfin Southern Cone / Andean Conference Santiago, June 5th-6th 2013
Slide 2: Colbún at a glance
Colbún at a glance Arica SING Who are we? ~4,000 MW ~17 TWh We are a Chilean company, leader in the generation of reliable, competitive and sustainable energy. Antofagasta Tal-Tal SIC What is our corporate strategy? ~13,000 MW ~49 TWh We seek to generate long-term value by developing projects and ma
Slide 3: A brief history of the Chilean power sector and Colbún
A brief history of the Chilean power sector and Colbún… → Strong power development based on private investment (+) Back-up capacity (diesel) → Capacity growth = hydro + competitive natural gas (+) LNG re-gasification terminal since 2009 → Power purchase agreements signed under fixed prices (+) Coal-
Slide 4: Currently with 22 operating power plants and one under construction
…currently with 22 operating power plants and one under construction NEHUENCO COMPLEX: 874 MW ACONCAGUA BASIN: 213 MW Depending on GAS/DIESEL natural gas Chacabuquito (29 MW)* Blanco (60 MW) Nehuenco I (368 MW) availability, Los Quilos (39 MW)* Juncal (29 MW) * Nehuenco II (398 MW) up to ~5,000 Nehu
Slide 5: A solid and reliable controlling group with a strategic and long term vision
A solid and reliable controlling group with a strategic and long term vision CONTROL Ownership Structure Matte Group (49%): leading economic group in Chile, with stakes in various sectors (forestry, Angelini financial, telecommunications, among others). Group 10% LARGE STAKEHOLDER Angelini Group (10
Slide 6: The key driver in our results is our commercial policy
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 formulas in sale prices, 3.
Slide 7: So as to minimize exposure to exogenous variables
…so as to minimize exposure to exogenous variables Electricity Prices SIC Energy Node Price Energy Average Market Price* Energy Spot Price Alto Jahuel 350 150 WTI (CL1 Comdty) *Argentinean Gas Shock 3 year severe drought *Commodities Super-Cycle (10’-12’) 300 100 *Drought (07’) 250 50 New coal capac
Slide 8: Our income statement shows our growth and recent transitional period
Our income statement shows our growth and recent transitional period… Income Statement (MMUSD) March 2013 2006 2007 2008 2009 2010 2011 2012 LTM Revenues from operating activities 753 1,160 1,346 1,159 1,024 1,333 1,409 1,415 Costs of materials, consumables and others (307) (1,141) (1,110) (822) (69
Slide 9: We are strengthening our balance sheet
…we are strengthening our balance sheet… Balance Sheet as of March 2013 (MMUSD) Current Assets 639 Current Liabilities 553 Cash and equivalents 238 Financial liabilities, current 340 Accounts receivable 173 Accounts payable 177 Recoverable taxes 119 Other current liabilities 36 Other current assets
Slide 10: And have a strong liquidity position
…and have a strong liquidity position Amortization Schedule of LT Debt as of March 2013 (MMUSD) Rating 600 Bonds Local Rating Last Update 500 Banks Fitch Ratings A+ Dec-12 400 Humphreys AA- Jul-12 300 International 200 Fitch Ratings BBB Dec-12 100 Standard & Poors BBB- Dec-12 0 (Neg.) 2013 2014 2015
Slide 11: Colbún has grown steadily over the past decade
Colbún has grown steadily over the past decade… Capacity (MW) Total Operating Revenues (MMUSD) 3.500 2,962 1.600 USD 1,409 MW million 3.000 1.400 1.200 2.500 1.000 2.000 800 1.500 600 1.000 USD 129 400 1,070 CAGR: 8% million CAGR: 20% 500 MW 200 0 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Slide 12: And plans to continue contributing to Chile's energy needs
…and plans to continue contributing to Chile’s energy needs Electricity per capita consumption MWh/person 30 25 20 15 10 ~8.3 MWh/cápita 5 ~3.3 MWh/cápita 0 12 Source: data.worldbank.org
Slide 13: Demand and Supply: what to expect in the coming years
Demand and Supply: what to expect in the coming years Estimated Future Electricity Demand – SIC Available Power by type – SIC 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 2013 2014 2015 2016 2017 2018 20
Slide 14: Demand and Supply: what to expect in the coming years
Demand and Supply: what to expect in the coming years Available Power by type – SIC MW Hydro (1) Wind Coal Gas (2) Diesel Max demand 12.000 Min demand Average demand 10.000 8.000 6.000 4.000 2.000 0 2013 2014 2015 2016 2017 2018 Source: “Informe Técnico Definitivo Fijación Precio Nudo SIC” ,CNE/Colb
Slide 15: Colbún plans to continue developing projects that contribute to growth requirements
Colbún plans to continue developing projects that contribute to the country’s growth requirements 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 Exi
Slide 16: To develop projects, as important as the financial back-up
To develop projects, as important as the financial back-up… SANTA MARÍA II COAL POWER PLANT: 342 MW LA MINA HYDRO POWER PLANT: 34 MW Coronel, Biobío Region Maule River, Maule Region LA MINA SANTA MARÍA II ANGOSTURA ANGOSTURA HYDRO POWER PLANT: 316 MW Santa Barbara and Quilaco, Biobío Region SAN PEDR
Slide 17: Is the know-how to achieve their social and environmental license
…is the know-how to achieve their social and environmental license EMPLOYEES INVESTORS ENVIRONMENT CLIENTS AND COMMUNITY AND SUPPLIERS SOCIETY CONTRACTORS AND PROVIDERS 17
Slide 18: To sum up what Colbún is focused on today
To sum up what Colbún is focused on today 1. Consolidation Consolidate our people, our operations, our projects, our financial… Narrow our exposure to exogenous variables: diversified asset base 2. Diversification (technology, fuel and location) and clients. and Risk Management Active risk manage
Slide 19: Colbún
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Slide 20: Supporting Material
Supporting Material CColbun
Slide 21: Power Sector Segmentation
Power Sector Segmentation 3 SUB-SECTORS 4 SEPARATE GRIDS SING Arica 4,146 MW - 24% 16,751 GWh - 25% GENERATION Antofagasta SIC Tal-Tal 13,332 MW - 76% 48,796 GWh - 74% TRANSMISSION Santiago Regulated sectors (concessions) DISTRIBUTION Castro Chaitén SEA 52 MW - 0% 166 GWh - 0% RELEVANT INSTITUTIONS
Slide 22: Power Market Structure
Power Market Structure Electricity Market Structure Main Players in the Generation Sector-SIC GENERATORS 39% >15 players REGULATED UNREGULATED SPOT CUSTOMERS CUSTOMERS MARKET 20% 21% 17% DISTRIBUTION “FREE” CDEC COMPANIES CUSTOMERS 2% 1% Regulated Unregulated Marginal Cost Endesa Colbún Gener Arauco
Slide 23: Dispatch and pricing model: a technical guide
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 of electricity Thermo-Diesel produc
Slide 24: Colbun's diversified customer base
Colbun’s 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 ANDINAS (2010-
Slide 25: Colbun's Value Chain
Colbun’s 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 Risk manag
Slide 26: A quarterly look at Colbún's results
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 Revenues 2013 EBITDA mar
Slide 27: A yearly look at Colbún's results
A yearly look at Colbún’s results Colbún’s committed sales through contracts, excluding commitments which price is indexed to the spot price *Argentinean Gas Schock 3-year severe drought MMUSD Hydro production *Commodities Super-Cycle GWh *Drought 12.000 Competitive thermal production New coal 500 P
Slide 28: Free Cash Flow Analysis
Free Cash Flow Analysis Selected Sources & Uses of Funds (MMUSD) 700 K WK Capex EBITDA 600 Negative FCF in past years due to intensive capex program 500 Intensity of capex diminishes in 2013 400 Expected recovery of VAT Credit in coming years (current 300 stock of MMUSD 230) 200 Low dividend
Slide 29: Colbún
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Colbún — BTG Pactual & Celfin Southern Cone / Andean Conference 2013 on 6ix