Enel Chile Sa · BCS:ENELCHILE
Enel Chile Sa — Investor Day (November 2021)
70 slides from Enel Chile Sa's investor day presentation, Nov 29, 2021
Slide 1: Virtual Investor Day Strategic Plan 2022-24
Virtual Investor Day Strategic Plan 2022-24 Enel Chile November 29th, 2021
Slide 2: Agenda
Agenda Paolo Pallotti, CEO Market context 2022-24 Enel Chile today Strategic Plan Main priorities and strategic actions Value proposition Giuseppe Turchiarelli, CFO Plan in numbers 2022-24 Commercial strategy Strategic Plan Financial management Financial targets Paolo Pallotti, CEO Closing remarks 1
Slide 3: Market context
Market context eCnel
Slide 4: Country overview
Country overview Main geographic Main demographic Net ZERO: the topics1 topics4 unavoidable journey 757 +thousands km2 of land area 19 Total population million for Chile 4.3k from +kilometers Length North to 88% Population urban areas in 50% Renewable capacity South 40% Population in Metropolitan ar
Slide 5: Regulatory framework evolution
Regulatory framework evolution Main topics on the agenda Basic Stabilization Networks Clients CO2 Tax Storage Service Energy tariff review Portability emission Technology Law Mechanism 4
Slide 6: Regulatory framework evolution: Main updates and discussion in the short-term
Regulatory framework evolution: Main updates and discussion in the short-term Electricity Price Stabilization Networks tariff review Basic Services Law Mechanism Total residential clients overdue Dec 21 Q1 22 H1 22 2022 in the sector1 Distribution Consultant Regulator Expert Tariffs 1,350 Generation
Slide 7: Enel Chile today
Enel Chile today eCnel
Slide 8: Enel Chile at a glance
Enel Chile at a glance Better positioned to face YE 2021 estimates 27.7 TWh liberalization of Chilean market Sales to regulated and free clients 17.3 TWh sales to free clients 1 1 Charging 1.1k points2 Growth through electrification, providing new services, products and solutions 5.7 GW Leader in re
Slide 9: Main priorities
Main priorities eCnel
Slide 10: Our main priorities
Our main priorities Our commitments to enable … translate into our main priorities for 2022-2024 clients’ needs… Sound commercial ESG Sustainable and Affordable and strategy excellence resilient growth clean energy Commodity / service ESG reference in the Shield margins sales growth in the region, f
Slide 11: Strategic actions
Strategic actions eCnel
Slide 12: Our strategic actions
Our strategic actions Enhancing the resiliency of our portfolio of 1 assets and commercial strategy Allocating capital to support commercial growth 2 centered on our clients Maximizing the value for our clients through 3 electrification 4 Bringing forward Net Zero 11
Slide 13: Our strategic actions
Our strategic actions Enhancing the resiliency of our portfolio of 1 assets and commercial strategy Allocating capital to support commercial growth 2 centered in our clients Maximizing the value for our clients through 3 electrification 4 Bringing forward Net Zero 12
Slide 14: Electrification of consumption
Electrification of consumption Electrification: the pathway for the energy Replacement of firewood transition heating by electric devices % participation of electricity in energy consumption in Chile1 54% Promoted by the 30% 2050 government 24% 2030 2020 Net incremental electricity in Chile by 20302
Slide 15: Energy transition brings several additional opportunities for our Company and for our clients
Energy transition brings several additional opportunities for our Company and for our clients… Main actions Electrification of the final consumers - Integrated offering for our (e-city, e-mobility, e-home) clients Expiring PPAs in the market will trigger - Increased presence of potential opportuniti
Slide 16: … to create value in an integrated strategy
… to create value in an integrated strategy Integrated Approach Commercial Strategy Main references Total Sales (TWh)1 27.7 29.0 Commodities Services 22.6 21.9 19-21 Period: New renewables long-term PPAs with mining companies Product PPA + & Services 2019 2020 2021E 2024 Total Services revenues (USD
Slide 17: Our strategic actions
Our strategic actions Enhancing the resilience of our portfolio of 1 assets and commercial strategy Allocating capital to support commercial growth 2 centered in our clients Maximizing the value for our clients through 3 electrification 4 Bringing forward Net Zero 16
Slide 18: During the last years, we've started the construction of several projects
During the last 2 years, we’ve started the construction of several projects towards a more renewable matrix… Net Installed Capacity (MW) End of Construction Azabache 61 Q4 21 First H2 pilot project Campos del Sol 375 Q4 21 Sol de Lila 161 Q4 21 3.4MW 1.25MW Domeyko 204 Q4 21 JV with AME (HIF) .Santi
Slide 19: … and we continue to boost our portfolio with new hybrid projects
… and we continue to boost our portfolio with new hybrid projects Campos del Sol II Sierra Gorda La Cabaña Rihue 398 MW 375 MW 106 MW 120 MW 30 MW BESS 30 MW BESS Use of existing Use of existing Hybrid project Hybrid project Wind + BESS Wind + BESS facilities facilities infrastructure of infrastruct
Slide 20: Growth on renewables towards a more resilient and diversified matrix
Growth on renewables towards a more resilient and diversified matrix Renewable Capacity Capacity by technology Development Renewables evolution (GW) by 2024 Capex (USD bn) 80% renewable +3.3 GW 20% +12% 8.0 2024 vs. 2020 37% 1.7 2% 1.5 +0.4 10.1 GW 5.7 10% 4.7 +2.6 1% +0.2 30% +0.2 Hydro Geothermal
Slide 21: This strategy is supported by an extensive pipeline to seize future opportunities
This strategy is supported by an extensive pipeline to seize future opportunities Renewables pipeline by technology and maturity (GW)1 Gross Pipeline by region 24% ~3 48% 61% ~10 30% ~21 14% ~7 1% 22% ~2 Gross Pipeline BESS Early stage Mature In Execution 1. Data as of Oct/21; BESS includes storage
Slide 22: Our strategic actions
Our strategic actions Enhancing the resiliency of our portfolio of 1 assets and commercial strategy Allocating capital to support commercial growth 2 centered in our clients Maximizing the value for our clients through 3 electrification 4 Bringing forward Net Zero 21
Slide 23: Grid infrastructure evolution is key to enable electrification
Grid infrastructure evolution is key to enable electrification… Distributed Electricity1 (TWh) Main KPIs Networks Capex (USD mn) 2021E 2024 +6% End users +11% 2.0 2.2 (mn) 0.55 17.3 0.49 16.3 Losses2 5.2 5.0 32% (%) 34% Telecontrol 2,662 2,710 (#) 68% 66% SAIDI2 168 168 (min) 2021E 2024 2021-2023 20
Slide 24: … supported by investments focused on our clients, efficiency and digitization
… supported by investments focused on our clients, efficiency and digitization… Networks Capex Grid Blue Sky Main digitization KPIs2 (USD mn)1 2021E 2024 High voltage TECHNOLOGICAL SOLUTIONS Customer 100% 100% 33% DIGITAL INFRASTRUCTURE (%) centricity 46% 2022-24 Medium voltage 0.5 USD bn 80% 90% (%
Slide 25: … improving our client's journey through new digitalized channels
… with the main goal of improving our client's journey through new digitalized channels… Commercial service at a glance Main KPIs Digitization strategy principles Our journey in numbers 2021E 2024 Platformization and Clients App 532 760 digitization users (´000#) Clients' digital 90% 95% interaction
Slide 26: … innovative technologies to bring value added services to all clients
… leveraged on innovative technologies to bring value added services to all clients Leading the energy transformation Main Enel X KPIs Electrification 5 (GWh) 2021E 2024 Through e-mobility Charging Points1-2 3.9x (public and private) (‘000) 1.1 4.9 First e-truck in Chilean Electric buses1-3 mining i
Slide 27: Our strategic actions
Our strategic actions Enhancing the resiliency of our portfolio of 1 assets and commercial strategy Allocating capital to support commercial growth 2 centered in our clients Maximizing the value for our clients through 3 electrification 4 Bringing forward Net Zero 26
Slide 28: Net zero emissions is a win-win strategy for ALL
Net zero emissions is a win-win strategy for ALL Our consistent journey… Paving the way to a Decarbonization Speeding up announcement decarbonization Boosting renewables Zero Coal capacity renewable future 2030 >85% 2019 2020 2021 2022 2024 Renewable Coal facilities New disconnection dates ~1 GW Dis
Slide 29: Acceleration of Net Zero supported by electrification and renewables
Acceleration of Net Zero supported by electrification and renewables … 2021E 2023 2024 2040 SCOPE 1 GENERATION <250 <100 <90 0 Anticipating (gCO2e/kWh) our Net zero Main actions NET ZERO target to 2040 Coal phase-out by May/22 (from 2050) Accelerate renewables deployment Innovation and new technolog
Slide 30: … all with actions focused in a just and inclusive approach
… all with actions focused in a just and inclusive approach… Circular Economy Just Transition approach towards decarbonization Coal unit Closing date Tarapacá: Dec/19 Repurposing 158 MW Bocamina I: Dec/20 128 MW Bocamina II: May/22 350 MW People 3.0 CO2 avoided1 million tons ~23 USD million Tax save
Slide 31: … reflected in the consistent improvements of our main ESG scores
… reflected in the consistent improvements of our main ESG scores ISS ESG FTSE Russell MSCI AA 4.0 A B BBB -B 3.2 3.4 C EM 2019 2020 2021 2019 2020 2021 2018 2019 2020 4º 2º 1º 1º Scale from -D to B+ Scale from 0 to 5 Scale from CCC to AAA 2018 2019 2020 2021 As of Feb 2021 As of Jun 2021 As of Aug
Slide 32: Our value
Our value eCnel
Slide 33: Our investments are focused on decarbonization and tailor-made to satisfy our clients' needs
Our investments are focused on decarbonization and tailor-made to satisfy our clients’ needs, creating value Capex by business model and Total investments (USD bn) Dividend yield (%) business line +12% 7 p.p. 1% 9 2.6 21% 2.4 2022-24 7% 2.6 USD bn 71% 3 2021-23 2022-24 2021E 2024 Old plan New plan R
Slide 34: Plan in numbers
2022-24 Plan in numbers eCnel
Slide 35: New plan investments to improve our portfolio resiliency
New plan investments to improve our portfolio resiliency Investments centered on clients’ needs… …focused on SDG goals CAPEX 2022-24 allocation (USD bn) SDG related 1.0 1% 1% 15% 0.9 6% 1% 0.7 21% 21% 1% 9% 29% 2022-24 2022-24 7% 2.6 USD bn 2.6 USD bn 7% 77% 71% 69% 63% 93% 93% aligned to 2022 2023
Slide 36: Generation capex driven by decarbonization strategy
Generation capex driven by decarbonization strategy… Generation CAPEX 2022-24 Renewable's development CAPEX comparison (USD bn) Total CAPEX Development CAPEX Add capacity Add capacity Old plan1 +0.18 New plan1 2% USD bn 14% 11% 6% 11% Others NCRE 1.7 1.5 85% 78% 3% 2022-24 20% 2022-24 2.0 USD bn 1.7
Slide 37: … bringing additional flexibility to our portfolio
… bringing additional flexibility to our portfolio... Production evolution (TWh) CO2 free production (%) Energy balance (TWh) +21% +5% 22.9 27.7 27.7 29.0 29.0 19.0 +30 p.p 2024 5.5 6.3 10.6 0.6 3.7 16.5 2.5 17.3 8.0 +92% 22.9 0.7 10.4 19.0 2021E 4.3 10.4 12.5 2.3 1.8 0.0 2021E 2024 +62% 2021E 2024
Slide 38: … reflected in generation business line's EBITDA improvements
V 02 … reflected in generation business line’s EBITDA improvements EBITDA evolution over 2021E-2024 (USD bn) Main performance indicators +34% 2021E 2024 CAGR PPA price2 (USD/MWh) 72 66 -3% 1.4 -0.03 0.21 EBITDA 1.0 0.16 adjusted1 25 +24% (USD/MWh) 0.35 48 0.7 EBITDA1 proforma 37 +8% (USD/MWh) OPEX/M
Slide 39: Networks investments to support electrification and performance
Networks investments to support electrification and performance Capex tailored to improve performance and electrification EBITDA evolution over 2021E-2024 (USD bn) 2022-24 | 0.5USD bn +45% 33% 32% 0.27 0.02 46% 0.03 0.19 0.02 42% 0.02 68% 42% 21% 58% Quality & Resiliency Distribution 58% Digitizatio
Slide 40: Value services pushing for electrification and value creation for our clients
Value services pushing for electrification and value creation for our clients Enel X strategy Enel X CAPEX EBITDA evolution over 2021E-2024 (USD mn) Enabling electrification and Net-Zero pathways +110% B2B 13% 5% 46 - Partner to optimize energy (2) costs and emissions 2022-24 10 25 USD mn 7 B2C 22 1
Slide 41: EBITDA increase in a more conservative hydrology scenario
EBITDA increase in a more conversative hydrology scenario EBITDA evolution over 2021-2024 (USD bn) EBITDA Old vs. New Plan 22-23 (USD bn) +38% -19% 1.7 0.06 3.1 0.25 1.2 (0.5) 2.5 0.16 (0.1) (0.3) 0.3 0.9 0.35 12.1 TWh/y 9.9 TWh/y Adj. 2021E1 Hydro and 2021E Sourcing Gx Growth Gx, Networks, 2024 202
Slide 42: Commercial strategy
2022-24 Commercial strategy
Slide 43: Commercial strategy supported by long-term visibility, geographic diversification and solid portfolio
Commercial strategy supported by long-term visibility, geographic diversification and solid client's portfolio … Portfolio by off-taker PPAs geographic location PPAs by residual duration 2024 +33% 2020 2020 12% 14% 22% 35% 33% 39% 21.9 26% TWh 31% 49% 29.0 69% 65% TWh 43% 17% 13% Free market & other
Slide 44: … with conservative management assumptions, leveraged by portfolio flexibilities
… with conservative management assumptions, leveraged by portfolio flexibilities Sources Mix Portfolio Hourly cluster energy Portfolio’s flexibility (TWh) allocation for 2024 44 44 44 Availability of gas power plants generation 45 47 27.7 29.0 Increase PPA purchases at 26 Spot price competitive pric
Slide 45: Financial management
2022-24 Financial management
Slide 46: Strong cash generation financing our diversification strategy
Strong cash generation financing our diversification strategy, with available optionality… Source of funds allocation 2022-24 Net debt evolution 2021E - 2022 with Strategic plan scenario (USD bn)1 Asset rotation optionality (USD bn) 2.9x 5.1 3.0 0.3 4.7 0.1 Net Debt/ (0.7) 1.0 EBITDA 2024 (2.6) Net
Slide 47: … supported by sustainable instruments to fund our growth
… supported by sustainable instruments to fund our growth Financial flexibility & main ratios Debt maturity by year (USD bn) YE 2021E YE 2024 3.3 SDG-linked gross 0.9 2.7 CO2 emissions 4% 9% 5% 14% debt USD bn (gCO2eq/kWh) 2023 2024 Share of sustainable 2.5 finance 19% 52% <100 <90 Avg. term of new
Slide 48: Earnings evolution
2022-24 Earnings evolution eCnel
Slide 49: Earnings recovery supported by growth initiatives and managerial action
Earnings recovery supported by growth initiatives and managerial action Net Income evolution 2021-24 (USD bn) 37% 0 (0.15) (0.04) 0.46 (0.10) 0.6 0.5 0.24 0.2 Adj. 2021E1 Hydro and 2021E EBITDA D&A Financial Taxes 2024 commodity proforma charges scenario 1. Adjusted by decarbonization impairment and
Slide 50: Financial targets
2022-24 Financial targets eCnel
Slide 51: Strategic plan targets
Strategic plan targets 2021E 2022 2023 2024 CAGR2021-2024 EBITDA1 0.8 - 0.9 1.0 - 1.1 1.4 - 1.5 1.6 - 1.7 +26% / +24% (USD bn) USD bn USD bn USD bn USD bn Net Income1 0.2 0.2 - 0.3 0.5 - 0.6 0.6 - 0.7 (USD bn) USD bn USD bn USD bn USD bn +44% / +52% Dividend payout2 30 - 50% 30 - 50% 50% 50% 1. Adju
Slide 52: Unique integrated utility in Chile
Unique Integrated commercial Enablers of Sustainable Bringing integrated strategy supported by decarbonization and forward Net growth vehicle with ESG fully Zero to 2040 utility in solid and electrification in Chile from 2050 integrated into diversified strategy Chile assets 51
Slide 53: Annexes
2022-2024 Annexes eCnel
Slide 54: Annexes
Annexes Carbon Neutral certificate 2022 – 24 Financial and Operational annexes Main assumptions, Macroeconomics and sensitivities Gross Capex per Business Lines Generation Installed capacity, production and PPA portfolio Enel Chile Corporate information Credit Ratings Organization Structure Board of
Slide 55: Carbon Neutral certification
Carbon Neutral certification In partnership with GreenerRoadshowstm, we are pleased to announce that this Investor Day is certified as Carbon Neutral under PAS2060 Certification 54
Slide 56: Main assumptions
Main assumptions Macroeconomics GDP Demand Growth CPI (%) (%) (%) 2022 2023 2024 2022 2023 2024 2022 2023 2024 2.7% 3.6% 3.4% 3.4% 3.4% 2.9% 2.5% 2.8% 3.0% Commodities Henry Hub Brent (USD/MMbtu) (USD/bbl) 2022 2023 2024 2022 2023 2024 3.3 3.0 2.7 66.0 63.0 62.0 Marginal costs Quillota marginal cost
Slide 57: Main sensitivities for 2022-2024 figures
Main sensitivities for 2022-2024 figures Annual Impact on 2022-24 EBITDA (USD mn) +10% +1% Genco Sales Hydrology ~100 ~6 -10% ~(100) -1% ~(6) +10% -10% -10% GAS ~(10) ~5 Commodities (Henry Hub) ~15 OIL ~(20) ~15 +10% (Brent) ~(25) COAL ~5 ~(5) (API2) 56
Slide 58: Capex by Business line
Capex by Business line Gross CAPEX (USD bn) CAPEX 2022-24 allocation (USD bn) 1.0 0.0 0.2 0.9 Business line 2021E 2022 2023 2024 ∑ 2022-24 0.1 0.0 0.7 Renewables 0.9 0.8 0.6 0.5 1.8 0.2 0.0 0.1 0.2 Thermal 0.1 0.1 0.1 0.1 0.2 0.0 Networks 0.2 0.2 0.2 0.2 0.5 0.8 Enel X 0.0 0.0 0.0 0.0 0.0 0.6 0.5 Ot
Slide 59: Installed Capacity and Production by Technology
Installed Capacity and Production by Technology Installed capacity (GW) Production (GWh) +25% +21% 4% 6% 7% 12% 0% 8% 15% 4% 0% 37% 18% 8.1 44% 10.1 19.0 42% 22.9 46% GW GW 23% TWh TWh 46% 26% 43% 19% Coal CCGT Oil&Gas Hydro Renewables (ex - Hydro + BESS) 58
Slide 60: Generation PPAs portfolio
Generation PPAs portfolio PPAs profile (TWh) Clients value strategy Commodities Services 29.6 28.5 29.0 27.7 21.9 Product 50% 63% 63% 62% 57% PPA’s + & Services Integrated offer 50% 37% 38% 43% 37% Beyond Commodity strategy enhances our offer of 2020 2021E 2022 2023 2024 products and services. Regul
Slide 61: Credit Rating
Credit Rating Enel Chile and Enel Generación Chile International market Chilean market Enel Chile Enel Chile Standard & Poor’s Moody’s Fitch Ratings Fitch Ratings Feller Rate Affirmed Apr/21 Affirmed Aug/21 Affirmed Jan/21 Affirmed Jan/21 Affirmed Jun/21 Enel Generación Enel Generación Standard & Po
Slide 62: Organization structure
Organization structure Enel Chile shareholders1 64.9% 1.3% 12.1% Chile Pension Funds 17.8% Market Cap2 Institutional Investors 3.2 $ bn ADR’s 3.9% Enel SpA 64.9% Others 100.0% 93.5% 99.1% 99.1% 100.0% Green Power Generación Chile Transmisión Chile Distribución Chile Enel X 1. As of September 30, 202
Slide 63: Enel Chile businesses
Enel Chile businesses Largest Utility player in Chile in installed capacity and number of clients Thermal generation Renewables generation Distribution area Tarapacá TG Azabache Finis Terrae Empresa Eléctrica Atacama Cerro Pabellón Pampa Norte Domeyko Enel Colina Valle de los Vientos D. Almagro Sol
Slide 64: Management of the company
Management of the company Management Team P. Pallotti Chief Executive Officer A. Pellegrini Sustainability & Community Relations G. Turchiarelli Chief Financial Officer R. Puentes Procurement L. Schnaidt People and Organization A. Barrios Digital Solutions D. Gomez Regulation M. Rinchi Services & Se
Slide 65: Corporate governance structure
Corporate governance structure Shareholders’ meeting Audit firm 14% 43% BoD’s composition Board of Directors (7 members) 43% Non executive Executive Independent Functions: Directors Committee Audit committe Sustainability committe Related parties transactions 64
Slide 66: Board composition
Board composition Board of Directors Board of Directors’ diversity Herman Chadwick Chair 29% Monica Girardi Director 57% Age Gender diversity diversity Isabella Alessio Director 43% 71% 41-50 Over 50 Male Female Salvatore Bernabei Director Directors’ Committee (C) Fernán Gazmuri 43% Director. Tenure
Slide 67: CEO's short-term variable remuneration
CEO’s short-term variable remuneration Macro objective Objective Type of target Weight Range Maximum Profitability Net Income Chile 25% Economic 120% Maximum Financial FFO Chile 15% Financial 120% Safety in the Maximum Safety 20% ESG workplace 120% Maximum Business Customers 20% ESG 120% Maximum Bus
Slide 68: Policies, principles and codes
Policies, principles and codes Ethics, Integrity, Human Rights, and Diversity • Ethical code • Zero Tolerance Plan for Corruption • Global Compliance Program on Corporate Criminal Liability • Criminal Risk Prevention Model • Compliance Program for Free Competition Regulations • Human Rights Policy •
Slide 69: Disclaimer
Strategic Plan 2022-2024 Disclaimer This presentation contains statements that could constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this announcement and include statements regarding t
Slide 70: Contact us
Strategic Plan 2022-2024 Contact us Contacts Email ir.enelchile@enel.com Phone +56 2 2630 9606 Channels Follow us Website Isabela Klemes Enel.cl Head of Investor Relations Enel Chile Investor Relations team Mobile App Catalina González Enel Investors Claudio Ortiz Pablo Contreras Download app Franci