Enel Generación Chile IR Presentation 9M 2016
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Enel Generación Chile Investor Relations Presentation 9M 2016
Transcript of Enel Generación Chile IR Presentation 9M 2016
Enel Generación Chile
Investor Relations Presentation9M 2016
Organization structure
2
Enel Generación Chile (after Spin Off)
PEHUENCHE, 93%
GASATACAMA, 97%
61%
60%
ITALY
CHILE
Transquillota ,48%
Electrogas, 43%
GNL Chile, 33%
CHILE1
Committed Shareholders
Average volume traded (MMUS$) 2015 2016
Chilean Stock Exchanges 6.0 4.9 50%
NYSE 4.4 5.0 50%
Total 10.4 9.9 100%
ENEL SpA
ENEL CHILE
ENEL GENERACIÓN CHILE60%
16%
3%
3%
18%
Enersis S.A.
Chilean PensionFunds
ADRs (Citibank N.A.)
Retail
InstitutionalInvestors
1 Recognized as equity method investments.
Key investment considerations
Best investment grade in the region. Stable ratings by Credit Rating Agencies (BBB+)
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Attractive business in Chile
Well diversified portfolio of generation assets, including all types of technologies.
Hydroelectric assets prevailing in the Chilean Central Interconnected System SIC.
Competitive thermal assets to reduce hydrological risks.
One of the largest electricity generation companies in Chile.
Proven track record with more than 70 years of experience
Conservative commercial policy to cope with hydrological risks.
Stable regulatory framework to develop reliable long term business.
Well diversified generation assets
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Most relevant player in hydro generation
Energy sales 9M16 : 17,962 GWh
Energy sales 9M15 : 17,311 GWh
Market Share 1 : 35%
55%
10%
34%
1%
HYDRO
COAL
OIL-GAS
NCRE
55% of Endesa Chile’s installed capacity
corresponds to hydro resources
Installed Capacity 6,351 MW
Hydro : 3,456 MW
Oil-gas : 2,173 MW
Coal : 636 MW
NCRE 2 : 87 MW
D. Almagro–Taltal
Bocamina LajaMaule
Bio Bío
Tarapaca
Huasco
San Isidro
Los Molles
CachapoalSantiago
1:Calculated based on total sales of the country.
2: Non Conventional Renewable Energy.
Balanced comercial policy
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Leading to revenue stability
Physical sales: 17,962 GWh
SpotUnregulated
Customers
Regulated
CustomersSpotFree Customers
Energy sales by type of customer (Million Ch$) Chile – Contracted energy with Regulated and Free Customers (GWh)
Physical Sales 9M16 GWh Change1
REGULATED 14,080 8%
UNREGULATED 3,087 -1%
SPOT 795 -31%
TOTAL 17,962 4%Regulated
Customers
78%
17%5%
896,457 781,810
171,726 173,853
81,863 118,810
9M 2015 9M 2016
1,077,2151,159,136
1 Compared with 9M15
02468
10121416182022
2017 2018 2019 2020 2021 2022 2023 2024 2025
Regulated Costumers Free Costumers
Financial Highlights
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Improving results in Chile
Consolidated Income Statement1 9M 2016 9M 2015 Change %2 MM US$3 2016
Revenues 1,276,246 1,131,398 13% 1,877
Costs (708,503) (712,864) (1%) (1,042)
Contribution Margin 567,743 418,534 36% 835
EBITDA 439,528 320,527 37% 642
EBITDA Margin 34% 28% - 34%
EBIT 340,008 229,342 48% 500
Net Financial Expenses (22,741) (95,288) (76%) (33)
Related Company Results 6,858 7,483 (8%) 10
Net Income from other Investments 121,405 4,309 2,717% 179
Taxes (82,549) (36,779) 124% (121)
Net Income 442,587 364,432 21% 651
Attributable to shareholders of Endesa Chile 396,302 194,459 104% 583
1 Under IFRS, Endesa Chile has adopted the Chilean Peso as functional currency, comparisons between periods have been only made using Ch$.
2 When comparing 9M2016 with 9M2015
3 Referential average exchange rate was 680,08 Ch$/US$ as of September 30, 2016.
Healthy debt maturity profile
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Solid financial ratios and Investment grade rating (BBB+)
Debt by Type1 Debt by Currency1
Total Debt: US$ 1,443 MM
Financial Debt Maturity1 as of September 2016
• Cash: US$ 167 MM
• Committed Credit Lines: US$ 364MM
• Average life of debt: 10 years
• International Credit Rating: BBB+
8 8 2887 45
1,089
3 3 3
153
3 120
200
400
600
800
1.000
1.200
< 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years and beyond
Bonds Banks and Other
93%
7%
US$
UF + CLP
12%
88%
Others
Bonds
1 Includes arrangements and other consolidation adjustments.
Consolidated Cash Flow Generation (US$ million)1
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Including discontinued operations
1. Referential average exchange rate was 680.08 Ch$/US$ as of Sept 30, 2016
2. Dividend payment considers cash outflows to Enersis and all minorities’ shareholders.
0
0
420
184
462
83
0
0
220162
0
100
200
300
400
500
600
700
800
900
Cash and equivalentsSept-15
Funds from operations Capex Financing activities &Exchange rate effects
Dividend payment ² Cash and equivalentsSept-16
Markets with high potential for growth
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Annual growth of 3.4% in electricity demand in Chile*
Direct relation between GDP and electricity demand
ARGENTINA
AUSTRALIA
AUSTRIA
BOLIVIA
BRAZIL
CANADA
CHILECHINA
COLOMBIA
FINLAND
FRANCE GERMANY
GREECE
INDIA IRELAND
ITALY
JAPAN
MEXICO
PERU
RUSSIA
SPAIN UNITED KINGDOM
UNITED STATES
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
0 10,000 20,000 30,000 40,000 50,000 60,000
Elec
tric
ity c
onsu
mpt
ion,
per
cap
ita (
Kw
h pe
r ye
ar)
GDP per capita (current PPP, US$)Data source: The World Bank.
• Chile aims to be in the group of developed countries
• There is no development without energy.
* Average for 2005-2015 period.
Evolution of Endesa Chile’s total installed capacity
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Endesa Chile has more than doubled its capacity in the last 20 years
87%72%
76% 62% 55% 55%
13%
28%
24%
37% 44%
44%
1%
1% 1%
1995 2000 2005 2010 2016 Under construction
2,513
4,035
4,477
5,611
6,3516,501
GasAtacama
781 MW*
Los Cóndores
150 MW
• A well diversified generation matrix incorporating different types of generation technologies (Coal, LNG and NCRE), providing a better
position to cope with hydrological risks.
• 2% increase in installed capacity through projects under construction.
* Capacity added in 2014.
Projects under construction
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To support growth of the country
• Run-of-the-river, hydroelectric power plant.
• Located in San Clemente, in Maule region, Chile.
• 150 MW of installed capacity.
• Estimated generation of 600 GWh/year.
• Estimated load factor: 46%.
• Total CAPEX of US$ 662 million.
• 38% progress as of September 2016.
• Total investment of US$ 233 million as of September 2016.
Los Cóndores
Projects under construction
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General information (North dome)
• Construction started : August 2015
• Schedule ending construction: December 2016
• Men Hours spent: 606,000 hours.
• Cubic Meter of coal accumulated in field:
from 130.000 M3 up to 150.000 M3
• Total Capex: US$MM 50 aprox. (north and south domes)
Bocamina II optimization – Coal field domes
Permits
• Waiting for construction permits approvals for the south
dome.
Current status
• North dome is 76% complete.
To support growth of the country
Credit Rating Agencies’ Recognition
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Attractive ratings since 2010
BBB+ Baa2 BBB+
Since:
Affirmed:
Jan. 2010 Apr. 2011 Feb. 2010
Mar. 2016 Dec. 2015 Feb. 2016
AA (cl) AA
Jan. 2010 Apr. 2010
Mar. 2016 Jul. 2016
International market Chilean market
RATINGS BASED ON:
• Well diversified and efficient assets
• Leading market share in Chile
• Transparent and stable regulatory framework in Chile
• Solid financials, good cash flow generation and prudent financial
management
• Conservative commercial policy
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Strategic Plan 2017 - 2019EBITDA Evolution
898
1.108
2016E 2019
23%
Hydrology
Normalization of hydrology since
2018, favor an increase in hydro
production, improving margin
Sale priceContractual position allows to defend
margins when spot prices fall down
Assets Mix Diversified generation mix mitigates
hydrology risk
Drivers
Additional
capacity
Commercial operations of Los
Cóndores starting by the end of
2018, increasing our production in
600 GWh/year approx.
Accumulated EBITDA 2017 – 2019: Th US$ 3,095
1,108
Total 2017-2019
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Total investment for the period 2017 – 2019: US$ 687 MM:
• New Capacity: Los Cóndores.
• Higher environmental standards.
• Maintain higher standard of operational efficiency.
Operational excellence in the generation capacity
248
439
Mantenimiento BD
Capex Maintenance and Business Development
85 61101
264
15818
349
219
119
2017 2018 2019
Mantenimiento BD
Strategic Plan 2017 - 2019
Maintenance
Maintenance
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50%55%
60%65%
70%
2016 2017 2018 2019 2020
• Enel Generación Chile paid on May 24th a dividend of Ch$ 11.02 per share1.
• Enel Generación Chile proforma dividend 2015 was Ch$ 23.95 per share.
1. Note: As of March 1, 2016, Enel Generación Chile Spin-Off became effective.
Pay-out ratio increasing to 70% in 2020
Dividend policy
Susana Rey
Head of IR Enel Chile
+56 2 2630 9606
Contact us
[email protected] further information, visit our IR site at:
www.enelgeneracion.cl
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Catalina González
Head of IR Enel Generación Chile
+56 2 2630 9603
Guillermo Berguecio
Analyst of IR Enel Generación Chile
+56 2 2630 9506
Francisco Basauri
Analyst of IR Enel Generación Chile
+56 2 2630 9585
Enel Generación Chile
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Exhibits
Highlights 9M16
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• Chilean EBITDA amounted to 642 million dollars in 9M16, increasing 37%.
• Net income attributable to shareholders rose 104% to 583 million dollars.
• Total energy sales rose by 4% in 9M16.
• Higher generation, despite lower hydrology, due greater coal generation (+961 GWh).
• On October 4, 2016, it was changed the Company’s name to "Enel Generación Chile S.A.”.
The new name became official on October 18, 2016.
• Enel Generación Chile S.A. sold all of its shareholding in GNL Quintero S.A. for Ch$
132,821 million on September 14, 2016.
Installed capacity and energy generation
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1 : Compared with 9M15
Los Molles: 18 MW
Rapel-Sauzal: 466 MW
Maule: 875 MW
Laja: 940 MW
Ralco-Pangue: 1,157 MW
54% Hydro
3,456 MW
44% Thermal
2,808 MW
GasAtacama 780 MW
Tarapaca 182 MW
D. Almagro–Taltal: 268 MW
Huasco: 64 MW
San Isidro 1 and 2: 778 MW
Bocamina 1 and 2: 478 MW
TG Quintero: 257 MW
2% NCRE1
87 MW
Canela: 18 MW
Canela II: 60 MW
Ojos de Agua: 9 MW
Installed Capacity: 6,351 MW
Market Share*: 31%
Total Generation: 13,389 GWh
Net Generation 9M16 GWh Change1
HYDRO 6,674 4%
COAL 2,296 97%
OIL-GAS 4,296 (17%)
NCRE 73 (22%)
Total 13,389 7%
Historical energy generation by type of technology
* Based on installed capacity
0
1000
2000
3000
4000
5000
6000
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2012 2013 2014 2015 2016
Hydro Coal Oil-Gas CHP / Renewables
Strong financial position
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1Amounts translated into US$ using the exchange rate as of September (Ch$ 658.02 per US$).
*Financial ratio as of Sept 2016 compared with Sept 2015.
(Million Ch$) September 2016 Dec 2015 Chg. Chg % MM US$ 20161
Gross Debt 974,683 945,119 67,534 7% 1,479
Cash 110,174 37,425 66,737 64% 167
Net Debt 864,509 907,694 797 (5%) 1,312
Leverage 0.94 1.05 0.09 (10%) -
Financial Expenses
Coverage18.29 11.23 27.39 63% -
ROE (%)* 22.1% 12.7% 9,4% 74% -
ROA (%)*10.9% 8.1% 2.8% 34% -
DISCLAIMER
This presentation does not constitute an offer to sell any securities and is not soliciting an offer to buy any securities in any jurisdiction.
This presentation contains certain “forward-looking statements” regarding anticipated financial and operating results and statistics and other future events relating to Enel Generación ChileS.A. (Enel Generación) These statements are not guarantees of future performance and are subject to material risks, uncertainties, changes and other factors which may be beyond EnelGeneración’ control or may be difficult to predict. These statements may constitute forward-looking statements within the meaning of the United States Private Securities Litigation ReformAct of 1995. The inclusion of these forward-looking statements should not be regarded as an indication that Enel Generación or any other person considers such projections to be material orto be a reliable prediction of actual future results. These forward-looking statements are subjective in many respects and there can be no assurance that they will be realized or that actualresults will not be significantly higher or lower than described. As a result, the inclusion of any forward-looking statements in this presentation should not be relied on as necessarilypredictive of actual future events. The projections and other forward-looking statements were based on numerous variables and assumptions that are inherently uncertain. Actual resultsmay differ materially from those projected as a result of such risks and uncertainties. In addition, the financial projections do not necessarily reflect revised prospects, changes in generalbusiness or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated at the time the projections were prepared.
Forward looking statements include, but are not limited to, information regarding: Enel Generación' business plans, Enel Generación' cost reduction plans, trends affecting Enel Generación 'financial condition or results of operations including market trends in the electricity sector in Chile or elsewhere, supervision and regulation of the electricity sector in Chile or elsewhere, andthe future effect of any changes in the laws and regulations applicable to Enel Generación' or its affiliates. The principal assumptions underlying these forecasts and targets relateto: Economic and Industry Conditions, Commercial Factors, Political/Governmental Factors, Operating Factors, and Competitive Factors.
The following important factors, in addition to those discussed elsewhere in this presentation, could cause actual financial and operating results and statistics to differ materially from thoseexpressed in our forward-looking statements, including but not limited to: changes or developments regarding the applicable regulations (which may affect the investment plan of EnelGeneración regarding the regulated activities), legal restrictions applicable to the implementation of the dividends policy, environmental regulations and other legal issues; price of electricity;price and supply of raw materials; interest rates or exchange rates; availability of fuel; ability to maintain relationship with suppliers, customers and consumer and user protection groups;changes in climate conditions; widespread adoption energy efficiency measures; inherent risks in the construction of new power generation and distribution facilities; changes in generaleconomic, political, administrative and business conditions; operating hazards and risks; tax risks; loss of senior management and key personnel; insufficiency of insurance coverage orincrease of insurance costs; failure of systems and information technology and processing; inability to access the capital markets to refinance its debt and finance its capital expenditures;and other factors that could adversely affect the business and financial results of the Company.
No assurance can be given that the forward-looking statements in this document will be realized. Readers are cautioned not to place undue reliance on those forward-looking statements,which speak only as of the date of this presentation. Our independent registered public accounting firm has not audited, examined or compiled the forward-looking statements and,accordingly, does not provide any assurance with respect to such statements. Neither Enel Generación nor any of its affiliates intends, nor undertakes any obligation, to update or revise theforward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
