Enel Chile. May 2018

Transcription

1 May 2018

2 Agenda Enel Group leader in energy transition A new structure to face the future Chile & Company context and future expectations Businesses overview Sustainability Financials 2

3 Enel Group Enel Chile is part of one of the world s leading integrated electricity and gas operators #1 private network operator globally 65 mn end users and 44 mn digital meters #1 Renewable operator ~40GW managed capacity mn end users +8.4 mn smart meters 2 +6 GW +80% additional capacity 20 mn free retail customers #1 in Italy, Iberia and top 3 in Latam +5 mn free customers +20% electricity sold in free market 47 GW thermal capacity Highly flexible and efficient assets Enel X +5.7 GW demand response delivery. As of 2017E 2. Including replacement of smart meters 2.0 in Italy. Enel global market share equal to 24% (BNEF 3Q17 Energy Smart technologies market Outlook) 3. Consolidated capacity equal to 37 GW (including 25 GW of large hydro) 3

4 Agenda Enel Group leader in energy transition A new structure to face the future Chile & Company context and future expectations Businesses overview Sustainability Financials 4

5 Restructuring process Project Elqui paves the way for a New Equity Story of Enel Chile Past situation Current situation Enel Chile Shareholders 1 19% 100.0% 60.6% ~62% 1% 5% 13% 62% Latin America Chile 100.0% Chile 60.0% 99.1% 100.0% Generación Chile 93.6% 99.1% Distribución Chile Enel SpA Chilean Pension Funds ADRs (Citibank N.A.) Retail Institutional Investors Generación Chile Distribución Chile Unique investment vehicle promote interest alignment with all shareholders 1. As of April 2018, excluding the withdrawal rights shares. 5

6 Businesses lines new structure Conventional Generation Renewables Infraestructure and Networks Market Enel X 2,808 MW of installed capacity. Well diversified mix of generation assets with all kind of technologies. Operational efficiency leading to increased availability of our power plants. Efficient thermal capacity to mitigate hydrology risk 4,654 MW of installed capacity. Opportunity to invest in the largest NCRE player in the country. Lower needs of maintenance capex implies better profitability for ours Shareholders. Technology improvement benefits NCRE load factors. Indefinite concession in most populated area in the country with the largest consumption. The most efficient distribution Company in the country in terms of energy losses. Potentially changes in the Distribution regulation will boost the digitalization process. Better positioned to face the liberalization of the Chilean market. Opportunity to sale energy outside the concession area. New growth opportunities through new services, products and solutions over this new business line. Chile is better prepared in Latin America to assimilate the transition of the energy sector. 5 dedicated businesses lines 6

7 Largest Utility player in Chile in installed capacity and number of clients CONVENTIONAL GENERATION NCRE GENERATION POWER DISTRIBUTION D. Almagro Finis Terrae Pampa Norte Huasco Los Molles San Isidro Maule Bocamina Taltal Santiago Cachapoal Laja Bio Bio Cerro Pabellón Valle de los Vientos Sierra Gorda Este Lalackama I Lalackama II Taltal Talinay Oriente Talinay Poniente La Silla Carrera Pinto Chañares Diego de Almagro Enel Distribución Chile S.A. 63% of installed capacity corresponds to renewable resources Renaico Los Buenos Aires Pullinque Pilmaiquén Clients 1.9 million Total installed capacity 6.4 GW Total installed capacity 1.2 GW Market share >40% Market share % Generation TWh Concession period Indefinite Generation TWh Energy distributed TWh Energy losses % 7

8 Agenda Enel Group leader in energy transition A new structure to face the future Chile & Company context and future expectations Businesses overview Sustainability Financials 8

9 The evolution of the world energy sector Urbanization Decarbonization Electrification Demand growth Distribución Generación By 2050, 6.3 billion people will live in cities Over 175 GW Renewable capacity added in 2017 Electric vehicle sales will reach 1.5 million in 2018 In 2040 Electricity demand will grow globally by more than half compared to today s level The energy sector is experimenting a deep transformation Digitalization and customer centricity will change the sector paradigm Source: United Nations 2014; BNEF 2018 and WEO

10 Chile Key Macro Assumptions Chile GDP Growth (%) Exchange Rate (CLP$ / US$) Chile CPI (%) US CPI (%) Source: Consensus Forecast as of March

11 Expected Businesses KPI s Diversified & efficient portfolio ,3 0,1 0,6 0,1 5,0 4,0 Net production (TWh) ,1 2,7 9,1 9,7 0,3 1,1 1,2 0,3 1,7 1,7 1,2 1,1 1,6 3,9 11,6 +2.1% , Energy Sales (TWh) +4.4% Hydro Coal CCGT Wind Solar Geo Fuel-gas Distributed energy (TWh) +6.0% Regulated Gx Non regulated Gx Non regulated Dx Distribution Clients (mn) +5.1%

12 EBITDA breakdown by business (US$ mn) +29% 1, ,417 1,179 1, , ,166 (41) (33) (29) (16) (14) Enel Gx Enel Dx EGP Enel Chile Guidance: 1. Referential average exchange rate was Ch$/US$ as of December 31th,

13 Capex expenditures (US$ mn) Enel Gx Enel Dx EGP Enel Chile Historical investment higher in generation with a progressive switch to NCRE in future years 13

14 Agenda Enel Group leader in energy transition A new structure to face the future Chile & Company context and future expectations Businesses overview Sustainability Financials 14

15 Enel Generación Chile EBITDA Evolution (US$ mn) Gross Capex (US$ mn) % 1, (43%) Growth Maintenance Key Drivers: - Better hydrological conditions since Diversified generation mix mitigates hydrology risk - Contractual position allows to defend margins when spot prices fall down Key Drivers: - New Capacity: Los Cóndores. - High environmental standards. - Maintaining high standard of operational efficiency. Notes: Nominal values 15

16 TWh Enel Chile Highly contracted profile going forward PPAs Enel Gx Hedge ratio: Contracted energy / Production % 100% 100% 100% 100% 100% 100% 88% 73% 66% 56% 54% 54% 16

17 Enel Green Power Chile EBITDA Evolution (US$ mn) Gross Capex (US$ mn) % % Growth Maintenance Key Drivers: - Maintaining high standard of operational Efficiency. - Risk free PPA with no exposure to spot price. - Commercial operations of new plants increasing our production in full operating 1,757 GWh/year approx. Key Drivers: - New Capacity (commercial operations 2021). - High environmental standards. - Maintaining high standard of operational efficiency. Nominal values 17

18 TWh Enel Chile Enel Green Power Chile - Highly contracted profile going forward PPAs EGP Hedge ratio: Contracted energy / Production % 100% 100% 100% 100% 100% 100% 95% 95% 91% 90% 90% 89% 18

19 Clear path to growth in renewables through EGP Chile Strong pipeline with clear construction strategy Technology MW GWh/ year Start commercial operation in 2021 (GWh) 1 Start commercial operation in 2024 (GWh) 2 Location Solar PV Wind Geo Total 1,136 3, ,180 Pipeline diversified by technology and geography 78% of pipeline has synergies with plants under operation Competitive pipeline with short time to market, actionable based on commercial opportunities (PPAs) 1, Energy awarded in energy bidding in , Energy awarded in energy bidding in

20 Enel Distribución Chile EBITDA Evolution (US$ mn) 1,2 Gross Capex (US$ mn) 1,2 +23% (20%) Growth Maintenance Key Drivers: - Regulated Business: Solid growth in new clients and stable regulatory environment - Efficiencies: Efficiency plan allow a stable Opex during the period Key Drivers: - Quality plan (installation of 800 telecontrol equipment). - Smart Meters - Transmission projects (new substation, capacity extensión in current substations) 1, Nominal values 2, Figures doesn t included the new technical resolution 20

21 New technical regulation enhances new opportunities Continuity indexes SAIDI 1 Hours SAIFI Times Commercial quality Average SAIDI of Enel Distribución in 2017, Define standards of care and proactive communication to customers Smart Meters Requires the implementation of Smart Meters systems in a maximum period of 7 years % of clients with smart meter 80% 100% 40% Minimum functionalities: Remote measurement of consumption Warning of lack of supply (required from 2022) Remote connection / disconnection Enel Distribution guidance does not include these new opportunities 1, Figures by municipalities. 21

22 New business structure in distribution to face future challenges Regulated Unregulated Distribution Regulated monopoly Price Cap Yardstick Competition Standard company assets at market prices Discount rate before tax 10% Efficient O&M Commercialization Free competition Bilateral agreements with suppliers and customers Enel X E City E Industry E Home E Mobility Transmission Regulated monopoly Revenue Cap Existing real assets at market prices Variable discount rate (min 7% post tax) Stability in the distribution business serving the Metropolitan region Capture of new clients inside and outside the concession area Expected growth in other non regulated business Efficient O&M Remunerated extension via tenders 22

23 Enel Distribución Chile Commercialization (sales to free clients) Energy sales to Free Market (TWh) Regulatory Framework Access to liberalized market depends on the user connected power: <500 kw: regulated market 500 5,000 kw: free choice between regulated and free market. >5,000 kw: mandatory free market Portfolio and strategy Diversified portfolio of energy purchases of more than 2 TWh-year of energy (12 suppliers in 2017) Energy sales to final customers nationwide. Leader in sales in distribution segment: almost 300 clients from different commercial and industrial sectors. Significant growth in free market resulting from the transfer of customers from the regulated market. Enel Dx has already signed 30% of the regulated market that can be transferred to the free market in Enel Distribution is a leader in free market sales in the distribution segment (*) By 2015 customers with connected power over 2,000 kw had to negotiate their tariff in the free market. The change in the law that raised the limit to 5,000 kw also prohibited that customers over 2,000 kw could be transferred to the regulated market until 2019, so in practice there are no regulated customers above 2,000 kw. 23

24 Enel X Our portfolio of solutions in the 4 Global Product Lines e-industries e-city e-home e-mobility Consulting and auditing service Smart lighting Installation. maintenance and repair services Charging infrastructure (public & private) Distributed generation on/off site Fiber optic wholesale network Automated home management Maintenance and other services Energy efficiency Distributed generation & energy services Financial services OEM back-end integration Demand response and demand side management Demand response and demand side management Home 2 Grid Vehicle Grid Integration Flexibility Addressing new customer needs with innovative technologies 24

25 Opex efficiencies* Networks US$/customers Renewables kus$/mw Thermal Generation kus$/mw Retail US$/customers -17% -12% -11% -9% Efficiencies in all existing businesses lines * Figures to 2018 s FX and CPI 25

26 Agenda Enel Group leader in energy transition A new structure to face the future Chile & Company context and future expectations Businesses overview Sustainability Financials 26

27 JUNE 2017 NOVEMBER 2017 YEAR 2018 Enel Chile A company ready to compete globally Generación FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices. Enel Chile was awarded as Top 3 in ALAS20 Chile, year 2017, in the categories of Leading Company in Sustainability and Leading Company in Corporate Governance. Enel Chile currently under assessment process in order to become part of the Dow Jones Sustainability Chile Index (DJSI Chile). 27

28 Engaging the local communities Enel commitments to the global SDGs 1 Contribution of Enel Chile to Enel target on SDGs Chile (*) Chile target SDG: Sustainable Development Goals (*)Beneficiaries, YTD

29 Decarbonizing the energy mix and environmental sustainability SDGs Main Actions Targets Action for climate change Development of renewable capacity +150 MW Investment in environmental improvements in existing plant 117 MM Environmental Sustainability Sustainable cities and communities Installation of a desulphurization plant in Tarapacá in 2016 Reduction of contamination Two operational dome in Bocamina power plant in

30 Agenda Enel Group leader in energy transition A new structure to face the future Chile & Company context and future expectations Businesses overview Sustainability Financials 30

31 Cumulated Cash flow generation ( ) US$ bn 4.9 (0.1) (0.8) (0.5) 3.6 Current Net Income payouts confirmed % % % (1.5) (1.5) 0.6 (1.8) (1.2) Elqui Impact Ebitda Change in Prov. NWC Taxes Paid Net Interests Paid FFO Capex Dividends Paids FCB before Ext. Extraordinary 0.9 (0.1) 0.0 (0.4) 0.4 (0.3) (0.0) (0.2) (1.8) (1.7) FCF Extraordinary operations consider Elqui s project impact (financing) Better company s profile with optimized capital structure and sustainable dividends policy 31

32 Optimized financial structure Optimization of financial structure ND/EBITDA pre ND/EBITDA post 0.6x 1 2.3x Gross and Net Debt (US$ bn) 2.3x ND/EBITDA: 1.4x Net debt EC Pre Net debt EGPC Cash out for PTO Net debt post Elqui Elqui (93.55% of final stake in Enel Gx) Net debt Cash Efficient capital structure with a healthy leverage level and investment grade rating 1. Considers the new shares of the capital increase as of result of the reorganization. 32

33 Dividend payout ratio will increase to 70% in 2020 Dividend (CLP$) Dividend payout ratio Dividend yield 5.3% 5.4% % % % % 70% Interim Final Market Cap will increase its value over US$ 9.0 billions more than doubling the market value of nearest competitor. 1. Considers the number of shares before the reorganization. 33

34 Higher liquidity and float will increase the weight in IPSA and MSCI Larger free float and enhanced liquidity 1 Average Daily trading volume (US$ mn) Increase in Market Cap (US$ mn) 2 USDbn +36.4% Pre Elqui EGC Minorities Enel EGPL Chile (93.55% of stake) 3.6 Pre transaction +55.6% 5.6 Post transaction # Company Top 15 pre Elqui Market Cap (US$ mm) 1 SACI Falabella 23,548 2 Empresas COPEC 21,204 3 Banco de Chile 16,410 4 Banco Santander Chile 15,633 5 SQM 14,265 6 Enel Americas 13,113 7 CMPC 10,188 8 BCI 9,431 9 Latam Airlines 9, Enel Chile 8, Cencosud 8, AntarChile 8, Enel Generacion Chile 6, SM del Banco de Chile 6, Itau CorpBanca 5,234 Total float of US$ 3.0 bn equivalent to the float of the three nearest competitors. 1, EGPL value mark-to-market using current price of Enel Chile shares of CLP 72 per share. 2. Source: Bloomberg as of April 30 th,

35 Closing Remarks Project Elqui paves the way for a new equity story of Enel Chile Renewed Industrial Profile Diversified across all power segments Shareholder interests allignement Undisputed market leader Optimized capital structure Potential stock value upside Higher capitalization and liquidity 26 35

36 Contact us SUSANA REY CATALINA GONZÁLEZ FRANCISCO BASAURI GONZALO JUAREZ Head of IR Enel Chile Head of IR Enel Generación Chile Investor Relations Associate IR New York Office susana.rey@enel.com catalina.gonzalez@enel.com francisco.basauri@enel.com +1 (212) gonzalo.juarezdelarasilla@enel.com ir.enelchile@enel.com For further information, visit our IR site at: 36

37 Forward-Looking Statements This presentation contains statements that could constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These statements appear in a number of places in this presentation and include statements regarding the intent, belief or current expectations of Enel Chile S.A. ( Enel Chile ) and its management with respect to, among other things: (1) Enel Chile's capital investment program; (2) trends affecting Enel Chile's financial condition or results of operations; (3) Enel Chile s dividend policy; (4) the future impact of competition and regulation; (5) political and economic conditions in Chile and in the countries in which Enel Chile or its related companies may operate in the future; (6) any statements preceded by, followed by or that include the words believes, expects, predicts, anticipates, intends, estimates, should, may or similar expressions; and (7) any statement that is not a historical fact. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of various factors. These factors include, but are not limited to, the following: (1) Enel Chile may fail to realize the business growth opportunities, revenue benefits, cost savings and other benefits anticipated from the proposed reorganization described herein (the Reorganization ); (2) Enel Chile may incur unanticipated costs associated with the proposed Reorganization; (3) potential integration of Enel Chile and Enel Green Power Latin America may be difficult and expensive; (4) Enel Chile following the consummation of the proposed Reorganization may not be able to retain key employees or efficiently manage the larger and broader organization, which could negatively affect its operations and financial condition; (5) the proposed Reorganization may be delayed or may not be consummated, negatively affecting the market price of Enel Chile s stock; and (6) the other risk factors discussed in Enel Chile s Annual Report on Form 20-F for the year ended December 31, 2016, under the heading Item 3.D. Risk Factors. There can be no assurance that the proposed Reorganization or any other transaction described in this presentation will in fact be consummated in the matter described or at all. These forward-looking statements are made only as of the date hereof. Enel Chile undertakes no obligation to update these forward-looking statements, except as required by law. 37