AES Gener S.A. Deutsche Bank Andean Conference May 2016

Transcription

1 AES Gener S.A. Deutsche Bank Andean Conference May 2016

2 AES Gener Key investment considerations Highlights Asset map Leading position: Largest energy producer in Chile, and major producer in Colombia, with one of the most efficient plants in Argentina Diversification: One of the most diversified LatAm generator player in terms of geographical footprint and technology High Growth: Secured future growth through fully-financed pipeline and world-class contractors 3 countries 22 operating plants 4 plants under construction 5 technologies 1 international transmission line Bogota Antofagasta 4 Stable cash flows: Largely contracted US dollardenominated revenue streams with built in fuel and inflation protection Santiago 5 Strong capital structure: A successful financing history committed to investment grade rating 6 Solid Performance: Total shareholders return higher than peers. Strong share price appreciation coupled with an attractive dividend yield Coal Hydro Natural Gas Diesel Biomass 1

3 Introduction Key statistics Data as of December 31, 2015, unless otherwise noted 5,222 MW of installed capacity(1) US$4.2bn market capitalization (2) 1,104 MW of fully funded capacity under construction (3) US$1.3bn remaining capex of the U$4bln 2 nd expansion phase fully funded 100% of baseload energy in Chile sold under long-term PPAs US$691mm 2015 EBITDA 12.2 years of avg. remaining PPA life 100% of ownership of the exclusive transmission line between Chile (SING) and Argentina (SADI) 66.7% AES Corp Stake (AFP s 19.4% stake) BBB-/Baa3 credit ratings (S&P, Fitch, Moody s) (1) (2) (3) Includes Guacolda. As of April 25, MW Andes Solar under testing operations 2

4 1 Leading position #1 generation player in Chile 27% 26% 18% 14% 15% Endesa Colbun E-CL Others Major player in Colombia 21% 21% 19% 14% 10% 6% 4% 4% EPM Emgesa Isagen Gecelca Celsia EPSA Others Note: In GWh, data as of December 31,

5 1 Attractive markets with stable regulatory frameworks Chile Ratings System Data Expected Energy Sales Growth (CAGR ) Energy Sales (GWh) Generation by Fuel Type Installed capacity 4,175 MW 4.6 % 12% 3% Generation 18,800 GWh 88% 97% SING S&P AA- Regulated Unregulated Renewable Thermal Moody s Aa3 Fitch A+ Installed capacity 15,925 MW Generation 52,899 GWh 4.0% 30% 70% 50% 5% 45% SIC Regulated Unregulated Hydro Thermal Other Source: Note: Data as of December Energy sales expected growth from CNE (ITD as of April 2016), Excludes TermoAndes which today exclusively sells to Argentina (SADI). 4

6 1 Attractive markets with stable regulatory frameworks (cont d) Colombia and Argentina Ratings System Data Expected Energy Sales Growth (CAGR ) Energy Sales (GWh) Generation by Fuel Type Colombia S&P Moody s Fitch BBB Baa2 BBB Installed capacity 16,221 MW Generation 66,173 GWh 3.2% 33% 67% Regulated Unregulated 31% 1% Hydro Thermal Other 68% S&P B- Moody s Caa1 Fitch CCC Installed capacity 33,353 MW Generation 118,507 GWh 3.5% 40% 13% 47% Large Customers Residential Commercial 64% 6% Hydro Thermal Other 30% Argentina Source: XM, data as of December 2015 for Colombia and Private Consultants for Argentina. 5

7 2 Diversified generation platform EBITDA By electric system SADI 3% Revenues By customers Spot 6% SIN 36% US$ 691mm SIC 39% Total Chile 61% Unregulated 60% US$1.4bn Regulated 34% SING 22% Installed capacity - By fuel type Diesel 7% Biomass 0.2% Solar 0.4% Spot 57% US$0.5bn Contracted 43% Natural gas 20% 5,222 MW Coal 48% Spot 22% Hydro 24% US$0.1bn Contracted 78% Note: As of December 31, SIC: Sistema Interconectado Central. SING: Sistema Interconectado del Norte Grande. 6

8 3 High Growth Phase I: Successful and disciplined growth strategy Since 2007, we have constructed 1,664 MW of new capacity in Chile Installed Capacity (MW) Expansionary Projects Executed (~US$3bn) 1 Angamos I & II 2 BESS Norgener 2 BESS Angamos I 5, Antofagasta 545 MW (Coal) (2 units) 4 Copiapo 12 MW (Battery) 20 MW (Battery) 3,393 3 Los Vientos Guacolda III 4 Guacolda IV Santiago accounting for ~21% of the Chilean growth 132 MW (Diesel) 152 MW (Coal) 152 MW (Coal) 21% 5 Santa Lidia 6 Nuevas Ventanas 7 Ventanas IV 10% 10% 7% 139 MW (Diesel) 272 MW (Coal) 272 MW (Coal) AES Gener Colbun EC-L Endesa 7

9 3 High Growth Phase II: Secured fully-funded pipeline Development checklist US$4bn of fully funded projects under construction (1) Fully funded plan 531 Environmental approvals and social awareness 573 Platform expansion with competitive advantage Angamos Desal 152 5,797 Experienced team 5,072 5,224 Strong partners Secure profitability Investment grade rating /2019 Guacolda V (152 MW) Completed Angamos Desalinization Completed Solar-Andes (21 MW) In commissioning tests Tunjita (20 MW) Progress: 98% Cochrane (532 MW) Progress: 94% Alto Maipo (531 MW) Progress: 24% 8

10 3 High Growth Wide Access to Capital Successful financing for US$7 bn Sources of Financing for the Expansions (1) Amount (US$ million) Equity Cash from Operations 710 Capital Increases 668 Partners 682 Debt Bonds International 300 Local 415 Banks Project Finance 4,225 (1) First and Second Phases: From

11 4 Stable cash flows Long term, proven and strong commercial strategy AES Gener strategy Predictable and stable cash flows EBITDA (US$ mn) Efficient Generation Back-up Generation Long Term Contracts (up to 20 years) Spot Sales Firm Capacity Capacity Charge Revenue ~75% of Expected Generation Medium Term Contracts (1-4 years) EBITDA Margin (%) Remaining Generation Spot and Frequency Regulation Sales 28% 28% 29% 32% Firm Energy (~3,000 GWh) Reliability Charge Revenue Contract Energy Energía Plus Contracts (up to 306 MW) (1) Note: (1) Sales to Spot Resolution 482 Data as of December 31, Currently contracted 220MW. Exports to Argentina through 100% owned international transmission line 10

12 4 Stable cash flows Strong financial performance and value creation Title Adjusted EBITDA & EBITDA margin (US$ mn) 28% 28% $660 $624 $245 $209 32% 29% $671 $691 $246 $263 34% 29% 24% 19% Total Debt and Net Debt / EBITDA (US$ mn) 3.3x 2.8x 3.7x $2,785 $2,734 $2,282 $1,214 $1,487 $1, x $3,375 $1,706 $355 $355 $377 $ Chile Colombia Argentina 14% 9% $1,126 $1,298 $1,520 $1, PF / Non Recourse Debt Corporate Debt Net Debt/EBITDA Total capex Capital allocation (US$ mn) $830 $1,002 $98 (US$ mn) 100.0% 100.0% 94.1% 100.0% $585 $419 $55 $286 $532 $33 $449 $58 $703 $860 $366 $49 $317 $443 $66 $210 $167 $130 $477 $230 $235 $225 $ Construction Maintenance Environmental (1) Capex net of project financing (1) Capex Debt Paydown Dividends Dividend Payout Ratio 11

13 5 Strong capital structure Prudent debt profile xxx US$ Million Total Outstanding as of December 31, 2015 US$3,507mn Average Cost 5.3% Average Life 14.5 years 49% 51% 1,768 Net Debt/EBITDA 4.5x (2.4x excluding non recourse debt) Recourse Debt Non Recourse Debt % denominated in US$ 88.5% at fixed interest rate 12

14 6 Solid Performance Significant value creation for shareholders The largest total return to shareholders since 2010 (1) AES Gener +100% Colbún +42% E-CL +52% Endesa Chile +24% IPSA +9% Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 with an attractive dividend yield (2) and the highest payout ratio among peers (3) 5.9% 4.5% 5.2% 6.3% 98% 50% 41% 30% Endesa Colbun EC-L Source: (1) (2) (3) Bloomberg as of April 25, 2016 In Chilean pesos, including dividends LTM dividends paid / market capitalization end of period Last 3 years average 13

15 Key Significant value creation for shareholders Growth under AES Corp control COMPANY 2015 EBITDA HIGHER THAN IN 2014 $20 million higher than last year Better results in Chile partially offset by lower energy margin in Colombia and Argentina LEADER IN GENERATION IN CHILE Company contributed with 27% of country generation Operational excellence proven by high availability DIVERSIFIED AND LONG TERM CONTRACTED ASSET PORTFOLIO Geographical, technological, customers base and fuel sources Dollarized Long Term PPAs aligned with efficient generation MOVING FORWARD WITH SECOND EXPANSION PHASE Guacolda V and desalinization plant successfully completed in 2015 Generator with more projects under construction in Chile Expansion plan fully funded World class partners: GIP, Mitsubishi, Antofagasta Minerals STRONG AND ENHANCED CAPITAL STRUCTURE Investment grade rating Strong liquidity Extended debt maturity profile 14

16 Annexes

17 Annex I: Next Bid with distribution companies

18 Chile Contracting Profile Long term, dollarized, indexed contracts Efficient portfolio fully aligned with our capacity No relevant regulated contract maturities until 2024 Non/regulated maturities starting gradually in 2021, mainly in the SIC grid 25,000 20,000 AES Gener Contracts by Sector Industrial 8% Contract avg. life: 12 years Distribution 33% GWh / year 15,000 10,000 Mining 59% 5, Source: AES Gener and Guacolda Regulated Non-Regulated Guacolda 17

19 Avg. US$81.3/MWh ENDESA COLBUN AES GENER GUACOLDA CAMPANARIO MONTE REDONDO DIEGO DE ALMAGRO PUYEHUE PANGUIPULLI PUNTILLA E-CL SING Price (US$/MWh) Volume (GWh) Contracts with Distribution Companies Current Regulated Prices & Volumes Price (US$/MWh) Energy (GWh-year) Average price in the system is US$81.3/MWh (does not include change of law ) Average price of the last auction US$79/MWh Source: Systep 18

20 Last Bid Results Disco Bid Award Proponent Parent Company Energy (GW/year) Price per Energy block Existing Energy (GWh/year) Energy from Projects (GWh/year) In Operation Projects Aela Generación S.A. Andes Mainstream Cuel Eolic Park (33 MW) Sarco (238 MW) and Alena (108 MW) eolic parks Abengoa Abengoa Thermosolar CSP + PV (110 CSP PV) Ibereólica Cabo Los Leones Ibereolica Cabo Los Leones Wind Park I (170 MW) SCB II SpA First Solar Amuche Solar Solar Pack Luz del Norte Unit 1 Luz del Norte Units 3 & 4 (36 MW) and Unit 2 (67 MW) (38 MW) Los Libertadores Solar Park (16 MW) La Constitución Solar Park (48 MW) 1, ,025 19

21 Upcoming Bids Schedule Question & Answers December 30, 2015 Tender Call May 29, 2016 Date of proposals July 27, 2016 Award August 17, 2016 Supply January 1, 2021 to December 31, 2041 Awarding Mechanism Leveled price of energy Fuel indexes: Annual Energy Outlook 2015 from EIA Indexed price present Change of Law Future: 2% variation of capital or operation cost of contract execution New Transmission Law should pressure prices Disco Bid Energy [GWh] ( years) BS1+BS2 6,600 6,600 6,600 6,600 6,600 6,600 6,600 6, ( years) BS3-7,150 7,150 7,150 7,150 7,150 7,150 7,150 Total 6,600 13,750 13,750 13,750 13,750 13,750 13,750 13,750 Next Disco Bids The following Disco Bids are expected according to CNE projections: 3,000 since years (Tender call 2016 to bid in 2017) 8,000 since years (Tender call 2017 to bid in 2018) 20

22 Annex II: Angamos & Guacolda

23 Angamos Summary of Historical Financials Revenues (US$ millions) EBITDA and EBITDA Margin (US$ millions) $174 $332 $308 $133 $81 $298 $284 $83 $ $ 72 $ 127 $ 119 $ 112 $ % 80% 60% $137 $198 $225 $214 $ % 38.4% 38.8% 39.9% 38.9% 40% 20% $ Contracted Spot Other EBITDA EBITDA Margin 0% Credit Metrics Capital Expenditures (US$ millions) 14% 12% 10% 8% 6% 4% 2% 0% 12% 12% 11.0x 7.1x 6.5x 6.4x 7.0x 8% 7% 4.1x 1% 3.0x 3.1x 3.0x 2.5x CFO/Debt Debt/EBITDA EBITDA/Finance Expense $112 $26 $5 $11 $

24 Guacolda Summary of Historical Financials Revenues (US$ millions) EBITDA and EBITDA Margin (US$ millions) $613 $554 $515 $ $117 19% $165 30% $129 25% $122 28% 50% 45% 40% 35% 30% 25% 20% 15% 10% % % EBITDA EBITDA margin Capital Expenditures (US$ millions) Credit Metrics $ x 7.0x 7.2x 5.1x 6.2x $98 $125 $ x 2.9x 3.9x Net Debt / EBITDA EBITDA / Finance Expenses 23 0

25 Annex III: Major Assets

26 Diversified Asset Portfolio SIC coal fired plants: 1,644 MW Ventanas Complex 4 Units 884 MW - Coal Located in Valparaíso Region Start of operations: 1964/1977/2010/2013 Back up plants: 816 MW Nueva Renca 379 MW LNG / Diesel Located in Santiago Start of operations: 1997 Other plants: 437 MW Hydro run-of-river plants and renewables: 284 MW Guacolda Complex 5 Units 760 MW - Coal Located in Huasco (Northern part of the SIC) Start of operations: 1995/1996/2009/2010/2015 Alfalfal I 178 MW Hydro Run-of-River Located 50 km from Santiago Start of operations: 1991 Other plants: 106 MW 93 MW Other Hydro Run-of-River 13 MW - Biomass 25

27 Diversified Asset Portfolio SING coal plants: 835 MW Colombia: 1,000 MW Norgener 2 units 277 MW Coal Located in Tocopilla Start of operations: 1995/1997 AES Chivor 8 Units 1,000 MW - Hydro Located in Boyacá, Colombia Start of operations: 1977/1981 Argentina: 643 MW Angamos 2 units 558 MW Coal Located in Mejillones Start of operations: 2011 TermoAndes Combined Cycle (2 Gas Turbines and 1 Steam Turbine) 643 MW Natural Gas Located in Salta, Argentina Start of operations: 1999 Battery storage (BESS) & Solar: 53 MW Battery Storage: 32 MW Norgener and Angamos Start of operations: 2009/2011 Solar: 21 MW Adjacent to Andes Substation Start of operations:

28 Annex IV: Other Financial information

29 CAPEX Program Growth, maintenance and environmental CAPEX Growth CAPEX is related to Alto Maipo project and Cochrane (only in 2016) and is fund through Project Finance Retrofits and other significant Environmental CAPEX will end this year Ongoing Maintenance CAPEX should be in the range of US$100mn to US$120mn per year 1,200 1, Maintenance Expansion Environmental Project Finance 28

30 Strong Mining Electricity Demand Growth Chile s Electricity Demand Growth Electricity demand has grown at 3.9% in the SIC and 4.6% (CAGR ) in the SING grids, in last 10Y According to the CNE, the SIC and SING grids should grow at 4.0% and 4.6% CAGR, respectively in the next 10Y Annual mining production has grown at 1.0% in the SIC and 1.6% (CAGR ) in the SING grids, in last 10Y Independent of mining production, electricity demand has shown sustainable growing due to declining ore grades and increasing energy from desalinization plants SING Copper avg. annual production ('000 MT) Copper price LME (USc/lb) Electricity demand (GWh) SIC Copper avg. annual production ('000 MT) Copper price LME (USc/lb) Electricity demand (GWh) Source: CNE, Cochilco 29

31 EBITDA Variance by Market US$ Million SIC SING SIN SADI % 22% 36% 3% SIC SING SIN SADI 30

32 SIC EBITDA $273 million US$ Million Electricity Revenues of $796 million Regulated Customers Unregulated 58% Customers 35% Spot Sales 7% Key Drivers Revenues from Nueva Renca lease agreement SIC EBITDA +7% Lower spot prices during maintenance Lower volume sales to regulated customers Lower sale prices with distribution companies partially offset by $12 million in FX forwards compensations

33 SING EBITDA $153 million US$ Million Electricity Revenues of $557 million Unregulated Customers 56% 96% Spot Sales 4% Key Drivers Higher demand from unregulated customers SING EBITDA +25% 153 Lower marginal cost reducing spot margin 123 Technical minimum still impacting EBITDA

34 SIN EBITDA $246 million US$ Million Electricity Revenues of $550 million Regulated Customers Spot Sales 43% and Ancillary Services 57% Key Drivers SIN EBITDA Devaluation of the Colombia Peso, partially mitigated by $13m in FX forwards compensations Extreme dry conditions during Q % 246 Higher generation to support the country

35 SADI EBITDA $19 million US$ Million Electricity Revenues of $91 million Unregulated Customers 56% 78% Spot Sales 22% Key Drivers Lower sales under Energía Plus contracts SADI EBITDA -39% Major Maintenance of the Steam Turbine and one Gas Turbine Devaluation of the Argentina Peso Recognition of 482 Tariff Resolution from February

36 Net Income (Attributable to Shareholders of Parent) US$ Million EBITDA FX Impact Equity Earnings Depreciation Net financing costs Income tax Other Minority Interest

37 Cash Flow and Other Sources of Liquidity US$ Million LIQUIDITY: US$ 512 MILLION Cash and Cash Equivalents+ Short Term Time Deposits Undrawn 58% Committed Facilities 42% December 2014 Operating Activities Financing Activities Investing Activities FX Impact December