Enel Generación Chile Investor Relations Presentation 9M 2016
Organization structure Enel Generación Chile (after Spin Off) 61% ENEL SpA ITALY Committed Shareholders 60% ENEL CHILE CHILE 3% 3% 18% Enersis S.A. Chilean Pension Funds ADRs (Citibank N.A.) ENEL GENERACIÓN CHILE 16% 60% Retail PEHUENCHE, 93% GASATACAMA, 97% Institutional Investors CHILE 1 Transquillota,48% Electrogas, 43% GNL Chile, 33% Average volume traded (MMUS$) 2015 2016 Chilean Stock Exchanges 6.0 4.9 50% NYSE 4.4 5.0 50% Total 10.4 9.9 100% 1 Recognized as equity method investments. 2
Key investment considerations Attractive business in Chile One of the largest electricity generation companies in Chile. Proven track record with more than 70 years of experience Well diversified portfolio of generation assets, including all types of technologies. Hydroelectric assets prevailing in the Chilean Central Interconnected System SIC. Competitive thermal assets to reduce hydrological risks. Conservative commercial policy to cope with hydrological risks. Best investment grade in the region. Stable ratings by Credit Rating Agencies (BBB+) Stable regulatory framework to develop reliable long term business. 3
Well diversified generation assets Most relevant player in hydro generation Installed Capacity 6,351 MW 1% Tarapaca D. Almagro Taltal Huasco San Isidro Bocamina Los Molles Santiago Cachapoal Maule Laja Bio Bío 34% 10% 55% HYDRO COAL OIL-GAS NCRE 55% of Endesa Chile s installed capacity corresponds to hydro resources 1:Calculated based on total sales of the country. 2: Non Conventional Renewable Energy. Hydro : 3,456 MW Oil-gas : 2,173 MW Coal : 636 MW NCRE 2 : 87 MW Energy sales 9M16 : 17,962 GWh Energy sales 9M15 : 17,311 GWh Market Share 1 : 35% 4
Balanced comercial policy Leading to revenue stability Physical sales: 17,962 GWh Physical Sales 9M16 GWh Change 1 17% 5% REGULATED 14,080 8% UNREGULATED 3,087-1% 78% SPOT 795-31% Regulated Customers Unregulated Customers Spot TOTAL 17,962 4% 1 Compared with 9M15 81,863 Energy sales by type of customer (Million Ch$) 1,159,136 171,726 896,457 1,077,215 173,853 781,810 9M 2015 9M 2016 Regulated Customers Free Customers Spot 118,810 22 20 18 16 14 12 10 8 6 4 2 0 Chile Contracted energy with Regulated and Free Customers (GWh) 2017 2018 2019 2020 2021 2022 2023 2024 2025 Regulated Costumers Free Costumers 5
Financial Highlights Improving results in Chile Consolidated Income Statement 1 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. 6
Healthy debt maturity profile Solid financial ratios and Investment grade rating (BBB+) Financial Debt Maturity 1 as of September 2016 1.200 1.000 800 600 400 200 0 Total Debt: US$ 1,443 MM 153 87 8 3 8 3 28 3 45 3 12 < 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years and beyond 1,089 Bonds Banks and Other Debt by Type 1 Debt by Currency 1 88% 12% Others Bonds 7% 93% US$ UF + CLP Cash: Committed Credit Lines: Average life of debt: International Credit Rating: US$ 167 MM US$ 364MM 10 years BBB+ 1 Includes arrangements and other consolidation adjustments. 7
Consolidated Cash Flow Generation (US$ million) 1 Including discontinued operations 900 800 0 700 83 0 600 500 400 462 420 0 300 200 0 184 100 220 162 0 Cash and equivalents Sept-15 Funds from operations Capex Financing activities & Exchange rate effects Dividend payment ² Cash and equivalents Sept-16 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. 8
Markets with high potential for growth Annual growth of 3.4% in electricity demand in Chile* 18,000 Direct relation between GDP and electricity demand Electricity consumption, per capita (Kwh per year) 16,000 CANADA FINLAND 14,000 UNITED STATES 12,000 AUSTRALIA 10,000 8,000 JAPAN AUSTRIA FRANCE GERMANY 6,000 RUSSIA GREECE SPAIN ITALY UNITED KINGDOM 4,000 CHILE CHINA ARGENTINA BRAZIL 2,000 MEXICO INDIA PERU IRELAND BOLIVIA COLOMBIA 0 0 10,000 20,000 30,000 40,000 50,000 60,000 GDP per capita (current PPP, US$) Data source: The World Bank. Chile aims to be in the group of developed countries There is no development without energy. * Average for 2005-2015 period. 9
Evolution of Endesa Chile s total installed capacity Endesa Chile has more than doubled its capacity in the last 20 years 2,513 13% 87% 4,035 28% 72% 4,477 24% 5,611 1% 6,351 37% 44% 6,501 1% 1% GasAtacama 781 MW* 44% 76% 62% 55% 55% Los Cóndores 150 MW 1995 2000 2005 2010 2016 Under construction A well diversified generation matrix incorporating different types of generation technologies (Coal, LNG and NCRE), providing a better position to cope with hydrological risks. 2% increase in installed capacity through projects under construction. * Capacity added in 2014. 10
Projects under construction To support growth of the country Los Cóndores Run-of-the-river, hydroelectric power plant. Located in San Clemente, in Maule region, Chile. 150 MW of installed capacity. Estimated generation of 600 GWh/year. Estimated load factor: 46%. Total CAPEX of US$ 662 million. 38% progress as of September 2016. Total investment of US$ 233 million as of September 2016. 11
Projects under construction To support growth of the country Bocamina II optimization Coal field domes 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$MM 50 aprox. (north and south domes) Permits Waiting for construction permits approvals for the south dome. Current status North dome is 76% complete. 12
Credit Rating Agencies Recognition Attractive ratings since 2010 Since: Jan. 2010 Apr. 2011 Feb. 2010 Jan. 2010 Apr. 2010 BBB+ Baa2 BBB+ AA (cl) AA Affirmed: Mar. 2016 Dec. 2015 Feb. 2016 Mar. 2016 Jul. 2016 International market Chilean market RATINGS BASED ON: Well diversified and efficient assets Leading market share in Chile Transparent and stable regulatory framework in Chile Solid financials, good cash flow generation and prudent financial management Conservative commercial policy 13
Strategic Plan 2017-2019 EBITDA Evolution 23% 1,108 1.108 Hydrology Drivers Normalization of hydrology since 2018, favor an increase in hydro production, improving margin 898 2016E 2019 Additional capacity Sale price Commercial operations of Los Cóndores starting by the end of 2018, increasing our production in 600 GWh/year approx. Contractual position allows to defend margins when spot prices fall down Accumulated EBITDA 2017 2019: Th US$ 3,095 Assets Mix Diversified generation mix mitigates hydrology risk 14
Strategic Plan 2017-2019 Capex Maintenance and Business Development Total 2017-2019 349 439 248 Mantenimiento Maintenance BD 264 219 158 119 18 85 61 101 Total investment for the period 2017 2019: US$ 687 MM: 2017 2018 2019 Mantenimiento Maintenance BD New Capacity: Los Cóndores. Higher environmental standards. Maintain higher standard of operational efficiency. Operational excellence in the generation capacity 15
Dividend policy Pay-out ratio increasing to 70% in 2020 50% 55% 60% 65% 70% 2016 2017 2018 2019 2020 Enel Generación Chile paid on May 24 th a dividend of Ch$ 11.02 per share 1. 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. 16
Enel Generación Chile Contact us Susana Rey Head of IR Enel Chile +56 2 2630 9606 susana.rey@enel.com Catalina González Head of IR Enel Generación Chile +56 2 2630 9603 catalina.gonzalez@enel.com ir.enelgeneracionchile@enel.com For further information, visit our IR site at: www.enelgeneracion.cl Guillermo Berguecio Analyst of IR Enel Generación Chile +56 2 2630 9506 guillermo.berguecio@enel.com Francisco Basauri Analyst of IR Enel Generación Chile +56 2 2630 9585 francisco.basauri@enel.com 17
Exhibits 18
Highlights 9M16 Total energy sales rose by 4% in 9M16. Higher generation, despite lower hydrology, due greater coal generation (+961 GWh). Chilean EBITDA amounted to 642 million dollars in 9M16, increasing 37%. Net income attributable to shareholders rose 104% to 583 million dollars. 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. 19
Installed capacity and energy generation Los Molles: Rapel-Sauzal: Maule: Laja: Installed Capacity: 6,351 MW Market Share*: 31% Total Generation: 13,389 GWh Ralco-Pangue: 18 MW 466 MW 875 MW 940 MW 1,157 MW 54% Hydro 3,456 MW Net Generation 9M16 GWh Change 1 HYDRO 6,674 4% COAL 2,296 97% OIL-GAS 4,296 (17%) NCRE 73 (22%) Total 13,389 7% GasAtacama Tarapaca 780 MW 182 MW 6000 Historical energy generation by type of technology 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 44% Thermal 2,808 MW 5000 4000 3000 Canela: Canela II: Ojos de Agua: 18 MW 60 MW 9 MW 2% NCRE 1 87 MW 2000 1000 1 : Compared with 9M15 * Based on installed capacity 0 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 20
Strong financial position (Million Ch$) September 2016 Dec 2015 Chg. Chg % MM US$ 2016 1 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 Coverage 18.29 11.23 27.39 63% - ROE (%)* 22.1% 12.7% 9,4% 74% - ROA (%)* 10.9% 8.1% 2.8% 34% - 1 Amounts 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. 21
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 Chile S.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 Enel Generación control or may be difficult to predict. These statements may constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act 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 or to 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 actual results 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 necessarily predictive of actual future events. The projections and other forward-looking statements were based on numerous variables and assumptions that are inherently uncertain. Actual results may 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 general business 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, and the 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 relate to: 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 those expressed in our forward-looking statements, including but not limited to: changes or developments regarding the applicable regulations (which may affect the investment plan of Enel Generación 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 general economic, political, administrative and business conditions; operating hazards and risks; tax risks; loss of senior management and key personnel; insufficiency of insurance coverage or increase 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 the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.