Endesa Chile IR Presentation 1H 2016
Organization structure Endesa Chile (before Spin-Off) ITALY Committed Shareholders 61% 60% CHILE 6% 4% 14% Enersis S.A. Chilean Pension Funds ADRs (Citibank N.A.) 16% 60% Retail Institutional Investors CHILE PEHUENCHE, 93% CELTA, 96% GASATACAMA, 98% COLOMBIA PERU ARGENTINA BRAZIL 1 CHILE 1 EMGESA, 27% 1 Recognized as equity method investments. EDEGEL, 62% COSTANERA, 76% EL CHOCÓN, 65% ENEL BRASIL, 37% AMPLA, 17% COELCE, 22% FORTALEZA, 37% CDSA, 37% CIEN, 37% GNL Quintero, 20% Transquillota,48% Electrogas, 43% GNL Chile, 33% 2
Structure as of December 2015 Reorganization highlights Spin-Off of non-chilean assets to Endesa Américas Enel SpA Enel SpA Enel SpA 100% 100% 100% These companies are expected to merge in 2H16. Enel Iberoamérica Enel Iberoamérica Enel Iberoamérica 61% 61% 61% 61% >50% Enersis 99% 60% 99% Enersis Chile 60% 99% Enersis Américas 60% 99% Enersis Chile 60% Enersis Américas Chilectra Endesa Américas Américas Chilectra Endesa Chilectra Chile Endesa Chile Chilectra Américas Endesa Américas Chilectra Chile Endesa Chile ARG BR COL PE CHI ARG BR COL PE Spin - Off 12/18/2015: ESMs approved the Spin-Off. 03/01/2016: Spin-Offs of Enersis, Endesa Chile and Chilectra became effective. 2H16: ESMs call to vote on the merger. As of March 1, 2016, Endesa Chile Spin- Off of Endesa Américas became effective. 3
Organization structure Endesa Chile (after Spin-Off) 61% ITALY Committed Shareholders CHILE 60% 3% 3% 18% Enersis S.A. Chilean Pension Funds ADRs (Citibank N.A.) CHILE 16% 60% Retail Institutional Investors PEHUENCHE, 93% CELTA, 96% GASATACAMA, 98% CHILE 1 GNL Quintero, 20% Transquillota,48% Electrogas, 43% GNL Chile, 33% Average volume traded (MMUS$) 2015 2016 Chilean Stock Exchanges 6.0 4.9 50% NYSE 4.4 5.0 50% Total 10.4 9.9 100% 1 Recognized as equity method investments. 4
Key investment considerations Attractive business in Chile One of the largest electricity generation companies in Chile. Proven track record with more than 70 years of experience Well diversified portfolio of generation assets, including all types of technologies. Hydroelectric assets prevailing in the Chilean Central Interconnected System SIC. Competitive thermal assets to reduce hydrological risks. More than doubled its total installed capacity in the last 20 years. Conservative commercial policy to cope with hydrological risks. Best investment grade in the region. Stable ratings by Credit Rating Agencies (BBB+) Stable regulatory framework to develop reliable long term business. 5
Well diversified generation assets Most relevant player in hydro generation Installed Capacity 6,351 MW 1% Tarapaca D. Almagro Taltal Huasco San Isidro Bocamina Los Molles Santiago Cachapoal Maule Laja Bio Bío 34% 10% 55% HYDRO COAL OIL-GAS NCRE 55% of Endesa Chile s installed capacity corresponds to hydro resources Hydro : 3,456 MW Oil-gas : 2,173 MW Coal : 636 MW NCRE 2 : 87 MW Energy sales 1H16 : 12,139 GWh Energy sales 1H15 : 11,349 GWh Market Share 1 : 36% 1:Calculated based on total sales of the country. 6 2: Non Conventional Renewable Energy.
Balanced commercial policy Leading to revenue stability Physical sales: 12,139 GWh 6% 15% 79% Physical Sales 1H16 GWh Change 1 REGULATED 9,578 11% UNREGULATED 1,883-9% SPOT 678 0% Regulated Customers Unregulated Customers Spot TOTAL 12,139 7% Energy sales by type of customer (Million Ch$) 710,024 784,226 78,827 121,039 117,985 510,158 604,770 61,471 Chile Contracted energy with Regulated Customers (GWh) 18,437 18,130 17,765 16,361 2,541 2,374 15,344 15,030 2,309 1,673 1,762 1,806 2,146 824 872 12,407 1,775 1,795 1,775 812 7,350 6,883 6,469 5,694 5,597 1,811 5,589 4,670 1H 2015 1H 2016 6,873 7,110 7,180 6,745 7,129 6,795 5,114 Regulated Customers Unregulated Customers Spot 2016 2017 2018 2019 2020 2021 2022 Chilectra CGE Chilquinta Saesa 1 Compared with 1H15 7
Financial Highlights Improving results in Chile Consolidated Income Statement 1 1H 2016 1H 2015 Change 3 MM US$ 2 2016 Revenues 848,484 735,567 15% 1,231 Costs (487,511) (528,721) -8% (707) Contribution Margin 360,973 206,846 75% 524 EBITDA 300,099 142,206 111% 435 EBITDA Margin 35.4% 19.3% 83% EBIT 234,078 83,329 181% 340 Net Financial Expenses (6,852) (49,532) -86% (10) Related Company Results 5,471 4,026 36% 8 Taxes (30,863) (14,570) 112% (45) Net Income 281,520 195,606 44% 408 Attributable to shareholders of Endesa Chile 237,448 90,571 162% 344 1 Under IFRS, Endesa Chile has adopted the Chilean Peso as functional currency, comparisons between periods have been only made using Ch$. 2 Referential average exchange rate was 689,4 Ch$/US$ as of June 30, 2016. 3 When comparing 1H016 with 1H2015 8
Healthy debt maturity profile Solid financial ratios and investment grade category (BBB+) Financial Debt Maturity 1 as of June 2016 1,200 1,000 800 600 400 200 0 Total Debt: US$ 1,478 MM 203 8 8 28 78 3 3 3 44 3 13 < 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years and beyond 1,085 Bonds Banks and Other Debt by Type 1 Debt by Currency 1 Others 15% UF + CLP 7% Cash: Committed Credit Lines: Non-Committed Credit Lines: Average life of debt: US$ 157 MM US$ 312MM US$ 34 MM 10 years Bonds 85% US$ 93% 1 Includes arrangements and other consolidation adjustments. International Credit Rating: BBB+ 9
Consolidated Cash Flow Generation (US$ million) 1 Including discontinued operations 700 600 500 110 400 379 157 300 200 179 100 217 151 0 Cash and equivalents June-15 Funds from operations Capex Financing activities & Exchange rate effects Dividend payment ² Cash and equivalents June-16 1. Referential average exchange rate was 689.40 Ch$/US$ as of June 30, 20156 2. Dividend payment considers cash outflows to Enersis and all minorities shareholders. 10
Electricity consumption, per capita (Kwh per year) 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 16,000 CANADA FINLAND 14,000 12,000 10,000 AUSTRALIA UNITED STATES 8,000 6,000 RUSSIA GREECE JAPAN AUSTRIA FRANCE GERMANY 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$) Data source: The World Bank. Chile aims to be in the group of developed countries There is no development without energy. * Average for 2005-2015 period. 11
Evolution of Endesa Chile s total installed capacity Endesa Chile has more than doubled its capacity in the last 20 years 5,611 1% 6,351 1% GasAtacama 781 MW* 6,501 1% 2,513 4,035 28% 4,477 24% 37% 44% 44% Los Cóndores 150 MW 13% 87% 72% 76% 62% 55% 55% 1995 2000 2005 2010 2016 Under construction A well diversified generation matrix incorporating different types of generation technologies (Coal, LNG and NCRE), providing a better position to cope with hydrological risks. 2% increase in installed capacity through projects under construction. * Capacity added in 2014. 12
Projects under construction To support growth of the country Los Cóndores Run-of-the-river, hydroelectric power plant. Located in San Clemente, in Maule region, Chile. 150 MW of installed capacity. Estimated generation of 600 GWh/year. Estimated load factor: 46%. Total CAPEX of US$ 662 million. 33% progress as of June 2016. 13
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 favorable regulatory framework in Chile Solid financials, good cash flow generation and prudent financial management Conservative commercial policy 14
Endesa Chile s Investor Relations Team Susana Rey Head of Investor Relations Enersis Chile (56) 22630 9606 susana.rey@enel.com Catalina Gonzalez Head of Investor Relations Endesa Chile (56) 22630 9603 catalina.gonzalez@enel.com Guillermo Berguecio Investor Relations Analyst Endesa Chile (56) 22630 9506 guillermo.berguecio@enel.com Francisco Basauri Investor Relations Analyst Endesa Chile (56) 22630 9585 francisco.basauri@enel.com Contact us at: ir.endesacl@enel.com 15
EXHIBITS 16
Endesa Chile s corporate history July 1994, Endesa Chile s stock begins to trade on the New York Stock Exchange September 2004, Ralco hydroelectric plant started operations adding 690 MW of installed capacity to Endesa Chile As of December 2015, Endesa Chile and its subsidiaries 192 electricity units with an installed capacity of 15,147 MW December 1943, Endesa Chile is incorporated as a Stock Company and an affiliate of the Corporación de Fomento de la Producción (CORFO) 1943 1987 1994 1999 2004 2005 2015 As of December 2015, ESM held on December 18, 2015, approves the first stage of the Reorganization Proposal (Enersis, Endesa Chile and Chilectra Spin-Off). In 1987,the process of privatization begins, and was completed in 1989 through a series of public offerings May 1999, Enersis S.A. becomes the majority owner of Endesa Chile In 2005, the Company incorporates Endesa Brasil S.A. 17
Installed capacity and energy generation Los Molles: Rapel-Sauzal: Maule: Laja: Installed Capacity: 6,351 MW Market Share*: 31% Total Generation: 8,912 GWh Ralco-Pangue: 18 MW 466 MW 875 MW 940 MW 1,157 MW 54% Hydro 3,456 MW Net Generation 1H16 GWh Change 1 HYDRO 4,537 4% COAL 1,409 97% OIL-GAS 2,921 (17%) NCRE 45 (22%) Total 8,912 7% 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 44% Thermal 2,808 MW 6000 5000 4000 3000 Historical energy generation by type of technology Canela: Canela II: Ojos de Agua: 18 MW 60 MW 9 MW 2% NCRE 1 87 MW 2000 1000 1 : Compared with 1H15 * Based on installed capacity 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2012 2013 2014 2015 2016 Hydro Coal Oil-Gas CHP / Renewables 18
Highlights 1H16 Total energy sales rose by 7% in 1H16 Improved generation mix (+ 159 GWh hydro generation, + 695 GWh coal generation) Chilean EBITDA amounted to 435 million dollars in 1H16, increasing 111% Net income attributable to shareholders rose 162% to 344 million dollars Credit Rating Agencies have reaffirmed Endesa Chile s rate at BBB+ (stable) New companies were constituted on March 1 st, 2016 as a result of the Reorganization 19
Strong financial position (Million Ch$) June 2016 Dec 2015 Chg. Chg % MM US$ 2016 1 Gross Debt 1,012,653 945,119 67,534 7% 1,531 Cash 104,162 37,425 66,737 64% 157 Net Debt 908,491 907,694 797 0% 1,374 Leverage 1.14 1.05 0.09 9% Financial Expenses Coverage 38.62 11.23 27.39 244% ROE (%)* 13.3% 12.4% 0.9% 7% ROA (%)* 7.0% 8.4% (1.4%) (17%) 1 Amounts translated into US$ using the exchange rate as of June (Ch$ 689.4 per US$). *Financial ratio as of June 2016 compared with June 2015. 20
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 the intent, belief or current expectations of Endesa Chile and its management with respect to, among other things: (1) Endesa Chile business plans; (2) Endesa Chile cost-reduction plans; (3) trends affecting Endesa Chile financial condition or results of operations, including market trends in the electricity sector in Chile or elsewhere; (4) supervision and regulation of the electricity sector in Chile or elsewhere; and (5) the future effect of any changes in the laws and regulations applicable to Endesa Chile or its subsidiaries. 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 a decline in the equity capital markets of the United States or Chile, an increase in the market rates of interest in the United States or elsewhere, adverse decisions by government regulators in Chile or elsewhere and other factors described in Endesa Chile Annual Report on Form 20-F. Readers are cautioned not to place undue reliance on those forward-looking statements, which state only as of their dates. Endesa Chile undertakes no obligation to release publicly the result of any revisions to these forward-looking statements. 21