Endesa Chile IR Presentation 1Q 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% 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% 1 Recognized as equity method investments. 2
Structure as of December 2015 Reorganization highlights Spin-off of Latam 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-off of Enersis, Endesa Chile and Chilectra becomes effective. 2H16: ESMs call to vote merger. As of March 1 st, Endesa Chile and Endesa Americas spin-off became effective. 3
Organization structure Endesa Chile (after Spin-off) ITALY 61% 60% CHILE Committed Shareholders CHILE PEHUENCHE, 93% CELTA, 96% GASATACAMA, 98% 6% 4% 16% 14% 60% Enersis S.A. Chilean Pension Funds ADRs (Citibank N.A.) Retail Institutional Investors CHILE 1 GNL Quintero, 20% Transquillota,48% Electrogas, 43% GNL Chile, 33% 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. Hydrological assets predominating in the Chilean Central Interconnected System SIC. Competitive thermal assets to reduce hydrological risks. More than doubled its 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 risk agencies (BBB+) Stable regulatory framework to develop reliable long term business. 5
Well diversified generation assets Most relevant player in hydro 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 1Q16 : 6,025 GWh Energy sales 1Q15 : 5,716 GWh Market Share 1 : 35% 1:Calculated based on total sales of the country. 6 2: Non Conventional Renewable Energy.
Balanced commercial policy Leading to revenue stability Physical sales: 6,025 GWh 15% 5% Physical Sales 1Q16 GWh Change 1 REGULATED 4,850 11% UNREGULATED 882-18% 80% SPOT 293 5% Regulated Customers Unregulated Customers Spot TOTAL 6,025 5% Historical revenues by type of customer (Billion Ch$) Chile Contracted energy with Regulated Customers (GWh) 250 3 46 201 355 34 60 261 390 25 54 311 1Q 2014 1Q 2015 1Q 2016 Regulated Unregulated Spot Customers Customers 1 Compared with FY14 18,437 18,130 17,765 2,541 2,374 2,309 1,673 1,762 1,806 7,350 6,883 6,469 16,361 15,344 15,030 2,146 824 872 1,775 1,795 1,775 5,694 5,597 5,589 6,873 7,110 7,180 6,745 7,129 6,795 812 1,811 4,670 5,114 2016 2017 2018 2019 2020 2021 2022 Chilectra CGE Chilquinta Saesa 12,407 7
Financial Highlights Improving results in Chile Ch$ million 1 1Q 2016 1Q 2015 Change 3 MM US$ 2 1Q 2016 Revenues 415,283 369,804 12% 592 Costs (230,478) (268,740) -14% (329) Contribution Margin 184,805 101,064 83% 263 EBITDA 157,461 69,530 126% 224 EBIT 125,041 40,144 211% 178 Net Financial Expenses 934 (28,121) -103% 1 Related Company Results 2,452 1,175 109% 3 Taxes (13,436) (5,067) 165% (19) Net Income 194,646 86,924 124% 277 Attributable to shareholders of Endesa Chile 152,568 39,105 290% 218 1 Under IFRS, Endesa Chile has adopted the Chilean Peso as functional currency, comparisons between periods have been only made using Ch$. 2 Referential average exchange rate was 701,43 Ch$/US$ as of March 31, 2016. 3 When comparing 1Q2016 with 1Q2015 8
Healthy debt maturity profile Solid financial ratios and investment grade category (BBB+) 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 0 Financial Debt Maturity 1 as of March 2016 Total Debt: US$ 1,431 MM 153 87 8 3 8 3 8 3 43 3 14 < 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years and beyond 1,098 Bonds Banks and Other Debt by Type 1 Debt by Currency 1 Others 12% UF + CLP 7% Cash: Committed Credit Lines: Non-Committed Credit Lines: Average life of debt: US$ 180 MM US$ 360MM US$ 168 MM 11.7 year Bonds 88% US$ 93% 1 Includes arrangements and other consolidation adjustments. International Credit Rating: BBB+ 9
Consolidated Cash Flow Generation (US$million) 1 Including discontinued operations 450 400 350 300 183 (99) 250 (73) 200 (44) 150 100 213 172 50 0 Cash and equivalents March-15 Funds from operations Capex Financing activities & Exchange rate effects Dividend payment Cash and equivalents March-16 1. Referential average exchange rate was 701.43 Ch$/US$ as of March 31, 20156 2. Dividend payment considers cash outflows to Enersis and all minorities shareholders. 3. Funds from assets disposal includes sale of Tunel El Melon. 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$) Data source: The World Bank. Chile aims to be in the group of developed countries There is no development without energy. * Average for 2005-2015 period. 11
Historical evolution of Endesa Chile s installed capacity Endesa Chile has more than doubled its capacity in the last 20 years 5,611 1% 6,351 1% GasAtacama 781 MW* 6,501 1% 2,513 4,035 28% 4,477 24% 37% 44% 44% Los Cóndores 150 MW 13% 87% 72% 76% 62% 55% 55% 1995 2000 2005 2010 2016 Under construction A well diversified generation matrix incorporating all types of generation technologies (Coal, LNG and NCRE), providing a better position to cope with the hydrologic risk 2% increase in installed capacity through projects under construction. * Capacity added in 2014. 12
Projects under construction To support growth of the country Los Cóndores Hydro power plant, run of the river. Located in San Clemente, in Maule region, Chile. 150 MW of installed capacity. Estimated generation of 600 GWh/year. Estimated load factor: 46%. Total CAPEX of US$ 662 million. 29% progress as of March, 2016. 13
Credit Risk Agencies Recognition Attractive ratings since 2010 Since: Jan. 2010 Apr. 2011 Feb. 2010 Jan. 2010 Apr. 2010 BBB+ Baa2 BBB+ AA (cl) AA Affirmed: Jun. 2015 Dec. 2015 Nov. 2015 Jun. 2015 Dec. 2015 International market Chilean market RATINGS BASED UPON: Well diversified and efficient assets Leading market share in the four countries where we operate 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
Highlights 1Q16 Total energy sales rose by 5% in 1Q16 Improved generation mix (+ 150 GWh hydro generation, + 497 GWh coal generation) Chilean EBITDA amounted to 224 million dollars in 1Q16, increasing 126% Net income attributable to shareholders rose 290% to 218 million dollars Credit Rating Agencies have reaffirmed Endesa Chile in BBB+ (stable) New companies were constituted on March 1 st, 2016 18
1Q16 Results ENDESA CHILE Million US$ 1Q16 1Q15 Chg % Revenues 592 533 12% EBITDA 224 99 126% EBITDA MARGIN 38% 19% 49.6% Physical Sales (GWh) 6,025 5,716 5% 19
Installed capacity and energy generation Los Molles: Rapel-Sauzal: Maule: Laja: Installed Capacity: 6,351 MW Market Share*: 31% Total Generation: 4,573 GWh Ralco-Pangue: 18 MW 466 MW 875 MW 940 MW 1,157 MW 54% Hydro 3,456 MW Net Generation 1Q16 Gwh Change 1 HYDRO 2,460 7% COAL 738 206% OIL-GAS 1,336 (21%) NCRE 39 (2%) Total 4,573 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 44% Thermal 2,808 MW 6000 5000 4000 Historical energy generation by type of technology TG Quintero: 257 MW 3000 Canela: Canela II: Ojos de Agua: 18 MW 60 MW 9 MW 2% NCRE 1 87 MW 2000 1000 1 : Compared with 1Q15 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q * Based on installed capacity 2012 2013 2014 2015 2016 CHP / Renewables Oil-Gas Coal Hydro 20
Strong financial position (Million Ch$) March 2016 Dec 2015 Chg. Chg % MM US$ 2016 1 Gross Debt 997.332 945.119 52.213 5% 1.404 Cash 120.384 37.425 82.959 69% 170 Net Debt 876.948 907.694 (30.746) (4%) 1.235 Leverage 1.22x 1.05x 0.17x 16% Financial Expenses Coverage (289)X 4.51x - (102%) ROE (%) 11.8% 14.7% (2.9x) (19.7%) ROA (%) 7.4% 8.7% (1.3x) (14.9%) 1 Amounts translated into US$ using the exchange rate as of March (Ch$ 669.8 per US$). *Financial ratio as of March 2016. 21
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. 22