ENGIE Energía Perú Results as of March 2018
2018 Q1 HIGHLIGHTS Total energy generation (SEIN) grew 1.7% in Q1 2018 compared to Q1 2017. As of March, EEP maintained a leading position in the sector, accounting for 21% of the total capacity and 6% of the total energy generation of the system Q1 2018 EBITDA reached 71.5MUSD, increasing 42% compared to Q4 2017 as a result of strong commercial efforts to re-contract available efficient capacity. Q1 2018 EBITDA decreased 34% compared to Q1 2017. The decrease is mainly explained by the end of SPCC PPA and lower re-contracting prices given market conditions Q1 2018 Net Result reached 30.0MUSD, increasing significantly compared to Q4 2017 (1MUSD) and impacted by Lower EBITDA and higher D&A against Q1 2017 On March 31 st, EEP announced the commercial operation of Intipampa solar project, EEP s first step in non conventional renewable energy. This solar plant is located in Moquegua and reached a total installed capacity of 40.5MW In March 2018, EEP signed a 30-year PPA for 35MW starting in 2022 and a 37-year agreement with Anglo American Quellaveco to share existing jetty facilities In February, LNG pipeline event caused a restriction in the availability of natural gas. As a consequence, diesel plants were dispatched to satisfy electricity demand and marginal cost increased Shareholders approved the distribution of 48.9MUSD in dividends related to FY 2017 (38% payout ratio) 2
MAIN FINANCIAL RESULTS Q1 2018 EBITDA Net Result EBITDA MUSD Net Result MUSD +42% 108.1 71.5 50.3 2017 Q1 2017 Q4 2018 Q1 55.0 1.0 30.0 2017 Q1 2017 Q4 2018 Q1 Total Debt MUSD Total Debt Net Debt / EBITDA (12m) Net Debt / EBITDA x -5% +4% 837.1 799.1 2.5 2.6 2017 Q4 2018 Q1 2017 Q4 2018 Q1 3
ENERGY PRODUCTION AND BALANCE Q1 2018 Lower thermal generation in Q1 2018 and net buyer position in the spot market GWh 2016 2017 Q1 2017 Q4 2017 Q1 2018 Q1 2018 vs Q4 2017 Q1 2018 vs Q1 2017 Yuncán HPP 760 8% 889 11% 276 12% 210 9% 274 13% 30% -1% Quitaracsa HPP 484 5% 531 6% 203 9% 101 4% 189 9% 87% -7% Chilca1 CCGT 5,617 63% 5,303 63% 1,135 49% 1,439 61% 222 11% -85% -80% Chilca2 220 2% 308 4% 10 0% 155 7% 13 1% -91% 31% Ilo21 (Coal) 773 9% 674 8% 227 10% 23 1% 20 1% -12% -91% Ilo1 (Diesel) 210 2% 86 1% 16 1% 0 0% 0 0% n.a. -100% Ilo31 (Cold Reserve) 100 1% 7 0% 1 0% 0 0% 1 0% 467% 34% NEPI 18 0% 9 0% 1 0% 1 0% 6 0% 327% 404% Intipampa 0 0% 0 0% 0 0% 0 0% 6 0% n.a. 0% Imports (Ecuador) 21 0% 0 0% 0 0% 0 0% 0 0% n.a. 0% Auxiliaries -289-3% -185-2% -32-1% -34-1% 2 0% -106% -106% NET GENERATION 7,914 88% 7,624 91% 1,838 79% 1,897 81% 735 35% -61% -60% COES: NET 1,061 12% 734 9% 503 21% -63-3% 1,381 65% -2309% 175% CLIENTS DEMAND 8,976 100% 8,358 100% 2,340 100% 1,834 78% 2,116 100% 15% -10% 4
MAIN RESULTS Q1 18 (MUSD) Q1 2018 Q4 2017 Q1 2017 Q1 2018 vs Q4 2017 Q1 2018 vs Q1 2017 FY 2017 FY 2016 FY Revenues 163 139 201 18% -19% 683 748-9% EBITDA 71 50 108 42% -34% 325 309 5% Net Result 30 1 55 2967% -45% 130 132-1% Recurrent EBITDA* 71 53 108 35% -34% 298 330-10% Net Recurrent Result* 30 3 55 953% -45% 111 169-35% Total Debt 799 837 963-5% -17% 837 1,009-17% Net Debt 763 800 904-5% -16% 800 981-18% Net Generation GWh 735 1,897 1,838-61% -60% 7,624 7,914-4% Clients Demand GWh 2,116 1,834 2,340 15% -10% 8,358 8,976-7% Net Debt / EBITDA 12m 2.6 2.5 2.8 7% -6% 2.5 3.2-22% * Does not include commercial penalty fees and impairment of assets Q1 2018 EBITDA increased 42% compared to Q4 2017 as a result of a commercial effort to re-contract available capacity after Las Bambas termination contract in 2017 Q1 2018 EBITDA decreased -34% compared to Q1 2017 to 71MUSD, mainly explained by the end of SPCC PPA contract which was partially offset by new PPAs. Q1 2018 Net result was affected by lower EBITDA and higher D&A compared to Q1 2017 Total debt decreased by 4.5% from December 2017, following the expected amortization schedule, and totalized 799MUSD 5
EBITDA: Q1 2018 vs. Q4 2017 +21.1 MUSD Commercial effort driving EBITDA improvement + 42% +10.8 +71.5 +52.7 +50.3-4.4 +8.7 +4.6 +1.5 LNG pipeline event caused marginal cost increase Jetty contract, mainly one shot initial payment Services to SPCC Mainly due to impairments in Q4 2017 EBITDA Q4 2016 EBITDA Q4 2017 CMg Commercial Contracts Other Income Intipampa Others EBITDA Q1 2018 6
NET RESULT: Q1 2018 vs. Q4 2017 +29.0 MUSD +4.9 +4.8 +1.2-2.9 +30.0 +21.1 +1.0 Methodology adjustment in 2017 Lower outstanding debt Interest on tax adjustment in 2017-5.9 Net Result Q4 2016 Net Result Q4 2017 EBITDA D&A Net Financial Expenses FX Tax Net Result Q1 2018 7
EBITDA: Q1 2018 vs. Q1 2017-36.6 MUSD Expected PPA maturities and lower prices due to unbalanced market explained margin contraction - 34% +94.2 +108.1-6.3-37.1 +5.3 +1.5 +71.5 LNG pipeline event SPCC PPA maturity Lower prices as a result of unbalanced market Jetty contract mainly one shot initial payment Services to SPCC EBITDA Q1 2016 EBITDA Q1 2017 CMg Commercial Contracts Other Income Intipampa EBITDA Q1 2018 8
NET RESULT: Q1 2018 vs. Q1 2017-25.0 MUSD - 45% +53.0 +55.0-36.6 Methodology adjustment Lower outstanding debt +13.7 +30.0-1.7 +2.0-2.4 Net Result Q1 2016 Net Result Q1 2017 EBITDA D&A Net Financial Expenses FX Tax Net Result Q1 2018 9
MUSD STOCK PRICE PERFORMANCE Higher regulatory and political uncertainty driving Q1 2018 price decrease with low liquidity levels Net Result Dividends Market Cap Financial Market Data March 2018 2,500 250 Number of shares issued 601,307,011 2,000 1,500 1,000 500 467 663 1,020 793 839 1,602 1,187 1,759 2,005 2,075 1,427 1,611 1,351 1,285 200 150 100 50 MUSD Share price (PEN) 31/03/2018 6.89 VWAP (3m) (PEN) 6.87 52 week high (PEN) 8.50 52 week low (PEN) 6.50 Market Cap (MUSD) 1,285 Enterprise Value (EV) (MUSD) 2,048 EV / EBITDA 7.1x 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 0 Price to Book Value (P/B) 1.2x Price / Earnings ratio (P/E) 12.3x Market Cap changes in USD is affected by share price movements and FX changes In Q1 2018, the share price decreased from 7.29 to 6.89 S/./sh; (-5.5%); while the exchange rate appreciated slightly against the USD (3.224 PEN/USD). The share price decreased in a context of higher volatility due to uncertainty regarding regulatory issues related with the natural gas price declaration mechanism and political uncertainties. Daily avg. trading volume (mm sh) 0.03 EV: Market Cap + Net Debt P/B: Market Cap / Book Value of Equity *Market Cap variation in 2015 is mainly explained by portfolio rebalance of an institutional investor and subsequent potential reclassification of Peru from Emerging Markets ( EM ) to Frontier market due to its low liquidity Source: SMV, Lima Stock Exchange 10
PEN / Share EQUITY ANALYST VIEW 9.0 8.5 8.0 Consensus 25% Upside 7.5 7.0 Price as of March 31rst 6.89 2018 Mar 6.5 6.0 Sell Mantain Buy Credicorp Larrain Kallpa Inteligo Consensus Target price 8.4 8.2 8.9 8.8 8.6 Recommendation Underperform Buy Maintain Buy Date October 2017 February 2018 January 2018 January 2018 11
DIVIDEND PAYMENTS: 680 MUSD since 2004 Dividend Policy: Minimum payout ratio of 30% 100 90 85 Extraordinary Annual 80 70 60 50 40 30 20 10 0 34 77 41 34 36 42 42 71 15 24 32 43 42 59 31 28 24 25 11 13 13 12 2nd Half 31 16 15 38 18 1rst Half 42 22 20 20 54 30 24 49 49 10 10 9 Payout ratio of 38% in 2017 31 33 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 12
THANKS This presentation may contain certain forward-looking statements and information relating to ENGIE Energía Perú S.A. ( Engie Energía Perú or the Company ) that reflect the current views and/or expectations of the Company and its management with respect to its business plan. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like believe, anticipate, expect, envisage, will likely result, or any other words or phrases of similar meaning. Such statements are subject to a number of significant risks, uncertainties and assumptions. We caution that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this presentation. In any event, neither the Company nor any of its affiliates, directors, officers, agents or employees shall be liable before any third party (including investors) for any investment or business decision made or action taken in reliance on the information and statements contained in this presentation or for any consequential, special or similar damages. The Company does not intend to provide eventual holders of shares with any revised forward-looking statements of analysis of the differences between any forward-looking statements and actual results. There can be no assurance that the estimates or the underlying assumptions will be realized and that actual results of operations or future events will not be materially different from such estimates. This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without ENGIE Energía Perú prior written consent. FOR MORE INFORMATION ABOUT ENGIE ENERGIA PERU Ticker: ENGIEC1 +51 1 616 79 79 investor.relations@pe.engie.com Av. República de Panamá 3490, Lima 27, Peru www.engie.pe Rocío Vásquez, Head of Corporate Finance & Investor Relations rocio.vasquez@pe.engie.com Marcelo Soares, Chief Financial Officer marcelo.soares@pe.engie.com 13
APPENDIX ENGIE Energia Peru overview Largest private electricity company in Peru in terms of capacity 2,497 MW of installed capacity & ~7,600 GWh of annual generation Quitaracsa Hydro 112MW Yuncan Hydro 136MW Low Co2 generation base Diversified & decentralized portfolio of generation sources Chilca Complex ChilcaUno - 852MW - Natural Gas ChilcaDos - 111MW- Natural Gas 21 years operating in the country & listed since 2005 508 employees Ilo Complex Nodo - 610MW - Dual Fuel Ilo31 (Cold Reserve) - 500MW - Dual Fuel Ilo21-135MW - Coal Financial discipline to support future growth ambitions, AAA local rating Intipampa Solar 41MW Sponsored by a global leader, ENGIE S.A.* * www.engie.com 14