AES GENER CORPORATE PRESENTATION€¦ · 5,222 MW ofinstalled capacity(1) US$3.9bn...

AES GENERCORPORATE PRESENTATION

May 2016 1

KEY INVESTMENT CONSIDERATIONS

Coal Hydro Natural Gas Diesel Biomass

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 LatAmgenerator player in terms of geographical footprint and technology

High Growth: Secured future growth through fully-financed pipeline and world-class contractors

Stable cash flows: Largely contracted US dollar-denominated revenue streams with built in fuel and inflation protection

Strong capital structure: A successful financing history committed to investment grade rating

Solid Performance: Total shareholders return higher than peers’. Strong share price appreciation coupled with an attractive dividend yield

Highlights Asset map

1Bogota

Antofagasta

Santiago

3 countries

22Operating

plants

4plants under

construction

5 Technologies

1

international

transmission

line

2

3

4

5

6

2

5,222 MW of installed capacity(1) US$3.9bn market capitalization(2)

1,104 MWof fully funded capacity under construction(3) US$1.3bn

remaining capex of the U$4bn 2nd

expansion phase fully funded

100%of baseload energy in Chile sold under long-term PPAs US$691mm 2015 EBITDA

12.2years 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)

Introduction Key statistics

Data as of December 31, 2015, unless otherwise noted

(1)

(2)

(3)

Includes Guacolda

As of May 31, 2016

21 MW Andes Solar started commercial operations on May 283

70%

30%

Regulated

Unregulated

Attractive markets with stable regulatory frameworks

SING

4.6 %

4.0 %

12%

88%

Regulated

Unregulated

CHILE

Source:

Note:

CNE data as of February 2016

Energy sales expected growth from CNE (ITD as of April 2016)

Excludes TermoAndes which today exclusively sells to Argentina (SADI)

SIC

39%48%

13%

Hydro

ThermalOther

94%

6%

Thermal

Other

Ratings System Data

Expected Energy Sales

Growth (CAGR 2016-2025)

Energy Sales

(GWh)

Generation by

Fuel Type

S&P AA-

Moody’s Aa3

Fitch A+

Installed capacity

4,008 MW

Generation

18,797 GWh

Installed capacity

15,597 MW

Generation

52,901 GWh

4

Attractive markets with stable regulatory frameworks(cont’d)

3.2 %

3.5 %

67%

33%

Regulated

Unregulated

47%

40%

13%

Large Customers

Residential

Commercial

COLOMBIA AND ARGENTINA

Colombia

Argentina

Source: XM, data as of December 2015 for Colombia

Cammesa and Private Consultants for Argentina. (*) Include mobile plants and commissioning capacity

67%

28% 5%

HydroThermalOther

61%

35% 4%

HydroThermalOther

Ratings System Data

Expected Energy Sales

Growth (CAGR 2016-2025)

Energy Sales

(GWh)

Generation by

Fuel Type

S&P BBB

Moody’s Baa2

Fitch BBB

Installed capacity

16,420 MW

Generation

66,549 GWh

S&P B-

Moody’s B3

Fitch B

Installed capacity

33,494 MW (*)

Generation

135,215 GWh

5

21% 21%19%

10%

6%4% 4%

14%

EPM Emgesa Isagen Gecelca Celsia EPSA Others

Note: In GWh, data as of December 31, 2015

#1 generation player in Chile

Major player in Colombia

27% 26%

18%

14% 15%

Endesa Colbun E-CL Others

Leading position1

6

SIC39%

SING22%

SIN36%

SADI3%

Contracted43%

Spot57%

Regulated34%

Unregulated60%

Spot6%

EBITDA 2015 - By electric system Revenues 2015 - By customers

Installed capacity - By fuel type

Note: As of December 31, 2015

SIC: Sistema Interconectado Central

SING: Sistema Interconectado del Norte Grande

Total Chile61%

US$ 691mm

Coal48%

Hydro24%

Natural gas20%

Diesel7%

Biomass0.2%

5,222 MW

Contracted78%

Spot22%

US$1.4bn

US$0.5bn

US$0.1bn

Diversified generation platform2

7

3,393

5,057

152

Angamos Desal +

13MW

2007 2015

Since 2007, we have constructed 1,829 MW of new capacity in Chile…

BESS Angamos IBESS Norgener2 2

12 MW (Battery) 20 MW (Battery)

Guacolda III Guacolda IV4 4

152 MW (Coal) 152 MW (Coal)

Angamos I & II1

545 MW (Coal)(2 units)

Angamos Desal

Los Vientos3

132 MW (Diesel)

Nuevas Ventanas Ventanas IV6 7Santa Lidia5

139 MW (Diesel) 272 MW (Coal) 272 MW (Coal)

1 2

4

36

7

5

Antofagasta

Santiago

Expansionary Projects Executed (~US$3bn)

...accounting for ~21% of the Chilean growth

21%

10% 10%7%

AES Gener Colbun EC-L Endesa

High GrowthPhase I: Successful and disciplined growth strategy

Copiapo

Guacolda V4

152 MW (Coal)

+54%

3

8Note: Data as of December 31, 2015

+21%Project Progress

Guacolda 5 Completed

Angamos Desal Completed

Solar Andes Completed (1)

Cochrane 97.8%

Tunjita 99.3%

Alto Maipo 28.8%

CURRENT PROJECTS STATUS

Guacolda V – 152 MW

Angamos Desalinization

Tunjita – 20 MW

Solar–Andes – 21 MW

Cochrane – 532 MW

Alto Maipo – 531 MW

$4B Fully Funded

High Growth (Cont.)Phase II: Current expansion

5,222 5,222

5,795

573

531

2015 2016 2018/2019

3

9Note: Data as of December 31, 2015

(1) Completed on May 28, 2016

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 2007 – 2018/19

High Growth (Cont.)Wide Access to Capital

3

10

Stable cash flowsLong term, proven and strong commercial strategy

EBITDA (US$ mn)

EBITDA Margin

AES Gener strategy Predictable and stable cash flows

Efficient GenerationLong Term Contracts(up to 20 years)

Back-up Generation Spot Sales

Firm CapacityCapacity Charge Revenue

~75% ofExpected Generation

Medium Term Contracts(1-4 years)

Remaining GenerationSpot and Frequency Regulation Sales

Firm Energy(~3,000 GWh)

Reliability Charge Revenue

Contract EnergyEnergía Plus Contracts (up to 306 MW)(1)

Sales to Spot Resolution 482

Note:

(1)

Data as of December 31, 2015

Currently contracted 220MW

Exports to Argentina starting in 2016 through 100% owned international transmission line

661

624

671 691 689

2012 2013 2014 2015 1Q16 LTM

28% 28%29%

32% 31%

2012 2013 2014 2015 1Q16 LTM

4

11

Adjusted EBITDA & EBITDA margin

Stable cash flowsStrong financial performance and value creation

(US$ mn)

Total Debt and Net Debt / EBITDA

Total capex Capital allocation

(US$ mn) (US$ mn)

(US$ mn)

(1)

(1) Capex net of project financing.

4

355 355 377 426 436

245 209 263

246 228

660624

672 691 689

28% 28% 29% 32% 31%

0%

5%

10%

15%

20%

25%

30%

0

1,000

2012 2013 2014 2015 1Q16 LTMChile Colombia Argentina Ebitda Margin

286449

703860

63055

33

58

98

95

419

532

830

1,002

744

0

1200

2012 2013 2014 2015 1Q16 LTMConstruction Maintenance Environmental

1,126 1,298 1,520 1,669 1,812

1,156 1,487 1,214

1,706 1,727 2,282

2,785 2,734

3,375 3,5392.8x3.3x

3.7x

4.5x 4.6x

-3.0x

5.5x

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2012 2013 2014 2015 1Q16 LTMPF / Non Recourse Debt Corporate Debt Net Debt / Ebitda

167 225 242 234

317

210 230 235 235 49

66

130

100% 100%94%

100% 100%

0%

110%

(200)

800

2012 2013 2014 2015 1Q16 LTMCapex Dividends Debt Paydown Div. Payout Ratio

12

• Average Cost 5.2%

• Average Life 14 years

• Net Debt/EBITDA 4.6x (2.5x excluding non recourse debt)

97.7% denominated in US$ 88.3% at fixed interest rate

69139 141 172 150

556

159 172 180

1,802

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025-2073

Recourse Debt49%

Non Recourse

Debt51%

Strong capital structure (US$ mn)

Total Outstanding as of March 31, 2016 US$3,539 mn

5

13

Solid PerformanceSignificant value creation for shareholders

The largest total return to shareholders since 2010(1)…

5.9%

4.5%5.2%

6.3%

2012 2013 2014 2015

AES Gener +94%

Colbún +37%

Endesa Chile +23%

E-CL +55%

98%

50%41%

30%

Endesa Colbun EC-L

… and the highest payout ratio among peers(3)… with an attractive dividend yield(2)…

Source:

(1)

(2)

(3)

Bloomberg as of May 31, 2016

In Chilean pesos, including dividends

LTM dividends paid / market capitalization end of period

Last 3 years average

IPSA +9%

6

14

80

100

120

140

160

180

200

220

Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

EBITDA IN LINE WITH PREVIOUS YEAR Lower margin in Colombia offset by better results in Chile and Argentina

LEADER IN GENERATION IN CHILE Company contributed with 28.5% of country generation

Operational excellence proven by high availability

DIVERSIFIED AND CONTRACTED ASSET PORTFOLIO Geographical, technological, customers base and fuel sources

Dollarized Long Term PPAs aligned with efficient generation in Chile

MOVING FORWARD WITH SECOND EXPANSION PHASE Andes Solar and Unit 1 of Cochrane under commissioning tests

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

Key Takeaways

15

ANNEXES

ANNEX I: NEXT BID WITH DISTRIBUTORS

Long term, dollarized, indexed contracts

Distribution

33%

Mining

59%

Industrial

8%

AES Gener Contracts by Sector

Contractavg. life: 12 years

Source: AES Gener and Guacolda

0

5,000

10,000

15,000

20,000

25,000

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

GW

h /

year

Regulated Non-Regulated Guacolda

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

Chile Contracting Profile

18

Source: Systep

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

0

20

40

60

80

100

120

140EN

DESA

CO

LBU

N

AES G

EN

ER

GU

ACO

LD

A

CAM

PAN

ARIO

MO

NTE R

ED

ON

DO

DIE

GO

DE A

LM

AG

RO

PU

YEH

UE

PAN

GU

IPU

LLI

PU

NTIL

LA

E-C

L S

ING

Vo

lum

e (

GW

h)

Pri

ce

(U

S$

/M

Wh

)

Price (US$/MWh) Energy (GWh-year)

Current Regulated Prices & Volumes

Avg. US$81.3/MWh

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

Contracts with Distribution Companies

19

Disco Bid 2015-2 Award

ProponentParent

CompanyEnergy

(GW/year)

Price per Energy block

Existing Energy

(GWh/year)

Energy from Projects

(GWh/year)In Operation Projects

Aela Generación S.A.Andes

Mainstream768 79.32 87 681

Cuel Eolic Park (33 MW)

Sarco (238 MW) and Alena (108 MW) eolic parks

Abengoa Abengoa 39 97.00 - 39Thermosolar CSP + PV (110 CSP + 100 PV)

Ibereólica Cabo Los Leones

Ibereolica 195 89.31 - 195Cabo Los Leones Wind Park I (170 MW)

SCB II SpA First Solar 88 67.64 88 -Luz del Norte Unit 1 (36 MW) and Unit 2 (38 MW)

Luz del Norte Units 3 & 4 (67 MW)

Amuche Solar Solar Pack 110 64.85 - 110

Los Libertadores Solar Park (16 MW)La Constitución Solar Park (48 MW)

1,200 79.34 175 1,025

Last Bid Results

20

Schedule 2015-01

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

Disco Bid Energy [GWh] 2021 2022 2023 2024 2025 2026 2027 2028 +

2015-01 (2021+20 years) BS1+BS2 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280

2015-01 (2022+20 years) BS3 - 7,150 7,150 7,150 7,150 7,150 7,150 7,150

Total 5,280 12,430 12,430 12,430 12,430 12,430 12,430 12,430

Awarding Mechanism

Leveled price of energy

Fuel indexes: Annual Energy Outlook 2015 from EIA

Indexed price present value @10%

Change of Law

Future: 2% variation of capital or operation cost of contract execution

New Transmission Law should pressure prices

Next Disco Bids

The following Disco Bids are expected according to CNE projections:

2,500 since 2023+20 years (Tender call 2016 to bid in 2017)

7,000 since 2024+20 years (Tender call 2017 to bid in 2018)

Upcoming Bids

21

ANNEX II: ANGAMOS & GUACOLDA

AngamosSummary of Historical Financials

23

Revenues EBITDA and EBITDA Margin

Credit Metrics Capital Expenditures

(US$ mn) (US$ mn)

(US$ mn)

198 225 214 238 241

133 81 83 44 48

332308 298 284 292

0

400

2012 2013 2014 2015 1Q16 LTMContracted Spot Other

127119

112 111117

38% 39% 38% 39% 40%

0%

45%

0

180

2012 2013 2014 2015 1Q16 LTMEbitda Ebitda Margin

26

5

11

16

8

0

30

2012 2013 2014 2015 1Q16 LTM

6.5x 5.8x 6.6x

6.8x

6.2x

3.0x 3.1x 3.0x

2.5x 2.6x

1.2x

4.2x

0.0x

20.0x

2012 2013 2014 2015 1Q16 LTMNet Debt / Ebitda Ebitda / Finance Expenses

GuacoldaSummary of Historical Financials

Revenues EBITDA and EBITDA Margin

Capital ExpendituresCredit Metrics

(US$ mn) (US$ mn)

(US$ mn)

613

554515

438395

0

700

2012 2013 2014 2015 1Q16 LTM

117

165

129122 112

19%

30%

25%28% 28%

0%

32%

0

250

2012 2013 2014 2015 1Q16 LTMEbitda Ebitda Margin

24

98125

342

115102

0

400

2012 2013 2014 2015 1Q16 LTM

4.6x

2.9x

4.8x

6.3x6.8x

3.7x

7.0x 7.3x

3.9x3.3x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

2012 2013 2014 2015 1Q16 LTMNet Debt / Ebitda Ebitda / Finance Expenses

ANNEX III: MAJOR ASSETS25

Diversified Asset Portfolio

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

Ventanas Complex

− 4 Units

− 884 MW - Coal

− Located in Valparaíso Region

− Start of operations: 1964/1977/2010/2013

Nueva Renca

− 379 MW – LNG / Diesel

− Located in Santiago


Other plants: 437 MW

SIC coal – fired plants: 1,644 MW Back – up plants: 816 MW

Hydro run-of-river plants and renewables: 284 MW

26

TermoAndes

− Combined Cycle (2 Gas Turbines and 1 Steam Turbine)

− 643 MW – Natural Gas

− Located in Salta, Argentina


Argentina: 643 MW

Battery storage (BESS) & Solar: 53 MW

AES Chivor

− 8 Units

− 1,000 MW - Hydro

− Located in Boyacá, Colombia

− Start of operations: 1977/1981

Colombia: 1,000 MW

Norgener

− 2 units

− 277 MW – Coal

− Located in Tocopilla


SING coal plants: 835 MW

Diversified Asset Portfolio

Angamos

− 2 units

− 558 MW – Coal

− Located in Mejillones


Battery Storage: 32 MW

− Norgener and Angamos


Solar: 21 MW

− Adjacent to Andes Substation


27

ANNEX IV: OTHER FINANCIAL INFORMATION28

Alto Maipo project and Cochrane (only in 2016) is fund through Project Finance

Environmental CAPEX (~US$60mn in 2016)

Ongoing Maintenance CAPEX should be in the range of US$100mn to US$120mn per year

CAPEX ProgramGrowth, maintenance and environmental

29

-

100

200

300

400

500

600

700

800

900

1,000

2015 2016F 2017F 2018F

Maintenance Expansion Environmental Project Finance Debt

Chile’s Electricity Demand Growth

Source: CNE, Cochilco

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 inthe next 10Y

Annual mining production has grown at 1.0% in the SIC and 1.6% (CAGR ) in the SING grids, in last10Y

Independent of mining production, electricity demand has shown sustainable growing due todeclining ore grades and increasing energy from desalinization plants

Strong Mining Electricity Demand Growth

30

1000

1150

1300

1450

1600

1750

0

100

200

300

400

500

2006 2008 2010 2012 2014 2016

SING

Copper avg. annual production ('000 MT) Copper price LME (USc/lb)

Electricity demand (GWh)

3000

3350

3700

4050

4400

4750

0

100

200

300

400

500

2005 2007 2009 2011 2013 2015

SIC

Copper avg. annual production ('000 MT) Copper price LME (USc/lb)

Electricity demand (GWh)

ANNEX V: FINANCIAL REVIEW31

SIC

53%

SING

35%

SIN

9%

SADI

3%

Key Metrics (US$ mn) 1Q 2016 1Q 2015 Var.

Operating Revenues 556 533 4%

Gross Profit 121 131 (7%)

Total EBITDA 158 160 (1%)

EBITDA margin 28% 30%

Net Income 41 51 (20%)

EBITDA by Market

Consolidated Financials

SIC

54%

SING

26%

SIN

20%

1Q 2016 1Q 2015

Note: Numbers rounded for the purpose of the presentation32

EBITDA Variation by Market (US$ mn)

160158

13

63

18

1Q15 SIC SING SIN SADI 1Q16

33

87 84

1Q15 1Q16

Electricity Revenues BreakdownEBITDA

-3%

SIC – EBITDA US$84 mn

Lower margin at Nueva Renca

Drop in Spot Sales, mainly due to decrease in prices

Lower Demand and prices from regulated contracts

Increase in unregulated customers demand

Regulated customer

57%

Unregulated customer

31%

Spot sales12%

US$209 mn

34

Electricity Revenues Breakdown

42

55

1Q15 1Q16

EBITDA

+31%

SING – EBITDA US$55 mn

Higher demand and better PPAs terms

Lower system over costs

Electricity exports to Argentina

Unregulated customer

94%

Unregulated - SADI

0%

Spot sales6%

Spot sales - SADI

0%

US$146 mn

35

SIN – EBITDA US$13 mn

Lower reservoir level at Chivor at the beginning of the year

Higher net spot purchases

Lower maintenance expenses

EBITDA Electricity Revenues Breakdown

31

13

1Q15 1Q16

-57%

Regulated customer

34%

Spot sales66% US$116 mn

36

SADI –EBITDA US$5 mn

Higher availability of the plant

Generation Tariff Increase

Lower energy sales under Energía Plus program

EBITDA Electricity Revenues Breakdown

-1

5

1Q15 1Q16

-

Unregulated64%

Spot sales36%

US$25 mn

37

Net Income (US$ mn)(Attributable to AES Gener)

1Q15 EBITDA FX Impact EquityEarnings

Depreciation NetFinancing

Cost

Other IncomeTax

MinorityInterest

1Q16

51

41

2

3

6

3

11

28

38

LIQUIDITY: US$495mn

Cash and Cash

equivalents

54%Short

term time deposits

0%

Undrawn commited facilities

46%

Cash Flow (US$ mn)

267 266

98 14

3

116

Dec. 2015 OperatingActivities

FinancingActivities

InvestingActivities

FX Impact 1Q16

39

AES GENER CORPORATE PRESENTATION€¦ · 5,222 MW ofinstalled capacity(1) US$3.9bn...

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Transcript of AES GENER CORPORATE PRESENTATION€¦ · 5,222 MW ofinstalled capacity(1) US$3.9bn...