aes gener corporate presentation€¦ · 5,222 mw ofinstalled capacity(1) us$3.9bn...
TRANSCRIPT
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
− Start of operations: 1997
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
− Start of operations: 1999
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
− Start of operations: 1995/1997
SING coal plants: 835 MW
Diversified Asset Portfolio
Angamos
− 2 units
− 558 MW – Coal
− Located in Mejillones
− Start of operations: 2011
Battery Storage: 32 MW
− Norgener and Angamos
− Start of operations: 2009/2011
Solar: 21 MW
− Adjacent to Andes Substation
− Start of operations: 2016
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
40