ENGIE Energía Perú · • As of September 2016, the Company reported 528 institutional and...
Transcript of ENGIE Energía Perú · • As of September 2016, the Company reported 528 institutional and...
ENGIE Energía Perú
September 2016
Highlights Q3´16: EEP Total Installed Capacity reached 2,638 MW
2
� September 30th EEP signed an EPC contract with Solairedirect for the construction of its firstsolar project “Intipampa” (40MW). EEP won this project on the auction launched by the Peruviangovernment on February 2016. Under the concession agreement with the Government of Peru, EEPwill supply 108.404 GWh to the Peruvian system for 20 years. Expected Commercial OperationDate: Q4 2017
� October 21rst EEP announced the commercial operation of Nodo Energético project . This powerplant (610MW) is located in Moquegua (next to our existing operations in the south) and is a dualfuel (diesel / gas) plant. It is expected to operate with diesel as a back up plant for the system untilthe gas pipe to the south project is completed. The project started operations 5 months ahead of thescheduled contractual date and total investment cost was below the announced budget.
� EBITDA (9m) increase by 2% with respect to 2015 figures and totalized 256MUSD. The increasewas mainly explained by higher generation and lower expenses that was partially offset by higherfuel costs. Net Result totalized 137MUSD , 3% less than in 2015, mainly as a consequence ofhigher depreciation and interest expenses.
� In 2016 approx. 975MW of new hydro capacity entered into oper ation: Cerro del Aguila, a 514MW hydro power plant started operations in August 2016 & Chaglla, a 461MW hydro power plantstarted operations in September 2016.
AGENDA
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Section 1 Peruvian Energy Industry
Section 2 Company Overview
Section 3 Strategy
Section 4 Financial Results
Section 5 Capital Structure
PERUVIAN ELECTRICITY MARKET
4
Market Growth Clients - MW
Installed ~ 5%
Capacity Average
9,614 Annual
MW (2010-2015)
DemandSEIN6,275MW
Production – GWh Market Share %
Ilo21 CoalIlo31 OCGTNodo EnergéticoIntipampa Solar
Ilo1
ChilcaUno CCGTChilcaPlus CCGT
Yuncán HPP
Quitaracsa HPP
2,638 MW IN OPERATION77 MW IN CONSTRUCTION
46%
54%
Free clientsRegulated clients
53%46%
1% 0%
Renewable Natural gasCoal Fuel oil
16%
19%
21%
11%
33%
Peruvian State ENGIEEdegel KallpaOthers
Market data source: ENGIE as of December 2015CCGT: Combined Cycle Gas Turbines | OCGT: Open Cycle Gas Turbines | HPP: Hydro Power Plant.
STRUCTURE & ACTORS
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COES SEIN
Dispatch
Ranking
Administrative Expenses (« SG&A »)
Fuel CostOperational Cost (« Opex »)Capex
Energy – Capacity“Dispatched”
Energy – CapacityConsumed by EnerSur
Clients
CVC/CVNC
CVC: Fuel Variable CostCVNC: Non-Fuel Variable Cost
ELECTRICITY MARKET CONCEPTS
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Generation
� Centralized dispatch
� Spot Price: Zonal, cost-based, calculated every 15 minutes based on the marginal cost to supply demand
� Volatility on spot price is mainly driven by hydro conditions, gas transport availability, main plants availability and high voltage transmission restrictions
� If a generation company goes into unbalance it has to go to the spot market
Transportation
� Open access
� Regulated market 100%
� Tolls are pass-through costs and are paid by the demand
Distribution
� 100% of the demand must be provided with electricity
� Regulated market 100%
� Distribution grid costs are paid by the demand
SUPPLY & DEMAND
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� System is based mainly on hydro and natural gas from Camisea F ield
� Electricity demand increased on average 7% annually betwee n 2005 and 2016 (YTD) and is expectedto have an average annual growth of 5-6% between 2016 and 2019 ;
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2015
2016
2017
2018
2019
Reserve MWBalance Supply - Demand - Wet Season
Hydro RenewableNatural Gas (CC) Natural Gas (OC)Coal Oil and Fuel OilMax Demand Reserve Wet Season (%)
0%
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100%
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2,000
4,000
6,000
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12,000
14,000
2015
2016
2017
2018
2019
Reserve MWBalance Supply - Demand - Dry Season
Hydro Dry Season RenewableNatural Gas (CC) Natural Gas (OC)Coal Oil and Fuel OilMax Demand Reserve Dry Season (%)
AGENDA
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Section 1 Peruvian Energy Industry
Section 2 Company Overview
Section 3 Strategy
Section 4 Financial Results
Section 5 Capital Structure
SPONSOR
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ENGIE is a world energy leader with activities in 3 sectors: electricity, natural gas, and energy services.
OWNERSHIP STRUCTURE
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• ENGIE (former GDF SUEZ) through International Power SA has a majority participation and controls ENGIE Energía Perú (former EnerSur) with 61.77% (2 Independent Directors and 5 Directors appointed by ENGIE);
• In February 2004, ENGIE (GDF SUEZ) sold 21.05% of its participation in ENGIE Energía Perú to the 4 Peruvian Pension Funds (“AFPs”);
• In October 2005, ENGIE Energía Perú listed its shares in the Lima Stock Exchange (“BVL”);
• On November 24th 2005 ENGIE (GDF SUEZ) launched an Offering in the local market and successfully sold 17.3% of its stake in THE Company, mainly to Pension Funds and Insurance Cos;
• In April 2012 the Company announced a capital increase through a preferential subscription after the approval by the General Meeting of Shareholders on February 14th, 2012, by means of new monetary contributions up to the equivalent sum in PEN of 150 MUSD (99.4% in first round...);
• As of September 2016, the Company reported 528 institutional and individual shareholders (375 as of December 2013).
As of 9.30.2016 %
ENGIE 61.77
Integra – Fondo 2 6.83
Prima – Fondo 2 5.47
Profuturo – Fondo 2 5.27
Others 20.66
62%29%
6%3%
Engie Pension funds Insurance companies Others
Total Capacity MW 676 836 1,090 1,068 1,068 1,360 1,820 1,860 1,952
EBITDA MUSD 84 185 134 163 168 188 270 287 321
Net Income MUSD 42 94 66 81 86 101 127 138 181
Dividends MUSD 42 84 59 24 26 30 38 41 54
Market Cap MUSD 645 870 877 1,600 1,200 1,759 2,005 2,075 1,427
HISTORY: OUR BUSINESS
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Proven track record in driving organic growth and integrati ng the developed projects.Committed investments for approximately 1.6 BnUSD between 2010 and 2018
1997-2003 2004-2005 2006 2007-2008 2009 2010 2011 2012 2013 2014 2015
Acquisition Ilo1 261MW
Coal Plant Ilo21 135MW COD
Yuncán HPP 134MW COD
Chilca 1 OCGT11
180MW COD
Chilca 1 OCGT12
180MW COD
Chilca 1 OCGT12
180MW COD
1. Chilca 1 CCGT 292MW NTP2. Quitaracsa HPP 112 NTP3. Ilo31 500MW NTP
Chilca 1 292 MW CCGT COD
(85MW CCGT)
Ilo31 500MW CODNodo Energetico 600MW Auction
Chilca 2113MW CCGT
NTP
Intipampa40 MW
Solar Auction
Private Placement 21%Offering 17%
First Dividend Payment
OCGT 12 Financial
Lease
400 MUSD Corporate
Bond Program 1st, 2nd & 3rd
issuances
Bond Program 4th & 5th
issuances
Chilca 1 CCGT310 MUSD F. Lease
Bond Program6th & 7th issuance
Cold Reserve200 MUSD
Subordinated Financial Lease
Capital Increase 150 MUSD @ 100%
Subscription
Quitaracsa HPP60 MUSD
Financial Lease
100 MUSDMTL
Chilca 2125 MUSD
Financial Lease
MW: Nominal Capacity
DIVERSIFICATION: OPERATIONS (2,638MW) + PROJECTS (77MW)
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Nodo Energético ProjectNTP July 2014COD : 21rst October 2016Additional 610 MW
Yuncán Hydroelectric 134 MW
Chilca 1 CCGT (Natural Gas)852 MWChilca 2 OCGT (Natural Gas)76 MW
Ilo 21 (Coal) 135 MW
Ilo 1 (Diesel, Fuel & Steam) 217 MW
Chilca 2 ProjectNTP 4Q 2014Estimated Full COD 4Q 2016Additional 37 MW in CCGT
Ilo 31 Cold Reserve (Diesel & Gas) 500 MW
Quitaracsa Hydroelectric 114 MW
Intimpampa ProjectNTP 2016Estimated COD 2018Additional 40 MW
CCGT: Combined Cycle Gas Turbines | OCGT: Open Cycle Gas Turbines | HPP: Hydro Power Plant.
ORGANIZATIONAL STRUCTURE
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AGENDA
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Section 1 Peruvian Energy Industry
Section 2 Company Overview
Section 3 Strategy
Section 4 Financial Results
Section 5 Capital Structure
STRATEGY
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A. Development
� Portfolio Balance: hydro & non-conventional renewables vis-a-vis thermos
� Geographic: diversification and close to our clients
� The Company invested more than 700 MUSD during its first 13 years of operations
� Then, in 2010 we announced investments in 3 new projects with a total capacity of 904MW and aninvestment of 1.0 BnUSD
� In 2013 ENGIE Energía Perú was awarded with a contract to build a new 600MW Dual Plant (Diesel/Gas) inthe south of Peru which required an investment of 375 MUSD
� In 2014 announced the construction of a combined cycle plant adding 113MW to existing capacity in Chilcawith a total investment of 130 MUSD. The first phase concluded in IH’2016 adding 76 MW in open cycle andwe expect to reach full capacity in combined cycle during the IVQ’2016
� In 2016 was awarded with a contract to build a 40MW solar plant in the south Peru with an estimatedinvestment of 55 MUSD
� …and we have other projects under analysis (hydro, Open Cycle, Combined Cycle, renewables)
B. Commercial
� Optimum contracting level
� Balanced Portfolio: Regulated Clients (Distribution Companies) vis-a-vis Free Clients
� Power Purchase Agreements under “pass-through” scheme
� Minimize non-manageable risks
C. Financing
� Maintain a strong position for unexpected events and opportunities
ORGANIC GROWTH: 2,675MW by 2016
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-
500
1,000
1,500
2,000
2,500
3,000
3,500
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q3´16 2016 2017 2019 2020
MW
A
3065
MW
374
MW
2715
MW
AVERAGE
GROWTH
18%
Hydro & Solar Gas Dual Fuel
I
Investment Plan 1.6 BUSD
BC
D
E
FG
K
1068
MW
J
A. 2005 H.P.P. Yuncán 134 MW
B. 2006 OCGT Chilca 1 TG11 180 MW
C. 2007 OCGT Chilca 1 TG12 180 MW
D. 2009 OCGT Chilca 1 TG21 200 MW
E. 2012 CCGT Chilca 1 TV 292 MW
F. 2013 Ilo31 Cold Reserve 500 MW
G. 2015 H.P.P. Quitaracsa 114 MW
2015 Ilo1 TV2 (phase out) -22 MW
H. 2016 OCGT Chilca 2 partial 76 MW
H. 2016 Nodo Ilo 610 MW
I. 2016 CCGT Chilca 2 full 37 MW
J. 2017 Intipampa Solar 40 MW
K. 2020 OC Nodo (CCGT option) 350 MW
A. 2005 H.P.P. Yuncán 134 MW
B. 2006 OCGT Chilca 1 TG11 180 MW
C. 2007 OCGT Chilca 1 TG12 180 MW
D. 2009 OCGT Chilca 1 TG21 200 MW
E. 2012 CCGT Chilca 1 TV 292 MW
F. 2013 Ilo31 Cold Reserve 500 MW
G. 2015 H.P.P. Quitaracsa 114 MW
2015 Ilo1 TV2 (phase out) -22 MW
H. 2016 OCGT Chilca 2 partial 76 MW
H. 2016 Nodo Ilo 610 MW
I. 2016 CCGT Chilca 2 full 37 MW
J. 2017 Intipampa Solar 40 MW
K. 2020 OC Nodo (CCGT option) 350 MW
Phase-out
2638
MW
H
CCGT: Combined Cycle Gas Turbines | OCGT: Open Cycle Gas Turbines | H.P.P.: Hydro Power Plant.
…
2675
MW
NODO ENERGETICO - ILO PROJECT IN OPERATION +610MW
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October 21st EEP announced the commercial operation of Nodo Energético project . The projectstarted operations 5 months ahead of the scheduled contractual date, two months before budget andbelow budget
Key facts
• Location the project is located in the south of Peru, in Moquegua Region (adjacent toexisting operations)
• Description is a dual fuel (diesel / gas) plant It is expected to operate with diesel as aback up plant for the system until the Gas Pipe to the South Project, currently underconstruction, is completed. Besides the 3 Turbines Generators, the project includes theconstruction of a 75km of transmission line (500kV) to Montalvo Substation and 6 newfuel oil tanks
• Economics The project is backed by a 20 year Investment Agreement with the PeruvianState. PPA Contract under Investment Agreement for 600 MW at 5.75 USD/kW-month
• Development & construction: Construction was successfully finished in 23 monthsMain partners were Técnicas Reunidas/JJC (Plant) & Abengoa (TL)
• Financing through Financial Leases for 290 MUSD with BCP and BBVA
• Health & Safety: record of 3.4M of man hour without disabling accidents
• Community and local impact During the project, Engie strengthened relations with thelocal community, contributing with local employment, specialized trainings to increaseemployability and working in partnership with the community to achieve the highestenvironmental standards
PROJECTS IN CONSTRUCTION +77MW (Q3´16 - 2017)
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Chilca 2 Combined Cycle Project +113 MW
The Chilca 2 Combined Cycle Project consists in one gas turbine and one steam turbinewith a combined capacity of 113 MW.
Construction next to the existing facilities of Chilca 1 plant. Full Notice to Proceed wasgiven to EPC contractor on February 24th 2015. Total investment is estimated in 130MUSD. The first turbine reached COD in open cycle in May 2016 with 75.5 MW.
Expected Full Commercial Operation Date (COD) in CCGT: 4Q 20 16
Phase of Development:• EPC contract signed with Duro Felguera / Limited Notice to Proceed Oct’ 14 / Full
Notice to Proceed Feb’ 15• PPA Contracts (capacity to be contracted as part of commercial portfolio)• Financial Leases for 125 MUSD signed with BBVA
Intipampa Solar Project +40 MW
On February 2016, ENGIE Energía Perú was awarded by Osinergmin as part of the 4th
Renewables Auction process the construction of a 40 MW solar plant which will belocated in the south of Peru.
ENGIE Energía Perú won a bid to build and operate a 40 MW delivering to the system108.404 GWh/year. The project is backed by an investment agreement with the Ministryof Energy and Mines. Intipampa project shall reach commercial operation before end of2018 and commercial contract will end in 2038 (approx. 20 years). Total investmentestimated in 55 MUSD.
Expected Commercial Operation Date (COD): Q4 2017
Phase of Development:• EPC signed with Solairedirect (30th
• PPA Contract under investment agreement for 108.404 GWh/year MW at 48.5USD/MWh.• Financing structure under evaluation (inside Balance Sheet)
CAPEX PLAN: 2010 - 2018
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BEST ESTIMATE AT COD
1.6 BnUSD
BEST ESTIMATE AT NTP
1.4 BnUSD
15% Cost Overrun
MUSD Construction (2010-2018) MUSD ∆
Chilca 1 CCGT 350 2010 2012 320 +30
Cold Reserve Ilo31 250 2011 2013 220 +30
Quitaracsa HPP 250 2011 2015 539 (289)
Nodo Energético Ilo 400 2014 2016 375 +25
Chilca 2 CCGT 130 2014 2016 130 -
Intipampa Solar 55 2016 2018 55
DEVELOPMENT OPPORTUNITIES
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A. Improve Operational Efficiency of existing assets
� Yuncán HPP: Huangush Bajo
� Ilo21: Development of export/import services in existing 1.2 km jetty
� Optimization of Fuel storage facilities
B. Renewables & Cogeneration
� Wind, Solar, Biomass, Cogen
C. Mapping new Hydroelectric Power Projects
� Mapping potential sites to build new hydroelectric power plants
� Total Investment during development phase of approx. 8 MUSD
D. Natural Gas
� Gas to South Option, conversion of Cold Reserves to Natural Gas
� Ilo21 Coal Plant: Conversion to Natural Gas when gas arrives to the south
� Gas to Power business in the North
E. M&A Opportunities: Solar, Wind, Hydro and Natural Gas
PROJECTS IN DEVELOPMENT: GAS TO SOUTH OPTION
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A. Phase 1: convert existing 500 MW Cold Reserve Ilo31 + 610MW No do Energético diesel units to Natural Gas
� Cold Reserve: Option granted under theexisting concession contract after year 5(2018)
� Nodo Energético: Option granted onceNatural Gas arrives to the South (2020)
� Similar operation to Chilca 1 plant before itwas converted to Combined Cycle
B. Phase 2: convert 1100 MW Natural Gas units(Cold Reserve+Nodo Energético) to CombinedCycle
� Similar operation and economic impact of Chilca 1 CombinedCycle Project adding approx. 550 MW of additional capacityto reach 1,650 MW …
AGENDA
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Section 1 Peruvian Energy Industry
Section 2 Company Overview
Section 3 Strategy
Section 4 Financial Results
Section 5 Capital Structure
KEY MESSAGES 2016
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Market:
� 975MW of new hydro capacity enter in operations in August / September 2016
� On average, marginal cost at similar levels than 2015. Specific incidents with some thermal units caused some temporary increases in June/ July
Operation:
� Ilo1 and Ilo 21 were dispatched (+700GWh) and received capacity revenues from the system
� Reduction of oil and coal prices negatively impacted results
Commercial:
� We signed new PPAs with free and regulated clients. Commercial Portfolio is highly contracted until 2021-2022
Expenses:
� Successful execution of the optimization plan to reduce G&A, O&M and financial expenses
� Net Result could be impacted by a potential increase in Peruvian income tax rate
Financing:
� Successful issuance of approx. 76 MUSD in the local capital market @ 10-years bullet & USD fixed interest rate of 3.38%
Projects:
� Nodo Energetico project reached commercial operation date (“COD”) on October 2016, 5 months ahead of concession due date, adding 610 MW of installed capacity to our portfolio
� Construction of Chilca 2 under track on budget, timing and performance
� ENGIE signed an EPC contract with Solairedirect for the construction of Intipampa, its new solar project located in Moquegua region. ENGIE won a bid to build and operate a 40 MW solar plant delivering to the system 108.404 GWh/year. The project is backed by an investment agreement with the Ministry of Energy and Mines and the investment is estimated in 55 MUSD
MAIN INDICATORS Q3´16
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Financial results as of September show a small increase in EBITDA, although higher depreciation and financial expenses resulted in lower Net Income.
• EBITDA decrease -7% in Q3´16 compared to Q3´15 mainly explained by a higher marginal costs due to unexpectedevents in the market and the optimization of PPAs which had a positive effect in Q2´16.
• The decrease in the operating margin was partially compensated with a reduction in Expenses (SG&A & Opex).
• Net Result decreased by 16% compared to Q3´15 explained by lower EBITDA, higher financial depreciation and higherfinancial expenses.
Summary of Financial and Operational Indicators
(in millions of USD) 2016 (9M) 2015 (9M) 2014 (9M)Chg. 2016 /
20153Q16 3Q15 3Q14
Chg. 2016 /
2015
Revenues 564 527 457 7% 186 181 147 3%
EBITDA 256 251 218 2% 74 80 72 -7%
Net Income 137 142 107 -3% 35 42 35 -16%
Total Debt 987 859 760 15% 987 859 760 15%
Net Generation GWh 5,886 5,078 5,125 16% 2,143 1,705 1,754 26%
Clients Demand GWh 6,831 6,462 5,609 6% 2,166 2,174 1,752 0%
PRODUCTION AND ENERGY BALANCE 3Q´16
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Growth in net generation and contracted Level with clients i n line with commercialoperation of new efficient generation plants and commercia l efforts…
GWh 2015 (9M)2016 /
2015
3Q'16 /
3Q'15
Yuncán HPP 898 14% 948 13% 921 12% 901 10% 690 587 9% -15% 153 7% 134 6% -12%
Quitaracsa HPP 0 0% 0 0% 0 0% 88 1% 0 372 5% - 0 0% 70 3% -
Chilca1 CCGT 4,222 68% 5,771 78% 5,979 80% 5,838 66% 4,339 4,101 60% -5% 1,496 69% 1,566 72% 5%
Chilca2 0 133 2% - 0 0% 53 2% 0%
Ilo21 (Coal) 556 9% 837 11% 163 2% 248 3% 46 582 9% 1156% 23 1% 266 12% 1066%
Ilo1 (Diesel) 106 2% 130 2% 30 0% 62 1% 26 193 3% 632% 17 1% 81 4% -
Ilo31 (Cold Reserve) 0 0% 5 0% 5 0% 35 0% 24 91 1% 279% 17 1% 49 2% -
Nodo Energetico (Cold Reserve) - 13 0% - 0 - 13 1% -
Importaciones (Ecuador) 0 21 0% - 0 0% 8 0% -
Auxiliaries -255 -4% -188 -3% -212 -3% -100 -1% -48 -207 -3% 327% 0 0% -97 -4% 75402%
NET GENERATION 5,528 89% 7,502 101% 6,887 92% 7,072 81% 5,078 5,886 86% 16% 1,705 78% 2,143 99% 26%
COES: NET 691 11% -109 -1% 609 8% 1,711 19% 1,385 945 14% -32% 469 22% 23 1% -95%
CLIENTS DEMAND 6,219 100% 7,393 100% 7,496 100% 8,783 100% 6,462 6,831 100% 6% 2,174 100% 2,166 100% 0%
2012 3Q 20163Q 20152013 2014 2015 2016 (9M)
EBITDA GROWTH: record EBITDA in 2015
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-
50
100
150
200
250
300
350
400
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
MUSD
AVERAGE
GROWTH
13%
321MUSD
▲
OC TG11ChilcaUno
2006.12
OC TG12ChilcaUno
2007.07▼
Indexation▼
▲
OC TG21ChilcaUno
2009.08
▲
CCGTChilcaUno
2012.11
Cold ReserveIlo31
2013.06▼
QuitaracsaHPP
2015.10▼
NET RESULT GROWTH: record Result in 2015
27
-
25
50
75
100
125
150
175
200
225
250
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
MUSD
AVERAGE
GROWTH
14%
181MUSD
▲
OC TG11ChilcaUno
2006.12
OC TG12ChilcaUno
2007.07▼
Indexation▼
▲
OC TG21ChilcaUno
2009.08
▲
CCGT ChilcaUno
2012.11
Cold ReserveIlo31
2013.06▼
QuitaracsaHPP
2015.10▼
COMMERCIAL PORTFOLIO: CONTRACTS (>30MW) PROVIDE A STABLE CASH FLOW FOR THE FUTURE
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AntaminaLas Bambas
Cerro Verde
Cajamarquilla
SPCC
Lic LP2009-04
Lic LP2009-03
Lic LP2009-06
Lic LP2009-01
BilateralM.Regul…
BilateralM.Libre
0
50
100
150
200
250
300
350
400
450
0 2 4 6 8 10 12 14 16 18
Con
trac
ted
Cap
acity
(M
W)
Years to Maturity
Clientes Libres Clientes ReguladosFREE CLIENTS REGULATED CLIENTS
467
663
1,020
793 839
1,602
1,187
1,759
2,005 2,075
1,427
1,767
0
50
100
150
200
250
0
500
1,000
1,500
2,000
2,500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
MU
SD M
US
D
STOCK PRICE PERFORMANCE
29
Sound financial results and value creation due to its financ ial,commercial and development strategy, generating 4x increa sein market value since IPO
Source: SMV, Lima Stock Exchange, Financial Statements as of September 30th 2016. 2016 partial dividends based on results as of June 2016
Financial Market Data as of Sep’16
Number of shares issued 601,307,011
Share price (PEN) 10.00
Market Cap (MUSD) 1,767
Enterprise Value (EV) (MUSD) 2,665
EV / EBITDA 8.2x
Price to Book Value (P/B) 1.8x
Price / Earnings ratio (P/E) 10.0x
EV: Market Cap + Net DebtP/B: Market Cap / Book Value of Equity
Market Cap Net Result
Dividends
ANALYSTS: 3Q´16
3030
Sell - Underperfom Neutral - Market Perform Buy - Outperform
PE
N /
Sha
re
Upside+6%
Upside+6%
9
8
10
11
12
7
Consensus
10.63
Price as of IH’16
8.65
+16% in
Q3´16
+16% in
Q3´16
ACTUAL Price
10.00
34 3642
32
42
28
13 1215
20 2024
31
24
43
31
11 13
16
1822
30
41
15
77
71
85
59
24 25
31
38
42
54
0
10
20
30
40
50
60
70
80
90
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Extraordinary
Second Semester
First Semester
Annual
DIVIDEND PAYMENTS: 612 MUSD since 2004
31
Change in Dividend Policy since 2010: Minimum 30%
* Dividends corresponding to H1 2016 Results will be paid in December 2016
*
RECENT AWARDS
32
Recognized by Euromoney as “Best Managed Company - Utilities” in Latin
America
Recognized by the National
Environmental Supervisor (OEFA)
for best environmental
practices
Designated in MERCO 2015 ranking as best Company in corporate reputation
in the Peruvian electricity industry
Recognized in 2016 by Capital Finance
International – CFI.co as “Best ESG Power
Producer Peru
AGENDA
33
Section 1 Peruvian Energy Industry
Section 2 Company Overview
Section 3 Strategy
Section 4 Financial Results
Section 5 Capital Structure
MAIN FINANCIAL OBJECTIVES
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� Keep ratio Senior Financial Debt to EBITDA during construction of projects around 3.25x and maintain a AAA local rating to keep access to the local capital and bank market at low costs;
� Maintain open access to local bank and capital market for non-recourse financing and equity funding capabilities to finance current and future projects;
� Allow a minimum dividend pay-out ratio of 30% during years with high CAPEX and monitor increase in dividend policy in line with higher cash flows after COD of new projects;
� Maintain financial flexibility for unexpected events and opportunities
MUSD 2012 2013 2014 2015 2016 (9M)
Cash 97 25 29 52 88
Current \ other Assets 102 196 169 169 225
Fixed Assets (PP&E-net) 1,015 1,162 1,380 1,673 1,781
Other non-current assets 131 135 146 159 160
Total Assets 1,345 1,518 1,724 2,053 2,254
Other liabilities 131 153 180 228 280
Senior debt 504 726 808 954 987
Subordinated debt 160 - - - -
Shareholders’ equity 550 639 736 871 987
Total Liabilities & Equity 1,345 1,518 1,724 2,053 2,25 4
Balance Sheet
FUNDING STRATEGY 2010-2018
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CAPEX plan driven by 6 projects for a combined inve stment of approx. 1.6 BnUSD
Uses (Development Projects) MUSD Sources MUSD
Chilca 1 Combined Cycle - CCGT (+292MW) 320 Financial Lease Chilca 1 - CCGT 300
Cold Reserve Project Ilo31 (+500MW) 220 Financial Lease Cold Reserve Ilo31 200
Quitaracsa HPP Project (+112MW) 512 Other Senior Products (Bonds, Loans) 342
Nodo Energético Ilo Project (+600MW) 400 Financial Lease Nodo Energético Ilo 290
Chilca 2 (+113MW) 130 Financial Lease Chilca 2 - CCGT 125
Intipampa Solar (+40MW) 55 Capital Increase & Change in Dividend policy 380
Total ~1,637 Total ~1,637
Dividends
In 2010 the General Shareholders Assembly approved a reduction in the dividend payout ratio from 90% to aminimum of 30%. The policy will be kept during the construction of these projects ~2017.
Equity Increase
An equity increase was approved in 2012 by the General Shareholders Assembly: 100% of shareholderssubscribed the new shares.
FINANCIAL DEBT STRUCTURE AS OF Q3´16
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Lender Type Currency Facility O/S Initial Date Maturity D ate Rate ReferenceBCP Short Term MPEN 237 70 2015 2016 5.29% Short Term Synthetic Loans . Implicit Rate 0.02%Local DCM Bullet Bond MPEN 121 36 Nov 2007 Nov 2017 6.81% 1° Issuance 1° - XC SWAP w/ Citibank. Int. Rate 5.755%Local DCM Bullet Bond MPEN 84 25 Jun 2008 Jun 2018 7.19% 2° Issuance 1° - XC SWAP w/ Citi. Int. Rate 6.1690%Local DCM Bullet Bond MUSD 10 10 Jun 2008 Jun 2028 6.31% 3° Issuance 1°Local DCM Bullet Bond MPEN 250 74 Jun 2016 Jun 2026 7.125% 1° Issuance 3° - XC SWAP w/ BCP Int. Rate 3.380%Local DCM Bullet Bond MUSD 25 25 Dec 2010 Dec 2025 6.50% 6° Issuance 1°Local DCM Bullet Bond MPEN 42 12 Dec 2010 Dec 2020 7.59% 7° Issuance 1° - XC SWAP w/ BBVA. Int. Rate 5.9738%BCP F. Lease MUSD 300 139 Jun 2010 Dec 2019 6.6700% Financial Lease Chilca 1 CCGT BBVA F. Lease MUSD 105 49 May 2011 May 2019 5.70% Financial Lease Cold Reserve Ilo31BCP F. Lease MUSD 93 43 May 2011 May 2019 5.70% Financial Lease Cold Reserve Ilo31BBVA F. Lease MUSD 135 135 Jul 2014 Nov 2021 4.90% Financial Lease NodoBCP F. Lease MUSD 128 128 Jul 2014 Nov 2021 4.90% Financial Lease NodoBTMU / SMBC Semi-Bullet Loan MUSD 100 100 Jun 2014 Jun 2020 L (3M) + 1.00% Medium Term LoanBBVA F. Lease MUSD 99 99 Oct 2014 Jan 2023 4.20% Financial Lease Chilca 2 – Under ConstructionScotiabank Amortizing Loan MPEN 238 44 Dec 2015 Dec 2017 6.15% MUSD 70 - Synthetic Loan. Implicit Rate 0.84%Total MUSD 1,280 987
MU
SD
Debt Repayment Profile
135 163 157
98 87
33 - - - - - - -
40 30
15
25
76 10
35 50
50
- -
50
100
150
200
250
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Financial leases Bonds Corporate loans
17017%
81783%
Debt Composition by Interest Rate (MUSD)
Floating Rate Fixed Rate
26026%
72774%
Debt Composition by Currency (MUSD)
PEN + XCSY USD
LIMITED EXPOSURE TO FX AND INTEREST RATE VARIATIONS…
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• FX: ENGIE Energía Perú’s functional currency isthe US Dollar and only a limited portion of its G&Aand OPEX are in local currency (PEN). Revenuesare either in US Dollars or in PEN indexed to theUSD.
• Interest Rate: minimize the uncertainty of the cost ofdebt.
987 987
VALUE CREATION
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A. Development:
• Committed investments for approx. 700 MUSD between 1997 and 2009, and 1.6 BnUSD between 2010and 2018 including the 113 MW expansion in Chilca and newly awarded 40 MW solar plant in the south ofPeru.
B. Implementation:
• During 15 years of operations run the successful construction of a new coal plant, operation of Yuncán HPP,construction of three open cycles, one steam turbine to close those cycles
• Cold Reserve reached COD by the end of June 2013 (before concession date of September 2013)
• Quitaracsa HPP reached COD in October 2015 adding 114 MW of efficient installed capacity
• Nodo Energético project reached COD in October 2016 adding 610MW to EEP portfolio
C. Operation:
• ENGIE Energía Perú secured Natural Gas Firm Capacity with TGP for its total needs
• Contracted level and duration of PPA portfolio consistently increased between 2010 and 2015 in line with theadditional efficient capacity (Antamina, Las Bambas, Regulated Clients)
D. Capital Structure: Sound financial performance and value creation for its shareholders. Commercial strategyand development of new projects will allow to double EBITDA and cash generation in the mid term compared to2010.
E. New Developments: will continue developing additional alternatives to support Peru’s growth, mapping newhydroelectric and other renewable technologies, adding additional cold reserve capacity and due to its position inthe south preparing to convert its new diesel units to natural gas when gas arrives to the south.
THANKS
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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-lookingstatements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and maycontain words like “believe”, “anticipate”, “expect”, “envisage”, “will likely result”, or any other words or phrases of similar meaning. Such statements aresubject to a number of significant risks, uncertainties and assumptions. We caution that a number of important factors could cause actual results to differmaterially from the plans, objectives, expectations, estimates and intentions expressed in this presentation. In any event, neither the Company nor any of itsaffiliates, directors, officers, agents or employees shall be liable before any third party (including investors) for any investment or business decision made oraction taken in reliance on the information and statements contained in this presentation or for any consequential, special or similar damages. The Companydoes not intend to provide eventual holders of shares with any revised forward-looking statements of analysis of the differences between any forward-lookingstatements and actual results. There can be no assurance that the estimates or the underlying assumptions will be realized and that actual results ofoperations 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 ENGIEEnergía Perú prior written consent.
ENGIE Energía Perúwww.engie-energia.peAv. República de Panamá 3490 San Isidro, Lima, Peru(511) 616 79 79
Investor relations contacts:
Rocío VásquezHead of Corporate Finance & Investor Relations [email protected]
Eduardo MilliganCFO [email protected]