Enel Chile S.A.

Good day, ladies and gentlemen, and welcome to Enel Chile First Health 2020 Results Conference Call. My name is Livia, and I will be your operator for today. During this conference call, we may make statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect only on our current expectations, are not guarantees of future performance, and involve risks and uncertainties. Actual results may differ materially from those anticipated in forward-looking statements as a result of various factors. These factors are described in Enel Chili's press release reporting is first held 2020 results. The presentation accompanying this conference call and Enel Chili's annual report on form 20-F including under risk factors. You may access our first held 2020 results press release and presentation on our website www.enel.cl, NR20-F on the SEC's website, www.sec.gov. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of their date. NLCHILI undertakes no application to update these forward-looking statements or to disclose any development as a result of which these forward-looking statements become inaccurate except as required by law. I would now like to turn the presentation over to Mrs. Isabella Clemes, Head of Investor Relations to Enel Chile. Please proceed.

Isabella Clemes Thank you very much, Lidia. Good morning, ladies and gentlemen, and welcome to Enel Chile's second quarter 2020 results presentation. I hope you are all well and safe in your homes and are following all the required safety measures that the prevailing circumstance requests to us all. I am Isabella Clemes, Head of Investor Relations. Our presentation will be hosted by Paolo Palotti, our CEO, and Giuseppe Tustarelli, our CFO. In occasion of this event, we are still adopting appropriate prevention measures. We are all connected from our homes. Paolo will open with the main highlights and will give us an update on the global situation that we are facing and how the company is responding to it. Then, Giuseppe will walk you through our financial results, our operation performance, and he'll give you more details on our 2020 EBITDA guidance update. The usual Q&A section will follow. Please note that questions will be received only via chat. available in our webcast at www.nl.ca at the investor relations section. At any time during your presentation, you can submit your question. Just select the link at the top of the web page, ask a question. Let me remind you that media participants are connected only on listener mode. As always, our IR team will be will continue to be available to provide you with any detailed information you may need with respect to the figures included in this presentation. Thank you all for your presence, and now let me hand over the call to Paulo.

Thank you, Isabella, and good morning, ladies and gentlemen. Let's start by mentioning the highlights of the period on slide two. The world is facing extraordinarily difficult times. Since the beginning of the health crisis, Enel Chile has realized the severity of the situation and implemented all necessary measures to continue offering a stable and safe energy supply service, safeguarding at all times the safety and health of our employees, our clients, and external providers. All our generation and network facilities are fully operational. Thanks to our commitment to digitalization, we have developed a solid platform that has turned out to be key in meeting our customer needs in the current scenario, while they are struggling with the difficulties in accessing traditional PlayStation channels of service. We have been promoting remote working methodology since several years by evolving our systems toward the cloud. Today, a significant number of employees are working remotely in an efficient and effective way. As part of our commitment with the energy transition, with the sustainable development of the country, on May 27th, Energy Generation Chile announced its decision to anticipate the closure of Bocamina 1 by December 31st, 2020. and Bocamina II by May 31st, 2022. The decision implies closing much earlier than committed in the national decarbonization plan, and will make an El Chile the first utility to stop generating from coal in Chile. In line with the previous announcement, El Chile is progressing in the development of renewable projects, including in our strategic plan. This initiative seeks to add a total of 2,000 megawatts of renewable restore capacity by 2022, half of which is already under construction. This project reaffirms our position as the first renewable operator in Chile. Lastly, we have a safe liquidity position to continue executing our strategy and to face this global challenge. Let's move to page three. First of all, I would like to thank all our people for their positive and strong commitment, highlighting with their actions the resilience of our company. I want to expand my thanks to our contractors that have been supporting deeply our activities. Since the beginning of this global crisis, we have taken all the necessary measures to guarantee the safety of our people, contractors, and clients, as well as ensuring the continuity of the service. As mentioned in the previous quarter, we have created a committee to analyze the situation on a day-by-day basis and to coordinate all the required action we may need to take. Therefore, 100% of our plans and network are fully operational. A large number of our people will continue to work remotely once the quarantine measure will be revoked. For the ones that need to be in our facilities, the process will be gradual, taking all the security measures. As of June 15th, We have gradually restarted manual readings and billing distribution with all the corresponding preventive health measures that includes personal projection gear to support the health of our customers, employees, and the community. Up to this date, following the regulation in place, we temporarily bill our clients using the average consumption of the last six months. To ease the impact of the probable differences between the billing of estimated electricity usage and the actual reading, we voluntarily decided to apply payment solutions to all our regulated clients to whom manual readings were suspended. For instance, if a client consumes more than what has been billed by the company, we will automatically split the difference in five-month payment installments without interest rates, readjustments, or any additional charges. In addition, to help our clients to cope with this crisis, we have voluntarily extended the benefits on deferred payments that we have offered to the most vulnerable clients until the end of the emergency period. Now, on page four, In these difficult times for Chile and for the world, we have reaffirmed our commitment to our communities, putting into action a voluntary campaign to respond to the challenge of COVID-19 and to support the most vulnerable communities, especially the ones most affected and closer to our activities. Under this program, we have donated two electric ambulances to the Red Cross with their respective charging points. The e-ambulances are the first of its kind in LATAM and will represent an important cost reduction for the institution once compared to the diesel technology. Thanks to a collaborative work with the Università Cattolica and with the UC Christus Health Network. We have implemented an electric bus that was adapted as a mobile laboratory to support detection of COVID-19 cases and enhance logistics for testing. We will continue with several other projects with our local communities as we clearly understand the importance of our role in the country. Together we will get ahead of this situation. Now on page five. Since the outbreak of COVID-19, volatility has spiked to levels last seen only during the global financial crisis, having the uncertainty of the depth and duration of the economic crisis due to the pandemic. Oil and gas prices have fallen sharply, enduring important declines once compared to 2019 figures. Emerging market currencies are under stress, and although the Chilean pesos currency is considered one of the most resilient in Latin, we have observed a depreciation of around 80% year-to-date basis, again the U.S. dollar. The index IMASEC, which measures the economic activity of the country, contracted by 15.3% in May 2020 versus last year data. Social distancing measures have impacted a larger number of workers and economic activities, especially in the main cities, bringing the unemployment rate at 11.2% in May. On government-directed side reaction, the Chilean central bank decided to leave the interest policy rate at 0.5% to continue supporting market liquidity and commercial lending. In addition to this measure, It is also carrying out U.S. dollar swap line arrangements to reduce volatility of Chilean pesos, particularly considering the recent approved law, which allowed a 10% voluntary withdrawal of the Chilean pension funds by their contribution. Now on slide six. The country's lockdown has impacted the electricity demand in many economic sectors related to industrial activity and commerce. Several companies have reduced its operation to minimal levels and, to some extent, shut down their operation, which resulted in an important decrease in demand. As we can see on these slides, both our generation distribution businesses face an important decrease particularly concentrated since March 2020, as a result of the lockdown measures. The demand reduction in both generation distribution businesses are mainly explained by the contraction of the regulated consumption. We can see this effect not only in the distribution concession area, but also in other regions of the country. This reduction is primarily driven by commercial industrial sector, as many stores, malls, and small industries are closed. On the free market perspective, at least in our generation business, we still see an increase in the demand versus last year, primarily driven by the resilience of our free market clients, as the mining companies, and by the new PPA secured by our company, especially in the first part of this year. On page seven, let's focus on distribution collection. Our efforts on digitalization have allowed allowed us to ensure the continuity of our business without compromising the safety of our clients and collaborators. We have put all our attention to strengthen our digital channels, improving the experience of our clients. As of June, our distribution client app was downloaded by 360,000 clients, a number 74% higher than last year's figures. we have also increased the number of payment channels available to our clients. As a result, in June, 88% of the payments were made through digital channels. By June 2020, we have executed more than 35,000 agreements with clients to modulate their payments and mitigate the impact on our collection, of which 10,000 have been subscribed with the most vulnerable ones by March 2020. As a result, we sustained the average collection level to 97% in the first semester of 2020 versus our historical levels of around 99%. Let's now focus on hydrology, on slide number 8. As you can see in the first graph, until June there was a significant rainfall deficit and therefore, the first semester of this year was the driest period registered in the country. To understand the performance of our company, we are presenting the accumulated rainfall for our most significant river basins, Maule, Laca, Biobio, and Rapel. As shown in the right side of the slide, since mid-June, we have observed a recovering rainfall, almost reaching normal levels to date. In addition, There has been an improvement in the levels of snow accumulated in the mountains since rains have been accompanied by a very low cold condition with a zero risk term at a very low altitude. The accumulated snow levels are higher than those observed last year. Under the current conditions, we expect the hydraulic generation of the second semester of 2020 to reach around 7 TWh approximately. So in terms of hydro generation, 2020 would be very similar to the previous years, reaching around 10, 11 terawatt hour. Let me remind you that generation with LNG natural gas is currently the natural edge of an El Chilo portfolio to cope with the draft, as you will see in the following slides. To conclude this section, let me update you on regulation framework evolution. We are in slide number nine. On the contingency front, we include the decision made by the executive or by the parliament. The Senate and the Congress have recently approved a new law known as the Basic Services Bill that aims to benefit the most vulnerable clients of basic services industries. This law includes benefits to vulnerable clients already voluntarily offered by our company and the obligation of not cutting off the domestic clients that are not paying their bills during the emergency period. This law has been opposed by the executive that applies its veto right for unconstitutionality. The Senate is expected to vote on this matter by today onwards. while the lower house has already rejected the presidential bid. If the Senate will vote in line with the lower house, the law will be effective. Another ministry decision is referred to the modification of the peak hours regulation during the winter period. After the decision on suspending the April and May peak hour tariffs, a new regulation, pending the executive decree, may suspend the peak hour tariffs during August and September. These changes will have a very marginal impact on generations, slightly more on distribution, especially for August and September period. To respond to the economic effects of the crisis, since the lockdown, the Chilean government has proposed more than $30 billion on measures to boost the economy. Of structural measures, The Minister of Energy has recently stated the next step referred to the new distribution law, so-called until now, Lay Larga de Distribución. According to the Minister of Communication, it foresees a three-step approach dealing with opening of the market and definition of the figures of traders, quality of service improvement, and distributed generation. On the first point, the government will present a bill with the required measure to open gradually the market, creating the figures of energy trading companies, and define the rules for the commercialization activities. On the second and the third topics, the government is expected to propose a new measure to add the concept of incentive regulation that should reward high-quality distribution companies and the new elements on distributed generation. On the new distribution regulatory cycle, The government recently published the bidding process to hire the external consultants to carry out the regulatory studies on the new reference model companies. We will share more details of the current framework in the next quarter, as we expect that the first appraisal report will be released by September 2020. Finally, the government is expected to rule on flexibility of the electric system. creating a mechanism to guarantee the continuity of the capitalization process and the renewable expansion in the country. On the hydrogen development, a global internal team has been created to focus on this new technology to evaluate all the business opportunities arising from the European Commission's New Green Deal, the agreement signed between the Chilean government and the European Union. Now, let's go through our strategy, starting with our descarbonization process. We are in page 11. On July 6, the CNE authorized us to proceed with the final decommissioning, disconnection, and termination of Bocamina 1 operation on December 31, 2020. More recently, on July 24th, the CNE has also authorized the early disconnection of Boccamina II by the end of May 22. Let me remind you that the decommissioning of the two units of Boccamina will be finalized without accessing to the energy strategic reserve. With this achievement, we will become the first utility to phase out its core fleet by 2022. We are working on a redeployment plan for all the workers of the units and the conversion of these facilities by circular economy perspective, with the aim of contributing to the development of this area where the units are located. Within our decision about the phase-out of Bocamina, we confirm our commitment with the local community in the perspective of just transition. Recently, we have financed the construction of a new school for the resettled community. In addition, local groups of artisanal fishermen will have access during the next months until the plant fades out to a special fund for projects aimed at improving their fishing activities or eventually entering into new businesses. Furthermore, all the resettlement process for over 1,300 families has been aligned to international standards. Our descarbonization strategy and just transition policy will improve the visibility of our sustainable model and our ESG profile. At the same time, we will reduce our exposure to commodity volatility and environmental risk, bringing better margins and allowing us to access new financing instruments reducing costs. In addition, We also believe, in medium term, that Enel Chile will benefit from potential increase in its liquidity and value, considering this the risking strategy. Let's now see more details on our discoverization strategy on page 12. To cope with our discoverization strategy and fit with our customer needs, we have under construction one gigawatt or renewable capacity. and another gigawatt ready to start the construction by 2021. In addition to that, we have approximately four gigawatts of renewable capacity in different phases of development, representing an optionality for the future to contribute to risking our generation portfolio from commodities and hydrology. On page 13, let me give you an update on the status of renewable projects that are under construction. During June 2020, we have started the construction of Renico 2 wind power plant. With a total investment of $177 million, Renico 2 will include 32 wind turbines of 4.5 megawatts each, reaching a stock capacity of 144 megawatts. The environmental permits have been already issued, and the wind turbines will be shipped to Chile in the next month. Part of the project will be in operation this year, and the remaining part in 2021. On Cerro Pavilion, the expansion of the plant will bring the total net capacity to 69 megawatts. Considering the COVID situation, we have reviewed the project timeline and devoted special attention to define the safe number of persons in our facility and to adjust properly our construction camp, limiting the number of persons according to health standards. Sarah Pauillon will be in operation next year. On page 14, on solar project. All the percentage solar projects have already received their environmental licenses. We are now working on some specific cases with the Ecological Institute of Chile to manage some findings encountered on site when we have started the civil works. The main EPC and BOP contracts were already signed, and particularly for Campos del Sol and Azabache, We are already receiving the photovoltaic models, indicating that our suppliers are in operation and committed with their concert timing. As the solar projects are constructed at the modular stage, part of this project will be online by 2020 and the remaining part by 2021. Before we go, let me give you a call on the Los Condores project. We are on page 15. Yesterday, NL Generation released a material fact indicating the conclusion of a full reassessment of the Spondylus islet project. Up to now, we have already completed the 10.5 kilometers of project tunnel out of 14. The remaining 3.5 kilometers will be excavated with a new tunnel boring machine. The assembly of the electromechanical equipment in the current powerhouse has been already completed. Let me highlight that during the construction of the vertical tunnel that connects the upper and the lower tunnel section already built, we have encountered a very challenging geological condition that forced us to change structurally the construction pattern. To guarantee technical efficiency and safety at work, of our employees and contractors, we have decided to adopt a different but more affordable construction solution that requires more time and additional budget. Therefore, with these changes in the project, we expect to finish the Civil Works construction of Los Condores Power Plant by the end of 2023, followed by the commissioning and commercial operation of the generation units of the project. Now let me drive you through our main industrial KPIs of the period for our generation business. We are on page 16. The total net production for the first half decreased by 14%, amounting to 9 terawatt-hours, given by minus 0.8 terawatt-hours or lower generation in our hydropower plants, reflecting the hydrology performance. and minus 0.6 terawatt-hour of lower thermal production, mainly in our coal-fired plants, due to the closure of Tarapa capital plants by 31st December 2019, and the impact of a lower system marginal cost. In terms of our energy balance, we remain a spot buyer in the market, with a purchase of 2.2 terawatt-hour in first half 2020, a variance of plus 0.2 8 TWh vessel first half 2019, also as a result of low hydrology and marginal cost. The lower system marginal cost is explained by the Argentinian natural gas availability, new transmission line fully in operation starting from June 2019, addition of new renewable capacity, and the reduction of countries' demand. As we saw in the previous slide, our physical energy sales decreased by 6% of 4.7, minus 0.7 terawatt-hour, mainly displayed by minus 1.1 terawatt-hour of lower consumption of distribution companies, mainly associated to the termination of regulated PPAs with SAISA and ML secured in 2006 auction, and the lower demand in the second quarter. partially offset by 0.6 terawatt hour or higher free market sales as part of our strategy to capture new clients and the ones recently immigrated to the free market. Now moving to slide 17 to explain the most relevant operating KPIs of our network business that are fundamental to answer countries' gratification. The energy distributed in first half 2020 decreased by 6% when compared with the first half 2019, mainly due to the lockdown measure applied by the government in Santiago. Our customer base increased by 43,000 clients when compared to the first half last year, with the last year reaching 1.99 million of clients. Under the suggestion of our distribution business, we continue to improve the quality of our service. And we have reached 2,249 telecontrol equipment installed in our grid. In the next two years, we are planning to add 585 additional units. To guarantee the system reliability and availability, we continue to focus on the critical area for SAIDI and SAIFI. replacing approximately 76 kilometers of cables in our low-tension grid, and executing approximately 14 kilometers of medium-voltage grid extension and reinforcement in the first half of 2020. Despite the logistic restrictions coming from social arrests and, lastly, from the pandemic situation, our interruption in the society decreased by 13%. Finally, as part of our plan of system quality and resilience, we were able to reduce of 53% the power interruptions due to adverse weather conditions in our networks. On page 18, let me go through our next network's main projects. On the high-voltage investment plan, We have concluded important interconnection projects in our concession area, introducing different measures to continue improving the resilience and the management of our network. On the medium voltage side, during the first half of 2020, we have concluded the construction of 52 kilometers of network and installation of 169 telecontroller equipment. We will continue to perform important civil and electric works to cope with the expansion of the mobility segment and to improve the electrification of the country. Let's move to analytics and digitalization on slide 19. Despite the COVID outbreak, we continue to consolidate leadership on electric mobility and on electrification. On 1st August 2020, we have secured new contracts on public lighting, upgrading the lighting infrastructures, with lead bringing a more efficient system in favor of the local municipalities. On supporting the e-mobility in the country, we have signed a partnership with Annex Shell, implementing fast charges for e-vehicles in Annex facilities. Our company will be responsible for the maintenance of all the charging units to be installed. Moreover, We have secured new contracts with large real estate groups to provide new charging infrastructure to their projects. In June, we put into operation additional 150 electric buses in the metropolitan region of Santiago. Additionally, we are promoting the use of and more efficient and clean technologies at the use of electric buses combined with solar energy and storage charging systems for the mining industries. Finally, and thanks to the collaboration with other public and private partners, we continued our effort to promote the use of efficient heating in order to replace the use of wood to contribute to the reduction of carbon emissions and particulates in Chile. Almost 7,000 devices have been installed since 2017, and we are estimating to avoid 22,000 tons of CO2 equivalents in Italy. Now, I will hand over to Giuseppe for the analysis of the results.