Enel Chile S.A.

Good day, ladies and gentlemen, and welcome to the MLTLA 9M 2020 Results Conference Call. My name is Tanya, and I will be your operator for today. At this time, our participants are in a listen-only mode. After this week's presentation, there will be a question and answer session. To ask a question via the telephone, you will need to press star 1. Please be advised that today's conference is being recorded. During this conference call, we may make statements that consist forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect only our current expectations, are not guaranteed of future performance, and involve risks and uncertainties. Extra results may differ materially from those anticipated in the forward-looking statements as a result of various factors. These factors are described in NL Chile press release reporting in 9M 2020 results. The presentation accompanying these conference call and the NL Chile annual report on Form 20F including under risk factors. You may access our 9M 2020 results press release and presentation on our website at www.nlchile.org. and our 20F on the SEC's website, www.sec.gov. Readers are cautioned not to place under reliance on those forward-looking statements which speak only as our dates. A NEO-Chalet undertakes no obligations to update those forward-looking statements or to disclose any developments as a result of which forward-looking statements become inaccurate, except as required by law. I would now like to turn the presentation over to Ms. Isabella Clemes, Head of Investor Relations of Enel Chile. Please proceed.

Good morning, ladies and gentlemen, and welcome to Enel Chile's Q4 2020 results presentation. Thanks to all joining us today. I hope this finds you and your families doing well and stay healthy. I am Isabella Clemes, Head of Investor Relations. Our presentation and related financial information are available on our website, www.nl.cl, at the investor section. A replay of the call will also be available. There will be an opportunity to ask questions after the presentation. via phone or via the chat through the link, Ask a Question. Joining us today, our CEO, Paolo Palotti, and our CFO, Giuseppe Turchiarelli. Paolo, we will open the presentation with the main highlights and will give us an update on the global situation that we are facing, how the company is actively reporting, responding to it, and we'll present some updates in the execution of our strategy. Then Giuseppe will walk you through our financial results and our operational performance. Let me remind you that media participants are connected only on listening mode. As always, our IR team will continue to be available to provide you with any detailed information we may need with respect to the included information in this presentation. Thank you all for your presence and let me hand over now to Paolo. Paolo?

Thank you, Isabella. Good morning to you all. Let's start by mentioning the highlights of the period on slide two. Over the third quarter, our market context continued to be under pressure due to the downturn. Despite this unprecedented extreme scenario, our operation resilience and continued support our clients maintained. On the decarbonization of our matrix, in developing the new renewable project after industrial . We have recently announced the start of construction of the 204 megawatt solar plant, and we are going to disconnect the one by . Within the next days, we will give you more details on the new project. Aiming at decreasing city contamination and improving the switch into cleaner use of energy, we continue to boost the country's electrification and support our key clients on the new and efficient use of electricity. Consequently, during this quarter, we have developed new alliances in public transportation areas and in gas service station companies to enhance the development of our plan on electromobility to cover the route from Arica to Punta Arenas. with 1,200 charges, it means a charging point every six kilometers. On that, let me mention our initiative on hydrogen. We have recently announced our participation with Allen and the prospect partners, ENAP, Siemens Energy, and Porsche. We stole a pilot plan for a green hydrogen production through an electrolyzer fueled by electricity generated by a wind plant. This pilot project, which would be one of the largest of its kind in Latin America, will be located in the Magallanes region in the south of the country. Let's move to page three. We know the situation of COM19 is not over yet. Still, we would like to give you, in a nutshell, of how our company performed and is performing during the sanitary crisis, especially when the Chile metropolitan region was locked down. 74% of our employees continue to work from home, minimizing the contagion risk and preventing the virus from spreading. The ones that are in the field are working with extreme safety measures. 100% of our plants, and network are fully operational, which ensure our services continue. These results derive from the combination of technology, procedures, and our people and suppliers' strong commitment. Finally, but not least, we extended our compromise with our clients. Over the year, we have made available more options to access our company services, and increase the numbers of digital payment platforms available to give our clients more flexibility in remote payment. Moving to slide four, you can see our effort to support the economic recovery. We strongly believe that an acceleration of the decarbonization process and the development of renewable projects will improve country economic recovery. Since the beginning of the pandemic, We have been advocating the importance of the green economy in our current context, by renewable capacity development of the new kind of energy services, providing at the same time competitive electricity price. During this year, we have created around 3,600 new jobs in different zones of the country where our projects are in construction, promoting local hiring. Over the next month, we will see an increase in this amount, considering our construction timeline, which might add additional temporary new jobs from the beginning of 2021. In addition, as a consequence of the conversion to a cleaner matrix, we are working on job reconversion programs, providing all the required training. Besides that, let me remind you that we continue our engagement with the local communities to promote shared value, education and diversity where we are developing our new renewable projects by the execution of different social programs to exploit entrepreneur and proactive culture. The country's lockdown has impacted electricity demand in many economic sectors related to the industrial period and commerce. Several companies have reduced their operation to minimum levels and, to some extent, shut down their operation, which resulted in a significant decrease in demand impacting both generation and distribution business. This effect started in March 2020. went lower during the lockdown, and is easing with a gradual opening of the regions that started in September. Regulated demand continues to be the most effective segment in the country, despite the easing of the lockdown measures. We expect to see some improvements with the next months, considering the commercial and business sector's gradual opening. In terms of distribution, households continue to have flat performance, being primarily affected by temperatures. In our generation business, we still see an increase in our non-regulated clients' electricity demand versus last year figures. This is primarily driven by our free market existing portfolio decisions, as for example the mining companies, and by the new EPA secured by our company in the first nine months of 2020. On page 6, let's review our distribution business collection. Our efforts on digitalization continue to assure the continuity of our business without compromising our clients, employees, and supplier safety. Since the beginning of this outbreak, we have improved our customers' experience by adding new digital channels. As a result, we are one of the distribution companies with more digital options available. The number of payments made through digital channels continue to be impressive. If compared to the present ones, 77% in the third quarter of this year and 85% of September collection was derived from these channels. By September 2020, we have executed almost 62,000 agreements with clients to modulate their payments and mitigate the impact on our collection, of which 100,000 voluntary deals with the most vulnerable clients since March 2020 and 12.6 thousand under basic service built at Vubla's source. On average, we have executed more than 1 million contacts with our clients during this quarter, through target calls, SMS and other communication channels. Our collection during 2020 reached 96% and 92.4% respectively, with an accumulated and a quarter figure versus the historical level around 99%. This is mainly due to the current economic and regulatory situation, which reduced the client's payment ability and suspended the cut option for best payers. Let's go through slide 9 with a summary of our market May regulatory discussions. Starting with distribution, on the contingency front, last August the Senate and Congress have approved a new law known Basic Service Bill to benefit the most vulnerable clients of a set of services. The law identifies a cluster of vulnerable clients that have the option to postpone under request the payment of their bill for 90 days from the approval of the loan, to be repaid in full extent and through down interest. Moreover, the low state of the knock-up of service could be allowed to the cluster of clients, including the whole household sector. Let me remind that, before the rule of this law, we have already offered, on a voluntary basis, The same kind of agreement to our most vulnerable clients. Today, we have almost 13,000 clients that adopt this scheme under the Basic Server Law and 11,000 under our voluntary program. A few days ago, some centers presented a new project to modify the Basic Server Law. in order to extend the benefits until April 2021 and to give 36 installments for unpaid balances. The project is under discussion. Still on distribution, last Wednesday, Enel Distribuzione announced to the market that it would call for a national ratio order meeting to execute all the reorganizational measures to comply with the unbounding mechanism known as Giro Exclusivo. Under this extraordinary meeting, energy distribution shareholders will vote to approve the spread of energy distribution into two categories, one exclusively for distribution assets and the other solely for transmission assets. Finally, on distribution with regards to the new regulatory cycle, the government has already hired an external consultant to carry out studies on the new regulatory reference model for the new distribution regulatory cycle. We will share more details on the current framework in the next quarter as expected to release the first appraised report by first half. On slide A, let's move on the main updates on generation. On tariff stabilization mechanism, according to the clinical report published this month of October by the Chilean Energy Commission, the total balance accrued under the stabilization mechanism totals $842 million of the entire Chilean market on August 2020. At the end of September, the Chile balance totaled $320 million. In this study, the CNA also published a new estimate of balance of the stabilization mechanism for June 2021, using an average exchange rate of 800 Chilean pesos for $1.00. According to this estimate, on June 2021, the balance would reach $1,169 million. During this quarter, Chilean government presented the more details on markets gradually opening. On the document presented to the Energy Commission at this chamber, some messages were stated. All clients shall be able to choose the supplier, and the market stabilization shall be done by geographical Grado of Pays. Regulated option rules shall be revised by, for instance, including take-or-pay contracts. Two new agents shall be created, the traders and the information agents. As I mentioned, we believe that the Grado opening of the market is a natural revolution of the sector. and of the energy transition, and therefore an important step for the country that needs to be designed properly and implemented in a clear timely manner. I expect to have more updates for our next call. Now, let me recall some key elements of our decarbonization process on chart 10. We have a strong commitment to the fight against climate change and have carried out different initiatives in line with this commitment. The voluntary full disconnection of our coal power plants is part of this plan. On that, we are two months close to the disconnection of Bocamina 1 and 128 megawatt coal power plants. As I mentioned before, our coal facility commission will be finalized without accessing to the energy strategic reserve. With these achievements, we will become the first electric company to phase out our coal fleet by 2022, reaffirming our sustainable strategy, just transition policy, and promoting a circular economy perspective to contribute to the areas where the units are located. On page 11, let's see more details on our discovery strategy. This quarter, we have reached 1.3 gigawatts of renewable capacity under construction and .7 gigawatts ready to start construction in the following months. In addition to that, we are approximately 3.7 gigawatts of renewable capacity in different phases of development and other opportunities in the market that represent optionality for the future. to continue de-risking our generation portfolio from commodities and hydrology. I will give you more color on our future portfolio on our investor day planned for early December. Now, let's focus on page 12 on the two new projects announced during this quarter. As part of our strategy to de-risk our energy matrix, We have started the construction of a 204-megawatt domenico-portable type park located in the Antofagasta region. The solar plant is due to be completed by 2021. The plant will use cutting-edge technology that allows greater efficiency in capturing solar radiation. Once operational, it will produce around 589 gigawatt-hours per year, avoiding the emission 539,000 tons of CO2 into the atmosphere. On October 2, our subsidiary, Enel Green Power Chile, announced a plan to execute the first project for green hydrogen production in Chile. Together with our prospective partners, ANE, the Andes Mining and Energy Corporation, ENAM, the Chilean Oil and Gas Company, Siemens Energy and Porsche, We will install a pilot plant for green nitrogen production. This project will be located in the south of the country in the region of Magallanes, known internationally for its wind potential. Our part in this partnership will be, together with AME, supply clean energy through a wind farm to the electrolyzer for the green nitrogen production. The downstream activities and the exportation of the green fuels will be in charge of the remaining partners. This pilot project, which is subject to the local authorities' approval and the conclusion of the financial structure, is expected to be in operation by 2022. This pilot project will be the first of its kind to produce green hydrogen in Chile, and potentially one of the largest in Latin America. Now, on page 13, let's take an outlook on the other projects under construction. Today we have under construction 1.3 gigawatts of solar capacity that will be completed between 2021 and 2022. We have different projects in different stages of construction. Still in north of Chile, Cerro Palo Llano continues the expansion with 28 megawatts of additional capacity that we completed on 2021, consolidating as the only geothermal plant operating in South America. Today, we are developing an Ambition Growth Plan that will consolidate our position as the main renewable player, contributing to the fight against the climate change and supporting the economy recovery. In this vista, the Stamford Recession process might be reviewed to cope with the country's ambition under the Paris Agreement and the climate change goals. On slide 14, with reference to our generation business, we are presenting the accumulated rainfall for the most significant river basins, Maule, Biobio, Lata, and Rapel. As you can see on the right side of the slide, we recorded the recovery rainfall in the second half of June and July. reaching normal levels in most of our basins. Nevertheless, during August and September rainfall decreased notably in the country. On the other hand, there was an improvement in the levels of snow accumulated in the mountains since rains during June and July were accompanied by a colder condition once compared to 2019 figures at the lower altitude. Therefore, the accumulated NO levels are higher than those observed last year, as we can see in the image on the slide left side. Considering the current conditions, we expect the hydro generation of the second semester 2020 to range between 5.8 and 6 terawatt-hours approximately. We expect the probability of exceedance of 70% for the melting season between October and December. So, the year 2020 would be similar to the 2019. Let me remind you that regeneration with LNG is currently a natural edge of energy in the portfolio to cope with the draft, as you will see in the following slides. Still on generation, let me go through our main industrial KPIs. The total net production for the nine month period decreased by 12.1%, amounting to 14 terawatt hour. In the period, 61% of our generation came from renewable sources. The variance between nine month 20, the last year figures, came from minus one terawatt hour of a lower generation in our hydropower plants, reflecting the hydrologic performance. Minus 0.9 terawatt-hours of lower thermal production, mainly in our coal-fired plants, due to the closure of Tarapacá power plant in December 31st, 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 2.9 terawatt-hours in nine months, 2020, plus one terawatt-hour higher than nine months, 2018, due to low hydrology and marginal costs. On the other hand, our physical energy sales decreased 5.5% or one terawatt-hour, mainly explained by minus 1.6 terawatt-hours of a lower demand from distribution companies primarily relating to the termination of regulated PPAs with SAESA and ML, secured in 2006 auction, and the lower energy demand in connection to lockdowns established until August-September in different cities of the country, partially offset by plus 0.8 TWh of higher free market sales as part of our strategy to capture new clients and the ones that recently migrated to the free market. Finally, it's worth mentioning that during the first quarter 2020, our physical sales increased by 7.3% or 0.4 TWh when compared to the second quarter 2020. partially reflecting the gradual easing of the lockdowns started by the end of August. Slide 16 on distribution. The lockdown in our concession area in social hours mostly explains the decrease in the energy distributed in the period once compared to the last year's figures, and the performance of the energy losses that moved to 5.2%. Our customer base continues to expand. In this period, we have got an increase of 53,000 new clients, reaching almost 2 million clients. On the quality of our services, our interruption index, SAIDI, performed very well with 26 million, better in the period reflecting the investment done in our concession area. despite logistic restrictions coming from the social unrest and lastly from the pandemic situation. As of September 2020, we have reached more than 2,000 tele-control equipment in our grid. Moving to slide 17 on NLX and digitalization. We have executed two important strategic agreements to continue to boost Chile electric mobility during this quarter. The first one was with NP Capital, in which we have created an SPV focused on massive electric public transportation, in which we own the stake of 20%. and Chile contributed with the acquired 435 buses for Transantiago Red. The second one was with Shell, known in the country as NX, to add an NX electric charging station on Shell facilities. This agreement comes to cope with our goal to add 1,200 charging points in the country. Our company is responsible not only for the salvation and maintenance of all charging units, but also to the customer experience. During the period, we have also signed an agreement with important manufacturer brands, such as Nissan, Volvo, BMW, to supply an integrated vehicle charging solution in both the domestic and public sphere. Let's recall that during the first half of this year, we secured new projects on public lighting, aiming to upgrade the lighting infrastructure and other services as security and connection, bringing more efficient systems and favor to the local communities and municipalities. Finally, we continue promoting efficiency improvement technology for the mining industry to produce electric buses combined with solar energy and solar charging systems. I will now hand over to Giuseppe for the analysis of the results.