Enel Chile S.A.

Good day, ladies and gentlemen, and welcome to Enel Chile Q4 and Full Year 2021 Results Conference Call. My name is Gigi, and I will be your operator for today. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. During this conference call, we may make statements that constitute forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect only our current expectations, are not guarantees of future performance, and involve risks and uncertainties. Actual results may differ materially from those anticipated in the forward-looking statements. as a result of various factors. These factors are described in Enel Chile's press release reporting its Q4 and full year 2021 results. The presentation accompanying this conference call and Enel Chile's annual report on Form 20F including under risk factors. You may access our Q4 and full year 2021 results press release and presentation on our website www.nl.cl, and our 20F 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, and El Chile undertakes no obligation 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 Clem, Head of Investor Relations of Enel Chile. Please proceed.

Buenas tardes, good afternoon, and welcome to Enel Chile's fourth quarter and full year 2021 results presentation. Thank you all for joining us today. I am Isabella Clem, the Head of Investor Relations. Let me remind you that our presentation and related financial information are available on our website, www.nl.cl, in the investor section, and in our app, Investor. In the final of the presentation, there will be an opportunity to ask questions via phone or webcast chat through the link, Ask a Question. Joining me this morning, this afternoon, our CEO, Paolo Palotti, and our CFO, Giuseppe Cuccarelli. In the following slides, Paolo will open the presentation with the main highlights of our company performance and strategic updates. Then Giuseppe will walk us through our financial results. A replay of the call will be available, and as always, our IR team will continue to be available to provide you with financial information you may need concerning the figures that are in this presentation. Let me remind you that media participants are connected only in this mode. Thank you all for your attention, and now let me hand over to Paolo.

Thank you, Isabella. Good morning, and I would say good afternoon at this stage, and thank you for joining us. As we have already commented during our previous calls, the Chilean electricity system has been affected by several incontemporary phenomena that put under pressure its dynamics and stability. In terms of ideology, the country is facing one of the driest periods of its history. The overall inflow levels of 2021 have been the lower of all hydrological conditions, while the level of basins continues to be poorer, with important consequences on correlated sectors like the electric and agricultural ones, among others. Furthermore, an higher demand for commodities as a consequence of larger support for thermal generation came in a year of increased pressure at global level and lack of availability of Argentinian natural gas during almost the first nine months of 2021. The combination of all these effects, in addition to structural delay of renewable project at country level, constrain our 2021 margins and our cashflow generation capability. The latter one also affected by such laws as basic service law and the price stabilization mechanism. We already mentioned the several actions we put in place since the first month of 2021 to improve gas availability, buying additional energy cargos to supply our plants at first, and then to sell gas in the system, being the last important energy gas in the country for the year. In this challenging scenario, with tough conditions imposed by the duration of the pandemic, we have been able to advance with our renewable project, increasing of 900 megawatts. This took capacity over the period. Additional projects are ongoing. I will recall you later. We have also started to link the issue of new credit lines to sustainability targets. Today, 21% stake of the total debt Is SDG linked? As we mentioned in our last strategic plan presentation, we target to achieve a 52% stake of this kind of financing by 2034. Regarding the SDG award, we are pleased to announce that we have been included in the Bloomberg Gender Equality Index for the first time. Also, we apply for the first time to the CDP climate change, obtaining a B score. This confirms that we are taking coordinated and consistent actions on climate change. Now, let's move to slide four to give you an update about the market situation. In 2021, the system has less water availability than in 2020, with poor hydrology only slightly better than the driest year recorded. That was in 1998 and 1999. The effects of melting season have been very poor and very limited because of the level of the snow accumulated in the winter period. In the second half of the year, some limited positive effect on the use of water resources derived from the issuing of the preventive rationing decree and the agreement that we reached with some communities. With the lack of Argentinian export of natural gas for the period of fall 2020, early 2021, some players are being forced to buy in the spot market to support their generation positions. facing a significant overall increase in commodity price as a consequence of the international market situation. Gas prices more than tripled from the fourth quarter 2020 to the second half of 2021. In addition, the delay of expected CODs or renewable projects at country level due also to some restrictions had a monthly effect on the system that can be considered equal to the lack of production of two CCGPs of 350 megawatts. All the above-mentioned factors led to a strong pressure to the system with an important rise in margin costs, particularly during the third quarter of 2021 and the issuing of the preventive rationing decree. the situation has improved during the fourth quarter of last year, thanks in particular to the availability return of Argentinian gas in the Chilean market that has been supplied on a stable manner until the end of the year. In the chart, in the graph in the center, the green areas illustrate the usage of natural gas coming from Argentina versus the usage of LNG, blue areas. As a result, The fourth price recovered in the fourth quarter, even if the good performance has been affected by contemporary technical outages of several thermal plants in the system. Also, important to notice that the 2021 elected demand has risen 5% over 2020. We expect that this growth will continue in 2022. Let's now and a review on the regulatory framework of the energy sector. Let's go to slide five. On transmission business, the expert panel published a discrepancy report regarding the regulatory period of 2020, 2023. Now the process is almost at the end, only pending the publication of the decree by the authorities. Considering the available information, we do not expect negative effects on the estimated tariff level already predicted. The process of distribution tariffs review is still in progress. No material advances have been made during the last month. And the final distribution tariff decree is expected to be released by the end of 2022 or early 2023. A significant review of the basic service law has been approved by the Congress and recently published, addressing the treatment of the debt incurred by the residential clients and small companies between March 2020 and December 2021. The electricity consumption threshold of 250 kilowatt-hours per month has been established to define the customers that will be subject to the effect of the loan. Customers with consumption up to 250 kWh per month will schedule the payment of their debts in 48 installments, with a limit of 15% of the average bill in 2021. The government will subsidize such quotas. If an outstanding balance will be in place at the end of the 48 installments, This will be addressed in agreement between distribution companies and governments. On the other hand, customers with over 250 kWh monthly consumption are subject to the standard rules already in place before the pandemic, with the possibility of being cut off from the service in case of not repayment of either the existing debt or the current bill. On December 31st, 2021, our total outstanding debt reached $210 million, of which $140 million can be referred to residential, being $32 million below the threshold of $250 million. Concerning the energy stabilization mechanism, according to the CNE estimate, the fund will reach its legal top of 1,350 million U.S. dollars by June 2022. As of December 21, NHL's net accounts reached 283 million U.S. dollars. Now, let's make an overview on our decarbonization process on page number six. In 2021, we successfully connected 900 megawatts of renewable projects, of which more than 90% are solar. With this milestone, we have achieved a total amount of 8 gigawatts of stored capacity, of which 70% are renewable. Such capacity, already connected to the network, will reach default production within the next month once all the tests are concluded. Let's go on slide seven. In addition to the recently connected project mentioned before, we are advancing with more than 1.4 gigawatts of additional projects. Those megawatts includes projects under construction since the last year, and the new ones already announced, like La Cabana in Rio, with facility whose construction will start in the following months, and Campo del Sol II and Sierra Gorda Solar, solar plants already under construction. Regarding our GED on green hydrogen with EMI and other partners, the wind turbine designed for high-speed wind recently arrived to Chile from Shanghai. We expect to start operation during this year, and it will be an important milestone in the development of the green hydrogen in Chile. Now let's review our network KPIs on slide number eight. We continue to deploy the digitalization of our commercial channels. In 2021, 90% of our clients' interactions were executed through digital channels. Nonetheless, the complexity introduced by the pandemic situation we have been able to enhance the quality of customer care, also thanks to the introduction of our APB app and WhatsApp interface. On the network side, our quality indicators continue to improve, supported by the increase of automation at any level of our grids. The visualization of the low voltage networks where the smart meters will have an important role in driving to lower CID figures and continue improving our overall point of service. Losses levels are plain stable, and we might see some reductions through 2022. To conclude, energy distribution improvement in 2021 reflects the easing of the sanitary restrictions and the overall economic recovery. showing a 5% increase compared to 2020 and reaching pre-pandemic levels. Now let's move to the stabilization focus on the final clients. Let's go to page number nine. Analyzing Chile is pushing on electrification of the final use of the energy. promoting the integration and development of new sustainable technologies. In January, we launched the first electrostation service in Latin America as a milestone for the growth and expansion of electromobility in Chile. This charging station, located in the strategic industrial sector of Santiago, has a total of 23 charging points to use through the Jewish Pass app. This initiative will support the reduction of 240 tons of CO2 per year. In collaboration with government authorities, last December, Analix presented the first smart square in Chile on services related to smart cities. The park has an analytic video camera, security totem, environmental sensors, and charging points, Thanks to this collaborative project with the Sub-Central Area of Telecommunications, WARP, and the Municipality of La Florida, inclusive technology is closer to everyone. Thank you, and now I will hand over to Giuseppe.