Empresa de Transporte de Pasajeros Metro S.A.
Investor Presentation Metro at a glance
Key Investment Considerations
Financial Information Metro Serves as the Backbone of Mass Transit in Santiago
Metro Overview Metro’s current network
. Metro owns and operates the entire underground transportation system in Santiago, Chile . 100% state-owned enterprise . Part of Transantiago, the city’s integrated public transport system . To December 2014, 63% of all daily trips on public transportation in Santiago use Metro . Current key subway network statistics: o 103 kilometers of track and 108 stations on 5 lines o 156 trains (1,093 cars) o 2.4 million trips per workday o 667.6 million passengers in 2014 . Financial highlights: o To December 2014 revenues of USD 464 million, adjusted Ebitda and operating profit of USD 131 million and USD 9 million, respectively o USD 6 billion in assets o No subsidy required to generate an operating surplus
Note: We define adjusted EBITDA as gross profit less administrative expenses plus depreciation and amortization 3 Metro’s Corporate History
. In 1989, Metro . In 1968, President . In 2005, Metro . Between 2010 . 2013-2018, becomes a closed Eduardo Frei starts operating and 2011 improvements to stock corporation Montalva signed lines 4 and 4A important existing lines and and is registered the decree that developments construction of with the Chilean gave birth to Metro begin at Metro, lines 6 and 3 Securities with major line Commission extensions (SVS). A board of directors is appointed to report to its shareholders
. In May 1975, the first . July 2011, Metro . 1997 Metro begins . In 2007, Metro . 2008, Metro test trip took place announces the operation of line 5 joins Transantiago, celebrates its 40th between “San Pablo” construction of two the new integrated anniversary station and “Estacion additional lines transportation Central” in Santiago. system for the Metro’s official capital city operations begin
4 Metro is the Backbone of Transantiago
Transantiago Highlights Public transportation usage in Santiago (Dec. 2014)
. Transantiago is Santiago’s integrated transport system, combining bus and subway systems . Established in 2007 in order to increase network efficiency and coverage . Transantiago uses a consolidated ticketing service for bus 63% of daily riders use Metro and Metro, that uses a contactless smart card (Tarjeta Bip!) . Metro collects 100% Tarjeta Bip! payments . Currently, there are seven private ground transportation operators (bus) in Santiago. Metro is the only operator responsible for underground transportation
$ Metro
Card Refill (POS) $
Ride Validation
Transantigo Operators Bus Service
Card Refill (POS)
5 Metro Grows Continuously to Serve Santiago
Project 63 & Network Strengthening Program (NSP) Planned layout for lines 6 and 3 . Project 63, or the construction of new lines 6 & 3, is the most significant undertaking and expansion effort in Metro’s history o 28 new stations and 37 kilometers of track extensions o Driverless trains o Improved security by additional cameras in trains and stations o Overhead power line installation o State-of-the-art information system for passengers and workers . Total estimated investment of USD 2.8 billion o 2/3 financed with government equity contributions o 1/3 financed: Bond 144A/REG-S for USD 500 Million, Commercial Bank Facility Agreement for USD 250 Million and ECA Multisource Facility Agreement for USD 550 Million
6 Metro Grows Continuously to Serve Santiago
Current and Upcoming Improvement Projects
. 126 new cars to be added to lines 1, 2 and 5 representing a 20% increase in the total fleet for those lines . Air conditioning to be installed in all line 1 cars, and 60% of line 2 and 5 cars . Refurbishment of NS74 trains (Metro’s oldest operating trains), extending their useful life by 20 years (1/4 of the current fleet) . New elevator access throughout the Metro network . Metro is upgrading the signaling system used on line 1 improve headway between trains
7 Metro at a glance
Key Investment Considerations
Financial Information Metro Benefits from Chile’s Growth and Stability
The Government of Chile owns 100% of Metro Metro enjoys a stable economic backdrop
• Chile is the highest rated Latin American country
Chile’s Sovereign Credit Ratings Metro’s Credit Ratings Ministerio Agency Rating Outlook Agency Rating Outlook de Hacienda Moody's Aa3 Stable Moody's - - S&P AA Stable S&P (*) A+ Stable Fitch A+ Stable Fitch (*) A Stable
• Chile provides Metro with a stable political and regulatory environment in an open economy with robust growth • Unemployment and GDP figures 2011 – 2014:
State agency promoting entrepreneurship and innovation
• The Government of Chile regularly makes capital
contributions to Metro • Demographics 2010 – 2012:
18.0 6.5 17.5 17.5 17.3 17.2 6.0 6.1 6.0 17.0 6.0
16.5 (population in millions) in (population (population in millions) in (population 16.0 5.5 2010 2011 2012 2010 2011 2012 Chile Santiago
Source: World Bank and INE (*) The International Rating Metro was recently ratified (04/17/15 Fitch, S & P 2/23/15)
9 Metro is Essential to Mass Transit in Santiago
Public Transportation Snapshot
. Metro offers a comfortable, safe and reliable mode of . Metro is the exclusive sales channel for the Tarjeta Bip!, transportation to 2.4 million passengers each day Transantiago’s contactless ticketing card . Transantiago is the city’s integrated public transport system, . By collecting 100% of Tarjeta Bip! payments, Metro ensures with 3.7 million daily trips approximately to 2014. payment before all other Transantiago operators . In addition, Metro, through its 5 intermodal stations, is the backbone of Santiago’s transportation system allowing for Metro Ridership seamless transfers between subways and buses
10 Non-Fare Revenues Contribute Towards Higher Margins
Non-Fare revenues
For december 2014, non-fare business accounts for 20% of Metro’s total revenue . Card Reloading (POS): Reloading service of Tarjeta Bip! at Metro ticket booths and load network surface . Intermodal: 5 intermodal stations o Metro collects fees from bus companies for the use of these stations . Real Estate: Leasing of 340 stands and commercial spaces . Advertising: Over 10,000 advertising spaces on trains and stations . Services and Communications: 284 ATMs, 500 payphones, 18 cellular antennas, 57 kilometers fiber optics, among other services
Total Revenue Sources 2014
11 Metro - Among the 14 Leading Subway Systems in the World
CoMET benchmark
. CoMET (community of metros) is an international organization of . CoMET Members: underground systems. It is a consortium of large metro systems from all over the world
. The four main objectives of CoMET are: o Develop metrics to set industry best practices o Provide benchmark information to Metro and the government o Introduce a system of measures for management o Prioritize improvement areas
. Metro de Santiago became a member of CoMET in 2008 after its integration in Transantiago
. In 2012, Metro de Santiago was awarded with the "Best American Metro“ award by Metro Rail.
. Metro de Santiago is one of the largest Metro systems in Latin America, and has reported profitable operating activities over the past 19 years
12 Metro at a glance
Key Investment Considerations
Financial Information Metro’s Solid Financial Metrics
Total Revenues (USD Million) Adjusted Ebitda (USD Million)
Non-fare revenues (USD Million) Cost per Car-Km* (CLP Thousand)
Note: We define adjusted EBITDA as gross profit less administrative expenses plus depreciation and amortization Figures have been converted from CLP to USD for the years 2014 & 2013 at a rate of CLP 606.75 & CLP 524.61 per USD 1 were used respectively; for the years ending 2012 & 2011 at a rate of CLP 479.96 & CLP 519.20 per USD 1 were used respectively (*) Cost per Car-Km is calculated as (Cost of sale + admin. expenses) / Total of Car-Km 14 Metro’s Solid Financial Metrics (Cont’d)
Debt to Capitalization* Interest Coverage (Adjusted Ebitda/Financial Expenses)
Shareholders’ Equity (USD Million) Debt/Equity
Note: We define adjusted EBITDA as gross profit less administrative expenses plus depreciation and amortization Figures have been converted from CLP to USD for the years 2014 & 2013 at a rate of CLP 606.75 & CLP 524.61 per USD 1 were used respectively; for the years ending 2012 & 2011 at a rate of CLP 479.96 & CLP 519.20 per USD 1 were used respectively (*) Debt to Capitalization is calculated as Debt / (Debt + Equity) 15 Metro’s Debt Breakdown
Debt Structure (as of Dec. 2014) Currency Breakdown (as of Dec. 2014)
Loans = USD 500 MM Bonds = USD 1,966 MM Total Debt = USD 2,481 MM Derivatives = USD 1MM Megaproject s withholding = USD 13 MM Bonds (as of Dec. 2014) Loans (as of Dec. 2014)
Non-Guaranteed = USD 1.091 MM Non-Guaranteed = USD 364 MM Total Bonds = USD 1,966MM Total Loans = USD 500 MM Government Guaranteed = USD 875 MM Government Guaranteed = USD 136 MM
Note: Figures in local currency (CLP) converted into USD (FX rate: 606.75 CLP / USD) Figures may not add up due to rounding 16 Financial Information
Balance Sheet 2011 2012 2013 2014
(USD Million) Current Assets 257 374 420 573 Non-Current Assets 5.196 5.830 5.555 5.226 Total Assets 5.453 6.204 5.975 5.800 Short-Term Liabilities 246 266 346 310 Long-Term Liabilities 2.338 2.459 2.158 2.363 Total Liabilities 2.583 2.725 2.503 2.674 Total Shareholders Equity 2.869 3.479 3.472 3.126
Total Shareholders Equity & Liabilities 5.453 6.204 5.975 5.800
Income Statement 2011 2012 2013 2014
(USD Million) Revenues 441 497 477 464 Cost of sales -379 -419 -414 -418 Gross Profit 62 78 63 46 Gross margin (%) 14,07% 15,68% 13,26% 9,82%
Admin expenses -39 -54 -48 -37 Net financial expenses -76 -88 -78 -66 Change in FX -84 65 -52 -95
Net Income -188 -52 -140 -216 Adjusted EBITDA 159 173 155 131
Adjusted Operating Profit (*) 23 11 15 9
Note: Figures have been converted from CLP to USD for the years 2014 & 2013 at a rate of CLP 606.75 & CLP 524.61 per USD 1 were used respectively; for the years ending 2012 & 2011 at a rate of CLP 479.96 & CLP 519.20 per USD 1 were used respectively (*) Adjusted Operating Profit = Gross Profit – Admin expenses (IFRS) 17 Empresa de Transporte de Pasajeros Metro S.A.
Investor Presentation