Transmissora Alianca De Energia Eletrica S.a. · BMFBOVESPA:TAEE3
Transmissora Alianca De Energia Eletrica — Taesa — Investor Presentation (December 2020)
46 slides from Transmissora Alianca De Energia Eletrica's investor presentation, December 2020
Slide 1: Corporate Presentation
years Corporate Presentation December 2020 years
Slide 2: Disclaimer
Disclaimer years The statements contained in this document are public and available on the Company's website (www.taesa.com.br/ri). Additional information about Transmissora Aliança de Energia Elétrica S.A. (“TAESA” or “Company”) can also be obtained from this same website. The forward-looking state
Slide 3: Energy Transmission Sector
years Energy Transmission Sector years
Slide 4: Brazilian electric energy sector is divided in Generation, Transmission and Market
years Brazilian electric energy sector is divided in Generation, Transmission and Market (Distribution + Free Consumers + Traders). Fundamental Principles ▪ Safe electric energy supply ▪ Economic and financial balance among agents ▪ Social inclusion - universalization Generation Transmission Market
Slide 5: Transmission grid has 158,6 km of extension
years Transmission grid has 158,6 km of extension SIN transport 98% of national energy volume ◼ Regulated and supervised by ANEEL (National Agency of Electrical Energy) and operated by ONS (National System Operator) ◼ 30-year contracts have fixed revenues adjusted by inflation, regardless of energy
Slide 6: Stable and positive regulatory framework
years Stable and positive regulatory framework 3 4 Low credit risk RAP paid directly by generators, No volume risk distributors and free consumers with a Payments based on line availability, solid guarantee mechanism regardless of energy volume transported ▪ 991 counterparties. Largest user represen
Slide 7: Transmission sector divided into categories
years Transmission sector divided into 3 categories • Assets granted before 1999 Category 1 • Concessions renewed in 2012 for 30 years, after MP579 • Annual Permitted Revenues ("RAP") annually adjusted by IPCA since 2013 • Subject to tariff reviews every five years • Assets auctioned between 1999 an
Slide 8: TAESA Transmissora Aliança de Energia Elétrica S.A.
years TAESA Transmissora Aliança de Energia Elétrica S.A. years
Slide 9: TAESA at a glance
years TAESA at a glance One of the largest players of transmission assets in Brazil (Categories II and III) Geographic Footprint 39 concessions with 13,576 km in 1 transmission lines Roraima Amapá R$ 2.7 billion contracted Annual Maranhão 2 Permitted Revenues (“RAP”) for 2019-2020 cycle Amazonas Cea
Slide 10: Proven growth track-record
Proven growth track-record years São João 100% TAESA’s current footprint RAP: R$ 50 mn São Pedro 100% Mar-20 RAP: R$ 47 mn Feb-20 ETAU 23% May-19 RAP: R$ 7 mn Apr-19 Transmineiras 25% RAP: R$ 27 mn Dec-18 Lagoa Nova3 100% RAP: R$ 13 mn Mar-18 Ivaí 50% RAP: R$ 150 mn Nov-17 Transmineiras 25% Sant’Ana
Slide 11: Historical trends in auctions' conditions
Historical trends in auctions’ conditions years Trend of higher returns, decreasing presence of State Owned Companies and return of private sector participants to auctions provide evidence of renewed opportunities for organic growth 7 lots won by TAESA Higher returns with lower competition Discount
Slide 12: Scale and profitability
years Scale and profitability TAESA’s operational and financial results stand out amongst its transmission peers 2nd EBITDA – 9M20 2nd 2020/2021 RAP Cycle (R$ mn) (R$ mn) 91.1% 3,2121 82.9% 2,7821 2,747 89.4% 791 1,842 (RBSE) (RBSE) 1,185 947 8433 1,991 1,370 88.0% 3rd Operational Brazilian RAP2 - M
Slide 13: Optimized corporate structure
years Optimized corporate structure TAESA’s 39 concessions are grouped into 10 concessions at the holding company. In addition, TAESA has 10 concessions in which it holds a 100% stake and 19 other concessions. ✓ Operational 49.8% of total RAP 100% 100% 100% 100% 100% 100% 100% 100% 49% 49% 76% 100%
Slide 14: Business model focused on growth with solid cash generation
years Business model focused on growth with solid cash generation … Combination of growth, cash generation and deleveraging Total RAP (R$ million) 2,896 2,815 2,748 2,747 2,663 2,157 2,259 1,988 1,850 Consistent growth, 1,223 reflecting financial 794 831 discipline 2009/10 Cycle 2011/12 2012/13 2013
Slide 15: … creating value to shareholders.
years … creating value to shareholders. High dividend payout with attractive yield Dividends + 95.0% 95.0% 94.1% 92.3% 91.1% 90.7% 90.9% 91.5% 91.4% Interest on 88.1% 89.9% 86.5% Equity, and Payout IFRS 69.1% Payout 80.1% 65.5% Adjusted Payout 1.424 893 905 852 909 862 814 825 784 1.071 1.002 1.083
Slide 16: Consistent operational efficiency coupled with strong corporate management has resulted in high margins
years Consistent operational efficiency coupled with strong corporate management has resulted in high margins 89.6% 90.0% 89.7% 89.6% 89.2% 87.7% 87.5% 88.5% 85.5% 82.7% 82.9% EBITDA margin1 Strict cost control and 80.0% high margins 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 9M20 1.5% 1
Slide 17: Indebtedness profile
years Indebtedness profile In 3T20: • Net debt of R$ 4,624.3 million, a 4.3% q.o.q growth • 3.4x Net debt / EBITDA * R$ million • Average cost and debt maturity: 8.7% (nominal) and Profile of Debt Amortization 5.0 years 1,799 R$ mn Corporate Credit Rating (nacional scale) 1,740 Cash 1,105 948 • Mood
Slide 18: Brownfield Acquisitions
years Brownfield Acquisitions years
Slide 19: Acquisition of transmission operating assets totaling a RAP of R$ 161.7 million
BROWNFIELD years Acquisition of transmission operating assets totaling a RAP of R$ 161.7 million ✓ Strategic assets with great 100% Rialma I ✓ geographic complementarity and 100% synergies with TAESA’s portfolio Car ajá s ✓ 100% Assets with high operating quality and high margins ✓ 61.3% ✓1 Concessi
Slide 20: Summary of recently acquired concessions
BROWNFIELD years Summary of recently acquired concessions ACQUISITION ACQUIRED TAESA FINAL ACCOUNTING SPE RAP2 STATUS VALUE1 (R$’ 000) STAKE STAKE METHOD IN TAESA (R$’ 000) Brasnorte3 93,646 17,250 61.34% 100.0% Consolidation Concluded Eletrobras Auction 01/2018 Transmineiras 77,508 26,174 24.50%4 5
Slide 21: Greenfield Acquisitions
years Greenfield Acquisitions years
Slide 22: Projects under construction
GREENFIELD Projects under construction years EXTENSION / CONCESSION RAP1 CAPEX ANEEL ANEEL LOCATION (R$ million) (R$ million) PARTNERSHIP START DEADLINE ✓ Auction 82 km May May 013/13 Mariana 16.4 107 100% TAESA Lot A Minas Gerais 2014 20202 Concluded December 2013 Auction Miracema Lot P 90 km Tocan
Slide 23: Projects under Construction
GREENFIELD years Projects under Construction Miracema RAP/CAPEX*: 67.9 / 276 ✓ EDTE RAP/CAPEX*: 70.4 / 368 ✓ Mariana RAP/CAPEX*: 16.4 / 107 ✓ ANEEL Construction term: Dec 2019 ANEEL Construction term: Dec 2019 100% Taesa Completion date: May 2020 100% Taesa 49.99% Taesa End of concession: Jun/46 End
Slide 24: Growth Opportunities
years Growth Opportunities years
Slide 25: Sector with significant room for growth
GREENFIELD years Sector with significant room for growth Transmission system is currently the bottleneck for the sector Significant need to invest in new transmission lines Transmission grid will continue to grow Generation Focus: HPP Total (Eg.:Jirau, Belo Monte, Estimated and Santo Antônio) Capex
Slide 26: Expectation for new auctions
GREENFIELD years Expectation for new auctions The Brazilian government expects total investments of around R$ 90 billion1 for transmission in Brazil between 2021-2030 Maintaining financial discipline and focused on assets with returns that generate value to the business, TAESA is strategically posit
Slide 27: Uniquely positioned to capture M&A opportunities with attractive returns
BROWNFIELD years Uniquely positioned to capture M&A opportunities with attractive returns Brazilian Total RAP1 (Concession Category II and III) (R$ MM) 4,134 120 4.254 3,394 3,394 2,179 567 2,747 788 582 1,370 One of the largest players 777 408 1,185 in the sector and with an 482 645 1,127 extensive
Slide 28: Corporate Governance
years Governance Corporate years
Slide 29: TAESA's Corporate Governance
TAESA’s Corporate Governance years Solid Corporate Governance Practices and Skilled Management Balanced Decision-Making Structure Among Controlling Superior Governance Practices Shareholders Shareholders Agreement Control Block1 Free Float ◼ 9 votes needed to approve relevant matters on the Board of
Slide 30: Compliance, Risk Management and Audit
years Compliance, Risk Management and Audit In line with the best market practices, TAESA aims to meet additional criteria than those required by Level 2 of B3’s Corporate Governance standards. Always concerned about the continuity and maintenance of its business, the Company has implemented the fol
Slide 31: Appendix
years Appendix years
Slide 32: TAESA's participation in the auction 001/2020
GREENFIELD years TAESA's participation in the auction 001/2020 TAESA’s Performance Summary of Auction 001/2020 held on December 17, 2020 Studied Lots All 11 lots Construction Maximum Aneel Capex Winner RAP Winner TAESA Lot Period Location RAP (R$ million) (R$ million) Discount Discount (months) (R$
Slide 33: TAESA's participation in the auction 02/2019
GREENFIELD years TAESA's participation in the auction 02/2019 Studied Enrolled Acquired Lots with Bids Lots Lots Lots 4, 8, 9, 10 and 4, 8, 9, 10 and All 12 lots - 12 12 Summary of Auction 02/2019 held on December 19, 2019 Construction Maximum Aneel Capex Winner RAP Winner TAESA Lot Period Location
Slide 34: TAESA's participation in the auction 004/2018
GREENFIELD years TAESA's participation in the auction 004/2018 TAESA’s Performance Summary of Auction 004/2018 held on December 20, 2018 Construction Maximum Enrolled Aneel Capex Winner RAP Winner TAESA Studied Lot (R$ million) Period Location RAP (R$ million) Discount Discount Lots Lots (months) (R
Slide 35: TAESA's participation in the auction 002/2018
GREENFIELD years TAESA's participation in the auction 002/2018 TAESA’s Performance Summary of Auction 002/2018 held on June 28, 2018 Construction Maximum Aneel Capex Winner RAP Winner TAESA Lot Period Location RAP Studied (R$ million) (months) (R$ million) (R$ million) Discount Discount Lots 1 641 6
Slide 36: TAESA's participation in the auction 002/2017
GREENFIELD years TAESA's participation in the auction 002/2017 Studied Enrolled Acquired Lots with Bids Lots Lots Lots 2, 3, 4, 5, 6, 2, 3, 4, 5, 6, All 11 lots - 7 and 9 7 and 9 Summary of Auction 002/2017 held on December 15, 2017 Construction Maximum Aneel Capex Winner RAP Winner TAESA Lot Period
Slide 37: Project - Mariana
years Project - Mariana Auction 013/13 - December 2013 Project Concluded ✓ • Completion Deadline: May 2020 – Concluded on May 25, 2020. • Project Status: • Preliminary license (LP) issued in May 2016; • Approval of the Installation (LI) and Operation (LO) Licenses by the state environmental agency i
Slide 38: Project - Miracema
years Project - Miracema Auction 013/15 - April 2016 Project Concluded ✓ • ANEEL’s Deadline: December 2019 – Concluded on November 29, 2019 • Project Status: All environmental licenses have been obtained: Installation and Preliminary Licenses of LT 500kV, LT 230Kv, SE Palmas, SE Lajeado, and SE Mira
Slide 39: Project – EDTE
Project – EDTE years Auction 013/15 - April 2016 - Lot M acquired by TAESA and ENTE on March Project 26, 2018 Concluded ✓ • ANEEL’s Deadline: December 2019 – Concluded on January 20, 2020; • Project Status: • Preliminary License (LP) issued in June 2018; • 2nd issuance of EDTE debentures in December
Slide 40: Projects – Paraguaçu and Aimorés
Projects – Paraguaçu and Aimorés years Auction 013/15 2nd Part - October 2016 Paraguaçu: • ANEEL’s Deadline: February 2022 • Project Status: Basic project approved by ANEEL. Issued Licenses: LP in Oct/18 and LI in May/19. Approval of the right to SUDENE's tax benefit in January 2019, which will last
Slide 41: Projects – Janaúba and ESTE
Projects – Janaúba and ESTE years Auction 013/15 2nd Part - October 2016 Janaúba: • ANEEL’s Deadline: February 2022 • Project Status: The basic project is approved by ANEEL/ONS for the substations and under review for transmission lines. The design implementation/topography activities were completed
Slide 42: Project – Ivaí
Project – Ivaí years Auction 005/16 - April 2017 • ANEEL’s Deadline: August 2022 • Project Status: • Basic project was filed at ANEEL; • EIA/RIMA registered at IAP; • Preliminary License (LP) for the 230 kV installations issued in September 2018; • Change of the corporate name from Elétricas Reunida
Slide 43: Project – Sant'Ana
Project – Sant'Ana years Auction 004/18 - December 2018 • ANEEL’s Deadline: March 2023 • Project Status: Constitution of the company Sant’Ana Transmissora de Energia S.A. in January 2019; Concession Contract signed on March 22, 2019; Preliminary and Installation Licenses (LPI) for the Livramento 3 a
Slide 44: Adoption of IFRS 15 (CPC 47)
years Adoption of IFRS 15 (CPC 47) Concept based on the Construction Margin Impacts of CPC 47 Adoption: • For the beginning (initial) balance of Contractual Asset as of January 01, 2018: Adjustment accounted in Special Reserve (Shareholders' Equity) for the 2018 Fiscal Year in the amount of R$ 113.4
Slide 45: Macroeconomic impact on IFRS Revenues
years Macroeconomic impact on IFRS Revenues +1,183.4% (+6.15pp) 6.67 2.60 3.10 2.65 2.54 IGP-M 1.72 1.92 2.34 1.27 1.19 0.97 0.52 accumulated (quarter) 2017 2018 -0.20 2019 9M20 % -1.28 IGP-M: -0.86% IGP-M: 9.68% IGP-M: 3.97% -2.00 IGP-M: 11.94% IPCA: 2.80% IPCA: 4.05% IPCA: 3.27% IPCA: 1.86% +178.2
Slide 46: Investor Relations
years years Investor Relations e-mail: investor.relations@taesa.com.br telephone: +55 21 2212-6060 www.taesa.com.br/ir 46