Light S.a. · BMFBOVESPA:LIGT3
Light — Investor Presentation (November 2018)
24 slides from Light's investor presentation, November 2018
Slide 1: Light S.A. Overview & Strategy
Light S.A. Overview & Strategy Rio de Janeiro 3Q18 1
Slide 2: Disclaimer
Disclaimer This presentation may include declarations that represent forward-looking statements according to Brazilian regulations and international movable values. These declarations are based on certain assumptions and analyses made by the Company in accordance with its experience, the economic en
Slide 3: Agenda: The Company
Agenda The Company 3
Slide 4: 119 Years of History
119 Years of History 2006 Walking through Light history Change of Control 1996 Rio Minas Energia SA (RME) bought the control block from EDF International. RME Privatization was composed by CEMIG, Andrade 1969 Light was privatized and Gutierrez, Pactual EP (posteriorly transferred acquired by - Elect
Slide 5: Ownership Structure
Ownership Structure CEMIG 100% 100% CEMIG RME LEPSA BNDESPAR Free Float 26.06% 10.90% 13.03% 9.39% 40.62% Former Controlling Block 49.99% 5
Slide 6: One of the Largest & Well-Positioned Utilities Companies in Brazil
One of the Largest & Well-Positioned Utilities Companies in Brazil Private One-Stop Shop Utilities Companies in Brazil1 1 Generation (1.0 GW of Installed Capacity) + Distribution (21,073 GWh Fully of Total Billed Market in 3Q18) + Commercialization (862 MWm Integrated Commercialized Energy in 3Q18
Slide 7: Agenda: 3Q18 Results
Agenda 3Q18 Results 7
Slide 8: Operational Highlights
Operational Highlights Billed Market - GWh Billed Market - GWh 1.5% 8.6% 21.179 20.752 21.072 -0.5% 6.287 6.455 5.946 2.7% 3Q16 3Q17 3Q18 9M16 9M17 9M18 DEC - Hours (12 months) FEC - Times (12 months) -32.8% -24.9% 11,42 10,28 7,67 -25.4% 6,52 5,54 4,60 -23.0% 3Q16 3Q17 3Q18 3Q16 3Q17 3Q18 5th ANEEL
Slide 9: Financial Highlights (1/2)
Financial Highlights (1/2) Net Revenue - R$ MN Net Revenue - R$ MN 35.0% 31.8% 7.473 8.614 6.534 15.3% 2.627 2.993 2.217 13.9% 3Q16 3Q17 3Q18 9M16 9M17 9M18 PMSO - R$ MN PMSO - R$ MN -0.8% 3.7% 705 763 731 -4.2% 254 244 252 3.3% 3Q16 3Q17 3Q18 9M16 9M17 9M18 9
Slide 10: Financial Highlights (2/2)
Financial Highlights (2/2) EBITDA - R$ MN EBITDA - R$ MN 7.7% 34.4% 1.206 1.254 4.0% 933 503 311 335 -33.4% 3Q16 3Q17 3Q18 9M16 9M17 9M18 Net Earnings - R$ MN Net Earnings - R$ MN 73 59 121.2% 33 6 -89.8% -62 -119 3Q16 3Q17 3Q18 9M16 9M17 9M18 10
Slide 11: EBITDA per Segment
EBITDA per Segment EBITDA per Segment EBITDA per Segment R$ Million R$ Million 34.4% 7.7% 4.0% 1.254 -33.4% 1.206 70 87 933 300 269 93 503 33 336 13 311 335 35 29 847 895 24 114 461 530 285 175 (14) (4) (2) (26) -11 3Q16 3Q17 3Q18 9M16 9M17 9M18 Distribution Commercialization Generation Services 11
Slide 12: Free Cash Flow
Free Cash Flow R$ Million 9M17 9M18 CVM EBITDA 1.140 1.153 (+/-) Equity Income 11 65 (+/-) Other Operating Revenues (expenses) 55 36 Adjusted EBITDA 1.206 1.254 Operational Improvement (-) Income Tax and Social Contribution (177) (107) (-) Interest (469) (337) Lower Cost of Debt (-/+) Accounts Recei
Slide 13: Agenda: Investment Highlights
Agenda Investment Highlights 13
Slide 14: Drivers to create value for Light's shareholders
Drivers to create value for Light’s shareholders 1 2 Positive Well- Outlook for positioned Brazilian and Regulatory Rio de Janeiro Environment Economies 4 3 Potential Healthier Debt Operational Profile Upsides 14
Slide 15: Positive Outlook for Brazilian and Rio de Janeiro Economies
1 Positive Outlook for Brazilian and Rio de Janeiro Economies Retail-focused distribution concession in Brazil’s 2nd largest metropolitan area Lower interest rates driving growth¹ Consumed energy by client segment – 9M18 LTM (GWh) GDP Brazil SELIC Interest Rate - AoP 14,2% 15% 16% 13,6% 11,0% 9,9% 4
Slide 16: Well-Positioned Regulatory Environment (1/2)
2 Well-Positioned Regulatory Environment (1/2) Distribution: Anticipation of 4th tariff review cycle to positively impact EBITDA Nov ‘13 Nov ‘18 Previous Periodic Tariff Annual Tariff Adjustments PTR Review (“PTR”) 4th Cycle 3rd Cycle Anticipation Mar ‘17 Mar ‘22 New PTR Annual Tariff Adjustments PT
Slide 17: Well-Positioned Regulatory Environment (2/2)
2 Well-Positioned Regulatory Environment (2/2) Distribution: Robust regulatory framework assures neutrality of non-manageable costs and efficiency incentives Parcel A Parcel B (Non-manageable costs) (Manageable costs) 100% Pass-through to clients Parameters set by ANEEL for every tariff cycle Return
Slide 18: Operations Opportunity to Yield Results (1/5)
3 Operations Opportunity to Yield Results (1/5) Enhancement in management of losses focusing in Non-Risk Areas Difference between losses and regulatory pass-through Non Technical Losses and Grid Load Breakdown by Area (GWh, 3Q18) 12 months 12 months -6.74 p.p. -2.53 p.p. -6.06 p.p. -2.03 p.p. 23,2%
Slide 19: Operations Turn-Around Yielding Results (2/5)
3 Operations Turn-Around Yielding Results (2/5) Feasible target in losses in non-risk areas Losses analysis Light S.A. (3Q18) vs. comparable concessionaires loss (2017¹) (%) Total Losses / Grid Load 30,7 Current Target Light’s Goal 28,3 29,3 26,7 Risk Areas Risk Areas 23,2 80.3% 80.3% 18,0 19,4 16,1
Slide 20: Operations Turn-Around Yielding Results (3/5)
3 Operations Turn-Around Yielding Results (3/5) Losses’ Strategy Evolution to reach regulatory level Phase 4 Analytical Intelligence Phase 3 Key Indicators Balance Phase 2 REN vs payment capacity equilibrium Market Discipline Greater segmentation of targets Maximize program’s Market Discipline
Slide 21: Operations Turn-Around Yielding Results (4/5)
3 Operations Turn-Around Yielding Results (4/5) Increase of the Collection Rate Collection Rate Total Collection Rate (Considering Overdue Installments) (Considering Overdue Installments) 9M17 9M18 101,3% 102,3% 100,7% 98,4% 99,8% 98,5% 104,0% 102,8% 98,2% 97,3% 99,1% 97,6% 98,6% 98,3% 97,6% 93,1% 9
Slide 22: Operations Turn-Around Yielding Results (5/5)
3 Operations Turn-Around Yielding Results (5/5) Balancing the Provisions Level Recovery Energy - REN Allowance for doubtful accounts/Gross Revenue GWh (%) 12 Meses 1.099 1.146 1.093 1.050 1.045 905 968 683 326 383 3,1 3,0 330 2,8 2,7 278 273 2,3 253 232 1,8 2,0 185 210 1,5 155 1,3 3Q16 4Q16 1Q17 2Q1
Slide 23: Healthier Debt Profile
4 Healthier Debt Profile Amortization of Consolidated Debt - R$ MN Amortization of Consolidated Debt - R$ MN Average Maturity: 3.2 years Average Maturity: 3.4 years (Disclosed in 3T18) (Pro-Forma: Including Light SESA 15ª Debenture) 3.816 3.276 540 2.106 2.003 1.807 1.406 1.189 1.119 1.109 1.039 700
Slide 24: Contacts
Contacts Luis Fernando Paroli Santos CEO, Director of Business Development and Investor Relations Fernanda Crespo Head Of Participations and Investor Relations and Energy Business & Power Purchase + 55 21 2211 2508 fernanda.crespo@light.com.br Marcio Loures Penna Investor Relations Coordinator + 55