Companhia Energetica De Minas Gerais Sa · BMFBOVESPA:CMIG3
Companhia Energetica De Minas Gerais Sa — Q3 2021 Earnings Presentation
25 slides from Companhia Energetica De Minas Gerais Sa's earnings presentation, Nov 12, 2021
Slide 1: 3Q21 Results
3Q21 RESULTS ESSA É A FONTE DA NOSSA ENERGIA
Slide 2: Disclaimer
2 DISCLAIMER Certain statements and estimates in this material may represent expectations about future events or results, which are subject to risks and uncertainties that may be known or unknown. There is no guarantee that events or results will occur as referred to in these expectations. These exp
Slide 3: Highlights 3Q21
HIGHLIGHTS 3Q21 Ebitda and Robust growth in 9M21: Ebitda R$ 6.3 bn (up 53.6% YoY); Net profit Net profit R$ 2.8 bn (up 75.1% YoY) Cemig D Opex and Ebitda of Cemig D within regulatory parameters: (Distribution) – Opex: R$ 279 mn – below the regulatory level; Opex and Ebitda Ebitda: R$ 267 mn – above
Slide 4: Sale of Renova
4 Sale of Renova In line with Cemig’s strategic planning and disinvestment program • Sale to Angra Partners ▪ Total amount R$60 mn (shares + receivables) ▪ Earn-out subject to liquidity events specified in the contract • As well as the amounts received, the sale: ▪ Frees up management efforts ▪ Enha
Slide 5: Execution of investment program
5 Execution of investment program R$ 1.4 bn invested up to September 2021 Planned for 2021 Generation 205 R$ 96 mn 214 Expansion and modernization of generation 186 Total Transmission R$ 2.9bn R$ 106 mn Strengthening and upgrading – with increase in RAP 2,320 Distribution Distribution Generation R$
Slide 6: Mais Energia Program ("More Energy")
6 MAIS ENERGIA PROGRAM - (“MORE ENERGY”) The Mais Energia program will amplify Cemig’s transformation capacity, providing more quality, safety and reliability in the system to meet clients’ needs. 200 new substations • bringing the total to 615 in operation until 2027 • 22 energized by December 2021
Slide 7: The Minas Three-Phase Program
7 The Minas Three-Phase Program Better Reliability and Quality in service to clients in the countryside Conversion of these networks from single-phase to three-phase 3~ Interconnections for operational flexibilities and automation of protection systems Transforming subsistence agriculture into agrib
Slide 8: Market recognition
8 Market recognition Cemig once again wins the Transparency Trophy – for companies with distinctive transparency practices in their financial statements – in the category Companies with net sales above R$8 billion. Cemig was a finalist in the 2021 Abradee Awards: 2nd-placed in the Evolution in Perfo
Slide 9: Best ratings in Cemig's history
9 Best ratings in Cemig’s history Upgrades of Cemig’s ratings reflect • reduction of leverage and improved operational performance Investment grade Speculative grade Brazilian scale AAA AA+ AA AA- A+ A A- BBB+ BBB BBB - BB+ BB BB- B+ B B- 2009 Global scale 2018 2021 Investment grade Speculative grad
Slide 10: Quality indicators
10 Quality indicators Our investment in electricity distribution enables us to deliver reliable service with quality to our customers 11.32 11.03 7.76 7.39 7.30 10.73 6.67 6.56 10.44 10.08 11.18 10.42 10.56 5.44 5.13 4.89 4.86 4.74* 9.57 9.46* 2017 2018 2019 2020 Sep-21 2017 2018 2019 2020 Sep-21 An
Slide 11: Cemig D: Combating default
11 CEMIG D: Combating default Intensified collection activities, and greater efficiency in combating default, helped in producing a lower-than- Receivables Collection Index estimated default provision = collection/billing, % 12-month moving averages 98.55 • Collection index reached 98.55% in 3Q21 •
Slide 12: Cemig D: Combating energy losses
12 CEMIG D: Combating energy losses New initiatives to combat losses have made a significant contribution to reduction, converging toward the regulatory limit. 7,000 6,371 6,613 6,559 6,375 15 6,000 14 12.49 12.71 12.59 5,000 13 4,000 11.63 12 3,000 11.51 11 11.22 11.43 11.30 2,000 10 1,000 9 - 8 20
Slide 13: Results
RESULTS ESSA É A FONTE DA NOSSA ENERGIA
Slide 14: Main factors in the 3Q21 results
14 Main factors in the 3Q21 results Strategy of giving more visibility to Trading Cemig H ▪ Segregation of the Trading business ▪ Transfer of contracts from Cemig GT to the holding company. Volume of electricity distributed 4.3% higher YoY: ▪ Captive market: 1.2% higher Cemig D ▪ Transport for clien
Slide 15: 9M21: Cemig net profit
15 9M21: Cemig net profit Economic recovery in Cemig’s concession area boosted results Ebitda Net profit +53.6% +19.1% +75.1% +6.7% 6,345 2,790 4,441 1,743 1,860 4,132 3,729 1,593 9M20 9M21 9M20 9M21 9M20 9M21 9M20 9M21 IFRS IFRS recurring recurring IFRS IFRS recurring recurring Ebitda Profit Adjust
Slide 16: Cemig's net profit in 3Q21
16 Cemig’s net profit in 3Q21 Higher profit in 2021, even with effects of 3Q fall in reservoir levels, with lower GSF Ebitda Net profit +29.5% –27.3% –2.8% +6.4% 1,910 1,475 1,380 1,469 579 678 659 421 3Q20 3Q21 3Q20 3Q21 3Q20 3Q21 3Q20 3Q21 IFRS IFRS recurring recurring IFRS IFRS recurring recurrin
Slide 17: Cemig GT: net profit in 3Q21
17 Cemig GT: net profit in 3Q21 Trading strategy minimizes impact of GSF on results Highlight > transfer of part of trading contracts to Cemig H in 3Q21 Ebitda Net profit +35.4% –37.5% –82.3% 799 198 590 590 37 369 35 -210 3Q20 3Q21 3Q20 3Q21 3Q20 3Q21 IFRS IFRS recurring recurring recurring recurri
Slide 18: Market of Cemig D in 3Q21 – GWh
18 Market of Cemig D in 3Q21 – GWh Resumption of economic activity boosted growth of energy market Energy injected - GWh Cemig D: billed market + transmission +86.9% 118 +4.3% 91 797 Distributors +29.7% 512 831 1,175 11,319 11,809 1,143 Other 274 1,357 –4.1% 1,260 Rural +2.8% 3Q20 3Q21 5,278 +7.9% 5
Slide 19: Cemig D: net profit in 3Q21
19 Cemig D: net profit in 3Q21 Factors in robust 3Q result include: ▪ Growth of the energy market ▪ Reduction of default and energy losses Ebitda Net profit –12.7% –10.1% +24.3% +28.5% 803 722 458 711 400 393 572 306 3Q20 3Q21 3Q20 3Q21 3Q20 3Q21 3Q20 3Q21 IFRS IFRS recurring recurring IFRS IFRS rec
Slide 20: 3Q21: Consolidated operational costs and expenses
20 3Q21: Consolidated operational costs and expenses Operational expenses below the regulatory benchmark +61.2% 8,308 PMSO costs – 3Q21 vs. 3Q20 879 +1.2% 5,153 1 6 PMSO 869 27 52 Purchase 7,429 20 1 869 879 of energy and other 4,284 costs 3Q20 People Profit Materials Outsourced Post- Other 3Q21 3Q2
Slide 21: Cemig D: Regulatory opex and Ebitda – Sep. 2021
21 Cemig D: Regulatory opex and Ebitda – Sep. 2021 Commitment to operational efficiency keeps indicators within the regulatory limits 2,411 666 10 5 2,132 30 66 219 68 Opex R$ 279 mn Opex: Realized / Regulatory 2018 2019 2020 9M21 105.4% 128.3% 99.5% 88.4% Regulatory PMSO Profit Post- PDVP Fines/ Pr
Slide 22: Debt profile – consolidated
22 Debt profile – consolidated Eurobond buyback transaction reduced concentration of debt in 2024, and Cemig’s FX exposure Maturities timetable – Average tenor: 3.4 years Main indexors Net debt (Debt – {Cash + Securities}): R$ 7.5 bn Total net debt (Net debt – Hedge): R$ 6.2 bn 14% US dollar 6,049 4
Slide 23: Consolidated cash flow
23 Consolidated cash flow Robust cash at end of 3Q: enables compliance with investment plan targets, and management of debt 1,894 912 876 4,918 4,285 1,366 1,338 702 51 5,805 3,855 Caixa + TVM Caixa CVA Liquidação Restituição Cash + Cash CVA Settlement PIS/Pasep & Pagamentos Payments of JCP Dividend
Slide 24: Management's priorities
24 Management’s priorities Opex within regulatory limit ✓Achieved Strengthen Cemig D’s investment program ✓Achieved DEC within regulatory limit ✓Achieved Bonds – liability management ✓Achieved The disinvestment Program ✓ Partially achieved Definitive solution for Renova ✓ Partially achieved Renew co
Slide 25: Investor Relations
Investor Relations Tel: +55 31 3506-5024 ri@cemig.com.br http:/ri.cemig.com.br ESSA É A FONTE DA NOSSA ENERGIA
Companhia Energética de Minas Gerais — Q3 2021 Earnings Presentation on 6ix