Companhia Energetica De Minas Gerais Sa · BMFBOVESPA:CMIG3
Companhia Energetica De Minas Gerais Sa — Q4 2020 Earnings Presentation
31 slides from Companhia Energetica De Minas Gerais Sa's earnings presentation, Mar 26, 2021
Slide 1: Cemig Results 2020
CEMIG NOSSA ENERGIA, SUA FORCA Cemig Results 2020
Slide 2: Disclaimer
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 the events or results will take place as referred to in these expectations. Th
Slide 3: 2020 highlights
2020 highlights 2020 Ebitda R$ 5.694 billion – 29.6% higher than in 2019 Ebitda Adjusted Ebitda 7.1% higher than in 2019 2020 Net profit R$ 2.864 billion – 10.3% lower than in 2019 Net profit Adjusted net profit: up 14.0% YoY 2020 DEC outage indicator: Best in Cemig’s history Quality indicator (Aver
Slide 4: Ratings – Focus on credit quality
Ratings – Focus on credit quality Even in the challenging context of Covid, the rating agencies recognized the improvement in Cemig’s credit quality Investment Grade Investment Grade TÍTUL AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+ B B- CCC+ CCC CCC- CC C D Dec 2019 Bond Mar 2021 Bond Invest
Slide 5: Best DEC indicator in Cemig’s history
Best DEC indicator in Cemig’s history Cemig works uninterruptedly to ensure provision of services with quality – reflected in improvement of its indicators 11.62 11.32 11.03 10.73 10.44 8.12 7.76 7.39 7.30 6.67 11.57 11.18 10.42 10.56 9.57 5.37 5.44 5.13 4.89 4.86 2016 2017 2018 2019 2020 2016 2017
Slide 6: GSF agreement adds concession contract periods
GSF agreement adds concession contract periods Estimated extensions of the periods of our concessions Valuation Offtake guarantee Estimated concession Estimated Item (IPCA+9.63%) Dec. MWaverage extension (months) time remaining (months) 20: R$’000 Cemig 836,284 Emborcação 500 427,801 23 76 Nova pont
Slide 7: Investment program: Execution
Investment program: Execution Investment of R$ 1.909 billion in 2020 Generation Planned for 2021 R$ 109 mn Expansion and modernization of plants 238 276 Transmission 250 R$ 153 mn Strengthening and upgrading – increase in RAP Total Distribution R$3.1 BI R$ 1,378 mn Maintenance and modernization of s
Slide 8: CEMIG D: Combating default
CEMIG D: Combating default 2020: a challenging year, due to the pandemic ÍnBilling Collection Ratio (Actual revenue / Billing), % Implantação de um programa de contingenciamento eficaz: • Effective contingency program implemented: 101.4% 98.2% 98.5% 98.5% 96.6% 98.2% 97.3% 97.1% • Daily monitoring o
Slide 9: Standardization of transmission accounting practices
Standardization of transmission accounting practices In December 2020 the CVM* issued a technical opinion on accounting practices for the transmission sector, aiming to standardize the sector’s procedures for reporting and disclosure. As a result Cemig has changed its accounting procedures for R$ mn
Slide 10: Proposal for allocation of 2020 net profit
Proposal for allocation of 2020 net profit The Board of Directors decided to submit the following proposal to the AGM: • R$1.482 billion as mandatory minimum dividend R$553 million in Interest on Equity (declared in Sep. and Dec. 2020) R$929 million in complementary dividends (proposed for decla
Slide 11: Sustainability
Sustainability Cemig takes initiatives aligned with best ESG practices and is committed to guaranteeing sustainability in all its businesses. Cemig is a benchmark in the global market for investors seeking sustainable companies – a leader in the key sustainability indices in Brazil and worldwide: in
Slide 12: 4Q20 and 2020 Results
4Q20 and 2020 RESULTS 12
Slide 13: Main factors in 2020 results
Main factors in 2020 results Equity method gain: 184.6% higher in 2020 Cemig H • R$ 356mn in 2020, vs. R$ 125mn in 2019 Volume of electricity distributed 1.1% lower • Captive market: 5.3% lower • Transport for clients: 4.4% higher Cemig D Reversal of default provision: R$ 231 mn Opex within regulato
Slide 14: Marking to market of Eurobond and hedge instruments
Marking to market of Eurobond and hedge instruments Hedge instrument mitigates effect of FX variation on results Item 2019 2020 var. Hedge: Swap (interest) 653 1,389 736 Hedge: Call spread (principal) 1,038 1,560 522 Balance of hedge – MtM 1,691 2,949 1,258 Amount of gain from swap (settlements in 2
Slide 15: 2020 consolidated Ebitda and net profit
2020 consolidated Ebitda and net profit Ebitda Net profit +29.6% +7.1% -10.3% +14.0% 5,694 3,194 2,335 4,392 4,551 4,875 2,864 2,049 2019 2020 2019 2020 2019 2020 2019 2020 IFRS IFRS adjusted adjusted IFRS IFRS adjusted adjusted Ebitda Profit Adjustments 2019 2020 2019 2020 IFRS 4,392 5,694 3,194 2,
Slide 16: 4Q20 consolidated Ebitda and net profit
4Q20 consolidated Ebitda and net profit Ebitda Net profit +78.9% +23.7% +136.0% +18.6% 1,653 1,187 1,331 619 960 522 924 564 4Q19 4Q20 4Q19 4Q20 4Q19 4Q20 4Q19 4Q20 IFRS IFRS adjusted adjusted IFRS IFRS ajusted ajusted Ebitda Profit Adjustments 4Q19 4Q20 4Q19 4Q20 IFRS 924 1,653 564 1,331 Credits of
Slide 17: Cemig GT: 2020 Ebitda and net profit
Cemig GT: 2020 Ebitda and net profit Trading activity affected by the pandemic: Ebitda Net profit +70.0% -6.8% +17.2% -36.9% 2,586 2,104 1,960 1,056 1,016 901 1,521 641 2019 2020 2019 2020 2019 2020 2019 2020 IFRS IFRS adjusted adjusted IFRS IFRS adjusted adjusted Ebitda Profit Adjustments 2019 2020
Slide 18: Cemig GT: 4Q20 Ebitda and net profit
Cemig GT: 4Q20 Ebitda and net profit Recovery in economic activity reflected increased sales to Free Market Ebitda Net profit +176.5% +45.8% +531.2% +83.3% 600 404 688 154 277 84 217 109 4Q19 4Q20 4Q19 4Q20 4T19 4T20 4Q19 4Q20 IFRS IFRS adjusted adjusted IFRS IFRS adjusted adjusted Ebitda Profit Adj
Slide 19: Cemig D: 2020 Ebitda and net profit
Cemig D: 2020 Ebitda and net profit Ebitda Net profit +4.1% -0.9% -26.9% +10.4% 2,200 2,291 2,134 2,113 1,644 983 1,085 1,202 2019 2020 2019 2020 2019 2020 2019 2020 IFRS IFRS adjusted adjusted IFRS IFRS adjusted adjusted Ebitda Profit Adjustments 2019 2020 2019 2020 IFRS 2,200 2,291 1,644 1,202 Rev
Slide 20: Cemig D: 4Q20 Ebitda and net profit
Cemig D: 4Q20 Ebitda and net profit Profit affected by higher default provision in 4Q20 • R$ 89mn in 4Q20, vs. R$ 2mn in 4Q19 Ebitda Net profit -23.1% -32.7% 602 463 392 264 4Q19 4Q20 4Q19 4Q20 IFRS IFRS IFRS IFRS 20
Slide 21: Market of Cemig D in 2020 – GWh
Market of Cemig D in 2020 – GWh Market showed resilience during the pandemic Billed market + Transport Consumption of clients that migrated from captive market to Free Market totaled 1.1% 376GWh in 2020. Without this: 45,002 44,499 • Energy carried for clients would have 341 315 –7.6% been up 2.5% –
Slide 22: Market of Cemig D, 4Q20 – GWh
Market of Cemig D, 4Q20 – GWh Strong resumption of industrial consumption in 4Q20 Billed market + Transport +2.3% 11,360 11,621 –8.2% 78 85 –18.4% 778 954 –0.9% 961 970 4,844 12.8% 5,464 1,503 –12.7% 1,722 5,414 4,939 +9.6% 6,516 6,157 –5.5% 2,689 2,886 +7.3% 4Q19 4Q20 4Q19 4Q20 Final consumers Tota
Slide 23: 2020: Consolidated operational costs and expenses
2020: Consolidated operational costs and expenses Operational expenses below the regulatory benchmark -4.6% 22,475 Manageable costs – changes, 2019–2020 21,431 5 121 3,768 PMSO 12 26 30 125 3,496 77 Purchase of 3,768 -7,2% energy, and Other costs 18,707 3,494 17,431 2019 2019 Pessoal Personnel PLR P
Slide 24: 4Q20: Consolidated operational costs and expenses
4Q20: Consolidated operational costs and expenses Operational expenses below the regulatory benchmark +10.2% 6,333 5,749 PMSO costs – 4Q20 vs. 4Q19 944 PMSO 1,179 45 70 8 15 125 0 Purchase of 92 energy, and 5,389 Other costs 4,570 1179 -19,9% 944 4T19 Pessoal PLR Material Serviço de Pós Baixa / Outr
Slide 25: Cemig D: 2020 Regulatory Opex and Ebitda
Cemig D: 2020 Regulatory Opex and Ebitda R$ mn 2,941 681 43 2,927 41 55 139 297 92 Opex within regulatory Opex target - by: R$14 mn Regulatory Opex PMSO Profit shares Post-retirement Voluntary Fines, offsetting Provisions Doubtful debtors Opex, realized severance allowance program 2,396 14 125 6 2,2
Slide 26: Debt profile – consolidated
Debt profile – consolidated Debt profile – consolidated Maturities timetable – Average tenor: 3.8 years Main indexors Net debt (Debt – Cash and securities): R$ 9.2 bn 1% Total net debt (Net debt – Hedge): R$ 6.3 bn 15% Dollar 8,372 5,805 IPCA 52% 2,057 32% CDI 1,209 80 1,124 1,449 Others Cash + 2021
Slide 27: Stable cash flow
Stable cash flow Strong cash generation in 2020 1,380 2,373 1,404 1,706 5,811 5,805 1,289 Cash + Securities Cash generated Covid account Court escrow Financing / Investments Cash + Securities 2019 deposit dividends 2020 (Pasep+Cofins) Comfortable cash position to meet commitments assumed and face ec
Slide 28: Management’s priorities
Management’s priorities Opex within regulatory limit Achieved Strengthening of Cemig D’s Investment Program Achieved DEC within regulatory limit Achieved Optimization of capital allocation Partially achieved Definitive solution for Renova Partially achieved Renewal of concessions In progres
Slide 29: Expectations for 2021
Expectations for 2021 Directives for future success Organizational Development of an organizational culture project culture – further building/strengthening our corporate values. Conclude review of strategic planning, aiming for “focus to achieve”: Strategic – priority for generation, transmission a
Slide 30: 26th Annual Cemig Meeting with the Capital Markets
26TH ANNUAL CEMIG MEETING WITH THE CAPITAL MARKETS Cemig 28 YOU April 30
Slide 31: Investor Relations
Investor Relations Tel: +55 31 3506-5024 ri@cemig.com.br http:/ri.Cemig.com.br 31
Companhia Energética de Minas Gerais — Q4 2020 Earnings Presentation on 6ix