Transmissora Alianca De Energia Eletrica S.a. · BMFBOVESPA:TAEE3
Transmissora Alianca De Energia Eletrica — Taesa — Investor Presentation (April 2018)
31 slides from Transmissora Alianca De Energia Eletrica's investor presentation, April 2018
Slide 1: Institutional Presentation
Institutional Presentation April 2018
Slide 2: Disclaimer
Disclaimer Disclaimer 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
Slide 3: Energy Transmission Sector
Energy Transmission Sector
Slide 4: The Brazilian Electric Sector
The Brazilian Electric Sector 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 Generat
Slide 5: National Interconnected System (SIN)
National Interconnected System (SIN) Transmission grid has 125,000 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
Slide 6: Stable and positive regulatory framework
Stable and positive regulatory framework 3 4 Minimal 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 Over 793 counterparties. Largest user repre
Slide 7: Transmission sector divided into categories
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 and Nove
Slide 8: TAESA Transmissora Aliança de Energia Elétrica S.A.
TAESA Transmissora Aliança de Energia Elétrica S.A.
Slide 9: TAESA at a glance
TAESA at a glance The largest private player of transmission operating assets in Brazil (Categories II and III) Geographic Footprint 35 concessions with 12,140 km in 1 transmission lines Roraima Amapá R$ 2.9 billion contracted Annual Maranhão 2 Permitted Revenues (“RAP”) for 2017/2018 cycle Amazonas
Slide 10: Proven growth track-record
Proven growth track-record Taesa’s current footprint Track-record of growth Brownfield Projects Greenfield Projects Transmineiras (25%) RAP: R$ 24 mn Mar-18 ERB1 (50%) RAP: R$ 138 mn Nov-17 Miracema (100%) Apr-17 RAP: R$ 61 mn EDTE (2)(50%) Oct-16 RAP: R$ 32 mn Mariana (100%) Apr-16 RAP: R$ 14 mn Ja
Slide 11: Scale and profitability
Scale and profitability Taesa’s operational and financial results stand out amongst its transmission peers 1st 2017 EBITDA and EBITDA Margin 2nd RAP 2017/2018 Cycle (R$ mn) (R$ mn) 88.5% 80.7% 76.0% 3,4001 1,536 2,902 1,372 1,3511 1,552 (RBSE) 747 (RBSE) 1,292 1,848 58.6% 604 1st Operational Brazili
Slide 12: Optimized corporate structure
Optimized corporate structure Taesa’s 35 concessions are grouped into 10 concessions at the holding company. In addition, Taesa has 5 concessions in which it holds a 100% stake and 20 other concessions. Operational 59.2% of total RAP 100% 100% 49% 25% 53% 39% 100% 100% 100% 50% 50% 50% São ATE III
Slide 13: Business model focused on growth with solid cash generation
Business model focused on growth with solid cash generation Combination of growth, cash generation and deleveraging Total RAP (R$ million) 2,902 2,818 2,157 2,259 1,988 1,850 Consistent growth, reflecting financial 1,094 794 831 discipline Cycle Cycle Cycle Cycle Cycle Cycle Cycle Cycle Cycle 2010/1
Slide 14: Consistent operational efficiency has resulted in high margins
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% EBITDA margin1 Strict cost control and 80.0% high margins 2009 2010 2011 2012 2013 2014 2015 2016 2017 (R$ million) Synergy 3.0 3.1 3.2 3.1 2.7 2.7
Slide 15: Indebtedness
Indebtedness Debt Maturity Profile R$ mn Net debt of R$ 2.409 mn, down Corporate Credit 723.9 661.6 18.9 % y.o.y. Rating 1.5x Net debt / EBITDA (national scale) 373.9 372.8 371.3 • Fitch: AAA(bra) 250.9 251.2 • S&P: brAA- • Moody’s: Aaa.br 2018 2019 2020 2021 2022 2023 2024 Debt Profile Debt Term Ca
Slide 16: Current Projects
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Slide 17: Current projects
Current projects CONCESSION RAP1 CAPEX ANEEL ESTIMATED (R$ mn) (R$ mn) PARTNERSHIP START CONCLUSION Auction May June 013/13 Mariana 2014 14.3 107 100% Taesa 2019 Lot A December 2013 Miracema June December 63.5 276 100% Taesa Auction Lot P 2016 2019 013/15 April 2016 25% Taesa EDTE3 December 64,2 25%
Slide 18: Project - Mariana
Project - Mariana Auction 013/13 - December 2013 • Estimated Conclusion: May, 2019 • Project Status: • Permission license issued in March, 2017 and installation license estimated for Jun, 2018. • Request for extension of the completion period under analysis by ANEEL (schedule and economic rebalancin
Slide 19: Project - Miracema
Project - Miracema Auction 013/15 - April 2016 • Estimated Conclusion: December, 2019 • Project Status: • Executive project in progress. • All licenses acquired: permission and installation licenses of TL1 230 kV, TL1 Miracema-Lajeado 500 kV, Substations Miracema, Lajeado and Palmas; • Performed Cap
Slide 20: Projects - Janaúba, Aimorés, Paraguaçu and ESTE
Projects - Janaúba, Aimorés, Paraguaçu and ESTE Auction 013/15 2nd Part - October 2016 Janaúba: • Estimated Conclusion: February, 2022 • Project Status: Basic project is in final approval phase (ANEEL/ONS). finalization of layout/topography deployment activities; beginning of executive project and e
Slide 21: Project - ERB1
Project - ERB1 Auction 005/16 - April 2017 • Estimated Conclusion: August, 2022 • Project Status: • Signing of the concession agreement on August 11, 2017. • Basic project in environmental development and licensing in progress. • Performed Capex until Dec/2017: R$ 14.3 million • Estimate Capex for 2
Slide 22: Project – EDTE1
Project – EDTE1 Auction 013/15 - April 2016 - Lot M acquired by Taesa and ENTE on March 26, 2018 • Estimated Conclusion: August, 2022 • Project Status: • Basic project filed at ANEEL and already approved at ONS. Environmental licensing in progress; • Performed Capex until Dec/2017 : R$ 2.5 million •
Slide 23: Growth Opportunities
Growth Opportunities
Slide 24: Sector with significant room for growth
GREENFIELD 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 Estimated (Eg.:Jirau, Belo Monte, Capex R$ billion and Santo Antônio) 2
Slide 25: Historical trends in auctions' conditions
GREENFIELD Historical trends in auctions’ conditions 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 Discount WACC 40.5% 33.7% 36.5% 10.3% 10.0% 23.1% 25.1% 8.4% 1
Slide 26: Expectation for new auctions in 2018
GREENFIELD Expectation for new auctions in 2018 It is estimated that the Brazilian government will hold 2 transmission auctions in 2018 with more than R$ 16 billion in investments Maintaining financial discipline and focused on assets with returns that generate value to the business, TAESA is strate
Slide 27: Taesa's participation in the auction 002/2017
GREENFIELD 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 Field recognition Attractive lots for Bidding on all 7 lots Winning discounts with careful the Company in enrolled, following w
Slide 28: Uniquely positioned to capture M&A opportunities with attractive returns
BROWNFIELD Uniquely positioned to capture M&A opportunities with attractive returns Brazilian Total RAP1 (Concession Category II and III) (R& mn) 3.499 1.175 4,674 1.137 1.986 3,123 One of the largest players 2.329 573 2,902 in the sector and with an 622 686 1,308 extensive capability in 308 905 1,2
Slide 29: Corporate Governance
Corporate Governance
Slide 30: Solid Corporate Governance Practices and Skilled Management
Taesa’s Corporate Solid Corporate Governance Governance Practices and Skilled Management Balanced Decision-Making Structure Among Controlling Superior Governance Practices Shareholders Shareholders Agreement Control Block1 Free Float CEO and CFO/IR must be: i) professionals with proven experience
Slide 31: Investor Relations
Investor Relations e-mail: investor.relations@taesa.com.br phone: +55 21 2212-6060 www.taesa.com.br/ri 31