Companhia Energetica De Minas Gerais Sa · BMFBOVESPA:CMIG3

Companhia Energetica De Minas Gerais Sa — Q3 2020 Earnings Presentation

23 slides from Companhia Energetica De Minas Gerais Sa's earnings presentation, Nov 17, 2020

  1. Slide 1: Results for 3Q20

    Results for 320 _ CEMIG

  2. Slide 2: Disclaimer

    Disclaimer 2 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.

  3. Slide 3: Highlights

    Highlights 3 Operational For the first time, Opex of Cemig D is below the regulatory limit: R$ 127 efficiency million below the limit in 9M20. Reduction in Continuous reduction in financial leverage, reaching 1.55x of consolidated financial leverage EBITDA adj. in 3Q20. Strong cash generation Consol

  4. Slide 4: Ratings – Focus on credit quality

    Ratings – Focus on credit quality 4  Fitch and Moody’s upgraded Cemig’s ratings; Standard & Poor’s upgraded Outlook to Positive Investment Grade Speculative Grade AAA AA+ AA AA- A+ ++ A- BBB+ BBB BBB- BB+ BB BB– B+ B B- CCC CC F RD/D Bond Investment Grade Speculative Grade AAA AA+ AA AA- A+ ++ A- B

  5. Slide 5: CEMIG D: Combating default

    CEMIG D: Combating default 5 Billing Collection Ratio  Combating default is a major challenge in 2020, (Actual revenue / Billing), % due to the pandemic restrictions. 101.4% Disconnections: 237,000 in August through 98.2% 98.5% 98.2% 96.6% 94.4% 92.6% 93.0% October. 95.65% 89.1%  R$ 231 mn reversa

  6. Slide 6: Execution of investment program (to Sep. 2020)

    Execution of investment program (to Sep. 2020) 6 Generation 6% 10% R$ 76 million Expansion and modernization of plants 5% Investments Transmission R$ 1.2 bn R$ 121 million Strengthening and upgrading – with increase in RAP Estimate for 2020: R$ 1.8 bn Distribution R$ 960 million Investments in maint

  7. Slide 7: Cemig D – quality indicators

    Cemig D – quality indicators 7 Improving indicators – evidence of our commitment to service quality 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 9.32 5.37 5.44 5.13 4.89 4.63 2016 2017 2018 2019 Sep. 2020 – 2016 2017 2018 2019 Sep. 2020 LTM – LTM Annual limit DECi A

  8. Slide 8: Cemig D – Distribution: Load figures

    Cemig D – Distribution: Load figures 8 Significant market recovery 6,176 5,997 5,939 MWaverage +179 MW average +3,0% -620 MW average -10,4% 2019 2020 5,319 Preliminary Jan Fev Mar Abr Mai Jun Jul Ago Set Out Nov Dez Own load –400 MW average –44 MW average Free Clients –220 MWaverage +222 MW average

  9. Slide 9: Cemig GT – Load figures for Free Clients

    Cemig GT – Load figures for Free Clients Significant market recovery Total load 2,029 1,988 2,041 1,983 1,931 1,943 1,873 1,706 1,748 375 MW average 1,666 MW average +22.5% Preliminary jan fev mar abr mai jun jul ago set out Load – incentive-bearing Load – conventional 1,281 1,253 798 1,223 1,217 78

  10. Slide 10: 3Q20 Results and Analysis

    3Q20 RESULTS AND ANALYSIS

  11. Slide 11: Main factors in 3Q20 results

    Main factors in 3Q20 results 11 Cemig H Cemig GT  Light revalued at market – reduction of R$ 136 million,  Marking to market of Eurobond: Impact on profit is R$ 90 million  Negative effect of R$ 12 mn in 3Q19 (Stock price: R$ 14.50/share on 9/30/20, and R$ 22.75/share on 11/13/20)  Negative effe

  12. Slide 12: Marking to market of Eurobond and hedge instruments

    Marking to market of Eurobond and hedge instruments: 12 Temporary impact on Financial expenses on pressure from the exchange rate, reflecting uncertainties of domestic and international context Item Sep. 2020 Jun. 2020 Change Hedge – Swap (interest) 1,678 1,698 –20 Hedge – Call spread (principal) 1,

  13. Slide 13: 9M20 consolidated Ebitda and Net Profit

    9M20 consolidated Ebitda and Net Profit 13 Adjusted Ebitda Adjusted Net Profit +2.7% +11.9% 3,591 3,688 1,717 1,534 9M19 9M20 9M19 9M20 Ebitda Profit 9M20 9M19 9M20 9M19 IFRS 4.041 3.468 1.533 2.630 Profit/loss from discontinued operations – Light - -309 - -224 Credits of PIS, Pasep and Cofins tax o

  14. Slide 14: Cemig GT's market, 3Q20 – GWh

    Cemig GT’s market, 3Q20 – GWh 14 Billed market + Transport +1.4% 11,162 11,319 91 92 +1.1% 880 831 –5.6% 1,059 1,142 +7.8% 4,896 5,278 1,260 –16.8% 7.8% 1,514 5,060 5,342 +5.6% 6,266 6,041 –3.6% 2,558 2,652 +3.7% 3Q19 3QQ20 3Q19 3Q20 Final consumers Total energy carried Residential Industrial Commer

  15. Slide 15: 3Q20 Consolidated Ebitda and Net Profit

    3Q20 Consolidated Ebitda and Net Profit 15 Adjusted Ebitda Adjusted Net Profit +24.3% +77.0% 1,329 644 1,069 364 3Q19 3Q20 3Q19 3Q20 Ebitda Profit 3Q20 3Q19 3Q20 3Q19 IFRS 1,424 195 545 -282 Profit/loss from discontinued operations - -309 - -224 FX exposure – Eurobond - - 161 8 Remeasurement – Light

  16. Slide 16: Cemig GT: 3Q20 Ebitda and Net Profit

    Cemig GT: 3Q20 Ebitda and Net Profit 16 Adjusted Ebitda Adjusted Net Profit +60.9% +209.4% 539 164 335 53 3Q19 3Q20 3T19 3T20 Ebitda Profit 3Q20 3Q19 3Q20 3Q19 IFRS 539 76 3 -134 Tax provisions – INSS tax on profit shares - 259 - 179 FX exposure – Eurobond - - 161 8 Adjusted 539 335 164 53

  17. Slide 17: Cemig D: 3Q20 Ebitda and net profit

    Cemig D: 3Q20 Ebitda and net profit 17 Adjusted Ebitda Adjusted Net Profit -7.6% +22.4% 619 572 306 250 3Q19 3Q20 3Q19 3Q20 Ebitda Profit 3Q20 3Q19 3Q20 3Q19 IFRS 803 -145 458 -316 Reversal of provision: Minas Gerais State -231 - -152 - Tax provisions – INSS tax on profit shares - 764 - 566 Ajdusted

  18. Slide 18: 3Q20: Consolidated operational costs and expenses

    3Q20: Consolidated operational costs and expenses 18 Programs implemented reduced costs without compromising service quality –20.6% PMSO costs – 3Q20 vs. 3Q19 6,486 PMSO 818 5,153 –4.7% +76 869 -14 14 2 5 5 27 5,668 832 Non- 793 4,283 manageable 3Q19 3Q19 Personnel Materials Post- Outsourced Others

  19. Slide 19: Cemig D: 9M20 Regulatory Opex and Ebitda

    Cemig D: 9M20 Regulatory Opex and Ebitda 19 557 227 37 80 24 41 69 Opex 2,040 1,772 2,167 Opex within regulatory target R$127 million Regulatory PMSO Profit Fines Provisions Default Realized PDVP Post- opex shares offestting provision Opex retirement 6 127 194 Ebitda 1,901 1,828 R$ 73 million Regula

  20. Slide 20: Debt profile – consolidated

    Debt profile – consolidated 20 Effective strategy reduced costs and leverage Maturities timetable – Average tenor: 3.9 years Main indexors Net debt (Debt – Cash and Securities): R$ 10.6 bn 1% Total net debt (Net debt – Hedge): R$ 7.3 bn 9,027 US dollar 21% IPCA 5,519 2,013 24% 54% CDI rate 561 1,203

  21. Slide 21: Consolidated Cash flow

    Consolidated Cash flow 21 Strong cash generation in 9M20 1,380 1,426 1,280 1,177 4,173 5,519 1,289 Cash + Cash generated in The ‘Covid Pasep and Cofins Financing Investments Cash + Securities 9M20 Account’ tax escrow deposit Leasing Securities 2019 9M20 Comfortable cash position to meet commitments

  22. Slide 22: Outlook – expectations

    Outlook – expectations 22 Regulations being prepared to establish extension of period of plant concessions Solution for GSF – Cemig plants: more than 24 months Digital Modernization of the relationship with customers, suppliers and employees by updating Transformation platforms, adopting virtual ass

  23. Slide 23: Investor Relations

    Investor Relations Tel: +55 (31) 3506-5024 ri@cemig.com.br http://ri.cemig.com.br

Companhia Energética de Minas Gerais — Q3 2020 Earnings Presentation on 6ix