Axia Energia Sa · BMFBOVESPA:AXIA3
Axia Energia Sa — Brazilian Electric Power — Q3 2019 Earnings Presentation
29 slides from Axia Energia Sa's earnings presentation, Nov 13, 2019
Slide 1: Presentation of Results 3Q19
Slide 2: Disclaimer
This presentation may include estimates and forecasts that are not statements of facts that happened in the past they rather reflect beliefs and expectations of our management and may stand as estimates and forecasts about future events according to Section 27A of the Securities Act of 1933, as amen
Slide 3: Business Highlights
BUSINESS HIGHLIGHTS
Slide 4: Corporate Highlights
CORPORATE HIGHLIGHTS S$ Etetrobras Bill 5877/2019 sent to the National Congress on 11/05/2019 PRIVATIZATION Next steps: Discussion National Congress; privatization model defined by CPPI; Physical guarantee review by EPE; valuation of economic benefit (Grant) by CNPE Capital increase: Features Amount
Slide 5: Corporate Highlights
4 Eletrobras CORPORATE HIGHLIGHTS 50,429 MW of installed capacity R$ 1.0 billion increase in revenue GENERATION 1,035 MW of physical aggregation in 2019 4% MW growth compared to 3Q18. 70,924 Km of Transmission Lines, reduction of 105 km in 3Q19, due to sale of SPEs. TRANSMISSION R$ 24 million RAP Ag
Slide 6: Financial Highlights
FINANCIAL HIGHLIGHTS (R$ million) R$ 8,009 R$ 7,995 GROSS REVENUE 9.7% R$ 8,790 R$ 686 R$ 2,766 R$ 3,205 R$ 3,962 24% -R$ 2,260 R$716 R$1,469 R$ 2,097 43%
Slide 7: Evolution of Our Businesses
fers! Eletrobras Eletrosul EVOLUTION OF OUR BUSINESSES
Slide 8: Generation
GENERATION ~@ Eletrobras In 2019, there was 96% aggregation of 2 1,035 MW clean energy 50,429 MW m,. Installed Capacity Highlights: THERMAL 4% 30.2% of country * Belo Monte 4,870 MW INS, 4 entry of UGs 15 and 16 @l SOLAR Eletrobras with 10,010 MW in 3Q19. fea 2% 8,990MW sata rss + UHE Sinop ae 1,028
Slide 9: Sectoral Context and Performance
SECTORAL CONTEXT AND PERFORMANCE Generation Revenue went from R$ 5.13 billion to 6.12 billion, an increase of 19.3% over 3Q18 ACR (Regulated Market) ACL (Free Market) i O&M Law n° i Generation pee Exploration 1276313 Bilateral Contract CCEE peosratic cea =e (R$ million) Revenue Revenue Receita médo
Slide 10: Generation Projects Under Construction
GENERATION PROJECTS UNDER CONSTRUCTION UHE Belo Monte Largest 100% Brazilian Hydroelectric Power Plant Total capacity of the project: 11,233,1 MW Commercial Operation Capacity 3Q19: 10,010.86 MW SIN Aggregate Capacity in 2019: 2,444.44 MW Eletrobras Participation: 49.98% UHE Sinop Total capacity of
Slide 11: Transmission
TRANSMISSION —@ Eletrobras 70,924 km Eletrobras transmission lines being 64,664 km 2 230 kV THE LARGEST TRANSMISSION COMPANY IN BRAZIL 45.2% of Brazil 2019 In 3Q19, - 105 km decrease with sale of SPEs anna RS 2.8 million (bid) + R$ 24 million ie 21.5 million O&M RAP (annual allowed revenue) total ag
Slide 12: Financial Performance 3Q19
FINANCIAL PERFORMANCE 3Q19
Slide 13: Statement of Income 3Q19
STATEMENT OF INCOME 3Q19 13 R$ million 3018 3019 % 3Q18 3019 % ROL 6642 7,291 10% 6628 7,279 10% (-) PMSO. -2,233 -2,037 -9% -2,181 -1,810 -17% () Operating Costs and Expenses 1,734 1,868 © 8% += 1,720 1,850 8% (©) Operating Provisions -2,578 -1092 -58% -111 -75 -32% (+) Equity Interest 589 417 -29%
Slide 14: Gross Revenue 3Q19
GROSS REVENUE 3Q19 2 Rs 701 million IFRS + Eletrobras +9,8% + R$ 858 million Recurring 8,009 147,995 363 uA bes bit 26 70 62 8,853 63 8,790 Tam t08% = 19% = +33% =— 42% = -28% = -G 1% Gross Revenue Generation Recurring gross Generation- Generation- Transmission- Transmission - Transmission - Transmi
Slide 15: Operating Costs
OPERATING COSTS w@ Eletrobras VARIATIONS IN 3Q19 (R$ million) Consolidated 3018 3019 % 4Transmission _- R$ 74 million: lower level of investments IFRS Operating Costs 1,734 1,868 7.7% Construction Recurring Operating Costs 1,720 1,850 7.6% Charges for + R$ 96 million: transmission tariff {meee Use o
Slide 16: Personnel, Materials, Services and Other
PERSONNEL, MATERIALS, SERVICES AND OTHER @ Eletrobras (R$ million) + +R$ 125 million in Furnas: Broad Indemnity and Inepar; x + +R$ 112 million: retroactive accounting entries (CGTEE, Eletrobras, Chesf) and Consolidated 3018 3019 % EUST in Eletrosul + -R$ 12 million reversal PDC 19 (Dismissal Plan)
Slide 17: Operating Provisions
OPERATING PROVISIONS esmition) b Etetrobras 3Q18 = §=3Q19 % Guarantees 10 19 89% Contingencies ~660 -148 -78% —Chesf: - R$101 million lower GSF provision Compulsory Loan -1,518 -269 -82% 3Q18 data review of compulsory loan’s law suits PCLD - Consumers and Resellers PCLD - Financings a 5 ee earn -5 4
Slide 18: EBITDA 3Q19
EBITDA 3Q19 pros S$ Etetrobras R$ 2,081 million (R$ million) +24% +R$ 756 million Contingencies: -R$ 417 PCLD RGR: +R$ 433 ‘Ampla Indenization -R$ 111 Contingencies: -R$2.178 Prov.Furnas Outsourced: -R$ 354 C. Onerous: R$ 147 Provision Aneel CCC -R$ 690 Prov.for loses : -R$ 412 Others — R$ 46 Others
Slide 19: Net Income
19 + 1329 Eletrobras NET INCOME 120% ~ (R$ million) + R$ 2,976 million + 43% + R$ 628 million _ Highlights: Highlights: + Adjustments EBITDA + Adjustments EBITDA + Monetary Adjustment of + Monetary adjustment ‘Comp. Loan of Comp Loan nen a ee 2.097 1,381 3,729 1,469 i || — i om 716 -2,260 Net Profit
Slide 20: EBITDA by Company 3Q19
20 EBITDA BY COMPANY 3Q19 (R$ million) Eletronuclear Eletronorte Furnas Chesf Amazonas GT Eletrosul SPEs CGTEE Eletropar 3Q19 4 Eletrobras 1,045 +5% +19% +1% +111% +1%
Slide 21: Result by Company 3Q19
21 RESULT BY COMPANY 3Q19 +s Eletrobras (R$ million) 3Q18 3Q19 Eletronuclear 155 -45% Eletronorte 723 651-10% Furnas -260 14 eae party termination +94% Chesf -561 +165% Amazonas GT 99 Lie Eletrosul 64 My: SPEs 18 sce CGTEE -201 136 +32% Eletropar 7 “116% 100% cc 012 Operations ,
Slide 22: Financial Discipline
FINANCIAL DISCIPLINE (R$ million) Net Debt ——— <30 Adjusted EBITDA Net Debt/Ebitda 26.1 25.7 23.4 23.5 dez-16 dez-17 dez-18 mar-19 jun-19 mm Net Debt ‘== Net Debt/EBITDA with RBSE t= Proforma Net Debt/EBITDA without RBSE +s Eletrobras (+) Short Term Debt (Current Liabilities) (+) Long Term Debt GROS
Slide 23: Investments Realized
INVESTMENTS REALIZED (RS MIEION) Corporate under construction Corporate Ampliation 35 70 198 Maintenance 75 368 676 54% Expansion SPEs Transmission Eletronorte R$ 70 million Chesf R$ 246.2 million Corporate under construction Ampliation, Reforcements and zl 123 386 797 48% [eet R$ 27.2 million impro
Slide 24: Eletrobras Market Value vs Book Value
ELETROBRAS MARKET S Eletrobras Market value x Book Value 2010 to 2019 (RS billion) 76.8 Book Value Market Value 2010 2011 2012 2013 2014 2015 2016 2017 2018 9M19
Slide 25: Eletrobras Destatization
LETROBRAS 2S) DE ATIZATION
Slide 26: Eletrobras Destatization
ELETROBRAS DESTATIZATION NPV Indemnification of unamortized Dequoted Plants 1 pe Economic Pe investments (Quota concession) Current Award Annual Net Revenue Discounted from PIS COFINS, R&D, TFSEE, TUST R$ 1.9 billion Annual Gross Revenue: R$ 3.5 billion New Concession 30 years old Defined bby CNPE w
Slide 27: Next Steps
NEXT STEPS S$ Etetrobras FORESEEN STEPS: COMPETENCE: Definition Model Privatization CPPI Physical Guarantee Review EPE Calculation Value Grant / Economic Benefit CNPE Approval conditions decotization Extended plants Eletrobras Capital Increase with Federal Government Dilution Eletrobras 27 rms prese
Slide 28: Future
FUTURE + Capital increase + Entry into commercial operation + Capitalization of Eletrobras SISTEMA coc -
Slide 29: Signature
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: November 12, 2019 CENTRAIS ELÉTRICAS BRASILEIRAS S.A. - ELETROBRÁS By: / S / Elvira Baracuhy Caval
Brazilian Electric Power — Q3 2019 Earnings Presentation on 6ix