Institutional Presentation. February 2018

Transcription

1 Institutional Presentation February 2018

2 Disclaimer Disclaimer The statements contained in this document are public and available on the Company's website ( Additional information about Transmissora Aliança de Energia Elétrica S.A. ( Taesa or Company ) can also be obtained from this same website. The forward-looking statements contained in this document relating to the business outlook, projections of operational and financial results and the growth prospects of Taesa are merely projections, and as such are based exclusively on expectations for the future of the business. These expectations depend materially on changes in market conditions and the performance of the Brazilian economy, the sector and international markets and therefore are subject to change without prior notice. EBITDA consists of net income before taxes, net financial expenses, and expenses with depreciation and amortization, and revenues. EBITDA is not recognized by generally accepted accounting principles in Brazil or by the IFRS, it does not represent a cash flow for the periods presented, it should not be considered as an alternative to net income. The EBITDA presented is used by Taesa to measure its own performance. Taesa understands that some investors and financial analysts use EBITDA as an indicator of its operating performance. Net Debt is not recognized by generally accepted accounting principles in Brazil or by the IFRS, it does not represent a cash flow for the periods presented. The Net Debt presented is used by Taesa to measure its own performance. Taesa understands that some investors and financial analysts use Net Debt as an indicator of financial performance. 2

3 Energy Transmission Sector

4 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 Generation Transmission Market 157 GW of installed capacity 10 groups control 59% of installed capacity 46% State-owned Generation sites 63% Hydro 19% Thermo 18% Other sources 125,000 km of high voltage (>230 kv) 34% State-owned Regulated tariff (annually adjusted) Distribution 80 MM Clients 30% State-owned Consumers Captive 337 TWh Free 123 TWh Source: EPE/ONS/ANEEL/Abradee/Abrate/Abraceel/IBGE/Company 4

5 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 inflation, regardless of energy volume traded Directly paid by Generation, Distribution Companies and Free Consumers Source: ONS 5

6 Stable and positive regulatory framework 3 4 No Volume Risk Payments based on line availability, regardless of energy volume transported Minimal Credit Risk RAP paid directly by generators, distributors and free consumers with a solid guarantee mechanism Over 794 counterparties. Largest user represents only 6.0% of revenues Predictable Revenues 30-year contracts with RAPs adjusted by inflation Lowest Risks Within Sector Reduced environmental and construction risks 1 Stable Regulation Federally regulated with proven track record 6 R$ 55 bn CAPEX in the next years ( )² Electric transmission needs to continue growing to support system s expansion and maintain its reliability (1) AMSE/ONS system, as of February 2018 (2) Source: PDE 2026 and Aneel auctions. Estimate for auctions in the coming years, subject to change. 6

7 Category 3 Category 2 Category 1 Transmission sector divided into 3 categories Assets granted before 1999 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 November, 2006 RAP annually adjusted by IGP-M RAP reduced by 50% in the 16th year of operations No tariff review 30-year concession term 97% operational RAP 78% total RAP Assets auctioned from November, 2006 onwards RAP annually adjusted by IPCA Subject to tariff reviews in the 5th, 10th, 15th year of the contract 30-year concession term 3% operational RAP 22% total RAP 7

8 TAESA Transmissora Aliança de Energia Elétrica S.A.

9 TAESA at a glance The largest private player of transmission operating assets in Brazil (Categories II and III) 1 34 concessions with km in transmission lines Geographic Footprint Roraima Amapá 2 3 R$ 2.85 billion contracted Annual Permitted Revenues ( RAP ) for 2017/2018 cycle EBITDA¹ of R$ 1,536 million with an EBITDA margin of 88.5% for 2017 Acre Amazonas Rondônia Pará Tocantins Maranhão Piauí Ceará Rio Grande do Norte Paraíba Pernambuco Alagoas Sergipe Bahia 4 IFRS Net Income of R$ million for 2017 Mato Grosso Mato Grosso do Sul Goiás Minas Gerais Espírito Santo Rio de Janeiro Paraná São Paulo 5 R$ 7.1 billion of market capitalization² Santa Catarina Rio Grande do Sul Operational Non-Operational (1) Consolidated Regulatory EBITDA (2) February 28,

10 Proven growth track-record Taesa s current footprint Track-record of growth Brownfield Projects Greenfield Projects ERB1 (50%) RAP: R$ 134 mn Apr-17 Miracema (100%) RAP: R$ 61 mn Apr-16 Oct-16 Mariana (100%) Dec-13 RAP: R$ 14 mn Janaúba (100%) Oct-13 RAP: R$ 175 mn Transmineiras (5%) Jul-12 Aimorés (50%) RAP: R$ 5 mn RAP: R$ 36 mn Jun-12 TBE (~49%) May-12 IPO RAP: R$ 481 mn Value: R$ 1.69 bn Mar-12 R$ 1.76 bn Paraguaçu (50%) RAP: R$ 53 mn ESTE (EATE) RAP: R$ 50 mn ETEO (100%) São Gotardo (100%) Capex + M&A: R$ 4.9 bn 1 Dividends: R$ 6.2 bn 1 IPO R$ 627 mn RAP: R$ 113 mn ETAU (52.6%) RAP: R$ 22 mn Dec-07 Nov-07 May-08 Jun-11 BRASNORTE (38.7%) NTE + UNISA (100%) RAP: R$ 717 mn GTESA/PATESA (100%) RAP: R$ 5 mn (1) Capex and dividends between 2006 and 2017 Mar-06 Nov-06 RAP: R$ 10 mn RAP: R$ 33 mn MUNIRAH (100%) RAP: R$ 36 mn 10

11 Scale and profitability Taesa s operational and financial results stand out amongst its transmission peers 1 st (R$ mn) 2017 EBITDA and EBITDA Margin RAP 2017/2018 Cycle 2 nd (R$ mn) 88.5% 1, % 1, % 1, ¹ (RBSE) 3, ,846 1,552 (RBSE) 1, % 604 1,848 1 st Operational Brazilian RAP 2 Market Share 2 nd (%) Others (State Owned) 11% 1% Others (Private) 15% COPEL 1% 6% Chesf 6% ELETRONORTE State Grid Eletrosul 6% R$ 10.2 billion 16% 23% Furnas Source: Company and ANEEL. (1) Includes the effect of the remuneration of the RBSE concession asset. (2) 2017/2018 RAP Cycle, only categories II and III. 5% CTEEP 6% Alupar 3% Abengoa (%) Total Brazilian RAP 2 Market Share State Grid 14% 13% Others (State Owned) CTEEP 1% 4% Alupar 6% Others (Private) 33% R$ 22.3 billion 5% Abengoa 9% 3% Furnas 4% 5% 3% Eletrosul ELETRONORTE COPEL Chesf 11

12 Optimized corporate structure Taesa s 34 concessions are grouped into 10 concessions at the holding company. In addition, Taesa has 5 concessions in which it holds a 100% stake and 19 other concessions. Operational 59.9% of total RAP 100% 100% 49% 25% 53% 39% 100% 100% 100% 50% 50% 50% ATE III 1 São ETAU Gotardo 2 TBE 34 Transmineiras 5 Brasnorte Janaúba Miracema Mariana ERB1 Paraguaçu Aimorés Operational Operational Operational Operational Operational Operational Under construction Under construction Under construction Under construction Under construction Under construction 4.1% 0.2% 16.8% 0.9 % 0.9% 0.4% 6.3% 2.2% 0.5% 4.8% 1.9% 1.3% Leverage Capacity and Financial Flexibility (1) TAESA does not incorporate ATE III due to fiscal benefits. (2) TAESA does not incorporate São Gotardo due to Presumed Profit ( Lucro Presumido ) taxation regimen. (3) TBE is a fantasy name to represent a group of 14 concessions, including Transmineiras concessions. (4) ESTE is the only concession of the TBE group that is under construction and represents 1.8% of the total RAP (5) On Nov 30, 2017, 25% stake of Transmineiras was transferred to Taesa from Cemig. After completing this corporate restructuring, Taesa owns directly and indirectly 30.0% of Transleste, 29.0% of Transudeste and 29, 5% of Transirapé. 12

13 Business model focused on growth with solid cash generation Combination of growth, cash generation and deleveraging Total RAP (R$ million) 2,818 2,846 1,850 1,988 2,157 2,259 Consistent growth, ,094 reflecting financial discipline Cycle 2010/11 Cycle 2010/11 Cycle 2011/12 Cycle 2012/13 Cycle 2013/14 Cycle 2014/15 Cycle 2015/16 Cycle 2016/17 Cycle 2017/18 Net debt and net debt/ EBITDA 1 (R$ million) Strong cash generation and track record of rapid 1,388 1,071 2,777 2,144 3,858 3,608 3,205 2,973 2,409 deleveraging (1) Net debt and EBITDA figures include proportional stakes at subsidiaries ETAU and Brasnorte. 13

14 Consistent operational efficiency coupled with strong corporate management has resulted in high margins 89.6% 90.0% 87.7% 87.5% 89.7% 89.6% 89.2% 88.5% EBITDA margin % Strict cost control and high margins EBITDA 1 per employee (R$ million) Synergy maximization and high scalability. Personnel costs represent approximately 65% of TAESA s costs % 99.99% 99.98% 99.97% 99.98% 99.97% 99.98% Lines availability 99.96% 99.97% Consistent operational performance Source: Company and ANEEL. (1) Consolidated Regulatory EBITDA. 14

15 Indebtedness R$ mn Debt Maturity Profile Net debt of R$ mn, down 18.9 % y.o.y. 1.5x Net debt / EBITDA Corporate Credit Rating (national scale) Fitch: AAA(bra) S&P: braa- Moody s: Aaa.br Debt Profile Debt Term Capital Structure (BV) 64% 77% 2% 0% 87% 21% 13% 36% CDI TJLP Short Term Long Term Net Debt PL (Book Value) IPCA Fixed 15

16 Current Projects

17 Current projects CONCESSION START RAP 1 (R$ mn) CAPEX ANEEL (R$ mn) PARTNERSHIP ESTIMATED CONCLUSION Auction 013/13 December 2013 Mariana Lot A May % Taesa May 2019 Auction 013/15 April 2016 Miracema Lot P June % Taesa December 2019 ESTE Lot 22 February % Taesa 50% Alupar (100% EATE-TBE) February 2022 Auction 013/15 2 nd Part October 2016 Janaúba Lot 17 Aimorés Lot 4 February 2017 February % Taesa 50% Taesa 50% CTEEP February 2022 February 2022 Paraguaçu Lot 3 February % Taesa 50% CTEEP February 2022 Auction 005/16 April 2017 ERB1 Lot 1 August 2017 (1) RAP for 2017/2018 Cycle (2) RAP and Capex figures proportional to Taesa s stake , ,617 50% Taesa 50% CTEEP RAP Taesa²: 542 Capex Taesa²: 2,980 August

18 Project - Mariana Auction 013/13 - December 2013 Estimated Conclusion: May, 2019 Project Status: Permission license issued in March, 2017 and installation license estimated for April, Request for extension of the completion period under analysis by ANEEL (schedule and economic rebalancing). Performed Capex until Dec/2017: R$ 66.6 million Estimated Capex for 2018: R$ 70 million Construction Progress: 33% accomplished Mariana 18

19 Project - Miracema Auction 013/15 - April 2016 Estimated Conclusion: December, 2019 Project Status: Executive project in progress. Acquired licenses: permission and installation licenses of TL kv, Substations Miracema and Lajeado and Substation Palmas; permission license of TL kv. Still pending installation license of TL 1 Miracema-Lajeado 500 kv. Expected delivery for the license of TL 1 500kV until April 30,2018. Performed Capex until Dec/2017: R$ 45 million Estimated Capex for 2018: R$ 145 million Construction Progress: 29% accomplished Miracema (1): TL: Transmission Lines 19

20 Projects - Janaúba, Aimorés, Paraguaçu and ESTE Auction 013/15 2 nd 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 environmental licensing framework with simplified rite. Performed Capex until Dec/8017: R$ 10.7 million Estimated Capex for 2018: R$ 79 million Construction Progress: 1% accomplished Janaúba Aimorés Paraguaçu ESTE Aimorés: Estimated Conclusion: February, 2022 Project Status: Basic project filed at ANEEL and environmental licensing in progress. Performed Capex until Dec/2017: R$ 4.4 million Estimated Capex for 2018: R$ 25 million Construction Progress: 16% accomplished Paraguaçu: Estimated Conclusion: February, 2022 Project Status: Basic project filed at ANEEL and environmental licensing in progress. Performed Capex until Dec/2017: R$ 5.7 million Estimated Capex for 2018: R$ 32 million Construction Progress: 17% accomplished ESTE: Estimated Conclusion: February, 2022 Project Status: Basic project filed at ANEEL and already approved by ONS, and environmental licensing in progress. Performed Capex until Dec/2017: R$ 2.3 million Estimate Capex for 2018: R$ 16 million Construction Progress: 1% accomplished 20

21 Project - ERB1 Auction 005/16 - April 2017 Estimated Conclusion: August, 2022 Project Status: Signing of the concession agreement on August 11, Basic project in environmental development and licensing in progress. Performed Capex until Dec/2017: R$ 14.3 million Estimate Capex for 2018: R$ 30 million Construction Progress: 12% accomplished ERB1 21

22 Growth Opportunities

23 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 (Eg.:Jirau, Belo Monte, and Santo Antônio) Estimated Capex R$ billion to TOTAL 55.2 Source: PDE 2026 and Aneel s auctions 199 Main consumption areas Generation Focus: Wind and Solar ( 000 km of lines) +3.8% % Brazil Regional Consumption (2015) Electricity Consumption (TWh) Northeast 17% North 9% 17% South 58% Southeast and Center West % CAGR Actual 2026 Ten-Year Expansion Program (PDE 2026) Source: Brazilian Statistics Bureau (IBGE), Aneel, National System Operator (ONS), Brazilian Ministry of Energy, ACENDE, Energetic Research Enterprise (EPE) and Wall Street research. 23

24 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 23.1% 6.6% RAP/Capex WACC 33.7% 6.0% 25.1% 5.6% 19.3% 12.3% 5.0% 4.6% 5.6% 11.7% 10.3% 10.0% 8.4% 4.7% 4.6% 12.0% 36.5% 10.1% 40.5% 8.6% 13% 12% 12% 11% 11% 15% 18% 21% 21% 21% 18% (results by auction) Lots without bid 2011 Years TAESA won lots in auctions Construction Companies State Grid Private owners State owners 2016 part part part part 2 Private Players Returning % 4% 4% 13% 13% 11% 33% 26% 38% 30% 48% 25% 54% 29% 67% 14% 5% 17% 45% 4% 12% 86% 53% 52% 58% 3% 12% 17% 58% 43% 5% 19% 4% 21% 28% 5% 25% 5% 5% 2009 Recent regulatory changes resulted in a better risk/return equation for greenfield electric transmission projects in Brazil Source: ANEEL, Company s Filings. WACC shown as real rate of return part part part % 3% 36% 64% 2017 part 2 24

25 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 strategically positioned to capture synergies from future auctions and consolidate its transmission lines all over Brazil 2016 Auctions Until 2026 Investments billion (R$) Only in billion Taesa (1) Source: PDE 2026 and Aneel s auctions. Estimated investments for auctions in the coming years, subject to change. 25

26 GREENFIELD Taesa's participation in the auction 002/2017 Studied Lots Enrolled Lots Lots with Bids Acquired Lots All 11 lots 2, 3, 4, 5, 6, 7 and 9 2, 3, 4, 5, 6, 7 and 9 - Field recognition with careful assessment and detailed study to evaluate the complexity and construction costs of each lot. Attractive lots for the Company in view of the complexity and construction costs as well as potential synergies. Bidding on all 7 lots enrolled, following our trajectory based on financial discipline and value generation. Winning discounts were much higher than the bids proposed by Taesa. Summary of Auction 002/2017 held on Dec 15 Lot Aneel Capex (R$ million) Construction Period (months) Location Maximum RAP (R$ million) Winner RAP (R$ million) Winner Discount TAESA Discount 1 2, PR % - 2 1, PI / CE % 22.3% 3 2, PA / TO % 0.0% 4 1, TO / BA % 19.0% RN % 24.4% PB / CE % 21.1% MG % 7.6% MG % BA % 5.0% PE % PE % - Total 8, % 10.8% 26

27 BROWNFIELD Uniquely positioned to capture M&A opportunities with attractive returns Brazilian Total RAP 1 (Concession Category II and III) (R& mn) 3,499 1,175 4,675 1,137 2, , ,123 2,846 1,292 1, One of the largest players in the sector and with an extensive capability in M&A, Taesa is strategically positioned to capture opportunities with attractive returns: i) national presence ii) scalability iii) low leverage Other private players 1,196 3,266 4,461 Other stateowned players Source: ANEEL and Company (1) 2017/2018 RAP Cycle, category II and III. 290 Operational RAP Non-operational RAP Total RAP 27

28 Corporate Governance

29 Taesa s Corporate Governance Solid Corporate Governance Practices and Skilled Management Balanced Decision-Making Structure Among Controlling Shareholders Superior Governance Practices Shareholders Agreement 21.7% Cemig Control Block % ISA Brasil 2 Free Float 63.4% Market CEO and CFO/IR must be: i) professionals with proven experience in the power/financial sector and ii) appointed by an executive recruiting agency Right of first refusal (ROFR) Board of Directors 11 members General Assembly Fiscal Board 5 members Tag along rights (TAR) Two independent Board Directors and one independent Fiscal Board member Human Resources Committee Management Committee Finance Committee Audit Committee Company Listing Management Awards CEO CTO CFO and IRO BDO Legal and Regulatory Valor 1000 Award Transparency Prize (1) The control block has a 63% stake of Taesa s common shares. (2) ISA Investimentos e Participações do Brasil S.A. 29

30 Investor Relations phone: