itaú bba 14th annual latam ceo conferencestatic.cteep.mediagroup.com.br/arquivos/download/... ·...

Itaú BBA14th Annual LatamCEO ConferenceN e w Y o r k | M a y , 2 0 1 9

Visãogeral

Why Invest in ISA CTEEP?

ISA CTEEP

51%IE Madeira

Revenue: BRL 214 million

100%IENNE


ISA CTEEP

Revenue: BRL 2,538 million

IE Serra do Japi 100%


100%IE Pinheiros


100%Evrecy


100%IE Sul


51%IE Garanhuns


100%IEMG


Largest publicly traded pure transmission utility in Brazil

▪ Transmission of ~25% of Brazil’s power generation

▪ Transmission of ~100% of the power generated in the State of São Paulo

▪ Benchmark player in cost and quality

18,600 km of transmission lines

126 substations

65,900 MVA of transformation capacity

▪ Regulatory Net Revenue¹: BRL 3.0 billion

▪ Regulatory EBITDA¹: BRL 2.4 billion (margin of 79%)

Notes:¹ Last 12 months ending on 03/31/2019. Figures consider IE Madeira and IE Garanhuns proportional results to ISA CTEEP’s participation

100%IE Itaúnas


100%IE Biguaçú


50%IE Paraguaçu


Largest publicly traded pure transmission utility in Brazil

▪ Sustainable growth

Notes: ¹ ISA CTEEP’s investments in 10 projects acquired in 2016, 2017 and 2018 auctions. CAPEX and revenue adjusted to ISA CTEEP’s participation² Figures consider 100% of the projects

Organic growth: CapEx of around

BRL 190 million/year

Greenfield Projects¹: CapEx of BRL

2.9 billion and revenue (RAP) of

BRL 448 million/year

+2,000 km of transmission lines²

+8,000 MVA of transformation

capacity²

50%IE Aimorés


50%IE Ivaí


100%IE Tibagi


100%IE Itapura Lorena


100%IE Itapura Bauru

100%IE Aguapeí


100%IE Itaquerê



A successful story of growth, resilience and performance

1999 20132001 20122006 2007 20172016

‘000 km¹ of transmission lines

Consolidated regulatory EBITDA²

ICVM 527 in BRL billion 0.1 0.7 1.1 1.6 0.2 0.7

1.6

11.5 12.3 15.4 17.7 18.6

TransmissãoPaulista merger with EPTE

CESP spin off creates Transmissão Paulista

Set up of RBSE compensation

(Ordinance 120 Ministry of Mining

and Energy)

Winner bid for 3 lots in October

auction

Expansion to 17 Brazilian states through greenfield projects and acquisitions

ISA acquires CTEEP and

becomes the controlling

shareholder

Winner bid for 5 lots in April auction

Extension of Main Concession

Contract (059/2001) for 30 years

Winner bid for 2 lots in June auction

2018

18.6

2.5 2.4

18.6

2019³

Note: ¹ Information considers 100% of the projects² Figures consider JV’s proportional results to ISA CTEEP’s participation ³ Last 12 months ending on 03/31/2019

6

7

13

19

65

State Grid

Alupar

TAESA

ISA CTEEP

Eletrobras

2 0 1 8 M a rk e t S h a re( t hou s and km o f l i n e s )

T ra n s mis s io n Re v e n u e s ¹

( 2018 /2019 c y c l e )

Total:BRL 36 billion

IS THE PURE TRANSMISSION COMPANY IN THE SECTOR IN BRAZIL

Transmission companies are remunerated by the availability of its assets

Notes: ¹ Considers auctions held until December of 2018 | ² Interconnected National System| ³ National Electric Energy Agency | 4 National Operator of the Electric System

SIN² is composed of 135 thousand km of transmission lines and serves 98% of the market

The transmission sector is regulated and monitored by ANEEL³ and coordinated and controlled by ONS4

Transmission companies are remunerated by the availability of its assets. There is no demand risk and no default risk.

37%

10%8%9%

32%

4%

State GridEletrobras AluparTAESAISA CTEEP Others

Source: ANEEL

STRATEGY BASED ON

Regulation

RBSE Receivables~BRL 1,486 million

100% Margin²

Legal

Pension Fund Lawsuit receivables~BRL 2,000 million

Growth

10 projects in execution with capex of ~BRL 2,900 million

Affiliates

Revenue¹ ~BRL 449 million

86% Margin²

BrownfieldProjects

Revenue¹~BRL 295 million

92% Margin²

Operation and Maintenance

Revenue¹~BRL 761 million

36% Margin²

Note: ¹ Regulatory results of the last 12 months ending on 03/31/2019² EBITDA Margin

A ISA CTEEP no Setor detransmissão

Why Investin ISA CTEEP?

ISA CTEEP

Strong Cash Generation with Predictable Flow

347 389

732

2015

1,721

2016 2017 2018 LTM

1,845

Cash Generation(BRL million)

BASED ON RBSE RECEIVABLES, ORGANIC CAPEX, GREENFIELD PROJECTS AND

O&M REVENUES

+ Greenfield projects

+ Organic Growth

+ Inflation

10 PROJECTS UNDER CONSTRUCTION WILL ADD BRL 448 MILLION OF REVENUE

▪ CapEx ISA CTEEP: BRL 2.9 billion¹

▪ Extension of lines: +2,000 km²

▪ Capacity: +8,000 MVA²

Note:¹ Total CapEx ANEEL of BRL 5.2 billion; ² Considers information of the project (100%)

IE Itaquerê (100%)3 Synchronous Components(Araraquara Substation) CAPEX ANEEL: BRL 398 millionRevenue: BRL 46 million Deadline ANEEL: Aug/21

IE Aguapeí (100%)TL: 111 km Substation: 1,400 MVA CAPEX ANEEL: BRL 602 millionRevenue: BRL 54 million Deadline ANEEL: Aug/21

IE Paraguaçu (50%)²TL: 338 km Substation: none CAPEX ANEEL: BRL 510 millionRevenue: BRL 108 millionDeadline ANEEL: Feb/22

IE Itaúnas (100%)TL: 79 kmSubstation: 1,197 MVA 1 Static ComponentCAPEX ANEEL: BRL 298 millionRevenue: BRL 47 million Deadline ANEEL: Feb/22

IE Aimorés (50%)²TL: 208 km Substation: none CAPEX ANEEL: BRL 342 million Revenue: BRL 72 millionDeadline ANEEL: Feb/22

IE Itapura – Bauru (100%)1 Static Component(Bauru Substation) CAPEX ANEEL: BRL 126 million Revenue: BRL 11 millionDeadline ANEEL : Feb/21

IE Tibagi (100%)TL: 36 km Substation: 1000 MVA CAPEX ANEEL: BRL 135 millionRevenue: BRL 18 million Deadline ANEEL: Aug/21

IE Ivaí (50%)²TL: 1,200 km (230/500 kV) Substation: 2,988 MVA CAPEX ANEEL: BRL 1,937 million Revenue: BRL 268 millionDeadline ANEEL: Aug/22

Substation

Line Entrance

TransmissionLines (TL)

Under construction

IE Itapura - Lorena (100%)TL: 6 kmSubstation : 1,200 MVA CAPEX ANEEL: BRL 238 million Revenue: BRL 10 millionDeadline ANEEL : Sep/22

IE Biguaçú (100%)TL: 57 km Substation: 300 MVA CAPEX ANEEL: BRL 641 millionRevenue: BRL 38 millionDeadline ANEEL : Sep/23

230 226

335

247

2016

585

2014 2018+2015 20172013

Note:¹ The Company registered net loss due to the provision for losses related to Law 4,819/58

Strong cash generation allows higher dividends

(BRL million)

RegulatoryPayout

N.A.¹ 91% 136% 101% 92%

▪ Minimum payout of 75% of regulatory net income limited to the financial covenant of 3.0x Net Debt/EBITDA

▪ Proceeds via interest on capital and dividends payments

▪ Dividend yield of 17%

1,985

154%

SOLID DEBT PROFILE WITH

▪ Debt Amortization Schedule (BRL million) Debt Breakdown

47%

19%

34%

Local bonds - CDI/IPCA BNDES - TJLP Others

Debt Profileon 03/31/2019

▪ Gross Debt: BRL 3.1 billion

▪ Average cost: 8.2% p.a

▪ Average term: 3.8 years

▪ Net Debt / EBITDA: 0.9xInvestment Grade by Fitch:AAA(bra)

283234

81 75

380

903

47

2019 2030+20242020 20232021 2022 2025-2029

1,094

Note: Net Debt/ EBITDA considering IE Madeira and IE Garanhuns figures reaches 1.3x

Average term considering IE Madeira and IE Garanhuns figures reaches 4.7 years

WHY INVEST IN

ISA CTEEP?

No demand risk and no default risk

Strong Cash Generation

Minimum payout of 75% (regulatory net

income)

Dividends

Reference Company in quality and O&M

Benchmark

ValuationAttractive valuation

Fitch: AAA(bra)

Investment Grade

Sustainable value

Profitability

Opportunities in reinforcement and improvement projects, greenfield and M&A

Growth

CUSTOS OPERACIONAIS REGULATÓRIOS

Valuation Opportunities

Execution risk Risk of lower returns

Greenfield Projects

Upside in returns

Risk of reduction of the amount

established in RES ANEEL 762/2017

RBSE

Upside in receivables

(WACC)

Organic Growth

Additional revenue with no

competition

IE Madeira

Regulatory riskRisk of postponing the solution for the impeditive pending

issues

No discount on revenue

Tariff Reset

Fair Value for O&M, WACC &

RAB

Risk of unfavorable decision in Court

Law 4,819

End of payment & reimbursement

Investor Relationswww.isacteep.com.br/[email protected]+55 (11) 3138 -7557

itaú bba 14th annual latam ceo conferencestatic.cteep.mediagroup.com.br/arquivos/download/... ·...

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