FIXED INCOME INVESTOR PRESENTATION 1 Q 2 0 | R E S U L T S Viso - - PowerPoint PPT Presentation

FIXED INCOME INVESTOR PRESENTATION

1 Q 2 0 | R E S U L T S

Visão geral Sustainable Value Financial Highlights ISA CTEEP

Tran smission Rev en u es ¹ (2019/ 2020 cycle)

36% 10% 7% 9% 34% 4%

TAESA Eletrobras Alupar ISA CTEEP State Grid Outros

Total: BRL 37 billion

IS THE PURE TRANSMISSION COMPANY IN THE SECTOR IN BRAZIL

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 142 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.

Source: ANEEL

51%

IE Madeira

Revenue² 2019/2020 cycle BRL 260 million

100%

IENNE

Revenue 2019/2020 cycle BRL 46 million

ISA CTEEP

Revenue 2019/2020 cycle BRL 2,579 million

IE Serra do Japi

100%

Revenue 2019/2020 cycle BRL 58 million

100%

IE Pinheiros

Revenue 2019/2020 cycle BRL 57 million

100%

Evrecy

Revenue 2019/2020 cycle BRL 10 million

100%

IE Sul

Revenue 2019/2020 cycle BRL 18 million

51%

IE Garanhuns

Revenue² 2019/2020 cycle R$ 46 million

100%

IEMG

Revenue 2019/2020 cycle BRL 19 million

Largest publicy traded pure transmission utility in Brazil

▪

Transmission of 33% of Brazil’s energy generation and 94% of the energy in the State of São Paulo

▪

Benchmark player in costs and quality

▪

Capacity in operation¹

▪ 18.6 thousand km of transmission lines ▪ 65.9 thousand MVA of transformation capacity ▪ 126 substations

▪

ISA CTEEP Revenue 2019/2020 cycle: BRL 3.1 billion2

Nota: ¹ Considers the full capacity of IE Madeira and IE Garanhuns ² 2019/2020 Revenue Cycle proportional to ISA CTEEP’s participation

IE Itapura Bauru

100%

Revenue 2019/2020 cycle BRL 12 million

100%

IE Itaúnas

Revenue2019/2020 cycle BRL 52 million

100%

IE Biguaçú

Revenue2019/2020 cycle BRL 40 million

50%

IE Paraguaçu

Revenue²2019/2020 cycle BRL 59 million

Largest publicly traded pure transmission utility in Brazil

▪

Growth with sustainable value creation

▪

Construction capacity

▪ 7.6 thousand km of transmission lines ▪ 1.7 thousand MVA of transformation capacity

▪

Organic growth¹: CapEx of BRL180 million/year with Revenue of BRL50 million/year

▪

Greenfield projects: ANEEL capex BRL5 billion with Revenue 2019/2020 cycle of BRL567 million

50%

IE Aimorés

Revenue²2019/2020 cycle BRL 40 million

50%

IE Ivaí

Revenue²2019/2020 cycle BRL 147 million

100%

IE Tibagi

Revenue2019/2020 cycle BRL 25 million

100%

IE Itapura Lorena

Revenue2019/2020 cycle BRL 11 million

100%

IE Aguapeí

100%

IE Itaquerê

Revenue2019/2020 cycle BRL 51 million Revenue2019/2020 cycle BRL 59 million Nota: ¹ Last 5 years average ² Considers 2019/2020 Revenue Cycle adjusted to ISA CTEEP’s participation

100%

IEMG

Revenue auction BRL 33 million

100% 100%

Evrecy

Revenue auction BRL 38 million

Corporate Governance Structure

Human Resources Committee Audit Committee Fiscal Council

8 effective members, of which 2 are independent and one is elected by the employees 5 effective members and 4 substitute members

Board of Directors Rui Chammas CEO

Ethics and Transparency recognized at ISA and at ISA CTEEP level 2019 Transparency Trophy from ANEFAC Experienced Management team focused

• n value

creation

Shareholders CFO and IRO COO Institutional Relations Officer Alessandro Gregori Filho Carlos Ribeiro Carlos Ribeiro (interim) Chief Project Officer Rui Chammas (interim)

Note: ¹On 12/31/2019

América Central Brasil

20% of participation in the Transmission market in 2019

Bolivia Argentina Peru

70% of participation in the Transmission market in 2019

Colombia

70% of participation in the Transmission market in 2019

Chile

12% of participation in the Transmission market in 2019

▪ Largest high-tension electric

transmission network in Latin America

INTERCONEXIÓN ELÉCTRICA, S.A.E.S.P .

A multilatina company recognized for the excellence of its operations Solid Presence in Latin America: 7 countries, 3 sectors, 43 companies

ISA

Operational:

▪ 46,374 km of transmission lines ▪ 92,600 MVA in power capacity

Under construction :

▪ 7,431 km of transmission lines ▪ 15,482 MVA in power capacity ▪ Businesses in: ▪ Energy transmission ▪ Highway concessions ▪ Information Technology/Telecom

▪ Controlled by the Colombian

government (51% of shares)

▪ Market cap: USD 6 billion¹

Financial Highlights ISA CTEEP Sustainable Value

P E S S O A S

Regulação Valor Justo Jurídico Gestão de Litígios Crescimento Disciplina de Capital Integração Subsidiárias Projetos Crescimento Orgânico Operação e Manutenção Eficiência, Qualidade, Segurança

REMUNERATION FROM ASSET AVAILABILITY

Note:

¹ Considers revenue proportional to ISA CTEEP’s participation in assets with partnerships

BRL 3,585 million RAP Composition

• f Contract

059

Contract 059 Subsidiaries in Operation Subsidiaries in Construction RBSE O&M New Investments

Assured Annual Revenue (RAP) - 2019/2020 Cycle¹

RBSE (BASIC NETWORK OF EXISTING SERVICE) CASH FLOW BOOSTS CASH GENERATION FOR THE NEXT YEARS

▪ RBSE: receivables related to the non

depreciated assets in operation before May/2000

▪ In April/2017 injunction determined

temporary exclusion of Ke

▪ In November/2019, the judiciary

dismissed some lawsuits, which led to the exclusion of Ke from the financial component, consequently the respective injunctions were no longer effective.

▪ In October of 2019 Bill 4,636/19 that

proposes the exchange of Ke to WACC was approved in the House of Mines and Energy Commission. This Bill is in discussion at the Finance and Taxation Committee (CFT) and will later follow to the CCJC and then to the Upper House.

Note:

¹ Net of PIS/COFINS. Amounts represent what was established for cycles 2017/2018 (REH ANEEL 2,258), 2018/2019 (REH ANEEL 2,408) and 2019/2020 (REH ANEEL 2,565). Premises for future cycle according to REN ANEEL 762/2017 and based on REH ANEEL 2,565. Regulatory WACC of 6.64%, that will be updated in the tariff review. Asset base is subject to write-offs in the tariff reset process.

RBSE Receivables Schedule1 (BRL million)

PROCEEDINGS LOWER HOUSE UPPER HOUSE EXECUTIVE CME CFT CCJC COMMITTEES PLENARY SANCTION VETOS

837 711 747 747 747 747 347 785 729 750 785 785 785 785 785

2018/2019

1,566

2019/2020 2017/2018 2020/2021 2022/2023 2021/2022 2023/2024 2024/2025

1,461 1,532 1,532 1,532 1,532 1,132 785 246 253 264 264 264 264 264 264

Ke

246 253 264 264 264 264 264 264 246 253 264 264 264 264 264 264

WACC

151 156 163 163 163 163 163 163

Financial Component Economic Component

Focus in cost efficiency, service quality and

• perational safety to maximize results

0,0031% 0,0056% 0,0020% 0,0025% 0,007% 0,0010% 12,95 16,37 7,69 7,06 2,16 2,67 0,55 0,35 0,2 0,17 0,07 0,11

ISA CTEEP South Southeast/ Midwest SIN Northeast North

FREQ (times)

Equivalent Frequency of Interruption

DREQ (minutes)

Equivalent Duration of Interruption

ISA CTEEP South Southeast/ Midwest SIN Northeast North

IENS (%)

Index of Non-Supplied Energy

ISA CTEEP South Southeast/ Midwest SIN Northeast North e

December 2019 figures

OPERATIONAL ASSETS

▪ 18.6 thousand km of

transmission lines

▪ 65.9 thousand MVA of

power transformation capacity

▪ Revenue (RAP) of BRL3.1

million¹

Note:

¹ 2019/2020 RAP Cycle weighted by ISA CTEEP’s participation

IENNE (100%)

TL: 710 km Substation: none Revenue: BRL 46 million

IE Garanhuns (51%)

TL: 633 km Substation: 2,100 MVA Revenue¹: BRL 46 million

IE SUL (100%)

TL: 167 km Substation: 900 MVA Revenue: BRL 18 million

IE Madeira (51%)

TL: 2.4 thousand km Substation: 7.5 MVA Revenue¹: BRL 260 million

ISA CTEEP

LT: 14.3 thousand km Substation: 48,800 MVA RAP: R$ 2.6 billion

IE Serra do Japi (100%)

TL: 137 km Substation: 2,000 MVA Revenue: BRL 58 million

IEMG (100%)

TL: 173 km Substation: none Revenue: BRL 19 million

Evrecy (100%)

TL: 154 km Substation: 450 MVA Revenue: BRL 10 million

Substation Line Entrance Transmission Line (TL) In operation

IE Itapura – Bauru (100%)

1 Static Component (Bauru Substation) Revenue: BRL 12 million

IE Pinheiros (100%)

TL: 1 km Substation: 4,200 MVA Revenue: BRL 57 million

Nota:

¹ Considers project information (100%) ² 2019/2020 RAP Cycle weighted by ISA CTEEP’s participation

IE Itaquerê (100%)

3 Comp. Synchronous (Araraquara Substation) CAPEX ANEEL: BRL 398 million RAP19/20 cycle : BRL 51 million ANEEL Term: Aug/21

IE Aguapeí (100%)

TL: : 111 km Substation: 1.4 thousand MVA ANEEL CAPEX: BRL 602 million RAP19/20 cycle: BRL 59 million ANEEL term: Aug/21

IE Paraguaçu (50%)²

TL: 338 km Substation: none ANEEL CAPEX: BRL 510 million RAP19/20 cycle : BRL 118 million ANEEL term: Feb/22

IE Itaúnas (100%)

TL: 79 km Substation: 1,200 MVA 1 Static Comp. ANEEL CAPEXc: BRL 298 million RAP19/20 cycle : : BRL 52 million ANEEL term: Feb/22

IE Aimorés (50%)²

TL: 208 km Substation: none ANEEL CAPEX: BRL 341 million RAP19/20 cycle : BRL 79 million ANEEL term: Feb/22

IE Tibagi (100%)

TL: : 18 km on double circuit Substation: 500 MVA ANEEL CAPEX: BRL 135 million RAP19/20 cycle : BRL 20 million ANEEL term: Aug/21

IE Ivaí (50%)²

TL: 599 km (230/500 kV) in double circuit Substation: 3 thousand MVA CAPEX ANEEL: BRL 2 billion RAP19/20 cycle : BRL 294 million ANEEL term: Aug/22

Under construction Substation Line Entrance Transmission Line (TL)

IE Itapura – Lorena (100%)

TL: 6 km of double circuit Substation: 1,200 MVA CAPEX ANEEL: BRL 238 million RAP19/20 cycle : BRL 11 million ANEEL term: Sep/22

IE Biguaçú(100%)

TL:: 57 km Substation: 300 MVA ANEEL CAPEX: BRL 641 million RAP19/20 cycle : BRL 40 million ANEEL term: Sep/23

ASSETS UNDER CONSTRUCTION

▪ 2 thousand km of

transmission lines1

▪ 12 thousand MVA of power

transformation capacity1

▪ Revenue (RAP) of BRL556

million²

Evrecy (100%) Minuano

TL: 169 km Substation: 2.7 thousand MVA CAPEX ANEEL : BRL 682 million RAPauction: BRL 38 million ANEEL term: Dec/24

Três Lagoas

TL: 37 km Substation: none CAPEX ANEEL: BRL 99 million RAP19/20 cycle : BRL 5 million ANEEL term: Jun/23

IEMG (100%) Triângulo Mineiro

TL: 173 km Substation: 1.6 thousand MVA CAPEX ANEEL: BRL 554 million RAPauction: BRL 33 million ANEEL term: Dec/24

Sustainable Value Financial Highlights ISA CTEEP

51% 76% 83% 82%

NET REVENUE (BRL MILLION)

2,815 2017 2018 2,767 2019 1,778 LTM 2,775 2,300 2017 2018 2,287 1,351 2019 LTM 2,254 615 2018 2017 2019 LTM 1,276 1,222 1,300

Notes:

LTM considers the last 12-month results ending on March 31, 2020 ¹ Excluding depreciation and contingencies ² Net income adjusted for non-controlling interest The figures for Net Revenue and EBITDA do not consider results

• f affiliates, which are accounted for as equity income

O&M COSTS¹ (BRL MILLION) EBITDA ICVM 527 (BRL MILLION) NET INCOME (BRL MILLION)²

EBITDA Margin

REGULATORY RESULTS HIGHLIGHTS

STRONG CASH GENERATION BOOSTED BY RBSE

509 538 594 594 2017 2018 2019 LTM

allows financing the investment cycle

Debt Breakdown on 03/31/2020 Debt Profile on 03/31/2020 1Q20 2019 2018 2017 Consolidated debt Gross Debt (BRL billion) 3.4 3.2 3.0 1.9 Net Debt (BRL billion)1 2.7 2.5 2.5 1.5 Indicators Net Debt /EBITDA (x) 1.1 1.0 1.0 1.0 Average cost of debt (%) 6.4% 7.5% 7.9% 8.3% Average term (years) 3.8 4.0 3.2 3.3 Interest coverage (x)² 12.4 11.8 15.8 20.4 Consolidated debt + JV³ Gross Debt (BRL billion) 5.2 5.1 4.2 4.4 Net Debt (BRL billion) 3.0 3.4 3.6 3.8

¹ Net debt consider availabilities of ISA CTEEP and Subsidiaries ² Consider interest coverage for covenants calculation of infrastructure debentures and Law 4,131 (EBITDA covenant/ Financial Result) ³ Consider ISA CTEEP and JV pro forma availabilities (IE Madeira, IE Garanhuns and IE Ivaí)

16% 56% 23% 5%

BNDES - TJLP Local Bonds Others Law 4.131

ADEQUATE DEBT PROFILE WITH

Debt (BRL million) and Average Debt Cost (%) Consolidated Debt Amortization Schedule (BRL million) 33% 3,015 12% 77% 2017 88% 23% 2018 2019 67% 3,433 36% 64% 1Q20 1,943 3,244

Long term Short term

7.9% 8.3% 6.4% 7.5%

Average cost

250 82 78 396 725 613 51 2021 9M20 2022 2030+ 2023 2026+ 2024 2025 1,237

AAA rating by Fitch

Note:

BNDES’ EBITDA considers the jointly controlled subsidiaries’ debt (IE Madeira and IE Garanhuns)

The covenants and established requirements are being duly fulfilled on all issuances

BNDES (annual verification) I) Infrastructure Debentures (4th, 5th and 6th issuance) II) International Credit - Law 4,131 (quarterly verification) Financial Indicators Mar/20 Financial Indicators Mar/20 Net Debt/EBITDA ≤ 3x 1.34 Net Debt/EBITDA ≤ 3.5x 1.00 Net Debt/Net Debt + Shareholders' Equity ≤ 0.6x 0.21 EBITDA Debentures/Financial Result > 2.0x 12.37

Over BRL4.7 billion

• f funding raised in the last

years

6th Debenture Issuance Volume: R$ 350 MM Cost: 105.65% of CDI Term: 3 years

Green Bond

Pioneer in issuing green bonds in transmission sector

1st Issuance of Promissory Notes Volume: R$ 200.0 MM Cost: 120% of CDI Term: 6 months 3rd Issuance of Promissory Notes Volume: R$ 200 MM Cost: 106.5% of CDI Term: 6 months 2nd Issuance of Promissory Notes Volume: R$ 200.0 MM Cost: 119.5% of CDI Term: 1 year 4th Issuance of Promissory Notes Volume: R$ 200 MM Cost: CDI + 0.4% p.a. Term: 1 year 5th Issuance of Promissory Notes Volume: R$ 300 MM Cost: CDI + 0.48% p.a. Term: 1 year 6th Issuance of Promissory Notes Volume: R$ 400 MM Cost: 104.9 of CDI Term: 1 year 4th Debenture Issuance Volume: R$ 148.6 MM Cost: IPCA + 6.04% p.a. Term: 5 years 3rd Debenture Issuance Volume: R$ 500 MM Cost: 116.0% of CDI Term: 5 years 2nd Debenture Issuance Volume: R$ 700 MM Cost: 105.5% of CDI Term: 2 years 1st Debenture Issuance Volume: BRL 548.6 MM Cost: CDI + 1.30% p.a. IPCA + 8.10% p.a. Term: 5 years and 8 years 5th Debenture Issuance Volume: R$ 300 MM Cost: IPCA + 5.04% p.a. Term: 7 years 7th Debenture Issuance Volume: R$ 621 MM Cost: IPCA + 4.70% p.a. Term: 7 years

FREQUENT IN THE LOCAL MARKET

2008 2016 2009 2013 2011 2012 2018 2017

8th Debenture Issuance Volume: R$ 409 MM Cost: IPCA + 3.50% p.a. Term: 10 years

2019

Green Bond

One of the lowest-cost issuance in the in the market for the same duration in 2019

2008 2016 2009 2013 2011 2012 2018 2017 2019

e-mail: ri@isacteep.com.br phone: +55 11 3138-7557 www.isacteep.com.br/ir

INVESTOR RELATIONS