Light S.a. · BMFBOVESPA:LIGT3

Light — Citi conference (June 2015)

39 slides from Light's conference presentation, June 2015

  1. Slide 1: Corporate Presentation

    ye * e 8 ae mw iAa.e + 4h 2 rgt ee ieee CORPORATE = PRESENTATION

  2. Slide 2: Light Holdings

    Light Holdings Diversified structure which is comprised of the Distribution, Generation and Commercialization segments 2

  3. Slide 3: Slide 3

  4. Slide 4: Light in numbers

    Light in numbers Concession DISTRIBUTION RJ State Area % Population¹ 16 MN 11 MN 68% Área¹ 44,000Km² 11,000 Km² 25% GDP¹ R$ 407 BN R$ 207 BN 51% Consumers 7 MN 4 MN 57% Municipalities 1 IBGE (2010) 92 31 34% Generation 8 1 4 Amazônia Energia 2 Renova 5 6 3 Guanhães Energia 6 Complexo de Lajes 7 HPP

  5. Slide 5: Rankings

    Rankings Among the largest players in Brazil INTEGRATED¹ ELECTRICITY DISTRIBUTION² Net Revenues 2014* – R$ Billion Energy Consumption in Concession Area** (GWh) - 2014 37,767 18.6 37,874 16.4 25,777 12.6 12.2 26,934 22,926 10.6 22,791 21,783 22,321 21,500 20,391 8.6 8.3 15,634 16,348 POWER GENERATIO

  6. Slide 6: Shareholder Structure

    Shareholder Structure Efficient combination of solid industry and financial players • 11 Board members: 8 from the controlling group, 2 independents e 1 employees nominated • A qualifying quorum of 7 members to approve relevant proposals such as: M&A and dividend policy Number of shares 203,934,060

  7. Slide 7: Corporate Governance

    Corporate Governance Decision process assures transparency and value creation LGSXY ADR-OTC 7

  8. Slide 8: Energy Consumption

    Energy Consumption Distribution – 1Q15 TOTAL MARKET (GWh) ¹ +6.3% 0.6% Free Industrial 7,374 7,422 17% captive 6,841 5% 6,180 Others captives 13% 27.9ºC 27.0ºC Residential 28.3ºC captive 26.9ºC 37% Commercial captive 28% 1Q12 1Q13 1Q14 1Q15 1Note: To preserve comparability in the market approved by

  9. Slide 9: Market Breakdown

    Market Breakdown Electricity Consumption (GWh) Total Market – 1Q15 +0.6% 7,374 7,422 1,257 1,215 3,752 1.5% 3,978 2.0% +3.7% 2,752 2,806 6,207 6,117 0 0 2,267 2,351 -5.3% -1.8% 233 240 1,330 1,259 1,025 1,007 2,752 2,806 2,034 2,110 55 58 970 917 970 949 360 342 1Q14 1Q15 1Q14 1Q15 1Q14 1Q15 1Q14 1Q

  10. Slide 10: Operating Quality Indicators

    Operating Quality Indicators DEC e FEC - 12 MONTHS DIC/FIC Compensation (R$MN) (With Purge) INDICATOR Regulatory -15.1% TARGET 2014 15.55 Overall DEC 8.96 Overall FEC 6.84 -13.0% 13.20 19.3 16.8 -11.8% 7.60 6.70 DEC FEC 1Q14 1Q15 1Q14 1Q15 DEC – Equivalent Length of interruption indicator / FEC – Eq

  11. Slide 11: Losses and Collection

    Losses and Collection LOSSES (12 MONTHS) COLLECTION RATE 12 MONTHS - 2.5 p.p. Aneel 94.6% 90.0% 42.37% 41.91% TARGET 41.31% 40.87% August/15 39.88% 39.92% 8,748 8,815 8,754 8,847 8,701 5,955 5,972 5,904 5,927 5,818 1Q14 1Q15 PBD/GROSS REVENUE (BILLED SALES) - QUARTER -0.5 p.p. 2,793 2,843 2,850 2,92

  12. Slide 12: Non technical losses of Light

    Non technical losses of Light Map of losses in Concession Area VALE DO PARAÍBA BAIXADA LESTE OESTE LITORÂNEA December data/ 2014 Light Vale Litorânea Leste Oeste Baixada Clients (quantity) 4,202,337 436,693 839,751 879,682 988,927 1,057,284 Low Voltage Market Billing (GWh) 14,503 1,247 5,111 2,754 2

  13. Slide 13: Loss Reduction Strategy

    Loss Reduction Strategy Efficient combination between technology and effective management 5.3% +33 655 622 133 142 432 351 102 79 227 522 480 30 330 272 197 2011 2012 2013 2014 1Q15 Communities Out of Communities • Monitoring, reading, cutting and reconnecting measured clients - Measurement Control

  14. Slide 14: Technology: Centralized Measuring

    Technology: Centralized Measuring Use of new technologies in areas with a high level of losses Mechanical Meter Display 14

  15. Slide 15: Zero Losses Area

    Zero Losses Area Project: “Light Legal” • Focused in areas with 10,000 to 20,000 clients with high level of losses and delinquency; • Fully-dedicated teams of technicians and commercial agents; • Results constantly and accurately monitored by Light; • Result-linked remuneration for services provided

  16. Slide 16: Project Light Legal: Remuneration system

    Project: “Light Legal” Remuneration system in an APZ area VARIABLE REMUNERATION  Proportional to the reduction of non-technical losses and delinquency. 0.00% 0.00% Non-technical losses (%) 0.00% Delinquency (%) 16

  17. Slide 17: Rio das Pedras

    Rio das Pedras 2nd Stage 1st Stage 3rd Stage 1st Stage 3rd Stage 2nd Stage Non-Technical Implementation Number of Collection Rate Rio das Pedras Losses / Grid Load* UPP Area Year clients Before Current Before Current Stage 1 and 2 (in course) 2014 16.569 83% 54% 75% 89% N 17

  18. Slide 18: Evolution of APZs Results

    Evolution of APZs Results Significant loss reduction and increasing collection rate TARGET APZ LOSSES APZ EVOLUTION CLIENTS 2015 49.0% 150 thousands additional clients 22.0 22.2 20.3 19.2 20.0 37 37 16.4 17.0 26 BEFORE sep-13 dec-13 mar-14 jun-14 sep-14 dec-14 mar-15 624 661 13 APZ COLLECTION 416 95

  19. Slide 19: Regulatory Allowance for Non-Technical Losses

    Regulatory Allowance for Non-Technical Losses Higher recognition of losses linked to targets achievement Additional revenues to be invested in losses combat 40,41% and booked39,92% as 40,41% 40,41% Special 40,41% Obligations 40,41% 40,41% 40,41% 39,92% (ex-RAB) 39,92% 39,92% 40,41% 40,41% 39,92% 39,

  20. Slide 20: Light: Tariff Readjustments

    Light: Tariff Readjustments 27% 6% New Flag 19% 12% 8% 21% 4% Nov/12 Jan/13 Nov/13 Nov/14 Jan/15 Mar/15 -20% Annual Tariff Law 12.783 3rd Cycle Annual Tariff Tariff Flags New Flag + ETR Readjustment Tariff Review Readjustment *ETR: Extraordinary Tariff Review 20

  21. Slide 21: Generation

    Generation

  22. Slide 22: Brazil Energy Matrix

    Brazil Energy Matrix Variety of energy sources available for energy production 1.41% 4.35% Hydro  Over 70% of Brazil’s electricity is 0.01% Thermal provided by renewable sources 28.57% Nuclear Wind  Integrating hydro and thermal 65.65% Solar GSF – Generation Scaling factor 98.3% 98.7% 100  Reduct

  23. Slide 23: 855 MW Installed Capacity

    855 MW Installed Capacity Concessions Expiring Only in 2026 100% 100% Paraiba do Sul River HPP Santa Branca HPP Ilha dos Pombos 187 MW 56 MW HPP Ilha dos RJ Pombos SP HPP Santa Branca 100% 100% 100% HPP Fontes Nova Underground HPP HPP Pereira Passos 132 MW Nilo Peçanha - 380 MW 100 MW Occupational h

  24. Slide 24: Assured Energy

    Assured Energy: 549 MWaverage Energy commercialization focused on the free market Available Energy 11% 549 549 549 549 549 549 549 28 28 28 28 28 28 28 33 66 41 83 184 264 289 510 480 434 461 488 480 418 456 438 317 242 232 337 257 232 2015 2016 2017 2018 2019 2020 2021 Hedge Available Energy Contra

  25. Slide 25: Power Generation Expansion

    Power Generation Expansion Renewable energy generation projects, mainly through partnerships Installed Capacity Assured Energy Project Operational Start Stake (MW) (MW average) Paracambi 25 20 2012 51% 770 (in operation) 354.2 (in operation) 2008 - 2014 Renova 15.87% 1,741 (contracted) 856.9 (contra

  26. Slide 26: Power Generation Expansion

    Power Generation Expansion INSTALLED CAPACITY (MW) LIGHT'S STAKE +6% +2% 71.1% +13% 1,662 1,630 +5% 1,530 77 77 17 17 +5% 77 +6% 1,352 17 280 +6% 1,291 265 +10% 1,226 17 219 17 173 22 22 +2% 1,157 17 128 22 1,091 17 82 22 22 990 22 22 45 22 381 399 971 256 271 328 200 205 237 104 122 13 13 13 13 13

  27. Slide 27: Results

    RESULTS

  28. Slide 28: Financial Highlights

    Financial Highlights R$ mn 2014 1Q14 1Q15 Key Figures Mar-15 Net Revenue* 8,289 2,119 2,973 Net Income LTM (R$ mn) 611 EBITDA 1,810 453 494 Shares Outstanding (mn) 204 EBITDA Margin 21.8% 21.4% 16.6% EPS (R$) 3.0 Net Income 663 181 129 P/E** 4.8 Net Margin 8.0% 8.5% 4.3% Market Cap (R$ mn) ** 2,937

  29. Slide 29: Net Revenue

    Net Revenue NET REVENUE (R$MN) NET REVENUE BY SEGMENT (1Q15)* +38.5% 3,162 189 Distribution 38.5% 86.6%** 2,282 Generation 164 6.0% 2,973 Commercialization and service 2,119 7.4% * Eliminations not considered 1Q14 1Q15 ** Construction revenue not considered ** CVA not considered Construction Revenue

  30. Slide 30: Operating Costs and Expenses

    Operating Costs and Expenses COSTS (R$MN)* DISTRIBUTION PMSO COSTS (R$MN) 1Q15 +12.3% Non manageable 211 (distribution**): (79.7%) 188 2,165.7 330.1 Manageable 220.8 (distribution): (12.2%) Generation and 1Q14 1Q15 Commercialization: (8.1%) R$ MN 1Q14 1Q15 Var. PMSO (187.8) (210.9) 12.3% * Eliminati

  31. Slide 31: EBITDA by segment

    EBITDA by segment (R$ MN) ADJUSTED EBITDA - BY SEGMENT EBITDA Consolidado 1Q14 1Q15 +9.2% (R$ MM) 494 Distribution 254.8 300.2 453 EBITDA Margin (%) 14.6% 11.1% 40% 44% Generation 182.8 162.2 EBITDA Margin (%) 86.5% 86.7% Commercialization 17.5 40.2 60% 56% EBITDA Margin (%) 6.0% 17.5% Others and (2

  32. Slide 32: EBITDA

    EBITDA Adjusted EBITDA – 1Q14 / 1Q15 (R$ MN) +13.7% +9.2% 854 -854 1,246 55 -11 -18 -4 0 453 494 435 Adjusted Regulatory EBITDA 1Q14 Net Revenue Non- Manageable Other Provisions Equity Pickup EBITDA 1Q15 EBITDA 1Q14 Assets and Manageable Costs Operational Liabilities Costs (PMSO) Revenues 32

  33. Slide 33: Net Income

    Net Income Adjusted Net Income 1Q14 / 1Q15 (R$ MN) -23.7% -28.8% 41 -12 -99 19 -14 181 168 129 Adjusted Net Regulatory Net Income EBITDA Financial Result Taxes Depreciation Net Income Income 1Q14 Assets and 1Q14 1Q15 Liabilities 33

  34. Slide 34: Dividends

    Dividends Average payout of 75% in the last 5 years 16.2 12.4 11.6 11.3 9.5 8.7 4.9 5.8 100 100 100 87 85 81 76 87 795 87 50% 554 595 469 25 351 365 107 157 92 2008 2009 2010 2011 2012 2013 2014 2015 2007 2008 2009 2010 2011 2012 2013 2014 JCP Dividends Dividend Yeld* Payout Minimum Dividends Policy

  35. Slide 35: Indebtedness

    Indebtedness Others AMORTIZATION SCHEDULE* (R$ MN) 5.2% TJLP Average Term: 4.2 years IPCA 13.1% 9.7% U$/Euro * 1,402 0.6% 1,251 1,090 792 813 458 518 444 CDI 71.4% 199 * Considering Hedge 2015 2016 2017 2018 2019 2020 2021 2022 After 2022 * Just principal COST OF DEBT eal Custo Real Custo RNET DEBT

  36. Slide 36: Investments

    Investments CAPEX (R$ MN) CAPEX BREAKDOWN (R$ MN) 1Q15 1,054 929 122 Develop. of Other 845 0.8 Distribution 154 797 187 System 103 132 Generation 86.6 670 5.0 27 Administration 240 6.2 775 713 746 694 -2.8% 403 176 171 47 17 65 11 112 95 Losses Combat 2011 2012 2013 2014 2015 1Q14 1Q15 72.1 Budget O

  37. Slide 37: Why invest in Light?

    Why invest in Light?  Rio as a host of major events New contracts in 2015 Economic Energy  Communities pacification Energy available for Transformation Commercializati  Pro-business environment commercialization in the  Investment projects hub on focused on Hedge of uncotracted energy to Conc

  38. Slide 38: Disclaimer

    Disclaimer This presentation may include forward-looking statements according to Brazilian regulations and international movable values. These statements are based on certain assumptions and analyses made by the Company in accordance with its experience, the economic environment, market conditions a

  39. Slide 39: Contacts

    Contacts Paulo Roberto Ribeiro Pinto CEO João Batista Zolini Carneiro CFO and IRO Mariana da Silva Rocha IR Manager + 55 21 2211 2814 [email protected] http://ri.light.com.br/ www.facebook.com/lightri twitter.com/LightRI 39

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