21st Santander Annual Conference
August 20 and 21, 2020
TURNAROUND
generating results in 1 year
jun/19 jun/20
Losses Combat | 9,739 GWh | 8,825 GWh | -914GWh |
(12 months) |
Reduction of Contingencies | R$164 mn | R$157 mn | -R$7mn |
(6 months) |
PMS control and drop | R$501 mn | R$464 mn | -R$37mn |
(6 months) |
Liability Management | 9.34% | 7.12% | -2.2p.p. |
(Nominal cost, 12 months) |
2
NOTAS: (1) Consolidated values of Light S.A.; (2) Contingencies and PMS adjusted for PDV expenses incurred in 1Q20 e 2Q20
L O S S E S C O M B AT
RESTRUCTURING
COMMERCIAL AREA
Change approx. 80% of the leadership
Descentralization of the management of the comercial area with the creation of regional
Structuring of a plan to combat diagnosed by region
Improved target identification process for inspections and normalization
Qualification and training of operational teams
Primarization of teams with increased productivity and better ethical control
Normalisations supported by the Police
Training of field teams
3
L O S S E S C O M B AT
SHIELD
OF POWER GRID
CHALLENGES
Invest in shielded grid where measurement has already been modernized
Regularize customers
and recover market
DIAGNOSTIC
Rede elétrica vulnerável em áreas de telemedição
High loss
High commercial debt
Low presence of public authorities
Moderate income
ACTIONS
Change in grid topology making it difficult to acess the BT grid
Educational actions
Energy efficiency (replacement of lamps and refrigerators)
Registration of customers in the
Social Tariff
REGULARIZATION
OF CLANDESTINE INSTALLATIONS
Use the registration system to identify buildings without a
power grid
Regularization of clandestine installations in condominiums
and "irregular" buildings
Loss reduction focusing on energy incorporation
4
L E G A L C O N T I N G E N C I E S R E D U C T I O N
Objectives
Reduction in the entry of new lawsuits
Reduction in the stock of lawsuits (increase in clousures)
Higher number of processes submitted to conciliation (agreements)
Reduction of provisions, Opex and contingencies
Initiatives
1 | Improvement of processes related to | ||
customer relations (agency, call center and | |||
ombudsman) | |||
2 | Greater synergy and collaborative | ||
environment between the legal and | |||
commercial areas | |||
3 | Extensive restructuring of the Legal area, | ||
with the hiring of new profissionals and | |||
offices | |||
4 Training of internal lawyers, agents and | |||
judicial experts | |||
5 | Improvement of subsidies for the | ||
Company`s defenses | 5 |
L E G A L C O N T I N G E N C I E S R E D U C T I O N
Number of JEC processes
('000)
25.0 | 24.2 | |||
22.4 | ||||
21.9 | 20.7 | 21.3 | ||
20.0 | ||||
19.4 | ||||
18.9 | ||||
16.3 |
13.3 | 12.711.6 |
7.8 | |
4.8 |
2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | |||
# new lawsuits | # closed lawsuits | # stock of lawsuits | |||||
78% Reduction in the number of new processes in 2Q20 over 2Q19
Maintenance of the reduction path for the fourth consecutive quarter
62% Reduction in the amount of provisions related to JEC processes (2Q20 x 2Q19)
Average closing time of JEC Court process is 4 months
6
L I A B I L I T Y M A N A G E M E N T
August/19
Early redemption of the 14th debenture from Light Sesa
Prepayment of swap transactions
September/19
Rollover of debt with Citibank at cost reduction
November/19
Early redemption of 35% of bonds
December/19
Issue of the 17th debentures from Light Sesa (R$700 mn in 3 series)
Issue of 5th Promissory Notes from Light Sesa (R$300 mn)
April/20
Issue of the 18th debentures from Light Sesa (R$400 mn)
July/20
Issue of the 19th debentures from Light SESA (R$500 mn)
Continuos market monitoring
Opportunities in the debt Market following the liability management agenda
7
L I A B I L I T Y M A N A G E M E N T
2Q20 Amortization schedule (Consolidated)
R$ mn
3500,0
3000,0
Subsequent Events 2500,0
2000,0
COVID Account R$1,010 MN1500,0
+
th1000,0 19 Issuance ofDebentures 500,0
R$500 MN
,0
3,003 | Maturity | ||||||
3.1 years | |||||||
2,505 | 2,331 | ||||||
1,932 | |||||||
1,510 | |||||||
1,007 | Maturity of the | ||||||
19th issuance of | |||||||
756 | |||||||
Debentures | |||||||
995 | 357 | ||||||
132 | |||||||
Cash | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
Robust cash position to face future debt maturities
Nominal cost of debt
12 months, R$ mn
9.34%
8.84% 8.79%
8.31%
7.12%
2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 |
15.000
13.000
11.000
9.000
7.000
5.000
3.000
1.000
-1.000
10,00 | ||||||||||||
Net Debt | Net Debt / EBITDA | 9,00 | |||||||||||
R$ mn | 12 months (x) | 8,00 | |||||||||||
8,017 | 7,00 | |||||||||||
7,206 | 6,750 | 6,699 | 6,00 | |||||||||
Leverage | ||||||||||||
5,00 | << | |||||||||||
4,00 | ||||||||||||
3.63x | 3,00 | |||||||||||
3.14x | 2.98x | 3.07 x | Covenant | |||||||||
2,00 | 3.75 x | |||||||||||
1,00 | ||||||||||||
2017 | 2018 | 2019 | 2Q20 | - | ||||||||
8 | ||||||||||||
P M S C O N T R O L A N D R E D U C T I O N
Light SESA Adjusted PMS
R$ mn | |||||
Δ: -5.5% | Δ:-5.7% | Δ: -10.0% | |||
236 | 240 | ||||
230 | |||||
223 | |||||
217 | 216 | ||||
4Q18 | 4Q19 | 1Q19 | 1Q20 | 2Q19 | 2Q20 |
Light SESA Capex | Realized 2Q20 | |
R$ mn | ||
Planned |
733 | 750 | |||
627 | 660 | |||
416 | ||||
334 | ||||
2017 | 2018 | 2019 | 2020 | 9 |
S E R V I C E Q U A L I T Y
Excellence
in providing service
DEC (12 months, jun/20)
9.07 8.99 8.88
18.54 12.35 12.59
8.73 | 8.54 | 8.39 | 8.23 |
11.44 9.07 7.76 7.77
8.14 8.02 7.84
6.42
Historical Results
Best results in Light's history and below the limit established by ANEEL
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2T20 | 2021 | 2022 |
Regulatory Target
FEC (12 months, jun/20)
7.01 | 6.87 | 6.64 | 6.44 | 6.09 | 6.05 | 5.72 | 5.43 | 5.15 | 4.86 |
8.38 | 6.6 | 6.41 | 6.00 | 5.13 | 4.38 | 4.31 | 4.27 |
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2T20 | 2021 | 2022 |
Regulatory Target
10
2Q20 RESULTS
Grid load decrease due to the effects of Covid-19, as well as lower temperature and reduction of losses
Grid Load (GWh) | Billed Market by segment (GWh) | |
6,913 | |||||||
: +4.9 % | 620 | 5,837 | |||||
980 | |||||||
: -16.5 % | 506 | ||||||
9.195 | 1.269 | 831 | |||||
8.762 | 1.161 | ||||||
1.967 | |||||||
1.403 | |||||||
7.681 | |||||||
2.077 | 1.936 | ||||||
2Q19 | 2Q20 | ||||||
2Q18 | 2Q19 | 2Q20 | Residencial | Comercial | Industrial | Outros | Concessionárias |
Billed Market (GWh) |
: -2.2 % | : -15.6% | |
7.066 | 6.913 | |
5.837 | ||
2Q18 | 2Q19 | 2Q20 |
The effects of measures to combat the pandemic led to a reduction in the Commercial, Industrial and Other markets
The economic impact of Covid-19 in the market reduction is estimated at approx. R$119 mm
2
Reduction of energy losses for the second consecutive quarter
Total Losses Evolution (12 months)
9,532 | 9,706 | 10,102 | 10,050 | 9,945 | |||||
9,397 | 9,499 | ||||||||
9,336 | Loss Ex-REN | ||||||||
9,094 | |||||||||
9,739 | 9,737 | 9,736 | |||||||
9,264 | |||||||||
8,827 | 9,153 | 8,825 | |||||||
8,392 | 8,529 | ||||||||
26,72% | 26,76% | 26,60% | |||||||
25,86% | 25,97% | 26,09% | 26,06% | ||||||
25,56% | 25,51% | ||||||||
25,76% | 25,93% | 26,04% | 25,44% | 25,29% | Regulatory | ||||
24,49% | |||||||||
23,95% | Gap | ||||||||
22,98% | 23,15% | ||||||||
20,62% | 20,62% | 20,62% | 19,62% | 19,62% | 19,62% | 19,62% | |||
19,20% | 19,20% | ||||||||
Jun-18 | Sep-18 | Dec-18 | Mar-19 | Jun-19 | Sep-19 | Dec-19 | Mar-20 | Jun-20 | |
Loss (GWh) | REN | Loss/Grid Load (%) | Regulatory Target | Loss ex-REN/Grid Load (%) |
Continuity of actions initiated in Aug' 19
Reduction of Total Losses by 439 GWh in 2Q20 and 911GWh in 1H20
Loss combat teams strengthened with teams that were with suspended activities
Specific actions to combat losses, according to the characteristics of each regional
Total Losses Evolution - Possible Areas
Total Losses in Possible Areas (GWh, 12 months)
6.000 | |||
5.000 | 5.584 | 5.408 | 5.303 |
4.000 | 4.729 |
4.218
3.000
2.000
1.000
-
Jun-19 | Sep-19 | Dec-19 | Mar-20 | Jun-20 |
Reduction of
24.5%
in 1 year
Total Losses / Grid Load - Possible Areas (12 months)
17,1% 16,8% 16,6%
15,3%
14,5%
Jun-19 | Sep-19 | Dec-19 | Mar-20 | Jun-20 | |
Reduction of
2.6 p.p.
in 1 year
3
Reduction of energy losses for the second consecutive quarter (Cont'd)
Non-technical Losses Evolution (12 months) | Non-technical Losses (GWh, 12 months) | |
7,070 | 7,412 | 7,396 | 7,295 | |||||
6,917 | ||||||||
6,832 | ||||||||
6,838 | 6,918 | |||||||
6,517 | ||||||||
7,048 | 7,084 | 7,085 | ||||||
6,682 | ||||||||
6,517 | 6,351 | |||||||
6,212 | 55.36% | 54.37% | ||||||
5,965 | 52.92% | |||||||
5,895 | 55.30% | 52.68% | ||||||
52.27% | 52.00% | 52.96% | 52.92% | 51.86% | 52.05% | 50.25% | 49.53% | |
46.90% | 51.25% | |||||||
42.06% | 45.18% | |||||||
42.62% | ||||||||
36.06% | 36.06% | 36.06% | 36.06% | 36.06% | 36.06% | 36.06% | 36.06% | 36.06% |
Jun-18 | Sep-18 | Dec-18 | Mar-19 | Jun-19 | Sep-19 | Dec-19 | Mar-20 | Jun-20 |
REN | Non-Techinical Loss (GWh) |
Non-Techinical Loss/Low Voltage Market % | Regulatory Target |
Non-Techinical Loss/Low Voltage Market ex-REN ( %)
Non-Techinical Loss Ex-REN
7,048 | 7,084 | 7,085 | 6,682 | |||
6,351 | ||||||
2,923 | 3,177 | 3,087 | 2,595 | 2,201 | ||
(45%) | (44%) | |||||
(45%) | (47%) | (39%) | ||||
3,748 | 3,999 | 4,088 | 4,150 | |||
3,906 | (61%) | |||||
(55%) | (56%) | |||||
(53%) | ||||||
(55%) | ||||||
2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | ||
Risk Areas | Possible Areas | |||||
Non-technical loss in the possible areas presented the best figure since verification started (2016)
Installation of border metering in risk areas brought more robust data
4
IEN increase in line with the main pillar of the loss combat plan: focus on energy incorporation
Recovery Energy - REN and Incorporated Energy - IEN (GWh) | Bad Debt Provision / Gross Revenue (12 months) | |
600 | New Commercial Strategy | |||||
500 | 943 | 868 | ||||
400 | 705 | |||||
300 | 553 | |||||
200 | 363 | |||||
106 | ||||||
234 | 57 | 89 | ||||
100 | ||||||
135 | 167 | 162221 | 452830 | |||
102 | ||||||
0 | 62 | 42 | ||||
2T18 | 3T18 | 4T18 | 1T19 | 2T19 |
1200 | |||||||||||
6,6% | |||||||||||
800 | 5,0% | 5,4% | |||||||||
400 | |||||||||||
3,3% | |||||||||||
1,8% | 1,8% | 2,3% | |||||||||
1,9% | |||||||||||
0 | |||||||||||
Jun-19 | Sep-19 | Dec-19 | Mar-20 | Jun-20 |
REN Trimestral (GWh) # TOIs (Mil) IEN Trimestral (GWh) REN 12 meses (GWh)
2Q20 IEN 4.2 times higher YoY
Low number of TOIs and | = | Increased productivity of |
increased energy recovered | field teams | |
Insourcing of | Improvement of | Greater accuracy |
in target | ||
teams | training | |
identification | ||
Increase in Bad debt/Gross revenue due to the expectation of non-collection of future bills associated with higher increase in delinquency during the pandemic
The isolated effect of Covid-19 on Bad debt is estimated at approx. R$93 mm, considering the aging of accounts receivable
5
Historic result in quality service, in line with the top and largest DisCos in the country
DEC 12 months (hours) | FEC 12 months (times) | |
DEC (hours) 12 months
FEC (times) | |||||||||||||||||||
8.36 | 8.40 | 12 months | |||||||||||||||||
8.09 | 8.14 | 5.43 | |||||||||||||||||
7.83 | 7.67 | 7.78 | 7.77 | -21.4% | |||||||||||||||
4.71 | 4.60 | ||||||||||||||||||
4.44 | 4.36 | 4.38 | 4.36 | 4.31 | 4.27 | 4.27 | |||||||||||||
6.96 | -21.1% | ||||||||||||||||||
6.42 | |||||||||||||||||||
Jun-18 | Sep-18 | Dec-18 | Mar-19 | Jun-19 | Sep-19 | Dec-19 | Mar-20 | Jun-20 | |||||||||||
Jun-18 | Sep-18 | Dec-18 | Mar-19 | Jun-19 | Sep-19 | Dec-19 | Mar-20 | Jun-20 |
Target set at the 5th amendment to the concession contract (dec/20)
Target set at the 5th amendment to the concession contract (dec/20)
6
Consolidated EBITDA impacted by the effects of the pandemic on the Distribution business, despite the operational improvement
Amounts in R$ mn
450
400
350
300
250 | -276 | 20 | |||||||||||
-132 | |||||||||||||
200 | 385 | 147 | |||||||||||
150 | |||||||||||||
100 | 145 | ||||||||||||
50 | |||||||||||||
0 | |||||||||||||
Adjusted EBITDA 1Q19 | Net Revenue | Non Manageable Expenses Manageable Expenses | Provisions | Adjusted EBITDA 1Q20 | |||||||||
(PMSO) |
Estimated economic impact, exclusive of the pandemic, on Disco's EBITDA
Impact on EBITDA (R$ MN) | ∆ |
Parcel B + Non-technical losses | (119) |
PECLD | (93) |
7
Reduction in JEC provisions due to lower new litigation for the third quarter in a row
Provisions (R$ MN) | 2Q20 | 2Q19 | % Change |
2Q20/2Q19 | |||
JEC | (21) | (54) | -61.9% |
Civil | (38) | (32) | 18.8% |
Others | (9) | (3) | 254.0% |
Total | (68) | (88) | -23.4% |
Number of JEC processes ('000)
25.0 | 24.2 | 22.4 | |
21.9 | |||
20.0 20.7 | 21.3 | ||
18.9 | 19.4 |
16.3
13.3 | 12.7 11.6 |
7.8 | |
4.8 |
2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | |||
# new lawsuits | # closed lawsuits | # stock of lawsuits | |||||
8
Improvement in the Distribution business hurt by the effects of the pandemic
Amounts in R$ mn
-230
385 | ||||||||||||||||
+5 | ||||||||||||||||
-1 | ||||||||||||||||
-14 | ||||||||||||||||
145 | ||||||||||||||||
Adjusted EBITDA 2Q19 | EBITDA Light SESA | EBITDA Light Energia | EBITDA LightCom | Others | Adjusted EBITDA 2Q20 |
The reduction in the DisCo's EBITDA is due to the impacts of the pandemic, despite the Company's operating improvement (decrease in losses, OPEX and legal contingencies)
The increase in the GenCo's EBITDA is explained by the reduction in
operating costs and expenses in 2Q20
9
Net Result also negatively impacted by the pandemic
Amounts in R$ mn
11
-45
87
-240
1
96
1
2Q19 Result | Adjusted EBITDA | Financial Result | Taxes | Depreciation | Equity Income | 2Q20 Result |
Net Result impacted by the pandemic, despite the lower tax collection
and improved Equity Income
10
Impacts of the pandemic overshadowed the DisCo's turnaround result
Amounts in R$ mn
DisCo's turnaround result (1H20 vs 1H19) | Estimated impacts of the pandemic |
Result | +6 | Impact of | ||||||||||||||
+37 | -93 | |||||||||||||||
+R$132 | +89 | -R$212 | ||||||||||||||
million | million | |||||||||||||||
-119 | ||||||||||||||||
Reduction of losses | PMS Reduction | Contingencies Reduction | PECLD | Parcel B + Non-technical losses |
The positive effects of turnaround will remain, while the impacts of the pandemic are transient and should be addressed at the regulatory level.
11
Robust cash position to face future debt maturities
2Q20 Consolidated debt amortization, with subsequent events (R$ mn)
Net debt (R$ mn) & Net Debt/EBITDA (x)
3500,0
3000,0
Subsequent Events 2500,0
2000,0
COVID Account
R$1,010 MN1500,0
+
19th issuance of
1000,0
Debentures
R$500 MN 500,0
,0
Maturity: 3.1 years
3,003 | |||||||
2,331 | Maturity of the | ||||||
19th issuance | |||||||
1,932 | |||||||
of Debentures | |||||||
1,510 | |||||||
1,007 | |||||||
756 | |||||||
995 | 357 | ||||||
132 | |||||||
Cash | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
18000,0 | 3.75 | 3.75 | 3.75 | 3.75 | 3.75 | 4,000 | |||||
16000,0 | 3,5000 | ||||||||||
3.69 | |||||||||||
14000,0 | |||||||||||
3,000 | |||||||||||
3.06 | 3.07 | ||||||||||
12000,0 | 3.00 | 2.98 | |||||||||
2,5000 | |||||||||||
10000,0 | 9,140 | 8,593 | 8,428 | 8,255 | |||||||
7,989 | 7,694 | 2,000 | |||||||||
8000,0 | 6,750 | 6,721 | |||||||||
6,541 | 6,699 | ||||||||||
1,5000 | |||||||||||
6000,0 | |||||||||||
4000,0 | 1,000 | ||||||||||
2000,0 | ,5000 | ||||||||||
- | - | ||||||||||
2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | |||||||
Gross Debt | Net Debt | ||||||||||
Net Debt/EBITDA | Contractual Cap for Net Debt/EBITDA | ||||||||||
Debt costs
Debt Indexes
TJLP | Others* | |||||
1% | ||||||
1% | ||||||
9.34% | 8.84% | 8.79% | 8.31% | |||
IPCA | ||||||
7.12% | 31% | |||||
4.88% | CDI | |||||
5.78% | 5.78% | 67% | ||||
4.30% | 4.14% | |||||
2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | ||||
Actual Cost | Nominal Cost | * Equivalent to the sum of fixed cost, Libor and the U.S. dollar exchange rate variation | ||||||
12
Important Notice
This presentation may include declarations that represent forward-looking statements according to Brazilian regulations and international movable values. These declarations are based on certain assumptions and analyses made by the Company in accordance with its experience. the economic environment. market conditions and future events expected. many of which are out of the Company's control. Important factors that can lead to significant differences between the real results and the future declarations of expectations on events or business-oriented results include the Company's strategy. the Brazilian and international economic conditions. technology. financial strategy. developments of the public service industry. hydrological conditions. conditions of the financial market. uncertainty regarding the results of its future operations. plain. goals. expectations and intentions. among others. Because of these factors. the Company's actual results may significantly differ from those indicated or implicit in the declarations of expectations on events or future results.
The information and opinions herein do not have to be understood as recommendation to potential investors. and no investment decision must be based on the veracity. the updated or completeness of this information or opinions. None of the Company's assessors or parts related to them or its representatives will have any responsibility for any losses that can elapse from the use or the contents of this presentation.
This material includes declarations on future events submitted to risks and uncertainties. which are based on current expectations and projections on future events and trends that can affect the Company's businesses. These declarations include projections of economic growth and demand and supply of energy. in addition to information on competitive position. regulatory environment. potential growth opportunities and other subjects. Various factors can adversely affect the estimates and assumptions on which these declarations are based on.
13
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Light SA published this content on 20 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 August 2020 17:11:58 UTC