CESP Companhia Energetica de São Paulo : Earnings Releases 1Q21

RESULTS 1Q21

Conference Call

April 28, 2021

(in Portuguese with simultaneous translation into English) 11 AM (Brasília) / 10 AM (NY) / 3 PM (London)

Tel: [phone]

International Participants:

Tel: [phone] | [phone]

São Paulo, April 27, 2021: CESP - Companhia Energética de São Paulo ("CESP"), (B3: CESP3, CESP5 e CESP6) discloses its results for the first quarter of 2021. The information was prepared in accordance with International Financial Reporting Standards ("IFRS") and accounting practices adopted in Brazil, except where stated otherwise.

CONTENTS

1Q21 Results	3
Message from the Management	4
Company Profile	6
Generation Complex	6
Operating Performance	7
Commercial Performance	9
Financial Performance	15
Indebtedness	21
Capex	22
Free Cash Flow	22
Retirement Plan (Vivest)	23
Dividends	25
Contingencies	26
ESG Agenda	29
Capital Markets	29
Appendices	31

2

Results | 1Q21

1Q21 RESULTS

CONSOLIDATED FINANCIAL HIGHLIGHTS

	(BRL thousand)			1TQ1			1Q20			∆
	Gross operating revenue	634,200		540,862		17%
	Net operating revenue			556,885			460,540			21%
	Gross operating result	191,773		234,205		-18%
	Cost and expenses			(209,257)			(251,743)			-17%
	EBITDA	445,483		309,192		44%
	Adjusted EBITDA1			283,042			336,171			-16%
	Adjusted EBITDA margin	51%		73%			-22 p.p.
	Net income			115,798			53,813			115%
	Net debt	1,109,602		1,067,311		4%
	Net debt/EBITDA LTM			0.8x			0.9x			-0,1x
	Net debt/ adjusted EBITDA¹ LTM		1.2x		1.0x		0,1x

• Net revenue grew in 1Q21 to BRL557 million, mainly driven by the growth in trading operations by CESP Comercializadora.
• Adjusted EBITDA of BRL282 million in 1Q21, down 16% year on year, due to higher expenses with purchase of energy on account of the adverse hydrological scenario.
• Operating cash flow of BRL172 million after debt service, with cash conversion ratio2 of 61% in 1Q21.
• Reduction of BRL229 million3 in probable contingent liabilities when compared to December 2020 due to judicial settlements and revision of estimates based on the progress of proceedings.
• Net income of BRL116 million in the quarter, up 115% from 1Q20, due to the positive impact of the reversal of probable contingent liabilities in 1Q21.

1. Adjusted EBITDA excludes allowance for litigation and write-off of judicial deposits
2. Cash conversion ratio = OCF after debt service / Adjusted EBITDA
3. After inflation adjustment and interest. Considers settlements up to April 2021

3

Results | 1Q21

MESSAGE FROM THE MANAGEMENT

The first quarter of 2021 marks the advance of several fundamental projects to CESP's future, notably its long-term commercial strategy, the continuity of efficiency gains and the ESG agenda.

The Company remains committed to its mission of creating and offering the best energy solutions and generating and sharing wealth in a sustainable manner by transforming people and the society.

The modernization of the electricity sector and the expansion of the free energy market make innovation increasingly important and demand agile, simple and collaborative processes, driving the organization to constantly reinvent itself. In this scenario, we designed our strategic digital transformation plan with the aim of modernizing and simplifying the current technological architecture and for automating the processes through specialist systems and even robotics.

Another important step was the expansion of our commercial structure to expand and diversify our client portfolio, while continuing to exercise diligence in credit and risk analysis of the new agreements to be signed. This quarter, we signed new commercial agreements, advancing strategically in the contracted level of the portfolio for the period from 2023 to 2025.

In light of a highly challenging hydrological scenario, we remain focused on our strategy of managing the energy balance backed by highly disciplined execution. CESP took advantage of the windows of opportunity in the market and purchased approximately 95% of the energy required to ensure its energy balance in 2021.

Considering the importance of the topic of climate change, we understand the need to implement mechanisms for effective planning and management of these risks, considering the importance of water as the raw material for clean energy generation. Through our renewable energy generation, we can offer our customers solutions to help in their energy transition. This quarter, we advanced on this front by increasing the sales of I-REC (International Renewable Energy Certificates) certificates. I-REC is a global system that oversees the trading of renewable energy certificates.

Another important topic for the Company is the management of the impacts of our business on the local communities where we operate. We created a diagnosis tool that guides our relationship initiatives with these groups in order to generate shared value. This close engagement also enables us to identify the key local needs and generate opportunities to build participative solutions, thereby bringing value to both the communities and the Company.

Due to the significant volume of contingent liability, the amounts under litigation are revised constantly and we remain focused on optimizing the management of these proceedings. Currently, we have our own monitoring system, aided by highly capable and reputed law firms, in order to constantly reduce the risks. We ended 1Q21 with

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Results | 1Q21

contingent liabilities of BRL10.4 billion, and over April 2021 we had an additional reduction of BRL118 million, totaling BRL10.2 billion, a reduction vs. 4Q20 of 4% after inflation adjustment. With this additional reduction, the probable contingent liabilities were BRL1.6 billion, down 13%, mainly due to the revision of estimates according to the progress of the lawsuits and the settlements made in April 2021.

Our commitment to always do the best, bringing extraordinary results to the business without ever disregarding safety, is reflected in our operating indicators. Average availability index of the plants reached 95.8% in 1Q21, continuing the consistent uptrend and significantly above the benchmarks established by ANEEL.

Adjusted EBITDA4 in 1Q21 was BRL282 million, down BRL54 million from the same period the previous year, mainly due to the increase in energy purchases on account of the worsening hydrological scenario in the period.

Strong cash generation was again one of the period highlights. In 1Q21, we generated operating cash flow of BRL172 million after debt service, with a cash conversion ratio5 of 61% and free cash flow of BRL157 million in the period.

To all those who have been with us during this journey, thank you very much.

MARIO BERTONCINI	MARCELO DE JESUS
Chief Executive and Investor
Chief Financial Officer
Relations Officer

1. Adjusted EBITDA excludes provision for litigation and write-off of deposits
2. Cash Conversion Ratio = Operating Cash Flow after Debt Service / Adjusted EBITDA

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Results | 1Q21