corporate presentation - ubs global emerging markets*

8/10/2019 Corporate Presentation - UBS Global Emerging Markets*

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Corporate Presentation

UBS Global Emerging Markets

December 2014


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Light HoldingsDiversified structure which is comprised of the distribution, generation

and commercialization segments.

2


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4

56

7

Light in numbers

Amaznia Energia

Renova

Guanhes Energia

Generation

Complexo de Lajes

Distribution RJ StateConcession

Area%

Population 16 mn 11 mn 68%

Area 44,000 Km 11,000 Km 25%

GDP R$ 407 bn R$ 207 bn 51%

# Consumers 7 mn 4 mn 57%

# Municipalities 92 31 34%

5

HPP Ilha dos Pombos

SHP Paracambi

HPP Santa Branca

1

2

3

1IBGE (2010)

4

6

7

3


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RankingsAmong the largest players in Brazi l

INTEGRATEDNet Revenues 2013*R$ Billion

POWER GENERATION PRIVATE-OWNED COMPANIES

Installed Hydro-generation Capacity (MW)2013

37,767

25,77722,926

21,783 20,39115,634

15.6

10.69.2

7.47.1

5,560

2,652 2,241 2,2191,799

896

ELECTRICITY DISTRIBUTIONEnergy Consumption in Concession Area** (GWh) - 2013

1Source: Companies reports

2Source: Relatrio do Sistema de Apoio

a ANEEL

* Construction Revenue Included

** Captive Market

*** Considers the 9 MW of RenovasSHPs

and 19 MW of Brasil PCH

***4

14.6


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Shareholder StructureEff ic ient comb inat ion of so l id indu stry and f inancia l 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

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Corporate GovernanceDecision process assures transparency and value creation

General Assembly

Fiscal Council

Board of Directors

Auditors

Committee

Governance andSustainability

Committee

HumanResourcesCommittee

Finances

Committee

Management

Committee

Chief ExecutiveOfficer

CorporateManagement Officer

Joo B. Zolini Carneiro Ricardo Cesar C. Rocha Evandro L. Vasconcelos Andreia Ribeiro Junqueira

Fernando Antnio F.Reis Paulo Carvalho Filho Evandro L. Vasconcelos*

Paulo Roberto R. Pinto

ChiefCommunications

Officer

Luiz Otavio Ziza Valadares

LGSXYADR-OTC

Interim*

6

Chief Financial and

Investor RelationsOfficer

Chief Legal Officer

Chief HR Officer

Chief Distribution

Officer Chief Energy Officer

Chief BusinessOfficer


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Energy ConsumptionDistribution9M14

7

1Note: To preserve comparability in the market approved by Aneel in the tariff adjustment process.the billed energy of the free customer CSN has been considered back.

TOTAL MARKET (GWh)

Industrial

captive5.7%

Free

19.8%

Otherscaptives

14.6%

Commercialcaptive28.4%

Residentialcaptive31.5%

+3.2%

+3.8% p.a.

19,186

17,4197,259

19,800

23.9C

24.4C

9M12

M11

24.3C

24.0C

9M13 9M14


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Market Breakdown

8

ELECTRICITY CONSUMPTION (GWh)

TOTAL MARKETACCUMULATED

FREECAPTIVE

RESIDENTIAL INDUSTRIALCOMMERCIAL OTHERS TOTAL

+3.2%

9M13 9M14

15,209

16,048

19,186

3,978

3,752

19,800

+2.5%

2,686

2,747

2,837

151

161

2,908

+4.5%

5,909

637

663

6,175

1,039 1,042

4,229

3,190

2,928

3,970

+8.6%

6,212

6,747

9M13 9M14

9M13 9M14

9M13 9M14 9M13 9M14

-6.1%

5,271

5,512


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Losses and Collection

9

LOSSES (12 MONTHS)

% Non-technical

losses/ LV Market

Non-technical losses GWh

Technical losses GWh

PBD/GROSS REVENUE

(BILLED SALES) - QUARTER

COLLECTION RATE

12 MONTHS

97.9%

102.0%

Sep-13 Sep-14

Sep/14

ep/13 Mar/14

Jun/14

ec/13

43.7%

5,738

2,614

8,552

41.3%

5,972

2,843

8,352

41.9%

5,906

2,851

8,815

5,905

2,647

8,757

- 2.4 p.p.

42.2%

42.4%

5,955

2,793

8,748

3Q12

3Q1 4

Q13

1.9%

2.0%

1.6%

-0.4 p.p.


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Loss Reduction StrategyEfficient combination between technology and effective management

Outisde of Communities

Communities

CUSTOMERS ENERGY AND STATUS

Retail and residential clients(Low Voltage)

4,100,000

Low Voltage

Largest Clients22,000

LargeClients

(hight andmed voltage)

7,600

11,500 GWh (48%)

100% Concluded

2,700 GWh (11%)

1/3 as of today until 2015

10,000 GWh (41%)

APZ

10

2010

2011 2013012

115

Sep/14

351

30

79

102

227

432

272

330

7

122

197

131

570

439


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Mechanical

MeterDisplay

11

Technology: Centralized MeasuringUse of new technologies in areas with a high level of losses


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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;

29 units implemented with 511 thousand

clients (12% of total); 200 thousands additional clients per year.

Zero Losses AreaProject: Light Legal

12

ELECTRONICMETERS

WORKFORCEMANAGEMENT

PARTNERSHIP WITH THE STATEGOVERNMENT


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APZ COLLECTIONAPZ LOSSES

Evolution of APZs ResultsSigni f icant los s reduc t ion and increasing col lect ion rate

Before

50.0 %

19.2%

89.2%

95.5%

Before

100.2%

98.4%

00.3%

93.9%

20.3%

22.3%

22.0%

13

M

a

1

J

1

S

1

J

1

S

1

M

a

1

S

1

J

1

S

1

-29.7%

+9.2%

D

1

91.2%

D

1

22.2%

J

1

16.4%


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Tariff Readjustment of 2014

Parcel B

0.58%

Transmission

and Sector

Charges

7.33%

CVA Balance Other

Financial

Items

1.31%

23.18%

2013

Financial

Additions

Tariff

Readjustment

-3.95%19.23%

2.89%

Energy

Purchase

11.07%

Transfer of variation inParcel A and B

+14.54% +8.64%

Variation in financialaccounts

After November 7th Discos customers will observe an average increase of

19.23% in their electricity bills. Residential customers will notice a lower-than-average increase of 17.76%

Voltage Level(Consumption

segment)

AverageIncrease

A2 20.25%

A3a 19.39%

A4 19.15%

AS 19.83%

B1 (Residential) 17.76%

B2 (Rural) 21.74%

B3 (Commercial) 21.50%

B4 (Il. Public) 22.65%

High Voltage 19.46%Low Voltage 19.11%

AverageReadjustment

19.23%

From the average customer increase of 19.23%, Parcel A costs accounted for 18.65% and Parcel B for only 0.58%.15

Average

Customer

tariff

increase


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Generation


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Contracted Energy (Free)

Hedge

vailable Energy

18

2014 2015 2016 2017 2018 2019 2020 2021

549

39

510

28 28

28 28

28

28

28

549 549 549

549

549

549

549

480 434

461

418

317

242 232

42

88 61 103

205

280

290

Average selling price in 2014-2021: R$ 163/MWh (base date: January, 2014)

Assured Energy: 549 MWaverage

Energy commercialization focused on the free market


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Power Generation ExpansionRenewable energy generat ion projects, mainly through partnership s

Project

Installed Capacity

(MW)

Assured Energy

(MWaverage)

Operational Start Stake

Paracambi

25 20 2012 51%

Renova

592.7 (in operation)

1,648.3 (contracted)

213 (in operation)

908 (contracted)

2008 - 2014

2015 2019

15.87%

Belo Monte

11,223 4,571 2015 2.49%

Guanhes

44 25 2015 51%

Lajes

17 15 2015 100%

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RESULTS


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Net Revenue

Industrial (Captive)

6.3%

NET REVENUE (R$MN) Generation7.4%

Distribution

79.4%**

NET REVENUE BY SEGMENT (3Q14)*

Commercialization

13.2%

* Eliminations not considered

** Construction revenue not considered

NET REVENUE FROM DISTRIBUTION (3Q14)

Commercial

(Captive)

40.9%

Others (Captive)

12.6%

Network Use (TUSD)

(Free + Concessionaires)

8.3%

Residential (Captive)

31.9%

Construction Revenue

Revenue w/out construction

revenue

3Q14 9M13Q13 9M14

+9.4%

1,557

1,581

634

455

1,679

5,356

4,901

5,301

25722

1,838

5,936

+10.8%1,360

128

227

22

+1.5%

+8.2%


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Operating Costs and Expenses

Manageable

(distribution)

(20.4%)

Generation and

Commercialization

(19.6%)

Non manageable

(distribution

**

)

(60.0%)

* Eliminations not considered** Construction revenue not considered

DISTRIBUTION PMSO COSTS (R$MN)COSTS (R$MN)*3Q14

COSTS (R$MN)*9M14

Non manageable

(distribution

**

)

(64.3%)

Generation and

Commercialization

(16.2%)

Manageable

(distribution)

(19.5%)

R$ MN 3Q13 3Q14 Var. 9M13 9M14 Var.

PMSO (311.5) (326.6) 4.8% (987.0) (979.4) -0.8%

Provisions (19.6) (37.9) 93.3% (97.2) (99.3) 2.2%

PCLD (3.9) (20.3) 419.8% (38.3) (38.3) 0.1%

Contingencies (15.7) (17.6) 12.2% (58.9) (61.0) 3.5%

Depreciation (37.1) (29.8) -19.6% (114.6) (91.2) -20.4%

Other operational/revenues expenses

(86.0) (91.4) 6.3% (250.5) (263.0) 5.0%

Total 58.2 105.6 81.4% 246.1 296.6 20.5%

327

321

988

3,305

979

827

312

327

+4.8%

3T14T13 9M14M13

987 979

-0.8%

23


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EBITDA by segment

(R$ MN)

25

Generation and Commercialization

1

Electricity Distribution

56.0%

Consolidated EBITDA (R$ MN) 3Q14 3Q13 Var. 9M14 9M13 Var.

Distribution 137.1 608.9 -77.5% 524.3 1,011.5 -48.2%

EBITDA Margin (%) 10.1% 43.8% -33.7 p.p. 11.5% 23.1% -11.6 p.p.

Generation 24.5 104.9 -76.7% 295.3 324.4 -9.0%

EBITDA Margin (%) 19.2% 79.0% -59.8 p.p. 62.5% 79.1% -16.6 p.p.

Commercialization 23.6 9.3 155.0% 88.8 23.5 277.0%

EBITDA Margin (%) 10.4% 6.0% 4.5 p.p. 13.1% 5.1% 8.0 p.p.

Others and eliminations (1.7) (1.1) 58.4% (32.5) (4.3) 649.1%

Total 183.6 722.0 -74.6% 875.8 1,355.1 -35.4%

EBITDA Margins (%) 11.6% 46.4% -34.8 p.p. 16.5% 27.6% -11.1 p.p.

185

-74.4%

723

26.0%

74.0%

15.8%

84.2%

3Q13 3Q14 9M13 9M14

74.4%

57.7%

25.6%

42.3%

-33.2%

908

1,359

1Percentages do not consider eliminations


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EBITDA

EBITDA

9M13

EBITDA

9M14

Net

Revenue

Non-

Manageable

Costs

Manageable

Costs

(PMSO)

Provisions

egulatory

Assets and

Liabilities

Regulatory

Assets and

Liabilities

Adjusted

EBITDA

9M13

Adjusted

EBITDA

9M14

Adjusted EBITDA 9M13 / 9M14 (R$ MN)

Other

operacional

revenues

Equity

Pikup

- 16.2%

- 35.4%

1,246

(109)

1,355

400

(896)

0,2 (2) 23 (5)

876

169

1,044

26


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Net Income

9M13

9M14

BITDA Financial

Result

Taxes Depreciation

Adjusted Net Income 9M13 / 9M14 (R$ MN)

Regulatory

Assets and

Liabilities

Regulatory

Assets and

Liabilities

Adjusted Net

Income

9M13

Adjusted Net

Income

9M14

(3)

- 68.9%

- 34.3%

387

(72)

458 (479)

8

169

(14)

143

111

254

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Dividends

28

Average payout of 86% in the last 5 years


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Investments

CAPEX (R MN)

CAPEX BREAKDOWN

(R MN)

9M14

Generation

18.1

Administration

27.8

Others

7.7

Develop. of

Distribution

System

339.7

Losses

Combat

227.9

Investments in Electric Assets (Distribution)

Commerc./

Energy

Eficiency

8.3

519

2010

701

2011

2012

797

694

103

519

182

775

154

713

132

845

+30.5%

2013

482

9M13

9M14

88

54

394

575

630

929

30


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Why invest in Light?

31

Rio as a host of major eventsCommunities pacificationPro-business environmentInvestment projects hubEnergy Market growth

EconomicTransformation

in theConcession Area

Progress in the TechnologyProgram (Smart Grid)

New network and electronic metersin the pacified areas

Zero Losses Area Program

EnergyLosses

Reduction

Projects under construction withpartnerships: Renova, Belo Monte andGuanhes (total of588MW)SHPP Lajes under construction(17MW).

Growth in theGenerationBusiness

Expiration of RegulatedContracts (Dec/2013)New contracts in 2014Energy available forcommercialization

EnergyCommercialization

focused on thefree market

Listed in Novo Mercado ofBovespa

Board Commitees with strongparticipation in the decision makingprocessIncluded in the Sustainability

Index (ISE) for the 7th year

Best CorporateGovernance

Practices

Dividend Policy: minimum 50%of net income;

Average payout since2009:86%

Dividend trackRecord


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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 and future events expected, many of which are out of the

Companyscontrol. Important factors that can lead to significant differences between the actual results and statements on

future events or business-oriented results include the Companys 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, plans, goals, expectations and intentions,among others. Because of these factors, the Companysactual results may significantly differ from those indicated or implicit

in the statements on events or future results.

The information and opinions herein must not be understood as recommendation to potential investors, and no investment

decision should be based on the veracity, the updated or completeness of this information or opinions. None of the

Companysprofessionals 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 Companysbusinesses. 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.

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Contacts

Joo Batista Zolini CarneiroCFO and IRO

Gustavo WerneckSuperintendent of Finance and Investor Relations

+55 21 2211 [email protected]

Mariana da Silva RochaIR Manager

+ 55 21 2211 2814

[email protected]

http://ri.light.com.br/ www.facebook.com/lightri twitter.com/LightRI

corporate presentation - ubs global emerging markets*

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