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INVESTOR PRESENTATION
Edenor Investor Day 2017
2
The material that follows is a presentation of general background information about Edenor as of the date of the presentation. It is information insummary form and does not purport to be complete. No representation or warranty, express or implied, is made concerning, and no reliance should beplaced on, the accuracy, fairness, or completeness of this information.
This presentation contains forward-looking information and statements. Forward-looking statements are statements that are not historical facts.These statements are only predictions based in our current assumptions, expectations and projections about future events. Forward-looking statementsmay be identified by the words “believe,” “expect,” “anticipate,” “target,” or similar expressions. While Edenor's management believes that theexpectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements aresubject to various risks and uncertainties, many of which are difficult to predict and are generally beyond the control of Edenor, which could cause actualresults and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.”Further, if Edenor’s actual results are less favorable than those shown in the projections or if the assumptions used in the projections prove to beincorrect, Edenor may not be able to make dividend payments in the amount forecasted, or at all. Edenor undertakes no obligation to publicly update itsforward-looking statements, whether as a result of new information, future events, or otherwise, nor makes any representation or warranty, expressed orimplied, as to the accuracy or completeness of the information contained herein, and nothing contained herein is, or shall be relied upon as a promise orrepresentation. Management is not making and you should not infer any representation about the likely existence of any particular future set of facts orcircumstances.
This presentation does not constitute or form part of, and should not be construed as, any offer or invitation to subscribe for, underwrite orotherwise acquire, any securities of Edenor nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase orsubscribe for any securities of Edenor. Persons who intend to purchase or subscribe for securities of Edenor in any potential future offering are remindedthat any such purchase or subscription may be made solely on the basis of the information contained in the prospectus or offering circular in connectionwith such proposed offering. In particular, this presentation and the information contained herein are not an offer of securities for sale in the UnitedStates.
The market and competitive position data, including market forecasts, used throughout this presentation was obtained from internal surveys,market research, publicly available information and industry publications. Although we have no reason to believe that any of this information or thesereports are inaccurate in any material respect, we have not independently verified the competitive position, market share, market size, market growth orother data provided by third parties or by industry or other publications. Edenor does not make any representation as to the accuracy of such information.
DISCLAIMER
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
EDENOR AT A GLANCE
Note: (1) concession contract (may be extended for an additional maximum period of 10 years); (2) LTM Sep 2020; (3) @ Oct 5, 2020 , net of shares at treasury; (4) Includes 0.2% of the Employee Stock Ownership Program (PPP) ; (5) Pampa Energía has 462,292K Class A Shares and 37,559K Class B Shares
4
Key metrics
9 million
People
95 years
Until 2087 (1)
+ 3.1 million
Customers
~4,800
Direct Personnel
~360,000
SMEs & Industries
20,173
GWh Sold (2)
4,637 km²
Concession Area
19.7%
Market Share (2)
Geographic footprint
Corporate structure
Float(4) NYSE: 8.6%
BCBA: 6.5%ANSES
(5)57.1%15.1%
(3)
MAIN FIGURES
27.8%
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
63
280
11
115
229161
64
-329
443 410
885
1.463 1.484 1.502
1.157
2014 2015 2016 2017 2018 2019 LTM Sep '20
5
Sales | in USD MM
Energy sold by type of customer | LTM Sep’20
Residential
SMEs
Industrial
Wheeling System
Others
20,173 USD 492mm
Note: (1) 2001 – 2017 historical values and average FX, 2018 – LTM Sep’20 adjusted values and closing FX of each year; (2) Bank loan amortizes in Apr. and Oct. 2019 and 2020, and senior notes in Oct. 2022
Adj. Ebitda | in USD MM
Financial Debt | in USD MM
EBITDA of USD-329MM if subsidies of USD602MM are
not included
Net cash position: USD3MM
ICBC Loan ON 2017ON 2022(2) (2)
FINANCIAL POSITION
2014 2015 2016 2017 2018 2019 LTM Sep’20
USD285mm of Past Liabilities resolution
not included
(1) (1)
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
6
COVID-19 CRISIS
Actions Taken & Main Impacts
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
Critical Measures Workforce Protection
Increased Digitalization Energy Demand & Collection
Crisis Committee created
Essential Activity from beginning
Backup Control Center fully operating
Donation Campaigns, helping NGOs in our Concession Area
+2000 employees working remotely
Commercial offices closure, tasks reassigned
Strict measures regarding health and hygiene implemented
Suppliers and contractors situation permanently checked
edenordigital completely implemented
All commercial procedures available in digital
+75% or 600 thousand new edenordigital accounts
+290% increase in digital payments
-14% demand | Large & Medium Customers
+16% demand | from Residential Clients
Reading & Billing processes being normalized
Fraud and debt actions were temporarily suspended
Note: Variations from Mar-Sep ‘20 for Digitalization and Mar-Sep 19 vs 20 for Energy Demand.
RECENT TURNOVER
8
ARGENTINA’S ELECTRICITY POWER MARKET OVERVIEW
Structure of the power sector in Argentina
Wind and solar
Thermal
Hydro
Nuclear
Generation
Total gross power generation 2019:~131,200 GWh
Demand
Total demand 2019:~128,900 GWh
Source: Company filings and CAMMESA
105.321GWh distributed in 2019
28significant players
Rank Company
Market
share
20%
2 16%
3 11%
Distribution
#1
Transmission
1high voltage transmitter
6
2international transmitters
regional transmitters
Clearing house
61%27%
6%6%
43%
29%
28%
Large distribution consumers
Residential/public lightning
SMEs
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
1992
PublicEmergency Law
TariffIncrease
First RTI
Concession Contract
THE HISTORY OF EDENOR IN A NUTSHELL
1992 2002 2016 2022
UNIRENBreach of Agreements
Ad-hoc RegulationsDelay in Tariff AdjustmentsIncrease of Energy Losses
Lower Quality Service
9
Regulatory Framework Compliance
WEM Normalization
Chain of Payments Recomposition
2017
Reduction of the MWh Price
Significant Improvement in Service Quality
10 Years in Compliance
2019
• Liabilities Regularization Agreement
• Fully updated tariff
2020
• Social Solidarity and Prod. Reactivation Law• Enre Intervention• Tarriff Freeze
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
2018 2021
Pause in Framework Compliance
Economic and Sanitary Crisis
Chain of Payments Deterioration
• VAD update delayed
• Health emergency declared
• Mandatory Isolation
• Tariff freeze extension (Dec.20)
• Partial Payments to CAMMESA
2017 Integral Tariff Review
10
Source: ENRE Resol. No 63/2017
Granted for a 5 year period (2017-2021)
Methodology │New Replacement Value (NRV)
Regulatory Asset Base │ USD 2.6bn @ Dec ’15
Rate of Return │ 12.46% before tax
Regulatory VAD │ USD 956mm @ Dec ’15
Cost Variation Adjustments │ semiannual cost update
Quality Standards of Service │ required path to normalization
Note: (1) FX: 13.04 ARS/USD @ Dec ’15 (2) cost updated by: Salaries, Whosale Price index, Consumer Price index (3) Includes all CPD adjustments @ Jun‘20.: 2016: 38%; 2017: 24.98%; 2018: 42.46%; 2019: 48.38%; 1H’20: 12.97%
(1)
(1)
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
Depreciated RABARS 146.6 bn
12.46% WACC before taxes
Gross RABARS 313.6 bn
Useful Life45 years
Reg.EBITDA25.000
(2)
Regulatory VAD today | in ARS MM | Sep ‘20(3)
Provisions from 2017 ITR
11
REGULATORY ASSET BASE
Note: FX : 15.89 ARS/USD 2016, 76.18 ARS/USD Sep’20. Includes CPD adjustments of each period
MK / RAB
0.1 X
FX variation | 379%Inflation variation | 198%
Diff.: -38%
RAB Evolution Sep ’20In USD MM
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
EDENOR´S PERFORMANCE
GROSS SALES BREAKDOWN
13
Yearly Sales Evolution | in GWh Energy Sold by Type of Customer @ Sep’20
Yearly Sales Evolution | in USD MM
Residential
SMEs
Industrial
Wheeling System
Others
20,173 USD 492mm
Note: (1) 2015 – 2017 historical values and average FX, 2018 – Adjusted values and closing FX of each year; (2) Public Lighting & Shantytowns
(1)
(2)
3.1-0.6%-3.0%
-1.9%
-5.7% +1.0%
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
410
885
1.463 1.484 1.502
1.157
2015 2016 2017 2018 2019 LTM Sep '20
GENERATION COST INCREASE PATHEdenor’s Average | Subsidies are still part of the bill
14I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
0
20
40
60
80
100
120
1
-
20
40
60
80
100
120
1
Bill Components
Note: (1) Calculated based on an average rate of the different customer categories; (2) pursuant to Res. No 14/2019 issued by the Secretariat of Renewable Resources and Electricity Market CAMMESA seasonal programming
(1)
Generation
Transmission
VAD
Taxes
w taxes wo taxes
23%
34%
2%
41%
44%
3%
53%
% Subsidy
Seasonal Price
WEMSubsidy:
47%@ Sep ‘20
88%
94%
56%
84
40
MonomicEnergy Price
Demands≥ 300 kW
Demands< 300 kW
(2)
(2)
35%
Residential CustomersSeasonal Price: 1,764
% Subsidy : 59%
692 2,174
36%
4,255
BILL COMPARISONWe are still cheaper than in other provinces and countries
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
EPEC Cordoba
EDES Buenos Aires
EDEN Buenos Aires
ENERSA Entre Rios
EDESA Salta
EPE Santa Fe
EDERSA Rio Negro
EDELAP La Plata
EDESAL San Luis
EDEMSA Mendoza
EDN CABA
Tariff @ Sep ’20Residential customer - 275 KWh/month
Per CountryInvoice w/Taxes
Note: FX: 76.18 ARS/USD @ Sep 30.2020; (1) State owned Companies
Per ProvinceInvoice w/Taxes
(1)
(1)
% VAD over tariff
% Pass Through over tariff
% Tax over tariff
75
65
56
54
54
34
Spain
UK
Peru
Brazil
France
Chile
EDN
MAIN CONCERNS
17
OUR ATTENTION IS ON…
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
VAD Freeze | 2020 Bad Debt | Dec19 - Sep20
Energy Losses | 2020e Energy Demand
Last tariff update Mar'19
CPD not granted impact @Sep20 ARS 14,340 MM
Cammesa Debt @Sep20 | ARS 14,411 MM w/o int.
66% increase mainly due to Covid-19 impacts
ARS 3,846 MM increase
Total impact ARS 7,900 MM
Energy purchases impact ARS 4,450 MM
VAD impact ARS 3,450 MM Lower demand vs. RTI 2020e: -21%
Lower demand vs. RTI base year: -11%
2020 impact decreased demand ARS 6,000 MM
Delayed increase 68%
18
BAD DEBT
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
Historical EvolutionIn USD MM │ %
Bad Debt as days of Sales Outstanding
Note: (1) FX: at the end of each period ; (2) debts arising from regularized fraud situations; (3) debts in judicial status for collection
(1)
Per type of Customer & Debt@ Sep’20
Bad Debt Bad Debt / LTM Sales
Customer Debt
(2)
(3)
+10%
+51%
ENERGY LOSSES
19I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
Real Recognized energy losses
Historical Evolution
Not Recognized Energy LossesGWh accumulated per period
What are we doing to mitigate them?
✓ MIDE Plan (Integrated Energy Meter Plan)
Minimizes bad debt and non-technical losses
8K
50K
93K
75K
✓ DIME Plan (Market Discipline)
▪ Multidisciplinary teams were created to work on new solutions to energy losses
▪ Analytical and artificial intelligence tools were used to enhance effectiveness in the routing of inspections
@ Sep ’20
R222.8%
R19.7%
R325.8%
▪ Over the last year, approximately 556,500 inspections of Tariff 1 meters were conducted with a 54% efficiency
40K
20
OUR PERFORMANCE
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
Quality of Service General Satisfaction
Highly Unlevered Valuation Comparison
We are above the standards set forth in the ITR | SAIDI
45% & SAIFI 33%
Since its peak in 2014 the duration and frequency of
interruptions have decreased by 60% and 47%,
respectively
CAPEX top priority
Customer satisfaction increased to 81.4% in 2020, a 12
points growth since 2016 despite tariff increases
Client satisfaction remains high among utility services in
Argentina
Claims to the regulator decreased by 63% since 2015
@ Sep 2020:
• Net cash position of USD 3 mm
• 2.0 leverage ratio
• 4.9 interest coverage ratio
• 17% dollarized cash position
USD 98 MM financial debt @Nov 2020
Low valuation compared to Latin American peers
• 2.4x EV/EBITDA
• 0.1x EV/RAB
QUALITY OF SERVICE
21I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
Requested quality standardsReal
SAIDI Path hrs │ year │ customer SAIFI Path times │ year │ customer
Initial point
Initial point
Best performanceBest performance
Note: SAIDI: System Average Interruption Duration Index; SAIFI: System Average Interruption Frequency Index
-60.3%-46.7%
Sep-20 Sep-20
69%
72%
74%
76%
81%
2016 2017 2018 2019 2020
GENERAL SATISFACTION
22
Customers Satisfaction Regarding EDN
12.4points
Improvement vs
2016
General Satisfaction Satisfaction per Tariff
Vs Other Utilities
Note: (1) For Edenor & Edesur a T1R customer was selected
(1)
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
Regarding
the service
Regarding
EDN
T1R 81.4% 80.4%
T2R 84.0% 83.0%
T1G 79.2% 78.2%
T2 83.5% 77.8%
T3 83.6% 82.6%
Compañía Servicio 2018 2019 2020
Metrogas gas 72.9% 79.8% 80.7%
Naturgy gas 71.5% 79.6% 84.0%
Edenor electricidad 73.3% 75.2% 80.4%
AySA agua 72.8% 73.8% 74.9%
Telecom teléfono 67.3% 67.9% 69.4%
Telefónica teléfono 65.6% 65.0% 65.4%
Edesur electricidad 41.6% 54.2% 45.1%
104120
199
210
272
183
249227
166
123
-
50,0
100,0
150,0
200,0
250,0
300,0
2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM Sep '20
Historical Evolution In USD MM (1)
CAPITAL EXPENDITURES
23
• Penalty for deviating from the annual investment plan (SAPIA) and the five-year RTI (SAQRTI) | Res. No 170/2018
• The ENRE controls our compliance with the Capex Plan, affecting the “E” stimulus factor
Note: 2011 – 2017 historical values and average FX, 2018 – LTM Sep’20 adjusted values and closing FX of each period
Lower demand registered during the last 4 years
Investment deployment slowdown due to Covid-19
No impact on the service equality levels
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
2013-2018 average: USD 223 MM
FINAL REMARKS
Amount | USD 113.4 MMMaturity | October 2022Rate | 9.75%
Senior Note 2022
25
A HIGHLY UNLEVERED COMPANY
I N V E S T O R P R E S E N T A T I O N | N O V E M B E R 2 0 2 0
…
ICBC Loan MaturedOn 2022 Bond repurchases were cancelled
October 2020
4.86Interest
Coverageratio
2.03Leverage
ratio(2) (2)
Debt Amortization
ICBC Loan Net DebtON 2022
Note: (1) Net of repurchases; (2) @ Sep20
(1)
Risk Ratings - 2022 Corporate Bonds
Rating Outlook Date
Local raCCC+ Negative Sep.2020
Global CCC- Negative Sep.2020
Local ($) A.ar Negative Sep.2020
Local (USD) A-.ar Negative
Global Caa3 Stable Sep.2020
Financial Debt in USD MM
Cash Dollarization@ Sep ‘20
USD17%
ARS83%
ON 2017