Auren Energia (AURE3) Investor Day 2025 summary

Sector outlook and market context

• The sector is undergoing a structural shift toward renewables, with increased intermittency and volatility driving the need for flexibility and portfolio diversification.

• Regulatory changes, including the end of subsidies and new laws like Bill 1300 and Law 15,097/2025, are reshaping incentives, capacity payments, and project economics for distributed generation, thermal, and renewables.

• Expansion of distributed generation is expected to slow as incentives phase out, with future growth depending on battery adoption and evolving consumer behavior.

• Only the self-production model remains viable for new generation projects, with market prices for viability ranging from R$173 to R$224/MWh.

• Long-term price levels are rising due to higher CapEx, inflation, and the need for hedges, making new projects more expensive and shifting focus to self-production and contract optimization.

Strategic initiatives, integration, and operational excellence

• Integration of AES assets is ahead of schedule, with 80% completed by July and full integration expected by year-end, including SAP migration and unified operations.

• Accelerated value capture from AES Brasil integration includes R$120 million/year in PMSO savings and R$300 million NPV from liability management.

• Wind asset turnaround and operational excellence initiatives have raised availability from 92% to above 94%, with targeted 95% by December 2025, and significant revenue gains.

• Recovery plans for underperforming assets have returned most turbines to operation, with performance improvements at Cajuína Wind Farm raising availability to 97%.

• Commercialization leverages multi-segment operations, risk mitigation, and client-focused solutions to drive value and profitability.

Financial outlook and capital structure

• Deleveraging is progressing as planned, with leverage reduced from 5.7x to 5x and a target of 3.0x–3.5x by 2027–2028, supported by liability management, EBITDA growth, and CapEx cycle completion.

• Liability management actions, including R$13 billion in new issuances since October 2024, generated BRL 300 million in NPV and extended debt maturities.

• 67% of net debt is indexed to IPCA, aligning with PPA contracts, and only 20% exposed to CDI, minimizing interest rate risk.

• Fiscal optimization is ongoing, aiming to consolidate hydro assets and eliminate holding-level debt to improve efficiency.

• Operational improvements and integration synergies are expected to support EBITDA growth and higher average sales prices from 2027.