Companhia Energética de Minas Gerais - CEMIG (CMIG4) Investor Day 2024 summary

Strategic direction and transformation

• Executing the largest CapEx plan in company history: BRL 49.2 billion for 2024-2028, focused on regulated businesses and core operations in Minas Gerais, with two-thirds already contracted.

• Divested non-core and minority holdings, recovering over BRL 13 billion, enabling reinvestment in the network and regulated businesses.

• Major investments in distribution (BRL 33.2 billion), transmission (BRL 5.0 billion), generation (BRL 3.6 billion), natural gas (BRL 2.2 billion), distributed solar (BRL 3.6 billion), and innovation/IT (BRL 1.6 billion) for 2019-2028.

• Ongoing pursuit of privatization, supported by the controlling shareholder, to unlock further value and increase agility, though subject to state approval and regulatory processes.

• Strengthened focus on customer-centricity, operational efficiency, and modernization of governance.

Financial performance and capital allocation

• Market value increased from BRL 10.6 billion in August 2018 to over BRL 36 billion in 2024, with BRL 12.7 billion paid in dividends and significant share price appreciation.

• Consistent improvement in EBITDA and net profit since 2018, with recurring high dividend payouts, robust cash generation (BRL 7-8 billion annually), and EBITDA growth from BRL 1 billion in 2018 to BRL 3.5 billion in 2024.

• Net debt/EBITDA reduced from 3.24 in 2018 to 1.02 in 2023, with leverage expected to rise gradually to 2.5x by 2027 to support investment ramp-up.

• Maintained AA+ credit ratings and a robust debt profile, supporting ongoing investment plans.

• Strategic divestments (e.g., Aliança, Taesa) align with annual reviews and capital allocation priorities.

Distribution, network, and operational efficiency

• BRL 23 billion earmarked for distribution investments (2024-2028), targeting 615 substations, 577,000 km of network, and 1.8 million smart meters by 2028.

• Collection improvements yielded an additional R$3.24 billion over 2021-24, with digital channels now accounting for 69% of collections, saving R$25 million since 2021.

• Energy losses in distribution have remained below regulatory limits since 2021, generating a gain of R$1.17 billion.

• Outage indicators improved through automation, preventive maintenance, and workforce expansion, with rural and urban areas managed distinctly.

• Distributed generation connections are expanding, with 3.69 GW installed and plans for 7 GW more by 2027, supporting agribusiness and energy transition.