AXIA Energia (AXIA6) investor relations material

Company profile and operations

• Holds 44 GW of installed generation capacity, representing 17% of Brazil’s total, with 99% hydro and 100% renewable sources.

• Operates 74,829 km of transmission lines, covering 36% of Brazil’s high-voltage network, with predictable, inflation-protected revenues and a regulated WACC of IPCA + 12.12%.

• Maintains a diversified portfolio with 81 power plants across 20+ states and 415 substations, focusing on long-term concessions and low-risk, regulated returns.

• Ongoing optimization of minority interests, with R$23.2 billion in value and a focus on divestments and consolidation for value creation.

• Recent corporate actions include streamlining structure, asset sales, and migration to Novo Mercado for enhanced governance.

Investment strategy and capital allocation

• Annual investments are resuming, with a new level of R$12–14 billion, focusing on transmission and generation expansion.

• Contracted transmission investments total approximately R$15 billion, with large-scale projects authorized by ANEEL.

• Capital allocation methodology approved in Dec 2024, with a five-year horizon, balancing shareholder returns, M&A, and growth.

• Target leverage ranges set by business segment: 3.0–3.5x for generation, 3.75–4.25x for transmission.

• Expanded leverage calculation includes financial debt, privatization obligations, and compulsory loans.

Energy market and portfolio

• Generation portfolio is diversified across submarkets, with 16,225 aMW of own resources and 1,252 aMW in purchases.

• Uncontracted energy expected to rise, reaching up to 57% by 2028, providing flexibility in energy sales.

• Contribution margin from generation remains strong, with robust performance in both ACL and MCP markets.

• Historical PLD volatility managed through portfolio diversification and hydrological risk hedging.

• Over 3,200 aMW hedged against hydrological risk through long-term contracts.