Neoenergia (NEOE3) Investor presentation summary

Business overview

• Operates across distribution, transmission, generation, and commercial energy segments, with presence in 18 states and the Federal District, serving over 37 million people and managing a net RAB of R$44 billion as of December 2025.

• Distribution covers 845,000 km² with five main Discos, and generation portfolio includes hydro, wind, solar, and thermal assets totaling over 4 GW installed capacity and a 5.5 GW renewables pipeline.

• Transmission network comprises 18 assets and over 8,000 km of lines, with R$2 billion RAP and R$19.4 billion in regulatory assets by 2025.

• Commercial segment supplied over 5 TWh to end customers in 2025, focusing on free market migration and green solutions.

• 100% owned by Iberdrola, a global leader in renewables and smart grids.

Financial performance

• Cash gross margin grew at an 11% CAGR (2017–2025), reaching R$16.1 billion in 2025.

• EBITDA increased by 290% since 2017, with a 19% CAGR, totaling R$14.3 billion in 2025.

• Net income rose by 851% (33% CAGR), reaching R$5.0 billion in 2025.

• 2025 CAPEX was R$10.1 billion, with 97% allocated to networks and 3% to generation and customers.

• Maintains a comfortable capital structure, with net debt/EBITDA at 3.41x and average debt cost of 11.9% p.a.

Regulatory and operational highlights

• Distribution concessions run for 30 years, with possible renewal and periodic tariff reviews every 4–5 years.

• Tariff structure allows full pass-through of non-manageable costs and incentivizes efficiency in manageable costs.

• Real regulatory WACC post-tax for 2026 is 8.12%.

• Transmission assets operate under 30-year concessions, with RAP set at auction and inflation adjustments.

• Wind, solar, and hydro generation assets operate under long-term PPAs or free market contracts, with average PPA terms for wind at 2037 and hydro at 2040.