Eduardo Capelastegui, CEO of Neoenergia

To better understand how Neoenergia's financial results are directly reflected in the lives of clients, learn more about the vision of the CEO, Eduardo Capelastegui, who has been at the head of the company since mid-2022 and with extensive experience in the company.

A married father of two, Eduardo has been working in the energy sector since his arrival at Iberdrola in 1998. In 2016, he migrated to Neoenergia where he performed various functions. Before assuming the presidency, he was the executive director of asset control and planning.

In this interview, Capelastegui shares insights on how performance and assertive investments translate into direct benefits for clients. Eduardo also addresses the focus on improving service reliability and Neoenergia's commitment to efficient management. In addition, it highlights the company's role in the sector.

Below are the main points of this chat.

Eduardo, the company recently released its financial results for the second quarter. How do they impact the daily lives of Neoenergia customers?

Energy is in literally everything we do. Imagine a family getting ready for another day. The father relies on the cell phone alarm to wake up early to take his children to school, the mother depends on the loaded laptop to send an urgent e-mail, and the teenage children use a blender to prepare a vitamin before going to school. The most usual impossible situation. But it gives us the real dimension that energy is present in every moment of our routines. As a company in the sector, our mission is to ensure that energy is supplied reliably and efficiently.

The financial results reflect how we have worked and committed ourselves to delivering the best for our nearly 17 million clients and are in line with our business strategy, reinforcing our financial discipline, with investment responsibility and control of operating expenses. We remain anchored in a structured model to ensure the sustainable growth of the five distributors, focusing on the quality of services and service to our customers.

Can you exemplify the investments we make that benefit the client?

It is well known how our efforts and investments contribute to the perception of each family in their homes and in their daily lives, carrying out daily activities. With constant investments in infrastructure, Neoenergia has guaranteed the quality and reliability of the energy supply. By modernizing our distribution networks and inaugurating new substations, we offer services that are more efficient and less susceptible to failures, seeking a model with even more automation and intelligence for the electrical grid. An interruption, which previously could last two or three hours, today can be changed to a few seconds, for example.

This is the type of investment that generates value for the business, for society and serves various stakeholders, in addition to allowing us to continue to improve, year after year, the quality of supply. The integration of artificial intelligence systems for fault prediction is one of the innovations that have contributed to this advance, allowing for faster and more effective preventive and corrective actions.

This constant improvement is reflected in the significant reduction in power interruptions, measured by the DEC (Equivalent Interruption Duration per Consumer Unit) and FEC (Equivalent Interruption Frequency per Consumer Unit) indices. In the second quarter of this year, we achieved a reduction of 12% in the DEC and 10% in the FEC.

Specifically about the quarter's results, what would you like to highlight?

Our financial performance deserves to be evidenced. Caixa's EBITDA grew 92% since the IPO in 2019, exceeding R$ 2.4 billion in the second quarter of this year. Consistent results allow us to continuously invest in distribution networks, as well as to implement new solutions. Consequently, the progress has resulted in a safer, more stable and accessible supply for the nearly 40 million Brazilians who receive the energy distributed by the company.

In addition, we maintained investments in the execution of the ESG+F strategy, which revolves around the three pillars: Environmental, Social and Governance, added to financial strength, and which reinforce the company's strategy and business model.

Among this work, the company maintained its investments in Diversity and Inclusion, seeking more opportunities for women in leadership positions and jobs. We were the company that created the first School of Electricians exclusively for women in Brazil, where about a thousand professionals have already been trained. The initiative is recognized as a global example of one of the Women's Empowerment Principles by WeEmpower, a UN Women program, together with the International Labor Organization (ILO) and the European Union, to encourage good business practices.

We also encourage women's sports in Brazil: we are the first company to exclusively sponsor women's soccer and we support athletes in various sports. These are many achievements that consolidate Neoenergia's participation in what today, we can say, as one of the protagonists of the Brazilian electricity sector.
What is the role of Neoenergia in the electricity distribution sector in Brazil?

Electricity distribution is certainly the backbone that supports the operation of industries, businesses, health institutions, and homes, encompassing transmission lines, substations, transformers, and measurement systems. It is through this network that the energy generated in the power plants reaches the end customers. Neoenergia remains dedicated to improving every aspect of this vital process and positions itself as an essential player in the sector.

At Neoenergia, we invest more and more in the digitization of service channels and in the improvement of physical stores, always creating options so that our customers have the best possible experience. We understand that all points of contact are relevant and we prioritize the agility and resolution of demands, always within various initiatives available to customers, including bill payment via Pix and delivery of invoices via WhatsApp, bringing ease, convenience and innovation to service.

What are Neoenergia's plans for the near future?

I would say that 2024 has been and will still be a year marked by major deliveries in several of our businesses, especially in broadcasting, with the completion of important projects. These efforts are crucial to strengthening the resilience and reliability of our system.
With efficient management and a clear focus on deleveraging, we are ready for future challenges and reaffirm our commitment to quality and return to our shareholders. We recently announced major investments in our energy distributors for the coming years. In Bahia, we will invest R$ 13.3 billion in projects to expand and reinforce the electrical system by 2027, in all regions of the state. The increase in this investment is 40% compared to the previous quadrennium. In 2024 alone, R$ 3 billion will be invested to contribute and promote social and economic development, bringing even more energy to Bahians and to the most varied economic sectors that make up the strength and diversity of the largest state in the Northeast: agribusiness, industry, commerce, mining, services and tourism.
In Pernambuco, the next five years will see record investments of R$ 5.1 billion. All aimed primarily at improving the state's electrical infrastructure, through the construction of substations, new high-voltage lines, new interconnection networks, and automatic distribution. We provide an essential service to society and the supply of quality energy is an indispensable input. By projecting record investments for the next five years, we renewed our commitment to continuously and reliably distribute energy to the people of Pernambuco, contributing even more to the state's social and economic development.

In Rio Grande do Norte, the announced investments amounted to R$ 2.1 billion in works on the Potiguar electrical system between 2024 and 2027, an investment that consolidates Neoenergia Cosern as the best distributor in Brazil. The company has become a reference in the Brazilian electricity sector and maintaining the level of excellence achieved over the years requires an efficient investment strategy and operational management. Work and continuous investment reaffirm our commitment to the state and to the Potiguar population.

We also announced investments in the Federal District, equivalent to R$ 1.4 billion, focused on expansion, modernization, and infrastructure of the state's electricity grid over the next five years. We are committed to making Neoenergia Brasília one of the best companies in the country and our work is reflected quarter by quarter, when we present the evolution of the distributor since we took over the operation.