CPFL Energia – Highlights



    • Brazilian’s largest player in distribution and commercialization
      businesses

    ...
CPFL Energia – Corporate Structure




                                                                                   ...
CPFL Energia’s Investment Case join the current portfolio growth with acquisition
                 opportunities



      ...
Consolidation with scale gains and operating efficiency

                                                                 ...
Consolidation with scale gains and operating efficiency

                                                                 ...
CPFL is constituting the company “CPFL Atende” with the purpose of creating
                 business opportunities for th...
Opportunities in distribution business: cooperatives and private network

                                                ...
Strong growth in the installed capacity and long term concessions in the generation
                       ventures

     ...
Continuous program of SPP’s repowering and increase of assured energy

                                                   ...
SPP’s: Greenfield Projects

                                                                                              ...
CPFL Total: Payment collection solutions and other services

                                                             ...
Value-Added Services expressive growth

                                                                                  ...
CPFL presents sales growth in the concession area and in the free market



      Concession Area Sales - GWh             ...
Conclusion of the 2nd Periodic Tariff Revision cycle for the Group’s distributors,
                       with CPFL Paulis...
Debt profile – 1Q08



     Adjusted Net Debt (R$ million)

                                                       (6,636)...
Debt profile – 1Q08



     Debt breakdown                                            Capital structure1                  ...
Summary




     Energy market overview



     CPFL Energia’s investments



     Dividends



     Capital market perfor...
Brazilian market has 64 distribution’s companies




•    Distribution Business:                                          ...
Brazilian market has 1,695 generation companies. The public sector
                    concentrates 70% of the assets




...
Participation of business segments in the CPFL Energia’s results



     1Q08 EBITDA Breakdown1                           ...
CPFL Energia supports investment politics aligned with the Group’s growth strategy



                                    ...
CPFL’s estimated Capex




                               CPFL Energia’s investment in the next 5 years: R$ 5 billion

   ...
Dividend distribution aligned with the shareholder’s value creation




                                              CPFL...
CPFL’s performance in capital market – 1Q08




 Share performance – Bovespa1                                             ...
CPFL’s performance in capital market and investors proximity



       Market Cap Evolution1 – R$ billion
                ...
Citi´s 1st Annual Brazil Equity Conference*
Citi´s 1st Annual Brazil Equity Conference*
Upcoming SlideShare
Loading in …5
×

Citi´s 1st Annual Brazil Equity Conference*

461 views
424 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
461
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
5
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Citi´s 1st Annual Brazil Equity Conference*

  1. 1. CPFL Energia – Highlights • Brazilian’s largest player in distribution and commercialization businesses • Energy market is concentrated in the most developed regions of Brazil (South/Southeast) • CPFL is listed in the Novo Mercado in Bovespa and ADR level III in NYSE • Differentiated Dividend Policy: payment of 50% of the net income on a semi-annual basis • 100% hydraulic generation portfolio, with a strong growth in the installed capacity in the last few years • Long term generation and distribution concessions • 5 distribution companies’ acquisition, 9 SPP’s and RGE’s stake (33%), Foz do Chapecó HPP’s stake (11%) and Lajeado HPP’s stake (7%) in the last 2 years, with a R$ 1.1 billion investment • First company in the Brazilian electric sector to negotiate carbon credits, through a run-of-stream HPP 2
  2. 2. CPFL Energia – Corporate Structure Free Float 28.6%1 31.1% 12.7% 27.6% 100% 100% 100% 99.99% 100% 100% COMMERCIALIZATION GENERATION DISTRIBUTION 100% 100% 99.95% 65% 100% 25.01% 48.72% 51% 96.56% 100% 100% 90.15% 90.15% 89.81% 87.80% 59.53% Paulista Lajeado 89.75% 3 (1) Including 0.2% from others Note: Position March 31st 2008
  3. 3. CPFL Energia’s Investment Case join the current portfolio growth with acquisition opportunities • Organic growth and leadership in market-share • Operational efficiency focus • Small distribution companies acquisition, strategically located Distribution • Large distribution companies acquisition • Cooperatives acquisition • Private networks incorporation • High EBITDA margin • Long term concessions • Projects’ conclusion Generation • SPP’s repowering, construction and acquisition • Energy cogeneration through biomass • Green field projects - Auctions • Leadership in market-share: 21.4% • Increasing in Value Added Services (VAS) and new products and services Commercialization • New opportunities - clients between 0.5 and 3.0 MW, supplied by cogeneration or SPP’s • Consistent results 4
  4. 4. Consolidation with scale gains and operating efficiency DISTRIBUTION 1Q07 1Q08 Delinquency1 (%) 1Q08 Delinquency Recovery2: R$ 73 million -0.5 p.p. 3.7 -0.3 p.p. -0.4 p.p. 3.2 -0.3 p.p. -0.1 p.p. -0.3 p.p. 0.0 p.p. 0.1 p.p. 1.8 0.2 p.p. 1.5 1.5 1.3 1.3 1.2 1.4 0.8 0.8 1.0 1.1 1.1 0.6 0.5 0.6 0.4 CPFL CPFL CPFL Leste CPFL CPFL CPFL CPFL RGE Consolidated Jaguari Sul Paulista Paulista Santa Cruz Piratininga Paulista Mococa Rebilling Index – to each 10 thousand billed accounts3 24.5 -82.4% Customers satisfaction and costs reduction -13.3% -18.2% -5.0% ABRADEE3 Average= 6.7 -14.3% 4.3 2.2 2.0 1.9 1.8 2.1 1.8 1.5 1.8 1.5 1.6 1.3 1.1 RGE CPFL CPFL CPFL CPFL Leste CPFL CPFL CPFL Consolidated4 Piratininga Paulista Santa Cruz Paulista Mococa Sul Paulista Jaguari (1) Bills overdue for more than 30 days - % of total billing (2) CPFL Paulista, CPFL Piratininga and RGE. Until Dec/08, all distributors will be covered 5 (3) Source: ABRADEE (Last available figures) – Simple average of the competitors distributors to 2006 ABRADEE prize (4) 1Q07 consolidated figures exclude CPFL Jaguariúna
  5. 5. Consolidation with scale gains and operating efficiency DISTRIBUTION 1Q07 1Q08 Brazilian Average1 DEC - Hours 16.3% 18.9 -6.6% 3.3% 16.0 15.8 -12.4% -19.9% -10.1% 0.4% 4.0% 30.7% 10.8 11.2 9.1 8.5 6.5 7.3 7.1 6.4 6.7 6.8 6.8 7.1 7.2 5.7 5.8 5.5 CPFL CPFL CPFL Leste CPFL CPFL CPFL CPFL Sul RGE Consolidated Santa Cruz Mococa Paulista Paulista Piratininga Jaguari Paulista FEC - Times -14.5% 10.4% -4.5% -23.7% 9.6% 11.8 -1.4% 12.0 -2.0% 5.7% 6.1% 10.1 9.0 9.3 8.2 7.8 7.8 8.4 6.9 7.1 6.7 6.5 6.9 6.8 5.6 5.9 5.6 5.9 CPFL CPFL CPFL Leste CPFL CPFL CPFL CPFL Sul RGE Consolidated Santa Cruz Mococa Paulista Paulista Piratininga Jaguari Paulista 6 Source: ANEEL – Last available figures (Feb/08)
  6. 6. CPFL is constituting the company “CPFL Atende” with the purpose of creating business opportunities for the Group and reducing call center costs DISTRIBUTION Operation in Dec/08 CPFL Atende Contact Center Campinas Main operating benefits • Virtual integration • VoiP phone solution – possibility of call transfer to the available site, permitting more rapid services Call “CPFL Atende” Caxias dispatch Ourinhos do Sul • Standardization of processes and working hours • 24/7 commercial and emergency services • Electronic Service 6.3 million clients served Expected results Opportunities • Cost reduction of R$ 1.8 million/year • Provide services to subsidiaries and third-parties • Possibility of negotiating tax benefits with • PIS/COFINS rate of 3.65% on provided services to the municipal authorities third-parties (call center company) • Developing the economy in CPFL Santa Cruz’s region 7
  7. 7. Opportunities in distribution business: cooperatives and private network DISTRIBUTION Cooperatives of Electrification Breakdown of Cooperatives by Region South 34% Northeast Southeast 33% 18% Mid-West North 14% 5 states with 1% larger number of cooperatives 125 cooperatives in Brazil: SP and RS States concentrate 26% of this market Private Network • Into CPFL’s concession area there are 35,000 Km of private network (equivalent to 17% of CPFL Energia’s total network) • Potential investment: R$ 400 million • Additional amount to the reference company 8 Source: Atlas de Energia Elétrica do Brasil – Aneel, 2005
  8. 8. Strong growth in the installed capacity and long term concessions in the generation ventures GENERATION Installed Capacity (MW) % 25.1 Assured Energy (MWmedium) 9.4% 2,174 % Concession Term 48.2 1,738 1,738 1,588 % 25.5 1,072 7.7% 812 854 915 40.2 % 862 862 1,082 800 434 472 525 571 2003 2004 2005 2006 20073 2008(e) 2009(e) 2010(e) SPP’s CPFL Geração Monte Claro Barra Grande Campos Novos Castro Alves Foz do Chapecó 2027 2036 2036 2035 2036 2036 Serra da Mesa1 CPFL Sul2 Lajeado 14 de Julho 2028 2032 2036 SPP’s CPFL Jaguariúna3 2015 (1) CPFL has the right of 51.54% of the Assured Energy until 2028 (2) Hydroelectric projects with installed capacity <= 1,000 kW are not eligible to concession 9 (3) Among the 9 SPP’s of CPFL Jaguariúna, 6 are in the situation mentioned in note 2
  9. 9. Continuous program of SPP’s repowering and increase of assured energy GENERATION Installed Capacity Assured Energy SPP (MW) (MWmedium) Before Current Before Current Dourados 6.40 10.80 5.80 7.76 Repowered Esmeril 1.76 5.04 1.00 2.88 Addition of Salto Grande 3.35 4.55 3.30 2.72 9.9 MWmedium São Joaquim 5.52 8.05 2.90 5.63 R$ 14 million/year Gavião Peixoto 4.10 4.80 2.20 3.82 Capão Preto 5.52 4.30 1.00 2.28 Chibarro 2.28 2.60 0.70 1.69 Total 28.93 40.14 16.90 26.78 39% 58% Installed Capacity Assured Energy SPP (MW) (MWmedium) Addition of Repowering Current Future Current Future 4.6 MWmedium Projects Andorinhas 0.51 2.40 0.46 1.50 R$ 6 million/year Guaporé 0.67 5.00 0.62 3.78 Três Saltos 0.64 1.35 0.60 0.99 Total 1.82 8.75 1.68 6.27 ANEEL approval/ 2008/ Construction beginning 2009 381% 273% 10
  10. 10. SPP’s: Greenfield Projects GENERATION Partnership to studies and implementation of SPP’s Feasible in the medium and long term 70 analysed projects and enrollment in ANEEL for 10 projects Capacity: 6 75.6 MW 60 4 Estimated discarded investment: • Low Internal Rate of Return • PPA’s already signed with unattractive prices projects R$ 285 million • Impracticable environmental requirements Feasible in the short term Basic projects and Technical ANEEL and Installation environmental Feasible Projects in the short studies and studies environmental License and term (up to 30 months) enrollment agencies’ construction of (necessary for in ANEEL approval the SPP’s the previous license) OK 2008 2008/2009 24 months 11
  11. 11. CPFL Total: Payment collection solutions and other services COMMERCIALIZATION Points of Service 104% 1Q07 417 850 1Q08 Expectation of 1,815 points up to 2009 Main services: • Payments and Services’ Network Transaction – ‘000 units • Collection of electricity bills, telephone bills, water bills, 1,668 100% credit card bills and others • Mobile phone recharge 836 • Customer’s Services • Requests for: bill copies, debt consultations and reconnection electricity 1Q07 1Q08 • Possible offering of services for other utilities Gross Revenue – ‘000 units • Services in Bills 116% 1,417 • Other collections through the electricity bills: newspaper, magazines, home insurance, etc. 656 1Q07 1Q08 12
  12. 12. Value-Added Services expressive growth COMMERCIALIZATION Transmission Distribution Self production Fixed Asset Management System System projects Highlight: 3 projects 23 projects 2 contracts R$ 3 million long term agreement delivered in 1Q08 in 1Q08 in 1Q08 with a big client Opportunities: • Sales of other services to the client • 128 MVA R$ 1 million R$ 4 million • Extension to the other plants • 13.3 km LT • “Knowledge Partnership” and R$ 7 million “Learning Curve” 14 projects under Negotiation of CPFL - Jan to Apr/08: construction • 60 contracts • 595 MVA • 48 clients • 130.5 km LT • Gross revenue: R$ 4 million R$ 46 million 28 Gross Revenue – R$ Million 25 19 21 17 425% 4 2004 2005 2006 2007 1Q07 1Q08 13
  13. 13. CPFL presents sales growth in the concession area and in the free market Concession Area Sales - GWh Free Market Sales (GWh) 27.8% TUSD 46,475 178.9% CAPTIVE 38,498 41,363 36,364 11,230 3,288 7,263 9,585 9,334 8,951 7,120 33,076 31,235 31,778 35,245 12,050 3,209 2,882 2,085 9,168 2004 2005 2006 2007 1Q08 2004 2005 2006 2007 1Q08 Concession Area Sales – GWh – 1Q08 6.3% 8.1% Sul2 4.8%1 5.9% 4.4% Brasil2 4.3% Sudeste2 3.9% Note: excludes intercompany transactions (consolidation accounting basis), CCEE and generation sales (except to the free market) 14 1) CPFL Jaguariúna 2) Source: EPE (1Q08)
  14. 14. Conclusion of the 2nd Periodic Tariff Revision cycle for the Group’s distributors, with CPFL Paulista and RGE’s indexes released in April 1st Cycle 20031 2nd Cycle 2007/08 CPFL Paulista, CPFL Paulista, Acquisitions (CPFL CPFL Piratininga CPFL Piratininga Santa Cruz and Total and RGE and RGE CPFL Jaguariúna) Gross RAB 8,173 9,897 21% 528 10,425 28% Reintegration Quote 371 430 16% 23 454 22% Net RAB 3,857 4,547 18% 284 4,832 25% Parcel B1 1,823 2,206 21% 173 2,378 30% Reference Company 783 1,028 31% 104 1,132 45% R$ million 15 Note: Nominal values (1) Values for the 1st and 2nd cycle using the same methodology: 2nd cycle – exclude PIS/COFINS and R&D charges (2) With financial components
  15. 15. Debt profile – 1Q08 Adjusted Net Debt (R$ million) (6,636) (5,969) (667) (5,117) 1,147 372 1Q08 Financial Private Pension Cash & Cash Regulatory Asset 1Q08 Adjusted Debt1 Fund Equivalents Net Debt Adjusted Net Debt / EBITDA2 (R$ billion) 6.28 5.09 5.12 4.39 4.42 3.78 3.70 4.92 2.85 2.25 1.74 1.64 1.57 1.53 2002 2003 2004 2005 2006 2007 1Q08 Adjusted Net Debt Net Debt / EBITDA 16 (1) Includes derivatives and excludes judicial deposit of R$ 382 million (2) Last twelve months EBITDA
  16. 16. Debt profile – 1Q08 Debt breakdown Capital structure1 Debt profile improvement TJLP 29% Extension of CPFL Geração CDI and RGE’s debt 52% Offering total value: R$ 787 million IGP Equity Debt 16% 49% 51% Term: 3 years Dollar 3% Cost: ~105% of the CDI Nominal cost of debt evolution 26.9% 19.8% 17.7% 13.9% 13.4% 12.3% 12.1% 2002 2003 2004 2005 2006 2007 1Q08 17 (1) Adjusted Net Debt + Shareholders’ equity
  17. 17. Summary Energy market overview CPFL Energia’s investments Dividends Capital market performance 18
  18. 18. Brazilian market has 64 distribution’s companies • Distribution Business: 2007 Market ShareMarket Share1 % Distribution 1 (%) Distributors (#) 64 CELESC 4.0% Clients (million) 61 COPEL 6.8% EdB 5.7% Ashmore Energy Neoenergia 3.7% 7.4% Distributed Energy (TWh) 376.9 Energisa 3.5% CEMIG Companhia Energética 8.6% Others 34.8% Market Breakdown Brasiliana Energia 12.1% • The 5 largest groups have 50% of market-share CPFL Energia 13.3% • State-owned companies: 34% • Private Company: 66% Spreading proposes consolidation opportunities 1) ANEEL – Ref. 2Q07 (Recalculation of CPFL’s participation) 19
  19. 19. Brazilian market has 1,695 generation companies. The public sector concentrates 70% of the assets • Generation Business: 1Q08 Market Share (%) Generation Companies (#) 1,695 Installed Capacity (MW) 108,852 Others 35% CPFL Energia 2% Chesf 10% Duke 2% AES Tietê 3% Furnas 9% Market Breakdown Copel 4% Tractebel 6% Eletronorte 9% Cemig 6% • The 5 largest groups have 50% of the market CESP 7% Itaipu 7% • State-owned companies: 70% • Private Company: 30% Source: Aneel 20 Market breakdown: Acende Brasil
  20. 20. Participation of business segments in the CPFL Energia’s results 1Q08 EBITDA Breakdown1 1Q08 Net Income Breakdown1 G G 18% 12% C C 16% D D 12% 70% 72% Margin Evolution1 36.7% Excluding EBITDA Margin 32.8% non-recurring effects, EBITDA margins exceeded Net Margin 30% 17.7% 15.8% 1Q07 1Q08 21 Note: % breakdown not consider eliminations among companies in the Group (1) 1Q07 and 1Q08 results without non-recurring effects
  21. 21. CPFL Energia supports investment politics aligned with the Group’s growth strategy Actual Investment (R$ million) 1,425 1,551 418 627 606 633 1,133 606 627 797 2004 2005 2006 2007 Capex Total(1) Acquisitions(2) May, 2006 Aug, 2006 Oct, 2006 Apr, 2007 Asset Acquired 32.69% 11% 99.9% 100% Stake Investment – Equity 414 9 203 412 (R$ million) 22 (1) Considers minority shareholder participation’s acquisitions (2) Considers CERFRA Cooperative assets acquisition Note: Hedge not included
  22. 22. CPFL’s estimated Capex CPFL Energia’s investment in the next 5 years: R$ 5 billion Total Capex (R$ million) 1,196 1,124 890 837 789 677 828 782 815 783 519 296 108 22 6 2008E 2009E 2010E 2011E 2012E Generation Distribution Distribution - R$ million 362 Generation - R$ million 570 546 515 512 391 225 285 258 267 269 271 157 71 81 27 17 5 6 0,3 2008E 2009E 2010E 2011E 2012E 2008E 2009E 2010E 2011E 2012E Expansion Maintenance Debt Equity 23
  23. 23. Dividend distribution aligned with the shareholder’s value creation CPFL distributes 95% of net income in dividends: R$ 1,561 million in 2007 – R$ 3,25 per share Declared dividend1 (R$ million) vs. CPFE3 (R$/share) Declared dividend 35.99 Average price – R$/share 31.74 30.05 28.25 23.33 18.85 16.58 842 722 719 612 498 401 140 2H04 1H05 2H05 1H06 2H06 1H07 2H07 Annualized Dividend yield2 3.7% 6.5% 9.1% 8.7% 9.6% 10.9% 9.7% Since the IPO (2H04), CPFL Energia’s dividend yield has already reached 49.7%3 24 (1) Declared dividend: payment in the next half year (2) Considering last two half year’s dividend yield (3) IPO’s price per share: R$ 17.22
  24. 24. CPFL’s performance in capital market – 1Q08 Share performance – Bovespa1 Share performance – Nyse1 9.1% 12.0% IBOVESPA IEE Dow Jones DJ Br 20 CPFE3 CPL -2.6% -4.7% -4.6% -7.6% CPFL’s performance vs. main indexes Daily Average Volume – R$ thousand 5% +9.1% CPFE3 32,561 34,119 14,960 -7.0% IBrX50 19,755 -10.1% IGC 17,270 -10.5% ISE -13.4% ITAG 9,141 19,158 12,807 8,128 JAN FEB MAR 2006 2007 1Q08 NYSE BOVESPA 25 (1) Closing price adjusted for dividends – until Mar 31, 2008 (ON = R$ 35.31 and ADR = US$ 60.98)
  25. 25. CPFL’s performance in capital market and investors proximity Market Cap Evolution1 – R$ billion 20.1 R$ billion 158% 1 year with CPFL Energia composing 12.1 USD billion the portfolio 7.8 347% 2.7 2004 2005 2006 2007 1Q08 May 5th,2008 Commitment with the investor – 1Q08: • 4 APIMEC meetings (SP, RJ, RS and BA) • 1 Expomoney – Curitiba • 4 conferences – 3 national and 1 international • 1 Non-Deal Roadshow at Europe • 25 sell side institutions coverage 42 one-on-one meetings 26 (1) Closing price not adjusted for dividends - (Each period last day closing price)

×