Corporate Presentation CPFL Energia
Upcoming SlideShare
Loading in...5
×
 

Corporate Presentation CPFL Energia

on

  • 143 views

 

Statistics

Views

Total Views
143
Views on SlideShare
114
Embed Views
29

Actions

Likes
0
Downloads
1
Comments
0

1 Embed 29

http://cpfl.riweb.com.br 29

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Corporate Presentation CPFL Energia Corporate Presentation CPFL Energia Presentation Transcript

  • São Paulo, 07 de março de 2012April 2014 Corporate Presentation
  • 2 Distribution 3 Generation Competitive Power Supply and Services4 1 Corporate Overview Agenda Consolidated financial figures5 2 6 The Electric Sector
  • 2 Distribution 3 Generation Competitive Power Supply and Services4 1 Corporate Overview Agenda Consolidated financial figures5 3 6 The Electric Sector
  • 4 in the Brazilian electricity sector • Market cap of , listed and on • 2013 Adj. EBITDA2 of and Adj. Net Income2 of • Differentiated : >50% of net income, semi- annually. since IPO in 2004 • Presence concentrated in the of Brazil through 8 subsidiaries private Generator with an equivalent stake of , more than in in Brazil and a of 1) On Mar 28, 2014; 2) IFRS (+) proportionate consolidation of minorities’ stakes at gencos (+) regulatory assets & liabilities (-) non-recurring items. Corporate overview – Highlights
  • 55 1) Termoparaíba and Termonordeste thermal power facilities; 2) CPFL Energia has a 58.8% indirect interest in CPFL Renováveis through CPFL Geração. Free Float DISTRIBUTION 100% 100% 100% 100% 100% 100% 100% 100% 65% 25.01% 48.72% 52.75% 51% GENERATION 100% 100% 99.95% 100% COMMERCIALIZATION 100% 100% RENEWABLES 59.93% Investco5.94% SERVICES 100% 100% 100% 58.8%2 100% 15.1% 30.5% Nect Serviços100% 1 Corporate structure 24.4% 30.0%
  • • Shares listed in differentiated segments: • BM&FBovespa Novo Mercado • NYSE (ADR Level III) • Compliant with the Sarbanes-Oxley Act • Board of Directors composed by 7 members: • 1 Independent Member • Advised by 3 Committees • Self-Assessment for Board of Directors and Fiscal Council • Enforcement of policies for disclosure of information and for prevention of insider trading by employees • Dividend Policy: • Minimum of 50% of net income, semi-annually World-Class Corporate Governance Practices 66 Corporate governance
  • HPP Foz do Chapecó HPP Barra Grande HPP Castro Alves HPP Monte Claro HPP 14 de Julho HPP Campos Novos HPP Luis Eduardo Magalhães CPFL Piratininga HPP Serra da Mesa1 CPFL Paulista RGE 19 SHPPs (CPFL Renováveis) 1 TPP (Carioba) CPFL Santa Cruz CPFL Jaguari CPFL Sul Paulista CPFL Leste Paulista CPFL Mococa SHPP Rio do Peixe (I/II) SHPP Macaco Branco 203620352032202820272015 … CPFL Energia requested Aneel to renew the expiring concessions ~3% CPFL Energia's EBITDA <1% CPFL Energia's installed capacity 7 CPFL Energia enjoys long term concessions 1) Furnas has the concession for HPP Serra da Mesa. CPFL has the contractual right of 51.54% of the plant’s assured energy, according to the 30- year leasing contract, maturing in 2028. Distribution Generation
  • 3rd Tariff Review Cycle CPFL Piratininga Oct-122 CPFL Santa Cruz Feb-132 CPFL Leste Paulista CPFL Jaguari CPFL Sul Paulista CPFL Mococa CPFL Paulista Apr-13 RGE Jun-13 8 CPFL Energia – 2013 Adj. EBITDA Breakdown¹ | R$ million CPFL Santa Cruz CPFL Leste Paulista CPFL Jaguari CPFL Sul Paulista CPFL Mococa 1) Adjusted by regulatory assets & liabilities and non-recurring items; does not consider the holding company; 2) 12 months retroactive effect; 3) Commercialization in the free market and Services 55% 16% 6% 23% 8 Alternative Energy 738 Conventional 1,271 CPFL Paulista RGE CPFL Piratininga Competitive Supply and Services3 74 Generation 2,008 CPFL Energia - Consolidated1 | 4,225 Distribution 2,211 63% 37% 51% 47% 2% Generation Segment Distribution Segment CPFL Energia | EBITDA breakdown
  • 9 Leadership among private companies in the electric sector, with a diversified portfolio in different businesses related to Energy 99 COMPETITIVE SUPPLY • Leadership in commercialization in the free market • Maximization of profitability, through a best-in-class set of solutions GENERATION • Operational Excellence, presenting the highest margins of the sector • Expansion of installed capacity in hydro and thermal with attractive returns • Leadership in renewable sources (> 4 GW by 2020) DISTRIBUTION • Market leader, doubling the market share in Brazil • Operational excellence through innovation and new technologies (smart grid) SERVICES • Largest services company in the power sector • Strong growth of sales CPFL Energia’s ambitions
  • 2 Distribution 3 Generation Competitive Power Supply and Services4 1 Corporate Overview Agenda Consolidated financial figures5 10 6 The Electric Sector
  • 2009 2010 2011 2012 2013 Distribution Segment • 7.4 million customers • 569 municipalities • Footprint: most developed regions • High potential in per capita consumption 1º Market share: 13% Industrial Commercial Residential Others 1) Excluding sales at CCEE; 2) Source: EPE.11 2009 2010 2011 2012 2013 TUSD CaptiveCAGR 2008-13 3.6% 26% 44% 16% 14%
  • Brazilian economy and market performance Real wage bill1 and CPFL’s residential consumption | %YoY growth 2006 2007 2008 2009 2010 2011 2012 2013 5.9 5.9 6.1 3.9 7.3 4.5 6.6 2.9 4.5 6.9 6.8 6.0 5.2 4.9 6.9 5.9 Real wage bill Residential consumption Retail sales2 and CPFL’s commercial consumption3 | %YoY growth 2006 2007 2008 2009 2010 2011 2012 2013 6.2 9.7 9.1 5.9 10.9 6.7 8.5 5.4 5.5 7.7 5.6 5.2 6.0 6.6 6.8 3.6 Retail sales Commercial consumption Industrial production2 and CPFL’s industrial consumption3 | %YoY growth 2006 2007 2008 2009 2010 2011 2012 2013 2.8 6.0 3.1 -7.4 10.5 0.4 -2.7 -3.0 3.3 6.1 2.9 -6.7 9.3 3.9 0.7 2.0 Industrial production Industrial consumption 1) Source: IBGE/LCA. 2) Source: IBGE. 3) Take into account changes in billing calendar for free consumers. Other variables influencing energy consumption • Population growth • Migration • Credit • Household appliances • Temperature • Rainfalls • Public investments 12
  • Southeast: CPFL Paulista, CPFL Piratininga, CPFL Santa Cruz, CPFL Leste Paulista, CPFL Jaguari, CPFL Sul Paulista, CPFL Mococa South: RGE Footprint in the most developed regions of Brazil 13 1313 Distribution business • 8 distribution companies; • 13% of market share; • 7.4 million customers; • 569 municipalities; • 2013 sales of 58,462 GWh | 04-13 CAGR of 5.4% Leadership in the distribution segment 2006 20071912 Discos’ Acquisitions | Key dates 1997-2001 Start Up 1 1 1) Acquired by VBC (one of CPFL Paulista’s controlling shareholder at the time) and PSEG in 1997, during the privatization process, and incorporated by CPFL Energia in 2001 (67,03%). In 2006, CPFL Energia acquired the additional stake (32.67%).
  • 4.2 4.6 4.7 4.7 5.3 5.4 5.7 5.8 6.0 6.4 6.6 7.0 7.9 8.1 8.4 8.9 8.9 9.0 9.1 10.9 11.8 13.0 4.5 5.3 5.7 5.8 7.5 8.1 8.3 8.4 9.4 9.8 9.9 10.8 14.5 14.6 14.7 16.5 16.9 18.2 19.3 19.4 20.0 21.6 14 Avg. Frequency of Power Outages per Consumer per Year – FEC 2013 (# occurrences) Avg. Length of Power Outages per Consumer per Year - DEC 2013 (hours) Distribution: best-in-class operational efficiency
  • Zero-Base Budget Inefficiencies from past budgets are not carried over to the next periods Tauron Program Introduction of the smart grid technology in the distribution network Corporate Services Center Implementation of a back- office services provider to increase operating productivity and efficiency Corporate Level • Optimization of inspections (loss prevention), process review, and improvement in assertiveness: reduction of ≈17% • Metering and delivery of bills - online billing (email), changes in layout/type of paper, alignment of bank fees for all Discos: reduction of ≈11% Operational Level Value Initiatives • Reduction of consulting services and “insourcing” of activities: reduction of ≈47% • Standardization of outsourced labor: reduction of ≈52% • Improved management of travel expenses: reduction of ≈18% • Consumption of paper and office supplies: reduction of ≈66% 15 Cost-cutting Initiatives Cost-cutting Initiatives Total (2015 x 2011): Cost-cutting already performed (2013 x 2011)1: ≈R$ 236 million 1) Constant value of Dec/13.
  • EBITDA acumulado até setembro: R$ 24 milhões16 • Automated dispatch + tablets deployed in ~35% of all teams (RGE and CPFL Piratininga) • 15,556 smart meters already installed as of Mar-14 (62%) – (Target: 25,000 large consumers) • Implementation of RF Mesh Telecom Network already concluded EBITDA 2013: R$ 52,4 million Achievements • Real-time consumption readings • Analysis of consumer load curve • Real-time fraud detection • Real-time power outage detection Optimized logistics for field teams (georeferenced maps) • Faster power restoration • Savings with optimized routes Tablets for real-time communication • Dynamic dispatch of teams • Automated routing of teams • On-line update of field services’ progress Projeto Tauron – smart grid
  • Distribution | Key financial figures Net revenues1 – Adjusted2 EBITDA – Adjusted2 Net income – Adjusted2 2010 2011 2012 2013 9,432 9,794 10,830 10,716 2010 2011 2012 2013 2,267 2,351 2,655 2,236 2010 2011 2012 2013 1,309 1,235 1,356 1,068 1) Excludes construction revenue; 2) Adjusted by non-recurring items and regulatory assets & liabilities. CAGR = +4.3% -1.0% CAGR = -0.5% -15.8% CAGR = -6.6% -21.2% Sales in the Captive Market (TWh) 2010 2011 2012 2013 39.3 39.9 40.7 41.1 +1.1%CAGR = +1.6% 17
  • 2 Distribution 3 Generation Competitive Power Supply and Services4 1 Corporate Overview Agenda Consolidated financial figures5 18 6 The Electric Sector
  • • Long Term Concessions • Brazil’s largest Portfolio in Alternative Energy • Renewable Sources: higher than 93% 2º Market share: 2.3% 34% Generation Segment 1) Considering 58.8% stake at CPFL Renováveis, since its creation. Installed Capacity1 (MW) | Estimated growth CAGR 2000-18e = 19% a.a. Semesa Baesa Enercan Ceran Foz Chapecó Epasa Baldin Creation of CPFL Renováveis 19 - 657 657 657 657 660 747 751 931 1,047 1,055 1,055 Greenfield Brownfield Privatization assets
  • 1998 2004 2005 2007 2007 2008 2008 2010 2010-11 1,275.0 130.0 690.0 880.0 902.5 130.0 100.0 855.0 341.6 671.0 59.0 380.6 377.9 526.6 64.0 50.0 432.0 247.6 51.54% 65.00% 25.01% 48.72% 6.93% 65.00% 65.00% 51.00% 52.75% 657.1 84.5 172.5 428.7 62.5 84.5 65.0 436.1 180.2 345.8 38.4 95.2 184.1 36.5 41.6 32.5 220.3 130.6 1.784 1.4 95.0 32.9 630 5.0 5.0 80.0 - 0.7 92.9 7.3 26.7 1.4 26.0 20.0 10.7 - 2028 2036 2036 2035 2032 2036 2036 2036 2042 Conventional generation | 2,234 MW1 of installed capacity CPFL Energia’s power plants – state-of-the-art environmental efficiency 20 1) Equivalent stake, including 38MW of small plants at CPFL Geração and 24MW of SHPP embedded in the distribution companies.
  • CPFL Renováveis | Corporate structure 21 58.8% 37.0% Free float 16.6% 100% 63.0% 24.6% 0.0% Small Hydro Biomass Wind Pre-IPO Post-IPO Solar
  • DESA is one of the main independent renewable energy companies in Brazil, with total contracted capacity of 331 MW CPFL Renováveis | Partnership with Dobrevê Energia 22 3 2 5 1 4 1) DESA holds 60% of SHPP Ludesa. 2) The PPAs are based on January 2014 (average values ​​when there is more than one PPA). 3) On December 31, 2013, DESA presented a consolidated net debt of R$ 656 million (preliminary value, subject to audit and, therefore, eventual changes) to be added after December 31, 2013 in approximately R$ 200 million. R$/MWh São Domingos (SC) Jul-07 30.0 MW 70.7% 202 Indiavaí (MT) Nov-10 19.4 MW 64.9% 201 Campina Grande (PR) Jun-11 23.0 MW 45.2% 136 João Câmara (RN) Jul-12 145.2 MW 45.5% 186 João Câmara (RN) Sep-13 60.0 MW 49.2% 150 João Câmara (RN) 1Q16 29.2 MW 51.8% 124 Unaí (MG) 2Q16 24.0 MW 52.1% 131 Portfolio of Projects in the Partnership (MW) Operation Construction Total CPFL Renováveis 1,416.8 383.5 1,800.3 DESA 277.6 53.2 330.8 CPFL Renováveis After-Partnership 1,694.4 436.7 2,131.1 SHPP Wind Hydro Wind Biomass Solar
  • CPFL Renováveis | Corporate structure after the joint venture 5.61% 5.49% 7.12% 2.97% 1.93% 1.47%58.84% 9.32% Market 7.24% 0.00% 4.90% 4.80% 6.22% 2.59% 1.68% 1.29%51.41% 8.14% Market 6.33% 12.63%(1) (ARROW) (ARROW) (2) (2) 1) Shareholders’ stake may suffer adjustments arising from the due diligence. 2) Through CPFL Geração. Pre-operation Post-operation 23
  • 24 2424 • Selective high quality project development • Wind projects certified by industry leaders • Backed by high quality equipment suppliers • Long term O&M contracts • Energy generation monitoring and optimization High Quality Development, Construction and Operation Complementarity of Sources Mitigating Risks Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Wind (Generation - MWavg) Reservoir Storage • Reservoir storage at high levels in the first semester while wind energy generation is concentrated in the second semester of the year CPFL Renováveis benefits from the complementarity of sources Wind Portfolio Attractive location due to high wind speeds SHPP Portfolio Exposure to abundant hydro resources Installed Capacity1 Total: 1,800 MW Solar 18% 61% 21% 0% SHPP Wind Biomass Solar Operating: Hydro Wind Biomass Under Construction: Hydro Wind SHPP Potential (Southeast and Midwest Regions) Wind Potential (Northeast and South Regions) Biomass Portfolio Proximity to sugarcane production centers Biomass Region MW NE 1,023 CW/SE 506 SO 271 ReservoirStorage(%) WindGenerationMW Diversified and high quality portfolio, delivering superior performance, mitigating risks, ensuring reliable load factors and providing capacity to grow with different sources CPFL Renováveis | High quality and diversified portfolio 1) To be fully operational by 2018
  • 25 Technology Has Shown Great Improvements in Recent Years | Recently developed technology for wind power plants allows greater load factors Europe United States Brazil (NE) Area 89% Area 95% Frequency Wind Speed (m/s) Frequency Wind Speed (m/s) Frequency Wind Speed (m/s) Ideal Wind Speed Ideal Wind Speed Area 99% Ideal Wind Speed 1.500kW 1.800kW 80m 3.000kW 100m 70m 750kW 50m 30m 300kW 75kW 17m 1980 - 1990 1990 - 1995 1995 - 2000 2000 - 2005 2000 - 2005 2010 0 20 40 60 80 100 120 140 160 180 Rotor Diameter (m) Rating (kW) Altura(m) 1.500kW 1.800kW 80m 3.000kW 100m 70m 750kW 50m 30m 300kW 75kW 17m 1980 - 1990 1990 - 1995 1995 - 2000 2000 - 2005 2000 - 2005 2010 0 20 40 60 80 100 120 140 160 180 Rotor Diameter (m) Rating (kW) Altura(m) BrazilEurope and EUA Improved availability Greater efficiency Reduced generation losses Wind Features in Brazil are the Most Adequate for Power Generation | The average wind in Brazil (Northeast) has a similar intensity with less variability CPFL Renováveis | Unparalleled wind conditions combined with top technology
  • 26 Operating (Mar-14) Under construction End of 2018 Under development Total Portfolio 100% with PPA 1,800 5,567 Possible Probable Highly Confident 3,767 Small Hydro • 35 operating: 327MW • Under construction: - • Under development: 626MW Total: 953MW Biomass • 8 operating: 370MW • Under construction: - • Under development: - Total: 370MW • 22 operating: 719MW • 15 under construction: 384MW • Under development: 3,141MW Total: 4,244MW Wind • 66 operating: 1,417MW1 • 15 under construction: 384MW • Under development: 3,767MW Total: 5,567MW1 Total 1) Including Tanquinho solar power plant – 1MWp of installed capacity 1,417 Wind SHPP – Small Hydro Biomass CPFL Renováveis | Installed capacity (MW)
  • (MW) (MWavg) CPFL Renováveis (Aug-11) 652 314 2Q12 25 8 Free market - 2Q12 70 24 Reserve auction (R$170.91/MWh) Revenue(e): R$ 20 million/year 2Q12 158 63 PROINFA (R$ 331.11/MWh) Acquisition price: R$ 1,062 million 3Q12 188 76 Reserve auction (R$ 184.71/MWh) Revenue(e): R$ 115 million/year 4Q12 40 11 Alt. sources auction (64%) and free market (36%) Acquisition price: R$ 111.5 million 4Q12 1 1 Free market - 4Q12 20 11 Alternative sources auction (R$176.71/MWh) Revenue(e): R$ 112 million/year 3Q13 50 18 Free market Revenue(e): R$ 22.6 million/year 4Q13 30 15 Reserve auction (R$ 151,21/MWh) Revenue(e): R$ 18.5 million/year 4Q13 50 18 Free market Revenue(e): R$ 22.6 million/year 1Q14 14 5 PROINFA (R$ 338.41/MWh) Acquisition price: R$ 103.4 million 1Q14 120 53 Alternative sources auction (R$154.81/MWh) Revenue(e): R$ 76.7 million/year Current portfolio (Mar-14) 1,417 617 1) Constant currency (Dec-13)27 CPFL Renováveis | Track record
  • 1) Macacos, Pedra Preta, Costa Branca and Juremas; 2) Campo dos Ventos I, III, V; 3) Ventos de São Benedito, Ventos de Santo Dimas, Santa Mônica, Santa Úrsula São Domingos and Ventos de São Martinho; 4) Pedra Cheirosa I and II; 5) Considering the start-up of the first farm in the complex; 6) Projects with energy sold to the free market in the long term, with contract for the supply of equipment and awaiting connection definition to start construction. 7) Constant currency (Dec/13). 28 (e) (MW) (MWavg) 2Q145 78.2 37.5 R$ 160.17 20 years Final stages of assembly (20 wind turbines and 14 towers assembled) 1H16 82.0 40.2 ACL 19 years Contract to supply wind turbines signed; executive projects in progress 2H16 172.0 89.0 ACL 19 years Contract to supply wind turbines signed; executive projects in progress 1Q18 51.3 26.1 A-5 2013 Negotiation of wind turbines supply in progress Commercial start-up 2013-2018(e) | 384 MW / 193 MWaverage Complexo Macacos I CPFL Renováveis | Power plants under construction
  • Conventional and Alternative Energy | Key financial figures Net Revenues (R$ million) - Adjusted1 EBITDA (R$ million) - Adjusted1 Net Income (R$ million) - Adjusted1 1) Adjusted by proportional consolidation and non-recurring items. 2010 2011 2012 2013 1,121 1,520 2,350 2,817 CAGR 2010-13 = +35.9% +19.9% 2010 2011 2012 2013 810 1,181 1,672 1,907 CAGR 2010-13 = +33.0% +14.0% 2010 2011 2012 2013 262 778 384 410 +6.7% EBITDA Margin - Adjusted1 2010 2011 2012 2013 29 CAGR 2010-13 = +16.1%
  • 2 Distribution 3 Generation Competitive Power Supply and Services4 1 Corporate Overview Agenda Consolidated financial figures5 30 6 The Electric Sector
  • Competitive power supply| Regulated vs. free market No choice - distribution company Free choice Distribution company Distribution company Regulated by ANEEL Free negotiation Free > 3,000 kW after July, 1995 any any before July, 1995 > 69 kV any < 69 kV incentivized Special 500-3,000 kW - Group A incentivized units totaling 500 kW - Group A incentivized 31 1) Source: EPE (full year 2013) Main differences Advantages Who can join  Lower prices  Free choice from energy supplier  Better predictability of energy expenses  Customization according to consumer seasonality 27% 73% Free Market1 Regulated Market
  • • 284 free consumers • Nationwide outreach • Value-added product portfolio • Synergy with CPFL Renováveis Number of Consumers (#) | CPFL Brasil 1º Market share: 9% 80 74 129 141 231 284 2008 2009 2010 2011 2012 2013 CAGR = 30% Portfolio (Free Consumers) 179 52 Inside the concession area Outside the concession area Current: 11.5 GW avg Potential: +7.1 GW avg Free Market in Brazil 210 74 Competitive power supply 32 • CPFL Brasil was the winner of Exame Magazine’s 2013 Best and Largest Companies (category Energy) • The Company was selected among gencos, discos, transcos and other players in the electric sector throughout Brazil 2010 | 2011 | 2013
  • 33 Dec/09 Dec/10 Dec/11 Dec/12 Dec/13 221 221 587 985 1,142 Dec/09 Dec/10 Dec/11 Dec/12 Dec/13 445 485 514 592 613 Current: 9.6 GWavg Potential: +2.1 GWavg Current: 1.9 GWavg Potential: +5.0 GWavg Competitive advantages of CPFL: market leadership, expertise and synergies with CPFL Renováveis Source: ANEEL and CCEE # of competitive customers – larger than 3 MW # of special customers – from 0.5 to 3 MW Number of free clients in Brazil CAGR=8.3% CAGR=50.8% Competitive power supply | Opportunities
  • Transmission networks Self-generation networks Distribution networks Recovery of equipment Services Segment | CPFL Serviços 34 • Foundation: 2006 • Core Business: offers a wide range of value-added services, ranging from engineering projects to maintenance and recovery of equipment. These services are designed to help consumers improve the efficiency, cost and reliability of their electric equipment • Type of services: construction of transmission and distribution networks; maintenance and recovery of equipment; self- generation networks (cogeneration, energy-efficiency projects and distributed generation arrays – solar energy)
  • Services Segment | CPFL Total and CPFL Atende 35 • CPFL Total offers collection services with an established authorized network; capacity to collect utility bills, such as water, energy, telephone, and cable TV. • Capability of cross-sale with other service providers, enabling the collection via energy bills. • Foundation: 2008 • Core Business: provider of contact center and customer relationship services to other utility companies • Services: face-to-face attendance, back- office, credit recovery, toll-free customer support, ombudsman, service desk and sales
  • Net revenues EBITDA Net income 2010 2011 2012 2013 1,909 1,699 2,031 2,031 2010 2011 2012 2013 303 278 287 74 2010 2011 2012 2013 201 164 127 52 Competitive power supply and Services | Financials1 1) Pro forma36
  • 2 Distribution 3 Generation Competitive Power Supply and Services4 1 Corporate Overview Agenda Consolidated financial figures5 37 6 The Electric Sector
  • 2009 2010 2011 2012 2013 10,566 10,962 11,476 13,487 14,009 CPFL Energia | Key financial figures – Sales 3838 1) Disregarding CCEE and intercompany sales. 2) 100% - IFRS criteria. 3) Incl. provision adjustments of 88 GWh in 9M12 and equivalent stakes at Foz do Chapecó, Baesa, Enercan and Epasa. 4) Take into account changes in billing calendar for permissionaires in RGE in 2Q12. 5) Adjusted by generation proportionate consolidation (IFRS 11), regulatory assets & liabilities, non-recurring items and ex-construction revenues. Net revenues (R$ million) – adjusted5 CAGR 2009-13 7.3% 3.9% 51,090 52,382 52,851 57,128 59,854 Total energy sales1 (GWh) CAGR 2009-13 4.0% 4.8% CPFL Renováveis2 Commercialization + Conventional generation3 Captive market4 20132012201120102009
  • 2009 2010 2011 2012 2013 2,762 3,320 3,770 4,605 4,225 2009 2010 2011 2012 2013 1,286 1,544 1,560 1,645 1,358 CPFL Energia | Key financial figures EBITDA and net income EBITDA (R$ million) | Adjusted1 Net Income (R$ million) | Adjusted1 1) Adjusted by generation proportionate consolidation (IFRS 11), regulatory assets & liabilities and non-recurring items39 26.1% 30.3% 32.9% 34.1% 30.2% 11.7% 14.6% 13.6% 12.5% 10.1% EBITDA EBITDA Margin Net Income Net Margin -8.3% -17.4% CAGR 2009-13 11.2% CAGR 2009-13 1.4%
  • 40 CPFL Energia | Key financial figures – Dividends 2S04 1H05 2H05 1H06 2H06 1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 140 401 498 612 722 842 719 602 606 572 655 774 486 748 758 640 456 363 568 3.7% 6.5% 9.1% 8.7% 9.6% 10.9% 9.7% 7.6% 7.3% 7.6% 7.9% 8.6% 6.9% 6.0% 7.1% 6.1% 4.6% 3.9% 4.8% 8.29 9.43 11.67 15.02 14.13 15.87 17.99 18.05 16.69 15.77 16.51 18.44 20.18 22.05 21.95 26.30 22.95 21.11 19.80 CPFL has presented payout ration close to 100% since its IPO, reaching the mark of R$ 11.2 billion distributed. Declaration of dividend for 2H13: R$ 568 million | 0.59/share Dividend Yield 1 (LTM) Declared dividends2 (R$ Mi) CPFL average price (R$/ORD)3 1) Considering last two half years’ dividend yield. 2) Refers to declared dividend. Payment in the next half year. 3) Considers share price adjusted for reversal stock split and simultaneous split of shares on June 29, 2011 (not adjusted per dividends).
  • 41 Capex(e) 2014-2018 1,553 1,239 1,235 1) Constant currency Dec/13. Take into account 100% interest on CPFL Renováveis and Ceran (IFRS) 2) Constant currency Dec/13. Considers the proportional stake in the generation projects 3) Conventional + Renewable 1,842 1,505 1,230 1,226 Total: R$ 7,739 million1 (IFRS) R$ 7,213 million2 (Pro-forma) Distribution: R$ 5,826 million Generation3: R$ 1,425 million (IFRS) R$ 899 million (Pro-forma) Commercialization and Services: R$ 488 million 2013 actual (cash flow) 2014 2015 2016 2017 2018 845 875 1,316 1,342 1,153 1,140 513 392 390 80 19 18 53 144 136 83 58 68 845 875 1,316 1,342 1,153 1,140 837 603 637 129 28 27 53 144 136 83 58 68 1,735 1,622 2,089 IFRSPro-forma 1,410 1,410
  • 42 CPFL Energia | Indebtedness and leverage 2012 1Q13 2Q13 3Q13 4Q13 12.6 12.5 12.6 12.2 12.2 Leverage1 | R$ billion Adjusted net debt1/ Adjusted EBITDA2 4,377 4,111 3,676 3,466 3,399 Adjusted EBITDA2 R$ million CDI Prefixed (PSI) IGP TJLP Gross debt breakdown3Gross debt cost3 | LTM 9.4% 7.9% 9.9% 7.3% 7.1% 4.9% 4.4% 4.3% 3.0% 2.4% 17.7% 13.9% 13.4% 12.1% 13.4% 9.4% 10.5% 11.1% 9.0% 8.4% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Nominal Real 1) Financial covenants criteria. 2) LTM recurring EBITDA (covenants criteria). 3) Financial debt (+) private pension fund (-) hedge (considering proportional consolidation). 2.89 3.03 3.42 3.53 3.59
  • 43 CPFL Energia | Strong and robust liquidity Cash Short term 2015 2016 2017 2018 2019 2020+ 4,206 1,549 3,304 2,060 2,206 2,926 1,645 2,923 Debt amortization schedule1,2 (Dec/13) | R$ million Cash coverage: 2.7x short-term amortization (12M) 1) Disregard financial charges (ST = R$ 288 million; LT = R$ 76 million), hedge (net positive effect of R$ 316 million) and MTM (R$ 44 million). 2) IFRS consolidation criteria. Average tenor: 4.01 years Short-term (12M): 11.0% of total
  • 2 Distribution 3 Generation Competitive Power Supply and Services4 1 Corporate Overview Agenda Consolidated financial figures5 44 6 The Electric Sector
  • Energy sector in Brazil: business segments Consumers 1) Source: ANEEL - March 31, 2014; 2) Source: EPE and CCEE 3) Source : ONS and Ministry of Mines and Energy (MME) – January 31, 2014 Free Market Captive Market 74.8 million consumers 1,755 Consumers 126 TWh of billed energy2 74.8 million Consumers 337 TWh of billed energy2 Transmission • 104 Companies³ • 117,637 km of transmission lines³ • Eletrobrás: ~55% of total assets Distribution • 63 Companies • 464 TWh of billed energy2 • Top 5: ~46% of the market Competitive Power Supply Generation • 128 GW of installed capacity1 • 78.7% Renewable energy1 • Eletrobrás: ~31% of total assets 45
  • Brazilian electricity matrix 1) Source: EPE - National Energy Balance 2013 and 10-year Energy Plan 2013-2022; 2) Others: considers coal, oil, diesel and process gas. Brazil’s electricity matrix is predominantly renewable, with hydro installed capacity totaling 69% of the total supply, while biomass, wind and SHPPs account for 14%. In the next years, it is expected that other sources will grow, mainly wind, reaching 10% of total installed capacity in 2022. Brazilian Electricity Matrix 129 GW 153 GW 183 GW 2013 2017 2022 Evolution of Installed Capacity (GW) 2013-20221 46
  • 2013 2014 2015 2016 2017 2018 Reserve Energy Auction - LER: Discos are not required to declare contracting needs and generation costs are covered through sector charges Discos must purchase electric energy to supply their captive market, five years in advance, in public auctions (Regulated Market – ACR) Discos Gencos Mechanics of regulated auctions A-5 Auction A-3 Auction A-1 Auction • New Energy: Initial supply 5 years after the auction • Term of contract: 15-30 years • Objective: Cover discos market growth and finance new generation • Energy contract limit: no limit • “Old” or Existing Energy: Initial supply in the following year • Term of contract: 1-15 years • Objective: Replace old contracts, maintaining the discos’ contracting level • Energy contract limit: 96% to 100% of the Replacement Amount (MR) • “New” Energy: Initial supply 3 years after the auction • Term of contract: 15-30 years • Objective: Adjust discos’ contracted energy levels • Energy contract limit: 2% of the load 47
  • 48 1) Potential: PDE 2022; Installed Capacity : BIG - ANEEL december, 2013 + A-5 Auction (2) Includes estimates of energy imported from Itaipu HPP, wich is not consumed by Paraguay Electric System 3) Considers the export of 2/3 of energy produced by the Company; Unrealized Potential to be Explored in Brazil Evolution of Brazilian Installed Capacity by Source | GWh Highly Fragmented Market | Renewables Market Share in Brazil based on contracted energy (26GW) Wind  Potential: 143GW  Installed capacity: 2.0GW 1% SHPP  Potential: 17.5GW  Installed capacity: 5.0GW 29% Biomass  Potential: 17.2GW¹  Installed capacity: 8.9GW 52% Potential Realized 83 117 10 13 9 16 14 36 Renewables Other Natural Gas Hydro 2022A2012E 4.4% p.a. 183 120 CAGR 2.3% 9.5% 3.5% 3.4% Renewables in Brazil are expected to grow at a CAGR of 9.5%, from 16 GW in 2012 to 36 GW in 2021 and still a highly fragmented market World’s most attractive alternative energy market Renova Energimp QGER Brookfield Cosan Eletrosul Gestamp Elecnor Other 8.2% 1.3% 6.9% 7.5% 3.6% 2.9% 2.5% 2.4% 2.0% 1,8% 1,6% 67,6% ² 3
  • Description Sustainability 49  Natural consequence of projects with lower environmental impact Environmental & Streamlined Implementation Process  Faster and simpler environmental process  Faster construction cycle  Annual auctions to match growth in energy consumption  Price of energy at the captive market structurally higher than at the free market given regulatory charges Access to Multiple Sales Channels  Regulated energy auctions and the free market  Long term inflation protected/linked PPA (average 20-30 years)  Special niche in the free market for “special client” (demand between 0.5-3.0MW)  Current special free market of 2.7% (1.6GW) to potential of 9.6% (5.8GW)  Not a sector specific benefit  BNDES has been providing support for the sector for many years Dedicated Sovereign Funding Conditions  BNDES Financing  Low Cost – average interest rate of 7.0%  Long-term funding of 16 years  Attractive capital structure  Policies in place since 1996  Not a direct government expenditure/tax break  Not applicable for regulated auctions Discounts on Transmission Charges  Discount of at least 50% (TUST and TUSD)  Tax regime for small enterprises (annual revenues below R$78 mm), which is not sector specific  REIDI is applicable for all infrastructure projects  ICMS/IPI1: discussions on expanding tax incentives to SHPPs Favorable Tax Regime and Fiscal Incentives  “Lucro Presumido” with reduction in the effective tax rate to 5% - 15% from 34%  REIDI (special program of incentives for infrastructure development) - exemption of PIS/COFINS,  Exemption of ICMS (movement tax) and IPI (production tax) Source: Company ; 1) Tax on revenues Stable and solid regulatory framework