Cpfl energia ndrs citi_impres
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Cpfl energia ndrs citi_impres Cpfl energia ndrs citi_impres Presentation Transcript

  • Foz do Chapecó HPP Overview: dam | reservoir
  • Disclaimer This presentation may contain statements that represent expectations about future events or results according to Brazilian and international securities regulators. These statements are based on certain assumptions and analyses made by the Company pursuant t it experience and th economic environment, market conditions and expected f t C t to its i d the i i t k t diti d t d future events, many t of which are beyond the Companys control. Important factors that could lead to significant differences between actual results and expectations about future events or results include the Companys business strategy, Brazilian and international economic conditions, technology, financial strategy, developments in the utilities industry, hydrological conditions, financial market conditions uncertainty regarding the results of future operations plans objectives expectations and intentions conditions, operations, plans, objectives, intentions, among others. Considering these factors, the Companys actual results may differ materially from those indicated or implied in forward-looking statements about future events or results. The information and opinions contained herein should not be construed as a recommendation to potential investors and no investment decision should be based on the truthfulness, timeliness or completeness of such information or opinions. None of the advisors to the company or parties related to them or their representatives shall be liable for any losses that may result from the use or contents of this presentation. This material includes forward-looking statements subject to risks and uncertainties which are based on current forward looking uncertainties, expectations and projections about future events and trends that may affect the Companys business. These statements may include projections of economic growth, demand, energy supply, as well as information about its competitive position, the regulatory environment, potential growth opportunities and other matters. Many factors could adversely affect the est ates a d assu pt o s o estimates and assumptions on which these statements are based. c t ese state e ts a e based2
  • Agenda Corporate Overview Operational Efficiency Growth in the Generation Business Wide Portfolio of Services3
  • Corporate overview – Highlights The largest 2nd largest player in the electric sector in terms of private player Market Cap (R$ 20 billion in Dec, 2010) in the Brazilian R$ 3.2 billion EBITDA and R$ 1.6 billion Net Income1 Electric Sector Leadership in the distribution business through 8 distributors Energy market is concentrated in the distributors. most developed regions of Brazil Leadership in the commercialization business 2,396 MW generation installed capacity, 91% renewable sources. 4 biomass plants and 8 wind farms under construction Bovespa’s Novo Mercado and NYSE’s ADR Level III Differentiated Dividend Policy: minimum 50% of the net income semi-annually. Practices 95%4 1) LTM (Sep, 10)
  • Brazilian’s largest player in distribution and commercialization businesses CPFL Energia Market-share ALIZATION Distribution CPFL 13%1 Concession Area (captive + TUSD)COMMERCIA • 6.7 million customers Others: • 568 municipalities 87% • Sales of 51,589 GWh2 3 major Market leader players p y : 34% Generation CPFL 2%1 Focused mainly in renewables • 45 power plants operating Others: ON 2,396 2 396 MW installed capacity GENERATIO • 98% • 12 plants under construction 3 major 3rd private generator players: 28% Comercialization DISTRIBUTION N CPFL 16%4 Energy free market and Services • 98 free customers4 • Sales of 12,300 GWh2 Others: • Services: revenues of R$ 67 million³ $ 84% D Market leader 3 major players: 35% 5 1) Aneel – last available information 2) Set, 10 – LTM. Concession area sales (excludes CCEE) 3) LTM 4) 9M10
  • Best corporate governance practices Advanced Corporate Governance Practices: 1st Brazilian company • Shares listed on differentiated segments: • Bovespa Novo Mercado • ADR III - NYSE Annual Client Leadership Award IFC 2008 • Compliance with the Sarbanes-Oxley Act • Board of Directors made up of 7 members: • 1 Independent Member I d d tM b Member of the Companies • 3 Board Advisory Committees Circle – OCDE/IFC • Self-Assessment through Fiscal Council • General Shareholders Meeting Participation Manual • Securities Information Disclosure and Trading Manual Ranked on the 50 Largest Sustainable Latin • Dividend Payout Policy: American companies list (2008/2009) • Minimum dividends of 50% of net income, paid twice a year Ranked on Ibovespa’s Transparency in Sustainability list of companies (2nd place - 2009) • Succession Plan 1st Place CPFL Energia was the Energy Sector – The company with the highest Most Sustainable Large result among the sectors Companies in Latin p America studied (Energy, Mining t di d (E Mi i May, 2010 and Oil and Gas)6
  • Sales and Results – CPFL presents consistent growth Concession Area Sales (GWh)1 Breakdown | 9M10 Concession Area Sales (GWh) TUSD CAGR = 6.1% p.y. Captive Industrial 46% 49.033 48.799 7.8% 46.475 38.498 41.363 11.710 10.978 38.706 15% Commercial36.364 11.230 35.916 3.288 7.263 9.585 7.966 9.325 25% 14% 35.245 37.323 37.82133.076 31.778 31.235 27.950 29.381 Others Residential2004 2005 2006 2007 2008 2009 9M09 9M10 EBITDA (R$ million)2 Breakdown | 9M10 Reported EBITDA2 CAGR = 10.5% p.y. Generation 3.345 3 345 R$ 530 million 19.8% 2.789 2.808 2.765 22% 2.419 2.120 2.019 68% 1.681 10% Commercialization Distribution Di t ib ti R$ 244 million R$ 1,661 million 2004 2005 2006 2007 2008 2009 9M09 9M10 1) Excludes intercompany transactions (consolidation accounting basis), CCEE and generation sales (except to the free market). 2009 TUSD adjusted (97 CAT Resolution)7 2) 2007 and 2008 adjusted by the impact of Law 11,638 and PM 449/08
  • Comparative of global electricity consumption Electricity consumption | per capita/GDP1 14.000 12.000 000 United onsumption pe capita (KWh) ) States 10.000 Australia 8.000 Japain France er Taiwan T i Singapure Germany 6.000 South Korea UK Greece Spain Brasil Italy Hong Kong 4.000 Venezuela 2014 Portugal Chile Brasil Co Argentina 2.000 2010 China Mexico Peru GDP per 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 capita (US$) Brazil 2010 2014 2019 ∆ % Population (million)2 194.1 200.2 206.6 12.5 6 Electricity consumption (TWh) y p ( ) 415.9 506.8 633.0 217.1 52 Consumption per capita (MWh/year) 2.1 2.5 3.0 0.9 468 1) Source: U.S Energy Information Administration 2) Source: PDE 2019
  • Distribution of dividends in accordance with creation of shareholder value Declared dividends and Dividend Yield Dividend Yield2 (last 12 months) Declared dividends1 (R$ million) CPFL closing average price (R$/ON) 10,9% 9,1% 9,6% 9,7% 8,7% 7,9% 8,6% 7,6% 7,3% 7,6% 6,5% 842 774 3,7% 722 719 655 612 602 606 5 572 498 401 140 2H04 1H05 2H05 1H06 2H06 1H07 2H07 1H08 2H08 1H09 2H09 1H10 35,99 36,11 36,41 31,74 33,38 31,55 33,02 30,05 28,25 23,33 16,58 16 58 18,85 , Since its IPO (Sept 2004), CPFL has distributed R$ 7.1 billion 95% of the net income in dividends Dividend Yield: 86.8%9 1) Refer to declared dividend. Payment in the next half year. 2) Considering last two half-years’ Dividend Yield 3) IPO price per share: R$ 17.22
  • Capex – Investments in the distribution and generation business Investments by business segment (in R$ million) Acquisitions Stake Amount R$ Total 1997-2005: R$ 3,2 billion 1.316 2006 2008 2006-2008 acquired million 1.283 Total 2006 2009 R$ 4,4 billion T l 2006-2009: 4 4 billi 1.167 32,69% 414 1.121 362 11% 9 570 445 502 99,9% 203 793 100% 412 627 606 266 565 Total: R$ 1 billion 512 255 343 922 331 746 294 676 665 193 220 191 527 157 174 32 39 368 218 235 261 157 174 193 188 152 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010- 2014e avg Distribution Generation10
  • Estimated CAPEX of R$ 6 billion for the next 5 years Total Capex1 – R$ milllion Generation1 – R$ milllon 1.851 Generation Distribution 1.645 794 1.316 684 1.057 1.051 1 051 570 961 957 912 746 290 761 794 936 893 570 684 22 19 290 22 19 2009 2010(e) 2010( ) 2011(e) 2011( ) 2012(e) 2012( ) 2013(e) 2013( ) 2014(e) 2014( ) 2009 2010(e) 2010( ) 2011(e) 2011( ) 2012(e) 2012( ) 2013(e) 2013( ) 2014(e) 2014( ) actual actual Distribution – R$ million 2010-2014 Capex1: Expansion p Maintenance • 42%: Wind 1.057 961 936 • 12%: Foz do Chapecó HPP 893 746 761 • 11%: EPASA (Termonordeste e Termoparaíba TPPs) 586 512 516 497 • 27%: Biomass (Baldin, Bioformosa, Pedra, Buriti and Ipê) 370 445 • 8%: Others 376 470 448 420 396 316 2009 2010(e) 2011(e) 2012(e) 2013(e) 2014(e) 2010 - 2014 (e) Generation: R$ 1.8 billion actual 2010 - 2014 (e) Distribution: R$ 4.6 billion 88% of RAB11 1) Without Campo dos Ventos II (wind farm) Note: Constant currency – Dec,09
  • Debt Profile Adjusted Net Debt1 / EBITDA2 (R$ billion) Adjusted Net Debt Adjusted Net Debt / EBITDA 7,21 6,37 , 6,12 6,42 5,65 5 65 1.87: excluding Foz do Chapecó 2,30 2,28 HPP, EPASA e 2,10 2,13 Baldin TPPs’ 2,01 debts 2008 2009 1Q10 2Q10 3Q10 Real Cost (LTM) 7,1% 4,9% 3,8% 4,4% 5,0% Debt Breakdown CPFL’s Credit Rating TJLP 31% Fitch Rating CDI Rating AA+ (bra) 62% IGP 6% Standard & Rating br AA+ US$(Natural Hedge) Poor’s (escala nacional) 1%12 1) Excludes Judicial Deposits of R$ 474million; Includes hedging operations 2) LTM EBITDA
  • Capital market performance Shares performance1 – 2010 Shares performance1 – 2010 Daily average volume Bovespa NYSE CPL CPFE3 +33,9% +23,1% +25,7% 32,5 IEE DJ 26,4 +12,0% +10,9% 17,4 DJBr20 15,7 IBOV 3,9% +1,0% 11,6 15,9 9M09 9M10 NYSE Bovespa1Q10 2Q10 3Q10 4Q10 1Q10 2Q10 3Q10 4Q10 2010 Latin American Executive Team The Best Companies for Shareholders in 2010 Rank | Capital Aberto Magazine CPFL Energia – 3rd place Market Cap above R$ 15 billion • Best IR Team – Buy Side and Sell Side 24 companies evaluated • Best CEO – Buy Side and Sell Side • Best IRO – Sell Side 1) Closing price in December 30th, 2010 – adjusted per dividends (CPFE3: R$ 41,20/CPL: US$ 76.81)13 2) Excludes Bradespar’s blocktrade in May 19th, 2009 (R$ 531,2 million)
  • TSR Performance Total Shareholder Return1 - 2005-2010(e) [% a.a.2] 25% 21% 20% 19% 17% 17% 16% Average3 = 14 4% 3% AES Tietê Ti ê Copel C l Tractebel T b l Cemig C i Light Li h AES Edp Ed Eletrobras El b Eletropaulo Note: 2010 dividends estimates from a research report (Itaú) 1) TSR: shareholder TIR – market cap values in Dec, 04 and Dec, 10.14 2) Values updated by IGP-M 3) Source: Thomson Financial; Economática and Itaú Securities
  • Agenda Corporate Overview Operational Efficiency Growth in the Generation Business Wide Portfolio of Services15
  • 16 CPPFL CPFL 4,5 Moc coca 4,6 Mococa CP PFL CPFL Santa 5,1 Paulista 5,5 Cruz CPFFL CPFL 5,2 Piratini inga 5,7 Paulista FEC1 | 2010 DEC1 | 2010 Eletropa aulo CPFL 5,4 6,9 Piratininga Coe elce 5,6 Coelce 7,5 Elek ktro CPFL Leste 5,7 8,3 Paulista Li ight 5,8 Escelsa 9,0 Esc elsa CPFL Sul 6,3 9,2 Paulista CPFL Santa CPFL 6,5 z Cruz 9,2 Jaguari Ce emig 6,6 Elektro 9,5 Cos sern 7,0 Eletropaulo 10,6 Bandeira ante 7,1 Light Ce elpe 7,3 73 Copel CPFL Leste L 7,7 77 Paulis sta Bandeirante 11,3 11,5 12,2 CPFL Sul L 7,8 78 Paulista Cosern C CPFL 7,8 78 Jaguari Cemig Operational Efficiency – Distribution companies opel Co 9,5 Celesc 12,7 13,0 13,5 R RGE 9,7 RGE 14,7 AES Sul Celpe 17,1 Cel lesc , 10,1 10,2 AES Sul 17 1 18,0 Coe elba 11,2 Cemar Am mpla 12,7 CEEE 21,5 21,6 Cem mar 14,0 Ampla1) DEC-Duration of outages per consumer per year (in hours); FEC-Frequency of outages per consumer per year (number of outages). Excluding power outage effect in Nov, 09. 23,8 CE EEE 15,0 Coelba 26,6
  • Operational Efficiency – Distribution companies Electricity losses1 10,4 10,53 10,81 10,39 10,34 10,3 9,43 , 9,58 8,85 8,86 8,84 8,87 9,07 8,64 8,44 7,63 7,49 7,49 7,05 6,98 2007 2008 2009 2010 Defined by Aneel 10,10 10,61 4,76 10,2 9,83 9,48 9,2 8,28 8 28 8,77 8 77 9,13 9 13 8,64 8,28 7,74 7,76 7,05 4,94 4,84 4,31 4,03 4,2717 1) Technical and commercial losses
  • Operational Efficiency – Distribution companies Delinquency1 (%) | CPFL Energia 3T09 3T10 1,44 1,43Jan, Mar, May, Jul, Sep, Nov, Jan, Mar, May, Jul, Sep, Nov, Jan, Mar, May, Jul, Sep, 08 08 08 08 08 08 09 09 09 09 09 09 10 10 10 10 10 Program f R d ti P for Reduction of C f Commercial L i l Losses 2007 – 2010 2 million of consumer units (CU) inspected • 305 thousand CU identified and regularized • 211 thousand CU with fraud • 413 thousand measuring equipments replaced • 37 thousand regularization of illegal connections 18 1) Bills overdue more than 30 days - % of 12 months billings. In 2010 it doesn’t consider: CPFL Leste Paulista, Sul Paulista, Jaguari and Mococac
  • CPFL Energia Group’s Awards Abradee Best Electric Energy Distribution Economic-Financial Management: Company in Brazil: CPFL Paulista – 1999|2000|2008 CPFL Paulista–2000|2003|2006|2008|2009 Paulista 2000|2003|2006|2008|2009 CPFL Piratininga – 2004|2007 RGE – 2010 Management Quality: Best Electric Energy Distribution CPFL Paulista – 2005|2006|2008|2009 Company in the South Region CPFL Piratininga – 2010 RGE – 2003|2009|2010 Best Social Responsibility: Operational Management: CPFL Paulista – 2002|2003|2004|2005|2008 CPFL Paulista – 2001|2003|2005|2007|2008 RGE – 2009|2010 RGE – 2010 PNQ® – National Quality Award Awarded Awarded Finalist19
  • Agenda Corporate Overview Operational Efficiency Growth in the Generation Business Wide Portfolio of Services20
  • Generation – strong growth and energy matrix diversification Foz do Bioformosa 7 Wind Farms Chapecó Biomass Campos Novos 2036 Pedra Monte Claro 2035 Buriti Biomass 2036 Castro Alves ad Baldin Lajeado L j d Biomass 2036 Biomass 2032 Ipê 14 de Julho EPASA´s TPPs 1 Wind Farm CPFL BiomassCPFL Geração 2036 Jaguariúna SPP´s Barra Grande Diamante SPP SPP s SPP´s³ 2027 2036 2015 Serra da CPFL Sul2 Mesa1 2,769 2,805 2028 2,396 2,511 1,588 1,704 1,737 1,072812 854 915 1,252 1 252 , 1,362 , 1,387 1,220 1 220 800 862 864434 472 525 5712003 2004 2005 2006 2007 2008 2009 2010(e) 2010( ) 2011(e) 2011( ) 2012(e) 2012( ) 2013(e) 2013( ) Concession contract Installed Capacity (MW) Assured Energy (AverageMW) 1) Guarantee of 51.54% of the assured energy until 2028 2) Hydroelectric power projects with less than 1,000 Kw that are not considered concession by the grantor21 3) From 9 SPPs from CPFL Jaguariúna (today are in the Distribution), 6 are in the situation described in note 2
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  • Generation – Termonordeste TPP commercial startup in Dec, 2010 and Termoparaíba TPP in Jan, 2011 Epasa TPPs – CPFL Stake (51%) • Installed Capacity: 174.2 MW • Investment: R$ 310 million • Capital structure: ~35% equity / 65% debt • Location: Paraíba Start of Commercial Start-up: construction Termonordeste: Dec, 10 Oct, 09 Termoparaíba: Jan, 11 Annual fixed revenue around of R$ 85 million24
  • Expansion in generation: 4 biomass’ projects under construction Installed capacity of sugarcane-fired TPPs will reach 230MW until Jun 2012 Biomass projects already represent investments of about R$ 600 million Installed 60% of TPP Investment (e) Capacity Brazilian Baldin B ldi 45 MW R$ 104 million illi √ Bio P d Bi Pedra sugarcane Bio Buriti 50 MW R$ 135 million production is Bio Ipê 25 MW R$ 26 million located in the Bio Formosa 40 MW R$ 127 million R$ 597 countryside million Bio Pedra 70 MW R$ 205 million $ of São Paulo1 Total 230 MW R$ 597 million Bio Formosa R$ 362 million Commercial start-up Bio I ê Bi Ipê Investment Bio Buriti (accumulated) ~700 MW R$ 265 million 230 MW √ 160 MW Baldin 120 MW R$ 104 million 45 MW 5 Installed Capacity s a ed Capac y (accumulated) Sep Jun Sep Dec Mar Jun Sep Dec Mar Jun 2014 08 08 10 10 11 11 11 11 12 1225 1) Source: Única
  • Expansion in generation: 8 wind farms under construction, totaling 218 MW26
  • Brazilian generation – expansion Northeast • Wind potential North • Local thermal • High hydro- generation (LNG) eletric potential available • Nuclear • Thermal generation using Wind potential: 75 GW2 imported coal Potential used: 5% Hydro potential: 111 GW1 Potential used: 9% South Southeast/CO • Local thermal • Local thermal generation using generation domestic coal (biomass, pre-salt and LNG) p g • Developing Wind potential: 23 GW1 wind potential Biomass potential: Potential used: 3% 23 GW327 1) Source: MME 2) Source: EPE. Consider the energy contracted until 2013 3) Source: COGEN (expected by 2019)
  • Agenda Corporate Overview Operational Efficiency Growth in the Generation Business Wide Portfolio of Services28
  • Commercialization - New products and services Business units Gross Revenues – R$ Million 400-500 ~400% CPFL Value-added services Total 89 CPFL Atende 2009 2014(e) 2014( ) Added-value services – S dd d l i SVA • Construction of transmission lines • Construction of substations • Recovery of power and distribution transformers • Recovery of 15 KV equipment and tools • Generator rental and sales29
  • Foz do Chapecó HPP Overview: dam | reservoir