Morgan Stanley - 12th Annual London-based Latin American Conference (14 a 15-09-2009)'
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Morgan Stanley - 12th Annual London-based Latin American Conference (14 a 15-09-2009)' Presentation Transcript

  • 1. Summary Energy market overview CPFL Energia – Highlights and Results 2
  • 2. Brazilian market has 64 distribution’s companies Market Share1 (%) Distribution Business – 2008 CPFL Energia 13% Distributors (#) 64 Brasiliana Energia 12% Clients (million) 63 Cemig 8% Neoenergia 8% Distributed Energy (TWh) 393 Copel 7% Market Breakdown Celesc 5% Energias do Brasil 5% • The 5 largest groups have 48% of market-share Rede Energia 4% • State-owned companies: 34% 4% Ashmore Energy • Private Company: 66% Others 34% Spreading proposes consolidation opportunities 3 1) ANEEL – Ref. 1H08
  • 3. Brazilian market has 1,994 power plants. The public sector concentrates 70% of the assets Market Share1 (%) Generation Business – 2008 Chesf 10% Furnas 9% Hydroelectric plants (#) 1,994 Eletronorte 9% Cesp 7% Installed Capacity (MW) 111,540 Itaipu 7% Cemig 7% Tractebel 6% Market Breakdown Petrobras 5% Copel 4% • The 6 largest groups have 50% of the market AES Tietê 3% Duke 2% • State-owned companies: 70% CPFL Energia 2% • Private Company: 30% Others 29% 4th largest private generation company in Brazil 4 1) ANEEL – Ref. 1H08
  • 4. Summary Energy market overview CPFL Energia – Highlights and Results 5
  • 5. 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 Bovespa’s Novo Mercado and NYSE’s ADR level III • 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 • Constitution of CPFL Bioenergia, for investments in energy generation from biomass 6
  • 6. Corporate Structure 25.7%1 31.1% 12.7% 30.5% COMMERCIALIZATION and VAS GENERATION DISTRIBUTION 100% 100% 100% 100% 100% 100% 100% 65% 99.95% 25.01% 99.99% 100% 48.72% 96.56% 100% 51% 90.15% 89.81% 100% 100% 87.80% 90.15% 89.75% 59.93% 5.91% 7 1) Inclui participação da Camargo Correa S.A.
  • 7. The solidity achieved by CPFL reflects its operational efficiency and the quality of the markets in which operates Distribution1 – 1H09 Distribution Companies (#) 8 Municipalities (#) 568 Concession Area (km²) 208,226 Market Share (%) 13.0 Costumers (million) 6.4 Sales Concession Area (GWh) 49,033¹ 8 1) TUSD + Captive (Excludes CCEE sales) - LTM
  • 8. CPFL Energia: Industrial segment by activity Industrial segment by activity: CPFL Energia’s concession area (GWh) Dec.08 2Q09 Others: 23% Others: 23% Metallurgical: 17% Metallurgical: 20% Paper and Cardboard: Paper and Cardboard: 5% 5% Non-metallic minerals: Non-metallic minerals: Food: 16% 6% Food: 15% 6% Rubber: 6% Rubber: 6% Transportation Transportation Chemicals: 12% Chemicals: 10% equipment: 7% Textiles: 8% equipment: 6% Textiles: 8% CPFL Energia – Characteristics of the revenues: 1 • Distribution: reduction in the demand of the customer is done only 180 days after the request • Commercialization: average take or pay of the contracts in 2009 is 96% • Generation: 100% long-term contracted energy, without possibility of reduction 9 1) From Oct, 08 to Jun,09
  • 9. Tariff Review Cycle - Overview 2nd Cycle 3rd Cycle 2nd Cycle – Regulatory Premise1 Oct/2007 Oct/2011 Kd 14.97% Feb/2008 Feb/2012 Ke 16.71% Nominal WACC 12.81% per year Feb/2008 Feb/2012 Real WACC 9.95% per year Feb/2008 Feb/2012 Feb/2008 Feb/2012 Feb/2008 Feb/2012 2nd Tariff Review Cycle Net Regulatory Asset Base Apr/2008 Apr/2013 R$ 4,688 million (RAB) Apr/2008 Apr/2013 Referency Company (RC) R$ 1,116 million 10 1) Source: ANEEL
  • 10. The solidity achieved by CPFL reflects its operational efficiency and the quality of the markets in which operates Generation – 1H09 In operation Installed Capacity (MW) 1,737 (e) Assured Energy (MWmedium) 864 (e) HPP (#) 7 SPP (#) 33 Under construction Installed Capacity (MW) 465 Assured Energy (MWmedium) 229 HPP (#) 1 TPP Biomass (#) 1 Installed Capacity until 2010 (MW) 2,202 Campos Novos HPP Castro Alves HPP 11
  • 11. Strong growth in the installed capacity and long term concessions Installed Capacity (MW) 27% Assurede Energy (MWmedium) 9% 2,202 Concession Term 48% 1,704 1,737 1,588 27% 1,072 8% 812 854 915 40% 862 864 1,093 800 434 472 525 571 2003 2004 2005 2006 2007 2008 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 Baldin Biomass CPFL Energia Generation Business Contracts Expiration Date Serra da Mesa1 CPFL Sul2 Lajeado 14 de Julho 2028 2032 2036 After 2027 58% SPP’s 2013 35% CPFL Jaguariúna3 2012 7% 2015 12 1) CPFL has the right of 51.54% of the Assurede Energy until 2028 2) Hydroelectric projects with installed capacity <= 1,000 kW are not eligible to concession 3) Among the 9 SPP’s, 6 of them are in the situation mentioned in note 2
  • 12. Expansion into biomass, CPFL Bioenergia’s constitution and its first deal Expansion of ethanol plants Expansion Bioelectricity² (MWmedium) 151 new plants expected to be built in the state of São Paulo by 20111 • Contract signed: Aug 2008 Baldin Project – 1st Deal • Construction of a sugar cane CPFL bagasse-fired thermoelectric generation plant Investmen CPFL will have the right to 24 t: R$ 98 milli MW of energy exported during • Location: Pirassununga – SP on harvest season • Expected operations: April 2010 1) Source: EPE 13 2) Source: Cogem - SP
  • 13. The solidity achieved by CPFL reflects its operational efficiency and the quality of the markets in which operates Commercialization – 1H09 Free Costumers 72 Outside Concession Area 18 Inside Concession Area 54 Market Share (%) 21 Commercial expertise: competitive performance in free market sales and Value-Added Services – VAS Captive and Free Market’s Sales Evolution in Brazil (% of TWh) 14% 23% 27% 28% 26% 25% 86% 77% 73% 72% 74% 75% 2004 2005 2006 2007 2008 20091 Energy Commercialization Desk ACR - Regulated Contracting Ambience ACL - Free Contracting Ambience Campinas - SP 15 1) LTM until Jun, 09
  • 14. 16 1) Excludes intercompany transactions (consolidation accounting basis), CCEE and generation sales (except to the free market) 2) Source: EPE
  • 15. A CPFL apresentou forte crescimento de EBITDA e Lucro Líquido nos últimos anos EBITDA (R$ million)1 Net Income (R$ million)1 CAGR 4 years = 13.7% CAGR 4 years = 46.2% 3.345 1.641 2.789 2.808 1.404 1.276 2.120 1.021 1.681 1.349 572 279 2004 2005 2006 2007 2008 1H09 2004 2005 2006 2007 2008 1H09 EBITDA Breakdown² Distribution 63% Consolidated EBITDA Margin of 28% and Net Margin of 12%3 Commercialization and Services Generation 10% 27% 1) 2007 and 2008 adjusted by the impact of Law 11,638 and PM 449/08 2) Reported values 17 3) Excluding main non-recurring effects and items that affect Revenue, but don’t affect EBITDA
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  • 18. CPFL Energia´s Estimated Capex Distribution – R$ million 1.012 934 588 483 Total Capex – R$ million 738 776 740 354 337 377 1.235 1.228 738 1.012 541 993 424 438 384 363 934 789 752 776 740 2009E 2010E 2011E 2012E 2013E Maintenance Expansion 429 Generation – R$ million 191 497 57 68 24 2 12 1 12 0 260 2009E 2010E 2011E 2012E 2013E Biomass Generation¹ Hydraulic Generation Distribution 215 236 156 Total: R$ 5 billion 59 59 13 12 39 2009E 2010E 2011E 2012E 2013E Equity Debt 20 1) CPFL Bioenergia
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