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Statement of Results for the First Semester 2005




               August, 2005
Disclaimer

This presentation may include forward-looking statements of future events or results according to regulations ...
Management Presenters
Presenters                     Curriculum


António Martins da Costa        • Joined Energias do Bra...
Energias do Brasil: Restructuring
Following a comprehensive restructuring process that started towards the end of 2003, En...
Energias do Brasil: Restructuring (cont’d)
The following projects were developed to meet strategic objectives:




 • Migr...
Offering Summary
On August 10, 2005, Energias do Brasil successfully completed its R$ 1.2 bi equity offer

     Offering  ...
Hit Ratio – Road shows
About 140 investors contacted in Brazil, the USA and Europe with “Hit Ratios” of up to 52%




  Ci...
Offering Summary
  A total of 1,473 investors have been attracted, 1,084 of them are individuals. This will provide
  a hi...
Energias do Brasil: Post-IPO and Capitalization Structure
New corporate structure allows for transparency, competitiveness...
Energias do Brasil




                     10
Energias do Brasil
Energias do Brasil operates in four Brazilian states with an installed capacity of 530 MW. Its
power di...
Energias do Brasil: Growth and Profitability
  In 2004, Energias do Brasil posted net revenues of R$3.7 billion with a 21%...
Energias do Brasil: Profitability
                     In 2004, net profit of Energias do Brasil reached R$107 million. Co...
Distribution Business
Our operating efficiency is demonstrated by our strong increase in productivity, which will be
furth...
Strategy - Distribution
   Tariff Revision Process: ANEEL has been defining the RAB of our concessionaires



Concessionai...
Distribution Business
In 2005, Energias do Brasil is investing R$ 21.5 million in programs geared to contain growth in
the...
Generation Business
 Energias do Brasil currently has an installed capacity of 530 MW, 100% long-term contracts...

 Exist...
Generation: Peixe Angical Plant

• Location: Rio Tocantins                               • Expected revenue service start-...
Commercialization Business
Enertrade is the second largest private commercialization company in Brazil characterized by hi...
Financial Performance




                        20
Revenue, EBITDA & EBITDA Margin
Strong growth in revenues, EBITDA and EBITDA margin...


Net Revenues (R$ million)        ...
Distributed and Sold Electric Power
Consistent growth in the electric power market of our concessionaires in 2005 ...


El...
Distribution – Market Breakdown
Migration of captive customers to the free customer status has been changing the market pr...
Costs and Expenses Breakdown                          1


Manageable costs have the potential to be significantly reduced ...
Indebtedness – Total Position
         Current capital structure will be strengthened by the IPO and the capitalization of...
Indebtedness – Foreign Currency
The significant reduction in the exposure to the exchange risk after the IPO and capitaliz...
Indebtedness Management: Strategy



• Based on the new, less leveraged, capital structure, reduce the indebtedness cost

...
Current Investment Plan
We invested R$515 million in the 1S05 and our investment plan for this year is fully equalized.
Th...
Dividend Policy
The strong cash flow generated will allow Energias do Brasil to implement an attractive
dividend policy in...
Energias do Brasil’s Strategy




                                30
Key Elements of our Strategy

                                                   OBJECTIVE



                      To be ...
Fragmented Market
The impact of the new regulatory framework on a highly fragmented market, where the players
have distinc...
Strategy - Generation
The main drive for short-term growth is the development of hydroelectric generation projects




   ...
Strategy - Distribution
Focus on operating efficiency and synergy gains

Sources of Synergies




                        ...
Vanguard Project

Mission: identify and capture synergies within companies of Energias do Brasil,
consolidating its refere...
Strategy - Commercialization
Maintain Energias do Brasil’s customer base and expand into new markets


Among the leading p...
Conclusion: An Excellent Investment Opportunity

  Attractive Market      • Brazil’s positive economic outlook should tran...
Statement of Results for the First Semester 2005



                August, 2005

             Visit our website
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Apimec 2005, August

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Transcript of "Apimec 2005, August"

  1. 1. Statement of Results for the First Semester 2005 August, 2005
  2. 2. Disclaimer This presentation may include forward-looking statements of future events or results according to regulations of the Brazilian and international securities and exchange commissions. These statements are based on certain assumptions and analysis by the company that reflect its experience, the economic environment and future market conditions and expected events, many of which are beyond the control of the company. Important factors that may lead to significant differences between the actual results and the statements of expectations about future events or results include the company’s business strategy, Brazilian and international economic conditions, technology, financial strategy, public service industry developments, hydrological conditions, financial market conditions, uncertainty of the results of future operations, plans, objectives, expectations and intentions, among others. Considering these factors, the actual results of the company may be significantly different from those shown or implicit in the statement of expectations about future events or results. The information and opinions contained in this presentation should not be understood as a recommendation to potential investors and no investment decision is to be based on the veracity, current events or completeness of this information or these opinions. No advisors to the company or parties related to them or their representatives shall have any responsibility for whatever 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 expectations and projections about future events and trends that may affect the company’s business. These statements include projections of economic growth and energy demand and supply, as well as information about the competitive position, the regulatory environment, potential opportunities for growth and other matters. Several factors may adversely affect the estimates and assumptions on which these statements are based. 2
  3. 3. Management Presenters Presenters Curriculum António Martins da Costa • Joined Energias do Brasil in 2003 CEO and Vice-Chairman of the • Previously was CEO of Eureko Polska, Vice-President of PZU (Poland) and director of Board Banco Comercial Português (Millenium BCP) and Director of Eureko BV (Netherlands) • Graduated in civil engineering and holds a MBA from Universidade do Porto. Attended executive programs at INSEAD, AESE and the Wharton School Antonio José Sellare • Joined Energias do Brasil in 2000 CFO • Previously worked for several Brazilian financial institutions such as Banco Axial, Banco BMD, and Guilder (ING brokerage house) • Experience in various areas, including treasury, asset management, accounting, IT, human resources • Graduated in business administration at PUC-SP Vasco Barcellos • Joined Energias do Brasil in 2005 Investor Relations Officer • Previous experience as investor relations officer / manager at companies such as Aracruz Celulose, Braskem and Light. Also worked for several financial institutions • Graduated in industrial engineering at UFRJ and holds an MBA from PUC-RJ • Experience of over 10 years in the capital market 3
  4. 4. Energias do Brasil: Restructuring Following a comprehensive restructuring process that started towards the end of 2003, Energias do Brasil implemented a set of operations in the first months of this year for the purpose of: • Adjusting its capital structure to provide for a self-sustained growth of its portfolio • Simplifying its corporate structure making it more transparent to the financial community • Removing fiscal inefficiencies that existed in the previous structure • Controlling the Group’s three distributors with a 100 percent stake to concentrate the liquidity of the shares on a single vehicle and to exploit the synergies among them • Establishing a long-term partnership with the capital market 4
  5. 5. Energias do Brasil: Restructuring (cont’d) The following projects were developed to meet strategic objectives: • Migration of the distributors’ shareholders: – Independent valuation of the companies; – Migration occurred on April 29, 2005; – Only 0.02% of shareholders pre-emptive rights. • Deverticalization: – Operation completed on June 30, 2005; – Establishment of an optimized corporate structure, because ENBR already owned 100% of the distributors’ shares. • IPO 5
  6. 6. Offering Summary On August 10, 2005, Energias do Brasil successfully completed its R$ 1.2 bi equity offer Offering • Initial Public Offering in Brazil with international sales efforts under Reg S and rule 144ª Structure • Listed in Bovespa’s New Market (ENBR3 code) • Total offering volume reached R$1,184.7 billion (includes green shoe) with the issuance of 65,816,818 common shares (price of R$18.00 per share) • Credit capitalization of R$ 670.0 million (37,222,222 shares) Offering Size • Total primary offering reached R$500.1 million (27,785,150 shares) Main use of proceeds: finance generation projects • Secondary offering: The offering structure allowed the participation of minority shareholders (they exchanged their shares for ENBR3 at the subsidiaries) who sold 809,446 shares (R$14.6 million) • The book of orders exceeded the offer by 2.5 times Demand • Demand split 60 / 40 between foreign and local investors • About 140 investors were contacted during international road shows (USA and Europe) • 180 days for the controlling shareholder, the company and some directors and officers of the Lock up period company • Sales efforts to retail investors and employees Retail • Retail demand of R$14.4 million from 474 investors • Demand of R$1.3 million from 613 employees 6
  7. 7. Hit Ratio – Road shows About 140 investors contacted in Brazil, the USA and Europe with “Hit Ratios” of up to 52% Cities: São Paulo Cities: New York Boston Cities: London Rotterdam Rio de Janeiro Los Angeles Washington Frankfurt Milan San Francisco San Diego Investors visited: 58 Investors visited: 51 Investors visited: 29 One-on-ones 25 One-on-ones 38 One-on-ones 20 Group meetings 33 Group meetings 13 Group meetings 9 Hit ratio: 52% Hit ratio: 51% Hit ratio: 28% Financial Volume per Country/Region Retail Brazill 3% Brazil USA 38% 45% Europe 14% 7
  8. 8. Offering Summary A total of 1,473 investors have been attracted, 1,084 of them are individuals. This will provide a higher liquidity ratio to the negotiations of our shares Share Performance Base 100: 7/13/05 155.00 145.00 R$ 26.00 IPO of ENBR3 at R$ 18.00 135.00 Announcement of 125.00 2Q05 Results – 31,583 R$ 21.85 9,488 115.00 105.00 95.00 85.00 ENBR3 Ibovespa IEE • Daily negotiation average from the listing: R$ 5.5 million • Share Performance since the listing: +44.4% Source: Economática • Share Performance in September: +5.3% 8
  9. 9. Energias do Brasil: Post-IPO and Capitalization Structure New corporate structure allows for transparency, competitiveness and potential for synergy earnings, contemplating the deverticalization concluded in July, 2005 ... EDP Group Market 63.7% 36.3% 27.65% 1 60.0% 100.0% 100.0% 100.0% 100.0% Peixe Enertrade Lajeado Energest2 Bandeirante Enersul Angical 100.0% 51.0% 100.0% 100.0% Pantanal CESA2 Costa Rica Escelsa Energética3 Generation Commercialization Distribution Legend % of the Total Capital Notes: 1 Voting capital, also represents the percentage of installed capacity allocated to Energias do Brasil. Energias do Brasil holds 16.3% of its total capital 2 Includes Escelsa’s generation assets 3 Includes Enersul’s generation assets …with a 36.3% free float of the total capital 9
  10. 10. Energias do Brasil 10
  11. 11. Energias do Brasil Energias do Brasil operates in four Brazilian states with an installed capacity of 530 MW. Its power distribution volume in 2004 reached 22 thousand GWh to 2.9 million consumers LAJEADO PLANT PEIXE ANGICAL PLANT ♦ Installed capacity: 250 MW ♦ Installed capacity: 452 MW (adjusted for Energias do Brasil’s stake) ♦ Conclusion: 2006 ENERSUL CESA e ENERGEST ♦ Customers: 651 thousand ♦ Installed capacity: 220 MW ♦ Under construction: 75 MW PANTANAL ENERGÉTICA ♦ Installed capacity: 45 MW COSTA RICA ♦ Installed capacity: 16 MW BANDEIRANTE ESCELSA ♦ Customers: 1,274 thousand ♦ Customers: 1,001 thousand Legend Generation Distribution 11
  12. 12. Energias do Brasil: Growth and Profitability In 2004, Energias do Brasil posted net revenues of R$3.7 billion with a 21% EBITDA margin. In 1S05, its net revenues reached R$2.2 billion with a 24% EBITDA margin. Net Revenues by Business EBITDA per Business 4,500 900 3,703 775 4,000 800 8% 5% 3,364 3% 7% 3,500 700 5% 2,891 2% 575 3,000 1% 600 1% 518 2% 7% (R$ MM) (R$ MM) 2,500 2,182 500 420 7% 89% 3% 9% 87% 4% 1,842 399 2,000 93% 2% 400 2% 8% 5% 97% 2% 1,500 300 92% 90% 1,000 89% 200 95% 94% 90% 500 100 0 0 2002 2003 2004 1S04 1S05 2002 2003 2004 1S04 1S05 Distribution Generation Commercialization Distribution Generation Commercialization • The participation percentages of the segments in the revenue do not include the eliminations. 12
  13. 13. Energias do Brasil: Profitability In 2004, net profit of Energias do Brasil reached R$107 million. Considering net profit before the participation of minority shareholders, the figure was R$279 million. Net profit before the participation of minority shareholders Net profit 400 250 229 300 279 200 231 200 150 107 100 71 (R$ million) 100 (R$ million) 48 50 - - (49) (50) (100) (68) (100) (200) 95% (150) (249) (169) (300) (200) 2002 2003 2004 1S04 1S05 2002 2003 2004 1S04 1S05 13
  14. 14. Distribution Business Our operating efficiency is demonstrated by our strong increase in productivity, which will be further improved by the growth in demand for electricity Distributed Energy (GWh) Productivity (customer / employee) 25.000 1,200 22,396 1,059 21,426 20,171 14% 132.4% 1,000 20.000 13% 14% 776 59.1% 799 32% 800 34% 54.2% 712 15.000 3.4% 32% 654 585 11,112 11,488 600 502 14% 14% 456 462 10.000 54% 400 53% 32% 33% 54% 5.000 54% 53% 200 0 0 2002 2003 2004 1S04 1S05 Bandeirante Escelsa Enersul Bandeirante Escelsa Enersul 1998 2001 2004 14
  15. 15. Strategy - Distribution Tariff Revision Process: ANEEL has been defining the RAB of our concessionaires Concessionaire Status Comments ENERSUL DEFINITIVE . In April/05 - increase from 43.59% to 50.81% ESCELSA DEFINITIVE . In August/05 - increase from 6.33% to 8.58% BANDEIRANTE PROVISIONAL . Definition in October 05. In October 04 - decreased from 18.08% to 10.51% 15
  16. 16. Distribution Business In 2005, Energias do Brasil is investing R$ 21.5 million in programs geared to contain growth in the level of technical and commercial losses. These investments are intended to provide a gradual reduction starting in 2006. Evolution of total losses (% of the electric power distributed in the last 12 months) 35 technical commercial 1S05 1S05 1S05 1S05 30 - 4.4 thousand inspections - 87.0 thousand - 59.6 thousand - 151 thousand made inspections made inspections made inspections made 25 - 1.0 thousand frauds - 9.7 thousand frauds - 1.6 thousand frauds - 12,3 thousand frauds detected detected detected detected % last 12 months - Total of 50 thousand - Total of 240 thousand - Total of 214 thousand - Total of 504 20 inspections scheduled for inspections scheduled for inspections scheduled for thousand inspections 2005 2005 2005 scheduled for 2005 5.9 15 6.0 5.7 6.0 4.1 10 3.6 1.7 2.2 13.0 5 10.1 7.5 7.8 7.4 7.8 7.9 8.5 0 2004 jun/05 2004 jun/05 2004 jun/05 2004 jun/05 BANDEIRANTE ESCELSA ENERSUL ENERGIAS DO BRASIL 16
  17. 17. Generation Business Energias do Brasil currently has an installed capacity of 530 MW, 100% long-term contracts... Existing Generation Assets Nwe Generation Capacity 600 1,200 100% of contracted energy through PPAs 50 1,057 16 530 26 500 45 1,000 25 2006 2006 194 (Installed Capacity MW) 400 800 (Installed Capacity MW) 527 452 300 600 530 2501 2006 200 400 530 100 200 0 0 Lajeado Escelsa Pantanal CESA Costa Total Current AHE Peixe PCH São João 4th Mascarenhas Total Geração Energética Rica Capacity Angical plant Legend: Note: Expected start of operations 1 Adjusted for Energias do Brasil’s stake ... and this capacity is to double till 2006 as part of its expansion strategy for the generation segment 17
  18. 18. Generation: Peixe Angical Plant • Location: Rio Tocantins • Expected revenue service start-up dates: • Installed Capacity: 452 MW • Assured annual power supply: 2,374 GWh 1st engine: May 2006 • Reservoir area: 294 Km2 2nd engine: July 2006 • Investment: R$1.5 Bi 3rd engine: October 2006 • 4,780 employees, 3,873 of them on the job site, 278 • Until June/05, 93.90% of the project is already implemented. with the transmission lines and 629 involved in About 86% of the civil works and 50% of the manufacturing and complementary civil works. supply of electric and mechanical parts have been completed. 18
  19. 19. Commercialization Business Enertrade is the second largest private commercialization company in Brazil characterized by high growth rates... Energy Volumes Free Customer Market – Expected Growth 3,500 3,179 3,179 12.0 3,000 520 10.0 9.62 2,500 2,336 1,360 8.63 7.74 8.0 2,000 6.94 (GWh) 1,101 (GWm) 1,500 6.0 2,659 1,000 4.0 1,819 1,235 500 2.0 0 0.0 Sales 1S04 Sales 1S05 Purchases 1S05 2005E 2006E 2007E 2008E Others Energias do Brasil’s Discos Lajeado Source: Abracel ... and is well-positioned to exploit growth opportunities in the free customer market 19
  20. 20. Financial Performance 20
  21. 21. Revenue, EBITDA & EBITDA Margin Strong growth in revenues, EBITDA and EBITDA margin... Net Revenues (R$ million) EBITDA and EBITDA margin 2,500 600 30 2,182 518 2,000 500 1,842 420 400 1,500 (R$ MM) (R$ MM) 300 25 1,085 24% 236 % 1,000 893 200 183 23% 22% 500 100 21% - 20 - 2T04 2T05 1S04 1S05 2T04 2T05 1S04 1S05 EBITDA Margin ... which will be further improved by the expansion of our generation business 21
  22. 22. Distributed and Sold Electric Power Consistent growth in the electric power market of our concessionaires in 2005 ... Eletricity Distributed (GWh) Commercialized Energy (GWh) 14,000 3,500 3,179 12,000 11,488 3,000 11,112 10,000 2,500 2,336 8,000 2,000 GWh GWh 1,576 6,000 5,558 5,794 1,500 1,224 4,000 1,000 2,000 500 0 0 2T04 2T05 1S04 1S05 2T04 2T05 1S04 1S05 ... With an even higher expansion of our commercialization volumes 22
  23. 23. Distribution – Market Breakdown Migration of captive customers to the free customer status has been changing the market profile Eletricity Distributed (GWh) Net Operating Revenues (R$ million) 11,488 11,112 1% 1% 21% 28% 2,057 2% 1,815 9% 1% 5,558 5,794 5% 1% 1% 23% 29% 78% 1,049 89% 71% 896 2% 94% 1% 9% 76% 70% 5% 94% 89% 2T04 2T05 1S04 1S05 2T04 2T05 1S04 1S05 Captive Power in transit Others Captive Power in transit Others 23
  24. 24. Costs and Expenses Breakdown 1 Manageable costs have the potential to be significantly reduced with the recent corporate restructuring and synergy programs Costs and Expenses Breakdown1 – 1S05 Costs and Manageable Expenses Breakdown – 1S05 Personnel R$134 million (37%) Materials R$19 million (5%) Non-manageable costs Manageable costs R$1,304 million R$360 million (78%) (22%) Provision Third Parties’ Services R$43 million R$98 million (12%) (27%) Others R$66 million (18%) R$1,664 million R$360 million Note: 1 Excludes depreciation and amortization 24
  25. 25. Indebtedness – Total Position Current capital structure will be strengthened by the IPO and the capitalization of Escelsa’s senior notes... Indebtedness – 1S05 (R$ million) Net Debt / EBITDA1 3,756 5.0x (479) Foreign Long 3.9x (923) 4.0x Currency Term 3.4x 2,354 43% 71% (670) 3.0x 2.7x (500) 1,184 Local 2.0x Currency 1.4x 57% Short 1.0x Term 29% 0.0x Regulatory Assetsos Net Debt after before the IPO and capitalization Indebtednes of Senior Notes IPO Proceeds Cash 2003 2004 1S05 After Capit. and Capitalization and IPO Capitalization Gross IPO 2 Net Debt s Notes: 1 Based on the EBITDA of the last 12 months 2 Base June 31, 2005 …creating financial capacity for the company’s growth 25
  26. 26. Indebtedness – Foreign Currency The significant reduction in the exposure to the exchange risk after the IPO and capitalization will provide lower volatility Financial liabilities – effective exposure to foreign currency – 1S05 (R$ million) 1,800 1,600 (548 ) 1,400 1,200 (118) (R$ million) 1,000 1,726 800 (670) 600 1,060 400 200 390 0 Gross debt in Swap / Hedge Cash & equivalents Adjusted gross debt Capitalization Adjusted gross debt foreign currency in foreign currency in foreign currency (Senior Notes) in foreign currency after capitalization 26
  27. 27. Indebtedness Management: Strategy • Based on the new, less leveraged, capital structure, reduce the indebtedness cost • Reduce exposure to foreign currency by hedging, amortization of debt denominated in foreign currencies and new long term debts in local currency • Reduce the exposure to short-term indebtedness • Minimize the holding company’s liabilities and raise debt leverage in operating companies in line with their respective capacities of cash generation 27
  28. 28. Current Investment Plan We invested R$515 million in the 1S05 and our investment plan for this year is fully equalized. The IPO/capitalization will contribute to the development of new projects Investment Breakdown (Excludes New Generation Projects) 1,400 1,200 1,049 1,052 1,000 (R$ million ) 800 571 746 552 600 459 162 400 204 333 286 200 238 254 148 105 65 0 2003 2004 2005E 2006E Distribution Universalization Generation 28
  29. 29. Dividend Policy The strong cash flow generated will allow Energias do Brasil to implement an attractive dividend policy in compliance with the company’s investment plan • Minimum dividend pay-out: 40.0% of annual adjusted net income Dividend Policy • Rationale: the dividend pay-out should be compatible with Energias do Brasil’s investment requirements and target leverage 29
  30. 30. Energias do Brasil’s Strategy 30
  31. 31. Key Elements of our Strategy OBJECTIVE To be a leading company in the electric power industry, focused on creating value to our shareholders STRATEGY Benefit from coming growth opportunities, Focus on operating efficiency and synergy gains, with an emphasis on generation, following strict mainly in the distribution segment investment criteria Leverage management skills with the support Maintain a solid financial structure with liquidity of an international group that has a proven and scale to sustain the expansion plan track-record in competitive markets 31
  32. 32. Fragmented Market The impact of the new regulatory framework on a highly fragmented market, where the players have distinct strategies, financial capacity and growth potential Distribution - Market Share1 Generation - Market Share2 Tractebel Energias do Brasil CESP 7% 8% 6% CEMIG Others 25% AES 7% 14% Copel 5% Endesa AES 5% 4% CPFL 2% Eletrobrás Neoenergia 42% Duke 7% CPFL 3% 12% Petrobras Elektro 3% 1% Celesc Energias do 5% CEMIG Others Brasil Light Copel 11% 20% 1% 6% 6% Source: ANEEL Source: ANEEL Note: Note: 1 Market share in December 2004 2 Based on the installed capacity 32
  33. 33. Strategy - Generation The main drive for short-term growth is the development of hydroelectric generation projects • Clear perspective of return on future investments Why invest in • Low regulatory risk, as regulatory model emphasizes hydroelectric production hydroelectric • Ability to leverage on Group’s expertise generation projects? • Balancing our portfolio (generation versus distribution) • Thermoelectric projects do not yet meet Energias do Brasil’s risk and return criteria • New energy auctions • Acquisition of existing assets: - with potential for improvement and further expansion, and / or Opportunities - assets belonging to investors that do not have a long-term commitment to Brazil or are willing to monetize the generation assets • Partnership with experienced players 33
  34. 34. Strategy - Distribution Focus on operating efficiency and synergy gains Sources of Synergies • Efficiency Program “Best Practices” – already achieved recurring synergies of R$15 million / year • Project “Vanguarda” Operational – virtual platforms Integration – standardize policies and procedures • Corporate restructuring Strategic • Integrated management of asset portfolio Integration – competitive capital structure – achieve higher fiscal efficiency 34
  35. 35. Vanguard Project Mission: identify and capture synergies within companies of Energias do Brasil, consolidating its reference position in the Brazilian energy sector 1st phase of implementation Mapping followed by the optimization and process redesign Teams made up of employees from all the companies of Energias do Brasil will work in the survey of the current processes and redesign of the new processes The results of each stage of the Process Redesign are clearly defined for the teams 35
  36. 36. Strategy - Commercialization Maintain Energias do Brasil’s customer base and expand into new markets Among the leading players in the sector Commercialization strategy Market Share1 - 2004 Enertrade 9% • Explore the free customer market within our existing concession areas CPFL 18% Others 47% • Explore the high growth potential of markets outside our concession areas Own business operators 26%2 • Ability to sell generation in the free market Source: CCEE Notes: 1 Excludes Eletrobrás and free customers without commercialization company 2 Includes Petrobras and CIEN The existing platform already supports the implementation of our commercialization strategy 36
  37. 37. Conclusion: An Excellent Investment Opportunity Attractive Market • Brazil’s positive economic outlook should translate into higher energy Outlook consumption, creating a need for new investments in generation New Regulatory • New regulatory framework provides a more stable business environment Framework and should lead to the repositioning of the sector participants Growth Strategy • Expansion strategy with emphasis on generation • New corporate structure provides higher efficiency and will create additional Operational Efficiency synergies, specially in distribution Financial Strength • Strong financial position with sufficient liquidity and scale to finance expansion in Brazil Superior Corporate • Novo Mercado Listing (100% tag along rights for all shareholders, providing Governance the highest standard of Corporate Governance in Brazil) 37
  38. 38. Statement of Results for the First Semester 2005 August, 2005 Visit our website www.energiasdobrasil.com.br
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