Citi 2010 brazilian_utilities_conference_07042010

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Citi 2010 brazilian_utilities_conference_07042010

  1. 1. Citigroup's Utilities Day Gustavo Estrella - IRO
  2. 2. Highlights The largest private player in the Brazilian Electric Sector • Energy market is concentrated in the most developed regions of Brazil (South/Southeast) • Market cap of R$ 18,5 billion in March, 20101 • Listed on Bovespa’s Novo Mercado and NYSE’s ADR Level III • Differentiated Dividend Policy: minimum payment of 50% of the net income on a semi-annual basis • Strong growth in the generation 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%), Lajeado HPP’s stake (7%) and EPASA TPP’s stake (51%) in the last 3 years • First company in the Brazilian electric sector to negotiate carbon credits, through a run-of-stream HPP • Investments in energy generation from biomass: Baldin Biomass TPP, Baía Formosa Biomass TPP, Pedra Biomas TPP, Buriti Biomass TPP and Ipê Biomass TPP • 188 MW sold in the Wind Energy Auction in Dec, 2009 2 1) Share price March 2nd 2010: R$ 38,48/ON
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  4. 4. Brazilian’s largest player in distribution and commercialization businesses COMMERCIALIZATION AND SERVICES COMMERCIALIZATION AND SERVICES CPFL Energia Market-share Distribution CPFL 13%1 Captive Market and System Charge • 6.6 million customers • 568 municipalities • Sales of 48,799 GWh² Market leader Others 87% Generation CPFL 2%1 GENERATION DISTRIBUTION Focused mainly in renewables • 40 HPP operating • 1,737 MW installed capacity • 15 plants under construction 4th Brazilian private generator Others 98% Commercialization CPFL 21% Energy free market and Businesses Units of Services • 74 free customers • Sales of 10,243 GWh² • Services: revenues of R$ 88 million3 Market leader Others 79% 4 1) Aneel – last available information 2) December/09 – LTM. Concession area sales (excludes CCEE) . 3) LTM
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  6. 6. Growth in Generation – Investments of R$ 3 billion Baldin TPP (sugarcane-fired thermoelectric power plant) Start-up • Installed Capacity = 45 MW (Capacity exported to CPFL Brasil = 24 MW/harvest) April 2010 • CPFL Investment = R$ 103 million (São Paulo State) Foz do Chapecó HPP (CPFL Stake = 51%) Start-up • Installed Capacity = 436 MW (Assured Energy = 220 avg MW) 3Q10 • CPFL Investment = R$ 1,328 million EPASA (CPFL Stake = 51%) Start-up • Installed Capacity = 174 MW (Termonordeste and Termoparaíba TPPs) 3Q10 • CPFL Investment = R$ 310 million (Paraíba State) CPFL Bioformosa TPP (sugarcane-fired thermoelectric power plant) Start-up • Installed Capacity = 40 MW (Capacity exported to CPFL = 25 MW/harvest) July 2011 • CPFL Investment = R$ 127 million (Rio Grande do Norte State) CPFL Wind Farms Start-up July 2012 • Installed Capacity = 188 MW (Commercialized Energy = 76 avgMW) • CPFL Investment = R$ 768 million (Rio Grande do Norte State) CPFL Bio Pedra TPP, CPFL Bio Buriti TPP and CPFL Bio Ipê TPP Start-up 2011/2012 • Installed Capacity = 145 MW (Capacity exported to CPFL = 89 MW/harvest) • CPFL Investment = R$ 366 million (São Paulo State) 6
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  8. 8. CPFL presents sales growth in the concession area and in the free market Concession Area Sales – GWh1 Free Market Sales - GWh1 CAGR = 6.1% p.y. TUSD CAGR = 26.1% p.y. CAPTIVE 46,475 49,033 48,799 41,363 36,364 38,498 11,230 11,710 10,978 3,288 7,263 9,585 10,243 9,334 8,951 8,904 7,120 33,076 35,245 37,323 37,821 31,235 31,778 3,209 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 Concession Area Sales (GWh) – 2009 Brazil2 Southeast2 South2 -0.5% -1,1% -1.6% -3.9% -2.6% -1.9% 1) Excludes intercompany transactions (consolidation accounting basis), CCEE and generation sales (except to the free market). 2009 TUSD adjusted (97 CAT Resolution) 8 1) Excludes intercompany transactions (consolidation accounting basis), CCEE and generation sales (except to the free market) 2) Source: EPE 8 2) Source: EPE
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  11. 11. CPFL presents strong growth of EBITDA and Net Income in the last years EBITDA (R$ million)1 Net Income (R$ million)1 CAGR = 10.5% p.y. CAGR = 35.7% p.y. 3,345 1,641 2,789 2,808 1,404 2,765 1,276 1,286 2,120 1,021 1,681 279 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 Recurring EBITDA Breakdown –24Q9 or 2009? Margin 4Q09 Recurring Net Margin 4Q092 Generation 25% CPFL Energia EBITDA Margin of 29.7% Distribution Net Margin of 13.8%2 Commercialization 63% and Services 12% 11 1) 2007 and 2008 adjusted by the impact of Law 11,638 and PM 449/08 2) Recurring. Includes tax credit benefits
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  15. 15. Citigroup's Utilities Day Gustavo Estrella - IRO

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