March, 2013September, 2013
II BTG Pactual
Utilities Days
Eduardo Takeiti
Investor Relations Officer
2
33
1) Termoparaíba and Termonordeste thermoelectric facilities; 2) CPFL Energia has a 58.8% indirect interest in CPFL Reno...
HPP Foz do
Chapecó
HPP Barra
Grande
HPP Castro
Alves
HPP Monte
Claro
HPP 14 de
Julho
HPP
Campos
Novos
HPP Luis
Eduardo
Mag...
26% 44%
16%
14%
Distribution segment
• 7.3 million customers
• 569 municipalities
• Most developed regions
• High potentia...
3rd
Tariff Review Cycle
CPFL Piratininga Oct-122
CPFL Santa Cruz
Feb-132
CPFL Leste Paulista
CPFL Jaguari
CPFL Sul Paulist...
Cost-cutting initiatives
Zero Base Budget
Inefficiencies from
past budgets are not
carried over to the
next periods
~R$50 ...
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...
The Distribution segment, intensive in O&M expenses, has gone through periodic tariff reviews to
reduce costs and improve ...
Distribution | Financials
Net revenues1 – Adjusted2
EBITDA – Adjusted2
Net income – Adjusted2
2010 2011 2012 LTM 2Q12 LTM ...
• Long Term Concessions
• Latin America’s largest Portfolio in
Alternative Energy
• Renewable Sources: higher than 93%
2º ...
1998 2004 2005 2007 2007¹ 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 ...
CPFL Renováveis | Shareholders’ structure as of Sep-13
13 1) Including Tanquinho solar power plant with an installed capac...
CPFL Renováveis | Current portfolio
14
Operating
(Sep-13)
Under
construction
End of
2016
Under
development
Total
Portfolio...
(MW)
(MWavg)
CPFL Renováveis
(Aug-11)
652 314
2Q12 25 8.2 Free market -
2Q12 70 24.4
LER auction
(R$158.81/MWh)
Estimated ...
(e) (MW) (MWavg) (e)
3Q13 50.0 18.0
BNDES funding
(approved and partially disbursed)
Free market
3Q13 30.0 15.0
BNDES fund...
Generation segment: conventional and alternative energy | Financials
Net Revenues (R$ million) - Adjusted1 EBITDA (R$ mill...
• 280 free consumers
• Nationwide outreach
• Value-added product portfolio
• Synergy with CPFL Renováveis
Number of Consum...
19
Jun/09 Jun/10 Jun/11 Jun/12 Jun/13
192
221
495
796
1,123
Jun/09 Jun/10 Jun/11 Jun/12 Jun/13
441 465 491
558
613
Current...
Transmission
networks
Self-generation
networks
Distribution
networks
Recovery of
equipment
Services Segment | CPFL Serviço...
Services Segment | CPFL Total and CPFL Atende
• CPFL Total offers collection services with an
established authorized netwo...
2H04 1H05 2H05 1H06 2H06 1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13
140
401
498
612
722
842
719
602 ...
2012 actual
(cash flow)
2013 2014 2015 2016 2017
1,403
1,117
1,047
1,321
1,231
1,265
1,043
1,072
729
234
15
11
22
136
147
...
24
Indebtedness and leverage
1) Financial covenants criteria. 2) LTM recurring EBITDA (covenants criteria). 3) Financial d...
25
Strong and robust liquidity
1) Disregard financial charges (ST = R$ 295 million; LT = R$ 45 million), hedge (net positi...
26
Short term outlook
• Liability management exercise: pre funding for the
next 12m - longer terms and lower costs
• Avera...
II BTG Pactual Utilities Days
Upcoming SlideShare
Loading in …5
×

II BTG Pactual Utilities Days

727 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
727
On SlideShare
0
From Embeds
0
Number of Embeds
287
Actions
Shares
0
Downloads
5
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

II BTG Pactual Utilities Days

  1. 1. March, 2013September, 2013 II BTG Pactual Utilities Days Eduardo Takeiti Investor Relations Officer
  2. 2. 2
  3. 3. 33 1) Termoparaíba and Termonordeste thermoelectric 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% CONVENTIONALGENERATION 100% 100% 99.95% 100% COMPETITIVESUPPLY 100% 100% RENEWABLES 59.93% Investco Paulista Lajeado 5.94% SERVICES 100% 100% 100% 58.8%2 100% 30.0% 15.1% 30.5% 24.4% Nect Serviços100% 1 Corporate structure
  4. 4. 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 4 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.
  5. 5. 26% 44% 16% 14% Distribution segment • 7.3 million customers • 569 municipalities • 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; 3) Including regulatory asset & liabilities and excl. non-recurring items.5 2008 2009 2010 2011 2012 LTM2Q12 LTM2Q13 TUSD Captive +3.3% CAGR 2008-12 3.7% 2008 2009 2010 2011 2012 2013
  6. 6. 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 EBITDA breakdown 6 CPFL Energia – LTM2Q13 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 intercompany eliminations; 2) 12 months retroactive effect; 3) Commercialization in the free market and Services 56% 12% 4% 27% 6 Alternative Energy 618 Conventional 1,180 CPFL Paulista RGE CPFL Piratininga Competitive Supply3 179 Generation 1,798 CPFL Energia - Consolidated1 | 4,633 Distribution 2,657 66% 34% 57% 39% 4% Generation Segment Distribution Segment
  7. 7. Cost-cutting initiatives Zero Base Budget Inefficiencies from past budgets are not carried over to the next periods ~R$50 million/year (2012-15) 1 Tauron Program Introduction of the smart grid technology in the distribution network ~R$60 million/year 2 Redundancy Program Special retirement plan with 445 adherences ~R$25 million/year 3 Corporate Services Center Implementation of a back-office services provider to increase operating productivity and efficiency 4 1) Excluding CPFL Renováveis (ramp-up), CPFL Serviços (revenue-related expenses) and non-recurring items. In real terms. Inflation index: IGP-M. 2012 Reduction of 7.2% or R$ 108 million Personnel: -R$ 17 million MSO: -R$ 91 million 1H13 Reduction of 2.0% or R$ 10 million Personnel: -R$ 6 million MSO: -R$ 4 million Achievements1 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% 7
  8. 8. 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 8 Avg. Frequency of Power Outages per Consumer per Year – FEC 2012 (# occurrences) Avg. Length of Power Outages per Consumer per Year - DEC 2012 (hours) Operational excellence in distribution
  9. 9. The Distribution segment, intensive in O&M expenses, has gone through periodic tariff reviews to reduce costs and improve efficiency, while Generation and Transmission segments, more capital- intensive, did not face the same regulation over time Average tariff1 (CPFL Piratininga) - [R$/MWh]2 -13.3 -16% 20.0 88% -25.6 -38% -7.4 -24% -25.8 -16% R$/MWh % -24% Generation Transmission Distribution Sector charges Taxes (9%) 82 (22%) (6%) (18%) (45%) (44%) (8%) (13%) (22%) (14%) 3rd CRTP3 2011-2014 1st CRTP3 2003-2006 1) Average of all classes and voltages; does not take into account financial components. 2) Constant figures in December/12. Amounts adjusted by IPCA | Source: CPFL Energia. 3) Periodic Tariff Review. 4) Extraordinary Tariff Review. 9 (22%) (7%) (15%) (4%) (53%) 2012 Tariff after RTE4 -22.1 -27% -4.2 -18% -26.0 -39% -21.6 -69% -18.5 -11% R$/MWh % Pressure on tariffs
  10. 10. Distribution | Financials Net revenues1 – Adjusted2 EBITDA – Adjusted2 Net income – Adjusted2 2010 2011 2012 LTM 2Q12 LTM 2Q13 9,432 9,794 10,763 10,120 11,495 2010 2011 2012 LTM 2Q12 LTM 2Q13 2,267 2,351 2,678 2,453 2,657 2010 2011 2012 LTM 2Q12 LTM 2Q13 1,309 1,235 1,399 1,250 1,376 1) Excludes construction revenue; 2) IFRS less non-recurring items plus regulatory assets & liabilities. CAGR = +6.8% +13.6% CAGR = +8.7% +8.3% CAGR = +3.4% +10.1% Sales in the Captive Market (TWh) 2010 2011 2012 LTM2Q12 LTM2Q13 39.3 39.9 40.7 40.6 40.8 +0,4% CAGR = +1.8% 10
  11. 11. • Long Term Concessions • Latin America’s largest Portfolio in Alternative Energy • Renewable Sources: higher than 93% 2º Market share: 2.3% 25% Generation segment 1) Considering 58.8% stake at CPFL Renováveis, since its creation.11 Installed Capacity1 (MW) | Estimated growth CAGR 2000-16e = 21.5% a.a. Semesa Baesa Enercan Ceran Foz Chapecó Epasa Baldin Creation of CPFL Renováveis - 657 660 747 751 931 1,047 1,047 Greenfield Brownfield Privatization assets
  12. 12. 1998 2004 2005 2007 2007¹ 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 1) Equivalent stake, including 38MW of small plants at CPFL Geração and 24MW of SHPP embedded in the distribution companies. CPFL Energia’s power plants – state-of-the-art environmental efficiency 12
  13. 13. CPFL Renováveis | Shareholders’ structure as of Sep-13 13 1) Including Tanquinho solar power plant with an installed capacity of 1MWp. 58.8% 37.0% Free float 16.6% 100% 63.0% 24.6% 0.0% Small Hydro Biomass Wind Pre-IPO Post-IPO Solar
  14. 14. CPFL Renováveis | Current portfolio 14 Operating (Sep-13) Under construction End of 2016 Under development Total Portfolio 100% with PPA 1,735 5,553 Possible Probable Highly Confident 3,818 Small Hydro • 35 operating: 327MW • Under construction: - • Under development: 626MW Total: 953MW Biomass • 7 operating: 320MW • 1 under construction: 50MW • Under development: - Total: 370MW • 15 operating: 556MW • 18 under construction: 482MW • Under development: 3,192MW Total: 4,230MW Wind • 58 operating: 1,203MW1 • 19 under construction: 532MW • Under development: 3,818MW Total: 5,553MW1 Total 1) Including Tanquinho solar power plant - 1MWp of installed capacity 1,203 Wind SHPP – Small Hydro Biomass CPFL Renováveis’ Installed Capacity (MW)
  15. 15. (MW) (MWavg) CPFL Renováveis (Aug-11) 652 314 2Q12 25 8.2 Free market - 2Q12 70 24.4 LER auction (R$158.81/MWh) Estimated revenue: R$ 20 million/year 2Q12 158 63 Proinfa PPA (R$ 310.51/MWh) Acquisition price: R$ 1,062 million 3Q12 188 76 LER auction (R$ 175.51/MWh) Estimated Revenue: R$ 115 million/year 4Q12 40 11 Alternative 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$166.41/MWh) Estimated Revenue: R$ 112 million/year 3Q13 50 18 Free market - Current portfolio (Sep-13) 1,203 526 1) Constant currency (Dec/12)15 CPFL Renováveis | Track record
  16. 16. (e) (MW) (MWavg) (e) 3Q13 50.0 18.0 BNDES funding (approved and partially disbursed) Free market 3Q13 30.0 15.0 BNDES funding (under review) Commercial banks (bridge loan approved and disbursed) Reserve auction (Aug/10) R$ 142,53/MWh 3Q13 120.0 52.7 BNDES funding (bridge loan approved and disbursed, long-term funding under review) Commercial banks (bridge loan approved and disbursed) Alternative sources auction (Aug/10) R$ 154,83/MWh 4Q13 78.2 37.5 BNDES funding (bridge loan contracted and disbursed, long-term funding under review) Alternative sources auction (Aug/10) R$ 152,63/MWh 1Q16 82.0 40.2 BNDES funding (structuring) Free market 3Q16 172.0 89.0 BNDES funding (structuring) Free market Projects under construction 532.2 252.4 1) Macacos, Pedra Preta, Costa Branca e Juremas; 2) Atlântica I, II, IV e V; 3) Constant currency (Dec/12); 4) Campo dos Ventos I, III, V; 5) Ventos de São Benedito, Ventos de Santo Dimas, Santa Mônica, Santa Úrsula São Domingos and Ventos de São Martinho16 CPFL Renováveis | Portfolio under construction
  17. 17. Generation segment: conventional and alternative energy | Financials 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 LTM2Q12 LTM2Q13 1,121 1,520 2,350 1,842 2,634 CAGR = +44.8% +43.0% 2010 2011 2012 LTM2Q12 LTM2Q13 810 1,181 1,672 1,397 1,798 CAGR = +43.7% +28.7% 2010 2011 2012 LTM2Q12 LTM2Q13 262 778 384 819 358 -56.3% EBITDA Margin - Adjusted1 2010 2011 2012 LTM2Q12 LTM2Q13 17
  18. 18. • 280 free consumers • Nationwide outreach • Value-added product portfolio • Synergy with CPFL Renováveis Number of Consumers (#) | CPFL Brasil 1º Leader in Commercialization of Energy Market share: 10% 80 74 129 141 231 280 2008 2009 2010 2011 2012 2Q13 CAGR = 30% Portfolio (Free Consumers) 179 52 Inside the concession area Outside the concession area Current: 11.5 GW avg Potential: +4.8 GW avg Free Market in Brazil 210 70 18 • CPFL Brasil was awarded 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 Competitive power supply segment
  19. 19. 19 Jun/09 Jun/10 Jun/11 Jun/12 Jun/13 192 221 495 796 1,123 Jun/09 Jun/10 Jun/11 Jun/12 Jun/13 441 465 491 558 613 Current: 9.6 GW avg Potential: +0.7 GW avg Current: 1.9 GW avg Potential: +4.1 GW avg Competitive advantages of CPFL: market leadership, expertise and synergies with CPFL Renováveis Source: ANEEL and CCEE Competitive power supply segment | Growth opportunities # of competitive customers – larger than 3 MW # of special customers – from 0.5 to 3 MW Number of free clients in Brazil CAGR=8.6% CAGR=55.5%
  20. 20. Transmission networks Self-generation networks Distribution networks Recovery of equipment Services Segment | CPFL Serviços • 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) 20
  21. 21. Services Segment | CPFL Total and CPFL Atende • 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 the 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 21
  22. 22. 2H04 1H05 2H05 1H06 2H06 1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 140 401 498 612 722 842 719 602 606 572 655 774 486 748 758 640 456 363 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% 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 22.78 21.11 CPFL has distributed dividends around the entire net income since its IPO, reaching the mark of R$ 10.6 billion distributed. Declaration of dividend of 1H13: R$ 363 million | 0.38/share Dividend Yield 1 (LTM) Declared dividends2 (R$ Mi) CPFL average price (R$/ORD)3 1) Considering last two half years’ dividend yield 2) Refers to declared dividend. Payment in the next half year. 3) Considers share price adjusted for reversal stock split and simultaneous split of shares on June 29, 2011 (not adjusted per dividends). 22 Dividends
  23. 23. 2012 actual (cash flow) 2013 2014 2015 2016 2017 1,403 1,117 1,047 1,321 1,231 1,265 1,043 1,072 729 234 15 11 22 136 147 151 120 113 Total: R$ 8,709 million1 Distribution: R$ 5,981 million Generation: R$ 2,062 million2 Commercialization and Services: R$ 667 million R$ 2,468 R$ 2,325 R$ 1,923 R$ 1,706 R$ 1,367 R$ 1,389 1) Constant currency Dec/12. Take into account 100% interest on CPFL Renováveis and Ceran (IFRS). 2) Conventional + Renewable23 Capex 2013 - 2017
  24. 24. 24 Indebtedness and leverage 1) Financial covenants criteria. 2) LTM recurring EBITDA (covenants criteria). 3) Financial debt (+) private pension fund (-) hedge (considering proportional consolidation). 2011 2012 1Q13 2Q13 10.0 12.6 12.5 12.6 Leverage1 | R$ billion Adjusted net debt1/ Adjusted EBITDA2 3,665 4,377 4,111 3,676 Adjusted EBITDA2 R$ million CDI Prefixed (PSI) IGP TJLP Gross debt breakdown3 3.55x: Considering IFRS accounting criteria Gross debt cost3 | LTM 9.4% 7.9% 9.9% 7.3% 7.1% 4.9% 4.4% 4.3% 3.0% 1.7% 1.2% 17.7% 13.9% 13.4% 12.1% 13.4% 9.4% 10.5%11.1% 9.0% 8.4% 8.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13 2Q13 Nominal Real 2.73 2.89 3.03 3.42
  25. 25. 25 Strong and robust liquidity 1) Disregard financial charges (ST = R$ 295 million; LT = R$ 45 million), hedge (net positive effect of R$ 539 million) and MTM (R$ 86 million). 2) Considers amortization as of July 01, 2014. Cash Short-term 2014² 2015 2016 2017 2018 2019+ 5,420 2,721 1,484 3,278 2,403 2,121 2,413 3,856 Debt amortization schedule1 (Jun/13) | R$ million Cash coverage: 2.0x short-term amortization (12M) Average tenor: 4.00 years Short-term1 (12M): 16.6% of total
  26. 26. 26 Short term outlook • Liability management exercise: pre funding for the next 12m - longer terms and lower costs • Average tenor: 4.0 years (2Q13) vs. 3.2 years (4Q09) • Real cost of debt: 1.2% p.a. (2Q13) vs. 4.9% p.a. (4Q09) • Reaffirmation of ratings: brAA+ since 2Q08 (S&P) and 3Q10 (Fitch) • Liquidity policy (minimum cash vs. amortizations in the next 12-18 months) – 2Q13 cash coverage: 2.0x • Stable cash flow from operations (on avg. R$ 2.3 billion/year since 2010 | LTM2Q13: R$2.5 billion) • Optimal capital structure • Reduction in WACC • Maximization of shareholder return • Ramp-up at CPFL Renováveis • 2H13: 278 MW still to be started up • Signals of recovery, favoring energy consumption – industrial segment: +2.7% in 2Q13 • Productivity gains: • Focus on cost reduction and optimization (Zero Based-Budget and Corporate Services Center) • Tauron Project (smart grid): higher productivity, lower costs • Optimization in the occupancy of buildings – sale of vacant assets Growth and productivity Optimization of capital structure      

×