Apresentação institucional 2011 ingles

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Apresentação institucional 2011 ingles

  1. 1. INSTITUTIONALPRESENTATION June, 2011
  2. 2. Agenda ►Company Profile ►Financial Performance ►Portfolio Overview ►Value Creation 2
  3. 3. Agenda ►Company Profile ►Financial Performance ►Portfolio Overview ►Value Creation 3
  4. 4. Equatorial Overview Holding company with investments in the energy sector, focused on distribution and generation Differentiated experience in operating and financial restructuring of companies in the Brazilian energy sector RR AP Controlled by PCP Fund, investment vehicle owned by former partners of Banco Pactual and managed by Vinci Partners. AM PA MA CE RN PI PB AC PE Current investments: RO TO BA AL SE MT GO DF MG MS ES SP RJ PR SC RS • Distribution company in the State of • Company responsible for implementing Maranhão and operating the Tocantinópolis and Nova Olinda thermoelectric plants in the • 2nd largest distribution company in the State of Maranhão Northeast of Brazil, in terms of concession area* • Fuel: high-viscosity heavy oil. • 4th largest distribution company in the • Joint installed capacity of 331 MW Northeast of Brazil, in terms of billed • 240 MW of energy sold at the A-3 auction energy* in 2007. • Annual gross revenues of R$2.1 billion in • Start-up: January 2010 2010. *Source: ABRADEE 4
  5. 5. Equatorial’s History PCP Fund acquires a Control concentrated in Equatorial migrates to FIP PCP sells its controlling stake of PCP Fund the “Novo Mercado” indirect stake in Light Equatorial May 2004 Mar. 2006 Apr. 2006 Dec. 2007 Feb. 2008 Apr. 2008 Oct. 2008 Dec. 2009 Apr. 2010 Incorporation of a Acquisition of 25% of Equatorial’s spin off CEMAR’s acquistion Equatorial’s IPO controlling stake of Geramar Light 5
  6. 6. Ownership Structure – Current PCP Latin America Minorities Power 53.7% 46.3% Equatorial Energia 65.1% 25% 100% Equatorial CEMAR Geramar New Projects Soluções • Total no. of shares: 109,226,672 • Share price*: R$ 11.00 • Free float: 46.3% / R$556 MM • ADTV60: R$1.944 MM *On 03/31/11 ADTV90 represents the average volume traded in the past 90 days 6
  7. 7. Corporate Strategy Increased returns through outstanding financial and CEMAR operating performance Consolidation of Acquistion of full or shared control distributors in Brazil and Added value through financial and operational restructuring, synergy Latin America gains and loss reduction Geramar and other Brazil’s investment needs in generation over the next few years will investments in create growth opportunities for Equatorial. generation Geramar thermal plants present an above average rate of return 7
  8. 8. Management Management is composed by professionals with substantial experience in the financial, operational and regulatory areas • CEO of Equatorial from March, 2007 until April, 2010. CFO of CEMAR (2004-2006) and CEO of CEMAR (2007-2010). Currently, he is a partner of Vinci Carlos Piani Partners.Chairman of the Board of • Worked for 6 years at Banco Pactual in the Principal Investments and Corporate Finance divisions Directors • Degree in Computer Science at PUC-RJ and in Business Administration at IBMEC. CFA chartered by CFA Institute in 2003. Concluded the Owner and President Management Program of Harvard Business School in 2008 • CEO of Eletrobrás (1996-2001), CEO and CFO of COELBA (1984-1996) Firmino Sampaio • Former member of the boards of directors of Furnas, Itaipu Binacional, CHESF, Eletrosul, Gerasul, CEMIG, ENERSUL, CEMAT and Light CEO • Degree in Economics at the Federal University of Bahia and postgraduate degree in Industrial Planning at SUDENE/IPEA/FGV • CFO and IRO of Equatorial since 2008. IRO of CEMAR since 2008. Eduardo Haiama • Between 2004 and 2008, Mr. Haiama worked at Banco UBS Pactual on the equities’ research team as senior analyst of the utilities segment. CFO & IRO • Degree in Electric Engineering at USP – University of São Paulo (Escola Politécnica) and MBA at Duke University. CFA chartered by CFA Institute in 2004 • Regulatory Affairs Officer of Equatorial since April 2008 and of CEMAR since August 2006 Tinn Amado • Consulting partner of Amado Consultoria, providing advisory services in economic regulation, also worked at ANEEL for 3 years as an analyst for the Regulatory Affairs Distribution Service Regulation Department Officer • Degree in Electrical Engineering at the Federal University of Itajubá (UNIFEI) and a Master’s degree in Regulation and Protection of Fair Trading at Brasília University (UnB) • Officer of Equatorial since November 2008.Ana Marta Horta Veloso • Worked as an executive at Banco UBS Pactual S.A., from 2006 untill 2008 . Before joining Pactual, she worked for 12 years at the Brazilian Development Bank (BNDES), where she held several executive positions, mostly in the capital market area. Officer • Degree in Economics at the Federal University of Minas Gerais (UFMG) and Master’s degree in Industrial Economics at the Federal University of Rio de Janeiro (UFRJ). 8
  9. 9. PCP Fund History Vinci Partners • In 2001, Banco Pactual created a Principal Investment Unit to manage the partnership’s excess capital and diversify its investments; PRIVATE EQUITY PUBLIC EQUITIES MULTIMARKET • In 2006, with the sale of Banco Pactual to UBS, part MEDIUM TERM LONG TERM SHORT TERM of the proceeds from the sale was reinvested in the Principal Investment Unit, which was renamed PCP; • In 2009, with the sale of Pactual to BTG, Vinci Partners was created, an independent asset management, composed by Pactual’s ex-partners; • Today, Vinci has almost US$ 3.0 billion under management (75% own capital), investing in Private Equity, Public Equities and Multimarket Funds. 9
  10. 10. Agenda►Company Profile►Financial Performance►Portfolio Overview►Value Creation 10
  11. 11. Financial PerformanceSince 2004, Equatorial has been presenting an excellent financial performance. Net Operating Revenues EBITDA (R$ million) R$ million 2.506 2.346 784 757 1.799 368 287 510 1.358 36 24 1.347 416 1.756 379 999 341 470 500 810 879 1.148 112 413 9 629 189 7 526 403 85 109 2004 2005 2006 2007 2008 2009 2010 (*) 1Q11 (*) 2004 2005 2006 2007 2008 2009 2010 (*) 1Q11 (*) CEMAR Light Geramar CEMAR Light Geramar 2004 2005 2006 2007 2008 2009 2010 1Q11 Net Revenue 526 629 810 879 2,346 2,506 1,799 413 EBITDA 85 189 341 379 784 757 510 112 % EBITDA 16% 30% 42% 43% 33% 30% 28% 27% (*) As from 2010, all values are according to IFRS 11
  12. 12. Financial Performance 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010Consolidated Dividends (R$ MM) - 54 108 151 284 51 197 Payout 0% 24% 90% 99% 95% 25% 104% CEMAR - 54 108 112 91 58 200 Dividend Yield N/A N/A 10% 13% 27% 3% 18% Light - - - 27 111 56 - Capital Reduction (holding) - - - - 82 - - * 2008 figure includes R$82 million in Capital ReductionNet Income (R$ MM) 123 229 119 153 300 207 189 CEMAR (31) 234 116 117 148 129 279 Geramar - - - - - - 6 Light - - - - 130 79 - Distributions to Shareholders/Net Income R$ million 300 284 229 207 197 189 151 153 123 108 119 - 54 51 2004 2005 2006 2007 2008 2009 2010 Dividends Net Income 12
  13. 13. Financial Performance Improved operating performance and financial restructuring led to a significant reduction in leverage, Consolidated Net Debt and Net Debt/EBITDA (*) R$ million / Times 4.0 1.6 1.6 1.5 0.9 1.5 0.3 499 494 0.0 402 689 221 198 5 77 2004 2005 2006 2007 2008 2009 2010 1Q11 (*) Consolidated (65.1% CEMAR, 25.0% Geramar and 13.03% Light). Light is no longer consolidated as from 2010. 13
  14. 14. Financial Performance made a longer debt amortization schedule possible… Debt Amortization Schedule - R$ MM Short Term 2012 2013 2014 2015 After 2015 Total CEMAR 201 130 346 119 113 292 1,202 Geramar 66 0 0 0 0 40 106 Total 267 130 346 119 113 332 1,308 106 66 201 Geramar - 130 - 346 1,202 - 119 CEMAR - 113 40 292 Gross Debt Short Term 2012 2013 2014 2015 After 2015 14
  15. 15. Investments and a significant increase in investments. Investments - R$ MM 2004 2005 2006 2007 2008 2009 2010 1Q11 CEMAR 70 232 306 394 465 419 399 80 Light 137 141 Geramar 24 107 16.2 0.2 Total 70 232 306 394 626 667 415 81 24 107 137 141 465 16 419 394 306 399 232 0,2 70 81 2004 2005 2006 2007 2008 2009 2010 1Q11 CEMAR Light Geramar 15
  16. 16. Agenda ►Company Profile ►Financial Performance ►Portfolio Overview ►Value Creation 16
  17. 17. CEMAR: Highlights Energy Sales (2010) RR AP 4,146 GWh 24% AM MA CE PA RN PB PI 46% AC TO PE AL MA RO SE BA MT 20% GO DF 10% MG MS ES SP RJ PR SC Clients (2010) RS 5% 1.8 million 1%7% Distribution company in the State of Maranhão 1.8 million clients (4th largest in the Northeast region)* Billed energy (2010): 4,146 GWh (5th largest in the Northeast)* 87% Annual gross revenues of R$ 2.1 billion in 2010. Residential Commercial Industrial Others *Source: ABRADEE 17
  18. 18. CEMAR: History CEMAR under PPL Global’s CEMAR under control of control Equatorial 1958- Aug.2000- Aug.2002-May May 2004- Jun. 2000 Aug.2002 2004 Present State owned ANEEL’s intervention 18
  19. 19. CEMAR: Ownership Structure Eletrobras Equatorial Energia Others 33.6% 65.1% 1.3% CEMAR 19
  20. 20. Tariff Review Results CEMAR 2005 2009 Gross RAB 1,756 2,247 Net RAB 836 1,121 Reference Company 217 265 Regulatory Depreciation 68 102 Regulatory EBITDA 157 271 Regulatory Losses 28.0% 25.6% Deliquency Rate 0.5% 0.9% X Factor 1.19% 1.06% *All values are nominal and in R$ million. 20
  21. 21. CEMAR: Distribution 2004 2005 2006 2007 2008 2009 2010 (***) 1T11 (***) Energy Sold GWh 2,593 2,793 2,917 3,223 3,347 3,566 4,146 998 Net Revenues R$ MM 495 665 810 879 999 1,148 1,756 402 PMSO R$ MM 127 126 129 126 139 171 245 68 PDA + Contingencies R$ MM 47 20 14 30 32 33 68 10 EBITDA R$ MM 93 189 341 379 415 470 500 109 • 1.8 million clients in 217 municipalities, covering Net Income R$ MM (31) 359 177 222 227 198 279 53 Dividends R$ MM - 85 165 172 140 58 200 - the whole state of Maranhão (total area 333,000 Net Debt R$ MM 362 305 291 421 673 768 499 494 km²) Net Debt / EBITDA times 3.9 1.6 0.8 1.1 1.6 1.6 1.5 1.5 Clients 000 1,161 1,254 1,349 1,438 1,535 1,688 1,822 1,855 PMSO/Client R$/Client 109 101 95 88 90 101 134 36 • Energy sales reached 998 GWh in 1Q11, 3.8% EBITDA/Client R$/Client 80 150 253 264 270 278 274 59 higher than in 1Q10. DEC (*) Hours/Year/Client 63.4 54.6 42.6 28.7 27.3 23.6 21.8 21.5 FEC (*) Times/Year/Client 39.3 32.9 24.6 19.8 16.8 15.2 14.1 12.9 Total Losses (*) % 29.9% 29.5% 29.8% 28.7% 28.9% 25.2% 22.0% 21.6% • In 1Q11, energy losses represented 21.6% of CAPEX R$ MM 45 103 137 199 278 239 197 43 required energy, 2.6 pp less than the 24.2% PLPT (**) R$ MM 25 129 169 195 187 180 202 38 recorded in 1Q10.(*) Last 12 months(**) Light For All Program(***) Values according to IFRS • Service quality has been presenting positive evolution. Since 2003, DEC and FEC indices have dropped 67.3% and 68%, respectively. • More than 284 thousand clients connected by the Light for All Program. 21
  22. 22. CEMAR: Energy Losses Total Losses over Required Energy (last 12 months) 28.7% 28.9% 28.6% 28.9% 28.5% 28.1% 28.1% 26.4% 24.3% 24.2% 25.2% 22.2% 22.2% 22.0% 21.6% 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Regulatory Target Total Losses (from Aug-10 until Jul-11) Non-technical Losses over Low-Voltage Market (last 12 months) 30.4% 30.6% 29.9% 30.0% 29.0% 28.7% 27.3% 21.5% 21.5% 23.7% 19.5% 15.7% 15.7% 15.0% 15.9% 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Regulatory Target Non-technical Losses (from Aug-10 until Jul-11) 22
  23. 23. CEMAR: DEC/FEC 2009 Evolution Comparison Better DEC (hours) FEC (times) COELCE 8 10 COELCE 6 ENERSUL CHESP 12 CELPE 7 COSERN 7 COSERN 13 ENERSUL 7 SULGIPE 14 COELBA 11 CEB 15 SULGIPE 13 CELPE 17 CEMAR 2010 14 CEAL 21 CEAL 14 CELG 21 CEMAR 2009 15 CEMAR 2010 22 CEB 15 CEMAR 2009 24 CELG 16 CEMAR 2008 27 CEMAR 2008 17 COELBA 27 CEMAR 2007 20 CEMAR 2007 29 CEMAT 22 CEMAT 29 CEMAR 2006 25 CHESP 25 CERON 32 30 CERON CEPISA 41 CEPISA 32 CEMAR 2006 42 CEMAR 2005 33 ELETROACRE 45 CELTINS 33 CELTINS 46 CEMAR 2004 39 CEMAR 2005 55 ELETROACR 44 CEMAR 2004 64 CELPA 53 CELPA 102 23
  24. 24. CEMAR: Accident Index – Total Workforce 2009 Frequency Index Severity Index CEMAR 2007 Better 1.0 1.1 CEMAR 2009 1.2 CEMAR 2008 64 CPFL PIRATININGA 73 AMAZONAS 1.4 ELEKTRO 189 CEB 1.8 CEMAR 2005 474 COELCE 1.9 CEMAR 2006 599 CEMAT 2.4 ELETROPAULO 646 CEMAR 2007 2.6 CPFL PIRAT. 656 CELG 2.8 BANDEIRANTE 693 CEMAR 2008 3.1 AMAZONAS 717 ENERGISA SE 3.1 COELCE 736 ELEKTRO 3.9 COELBA 959 ELETROPAULO 3.9 CEEE 963 CEMIG 4.2 CEMIG 1,069 CEMAR 2005 4.2 CPFL PAUL. 1,082 CPFL PAULISTA 4.3 CEMAR 2004 1,083 ENERGISA PB 4.5 CELPE 1 23 ,1 RGE 4.9 CELPA 1,208 LIGHT 5.0 AMPLA 1,302 BANDEIRANTE 5.3 ESCELSA 1,372 COSERN 5.4 LIGHT 1,446 CELPE 5.5 COPEL 1,487 CEMAR 2009 5.8 ENERGISA PB 1,540 AMPLA 5.8 COSERN 1,574 COPEL 6.0 CEB 1,589 CEEE 6.2 RGE 1,843 COELBA 6.6 ENERGISA SE 2,042 CELESC 2,203 CELTINS 6.8 ENERSUL 2,489 ENERSUL 7.6 CELG 2,510 CEMAR 2004 7.6 CEMAR 2003 2,918 CEMAR 2003 7.7 CEPISA 3,229 ESCELSA 8.7 CELESC 4,010 CELPA 19.1 CEMAT 4,591 CEMAR 2006 20.6 CELTINS 24
  25. 25. Geramar: Ownership Structure Ligna Servtech 50% 50% Fundo de Equatorial GNP Investimento em Energia Participações Brasil 50% 25% 25% Geramar 25
  26. 26. Geramar: Highlights • Two thermoelectric power plants fueled by high-viscosity heavy oil. • Location: Miranda do Norte, Maranhão. • Joint installed capacity of 331 MW. • 240 MW of energy sold at the A-3 auction in 2007. • Total fixed annual revenue (for both plants) of R$ 136 million* (in R$ of 2007), during 15 years. *Revenues adjusted by inflation (IPCA) • Start-up: January of 2010 • Total CAPEX: R$ 550 million. • Equatorial’s share of CAPEX (25%): R$137 million. Equity = approximately R$45 million. 26
  27. 27. Agenda►Company Profile►Financial Performance►Portfolio Overview►Value Creation 27
  28. 28. Agenda Financial strength and solid Growth prospects and management team with consolidation opportunities turnaround experience Result-oriented management High level of model Corporate Governance 28
  29. 29. Contacts Firmino Sampaio CEO Eduardo Haiama CFO and IRO Thomas Newlands IR Analyst Phone 1: 55 21 3206-6635 Phone 2: 55 21 3206-6607 E-mail: ir@equatorialenergia.com.br Website: http://www.equatorialenergia.com.br/ir 29
  30. 30. Disclaimer► This presentation may contain forward-looking statements, which are subject to risks and uncertainties, as they were based on the expectations of Company’s management and on available information. These prospects include statements concerning the Company’s current intensions or expectations for our clients.► Forward-looking statements refer to future events which may or may not occur. Our future financial situation, operating results, market share and competitive positioning may differ substantially from those expressed or suggested by said forward-looking statements. Many factors and values that can establish these results are outside Company’s control or expectation. The reader/investor is prevented not to completely rely on the information above.► The words “believe", “can", “predict", “estimate", “continue", “anticipate", “intend", “forecast" and similar words, are intended to identify estimates. Such estimates refer only to the date in which they were expressed, therefore the Company has no obligation to update said statements.► This presentation does not consist of offering, invitation or request of subscription offer or purchase of any marketable securities. And, this statement or any other information herein, does not consist of a contract base or commitment of any kind. 30

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