Investors Presentation_March2013_site

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Investors Presentation_March2013_site

  1. 1. INVESTORS PRESENTATION 2013 INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A.V.05.13
  2. 2. LEGAL DISCLAIMER This material is not to be construed as an offer and/or advice and/or solicitation for the subscription or purchase of any securities and shall not be interpreted as such in any jurisdiction. The information presented by Investimentos e Participações em Infraestrutura S.A. - INVEPAR (“Company”) and included in this material is solely for informational purposes and shall not be used under any situation for basis of investment decision in securities. The Company and its legal representatives make no representation or warranty, either express or implied, as to the information provided in this material, including but not limited to in relation to the accuracy, sufficiency, reliability or completeness of the information or opinion contained herein, and will not accept liability for the use of this material by anyone. The forward-looking statements contained in this presentation are based on the current assumptions and outlook of the Company’s management. Actual results, performance and events may differ significantly from those expressed or implied in these forward-looking statements as a result of several factors such as the general and economic conditions in Brazil and abroad, interest and exchange rates, future renegotiations or pre-payments of liabilities or loans denominated in foreign currency, changes in laws and regulations, and general competitive factors (regionally, nationally or internationally).INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A.
  3. 3. KEY INVESTMENT HIGHLIGHTS High Quality portfolio of long-term Strong Favorable industry concessions investment and dynamics of the operational track Brazilian record infrastructure sector Significant Strong growth opportunities in the business Transport model with attractive Infrastructure Seasoned returns and inflation Sector management and protection solid shareholder structureINVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 3
  4. 4. BRAZILIAN INFRASTRUCTURE HAS SIGNIFICANTLYLAGGED GLOBAL BENCHMARKS INFRASTRUCTURE PENETRATION IN EMERGING MARKETS IS ~10 TO 20 TIMES LOWER THAN IN MATURE MARKETSHIGHWAYS AIRPORTS PORTS SUBWAYS% of paved 1,000 TEUs/ Km/millionhighways Pax/inhabitant per capita inhabitants Austria 100 UK 2,0 Malasia 642 Mlebourne 59.2 Denmark 100 Canada 2.0 South Korea 375 Madrid 43.8 France 100 Germany 1.4 Spain 274 Berlin 33.7 Israel 100 Spain 1.3 Sri Lanka 198 London 32.9 UK 100 France 1.0 Germany 179 Paris 20.3 Turkey 89 Malasia 0.9 Italy 162 Moscow 18.9 Japan 80 South Korea 0.9 Japan 142 Chiacago 17.7 South Korea 79 Italy 0.8 Canada 141 Montreal 17.4 Poland 70 Japan 0.7 USA 136 Milan 16.5 Servia 63 Chile 0.6 UK 119 New York 15.7 Indonesia 57 Russia 0.4 China 97 Beijing 14.0 Australia 43 Brazil Brazil 0.4 Thailand 96 Toronto 14.0 Hungary 38 Colombia 0.3 France 82 Santiago 9.8 Ivory Coast 26 Thailand 0.3 South Africa 76 Mexico city 8.7 Sweden 24 China 0.2 Brazil Brazil 42 Delhi 8.2 Chile 22 Indonesia 0.1 Indonesia 35 Osaka 7.7 Brazil Brasil 13 Sri Lanka 0.1 Mexico 33 Tokyo 5.7 Nicaragua 12 Mexico 0.1 Poland 27 São Paulo São Paulo 3.5 Bolívia 8 India 0.1 India 8.0 Buenos Aires 3.4 59 0.7 151 18Source: World Bank; DNIT, McKinsey, ABCR INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 4
  5. 5. INVESTMENTS WERE NOT ENOUGH IN THE PAST BUTARE BOOSTING IN THE FUTURE THE LEVEL OF INVESTMENT IN INFRASTRUCTURE IS REBOUNDING IN BRAZILInvestment in infrastructure% of GDP 5 Years Forecast 5.4 2.1 Transportation Electricity 3.7 R$ 287 bn* R$ 142 bn 0.8 1.4 2.4 2.4 2.2 0.5 0.7 0.9 0.8 2.0 0.8 0.5 Telecom Water & Sewage 0.6 1.5 R$ 98.5 bn R$ 85 bn 0.6 0.6 0.8 0.5 0.3 0.3 0.2 0.2 1970-79 1980-89 1990-99 2000-09 2010-11 Water & Sewage Transportation Telecom Electricity * Invepar estimates: Toll Roads (R$ 51.5 bn), Railways (R$ 60 bn), Ports (R$ 54.2 bn), Airports (R$ 20.7 bn), Urban Mobility (R$ 66 bn) and High Speed Rail (R$ 35 bn) Sources: World Bank, IPEA and BNDES (“Investimentos na Infraestrutura Nacional”, Oct. 2012), PAC 2, Ministry of Transportation, Research Reports (October , 1st 2012), ABDIB, Ministry of Finance (ISTOÉ Dinheiro – Feb, 2013)INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 5
  6. 6. INVEPAR AT GLANCE – GREAT COMPANY, EVENGREATER POTENTIALCOMPANY OVERVIEW 25.6% 25.0% 25.0% 24.4%  Strong sponsorship: controlled by the 3 biggest pension funds and one of the top 5 construction companies in Brazil  Portfolio of high quality and diversified concessions with a focus on transport infrastructure  Combination of strong growth potential within a solid and well tested regulatory framework TOLL ROADS AIRPORTS URBAN MOBILITY PORTS 8 concessions  GRU AIRPORT, the  MetrôRio, the Largest  Currently studying 1,027 km of toll roads Busiest airport in Latin private operator in Brazil opportunities on the 147 million paying vehicle America  41 km of extension segment equivalents in 2012  33 million PAX in 2012  186 million PAX in 2012INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 6
  7. 7. INVEPAR IS A LEADING COMPANY IN THE TRANSPORTINFRASTRUCTURE SECTOR VISION, MISSION AND VALUES VISION VALUES To be the leader and Our operations are based on best international reference in the corporate governance practices and transport infrastructure sector we value  Personnel and teamwork  Honesty MISSION  Corporate social responsibility  Entrepreneurship To provide and operate  Commitment transport  Respect infrastructure services with  Innovation excellence and generate results that exceed the expectations of society, customers and shareholdersINVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 7
  8. 8. THE FASTEST GROWING COMPANY IN THE MARKET SINCE 2008 NUMBER OF 2 4 6 7 10 10CONCESSIONS 1998 2000 2009 2010 2011 2012 2013 Concession 100% 91.5% 100% 50% 50% 46% extension +10years 100% 100% 25% Trans- Concession olímpica 33.3% extension + 15years Line 4 RJ 100% * The acquisition process is dependent on conditions precedent (CP) and is expected to occur in 2016. Subway* Until then, Metrobarra S.A. (100% subsidiary of Invepar) will provide rolling stock material and systems to Line 4. INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 8
  9. 9. STRATEGIC ACHIEVEMENTS IN 2012 Invepar has started its internalization process International through the acquisition of a toll road in Lima, Expansion Peru. Invepar attained its strategic goal of entering the Entrance on Airport airport industry by winning the bid to manage Sector and operate Guarulhos Int. Airport, in Sao Paulo, the busiest airport in LatAm. Established Player Invepar’s track record in Public Interest Expression development includes CRA for Public Interest Via Expressa concession in Pernambuco, and the recent Expression (PMI*) success in winning the bid to build, operate and Transolímpica projects maintain Transolímpica toll road. Exclusive Subway Call option agreement to operate and maintain Line 4 (16km extension) reinforces Line 4 Operator in Rio de Invepar as the sole operator of Rio de Janeiro’s RJ Subway ** Janeiro subway system. Expected acquisition in 2016.* PMI – Public Interest Expression: legal instrument through which the private sector develops feasibility studies for projects of public interest, showinga proactive approach and creating competitive advantage** The acquisition process is dependent on conditions precedent (CP) and is expected to occur in 2016. Until then, Metrobarra S.A. (100% subsidiary ofInvepar) will provide rolling stock material and systems to Line 4.INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 9
  10. 10. INVEPAR HAS A DIVERSIFIED PORTFOLIO,… DIVERSIFIED BY LOCATION DIVERSIFIED BY SEGMENT 8 Urban Toll 3 Roads 45km 2046 50% 25km 2049 100% 5 1 1 121km 2035 50% Toll Roads Airports Urban Mobility DIVERSIFIED BY 444km 2039 100% 217km 2035 91.5% GRANTING AUTHORITY 5 3 2 n.a. 2032 46%* 41km 2038 100% Federation State Municipality Transolímpica143km 2021 25% Line 4 The majority of Invepar’s assets 13km 2047 33.3% RJ Subway ** is located in the states with the largest participation in the 16km 2036 100% Brazilian GDP – SP (33.1%), RJ (10.8%), BA (4.1%) Toll road Extension 20km 2037 100% Source: IBGE, 2010 End of Urban Mobility concession * Invepar owns 90%of Aeroporto de Guarulhos ** The acquisition process is dependent on conditions % Invepar’s Participações S.A., which owns 51% interest in precedent (CP) and is expected to occur in 2016. Until then, Airport share Guarulhos Airport Metrobarra S.A. (100% subsidiary of Invepar) will provide rolling stock material and systems to Line 4. INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 10
  11. 11. …WITH ATTRACTIVE AND HIGH QUALITY ASSETS Concessioná- Concessioná- Concessioná- Concessioná- ria Auto Linha Amarela Bahia Norte Via Expressa ria Rio- ria Rota do Via Parque Guarulhos ria Litoral Raposo MetrôRio (LAMSA) (CBN) Transolímpica Teresópolis Atlântico Rímac (VPR) Airport (GRU) Norte (CLN) Tavares (CRT) (CRA) (CART) Concession type Network length (km) 20 217 444 121 13 143 45 25 41 n/a Key characteristics Location Employees (2012) 412 168 622 474 11 332 38 69 2,429 462 Invepars share 100.0% 91.5% 100.0% 50.0% 33.34% 25.0% 50.0% 100.0% 100.0% 46.0% Grupar 51.0% Carioca (21.4%) Shareholder (90.0% Invepar Strata (16.6%) structure 1 1 OTP1 (33.3%) and 10.0% Equity partners (stake) - OTP (8.5%) - OTP (50.0%) QG2(11.9%) OTP1 (50.0%) - - CCR (33.3%) ACSA) CRT FIP3 ACSA (5.0%) (11.0%) Infraero6 (49.0%) Development stage Maturity Growth Ramp-up Ramp-up Construction Maturity Ramp-up Ramp-up Growth Growth Concession period Dec’97-Dec’37 Mar’00-Mar’35 Mar’09-Mar’ 39 Aug’10-Aug’35 Apr’12-Apr’47 Mar’96-Mar’21 Jul’11-Jul’46 Nov’09-Nov’49 Jan’98-Jan’38 Jul’12-Jun’32 Concession Tenor 404 35 30 25 35 25 35 405 40 20 term Remaining life 24.84 22.0 26.0 22.4 34.1 8.0 33.3 36.65 24.8 19.2 (as of Mar’13) Concession maturity (%) 38.0%4 37.1% 13.3% 10.4% 2.6% 68.0% 4.9% 8.5%5 38.0% 4.0% Volume VEPs/MPAX (2012) 49,422 6,999 47,043 28,195 n/a 15,707 n/a n/a 186.0 MPAX 32.8 MPAXNotes:1.Odebrecht Transport2.Queiroz Galvão3.CRT Fundo de Investimento em Participacoes4.In 2010 the concession was extended by 15 years5.In 2013 the concession was extended by 10 years6.State-owned company INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 11
  12. 12. STRONG AND PROVEN ORIGINATION TRACK RECORD PROVEN ORIGINATION CAPABILITY THROUGH DIFFERENT FORMATS DIFFERENTIATED  REMARKABLY POSITIONED in Brazil TRACK RECORD  Urban Mobility: the largest private APPROACH operator  Airport: the best asset class Contract AmendmentsORGANIC  PIONEER AND INNOVATIVE COMPANY through Public Interest Expression practice New Business Opportunities On going works in all (Proactive approach creates competitive within Current Assets concessions advantage)  LONG-TERM VALUE assets with Attractive IRR Public Tenders Average remaining term (years)INORGANIC Public Interest Via Expressa Transolímpica 25 22 Expression (“PMI”) 16 14 13 M&A Line 4 Invepar Triunfo CCR Arteris Ecorodovias RJ Subway* Note: Invepar`s analysis as of February 2013 (arithmetic average) * The acquisition process is dependent on conditions precedent (CP) and is expected to occur in 2016. Until then, Metrobarra S.A. (100% subsidiary of Invepar) will provide rolling stock material and systems to Line 4. INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 12
  13. 13. ASSETS ARE STILL RAMPING UP Toll Roads Urban Mobility Airports Number of Paying Passengers Transported GRU AIRPORT (million of PAX and Vehicle Equivalents (in million) MetrôRio (in million) thousands of tons of cargo) 395 441 586 507 186 33 147 180 30 130 27 164 12 106 22 11 152 10 9 53 19 21 13 17 2009 2010 2011 2012 2009 2010 2011 2012 2009 2010 2011 2012 Domestic International cargo Invepar assumed the concession in Nov´12  Brownfields are performing above  19 new trains to be fully  Construction of new T3 alreadyHighlights expected: LAMSA, CLN and CRT operational in 1Q 2013 (12 begun  Greenfield projects in ramp-up: already part of the fleet in  T1 & T2 Refurbishment CART, Bahia Norte and Via Parque December) that will increase  Real estate developments Rímac capacity in more than 60%  Commercial and cargo exploration  CRA will start operations in the  1 new station in 2010 areas 1H 2013  1 new station under construction:  36 new aircraft parking spaces  Transolímpica is under construction Uruguai (1Q 2014)  New car parking spaces (from 4,100 for 1H 2016 to 10,000) INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 13
  14. 14. DELIVERING A STRONG GROWTH NET REVENUES (in R$ million) 1.285 IF GUARULHOS AIRPORT HAD BEEN 905 CONSOLIDATED IN 2011, THE SPLIT IN 740 NET REVENUES WOULD HAVE BEEN: 469 156 35% Toll Roads 30% 2008 2009 2010 2011 2011e pro forma* Urban Mobility Airports EBITDA & EBITDA Margin 554 35% (in R$ million) 345 2011 GUARULHOS NET REVENUES: R$ 825.4 MM 260 Invepar’s share (46%): R$ 379.7 MM 43.1% 123 38.1% 103 35.1% 65.8% 26.2% 2008 2009 2010 2011 2011e pro forma** pro forma** Net Revenues 2011e pro forma and EBITDA 2011e pro forma consider 46% consolidation of Guarulhos Airport** EBITDA 2010 pro forma excludes the impact of Provision Reversal of IPTU (municipal urban property tax) in Metrô Rio Income Statement. 2010 EBITDA was R$ 304 MM(41% of EBITDA Margin);.Notes: Net revenue and EBITDA shown are net of the impacts of the IFRS. INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 14
  15. 15. REVENUES AND EBITDA MARGIN WILL CONTINUE TOGROW AS THE PORTFOLIO MATURES EBITDA MARGINS IMPROVE OVER THE LIFE OF CONCESSIONS 100% Expected margin in the mid/long term 90% 80% Airports 75%  Well-balanced portfolio 70% 70% LAMSA from a life-cycle Toll Roads 65% 60% GRU 60% perspective CRT Urban AIRPORT2 55%% EBITDA margin 50% Mobility 50%  Average remaining life of c.25 years 40% CART  Significant potential MetrôRio 30% from numerous assets in construction and 20% ramp-up phase CLN 10%  Substantial cash flow from concession in 0% CBN CRA Transolimpica Assets under construction will Strong increase in revenues Mature concessions with high growth phase VPR enable sustained future growth and profitability in the future profitability and long remaining life -10% Award 10% 20% 30% 40% 50% 60% 70% 80% 90% Reversion % concession maturity¹ Concessions under construction Ramp-up stage concessions Growth stage concessions Mature concessions Notes: The size of the bubbles represents proportional 2011 net revenues (Including GRU Airport proforma). Net Revenues and EBITDA margin net of the impacts of the IFRS 1 Years elapsed over total years of concession 2 GRU Airport proforma: For 2011, net revenue was based on Infraero’s performance.INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 15
  16. 16. LONG TERM DEBT PROFILE IN LOCAL CURRENCY DEBT PROFILE AMORTIZATION SCHEDULE – 3Q12 (in R$ million) (in R$ million) Short Term 2,957 2,821 2,651 3T12 - 1T13 545 19% 2,063 2T13 - 4T13 32 1% R$ 750 million debenture 74% 2014 262 9% issuance from CART toll road 77% 80% 62% in 4Q12 refinanced 2015 155 6% approximately R$ 400 million of short term debt 23% 38% 26% 20% 2016 173 6% 4Q11 1Q12 2Q12 3Q12 2017 158 6% Short Term Long Term 2018+ 1,496 53% NET DEBT DEBT PROFILE – 3Q12 (in R$ million)5000 8 Index Source Currency 6.14000 Other BNDES Peruvian 6 TR TJLP 15% 34% Nuevo Sol3000 3.7 23% 3.1 4 34% 15%2000 2.41000 2,073 2 905 1,139 1,360 Inflation Brazilian 0 0 and others CDI Bonds Real 4Q11 1Q12 2Q12 3Q12 24% 19% 51% 85% Net Debt Net Debt/EBITDA INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 16
  17. 17. COMMITTED SHAREHOLDERS WITH STRONGLYALIGNED INTERESTS SHAREHOLDER STRUCTURE WITH THREE OF THE BIGGEST BRAZILIAN PENSION FUNDS AND A CONSTRUCTION COMPANY WITH MORE THAN 30 YEARS OF EXPERIENCE WITH GREAT INVESTMENT CAPACITY Ranking of Pension Funds in Brazil (2011) PREVI 156 The largest pension fund in Latin America PETROS 58 and 25th in the world, by assets. Its main FUNCEF 48 sponsor is Banco do Brasil CESP 19 VALIA 15 IT AU UNIBANCO 13 SISTEL 13 The second largest pension fund in Brazil. BANESPREV 10 Its main sponsor is Petrobras REAL GRANDEZA 10 FORLUZ 10 Assets Under Management (R$ billion) Source: ABRAPP The third largest pension fund in Brazil. Its main sponsor is Caixa Econômica LONG-TERM COMMITMENT WITH INVEPAR Federal CONTINUOUS SUPPORT WITH THE ACQUISITION OF NEW PROJECTS One of the top 5 players in the heavy construction sector in Brazil and other countries WILLINGNESS TO STAY IN THE SHARE- HOLDER STRUCTURE AFTER THE IPOINVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 17
  18. 18. SUPPORTED BY A ROBUST CORPORATE GOVERNANCEMODEL  Investment Analysis  GHG Inventory (2013E) Board comprised of 8 members  Development of  GRI Guidelines for Operational Monitoring communication Metrics  Assisted realocation of Fiscal Council  ERP System families policy Professional Management  Board’s segregation (CEO and Chairman) Constituted advisory committees linkedto the Board of Directors Corporate Governance & Sustainability: Investments and Areas of Internal Audit Financial Support Area dedicated Report to the relation- Civil Works HR & Governance directly to ship with the Board of investors and Dept. of Corporate Directors the capital Governance Code of Ethics markets Official Channel of Invepar is registered in the A category Communication between thein CVM and discloses its financial Shareholders, the Board ofstatements as a publicly-traded company Directors and the Company INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 18
  19. 19. SEASONED MANAGEMENT TEAM PEOPLE-ORIENTED COMPANY  Executive Management Team with extensive experience in infrastructure in Brazil  Average of 26 years of work experience, with 17 years in the infrastructure sector  Over 7,800 direct1 and 6,200 third-parties employees  Focus on hiring, retaining and developing people:  Second year of Trainee Program  Innovation Incentive Plan  Succession Career Plan  Leadership Development Program, among others  Job Rotation Practice  Compensation policy aligned with best practices  Long-term executive compensation aligned with shareholders interest and best market practices1 2013 Forecast, including GRU Airport, Via Parque Rímac and CRA headcounts INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 19
  20. 20. DIFFERENTIATED APPROACH TO NEW OPPORTUNITIES INVEPAR’S INVESTMENT DECISIONS ARE ORIENTED BY CLEAR STRATEGIC GUIDANCEGUIDING PRINCIPLES FOR NEW INVESTMENTS Focus on countries with stable regulatory framework and economic environment Participation in the controlling block Long term investments Preference for Greenfield opportunities Opportunistic Acquisitions Capturing value from correlated business INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 20
  21. 21. EXPECTED INVESTMENT IN THE NEAR FUTURE BRAZILIAN GOVERNMENT WANTS TO FULFILL THE LACK OF INVEST-MENT IN DIFFERENT TRANSPORT INFRASTRUCTURE SECTORS Toll Roads Airports  Potential to more than double the granted kms of  The Government has launched the second round the concessioned toll roads of airports concessions. Auction has been  Announced federal investments: R$ 42 bn scheduled for Sep 2013 investments and 7.5 thousand kms  Announced investments R$ 6.6 bn at Galeão, R$  The State of São Paulo is studying the concession 4.8 bn at Confins and R$ 7.3 bn in 270 regional of all 15 thousand kms under its jurisdiction airports Urban Mobility & Ports High Speed Rail  The Federal Government has launched a new regulatory framework for Ports Concession  Announced federal investments for urban mobility through PAC: R$ 39 bn  Announced investments: R$ 54 bn until 2017  Additional investments in urban mobility in São  Concession biding process for 5 public ports Paulo, Rio de Janeiro, Brasília, Fortaleza, among starts in 2013 others  New bids for terminal leasing in public ports and  High Speed Rail project connecting São Paulo to for the construction of new private terminals Rio de Janeiro (TUPs)Source: Federal Government and Invepar`s analysis INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 21
  22. 22. OPPORTUNITIES IN THE TOLL ROAD SECTOR FEDERAL GOVERNMENT RECENTLY ANNOUNCED A NEW PACKAGE OF HIGHWAY CONCESSIONS OF MORE THAN R$ 42 BILLION INVESTMENTS IN 7.5 THOUSAND KM Announced concessions Announced Federal Concessions Projects Highlights 9 lots in 5 different states. The winner will be the one offering 1 BR 101 ES/BA the lowest toll tariffs. 2 BR 262 ES/MG 3 Investment concentrated in the first 7 3 BR 153 GO/TO 5 years of concession. 1 4 BR 050 GO/MG 9 Urban traffic will not be tolled. 5 8 5 BR 060/153/262 DF/GO/MG Toll collection will only be allowed after 2 6 10% of construction works are 6 BR 163/267/262 MS 4 concluded. 7 BR 163 MT 30-years term and implicit unlevered 8 BR 040 DF/GO/MG IRR 5.5% (government studies). 9 BR 116 MGSource: Federal Government INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 22
  23. 23. OPPORTUNITIES IN THE URBAN MOBILITY SECTOR SEVERAL URBAN MOBILITY PROJECTS UNDER DEVELOPMENT IN BRAZIL, DRIVEN BY THE GLOBAL EVENTS THAT WILL TAKE PLACE IN BRAZIL IN THE NEAR FUTUREProjects Highlights Main Urban Mobility Projects 1 Fortaleza, CE Large global events are boosting the ▪ Line East projects (World Cup and Olympic 2 Recife, PE Games). ▪ Urban Mobility 3 Salvador, BA Structured mostly in the PPP model. ▪ Subway System 1 4 Belo Horizonte, MG 2 The private sector has actively ▪ Subway Expansion participated on the structuring 5 Rio de Janeiro, RJ of projects through Public Interest ▪ Line 3 3 Expression (“PMI”). ▪ LRT 9 6 São Paulo, SP 7 Curitiba, PR 10 ▪ Lines 6 ▪ Line Blue 4 Public funds will be used under the ▪ Line 13 (Express Airport and 8 Porto Alegre, RS PAC Urban Mobility, Federal Budget local service) 5 ▪ Lines 15, 17 and 18 ▪ Line 2 6 and under financing programs of 7 (monorails) BNDES and CEF. 9 Distrito Federal ▪ Line 20 ▪ LRT ▪ Express ABC (close to Line 8 10) 10 Goiânia, GO ▪ Interstate trains: Sorocaba- ▪ LRT Pindamonhangaba andLRT – Light Rail Transit (synonym: TRAM) Santos-Americana INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 23
  24. 24. OPPORTUNITIES IN THE AIRPORT SECTOR THE GOVERNMENT HAS LAUNCHED THE SECOND ROUND OF AIRPORTS CONCESSIONSProjects Highlights Potential Opportunities The Federal Government began the concession process for Galeão and Additionally, São Paulo State Confins International Airports. should lead a privatization process of the state owned Investments are expected to reach airports R$ 6.6 bn at Galeão (RJ) and R$ 4.8 bn at Confins (BH). Auction has been scheduled for Sep 2013. Saturation 7 PAX in 2012 Airports level Million The new model requires large % 5 airport operators (at least 35MM 1 Galeão 1 17.5 101 PAX p.a.), with a minimum 25% stake 3 2 Congonhas 16.8 140 in the winning consortium. 2 3 10.2 4 Another R$ 7.3 bn should be invested Confins 100 1 2 3 in 270 regional airports. 4 S. Dumont 4 9.0 105 Infraero Serviços, subsidiary of Infraero, was created to offer airport 5 Salvador 5 8.5 81 6 management services to other 6 P. Alegre 6 8.3 63 airports outside Infraero’s network. 7 Recife 7 6.4 80 Source: InfraeroINVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 24
  25. 25. ANNEXINVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A.
  26. 26. GREAT ENTRANCE ON AIRPORT SECTOR: GRU AIRPORTKEY INVESTMENT HIGHLIGHTS A unique  Scarcity of such high quality asset in the current environment investment  Strong cash generation (EBITDA margin of 53.8% in 2011) opportunity Favourable  Brazil will be the fifth largest consumption market in 2020 economic  Air travel market benefits from a growing middle class and first-time fliers framework  Open Skies agreements will bring more dynamism and competitiveness to the market Attractive  10th largest city in the world by GDP geographic  #1 entry point to Brazil and gateway to Latin America location  Large and economically attractive catchment area  Largest airport in LATAM with a passenger throughput of 32.8 MPAX in 2012 Solid positioning - Substantial international traffic component (35.2% of total) with transfer hub  Solid and diversified customer base and major hub for national carriers potential  Wide destination coverage  Strong historical traffic growth (2003-12 CAGR of 12%) with relative resilience Strong long term throughout the recent economic downturn traffic growth  Underlying macro-economic fundamentals of Brazil should continue to drive growth prospects going forward Diversified and  Underexploited commercial activity (duty free, car parking, real estate, advertising, resilient revenue food & beverage and traditional retail) streams  Significant potential to streamline activities and improve efficiency Huge efficiency  Operational transfer from public to private sphere improvements  New IT solutions with fully integrated systems potential  R$ 2.9 bn CAPEX program to be achieved over the 2012-14 period in order to: Focussed capex  Increase capacity to accommodate future growth program  Improve commercial and cargo performance  Enhance passenger experience INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 26
  27. 27. GRU AIRPORT: ATTRACTIVE PRICE, WITH A STRONG GROWTH POTENTIAL Bid value adjustment1 Implicit Multiples2 Comments (in R$ million)  Payment diluted throughout the 20 years of the 10-11x $16,213 concession, no up-front $6,332 disbursement 6-7x $3,359 $6,521  R$ 16.2 bn bid paid by the $9.881 Concessionary (SPV) $6.521  Source of funds: Equity, Bid Value Present Value of Present Value of Bid Present Value Adjusted Bid Value / Adjusted Bid Value / Bid Bid Tax Shield Net of Tax Benefit 2013 EBITDA 2015 EBITDA Debt and Operational Cash 3 Flow Precedent Transactions Multiple (EV / LTM EBITDA) 34.0x 32.1x 28.0x 29.3x 23.8x 21.3x 21.0x 20.8x 1 x 9.1 18.2xMedian: 16.6x 17.0x 16.8x 16.7x 16.2x 15.2x 15.2x 14.8x 14.5x 15.2x 14.9x 12.3x 13.3x 1 x 3.1 1 x 3.1 10.6x 1 .9x 1 10.3x 1 .7x 1 10.5x 10.9x 4 7.9x 9.1x 9.1x 6.4x NA Oct- Jan- Feb- M ay- M ay- M ay- Jun- Jul- Sep- No v- No v- No v- Dec- Sep- Sep- Oct- M ay- Sep- Oct- Jun- Oct- Oct- Oct- Oct- Oct- Oct- M ar- A pr- A ug- No v- Dec- Dec- Dec- Jan- 06 07 07 07 07 07 07 07 07 07 07 07 07 08 08 08 09 09 09 10 10 11 11 11 11 11 12 12 12 12 12 12 12 12 Copenhagen Birmingham Edinburgh GRU ANA Budapest Charleroi Brisbane Northern Brussels Bradford Gatwick London Sydney Sydney Oxfordt Naples Belfast Hobart Airport Airport Devon Exeter Bristol Leeds APAC Pertht DCA Turin Peel BAA BAA SEA BAA BAA SEA TAV AdR City TargetValue(In € bn) 24.5 1.1 0.1 6.4 0.2 1.9 1.4 4.2 0.1 0.7 NA NA NA 0.2 0.2 1.2 0.1 0.4 1.7 NA 0.2 NA 20.8 NA 1.6 NA 3.0 1.0 21.3 21.3 1.4 0.1 3.1 2.5 5 (1) Assumes a 4.5% inflation, discount rate of 10%, 20 years of concession and 34% of tax rate. (2) Consider 2013e and 2014e EBITDA. (4) Consider 2012e EBITDA. (3) Source: Company filings, Wall Street Research, Mergermarket and Press. (5) 2.56 R$ per €, as of March 5, 2013. INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 27
  28. 28. GRU AIRPORT: IN-PLACE GROWTH OPPORTUNITIES NON-AERONAUTICAL SHARE IN THE MIX TENDS TO GET BIGGER, LEADING TO BETTER MARGINS. Space increase: New Slots TPS1/2: +2,100m2 Headway Allocation Strategy TPS 3: 5,000m 2 Tariff Maximization Adjusted to Market Practices Shopping Mall  Reduction from 5 to 3 nautical miles Concept: Better Attraction of New  Mix and Location Sales Concession Space increase  Airlines - From 30 to 60 MPAX in the long term Fee Fees Renegotiation Sales Runways & Volume Taxiways Passengers Improvements Duty Free Concession Total Spots: - Forecasts in line Fees 4,100  10,000 (2014) with Government`s  20,000 (End) Duty Paid -PAX higher New Garage:  New Terminal than estimated for 2012 2,600 spots with Capacity to 12 Aeronautical Non-Aeronautical in the Business  mm PAX in 2014 Revenues Revenues New Spots Space Plan Optimization:  500 spots Revenue Mix Revenue Mix Parking Space optimization From 65% (2011) to 40% (Long Term) From 35% (2011) to 60% (Long Term)  Premium Spots and productivity Volume Pricing  Price increase Real Cargo Estate Optimization  Handling Others Cargo New to Market Rationalization of the Developments Two new Hotels: Tariffs Policy New -Airside: 50 rooms Storage Services - Landside: 350 rooms Attraction of New Two business Airlines (Belly Cargo) Value-added towers  Done / in conclusion Attraction of More Advertising, services (e.g. Conclusion in 2014 Cargo Aircrafts VIP Lounges, road transport) Ultra Vip Service Conclusion in 2015 RecurrentINVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 28
  29. 29. COMPETITIVE DIFFERENTIAL IN PMI STRUCTURING THERE ARE FEW PLAYERS ABLE TO STRUCTURE A PMI PROJECT, ESPECIALLY IN THE SEGMENT OF URBAN MOBILITY IN BRAZIL Macroeconomic environment Legal and Regulatory Framework Political environment Authorization to conduct the studies Opportunity Project Governmental Decision Public Auction Identification Structuring Appraisal to Proceed  New Business  Technical studies  Adherence to  Edict Publication Prospection  Institutional modeling Regulation and Laws  Strategic Analyses (concession, PPP)  Public Interest Analysis  Risk assessment  Internal Approvals  Economic and financial analyses  Bankability Development Average Period Before Public Auction: 1.5 to 2.5 years 30-45 days on average Expenses with studies are reimbursed in case of PMI developer loses the auction Win/ Win Situation Successful cases in the structuring of Invepar Government PMIs and winning the Public Auction: Enhances relationship at different  Catalyzes the agenda of levels of the government investments in infrastructure Via Expressa More attractiveness of the project  Solution to bottlenecks in the More time to study the project, industry Transolímpica resulting in better understanding  Enhancement of the quality of Definition of qualification and the projects, ensuring interest financial criteria of the bidders from private sector There are other PMIs that Invepar is developing in the Urban Mobility and Toll Roads segments PMI – Anachronism for “Procedimento de Manifestação de Interesse” in Portuguese INVEPAR – INVESTIMENTOS E PARTICIPAÇÕES EM INFRAESTRUTURA S.A. 29

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