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Anual brasil J.P Morgan

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Anual brasil J.P Morgan

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Anual brasil J.P Morgan

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  2. 2. 2 Summary Energy market overview CPFL Energia – Highlights and Results 2
  3. 3. 3 Brazilian market has 64 distribution’s companies Spreading proposes consolidation opportunities Distribution Business – 2007 13% 12% 9% 8% 7% 6% 5% 4% 2% 35% CPFL Energia Brasiliana Energia Cemig Neoenergia Copel EdB Celesc Ashmore Energy Energisa Others Distributors (#) 64 61Clients (million) • The 5 largest groups have 50% of market-share • State-owned companies: 34% • Private Company: 66% Market Breakdown Distributed Energy (TWh) 376.9 Market Share1 (%) 1) ANEEL – Ref. 1Q08 annualized (Recalculation of CPFL’s participation)3
  4. 4. 4 Brazilian market has 1,695 hydroelectric plants. The public sector concentrates 70% of the assets Generation Business – 1Q08 Hydroelectric plants (#) 1,695 108,852Installed Capacity (MW) • The 6 largest groups have 50% of the market • State-owned companies: 70% • Private Company: 30% Market Breakdown 10% 9% 9% 7% 7% 6% 6% 4% 4% 3% 2% 2% 31% Chesf Furnas Eletronorte Cesp Itaipu Cemig Tractebel Copel Petrobrás AES Tietê Duke CPFL Energia Others Market Share (%) Source: Aneel – last information available Market breakdown: Acende Brasil 4th largest private generation company in Brazil 4
  5. 5. 5 Summary Energy market overview CPFL Energia – Highlights and Results 5
  6. 6. 6 CPFL Energia – Highlights • Brazilian’s largest player in distribution and commercialization businesses • Energy market is concentrated in the most developed regions of Brazil (South/Southeast) • CPFL is listed in the Novo Mercado in Bovespa and ADR level III in NYSE • Differentiated Dividend Policy: payment of 50% of the net income on a semi-annual basis • 100% hydraulic generation portfolio, with a strong growth in the 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%) and Lajeado HPP’s stake (7%) in the last 2 years, with a R$ 1.1 billion investment • First company in the Brazilian electric sector to negotiate carbon credits, through a run-of-stream HPP • Constitution of CPFL Bioenergia, for investments in energy generation from biomass 6
  7. 7. 7 CPFL Energia – Corporate Structure Free Float 25.7%¹ 31.1% 12.7% 30.5% 99.99% 100% 100% 90.15% 87.80% 89.75% 96.56% 100% D I S T R I B U T I O N 90.15% Investco Paulista Lajeado 100% 100% 65% 25.01% 48.72% 51% 100% 59.93% 5.91% G E N E R A T I O N 100% 100% 100% 99.95% 100% 100% 89.81% C O M M E R C I A L I Z A T I O N As of March 31th, 2009 ¹ Includes 0.1% from Camargo Corrêa S/A company shares
  8. 8. 8 • Operational efficiency focus • Small distribution companies acquisition, strategically located • Large distribution companies acquisition • Cooperatives acquisition • Private networks incorporation Distribution Generation • Projects’ conclusion • SPP’s repowering, construction and acquisition • Energy cogeneration through biomass • Green field projects - Auctions Commercialization • Increasing in Value Added Services (VAS) and new products and services • New opportunities - clients between 0.5 and 3.0 MW, supplied by cogeneration or SPP’s CPFL Energia’s Investment Case join the current portfolio growth with acquisition opportunities 8
  9. 9. 9 Focus on capturing synergies and optimization of levels of Group delinquencies Delinquency Recovery² – R$ million Amount sent to SPC (in R$) Amount recovered (in R$) 4Q07 4Q08 Delinquency1 – (%) 1) Receivables past due > 30 days - % of total Revenues – outstanding as at December 31 2008 2) Excluding CPFL Jaguariúna DISTRIBUTION 9 Consolidated
  10. 10. 10 Strong growth in the installed capacity and long term concessions in the generation ventures GENERATION 812 434 854 915 1,072 1,588 1,737 1,738 2,202 472 525 571 800 861 862 1,093 2003 2004 2005 2006 20073 2008(e) 2009(e) 2010(e) Serra da Mesa1 SPP’s CPFL Geração Monte Claro Barra Grande 14 de Julho Castro Alves Foz do ChapecóCampos Novos CPFL Sul2 Lajeado SPP’s CPFL Jaguariúna3 2027 2036 2036 2036 20362035 2028 20362032 2015 Installed Capacity (MW) Assured Energy (MWmedium) Concession Term 48.2% 40.2% 9.3% 7.6% 26,71% 26,9% (1) CPFL has the right of 51.54% of the Assured Energy until 2028 (2) Hydroelectric projects with installed capacity <= 1,000 kW are not eligible to concession (3) Among the 9 SPP’s of CPFL Jaguariúna, 6 are in the situation mentioned in note 2 Note: Includes expected two SPP’s repowering in 200910
  11. 11. 11 GENERATION 11
  12. 12. 12 GENERATION 12
  13. 13. 13 • Contract signed: Aug 2008 • Construction of a sugar cane bagasse-fired thermoelectric generation plant • Location: Pirassununga – SP • Expected operations: April 2010 Baldin Project – CPFL Bioenergia’s 1st project CPFL Energia is alert to the opportunities of business involving sugar cane biomass CPFL Investment: R$ 98 million CPFL will have the right to 25 MW of energy exported during harvest season: 112 GWh/year Energy supply contract Amount: over R$ 500 million Contract period: 2009 to 2023 % of bioelectricity energy purchased in CPFL Brazil contracts 13% 10% After the contractCurrent Business ModelGENERATION COMMERCIALIZATION • High pressure boilers • Condensing turbines • Back pressure turbines • Substation and transmission CPFL invests in the generation-related machinery… …and receives the exceed energy, for a certain period Energy purchased from biomass source to sell in the free market Sold 100% 13
  14. 14. 14 COMMERCIALIZATION 14
  15. 15. 15 CPFL presents sales growth in the concession area and in the free market 33,076 31,235 37,32335,24531,778 11,710 3,288 11,230 9,5857,263 49,033 38,49836,364 46,475 41,363 2004 2005 2006 2007 2008 TUSD CAPTIVE 8,9048,9519,334 7,120 3,209 2004 2005 2006 2007 2008 Concession Area Sales – GWh1 Free Market Sales (GWh)1 34.8% 177.5% 1) Excludes intercompany transactions (consolidation accounting basis), CCEE and generation sales (except to the free market) 2) Source: EPE Concession Area Sales – GWh – 2008 15
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  17. 17. 17 CPFL Energia – 4Q08 and 2008 Results 2.628 2.522 9.410 9.706 4T07 4T08 2007 2008 Net Revenue – R$ billion EBITDA – R$ billion 781 699 3.345 2.808 4T07 4T08 2007 2008 370 336 1.641 1.276 4T07 4T08 2007 2008 Net Income – R$ billion -4,0% 3,1% -10,5% -16,1% -9,3% -22,2% Reported values. Numbers already incorporate the impact of Law 11,638/07 and PM 449/0817 2008 vs 2007 (+) Growth of 4.6 in total energy sales in 2008 (–) Average reduction of 11% in distribution tariffs in view of periodic tariff review (+) Castro Alves HPP commercial operations start-up of on Feb 29th , 2008 and 14 de Julho HPP on Dec 25th , 2008 (+) Increase of 74% in revenues from VAS and CPFL Total
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  20. 20. 20 Debt indexation Capex already signed up with BNDES CPFL Energia Ratings Local scale 20
  21. 21. 21 May, 2006 32.69% 414 Aug, 2006 11% 9 Oct, 2006 99.9% 203 Apr, 2007 100% 412 Acquired Stake Investment – Equity (R$ million) Asset CPFL Energia supports investment politics aligned with the Group’s growth strategy 606 627 797 627 418 606 633 1,133 1,5511,425 2004 2005 2006 2007 Capex Total(1) Acquisitions(2) Actual Investment (R$ million) (1) Considers minority shareholder participation’s acquisitions (2) Considers CERFRA Cooperative assets acquisition Note: Hedge not included21
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