The Brazilian Energy Sector by David Panico, Managing Director, Investment Banking, Citi. Presentation featured at the 2nd International Conference: Brazil: A pathway into the future from the Emerging Markets Institute at Cornell University's Samuel Curtis Johnson Graduate School of Management and Better Brazil
- Citigroup's third quarter earnings summary showed a strong balance sheet with improved tangible common equity of $102 billion and a stable Tier 1 capital ratio of 12.7%.
- Several of Citigroup's business lines saw record revenues including the Institutional Clients Group and Transaction Services. Regional consumer banking also saw revenue and deposit growth.
- Credit losses declined slightly but remained elevated with improving trends in international markets and mixed results in the US. Assets in Citi Holdings were down $32 billion in the quarter and $281 billion from their peak.
- Citigroup is focused on its core historical strengths and shifting away from businesses reliant on wholesale funding and developed market credit to more stable and profitable
The Canadian GIC market is valued at just under $900 billion in Q1 2009. Chartered banks hold the largest share at 67% of funds, while credit unions and trust companies hold 25% and 7% respectively. On average, GIC volumes have grown 5% per year. Individuals hold 57% of outstanding balances compared to 43% for businesses. Distribution is key to success in the GIC market, with large investment dealers and independent brokers driving most origination. Rates are generally not the main competitive driver, as customers prioritize insured status, brand, and advisor recommendations over rates. New entrants may consider differentiated strategies around distribution channels, product features, or rates/commissions.
JK Lakshmi Cement (JKLC) reported a 1,663bp year-over-year decline in operating margin to 17.4% in the first quarter of fiscal year 2011 due to an 8.7% fall in realizations and a 36% increase in power and fuel costs. Net profit declined 78.6% year-over-year to Rs. 17 crore. The analyst maintains a "Buy" rating on JKLC, revising the target price to Rs. 92, expecting the company to face relatively less pricing pressure due to its concentration in high-growth northern and eastern regions and benefit from increasing captive power capacity.
- Alembic reported lower than expected sales and profits for 1QFY2011 due to weak performance in its export API segment and slower than expected growth in domestic formulations.
- However, interest costs declined significantly due to lower debt levels and the company's decision to demerge its pharmaceutical business from other businesses is expected to unlock value by allowing each business to focus on its core operations.
- The analyst maintains a 'Buy' rating and has set a target price of Rs. 74 per share based on separate valuations of the demerged pharmaceutical and API businesses as well as the company's land assets.
Lupin reported in-line results for the first quarter of fiscal year 2011, with net sales of Rs1,312 crore, operating profit margin of 20%, and net profit of Rs196 crore. Key drivers of growth included strong sales of generic drugs in the US market, as well as expansion of Lupin's domestic field force in India. While the company saw a delay in FDA approval for oral contraceptive drugs, management does not expect this to impact its competitive position. The analyst maintains an 'Accumulate' rating for Lupin based on its scale in key markets like the US and India, as well as its pipeline of generic drug approvals.
1) HCC reported a 13.6% increase in net sales to Rs.995.4 crore for 1QFY2011, in line with Angel Research estimates. Operating profit grew 9.3% to Rs.125.8 crore.
2) Net profit increased 55.6% to Rs.28.3 crore, marginally ahead of estimates due to higher operating margins and lower taxes.
3) Angel Research maintains a Neutral view on HCC, valuing it at Rs.126/share on an SOTP basis, with limited upside from current levels given its valuation of 36.5x FY2012 EPS.
Larsen & Toubro (L&T) reported modest results for the first quarter of fiscal year 2011 that were below analyst expectations on revenue but positively surprised on margins. Revenue grew 6.4% year-over-year to Rs. 7,885 crore, below estimates, due to flat performance in the engineering and construction segment. However, operating margins expanded significantly by 170 basis points due to lower subcontracting costs. The order backlog remained strong at Rs. 1,07,816 crore as of June 30, 2010 and order inflows were led by the power segment. While most positives are priced into the stock, further upside could come from value unlocking at subsidiary levels.
Bajaj Auto reported strong results for the first quarter of fiscal year 2011. The company's top line was marginally above expectations, driven by a 70% year-over-year increase in total volumes. EBITDA margins expanded slightly by 50 basis points year-over-year to 20%. Net profit increased 101% year-over-year to Rs590 crore, beating estimates, aided by higher other income and improved operating leverage. Overall, robust volume growth and margin expansion led to better-than-expected financial performance during the quarter.
- Citigroup's third quarter earnings summary showed a strong balance sheet with improved tangible common equity of $102 billion and a stable Tier 1 capital ratio of 12.7%.
- Several of Citigroup's business lines saw record revenues including the Institutional Clients Group and Transaction Services. Regional consumer banking also saw revenue and deposit growth.
- Credit losses declined slightly but remained elevated with improving trends in international markets and mixed results in the US. Assets in Citi Holdings were down $32 billion in the quarter and $281 billion from their peak.
- Citigroup is focused on its core historical strengths and shifting away from businesses reliant on wholesale funding and developed market credit to more stable and profitable
The Canadian GIC market is valued at just under $900 billion in Q1 2009. Chartered banks hold the largest share at 67% of funds, while credit unions and trust companies hold 25% and 7% respectively. On average, GIC volumes have grown 5% per year. Individuals hold 57% of outstanding balances compared to 43% for businesses. Distribution is key to success in the GIC market, with large investment dealers and independent brokers driving most origination. Rates are generally not the main competitive driver, as customers prioritize insured status, brand, and advisor recommendations over rates. New entrants may consider differentiated strategies around distribution channels, product features, or rates/commissions.
JK Lakshmi Cement (JKLC) reported a 1,663bp year-over-year decline in operating margin to 17.4% in the first quarter of fiscal year 2011 due to an 8.7% fall in realizations and a 36% increase in power and fuel costs. Net profit declined 78.6% year-over-year to Rs. 17 crore. The analyst maintains a "Buy" rating on JKLC, revising the target price to Rs. 92, expecting the company to face relatively less pricing pressure due to its concentration in high-growth northern and eastern regions and benefit from increasing captive power capacity.
- Alembic reported lower than expected sales and profits for 1QFY2011 due to weak performance in its export API segment and slower than expected growth in domestic formulations.
- However, interest costs declined significantly due to lower debt levels and the company's decision to demerge its pharmaceutical business from other businesses is expected to unlock value by allowing each business to focus on its core operations.
- The analyst maintains a 'Buy' rating and has set a target price of Rs. 74 per share based on separate valuations of the demerged pharmaceutical and API businesses as well as the company's land assets.
Lupin reported in-line results for the first quarter of fiscal year 2011, with net sales of Rs1,312 crore, operating profit margin of 20%, and net profit of Rs196 crore. Key drivers of growth included strong sales of generic drugs in the US market, as well as expansion of Lupin's domestic field force in India. While the company saw a delay in FDA approval for oral contraceptive drugs, management does not expect this to impact its competitive position. The analyst maintains an 'Accumulate' rating for Lupin based on its scale in key markets like the US and India, as well as its pipeline of generic drug approvals.
1) HCC reported a 13.6% increase in net sales to Rs.995.4 crore for 1QFY2011, in line with Angel Research estimates. Operating profit grew 9.3% to Rs.125.8 crore.
2) Net profit increased 55.6% to Rs.28.3 crore, marginally ahead of estimates due to higher operating margins and lower taxes.
3) Angel Research maintains a Neutral view on HCC, valuing it at Rs.126/share on an SOTP basis, with limited upside from current levels given its valuation of 36.5x FY2012 EPS.
Larsen & Toubro (L&T) reported modest results for the first quarter of fiscal year 2011 that were below analyst expectations on revenue but positively surprised on margins. Revenue grew 6.4% year-over-year to Rs. 7,885 crore, below estimates, due to flat performance in the engineering and construction segment. However, operating margins expanded significantly by 170 basis points due to lower subcontracting costs. The order backlog remained strong at Rs. 1,07,816 crore as of June 30, 2010 and order inflows were led by the power segment. While most positives are priced into the stock, further upside could come from value unlocking at subsidiary levels.
Bajaj Auto reported strong results for the first quarter of fiscal year 2011. The company's top line was marginally above expectations, driven by a 70% year-over-year increase in total volumes. EBITDA margins expanded slightly by 50 basis points year-over-year to 20%. Net profit increased 101% year-over-year to Rs590 crore, beating estimates, aided by higher other income and improved operating leverage. Overall, robust volume growth and margin expansion led to better-than-expected financial performance during the quarter.
PDG Realty increases its stake in Goldfarb to 70% by acquiring an additional 21% through a capital increase and equity purchase. This consolidates PDG Realty's position as a market leader in the lower to middle-income real estate segment and provides investment opportunities in a segment with large repressed demand. The acquisition is accretive due to Goldfarb's growth potential and proven execution capabilities, as well as arbitrage opportunities from valuation discounts of private equity investments versus listed companies.
Larsen & Toubro (L&T) reported a 17.8% year-over-year increase in net sales to Rs. 9,330.8 crore for the second quarter of FY2011, exceeding estimates. However, operating margins of 10.8% were below expectations due to higher staff costs. Net profit of Rs. 650.2 crore was marginally above estimates. While top-line growth was strong, margins were impacted by costs, resulting in net profit slightly surpassing estimates. Order inflows were in line with expectations.
The document is a presentation from Marshall Larsen, Chairman and CEO of Goodrich Corporation, at the 14th Annual Credit Suisse Aerospace and Defense Conference on November 19, 2008. It discusses Goodrich's financial outlook, the commercial aerospace market environment, and Goodrich's strategies and positioning. Goodrich expects sales and EPS growth to continue in 2009 despite challenges in the global economy and airline industry, with balanced growth across commercial aerospace and defense markets.
Journal Communications, Inc. is a media company that operates newspapers, television stations, radio stations, and websites across 12 states. The company generates most of its revenue from advertising sales. The analyst initiates coverage of Journal Communications with a Neutral rating and $8 price target due to concerns about weak advertising spending in 2008 and the company's exposure to struggling real estate markets. However, the company is transforming its business model and expanding its faster-growing internet and broadcast segments. The analyst expects the company's performance to improve in late 2008 and 2009 as the economy recovers and advertising spending increases.
Cipla reported 1QFY2011 results that were ahead of estimates, with operating margins improving sequentially. While domestic formulation sales grew only 3.6% due to lower generic sales, export sales increased 14.4% due to growth in ARV and anti-asthma segments. Operating margins expanded to 20.9% due to lower other expenses. Net profit grew 6.5% to Rs257cr from higher margins and other income. The company expects its new Indore facility to start contributing significantly over the next 6-12 months and sees this aiding substantial future growth. The report recommends buying the stock.
Banco ABC - 4th Quarter 2007 Earnings PresentationBanco ABC Brasil
Banco ABC Brasil had a successful year in 2007. The credit portfolio grew 71% to R$4,992 million while maintaining high quality with 99.5% of loans rated AA-C. Net income increased 154.6% in 4Q07 and 93.8% for the full year 2007. The middle market credit portfolio grew 89.9% with a focus on Sao Paulo clients and an average ticket size of R$1.9 million.
Anant Raj Industries' (ARIL) 4QFY2010 results were below expectations due to a delay in launching a premium residential project. Rental income grew 10.6% but profit fell 53.9% quarter-over-quarter. The analyst downgraded earnings estimates for FY2011-FY2012 to account for the delayed project launch. However, ARIL has a strong development pipeline and the analyst maintains a Buy rating due to ARIL's low-cost land bank and strong balance sheet.
Corporation Bank reported a 27.8% increase in net profit for the first quarter of fiscal year 2011 compared to the same period last year, above analysts' estimates. Net interest income grew 49.2% driven by strong loan growth and an improvement in the credit-deposit ratio. However, asset quality deteriorated with gross NPAs rising 11.6% sequentially. Going forward, maintaining the loan growth rate will be challenging in a rising interest rate environment given the bank's regional operations and lower CASA ratio compared to peers.
In 3 sentences:
BGC Partners reported their financial results for 4Q2012 compared to 4Q2011. Total revenue was $1.1 billion, down 1% from the previous year. Revenue from rates, credit, and equities declined due to lower industry volumes and quantitative easing, though foreign exchange revenue grew due to strong performance in electronic trading. Overall pre-tax earnings were $35.1 million in financial services and $12.6 million in real estate.
Tata Motors reported strong results for the first quarter of fiscal year 2011. Consolidated net sales grew 65% year-over-year to Rs. 27,056 crore, driven by higher domestic and JLR volumes as well as a 27% increase in JLR realizations. Consolidated operating profit jumped 667% to Rs. 3,855 crore and operating margins increased substantially to 14.2% compared to 3.1% in the prior year period. However, standalone performance was marginally below expectations with net sales up 63% to Rs. 10,416 crore and net profit falling 23% to Rs. 396 crore due to lower other income. While volumes grew 48% driven by strong
Tata Motors reported strong results for the fourth quarter of fiscal year 2010. Consolidated net sales were up 84.6% year-over-year to Rs. 28,978 crore, driven by higher other income and improved performance at subsidiaries like Jaguar Land Rover. Operating profit was Rs. 3,135 crore compared to an operating loss in the prior year. Net profit increased significantly to Rs. 2,228 crore from Rs. 316 crore in 4QFY2009, benefiting from cost cutting measures and higher other income. The results were above expectations due to the company's aggressive cost reductions and good turnaround at key subsidiaries.
Hotel Leela Venture (HLVL) is a major player in India's premium hotel industry, operating six properties with 1,190 owned rooms. HLVL plans to expand in two phases, opening new properties in New Delhi and Chennai in fiscal year 2011. While the global recession and terrorism hurt the industry, tourism is recovering as foreign tourist arrivals and average room rates increase. HLVL's revenues, EBITDA, and profits are expected to grow rapidly over the next few years. The company is diversifying geographically through new properties to reduce reliance on Mumbai and Bangalore, which currently contribute about 62% of revenues. However, HLVL currently trades at a higher valuation than replacement cost and peers, leading to an
Motherson Sumi Systems (MSSL) reported a 32% year-over-year increase in net sales to Rs. 1,905 crores for the first quarter of fiscal year 2011, below expectations. Operating margins increased 370 basis points year-over-year to 9.8% but fell short of expectations and declined sequentially. Net profit for the quarter came in below expectations at Rs. 60 crores due to lower-than-expected revenue growth and margins. Management indicated input costs and currency impacts would be gradually passed on to customers, and the analyst maintains an 'Accumulate' rating while lowering the target price.
Pantaloon Retail reported a 25.3% year-over-year growth in net sales to Rs. 2,057.6 crore for the third quarter of fiscal year 2010, below expectations of 30.2% growth. Same store sales growth was 13.9% and 13.2% for value and lifestyle retailing respectively. Operating margins remained flat at 10.5% while net profit grew 62.7% to Rs. 55.9 crore due to sales growth and unchanged interest costs. The analyst maintains an accumulate rating and target price of Rs. 469 based on retail space expansion, revival in consumer sentiment, and organizational restructuring.
The document provides an overview of career stages and the investment banking model at a major bank. It discusses Stage 1 which focuses on job searching. It then outlines the universal banking model and investment banking division at a big bank. The investment banking division includes corporate finance and capital markets. The presentation emphasizes networking, relationship building, and selling skills for success in front office roles. It stresses taking a long-term view of networking and maintaining breadth and depth of connections.
PVR is expected to see strong performance in its exhibition business in the second and third quarters of FY2011, aided by a robust movie pipeline (both domestic and Hollywood films) and substantial screen additions over the last six months. Management expects 14-15 new 3D English movies to be released over the next 18-24 months. Additionally, PVR is looking to unlock value by selling and leasing back its Phoenix Mill property, which could generate around Rs. 80-100 crore in cash. PVR Pictures is also expected to see multi-fold revenue growth in FY2011 with more film productions lined up. Blu-O, PVR's bowling business, aims to have 150 lanes by FY2012 and
For the first quarter of fiscal year 2011 (1QFY2011):
1) Hero Honda's net sales grew 12% year-over-year to Rs. 4,297 crore, in line with estimates, while operating profit fell 7% and net profit declined 2% due to higher input costs.
2) Operating margins decreased significantly to 14% from 17% in the prior year quarter due to a 345 basis point rise in raw material costs.
3) The analyst maintains revenue growth estimates but revises operating margin forecasts lower to account for pressure from increasing raw material prices.
The document summarizes key trends in the Asia Pacific outsourcing market in 2011 based on an analysis of contracts over $25 million. It finds that while contract activity reached record levels, total contract value declined 10% from 2010 due to a rise in smaller deals. Total contract value was pulled down by weaker performance in India and key industries like financial services and manufacturing. However, the Asia Pacific market remains attractive with annualized revenue and active contracts growing at a 4-8% compound annual rate between 2007-2011.
PTC India reported a 5.4% year-over-year increase in top-line for the fourth quarter of fiscal year 2010, however bottom-line declined 10.7% due to a 26.5% reduction in other income and a 39.2% rise in taxes. While sales volumes grew 46.7% year-over-year, average realizations declined 28% due to falling power prices. Operating profit increased 120.1% on a 40 basis point expansion in margins. The analyst maintains a buy recommendation based on an expected positive impact from new trading margin regulations and a fair value estimate of Rs136 per share.
Maruti Suzuki reported quarterly results that were below expectations, with net profit growing 170% year-over-year to Rs. 657 crore, lower than projected. Volume growth drove the company's 31% year-over-year increase in net sales to Rs. 8,425 crore for the quarter. Margins increased significantly year-over-year due to improved operating leverage and lower raw material costs, but declined sequentially. The company maintained its annual capex plan of Rs. 9,000 crore to be spent between 2008-2012 for expansion purposes.
Green Pearl Events Multifamily Investment Summit Mike Kelly PresentationRyan Slack
The Green Pearl Real Estate Conference focused on questions about the state of the commercial real estate market. Speakers discussed identifying the bottom of the market, the types of deals currently getting done, trends in capitalization rates, and the state of commercial mortgage debt, construction loans, and delinquency rates. Data was presented on multifamily loan maturities through 2017, non-performing construction and development loans, and delinquency rates for multifamily loans.
This slide deck examines the topic of location-based mobile advertising and shares key takeaways from a new BIA/Kelsey report, "From National to Local: Mobile Advertising Zeros In. Joining BIA/Kelsey speakers - Rick Ducey, managing director and Michael Boland, senior analyst - is Monica Ho, vice president of marketing at xAd, who offers perspective from inside the industry on what’s working both locally and nationally.
PDG Realty increases its stake in Goldfarb to 70% by acquiring an additional 21% through a capital increase and equity purchase. This consolidates PDG Realty's position as a market leader in the lower to middle-income real estate segment and provides investment opportunities in a segment with large repressed demand. The acquisition is accretive due to Goldfarb's growth potential and proven execution capabilities, as well as arbitrage opportunities from valuation discounts of private equity investments versus listed companies.
Larsen & Toubro (L&T) reported a 17.8% year-over-year increase in net sales to Rs. 9,330.8 crore for the second quarter of FY2011, exceeding estimates. However, operating margins of 10.8% were below expectations due to higher staff costs. Net profit of Rs. 650.2 crore was marginally above estimates. While top-line growth was strong, margins were impacted by costs, resulting in net profit slightly surpassing estimates. Order inflows were in line with expectations.
The document is a presentation from Marshall Larsen, Chairman and CEO of Goodrich Corporation, at the 14th Annual Credit Suisse Aerospace and Defense Conference on November 19, 2008. It discusses Goodrich's financial outlook, the commercial aerospace market environment, and Goodrich's strategies and positioning. Goodrich expects sales and EPS growth to continue in 2009 despite challenges in the global economy and airline industry, with balanced growth across commercial aerospace and defense markets.
Journal Communications, Inc. is a media company that operates newspapers, television stations, radio stations, and websites across 12 states. The company generates most of its revenue from advertising sales. The analyst initiates coverage of Journal Communications with a Neutral rating and $8 price target due to concerns about weak advertising spending in 2008 and the company's exposure to struggling real estate markets. However, the company is transforming its business model and expanding its faster-growing internet and broadcast segments. The analyst expects the company's performance to improve in late 2008 and 2009 as the economy recovers and advertising spending increases.
Cipla reported 1QFY2011 results that were ahead of estimates, with operating margins improving sequentially. While domestic formulation sales grew only 3.6% due to lower generic sales, export sales increased 14.4% due to growth in ARV and anti-asthma segments. Operating margins expanded to 20.9% due to lower other expenses. Net profit grew 6.5% to Rs257cr from higher margins and other income. The company expects its new Indore facility to start contributing significantly over the next 6-12 months and sees this aiding substantial future growth. The report recommends buying the stock.
Banco ABC - 4th Quarter 2007 Earnings PresentationBanco ABC Brasil
Banco ABC Brasil had a successful year in 2007. The credit portfolio grew 71% to R$4,992 million while maintaining high quality with 99.5% of loans rated AA-C. Net income increased 154.6% in 4Q07 and 93.8% for the full year 2007. The middle market credit portfolio grew 89.9% with a focus on Sao Paulo clients and an average ticket size of R$1.9 million.
Anant Raj Industries' (ARIL) 4QFY2010 results were below expectations due to a delay in launching a premium residential project. Rental income grew 10.6% but profit fell 53.9% quarter-over-quarter. The analyst downgraded earnings estimates for FY2011-FY2012 to account for the delayed project launch. However, ARIL has a strong development pipeline and the analyst maintains a Buy rating due to ARIL's low-cost land bank and strong balance sheet.
Corporation Bank reported a 27.8% increase in net profit for the first quarter of fiscal year 2011 compared to the same period last year, above analysts' estimates. Net interest income grew 49.2% driven by strong loan growth and an improvement in the credit-deposit ratio. However, asset quality deteriorated with gross NPAs rising 11.6% sequentially. Going forward, maintaining the loan growth rate will be challenging in a rising interest rate environment given the bank's regional operations and lower CASA ratio compared to peers.
In 3 sentences:
BGC Partners reported their financial results for 4Q2012 compared to 4Q2011. Total revenue was $1.1 billion, down 1% from the previous year. Revenue from rates, credit, and equities declined due to lower industry volumes and quantitative easing, though foreign exchange revenue grew due to strong performance in electronic trading. Overall pre-tax earnings were $35.1 million in financial services and $12.6 million in real estate.
Tata Motors reported strong results for the first quarter of fiscal year 2011. Consolidated net sales grew 65% year-over-year to Rs. 27,056 crore, driven by higher domestic and JLR volumes as well as a 27% increase in JLR realizations. Consolidated operating profit jumped 667% to Rs. 3,855 crore and operating margins increased substantially to 14.2% compared to 3.1% in the prior year period. However, standalone performance was marginally below expectations with net sales up 63% to Rs. 10,416 crore and net profit falling 23% to Rs. 396 crore due to lower other income. While volumes grew 48% driven by strong
Tata Motors reported strong results for the fourth quarter of fiscal year 2010. Consolidated net sales were up 84.6% year-over-year to Rs. 28,978 crore, driven by higher other income and improved performance at subsidiaries like Jaguar Land Rover. Operating profit was Rs. 3,135 crore compared to an operating loss in the prior year. Net profit increased significantly to Rs. 2,228 crore from Rs. 316 crore in 4QFY2009, benefiting from cost cutting measures and higher other income. The results were above expectations due to the company's aggressive cost reductions and good turnaround at key subsidiaries.
Hotel Leela Venture (HLVL) is a major player in India's premium hotel industry, operating six properties with 1,190 owned rooms. HLVL plans to expand in two phases, opening new properties in New Delhi and Chennai in fiscal year 2011. While the global recession and terrorism hurt the industry, tourism is recovering as foreign tourist arrivals and average room rates increase. HLVL's revenues, EBITDA, and profits are expected to grow rapidly over the next few years. The company is diversifying geographically through new properties to reduce reliance on Mumbai and Bangalore, which currently contribute about 62% of revenues. However, HLVL currently trades at a higher valuation than replacement cost and peers, leading to an
Motherson Sumi Systems (MSSL) reported a 32% year-over-year increase in net sales to Rs. 1,905 crores for the first quarter of fiscal year 2011, below expectations. Operating margins increased 370 basis points year-over-year to 9.8% but fell short of expectations and declined sequentially. Net profit for the quarter came in below expectations at Rs. 60 crores due to lower-than-expected revenue growth and margins. Management indicated input costs and currency impacts would be gradually passed on to customers, and the analyst maintains an 'Accumulate' rating while lowering the target price.
Pantaloon Retail reported a 25.3% year-over-year growth in net sales to Rs. 2,057.6 crore for the third quarter of fiscal year 2010, below expectations of 30.2% growth. Same store sales growth was 13.9% and 13.2% for value and lifestyle retailing respectively. Operating margins remained flat at 10.5% while net profit grew 62.7% to Rs. 55.9 crore due to sales growth and unchanged interest costs. The analyst maintains an accumulate rating and target price of Rs. 469 based on retail space expansion, revival in consumer sentiment, and organizational restructuring.
The document provides an overview of career stages and the investment banking model at a major bank. It discusses Stage 1 which focuses on job searching. It then outlines the universal banking model and investment banking division at a big bank. The investment banking division includes corporate finance and capital markets. The presentation emphasizes networking, relationship building, and selling skills for success in front office roles. It stresses taking a long-term view of networking and maintaining breadth and depth of connections.
PVR is expected to see strong performance in its exhibition business in the second and third quarters of FY2011, aided by a robust movie pipeline (both domestic and Hollywood films) and substantial screen additions over the last six months. Management expects 14-15 new 3D English movies to be released over the next 18-24 months. Additionally, PVR is looking to unlock value by selling and leasing back its Phoenix Mill property, which could generate around Rs. 80-100 crore in cash. PVR Pictures is also expected to see multi-fold revenue growth in FY2011 with more film productions lined up. Blu-O, PVR's bowling business, aims to have 150 lanes by FY2012 and
For the first quarter of fiscal year 2011 (1QFY2011):
1) Hero Honda's net sales grew 12% year-over-year to Rs. 4,297 crore, in line with estimates, while operating profit fell 7% and net profit declined 2% due to higher input costs.
2) Operating margins decreased significantly to 14% from 17% in the prior year quarter due to a 345 basis point rise in raw material costs.
3) The analyst maintains revenue growth estimates but revises operating margin forecasts lower to account for pressure from increasing raw material prices.
The document summarizes key trends in the Asia Pacific outsourcing market in 2011 based on an analysis of contracts over $25 million. It finds that while contract activity reached record levels, total contract value declined 10% from 2010 due to a rise in smaller deals. Total contract value was pulled down by weaker performance in India and key industries like financial services and manufacturing. However, the Asia Pacific market remains attractive with annualized revenue and active contracts growing at a 4-8% compound annual rate between 2007-2011.
PTC India reported a 5.4% year-over-year increase in top-line for the fourth quarter of fiscal year 2010, however bottom-line declined 10.7% due to a 26.5% reduction in other income and a 39.2% rise in taxes. While sales volumes grew 46.7% year-over-year, average realizations declined 28% due to falling power prices. Operating profit increased 120.1% on a 40 basis point expansion in margins. The analyst maintains a buy recommendation based on an expected positive impact from new trading margin regulations and a fair value estimate of Rs136 per share.
Maruti Suzuki reported quarterly results that were below expectations, with net profit growing 170% year-over-year to Rs. 657 crore, lower than projected. Volume growth drove the company's 31% year-over-year increase in net sales to Rs. 8,425 crore for the quarter. Margins increased significantly year-over-year due to improved operating leverage and lower raw material costs, but declined sequentially. The company maintained its annual capex plan of Rs. 9,000 crore to be spent between 2008-2012 for expansion purposes.
Green Pearl Events Multifamily Investment Summit Mike Kelly PresentationRyan Slack
The Green Pearl Real Estate Conference focused on questions about the state of the commercial real estate market. Speakers discussed identifying the bottom of the market, the types of deals currently getting done, trends in capitalization rates, and the state of commercial mortgage debt, construction loans, and delinquency rates. Data was presented on multifamily loan maturities through 2017, non-performing construction and development loans, and delinquency rates for multifamily loans.
This slide deck examines the topic of location-based mobile advertising and shares key takeaways from a new BIA/Kelsey report, "From National to Local: Mobile Advertising Zeros In. Joining BIA/Kelsey speakers - Rick Ducey, managing director and Michael Boland, senior analyst - is Monica Ho, vice president of marketing at xAd, who offers perspective from inside the industry on what’s working both locally and nationally.
wyeth Cowen and Company Annual Health Care Conferencefinance12
Geno Germano, President of U.S. and General Manager of Wyeth Pharmaceuticals, presented at the Cowen Health Care Conference on March 13, 2007. He discussed Wyeth's strong financial growth in 2006, new commercial models being implemented, and upcoming FDA submissions including Pristiq for depression and menopausal symptoms. Germano emphasized building a diverse and stronger company through top line growth, cost management, and outpacing revenue growth with bottom line growth.
The document appears to be a presentation for investors and lenders given by FedEx Freight. It includes graphs showing increases in revenue and average daily shipments for FedEx Freight from fiscal years 2005 to 2010. It also shows improvements in transit time for lanes since 2003 and compares current transit times to competitors. The presentation discusses expanding FedEx Freight's short-haul and long-haul networks and introducing priority and economy shipping options. It provides examples of shipping routes and transit times for priority vs economy services. Overall, the presentation aims to showcase FedEx Freight's growth and performance to investors and lenders.
The Progressive Corporation 2008 Annual Report summarizes the company's performance for the year. Key points include:
- Progressive reported its first net loss in 26 years due to challenging market conditions including declining auto insurance rates and rising economic uncertainty.
- However, the company's 94.6 combined ratio for the year was in line with its target of 96, demonstrating responsive pricing and cost control. 42 of its 50 states were profitable.
- Total policies in force grew 3% to over 10 million, driven by strong growth in its direct auto business, though overall premium growth was modest at 1% due to prolonged rate reductions.
- A pretax underwriting income of $735 million was an acceptable result given the
The Progressive Corporation 2008 Annual Report summarizes the company's performance for the year. Key points include:
- Progressive reported its first net loss in 26 years due to challenging market conditions including declining auto insurance rates and rising economic uncertainty.
- However, the company's 94.6 combined ratio for the year was in line with its target of 96, demonstrating responsive pricing and cost control. 42 of its 50 states were profitable.
- Total policies in force grew 3% to over 10 million, driven by strong growth in its direct auto business, though overall premium growth was modest at 1% due to prolonged rate reductions.
- A pretax underwriting income of $735 million was an acceptable result given the
The document summarizes Bank of America's operating review and financial results for 2007 and Q1 2008. It discusses factors that contributed to challenges like market dislocations and a weakening economy. While most business lines saw lower profits, consumer and wealth management saw some growth. The CFO notes strategies to refocus businesses and adjust underwriting standards. Asset quality deteriorated with higher provisions and charge-offs. However, the company maintains a strong capital position and liquidity.
Brian Moynihan, president of Bank of America's Global Corporate and Investment Banking division, presented at the Lehman Brothers Financial Services Conference on September 10, 2008. He summarized the bank's second quarter results, noting solid performance across business segments but challenges from illiquid capital market positions and a softening economic environment. He also discussed ongoing restructuring efforts, trends in commercial and real estate asset quality, and strategies to invest in growth areas while managing expenses.
The document summarizes Best Buy's annual shareholder meeting held on June 27, 2007. It provides the agenda which included the election of directors, ratification of auditors, and a vote on amending the stock incentive plan. Presentations were given by executives on the company's financial performance, growth strategies, and outlook for fiscal year 2008. Shareholders voted to approve all agenda items, with support over 94% for each. The company projected fiscal 2008 revenue of $39 billion and earnings per share of $2.95 to $3.15.
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Brazil: A Macro-economic Outlook by Fabio Niccheri, Partner, PricewaterhouseCoopers. Presentation featured at the 2nd International Conference: Brazil: A pathway into the future from the Emerging Markets Institute at Cornell University's Samuel Curtis Johnson Graduate School of Management and Better Brazil
2. Table of Contents
1. Citi Brazil 1
2. Introduction: The Brazilian Energy Matrix 3
3. Power Sector Overview: Perspectives and Challenges 5
4. Oil & Gas Sector Overview: Perspectives and Challenges 12
4. : The Largest Global Bank with a Commercial Platform in Brazil
Present in Brazil for 97 years, with a unique breath of services and long-lasting commercial relationships.
Shareholders’ Equity in Brazil Key Citi Brazil Highlights
(US$ bn)
$4.0
Enhanced Investment Banking Capabilities
$1.8
$1.5
$1.3
$0.8 Strong Financial Products Expertise
$0.7 $0.6
$0.4 $0.3
CS JPM BNP MS BAML DB BARC GS
Brazil + Global Distribution Network
Assets in Brazil
(US$ bn)
$33.6
Relationship with Corporate Clients
$18.1
$15.2 $14.6 Strong brand among Brazilian customers
$11.4
$3.8 $3.5
$2.1 $1.3
Seasoned Personnel
DB CS JPM BNP BARC BAML MS GS
Source: Brazilian Central Bank as of December 31, 2011.
1
5. is a Leading Advisor and Underwriter in Brazil
Citi continues to be a leading underwriter on several landmark equity transactions throughout Brazil, with a
solid position amongst international banks.
Brazil Equity Brazil M&A
(2010-2012 YTD) (2010-2012 YTD)
Rank Bookrunner Volume ($bn) Share (%) Rank Bookrunner Volume ($bn) Share (%)
1 BofA Merril Lynch $6.2 10.7% 1 BofA Merril Lynch $26.9 58.8%
2 $6.0 10.3% 2 Credit Suisse $24.2 52.9%
3 Morgan Stanley $4.7 8.2% 3 Barclays $17.2 37.7%
4 Credit Suisse $4.7 8.2% 4 $6.9 15.1%
5 JP Morgan $2.5 4.2% 5 JP Morgan $5.6 12.2%
6 Goldman Sachs $1.7 3.0% 6 UBS $5.0 11.0%
7 Deutsche Bank $0.2 0.5% 7 Societe Generale $4.8 10.5%
Advisor on the Advisor on the sale
Tender Offer for Advisor on the
Advisor to HRT of the remaining
Follow-On
Follow-On IPO
IPO ETF
ETF IPO
IPO the remaining acquisition of a
Block Trade Advisor to Vale in Participações in 49.9% stake to
Joint
Joint Joint
Joint Joint
Joint Joint
Joint Block Trade 67% stake in 60% stake in
Joint Bookrunner the sale of its oil & the sale of E&P
Bookrunner
Bookrunner Bookrunner
Bookrunner Bookrunner
Bookrunner Bookrunner
Bookrunner Joint Bookrunner
gas E&P assets in assets in
US$1.7 bn US$530 mm Brazil Namibia
US$1.7 bn US$530 mm US$5.4 bn US$6.8 bn US$1.8 bn
Ongoing
Ongoing Ongoing
Ongoing Ongoing
Ongoing 2012
2012 2011 Ongoing Ongoing
2011 Ongoing Ongoing April 2012
Advisor on the Advisor to the Advisor on the Advisor on the Advisor on the sale
Follow-On
Follow-On acquisition of a acquisition of
Follow-On Follow-On IPO Consortium on primary sale of a of Shopping Jardim
Follow-On Follow-On Joint
Joint IPO Follow-On 5.6% stake in
Joint Joint Joint Follow-On the privatization 30% stake in Galp Sul and landbanks
Joint Joint Bookrunner
Bookrunner Joint
Bookrunner Bookrunner Bookrunner Joint Bookrunner
Joint Bookrunner of Brasília Airport to
Bookrunner Bookrunner Bookrunner
US$70 bn
US$70 bn US$4.9 bn
US$4.9 bn US$686 mm
US$686 mm US$1.5 bn
US$1.5 bn US$232 mm US$2.0 bn US$2.6 bn US$2.3 bn US$272 mm
US$232 mm US$4.8 bn
2010
2010 2010
2010 2010
2010 2010
2010 2009 March 2012 February 2012 January 2012 November 2011
2009 November 2011
Advisor on the Advisor Advisor on the
acquisition of a Advisor on the Advisor on the
on its sale to acquisition of
50.5% stake in sale of PU unit acquisition of
Follow-On
Follow-On Follow-On
Follow-On Follow-On
Follow-On Follow-On
Follow-On Follow-On
Follow-On assets in LatAm
to
Joint Bookrunner
Joint Bookrunner Joint Bookrunner
Joint Bookrunner Joint Bookrunner
Joint Bookrunner Joint Bookrunner
Joint Bookrunner Joint Bookrunner
Joint Bookrunner from
US$356 mm US$224 mm US$350 mm US$376 mm US$890 mm US$2.6 bn US$327 mm US$340 mm US$330 mm US$4.5bn
US$356 mm US$224 mm US$350 mm US$376 mm US$890 mm
2009 2009 2009 2009 2009 August 2011 August 2011 July 2011 April 2011 January 2011
2009 2009 2009 2009 2009
Source: Bloomberg as of June 1st 2012.
Note: League tables include only international banks.
2
7. Brazil: Solid Macroeconomics
Russia
Largest Economies by GDP, 2011 Brazilian GDP
(Nominal GDP in US$ tn) (US$ bn, % p.a.)
USA 15.1 6.1% 5.2% 7.6%
3.9% 4.5% 4.3% 4.2%
2.7% 3.0%
China 7.3 $3,203
(0.3%) $2,815 $3,009
$2,474 $2,567
$2,142
$1,653 $1,622
$1,366
$1,089
Japan 5.9
2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E
Germany 3.6
Nominal GDP (US$bn) GDP (Real Change p.a., in %)
France 2.8
Interest Rates & Inflation
Brazil 2.5 (Avg, %)
15.3% United China Japan Germany France Brazil United Italy
UK 2.4 States Kingdom
12.0% 12.4% 11.7%
10.1% 9.8%
7.5%
Italy 2.2 6.6%
5.7% 5.0%
4.2% 4.9% 4.9%
3.6%
Russia 1.9
2006 2007 2008 2009 2010 2011 2012E
Canada 1.7 Inflation (IPCA) Interest rate (Selic, year average)
Source: Brazilian Central Bank and IMF.
3
8. The Brazilian Energy Matrix: Renewable as Nowhere Else
2010
Nuclear
Mineral Coal 1% Hydro
5% 14%
Natural Gas
10%
Vegetable Coal &
Wood
Over 45% of all energy
10% consumed in Brazil comes from
Renewables:
45%
renewable sources, versus an
average of 13% in developed
Sugar Cane countries
18%
Petroleum Based
39%
Other Renew ables
3%
2020
Nuclear
Mineral Coal
6%
1% Hydro Renewable sources account for
13%
Natural Gas
over 80% of electricity
Vegetable Coal &
14%
Wood
generation, while global average
8% Renewables: is under 20%
47%
Sugar Cane
22%
Petroleum Based
32%
Other Renew ables
4%
Source: Brazilian Ministry of Mines and Energy.
4
10. Significant Potential for Electricity Demand…
Electrical Consumption p/ Capita vs. GDP p/ Capita
(KWh, US)
18,000
Effect of electrically
intensive Canada
16,000 (Aluminum) Canada
14,000
USA
USA
12,000
KWh/hab/year
10,000 Brazil’s per capita electricity
consumption is expected to
Japan
8,000
reach 3.5MWh by 2020 from
France
2.4MWh today
Germany
Russia Spain
6,000 UK
Portugal
Greece
Italy
Chile
4,000
Brazil 2020
China
Argentina
2,000
India Brazil 2010
0
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000
US$/hab/year
Source: IEA 2009: Key World Energy Statistics.
(1) GDP per Capita in US$ covnerted through Purchase Power Parity as of 2000. Data pertains to the year 2007 for all countries except for Brazil.
5
11. …Fueled by Brazil’s Regional Development
Forecasted Energy Demand by Region
(Avg. GW)
CAGR: 4.6% CAGR
74.3 Power demand is expected to
71.3
68.4 +9.7%
grow 4.6% p.a. between 2011
6.5
65.0 6.2 and 2016
61.5 5.9
59.2 5.1 10.7 +5.0%
4.3 10.2
4.1 9.7
9.2
8.8
8.4 11.8 +3.8%
11.3
10.9
10.5
10.1
9.8 While the Southeast and
Midwest account for over 60%
of consumption, it is the
developing regions (N and NE)
40.2 41.9 43.6 45.3 +4.2% that grow at a faster pace
36.9 38.3
2011 2012 2013 2014 2015 2016
Yearly capacity expansions of
Southeast / Mid West South Northeast North 6,2 GW will be required to
supply to this additional demand
Source: EPE.
6
12. Expected Growth in Installed Capacity…
Supply & Demand Balance
(Avg. GW)
Government sponsored
81
oversupply to maintain
competitive prices
77.6 3.4
75.4 2.2
3.3
Contracting energy in reserve
2.2
4.2 74.3
auctions to provide further
71.4
system stability
4.8
1.7
71.3
4.6 68.5
63.7
65.0
Oversupply assumes contracted
1.2
0.9
projects coming online within
59.5 expected timeframe
0.2 61.6
0.1
59.2
2011 2012 2013 2014 2015 2016 Complexity of large projects
Spare Capacity Reserve Energy Supply Demand
being developed could result in
delays
Source: Company Presentations and Wall Street Research.
7
13. …Focused on Alternative Renewables
Breakdown of Capacity By Source Installed
(% of total MW) Capacity /
Potential Key Themes
2010
(GW)
▲Competitive implementation and operating
Nuclear costs
2%
79.1 / ▲Clean energy
Hydro Thermal 260(1) ▼Environmental / social licensing
76% 14% Hydro ▼Uncontrollable source (climate dependent)
▼Difficulties to develop unexplored potential
Renew ables
8% ▲ Not dependent on climate
▼ Environmental issues
22.7 ▼ Natural gas supply restrictions
Thermal ▼ Higher cost of certain sources (diesel, heavy
fuel oil)
2020
▲ Clean energy
▲ Large unexplored potential
Nuclear SHP: 4.1 /
2% 18 ▲ Increased competitiveness due to local
supply of equipment (particularly in wind)
Hydro Thermal Wind: 1.7 /
67% 15% 143 ▲ Government Subsidies
Renewables ▼ Dependent on climate (SHPs – Rainfall /
Biomass: 9.8 /
Wind – Seasonality of generation)
13.5(2)
Renew ables ▼ Current energy price levels are not
16% competitive for some sources
Sources: ANEEL, CRESESB/CEPEL, CENBIO, CPFL.
(1) Estimated totality of hydropower potential, including small hydropower plants (SHPs)
8 (2) Estimated potential of generation from sugarcane biomass
14. Alternative Energy Has Competitive Prices…
Auctions have been adding significant capacity to the Brazil’s generation supply base, most notably in the
thermal and renewable sectors.
Auctions(1) Price Evolution
(R$/ MWh)
Assured Energy per Source (avg. GW)
1.3% 0.1%
$150 R$145.66
(11%)
2009 0.8 GW
98.6%
$120
2% (22%)
12% R$101.34
$90
2010 2.6 GW 51%
51%
35%
$60
11% 9%
9%
$30
2011 2.3 GW
40%
40% 40%
$0
2009 2010 2011
Hydro Small Hydro Biomass
Wind Gas-Fired
Source: CCE, Citi estimates and Wall Street Research.
(1) Considers new energy (LEN), reserve energy (LER) and alternative energy (LFA) auctions
(2) Excluding Belo Monte Plant
9
15. …Which Have Been a Governmental Concern
Increasing Government intervention is changing he structure of the power sector, and will demand strong
efforts towards efficiency gains to maintain attractive levels of return.
Changes Impacts
A Tariff Reviews
• Regulatory WACC reduction from ▼ Pressure for efficiency gains
Distribution 9.95% to 7.15%
▲ M&A potential - Synergies
• X-Factor
B Concession Renewal
• No capital remuneration in tariffs (cost- ▼ Reduction of ~20% in regulated
based model) power prices(1)
Generation • Segment becomes regulated upon ▼ Increase in consumption could
renewal (optional) surpass projected demand
• Reduction of regulatory charges ▼ Reduced competitiveness of free
market
▼ Pressure for efficiency gains
• No reimbursements for assets built ▼ Lower margins / dividends
Transmission before 1999
▼ Single digit returns on new projects
• Cost-based model
▼ Lower cash flow for companies
which choose to renew, hindering
their ability to invest in new projects
(1) Estimated joint impact of regulatory changes and generation / transmission costs
10
17. 4. Oil & Gas Sector Overview: Perspectives and Challenges
18. Brazil to Become a Top O&G Player
Pre-Salt: a Structural Change
Worldwide Oil and Gas Reserves (bn boe)
Russia 335
Iran 312
In the past 5 years, over 50% of oil
Saudi Arabia 311
discoveries were in deep waters.
Qatar 176
Brazil represents 63% of such discoveries
Brazil (Post Tupi) 145
UAE 136
Iraq 134
Kw ait 112
USA 69
Nigeria 68 Forecasts suggest that, with the
Libya 53 development of recent finds, Brazil will be
Kazakhstan 51 the non-OPEC country with greatest
Turmenistan 48 ~9.7x
increase in production by 2030
Canada 44 Adding pre-salt discoveries
Algeria 39
China 29
Indonesia 23
Australia 22
Malaysia 20
Norw ay 19 At current production rates, proven reserves
Egypt 17 would last for around 19 years
Brazil 15
Azerbaijan 15
Source: ODS-Petrodata, Riglogix, Wall Street Research, BP Statistical Review of World Energy (2010) and Petrobras’s filings.
12
19. O&G Production Should Outpace Global Producers
Brazil Oil Production (MBbl/d)
With increase in production, Brazil has
become self-sufficient and is now a net
6.1
exporter of oil
5.9
5.5
6 %
2.
R :1 4.9
C AG
4.4
Additional production will come from deep
3.8 exploration, in which Petrobras has an
3.5
acknowledged expertise, being the leading
CAGR: 5.0%
offshore operator measured by production
2.8
2.5
and number of offshore facilities
2.1 2.1
2.0
1.8
Brazil is expected to produce 6.1 MBbl/dof
by 2020, of which 4.2 MBbl/dof will come
from Petrobras
2008 2009 2010 2011 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E
Source: Wall Street Research.
13
20. Brazil: Oil and Natural Gas Reserves are concentrated in RJ
AM CE
RN
AL
SE
BA
Natural Gas Reserves Oil Reserves
ES
59.2%
SP 82.8%
Total:
7.4% RJ Total: 0.4%
852,147 m m m ³ 0.6%
PR 28,467 m m boe 0.3%
6.2% 0.7%
11.1% SC
9.5%
8.2%
10.3%
AM NE ES RJ SP S
Source: ANP.
14
21. Brazil: On Track to Become a Major Consumer of Oil
10 Largest Consumers of Oil in 2011
(Bubble sizes represent amount of Oil consumed in 2011)
9%
Saudi Arabia The expansion of the middle
China
China class, increased credit
7% availability, and record auto
Annual growth in demand for Oil 2005–2011
sales in recent years drive rapid
increases in fuel demand
India
India
5%
Brazil
3% Gasoline and diesel demand
Russia have grown at an average pace
Canada
of 15.9% and 6.3%, respectively,
1% in the last 3 years
South Korea
(2)% 0% 2% 4% 6% 8% 10% 12% 14% 16%
(1)% Annual GDP growth 2005–2011
USA
Germany Between 2011-2020, demand for
(3)% Bubble sizes represent ammount of Oil consumed in 2011
oil subproducts are expected to
grow 4.5% p.a.
Japan
(5)%
Source: BP Statistical Review and World Bank.
15
23. Major Investments In The Sector
Investment breakdown until 2016
(%)
US$236.5 bn
Others
7%
Bio-Fuels
1%
Gas & Energy
6% Between 2012 – 2016 Petrobras will
invest US$236.5 bn in all areas of
production and refinement of O&G; this
presents an outstanding opportunity for all
sectors related to the O&G industry.
E&P
Dow nstream & Logistics 56%
30%
Source: Petrobras.
17
24. E&P: Complex Offshore Exploration Brings Challenges
Investment breakdown until 2016
(%)
The exploration of offshore reserves so far
from the shore poses many challenges,
US$131.6 bn namely in logistics, which will demand
heavy investments
Exploration
19%
Local content requirements imposed by the
government could cause delays and cost
overruns
Infrastructure and
Production
Support
Development
69%
12% Focus on pre-salt discoveries resulted in
lack of maintenance investments in existing
fields, which led to production drops
Royalties imbroglio has hindered new
bidding rounds by ANP
Source: Petrobras.
18
25. Downstream: Much Needed Modernization to Take Place
Investment breakdown until 2016
(%)
Current installed capacity is outdated (last
refinery built in the 80’s)
US$71.6 bn
Refineries have low complexity indexes and
Improvement cannot efficiently process heavy crudes
17%
Quality & Fast growing demand, coupled with lack of
Conversion
21%
investments in additional supply, has made
Brazil become an importer
Refining Capacity
Expansion
44%
Logistics for Oil Government intervention in pricing policy
8% has negative impacts on returns and cash
Others
flows.
Petrobras’ investment plan foresees
additional capacity of 1.4 Mbbl/d, reaching
3.4 Mbbl/d by 2020.
Source: Petrobras.
19
26. Gas & Energy: Logistics is the Bottleneck
Investment breakdown until 2016
(%)
Despite substantial natural gas reserves,
production has grown at a slow pace due to
US$13.5 bn the lack of investments in logistics
Expansion -
Natural gas accounted for only 9% of
Regassification energy consumption in 2011, versus 51% in
14%
Argentina
Expansion - Gas
Chemical
42%
Expansion - Petrobras controls most of the country’s
Natural Gas
Logistics
reserves, is responsible for the majority of
17% production and imports, controls the
national transmission network, and holds
stakes in 2/3 of state-owned natural gas
Expansion - companies
Others Electric Energy
15% Generation
12%
The company’s investment plans foresees
relevant expansions, reaching 3.4 bcf/d of
production by 2020
Source: Petrobras.
20
27. Biofuels: Promise for the Future
Investment breakdown until 2016
(%)
Brazil’s leading role as a producer of
ethanol from sugarcane places it as the 2nd
US$2.5 bn largest producer of biofuels behind the US
Corporate
The country also stands out in biodiesel and
0.4% is expected to become the largest producer
Agricultural Supply in 2012. It is currently the largest consumer
16% in the world.
Biodiesel
11% The country benefits from favorable climate,
Ethanol
73%
availability of arable land, and efficient
technology for crop cultivation
Mandatory biofuel blends in gasoline and
diesel are important drivers of expected
growth in upcoming years
Source: Petrobras.
21
28. Extensive Government Presence in O&G
The Brazilian Government plays a significant role in the local O&G industry, both in terms of legislation and
through the control of Petrobras.
Local Content Requirement Other Policies & Legislation
Local Content Requirement laws stipulate that a minimum percentage A Fixed Fuel Prices
of equipment and services contracted by an operator must be
supplied by local companies
• Government policy regulates downstream
prices
Local Content • Despite recent readjustments (after 6 years),
(%) 62% there is still a 21% deficit to import prices
+7 p.p.
E&P
55% B Pre-Salt Operation
• Proposed legislation foresees product sharing
2004 2011
contracts, by which Petrobras would hold a
minimum of 30% of any new pre-salt
+10 p.p. 92%
reservoirs
Supply
• Petrobras would also be the sole operator of
82%
PSAs
2004 2011
C Transfer of Rights
+20 p.p.
90% • Agreement made with Petrobras by which the
70%
Government assigned the right to explore pre-
Energy
Gas &
salt areas subject to a maximum production of
5,000 Mboe for US$ 42.5 bn.
• Subsequent price and volume revision could
2004 2011
trigger value adjustments
Source: ANP and Wall Street Research
22