corporate presentation - may 2014
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Corporate Presentation
May 2014
Light Holdings
2
4
5 6
7
Light in numbers
Amazônia Energia
Renova
Guanhães Energia
Generation
Complexo de Lajes
Distribution RJ State Concession
Area %
Population¹ 16 mn 11 mn 68%
Area¹ 44,000 Km² 11,000 Km² 25%
GDP¹ R$ 407 bn R$ 207 bn 51%
# Consumers 7 mn 4 mn 57%
# Municipalities 92 31 34%
5
HPP Ilha dos Pombos
SHP Paracambi
HPP Santa Branca
1
2
3
1 IBGE (2010)
4
6
7
3
Rankings Among the largest players in Brazil
INTEGRATED¹
Net Revenues 2013* – R$ Billion
GENERATION PRIVATE-OWNED COMPANIES¹
Installed Hydro-generation Capacity (MW) – 2013
37,767
25,777 22,926
21,783 20,391 15,634
15.6
10.6 9.2
7.4 7.1
5,560
2,652 2,241 2,219
1,799 896
DISTRIBUTION²
Energy Consumption in Concession Area** (GWh) - 2013
1 – Source: Companies reports
2 – Source: Relatório do Sistema de Apoio
a ANEEL
* Construction Revenue Included
** Captive Market
*** Considers the 9 MW of Renova’s SHPs
and 19 MW of Brasil PCH
*** 4
14.6
Shareholders Structure Efficient combination of solid industry and financial players
11 Board members: 8 from the controlling
group, 2 independents e 1 employees
nominated
A qualifying quorum of 7 members to
approve relevant proposals such as: M&A
and dividend policy
5
Corporate Governance
General Assembly
Fiscal Council
Board of Directors
Auditors
Committee
Governance and
Sustainability
Committee
Human
Resources
Committee
Finances
Committee
Management
Committee
Chief Executive
Officer
Corporate
Management Officer
João B. Zolini Carneiro Ricardo Cesar C. Rocha Evandro L. Vasconcelos Andreia Ribeiro Junqueira
Fernando Antônio F.Reis Paulo Carvalho Filho Evandro L. Vasconcelos*
Paulo Roberto R. Pinto
Chief
Communications
Officer
Luiz Otavio Ziza Valadares
LGSXY ADR-OTC
Interim*
6
Chief Financial and
Investor Relations
Officer
Chief Legal Officer
Chief HR Officer Chief Distribution
Officer Chief Energy Officer
Chief Business
Officer
Energy Consumption Distribution – Quarter
7
1Note: To preserve comparability in the market approved by Aneel in the tariff adjustment process.
the billed energy of the free customer CSN has been considered back.
TOTAL MARKET (GWh) ¹
Industrial
captive
4.9%
Free
17.1%
Others
captives
13.2%
Commercial
captive
27.6%
Residential
captive
37.3%
+7.8%
6,841 6,180
27.0ºC
28.3ºC
1Q12
6,291 7,374
1Q11
26.9ºC
27.8ºC
+5.4% a.a.
1Q13 1Q14
Market Breakdown
8
RESIDENTIAL INDUSTRIAL COMMERCIAL OTHERS TOTAL
1Q13 1Q14
ELECTRICITY CONSUMPTION (GWh)
TOTAL MARKET – QUARTER
1Q13 1Q14 1Q13 1Q14 1Q13 1Q14 1Q13 1Q14
FREE CAPTIVE
+7.8%
5,572 6,117
6,841
1,269 1,257
7,374
+6.1%
913 970
966
53 55
1,025
+8.3%
2,093
215 233
2,267
359 360
1,359
1,000 970
1,330
+13.6%
2,423
2,752
-2.1%
1,877 2,034
Losses and Colection Encouraging results already appear from an integrated approach
9
LOSS (12 MONTHS)
% Non-technical
losses/ LV Market
Non-technical losses GWh Technical losses GWh
% Non-technical losses /
LV Market - Regulatory
42.2%
43.7%
31.6%
5,738
2,614
8,552
44.2%
Mar/13 Jun/13
42.4%
6,029
2,618
8,748
Dec/13
5,955
2,793
8,352
Mar/13
44.9%
5,953
2,629
8,647
Sep/13
5,905
2,647
8,582
- 2.5%
PCLD/GROSS REVENUE
(BILLED SALES) - 12 MONTHS
Mar/11 Mar/1 3 Mar/12
3.0% 2.8%
1.8%
-1.0 p.p.
COLLECTION RATE
12 MONTHS
99.5% 98.7%
Mar/13 Mar/14
Macro Strategy Revenue shielding through efficient combination of electronic meters and
effective workforce management
Out of Communities
Communities
CLIENTS ENERGY AND STATUS
Retail and residential clients
(Low Voltage)
4,100,000
Low Voltage
Largest Clients
22,000
Large
Clients
(hight and
med voltage)
7,600
11,500 GWh (48%)
100% Concluded
2,700 GWh (11%)
1/3 as of today until 2015
10,000 GWh (41%)
APZ
10
2009 2010 2011 2012 2013
351
2010 2011 2013 2012
30 7
79
102
227 122
432
197 115
272 330
Mar-14
109
467
358
New Technology Program
Technology used in regions in which conventional measures are not effective
Areas that present high levels of non-technical losses
Light aims to reduce losses through investments in new technologies, integration of operational
activities, increase of public awareness and institutional partnerships with interested agents.
Grid shielding projects
Actual grid Shielded grid
Control room
3 m
9 m
Mechanical Meter Display
Centralized meter
11
Low voltage
Medium voltage
Low voltage
Medium voltage
Focused in areas with 10,000 to 20,000 clients with high level of losses and
delinquency;
Fully-dedicated teams of technicians and commercial agents;
Results constantly and accurately monitored by Light;
Result-linked remuneration for services provided;
27 units implemented with 446,000
clients (11% of total clients);
Additional 200 thousands clients per year.
Zero Losses Area Project: “Light Legal” (APZ – Zero Losses Area)
12
ELECTRONIC
METERS
WORKFORCE
MANAGEMENT
PARTNERSHIP WITH THE STATE
GOVERNMENT
APZ COLLECTION APZ LOSSES
Evolution of APZs Results Significant loss reduction and increasing collection rate
Início da Operação
Início da Operação
Before
50.2 %
20.7%
89.2%
95.9%
Before
100.7%
98.2% 97.9% 98.3%
24.8% 23.6%
22.5%
21.2%
13
Ma
r/1
4
De
c/1
2
Ma
r/1
3
Ju
n/1
3
Se
p/1
3
Ma
r/1
4
De
c/1
2
Ma
r/1
3
Ju
n/1
3
Se
p/1
3
-29.5%
+6.7%
De
c/1
3
99.5%
De
c/1
3
20.3%
31,80%
40,41% 40,41%
31,27% 30,95% 30,53% 30,11% 29,69%
39,92%
38,33%
34,49%
30,60%29,40%
28,20%27,01% 25,81%
39,13%
36,41%
33,00%
2013 2014 2015 2016 2017 2018
Regulatory NT Losses/LV (Flexible) Regulatory NT Losses/LV (Final)
Real NT Losses/LV (forecast Light, Ref. August) Regulatory NT Losses/LV (AP)
Regulatory NT Losses/LV w/ Penalty
31,37% 30,95% 30,53% 30,11% 29,69%
Regulatory Allowance for Non-Technical Losses Higher recognition of losses linked to targets achievement
Additional revenues to be invested in losses combat and booked as
special obligations (ex-RAB)
31,80%
40,41% 40,41%
31,27% 30,95% 30,53% 30,11% 29,69%
39,92%
38,33%
34,49%
30,60%29,40%
28,20%27,01% 25,81%
39,13%
36,41%
33,00%
2013 2014 2015 2016 2017 2018
Regulatory NT Losses/LV (Flexible) Regulatory NT Losses/LV (Final)
Real NT Losses/LV (forecast Light, Ref. August) Regulatory NT Losses/LV (AP)
Regulatory NT Losses/LV w/ Penalty
31,80%
40,41% 40,41%
31,27% 30,95% 30,53% 30,11% 29,69%
39,92%
38,33%
34,49%
30,60%29,40%
28,20%27,01% 25,81%
39,13%
36,41%
33,00%
2013 2014 2015 2016 2017 2018
Regulatory NT Losses/LV (Flexible) Regulatory NT Losses/LV (Final)
Real NT Losses/LV (forecast Light, Ref. August) Regulatory NT Losses/LV (AP)
Regulatory NT Losses/LV w/ Penalty
31,80%
40,41% 40,41%
31,27% 30,95% 30,53% 30,11% 29,69%
39,92%
38,33%
34,49%
30,60%29,40%
28,20%27,01% 25,81%
39,13%
36,41%
33,00%
2013 2014 2015 2016 2017 2018
Regulatory NT Losses/LV (Flexible) Regulatory NT Losses/LV (Final)
Real NT Losses/LV (forecast Light, Ref. August) Regulatory NT Losses/LV (AP)
Regulatory NT Losses/LV w/ Penalty
31,80%
40,41% 40,41%
31,27% 30,95% 30,53% 30,11% 29,69%
39,92%
38,33%
34,49%
30,60%29,40%
28,20%27,01% 25,81%
39,13%
36,41%
33,00%
2013 2014 2015 2016 2017 2018
Regulatory NT Losses/LV (Flexible) Regulatory NT Losses/LV (Final)
Real NT Losses/LV (forecast Light, Ref. August) Regulatory NT Losses/LV (AP)
Regulatory NT Losses/LV w/ Penalty
31,80%
40,41% 40,41%
31,27% 30,95% 30,53% 30,11% 29,69%
39,92%
38,33%
34,49%
30,60%29,40%
28,20%27,01% 25,81%
39,13%
36,41%
33,00%
2013 2014 2015 2016 2017 2018
Regulatory NT Losses/LV (Flexible) Regulatory NT Losses/LV (Final)
Real NT Losses/LV (forecast Light, Ref. August) Regulatory NT Losses/LV (AP)
Regulatory NT Losses/LV w/ Penalty
31,80%
40,41% 40,41%
31,27% 30,95% 30,53% 30,11% 29,69%
39,92%
38,33%
34,49%
30,60%29,40%
28,20%27,01% 25,81%
39,13%
36,41%
33,00%
2013 2014 2015 2016 2017 2018
Regulatory NT Losses/LV (Flexible) Regulatory NT Losses/LV (Final)
Real NT Losses/LV (forecast Light, Ref. August) Regulatory NT Losses/LV (AP)
Regulatory NT Losses/LV w/ Penalty
2013 2014 2015 2016 2017 2018
Regulatory Losses
Target
Regulatory Losses with Penalty
Final Proposal (according to methodology)
Preliminary Proposal (according to methodology)
14
GENERATION
BUSINESS
855 MW Installed Capacity Concessions Expiring Only in 2026
HPP Santa Branca
56 MW HPP Ilha dos
Pombos 187 MW
HPP Fontes Nova
132 MW HPP Underground
Nilo Peçanha - 380 MW HPP Pereira Passos
100 MW
SP
RJ
HPP Santa
Branca
Paraiba do Sul River
HPP Ilha dos
Pombos
100%
100% 100% 100%
Lajes
Complex
100%
16
Re-pricing of existing energy Significant price increase due to replacement of former regulated contracts for new
ones with free clients
Contracted Energy (Free) Hedge Available Energy
CONVENTIONAL ENERGY BALANCE
ASSURED ENERGY (MW average)
17
2014 2015 2016 2017 2018 2019 2020 2021
537
27
511
27 27 27 27 27 27 27
537 537 537 537 537 537 537
468
352 351 309
239 228 228
42
158 159 201
271 282 282
Generation Expansion Growth in renewable generation with experienced partners
Project Installed Capacity
(MW)
Assured Energy
(MWaverage) Operational Start Stake
Paracambi 25 20 2012 51%
Renova 425 (in operation)
1,806 (contracted)
235 (in operation)
921 (contracted)
2008 - 2012
2014 – 2018
21.86%
Belo Monte 11,223 4,571 2015 2.49%
Guanhães 44 25 2014 51%
Lajes 17 16 2015 100%
18
Evolution of Installed Capacity leading to a more
balanced portfolio
(MW)
Installed
Capacity Capacity
After
Expansion
¹ Considering 51% stake
² Considering 21.86% stake
³ Considering 2.49% stake
+ 74.3%
(+) Belo
Monte³
(+) SHP
Paracambi¹ (+) SHP
Lajes (+) Guanhães¹ (+) Renova²
1,675
13 93* 17
395
280
855
(+) Renova² Current
Capacity
* 9 MW SHP + 65 MW Wind Farm (since jul/12)
961
22
19
RESULTS
Net Revenue
21
Industrial (Captive)
5.3%
NET REVENUE (R$MN)
Generation
9.4%
Distribution
77.6%**
NET REVENUE BY SEGMENT (1Q14)*
Commercialization
13.1%
* Eliminations not considered
** Construction revenue not considered
NET REVENUE FROM DISTRIBUTION (1Q14)
Commercial (Captive)
30.0%
Others (Captive) 11.2%
Network Use (TUSD) (Free + Concessionaires)
6.7%
Residential (Captive) 46.8%
Construction Revenue
Revenue w/out construction
revenue
1Q14 1Q13
1,765
+18.8%
2,119
1,922 2,282
157 164
Operating Costs and Expenses
22
Manageable
(distribution): R$ 351
(18.5%)
Generation and
Commercialization: R$ 315
(16.6%)
Non manageable
(distribution**): R$ 1,227
(64.8%)
* Eliminations not considered
** Construction revenue not considered
DISTRIBUTION PMSO COSTS (R$MN) COSTS (R$MN)*
1Q14
R$ MN 1Q13 1Q14 Var.
PMSO (184.0) (187.8) 2.1%
Provisions (45.2) (65.3) 44.3%
PCLD (29.0) (25.3) -12.8%
Contingencies (16.2) (40.0) 146.6%
Depreciation (80.6) (85.4) 6.0%
Other operational/
revenues expenses (7.3) (12.1) 66.3%
Total (317.1) (350.6) 10.6%
184 188
+2.1%
1Q14 1Q13
EBITDA BY SEGMENT (R$ MN)
23
1Q13 1Q14
453
355
+ 27.5%
Generation and Commercialization
Distribution
44.0%
56.0%
36.2%
63.8%
CONSOLIDATED EBITDA 1Q14 1Q13 Var.
Distribution 254.8 228.1 11.7%
EBITDA Margin % 14,6% 14.3% 0.2 p.p.
Generation 182.8 119.3 53.2%
EBITDA Margin % 86.5% 82.1% 4.4 p.p.
Commercialization 17.5 9.9 76.9%
EBITDA Margin % 6.0% 6.3% -0.3 p.p.
Other and Eliminations (2.2) (2.2) 0.4%
TOTAL 452.9 355.1 27.5%
EBITDA Margin % 21.4% 20.1 1.2 p.p.
Adjusted EBITDA
EBITDA
1Q13
EBITDA
1Q14
Net
Revenue
Non-
Manageable
Costs
Manageable
Costs
(PMSO)
Provisions Regulatory
Assets and
Liabilities
Regulatory
Assets and
Liabilities
Adjusted
EBITDA
1Q13
Adjusted
EBITDA
1Q14
1Q13 / 1Q14
(R$ MN)
24
EBITDA Ajustado -
2T11
Ativos e Passivos
Regulatórios
EBITDA -2T11
Receita Líquida
Custos Não Gerenciáveis
Custos Gerenciáveis
(PMSO)
Provisões EBITDA -2T12
Ativos e Passivos
Regulatórios
EBITDA Ajustado -
2T12
101
456
355
354 (217)
(8)
(18)
435
- 4.7%
+ 27.5%
453
(13) (4) (20) (2)
Other
Operacional
Revenues
Equity
Pikup
Adjusted Net Income 1Q13 / 1Q14
(R$ MN)
25
EBITDA Ajustado -
2T11
Ativos e Passivos
Regulatórios
EBITDA -2T11
Receita Líquida
Custos Não Gerenciáveis
Custos Gerenciáveis
(PMSO)
Provisões EBITDA -2T12
Ativos e Passivos
Regulatórios
EBITDA Ajustado -
2T121Q13 1Q14 EBITDA Financial
Result
Taxes Depreciation Regulatory
Assets and
Liabilities
Regulatory
Assets and
Liabilities
Adjusted Net
Income
1Q13
Adjusted Net
Income
1Q14
+129.5%
145
67
79
60 (51) (5)
181
(12)
168
+15.9%
98
Dividends
26
Indebtedness
Average Term: 3.9 years
AMORTIZATION SCHEDULE* (R$ MN)
Nominal Cost Real Cost
NET DEBT
* Principal only
COST OF DEBT
2012 2011 1Q14 2007 2008 2009 set/10
Custo Real Custo Nominal
2013
Net Debt / EBITDA
2009 2010 2011 2012
Custo Nominal Custo Real
2009 2010 2011 2012
Custo Nominal Custo Real
2009 2010 2011 2012
Custo Nominal Custo Real
Mar/13*
2.24%
8.21%
3.63%
10.01%
4.25%
11.03% 9.68%
3.55%
2014 2015
494
779
1,017
811 899
441 450 450 565
2016 2017 2018 2019 2020 2021 After
2021
*Considering Hedge
TJLP
13.5%
CDI
73.9%
IPCA
10.7%
Others
1.5%
U$/Euro
0.4%
20092010
Custo Real
Custo Real
2.84 2.90
Mar/14 Dec/13*
5,096.8 5,249.5 5,341.8
2.73
20092010
Custo Real
Custo Real
27
*With Pension Fund
Investments
CAPEX (R$ MN) CAPEX BREAKDOWN
(R$ MN)
1Q14
Generation
3.5
Administration
3.3
Others
2.8
Develop. of
Distribution
System
106.6
Losses
Combat
48.9
Investments in Electric Assets (Distribution)
Commerc./
Energy Eficiency
10.5
2010
929
701
2011 2012
797
694
103
519
182
775
154
713
132
845
+7.9%
2013 2014E
163
1Q13 1Q14
36 17
127 158
1,055
176
28
Why invest in Light?
Major upcoming events
Integration of favelas
Pro-business environment
New plants investments
Expansion of the existing ones
Market growth
Economic
Transformation in
the Concession
Area
Progress in the Technology
Program
New network and meters in the
pacified favelas
Smart metering development
“Zero Losses Area” Program
Energy
Losses Reduction
Investment in Renova, Belo Monte
e Guanhães (total of 697 MW)
SHP Lajes under construction
(17MW).
Growth in the
Generation
Business
New PPAs starting in 2014
Revenues increase with no
aditional costs.
Very active trading subsidiary
Repricing of
Existing Energy
Listed in “Novo Mercado” of
Bovespa;
Board Committees very active
Included in the Sustainability
Index (ISE) of Bovespa for the
seventh year.
Best-in-Class
Corporate
Governance
Sound Dividend Policy: minimum
50% of net income;
Average payout since 2007: 90%
Dividend track
Record
29
Important Notice
This presentation may include declarations that represent forward-looking statements according to Brazilian regulations and
international movable values. These declarations are based on certain assumptions and analyses made by the Company in
accordance with its experience, the economic environment, market conditions and future events expected, many of which
are out of the Company’s control. Important factors that can lead to significant differences between the real results and the
future declarations of expectations on events or business-oriented results include the Company’s strategy, the Brazilian and
international economic conditions, technology, financial strategy, developments of the public service industry, hydrological
conditions, conditions of the financial market, uncertainty regarding the results of its future operations, plain, goals,
expectations and intentions, among others. Because of these factors, the Company’s actual results may significantly differ
from those indicated or implicit in the declarations of expectations on events or future results.
The information and opinions herein do not have to be understood as recommendation to potential investors, and no
investment decision must be based on the veracity, the updated or completeness of this information or opinions. None of the
Company’s assessors or parts related to them or its representatives will have any responsibility for any losses that can
elapse from the use or the contents of this presentation.
This material includes declarations on future events submitted to risks and uncertainties, which are based on current
expectations and projections on future events and trends that can affect the Company’s businesses. These declarations
include projections of economic growth and demand and supply of energy, in addition to information on competitive position,
regulatory environment, potential growth opportunities and other subjects. Various factors can adversely affect the estimates
and assumptions on which these declarations are based on.
30
Contacts
João Batista Zolini Carneiro CFO and IRO
Gustavo Werneck Superintendent of Finance and Investor Relations
+55 21 2211 2560
gustavo.souza@light.com.br
Mariana da Silva Rocha IR Manager
+ 55 21 2211 2814
mariana.rocha@light.com.br
31
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