citi 2010 brazilian_utilities_conference_07042010
TRANSCRIPT
Citigroup's Utilities DayGustavo Estrella - IRO
• Energy market is concentrated in the most developed regions of Brazil (South/Southeast)
• Market cap of R$ 18,5 billion in March, 20101
• Listed on Bovespa’s Novo Mercado and NYSE’s ADR Level III
• Differentiated Dividend Policy: minimum payment of 50% of the net income on a semi-annual basis
• Strong growth in the generation 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%), Lajeado HPP’s stake (7%) and EPASA TPP’s stake (51%) in the last 3 years
• First company in the Brazilian electric sector to negotiate carbon credits, through a run-of-stream HPP
• Investments in energy generation from biomass: Baldin Biomass TPP, Baía Formosa Biomass TPP, Pedra BiomasTPP, Buriti Biomass TPP and Ipê Biomass TPP
• 188 MW sold in the Wind Energy Auction in Dec, 2009
Highlights
1) Share price March 2nd 2010: R$ 38,48/ON
The largest private player in the Brazilian Electric Sector
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Brazilian’s largest player in distribution and commercialization businesses
CPFL 2%1
Others 98%
CPFL Energia
Others 79%
CPFL 21%
Others 87%
CPFL 13%1
Market-share
DistributionCaptive Market and System Charge
• 6.6 million customers• 568 municipalities• Sales of 48,799 GWh²
GenerationFocused mainly in renewables
• 40 HPP operating• 1,737 MW installed capacity• 15 plants under construction
CommercializationEnergy free market and Businesses Units of Services
• 74 free customers• Sales of 10,243 GWh²• Services: revenues of R$ 88 million3
Market leader
4th Brazilian private generator
Market leader
1) Aneel – last available information 2) December/09 – LTM. Concession area sales (excludes CCEE) . 3) LTM4
COMMERCIALIZATION AND SERVICES
GENERATIONDISTRIBUTION
COMMERCIALIZATION AND SERVICES
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Growth in Generation – Investments of R$ 3 billion
Baldin TPP (sugarcane-fired thermoelectric power plant)
• Installed Capacity = 45 MW (Capacity exported to CPFL Brasil = 24 MW/harvest)• CPFL Investment = R$ 103 million (São Paulo State)
Foz do Chapecó HPP (CPFL Stake = 51%)
• Installed Capacity = 436 MW (Assured Energy = 220 avg MW)• CPFL Investment = R$ 1,328 million
EPASA (CPFL Stake = 51%)
• Installed Capacity = 174 MW (Termonordeste and Termoparaíba TPPs)• CPFL Investment = R$ 310 million (Paraíba State)
CPFL Bioformosa TPP (sugarcane-fired thermoelectric power plant)
• Installed Capacity = 40 MW (Capacity exported to CPFL = 25 MW/harvest)• CPFL Investment = R$ 127 million (Rio Grande do Norte State)
CPFL Wind Farms
• Installed Capacity = 188 MW (Commercialized Energy = 76 avgMW) • CPFL Investment = R$ 768 million (Rio Grande do Norte State)
Start-upApril 2010
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Start-up3Q10
Start-up3Q10
Start-upJuly 2011
Start-upJuly 2012
CPFL Bio Pedra TPP, CPFL Bio Buriti TPP and CPFL Bio Ipê TPP
• Installed Capacity = 145 MW (Capacity exported to CPFL = 89 MW/harvest)• CPFL Investment = R$ 366 million (São Paulo State)
Start-up2011/2012
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CPFL presents sales growth in the concession area and in the free market
37,82133,076 31,235 37,32335,24531,778
10,97811,7103,288
11,2309,5857,263
48,79949,033
38,49836,364
46,47541,363
2004 2005 2006 2007 2008 2009
TUSDCAPTIVE
10,2438,9048,9519,334
7,120
3,209
2004 2005 2006 2007 2008 2009
Concession Area Sales – GWh1 Free Market Sales - GWh1
CAGR = 6.1% p.y.
CAGR = 26.1% p.y.
1) Excludes intercompany transactions (consolidation accounting basis), CCEE and generation sales (except to the free market)2) Source: EPE
Concession Area Sales (GWh) – 2009
81) Excludes intercompany transactions (consolidation accounting basis), CCEE and generation sales (except to the free market). 2009 TUSD adjusted (97 CAT Resolution) 2) Source: EPE
-0.5% -1,1%Brazil2
-1.6% -3.9%Southeast2
-2.6% -1.9%South2
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99
1010
279
1,2861,276
1,6411,404
1,021
2004 2005 2006 2007 2008 2009
EBITDA (R$ million)1 Net Income (R$ million)1
2,7652,8083,345
2,789
2,1201,681
2004 2005 2006 2007 2008 2009
CAGR = 35.7% p.y.
Recurring EBITDA Breakdown – 4Q9 or 2009?
CAGR = 10.5% p.y.
1) 2007 and 2008 adjusted by the impact of Law 11,638 and PM 449/08 2) Recurring. Includes tax credit benefits
CPFL presents strong growth of EBITDA and Net Income in the last years
CPFL Energia EBITDA Margin of 29.7%Net Margin of 13.8%2
Commercialization and Services
12%
Distribution63%
Generation25%
Recurring EBITDA Margin 4Q092 Recurring Net Margin 4Q092
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Citigroup's Utilities DayGustavo Estrella - IRO