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Page 1: Roadshow - Europa
Page 2: Roadshow - Europa

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Summary

2007 Results

Investment Case CPFL Energia

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CPFL Energia will invest R$ 5 billion in the next 5 years

CPFL Energia’s Estimated Capex

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Summary

2007 Results

Investment Case CPFL Energia

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Competitiveness + Strategic Positioning = Sustainability

CPFL Energia’s investment case combines current portfolio growth…

Current portfolio

Distribution

• Organic growth and market-share leader (13.8%)

• Operational efficiency: outperforming the Reference Company costs

• Gains from acquired companies’ integration

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Private group leader in the distribution market - High market growth

Concession Area Sales – 2007

6.0%1

Brazil5.4%

5.7%

Southeast5.0%

8.3%

South5.3%

CPFL Energia’senergy sales in 2007 had higher growth

than Brazil, Southeast and South

regions2

12.4%

With acquisitions Without acquisitions

Residential6.9%

13.5%

Commercial6.9%

12.5%

Industrial-1.9%4.8%

Rural4.4%

27.7%

Others2.8%

11.1%

TUSD15.2%

17.2%

1) Excluding the acquisition of the additional stake in RGE and the acquisitions of CPFL Santa Cruz and CMS Energy Brasil2) Comparative between CPFL Energia and Southeast and South Regions, considering the distribution companies of each region only14

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Market growth with scale gains and operating efficiency

1) Considers 100% of RGE, except for Concession Area Sales 2) Data basis: Jun 2004 3) Considers 67.07% of RGE

DISTRIBUTION

Gains from acquired companies’ integration

• Organizational restructuring

• Improvement in the quality of services and operational management

• Centralization and optimization of processes: synergy and productivity gains in operational and administrative processes (supply, human resources and infrastructure)

• IT optimization: software’s licenses and support and programming services

• Cost of debt, banking taxes and insurance costs reduction

• Tax credit’s optimization

• Delinquency recovery

1.6 p.p.13.8%0.8%0.8%12.2%Market Share

33,2483

5,411

165,8272

523

IPO – Sep/041

4,282

459

15,332

-

Organic Growth

2,866

350

14,196

45

Growth by Acquisition

46,475

6,256

196,749

568

Dec/07

39.8%Concession Area Sales (GWh/year)

15.6%Customers (thousand)

18.6%Distribution Network (km)

8.6%Municipalities (#)

Var. %

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Market growth with scale gains and operating efficiency

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Market growth with scale gains and operating efficiency

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Competitiveness + Strategic Positioning = Sustainability

CPFL Energia’s investment case combines current portfolio growth…

Current portfolio

Generation

Distribution

• High installed capacity growth

• High EBITDA margin

• Long term energy contracted at attractive prices

• Addition of 150 MW in 2008 (+9.4%) and 436 MW in 2010 (+ 25.1%)

• Organic growth and market-share leader (13.8%)

• Operational efficiency: outperforming the Reference Company costs

• Gains from acquired companies’ integration

18

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Competitiveness + Strategic Positioning = Sustainability

CPFL Energia’s investment case combines current portfolio growth...

• Market share leader: 23%

• Expertise in free market sales and Value Added Services

• Consistent results

Current portfolio

Generation

Distribution

Commercialization

• Organic growth and market-share leader (13.8%)

• Operational efficiency: outperform the Reference Company costs

• Gains from acquired companies integration

• High installed capacity growth

• High EBITDA margin

• Long term energy contracted at attractive prices

• Addition of 150 MW in 2008 (+9.4%) and 436 MW in 2010 (+ 25.1%)

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Captive and Free Market’s Sales Evolution in Brazil

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• 23% market-share

• 91 clients in the free market in 2007

• 17 clients outside the Group’s concession area

• No fixed assets

Commercialization business is CPFL’s key differential

• 2007 EBITDA margin of 35.5%

• 11% of Group’s EBITDA in 2007 (R$ 357 million)

• 13% of Group's Net Income in 2007 (R$ 241 million)

• Expansion of alternative energy source market: biomass and SmallPower Plants

• Diversification and expansion of value-added services (200 projects with sales of R$ 49 million in 2007)

Free Market Energy Sales (GWh)1

1) Including CPFL Sul Centrais Elétricas sales to free market 2) Don't consider eliminations

Marketleader

Success in free market

Contribution to the Group’s results2

Growth prospects

Operations based on competitiveness and sustainability

2004 2006

3,372

9,334

2005

438

7,120

2007

8,951

2004

2007

+ 165%

22

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Competitiveness + Strategic Positioning = Sustainability

Differentiated Corporate Governance: Level III ADR and Novo Mercado

CPFL Energia’s investment case combines current portfolio growth…

• Market share leader: 23%

• Expertise in free market sales and Value Added Services

• Consistent results

• Differentiated Corporate Governance: Level III ADR and Novo Mercado

• Listed in the main indexes: MSCI, Ibovespa, IEE and others

• Free Float above 25%

• Wide analysts coverage: 25 institutions issuing reports

Current portfolio

Generation

Distribution

Corporate Governance

Commercialization

• Organic growth and market-share leader (13.8%)

• Operational efficiency: outperforming the Reference Company costs

• Gains from acquired companies’ integration

• High installed capacity growth

• High EBITDA margin

• Long term energy contracted at attractive prices

• Addition of 150 MW in 2008 (+9.4%) and 436 MW in 2010 (+ 25.1%)

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43,7%

23,7% 23,9%

9,1%-2,6%-4,6%

IBOVESPA IEE CPFE3

CPFL Energia’s – Daily average volume

CPFL Energia presents a

substantial increasein daily averagevolume in 2007

CPFL Energia : Investment Opportunity

Shares Performance - NYSE1Shares Performance - Bovespa1

+363%

MSCI Indexes

1) Closing price adjusted for dividends

2007 1Q08 2007 1Q08 2007 1Q08

+132%

+160%

7,027

3,506

3,521

2005

17,270

8,128

9,141

2006

+58%

+116%

32,561Total

12,807NYSE - ADR

19,755Bovespa - ON

2007

6,4%

63,9%52,6%

12,0%-4,7%-7,6%

Dow Jones DJ Br 20 CPL

2007 1Q08 2007 1Q08 2007 1Q08

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Dividend Policy: minimum 50% of

Net Income in semi-annual

basis

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Competitiveness + Strategic Positioning = Sustainability

Differentiated Corporate Governance: Level III ADR and Novo Mercado

• Market share leader: 23%

• Expertise in free market sales and Value Added Services

• Consistent results

• Differentiated Corporate Governance: Level III ADR and Novo Mercado

• Listed in the main indexes: MSCI, Ibovespa, IEE and others

• Free Float above 25%

• Wide analysts coverage: 25 institutions issuing reports

Current portfolio

Generation

Distribution

Corporate Governance

Commercialization

• Organic growth and market-share leader (13.8%)

• Operational efficiency: outperforming the Reference Company costs

• Gains from acquired companies’ integration

• High installed capacity growth

• High EBITDA margin

• Long term energy contracted at attractive prices

• Addition of 150 MW in 2008 (+9.4%) and 436 MW in 2010 (+ 25.1%)

New portfolio

Distribution

• Strategic distribution's companies

• “Big bang”

• “Beach head”

CPFL Energia’s investment case combines current portfolio growth with acquisition opportunities

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Spreading proposes consolidation opportunities

Distributors (#) 64

2007

61

376.9

Clients (million)

Distributed Energy (TWh)

Distribution Business:

Brazilian market has 64 distribution’s companies

Market Breakdown

The 5 largest groups have 50% of market-share

State-owned companies: 34%

Private Company: 66%

1) 1Q07Source: Aneel

Distribution Market Share1 %

COPEL 6.7%

CELESC 4.8%

EdB 5.7%

ENDESA 4.2%

Ashmore Energy3.7%

Others 33.1%

CPFL Energia 13.8%

Brasiliana Energia 12.1%

CEMIG Companhia Energética 8.6%

Neoenergia7.3%

Distribution Market Share1 %

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Opportunities in distribution business in SP State

Distribution companies in SP State Rationale

São Paulo State Map

Grupo RedeElektro

Eletropaulo

Grupo CPFLBandeirante

• Scale gains, with optimization of infrastructure and administrative and operational processes

• Efficiency gains, with implementation of the CPFL standards

Key indicators – 2007

4,8

3,0

3,7

12,1

Market share

%

3,23,3Grupo Rede

1,42,0Bandeirante

2,02,3Elektro

5,77,1Eletropaulo

Customers

# million

Net Revenue

R$ billion

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29 Source: Atlas de Energia Elétrica do Brasil – Aneel, 2005

Cooperatives of Eletrification Breakdown of Cooperatives by Region

South34%

Northeast33%

Southeast18%

Mid-West14%North

1%

5 states with larger number of

cooperatives

Private Network

• Into CPFL’s concession area there are 35,000 Km of private network (equivalent to 17% of CPFL Energia’s total network)

• Potential investment: R$ 400 million

• Additional amount to the reference company

125 cooperatives in Brazil: SP and RS States concentrate 26% of this market

Opportunities in distribution business: cooperatives and private network

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Competitiveness + Strategic Positioning = Sustainability

Differentiated Corporate Governance: Level III ADR and Novo Mercado

• Market share leader: 23%

• Expertise in free market sales and Value Added Services

• Consistent results

• Differentiated Corporate Governance: Level III ADR and Novo Mercado

• Listed in the main indexes: MSCI, Ibovespa, IEE and others

• Free Float above 25%

• Wide analysts coverage: 25 institutions issuing reports

Current portfolio

Generation

Distribution

Corporate Governance

Commercialization

• Organic growth and market-share leader (13.8%)

• Operational efficiency: outperforming the Reference Company costs

• Gains from acquired companies’ integration

• High installed capacity growth

• High EBITDA margin

• Long term energy contracted at attractive prices

• Addition of 150 MW in 2008 (+9.4%) and 436 MW in 2010 (+ 25.1%)

New portfolio

Distribution

• Strategic distribution's companies

• “Big bang”

• “Beach head”

CPFL Energia’s investment case combines current portfolio growth with acquisition opportunities

Generation

• Existing assets

• New energy auctions

• Alternative sources: SPP and biomass

• Jirau and Belo Monte HPPs

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Generation Companies (#) 1,695

1Q08

108,852Installed Capacity (MW)

Generation Business:

Brazilian market has 1,600 generation companies. The public sector concentrates 70% of these assets

Market Breakdown

The 5 largest groups have 50% of the market

State-owned companies: 70%

Private Company: 30%

Source: AneelMarket breakdown: Acende Brasil

Others 35%

Chesf 10%

Furnas 9%

Eletronorte 9%

CESP 7%Itaipu 7%

Cemig 6%

Tractebel 6%

Copel 4%

AES Tietê 3%

Duke 2%

CPFL Energia 2%

Generation Market Share %

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New HPP’s projects opportunities

Hydroelectric projects qualified by EPE in the last auctions that can be bid by ANEEL in the next New Energy Auctions :

• Higher knowledge about the project

• Better valuation of engineering and environmental risks

• Longer term to analysis and project economic feasibility

CPFL analyses with advance and in details the generation projects that will be bid by ANEEL – main benefits:

93,0Verde River/GOHPP Salto do Rio Verdinho

108,0Verde River/GOHPP Salto

80,0Paraiba do Sul River/RJHPP Barra do Pomba

50,0Paraiba do Sul River/RJHPP Cambuci

350,0Iguaçu River/PRHPP Baixo Iguaçu

65,0Claro River/GOHPP Caçu

90,0Claro River/GOHPP Barra dos Coqueiros

60,0Chopin River/PRHPP São João

53,3Chopin River/PRHPP Salto Grande

45,0Chopin River/PRHPP Cachoeirinha

Instaled Capacity (MW)RiverProjects

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Small Power Plants

Discarded projects because didn’t reach the economic feasibility: high investments, PPA's already signed with unattractive prices or impracticable environmental requirements

It was established partnership to studies and implementation of SPPs in the South Region

Green Field Projects

CPFL has analyzed around 70 SPP’s projects in

Southeast, South and Center-West regions

4 feasible in short term: 76 MW (CPFL’s stake)Technical studies and

enrollment in ANEEL for 10 projects

Feasible projects in the short term are in progress.

The conclusion of the Basic Projects and Environmental Studies is

estimated to 2008, when they will be submitted to the ANEEL’s and

FEPAM’s/IBAMA’s approval

Estimated investment:

R$ 285 million

Technical studies and

enrollment in ANEEL

OK

Basic projects and

environmental studies

(necessary for the previous license)

ANEEL’s and Fepam’s/ IBAMA’sApproval

2008 2008/09

Installation License and construction of the SPP´s

24 months(e)

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Small Power Plants

Existing Assets

Feasibility Studies of Guaporé and Andorinhas

SPP’s repowering:

Addition of 4,2 MWmedium:R$ 5 million/year

CPFL Jaguariúna:9 SPP’s in São Paulo

and Minas Gerais States

SPPs didn’t have assured energy approved by the Government (MME) –they are included in the distribution

Installed capacity: 24,283 MW

Estimated assured energy for this SPPs (according to some studies): around 8.97 MWmedium

ANEEL’s approval expectation: 1H08

Annual estimated generation revenue: R$ 10 million

7.41

5.00

2.41

Forecast

Assured Energy (MWmedium)Installed Capacity (MW)

SPP

5.281.081.18Total

3.780.620.67Guaporé

1.500.460.51Andorinhas

ForecastCurrentCurrent

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Jirau and Belo Monte HPP

2nd largest HPP in BrazilAuction(e): 2H09/2010

2nd HPP in Madeira ComplexAuction: May 12th/08

Belo Monte HPP

State: Pará

Installed capacity: 11,182 MW

Viability Studies: Eletronorte

CAPEX(e): R$ 37 bi

Jirau HPP

State: Rondônia

Installed capacity: 3,300 MW

Assured energy: 1,966.4 MWmedium

Commercial operation (1st turbine): 48 months

Construction period: 90 months

CAPEX(e): R$ 11 bi

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Competitiveness + Strategic Positioning = Sustainability

Differentiated Corporate Governance: Level III ADR and Novo Mercado

• Market share leader: 23%

• Expertise in free market sales and Value Added Services

• Consistent results

• Differentiated Corporate Governance: Level III ADR and Novo Mercado

• Listed in the main indexes: MSCI, Ibovespa, IEE and others

• Free Float above 25%

• Wide analysts coverage: 25 institutions issuing reports

Current portfolio

Generation

Distribution

Corporate Governance

Commercialization

• Organic growth and market-share leader (13.8%)

• Operational efficiency: outperforming the Reference Company costs

• Gains from acquired companies’ integration

• High installed capacity growth

• High EBITDA margin

• Long term energy contracted at attractive prices

• Addition of 150 MW in 2008 (+9.4%) and 436 MW in 2010 (+ 25.1%)

New portfolio

Distribution

• Strategic distribution's companies

• “Big bang”

• “Beach head”

CPFL Energia’s investment case combines current portfolio growth with acquisition opportunities

Generation

• Existing assets

• New energy auctions

• Alternative sources: SPP and biomass

• Jirau and Belo Monte HPPs

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