Post on 06-Dec-2014
description
March, 2013September, 2013
II BTG Pactual Utilities Days
Eduardo TakeitiInvestor Relations Officer
2
33 1) Termoparaíba and Termonordeste thermoelectric facilities; 2) CPFL Energia has a 58.8% indirect interest in CPFL Renováveis through CPFL Geração.
Free Float
DIS
TR
IBU
TIO
N 100%
100%
100%
100%
100%
100%
100%
100%
65%
25.01%
48.72%
52.75%
51%
CO
NV
EN
TIO
NA
L G
EN
ER
ATIO
N
100%
100%
99.95%
100%
CO
MPETIT
IVE S
UPPLY 100%
100%
REN
EW
AB
LES
59.93%
Investco
Paulista Lajeado5.94%
SER
VIC
ES 100%
100%
100%
58.8%2
100%
30.0% 15.1% 30.5%24.4%
Nect Serviços100%
1
Corporate structure
HPP Foz do Chapecó
HPP Barra Grande
HPP Castro Alves
HPP Monte Claro
HPP 14 de Julho
HPP Campos Novos
HPP Luis Eduardo
Magalhães
CPFL Piratining
a
HPPSerra da Mesa1
CPFLPaulista
RGE
19 SHPPs (CPFL
Renováveis)
1 TPP (Carioba)
CPFL Santa Cruz
CPFL Jaguari
CPFL Sul Paulista
CPFL Leste Paulista
CPFL Mococa
SHPP Rio do Peixe (I/II)
SHPP Macaco Branco
203620352032202820272015 …
CPFL Energia requested Aneel to renew the expiring
concessions
~3%CPFL
Energia's EBITDA
<1% CPFL
Energia's installed capacity
4
CPFL Energia enjoys long term concessions
1) Furnas has the concession for HPP Serra da Mesa. CPFL has the contractual right of 51.54% of the plant’s assured energy, according to the 30-year leasing contract, maturing in 2028.
26%44%
16%14%
Distribution segment
• 7.3 million customers
• 569 municipalities
• Most developed regions
• High potential in per capita consumption
1º1º
Distribution LeaderMarket share: 13% Sales in the Concession Area (TWh)1
Industrial
Commercial
Residential
Others
Sales Breakdown | LTM 2Q13
Sales CAGR - by Region2 |2008 - 2012
3.6 3.7
2.9 3.6
4.1 3.7
1) Excluding sales at CCEE; 2) Source: EPE; 3) Including regulatory asset & liabilities and excl. non-recurring items.5
2008 2009 2010 2011 2012 LT-M2Q12
LT-M2Q13
37.3 37.8 39.3 39.9 40.7 20.4 20.5
11.7 11.013.1 14.7 16.0 7.7 8.5
Captive TUSD
52.449.0 48.8
56.7 55.8
+3.3%
57.6
CAGR 2008-123.7%
54.6
Number of Consumers | # Thousands
2008 2009 2010 2011 2012 2013
7,2747,176
6,9546,750
6,5686,427
3rd Tariff Review Cycle
CPFL Piratininga Oct-122
CPFL Santa Cruz
Feb-132
CPFL Leste Paulista
CPFL Jaguari
CPFL Sul Paulista
CPFL Mococa
CPFL Paulista Apr-13
RGE Jun-13
EBITDA breakdown
6
CPFL Energia – LTM2Q13 Adj. EBITDA Breakdown¹ | R$ million
CPFL Santa Cruz
CPFL Leste Paulista
CPFL JaguariCPFL Sul Paulista
CPFL Mococa
1) Adjusted by regulatory assets & liabilities and non-recurring items; does not consider intercompany eliminations; 2) 12 months retroactive effect; 3) Commercialization in the free market and Services
56%
12%
4%
27%
6
AlternativeEnergy
618
Conventional
1,180
CPFL Paulista
RGE
CPFL Piratininga
Competitive Supply3
179
Generation1,798
CPFL Energia - Consolidated1 | 4,633
Distribution2,657
66%
34%
57%
39%
4%
Generation Segment
Distribution Segment
Cost-cutting initiatives
Zero Base Budget
Inefficiencies from past budgets are
not carried over to the next periods
~R$50 million/year (2012-15)
1Tauron Program
Introduction of the smart grid
technology in the distribution
network
~R$60 million/year
2Redundancy
Program
Special retirement plan with 445 adherences
~R$25 million/year
3Corporate
Services Center
Implementation of a back-office
services provider to increase operating
productivity and efficiency
4
1) Excluding CPFL Renováveis (ramp-up), CPFL Serviços (revenue-related expenses) and non-recurring items. In real terms. Inflation index: IGP-M.
2012Reduction of 7.2% or
R$ 108 millionPersonnel: -R$ 17 million
MSO: -R$ 91 million
1H13Reduction of 2.0% or
R$ 10 millionPersonnel: -R$ 6 million
MSO: -R$ 4 million
Achievements1
Corporate Level
• Optimization of inspections (loss prevention), process review, and improvement in assertiveness: reduction of ≈17%
• Metering and delivery of bills - online billing (email), changes in layout/type of paper, alignment of bank fees for all Discos: reduction of ≈11%
Operational Level
Value Initiatives
• Reduction of consulting services and “insourcing” of activities: reduction of ≈47%
• Standardization of outsourced labor: reduction of ≈52%
• Improved management of travel expenses: reduction of ≈18%
• Consumption of paper and office supplies: reduction of ≈66%
7
CPFL
Pir
ati
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ga
Coelc
e
Ele
trop
au
lo
CPFL
Jag
uari
Ele
ktr
o
CPFL
Pau
lista
CPFL
Moco
ca
CPFL
San
ta C
ruz
Ban
deir
an
te
Esc
els
a
CPFL
Lest
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au
l...
Cem
ig
Cose
rn
Celp
e
Lig
ht
Coelb
a
RG
E
Am
pla
CPFL
Su
l Pau
lista
Cem
ar
Cele
sc
CEEE
4.2 4.6 4.7 4.7 5.3 5.4 5.7 5.8 6.0 6.4 6.6 7.07.9 8.1 8.4 8.9 8.9 9.0 9.1
10.911.8
13.0
CPFL
Jag
uari
CPFL
San
ta C
ruz
CPFL
Pir
ati
nin
ga
CPFL
Moco
ca
CPFL
Pau
lista
Coelc
e
CPFL
Lest
e P
au
l...
Ele
trop
au
lo
Ban
deir
an
te
Ele
ktr
o
Esc
els
a
CPFL
Su
l Pau
lista
Cose
rn
RG
E
Cem
ig
Cele
sc
Am
pla
Lig
ht
Celp
e
CEEE
Coelb
a
Cem
ar
4.55.3 5.7 5.87.5 8.1 8.3 8.4 9.4 9.8 9.910.8
14.514.614.716.516.918.219.319.420.0
21.6
8
Avg. Frequency of Power Outages per Consumer per Year – FEC2012 (# occurrences)
Avg. Length of Power Outages per Consumer per Year - DEC2012 (hours)
Operational excellence in distribution
The Distribution segment, intensive in O&M expenses, has gone through periodic tariff reviews to reduce costs and improve efficiency, while Generation and Transmission
segments, more capital-intensive, did not face the same regulation over time
Average tariff1 (CPFL Piratininga) - [R$/MWh]2
-13.3 -16%
20.0 88%
-25.6 -38%
-7.4 -24%
-25.8 -16%
R$/MWh
∆ 1º CRTP / 3º CRTP
%
-24%
Generation
Transmission
Distribution
Sector charge
s
Taxes
31 (9%)
82(22%)
23 (6%)
67(18%)
164(45%)
367
138(44%)
24 (8%)
42 (13%)
316
68(22%)
43 (14%)
3rd CRTP3
2011-2014
1st CRTP3
2003-2006
1) Average of all classes and voltages; does not take into account financial components. 2) Constant figures in December/12. Amounts adjusted by IPCA | Source: CPFL Energia. 3) Periodic Tariff Review. 4) Extraordinary Tariff Review.9
275
60(22%)
19 (7%)41
(15%)10 (4%)
146(53%)
2012 Tariff after RTE4
-22.1 -27%
-4.2 -18%
-26.0 -39%
-21.6 -69%
-18.5 -11%
R$/MWh
∆ 1º CRTP / RTE
%
Pressure on tariffs
Distribution | Financials
Net revenues1 – Adjusted2
EBITDA – Adjusted2 Net income – Adjusted2
2010 2011 2012 LTM 2Q12 LTM 2Q13
9,432 9,794 10,763
10,120 11,495
2010 2011 2012 LTM 2Q12
LTM 2Q13
2,267 2,351
2,678 2,453
2,657
2010 2011 2012 LTM 2Q12
LTM 2Q13
1,309 1,235
1,399 1,250
1,376
1) Excludes construction revenue; 2) IFRS less non-recurring items plus regulatory assets & liabilities.
CAGR = +6.8%
+13.6%
CAGR = +8.7%
+8.3%
CAGR = +3.4%
+10.1%
Sales in the Captive Market (TWh)
2010 2011 2012 LTM2Q12 LTM2Q13
39.3
39.9
40.7 40.6 40.8
+0,4%
CAGR = +1.8%
10
• Long Term Concessions
• Latin America’s largest Portfolio in Alternative Energy
• Renewable Sources: higher than 93%
2º2º
2nd Largest Private Generation Company
Market share: 2.3%
Hydro power 67%
Thermal7%
SHPP8%
Wind12%
Biomass6%
Solar0%
Portfolio by source
25%
Generation segment
1) Considering 58.8% stake at CPFL Renováveis, since its creation.11
Installed Capacity1 (MW) | Estimated growth
CAGR 2000-16e = 21.5% a.a.
Semesa Baesa
Enercan Ceran
Foz Chapecó
EpasaBaldin
Creation ofCPFL
Renováveis
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013(e)
2014(e)
2015(e)
2016(e)
2017(e)
- 657 660 747 751 931 1,047 1,047
-
143
801 812 812 854 915 1,072
1,588 1,704 1,7372,203
2,6172,912 3,105 3,105 3,105 3,254
0
Privatization assets Brownfield Greenfield
Serra da Mesa
Monte Claro
Barra Grande
CamposNovos Lajeado Castro
Alves 14 de Julho
Foz do Chapecó Epasa
Commercial Startup
1998 2004 2005 2007 2007¹ 2008 2008 2010 2010-11
Installed Capacity(MW)
1,275.0 130.0 690.0 880.0 902.5 130.0 100.0 855.0 341.6
Assured Energy (MWavg)
671.0 59.0 380.6 377.9 526.6 64.0 50.0 432.0 247.6
CPFL Stake 51.54% 65.00% 25.01% 48.72% 6.93% 65.00% 65.00% 51.00% 52.75%
Installed Capacity CPFL (MW)
657.1 84.5 172.5 428.7 62.5 84.5 65.0 436.1 180.2
Assured Energy CPFL (MWavg)
345.8 38.4 95.2 184.1 36.5 41.6 32.5 220.3 130.6
Flooded area (km2)
1.784 1.4 95.0 32.9 630 5.0 5.0 80.0 -
(MW/km2) 0.7 92.9 7.3 26.7 1.4 26.0 20.0 10.7 -
Concession terms 2028 2036 2036 2035 2032 2036 2036 2036 2042
Conventional generation – 2,234 MW1 of installed capacity
1) Equivalent stake, including 38MW of small plants at CPFL Geração and 24MW of SHPP embedded in the distribution companies.
CPFL Energia’s power plants – state-of-the-art environmental efficiency
12
CPFL Renováveis | Shareholders’ structure as of Sep-13
13 1) Including Tanquinho solar power plant with an installed capacity of 1MWp.
58.8% 37.0%
Free float
16.6%
100%
63.0% 24.6% 0.0%
Small Hydro Biomass Wind
Pre-IPO
Post-IPO
Solar
CPFL Renováveis | Current portfolio
14
Operating (Sep-13)
Under
construction
End of2016
Under development
Total Portfolio
100% with PPA
1,735
5,553PossibleProbableHighly Confident
3,818
Small Hydro
• 35 operating: 327MW
• Under construction: -
• Under development: 626MW
Total: 953MW
Biomass
• 7 operating: 320MW
• 1 under construction: 50MW
• Under development: -Total: 370MW
• 15 operating: 556MW
• 18 under construction: 482MW
• Under development: 3,192MWTotal: 4,230MW
Wind
• 58 operating: 1,203MW1
• 19 under construction: 532MW
• Under development: 3,818MWTotal: 5,553MW1
Total
1) Including Tanquinho solar power plant - 1MWp of installed capacity
1,203
WindSHPP – Small HydroBiomass
CPFL Renováveis’ Installed Capacity (MW)
532
2,214
1,077
527
4,230
953
370
556
320327
1,038
370327
Commercial start-up / Acquisition
Installed Capacity (MW)
Assured Energy (MWavg)
PPA Comments
CPFL Renováveis(Aug-11)
652 314
Bio Ipê TPP 2Q12 25 8.2 Free market -
Bio Pedra TPP 2Q12 70 24.4LER auction(R$158.81/MWh)
Estimated revenue: R$ 20 million/year
Bons Ventos wind farms
2Q12 158 63Proinfa PPA(R$ 310.51/MWh)
Acquisition price: R$ 1,062 million
Santa Clara wind farms
3Q12 188 76LER auction(R$ 175.51/MWh)
Estimated Revenue: R$ 115 million/year
Ester TPP 4Q12 40 11Alternative sources auction (64%) and free market (36%)
Acquisition price: R$ 111.5 million
Tanquinho Solar PP 4Q12 1 1 Free market -
Salto Góes SHPP 4Q12 20 11Alternative sources auction (R$166.41/MWh)
Estimated Revenue: R$ 112 million/year
TPP Coopcana 3Q13 50 18 Free market -
Current portfolio(Sep-13)
1,203 526
1) Constant currency (Dec/12)15
CPFL Renováveis | Track record
Commercial start-up
(e)
Installed Capacity
(MW)
Assured Energy
(MWavg)Capital structure(e) PPA
TPP Alvorada 3Q13 50.0 18.0 BNDES funding(approved and partially disbursed)
Free market
Campo dosVentos II wind farm
3Q13 30.0 15.0BNDES funding (under review)Commercial banks (bridge loan approved and disbursed)
Reserve auction (Aug/10)R$ 142,53/MWh
Atlântica wind farms2 3Q13 120.0 52.7
BNDES funding (bridge loan approved and disbursed, long-term funding under review)Commercial banks (bridge loan approved and disbursed)
Alternative sources auction (Aug/10)R$ 154,83/MWh
Macacos I wind farms1 4Q13 78.2 37.5
BNDES funding(bridge loan contracted and disbursed, long-term funding under review)
Alternative sources auction (Aug/10)R$ 152,63/MWh
Campo dos Ventos wind farms4
1Q16 82.0 40.2 BNDES funding(structuring)
Free market
São Benedito wind farms5 3Q16 172.0 89.0 BNDES funding
(structuring)Free market
Projects under construction
532.2 252.4
1) Macacos, Pedra Preta, Costa Branca e Juremas; 2) Atlântica I, II, IV e V; 3) Constant currency (Dec/12); 4) Campo dos Ventos I, III, V;5) Ventos de São Benedito, Ventos de Santo Dimas, Santa Mônica, Santa Úrsula São Domingos and Ventos de São Martinho
16
CPFL Renováveis | Portfolio under construction
Generation segment: conventional and alternative energy | Financials
Net Revenues (R$ million) - Adjusted1 EBITDA (R$ million) - Adjusted1
Net Income (R$ million) - Adjusted1
1) Adjusted by proportional consolidation and non-recurring items.
2010 2011 2012 LTM2Q12 LTM2Q13
1,121
1,520
2,350
1,842
2,634CAGR = +44.8%
+43.0%
2010 2011 2012 LTM2Q12 LTM2Q13
810
1,181
1,672
1,397
1,798CAGR = +43.7%+28.7%
2010 2011 2012 LTM2Q12
LTM2Q13
262
778
384
819
358
-56.3%
EBITDA Margin - Adjusted1
2010 2011 2012 LTM2Q12 LTM2Q13
72.3%77.7%
71.2%75.9%
68.3%
17
• 280 free consumers
• Nationwide outreach
• Value-added product portfolio
• Synergy with CPFL Renováveis
Number of Consumers (#) | CPFL Brasil
1º1º
Leader in Commercialization of Energy
Market share: 10%
2008 2009 2010 2011 2012 2Q13
80 74
129 141
231280
CAGR = 30%
Portfolio (Free Consumers)
179
52
Inside the concession area
Outside the concession
area
Current: 11.5 GW avgPotential: +4.8 GW avg
Free Market in Brazil
210
70
18
• CPFL Brasil was awarded the winner of Exame Magazine’s 2013 Best and Largest Companies (category Energy)
• The Company was selected among gencos, discos, transcos and other players in the electric sector throughout Brazil2010 | 2011 | 2013
Competitive power supply segment
19
Jun/09 Jun/10 Jun/11 Jun/12 Jun/13
192 221
495
796
1,123
Jun/09 Jun/10 Jun/11 Jun/12 Jun/13
441 465 491 558
613
Current: 9.6 GW avgPotential: +0.7 GW avg
Current: 1.9 GW avgPotential: +4.1 GW avg
Competitive advantages of CPFL: market leadership, expertise and synergies with CPFL Renováveis
Source: ANEEL and CCEE
Competitive power supply segment | Growth opportunities
# of competitive customers – larger than 3 MW
# of special customers – from 0.5 to 3 MW
Number of free clients in Brazil
CAGR=8.6% CAGR=55.5%
Transmission networks
Self-generation networks
Distributionnetworks
Recovery of equipment
Services Segment | CPFL Serviços
• Foundation: 2006
• Core Business: offers a wide range of value-added services, ranging from engineering projects to maintenance and recovery of equipment. These services are designed to help consumers improve the efficiency, cost and reliability of their electric equipment
• Type of services: construction of transmission and distribution networks; maintenance and recovery of equipment; self-generation networks (cogeneration, energy-efficiency projects and distributed generation arrays – solar energy)
20
Services Segment | CPFL Total and CPFL Atende
• CPFL Total offers collection services with an established authorized network; capacity to collect utility bills, such as water, energy, telephone, and cable TV.
• Capability of cross-sale with other service providers, enabling the collection via the energy bills.
• Foundation: 2008
• Core Business: provider of contact center and customer relationship services to other utility companies
• Services: face-to-face attendance, back-office, credit recovery, toll-free customer support, ombudsman, service desk and sales
21
2H04
1H05
2H05
1H06
2H06
1H07
2H07
1H08
2H08
1H09
2H09
1H10
2H10
1H11
2H11
1H12
2H12
1H13
140
401498
612722
842719
602 606 572655
774
486
748 758640
456363
3.7%
6.5%
9.1% 8.7%9.6%
10.9%9.7%
7.6% 7.3% 7.6% 7.9% 8.6%6.9%
6.0%7.1%
6.1%4.6% 3.9%
8.29 9.4311.67
15.0214.1315.8717.9918.0516.6915.7716.5118.4420.1822.0521.9526.30
22.7821.11
CPFL has distributed dividends around the entire net income since its IPO, reaching the markof R$ 10.6 billion distributed. Declaration of dividend of 1H13: R$ 363 million | 0.38/share
Dividend Yield 1 (LTM) Declared dividends2 (R$ Mi) CPFL average price (R$/ORD)3
1) Considering last two half years’ dividend yield 2) Refers to declared dividend. Payment in the next half year. 3) Considers share price adjusted for reversal stock split and simultaneous split of shares on June 29, 2011 (not adjusted per dividends).22
Dividends
2012 actual(cash flow)
2013 2014 2015 2016 2017
1,403
1,1171,047
1,3211,231 1,265
1,043 1,072
72
9
23
4
15
1122
13
6
14
7
15
1
12
0
11
3
Total:R$ 8,709 million1
Distribution: R$ 5,981 million
Generation:R$ 2,062 million2
Commercialization and Services:R$ 667 million
R$ 2,468 R$ 2,325 R$ 1,923 R$ 1,706 R$ 1,367 R$ 1,389
1) Constant currency Dec/12. Take into account 100% interest on CPFL Renováveis and Ceran (IFRS). 2) Conventional + Renewable
23
Capex 2013 - 2017
24
Indebtedness and leverage
1) Financial covenants criteria. 2) LTM recurring EBITDA (covenants criteria). 3) Financial debt (+) private pension fund (-) hedge (considering proportional consolidation).
2011 2012 1Q13 2Q13
10.0
12.6 12.5 12.6Leverage1 | R$ billion
Adjusted net debt1/Adjusted EBITDA2
3,665 4,377 4,111 3,676Adjusted EBITDA2
R$ million
65%
3%6%
26% CDI
Prefixed (PSI) IGP
TJLP
Gross debt breakdown3
3.55x:Considering
IFRS accounting
criteria
Gross debt cost3 | LTM
2004
2005
2006
2007
2008
2009
2010
2011
2012
1Q
13
2Q
13
9.4%7.9%
9.9%7.3% 7.1%
4.9% 4.4% 4.3%3.0%
1.7% 1.2%
17.7%13.9%
13.4%12.1%
13.4%
9.4%10.5%11.1%9.0% 8.4% 8.0%
Nominal
Real
2.73 2.89 3.033.42
25
Strong and robust liquidity
1) Disregard financial charges (ST = R$ 295 million; LT = R$ 45 million), hedge (net positive effect of R$ 539 million) and MTM (R$ 86 million). 2) Considers amortization as of July 01, 2014.
Cash Short-term
2014² 2015 2016 2017 2018 2019+
5,420
2,721
1,484
3,278
2,4032,121
2,413
3,856
Debt amortization schedule1 (Jun/13) | R$ million
Cash coverage:
2.0x short-termamortization (12M) Average tenor: 4.00 years
Short-term1 (12M): 16.6% of total
26
Short term outlook
• Liability management exercise: pre funding for the next 12m - longer terms and lower costs• Average tenor: 4.0 years (2Q13) vs. 3.2 years
(4Q09)• Real cost of debt: 1.2% p.a. (2Q13) vs. 4.9%
p.a. (4Q09)
• Reaffirmation of ratings: brAA+ since 2Q08 (S&P) and 3Q10 (Fitch)• Liquidity policy (minimum cash vs.
amortizations in the next 12-18 months) – 2Q13 cash coverage: 2.0x
• Stable cash flow from operations (on avg. R$ 2.3 billion/year since 2010 | LTM2Q13: R$2.5 billion)
• Optimal capital structure• Reduction in WACC• Maximization of shareholder return
• Ramp-up at CPFL Renováveis
• 2H13: 278 MW still to be started up
• Signals of recovery, favoring energy consumption – industrial segment: +2.7% in 2Q13
• Productivity gains:
• Focus on cost reduction and optimization (Zero Based-Budget and Corporate Services Center)
• Tauron Project (smart grid): higher productivity, lower costs
• Optimization in the occupancy of buildings – sale of vacant assets
Growth and productivity Optimization of capital structure