Corporate presentation CPFL Energia maio 2016
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Transcript of Corporate presentation CPFL Energia maio 2016
2 2 1) On May 12, 2016; 2) Considering proportional consolidation of generation assets (-) Non-recurring effects; 3) Considering CPFL’s stake on each generation project. Considering 4 wind turbines of Campo dos Ventos and São Benedito wind farms.
Company Overview
Largest integrated private player in the Brazilian electricity sector
Market Cap of R$ 20.5 billion1, listed on BM&FBOVESPA – Novo Mercado and on NYSE (ADR Level III)
In LTM1Q16, EBITDA of R$ 3.7 billion2 and Net Income of R$ 1.1 billion2
Presence concentrated in the most developed regions of Brazil
Leadership in distribution through 8 subsidiaries and a 12.3% market share
3rd largest private generator with 3,144 MW3 of installed capacity, of which 94% from renewable source
Leader in Renewable Energy in Brazil with the largest capacity in operation
One of the most profitable operations of energy Trading and a world-class provider of Value-Added Services
Power Plants
3 3 1) Bounded shares, according to the Shareholders Agreement; 2) 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; 3) Adjusted by non-recurring items; does not consider the holding company; 4) Commercialization in the free market and Services.
Company Profile
Lajeado HPP
5.94%
Nect Serviços/Authi
CPFL Centrais Geradoras
DISTRIBUTION 100%
SERVICES 100%
RENEWABLES 51.61%
65% 48.72% 51%
25.01%
Serra da Mesa HPP
51.54%2 53.34%
GENERATION 100%
TRADING 100%
Trading4
173
CPFL Energia – Consolidated3| 3,652
LTM 1Q16 Adj. EBITDA Breakdown3 | R$ million Concession’s expiration
2027 2028 2032 2035 2036
CPFL Paulista
CPFL Piratininga
HPP Luis Eduardo
Magalhães
HPP Campos Novos
HPP Foz do Chapecó
RGE HPP Serra da
Mesa2 HPP Barra
Grande
19 SHPPs (CPFL
Renováveis)
HPP Castro Alves
HPP Monte Claro
HPP 14 de Julho
2045
CPFL Santa Cruz
CPFL Jaguari
CPFL Sul Paulista
CPFL Leste Paulista
CPFL Mococa
23.0%1 19.3%1 11.0%1
15.1% 23.6% 29.4% Free Float
31.9%
Conventional Generation
1,336
Distribution 1,644 45%
36%
5%
14% Renewable Generation
527
Distribution Segment
• 7.8 million customers
• 561 municipalities
• Footprint: most developed regions
• High potential in per capita consumption
• Market size: 56.6 TWh/year
1st Market share: 12.3%
Industrial
Commercial
Residential
Others
1) Source: EPE. 4
28% 39%
17%
15%
5 small discos
44%
23%
9%
24% RGE
CPFL Piratininga
1Q16LTM Adj. EBITDA Breakdown
R$ million
CPFL Paulista
Tariff review Sales CAGR by Region1 |
2010 – 1Q16LTM 4th Tariff Review Cycle
CPFL Piratininga Oct-15
CPFL Santa Cruz
Mar-16
CPFL Leste Paulista
CPFL Jaguari
CPFL Sul Paulista
CPFL Mococa
CPFL Paulista Apr-18
RGE Jun-18
1Q16LTM Sales Breakdown
GWh
5 5
Generation Segment
• 3,144 MW of installed capacity
• 1,557 MWavg of physical guarantee
• Long Term Concessions
• Brazil’s largest Portfolio in Alternative Energy
• Renewable Sources: 94%
3rd Market share: 2.2%
Installed Capacity1 (MW) | Contracted Growth
1) Equivalent stake for project
Portfolio by source | 2020(e)
34%
Conventional Renewable
6 6 1) Amounts in currency Dec/14. PMSO excludes fuel cost at EPASA.
Conventional Generation Segment
Sector Average
142.7 150.2 185.7 188.1
219.4 255.0
205.0
Genco 1 Genco 2 Genco 3 Genco 4 Genco 5
73.3 72.2 90.0
103.6 108.8 118.5 94.4
Sector Average
Genco 1 Genco 2 Genco 3 Genco 4 Genco 5
PMSO1 / Physical Guarantee (R$/MWavg) PMSO1 / Installed Capacity (R$ MW)
-30% -22%
423 483
190 34
269 70 75
1.029
150
759 665 463
570 230
385 375 161 280
294
370
940
175
532 131
1,1
3
Renewable Generation Segment1,2 | Installed Capacity (MW)
7
SHPP BIO SOL WIND
306
2.129
Under Construction 1.823
940 808
665 604 532 499
375 385 294
355
653
Solar
Biomass
SHPP
Wind
(2) (2) (3)
366
759
Source: Company - ANEEL and other companies websites; Notes: 1) Installed capacity in operation (MW); 2) Renewable energy is not the core business; 3) Pro-forma for assets sales to Terraform
3 GW pipeline
(MW)
CPFL Renováveis (Aug-11) 652
2Q12 25 Free market -
2Q12 70 Reserve auction Revenue(e): R$ 20 million/year
2Q12 155 PROINFA Acquisition price: R$ 1,062 million
3Q12 188 Reserve auction Revenue(e): R$ 115 million/year
4Q12 40 Auction and free market Acquisition price: R$ 111.5 million
4Q12 1 Free market -
4Q12 20 Alt. Sources auction Revenue(e): R$ 112 million/year
3Q13 50 Free market Revenue(e): R$ 22.6 million/year
4Q13 30 Reserve auction Revenue(e): R$ 18.5 million/year
4Q13 50 Free market Revenue(e): R$ 22.6 million/year
1Q14 14 PROINFA Acquisition price: R$ 103.4 million
1Q14 120 Alt. Sources auction Revenue(e): R$ 76.7 million/year
2Q14 78 Alt. Sources auction Revenue(e): R$ 52.6 million/year
3Q14 278 - Partnership with Dobrevê
2Q15 29 Reserve Auction Revenue(e): R$ 17.9 million/year
2Q16 24 Free market Revenue(e): R$ 14.9 million/year
Current portfolio (May-16) 1.823
8
CPFL Renováveis | Track record
9
CPFL Renováveis | Mata Velha SHPP
Commercial Start-up
Installed Capacity
Assured Energy PPA1 Location Financing
May/16 24.0 MW 13.1
average-MW
16th LEN 20132 R$ 155,55/MWh
until 2047 Unaí/MG
BNDES (approved)
Overview (substation and reservoir)
Dam axis
CPFL Renováveis anticipated
operation in more than 1 year and a
half
1) Constant currency (Mar-2016); 2) The power generated will be injected into the system and sold on the free market until the beginning of the energy sales contract in January 2018.
10
CPFL Renováveis | Greenfield projects
Commercial Start-up
2016-2020(e)
306 MW of installed capacity
166 average-MW
of assured energy
Campo dos Ventos and São Benedito Wind Farms
Pedra Cheirosa Wind Farms Boa Vista II SHPP
Commercial Start-up 20161 20182 2020
Installed Capacity 231.0 MW 48.3 MW 26.5 MW
Assured Energy 125.2 average-MW 26.1 average-MW3 14.8 average-MW
PPA3 ACL 20 years 18º LEN 2014
R$ 138.39/MWh until 2037
21º LEN 2015 R$ 219.77/MWh
until 2049
Financing BNDES
(approved) BNDES
(being structured) BNDES
(being structured)
Commercial start-up of 4 wind turbines (8,4 MW) in
May-16
1) Gradual commercial operation from 2Q16; 2) Gradual commercial operation from 1H18; 3) Constant Currency (Mar-2016).
Foundation: 2006
Offers a wide range of value-added services:
engineering projects for transmission and distribution grids
equipment maintenance and recovery
self-generation grids
collection of utilities’ bills through an established authorized network
11 11
Incorporation: 2008
Provision of customer relationship services to utility companies:
call center
face-to-face service
back office
credit recovery
ombudsman
help desk and sales
CPFL Energia – Trading & Services
, of which 262 special
customers (CAGR 2010-1Q16LTM: 33.2%)
current ~ 2 GWavg
current ~ 10 GWavg
• New activities: and
2015 - 197 transmission contracts
- 12 construction sites 2015
- 11.2 million phone calls
- 2.4 million electronic phone calls
CPFL Energia Strategy
12
• Be a benchmark in sustainability
• Maintain the highest levels of Corporate Governance
• People management, promoting workplace safety and respect to diversity
• Be the leader in operating efficiency by investing in technology, automation and innovation
• Act on both institutional and regulatory fronts to ensure sustainability of the sector
• Focus on technical services, through technology and productivity
• Mitigate risks of services by hiring qualified labor and suppliers
• Maximize value in the Free Market and be recognized for its profitability
• Expand the presence in retail through acommercial front and customer energy management
• Add new products to energy Commercialization
• Grow while creating value through acquisitions and new projects
• Be the leader in operating efficiency in the Renewable Energy segment
• Operating Efficiency with Innovation & Technology
• Act in both institutional and regulatory levels
• Strategic Growth
Distribution Generation Renewable Commercialization Services
Dividends: CPFL has presented payout ratio close to 100% since its IPO, reaching the mark of R$ 11.6 billion distributed4
TSR5: -4.5%
13 13 1) Considering proportional consolidation of generation assets (+) Regulatory assets and liabilities (-) Non-recurring effects (-) Construction revenue/cost. Disregard intercompany transactions. 2) Considering Holding’s EBITDA. 3) Including holding result and amortization of merged goodwill. 4) For 2015, a capital increase through stock dividend was approved in AGM; 5)TSR from Mar-11 to Mar-16 = Dividends 4.4% (+) Stock performance -8.9% = -4.5%.
NET REVENUE1 11,413 13,235 13,681 15,724 18,763 17,800 9.3% -5.1%
Distribution 9,794 10,830 10,716 12,011 15,431 14,512 8.2% -6.0%
Generation 1,351 1,964 2,356 3,164 2,783 2,696 14.8% -3.1%
Trading 1,699 2,031 2,023 2,430 2,093 2,123 4.6% 1.4%
EBITDA2 3,649 4,343 3,908 3,901 3,705 3,652 0.01% -1.4%
Distribution 2,351 2,655 2,211 1,985 1,681 1,644 -6.9% -2.2%
Generation 1,060 1,427 1,643 1,680 1,880 1,863 11.9% -0.9%
Trading 278 287 74 263 173 173 -9.0% 0.03%
NET INCOME3 1,503 1,617 1,304 1,162 1,061 1,078 -6.4% 1.6%
Distribution 1,235 1,356 1,047 867 762 784 -8.7% 2.9%
Generation 721 373 419 309 362 339 14.0% -6.4%
Trading 164 127 52 168 108 102 -9.1% -6.3%
Key Financial Figures | R$ million
2011 2012 2013 2014 2015 LTM1Q16 CAGR 2011 -LTM1Q16
LTM1Q16 vs. 2015
TOTAL 54.6 56.7 58.5 60.0 57.6 56.6 0.7% -1.7%
Captive 39.9 40.7 41.1 43.2 41.7 41.1 0.6% -1.4%
TUSD 14.7 16.0 17.3 16.8 15.8 15.4 1.0% -2.4%
Energy Sales - Distribution | TWh
CPFL Energia | Operational and Financial figures
14
Capex(e) 2016-2020 | R$ Million
1) Current investment plan released in 4Q15 Earnings Release on March 21, 2016. 2) Constant currency. Considers 100% interest on CPFL Renováveis and Ceran (IFRS); 3) Considers proportional stake in the generation projects; 4) Disregard investments in Special Obligations (among other items financed by consumers); 5) Conventional + Renewable.
Total: R$ 9,666 million2 (IFRS) R$ 8,704 million3 (Pro-forma)
Distribution4: R$ 7,033 million
Generation5: R$ 2,092 million (IFRS) R$ 1,130 million (Pro-forma)
Commercialization and Services
R$ 541 million
1,427
2,813
1,911
1,640 1,648 1,654
IFRS
Pro
-form
a
1,200
2,095
1,719 1,604
1,639 1,647
CPFL Energia | Indebtedness and leverage
Leverage1 | R$ billion
Gross Debt Cost3,4 | LTM
15
4.9% 4.4% 4.3% 3.0% 2.4%
3.7% 1.9%
4.0%
9.4% 10.5%
11.1%
9.0% 8.4% 10.3%
12.7% 13.7%
2009
2010
2011
2012
2013
2014
2015
1Q
16
3,736 3,835 3,755 3,971 3,584 3,577 Adjusted EBITDA1,2 R$ Million
CPFL Energia received a significant amount related to CVA in 1Q16. Adjusting the cash balance plus the CVA asset (until 1Q16), the Net Debt / EBITDA would reach 3.22x
Nominal
Real
70%
3%
6%
21%
CDI
Prefixed (PSI)
IGP
TJLP
2014 1Q15 2Q15 3Q15 4Q15 1Q16
13.0 13.6 13.8 13.7 12.2 12.2
3.49 3.54 3.67
3.46 3.41 3.42
3.22
Adjusted Net Debt1
/Adjusted EBITDA2
Adjusted by CVA cash in balance
1) Financial covenants criteria; 2) LTM recurring EBITDA; 3) Adjusted by the proportional consolidation since 2012; 4) Financial debt (+) private pension fund (-) hedge
Gross Debt Breakdown by Indexer3,4 | 1Q161,4
CPFL Energia | Indebtedness and leverage
Debt Amortization Schedule1,2 | Mar-16 | R$ million
16
Cash Coverage:
2,32x Short term amortization (12M)
Average Tenor: 3.43 years
Short-term (12M): 9.9% of total
3
1) Considers Debt Principal, including hedge; 2) Financial covenants criteria; 3) Amortization from April-2016 to March-2017
Energy sector in Brazil: business segments
Consumers
1) Source: ANEEL – April, 2016; 2) Source: EPE and CCEE; 3) Source: ONS 4) Source: Ministry of Mines and Energy (MME) – Mar-16; 5) Jan-16
Free Market
Captive Market
79.0 million Consumers4
1,882 Consumers5
114 TWh of billed energy2
79.0 million Consumers4
346 TWh of billed energy2
Transmission
• 104 Companies³
• 129,713 km of transmission lines4
• Eletrobrás: ~47% of total assets
Distribution
• 63 Companies
• 460 TWh of billed energy2
• Top 5: ~45% of the market
Competitive Power Supply
Generation
• 143 GW of installed capacity1
• 82.74% Renewable energy1
• Eletrobrás: ~32.4% of total assets
18
Brazilian electricity matrix
1) Source: 10-year Energy Plan 2024; 2) Others: considers coal, oil, diesel and process gas; 3) Abeeólica.
Brazil’s electricity matrix is predominantly renewable, with hydro installed capacity totaling 68% of the
total supply, while biomass, wind, SHPPs and solar account for 16%. In the next years, it is expected that
other sources will grow, mainly wind and solar, reaching 12% and 3% respectively of total installed
capacity in 2024.
Brazilian Electricity Matrix
133 GW 206 GW
2014 2024
19
Wind Potential: 350GW3
Installed capacity: 3.8GW 1%
SHPP Potential: 17.5GW Installed capacity: 5.0GW
29%
Biomass Potential: 17.2GW
Installed capacity: 9.3GW 54%
Potential Realized
Potential to be Explored in Brazil
Evolution of Installed Capacity (GW) 2014-20241
20
Smart distribution was a key theme addressed by the Project
"Energy in the City of the Future"
• The smart grid technology will provide increased network monitoring capabilities and greater quality and commercial opportunities
• Smart Grids will boost the amount of information available, which will be used in innovative ways to optimize operations and services
Smart Grid | The Future of Distribution
Vision of the Future of Distribution is directly associated with Smart Grids:
21
Emergency Dispatch
The past:
The future:
System intervention or self-healing
Automatic failure detection Real-time information for customers
Intelligent meter
• Reduced unnecessary travel;
• Shorter average service;
• Reduced SAIDI (optimization of possibilities of network maneuvering);
• Greater customer satisfaction (real-time information);
• Optimization of service to nearly 600,000 tickets every year.
Gains
22
Reading and Delivery
Reading Energy bill Delivering the bill Payment
Making the payment Smart Metering Center and/or automatized
software
Data network Intelligent meters
Bill via e-mail and/or app
(cons. manag.)
The past:
The future:
• Greater employee safety (reduced travel and exposure to risk)
• Data gathering from load curve and customer consumption profile;
• More sustainable process (reduced use of paper).
Gains
Sustainability at CPFL: Incorporation of strategic guidelines
23
Energy is essential for
the welfare of people
and the development
of society.
We believe that
producing and using
energy in a
sustainable manner
is vital for the future of
humanity.
Vision
To provide
sustainable energy
solutions with
competitiveness and
excellence, acting in a
manner that is
integrated with the
community.
Mission
• Value Creation
Commitment
• Safety and Quality of
Life
• Austerity
• Sustainability
• Trust and Respect
• Overcoming
• Entrepreneurship
Principles
CPFL Energia is the
largest private group in
the Brazilian electricity
sector which, through
innovative strategies
and talented
professionals, offers
sustainable energy
solutions.
Positioning
CPFL Energia built its Sustainability Platform in 2013 in order to define the issues material to its growth strategy and the development of goals and indicators related to each of these issues at each business unit. The Platform consolidation process covered the company as a whole, meaning that sustainability is not just
an element of our principles and values but included in strategic planning.
Sustainability Platform
24
Actions
Raising awareness about the strategic
relevance of the Sustainability
Platform
Establishing formal sustainability
targets for internal leaderships
Results - 2015
Integrated platform based on the
strategic plan, with 6 themes, 17 leverages, 91 indicators and short
and medium-term goals
Sustainability goals published on CPFL's
website
Officers and managers have
sustainability goals
Recognition
Welfare Until 1999
Social Responsibility 2000 to 2006
Corporate Sustainability Added to business from 2007
Level of incorporation of the theme Sustainability
Increasingly more comprehensive concept of responsibility
CPFL Energia | Sustainability
• Component of ISE since its first edition, in 2005
• 35 companies of 16 industries - Market cap of R$ 967 billion
• Component of DJSI Emerging Markets for the fourth consecutive year
• 86 companies achieved the Dow Jones requirements (17 Brazilian, of which 3 are in the power industry)
• Component of MSCI for the second consecutive year
• Formed by companies with the highest ESG standards in their industries
• Transparent reporting of greenhouse gas emissions since 2006
• Best company in Management of Water Resources in Latin America - 2015
• Component of ICO2 since 2016 • 31 shares of 29 companies - Market cap of R$ 1.4 trillion