APIMEC Presentation August 2011

Transcription

1 APIMEC Presentation August 2011

2 Disclaimer This presentation may include forward-looking statements of future events or results according to regulations of the Brazilian and international securities and exchange commissions. These statements are based on certain assumptions and analysis by the company that reflect its experience, the economic environment and future market conditions and expected events, many of which are beyond the control of the company. Important factors that may lead to significant differences between the actual results and the statements of expectations about future events or results include the company s business strategy, Brazilian and international economic conditions, technology, financial strategy, public service industry developments, hydrological conditions, financial market conditions, uncertainty of the results of future operations, plans, objectives, expectations and intentions, among others. Considering these factors, the actual results of the company may be significantly different from those shown or implicit in the statement of expectations about future events or results. The information and opinions contained in this presentation should not be understood as a recommendation to potential investors and no investment decision is to be based on the veracity, current events or completeness of this information or these opinions. No advisors to the company or parties related to them or their representatives shall have any responsibility for whatever losses that may result from the use or contents of this presentation. This material includes forward-looking statements subject to risks and uncertainties, which are based on current expectations and projections about future events and trends that may affect the company s business. These statements include projections of economic growth and energy demand and supply, as well as information about the competitive position, the regulatory environment, potential opportunities for growth and other matters. Several factors may adversely affect the estimates and assumptions on which these statements are based. 2

3 EDP Energias do Brasil Overview

4 EDP Commitment to Brazil 15 Years of Successful In-Country Presence, Through All Sorts of Economic Situations Company Investment in Lajeado Acquisition of Bandeirante Acquisition of Iven (Escelsa and Enersul) Acquisition of Peixe Angical (partnership with Furnas) EDP Energias do Brazil s IPO on BOVESPA Investment in wind business area Asset Swap (Enersul for Lajeado) A-5 Auction TPP Pecém Follow-on of treasury shares Acquisition of Jari Macro Asian Crisis Russian Crisis Real Devaluation Argentinean Crisis Energy Shortage in Brazil Internet Burst Emerging Market Crisis Lula s first mandate election New Model of Brazilian Power Sector Investment Grade from Moody s Subprime Crisis Economic Worldwide Meltdown European Credit Crisis EMBI Brazil (JP Morgan) 4

5 Power Sector in Brazil Market Opportunity for Generation Capacity Expansion Power Consumption Whole Market (TWh) Power Consumption Free Market (TWh) Source: CCEE and ANEEL Installed Capacity (1) Installed Capacity by Generation Source (1) (GW) CAGR: 89-99: 2.7% 99-09: 4.3% 09-19: 4.9% 167 (MW) 2010 = GW (2) 2019e = GW (2) % 74% % 4% E Source: EPE Notes: (1) Capacity of the National Interconnected System (Sistema Interligado Nacional) (2) Numbers subject to changes 5 19% 20% 2% 2% Hydro Thermal Wind Nuclear

6 EDP Energias do Brasil at a Glance High Quality Portfolio of Assets Generation Distribution Trading Consolidated Hydro Concessions in Operation MW Concessions Ending: Sto. Antônio do Jari 373 MW Construction Starts 3Q11 Concession: 2044 Net Revenue 2T11¹ (R$ million) Adjusted EBITDA 2T11¹ (R$ million) EBITDA Contribution 2T11¹ , % 51% 2% 100% Porto Pecém 360 MW Under construction 5 th Brazilian power sector in terms of energy sold 4 th largest distributor in the brazilian power sector 3 rd largest private trading company in the Brazilian power sector in terms of electricity traded Partnership Culture: EDP Renováveis MPX Furnas Eletrobras High sustainability standards (ISE, GRI) Notes: (1) Segment values in Reais and percentages do not consider intra-group eliminations. CENAEEL 6.3 MW Concession: 2032 Elebras 31.5 MW Starting Operations 6 Hydro Generation Thermal Generation Wind Generation Distribution Escelsa 11 th state in GDP: 2.3% of national total 1.2 MM clients in 41.2 K km² Concession: 2025 Bandeirante SP - 1 st state in GDP: ~33% of national total 1.5MM clients in 9.6 K Km 2 Concession: 2028

7 Execution of IPO Commitments Consistent Delivery of Company Strategy Commitments Operational Achievements Financial Achievements 1 Expand generation portfolio (2004 vs June 2011) 1 Installed capacity (MW) % 1,828 (2004 vs LTM June 2011) Net Revenues +44% (R$MM) , Current 2004 Current 2 Improve operating efficiency 2 Distribution productivity (MWh/employee) 6, % 12,045 EBITDA (R$MM) +107% 775 1,607 3 Develop trading business Current Traded Energy in the Last 12 Months (GWh) +92% 9, Current EBITDA Margin (%) bps 31% 21% 4 Consolidate position in the Brazilian power sector 2004 Current 4 Ranking among private capital companies Trading Business Distributed Energy 3 rd 4 th Net Income (R$MM) 2004 Current % 107 Installed Capacity 5 th 2004 Current 7

8 Investment Thesis

9 Why EDP Energias do Brasil? Integrated Portfolio of High Quality Assets Consistent Dividend Growth Long Term Concessions and PPAs, Inflation Protected Financial Strength Improving Operating Performance Growth in Generation with Capital Discipline 9

10 Integrated Portfolio of High Quality Assets Integration Mitigates Risk and Maximizes Growth Potential Balanced Portfolio Risk Diversification Factors (2T11 EBITDA) Distribution Generation Distribution 51% 47% Generation Regulated tariffs Steady organic growth Solid free cash flow generation Inflation-indexed long term PPAs Diversification of sources with Pecém start-up Trading 2% Geographic diversification: Escelsa: high growth region Bandeirante: diversified industrial base Service quality Long term concessions Potential for new projects Strong client base Operational and Financial Synergies Dividends and Equity Investments Generation (R$ Million) Others Escelsa 296 (1) Others 353 (1) Escelsa Trading Distribution Bandeirante Bandeirante Client Retention Strategy Dividends Received Generation Equity Investments Dividends Paid Dividends Received from Subs Generation Dividends Equity Paid Investments Notes: (1) Difference relates to opex, taxes and change in cash position at holding company. 10

11 Long Term Concessions, Inflation Protected Generation Contracted at Attractive Prices in the Long Term Modern Generation Plants Long Term Concessions Average Age of Power Plants Expiring Dates 6-10 Years Escelsa Disco subsidiary (1) Jul % Bandeirante Disco subsidiary (1) Oct 2028 Low Opex and Capex HPP Mascarenhas (IC: 180.5MW) Jul % 0-5 Years 2% 15% 50+ Years Years HPP Suiça (IC: 34.5 MW) SHPP Rio Bonito (IC: 22.5 MW) SHPP Mimoso (IC: 29.5 MW) Jul 2025 Jul 2025 Dec 2027 SHPP São João (IC: 25 MW) May 2029 Contract Coverage and Inflation Protection SHPP Paraíso I (IC: 21.6 MW) Dec 2029 Contracted Energy (Average MW) SHPP Costa Rica (IC: 16 MW) Nov Avg. PPA Price of R$125/MWh (1) 577 SHPP Francisco Gros (IC: 29 MW) WPP Tramandaí (IC: 70 MW) HPP Lajeado (IC: MW) Nov 2031 Aug 2032 Jan HPP Peixe Angical (IC: 452 MW) TPP Porto do Pecém (IC: 360 MW) HPP Sto Antônio do Jari (IC: 300 MW) Nov 2036 Jul 2043 Dec 2044 IGP-M linked IPCA linked Notes: (1) First Period of concession subjected to renewal Notes: (1) Average of HPPs. Does not include Jari. 11

12 Improving Operating Performance Highest EBITDA Margin Growth Attached to Improving Quality of Services Opex Evolution (1) Technical and Commercial Losses (R$ Million) Opex CAGR: (7.9%) IPCA CAGR: +5.1% (in %) 45.9% % % 32.4% 31.8% 32.1% % 11.2% 11.1% 10.7% 15.6% 6.8% 14.0% 5.7% 13.6% 5.4% 13.3% % 5.2% 5.6% 5.5% 5.2% 5.5% 8.8% 8.3% 8.2% H10 1H11 Generation Distribution Others Band 2009 Band 2010 Band 2Q11 Escelsa 2009 Escelsa 2010 Escelsa 2Q11 Manageable Expenses as Percentage of Gross Margin Technical Commercial ANEEL Goal Highest Reported EBITDA Margin Growth (Increment in percentage points, ) 1 st 5.9% 2.2% 2.7% 2.2% 3.1% 0.2% 0.4% (4.4%) (7.7%) Average (2.2%) (1.3%) (4.7%) (16.0%) (14.8%) EDP BR Integrated 1 Integrated 2 Integrated 3 Integrated 4 Genco 1 Genco 2 Genco 3 Genco 4 Disco 1 Disco 2 Disco 3 Disco 4 Source: Companies Reports Notes: (1) Opex costs include personnel, material, third-party services, and others without D&A. Considering IFRS effects from 2009 onwards. 12

13 Growth in Generation with Capital Discipline... Installed Capacity Energy Sold by Generation Plants (MW) 1, (2) 360 (1) ,570 (GWh) 4,758 5,568 6,411 7,985 8, , Q11 TPP Pecém 2012 Rep. HPP Mascarenhas HPP Sto. Ant. Jari Pecém Highlights Coal-Fired Thermal power plant 720 MW installed capacity 92.9% completed as of Q Winning bid on the 2007 A-5 auction Obligation to deliver energy in January 2012 Price set at R$ (October 2007), 15-year term BNDES and IDB Financing 75% Debt / 25% Equity Project Finance awarded the Latam Power Deal of the Year (Euromoney 2009) prize Notes: (1) 50% of EDP Energias do Brasil. (2) Consider the capacity expansion of 73.4MW. 13

14 Financial Strength Escelsa and Bandeirante Rated Investment Grade by Moody s Debt Profile Gross Debt Breakdown (1Q11) Gross Debt (1Q11): R$3.2 Bn IGP-M 1.1% Fixed Rate 17.7% 48.3% TJLP CDI 32.9% Exposure to CDI (%) 33% ENBR 55% (2) Average of Integrated Cos Extending Debt Maturity and Reducing Cost Average Maturity (Years) and Cost of Debt 12.0% 12.4% 12.2% 11.9% 11.4% 10.0% 9.8% 8.9% 8.8% 9.1% Jun-11 Average Maturity in Years Annual Cost of Debt (%) Avg Selic (%) Consistent Improvement in Leverage Ratios (1) Net Debt / LTM EBITDA (x) Net Debt (1Q11): R$ 2.2Bn LTM EBITDA / LTM Net Interest Expenses 1.7x 1.8x 1.4x 1.5x 1.4x 1.5x 3.7x 4.2x 5.8x 6.8x 7.1x 7.1x Mar-11 Jun Mar-11 Jun-11 Notes: (1) Includes principal + interest + hedge results (2) Includes CPFL, Light, Cemig, Copel 14

15 Consistent Dividend Growth Since our IPO (July 2005): Energy Sector DPS CAGR Investments of R$ 5.1 billion R$1.4 billion paid in dividends 19.0% 15.0% Maintained leverage capacity (currently at 1.5x Net Debt / EBITDA) 10.0% 7.0% 3.0% More than 50% of IPO price returned as dividends (1.0%) (1.0%) (5.0%) EDP BR Integrat ed 1 Genco 1 Integrat ed 2 Disco 1 Integrated 3 Disco 2 Genco 2 Dividends per Share (R$ / Share) Total Dividends (R$ Million) Minimum Payout of 50% Source: Company TSR of 177% since IPO (R$38.71 at the end of 2010) 15

16 Financial Highlights

17 Financial Highlights ENBR Consolidated Net Revenues (1) (R$ Million) EBITDA and EBITDA Margin (1) (R$ Million) 4,622 66% 15% 19% +9% 5,034 68% 13% 18% +12% 2,726 2,425 67% 71% 70% 13% 11% 15% 18% 17% 17% 18% 33.0% 30.2% 1,524 1,523 52% 53% 2% 1% 46% 46% 3% 33.5% % 39% 3% 32.1% % 42% H10 1H H10 1H11 Generation Distribution Trading Generation Distribution Trading Manageable Costs and Opex/Gross Profit (R$ Million) Net Income (1) (R$ Million) 33.3% 32.4% % 82% 3% 16% 15% 2% 31,8% 32,1% % 85% 2% 13% 14% 3% % % 54% 2% 48% 44% +3% % 4% 4% 28% % 41% H10 1H H10 1H11 Generation Distribution Trading Generation Distribution Trading Notes: (1) Segment percentages do not include intra-group eliminations. Total values after elimination 17

18 Financial Highlights ENBR Consolidated Historical Capex (R$ 000) Gross Debt (R$ Million) H10 1H11 Distribution 368, , , ,621 Generation 409, , , ,627 3,386 3,251 Energest 67,348 60,788 11,402 15,049 3,193 Pecém 266, , , ,905 Others 75,206 57,045 33,004 2,673 2,838 Other 7,471 13,013 8, Total 785,774 1,054, , , H10 1H11 Projected Capex Ongoing Projects Net Debt (R$ Billion) (R$ Million) 2, % 47% 12% 30% 24% % 27% 2,091 2,260 2,211 19% 29% 34% 48% 42% 18% (e) 2012 (e) 4% H10 1H11 Pecém 19% Jari 12% Other 34% Distribution 18