Agenda. About Sector About Copel Main Strategic Objectives Leverage Analysis Budget Supplementation Startup New Assets

Transcription

1 August 2017

2 Disclaimer Any statements made during this event involving Copel s business outlook or financial and operating forecasts and targets constitute the beliefs and assumptions of the Company s Management, and the information currently available. Forward-looking statements are not guarantees of performance and involve risks, uncertainties and assumptions, given that they refer to future events, and thus are dependent on circumstances that may or may not occur. The general economic conditions, industry conditions and other operating factors could come to affect the future performance of Copel and lead to results that are materially different from those expressed in said forward-looking statements. 2

3 Agenda About Sector About Copel Main Strategic Objectives Leverage Analysis Budget Supplementation Startup New Assets 3

4 The Brazilian Electricity Sector Has Solid Foundations and attractive Brazil has a large energy market (>500 TWh in 2016); Expectation of a 47% increase in demand for energy between (CAGR 4.37%); Significant structural improvements in the regulatory environment (lower perceived risk); Historically attractive returns for investors (IEE >100pp vs. IBOVESPA in the last 10 years/ IEE 62% vs. 49% IBOVESPA since Jan-2016); Focus Federal government renewed focus on attracting infrastructure investments (postretirement agenda); Energy Index Performance 70 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 4

5 ... And It Has A Prospect To Evolve Even More... Proposal for measures to improve the legal framework of the electricity sector - Public Consultation Privatization of hydroelectric palnts; Enlargement of the free market; Solve court issues of the sector; Allocation of costs and rationalization; Resumption of stability and credibility of the legal-regulatory framework; Decree 9,143/2017 Reduction of obstacles to the capture of investments in energy; Expansion of energy commercialization; New rules for conducting new and existing energy auctions; Possibility of distributors negotiating with free consumers and other agents of the Free Market contracts of sale of excess contracted energy. 5

6 State of Paraná: Highlight in Growth Geographic Information Area: 199,000 km 2 (2.3% of the country) Population: 11 million (5.5% of Brazil s population) Cities: 399 Economic Data GDP 2015: R$ 366 billion (6% of Brazilian GDP) GDP 2016: R$ 387 billion (6% of Brazilian GDP) GDP 1Q17: R$ 107 billion (+ 2.5% vs. 1Q16) Breakdown by Income Segment Services 49.2% Commerce 16.1% Construction 5.8% Utilities 3.4% Industries 15.8% Agricultural 9.7% 6

7 Companhia Paranaense de Energia - Copel Head office: Curitiba/PR 62 years in the industry Integrated Company - Generation, Transmission, Distribution, Energy Trading and Telecommunication Since 1994 on the B3 23 years of listing 20 years of listing on the NYSE The first of the brazilian electric sector Present in the European Union 15 years listed on Latibex 1 On

8 One of the Largest Companies in the Sector Major Industry Companies in Revenue Terms R$ billion 1H CPFL CEMIG Copel Engie Energisa Energias do Brasil Light Equatorial Major Industry Companies in Market Value Terms¹ Geographical Diversification > Present in 10 Brazilian States; > This diversification allows the company to benefit from the dynamism of the main poles of generation, transmission and distribution of energy in Brazil; Source: Economática 1) Updated until CPFL Engie Eletrobras Equatorial Tran Paulist Cemig EDP Copel Major Industry Companies in the Enterprise Value Terms¹ Eletrobras CPFL Engie Cemig Copel Equatorial EDP Tran Paulist 8

9 Copel has an Integrated Asset Base of High Quality... Generation Transmission Distribution Telecom 5,675 MW of installed capacity in operation 30 Power Plants¹ and 11 Corporate partnerships; Addition of 720 MW until 2019; 4,221 km of lines² and 45 Subestation³ in operation Addition of 1,197 km of transmission lines until 2021; Concession renewed until 2042 (Contract 060/2001); More than 4.5 million customers 4th largest in number of costumers ; 4th largest in electricity consumption (MWh); 31,203 km de fibras ópticas 401 cities with optic fiber; 64 cities with broadband for retail; 52% of Ebitda LTM 7% of Ebitda LTM 23% of Ebitda LTM 18% of Ebitda LTM Note: ¹Considers the HPP GPS. ²Adjusted by Copel s stake. ³Participation in 9 Substations. Source: 1H

10 Copel Distribuição The Best Of Latam Customers satisfaction; Quality in energy supply; Better Communication; Excellence in customer service; Valuing the company image; Image only portuguese. 10

11 Copel Geração e Transmissão Diversified Matrix Copel Geração e Transmissão Diversified matrix in operation 24 Hydroelectric Power Plant 15 Wind Power Plant 2 Thermal Power Plant 18 Transmission Lines Ativos em construção 2 Hydroelectric Power Plant 13 Wind Power Plant 4 Transmission Lines Wind Farm São Bento 2 TPP Araucária 3 HPP Foz do Areia 4 HPP GPS 11

12 Copel has an Experienced Team and Already Adopts the Best Practices of Corporate Governance of the Sector... Strong presence of corporate committees and councils: Committee for Disclosure of Material Acts and Facts, Customer Council and Ethics Guidance Council; Risk and Integrity Management Actions: integrity program, programa de integridade, code of conduct, risk assessment and channels of complaint; Sarbanes Oxley Strongly committed to sustainability and social programs: Signatory of the Global Compact since 2000; Participation in the Corporate Sustainability Index (ISE) of B3; 11 years adopting the guidelines of the GRI - Global Reporting Initiative; 2 years adopting Integrated Reporting Guidelines - IIRC - International Integrated Reporting Council; 10 years in the Top 10 of the Abradee Social Responsibility Award; Participation in the Global Sustainability Index - MSCI since 2014 and FTSE4GOOD Emerging Index; 12

13 Copel Has Some Additional Competitive Advantages... Power generation leadership in Paraná (~ 30%) with growth above the national average (9.4 GW of unexplored market); Diversified energy matrix, with significant portions of its production coming from non-hydro sources (~ 11% thermal and 7% wind); Greater exposure to the Spot Market among peers (22% of energy not contracted in 2017 and 36% in 2018, reaching 78% in 2021); Relevant long-term cash flow generation in transmission concessions (stable long-term APR profile of the sector) Demand in the concession area is stable and shows growth above the national average (less importance of industrial consumption in the portfolio 23.3% vs. 35.6% in Brazil); High operational efficiency in distribution (DEC and FEC better than regulatory limits); 13

14 Copel is Currently Valued Below the Industry Average... Firm Value/ EBITDA (CY18E) Potential ~43% CPFL Eletrobras Cemig Energias do Brasil Copel Light Copel Our Strategic Plan will be based on the recovery of the Company's value. 14

15 Main short-term strategic objectives... Focus on cash flow generation... Maintenance of cash flow generation for all current business (GeT, Dis, Telecom and Commercialization); Priorization of investment plan to finalize projects in progress, in the shortest possible time, ensuring the expected chash flow generation; Renegociation of short-term debt; Review of funding plan (BNDES, bond, monetization of CRC, etc); Optimization of costs (PDV, review of contracts, management of delinquency, judicial deposits, etc); Sale of non-strategic assets (SPCs, land, properties, obsolete products in stock); 15

16 The Leverage Should Gradually Reduce 2.1 1,282 6,200 Evolution of Net Debt/EBITDA (R$ million) ,373 1,510 1,492 7,284 7,446 7,543 3,562 2,775 3,249 2,195 R$ million Debt should grow due to interest and new funding to support the investment program. Jun/16 Dec/16 Mar/17 Jun/17 Net Debt Guarantees and endorsement EBITDA 12 months Actions to reduce leverage Expectation of improvement in 2S17 result, driven by Copel Distribuição result; EBITDA in 2S16 was impacted by the R $ 570 million impairment loss; Outlook for reduction in the 2017 CAPEX; Disbursement in 1H17 was R$ 1.2 billion; Possibility of negociation of the 5th Issueance of Debenture of the Holding; More restrictive contract (considers guarantees and endorsement as debt); Reduction of CAPEX to 2018; BNDES: extension of the debt term (up to 14 years); 16

17 Main Risks and Oportunities Risks Lower pace of economic recovery (delayed further reforms); Sectorial issues (GSF and PLD); Performance of energy consumption; Possible impacts of impairment of generation assets (final adjustments of works); Oportunities Cut of costs; 81 identified actions; Review of third-party service contracts; Redundancy plan without the replacement of vacancies; Overtime cut; Review of provisions for litigation; Sale of non-strategic assets; Sanepar; Others; Focus on reducing delinquency; 17

18 Equating of Debt Focused on Cash Flow Generation and Greater Financial Discipline Debt Maturity Short Term Long Term jul/17 - jun/18 jul/18 - dec/ From 2023 R$'000 Total Domestic Currency 2,947,116 1,405,283 2,823, , , ,608 1,258,279 9,382,806 Foreign Currency ,148 88,931 TOTAL 2,947,899 1,405,283 2,823, , , ,608 1,346,427 9,471, ,951 2,084 Payment Schedule R$ million 2,913 3,990 4,353 1, , Q17 4Q17 1Q18 2Q18 3Q18 4Q18 maturity accumulated Cash flow generation of current assets; Cash flow generation of new assets; Sale of assets; Reduction of costs; Debt rollover (principal); 18

19 Budget Supplementation Efforts in the works in progress to start up assets under construction Subsidiary / SPC Investment Program 2017 Carried 2Q17 Carried 1H17 R$ million Scheduled Original Revised Copel Geração e Transmissão ,024.5 HPP Colíder HPP Baixo Iguaçu TL Araraquara / Taubaté TL Foz do Chopim - Realeza TL Assis - Londrina TL Curitiba Leste / Blumenau Mata de Santa Genebra Transmissão Cantareira Transmissora Paranaíba Transmissora Others Copel Distribuição Copel Telecomunicações Copel Comercialização Copel Renováveis Holding Cutia Wind Farm Complex Other Invesment TOTAL , , , Capital budget originally approved by the Board of Directors. These values do not consider appropriation due to own labor, interest and others. 2 Planned CAPEX under review. 3 Regarding the participation of Copel in Enterprises. 4 Includes Voltalia São Miguel do Gostoso I Participações among others. 19

20 Expansion od Cash Flow Generation With the Start up of New Assets Generation Assets Power Plant Installed Capacity (MW) Assured Power¹ (Average MW) Capex Project (R$ million) Under construction ,156.8 Start-up Energy Sold² Stake 125 average MW HPP Colíder , % Copel GeT R$ average MW 30% Copel GeT HPP Baixo Iguaçu 3, R$ % Noeenergia 71,5 average MW Wind Farm Complex Cutia , % Copel GeT R$ ¹ For HPP Colíder and HPP Baixo Iguaçu, the values were adjusted according to Administrative Rule No. 258 of December 2016 and January 11, 2017 respectively. ² Price updated by IPCA until Jun/ Font CCEE. 3 Sold 70% in the regulated market. Concession Contract No. 002/2012 of Considering waiver of 756 days. 4 Adjusted by Copel s stake. Transmission Assets Subsidiarie / SPC Auction Signing of Contract Enterprise State km Subst APR¹ (R$ million) CAPEX² (R$ million) Start up Concession Expiration Copel GeT 001/10 oct/10 TL Araraquara II Taubaté SP Jan-18 10/5/2040 Subtotal Copel GeT Mata de Santa Genebra Copel GeT - 50,1% Furnas - 49,9% 007/13 may/14 TL Araraquara II - Bateias SP / PR Nov-17 5/13/2044 Cantareira Copel GeT - 49% Elecnor - 51% 001/14 set/14 TL Estreito - Fernão Dias SP / MG Mar-18 9/4/2044 Subtotal SPCs 1, ,239.8 Total 1, ,674.1 ¹ Updated according to Aneel Ratification Resolution 1918/2015 / Adjusted for Copel s stake. ² Adjusted for Copel s stake (considers own capital and third-party capital). 20

21 Investor Relations ir.copel.com