EDP Energias do Brasil. Investor Presentation

Transcription

1 EDP Energias do Brasil Investor Presentation

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 Corporate profile: integrated private electric company with operations in distribution, generation and trading EDP Energias de Portugal Free Float 51% 49% Energias do Brasil 16% of Group's EBITDA 1 3 rd largest private trading company (sales volume) 9% of market share (1, 2) Generation 4 th largest private generation group (installed capacity) (1,3) 2.2 GW of installed capacity and 1.4 Avg.GW of assured energy 1.5 GW under construction (proportional stake: 635 MW) Long term concessions and PPAs Partnership with local and foreign companies 6 th largest private distribution group (energy distributed) (4) 3.1 million customers supplied by two distribution companies (1) In 2013; (2) Source: CCEE; (3) Source: Aneel. (4) In Source: Companies. 3

4 Corporate profile: operation in 11 Brazilian States Generation (1) Distribution (1) Present in 10 States HPP: 76%, SHPP: 6%, TPP: 16% and WPP: 2% Energest 67 MW Sto. Antônio do Jari 373 MW (50%) São Manoel 700 MW (33,3%) Cachoeira Caldeirão 219 MW (50%) Pecém I 720 MW (50%) Energest 329 MW Aventura 116 MW (45%) Baixa do Feijão 120 MW (45%) Lajeado 903 MW (73%) Enerpeixe 499 MW (60%) EDP Bandeirante 28 cities in the state of São Paulo 1.7 million customers Concession until 2028 EDP Escelsa 70 cities in the state of Espírito Santo 1.4 million customers Concession until 2025 CENAEEL 14 MW (45%) Hydro power plant Wind power plant Thermal power plant (1) In Elebrás 70 MW (45%) In operation Under construction/committed 4

5 EDP: More than 17 years in Brazil Asian crisis Investment in Lajeado Acquisition of Bandeirante Russian crisis Real Devaluation Acquisition of Iven (Escelsa and Enersul) Acquisition of Peixe Angical (partnership with Furnas) Internet bubble Argentina crisis Emerging markets crisis Lula s first mandate election Energy shortage in Brazil New Model of Brazilian Power Sector EDP Energias do Brasil sipo on BM&FBOVESPA A-5 Auction (TPP Pecém I) Subprime crisis Investment in wind power generation Asset Swap (Enersul for Lajeado) Investment Grade Economic worldwide meltdown Follow on offering Follow on offering Acquisition of HPP Jari European credit crisis HPP Jari start up (unit I and II) Saleof50% ofhpp Jari andhpp Cachoeira Caldeirão to CTG A-5 Auction (HPP São Manoel) TPP Pecém I start up (unit II) Partnership with CTG A-5 Auction (Cachoeira Caldeirão) TPP Pecém I start up (unit I) Sale of Evrecy ENBR3 on Ibovespa index Dilma Rousseff s reelection Company Macro EMBI Brazil (JP Morgan) 5

6 Evolution of 2014 priorities: Highlights Thermal Power Plant HPP Pecém I 4. Customer Satisfaction 1 Energy Scenario Priorities Growth Cost control and cash management 3. 1) Energy Scenario: Low hydrology and reservoir levels; Average GSF of 84.5% 3 ; Average PLD of R$ 677/MWh 1 ; ACR Account/CDE contributions to distributors 2 : R$ million in 3Q14 and R$ million on 9M14; EDP Escelsa tariff readjustment in August/2014 (26.54%) and EDP Bandeirante in October/2014 (22,34%). 2) Cost control and cash management Excluding the impact of the sale of property in 3Q13 (R$ 52.6 million), opex decreased 15.5%. In the 9M14 the opex fallen 7.4% Funding of R$ 1,8 billion to reinforce cashflow and investments in 9M14; Net debt/ebitda: 1.4x. 3) Growth HPP Jari: startup of GU I 3.5 months ahead of schedule and GU II 1.5 month ahead of schedule. 98.1% accomplished until September 2014; HPP Cachoeira Caldeirão: 50.5% accomplished until 3Q14; HPP São Manoel: construction began in August ) Source: CCEE. 2) Source: Aneel. 3) Source: CCEE. 6

7 Evolution of 2014 priorities: Highlights 5. 1 Energy Scenario 2. 4) Customer satisfaction Maintenance of quality indicators (DEC and FEC) on both discos and below regulatory level; Client satisfaction above 80% on both discos according to the ABRADEE Prize (2014) 1; Incentive to quality improvement (X Factor s q component): EDP Bandeirante tariff readjustment (Xq: -0.64%); EDP Escelsa tariff readjustment : (Xq: -0.33%). Thermal Power Plant 4. Customer Satisfaction 2014 Priorities Growth Cost control and cash management 3. 5)TPPPecémI Aneel approved pleading suspending the calculation of downtime costs on an hourly basis and determined the calculation to be based on a 60-month rolling average with R$ 250 Million of cash accounted 2 ; Sudden outage of GU I due to a stator burnout. Repair in progress and commercial operation return expected until year end; GU II reached an average availability index of 88.3% in 3Q14. In October reached 98% and September 97%. 1) Satisfaction level of perceived quality. 2) 100% of project. 7

8 Energy Scenario: low hydrology and reservoir levels Rainfall / Natural energy inflow 1 Southeast (2014 vs. 2013) Average GW GSF (Generation Scalling Factor) 2014 (%) National Integrated System (SIN) 2 96,3% 98,3% 93,8% 98,7% 93,6% 89,1% 86,1% 85,3% 86,5%3 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct 82,1% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Thermal Dispatch 1 National Integrated System (SIN) (Average GW) PLD (Southeast submarket) 2 (R$/MWh) 12,0 15,5 822,8 807,0 709,5 729,0 776,9 592,5 8,0 378,2 412, (average) 2013 (average) 9M14 (average) 1) Source: ONS 2) Source: CCEE 3)Preliminary Jan Feb Mar Apr May Jun Jul Aug Sep Oct 8

9 Increase in Non-Manageable Expenditures Distribution Non-Manageable Expenditures 1 (R$ million) EDP Bandeirante Energy purchased to resell ACR Account/CDE Contributions Net Energy purchased after contributions 73,4 438,8 365,5 3Q ,9 277,1 9M ,8 Generation Non-Manageable Expenditures (R$ million) GSF EDP Energias do Brasil Distribuição Gastos não gerenciáveis (R$ milhões) EDP Escelsa 375,5 200,5 3Q14 175, ,8 587,4 9M14 875,4 319,5 198,6 57,0 63,9 1Q14 2Q14 3Q14 9M14 1) Considers energy purchased to resell in national currency. Do not consider Itaipu and charges. 9

10 Increase in Regulatory Asset due to the distributor s average tariff coverage lower than the spot price Average Coverage Tariff (R$) EDP Bandeirante EDP Escelsa Spot Price Q14 2Q14 Jul Aug Sep Oct OPEX Consolidated (R$ million) 9M14 vs. 9M13 1 EDP Bandeirante +0.1% EBITDA Regulatory Assets and Liabilties adjust 9M14 (R$ thousand) EDP Bandeirante EDP Escelsa Distribution EBITDA (IFRS) 85, , ,710 Change on net Regulatory Assets and Liabilities EBITDA + Net Regulatory Assets and Liabilities EDP Escelsa 182,465 86, , , , , % 298,6 103,5 +5.6% 109,4 9,2 +1.5% 9,4 97,5 103,6 +6.2% 36,1-19.8% 29,0 52,2-8.7% 47,7 9M13 Others Provision Third-party Services 298,9 9M14 Material Personnel 1) Others: Consider EDP Escelsa s COC sale on 3Q13 for R$ 52.6 million 290,0 241,3 92,7-6.5% 8,3 +0.8% 86,7 101,7-2.3% 8,4 99,3 56,6-57.9% 23,8 30,7-25.0% 23,1 9M13 Others Provision Third-party Services 9M14 Material Personnel 10

11 Cost control shown in OPEX reduction Opex (R$ million) 3T13 vs. 3T % +5.9% 52,6 260,4-9,5-0,9 1,0-17,8-13,1 207,8 220,1 Opex 3Q13 Asset sale Adjusted Opex 3Q13 Personnel Material Third-party services Provisions Others Opex 3Q14 Opex Consolidated (R$ million) Opex by business segments (R$ million) 9M14 vs. 9M13 1 9M14 vs. 9M13-8.3% 9M13 9M % ,6 +2.0% 268,0 22,4-2.9% 21,7 276,8-1.8% 271,9 95,5-52.5% 45,3 106,8-5.7% 100,7 9M13 Others Provision Third-party Services 9M14 Material Personnel 588,6 540,2 82,1 +1.0%% 83,0-8.6% 12,4 11,4 Distribution Generation Commercialization 1) Others: Considers gain/loss on asset sale. 11

12 Funding of R$ 1.2 billion to reinforce cashflow Indebtness: Dec/2013 vs. Sep/ Net Debt Cash Gross Debt 3, % 3, % % Net Debt/EBITDA Net Debt Net Debt/EBITDA 1,3x 1,4x 1,5x 1,2x 1,4x Dec/13 Sep/14 Sep/13 Dec/13 mar/14 jun/14 Sep/14 Refinancing/working capital 2014 (YTD) Company Source Date Maturity Comparative Cost* R$ million Effective Cost Holding Debentures Feb-14 Aug-15 CDI +0,72% CDI + 0,72% EDP Bandeirante Rural Credit Feb-14 Jul-15 CDI +0,12% ,15% of CDI EDP Bandeirante Debentures Apr-14 Apr-19 CDI +1,39% CDI + 1,39% EDP Escelsa Rural Credit Feb-14 Jul-15 CDI +0,12% ,15% of CDI EDP Escelsa Cédula Cambiária May-14 May-18 CDI -0,49% % of CDI + 1,0625% EDP Escelsa Debentures Aug-14 Aug-20 CDI +1,50% CDI + 1,50% 1,186 * cost in CDI + as the base date 09/30/2014 1) Do not consider debt from HPP Santo Antônio do Jari, HPP Cachoeira Caldeirão, HPP São Manoel and TPP Pecém I (consolidation criteria). 12

13 Growth delivery: +2.3GW of capacity from 2005 to 2018 Installed Capacity Evolution 1 (MW) 2, , , GU I HPP Santo Antônio do Jari (50%) 3Q14 Hydro projects under construction and committed Gu II and GU III HPP Santo Antônio do Jari (50%) 2015 EOL Baixa do Feijão (45%) 2016 HPP Cachoeira HPP São Caldeirão (50%) Manoel (33,3%) EOL Aventura (45%) HPP EDP BrasilStake (1) Capacity (100%) (MW) Contracted Energy (Avg. MW) Capex(e) (R$bn) Debt/Equity Startup of Commercial Operation Stº Antônio do Jari 50% %/33% Jan,2015 Cachoeira Caldeirão 50% %/48% Jan,2017 São Manoel 33% %/32% May,2018 (1) Take into account the proportional consolidation 13

14 HPP Jari Startup of GU I 3.5 months ahead of schedule and GU II 1.5 month ahead of schedule HPP Santo Antônio do Jari MW MW average Startup of commercial operation GU I: Startup of supply to the SIN Aug 26, 2014 (test); DCO 2 in Sep 17,2014; Anticipation of 3.5 months; Startup of commercial operation GU II: Startup of supply to the SIN Oct 31, 2014 (test); DCO 2 in Nov 14,2014; Anticipation of 1.5 month; Capex(e): R$ 1.2 billion 93.4% accomplished until Sep/2014 1) 100% of the project. 2) Declaration of Commercial Operation

15 HPP Jari GU III in the assembly phase Powerhouse overview GU I in commercial operation GU II in commercial operation UG III Kaplan Turbine in the pit

16 HPP Cachoeira Caldeirão Under construction Spillway overview HPP Cachoeira Caldeirão MW MW average Startup of operation: Jan/2017(e): Ongoing activities: i) Concreting of Powerhouse and spillway and assembly area; ii) assembly of electromechanical equipments; among others. Funding: Short term: bridge-loan: R$ 648 million Long term: under negotiation Capex(e): R$ 1.2 billion 38% accomplished until September/2014 Nota: 1) 100% considera of the 100% project. do empreendimento. 1) Declaração comercial de operação

17 HPP São Manoel Under construction Cofferdam overview Recent activities: HPP São Manoel MW MW average Beginning of main construction site; Beginning of earthmoving activities for cofferdam construction. Prior activities: Signing of the Concession Agreement in May with 134 days anticipation; Obtaining REIDI with 56 days anticipation; Obtaining the declaration of public utility (construction site) 83 days less than the due approval date (155 days); Issuance of debentures (bridge loan) of R$ 532 million. 1) 100% of the project. 17

18 TPP Pecém I: UG II availability index reaches 98% in Oct/2014 and the failure rate shows a constant reduction Availability Index (%) by generation unit 2014 GU I GU II Failure rate (LTM) by generation unit 2014 GU I GU II 88% 91% 67% 81% 95% 82% 80% 62% 98% 84% 99% 54% 82% 77% 90% 76% 97% 98% GU I outage since August Jan Feb Mar Apr May Jun Jul Aug Sep Oct Jan Feb Mar Apr May Jun Jul Aug Sep Oct Availability Index (%) 1 consolidated Failure Rate(LTM) consolidated % 82% 80% 83% 49% 71% Q14 2Q14 Jul Aug Sep 3Q14 Jan Feb Mar Apr May Jun Jul Aug Sep Oct 18

19 17,2% 15,5% 13,8% 14,6% 13,2% 11,8% 11,8% 10,4% Customer Satisfaction: quality indexes below regulatory goal (incentive to quality improvement) DEC Evolution (hours) Low tension non-technical losses EDP Bandeirante EDP Bandeirante EDP Escelsa Actual Regulatory level 8,08 9,67 9,81 9,61 9,94 7,54 7,41 7,30 20,3% 20,2% 19,9% 18,0% 16,1% 16,1% 15,3% 13,9% 13,1% 4Q13 1Q14 2Q14 3Q14 FEC Evolution (times) Q Low tension non-technical losses EDP Escelsa EDP Bandeirante EDP Escelsa 5,51 5,78 5,55 6,22 5,33 6,10 6,35 5,17 19,6% 18,1% 17,1% 18,4% 15,9% 17,4% 4Q13 1Q14 2Q14 3Q14 Incentive to quality improvement (X Factor s q component): 12,1% 10,5% 9,3% 9,3% 7,9% EDP Bandeirante tariff readjustment (Xq: -0.64%) EDP Escelsa tariff readjustment : (Xq: -0.33%) Q

20 Maytê Souza Dantas de Albuquerque Marília Barbosa Nogueira Thiago Piffer Anna Luisa Rego Bacellar Rodrigo Tassone Telephone: +55 (11)