Successful Strategy Performance reflects balanced portfolio structure. August, 2013

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Transcription:

Successful Strategy Performance reflects balanced portfolio structure August, 2013

Disclaimer Some statements and estimates in this material may represent expectations about future events or results that involve risks and uncertainties known and unknown. There is no guarantee that the events or results referred to in these expectations will occur. These expectations are based on present assumptions and analyses from the viewpoint of our management, based on their experience, the macroeconomic environment, market conditions in the energy sector and our expected future results, many of which are not under Cemig s control. Important factors that can lead to significant differences between actual results and projections about future events or results include Cemig s business strategy, Brazilian and international economic conditions, technology, Cemig s financial strategy, changes in the energy sector, hydrological conditions, conditions in the financial markets, uncertainty regarding future results of operations, plans and objectives as well as other factors. Because of these and other factors, our actual results may differ significantly from those indicated in or implied by these statements. The information and opinions contained herein should not be understood as a recommendation to potential investors and no investment decision should be based on the truthfulness, or completeness as of the date hereof of this information or these opinions. None of Cemig s professionals nor any of their related parties or representatives shall have any liability for any losses that may result from the use of the content of this presentation. To evaluate the risks and uncertainties as they relate to Cemig, and to obtain additional information about factors that could lead to different results from those estimated by Cemig, please consult the section on Risk Factors included in our Formulário de Referência filed with the Brazilian Securities Commission CVM, and in Form 20-F filed with the U.S. Securities and Exchange Commission SEC. All figures are in BR GAAP. 2

Brazil s Leading Power Utility Integrated Power Utility in Brazil Growth in EBITDA 2006-12 Market cap of US$ 8,6 (1) B. Role in industry #1 +58% #3 (2) Leading consolidator In the Power Industry since 1952 3 (1) As of August 13 th, 2013 (2) In the Brazilian Power Industry

Cemig: Strength in Numbers Number of power plants 70 Total installed capacity 7,032MW Locations in Minas Gerais State 5,415 Size of concession area vs. France Electricity Distribution lines Power Transmission lines Larger 510,744 km 9,413 km 4

Cemig at a Glance Based in State of Minas Gerais, controlling shareholder growing throughout Brazil and Chile Strong financial profile: 1H13 Net revenues: R$ 7,1B EBITDA: R$ 2,8B 1H12 Net revenues: R$ 6,6B EBITDA: R$ 2,4B Highest liquidity in the sector listed on 3 stock exchanges New York, São Paulo, Madrid More than 90.000 shareholders in 40 countries Average Daily Trading Volume in 2012: R$84M in Bovespa US$55M in NYSE Solid dividend policy Minimum 50% payout ratio Every two years, may pay extra dividends, if cash conditions permit Strong Growth outlook in the long run Acquisitions Re-pricing of energy contracts 5

The Cemig Story Agenda The positioning The performance The growth 6

Cemig is Uniquely Positioned 1 The Brazil advantage 2 Unmatched scale 3 Diversified portfolio 4 Leader in renewable energy 5 Strong governance 7

1 BRAZIL ADVANTAGE An Emerging Powerhouse Economy Latin American economy #1 Ranking of economy in world #6 GDP 2012 US$2.2 Trillion GDP growth 2013* 3.1% Population 192M Investment grade by Moody s, Fitch and S&P * Focus Report of Brazil s Central Bank in 1 st March 2013 8

2 UNMATCHED SCALE Largest Integrated Utility in Brazil #1 Electricity distributor* + #3 Largest power transmission group + #3 Largest power generation group #1 Integrated utility RR AP Power Generation AC AM Power Generation (under construction) Power Transmission Power Transmission (under construction) Electricity Distribution Cemig Free Consumer Clients Purchase of Energy Wind Power Generation Natural Gas Distribution Telecom Backbone Provider AM AC RO Presence in states and Chile PA TO MT DF GO MS SP PR SC RS MA CE PI BA MG RN PB PE AL SE ES RJ 9 * in terms of length of electricity distribution lines

3 DIVERSIFIED Diversified, Low Risk Business Portfolio 1H13 33% 62% 5% Generation Transmission Distribution Most of revenues are inflation protected 10

4 RENEWABLE LEADER Leader in Renewable Hydro Power Energy Power Generation by Source 17% 2% 14% 8% 80% 98% 68% 3% 9% 2% World 08 Brazil 11 Cemig 11 Fossil Source Fuels Nuclear Hydro Others 11 Source: EPE [BEN 2011 Preliminar Results and IEA [KeyWorld EnergyStatistics-2010]

5 GOVERNANCE Best-in-Class Corporate Governance Minas Gerais, controlling shareholder a positive influence one of fastest growing, investor-friendly states in Brazil growth and profitability interest aligned with minority shareholders 6 from a total of 14 members are appointed by minority shareholders Pro-market corporate bylaws include Minimum 50% dividend payout Capex limited to 40% of EBITDA Net debt limited to 2.5x EBITDA Net debt limited to 50% of total cap. Leader in sustainability only Latin American utility in DJSI since 1999 Included in the ISE Bovespa sustainability index since 2005 Present in the Global Dow Index Minas Gerais 12

The Cemig Story Agenda The positioning The performance The growth 13

Growth in EBITDA R$ million 6.000,0 5.000,0 4.588 4.543 5.351 5.084 EBITDA Margin: 45% 4.000,0 3.184 3.000,0 2.000,0 1.000,0-2009 2010 2011 2012 1H13* 14 *Ebitda calculated by same criterion used in guidance presented at 18 th annual Cemig/Apimec meeting with investors.

Net Income Continues to Expand R$ million 4.500,0 4.000,0 4.272 Net Margin: 21% 3.500,0 3.000,0 2.134 2.258 2.415 2.500,0 2.000,0 1.482 1.500,0 1.000,0 500,0-2009 2010 2011 2012 1H13 15

Attractive and Secure Dividend Payout (1) Dividend Payout (% of Net Income) Dividend Yield (%)* Preferred shares 20 98 91 50 50 6 6 9 11 2008 2009 2010 2011 2008 2009 2010 2011 2012 * Considering Interest on Equity for the 2012 business year Dec./2012 Declared: IOE - R$1.7 bn E.D. - R$1.6 bn Jan./2013 Paid: E.D. - R$1.2 bn Mar./2013 Paid: IOE- R$ 686 mn E.D. - R$400 mn Apr./2013 Declared: O.D. R$590 mn A.D. - R$628 mn Jun./2013 Paid: IOE- R$164 mn O.D. - R$295 mn A.D. - R$314 mn Dec./2013 Paid: IOE- R$850 mn O.D. - R$295 mn A.D. - R$314 mn 16

Strong Balance Sheet to Support Growth Net debt to EBITDA 1.58X Debt in foreign currency ( * ) 0.4% Cash on hand 1H13 R$4.5B Net Revenue 1H13 R$ 7.1B *Net of financial hedging 17

EBITDA guidance CEMIG, CONSOLIDATED 8000 7500 7000 6500 6000 5500 R$ million (1) 6.482 5.865 6.915 7.751 6.083 6.029 7.843 7.861 6.307 6.447 7.000 6.000 5.000 4.000 3.000 2.000 1.000 Achieved 54.27% of lower limit of Guidance* 6,482 5,865 3,183 6,519 5000 2013 2014 2015 2016 2017 - Guidance 2013 Last 12 months 18 (1) Constant currency as of June 2012. *Ebitda calculated by same criterion used in guidance presented at 18 th annual Cemig/Apimec meeting with investors.

The Cemig Story Agenda The positioning The performance The growth 19

Clear Long Term Goals Current Share of Brazil Markets Long Term Goal 20% 12% 13% 7% 6% Electricity Distribution Power Generation Power Transmission Share of ALL power markets Natural Gas Distribution Brazilian generation market (% of total installed capacity) Brazilian transmission market (% of Permitted Annual Revenue (RAP)) Brazilian electricity distribution market (% of all electricity distributed to free and captive clients in Brazil) 20

Target Ebitda contribution by business in the long run CIA. ENERGÉTICA DE MINAS GERAIS Power Generation Power Transmission Electricity Distribution Natural Gas Distribution Telecom Services 40% 20% 40% 21

Growth Drivers 1 Leverage price increases $ 2 Improve operating efficiency 3 Geographic expansion 22

GROWTH DRIVER #2 Record of Successful Acquisitions Business Model for Growth Partnerships with Equity Investment Funds (FIPs) in recent acquisitions (Terna and Light) create a new growth driver Structuring of partnerships with FIPs produces a growth strategy that optimizes capital needs Innovative acquisition structure enables Cemig to use it in other expansion opportunities, aligned with its Long-Term Strategic Plan. Attractive return to investors, at low risk Best-in-class Corporate Governance Investors enter as financial partners and Cemig as operating partner Possibility of increasing stake in the future Strategic positioning with minority or equal interests assures Cemig greater access to financial capital markets CEMIG SPE Acquisition Investment Fund High level of corporate governance 23 23

Clear Priorities for 2012 1 Execute cost reductions 2 Integrate Taesa and Light acquisitions Priorities 3 Participate in green fields 4 Select new acquisitions 24

Why Invest in Cemig Leading power utility in Brazil Powerful drivers fueling growth Sound Balance Sheet Consistent profitable track record Strong Dividend Policy World Leader in Sustainability 25

Relações com Investidores Telefone: (55-31) 3506-5024 Fax: (55-31) 3506-5025 Email: ri@cemig.com.br Website: http://ri.cemig.com.br 26