Light S.A. Corporate Presentation. Citi's 16th Annual Latin America Conference February 2008

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Transcription:

Light S.A. Corporate Presentation Citi's 16th Annual Latin America Conference February 2008 1

Light s Corporate Structure 4 th largest integrated Company in the Brazilian electric industry Light S.A. (Holding) Light S.E.S.A (*) (Distribution) Light Energia (Generation) Light Esco Ltda (Trading) Lightger (New Projects) 3 rd largest distribution Company 5 th largest private Company in hydro-generation (*) Includes Light Overseas and Light Energy 2

Shareholder s Structure CEMIG Companhia Energética de Minas Gerais AGC Andrade Gutierrez Concessões LUCE LUCE do Brasil Fundo de Investimento em Participações EQUATORIAL Equatorial Energia 25% 25% 25% 25% RME Rio Minas Energia Participações S.A. 52.2% LIGHT S.A. 33.7% 14.1% Free Float: 47.8% BNDESPAR MARKET The Capital Stock comprises 203,462,739 common shares as of October 31 st, with no par value. 3

Corporate Governance Shareholders Controller group Controller discussion group General Assembly Minority 11 Board members: 1 independent and 1 employees indicated 2 years term Fiscal Council Manual of Corporate Governance Interface Board of Directors Fiscal Council Auditors Committee Governance and Sustainability Committee Management Committee Finances Committee Human Resources Committee CEO and Directors 4

Light s History For the first time in its history, Light is controlled by a Brazilian Private Group. Acquisition by Eletrobras Eletropaulo s Privatization Acquisition by EDF - Light joined ISE (Bovespa s Sustainability Index) -First dividends payment in a 9-year period 1905 1979 May 96 Apr 98 Oct 01 Jan 02 Jul 05 Aug,10 2006 Feb 2008 RME Creation of Light, a private Company Light s Privatization Public Company Split of EDF - AES Light joined Bovespa s Novo Mercado, Brazil s highest level of corporate governance standards. 5

Distribution Business Light SESA 3 rd largest energy distribution Company in Brazil - 3.8 million clients - Energy consumption in the concession area (2007) - 23,653 GWh - 72% of the consumption of Rio de Janeiro state (2 nd GDP in Brazil) - Distribution Gross Revenue (2007) - R$ 7.8 billion - Distribution Net Revenue (2007) - R$ 4.7 billion 6

Generation Business Light Energia 6 th largest private company in hydro-generation in Brazil Generation Installed Capacity 855 MW UHE HPP Santa Santa Branca Branca 56 56 MW MW UHE IlhaHPP dos Ilha Pombos dos Pombos 187 MW 187 MW Reservatório Lajes Reservatory de Lajes UHE HPP FontesNova 132 132 MW MW UHE HPP Usina Subterrânea Nilo Peçanha 380 MW UHE Pereira HPP Pereira Passos Passos 100 MW 100 MW 7

New Generation Projects Investment in generation program: 3 new plants increase of 28% in current capacity to 1,093 MW. Projects Local Installed Capacity Assued Energy Capex Start up Estimative SHP Paracambi Ribeirão das Lajes (RJ) 25 MW 21.5 MW R$100 MM 2010 SHP Lajes * Lajes Complex 18 MW 15 MW R$56 MM 2010 HPP Itaocara Paraíba do Sul river 195 MW 110 MW R$700 MM 2012 * Brownfield project, using the existing structure of the Fontes Velha facility 8

Trading and Services Business Light Esco Net Revenue - R$ million EBITDA - R$ million 600% 30.8 77% 3.9 75.4% 2.2 4.4 24.6% 2006 2007 Others Energy Sales 2006 2007 Energy Sales Trader 390 30 Broker 10 1.200 2 0 2006 2007 2006 2007 Energy (GWh) Clients Energy (GWh) Clients 9

OPERATIONAL HIGHLIGHTS 10

Energy Distribution Growth Electric Power Consumption (GWh) CAGR = 2.6% 21,901 17.1% 13.0% 23,299 22,904 23,653 17.9% 3.3% 20.3% 22.6% 13.3% 13.6% 13.5% 23.9% 24.3% 24.5% 24.3% 15.7% 13.5% 9.9% 8.5% 30.2% 31.0% 31.6% 31.0% 2004 2005 2006 2007 Residential Industrial Commercial Others Free Market Customers 11

Collection Rate Evolution Collection Rate 12-month moving average! 2006 2007 Billing (R$ MM) 7,913 7,886 Collection (R$ MM) 7,360 7,840 % 93.0% 99.4% 12

Collection Rate Evolution Collection by Segment Collection rates presented a significant evolution within all clients segments 110.3% 108.2% 106.2% 99.4% 93.0% 93.8% 96.3% 74.3% 63.2% 19.8% Total Light Whole sales market Cedae Supervia Public sector 2006 2007 13

Energy Losses Evolution Losses and delinquency are interconnected issues! In 2007 Light presented an 0.8 p.p increase in losses. Meanwhile, collection rates grow from 93.0% of total billed energy to 99.4% in 2007. "#$% & & & & & '( ( ( )( '( *+$",%%% ",%%%"-"+",."/0"1"2%)3" 14

Losses overview Distribution total losses by concession s sub-areas (2007) Grande Rio 4.091 GWh 64% Vale do Paraíba 168 GWh 3% Metropolitana 2.119 GWh 33% Losses by type (2007) Technical Losses 29% Risky Areas 39% Non-technical losses by segment (ago/07 - LTM) Non-Technical Losses 71% Non-Risky Areas 61% 15

Loss Prevention Integrated action Institutional partnership Integrated actions to fight losses Public awareness measures (internal and external) Operational activities 16

Investment Program Investment in aquisitions & improvements on fixed asset (R$ million) 600 347 276 322 355 2004 2005 2006 2007 2008 E Investments Budget Main investments (2008) - Losses: R$ 220 million - Net (maintenance and expansion): R$ 175 million - New Projects (SHP): R$ 40 million - Power plants maintenance: R$ 30 million 17

FINANCIAL RESULTS 18

Revenues Net Revenue R$ millons CAGR 4.7% 4,348 4,951 4,992 2005 2006 2007 19

Expenses Operational Costs R$ millions CAGR 2.1% 3,955 4,534 4,215 1,319 1,643-24% 1,251 2,637 2,891 + 2% 2,965 2005 2006 2007 Non-Manageable Manageable Inflation index (IGP-M): 4.5% 53% 43% 37% 47% 57% 63% 2005 2006 2007 Core areas Support 20

Financial Highlights EBITDA R$ millions CAGR 13,0% 1.105 765 738 2005 2006 2007 Net Income R$ millions EBITDA per segment (2007): 1.077 % & 243 + 1.227 MM 4#'!& * & & *Does not consider eliminations -150 2005 2006 2007 21

Debt profile 3.147 Net Debt 1 R$ million -53,6% 2.540 1.462 Rated as Investment Grade (S&P) bra- 2005 2006 2007 (1) Net Debt = Total Debt - Cash, excludes Braslight Short Term 6% Foreign Currency* 8% Long Term 94% Brazilian Currency 92% * 5% if hedge is considered 22

Amortization Schedule Amortization Schedule* (R$ millions) 52 70 95 89 86 212 342 166 2008 2009 2010 2011 2012 2013 2014 After 2014 Principal only Average Cost : US$ + 6.51% p.a. R$: 12.17% p.a. Average Term: 4.8 years 23

Return to Shareholders: Turnaround recognition Light x Ibovespa x IEE 2007 180 160 140 120 R$/ação 01/01/07 21,37 28/12/07 28,65 Ibovespa 44% Light 34% IEE 24% 100 80 60 dez/06 jan/07 fev/07 mar/07 abr/07 mai/07 jun/07 jul/07 ago/07 set/07 out/07 nov/07 dez/07 R$ MM Enterprise Value 7.046 Market Capitalization 5.829 Trading volume/day (2007) 8,3 R$ 721 million in dividends (a 12.4% yield) Minimum 50%dividend policy 24

Key Investment Features GROWTH - New generation projects - Energy trading activity - Significant investment plan for Rio de Janeiro State - Losses reduction and prevention EFFICIECY GAINS - Cost reduction actions - Increase in collection rates - Outsourcing of all non-core activities - Sale of non-core assets RETURN TO SHAREHOLDERS - Balanced capital structure - Strong cash flow generation - Stock appreciation - Dividend distribution policy COMMITMENT TO THE FUTURE - Improve customer relationship - Recovery of Light s institutional image - Great place to work - Focus on sustainability 25

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