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Expo Money São PauloSeptember, 2012
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AES Brasil Group
P i B il i 1997• Presence in Brazil since 1997• Operational Figures:
• Consumption units: 7.7 million
• Distributed Energy: 53 6 TWhDistributed Energy: 53.6 TWh
• Installed Capacity: 2,659 MW
• Generated Energy : 13.9 TWh
• 7.4 thousand AES Brasil People• Investments 1998-2011: R$ 8.1 billion• Solid corporate governance and sustainablepractices• Safety as value #1
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AES Brasil widely recognized in 2009-2012
Quality and Safety Management Excellence Environmental Concern
(AES Tietê)
(AES Tietê)
(AES El l )
(AES Eletropaulo) (AES Sul)(AES Brasil)
(AES Tietê)
(AES El t l )
(AES Tietê)
(AES Eletropaulo)
(AES Eletropaulo)
(AES Eletropaulo)
(AES Brasil)
(AES Tietê)(AES Tietê)
(AES Eletropaulo)
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(AES Eletropaulo) (AES Eletropaulo)(2011- AES Tietê; 2012 – AES Eletropaulo)(AES Tietê)
Shareholding structure
AES Corp BNDES
C 50.00% - 1 shareP 100%T 53.85%
C 50.00% + 1 shareP 0.00%T 46.15%
Cia. Brasiliana de Energia
C 99.99%T 99.99%
C 76.45%P 7.38%T 34.87%
C 71.35%P 32.34%T 52.55%
C 99.00%T 99.00%T 99.70%
AESInfoenergy
AESUruguaiana
AESEletropaulo
AESTietêAES Sul
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C = Common SharesP = Preferred Shares
T = Total
AES Tietê and AES Eletropaulo are listed i BM&F Bin BM&F Bovespa
Others²Free Float¹ ¹ Market Cap³
R$ 3.2 bi
US$ 1 6 bi8.5%56.2%19.2%16.1%
R$ 9.8 bi
US$ 1.6 bi
24 2% 28 3% 39 5% 8 0%US$ 4.8 bi
24.2% 28.3% 39.5% 8.0%
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1 - Parent companies, AES Corp and BNDES, have similar voting capital on each of the Companies: approx 38.2% on AES Eletropaulo and 35.7% on AES Tietê 2 - Includes Federal Government and Eletrobrás shares in AES Eletropaulo and AES Tietê, respectively3 - Base: 08/08/2012. Considers preferred shares for AES Eletropaulo and preferred and common shares for AES Tietê
AES Tietê overviewGeneration facilities
18 hydroelectric plants in São Paulo and Minas Gerais
30-year concession valid until 2029; renewable for other
20 years20 years
Installed capacity of 2,663 MW, with physical guarantee1
of 1,282 MW average
Almost all the amount of energy that AES Tietê can sell
is contracted with AES Eletropaulo until the end of 2015
AES Tietê can invest in generation its main activity and AES Tietê can invest in generation, its main activity, and
operate in energy trading
370 employees as of June, 2012
71 - Amount of energy allowed to be long term contracted
Generated energy shows high operational availability p y
Generated energy (MW avarage1) 1H12 Generated energy by power plant (MW average1)
7%
Água Vermelha
Bariri
139% 138%130%
125% 124%
10%
9%7% Bariri
Barra Bonita
Ibi i
124%
59%
5%5%
5%
Ibitinga
Nova Avanhandava1.665
1.599 1.582 1.606
1.742
5% Promissão
Other Power Plants*
2009 2010 2011 1H11 1H12
Generation - Mwavg Generation/Physical guarantee
1 – Generated energy divided by the amount of hours * Caconde, Limoeiro, Mogi and SHPPs 8
A significant amount of billed energy and net revenues comes from the bilateral contract with
AES EletropauloNet revenues (%)Billed energy (GWh)
14,706 14,729 15,122 88%
2,331 1,980 1,942
1,150 1,340 1,519
117 301 554 , ,
9 059
11 108 11 108 11 108 1 4252,182 851
909 201 297 7,510
9,059
3%7%2%
AES Eletropaulo
Other bilateral contracts
11,108 11,108 11,108
5,034 5,672
1,425
1 – Energy Reallocation Mechanism 9AES Eletropaulo MRE Spot Market Other bilateral contracts1
Other bilateral contracts
Spot Market
MRE1
2009 2010 2011 1H11 1H12
Nova Avanhandava and Ibitinga power plants modernization investments
Investments (R$ million) 1H12 Investments
p
87%175
19
82
7%6%
70
156
62
12 10
3
82174 72
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Equipment and Modernization2010 2011 2012(e) 1H11 1H12
70 6238
101-Small Hydro Power Plants
New SHPPs*
IT projectsInvestments New SHPPs1
Growth opportunities
“Thermal São Paulo” Project
N t l bi d l th l l t ith 550 MW f i t ll d it- Natural gas combined cycle thermal plant, with 550 MW of installed capacity
- Project will not participate in 2012 auctions (A-3 and A-5) due to gas unavailability
- Environmental License was restored after the decision of São Paulo State Court of Justice
- Next steps: Obtainment of the installation license
“Th l A ” P j t“Thermal Araraquara” Project
- Natural gas combined cycle thermal plant, with 579 MW of installed capacity- Purchase option acquired in March, 2012
P j t ill t ti i t i 2012 ti (A 3 d A 5) d t il bilit- Project will not participate in 2012 auctions (A-3 and A-5) due to gas unavailability- Next steps: Obtainment of the installation license
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Financial highlights
Ebitda (R$ million)Net revenue (R$ million)
1 255 1,320 1,466
1 670 1 754 1,886
9 1,255 ,
1,670 1,754
8251,075
1,309 1,311
643 827
(54)
75% 75% 78% 78% 77%
2009 2010 2011 1H11 1H122009 2010 2011 1H11 1H12
(54)
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Ebitda MarginRecurring Non-recurring
Steady earnings distribution on a q arterl basisquarterly basis
Net income and dividend pay-out1 (R$ million)
110% 117% 109%
• Dividends distribution practice:100% of net income
– 25% of minimum pay-out
11% 11% 11%
p yaccording to bylaws
– Average payout since 2006:106%
Average dividends since 2006:
31479
706 737
– Average dividends since 2006:R$ 745 million per year
742 706845
354476
(36) (3)2009 2010 2011 1H11 1H12
131 – Gross value
Recurring Non-recurringPay -out Yield Pref
Capital MarketsAES Tietê X Ibovespa X IEE
140
160 12 MounthsBA
+ 10%120
140
+ 5%
+ 15%
80
100
set/11 dez/11 mar/12 jun/12 set/12
+ 5%
- 9%+ 3%
set/11 dez/11 mar/12 jun/12 set/12
Ibovespa IEE² GETI4 TSR³ GETI3
Ex dividends 08/06/2012A
• Market Cap4: R$ 8.1 billion
Provisional Measure 579 published to define the conditions for renewal of concession contracts and tax cuts in the energy sector.B
142 – Eletric Energy Index1 – Index: 09/14/2011 = 100 3 – Total Shareholder’s Return 4 – Data from: 09/14/2012
• BM&FBovespa: GETI3 (common) e GETI4 (preferred)
• ADRs traded in the U.S. OTC Market: AESAY (common) and AESYY (preferred)
Why invest in AES Tietê?
St h ti bilit Strong cash generation ability
First-class corporate governance practices
Sustainable practices in business
Shareholder remuneration practice in recent years: quarterly payments of
the total net income
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AES Eletropaulo overviewConcession area
Largest electricity distribution company in Latin America
Serving 24 municipalities in the São Paulo Metropolitan area
Concession contract valid until 2028; renewable for another 30Concession contract valid until 2028; renewable for another 30
years
Concession area with the highest GDP in Brazil
45 thousand kilometers of lines and 6.3 million consumption
units in a concession area of 4,526 km2
45 TWh distributed in 2011 45 TWh distributed in 2011
AES Eletropaulo, as a distribution company, can only invest in
assets within its concession area
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5,850 employees as of June, 2012
Consumption evolution
Total market1 (GWh) Consumption by class – 1H12 (%)
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41,269 43,345 45,102 18 29
15 9
6,832 7,911 8,28441,269
22,365 22,67441 24
34,436 35,434 36,817
18,216 18,754
4,149 3,920
22,365 ,
2638
2009 2010 2011 1H11 1H12
Captive Market Free Clients
Brazil AES Eletropaulo
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181 – Net of own consumption
Captive Market Free Clients
Residential Industrial Commercial Others
Investments focused on grid automation, maintenance and system expansiony p
Investments breakdown (R$ million) Investments 1H12 (R$ million)
88
98
1215
700
800
2822
46682
739 841
88
8815
38
400
500
600
700
794
28
325 354
88
Maintenance100
200
300
400
654 7179
315 339
10 15
Client Service
System Expansion
Losses Recovery
IT
0
100
2010 2011 2012(e) 1H11 1H12
Capex Paid by Customers IT
Paid by the Clients
Others
Capex Paid by Customers
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SAIDI reduction and SAIFI remains below the regulatory limit g y
SAIDI - System average interruption duration index SAIFI - System average interruption frequency index
7.87 7.39 6.93 - 18%
10.09 9.32
8 68
6.17 5.43 5.452.90 2.37
11.86 10.60 10.36
8.68
5.784.54
SAIDI (h ) SAIDI A l R f
2009 2010 2011 Jan-Jun/11 Jan-Jun/12
SAIFI A l R fSAIFI (ti )
2009 2010 2011 jan/jun11 jan/jun12
7th 3rd 4th8th 7th 6th
ABRADEE ranking position among the 28 utilities with more than 500 thousand customers
SAIDI (hours) SAIDI Aneel Reference SAIFI Aneel ReferenceSAIFI (times)
2012 SAIFI ANEE R f 6 8 i
20Source: ANEEL, AES Eletropaulo and ABRADEE 1 – 1 – Accumulated 7 months (Jan-Jun ) 2011 and 2012
► 2012 SAIDI ANEEL Reference: 8.67 hours ► 2012 SAIFI ANEEL Reference: 6.87 times
Financial highlights
Ebitda (R$ million)Net revenues (R$ million)
426
2,413 2,848
9,697 9,836
197 339
44287
426 9331,7758,786
9,697 ,
1,491 1,648 1,473940
134
136
1,074
562
4,814 4,924
2009 2010 2011 1H11 1H12
9 0425
2009 2010 2011 1H11 1H12
Recurring
Regulatory assets and liabilities
Non-recurring21
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1 – Non recurring 2011 : Includes sale of AES Eletropaulo Telecom with a R$ 707 million impact on Ebitda
Earnings distributionon semi-annual basis
Net income and dividend payout1 (R$ million)o se a ua bas s
101.5% 114.4%
54.4%
• Dividends distribution practice:distribution above the minimum
20.4% 28.6% 17.1%
1.348
1.572
required- 25% of minimum pay-out according
to bylaws
– Average payout since 2006: 83%236374
350 6521.157
Average payout since 2006: 83%per year
– Average dividends since 2006:R$ R$ 904 million per year
622 762 634
160236
287
162
537
167
(80)2009 2010 2011 1H11 1H12
6376 247
221 – Gross amount2– Non recurring 2011 :Includes sale of AES Eletropaulo Telecom with a R$ 467 million impact on net income
Pay-out Yield PNNet Income - ex one-off and with regulatory assets and liabilities
Regulatory assets and liabilities
One off
Regulatory methodology and tariff reset
3rd cycle of tariff resetTariff reset and readjustment
• Tariff Reset is applied each 4 years for AES Eletropaulo
Tariff Revision:Average effect perceived by
consumers: -9.33%
Variable costs
Regulatory O
Parcel A
Tariff reset +5 51%RemunerationA t B
X WACC Investment Remuneration
Opex(PMSO)
Parcel B
Tariff reset: +5.51%Asset Base
X Depreciation Depreciation
• Tariff Readjustment: annually − Parcel A : costs are largely passed through to the tariff Review + tariff adjustment: -2.26%
− Parcel B: cost are adjusted by IGPM +/- X(1) Factor
1 – X Factor: index that captures productivity gains
From July 4, 2012
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Efficiency program and cost management
Implementation of “Creating Value” project in 2010, that provided gains with cost control and increasei ffi i d
Efficiency ProgramEfficiency Program
management
in efficiency and revenue
Program initiatives:
• review in the operational process and support areas
• increase in productivity of the teams in fieldincrease in productivity of the teams in field
• optimization in orders to emergency teams
• improvement in the management of material and service suppliers contracts
• efficient use of operational fleet
• rationalization and modernization of customer services stores and on site billing
Centralization of activities in the new corporate headquarters and demobilization of CambuciSale of PropertySale of Property Centralization of activities in the new corporate headquarters and demobilization of Cambucioperational unit will allow the sale of real estate in value estimated up to R$ 239 million
Sale of PropertySale of Property
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Capital MarketsAES El t l X Ib X IEE
130
150
AES Eletropaulo X Ibovespa X IEE
BA12 mounths¹
70
90
110 + 5%+10%
- 34%
30
50
70
set-11 nov-11 jan-12 mar-12 mai-12 jul-12 set-12
- 38%- 34%
Ibovespa IEE² AES Eletropaulo PN AES Eletropaulo TSR³
Disclosure by Aneel of the preliminary calculation of the tariff reset- 10/04/2012A
• Market cap4: R$ 3.1 billion• BM&FBOVESPA: ELPL3 (common) and ELPL4 (preferred)
B Aneel disclosed the final terms relating to tariff resetand adjustment - 02 and 03/07/2012
BM&FBOVESPA: ELPL3 (common) and ELPL4 (preferred)• ADRs traded on the OTC Market: EPUMY (preferred)
1 – information until 14/09/2012, Index: 14/09/2011 = 100 2 – Eletric Energy Index3 – Total Shareholder Return 4– Data from:: 09/14/12. Calculation includes only preferred shares
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Why invest in AES Eletropaulo?
Strong ability to generate cash
First-class corporate governance practices
Embracing sustainable practices in business
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Contacts:[email protected]
+ 55 11 2195 7048
The statements contained in this document with regard to the business prospects, projected operating and financiall d h i l l f b d h i f h C ’ M iresults, and growth potential are merely forecasts based on the expectations of the Company’s Management in
relation to its future performance. Such estimates are highly dependent on market behavior and on the conditionsaffecting Brazil’s macroeconomic performance as well as the electric sector and international market, and they aretherefore subject to changes.
.