Companhia Energetica De Minas Gerais Sa · BMFBOVESPA:CMIG3
Companhia Energetica De Minas Gerais Sa — Energy Co of Minas Gerais — Q1 2011 Earnings Presentation
29 slides from Companhia Energetica De Minas Gerais Sa's earnings presentation, May 19, 2011
Slide 1: 1Q 2011 results: Portfolio of businesses sustains results
1Q 2011 results Portfolio of businesses sustains results
Slide 2: Disclaimer
Disclamer 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 pr
Slide 3: Execution of the Strategy takes Cemig to a new level
Execution of the Strategy takes Cemig to a new level Strategic Plan calls for sustainable growth, aiming to ensure addition of value for shareholders over the long term Leadership in consolidation of Brazilian electricity sector Balanced growth in the 3 business segments through acquisitions and new
Slide 4: First quarter 2011 results
First quarter 2011 results Net revenue EBITDA Net Income 2,878 18% 3,387 1,164 11% 1,292 520 1% 526 1Q2010 1Q2011 1Q2010 1Q2011 1Q2010 1Q2011 Cemig continues to deliver consistent results to shareholders Successful growth strategy leads to a robust expansion of our indicators Portfolio of businesses
Slide 5: Main focus is on growth
Main focus is on growth Acquisitions: Performance of companies acquired confirms success of the strategy of growing with financial partners and through minority holdings Greenfields: Discipline of investing in attractive conditions, with commitment to add value for shareholders always in first place
Slide 6: Growth strategy
Growth strategy Growth model sustains Cemig’s leadership in Brazilian electricity sector Holdings are vehicles of growth in the sector Addition of value to financial partners is a permanent commitment Special-purpose company Parati formed for acquisition of interests in Light previously held by Equa
Slide 7: Structure of Cemig's final holding in Light
...Structure of Cemig’s final holding in Light: Shareholders Agreement Light Control Block CEMIG FIP Redentor 25% 75% SPE Parati CEMIG: 50% ON FIP Redentor: 50% ON + 100% PN 54,08% 100% LUCE Fund Braslight 75% 25% Final participation % of CEMIG on Light’s capital Total Direct: 26,06% 32,58% Indirect
Slide 8: Sales and trading: leadership in Brazil's Free Market
Sales and trading: leadership in Brazil’s Free Market Trading in electricity continues to be a strategic function Prices continue to be under pressure Greater competition in the free market Excellence in relationship preserves market share Cemig has 25% of the Brazilian Free Market Progress in sales
Slide 9: Distribution: focus on operational efficiency
Distribution: focus on operational efficiency Investment Program targeting improvement of performance indicators in 2011 Cemig D: R$ 1.3 billion Light SESA: R$ 784 million “Universalization” program — to take electricity to all citizens — continues New programs to serve MegaEvents — Soccer World Cup
Slide 10: Financial management
Financial management Portfolio of businesses, and financial discipline, position Cemig on a path of sustainable growth and addition of value for shareholders Solidity of results Balance between 3 principal businesses (G, T, D) increases predictability, reduces risks Strong operational cash flow for
Slide 11: Debt profile
Debt profile Timetable of maturities Average tenor: 3.5 years 2,116 3,544 2,597 1,944 1,255 484 425 952 2011 2012 2013 2014 2015 2016 2017 2018 to 2034 Average real cost of debt (%) 7.3 5.8 5.4 5.3 5.7 6.5 6.8 6.8 7.1 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 *At constant Decemb
Slide 12: Sustainability: a permanent Cemig corporate value
Sustainability: a permanent Cemig corporate value Environmental programs The Premiar — Urban Trees Program: Development of a system that brings together information about the electricity network associated with location and data on tree species. Total of 12,845 trees geo-referenced so far. Online tr
Slide 13: Consolidated sales volume
Consolidated sales volume Consolidated sales volume, 1Q 2011 GWh 15,518 482 669 337 34 173 609 159 17,981 16% 1Q10 Residencial Industrial Commercial Rural Wholesale CCEE (Spot) Other 1Q11 Record sales volume in the quarter reflects expansion of consumption in all user categories Electricity volumes
Slide 14: Cemig GT - Sales Volume
Cemig GT - Sales Volume Variation by type in 1Q11 - GWh 8,963 523 110 -147 255 9,704 8% 1Q2010 Free Consumers Wholesale Free Market Regulated market CCEE (Spot) 1Q2011 Volume by market — GWh 1,114 3,678 4,171 1Q2010 1,369 3,640 4,695 1Q2011 Free Consumers Regulated and Free Markets CCEE Cemig GT’s s
Slide 15: Cemig D — sales by consumer category
Cemig D — sales by consumer category sales by consumer category 5% 5,904 6,222 1Q2010 1Q2011 Sales by consumer category —GWh CATEGORY 1T2011 1T2010 VARIAÇÂO Residential 2,183 2,035 7% Industrial 1,227 1,112 10% Commercial 1,325 1,237 7% Rural 533 501 6% Other 766 727 5% Subtotal 6,034 5,613 8% CCEE
Slide 16: Consolidated net revenue
Consolidated net revenue Consolidated net revenue from 1Q10 to 1Q11 R$ mn 2,878 448 189 55 11 37 24 -255 3,387 18% 1Q2010 Final consumers TUSO Wholesale and CCEE Use of network Gas Others Deductions 1Q2011 Balanced portfolio of businesses yields net revenue up 18% YoY in quarter Acquisition of Taesa
Slide 17: Consolidated operational expenses
Consolidated operational expenses Expenses in 1Q11 - R$ mn 21% 1,927 2,327 1Q2010 1Q2011 Consolidated expenses: changes, 1Q11 - R$ mn Personnel Profit shares Materials Post-employment Provisions Royalties Bought energy Outsourced services Gas Depreciation Charges Construction costs Other -13 -13 -10
Slide 18: Balanced portfolio sustains Ebitda
Balanced portfolio sustains Ebitda Net Income by activity, 1Q11 39 % 16 % 2 % 43 % Ebitda of principal companies Geraçâo Generation Distribuiçâo Distribution Transmissão Transmission Outras Others LAJIDA 1Q2011 % CEMIG GT 571 44% CEMIG D 388 30% LIGHT 114 9% GASMIG 32 2% TBE 61 5% TAESA 75 6% OTHERS
Slide 19: Cash Flow
Cash Flow Cash flow statements, 1Q11 end 1Q10 1Q2011 1Q2010 Cash at start of period 2.979 4.425 Cash from operations 474 1.156 Net Income 526 520 Depreciation and amortization 233 214 Suppliers -16 72 Provisions for operational losses 34 -4 Other adjustments -303 354 Financing activity -24 81 Financ
Slide 20: Investment program
Investment program REALIZED PLANNED PLANNED ACTIVITY IN 1Q11 2011 2012 P1 projects 124 1,537 1,127 Generation 4 165 84 Transmission 2 72 87 Cemig D 117 1,299 954 Cemig holding company - 1 2 Light for Everyone Program 88 374 - CDE funds - -142 -58 Minas Gerais state - -189 -16 Acquisitions 5 408 7 Li
Slide 21: Cemig: already a global investment option
Cemig: already a global investment option* TOTAL ASSETS 34.3 STOCKHOLDERS’ EQUITY 12.0 CONSOLIDATED NET REVENUE (LTM) 13.4 MARKET VALUATION (R$ BILLION) 21.9 OPERATING IN ALMOST THE WHOLE OF BRAZIL FIRST INVESTMENTS OUTSIDE BRAZIL IN OPERATION * Market value: expressed as 100% of the Company’s share
Slide 22: Investor Relations
Investor Relations ri@cemig.com.br Phone Number: (55-31) 3506-5024 Fax: (55-31) 3506-5025
Slide 23: Glossary
Glossary ACR: Regulated Contracting Environment in which purchases and sales involving Distributors occur by means of public auctions. ACL: Free Contracting Environment, in which purchases and sales of electricity among Free Clients, Marketers and Generators occur, through freely negotiated bilatera
Slide 24: Glossary
Glossary Payout — Percent of net income to be distributed as dividends. P/L (Price to Earnings Ratio) — Relationship between share price and profit per share. PL — Shareholders’ Equity PLD— Price for Liquidation of Differences, called “Spot” price. RTD- Deferred Tariff Adjustment: ANEEL defined the
Slide 25: R$1.3 billion Ebitda; R$526 million net income
\RS1.3 billion Ebitda |RS526 mulllon Net income $3.4 billion| Net revenue S27 cach | 17,380 Total sales volume GWh
Slide 26: Industrial production of Minas Gerais
Sources: Brazilian Geography and Statistics Institute (IBGE); Brazilian Finance Ministry. Note that the rate of expansion of industrial production of the state of Minas Gerais overtook that of Brazil at the end of 2009, and has remained ahead of it during 2010 and 2011. Industrial production indicat
Slide 27: Auto industry and mining lead the economy of Minas Gerais
Sources: Brazilian Geography and Statistics Institute (IBGE); Brazilian Finance Ministry. The auto industry and mining are leading elements of the economy of Minas Gerais, the state in which Cemig generates most of its revenue. Early in the year, the imbalance between high domestic absorption and in
Slide 28: Electricity consumption, stock prices and economic summary
Sources: Eletrobras In the whole of Brazil, these categories consumed the following average volumes of electricity per month in the first quarter of 2011: · Industrial 14,817 GWh · Residential 9,587 GWh · Commercial 6,321 GWh · Others 5,046 GWh Table of Contents Stock prices: performance Name Ticker
Slide 29: The electricity market of Cemig GT
The electricity market of Cemig GT Revenue from supply of electricity This table shows supply of electricity by type of consumer: 1Q 2011 1Q 2010 Change, % Industrial 4,674 4,165 Commercial Wholesale supply to other concession holders (*) 3,628 3,667 -1 Transactions in electricity on the CCEE 1,370
Energy Co of Minas Gerais — Q1 2011 Earnings Presentation on 6ix