Companhia Energetica De Minas Gerais Sa · BMFBOVESPA:CMIG3
Companhia Energetica De Minas Gerais Sa — Energy Co of Minas Gerais — XVI Encontro Anual Cemig Apimec 2011
48 slides from Companhia Energetica De Minas Gerais Sa's conference presentation, Jun 15, 2011
Slide 1: Financial guidance
1/26 Financial guidance Arthur Saraiva Sette Câmara June 3, 2011
Slide 2: Disclaimer
2/262 Disclaimer Guidance 2011–2015 Some of the statements in this presentation are “forward-looking statements” by the concept of the US Securities Law, and are subject to risks and uncertainties. “Forward-looking statements” are forecasts which may differ from the final numbers and are not under o
Slide 3: Assumptions
IG A Melhor Energia do Brasil. Assumptions
Slide 4: Financial indicators
4/264 Financial indicators Guidance 2011–2015 Central Bank 3.8% 6.7% 12.3% Planned scenario 2011 6.0% 1.7 Central Bank 4.0% 6.9% 12.2% 6.3% 1.6 4.1% 6.9% 12.2% 6.3% 1.6 Febraban Planned, average 4.7% 4.7% 10.7% 4.6% 2.0(*) 4.4% 4.6% 10.9% 4.6% 1.8(*) Sources: GDP IGP-M inflation Selic. average IPCA
Slide 5: Distribution market
5/265 Distribution market CEMIG D Assumptions about the market: Recovery continues after 2011 Investments that were postponed as a result of the 2009 world crisis are made Total energy distributed (Captive + Free ) – TWh Retail market (Captive market) – TWh 51.8 49.9 47.9 44.8 53.8 26.7 25.8 27.6 28
Slide 6: Generation market
6/26 4.2 MARKET – TWh Own resources Secondary supply 40.1 Generation market CEMIG GT In 2011 Cemig GT participated in the Secondary Energy market (additional generation above the assured physical levels, due to favorable hydrology and sold on the Short-term (Spot) Market) Energy purchases (Petrobrás
Slide 7: Average generation prices
7/267 Average generation prices CEMIG GT Effect of renewal of existing contracts (R$/MWh) In 2011 there has been a significant reduction in the projected short-term (spot) price at the secondary energy market If isolated, this effect on the average price of energy would be 110.5 R$/MWh Starting in 2
Slide 8: Transmission revenue
8/268 Transmission revenue CEMIG GT Expected changes in RAP Constant R$ mn as of June 2011
Slide 9: Cost assumptions
9/269 Cost assumptions Distribution Driver: the “Reference Company” for Cemig D (Distribution company) Transmission business (Company: Cemig GT) Driver: regulatory reference company Generation business (Company: Cemig GT) Driver: best market practices PMSO – Personnel, Material, Third party services
Slide 10: Results
CZMIG A Melhor Energia do Brasil. Results
Slide 11: Consolidated EBITDA Guidance 2011–2015
11/26 11 Consolidated Consolidated includes the amounts of the holding company and affiliated companies Year Lower limit Upper limit 2011 5,012 5,616 2012 5,074 5,838 2013 4,707 5,416 2014 5,123 5,895 2015 5,302 6,097 Ebitda Guidance 2011–2015 Constant R$ mn. as of June 2011
Slide 12: EBITDA Guidance 2011–2015 by business
12/26 12 Ebitda Guidance 2011–2015 Cemig D Cemig GT – Consolidated Holdings Year Lower limit Upper limit 2011 1,451 1,773 2012 1,466 1,792 Year Lower limit Upper limit 2011 2,603 3,182 2012 2,716 3,319 Ano Limite Inferior Limite Superior 2011 944 1,153 2012 1,064 1,300 Constant R$ mn. as of June 201
Slide 13: Financial guidance Investor Relations
13/26 Financial guidance Investor Relations Telephone: (+55 31) 3506-5024 Fax: (+55-31) 3506-5025 ri@cemig.com.br http://ri.cemig.com.br
Slide 14: Appendix
A Melhor Energia do Brasil. Appendix
Slide 15: Appendix Holdings
15/26 15 Appendix Holdings Baguari Cachoeirão Eólicas Mesa Pipoca Paracambi Holdings linked to the Company GT: Generating companies Aliança EBTE Transmission companies
Slide 16: Appendix Holdings
16/26 16 Appendix Holdings Centroeste EATE ECTE ENTE ETEP ERTE Transchile Transirapé Transleste Transudeste Axxiom Cemig Telecom Cemig Serviços Efficientia Gasmig Light Trading Holdings linked to the Holding Company: Barreiro Capim Branco Cemig PCH Horizontes Ipatinga Pai Joaquim Rosal Sá Carvalho G
Slide 17: TAESA acquisition in line with strategy
The transaction is fully in line with TAESA’s strategy of maximizing its results through increase in its electricity transmission market share, with returns that add value and are compatible with the characteristics of its business. With the acquisition: · TAESA increases the length of its transmiss
Slide 18: Apimec 2011 presentations list
With respect to the XVI Encontro Anual Cemig Apimec 2011, besides the presentation of the Director of Finance and Investor Relations, annexed hereto, are also on our website, http://ri.cemig.com.br, the following Presentations: Chair of the Board of Directors DPR DVP DDN DGE DGA DDC DCM DGT DRC DJR
Slide 19: Finance and Investor Relations
Luiz Fernando Rolla Chief Finance and Investor Relations Officer (DFN) June 3, 2011 Finance and Investor Relations
Slide 20: Largest integrated electricity company in Brazil
Largest integrated electricity company in Brazil, operating in almost the whole country 485,476 km of distribution networks 8,861 km of transmission lines 6,896 MW Total installed capacity Long-term target is to have 20% market share in the three segments of Financial highlights (R$ billion) Total a
Slide 21: Global investment option with shareholders worldwide
...with Shareholders in more than 44 countries 3 ASIA Australia OCEANIA North America South America Central America Middle East Average daily volume in 2010 Bovespa: R$ 42 million NYSE: US$32 million Canada United States Mexico Bermuda Bahamas Cayman Islands Turks and Caicos Is. Virgin Islands Argen
Slide 22: Long-term commitment to shareholders
Long-term commitment to shareholders Cemig’s shares performance from December 1999 to May 2011 In the past few years, Cemig’s shares had lower risk and higher returns than the Bovespa index 4
Slide 23: Portfolio of businesses ensures results
Portfolio of businesses ensures results 26% 8% 63% 2% 1% Net revenue 50% 13% 26% 3% 8% Net income 48% 15% 34% 1% 2% Ebitda We continue to deliver consistent results to shareholders 2010, R$ mn Generation Transmisssion Distribution Natural gas Other Net revenue 3,412 1,128 8,398 315 125 Net income 1,
Slide 24: Cemig Group of companies and consortia
Cemig Group of companies and consotria 7 Transmission companies Distribution companies Generation companies Wind power companies Generation consortia Non-profit Distribution of gas Telecoms Trading Holding company Services Key Empresa Brasileira de Transmissão de Energia S.A. 49% VS = Voting stock T
Slide 25: Cemig's credit quality
Investment Grade Speculative Grade Aaa Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3 Ba1 Ba2 Ba3 B1 B2 B3 Caa1 Caa2 Caa3 Ca C AA(bra) Cemig H, Cemig GT and Cemig D Brazilian scale Aa1.br Cemig GT and Cemig D Aa2.br Cemig H Baa3 Cemig GT and Cemig D Global scale Ba1 Cemig H Global scale brAA- Cemig GT and Cemi
Slide 26: Main benchmarks 1Q11
Main benchmarks 1Q11 Financial discipline to lower cost of debt and FX exposure Largest creditors (R$ mn) 1Q11 0% 3% 1% 59% 15% 3% 13% 5% 1% Debenture holders 5,594 42% Banco do Brasil 3,141 24% BNDES 1,388 10% Banco Itaú BBA(*) 896 7% Bradesco(*) 976 7% Unibanco 321 2% Eletrobrás 391 3% Others 610
Slide 27: Finance and Investor Relations
Finance and Investor Relations Investor Relations Telephone: (+5531) 35065024 Fax: (+5531) 35065025 ri@cemig.com.br http://ri.cemig.com.br 10 Table of Contents 10. Market Announcement — Presentation of TAESA Acquisition of Transmission Assets
Slide 28: Relevant Acquisition of Abengoa's Transmission Assets
Relevant Acquisition Acquisition of Abengoas’ Transmissions Assets Rio de Janeiro, June 3 , 2011
Slide 29: Acquisition Adds Value and Confirms Strategic Position
Acquisition Adds Value and Confirms Strategic Position Description of the Concessions TAESA’s Concessions Acquired Concessions NTE ATE II ATE III ATE I STE Acquired Concessions Concessions Stake Begin Reduction End Km* NTE 100% jan-02 jan-19 jan-32 383 STE 50% dec-02 jul-19 dec-32 389 ATE I 50% dec-
Slide 30: Next Steps and TAESA's Structure
Acquisition Adds Value and Confirms Strategic Position Next Steps Closing BNDES’s Approval BID/COFIDES’s Approval Board of Directors Approval Aneel’s Approval Taesa’s Structure After the Acquisition Total Value: R$ 1.099 MM NTE: R$ 336 MM ABENGOA TAESA 50% Sub-Holding: R$ 763 MM EV/EBITDA: 7,4 X (20
Slide 31: 33% increase in RAP and 29% in EBITDA
33% increase in RAP and 29% increase in EBITDA (non-IFRS) Impact on TAESA considering the stake, based on 2010 figures not adjusted for the IFRS +29% Market Share RAP +33% 941 729 212 8,61% 1.110 833 277 TOTAL EBITDA MADRID EBITDA TAESA 6,48% TOTAL RAP TAESA RAP MADRID Shareholders' agreement O&M: B
Slide 32: Indebtedness of TAESA
Indebtedness of TAESA Indebtedness based on 2010 figures NFP/ EBITDA Concessions Loan 12/31/2010 Cost Maturity Payment BNDES - TJLP 104.788 TJLP + a.a 5% 07/15/2016 monthly 1.549 +45% 1,5 2,3 1,6 BNDES - BoC 14.359 UMBNDES + 5% a.a 07/15/2016 monthly Sub-Total 119.147 BNDES - TJLP 67.814 TJLP + 5% a
Slide 33: New Business Department
New Business Department Fernando Henrique Schüffner Neto Chief Business Development officer (DDN) June 3, 2011
Slide 34: Light and Taesa
Light and Taesa The efficient management of Light and Taesa guarantees robust financial muscle, positioning these two companies as vehicles for the growth of Cemig in the medium and long term. Greater speed, and efficiency, in the management of the asset 2
Slide 35: Principal effect of the transaction for Cemig
Principal effect of the transaction for Cemig Notes 1. Pro-forma numbers. Figures in IFRS. 2. Impact on Taesa of the following assets acquired from Abengoa: 50% ATE, 50% ATE II, 50% ATE III, 50% STE, 100% NTE. 3. Sum based on Cemig’s percentage holding in Taesa. Impact on financial statements of Cem
Slide 36: Transmission contribution to total Ebitda at 16%
Contribution of the transmission business to total Ebitda has now reached 16% Ebtida by business segment Generation 47% Distribution 33% Transmission 16% Others 4% Cemig + Asset acquired2 Notes 1. Pro-forma numbers. Figures in IFRS. Generation 48% Distribution 34% Transmission 14% Others 4% 4 Others
Slide 37: Consolidation of the transmission sector
Joining of part of the assets of Abengoa and Taesa strengthens consolidation of the sector Transmission market share (share of Total RAP, 2010–11) Before the acquisition After the acquisition Notes 1. Abengoa: 50% ATE, 50% ATE II, 50% ATE III, 50% STE, 100% NTE. 2. holdings in Cemig and Taesa and TB
Slide 38: Investor Relations
Investor Relations Telephone: (+55-31) 3506-5024 Fax: (+55-31) 3506-5025 ri@cemig.com.br http://ri.cemig.com.br 6 New Business Department Table of Contents 11. Market Announcement — Presentation of Supply/Demand Balance CEMIG GT and the Grid — 16 th Annual CEMIG-APIMEC Meeting, June 3, 2011
Slide 39: CEMIG GT and the grid: Supply/demand balance
CEMIG GT and the grid: Supply/demand balance Marcus Vinícius de Castro Lobato Energy Risk Analysis and Control Manager (PC/AR) June 3, 2011
Slide 40: Supply structure and market balance
Source: PMO, May 2010; Cemig research (as shown last year at Apimec 2010), and an estimated GDP of 5% for the 2011-2014 period Supply structure (average MW) 2 Thermal Hydro Market Balance Balance, % Brazilian National Grid (“SIN”)
Slide 41: Supply structure, Brazilian National Grid
Sources: PMO, May 2011; Cemig research and an estimated GDP of 5% for the 2011-2014 period Supply structure (average MW) Brazilian National Grid 3 Thermal Hydro Market Balance Balance, %
Slide 42: Supply structure with reserve
Sources: PMO, May 2011; Cemig research and an estimated GDP of 5% for the 2011-2014 period Supply structure (average MW) Brazilian National Grid 4 Reserve Thermal Hydro Market Balance Balance, %
Slide 43: Structural energy balance
Sources: PMO, May 2011; PDE, 2019; Cemig research and an estimated GDP of 5% for the 2011-2014 period Structural energy balance (average MW) Brazilian National Grid 5 Reserve Thermal Hydro Market Balance, % Balance
Slide 44: CEMIG GT – Supply-demand balance
CEMIG GT – Supply-demand balance Conventional energy Detail of requirements Resources available for commercialization Intermediation (transferred to Cemig Trading) Free Market Sales – new contracts Free Market Sales (Free Consumers and Traders) Sales to be decided (2nd renewal concessions) Forecast
Slide 45: CEMIG GT – Supply-demand balance
Conventional energy Detail of requirements Probable renewals Negotiations in progress Estimate of secondary energy overages accounted in short-term market CEMIG GT – Supply-demand balance 7 Resources available for commercialization Intermediation (transferred to Cemig Trading) Free Market Sales – ne
Slide 46: CEMIG GT – Supply-demand balance
CEMIG GT – Supply-demand balance Conventional energy 8 Average MW Average MW Resources available for commercialization Intermediation (transferred to Cemig Trading) Free Market Sales – new contracts Free Market Sales (Free Consumers and Traders) Sales to be decided (2nd renewal concessions) Forecast
Slide 47: CEMIG GT – Incentive-bearing electricity supply
CEMIG GT – Supply-demand balance Incentive-bearing electricity supply Purchases – Traders Sales being negotiated Purchases – Wind Farms Probable renewals Purchases – Small Thermal Realized sales Purchases – Small Hydro 9
Slide 48: Investor Relations
Investor Relations Telephone: (+55-31) 3506-5024 Fax: (+55-31) 3506-5025 ri@cemig.com.br http://ri.cemig.com.br Cemig GT and the grid – Supply-demand balance 10 Table of Contents 12. Notice to Stockholders — June 29, 2011, Dividend Payment, June 7, 2011 Table of Contents
Energy Co of Minas Gerais — XVI Encontro Anual Cemig Apimec 2011 on 6ix