Companhia Energetica De Minas Gerais Sa · BMFBOVESPA:CMIG3
Companhia Energetica De Minas Gerais Sa — Energy Co of Minas Gerais — Q3 2009 Earnings Presentation
43 slides from Companhia Energetica De Minas Gerais Sa's earnings presentation, Nov 18, 2009
Slide 1: Nine-month 2009 EBITDA and revenue from electricity supply
The lower Ebitda in 9M09 than in 9M08 mainly reflects operational costs and expenses (excluding effects of depreciation and amortization) 3.58% higher. Ebitda margin was lower year-on-year, at 34.65% in 9M09, compared to 66.84% in 34.65% in 9M08. Revenue from supply of electricity Revenue from elect
Slide 2: 3Q09 EBITDA and revenue from supply of electricity
In spite of operational costs and expenses (excluding depreciation and amortization) being 15.34% higher, Ebitda was only 1.64% lower in 3Q09 than in 3Q08 — reflecting Net operational revenue 13.31% higher year-on-year. The resulting Ebitda margin was lower, year-on-year, in 3Q09, at 35.83%, compare
Slide 3: EBITDA
Table of Contents — EBITDA Cemig’s Ebitda in 3Q09 was 1.64% lower than in 3Q08. Adjusted for non-recurring items, the percentage reduction was 1.94%. In spite of operational costs and expenses (excluding depreciation and amortization) being 15.34% higher, Ebitda was only 1.64% lower in 3Q09 than in
Slide 4: Ebitda breakdown by business, 3Q09
The chart below shows the breakdown of Ebitda by contribution from the different types of operation, in 3Q09. As can be seen, the Cemig Group has a balance in the contribution of each business to the company’s cash flow, providing better predictability and stability in its results. Table of Contents
Slide 5: Revenue from supply and wholesale sales of electricity
— Revenue from supply of electricity Revenue from supply of electricity in 3Q09 was R$ 3,718,029, 8.87% higher than in 3Q08 (R$ 3,415,253). The main factors affecting revenue in 3Q09 were: · The tariff increase, with average effect on consumer tariffs of 4.69%, starting from April 8, 2009 (for the c
Slide 6: Nine-month results and retail electricity supply
The lower Ebitda in 9M09 than in 9M08 mainly reflects operational costs and expenses (excluding effects of depreciation and amortization) 16.61% higher. The weaker performance in 2009 was reflected in Ebitda margin, which was 27.56% in 3Q08, and 13.92% in 3Q09. Revenue from retail supply of electric
Slide 7: 3Q09 results and retail supply of electricity
The lower Ebitda in 3Q09 than in 3Q08 mainly reflects operational costs and expenses (excluding effects of depreciation and amortization) 26.84% higher, the effect being partially offset by net operational revenues to 16.12% higher. The lower operational performance in 3Q09 than in 3Q08 is reflected
Slide 8: Nine-month 2009 EBITDA and revenue from supply
The higher Ebitda in 9M09 than 9M08 mainly reflects net revenue 19.83% higher, partially offset by operational expenses (excluding effects of depreciation and amortization) 15.51% higher. Ebitda margin was also higher year-on-year, at 68.04% in 9M09, compared to 66.84% in 9M08. Revenue from supply o
Slide 9: 3Q09 EBITDA and revenue from supply of electricity
The higher Ebitda in 3Q09 than in 3Q08 mainly reflects net revenue 4.92% higher, partially offset by operational expenses (excluding effects of depreciation and amortization) 9.66% higher. Ebitda margin was lower – at 67.31% in 3Q09, than in 3Q08 (68.72%). Table of Contents Revenue from supply of el
Slide 10: Growth strategy based on the business portfolio: Analysis of Results Third Quarter 2009
Growth strategy based on the business portfolio Analysis of Results Third Quarter 2009 1/34
Slide 11: Disclaimer
Disclaimer Some statements in this presentation constitute “forward-looking statements” as defined by the American Securities Law, and are subject to risks and uncertainties. “Forward-looking statements” are projections that may differ from final numbers and are not controlled by us. For a discussio
Slide 12: Execution of strategy raises Cemig to a new level
Execution of strategy raises Cemig to a new level The Strategic Plan determines sustainable growth, seeking to add shareholder value over the long term. Absolute leadership in sector consolidation Significant growth in the transmission segment Creation of pioneering structure for expansion in the el
Slide 13: Consolidated results in the third quarter of 2009
Consolidated results in the third quarter of 2009 Net Income +8.64% 2.754 2.993 EBITDA -1.60% 1.090 1.072 Net Income +9.88% 516 567 3Q08 |3Q09 3Q08 3Q09 3Q08 3Q09 The Strategic Plan guides growth in all areas of activity Business portfolio ensures growth in consolidated results Results arising from
Slide 14: Third Quarter 2009 Highlights
Third Quarter 2009 Highlights 5/34
Slide 15: Acquisition of Terna Part. concluded
Acquisition of Terna Part. concluded Payment of R$ 2.15 billion on November 3, 2009 The operation involved the purchase of 85.26% of the voting capital, and 65.85% of the total capital Price paid is equal to R$ 37.14 per “unit” (2 preferred shares + one common share) Represents a multiple of nearly
Slide 16: Fip Coliseu: efficient vehicle for growth in transmission
Fip Coliseu: efficient vehicle for growth in the transmission sector INSTITUTIONAL INVESTORS Shareholders Agreement FIP COLISEU TAESA S.A. 51,00% KT MINORITY KT Total Capital ON - ---,-- PN - Common Shares PN Preferred Shares 85,27% ON 65,86% KT 14,73% ON - 100.00% PN 34,14% KT Terna Participacocs T
Slide 17: Increased participation in TBE
Increased participation in TBE Approved by the Board of Directors on October 29 Seller: MDU Resources Luxembourg II LLC, S.a.r.l Approximate amount: R$ 100 million referring to September 30, 2009. Final amount depends on whether or not the partners exercise their right of first refusal Shares in the
Slide 18: Cemig advances in the transmission sector
Cemig advances in the transmission sector Segment with greatest cash flow predictability and stability Long-duration contracts readjusted for inflation After the expanded participation in TBE and acquisition of Terna, contribution of the transmission business to the Company’s consolidated EBITDA wou
Slide 19: Credit quality: Cemig ensures funds for expansion
Credit quality: Cemig ensures founds for expansion R$ 2.7 billion raised in Cemig GT promissory notes, with strong demand from the market Funds will be used to acquire TERNA and for other investments Financial indicators regarding indebtedness remain within the limits of the Company’s By-Laws projec
Slide 20: New generation projects: continuous growth
New generation projects: continuous growth Start Up of Baguari Hydroelectric Plant Installed Capacity: 140 MW Cemig’s Participation: 34% 120 days earlier than the initial schedule Start Up of Parajuru Wind Plant 28.8 MW of installed capacity Cemig’s Participation: 49% Presence in the wind sector is
Slide 21: Investment Program
Investment Program Basic Investment Program(l) Acquisitions in 2009: Expanded participation in TBE to 38.13%: acquisition of Brookfield portion for R$ 505 million, and participation in MDU for almost R$ 100 million (*) Acquisition of 49% in three wind plants - R$ 213 million: payment in August Acqui
Slide 22: Market Recognition
Market Recognition Sustainability Selected as Utilities Supersector Leader by the Dow Jones Sustainability Index 10th consecutive year in the Index, since its creation Classified as a leader in sustainability by OEKOM OEKOM is one of the main sustainability rating agencies in the world Institutions
Slide 23: Analysis of 3rd Quarter 2009 Results
Analysis of 3rd Quarter 2009 Results ENERGY SALES REVENUES AND EXPENSES EBITDA NET INCOME OTHER ANALYSIS 14/34
Slide 24: Consolidated sales volume - 3Q09
Consolidated sales volume - 3Q09 Electricity sold - GWh: Changes by consumer category in 3Q09/3Q08 15,552 156 1,537 50 41 25 607 429 15,242 -1.99% 3Q08 Residential Industrial Commercial Rural Others Supply PLD 3Q09 In Brazil, the industrial sector was the area most affected by the crisis For the Cem
Slide 25: Cemig GT sales volume
Cemig GT sales volume - GWh Electricity sold - GWh: variations by consumer category in 3Q09 8.633 1.237 46 1.211 172 8.733 +1,16% 3Q08 FreeClient Commercial Regulated CCEE(PLD) 3Q09 Commercial strategy ensures a sales record for Cemig GT Reduced demand from free clients was mitigated by sales in adj
Slide 26: Cemig D sales by category in 3Q09
Cemig D sales by category in 3Q09 Electricity sold - GWh: changes 3Q09 Adjusted energy sold - GWh: changes in 3Q09 5,765 5,666 5,664 5,666 3Q08 3Q09 3Q08 3Q09 -1.70% RESIDENTIAL INDUSTRIAL COMMERCIAL RURAL OTHERS Market at the same level of 3Q08, due to the performance of the residential and commerc
Slide 27: Analysis of 3rd Quarter 2009 Results
Analysis of 3rd Quarter 2009 Results ENERGY SALES REVENUES AND EXPENSES EBITDA NET INCOME OTHER ANALYSIS 18/34
Slide 28: Consolidated net revenue
Consolidated net revenue Evolution of Consolidated Net Revenue - 3Q09/3Q08 R$ million 2.754 186 163 28 42 66 123 39 2.993 3Q08 End Users TUSD CCEE Network Use (*) Others Deductions 3Q09 Robust growth of 8.7 in net income (3Q09/3Q08) Sales to final consumers continue to grow intensely Perspectives fo
Slide 29: Consolidated operating expenses – 3Q09
Consolidated operating expenses – 3Q09 Evolution of consolidated expenses - 3Q09/3Q08 Quartely Expenses- R$ Million 1,835 2,093 14.1% 3Q08 3Q09 285 33 3 24 -3 -25 5 8 -13 -13 -23 -23 PURCHASED ENERGY PERSONNEL DEPRECIATION BASIC TRANSMISSION CONTRACTED SERVICE POST-RETIREMENT MATERIALS ROYALTIES GAS
Slide 30: Analysis of 3rd Quarter 2009 Results
Analysis of 3rd Quarter 2009 Results ENERGY SALES REVENUES AND EXPENSES EBITDA NET INCOME OTHER ANALYSIS 21/34
Slide 31: EBITDA by Company
EBITDA by Company Evolution in EBITDA by company in 3Q09/3Q08 1.090 66 8 16 2 23 35 1.072 -1,60% 3Q08 Cemig D Cemig GT RME Gasmig TBE Others 3Q09 Business portfolio ensures stability Results of Cemig GT due to commercial strategy Results of Cemig D: Non-controllable expenses 6% 1% 4% 6% 30% 53% EBIT
Slide 32: EBITDA and EBITDA Margin - Consolidated
EBITDA and EBITDA Margin - Consolidated Quarterly Evolution of Consolidated EBITDA EBITDA margin % 40 34 33 35 36 37 1,090 948 780 1,035 1,072 1,067 3Q08 4Q08 1Q09 2Q09 3Q09 Market Expectation EBITDA margin grows for the second consecutive quarter, reaching 36% EBITDA remains stable in relation to t
Slide 33: Analysis of 3rd Quarter 2009 Results
Analysis of 3rd Quarter 2009 Results ENERGY SALES REVENUES AND EXPENSES EBITDA NET INCOME OTHER ANALYSIS 24/34
Slide 34: Net income by company
Net income by company Evolution of net income by company in 3Q09/3Q08 516 12 26 18 2 19 14 567 +9.88% 3Q08 Cemig D Cemig GT RME Gasmig TBE Others 3Q09 2% 4% 2% 2% 56% 34% Net Income by Company - 3Q09 Net Income has grown approximately 10% Results of Cemig GT reflects company’s commercial strategy Tr
Slide 35: Consolidated net income
Consolidated net income Quarterly evolution of consolidated net income (net margin %) net margin% 19 10 14 18 19 18 516 281 336 524 567 523 3Q08 4Q08 1Q09 2Q09 3Q09 Market Expectation We attained our best Net Income in the last 4 quarters Results driven by growth in all operations Commercial strateg
Slide 36: Analysis of 3rd Quarter 2009 Results
Analysis of 3rd Quarter 2009 Results ENERGY SALES REVENUES AND EXPENSES EBITDA NET INCOME OTHER ANALYSIS 27/34
Slide 37: Strong Cash Flow Position Sustains Investments
Strong Cash Flow Position Sustains Investments CASH FLOW STATEMENT VALUES IN MILLION OF REAIS 3Q09 3Q08 Cash at start of period 2,251 2,002 Cash from operations 1,363, 1,331 Net income 567 516 Depreciation and amortization 173 170 Suppliers 36 85 Deferred Tariff Adjustment - 99 Regulatory Asset - Tr
Slide 38: Debt profile lengthened with cost reductions
Debt profile lengthened with cost reductions Maturity Schedule (Average period: 4 years) 1,063 887 1,016 1,249 1,339 1,104 491 244 676 2009 2010 2011 2012 2013 2014 2015 2016 2017 a 2031 1% 8% 4% 11% 5% 1% 1% 4% 65% Yen Dolar CDI Others Ipca Igpm Urtj RGR/Finel Tr Main Indexes Captured basic interes
Slide 39: Balanced operations portfolio sustains growing EBITDA
Balanced operations portfolio sustains growing EBITDA EBITDA by Business - 3Q09 GENERATION TRANSMISSION DISTRIBUTION GAS EBITDA by Company EBITDA 3Q09 9M09 Cemig GT 564 1,779 Cemig D 321 623 RME 66 140 TBE 41 81 Gasmig 14 36 Infovias 16 48 Others 50 181 TOTAL 1,072 2,888 30/34
Slide 40: We are expanding our national leadership
WE ARE EXPANDING OUR NATIONAL LEADERSHIP Largest distribution company - Market share: 12% 3rd-largest transmission group - Market share: 10%* 3rd-largest generation group - Market share: 7% Long-term goal is to attain 20% market share in the power sector Transmission Transmission under construction
Slide 41: Investor Relations
Investor Relations ri@cemig.com.br Telephone: (55-31) 3506-5024 Fax: (55-31) 3506-5025 CEMIG A Melhor Energia do Brasil. 32/34
Slide 42: 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 43: 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 r
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