Light S.a. · BMFBOVESPA:LIGT3
Light — Investor Presentation (January 2013)
42 slides from Light's investor presentation, January 2013
Slide 1: Corporate Presentation
Corporate Presentation January 2013
Slide 2: Light Holdings
Light Holdings Light S.A. (Holding) 100% 100% 51% 100% 25.5% 100% 100% 100% 100% 51% 20% Light Light Esco Light Axxiom CR Zongshen Light Itaocara Amazônia Lightcom Serviços de Lightger Prestação de Soluções em Instituto Soluções E-Power Energia Energia Energia Comercializadora Eletricidade S.A. Serv
Slide 3: Rankings
Rankings Among the largest players in Brazil Integrated Distribution Net Revenues 2011 – R$ Billion Energy Consumption in Concession Area (2011) - GWh1 54.590 15.8 50.404 12.8 45.101 9.8 7.8 6.2 29.139 5.4 25.593 22.932 Cemig CPFL Neoenergia Copel Light Energias do Brasil CPFL Cemig Eletropaulo Neoe
Slide 4: Shareholders Structure
Shareholders Structure BTG 14.29% PACTUAL 2.74% Indirect stake in blue 28.57% 11 Board members: 8 from the controlling SANTANDER 5.50% group, 2 independents e 1 employees FIP CEMIG nominated REDENTOR 28.57% A qualifying quorum of 7 members to VOTORANTIM 75% 19.23% 6.41% 25% 5.50% approve relevant pr
Slide 5: Corporate Governance
Corporate Governance General Assembly Fiscal Council Board of Directors Governance and Finances Human Resources Auditors Management Sustainability Committee Committee Committee Committee Committee Chief Executive Officer Paulo Roberto R. Pinto Chief Financial Chief Distribution Chief Energy and Inve
Slide 6: Distribution Business
Distribution Business 6th largest energy distribution company in Brazil (2011) LIGHT • 4.0 million clients (serving 10 million people) • Energy sales (2011) – 22.932 GWh • 70% of the consumption of Rio de Janeiro state (Brazil’s 2nd GDP) 6
Slide 7: Energy Consumption
Energy Consumption Distribution ELECTRICITY CONSUMPTION¹ TOTAL MARKET (GWh) - Quarter +3.2% +3.5% 5.299 5.486 5.144 4.989 FREE OTHERS 15% INDUSTRIAL 7% 15% 22.4ºC 22.1ºC 21.7ºC 21.7ºC COMMERCIAL RESIDENTIAL 30% 33% 3Q09 3Q10 3Q11 3Q12 ¹ Note: To preserve comparability in the market approved by ANEEL
Slide 8: Total Market
Total Market ELECTRICITY CONSUMPTION (GWh) TOTAL MARKET – 3rd QUARTER +3.5% 5.299 5.486 840 740 -4.3% +13.3% 1.882 1.801 1.807 +1.7% 1.595 4.645 180 +4.6% 4.559 155 968 984 854 894 1.627 45 47 614 1.440 541 810 847 427 370 3Q11 3Q12 3Q11 3Q12 3Q11 3Q12 3Q11 3Q12 3Q11 3Q12 RESIDENTIAL INDUSTRIAL COMM
Slide 9: Prospects for State of Rio
Prospects for State of Rio Investments of R$ 211.5 billion in the State of Rio de Janeiro¹ Period 2012-2014 Tourism R$ 1.8 bn 0.9% Others R$ 1.9 bn 0.9% Oil Olimpic Facilities R$ 107.7 bn R$ 8.6 bn 50.9% 4.1% Transformation Industry R$ 40.5 bn 19.1% Infrastructure R$ 51.0 bn 24.1% ¹Source: Firjan (I
Slide 10: Economic activity leading to more demand
Economic activity leading to more demand The State of Rio de Janeiro will attract $ 250 billion as investments by 2016 ¹ -Coquepar (42MW) -RHI (5MW) -Reluz (ND) -Lavazza (3MW) -MRS (ND) -Nestlé (3MW) -Procter & Gamble (10MW) -Embelleze (5MW) -Alpargatas (ND) -Ajebras (5MW) -AMBEV (ND) -NeoBus (10MW)
Slide 11: Collection
Collection COLLECTION RATE BY SEGMENT QUARTER COLLECTION RATE 106.2% 12 MONTHS 102.2% 99.7% 99.8% 97.7% 97.8% 96.3% 93.0% 98.3% 97.2% TOTAL RETAIL LARGE CLIENTS PUBLIC SECTOR Sep/11 Sep/12 Total Varejo Grandes Poder Público 3Q11 3Q12 11
Slide 12: Loss prevention
Loss prevention LOSS (12 MONTHS) 43.1% 42.2% 41.2% 40.7% 40.4% Reflects exclusion of long 33.8% term delinquent customers from the billing system, according to Resolution 414 7.627 7.582 7.665 7.839 8.047 by Aneel. Non Technical Losses Distribution 5.457 5.615 5.229 5.247 5.316 (5.615 GWh) 2.328 2.3
Slide 13: New Technology Program
New Technology Program Light aims to reduce losses through investments in new technologies, integration of operational activities, increase of public awareness and institutional partnerships with interested agents. Grid shielding projects Technology used in regions in which conventional measures are
Slide 14: New Technology Program
New Technology Program Meters Installed (Thousands) 283 38 208 38 110 245 170 38 Monitoring, reading, cutting and 72 reconnection of customers telemetry– MCC (Measuring Center Centralized) 2010 2011 Sep /12 Prioritization in areas of high losses and INDIVIDUAL CENTRALIZED aggressiveness to the netwo
Slide 15: New Technology Results - Individual
New Technology Results - Individual Losses (before): 26% Losses (current): 7% 15
Slide 16: New Technology Results - Centralized
New Technology Results - Centralized Losses (before): 48% Losses (current): 14% 16
Slide 17: Zero Losses Area
Zero Losses Area Area: Nova Cidade Neighborhood - Nilópolis FEATURES LV MV TOTAL CLIENTS 10,083 3 10,086 NETWORK (KM.) 50 23 73 TRANSFORMER (QTY.) 107 POWER (MVA) 12,9 RESULTS 2010 2011 COLLECTION (R$ MN) 8.9 10.3 NON-TECHNICAL LOSSES 41.7% ¹ 7.4% ² ¹ Nov/10 ² DeC/11 17
Slide 18: Program Gains – An example
Program Gains – An example NEW METER REAL INSTALLATION CONSUMPTION 300 kWh ENERGY SAVED 100 kWh LOST ENERGY 200 kWh BILLED CONSUMPTION BILLED INCREASE CONSUMPTION 100 kWh 100 kWh OTHER EFFECTS (BY-PRODUCTS): BAD DEBT OPERATIONAL CAPEX GOES TO PROVISION COSTS THE RAB REDUCTION REDUCTION 18
Slide 19: Transformation of risky areas
Transformation of risky areas 19
Slide 20: Pacified Communities
Pacified Communities Santa Marta Before After Clients 73 1.605 Losses 90% 6% Delinquency 70% 2% Alemão Batan Macacos 64.7 thousand clients Andaraí Salgueiro inside pacified Formiga S. Marta communities with new Borel Mang. Cidade de Deus e Casabranca Tabaj. meters and network e Cabr. e Babil. Cantag
Slide 21: Generation Business
Generation Business
Slide 22: Installed Capacity
Installed Capacity Installed Capacity 868 MW 51% 100% SHP Paracambi Paraiba do Sul River 13 MW HPP Ilha dos Pombos 187 MW HPP Ilha dos Pombos 100% Lajes Complex RJ SP HPP Santa Branca HPP Santa Branca 56 MW 100% 100% 100% HPP Fontes Nova HPP Underground HPP Pereira Passos 132 MW Nilo Peçanha - 380 M
Slide 23: Re-pricing of existing energy
Re-pricing of existing energy Conventional Energy Balance Assured energy (MW average) 553 539 535 535 535 535 535 535 535 535 25 25 25 25 25 25 25 25 25 25 53 52 206 228 259 267 272 282 282 282 340 475 304 282 251 243 238 228 228 228 122 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Average sale
Slide 24: Generation Expansion
Generation Expansion Paraiba do Sul River Lajes Complex RJ SP HPP Itaocara Installed Capacity: 151 MW The construction is to be started by the end of 2012. Commercial Operational Start: 2nd half of 2015. Preliminary License already issued. SHP Lajes Installed Capacity: 17 MW The construction is to b
Slide 25: Renova
Renova By the middle of 2011, Light signed an investment agreement of $360 million and the PPA (Power Purchased Agreement) of 400MW of installed capacity to have 25.9% stake at Renova. This year BNDESPAR is becoming a shareholder after a capital increase in Renova. Light keeps a 21.99% stake. Shareh
Slide 26: Renova – Contracts
Renova – Contracts Installed Capacity Operation Startup Estimated Energy Average Load (MW average) CAPEX/MW (Estimated) Factor (%) Contract installed (R$/MW) (R$ MN) (years) Index Tariff (MW) Term Loan Sites In operation BNB SHPP 3 20 IGPM 41.8 61.3 24.2 4.901 182.06 since Contracted 2008 In operati
Slide 27: Belo Monte Overview
Belo Monte Overview Norte Energia S.A. – Shareholders Profile Technical data on the concession: Concession period – 35 years End of concession – August 25, 2045 Self prod. Amazônia 10,00% Energia 9,77% Technical data on the project: Installed capacity - 11.233 MW Public Others sector – Main engine r
Slide 28: Guanhães
Guanhães TOTAL CAPEX R$ Million Dores de Senhora do 269.2 PCH Guanhães Pôrto Jacaré Fortuna II Total Installed Capacity Light Energia (MW) 14 12 9 9 44 60.2 Equity Assured Energy (MW average) 8 6.77 5.15 5.11 25.03 Cemig GT 57.8 ANEEL Authorization 11/22/2002 10/08/2002 10/29/2002 12/21/2001 Operati
Slide 29: New Generation Projects
New Generation Projects Investments in Renova. Belo Monte and Guanhães. in line with our strategy of growing in the generation business Installed Capacity (MW) + 59.3% 22 1.500 280 171 77 74* 942 9 13 855 Installed SHP Current SHP HPP (+) Belo Capacity After Capacity Paracambi¹ (+) Renova² Capacity
Slide 30: Results
O RIO E LIGHT
Slide 31: Net Revenue
Net Revenue NET REVENUE BY SEGMENT (3Q12)* NET REVENUE (R$MM) Generation 6.8% Comercialization 5.3% Distribution 87.9%** +6.2% 5.450.2 5.129.7 470.0 556.9 +5.5% * Eliminations not considered 1.748.0 ** Construction revenue not considered 1.657.1 8.9% 170.3 4.980.2 230.6 4.572.8 NET REVENUE FROM DIST
Slide 32: Operating Costs and Expenses
Operating Costs and Expenses DISTRIBUTION MANAGEABLE COSTS (R$MN) COSTS (R$MN)* -2.3% 3Q12 974.0 951.8 -4.0% Manageable (distribution): distribution): R$ 300.2 312.5 (21.0%) 300.2 Non manageable (distribution): distribution): R$ 1.003.1 (70.1%) 3Q11 2T11 3Q12 2T12 9M11 1S11 9M12 1S12 Generation and
Slide 33: EBITDA
EBITDA CONSOLIDATED EBITDA (R$MN) EBITDA BY SEGMENT* 3Q12 +4.8% 915.5 959.1 Generation 29.5% Distribution 67.9% (EBITDA Margin: Margin: 72.1%) (EBITDA Margin: Margin: 12.9%) +12.4% 239.8 269.5 Commercialization 2.6% (EBITDA Margin: Margin: 8.1%) 3Q11 2T11 3Q12 2T12 9M11 1S11 9M12 1S12 *Eliminations
Slide 34: EBITDA
EBITDA EBITDA – 9M11/9M12 (R$ MN) +18.9% +4.8% 407 194 1.154 971 55 916 20 959 (350) (34) Adjusted Regulatory EBITDA Net Non- Non- Managable Provisions EBITDA Regulatory Adjusted EBITDA Assets and 9M11 Revenue Managable Costs (PMSO) 9M12 Assets and EBITDA 9M11 9M11 Liabilities Costs Liabilities 9M12
Slide 35: Net Income
Net Income NET INCOME – 9M11/9M12 (R$ MN) 128 392 246 44 33 264 36 11 210 (34) Adjusted Regulatory 9M11 9M11 EBITDA Financial Taxes Others 9M12 9M12 Regulatory Adjusted Net Assets and Result Assets and Net Income Liabilities Liabilities Income 9M11 9M11 9M12 9M12 35
Slide 36: Dividends
Dividends DIVIDENDS AND DIVIDEND YIELD PAYOUT AND DIVIDEND POLICY 16.2% 12.4% 11.6% 9.5% 8.7% 100% 100% 795 100% 97.2% 76.3% 81.0% 595 554 556 439 87 87 50% 469 352 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2007 2007 2008 2008 2009* 2009 2010 2010 2011 2011 9M12 9M12 Dividends (R$ MN) Intere
Slide 37: Indebtedness leverage
Indebtedness leverage Net Debt¹ (R$ MM) and Net Debt / EBITDA Rating Investment Rating Rating (AA-(bra)) Grade (brA + ) (Aa2.br) (brA) Dec/11 3.383 3.622 1.947 2.8 1.637 2.7 1.580 1.1 1.2 1.2 2008 2009 2010 2011 Sep/12 Net Debt Net Debt/ EBITDA 37 ¹ Net debt = total debt (excludes pension fund liabi
Slide 38: Indebtedness
Indebtedness NET DEBT AMORTIZATION SCHEDULE* (R$ MN) 3.621.6 Average Term: 3.7 years 3.143.5 1.477 832 855 754 582 2.8 2.5 198 Sep/11 Sep 9M09/11 Sep/12 Sep /12 9M10 2012 2013 2014 2015 2016 After 2016 Net Debt / EBITDA * Principal only Others 2.0% 2.0% COST OF DEBT CDI/Selic TJLP 74.2% 23.5% 9.84%
Slide 39: Investments
Investments CAPEX (R$MN) CAPEX BREAKDOWN (R$MN) 9M12 +32.5% 928.6 Generation Maintenance Others -10.9% 700.6 11.5 59.6 169.9 Generation 563.8 592.7 Projects 546.7 527.8 1.7 181.8 Develop. of 758.7 85.1 92.9 116.9 45.8 Distribution Quality System 518.8 Improvement 200.7 453.8 507.6 97.9 446.9 482.0 L
Slide 40: Why Invest in Light?
Why Invest in Light? Major upcoming events New PPAs starting in 2013 Economic Integration of favelas and 2014 Transformation Pro-business environment Repricing of Revenues increase with no in the New plants investments Existing Energy aditional costs. Concession Area Expansion of the existing ones V
Slide 41: Important Notice
Important Notice This presentation may include declarations that represent forward-looking statements according to Brazilian regulations and international movable values. These declarations are based on certain assumptions and analyses made by the Company in accordance with its experience, the econo
Slide 42: Contacts
Contacts João Batista Zolini Carneiro CFO and IRO Gustavo Werneck IR Manager + 55 21 2211 2560 gustavo.souza@light.com.br www.light.com.br/ri 42