Light S.a. · BMFBOVESPA:LIGT3
Light — Investor Presentation (July 2013)
39 slides from Light's investor presentation, July 2013
Slide 1: Corporate Presentation
Corporate Presentation July 2013
Slide 2: Light Holdings
Light Holdings Light S.A. (Holding) 100% 100% 51% 100% 25.5% 100% 100% 100% 100% 51% 20% Light Serviços Itaocara Amazônia Light Esco Lightcom Light Soluções Axxiom CR Zongshen Light Energia Lightger Energia Prestação de ComercializadoraemEletricidade Instituto Soluções E-Power de Eletricidade Energi
Slide 3: Light in numbers
Light in numbers Concession Distribution RJ State Area % Population¹ 16 mn 11 mn 68% Area¹ 44,000 Km² 11,000 Km² 25% GDP¹ R$ 407 bn R$ 207 bn 66% # Consumers 7 mn 4 mn 57% # Municipalities 92 31 34% 1 IBGE (2010) Generation 1 Amazônia Energia Renova 2 Guanhães Energia 3 6SHP Paracambi 4 HPP Complexo
Slide 4: Rankings
Rankings Among the largest players in Brazil INTEGRATED² DISTRIBUTION¹ Net Revenues 2012 – R$ Billion Energy Consumption in Concession Area (GWh) - 2012 18.5 37,626 15.0 11.8 24,714 22,737 8.5 21,467 20,054 6.9 15,018 6.6 Cemig CPFL Neoenergia Copel Light EDP Eletropaulo Cemig Copel CPFL Light Celes
Slide 5: Shareholders Structure
Shareholders Structure BTG 14.29% PACTUAL 2.74% 28.57% 11 Board members: 8 from the controlling SANTANDER 5.50% FIP group, 2 independents e 1 employees CEMIG REDENTOR nominated 28.57% VOTORANTIM 75% 19.23% 25% 6.41% A qualifying quorum of 7 members to 5.50% approve relevant proposals such as: M&
Slide 6: Corporate Governance
Corporate Governance General Assembly Fiscal Council Board of Directors Human Governance and Finances Auditors Management Resources Sustainability Committee Committee Committee Committee Committee Chief Executive Officer Paulo Roberto R. Pinto Chief Financial Chief Distribution Chief Energy and Inve
Slide 7: Energy Consumption
Energy Consumption Distribution – Quarter Outr osCa ti TOTAL MARKET (GWh) ¹ 13% vos Others Indu stria +1.8% 13% Industrial 5% l +3.7% Livre 5% 19% Free 6,291 6,180 6,407 19% 6,087 With the consumption Resid enci no longer billed by 35% the change in criteria, 28.3º the total energy Residential C 27.
Slide 8: Total Market
Total Market ELECTRICITY CONSUMPTION (GWh) TOTAL MARKET – QUARTER +3.7% 6,407 6,180 +3.2% 835 801 +7.8% 2,348 2,423 1.877 1.748 2,091 1,939 214 -3.7% 5,572 191 +3.7% 5,379 962 927 966 932 49 53 1,748 1,877 561 568 882 913 401 359 1T12 1Q12 1T13 1Q13 1T12 1Q12 1T13 1Q13 1T12 1Q12 1T13 1Q13 1T12 1Q12
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 Events Schedule Period 2012-2014 Tourism Oil R$ 1.8 bn R$ 107.7 bn 0.9% Confederations Cup 50.9% Jun, 15 to 30/2013 Others World Youth Day Jul, 23 to 28/2013 R$ 1.9 bn 0.9% World Cup Jun, 12 to Jul, 13/2
Slide 10: Collection rate by segment
Collection rate by segment Quarter COLLECTION RATE BY SEGMENT COLLECTION RATE QUARTER 12 MONTHS 104.7 101.0 100.2% 99.2% % 100.6 99.5% 97.7% 95.0% % % 97.2% 92.0 % Total Varejo Grandes Clientes Poder Público Total Retail Large Public Mar/12 mar-12 Mar/13 mar-13 1T12 Clients 1T13 Sector 1Q1 1Q1 2 3 1
Slide 11: Losses
Losses Reflects exclusion of long term delinquent customers 12 months from the billing system, according to Resolution 414 by Aneel. 45.4 44.9 43.1% % % 42.1 41.8 41.6 42.2 41.3 40.7 41.2 % % % 40.4 % % % % 32.9% % 8,584 8,647 7,544 7,619 7,838 8,047 7,493 7,543 7,627 7,582 7,665 63% Non-Risky Area
Slide 12: Non Technical Losses
Non Technical Losses Concession Area Losses Map PARAÍBA VALLEY BAIXADA EAST WEST LITORÂNEA As March / 2013 Grupo Light Valley Litorânea East West Baixada # Clients 4,029,805 418,489 814,157 857,437 934,709 1,005,013 Low Voltage Market (GWh) 13,411 1,129 4,934 2,558 2,507 2,283 Non Technical Losses (
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 a
Slide 14: New Technology Program
New Technology Program Meters Installed (Thousands) 373 341 79 69 227 30 122 80 7 272 294 2 197 115 Monitoring, reading, cutting and 78 reconnection of customers telemetry– MCC (Measuring Center Centralized) 2009 2009 2010 2010 2011 2011 2012 2012 2013 May/13 Prioritization in areas of high loss
Slide 15: Pacified Favelas (UPPs)
Pacified Favelas (UPPs) State Government Light Present in 15 UPPs, 9 33 UPPs established already concluded 130,000 households 60,000 consumers 40 UPPs until 2014 200,000 people achieved 30 UPPs until 2014 PARTNERSHIP Safety, citizenship, and social inclusion 15
Slide 16: Zero Losses Area
Zero Losses Area Project: “Light Legal” (APZ – Zero Losses Area) Focused in areas with 10,000 to 20,000 clients with high level of losses and delinquency; Fully-dedicated teams of technicians and commercial agents; Small areas to cover, enabling higher productivity; Constant and accurate res
Slide 17: Losses Control Initiatives
Losses Control Initiatives Results until March/13 Zero Losses Area (APZ) Client Non-Technical Losses/ Collection Neighborhood Numbers LowVoltage Market * Rate Curicica 13,034 12.1% 99.7% Favelas Realengo 10,141 16.9% 99.5% Conclusion Losses Collection Cosmos 34,933 22.8% 107.7% Areas Year Before Cur
Slide 18: Losses Reduction - Business Case
Losses Reduction - Business Case An example NEW METER REAL INSTALLATIO CONSUMPTION N 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 PROVISION COSTS TO THE RAB REDUCTION REDUC
Slide 19: Generation Business
GENERATION BUSINESS
Slide 20: Installed Capacity
Installed Capacity 868 MW 51% 100% SHP Paracambi Paraiba do Sul River 13 MW HPP Ilha dos HPP Ilha dos Pombos 187 MW 100% Lajes RJ Pombos Complex 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 MW 100 MW 20
Slide 21: Re-pricing of existing energy
Re-pricing of existing energy Conventional Energy BalançodeEnergia Balance Convencional doGrupo Light Energ Assured iaAsseg(MW energy urada(MW médios) average) 539 535 535 535 535 535 535 535 535 25 25 25 25 25 25 25 25 25 122 92 184 258 271 276 271 282 282 392 418 326 252 239 234 239 228 228 2013 2
Slide 22: Generation Projects
Generation Projects Installed Capacity Assured Energy Operational Project Stake (MW) (MWaverage) Start 335 (in operation) 173.1 (in operation) 2008/2012 Renova 21.99% 797.2 (contracted) 395 (contracted) 2013-2017 Belo Monte 11,223 4,571 2015 2.49% Itaocara 151 83 2015 51% Guanhães 44 25.03 2014 51%
Slide 23: Generation Projects
Generation Projects Investments in Renova, Belo Monte and Guanhães in line with our strategy of growing in the generation business Installed Capacity (MW) Expansão daGeração (MW) + 59.8% 280 22 1,505 175 77 74* 942 9 855 13 Installed (+) SHP Current (+) SHP (+) HPP Capacity After Capacidade Capacity
Slide 24: Results
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Slide 25: Net Revenue
Net Revenue NET REVENUE BY SEGMENT (1Q13)* NET REVENUE (R$MN) Commercialization 8.6% Generation +7.5 7.1% Distribution 84.0%** 2,040. 1,898. 0 7 157,3 137,4 * Eliminations not considered ** Construction revenue not +6,9% 1,883.1 considered 1,761. 3 NET REVENUE FROM DISTRIBUTION (1Q13) 1Q12 1T12 1Q13
Slide 26: Operating Costs and Expenses
Operating Costs and Expenses COSTS (R$MN)* DISTRIBUTION MANAGEABLE COSTS (R$MN) 1Q13 -4.8% Não 333.1 gerenciáveis; 317.1 Non manageable 70,8% (distribution): R$ 1,261.2 (70.8%) Geração e Comercialização ; 11,4% Generation and Commercialization: R$ 1Q12 1T12 1Q13 1T13 203.5 (11.4%) Gerenciáveis; Mana
Slide 27: EBITDA
EBITDA Dis %; 63 63, trib ,84 8 uiç ão CONSOLIDATED EBITDA (R$MN) EBITDA BY SEGMENT* ; % 1Q13 433.4 -18.1% 355.1 Distribution 63.8% (EBITDA Margin: 13.5%) Ge 33,4 Commercialization Generation 33.4% raç ão; % 1Q12 1T12 1Q13 1T13 2.8% (EBITDA Margin: 82.1%) 33, 0 (EBITDA Margin: 5.6%) 4% ; Com ,8%; 2
Slide 28: EBITDA
EBITDA EBITDA – 1Q12 / 1Q13 (R$ MN) + 5.8% - 18.1% 122 431 433 101 456 42 355 (2) (175) (19) (7) (1) EBI TDA Ativos e EBI TDA - Receita Custos Não Custos Provisões EBI TDA - Ativos e EBI TDA Ajustado - Passivos 2T11 Líquida Gerenciáveis Gerenciáveis 2T12 Passivos Ajustado - 2T11 Adjusted Regulatório
Slide 29: Net Income
Net Income ADJUESTED NET INCOME 1Q12 / 1Q13 (R$ MN) Lucro Líquido eLucroLíquido Ajustado 1T12/1T13-R$ Milhões + 4.8% - 43.8% 67 145 139 14 0 (1) 3 79 0 (4) (78) (9) EBI TDA Ativos e EBI TDA - Receita Custos Não Custos Provisões EBI TDA - Ativos e EBI TDA Ajustado Adjusted Regulatory 2T11 LL - Ajusta
Slide 30: Dividends
Dividends 9.9% 8.2% 8.1% 8.1% 6.1% 5.4% 4.2% 1.7% 3.4% 3.3% 2.4% 432 408 363 351 100% 100% 100.0% 351 86.5% 81.0% 76.3% 257 203 205 187 432 182 87 408 50% 351 363 351 87 92 203 187 182 170 118 92 2007 2008 2009* 2010 2011 2012 1S08 2S08 1S09 2S09 1S10 2S10 1S11 2S11 1S12 2S12 1S13 Payout Minimum Div
Slide 31: Indebtedness
Indebtedness Custo Real NET DEBT AMORTIZATION SCHEDULE* (R$ MN) Without Pension Fund Average Term: 4.7 years 3,991.9 4,031.4 982 1 792 759 616 2.83 357 394 2.73 176 194 42 42 42 2009 2010 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 After 3T10 Dec/12 9M09 Mar/13 9M10 2022 Custo Real Net Debt /
Slide 32: Investments
Investments CAPEX BREAKDOWN CAPEX (R$ MN) (R$ MN) 1Q13 Develop. of Distributio 928.6 n System 796.8 51.6 700.6 153.8 102.7 Commerc./ 563.8 Energy 116.9 181.8 Eficiency Losses 774.8 26.1 Combat 694.1 +13.9% 518.8 162.7 44.7 446.9 142.9 11.7 35.8 Generation Projects 131.2 127.0 26.9 Quality 2009 2009
Slide 33: Why invest in Light?
Why invest in Light? Major upcoming events New PPAs starting in 2013 and Economic Integration of favelas 2014 Transformation in Pro-business environment Repricing of Revenues increase with no the Concession New plants investments Existing Energy aditional costs. Area Expansion of the e
Slide 34: Regulatory Framework
Regulatory Framework The Provisional Measure 579 was enacted on September 11, 2012 and thereafter converted into Law 12,783 providing for electric power concessions, reduction of sector charges and reasonable tariffs which although these have not directly affected Light, as its concessions will ex
Slide 35: Regulatory Framework
Regulatory Framework On March 8, 2013, the federal government issued the Decree 7,945 preventing the coverage of part of the non- manageable costs not covered by the 2013 tariff, through the resources transferred from the Energetic Development Accout (CDE) for the following costs: System Service C
Slide 36: 2013 Tariff Review Critical Issues
2013 Tariff Review Critical Issues Remuneration Asset Base Non-Technical Losses R$ 2.7 billion (nominal terms) invested during Aiming the flexibility of the regulatory target, the current cycle (2008-2013) based on Aneel’s excepcionality criteria: Capitalization improvement driven by large g
Slide 37: 2013 Tariff Review Schedule
2013 Tariff Review Schedule Date Event Aneel forwards first proposal (without remuneration and depreciation) to the July 16 concessionary and to the consumers representatives August 01 Internet presentation of the Tariff Review Proposal prepared by Aneel From Aug/5 to Regulatory Asset Base fiscaliza
Slide 38: 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 39: Contacts
Contacts João Batista Zolini Carneiro CFO and IRO Luiz Felipe Negreiros de Sá Superintendent of Finance and Investor Relations +55 21 2211 2814 [email protected] Gustavo Werneck IR Manager + 55 21 2211 2560 [email protected] www.light.com.br/ri 39