Company Overview Institutional Presentation

Transcription

1 Company Overview Institutional Presentation

2 Disclaimer The stand-alone and consolidated financial statements were prepared in accordance with the accounting principles adopted in Brazil, which include corporation law, the pronouncements, instructions and interpretations issued by the Accounting Pronouncements Committee (CPC) and the regulations of the Securities and Exchange Commission of Brazil (CVM), combined with specific legislation issued by the National Electric Power Agency (ANEEL). As the industry regulator, ANEEL has powers to regulate the concessions. The results are usually presented in both IFRS and Regulatory (Non-IFRS) in order to permit comparisons with other periods. However, the results presented in Regulatory (Non-IFRS) format are not audited. TAESA uses the audited results based on the IFRS principles to declare dividends. The forward-looking statements contained in this document relating to the business outlook, projections of operational and financial results and the growth prospects of TAESA are merely projections, and as such are based exclusively on management s expectations for the future of the business. These expectations depend materially on changes in market conditions and the performance of the Brazilian economy, the sector and international markets and therefore are subject to change without prior notice. EBITDA consists of net income before taxes, net financial expenses, and expenses with depreciation and amortization, and revenues. EBITDA is not recognized by generally accepted accounting principles in Brazil or by the IFRS, it does not represent a cash flow for the periods presented, it should not be considered as an alternative to net income. The EBITDA presented is used by TAESA to measure its own performance. TAESA understands that some investors and financial analysts use EBITDA as an indicator of its operating performance. Net Debt is not recognized by generally accepted accounting principles in Brazil or by the IFRS, it does not represent a cash flow for the periods presented. The Net Debt presented is used by TAESA to measure its own performance. TAESA understands that some investors and financial analysts use Net Debt as an indicator of financial performance. 2

3 Who We Are 3

4 Who We Are Why Invest in TAESA? Premium Assets A Pure Play Transmission Company 24 concessions, lines of 9.4K km, revenues of R$1.97 billion Dividends Highly Predictable and Stable Cash Flow Highly predictable revenues, high EBITDA margins and robust dividend policy Growth M&A, Greenfield and Reinforcement Successful business model 2 to 24 concessions between Source: Company 4

5 Pure Play Transmission Company 24 long term concessions, more than R$ 1.97 billion of contractual Revenues (RAP) and... 5 TAESA TBE Source: Company 5

6 Highly Predictable and Stable Cash Flow Category 1 Category 2 Category 3...contracts without tariff review guarantee a sound and stable cash flow generation. TAESA s concessions expire after % % 17% % 2% 48% 2030 Assets built before 1999 Concessions renewed in 2012, after the PM 579 Allowed Revenues ("RAP") annually adjusted by the IPCA Subject to tariff reviews every five years 30-year concession term Assets auctioned between 1999 and November, 2006 RAP annually adjusted by IGPM (until 2006) or IPCA (from 2006 onwards) RAP reduced by 50% in the 16 th year of the operation No tariff review 30-year concession term 11% 2031 Assets auctioned from November, 2006 onwards RAP annually adjusted by IPCA Subject to tariff reviews in the 5 th, 10 th, 15 th year of the operation 30-year concession term TAESA s concessions are mainly concentrated on Category 2 Source: Company 6

7 Robust Dividend Policy Sound and stable cash flow generation supports robust dividend policy % 95% 95% 95% 95% 95% 87% 88% Minimum Dividend Policy: 50% of Net Income Extra (*) Net Income (R$ mm) Dividends (R$ mm) Payout TAESA has a dividend policy focused on maximizing the dividend payments, guaranteeing at least the distribution of 50% of its Net Income (*) Earnings reserve created due to the adoption of IFRS accounting in 2010 Source: Company 7

8 Growth via M&A, Greenfield and Reinforcement... and a solid business model delivers dividends and value-accretive growth. Cash Flow Stability = Yield Growth Long term concession contracts Strong dividend policy Leverage capacity Predictable, inflation-adjusted cash flows Sustainable growth Efficient operation Financial optimization Nationwide footprint Business model focused on growth and shareholder s return Source: Company 8

9 Unparalleled Growth History Successful track record: From 2 to 24 concessions in 7 years. Allowed Revenues ("RAP") (R$MM) TBE Group (~48%) RAP: R$ 351mm Jun-12 May-12 S. Gotardo TBE NTE+UNISA +113% ETEO (100%) Mar-12 SÃO GOTARDO (100%) RAP: R$ 4mm TAESA RAP: R$ 125mm ETAU (52.6%) Jun-11 07/08 08/09 09/10 10/11 11/12 12/13 RAP: R$ 31mm May-08 NTE + UNISA RAP: R$ 509mm Not Adjusted by IFRS EBITDA Margin Nov-07 Dec-07 BRASNORTE (38.7%) GTESA/PATESA (100%) 85.0% 79.8% 88.7% 90.0% 87.6% RAP: R$ 21mm RAP: R$ 22mm Mar-06 MUNIRAH (100%) RAP: R$ 26mm TAESA has doubled its size over the last 2 years in terms of Allowed Revenues ( RAP ) Source: Company 9

10 2012 Cash Flow Statement TAESA delivered dividends and growth. Financial Management Capital Structure Optimization Value-Accretive Growth 244 2,633 Dividends Leverage Capacity Operating CF Guarantees Dividends 2,157 2,210 1, Initial Cash Oper CF - Fin CF 2011 Dividends Interim Dividends PN s Acquisition of 50% UNISA 3rd Issue of Debentures Payment of PNs Re-IPO UNISA s Cash Balance (50%) Total Cash Source: Company 10

11 Where We Are Now 11

12 1 st Half Highlights Refinance Restructure Grow Merger ATE, STE e NTE Issuance of PNs Pre payment of ATE II Debt TBE Settlement Transmineiras Acquisition Jan Feb Mar Apr May Jun Jul Aug Pre payment BNDES ( ATE, STE and NTE) and Syndicate Dividends 2012 Results 1H13 Merger of ATE II Regulatory EBITDA R$ 581MM EBITDA Margin 87.6 % Net Revenues IFRS R$ 527 MM Net Income R$ 274 MM 61.1 % above 1H12 12

13 1H13 Cash Flow Cash Flow reflects business model: Dividends, Financial Management and Growth Dividends 787 TBE Settlement 402 Financial Management 1, Inicial Cash + inancial Investment Oper CF Dividends Interest + Amort PN s + Borrowings TBE Subtotal Etau + Bra + TBE Total Cash* 13

14 Merger of subsidiaries NTE, STE, ATE, ATEII... we are constantly simplifying the structure... Leverage Capacity Financial Flexibility - Higher Efficiency FIP Coliseu CEMIG Free Float 30% 43% 27% TAESA Brasnorte ETAU ATE III São Gotardo TBE* 38.7% 52.6% 100% 100% 48% * TBE is a fantasy name for a group of 10 concessions Source: Company 14

15 Indebtedness and working proactively on the debt front to prepare for next growth phase. Debt Profile Debt Maturity Capital Structure (BV) 39% 49% 7% 0% 3% 18% 82% 51% 51% CDI IPCA BoC Long Term Net Debt IDB TJLP Fixed Short Term Equity Fx Exposure Represents 7% of Total Debt Short Term will be lengthened Capital Structure Improved 15

16 Transmineiras EATE acquired 10% of 3 concessions for R$ 34,1MM Numbers for 100% stake KM RAP RAP/2 END EBITDA* 2012 Net Debt Transleste Dec/20 Feb/ Transleste Transirapé Transudeste Transirapé Feb/22 Mar/ Transudeste May/22 Mar/ TOTAL TAESA TBE TRANSMINEIRAS * EBITDA Regulatory (Nom IFRS) 16

17 EBITDA Regulatory (Non IFRS) Effective Growth of 30% : reflex of the additional 50% of UNISA and 1 month of TBE EBITDA Regulatory EBITDA Regulatory (Pró-Forma) +43% +30% Q12 chg 2Q13 2Q12 chg 2Q13 17

18 Net Revenues IFRS Remaining 50% of UNISA, Reinforcement, Tariff Review of Brasnorte and 1 month of TBE +57 (+26%) ETAU BRASNORTE SGT 217 TAESA UNISA NTE Pro-Forma 2Q12 chg Subtotal chg TBE Pro-Forma 2Q13 Subs and Associate Writte off Net Revenue 18

19 EBITDA IFRS Remaining 50% from UNISA, Tariff Review of Brasnorte and 1 month of TBE +22 (+13%) TAESA UNISA NTE ETAU BRASNORTE SGT Pro-Forma 2Q12 chg Subtotal chg TBE Pro-Forma 2Q13 Subs and Associate Writte off EBITDA 19

20 Net Financial Results Exchange loss was compensated by increase in Financial Revenues 96 0 (0%) 96 3 TAESA UNISA NTE 93 0 ETAU BRASNORTE SGT Pro-Forma 2Q12 chg Subtotal chg TBE Pro-Forma 2Q13 Subs and Associate Writte off Financial Expenses 20

21 Net Income Net Income growth reflects the Company s growth +28 (+38%) Increase of EBT : R$ 18 MM Fiscal Impact of the Merger Net Income 2Q12 EBITDA Dep/Amort Equity Method Net Financial Expenses Taxes Net Incme 2Q13 21

22 What s Next 22

23 What s Next There are 3 growth avenues within the transmission market... M&A M&A Opportunities R$ 1Bln in Annual Revenues still on the hands of other private companies Greenfield Brazilian Grid Must be Expanded Expansion happens close to TAESA s asset base Reinforcements Smaller Value-Accretive Capex Projects TAESA is currently developing 5 projects Source: Company 23

24 M&A Opportunities... and TAESA has been more effective on the M&A front. R$ 1 Bln RAP with Private Companies Key Issues CAT II CAT III 31% TAESA s been more effective on the M&A Front Since 2006 TAESA passed from 2 to 24 concessions, of which 20 were acquired via M&A Construction Companies Feed the M&A Market 69% M&A deals consist on a construction company selling the transmission asset once it becomes operational to a long term operator Federal Companies Don t Participate Not including Alupar and State Grid Federal State-Owned companies neither sell nor buy assets on the secondary market Potential market is mainly composed of construction companies with short-term approach Source: Company 24

25 M&A Opportunities Last auctions results enhanced the potential M&A market as construction companies were the main winners. Auction Dec/ 12 (R$ MM) Auction Apr/13 (R$ MM) Auction Jun/13 (R$ MM) Total RAP : R$ 352MM Total RAP : R$ 398MM Total RAP : R$ 74MM FIP Caixa Milão CPFL COPEL Furnas 39 Neoenergia Bimetal Engeglobal Isolux 53 MGF Engenharia 14 Geoenergia 2 Bimetal 11 CEL Engenha 2 5 CELG State Grid Furnas 11 Abengoa 292 Abengoa Potential Market for M&A: Up R$ 684 MM in 3-4 Years 33 FIP Caixa Milão Potential M&A Market: Construction Companies BIMETAL FIP Caixa Milão Isolux 53 Others 55 Investment Funds \ Other Private Companies 501 Abengoa Source: Company 25

26 Greenfield Grid Must Be Expanded In the last 10 years the Brazilian grid has grown slowly and must be expanded not to become a bottleneck on the country s development Km PDE % % % Actual PDE 2021 estimate Brazilian power plants are far from the energy consumption centers Huge power plants are currently under construction (Madeira Complex, Teles Pires, Belo Monte) Source: ANEEL, ONS and EPE 26

27 Greenfield Competitive Track Record When Greenfield offerings increase, competition decreases In 2013 More than R$ 1 Bln in Revenues will be Auctioned... CATEGORY II CATEGORY III 50% 55% 38% % % , % 40% % % 67 13% Discount on Basic RAP Winner s RAP...But Returns Remain at a Low Level Source: Company and Bovespa 27

28 Reinforcements TAESA is investing R$ MM in Reinforcements Project Concession Aneel Approved Capex (R$) RAP (R$) RAP/CAPEX SE São João do Piauí II - Installlation of the bank reactor in 500 kv, 3x60 (180) Mvar. ATE II 16.7 MM 2.4 MM 14.4% SE Sapeaçu - Static Var Compensator - SVC kv. TSN 50.8 MM 7.5 MM 14.8% SE Sapeaçu - Installing 3 rd bank of single-phase autotransformers. SE Lagoa Nova II Sectioning of TL PARAÍSO - AÇU II SE Gaspar II * - Installing 3 rd bank autotransformers 230/138kV 150 MVA TSN 46 MM 5.2 MM 11.3% PATESA 10.4 MM 1.5 MM 14.4% ETSE 1.8 MM 0.3 MM 15.2% Total MM 16.9 MM 13.4% *Stake Taesa of 19% Source: Company 28

29 Backup 29

30 Asset Summary Premium asset base concentrated on category 2. PREMIUM ASSET BASE RAP (MM) Concession Contracts Concession Contract Length RAP Tariff RAP/Km Stake Expiration Reduction (km) 13/14 Review (MM/km) Novatrans 100% Dec-30 Jun-18 1, ,3 No 0,32 TSN 100% Dec-30 Jun-18 1, ,7 No 0,36 TSN Munirah 100% Feb-34 Out ,8 No 0,27 TSN GTESA 100% Jan-32 Ago ,0 No 0,14 TSN PATESA 100% Dec-32 Set ,9 No 0,13 ETEO 100% May-30 Out ,8 No 0,27 ETAU 53% Dec-32 Abr ,0 No 0,10 CAT II 2% CAT III Brasnorte 39% Mar-38 No 402 7,7 Yes NTE 100% Jan-32 Jan ,8 No 0,02 0,32 98% STE 100% Dec-32 Jul ,5 No 0,17 ATE I 100% Feb-34 Dez ,6 No 0,32 ATE II 100% Mar-35 Jan ,0 No 0,19 ATE III 100% Apr-36 Mar ,9 No 0,20 50% Reduction EATE 50% Jun-31 Mar ,8 No 0,18 ETEP 50% Jun-31 Ago ,7 No 0,12 ENTE 50% Dec-32 Fev ,9 No 0,19 ECTE 19% Nov-30 Mar ,3 No 0,06 ERTE 50% Dec-32 Set ,9 No 0,13 after % % 3% 2017 STC 40% Apr-36 Nov ,8 No 0,07 Lumitrans 40% Feb-34 Out ,4 No 0,16 EBTE 74% Oct-38 No ,3 Yes % ESDE 50% Nov-39 No 0 2,7 Yes - ETSE 19% May-42 No 0 3,0 Yes - São Gotardo 100% Sep-42 No 0 4,0 Yes % 51% 2018 Total (# 24 Concessions) 9, TBE Source: Company 30

31 TBE Corporate Structure TBE consists on five direct stakes and 5 indirect stakes. 49% TAESA EATE ENTE ERTE ECTE ETEP 50% 50% 50% 19% 50% EBTE STC Lumitrans ETSE ESDE 51% 80% 80% 100% 100% 74% 40% 40% 19% 50% Source: Company 31

32 Financial Highlights Non-IFRS Net Revenues Non-IFRS (R$ MM)* Costs & Expenses Non-IFRS (R$MM) +18% 1, Adjusted EBITDA and Margin EBITDA Non-IFRS (R$ MM)* Net Debt (R$ MM) 85.0% 79.8% 88.7% 90.0% 87.6% 1,078 2,777 2, ,369 1,388 1, The accounting treatment for the Fiscal Incentive have changed along the period, they are presented in the chart considering the current accounting principles. * The figures presented in the charts above have not been adjusted to the changes in the accounting principles implemented in * Net Debt as presented in the chart is the effective Net Debt, therefore differs from the net debt booked in the financial statements. Source: Company 32

33 Financial Highlights IFRS Net Revenues IFRS (R$ MM)* 249 Costs & Expenses IFRS (R$MM) 1, Adjusted EBITDA and Margin EBITDA IFRS (R$ MM)* Net Income IFRS (R$ MM) 71.4% 86.1% 89.2% % % The accounting treatment for the Fiscal Incentive have changed along the period, they are presented in the chart considering the current accounting principles. The figures presented in the charts above have not been adjusted to the changes in the accounting principles implemented in Source: Company 33

34 Dividends Payment TAESA paid an expressive amount of dividends since IFRS Reserve Dividends DPU Dividends per UNIT Source: Company 34

35 IFRS Financial Asset Table below contains the components to estimate Revenues according to IFRS. Concession Financial Asset 1Q13 Annual rate Monthly Rate Monthly O&M RAP (12-13) Monthly RAP End Concession RAP Reduction NVT 1, % 1.1% dec-30 jun-18 TSN % 1.1% dec-30 jun-18 MUN % 0.9% feb-34 oct-20 GTE % 0.9% jan-32 aug-18 PAT % 0.9% dec-32 set-19 ETE % 0.9% may-30 oct-16 ETA % 0.3% dec-32 apr-20 BRA * % 0.5% mar-38 No NTE % 1.2% jan-32 jan-19 STE % 0.8% dec-32 jul-19 ATE I % 0.8% fev-34 dec-20 ATE II % 0.7% mar-35 jan-22 ATE III * % 0.6% apr-36 mar-23 SÃO GOTARDO 3 5.7% 0.5% sep-42 No Total 6, , Source: Company 35

36 Corporate Governance Financial discipline is the corner stone of a well-balanced corporate governance. M&A and Technical Division Executive Directors Financial Committee Board of Directors M&A prepares the financial analysis together with an independent financial advisor Tech department prepares the technical assessment Both departments submit to the approval of Executive Directors If the financial analysis meets the return requirement and If the technical assessment is compliant with the Company s procedures Executive Directors submit to the approval of the Financial Committee The Financial Committee is composed of 5 members: 3 from FIP COLISEU and 2 from CEMIG ( all of them members of the board of directors) The Committee s role is to assess the project, then reject or recommend it to the approval of the Board of Directors The BoD is composed of 11 members: 5 from FIP COLISEU, 4 from CEMIG and 2 independent members The BoD is the ultimate approver for any project Source: Company 36

37 Controlling Shareholders Ideal mix of technical and financial expertise. Blue Chip Local Sponsorship from CEMIG Proven Financial Investors CEMIG is one of the largest utility companies in LATAM, with a significant footprint in generation, transmission, distribution and commercialization of electricity in Brazil Industry consolidator through a solid and well succeeded growth strategy M&A deal of more then R4 9.3 billion since 2004 Solid corporate governance practices FIP Coliseu is an equity investment fund managed by Banco Modal, a private equity firm with over R$ 3bn AuM focused at energy and oil and gas Main shareholders are: EletroCEEE (25% ), Santander Brasil (25%), Forluz (22.6%),Banco do Brasil (15%), Others (12.4%) Strategy oriented for the sector specialization, value accretive and construction of long term partnership Large market cap., listed in New York and São Paulo Stock Exchange and high liquidity Source: Company 37

38 Capital Breakdown TAESA is registered under LEVEL II. Common Shares Preferred Shares Total 14% 0% 27% 30% 44% 45% 55% 42% 43% FIP CEMIG FF FIP CEMIG FF FIP CEMIG FF Common Preferred Total FIP 305,034, ,034,360 CEMIG 293,072, ,050, ,122,873 Free Float 93,446, ,892, ,339,416 Others TOTAL 691,553, ,943,588 1,033,496,721 Source: Company 38

39 Last Auctions Construction Companies dominated the last 3 Auctions. Auction 007/12 KM ANEEL RAP (R$ MM) CAPEX (R$ MM) Discount Winning RAP/CAPEX Winner A , % 7.9% Abengoa B % 10.1% COPEL C % 6.3% CPFL D % 8.8% FIP Caixa Milão (51%), Furnas (49%) E % 7.5% Abengoa F % 9.1% Abengoa G % 10.4% State Grid (51%), COPEL (24.5%), Furnas (24.5%) H Total 4, , % 9% Auction 001/13 KM ANEEL RAP (R$ MM) CAPEX (R$ MM) Discount Winning RAP/CAPEX Winner A % 8.5% ENGEGLOBAL (50%), BIMETAL (50%) B % 9.2% Abengoa C % 8.7% Abengoa D E F G % 10.4% Neoenergia H % 9.4% Isolux I 1, , % 10.5% Abengoa J Total 5, , % 10% Source: Aneel 39

40 Last Auctions Construction Companies dominated the last 3 Auctions Auction 002/13 KM ANEEL RAP (R$ MM) CAPEX (R$ MM) Discount Winning RAP/CAPEX Winner A B % 9.0% C % 9.1% D % 8.3% E % 9.1% FIP Caixa Milão (51%), CELG (10%), Furnas (39%) FIP Caixa Milão (60%), Bimetal (35%), Geoenergia (5%) MGF Engenharia (95%), Geoenergia (5%) MGF Engenharia (95%), Geoenergia (5%) F % 9.0% CEL Engenharia (51%), CELG (49%) G Total 1, , % 9.0% Source: Aneel 40

41 José Aloíse Ragone Filho Cristiano Corrêa de Barros Paulo Ferreira Rafaela Gunzburger Contact: CEO CFO and IRO IR Manager IR Analyst