O c t o b e r

Transcription

1 O c t o b e r

2 Light Holdings Diversified structure which is comprised of the Distribution, Generation and Commercialization segments 2

3 Light in numbers DISTRIBUTION RJ State Concession Area % Population¹ 16 MN 11 MN 68% Área¹ 44,000Km² 11,000 Km² 25% GDP¹ R$ 407 BN R$ 207 BN 51% Consumers 7 MN 4 MN 57% Municipalities % 1 IBGE (2010) Generation 8 1 Amazônia Energia Renova Guanhães Energia 6 Complexo de Lajes HPP Ilha dos Pombos 7 HPP Santa Branca 7 5 SHP Paracambi 8 HPP Itaocara I 3

4 Rankings Among the largest players in Brazil INTEGRATED¹ Net Revenues 2014* R$ Billion ELECTRICITY DISTRIBUTION² Energy Consumption in Concession Area** (GWh) , ,874 25,777 26,934 22,926 22,791 22,321 21,783 20,391 21,500 15,634 16,348 POWER GENERATION PRIVATE-OWNED COMPANIES¹ Installed Hydro-generation Capacity (MW) ,560 2,652 2,241 2,219 1, *** 1 Source: Companies reports 2 Source: Relatório do Sistema de Apoio a ANEEL * Construction Revenue Included ** Captive Market *** Considers the 9 MW of Renova s SHPs and 19 MW of Brasil PCH 4

5 Shareholder Structure Efficient combination of solid industry and financial players 11 Board members: 8 from the controlling group, 2 independents e 1 employees nominated A qualifying quorum of 7 members to approve relevant proposals such as: M&A and dividend policy Number of shares 203,934,060 Price (09/23/15) R$ Price range 52 weeks R$

6 Corporate Governance Decision process assures transparency and value creation LGSXY ADR-OTC 6

7 Energy Consumption Distribution Accumulated TOTAL MARKET (GWh) ¹ 3.0% 0.0% 12,687 13,145 13,874 13,870 25,2ºC 25,1ºC 27.0ºC 25,7ºC 27.9ºC 25,6ºC 26.9ºC 28.3ºC 1H12 1H13 1H14 1H15 1 Note: To preserve comparability in the market approved by Aneel in the tariff adjustment process. the billed energy of the free customer CSN has been considered back. 7

8 Market Breakdown Electricity consumption (GWh) Total market Accumulated 0.0% 13,874 2,582 3,978 13,870 2,541 3, % 4,880 4, % 4,835 4,835 4, , % 4, ,961 2,719 2, % 2,630 1, , , % 1, ,866 11,292 11,329 1H14 1H15 1H14 1H15 1H14 1H15 1H14 1H15 1H14 1H15 RESIDENTIAL COMMERCIAL INDUSTRIAL OTHERS TOTAL Free Captive 8

9 Operating Quality Indicators % DEC e FEC - 12 MONTHS (With Purge) INDICATOR Regulatory TARGET 2014 Overall DEC 8.96 Overall FEC 6.84 DIC/FIC Compensation (R$MN) +82.9% % DEC FEC 2Q14 2Q15 jun-14 jun-15 DEC Equivalent Length of interruption indicator / FEC Equivalent Frequency of Interruption indicator DIC Individual Length of Interruption / FIC Individual Frequency of Interruption 9

10 Losses and Collection 41.91% LOSSES (12 MONTHS) p.p % 40.87% 39.88% 39.63% Aneel TARGET August/ % COLLECTION RATE Accumulated 98.4% 95.9% 8,815 8,754 8,847 8,701 8,622 5,972 5,904 5,927 5,818 5,753 1H14 1H15 PBD/GROSS REVENUE (BILLED SALES) 12 MONTHS 2,843 2,850 2,920 2,883 2, % -0.5 p.p. jun-14 sep-14 dec-14 mar-15 jun % 1.0% Comercial Losses GWh Tec. Losses GWh % Non-technical losses/ LV Market jun-13 jun-14 jun-15 10

11 Non technical losses of Light Map of losses in Concession Area VALE DO PARAÍBA BAIXADA OESTE LESTE LITORÂNEA June data/ 2015 Light Vale Litorânea Leste Oeste Baixada Clients (quantity) 4,270, , , ,764 1,012,606 1,082,900 Low Voltage Market Billing (GWh) 14,515 1,262 5,094 2,724 2,798 2,637 Non technical losses (GWh) 5, ,837 1,895 1,935 Non technical losses / low voltage billing (%) Number of clients in APZ areas 679,992-52,496 83, , ,327 11

12 Loss Reduction Strategy Efficient combination between technology and effective management TECHNOLOGY: CENTRALIZED MEASURING ELETRONIC METERS (thousand units) 14.0% Communities Q15 Out of Communities Monitoring, reading, cutting and reconnecting measured clients - Measurement Control Center; Priorization of areas with a high level of losses and damage to the network; Technology that makes it more difficult to use the network improperly. 12

13 Non-technical losses (%) Zero Losses Area Project: Light Legal Focused in areas with 10,000 to 20,000 clients with high level of losses and delinquency; VARIABLE REMUNERATION Fully-dedicated teams of technicians and commercial agents; 0.00% 0.00% Results constantly and accurately monitored by Light; Result-linked remuneration for services provided; 37 units implemented with 680 thousand clients (15% of total); Delinquency (%) 0.00% 13

14 Evolution of APZs Results Significant loss reduction and increasing collection rate 49.0% APZ LOSSES APZ EVOLUTION BEFORE dec-13 mar-14 jun-14 sep-14 dec-14 APZ COLLECTION mar-15 jun dec/12 dec/13 dec/14 2Q15 Number of APZs BEFORE dec-13 mar-14 jun-14 sep-14 dec-14 mar-15 jun-15 Number of Clients (Thousand Units) 14

15 Regulatory Allowance for Non-Technical Losses Higher recognition of losses linked to targets achievement Additional revenues to be invested in losses combat 40,41% and booked as 40,41% Special Obligations 39,92% 39,92% (ex-rab) 40,41% 31,80% 31,80% 39,92% 40,41% 40,41% 40,41% 40,41% 39,92% 40,41% 39,92% 40,41% 39,13% 38,33% 39,13% 39,13% 38,33% 39,13% 38,33% 39,13% 38,33% 34,49% 36,41% 36,41% 34,49% 36,41% 36,41% 34,49% 34,49% 31,80% 31,27% 31,80% 33,00% 30,95% 31,27% 33,00% 31,80% 31,27% 33,00% 31,27% 30,95% 33,00% 31,27% 30,95% 30,95% 30,95% 30,53% 30,53% 30,53% 30,53% 30,11% 29,69% 30,11% 30,11% 30,60% 30,11% 29,69% 29,69% 29,69% 30,60% 30,60% 29,40% 30,60% 30,60% 29,40% 29,40% 29,40% 29,40% 28,20% 28,20% 28,20% 27,01% 27,01% 27,01% 25,81% 25,81% 25, 25, Regulatory NT Losses/LV 2017 (Flexible) Regulatory Regulatory NT NT Losses/LV NT Losses/LV (Flexible) NT Regulatory (Final) Regulatory Losses/LV Regulatory (Flexible) NT Losses/LV (Flexible) Real Regulatory Final NT Proposal Losses/LV NT (according Regulatory Losses/LV (forecast to NT (Final) methodology) NT Light, Losses/LV Losses/LV Ref. August) (Final) (Final) Real Real NT NT Losses/LV Losses/LV Real NT (forecast Losses/LV Light, (forecast Ref. August) Light, Ref. August) NT Losses/LV Regulatory (AP) Real NT Losses/LV (forecast Light, Ref. August) Regulatory w/ NT NT Penalty Losses/LV Losses/LV (AP) Target (forecast (every Light, August) Ref. August) Regulatory NT Losses Losses/LV with Penalty (AP) (AP) Regulatory Regulatory NT Losses/LV NT w/ Losses/LV Penalty Regulatory NT Regulatory Losses/LV w/ NT Penalty Losses/LV w/ w/ Penalty Penalty 15

16 Light: Tariff Readjustments 19% 27% 6% New Flag 12% 8% 21% 4% Nov/12 Jan/13 Nov/13 Nov/14 Jan/15 Mar/15-20% Annual Tariff Readjustment Law rd Cycle Tariff Review Annual Tariff Readjustment Tariff Flags New Flag + ETR *ETR: Extraordinary Tariff Review 16

17 Generation

18 Brazil Energy Matrix Variety of energy sources available for energy production 1.41% 4.35% 0.01% 28.57% Hydro Thermal Nuclear Wind 65.65% Solar Over 70% of Brazil s electricity is provided by renewable sources Integrating hydro and thermal GSF Generation Scaling factor Reduction in hydroelectric generation impacts GSF Hydro generators need to purchase energy in the spot market % 96.3% 93.8% 98.7% 93.6% 88.9% 86.1% 81.9% 86.5% 87.7% 87.7% 80.6% 87.8% 78.1% 82.5% 78.3% 81.3% 79.4% 83.9% 70 jan-14 mar-14 mai-14 jul-14 set-14 nov-14 jan-15 mar-15 mai-15 jul-15 GSF - reduction factor of hydro power plants that shares hydrological risk in the MRE 18

19 855 MW Installed Capacity Concessions Expiring Only in % 100% Paraiba do Sul River HPP Santa Branca 56 MW RJ HPP Ilha dos Pombos HPP Ilha dos Pombos 187 MW HPP Santa Branca SP 100% 100% 100% HPP Fontes Nova 132 MW Quality Management Underground HPP Nilo Peçanha MW Environmental Management HPP Pereira Passos 100 MW Occupational health and Safety Management 19

20 Assured Energy: 549 MWaverage Energy commercialization focused on the free market Available Energy 9% Hedge Available Energy Contracted Energy Average selling price in : R$ 181/MWh (base date: Aug, 2015) 20

21 PLD and GSF scenario PLD GSF Company estimates based on certain assumptions and internal analyzes. Important factors could lead to differences in actual results. 21

22 Power Generation Expansion Renewable energy generation projects, mainly through partnerships Project Installed Capacity (MW) Assured Energy (MW average) Operational Start Stake Paracambi % Renova* 770 (in operation) 2,079 (contracted) (in operation) (contracted) % Belo Monte 11,223 4, % Guanhães % Lajes % Itaocara % *In Jul/15, Light Energia and SunEdison signed agreement which stablishes conditions for the sale of its 15.87% stake in Renova. The transaction is still subject to preceding conditions. 22

23 Power Generation Expansion INSTALLED CAPACITY (MW) % 1, % % % LIGHT'S STAKE 27.7% +11% +4% 1,203 1, , % +1% 1,248 1, H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 Itaocara¹ SHPP Lajes Belo Monte³ Guanhães¹ Renova² SHPP Paracambi¹ Light Energia ¹ 51% Light ² 15.87% Light % Light *In Jul/15, Light Energia and SunEdison signed agreement which stablishes conditions for the sale of its 15.87% stake in Renova. The transaction is still subject to preceding conditions. 23

24 Divestment of Renova 2011: Light Energia acquired 26% of Renova - R$ 360 MN (R$ 21,36/Unit); 2015: Light Energia and the US-based SunEdison signed agreement which stablishes conditions for the sale of its 15.87% stake in Renova for US$250 mn (paid in SunEdison shares) Price/Unit (R$) SPA w/ SunEdison (R$ MN) Renova s Book Value (R$ MN) Net gain after taxes - R$ MN Cash after taxes and fees - R$ MN Return in real terms: 12% p.a. 24

25 Divestment of Renova The amount of shares to be received by Light Energia when the Transaction is concluded will be calculated based on the average price of SunEdison s shares in the ten trading days immediately prior to the first business day before the closing ( Pricing Period ). Closing Pricing Period (10 trading days) Financial institution will receive SUNE shares Payment to Light Energia Light Energia hired a financial institution to monetize SunEdison s shares. This action seeks to protect Light Energia against share price volatility from the beginning of the Pricing Period up until the closing date. 25

26 RESULTS

27 Financial Highlights R$ mn Q14 2Q15 Key Figures Jun-15 Net Revenue* 8,289 1,601 2,233 Net Income LTM (R$ mn) 539 EBITDA 1, Shares Outstanding (mn) 204 EBITDA Margin 21.8% 14.9% 5.9% EPS (R$) 2.6 Net Income (57) P/E** 6.4 Net Margin 8.0% 0.9% - Market Cap (R$ mn) ** 3,452 Shareholders equity 3,629 3,340 3,700 EV (R$ mn) 10,331 EBITDA LTM (R$ mn) EV/EBITDA 5.9 *Construction revenue not considered **Based on the price of June, (R$ 16,9/share) 27

28 Net Revenue NET REVENUE (R$MN) NET REVENUE BY SEGMENT 2Q15* R$ MN +36.7% 5, % Distribution 85.8%** 1, , % 2, , % 4, ,720 5,205 Generation 5.2% Commercialization and service 9.0% 2Q14 2Q15 1H14 1H15 3 Construction Revenue Revenue w/out construction 1 2 * Eliminations not considered ** Construction revenue not considered 28

29 Operating Costs and Expenses COSTS (R$MN)* 2Q15 DISTRIBUTION PMSO COSTS (R$MN) +10.8% Non manageable (distribution**): (71.0%) +3.2% Manageable (distribution): (16.1%) 2Q14 2Q15 1H14 1H15 * Eliminations not considered ** Construction revenue not considered Generation and Commercialization: (12.9%) R$ MM 2Q15 2Q14 Var. 1H15 1H14 Var. PMSO (207.3) (200.8) 3.2% (418.2) (377.3) 10.8% Provisions (63.0) (14.1) 346.1% (73.3) (79.4) -7.7% PCLD (30.1) (36.1) -16.6% (54.2) (61.4) -11.7% Contingencies (32.9) (19.0) (18.0) 5.6% Depreciation (97.9) (86.2) 13.6% (195.2) (171.6) 13.8% Other operational/ revenues expenses (2.5) (1.2) 108.3% (14.2) (13.3) 6.8% Total (370.7) (302.2) 22.7% (700.8) (641.5) 9.2% 29

30 EBITDA by segment (R$ MN) ADJUSTED EBITDA - BY SEGMENT Consolidated EBITDA (R$ MN) 2Q15 2Q14 1H15 1H % -9.5% % Distribution EBITDA Margin (%) 9.2% 5.7% 8.8% 12.2% Generation (0.8) EBITDA Margin (%) -0.6% 66.0% 51,9% 78.6% % 54% 2Q % % 86% 2Q15 55% 1H14 65% 1H15 Commercialization EBITDA Margin (%) 9.2% 11.1% 13.5% 9.2% Others and eliminations (3.0) (4.9) (11.2) (7.1) Total EBITDA Margins (%) 5.9% 14.9% 12.0% 18.6% Generation e Comercialization¹ Distribution 1 Percentages do not consider eliminations 30

31 EBITDA EBITDA e Adjusted EBITDA - 1H14 / 1H15 (R$ MN) -9.5% 1,485-1,523 1, Adjusted EBITDA 1H14 Regulatory Assets and Liabilities EBITDA 1H14 Net Revenue Non- Manageable Costs Manageable Costs (PMSO) Other Operational Revenues Provisions Equity Pickup EBITDA 1H15 31

32 Net Income ADJUSTED NET INCOME - 1H14 / 1H15 (R$ MN) % Adjusted Net Income 1H14 Regulatory Assets and Liabilities Net Income 1H14 EBITDA Financial Result Taxes Depreciation Net Income 1H15 32

33 Dividends Average payout of 75% in the last 5 years % JCP Dividends Dividend Yeld* Payout Minimum Dividends Policy 1 *Based on the closing price of the day prior to the announcement. 1 The distribution of dividends higher than the mandatory minimum amount of 25 % of the adjusted net income, shall be verified as to its compatibility with the following elements: the Company's financial status; macroeconomic conditions; tax revisions and adjustments; regulatory changes; development strategy or investment plans; and other elements deemed relevant. 33

34 Indebtedness U$/Euro * 0.6% Others 6.4% IPCA 10.3% TJLP 12.0% 1,379 AMORTIZATION SCHEDULE* (R$ MN) Average Term: 3.9 years 1,307 1, % 2.24% * Considering Hedge Nominal Cost CDI 70.7% COST OF DEBT 9.68% 3.55% 11.31% 4.46% set/10 Real Cost % 3.62% 2Q * Just principal 2017 NET DEBT Net Debt / EBITDA Custo Real 5,230 jun-14 Custo Real 6,879 6, mar-15 Custo Real Custo Real jun After

35 4.54x Covenants x 3.44x 6,662 5,662 5,662 Removing the effects of GSF and CVA, the Net Debt/EBITDA multiple falls below the covenants limits ,468 1,468 1,648 Jun/15 CVA GSF Adjusted Debt GSF Adjusted Debt and EBITDA Net Debt for covenants EBITDA for covenants Covenant (Net Debt / EBITDA) 35

36 Investments CAPEX (R$ MN) CAPEX BREAKDOWN (R$ MN) 2Q15 1, Budget 6.0% H14 1H15 Generation 5.0 Administration 6.2 Other 0.8 Losses Combat 72.1 Develop. of Distribution System 86.6 Others Investiments Special Obligations - Losses Investments in Electric Assets (Distribution) 36

37 Why invest in Light? Economic Transformation in the Concession Area Rio as a host of major events Communities pacification Pro-business environment Investment projects hub Energy Market growth Energy Commercializati on focused on the free market New contracts in 2015 Energy available for commercialization Hedge of uncotracted energy to bear GSF deficit Energy Losses Reduction Progress in the Technology Program (Smart Grid) New network and electronic meters in the pacified areas Zero Losses Area Program Best Corporate Governance Practices Listed in Novo Mercado of Bovespa Board Commitees with strong participation in the decision making process Included in the Sustainability Index (ISE) for the 8th year Growth in the Generation Business Projects under construction with partnerships: Renova, Belo Monte and Guanhães (total of 578 MW) SHPP Lajes under construction (17MW). Acquisition of Itaocara (150 MW) Dividend track Record Dividend Policy: minimum 50% of net income; Average payout since 2010: 75% 37

38 Disclaimer This presentation may include forward-looking statements according to Brazilian regulations and international movable values. These statements are based on certain assumptions and analyses made by the Company in accordance with its experience, the economic environment, market conditions and future events expected, many of which are out of the Company s control. Important factors that can lead to significant differences between the actual results and statements on future events or business-oriented results include the Company s strategy, the Brazilian and international economic conditions, technology, financial strategy, developments of the public service industry, hydrological conditions, conditions of the financial market, uncertainty regarding the results of its future operations, plans, goals, expectations and intentions, among others. Because of these factors, the Company s actual results may significantly differ from those indicated or implicit in the statements on events or future results. The information and opinions herein must not be understood as recommendation to potential investors, and no investment decision should be based on the veracity, the updated or completeness of this information or opinions. None of the Company s professionals or parts related to them or its representatives will have any responsibility for any losses that can elapse from the use or the contents of this presentation. This material includes declarations on future events submitted to risks and uncertainties, which are based on current expectations and projections on future events and trends that can affect the Company s businesses. These declarations include projections of economic growth and demand and supply of energy, in addition to information on competitive position, regulatory environment, potential growth opportunities and other subjects. Various factors can adversely affect the estimates and assumptions on which these declarations are based on. 38

39 Contacts João Batista Zolini Carneiro Chief Business Development and IR Officer Mariana da Silva Rocha IR Manager mariana.rocha@light.com.br ri@light.com.br 39