São Paulo, 07 de março de 2012 September 2015
IV BTG Pactual Utilities Day
Wilson Ferreira Jr
CEO
2
Topics for discussion
GSF and load performance 1
Market performance and Delinquency
3
4
Leverage
4th Cycle of Tariff Review
2
5 Controlling Shareholders
2
Topics for discussion
GSF and load performance 1
Market performance and Delinquency
3
4
Leverage
4th Cycle of Tariff Review
3
5 Controlling Shareholders
GSF | ANEEL has proven willing to solve the problem
Expected GSF for 2015 | in %
1H15 2H15
-19.9%
-13.5%
Average: -16.9%¹
1) Average weighted by number of hours month, considering the seasonalyzed physical guarantee; 2) Average PLD (Submarket Southeast)
Contributions for PH 32/2015
Expected PLD for 2015² | R$/MWh
Expected value hydrological risk Aneel Proposal: R$ 6.90/MWh (2015-20) APINE Proposal: R$ 1.60 to R$ 3.63/MWh (considers the average term of Regulated Market (ACR) agreements - 27 years)
Discount rate in Regulated (ACR) and Free (ACL) Markets Aneel Proposal: WACC = 7.16% p.a.
APINE Proposal: ke = 9.63% p.a.
Risk Premium in the Regulated Market (ACR) Aneel Proposal: R$ 6.90/MWh + spread (formulas) APINE Proposal: simulation based on the use of the concept of firm energy: value of R$ 7.25/MWh
Risk Premium in the Free Market (ACL) Aneel Proposal: Adhesion for at least 3 years and contracting of around 10% of Reserve Energy APINE Proposal: Adhesion for at least 2 years and establishment of a minimum level of Reserve Energy contracting (5%). Cost: Value of Reserve Energy + premium of R$ 10.4/MWh
242
221 244
156
388 388 388 388 387 369
244
145
Jan/1
5
Feb/1
5
Mar/
15
Apr/
15
May/1
5
Jun/1
5
Jul/15
Aug/1
5
Sep/1
5
Oct
/15
Nov/1
5
Dec/
15
CCEE Current
4
PLD (Sep-Dec): R$ 216 /MWh
CPFL Impact R$ 300 million
-8,1%
NIPS Load Evolution
2014 65.1 GWavg Growth
ONS (PEN 2015) 67.3 GWavg +3.3%
Rev. ONS Aug/15¹ 64.0 GWavg -1.7%
CPFL 63.3 GWavg -2.8%
+2,7% -2,6%
-7,4%
-7,9% -7,6%
-5,5%
-4,6%
69.6
68.1
66.6
63.9
60.9
59.9 60.1
63.5
65.2 65.0 64.5
67.8
69.9 69.9
67.6
65.8 65.0 65.1
66.5 67.1
67.9 67.7 67.2
61.1 61.4
63.0 62.6 62.6
Jan/15 Feb/15 Mar/15 Apr/15 May/15 Jun/15 Jul/15 Aug/15 Sep/15 Oct/15 Nov/15 Dec/15
Current 2015
ONS (2nd Rev. PEN Aug/15)
ONS (PEN Jan/15)
CPFL
NIPS Load Evolution in 2015 - GWavg
Deviance
1) Including current figures in the period of Jan-Aug/15 5
2
Topics for discussion
GSF and load performance 1
Market performance and Delinquency
3
4
Leverage
4th Cycle of Tariff Review
6
5 Controlling Shareholders
27%
41%
17%
15%
2Q15 Energy Sales
1) Source: PME/IBGE - New Methodology; 2) Quarter compared to the same quarter of last year; 3) Source: FGV 7
Off Peak Peak
9,000
3,534
9,188
3,483
Jun/14 Jun/15
1Q14 1Q15 2Q14 2Q15
11,355 11,152 10,329 10,079
4,153 3,962 4,292 4,112
14,621
14,191
(59) 14 (335)
(51)
Resid.
+0.6%
-5.4% -2.4% -2.9%
Commerc. Indust. Others 2Q14 2Q15
-1.5%
Sales in the concession area | GWh
Sales by consumption class | GWh
14,621 14,191
-4.2%
TUSD Captive market (Distribution)
-2.9%
-2.4%
+2.1%
-1.4%
Contracted Demand l MW
15,507 15,114
-4.6%
-2.5%
-1.8%
Market Breakdown in the
concession area | 2Q15
Industrial Class by activity l GWh
Residential Commercial
Industrial
Others
INDUSTRIAL SEGMENT 2Q14 2Q15 Δ
Food & Beverage 879 882 0.4%
Chemicals 719 684 -4.8%
Metallurgy 689 634 -8.0%
Rubber & Plastics 566 548 -3.2%
Automobile 499 441 -11.7%
Textiles 447 422 -5.7%
SUBTOTAL 3,799 3,611 -4.9%
OTHERS 2,404 2,258 -6.1%
TOTAL SEGMENT 6,203 5,869 -5.4%
8 1) Source: PME/IBGE - New Methodology; 2) Quarter compared to the same quarter of last year; 3) Source: FGV
Consumer Confidence Index³ Index Base Sep-2005 = 100
Unfavorable economic environment and strong higher tariffs inhibit residential consumption
Jan/1
0
Jul/10
Jan/1
1
Jul/11
Jan/1
2
Jul/12
Jan/1
3
Jul/13
Jan/1
4
Jul/14
Jan/1
5
Jul/15
1Q
10
2Q
10
3Q
10
4Q
10
1Q
11
2Q
11
3Q
11
4Q
11
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
Payroll²
Average price variation (%) in R$/MWh Residential of CPFL Energia
Unemployment Rate¹ | In % of EAP
-20%
0%
20%
40%
60%
80%
2Q10 2Q11 2Q12 2Q13 2Q14 2Q15
67% Tariff Flags
48%
19%
Extraordinary Tariff Review /
Tariff Adjustments
82.983.9
80
100
120
140
Jan-1
0
May-1
0
Sep-1
0
Jan-1
1
May-1
1
Sep-1
1
Jan-1
2
May-1
2
Sep-1
2
Jan-1
3
May-1
3
Sep-1
3
Jan-1
4
May-1
4
Sep-1
4
Jan-1
5
May-1
5
Confiança do Consumidor
Taxa média 2008-2014
Consumer Confidence
Average Rate 2008-2014
Delinquency | Strengthening of collection actions inhibit the advance of delinquency
Energy Bills Total of CPFL Energia
Contas de Energia Grupo B
Delinquency Evolution R$ million in D90 / revenues (LTM)
Evolution of Allowance for doubtful accounts (PDD) | R$ million
9
23 24
15
23 21
41
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15
75%
2
Topics for discussion
GSF and load performance 1
Market performance and Delinquency
3
4
Leverage
4th Cycle of Tariff Review
10
5 Controlling Shareholders
1) Financial covenants criteria; 2) EBITDA of the last 12 months; 3) Adjusted by the proportional consolidation as of 2012; 4) Financial debt (+) private pension fund (-) hedge
Indebtedness Evolution
11
2Q151Q14 2Q14 3Q14 4Q14 1Q15 2Q15
12.8 13.2 13.0 13.0 13.6 13.8
Leverage1 | R$ billion
Adjusted net debt1/ Adjusted EBITDA2
3,570 3,830 3,886 3,736 3,835 3,755 Adjusted EBITDA1,2 R$ million
3.58 3.44 3.33 3.49 3.54 3.67
3.47 3.33 3.20 3.25 3.24 3.23
Evolution of Cash balance and CVA | R$ billion
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
4.045 4.549
3,822 , 4.088 3,783 3,292
413 474
548 911 1,147 1,638
Cash balance CVA
4,930 4,929 4,999 4,370
5,023 4,459
+0%
+43%
-13%
Adjusted with CVA in the cash balance
Gross debt cost3,4:
Nominal: 11.4% / Real: 2.3%
Average Tenor: 3.74 years
Short-term (12M): 10.0% of total
Gross debt by indexer 2Q15:
CDI: 71% l TJLP: 21% l PSI: 7% l IGP: 1%
Adjusting the cash balance by the receivable CVA, accumulated until 2Q15, net debt/EBITDA ratio would be of 3.23x. If we separate CPFL Renováveis, growth vehicle of the group, the leverage adjusted by the balance of CVA would be of 2.89x
CPFL Energia ex CPFL Renováveis
2.89
3.33
11.2
3,363
2
Topics for discussion
GSF and load performance 1
Market performance and Delinquency
3
4
Leverage
4th Cycle of Tariff Review
12
5 Controlling Shareholders
4th Cycle of Tariff Review | CPFL Piratininga (preliminary proposal)
13
Methodology changes 4th cycle
(R$ million)
Variation over 3th cycle
(R$ million)
WACC from 7.50% to 8.09%
Capital Remuneration 210 +15
Creation of Special Obligations remuneration
Special Obligations remuneration 11 +11
Methodology changes in Technical Losses
Technical Losses 143 +9
Other Revenues – Methodology simplification
Other Revenues Sharing -36 +6
Extension of the aging from 49 to 60 months
Irrecoverable Revenues 24 -7
Xpd from 1.11% to 1.53%
Xpd Factor -6 -4
Total effects +29
New methodology of the 4th Cycle of Tariff Review for CPFL Piratininga Generated an annual benefit of R$ 29 million (preliminary figures)
4th Cycle of Tariff Review | CPFL Piratininga
14
June July August September October
Expected schedule of the Process of Periodic Tariff Review of CPFL Piratininga
Day 19: Aneel submits preliminary proposal to CPFL
Day 3: Aneel’s meeting Day 21: Public Hearing Opening (technical notes release)
Day 13: In-house Public Hearing (opportunity for unions, consumers, etc. give their opinions) Day 27: End of In-house Public Hearing (deadline for contributions)
Day 18: Aneel submits final proposal to CPFL Day 25: Meeting with Aneel
Day13: Aneel’s Board of Executive Officers Meeting and Periodic Tariff Review (RTP) deliberation Day 23: Publication of tariffs
2
Topics for discussion
GSF and load performance 1
Market performance and Delinquency
3
4
Leverage
4th Cycle of Tariff Review
15
5 Controlling Shareholders
Evolution of the Stake of Controlling Shareholders
Previ: During the 1Q15 and 2Q15, Previ has reduced its stake from 30.0% to 29.5%, selling part of its free shares
Stock dividend: A 3.19% stock dividend occurred on May 06, 2015, as approved in the Extraordinary General Shareholders’ Meeting. These shares were unbounded from the control block
Camargo Correa: After the Stock Dividend, Camargo Correa sold its Unbound shares
In 3Q15, there were no shares sales by the Controlling Shareholders
Source: Standardized Financial Statements (DFP) form, Quarterly Information (ITR) forms and CVM 358 form of CPFL Energia 16
9.6%
3.4%
20,4%
24.3%
11.7%
30.5%
December/14
Previ
Free Float
Camargo
Bonaire
9.7% 3.8%
19.8%
23.6%
11.3%
31.9%
August/15
Previ
Free Float
Camargo
Bonaire
0.1%
P C B
P B
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