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INSTITUTIONAL PRESENTATION
Financial and Operational Results
September 30, 2012
2
Disclaimer
Statement on Future Declarations:
The forward-looking statements in this report related to the outlook for the business,
estimated financial and operating results and growth prospects of COMGAS are merely
projections and, as such, are based exclusively on management expectations regarding
future performance. These expectations depend substantially on market conditions and the
performance of the Brazilian economy, the business sector and the international markets,
and are therefore subject to change without prior notice.
Company Overview
History
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1872: The British company San Paulo Gas receives authorization toexplore the concession of public services of ilumination in SãoPaulo;
1912: The Canadian company Light assumes ownership;
1959: The company is nationalized and renamed CompanhiaPaulista de Serviços de Gás (Comgás);
1968: The joint-stock company is incorporated under the control of the city government and isnamed Comgás;
1984: Comgás is taken over by Companhia Energética de São Paulo (CESP), the state-ownedpower utility;
1996: The company goes public and is traded on the São Paulo Stock Exchange (Bovespa)beginning in 1997;
1999: PRIVATIZATION: The consortium formed by British Gas and Shell obtain a controlling stake in Comgás;
2010: Comgás is consolidated as Brazil’s largest natural gas distributor responsible for more than 30% of the sales of naturalgas in the country;
2011: Comgás reached customer 1,000,000;
2012: Cosan aquires 60.1% of Comgás’ social capital from British Gas (BG)
A Comgás é uma Companhia Regulada ...Comgás Highlights
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Premium asset located in a strategic concession
area
Substantial growth in the residential segment
Diversified client base
Impressive track record: Significant growth with
profibility and sound capital structure
Solid regulatory framework and transparent concession
scheme
Favorable prospects for natural gas in
Brazil
177 Cities
27% of Brazil’s GDP
Área de concessão
Segments (September 2012)
Residential: 1,178 thousand householders
Commercial: 11.1 thousand meters
Industrial: 1,012 meters
Cogeneration : 23 meters
Thermal Generation : 2 plants
NGV: 329 gas stations
Gas Brasiliano
PresidentePresidentePrudentePrudente
AraçatubaAraçatuba
S.J. Rio S.J. Rio PretoPreto
MaríliaMaríliaBauruBauru
CentralCentral(Araraquara)(Araraquara)
RibeirãoRibeirãoPretoPreto
FrancaFrancaBarretosBarretos
Natural GasSPS
RegistroRegistro
SorocabaSorocabaCOMGÁS
Concession Area
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Concession Area Advantages
Pipeline intersection (GASBOL, GASAN, GASPAL)
Short distance to supply (Santos Basin)
High demographic density
Population 29.6 Mi
Homes 8.2 Mi
Vehicles 10.0 Mi
POTENTIAL (approximate data)
Comgás: uma combinação de competências e princípiosComgás’ Shareholder Strucutre
SHELL BRAZIL HOLDING BV
6.34%
INTEGRAL INVESTMENTS
BV
71.91%
SHELL GAS BV
16.49%
BG SÃO PAULO INVESTMENTS
BV
83.51%
OTHER SHAREHOLDERS
(free float)
21.75%
SHELL BRAZIL HOLDING BV
6.34%
INTEGRAL INVESTMENTS
BV
11.86%
SHELL GAS BV
100%
OTHERSHAREHOLDERS
(free float)
21.75%60.05%
Previous Shareholder Structure Current Shareholder Structure(1)
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Listing of Comgás’ shares in the Stock Exchange: As inserted in the Edict of Privatisation and reflected in the Company’s Bylaws, Comgás is a publicly traded
company with it’s shares negotiated in the Stock Exchange, condition which must be maintained during the entire concession period.
Note (1): On November 5th, 2012, Cosan concluded the acquisition of a 60,05% of participation in Comgás from the BG Group for the sum amount of R$ 3.4 billion.
Comgás’ Shareholder Structure
Comgás: uma combinação de competências e princípiosComgás’ new controlling shareholder
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ABOUT COSAN
Cosan is one of the biggest private economic groups in Brazil, with business in energy and infrastrucutre segments;
Rumo Logística, Raízen, Cosan Lubrificantes e Especialidades and Radar Propriedades Agrícolas are companies which are part of the Group;
In the energy segment, Cosan forms a joint venture with Shell in Raízen:
One of the largest distributors of fuel in Brazil, with 4,600 Shell gas stations
Brazil’s largest and one of the world’s largest sugar, ethanol and cogeneration producers with 24 plants and a sugarcane grinding capacity of
65 million tons.
Largest sugar exporter in the world represented by Rumo Logística;
Along with Cosan Lubrificantes e Especialidades, Rumo Logística produces and distributes lubricants with the brands Mobil and Comma in Brazil
and in 3 other countries in South America and the United Kingdom;
With a pioneering iniciative in Brazil, Radar purchases, leases and sells arable land with high potential of valuation in the best regions of Brazil,
currently administrating over 150 thousand hectares of land.
Regulated framework
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Note: With the opening trading, in 2011, the users with consumption over 300,000 m3/month are considered potentially free.
Market CustomersResidential and Commercial
(small volumes)
Trading and distribution during the concession period
Other Markets Customers (large volumes)
Trading up to 12 years (starting on contract subscription
date) and distribution for the entire concession period
Production and Transportation:
ANP (Federal Parts)
..................
Distribution:
ARSESP (Government Parts)
www.arsesp.sp.gov.br
As a public service provider, Comgás’ activities
are regulated by ARSESP, a government
institution of São Paulo State, which delegated
to Comgás a 30-year term, starting in May 1999
for public service exploration with a one-time
renewal possibility for 20 more years.
REGULATED PRICES AND TARIFFS RULES
Tariff Settlement Process
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Maximum Margin Review
•Considering the WACC over
the Regulatory Asset Base +
Investments
•Operational Costs
•Depreciation
•Sales Volume
Maximum Pre-definedTariffs
(discounts may be applied)
• Initial Tariff Structure
includes:
Tariffs Readjustments
•Annual Margin adjustment
by inflation index (IGPM)
excluding the X Factor and
the K Factor:
•Gas Costs pass through
(comoddity & transport)
every May 31st (or
eventually before, as
defined by the regulator).
In Tariff Reviews, The X Factor and The K Factor
are also Defined
• X Factor: Fixed efficiency factor
to be considered in the PO annual
update. In this 3rd tariff cycle, the
X Factor was set at 0.82% per
year.
•K Factor: Adjustment factor that
compensates deviations from the
maximum margin earned
regarding the maximum margin
permitted. The K Factor was set
at 0.009991 R$/m3 in the 4th year
of the 3rd cycle.
The Concession Agreement foresees tariff reviews every 5 years
P gas + P transport +
Maximum Margin Average (P0)
= TariffP0 * (IGPM – X Factor) + K Factor
Tariff review for the 3rd Cycle (2009-2014):
P0 established in 0.3052 R$/m3
Commercialization Margin set at 1.9%
= + +
Fornecimento de Gás Natural: CONTRATOSNatural Gas Supply: Contracts
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Daily quantity contracted:
approximately 14.3 million m³/day, besides auction contracts.
Daily quantity demanded:
approximately 13.0 milllion m³/day upuntil September 2012.
Contracts TCQ Firm Contract Firm of Energy Auction Weekly Gas
Contract Models Firm Firm Firm of Energy Firm of Short Term Very Short Term
Gas Source Bolivian Undetermined Undetermined
Surplus of PB's contracts with
other distributors / thermal
power plants
Surplus of PB's contracts
with other distributors /
thermal power plants
DCQ
End of Contract Jun/19 Dec/13 Dec/12 Sep/13 Sep/13
Commodity +
Transportation
Fixed Charge +
Variable Charge
Fixed Charge +
Variable Charge
Transportation: annual
readjustment according to USA
Inflation: CPI
Fixed Charge: annual
readjustment by IGP-M
Fixed Charge: annual readjustment
by IGP-M
Commodity: quarterly correction
based on Oil Basket
+ Exchange Rate
Variable Charge: quarterly
correction based on Oil Basket
Variable Charge: quarterly
correction based on Oil Basket
according to bids
Price
8.10 MMm3/day for Aug/2012
forward
5.22 MMm3/day for Aug/2012
forward1.0 MMm³/day
4.17 MMm3/day until Oct 12
3.67 MMm3/day until Nov 12
According to the bid made by the Auction Winner
New Petrobras Auction Contracts (electronic platform)
Considers the demand presented by the distributors and the maximum in price each one is willing to pay.
1. Distributors insert their order in the system and Petrobras inserts theparameters of volume and price in the system;
2. Information on volume of the orders are visualized by all distributors andthe distributors dispute the volume offered;
3. Every month, three offers may be released by Petrobras: for 1 month, 2months and 3 months of supply.
1999 2011 CAGR (1999 - 2011)
R$ 341mm Net Revenue R$ 4,102mm 23%
1.3 bi m3 Volume 4.8 bi m3 11%
R$ 50mm CAPEX R$ 510mm 21%
2,500 km Network 8,000 km 10%
17 # Municipalities 70 12%
314,034 # Meters 836,222 8%
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Growth since Privatization
Segments
Volume (in million of m3)
CAGR (00-11)
10.1%
+4.9%
1,676
2,243
2,952
3,418
3,812
4,342
4,761
5,0695,253
4,261
4,910 4,835
3,8303,652
5,016
Industrial Segment: Sector Composition
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22.7%
19.1%
14.9%
12.6%
8.9%
7.1%
6.7%
3.9%
2.1%
1.0%
0.7%
0.2%
CHEMICAL / PETROCHEMICAL
CERAMICS
PAPER AND CELLULOSE
METALS / FOUNDRY AND NON FERROUS
GLASS / CRYSTALS
DRINKS / FOOD
AUTOMOTIVE / PNEUMATIC
TEXTILE / LAUNDRY / DRY CLEANING
OTHERS
STEEL SECTOR
PHARMACEUTICAL
ELECTRO / ELECTRONIC
Santos Basin Pre-Salt
CurrentExpansion
Comgás’ Concession Area
Geographic Expansion Indicated in Business Plan
Expansion activities simultaneously progressing in the cities inside the concession area
Targets for 2009-2014 period:
5,000km of network to be established
282km of network renewal
500k+ clients to be connected
15 working fronts simultaneously
1,000 direct employees and more than
4,000 indirect working on the expansion
Aims for excellence in operational safety
and integrity of the distribution network
Extensive field analysis and selection of
the best opportunities considering:
Distance from existing network
Demographic density
Economic profile and propensity for consumption
Perspective of future development
Potential for integration of various market segments
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Residential Segment
Key growth strategy for Comgás:
Geographic expansion, capturing the
existing potential and connecting around
100.000 clients per year
Increase average unit consumption by
optimizing and expanding customer base
High potential market, with growth driven by:
New real estate developments
Gas conversions in built residences
Large customer base with more than 1 million
residential clients
Alternative for LPG and electricity
Description Concession Area Potential(1,2)
(1) Potential to be updated by IBGE Census 2010(2) Concession area potential doesn’t consider organic growth(3) Considered in the plan to capture 100,000 clients per year
Apartments
Houses
already connected to NG
customers to be capturedcostumers not connectedmarket to be studied
(MM of households)
6,2
1,5
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+ 45 thousand new buildings (launches/developments) to be captured(3)
59%13%8%
20%
2%
13%7%
78%
Industrial Segment
Comgás is present in all of the relevant industries in the concession area;
A diversified customer base with more than 1,000 corporate clients;
A multi-use product: from the production of heat and low-pressure steam to more complexprocesses;
Many advantages compared to other fuels:
No storage requirements
Environmental issues
Guarantee of supply
Low operational costs
Growth Strategy:
Maintain a strong consumer base with future growth in line with growth in GDP / industrialproduction
Approach small and medium enterprises (SMEs) to anchor expansion projects
Bring new industrial corporate clients into the concession area
Description
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Natural gas vehicle (NGV) may be used as fuel for both individual and mass transportation;
Stands out for savings and environmental benefits:
Currently, it is more cost competitive than gasoline and ethanol
Strong economic benefit for heavy users
Comgás is currently working with the government to implement public policies that shouldbenefit the sector:
Fiscal incentives (IPVA reduction)
Public transportation policy
Growth Strategy:
Project in development: use of NGV in public transportation and other heavy users
Description
Natural Gas Vehicle (NGV) Segment
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Other Markets
Over 11.1 thousand clients;
Focus on medium and large establishments;
Growth platform integrated with the expansion ofthe residential segment;
New applications have a high developmentpotential:
Emerging market with high consumptionpotential
Structure dedicated in developing nonconventional application development:acclimatization, commercial cogenerationand generation during peak hours
Commercial Thermal Generation and Cogeneration
Thermal Generation:
Demand depends on the level of thermaldispatch (determined by the government)
Back to back gas contracts
Cogeneration:
Industrial strategic decision aimingefficiency and energy security in themedium and long term
Sustainable growth depends on firm gassupply and price visibility vis-a-viselectricity
Market with a high potential development
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Financial and Operational Highlights
45 64 108 103
242
319
427 443 514
368 413
487
201237
690580
236
352
380
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 sep/11 sep/12
Net Income
107 177 347 330
549 668
860 925 1,035
838 928
1,107
600704
1,363 1,182
716
837
900
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 sep/11 sep/12
EBITDA
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Financial Charts (in million of R$)
CAGR (00-11)
24.2%
IFRS
Previous Accountability
CAGR (00-11)
23.7%
EBITDA Net Income
Note: Calculation of CAGR using previous accountability
Sep11-sep12
IFRS +18.1%Prev. Account. +7.9%
Sep11-sep12
IFRS +17.3%Prev. Account. +7.6%
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Highlights: 3rd Quarter of 2012
Residential segment: 90 thousand new households connected since the beginning of the year.
Continuous growth in volume: +10.2% (9M12 x 9M11) and +6.6% (3Q12 x 3Q11);
Investments: R$ 427 million invested in the first nine months of 2012, 17% above the amount
invested during the same period in 2011;
Network extensions: New record of 918 km built since the beginning of the year;
Settlement on the long term funding contract with the Brazilian Economic and Social Development
Bank (BNDES), in the sum amount of R$ 1.1 billion;
Industrial segment: growth of 2.5% compared to the last quarter, demonstrating the upturn of the
volume demanded during the quarter;
Market Announcement on 10/26/2012, informing that ARSESP authorized the transfer of 60.1% of
indirect participation held by BG to Cosan Provence Participações S.A. (company controlled by Cosan
S.A. Indústria e Comércio).
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Markets
Volume per segment (In thousands of m3)Meters per segment
* Thermal Generation not includedNote: UDA’s (Householders)
79.9%
7.1%5.9% 3.7% 2.2% 1.2%
56.6%
3.3% 2.4%
28.4%
9.1%
0.2%
Industrial Cogeneration NGV Residential Commercial Thermal Generation
74.5%
7.0%5.4% 3.9% 2.2%
7.1%
55.2%
4.6% 2.8%
27.6%
8.9%
0.9%
Industrial Cogeneration NGV Residential Commercial Thermal Generation
Volume Margin
Volume x Margin
9M11
9M12
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Note : Figures in IFRS
Financial Performance
In thousand of R$
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Financial Indicators
NOTE: Annualized Indicators (LAJIDA from the last 12 months)
25
528469
264
15329
12
-55
-157-230 -198
-128-5
150 204
360 362
dec-08 mar-09 jun-09 sep-09 dec-09 mar-10 jun-10 sep-10 dec-10 mar-11 jun-11 sep-11 dec-11 mar-12 jun-12 sep-12
Regulatory Current Account Balance Evolution
Balance of Gas Recoverable/ To be Passed On: Cash-Effect
R$
mill
ion
26
D R$ 156 million
generated
D R$ 54 million
generated
DR$ 70
million generated
DR$ 2 million
generated
650
277 146 113 85
205
117
45 74 53
386
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 forward
Local Currency Foreign Currency
Estrutura de EndividamentoDebt Structure
Debt (1) (R$ thousand) Sep 12 Sep 11 Debt Amortization Schedule(1) (R$ million)
Debt Composition: Short Term/ Long Term Debt Composition
(1) Includes Debendetures and Derivatives
(2) EBITDA from the last 12 months
Debt in foreign
currency 100% and
fully hedged.
394
191 187138
386
855Short Term Debt 854,543 420,822
Long Term Debt 1,296,176 1,406,024
Total Debt 2,150,719 1,826,846
(-) Cash 143,048 172,021
(=) Net Debt 2,007,671 1,654,825
EBITDA(2) 820,388 869,022
Net Debt/EBITDA 2.4 1.9
Short Term Debt/Total Debt 0.4 0.2
EIB
25%
BNDES 39%
Others36%
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Sep12 Sep 11
ShortTerm 40%
Long Term 60%
ShortTerm 22%
LongTerm78%
2.5 2.6 2.93.3 3.6 3.9
4.5 4.9 5.15.7
6.26.9
8.0 7.48.9
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Sep 11 Sep 12
100
229200
230276
474426
397 403 406 405
508
427
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 sep/12
Investimentos
Main Projects:NETWORK EXTENSIONS (In thousands of Km):Taubaté
São José dos Campos II
Guarulhos
Mogi das Cruzes
Osasco II
São Bernardo do Campo
New projects:
Taboão da Serra
São João da Boa Vista
Investments
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+ 1,580 KM built in the last 12
months
Over R$ 4.5 billion invested during the period
R$ million
365
+17% 9M11 x 9M12
9M
11
71 municipalities
connected
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Shareholder Remuneration (in millions of R$)
PAY OUT
Previous Accounting
PAY OUT IFRS
NOTE: Payout calculated based on remuneration declared by the Company during the period.
11 1627 25
303 330 334275 268
427 450
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
17% 15%26%
10%
95%77% 75%
53%73%
104%92%
74%
190%
Market Performance (Jan - Sept 2012)
Financial Volume: Preferred Shares (CGAS5)
Ibovespa-4.27%Comgás PNA
4.02%
Comgás ON- 0.45%
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Investor [email protected]/en/investors
ROBERTO LAGE CFO and
IRO
PAULO POLEZITreasury and
Investor Relations
RENATA OLIVAInvestor Relations
Rua Olimpíadas, nº 205, 10º floor - Vila Olímpia - CEP 04551-000 / São Paulo - SP - Brazil
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