1
INSTITUTIONAL PRESENTATION
Financial and Operational Results
June 30th, 2013
Disclaimer
The statements contained in this report regarding the outlook on business,
estimations on financial and operational results and growth prospects for COMGÁS
are merely estimations and, as such, are based exclusively on management
expectations regarding future events and tendencies, that affect or may affect the
business. These estimations are subject to many risks and uncertainties and are
made considering the information currently available, and depend, substancially on
market conditions, the Brazilian economys performance, the business sector and
international markets, and are therefore subject to change without pior notice.
Because of these uncertainties, the investor should not make any investment
decisions based on these estimations and declarations on future operations.
Company Overview
4
History The Company’s Course– Over 100 years of history
The British company San Paulo Gas receives authorization to
explore the concession of public services of ilumination in São
Paulo;
Cosan aquires 60.1% of Comgás’
social capital from British Gas (BG)
2012
2011
Comgás reached customer
1,000,000;
1996
The company goes public and is traded on the São Paulo Stock Exchange (Bovespa) beginning in 1997;
1959
The company is nationalized and renamed Companhia Paulista de Serviços de Gás (Comgás);
1872
1912 The Canadian company Light assumes ownership;
1999
Privatization: The consortium formed by British Gas and Shell obtain a controlling stake in Comgás;
Comgás is consolidated as Brazil’s largest natural gas distributor responsible for more than 30% of the sales of natural gas in the country;
2010
Regulada ...
5
Comgás’ Highlights
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
Premium asset located in a strategic
concession area
Substantial growth in the residential
segment
314,034
899,789
1999 2012
# Meters
17
71
1999 2012
# Municipalities
2,500
9,308
1999 2012
Network
1.3
5.3
1999 2012
Volume bi m³
341
5,280
1999 2012
Net Revenue R$ mm
6
Growth since Privatization
50
616
1999 2012
CAPEX R$ mm
Comgás: uma combinação de competências e princípios
7
Note: 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 Current Shareholder Structure
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 its shares negotiated in the Stock Exchange, condition which must be maintained during the entire concession period.
SHELL BRAZIL HOLDING BV
6.34%
INTEGRAL
INVESTMENTS BV
11.86%
SHELL GAS BV
100%
OTHER SHAREHOLDERS
(free float)
21.75% 60.05%
177 Cities
27% of Brazil’s GDP
Área de concessão
Segments (June 2013)
Residential: 1,262 thousand householders
Commercial: 11.8 thousand meters
Industrial: 1,012 meters
Cogeneration : 25 meters
Thermal Generation : 2 plants
NGV: 311 gas stations
Gas Brasiliano
Presidente Presidente Prudente Prudente
Araçatuba Araçatuba
S.J. Rio S.J. Rio Preto Preto
Marília Marília Bauru Bauru
Central Central (Araraquara) (Araraquara)
Ribeirão Ribeirão Preto Preto
Franca Franca Barretos Barretos
Natural Gas SPS
Registro Registro
Sorocaba Sorocaba COMGÁS
8
Concession Area Advantages
Pipeline intersection (GASBOL, GASAN, GASPAL)
Short distance to supply (Santos Basin)
High demographic density
Population 29.6 Mi
Homes 9.2 Mi
Vehicles 10.0 Mi
POTENTIAL (approximate data)
Concession Area
9
Note: With the opening trading, in 2011, the users with consumption over 300,000 m3/month are considered potentially free.
Market Customers Residential 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
Regulated Framework Comgás is a Regulated Company
The Concession Agreement forcees tariff reviews every 5 years
10
Maximum Margin Review
•Considering the WACC
over the Regulatory Asset
Base + Investments
•Operational Costs
•Depreciation
•Sales Volume
Maximum Pre-defined Tariffs
(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$/m3 in the 4th
year of the 3rd cycle.
P gas + P transport +
Maximum Margin Average (P0)
= Tariff P0 * (IGPM – X Factor) + K Factor
Tariff review for the 3rd Cycle (2009-2014):
P0 established in 0.3052 R$/m3
Commercialization Margin set at 1.9%
= + +
Tariff Settlement Process
Santos Basin Pre-Salt
Current Expansion
Comgás’ Concession Area
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
11
Business Plan Geographic Expansion
67%
6%
4%
4%
2%17%
60%
2%
28%
8%
2%
2Q12 2Q13
+6%
12
Volume in million of m3
1,348 1,431
423.6 mi R$
1.4 bi m³
Margin
Volume
72,0%
6,8%
5,2%
3,8%
2,1%
10,0%
Industrial Cogeneration NGV Residential Commercial Thermal Generation
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Industrial Segment: Sector Composition
CAGR (00-12)
10.0%
1,676
2,243
2,952
3,418
3,812
4,342
4,761
5,069
4,261
5,253 5,259
4,835 4,910
+8.8%
13
Volume in million of m3
72,0%
6,8%
5,2%
3,8%
2,1%
10,0%
Industrial Cogeneration NGV Residential Commercial Thermal Generation
22.7%
19.0%
14.4%
12.3%
10.1%
7.6%
6.4%
3.4%
2.2%
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
Fornecimento de Gás Natural: CONTRATOS
14
Daily quantity contracted:
approximately 13.3 millions of m³/day, besides auction contracts.
Daily quantity demanded:
approximately 12.9 millions of m³.
Contracts
Natural Gas Supply
Contract TCQ Firm AuctionUTE - Fernando
GasparianCorn GBD (Tambaú)
Model Firm Firme Firme Curto Prazo Back to Back Back to Back Firme
Gas Source Bolivian NationalSurplus of PB's contracts
with other distributors /
thermal power plants
Undetermined Undetermined Undetermined
End of Contract jul/19 dec/13 sep/13 dec/13 mar/23 nov/13
Transportation: anual
readjustment according
to american inflation: CPI
Fixed Charge: anual
readjustment by IGP-M
Commodity: quarterly
correction based on Oil
Basket + Exchange
Rate
Variable Charge:
quarterly correction
based on Oil Basket
Commodity +
Transportation: monthly
correction according to the
American dollar
1.5 MMm³/month
ARSESP OrdinancePrice
Commodity +
Transporte
Fixed Charge + Variable
Charge
According to bid made
by the Auction Winner
PPI + IGPM and
exchange variation
according to the
American dollar
Commodity +
Transportation ( PPI +
exchange variation
according to the American
dollar)
DQC 8.10 MMm³/day 5.22 MMm3/day according to bids 2.76 MMm3/day 0.3 MM m³/day
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
Concession Area Potential(1)
15
+ 47 thousand new buildings (launches/developments) to be captured
Residential Description
Note(1): MM of households
Casas 7.5
Apart. 1.7
31.2%
65.5%
3.3%
87.8%
10.9%
1.3% customers to be captured
market to be studied
already connected to NG
16
Industrial Description
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
complex processes;
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 / industrial
production
Approach small and medium enterprises (SMEs) to anchor expansion projects
Bring new industrial corporate clients into the concession area
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
should benefit the sector:
Fiscal incentives (IPVA reduction)
Public transportation policy
Growth Strategy:
Project in development: use of NGV in public transportation and other heavy users
17
Natural Gas Vehicle- NGV Description
Over 11.1 thousand clients;
Focus on medium and large establishments;
Growth platform integrated with the expansion of the residential segment;
New applications have a high development potential:
Emerging market with high consumption potential
Structure dedicated in developing non conventional application development: acclimatization,
commercial cogeneration and generation during peak hours
18
Commercial Description
Cogeneration:
Industrial strategic decision aiming efficiency and energy security in the medium and
long term
Sustainable growth depends on firm gas supply and price visibility vis-a-vis electricity
Market with a high potential development
Thermal Generation:
Demand depends on the level of thermal dispatch (determined by the government)
Back to back gas contracts
19
Cogeneration and Thermal Generation Description
Financial and Operational Highlights
21
Highlights 2Q13
EBITDA of R$ 380mm during 2Q13, 123% above that of 2Q12, with an impact of R$ 65mm due to the sale of Mooca’s former operational site;
R$ 30mm growth in the current account balance, due to the appreciation of the dollar compared to the real;
10% growth of the total number of clients compared to June 2012;
Growth of 50% in investments compared to 2Q12, totaling R$ 220mm during the quarter;
Construction of 380 km of network extension during the quarter, 30% above that of 2Q12.
Meters
22
Total per Segment
*UDA’s (Unidade Domiciliar Autônoma)
916,418 897,974 855,988 2.1% 7.1%
1,261,587 1,229,713 1,147,384 2.6% 10.0%
11,778 11,435 10,855 3.0% 8.5%
1,012 1,011 1,006 0.1% 0.6%
2 2 2 0.0% 0.0%
25 25 23 0.0% 8.7%
311 318 338 -2.2% -8.0%
929,546 910,765 868,212 2.1% 7.1%
1,274,715 1,242,504 1,159,608 2.6% 9.9%
COMMERCIAL
AUTOMOTIVE
TOTAL METERS
TOTAL CUSTOMERS
INDUSTRIAL
THERMAL GENERATION
COGENERATION
jun/13 mar/13 jun/12
RESIDENTIAL
NUMBER OF UDA's*
jun/13 X mar/13 jun/13 X jun/12
23
Volume per Segment in thousands of m3
*Excluding Thermal Generation
58,729 41,815 50,732 40.4% 15.8% 100,544 91,614 9.7%
30,142 25,793 27,899 16.9% 8.0% 55,935 54,095 3.4%
958,996 928,145 946,683 3.3% 1.3% 1,887,141 1,881,221 0.3%
85,401 82,659 89,712 3.3% -4.8% 168,060 175,746 -4.4%
63,135 59,961 70,290 5.3% -10.2% 123,096 137,969 -10.8%
1,196,403 1,138,373 1,185,316 5.1% 0.9% 2,334,776 2,340,645 -0.25%
13.1 12.6 13.0 12.9 12.9
1,431,346 1,367,015 1,347,966 4.7% 6.2% 2,798,361 2,535,513 10.37%
THERMAL GENERATION
TOTAL
AUTOMOTIVE
TOTAL
MMm³/day
2Q12
228,642 162,650
2Q13 1Q13
234,943
2Q13 x 1Q13 2Q13 x 2Q12
2.8% 44.4%
INDUSTRIAL
COGENERATION
RESIDENTIAL
COMMERCIAL
1S13 1S12 1S13 x 1S12
463,585 194,868 137.9%
170
314
380
2Q12 1Q13 2Q13
140
92
188
2Q12 1Q13 2Q13
319
262
396
2Q12 1Q13 2Q13
38
122
168
2Q12 1Q13 2Q13
21%
123% 342%
+24% +34%
24
EBITDA
in million of R$
Normalized IFRS
Net Income
Financial Performance
24
+51% +104%
+38%
25
Financial Performance in thousand of R$
1,605,652 1,447,744 1,278,522 10.9% 25.6% 3,053,396 2,398,878 27.3%
-1,179,424 -1,032,376 -1,007,191 14.2% 17.1% -2,211,800 -1,808,606 22.3%
426,228 415,368 271,331 2.6% 57.1% 841,596 590,272 42.6%
-106,794 -99,656 -99,929 7.2% 6.9% -206,450 -194,178 6.3%
60,167 -1,358 -1,197 -4530.6% -5126.5% 58,809 -5,713 -1129.4%
379,601 314,354 170,205 20.8% 123.0% 693,955 390,381 77.8%
-81,145 -79,702 -72,153 1.8% 12.5% -160,847 -139,277 15.5%
-44,014 -50,023 -47,632 -12.0% -7.6% -94,037 -87,381 7.6%
254,442 184,629 50,420 37.8% 404.6% 439,071 163,723 168.2%
167,850 121,591 37,689 38.0% 345.4% 289,441 112,198 158.0%
Normalized by Current Account (unaudited figures)
29,377 -46,420 155,369 -163.3% -81.1% -17,043 209,285 -108.1%
396,165 262,013 318,874 51.2% 24.2% 658,179 587,609 12.0%
188,178 91,893 140,216 104.8% 34.2% 280,071 250,293 11.9%
CURRENT ACCOUNT
EBITDA
NET INCOME
Cost of Assets and / or Services Rendered
GROSS REVENUE
Expenditures with Sales, General and Adm.
Other Operational Results
EBITDA
Depreciation and Amortization
Financial Results
OPERATIONAL RESULT
NET SALES
1S13 1S12
NET INCOME
1S13 x 1S122Q13 1Q13 2Q12 2Q13 x 2Q122Q13 x 1Q13
26
Financial Indicators Annualized figures
20.55 19.15 11.32 20.55 11.32
2.80 2.03 0.63 4.83 1.87
0.89 0.99 1.53 0.89 1.53
1.44 1.81 3.05 0.79 1.33
0.38 0.40 0.37 0.38 0.37
0.73 0.68 0.56 0.73 0.56
26.5% 28.7% 21.2% 27.6% 24.6%
23.6% 21.7% 13.3% 22.7% 16.3%
10.5% 8.4% 2.9% 9.5% 4.7%
5.1% 3.9% 1.6% 8.8% 4.7%
13.6% 10.6% 5.6% 23.5% 16.5%
Normalized by Current Account (unaudited figures)
30.9% 27.6% 35.9% 29.3% 35.6%0
27.7% 19.9% 27.1% 24.0% 26.5%0
13.1% 7.0% 11.9% 10.2% 11.3%
2Q13
Return on Equity (%)
Gross Revenue (%)
EBITDA Margin (%)
Net Margin (%)
Equity per share ($)
Earnings per share ($)
Net Debt over Equity (x)
Net Debt over EBITDA (x)
Short Term Debt over Total Debt (x)
Current Ratio (x)
1Q13 2Q12 1S13 1S12
Gross Revenue (%)
EBITDA Margin (%)
Net Margin (%)
Return on Assets (%)
-230-198
-128
-5
150
204
360 362 381
334
364
dec.10 mar.11 jun.11 sep.11 dec.11 mar-12 jun.12 sep.12 dec.12 mar.13 jun.13
27
Current Account in million of R$
(2Q12) = +156 (2Q13) = +30
Debt Structure
709
201 197 20491
214
258
73 103 102184
212
2013 2014 2015 2016 2017 2018 forward
Local Currency Foreign Currency
28
Curto Prazo 35% Longo
Prazo 65%
Curto Prazo 22%
Longo Prazo 78%
in thousands of R$
Debt Amortization Schedule (R$ mm) Debt Composition – Jun/13
*EBITDA considering the last 12 months
Short
Term38%Long Term
62%
EIB
22%
BNDES
42%
Others
36%
274 300 306 275
426
967
Debt jun/13 jun/12
Short Term Debt 967,040 803,541
Long Term Debt 1,581,266 1,350,924
Total Debt 2,548,306 2,154,465
(-) Cash 359,285 79,543
(=) Net Debt 2,189,021 2,074,921
EBITDA(*) 1,268,229 693,207
Net Debt/ EBITDA 1.73 2.99
Short Term Debt / Total Debt 0.38 0.37
Investments in million of R$
29
Network Extension (in thousands of km) Projects Network
Taubaté 44 Km
Osasco 2 31 Km
Hortolândia, Monte Mor & Capivari 30 Km
São João da Boa Vista 25 Km
Piracicaba 19 Km
RETAP (Aço) 16 Km
Rio Claro 9 Km 293
380
555
680
jun/12 jun/13
+30%
2Q 2
Q
147
220
268
394
jun/12 jun/13
+50%
2Q 2
Q
2.6 2.93.3 3.6 3.9
4.54.9 5.1
5.76.2
6.9
8.0
9.3
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
100
229200
230
276
474
426397 403 406 405
510
616
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Investimentos
Main Projects: Network Extension (in thousand of km):
Mogi das Cruzes Taubaté Osasco II Guarulhos
São José dos Campos Itaquera
São Bernardo do Campo Rio Claro
Jabaquara II Hortolândia Campinas II Piracicaba
New Projects:
SJBV / Aguaí Taboão da Serra
Santo André Santos Noroeste
30
71 municipalities
connected
Investments in million of R$ +21%
31
PAY OUT Previous Accountability
PAY OUT IFRS
Shareholder Remuneration in million of R$
Nota: Payout calculated based on remuneration deliberated by the Company during the period
11 1627 25
303330 334
275 268
427450
200
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
17% 15%26%
10%
95%77% 75%
53%
73%
105%92%
38%
74%
190%
55%
32
Market Performance (Jan – Jun 2013)
0
50000
100000
150000
200000
250000
0
20
40
60
80
100
120
Volume CGAS5 IBOV
CGAS5Dec 12 = R$ 58.50Jun 13 = R$ 48.47Var = -17.15%
IBOVDec 12 = 60,952Jun 13 = 47,457Var = -22.14%
Base 100Vol CGAS5 (R$ thousand)
INVESTOR RELATIONS
ri.comgas.com.br
ROBERTO LAGE CFO and
IRO
ANDRÉ SALGUEIRO Investor Relations
Rua Olimpíadas, nº 205, 10º floor - Vila Olímpia - CEP 04551-000 / São Paulo - SP - Brazil 33