1 INSTITUTIONAL PRESENTATION Financial and Operational Results June 30, 2012
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INSTITUTIONAL PRESENTATION
Financial and Operational Results
June 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 receivesauthorization to explore the concession of public services ofilumination in São Paulo;
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 governmentand is named Comgás;
1984: Comgás is taken over by Companhia Energética de São Paulo (CESP), the state-owned power 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 ofnatural gas in the country;
2011: Comgás reached customer 1,000,000.
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 (June 2011)
Residential: 1.147 thousand householders
Commercial: 10.9 thousand meters
Industrial: 1.006 meters
Cogeneration : 23 meters
Thermal Generation : 2 plants
NGV: 338 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’ main shareholder is Integral Investments, in which BG Group and Shell Group hold 83.5% and16.5% of shares respectively:
Comgás: uma combinação de competências e princípiosComgás: Combination of Strength and Principles
SHELL BRAZIL HOLDING BV
6.34%
INTEGRAL INVESTMENTS BV
71.91%
SHELL GAS BV
16.49%
BG SÃO PAULO INVESTMENTS BV
83.51%
OTHERS(free float)
21.75%
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Operating in Brazil since 1994:Operations in more than 20
countries. Experience in Exploration & Production, Liquefied Natural Gas,
Transmission & Distribution and Power Generation.
Operating in Brazil since 1913: Experiencie in Distribution of
Petroleum Components, Operations in the Gas Sector, Power &
Exploration and Offshore Production.
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/dayduring the 1st semester in 2012.
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
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 forecast
1S11 1S12
Industrial Residential Commercial NGV Cogeneration Thermal Generation
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Segments
Volume (in million of m3)
CAGR (00-11)
10.1%
22.6%
19.7%
15.2%
9.8%
8.0%
6.7%
7.0%
3.9%
3.8%
2.3%
0.7%
0.2%
CHEMICAL / PETROCHEMICAL
CERAMICS
PAPER AND CELLULOSE
GLASS / CRYSTALS
METALS / FOUNDRY AND NON
FERROUS
DRINKS / FOOD
AUTOMOTIVE / PNEUMATIC
STEEL SECTOR
TEXTILE / LAUNDRY / DRY CLEANING
OTHERS
PHARMACEUTICAL
ELECTRO / ELECTRONIC
+4.8%
1,676
2,243
2,952
3,418
3,812
4,342
4,761
5,0695,253
4,261
4,910 4,835
2,5362,420
5,159
Industrial Segment: Sector Composition
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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Volume (MM/m3)Comgás’ Concession Area
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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Over 45,000 new buildings (launch) 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
More than 10.3 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
107 177
347 330
549 668
860 925
1,035
838 928
1,107
413
387
1,363 1,182
716
525
588
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1S11 1S12
EBITDA
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Financial Graphics (in million of R$)
CAGR (00-11)
23.7%
NOTE: The calculation of the CAGR is based on the use of previous accountability.
IFRS
Previous Accountability
2,375 2,341
1,676
2,243
2,952
3,418
3,812
4,342 4,761
5,069 5,253
4,261
4,910
4,779
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1S12
Volume
IFRS -6%
PreviousAccountability
+12%
(In thousands of m3)
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Financial Graphics (in million of R$)
CAGR (00-11)
24.2%
NOTE: The calculation of the CAGR is based on the use of previous accountability.
IFRS
Previous Accountability
2,375 2,341
1,676
2,243
2,952
3,418
3,812
4,342 4,761
5,069 5,253
4,261
4,910
4,779
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1S12
Volume
107 177
347 330
549 668
860 925
1,035
838 928
1,107
413
387
1,363 1,182
716
525
588
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1S11 1S12
EBITDA
IFRS -32%
PreviousAccountability
+9%
(In thousands of m3)
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Highlights: 1ST Half of 2012
Continuous focus in the residential segment, 60 thousand new households connected since the
beginning of the year;
Investment of R$ 268 million in the first semester, 20% above 1Q11;
New record in network extensions, 555 km built since the beginning of the year;
Tariff readjustments made in December 2011 and May 2012 contributed to recuperate the current
account balance compensating the increase in the cost of gas;
In February 2012, ARSESP established a mechanism to recuperate the graphic account balance
because of the variation of the price of gas and transportation (ARSESP DELIBERATION Nr. 308);
On May 28, 2012, a Relevant Fact was presented informing that a Sale Contract was signed between
Provence Participações S.A. (controlled by Cosan S.A. Indústria e Comércio) and BG Gas SP
Investments BV, for the sale of 60.1% of indirect participation in Comgás, currently held by BG, for
the total cost of R$3.4 billion. The conclusion of the operation is awaiting ARSESP’s approval and
CADE’s analasis.
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Markets
Note: UDA’s (Householders)
Volume per segment (In thousands of m3)
50,732 40,882 48,400 24.1% 4.8% 91,614 81,340 12.6%
27,899 26,196 27,008 6.5% 3.3% 54,095 51,457 5.1%
946,683 934,538 983,661 1.3% -3.8% 1,881,221 1,926,164 -2.3%
89,712 86,034 82,779 4.3% 8.4% 175,746 174,671 0.6%
70,290 67,679 75,124 3.9% -6.4% 137,969 141,766 -2.7%
1,185,316 1,155,329 1,216,972 2.6% -2.6% 2,340,645 2,375,398 -1.5%
13.0 12.7 13.4 12.9 13.1
162,650 32,218 6,325 N/A N/A 194,868 44,643 336.5%
1,347,966 1,187,547 1,223,297 13.5% 10.2% 2,535,513 2,420,041 4.8%
2Q12 1Q12 2Q11∆
2Q12/1Q12
∆
2Q12/2Q111H12 1H11
∆
1S12/1S11
RESIDENTIAL
COMMERCIAL
INDUSTRIAL
COGENERATION
TOTAL
NGV
TOTAL
MMm³/day*
THERMAL GENERATION
Meters per segment
855,988 840,915 790,047 1.8% 8.3%
1,147,384 1,116,688 1,031,610 2.7% 11.2%
10,855 10,595 10,014 2.5% 8.4%
1,006 1,010 998 -0.4% 0.8%
2 2 2 0.0% 0.0%
23 23 24 0.0% -4.2%
338 347 363 -2.6% -6.9%
868,212 852,892 801,448 1.8% 8.3%
jun/11
RESIDENTIAL
NGV
COGENERATION
THERMAL GENERATION
jun/12∆
jun12/mar12
INDUSTRIAL
COMMERCIAL
NUMBER OF UDAs*
∆
jun12/jun11mar/12
* Not considering Thermal Generation
80%
7% 6% 3% 2% 2%
60%
4% 3%
25%
8%
0%
Industrial Cogeneration NGV Residential Commercial Thermal Generation
74%
7% 5% 4% 2%8%
54%
4% 3%
28%
9%
1%
Industrial Cogeneration NGV Residential Commercial Thermal Generation
Volume Margin
23
Volume x Margin
1st Semesterof 2011
1st Semester of 2012
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Financial Performance
In thousand of R$
1,278,522 1,120,356 1,011,469 14.1% 26.4% 2,398,878 1,936,814 23.9%
-1,007,191 -801,415 -705,066 25.7% 42.9% -1,808,606 -1,348,991 34.1%
271,331 318,941 306,403 -14.9% -11.4% 590,272 587,823 0.4%
-101,377 -95,697 -85,203 5.9% 19.0% -197,074 -173,628 13.5%
-1,197 -4,516 -120 -73.5% 897.5% -5,713 -738 674.1%
168,757 218,728 221,080 -22.8% -23.7% 387,485 413,457 -6.3%
-72,153 -67,124 -58,756 7.5% 22.8% -139,277 -116,297 19.8%
-47,632 -39,749 -42,875 19.8% 11.1% -87,381 -74,552 17.2%
48,972 111,855 119,449 -56.2% -59.0% 160,827 222,608 -27.8%
36,733 73,553 92,344 -50.1% -60.2% 110,286 160,587 -31.3%
155,369 53,916 70,201 188.2% 121.3% 209,285 102,060 105.1%
318,874 268,735 294,800 18.7% 8.2% 587,609 525,234 11.9%
140,216 110,077 139,614 27.4% 0.4% 250,293 230,017 8.8%
EBITDA
NET INCOME
Financial Results
OPERATIONAL RESULT
NET INCOME
Normalized by Current Account (unaudited figures)
CURRENT ACCOUNT
Cost of Assets and / or Services Rendered
GROSS BALANCE
Expenditures with Sales, General and Adm.
Other Operational Results
EBITDA
Depreciation and Amortization
1S12 1S11∆
1S12/1S11
NET SALES
2Q12 1Q12 2Q11∆
2Q12/1Q12
∆
2T12/2T11
25
Financial Indicators
11,32 11,02 10,04 11,32 10,04
1,23 2,46 3,08 1,84 2,68
1,53 1,55 1,28 1,53 1,28
3,01 2,73 1,49 3,01 1,49
0,37 0,33 0,24 0,37 0,24
0,56 0,62 0,57 0,56 0,57
21,2% 28,5% 30,3% 24,6% 30,3%
2,9% 6,6% 9,1% 4,6% 8,3%
13,2% 19,5% 21,9% 16,2% 21,3%
3,1% 6,5% 9,4% 4,6% 8,1%
10,8% 22,3% 30,7% 16,3% 26,7%
Normalized by Current Account (unaudited figures)
35,9% 35,4% 40,7% 35,6% 39,1%
11,9% 10,5% 13,8% 11,3% 10,8%
27,1% 25,8% 29,2% 26,5% 24,4%
2Q12 1Q12 2Q11 1H12 1H11
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)
Gross Margin (%)
Net Margin (%)
EBITDA Margin (%)
Return on Assets (%)
Return on Equity (%)
Gross Margin (%)
Net Margin (%)
EBITDA Margin (%)
NOTE:
Annualized Indicators (LAJIDA from the last 12 months).
528469
264
15329
12
-55
-157-230 -198
-128-5
150 204
360
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
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Regulatory Current Account Balance Evolution
Balance of Gas Recoverable/ To be Passed On: Cash-Effect
R$
mill
ion
R$ 156 millions
made
R$ 54 millions
made
R$ 70 millions
made
725
277 212
113 113
78
224
38
64 75 235
2012 2013 2014 2015 2016 2017 forward
Local Currency Foreign Currency
Estrutura de EndividamentoDebt Structure
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Debt (1) (R$ thousand) Jun 2012 Dec 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.
501
250177 188
235
803Short Term Debt 803,540 421,104
Long Term Debt 1,350,925 1,452,957
Total Debt 2,154,465 1,874,061
(-) Cash 79,544 41,110
(=) Net Debt 2,074,921 1,832,951
EBITDA (2) 690,311 716,284
Net Debt/EBITDA 3.0 2.6
Short Term Debt/Total Debt 0.4 0.2
Jun 12 Dec 11
Short Term 37%
LongTerm 63%
Short Term 22%
Long Term 78%
EIB
25%
BNDES 44%
Others 31%
2.5 2.6 2.93.3 3.6 3.9
4.5 4.9 5.15.7
6.26.9
8.0 7.4 8,6
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Jun 11 Jun 12
100
229200
230276
474426
397 403 406 405
509
268
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 jun/12
Investimentos
Main Projects:NETWORK EXTENSIONS (In thousands of Km):Taubaté
São José dos Campos II
Guarulhos
Mogi das Cruzes
Osasco II
Itaquera
New projects:
Diadema I
Tucuruvi
Investments
28
+ 1,200 KM built in the last 12
months
Over R$ 4.2 billion invested during the period
R$ million
223
+20% 2Q11 x 2Q12
1S1
1
29
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%
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Market Performance (June 2012)
Financial Volume: Preferred Shares (CGAS5)
Ibovespa-4.23%
Comgás PNA-0.69%
Comgás ON- 9.41%
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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