mpx corporate presentation (july)

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July, 2013

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Page 1: MPX Corporate Presentation (July)

July, 2013

Page 2: MPX Corporate Presentation (July)

The material that follows is a presentation of general background information about MPX Energia S.A. and its subsidiaries (collectively, “MPX” or the

“Company”) as of the date of the presentation. It is information in summary form and does not purport to be complete. No representation or warranty, express

or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of this information.

This presentation may contain certain forward-looking statements and information relating to MPX that reflect the current views and/or expectations of the

Company and its management with respect to its performance, business and future events. Forward looking statements include, without limitation, any

statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like “may”, “plan”, “believe”,

“anticipate”, “expect”, “envisages”, “will likely result”, or any other words or phrases of similar meaning. Such statements are subject to a number of risks,

uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives,

expectations, estimates and intentions expressed in this presentation. In no event, neither the Company, any of its affiliates, directors, officers, agents or

employees nor any of the placement agents shall be liable before any third party (including investors) for any investment or business decision made or action

taken in reliance on the information and statements contained in this presentation or for any consequential, special or similar damages.

This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities.

Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever.

Recipients of this presentation are not to construe the contents of this summary as legal, tax or investment advice and recipients should consult their own

advisors in this regard.

The market and competitive position data, including market forecasts, used throughout this presentation were obtained from internal surveys, market

research, publicly available information and industry publications. Although we have no reason to believe that any of this information or these reports are

inaccurate in any material respect, we have not independently verified the competitive position, market share, market size, market growth or other data

provided by third parties or by industry or other publications. MPX, the placement agents and the underwriters do not make any representation as to the

accuracy of such information.

This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without MPX ’s prior

written consent.

Disclaimer

2

Page 3: MPX Corporate Presentation (July)

Exposure to Brazil’s Growing Energy Demand

1

Page 4: MPX Corporate Presentation (July)

Brazil is highly dependent on hydro generation

Newer hydropower predominantly run-of-the-river, leading to faster depletion of reservoirs

4

Dry season

Southeast Reservoirs

(~70% of total storage capacity)

Source: ANEEL

Brazil’s Generation Capacity: 131 GW

(Breakdown by source - 2012)

68.7%

9.9%

2.2%1.6%1.6%

16.0%

Hydro Gas Coal Nuclear Wind Others Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0%

25%

50%

75%

100%

67% 56%

76%

29%38%

46%54%

62%

Average 2007-2011 2012 2013

Page 5: MPX Corporate Presentation (July)

Water storage capacity has stagnated, leading to

decreased system autonomy

5Source: ONS

Storage Capacity

(Southeast = 70% total capacity)

Autonomy = Storage Capacity / (Load – Thermal Generation)

Storage capacity

stagnation

Current reservoir autonomy ~ 5 months

New thermal plants are necessary to guarantee a reliable power supply

GW/m

onth

Page 6: MPX Corporate Presentation (July)

2013 2014 2015 2016 2017 2018 2019 202060.0

65.0

70.0

75.0

80.0

85.0

90.0

65.2

86.5

64.7

78.1

ENERGY DEMAND

PHYSICAL GUARANTEE_x000d_(with signed PPAs)

GW

avg

Sources: ONS, ANEEL 6

2016-on: new generation required~8 GWavg required until 2020

Economic growth will boost power demand leading to

a supply deficit in 2016Default and delays in greenfield projects might further increase need for new capacity

Page 7: MPX Corporate Presentation (July)

2MPX at a Glance

Page 8: MPX Corporate Presentation (July)

Relevant Sector

Opportunities

Company Operating since 2012

Qualified and committed

Management Robust portfolio of projects

Demand: significant growth in energy

consumption expected in the coming years

Supply: risk of delays in start-up of relevant

projects

Energy Matrix: concentrated

in hydropower

Team: prepared and aligned with the

interests of shareholders

Management: highly-qualified and aligned

with the company’s perpetuation

Thermal projects: to meet the

needs of Brazil

Diversified company: ancillary business

in power Generation and natural Gas E&P.

Steady revenue stream: Tax-advantaged

thermal power plants coming on-line in

2012/13

Onshore gas assets: High

operating margins and fast payback

on investment

8

Steady cash flows and differentiated competitive positioning

A unique investment case in Brazil’s energy market

Page 9: MPX Corporate Presentation (July)

9Note : Annual Payments are indexed to the IPCA inflation index (Figures as of November, 2012)

Capacity(100% of project)

1,756 MW

Annual Capacity Payments(adjusted for ownership %)

R$ 878.2 million

Energy Source Coal Coal Gas – OCGT

Ownership after transaction MPX 50%/EDP 50% 100% MPX 70%/Petra 30%

Total Capacity (MW) 720 360 676

Capacity Payments (R$ MM/year) 567.2 299.8 421.2

Start up May/13 Feb/13 Apr/13

Operating power plants will generate annual revenues of at least R$ 878 million

MPX currently operates over 1.7 GW

PECÉM I PARNAÍBA IITAQUI

Page 10: MPX Corporate Presentation (July)

10

Minimum annual revenues of R$ 620 million will come from assets under construction

Additional 1.1 GW will come on stream in 2013

10

PECÉM II PARNAÍBA IIINova Venécia

PARNAÍBA II

Energy Source Coal Gas – CCGT Gas – OCGT Gas

MPX Stake after transaction 100% 100% MPX 70%/Petra 30% MPX 70%/Petra 30%

Total Capacity (MW) 365 517 176 56

Capacity Payments (R$ MM/year) 269.2 353.1 93.5 54.0

Start up 3Q13 4Q13 4Q13 4Q13

PARNAÍBA IVFree Market

Note : Annual Payments are indexed to the IPCA inflation index (Figures as of November, 2012. Parnaíba IV as of January, 2013 )

Capacity(100% of projetct)

1,114 MW

Annual Capacity Payments(adjusted for ownership %)

R$ 619.6 million

Page 11: MPX Corporate Presentation (July)

11

COAL

Açu Coal: 2.1 GW

Sul + Seival: 1.3 GW

- Integrated to the Seival Mine: Operating

License granted and 152 MM tons in proven

reserves

WIND

Ventos Wind: up to 1.2 GW

- High-quality greenfield assets in one of Brazil’s best wind resource areas

- Capacity: up to 600 MW (321 MW with environmental license)

- Estimated Load Factor: 48% (P50)

- Grid connection 30 km from project location

- All land rights secured

- Option to acquire project’s expansion (+600 MW)

GAS

Parnaíba Expansion: 2.2 GW

- Key competitive advantage through the

integration of natural gas production and

power generation in a tax-advantaged

region

Açu CCGT: 3.3 GW

- Located 150km from natural gas

accumulations discovered in the Campos

Basin at a port with a license to build a

regasification terminal

Maranhão Rio de Janeiro Rio de Janeiro Rio Grande do Sul Rio Grande do Norte

MPX holds a robust portfolio of greenfield assets

Over 9 GW in licensed base-load and wind power generation projects

Page 12: MPX Corporate Presentation (July)

Natural Gas E&P

3

Page 13: MPX Corporate Presentation (July)

Integrated onshore gas fields supply MPX power plants in the

Parnaíba BasinStrong competitive position in gas-fired generation

13

MA

OGX Maranhão BlocksTotal area: 24,500 km²

FAZENDACHICOTE

GAVIÃO BRANCO

GAVIÃO REAL

Parnaíba Power Generation

Discovery Fields

SANTAISABEL

SÃORAIMUNDO

MA

33.3% stake in OGX Maranhão, owner and

operator of 8 onshore gas fields

3 rigs operating simultaneously: 2 focused on

exploration and 1 completion rig on the

production development

MPX Ownership

50,0%

23,3%16,7%

Discovery Fields

GAVIÃO REAL

Beginning of commercial production in Jan/13

Current gas production: 4.1 million m3/day

GAVIÃO BRANCO

Declaration of commerciality presented to ANP

Total estimated volume in place between 0.2

and 0.5 Tcf

50% stake in 4 exploration blocks acquired in

the ANP 11th Auction Round in May, 2013

Page 14: MPX Corporate Presentation (July)

Three new discoveries in the basin:

• Fazenda Chicote accumulation (well OGX-107):

Net pay: 66 m; AOF: 3.2 MM m3/day

• Fazenda Santa Isabel accumulation – Net pay: 24 m

• São Raimundo accumulation – Net pay: 27 m

10 exploratory wells planned for 2013

Limited competition in gas-fueled power generation

Tax-advantaged region can attract industrial investments when gas is available

With attractive opportunities to monetize new discoveriesUnique competitive position in gas-fired generation

Gas Field GTU

Power Generation

14

Page 15: MPX Corporate Presentation (July)

Financial Highlights

4

Page 16: MPX Corporate Presentation (July)

16

Debt Profile

Debt Maturity Profile (R$ million)

Note: Values incorporate principal + capitalized interest + charges and exclude outstanding convertible debentures.

R$ billion Mar/13

Gross Debt (R$ MM) 5.5

Net Debt (R$ MM) 5.1

Average Cost (%) 8.3 

Average Tenure (years) 5.0

Short Term Debt (2013):

R$ 740.1 million refer to outstanding bridge-loans to Parnaíba I & II power plants -

> to be paid-off with draw down from long-term financing.

R$ 204.5 million refer to debt amortization for Pecém II, Itaqui and Parnaíba I

Cash & Cash Equivalents

2013 2014 2015 2016 From 2017 on

364.7

2,342.0

208.8 234.2 239.1

2,435.8

1,498(27%)

3,962(73%)

Working Capital Project Finance

Page 17: MPX Corporate Presentation (July)

Joint-control with E.ON

5

Page 18: MPX Corporate Presentation (July)

EIKE BATISTAFREE FLOAT

Joint-Venture MPX E.ON (JV)

Amapari Energia

Parnaíba (expansion)

Açu TPPs

Ventos Wind

Itaqui TPPPecém II

TPPPecém I

TPP

SeivalCoal Mine

OGX Maranhão

Parnaíba IICCGT

Parnaíba IOCGT

Natural gas exploratory blocks in the

Parnaíba Basin

50% 100% 100% 51%

70% 100% 33% 70%

70%

35%

50%

Supply & Trading

35%

50%

50%

36.2%29.0%34.8%

Sul & SeivalTPPs

Castilla TPP

50% 50%

50% 50%

Tauá Solar

100% 100% 100%

50%

18

MPX current ownership structure

Page 19: MPX Corporate Presentation (July)

Robust pipeline of thermal projects to meet

Brazil’s need for a more reliable electric system

Attractive monetization of natural gas resources

E.ON to join control group further supporting

development of strong portfolio of energy

assets

Experienced management team to execute on

strategic vision

Stronger capital structure and enhanced execution capabilities to develop robust pipeline of licensed greenfield thermo generation projects

Deficit in the demand-supply balance

Energy matrix concentrated in hydropower

Stagnated storage capacity

Reservoirs at levels similar to those of 2001’s

energy rationing

Spot prices (PLD) at historical highs for the last 10

years

Need to increase the base generation capacity

OPPORTUNITIES

INVESTMENT HIGHLIGHTS

19

MPX is well-positioned to capture market opportunities

Page 20: MPX Corporate Presentation (July)

Appendix - Images

6

Page 21: MPX Corporate Presentation (July)

PORTO DO PECÉM I & II TPP

21

Page 22: MPX Corporate Presentation (July)

ITAQUI TPP

22

Page 23: MPX Corporate Presentation (July)

PARNAÍBA I & II TPP

23

Page 24: MPX Corporate Presentation (July)

PARNAÍBA: E&P – NATURAL GAS

24

Page 25: MPX Corporate Presentation (July)

For more information, contact:Investor Relations

+ 55 21 [email protected]