2. 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.
4. 4
History
1872: The British company San Paulo Gas receives authorization to explore the concession of public services of
ilumination in São Paulo;
1912: The Canadian company Light assumes ownership;
1959: The company is nationalized and renamed Companhia Paulista de Serviços de Gás (Comgás);
1968: The joint-stock company is incorporated under the control of the city government and 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 of natural gas in the country;
2011: Comgás reached customer 1,000,000;
2012: Cosan aquires 60.1% of Comgás’ social capital from British Gas (BG)
The Company’s Course
5. Regulada ...
5
Comgás’ Highlights
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
Premium asset
located in a strategic
concession area
Substantial growth in
the residential
segment
6. 1999 2012 CAGR
R$ 341mm Net Revenue R$ 5,280mm 26%
1.3 bi m3 Volume 5.3 bi m3 12%
R$ 50mm CAPEX R$ 616mm 23%
2,500 km Network 9,308 km 12%
17 # Municipalities 71 13%
314,034 # Meters 899,789 9%
6
Growth since Privatization
7. Comgás: uma combinação de competências e princípios
7
SHELL BRAZIL
HOLDING BV
6.34%
INTEGRAL
INVESTMENTS BV
11.86%
SHELL GAS BV
100%
OTHER
SHAREHOLDERS
(free float)
21.75%60.05%
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.
8. 177 Cities
27% of Brazil’s GDP
Área de concessão
Segments (December 2012)
Residential: 1,203 thousand householders
Commercial: 11.3 thousand meters
Industrial: 1,008 meters
Cogeneration : 25 meters
Thermal Generation : 2 plants
NGV: 324 gas stations
Gas Brasiliano
PresidentePresidente
PrudentePrudente
AraçatubaAraçatuba
S.J. RioS.J. RioPretoPreto
MaríliaMarília
BauruBauru
CentralCentral
(Araraquara)(Araraquara)
RibeirãoRibeirãoPretoPreto
FrancaFrancaBarretosBarretos
Natural Gas
SPS
RegistroRegistro
SorocabaSorocaba 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. 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
10. 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
11. 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
13. Fornecimento de Gás Natural: CONTRATOS
13
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
Contracts TCQ Firm Contract Auction Thermoelectric
Contract Models Firm Firm Firm of Short Term Back to Back
Gas Source Bolivian Undetermined
Surplus of PB's contracts with other
distributors / thermal power plants
Undetermined
End of Contract Jun/19 Dec/13 Sep/13 Dec/13
Commodity + Transportation
Fixed Charge +
Variable Charge
Transportation: annual
readjustment according to USA
Inflation: CPI
Fixed Charge: annual readjustment
by IGP-M
Commodity: quarterly correction
based on Oil Basket
+ Exchange Rate
Variable Charge: quarterly
correction based on Oil Basket
2.76 MMm3
/day
PPI + IGPM and exchange
variation according to the
American dollar
DQC
Price
8.10 MMm3
/day 5.22 MMm3
/day according to bids
According to the bid made by the
Auction Winner
14. 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)
14
+ 47 thousand new buildings
(launches/developments) to be captured
Residencial
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
15. 15
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
16. 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
16
Natural Gas Vehicle- NGV
Description
17. 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
17
Commercial
Description
18. 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
18
Cogeneration and Thermal Generation
Description
20. 20
Highlights
Record volume: the total volume distributed was 5,259mm³, 8.8% above that of 2011;
Record investments: R$ 616 million in 2012, in which R$ 189 million were invested during the 4Q2012;
Record residential connections: 115 thousand new households connected during the year;
Record network extension: 1,282 km of network built during the year;
Record revenue: R$ 6,5bi of gross revenue and R$ 5,3bi of net sales during the year;
Extraordinary tariff adjustment: because of the dollar volatility and consequent raise of gas cost, on 11/29
ARSESP authorized new tariffs. Despite the adjustment, the account balance closed the year in R$ 381mm;
Funding: on October 2nd, a long term funding contract was signed with BNDES, of the sum total of R$ 1.1
billion;
ARSESP’s approval: transfer of 60.1% of BG’s participation in Comgás to Provence Participações S.A.
(company controlled by Cosan S.A. Indústria e Comércio);
Incorporation: in December, Provence Participações S.A. was incorporated by Comgás, resulting in the
amount of R$ 844mm recorded as a deferred tax.
Year of 2012
21. Meters
21
Total per Segment
*UDA’s (Householders)
887.162 871.934 824.457 1,7% 7,6%
1.202.805 1.177.761 1.087.705 2,1% 10,6%
11.268 11.106 10.381 1,5% 8,5%
1.008 1.012 1.002 -0,4% 0,6%
2 2 2 0,0% 0,0%
25 23 23 8,7% 8,7%
324 329 357 -1,5% -9,2%
899.789 884.406 836.222 1,74% 7,60%
1.215.432 1.190.233 1.099.470 2,1% 10,5%
4Q12 4Q11
THERMAL GENERATION
INDUSTRIAL
3Q12 4Q12 x 4Q11
RESIDENTIAL
NUMBER OF UDA's*
COMMERCIAL
4Q12 x 3Q12
COGENERATION
AUTOMOTIVE
TOTAL METERS
TOTAL CUSTOMERS