2. Agenda
Registration and Breakfast 08:30-09:00 am
Welcome and Agenda Presentation 09:00-09:10 am
Renato Vale – CEO
Scenario of the Toll Road Concession Industry 09:10-09:50 am
Dario Rais Lopes – Secretary of Transportation for the State of São Paulo
José Alexandre N. Resende – General Director of the National Agency for
Land Transportation
Corporate Positioning 09:50-10:20 am
Renato Vale – CEO
Coffee break 10:20-10:40 am
3. Agenda (cont.)
View on Current Businesses 10:40-11:10 am
Italo Roppa – Management Vice-President
New Businesses 11:10-11:40 am
Marcio Batista – Executive Vice-President
Financial Strategy 11:40 am-12:20 pm
Ricardo Froes – CFO and IR Officer
Questions and Answers 12:20-1:00 pm
Closing Lunch 1:00 pm
4. Scenario of the Toll Road Concession Sector
Dario Rais Lopes and José Alexandre N. Resende
8. Corporate Convergence
• Partners share objectives and views;
• There is not an exclusive controlling shareholder;
• Shared management;
• Board members are extremely dedicated and have profound knowledge
of the business;
• The company’s interests are above those of its controlling shareholders;
• Permanent guidance towards building capacity and improving results;
• Participative style – intense dialogue;
9. Transparency
• Because it is a public service concessionaire, CCR is bound to provide
all relevant information to the Regulatory Agencies, which publicly
disseminate it;
• Because its long term debt is funded by multilateral institutions (IFC and
BID) and BNDES, in the Project Finance model, the concessionaires are
constantly under auditing from these institutions
• All information will are treated with great transparency:
Financial Statements reconciled to meet US GAAP requirements;
10. Novo Mercado
• CCR made its IPO as a Novo Mercado company:
Respect for minority shareholders’ rights
All shares are common;
Tag Along.
Information transparency;
Responsible accountability;
Transparency towards stakeholders.
11. Novo Mercado (cont.)
• Direct disclosure of all relevant facts;
Open Conference Calls;
Publications;
Providing requested information:
to Minority Shareholders;
to Market Analysts;
to the Press;
Periodic non-deal road shows in Brazil and abroad;
Personalized visits to the main minority shareholders;
Site on the internet with updated information.
12. Corporate Governance
• Creation of CCR Center for Corporate Governance with Fundação Dom
Cabral
• Discussion of CCR Governance Case in the academic environment
13. Governance Components
• Board of Directors
Defines strategic guidelines and general objectives;
Follows the Company’s performance and results;
Sends issues to the Committees;
Makes decisions requested by the Executive Officers;
Proposes initiatives to Executive Officers.
14. Governance Components (cont.)
• Committees
Each committee has a specific scope;
They do not take executive actions;
They make a profound study of the matters within
their scope;
They issue opinions for the decisions of the Board
of Directors.
• Executive Officers
Manages the Company;
Proposes decisions to the Board of Directors;
Maintains the Board of Directors informed.
16. Social Responsibility
EDUCATION
Instituto Caminhos para Vida
• “Road of Life Institute”
Estrada para a Cidadania
• “Road to Citizenship”
Sou 10 no Trânsito
•“ I am a “A” grade driver”
Health
VidaBAn – “BAnLife”
SorrisoBAn “BAnSmile”
Rodopac
ENVIRONMENT
Saúde do Caminhoneiro -
“Truckers Health” Environment
Parto Humanizado protection projects
“Humanized Delivery”
17. Main Highlights
• First company to be listed at Novo Mercado
• Gross Revenues (LTM) ~ R$ 2 billion
• Market value (11/16/2005): ~R$ 6.3 billion
• Roads extension: 1,452 km
• Total daily users: > 1.5 million
• Capital expenditures + conservation expenses since the beginning of the
concession:
R$ 7.9 billion (base value 2005)
18. CCR System Business
To make possible investment solutions and services in
Roads Infrastructure, contributing for the social-economic
development
19. Corporate Strategy
Focus: Growth, profitability and liquidity
• To be a key player in the toll roads concession market in Latin America,
extending this role to the whole continent
• To emphasize correlated businesses that brings advantages and
significantly contributes for the CCR’s MVA, without compromising its focus
on its core business: toll roads concessions.
• To make CCR shares known in the Brazilian and international capital
markets through its solid and wide track record of growth, profitability,
dividends payment and to be recognized by the quality of managing and
services rendered.
20. Business Strategy
Focus: Quality Relationship
• To be distinguished among the main audiences by the
competence of our institutional relationship.
21. Phase 1 Phase 2 Phase 3
2005…
CCR Historical
2004 / 2005
Evolution 2003
•New
2002 Aprimora-
New Public Chalenges
Novos
mento
2001 Offering and Desafios
Permanente
New
Novo ViaOeste
2000 Management
Posicionamento Acquisition
• to effect
growth
IPO de Gestão
Positioning • Oferta • Efetivar
1999 IPO and
e Pública • New
Crescimento
1998 Re-
Reorganiza-
Reorganiza --
Reorganiza- Planej.
strategic
Sócio
Sócio
Strategic organization integrated plan • Imp. Modelo • Iniciar Novo
positioning
Seeking for estratégico ção Integrado Gestão Ciclo de
Busca sócio estratégico
Busca sócio partner Planejamento
strategic Growth Project • Consolidação
estratégico
estratégico Proj. Crescer
Início das
Início das partner Crescer -
Startup Ousar
Def. inicial
Def.. inicial atividades
atividades PDE
Startup
operações
operações
Definition “Venture”
Proj. Ousar
Project
Evolução natural na estrutura organizacional e na governança structure
Natural evolution of corporate governance and organizational
Source: CCR
22. New Strategic Positioning
• New CCR evolution phase imposes growth
challenges towards 4 strategic paths:
value creation in the current portfolio;
value creation from new concessions in Brazil and
new opportunities in existing contracts;
value creation in operations abroad
value creation from related businesses
23. Renato Vale
Strategic Management CEO
Vice – President
Officer (*)
Marcio Batista
Marketing and Institutional
Communication Relations
Vice-Presidentefor
Vice-President de Vice-President
Marcio Batista Desenvolvimento
Business Business Ítalo Roppa
de Negócios
Development (**) Management
New Business CFO and IRO Planning and Corporate
Legal
Officer Officer Controlling Development
Officer Officer
Leonardo Vianna
.. Massami Uyeda Ricardo Froes Francisco Mendes Antonio Linhares
Other Businesses STP Engelog Concessionaires Actua
CEO CEO and Officer CEO
Same officer with a double role
(*) working as a co-manager in the business strategic management
Business Unit
(**) Works with focus and responsibility in the development and conquering of businesses
24. Corporate Positioning: Focus on Growth
• Leader in the toll road concessions industry in Latin America
• Well positioned for a consolidation in the industry
• Organizational structure is prepared for quality growth
• Resilient to economic fluctuations
• Strong cash flow generation
• Committed controlling shareholders
• Strong commitment to corporate governance standards
• Well known in the market
26. CEO
CCR
Business Management Process
Organizational
Leadership
Marketing and Structure
Institutional
Communication Relations
Vice-President
Process
Support Vice-President of Business
Business Management
Development
New CFO and Planning and Corporate
Legal Investor
Businesses Controlling Development
Officer Relations Officer
Officer Officer Officer
Other Businesses STP Engelog Concessionaires Actua
Conquered CEO CEO CEO
Officer
27. Concessionaires
Role in the Business:
• To integrate the many audiences involved in the business, becoming
known by the clients and by all related audiences as the best option
for transportation of people, assets and benefits generated.
Strategy:
• To provide security, comfort, fluidity and orientation by means of
rendering standardized services to our users, as well as additional
services to segments that are sufficiently wide and homogeneous,
guaranteeing a favorable cost/benefit relation
28. CCR Concessionaires
Limeira
Campinas Buzios
Apucarana Sorocaba S. José dos
Campos
Ponta
Grossa
Current Concessions
29. CCR System
Toll Revenues
Concessionaires
3Q05
AutoBAn - 317 km
40.4%
(Apr / 2018)
NovaDutra - 402 km 26.0%
(Feb / 2021)
ViaOeste - 162 km 17.3%
(Apr / 2018)
Rodonorte - 488 km
10.8%
(Dec / 2021)
Current Concessions
Ponte - 23 km
3.8%
(May / 2015)
Via Lagos - 60 km
1.7%
(Nov / 2021)
30. Concessionaires – Relevant Information
• Roads Extension: 1,452 km
• Toll payer vehicles volume: 743,910 vehicle equivalents/day
• Number of users assisted
Medical assistance: 108 assistances/day
Mechanical assistance: 1.150 assistances/day
• Death toll reduction: 50% (1st year x 2004)
• Accidents reductions: 10% (1st year x 2004)
• User satisfaction index (DATAFOLHA): 86% average approval
• Job generation (direct + indirect): 10,440 jobs
• Taxes paid: R$ 81.8 million / year
• Number of bordering cities: 95 cities
• Population in the bordering cities 36.4 million people
• Region GDP (SP, RJ and PR states) 50% of Brazil’s GDP
33. Concessionaires – Increasing value of current contracts
• Reduction of escaping routes
Identify and reduce the number of escaping routes from the toll
plazas
• Increase collecting toll base
Broaden coverage areas, with more toll charging justice
• Incorporation of adjacent sections
Include in contract, sections/closer roads, which if isolated are not
economically viable
34. Concessionaires – Increasing value of current contracts
• Maximize other revenues
Develop and broaden other revenues generation and/or related
projects (e.g. weight control, advertisement spaces in domain
areas)
• To promote traffic
Attract and ease the implementation of traffic generating poles in
strategic position to the concessionaires
• Migration to close/mixed system
Reformulate roads to a closed/mixed toll collecting system,
reducing escapes and maximizing the toll base
35. Engelog and Actua
Business Role
• ENGELOG: Add value to business, creating distinguished road
engineering solutions
• ACTUA: Add value to business, by creating distinguished
administrative services.
36. Engelog and Actua
Strategy
• ENGELOG: Guarantee that services are rendered with standardized quality
and with the best cost/benefit relation for CCR companies
• ACTUA: Guarantee that services are rendered with patronized quality and
with the best cost/benefit relation for CCR companies
37. Engelog and Actua – Growth Drivers
• Management Quality Improvement:
Results optimization
Dissemination of best practices
Concessionaires are able to focus in their own businesses
• Allows more competitiveness
• Ready for growth
38. ENGELOG – Operating Performance
450,000 Contracts 2004 x 2005 – up to 30/September 402,958
(R$ x 1.000 current)
400,000
350,000
300,000
250,000 216,568
2004
200,000 172,672
2005
150,000
89,380 95,186
78,622 85,451
100,000
35,855 37,481
50,000 12,711 12,168
-
-
AutoBan NovaDutra Rodonorte Viaoeste Ponte/Lagos Total
AutoBan Rodonorte Ponte/Lagos
40. Summary – Current Businesses Overview
• Current Porfolio
Great investments made
Track record of good results
Rigorously following all contractual obligations
High user satisfaction levels
Recognition from different audiences
• Potential contract growth
• Potential increase in operation regions
• Growth opportunities in related business (e.g. Advertisement)
42. CCR System
Development and President Process Leadership Organizational
Business Growth Structure
Communication Institutional
and Relations
Marketing
Business Development
Operations Vice- Process
Vice-President President
Support
New CFO and Control and Business
Legal Officer Investor
Businesses Planning Development
Relations Officer
Officer Officer Officer
Other New STP Engelog Concessionaires Actua
Businesses CEO CEO - Officer CEO
43. Strategic Position
BRASIL – Road Concession
• Main Market
Maintain the leadership in road concessions
Maintain high user satisfaction levels
Maintain the recognition from the several audiences of
the benefits generated
• Strategic Attitude
Focus and pro-activity in the development of qualified
contracts
44. Strategic Position
BRASIL – Road Concession
• Main Opportunities
Federal – 2nd Phase – approx. 3,059 Km
Federal. – 3rd Phase – approx. 4,747 Km
State of São Paulo– 2nd Phase (partial) – 495 km
Porto Alegre Metropolitan Pole – 202 km
Secondary Market
• Expansion of the Road Concession Market in Brazil
Urban Concessions:- Large Metropolis
São Paulo’s Rodoanel
Other State Programs
PPP’s
46. CCR Concessionaires – and Federal Program
Programs Extension
(km)
2nd phase - Federal 3,059 CCR’s Current Concessions
3rd phase - Federal 4,747
2nd Phase - Federal
Porto Alegre’s Pole 202
3rd Phase - Federal
Total 8,008
Source: DNER / ARTESP Porto Alegre’s Pole
47. CCR Concessionaires, 2nd phase program
Limeira
Campinas
Sections Programs Extension S. José dos
Campos
SP (km)
Sorocaba
Section 01 Dom Pedro I 262.7
Section 02 A. Senna / C. Pinto 127.5
Section 03 Tamoios e Contornos 104.7
Total 494.9
Source: Transportation Secretary / SP
48. Strategic Position
BRASIL – Related Businesses
• Complementary Market
Expand current expertise in highly attractive correlated business
which complement CCR’s portfolio
Be one of the major players in the market of related businesses
Strategic Attitude
Act as promoter of businesses by developing strategic partnerships
• Main Opportunities
ITV – Technical Vehicle Inspection
TAG Additional Uses
49. Strategic Position
LATIN AMERICA
• Focus (short-term)
Establish strong presence in Chilean and Mexican
markets
• Strategic Attitude
Focus and pro-activity in the development of
opportunities in primary and secondary markets
50. Strategic Position
LATIN AMERICA
• Main Opportunities
Chile:
Country with the greatest economic stability in Latin America
Regulatory milestone and favorable government position - sharing
risks and results
EBITDA margins among 60% and 70% in road concessions
Urban integrated concessions with 100% automatic toll collection.
Traffic Law makes possible to implement the automatic toll
collection
51. Strategic Position
Chile (cont)
Average GDP growth in the last 14 years = 6%, outlook for 5% growth for
the next 5 years;
Cargo transportation: 83% per road
Fleet growth (+/- 80% of GDP in the last 15 years).
Inflation under control, with average interest rate of 5% per year
One of the 4 investment grade countries in the Americas
Risk sharing / results
Minimum revenue garanteed
Superior revenue
Variable term, preserving revenue’s NPV
52. Strategic Position
LATIN AMERICA
• Main Opportunities
Mexico:
Potencial to increase private concession penetration beyond the
current 10%
PPS
Reprivatization of the concessions operated by public companies
would represent annual revenues of US$2 billion
One of the 4 investment grade countries in the Americas
53. Original Program’s Major Problems
Main Points Consequences
•Shorter concession period • High user rates, leading to the use
Bidding as a selection criterion of the toll-free via
Process • Very optmistic traffic estimates
•Little technical rigor in of the grantor
the definition of the
executive project and
• Construction cost higher than the
estimates
license obtainment
• Delay in the acquisition of the road’s
rights and environmental licenses The original
compromise the beginning of model had a
operations series of
• Limited technical and • The control mechanisms necessary to technical
Institutional
Ambiente administrative experience guarantee the develoment of 50 and
Environment
institucional of the agencies responsible projects in the short-term were never management
for the program appropriately implemented
problems
• Public agencies with worsened by
defficient personnel •
structure Use of short-term financing subject to the economic
• Low liquidity in the capital economic fluctuations and political
market scenario of the
mid-90’s
• Inflationary pressure • Debt servicing becomes unfeasible
Source: SCT,
Economic
Crise • Sharp increase of the basic • Operating costs beyond what was
World Crisis
econômica interest rate to control planned
Bank, inflation • Disproportionate rate increase
Tem • Strong economic • Traffic much lower than expected
analysis recession
54. New Concessions Program
Main Points
• SCT develops and provides a complete project
Project
Projeto • The project is revised before the bidding and may
incorporate the participants’ comments and suggestions
• SCT establishes an average maximum rate, which will be
Rates
Tarifas updated according to the inflation
• Concessionaires may distribute rates the best possible way
among classes, as long as the average is not higher than the
maximum limit establish
• Criteria to define the winner in the following order The new
Bidding
Critérios de concession
– Lower demand for public funds
criteria
licitação program went
– Lower construction costs
through deep
– Higher risk capital inflow
changes to
• Up to the maximum limit allowed by law: correct the
Term
Duração – Greenfield Projects – maximum of 30 years mistakes made
– Brownfield Projects – maximum of 20 years
Proposals lower
• Technical/ economic issues are solved by a committee of
than 15% of the Conflict
Resolução Experts approved by both parties, in case there is no
base budgets Solving
de conflitos agreement, the parties may appeal to arbitration
Source: SCT, • Since the beginning, projects receive finacing from the federal
CCR checklist government, bank credit and risk capital
Financing
Financia-
and team analysis mento – Minimum risk inflow of 25% of the total investment
55. Strategic Position
NORTH AMERICA
• Focus (medium term)
Analyze the potential and attractiveness of USA and
Canadian markets
• Strategic Attitude
Development of opportunities in primary and
secondary markets
56. Strategic Position
NORTH AMERICA
• Recent Examples
USA:
Extensive road network and beginning of a trend towards private
concessions, for example:
Trans Texas Highway may represent an investment of more than
US$ 130 billion in a 30-year period
Chicago Skyway – privatization of the existing highway – winning
offer US$ 1.8 billion
Canada:
Government trend towards expanding PPP projects, benefitting the
public tender of road concessions
ETR-407
57. Summary – New Businesses
• Focus on markets with high qualified growth potential:
Brazil:
Toll Roads Concessions
Related Businesses
Chile and Mexico;
Analisys of US and Canadian markets
• Technical, commercial and financial qualification;
59. Long Term Financial Policy
Goals:
• maximize cash flows to shareholders (NPV dividends);
• Maximize average cost of capital (optimal capital structure);
• guarantee comfortable debt coverage ratios and credit quality
60. Long Term Financial Policy
Main guidelines:
• To finance growth, at first, by means of issuing new debt (Net Debt/EBITDA =
2.5X);
• Re-leveraging of current concessions up to the maximum adequate level
• Acquisitions made outside Brazil are preferably financed through the local
markets (possibility to work in a higher leverage level);
• Dividends policy: minimum payout of 50%
• Hedge policy (up to 1 year protection)
61. New Projects financing
• Modality: Project Finance;
• Structure: 60% debt
• 20% cash flow generation
• 20% capital increase
• Access to new long term credit lines;
• Preferably in R$
• Correlation between costs and revenues
62. Past, Present and Future
Historical consistency in delivering results and cost optimization…
Before Reorganization Before Operating and Financial Reorganization
EBITDA (R$mm)
310
59.71%
259
r owth
DA G 55%
EBIT 224
192% 216 218
55% 54%
55%
170 174
161
151
51% 52%
130 53%
128
122 44%
119
108 107 49% 47% 48% 47%
46% 3.2
46%
2.8
2.7
2.5
2.4
2.3
2.1
1.9 Net Debt / EBITDA
1.7
1.4
1.2 1.2
1.1 1.0
0.8
Interest Coverage 4.7 7.7 8.6
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05
… as well as a lower leverage ratio
63. Consolidated debt as of September 30
R$ 1,467.4 million:
(in R$ MM) 12/31/01 12/31/02 12/31/03 12/31/04 09/30/05
Short Term 251.7 323.4 304.8 228.0 269.8
% Total 17.9% 21.4% 24.9% 20.1% 18.4%
Long Term 1,153.7 1,185.1 919.6 907.8 1,197.6
% Total 82.1% 78.6% 75.1% 79.9% 81.6%
Total Debt 1,405.5 1,508.5 1,224.5 1,135.8 1,467.5
In Reais 822.4 730.8 720.4 834.6 1,181.8
% Total 58.5% 48.4% 58.8% 73.5% 80.5%
In Foreign Currency 583.0 777.7 504.1 301.2 285.6
% Total 41.5% 51.6% 41.2% 26.5% 19.5%
Besides small, its mostly a long term debt
67. Net Income Evolution
A Consequence of efficient management
400 348
300 263
32%
183
200 44%
100
0
(100) 2002
2002 2003 2004 9M05
(200) (120)
... a historical of growing results
68. Investment Analysis - General Overview
0 1 2 3 4 5 6 Analysis 7 8
Project Análise
Context of the
Hurdle Financial do Competiti
Competiv Final
Final
Initial
Preliminary and Scenario Funding impact of Board
Analysis rate and impacto eness
ve Recome
recommen
Decision
Analysis parameters Definition analysis the new dation
evaluation definition Economics do projeto analysis ndation
project in
Analysis na CCR
CCR
Initial Understandi Constructi Project Cost of Calculation Financial Analysis of Management Decision is
analysis and ng of the on of Finance capital and impact the proposal, approved,
elimination project alternate probability estimate, interpretatio study or Competitiv related to revised or
of non- context and scenarios, analysis including n of the inclusion of eness commercial rejected
attractive studies to using shareholder project the project environme conditions
projects define the probability ’s spread indicators, in CCR nt and are taken to
important and are portfolio recommen Board’s
variables are definition of separated dation for decision
carried out the considered improving
strategic competitiv
alignment eness
69. Requirement level can vary according to the risk of each project
Adjustment can be positive
or negative, but never
higher than WACC
Weighted Sharehol Portfolio Hurdle Project or TIR
Cost of ders’ rate sharehol Spread
adjustme
Capital ders’ TIR
(WACC/ Spread ts
Ke)
70. EV/EBITDA*
14.3
• Abertis
14.3
13.8
• Brisa
13.5
10.8
• ASF
10.9
Despite the strong performance
10.2 CCR is traded with lower
• Autostrade multiples, when compared to
9.9 European companies
7.2
• CCR
6.1
• 2005E
* Analysts estimates median: Base date: 10/19/2005 • 2006E
Source: Analyst research, team analysis
71. Concluding
Focus:
Keep on creating value to shareholders
Keeping:
• Tax discipline
• Conservative profile
• Dividend policy
