Grupo Mexico S.A.B. de C.V. Class B · BMV:GMEXICO/B
Grupo Mexico S.A.B. de C.V. Class B — Investor Presentation (May 2005)
44 slides from Grupo Mexico S.A.B. de C.V. Class B's investor presentation, May 2005
Slide 1: Overview & Highlights
Overview & Highlights May 2005
Slide 2: Forward-looking statements disclaimer
This presentation contains certain statements that are neither reported financial results nor other historical information. These estimates are forward-looking statements within the meaning of the safe-harbor provisions of the Mexican securities laws. These forward-looking estimates are subject to r
Slide 3: Company Profile
Company Profile Grupo Mexico (GMexico) represents the world’s 2nd largest company in terms of copper ore reserves and first among publicly listed companies, the third largest integrated (mine to refined) copper producer, the fourth largest silver producer and the eighth largest integrated zinc pro
Slide 4: Grupo Mexico & Subsidiaries - Corporate Structure
Grupo Mexico & Subsidiaries - Corporate Structure Listed in Mexican Stock Market (BMV) 100% 100% AMC ITM Americas Mining Corporation Infraestructura y Transportes NYSE (USA) Mexico Listed 75.1% 100% 100% 74 % 100 % Lineas Grupo SPCC ASARCO Ferroviarias Ferroviario Intermodal (USA) (USA) Mexico de Me
Slide 5: Grupo Mexico Consolidated Financial Highlights
Grupo Mexico Consolidated Financial Highlights Millions of USD – US GAAP Copper Price (Avg. cts/lb) 72 71 81 129 129 146 2001 2002 2003 2004 2005 B 1stQ05 Revenues $2,492 $2,863 $2,496 $4,206 $4,184 $1,246 AMC (Mining) 81% 76% 77% 85% 84% 87% Ferromex (RR) 19% 24% 23% 15% 16% 13% EBITDA 384 501 684
Slide 6: Grupo Mexico Debt Breakdown
Grupo Mexico Debt Breakdown Millions of USD as of March 31, 2005 – US GAAP $ 8M Banks ($ 20M) Net Debt $175M Bank loan $75M EPA Note 100% 100% $250M Total $172M Net Debt AMC ITM $(14M) Net Debt 99.2% 75.1% 100% 74.0% MM SPCC Asarco Ferromex $480M Banks $200M Banks $250M Notes $ 74M Banks $441M Yanke
Slide 7: AMC Overview (Mining Division)
AMC Overview (Mining Division) AMC AMC ITM 99.15% 75.1% 100% MM SPCC Asarco Grupo México, S.A. de C.V. 6
Slide 8: AMC 2005 Sales Product breakdown
AMC 2005 Sales Product breakdown 1Q05 Sales = $1,091 million Sulfuric Acid Gold 0.5% 0.6% Lead 0.5% Other 0.6% Coal & Coke Zinc 0.2% Silver 4.0 3.1% % • AMC’s EBITDA results in approximately $20 million Molybdenum change per annum, on 25.4% average, for every one cent change in the price Copper of c
Slide 9: 2005 Global Copper Consumption and Relevant Producers
2005 Global Copper Consumption and Relevant Producers Tonnes on an Annual Basis World Consumption: Refined World Supply: 17,285,000TM 17,075,000MT Codelco 10% Phelps Dodge Europe Other 30% 25% 6.1% GMexico 5.5% Nippon Other 54.8% 4.3% 3.7% L.A. 3% 21% 3.6% Norddeutsche 7% 3.5% Mitsubishi Japan China
Slide 10: Global Copper Market Pricing
Global Copper Market Pricing Cash LME Average Copper Pricing, 1998 – 2005 LME, Comex and Shanghai Inventory Evolution USD per lbs. of Copper Thousands of Metric Tones (Mar 2004 to Mar 2005) LME COMEX Shanghai 1.60 1.54 600 1.40 505 1.33 1.29 409 1.20 1.21 400 $/Lb. 318 1.06 1.05 1.04 1.03 1.04 261 1
Slide 11: AMC Copper Contained in Ore Reserves
AMC Copper Contained in Ore Reserves Thousands of Tonnes * – January 1, 2005 at 90 Cents Copper Price 68,983 2nd Place 1st Place 43,762 727 275 883 4,146 3rd 4,252 Place 7,188 38,929 7,541 * “Tonnes” = Metric Tones 18,750 To convert “Tonnes” into Short Tones multiply by 1.10 Cananea Toquepala Cuajon
Slide 12: AMC Exploration Projects and Prospects
AMC Exploration Projects and Prospects 7,036 2,000 126 (Mex.) Copper (Peru) 4,910 Projects (Mex.) (Ktonnes of Cu. Contained) El Arco Los Angangueo Total Chancas 617.3 3,703.8 3,086.5 (Peru) “Gold” • AMC has significant Projects additional projects (000´s of. Oz. (Mex.) and exploration Contained) pot
Slide 13: AMC Copper Mine Production Evolution
AMC Copper Mine Production Evolution Thousands of Metric Tones – Unless otherwise stated 891 917 873 AMC 844 835 Mine Production 203 (MT) 2001 2002 2003 2004 2005B 1Q05 • 82% of AMC’s total production is located in 20% 18% 23% 20% Latin America AR 27% 27% Breakdown 35% 37% 38% 40% 34% 32% by MM Comp
Slide 14: AMC Cash Operating Cost
AMC Cash Operating Cost Cents per pound of Copper Real 1stQuarter 05 35.1 Minera 32.2 Mexico 2004 2005B AMC´s consolidated (0.5) cash operating cost: 41.7 36.1 25.8 SPCC 4.7 26.2 2004 2005B 2004 2005B (33.0) 114.4 112.0 78.2 Asarco 2004 2005B Grupo México, S.A. de C.V. 13
Slide 15: Minera Mexico Mining Operations
Minera Mexico Mining Operations AMC ITM 99.15% MM SPCC Asarco Grupo México, S.A. de C.V. 14
Slide 16: Minera Mexico Overview of Mining Operations
Minera Mexico Overview of Mining Operations Represents the largest mining company in Mexico. Substantial production capacity: 380,000 tonnes per year of copper. 155,000 tonnes per year of zinc. 12 million troy ounces per year of silver. 23 million tonnes of copper contained in ore reserv
Slide 17: Minera Mexico Overview of Operations
Minera Mexico Overview of Operations Mining Units 7 Cananea Complex Caridad Smelters and Complex Refineries 11 Buenavista Headquarters Major Prospects 4 El Arco Rosita Coal Complex Santa Bárbara San Martín Charcas San Luis Potosí Bolaños Corporate Office Mexico City Angangueo Taxco Grupo México, S.A
Slide 18: Minera Mexico Revenues & EBITDA
Minera Mexico Revenues & EBITDA Millions of USD – US GAAP Revenues EBITDA 1,381 1,452 902 724 782 676 699 459 249 97 184 106 2001 2002 2003 2004 2005B 1Q05 • 2005 EBITDA strong growth based on increased revenues from both copper prices and a 9% estimated increase in copper production as well as rela
Slide 19: Minera Mexico-Production, Cash Operating Cost & CAPEX
Minera Mexico-Production, Cash Operating Cost & CAPEX 000´s of MT of Cu. Cash Cost US$/lbs. Mine 348 Production 306 320 291 268 & Cash Operating 0.55 0.49 0.43 Cost 0.34 0.32 81 (0.05) 2001 2002 2003 2004 2005B 1Q05 144 127 123 CAPEX Breakdown (Millions of USD) 49 55 38 2001 2002 2003 2004 2005B 1Q0
Slide 20: Minera Mexico – Investment Projects
Minera Mexico – Investment Projects 2005 Expected Investment Completion Project Description (US $ 000´s) Impact Date New SX/EW Plant in Cananea 50,100 Additional 32.75 Ktpy of Copper Dec. 2006 Coal Mine Expansion 27,900 Additional 700 Ktpy of Coal Apr. 2005 Caridad Smelter 14,600 Increase of 30 Ktpy
Slide 21: Minera Mexico Repayment Schedule
Minera Mexico Repayment Schedule Millions of USD MM Total Net Debt as of March 31, 2005 = $834 million 436 120 120 120 125 46 22 2005 2006 2007 2008 2009 ... 2028 NOTE: Amortization schedule is based on the new $600 million credit facility disbursed on October 29, 2004 Grupo México, S.A. de C.V. 20
Slide 22: SPCC Mining Operations
SPCC Mining Operations AMC ITM 75.1% MM SPCC Asarco Grupo México, S.A. de C.V. 21
Slide 23: SPCC Overview of Mining Operations
SPCC Overview of Mining Operations SPCC at a special meeting held March 28, 2005, approved the acquisition of Minera México. SPCC issued 67.2 million SPCC shares in exchange for MM; thus, “New” SPCC reached a total of 147.4 million NYSE listed shares ( market value of $8.3 billion) of which Americ
Slide 24: SPCC Overview of Mining Operations
SPCC Overview of Mining Operations Mining Units 2 Smelter and Refinery 4 Projects 2 Tantahuatay Lima Los Chancas Corporate Office Lima, Peru Cuajone Toquepala Projects in Chile: •El Salado •Sierra Aspera Complejo •Cartanave Ilo •Esperanza Grupo México, S.A. de C.V. 23
Slide 25: SPCC Revenues & EBITDA
SPCC Revenues & EBITDA Millions of USD – US GAAP Revenues EBITDA 1,716 1,387 1,005 798 658 665 717 486 292 302 166 187 2001 2002 2003 2004 2005B 1Q05 • AMC management has been able to deliver consistent cost savings and increased value to shareholders in SPCC since its acquisition in 1999. 2004 EBIT
Slide 26: SPCC - Production, Cash Operating Cost & CAPEX
SPCC - Production, Cash Operating Cost & CAPEX Millions of USD – US GAAP 000´s of MT of Cu. Cash Cost US$/lbs. Mine 375 397 342 347 357 Production & Cash 0.50 0.46 0.40 Operating 0.27 Cost 81 0.05 (0.33) 2001 2002 2003 2004 2005B 1Q05 312 CAPEX 209 Breakdown 161 (Millions of USD) 125 90 61 2001 2002
Slide 27: SPCC – Investment Projects
SPCC – Investment Projects 2005 Expected Investment Completion Project Description (US $ 000´s) Impact Date Smelter Modernization at Ilo 170,700 Cost reduction and environmental Jan. 2007 compliance Toquepala Leaching, Crushing 28,200 Haulage cost reduction & Jun. 2005 ________ Increased recoveries
Slide 28: SPCC Amortization Schedule
SPCC Amortization Schedule Millions of USD – US GAAP SPCC Net Total Debt as of March 31, 2005 = ($432) million 210 10 10 10 10 10 10 10 10 2005 2006 2007 2008 2009 2010 2011 2012 2013 NOTE: Amortization schedule is based on the new $200 million credit facility disbursed on January 26, 2005 Grupo Méx
Slide 29: Asarco, Inc. Mining Operations
Asarco, Inc. Mining Operations AMC ITM 100% MM SPCC Asarco Grupo México, S.A. de C.V. 28
Slide 30: Asarco, Inc. General Highlights
Asarco, Inc. General Highlights Asarco has and will continue to reasonably respond to its own environmental obligations; however, Asarco's parent company is not directly or indirectly responsible for Asarco’s environmental liabilities (See US District Court of Montana Ruling: CV 01-147-M-DWM) .
Slide 31: Asarco, Inc. Overview of Mining Operations
Asarco, Inc. Overview of Mining Operations 155,000 tonnes of annual copper production; 212,000 tonnes expected copper production for 2005. Three large scale open pit copper mining units. Two SX-EW metallurgic plants. Copper Integrated production. Largest copper refinery in the United State
Slide 32: Asarco Overview of Ongoing Mining Operations
Asarco Overview of Ongoing Mining Operations Globe Roaring River Coy Immel Ray Amarillo Silver Bell Hayden Young Phoenix Mission Mining Units 6 Projects 1 Smelters and refineries 4 Corporate Office Grupo México, S.A. de C.V. 31
Slide 33: Asarco – Revenues & EBITDA
Asarco – Revenues & EBITDA Millions of USD – US GAAP Revenues EBITDA 798 185 660 513 508 359 59 16 17 159 (19) (66) 2001 2002 2003 2004 2005B 1Q05 2004 EBITDA stronger based on increased revenues from both copper prices and a 7% increase in copper production in the 4th quarter. The increase in costs
Slide 34: Asarco - Production, Cash Operating Cost & CAPEX
Asarco - Production, Cash Operating Cost & CAPEX Millions of USD – US GAAP 000´s of MT of Cu. Cash Cost US$/lbs. Mine 1.14 242 1.12 Production 230 212 & 169 Cash 155 0.84 0.78 Operating Cost 0.64 0.79 41 2001 2002 2003 2004 2005B 1Q05 63 51 CAPEX Breakdown (Millions of USD) 23 21 17 17 2001 2002 200
Slide 35: Asarco Amortization Schedule
Asarco Amortization Schedule Millions of USD – US GAAP Asarco Net Total Debt as of March 31, 2005 = $430 million 150 133 100 35 22 1 1 1 1 0 2005 2006 2007 2008 2009 2013 2018 2025 2027 2033 Grupo México, S.A. de C.V. 34
Slide 36: GFM (Ferromex) Rail Operations
GFM (Ferromex) Rail Operations 100% AMC ITM 74.0% Ferromex Grupo México, S.A. de C.V. 35
Slide 37: Ferromex Overview and Highlights
Ferromex Overview and Highlights Mexico’s largest and most diversified railroad covering 71% of its territory. 6,000 mile network, 15,000 cars and, 500 locomotives. Five border gateways with the USA, four seaports in the Pacific and two on the Gulf of Mexico. Strong top line reflects solid b
Slide 38: Ferromex General Overview of Operations
Ferromex General Overview of Operations Border Points Calexico Mexicali El Paso Ports U.P. Cd. Juarez U.P. Naco Nogales U.P. Texas Major Cities BNSF A Prieta Pacific GFM Cananea U.P. BNSF Trackage Nacozari Hermosillo Eagle Pass Rights Chihuahua Piedras Negras Guaymas Monclova Los Escalon Mochis Mont
Slide 39: Ferromex Revenues & EBITDA
Ferromex Revenues & EBITDA Millions of USD – US GAAP Revenues EBITDA 706 619 640 567 588 235 203 215 242 187 159 53 2001 2002 2003 2004 2005B 1Q05 • 2004 EBITDA and Revenues recovered from the 11% peso depreciation during 2003 and from a negative performance of the Export-Import trade activity betwe
Slide 40: Ferromex Operating CAPEX and Amortization Schedule
Ferromex Operating CAPEX and Amortization Schedule Millions of USD – US GAAP Net Total Debt as of March 31, 2005 = $363 million 175 Amortization 87 100 Schedule 56 14 14 2005 2006 2007 2008 2009 2010 108 95 64 66 70 Operating 20 CAPEX 2001 2002 2003 2004 2005B 1Q05 Grupo México, S.A. de C.V. 39
Slide 41: Ferromex Efficiency Gains
Ferromex Efficiency Gains 32,384 33,867 27,568 28,184 Load Volume 23,601 Million Tonnes-Km 7,755 2001 2002 2003 2004 2005B 1Q05 806 830 797 771 776 711 Load Distance Moved per Km (Montly Average) 2001 2002 2003 2004 2005B 1Q05 Grupo México, S.A. de C.V. 40
Slide 42: Conclusions
Conclusions GMexico represents an important copper play in global equity markets. 83% of total production and 85% of total ore reserves of GMexico located in Latin America’s most efficient regions. Highly competitive Production Costs vis-à-vis global competitors. Substantial growth potential
Slide 43: Comparable Public Mining Company Analysis
Comparable Public Mining Company Analysis Price 52 week Equity Enterprise EV/ EBITDA 19-Apr-05 High Low Value Value EBITDA 12mo Chg. Global Copper Companies US$ US$ US$ US$M US$M 2005E (x) 2006E (x) % Freeport 36.19 43.90 27.76 6,478 8,097 4.1 5.9 2.2% Phelps Dodge 92.00 109.12 59.80 8,823 9,275 3.5
Slide 44: Comparable Public Railroad Company Analysis
Comparable Public Railroad Company Analysis Price 52 week Equity Enterprise Enterprise Value / Pr./share Price 52 week Equity Enterprise EV/ EBITDA 19-Apr-05 High Low Value Value EBITDA 12mo Chg. North American Railroads US$ US$ US$ US$M US$M 2005E (x) 2006E (x) % Burlington Northern Santa Fe 48.28
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