Cap S.A. · BCS:CAP
Cap — BTG Pactual Celfin Southern Cone Andean CEO Conference 2012
33 slides from Cap's conference presentation, May 2012
Slide 1: CAP - BTG Pactual Celfin Capital, May 2012
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Slide 2: Agenda
Agenda Company overview Global industry Financial Business us ess Plan a Conclusions update performance 2
Slide 3: Vertically integrated company
Vertically integrated company o Exports iron ore products, mainly to Asia o Produces P d steel t l for f the th domestic d ti market k t o Processes value‐added steel solutions in Chile, Peru and Argentina o Consolidated figures of: Revenues of US$ 2.79 billion, EBITDA(1) of US$ 1.18 billion and Net
Slide 4: Corporate structure
Corporate structure Mitsubishi Pension Invercap Other Corporation Funds 19,3% 9,4% 31,3% 40,0% 47,32% 52,68% 75,0% 99,9% 25,0% Compañía Minera Compañía Siderúrgica Novacero del Pacífico Huachipato 50,93% 50,93% 11,03% 25,92% Cintac Intasa Iron Ore Mining Steel Production Steel Processing Source: CAP
Slide 5: Iron ore mining operations
Iron ore mining operations (Los Colorados Mine) There are currently three different and Punta Totoralillo Port independent areas of operation in the north Cerro Negro Norte* Desalination Plant* of Chile, Chile located around the cities of Copiapó, Copiapó Copiapó Vallenar and La Serena: Magnetite Pl
Slide 6: Shipments and markets
Shipments and markets Shipments Markets 2011 16.000 12.055 6% 2% 14.000 13% 11 469 11.469 12.000 10.213 64% 10.145 10.000 TTh. MT 8.000 7.251 16% 6.000 4.000 2.000 1Q12 Q 2 450 2.450 China Chile Japan Indonesia USA 0 2008 2009 2010 2011 2012E 6
Slide 7: Resources and reserves of magnetite ore
Resources and reserves of magnetite ore Mine / Deposit Total Mineral Resources (1) Reserves (2) MTM Grade (% Fe) MTM Grade (% Fe) Existing operations Los Colorados (under expansion) + District 425 45,0% 244 43,8% El Romeral 464 28,4% 106 30,5% El Algarrobo 90 49,0% 47 48,3% Hierro Atacama I ‐ Candel
Slide 8: Steel production
Steel production Market share o The leader in Chile’s steel market 70% 65% 58% 66% Earthquake 60% 55% 57% o 1.45 5 million o to tonss o of aannual ua liquid qu d stee steel 50% 47% 55% 47% 37% production capacity 40% 30% 30% o Strongg longg term commercial relations 20% with customers in Chile 10% 0
Slide 9: Steel processing
Steel processing o Creates value‐added solutions for the construction, industry and infrastructure sectors in Chile, Peru and Argentina o Chile is Latin America’s most advanced user of steel in construction o Seeks to promote steel consumption Shipments and prices 1.300 600 1.252 1.239 (E) 1.250 500
Slide 10: EBITDA by business unit
EBITDA (1) by business unit 97% 100% 94% 80% 77% 60% 54% 52% 50% 47% 40% 42% 38% 36% 40% 18% 20% 13% 12% 8% 8% 6% 6% 5% 0% ‐3% 0% 2005 2006 2007 2008 2009 2010 2011 ‐20% CMP CSH SPG 10 (1) EBITDA: Gross Margin – S&AE + Depreciation and Amortization, over the last twelve months
Slide 11: Agenda
Agenda Company overview Global industry Financial Business us ess Plan a Conclusions update performance 11
Slide 12: Areas of concern
Areas of concern Economic Activity in U.S. 12
Slide 13: Iron ore spot and quarterly prices
Iron ore spot and quarterly prices 225 200 Platts IODEX (CFR China) 2T11 175 US$ / TTon (Fines 62% Fe) 3T10 150 1T11 4T10 125 2T10 100 Quarterly Price CFR China 75 50 25 0 Source: Platts, May 2012 13
Slide 14: Projects announced v/s delivered
Projects announced v/s delivered o Increasing requirements for the approval of environmental permits o High cost of infrastructure and longer periods of construction o Strong increase in Capex o High percentage of announced projects delayed 14
Slide 15: Strong increase in Capex
Strong increase in Capex Source: JP Morgan Research o Capex for new capacity has shown a trend in increasing costs 15
Slide 16: More moderate but sustained China's steel consumption growth
More moderate but sustained China’s steel consumption growth 16
Slide 17: Population growth and urbanisation for coming decades
Population growth and urbanisation for coming decades 17
Slide 18: Agenda
Agenda Company overview Global industry Financial Business us ess Plan a Conclusions update performance 18
Slide 19: Financial performance
Financial performance S l (US$ million) Sales illi ) EBITDA (1) (US$ million) illi ) 3.000 2.787 1.400 1.184 1.157 2.500 1.200 1.972 1 994 1.994 1.000 2.000 1.583 800 740 1.500 1.375 600 534 1.000 400 336 593 500 200 128 0 0 2007 2008 2009 2010 2011 1Q12 2007 2008 2009 2010 2011 1Q12 Gross Financial
Slide 20: Financial evolution
Financial evolution (US$ million) 2007 2008 2009 2010 2011 1Q12 Cash 184 379 393 981 883 1 019 1.019 Gross financial debt 623 880 907 1.001 628 629 Net financial debt 439 501 514 20 (255) (389) EBITDA 336 534 128 740 1 184 1.184 1 157 1.157 Net financial debt / EBITDA 1,31x 0,94x 4,01x 0,03x 0,00x 0
Slide 21: CAP and its Chilean peers
CAP and its Chilean peers S l (US$ million) Sales illi ) EBITDA (US$ million) illi ) 25000,0 2500,0 2011 2011 2010 2010 2000,0 20000,0 1500,0 15000,0 60% 1000,0 10000,0 , 500,0 5000,0 40% ,0 ,0 0 COPEC CMPC SQM CAP LAN SK COPEC CMPC SQM CAP LAN SK Net income (US$ million) 1200,0 2011 1000,0 2010 800
Slide 22: CAP and its Chilean peers
CAP and its Chilean peers Gross financial debt (US$ $ million) Cash (US$ $ million) 6000,0 2000,0 2011 2011 1800,0 5000,0 2010 2010 1600,0 , 1400,0 4000,0 1200,0 ‐10% 3000,0 1000,0 800,0 , 2000,0 600,0 ‐37% 400,0 1000,0 200,0 ,0 ,0 COPEC CMPC SQM CAP LAN SK COPEC CMPC SQM CAP LAN SK 4500,0 Net finan
Slide 23: Agenda
Agenda Company overview Global industry Financial Business us ess Plan a Conclusions update performance 23
Slide 24: Development program underway
Development program underway Cerro Negro Norte (greenfield project) • Production: 4.0 million tonnes / Pellet feed • Estimated new production start‐up: 2H 2013 • CAPEX: US$ 798 million Los Colorados (brownfield expansion) • Current production: 5.2 5 2 million tonnes / Pellets and pellet feed • Proje
Slide 25: Iron ore production capacity
Iron ore production capacity Production (Th ton) 20.000 18.007 18.102 18.000 16.960 16.000 14.000 12.878 12.202 12.000 10.000 8.000 6.000 4.000 2.000 0 2012 2013 2014 2015 2016 o Production capacity will increase from 12 million MT in 2010 to 18 million MT in 2015 o Development of a Desalination Pla
Slide 26: Steel
Steel o After overcoming damages produced by the earthquake in February 2010, CAP currently has recovered its production capacity and it is near its historical level of market share o Under process of optimizing its steel production capabilities, through a gradual reorientation towards long steels o
Slide 27: Evolution of raw material prices
US$/Ton 50 0 100 150 200 250 300 350 Source: CAP and The Baltic Exchange, May 2012 Metallurgical Coal 0 2.000 4.000 6.000 8.000 10.000 12.000 1/2/20 007 4/2/20 007 7/2/20 007 Evolution of raw material prices 10/2/20 007 1/2/20 008 4/2/20 008 7/2/20 008 10/2/20 008 1/2/20 009 4/2/20 009 7/2/20 009 10
Slide 28: Evolution of steel prices
Evolution of steel prices 28
Slide 29: Steel processing
Steel processing o Chile is Latin America’s most advanced user of steel in construction o Operating at full capacity in Chile in the last two fiscal years and continuing over the 1Q12, following the country’s economic activity o Growth focus in Chile, Peru, Argentina and Brazil. Potential interest i
Slide 30: Agenda
Agenda Company overview Global industry Financial Business us ess Plan a Conclusions update performance 30
Slide 31: Strong fundamentals
Strong fundamentals o Substantial growth in iron ore o Further h expansion to 30 – 40 million ll tons possible bl through h h development d l projects currently l under consideration o Optimization in steel production capabilities, capabilities through a gradual reorientation towards long steels o C
Slide 32: Forward-looking statements disclaimer
This information material may include certain forward‐looking statements and projections provided by CAP S.A. (the “Company“) with respect to the financial condition, results of operations, cash flows, plans, objectives, future performance, and business of the Company. Any such statements and projec
Slide 33: www.cap.cl
www cap cl www.cap.cl
CAP — BTG Pactual Celfin Southern Cone Andean CEO Conference 2012 on 6ix