Cap S.a. · BCS:CAP
Cap — LarrainVial Conferencia Andina 2012
33 slides from Cap's conference presentation, March 2012
Slide 1: LarrainVial Conferencia Andina 2012
LarrainVial Conferencia Andina 2012
Slide 2: Agenda
Agenda Company overview Global industry Financial Business us ess Plan a Conclusion update performance 2
Slide 3: Vertically integrated company
Vertically integrated company o Exports iron ore products, mainly to Asia o Produces P d steell for f the h domestic d i market k 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 Income
Slide 4: Corporate structure
Corporate structure Mitsubishi Pension Invercap Other Corporation Funds 19,3% 9,8% 31,3% 39,6% 47,32% 52,68% 75,0% 99,9% 25,0% Compañía Minera Compañía Siderúrgica Novacero del Pacífico Huachipato 50,93% 50,93% 11,03% 11,03% 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 La Copiapó Serena, Vallenar and Copiapó: Magnetite Plant Citi
Slide 6: Shipments and markets
Shipments and markets Shipments Markets 2011 14.000 6% 2% 12.055 13% 12.000 11.469 10.145 10 213 10.213 64% 10.000 8.000 16% Th. MT 7.251 6.000 4.000 2.000 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 Earthquake o 1.45 5 million o to tonss o of aannual ua liquid qu d stee steel production capacity o Strongg longg term commercial relations with customers in Chile o Vertical integration in iron and limestone provides an advantage in
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 Latinamerica’s most advanced user of steel in construction o Seeks to promote steel consumption Shipments and prices 9
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 Conclusion update performance 11
Slide 12: Areas of concern
Areas of concern Economic Activity in U.S. 12
Slide 13: Higher world steel production
Higher world steel production Source: WSA 13
Slide 14: Chinese steel production
Chinese steel production Source: WSA 14
Slide 15: Iron ore imports
Iron ore imports Source: The Tex Report 15
Slide 16: Iron ore spot and quarterly prices
Iron ore spot and quarterly prices 250 Platts IODEX (CFR China) 200 2T11 3T11 on (Fines 62% Fe) 3T10 1T11 4T10 4T11 150 2T10 US$ / To Quarterly Price CFR China 100 50 0 Source: Platts, March 2012 16
Slide 17: Projects announced v/s delivered
Projects announced v/s delivered o High cost of infrastructure and longer periods of construction o Increasing requirements for the approval of environmental permits o Strong increase in Capex o High percentage of announced projects delayed 17
Slide 18: Strong increase in Capex
Strong increase in Capex Source: JP Morgan Research o It is getting more expensive to add new capacity, even for the big 3 18
Slide 19: Evolution of raw material prices
US$/Ton 50 0 100 150 200 250 300 350 Source: CAP and The Baltic Exchange 2012 Metallurgical Coal 0 2.000 4.000 6.000 8.000 10.000 12.000 1/2/20 007 4/2/20 007 7/2/20 007 Evolution of raw material prices 10/2/20 007 1/2/20 008 4/2/20 008 7/2/20 008 10/2/20 008 1/2/20 009 4/2/20 009 7/2/20 009 10/2/20
Slide 20: Evolution of steel prices
Evolution of steel prices 20
Slide 21: Agenda
Agenda Company overview Global industry Financial Business us ess Plan a Conclusion update performance 21
Slide 22: Financial performance
Financial performance Sales (US$ $ million) EBITDA (1) (US$ million) 1.400 3.000 2.787 1.184 1.200 2.500 1.994 1.000 1.972 2.000 1.583 800 740 1.500 1.375 600 534 1.000 336 400 500 200 128 0 0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Gross Financial Debt Net Financial Debt 1.200 1200 1.001
Slide 23: Financial evolution
Financial evolution (US$ million) 2006 2007 2008 2009 2010 2011 2012E Cash 242 184 379 393 981 883 535 Gross financial debt 636 623 880 907 1.001 628 744 Net financial debt 394 439 501 514 20 (255) 209 EBITDA 247 336 534 128 740 1.184 1.191 Net financial debt / EBITDA 1,60x 1,31x 0,94x 4,01x 0,03x 0
Slide 24: Agenda
Agenda Company overview Global industry Financial Business us ess Plan a Conclusion update performance 24
Slide 25: 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 26: 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 27: Steel
Steel o After overcoming damages produced by the earthquake in February 2010, CAP has recovered its production capacity and its historical level of market share o Strengthen CAP’s predominant position in all segments of the Chilean steel market o Maintaining and optimizing our current steel producti
Slide 28: Steel processing
Steel processing o Chile is Latin America’s most advanced user of steel in construction o Operated at full capacity in Chile during 2010 – 2011 fiscal years, helping the country’s recovery efforts following the earthquake o Growth focus in Chile, Peru, Argentina and Brazil. Potential interest in Col
Slide 29: Agenda
Agenda Company overview Global industry Financial Business us ess Plan a Conclusion update performance 29
Slide 30: 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 Steel strategy to consolidate already predominant position in Chile o CAP group is well placed to benefit from grow
Slide 31: Dividend policy and other distributions to shareholders
Dividend policy and other distributions to shareholders o Since privatization in 1986, CAP has sustained a policy of distributing 50% of its annual net income to shareholders o Additionally, in 1986 and 1994 CAP distributed to them substantial portions of its net worth (excess liquidity and non‐core
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