Cap S.a. · BCS:CAP
Cap — Investor Presentation (September 2013)
33 slides from Cap's investor presentation, Sep 24, 2013
Slide 1: Nevasa, September 24, 2013
N Nevasa September 24, 2013
Slide 2: Corporate structure
Corporate structure Corporate structure 2 Source: CAP, August 2013
Slide 3: Iron ore mining
Iron ore mining Los Colorados Mine, Huasco, Chile 3
Slide 4: Iron ore mining operations
Iron ore mining operations El Laco (3) The mining company has three different Punta Totoralillo Port and independent areas of operation in the Cerro Negro Norte (1) north of Chile, located around the cities of Desalination Plant (1) Copiapó La Serena, Vallenar and Copiapó: Magnetite Plant Cities Los
Slide 5: 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) 986 34,8% 244 46,4% El Romeral 459 28,3% 105 30,2% El Algarrobo 133 45,9% 46 49,3% Hierro Atacama I - Candelaria (3) 2
Slide 6: Development program underway
Development program underway Los Colorados (brownfield expansion) Current production: 5.2 million tonnes / Pellets and pellet feed Projected increase: 2.0 million tonnes / Pellet Feed Currently under start-up process CAPEX: US$ 438 million Cerro Negro Norte (greenfield expansion) Productio
Slide 7: Iron ore production ramp-up
Iron ore production ramp-up Production (Th. tonnes) 20.000 18.000 18.000 17.094 16.214 16.000 14.000 12.433 12.055 12.000 10.000 8.000 6.000 4.000 2.000 0 2012 2013 (p) 2014 (p) 2015 (p) 2016 (p) o In 2012 the average cash cost per ton was US$ 48,76 (FOB) o Financing of existing expansion projects m
Slide 8: Shipments and markets
Shipments and markets Shipments Shipments by markets and products June 2013 14.000 12.246 12.220 12.000 11.469 7% 3% 1% 10.146 10.213 11% 10.000 62% 6.576 7.251 6.579 7.233 8.000 Th. MT 6.472 5.892 6.000 3.563 16% 4.000 5.670 4.987 4.321 4.890 2.000 3.688 3.674 0 2008 2009 2010 2011 2012 2013 (E) Ch
Slide 9: Iron ore spot prices
Iron ore spot prices Iron ore Fines 62% CFR North China (US$/t) 200 180 160 2010 140 2011 2012 2013 120 100 80 Source: CAP 9
Slide 10: Iron ore cash cost curve
Iron ore cash cost curve CAP Source: Global Markets Research, Deutsche Bank, March 2013 10
Slide 11: Seaborne iron ore supply - demand balance
Seaborne iron ore supply - demand balance 68% (381 million MT) of total potential capacity addition comes from the Big 4 (Rio Tinto, Vale, BHP Billiton and Fortescue) New production capacity by company and country Source: Wood Mackenzie and Goldman Sachs Research, March 2013 11
Slide 12: Steel production
Steel production Huachipato, Talcahuano, Chile 12
Slide 13: Growing world steel and China's production
Growing world steel and China’s production In 2012, the World Crude Steel production reached 1.549 MT, a 1.4 % growth over 2011 In 2012, China crude steel production grew 3,2% and the iron ore imports grew 8,3%. Source: WSA, Feb 2013 13
Slide 14: Global steel overcapacity and utilization rates
Global steel overcapacity and utilization rates Steel capacity additions over the last couple of years • Uninterrupted investment in construction of new steel mills, particularly in China Estimated utilization rates by region (2013e) • As a result of the financial crisis started in 2008 and as a con
Slide 15: Evolution of steel prices
Evolution of steel prices 350 300 250 200 CRUspi North America 150 CRUspi Europe 100 CRUspi Asia 50 00 600 500 400 300 CRUspi Flats CRUspi Longs 200 CRUmpi 100 00 Source: www.crugroup.com, August 2013 15
Slide 16: Evolution of key raw materials
Evolution of key raw materials Metallurgical Coal (US$/TM) Baltic Dry Index 450 4500,0 400 4000,0 350 3500,0 300 3000,0 250 2500,0 200 2000,0 150 1500,0 100 1000,0 50 500,0 0 ,0 Mar-13 Jan-11 Mar-11 Jan-12 Mar-12 Jan-13 May-11 May-12 Nov-12 May-13 Sep-10 Nov-10 Jul-11 Sep-11 Nov-11 Jul-12 Sep-12 Jul
Slide 17: Market cap of global steel players
Market cap of global steel players 120 113,0 100 80 US$ billion 60 40 37,9 30,8 26,7 28,1 28,0 25,5 25,2 21,9 20 16,7 15,6 16,1 14,5 11,8 10,9 11,2 5,5 6,8 3,1 5,4 4,8 2,6 0 8/28/2008 8/28/2013 Source: Bloomberg 17
Slide 18: Steel production
Steel production Shipments and prices o The largest steel producer in Chile 2.500 1.117 1.200 o 1.45 million tons of annual liquid steel 1.000 2.000 799 883 811 production capacity 699 755 800 1.500 o Strong long term commercial relations US$/Ton Th. MT 1.161 1.113 1.124 1.149 600 1.000 922 with cus
Slide 19: Steel production strategy
Steel production strategy • 1.45 million tons of liquid steel capacity with two blast furnaces • Reorientation of production strategy to long steel products to cover the demand of construction and mining sectors in Chile • Reorganization of the plant to produce with one blast furnace only, at a capa
Slide 20: Steel processing
Steel processing Strip center, Santiago, Chile 20
Slide 21: Steel processing structure
Steel processing structure 21
Slide 22: 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 1.300 600 1.252 1.250 Sales by Secto
Slide 23: Financial Performance
Financial Performance Bolsa de Santiago, Santiago, Chile 23
Slide 24: Financial evolution
Financial evolution USD Million 2008 2009 2010 2011 2012 1S13 Sales 1.972 1.375 1.994 2.787 2.470 1.058 EBITDA 534 128 740 1.184 764 295 EBITDA Margin 27,1% 9,3% 37,1% 42,5% 30,9% 27,9% Net Income 291 25 590 442 231 82* Cash 379 393 981 883 711 554 Gross Financial debt 880 907 1.001 628 719 780 Net
Slide 25: EBITDA contribution by business
EBITDA contribution by business 100% 97% 94% 94% 80% 77% 60% 54% 52% 50% 47% 42% 40% 40% 38% 36% 20% 18% 13% 12% 8% 8% 6% 8% 5% 6% 0% -2% -3% 0% 2005 2006 2007 2008 2009 2010 2011 2012 -20% Iron Steel Steel Processing 25
Slide 26: Global Overview
Global Overview 26
Slide 27: Areas to watch
Areas to watch European Union stabilization US economic recovery underway China continues growing at a 7.5% pace Middle east under political and social turmoil LATAM growth and development 27
Slide 28: Urbanization in China
Urbanization in China China steel consumption by end use Urban population (% of total) Source: Goldman Sachs Global ECS Research, March 2013 28
Slide 29: Sustained growth of steel consumption
Sustained growth of steel consumption February 2013 29
Slide 30: Potential participation of China in the global economic activity
Potential participation of China in the global economic activity Source: HSBC Asian Economics, March 2013 30
Slide 31: Conclusions
Conclusions Mining Steel Processing o Final stages of its expansion efforts in Los o Main focus is to supply the construction, industry Colorados and Cerro Negro Norte to reach 18 and infrastructure sectors million tons capacity o Chile is Latin America’s most advanced user of o Further expansion to
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