Cap S.a. · BCS:CAP
Cap — Morgan Stanley Latin America Executive Virtual Conference 2023
33 slides from Cap's conference presentation, Jan 10, 2023
Slide 1: CAP S.A. Morgan Stanley Latin America Executive Virtual Conference
CAP S.A. Morgan Stanley Latin America Executive Virtual Conference 10 January 2023
Slide 2: 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 3: Agenda
Agenda 1 Corporate overview 2 Highlights 3 Market background 4 Consolidated financial results 9M22 5 Segments results 9M22 6 ESG update 7 Major short and medium-term strategic projects
Slide 4: Agenda
Agenda 1 Corporate overview 2 Highlights 3 Market background 4 Consolidated financial results 9M22 5 Segments results 9M22 6 ESG update 7 Major short and medium-term strategic projects
Slide 5: CAP history
CAP history 1995 2013 2018 1946 1959 Reorganization of the production Cintac S.A. acquires Calaminón Iron Ore mining operations CAP subscribed a joint Compañía de Acero activities of Compañía Siderúrgica in Lima, Peru, dedicated to the start commissioning, after the venture with Mitsubishi del Pacíf
Slide 6: Ownership and corporate structure
Ownership and corporate structure Mining 75% COMPAÑÍA MINERA DEL PACÍFICO Steel production Free Float Invercap 100% 44.2% 43.3% COMPAÑÍA SIDERÚRGICA HUACHIPATO Steel processing 62% 98% CHILE PERÚ ARGENTINA CINTAC TUPEMESA TUBOS PROMET CALAMINON ARGENTINOS Mitsubishi Infrastructure 12.5% 51% 99% 51%
Slide 7: CAP develops its activities in Chile, Peru and Argentina
CAP develops its activities in Chile, Peru and Argentina ❖ Leading iron and pellets producer on the American Pacific Coast Production of +16 million tons of iron ore and pellet ❖ 4th largest producer of high-grade iron ore in the world Peru Steel Processing Produces ~ 5% of the world's high-grade or
Slide 8: Main business activities
Main business activities Businesses Location 9M22 Consolidated Key Contribution to Group Figures (US$ million) Revenue Operations across 3 valleys in the Revenue: MUS$1,270 Iron ore mining North of Chile: Copiapó, Huasco and Elqui EBITDA: MUS$662 Net income: MUS$343 59% Operations in the South of Ch
Slide 9: Highlights
2. 1 Corporate overview 2 Highlights 3 Market background 4 Consolidated financial results 9M22 5 Segments results 9M22 6 ESG update 7 Major short and medium-term strategic projects
Slide 10: Highlights
Highlights CAP appoints Nicolás Burr as Chief Executive Officer Nicolás brings extensive experience in business development and internationalization strategies, as well as in the implementation of alliances, M&A and productivity improvements. Before joining CAP, he was Manager of the Efficiency and
Slide 11: Market background
3. 1 Corporate overview 2 Highlights 3 Market background 4 Consolidated financial results 9M22 5 Segments results 9M22 6 ESG update 7 Major short and medium-term strategic projects
Slide 12: Iron ore market
Iron ore market Iron ore price (CFR China) Brazil-China freight rate 300 100 60 90 250 50 80 70 200 40 60 US$/ dmt US$/wmt US$/dmt 150 50 30 40 100 20 30 20 50 10 10 0 0 0 Jul-16 Jul-17 Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Oct-16 Oct-17 Oct-18 Oct-19 Oct-20 Apr-21 Oct-21 Oct-22 Apr-16 Apr-17 Apr-18 Ap
Slide 13: Steel market
US$/t 0 200 400 600 800 1.000 1.200 Jan-14 May-14 Sep-14 Metal bulletin Jan-15 May-15 Sep-15 Jan-16 May-16 MB Rebar Turquia (l) Sep-16 Steel Market Jan-17 May-17 2) Cámara chilena de la construcción Source: 1) CRUspi index @ 100 as of April 1994 Sep-17 Jan-18 May-18 Sep-18 Steel Price 1) Jan-19 May-
Slide 14: Consolidated financial results 9M22
4. 1 Corporate overview 2 Highlights 3 Market background 4 Consolidated financial results 9M22 5 Segments results 9M22 6 ESG update 7 Major short and medium-term strategic projects
Slide 15: Main consolidated financial figures 9M22
Main consolidated financial figures 9M22 Revenue (US$ million) EBITDA (US$ million) Net income (US$ million) - 22% - 54% -65% 1.509 601 2.770 2.162 700 208 9M21 9M22 9M21 9M22 9M21 9M22 9M22 revenue, EBITDA and net income lower than in 9M21, mainly due to lower iron ore prices, and lower shipments a
Slide 16: Contribution by segment to 9M22 (US$ million)
Contribution by segment to 9M22 (US$ million) Contribution to 9M22 Revenue -7% 3% 20% 59% 24% Mining Steel production Steel processing Infrastructure Intercompanies • Mining: 32% lower prices, 0,6% lower volumes and 11% higher cash cost per ton • Steel production: 27% higher prices, 19% lower volume
Slide 17: CAP Group cash flow generation
CAP Group cash flow generation (US$ million) • Positive operating cash flow, but lower than last year’s, due to higher working capital needs and tax payments for US$ 473 million. • Negative cash flow from investing activities mainly due to CAPEX disbursement of US$ 299 million. • Negative financing
Slide 18: Financial indebtedness and covenants
Financial indebtedness and covenants Evolution of net financial debt (US$ million) Net Financial Debt to EBITDA ratio (times) 4.5 4.5 4.5 4.5 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 1.333 1.168 1.144 3.1 962 943 933 2.7 907 787 814 786 720 743 718 726 2.1 685 664 658 679 660 623 612 613 557 483 610 480 339
Slide 19: Segments results 9M22
5. 1 Corporate overview 2 Highlights 3 Market background 4 Consolidated financial results 9M22 5 Segments results 9M22 6 ESG update 7 Major short and medium-term strategic projects
Slide 20: Mining
Mining Copiapó Compañía Minera del Pacífico is the leading iron ore and pellets producer on the Copiapó Valley Cerro Negro Norte American Pacific coast, with operations in Atacama and Coquimbo regions, developing products with high iron content: Planta Magnetita • Pellet Feed 66% to 69% Fe content •
Slide 21: Iron ore volumes and product mix
Iron ore volumes and product mix Production (million ton) Shipments (million ton) 16,2 16,3 4,3 4,5 4,4 3,9 4,1 4,1 3,7 3,8 3,6 3,3 3,4 3,1 2,6 2,5 1,8 4,8 4,3 4,6 4,6 5,1 3,9 4,0 4,1 2,6 2,6 2,9 2,6 2,9 1,9 2,2 3Q22 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 2021 2022e 1Q
Slide 22: CMP cash cost evolution
CMP cash cost*evolution (US/t (FOB)) CMP's cash cost under inflationary pressures that have especially affected the price of key inputs, and labor and services costs. Guidance for this year maintained in the range of US$ 47 -52 / ton Cash Cost 75,5 59,2 59,1 52,0 55,2 56,6 52,7 46,5 47-52 51,3 49,5
Slide 23: Steel Production
Steel Production Compañía Siderúgica Huachipato is the leading steel producer in Chile • Supplies ~70% of the conventional grinding media consumed in the mining industry in Chile and Peru • Manufactures long steel products: Huachipato • Bars for mineral grinding media • San Vicente Bay • Reinforcing
Slide 24: Steel production update
Steel production update In 2022, CSH has faced significant internal and external challenges, which have impacted its financial performance. Main causes of lower performance in 2022 HCC Peak Downs Region FOB Australia 800 BF operational Loss of production in periods with good margins 700 670 problem
Slide 25: Steel volumes and product mix
Steel volumes and product mix Production (thousand tons) Shipments (thousand tons) 228 229 208 198 208 215 196 199 200 195 186 189 188 194 181 180 188 186 181 189 180 163 158 144 148 154 131 141 138 124 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q19 1Q19 2Q19 3Q19 1Q
Slide 26: Steel Processing
Steel Processing Steel Processing Group (SPG) is composed of the following companies in SPG promotes the development of the construction and metal- Chile, Peru and Argentina: Cintac, Promet, Calaminon, Tupemesa, mechanic sectors in Chile, Peru and Argentina through different Sehover, Agrow and Tubos
Slide 27: Steel processing update
Steel processing update Cintac’s results in 3Q22 reflected several impacts that were translated into a lower financial performance, deviating from previous years (considering that the results for 2021 were exceptional, mainly due to pandemic-related factors). Main causes of lower performance in 2022
Slide 28: Infrastructure
Infrastructure The infrastructure segment includes port, water and energy assets that provide services to our mining and steel businesses, as well as other customers located in the area of operation. It is currently comprised of: 9M22 9M21 US$73.7 million US$73.8 million Desalination Plant: Cleanair
Slide 29: ESG update
6. 1 Corporate overview 2 Highlights 3 Market background 4 Consolidated financial results 9M22 5 Segments results 9M22 6 ESG update 7 Major short and medium-term strategic projects
Slide 30: ESG update
ESG update Dow Jones Sustainability Index 2022 DJSI – CAP Group score in the las 4 years 73 • The Dow Jones Sustainability Index (DJSI) is an international indicator that evaluates 63 different dimensions of the sustainable performance of listed companies 54 48 • The company achieved its highest sco
Slide 31: Major short and medium-term strategic projects
7. 1 Corporate overview 2 Highlights 3 Market background 4 Consolidated financial results 9M22 5 Segments results 9M22 6 ESG update 7 Major short and medium-term strategic projects
Slide 32: Major short and medium-term strategic projects
Major short and medium-term strategic projects Phase 6 MLC Hydrogen Pilot Plant for iron ore direct reduction and Etapa Sur production of “green steel” using Huachipato’s facilities CAPEX ~US$ 285 million between 2022-2025 Enables production of 1,500 tons of hydrogen Includes the removal of more tha
Slide 33: CAP S.A.
CAP S.A. Morgan Stanley Latin America Executive Virtual Conference 10 January 2023
CAP — Morgan Stanley Latin America Executive Virtual Conference 2023 on 6ix