Slide 1: Corporate Presentation (Third Quarter 2016 Results)
Corporate Presentation October 2016 (Third Quarter 2016 Results)
Slide 2: Ferreycorp at a glance
Ferreycorp at a glance
Slide 3: Highlights
Highlights FERREYCORP Established in Peru in 1922 90+ years of business, 70+ years of alliance with CAT currently operating 17 companies within 10 countries employing a workforce of +6,662 employees Key facts 60% Caterpillar Market Share Market cap (Sep-2016) $495MM Shareholders +2,500
Slide 4: Corporate History
CORPORATE HISTORY 00’s 10’s International Complementary expansion: CAT and businesses other brands 90’s Organizational (economic sectors, development to take business lines) opportunities arising from large mining 80’s Redefining 2016 business: focus on capital goods 2010 70’s Move operations to 200
Slide 5: Corporate Structure
CORPORATE STRUCTURE Caterpillar dealers Caterpillar dealers and other Other subsidiaries in Peru in Peru businesses in Central America and abroad Guatemala Chile, Colombia , Ecuador El Salvador Belize Nicaragua El Salvador, Honduras Sales as of 3Q16: US$ 851mm (76%) Sales as of 3Q16: US$ 101mm (9%)
Slide 6: Sustainable Business Model
SUSTAINABLE BUSINESS MODEL SALES BY LINE OF BUSINESS US$1.9Bn 2,000 US$1.72Bn 1,800 US$1.67Bn 1,600 1,400 US$1.3Bn US$ Millon 1,200 US$1.1Bn 1,000 800 600 400 Product Support sales 200 10 Year CAGR – 15% - (2005-2015) 2007 2008 2009 2010 2011 2012 2013 2014 2015 As of As of - 3Q15 3Q16 Machinery 9%
Slide 7: Diverse Customer Base
DIVERSE CUSTOMER BASE 53% OF DELIVERIES COME FROM NON-MINING CUSTOMERS SALES BY ECONOMIC SECTORS 2% 2% 3% 2% 3% 1% 3% 3% 3% 3% 2% 2% 11% 10% 12% 36% 38% 3% 4% 3% 49% 1% 2% 4% 24% 26% 20% 14% 14% 2010 As of 3Q2015 As of 3Q2016 Open pit mining Underground mining Construction Government Transport Indus
Slide 8: Key capabilities
Key capabilities
Slide 9: Key Capabilities
KEY CAPABILITIES Long term strategic partnerships Ubiquitous market coverage Unmatched supply chain and logistics capabilities Financial strength and funding sources In-depth market knowledge Innovation and Technology Ethics and compliance, Corporate Governance and Sustainability
Slide 10: Presence in South and Central America Countries Representing Brand Leaders
WITH PRESENCE IN SOUTH AND CENTRAL AMERICA COUNTRIES REPRESENTING BRAND LEADERS
Slide 11: Ubiquitous Market Coverage
UBIQUITOUS MARKET COVERAGE WE AIM TO BE CLOSE TO OUR CUSTOMERS . . . . . . . . . . . . . . . . . . . Wherever customers operate, will be next to . them: nationwide coverage Bringing services, spares, materials wherever the customer needs With world class service level
Slide 12: Unmatched Logistics Capabilities
UNMATCHED LOGISTICS CAPABILITIES ONE OF OUR MAIN COMPETITIVE ADVANTAGES 890,000 m2 170+ US$120M 365 DAYS TO SERVE OUR CUSTOMERS POINTS OF CONTACT INVENTORY OF PARTS 24x7 OPERATIONS • Operating 50+ warehouses, several located in remote • ISO9002 certification locations (eg: mines) • ISO 14000 certifi
Slide 13: Efficient Logistics Capabilities: Supply Chain Management
EFFICIENT LOGISTICS CAPABILITIES SUPPLY CHAIN MANAGEMENT Ferreycorp integrates and administrates all key elements in the logistic chain as a value proposition Vertical integration through complementary businesses: 1) Freight forwarder (Forbis) and 2) Warehouses and terminals (Fargoline) Efficient ha
Slide 14: Sustainability Model
SUSTAINABILITY MODEL STAKEHOLDERS • Principles of Good Corporate Governance • Ferreycorp Association • Respect of Shareholders’ rights • “Operadores de equipo pesado • Transparent and timely reporting Ferreyros” Club • Efficient representation with our Board of Directors • Think Big Program • “Jóven
Slide 15: Corporate Standards: Strong Corporate Governance
CORPORATE STANDARDS STRONG CORPORATE GOVERNANCE • Ferreycorp (FERREYC1) is listed in the Lima Stock Exchange BOARD since 1962. • Ferreycorp is included in the Corporate Governance Index of the Dependent Directors Independent Directors Lima Stock Exchange since its inception in 2008. Oscar Espinosa E
Slide 16: Caterpillar Market Share in Peru
CATERPILLAR MARKET SHARE IN PERU OPEN PIT MINING HEAVY CONSTRUCTION HITACHI SANDVIK P&H OTHERS 1% 1% 4% 17% VOLVO 4% KOMATSU DOOSAN 29% 4% HAMM CATERPILLAR CATERPILLAR 4% 53% 65% KOMATSU 8% JOHN DEERE 10% Include shovels and drills UNDERGROUND MINING GENERAL CONSTRUCTION JOY ATLAS COPCO 2% 14% OTHER
Slide 17: Pervasive Innovation: Quest for Value Creation
PERVASIVE INNOVATION QUEST FOR VALUE CREATION Past innovation projects • Continual improvement of CORE existing value proposition for implemented existing business units. Introduction to CAT 797F Conditions monitoring High-altitude arrangements • Leverage on resources and SAP, CRM, Digital c
Slide 18: Financial Performance
Financial Performance
Slide 19: Track Record of Consistent Financial Performance
TRACK RECORD OF CONSISTENT FINANCIAL PERFORMANCE GROSS MARGIN NET MARGIN 28% 9% 6.8% 26% 24.9% 7% 24.2% 24% 22.9% 23.4% 4.7% 5.0% 4.7% 4.4% 5% 22% 21.1% 21.1% 20.7% 21.2% 3.0% 3.0% 20.3% 3% 1.9% 1.9% 20% 1% 18% As of As of 2009 2010 2011 2012 2013 2014 2015 3Q15 3Q16 16% Avg. Exchange 2009 2010 2011
Slide 20: Investment in Assets: Accounts Receivables
INVESTMENT IN ASSETS 1) ACCOUNTS RECEIVABLES ACCOUNTS RECEIVABLE EVOLUTION BY FACTORING TERM US$ MM US$ MM 110 450 15 100 400 11 350 90 300 11 14 10 14 80 250 28 200 33 408 389 70 150 13 305 292 298 281 245 60 100 185 159 50 50 100 0 2009 2010 2011 2012 2013 2014 2015 3Q15 3Q16 40 77 Short term Long
Slide 21: Investment in Assets: Inventory and Fixed Assets
INVESTMENT IN ASSETS 2) INVENTORY AND FIXED ASSETS INVENTORY EVOLUTION (US$MM) CAPEX EVOLUTION (US$MM) 72 602 584 25 55 523 49 44 458 454 12 31 30 19 405 392 20 19 23 338 21 38 3 2 -8 9 472 451 7 13 15 28 383 5 16 16 26 4 9 11 11 206 359 284 281 8 8 427 -3 -1 -9 266 -20 161 95 130 133 140 121 111 45
Slide 22: Cash Cycle
CASH CYCLE -46 days of accounts payable Targets: Inventory 120 days 3.0x Payable Cash Cycle of 152 days 45 days 72 days of accounts receivable Receivable 45-60 days 126 days of Inventory (2.86x)
Slide 23: Access to Diversified Sources of Financing
ACCESS TO DIVERSIFIED SOURCES OF FINANCING Natural hedge: revenue-debt DIVERSIFIED FUNDING BASE (US$MM) DEBT BY CURRENCY Banks Caterpillar Bonds 20% Soles 3Q16 303 73 160 US$ 536 MM 2% Quetzales 5% 0% Chilean Pesos 71% Colombian Pesos 2015 201 93 295 US$ 588 MM Dollars DEBT BY GROUP OF 2014 222 123
Slide 24: Access to Diversified Sources of Financing
ACCESS TO DIVERSIFIED SOURCES OF FINANCING MATURITY OF FINANCIAL DEBT (US$MM) AVG INTEREST RATE 6.0% 220,000 200,000 189 194 193 5.3% 5.0% 5.0% 4.9% 4.65% 180,000 4.4% 4.4% 4.2% 4.24% 160,000 4.0% 134 140,000 126 120,000 3.0% 100,000 2009 2010 2011 2012 2013 2014 2015 As of 81 3Q16 80,000 60,000 50
Slide 25: Profitability Ratios
PROFITABILITY RATIOS 18% 16% 16.0% 14.1% 14% 14.1% 14.3% 13.5%13.20% 13.1% 12.1% 13.2% 12% 11.8% 11.3% 11.5% 9.9% 10.6% 10% 10.2% 9.8% 8.1% 8.1% 8.4% 7.7% 8% 6.7% 8.4% 7.7% 7.0% 5.9% 7.3% 7.1% 5.8% 5.5% 7.4% 6% 6.4% 6.3% 5.3% 4.6% 4% 4.2% 4.0% 2% 0% 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q
Slide 26: Ferreycorp in the Capital Market
FERREYCORP IN THE CAPITAL MARKET Capital S/. 1’014,326,324 Nº de shares 1’014,326,324 SHAREHOLDERS COMPOSITION AS OF SEPT 2016 Dividend Yield 5.4% Repurchased shares as of Sept 30th 2016 26’938,430 Local pension MAIN SHAREHOLDERS AS OF SEPT 2016 Foreign funds investors 24% Holder % 35% La Positiva V
Slide 27: Dividend Policy: Annual Compliance
DIVIDEND POLICY ANNUAL COMPLIANCE In 1997, the company´s shareholders approved the dividend policy. A modification was approved to assign minimum and maximum ranges. Cash dividends will amount to 5% of the capital or a ceiling equal to 60% of freely available profits. The remainder will be capit
Slide 28: Contacts
Contacts Corporative Finance Manager: Patricia Gastelumendi Treasury Manager: Liliana Montalvo Investor Relations Executive: Elizabeth Tamayo