Cap S.a. · BCS:CAP
Cap — Investor Presentation (September 2012)
31 slides from Cap's investor presentation, September 2012
Slide 1: September 2012
September 2012
Slide 2: Agenda
Agenda Company overview Global industry update Conclusions 2
Slide 3: Corporate structure
Corporate structure Source: CAP, August 2012 3
Slide 4: Financial evolution
Financial evolution (US$ million) 2007 2008 2009 2010 2011 1H12 Cash 184 379 393 981 883 906 Gross financial debt 623 880 907 1.001 628 647 Net financial debt 439 501 514 20 (255) (259) EBITDA 336 534 128 740 1.184 1.094 Net financial debt / EBITDA 1,31x 0,94x 4,01x 0,03x 0,00x 0,00x Net income 236
Slide 5: Financial performance
Financial performance Sales (US$ million) EBITDA (1) (US$ million) 3.000 1.400 2.787 1.184 1.200 1.094 2.500 1.972 1.994 1.000 2.000 1.583 800 740 1.500 1.375 1.287 600 534 1.000 400 336 500 200 128 0 0 2007 2008 2009 2010 2011 Jun-12 2007 2008 2009 2010 2011 Jun-12 Gross Financial Debt (US$ million
Slide 6: 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, located around the cities of Copiapó, Copiapó Vallenar and La Serena: Magnetite Plant Cities Gua
Slide 7: Shipments and markets
Shipments and markets Shipments Markets 1H2012 14.000 12.008 10% 3% 2% 2% 12.000 11.469 10.145 10.213 10.000 16% 67% 8.000 Th. MT 7.251 6.000 4.000 5.670 2.000 1H12 0 China Chile Japan Bahrein Indonesia USA 2008 2009 2010 2011 2012E 7
Slide 8: 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 9: Development program underway
Development program underway Cerro Negro Norte (greenfield project) • Production: 4.0 million tonnes / Pellet feed • Estimated new production start-up: October 2013 • CAPEX: US$ 880 million Los Colorados (brownfield expansion) • Current production: 5.2 million tonnes / Pellets and pellet feed • Proj
Slide 10: 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 2012 to 18 million MT in 2015 o Current average cash cost per ton
Slide 11: Iron ore cost curve
Iron ore cost curve CMP • Even though iron ore chinese producers are high cost producers, short - term measures applied by its government, such as rebates and tax reductions, have permitted them an unsustainable competitive position due to an artificial shift on the iron ore cost curve 11
Slide 12: 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 million tons of annual liquid steel 50% 47% 55% 47% 37% production capacity 40% 30% 30% o Strong long term commercial relations 20% with customers in Chile 10% 0% 2007 2008 2009 2010 2011
Slide 13: Steel
Steel o Under process of optimizing its steel production capabilities, through a gradual reorientation towards long steels o Demand for long steel in Chile substantially exceeds that for flat steel as the mining and construction industries consolidate their position as the most dynamic sectors in th
Slide 14: Evolution of raw material prices
Evolution of raw material prices Metallurgical Coal 350 300 250 200 US$/Ton 150 100 50 0 Source: CAP, Platts, August 2012 14
Slide 15: Evolution of steel prices
Evolution of steel prices North America Europe Asia Metallics Flats Longs 15
Slide 16: 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 1.250 1.199 1.197 5
Slide 17: 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 2012, following the country’s economic activity o Growth focus in Chile, Peru, Argentina and Brazil. Potential interest in Co
Slide 18: EBITDA by business unit
EBITDA (1) by business unit 100% 97% 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% Iron Steel Steel Processing 18 (1) EBITDA: Gross Margin – S&AE + Depreciation and Amortization, over the last twelve months
Slide 19: Agenda
Agenda Company overview Global industry update Conclusions 19
Slide 20: Factors affecting our businesses
Factors affecting our businesses Source: Rio Tinto
Slide 21: Construction activity in China
Construction activity in China • Construction indicators show a slowdown in real estate investment, after the application for several months, of higher interest rates and bank reserves to reduce the inflation in the chinese economy • Many steel companies are reducing their level of raw material inve
Slide 22: Iron ore price evolution
Iron ore price evolution 200 180 160 140 120 100 90,8 80 Ene-2010 May-2010 Sep-2010 Ene-2011 May-2011 Sep-2011 Ene-2012 May-2012 • The iron ore price evolution shows the effect of the reduction in chinese dynamism, that will revert its trend, likewise occurred in previous economic cycles 22
Slide 23: Medium term factors – Increase in Capex
Medium term factors – Increase in Capex Source: JP Morgan Research o Capex for new capacity has shown a trend in increasing costs 23
Slide 24: Long run – Sustainability of steel consumption growth
Long run – Sustainability of steel consumption growth 24
Slide 25: Long run – Urbanisation in China will continue
Long run – Urbanisation in China will continue Source: Rio Tinto
Slide 26: Long run – Global urbanisation
Long run – Global urbanisation 26
Slide 27: Agenda
Agenda Company overview Global industry update Conclusions 27
Slide 28: Conclusions
Conclusions o Substantial growth in iron ore o Further expansion to 30 – 40 million tons possible through development projects currently under consideration o Optimization in steel production capabilities, through a gradual reorientation towards long steels o CAP group is well placed to benefit from
Slide 29: Debt profile
Debt profile 200 180 171 160 140 US$ million 120 100 100 80 63 67 60 50 40 24 20 0 Banks Bonds US$ million 2007 2008 2009 2010 2011 Jun-12 GFD 623 880 907 1.001 628 647 Cash 184 379 393 981 883 906 NFD 439 502 514 20 (255) (259) EBITDA 336 534 128 740 1.184 1.094 NFD/EBITDA 1,31 0,94 4,01 0,03 - - 2
Slide 30: 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 31: www.cap.cl
www.cap.cl