Cap S.a. · BCS:CAP
Cap — Celfin Capital Andean Investor Day 2010
35 slides from Cap's conference presentation, Jun 7, 2010
Slide 1: Celfin Capital Andean Investor Day London – New York
Celfin Capital Andean Investor Day London – New York June 7 & 8, 2010
Slide 2: Speakers
Speakers Jaime Charles President and Chief Executive Officer Raul Gamonal Senior Executive Vice President – CFO 2
Slide 3: Company overview, Global environment, Business plan, Conclusions
Company overview Global environment Business plan Conclusions 3
Slide 4: Vertically integrated ferrous metal company
Vertically integrated ferrous metal company • Exports iron ore products, mainly to Asia • Produces steel for the domestic market • Processes value-added steel solutions in Chile, Peru and Argentina Mining Steel Steel processing Production capacity 11.5 million tonnes. 1.45 million tonnes. 400 thousa
Slide 5: Corporate structure
Corporate structure Mitsubishi Corp. Pension Funds Invercap Others 19.3% 9.6% 31.3% 39.8% 75.0% 25.0% Iron Ore Mining Steel Production Steel Processing Following merger of CAP’s and Mitsubishi’s iron ore interest in Chile 5
Slide 6: Iron ore mining
Iron ore mining 6
Slide 7: Areas of operation
Areas of operation Punta Totoralillo Port Three different and independent areas of operations in the north Cerro Negro Norte of Chile, around the cities of La Copiapó Magnetite Plant Serena, Vallenar and Copiapó: ¾ Mines ¾ Processing plants Los Colorados Guacolda II Port ¾ Ports Vallenar ¾ Slurry pi
Slide 8: Resources and reserves
Resources and reserves Mine / Deposit Total Mineral Resources (1) Reserves (2) MTM Grade (% Fe) MTM Grade (% Fe) El Laco 734 49,2% 376 56,7% Hierro Atacama II - Cerro Negro Norte 457 34,6% 176 39,0% Los Colorados (3) 432 44,9% 272 43,6% Hierro Atacama I - Candelaria (4) 344 10,0% --- --- El Romeral
Slide 9: Deliveries and markets
Deliveries and markets Deliveries Markets (2009) ASIA : 85% CHILE : 13% Th. MT OTHERS : 2% 10.145 10.500 Korea 1,5% 8.377 8.500 7.579 7.674 USA 2,0% 7.312 7.251 Chile 13,4% M alaysia 4,3% 6.500 Japan 9,3% 4.500 2.500 500 China 62,0% Indonesia 7,5% 2004 2005 2006 2007 2008 2009 Source: CAP 9
Slide 10: Steel
Steel 10
Slide 11: Steel operations
Steel operations • Chile’s steel market leader • 60% and 68% market share in total and target markets respectively in 2009 • 1.45 million tons of annual liquid steel production capacity • Strong long-term commercial relations with customers in Chile • Vertical integration in iron and limestone provi
Slide 12: Sales of CSH
Sales of CSH Sales of CSH in its Target Market (2009) Total Steel Market CSH Sales (thousands tons sold – market share) (1.52 million tons in 2009) (922 Th. tons in 2009) 2.500 80% 70% 2.000 60% 1.500 50% Th. MT 40% 1.000 30% 20% 500 10% 0 0% CSH Sales (60%) 2004 2005 2006 2007 2008 2009 Constructio
Slide 13: Steel processing
Steel processing 13
Slide 14: Steel processing
Steel processing • Creates value-added solutions for construction, industry and infrastructure sectors in Chile, Peru and Argentina • Its addition to the CAP group seeks to promote steel consumption • Should result in improvements in consolidated returns Deliveries 450 Purchase to CSH 400 350 Thousa
Slide 15: Financial highlights
Financial highlights US$ million Sales EBITDA (1) 2.200 534 1.972 550 2.000 500 1.800 1.583 450 1.600 1.386 400 1.400 336 350 1.200 997 300 255 247 1.000 880 250 800 186 200 166 600 317 150 400 100 200 50 0 0 2005 2006 2007 2008 2009 1Q 10 2005 2006 2007 2008 2009 1Q 10 Net Financial Debt Net Financ
Slide 16: Financial evolution
Financial evolution (US$ million) 2005 2006 2007 2008 2009 1Q 10 Cash 154 242 184 379 387 330 Short Term Debt (2) 136 97 81 111 44 84 Long Term Debt 275 539 543 769 826 792 Total Financial Debt 411 636 623 880 870 875 Net Financial Debt 257 394 439 502 482 545 Net Financial Debt / EBITDA 1,01x 1,60x
Slide 17: EBITDA and debt profile
EBITDA and debt profile EBITDA by business unit 90% CMP CSH SPG 77% 80% 70% 60% 60% 54% 52% 50% 47% 50% 42% 38% 40% 40% 36% 30% 24% 16% 18% 20% 13% 12% 8% 8% 10% 5% 0% 2004 2005 2006 2007 2008 2009 Debt maturity profile 250 Banks Bonds 200 (million of US$) 150 100 50 0 2010 2011 2012 2013 2014 2015
Slide 18: Sales and EBITDA: pre and post Mitsubishi transaction pro-forma
SALES and EBITDA Comparison Pre and Post Mitsubishi transaction (Pro-forma) Sales (US$ million) EBITDA (US$ million) (1) 2.433 800 730 2.500 700 1.972 2.000 1.865 1.670 600 534 1.583 1.386 500 443 1.500 1.248 378 1.125 400 343 336 997 1.000 880 255 272 300 247 186 200 500 100 0 0 2005 2006 2007 2008
Slide 19: Company overview, Global environment, Business plan, Conclusions
Company overview Global environment Business plan Conclusions 19
Slide 20: Megatrends: Tightening supply - demand
Megatrends Tightening supply - demand  Iron ore to remain tight for the next three years (at least) before moving into surplus in 2013 when China’s rate of steel production growth to slow and a number of iron ore projects globally to be in operation Iron ore supply - demand New projects 20 Source:
Slide 21: Megatrends: Projected price evolution
Megatrends Projected price evolution Estimated quarterly Iron Ore contract (Benchmark Fines – US$/Ton) -33% Â Markets have significantly improve its iron ore price forecast to reflect the tightest supply – demand conditions Source: Santander, May 2010. 21
Slide 22: Megatrends: Steel consumption ex-China
Megatrends Steel consumption ex-China World ex- China apparent steel consumption and growth Source: Worldsteel, ISSB, Mysteel and Credit Suisse (April 2010) 22
Slide 23: Megatrends: Growth in urban population
Megatrends Growth in urban population Rising urbanization in developing countries 2,877 494 2,383 1,911 23 Source: Arcelor Mittal, Metal Bulletin Iron Ore Symposium, May 2010.
Slide 24: Megatrends: Steel demand increase in India
Megatrends Steel demand increase in India India finished steel demand (MT) 24 Source: Arcelor Mittal, Metal Bulletin Iron Ore Symposium, May 2010.
Slide 25: Megatrends: Crude steel consumption
Megatrends Crude steel consumption Apparent crude steel consumption (million tonnes) Â Steel consumption forecast continue to grow strongly beyond 2014 in the developing world 25 Source: Arcelor Mittal, Metal Bulletin Iron Ore Symposium, May 2010.
Slide 26: Megatrends: Per capita crude steel consumption
Megatrends Per capita crude steel consumption Crude steel production (kg/capita) Â Chinese steel consumption is following same pattern as developed world followed earlier 26 Source: Arcelor Mittal, Metal Bulletin Iron Ore Symposium, May 2010.
Slide 27: Price evolution of raw materials
Price evolution of raw materials Metallurgical Coal Baltic Dry Index 350 14000 300 12000 (US$ / Tons) 250 10000 200 8000 150 6000 100 4000 50 2000 0 0 10 ) 96 98 00 02 04 06 08 (e 02 2 03 3 04 4 05 5 06 En 6 07 En 7 08 En 8 09 En 9 10 1Q 19 19 20 20 20 20 20 l-0 l-0 l-0 l-0 l-0 l-0 l-0 l-0 10 e- e-
Slide 28: Steel price evolution
Steel price evolution 9 Positive evolution in all markets 9 Metallics with downwards trend Source: CRUSPI (May 2010) 28
Slide 29: Company overview, Global environment, Business plan, Conclusions
Company overview Global environment Business plan Conclusions 29
Slide 30: Mining business development
Mining business development Capex (US$ million) Production (million tons.) 18,9 19,2 16,4 3,0 3,0 266 3,0 255 4,0 4,0 11,6 11,7 10,6 3,0 2,1 2,1 3,0 3,0 1,0 124 2,7 63 5,4 5,5 7,3 7,3 5,3 7,3 111 5 49 164 25 43 18 44 89 83 86 2,6 3,3 3,3 2,5 2,8 34 2,1 13 2010 2011 2012 2013 2014 2010 2011 2012 2013
Slide 31: Steel operation after the earthquake
Steel operation after the earthquake • Work in Chilean reconstruction to reach normal capacity in the primary production area; pier, coke plant, blast furnace and steel shop • Restarting production within June 2010 • CAP’s steel development plan to be defined in 2010 • Association with other steel o
Slide 32: Steel processing business
Steel processing business • Production at full capacity throughout the year, participating in Chile’s recovery efforts after the earthquake 32
Slide 33: Company overview, Global environment, Business plan, Conclusions
Company overview Global environment Business plan Conclusions 33
Slide 34: Conclusions
Conclusions • Strong fundamentals • Substantial margin improvement in iron ore • Doubling of installed capacity in mining • Steel strategy to further strengthen already dominant position in Chile and steel processing potential in the Latin American region 34
Slide 35: www.cap.cl
www.cap.cl 35