Slide 1: Corporate Presentation (Second Quarter 2017 Results)
Corporate Presentation August 2017 (Second Quarter 2017 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 +6,000 employees Key facts 60% Caterpillar Market Share Market cap (Jun-2017) ~$566MM Shareholders +2,500
Slide 4: Corporate History
CORPORATE HISTORY 00’s 10’s International Complementary expansion: CAT and businesses other brands 90’s Organizational (economic sectors, development to take business lines) opportunities arising from large mining 80’s Redefining 2016 business: focus on capital goods 2010 70’s Move operations to 200
Slide 5: Corporate Structure
CORPORATE STRUCTURE Caterpillar dealers and Caterpillar dealers and other Other subsidiaries in Peru and allied brands in Peru businesses in Central America abroad Guatemala Chile, Colombia , Ecuador, Perú El Salvador Belice Nicaragua El Salvador, Honduras Sales: US$ 540mm (74%) Sales: US$ 72mm (10%
Slide 6: Strategy: Complete Value Proposition
STRATEGY COMPLETE VALUE PROPOSITION Machinery business Agriculture Services business Automotive Consumables business
Slide 7: Sustainable Business Model: Sales by Line of Business
SUSTAINABLE BUSINESS MODEL SALES BY LINE OF BUSINESS 2,000 US$1.9Bn 1,800 US$1.7Bn US$1.6Bn 1,600 US$1.4Bn 1,400 US$ Million 1,200 1,000 800 US$741MM 600 US$733MM 400 200 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2Q16 2Q17 - Machinery 9% 9% 11% 6% 7% 34% Spare parts and 8% 41% 49% services
Slide 8: Diverse Customer Base
DIVERSE CUSTOMER BASE 53% OF DELIVERIES COME FROM NON-MINING CUSTOMERS SALES BY ECONOMIC SECTORS 2% 3% 3% 1% 3% 2% 3% 4% 1% 3% 3% 2% 10% 10% 12% 38% 40% 4% 4% 3% 49% 2% 2% 4% 21% 24% 18% 16% 13% 2010 As of 2Q2016 As of 2Q2017 Open pit mining Underground mining Construction Government Transport Indus
Slide 9: Key capabilities
Key capabilities
Slide 10: 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 11: Presence in South and Central America Countries Representing Brand Leaders
WITH PRESENCE IN SOUTH AND CENTRAL AMERICA COUNTRIES REPRESENTING BRAND LEADERS 6,515 2016
Slide 12: Market Coverage
MARKET COVERAGE Tumbes Trompeteros Iquitos Talara Jaén Ferreyros: 6 locations in Lima, 17 branches and offices Piura Bagua Lambayeque Cajamarca Tarapoto Unimaq: main location in Lima and branches in Piura, Cajamarca, Lambayeque, Trujillo, Huancayo, Arequipa, Cusco e Ilo. Oficinas en Cerro de Pasco,
Slide 13: 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 14: 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 15: Sustainability Stakeholders
SUSTAINABILITY 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 • “Jóvenes con
Slide 16: 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 J
Slide 17: Caterpillar Market Share in Peru
CATERPILLAR MARKET SHARE IN PERU Open Pit Mining Heavy Construction Hitachi Hyundai Bomag Atlas Copco Hamm 2% Others 3% Hitachi 2% 3% 10% 9% 0% P&H Case 3% 1% Doosan Caterpillar 5% Caterpillar 48% 47% Komatsu Volvo 36% 21% In units Komatsu Rolling 12 months, Jun2017 Include shovels In units Rolling
Slide 18: Financial Performance
Financial Performance
Slide 19: Track Record of Consistent Financial Performance
TRACK RECORD OF CONSISTENT FINANCIAL PERFORMANCE SALES (s/.mm) Gross, Operating and Ebitda margin 5,225 5,333 4,878 4,856 24.2% 24.3% 24.3% 4,611 20.7% 21.2% 22.9% 23.9% 2,507 2,401 12.5% 12% 12.4% 11.2% 10.7% 12% 9.9% 6.4% 7.5% 6.9% 9.2% 8.7% 9.1% 8.7% 2012 2013 2014 2015 2016 2Q16 2Q17 2012 2013 2
Slide 20: Investment in Assets: Accounts Receivables
INVESTMENT IN ASSETS 1) ACCOUNTS RECEIVABLES ACCOUNTS RECEIVABLES EVOLUTION FACTORING US$ MM US$ MM 40 400 35 350 21 30 13 300 14 10 11 14 11 25 250 20 38.5 200 324 337 15 150 292 305 298 281 290 100 10 50 5 11.4 0 0 2012 2013 2014 2015 2016 2Q16 2Q17 2Q16 2Q17 Short term Long term • Common practice
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) 602 584 523 55 405 402 402 44 370 31 30 458 433 19 23 3 -11 17 5 364 208 9 6 245 15 5 263 224 13 28 3 2 5 16 17 7 14 11 11 5 62 -3 -1 14 18 19 21 31 48 -20 130 133 140 121 115 109 131 -33 2012 2013
Slide 22: Cash Cycle
CASH CYCLE -54 days of accounts payable Targets: Inventory 120 days 3.0x Payable Cash Cycle of 144 days 45 days 70 days of accounts receivable Receivable 45-60 days 128 days of Inventory (2.82x)
Slide 23: Access to Diversified Sources of Financing
ACCESS TO DIVERSIFIED SOURCES OF FINANCING Natural hedge: revenue-debt DIVERSIFIED FUNDING BASE (US$MM) DEBT BY CURRENCY Banks Caterpillar Bonds 20% 2% Soles 5% 2Q17 307 70 161 US$ 538MM Quetzales Chilean Peso 2016 307 53 161 US$ 521 MM Dollars 80% - 68 2015 US$ 589 MM 201 93 295 DEBT BY RATE - 51 1
Slide 24: Access to Diversified Sources of Financing
ACCESS TO DIVERSIFIED SOURCES OF FINANCING AVG COST OF DEBT 5.0% 4.65% MATURITY OF FINANCIAL DEBT (US$MM) 4.40% 4.36% 4.20% 4.12% 250 237 4.0% 3.80% 196 200 3.0% 150 2012 2013 2014 2015 2016 2Q17 100 67 FINANCIAL EXPENSES (AS% OF TOTAL SALES) 50 30 3.0% 7 0 2.60% - 2017 2018 2019 2020 2021 2022 2.0%
Slide 25: Leverage Ratio Covenant
LEVERAGE RATIO COVENANT NET DEBT TO EBITDA RATIO ADJUSTED DEBT TO EBITDA RATIO 4.39 2.93 4.08 2.68 2.86 2.59 3.62 3.503.533.52 3.48 2.37 2.38 2.46 3.33 3.383.27 3.223.28 3.21 2.05 2.853.06 2.67 2.762.782.972.89 1.91 2.56 2.25 2009 2010 2011 2012 2013 2014 2015 2016 2Q17 • Adjusted debt: total debt e
Slide 26: Profitability Ratios
PROFITABILITY RATIOS 18% 16.0% 16% 14.1% 14.3% 14% 14.1% 13.2% 13.5% 13.20% 12.8% 12% 12.2% 11.9% 11.50% 11.8% 11.9% 10.80% 10% 10.2% 10.6% 9.8% 7.7% 8% 7.3% 7.1% 7.7% 7.4% 8.1% 6.3% 6.1% 6% 5.9% 4.6% 5.5% 5.5% 4% 4.0% 2% 0% 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q
Slide 27: Ferreycorp in the Capital Market
FERREYCORP IN THE CAPITAL MARKET SHAREHOLDERS COMPOSITION AS OF JUNE 2017 Capital S/. 1’014,326,324 Nº of shares 1’014,326,324 Dividend Yield 2016 (div 0.128457) 7.6% Local pension Foreign funds Repurchased shares as of June 2017 43’145,669 investors 25% 36% MAIN SHAREHOLDERS AS OF JUNE 17 Peruvian
Slide 28: 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 29: Contacts
Contacts Corporative Finance Manager: Patricia Gastelumendi Treasury Manager: Liliana Montalvo Investor Relations Executive: Elizabeth Tamayo