Salfacorp S.A. · BCS:SALFACORP
Salfacorp — XIII Capital Markets Event 2015
38 slides from Salfacorp's conference presentation, September 2015
Slide 1: Company Presentation - XIII Capital Markets Event
Company Presentation XIII Capital Markets Event September 2015 - Lima, Peru
Slide 2: Content
Content 1 Company Description & Fundamentals 2 Industry Overview 3 Financial Summary – Business Units 4 Consolidated Financials - SalfaCorp 5 Stock Information & Market Ratios 2
Slide 3: Who We Are
Who We Are Headquartered in Chile with more than 85 years of history, SalfaCorp is a diversified Engineering & Construction and Real Estate Company USD 1.4 billion in consolidated revenues in 2014, with USD 1.3 billion in total assets With its presence in Chile, Colombia, Panama and Peru, Salf
Slide 4: Fundamentals of SalfaCorp
Fundamentals of SalfaCorp Engineering & Construction Diversified lines of businesses in E&C segment Regional presence in investment grade – low risk countries Vast experience and strong know-how in the management of large / specialized E&C projects. Capacity to adapt to different infrastructur
Slide 5: SalfaCorp among the Largest E&C and Real Estate Companies in the Region
SalfaCorp among the largest E&C and Real Estate Companies in the Region Revenues (USD m) Main E&C and Real Estate Companies in Chile (Publicly Listed) In Chile, SalfaCorp is the largest player in the E&C industry and is among the main players in the Real Estate industry. Source: ENR The Top 250 Gl
Slide 6: Highly Diversified Business Base
Highly Diversified Business Base Significant organic growth EBITDA¹ CLP million Growth over the last 5 years through mergers and acquisitions in Merger with complementary 80.000 businesses Consolidación SALFA PERÚ 70.000 International expansion to 69.560 68.782 Peru, Colombia, Panama 60.000 60
Slide 7: Structure of Business Units
Structure of Business Units Engineering & Residential Real Estate Real Estate Develop. & Construction Home Building Development Investments Chile Novatec Inmobiliaria Aconcagua 1,500 has. of land bank Assembly Works Houses (single and multi- Wholly-owned Projects • Nationwide coverage Underground Mi
Slide 8: Shareholder Base
Shareholder Base Source: Depósito Central de Valores as of June 2015 Listed company in the local stock market since 2004. Members of the Controlling Group hold ~45% interest in SalfaCorp, of which 36.3% is represented by a Shareholders Agreement within this Group. Free Float ~ 50%-60% 8
Slide 9: Content
Content 1 Company Description & Fundamentals 2 Industry Overview 3 Financial Summary – Business Units 4 Consolidated Financials - SalfaCorp 5 Stock Information & Market Ratios 9
Slide 10: Macro Situation in Countries where we Operate
Macro Situation in Countries where we Operate GDP Growth per Country (Var. %) Foreign Direct Investment per Country (% of GDP) Inflation per Country (Var. %) Sovereign Rating per Country (Fitch Ratings) 10 Source: Central Banks; Focus Economics; World Bank; Consensus Forecast
Slide 11: Key Variables of the Construction Industry in Chile
Key Variables of the Construction Industry in Chile National GDP and Construction GDP Monthly Index of Construction Activity (IMACON) Fuente: Banco Central de Chile Fuente: Cámara Chilena de la Construcción The Construction industry is pro-cyclical to the economic activity, particularly related to
Slide 12: Sectors that conform Chile's Estimated Investment 2015-2019
Sectors that conform Chile’s Estimated Inv. of USD 79 billion: 2015-2019 Portfolio of Estimated Investments 2015-2019 per Economic Sector In the Mining Sector, CODELCO requires an important Investment Plan of app USD 24 billion for the next 5 years in order to maintain production and keep competit
Slide 13: CODELCO's Structural Projects
CODELCO’s Structural Projects Source: CODELCO presentation during 1Q 2015 13
Slide 14: CODELCO's Operating Investments
CODELCO’s Operating Investments Source: CODELCO presentation during 1Q 2015 14
Slide 15: Supply and Demand of Households in Chile
Supply and Demand of Households in Chile Sales/Supply/Months to Reduce Stock (Santiago) Physical units Key variables of demand: o Mortgage rates – still low o Credit market - good access with minor recent restrictions o Unemployment rates – still low (1 digit) o Impact of new regulations demand
Slide 16: Content
Content 1 Company Description & Fundamentals 2 Industry Overview 3 Financial Summary – Business Units 4 Consolidated Financials - SalfaCorp 5 Stock Information & Market Ratios 16
Slide 17: E&C Strategy & Opportunities
E&C Financial Results Revenues (CLP m) Strategy & Opportunities • Focus on higher specialized lines of business – with higher entry barriers • Migrate from more “commodity-type” segments o Higher quality of Backlog o Increase Gross Margin o Less capital employed • SG&A efficiencies opportunities Gro
Slide 18: E&C Evolution of Backlog
E&C Evolution of Backlog Plus: CLP 110,000 million in projects recently awarded after Jun-15 Backlog (CLP million) Approximately 50 projects were awarded during 1H2015 over CLP 200,000 million ~30% backlog is related to recurring/long term service contracts 18
Slide 19: E&C Backlog by Economic Activity
E&C Backlog (CLP million) Backlog by Economic Activity 19
Slide 20: E&C P&L and Breakdown of Revenues
E&C P&L and Breakdown of Revenues P&L Statement Variation jun-15 jun-14 ($ million of each period) $ mill % Revenues 201.893 336.074 (134.181) -39,9% Gross profit 21.986 30.422 (8.436) -27,7% % of revenues 10,9% 9,1% SG&A Expenses (10.831) (14.334) 3.503 -24,4% Operating result 11.473 16.561 (5.088)
Slide 21: Home Building
Home Building Financial Results Revenues (CLP m) Strategy & Opportunities • Discontinue lines of business related to third party customers. • Focus con “in-house” contracts - AEPC • Reduction of top-line is starting to pay down as of 2Q 2015 – improvement of margins EBITDA (CLP m) / Mg % Gross Profi
Slide 22: Home Building Backlog
Home Building Backlog June 2015 June 2014 Backlog per Line of Business Backlog per Line of Business Economic External External Households Projects Projects 11% 25% 1% Own Projects Own Projects 33% 28% Backlog Backlog CLP 91,030 m JV Projects CLP 96,488 m 42% JV Projects 60% Backlog with third part
Slide 23: Home Building P&L and Breakdown of Revenues
Home Building P&L and Breakdown of Revenues P&L Statement Variation jun-15 jun-14 ($ million of each period) $ mill % Revenues 46.400 94.347 (47.947) -50,8% Gross profit (162) 508 (670) -131,9% % of revenues -0,3% 0,5% SG&A Expenses (2.265) (1.412) (853) 60,4% Operating result (2.427) (880) (1.547)
Slide 24: Consolidated Real Estate Historic Information
Consolidated Real Estate Historic Information Revenues Consolidated RE (CLP m) * Gross Profit (CLP m) / Mg % 27.9% 25.7% 17.5% 17.7% EBITDA (CLP m) / Mg % Net Profit (CLP m) 21.8% 18.4% 14.6% 11.5% * Includes Residential Households and land revenues 24
Slide 25: Residential RE Development
Residential RE Development Financial Results P&L Statement Variation jun-15 jun-14 ($ million of each period) $ mill % Strategy & Opportunities: Revenues 45.262 55.158 (9.896) -17,9% Gross profit 11.065 11.018 48 0,4% % of revenues 24,4% 20,0% • Increase profitability (return) of the RE SG&A Expense
Slide 26: RE Develop. & Investments
RE Develop. & Investments Financial Results P&L Statement Variation ($ million of each period) jun-15 jun-14 $ mill % Strategy & Opportunities: Revenues 1.237 2.694 (1.456) -54,1% Gross profit 787 346 441 127,3% % of revenues 63,6% 12,9% • Maximize land bank value (1,500 has.) SG&A Expenses (817) (1
Slide 27: Evolution of Pre-sales and Deliveries (Combined)
Evolution of Pre-sales and Deliveries (Combined) Pre-sales (Combined)1 Deliveries (Combined)2 UF millions* UF millions* 14,6 11,1 10,9 9,6 12,1 11,6 8,3 8,4 9,0 8,6 4,0 4,7 Backlog of Combined Pre-sales is UF 8,6 million o Near UF 5,7 million would become Deliveries (revenues) during the 2H 2015 o
Slide 28: Distribution of Land Bank Strategic Value
Distribution of Land Bank Strategic Value E Geographical Distribution of Land Bank This Business Unit manages approximately 1,500 has. of land for future real estate developments. Book value as of Jun-2015, reached CLP 160 billion vs. North Zone fair value of CLP 239 billion as of the same date.
Slide 29: Content
Content 1 Company Description & Fundamentals 2 Industry Overview 3 Financial Summary – Business Units 4 Consolidated Financials - SalfaCorp 5 Stock Information & Market Ratios 29
Slide 30: Consolidated Financials Outcome of Strategy
Consolidated Financials Outcome of Strategy Revenues (CLP m) Gross Profit (CLP m) / Mg % 12.2% 14.0% 9.5% 8.7% EBITDA (CLP m) / Mg % Net Profit (CLP m) 9.5% 6.6% 8.0% 5.7% Salfacorp has been able to consolidate its past growth strategy, with a relevant improvement on Gross and EBITDA Margins. De
Slide 31: SalfaCorp - Consolidated P&L and Breakdown of Revenues
SalfaCorp - Consolidated P&L and Breakdown of Revenues Revenues per Business Unit (Jun-15) P&L Statement Variation jun-15 jun-14 ($ million of each period) $ mill % Revenues 268.789 445.233 (176.444) -39,6% Gross profit 33.115 42.179 (9.064) -21,5% % of revenues 12,3% 9,5% SG&A Expenses (19.796) (26
Slide 32: SalfaCorp - Consolidated Balance Sheet
SalfaCorp - Consolidated Balance Sheet Balance Sheet As of June 2015 Home Residential RE RE Develop & E&C Ajust. Consolidated CLP Millions Building Develop. Investment Total Assets 353.558 62.740 285.301 202.221 (25.205) 878.615 Total Liabilities 191.532 42.702 204.933 160.268 (52.073) 547.364 Total
Slide 33: Financial Results - Cash Flow Generation
SalfaCorp - Consolidated Financial Results – Cash Flow Generation Jan. -June 2015 (CLP mn) Jan. - Dec. 2014 Jan. - Dec. 2013 Home Residential RE Develop. & Consolidated E&C Building RE Devolp. Invest. Consolidated Consolidated Operating Result + Depreciation & Amortizations 21.135 - (2.156) 5.088 (8
Slide 34: Debt Maturity Profile
Debt Maturity Profile SalfaCorp as of Jun-2015 Asset Base Lending Type (CLP million) 2015 2016 2017 2018 2019 2020 2021+ Total Construction loans 91.746 16.506 0 0 0 0 0 108.252 Leasing 5.064 7.658 4.832 1.800 430 0 0 19.784 Options over Land 0 0 8.107 0 8.047 4.177 5.963 26.294 Subtotal Financing o
Slide 35: Financial Ratios & Credit Ratings have improved in the last 3 years
Financial Ratios & Credit Ratings have improved in the last 3 years Financial Ratios jun-15 dec-14 dic-13 dic-12 Liquidity (times) 1,18 1,19 1,31 1,39 Leverage (times) 1,65 1,75 1,99 2,19 Financial Leverage (times) 1,15 1,18 1,28 1,33 Net Financial Leverage (times) 1,05 1,10 1,18 1,23 Net Financial
Slide 36: Content
Content 1 Company Description & Fundamentals 2 Industry Overview 3 Financial Summary – Business Units 4 Consolidated Financials - SalfaCorp 5 Stock Information & Market Ratios 36
Slide 37: Stock Information of SalfaCorp and Industry
Stock Information of SalfaCorp and Industry Stock Price vs IPSA vs E&C/RE Index Price variations reflect how pro- cyclical the construction industry is to the economic activity. The Santiago Stock Exchange has shown low levels of trading volume (liquidity) over the past couple of years. Stock
Slide 38: Company Presentation - XIII Capital Markets Event
Company Presentation XIII Capital Markets Event September 2015 - Lima, Peru