Grupo Mexico S.A.B. de C.V. Class B · BMV:GMEXICO/B
Grupo Mexico S.A.B. de C.V. Class B — Investor Presentation (March 2005)
45 slides from Grupo Mexico S.A.B. de C.V. Class B's investor presentation, March 2005
Slide 1: Overview & Highlights
Overview & Highlights March 2005
Slide 2: Forward-looking statements disclaimer
This presentation contains certain statements that are neither reported financial results nor other historical information. These estimates are forward-looking statements within the meaning of the safe-harbor provisions of the Mexican securities laws. These forward-looking estimates are subject to r
Slide 3: Company Profile
Company Profile Grupo Mexico (GMexico) represents the world’s 2nd largest company in terms of copper ore reserves and first among publicly listed companies, the third largest integrated (mine to refined) copper producer, the fourth largest silver producer and the eighth largest integrated zinc pro
Slide 4: Grupo Mexico & Subsidiaries - Corporate Structure
Grupo Mexico & Subsidiaries - Corporate Structure Listed in Mexican Stock Market (BMV) 100% 100% AMC ITM Americas Mining Corporation Infraestructura y Transportes (USA) Mexico 99.15% 100% 54.2% 100% 74 % 100 % Lineas Grupo MM ASARCO SPCC (1) Ferroviarias Ferroviario Intermodal (Mexico) (2) (USA) (PE
Slide 5: Grupo Mexico Proposed Corporate Structure
Grupo Mexico Proposed Corporate Structure Listed in Mexican Stock Market (BMV) 100% 100% AMC ITM Americas Mining Corporation Infraestructura y Transportes NYSE (USA) Mexico Listed 75.1% 100% 100% 74 % 100 % Lineas Grupo SPCC ASARCO Ferroviarias Ferroviario Intermodal (USA) (USA) Mexico de Mexico Mex
Slide 6: Grupo Mexico Consolidated Financial Highlights
Grupo Mexico Consolidated Financial Highlights Millions of USD – US GAAP Copper Price (Avg. cts/lb) 82 72 71 81 129 129 2000 2001 2002 2003 2004 2005 B Revenues $3,475 $2,863 $2,492 $2,496 $4,206 $4,184 AMC (Mining) 85% 81% 76% 77% 85% 84% Ferromex (RR) 15% 19% 24% 23% 15% 16% EBITDA 611 384 501 684
Slide 7: Grupo Mexico Debt Breakdown
Grupo Mexico Debt Breakdown Millions of USD as of Decmber 31,2004 – US GAAP $ 15M Banks ($ 7M) Net Debt $175M Bank loan $75M EPA Note 100% 100% $250M Total $168M Net Debt AMC ITM $(13M) Net Debt 99.2% 54.2% 100% 74.0% MM SPCC Asarco Ferromex $600M Banks $200M Banks * $250M Notes $ 74M Banks $441M Ya
Slide 8: AMC Overview (Mining Division)
AMC Overview (Mining Division) AMC AMC ITM 99.15% 54.2% 100% MM SPCC Asarco Grupo México, S.A. de C.V. 7
Slide 9: AMC 2004 Sales Product breakdown
AMC 2004 Sales Product breakdown 2004 Sales = $3,582 million Sulfuric Acid Gold 0.5% 0.7% Lead 0.5% Other 0.8% Coal & Coke Zinc 0.2% Silver 3.4 3.7 Molybdenum • AMC’s EBITDA results in approximately $20 million 18.8% change per annum, on average, for every one cent change in the price Copper of copp
Slide 10: 2004 Global Copper Consumption and Relevant Producers
2004 Global Copper Consumption and Relevant Producers Tonnes on an Annual Basis World Consumption: Refined World Supply: 16,576,000TM 15,985,000MT Codelco 10% Phelps Dodge Europe Other 30% 25% 6.1% GMexico 5.5% Nippon Other 54.8% 4.3% 3.7% L.A. 3% 21% 3.6% Norddeutsche 7% 3.5% Mitsubishi Japan China
Slide 11: Global Copper Market Pricing
Global Copper Market Pricing Cash LME Average Copper Pricing, 1998 – 2005 LME, Comex and Shanghai Inventory Evolution USD per lbs. of Copper Thousands of Metric Tones (Dec 2003 to Dec 2004) LME COMEX Shanghai 1.48 1.40 1,200 1.33 1.29 1,000 1.20 1.21 807 717 800 1.06 $/Lb. 1.05 1.04 637 1.04 1.03 1.
Slide 12: AMC Copper Contained in Ore Reserves
AMC Copper Contained in Ore Reserves Thousands of Tonnes * – January 1, 2005 at 90 Cents Copper Price 68,983 2nd Place 1st Place 43,762 727 275 883 4,146 3rd 4,252 Place 7,188 38,929 7,541 * “Tonnes” = Metric Tones 18,750 To convert “Tonnes” into Short Tones multiply by 1.10 Cananea Toquepala Cuajon
Slide 13: AMC Exploration Projects and Prospects
AMC Exploration Projects and Prospects 7,036 2,000 126 (Mex.) Copper (Peru) 4,910 Projects (Mex.) (Ktonnes of Cu. Contained) El Arco Los Angangueo Total Chancas 617.3 3,703.8 3,086.5 (Peru) “Gold” • AMC has significant Projects additional projects (000´s of. Oz. (Mex.) and exploration Contained) pot
Slide 14: AMC Copper Mine Production Evolution
AMC Copper Mine Production Evolution Thousands of Metric Tones – Unless otherwise stated 916 896 891 873 AMC Mine 844 835 Production (MT) 2000 2001 2002 2003 2004 2005B • 82% of AMC’s total production is located in 27% 27% 27% 20% 18% 23% Latin America AR Breakdown 35% 34% 32% 35% 37% 38% by MM Comp
Slide 15: AMC Cash Operating Cost
AMC Cash Operating Cost Cents per pound of Copper 35.1 Minera 32.2 Mexico 2004 2005B AMC´s consolidated cash operating cost: 41.7 36.1 25.8 SPCC 4.7 2004 2005B 2004 2005B 114.4 78.2 Asarco 2004 2005B Grupo México, S.A. de C.V. 14
Slide 16: Minera Mexico Mining Operations
Minera Mexico Mining Operations AMC ITM 99.15% MM SPCC Asarco Grupo México, S.A. de C.V. 15
Slide 17: Minera Mexico Overview of Mining Operations
Minera Mexico Overview of Mining Operations Represents the largest mining company in Mexico. Substantial production capacity: 380,000 tonnes per year of copper. 155,000 tonnes per year of zinc. 12 million troy ounces per year of silver. 23 million tonnes of copper contained in ore reserv
Slide 18: Minera Mexico Overview of Operations
Minera Mexico Overview of Operations Mining Units 7 Cananea Complex Caridad Smelters and Complex Refineries 11 Buenavista Headquarters Major Prospects 4 El Arco Rosita Coal Complex Santa Bárbara San Martín Charcas San Luis Potosí Bolaños Corporate Office Mexico City Angangueo Taxco Grupo México, S.A
Slide 19: Minera Mexico Revenues & EBITDA
Minera Mexico Revenues & EBITDA Millions of USD – US GAAP Revenues EBITDA 1,381 1,452 1,144 902 782 724 676 699 212 184 97 106 2000 2001 2002 2003 2004 2005B • 2004 EBITDA strong growth based on increased revenues from both copper prices and a 10% increase in copper production as well as relatively
Slide 20: Minera Mexico-Production, Cash Operating Cost & CAPEX
Minera Mexico-Production, Cash Operating Cost & CAPEX 000´s of MT of Cu. Cash Cost US$/lbs. 0.55 0.49 348 kmt Mine 0.43 0.43 320 kmt Production 315 kmt 306 kmt & 291kmt 268 kmt 0.34 Cash 0.32 Operating Cost 2000 2001 2002 2003 2004 2005B 153 144 127 123 CAPEX Breakdown (Millions of USD) 49 55 2000 2
Slide 21: Minera Mexico – Investment Projects
Minera Mexico – Investment Projects 2005 Expected Investment Completion Project Description (US $ 000´s) Impact Date New SX/EW Plant in Cananea 50,100 Additional 32.75 Ktpy of Copper Dec. 2006 Coal Mine Expansion 27,900 Additional 700 Ktpy of Coal Apr. 2005 Caridad Smelter 14,600 Increase of 30 Ktpy
Slide 22: Minera Mexico Repayment Schedule
Minera Mexico Repayment Schedule Millions of USD MM Total Net Debt as of December 31st 2004 = $877 million 371 150 150 125 125 120 46 22 2005 2006 2007 2008 2009 ... 2028 NOTE: Amortization schedule is based on the new $600 million credit facility disbursed on October 29, 2004 Grupo México, S.A. de
Slide 23: SPCC Mining Operations
SPCC Mining Operations AMC ITM 54.2% MM SPCC Asarco Grupo México, S.A. de C.V. 22
Slide 24: SPCC Overview of Mining Operations
SPCC Overview of Mining Operations Largest mining company in Peru. NYSE listed since 1996 (NYSE Ticker symbol PCU). 395,000 tonnes of refined copper production; 10,000 tonnes of Molybdenum. 22 million tonnes of copper contained in ore reserves. Important development projects in Tantahuatay
Slide 25: SPCC Overview of Mining Operations
SPCC Overview of Mining Operations Mining Units 2 Smelter and Refinery 4 Projects 2 Tantahuatay Lima Los Chancas Corporate Office Lima, Peru Cuajone Toquepala Projects in Chile: •El Salado •Sierra Aspera Complejo •Cartanave Ilo •Esperanza Grupo México, S.A. de C.V. 24
Slide 26: SPCC Revenues & EBITDA
SPCC Revenues & EBITDA Millions of USD – US GAAP Revenues EBITDA 1,716 1,387 1,005 711 658 665 798 717 227 166 187 292 2000 2001 2002 2003 2004 2005 • AMC management has been able to deliver consistent cost savings and increased value to shareholders in SPCC since its acquisition in 1999. 2004 EBITD
Slide 27: SPCC - Production, Cash Operating Cost & CAPEX
SPCC - Production, Cash Operating Cost & CAPEX Millions of USD – US GAAP 000´s of MT of Cu. Cash Cost US$/lbs. Mine 397 kmt 375 kmt 357 kmt Production & 341 kmt 342 kmt 347 kmt Cash 0.52 0.50 Operating 0.46 0.40 Cost 0.27 0.05 2000 2001 2002 2003 2004 2005B 312 209 161 CAPEX 132 125 Breakdown 90 65
Slide 28: SPCC – Investment Projects
SPCC – Investment Projects 2005 Expected Investment Completion Project Description (US $ 000´s) Impact Date Smelter Modernization at Ilo 170,700 Cost reduction and environmental Jan. 2007 compliance Toquepala Leaching, Crushing 28,200 Haulage cost reduction & Jun. 2005 ________ Increased recoveries
Slide 29: SPCC Amortization Schedule
SPCC Amortization Schedule Millions of USD – US GAAP SPCC Net Total Debt as of December 31th 2004 = ($257) million 210 10 10 10 10 10 10 10 10 2005 2006 2007 2008 2009 2010 2011 2012 2013 NOTE: Amortization schedule is based on the new $200 million credit facility disbursed on January 26, 2005 Grupo
Slide 30: Asarco, Inc. Mining Operations
Asarco, Inc. Mining Operations AMC ITM 100% MM SPCC Asarco Grupo México, S.A. de C.V. 29
Slide 31: Asarco, Inc. General Highlights
Asarco, Inc. General Highlights Asarco has and will continue to reasonably respond to its own environmental obligations; however, Asarco's parent company is not directly or indirectly responsible for Asarco’s environmental liabilities (See US District Court of Montana Ruling: CV 01-147-M-DWM) .
Slide 32: Asarco, Inc. Overview of Mining Operations
Asarco, Inc. Overview of Mining Operations 155,000 tonnes of annual copper production; 212,000 tonnes expected copper production for 2005. Three large scale open pit copper mining units. Two SX-EW metallurgic plants. Copper Integrated production. Largest copper refinery in the United State
Slide 33: Asarco Overview of Ongoing Mining Operations
Asarco Overview of Ongoing Mining Operations Globe Roaring River Coy Immel Ray Amarillo Silver Bell Hayden Young Phoenix Mission Mining Units 6 Projects 1 Smelters and refineries 4 Corporate Office Grupo México, S.A. de C.V. 32
Slide 34: Asarco – Revenues & EBITDA
Asarco – Revenues & EBITDA Millions of USD – US GAAP Revenues EBITDA 1,230 798 185 660 513 508 2 359 59 17 (66) (19) 2000 2001 2002 2003 2004 2005B 2004 EBITDA stronger based on increased revenues from both copper prices and a 7% increase in copper production in the 4th quarter. The increase in cost
Slide 35: Asarco - Production, Cash Operating Cost & CAPEX
Asarco - Production, Cash Operating Cost & CAPEX Millions of USD – US GAAP 000´s of MT of Cu. Cash Cost US$/lbs. Mine 261kmt Production 242kmt 230kmt 1.14 212kmt & 169kmt 155kmt Cash 0.84 0.78 Operating 0.82 0.79 Cost 0.64 2000 2001 2002 2003 2004 2005B 63 55 51 CAPEX Breakdown 23 21 (Millions of US
Slide 36: Asarco Amortization Schedule
Asarco Amortization Schedule Millions of USD – US GAAP Asarco Net Total Debt as of December 31, 2004 = $418 million 150 133 100 35 22 1 1 1 1 0 2005 2006 2007 2008 2009 2013 2018 2025 2027 2033 Grupo México, S.A. de C.V. 35
Slide 37: GFM (Ferromex) Rail Operations
GFM (Ferromex) Rail Operations 100% AMC ITM 74.0% Ferromex Grupo México, S.A. de C.V. 36
Slide 38: Ferromex Overview and Highlights
Ferromex Overview and Highlights Mexico’s largest and most diversified railroad covering 71% of its territory. 6,000 mile network, 15,000 cars and, 500 locomotives. Five border gateways with the USA, four seaports in the Pacific and two on the Gulf of Mexico. Strong top line reflects solid b
Slide 39: Ferromex General Overview of Operations
Ferromex General Overview of Operations Border Points Calexico Mexicali El Paso Ports U.P. Cd. Juarez U.P. Naco Nogales U.P. Texas Major Cities BNSF A Prieta Pacific GFM Cananea U.P. BNSF Trackage Nacozari Hermosillo Eagle Pass Rights Chihuahua Piedras Negras Guaymas Monclova Los Escalon Mochis Mont
Slide 40: Ferromex Revenues & EBITDA
Ferromex Revenues & EBITDA Millions of USD – US GAAP Revenues EBITDA 706 619 640 556 567 588 235 242 187 203 215 155 2000 2001 2002 2003 2004 2005B • 2004 EBITDA and Revenues recovered from the 11% peso depreciation during 2003 and from a negative performance of the Export-Import trade activity betw
Slide 41: Ferromex Operating CAPEX and Amortization Schedule
Ferromex Operating CAPEX and Amortization Schedule Millions of USD – US GAAP Net Total Debt as of December 31, 2004 = $358 million 207 Amortization 87 100 Schedule 56 14 14 2005 2006 2007 2008 2009 2010 108 95 70 66 64 Operating CAPEX 57 2000 2001 2002 2003 2004 2005B Grupo México, S.A. de C.V. 40
Slide 42: Ferromex Efficiency Gains
Ferromex Efficiency Gains 32,384 33,867 Load Volume 27,568 28,184 Million Tonnes-Km 23,601 2001 2002 2003 2004 2005B 806 830 771 776 Load Distance 711 Moved per Km (Montly Average) 2001 2002 2003 2004 2005B Grupo México, S.A. de C.V. 41
Slide 43: Conclusions
Conclusions GMexico represents an important copper play in global equity markets. 83% of total production and 85% of total ore reserves of GMexico located in Latin America’s most efficient regions. Highly competitive Production Costs vis-à-vis global competitors. Substantial growth potential
Slide 44: Comparable Public Mining Company Analysis
Comparable Public Mining Company Analysis Price 52 week Equity Enterprise Enterprise Value / Pr./share 03-Mar-05 High Low Value Value EBITDA 12mo Chg. US$ US$ US$ US$M US$M 2005E (x) 2006E (x) % Freeport 41.40 43.97 27.76 7,194 9,085 4.8 6.7 -1.9% Phelps Dodge 103.79 108.35 59.80 9,756 11,436 4.7 5.
Slide 45: Comparable Public Railroad Company Analysis
Comparable Public Railroad Company Analysis Price 52 week Equity Enterprise Enterprise Value / Pr./share Price 52 week Equity Enterprise EV/ EBITDA 03-Mar-05 High Low Value Value EBITDA 12mo Chg. North American Railroads US$ US$ US$ US$M US$M 2005E (x) 2006E (x) % Burlington Northern Santa Fe 51.54
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