Salfacorp S.A. · BCS:SALFACORP
Salfacorp — Deutsche Bank Conference May 2011
47 slides from Salfacorp's conference presentation, May 2011
Slide 1: Corporate Presentation May 2011
CORPORATE PRESENTATION MAY 2011
Slide 2: Agenda
1: COMPANY OVERVIEW 2: THE CONSTRUCTION INDUSTRY 3: BUSINESS UNITS 4: FINANCIAL PERFOMANCE 5: OUTLOOK FOR THE NEXT YEARS eEVEV
Slide 3: Company Overview
= — S ac LL} > O > a me = O O CHAPTER O1
Slide 4: SalfaCorp: A Consolidated Company
COMPANY OVERVIEW CHAPTER 01 01 SALFACORP: A CONSOLIDATED COMPANY 82 years of history Our Business Model Leadership Role in Engineering & Construction and Real Estate Development Businesses Local (Chile) & International Presence (Péru & Colombia) Salfa Ingeniería y Aconcagua S.A. Industry Leading Liq
Slide 5: SalfaCorp: Recognized as a Leader
COMPANY OVERVIEW CHAPTER 01 SALFACORP: RECOGNIZED AS A LEADER Among the Main Construction Companies in Latam Strong position in the engineering & construction sector and in real estate development in the local (Revenue, US$ million, at dec-10) market: Historic leadership in engineering & constructio
Slide 6: SalfaCorp: An Outstanding Performance in the Capital Markets
COMPANY OVERVIEW CHAPTER 01 SALFACORP: AN OUTSTANDING PERFORMANCE IN THE CAPITAL MARKETS Active player in the local market, this is reflected in Its market SalfaCorp S.A.’s share price vs IPSA index value and trading volumes: Base 100 800 700 SalfaCorp As of april 2011, the share price had raised 63
Slide 7: Diversified Shareholder Base
COMPANY OVERVIEW CHAPTER 01 DIVERSIFIED SHAREHOLDER BASE CONTROLLING GROUP FREE FLOAT Listed in the IPSA Index Chilean families related to the construction industry with breadth of experience and knowledge of the sector 41% 59% Ownership Structure (dec-04) Ownership Structure (mar-11) Others Others
Slide 8: Business Model: Strategic Competitive Advantages and Synergies
COMPANY OVERVIEW CHAPTER 01 BUSINESS MODEL: STRATEGIC COMPETITIVE ADVANTAGES AND SYNERGIES REAL ESTATE ENGINEERING & CONSTRUCTION business model comprises one business business model comprises various unit for management and real estate business segments according to their development and other for
Slide 9: Strong Growth with a Successful History in the Capital Markets
COMPANY OVERVIEW CHAPTER 01 STRONG GROWTH WITH A SUCCESFUL HISTORY IN THE CAPITAL MARKETS Company’s Net Revenues (2006 – 2010) and Revenues Target for 2013 US$ million CAGR 10-13m: 20.0% CAGR 06-10: 25.2% Consolidated Revenues from subsidiaries in which SalfaCorp holds a ... 1,122 1,514 2,600 contro
Slide 10: Drivers of Growth for Each Business Unit
COMPANY OVERVIEW CHAPTER 01 DRIVERS OF GROWTH FOR EACH BUSINESS UNIT MINING DEVELOPMENT - organic growth (current projects) - growth through acquisitions and/or partnerships INFRASTRUCTURE - organic growth (current projects) - growth through acquisitions and/or partnerships GROUND MOVEMENT - organic
Slide 11: The Construction Industry
THE CONSTRUCTION INDUSTRY CHAPTER 02
Slide 12: Economic Growth Prospects for Our Markets
THE CONSTRUCTION INDUSTRY CHAPTER 02 ECONOMIC GROWTH PROSPECTS FOR OUR MARKETS GDP Chile, Peru & Colombia Ch.% GDP US$ million (2010) 285,511 Chile Perú Colombia Latam Chile + Perú + Colombia > 203,323 PIB US$640,000 million 152,830 0.9% 1.5% 5.3% 8.8% 4.3% 6.1% 5.9% 7.5% 4.6% 4.7% 4.9% 5.8% 4.5% 4.
Slide 13: Chile, Peru, Colombia Show Excellent Risk Prospect
THE CONSTRUCTION INDUSTRY CHAPTER 02 CREDIT RISK IN LATAM COUNTRIES Latin America’s Credit Rating, december 2010 Country Fitch Ratings Moody´s Standard & Poors SalfaCorp S.A.’s Markets Chile A Aa3 A+ Perú BBB- Baa3 BBB- Colombia BB+ Ba1 BB+ Other Countries México BBB Baa1 BBB Brasil BBB- Baa3 BBB- V
Slide 14: Chile: Construction Spending in Future Investment Projects
THE CONSTRUCTION INDUSTRY CHAPTER 02 CHILE => ↑ CONSTRUCTION SPENDING IN FUTURE INVESTMENT PROJECTS Construction Investment (housing & infrastructure) Construction Investment is expected to rise 11.3% in 2011e, (UF million & Ch.%) driven by civil works (energy, mining, retail, etc.), 640 16.0% Recor
Slide 15: Chile: Recovery on Real Estate Market
THE CONSTRUCTION INDUSTRY CHAPTER 02 CHILE => RECOVERY ON REAL ESTATE MARKET … Housing Supply vs Month of Supply of Homes Housing Sales vs Month of Supply of Homes (units) (units) houses + apart. month supply of homes houses + apart. month supply of homes 100,000 35 7,000 35 30 6,000 30 80,000 25 5,
Slide 16: Peru & Colombia: Opportunities for Growth and Consolidation
THE CONSTRUCTION INDUSTRY CHAPTER 02 PERU & COLOMBIA: OPPORTUNITIES FOR GROWTH AND CONSOLIDATION Colombia: Construction Investment Perú: Construction Investment US$ million US$ million 13,588 6,835 9,569 3,996 4,883 5,404 2010 2011e 2012e 2009 2010 2011e Source: BanColombia, Banco de la República, J
Slide 17: Business Units
i: LING BUSINESS UNITS CHAPTER 03
Slide 18: Salfa Ingeniería y Construcción S.A.
3.1 Salfa Ingeniería y Construcción S.A.
Slide 19: Business Model: Specialization by Segment and Market
BUSINESS UNITS – SALFA INGENIERÍA Y CONSTRUCCIÓN S.A. CHAPTER 03 BUSINESS MODEL: SPECIALIZATION BY SEGMENT AND MARKET SALFA INGENIERÍA & CONSTRUCCIÓN S.A. CHILE PERÚ COLOMBIA & CARIBE Industrial Assembly Industrial Assembly Industrial Assembly Civil Works Civil Works Specialties (Ports) Infrastructu
Slide 20: Industrial Assembly, Civil Works, Infrastructure
BUSINESS UNITS – SALFA INGENIERÍA Y CONSTRUCCIÓN S.A. CHAPTER 03 BUSINESS MODEL: SPECIALIZATION BY SEGMENT AND MARKET INDUSTRIAL ASSEMBLY contracts for assembly of industrial equipment and EPC including detailed engineering, procurement, management and acqusition of materials and equipment related t
Slide 21: New Specialties: Maintenance, Ports, Tunnels, Ground Movements
BUSINESS UNITS – SALFA INGENIERÍA Y CONSTRUCCIÓN S.A. CHAPTER 03 BUSINESS MODEL: SPECIALIZATION BY SEGMENT AND MARKET NEW SPECIALTIES: INDUSTRIAL MAINTENANCE, PORTS, TUNNELS & GROUND MOVEMENTS - development of tunnels in underground mining and hydroelectric power plants, - engineering & construction
Slide 22: More than US$890 Million of Backlog
BUSINESS UNITS – SALFA INGENIERÍA Y CONSTRUCCIÓN S.A. CHAPTER 03 MORE THAN US$ 890 MILLION OF BACKLOG TO BE EXECUTED ON THE NEXT YEARS Wide portfolio of projects (low risk): Evolution of Engineering & Construction Backlog (US$ million) 139 projects (third parties) Assured future sales: Backlog: US$
Slide 23: Main Projects Underway and Contracted at March 31, 2011
BUSINESS UNITS – SALFA INGENIERÍA Y CONSTRUCCIÓN S.A. CHAPTER 03 MAIN PROJECTS UNDERWAY AND CONTRACTED AT MARCH 31, 2011 MAIN INDUSTRIAL ASSEMBLY PROJECTS UNDERWAY AND CONTRACTED (MAR-11) Project Owner Starting Date Completion Date Santa María Power Plan, Unit 2 POSCO ENGINEERING & CONSTRUCTION CO.
Slide 24: Main Drivers of Growth for the Next Years
BUSINESS UNITS – SALFA INGENIERÍA Y CONSTRUCCIÓN S.A. CHAPTER 03 MAIN DRIVERS OF GROWTH Industrial, Mantención FOR THE NEXTTúneles YEARS… y Puertos NEW MARKETS NEW SPECIALTIES Tunnels underground development for mining & hydroelectric generation Ports complementary with industrial assembly projects
Slide 25: More than US$4,000 Million of Proposals Presented and Under Review
BUSINESS UNITS – SALFA INGENIERÍA Y CONSTRUCCIÓN S.A. CHAPTER 03 MORE THAN US$ 4,000 MILLION OF PROPOSALS PRESENTED AND UNDER REVIEW… PROPUESTAS PRESENTED: US$ 2,954 million new specialties others infrastruct 18.1% industrial 8.7% mining Chile maintenan 41.1% ure 72.2% ce 1.3% 3.0% industrial non as
Slide 26: Aconcagua S.A.
3.2 Aconcagua S.A.
Slide 27: Business Model Focused in Synergies of the Real Estate Business
BUSINESS UNITS – ACONCAGUA S.A. CHAPTER 03 BUSINESS MODEL FOCUSED IN SYNERGIES OF THE REAL ESTATE BUSINESS ACONCAGUA S.A. REAL ESTATE DEVELOPMENT RESIDENTIAL AND NON RESIDENTIAL BUILDING INMOBILIARIA ACONCAGUA S.A. CONSTRUCTORA NOVATEC S.A. Northern Central South BUSINESS MODEL => Real estate manage
Slide 28: One of the Most Diversified Homebuilders in the Local Market
BUSINESS UNITS – ACONCAGUA S.A. CHAPTER 03 ONE OF THE MOST DIVERSIFIED HOMEBUILDERS IN THE LOCAL MARKET… NORTHERN II Region Antofagasta IV Region La Serena Plaza Norte, Antofagasta San Marcos, Antofagasta Puerta del Sol, La Serena CENTRAL V Region Con-Con, Quilpué, Viña del Mar, Valparaíso Metropoli
Slide 29: Residential and Non Residential Building
BUSINESS UNITS – ACONCAGUA S.A. CHAPTER 03 …RESIDENTIAL AND NON RESIDENTIAL BUILDING FOR OWN AND THIRD PARTIES’ PROJECTS RESIDENTIAL AND NON RESIDENTIAL BUILDING construction of housing projects (houses and apartment buildings and installation of basic services) and non residential building, such as
Slide 30: One of the Most Diversified Homebuilders in the Local Market
BUSINESS UNITS – ACONCAGUA S.A. CHAPTER 03 ONE OF THE MOST DIVERSIFIED HOMEBUILDERS IN THE LOCAL MARKET… Diversified portfolio, including products that target different income levels: 64 proyects under development in 26 cities and counties around the country, Mix of houses and apartments, Prices fro
Slide 31: Active Sales Strategy and Product Innovation Explains Growth
BUSINESS UNITS – ACONCAGUA S.A. CHAPTER 03 ACTIVE SALES STRATEGY AND PRODUCT INNOVATION EXPLAINS GROWTH... Presales (units and UF million) Pre Sales Agreements (3m-10 vs 3m-11): 6,000 14 7,000 985 units (+4.5% ‘10 vs ‘11) 12 4,914 6,000 UF2.45 million (+37.1% ‘10 vs ‘11) 3,875 3,786 3,542 10 5,000 3
Slide 32: Growth Drivers of the Real Estate Business Unit
BUSINESS UNITS – ACONCAGUA S.A. CHAPTER 03 GROWTH DRIVERS OF THE REAL ESTATE BUSINES UNIT Value Added Real Estate development projects: Development of important projects with crystal lagoons (Aconcagua - Crystal Lagoons Joint Venture) Seismic technologies and energy efficiency New markets (target se
Slide 33: Some of Our Real Estate Projects Under Development
BUSINESS UNITS – ACONCAGUA S.A. CHAPTER 03 SOME OF OUR REAL ESTATE PROJECTS UNDER DEVELOPMENT… Value added projects (jointly with Crystal Lagoons) Project Laguna del Mar Stage B0-6a Location IV Región - La Serena Type of Housing apart. > 5 floors Units 102 Potential Sales (UF) 351,266 Launch of the
Slide 34: Some of Our Real Estate Projects Under Development
BUSINESS UNITS – ACONCAGUA S.A. CHAPTER 03 SOME OF OUR REAL ESTATE PROJECTS UNDER DEVELOPMENT… Projects in New Market Segments (high income level) Project Punta de Aguila Stage 1 Location R.M. – Lo Barnechea Type of Housing apart. 4 floors Units 36 Potential Sales (UF) 520,122 Launch of the project
Slide 35: Launch of Projects for the Year 2011E
BUSINESS UNITS – ACONCAGUA S.A. CHAPTER 03 LAUNCH OF PROJECTS FOR THE YEAR 2011E 2011 Launch of Projects, by geographic zone # projects # stages potential sales # units (UF) northern 6 19 3,371,123 1,360 central 39 59 8,978,185 3,343 southern 12 17 1,739,993 1,241 total 57 95 14,089,300 5,944 Total
Slide 36: More than US$227 Million of Backlog
BUSINESS UNITS – ACONCAGUA S.A. CHAPTER 03 MORE THAN US$ 227 MILLION OF BACKLOG TO BE EXECUTED ON THE NEXT YEARS Wide portfolio of projects (low risk): Assured future sales: 60 projects (own and third parties) Backlog: US$ 227 million (mar-11) 86.2% to be executed in 2011 / 13.8,0% in 2012 and 2013
Slide 37: Investment Plan for 2011 Supports Growth of Both Business Units
BUSINESS UNITS – INVESTMENT PLAN CHAPTER 03 INVESTMENTMantención PLAN FOR 2011Industrial, SUPPORTS GROWTH OFyBOTH Túneles BUSINESS UNITS Puertos CONSTRUCTION ENGINEERING MACHINERIES & AND • INVESTMENT IN MACHINERY & EQUIPMENT FOR EQUIPMENT (4.0%) REPLACEMENT AND NEW SPECIALTIES •INVESTMENT IN LAND F
Slide 38: Financial Performance
FINANCIAL PERFORMANCE CHAPTER 04
Slide 39: Remarkable Results...Sustained Growth in Sales
FINANCIAL PERFORMANCE CHAPTER 04 REMARKABLE RESULTS...SUSTAINED GROWTH IN SALES Revenues Gross Profit & % gross profit / revenues (Ch$ million) 90,000 (Ch$ million) 20.0% 80,000 CAGR 06-10: 70,000 16.3% 16.0% CAGR 06-10: 28.3% 60,000 28.2% 12.6% 11.9% 12.0% 50,000 11.3% 11.3% 11.1% 40,000 8.0% 30,00
Slide 40: Revenues, EBITDA and Profit Breakdown
FINANCIAL PERFORMANCE CHAPTER 04 REVENUES, EBITDA AND PROFIT BREAKDOWN Revenues by Business Unit EBITDA by Business Unit Profit (loss) by Business Unit Total: Ch$ 757,255 million (LTM mar-11) Total: Ch$ 46,405 million (LTM mar-11) Total: Ch$23,441 million (LTM mar-11) 582,614 174,640 (2,159) 28,580
Slide 41: Solid Financial Position and Optimization of Capital Structure
FINANCIAL PERFORMANCE CHAPTER 04 SOLID FINANCIAL POSITION AND OPTIMIZATION OF CAPITAL STRUCTURE SUPPORTS EXPANSIÓN… Current Ratio Leverage (Current Assets / Current Liabilities) (Total Liabilities / Total Equity) 2.36 1.76 1.40 1.37 1.98 2.53 1.41 1.42 1.39 1.59 1.52 1.35 2006 2007 2008 2009 2010 1Q
Slide 42: Focusing Our Efforts on Business Profitability
FINANCIAL PERFORMANCE CHAPTER 04 FOCUSING OUR EFFORTS ON BUSINESS PROFITABILITY Net Financial Expenses Coverage Net Debt / EBITDA (EBITDA LTM / Net Financial Expenses LTM) (Debt – Cash&Equiv. / EBITDA LTM) Target: 5.0x Covenant: > 3.0x 5.50 4.48 5.92 6.68 3.46 3.67 5.19 2.63 4.04 5.77 6.40 4.48 2006
Slide 43: Debt Profile
FINANCIAL PERFORMANCE CHAPTER 04 DEBT PROFILE Debt (1T-11) Debt by Financing Source Ch$ million ST Banks 12.1% Long Term Debt / 85.3% Debt LT Banks 26.0% Bonds 57.6% Leasing 4.3% Total 100.0% Profile of Debt Repayment Long Term 192,342 (Total: Ch$ 225,471 million) Short Term 17,559 20,912 33,129 33.
Slide 44: Successful Bond Issuance in the Local Market
FINANCIAL PERFORMANCE CHAPTER 04 SUCCESSFUL BOND ISSUANCE IN THE LOCAL MARKET Spread Analysis for Bonds Issuance in the Chilean Market with duration less than 5 years 180 160 Enjoy Enjoy BBB+/A- Iansa BBB+/A- Forum BBB+/BBB+ 140 AA+/AA- Factorline A/A 120 La Araucana CorpBanca Scotiabank A/A AA-/AA
Slide 45: 2011 Financial Plan Goal: To Support Growth for the Coming Years
FINANCIAL PERFORMANCE CHAPTER 04 2011 FINANCIAL PLAN GOAL: TO SUPPORT GROWTH FOR THE COMING YEARS 2011 Asset Optimization Plan & Financing of the Investment Plan Basis of Financial Plan for 2011 Activities ASSET OPTIMIZATION PLAN Inventories, Accounts Receivable and Accounts Payable Turnover Managem
Slide 46: Outlook for the Next Years
OUTLOOK FOT THE NEXT YEARS CHAPTER 05
Slide 47: Become a Leader in the Construction Industry
OUTLOOK FOR THE NEXT YEARS CHAPTER 05 BECOME A LEADER IN THE CONSTRUCTION INDUSTRY... NEXT 3 YEARS BECOME A LEADER IN THE CONSTRUCTION INDUSTRY IN THE SOUTH PACIFIC MARKET ….. NEXT 10 YEARS BECOME A LEADER IN THE CONSTRUCTION INDUSTRY IN THE LATIN AMERICAN MARKET