Cap S.a. · BCS:CAP
Cap — 2° Cumbre Latinoamericana Mercado Integrado 2011
35 slides from Cap's conference presentation, November 2011
Slide 1: 2° Cumbre Latinoamericana Mercado Integrado
2° CUMBRE te UATINOAMERICANA LATINOAMERICANA INTEGRADO MERCADO INTEGRADO CORPBANCA ©
Slide 2: Agenda
Agenda Company overview Global industry Financial Business Plan Conclusion update performance 2
Slide 3: Vertically integrated ferrous metal company
Vertically integrated ferrous metal company o Exports iron ore products, mainly to Asia o Produces steel for the domestic market o Processes value‐added steel solutions in Chile, Peru and Argentina o The above allows for a balanced and profitable business portfolio o 3Q Consolidated C lid t d Revenu
Slide 4: Corporate structure
Corporate structure Mitsubishi Pension Invercap Other Corporation Funds 19,3% 9,7% 31,3% 39,7% 47,32% 52,68% 75,0% 99,9% 25,0% Compañía Minera Compañía Siderúrgica Novacero del Pacífico Huachipato 50,93% 50,93% 11 03% 11,03% 11 03% 11,03% Cintac Intasa I Iron O Ore Mi Mining i Steel Production Steel
Slide 5: Iron ore mining
Iron ore mining Los Colorados mine
Slide 6: Iron ore mining operations
Iron ore mining operations There are currently three different and Punta Totoralillo Port independent areas of operation in the north Cerro Negro Norte of Chile, located around the cities of La Copiapó Serena, S Vallenar V ll and d Copiapó: C i ó Magnetite Plant Cities Guacolda II Port Los Colorados
Slide 7: Shipments and markets
Shipments and markets Shipments Markets (September 2011) 12 000 12.000 10.145 10.213 7% 2% 10.000 14% 8.377 8.406 7.579 7.674 59% 7.312 7.251 8.000 Th. MT 6.000 18% 4.000 2 000 2.000 0 2004 2005 2006 2007 2008 2009 2010 Sep‐11 China Chile Japón Indonesia EEUU 7
Slide 8: Resources and reserves of magnetite ore
Resources and reserves of magnetite ore Mine / Deposit Total Mineral Resources (1) Reserves (2) MTM Grade (% Fe) MTM Grade (% Fe) Existing operations Los Colorados (under expansion) + District 437 45,0% 256 43,6% El Romeral 282 33,9% 86 39,7% El Algarrobo 143 41,3% 47 47,8% Hierro Atacama I ‐ Candel
Slide 9: Steel production
Steel production Blast Furnace at CSH
Slide 10: Steel production
Steel production o The leader in Chile’s steel market Market share 70% 65% 58% 66% o 1.45 million tons of annual liquid steel 60% 55% Earthquake 56% 50% 55% production capacity 47% 37% 43% 40% 30% 30% o Strong long term commercial relations 20% with customers in Chile 10% 0% o Vertical integration i
Slide 11: Steel processing
Steel processing cAPp
Slide 12: Steel processing
Steel processing o Creates value‐added solutions for the construction, industry and infrastructure sectors in Chile, Chile Peru and Argentina o Chile is Latinamerica’s most advanced user of steel in construction o Seeks to promote steel consumption Shipments and prices 1.400 600 1 199 1.199 1.258 1.
Slide 13: EBITDA by business unit
EBITDA (1) by business unit 97% 99% 100% 80% 77% 60% 54% 52% 50% 47% 40% 42% 38% 36% 40% 18% 20% 13% 12% 8% 8% 6% 5% 4% ‐3% ‐3% 0% 2005 2006 2007 2008 2009 2010 Sep‐11 ‐20% CMP CSH SPG 13 (1) EBITDA: Gross Margin – S&AE + Depreciation + Dividends received in cash, over the last twelve months
Slide 14: Agenda
Agenda Company overview Global industry Financial Business Plan Conclusion update performance 14
Slide 15: Global environment
Global environment o During the last months, we experienced important macroeconomic events Date Event June Expiration of Quantitative Easing in the U.S. (QE2) July Acceleration of European debt crisis (Greece restructuring announced) August Historic downgrade of United States credit rating September
Slide 16: Areas of concern
Areas of concern cAp European Sovereign kal co Historic U.S. os Rating R China’s Downgrade a Economic Growth Rate 16
Slide 17: Iron ore price
Iron ore price o The fall in iron ore prices is reflecting an aggressive destock, but not a collapse in real demand Source: Macquarie Research, 2011 17
Slide 18: Iron ore demand
Iron ore demand o China moving from destocking to restocking could add 80 mtpa to global iron ore demand Source: Macquarie Research, 2011 18
Slide 19: Iron ore spot and quarterly prices
Iron ore spot and quarterly prices 205 Platts IODEX (CFR China) 180 2T11 3T11 2%Fe) US$ / Ton (Fines 62 155 1T11 130 Quarterly Price CFR China 105 80 Jan/11 Feb/11 Mar/11 Apr/11 May/11 Jun/11 Jul/11 Aug/11 Sep/11 Oct/11 Nov/11 Source: Platts, November 2011 19
Slide 20: Projects announced v/s delivered
Projects announced v/s delivered o High cost of infrastructure and longer periods of construction o Increasing requirements for the approval of environmental permits o Strong increase in Capex o High percentage of announced projects delayed 20
Slide 21: Strong increase in Capex
Strong increase in Capex Source: JP Morgan Research o It is getting more expensive to add new capacity, even for the big 3 21
Slide 22: Evolution of raw material prices
US$/TTon 50 0 100 150 200 250 300 350 Source: CAP and The Baltic Exchange 2011 Metallurgical Coal 0 2.000 4.000 6 000 6.000 8.000 10.000 12.000 1/2/2004 4/2/2004 7/2/2004 10/2/2004 Evolution of raw material prices 1/2/2005 4/2/2005 7/2/2005 10/2/2005 1/2/2006 4/2/2006 7/2/2006 10/2/2006 1/2/2007 4/2
Slide 23: Evolution of steel prices
Evolution of steel prices North America Europe Asia Metallics Flats Longs 23
Slide 24: Agenda
Agenda Company overview Global industry Financial Business Plan Conclusion update performance 24
Slide 25: Financial performance
Financial performance Sales (US$ million) EBITDA (1) (US$ million) 1.400 2.500 1.185 2.121 1.200 1.972 1.994 2.000 1.000 1.583 1.500 1.375 800 740 997 600 534 1.000 400 336 247 500 200 128 0 0 2006 2007 2008 2009 2010 Sep‐11 2006 2007 2008 2009 2010 Sep‐11 Gross Financial Debt / EBITDA Net Financial
Slide 26: Debt reduction
Debt reduction o Strong EBITDA performance f (approx. ( US$ $ 100 million/month) illi / h) is i permitting: i i • Redemption of two local and one international bond issues and a negative Net Financial Debt position • Self financing of current iron ore expansion projects • Greater quarterly interim d
Slide 27: Agenda
Agenda Company overview Global industry Financial Business Plan Conclusion update performance 27
Slide 28: Development program underway
Development program underway Cerro Negro Norte (greenfield project) • Production: 4.0 million tonnes / Pellet feed • Estimated production start‐up: 1H 2013 Los Colorados (brownfield expansion) • Current production: 5.2 million tonnes / Pellets and pellet feed • Projected increase: 2.0 million tonnes
Slide 29: Iron ore production capacity
Iron ore production capacity Production (million ton) 18,0 16,2 4,0 13,8 , 4,0 12,0 12,0 2,5 3,0 2,3 2,1 2,6 2,2 6,2 6,5 8,2 7,2 7,9 3,5 3,5 2,8 1,9 1,7 2011 2012 2013 2014 2015 El Romeral Los Colorados MHA I Cerro Negro Norte o Production capacity will increase from 12 million MT in 2010 to 18 mill
Slide 30: Steel
Steel o After overcoming damages produced by the earthquake in February 2010, CAP has nearly recovered its historic level of market share o CAP’s long term development plan currently under consideration. Principal goal is to ensure supply of a growing Chilean market with tonnages of CAP’s own steel
Slide 31: Steel processing
Steel processing o Chile is Latin America’s most advanced user of steel in construction o Operated at full capacity in Chile during 2010 – 2011 fiscal years, years helping the country’s recovery efforts following the earthquake o Growth focus in Chile, Peru, Argentina and Brazil. Potential interest
Slide 32: Agenda
Agenda Company overview Global industry Financial Business Plan Conclusion update performance 32
Slide 33: Strong fundamentals
Strong fundamentals o Substantial growth in iron ore o Further expansion to 30 – 40 million tons possible through development projects currently under consideration o Steel strategy to consolidate already predominant position in Chile o CAP group is well placed to benefit from growth potential for s
Slide 34: Forward-looking statements disclaimer
This information material may include certain forward‐looking statements and projections provided by CAP S.A. (the “Company“) with respect to the financial condition, results of operations, cash flows, plans, objectives, future performance, and business of the Company. Any such statements and projec
Slide 35: www.cap.cl
www.cap.cl
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