Grupo Mexico S.A.B. de C.V. Class B · BMV:GMEXICO/B
Grupo Mexico S.A.B. de C.V. Class B — Global Metals and Mining Conference 2010
30 slides from Grupo Mexico S.A.B. de C.V. Class B's conference presentation, May 2010
Slide 1: Global Metals and Mining Conference
Global Metals and Mining Conference Miami, FL - May 11 - 13, 2010
Slide 2: Contents
CONTENTS I. Grupo Mexico Overview II. Southern Copper Corporation III. Asarco IV. Transportation Division V. Infrastructure Division VI. Final Remarks 2
Slide 3: Why Invest in Grupo Mexico?
Why Invest in Grupo Mexico? • Leading global copper producer - # 1 worldwide reserves with excellent growth prospects - Strengthened position as top copper producer with recovery of Asarco - Unmatched assets diversified in investment grade countries - Low cost leader with fully integrated operations
Slide 4: Complementary Divisions with Relevant Growth Potential
Complementary Divisions with Relevant Growth Potential 40% Public GMEXICOB Float MINING TRANSPORTATION INFRASTRUCTURE 100% 74.9% 100% Infraestructura y Americas Mining México Proyectos Transportes Mexico Corporation (AMC) y Desarrollo (ITM) 25.1% 80% 100% 100% 74% Southern Infraestructura Grupo 26%
Slide 5: Key Strategic Catalysts
Key Strategic Catalysts Cananea Recovery Close at Hand Tia Maria Project Development On Track ► Obtained final, none-appealable resolution ► Project generating 120kty of Cu on track for authorizing termination of collective bargaining production by 4Q11 agreement and all individual worker contracts
Slide 6: Significant Cash Generation Capabilities, focused on Organic Growth
Significant Cash Generation Capabilities, focused on Organic Growth Market Cap as of May 4, 2010: $20,747 Millions of USD 2007 2008 2009 1Q10 Copper Price (Avg. cts/lb) 322 315 234 3.28 Revenues 7,078 5,946 4,831 1,933 Mining Division 86% 82% 79% 85% Transportation Division 14% 18% 19% 14% Infrastru
Slide 7: II. Southern Copper Corporation
II. SOUTHERN COPPER CORPORATION (New NYSE Ticker: SCCO) 7
Slide 8: Copper – The Best Fundamental Story in Commodities
Copper – The Best Fundamental Story in Commodities Improving Fundamentals Copper Consumption by Region ► Continued strong demand from China which grew from 26% in ’08 to 36% in ‘09 ► Clear evidence or gradual OECD demand recovery ► China’s monetary tightening should not derail country's sustained gr
Slide 9: World Class Assets in Investment Grade Countries and Easy Access to Consumers
World Class Assets in Investment Grade Countries and Easy Access to Consumers Location of Operations 2009 Renueve by Product & Market Mexico Cananea La Caridad Santa Eulalia Buenavista Nueva Rosita Santa Barbara El Arco San Martin Charcas San Luis Potosi Angangueo Taxco Peru Tantahuatay Key Mines Sm
Slide 10: Lowest Cost Copper Producer well Below Marginal Cost of Production
Lowest Cost Copper Producer well Below Marginal Cost of Production Cash Costs per Pound of Copper Low Cost Drivers Produced Net of By-Products 0.7 0.55 • Fully integrated low cost operations 0.5 0.42 0.36 • World class assets 0.22 0.36 0.3 • Significant SX-EW production (US$/lb) 0.1 0.12 • Strong by
Slide 11: World's Largest Copper Reserves Support Substantial Organic Growth Potential
World’s Largest Copper Reserves Support Substantial Organic Growth Potential Copper Reserves as Reported SCC Highlights #1 position in reported copper reserves 60 56.2 #1 mine life among copper producers 52.6 #6 world’s largest producer of mined copper 50 47.2 Highly diversified geographical
Slide 12: Attractive Organic Growth Prospects
Attractive Organic Growth Prospects 2011 2012 2013 2014 2015 2016 2017 Tia María Toquepala IloRefinery El Arco Buenavista Angangueo Cuajone SX/EW Concentrator Concentrator Expansion Mine Expansion Cananea Los Expansion llo Smelter Moly Zinc Chancas La Caridad Expansion Circuit Refinery Concentrartor
Slide 13: Top Tier Margins and Conservative Leverage for Increased Financial Flexibility
Top Tier Margins and Conservative Leverage for Increased Financial Flexibility 2010 EBITDA Margin (%) 2010E Total Debt / EBITDA (x) No Amortizations Until 2015 2010 $10 SCCO* 57% SCCO 0.77 2011 $10 Antofagasta 57% Freeport 0.82 2012 $10 Freeport* 53% Antofagasta 0.97 Mitsui $10 Yankee Bonds 2013 BHP
Slide 14: SCC is the Premier Copper Play
SCC is the Premier Copper Play • World class assets in investment grade countries • #1 in reserves with various exploration prospects - Increasing copper production • Capacity to deliver projects through flexible capital structure and significant cash generation capability • Fully integrated low cos
Slide 15: SCC - Significant Cash Generation Capabilities, focused on Organic Growth
SCC - Significant Cash Generation Capabilities, focused on Organic Growth Market Cap as of May 4, 2010: $25,781 (US$ MM) 2007 2008 2009 1Q 2010 Copper Price (LME) US$ per pound 3.23 3.16 2.33 3.28 Copper Production (Metric Tons) 592,182 488,929 485,376 109,244 Income Statement: Net Revenues $6,086 $
Slide 16: III. Asarco
GRUPOMEXICO lll. ASARCO
Slide 17: Asarco #3 Cu Producer in the US, with Significant Reserves Growth Potential
Asarco #3 Cu Producer in the US, with Significant Reserves Growth Potential Active operations consist of: – 3 open-pit copper mines in Arizona (Mission, Ray and Silver Bell) – 1 copper smelter in Hayden, Arizona – 1 copper refinery and precious metals plant in Amarillo, Texas – 2,328 total employees
Slide 18: Significant Value with Upside Potential
Significant Value with Upside Potential ASARCO – A Profitable Operation Reserves and Production ► ASARCO is free and clear of all liabilities ► 5MM tons of contained copper reserves ► Proven operational assets in strategic location (US) ► 230kt copper per year – Resolved contract disputes with union
Slide 19: Asarco Substantial Cash Generation Based on Copper's Positive Perspective
Asarco Substantial Cash Generation Based on Copper’s Positive Perspective US $ Million 2007 2008 2009 1Q10 Copper Price (Avg. Cts/lb) 322 315 234 328 Copper Production (MT) 190,323 185,898 49,608 Income Statement: Net Revenues 1,850.4 1,864.1 1,164.9 417.6 EBITDA 651.2 491.9 360.2 180.5 % Margin 35%
Slide 20: Transforming GMexico into a 1MM Ton Copper Producer
Transforming GMexico into a 1MM Ton Copper Producer Copper Reserves at Equivalent Price of $1.80 2010 Reported Cash Cost (USD per pound) (in MM MT of contained copper) SCC SCC + ASARCO 61.2 SCC 56.2 Codelco 53.8 Freeport 40.0 Anglo American 32.7 BHP 23.2 Xstrata 16.7 Rio Tinto 12.3 Internally estima
Slide 21: IV. Transportation Division
IV. TRANSPORTATION DIVISION 21
Slide 22: Mexico's Leading Railroad
Mexico’s Leading Railroad Connects with: ► 5 gateways along the Mexico-U.S. border ► 4 seaports on the Pacific Ocean ► 4 seaports on the Gulf of Mexico Mexican Railway Load Distribution (Million Ton-km) Regional Ferrosur, Lines, 5% 9% Ferromex tracks Ferromex, Rights-of-way 46% Other railroad tracks
Slide 23: Diversified Customer Base Allows for Stable Cash Flows
Diversified Customer Base Allows for Stable Cash Flows Ferromex Volume Cargo Growth Ferromex Diversified Product Mix 45,000 900,000 40,000 800,000 35,000 700,000 30,000 RAILCARS TON-KM 600,000 25,000 500,000 20,000 400,000 15,000 10,000 300,000 5,000 200,000 Year 98 99 00 01 02 03 04 05 06 07 08 09
Slide 24: ITM – Well Managed and Sizable Business Unit
ITM¹ – Well Managed and Sizable Business Unit US $ Million 2007 2008 2009 1Q10 Load Volumen (Million Tons/Kms) 47,122 46,879 46,038 12,146 Income Statement: Net Revenues 1,240.7 1,339.3 1,143.5 328.3 EBITDA 393.1 416.6 334.9 109.5 % Margin 32% 31% 29% 33% Net Income 153.1 154.5 87.6 45.8 Balance She
Slide 25: V. Infrastructure Division
V. INFRASTRUCTURE DIVISION 25
Slide 26: Executing on Attractive Growth Opportunities that Complement Existing Divisions
Executing on Attractive Growth Opportunities that Complement Existing Divisions • Leverage GMexico’s existing large scale construction and concession management expertise: – Synergies from existing businesses structure – Projects with strategic fit to GMexico’s mining and rail businesses (e.g. port
Slide 27: Strategically Positioned to Seize High Return Opportunities
Strategically Positioned to Seize High Return Opportunities • Relevant experience in construction, successfully developing infrastructure projects for more than 60 years • Strategically positioned for high growth opportunity in the recovering petrochemical services space – Drilling equipment shortag
Slide 28: Infrastructure Projects that Generate Value, Experience and Synergies
Infrastructure Projects that Generate Value, Experience and Synergies PEMSA Acquisition Ongoing Infrastructure Projects • Relevant land and sea drilling assets • 2009 won a $50 million bid from the CFE • First and only Mexican company offering to build 2 tunnels to divert flow of Grijalva entire ran
Slide 29: VI. Final Remarks
VI. FINAL REMARKS 29
Slide 30: Very positive outlook with Asarco's resolution, Cananea favorable ruling
Very positive outlook with Asarco’s resolution, Cananea favorable ruling, Ferromex - Ferrosur combination. Leading global copper producer #1 in reserves & excellent organic growth prospects High-margin, low-cost leader with fully integrated operations Strong financial performance / investment grade
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