Cap S.a. · BCS:CAP
Cap — 7th Annual Andean Conference 2013
38 slides from Cap's conference presentation, Mar 20, 2013
Slide 1: 7th Annual Andean Conference 2013
7th Annual Andean Conference 2013 W Hotel, Santiago, March 20th, 2013
Slide 2: Agenda
Agenda Company overview Global industry update Financial performance Business plan Conclusion
Slide 3: CAP S.A. – Vertically integrated company
CAP S.A. – Vertically integrated 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 Consolidated Revenues, EBITDA(1) and Net Income of US$ 2.5 billion, US$ 764 million and US$ 231 million
Slide 4: Corporate structure
Corporate structure Corporate structure
Slide 5: Iron ore mining
Iron ore mining Los Colorados Mine, Huasco, Chile
Slide 6: Iron ore mining operations
Iron ore mining operations Consist of three different and independent Punta Totoralillo Port areas of operation in the north of Chile, Cerro Negro Norte (*) located around the cities of La Serena, Desalination Plant (*) Copiapó Vallenar and Copiapó: Magnetite Plant Cities Los Colorados (**) Guacolda
Slide 7: Shipments and markets
Shipments and markets Shipments Shipments by markets and products 2012 14.000 12.246 12.000 11.469 8% 3% 1% 10.145 10.213 9% 10.000 65% 8.000 Th. MT 7.251 15% 6.000 4.000 2.000 0 China Chile Japan Bahrein Indonesia USA 2008 2009 2010 2011 2012 11% 15% 3% Self - fluxing pellets 5% 1% 1% DR H&L pellet
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) 986 34,8% 244 46,4% El Romeral 459 28,3% 105 30,2% El Algarrobo 133 45,9% 46 49,3% Hierro Atacama I - Candelaria (3) 2
Slide 9: Steel production
Steel production Huachipato, Talcahuano, Chile
Slide 10: Steel production
Steel production Market share o The leader in Chile’s steel market 70% 66% 58% 60% o 1.45 million tons of annual liquid steel 60% 50% production capacity 50% 55% 37% 40% 47% 47% o Strong long term commercial relations 38% 30% with customers in Chile 30% 20% o Vertical integration in iron and 10% Ear
Slide 11: Steel processing
Steel processing Cintac, Santiago, Chile
Slide 12: Steel processing
Steel processing o Creates value-added solutions for the construction, industry and infrastructure sectors in 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 700 1.252 1.300 1.199 Sales by Secto
Slide 13: Agenda
Agenda Company overview Global industry update Financial performance Business plan Conclusion
Slide 14: Areas to watch
Areas to watch U.S. Economic Activity under Recovery China s Economic Growth Rate LATAM Growth and Development 14
Slide 15: Iron ore spot and quarterly prices
Iron ore spot and quarterly prices Source: Platts, March 2013 15
Slide 16: Evolution of steel prices
Evolution of steel prices North America Europe Asia Metallics Flats Longs Source: www.crugroup.com, March 2013 16
Slide 17: Evolution of key raw materials
Evolution of key raw materials Metallurgical Coal Baltic Dry Index Source: CAP and The Baltic Exchange, Jan 2013 17
Slide 18: Growing world steel and China's production
Growing world steel and China’s´production In 2012, the WORLD Crude Steel production was 1.549 MT, a 1.4 % growth over 2011 In 2012, China crude steel production grew a 3,2% and the iron ore imports grew 8,3%. Source: WSA, Feb 2013 18
Slide 19: Uses of steel in China
Uses of steel in China February 2013 19
Slide 20: Global urbanization
Global urbanization World urban population growth (Billion people) 75 7.0 j 65 4 60 4 The world is set to urbanise jos | . close to another 3 billio 5.5 4 people by the as] 50 of the century 45 | 404 35 4 30 4 . . 2010 China India Other Africa Urban Asia Pop. RoW 2050 Urban Pop. Source: UN, McKinsey
Slide 21: China's urbanization
China’s urbanization February 2013 February 2013 21
Slide 22: Sustained growth of steel consumption
Sustained growth of steel consumption February 2013 22
Slide 23: Agenda
Agenda Company overview Global industry update Financial performance Business plan Conclusion
Slide 24: Financial evolution
Financial evolution USD Million 2008 2009 2010 2011 2012 Sales 1.972 1.375 1.994 2.787 2.470 EBITDA 534 128 740 1.184 764 EBITDA Margin 27,1% 9,3% 37,1% 42,5% 30,9% Net Income 291 25 590 442 231 Cash 379 393 981 883 711 Gross Financial debt 880 907 1.001 628 719 Net Financial debt 501 514 20 (255) 8
Slide 25: Financial performance
Financial performance Sales (US$ million) EBITDA (US$ million) 3.000 2.787 1.400 2.470 1.184 2.500 1.200 1.972 1.994 1.000 2.000 1.583 740 763 800 1.500 1.375 600 534 1.000 400 336 500 128 200 0 0 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Gross financial debt (US$ million) Net fina
Slide 26: CAP S.A. - Debt maturity profile
CAP S.A. - Debt maturity profile 200 Total US$ 542 million 180 171 160 140 120 113 US$ Million 100 80 63 63 67 60 40 24 20 13 7 3 3 3 3 3 4 1 0 2013 2014 2015 2016 2017 2018 2019 2020 2021-2036 Banks 144A Bond PF - Cleanairtech (Drawdown) Local Bond 26
Slide 27: EBITDA contribution by business
EBITDA contribution by business 120% 100% 97% 94% 94% 80% 77% 60% 50% 42% 40% 18% 20% 8% -3% 6% 6% -2% 8% 5% 0% 0% 2008 2009 2010 2011 2012 -20% Iron Steel Steel Processing 27
Slide 28: Agenda
Agenda Company overview Global industry update Financial performance Business plan Conclusion
Slide 29: Development program underway
Development program underway Los Colorados (brownfield expansion) • Current production: 5.2 million tonnes / Pellets and pellet feed • Projected increase: 2.0 million tonnes / Pellet Feed • Under construction and estimated production start-up: 1S 2013 • CAPEX: US$ 413 million Cerro Negro Norte (gree
Slide 30: Development program underway
Development program underway Romeral Phase V (mine life extension) • CAPEX: US$ 198 million • Start - up: 1S 2014 Desalination plant • Capacity up to 400 lt/sec • Under construction and estimated production start-up: September 2013 • CAPEX: US$ 360 million 30
Slide 31: Iron ore - Production capacity
Iron ore - Production capacity Production (Th. tonnes) 20.000 18.007 18.102 18.000 16.960 16.000 14.000 12.878 12.202 12.000 10.000 8.000 6.000 4.000 2.000 0 2012 2013 2014 2015 2016 o The market projects a stronger demand for high quality pellet feed o In 2012 the average cash cost per ton was US$
Slide 32: Iron ore – Cash cost curve
Iron ore – Cash cost curve CMP • CMP has a very competitive cash cost position 32
Slide 33: Steel production
Steel production o Domestic demand for steel is strongly influenced by Construction and Mining sectors. Demand for long steel in Chile substantially exceeds that for flat steel, due to the dinamism of the above mentioned industries o Optimization of its steel production capabilities, through a gradu
Slide 34: Steel processing
Steel processing o Main focus is to serve the construction, industry and infrastructure sectors o Chile is Latin America’s most advanced user of steel in construction o Operating at full capacity in Chile since 2010, following the country´s GDP o Growth focus in Peru and interest to enter Colombia a
Slide 35: Agenda
Agenda Company overview Global industry update Financial performance Business plan Conclusion
Slide 36: Strong fundamentals
Strong fundamentals o Substantial growth in the iron ore business o Further expansion to 30 – 40 million tonnes possible through iron ore development projects currently under consideration o Steel strategy to maintain its predominant position in Chile and have at least neutral EBITDA contribution to
Slide 37: 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 38: www.cap.cl
BEG LarrainvVial www.cap.cl