Empresas Copec S.a. · BCS:COPEC
Empresas Copec — Investor Presentation (January 2016)
46 slides from Empresas Copec's investor presentation, January 2016
Slide 1: Empresas Copec S.A.
EMPRESAS COPEC S.A. January 2016 www.empresascopec.cl
Slide 2: Empresas Copec
EMPRESAS COPEC Empresas Copec participates in natural resources and energy. FORESTRY FISHING / LIQUID FUELS GAS MINING NATURAL RESOURCES ENERGY 2
Slide 3: 80 Years of History
80 YEARS OF HISTORY 2013-2014 NEW BUSINESSES • Montes del Plata pulp 1986-2000 mill in Uruguay started INVESTMENTS AND operations GROWTH 2003 • Consolidation of the • Alto Paraná CORPORATE panel business • Arauco II RESTRUCTURING • Terpel completes its 1934 1970-1980 • Licancel • Creation of Empresa
Slide 4: Ownership Structure
OWNERSHIP STRUCTURE 74,36% 25,64% ANGELINI OTHERS GROUP ANTARCHILE S.A. 60,82% 5,50% 33,68% PENSION OTHERS FUNDS FORESTRY FUELS FISHING OTHER INVESTMENTS 99,98% 99,99% 99,05% 39,83% 81,93% 99,87% 50,00% 40,80% 12,00% 58,51% 66,80% 30,64% 51,00% Inversiones del Nordeste Fuente: Empresas Copec 4
Slide 5: Size
SIZE Empresas Copec is among MARKET CAPITALIZATION OF CHILEAN COMPANIES Chile’s largest publicly traded [US$ million] As of January 05, 2016 companies. 9,0% 15.220 11.434 10.756 It represents around 9,0% of 9.887 9.346 total market capitalization and 8.165 9,25% of the IPSA Index. 5.881 5.535 5.298
Slide 6: Business Sectors
BUSINESS SECTORS CONSOLIDATED EBITDA* CONSOLIDATED NET INCOME FUELS 33,6% FORESTRY 62,4% Total: Total: 34,5% MMUS$ 2,043 MMUS$ 856 FISHING 50,5% OTHERS INVESTMENTS 16,0% 2,6% -0,5% CONSOLIDATED ASSETS CONSOLIDATED INVESTMENTS CONSOLIDATED SALES 76,7% 67,4% Total: 66,6% Total: Total: MMUS$ 21,891 22,
Slide 7: Leadership in all businesses in which it participates
LEADERSHIP IN ALL BUSINESSES IN WHICH IT PARTICIPATES 2nd largest market pulp producer in the world 1st producer of sawn timber in Latin America 3rd largest panel producer in the world Th. tons Th. m3 Th. m3 Fibria West Fraser Kronospan Arauco 3.882 Weyerhaeuser Egger Canfor APRIL Arauco 6.663 Stora
Slide 8: Leadership in all businesses in which it participates
LEADERSHIP IN ALL BUSINESSES IN WHICH IT PARTICIPATES Fuels distribution in Chile* Lubricants distribution in Chile* Fuels distribution in Colombia** Otros Petromil Otros 16,5% 5% 2% Otros 7,5% Biom ax 10% Terpel Castrol 0,0% 2,4% Petrobras Texaco 3% Lubrax Ecospetroleo Terpel Mobil 1% Copec 5,4% 50
Slide 9: Empresas Copec CAPEX
EMPRESAS COPEC CAPEX 17,4 billion 2015 CAPEX DISTRIBUTION US$ Total estimated : US$980 million US$17,4 billion investment over the last 20 years CAPEX 37% 58% (US$ million) 2.000 1.800 1.600 1.400 1% 1.200 980 1.000 800 FORESTRY 600 FUELS 400 FISHING 200 0 OTHERS 92 93 94 95 96 97 98 99 00 01 02 03
Slide 10: Financial Strength
FINANCIAL STRENGTH 2008 2009 2010 2011 2012 2013 2014 3Q 2015 Profitability Operating margin 6,9% 6,2% 9,4% 5,2% 2,9% 4,6% 4,7% 5,9% Empresas Copec generates EBITDA margin 10,9% 11,1% 15,3% 9,6% 6,8% 8,1% 8,6% 11,1% healthy cash flows which allow BBB ROCE 9,6% 6,1% 9,6% 9,3% 5,9% 8,6% 8,8% 8,8% it t
Slide 11: Stock Watch
COPEC vs. IPSA Performance STOCK Last 10 years WATCH 900,00% COPEC CI Equity 700,00% Daily average liquidity IPSA Index 500,00% US$7 million (last 10-year average) 300,00% Historical performance exceeds the index (IPSA) 100,00% -100,00% Stock’s daily liquidity Stock’s price 12.000 (CLP million) (CLP
Slide 12: Financial Information
FINANCIAL INFORMATION EBITDA and EBITDA Margin Evolution Equity and Net Debt/Equity Evolution 2.000 20,0% 16.000 1,4 18,0% Covenant* 1,2x 14.000 1,2 16,0% 1.500 12.000 14,0% 1,0 12,0% 10.000 (MUS$) (MUS$) 0,8 1.000 10,0% 8.000 8,0% 0,6 6.000 6,0% 0,4 500 4.000 4,0% 2.000 0,2 2,0% 0 0,0% 0 0,0 08 09
Slide 13: Strong Commitment with Society and the Environment
STRONG COMMITMENT WITH SOCIETY AND THE ENVIRONMENT Community Environmental Biodiversity Important contribution to Reduction and management Conservation and protection of Education, Culture, Sports and of environmental impact biodiversity the Community • Efficient use of non dangerous • Certified cha
Slide 14: Forestry Sector
FORESTRY SECTOR Forestry 99.98% Source: Empresas Copec 14
Slide 15: Forestry operations by country
FORESTRY PULP SAWNTIMBER PANELS ENERGY Chile 725,006 5 mills 8 sawmills 5 facilities 10 plants hectares 2.88 million tons. 2.6 million m3 Plywood: 710 Th m3 606 MW MDF: 515 Th m3 Surplus: Hardboard: 60 Thm3 209 MW MDP: 300 Thm3 Argentina 131,110 1 mill 1 sawmill 2 facilities 2 plants hectares 350 Th
Slide 16: Forestry Management
FORESTRY FORESTRY MANAGEMENT Arauco’s Plantations (in ‘000 hectares) 1.015 • Forestry – the base for growth 1.000 • Strategically located plantations 800 • deal conditions for forests growth – fast growth rate and 600 short harvest cycle • Efficient forest management, guaranteeing the sustainability
Slide 17: Forestry Competitive Advantages
FORESTRY COMPETITIVE ADVANTAGES Arauco’s position in the supply curve assures a superior operating performance. ARAUCO’S CASH COST WORLD PULP SUPPLY CURVE Total Cash Cost: US$ 368/ ton 700 Labor and Others* 28% 600 500 East Canada Cash Cost (US$/tonne) U.S.A. China Sweden West Canada Finland Others
Slide 18: Competitive Advantages
FORESTRY COMPETITIVE ADVANTAGES The integral and efficient use of resources allows Arauco to maximize the value of the forest. Energy to the Grid (239 MW) 606 MW 18
Slide 19: Geographic and Product Diversification
FORESTRY GEOGRAPHIC AND PRODUCT DIVERSIFICATION PULP SALES (US$ 2,334 million) Others Rest of 6% America 17% Asia CONSOLIDATED SALES BY REGION 57% Europe Total: US$ 5,329 million 14% Chile Rest of 8% Chile America Others 6% 22% 4% PANELS SALES SAWN TIMBER SALES (US$ 1,851 million) (US$ 962 million)
Slide 20: Pulp Expansions
FORESTRY PULP EXPANSIONS Expansions in Pulp (million tons) In operation Potentially Montes del Plata 4,9 million tons • In June 2014, Montes del Plata, the new pulp mill in Uruguay started Capacity as of September 2014: 3,9 million tons +26% operations (joint venture between Arauco and Stora Enso) •
Slide 21: Panels Expansion
FORESTRY PANELS EXPANSION Expansions in Panels (million of m3) In Operation Moncure • Moncure panel mill, USA acquired in 2012 Capacity as of September 2014: • Installed capacity of 600 th. m3 (MDF y PBO) 6,6 million of m3 • Investment of US$ 62 million +166% Teno 0,5 0,36 • Started operations in Ju
Slide 22: Market Outlook
FORESTRY MARKET OUTLOOK Short term Long term • China continues to show good levels of demand • No significant softwood capacity coming on stream • World demand increased 3.4% in the first 10 months of 2015 • Demand growing between 2-3% per year • As of October inventories were at 30 days for long fi
Slide 23: World Demand Growth
FORESTRY WORLD DEMAND GROWTH • World demand increased 2.1% in 2014 • As of October Chinese demand increased 12.6%, North American demand rose 0.6% and Western Europe remained stable, with respect to October 2014 Aggregated Demand World Demand Changes Million tons (Oct 2015 vs. Oct 2014) 40 12,6% 30
Slide 24: Growth Drivers
FORESTRY GROWTH DRIVERS 36% PAPER CONSUMPTION Kg. Per capita 300 Germany USA 250 With 36% of the world’s JapanSweden population, China and India 200 Italy Canada still have a long path to Korea UK walk. 150 Spain France 100 Chile China Mexico 50 Brazil Russia 0 India 0 10 20 30 40 50 60 GDP* per cap
Slide 25: Fuels Sector
FUELS SECTOR Fuels 99.99% 99.05% 39.83% 58.51% 40.80% 12.00% 51.00% Inversiones del Nordeste 25
Slide 26: Significant Presence in Latin America
FUELS SIGNIFICANT PRESENCE IN LATIN AMERICA MÉXICO NGV REPÚBLICA DOMINICANA Liquid Fuels EBITDA Fuels Last 12 months PANAMA Total: MMUS$ 708 Liquid Fuels Sonacol COLOMBIA 8% IN Liquid Fuels NGV ECUADOR 4% Liquid Fuels PERU NGV Liquid Fuels Terpel Copec 27% 49% CHILE Liquid Fuels LPG Oil Pipelines Ab
Slide 27: Copec Liquid Fuels Division
FUELS COPEC LIQUID FUELS DIVISION SERVICE STATIONS • 485 th. clients served on average per day • 59.3% Chilean fuel sale market share • 42.1% service stations market share • High operational efficiency: 27% over the closest competitor CONVENIENCE STORES • Largest convenience store network in Chile:
Slide 28: Copec Liquid Fuels Division
FUELS COPEC LIQUID FUELS DIVISION • Coverage: • 621 service stations • 14 storage plants • COPEC consistently outperforms the rest of the market in terms of operating efficiency: • Prime locations • Brand recognition Fuel sales per Service Station Preference of service stations in Chilean highways (
Slide 29: Copec Historical Performance in Fuels Business
FUELS COPEC HISTORICAL PERFORMANCE IN FUELS BUSINESS • Copec has reached a stable market share of 58% - 60%. • Copec’s market share has gradually stabilized within this range following a period of peak demand related to shortages in gas imports from Argentina • Consolidation of the new service stati
Slide 30: Acquisition of Terpel Colombia
FUELS ACQUISITION OF TERPEL COLOMBIA US$ 760million % Market Share Business Lines • Through a series of acquisitions in the open market between May 2010 and March 2012, Copec reached 58.89% of Terpel • Total investment reaches US$760 million Figures as of Dec-2014 30
Slide 31: Acquisition of Terpel Colombia
FUELS ACQUISITION OF TERPEL COLOMBIA High growth potential EBITDA Terpel (th. $COP) • High growth potential in the Colombian market: 517.801 • Colombia’s vehicular penetration is lower than in Chile +24,0% • Low highway vehicular flows 417.707 • Low market penetration of convenience stores business
Slide 32: Acquisition of Terpel Colombia
FUELS ACQUISITION OF TERPEL COLOMBIA Liquid fuels distribution in NGV distribution in Main player in the Colombian fuels market Colombia Colombia • 45% liquid fuels market share in Colombia • 47% in Natural Gas for Vehicles (NGV) 45% 47% • 2.089 gas stations, largest network in the country • Presenc
Slide 33: LPG: Abastible
FUELS LPG: ABASTIBLE Abastible: Important player in LPG distribution in Chile LPG sales in Chile (th. tons) • More than 1.5 million residential clients, 6 million gas cylindersand 1,500 distributors in Chile CAC: 2,9% • Physical sales over 427 th. Tons of LPG in 2014 • 2nd largest player in Chile 40
Slide 34: Natural Gas: Metrogas
FUELS NATURAL GAS: METROGAS • Empresas Copec participates in distribution and commercialization of natural gas through its stake in Metrogas • It owns 39,8% of the company • Distributes natural gas to more than 480,000 customers in the Metropolitan Region and supplies 90% of industrial consumption.
Slide 35: Main Related Companies
MAIN RELATED COMPANIES Fishing Other Investments 81.93% 99.87% 50.00% 66.80% 30.64% 35
Slide 36: Other Investments
OTHER INVESTMENTS MINA INVIERNO GOLDEN OMEGA CAN-CAN • Production of fish oil – based Omega 3 • Bronce de Petorca gold mine • Coal mine in the Magallanes Region concentrates • Resources: 516 million tons currently operating • Reserves: 250 million tons • Only vertically integrated producer in • Dieg
Slide 37: Latest Developments
FORESTRY LATEST DEVELOPMENTS ARAUCO PURCHASES 50% OF TAFISA AND ENTERS EUROPEAN AND SOUTH AFRICAN MARKETS • The US$150 million investment will allow Arauco to share control of this company that will operate two panel mills and one saw mill in Spain; two panel mills and one resin facility in Portugal
Slide 38: Latest Developments
FORESTRY / FUELS LATEST DEVELOPMENTS ARAUCO ANNOUNCES THE CONSTRUCTION OF A PANEL MILL TERPEL PARTICIPATES IN BIDING PROCESS FOR IN THE UNITED STATES PETROBRAS’ ASSETS IN COLOMBIA • Continuing with the internationalization of the company, Arauco announced the construction of a 750,000 m³/yr Particle
Slide 39: Latest Developments
FORESTRY LATEST DEVELOPMENTS ENVIRONMENTAL IMPACT STATEMENT (EIS) APPROVED ARAUCO WILL INVEST US$ 30 MILLION IN EXPANSION OF FOR THE VALDIVIA PROJECT PARTICLEBOARD MILL IN THE UNITED STATES • In February the environmental assessment department (EAD) approved the environmental impact statement (EIS)
Slide 40: Latest Developments
FORESTRY LATEST DEVELOPMENTS MONTES DEL PLATA STARTED OPERATIONS NUEVA ALDEA PLYWOOD MILL STARTED OPERATIONS • The first shipment was sent in July. • Arauco completed the reconstruction of its new plywood mill at the Nueva Aldea forestry and industrial complex to • Full capacity expected to be reach
Slide 41: Latest Developments
LATEST DEVELOPMENTS TERPEL ISSUES BONDS IN THE COLOMBIAN SECURITIES EMPRESAS COPEC MAKES SUCCESSFUL BOND MARKET PLACEMENT • Terpel issued bonds of COP$400 billion (about US$166 million) in • Empresas Copec S.A. made a successful corporate bond the securities market in Colombia with 7- and 15-year ma
Slide 42: Latest Developments
FUELS LATEST DEVELOPMENTS SALE OF TERPEL CHILE S.A. IS COMPLETED TERPEL COMPLETES ITS RESTRUCTURING PROCESS • Terpel Chile S.A. was sold in the quarter to • The company completed the process of merging the companies Quiñenco S.A. for US$239 million. Proenergía Internacional, Sociedad de Inversiones
Slide 43: Latest Developments
OTHER INVESTMENTS LATEST DEVELOPMENTS EMPRESAS COPEC SOLD ITS STAKE IN GUACOLDA NEW GOLDEN OMEGA PRODUCTION LINE • Empresas Copec, together with Ultraterra, announced early this • Golden Omega is commissioning its new selective crystallization year the intention to offer its share in Guacolda to thi
Slide 44: Sustainable Financial Strength
Sustainable EVOLUTION OF MARKET CAPITALIZATION (MMUS$) 30.000 Sustainable competitive advantages in every sector in which it participates 25.000 Financial 20.000 strength 15.000 10.000 Expansion 5.000 Significant expansion plans 0 Diversification Business, country and market diversification 44
Slide 45: Analysts Coverage Contact Information
Analysts coverage Company Analyst Contact information Banchile Andrew McCarthy andrew.mccarthy@banchile.cl (56 2) 2873 6126 Banco Penta Juan Pablo Moraga juan.moraga@bancopenta.cl (56 2) 2873 3298 Barclays Pedro Grimaldi pedro.grimaldi@barclays.com (55 11) 3757 7297 BBVA Research Hernán Guerrero hgu
Slide 46: Empresas Copec S.A.
EMPRESAS COPEC S.A. www.empresascopec.cl
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