Salfacorp S.A. · BCS:SALFACORP

Salfacorp — III Chile Equity One on One Conference – London, May 2013

43 slides from Salfacorp's conference presentation, May 2013

  1. Slide 1: SalfaCorp Presentation

    SALFACORP PRESENTATION III CHILE EQUITY ONE ON ONE CONFERENCE – LONDON, MAY 2013 www.salfacorp.com

  2. Slide 2: Contents

    CONTENTS 01 - WHO WE ARE 02 - INDUSTRY OVERVIEW 03 - OUR BUSINESS UNITS & RESULTS 04 - TOPICS OF INTEREST 05 – FINAL COMMENTS 2

  3. Slide 3: Who We Are

    01 WHO WE ARE 3

  4. Slide 4: A Company with vast experience in engineering, construction and real estate

    A Company with vast experience in the engineering, construction and real estate sectors  More than 83 years of history and leadership  One of the most important conglomerates in Latin America  Growing international presence in markets with potential growth  Leading market position in Engineering

  5. Slide 5: Our Shareholder Base

    Our Shareholder Base Others; 6,1% Mutual Funds, Ins. Co., Foreign Funds;  Listed company in the local stock 10,0% market since 2004. Controlling Group; 38,5%  Free Float ~ 60%  Stock price has increased 270% Investment Funds; 14,6% since its IPO (2004)  Rating: BBB by Fitch Ratings (local)  Rat

  6. Slide 6: Timeline of Growth

    Timeline of Growth  Significant organic growth  Growth over the last 5 years through mergers and acquisitions in complementary businesses 80%  International expansion: Peru, Colombia, Panama  2012 focused on consolidating these acquisitions 100% and generate synergies Merger with  Revenues incr

  7. Slide 7: Among the main construction companies in Latam

    Among the main construction companies in Latam 14.922 Revenues (USD million) Main E&C and Real Estate Companies in Chile 4.337 3.937 3.146 2.569 2.214 1.239 804 690 178 447 443 262 238 Andrade Gutierrez Besalco Ingevec Camargo Correa EISA Sidgo Koppers Claro Vicuña ODEBRECHT Graña Montero ICA Salfac

  8. Slide 8: Operations in countries with good economic perspectives

    Operations in countries with good economic perspectives GDP as of Dec-2012 (USD Million) GDP Growth Forecast 366.020 268.177 Chile 199.003 Colombia Peru Panama 10,8% 10,6% 36.253 8,9% 5,9% 4,0% 7,2% 5,4% 6,1% 6,6% 6,9% 6,2% 4,0% 6,2% 4,5% 4,9% 4,6% Chile Peru Colombia Panama 2011 2012 2013e 2014e So

  9. Slide 9: Industry Overview in Chile

    02 INDUSTRY OVERVIEW IN CHILE 9

  10. Slide 10: Markets where we operate: Engineering & Construction and Real Estate

    Markets where we operate: Engineering & Construction and Real Estate Evolution of GDP Construction (Chile) Monthly Construction Activity Index (Chile) 125 15,00% 15,0% IMACON Var. % Monthly Var. % 12 months 120 GDP Construction GDP 10,00% 10,0% 115 110 5,00% Variation (%) 5,0% IMACON 105 0,00% 100 0

  11. Slide 11: Markets where we operate (Cont.): Construction Investments

    Markets where we operate: Engineering & Construction and Real Estate (Cont.) Growth of Construction Investments (Chile) * Construction Investments per Economic Sector (Chile) * US$ 110,888 million Energy 22,9% 120.000 100.000 Real Est. Non- household 80.000 6,5% US$ millions Infrastructure 60.000 Mi

  12. Slide 12: Markets where we operate (Cont.): Household sales and stock

    Markets where we operate: Engineering & Construction and Real Estate (Cont.) Household Sales in Santiago Market Share in Chile (USD million) (*) 2.200 6,8% 8,0% 60.000 35 2.000 6,7% 7,0% 1.800 household sales and stock (units) 30 50.000 5,8% 6,0% 1.600 5,1% months in stock 25 40.000 1.400 4,5% 5,0%

  13. Slide 13: Our Business Units

    03 OUR BUSINESS UNITS 13

  14. Slide 14: Strategic Drivers for each Business Unit

    Strategic Drivers for each Business Unit Salfa Ingeniería y Construcción S.A. Aconcagua S.A. (Engineering & Construction) (Real Estate)  GROWTH AND PROFITABILITY  GROWTH AND PROFITABILITY  FOCUS ON SEGMENTS WITH POTENTIAL DEMAND GROWTH:  RELEVANT POSITION NATIONWIDE  MINING & ENERGY  “DECOMMOD

  15. Slide 15: Engineering & Construction Business Unit: ICSA

    03.1 ENGINEERING & CONSTRUCTION BUSINESS UNIT: “ICSA” 15

  16. Slide 16: ICSA's Business Structure

    ICSA’s Business Structure Financial Summary SALFA INGENIERÍA Y CONSTRUCCIÓN S.A. AS OF DEC-31-12 SALFA ICSA REVENUES MM$ 749,265 (MMUS$ 1,561) EBITDA MM$ 39,850 (MMUS$ 83) CHILE PERU COLOMBIA PANAMA ASSETS MM$ 458.403 Assembly Works Assembly Works Assembly Works (MMUS$ 955) Civil Works Civil Works #

  17. Slide 17: ICSA consolidating its international presence

    ICSA consolidating its international presence GDP: +10.6% Backlog: USD 24 m Revenues: USD 39 m GDP: +4.0% Backlog: USD 15 m Revenues: USD 2 m GDP: +6.2% Backlog: USD 87 m Revenues: USD 98 m GDP: +5.4% Backlog: USD 1.2 bn Revenues: USD 1.6 bn ICSA only consolidates entities in Peru. Figures of entiti

  18. Slide 18: Backlog ICSA – US$ 1,300 million

    Backlog ICSA – US$ 1,300 million  Backlog at Dec-2012 practically at the same level as of Dec-2011 (in USD), but mix has improved  Reduction of Backlog in Units with less value contribution Backlog of Contracted Projects Backlog per Line of Business Civil Works 11,0% Assembly Works Mining 37,0% Se

  19. Slide 19: ICSA – Breakdown of Revenues per Line of Business

    ICSA – Breakdown of Revenues per Line of Business Revenues per Line of Business * (Dec-12) Revenues per Line of Dec-2012 Dec-2011 Chg. % Business $ million $ million Assembly Works Assembly Works 322.160 226.159 42,4% 43% Mining Services 180.883 99.054 82,6% Others 7% Construction 145.350 235.519 -3

  20. Slide 20: ICSA: Results as of Dec-12

    ICSA: Results as of Dec-12 (in CLP million) Revenues Gross Profit / Mg % CAGR: +7% CAGR: +19% 7.6% 8.5% 10.3% 7.2% 46.225 50.064 47.982 57.107 749.265 670.581 590.867 448.001 Dec-09 Dec-10 Dec-11 Dec-12 Dec-09 Dec-10 Dec-11 Dec-12 EBITDA / Mg % Profit CAGR: +12% CAGR: -20% 5.3% 4.7% 6.3% 3.3% 20.427

  21. Slide 21: ICSA: Key Financial Ratios as of Dec-12

    ICSA: Key Financial Ratios as of Dec-12 Liquidity Leverage 2,06 2,16 1,89 1,83 1,82 1,60 1,54 1,57 Dec-09 Dec-10 Dec-11 Dec-12 Dec-09 Dec-10 Dec-11 Dec-12 Net Financial Leverage ROE 28.57% 0,91 19.84% 0,57 0,66 0,35 7.42% 2.27% Dec-09 Dec-10 Dec-11 Dec-12 Dec-09 Dec-10 Dec-11 Dec-12 21

  22. Slide 22: ICSA: Some of our projects

    ICSA: Some of our projects Marine Works; Port Expansion, Puerto de Lirquén Civil Works; Costanera Center Project, Cencosud 22 Assembly Works; Acid plant; Ministro Hales Project Underground Mining; ADITS Construction, CODELCO

  23. Slide 23: Real Estate Business Unit: Aconcagua

    03.2 REAL ESTATE BUSINESS UNIT: “ACONCAGUA” 23

  24. Slide 24: Aconcagua's Business Structure

    Aconcagua’s Business Structure ACONCAGUA S.A. Financial Summary AS OF DEC-31-12 ACONCAGUA S.A Real Estate Home Building Other Units International REVENUES MM$ 329,927 (Inmobiliaria (Newall, Vertical, (MMUS$ 687) (Novatec S.A.) Division Aconcagua S.A.) Noval) EBITDA MM$ 20,897 (MMUS$ 43) 100% Ownersh

  25. Slide 25: Growth in Pre-sales and Deliveries

    Growth in Pre-sales and Deliveries Pre-sales Combined (1) Deliveries Combined (2) UF millions (3) UF millions 16,0 14,6 14,0 12,0 11,1 12,1 12,0 10,0 8,3 8,4 10,0 9,0 8,0 8,0 6,0 6,0 4,7 4,1 3,6 4,0 3,3 3,6 4,0 2,4 1,9 2,1 2,0 2,0 0,0 0,0 2010 2011 1T - 2012 2T -2012 3T-2012 4T-2012 2012 2010 2011 1

  26. Slide 26: Evolution & Seasonality of the Real Estate Business

    Evolution & Seasonality of the Real Estate Business $ million 300.000 250.000 200.000 150.000 100.000 50.000 - 3Q-12 1Q-10 2Q-10 3Q-10 4Q-10 1Q-11 2Q-11 3Q-11 4Q-11 1Q-12 2Q-12 4Q-12 Revenues Acc Rec Inventory Total Fin. Debt • Seasonality marked during 4Q of each year • Account Receivables + Invent

  27. Slide 27: Breakdown of Revenues per Business Segment

    Breakdown of Revenues per Business Segment Revenues per Segment (Dec-12) Dec-2012 Dec-2011 Revenues by Product Var. % Other M$ M$ revenues Households 125.152.434 113.343.209 10,4% 3% Houses Land 53.126.854 13.005.681 308,5% 29% Construction 142.384.591 117.312.576 21,4% Construction Other revenues 9

  28. Slide 28: Land Revenues – Comparatives with the market

    Land Revenues – Comparatives with the market Variation  Good market conditions boosted sales of $ million 2012 2011 $ million Δ% land during 2012 from all players of the Aconcagua 53.126 13.005 40.121 308,5% industry. Socovesa (*) 45.984 14.747 31.237 211,8% Paz (*) 5.124 1.089 4.035 370,5% Manqueh

  29. Slide 29: Land Bank – Solid position for long term development

    Land Bank  Solid position for long term development By Geographic Zone  Aconcagua manages approximately 1,700 has. of land for future real estate developments. Southern 42% Central 30%  Book value as of Dec-2012, reached $ 77 billion vs. a fair value of $ 116 billion as of the same date.  Curren

  30. Slide 30: Aconcagua: Results as of Dec-12

    Aconcagua: Results as of Dec-12 (in CLP million) Revenues Gross Profit / Margin % CAGR: +11% CAGR: +25% 11.2% 18.7% 14.1% 15.7% 329.927 246.979 187.655 37.012 34.945 170.628 26.848 35.112 Dec-09 Dec-10 Dec-11 Dec-12 Dec-09 Dec-10 Dec-11 Dec-12 EBITDA / Margin % Profit CAGR: +49% 6.3% CAGR: +484% 6.9

  31. Slide 31: Aconcagua: Key Financial Ratios as of Dec-12

    Aconcagua: Key Financial Ratios as of Dec-12 Liquidity Leverage 3,74 2,96 3,09 2,51 2,53 2,26 1,75 1,25 Dec-09 Dec-10 Dec-11 Dec-12 Dec-09 Dec-10 Dec-11 Dec-12 Net Financial Leverage ROE 15,55% 2,18 12,76% 2,00 1,78 1,70 7,73% 0,09% Dec-09 Dec-10 Dec-11 Dec-12 Dec-09 Dec-10 Dec-11 Dec-12 31

  32. Slide 32: Aconcagua: Some of our projects

    Aconcagua: Some of our projects Live Costanera Building, Metropolitan Region Punta Águila Project, Metropolitan Region Laguna del Mar Project, La Serena, 4th Region 32 Deloitte Building, Metropolitan Building

  33. Slide 33: SalfaCorp Consolidated Financials

    03.3 SALFACORP CONSOLIDATED FINANCIALS 33

  34. Slide 34: SalfaCorp: Balance Sheet as of Dec-2012

    SalfaCorp: Balance Sheet as of Dec-2012 Balance Sheet Change Dec-12 Dec-11 $ Million of each period $ Million % Current assets 562.111 453.668 108.443 23,9% Cash and cash equivalents 31.989 45.271 (13.282) -29,3% Trade and other current receivables 257.553 184.592 72.961 39,5% Current related partie

  35. Slide 35: SalfaCorp: P&L as of Dec-2012

    SalfaCorp: P&L as of Dec-2012 P&L Statement Change Dec-12 Dec-11 ($ million of each period) $ Mill % Revenues 1.062.636 901.465 161.171 17,9% Gross profit 92.776 85.522 7.254 8,5% % of revenues 8,7% 9,5% Other income 15.795 746 15.050 2018,0% Selling & administrative expenses (62.087) (53.669) (8.41

  36. Slide 36: SalfaCorp: Consolidated Financials as of Dec-12

    SalfaCorp: Consolidated Financials as of Dec-12 (in CLP million) Revenues Gross Profit / Mg 1.062.636 +18% +9% 92.776 901.465 85.522 9,5% 8,7% Dec-11 Dec-12 Dec-11 Dec-12 EBITDA Profit +46% 59.776 +46% 23.182 41.027 15.933 4,6% 5.6% Dec-11 Dec-12 Dec-11 Dec-12 36

  37. Slide 37: SalfaCorp: Key Consolidated Ratios as of Dec-12

    SalfaCorp: Key Consolidated Ratios as of Dec-12 Liquidity Leverage 2,19 1,93 1,89 1,39 Dec-11 Dec-12 Dec-11 Dec-12 Net Financial Leverage ROE 8,23% 1,23 6,00% 0,86 Dec-11 Dec-12 Dec-11 Dec-12 37

  38. Slide 38: Topics of Interest

    04 TOPICS OF INTERST 38

  39. Slide 39: Recent Events: evaluating division of SalfaCorp into two public units

    Recent Events … Company is evaluating the division of SalfaCorp into two separate and publicly traded business units Subsidiary ICSA Sector Engineering & Construction Real Estate • Highly specialized labor force • Development of real estate projects • Focus on specialized construction • Search for v

  40. Slide 40: Division of SalfaCorp - Rationale

    Division of SalfaCorp - Rationale  FOCUS  FINANCING  GROWTH  Profitability in each business  Different needs of financial  Both Business Units are in a  Higher management control of resources. stage of growth. the business. Strategic &  Different capital structure  They have reached such an

  41. Slide 41: Final Comments

    05 FINAL COMMENTS 41

  42. Slide 42: Final Comments

    Final Comments  SalfaCorp, a company with a leading position in the Engineering & Construction and Real Estate sectors in Chile.  Both Business Units have a diversified source of revenues.  In a good position for year 2013 and those to come.  ICSA:  Focus on Profitability  lines of business wi

  43. Slide 43: SalfaCorp Presentation

    SALFACORP PRESENTATION III CHILE EQUITY ONE ON ONE CONFERENCE – LONDON, MAY 2013 www.salfacorp.com

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