Slide 1: Corporate Presentation (Second quarter 2016 results)
Corporate Presentation August 2016 (Second quarter 2016 results)
Slide 2: Ferreycorp at a glance
Ferreycorp at a glance
Slide 3: Highlights
Highlights FERREYCORP Established in Peru in 1922 90+ years of business, 70+ years of alliance with CAT currently operating 17 companies within 10 countries employing a workforce of +6,662 employees Key facts 60% Caterpillar Market Share Market cap (Jun-2016) $477MM Shareholders +2,500
Slide 4: Corporate History
CORPORATE HISTORY 00’s 10’s International Complementary expansion: CAT and businesses other brands 90’s Organizational (economic sectors, development to take business lines) opportunities arising from large mining 80’s Redefining 2016 business: focus on capital goods 2010 70’s Move operations to 200
Slide 5: Corporate Structure
CORPORATE STRUCTURE Caterpillar dealers Caterpillar dealers and other Other subsidiaries in Peru in Peru businesses in Central America and abroad Guatemala Chile, Colombia , Ecuador El Salvador Belize Nicaragua El Salvador, Honduras Sales as of 2Q15: US$632mm (79%) Sales as of 2Q15: US$83mm (10%) Sa
Slide 6: Sustainable Business Model: Sales by Line of Business
SUSTAINABLE BUSINESS MODEL SALES BY LINE OF BUSINESS US$1.9Bn 2,000 US$1.72Bn 1,800 US$1.67Bn 1,600 1,400 US$ Millon 1,200 US$858 1,000 mm US$756 800 mm 600 400 Product Support sales 200 10 Year CAGR – 15% - (2005-2015) 2007 2008 2009 2010 2011 2012 2013 2014 2015 As of As of - 2Q15 2Q16 Machinery 1
Slide 7: Diverse Customer Base
DIVERSE CUSTOMER BASE 54% OF DELIVERIES COME FROM NON-MINING CUSTOMERS SALES BY ECONOMIC SECTORS 1% 1% 4% 2% 2% 3% 3% 1% 2% 3% 4% 2% 12% 33% 12% 34% 10% 4% 3% 49% 1% 5% 2% 5% 24% 30% 14% 13% 21% 2010 As of 2Q2015 As of 2Q2016 Open pit mining Underground mining Construction Government Transport Indus
Slide 8: Key capabilities
Key capabilities
Slide 9: Key Capabilities
KEY CAPABILITIES Long term strategic partnerships Ubiquitous market coverage Unmatched supply chain and logistics capabilities Financial strength and funding sources In-depth market knowledge Innovation and Technology Ethics and corporate standards
Slide 10: International Footprint
INTERNATIONAL FOOTPRINT Florida Guatemala Belice El Salvador Honduras Nicaragua Colombia Ecuador Perú Chile Ferreycorp Peru Abroad Total Workforce Employees 3,325 717 4,042 Technicians 2,345 290 2,635 Total (Jun-16) 5,670 1,007 6,677
Slide 11: Strategic Business Partners: World-Class Brands
STRATEGIC BUSINESS PARTNERS WORLD-CLASS BRANDS Among many other brands…
Slide 12: Ubiquitous Market Coverage
UBIQUITOUS MARKET COVERAGE WE AIM TO BE CLOSE TO OUR CUSTOMERS . . . . . . . . . . . . . . . . . . . Wherever customers operate, will be next to . them: nationwide coverage Bringing services, spares, materials wherever the customer needs With world class service level
Slide 13: Unmatched Logistics Capabilities
UNMATCHED LOGISTICS CAPABILITIES ONE OF OUR MAIN COMPETITIVE ADVANTAGES We move cargo equivalent to 33,000 pounds per day; averaging 2.5 million miles per year to deliver the items where customer needs them • Operating 50+ warehouses, several located in remote • ISO9002 certification locations (eg:
Slide 14: Logistics
LOGISTICS Ferreycorp integrates and administrates all key elements in the logistic chain as a value proposition Vertical integration through complementary businesses: 1) Freight forwarder (Forbis) and 2) Warehouses and terminals (Fargoline) Efficient handling: 100,000 SKUs Day 1: 83% of requests, Da
Slide 15: Corporate Standards: Strong Corporate Governance
CORPORATE STANDARDS STRONG CORPORATE GOVERNANCE • Ferreycorp (FERREYC1) is listed in the Lima Stock Exchange BOARD since 1962. • Ferreycorp is included in the Corporate Governance Index of the Dependent Directors Independent Directors Lima Stock Exchange since its inception in 2008. Oscar Espinosa E
Slide 16: Caterpillar Market Share in Peru
CATERPILLAR MARKET SHARE IN PERU Open pit mining Heavy construction P&H OTROS SANDVIK 5% 21% 1% CASE KOMATSU 3% 31% CATERPILLAR HYUNDAI CATERPILLAR 51% 4% 63% HAMM 5% KOMATSU 7% JOHN DEERE Include shovels and drills 9% Underground mining General construction ATLAS COPCO JOY OTROS 9% 2% 16% NEW HOLLA
Slide 17: Financial Performance
Financial Performance
Slide 18: Track Record of Consistent Financial Performance
TRACK RECORD OF CONSISTENT FINANCIAL PERFORMANCE GROSS MARGIN NET MARGIN 28% 9% 6.8% 26% 7% 24.2% 24.3% 5.3% 24% 22.9% 23.2% 4.7% 5.0% 4.7% 5% 22% 21.1% 21.1% 20.7% 21.2% 3.0% 20.3% 2.6% 3% 1.9% 1.9% 20% 1% 18% As of As of 2009 2010 2011 2012 2013 2014 2015 2Q15 2Q16 16% Avg. Exchange 2009 2010 2011
Slide 19: Investment in Assets: Accounts Receivables
INVESTMENT IN ASSETS 1) ACCOUNTS RECEIVABLES ACCOUNTS RECEIVABLE EVOLUTION BY FACTORING TERM US$ MM US$ MM 80 400 350 70 15 300 14 10 12 11 14 250 28 60 200 33 13 323 50 150 292 305 298 281 296 245 100 185 159 40 50 76 0 30 2009 2010 2011 2012 2013 2014 2015 2Q15 2Q16 54 Short term Long term 20 • Re
Slide 20: Investment in Assets: Inventory and Fixed Assets
INVESTMENT IN ASSETS 2) INVENTORY AND FIXED ASSETS INVENTORY EVOLUTION (US$MM) CAPEX EVOLUTION (US$MM) 602 584 523 477 72 454 405 410 338 25 55 472 451 49 383 44 353 12 206 359 284 298 31 30 19 23 21 266 20 21 38 3 7 9 13 161 7 13 15 2 5 28 22 95 130 133 140 121 124 112 16 11 16 11 7 45 72 8 9 5 -3
Slide 21: Cash Cycle
CASH CYCLE -47 days of accounts payable Targets: Inventory 120 days 3.0x Payable Cash Cycle of 145 days 45 days 62 days of accounts receivable Receivable 45‐60 days 127 days of Inventory (2.77x)
Slide 22: Access to Diversified Sources of Financing
ACCESS TO DIVERSIFIED SOURCES OF FINANCING Natural hedge: revenue‐debt DIVERSIFIED FUNDING BASE (US$MM) DEBT BY CURRENCY Soles Banks Caterpillar Bonds 20% Quetzales 2Q16 297 74 159 US$ 556 MM 2% 5% Pesos Chilenos 0% 2015 201 93 295 US$ 589 MM 72% Pesos Colombianos 2014 222 123 295 US$ 640 MM Dollars
Slide 23: Access to Diversified Sources of Financing
ACCESS TO DIVERSIFIED SOURCES OF FINANCING AVG INTEREST RATE MATURITY OF FINANCIAL DEBT (US$MM) 6.0% 5.3% 5.0% 5.0% 4.9% 4.65% 200,000 189 193 4.4% 4.2% 4.4% 4.24% 180,000 4.0% 160,000 140,000 3.0% 120,000 2009 2010 2011 2012 2013 2014 2015 As of 2Q16 100,000 81 80,000 60,000 50 FINANCIAL EXPENSES 4
Slide 24: Leverage Ratio Covenant
LEVERAGE RATIO COVENANT NET DEBT TO EBITDA RATIO ADJUSTED DEBT TO EBITDA RATIO 4.39 2.93 4.08 2.68 2.86 2.59 3.62 3.50 3.53 3.52 2.37 2.38 2.46 3.33 3.38 3.27 3.22 3.28 3.21 3.48 2.85 3.06 2.67 1.86 2.56 2.25 2009 2010 2011 2012 2013 2014 2015 As of 2Q16 • Adjusted debt: total debt excluding short t
Slide 25: Profitability Ratios
PROFITABILITY RATIOS 18% 16% 16.0% 14.1% 14% 14.1% 14.3% 13.5% 13.1% 12.1% 13.2% 12% 11.3% 11.5% 9.9% 10.6% 10% 10.2% 9.8% 8.1% 8.1% 8.4% 7.7% 8% 6.7% 8.4% 7.7% 7.0% 5.9% 7.3% 5.8% 5.5% 7.4% 6% 6.4% 6.3% 5.3% 4.6% 4% 4.2% 4.0% 2% 0% 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q
Slide 26: Ferreycorp in the Capital Market
FERREYCORP IN THE CAPITAL MARKET Capital S/. 1’014,326,324 Nº de shares 1’014,326,324 SHAREHOLDERS COMPOSITION AS OF JUNE 2016 Dividend Yield 4.9% Repurchased shares as of June 30th 2016 28’238,430 Local pension MAIN SHAREHOLDERS AS OF JUNE 2016 Foreign funds investors 22% Titular % 36% La Positiva
Slide 27: Dividend Policy Annual Compliance
DIVIDEND POLICY ANNUAL COMPLIANCE In 1997, the company´s shareholders approved the dividend policy. A modification was approved to assign minimum and maximum ranges. Cash dividends will amount to 5% of the capital or a ceiling equal to 60% of freely available profits. The remainder will be capit
Slide 28: Contacts
Contacts Administration and Finance Manager: Patricia Gastelumendi Treasury Manager: Liliana Montalvo Investor Relations: Elizabeth Tamayo