Slide 1: 3rd Chile One-on-One Conference
3rd Chile One-on-One Conference London, May 2013
Slide 2: Agenda
Agenda Agenda Company overview Global industry update Financial performance Business plan Conclusion 2
Slide 3: Vertically integrated company
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 and Net Income of US$ 2.5 billion, US$ 764 million and US$ 231 million, respectively
Slide 4: Corporate structure
Corporate structure Corporate structure Source: CAP, March 2013 4
Slide 5: Iron ore mining
Iron ore mining Los Colorados Mine, Huasco, Chile 5
Slide 6: Iron ore mining operations
Iron ore mining operations El Laco (3) Consist of three different and independent Punta Totoralillo Port areas of operation in the north of Chile, Cerro Negro Norte (1) located around the cities of La Serena, Desalination Plant (1) Copiapó Vallenar and Copiapó: Magnetite Plant Cities Los Colorados (
Slide 7: Shipments and markets
Shipments and markets Shipments Shipments by markets and products 2012 14.000 12.246 12.220 12.000 11.469 8% 3% 1% 10.145 10.213 9% 10.000 65% 8.000 Th. MT 7.251 6.000 15% 4.000 1.855 2.000 1Q13 0 2008 2009 2010 2011 2012 2013 (E) China Chile Japan Bahrein Indonesia USA 11% 15% 3% Self - fluxing pel
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 9
Slide 10: Steel production
Steel production Market share 70% 66% o The leader in Chile’s steel market 58% Earthquake 57% 60% o 1.45 million tons of annual liquid 50% 47% 55% 47% 50% 53% steel production capacity 40% 37% 38% 36% 30% o Strong long term commercial 20% 30% relations with customers in Chile 10% 0% o Products mix 2
Slide 11: Steel processing
Steel processing Cintac, Santiago, Chile 11
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 1.300 600 1.252 Sales by Sector 1.25
Slide 13: Agenda
Agenda Agenda Company overview Global industry update Financial performance Business plan Conclusion 13
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 prices
Iron ore spot prices Iron ore Fines 62% CFR North China (US$/t) 200 180 160 2010 140 2011 2012 120 2013 100 80 Source: CAP 15
Slide 16: Evolution of steel prices
Evolution of steel prices North America Europe Asia Metallics Flats Longs Source: www.crugroup.com, March 2013 16
Slide 17: Evolution of key raw materials
50 0 100 150 250 300 400 450 200 350 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 Source: CAP and The Baltic Exchange, March 2013 May-12 Jul-12 Metallurgical Coal (US$/TM) Sep-12 Nov-12 Jan-13 Mar-13 0 1.000 1.500 2.000 2.500 3.000 3.500 4.000 4.500 500 Jan-10 Mar-10 May-10
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: Infrastructure and urbanization in China
Infrastructure and urbanization in China China steel consumption by end use Urban population (% of total) Source: Goldman Sachs Global ECS Research, March 2013 19
Slide 20: Sustained growth of steel consumption
Sustained growth of steel consumption February 2013 20
Slide 21: Potential growth for Chinese steel consumption
Potential growth for Chinese steel consumption Urbanization Rate & CSC (1950 – 2012) Urbanization trend indicates further potential for Chinese steel consumption (CSC) Steel production per capita in most developed countries only peaked when urbanization rate was above 70% China’s urbanization
Slide 22: World economy increasingly led by China
World economy increasingly led by China Source: HSBC Asian Economics, March 2013 22
Slide 23: Seaborne iron ore supply - demand balance
Seaborne iron ore supply - demand balance 68% (381 million MT) of total potential capacity addition comes from the Big 4 (Rio Tinto, Vale, BHP Billiton and Fortescue) New production capacity by company and country Source: Wood Mackenzie and Goldman Sachs Research, March 2013 23
Slide 24: Iron ore cash cost curve
Iron ore cash cost curve CAP Source: Global Markets Research, Deutsche Bank, March 2013 24
Slide 25: Agenda
Agenda Agenda Company overview Global industry update Financial performance Business plan Conclusion 25
Slide 26: Financial evolution
Financial evolution USD Million 2008 2009 2010 2011 2012 1Q13 Sales 1.972 1.375 1.994 2.787 2.470 407 EBITDA 534 128 740 1.184 764 138 EBITDA Margin 27,1% 9,3% 37,1% 42,5% 30,9% 33,8% Net Income 291 25 590 442 231 45 Cash 379 393 981 883 711 631 Gross Financial debt 880 907 1.001 628 719 741 Net Fin
Slide 27: Financial performance
Financial perfomance Sales (US$ million) EBITDA (US$ million) (*) 3.000 2.787 1.400 1.184 2.470 1.200 2.500 1.972 1.994 1.000 2.000 740 763 800 701 1.500 1.375 600 534 1.000 400 500 407 200 128 0 0 2008 2009 2010 2011 2012 1Q13 2008 2009 2010 2011 2012 1Q13 Gross financial debt (US$ million) Net fin
Slide 28: Debt maturity profile
Debt maturity profile Banks Bonds 200 180 174 160 140 US$ Million 120 116 100 71 80 64 66 60 40 7 16 20 3 4 0 28
Slide 29: 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 29
Slide 30: Agenda
Agenda Agenda Company overview Global industry update Financial performance Business plan Conclusion 30
Slide 31: 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: 3Q 2013 CAPEX: US$ 438 million Cerro Negro Norte (gree
Slide 32: Development program underway
Development program underway Romeral Phase V Mine life extension Under construction and estimated start-up: 1S 2014 CAPEX: US$ 198 million Desalination Plant Capacity up to 400 lt/s Under construction and estimated start-up: September 2013 CAPEX: US$ 360 million 32
Slide 33: Iron ore – Production capacity
Iron ore – Production capacity Production (Th. tonnes) 20.000 18.000 18.000 17.094 16.214 16.000 14.000 12.433 12.055 12.000 10.000 8.000 6.000 4.000 2.000 0 2012 2013 (p) 2014 (p) 2015 (p) 2016 (p) o The market projects a stronger demand for high quality pellet feed o In 2012 the average cash cost
Slide 34: Steel
Steel Steel Production Steel Processing o Domestic demand for steel is strongly influenced o Main focus is to serve the construction, industry by Construction and Mining sectors. Demand for and infrastructure sectors long steel in Chile substantially exceeds that for flat steel, due to the dinamism
Slide 35: Agenda
Agenda Agenda Company overview Global industry update Financial performance Business plan Conclusion 35
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
www.cap.cl