Slide 1: Corporate Presentation
Corporate Presentation February 2017 (Fourth 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 +6,515 employees Key facts 53% Caterpillar Market Share Market cap (Dec-2016) $510MM Shareholders +2,500
Slide 4: Corporate History
CORPORATE HISTORY 00’s 10’s International Complementary expansion: CAT and businesses other brands 90’s Organizational (economic sectors, development to take business lines) opportunities arising from large mining 80’s Redefining 2016 business: focus on capital goods 2010 70’s Move operations to 200
Slide 5: Corporate Structure
CORPORATE STRUCTURE Caterpillar dealers Caterpillar dealers and other Other subsidiaries in Peru in Peru businesses in Central America and abroad Guatemala Chile, Colombia , Ecuador El Salvador Belize Nicaragua El Salvador, Honduras Sales as of 4Q16: US$ 1,082mm (75%) Sales as of 4Q16: US$ 136mm (10
Slide 6: Sustainable Business Model
SUSTAINABLE BUSINESS MODEL SALES BY LINE OF BUSINESS 2,000 US$1.9Bn 1,800 US$1.7Bn US$1.6Bn 1,600 US$1.4Bn 1,400 US$ Millon 1,200 1,000 800 600 400 Product Support sales 200 10 Year CAGR – 15% - (2005-2015) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 - Machinery 9% 11% 7% 6% 9% 8% 37% Parts an
Slide 7: Diverse Customer Base
DIVERSE CUSTOMER BASE 48% OF DELIVERIES COME FROM NON-MINING CUSTOMERS SALES BY ECONOMIC SECTORS 2% 2% 1% 2% 3% 1% 3% 3% 3% 4% 1% 2% 11% 11% 12% 36% 38% 3% 4% 3% 49% 1% 2% 3% 24% 26% 22% 14% 14% 2010 2015 2016 Open pit mining Underground mining Construction Government Transport Industry, commerce an
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 compliance, Corporate Governance and Sustainability
Slide 10: Presence in South and Central America, representing brand leaders
WITH PRESENCE IN SOUTH AND CENTRAL AMERICA COUNTRIES REPRESENTING BRAND LEADERS 6,515 2016
Slide 11: Unmatched Logistics Capabilities
UNMATCHED LOGISTICS CAPABILITIES ONE OF OUR MAIN COMPETITIVE ADVANTAGES 890,000 m2 170+ US$120M 365 DAYS TO SERVE OUR CUSTOMERS POINTS OF CONTACT INVENTORY OF PARTS 24x7 OPERATIONS • Operating 50+ warehouses, several located in remote • ISO9002 certification locations (eg: mines) • ISO 14000 certifi
Slide 12: Efficient Logistics Capabilities: Supply Chain Management
EFFICIENT LOGISTICS CAPABILITIES SUPPLY CHAIN MANAGEMENT Ferreycorp integrates and administrates all key elements in the logistic chain as a value proposition Vertical integration through complementary businesses: 1) Freight forwarder (Forbis) and 2) Warehouses and terminals (Fargoline) Efficient ha
Slide 13: Sustainability Model
SUSTAINABILITY MODEL STAKEHOLDERS • Principles of Good Corporate Governance • Ferreycorp Association • Respect of Shareholders’ rights • “Operadores de equipo pesado • Transparent and timely reporting Ferreyros” Club • Efficient representation with our Board of Directors • Think Big Program • “Jóven
Slide 14: Corporate Standards: Strong Corporate Governance
CORPORATE STANDARDS STRONG CORPORATE GOVERNANCE • Ferreycorp (FERREYC1) is listed in the Lima Stock Exchange BOARD since 1962. • Ferreycorp is included in the Corporate Governance Index of the Dependent Directors Independent Directors Lima Stock Exchange since its inception in 2008. Oscar Espinosa E
Slide 15: Pervasive Innovation: Quest for Value Creation
PERVASIVE INNOVATION QUEST FOR VALUE CREATION Past innovation projects • Continual improvement of CORE existing value proposition for implemented existing business units. Introduction to CAT 797F Conditions monitoring High-altitude arrangements • Leverage on resources and SAP, CRM, Digital c
Slide 16: Caterpillar Market Share in Peru
CATERPILLAR MARKET SHARE IN PERU OPEN PIT MINING HEAVY AND GENERAL CONSTRUCTION Atlas Copco Hyundai Bobcat Liebherr 1% JCB 1% 1% 1%Otros P&H Sandvik Volvo 5% 2% Case 4% Hitachi1% 4% New Holland 3% 1% Caterpillar 1% 49% Doosan 2% Hamm Komatsu Komatsu 1% 7% Caterpillar 44% 61% John Deere 11% US$ FOB -
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% 4.7% 5.0% 4.7% 24% 22.9% 4.7% 5% 22% 21.1% 21.1% 20.7% 21.2% 3.0% 20.3% 3% 1.9% 1.9% 20% 1% 18% 2009 2010 2011 2012 2013 2014 2015 2016 16% Avg. Exchange 2009 2010 2011 2012 2013 2014 2015 2016 3.
Slide 19: Investment in Assets: Accounts Receivables
INVESTMENT IN ASSETS 1) ACCOUNTS RECEIVABLES ACCOUNTS RECEIVABLE FACTORING EVOLUTION BY TERM US$ MM US$ MM 135 400 120 350 13 105 300 14 10 11 14 90 250 28 75 200 33 13 324 60 115 150 292 305 298 281 105 245 45 100 185 159 30 50 0 15 2009 2010 2011 2012 2013 2014 2015 2016 0 Short term Long term 201
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) 72 602 584 55 523 49 25 44 454 12 31 30 405 370 20 38 19 23 3 -11 338 21 9 472 451 7 13 15 28 5 383 5 16 16 17 9 11 11 206 359 284 8 255 -3 -1 266 -33 161 95 130 133 140 121 115 45 72 2009 2010 201
Slide 21: Cash Cycle
CASH CYCLE -47 days of accounts payable Targets: Inventory 120 days 3.0x Payable Cash Cycle of 148 days 45 days 67 days of accounts receivable Receivable 45-60 days 128 days of Inventory (2.81x)
Slide 22: Access to Diversified Sources of Financing
ACCESS TO DIVERSIFIED SOURCES OF FINANCING Natural hedge: revenue-debt DIVERSIFIED FUNDING BASE (US$MM) DEBT BY CURRENCY Banks Caterpillar Bonds 21.9% Soles 2016 307 53 161 US$ 521 MM 2.4% Quetzales - 68 Chilean pesos 2015 201 93 295 US$ 589 MM 4.4% Dollars - 51 71.3% 2014 222 123 295 US$ 640 MM - 9
Slide 23: Access to Diversified Sources of Financing
ACCESS TO DIVERSIFIED SOURCES OF FINANCING MATURITY OF FINANCIAL DEBT (US$MM) AVG INTEREST RATE 6.0% 250,000 239 5.3% 5.0% 5.0% 4.9% 4.65% 195 4.4% 4.4% 200,000 4.2% 4.12% 4.0% 150,000 3.0% 2009 2010 2011 2012 2013 2014 2015 2016 100,000 49 FINANCIAL EXPENSES 50,000 (AS% OF TOTAL SALES) 29 5 0.4 - 5
Slide 24: Profitability Ratios
PROFITABILITY RATIOS 18% 16.0% 16% 14.1% 14.3% 14% 14.1% 13.2% 13.5% 13.20% 12% 12.2% 11.8% 11.9% 10% 10.2% 10.6% 9.8% 7.7% 8% 7.3% 7.1% 7.7% 7.4% 8.1% 6.3% 6% 5.9% 4.6% 5.5% 4% 4.0% 2% 0% 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q2016 2Q2016 3Q2016 4Q2016 ROE ROA ROIC • ROIC: EBITLTM / Invested Capital (to
Slide 25: 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 DEC 2016 Dividend Yield 2016 5.25% Repurchased shares as of Dec 30th 2016 50’208,800 Local pension MAIN SHAREHOLDERS AS OF DEC 2016 Foreign funds investors 23% Holder % 35% La Positiv
Slide 26: 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 27: Contacts
Contacts Corporative Finance Manager: Patricia Gastelumendi Treasury Manager: Liliana Montalvo Investor Relations Executive: Elizabeth Tamayo