Grupo Mexico S.A.B. de C.V. Class B · BMV:GMEXICO/B
Grupo Mexico S.A.B. de C.V. Class B — Q2 2015 Earnings Presentation
35 slides from Grupo Mexico S.A.B. de C.V. Class B's earnings presentation, August 2015
Slide 1: Company Overview & Highlights
Company Overview & Highlights August 2015
Slide 2: Contents
CONTENTS I. Grupo Mexico Overview II. Copper Market III. Mining Division – AMC IV. Transportation Division – ITM V. Infrastructure Division – MPD
Slide 3: I. Grupo Mexico Overview
GRUPOMEXICO Ait) |. GRUPO MEXICO OVERVIEW
Slide 4: Complementary Divisions with Relevant Growth Potential
Complementary Divisions with Relevant Growth Potential 49% Public GMEXICOB Float MINING TRANSPORTATION INFRASTRUCTURE 100% 74.9% 100% Americas Mining ITM 25.1% Mexico Proyectos Stake in GAP* FM Rail Holding Corporation (AMC) y Desarrollo 86.2% 100% 100% 74% Southern Infraestructura Grupo 26% Copper
Slide 5: Significant Cash Generation Capabilities, focused on Organic Growth
Significant Cash Generation Capabilities, focused on Organic Growth Market Cap as of Aug 2015: US$22 B Millions of USD 2011 2012 2013 2014 LTM³ ► US$ 2.2 Billion Copper Price (Avg. US$ per lb) 4.01 3.61 3.34 3.12 2.89 Capital Expenditure Revenues 10,443 10,183 9,357 9,324 8,985 Program for 2015 Mini
Slide 6: Key Strategic Catalysts
Key Strategic Catalysts Buenavista Expansion – Top 3 Cu Mine by 2015 Infrastructure Division – Creating Value ► Expansion program to increase current capacity from ► Executing attractive growth infrastructure opportunities 180K to 504K tons by 2016. A production increase of in oil and water drilling
Slide 7: II. Copper Market
II. Copper Market 5
Slide 8: Copper has the best fundamentals in the basic materials space
Copper has the best fundamentals in the basic Significant decreases to production have been made materials space at key mines ► After 2017 the market will shift into a position of ever Bingham Canyon (75KT) Sierra Gorda (150KT) widening deficits 454kt expected in 2018 (CRU). Escondida (50KT) ► COCHI
Slide 9: III. Mining Division: Americas Mining Corporation
49% Public Float MINING DIVISION 100% Americas Mining Corporation (AMC) 86.2% 100% Southern Copper ASARCO Corporation 100% 100% Mexico Peru Division Division III. MINING DIVISION: AMERICAS MINING CORPORATION 7
Slide 10: World Class Assets in The Americas
►World Class Assets in The America’s ►Easy Access to Consumers Location of Operations ►Large Scale Open-Pit Mines, in (Fully Integrated) Investment Grade Countries USA Ray Mine, Arizona Mission Mine, Arizona Silver Bell Mine, Arizona Hayden Smelter, Arizona Amarillo Refinery, Texas Mexico Buenavista
Slide 11: Largest Pure Copper Player & Diversified Country Asset Base
Largest Pure Copper Player & Diversified Country Asset Base 1H15 Revenue by Product Copper Reserves as Reported Zinc Gold Others MT 80 71 Sulfuric Acid 3.7% 2.4% 0.8% Lead 70 57 2.1% 0.6% 60 50 Molybdenum 37 4.9% 40 33 32 27 Silver 30 21 3.5% 20 13 11 10 0 Codelco AMC FCX Vale Glencore Rio Tinto Ant
Slide 12: C1 Cash Cost Composite (c/lb Cu)
AMC Cash Operating Cost Net of By-Products ► One of the Lowest Copper Cost Producer, well under the Industry Average. ► Significant SX-EW production (22% vs 28%) after expansions. AMC’s Consolidated Cash Operating Cost AMC Cost Structure Cents per pound of Copper Other 1.39 8% 1.34 1.32 1.32 1.29 1.
Slide 13: Attractive Organic Growth Prospects – Investments to Significantly Increase Production
Attractive Organic Growth Prospects – Investments to Significantly Increase Production 2013 and 2014 2015 -2017 2018 and on Delivered Board Approved Pending Approval Buenavista Buenavista, Sonora, México Empalme, Sonora, México Los Chalchihuites,México Molybdenum Plant Concentrator Plant Copper Smel
Slide 14: Transportation Division
49% Public Float TRANSPORTATION DIVISION * 74.9% 25.1% FM Rail Holding 100% 74% 100% Infraestructura Grupo 26% Líneas y Transportes Ferroviario Ferroviarias Ferroviarios Mexicano Mexico 100% 100% 100% FERROSUR FERROMEX TEXAS PACIFICO * The transportation division owns 10% of GAP’s shares through its
Slide 15: Strong Operating Track Record
Strong Operating Track Record Million of USD 2009 2010 2011 2012 2013 2014 Load Volumes 39,205 45,277 52,182 51,344 51,054 51,704 ► Sixth consecutive year of double Carloads 869 1,003 1,070 1,102 1,115 1,164 digit EBITDA Revenues 920 1,178 1,632 1,677 1,856 1,995 growth Operating Income 190 269 327
Slide 16: Mexico's Leading Railroad
Mexico’s Leading Railroad Mexico’s largest railroad with a track network of 10,400 km, covering 81% of Mexico’s territory. Operations in the State of Texas, US. Strong Revenue Mix Cement, 5% Others, 5% Agricultural, 27% Siderurgical, 6% Intermodal, 7% Energy, 8% Automotive, 12% Chemical, 9% Mineral,
Slide 17: I. Strategic Growth Areas
I. Strategic Growth Areas 15
Slide 18: Growth Opportunities for FM Rail Holding
Growth Opportunities for FM Rail Holding ► Penetration and Market Share.- Exceptional growth potential due to low rail penetration. ► Automotive.- In 2014 Nissan, Mazda and Honda started assembling in new plants within our tracks. Audi will start in this year. KIA and BMW in 2016. ► Intermodal.- Exp
Slide 19: FM Rail Holding – Market Share & Penetration
FM Rail Holding – Market Share & Penetration 2014 Mexican Railway Load Distribution FM Rail Holding Market's Participation in Tons-KM 90,000 80% Ferrosur 80,000 70% 2% 70,000 60% 60,000 KCSM 66% 65% 65% 64% 65% 50% Truck Rail 8% 50,000 62% 61% 63% 67% 75% 58% 25% 55% 40% 40,000 53% 55% 50% 52% 30% F
Slide 20: The largest shipper in the Automotive Sector in Mexico
The largest shipper in the Automotive Sector in Mexico ►FM Rail Holding has currently access to 11 automotive plants. ►4 additional plants to be installed in Mexico by 2016, are within FM Rail Holding’s network. Mexico's Automotive Expected Production will significantly increase FM Rail Holding’s ca
Slide 21: Intermodal Segment
Intermodal Segment Geographically advantaged with improved service capability We have a wide network of intermodal terminals Prepared to significantly grow this segment by developing 8 New Intermodal terminals to increase our volumes ► Since 2005 Chinese products have become about +33% more expensiv
Slide 22: Significant Investments Resulting in Strong Financial Performance & Improved Operating Efficiencies
Significant Investments Resulting in Strong Financial Performance & Improved Operating efficiencies Operating Ratio Speed (Km/Hr) TN/KM EBITDA Margin 82% 50.0 70,000 64,880 50% 80% 80% 60,000 39% 40.0 35.54 51,704 40% 35% 78% 50,000 76% 75% 30.0 28.4 39,204 30% 27% 23.12 40,000 74% 30,000 72% 20.0 2
Slide 23: V. Infrastructure Division
49% Public Float INFRASTRUCTURE DIVISION 100% Mexico Proyectos y Desarrollo (MPD) 100% 100% 100% Mexico Mexico Perforadora Compañía Generadora México Constructora e de Energía (PEMSA) Ingeniería (MGE) (MCC) Oil & Gas Construction Energy V. INFRASTRUCTURE DIVISION 21
Slide 24: Infrastructure Division's operations & projects' location
Infrastructure Division’s operations & projects’ location MGE La Caridad, Sonora Combine Cycle Power Plants 500 MW PEMSA Houston, Texas PEMSA Office PEMSA Upcoming platforms to start -Veracruz Platform Rig -Tamaulipas Platform Rig (Baytown, Texas) Zacatecas Jack-Up PEMSA Chihuahua Campeche MCC Jack-
Slide 25: Infrastructure Projects that Generate Value and Growth
Infrastructure Projects that Generate Value and Growth MPD EBITDA and Margin % Capital Expenditures $ MM 1,600 $ MM 80% 1,441 500 1,400 70% 1,200 405 MCC 400 1,000 MGE 60% 800 662 482 PEMSA 300 270 572 600 208 50% 200 400 147 175 108 37% 200 45% 40% 100 69 0 41% 31% 36% 2011 2012 2013 2014 2015E 201
Slide 26: Infrastructure Divisions Overview
Infrastructure Divisions Overview Perforadora México México Generadora de Energía México Compañía Grupo México Servicios de (PEMSA) (MGE) Constructora (MCC) Ingeniería (GMSI) Oil & Gas Power Construction Engineering ► 55 years working alongside ► Newest division in the ► Relevant experience in the ►
Slide 27: Grupo Mexico covers most of the opportunities in Mexico's National Development Plan
With our companies, Grupo Mexico covers most of the opportunities in Mexico's National Development Plan National Development Plan 2014-2018 Grupo Mexico covers 72% of the development plan Oil & Gas Urban Construction & Power Hydraulic Health & Development Transportation Tourism Sectors of Main Focus
Slide 28: PEMSA Onshore Drilling & Drilling services
PEMSA Onshore Drilling & Drilling services Onshore Drilling Drilling Fluids Well Cementing Directional Drilling Hydraulic Fracking Engineering Engineering Services Services Overview Overview Overview Overview Overview ► Expertise in some of ► Provides drilling ► Cementing services to ► Directional D
Slide 29: PEMSA Offshore Drilling Assets
PEMSA Offshore Drilling Assets “Sonora” Jack-up “Chihuahua” Jack-up “Zacatecas” Jack-up “Tabasco” Jack-up Description Description Description Description Description Year built: 1979 Year built: 2011 Year built: 2012 Year built: 2013 Last modification: 2009 Delivery date: Abr/2012 Deli
Slide 30: The Oil & Gas Opportunities for CIPM
The Oil & Gas Opportunities for Controladora de Infraestructura Petrolera México (CIPM) will focus on … ►The company's experience / ability to use its current Main assets. Mainly focus on fields of land, and shallow waters Opportunities ►Interesting economic potential. Proven fields is that will be
Slide 31: Energy Division (MGE) Assets in Operation
Energy Division (MGE) Assets in Operation Pipeline for Gas Transportation Combined Cycle Power Plants Wind Farm Overview Overview Overview ► From Agua Prieta to Nacozari, Sonora ► Two combined cycle power plants ► One 74 MW Wind Farm ► 100 Km ► 250 MW each ► 37 turbines to produce 239 GWH per year ►
Slide 32: The investment Opportunities for MGE
The investment Opportunities for MGE will focus on … ►Additional investments to generate energy Current for own consumption. Business Focus ►Combined cycle Power Plants ►Alternative Power “Green Energy” Main • Wind Farms Opportunities that will be • Hydroelectric evaluated • Solar Fields • Cogenerat
Slide 33: The investment Opportunities for MCC
The investment Opportunities for MCC will focus on … National Development Plan 2014-2018 Construction (SCT) Highways Railroad Ports Airports Public Transportation • 46 new higways • Optimize the current • Streghten the actual • New airports (E.G • Upgrade the railway operation port capacities Palenq
Slide 34: Reasons to Invest in Grupo Mexico
Reasons to Invest in Grupo Mexico # 1 worldwide reserves with excellent organic growth prospects Low cost leader with fully integrated operations Strengthened position as top copper producer Strong financial performance / investment grade credit rating Growing railroad and logistics operation with i
Slide 35: Safe Harbor Statement
Safe Harbor Statement This presentation contains certain statements that are neither reported financial results nor other historical information. These estimates are forward-looking statements within the meaning of the safe- harbor provisions of the Mexican securities laws. These forward-looking est