Cementos Argos Sa · BVC:CEMARGOS
Cementos Argos Sa — Investor Presentation (September 2010)
35 slides from Cementos Argos Sa's investor presentation, September 2010
Slide 1: Corporate Presentation September 2010
CORPORATE PRESENTATION September 2010
Slide 2: Over 75 years in the market focused on Cement, Ready Mix and Aggregates
Over 75 years in the market focused on the Cement, Ready Mix and Aggregates business Colombian leader in Cement, Ready Mix and Aggregates since 1934 Market Cap.: US$7.4 billion* Revenues 2009: US$1.6 billion EBITDA 2009: US$304 million Investment Portfolio: US$3.4 billion* Net Debt: US$1.4 billion*
Slide 3: Investment Opportunity
Investment Opportunity Leader in its markets 30% average EBITDA annual growth (2005 – 2010E) Solid growth projections: – Infrastructure development in Colombia and the Caribbean – U.S. economic recovery and stimulus plan – Haiti’s reconstruction Transparency, highest standards of Corporate Governanc
Slide 4: Throughout its 75-year history, Argos has grown into a leading regional cement company
Throughout its 75-year history, Argos has grown into a leading regional cement company: 2008-2010+ 2005-2007 Capital Structure 1990-2005 U.S. Expansion / Strengthening and 30’s-80’s Caribbean Expansion / Vertical integration Reorganization Consolidation Colombian Expansion 1934 1997 2005 2008-2010 L
Slide 5: Ownership Structure
Ownership Structure 17.1% Pension Funds Suramericana Foreign 49.0% 51.0% 2.0% Funds Chocolates Market 31.9% Pension Float 18.2% Funds Inversiones 62.2% 37.8% 1.9% Foreign Funds Argos Market 17.7% Float Cementos Argos Ownership Structure at 1H2010 5
Slide 6: Corporate restructuring to confront the challenges of a growing international company
Corporate restructuring to confront the challenges of a growing international company Chief Executive Officer Corporate New Colombia Caribbean USA Corporate Human Strategic Finance Business Forestry Region Region Region Affairs Talent Resources (CFO) Development • Production • Legal • Capital • Recr
Slide 7: Cementos Argos is the fourth-largest cement company in LATAM
Cementos Argos is the fourth-largest cement company in LATAM and a leader in the western hemisphere… Geographic Coverage The United States Ready-mix Avg. Daily Traded Volume1: US$3mm Sixth largest producer, with 2.1% market share Top 5 largest publicly-traded Installed capacity: 6.5mm m3 company in
Slide 8: Competing with major international players
…competing with major international players Installed Capacity – Million TPA Installed Capacity Evolution Cemex 43 5.3% Votorantim 33 Holcim 33 19.2% 6.6% Argos 14 15.6% Lafarge 10 Camargo Correa 9 75.4% Cruz Azul 8 77.8% Cimpor 6 C. Lima 6 Joao Santos 5 2005 2010 Colombia The Caribbean Other Source
Slide 9: Argos is the leader in Colombia, a market with significant growth potential
Argos is the leader in Colombia, a market that presents significant growth potential… Cement Plants in Colombia Installed Installed Production Market Company Capacity Capacity Estimate Share (mm TPA) Share (mm MT) 10.6 62% 4.6 51% 4.0 24% 3.1 35% 2.1 12% 1.2 13% Other 0.3 2% 0.1 1% TOTAL 17.0 100% 9
Slide 10: Argos' Highlights so far this year
Argos’ Highlights so far this year… Cemento Panamá, a subsidiary of Cementos Argos, signed the contract to supply cement and cementitious materials for the Atlantic Side of the Panama Canal expansion New expansion project in Cartagena produced its first clinker in July 2010. Expected to be fully ope
Slide 11: Argos is an active player in Colombian infrastructure development
Argos is an active player in the Colombian infrastructure development YTD to June 2010, Cementos Argos was awarded 3.8 million cubic meters in ready mix contracts to be dispatched within the next 24 to 36 months Cartagena Refinery Expansion Distribution of the 3.8 million m3 awarded La Línea Tunnel
Slide 12: Building Permits in Colombia
Building Permits in Colombia In the last 6 months, the area approved for construction has showed a rising trend. YTD to June 2010, this indicator showed an increase of 23% vs. the first 6 months of 2009 M2 Approved for Construction Annual Variation 50,0% 40,0% 30,0% 20,0% 10,0% 0,0% Mar-09 Mar-10 Ma
Slide 13: Expansion of the Cartagena facility increases production capacity by 20%
The expansion of the Cartagena facility increases total production capacity by 20% and strengthens the company’s leadership potential in the Caribbean Market Expected to be fully operational by 4Q2010 – First Clinker produced in July 2010 Investment: ~US$400mm Installed Capacity: 1.8mm TPA Own energ
Slide 14: Recovery in the United States
Recovery in the United States Argos Geographic Coverage in the United States Market Overview PCA expects a modest 2-4 million metric ton increase for 2010 – Expected double-digit CAGR for 2011 - 2015 According to the Federal Highway Administration, 41.7% of the US$ 26.6 billion highway ARRA funds ha
Slide 15: Historical cycles indicate a potential recovery
Despite the impact, performance during historical cycles indicate a potential recovery US Cement Consumption Metric Tons (mm) 140 2005: 123’ 2015: 116’ 120 100 -44% 80 60 2009: 68’ 40 20 0 1929 1935 1941 1947 1953 1959 1965 1971 1977 1983 1989 1995 2001 2007 2012 Source: Portland Cement Association
Slide 16: PCA's Summer Forecast shows a positive 2011-2014 trend
PCA’s Summer Forecast shows a positive 2011- 2014 trend for the 6 states where Argos has presence Cement Consumption Metric Tons (mm) 60,0 15,4% 15,9% 11,8% 6,9% 8,7% 50,0 -11,6% 40,0 30,0 26,9 28,0 -32,2% 25,8 23,8 23,1 19,9 20,0 16,1 17,2 10,0 0,0 2007 2008 2009 2010E 2011E 2012E 2013E 2014E Georg
Slide 17: Perspectives of Private and Public Investment in the Caribbean
Interesting Perspectives of Private and Public Investment in the Caribbean Installed Capacity in the Caribbean Market Overview 2.7 million of TPA Panama Canal expansion 19% Panama Cemento Panamá, subsidiary of Cementos Argos, signed a contract with the consortium Haiti “Grupo Unidos por el Canal”, f
Slide 18: Economic Growth Perspectives in the Caribbean
Economic Growth Perspectives in the Caribbean Panama - GDP annual var. (%) The IMF expects a strong recovery 12,1 for 2011, being infrastructure 8,5 9,2 7,5 developments an important catalyst 6,9 6,3 5,0 4,2 2,2 2,4 0,6 01 02 03 04 05 06 07 08 09E 10E 11E Dominican Republic - GDP annual var. (%) Hai
Slide 19: Track record of revenue growth and geographic diversification
Argos has an excellent track record of revenue growth as well as geographic diversification Revenues EBITDA CAGR 2005 – LTM 2Q2010: 15.8% CAGR 2005 – LTM 1Q2010: 29.3% 19,1 4.000 800 3.116 11,7 593 3.000 600 2.000 1.648 1.581 400 302 194 1.000 710 200 83 0 0 2005 LTM 2Q2010 2005 LTM 2Q2010 US$ mm CO
Slide 20: 1H2010 Consolidated Results
1H2010 Consolidated Results April - June First Half Var. (% ) Thousand million COP$ 2010 2009 Var. (% ) 2010 2009 Var. (% ) Q2 / Q1 2010 Revenues 774 853 (9,2) 10,7 1.474 1.808 (18,5) Costs & SG&A 700 762 (8,1) 6,7 1.356 1.649 (17,7) Operating Profit 74 91 (18,4) 70,8 117 159 (26,2) EBITDA 153 177 (
Slide 21: Debt Profile at June 2010
Debt Profile at June 2010 Short Term: US$ 495 million 140 120 100 8 2 8 80 109 60 4 40 80 78 80 3 52 20 21 21 24 3 2 0 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Commercial Paper Repos Syndicated Others Long Term: US$ 1.094 million 300 Recently signed 10-year
Slide 22: Debt Profile at June 2010 (Cont'd)
Debt Profile at June 2010 (Cont’d) Short Term vs. Long Term Currency Profile 33% 31% Long Term COP Short Term USD 67% 69% 78% Long Term After 10-year bullet loan Consolidated Cost of Debt (%) 10,6 10,1 9,3 8,6 8,6 8,3 7,6 7,7 7,3 6,9 6,8 6,6 6,2 2,7 2,4 2,4 2,4 2,4 2,4 2,0 1,7 1,7 1,7 1,7 1,8 1,9 Ma
Slide 23: Cash Flow 1H2010
Cash Flow 1H2010 In the 1H2010 cash levels have decreased by US$ 87 million Divestiture of stock portfolio for US$ 135 million Debt amortization for US$ 121 million + 141 Million US$ - 44 316 229 - 124 -5 +2 + 135 - 54 - 16 - 121 Cash at Financial Dividends, Other Debt Cash at Caja Inicial EBITDA EB
Slide 24: Stock Performance
Stock Performance LTM to August 2010 Base 100 – August 31st, 2009 200 175 150 125 100 75 50 25 0 Nov-09 Feb-10 Jun-10 Dec-10 Jan-10 Ago-09 Dic-09 May-10 Jul-10 Ago-10 Sep-09 Ene-10 Abr-10 Apr-10 Aug-09 Aug-09 Mar-10 Oct-09 Cemex Holcim Lafarge Italcementi Heidelberg CemArgos IGBC COLCAP COL20 -41,6%
Slide 25: Real Estate Assets improve Argos' potential for growth
Real Estate Assets improve Argos’ potential for growth With an outstanding 10-year track-record, URVISA S.A., a subsidiary of Cementos Argos has developed 330 Ha in North Barranquilla URVISA operates as an “horizontal developer“ in Argos’ non-operating terrains with the objective of selling them to
Slide 26: Argos' Real Estate Non-Operating Assets
Argos’ Real Estate Non-Operating Assets Barranquilla Barú Island Other 1.200 Ha 1.300 Ha 2.600 Ha Area with the highest projected 22 Km of beach front To develop in the rest of the country growth in Barranquilla and Puerto Beaches, swamps and cliffs Potential for: Colombia. Near Cartagena, city decl
Slide 27: Cementos Argos' Investment Portfolio
Cementos Argos’ Investment Portfolio Company Stake Held Price per Share Value at 31/08/2010 Portfolio Weighting (In COP) (In US$ million)* 10% 1% Grupo Suramericana 26,2% 36.200 2.406 Sura Bancolombia 8,0% 28.420 626 18% Bancolombia Grupo Nal. de Chocolates 5,7% 25.280 341 Others 17 GNCH TOTAL 3.390
Slide 28: Cementos Argos' Balance Considerations
Cementos Argos’ Balance Considerations: Cement, Ready Mix and Aggregates Business Leader in Colombia and in The Caribbean. Ready mix operations in the south of the US Adjusted EV (1) Market Cap.: US$ 7.4 bn Real Estate Assets (+) Net Debt: US$ 1.4 bn 5.100 Ha to develop. Book Value: ~US$ 1 billion*
Slide 29: Sustainable development is an essential part of Argos' business strategy
Sustainable development is an essential part of Argos’ business strategy Sustainability Argos’ social commitment is aimed at generating a productive work environment for its employees, working with local communities on quality educational projects, housing and social infrastructure. In 2009 alone, A
Slide 30: Inversiones Argos
Inversiones Argos
Slide 31: Inversiones Argos' Strategic Sectors
Inversiones Argos’ Strategic Sectors In 2008, Inversiones Argos decided to invest in another strategic sector: ENERGY. At the end of 2009, acquires a controlling stake in Compañía Colombiana de Inversiones, the fourth energy generating company in Colombia Inversiones Argos (holding) 62% 49% Cementos
Slide 32: Inversiones Argos' Investment Portfolio
Inversiones Argos’ Investment Portfolio Price per Share Value at 31/08/2010 Company Stake Held (In COP) (In US$ million) Portfolio Weighting Cementos Argos 62,1% 11.820 4.569 Grupo Suramericana 9,1% 36.200 840 4% 2% 3% Cementos Argos Colinversiones 48,7% 6.520 1.236 12% Colinversiones Sura Bancolomb
Slide 33: Colinversiones and EPSA power generators in Colombia
Colinversiones is the second thermo electric generator and EPSA is the fourth hydro generator in Colombia Colinversiones and EPSA – Geographic Coverage Colinversiones Operations in Atlántico, Santander and Antioquia Installed capacity: 630 MW Projects: 189 MW Total: 819 MW Thermo EPSA 2nd thermo ele
Slide 34: Important Disclosure
Important Disclosure This presentation contains certain forward-looking statements and information respecting CEMENTOS ARGOS S.A. (“ARGOS”) that are based on its experience of present facts, expectations and projections, circumstances and assumptions about future events. Many factors could cause the
Slide 35: Contact Information
Contact Information www.argos.com.co Ricardo Sierra Tomás Uribe CFO Investor Relations e-mail: rsierra@argos.com.co Tel.: (574) 319.87.12 Medellín, Colombia e-mail: turibe@argos.com.co Medellín, Colombia 35
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