Corporate Presentation August 2016 (Second quarter 2016 results)

Transcription

1 Corporate Presentation August 2016 (Second quarter 2016 results)

2 Ferreycorp at a glance

3 Highlights FERREYCORP Established in Peru in 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) $477MM Shareholders +2,500 Supporting main economic sectors of countries development, including: mining, construction, energy, trade, industry, services, fishing and marine, agriculture and forestry, among others As of 2Q2016 Financial Statistics Sales (US$) US$ 756mm Sales (S/) S/ 251Bn EBITDA US$ 94mm Ebitda Margin 124% Net debt/ EBITDA 256x

4 CORPORATE HISTORY 90 s Organizational development to take opportunities arising from large mining 00 s Complementary businesses (economic sectors, business lines) 10 s International expansion: CAT and other brands 80 s Redefining business: focus on capital goods Ferreycorp foundation (former Ferreyros SAA) 40 s Caterpillar s Geographical expansion: establishment of branches in Peru s Move operations to Av Industrial facilities 60 s Development of complementary businesses s Registry in Lima Stock Exchange s Debt Issuance: corporate bonds and securitization of commercial papers s Establishment of policies and procedures regarding corporate governance 10 s Shares issuance Bonds issuance in the international market Reorganization: Ferreycorp

5 CORPORATE STRUCTURE Caterpillar dealers in Peru Caterpillar dealers and other businesses in Central America Other subsidiaries in Peru and abroad Guatemala Chile, Colombia, Ecuador El Salvador Belize Nicaragua Sales as of 2Q15: US$632mm (79%) Sales as of 2Q16: US$585mm (77%) El Salvador, Honduras Sales as of 2Q15: US$83mm (10%) Sales as of 2Q16: US$68mm (9%) Sales as of 2Q15: US$88mm (11%) Sales as of 2Q16: US$103mm (14%)

6 SUSTAINABLE BUSINESS MODEL SALES BY LINE OF BUSINESS US$ Millon 2,000 1,800 1,600 1,400 1,200 1, US$19Bn US$172Bn US$167Bn As of - 2Q15 US$858 mm US$756 mm As of 2Q16 Product Support sales 10 Year CAGR 15% ( ) 6% 11% 49% Machinery Parts and Services 9% 7% 43% 7% 10% 35% 33% Rental and used equipment Others 41% 48%

7 DIVERSE CUSTOMER BASE 54% OF DELIVERIES COME FROM NON-MINING CUSTOMERS SALES BY ECONOMIC SECTORS 2% 3% 3% 2% 3% 1% 1% 1% 4% 4% 2% 2% 12% 3% 2% 49% 1% 4% 12% 34% 10% 5% 33% 24% 30% 13% 5% 21% 14% 2010 As of 2Q2015 As of 2Q2016 Open pit mining Construction Transport Agriculture and forest Hydrocarbons and energy Underground mining Government Industry, commerce and services Fishing and marine Others

8 Key capabilities

9 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

10 INTERNATIONAL FOOTPRINT Florida Guatemala Belice El Salvador Honduras Nicaragua Colombia Ecuador Perú Chile Ferreycorp Workforce Peru Abroad Total Employees 3, ,042 Technicians 2, ,635 Total (Jun-16) 5,670 1,007 6,677

11 STRATEGIC BUSINESS PARTNERS WORLD-CLASS BRANDS Among many other brands

12 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

13 UNMATCHED LOGISTICS CAPABILITIES ONE OF OUR MAIN COMPETITIVE ADVANTAGES We move cargo equivalent to 33,000 pounds per day; averaging 25 million miles per year to deliver the items where customer needs them Operating 50+ warehouses, several located in remote locations (eg: mines) 7,000 yearly trips to reach our customers Importing 530,000 ft3 per month Highest standards in operations and transportation partners ISO9002 certification ISO certification 5-star contamination control

14 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, Day 5: 95% 365 days, 24x7 operation, including expedited process for urgent requests Leading importer in Peru green channel Factory Freight forwarder Transport Air/Sea Customs expedite CDC + Inland Mine site operations Ferreycorp is constantly improving efficiency and technology to ensure best practices Guarantee hours delivery from US to Lima and between hours to mine site

15 CORPORATE STANDARDS STRONG CORPORATE GOVERNANCE Ferreycorp (FERREYC1) is listed in the Lima Stock Exchange since 1962 Ferreycorp is included in the Corporate Governance Index of the Lima Stock Exchange since its inception in 2008 BOARD Dependent Directors Independent Directors Oscar Espinosa Eduardo Montero Board of Directors: The Board of Directors is composed by 10 members The Board of Directors of Ferreycorp is complemented by four committees: General Management and Strategy Committee Nominations, Remuneration and Corporate Governance Committee Audit and Risk Committee Innovation and Systems Committee Recognitions: Ferreycorp won the Key of the Lima Stock Exchange for 4 times: 2008, 2011, 2012 and 2013 Ferreycorp is a member of the Companies Circle of the Latin America Governance Roundtable launched by OECD and IFC International recognitions: World Finance Award 2011 and 2012; Latin America Investor Relations Awards 2011 (LirA 11), Ethical Boardroom Corporate Governance Awards 2015: South America, Industrial services sector Carlos Ferreyros Juan Manuel Peña Andreas von Wedemeyer Manuel Bustamante Aldo Defilippi Carmen Rosa Graham Ricardo Briceño Raúl Ortiz de Zevallos

16 CATERPILLAR MARKET SHARE IN PERU KOMATSU 31% SANDVIK 14% Open pit mining P&H 5% SANDVIK 1% Include shovels and drills ATLAS COPCO 9% JOY 2% CATERPILLAR 63% Underground mining CATERPILLAR 75% CASE 3% HYUNDAI 4% HAMM 5% OTROS 21% NEW HOLLAND 4% JCB 4% Heavy construction KOMATSU 7% CASE 7% JOHN DEERE 9% OTROS 16% BOBCAT 8% JOHN DEERE 12% CATERPILLAR 51% General construction CATERPILLAR 49% Import Statistics - June 2016 (Rolling 12 months) Units

17 Financial Performance

18 TRACK RECORD OF CONSISTENT FINANCIAL PERFORMANCE 28% 26% 24% 22% 20% 18% 16% GROSS MARGIN 211% 203% 211% 207% 212% 229% 242% As of 2Q15 OPERATING MARGIN 243% 232% As of 2Q16 9% 7% 5% 3% 1% Avg Exchange rate Gain (loss) to exchange rate (million US$) 68% 47% 50% 47% NET MARGIN 30% 19%19% % 53% As of 2Q15 As of 2Q EBITDA (US$MM) AND EBITDA MARGIN (%) 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 86% 78% 71% 64% 75% 69% 92% 91% 84% As of As of 2Q15 2Q16 118% % 109% % 112% 107% % % As of 2Q15 EBITDA EBITDA margin % 124% As of 2Q16 130% 120% 110% 100% 90% 80% 70% 60% 50% 40%

19 INVESTMENT IN ASSETS 1) ACCOUNTS RECEIVABLES ACCOUNTS RECEIVABLE EVOLUTION BY TERM FACTORING US$ MM US$ MM Q15 2Q16 Short term Long term Receivables impacted by mining equipment deliveries, to be collected next quarter 10 Common practice, 30days for collection 0 2Q Q 2016

20 INVESTMENT IN ASSETS 2) INVENTORY AND FIXED ASSETS INVENTORY EVOLUTION (US$MM) CAPEX EVOLUTION (US$MM) As of 2Q15 Spare parts Inventory machinery and others As of 2Q As -13 of 2Q15 Infrastructure Rental fleet Equipment and components As of 2Q : 1Q15 Ferreycorp acquired a piece of land for US$20 million 2016: investments in 2016 correspond to some locations in La Joya, Punta Negra, which sum up to US$ 15million

21 CASH CYCLE Targets: -47 days of accounts payable Inventory 120 days 30x Payable 45 days Receivable days Cash Cycle of 145 days 62 days of accounts receivable 127 days of Inventory (277x)

22 ACCESS TO DIVERSIFIED SOURCES OF FINANCING Natural hedge: revenue debt DIVERSIFIED FUNDING BASE (US$MM) DEBT BY CURRENCY 2Q Banks Caterpillar Bonds US$ 556 MM US$ 589 MM 72% 20% 2% 5% 0% Soles Quetzales Pesos Chilenos Pesos Colombianos US$ 640 MM Dollars US$ 731MM DEBT BY GROUP OF COMPANIES US$ 728MM US$ 558MM 120 US$ 434MM US$ 311MM 9% 16% 75% CAT Dealers in Peru CAT Dealers in Central America and other businesses abroad Other businesses in Peru and abroad

23 ACCESS TO DIVERSIFIED SOURCES OF FINANCING MATURITY OF FINANCIAL DEBT (US$MM) 60% AVG INTEREST RATE 200, , , , , ,000 80,000 60,000 40,000 20, % 40% 30% 50% 40% 53% 50% 49% 41% 42% 44% 44% FINANCIAL EXPENSES (AS% OF TOTAL SALES) 465% 424% As of 2Q16 Strategy of financing: short term, flexible without penalties and low interest rate Availability of credit lines 30% 20% 10% 00% 24% 21% 20% 20% 19% 20% 230% As of 2Q16

24 LEVERAGE RATIO COVENANT NET DEBT TO EBITDA RATIO ADJUSTED DEBT TO EBITDA RATIO As of 2Q16 Adjusted debt: total debt excluding short term debt related to inventories Covenant < 35x

25 PROFITABILITY RATIOS 18% 16% 14% 12% 10% 8% 6% 4% 67% 64% 113% 131% 84% 70% 121% 115% 99% 81% 84% 58% 63% 42% 53% 141% 102% 106% 77% 55% 59% 73% 46% 40% 141% 98% 74% 160% 132% 81% 143% 135% 77% 2% 0% 4Q Q Q Q Q Q Q Q Q Q2016 2Q2016 ROE ROA ROIC ROIC: EBITLTM / Invested Capital (total debt + total equity)

26 FERREYCORP IN THE CAPITAL MARKET Capital S/ 1 014,326,324 SHAREHOLDERS COMPOSITION AS OF JUNE 2016 Nº de shares Dividend Yield 49% 1 014,326,324 Repurchased shares as of June 30th ,430 Foreign investors 36% Local pension funds 22% Peruvian investors 42% MAIN SHAREHOLDERS AS OF JUNE 2016 Titular % La Positiva Vida Seguros y Reaseguros SA 896% Onyx Latin America Equity Fund LP 803% RI- Fondo 2 (AFP Prima) 722% Equinox Partners 582% IN-FONDO 2 (AFP Integra) 502% AVERAGE AMOUNT TRADED VOLUME (S/ MM) STOCK PERFORMANCE (S/) 5 ene 20 ene 4 feb 19 feb 6 mar 21 mar 5 abr 20 abr 5 may 20 may 4 jun 19 jun 4 jul 19 jul 3 ago 18 ago 2 sep 17 sep 2 oct 17 oct 1 nov 16 nov 1 dic 16 dic 31 dic 15 ene 30 ene 14 feb 29 feb 15 mar 30 mar 14 abr 29 abr 14 may 29 may 13 jun 28 jun

27 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 capitalized and distributed as stock dividends The amount to be distributed every year is approved in the Annual Shareholders Meeting In the 2013 Shareholders Meeting a modification was approved to assign a new maximum range: from 50% to 60% of freely available profits Periodo Número de acciones Capital (nuevos soles) Utilidad disponible (neto de reservas) Límite inferior 5% del capital Límite superior 50% de la utilidad (neto de reservas) Dividendo Dividendos en efectivo por acción (%) Dividendo por acción (S/) ,000, ,500, ,268,787 11,275, ,134, ,275, % ,000, ,800, ,793,743 11,990, ,396, ,990, % ,980, ,178, ,127,826 13,308, ,563, ,308, % ,360, ,196, ,972,754 14,209, ,986, ,419, % ,128, ,640, ,345,493 16,782, ,172, ,289, % ,680, ,448, ,400,381 20,772, ,200, ,772, % ,816, ,297, ,452,887 23,364, ,226, ,037, % ,691, ,961, ,528,171 26,548, ,264, ,857, % ,402, ,402, ,736,476 34,920, ,368, ,904, % ,234, ,234, ,285,552 40,161, ,142, ,194, % 006 Límite superior 60% de la Límite inferior utilidad neta 5% de capital (neto de reservas) ,227, ,227, ,996,131 47,261, ,797, ,797, % ,014,326,324 1,014,326, ,973,036 50,716,316 70,783, ,859, % ,224,370 1,014,326, ,589,380 50,716,316 87,353, ,353, %

28 Contacts Administration and Finance Manager: Patricia Gastelumendi Treasury Manager: Liliana Montalvo Investor Relations: Elizabeth Tamayo