Corporate Presentation February 2018

Transcription

1 Corporate Presentation February 2018

2 Company Overview

3 HIGHLIGHTS Established in Peru in years of business, 75 years of alliance with CAT currently operating 17 companies within 10 countries employing a workforce of +6,000 employees Key facts 60% Caterpillar Market Share Market cap (Feb-2018) ~$770MM Shareholders +2,500 SHAREHOLDER STRUCTURE (S/. Million) CONSISTENT FINANCIAL PERFORMANCE Foreign investors 35% Local pension funds 32% 5,225 4,878 5,333 4,856 4,843 Peruvian investors 33% 11.3% 10.7% 12.5% 12.0% 11.7% Sales EBITDA EBITDA Margin

4 HISTORY OF THE CORPORATION 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 (former S.A.A.) foundation Ferreyros 40 s Caterpillar s Geographical expansion: establishment of branches in Peru 60 s Development of complementary businesses s Move operations to Av Industrial facilities 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 BVL: FERREYC1 Caterpillar dealers and allied brands in Peru Caterpillar dealers and other businesses in Central America Other subsidiaries in Peru and abroad Guatemala El Salvador Chile, Colombia, Ecuador, Perú Belice Nicaragua El Salvador, Honduras

6 FERREYCORP AT A GLANCE As of Dec 2017 (S/. Million) Caterpillar dealers and allied brands in Peru Caterpillar dealers and other businesses in Central America Other subsidiaries in Peru and abroad Sales % of Total Sales EBITDA % of Total EBITDA EBITDA Margin # of Employees 3, % 10% 16% % 7.6% 1.5% 13% 9% 1% 4, ,127 (*) Third group of companies increasing their share in total sales: 2013 (10%), 2014 (11%), 2015 (12%), 2016 (15%) as a result of diversification strategy through complementary businesses

7 STRATEGY COMPLETE VALUE PROPOSITION Machinery Services Agriculture business Consumables Automotive business

8 Key Capabilities

9 KEY CAPABILITIES Long term strategic partnerships 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

10 PRESENCE IN SOUTH AND CENTRAL AMERICA REPRESENTING LEADER BRANDS

11 MARKET COVERAGE Tumbes Talara Piura Lambayeque Jaén Bagua Cajamarca Trompeteros Tarapoto Iquitos Ferreyros: 6 locations in Lima, 17 branches and offices Unimaq: main location in Lima and 8 branches in Piura, Cajamarca, Lambayeque, Trujillo, Huancayo, Arequipa, Cusco e Ilo. 3 Offices in Cerro de Pasco, Andahuaylas and Ayacucho Trujillo Chimbote Huaraz Pucallpa Huánuco Orvisa: main office in Iquitos and 2 branches in Pucallpa and Tarapoto. 4 Offices in Huánuco, Bagua, Jaén and Madre de Dios Lima Cerro de Pasco Yauli Puerto Maldonado Motored: 2 locations in Lima and 3 branches in Arequipa, Trujillo and Cajamarca Ica Huancayo Ayacucho Cusco Arequipa Puno Soltrak: main location in Lima and 7 branches in Talara, Trujillo, Arequipa, Huancayo, Huánuco, Pucallpa and Loreto MINING, CONSTRUCTION AND ENERGY PROJECTS Ilo Tacna

12 UNMATCHED LOGISTICS CAPABILITIES 890,000 m2 TO SERVE OUR CUSTOMERS 170+ POINTS OF CONTACT US$120M INVENTORY OF PARTS 365 DAYS 24x7 OPERATIONS 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

13 INNOVATION AND TECHNOLOGY The journey: from peripherals to mission critical TBA Market specialist Value creation Integrated information Integrated services Challenge: To make the most out of the different emerging technologies and apply it to value creation RFID, Big data, data mining, machine learning, autonomous operations, business intelligence, internet of things, etc. Software solution provider Technology integrator Trimble provider / distribution channel

14 INNOVATION AND TECHNOLOGY Construction Surface mining by Underground mining Transportation

15 SUSTAINABILITY STAKEHOLDERS Community Ferreycorp Program for Professional Development - Ferreycorp Association Heavy Machinery Operators Club Think Big Program Works for taxes Corporate volunteering Environment Standard Environmental Management System based on the ISO standard Comprehensive Policy on Health, Safety and the Environment Environmental Management Programs: planning, training and awareness, operational control and verification. Customers Mutually beneficial and long-term relationships. Wide range of products and services with the highest added value for customers Excellence in after sales service Proactive monitoring of the customers experiences Complaints management Employees Health, safety and working conditions Professional development Diversity and inclusion Compliance with labor norms Personal and family development Government and society Ferreycorp is a member of the United Nations Global Compact Network Every year, the Corporation published a Progress Report about actions implemented consistently with ubjects included in the ten principles of the UN Compact Network Shareholders Principles of Good Corporate Governance Respect of Shareholders rights Transparent and timely reporting Efficient representation with our Board of Directors Suppliers Hiring policy: transparency and fair treatment Select suppliers based on: quality of product or service, price, delivery terms, human resources policies and practices, occupational health and safety programs. Formalization and development of local suppliers

16 CORPORATE STANDARDS STRONG CORPORATE GOVERNANCE Ferreycorp (FERREYC1) is listed in the Lima Stock Exchange since Ferreycorp is included in the Corporate Governance Index of the Lima Stock Exchange since its inception in Board of Directors: The last General Annual Meeting agreed to reduce the board members from 10 to 9 members. The Board of Directors of Ferreycorp is complemented by three committees: LEAD BY INDEPENDENT DIRECTORS Nominations, Remuneration, Corporate Governance and Sustainability Committee Audit and Risk Committee Innovation and Systems Committee Composition of the Board: Independent Directors Dependent Directors Jorge Ganoza Oscar Espinosa Humberto Nadal Carlos Ferreyros Gustavo Noriega Juan Manuel Peña Javier Otero Andreas von Wedemeyer Manuel Bustamante Recognitions Key of the Lima Stock Exchange: 2008, 2011, 2012, 2013 and Member of the Companies Circle of the Latin America 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, Dow Jones Sustainability Index (2017)

17 CATERPILLAR MARKET SHARE IN PERU Atlas Copco 9% P&H 6% Komatsu 9% Open pit mining Sandvik 14% Sandvik 6% Atlas Copco 12% Caterpillar 70% Underground Mining Joy 1% Caterpillar 73% In units Rolling 12 mo, Dic 17 US$ FOB Values Rolling 12 mo Dic 17 Hyundai 3% SEM Haam 1% 4% Case 0% Doosan 3% Volvo 6% Wacker Neuson 2% Doosan 1% Hidromek 1% Bobcat 2% Heavy Construction Komatsu 14% Bomag 1% John Deere 7% Otros 5% Caterpillar 56% General Construction Komatsu 6% Case JCB2% 5% John Deere 13% Hyundai 2% Volvo 1% Caterpillar 59% US$ FOB Values Rolling 12 mo Dec 17 US$ FOB Values Rolling 12 mo Dec 17

18 Financial Performance

19 US$ Millones SUSTAINABLE BUSINESS MODEL 2,000 1,800 SALES BY LINE OF BUSINESS US$1.9Bn US$1.7Bn US$1.6Bn In a context of poor momentum in mining investment and delayed infrastructure projects 1,600 1,400 US$1.4Bn US$1.4Bn Resilient business model 1,200 1,000 Stable product support business Diversification strategy through business lines, presence in different economic sectors, different countries, various represented brands and a diversified portfolio of products. - 6% 11% 49% Machines Spares and services 7% 12% 36% 9% 9% 33% 33% Rental and used Others 45% 49%

20 OPERATIONAL RESULTS Million Soles (S/ mm) MACHINERY SPARE PARTS AND SERVICES OTHER LINES , , , ,045 2, CAT Mining trucks and equipment Allied Equipment 1,714 2,558 1,935 2,752 CAT machines and engines for other sectors Rental and used 2,203 2, % % Q4'16 Q4' % 2,247 2, % Q4'16 Q4' % -4.81% Q4'16 Q4'17

21 SALES BY GROUP OF COMPANIES Million Soles (S/ mm) Caterpillar dealers in Peru (74% of total sales): +6.6% driven by spare parts and services (62% of total revenues) and Ferreyros mining equipment (+52%) The companies that carry Caterpillar business and other allied lines in Central America (10% of total sales): 1.3% affected by less activity in economic sectors driven by political issues The local subsidiaries and businesses abroad that complement the Caterpillar s business (16% of total revenues): -4.2% CAT dealers and allied brands in Peru -1.6%% CAT dealers and other businesses in CA 1.3% % % 23.8% 26.6% 24.4% Q4'16 Q4' Gross margin Other subsidiaries in Peru and abroad +5.1% 140.0% 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% +6.6% 3,655 3, % 50.0% -4.2% % 90.0% 80.0% 70.0% 1,714 1, % 30.0% % 50.0% 40.0% 30.0% 25.8% 26.0% 25.3% 25.4% Q4'16 Q4' Gross margin 20.0% 10.0% 16.6% 16.3% 18.3% 17.7% Q4'16 Q4' Gross margin 20.0% 10.0% 0.0% 21

22 CONSOLIDATED FINANCIAL RESULTS Million Soles (S/ mm) HIGHLIGHTS Resilient business model Successful execution of operational priorities Consistent EBITDA generation and margin Strong free cash flow generation SALES AND GROSS MARGIN 5,333 5, % 4,878 4,856 4, % 22.9% 24.2% 24.3% 24.1% % 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% NET PROFIT AND NET MARGIN % % 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% EBITDA AND EBITDA MARGIN -2.7% % 35.00% 30.00% 25.00% 20.00% % % 4.7% 5.5% 1.9% 1.9% 3.0% % 2.00% 0.00% % 10.70% 12.50% 12% 11.70% % 5.00% 0.00%

23 INVESTMENT IN ASSETS Million Soles (S/ mm) ACCOUNTS RECEIVABLES EVOLUTION INVENTORY EVOLUTION -1.4% 1,200 1, , ,125 1, ,080 1,029 1,600 1,400 1,200 1, ,580 1, ,160 1,101 1, , % 1, Short Term Long Term Machinery and other Spare parts Consumables Common practice, 30days for collection once invoice is delivered to customer. Accounts receivables affected by mining equipment invoicing during the second quarter.

24 INVESTMENT IN ASSETS Million Dollars (US$ mm) CAPEX EVOLUTION CASH CYCLE CAPEX results negative due to the reduction of the rental fleet. Infrastructure includes mainly the purchase of a piece of land in La Joya (Arequipa) by Ferreyros and works that are being executed in some subsidiaries CAPEX: infrastructure and equipment executed in the new CRC in Arequipa Infraestructure Equipment and components Rental fleet Targets: Inventory Payable Receivables 120 days 45 days days 3.0x Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Cash cycle Collection days Payable days Inventory days

25 CASH FLOW Million Soles (S/ mm) FREE CASH FLOW Operating cash flow Capex Intangible assets Financial expenses Free cash flow 2017 Positive variations Negative variations 25

26 CONSOLIDATED FINANCIAL DEBT Million Dollars(S/ mm) DEBT BY CURRENCY DIVERSIFIED FUNDING BASE 9% 2% 0% Soles % Natural hedge: revenue-debt DEBT BY RATE Quetzales Pesos Chilenos Dolares % Banks Bond Caterpillar Net Debt/ EBITDA Variable rate Fixed rate 99%

27 CONSOLIDATED FINANCIAL DEBT Million Dollars(S/ mm) AVG COST OF DEBT 4.65% 4.40% 4.36% DEBT MATURITY 4.12% % FINANCIAL EXPENSES Million Soles S/ mm) % 7.0% 6.0% 5.0% % % % 1.9% 2.0% 2.60% 1.80% 2.0% 1.0% Strategy of financing: short term, flexible without penalties and low interest rate. Availability of credit lines Financial expenses Financial expenses (% of sales) 0.0% 2017: Financial expenses affected by S/ 4.9 million premium for International Bond partial call.

28 PROFITABILITY RATIOS 16.0% 13.2% 14.3% 13.5% 13.2% 11.8% 12.2% 11.9% 11.9% 10.8% 14.6% 12.8% 13.3% 11.5% 11.6% 11.6% 8.1% 7.7% 7.1% 6.3% 5.5% 6.1% 6.2% 6.2% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 ROE ROA ROIC ROIC: EBITLTM / Invested Capital (total equity + financial net debt): affected by sales that decreased by 4.2% and SG&A by 2%

29 5/01/2016 5/02/2016 5/03/2016 5/04/2016 5/05/2016 5/06/2016 5/07/2016 5/08/2016 5/09/2016 5/10/2016 5/11/2016 5/12/2016 5/01/2017 5/02/2017 5/03/2017 5/04/2017 5/05/2017 5/06/2017 5/07/2017 5/08/2017 5/09/2017 5/10/2017 5/11/2017 5/12/2017 5/01/2018 FERREYCORP IN THE CAPITAL MARKET SHAREHOLDERS COMPOSITION AS OF DEC 2017 Foreign investors 35% Local pension funds 32% Capital S/. 975,683,029 Nº of shares 975,683,029 Dividend Yield 2016 (div ) 7.6% Peruvian investors 33% MAIN SHAREHOLDERS AS OF DEC STOCK PERFORMANCE (S/.) Holder % Onyx Latin America Equity Fund LP 7.58% RI-Fondo 2 (Prima AFP) 7.00% IN-Fondo 2 (AFP Integra) 5.70% IN-Fondo 3 (AFP Integra) 4.51%

30 DIVIDEND POLICY ANNUAL COMPLIANCE In 1997, the company s Shareholders meeting 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 amount to be distributed every year is approved in the Annual Shareholders Meeting. The 2013 Shareholders Meeting approved to increase the upper limit from 50% to 60% of freely available profits. Period Cash dividend (*) % Dividend / Net Profit Cash dividend per share (%) Dividend per share (S/.) % 4.46% % 5.50% % 5.50% % 11.00% % 13.20% % 5.50% % 6.00% % 6.00% % 6.00% % 6.00% % 5.90% % 6.00% % 8.87% % % (*) In million (**) Upper Limit: 60%

31