Ferreycorp S.A.A. PEN Q12 Results: Lower share from spare parts & services and higher operating expenses affected Ferreycorp s margins.

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1 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 EQUITY RESEARCH Quarterly Results August 1, 2012 Alberto Arispe Marco Contreras Head of Research Analyst (511) (511) Capital Goods Industry Fair Value PEN 2.92 Overweight + Equity s Fair Value (MM PEN) Fair Value Per Share (PEN) Recommendation Market Capitalization (MM PEN) Market Price (PEN) Shares Outstanding Potential upside ADTV - LTM (MM PEN) 52 Week Range YTD Variation Dividend Yield - LTM Trading (LSE: FERREYC1) 2, Overweight+ 1, % % 2.4% LSE 2Q12 Results: Lower share from spare parts & services and higher operating expenses affected Ferreycorp s margins. (Ferreycorp) reported 2Q12 results registering a net income of PEN 37 million, 45.9% lower than last year s figure. Highlights are shown below: (i) Sales grew 18.1% YoY in the second quarter of the year, boosted by Caterpillar equipment sales (+21.4% YoY) which reached a 45.6% share in total sales. Additionally, sales were affected by the revaluation of the local currency; therefore sales growth expressed in dollars was higher (+23.4%YoY). ADTV: Average Daily Traded Volume LTM: Last Twelve Months Financial Ratios e 2013e (ii) Gross income registered an increase of 13.8% YoY (lower than sales growth), due to a lower participationof the spare parts and services business line (from 35.0% in 2Q11 to 32.2% in 2Q12). This line reports better margins to Ferreycorp than the sale of machinery. P / E P / BV P / EBITDA (CA - Inventory) / CL (iii) Sales and Administration expenses increased 29.9% YoY due to the following reasons: - Rising variable costs associated with major sales. Debt / EBITDA Higher personnel expenses due to the hiring of 377 new EBITDA / Fin. Expenses EPS technicians and an increase in salaries. Increase in information systems' expenses. ROE 20.8% 16.7% 17.3% - Increase in provisions for doubtful account receivable due to ROA 6.5% 5.6% 6.0% an extraordinary event related to a credit granted to a specific client. Source: SMV, Kallpa SAB Note: CA & CL refer to Current Assets and Current Liabilities, respectively. Chart N 1: FERREYC1 vs. INCA PEN FERREYC1 INCA Pts (iv) (v) (vi) Other income totaled PEN 1.1 million, lower than the PEN 6.3 registered in 2Q11. The higher income from 2011 was the cause of an extraordinary gain of PEN 4.7 million from the recovery of a provision for inventory write-offs and PEN 1.4 million from the payment of dividends in other investments. Operating income decreased 15.7% YoY with a consequent drop in the operating margin from 9.8% in 2Q11 to 7.0% in 2Q12. Financial expenses grew 17.8% YoY due to an increase of 18.2% in average liabilities subjet to interest rates. However, these expenses represent 2.0% of total sales, in line with the company s target. Source: Bloomberg

2 Chart N 2: 2Q12 Sales by business unit 7.1% 0.8% 2.3% 7.1% 4.8% 32.2% 45.6% (vii) (viii) The increase in liabilities subject to interest rates (mostly debt) was due to higher inventory purchases for the sale and rental of machinery and the acquisition of the Bucyrus line. Foreign exchange gains caused a significant impact in 2Q12 results, after totaling a PEN 3.2 million loss, compared to a PEN 19.0 million gain in the same quarter of Start-up of Bucyrus line On June 1st, Ferreycorp started selling its new Bucyrus mining machinery line. The company disbursed US$ 70 million for the acquisition of this line. Caterpillar Rentals Agricultural Other Foreign Sales Chart N 3: 2Q12 Sales by Industry 5.5% 6.2% 3.6% 4.2% 26.4% 7.7% Spare parts and Services Automotive Other Domestic Sales 46.4% The new machinery line includes electric and hydraulic shovels with a capacity to lift up to 110 tons and a cost that ranges between US$ 1 US$ 20 million. Due to the prices and sizes of the new machinery, the company expects the performance of the sales of this line to be volatile. However, Ferreycorp estimates revenues between US$ 50 US$ 60 million annually over the next five year for the Bucyrus line. Additionally, within the same time period, the company expects to generate between US$ 40 US$ 70 million annually in spare parts and services coming form this new line. Conclusion At the end of the first half of the year, Ferreycorp s results are in line with our sales and sales expense estimates. However, the estimates differs regarding the operating and financial expenses. We expect that the benefits of higher personnel and information systems' expenses result in improving Ferreycorp s margins for the next quarters. Mining Construction Transport Industrial Government Agricultural Other Chart N 4: 2Q12 Sales by Subsidiaries Moreover, we are optimistic regarding the additional revenues that will come from the Bucyrus line, which we believe will add value to the holding. As mentioned in the previous report, the company's leadership by market share, Caterpillar s support and the growing local economy, coupled with the infrastructure and mining project portfolios, will drive Ferreycorp's growth in the future. 24.1% 8.2% 67.7% Finally, it's worth mentioning the high exposure of the company to the mining sector (46.4% of sales in 2Q12), which is currently sensitive due to social conflicts, could impact Ferreycorp s sales growth. We maintain our fair value of PEN 2.92, recommending to overweight + Ferreycorp's shares within a benchmark portfolio for the Peruvian market. Ferreyros S.A. Local Subsidiaries Grupo Gentrac Quarterly Results 2

3 2Q2012 Results Results (000 PEN) 2Q2012 1Q2012 2Q2011 QoQ YoY 1H e Sales 1,102,446 1,013, , % 18.1% 2,115,469 4,457,582 COGS -856, , , % 19.4% -1,660,389-3,507,622 Gross Income 245, , , % 13.8% 455, ,960 Gross Margin 22.3% 20.7% 23.1% 21.5% 21.3% Operating Expenses -168, , , % 35.6% -313, ,324 Sales Expenses -109, ,985-87, % 25.7% -212, ,454 Administrative Expenses -60,110-43,602-43, % 38.4% -103, ,703 Others 1,129 1,335 6, % -82.1% 2,464 11,833 Operating Income 77,124 64,307 91, % -15.7% 141, ,636 Operating Margin 7.0% 6.3% 9.8% 6.7% 7.8% Net Financial Income -20,954 Interest Income 4,302 Interest Expenses -21,665 Foreign Exchange Gain -3,172 Share in Associates -419 Income Before Taxes 56,171 1,401 8, % % -19,553-51,040 6,152 6, % -35.4% 10,454 38,484-18,882-18, % 17.8% -40,547-95,781 12,762 19, % % 9,590-1,369 1, % % 950 6,257 65, , % -43.9% 121, ,596 Taxes Net Income Net Margin Earnings per Share (PEN) -19,160 37, % ,815-31, % -39.5% -39,975-88,379 44,893 68, % -45.9% 81, , % 7.3% 3.9% 4.6% Depreciation and Amortization 28,541 EBITDA 109,549 EBITDA Margin 9.9% 31,440 25, , , % 13.4% -9.2% 11.7% 6.1% -12.4% 59, , , , % 11.2% Multiple Analysis Company Finning International Inc Toromont Industries Ltd Randon Participacoes SA Wajax Corp Titan Machinery Inc H&E Equipment Services Average Source: Bloomberg Country Peru % 4.7% Canada 3,949 USA Market Cap. (MM US$) 9.1 P/BV Canada 1, Brazil 1, Canada 807 P/E Trailing 12M P/E EV/EBIDTA Trailing 12M USA % 6.3% 30.0% 17.0% 31.0% 15.2% 11.8% 7.5% 2.6% 1, % 7.3% ROE ROA 15.8% 5.5% 4.6% EV: Market Cap. + Preferred Equity + Debt - Cash & Equivalents Chart N 5: P/E vs. - Peer Companies Chart N 6: P/BV vs. - Peer Companies 14 Titan Mkt. Cap. 14 Titan Mkt. Cap Randon Ferreycorp Wajax Finning Toromont Ferreycorp Randon Finning Wajax Toromont 4 P/E P/BV Quarterly Results 3

4 Appendix: Disclaimer Analyst s certification The analyst that prepared this report hereby certifies that: i) the opinions and views expressed in this valuation report, in regard with the issuer and with the company s overview, reflected his/her personal opinion and ii) No part of his/her salary compensation was, is or will be related directly or indirectly to the recommendations expressed in this report. The economic compensation of the analyst that prepared this report is based in several factors, including but not limited to Kallpa Securities SAB s profitability and the profits generated by its different areas, including investment banking. In addition, the analyst does not receive any kind of economic compensation from the companies that he/she covers. This valuation report was prepared by Kallpa Securities SAB s employees that maintain the Analyst position. Persons involved in the elaboration of this report are authorized to maintain shares. Share prices in this report are based on market prices as of closing of the day prior to the publishing of this report, unless it is strictly stated. General Statement This document is for informative purposes only. Under no circumstances it should be used / be considered as an offer of sale or an application of purchase of shares or any other securities mentioned in this document. The information herein has been obtained from sources which are believed to be reliable, but Kallpa Securities SAB does not guarantee the trustfulness or accuracy of the content of this report, or the future market values of shares or other securities mentioned in this document. The views and opinions expressed in this document constitute our opinion at the time of this report and are subject to change without any notice. Kallpa Securities SAB does not guarantee analysis updates before any change in the circumstances of the market. The products referred in this document may not be available for purchase in some countries. Kallpa Securities SAB has reasonably designed policies to prevent or to control the exchange of non-public information used by areas such Research and Investment, Capital Markets, among others. Definition of qualification ranges Kallpa Securities SAB has 5 qualification ranges: Overweight +, Overweight, Hold, Underweight and Underweight -. The analyst will assign the coverage one of these ranges. Underweight - < - 30% > + 30% Overweight + Underweight -30% to -15% +15% to +30% Overweight Neutral -15% to 0% 0% to +15% Neutral The range assigned to each company covered by the analyst in these reports is based on the analysis/monitoring Kallpa Securities SAB has been developing for the company. In some cases, the analyst can express his/her short-term points of view to traders, vendors and some Kallpa Securities SAB s clients but this point of view may differ in time by market volatility and other factors. The fair value calculated by Kallpa SAB is based in one or more valuation methodologies commonly used by financial analysts, including but not limited to discounted cash flows, In Situ valuations or any other applicable methodology. It should be noted that the publication of a fair value does not imply any guarantee that the value will be achieved. Quarterly Results 4

5 KALLPA SECURITIES SOCIEDAD AGENTE DE BOLSA Management Alberto Arispe CEO (511) Trading Enrique Hernández Eduardo Fernandini Javier Frisancho Jorge Rodríguez Head Trader Trader Trader Trader (511) (511) (511) (511) Corporate Finance Ricardo Carrión Manager (511) Equity Research María Belén Vega Marco Contreras Alex Rodríguez Fátima Ramírez Senior Analyst Analyst Analyst Assistant (511) (511) (511) (511) Operations Elizabeth Cueva Alan Noa Mariano Bazán Armando Trujillo Manager Analyst - Securities Analyst - Treasury IT (511) (511) (511) (511) ecueva@kallpasab.com anoa@kallpasab.com mbazan@kallpasab.com atrujillo@kallpasab.com Miraflores Office Jose Antonio Avendaño Daniel Berger (511) (511) javendano@kallpasab.com dberger@kallpasab.com Chacarilla Office Hernando Pastor Gerardo del Águila (511) (511) hpastor@kallpasab.com gdelaguila@kallpasab.com Quarterly Results 5