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Transcript of Unión Andina de Cementos S.A.A UNACEM S.A.A. · de Cementos S.A.A UNACEM S.A.A. J.P. Morgan 6th...

  • Unin Andina de Cementos S.A.A UNACEM S.A.A.

    J.P. Morgan 6th Annual Global Emerging Markets Corporate Conference

    February 23rd, 2015 Atocongo Plant, Lima

  • UNACEM S.A.A.

    Agenda

    1.Overview

    2.UNACEM Peru

    3.Unicon and Firth

    4.Celepsa

    5.Skanon / Drake

    6.UNACEM Ecuador

    7.Preansa

    8.Consolidated Financial Highlights

    Appendix

  • 1. Overview

  • 1.Overview

    UNACEM at a glance

    Concrete Cement Energy

    Nuevas Inversiones S.A.

    Sindicato de Inversiones y Administracin S.A.

    Inversiones Andino S.A.

    Floating Pension Funds

    Minor floating participation

    24.30%

    GEA

    21.34%

    10.96%

    57.80%

    43.40%

    Sources: Company filings as of December 31st, 2014

    4

    Peru Chile - Colombia

    http://www.unicon.com.pe/http://www.celepsa.com/
  • 1.Overview

    Macroeconomic environment

    GDP Growth (annual variation %)

    Real GDP and Inflation (bn PEN and % )

    Construction GDP vs. cement dispatches (variation %)

    Granted Infrastructure Investment (USD Billion)

    420

    470 508

    547 579

    1.5% 3.4% 3.7% 2.8% 3.3%

    -1.0%

    1.0%

    3.0%

    5.0%

    7.0%

    9.0%

    11.0%

    13.0%

    15.0%

    0

    100

    200

    300

    400

    500

    600

    2010 2011 2012 2013 2014

    Real GDP Inflation

    17.8%

    3.6%

    15.8%

    8.9%

    1.3%

    17.2%

    3.9%

    15.2%

    9.1%

    2.9%

    2010 2011 2012 2013 2014e

    Construction GDP Peruvian Cement Dispatches

    4.0 3.6

    1.2

    2014 2015

    Granted Projects begininng 2015

    Sources: INEI, Apoyo, Latin Focus

    5

    5.8%

    4.1%

    4.7% 4.7%

    2.2%

    1.4%

    2.5% 2.4%

    1.7%

    4.8%

    3.9%

    2.4% 2.2%

    0.2%

    Peru Chile Colombia Ecuador USA Mexico Brazil

    2013 2014e

  • 1.Overview

    Pipeline of infrastructure auctioned projects 2015 - 2018

    Sources: Ositran, Proinversin, APOYO Consultora

    6

    N Project Company Location Investment

    (USD Millions) Construction start

    1 Metro de Lima - Lnea 2 Consorcio Nuevo Metro de Lima Centro 5,658 2015

    2 Va Expresa Javier Prado Graa y Montero Lima 900 Indefinido

    3 Amp. Jorge Chvez Lima Airport Partners Lima 800 2015

    4 Va Parque Rmac OAS Lima 750 2012

    5 Rutas Nuevas de Lima Odebrecht Lima 590 2013

    6 Longitudinal de la Sierra Tramo 2 Consierra Tramo II La Libertad, Cajamarca 552 2015

    7 Aeropuerto Internacional Chinchero Consorcio Kuntur Wasi Cusco 420 2016

    8 Muelle Norte - Etapas 1 y 2 APM Terminals Lima 370 2012

    9 Red Vial 4 (Autopista del Norte) Autopista del Norte Lima, Ancash, La Libertad 340 2010

    10 Autopista del Sol Consorcio Vial del Sol La Libertad, Lambayeque, Piura 300 2011

    11 Muelle de Minerales - Puerto Matarani Tisur Arequipa 260 2014

    12 Puerto de Paita Terminales Portuarios Euroandinos

    Piura 227 2012

    13 Panamerica Sur Consorcio Concesin Vial del Sur Sur 200 2015

    14 Va Expresa Sur Graa y Montero Lima 200 2016

    15 Amp. Red Vial 6 Coviperu Lima, Ica 200 Indefinido

    16 Terminal Portuario General San Martn Consorcio Paracas Ica 182 2015

    17 Muelle de minerales - Puerto del Callao Consorcio Transportadora Callao Lima 150 2012

    18 IIRSA Centro - Tramo II Consorcio Desarrollo Vial del Per (Deviandes)

    Lima, Junn, Pasco 126 2013

    19 Modernizacin del Aeropuerto de Pisco Aeropuertos del Per Ica 107 2013

    20 Amp. Red Vial 5 Norvial Lima 100 2014

    Total investment 12,432

  • 2. UNACEM Peru

    Condorcocha Plant, Tarma (3,950 m.a.s.l)

  • 2. UNACEM Peru

    Overview

    On October 1st, 2012, UNACEM absorbed Cemento Andino to consolidate the largest cement company in Peru

    UNACEM has subsidiaries that provide power supply, raw materials supply, distribution channels and warehouse storage of UNACEMs products

    The Company has two cement plants, Atocongo and Condorcocha, which operate in the central region of the country where most of the population lives

    The Atocongo plant has an underground conveyor belt which leads directly to the Conchan Pier (port) in the Pacific Ocean, facilitating cement exports and raw material imports

    Both plants have their own power generation through two hydro power plants and one thermo power plant that provides a significant source of energy

    Cement Plants

    Location: Lima

    Clinker Capacity: 4.8 million MT

    Cement Capacity: 5.5 million MT

    Clinker Production(2014): 4.3million MT

    Cement Production(2014): 3.8 million MT

    Limestone Reserves: 36 years

    Atocongo

    Location: Junn

    Clinker Capacity: 1.9 million MT

    Cement Capacity: 2.1 million MT

    Clinker Production(2014): 1.6 million MT

    Cement Production(2014): 1.9 million MT

    Limestone Reserves: 158 years

    Condorcocha

    Commercialization

    Hardware store with over 287 points of sale

    Progre-Sol

    Hatun-Sol

    Financing and Advising

    Product financing and advising families on building techniques

    Durava

    Solutions for road paving

    Supplies more than 7,200 independent hardware stores in the country

    Advices and provides financing to families and independent builders to finance cement and other construction products

    New service that offers efficient road paving techniques

    Distribution and Services Financial Snapshot 2014 (USD MM)

    Total Assets 2,799

    Revenue 630

    EBITDA 258

    EBITDA Margin 41%

    Local Ratings APOYO: AA

    Class: AAA

    Source: Company filings.

    8

  • 2. UNACEM Peru

    Location: Pacasmayo - La Libertad

    Market Share: 19% | Cement Cap: 2.9 million MT

    Clinker Capacity: 1.3 million MT Location:

    Lima Atocongo Plant

    Junn Condorcocha Plant

    Market Share: 50%

    Cement Capacity: 7.6 million MT

    Clinker Capacity: 6.7 million MT

    Location: Rioja San Martn

    Market Share: 2% | Cement Capacity: 0.3 MT

    Clinker Capacity: 0.2 MT

    Location: Yura Arequipa

    Market Share: 15% | Cement Cap.: 3.0 million MT

    Clinker Capacity: 2.0 million MT

    Location: Juliaca Puno

    Market Share: 5% | Cement Cap.: 0.3 million MT

    Clinker Capacity: 0.3 million MT

    *Others: 4%

    Group: Gloria

    Group: Hochschild

    Group: Rizo-Patrn

    Location : Lima

    Market Share: 5%

    Imports: 0.5 million MT

    Peruvian cement market

    Source: Asocem, INEI, SUNAT

    9

  • 2.UNACEM Peru

    Separated Unaudited Financial performance

    Revenues (USD Millions, 2014 accumulated)

    EBITDA and EBITDA Margin (USD Millions and %)

    Net income (USD Millions)

    Net debt (USD Millions)

    541

    617 638

    143

    293

    457

    630

    2011 2012 2013 1Q14 2Q14 3Q14 4Q14

    201 215

    241

    258

    37.1%

    34.9%

    37.8% 41.0%

    31.0%

    32.0%

    33.0%

    34.0%

    35.0%

    36.0%

    37.0%

    38.0%

    39.0%

    40.0%

    41.0%

    42.0%

    -

    50

    100

    150

    200

    250

    300

    2011 2012 2013 2014

    EBTIDA EBTIDA Margin

    110

    129

    73

    97

    2011 2012 2013 2014

    609 668

    760

    1,276

    2011 2012 2013 2014

    Source: Company filings. Exchange rate from PEN to USD: 2011-2013: 2.796 PEN/USD and 2014:2.989 PEN/USD

    10

  • 3. Unicon & Firth

  • 3. Unicon & Firth

    UNICON and Firth have 56.0% of market share (70% in the relevant area) in the concrete segment (2014)

    UNACEMs concrete segment consists of two companies Unin de Concreteras S.A. (UNICON) and Firth Industries S.A. (Firth), forming the largest concrete group in Peru

    UNICON was founded in May 1996

    In 2011, UNICON acquired 100% of Firth shares

    UNICON & Firth provided a variety of services such as: ready-

    mixed concrete, concrete for mining, concrete for paving,

    pumping services, girders and concrete sleepers and aggregates

    Concrete Segment Overview Market Positioning

    Financial Snapshot 2014 (USD MM)

    Total Assets 300

    Revenue 351

    EBITDA 50

    EBITDA Margin 14%

    Installed Capacity 9.2 (million m3 per year)

    Concrete Plants 58

    Facilities in Lima 13

    Facilities in the rest of Peru 22

    Mixer Trucks 519

    Assets and Capacity

    12

    Commercial strategy

    Specialized in megaprojects and large constructions

    Commercial strategy

    Specialized in small to medium projects and constructions

    Source: Unicon.

    http://www.unicon.com.pe/
  • 3. Unicon & Firth

    Financial performance

    Revenues (USD Millions)

    EBITDA and EBITDA Margin (USD Millions and %)

    Net income (USD Millions)

    Net debt (USD Millions)

    Source: Unicon.

    247

    312

    352 351

    2011 2012 2013 2014

    38

    47

    48 50

    15.3%

    15.1%

    13.6% 14.3%

    12.5%

    13.0%

    13.5%

    14.0%

    14.5%

    15.0%

    15.5%

    -

    10

    20

    30

    40

    50

    60

    2011 2012 2013 2014

    EBTIDA EBTIDA Margin

    16

    21

    17

    29

    2011 2012 2013 2014

    197

    108

    128

    157

    2011 2012 2013 2014

    Exchange rate from PEN to USD: 2011-2013: 2.796 PEN/USD and 2014:2.989 PEN/USD 13

  • 4. Celepsa

  • 4. Celepsa

    Company description Hydroelectric Power Plant

    Financial Snapshot 2014 (USD MM)

    Total Assets 378

    Revenue 91

    EBITDA 36

    EBITDA Margin 39%

    Company structure

    15

    The companys main customer is UNACEM (29% of total sales), though it has a portfolio of 13 additional customers

    The companys asset is the hydroelectric plant El Platanal which generates 220 MW

    CELEPSAs strategy is to develop a balanced, efficient and competitive portfolio of electricity generation

    100% of the production is sold through PPAs

    In November 2014, Celepsa acquired Hidro Elctrica Maraon S.R.L., a 20 MW with a 88 MW PPA. The hydroelectric power plant will start operations in 2017

    Location: Lima

    Generation Capacity: 220 MW

    Availability Index (Unit 1): 99.68%

    Availability Index (Unit 2): 99.94%

    El Platanal

    Source: Celepsa.

    Hidro Elctrica

    Maraon SRL

    90% 10%

    99% 99% 50%

  • 4. Celepsa

    Financial performance

    Revenues (USD Millions )

    EBITDA and EBITDA Margin (USD Millions and %)

    Net income (UDS Millions)

    Net debt (USD Millions)

    16 Source: Celepsa.

    68

    78

    98 91

    2011 2012 2013 2014

    47

    40 40 36

    69.2% 51.5%

    40.7% 39.4%

    0.0%

    10.0%

    20.0%

    30.0%

    40.0%

    50.0%

    60.0%

    70.0%

    80.0%

    0

    5

    10

    15

    20

    25

    30

    35

    40

    45

    50

    2011 2012 2013 2014

    EBTIDA EBTIDA Margin

    16

    13

    1

    6

    2011 2012 2013 2014

    170

    130 117

    106

    2011 2012 2013 2014

    Exchange rate from PEN to USD: 2011-2013: 2.796 PEN/USD and 2014:2.989 PEN/USD

  • 5. Skanon / Drake

  • 5. Skanon / Drake

    Drake UNACEMs start up subsidiary located in Arizona, USA, with state-of-the-art facilities

    There are six main competitors in the market where Drake holds the 2nd and 3rd largest market share in concrete and cement respectively

    UNACEM took advantage of the low prices during the crisis to build Drake Cement

    Drake has a strong growth potential as the United States recovers from the crisis

    The companys mission is to be recognized as the leading and most respected provider of construction materials

    Products and Brands

    Business Strategic Plan

    Company Description

    Financial Overview 2014 (USD MM)

    Total Assets 489

    Revenue 83

    EBITDA -8

    EBITDA Margin -9%

    Vision

    Vertical Integration

    Strategic Alliances &

    Partnerships

    Core Values

    Various concrete products depending on specifications

    Grout Slurry Shotcrete

    ABC (Aggregate Base Course) Crushed rock Concrete and mortar sand Recycled concrete and asphalt

    ASTM C 150 Type II/V (LA) Clinker Type II/V Off-spec cement

    18 Source: Skanon.

  • 5. Skanon / Drake

    Financial performance

    Revenues (USD Millions )

    EBITDA and EBITDA Margin (USD Millions and %)

    Net income (UDS Millions)

    Net debt (USD Milliona)

    Source: Skanon.

    37

    51

    69

    83

    2011 2012 2013 2014-12

    -5

    -7 -8

    -31.8%

    -9.7% -10.5% -9.3%

    -35.0%

    -30.0%

    -25.0%

    -20.0%

    -15.0%

    -10.0%

    -5.0%

    0.0 %

    -14

    -12

    -10

    -8

    -6

    -4

    -2

    02011 2012 2013 2014

    EBTIDA EBTIDA Margin

    -13

    -23 -23

    -25

    2011 2012 2013 2014

    105

    113

    119

    113

    2011 2012 2013 201419

  • 6. UNACEM Ecuador

  • 6. UNACEM Ecuador

    Operations

    Ownership structure

    Company Description

    Financial Overview 2014 (USD MM)

    21

    UNACEM Ecuador was acquired during 2014, consolidating and closing

    the transaction by mid November 2014 with all regulatory permits

    The company has the widest product portfolio in the market, tailored

    for the construction sector

    UNACEM Ecuador is a fully integrated company with high performance

    assets

    UNACEM Ecuador has a prime logistical operation with 100% bags

    delivered door to door

    Excellence in stakeholder relationship

    The plant is currently operating at 100% capacity

    2 Lines: 1 Kiln SPH and 1 Kiln AS precalciner

    Location: Imbabura (100km North of Quito)

    Clinker Capacity: 1.0 million MT

    Cement Capacity: 1.5 million MT

    Production (2014): 1.5 million MT

    Otavalo

    Total Assets 226

    Revenue 187

    EBITDA 80

    EBITDA Margin 43%

    Inversiones

    Imbabura S.A.

    Cantyvol S.A. Lafarge Servicios

    Generales S.A.

    100%

    98.57%

    99.99% 99.99%

    Source: UNACEM Ecuador.

  • 6. UNACEM Ecuador S.A.

    Financial performance

    Revenues (USD Millions )

    EBITDA and EBITDA Margin (USD Millions and %)

    Net income (USD Millions)

    Net debt (USD Millions)

    Source: UNACEM Ecuador.

    161

    166

    186 187

    2011 2012 2013 2014

    58

    66

    78 80

    32. 0%

    34. 0%

    36. 0%

    38. 0%

    40. 0%

    42. 0%

    44. 0%

    0

    10

    20

    30

    40

    50

    60

    70

    80

    90

    2011 2012 2013 2014

    EBTIDA EBTIDA Margin

    36 37

    45 43

    2011 2012 2013 2014

    39

    44

    29

    25

    2011 2012 2013 201422

  • 7. Preansa

  • 7. PREANSA Peru & Chile

    Production Capacity

    Ownership structure

    Company Description

    Financial Overview 2014 (USD MM)

    24

    Peru

    Total Assets

    16

    Revenue 8

    EBITDA 2

    EBITDA Margin

    30%

    Prefabricados Andinos Per S.A.C. (PREANSA Per) is a subsidiary of UNACEM which mainly produces prestressed industrialized concrete structures

    The business has a strong growth potential and already has tripled sales in the past 3 years

    PREANSA Peru was founded in 2007 with UNACEM holding 50% of ownership

    In January 2014, UNACEM acquired 51% of ownership of Preansa Chile. An it is starting to develop a plant in Colombia that will start operations in 1Q15.

    PREANSA has presence in Peru, Chile and, soon, Colombia

    Peru

    Pillars 90 m/day

    Industrial Belts

    400 m/day

    Prestressed light beams

    100 m/day

    Prestressed heavy beams

    220 m/day

    Mezzanine Elements

    140 m/day

    Chile

    Pillars 60 m/day

    Industrial Belts 300 m/day

    Prestressed light beams

    120 m/day

    Prestressed heavy beams

    60 m/day

    Mezzanine Elements

    300 m/day

    Wall panel 80 m/day

    Prefabricados Andinos Per S.A.C.

    Prefabricados Andinos S.A. (Chile)

    Prefabricados Andinos Colombia

    S.A.S.

    51.0%

    100%

    50.0%

    Source: Preansa.

    Chile

    Total Assets

    29

    Revenue 20

    EBITDA 3

    EBITDA Margin

    14%

  • 7. PREANSA

    Financial performance

    Revenues (USD Thousands )

    EBITDA (USD Thousands )

    Net income (USD Thousands )

    Net debt (USD Thousands )

    Source: Preansa. Exchange rate from PEN to USD: 2011-2013: 2.796 PEN/USD and 2014:2.989 PEN/USD

    25

    5,366

    7,899

    10,049

    8,236

    20,430

    2011 2012 2013 2014

    Peru Chile

    1,649

    2,486

    3,606

    2,429

    2,852

    2011 2012 2013 2014

    Peru Chile

    418

    1,350

    1,710

    827 827

    2011 2012 2013 2014

    Peru Chile

    3,337 3,094

    1,952

    1,564

    2,928

    2011 2012 2013 2014

    Peru Chile

  • 8. Consolidated Financial Highlights

  • 8. Consolidated Financial Highlights

    Consolidated debt

    Debt amortization profile (USD Millions)

    Currency debt profile (USD Millions )

    USD, 1,330

    PEN, 290

    Short term 15%

    Long term 85%

    Debt profile (As of 4Q14)

    27

    2015 2016 2017 2018 2019 From 2020

    UNACEM separeted Celepsa Unicon Skanon Preansa UNACEM Ecuador

    222 234

    135

    46

    748

    235

  • Unin Andina de Cementos S.A.A -UNACEM S.A.A.

    J.P. Morgan 6th Annual Global Emerging Markets Corporate Conference

    February 23rd, 2015 Atocongo Plant, Lima

  • Appendix

  • 1.Overview

    History

    UNACEM has almost 60 years of successful operations in the Peruvian market

    Cementos Lima S.A. is founded

    (predecessor of UNACEM)

    Military government confiscates Cemento

    Andino and Cementos Lima

    Cementos Lima is privatized for a

    second time, allowing the Rizo-

    Patrn group to gain control of the

    company

    Cemento Andino starts the

    construction of the Condorcocha plant

    Constitution of Compaa Peruana

    de Cemento Portland

    UNICON is created from the merger of

    COPRESA and HORMEC

    Cementos Lima triples its cement

    production capacity (from 1.5 million MT

    to 4.5 million MT)

    1974 1994 1996 1999 1967 1916 1956

  • 1.Overview

    History (cont.)

    developing new business segments and entering new markets in the region

    Drake Cement begins operations in

    the US. UNICON acquires

    Firth

    2011 2012 2013 2014

    UNACEM is founded as a result of a

    merger between Cementos Lima and

    Cemento Andino. Condorcocha kiln IV

    expansion is concluded

    UNACEM acquires Lafarge in Ecuador and is now present

    in 5 countries: Peru, Ecuador, U.S., Chile

    and Colombia

    Expansion of kiln 1 from 4.5 million MT to 5.5 million MT in the Atocongo plant

    is concluded

    Cemento Andino is privatized and the Rizo-Patrn group recovers control of

    the company

    2007 2008 2010

    Atocongo Plant Conchan Pier underground

    conveyor belt is completed

    Compaa Elctrica el Platanal S.A.

    (CELEPSA) hydro power plant begins

    its operations

  • South America

    North America

    Arizona - USA

    Ecuador

    Peru

    UNACEM holds 94.6% of Drake Cement through wholly owned subsidiary Skanon Investments

    In January 2014, the board of directors approved the acquisition of 51% of Prefabricados Andinos S.A. (Preansa) in Chile for US$ 7.1 MM

    In 2013, UNACEM constituted a Preansa subsidiary in Colombia which is expected to start operations in 4Q15

    In November 2014, UNACEM acquired 98.57% of Lafarge Cementos S.A today UNACEM Ecuador S.A.

    UNACEM has several subsidiaries in Peru, country where it leads the cement industry with 50% market share

    Concrete market share: 60%

    Colombia

    Chile

    Skanon

    http://www.celepsa.com/http://www.unicon.com.pe/