unacem: j.p. morgan 6th annual global emerging markets corporate conference (pdf)
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Exposiciones a analistas e inversionistas en el J.P. Morgan 6th Annual Global Emerging Markets Corporate Conference.TRANSCRIPT
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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
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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
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1. Overview
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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/
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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
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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
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2. UNACEM Peru
Condorcocha Plant, Tarma (3,950 m.a.s.l)
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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
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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
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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
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3. Unicon & Firth
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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/
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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
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4. Celepsa
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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%
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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
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5. Skanon / Drake
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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.
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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
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6. UNACEM Ecuador
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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.
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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
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7. Preansa
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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%
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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
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8. Consolidated Financial Highlights
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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
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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
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Appendix
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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
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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
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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/
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2. UNACEM Peru
Vertical integration
Compaa Elctrica el Platanal (CELEPSA) operates a 220MW hydroelectric power plant (UNACEM owns 90% of CELEPSA)
Progre-Sol is the largest hardware store in Peru (exclusive for UNACEM) with 287 points of sale
Additionally, Progre-Sol supplies 7,200+ independent hardware stores
Energy Supply Raw Material Supply
UNACEM has enough limestone reserves to supply its own demand for the next 158 years in Condorocha and 36 years in Atocongo
Atocongos plant reserves are located beside the facilities which considerably reduces transportation costs
Atocongo and Condorcocha Plants
Distribution Network
Generacin Elctrica Atocongo (GEA) operates Atocongos thermo plant (41.8 MW) supplying electricity during peak hours
Carpapata I and Carpapata II are 2 hydroelectric power plants located in Junin that provide part of the power to Condorcocha plant
GEA
Carpapata
I and
Carpapata
II
UNACEM exports a portion of its production and imports raw materials through the Conchan Pier
The conveyor belt allows materials to get transported from the plant to the Pier and vice versa
Conveyor Belt + Conchan Pier
33
http://www.celepsa.com/
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Lnea 2 del Metro
Carretera Ambo Oyon
Eje Vial Javier Prado La Molina Faucett
Conexin La Molina Angamos - Lima
Tunel de Gambetta
Parques de Comas
Centro Comercial Sur
Prolongacin Va Expresa
Eje Vial Javier Prado La Marina Faucett
Edificios de Viviendas Villanova
More than 4 million M3 of concrete required
73,000 2 years
90,000 1 year
200,000 8 months
220,000 1 year
250,000 2 years
300,000 4 years
480,000 18 months
67,227 7 years
73,000 2 years
34
Volumes of concrete for Lima 2,300,000 5 years
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Ready-Mixed Concrete Concrete for Mining Concrete for Paving
Pumping Service Girders and Concrete Sleepers Aggregates
Concrete ready-mix, shotcrete services
Concrete production: 7,200 m3 per month
Shotcrete releases: 5,800 m3 per month
519 mixer trucks
3,210 million m3 dispatched annually
US$ 294.1 MM sold in 2013
Specialized in the construction of urban pavements and roads
3 pavers with a capacity of 180 linear meters per hour
From 2 to 7.4 MT width, and thickness from 15 to 40 cm
Capacity of concrete sleepers: 180,000 units
400,000+ units produced to date
100% market share
149 concrete pumps Annual pumping 2013: 1.8 million
m3 US$ 23.5 MM in 2013
Production of fine and coarse aggregates in own quarries
Owns 5 different quarries and 2 are a in development process
Capacity: 8.4 million MT
1 2 3
6 5 4
35
Full range of products and services
3. Unicon & Firth