Unión 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
UNACEM at a glance
Concrete Cement Energy
Nuevas Inversiones S.A.
Sindicato de Inversiones y Administración 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
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, Proinversión, APOYO Consultoría
6
N° Project Company Location Investment
(USD Millions) Construction start
1 Metro de Lima - Línea 2 Consorcio Nuevo Metro de Lima Centro 5,658 2015
2 Vía Expresa Javier Prado Graña y Montero Lima 900 Indefinido
3 Amp. Jorge Chávez Lima Airport Partners Lima 800 2015
4 Vía Parque Rímac 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 Concesión Vial del Sur Sur 200 2015
14 Vía Expresa Sur Graña y Montero Lima 200 2016
15 Amp. Red Vial 6 Coviperu Lima, Ica 200 Indefinido
16 Terminal Portuario General San Martín 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 Perú (Deviandes)
Lima, Junín, Pasco 126 2013
19 Modernización del Aeropuerto de Pisco Aeropuertos del Perú Ica 107 2013
20 Amp. Red Vial 5 Norvial Lima 100 2014
Total investment 12,432
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 UNACEM’s 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: Junín
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
Duravía
• 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
Junín – Condorcocha Plant
Market Share: 50%
Cement Capacity: 7.6 million MT
Clinker Capacity: 6.7 million MT
Location: Rioja – San Martín
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-Patrón
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
• UNICON and Firth have 56.0% of market share (70% in the relevant area) in the concrete segment (2014)
• UNACEM’s concrete segment consists of two companies Unión 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.
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
Company description Hydroelectric Power Plant
Financial Snapshot – 2014 (USD MM)
Total Assets 378
Revenue 91
EBITDA 36
EBITDA Margin 39%
Company structure
15
• The company’s main customer is UNACEM (29% of total sales), though it has a portfolio of 13 additional customers
• The company’s asset is the hydroelectric plant “El Platanal” which generates 220 MW
• CELEPSA’s 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 Eléctrica Marañon 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 Eléctrica
Marañon 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
• Drake UNACEM’s 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 company’s 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
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 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 Perú S.A.C. (PREANSA Perú) 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 Perú 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
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
Unión 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
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-
Patrón group to gain control of the
company
Cemento Andino starts the
construction of the Condorcocha plant
Constitution of Compañía 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-Patrón group recovers control of
the company
2007 2008 2010
Atocongo Plant –Conchan Pier underground
conveyor belt is completed
Compañía Eléctrica 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
Top Related