Compaa Sud Americana de Vapores S.A. June, 2010 Agenda CSAV Group - - PowerPoint PPT Presentation

Compañía Sud Americana de Vapores S.A.

June, 2010

Agenda

• CSAV Group

• Containerized Cargo Transportation Industry
• CSAV Figures
• Successfully Weathering The Storm. Positive Trends.
• Warnings and Risks

CSAV Group

Since 1872

Founded in Chile in 1872, Compañía Sud Americana de Vapores is the largest shipping company in America and one of the oldest ones in the world.

Traded in the Santiago Stock Exchange since its origins in 1893.

in the world.

CSAV is the largest Shipping Company in America

Ranking Operator Country Capacity (Teus)

8 CSAV Group Chile 477,519

28 CCNI Chile 42,192 31 Maruba + CLAN Argentina 39,231 34 Horizon Lines USA 34,150 35 Seaboard Marine USA 33,841 39 Matson USA 29,074

48 Crowley Liner Services USA 19,624 57 Westwood USA 15,906 58 Dole Ocean Liner USA 15,492 67 Log-In Logistica Brasil 12,038 71 Great White Fleet USA 9,865 77 Tropical Shg USA 7,783 83 Melfi C.L. Cuba 7,184 84 SeaFreight Cayman 7,113 89 King Ocean USA 6,506 95 Independent Container Line USA 5,910 Source: Alphaliner, May-10

Business Units

Reefer Cargo Vehicles Solid and Liquid Bulks Transportation of:

Shipping Business

Containerized Cargo

SAAM

Terminal Operations Others: Container deposit, loading and unloading services, port, agency, logistics, airport and aquaculture. Tugboats

Container Transportation Services: a Global Company

North – South Services (South America to/from North America, Europe and Asia), directly operated by CSAV and its subsidiaries Libra Brazil and Libra Uruguay. East – West Services operated by Norasia Container Lines Ltd. subsidiary.

34 transport services in containers,

• perated by 127 containerships.

Container Transportation Services

West Coast South America East Coast South America SERVICE ROUTE SERVICE ROUTE

Americas USEC - WCSA Asax ECSA - S. Africa - Asia Andex Sling 1 Asia - Mex - WCSA Euroatlan Sling 1 N Eur - ECSA Andex Sling 2 Asia - Mex - Central America - WCSA Euroatlan Sling 2 N Eur - ECSA Andex Feeder WCNA - Mex - Caribbean US Gulf US Gulf - ECSA AMEX Asia - Caribbean - USEC Sirius Medit - ECSA JCS Asia - Mex - Caribbean Marco Polo ECSA - S. Africa - M. East - India Euroandes Neur - Caribbean - WCSA Tango Sling 1 USEC - ECSA ECS Neur - Caribbean Tango Sling 2 USEC - ECSA Mediterranean Medit - WCSA Conosur ECSA - WCSA Med-Mex Medit - Mex - US Gulf Patagonia ECSA

Med-Mex Medit - Mex - US Gulf Patagonia ECSA Gulf Bridge US Gulf - Caribbean Conosur ECSA - WCSA

East - West

Andino Chile

SERVICE ROUTE

Maya Caribbean ABS Black Sea - Asia Orinoco Caribbean Super Galex Persian Gulf - Asia Cuba Caribbean INDUS India - Asia IMEX

• N. Eur - Persian Gulf-India

Mare Nostrum Medit-Asia FEM Medit-Asia Black Sea Link Black Sea Intragulf Persian Gulf Adriatic Adriatic Sea

SHIN NANSEIKAI SHIN NANSEIKAI CARPAC NASA GRAN AMERICA EAST COAST LOOP A ASAF EAST COAST LOOP B

GRAN MIDDLE EAST

GRAN MEDITERRANEAN

Vehicle Transportation Services

EUMEXSA EAST COAST LOOP A AUSTRAL EAST COAST LOOP B

CSAV, in consortium with other leading shipping companies, operates a specialized fleet in vehicle transportation (Car Carriers), linking South America with Asia, Europe, USA and Mexico; both South American coasts; USA with the Mediterranean east coast; and Asia with the Persian Gulf and South Africa. 10 specialized services in vehicle transportation,

• perated by 10 “Car Carrier” ships.

CSAV operates specialized services

in reefer cargo transportation,

serving the fruit export market,

Reefer Cargo Transportation Services

• Round Voyage

• Round Voyage

• Pág. 10

export market, mainly from the West Coast of South America to USA, North Europe and Russia.

!

• "

• $

Liquid and Solid Bulk Transportation Services

Dry Bulk Dry Bulk DBCN Bulk**

CSAV by means of its solid and liquid bulk transportation services carries: Copper and Zinc concentrates, Iron Ore, Metallurgical and Thermal Coal, Fertilizers and Grains. Liquid Bulk includes Sulphuric Acid, Caustic Soda, Methanol as well as Vegetable and Fish oil.

Liquid Bulk

**DBCN on spot basis

2 specialized services in the bulk cargo transportation services , operated by 4 “bulk carriers” and one “chemical carrier”.

U.S.A. Mexico Guatemala Costa Rica

62 Ports in 11 Countries SAAM in America

Terminal operations, tugboats, container deposits, load/unload services, port, agency, logistics, airport and aquaculture.

Colombia Ecuador Peru Chile Argentina Uruguay Brazil

SAAM: Concessions in Chilean Ports

Arica

Terminal Puerto Arica S.A.

Iquique

Iquique Terminal Internacional S.A.

Antofagasta

Antofagasta Terminal Internacional S.A.

Port Operations in 6 Chilean ports

San Antonio

San Vicente

San Vicente Terminal Internacional S.A. San Antonio

Corral

Portuaria Corral S.A.

San Antonio

San Antonio Terminal Internacional S.A.

SAAM: Port Concessions in America

Port Everglades, USA Florida International Terminal Guayaquil Terminal Portuario Guayaquil

Terminal Portuario Guayaquil

Mexico: 24 Guatemala: 1 Costa Rica: 3 Colombia: 1 Ecuador: 8

SAAM Tugboat Fleet

Ecuador: 8 Peru: 19 Chile: 24 Uruguay: 8 Brazil: 21

Total: 109 Tugboats

CSAV Group Property Structure

The largest shareholder is the Claro Group, which holds 38,02% of the company’s property. The Claro Group is an important Chilean industrial conglomerate involved in the industrial, shipping, port, wine and communication industries.

Stockbrokers 13.30% Banks by Account

• f Third Parties

2.22% Others

CSAV's Property Structure

(May 5, 2010)

Claro Group 38.02% Mutual and Investment Funds 3.15% Pension Funds 10.57% 13.30% 2.22% Others 13.90% Stock Exchanges 1.31% Ship Owners 17.53%

The Containerized Cargo Transportation Industry

The Largest 30 Container Shipping Companies

Ranking according to Capacity (Teus)

Nº 8

2,059,135 1,646,213 1,101,793 595,650 557,456 543,743 496,156 477,519 448,051 440,236 364,941 364,484 351,726

APM-Maersk 1 Mediterranean Shg Co 2 CMA CGM Group 3 APL 4 Evergreen Line 5 Hapag-Lloyd 6 COSCO Container L. 7 CSAV Group 8 Hanjin Shipping 9 CSCL 10 NYK 11 MOL 12 OOCL 13

(14.6%) (11.7%) (7.8%) (4.2%) (4.0%) (3.9%) (3.5%) (3.4%) (3.2%) (3.1%) (2.6%) (2.6%) (2.5%)

%&'()*)

351,726 337,748 324,582 321,017 317,197 271,604 230,071 199,082 159,963 104,519 91,903 61,965 56,178 53,691 51,246 42,192 40,215 39,525

OOCL 13 Hamburg Süd Group 14 Zim 15 K Line 16 Yang Ming Marine … Hyundai M.M. 18 PIL (Pacific Int. Line) 19 UASC 20 Wan Hai Lines 21 HDS Lines 22 MISC Berhad 23 TS Lines 24 Sea Consortium 25 RCL (Regional Container … Grimaldi (Napoli) 27 CCNI 28 KMTC 29 STX-Pan Ocean 30

(2.5%) (2.4%) (2.3%) (2.2%) (1.9%) (1.6%) (1.4%) (2.3%) (1.1%) (0.7%) (0.7%) (0.4%) (0.4%) (0.4%) (0.4%) (0.3%) (0.3%) (0.3%)

Demand for Containerized Cargo Transportation vs. GDP

Between 1981 and 2009, the demand for containerized cargo transport grew on average more than 3.3 fold compared to the world’s GDP, while CSAV grew 10.9 fold in the same period.

50% 60% 70% 80%

% CSAV Growth vs Shipping Industry vs World's GDP

Sources: Clarkson Research Services, International Monetary Fund and CSAV Annual Reports.

• 20%
• 10%

0% 10% 20% 30% 40% 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

Growth %

Containerized Cargo Transportation Supply

Since 1996, the available nominal world capacity for transport in Container Vessels has grown at an average rate of 11,4%.

10% 12% 14% 16% 18%

% 1% % .6% 8% %

Container Capacity (% of Growth)

Average Growth per Year: 11,4%

For the next three years, a smaller growth in supply than the initially estimated increase is expected, due to the postponement and cancellation of existing shipbuilding orders, the absence of new orders, and an increase in scrappage.

Source: Clarkson Research Services, April 2010

0% 2% 4% 6% 8% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010e

13.2% 15.1 11.7% 5.1% 9.6% 12.3% 11.1% 8.9% 9.8% 13.2% 16.6 13.8 12.7% 6.2% 7.2%

11,4%

CSAV Figures

Results: 2003 – 2009

(Million of US$)

2003 2004 2005 2006 2007 2008 2009

US$ MM % Operating Revenues 2,136 2,686 3,902 3,859 4,151 4,887 3,028 (1,859)

• 38.0%

Operating Expenses (1,863) (2,290) (3,425) (3,795) (3,786) (4,689) (3,358) 1,331

• 28.4%

Operating Margin 273 395 477 65 365 198 (330) (528)

• S&A Expenses

(206) (255) (318) (297) (310) (332) (270) 62

• 18.7%

Operating Income 67 140 159 (232) 54 (134) (600) (466)

• Var. '09 - '08

Operating Income 67 140 159 (232) 54 (134) (600) (466)

• % of Op.Margin

3.1% 5.2% 4.1%

• 6.0%

1.3%

• 2.7%
• 19.8%
• 17.1%
• Non Operating Income

15 89 8 155 100 122 (107) (229)

• Income Before Tax

82 229 167 (77) 154 (12) (707) (695)

• Net Income

72 207 132 (58) 117 (39) (669) (630)

• EBITDA

158 313 234 2 216 55 (633) (688)

• EBITDA Margin

7.4% 11.7% 6.0% 0.1% 5.2% 1.1%

• 20.9%
• 22.0%
• EBITDA calculated as Net Income plus depreciation, amortization, income tax and net financial expenses.

Results: Q1 2009 - Q1 2010

(Million of US$)

Q1-2009* Q1-2010*

US$ MM % Operating Revenues 827 1,112 285 34.5% Operating Expenses (1,023) (1,097) (74) 7.2% Operating Margin (196) 15 211

• S&A Expenses

(68) (50) 17

• 25.5%
• Var. Q1 '10 / Q1 '09

Operating Income (264) (35) 229

• % of Op.Margin
• 31.9%
• 3.2%

28.7%

• Non Operating Income

(7) (0) 6

• Income Before Tax

(270) (35) 235

• Net Income

(263) (38) 224

• EBITDA

(239) (16) 222

• EBITDA Margin
• 28.9%
• 1.5%

27.4%

• EBITDA calculated as Net Income plus depreciation, amortization, income tax and net financial expenses.

*Under IFRS Accounting Standard

Operating Results per Business: Q1 2009 – Q1 2010

Shipping Business Q1-2009* Q1-2010* (Million US$) US$ MM % Operating Revenues 754 1,037 283 37.5% Operating Expenses (973) (1,042) (69) 7.1% Operating Margin (219) (5) 213 S&A Expenses (60) (42) 18

• 30.4%

Operating Income (278) (47) 232 Net Inc Inv. Rel. Comp. 3 3 (0)

• 5.8%

Operating Income + Net Inc. (275) (44) 231

• Var. Q1 '10 / Q1 '09

• Inv. Rel. Comp.

(275) (44) 231 SAAM Q1-2009* Q1-2010* (Million US$) US$ MM % Operating Revenues 83 85 1 1.6% Operating Expenses (61) (64) (3) 5.7% Operating Margin 23 21 (2) S&A Expenses (8) (9) (1) 10.1% Operating Income 15 12 (3) Net Inc Inv. Rel. Comp. 5 3 (2)

• 32.9%

Operating Income + Net Inc.

• Inv. Rel. Comp.

20 15 (5) *Under IFRS Accounting Standard

• Var. Q1 '10 / Q1 '09

Operated Fleet by CSAV (up to May, 2010)

Container Vessels 127 Bulk Carriers

5

Reefer Carriers

1

Chemical Carriers

10

Car Carriers

(8 owned, 1 by joint venture) (1 owned)

5

(1 by joint venture)

Chartered Ships

137 148

Total Ships

On board TEUS (capacity)

477,519

Tug Boats

109

Container Vessels under construction

Container fleet

539,672

Reefer

34,305

Dry (Teus)

5x 8,000 Teu (Q2 2011 - Q1 2012) 2x 6,600 Teu (Q3 2010 - Q2 2011)

(80 owned 29 by JV)

Owned Ships 11

(9 owned 100%, 2 by JV)

Successfully Weathering the Storm. Positive Trends.

2009: The Worst Crisis in History. Successfully Weathering the Storm

• Industry volumes decreased 9% in 2009, in an industry that has a

historical average growth of 8,5% and never had a negative growth.

• Container Shipping Lines recorded operating losses of US$15 Bn.
• Even though CSAV reduced expenses in US$ 1.393 MM (Op. Ex. 1.331

+ S&A 62 / 27.7%), this was not enough to compensate the record

+ S&A 62 / 27.7%), this was not enough to compensate the record decrease in operating revenues of US$ 1.859 MM (38%), which affected the entire industry.

• In order to overcome the crisis, where CSAV lost US$ 669 MM, a

Financial Strengthening Plan was designed to raise US$ 710 MM through capital increases. This plan was concluded successfully, reaching US$ 773 MM, exceeding the original goal and building a solid financial base to face the future.

2009: The Worst Crisis in History. Successfully Weathering the Storm (cont.)

• CSAV took advantage of opportunities and grew during the crisis,

building the foundations for development in the long term.

– On Board Capacity: Jun -10 / Jan-09: +65.5%

– During the second quarter of 2010 we expect a positive net income, returning to profitability.

An Appealing Industry in the Long Term

• 90% of world’s trade is conducted through maritime routes.

(Source: International Maritime Organization, February 2009)

• Globalization: an irreversible process which has not finished yet.
• Large growth ratios: during the last 29 years the containerized cargo

has grown at a yearly rate of 8,5%.

has grown at a yearly rate of 8,5%.

(Source: Clarkson Research Services)

• Increasing consolidation: 20 years ago the Top 20 companies had a

market share of 73%. Nowadays this figure has risen to 81%.

(Source: Alphaliner)

Idle Capacity Evolution

900 1,200 1,500 1,800 6% 8% 10% 12%

Teus (Tho tal Fleet (%)

Idle Capacity

Source: Alphaliner

300 600 900 0% 2% 4% 6%

housand) Over Total Teus Over Total Fleet

Orderbook Evolution

50% 55% 60% 65%

Orderbook / World Capacity

Source: Clarkson

30% 35% 40% 45%

Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10

Company in a Privileged Position

• Market leader in Latin America
• Leadership in emerging economies
• Critical mass / efficient minimal scale
• We have conquered the distribution channel
• An investment platform

• An investment platform
• Ship-Owning Business: a world to be explored
• SAAM: a great company with an enormous potential

Leadership in Latin America and Emerging Economies

• In the container transportation market in Latin America, CSAV holds a

share between 14% and 16%, positioning itself among the three leading operators.

• CSAV has a strong presence in emerging economies such as Brazil,

• CSAV has a strong presence in emerging economies such as Brazil,

China, India, Middle East and Turkey.

• In the Asia-Black Sea, India-North Europe, Asia-Middle East and Asia-

India routes, CSAV is among the five leading operators.

• Critical mass / efficient minimal scale

Asia North America Northern Europe Mediterranean

A New Business Model: We have conquered the Distribution Channel

Currently we control directly more than 80% of our sales.

South American West Coast South American East Coast & Africa

Operations in 205 cities through 105 Agencies

Regional offices in 7 key cities: Valparaíso New Jersey Hamburg Barcelona Sao Paulo Hong Kong Shanghai

An Investment Platform

• Geographical diversity
• Business diversity and Investment projects:
• logistics
• ships
• ports

• ports
• containers, etc.

Ship-owning Business: A World to be Explored

CSAV

9.0% Industry (excluding CSAV) Top 10 47.3% Top 50 48.9%

Owned vs Operated Capacity (in Teus)

Source: Alphaliner, May 2010

Top 50 48.9% Top 100 48.8%

SAAM: a Great Company with an Enormous Potential

SAAM has an enormous potential to develop investment opportunities and complementary businesses to CSAV.

50 60 70

SAAM Net Income: 2002 - 2010

10 20 30 40 50 2002 2003 2004 2005 2006 2007 2008 2009 Q1 2010 29.2 30.8 28.3 35.0 40.3 69.0 66.3 44.6 11.8

(US$ million)

Historical Liftings

8 338.5 1,607.1 2,075.5 2,212.6 2,129.0 2,191.4 4 2,920.0

2,000 2,500 3,000

housand)

CSAV Group Historical Liftings

0.9 0.9 0.9 0.9 0.9 0.9 1.8 1.8 2.7 2.7 3.6 4.5 7.2 10.7 13.8 18.8 23.4 31.3 35.9 43.5 46.5 62.9 85.0 102.8 143.9 238.7 315.5 403.0 451.8 594.4 941.2 1,045.4 1,086.8 1,33 1,790.4

500 1,000 1,500 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010e

Teus (Tho

Recent Record Liftings

180 200 220 240 260

(Thousand)

CSAV Group Container Liftings Evolution

120 140 160 180 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10

Teus (T

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2008 175 176 166 182 191 201 196 190 178 190 165 182 2009 137 125 141 130 127 142 155 159 152 167 164 191 2010 189 184 204 207 240

Positive Rate Trend (subject to uncertainties)

1,600 1,800 2,000 2,200

ht (US$)

CSAV Group Container Business Rate Index per Teu Evolution

Index calculated using the average income per Teu of container business in 2008 set to value of 2,000 points. 1,000 1,200 1,400 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10

Freight

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2008 1,982 2,011 2,044 1,978 1,911 1,946 1,987 1,975 2,070 2,103 2,050 1,963 2009 1,696 1,630 1,626 1,637 1,520 1,375 1,314 1,247 1,302 1,469 1,526 1,553 2010 1,551 1,610 1,742 1,662 1,817

Significant Share’s Liquidity

On average, every month around 34 million CSAV shares are traded, which represents 3.8% of the total shares of the company.

7% 8% 9% 10% 100 120 140 ares e (millions)

Monthly Traded Volume of CSAV Shares

Source: Bloomberg

0% 1% 2% 3% 4% 5% 6% 7% 20 40 60 80 100

Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10

% of Total Shar Monthly Traded Volume (

Monthly Traded Volume % of the Traded Total

Warnings and Risks

• The warnings and risks publicly disclosed in shareholders’ meetings

and previous financial statements are reiterated.

Important

The content of this presentation has been extracted from local and external sources, which even though are acknowledge as trustworthy and are identified along the presentation, they have not been independently verified by CSAV, whom therefore does not take the responsibility for it. This presentation contains estimates and forecasts which, for their nature and context, involve risks and uncertainties, because are based in supposed events, scenarios and financial and economical circumstances which may occur or not in the future. In this way, the current financial situation of CSAV, its operational results, cash flows and the industry and market development in which CSAV

• perates, may differ in the future in a way more less substantial from the estimates suggested in this
• presentation. Whom who receives this presentation acknowledge and accept that CSAV does not

acquire any commitment related to the accuracy, integrity and permanence of the contents of this presentation and does not assume any obligation to update or correct the information contained in it.

presentation and does not assume any obligation to update or correct the information contained in it. The purpose of this presentation is to deliver general nature precedents so that every investor, in an independent and individual way, assess the convenience of investing in CSAV shares. Therefore each investor, individually and with the consultancy of trusted professionals must independently adopt the decision to invest or not in CSAV shares, without considering this presentation. Considering the previous statement, CSAV will not be held liable for losses or damages derived from the use of information offered in this presentation, or the decisions based on that information.

Many Thanks