INVESTOR PRESENTATION December, 2019 CONTENTS 3 Empresas Copec at - - PowerPoint PPT Presentation
INVESTOR PRESENTATION December, 2019 CONTENTS 3 Empresas Copec at a glance 7 Strategic Focus 10 Competitive Advantages 16 Internationalization 20 Latest and Potential Expansions 30 Financial Strength 33 Commitment to ESG initiatives
December, 2019
Empresas Copec at a glance Strategic Focus Competitive Advantages Internationalization Latest and Potential Expansions Financial Strength Commitment to ESG initiatives 3Q19 Results
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7 10 16 20 30 33 35
Forestry 63,4% Fuels 29,3% Others 7,3%
Arauco 57,4% Fuels 42,2% Otros 0,4%
Industrial group focused in natural resources and energy
Source: Empresas Copec, Bloomberg, RISI. Figures LTM as of september 2019 *Market Cap as of December 5th 2019
FORESTRY EBITDA: US$ 1,240 million
producer of the world
FUELS EBITDA: US$ 911 million
Colombia
gas in Chile, Colombia, Peru and Ecuator
in Chile
FISHING, MINING & OTHERS EBITDA: US$ 8 million
companies in Chile and the world
Business Units
Market Cap* Sales
Highlights Consolidated EBITDA
Total of US$ 2,159 million
Consolidated Assets
Total of US$ 24.546 million
Risk Rating
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US$ 11,239 million US$ 24,133 million BBB (Stable) BBB (Negative) International Local AA- (Stable) AA (Stable)
Industrial group focused in natural resources and energy
39.83% 99.20% 40.80% 12.00% 39.83% 100.00% ANGELINI GROUP OTHERS PENSION FUNDS OTHERS FORESTRY FUELS FISHING OTHER INVESTMENTS 74.68% 25.32% 60.82% 7,82% 31,36% 99.98% 58.51% 51.00% 81.93% 83.50% 39.79% 100.00% 100.00% 100.00%
Figures as of September 2019
46.79% 46.79% 40.00% 100.00% 50.00%
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1934
Incorporation
1950- 1960
Expansion in fuels
1986
Entry of Angelini group
restructuring
Development Plan
1970-1980
Diversification
1986-2000
Investments and growth
2000-2005
Consolidation and strategic focus
non-core businesses
and fishing
2003
Corporate restructuring
Copec
2005-2010
A world scale player
the second largest market pulp producer in the world and the third main panel producer
2010-2018
Internationalization
business to Colombia
Uruguay starts operations(1)
business
process
Guacolda for US$ 364 million
Source: Empresas Copec (1) Arauco participates in a joint venture with Stora Enso (50% participation each) (2) Tafisa is the subsidiary of the Portuguese group Sonae Industria, dedicated to the panel business, which has plants in Spain, Portugal, Germany and South Africa (3) Abastible acquired Repsol’s LPG operations in Peru and Ecuador (4) Mina Justa is a copper mining Project, located in Ica, Peru. The remaining 60% stake is owned by Minsur, which is controlled by the Breca group
Duragas in Ecuador(3)
Mapco in the United States
and Mexico
and liquid fuels assets in Colombia, Ecuador and Peru
project in Peru(4)
83 years of history
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15.293 11.239 11.216 10.859 10.854 6.913 6.654 6.398 6.003 5.970
One of the most relevant companies in Chile
(1) Bloomberg, as of december 5th, 2019
Market capitalization of Chilean companies(1)
US$ million
Americas Chile
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2000 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Acquisitions/Investments
Planta Valdivia - Forestry Planta Nueva Aldea - Forestry Mina Invierno - Mining Stora Arapoti - Forestry TPI Quintero - Fuels Golden Omega - Fishing / Nutrition Tafisa Brasil - Forestry Terpel - Fuels Orizon - Fishing / Nutrition Montes del Plata - Forestry Inversiones del Nordeste - Fuels Moncure - Forestry Flakeboard - Forestry Selecta - Nutrition Tafisa - Forestry Mapco - Fuels Solgas - Fuels Duragas – Fuels Masisa Brazil – Forestry ExxonMobil Latam – Fuels Mina Justa - Mining Moncure
Tafisa Brazil Planta Valdivia Nueva Aldea
Total Assets 2000 US$ 7.1 Billion
Total Assets sep-19
US$ 24.5 Billion Divestments
AES Gener - Power Generation CGE - Power Generation CCU - Massive Consumption Saesa - Power Distribution Frontel - Power Distribution
Total Assets
Growth concentrated in core segments, while keeping other options for value creation
TPI Quintero Stora Arapoti Masisa Brazil Mina Justa Latam
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Abcdin - Commercial Retail Guacolda - Power Generation GNL Quintero – Infrastructure Selecta – Nutrition Puertos y Logística - Ports Forestry 68,0% Fuels 18,0% Others 14,0% Forestry 63,4% Fuels 29,3% Others 7,3%
Chile 51% Colombia 29% Other Countries 10% USA 10%
Copec - Gas Stations 25% Copec - Industrial 21% Terpel 45% Mapco 9% Pulp 48% Forestry 2% Panels & Wood Products 49% Others 1%
Arauco 57,4% Fuels 42,2% Otros 0,4% North America 25% Asia 40% Europe 8% Central & South America 23% Others 4%
Consolidated EBITDA(1) By Product (2) By Region (3) Consolidated Revenues(2) By Channel (1) By Country (1)
Total of US$ 5,671 million Total of US$ 17,287 million
Diversification within core businesses
(1) Figures as of September 2019 (L12M) (2) Figures as of June 2019 (L12M) (3) By country of destination. Includes sales of goods produced in each country plus exports to each country. Figures as of December 2018
Total of US$ 2,159 million Total of 22.8 million m3 Total of US$ 5,954 million
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8,3% 5,5% 1,6% 0,9% 5,0% 51,9% 21,2% 5,4%
7 9 11 12 38
Brazil Uruguay Portugal Chile Finland
16 45 75 Chile Canada Finland
BSKP 33% UKP 13% Fluff 9% EKP 45%
Low Cash Cost producer in both fibers
Source: Empresas Copec
Exposure by fiber Short harvesting cycle (years)
Softwood Hardwood Capacity 4.0 million Adt
* As of June 2019 Considering MAPA’s capacity, EKP would represent 63%
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As of August 2019
Other world East Europe Chile Sweden US Other Europe Finland Japan East Canada Coastal BC
Brazil Chile/Uruguay Indonesia Iberia Other Asia Sweden Canada East Europe Finland Bel/France China US Japan 200 250 300 350 400 450 500 550 600 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 US$/ADt Cash Cost FOB mill Annual capacity (000s ADt) BSKP BHKP
10,9
Pfleiderer Duratex Louisiana Pacific Swiss Krono Kastamonu Georgia Pacific Egger Norbord Arauco Kronospan
5,2
Georgia Pacific Stora Enso APRIL UPM Metsä APP CMPC International Paper Arauco Suzano
Efficient Logistics between forests → mills → ports
As of December 2018 Source: Hawkins Wright, Public Filings, and Arauco estimates
Maximizing the value of every tree Market pulp installed capacity
Million tons
World panel installed capacity
Million m3
3,95 + 1,27 (MAPA) 9,55 + 1,36 (Grayling and Mexico)
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(1) Considers only export sales volumes, as of December 2018 (2) Considers Arauco’s Line 3 new capacity and Line 1 shutdown
88%
Other 12%
84%
Other 16% Source: Empresas Copec
Strategic locations Strong brand recognition
Distinguished among the best companies in Corporate Reputation, Merco 2018 Generación Empresarial 2018 award, for its corporate governance practices Awarded the National Price Avonni 2018, for initiatives in sustainable natural gas production 1st place in “Service Stations” of the Loyalty Award 2018 by Effie. Distinguished by GfK Adimark in the ranking “Best place to innovate 2018” Included in Robecosam’s yearbook of good sustainability practices
Favorite Brand Usual Brand
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Large scale and coverage
* Copec Chile + Terpel + Mapco ** All distribution channels for Copec Chile, Terpel and Mapco LTM
Natural gas crisis % Market Share***
Gas Stations Convenience Stores Lubricants Industrial Channel Synergies among business lines
*** Market share as of July 2019
MARKET SHARE EVOLUTION COPEC LIQUID FUELS
57.7% 49.0%
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0,0 1,5 3,0 4,5 6,0 7,5 9,0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Logistic efficiency
Other players in Chile
Thousand m3 sold / gas station
29,5% 70,5% 38,6% 61,4% 38,4% 61,6% 45,0% 55,0%
Leadership in all businesses in which it participates
Fuels distribution in Chile Lubricants distribution in Chile Fuels distribution in Colombia LPG distribution in Chile LPG distribution in Colombia LPG distribution in Peru
As of September 2019
LPG distribution in Ecuador
43,8% 56,2%
33,0% 67,0%
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As of July 2019 As of September 2019 As of December 2018 As of September 2019 As of September 2019 As of September 2019
57,8% 42,2%
Replicating our know how within Latam
Selected oportunities in developed economies
¿Why Terpel?
Arauco acquires Flakeboard and Moncure Panel companies in North America:
Two strategic lines of growth outside Chile
+78%
Significant EBITDA growth 2010-2018: Peru Colombia Panamá Chile Dominican Republic Ecuador
Liquid Fuels Lubs LPG NGV Liquid Fuels Liquid Fuels Lubs Liquid Fuels Lubs LPG Pipelines Natural Gas Import Terminal Liquid Fuels Lubs LPG NGV Liquid Fuels Lubs LPG NGV
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Source: Empresas Copec United States Canada Production Platforms Holland Norway Peru Argentina Brasil South Africa Colombia Venezuela Australia Saudi Arabia China India Thailand Korea Japan Taiwan Philippines Malaysia Indonesia Chile Panama Ecuador Portugal Spain Germany Dominican Republic Uruguay Forestry Fuels Fishing and other investments Arauco Comercial Offices Arauco Agents
Productive assets in 15 countries, commercial presence in 23, and sales in more than 80
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Non Current Assets History - Local vs Foreign
Other Countries Chile
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21% 19% 29% 31% 32% 34% 34% 38% 39% 38% 37% 2009 '10 '11 '12 '13 '14 '15 '16 '17 '18 'sept19
Forestry 74% Fuels 18% Others 8%
ESTIMATED CAPEX 2019
Total of US$ 2,766 million
2.221 2.766 *
Mina Justa MAPA Valdivia Masisa Mexico
CAPEX History
* Investment plan for 2019
Figures in US$ million
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pulp, once the new line is operating. Thus the net increase in production will be 1.27 million tons.
will generate a surplus of approximately 132 MW.
MAPA Project - Pulp
3,3 0,7 3,9 1,3
Pulp capacity as of December 2013 Montes del Plata (Uruguay, 2014) Current Capacity MAPA project net addition (Chile) Potential Capacity
+31% +20%
5.2 Mt
*Figures in million tons
Current Capacity
peak is expected to in August 2020, providing jobs for 8,000 people.
Model of the project for 2021
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This kind of pulp is used in the textile industry to soften, shine and purify fibers. It can also be used in the food, cellophane and flexible packaging industries, among others.
currently produces 550 th. ton of pulp.
substitute for cotton.
paper grade.
pulp in Chile.
start up in early 2020.
Valdivia Project – Dissolving Pulp
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2,7 0,5 0,3 1,8 0,4 0,8 0,1 2,2* 0,7
9,5
0,6 0,8 10,9
Growth in the Panel Division
capacity of 800 th. m3 of PB.
a ramp-up phase.
Installed capacity growth of panels
million m3
* Corresponds to 50% of the production capacity of Sonae-Arauco (1)
Grayling Project, Michigan
14%
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Growth in the Panel Division
US$ 102.8 million.
US$ 160 million.
Arauco to consolidate as the second largest producer of composite panels in the world, reaching an annual production capacity of more than 10 million m³.
* Corresponds to 50% of the production capacity of Sonae-Arauco
2,7 0,5 0,3 1,8 0,4 0,8 0,1 2,2* 0,7
9,5
0,6 0,8 10,9
Installed capacity growth of panels
million m3
(1)
14%
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ExxonMobil in Colombia, Peru and Ecuador, for US$ 714.7 million, which included about US$ 230 million in cash.
to divide the lubricant from the fuels distribution business. While the
was prepaid with cash and the remaining amount was refinanced with bonds.
Colombia to Primax, for US$ 232 million, complying with the conditioning imposed by the Colombian antitrust authority.
ExxonMobil - Lubricants and liquid fuels
(*) Market shares are approximated (**) Of the aviation market in Peru
Lubricants Country
30%
Liquid Fuels ExxonMobil’s Market Share*
30% 9% 25% 19%** 6% Colombia Peru Ecuador
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Mapco - Gas Stations and Convenience Stores
Mapco shares.
parties, which sell fuel and have convenience stores.
million, along with cash and a working capital adjustment on the closing date amounting to US$ 16.3 million.
Virginia 8 GS Georgia 42 GS Kentucky Mississippi 10 GS Arkansas 12 GS Alabama 89 GS Tennessee 187 GS
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Abastible became the third largest LPG distributor in South America
459 615 1185 188 466 403 Chile Colombia Perú Ecuador 134%
Physical Sales of LPG by country in 2016
2016 Abastible completed the acquisition
Repsol’s LPG
Ecuador respectively.
Duragas was US$ 33 million.
South America.
Thousand tons
Solgas and Duragas - LPG Operations
Total of 1.5 million tons
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Minsur maintaining the 60% remaining.
amount will be financed through capital contributions proportional to ownership percentage in three years.
Mina Justa – Copper Mining
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2,8 2,7 2,6 2,6 2,4 2,4 2,4 2,2 2,4 2,3 2,7 2,8 3,0 2,9 2,7 2,4 2,3 2,4 2,1 2,0 2,0 2,4 2,9 3,2
Net Debt / EBITDA
Investment grade since 1995 Balanced debt schedule Fast recovery of debt levels after an expansion phase
Net debt/EBITDA
Healthy cash flows allows to:
Expansion phase Mapco Tafisa Duragas Solgas
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BBB (Stable) BBB (Negative) International Local AA- (Stable) AA (Stable)
Excluding the effect of IFRS16: 3,0x.
1.861 621 873 494 647 1.237 955 109 308 553 282 622 381 67 1.632
Financial debt maturities Figures in US$ million
Financial debt maturities (US$ Million)
EC Holding 7% Arauco 63% Copec 22% Abastible3% Sonacol1% Igemar 3% Others1%
US Dollar 58% Chilean Pesos 4% Chilean UF 27% Colombian Pesos 9% Others 2%
0,40 0,60 0,80 1,00 1,20 1,40
4.000 6.000 8.000 10.000 12.000 14.000 2011 2012 2013 2014 2015 2016 2017 2018 2019LTM Equity Net Debt/Equity
Distribution by affiliate
(MUS$)
Equity and Net Debt / Equity Evolution Consolidated Financial Debt 3Q19: MMUS$ 8,777 (Cash and equivalent: MMUS$ 1,861)
Distribution by currency Distribution by type
Bonds Covenant* 1,2x
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Bank Debt 27% Bonds 62% Others 11%
Installed capacity from forestry biomass
Kyoto Protocol Risk management and external assessment Relationship with stakeholders Best board practices
*CDM: Clean Development Mechanism
Hours of staff training
in community and social development investment
COMMUNITY
Important contribution to Education, Culture, Sports and the Community
ENVIRONMENT
Sustainable development of our productive activities
CORPORATE GOVERNANCE
Solid structures to ensure good practices of management, investment and production Non-executive directors Independent director
Empresas Copec is part of the most relevant global indexes in sustainability
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Net income 92.9% down YoY and 83.8% QoQ.
83 361 216 154 124 161 193 143 42 133 173 117 132 49 174 311 106 280 335 308 148 221 135 22 IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III
EBITDA down 34.3% YoY and 9.8% QoQ.
398 564 521 518 441 520 576 497 395 416 475 442 406 507 545 638 530 675 810 745 538 591 542 489 IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III
QUARTERLY NET INCOME (Million of US$) QUARTERLY EBITDA
(Million of US$)
2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019
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745 489 256 10 5 2 9 17 56 155 1 1 271 4
EBITDA (Million US$)
Y o Y EBITDA CHANGES BY COMPANY 3Q19 EBITDA BREAKDOWN
EBITDA decreased mainly in the forestry business. In the fuels business, EBITDA increased in Copec, explained by a positive effect due to IFRS16. Abastible posted also a higher EBITDA, despite both companies being affected by dollar appreciation.
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308 22 2 13 21 44 1 1 1 4 7 9 13 250 29 15 8 6
Y o Y NET INCOME CHANGES BY COMPANY 3Q19 NET INCOME BREAKDOWN
NET INCOME (Million US$)
Net Income decreased in 3Q19, mainly because of lower results at Arauco, Camino Nevado (Mina Invierno) and Abastible.
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Million USD 3Q 19 3Q 18 Change Net income 22 308 (286) Operating income 185 488 (303) Non operating income (116) (57) (58)
Other Income
65 45 21
Other expenses
(52) (35) (16)
Other profit (loss)
(7) (3) (4)
Financial Income
14 10 4
Financial expense
(106) (92) (14)
Profit in associates and JV's
(0) 30 (31)
Exchange Differences
(27) (9) (18)
Gain (losses) on net monetary position
(3) (4)
Taxes (32) (111) 79 EBITDA 489 745 (256) CONSOLIDATED INCOME STATEMENT
OPERATING INCOME DROPPED
FIFO effects on inventories.
LOWER NON-OPERATING INCOME
gains in Agesa compared to 3Q18.
effect of IFRS16.
changes in Copec.
Net income dropped from lower pulp prices and lower non operating income.
December, 2019