May 2017 2 Corporate Presentation | Sigdo Koppers Company - - PowerPoint PPT Presentation

May 2017

2

3

Company Overview

Source: Company Note: The percents correspond to the ownership of Sigdo Koppers over its subsidiaries, as of December 2016 (1) Net Profit of 2011 have an extraordinary effect of US$157 millions mainly due to the sale of CTI (2) Net Profit of 2013 have an extraordinary loss of US$29.2 millions mainly due to the sale of Sigdopack

Corporate Presentation |

Sigdo Koppers Sales

(US$ millions)

Consolidated EBITDA

(US$ millions)

Net Profit

(US$ millions)

Sigdo Koppers, Chilean conglomerate founded in

• 1960. One of the most dynamic and important

industrial groups in Chile. Our commitment is a long term investment industrial approach, aiming to be a comprehensive supplier of products and services for the mining and industrial operations worldwide.

286(1)

At a Glance

121(2)

SK Comercial Ingeniería y Construcción Enaex Magotteaux

60,43% 60,72% 97,75% 86,82%

Enaex Magotteaux SK Comercial SKBergé Puerto Ventanas CHBB SK Godelius

50,01% 58,19% 74,59% 40,00%

4

Others; 3,76% Pension funds & Insurance companies; 8,43% Stock Brokers; 8,02% Mutual funds and

• ther institutional

investors; 4,37%

Corporate Governance

Ownership Structure Board of Directors

Source: Santiago Stock Exchange.

(1) Last 12 month

Corporate Presentation

Sigdo Koppers ▪ Daily Average vol. traded (1): US$0.3 millions ▪ Market Cap: US$1.5 billions (As of April 27th 2017)

1. Juan Eduardo Errázuriz Ossa Chairman

• 2. Naoshi Matsumoto

Takahashi Vicepresident

• 3. Horacio Pavez Aro

Director

• 4. Juan Andrés Fontaine

Talavera Director

• 5. Canio Corbo Lioi

Independent Director

• 6. Jaime Vargas Serrano

Director

• 7. Norman Hansen Rosés

Director

At a Glance

Ownership structure as of Feb-17

5

Corporate Presentation |

Corporate Social Responsibility (CSR)

SK seeks sustainable development, with a business vision that favors respect for ethics, people, communities and environment. Sigdo Koppers is part of DJSI Chile index and UN Global Compact, under which it committs to respect principles of responsible behavior, in

• rder to achieve the objectives of building a

sustainable and inclusive global economy

Environment: ✓ Carbon credit (CERs) project (Enaex) ✓ ISO 14001 certification Community: ✓ CFT Talcahuano. ✓ Improving community environment (Square SKBergé, Program “Un contrato, un árbol” SKC) ✓ Dialog programs(PVSA) Labor Relations: ✓ Emphasis on occupational health and risk prevention ✓ Training and labor certification (ICSK) ✓ Integration of people with disabilities(Fundación Chile Dual) Corporate Governance: ✓ Code of Ethics ✓ Investor Relations Customers and Suppliers : ✓ ISO 9001 ✓ Studies

SK manages and measures the development

• f CSR under ISO 26.000 certification

At a Glance

Sigdo Koppers

6

ORE PROCESSING

Supplier of products and services for the mining

✓ Strategic Focus: Provide products and services for the mining and industry ✓ Involved in the main stages of the mining value chain ✓ aprox. 75% of the SK’s Consolidated EBITDA comes from the exposure to the mining activities

Corporate Presentation |

Investment approach

Strategic focus on the mining and industry

Anglo American - Minera Los Bronces:

…

MINING OPERATION SALES & LOGISTICS MINING DEVELPOMENT

1 3 4 2 1 2 3 4

+ + +

BHP Billiton - Minera Escondida:

1 2 3 4

+ + +

Codelco – Andina:

1 2 3

+ +

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ICSK

Industrial Construction Services Puerto Ventanas ICSK

Industrial Services

Industrial

Commercial & Automotive

Enaex Magotteaux

CHBB / SK Godelius SKC SKBergé

▪

Ingeniería y Construcción Sigdo Koppers (ICSK) is a leading company in the execution of engineering, construction and industrial erection projects with a solid reputation both in Chile and abroad

▪

+50 years of experience in construction and industrial erection

▪

The company has participated in the execution

• f the main relevant projects for the

development of Chile , and has also executed large scale works in Peru and Argentina

▪

The company has ample experience in projects in the areas of Mining and Metallurgy, Chemistry and Petrochemistry, Energy Generation and Transmission, Industrial Buildings , Pulp and Paper, and Civil Works

▪

ICSK owns a large fleet of new construction machinery

▪

Long term relationship with Bechtel Consolidated Sales

(US$ millons)

Source: ICSK

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Environmental solutions for the local industry through services and consultancies. Services of construction and erection of medium- scale projects. Support to clients in the areas of

• peration, long

term maintenance

• f their

productive assets and

• peration of

Industrial assets. Technical training

• rganization

committed to the development of qualified human resources. Engaged in construction and erection projects in Peru. Civil works construction, submarine pipe, electro mechanics erections, utilities and port works.

Puerto Ventanas ICSK

Industrial Services

Industrial

Commercial & Automotive

Enaex Magotteaux

CHBB / SK Godelius SKC SKBergé

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Puerto Ventanas

Logistics and transport

▪

Leading private port in the central region of Chile

▪

Puerto Ventanas engages in two lines

• f

business:

▪

Loading and unloading solid and liquid bulk

▪

Storage of the cargo if necessary

▪

Main cargo associated to mining and energy clients: mineral concentrates, coal, fuel

▪

It has ample stockpiling yards and modern facilities that

• ffer

significant comparative advantages

▪

Ferrocail del Pacífico S.A. (Fepasa) is the main subsidiary of Puerto Ventanas (51,82%)

▪

Fepasa is the largest railroad freight company in the central and south zone of Chile Tons transfered

(Thousands tons)

Source: PVSA

Puerto Ventanas

ICSK

Industrial Services

Industrial

Commercial & Automotive

Enaex Magotteaux

CHBB / SK Godelius SKC SKBergé

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Puerto Ventanas

Logistics and transport

. Port Business Loading & unloading Warehousing Railroad Business

Puerto Ventanas

ICSK

Industrial Services

Industrial

Commercial & Automotive

Enaex Magotteaux

CHBB / SK Godelius SKC SKBergé

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Enaex

Rock fragmentation services

▪ Founded in 1920, Enaex is the most important

producer

• f

ammonium nitrate, mining explosives and provider of integral rock-breaking services in Chile and Latin America

▪ The company is vertically integrated in its most

important raw materials and conducts virtually all activities in the value chain of rock-blasting

▪ Enaex is the leader in the Chilean market (60%) ▪ Enaex has three production plants: Loa River,

Teatinos Point and Prillex America

▪ The company developed the largest Carbon

Emission Project in Chile. The greenhouse gas emission rights have been assigned to Mitsubishi

▪ In 2015 Enaex acquired Britanite (Brazil) and

Davey Bickford (France) Consolidated Sales

(US$ millons)

Source: Enaex

Puerto Ventanas

ICSK

Industrial Services

Industrial

Commercial & Automotive

Enaex

Magotteaux

CHBB / SK Godelius SKC SKBergé

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▪ Largest Ammonium Nitrate

Plant in the region

✓ Prillex America (Chile)

850 thousands tons/year

▪ Factory Trucks: 92 ▪ Service Plants: 35 ▪ Río Loa: Cartridge Explosives

Plant

▪ Punta Teatinos: Cartridge

Emulsions Plant

▪ 50 years of experience in

explosives manufacturing and rock blasting services

▪ Leader in Brazil with 40%

• f MkSh

Services and Explosives (Chile) International Business Petrochemical Area Puerto Ventanas

ICSK

Industrial Services

Industrial

Commercial & Automotive

Enaex

Magotteaux

CHBB / SK Godelius SKC SKBergé

▪ 11 years of experience in

explosives and rock blasting services

▪ 10% of MkSh in A.N. in

Perú

▪ 150 years of experience

as manufacturer and distributor of electronic detonators for the explosives industry

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▪ Magotteaux, based on Belgium, is a leading global provider of

high chrome grinding media (GM) and castings

▪ Principal end markets for Magotteaux’s products are the

mining and cement industries

▪ The company has 19 wholly-owned manufacturing facilities

across 11 countries and 25 commercial offices worldwide ▪ The main facilities are located in Belgium, Brazil, United

States and Thailand

▪ Magotteaux has a Joint Venture with Scaw Metals in South

Africa

▪ Installed capacity (tons/year)

▪High chrome GM: 320.000 ▪Low chrome GM: 55.000 ▪Forged steel GM: 55.000 ▪Castings: 66.000 ▪JV with Scaw Metals: 100.000 (high chrome GM)

▪ Magotteaux provides high value-added products, being

recognized as an innovation and technology leader

Magotteaux

High performance wear resistant consumables

(1) Figures 2009-2011 does not consolidate Sabo Chile and 50% of Proacer.

After 2011, Figure consolidates both SK Sabo Chile and 100% of Proacer

Consolidated Sales(1)

(US$ millions)

Source: Magotteaux

Puerto Ventanas

ICSK

Industrial Services

Industrial

Commercial & Automotive

Enaex Magotteaux CHBB / SK Godelius SKC SKBergé

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Magotteaux

High performance wear resistant consumables

41.4

54.0 37.9 135.0 100.0 9.0 5.0 3.8 5.0 7.3 4.5 33.2 2.5 9.0 9.7 6.5 9.0 Castings Scaw Metals – Technical Assistance 60.0 50.0 High chrome GM (1) Low chrome GM Forged steel GM Source: Magotteaux Capacity installed in thousands tons, as of December 2014

(1) GM: Grinding Media

Puerto Ventanas

ICSK

Industrial Services

Industrial

Commercial & Automotive

Enaex Magotteaux CHBB / SK Godelius SKC SKBergé

16

CHBB

Compañía de Hidrogeno del Bío Bío S.A.

▪

Compañía de Hidrógeno Bio Bio S.A. (CHBB) owns a highly pure hydrogen production plant that supplies

• nly the Bio Bio Refinery owned by Empresa Nacional

del Petróleo (ENAP) in in the borough of Talcahuano.

▪

Sigdo Koppers S.A. owns 82,87% of the shares in SK Inversiones Petroquímicas (SKIP), which holds 90% of the shares in CHBB.

▪

ENAP pays a fixed annual fee to CHBB regardless the production of the plant.

SK Godelius

Compañía de Tecnología e Información

▪ SK Godelius is a system integrator which provides services,

develops projects and implements technological solutions in the mining and the natural resources industries.

▪ Sigdo Koppers S.A. owns 100% of the shares in SK Inversiones

Tecnológicas (SKIT), which holds 58,19% of the shares in SK Godelius.

▪ SK Godelius has focused in providing technological solutions

for the mining industry.

Puerto Ventanas

ICSK

Industrial Services

Industrial

Commercial & Automotive

Enaex Magotteaux CHBB / SK Godelius SKC SKBergé

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▪

Founded in 1975, SK Comercial S.A. (SKC), through its subsidiaries, conducts the businesses of the sale, rental of machinery, distribution of inputs and technical services

▪

The SKC is present in Chile, Peru and Brazil

▪

SKC and SK Rental (SKC´s subsidiary) carry

• ut their commercial activities in sectors

such as mining, construction, agriculture, forestry, land and air transportation

▪

SK Rental is the leading company in the Rental industry in Chile. It has a machinery fleet of US$220 millions

▪

Dic-15: SK Rental began its operations in Bolivia

SK Comercial

Sale, Rental and Service of machinery

Consolidated Sales

(US$ millions)

Source: SKC

Puerto Ventanas

ICSK

Industrial Services Industrial Commercial & Automotive

Enaex Magotteaux CHBB / SK Godelius SKC SKBergé

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Services and Parts Machinery Rental Machinery Distribution

Puerto Ventanas

ICSK

Industrial Services Industrial Commercial & Automotive

Enaex Magotteaux CHBB / SK Godelius SKC SKBergé

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SKBergé

Automotive Sales

▪ SKBergé S.A. was formed by SK and the

Bergé Group (Spain) to develop the business

• f the representation, sale and distribution
• f light vehicles in Chile, Peru, Colombia and

Argentina

▪ SKBergé is the leading automotive retail

group in Chile in terms of revenue (n° 2 in units)

▪ In 2008 began the operations of Santander

Consumer Finance, a subsidiary of SKBergé that specialize in automotive finance

▪ The

company has a dealership network comprised of 106 dealers, 223 points of sale and 218 service branches Consolidated Sales

(US$ millions)

Source: SKBergé

Puerto Ventanas

ICSK

Industrial Services Industrial Commercial & Automotive

Enaex Magotteaux CHBB / SK Godelius SKC SKBergé

20

SKBergé – Brand representation by Country

Perú Argentina Chile Colombia Puerto Ventanas

ICSK

Industrial Services Industrial Commercial & Automotive

Enaex Magotteaux CHBB / SK Godelius SKC SKBergé

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Investment attractiveness

 Global Network  Leadership in all business areas  Successful Industrial history Strategic focus on the mining and industry  Steady Growth & Consistent Profitability  Conservative Financial position

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Successful Industrial history

Enlargement plant was founded

1960

Foundation of Acquisition of Joint Venture with Bergé Group in the automotive commercialization business

1975 1987 1990 1997 1998 2001 2003 2005 2006 2009

Acquisition of Plastic films production initiated through

Foundation of our Rental business

Acquisition of Acquisition of Starts its

• perations

Foundation of

2010 2011

Divestment of Acquisition of Enlargement plant

Presentacion Corporativa |

Our Industrial development history

• Our solid 50+ years of track record have demonstrated our ability to managed and developed successful industrial

greenfield investments.

• Our businesses have has been developed in both organic and inorganic growth.
• We have a long term investment industrial approach, managing and optimizing our companies operations.

Source: Company

Consideraciones de Inversión

Corporate Presentation

Sigdo Koppers

1

 Long term investment approach

and and

2012

Acquired 33.3% of

1999 2013

Divestment of

2015

Acquired 66.7% of Acquired 100% of

24

Corporate Presentation |

Track record

 Consistent and steady growth Consolidated Sales Sigdo Koppers S.A.(1)

(US$ millions)

Investment approach Consolidated EBITDA Sigdo Koppers S.A(1).

(US$ millions)

Net Profit Sigdo Koppers S.A.(1)

(US$ millions)

Steady Growth & Consistent Profitability

2

Source: Company

(1) Figures of 2011 considers 4Q of Magotteaux and CTI accumulated until August

CAGR: Compound annual growth rate.

• Sigdo Koppers has maintained a consistent

growth in all the businesses it manages, with an special focus on the innovation and search of new opportunities

• Our growth is accompanied by a consistent

investment policy, which is focused on return

• ver our investments

25

Steady Growth & Consistent Profitability

Corporate Presentation |

Long term growth plan

Source: Company

• Strengthen position in Peruvian market of rock

fragmentation services (Chemtrade)

• Britanite Consolidation in Brazil
• Development of new markets through Davey Bickford
• Regional approach seeking greater optimization of

productive capacities and shorter response time

• Increase presence in Chile and Peru, taking

advantage of synergies with SK

• Current backlog of US$458 millions mainly in the

mining and electric sector, which will be executed during 2017-2018.

Investment approach

• New warehouse of Copper Concentrate
• Investments in Shiploader Overhaul

2

26

Supply of products and services for the Mining and Industry

Mining Industry Enaex

✓ ✓

Magotteaux

✓ ✓

ICSK

✓ ✓

Puerto Ventanas

✓ ✓

Fepasa

✓ ✓ ✓ ✓

Sigdopack

✓ ✓

Corporate Presentation |

Strategic focus on the mining and industry

3

Source: Company

Investment approach

27

Corporate Presentation |

Investment approach

Our clients – Mining and Industrial Blue Chip companies Foco Estratégico en la Minería e Industria

3 Strategic focus on the mining and industry 3

28

Corporate Presentation |

Active International Presence

▪ Since 2011, SK became a company with Global Exposure ▪ As of today, 44% of SK’s sales are outside Chile (56%) Investment approach

Global Network

4

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Leadership of our subsidiaries

Market Share Leadership by area

✓ Biggest producer of Amonia Nitrate and explosives for the mining in Latin America ✓ Regional leader in rock blasting services ✓ #1 worldwide provider of high-crome grinding media balls ✓ One of the main players in the cement industry ✓ Leader in the production of high value-added wear resistant consumable for the cement, mining, fluid, dredging and utilities industries ✓ Leader in the execution of engineering, construction and industrial erection in Chile ✓ High prestige and long term partnership with Bechtel Main Ammonium Nitrate producer in the region

#1

Worldwide High-crome grinding media balls producer

44%

Market share in high- crome grinding media balls for the cement industry

33%

Market share in construction and industrial erection of large scale projects Rock blasting services - Chile

Source: ENAEX, Magotteaux, ICSK.

Corporate Presentation |

Investment approach

#3

Worldwide grinding media balls producer

14%

market share in high- crome balls for the mining industry

Others 5% Orica 30% 65%

Leadership in all business areas

5

30

Leadership of our subsidiaries

Market Share Leadership by area

✓ Puerto Ventanas leads the load and unload of commodities in the central region of Chile, specially copper and coal ✓ Fepasa is the main railroad freight company in the central zone of Chile SKC Rental ✓ # 1 in Chile ✓ # 2 in Perú (16% Msh) ✓ # 3 in South America ✓ Leader in distribution of industrial machinery and equipment in Chile ✓ SKBergé is the segond biggest distributor of automobiles in terms of revenues ✓ Important player in the Peruvian and Colombian market

56%

• f the total load

transferred through the Chilean central zone (excl. containers)

12%

Of all the new cars sold in Chile – units (3)

(As of Dec 2016)

Solid commodities loaded by port Chilean central zone (1) (As of Dec 2016)

Source: (1) Puerto Ventanas (2) SKC internal research (3) Based on units sold published by ANAC Chile;

13%

Market share, measured by sales in Chile

(As of Dec 2016)

16%

Of all new cars sold in Perú – units

(As of Dec 2016)

Corporate Presentation |

Investment apporach

22%

Machinery Rental in Chile (Dec 2016)

Leadership in all business areas

5

Fork Lift 21% Telescopic handler 24% Articulated Trucks 47% Tractors 22%

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2012 2013 2014 2015 2016 Current Assets 1.262 1.251 1.162 1.132 1.166 Non-current Assets 2.388 2.348 2.238 2.343 3.549 Total Assets 3.650 3.599 3.401 3.475 3.549 Current Liabilities 1.103 845 734 252 298 Non-current Liabilites 964 1149 1064 869 813 Equity (Atributable to the controler) 1.176 1.190 1.199 1.189 1.269 Equity (Non attributable to the controler) 407 415 404 385 411 Total Equity 1.583 1.605 1.602 1.574 1.680 Total Equity and Liabilities 3.650 3.599 3.401 3.475 3.549

2,78x

Corporate Presentation |

Consolidated Balance Sheet

(US$ millions)

Net Financial Leverage (Bonds Covenants)

(Times)

Net Financial Debt / EBITDA Net Debt/ [EBITDA + Consortiums]

(Times)

Credit rating - Local

Institution Rating Date AA-(1) June 2016 A+(2) July 2016

Source: Company. (1) Stable Outlook (2) Outlook Stable

Investment approach

Conservative Financial position

Covenant: 0,5X Covenant: 1,2X

2,57x

Conservative Financial position

6

Asesores Financieros

Corporate Presentation

EXTENDED VERSION