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Corporate Presentation November 2017
Company Overview
Established in Peru in 1922
90+ years of business, 70+ years of alliance with CAT currently operating 17 companies within 10 countries employing a workforce of +6,000 employees
Key facts 60% Caterpillar Market Share Market cap (Sep-2017) ~$790MM Shareholders +2,500
HIGHLIGHTS
SHAREHOLDER
STRUCTURE
Local pension funds 27%
Peruvian investors
33%
Foreign investors
40%
CONSISTET FINANCIAL
PERFORMANCE
5,225 4,878
5,333 4,856 4,742
588 522 667 583 566
11.3% 10.7%
12.5% 12.0% 11.9%
7.0%
9.0%
11.0%
13.0%
15.0%
17.0%
19.0%
2013 2014 2015 2016 Sep 17 LTM
Sales EBITDA EBITDA Margin
(S/. Million)
HISTORY OF THE CORPORATION
40’s
Caterpillar
1920 1930 1940
1950
1970
1980
1990
2000
2017
2010
1960
1922
Ferreycorp foundation
(former Ferreyros
S.A.A.)
50’s Geographical
expansion:
establishment of
branches in Peru
60’s Development of
complementary
businesses
70’s Move
operations to Av
Industrial
facilities
80’s Redefining
business: focus on
capital goods
90’s Organizational
development to take
opportunities arising
from large mining
00’s Complementary
businesses (economic
sectors, business
lines)
10’s International
expansion: CAT and
other brands
60’s
Registry in Lima
Stock Exchange
90’s
Debt Issuance:
corporate bonds
and securitization
of commercial
papers
00’s
Establishment of
policies and
procedures
regarding
corporate
governance
10’s
Shares issuance
Bonds issuance in the
international market
Reorganization: Ferreycorp
Caterpillar dealers and allied
brands in Peru
Guatemala
El Salvador
Belice
Caterpillar dealers and other businesses
in Central America
El Salvador, Honduras
Nicaragua
Chile, Colombia , Ecuador, Perú
Other subsidiaries in Peru and
abroad
CORPORATE STRUCTURE BVL: FERREYC1
Caterpillar dealers and
allied brands in Peru
Caterpillar dealers and other
businesses in Central America
Other subsidiaries in
Peru and abroad
FERREYCORP AT A GLANCE
Sales
% of Total Sales
EBITDA
% of Total EBITDA
EBITDA Margin
# of Employees
As of Sep 2017
(S/. Million)
2,711 332 594
75% 9% 16%
348 32 18
87% 8% 5%
13% 10% 3%
4,208 835 1,162
(*) Third group of companies increasing their share in total sales: 2013 (10%), 2014 (11%), 2015
(12%), 2016 (15%) – as a result of diversification strategy through complementary businesses
STRATEGY COMPLETE VALUE PROPOSITION
Machinery
Agriculture business
Automotive business
Consumables
Services
http://www.carmix.com/index.htmlhttp://images.google.com/imgres?imgurl=http://mtzionmh.com/i/Genie-Logo.jpg&imgrefurl=http://mtzionmh.com/&h=379&w=1000&sz=138&hl=en&start=1&sig2=f0GMH1mF9IX40IcI0em2dg&um=1&usg=__PSqMUmkt4UsdYGPcCAzQnFji8dc=&tbnid=bat_jYyHiD0XnM:&tbnh=56&tbnw=149&ei=M7v7SO60LIeOeeDjpRg&prev=/images?q=Genie+logo&um=1&hl=en&safe=off&sa=Nhttp://images.google.com/imgres?imgurl=http://www.dirtygirlmotorracing.com/sponsor-lincoln-logo.gif&imgrefurl=http://www.dirtygirlmotorracing.com/links.html&h=99&w=300&sz=7&hl=en&start=4&sig2=jWq9ZYoisSj2st2xqvCGgQ&um=1&usg=__m5mmvVNmKmOZa80vrDB0fn2AyMQ=&tbnid=c5HfR0YbMezaIM:&tbnh=38&tbnw=116&ei=frr7SNbJG5GweviW2CE&prev=/images?q=Lincoln+electric+logo&um=1&hl=en&safe=offhttp://www.3m.com/us
Key Capabilities
KEY CAPABILITIES
Long term strategic partnerships
Market coverage
Unmatched supply chain and logistics
capabilities
Financial strength and funding sources
In-depth market knowledge
Innovation and Technology
Ethics and compliance, Corporate
Governance and Sustainability
PRESENCE IN SOUTH AND CENTRAL AMERICA REPRESENTING LEADER BRANDS
http://www.carmix.com/index.htmlhttp://images.google.com/imgres?imgurl=http://mtzionmh.com/i/Genie-Logo.jpg&imgrefurl=http://mtzionmh.com/&h=379&w=1000&sz=138&hl=en&start=1&sig2=f0GMH1mF9IX40IcI0em2dg&um=1&usg=__PSqMUmkt4UsdYGPcCAzQnFji8dc=&tbnid=bat_jYyHiD0XnM:&tbnh=56&tbnw=149&ei=M7v7SO60LIeOeeDjpRg&prev=/images?q=Genie+logo&um=1&hl=en&safe=off&sa=Nhttp://images.google.com/imgres?imgurl=http://www.dirtygirlmotorracing.com/sponsor-lincoln-logo.gif&imgrefurl=http://www.dirtygirlmotorracing.com/links.html&h=99&w=300&sz=7&hl=en&start=4&sig2=jWq9ZYoisSj2st2xqvCGgQ&um=1&usg=__m5mmvVNmKmOZa80vrDB0fn2AyMQ=&tbnid=c5HfR0YbMezaIM:&tbnh=38&tbnw=116&ei=frr7SNbJG5GweviW2CE&prev=/images?q=Lincoln+electric+logo&um=1&hl=en&safe=offhttp://www.3m.com/us
Tumbes
Piura
Lambayeque Cajamarca
Bagua
Iquitos
Trujillo
Huaraz Chimbote
Lima
Ica
Puno
Puerto Maldonado
Ayacucho
Cusco
Pucallpa
Tarapoto
Arequipa
Huancayo
Cerro de Pasco
Talara
Tacna
Huánuco
Ferreyros: 6 locations in Lima, 17 branches and
offices
Unimaq: main location in Lima and 8 branches in
Piura, Cajamarca, Lambayeque, Trujillo,
Huancayo, Arequipa, Cusco e Ilo. 3 Offices in
Cerro de Pasco, Andahuaylas and Ayacucho
Orvisa: main office in Iquitos and 2 branches in
Pucallpa and Tarapoto. 4 Offices in Huánuco,
Bagua, Jaén and Madre de Dios
Motored: 2 locations in Lima and 3 branches in
Arequipa, Trujillo and Cajamarca
Soltrak: main location in Lima and 7 branches in
Talara, Trujillo, Arequipa, Huancayo, Huánuco,
Pucallpa and Loreto
MINING, CONSTRUCTION AND ENERGY PROJECTS
Ilo
Trompeteros
Yauli
Jaén
MARKET COVERAGE
UNMATCHED LOGISTICS CAPABILITIES
• 50+ warehouses, several located in remote locations (eg:
mines)
• 7,000 yearly trips to reach our customers
• Importing 530,000 ft3 per month
• Highest standards in operations and transportation partners
• ISO9002 certification
• ISO 14000 certification
• 5-star contamination control
365 DAYS 24x7 OPERATIONS
890,000 m2 TO SERVE OUR CUSTOMERS
170+ POINTS OF CONTACT
US$120M INVENTORY OF PARTS
INNOVATION AND TECHNOLOGY
Innovative customer solutions
E-commerce
Performance solutions: condition monitoring
CRM: follow business opportunities and increase customer coverage
Processes and systems: SAP platform
Design Thinking
SUSTAINABILITY STAKEHOLDERS
Ferreycorp Association
“Operadores de equipo pesado Ferreyros” Club
Think Big Program
“Jóvenes con Futuro” Program
Tax works
Corporate volunteering
Long-term relations with mutual benefit
Products and services of high quality, specialized
attention by sectors
Continuous monitoring of Customer’s Satisfaction and
Complaint Management
Marketing and trade policy
Sustainability Report
Global Compact Progress Report
Socially Responsible Company
Recruitment policy: transparency and equal treatment
Preference for suppliers based on: quality of product
or service, price, delivery terms, treatment of staff,
implementation of security programs.
ABE diffusion between suppliers
Drivers' committee that shares good practices
Community
Customers
Government
and society
Suppliers
Environment
Collaborators
Shareholders
Environmental management system based on ISO
14001
Environmental Management Programs: planning,
training and awareness, operational control and
verification.
Measuring Carbon Footprint
Health care, safety and working conditions
Training and professional development
Appreciation and respect for diversity
Labor Inclusion Program
Personal and family development
Principles of Good Corporate Governance
Respect of Shareholders’ rights
Transparent and timely reporting
Efficient representation with our Board of Directors
CORPORATE STANDARDS STRONG CORPORATE GOVERNANCE
• Ferreycorp (FERREYC1) is listed in the Lima Stock Exchange since
1962.
• Ferreycorp is included in the Corporate Governance Index of the Lima
Stock Exchange since its inception in 2008.
Board of Directors:
• The last General Annual Meeting agreed to reduce the board
members from 10 to 9 members.
• The Board of Directors of Ferreycorp is complemented by three
committees: LEAD BY INDEPENDENT DIRECTORS
Nominations, Remuneration, Corporate Governance and
Sustainability Committee
Audit and Risk Committee
Innovation and Systems Committee
Composition of the Board:
Independent Directors Dependent Directors
Jorge Ganoza Oscar Espinosa
Humberto Nadal Carlos Ferreyros
Gustavo Noriega Juan Manuel Peña
Javier Otero Andreas von Wedemeyer
Manuel Bustamante
Recognitions
• Key of the Lima Stock Exchange: 2008, 2011, 2012, 2013 and 2017.
• Member of the Companies Circle of the Latin America launched by
OECD and IFC
• International recognitions: World Finance Award 2011 and 2012;
Latin America Investor Relations Awards 2011 (LirA’11), Ethical
Boardroom Corporate Governance Awards 2015: South America,
Industrial services sector
Financial
Performance
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD'16 YTD'17
US
$ M
illio
n
SUSTAINABLE BUSINESS MODEL
SALES BY LINE OF BUSINESS
-
34%
48%
9%
9%
49%
33%
6%
11%
US$1.9Bn
US$1.7Bn US$1.6Bn
US$1.4Bn
US$1.1Bn US$1.1Bn
40%
44%
7%
9% Machinery
Spare parts and services
Rental and used
Others
• In a context of poor momentum in mining
investment and delayed infrastructure
projects
• Resilient business model
• Stable product support business
• Diversification strategy through business
lines, presence in different economic
sectors, different countries, various
represented brands and a diversified
portfolio of products.
955 382 574 539
1,088
1,074 1,045
704
568
587 667
564
514
515 466
359
0
500
1000
1500
2000
2500
3000
2013 2014 2015 2016
CAT Mining trucks and equipment CAT machines and engines for other sectors
Allied Equipment Rental and used
2,752
2,166
OPERATIONAL RESULTS
500 294
119 134
569
480
195 148
419
472
156 147
261
307
91 104
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
YTD'16 YTD'17 Q3'16 Q3'17
1,749
1,553
561 533
1,714 1,935
2,203 2,247
0
500
1000
1500
2000
2500
2013 2014 2015 2016
1,659 1,756
564 592
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
YTD'16 YTD'17 Q3'16 Q3'17
385 384 378 444
0
100
200
300
400
500
600
700
800
900
1000
2013 2014 2015 2016
340 326
117 111 0
100
200
300
400
500
600
700
800
900
1000
YTD'16 YTD'17 Q3'16 Q3'17
MACHINERY
SPARE PARTS
AND SERVICES
OTHER LINES
3,125
2,558
Million Soles (S/ mm)
-4.9%
-11.2%
+4.9%
+5.9%
-5.5%
-4.0%
SALES BY GROUP OF COMPANIES
926 940
2,867 2,710
24.3% 24.8% 24.6% 24.8%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Q3'16 Q3'17 YTD'16 YTD'17
Gross Margin
115 97
340 332
24.5% 25.6% 25.8% 25.2% 0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
Q3'16 Q3'17 YTD'16 YTD'17
Gross Margin
-15.6%
202 198
543 594
16.5% 15.8% 18.9% 18.0% 0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Q3'16 Q3'17 YTD'16 YTD'17
Gross Margin
Million Soles (S/ mm)
+1.5% -1.9%
CAT dealers and allied brands in Peru
CAT dealers and other businesses in CA
Other subsidiaries in Peru and abroad
• Caterpillar dealers in Peru (76% of total sales): +1.5% driven by
spare parts and services (56% of total revenues) and Ferreyros
mining equipment (+12%)
• The companies that carry Caterpillar business and other allied lines
in Central America (8% of total sales): -15.6% affected by less
activity in economic sectors driven by political issues
• The local subsidiaries and businesses abroad that complement the
Caterpillar’s business (16% of total revenues): -1.9%
-5.5%%
-2.3%%
+9.3%
19
SALES AND GROSS MARGIN
NET PROFIT AND NET MARGIN EBITDA AND EBITDA MARGIN
CONSOLIDATED FINANCIAL RESULTS
5,225 4,878
5,333 4,856
3,751 3,637
21.2% 22.9% 24.2% 24.3% 23.9% 23.7%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
2013 2014 2015 2016 YTD'16 YTD'17
100 92
161
230
164
211
1.9% 1.9% 3.0%
4.7% 4.4% 5.8%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
2013 2014 2015 2016 YTD'16 YTD'17
588 522
667
583
450 433
11.20% 10.70% 12.50% 12% 12.00% 12%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
0
100
200
300
400
500
600
700
800
2013 2014 2015 2016 YTD'16 YTD'17
HIGHLIGHTS
Million Soles (S/ mm)
-3.0%
+28.6% -3.7%
• Resilient business model
• Successful execution of operational priorities
• Consistent EBITDA generation and margin
• Strong free cash flow generation
INVESTMENT IN ASSETS
• Common practice, 30days for collection once invoice is delivered
to customer.
• Accounts receivables affected by mining equipment invoicing
during the second quarter.
ACCOUNTS RECEIVABLES EVOLUTION
826 889 957
1,080 1,152 1,099
36 31
48
45 36 93
0
200
400
600
800
1,000
1,200
2013 2014 2015 2016 YTD'16 YTD'17
+0.3%
1,188 1,192
1,160 1,101 920
747 794 753
371 402
389
382 375 415
49 58
70
104 89 92
0
200
400
600
800
1,000
1,200
1,400
1,600
2013 2014 2015 2016 YTD'16 YTD'17
1,580 1,561
1,379
1,233 1,258 1,260
Million Soles (S/ mm)
862 920
1,005 1,125
+0.2%
INVENTORY EVOLUTION
CAPEX EVOLUTION
• YTD’17 CAPEX: infrastructure and equipment executed in the
new CRC in Arequipa. Offset by the sale and lease back of
Motored facility
• 2016 CAPEX results negative due to the reduction of the rental
fleet. Infrastructure includes mainly the purchase of a piece of
land in La Joya (Arequipa) by Ferreyros and works that are being
executed in some subsidiaries.
16 11
28 17 17
19 15
3
5 5
9
-3 -1
-33
-9
-35
-25
-15
-5
5
15
25
35
45
2013 2014 2015 2016 YTD'17
Infrastructure Equipment and components Rental fleet
~ S/ 44mm
INVESTMENT IN ASSETS Million Dollars (US$ mm)
44
23 30
-11 13
CASH CYCLE
Targets:
Inventory Payable Receivables
120 days 45 days 45-60 days
3.0x
152 148 148 145 152
72 67
73 70 77
46 47 53 54 51
126 128 127 128 126
Q3'16 Q4'16 Q1'17 Q2'17 Q3'17
Cash cycle Collection days Payable days Inventory days
CASH FLOW BREAKDOWN
313
86
31
56
139
Operating cashflow
Capex Intangible assets Financialexpenses
Free cash flowYTD'17
23
Million Soles (S/ mm)
FREE CASH FLOW
86
47 51 9
29
44
Capex Motoredfacilities op
lease
Net transfersmach andrental fleet
Dep of sales Otherdeductions
Capex
FCF CAPEX DETAIL
Positive variations Negative variations
129
398
85
86
31 18 6 56
124
3
171
Startingcash
balanceQ4'16
Operatingcash flow
Taxes CAPEX Intangibleacquisition
Sharesbuyback
Debt Interestspayed
Dividendspayed
Otherfinancingactivities
(*)
Endingcash
balanceQ2'17
Operating Cash Flow
S/ 313
Cash used in Investing
activities S/ -99 Cash flow from financing
activities S/ -174
236 222 201 307 274 298
325 295 295 161
161 161
170 123
93 53 104 83
3.28 3.50 2.67 2.86 2.76 2.83
-20.00
-15.00
-10.00
-5.00
0.00
0
100
200
300
400
500
600
700
800
2013 2014 2015 2016 YTD'16 YTD'17
Banks Bonds Caterpillar Net Debt/ Ebitda
731
640 589
521 539 542
CONSOLIDATED FINANCIAL DEBT Million Dollars(S/ mm)
DIVERSIFIED FUNDING BASE
DEBT BY CURRENCY
1%
99%
Variable rate
Fixed rate
DEBT BY RATE
9% 2%
0%
89%
Soles
Quetzales
Pesos Chilenos
Dolares
• Natural hedge: revenue-debt
DEBT MATURITY
FINANCIAL EXPENSES
AVG COST OF DEBT
• Strategy of financing: short term, flexible without penalties and
low interest rate. Availability of credit lines
4.40% 4.36%
4.65%
4.12%
3.50%
2013 2014 2015 2016 YTD'17
103 97
106
125
90
58
2.0% 1.9% 2.0% 2.60% 2.40%
1.60% 0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
2013 2014 2015 2016 YTD'16 YTD'17
Financial expenses Financial expenses (as % of total sales)
• 2016: Financial expenses increased due to S/ 14 million
premium payed for the International BondTender Offer
CONSOLIDATED FINANCIAL DEBT Million Dollars(S/ mm)
Million Soles S/ mm)
211
104
30
197
7 64
2017 2018 2019 2020 2021 2022
PROFITABILITY RATIOS
• ROIC: EBITLTM / Invested Capital (total equity + financial net debt): affected by sales
that decreased by 4.2% and SG&A by 2%
13.2% 13.5%
11.8% 12.2%
11.9%
12.8%
14.6%
8.1% 7.7%
7.1% 6.3%
5.5% 6.1% 6.2%
16.0%
14.3%
13.2%
11.9% 10.8%
11.5% 11.6%
Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17
ROE ROA ROIC
SHAREHOLDERS COMPOSITION AS OF SEPT 2017
STOCK PERFORMANCE 2016-2017 (S/.)
FERREYCORP IN THE CAPITAL MARKET
Nº of shares
Capital
1’014,326,324
S/. 1’014,326,324
MAIN SHAREHOLDERS AS OF SEPT 17
Dividend Yield 2016 (div 0.128457) 7.6%
Repurchased shares as of June 2017 43’145,669
Holder %
Onyx Latin America Equity Fund LP 7.92%
RI-Fondo 2 (Prima AFP) 7.34%
La Positiva Vida Seguros y Reaseguros S.A 7.03%
Equinox Partners LP 5.60%
IN-Fondo 2 (AFP Integra) 5.05%
RI-Fondo 3 (Prima AFP) 4.30%
Kuroto Fund 4.28%
Local pension funds 27%
Peruvian investors
33%
Foreign investors
40%
1
1.3
1.6
1.9
2.2
2.5
2.8
15
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17
DIVIDEND POLICY ANNUAL COMPLIANCE
In 1997, the company´s Shareholders meeting approved the dividend policy.
A modification was approved to assign minimum and maximum ranges. Cash dividends will amount to 5% of the capital or a
ceiling equal to 60% of freely available profits.
The amount to be distributed every year is approved in the Annual Shareholders Meeting.
The 2013 Shareholders Meeting approved to increase the upper limit from 50% to 60% of freely available profits.
Period Cash dividend (*)
%
Dividend / Net
Profit
Cash dividend per share
(%)
Dividend per share
(S/.)
2003 9.1 50% 4.46% 0.0446
2004 11.9 48% 5.50% 0.055
2005 13.3 49% 5.50% 0.055
2006 28.4 36% 11.00% 0.110
2007 40.2 35% 13.20% 0.132
2008 20.7 29% 5.50% 0.055
2009 28.0 31% 6.00% 0.066
2010 31.8 26% 6.00% 0.066
2011 41.9 29% 6.00% 0.060
2012 48.1 30% 6.00% 0.060
2013 55.7 60% 5.90% 0.059
2014 60.8 52% 6.00% 0.060
2015 87.3 60% 8.87% 0.0887
2016 124.4 60% 12.8457% 0.128457 (*) In million (**) Upper Limit: 60%