CORPORATE PRESENTATION August 2001 Wire & CableBrass MillsProfilesFlexible Packaging.

CORPORATE PRESENTATION

August 2001Wire & Cable

Brass MillsProfiles

Flexible Packaging

Contents

Company Overview

Business Units Overview and Highlights:

• Wire & Cable

• Brass Mills

• Flexible Packaging

• Aluminum Profiles & Curtain Walls

Company Overview:Madeco’s Ownership Structure (*)

(*) As of June 30, 2001; this diagram only includes the Company’s key operating subsidiaries;

for a complete listing, refer to the Company’s 20-F report

Q U I Ñ E N C O ( 5 6 . 1 1 % ) A D R s ( 1 2 . 2 9 % ) A F P s ( 1 0 . 0 1 % ) L O C A L O T H E R S ( 2 1 . 5 9 % )

W I R E A N D C A B L E B R A S S M I L L S F L E X I B L E P A C K A G I N GA L U M I N U M P R O F I L E S &

C U R T A I N W A L L S

A l u s a ( 7 5 . 9 6 % ) ( C h i l e )

I n d a l u m ( 9 9 . 1 6 % ) ( C h i l e )

A l u f l e x ( 7 5 . 9 6 % ) ( A r g e n t i n a )

I n g e w a l l ( 9 9 . 1 6 % ) ( C h i l e )

F i c a p ( 1 0 0 . 0 0 % ) ( B r a z i l )

A r m a t ( 1 0 0 . 0 0 % ) ( C h i l e )

I n d e c o ( 1 0 0 . 0 0 % ) ( P e r u )

O p t e l ( 5 0 % ) ( B r a z i l a n d A r g e n t i n a )

M a d e c o - C h i l e ( 1 0 0 . 0 0 % )

D e c k e r - I n d e l q u i ( 9 9 . 3 0 % ) ( A r g e n t i n a )

Company Overview:Revenues (1H2001)

Business Unit Breakdown

Regional Breakdown

Total Consolidated Revenues *Ch$190,969 million (US$304 million)

* In constant real pesos of June 30, 2001 Exchange rate US$1.00 = Ch$629.00

Wire and Cable62%Brass Mills

20%

Flexible Packaging

11%

Aluminum Profiles

8%Exports

19%

Brazil41%

Chile22%

Argentina12%

Peru5%

Company Overview:Consolidated Income Statement: 1Q00 - 2Q01

* In constant real pesos of June 30, 2001

VOLUME 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01Tons 34,547 36,252 36,939 37,262 45,475 42,415Kms 34,088 86,218 138,815 166,017 183,350 312,890

Ch$ millon *1Q00 2Q00 3Q00 4Q00 1Q01 2Q01

Revenues 68,741 73,517 80,446 84,743 89,369 101,600Cost of Goods Sold (60,892) (64,492) (70,183) (73,076) (76,144) (87,571)Gross Income 7,849 9,025 10,263 11,667 13,225 14,029 Gross Margin 11.4% 12.3% 12.8% 13.8% 14.8% 13.8%SG&A Expenses (7,154) (7,104) (7,570) (6,837) (7,372) (8,846) % Revenues -10.4% -9.7% -9.4% -8.1% -8.2% -8.7%

Operating (Loss) Income 695 1,921 2,693 4,830 5,853 5,183 Operating Margin 1.0% 2.6% 3.3% 5.7% 6.5% 5.1%Non Operating (Loss) Income (6,202) (6,751) (3,691) (11,914) (4,532) (10,259)Income Tax 466 165 111 736 (1,926) (1,819)Minority Interest and Others (182) 114 102 (131) (178) (1,224)Net (Loss) Income (5,223) (4,551) (785) (6,479) (783) (8,119)

Company Overview:Trends - Revenues and Operating Income

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Company Overview:Trends - SG&A as %Revenues & Operating Margin

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Company Overview:Trends - Headcount and Productivity

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Company Overview:Madeco’s Strategic Initiatives

Focus on core businesses

Consolidate activities and maximize synergies through

coordination

Improve productivity and efficiency of operations

Strengthen customer-oriented culture in order to best

meet the needs of our clients

Enhance computer automation and information systems

Reduce consolidated debt level through internally

generated funds, the sale of non-strategic assets and

controlled investment activities

Santiago(15,100 tons)

Buenos Aires (2)(17,690 tons)

Salvador de Bahia

(18,000 tons)

Sao Paulo(28,500 tons)

Rio de Janeiro (2)(18,000 tons)

(1,000,000 kms)

Lima(11,880 tons)

DGMs : Durable Goods Manufacturers

Wire & Cable:Products and Plants

Product Family Sector/ Use Copper

Copper rod Raw material Bare wire Energy (69kV or more) Building wire Construction Thermo-stable Energy (5 - 46kV)/ Mining Thermo-plastic Energy (0.3 - 2kV)/ Mining/ DGMs/ Construction Telcom Telecommunications Magnetic DGMs

Aluminium

Aluminium rod Raw material Bare wire Energy (69kV or more) Thermo-stable Energy (5 - 46kV) Thermo-plastic Energy (0.3 - 2kV)

Optical fiber Telecommunications


+ Calculations based on net sales revenues prior to intercompany eliminations

MARKET SHARE‡ 2000

Chile 34%Argentina 8%Peru 48% Brazil-Metal 21%Brazil- Optical Fiber 18%

‡ Sources: Estimates based on Company reports, import and export reports, competitors’ reports, reports from Cochilco, Colada Continua and Cobrecon

Wire & Cable:Summary of Results

Argentina8%

Optical Fiber24%

Peru13%

Chile16%

Brazil39%

Ch$ millon *

1H2000 1H2001Revenues 75,841 118,040 Cost of Goods Sold (70,213) (98,449) % Revenues 92.6% 83.4%Gross Income 5,628 19,591 Gross Margin 7.4% 16.6%SG&A Expenses (7,290) (9,404) % Revenues 9.6% 8.0%Operating (Loss) Income (1,662) 10,187 Operating Margin -2.2% 8.6%

VOLUMEMetal (Tons) 39,074 54,680 Optical Fiber (Kms) 120,306 496,240

Revenue Breakdown+1H2001

Maximize productivity and revenues through capacity

utilization optimization and coordinated regional sales efforts

Develop cable products for new applications

Implement a standardized cost and production control system

across the four countries

Exploit regional synergies in the procurement of supplies

Further decrease SG&A expense levels

Restructure Brazil’s and Argentina’s operations

Wire & Cable:Strategic Actions

Santiago (2)(117,500 tons)

Buenos Aires (3)(18,900 tons)

Quilpue(7,800 tons)

Brass Mills:Products and Plants

Product Family Sector/ Use Copper

Pipes Construction/ Electric components /DGMs Sheets Construction/ Decoration/ Thermal isolation Busbars Energy/ Industry

Brass

Pipes Construction Bars Electric components/ Fixtures Sheets Ornamentation Wires Sponges/ Zippers

Aluminium

Sheets Packaging/ Ducts Disks Pots and pans

Coin blanks Central banks



Chile67%

Argentina11%

Coin Blanks

17%


Chile 66%Argentina 24%Coins

15%

Brass Mills:Summary of Results



‡ Sources: Estimates based on Company reports, import and export reports, competitors’ reports, public and private coin bids

Ch$ millon *

1H2000 1H2001Revenues 33,489 37,260 Cost of Goods Sold (28,305) (32,886) % Revenues 84.5% 88.3%Gross Income 5,184 4,374 Gross Margin 15.5% 11.7%SG&A Expenses (3,224) (3,139) % Revenues 9.6% 8.4%Operating (Loss) Income 1,960 1,235 Operating Margin 5.9% 3.3%

VOLUMEMetal (Tons) 19,555 25,169

Focus special commercial efforts on export markets

Develop copper pipes as an alternative to PVC in Argentina

and Uruguay

Develop new products: fittings and silver-plated busbars

Improve logistics in production, warehousing and delivery to

decrease inventory level and working capital

Maximize efficiency in copper pipe production

Increase annual production capacity with minimal investment

levels

Improve quality control processes

Brass Mills:Strategic Actions


San Luis(6,500 tons)

Flexible Packaging:Products and Plants

Product Families

Rotogravure printing

Flexographic printing

Consumer products

* Aluminum foil

* Plastic wrap

Argentina38%

Chile62%


Chile 26 %Argentina

6%

‡ Sources: Estimates based on Company reports, import reports, competitors’ reports and supermarket sales statistics

Flexible Packaging:Summary of Results



Ch$ millon *1H2000 1H2001

Revenues 21,868 21,318 Cost of Goods Sold (18,684) (20,154) % Revenues 85.4% 94.5%Gross Income 3,184 1,164 Gross Margin 14.6% 5.5%SG&A Expenses (1,556) (1,653) % Revenues 7.1% 7.8%Operating (Loss) Income 1,628 (489) Operating Margin 7.4% -2.3%



Flexible Packaging:Strategic Actions

Improve coordination and logistics in production,

warehousing and delivery

Reduce scrap levels from 23% to 18%

Focus on innovation by developing niche products in order to

provide long term differentiation vs. competitors

Focus the entire organization towards the client in order to

improve customer service and relations

Foster a culture of continuous improvement, in order to make

constant gains in quality and reductions in the cost structure


Aluminum Profiles & Curtain Walls:Products and Plants

Product Family Sector /Use Window and door frame profiles Construction Industrial profiles DGMs Curtain walls Commercial construction


Aluminum Profiles

81%

Curtain Walls19%

Aluminum Profiles & Curtain Walls :Summary of Results



‡ Sources: Estimates based on Company reports, import and export reports, economic statistics, reports from the Camara Chilena de la Construccion and competitors’ reports


Aluminum Profiles 65 %Curtain Walls

15%

Ch$ millon *1H2000 1H2001

Revenues 11,061 14,351 Cost of Goods Sold (8,182) (12,226) % Revenues -74.0% 85.2%Gross Income 2,879 2,125 Gross Margin 62.6% 13.3%SG&A Expenses (2,187) (2,022) % Revenues -19.8% 14.1%Operating (Loss) Income 692 103 Operating Margin 4.0% -16.6%



Aluminum Profiles:Strategic Actions

Maintain market leadership through close relationships with

the entire commercial chain:

Real estate developers, construction companies, architects, distributors, and installers

Improve profitability through price level recovery to

international standards and the introduction of higher value-

added products (Superba line)

Make continuous technological updates both in terms of

production and products

Increase per capita consumption through new product

development, product substitution and new aluminum profile

applications

Curtain Walls:Strategic Actions

Strengthen organization in order to improve project execution,

administration and control procedures

Increase competitiveness through productivity gains and

reduced operating costs

Be an important player in the Chilean curtain wall industry

CORPORATE PRESENTATION August 2001 Wire & CableBrass MillsProfilesFlexible Packaging.

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Transcript of CORPORATE PRESENTATION August 2001 Wire & CableBrass MillsProfilesFlexible Packaging.