[Presentation Title/Subject] - Sigdo Koppers · Industrial assets. Technical training organization...

May 2017

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

Gla

nce

121(2)

SK ComercialIngeniería y

ConstrucciónEnaex Magotteaux

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

Enaex Magotteaux SK Comercial

SKBergéPuerto

VentanasCHBBSK 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 other institutional investors; 4,37%

Corporate Governance

Ownership StructureBoard of Directors

Source: Santiago Stock Exchange. (1) Last 12 month

Corporate PresentationSigdo 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

Gla

nce

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

order 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

of CSR under ISO 26.000 certification

At a

Gla

nce

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 .

Str

ate

gic

focus o

n t

he m

inin

g a

nd industr

y

Anglo American - Minera Los Bronces:

…

MINING OPERATION SALES & LOGISTICSMINING

DEVELPOMENT

1 3 42

1 2 3 4+ + +

BHP Billiton - Minera Escondida:

1 2 3 4+ + +Codelco – Andina:

1 2 3+ +

8

ICSKIndustrial Construction Services

Puerto

VentanasICSK

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

of 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

9

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

operation, long

term

maintenance

of their

productive

assets and

operation of

Industrial

assets.

Technical

training

organization

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

VentanasICSK



10

Puerto VentanasLogistics and transport

▪ Leading private port in the central region of

Chile

▪ Puerto Ventanas engages in two lines of

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 offer 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

VentanasICSK



11

Puerto VentanasLogistics and transport

.

Port Business

Loading & unloading

Warehousing

Railroad

Business

Puerto

VentanasICSK



12

EnaexRock fragmentation services

▪ Founded in 1920, Enaex is the most importantproducer of ammonium nitrate, miningexplosives and provider of integral rock-breakingservices in Chile and Latin America

▪ The company is vertically integrated in its mostimportant raw materials and conducts virtuallyall 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 CarbonEmission Project in Chile. The greenhouse gasemission rights have been assigned toMitsubishi

▪ In 2015 Enaex acquired Britanite (Brazil) andDavey Bickford (France)

Consolidated Sales(US$ millons)

Source: Enaex

Puerto

VentanasICSK



13

▪ 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%

of MkSh

Services and Explosives

(Chile)International BusinessPetrochemical Area

Puerto

VentanasICSK



▪ 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

14

▪ 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

MagotteauxHigh 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

VentanasICSK



15

MagotteauxHigh 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

33.22.5

9.0

9.7 6.5

9.0

Castings Scaw Metals – Technical Assistance

60.050.0

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

VentanasICSK



16

CHBBCompañía de Hidrogeno del Bío Bío S.A.

▪ Compañía de Hidrógeno Bio Bio S.A. (CHBB) owns a

highly pure hydrogen production plant that supplies

only 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 GodeliusCompañía 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

VentanasICSK



17

▪ 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

out 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 ComercialSale, Rental and Service of machinery

Consolidated Sales(US$ millions)

Source: SKC

Puerto

VentanasICSK



18

Services and Parts

Machinery Rental

Machinery Distribution

Puerto

VentanasICSK



19

SKBergéAutomotive Sales

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

Bergé Group (Spain) to develop the business

of the representation, sale and distribution

of 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

VentanasICSK



20

SKBergé – Brand representation by Country

Perú

Argentina

Chile

Colombia

Puerto

VentanasICSK



22

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

.

23

Successfu

l In

dustr

ial his

tory

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 ofPlastic films

production initiated

through

Foundation of our

Rental business

Acquisition of

Acquisition of

Starts its

operations

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


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)

Ste

ady G

row

th &

Consis

tent

Pro

fita

bili

ty2 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

over our investments

25

Ste

ady G

row

th &

Consis

tent

Pro

fita

bili

tyCorporate 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 ✓ ✓


Str

ate

gic

focus o

n t

he m

inin

g a

nd industr

y3

Source: Company

Investment approach

27

Corporate Presentation |Investment approach

Our clients – Mining and Industrial Blue Chip companiesF

oco

Estr

até

gic

o e

n la M

ine

ría

e I

ndu

str

ia3

Str

ate

gic

focus o

n the m

inin

g a

nd industr

y3

28


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 approachG

lobal N

etw

ork

4

29

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

#1Worldwide 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 .

#3Worldwide grinding

media balls producer

14%market share in high-

crome balls for the mining

industry

Others5%

Orica30%

65%

Le

ad

ers

hip

in a

ll busin

ess a

reas

5

30

Leadership of our subsidiariesMarket 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%of 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)

Le

ad

ers

hip

in a

ll busin

ess a

reas

5

Fork Lift 21%

Telescopic handler 24%

Articulated Trucks 47%

Tractors 22%

31

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


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

Con

serv

ative

Fin

ancia

lpositio

n6

Asesores Financieros

Corporate Presentation

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