CEMENTOS ARGOS First Half 2010 Results July 30 th , 2010
DISCLOSURE This document contains forward-looking statements relating to Cementos Argos S.A. and its subsidiaries (Argos) based upon management projections. These projections reflect Argos’ opinion on future events that may be subject to a number of risks, uncertainties and assumptions. Various factors may cause actual results to differ from those expressed herein. Argos assumes no obligation to update or correct the information contained in this presentation. Cementos Argos 1H2010 Results – July 2010 2
Content 1. Overview 2. Consolidated Results 2.1 Colombia 2.2 United States 2.3 The Caribbean 2.3 The Caribbean 2.4 Other Businesses 3. Debt Profile 4. Portfolio Cartagena Plant Cementos Argos 1H2010 Results – July 2010 3
Executive Summary � Cemento Panamá, a subsidiary of Cementos Argos, signed a contract with the “Grupo Unidos por el Canal” consortium to supply cement and cementitious materials for the Atlantic Side of the Panama Canal expansion � Cementos Argos successfully started to produce and sell oil well cement, derived from our fully-integrated cement plant in San Gil, Santander in Colombia � Colombia Regional Division responding in line with infrastructure developments in the country � YTD to 1H 2010 Cementos Argos in Colombia has been awarded around 3.8 million cubic meters in ready � YTD to 1H 2010 Cementos Argos in Colombia has been awarded around 3.8 million cubic meters in ready mix contracts to be dispatched within the next 24 to 36 months � Slower-than-expected recovery in the United States. Volumes increasing in 2Q, however, significant decrease in prices impacting negatively revenues in this first half � Cementos Argos’ 1H10 consolidated revenues registered COP$ 1.5 billion (US$ 757 million) , EBITDA achieved COP$ 275K million (US$ 141 million) Cementos Argos 1H2010 Results – July 2010 4
Consolidated Results April - June First Half Var. (%) Thousand million COP$ 2010 2009 Var. (%) 2010 2009 Var. (%) Q2 / Q1 2010 Revenues 774 853 (9,2) 10,7 1.474 1.808 (18,5) Costs & SG&A 700 762 (8,1) 6,7 1.356 1.649 (17,7) Operating Profit 74 91 (18,4) 70,8 117 159 (26,2) EBITDA 153 177 (13,4) 25,1 275 333 (17,5) EBITDA Margin (%) 19,7 20,7 18,7 18,4 Million US$ 397 382 4,0 10,3 757 778 (2,6) Revenues Costs & SG&A 359 341 5,2 6,4 697 709 (1,8) Operating Profit 38 41 (6,7) 68,8 60 68 (11,7) EBITDA 78 79 (1,0) 24,5 141 144 (1,6) EBITDA Margin (%) 19,7 20,7 18,7 18,5 Cementos Argos 1H2010 Results – July 2010 5
Balance Sheet Balance Sheet Structure at june 2010 Assets 11% 16,0 13% Short Term Minority 0,1 Interest 14,0 Permanent Investments* 12,0 35% PP&E* Shareholders’ billion 10,0 41% 10,3 Equity Other Long Term COP$ b 8,0 8,0 14,8 Liabilities 6,0 4,0 Financial Oblig. 13% 19% Short Term 4,5 Liabilities 2,0 Other Short Term 13% 0,0 Bonds Assets Liab. & Equity 27% Financial Oblig. Long Term 28% Other Long Term * Include appraisals Cementos Argos 1H2010 Results – July 2010 6
Colombia Regional Division Colombia Cementos Argos - Enero, 2010 7
Colombia Regional Division Revenues EBITDA EBITDA Margin (%) Thousand Million COP$ Thousand Million COP$ 1.000 340 31,4 820 -10% 800 734 2010 33,3 -8% 251 255 231 29,6 380 600 369 124 124 -3% -3% 170 123 -1% 400 30,6 2009 32,6 85 440 200 365 126 108 28,8 -17% -15% 0 0 0 10 20 30 40 2009 2010 2009 2010 1H 2Q 1Q 1Q 2Q 1Q 2Q Cementos Argos 1H2010 Results – July 2010 8
Colombia Regional Division Cement and Ready-Mix Volumes Cement Ready Mix Tons 000 m 3 000 2.500 1.400 +1.5% 1.965 1.937 2.000 1.200 1.000 +37% 1.500 821 968 1.037 800 800 +7% +7% 597 1.000 424 600 +42% 300 400 500 968 928 -4% 200 396 297 +33% 0 0 2009 2010 2009 2010 1Q 2Q 1Q 2Q Cementos Argos 1H2010 Results – July 2010 9
Colombia Regional Division YTD to June, Cementos Argos has been awarded around 3.8 million cubic meters in ready mix contracts to be dispatched within the next 24 to 36 months Cartagena Refinery Expansion Distribution of the 3.8 million m 3 Awarded La Línea Tunnel Porce III 5% 6% Road Hidrosogamoso 6% Hydroelectric 7% Industry 52% Water / Sewage Bridge / Tunnel 24% Ports / Airports Argos’ Cement Plant Some of the projects where Argos is present Cementos Argos 1H2010 Results – July 2010 10
United States Regional Division United States Cementos Argos - Enero, 2010 11
United States Regional Division Revenues EBITDA Ready-Mix Volumes Million US$ Million US$ m 3 000 23 300 2.500 242 -3% 250 -18% 1.881 18 2.000 1.826 15 198 200 124 13 1.500 954 1.026 1.026 150 150 109 109 11 +8% -12% 1.000 8 100 -90% 2 118 500 50 3 927 89 800 5 -76% 3 -25% -14% -1 0 0 -2 2009 2010 2009 2010 2009 2010 1Q 2Q 1Q 2Q 1Q 2Q Cementos Argos 1H2010 Results – July 2010 12
United States Regional Division PCA’s 2010 summer forecast shows very positive figures for cement consumption growth for the midterm in the states where Argos has operations Cement Consumption Variation State / Year 2009 2010E 2011E 2012E 2013E 2014E Georgia -40,4% 0,6% 21,6% 32,9% 20,0% 13,8% North Carolina -31,2% 2,2% 19,0% 21,6% 14,6% 7,4% South Carolina -33,8% 12,2% 22,2% 23,0% 14,3% 9,4% Virginia Virginia -24,4% -24,4% 4,1% 4,1% 16,9% 16,9% 17,0% 17,0% 12,3% 12,3% 8,4% 8,4% Southeast Zone -33,3% 3,6% 19,7% 24,2% 15,8% 10,2% Arkansas -20,0% 12,0% 14,7% 13,1% 9,5% 6,3% Texas -32,3% 8,4% 12,9% 11,1% 9,3% 7,8% Gulf Zone -31,5% 8,7% 13,1% 11,2% 9,3% 7,7% Total 6 States -32,2% 6,9% 15,4% 15,9% 11,8% 8,7% Source: Portland Cement Association Summer Forecast 2010 E: Estimate Cementos Argos 1H2010 Results – July 2010 13
Caribbean Regional Division The Caribbean Cementos Argos - Enero, 2010 14
Caribbean Regional Division Revenues EBITDA EBITDA Margin (%) Million US$ Million US$ 50 200 20,5 -7% 40 2010 20,5 157 146 -9% 33 150 20,5 30 30 75 78 78 18 18 100 16 +3% 20 -10% 20,8 2009 23,5 50 10 82 68 15 18,3 14 -17% -7% 0 0 0 10 20 30 40 2009 2010 2009 2010 1H 2Q 1Q 1Q 2Q 1Q 2Q Cementos Argos 1H2010 Results – July 2010 15
Caribbean Regional Division Cement and Ready-Mix Volumes Cement Ready Mix* Tons 000 m 3 000 350 2.000 1.633 300 -21% 245 1.500 -19% 250 1.283 199 841 200 117 1.000 1.000 648 648 150 97 -23% -17% 100 500 792 128 635 102 50 -20% -21% 0 0 2009 2010 2009 2010 1Q 2Q 1Q 2Q * Operations from Concreto Panamá Cementos Argos 1H2010 Results – July 2010 16
Caribbean Regional Division Panama GDP annual var. (%) The IMF expects a strong recovery 12,1 for 2011, being infrastructure 9,2 8,5 7,5 development an important catalyst 6,9 6,3 5,0 4,2 2,4 2,2 0,6 01 02 03 04 05 06 07 08 09E 10E 11E Dominican Republic GDP annual var. (%) Haiti GDP annual var. (%) 10,7 7,0 9,3 8,5 3,4 2,9 2,3 1,8 6,0 0,8 5,8 0,4 5,3 3,5 3,5 -0,3 -1 1,8 1,3 -3,5 -0,3 -8,5 01 02 03 04 05 06 07 08 09 10E 11E 01 02 03 04 05 06 07 08 09 10E 11E Source: IMF – May 2010 Cementos Argos 1H2010 Results – July 2010 17
Debt Profile / Cash Flow Debt Profile Cementos Argos - Enero, 2010 18
Short Term vs. Long Term COP vs. USD 31% 33% Long Term COP Short term USD 67% 69% Consolidated Cost of Debt (%) Ratios Net Debt 10,6 10,1 = 3.79 9,3 8,6 8,6 8,3 EBITDA + Dividends 7,6 7,7 7,3 6,9 6,8 6,6 6,2 LTM EBITDA 2,7 2,4 2,4 2,4 2,4 2,4 2,0 1,9 1,7 1,8 1,7 1,7 1,7 = 2.81x Financial Expense Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Abr-10 May-10 Jun-10 Debt = 24.5% Equity COP USD Cementos Argos 1H2010 Results – July 2010 19
Cash Flow Dec. 09 – Jun. 2010 Million US$ + 141 - 44 316 229 + 135 - 124 - 5 + 2 - 54 - 16 - 121 Cash at Financial Dividends, Other Debt Cash at Caja Inicial EBITDA Var.Capital de Capex Imptos Gtos Dividendos Otros No Operaciones Desinversion Caja Final EBITDA WK CAPEX Taxes Divestiture Dec. 09 Expense Net Non-Op. Amort. Jun. 10 Trabajo Financ. Neto Operac. Financiacion Cementos Argos 1H2010 Results – July 2010 20
Portfolio Cementos Argos and Stock Non-Cement Portfolio Performance Cementos Argos - Enero, 2010 21
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