LLX Logística S.A.
July, 2008
LLX Logística S.A.
July, 2008
2
This presentation relating to LLX Logística S.A. (“LLX”) includes “forward-looking statements”, as that term is defined in the Private Securities Litigation Reform Act of 1995, in Section 27A of the Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All statements other than statements of historical facts are statements that could be deemed forward-looking statements and are often characterized by the use of words such as “projects”, “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, “may”, “will”, or “intends”, or by discussions or comments about our objectives, strategy, plans or intentions and results of operations. Forward-looking statements include projections regarding our operating capacity, operating expenditures, capital expenditures and start-up dates.
By their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. The risk exists that these statements may not be fulfilled or, even if they are fulfilled, the results or developments described in such statements may not be indicative of results or developments in future periods. We caution participants of this presentation not to place undue reliance on these forward-looking statements as a number of factors could cause future results to differ materially from these statements.
Forward-looking statements may be influenced in particular by factors such as the ability to obtain all required regulatory approvals and licenses on a timely basis or at all, and changes in economic, political and regulatory conditions. We caution that the foregoing list is not exhaustive. When relying on forward-looking statements to make decisions, investors should carefully consider these factors as well as other uncertainties and events.
LLX does not undertake to update our forward-looking statements unless required by law. This presentation is neither an offer to sell (which can only be made pursuant to definitive offering documents) nor a solicitation of an offer to buy any securities in the United States, or any other jurisdiction. The securities referred to herein have not been registered in any jurisdiction, and in particular, will not be registered under the U.S. Securities Act of 1933, as amended, or any applicable state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without LLX’s prior written consent.
Investor Relations
Ricardo Antunes – CEO
Antonio Castello Branco – Manager
Tel. 55 21 2555-5661
Disclaimer
1. Overview
4
EBX´s publicly held companies
All companies are listed in BOVESPA´s Novo Mercado Corporate Governance
segment, totaling a market capitalization of US$ 32.3 Bi*.
Core Business: Logistics
Controlling Shareholder:
57%
Core Business: Power Generation
Market Cap: US$ 3.5 bi*
Controlling Shareholder:
76%
Core Business: Oil & Gas
Market Cap: US$19.1 bi*
Controlling Shareholder:
61%
Core Business: Mining
Controlling Shareholder:
67%
*Source: Broadcast as of July, 8th 2008
Market Cap**:US$9.7 bi*
Market Cap**:US$9.7 bi*
**Including Iron X Market Cap.
5
LLX Corporate Overview after restructuring
(1) Eike Batista and Management
51%
43%
LLX Minas-Rio LLX Açu
70%
30%
Centennial
Logística
57%
LLX Brasil LLX Sudeste
Controlling
Shareholders + Minority Shareholders(1)
70% 70%
30%30%
49%
MMX Minas-Rio
100%
6
Ports strategically located in the Southeast Region of Brazil
Large back-areas
Port-Industry Integration
Connected to existing Highway and Railway network
UniquePortfolio
Enough cargo to anchor LLX´s ports (MoUs already signed)
Back-bone for investments of the EBX´s Companies through long term contracts
Logistics Integration is a priority for the Brazilian government
Brazilian ports are operating almost at full capacity
Ports are currently a bottleneck for Brazilian exports growth
Continuous pipeline of new projects
Deeper draft allows larger vessel to berth, decreasing ocean freight
Private ports are not subject to public port charges (TUP and OGMO)
Higher productivity due to latest generation of port equipments
LLX Highlights
Long Term Contracts
Growth Potential
Low Operating Costs
Ports business has been developed since 2005
“Super Port” Açu under construction
Business Development
7
LLX´s ports strategic location
LLX Port´s hinterland concentrates
75% of the Brazilian GDP
Country GDP 2006 (US$ Billion)
Brazil 1.067,7
Russia 984.93
South Korea 888.3
India 886.9
Mexico 840.0
LLX´s hinterland area 780.5
Australia 754.8
Netherlands 663.1
Belgium 393.6
Turkey 392.4
Sweden 385.3
Source: IMF.
Port Açu
Port SudestePort Brasil
2%
34%
6%
Mixed-use terminal sized to berth carriers up to 220,000 tons (Draft: 18.5m)
Location Back-area Main Products
"Super Port" AçuSao Joao
da Barra,
RJ
7,800 ha
Iron Ore from MMX Minas-Rio
pipelines and third parties
railway, steel products, coal,
granite, LNG and containers.
Port Sudeste Itaguaí
Industrial
Area, RJ
52.1 ha Iron Ore
"Super Port"
BrasilPeruibe, SP
1,900 ha
(maritime
structure with
50 ha)
Containers, iron ore,
agricultural bulk, liquid bulk
and fertilizers
8
Favorable Industry Fundamentals
Source:IPEADATA / BCB e Merril Lynch
Investments in ports are needed to meet the growth of Brazil´s foreign trade.
Economic Openness – Trade Flow / GDP 2006
Source: SECEX/Ministério do Desenv. Ind e Comercio Exterior
Brazil Trade Flow
(US$ billion)
60 73 96 118 138 1614748
6374
91121
107 121
159192
229282
2002 2003 2004 2005 2006 2007
Exports Imports
CAGR (2002-2007E): 21%
Brazilian Ports’ Capacity Utilization
Source: Antaq Report 2007
(berth hours utilized / berth hours available)
97% 93% 91%
80%
Itajaí São Francisco
do Sul
Rio Grande Santos
Economics Opennes - Trade Flow 2006
18% 21%34% 38%
50% 54%62% 66% 67% 71%
Bra
zil
2000
Bra
zil
India
Arg
entina
Indonesia
Venezu
ela
Mexic
o
Chile
Chin
a
Kore
a
Source: IMF
Economics Openness- Trade Flow 2006
Infrastructure Underinvestment in Brazil
0
20
40
60
80
100
120
140
160
180
1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006
Brazil exports Brazil imports Investments in infrastructure
9
Experienced Management Team
OfficerOfficer ExperienceExperience
Ricardo Antunes
CEO
Engineer Degree from PUC-RJ and Master´s degree from the Imperial College in London.
23 years of experience at CVRD
Former CEO of Rio Doce International
Co-founder of MMX
Eliane Aleixo Lustosa
Chief Financial Officer
Masters degree in Economics from PUC-RJ and PhD in Finance. Held Yale Universitiy´scertificate in Corporate Governance.
Government experience at BNDES, Ministry of Finance and as Director of Brazil´s Antitrust Agency. Former VP and CFO of Grupo Abril, Globex and Petrobras Pension Fund (Petros).
Current board member of the Brazilian Institute of Corporate Governance (IBGC). Former board member of several public companies (Perdigão, CPFL, Coteminas, Telet, Americel and Tele Norte Celular).
José Salomão
Chief Development Officer
Mechanical Engineer (UFES) and MBA in COPPEAD/UFRJ
23 years of experience in the design, implementation and operation of port terminals (iron ore, coal, pig iron, fertilizers, agricultural baul, containers and general cargo).
Held executive positions in Porto de Tubarão, Porto de Praia Mole, TVV, Pasha Terminal – Los Angeles, Docenave and Brasil Ferrovias.
Luis Alfredo Osório de Castro
Chief Implementation Director
Civil Engineer (UGF/RJ) and MBA from FGV/RJ. Project Management (PMI) certificate from FIA/USP.
30 years experience in implementing infrastructure projects (urban projects and port terminals); power plants and industrial facilities at Pronil, OAS and Brascan.
Eike Fuhrken Batista
Chairman and Founder
Founder and CEO of EBX, entrepreneurial conglomerate founded in 1983
10
LLX Ports – Lower Ocean Freight
Solid and LiquidBulks
Using full Panamax (70 m dwt) and Capesize (120 to 180 m dwt) rather than Handymax(40 m dwt )
-40% to -75%
-20% to -40%
Deeper draft allows larger vessels to berth, decreasing ocean freight.
ContainersProcessing Industries, Auto Parts,
Food, Pulp and Paper, amoung
othes.
Using container vessels of 8 to 12 thousand TEUs instead of 1.5 thousand
to 3 thousand TEUs
11
1,5
IronIron Ore Ore TerminalsTerminals: : IdleIdle TimeTime
ReferenceIndex
Vale
15 -20%
< 2%
ThousandThousand TEUTEU’’s/m linear s/m linear berthberth
Reference Index
Santos Brasil
1,3
BackBack AreaArea: TEU: TEU’’s/ms/m²²
Reference Index
Vitoria
4,2
7
Continuous economic growth in the last years has shown Brazil’s lack of infrastructure, especially in ports and transportation.
Most Brazilian ports are operating above their nominal capacity, causing long queues and increased costs for both inbound and outbound cargoes.
The situation is most critical in the country’s southeast region, hampering growth of the burgeoning export of commodities and industrial products as well as most needed imports growth.
Ports Operations almost at Full Capacity
Source: Drewry’s Reports 2007 and Companies reports.
LLX´s port will be an alternative to help debottlenecking the sector in Brazil
12
LLX Timeline
2006 2008 20092007 2010 2011 2012
Bra
sil
Aç
uS
ud
es
te
Development
Detailing of the project
Environmental
License
Development
Project begin to be developed
Development
Project begin to be developed
Development
ANTAQ authorization
Construction License
Operations
Start up
LLX is carved out of MMX and begins operations as an independent company
Anglo American buys 49% stake in LLX Minas-Rio
OTPP acquired 15% of LLX Logística
Development
Environmental License
Development
EnvironmentalLicense
Min
as
-R
io
Development
Detailing of the project
Environmental License
Development
Construction License
ANTAQ authorization
Development
Construction License
ANTAQ authorization
Development
Construction License
ANTAQ authorization
Operations
Start up
Operations
Start up
Operations
Start up
Operations
Start up
Construction
Construction Begins
Construction
Construction begins
Construction
Completion
Construction
Construction begins
Construction
Construction begins
2. Projects
2A. Port Açu
15
Port AçuLocation and Logistic Integration
45 km of new railway track
will connect
Port Açu to the
Brazilian railway system.
MMX SE
Port Açu
Port Sudeste
16
Port AçuLLX Minas-Rio (Ore) / LLX Açu (non-Ore)
• Connecting bridge / Access channel
7,500 ha of adjacent industrial complex
Right to use LLX Minas Rio
Offshore Structure including the
construction of additional berths
for :
• Coal ( and dry bulk) discharging;
• Liquid Bulk ;
• Multi use Pier with 4 betrhs for
general cargo, steel , containers
and Supply boats.
LLX ALLX Aççuu
AtlanticAtlantic OceanOcean
LLX MinasLLX Minas--Rio Rio
• 300 ha for Processing, Handling,Storage and Pelletizing
• Breakwater
• 1 berh expandable to 4 for loading iron ore and pellets ;
Offshore Structure including :
Onshore Structure
• Connecting bridge/ Access channel
17
Port AçuUnder construction and attracting important industries
Port Açu construction started in October/2007 and has already 46 MoUs in place
IRON ORE 26.5 Mtpy 1 contract
LIQUID BULK 5.5 M m³ 7 MoUs
CONTAINER 73.4 k TEUs 29 MoUs
COAL/CEMENT 11.2 Mtpy 6 MoUs
STEEL PRODUCTS 8.2 Mtpy 4 MoUs
IRON ORE 26.5 Mtpy 1 contract
LIQUID BULK 5.5 M m³ 7 MoUs
CONTAINER 73.4 k TEUs 29 MoUs
COAL/CEMENT 11.2 Mtpy 6 MoUs
STEEL PRODUCTS 8.2 Mtpy 4 MoUs
18
Port AçuConstruction site
19
Port Açu is located right in front of the largest Brazilian oil basin block (Campos, Santos and Espírito Santo)
20
Iron Ore: Coal: Liquid Bulk (LNG): Steel Products:
Dimension Stone: Containers: Supply Boats:Real Estate:
Up to 63.2 mtpy Up to 15.3 mtpy Up to 4.0 M m 3 py Up to 11.2 mtpy
Up to 1.5 mtpy Up to 330,000 TEUs py Up to 80,000 tons of cargo py Up to 3,300 hectares for rental
Port AçuMain activities
Capex ( for 100% of project )
LLX Minas-Rio: US$ 900 M
Açu Non Ore: US$ 700 M
CapexCapex ( for 100% ( for 100% ofof projectproject ))
LLX Minas-Rio: US$ 900 M
Açu Non Ore: US$ 700 M
21
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
...
...20
32
- - -
20,0
30,3
39,8
62,267,9
77,682,0
93,5
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
...
...20
32
Port AçuVolume and Capex
Source : Verax Feasibility Study as of June 12th 2008
53,2
348,8
766,0
274,5
75,415,1
65,2
38,1
283,6
560,4
17,8
80,7
205,6
DevelopmentDevelopment CapexCapex
Minas-Rio (Iron Ore) US$ 900M
Port Açu Non US$ 700 M
256,7
(*) Tonnage excluding containers
Volume Volume RampRamp upup –– MtpyMtpy **
2B. Port Brasil
23
Port BrasilLocation and Logistic Integration
Port Brasil will be connected by a 1800 km
railway track (ALL) and by a four-lane
highway (Padre Manoel da Nóbrega).
MMX CORUMBA
24
Port Brasil Infrastructure
Back-area: 6 million m2 Island: 500.000 m2Taniguá Industrial Area
13 million m2
Distribution Center
Consolidation andDeconsolidation Center
Depot
Annual Capacity:
• containers: 3,2 million (TEU)
• Iron ore: 20 million (ton)
• Agricultural bulk: 28,9 million (ton)
• Fertilizers: 10 million (ton)
• Liquid Bulk: 7,5 million (ton)
11 berths
Draft of 18.5 m
25
ContainersUp to 3.2 M TEUs py
Iron OreUp to 20.0 mtpy
Liquid Bulk (Ethanol)Up to 7.5 M m3 py
Agricultural BulkUp to 28.9 mtpy
FertilizersUp to 10.0 mtpy
Real StateUp to 600 hectares for rental
Port BrasilMain activities
A new alternative for Brazilian’s commodities
and manufactured exports
SUGAR AND GRAINS BULK 16.6 M tpy 12 MoUsCONTAINER 1.1 M TEUs 5 MoUsETHANOL 22.5 M m3 3 MoUs
26
2,2
97,9
553,2 561,7
346,0
100,3
41,2 35,3
79,8
1,8 -
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
...
...20
32
- - - - -
17,8
27,0
41,145,4 46,5
64,9
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
...
...20
32
Port BrasilVolume and Capex
Volume Volume RampRamp upup -- MtpyMtpy
*
(*) Tonnage excluding containers
Source : Verax Feasibility Study as of June 12th 2008
DevelopmentDevelopment CapexCapex
US$ 1,950 MUS$ 1,950 M
2C. Port Sudeste
28
Port SudesteLocation and Logistic Integration
Currently Transportation contract secured with
MRS and port access with CSN Sepetiba Terminal
until 2011, when port Sudeste starts up.
MMX
Sudeste
MRS
Port
Sudeste
Belo Horizonte
29
Port Sudeste Overview
Railway
Loop
Tunnel
1.18 km
Bridge1.4 km
Berth
Iron Ore Storage
30
- - - -
5,0
10,0
15,0
20,0
25,0 25,0 25,0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
...
...20
32
Port SudesteVolume and Capex
Volume Volume RampRamp upup -- MtpyMtpyDevelopmentDevelopment CapexCapex
US$ 380 MUS$ 380 M
43,949,0
169,1
118,3
- - - - - - -
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
...
...20
32
Source : Verax Feasibility Study as of June 12th 2008
31
EBITDA share per Product and per Port
Source : Verax Feasibility Study as of June 12th 2008
% Total EBITDA% Total EBITDA
@ 2016 @ 2016
32
Main Risks & Mitigants
Main Risks&
Mitigants
Funding Requirements
Long Term (12 years) and attractively priced
Financing by BNDES secured for LLX Minas-Rio
and under negotiated for other ports;
Bradesco firm commitment for US$ 750 M.
Regulatory Risk
Indigeneous Community
Environmental Risk
Experienced procurement team on board;
Rigorous budget controls and contingengy
management;
Modular implementation with initial
investments after LT contracts are locked in.
Business Plan compliant with Port Act (Law 8630/93);
Port Açu has been granted ANTAQ´s Authorization ;
Port Sudeste is a Private Terminal for MMX Sudeste´s own cargo;
Port Brasil´s Business Plan limited 3rd party cargo still delivers a very attractive ROI.
Management expertise
� Seasoned technical team ( permitting
processes of ports in Brasil- for CVRD, CSN...);
EBX Track Record
� MMX, MPX precedents and synergy;
Top consulting firms hired.
More than 90% of the 60 families occupying 10
hectares of Port Brasil have agreed to
reallocate;
Negotiation with FUNAI well underway.
Capex Overruns
Port – Railways Integration
Port Açu - negotiations with FCA are in a very
advanced stage;
Port Brasil - MoU signed with ALL, joint
feasibility study by Sandwell to be completed
by 4T08, for the development of a new corridor
for Central Western region;
Port Sudeste - MRS expansion plan easily
covers the port´s demand.