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CORPORATE PRESENTATION August 2001 Wire & CableBrass MillsProfilesFlexible Packaging
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Contents n Company Overview n Business Units Overview and Highlights: Wire & Cable Brass Mills Flexible Packaging Aluminum Profiles & Curtain Walls
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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
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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$629.00 Wire and Cable 62% Brass Mills 20% Flexible Packaging 11% Aluminum Profiles 8% Exports 19% Brazil 41% Chile 22% Argentina 12% Peru 5%
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Company Overview: Consolidated Income Statement: 1Q00 - 2Q01 * In constant real pesos of June 30, 2001
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Company Overview: Trends - Revenues and Operating Income Ch$ million Revenues Operating Income Ch$ million
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Company Overview: Trends - SG&A as %Revenues & Operating Margin SG&A as % Revenues Operating Margin %
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Company Overview: Trends - Headcount and Productivity Headcount Productivity
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Company Overview: Madeco’s Strategic Initiatives 4 Focus on core businesses 4 Consolidate activities and maximize synergies through coordination 4 Improve productivity and efficiency of operations 4 Strengthen customer-oriented culture in order to best meet the needs of our clients 4 Enhance computer automation and information systems 4 Reduce consolidated debt level through internally generated funds, the sale of non-strategic assets and controlled investment activities
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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
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* In constant real pesos of June 30, 2001 + 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 Argentina 8% Optical Fiber 24% Peru 13% Chile 16% Brazil 39% Revenue Breakdown+ 1H2001
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+ 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
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Santiago (2) (117,500 tons) Buenos Aires (3) (18,900 tons) Quilpue (7,800 tons) Brass Mills: Products and Plants DGMs : Durable Goods Manufacturers
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Revenue Breakdown+ 1H2001 Chile 67% Argentina 11% Coin Blanks 17% MARKET SHARE‡ 2000 Chile 66% Argentina 24% Coins 15% Brass Mills: Summary of Results * In constant real pesos of June 30, 2001 + Calculations based on net sales revenues prior to intercompany eliminations ‡ Sources: Estimates based on Company reports, import and export reports, competitors’ reports, public and private coin bids
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+ 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
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Santiago (13,000 tons) San Luis (6,500 tons) Flexible Packaging: Products and Plants
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MARKET SHARE‡ 2000 Chile26 % Argentina 6% ‡ Sources: Estimates based on Company reports, import reports, competitors’ reports and supermarket sales statistics Flexible Packaging: Summary of Results * In constant real pesos of June 30, 2001 + Calculations based on net sales revenues prior to intercompany eliminations Revenue Breakdown+ 1H2001
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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
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Santiago (16,800 tons) Aluminum Profiles & Curtain Walls: Products and Plants DGMs : Durable Goods Manufacturers
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Aluminum Profiles & Curtain Walls : Summary of Results * In constant real pesos of June 30, 2001 + Calculations based on net sales revenues prior to intercompany eliminations ‡ Sources: Estimates based on Company reports, import and export reports, economic statistics, reports from the Camara Chilena de la Construccion and competitors’ reports MARKET SHARE‡ 2000 Aluminum Profiles65 % Curtain Walls15% Revenue Breakdown+ 1H2001
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Aluminum Profiles: Strategic Actions + Maintain market leadership through close relationships with the entire commercial chain: F 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
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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
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