Investing in Argentina

Investing in Argentina
Industry Approach
Financial Advisory Services
Argentina
November 2017
Content
• Argentina – Country’s Overview

• Industry Snapshot
• Consumer Goods & Retail: Food, Beverages & Tobacco
• Financial Services
• Agribusiness
• Telecommunications, Media & Technology
• Energy
© 2017 Deloitte & Co. S.A. All rights reserved.

Argentina
Country’s Overview
Politic Regime
Argentina
Politic Regime
Politics & Government
System of Government: Federal republic with three

branches of government. Executive (President),
Legislative (Congress) and Judiciary
(Supreme and Lower Courts).
Federal Government:The country is divided into 23

provinces plus the autonomous city of Buenos Aires.
Provinces have their own constitutions and executive,
legislative and judicial branches of government.
Congress: Divided into two houses: the Senate and

the House of Representatives. Members are elected by
popular vote. In the case of the Senate, members are
elected for six-year terms. In the House, members are
elected for four-year terms.
Government Regime
Executive Legislative Judiciary
(President) (Congress) (Supreme & Lower
Courts)
Representatives President - Senate: 72 (3 per Supreme Court: 5
/Members Province + 3 for the members
Buenos Aires City)
- House of
Representatives: 257
Elections Every four years - Senate: mandates Selected by the
based on a two-round last 6 years. Elections president, with the
system: the candidate are held every 2 years Senate approval,
wins if he receives in which 1/3 of the and remain in
either 45% of the vote Senate is voted. charge as long as
or 40% and is 10% - House of they have the right
ahead of the second Representatives: conduct.
candidate. If not, a mandates last 4 years. When a member
run-off takes place. Elections are held every turns 75 years old,
2 years in which half of his is re-named
the chamber is voted. every 5 years, as
long as his is able to
comply with the
charge’s
responsibilities.
Source: National Investment and Trade Promotion Agency information.

Macroeconomic
Factors
Argentina
Macroeconomic Factors (1/2)
GDP Real Growth (%)
4 2,6 2,7 3,3 2,7 2,7 3,4
2,4
2
0
-2 -1
-4 -2,5 -2,2
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
Average Exchange Rate (AR$/US$)

30 23,6
22,22
19,07 20,81
20 14,76 16,6
8,08 9,23
10 4,54 5,46
0
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
Inflation Index (%)
60
38,1 41,4
40 25,3 26,5 26,2
23,4
17
20 10,8 7,9 6,3
0
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
National Reserves (US$ Bn)

60 54,5
43,2
38,4
40 30,5 31,4
25,5
20
0
2012 2013 2014 2015 2016 2017F
Source: EIU and BCRA (Central Bank).

Argentina
Country Risk (%)
12 10,7
9,9
10
7,9
8
5,9
6 4,8
3,6
4
2
0
2012 2013 2014 2015 2016 2017
Trade Balance (US$)

20
15
15
10 6
5 5
5
0
0
-5
-5 -6 -6 -5
-10 -7
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
Fiscal Deficit/GDP (% of GDP)

0
-1 -2,1 -1,9
-2 -2,7
-3,4
-3
-4 -4,8
-5,3
-5 -5,9 -6
-6,3 -6,4
-6
-7
2012 2013 2014 2015 2017 2017F 2018F 2019F 2020F 2021F
Source: Deloitte’s analysis based on EIU, Ambito Financiero, INDEC.

Argentina
Total Foreign Debt (US$ Bn)
300
245 256
250 233
201,4 210,0 222
190,0
200 160,0
150 137,0 147,0 145,0
100
50
0
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F 2022F
Total Public Debt/GDP (% over GDP)

70
54,7 56 57,9 57,2 56,4
60 54,0 54,5 54,4
50 39,4 41,3
36,7
40
30
20
10
0
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F 2022F
Debt Interest Payments/GDP (% of GDP)

4,0 3,7 3,7
3,2
3,0 2,5
1,9 2,1 2,1
2,0 1,6 1,6
1,3
1,0
0,0
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
Source: Deloitte’s analysis based on EIU, Ambito Financiero, INDEC.

Economic Sectors
Argentina
Economic Sectors
Regional Main Activities
Argentina has a highly diversified
economy. It's key sectors are:
Northwest
Agriculture agribusiness, pharmaceuticals,
Mining automobiles, energy & resources
Gas and biotechnology.
Argentina is world leading
producer of foodstuffs: third
Northeast producer of soybean, fourth
Agriculture producer of sunflower and
Forestry
Cuyo
between the largest beef
Mining producers. In addition, it has the
Winery world’s fourth-biggest shale oil
Pampas reserves and the second-biggest
Agriculture shale gas reserves. It is very rich
Cattle Raising in terms of mining resources:
Industry gold, cooper, silver and lithium –
world’s third largest reserves,
behind Bolivia and Chile.
GDP by Activity (2015)

17%
20%
Patagonia
Oil & Gas
Fish 2%
Fruits 2% 13%
3%
3%
3%
10%
The leading industrial sectors 4%
are: food processing, 4%
8%
beverages, chemicals &
4% 7%
pharmaceuticals, oil refining, Manufacturing Wholesale, Reatail & Repairs
motor vehicles and auto parts. Real Estate Logistics

Regarding services, the main Agriculture Financial Services
sectors are wholesale, retail, Public Administration & Defense Education
transport and communications. Health Services Mining
The service sector is the largest Construction Leisure
job creator. Electricity, Gas & Water Other
Source: Deloitte’s analysis based on EIU, INDEC.

Investment Activity
& Foreign Trade
Argentina
Investment Activity
Foreign Direct Investment Stock (US$ B)
160
137,00
140 123,00
120 109,00
99,00 95,00
100 88,00 90,00 83,00
80,00
80 72,00
60
40
20
-
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
Identified Investment Opportunities (US$ B)

The National Government has identified investment opportunities for approximately
US$ 240B across multiple sectors as described below:
Transportation & Federal Power &

Infrastructure Infrastructure & Renewable Energy
+ US$ 80B Public Works + US$ 35B
+ US$ 60B
RE & Urban
Mining Oil & Gas Development
+ US$ 30B + US$ 25B + US$ 5B
Telecom & High

Agribusiness Tourism
Technology
+ US$ 2B + US$ 1B
+ US$ 2B
Source: INDEC and National Investment & Trade Promotion Agency.

Argentina
Recent M&A Activity
Deal Volume
100 91 78 77
68 71
56
50
0
2012 2013 2014 2015 2016 2017YTD
Acquirer’s Origin – 2016 (Volume)
North America Europe

12% 12%
Asia & Oceania

6%
Latin America
70%
Recent Deals
Year Target Acquirer Acquirer Deal Ticket
Origin (US$ M)
2016 Petrobras Pampa Energía Argentina 897
Argentina
2016 Telecom Fintech Group Mexico 812
Argentina
2016 Grupo Mabe Ontex Group Belgium 444
2016 Nextel Grupo Clarín Argentina 178

Comunicaciones
2016 Campo Austral BRF Brazil 85
Source: Deloitte’s analysis based on Mergermarket & Thompson Reuters information.

Argentina
Foreign Trade
Imports FOB (US$ B)
100 78 83
71 70 74
65 62 62 66
57 53
50
0
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F 2022F
Imports Ranking Imports by Partner
2014 2015 2016 Brazil
China
Brazil 1° 1° 1° 26% 24% US
China 2° 2° 2° Germany
Mexico
US 3° 3° 3° 2%
2% France
Germany 4° 4° 4° 3% 19% Italy
3% Japan
Mexico 6° 5° 5°
3%
5% Spain
13%
Rest
Exports FOB (US$ B)
100 80 80
76 73
68 63 68
57 58 57 60
50
0
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F 2022F
Exports Ranking Exports by Partner
2014 2015 2016 Brazil
16% China
Brazil 1° 1° 1°
US
China 2° 2° 2° 8% Chile
Spain
US 3° 3° 3° 53% 8% Germany
Chile 4° 4° 4° Netherlands
4%
3% Canada
Spain 6° 6° 5° 2%
2%
2%
2% Uruguay
Rest
Source: EIU, INDEC.

Demographics
Argentina
Population Characteristics &
Age Distribution
Population Characteristics
Population density: Age distribution:
10.7 persons/km2 25.5% under 15
64.3% between 15-65
10.2% over 65
Population: English proficiency: High

43.6M inhabitants (19th in the World –
Education First English
Proficiency Index)
Literacy rate: 98% GDP per capita:

US$ 21,430
Official Language:
Spanish
Age Distribution (in Millions)
65+ 2,431,674
15-65 13,135 12,654
0-14 5,027 5,195
-15 -10 -5 0 5 10 15
Millions
Men Women
Source: Deloitte analysis based on INDEC information.

Argentina
Employment
Unemployment (%)
10
9 8,5 8,6
8,1
7,8
8 7,3 7,5 7,4
7,2 7,1 7,2
7 6,5
6
5
4
3
2
1
0
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F 2022F
Average Wage (US$ per month)
1.200
957 978 992

1.000 938 931 955
902 868
842
777
800
600
400
200
0
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
Source: EIU, INDEC

Argentina
Education
Analphabetic Index – 2010 Social Census (%)
5 4,7
4 4,2
3,1
3
%
2,8
2 1,6
1,4 1,3
1,2 1,2
1 1,3
1 0,9
0,8 0,8
0
10-14 15-17 18-24 25-29 30-49 50-64 65 +
Male Female
English Level (EF EPI over 72 countries)
20 19 19 19
18
16 15 15
14
12
10
8
6
4
2
0
2012 2013 2014 2015 2016
#1 in 9,8 average Expense in

LATAM (14 years of Education:
countries) education 15% of GDP
Source: INDEC, EF EPI

Infrastructure
Argentina
Main Cities
Autonomous City
of Buenos Aires Mendoza City
Location: NE of Buenos Aires Province Location: N of Mendoza Province

Population:12,8 Million (32% of total) Population: 0,9 Million (2,3% of total)
International Airports: 2 International Airports: 1
Ports: Yes Ports: None
Cordoba City Rosario City
Location: NW of Córdoba Province Location: SE of Santa Fe Province

Population: 1,4 Million (3,6% of total) Population: 1,2 Million (3,1% of total)
Population: International Airports: 1 International Airports: 1
Ports: None Ports: Yes
Source: INDEC, IGN.

Argentina
Country’s Overview:
Transport Infrastructure
Airports
- +50 airport terminals

along the country
- Most of them are Ports
managed by Aeropuertos
2000 – private operator - +40 ports along the
- +30M passengers per country
year - Main ports: Buenos Aires
City and Rosario
- Water flow throught the
Río de la Plata, Paraná,
and Uruguay rivers and
Mar Argentino
Railway System
- 50,000kms of railway
network
- Largest in Latin America
- Connected with limit Roads & Highways
countries
- Buenos Aires City - +500,000kms of roads
network has 7 different - 35,000kms are national
lines roads
- +5,000kms of highways
- Less than 35% are paved
roads
Source: Ministerio de Transporte, Red Vial Argentina, Aeropuertos 2000

Argentina
Airport and Port System
Key
Airport Terminals
Ports
Source: Ministerio de Transporte, Aeropuertos 2000, Aduana Argentina

Argentina
National Transport
Infrastructure Plan
The New Administration presented an US$ 80Bn investment plan in
transportation to develop nationwide improvement in road/highways,
railways, ports and airports infrastructure.
Transport Infrastructure Investment Plan (US$ Bn)
Concession and construction

Roads 48 opportunities for 43,000kms of roads
and highways.
Recovery of national freight railway

Freight Rail 15 so as to be able to transport up to
100M tns per year.
Improve the metropolitan railway

Passenger Rail 8,5
network of 241 stations.
Maintain and expand the fleet of

Rolling Stock 3,2
passenger rail cars.
Modernize three lines and build a new

Metropolitan BA Subway 1,4 one to improve the Buenos Aires
metro area subway.
Modernize, expand and operate the

BA Port 1,5 Buenos Aires Port – largest in the
country.
Investment opportunities to improve

Other 5,6 and expand airports and ports and
increase urban mobility across the
country.
Source: National Investment & Trade Promotion Agency.

Business Types,
Regulatory
Framework &
Tax System
Argentina
Business Types
When investing in Argentina, foreign investors usually set their business using the
investment vehicles described in the following table. All of them created and are
regulated by the Inspección General de Justicia (IGJ).
Type Minimum Capital Quota Holders Observations
Corporation AR$ 100,000 IT may have one

(Sociedad Anónima) (SAU) or more than
one shareholder
Single Owner AR$ 100,000 One shareholder -Shareholder cannot
Corporation be another SAU.
(Sociedad Anónima
Unipersonal)
Limited Liability No minimum, but 2-50 shareholders Members limit their
Company (Sociedad should be adequate liability to the par
de Responsabilidad in relation with the value of the quotas
Limitada) corporate purpose of they agreed.
the entity
Branch of a Foreign Not necessary to Laws from country Books should be
Company (Sucursal) allocate capital of origin kept separately from
HQs.
In addition to the above listed, there are other forms of investment entities
that foreign investors have to establish their business in Argentina:
• Partnerships: no minimum capital, all partners are jointly and
severally liable for the partnership’s obligations.
• Joint Ventures: temporary associations to develop a specific work.
• Cooperating Groups: common organization between several parties
to develop or improve certain phases of its clients activities. It has a
contractual basis.
• Cooperating Consortium Agreement: similar to Cooperation Groups,
but members may not agree jointly and severally liable for the
obligations.
• Trusts: structure which allows an endeavour to isolate certain assets
or property to use them for specific purposes.

Argentina
Regulatory Framework
Financial Activities Insurance Activities

(FEA No 21,526) (Law No 12,988 & 20,091)
The Central Bank (BCRA) is responsible Only issuers authorized by the

for regulating and supervising financial Superintendence of Insurances (SNN)
institutions, authorizing the operation, may perform insurance activities.
merger or transfer of activities and Only Corporations incorporated in
authorizing the establishment of Argentina, branches with assigned local
foreign bank branches or capital and SOEs can perform
representative offices in Argentina. insurance activities.
Capital Markets Oil & Gas

Regulations Law No 17,319: Exploration
and production regulation, as well as
- Law No 17,811 (as amended by Law the hydrocarbons exploration,
No 26,831): enacts the rules for the development and production.
public offering regime. Hydrocarbon operation needs a Federal
- CNV (Argentine Securities concession or permit.
Commission) states the regulatory Law No 13,660: Downstream
framework – all agents and issuers regulation.
have to be authorized and comply with Exploration should be approved by the
requirement determined by CNV. E&M ministry through a biding process.
Mining Energy & Resources

(Mining Code – Law No 1,919) (Law No 24,065, 26,190
& 27,191)
A concession is needed to develop
mining activity, in which the Legal framework divides the sector in:
concessionaire must pay an annual generation, transmission, distribution
royalty to Federal/Provincial and demand.
Government. New regulation for the Renewable
Mining activities have tax incentives Sources of Energy (RSE) which states
which should be analysed before the tax benefits for the ones in charge of
investment. projects – need to be certified by RSE
Program.

Argentina
Tax System
The Argentine tax system is composed of Federal, Provincial and Municipal taxes.
It is a self-assessment system (or enterprise) and its period it’s the calendar year.
Federal Taxes Provincial & Municipal Taxes
Income Tax Turnover Tax

Value Added Tax Real Estate Tax
Minimum Presumed Income Tax Stamp Duty
Personal Assets Tax Tax on Vehicles
Tax on Financial Transactions Tax on Public Advertising
Customs Duties Others
Main Business Taxes

Corporate Income Tax
• Rate: 35% flat
• Territoriality: for resident companies, worldwide income is taxable. Branches
must keep a separate book for its operation in Argentina.
• Period: it is reported and paid annually.
Value Added Tax (VAT)
• Rate: general is 21% - 27% for electricity, natural gas and water supply and
10,5% is applied to some activities.
• Territoriality: Argentinian transactions except for exports which pay zero rate –
imports VAT can be recovered through tax refunds.
• Period: it is reported and paid monthly.
Minimum Presumed Income Tax
• Rate: 1% flat (minimum value of assets in the country: AR$ 200k)
• Territoriality: all assets in Argentina and abroad owned by local companies.
• Period: it is reported and paid annually.
• Observations: it complements income tax whenever the income tax liability does
not exceed the minimum presumed income tax.
Source: National Investment & Trade Promotion Agency and Deloitte own analysis based on AFIP.

Industry Snapshot
Consumer Goods & Retail:
Food, Beverage & Tobacco
Consumer: Food, Beverage &
Tobacco
Industry Overview
Industry Highlights
The Argentine Consumer Goods industry is the largest in the region after Brazil and
Mexico. Yet, the high levels of inflation and the weak economic growth that the
country experiences since the consumer spending boom halted in 2012 has not
helped the industry develop. Furthermore, Cambiemos’ economic policy making has
not helped reactivate the sector and combined with a local-currency depreciation,
the retail market in 2016 is smaller than it was in 2012 in US-dollar terms.
The Economist Intelligence Unit forecasts that retail sales will rise sharply in nominal,
local-currency terms to US$130bn by 2020, but this will mostly be explained by high
levels of inflation pushing up prices. Instead, the real retail sales growth will average
2.20% in 2016-20 in US-dollar terms, as consumer confidence improves and inflation
subsides.
Industry Subsectors
Industry Subsector Main Players
Non-Perishable Food
Ready Meals
Dairy
Bakery, Biscuits &

Snacks
Non-Alcoholc
Beverages
Alcoholic Beverages
Tobacco
Source: The Economist Intelligence Unit

Tobacco
Industry Brief: Non-Perishable
Food
The market for non-perishable food in Argentina is significant. Argentines eat an
average of 9,1 kilograms of pasta per year, and remain as the sixth nation that
consumes more dry pasta in the world according to the International Pasta
Organization. It is also estimated that each Argentine national eats an average of
10 kilograms of rice per year. Hence, the focus of the Non-Perishable subsector will
focus on its biggest segment: Rice, Pasta and noodles.
In 2016, Euromonitor Intelligence estimated that the market for rice, pasta and
noodles grew 4% in retail volume terms and 24% in current value growth, thus
reaching a value of ARS17,100 million.
Companies have reinvented the consumption of dried pasta to boost consumption,
while rice registers the highest growth of 7% in retail volume terms in 2016.
However, the high levels of inflation have made the average unit price of the
standard unit in the industry rise by 19%.
Lead Players Market Concentration Ratio
Molinos Río de la Plata is the leading The 4 firm Herfindahl-Hirschman

and dominant firm in the Non-Perishable Index of market concentration:
food subsector as its portfolio Monopolist
companies account for approximately 10.000
49% of the market. Other competitors = =
that fall behind the market leader are
Molinos Ala (5%), Unilever (4%) and
Dos Hermanos (2%).
Molinos Río de la Plata’s swide variety of

brands in different price bands allows
them to be the most important company High
within the category.
2.500
Source: Euromonitor Intelligence 2017, Current Market
2.446 Concentration
International Pasta Organization.
Moderate
1.000
Low Perfect
1
Competition

Tobacco
Main Players: Non-Perishable Food
Market Share
Footprint in
Company Origin Brands Rice, Pasta &
Argentina
Noodles
Alicorp Argentina Production <1%
Import &
CV Trading Argentina 2%
Distribution
Production &
Dos Hermanos Argentina 2%
Distribution
El Sol de Bella
Argentina Production <1%
Vista
Gualtieri
Hermanos
La Cachuera Argentina Production <1%
La Salteña
US Production 2%
(General Mills)
Ladislao Popelka
y Cia
Import &
Lee Kwon Chan Argentina <1%
Distribution
Import &
Liu Li Wei Argentina <1%
Distribution
Molino Arrocero Production &
Argentina 1%
Milenum Distribution
Production &
Molinos Ala Argentina 5%
Distribution
Molinos Río de la Production &

Argentina 49%
Plata Distribution
Oblimar
<1%
Sagemuller Argentina Production
UK-
Unilever Netherland Production & 4%
s Distribution
Villa d’Agri Argentina Production <1%

Source: Euromonitor Intelligence 2017.
Tobacco
Industry Brief: Ready Meals
The ready meals market in Argentina is considered by many as an under-developed
niche. According to Nielsen Consulting, the market revenues reaches AR$1200 million
and has a potential grow significantly, as the argentina per capita average
consumption is of 1,6 kilograms, 60% less than Chile’s and Brazil's per capita demand
for the products in the segment.
Yet, in 2016 the ready meals market declined by 8% in retail volume terms but
increased by 34% in current value terms to reach ARS986 million. Dried ready meals
registers the worst performance with a fall of 10% in retail volume terms in 2016. The
rationale behind lower levels of consumption for these product-types is that
homemade meals have been substituting ready meals as a result of the economic
crisis.
Lead Players Market Concentration Ratio

Molinos Río de la Plata is the leading firm The 4 firm Herfindahl-Hirschman
in the Ready Meals food subsector as its Index of market concentration:
portfolio companies account for Monopolist
approximately 46% of the market. 10.000
= =
Other competitors that fall behind the
market leader are McCain (16%),
Unilever (12%) and Buenos Aires Food
(7%).
High
In the past years Molinos Río de la Plata

increased its retail value share in ready
meals by 15 percentage points. This Current Market
excellent performance was down to the 2.565
Concentration
repositioning of its brand Gallo in dried 2.500
ready meals, which pushed the Knorr
brand from Unilever into second place.
Moderate
1.000
Low Perfect
1
Competition
Source: Euromonitor Intelligence 2017, Nielsen Consulting Report 2016.

Tobacco
Main Players: Ready Meals
Market
Footprint in Share
Company Origin Brands
Argentina Ready
Meals
Buenos Aires
Food (Dr Germany Production 7%
Oetker)
Carrefour France Distribution <1%
Family Group Argentina Production <1%
Coto Argentina Distribution <1%
Día Spain Distribution <1%
Production &
General Mills US Distribution 4%
Jumbo (Grupo
Chile Distribution <1%
Cencosud)
Molinos Rìo de Production &

Argentina 46%
la Plata Distribution
Production &
McCain US 16%
Distribution
Production &
BRF Brazil 4%
Distribution
Production &
Unilever UK-Netherlands 12%
Distribution
Walmart US Distribution <1%

Tobacco
Industry Brief: Diaries
Yoghurt and Sour Milk Other Milk Products
The Yoghurt and Sour Milk market The Market for Other Dairy remained
declined by 3% in 2016. The current the unchanged in terms of retail volume
value of the market is about ARS 13,200 in 2016. Euromonitor international
million. The drinking yoghurt market estimates that the market value for this
declined by 1% compared with a 35% rise segment can be estimated at ARS
in the average unit price in the segment. 10,700 million.
This suggests the strong consumer Danone is leading the market with a
preferences for Yoghurt and Sour Milk in retail value share of 36%. Other
Argentina. industry key players are Sancor and
Danone continues to dominate yoghurt Mastellone Hnos that through their
and sour milk products in 2016 with a brands hold 22% and 16% of the
market share of 69%. The second market market share for the segment.
share position is detained by Sancor with
17%.
Drinking Milk Products Market Concentration Ratio

In 2016, the annual per capita quantity of The 4 firm Herfindahl-Hirschman
pasteurized, UHT and Chocolate milk Index of market concentration:
consumed in Argentina was of 40,10 Monopolist
10.000
liters, and represented a 10% decrease = =
with respect with 2015, according to the
Ministerio de Agroindustria.
The drinking Milk Products category 5.079 Yoghurt & Sour Milk
remained relatively constant in terms of High
retail volume in 2016. The increasing
demand of drinking yogurt combined with
the rise in cost per average unit has had a
negative impact on the performance of
the dairy products. 2.500
Mastellone Hnos leads the market with a 2.072 Other Diaries
retail value share of 41% in 2016. The
2.022 Drinking Milk Products
second most important player is Sancor
with 16% of market share. 1.000
Low
Perfect
1
Competition
Source: Euromonitor Intelligence 2017, Ministerio de Agroindustria 2017.

Tobacco
Main Players: Dairy
Market Market
Market
Footprint Share Share
Share
Company Origin in Brands Drinking Youghurt
Other
Argentina Milk and Sour
Diary
Products Milk
Carrefour France Distribution <1% N/A <1%
CencoSud Chile Distribution <1% N/A <1%
Coto Argentina Distribution <1% N/A <1%
Production &
Danone France 3% 69% 36%
Distribution
Día Argentina Distribution <1% <1% 2%
Production &
La Sibila Argentina <1% N/A N/A
Distribution
Lácteos Production &
Argentina <1% 1% 1%
ConoSur Distribution
Production &
Mastellone Argentina Distribution 41% N/A 16%
Production &
Milkaut Argentina 3% 2% 1%
Distribution
Switzerlan Production &

Nestlé 5% N/A <1%
d Distribution
Production &
RPB SA Argentina <1% N/A N/A
Distribution
SanCor Production &

Argentina 16% 17% 22%
Cooperativas Distribution
Sucesores de
Production &
Alfredo Argentina 7% 5% 6%
Distribution
Williner
The Coca-Cola Production &
US 6% N/A N/A
Company Distribution
Production &
Veronica SA Argentina <1% N/A <1%
Distribution
Wal-Mart US Distribution <1% N/A <1%

Tobacco
Industry Brief: Biscuits &
Snacks
Salty Snacks Products Biscuits
The annual per capita consumption of Consumers in Argentina buy 7kgs of
Salty Snacks in Argentina is of 1 kg, biscuits per year, according to
and remains relatively low when Kantar Worldpanel. The overall
compared to that of Uruguay (1,6kg), market value of the Argentinean
and Chile (2,3 kg). biscuits market grew by 7.21%
Even though consumption has fallen totaling to 310.88 Million Kgs in
considerably in the past few quarters, 2016.
the segment is considered an Arcor is the leading firm in Biscuit
interesting niche by several players segment with 49% of the market,
eager to expand. followed by Mondelez with 16%,
Pepsico is the leading and dominant Granix with 4%, and Don Satur with
firm in this segment with 80% of the 3%.
market, followed by 5 Hispanos with
10%.
Alfajores & Sweet Snacks Market Concentration Ratio

Products The 4 Firm Herfindahl-Hirschman
Consumers in Argentina buy 24 Index of market concentration:
alfajores per year, according to study
conducted by CCR in 2015.Kids and Monopolist
10.000
teen-agers, raging from 8 to 18,
account for 80% of the demand of the
product in Argentina. 6.508 Salty Snacks Market
Arcor is the leading firm in this segment
with 30% of the market, followed by
Mondelez with 19%, Jorgito with 17%, = High
=
and Guaymallén with 4%.
The sweet snacks market is lead by Sweet Snacks Market
2.742
Arcor, whose brands account for the
46% of the market. Mondelez follows
2.670 Biscuit Market
the lead with 24%, and Ferrero and
Bonafide have mantained a good part of 2.500
the market with 5% each. Moderate
1.566 Alfajores Market
Source: Euromonitor Intelligence
1.000
2017, Kantar World Panerl, CCR
2015, El Cronista.
Low Perfect
1
© 2017 Deloitte & Co. S.A. All rights reserved. Competition
Tobacco
Main Players: Biscuits & Snacks
Market
Market Market Market
Footprint in Share
Company Origin Brands Share Share Share
Argentina Sweet
Biscuits Alfajores Salty Snacks
Snacks
Production &
5 Hispanos Argentina N/A N/A N/A 10%
Distribution
Production &
Arcor S.A Argentina 49% 30% 46% <2%
Distribution
Bonafide Production Argentina N/A <1% 5% N/A
Production & <1%

Cachafaz Argentina <1% <1% N/A
Distribution
Production &
Don Satur Argentina 3% N/A N/A N/A
Distribution
Production &
Fantoche Argentina N/A <1% <1% N/A
Distribution
Production &
Fel Fort Argentina N/A <1% <1% N/A
Distribution
Ferrero S.A. Production Italy N/A N/A 5% N/A
Guaymallén Production Argentina N/A 4% N/A N/A
Production &
Granix Argentina 4% N/A N/A N/A
Distribution
Production &
Havanna Argentina N/A <1% 5% N/A
Distribution
Jorgito Production Argentina <1% 17% N/A N/A
La Nirva Production Argentina N/A <1% N/A N/A
Molinos Río Production &

Argentina <1% <1% <1% <2%
de la Plata Distribution
Production &
Distribution
Mondelez S.A USA 16% 19% 24% <2%
Production &
Pepsico Distribution USA <1% <1% N/A 80%
Production &
Tia Maruca Argentina 2% N/A N/A N/A
Distribution

Tobacco
Main Players: Bakery
Industry Highlights Market Concentration Ratio
In the past years, wheat flour production An estimation of the Herfindahl-
dropped due to draught conditions suffered Hirschman Index of market
during the 2013 harvest, which caused an concentration is:
exorbitant price hike of more than 30% in 10.000 Monopolist
artisanal/unpackaged bread. Consequently
consumers switched to lower-priced bakery Current Market
products, in which biscuits was the main Concentration
beneficiary. High
Artisanal bread is an important element of the = =
Argentinean consumer’s food basket, which over
2.500
the last years has been left behind due to the
trend towards healthy, natural food.
Moderate
Highly Concentrated Industry:
• Grupo Bimbo is the leading firm in this sub-
industry with a significant foothold on the 1.000
market as it is estimated that its portfolio
brands account for approximately 80% of the Low
market. Perfect
• The 25% left of the market can be traced 1 Competition
back to national bakeries and 2nd brand
products.
Main Players
Footprint in
Company Origin Brands Market Position
Argentina
Balcarce Argentina Production National Bakery
Breviss Argentina Production National Bakery
Carrefour France Dist. & Retail 2nd Brand Product
Cencosud Chile Dist. & Retail 2nd Brand Product
Coto Argentina Dist. & Retail 2nd Brand Product
Doña Noly Argentina Production National Bakery
Grupo Bimbo Mexico Production Regional Leader
La Perla Argentina Production National Bakery
Molinos Cañuelas Argentina Production & Dist. National Bakery
Riera Argentina Production National Bakery
Walmart USA Dist. & Retail 2nd Brand Producs

Tobacco
Industry Brief: Non-Alcoholic
Beverages
Sports Drinks Carbonate Beverages
Sports Drinks saw a total volume Carbonates sees volume decline of 1%
growth of 4% and reached 87 million in 2016 to reach 6,300 million liters.
liters in 2016. The growth of inferior brands given
Pepsico’s Gatorade leads the much economic uncertainty catapulted
smaller market of Isotonic Beverages Manaos as the new star Brand in the
with 63% of the market share, followed sector.
by Coca-Cola’s Powerade with 32%. Coca-Cola FEMSA is the leading firm in
It is noteworthy to mention that the Carbonate Beverages sub-industry
Powerade has been experiencing strong as its portfolio brands account for
growth as its market share rose from approximately 51% of the market,
21% in 2013 to the actual level in 2016. followed by Pepsico and the argentine-
national RefresNow which account for
13% and 7%, respectively.
Bottled Water Market Concentration Ratio

In 2016, the market total volume sales The Herfindahl-Hirschman Index
grew 2% to reach 5.2 billion litres. of market concentration:
During 2016 the total sales of second- Monopolist
brands accelerated significantly. 10.000
The bottled water market in Argentina is = =
a competitive market led by Grupo
Danone’s portfolio companies accounting 4.993
Sport Drinks
(2-Firm HHI)
for the 21% of the market share. The
group has one of the widest distribution
High
networks in the country.
The argentine IVESS follows the lead Carbonate Beverages
2.855
with 11% of the market volume. Coca (4-Firm HHI)
Cola Femsa’s (7%), Nestlé’s (6%) and
Pepsico’s (3%) fall behind another 2.500
Argentine water-supplier, Cimes, that
falls third according to Euromonitor with Moderate
8% of the bottled water market volume.
1.000
675 Bottled Water (4-Firm HHI)
Low Perfect
Source: Euromonitor Intelligence 2017. 1
Competition

Tobacco
Main Players: Non-Alcoholic
Beverages
Market Market Market
Industry
Footprint in Share Share Share
Company Position Brands
Arg. Bottled Sports Corbanate
(Lead-Mid-Small)
Water Drinks Drinks
Coca-Cola
Leader Production 7% 32% 51%
FEMSA
Production &
Nestlé S.A. Leader 6% N/A N/A
Distribution
Production &
Distribution
Pepsico S.A.I.C. Leader by third party 3% 63% 13%
(Cervecería
Quillmes)
Production &
Distribution
Grupo Danone Leader 21% N/A N/A
done by 3rd
Party
Production &
Refres Now Medium N/A N/A 7%
Distribution
Production &
Prodea Medium N/A N/A 4%
Distribution
Production &
Cimes Medium 8% N/A N/A
Distribution
Production &
IVESS Medium 11% N/A N/A
Distribution
Nutreco Production &

Medium 1% N/A N/A
Alimentos Distribution
Production &
Pritty SA Small <1% N/A 6%
Distribution
Not focused on
Carrefour Distribution <1% N/A 3%
the Segment
Not focused on
Coto Distribution <1% N/A 2%
the Segment

Tobacco
Industry Brief: Alcoholic
Beverages
Wine Beer
In 2016 the wine industry is recovering Argentina is traditionally a wine-drinking
from a decline in 2015, registering total country but, the total consumption of
volume growth of 5% to reach sales of wine has been declining in the past few
1.1 billion liters. The industry is years. Beer has been gaining popularity
predicted to post a total volume CAGR and since 2012 has beaten all other
of 2% until 2021. alcoholic beverages with a per capita
FeCoViTa is the leading firm in wine consumption of 44,7 liters.
segment with 26% of the market. The The Beer industry appears to be highly
Grupo Peñaflor follows the lead with concentrated specially after AbInbev’s
22% of the market volume. Licores merger with SABMiller. Recent studies
Argentinos (7%) and Bodegas y Viñedos show that AbInbev accounts for 71% of
Garbin (7%) fall behind RPB, that the market followed by CCU and Isenbeck
accounts for 8% of the wine market which account for 22% and 4%,
voiume. respectively.
Spirits Drinks Market Concentration Ratio

The Spirits market exhibits a more The Herfindahl-Hirschman Index of market
competitive environment than the beer concentration:
market, given the high levels of product Monopolist
differentiation across its actors. Within 10.000
this sub-industry, the Fernet is the
product with the strongest foothold.
Fratelli Branca accounts for 50% of the
Beer Market
Fernet market, while Grupo Cepas 5.541 (3 Firm HHI)
follows the lead with 15% of it.
The argentine Fratelli Branca sets the
lead with 27% of the spirit market
= High =
volume and accounts for 50% of the 2.500
Spirits Market
Fernet sales in the country. Pernod 1.319 (4 Firm HHI)
Ricard occupies the second place with
21%, Sabia Campari with 10%, and Wine Market
Grupo Cepas with 7% of the market 1.319 (4 Firm HHI)
volume. 1.000
Low Perfect
1 Competition

Tobacco
Main Players: Alcoholic Beverages
Mark
Marke
et Market
Footprint in t
Company Origin Brands Shar Share
Argentina Share
e Wine
Beer
Spirits
Production &
AB InBev Belgium 71% N/A N/A
Distribution
Production &
Grupo Cepas Argentina N/A 7% 3%
Distribution
Compañía de
Production &
Cervecerías Chile 22% N/A N/A
Distribution
Unidas
Fratelli Production &

Argentina N/A 27% N/A
Branca Distribution
Pernod Production &

France N/A 21% N/A
Ricard Distribution
Production &
Diageo UK N/A 6% N/A
Distribution
Sabia Production &

Argentina N/A 10% N/A
Campari Distribution
Grupo Production &

Argentina N/A N/A 22%
Peñaflor Distribution
Cervecería
Production &
Argentina Argentina 4% N/A N/A
Distribution
Isenbeck
FeCoViTa Production &

Coop Distribution
Production &
RPB Argentina Distribution N/A N/A 9%
Bodegas y
Production &
Viñedos Argentina N/A N/A 6%
Distribution
Garbin
Bodegas
Production &
Valentín Argentina N/A N/A 3%
Distribution
Bianchi
Moet Production &

France N/A N/A 3%
Hennessy Distribution
Licores Production &

Argentinos Distribution
Llorente y Production &

Compañía Distribution

Tobacco
Main Players: Cigarettes
Industry Highlights Market Concentration Ratio
According to data from the Ministerio de The 2-firm Herfindahl-Hirschman
Salud, besides the fact that 21% of women Index of market concentration:
and 30% of men in Argentina smoked in
2013, the annual per capita consumption of 10.000 Monopolist
argentines aged 15 or older is 1.014
cigarettes.
Prices remain low, in spite of the recent Current Market
5.629
introduction of a new regulatory framework Concentration
in the industry. Yet, health warnings are
compulsory, advertising directed at younger
generations is prohibited and marketing is = High
=
banned from television between 8 am and
2.500
10 pm.
Highly Concentrated Industry:

Moderate
• Phillip Morris International is the
leading firm in this sub-industry with a
quasi-monopoly on the market as two of
its portfolio brands account for 1.000
approximately 70% of the market.
• The other main player is British Low
American Tobacco that accounts for
27% of the Argentine Market of Tobacco. Perfect
1 Competition
Main Players
Company Origin Industry Footprint in Brands Market
Position Argentina Share
(Lead-Mid-
Small)
Massalin
Particulares
70%
US Leader Production
Phillip Morris
(aprox.)
International
British
American 27%
UK Leader Production
Tobacco (Aprox.)
Source: Euromonitor Intelligence 2017, Ministerio de Salud.

Tobacco
Recent M&A Activity
Deal Volume & Value
30 30%
20 20%
10 10%
0 0%
2012 2013 2014 2015 2016 2017
Deal Volume Deal Volume

8% 19%
Asia & Oceania

5%
Latin America
65%
Unknown: 3%
Recent Deals
Year Target Acquirer Acquirer Origin Deal Ticket
2017 Dilexis S.A. Tía Maruca Argentina N/D
2017 Potigian Private Investor Argentina N/D

Golosinas
2016 Sancor Vicentín SAIC Argentina 100 Million
(Youghurt & Dessert
Production Unit)
2016 Viña Cobos SA Molinos Río de la Argentina 12 Million

Plata
2016 Main Process Agrana Austria N/D
Source: Deloitte’s elaboration based on Mergermarket & Thompson Reuters information.

Industry Snapshot
Financial Services
Financial Services
Industry Overview
In Argentina, the financial services industry -under the category “financial
intermediation and other services” – accounted for 3,8% of GDP in 2015, according
to the Instituto Nacional de Estadística y Censos (INDEC). Currently, the industry
employs about 164,000 workers, or 2,5% of the registered labour force, in line with
the Ministry of Labour.
There is scope for substantial growth in banking in the country in the medium term
given a population of just over 43M, high per-head incomes (by comparison with
much of the rest of Latin America) and very low level of private-sector credit as a
percentage of GDP.
Argentina in the Region - 2016

Argentina Brazil Chile Colombia Mexico Peru
Deposits/ 29,2 109 54,4 35,6 28,1 74,6

GDP
Loans 75.034 921.988 217.894 146.558 201.163 70.161
Financial 105,2 669,6 568,9 336,2 262,3 211,4

Assets/
GDP
Deposits over GDP
100,0
80,0
60,0
40,0
20,0
0,0
2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
Argentina Brazil Chile Colombia México Perú
Source: BCRA, World Bank, EIU.

Financial Services
Industry Overview
Financial Assets over GDP (% of GDP)
800
700
600
500
400
300
200
100
0
2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
Argentina Brazil Chile Colombia México Perú
Financial Regulation
Argentina has multiple regulators for different types of financial firms:
• The Banco Central de la República Argentina (BCRA) is responsible for the
oversight of Banks and finance companies. In addition it is responsible for the
monetary policy, the payment system, overall financial stability and the issuance
of notes and coins.
• The Superintendencia de Seguros de la Nación (SSN) provides oversight for
primary insurers, reinsurers and agents.
• The Comisión Nacional de Valores (CNV), supervises securities and derivate
markets, brokers and investment funds.
Industry Subsectors
Main Players
Amount Foreign Domestic
Financial 83
Entities
Insurance 184
Companies
Asset Managers 814

(funds)
Specialty 200 aprox.

Financing
Companies
Source: BCRA, EIU.

Financial Services
Financial Entities
A programme of policy adjustment is ongoing and will reduce economic distortions.
However, up to now, banks are still affected by a weak economy and high nominal
interest rates. Credit remains low as a percentage of GDP, at an estimated 13%
over GDP in 2015.
Growth in credit to private sector remains high in nominal terms, and negative in
real terms due to high inflation registered in October 2016. Personal lending had
also rapid growth (44% year to year) from Ahora 12, an Interest-free 12-month
credit plan announced in 2015. Currently revamped into Ahora 18 in order to boost
consumption.
Total Loans (US$ Bn) Total Deposits (US$ Bn)

200
100
80 150
60
40 100
20
50
0
0
2014 2015 2016 2017F 2018F 2019F 2020F
Time & Savings Deposits
ST Loans LT Loans Current-Account Deposits
Lending Interest Rate (%) Deposit Interest Rate (%)

35 31,2 30
30 25,8 24,3
24 24,9 25
25 20,4 21,2
18,8
20 17,1 16,5 20 16,5
14,1 14,9
15 15 12
10
10
5
0 5
0
2012 2013 2014 2015 2016 2017F2018F
Argentinians are modest users of bank accounts. Around 50% of the adult population
had an individual or shared account at a formal financial institution in 2014,
according to the World Bank.
Even though 19% of those surveyed, reported that they had borrowed money, just
8% received loans from financial institution while another 6% had borrowed from
family.
In the same way though 23% of respondents said that they had saved money, only
4% did so at a financial institution.
Source: BCRA. IMF, EIU.
Financial Services
Financial Entities
Main Players
Concentration in the banking sector is high. By the end of 2015, the top five Banks
represented over 55% of the market in terms of deposits. The top ten Banks over
70%.
In terms of assets, the largest domestic Banks are the state-owned: Banco de la
Nación Argentina, which accounts 25,5% of total assets, the private Banco de Galicia
y Buenos Aires (7,5%) and the Buenos Aires province-owned Banco de la Provincia de
Buenos Aires (7,4%).
The main foreign Banks are Spanish-owned Banco Santander Río (8,3% of total
assets) and BBVA Banco Francés (5,9%), HSBC (UK, 3,8%), Banco Patagonia (Brazil
3,2%), Industrial and Commercial Bank of China (China, 3,2%), Citibank (US, 3,2%)
–recently acquired by Santander Río -, and Banco Itaú (Brazil, 1,2%).
While the new government focuses on ironing out some of the macroeconomic
distortions, there will be significant scope for M&A activity.
Ranking
Santander Río
Galicia y Buenos Aires
Francés SA
Macro SA
HSBC Bank
Credicoop Coop.
Patagonia SA
Industrial
Citibank
Hipotecario Assets
Superville SA
Loans
Prov. De Córdoba
Nuevo Santa Fe SA Deposits
San Juan SA
Itau Argentina
Comafi SA
La Pampa SEM
Nuevo Entre Ríos
Banco Industria
Santiago del Estero SA
Otros 0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000100.000
Source: BCRA.

Financial Services
Insurance Companies
The insurance market is still small and remains highly fragmented. There were 186
insurance companies in service by the end of 2016. The high levels of GPD per head
in the past decade have improved penetration of insurance services in the local
market.
There has been rapid growth in premiums in recent years, according to the
Superinendencia de Seguros de la Nación (SSN): premiums rose to AR$211.000M in
June 2016, representing year-on-year growth of 38%.
As share of GDP, premiums represent around 3%, which is well below the OECD
average of 8% of GDP and suggests significant scope for catch-up with mature
markets.
Main Subsectors
Property Personal Retirement

Life Insurance
Insurance Insurance Insurance
Issued Premiums per Subsector (Q of Premiums)
300.000
211.027
250.000
200.000 153.321
Millions
150.000 108.913
80.626
100.000
59.388
45.006
33.396
50.000
0
2010 2011 2012 2013 2014 2015 2016
Property Personal Life Retirement
Source: Superintendencia de Seguros de la Nacion.

Financial Services
Insurance Companies
Property Insurance Companies – 2016 (by Premium in AR$)

Fed. Patronal 13.946
Caja Generales 9.481
Sancor 7.066
Allianz 6.628
San Cristobal 6.306
B. Rivadavia 5.326 Total Premiums:
QBE Bs As 4.841 AR$ 117.189 M
Segunda 4.463
Zurich 4.366 Amount of
Mercantil Andina 3.960 Companies: 109
Provincia 3.767
Nación 3.746 Top15 Share:
Meridional 3.588 72%
Royal & Sun Alliance 3.559
MAPFRE 3.533
Others 32.613
-5.000 5.000 15.000 25.000 35.000
Millions
Personal Insurance Companies – 2016 (by Premium in AR$)

MetLife 2.224
Caja Generales 2.199
Galicia 2.074
Cardif 1.964
Nación 1.862
Sancor 1.784 Total Premiums:
Provincia 1.473 AR$ 27.696 M
BBVA Consolidar 1.311
Zurich Santander 1.191 Amount of
CNP 752 Companies: 84
ACE 664
Assurant 657 Top15 Share:
Caruso 628 72%
Fed. Patronal 586
Opción 539
Others 7.788
0 10.000 20.000 30.000
Millions

Financial Services
Insurance Companies
Life Insurance Companies - 2016 (by Premium in AR$)

BHN Vida 1.383
Prudential 977
HSBC Vida 935
Zurich International Life 846
Origenes Vida 660
SMG Vida 577 Total Premiums:
MAPFRE Vida 509 AR$ 8.314 M
Binaria Vida 357
Provincia Vida 305 Amount of
Instituto Salta 299 Companies: 36
Segunda Personas 294
Top15 Share:
Qualia 254
95%
Plenaria 170
Mañana 157
Tres Provincias 153
Others 438
-5.000 5.000 15.000 25.000 35.000
Millions
Retirement Insurance Companies – 2016 (by Premium in AR$)

Estrella Retiro 2.524
Nación Retiro 337
Orígenes Retiro 225
Segunda Retiro 144
Total Premiums:
HSBC Retiro 136 AR$ 3.581 M
San Cristobal Retiro 90
Binaria Retiro Amount of
52
Companies: 13
Inst. Entre Ríos Retiro 39
Credicoop Retiro 24 Top15 Share:
MetLife Retiro 5
100%
SMG Retiro 4
Fed. Patronal Retiro 1
Galicia Retiro 0
-5.000 5.000 15.000 25.000 35.000
Millions

Financial Services
Insurance Companies
Labour Risk Insurance Companies - 2016 (by Premium in AR$)

Prevención ART 10.905
Galeno ART 10.105
Provincia ART 9.319
Experta ART 7.664 Total Premiums:

Asociart ART 5.458 AR$ 53.889 M
Segunda ART 4.029 Amount of

Swiss Medical ART 3.812 Companies: 12
Berkley ART 943 Top15 Share:

Omint ART
100%
822
Liderar ART 384
Others 449
-5.000 5.000 15.000 25.000 35.000

Millions

Financial Services
Asset Management
Argentina’s fund-management industry was busted by the 2001-2002 crisis, and
afterwards, in 2008, by the time the government nationalized the system of private
pension funds.
The Argentinian mutual-fund segment is smaller than the now-extinct pension-fund
market: around U$S17Bn under management - much less than in other Latin
American countries. Only around 150k Argentines (over a 43-million population)
invest in mutual funds, compared with 20M investors in Brazil. Most investments
are in money-market and bond funds, with only a short percentage of assets
dedicated to shares.
Top Ten Mutual Fund Managers in Argentina
Bancarized Non-Bancarized
Foreign
Local
Source: Deloitte’s analysis based on EIU and CNV.

Financial Services
Specialty Financing Entities
Top ten change agencies
2014
Number of 13,9
Agency
operations
13,9
Libres Cambio S.A. 13,861
11,2
Andina Internacional Cambio y Turismo S.A. 13,859
10,7
Transatlántica S.A. 11,161
9,3
Cambio García Navarro, Ramaglio y Cía S.A. 10,726
9,0
Cambio, Excursiones, Turismo Columbus S.A. 9,281
6,9
Montevideo Cambio y Turismo S.A. 9,035
6,7
Tourfé S.A. 6,942
Valuar S.A. Agencia de Cambio 6,707

6,7
Thaler Agencia de Cambio S.A. 6,659 6,2
García Navarro y Cía S.A. 6,204
Others 74,820
Top ten credit cards emisors

2014
Number 7,0
Debt > 90
Agency of credit
days 1,7
cards
Tarjeta Naranja S.A 7.034.800 9,46% 1,3

CMR Falabella S.A 1.712.420 5,57% 0,9
Cencosud S.A 1.322.979 5,86% 0,7
American Express Argentina S.A 908.343 1,08%
0,5
Tarjetas Cuyanas S.A 718.609 12,06%
0,4
Tarshop S.A 491.270 18,48%
0,3
Gramit S.A 377.840 7,83%
Tarjetas del Mar S.A 321.985 9,4% 0,3
Italcred S.A 293.550 51,72% 0,3

Sistema de Crédito de Entre Ríos S.A 278.324 1,84% 2,2
Others 2.238.414 -
Source: BCRA.

Financial Services
Recent M&A Activity
Deal Volume
20 40%
14
10 10
10 7 20%
4 3
0 0%
2012 2013 2014 2015 2016 2017 Q1
Deal Volume Participation on Period Activity

10% 10%
Latin America
80%
Recent Deals
Origin (US$ M)
2017 Banco Investor Group Argentina N/D
Interfinanzas
2016 Citi Argentina Santander Río Spain
(Retail Bank)
2016 RSA Insurance Suramericana Colombia 615
Latin America
2016 Tarjetas del Investor Group Argentina 15
Mar
2016 MBA Lazard Lazard France N/D
Asset Mgmt
Source: Deloitte’s analysis based on Mergermarket & Thompson Reuters information.

Industry Snapshot
Agribusiness
Agribusiness
Industry Overview
Industry Highlights
Argentina is one of the leading countries in the commercialization of soybeans,
wheat and meat. In addition to that, Argentina is also an important producer of
wool and wine. Nevertheless, the major part of wine consumption is done
domestically.
- In Argentina, 20.3 million of hectares are devoted to the production of soybeans.
The states where the majority of the this commodity is grown the regions of
Buenos Aires, Cordoba and santa Fe.
- Sugarcane and citrus plantations are also largely present in Argentina. Indeed,
the citrus were generally introduced as a protection against the instability of the
sugar market. The Jujuy and Salta provinces are largely used to the growth
tobacco. Moreover, The west of the Paraña River is mainly utilized to cultivate
cotton.
- Livestock are traditionally reared in the Pampas province, it is the most
renowned and valuable commodities in Argentina. Indeed, the local producers
have been able to adapt quickly and accurately to the riskiness of the market.
They switched between breeds when one has a better yield and change their way
of feeding their production by substituting the Alfalfa feed with sorghum grain to
have a better meat.
- Additionally, Corrientes and Entre Ríos are also know for their cattle raising
production following those of the pampas. The Criollo cattle is manly reared in
the Chaco province. Finally, the majority of the sheep are produced in Patagonia,
the south region of Argentina.
Industry Subsectors
Activity Main Players
Soybean,
corn, wheat,
Cereals &
barley,
Oilseeds
sunflower,
production
sorghum,
peanut
Animal
Animal raising
Raising &
and animal
Animal
protein
Protein
production
Production
Fruit Apples, Pears
Production & Citric
Nutritional
Animal
products for
Feed
animal feed
Sugar
Sugar
production
© 2017 Deloitte & Co. S.A. All rights reserved. Source: Global Economy.
Agribusiness
Industry Overview
Agriculture Activity/GDP (%)

10 8,45 8,29 7,95
8 6,85 7,19
6
6
0
2010 2011 2012 2013 2014 2015
Weather Conditions
Argentina's climate is generally temperate but there are major regional variations
due to its length. from the extreme heat in summer of the northern Jujuy and
Salta regions, through the pleasant climate of the central pampas, to the sub
Antarctic cold of Patagonia’s glacial regions. Throughout the country January is
the warmest while June and July are the coldest.
Average Temperature (average °C - by month)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
25 22 22 19 15 12 12 14 15 18 21 23
Average Precipitation (average Mm and days - by month)

Ja Feb Mar Apr Ma Jun Jul Au Sep Oct No Dec
n y g v
Mm 10 90 90 100 80 30 50 50 50 80 80 90
0
Days 9 8 9 10 7 9 8 8 8 11 10 9
Source: Global Economy, Ministerio de Agricultura, Ganadería y Pesca, Weatherbase.

Cereals & Oilseeds
Production
Cereals & Oilseeds Production
Soybean
Production (M of Tns)
100 Growth
AR: 2,0x
50 BR: 2,8x
PY: 2,9x
0
PE: 1,0x
UY: 117x
Argentina Brazil Paraguay Peru Uruguay
Yield (000 Tns/Ha)

2017
3,0 Yield
2,0 AR: 2,9
1,0 BR: 3,3

PY: 2,8
0,0
PE: 1,5
UY: 2,5
Exports (M of Tns)
60 Growth
40 AR: 1,2x
20 BR: 4,0x
PY: 2,5x
0
PE: -
UY: 212x
Source: USDA.

Wheat
20
Growth
15
AR: 0,9x
10
BR: 4,1x
5
PY: 2,9x
0
PE: 1,0x
UY: 2,5x
Yield (000 Tns/Ha)

4,0 2017
Yield
3,0
AR: 3,3
2,0
BR: 3,2
1,0
PY: 1,9
0,0
PE: 1,5
UY: 3,7
Exports (M of Tns)
Growth
10
AR: 0,9x
5 BR: 466x
PY: 6,7x
0
PE: 4,3
UY: 55x
Source: USDA.

Corn
100 Growth
80 AR: 2,5x
60
BR: 2,3x
40
20 PY: 2,7x
0 PE: 1,2x
UY: 1,7x
Yield (000 Tns/Ha) 2017

10 Yield
8 AR: 8,4
6
BR: 5,4
4
2 PY: 4,6
0 PE: 3,2
UY: 5,2
Exports (M of Tns) Growth

30 AR: 2,7x
20 BR: 5,1x
10 PY: 4,1x
0 PE: 2,5x
UY: 17,5x
Source: USDA.

Main Players
Industry
Footprint in Position
Argentina (Lead-Mid-
Small)
United- Grains/
Cargill Lead
States Oilseeds/ Flour
Wheat/
United-
Bunge Soybean/ Corn/ Lead
States
Sunflower
Grains/
Louis Dreyfus Oilseeds/
France Lead
Company Dairy/ Rice
Beans/
Archer Daniels United- Proteins/ Rice/
Middle
Midland States Soy
Crop/ Oilseeds/
Nidera (COFCO) China Middle
Oil
Crops/ Rice/
Adecoagro Argentina Lead
Dairy
Crops/
Cresud Argentina Sugarcane/ Middle
Dairy
Corn/ Soy/
Grupo Los Argentina
Sunflower/ Middle
Grobo
Crop
Molinos Juan
Argentina Starch/ Flour Small
Semino S.A
Morixe
Argentina Wheat/ Cereals Small
Hermanos S.A
Lartirigoyen y
Argentina Crop/ Oilseeds Medium
Cía
Asociación de
Crop/ Oilseeds/
Cooperativas Argentina Medium
Storage
Argentinas
Agricultores
Crop/ Oilseeds/
Federados Argentina Medium
Storage
Argentinos
Source: USDA.
Animal Raising
& Animal Protein
Production
Animal Raising & Animal
Protein Production
Sector Activity
Cattle Heads (Q of heads)
200
150
100
50
0
Argentina Brazil Uruguay
Total Slaughter (Q of heads)

40 Slaughter/
30 Cattle
20 AR: 25%
10 BR: 20%
0 UY: 18%
Beef Exports (M of Tns)

2000
1500
1000
500
0
Argentina Brazil Paraguay Uruguay

Source: USDA.

Protein Production
Sector Activity
Beef Production & Consumption (000 of Tns) Drivers
3000 Prod: slow growth
because producers
2500
will try to grow their
2000
herds in the ST to
1500
increase output and
1000 take advantage of
500 export market.
0 Cons: declining due
to health trend and
increases in price.
Beef Production Beef Consumption
Pork Production & Consumption (000 of Tns) Drivers

Prod: growth to the
500 expanding of the
400 domestic market –
300 less imported
200 product.
100 Cons: it is expected
0 to outperform poultry
levels – which gained
market due to lower
prices.
Pork Production Pork Consumption
Poultry Production & Consumption (000 of Tns) Drivers

Prod: will growth as
3000
it is the cheaper
2500 meat, it can benefit
2000 from the beef
1500 consumption slow
1000 down.
500 Cons: it will benefit
0 from high beef
prices.
Poultry Production Poultry Consumption
Source: USDA, BMI, EMIS.

Protein Production
Main Players
Industry
Small)
Inversora Juramento S.A Livestock
Argentina Lead
INVJ raising
Carlos Casado S.A Livestock
Argentina Middle
raising
Livestock
Cabaña Pilagá Argentina raising/ Middle
Breeding
Cresta Roja Argentina Poultry Lead
Processing
Meat (Beef)
RioPlatense Argentina Lead
Processing
Meat (Beef)
Frigorífico Gorina Argentina Lead
Processing
Meat (Beef)
BRF Brazil Lead
Processing
Meat (Beef)
Ciaber (Compñía Bernal) Argentina Middle
Processing
Meat (Beef)
Processing –
JBS Brazil Hamburger/ Lead
Sausage
Producer
Meat (Pork)
Processing –
Frigorífico Rydhans Argentina Lead
Sausage
Producer
Meat (Pork)
Processing –
Paladini Argentina Lead
Sausage
Producer
Meat (Beef)
Arre Beef Argentina Lead
Processing
Source: Company’s Website.

Fruits Production
Fruit Production
Production, Exports & Main
Players
Apple Production (000 Tns)
1000
500

Apple Exports (000 Tns)
300
250
200
150
100
50
0

Pears Production (000 Tns)
800
600
400
200
0
Argentina Brazil
Source: USDA.

Fruit Production
Players
Pears Exports (000 Tns)
500
400
300
200
100
0
Argentina
Lemons Production (000 Tns)
1500
1200
900
600
300
0
Argentina
Lemons Exports (000 Tns)

400
300
200
100
0
Argentina
Source: USDA.

Fruit Production
Players
Footprint in Industry Position
Argentina (Lead-Mid-Small)
San Miguel Argentina Citrus Lead
Costa Limay Argentina Apple/ Pear Middle
Cosur S.A. Middle

Argentina Apple/ Pear
Grupo Battaglio
Cofrutas SA Argentina Fruits/ Flowers Middle
Argesa
Argentina Citrus/ Fruits Middle
Argentina
Dole Nat S.A. United States Fruits Lead
Fruits/
Canale Group Argentina Small
vegetables
SA Veracruz Argentina Fruits/ Citrus Small
Tres Ases SA Argentina Peache/ Apple Middle
Via Frutta SA Argentina Apple Middle
Apple/ Citrics/
Expofrut Argentina Pear/ Grapes/ Lead
Onion/ Garlic
Ecofrut Spain Apple/ Pear Middle
San Formerio Apple/ Pears/

Argentina Middle
S.R.L Peaches
Patagonian
Fruits Trade Argentina Apple Middle
S.A.
Moño Azul Argentina Apple Middle
Los Juanes S.A. Argentina Apple/ Pear Middle
Kleppe S.A. Argentina Apple/ Pear Middle
Source: Company’s Website.

Animal Feed
Animal Feed
Main Players
Company Origin Footprint in Main Brands Industry Position
Argentina (Lead-Mid-Small)
Ruminants, Swine
Provimi USA Middle
& Poultry
Ruminants, Swine,
Alltech Argentina Middle
Pet & Poultry
Ruminants, Swine
Biofarma Argentina Leader
& Poultry
Ruminants &
Brouwer Argentina Small
Swine
Ceres Argentina Ruminants Middle
Ruminants, Swine,
Cladán Argentina Small
Pet & Poultry
DSM Ruminants, Swine,
Holandesa Middle
Pet & Poultry
Swine, Pet &
Ensol Argentina Middle
Poultry
Nutrefeed, Argentina Ruminants Small
Ruminants, Swine
Nutriser Argentina Small
& Poultry
Ruminants, Swine
Vetifarma Argentina Middle
& Poultry
Metrive Argentina Pet & Ruminant Middle
Royal Canin
USA Pet food Leader
(Grupo Mars)
Purina (Nestlé) Switzerland Pet food Leader
Gepsa Argentina Pet food Middle
Agroindustrias
Argentina Pet food Middle
Baires SA
Garay SRL Argentina Ruminants Middle
Agrocereales
Argentina Swine/ Ruminants Middle
Argentina SRL

Sugar
Sugar
Industry Outlook & Main
Players
Production & Consumption (000 of Tns)
2000
1500
1000
500
0
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F
Sugar Production Sugar Consumption
Main Players
Industry
Small)
Sugar and
Ledesma Argentina Lead
Alcohol - Retail
Ingenio San Sugar and

Argentina Middle
Isidro Alcohol
Atanor Sugar and

US Middle
(Albaugh) Alcohol
Tabacal Sugar and

Argentina Middle
Agroindustria Alcohol - Retail
Ingenio J.
Minetti (Arca Mexico Sugar - Middle
Continental)
Source: USDA, Company’s Website.

Agribusiness
Recent M&A Activity
Deal Volume & Value
10 9 20%
6 5
5 4 10%
2 1
0 0%
2012 2013 2014 2015 2016 2017 Q1
Deal Volume Participation over Period Activity
Acquirer’s Origin - 2016 (Volume)
Asia & Oceania

25%
Latin America
75%
Recent Deals
Acquirer Deal Ticket
Year Target Acquirer
Origin (US$ M)
Aceitera
2017 Bunge Ltd US N/D
Martinez
Grupo Los VSAP
2016 Argentina 75
Grobo Agriservices LP
2016 Rasic Hnos Proteinsa Argentina 121
Black Bamboo
Marfrig (One
2016 (Foresun China 75
Asset)
Group)
2016 LDC Semillas Galba SA Argentina N/D

Industry Snapshot
Telecommunications,
Media & Technology
Telecommunications, Media &
Technology
Industries Overview
Industries Highlights
Telecommunications:
Although Argentina’s telecommunications infrastructure is generally developed,
opportunities to increase coverage and speed remain:
• Argentina has nationwide broadband access but internet speeds are 15% lower
than those of regional peers.
• Argentina’s mobile phone penetration is high (141%) but coverage is not
uniform across the country and is often poor due to insufficient cell tower
coverage.
The government has made cell and internet access expansion development a priority
which is opening a number of opportunities for private investment
Media:
Argentina in one of the leaders in the South America media market, under favorable
legislation, the industry has consolidated and a large number of companies have
appeared.
Technology:
• The software and IT services sector in Argentina is made of 3,800 firms, ranging
from globally consolidated multinationals to a growing network of highly innovative
small and medium-sized local enterprises. Argentine companies’ global projection
in this sector is expanding as one quarter of its production is exported to
international markets.
• As Latin America is becoming one of the most attractive E-commerce acceptance
market around the world, the E-commerce sector in Argentina is growing rapidly
and the country is expected to become a regional leader in this area.
Industries Subsectors
Main Players
Industry
Foreign Domestic
Telecomunications
Media
Technology

Telecommunications
Telecommunications
Mobile Telecommunications
• The expansion of Argentina’s cell coverage presents Deployment Mobile
a USD 2 billion investment opportunity. Coverage
• There are three top players in the mobile telephony
segment—Claro (owned by Mexico's América Movil),
Telecom Personal (a subsidiary of Telecom
Argentina), and Movistar (owned by Spain's
Telefónica). Each operator holds about one-third of
market share.
• Telecoms investment are expected to grow at an
average rate of 12.9% a year during the five-year
forecast period, to reach AR$ 64.7 billion (or US$
2.8bn) by 2021.
• Mobile revenue growth will also be supported by
strong growth of the smartphone market in
Argentina. In 2016, only 37% of the population
owns a smartphone – considerably low against the
region.
• In Argentina there are approximately 15,000 active
cell sites (mobile towers), this number is meant to
double in order to ensure an acceptable quality of
service. The Government will facilitate this
development.
• There is ample room for Neutral Infrastructure
Operators (tower builders/operators) to enter this
market as neutral operators own 62% of cell sites
worldwide vs. 0% in Argentina. Mobile
• Growth in mobile telephony will be led by data industry
transmission and mobile broadband. Substantial contributes
investments have been undertaken by telecoms to
companies to allow them to develop their value-
12.9% 3.7%
Average
added services, including mobile data, and, of GDP
expected
ultimately, increase average revenue per user. growth rate
per year 65,000
jobs
Mobile Subscriptions (per 100 people) during the
next 5 years directly
160 supported
140 by mobile
120 ecosystem
100
80
60
40
20
0
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F
Source: EIU, National Investment & Trade Promotion Agency, GSMA Intelligence.

Telecommunications
Fixed Telecommunications
• Telefónica de Argentina (a subsidiary of Spain's Telefónica) and Telecom
Argentina remain the two dominant forces in the fixed-line market, together
accounting for about 90% of total fixed lines. The remaining 10% is divided
between co-operatives and incoming operators.
• Elsewhere in Latin America the development of triple-play and quadruple-play
services has helped to support take-up of fixed-line telephony to some extent.
This has not been the case in Argentina, where persistent disputes between the
government and Grupo Clarín, the country's dominant media conglomerate,
have prevented progress in this area. However, the more business-friendly
government in office is expected to allow progress to be made on this subject.
• Despite these changes, new investment will be required to improve bandwidth in
order for the triple-play and quadruple-play markets to grow significantly.
Fixed Telecommunications Revenues (US$ M)

3,5 3,456
Millions
2,5
2,257
2 1,8695 1,863
1,5049
1,5 1,4121 1,4147 1,3583 1,312
0,5
0
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F
Source: EIU, National Investment & Trade Promotion Agency.

Telecommunications
Internet Sector
• The expansion of Argentina’s fiber optic network Federal Fiber Optic
over the next 2 years presents a US$ 307 M Network
investment opportunity:
• US$ 240 M in fiber optic deployment
• US$ 67 M in fiber optic enabling equipment
• The expansion of the fiber optic network aims to
connect 1.2K small towns across the country and
to ensure access to quality broadband for a
further 29 million Argentines within two years,
lowering the cost of internet access.
• The current fiber optic network covers more than
32,000 km but only 30% of the fiber is active.
• The Federal Internet Plan network will use
ARSAT’s fiber optic network as a provider of data
transport services at whole sale level and provide
access to local internet service providers,
cooperatives, municipalities and SMEs.
• There is much scope for catch-up in internet
penetration and the expansion of fibre-optic
broadband in the five years forecast period,
given that prices continue to fall as new services
for both businesses and consumers develop, and
as take-up of mobile broadband technology
increases.
• Even though Argentina is the regional leader in
terms of fixed broadband penetration rates, the
country lags behind in terms of internet 16.6%
Broadband
connection speeds.
penetration,
the highest in
the region
Internet Penetration (per 100 people)

90 78,6 79,6
74 76,7
80 69,4 70,9
70 64,7
59,9
60 55,8
50
40
30
20
10
0
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F

Telecommunications, Media &
Technology
Main Players
Main Players in the Mobile Sector
Market
Share
Claro
Mexico 33%
Movistar (Teléfonica Argentina)

Spain 32%
Telecom Personal (Telecom Argentina)

Argentina 32%
Nextel (Grupo Clarín)

Argentina 3%
Main Players in the Fixed Sector

Market
shares
Telecom Argentina
Argentina 45 %
Teléfonica Argentina
Spain 45 %
Others
- 10 %
Main Players in the Internet Sector

Market
Agency Origin Brands
share
Teléfonica Argentina
Spain 35 %
Arnet (Telecom Argentina)

Argentina 33 %
Fibertel (Cablevisión – Grupo Clarín)

Argentina 31 %
Others
- 1%

Media
Media
Industry Highlights
• Argentina in one of the leaders in the South America media market, under
favorable legislation, the industry has consolidated and a large number of
companies have appeared; the accelerated growth of Internet sites and
availability of broadcasting media online offers more possibilities to grow in the
near future.
• There are more than 150 daily newspapers in the country, more than 100
commercial radio stations and more than 16 million Internet users.
• Argentina reportedly has one of the world’s highest viewing rates for cable TV
and the second-highest number of Web surfers in South America.
• Argentina’s main news publications are: Clarín, La Nación, Crónica, El Cronista
Commercial, Página 12, Diario Popular and La Prensa.
• International news agencies covering Argentina include: New York Times,
Reuters, Yahoo and BBC News.
• The three most important news agencies in Argentina are:
• The state agency Telam, entered in a restructuring.
• DYN run by major newspapers, is partly own by the two biggest newspapers
Grupo Clarín and La Nación.
• Noticias Argentinas (NA), belongs to the group that controls Diario Popular.
• These national agencies supplies information to national and provincial media.
Main Players (1/2)
Company Origin Activity Brands
TV, radio, press,

Grupo Clarín Argentina
publishing
Grupo
Argentina TV, Radio
América
Sports TV
Torneos Argentina
broadcasting
La Nación Argentina Press, TV, Radio
Grupo
Argentina Press
Ambito
Turner Entertainment,
Broadcasting USA production and
System distribution
Source: CACE, Forbes Argentina.

Media
Industry Highlights
Main Players (2/2)
Company Origin Activity Brands
DirecTV USA Satellite television
The Walt Disney TV, radio, publishing,

USA
Company films and music
Albavisión USA Television and radio
Televisa Mexico TV, radio and publishing
Source: CACE, Forbes Argentina.

Technology
Technology
Software & IT
• The software industry in Argentina is one of the economic
sectors with great stability and continuous growth.
• The IT sector has had one of the most dynamic
performances between the non-traditional sectors in
Argentina in recent years. Between 2002 and 2012, the
sector’s revenue in US$ grew 17% per year, while exports
expanded by 20% per year. Currently, foreign sales 25% of the
represent 25% of the sector’s revenue. production is
• Employment also increased substantially, the industry exported.
employs almost 69,000 people, more than half of which are
professionals with tertiary or university degrees.
• There is a number of leading multinational companies
operating locally which reflect the international renown for
the competitive advantages offered by the local market.
• Local small and medium-sized companies’ innovative and
high-quality solutions are earning increasing international
recognition, reflected by the expansion of their activities
abroad and new markets. 85.000
• Software and IT service companies located in Argentina’s students in
large urban centers enjoy the benefits of the ongoing 79 IT
synergy and collaboration between leading international education
firms, local companies and universities. centers
• There are diverse IT poles and technology clusters that
offer an ideal scenario for the development of profitable
high-potential projects.
• Argentina ranks among the top 13 countries in the world in
terms of the effectiveness of its processes in the areas of
software development, operations and maintenance. More than
• The Spanish-speaking market, where Argentina is already a 3.800 firms
leader, offers additional possibilities to develop software operating in
and IT services in Spanish. Likewise, e-government, the local
logistics, distribution and trade solutions, as well as market
tourism, all have high growth potential for the development
of applications and services within the country.
LATAM Technology Unicorns

Technology
E-Commerce
• The purchase system of imported products "door to
door" is limited as a result of taxation (except books),
in addition to the applying restrictions according to AR$ 68,5M is the
the amount and quantity of annual shipments. total Argentinian e-
• A new Code with specific and advanced legislation Commerce market
regulating e-Commerce in the area of consumer law
envisages the creation of an entity of control of the
competition and electronic consumer defense to
address the problems of the e-Commerce sector in 11,2M people were
the country. active o e-Commerce
• The Argentinian E-commerce market has not reached in the past 6 months
the same maturity than e-Commerce markets in
Europe or US. LATAM and Argentinian e-Commerce
markets are still in the “growth” period.
• 68% of sales on the e-Commerce market in Argentina 98% of adult
are concentrated in the Gran Buenos Aires region. Internet users have
already purchased
online
About MercadoLibre: the largest

national Unicorn
• MercadoLibre hosts an e-Commerce platform where sellers set up online
businesses that auction off items to registered buyers. The marketplace of
MercadoLibre is however only a part of the company’s portfolio that includes
other services such as MecadoPago, its integrated payment system, or
MercadoEnvios, its shipping operations.
• The growth of MercadoLibre has been exponential. The company went from
having 66 million registered users in 2011 and a net income of US$ 76.8M to a
net income of US$ 106M and more than 145 million registered users in 2016.
• Since 2001, MercadoLibre entered into a strategic alliance with eBay, which holds
about 18% of the company's stock.
Founded: May 8, 1999 (17 years ago)

Headquarters: Buenos Aires, Argentina
Employees: 3,500
Net Income: U$D 105.8M
Argentinian E-commerce market share: 61%
Source: EIU, Forbes Argentina, CACE, National Investment & Trade Promotion Agency, GSMA Intelligence.

Technology
Main Players
Main Players
Company Origin Footprint in Argentina
Mercado Libre Argentina E-Commerce
Globant Argentna IT and Software development
OLX Argentina Online marketplace
Despegar.com Argentina Online travel agency
Google USA Internet, computer software and hardware
Cloud computing, cognitive computing,

IBM USA
information technology
Amazon USA E-Commerce
Intel USA Semiconductors
Computer software, Computer hardware,

Microsoft USA
Consumer electronics, Digital Distribution
Siemens Germany Conglomerate
Source: EIU, National Investment & Trade Promotion Agency, GSMA Intelligence.

Telecommunications, Media and
Technology
Recent M&A Activity
Deal Volume & Value
30 30%
20 20%
10 10%
0 0%
2011 2012 2013 2014 2015 2016 2017
Acquirer’s Origin (Volume)

43% 7%
Asia & Oceania

1%
Latin America
50%
Africa & ME
0%
Recent Deals
Origin
FinTech
2016 Telecom Argentina Mexico 812
Group
Sofora FinTech
2016 Mexico 550,60
Telecomunicaciones SA Group
2016 Nextel Comunicaciones Grupo Clarín Argentina 178
Private
2017 Grupo América Argentina -
Investor

Industry Snapshot
Energy
Energy
Industry Overview
Industry Highlights Prevalence of subsector
Argentina has an immense capacity for investments within E&R in
energy production; from large shale oil and Argentina in 2016- 2017
gas resources, to unique favorable winds,
(Volume)
and everything in-between. Argentina's
energy sector is characterized by the
extraction and production of energy from
coal, oil and gas, electricity, biofuels, nuclear,
and alternative renewable energy sources. 19%
23%
In the past, the energy supply has been
constrained by ongoing tariffs and energy
subsidies. The country’s past of economic
crisis and recurring devaluation periods,
combined with the nationalization of the
country's largest oil and gas producer, YPF, 31%
in 2012, has resulted in a lack of interest 27%
from investors in Argentina's energy
potential. However, the new Administration,
is determined to liberalize tariffs and boost
investment in the sector. Although the long
term goal is to eliminate price distortions, Renewable Mining Oil & Gas Electricity
Macri’s Administration wants to maintain
prices high to stimulate investment in the
medium term.
Industry Specifics
Subsectors Activity
Regarding oil & gas, the value chain is composed of; upstream activities, meaning
the exploration, extraction and production, midstream activities, which include
Oil & Gas transportation, storage and wholesale marketing, and lastly, downstream activities,
which include the refining of petroleum crude oil, processing and purifying of raw
natural gas, as well as the commercialization and marketing of these.
The electricity subsector is the divided between Generation, Transmission and

Electro Distribution of power. The consumption is then divided between Residential, 40%,
Industrial, 30%, and Commercial, 25%.
Energy is considered renewable when it is collected from sources that are

sustainable and most importantly, that they are non-depletable, and thus,
Renewable
replenished naturally within short period of times. A few of the resources used to
Energy
generate power that are considered renewable are sunlight, wind, rain, currents,
and geothermal heat.
Mining is the process of first prospecting for the possible presences of ores
underground, then extracting large amounts of ores in rock, deep underground,
Mining dressing the ore, and finally, smelting the ore. Mining opportunities in Argentina
include Lithium, Boron, Silver, Gold, Copper, Lead, Uranium, Nickel, Potash and
Zinc.

Oil & Gas
Oil & Gas
Subsector Outlook
Opportunity Background
Argentina is Latin Americas largest producer of
natural gas, holding the worlds second largest
shale gas reserves, behind China. Argentina is
also the regions fourth largest oil producer,
behind Venezuela, Mexico and Brazil. Natural
gas is the country’s main source of energy,
and it is their main form of electricity
production, it depends on natural gas for 50%
of their energy needs.
Opportunity Detail (USD BN)
Vaca Murerta
20,0
(per year)
Off-Shore 7 basins totalling 500

5,0
O&G thousand sqkm
O&G Related
2,3
Infrastructure
Exploration Potential
Basins in Production
Industry Highlights
Country Outlook Recent Activity
Oil Argentina houses 24 basins, under land The most recent regulatory norms
and water, of which 5 are in production. establish the duration of the new
4th global reserve of shale oil. Capacity to concessions. 25 yrs for conventional
refine 657,000 barrels per day. Large % basins, 35 yrs for non conventional and
of demand is accounted for by the 30 yrs for offshore. 7000 million USD
transport sector. announced investments in the 1st half of
2016.
Gas Abundant supply of natural gas, mainly China and Russia's national oil
used in the production of electricity. companies, Sinopec and Gazprom, have
Tariffs keep prices high. Consumption of signed a memorandum of understanding
natural gas accounts for over 50% of with YPF to jointly develop shale from
total energy consumption. Above global the same basin
standards of 25%.
Biofuel Increased consumption of biofuels for the Open contracting for renewables: 65MW
transport sector. Soybeans are being for Biomass and 15MW for Biogas.
used as feedstock to produce biodiesel as
a result of its position as the 3rd largest
producer of soy.

Oil & Gas
Subsector Outlook
Main Players
Company Origin Footprint in Argentina Market Share
YPF Argentina Oil & Gas - Fully integrated in the 43% market
value chain: engaged in the share of
exploration and production of oil and production of oil
gas, and the transportation, refining, & gas and 58% in
and marketing of gas and petroleum the petroleum
products. segment.
Pan Argentina Exploration and production of 18% market
American hydrocarbons, as well as the refining share with
Energy into gas and petroleum. regards to
hydrocarbons.
Royal Netherlands Shell is engaged in the complete value Shell has 630 gas
Dutch chain, upstream, midstream and stations in
(Shell downstream of crude oil, gas, and Argentina, which
Group) petroleum products. Shell is also sell around 2,800
offering liquefied petroleum gas (LPG). millions of litres
per year.
TOTAL France Involved in the exploration and Approximately
production of oil and gas, refining and 26% of the share
finally marketing and services. The of gas production.
products produce include lubricants,
LPG, fuels and fluids.
Pampa Argentina Participates in the natural gas 3.9bn market

Energia upstream, created a integrated cap, 10.8%
electricity company as well as being market share in
integrated in the oil & gas value chain. power generation.
(Recently bought Petrobras AR).
Axion Argentina- Possesses the third most important Represents

Energy China refinery in the country. around 15% of
Argentina’s
refining capacity
Source: Company’s websites.

Energy: Generation,
Transmission,
Distribution &
Demand
Electrical Power Generation &
Transmission
Industry Outlook
Argentina constantly deals with power outages and
inefficiencies. The country's power generation base is
too expensive, due to the historical lack of competition.
The country is ambitious to make sure that there is
always sufficient power supply, and that the generation
of it becomes much more environmentally friendly, all
while lowering its costs. The country has received or
allocated almost no investment in power generation
over the last four years. In this time the demand for
power has continued to grow, meaning that there is a
lot of space for investment in this space.
Argentina sources its power generation from various
methods, including natural gas, renewables,
hydroelectric (through multipurpose dams), thermal
(thermal generation plants) and nuclear.
500 kv lines
Opportunity Detail (USD BN)
Thermal 5
Power Grid 5
Nuclear 2,8
Industry Highlights
Electro Argentina is the third largest The current administration declared an energy
power market in its region, after emergency state, starting from December 2015 up
Brazil and Venezuela. Tariff until the end of 2017 in order to abolish
freezes and high regulation have conservation policies and avoid further power
constrained investment in power outages in Buenos Aires. The country expects to
generation. Tariffs have begun to add 10 GW of gross capacity sourced from
rise and will continue to until the renewable energy and an additional 8 GW of
producers adjust to subsidy cuts. capacity from thermal heat generation by
Nationwide projects to expand 2025.The first round of tenders was of 1.5 Bn in
the capacity and increase the projects and was held in September 2016. The
reach of the national electricity second round will be announced simultaneously
grid are needed. with the first Round’s winners.
Nuclear Argentina operates 3 nuclear Argentina is the first country in south America to
energy plants that contribute to construct a nuclear energy plant. Currently
5% of the total energy building two additional plants.
production.

Electrical Power Generation &
Transmission
Industry Outlook
Main Players
Company Origin Footprint in Argentina Capacity/ Market Share
Generates hydroelectric, Possess around the 15% of

SADESA Argentina thermal and cogeneration the total electrical generation
power. capacity in Argentina.
8% electrical capacity, owns

Pampa Integrated value chain in Trasener (which operates
Energia Argentina electrical generation from 100% of transmission, 67%
S.A. natural gas. of Petrobras Argentina
shares).
10 operating plants, with
more that 3,590MW of
AES Midstream in electrical
Argentina capacity in 4 different
Argentina generation.
provinces (operates
worldwide).
Wholesale and transmission 100% market share in
CAMMESA Argentina
(with SADI). wholesale.
Participates in the 75% of the market share in
Edenor Argentina downstream activities of the distribution (owned by Pampa
value chain. Energia)
Holds around 9.5% of the
Operates distribution and
Endesa Spain country’s electrical generation
transportation
capacity.

Renewable Energy
Renewable Energies
Energy Industry Subsectors
Argentina has the potential of producing electricity through
hydro, wind and soy beans. The country counts on a law of
renewable energies, law n° 27.191, requires that 20% of
energy be sourced from renewable resources by 2025,
meaning a 10 GW increase in renewable energy generation.
The first round and second of tenders for Renovar (Renovar 1
and Renovar 1.5) were held, the results are as follows and
sum to and estimate of USD 1.5 Bn. Future tenders will sum
to an estimate of 13.5 Bn opportunity
Results of Renovar 1 & 1.5 Tender (MW)
Wind 1365,4
Wind Energy
Solar 816,2 Biomass
Solar
Biomass 80
Mini-Hydro
Hydroelectric 20
Industry Subsectors
Wind Argentina is one of the most fit countries in the Open tenders for
world for wind energy production, approximately electrical renewables:
70% of its land exceeds the minimum efficiency 600MW for wind.
standard. Positioning itself as the 3rd largest wind
energy reserve in the world.
Hydro Argentina has 4700 km of coast, offering excellent Open tenders for
opportunities for hydro energy production. renewables: 20MW for
hydro electro.
Solar Argentina's northeast is considered one of the four Open tenders for
places with largest potential of solar energy renewables: 300MW
production in the world. Positioning Argentina as Solar energy.
the 2nd largest solar reserve in the planet.
Biofuel Increased consumption of biofuels for the Open tenders for
transport sector. Soybeans are being used as renewables: 65MW for
feedstock to produce biodiesel as a result of its Biomass and 15MW for
position as the 3rd largest producer of soy. Biogas.
Renewable Energies
Main Players
Company Origin Footprint in Argentina Capacity/ Market Share
Abo Wind Denmark Leading wind energy Counts on 1000 MW of wind

producer in Europe. energy in Argentina with more
than 500 installations.
Yacyreta Argentina National hydroelectric power 15% market share (highly
Paraguay station and damn on the fragmented market).
Parana river falls, between
Paraguay and Argentina.
Salto Argentina National hydroelectric power 15% market share.
Grande Uruguay station and dam on the
Uruguay river.
360 Argentina Fully integrated in the value Produces more than 80% of
Energy chain for solar energy; from the total solar energy
engineering, development, production in Argentina.
construction and follow
through.
Emesa Argentina National company of the Three hydroelectric power
province of Mendoza. plants, 6 solar energy parks
and 1 wind power park.
Enarsa Argentina National company dedicated Has a total of 152.1 MW of
to energy production, from installed capacity, sourced
oil and gas to renewables. from solar panels,
hydroelectric power stations
and wind mills around
Argentina.
Genneia Argentina Energy company focused on 77.4 MW of capacity installed
renewable energy,
specifically wind energy, as
well as thermic energy and
the commercialization of
gas.

Mining
Mining
Argentina is full of opportunities in mining. This sector
has not been taken advantage of. 75% of high potential
areas in mining in the country have not yet been
exploited. Within the areas that are in concession, 44
projects, 90% of their areas are still in early stages of
exploration.
Opportunity Detail (#of projects per ore)

29
25
Lithium
12
Gold
7 6
3 3 3 2 1 1 Silver
Uranium
Copper
Industry Subsectors
Argentina is the worlds third largest Lithium Americas, a Canadian miner

producer of Lithium and it forms part of company, partnered with Ganfeng
Lithium the lithium triangle with Bolivia and Chile. Lithium from China to build a 25,000
Argentina currently represents 15% of tonne per year processing plant to open
total world production of 200,000 tonnes. by 2019.
National experts have released data

Copper production is extremely
stating that Argentina has the potential
unexploited, with 200 thousand tons per
Copper to produce 900 thousand tons of copper
year. Argentina contributes 3.2% of the
after the discovery of reserves of around
global production of copper.
1,500 million acres.
Very little consumption of coal in

Argentina. Sustained due to shortages in Strong environmental objections lead to
Coal oil and gas for electricity production. very low expectations of growth in this
Imports are around 95% of total line of energy production.
consumption.
Argentina produces 55 tons of gold per

The mining chamber of San Juan have
year but it has the potential to produce up
released data stating that there are gold
Gold to 110 tons of gold per year, entering the
mines containing more than 80 million
top 10 of the global ranking of gold
ounces of gold.
production.

Mining
Main Players
Footprint in Capacity / Market Revenue
Company Origin
Argentina Share (USD)
17,500 tonnes of lithium
Orocobre Australia Lithium extraction per year (expects to 22.31 M
double it in 2018).
A national union of
mining companies in
YMAD Argentina Argentina that take 3 ongoing projects 17.5 M
on projects and
mining together.
Participates in
various services
within the country,
Glencore China N/A 197.72 Bn
including oil, ores,
minerals, agro and
biofuels.
The worlds fourth
largest producer of
gold. Has a gold and
Goldcorp Canada N/A 4.14 Bn
silver mine in Cerro
Negro, in Santa
Cruz.
3 ongoing mining
projects in 2.2 tonnes of minerals
Pan
Argetnina, with proven and 0.5 tonnes
American Canada 751.9 M
silver, gold, lead are probable under
Silver
and minor amounts ownership.
of copper.
Owns and extracts
from the 164,265 oz of gold
Gualcamayo mine, production in 2016.
Yamana located in the San Mineral reserves at dec
Canada 1.28 Bn
Gold Juan province where 31st 2016: 754,000 oz
there are 3 zones of proven & probable + 2.8
substantial gold million oz measured
mineralization.
Involved in the Owns 100% of the
extraction of Centenario-Ratones
lithium, through a deposit which is
Eramet France 3.11 Bn
new, efficient and expected to support an
environmentally annual 200,000 tons of
friendly process. production for decades.

Energy
Recent M&A Activity
Deal Volume of E&R in AR and % of total deals in the region
50 35%
30%
40
25%
30 20%
20 15%
10%
10
05%
0 00%
2010 2011 2012 2013 2014 2015 2016
E&R %of E&R deals of total deal volume in AR
Acquirer’s Origin in E&R in Argentina in 2016-2017 (Volume)

12% 8%
Asia & Oceania

4%
Latin America
77%
Recent Deals
Target Deal Ticket
Date Target Acquirer Acquirer Origin
Origin USD mil
IFC Asset
Orazul Energy Argentina USA,
3/01/2017 Management 100.00
Corp. & Chile Financial Services
LLC.
Petrobras
5/3/2016 Argentina Pampa Energia Argentina 897.16
Argentina S.A.
Empresa
Desarolladora
3/17/2017 Distribuidora de Argentina Argentina 220.00
Energetica S.A.
Energia Atlantica
Source: Deloitte’s elaboration based on Mergermarket & Thompson Reuters information

Marcelo Bastante Marcos G. Bazan
Lead Partner Partner
Financial Advisory Services Financial Advisory Services
Argentina Argentina
mbastante@deloitte.com mgbazan@deloitte.com
Tomás Aquerreta Miguel Sarquiz Daiana Cardozo

Sr. Associate Sr. Associate Sr. Associate
Financial Advisory Services Financial Advisory Services Financial Advisory Services
Argentina Argentina Argentina
taquerreta@deloitte.com msarquis@deloitte.com lcardozocostaganna@deloitte.com
Lucrezia Rigano
Associate
Financial Advisory Services
Argentina
lriganovargasdelcamp@deloitte.com
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Investing in Argentina

• Argentina – Country’s Overview

© 2017 Deloitte & Co. S.A. All rights reserved.

System of Government: Federal republic with three

Federal Government:The country is divided into 23

Congress: Divided into two houses: the Senate and

Source: National Investment and Trade Promotion Agency information.

© 2017 Deloitte & Co. S.A. All rights reserved.

Average Exchange Rate (AR$/US$)

Inflation Index (%)

National Reserves (US$ Bn)

© 2017 Deloitte & Co. S.A. All rights reserved.

Trade Balance (US$)

Fiscal Deficit/GDP (% of GDP)

Source: Deloitte’s analysis based on EIU, Ambito Financiero, INDEC.

© 2017 Deloitte & Co. S.A. All rights reserved.

Total Public Debt/GDP (% over GDP)

Debt Interest Payments/GDP (% of GDP)

Source: Deloitte’s analysis based on EIU, Ambito Financiero, INDEC.

© 2017 Deloitte & Co. S.A. All rights reserved.

GDP by Activity (2015)

motor vehicles and auto parts. Real Estate Logistics

Source: Deloitte’s analysis based on EIU, INDEC.

© 2017 Deloitte & Co. S.A. All rights reserved.

Identified Investment Opportunities (US$ B)

Transportation & Federal Power &

Telecom & High

Source: INDEC and National Investment & Trade Promotion Agency.

© 2017 Deloitte & Co. S.A. All rights reserved.

North America Europe

Asia & Oceania

2016 Nextel Grupo Clarín Argentina 178

Source: Deloitte’s analysis based on Mergermarket & Thompson Reuters information.

© 2017 Deloitte & Co. S.A. All rights reserved.

© 2017 Deloitte & Co. S.A. All rights reserved.

Population: English proficiency: High

Literacy rate: 98% GDP per capita:

Age Distribution (in Millions)

15-65 13,135 12,654

0-14 5,027 5,195

© 2017 Deloitte & Co. S.A. All rights reserved.

Average Wage (US$ per month)

957 978 992

Source: EIU, INDEC

© 2017 Deloitte & Co. S.A. All rights reserved.

English Level (EF EPI over 72 countries)

#1 in 9,8 average Expense in

Source: INDEC, EF EPI

© 2017 Deloitte & Co. S.A. All rights reserved.

Location: NE of Buenos Aires Province Location: N of Mendoza Province

Cordoba City Rosario City

Location: NW of Córdoba Province Location: SE of Santa Fe Province

Source: INDEC, IGN.

© 2017 Deloitte & Co. S.A. All rights reserved.

- +50 airport terminals

Source: Ministerio de Transporte, Red Vial Argentina, Aeropuertos 2000

© 2017 Deloitte & Co. S.A. All rights reserved.

Source: Ministerio de Transporte, Aeropuertos 2000, Aduana Argentina

© 2017 Deloitte & Co. S.A. All rights reserved.

Transport Infrastructure Investment Plan (US$ Bn)

Concession and construction

Recovery of national freight railway

Improve the metropolitan railway

Maintain and expand the fleet of