Post on 22-Jun-2015
Conference Call - Results Presentation | 2Q11
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Disclaimer
“Forward looking statements included in this presentation regarding the
Company’s business, operating and financial results and Company’s growth
are only predictions and were based on management's expectations
regarding future performance. These expectations are highly dependent on
market conditions, Brazilian economic scenario, industry performance and
international markets, and are therefore subject to change”
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Sales volume of chrysotile mineral grows of 6.6% compared with 2Q10
Growth of 15.7% sales volume of fiber cement
Concrete tiles segment rose 14.8% in 2Q11
Net consolidated revenue grows 13.2% and amounts to R$ 201.0 million
Investments in automation of production lines of Tegula
Recovery of EBITDA margins and Net margins when compared with 1Q11
Distribution of 85% of Net Income as dividends and interest on shareholders’
equity
Award for the Best Investor Relations for Individual Investors
Highlights – 2Q11
Corporate Profile
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The largest and most diversified industry in the roofcovering segment in Brazil
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Supply Chain
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Other Segments
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1) Anápolis/GO; 2) Colombo/PR; 3) Goiânia/GO; 4) Rio de Janeiro/RJ; 5) Simões Filho/BA; and 6) São Paulo/SP.
Commercial Branches
Plants Location – Fiber cement / Mining
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Plants Location – Concrete tiles
SAMA - Overview
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Global Market – Chrysotile Mineral
Global Consumption (MM of Ton)
2010
2.2
2008
2.4
2007
2.4
2006
2.3
2005
2.3
2004
2.1
2009
2.1
Canada 6%
Russia – 48%
Kazakhstan – 10%
China – 22%
Brazil 14%
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155
136
291
143
163
306
34
41
75
37
42
79
67
78
145
64
85
149
2009 2010 2Q10 2Q11 1H10 1H11
Sales of Chrysotile Mineral (thous. tons)
Domestic Market Foreign Market
5.3%
2.3%
6.6%
Eternit - Overview
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Water tanks and filters
Constructions systems and Accessories
Roof coverings
Bathroom chinaware fixtures
Products and solutions for civil construction
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731
827
182210
389 413
2009 2010 2Q10 2Q11 1H10 1H11
Sales of Fiber Cement* (thous. tons)
* Includes components for constructions systems
13.2%
6.0%
15.7%
Tégula - Overview
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Main Products – Roof coverings
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Full Roofing Solution
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1,3001,493
477
1,887
2,364
2,801
2Q10 2Q11 1H10* 1H11
Concrete Tiles
*Tégula was acquired on February 11 2010. The amount of 587 thousand m2 refers to Eternit.
18.5%
14.8%
Sales (thousand m²) Capacity Utilization
72%
82%
2Q10 2Q11
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Tégula
Operating and Financial Aspects 2Q11 2Q10 % Chg.
Sales - Tiles (in m2) 1,493 thousand 1,300 thousand 15%
Net Operating Revenue R$ 22,169 thousand R$ 19,004 thousand 17%
Gross Profit R$ 7,180 thousand R$ 6,527 thousand 10%
Gross Margin 32% 34% -2 p.p.
EBITDA R$ 2,345 thousand R$ 3,024 thousand - 22%
EBITDA Margin 11% 16% -4 p.p.
Net Income R$ 2,004 thousand R$ 1,736 thousand 15%
Net Margin 9% 9% -
Operating and Financial Aspects
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130
453
583
111
647
759
27
151
178
25
176
201
54
294
348
44
343
387
2009 2010 2Q10 2Q11 1H10 1H11
Consolidated Net Revenue (R$ million)
Domestic Market Foreign Market
30.2%
11.2%
13.2%
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Chrysotile Mineral30.5%
Others (*)2.4%
Fiber cement54.1%
Components Construction
Systems2.3%
Concrete tiles and
Accessories10.7% Chrysotile
Mineral27.3%
Others (*)5.0%
Fiber cement54.2%
Components Construction
Systems2.5%
Concrete tiles and
Accessories11.0%
Net Revenue Breakdown (R$ million)
2Q11
(*)Others: metallic roofing tiles, polyethylene water tanks, bathroom chinaware fixtures and water pipe filters
2Q10
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Depreciation7%
Workforce17%
Raw material3
51%
Energy4%
Other Costs21%
Raw material2
31%
Workforce48%
Depreciation4%
Energy8%
Other Costs9%
Workforce10%
Depreciation3%
Other Costs19%
Energy3%
Raw material1
65%
COGS Breakdown – 2Q11
1 - Cement (45%), Chrysotile Ore (43%) and others (12%)
3 - Cement (53%), sand (31%) and others (16%)
2 – Fuel, explosives, packaging, among others
Fiber Cement Chrysotile Mineral
Concrete Tiles
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123
145
36 31
7358
2009 2010 2Q10 2Q11 1H10 1H11
EBITDA (in R$ million)
17.1%
-19.5%
-13.1%
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73
102
24 21
4838
2009 2010 2Q10 2Q11 1H10 1H11
Net Income (in R$ million)
39.7%
-20.4%
-13.7%
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Margins
42% 43%46%
38% 38%
45%
38%
21%19% 20%
14%16%
21%
15%
13% 13% 14%
9% 10%
14%
10%
2009 2010 2Q10 1Q11 2Q11 1H10 1H11
Net MarginEBITDA MarginGross Margin
28
21
8
29
27
9
34
14
9
93
13
4
17
63211
21
34
4
59
12
52
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2009 2010 2Q10 2Q11 1H10 1H11
Investments Tégula Acquisition
Capacity Increase – TégulaMolds and New Business
Capacity Increase – Eternit
Investments (in R$ million)
Land Acquisitin – Ceará State
220.7%
-68.1%
-36.3%
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New Production Lines of Finished Products
Colombo - PR January/2009
Goiânia - GO April/2008
Simões Filho - BA October/2010
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Construction of the New Synthetic Marble Production
External Area Production Line Resin Silo
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35 km15 km
Linha Gás Natural
Cimenteira
Aquisição do Terreno para a Fábrica Multiprodutos - Ceará
Land of 400 000 m²
Corporate Governance and Capital Markets
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40
60
80
100
120
140
160
180
200
220
Dec-06 May-07 Oct-07 Mar-08 Aug-08 Jan-09 Jun-09 Nov-09 Apr-10 Sep-10 Feb-11 Jul-11
ETER3IBOVESPA
Eternit’s Shares Performance (Dec/06 - Jul/11)
Between 12/30/2006 to 07/31/2011, Eternit”s shares appreciated 46.7% and IBOVESPA appreciated 31.8%.
In the same period, including the payment of dividends and interest on own capital, Eternit’s shares appreciated 133.5%.
58,823
R$ 8.89
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59.7%
2.3%
7.8%
30.2%
Ownership Structure – Jul/11
Shareholding Structure Jul/11 Jul/10
Geração L. Par. F. I. A. 18.96% 19.41%
Luiz Barsi Filho 13.21% 12.53%
Victor Adler + VIC DTVM 8.50% 8.50%
Diretoria 1.68% 1.42%
Demais Conselheiros 0.07% 0.04%
Ações em Tesouraria 0.03% 0.03%
FREE-FLOAT 76.51%
Board of Directors Member Since
Sérgio Alexandre Melleiro (*) 1993Lírio Albino Parisotto (*) 2004
Victor Adler (*) 2005Élio A. Martins 2007
Luiz Barsi Filho (*) 2008Marcelo Munhoz Auricchio (*) 2011
Luis Terepins (*) 2011(*) Independent member
Consultive Council Member Since
Guilherme Affonso Ferreira 2011Mário Fleck 2011
Individual InvestorsCorporationsInvestors AbroadClubs. Funds and Foundations
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1,108975
841
2009 2010 2011(*)
6,6155,910
6,784
2009 2010 2011(*)
Ownership Structure
(*) Until July 2011
Number of shareholders Average Traded Volume (R$ thousand)
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Shareholder Remuneration
Net Income Dividends and Interest on own capital
2009
73
Net Income X Shareholders Remuneration (R$ million)
2010
55
72
102
2011*
(*) Until August 2011
60
2009
15.1%
2010
9.3%
2011*
5.6%38
Dividend Yield
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Quer ser sócio? / Wants to be a partner?
Eternit joined to Quer Ser Sócio? of
BM&FBOVESPA campaign
The campaign aims to achieve the goal of
winning 5 million of investors and make the
market more accessible to all Brazilians who want
to be partners in the growth of the country.
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The Company made available in June the online
version of the Annual Report 2010, which, through a
sustainable point of view, according to the Mission of
the Company, also offers its content for access, by
smartphones and IPAD.
Online version of the Annual Report 2010
This is another improvement of Eternit regarding
corporate level, in which its exellence is already
recognized by the market.
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Awards
•Best Investor Relations for Individual Investors: Eternit won the IR MAGAZINE BRAZIL AWARDS 2011 prize for the Best IR Program for Individual Investors in the small & mid-cap category (companies with billings of less than R$ 3 billion). The Company also received an honorable mention of "best progress in Investor Relations" in the small & mid-cap category from the same entity.
•Prêmio Ruy Othake: At the 18th Concept and Image of Industry Ranking awards in May 2010, Eternit was placed first inthe fiber cement roofing tiles category and third in the polyethylene water tanks category.
•Prêmio Great Place To Work: In May 2011, SAMA and Precon Goiás were elected “The Best Companies to work”.
Outlook
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Economic Figures
Minimum Wage (R$) Workforce (R$ million)
300380 415
465510 545
2005 2006 2007 2008 2009 2010 2011Source: BACEN
CAGR: 10.5%
350
303,028 321,163 338,501365,331 377,361
404,751
2005 2006 2007 2008 2009 UDM 2010*
CAGR: 5.96%
Source: IBGE * 2010 UDM from dec/09 to nov/10
Food Basic Basket SP x Minimum Wage (purchasing power)
151.0 180.0 200.0 240.0 260.0 300.0350.0 380.0 415.0
465.0510.0 545.0
119.5 128.6
239.5 228.2 265.2
158.7 164.8 172.2 183.4 182.1 214.6
79.2%71.4%
79.4%
68.7% 66.2%61.1%
52.0%56.5% 57.7%
49.1% 52.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Minimum Wage (R$) Food Basic Basket in SP (R$) %Source: IBGE and DIEESE
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Credit Availability Unemployment Rate - BrazilGovernment, Industry, Housing, Rural, Commerce, Credit
Individuals (R$ billlion)1,703.81,677.61,613.8
1,528.91,451.91,410.3
1,227.3
936.0
dec/07 dec/08 dec/09 mar/10 jun/10 sep/10 nov/10 dec/10
8.6% 8.4%7.4%
6.8% 6.8%
5.3%
dec/05 dec/06 dec/07 dec/08 dec/09 dec/10
Growth of the Brazilian SavingsSource: BACEN Source: IBGE
233.0 238.0 240.0 245.0254.0 257.0 258.0 260.0 262.0 265.0 270.0
277.0 280,015.0%16.0% 16.0%
17.0% 18.0%19.0% 19.0% 20.0% 20.0% 20.0% 20.0% 20.0%
19.0%
aug/09 sep/09 oct/09 nov/09 dec/09 jan/10 feb/10 mar/10 apr/10 may/10 jun/10 jul/10 aug/10
R$ billlion (%) Chg YoYSource: BACEN
Economic Figures
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5.0 5.4
13.2
8.2 5.1
34.9
-6.3
-0.2
5.3
11.6
7.5
33.3
2007 2008 2009 2010 2011(E)
5.24.0
12.0
GDP and Gross Revenue Comparison (%)
GDP Construction GDP Brazil Eternit - Gross Revenues
(E) - Estimate - Source: BACEN. Gross revenue growth has been consolidated as of January to June 2011 vs. the same period of 2010. The Company does not inform guidance of future revenue.
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Structured Expansion and Diversification Program
INITIATIVES
- Creation of the Development and New Businesses Area
- Inclusion of metallic roofing on its portfolio
- Investment in new product lines of fiber cement
- Investment in machinery for new products on its plants
- Increase in SAMA’s production capacity
- Launches of new products
- Debut into chinaware bathroom fixtures
- Inorganic growth – Acquisitions
OBJECTIVE
Consolidate Eternit as a supplier of products and solutions to the civil construction industry
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For more information access: www.eternit.com.br
Launches - 2011
Bairro Nova Odebrecht – Angra dos Reis/ RJ
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Mobile Exhibitor - Bathroom Chinaware
Fiat Doblô cars equipped with bathroom chinaware and lavatory seats exhibitors
Chrysotile – The Brazilian Mineral
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Chrysotile – The Brazilian Ore
The use of Chrysotile ore in Brazil is regulated by the Federal Law 9.055/95, by Decree 2.350/97 and by regulatory standards for occupational health and safety. It is also provided in the Convention 162 of the International Labor Organization (OIT).
Serpentinite rock with Chrysotile Ore fibers
White Ore
Bends and silky fibers without tip
Biopersistence*: 2.5 days
*Biopersistence: Time that a inhaled particle remains in the lungs before being eliminated by the body’s defense mechanisms. To cause lung damage, the fiber must have penetration and durability capacities in the alveoli.
High Concentration of Magnesium:3MgOSiO2H2O
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Brazil concludes important research about chrysotile ore risks
Project Asbesto Ambiental“Ambiental Exposition to Asbesto: Evaluation of Risk and Effects in Health”
Process CNPq n. 420001/2006-9
The results of the research were announced on November 25 2010 and demonstrates that:
Among the householders surveyed, no clinical, respiratory functional and high resolution tomographic alterations were found that could beattributed to atmospheric asbestos fiber inhalation.
In the occupational assessment, no new alterations were identified or progression in pleural and interstitial deterioration of individuals in the sample Group exposed after 1980 and who underwent High Resolution Computed Tomography scans in the two studies.
The full version of this research can be found in www.sectec.go.gov.br.
Corporate and Environmental Management
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Corporate Management
Launch ................... November 2004
Purpose .................
Contribute to society’s better understanding of the mining and processing of Chrysotile Ore and the manufacture of fiber cement products in a sustainable manner.
Location ........... Five production plants of Eternit and the SAMA mining company
Visitors ............... More than 46,000 until June 2011
Target ................... All society
Open Doors Program
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Environment Focused Management
Quelônios Project - Animal Conservation Area
The only breeding program of Amazon turtles in Brazil and Reintegration of Wild Animal Nature in partnership with IBAMA
Zero Reject Monitoring Air Quality Water Reuse Reforestation Work
Seedling Nursery
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Social Actions
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Information
Élio A. Martinselio.martins@eternit.com.br
Rodrigo Lopes da Luz
rodrigo.luz@eternit.com.br
Phone: (55-11) 3813-6034 or (55-11) 3038-3818
IR ConsultantSilvia Helena Madi Pinheiro
silvia.pinheiro@firb.com
Tel: (55-11) 3500-5564
Bárbara M. Tanure Gonçalves
barbara.goncalves@eternit.com.br
or www.blogdaeternit.com.brwww.eternit.com.br/ir
This material was produced using FSC certified paper (Forest Stewardship Council), which is a guarantee that the raw materialcomes from a forest managed in an environmentally responsible, socially and economically viable.