Duratex - 1st Quarter 2009
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Transcript of Duratex - 1st Quarter 2009
Disclosure of Results1st Quarter 20091 Quarter 2009
May / 2009
1
Competitive AdvantagesCompetitive Advantages
WoodWood• Brand;• Design;
N ti id
• Production scale: biggest player in Brazil;
• Nationwide coverage: market, distribution and technical assistance;
• Lowest wood cost placed at the factories, among all players;
• Close to the major consumer • Wide product lines aimed to different segments of consumption: high medium and low income;
jcenters;
• High degree of verticalization: d high, medium and low income;
• Production scale;• Leadership.
wood, coating lines and resin from year end on;
• Wide product line and standards.
2
Competitive AdvantagesCompetitive AdvantagesWood Division
MDF & FlooringAgudos - SP
MDPItapetininga - SP
MDF & HardboardBotucatu - SP
100% of timber land located in São Paulo State.
3
Competitive AdvantagesCompetitive AdvantagesMetals - São Paulo
Deca Division
Ceramics Cabo de Sto Agostinho - PEMetals & Ceramics - Jundiaí
Ceramics Queimados - RJ
Ceramics Jundiaí - SPCeramics São Leopoldo - RS
4
Favorable ScenarioFavorable ScenarioCivil Construction Industry
Incentive plan for the construction industry: Federal Government
• Increase of the financing limit, through FGTS, from R$ 350.000 to
R$ 500.000;
• Tax exemption for building materials (IPI reduction);
• Construction of 1.000.000 houses;
• Subsidized credit to low income families;
• Program estimated at R$ 34 billion.
5
Favorable ScenarioFavorable Scenario
11 9 11 713,6 13,5
MDP
Consumption per capita of panels in Brazil
10,711,9 11,4 11,7MDP
(in m3 / year)
2003 2004 2005 2006 2007 20082003 2004 2005 2006 2007 2008
MDF
(Source: ABIPA and IBGE)
9,810,8 11,3
(in m3 / year)5,7
7,6 7,6
(Source: ABIPA and IBGE) 2003 2004 2005 2006 2007 2008
6
Favorable ScenarioFavorable ScenarioWorldwide consumption of panels per capita (in m3 / year)
47
17
16
2019
EuropeUSA China
8
46
1311
22
MDFBrazil
11
MDPMDF
Australia
2007 – EUROPE, 2008 (Projection) – USA, BRAZIL, CHINA AND AUSTRALIA.Sources: EPF, Abipa and Wikipedia
7
Sources: EPF, Abipa and Wikipedia
Favorable ScenarioFavorable ScenarioMarkets Attended
Construção46%
Others21 5%
Sales Segments 200846%
Furniture33,8%
21,5%Housing(directly)
44,7%
Average construction cycle
6 months 12 months 6 months
8
CAPEXCAPEX
Technology update; Leadership in segments of activity with high
673,4CAPEX (R$ million)
growth potential and competitive advantages;
Integration of processes with focus on t i
303,5222 3
2.089,9
costs savings:• acquisition of land,• coating lines and• resin plant, among others.
138,9 139,4 172,8 136,8 108,4 105,4
222,3
89,0
resin plant, among others. Low net debt (R$ 542,0 million, equivalent to
1,44 times EBITDA).
2000
2001
2002
2003
2004
2005
2006
2007
2008
1Q09
9
CAPEXCAPEXExpansion underway at the site of Agudos – SP:• MDF line: 800.000 m3/year capacity with equipment in finishing
MDF
MDF line: 800.000 m /year capacity with equipment in finishing
assemby momentum:
- 125% growth over Duratex existing MDF capacity.g g p y
• Melamine finishing line: 10,2 million m2 capacity;
• Resin plant;
• Acquisition of land and plantation of forest.
10
Market AnnouncementMarket Announcement09.Apr.2009: Discontinuation of the Hardboard operation in Jundiaí
Duratex informs that, in April, it will discontinue its 3 production lines of hardboard located in theDuratex informs that, in April, it will discontinue its 3 production lines of hardboard located in the Jundiai (SP) city. These lines have a combined capacity of 150 thousand m3/year and were installed during the 1950s and 60s being outdated when compared to the other existing lines that operate with greater operating cost advantages and higher productivityoperate with greater operating cost advantages and higher productivity.Besides, the geographical location of the production site, in the city of Jundiai, demands higher costs both from operations and wood supply.The shutting down momentum coincides with the start-up of a new line located in the city ofThe shutting down momentum coincides with the start-up of a new line located in the city of Agudos (SP) that should aggregate 800 thousand m3/year of capacity, when operational.In that sense, the production of thin panels, currently produced in the lines to be discontinued, will be done in the MDF/HDF/SDF lines located in Agudos and Botucatu (SP) which should generatebe done in the MDF/HDF/SDF lines located in Agudos and Botucatu (SP), which should generate relevant cost reductions and productivity gains arisen from the state of the art equipment status.The cash disbursement to discontinue such 3 lines will amount to approximately R$ 8 million as productivity gains and cost reduction will generate R$ 23 million per yearproductivity gains and cost reduction will generate R$ 23 million per year.The announced measure is part of Duratex strategic process towards improving its competitive advantages and generating value in its operations.
11
Market AnnouncementMarket Announcement
Duratex a Brazilian leading company within the industrialized wooden boards metal fittings and
13.Apr.2009: Postponement by indefinite time of the MDP expansion
Duratex, a Brazilian leading company within the industrialized wooden boards, metal fittings and vitreous china segments informs that its management has decided to postpone, indefinitely, the capital expenditures geared to the MDP (Medium Density Particleboard) expansion, disclosed via a Material Fact published on May 7, 2008.
This expansion, budgeted at R$ 1,0 billion, with conclusion expected by the second half of 2010, was already postponed through a Market Announcement dated October 10, 2008. By then, the decision making was made with the objective of waiting for the world economic crisis outcome sodecision making was made with the objective of waiting for the world economic crisis outcome so as to assess the better momentum to continue with the investment thus, preserving the company’s liquidity.
The decision making behind such announcement was based in the persistence of the uncertainties related to the extent, duration and intensity of the crisis. Moreover, there is the necessity of keeping a comfortable financial situation to pass through this momentum sustaining an adequate performance and profitability levelsperformance and profitability levels.
Thus, Duratex management believes that the announced measures reinforces our compromise in granting the operation’s sustainability with creation of value to shareholders.
12
Balanced Financial StructureBalanced Financial Structure2005 2006 2007 2008 1T09
Balance Sheet Highlights:Cash 234,0 574,6 752,7 598,1 442,9, , , , ,Current Assets 726,7 1.138,9 1.355,9 1.321,8 1.127,6Long-Term Assets 39,1 33,6 64,5 144,4 137,6Total Assets 1.947,1 2.375,2 2.750,5 3.373,4 3.239,7Sh T D b 1515 3594 2462 4351 4384Short Term Debt 151,5 359,4 246,2 435,1 438,4Current Liabilities 318,7 601,0 563,3 832,8 779,4Long Term Debt 439,6 258,8 424,6 649,4 546,6Long-TermLiabilities 5655 3778 6300 8085 7003Long Term Liabilities 565,5 377,8 630,0 808,5 700,3Minority Interest 12,0 0,6 0,6 0,6 0,2Equity 1.050,9 1.395,8 1.556,5 1.731,5 1.758,5
RiskRatios:Risk Ratios:Current Ratio 2,28 1,90 2,41 1,59 1,45Equity / Total Assets 54% 59% 57% 51% 54%Debt / Debt + Equity 36% 31% 30% 39% 36%Net Debt 357,1 43,6 -81,9 486,4 542,1Net Debt / Equity 0,34 0,03 -0,05 0,28 0,31Net Debt / EBITDA 0,98 0,10 -0,15 0,87 1,44 * annualized
13
Balanced Financial StructureBalanced Financial Structure
Debt profile
DomesticCurrency
55%
ForeignCurrency
45%R$ 984,9 M 100% Hedge
438438
251Long-term
Debt amortization schedule (in R$ million)
1Q2009 Debt:. New Debt: R$ 68,1M,Amorti ation R$160 0M
3486
43 43 48 42
g
55,5%. Amortization: R$160,0M.
34
2010 2011 2012 2013 2014 2015Short-term
44,5% 2016 andafter
12months
14
PerformancePerformance1Q09 Revenue Sources
HardboardNet Revenue
MDP12,6%
15,4%
Metal Fittings
MDF/HDF/SDF/ Laminate Flooring
Metal Fittings24,7%
Vitreous China
R$ 393,8 M
Flooring30,2%
Vitreous China17,1%
Revenues origination
Domestic Market91 3%91,3% Export Revenues
8,7%
15
PerformancePerformanceNet Revenues in the domestic market
Domestic revenues 1Q09
10,5%
6,5% R$ 393,8 M
83,0%
Furniture IndustryWholesale
6,7%
Other2,4%
Market segments
Technical Sales 2,6%
Other 4,3% 58,0%
Retail55,0%
Home Center 16,3%
,
Wood58,2% 41 8%
Construction 5,10%
Retail30,0%
Builders 19,6%
41,8%
16
PerformancePerformance
(in R$ million) 1Q08 2Q08 3Q08 4Q08 2008 1Q09
Non-recurrent events
RECLASSIFIED EBITDA (LAW 11.638) 127,8 160,3 141,7 129,5 559,3 94,2NON-RECURRENT ITEMS 0,0 20,5 (8,7) (8,4) 3,4 (7,6)
. Tax credit (COFINS) - 24,0 - - 24,0 -Acquisition expenditures in Deca - (3 5) (1 9) - (5 4) -. Acquisition expenditures in Deca - (3,5) (1,9) - (5,4) -
. Down payment for future energy consumption - - (6,8) (6,8) (13,6) -. Jundiaí Shutdown - - (1,6) (1,6) (7,6)
RECURRENT EBITDA 127,8 139,8 150,4 137,9 555,9 101,8
RECLASSIFIED NET INCOME LAW 11.638 72,2 75,9 98,2 67,6 313,9 46,9NON-RECURRENT ITEMS 0,0 12,8 9,6 (5,2) 17,2 (4,8)
. Tax credit (COFINS) - 15,0 - - 15,0 -Acquisition expenditures in Deca (2 2) (1 2) (3 4). Acquisition expenditures in Deca - (2,2) (1,2) - (3,4) -
. Down payment for future energy consumption - - (4,2) (4,2) (8,4) -. Jundiaí Shutdown - - - (1,0) (1,0) (4,8)
. Fixed asset divestment (farm) - - 15,0 - 15,0 -RECURRENT NET INCOME 72,2 63,1 88,6 72,8 296,7 51,7
. Stock options (Law 11.638) (5,4) (7,7) (3,5) (3,5) (20,1) (3,5)RECURRENT NET INCOME AFTER OPTIONS 77,6 70,8 92,1 76,3 316,8 55,2
17
PerformancePerformance
Net Rev.(R$ million) & Gross Margin (%) EBITDA (R$ million) & Margin (%)
Recurrent performance re-classified by Law 11.638
517,4 495,2473,5
40,3% 40,1% 40,6% 40,2%37,7%
150,4 137,91278 139,8
29,9% 29,5% 29,1% 27,8% 25,9%
,427,4
393,8101,8127,8 ,
1Q08 2Q08 3Q08 4Q08 1Q09
PL (R$ million) & ROE (%)Net Income (R$ million)
1Q08 2Q08 3Q08 4Q08 1Q09
21 2% 23,9%
92 177 61.596,5 1.645,0 1.701,3 1.731,5 1.758,5
21,2% 18,7%
13,3%19,0%
,
55,276,392,170,877,6
1Q08 2Q08 3Q08 4Q08 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09
18
PerformancePerformanceRe-classified by Law 11.638
Net Rev.(R$ million) & Gross Margin (%) EBITDA (R$ million) & Margin (%)
141,7 129,5127 8160,3
29,9%33,9%
27,4% 26,1% 23,9%517,4 495,2473,5
40,3% 40,1% 40,6% 39,9%35,7%
129,594,2
127,8,427,4
393,8
1Q08 2Q08 3Q08 4Q08 1Q09
20 1%25,6%
PL (R$ million) & ROE (% ªª)
1Q08 2Q08 3Q08 4Q08 1Q09
Net Income (R$ million)
98 291.596,5 1.645,0 1.701,3 1.731,5 1.758,5
19,6% 20,1%
11,2%16,7%
,
46,967,698,275,972,2
1Q08 2Q08 3Q08 4Q08 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09
19
PerformancePerformance
WoodWood
Recurrent performance re classified by Law 11 638
Net Rev.(R$ M) & Gross Margin (%) EBITDA (R$ M) & Margin (%)Shipped Volume (‘000 m³)
Recurrent performance re-classified by Law 11.638
37,1%30,1% 30,3% 28,2%
1.292,31.275,91.104,5 1.215,0
37,8%38,7%39,5%
47,0%
84,9 64,6
366,1410,1
2007 2008 1Q08 1Q09
291,7 244,7
-16,1%
229,3280,5-18,3% -23,9%
2007 2008 1Q08 1Q092007 2008 1Q08 1Q09 2007 2008 1Q08 1Q09
20
PerformancePerformance
Recurrent performance re classified by Law 11 638
WoodWood
EBITDA (R$ million) & Margin (%)Net Rev.(R$ million) & Gross Margin (%)
Recurrent performance re-classified by Law 11.638
325 8
38,7% 40,8% 39,7% 39,1% 37,8%
30 2% 31 1% 30 4% 28 8%229,3280,5 299,7 325,8 309,0
64,684,7108,8 98,9 89,1
30,2% 31,1% 30,4% 28,8% 28,2%
1Q08 2Q08 3Q08 4Q08 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09
21
PerformancePerformance
Recurrent performance re classified by Law 11 638
EBITDA (R$ M) & Margin (%)Shipped Volume (‘000 items) Net Rev.(R$ M) & Gross Margin (%)
Recurrent performance re-classified by Law 11.638
17.56315.041
+14 9
698,6566,0
40,9%41,5% 43,2%
37,5%
26,0% 27,2% 29,2%22,7%
3.689 4.239
+14,9
146,9 164,5
2007 2008 1Q08 1Q09
+12,0-13,1%
42,9 37,3189,8148,1
2007 2008 1Q08 1Q092007 2008 1Q08 1Q09 2007 2008 1Q08 1Q09 2007 2008 1Q08 1Q09
22
PerformancePerformance
Recurrent performance re classified by Law 11 638
Net Revenues (R$ million) & Gross Margin (%) EBITDA (R$ million) & Margin (%)
Recurrent performance re-classified by Law 11.638
164,5173,8 191,7 186,3
43,2% 38,8% 42,2% 41,9% 37,5%29,2% 26,8% 26,9% 26,2% 22,7%,
146,9,
37,342,9 46,5 51,5 48,8
1Q08 2Q08 3Q08 4Q08 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09
23
Creating Value Creating Value (2000 to 2008)(2000 to 2008)
MDF Expansion
Acquisition of land and planting of timberland and expansion DecaEPS in R$ 1
MDP Expansion
MDF Expansion
MDF ExpansionResin PlantDeca acquisitions
CAGR: +20,5%2, 44 *
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1,160,55
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
555 9*CAGR: +13,7%
* EPS by recurrent income of R$316,8M. By reported income of R$313,8M, the EPS would be R$2,42
EBITDA (* recurrent)Dividend / IOC 555,9
199 4110,0
2007: R$50 million in extraordinary dividends
CAGR: +22,6%Dividend / IOC(in R$ million)
2000 2001 2002 2003 2004 2005 2006 2007 2008* 2009 2010 2011 2012
199,4
21,5
y
2004: R$15,3 million in extraordinary dividends
24
DisclamerDisclamer
The information contained herein was prepared by Duratex S A and does notThe information contained herein was prepared by Duratex S.A. and does not constitute an offering material, to subscribe for or purchase any of the Company’s securities. This material brings general information about the Company and markets as of this date. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy fairness or completeness of the information presented hereinaccuracy, fairness or completeness of the information presented herein. The Company can give no assurance that expectations disclosed in this presentation will be confirmed.p
12th May 2009
25
Disclosure of Results1st Quarter 20091 Quarter 2009
may / 2009
26