Duratex - Corporate Presentation 2Q11

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Investor Relations / www.duratex.com.br

CORPORATE PRESENTATION

AUGUST 2011

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2010

SCENARIO

Overcoming the crisis of 2009

Rates Recovery

Costs in balance

IPI exemption until March

2010

Cost pressure from the second semester (labor

and copper)

Rates Recovery

2011

Macro-prudential measures

Increasing Interest Rates

Cost pressures (resin)

Demand at 2010 level

2011

Cost pressures (labor and copper)

Sanitary wares :

a) Incease of prices

b) start-up of new furnace in Recife

c) incorporation of activity of Deca Nordeste

Metals:

a) cost management

b) start-up of new galvanoplastic equipment

(labor and copper)

Recovery of price base

Tax exemption until March

on labor

:

start-up of a new furnace in Recife

price increase(resin)

Recovery of price base

and copper

:

incorporation of Deca Nordeste

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8,47,4

6,8 6,8

5,3

6,5 6,4 6,46,1 6,4

dez /06 dez /07 dez /08 dez /09 dez /10 jan/´11 fev /´11 m arço/´11 abr/´11 m ai/´11

TOTAL CREDIT x PIB in BRAZIL ( %) DISPOSABLE INCOME (R$ mn)

309.671328.204

345.923373.340 385.634

432.407419.593

0

1 00000

2 00000

3 00000

4 00000

2005 2006 2007 2008 2009 2010 UDM até

Maio´11

UNEMPLOYMENT RATE IN BRAZIL (%)

June´11

6,2%

SOURCE: IBGE

SOURCE: IBGE

46,6% 46,9%46,5%46,5%46,3%

46,6%

45,0%

40,8%

40%

41%

42%

43%

44%

45%

46%

47%

48%

2008 2009 2010 jan/11 fev/11 mar/11 abr/11 mai/11SOURCE: BACEN

300350

380415

465510

545

2005 2006 2007 2008 2009 2010 2011

MINIMUM WAGE ( in R$)

SOURCE: BACEN

CAGR 5,7%

CAGR 10,4%

UDM up to May´11 Jan/11 Feb/11 March/11 April/11 May/11

dese

ason

aliz

ed

SCENARIO

Dec/10

6,2%

TOTAL CREDITL x GDP IN BRAZIL (%)

-4-

52,0%

-5-

56.670

68.843

81.51887.861

2.010 2011E 2012E 2013E

71.377

86.866

97.294106.521

2.010 2011E 2012E 2013E

CAGR 10-13E = 16%

CAGR 10-13E = 14%

NET REVENUE OF A SELECTION OF BUILDING COMPANIES IN BRAZIL (in R$ mn) Homebuilders P/BV 2012E

LAUNCHES (in R$ mn) Homebuilders P/BV 2012E

SOURCE: Research Credit Suisse, June/11

Selected companies: (PDG, MRV, Cyrela, Brookfield, Rossi, Gafisa, Tecnisa, Eeven, Direcional, Viver, CCDI)

SCENARIO

+21,5%

+21,7%

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Source: BCB/ IBGE* Focus Report - Market expectations –median (24.June.2011)

GLOBAL INFLATION RATES

Sources: OECD, Haver Analytics.

Note: Latest observation refers to May 2011 except for Korea and Turkey (June 2011).

Homebuilders P/ABV last reported COMPLEX INTERNATIONAL SCENARIO

Source: BCB/ BLOOMBERG/ FOCUS REPORT(*) IPCA (National Index of Consumer Prices)

IGPM (General Index of Market Prices)

BRAZILBRAZILIPCA: 6,15IPCA: 6,15IGPM: 6,01IGPM: 6,01

Média Mensal: 0,33%

SCENARIO

CPI inflation rates

(year-on-year % change)

Monthly averageMonthly average: 0,73%: 0,73%Setember/2010 – April/2011

Monthly averageMonthly average: 0,33%: 0,33%June/2011 – December/2011

Emerging economiesEmerging economies

Inflation in emerging economiesInflation in emerging economies(expectation(expectation for 201)for 201)Euro ZoneEuro Zone

••Sovereign debt crisesSovereign debt crises•• Low and unequal growthLow and unequal growth•• Inflation riskInflation risk

United StatesUnited States•• Losing strength and growthLosing strength and growth••Unemployment still highUnemployment still high•• Inflation on the riseInflation on the rise••Negotiation of debt ceilingNegotiation of debt ceiling

JapanJapan••EarthquakeEarthquake, Tsunami, Tsunami••Eonomic downturnEonomic downturn••Nuclear crisisNuclear crisis••Disruption of supply chainsDisruption of supply chains

North Africa & North Africa & Middle EastMiddle East•• TunisiaTunisia•• EgyptEgypt

•• LibyaLibya

•• SyriaSyria

•• YemenYemenSouth AfricaSouth Africa

INFLATION RATE IN BRAZIL- SIGNS OF DECELERATION

(*)

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WOOD PANELS´ MARKETSCENARIO

2.102 2.186

2.548 2.6332.431

2.885

1.449,6 1.443,3

2005 2006 2007 2008 2009 2010 1S10 1S11

MDP

Usage:

Flat parts,

Sides / Partitions / Shelves

Usage:

Rounded edges, sculptured

surfaces,frames

Homebuilders P/ABV last reported TOTAL CONSUMPTION OF PANELS IN BRAZIL (Source ABIPA, in ‘000 m³)

=

+18,7%

* Annual effective capacity of the industry based on lines already installed, after periods of ramp-up and minor investments

MDP: AVAILABLE EFFECTIVE CAPACITY : 3.620 K m³/YEAR

EFFECTIVE CAPACITY OF THE INDUSTRY : 4.000 K m³/YEAR*

MDF

1.413,5

1.8612.037

2.263 2.352

2.972

1.487,9 1.459,4

2005 2006 2007 2008 2009 2010 1S10 1S11

MDF: AVAILABLE EFFECTIVE CAPACITY: 3.660 K m³/YEAR

EFFECTIVE CAPACITY OF THE INDUSTRY: 4.080 K m³/YEAR*

-1,9%

+26,4%

-8-

Source: Associação Brasileira da Indústr ia de Materiais de Construção

* Monthly indicator of sales per formance of the Building Materials Industry

1H1H

**

BUILDING MATERIALS INDUSTRY

0,58%0,58%

7,00%7,00%

5,00%5,00%

2011 2011 ForecastForecast

MarchMarch JulyJuly

SCENARIO

ABRAMAT INDEX* - INTERNAL MARKET

Achieved x Projected ( accumulated x same period last year)

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PERFORMANCE RECONCILIATION OF TOTAL ASSETS AND EQUITY

TOTAL ASSETS 30/June/2011 31/March/2011 30/June/2010

Before adjustments to IFRS 5.503.248 5.080.107 423.141 4.862.693 640.555

Business Combination 744.274 751.460 (7.186) 769.747 (25.473)

Biological Assets 326.188 334.492 (8.304) 286.264 39.924

Employee Benefits 69.881 69.102 779 61.320 8.561

Other adjustments 2.873 2.873 0 (14.785) 17.658

After adjustments to IFRS 6.646.464 6.238.034 408.430 5.965.239 681.225

Variation 1.143.216 1.157.927 (14.711) 1.102.546 40.670

EQUITY (in R$´000) 30/June/2011 31/March/2011 30/June/2010

Before adjustments to IFRS 2.732.339 2.692.433 39.906 2.454.787 277.552

Business Combination 549.068 552.053 (2.985) 564.123 (15.055)

Biological Assets 215.284 220.764 (5.480) 188.934 26.350

Employee Benefits 46.121 45.608 513 40.471 5.650

Other adjustments 19.450 9.675 9.775 61.708 (42.258)

After adjustments to IFRS 3.562.262 3.520.533 41.729 3.310.023 252.239

Variation 829.923 828.100 1.823 855.236 (25.313)

(in R$´000)

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PERFORMANCE INDEBTEDNESS

R$´000

30/06/2011 31/03/2011 Variação 30/06/2010 Variação

Endividamento Curto Prazo 531.969 513.686 18.283 592.778 (60.809)

Endividamento Longo Prazo 1.397.867 1.168.154 229.713 1.053.608 344.259

Endividamento Total 1.929.836 1.681.840 247.996 1.646.386 283.450

Disponibilidades 759.763 501.746 258.017 717.732 42.031

Endividamento Líquido 1.170.073 1.180.094 (10.021) 928.654 241.419

Endividamento Líquido / PL 32,8% 33,5% - 28,1% -

Endividamento Líquido / EBITDA* 1,31 1,33 - 1,48 -

ENDIVIDAMENTO

Domestic Currency

94,1%

Foreign Currency

5,9%

375,8

759,8321,6

342,5

625,8

264,11.929,8

Cash Total

Debt

2011 2012 2013 2014 After

2014

(in R$ mn)

Homebuilders P/ABV last reportedLEVERAGE AND AMORTIZATION SCHEDULE

ORIGIN OF DEBT AMORTIZATION SCHEDULE

* EBITDA in the last 12 months

Variation3/June/2010Variation31/March/201130/June/2011

Short Term Debt

Long Term Debt

Total Financial DebtCash

Net Debt

Net Debt/ Equity

Net Debt/ EBITDA *

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PERFORMANCE RECONCILIATION OF NET INCOME

* Fixed asset revenue

R$́000

After adjustments to IFRS (R$́ 000) 2Q11 1Q11 % 2Q10 % 1H2011 1H2010 %

Consolidated Net Revenue 751.181 659.865 13,8 712.303 5,5 1.411.046 1.318.883 7,0

Gross Profit 253.856 225.018 12,8 284.716 (10,8) 478.874 506.439 (5,4)

Operating profit before financial result 143.411 123.177 16,4 172.259 (16,7) 266.588 301.757 (11,7)

Income before Taxes and Contributions 111.287 94.091 18,3 149.128 (25,4) 205.378 251.839 (18,4)

Net Income 100.383 76.876 30,6 102.720 (2,3) 177.259 171.357 3,4

ROE 11,3% 8,8% - 12,6% - 10,1% 10,6% -

Extraordinary Events * (9.284) 0 - 0 - (9.284) 0 -

Recurrent Net Income 91.099 76.876 18,5 102.720 (11,3) 167.975 171.357 (2,0)

Recurrent ROE 10,3% 8,8% - 12,6% - 9,6% 10,6% -

Reconciliation IFRS to BR GAAP 2Q11 1Q11 % 2Q10 % 1H2011 1H2010 %

Net Income (After adjustments to IFRS) 100.383 76.876 30,6 102.720 (2,3) 177.259 171.357 3,4

Business Combination 2.919 4.072 (28,3) 3.940 (25,9) 6.991 7.333 (4,7)

Biological Assets 5.481 (1.536) (456,8) (6.131) (189,4) 3.945 (3.757) (205,0)

Employee Benefits (515) (1.517) (66,1) (1.809) (71,5) (2.032) (3.618) (43,8)

Other Adjusts 0 0 - 13.086 - 0 21.178 -

Net Income Before adjustments to IFRS 108.268 77.895 39,0 111.806 (3,2) 186.163 192.493 (3,3)

ROE Before adjustments to IFRS 16,0% 11,7% - 18,5% - 13,9% 16,1% -


Recurrent Net Income 98.984 77.895 27,1 111.806 (11,5) 176.879 192.493 (8,1)

Recurrent ROE 14,6% 11,7% - 18,5% - 13,2% 16,1% -

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PERFORMANCE NET REVENUES

Homebuilders P/ABV last reportedORIGIN OF NET REVENUE IN 2Q11

MERCADO

EXTERNO

4%

MERCADO

INTERNO

96%

CHAPA DE FIBRA

8,6%

LOUÇAS

SANITÁRIAS

17,2%M ETAIS

SANITÁRIOS

18,8%

M DF /HDF /SDF /

PISO LAM INADO

34,7%

M DP

20,2%

COM PONENTES

0,5%

2Q11 1Q11 % 2Q10 % 1H2011 1H2010 %

Consolidated Net Revenues 751.181 659.865 13,8 712.303 5,5 1.411.046 1.318.883 7,0

Wood Division 480.680 413.708 16,2 470.694 2,1 894.388 883.663 1,2

Deca Division 270.501 246.157 9,9 241.609 12,0 516.658 435.220 18,7

Homebuilders P/ABV last reportedNET REVENUES (in R$´000)

GEOGRAPHICAL DISTRIBUTION OF SALES CONSOLIDATED NET REVENUES

FOREIGN

MARKET

DOMESTIC

MARKET

LAMINATED FLOORING

HARDBOARD

COMPONENTS

METAL

FITTINGS

VITREOUS

CHINA

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PERFORMANCE RECONCILIATION OF CONSOLIDATED EBITDA

After adjustments to IFRS (R$´000)R$´000

2Q11 1Q11 % 2Q10 % 1H2011 1H2010 %

Consolidated Net Revenues 751.181 659.865 13,8 712.303 5,5 1.411.046 1.318.883 7,0


Depreciation / Amortization / Depletion 75.018 63.969 17,3 57.788 29,8 138.987 115.599 20,2

Change in Fair Value of Biological Assets (27.693) (35.603) (22,2) (46.185) (40,0) (63.296) (76.902) (17,7)

Depletion portion of Biological Assets 35.998 33.275 8,2 36.896 (2,4) 69.273 71.210 (2,7)

Employee Benefits (780) (2.298) (66,1) (2.741) (71,5) (3.078) (5.482) (43,9)

EBITDA 225.954 182.520 23,8 218.018 3,6 408.474 406.181 0,6

EBITDA Margin 30,1% 27,7% - 30,6% - 28,9% 30,8% -

Extraordinary Events* (14.068) 0 - 0 - (14.068) 0 -

Recurrent EBITDA 211.886 182.520 16,1 218.018 (2,8) 394.406 406.181 (2,9)

Recurrent EBITDA Margin 28,2% 27,7% - 30,6% - 28,0% 30,8% -

Recurrent EBITDA by Division

Wood 145.846 110.249 32,3 146.444 (0,4) 256.095 275.339 (7,0)

Deca 66.040 72.271 (8,6) 71.574 (7,7) 138.311 130.842 5,7


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PERFORMANCE RECONCILIATION OF CONSOLIDATED EBITDA

Before adjustments to IFRS R$´000R$´000

2Q11 1Q11 % 2Q10 % 1H2011 1H2010 %

Consolidated Net Revenue 751.181 659.865 13,8 712.303 5,5 1.411.046 1.318.883 7,0



EBITDA 231.966 189.488 22,4 226.153 2,6 421.454 420.817 0,2

EBITDA Margin 30,9% 28,7% - 31,7% - 29,9% 31,9% -


Recurrent EBITDA 217.898 189.488 15,0 226.153 (3,7) 407.386 420.817 (3,2)


Recurrent EBITDA by Division

Wood 147.930 114.200 29,5 151.290 (2,2) 262.130 283.764 (7,6)

Deca 69.968 75.288 (7,1) 74.863 (6,5) 145.256 137.053 6,0


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PERFORMANCE EBITDA RECONCILIATION

After adjustments to IFRS (R$´000)

R$´000

2Q11 1Q11 % 2Q10 % 1H2011 1H2010 %

Shipment (in 1.000 items) 6.259 5.737 9,1 5.933 5,5 11.996 10.697 12,1

Net Revenue 270.501 246.157 9,9 241.609 12,0 516.658 435.220 18,7

Operating profit before financial result 53.057 61.008 (13,0) 62.238 (14,8) 114.065 113.157 0,8


Employee Benefits (233) (858) (72,8) (930) (74,9) (1.091) (1.805) (39,6)

EBITDA 66.040 72.271 (8,6) 71.574 (7,7) 138.311 130.843 5,7

EBITDA Margin 24,4% 29,4% - 29,6% - 26,8% 30,1% -

Extraordinary Events 0 0 - 0 - 0 0 -

Recurrent EBITDA 66.040 72.271 (8,6) 71.574 (7,7) 138.311 130.843 5,7


Before adjustments to IFRS

Recurrent EBITDA 69.968 75.288 (7,1) 74.863 (6,5) 145.256 137.053 6,0


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PERFORMANCE DECA DIVISION HIGHLIGHTS

93%

89%

17.000 K

items/year

17.000 K

items/year

9.800 K

items/year

9.800 K

items/year

METAL

FITTINGS

VITREOUS

CHINA

INSTALLED CAPACITY & OCCUPANCY RATE IN 2Q11

11.996

10.697

5.933 5.529 5.413 5.7376.259

2T10 3T10 4T10 1T11 2T11 1S10 1S11

+12,1%

+9,1%

SHIPMENT (in ‘000 items)

9 p la n ta s

LOCALIZATION OF PLANTS

2Q10 3Q10 4Q10 1Q11 2Q11

9 PLANTS

METALS

VITREOUS CHINA

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CONSOLIDADOCAPEX CONSOLIDATED

891,2

341,7

427,0459,6

343,6

2007 2008 2009 2010 2011E

R$ 2,9 billion

800,0

WOOD

39%

FOREST

18%DECA

42%

Estimated

Accomplished

in 1H2011

CAPEX in 1H2011

CORPORATE 1%

456,4

CAPEX (R$ mn)

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CAPEX DECA DIVISION

Metal Fittings - SPMetal Fittings - SP Metal Fittings Jundiaí - SP Vitreous China- PE

Homebuilders P/ABV last reportedEVOLUTION OF NOMINAL CAPACITY (´000 items/year) & CAPEX

14.440 15.600 15.800 15.800 17.000 18.200

3.8006.200 7.200 7.200

9.80012.200

2007 2008 2009 2010 2011 2012

Metais Louças Sanitárias

18.200

21.800 23.000 23.000

26.80030.400CAGR: 10,8%

Investments R$ 430 million Vitreous China

+ 1,8 M items/year: acquisition of Elizabeth, PB (Feb/11)

+ 0,8 M items/year: new furnace in Cabo de Santo Agostinho, PE ( Apr/11)

+ 2,4 M items/year: reactivation and expansion of the Queimados unit, RJ (2012)

Metals

+2,4 M items/year (2011/2012)

Robotic center of tuning

Milling machine

Forging press

New Galvanoplastic equipment

(*) Vitreous China in Queimados:

ORIGINAL PROJECT: CAPEX R$ 100mn, Capacity: 1.9 million pieces / year

REVISED PROJECT: CAPEX R$ 130mn, Capacity: 2.4 million pieces / year

OBJECTIVE:

INCREASE OF PRODUCTION FOR HIGH AND MIDDLE INCOME SEGMENTS

(*)

Vitreous ChinaMetal

mn

mn

mn

mn

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- Green Seal (FSC): The first company in Latin America to be certified (1995)

- ISO 14001: nursery and forest areas of Botucatu

PRACTICES

• 229 K hectares of land (own and leased)

• 160,9 K hectares of planted forests

• 268 million trees planted

• 56 trees planted per minute

• Cut between 6 and 7 years

• Low distance between forests

• Increased productivity

• Conservation of native forests

Evolução da Produtividade em Novas Florestas Eucalipto

- São Paulo -

2030

40 44 4452514845

0102030405060

Anos

60

Anos

80

2000 2005 2006 2007 2008 2009 2010

Ano base

IMA

(m

³/h

a.an

o)

+160%

Project that aims finding more efficient ways for using the planet. The water saving ratio, when adopting such methodology, is about 30%

After LEED (Leadership in Energy and Environment Design) conformity evaluation, 9 product lines of Deca were awarded the Sustentax

label with items that help saving up to 80% of water usage

GBC Brazil has as its mission to help developing a sustainable construction industry in Brazil

New Developments in Productivity in Eucalyptus Forests

Year base

SUSTAINABILITY

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SUSTAINABILITY

Annual and Sustainability Report 2010 with GRI (Global Reporting Initiative) APPLICATION LEVEL A

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CORPORATE GOVERNANCE CAPITAL STRUCTURE

39,9%

17,8%

2,0%

12,7%

27,4%

0,2%

Grupo Itaúsa

Grupo Ligna

Fundos de Pensão

Fundos de Investimentos

Investidores Estrangeiros

Tesouraria

Total outstanding shares:

550.035.331(1)

(1) Shares in treasury: 1.199.486

100% common shares (1 share, 1 vote)

Free Float 42,6% ON

Divided Policy: 30% of the adjusted Net Income

Board of Directors: 9 9 MembersMembers, 3 of , 3 of which being Independentwhich being Independent

Local Pension Funds

Other Local Investors

Foreign Investors

Treasury

MAJOR SHAREHOLDERS IN JUNE 2011

-25-

0

50

100

150

200

250

300

jun-0

9jul

-09

ago-

09

out-0

9

nov-

09

dez-

09

jan-1

0

mar

-10

abr-1

0

mai-

10

jun-1

0

ago-

10

set-1

0

out-1

0

nov-

10

dez-

10

fev-1

1

mar

-11

abr-1

1

mai-

11

jun-1

1

DTEX Base 100 IBOV Base 100

R$ 13,21

62.337

+111,0 %

+21,3 %

MARKET CAP: R$ 7,3 billion

VALUE CREATIONCORPORATE GOVERNANCE

DURATEX e IBOVESPA base 100 (19.June.2009 – 30.June.2011)

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The 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 also brings general information about Duratex S.A. and its markets. 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 herein.

The Company can give no assurance that expectations disclosed in this presentation

will be confirmed.

August, 2011

DISCLAIMER

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Investor Relations

www.duratex.com.br

Duratex - Corporate Presentation 2Q11

Investor Relations

Transcript of Duratex - Corporate Presentation 2Q11