2016 06-30 - 2 q16-institucional [eng] logo regular
TRANSCRIPT
INSTITUTIONAL PRESENTATION
2Q16
June 30th, 2016
COMPANY
FIREARMS &
Accessories
2Q16 FINANCIAL
RESULTS REESTRUCTURING
HELMETS &
OTHERS
- Pistols
- Revolvers
- Long Guns
- Accessories
- Helmets for
Motorcyclists
- Motorcycle case
- Accessories
HELMETS FIREARMS OTHERS
- Plastic Containers
- Metal Injection
Molding (M.I.M.)
LARGEST MANUFACTURER OF
REVOLVERS
LEADING NATIONAL HELMETS’
PRODUCTION
BRAZILIAN COMPANY WITH METAL
INJECTION MOLDING TECHNOLOGY
COMPANY
OVERVIEW
FACILITIES
Taurus Holdings Inc, Miami – Florida Firearms and M.I.M.
Forjas Taurus S,A, São Leopoldo – RS Handguns, Forgery, Machining and M.I.M.
Taurus Blind. Nordeste Simões Filho – BA Helmets
Taurus Blindagens Mandirituba – PR Helmets and Plastics
COMPANY
3,200 Employees
1980 - Beretta operational acquisition 1982 - IPO 1983 - Taurus International
1939 –Forjas Taurus Foundation
1970 - Foreign investors control 1977 – Management buyout
1999 – Pollymer and titanium guns 1997 – Rossi – Revolver
2015 – Beginning of restructuring process - 100% of production increase - Beginning of debt renegotiation - SAP Implementation - Beginning of plants consolidation
2014 – New Shareholder: Companhia Brasileira de Cartuchos (CBC)
2012 - Heritage Manufacturing Inc. Acquisition - Acquisition of SteelInject
2011 - Admission to Level 2 of BM&FBOVESPA (Corporate Gov,)
10´s
30´s
70´s
80´s
90´s
00´s 2008 – Rossi – Long Guns 2004 – Famastil participation acquisition
2016 A NEW COMPANY
New Headquarter in São Leopoldo
New products portfolio
New production increase
SAP Go live
TIMELINE
COMPANY
CBC
Global View: • Net Revenue: R$ 2.3 Bi (2015) • Plants in Brazil, Germany and Republic Czech Republic • Present in over 100 countries • 3 Distribution centers • Over 3,600 employees • 4 brands: CBC, MEN, Magtech e Sellier & Bellot
Potential Synergies • Customer portfolio • Distribution Channels • Management Synergies • Production cost reduction • International expansion • Technology and know-how transferring • Brand strength
CBC – The Company
CORPORATE GOVERNANCE
100% TAG ALONG
DIVIDENDS 35%
MINIMUM OF 40% INDEPENDENT
BOARD MEMBERS
VOTING RIGHTS TO PREFERRED SHARES
(In Relevant Topics)
COMPANY
BOARD AND COMMITTEES
Jorio Dauster Magalhães e Silva
Fernando José Soares
Estima
João Verner Juenemann
Chairman (Independent)
Vice – Chairman
Independent
40% of Independent
Members
Audit and Risks Committee
João Verner Juenemann Fábio Luiz Munhoz Mazzaro Thiago Piovesan (CFO & IRO)
COMPANY Fábio Luiz Munhoz Mazzaro
Thiago Piovesan
STATUTORY AND EXECUTIVE BOARD OF DIRECTORS
COMPANY
CEO* Marco Aurélio Salvany
CFO and IRO* Thiago Piovesan
CHIEF OF SALES MARKETING* Salésio Nuhs
INTEGRATED ENGINEERING
DIRECTOR Cristiano Macedo
MARKETING DIRECTOR
Eduardo Minghelli
CEO – TAURUS HOLDINGS INC, Anthony Acitelli
OPERATIONS DIRECTOR
Jeferson Nargony
PURCHASING DIRECTOR
Ricardo Machado
*Statutory Board elected in 06.29.2016
SALLES DIRECTOR
Luiz Antônio M. de Freitas Horta
FISCAL COUNCIL
PERMANENTLY INSTALLED COMPANY
Amoreti Franco Gibbon
Alternate: Edson Pereira Ribeiro
Haroldo Zago
Alternate: Heldo Jorge dos Santos Pereira Junior
Mauro César Medeiros de Mello
Alternate: Nildo Teixeira Freire
Juliano Puchalski Teixeira
Suplente: Carlos Eduardo Bandeira de Mello Francesconi
Rafael de Souza Morsch
Suplente: Tarso Padua Dutra
SHAREHOLDERS
COMPANY
SHAREHOLDERS PARTICIPAÇÃO
TOTAL ON PN
CBC PARTICIPAÇÕES S.A. 70.99% 91.91% 2.51%
MARCOS BODIN DE SAINT ANGE COMNENE 5.60% 0.02% 23.84%
ANTONIO MARCOS MORAES BARROS 3.84% 0.15% 15.91%
PREVI 2.07% 1.28% 4.64%
ESTIMAPAR 2.50% 3.26% 0.00%
ZENITH ASSET MANAGEMENT 1.29% 0.00% 5.50%
OTHERS 13.71% 3.38% 47.60%
CAPITAL STOCK QUANTITY
ORDINARY SHARES 44,642,459
PREFERRED SHARES 13,636,110
TOTAL 58,278,569
EMPRESA
LAST CORPORATE EVENTS
• Exercise of (i) 10.060.829 subscription bonus ON owned by CBC and (ii) 634.489 subscription
bonus PN owned by Marcos Bodin de Saint Ange Comnene approved in 06.02.2016 Capital Increase of R$ 17.5 million; Issuance of 10.060.829 new common shares and 634.489 preferred shares; New social capital consists of 58,278,566 shares, being 44,642,456 common shares and 13.636.110 preferred shares;
• Exercise of 7.135.000 subscription bonus ON owned by CBC approved in 01.06.2016 Capital Increase of R$ 11.7 million; Issuance of 7,135,000 new common shares; New social capital consists of 47,583,248 shares, being 34,581,627 common shares and 13,001,621 preferred shares;
• Statutory reform approved at SGM in 12.22.2015
• Headquarter transferring to São Leopoldo/RS/Brazil approved at SGM in 12.04.2015
• Capital increase approved in 09.29.2015 Capital increase of R$ 39.9 million;
• Board members and statutory directors election Board members elected at SGM in 07.15.2015; Statutory directors elected at board meeting in 06.29.2015.
COMPANY
FIREARMS &
Accessories
2Q16 FINANCIAL
RESULTS REESTRUCTURING
HELMETS &
OTHERS
FIREARMS & Accessories
IMPACT FACTORS
SEASONALITY
DEMAND
ECONOMICS
COSTS
• Trade Fairs • Hunting Season
• Innovation • Quality • Actions
• Currency • Macroeconomics
• Labour • Raw Material
FIREARMS – 82% Consolidated Net Revenue – 2T16
FIREARMS & Accessories
Law Enforcement
Consumer Market
Consumer Market
Law Enforcement
Consumer Market
9% Firearms Revenue
86% Firearms Revenue
5% Firearms Revenue
NICS – NATIONAL INSTANT CRIMINAL BACKGROUND CHECK SYSTEM
Source: NSSF
FIREARMS & Accessories
PEERS
FIREARMS & Accessories
PRODUCT GENERATIONS
4th Generation • Long Guns (restricted use)
3rd Generation • Long Guns
2nd Generation • Pistols
1st Generation • Revolvers
FIREARMS & Accessories
MARKETING & SALES
FIREARMS & Accessories
AWARDS
2012 FIELD & STREAM BEST OF THE BEST AWARD TAURUS TRACKER 992
2011 NRA: HANDGUN OF THE YEAR
PT 740 SLIM
2013 MANUFACTURER OF THE YEAR
TAURUS INTERNATIONAL MFG, INC,
FIREARMS & Accessories
BRAZILIAN MARKET
FIREARMS & Accessories
PUBLIC SECURITY
Source: Public Security 2015 Report (data from 2014)
FIREARMS & Accessories
- Police Force Federal Police > 14,000
Civil Police > 118,000
Military Police > 425,000
City Guard * > 100,000
*Law nº 13,022 – August, 2014
- Armed Forces Armed Forces > 327,000
MARKET SHARE
90% OF HANDGUNS MARKET SHARE IN BRAZIL PEERS: CBC AND IMBEL 10% OF MARKET SHARE
FIREARMS & Accessories
TAURUS DEFENSE - Targets
TAURUS
DEFENSE
Act as the link between TAURUS and Defense Ministry and
Armed Forces;
Represent TAURUS in specific forums;
Contribute on the process of consolidation of the TAURUS’
brand to the concepts of quality, safe, security and reliability;
Contribute on the sales growth, in particularly, to Armed Forces;
Manage the work related to the relevant legislation to the EED
(Strategic Defense Companies) and others inherent legal
frameworks of the company’s activity,
TAURUS – EED since November 28th, 2013
TAURUS
DEFENSE
TAURUS
DEFENSE
Política
Nacional
de Defesa
Prioritize the development of independent technological capabilities;
Subordinate commercial considerations to the strategic imperatives;
Prevent the polarization of Defense Industrial Base between advanced research and routine production;
Use the development of defense technologies as a focus for the development of operational capabilities,
BRAZILIAN DEFENSE STRATEGY – Legal Base
CONCEPTS
TAURUS
DEFENSE
PRODE: all good, service, construction or information, including weapons,
ammunition, transportation or communications, uniforms and individual or
collective materials used in the defense activities, excepts the
administrative use;
PED: all PRODE that, due the technology content, the difficulty to obtaining
or the indispensability, is of strategic interest for national defense;
CONCEPTS
TAURUS
DEFENSE
EED: all companies that are certified by the Defense Ministry that meet the
following conditions:
Be aimed at carrying out research activities, projects, development, industrialization,
service, production, repair, maintenance, overhaul, conversion, modernization or
maintenance of PED in Brazil;
Have the headquarters in Brazil, its management and the industrial establishment;
Dispose, in Brazil, of proved own technology knowledge or complemented by
partnership agreement with the Scientific and Technological Institution;
Ensure, that foreign shareholders can not act on General Shareholders Meetings with
number of votes representing more than 2/3 of the total votes exercisable by Brazilian
shareholders; and
Ensure production continuity in Brazil,
INCENTIVES
TAURUS
DEFENSE
RETID: Special Tax System for Defense Industry
PIS/PASEP and COFINS exemption
IPI exemption
Source: Law N, 12,598/2012
The EED will have access to special tax system and
funding for programs, projects and actions related to
goods and services of national defense under the law terms ,
FOREIGN MARKET
FIREARMS & Accessories
ATHLETES SPONSORSHIP
FIREARMS & Accessories
Mauro Cauduro
Outstanding positions on
Brazilian competitions
Jessie Duff
Champion of the 2014
World Shoot XVII
Taurus’ team captain
EXPORTS TO OTHER COUNTRIES (ex-USA)
EXPORTS FOR
MORE THAN
70 COUNTRIES
FIREARMS & Accessories
GROWTH STRATEGIES
FIREARMS & Accessories
Specific products for Consumer and Law Enforcement markets
Develop new products for the US market
Improve the after-sale: maintance, retrofit and training
Increase the sales for civilian brazilian market
Improve the Taurus brand perception
COMPANY
FIREARMS &
Accessories
2Q16 FINANCIAL
RESULTS REESTRUCTURING
HELMETS &
OTHERS
IMPACT FACTORS
HELMETS
& Accessories Motorcycles Sales
Car substitution for motorcycle
Mobility and traffic saving
Delivery Services
Motocab
Credit Defaults’ growth
Restricted credit concession
% of down payments’ value
Number of installments
Motorcycle maintenance X Helmet
acquisition
Inexistence of financing for used low
cilinder motocycles
CLIENTS
Fleet Owners Wholesale Magazines Retail Governments
Trade Representatives
HELMETS
& Accessories
PEERS Nome Logo País Nome Logo País Nome Logo País
AGV Itália HELD Alemanha NAU Portugal
AIROH Itália HELT Brasil NOLAN Itália
ARAI Japão HJC EUA NORISK Brasil
ASTONE França ICON EUA ONE EUA
BELL EUA KRAFT Brasil PEELS Brasil
BIEFFE Brasil LAZER Bélgica PRO TORK Brasil
CRAFT Alemanha LS2 Espanha SHARK França
EBF Brasil MARUSHIN Itália SHOEI Japão
FLY Brasil MHR China STARPLAST Brasil
FOX EUA MIXS Brasil TAURUS Brasil
HARLEY-
DAVIDSONEUA MT Espanha VAZ Brasil
10%
OTHERS
Market Share Brazil
45%
45%
HELMETS
& Accessories
COMPETITIVE ADVANTAGES
Quality Raw material from recognized suppliers
Compliance with brazilian quality standard
(NBR 7471/2001)
Production scale
Market Leadership with San Marino Product
Design Updated and innovative design
Artwork with excellent finishing
HELMETS
& Accessories
GROWTH STRATEGIES
Explore the foreign market
Evaluate the opportunities of producing helmets with higher added value
Increase the marketing actions: exhibitions, specific magazines, others,
HELMETS
& Accessories
PLASTICS CONTEINERS
A NEW
CONSCIOUSNESS
IN WASTE COLLECTION
METALLURGY
& PLASTICS
PLASTICS CONTEINERS - CLIENTS
Trade Representatives
Contractors Resale Residentail Condominums
Industries Prefectures
METALLURGY
& PLASTICS
PLASTICS CONTEINERS– PEERS
Other manufacturers not standardized and
imported
Contemar e JSN
METALLURGY
& PLASTICS
M.I.M. – METAL INJECTION MOLDING
M.I.M. IS TECHNOLOGY ON TAURUS’ PRODUCTS
METALLURGY
& PLASTICS
M.I.M. – PROCESS
METALLURGY
& PLASTICS
M.I.M. – CLIENTS
DEFENSE & SECURITY
OTHERS
METALLURGY
& PLASTICS
COMPANY
FIREARMS &
Accessories
2Q16 FINANCIAL
RESULTS REESTRUCTURING
HELMETS &
OTHERS
2Q16 FINANCIAL RESULTS
HIGHLIGHTS
47
EBITDA (R$ 11.9) million (2Q16) X R$ (12.5) million (1Q16) X R$ 12.1 million (2Q15) Key Impacts Sale of Investment (Famastil quotes) R$ 4.9 million (Net Accounting Loss) Carter Case: attorneys’ fees confirmation R$ 10.3 million (Provision)
Net Revenue R$ 198.3 million 6.9% (2Q16/1Q16) 13.0% (2Q16/2Q15)
Firearms Market US Market: R$ 140.8 million 4.7% (2Q16/1Q16) 16.8% (2Q16/1Q16) Domestic Market: R$ 14.4 million 61.8% (2Q16/1Q16) 25.8% (2Q16/1Q16) Others Markets: R$ 8.0 million 100.0% (2Q16/1Q16) 95.1% (2Q16/1Q16)
Highlights Execution of agreements for about USD$150 million debt renegotiation Production increase 40% in the 2Q16 x 1Q16 Sale of Famastil quotes (35%) generating R$ 5 million cash Capital increase of R$ 17.5 million 10.1% average US Dollar depreciation 2Q16 x 1Q16
ECONOMIC AND FINANCIAL INDICATORS
2Q16 RESULTS Ratios 2Q16 1Q16 2Q15 1H16 1H15
Variation
2Q16/1Q16 2Q16/2Q15 1H16/1H15
Net Revenue 198.3 185.5 175.5 383.8 349.0 6.9% 13.0% 10.0%
Domestic market 48.3 46.0 49.3 94.3 109.8 5.0% -2.0% -14.1%
Foreign market 150.0 139.5 126.2 289.5 239.2 7.5% 18.8% 21.0%
COGS 134.1 139.2 120.5 273.3 258.8 -3.7% 11.3% 5.6%
Gross Profit 64.2 46.3 55.0 110.5 90.2 38.7% 16.7% 22.5%
Gross Margin - % 32.4% 25.0% 31.3% 28.8% 25.8% 7.4 p.p. 1.1 p.p. 3.0 p.p.
Operating Expenses -81.2 -70.8 -51.3 -152.0 -161.6 14.7% 58.3% -5.9%
Operating Profit (EBIT) -17.0 -24.5 3.7 -41.5 -71.4 -30.6% - -41.9%
EBIT Margin - % -8.6% -13.2% 2.1% -10.8% -20.5% 4.6 p.p. -10.7 p.p. 9.6 p.p.
Net Financial Income/Loss 29.9 19.8 -3.5 49.7 -71.8 51.0% - -
Depreciation and amortization 5.0 12.0 8.4 17.0 16.9 -58.3% -40.5% 0.6%
Net Income/Loss - Consolidated 14.6 -3.3 4.7 11.3 -145.2 - 208.4% -
Net Consolidated Margin 7.3% -1.8% 2.7% 2.9% -41.6% 9.1 p.p. 4.6 p.p. 44.5 p.p.
EBITDA -11.9 -12.5 12.1 -24.4 -54.5 -4.8% - -55.2%
EBITDA Margin - % -6.0% -6.7% 6.9% -6.4% -15.6% 0.7 p.p. -12.9 p.p. 9.3 p.p.
Total Assets 954.9 924.2 981.4 954.9 981.4 3.3% -2.7% -2.7%
Provision for Unsecured Liability -80.7 -86.5 -57.1 -80.7 -57.1 -6.7% 41.4% 41.4%
COMPANY
FIREARMS &
Accessories
2Q16 FINANCIAL
RESULTS REESTRUCTURING
HELMETS &
OTHERS
2016: A NEW CYCLE
RESUMPTION OF COMPANY
FUNDAMENTALS
REDUCING COMPANY
COMPLEXITY
FOCUS ON
PROFITABILITY
RESIZE THE INDUSTRIAL
PROCESS
REESTRUCTURING
2016: A NEW CYCLE
OPERATIONAL RESTRUCTURING
- New production concept
- Higher production capacity
- Greater efficiency and quality
FINANCIAL
RESTRUCTURING
- Cash generation
- Debt renegotiation
- Capital increase
- Operations transferring to SL
- Long guns consolidation
- Respect for the environment
SAP
REESTRUCTURING
2016: A NEW CYCLE
New Firearms Production Concept Gunsmith Production Line Interchangeability of parts Higher production capacity Greater efficiency and quality
Plants Consolidations Long guns operations consolidation Operations transferring to São Leopoldo – RS – Brazil Respect for the environment
SAP Implementation Process based Greater management control Greater integration among departments Sinergy gains
REESTRUCTURING
REESTRUCTURING
2016: A NEW CYCLE
New Headquarter Address: Av. São Borja, 2181 – CEP: 93.032-000 – São Leopoldo – RS – Brazil
JULIAN BATISTA
IR Analyst
+55 51 3021 3079
www.taurusri.com.br
THIAGO PIOVESAN
CFO & IRO
MARCO AURÉLIO SALVANY
CEO