conference call 2 q12 inglês
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Conference Call – Earning Results 2Q12 – 08/10/2012
2 2
“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.”
Disclaimer
3 3
• Recognitions: the Eternit’s Governance is awarded againIR Magazine Award – best program for individuals investorsAPIMEC 2012 Award
• Reduction of sales volume:Chrysotile Mineral: 6.6%Fiber Cement: 15.0%Concrete Tiles: 7.8%
• Net Consolidated Revenue amounted to R$ 211.0 million, a 5.0% improvement
• EBTIDA was R$ 39.3 million, a growth of 24.4%
• Net Income was R$ 27.0 million, a growth of 28.7%• Margins:
Gross margin of 44% - (+ 6 p.p.)EBITDA margin of 19% - (+3 p.p.)Net margin 13% - (+ 3 p.p.)
Highlights of 2Q12 (when compared to 2Q11)
4 4
Eternit Group
Activity
Manufacture of fiber cement and commercialization of bathroom
chinaware and metallic fittings and components for construction systems
Chrysotile Mining
Manufacture of concrete tiles and commercialization of sanitary ware
Industrial Units 4 1 1 6
Market Share
Leader in fiber cement –32% of Market Share
The world's 3rd
largest – 15% of Market Share
Leader in concrete tiles – 35% of Market
Share5th largest of Brazil in sanitary wares
Capacity 1 million tons / fiber cement 300 thousand tons 10 million m²
Capacity Used Fiber cement - 80% 100% Around 60%
The largest and most diversified roof coverings industry in Brazil - 2012
5 5
Diversified Portfolio – Chrysotile Mineral
Main use of the crhysotile mineral
99% of the world production of chrysotile is
used for fiber cement products:
• Tiles;
• Covering plates;
• Wall panels;
• Water pipes and water tanks; and
• Etc.
6 6
Diversified Portfolio – Fiber Cement Tiles
7 7
Diversified Portfolio – Metallic Fittings
8 8
Diversified Portfolio - Components for constructions systems
9 9
Diversified Portfolio – Water tanks and filters
1010
Diversified Portfolio – Bathroom chinaware and lavatory seats
1111
Diversified Portfolio – Metal Fittings
1212
Diversified Portfolio – Synthetic Marble
1313
Diversified Portfolio – Concrete Tiles
1414
Diversified Portfolio – Full Roofing Solutions
SAMA - Overview
1616
Global Market – Chrysotile Mineral - 2011
Global Consumption (MM of Ton)
Canada 4%
Russia – 50%
Kazakhstan – 11%
China – 20%
Brazil 15%
2011
2.2
2008
2.4
2007
2.4
2006
2.3
2005
2.3
2004
2.1
2009
2.1
2010
2.2
1717
1H10 1H11 1H12 2Q10 2Q11 2Q12
67.3 63.5 70.834.1 37.4 36.0
77.6 84.7 76.3
40.4 42.0 38.2
144.9 148.2 147.1
74.5 79.4 74.2
Sales of Chrysotile Mineral (thous. tons)
Domestic Market Foreign Market
- 6.6%6.6 %
- 0.8 %2.3 %
2Q12 x 2Q11
• Domestic Market – reduction of 9.0%
• Foreign Market– reduction of 4.0%
1H12 x 1H11
• Domestic Market – reduction of 9.9%
• Foreign Market – increase of 11.5%
Eternit and Tégula - Overview
1919
Residential Market Industrial and Commercial Market
Total Market Market Evolution (MM m2)
Metallic12%
Ceramics35%
Fiber cement47%
Other
2%
Fiber cement38%
Metallic40%
Other11%
Ceramics11%
Concrete4%
Ceramics45%
Fiber cement
51%
Concrete
4%
Covering market – Brazil - 2011
2005 2006 2007 2008 2009 2010 2011
406 425459
505 495534
5618%
5%10% -2% 8%
Source: Estimation of the Production Chain of Fiber Cement
5%
2020
Sales of Fiber Cement* (thous. tons)
* Includes components for construction systems
- 11.3 %6.0 %
- 15.0 %15.7 %
1H10 1H11 1H12 2Q10 2Q11 2Q12
389.5 412.9366.3
181.7 210.2 178.7
2121
Concrete Tiles (thous. square meters)
*Tégula was acquired on February 11 2010. The amount of 477 thousand m2 doesn’t refer to Eternit.
18.5 %
14.8 % -7.8 %
-1.9 %
1H10* 1H11 1H12 2Q10 2Q11 2Q12
477
1,887
2,3642,801 2,773
1,300 1,493 1,376
Economic and Financial Performance
2323
Consolidated Net Revenue (R$ million)
Domestic Market Foreign Market
13.2 % 5.0 %
11.2 % 8.8 %
1H10 1H11 1H12 2Q10 2Q11 2Q12
54.2 44.4 73.8 27.0 25.3 39.8
294.1 342.9347.4
150.6 175.7 171.2
348.3387.3 421.2
177.6 201.0 211.0
2424
Net Revenue Breakdown
(*) Other: metallic roofing tiles, polyethylene water tanks, lavatory seats and metallic bathroom fittings, water pipe filters, synthetic marble and components for construction systems.
2007 1H12
Chrysotile Mineral32.3%
Fiber cement50.0%
Concrete tiles and Accessories
10.3%
Bathroom Chinaware
4.8%
Others (*)2.6%
New Business17.7%
2525
COGS Breakdown – 2Q12
(*) - Cement (46%), Chrysotile Ore (43%) and other (11%)
(***) - Cement (56%), sand (32%) and other (12%)
(**) – Fuel, explosives, packaging, among other
Fiber Cement Chrysotile Mineral
Concrete Tiles
Raw material (*) 63%
Workforce10%
Depreciation4%
Others costs20%
Energy3%
Materials (**) 28%
Workforce49%
Depreciation5%
Others costs10%
Energy8%
Raw material (***)48%
Workforce17%Depreciation
11%
Others costs20%
Energy4%
2626
EBITDA (in R$ million)
-13.1 % 24.4 %
-19.6 % 47.5 %
1H10 1H11 1H12 2Q10 2Q11 2Q12
72.0
57.9
85.5
36.3 31.539.3
2727
Net Income (in R$ million)
- 20.4 % 50.5 %
- 13.7 % 28.7 %
1H10 1H11 1H12 2Q10 2Q11 2Q12
47.5
37.8
56.9
24.321.0
27.0
2828
Margins
Net MarginEBITDA MarginGross Margin
45%
38%
44%46%
38%
44%
21%
15%
20% 20%
16%19%
14%
10%
14% 14%
10%13%
1H10 1H11 1H12 2Q10 2Q11 2Q12
Capital Expenditures
3030
Investiments
Acquisition Tégula
Capacity Increase – Eternit
Molds and New Business
Capital Expenditures (in R$ million)
Equipment and Trucks - SAMA
Land acquisition – Ceará State
Capacity Increase – Tégula
1H10 1H11 1H12 2Q10 2Q11 2Q12
2112 11 13
6 6
4
34
3
4
52
210
10
59
19 21 17
11 16
3131
Development unit of Synthetic Marble
Production LineResin SiloSynthetic Marble
Products
3232
Location of Multiproduct Plant - Ceará State
Land of 400 000 m²
35 km15 km
Linha Gás Natural
Cimenteira
3333
Share of 40%Knowledge of manufacturing and
products technologyLow cost production
Expertise in new product development
Expertise in new market development
Share of 60%Knowledge of the local market
Strong distribution networkEfficient logisticsBrand strength
Investment ResourcesKnowledge in Brazil
Investments: R$ 97 millionCapacity: 1,500,000 pieces per year
Status of the building: initiatedEnd building: December 2013
Forecast of Gross Revenue at full capacity: approximately R$ 127 millionStraight Workforce: 330 employees
Multi-Product Unit in the Ceará State - Bathroom Chinaware Plant
Joint-Venture: Companhia Sulamericana de Cerâmica S. A.
Capital Markets
3535
Clubs. Funds and Foundations
Ownership Structure – Jul/12
Shareholding Structure
Geração L. Par. F. I. A. 15.27%
Luiz Barsi Filho 13.47%
Victor Adler + VIC DTVM 8.50%
Management 1.59%
Treasurystock 0.03%
FREE-FLOAT 76.10%
Individual InvestorsCorporationsInvestors Abroad
Advisory Board Member Since
Guilherme Affonso Ferreira 2011Mário Fleck 2011Victor Adler 2012
Board of Directors Member Since
Sérgio Alexandre Melleiro (*) 1993Lírio Albino Parisotto (*) 2004
Élio A. Martins 2007Luiz Barsi Filho 2008
Marcelo Munhoz Auricchio 2011Luis Terepins (*) 2011
Benedito Carlos Dias da Silva (*) 2012(*) Independent member
59.8%
2.2%
10.50%
27.5%
3636
(*) Until July 2012
Liquidity
Number of shareholders Average Traded Volume (R$ thousand)
2009 2010 2011 2012(*)
6,6155,910
6,633 6,627
2009 2010 2011 2012(*)
1,108975
794
1,482
3737
Policy of Remuneration - Net Income X Distributed Earnings
In R$ million
76 % 79 % 74%Pay Out 63%
Net Income Dividends and Interest on own capital (*) Until June 20122009 2010 2011 2012*
73
102 97
57 55
81 72
36
3838
Policy of Remuneration - Dividend Yield
(*) Unitl June 2012
Source: Eternit e BACEN Savings (**)Eternit – Yield(*) CDB (**)
2009 2010 2011 2012
15.1%
9.3%
7.5%6.7%6.9% 6.9%
7.5%
1.7%
9.1% 8.8%
10.9%
2.3%
3939
Eternit’s Shares Performance (Dec/06 – Jul/12)
Between 12/28/2006 to 7/31/2012, Eternit’s shares appreciated 79.0% and IBOVESPA appreciated 26.1%.
In the same period, including the payment of dividends and interest on own capital, Eternit’s shares appreciated 211.5%.
56,097
R$ 10.85
40
60
80
100
120
140
160
180
200
220
Dec-06
Feb-07
Apr-07
Jun-07
Aug-07Oct-
07Dec
-07Feb
-08Apr-0
8Ju
n-08Aug-08Oct-
08Dec
-08Feb
-09Apr-0
9Ju
n-09Aug-09Oct-
09Dec
-09Feb
-10Apr-1
0Ju
n-10Aug-10Oct-
10Dec
-10Feb
-11Apr-1
1Ju
n-11Aug-11Oct-
11Dec
-11Feb
-12Apr-1
2Ju
n-12
ETER3
IBOVESPA
Outlook
4141
Favorable Moment for Civil Construction
4242
11,6%12,0%
10,6%10,1% 9,9%
8,7% 8,5%7,4%
6,4%5,7%
936
1.4101.585 1.645 1.706 1.735 1.777 1.835 1.889 1.934 1.984
303.028321.163
338.501 365.331377.361
404.751
2005 2006 2007 2008 2009 2010 2011 2012
300 350
380 415
465 510
545
622 CAGR: 11.0% CAGR: 5.96%
Economic Figures
Minimum Wage (R$) Workforce (R$ million)
Credit Availability Unemployment Rate - BrazilGovernment, Industry, Housing, Rural, Commerce, Credit
Individuals (R$ billlion)
Sou
rce:
BA
CEN
e I
BG
E
4343
Economic Figures – GDP vs. Eternit
Source: BACEN. (E) – Estimated - The growth in Eternit’s gross consolidated revenue was deflated by the IGP-M.
44
Reduction in the interest rates for the finance of construction materials
To stimulate the sales of construction materials, Caixa Econômica Federal (Federal Savings Bank - CEF) announced in July 2012:
• reduction in the interest rates for the line of finance for the acquisition of construction materials – Construcard;
• extension of repayment conditions from 60 to 96 months; and
• R$ 5 billion of funds to be made available for this year, with no set maximum limit on financing – this will be dependent on each client’s monthly repayment capacity.
Construcard can be used to: the purchase of construction materials in general, acquisition of fitted furniture and solar heating systems.
Currently there are more than 65 thousand sales outlets in Brazil with commercial agreements enabling to operate this line.
Source: Caixa Econômica Federal – www.caixa.gov.br
Chrysotile – The Brazilian Mineral
4646
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
4747
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 be attributed 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.
4848
Public Hearing
In the light of a request made by the National Confederation of Workers in Industry – CNTI, the Federal Supreme Court – STF has arranged a public hearing between August 24 and 31, 2012 to debate the use of asbestos.
With the request from the CNTI is seeking to involve society on the issue of asbestos in the light of its importance to Brazil. Representatives of government bodies, medical doctors and scientists of various nationalities, technicians and sector employees will take part in the hearing.
Subsequently, the Minister-rapporteur, Marco Aurélio de Mello, will have the necessary time to decide his vote, after which the Direct Actions of Unconstitutionality - ADIs (4066 and 3937) can by submitted for judgment on merit by a plenary session of the court before the end of the year.
Greater details can be found by acessing www.stf.jus.br (in Portuguese)
49
IR Magazine Brazil Awards 2012: For the second consecutive year, IR Magazine awarded Eternit’s Individual Investor Relations Program as the best of Brazil in the small & mid-cap category (companies with sales of less than R$ 3 billion).
APIMEC 2012 Award: APIMEC – Association of Capital Markets Analysts and Investment Professionals – national chapter, awarded the APIMEC Prize 2012 to Eternit in the B category, companies with consolidated revenue of up to R$ 3 billion.
Great Place To Work: In May 2012, SAMA and Precon Goiás were elected “The Best Companies to work for in the Center-West”. SAMA came 3rd in the ranking and Precon Goiás, 6th.
Recognitions - 2012
5050
Eternit – An option for investment
ADR -
Level I
ETNTY
Governance
Growthwith
Dividends
Vision ofFuture
Case ofSuccess
BrandBrand
5151
Information
Este material foi produzido com papeis certificados FSC (Forest Stewardship Council), que é uma garantia de que a matéria-prima advém de uma floresta manejada de forma ecologicamente correta, socialmente e economicamente viável.
www.blogdaeternit.com.br
www.eternit.com.br/ir
Élio A. Martinselio.martins@eternit.com.br
Paula Dell Agnolo Barhumpaula.barhum@eternit.com.br
Frederico Gomes Amaralfrederico.amaral@eternit.com.br
Rodrigo Lopes da Luzrodrigo.luz@eternit.com.br
Phone: (55-11) 3038-3818
(55-11) 3194-3881
(55-11) 3194-3872 @Eternit_RI
Dr. Fernandes Coelho Street, 85 – 8th floor
Pinheiros – São Paulo / SP
05423-040
5252
Eternit starts a new cycle
Welcometo the next
70 years
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