call ingles 1 q12
DESCRIPTION
TRANSCRIPT
Conference Call – Earning Results - 1Q12 | 05/09/2012
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“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
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• Sales volume when compared to 1Q11: Chrysotile Mineral: a growth of 6.0% Fiber Cement: a reduction of 7.5% Concrete tiles: a growth of 6.8%
• Net Consolidated Revenue amounted to R$ 210.2 million, a 12.9% improvement in relation to 1Q11
• EBITDA was R$ 46.2 million, 75.1% greater than 1Q11
• Net Income was R$ 29.9 million, a growth of 77.5% over 1Q11 • Margins in 1Q12:
Gross margin of 45% (+ 7 p.p. in relation to 1Q11) EBITDA margin of 22% (+8 p.p.) Net margin of 14% (+5 p.p.)
Highlights - 1Q12
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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
Share 5th largest of Brazil in sanitary wares
Capacity 1 million tons / fiber cement 300 thousand tons 8 million m²
Capacity Used Fiber cement - 85% 100% Around 70%
The largest and most diversified roof coverings industry in Brazil - 2011
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Diversified Portfolio – Fiber Cement Tiles
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Diversified Portfolio – Metallic Fittings
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Diversified Portfolio - Components for constructions systems
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Diversified Portfolio – Water tanks and filters
9 9
Diversified Portfolio – Bathroom chinaware and lavatory seats
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Diversified Portfolio – Bathroom Metal Fittings
11 11
Diversified Portfolio – Synthetic Marble
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Diversified Portfolio – Concrete Tiles
13 13
Diversified Portfolio – Full Roofing Solutions
SAMA - Overview
15 15
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
16 16
2009 2010 2011 1Q10 1Q11 1Q12
155 143 134
33 26 35
136 163 163
37 43 38
291306 297
70 69 73
Sales of Chrysotile Mineral (thous. tons)
-3.0% +5.2%
+6.0% -1.4%
Domestic Market Foreign Market
Eternit and Tégula - Overview
18 18
Residential Market Industrial and Commercial Market
Total Market Market Evolution (MM m2)
Metallic 12%
Ceramics 35%
Fiber cement 47%
Other 2%
Fiber cement 38%
Metallic 40%
Other 11%
Ceramics 11%
Concrete 4%
Ceramics 45%
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%
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2009 2010 2011 1Q10 1Q11 1Q12
731
827 859
208 203 188
Sales of Fiber Cement* (thous. tons)
+3.9% +13.1%
-7.5% -2.4%
* Includes components for construction systems
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Concrete Tiles (thous. square meters)
*Tégula was acquired on February 11 2010. The amount of 477 thousand m2 doesn’t refer to Eternit.
+13.5%
+22.9% +6.8%
2010* 2011 1Q10 1Q11 1Q12
477 477
4,776 5,961
587
5,253
5,961
1,064 1,308 1,397
Economic and Financial Performance
22 22
2009 2010 2011 1Q10 1Q11 1Q12
130 111 100 27 19 34
453
648 720
144 167 176
583
759 820
171 186 210
Consolidated Net Revenue (R$ million)
+9.1% +12.9%
+30.2% +8.1%
Domestic Market Foreign Market
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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 1Q12
Chrysotile Mineral; 35.0%
Fiber cement; 59.3%
Others (*); 5.7%
New Business 5.7%
Chrysotile Mineral; 30.8%
Fiber cement; 51.6%
Concrete tiles and
Accessories; 10.3%
Bathroom Chinaware;
4.5%
Others (*); 2.8%
New Business17.6%
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Raw material (***) 51%
Workforce16%Depreciation
9%
Others costs20%
Energy4%
Materials (**) 29%
Workforce49%
Depreciation5%
Others costs8%
Energy9%
Raw material (*) 63%
Workforce10%
Depreciation4%
Others costs20%
Energy3%
COGS Breakdown – 1Q12
(*) - Cement (46%), Chrysotile Ore (42%) and other (12%)
(***) - Cement (54%), sand (32%) and other (14%)
(**) – Fuel, explosives, packaging, among other
Fiber Cement Chrysotile Mineral
Concrete Tiles
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2009 2010 2011 1Q10 1Q11 1Q12
123
144 140
3626
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EBITDA (in R$ million)
-27.8% +75.1%
+17.4% -2.9%
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2009 2010 2011 1Q10 1Q11 1Q12
73
10297
2317
30
Net Income (in R$ million)
+39.3% -4.7%
-26.1% +77.5%
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42% 43%
39%
45%
38%
45%
21%19%
17%
21%
14%
22%
13% 13% 12%14%
9%
14%
2009 2010 2011 1Q10 1Q11 1Q12
Margins
Net Margin EBITDA Margin Gross Margin
Capital Expenditures
29 29
2009 2010 2011 1Q10 1Q11 1Q12
21 27 24
8 4 5
1 2
2
6 13
2
34
34 8
11
14
2 5
29
93
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8
34
14
Investiments Acquisition Tégula
Capacity Increase – Eternit Molds and New Business
Synthetic Marble
Capital Expenditures (in R$ million)
Administrative Land acquisition – Ceará State
Capacity Increase – Tégula
30 30
Development unit of Synthetic Marble
Production Line Resin Silo Synthetic Marble
Products
31 31
Location of Multiproduct Plant - Ceará State
Land of 400 000 m²
35 km 15 km
Linha Gás Natural
Cimenteira
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Share of 40% Knowledge of manufacturing and
products technology Low cost production
Expertise in new product development
Expertise in new market development
Share of 60% Knowledge of the local market
Strong distribution network Efficient logistics Brand strength
Investment Resources Knowledge in Brazil
Investments: R$ 97 million Capacity: 1,500,000 pieces per year
Begin building: First half of 2012 End building: 18 months
Forecast of Gross Revenue at full capacity: approximately R$ 127 million Straight Workforce: 330 employees
Multi-Product Unit in the Ceará State - Bathroom Chinaware Plant
Joint-Venture: Companhia Sulamericana de Cerâmica S. A.
Capital Markets
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61.43%
2.09%
8.32%
28.16%
Ownership Structure – Apr/12
Shareholding Structure Apr/12
Geração L. Par. F. I. A. 15.35%
Luiz Barsi Filho 13.46%
Victor Adler + VIC DTVM 8.50%
Management 1.54%
Other Board of Directors 0.08%
Treasurystock 0.03%
FREE-FLOAT 76.17%
Individual Investors Corporations Investors Abroad Clubs. Funds and Foundations
Advisory Board Member Since
Guilherme Affonso Ferreira 2011 Mário Fleck 2011 Victor Adler 2012
Board of Directors Member Since
Sérgio Alexandre Melleiro (*) 1993 Lírio Albino Parisotto (*) 2004
Élio A. Martins 2007 Luiz Barsi Filho 2008
Marcelo Munhoz Auricchio 2011 Luis Terepins (*) 2011
Benedito Carlos Dias da Silva (*) 2012 (*) Independent member
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2009 2010 2011 2012*
1,108975
794
1,473
2009 2010 2011 2012(*)
6,6155,910
6,633 6,804
(*) Until April 2012
Ownership Structure
Number of shareholders Average Traded Volume (R$ thousand)
36 36
2009 2010 2011 2012*
73
102 97
30
55
8172
18
Policy of Remuneration - Net Income X Distributed Earnings
In R$ million
76 % 79 % 74% Pay Out 60%
Net Income Dividends and Interest on own capital (*) Until March 2012
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Policy of Remuneration - Dividend Yield
(*) Unitl May 2012 (**) Until March 2012 Source: Eternit e BACEN
2009 2010 2011 2012
15.1%
9.3%
7.5%
4.5%
6.9% 6.9%7.5%
1.7%
9.1% 8.8%
10.9%
2.3%
Savings (**) Eternit – Yield(*) CDB (**)
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Eternit’s Shares Performance (Dec/06 – Apr/12)
Between 12/28/2006 to 4/30/2012, Eternit’s shares appreciated 64.7% and IBOVESPA Index appreciated 39.0%.
In the same period, including the payment of dividends and interest on own capital, Eternit’s shares appreciated 168.1%.
61,820
R$ 9.98
40
60
80
100
120
140
160
180
200
220ETER3
IBOVESPA
Outlook
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Favorable Moment for Civil Construction
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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 - Brazil Government, Industry, Housing, Rural, Commerce, Credit
Individuals (R$ billlion)
Sour
ce: B
AC
EN e
IB
GE
42
2007 2008 2009 2010 2011 2012(E)
5.0 8.2
(6.3)
11.6
3.6 4.5 5.4 5.1
(0.2)
7.5
2.7 3.5
8.6
37.1
16.8 18.3
15.7 13.1
GDP Construction (%) GDP Brazil (%) Eternit (%)
Economic Figures – GDP vs. Eternit
Source: BACEN. (E) – Estimated - The growth in Eternit’s gross consolidated revenue was deflated by the IGP-M.
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 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.
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Material Fact published in the principal newspapers and magazines in Brazil from 02/17/2012 to 02/25/2012
Clarifications From the Brazilian Eternit Group
The Brazilian Eternit Group, in view of recent news regarding the trial held at the Court of Justice in Turin, Italy, in which two ex-board members of Eternit Italy were held responsible for deaths resulting from the use of asbestos in its plants, wishes to publicly clarify that: • Eternit S.A. is a locally-owned, publicly traded company listed in the New Market, which is the highest level of Corporate Governance at the Sao Paulo State Stock, Commodities and Futures Exchange (BM&FBOVESPA), and bears no relation to Eternit in other countries, including Italy. The ownership and use of the trademark are exercised in distinct manners by different companies in several countries. • In Brazil Eternit employs chrysotile asbestos as a reinforcement fiber in the manufacturing of asbestos-cement roofing sheets and tiles using modern production techniques. The Italian company employed various types of asbestos, especially the amphibole variety, in several applications and without protection for the workers. • The activity in Brazil is regulated by Federal Law 9.055/95, Decree 2.350/97 and Regulatory Norms issued by the Ministry of Labor and Employment. These regulate the extraction, industrialization, sale and transportation of chrysotile asbestos and products which contain it, providing the Brazilian population with durable, high quality and excellent cost-benefit products; in this manner contributing to reduce the Brazilian housing deficit. • Market competition in the cement-asbestos segment, between Eternit S.A. and a French group that also is active in Brazil in the manufacturing and use of synthetic fibers, has led some Brazilian states, especially where the plants are located, to approve anti-asbestos legislation. It is worth mentioning that the validity of these laws awaits a merit decision on the part of the Supreme Federal Court. • The extraction and processing of chrysotile asbestos by controlled entity SAMA and the use of the mineral in Eternit's plants are subject to strict security standards that surpass legal requirements. With the improvement in production techniques and the perfection of work safety mechanisms, no accounts of disease related to the use of chrysotile asbestos have been reported among company employees who joined the group since the 1980's. A three-way agreement signed and in place since 1989, between the companies in the chain of production, workers and labor union entities and registered at the Ministry of Labor and Employment, has been instrumental and decisive in consolidating this achievement. • The use of asbestos-cement, water tank and roofing tile products containing chrysotile asbestos does not present risks to the population's health. There are no reports in Brazil of a single case of a resident who developed any disease as a result of inhabiting one of the more than 25 million residences covered by cement-asbestos roofing tiles containing asbestos. This fact is corroborated by a nationwide survey conducted by a renowned medical team linked to the main Brazilian universities, the project and final report for which were approved by the National Council for Scientific and Technological Development - CNPq, and which is available at the site http://www.sectec.go.gov.br/portal. The Eternit Group operates under full transparency and maintains an "Open Doors Program" that has already received more than 50 thousand visitors to its plants and which grants access to any person who wishes to know more about the safe processes employed in mining and producing products that contain chrysotile asbestos.
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Eternit – An option for investment
ADR - Level I
ETNTY
Governance
Growth with
Dividends
Vision of Future
Case of Success
Brand
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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. Martins [email protected]
Paula Dell Agnolo Barhum [email protected]
Frederico Gomes Amaral [email protected]
Rodrigo Lopes da Luz [email protected]
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
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Eternit starts a new cycle
Welcome to the next
70 years