conference call 4 q12 versão final
TRANSCRIPT
Conference Call – Earning Results 4Q12 and 2012 – 03/18/2013
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
• Sales Volume:
Chrysotile mineral: growth of 4.6%
Fiber cement: growth of 1.4%
Concrete tiles: retraction of 17.4%
• Net Consolidated Revenue amounted to R$ 255.3 million, a 16.0% growth
• Gross Margin of 44%, increase of 3 p.p.
• EBTIDA was R$ 53.6 million, a 34.6% growth and margin of 21%
• Net Income reached R$ 29.0 million, a reduction of 9.6%
• Investments reached R$ 25.3 million, evolution of 106.3%
• Federal Supreme Court: update about the use of chrysotile
Highlights of 4Q12 (when compared to 4Q11)
4 4
Eternit Group
Activity
Manufacture of fiber cement and commercialization of bathroom chinaware, 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 – 30% of Market Share
The world's 3rd largest – 15% of
Market Share
Leader in concrete tiles –30% of Market
Share 5th largest of Brazil in sanitary ware
Capacity 1 million tons / fiber cement 300 thousand
tons 10 million m²
Capacity Used Fiber cement - 80% 100% 60%
The largest and most diversified roof coverings industry in Brazil – 2012
5
Main use of the crhysotile mineral:
99% of the world production of
chrysotile is used for fiber cement
products.
Traditional Product – Chrysotile Mineral
Serpentinite rock with Chrysotile Ore fibers
6 6
Traditional Product– 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
10 10
Diversified Portfolio – Bathroom chinaware and lavatory seats
11 11
Diversified Portfolio – Metal Fittings
12 12
Diversified Portfolio – Synthetic Marble
13
Diversified Portfolio – Concrete Tiles
14 14
Diversified Portfolio – Full Roofing Solutions
SAMA – Overview
16 16
Mercado Mundial – Mineral Crisotila – 2012
2012
2.1
2008
2.4
2007
2.4
2006
2.3
2005
2.3
2004
2.1
2009
2.1
2010
2.2
2011
2.2
Brasil 15%
Rússia – 54%
Cazaquistão – 10%
China – 20%
Canadá 1%
Global Market – Chrysotile Mineral - 2012
Global Consumption (MM of Ton)
17
Countries prohibited to use
asbestos SAMA´s clients
The use of chrysotile asbestos in the world
Countries allowed to use
asbestos
18
2010 2011 2012 4Q10 4Q11 4Q12
142.7 134.2 151.6
36.9 39.9 43.7
163.6 162.5 151.9
43.2 39.1 39.0
306.3 296.7 303.5
80.1 79.0 82.7
4.6% - 1.4%
2.3% - 3.1%
4Q12 x 4Q11
• Domestic Market– reduction of 0.3%
• Foreign Market – increase of 9.5%
2012 x 2011
• Domestic Market– reduction of 6.5%
• Foreign Market – increase of 13.0%
Sales of Chrysotile Mineral (thous. tons)
Domestic Market Foreign Market
Eternit and Tégula – Overview
20 20
Residential Market Industrial and Commercial Market
Total Market Market Evolution (MM m2)
Metallic
12%
Ceramics 35%
Fiber cement 46%
Other 3%
Fiber cement 38%
Metallic 40%
Other 11%
Ceramics 11%
Concrete
4%
Ceramics
45%
Fiber cement
51%
Concrete
4%
Covering market – Brazil – 2012
Source: Estimation of the Production Chain of Fiber Cement 2005 2006 2007 2008 2009 2010 2011 2012
406425
459
505 495
534561 561
21
Sales of Fiber Cement* (thous. tons)
* Includes components for construction systems
- 8.5% 3.9%
1.4% - 7.5%
2010 2011 2012 4Q10 4Q11 4Q12
826.9859.3
786.0
232.1 214.8 217.8
22
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%
9.6% - 17.4%
- 5.8%
2010* 2011 2012 4Q10 4Q11 4Q12
477
4,776
5,253
5,9615,617
1,435 1,5731,298
Economic and Financial Performance
24
Consolidated Net Revenue (R$ million)
Domestic Market Foreign Market
4.4% 16.0%
8.1% 10.5%
2010 2011 2012 4Q10 4Q11 4Q12
111.2 100.4170.9
26.7 33.4 54.1
647.5719.9
735.4
184.0 186.6201.2
758.7820.3
906.3
210.7 220.0255.3
25
Net Revenue Breakdown
(**) Others: metallic roofing tiles, polyethylene water tanks, lavatory seats and metallic bathroom fittings, water pipe filters, synthetic marble and components for construction systems.
2007 2012
(*) Others: metallic roofing tiles, polyethylene water tanks and components for construction systems.
Chrysotile Mineral; 35.0%
Fiber cement; 59.3%
Others (*); 5.7%
New Business
5.7%
Chrysotile Mineral32.5%
Fiber cement50.8%
Concrete tiles and
Accessories9.6%
Bathroom Chinaware
4.6%
Others (**)2.5%
NewBusiness16.7%
26 26
Raw material (*); 60%
Workforce; 11%
Depreciation; 3%
Others costs; 23%
Energy; 3%
COGS Breakdown – 4Q12
(*) - Cement (47%), Chrysotile Ore (40%) and other (13%)
(***) - Cement (55%), sand (29%) and other (16%)
(**) – Fuel, explosives, packaging, among other
Fiber Cement Chrysotile Mineral
Concrete Tiles
Materials (**); 29%
Workforce; 45%
Depreciation; 10%
Others costs; 9%
Energy; 7%
Raw material (***)45%
Workforce15%
Depreciation12%
Others costs24%
Energy 4%
27
EBITDA (in R$ million)
17.1% 34.6%
- 2.9% 31.6%
2010 2011 2012 4Q10 4Q11 4Q12
144.4 140.1
184.3
34.0 39.853.6
28
Net Income (in R$ million)
-4.7% 16.3%
10.3% -9.6%
2010 2011 2012 4Q10 4Q11 4Q12
102.097.2
113.0
29.0 32.1 29.0
29 29
Margins
Net Margin EBITDA Margin Gross Margin
43%
39%
44%
38%
41%
44%
19%17%
20%
16%18%
21%
13% 12% 12%14% 15%
11%
2010 2011 2012 4Q10 4Q11 4Q12
Capital Expenditures
31 31
2010 2011 2012 4Q10 4Q11 4Q12 2013*
27 2433
113
16
46
11
2
32
34
14
6
13
4
2
1
25
1
5
21
14
9
16
93
46
69
13 12
25
94
Capital Expenditures (in R$ million)
Equipments and Trucks - SAMA Investiments Tégula Acquisition Capacity Increase – Eternit
New Businesses Administrative Bathroom Chinaware Plant - CSC
* Forecast
Land Acquisition - Ceará
Synthetic Marble Capacity Increase – Tégula
32 32
Location of Multiproduct Plant - Ceará State
Land of 400,000 m²
35 km
15 km
Linha Gás Natural
Cimenteira
33 33
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
Status of the building: initiated
End building: December 2013
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
35 35
Clubs. Funds and Foundations
Ownership Structure – Feb/13
Shareholding Structure
Geração L. Par. F. I. A. 15.25%
Luiz Barsi Filho 13.56%
Victor Adler + VIC DTVM 8.50%
Management 1.73%
Treasurystock 0.03%
FREE-FLOAT 75.9%
Individual Investors
Corporations
Investors Abroad
Advisory Board Member Since
Guilherme Affonso Ferreira 2011
Mário Fleck 2011
Victor Adler 2012
Board of Directors Member Since
Sergio 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
62.1%
1.8%
11.2%
24.9%
36 36
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
2009 2010 2011 2012
73
10297
113
55
8172 72
37 37
40
60
80
100
120
140
160
180
200
220ETER3
IBOVESPA
Eternit’s Shares Performance (Dec/06 – Feb/13)
Between 12/28/2006 to 02/28/2013, Eternit’s shares appreciated 41.8% and IBOVESPA
appreciated 29.1%.
In the same period, including the payment of dividends and interest on own capital, Eternit’s
shares appreciated 151.1%.
57,424
R$ 8.59
Outlook
39
Favorable Moment for Civil Construction
40 40
215 240 228 265 277 305 318
56.5% 57.7%49.1% 52.0% 50.9% 49.0% 47.0%
2000 2001 2002 2003 2004 2005 2006
So
urc
e:
BA
CE
N
Credit Availability Unemployment Rate - Brazil Government, Industry, Housing, Rural, Commerce, Credit
Individuals (R$ billlion)
Economic Figures
*aug/12 to dec/12 - foreseen
Food Basic Basket SP x Minimum Wage (purchasing power)
% Minimum Wage (R$) Food Basic Basket in SP (R$)
So
urc
e:
IBG
E a
nd
DIE
ES
E
936
1,227
1,410
2,030 2,0752,169 2,238 2,269 2,304
2,360
9.9%
8.7% 8.5%
7.4%
6.4%
4.6%5.4%
2007 2008 2009 2010 2011 2012 jan/13
151 180200
240 260300
350
215 240 228 265 277 305 318
41 41
Economic Figures – GDP vs. Gross Consolidated Revenue of Eternit
(*) Forecast for 2012 (E) Forecast for 2013
Source: BACEN. The growth in Eternit´s gross consolidated revenue compares the accumulated period from January to December 2012 against the same accumulated period for 2011, inflation adjusted for the IGP-M.
2007 2008 2009 2010 2011 2012 2013(E)
5.08.2
-6.3
11.6
3.61.9
3.85.4 5.1
-0.2
7.5
2.70.9
3.3
8.6
37.1
16.8 18.315.7
5.1
GDP Construction (%)* GDP Brazil (%) Eternit (%)
Chrysotile – The Brazilian Mineral
43 43
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
44 44
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.
45 45
Positioning with respect to the legal question of Chrysotile Mineral
The Federal Supreme Court (STF) began on October 31st, 2012 its ruling on the merit of the Direct Actions of Unconstitutionality (ADI) 3357 in the light of state Law 11.643/2001 enacted by the state of Rio Grande do Sul, and ADI 3937 in the context of state Law 12,684 of July 26th, 2007 of the state of São Paulo. Judge Ayres Britto began the judgment ruling in favor of the constitutionality of the state laws while Judge Marco Aurélio’s vote was for the unconstitutionality of the same state laws. Following the conclusion of Judge Marco Aurélio’s ruling, the presiding judge adjourned the work of the court. We would point out that this judgment is fruit of exhaustive debates with Brazilian society through public hearings held by the STF on August 24th and 31st, 2012 led by Judge Marco Aurélio together with the judges Rosa Weber and Ricardo Lewandowski. For this reason, the STF is expected to set a new date for the final ruling on the merit mentioned in the ADIs as a whole.
46
Recognitions – 4Q12
Eternit : “APIMEC Minas
Award– Capital Markets
2012 – Best Meeting
Category” for having
carried out the best results
presentation to associates
of the organization during
the year, by APIMEC-MG
Eternit : prize for the Best
Corporate Givernance in
Latin America in the 2012
edition of “IRGR for Latin
America”, by IR Global
Rankings (IRGR)
Eternit’s marketing team : “TOP
ANAMACO Award” in the
category of marketing and sales
for the case “Mobile Display of
Bathroom Chinaware and
Metallic Bathroom Fittings”
Eternit: honorable mention for
best Corporate Governance at
the 14º ABRASCA Annual
Report Awards – category for
companies with sales below R$
3 billion, by ABRASCA
47 47
Eternit – An option for investment
ADR - Level I
ETNTY
Governance
Growth with
Dividends
Vision of Future
Case of Success
Brand
Brand
Watch the Eternit’s Institutional movie through this QR Code.
48 48
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
Paula D. A. Barhum Macedo
Frederico Gomes Amaral
Rodrigo Lopes da Luz
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
49 49
Eternit starts a new cycle
Welcome to the next
70 years