coference call
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Conference Call - Results Presentation | 3Q11
2
Disclaimer
“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”
3
Eternit’s performance exceeded the results for the sector.
Sales volume of fiber cement amounted to 232 thousand tons, a growth of 12.9%;
Sales of concrete tiles increased 9.2%;
Net consolidated revenue increased 6.6% and amounted R$ 213 million;
EBITDA amounted R$ 42.3 million and EBITDA margin of 20%, growth of 10.4%;
Net income of R$ 27.3 million and net margin of 13%, growth of 6.9%;
Eternit ramped up production capacity by 60% at Tégula, featured the new factory in
São José do Rio Preto / SP;
Initiate the installation of its multi-product plant in the State of Ceará;
The 12th factory will dedicate to the manufacture of bathroom chinaware.
Highlights - 3Q11
Corporate Profile
5
The largest and most diversified industry in the roof covering segment in Brazil
6
Supply Chain
7
Other Segments
8
Plants Location – Fiber cement / Mining
1) Anápolis/GO; 2) Colombo/PR; 3) Goiânia/GO; 4) Rio de Janeiro/RJ; 5) Simões Filho/BA; and 6) São Paulo/SP.
Commercial Branches
9
Plants Location – Concrete tiles
SAMA - Overview
11
Global Market – Chrysotile Mineral
Global Consumption (MM of Ton)
2010
2.2
2008
2.4
2007
2.4
2006
2.3
2005
2.3
2004
2.1
2009
2.1
Canada 6%
Russia – 48%
Kazakhstan – 10%
China – 22%
Brazil 14%
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155
136
291
143
163
306
39
43
81
31
39
70
106
120
226
94
124
218
2009 2010 3Q10 3Q11 9M10 9M11
5.3%
- 3.8%
-14.6%
Sales of Chrysotile Mineral (thous. tons)
Domestic Market Foreign Market
Eternit - Overview
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Products and solutions for civil construction
Water tanks and filters
Roof coverings
Bathroom chinaware fixtures
Components for constructions systems
15
Residential Market Industrial and Commercial Market
Total Market Market Evolution (MM m2)
Metallic 10%
Ceramics 36%
Fiber cement 48%
Others 3%
Fiber cement 42%
Metallic 35%
Others 11%
Ceramics 12%
Concrete 4%
Ceramics 45%
Fiber cement 51%
Concrete 3%
Covering market – Brazil (2010)
425 459
2005 2006 2007
8% 5%
2008
505
10%
2009
495
-2%
406
2010
534
8%
16
731
827
205 232
595644
2009 2010 3Q10 3Q11 9M10 9M11
13.2%
8.4%
12.9%
Sales of Fiber Cement* (thous. tons)
* Includes components for constructions systems
Tégula - Overview
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Main Products – Roof coverings
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Full Roofing Solution
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1,454 1,588
477
3,341
3,818
4,388
3Q10 3Q11 9M10* 9M11
15.0%
9.2%
80%
90%
3Q10 3Q11
Concrete Tiles
*Tégula was acquired on February 11 2010. The amount of 587 thousand m2 refers to Eternit.
Sales (thousand m²) Capacity Utilization
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Tégula
Operating and Financial Aspects 3Q11 3Q10 % Chg.
Sales - Tiles (in m2) 1,588 thousand 1,454 thousand 9%
Net Operating Revenue R$ 23,817 thousand R$ 20,933 thousand 14%
Gross Profit R$ 6,902 thousand R$ 7,534 thousand -8%
Gross Margin 29% 36% -7p.p.
EBITDA R$ 3,308 thousand R$ 2,748 thousand 20%
EBITDA Margin 14% 13% 1p.p.
Net Income (*) R$ 788 thousand R$ 3,671 thousand -79%
Net Margin 3% 18% -15p.p.
(*) The expense of exchange rate (U.S. $ 1 million) for the acquisition of the molds affected net income in 3Q11.
Operating and Financial Aspects
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130
453
583
111
648
759
30
169
199
23
190
213
85
464
549
67
533
600
2009 2010 3Q10 3Q11 9M10 9M11
30.2%
9.5%
6.6%
Consolidated Net Revenue (R$ million)
Domestic Market Foreign Market
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Net Revenue Breakdown
3Q11
(*) Others: metallic roofing tiles, polyethylene water tanks, lavatory seats and water pipe filters
3Q10
Others (*)1.1%
Bathroom Chinaware
4.4%Components Construction
Systems2.6%
Concrete tiles and
Accessories11.2%
Fiber cement58.8%
Chrysotile Mineral21.9%Fiber cement
53.1%
Chrysotile Mineral30.2%
Others (*)1.6%
Bathroom Chinaware
1.6%
Components Construction
Systems3.0%
Concrete tiles and
Accessories10.5%
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Raw material2
29%
Workforce48%
Depreciation5%
Energy8%
Other Costs10%
Workforce10%
Depreciation4%
Energy3%
Other Costs20%
Raw material1
63%
COGS Breakdown – 3Q11
1 - Cement (45%), Chrysotile Mineral (43%) and others (12%)
3 - Cement (53%), sand (31%) and others (16%)
2 – Fuel, explosives, packaging, among others
Fiber Cement Chrysotile Mineral
Concrete Tiles
Depreciation7%
Workforce18%
Raw material3
49%
Energy5%
Other Costs21%
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123
145
38 42
110100
2009 2010 3Q10 3Q11 9M10 9M11
17.1%
-9.2%
10.4%
EBITDA (in R$ million)
27
73
102
26 27
7365
2009 2010 3Q10 3Q11 9M10 9M11
39.7%
-10.9%
6.9%
Net Income (in R$ million)
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Margins
Net Margin EBITDA Margin Gross Margin
45%
38% 41%
19%
14%
20%
13%
9%
13%
2009 2010 3Q10 1Q11 2Q11 3Q11 9M10 9M11
42% 43%
21% 19%
13% 13%
45%
39%
20%
17%
13% 11%
38%
16%
10%
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21
8
29
27
12
34
14
6
93
53
103
21
11
4
15
16
13
34
14
3
80
20
12
2
34
2009 2010 3Q10 3Q11 9M10 9M11
220.7%
-57.5%
-28.6%
Investments Tégula Acquisition
Capacity Increase – Tégula Molds and New Business
Capacity Increase – Eternit
Capital Expenditures (in R$ million)
Land Acquisitin – Ceará State
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Construction of the New Synthetic Marble Production
External Area Production Line Resin Silo
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35 km 15 km
Linha Gás Natural
Cimenteira
Acquisition of Land for Multiproduct Plant - Ceará State
Land of 400 000 m²
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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
1st Step - Multi-Product Plant in the Ceará State
Joint-Venture: Companhia Sulamericana de Cerâmica S. A.
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Artistic vision and Lay-out Bathroom Chinaware Plant
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Expected occupation of the area – Multi-Product Plant
Corporate Governance and Capital Markets
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59.41%
2.35%
7.54%
30.70%
Shareholding Structure Oct/11 Oct/10
Geração L. Par. F. I. A. 18.61% 19.66%
Luiz Barsi Filho 13.41% 12.53%
Victor Adler + VIC DTVM 8.50% 7.83%
Management 1.08% 1.50%
Other Board of Directors 0.07% 0.03%
Treasurystock 0.03% 0.03%
FREE-FLOAT 76.33%
Ownership Structure - Oct/11
Individual Investors Corporations Investors Abroad Clubs. Funds and Foundations
Board of Directors Member Since
Sérgio Alexandre Melleiro (*) 1993 Lírio Albino Parisotto (*) 2004
Victor Adler (*) 2005 Élio A. Martins 2007
Luiz Barsi Filho (*) 2008 Marcelo Munhoz Auricchio (*) 2011
Luis Terepins (*) 2011 (*) Independent member
Consultive Council Member Since
Guilherme Affonso Ferreira 2011 Mário Fleck 2011
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1,108975
800
2009 2010 2011(*)
6,6155,910
6,714
2009 2010 2011(*)
(*) Until October
Ownership Structure
Number of shareholders Average Traded Volume (R$ thousand)
38
2009
73
2010
55
72
102
2011*
(*) Until November
81
2009
15.1%
2010
9.3%
2011*
7.5%
65
Shareholder Remuneration
Net Income X Shareholders Remuneration (R$ million)
Dividend Yield
Net Income Dividends and Interest on own capital
39
40
60
80
100
120
140
160
180
200
220
Dec06
Feb07
Apr07
Jun07
Aug07
Oct07
Dec07
Feb08
Apr08
Jun08
Aug08
Oct08
Dec08
Feb09
Apr09
Jun09
Aug09
Oct09
Dec09
Feb10
Apr10
Jun10
Aug10
Oct10
Dec10
Feb11
Apr11
Jun11
Aug11
Oct11
ETER3IBOVESPA
Between 12/28/2006 to 10/31/2011, Eternit”s shares appreciated 49.5% and IBOVESPA appreciated 31.2%. In the same period, including the payment of dividends and interest on own capital, Eternit’s shares appreciated 146.9%.
Eternit’s Shares Performance (Dec/06 - October/11)
58,338
R$ 9.06
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Quer ser sócio? / Wants to be a partner?
Eternit joined to Quer Ser Sócio? of
BM&FBOVESPA campaign
The campaign aims to achieve the goal of
winning 5 million of investors and make the
market more accessible to all Brazilians who want
to be partners in the growth of the country.
Outlook
42
5.0 5.48.6 8.2
5.1
37.1
-6.3
-0.2
16.8
11.6
7.5
18.3
3.4 3.5
15.2
2007 2008 2009 2010 2011(E)
GDP and Gross Revenue Comparison (%)
GDP Construction GDP Brazil Eternit - Gross Revenues
(E) - Estimate - Source: BACEN. Consolidated gross revenue growth was deflated by IGP-M. The period from January to September vs. the same period of 2010. The Company does not inform guidance of future revenue.
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Structured Expansion and Diversification Program
INITIATIVES
- Creation of the Development and New Businesses Area
- Inclusion of metallic roofing on its portfolio
- Investment in new product lines of fiber cement
- Investment in machinery for new products on its plants
- Increase in SAMA’s production capacity
- Launches of new products
- Debut into chinaware bathroom fixtures
- Inorganic growth – Acquisitions
OBJECTIVE
Consolidate Eternit as a supplier of products and solutions to the civil construction industry
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Following the market trend Eternit has launched ETERSYSTEM
Metal roof structure
Launches - 2011
Neighborhoods Nova Odebrecht – Angra dos Reis/ RJ
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Mobile Exhibitor - Bathroom Chinaware
Fiat Doblô cars equipped with bathroom chinaware and lavatory seats exhibitors
Chrysotile – The Brazilian Mineral
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Chrysotile – The Brazilian Mineral
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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Information
Élio A. Martins [email protected]
Rodrigo Lopes da Luz
Phone: (55-11) 3038-3818 or (55-11) 3194-3872
IR Consultant Silvia Helena Madi Pinheiro
Tel: (55-11) 3500-5564
or www.blogdaeternit.com.br www.eternit.com.br/ir
This material was produced using FSC certified paper (Forest Stewardship Council), which is a guarantee that the raw material comes from a forest managed in an environmentally responsible, socially and economically viable.
Frederico Gomes Amaral