duratex - 3rd quarter 2008
DESCRIPTION
Presentation - 3rd Quarter 2008TRANSCRIPT
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www.duratex.com.br
Corporate PresentationNovember 11, 2008
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+ Business segments
• Metal fittings
• Vitreous china
• Accessories
WoodWood
• Hardboard
• MDP
• MDF / HDF / SDF
• Laminated flooring0
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+ Business segments
Timberland holdings:• 100% of land holdings under a fully owned subsidiary (Duraflora);• Total area: 120.000 hectares of land in the State of Sao Paulo;• Average distance from the wood supply to the plants: 55 km;• Land + timber highlights:
• Book value (sep/08): R$ 537 million (US$ 281 million),• Market value: R$ 1.415 million (US$ 731 million).
• Self-sufficiency in wood supply:• Economies of scale,• Strategic access to raw material,• Reduced execution risk.
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MDF & Flooring Agudos - SP
MDPItapetininga - SP
WoodWood
MDF & HardboardBotucatu - SP
HardboardJundiaí - SP
> > Geographical locationGeographical location::
+ Business segments
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+ Business segments
> > Geographical locationGeographical location::Metals - Sao Paulo
Metals & Ceramics - Jundiaí
Ceramics Cabo de Sto Agostinho - PE
Ceramics Queimados - RJ
Ceramics Jundiaí - SP
CeramicsSao Leopoldo - RS
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+ CAPEX
> Consolidated Capex Consolidated Capex (in R$ (in R$ millionmillion):):
108,4 105,4
222,3
615,0
310,0
136,8138,9 139,4
303,5
172,8
2000 '01 '02 '03 '04 '05 '06 '07 '08* '09*
* estimated Capex between the years of 2008 and 2009.postponement of R$450 million in new Capex.
R$1.327,5 million
R$925,0 million
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+ CAPEX
> Duratex industrial output Duratex industrial output capacity growthcapacity growth::
2000 2001 2002 2003 2004 2005 2006 2007 2008* 2009**(in '000 m3)Hardboard 360 360 360 360 360 360 360 360 360 360MDP 320 340 360 500 500 500 500 500 500 500MDF 200 220 240 640 640 640 640 640 640 1.4401 - Total 880 920 960 1.500 1.500 1.500 1.500 1.500 1.500 2.3002 - Shipments 812 824 881 906 1.051 1.040 1.219 1.276 1.314 n/a
2 / 1 (%) 92% 90% 92% 60% 70% 69% 81% 85% 88% n/a(in '000 items)Metal Fittings 12.000 13.200 14.400 14.400 14.400 14.400 14.400 14.400 15.600 16.800Vitreous china 2.580 3.300 3.300 3.200 4.200 4.200 3.800 3.800 6.200 7.0401 - Total 14.580 16.500 17.700 17.600 18.600 18.600 18.200 18.200 21.800 23.8402 - Shipments 12.750 13.584 14.523 13.318 13.747 12.825 13.981 15.041 17.233 n/a
2 / 1 (%) 87% 82% 82% 76% 74% 69% 77% 83% 79% n/a
2008* Last twelve months data for Shipments
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+ CAPEX
> MDF MDF ProjectProject::• MDF line: 800.000 m3/year capacity and estimated start-up by Apr/2009:
• 125% growth over Duratex existing MDF capacity.
• Melamine finishing line: 10,2 million m2 capacity;
• Resin plant;
• Timberland.
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+ CAPEX
> Metal Metal fittingsfittings::• Capacity increase: 400.000 items / month or +33%;
• Completion of expansions: 2010.
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+ CAPEX
> Vitreous Vitreous china:china:
Two acquisitions worth R$60 million each:
1 - Ideal Standard: Two plants (Jundiaí/SP and Queimados/RJ) with
a combined capacity of 1.800.000 items / year.
2 - Ceramica Monte Carlo: One plant in Cabo de Sto Agostinho/PE
with a capacity of 1.440.000 items / year.
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> Duratex Duratex releasedreleased na na explanatoryexplanatory note to note to thethe marketmarket as a as a responseresponse to to thethe changeschanges in in thethe economiceconomic scenarioscenario::
October, 10 2008“Given the recent enquiring and consults received in the last few days, we inform that all Liabilities in foreign denominated currencies are totally covered by traditional hedging operations; thus, not presenting any exposure to the ongoing foreign exchange rate volatility.We also inform that we do not have and have not incurred in any deal involving leveraged derivative instruments.Duratex’ executive officers have decided to adequate the execution schedule for the ongoing investments that were disclosed during the first half 2008 by delaying it by six months, in response to the worsening of the international financial crisis and its possible impacts to the Brazilian economy.Duratex financial management is characterized by conservative Policies that favor the Company’s liquidity and sustainability of its operations.
Plínio do Amaral PinheiroCFO and Investors Relation Officer”
+ Macro scenario
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> Postponed Postponed capexcapex: MDP Project: MDP Project
• Total investments worth R$ 1,0 billion;
• MDP: 1.000.000 m3/year capacity, expected by sep/2010;
• Resin Plant: supply 100% of MDP resin needs;
• Acquisition of land and plantation of forests.
+ Macro scenario
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+ Macro scenario
> Real Real interestinterest rate rate andand BrazilBrazil GDP:GDP:
Real Interest Rate: selic rate - IPCASource: Bacen* Estimates from Focus Report of Oct 31, 2008 (Bacen)
26,9%
16,2%
11,4%9,6%
6,6%
11,9%
0,3%
7,4%7,4%
13,4%
8,6%
14,0%
5,2%5,4%
3,8%3,2%
5,7%
1,1%
2,7%
1,3%
4,3%
0,0%
'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08
Real interest rate (year end)Brazil GDP
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+ Macro scenario
> AvailabilityAvailability of of longlong--term credit term credit ((housinghousing):):
2.146
29.800
18.283
9.340
4.8523.0022.2181.7691.8821.9351.673
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008*
8.500
6.9096.999
5.533
3.8923.8213.7423.086
3.876
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008*
Credit volume from SBPE (R$ million)Source: data base CBIC (Brazilian Chamber for the Construction Industry)
Credit volume from FGTS (R$ million)Source: data base CBIC and CEF
* 2008: Jan to Sep annualized
n.a. n.a.
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+ Macro scenario
> Markets attended Markets attended (as a % of Net (as a % of Net RevenuesRevenues):):
Furniture32%
Housing(directly)
46%Others
22%
> Average construction cycleAverage construction cycle: :
6 months 12 months 6 months
Project
Incorporation
SalesFlagstone erection
Hydraulic and Electrical
Thick finishing
Keys handover
Accesso
ries,
Furniture and
Remodeling
Light Finishing
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+ Balanced financial structure
> > Financial Financial highlightshighlights (in R$ (in R$ MillionMillion))::2004 2005 2006 2007 sep/08
Balance Sheet Highlights:Cash 105,1 234,0 574,6 662,9 656,9Current Assets 621,6 726,7 1.138,9 1.266,0 1.381,3Long-Term Assets 33,6 39,1 33,6 34,3 80,7Permanent Assets 1.156,7 1.181,3 1.202,7 1.330,1 1.791,8Total Assets 1.811,9 1.947,1 2.375,2 2.630,4 3.253,8Short Term Debt 175,1 151,5 359,4 246,2 395,0Current Liabilities 345,2 318,7 601,0 540,9 804,0Long Term Debt 342,6 439,6 258,8 424,6 595,6Long-Term Liabilities 464,7 565,5 377,8 546,2 772,6Minority Interest 11,6 12,0 0,6 7,5 0,2Equity 990,4 1.050,9 1.395,8 1.535,8 1.677,1
Risk Ratios:Current Ratio 1,80 2,28 1,90 2,34 1,72Equity / Total Assets 55% 54% 59% 58% 52%Debt / Debt + Equity 34% 36% 31% 30% 37%Net Debt 412,6 357,1 43,6 7,9 333,7Net Debt / Equity 0,42 0,34 0,03 0,01 0,20Net Debt / EBITDA* 1,29 0,98 0,10 0,01 0,58
* EBITDA for 2008: last twelve months
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+ Balanced financial structure
> > DebtDebt::
> > Debt amortization scheduleDebt amortization schedule (in R$ million)::
270
88
125
492526
61
17
331
2008 2009 2010 2011 2012 2013 2014
Short term debtLong term debt
Long Term60%
Short Term40%
358
2015 andafter
R$ 990,6M
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+ Balanced financial structure
>> FX FX exposureexposure as of as of SepSep / 2008 / 2008 (in R$ ‘000)::
ASSETS IN FOREIGN CURRENCY LIABILITIES IN FOREIGN CURRENCY
ONGOING IMPORTS 80.907 BNDES 17.527
ACCOUNTS RECEIVABLE 31.174 2770 RESOLUTION 252.995
DURATEX OVERSEAS 36.018 IMPORT FINANCE 153.203
SWAP YEN / US$ X CDI 294.703 FX EXPORT ADVANCEMENTS 87.897
CALL OPTIONS IN US$ 76.571 DEBT WITH FX EFFECT IN EQUITY CAPITAL(30.578)
SUPPLIERS 45.519
TOTAL ASSETS 519.373 TOTAL LIABILITIES 526.563
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>> Duratex output capacity and occupancy rate:Duratex output capacity and occupancy rate:(per area of activity)
75%
83%
90%
96%
96%
Vitreous China
Metal Fittings
MDF/HDF/SDF
MDP
Hardboard
6.200 k items/year6.200 k
items/year
500.000 m3/year500.000 m3/year
360.000 m3/year360.000 m3/year
15.600 k items/year15.600 k
items/year
640.000 m3/year640.000 m3/year
+ Performance (Jan – Sep / 2008)
*
*Average occupancy rate for the year considering the new capacities from Ideal Standard (Jundiaí) and CerâmicaMonte Carlo.The occupancy rate during September alone was above 98%.
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+ Performance (Jan – Sep / 2008)
> > Net Revenues: R$ 1.428,0 millionNet Revenues: R$ 1.428,0 million
MDF/HDF/SDF26,1%
Laminate Flooring6,0%
MDP14,5%
Hardboard17,3%
Metal Fittings22,7%
Vitreous China13,3%
> > Revenues geographical distribution:Revenues geographical distribution:
Domestic Market89,9%
Export Revenues10,1%
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> > Domestic revenues: R$ 1.284,4 millionDomestic revenues: R$ 1.284,4 million
> > Export revenues: R$ 143,6 millionExport revenues: R$ 143,6 million
+ Performance (Jan – Sep / 2008)
24%29%
14%
1%
4%13%
15%
84%
6%
10%
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Net Rev.(R$ M) & Gross Margin (%) EBITDA (R$ M) & Margin (%)
Net Income (R$ M) & ROIC Equity (R$ M) & ROE (%)
+ Performance
> > Recurring resultsRecurring results (last 5 quarters)::
1.545,21.623,9 1.677,1
1.578,71.535,8
22,7%20,9%20,2%23,7%
20,1%
3Q07 4Q07 1Q08 2Q08 3Q08
145,8 151,0142,5144,1 127,9
28,5%30,3%29,9%31,3%34,0%
3Q07 4Q07 1Q08 2Q08 3Q08
529,7
429,0 459,8 428,3470,0
45,4% 40,0%43,3% 40,2% 40,3%
3Q07 4Q07 1Q08 2Q08 3Q08
89,2 73,2 93,978,877,4
15,6%16,8%15,8%19,3% 19,2%
3Q07 4Q07 1Q08 2Q08 3Q08
+ 23,5%
+ 28,3%
+ 6,0%+ 12,7%
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> > EBITDA EBITDA (in R$ (in R$ MillionMillion) ) andand MarginMargin (%)(%)::
WOOD
+ Performance
36,3 43,1 43,1 47,3 51,7
26,6%27,2%29,3%26,2%25,3%
3Q07 4Q07 1Q08 2Q08 3Q08
109,5 101,084,8 95,3 99,3
38,4%34,2%
30,2% 32,1% 29,6%
3Q07 4Q07 1Q08 2Q08 3Q08
> > Recurring resultsRecurring results (last 5 quarters)::
+42,4%
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+ Performance
> > Electric power costElectric power cost (100 base)::
> > ResinResin costcost (100 base)::
179,0203,1
298,5
132,6
117,5112,5100,0
1º Tri/ 07 2º Tri/ 07 3º Tri/ 07 4º Tri/ 07 1º Tri/ 08 2º Tri/ 08 3º Tri /08
100,0 97,086,9
93,5
118,4109,5
123,9
1º Tri/ 07 2º Tri/ 07 3º Tri/ 07 4º Tri/ 07 1º Tri/ 08 2º Tri/ 08 3º Tri /081Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08
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1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008* 2009 2010 2011 2012
EPS (R$)
+ Positive track record
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008* 2009 2010 2011 2012
EBITDA (R$M)Normal Dividends
1st MDF in Brazil
Laminated flooring
MDP Expansion
MDF Expansion
MDF ExpansionResin Plant
Acquisitions Deca
CAGR: +18%
2, 53
0,25
565,2
70,3
* EBITDA of the last 12 months and annualised dividend
Acquisition of land and planting of timberland and expansion Deca
104,0
6,9
R$50 million in extraordinary dividends
R$15,3 million in extraordinary dividends
1,16
CAGR: +30%
CAGR: +16%
CAGR: +21%
MDP ExpansionResin Plant
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8,0% 43,6%
11,4%34,7%
2,3%88,5%
11,5%
41,4%
25,5%
6,7%25,1%
1,3%
+ Capital markets
> > Major Major groupsgroups of of shareholders shareholders (as of (as of SepSep / 2008):/ 2008):
Total CapitalTotal Capital Common StockCommon Stock Preferred StockPreferred Stock
Other Local Investors
Itaúsa Foreign Investors
Local Pension Funds
Treasury Stock
129.695.415129.695.415 53.555.96353.555.963 76.139.45276.139.452# of # of outstanding sharesoutstanding shares: :
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0,005,00
10,0015,0020,0025,0030,0035,0040,0045,0050,00
28/1
2/20
07
14/0
1/20
08
28/0
1/20
08
12/0
2/20
08
25/0
2/20
08
07/0
3/20
08
20/0
3/20
08
03/0
4/20
08
16/0
4/20
08
30/0
4/20
08
14/0
5/20
08
28/0
5/20
08
10/0
6/20
08
23/0
6/20
08
04/0
7/20
08
18/0
7/20
08
31/0
7/20
08
13/0
8/20
08
26/0
8/20
08
08/0
9/20
08
19/0
9/20
08
02/1
0/20
08
15/1
0/20
08
28/1
0/20
08
-
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
> > Duratex Duratex stock included stock included in in the most relevant the most relevant local local stockstock indexes: &indexes: &
+ Capital markets
> > Stock Stock performance performance (Dec/28/2007 to Nov/07/2008)::
Ave
rage
Quo
te(in
R$)
Average (stock quote and traded volume)
Traded Volume (in shares)
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+ Capital markets
>> Corporate GovernanceCorporate Governance::• 80% Tag-along rights to preferred shareholders;• 30% minimum pay-out dividend Policy;• Two independent Board members recently elected;• Part of Bovespa’s Level 1;• Board Committees:
• Stock Option,• Disclosure and Stock Trading.
• Management Committees: • Corporate Governance,• Sustainability,• Risks and Ethics,• Corporate Intelligence,• Talent Management and• Operating Excellency.
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Institution Analyst E-mail
Brascan Corretora Beatriz Battelli [email protected]
Citibank Luis Vallarino [email protected]
Credit Suisse Marcelo Telles [email protected]
Deutsche Bank Josh Milberg [email protected]
Fator Banco Jacqueline Lison [email protected]
Itaú Corretora de Valores Renata Faber [email protected]
Link Corretora Leonardo Cavarges [email protected]
Merrill Lynch Marcos Assumpção [email protected]
Santander Banespa Marcello Milman [email protected]
Socopa Corretora de Valores Daniel Dol [email protected]
UBS Pactual Edmo Chagas [email protected]
Unibanco Andre Luiz Rocha [email protected]
+ Capital markets
>> Stock coverageStock coverage::
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+ Disclaimer
The information contained herein was prepared by Duratex S.A. and does not constitute an offering material, to subscribe for or purchase any of the Company’s securities. This material brings general information about the Company and markets as of this date. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented herein. The Company can give no assurance that expectations disclosed in this presentation will be confirmed.
November 11, 2008
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www.duratex.com.br
Corporate PresentationNovember 11, 2008