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2013 RESULTS: A RECORD YEAR

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Page 1: Presentation 2013

2013 RESULTS: A RECORD YEAR

Page 2: Presentation 2013

2

2013 highlights: a record year for Kepler Weber

o Net revenues: + 40.1% to R$ 594,8 million in 2013.

o Profit: Near doubling of operational profit (+99.7%) and Net Profit (+98.5%).

o EBITDA: R$ 98.3 million (+72.8%), with a margin of 16.5% of Net Revenues reaching best-in-class levels.

o Debt: the company’s net debt in 2013 was reduced by 109.7% in comparison with 2012. The debt/EBITDA ratio fell from 0.40x to -0.02x.

o CAPEX: R$ 28.1 million.

o Cash generation: R$ 66.3 million, +10%.

o The highest share price rise on BM&F Bovespa in 2013.

Excellent results that confirm our strategy. Excellent results that confirm our strategy.

Page 3: Presentation 2013

3

4Q 2013 highlights

o Net revenues: R$ 179.5 million (+ 13.3%)

o Operational profit: R$ 23.7 million (+4.2%)

o Net profit: R$ 25 million (+25%)

Solid results even impacted by some non-recurring expenses. Solid results even impacted by some non-recurring expenses.

Page 4: Presentation 2013

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Kepler Weber’s turnaround is the result of a successful strategy

Investments in production capacity

Plant optimization

Geographic diversification of our clients

Expansion of our products and services portfolio

The company is well positioned to benefit from the positive momentum of Brazil’s agribusiness.

The company is well positioned to benefit from the positive momentum of Brazil’s agribusiness.

Page 5: Presentation 2013

5

2013 Results

Page 6: Presentation 2013

6

366.3

594.8

2010 2013

Net Revenues Debt and debt/EBITDA ratio

48.46

-2.19

2010 2013

+62.4 %

-104.52 %

EBITDA and margin

53.3

98.7

2010 2013

+84.4 %14,5%

16,5%

+200 bps

Dividend

A new chapter for the company marked by the improvement of our fundamentals since 2010 and a new dividend policy

A new chapter for the company marked by the improvement of our fundamentals since 2010 and a new dividend policy

0.00

0.90

2010 2013

R$

0.40x

-0.02x

R$ per share

R$ - Million x EBITDAR$ - Million

R$ - Million

-2.19

2013

48.46

2010

98.3

53.3

20132010

0,90

0,00

Page 7: Presentation 2013

7

Net revenues boosted by favorable domestic market conditions and portfolio renewal strategy

Significant growth in storage and bulk handling segmentsSignificant growth in storage and bulk handling segments

NET REVENUES – R$ Thousand

Exports -17.9%Bulk Handling +71.7%

Parts and Services +11.9%

+170.3(40.1%)

Storage +59.0%

2013

594,762

22,874 (4%)

78,400 (13%)

39,515 (7%)

453,973(81%)

2012

424,441

20,447 (5%)

95,528 (23%)

23,018 (5%)

285,448(67%)

Page 8: Presentation 2013

8

COTHERS

AB

KEPLER

2013

24%

3% 3%8%

62%

2012

22%

5%6%

13%

54%

Success rate increase reflects heightened client confidence in our products

Success rate

The company’s 2013 success rate increased by 8 percentage points in Brazil The company’s 2013 success rate increased by 8 percentage points in Brazil

Page 9: Presentation 2013

99

+13,721(+27%)

64,40050,679

+17,126(+28%)

2013

77.400

2012

60.274

Production –Tons Output –Tons

Production and output increase boosted by strong growth in demand

Output favored by Brazil’s positive momentum in agribusinessOutput favored by Brazil’s positive momentum in agribusiness

387.0

DEC/12

179.6

DEC/13

+207.4(+115%)

Backlog – R$ million

2012 2013

Page 10: Presentation 2013

10

96.039

+65,9(+69%)

2013

161,9

27%

2012

23%

GROSS PROFIT (R$ million) GROSS MARGIN (%)

2012

41.6%

2013

+3 points

38.5%

CONTRIBUTION MARGINNet Income (-) Variable Costs

Strong growth in gross profit

Gross profit increase boosted by gains in operational efficiencyGross profit increase boosted by gains in operational efficiency

96,0

Page 11: Presentation 2013

11

98.662

56.899

+41,4(+72%)

2013

16.5%

2012

13.4%

EBITDA (R$ million)EBITDA MARGIN (%)

In 2013 we reached global best-in-class EBITDA margin

Higher profitability combined with better plant use and lower exposure to seasonalityHigher profitability combined with better plant use and lower exposure to seasonality

56,9

98,3

Net Results (BRL thousand) 2013 2012 Δ%Profit of the Period 62,098 31,281 +98.5%(+) Income Tax and Social Contribution Provision - Current and Deferred16,588 3,019 +449.5%(-) Financial Revenue (17,535) (18,782) -6.6%(+) Financial Expenses 22,968 26,612 -13.7%(+) Depreciation and Amortization 14,179 14,769 -4.0%EBITDA 98,298 56,899 +72.0

Page 12: Presentation 2013

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62.098

31.281

10.4%

+30,8(+99%)

20132012

7.4%

NET RESULTS IN THE PERIOD (R$ million)% OF NET INCOME

Investments in production and portfolio diversification doubled the company’s net profit

Profitability boosted by gains in productivity, higher volumes and lower seasonality

Profitability boosted by gains in productivity, higher volumes and lower seasonality

31,3

62,1

Page 13: Presentation 2013

13

-2.193

(16.573)

(1.374)

22.582

2013

(2,2)

Cash availabilities

 (6.828)

Long term

Short term

2012

Greater financial flexibility through the elimination of our debt Greater financial flexibility through the elimination of our debt

-110%

20132012

22,6

0.40x

0.02x

Net debt (R$ million) and debt/EBITDA ratio

Evolution of debt

-2,2

22,6

(1,4)

(16,6)

(6,8)

Strong reduction in indebtedness, notably long-term debt

Page 14: Presentation 2013

The largest share price rise on BM&F Bovespa in 2013*

37.58%

Kepler Weber’s share price rose 236.1% in 2013Kepler Weber’s share price rose 236.1% in 2013

*-Source: Economática

Page 15: Presentation 2013

15

Priorities to sustain growth in 2014

CAPEX increase from R$ 28.1 million in 2013 to R$ 65 million. • R$ 15 million to be allocated to increase the size of the silo factory and make it the most profitable plant

in the world

Productivity gains• R$ 30 million will be used to increase productivity and reduce break-even with higher mechanization and

process simplification

Evolution of our business model:• After-sales services• Innovation• Reduction of raw material costs

Increase in exports• Increase in sales teams outside South America

Consolidate presence in the bulk handling market• In line with Kepler Weber’s strategy to expand portfolio to new segments

Kepler Weber is well positioned to continue growing in 2014Kepler Weber is well positioned to continue growing in 2014

Page 16: Presentation 2013

16

Appendix

Page 17: Presentation 2013

1717

OWNERSHIP BREAKDOWN | STAKEHOLDERS

Banco ClássicoSul America Expertise FIA

5,22%

Banco do Brasil Investimentos17,54%

9,99%Fernando Francisco Brochado Heller

12,11%

Previ

17,56%

37,58%Other Minority

Ownership Breakdown

12/31/2013

Ownership Breakdown

12/31/2013

Page 18: Presentation 2013

18

36,755

26,616

+10.1(+38%)

2013

6.2%

2012

6.3%

SALES EXPENSES (R$ million)% OF NET INCOME

38,703

29,161

2013

+9.5(+33%)

6.9%

2012

6.5%

ADMINISTRATIVE EXPENSES (R$ million)% OF NET INCOME

Commercial and administrative expenses

Expenses increased due to the company’s activity level plus other expenses with consulting on strategic projects aimed at improving performance and reducing

costs. Despite the growth, the figures show a reduction in expenses as a percentage of revenues.

26.6

36.7 38.7

29.2

Page 19: Presentation 2013

19

2013

22,968

2012

26,612

-14% -7%

17,535

20132012

18,782

FINANCIAL EXPENSES FINANCIAL INCOME

Financial results

The decrease in financial expenses, mainly due to debt reduction, also led to a 31% reduction in net financial income.

-31%

7,830

2012 2013

5,433

NET FINANCIAL EXPENSES

Financial income (BRL thousand) 2013 2012 Δ%Financial Revenue 17,535 18,782 -6.6% Net Revenue % 2.9% 4.4% -1.5 p.p.

Financial expenses (22,968) (26,612) -13.7% Net Revenue % 3.9% 6.3% -2.4 p.p.

Total Financial Result (5,433) (7,830) -30.6%

Page 20: Presentation 2013

20

18,989

17,947

2,437

15,7287,156

14,54429,21631,706

65,10262,098

Dividends / Interest on

equity capital

Suppliers increase

Stock increase

Debt reduction

Depreciation Other variables –

working capital

Balance Dec/13

124.7

Increase up front payment - Clients

Balance Dec/12

Client reduction

122.3

InvestmentsNet results 2013

Operating cash: R$ 63.7

Cash flow – R$ million

Operating cash flow totaled R$ 63.7 million in the period. The funds were used for investments (R$ 29.2 million), debt reduction (R$ 17.9 million) and the payment of dividends

and interest (R$ 18.9 million ), causing a reduction in the final balance of R$ 2.5 million.

62.114.5 65.1

7.215.7

31.7 2.4 29.2

17.9

19.0

Page 21: Presentation 2013

21

INVENTORY TURNOVER

-21%

2013

50

2012

63

AVERAGE DELAY FOR RECEIVABLES

AVERAGE DELAY FOR PAYMENTS

OPERATIONAL CYCLE

-4%

2013

51

2012

53

FINANCIAL CYCLE

91

2012

72+26%

2013

+10%

2013

90

2012

82

+4%

2013

141

2012

135

Activity indicators

The increase in inventory turnover is related to the increase in volumes of raw materials needed to meet the backlog. The reduction in the average payment period and longer payment period neutralized the increase

in inventories causing a reduction in the financial cycle.

Page 22: Presentation 2013

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Results

CONSOLIDATED INCOME STATEMENT - ACCUMULATED FIGURES 2013Vertical Analysis

20132012

2012 Vertical Analysis

2013 vs 2012

Horizontal Analysis

(In thousand reais, except percentages)

NET OPERATING REVENUE 594,762 100.00% 424,441 100.00% 40.13%

COST OF GOODS SOLD (432,847) -72.78% (328,402) -77.37% 31.80%

GROSS INCOME 161,915 27.22% 96,039 22.63% 68.59%

Sale expenses (36,755) -6.18% (26,616) -6.27% 38.09% Miscellaneous and Administrative (38,703) -6.51% (29,161) -6.87% 32.72% Other operating Income 18,760 3.15% 13,384 3.15% 40.17% Other operating expenses (21,098) -3.55% (11,516) -2.71% 83.21%

OPERATING PROFIT 84,119 14.14% 42,130 9.93% 99.67%

Financial expenses (22,968) -3.86% (26,612) -6.27% -13.69% Financial Revenue 17,535 2.95% 18,782 4.43% -6.64%

RESULT BEFORE INCOME TAX AND SOCIAL CONTRIBUTION ON NET INCOME 78,686 13.23% 34,300 8.08% 129.41%

Current Income Tax and Social Contribution (18,371) -3.09% (6,371) -1.50% 188.35% Deferred Income Tax and Social Contribution 1,783 0.30% 3,352 0.79% -46.81%

INCOME TAX AND SOCIAL CONTRIBUTION (16,588) -2.79% (3,019) -0.71% 449.45%

NET INCOME FOR THE YEAR 62,098 10.44% 31,281 7.37% 98.52%-

Page 23: Presentation 2013

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Balance sheet - Assets

CONSOLIDATED BALANCE SHEET 2013Vertical Analysis

2013 2012

2012 Vertical Analysis

2013 x 2012

Horizontal Analysis

ASSETS

Current 327,238 48.52% 261,648 44.51% 25.07% Cash and cash equivalents 10,746 1.59% 61,100 10.39% -82.41% Retained financial investments - 0.00% 9,605 1.63% -100.00% Bonds and securities 83,332 12.35% 30,848 5.25% 170.14% Trade accounts receivable 43,430 6.44% 50,586 8.60% -14.15% Inventories 150,413 22.31% 85,311 14.52% 76.31% Tax recoverable 13,345 1.98% 15,062 2.56% -11.40% Income tax and social contribution recoverable 5,316 0.79% 3,448 0.59% 54.18% Prepaid expenses 652 0.10% 430 0.07% 51.63% Advances to suppliers 15,458 2.29% 3,341 0.57% 362.68% Other credits 4,546 0.67% 1,917 0.33% 137.14%Non-current 347,123 51.48% 326,253 55.49% 6.40% Bonds and securities 23,921 3.55% 19,223 3.27% 24.44% Retained financial investments 4,284 0.64% 3,965 0.67% 8.05% Tax recoverable 2,355 0.35% 2,780 0.47% -15.29% Deposits in court 3,426 0.51% 2,797 0.48% 22.49% Deferred Taxes 75,585 11.21% 74,480 12.67% 1.48% Investments 3 0.00% 3 0.00% 0.00% Property for investments 126,31 1.87% 12,759 2.17% -1.00% Property, plant and equipment 209,168 31.02% 203,483 34.61% 2.79% Intangible Assets 15,750 2.34% 6,763 1.15% 132.88%TOTAL ASSETS 674,361 100.00% 587,901 100.00% 14.71%

(In thousand reais, except percentages)

Page 24: Presentation 2013

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Balance sheet - LiabilitiesCONSOLIDATED BALANCE SHEET 2013

Vertical Analysis

2013 2012

2012 Vertical Analysis

2013 x 2012 Horizontal Analysis

LIABILITIES AND SHAREHOLDERS' EQUITY

Current 181,847 26.98% 129,376 22.00% 40.56%

Suppliers 43,843 6.50% 28,115 4.79% 55.94% Loans 13,842 2.06% 12,880 2.19% 7.47% Salaries and vacation bonuses payable 20,471 3.04% 15,781 2.68% 29.72% Advances to customers 67,127 9.95% 35,421 6.02% 89.51% Tax payable 2,268 0.34% 2.822 0.48% -19.63% Income tax and social contribution payable 162 0.02% 552 0.09% -70.65% Commissions payable 5,887 0.87% 4,087 0.70% 44.04% Debentures 17,426 2.58% 19,762 3.36% -11.82% Financial Instruments - Derivatives 326 0.05% 8 0.00% 3975.00% Other accounts payable 10,495 1.56% 9,948 1.69% 5.50%Non-current 128,432 19.02% 137,552 23.40% -6.63% Loans 43,998 6.52% 44,204 7.52% -0.47% Debentures 40,540 6.01% 56,907 9.67% -28.76% Provisions 12,073 1.79% 4,925 0.84% 145.14% Deferred Taxes 19,892 2.93% 20,555 3.50% -3.23% Tax payable 6,826 1.00% 7,105 1.21% -3.93% Income tax and social contribution payable 5,103 0.76% 3,856 0.66% 32.34%Shareholders' Equity 364,082 54.00% 320,973 54.60% 13.43% Capital Stock 230,636 34.20% 230,636 39.23% 0.000% Capital reserve 3,977 0.59% 3,977 0.68% 0.00% Revaluation reserves 2,057 0.31% 2,106 0.36% -2.33% Asset valuation adjustment 54,737 8.12% 57,228 9.73% -4.35% Treasury Shares - 0.00% 1 0.00% -100.00% Surplus reserve 72,675 10.78% 27,025 4.60% 168.92%TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 674,361 100.00% 587,901 100.00% 14.71%

(In thousand reais, except percentages)

Page 25: Presentation 2013

Olivier Michel Colas Felipe Fontes Vice-President Executive Officer IR Analyst

Tel.: +55 (11) 4873-0302E-mail: [email protected]

Website: www.kepler.com.br/ri

Investor Relations