Apimec sp - 4 q10

transcript

Results Presentation | 4Q10

“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

Corporate Profile

The largest and most diversified industry in the roofcovering segment in Brazil

Supply Chain

Other Segments

1) Anápolis/GO; 2) Colombo/PR; 3) Goiânia/GO; 4) Rio de Janeiro/RJ; 5) Simões Filho/BA; 6) Porto Alegre/RS e 7) São Paulo/SP.

Plants Location – Fiber cement

Commercial Branches

Plants Location – Concrete tiles

Timeline

Eternit’s most important accomplishments since its foundation in 1940

SAMA - Overview

Global Market – Chrysotile Ore

Global Consumption (MM of Ton)

Canada 6%

Russia – 48%

Kazakhstan – 10%

China – 22%

Brazil 14%

Competitive Advantages

Sales of Chrysotile Ore (thous. tons)

Domestic Market Foreign Market

2006 2007 2008 2009

144 132172 179

101125

231 222

273304

CAGR (2004/2010) = 3%

Eternit - Overview

Products and solutions for civil construction

Water tanks and filters

Roof coverings

Bathroom chinaware fixtures

Components for constructions systems

Residential Market Industrial and Commercial Market

Total Market Market Evolution (MM m2)

Metallic10%

Ceramics36%

Fiber cement48%

Others3%

Fiber cement42%

Metallic35%

Others11%

Ceramics12%

Concrete4%

Ceramics45%

Fiber cement51%

Concrete3%

Covering market – Brazil (2010)

425459

2005 2006 2007

Structure of the Industrial Park in 2010

Installed Capacity : Approx. 2,820,000 tons/year

Capacity utilization - around 86%

Consumption : Approx. 2,434,000 tons/year

Companies: 11

Plants: 19

Selling Points : 39,000

Installed Capacity: 1,000,000 tons/year

Consumption: 827,000 tons/year

Market-share: 31%

Plants: 5

Selling Points: over 14,000

BrazilianFiber CementMarket

ETERNIT

Products and Solutions for Civil Construction

Sales of Fiber Cement* (thous. tons)

* Includes components for constructions systems

2006 2007 2008 2009 4Q0920052004

523578

725 731

195232

CAGR (2004/2010) = 11%

Tégula - Overview

Main Products – Roof coverings

Full Roofing Solution

Installed capacity: Approx. 22 million m²/ year

Consumption: Approx. 15.4 million m²/year

Companies: around 130

Installed Capacity : 7.2 million m²/year

Consumption : 5.3 million m²/year

Market-share: 35%

Plants: 5

Brazilianconcrete roofingmarket

TÉGULA

Structure of the Industrial Park in 2010

Products and Solutions for Civil Construction

Concrete Tiles

*Tégula was acquired on February 11 2010. The amount of 587 thousand m2 refers to Eternit.

3Q102Q101Q10*

1,3001,454

4Q10 3Q102Q101Q10*

70%80% 80%

Sales (thousand m²) Capacity Utilization

Main IFRS Adjustments that Impacted the Eternit's Balance Sheet

IFRS Adoption

CVM Instruction No. 457, mandates the submission of Financial Statements of Corporations Traded on international standards - IFRS from the year ended 2010.

Eternit anticipates the implementation of IFRS as early as 2007 and their impact on financial statements in 2010 are irrelevant.

Main IFRS Adjustments in Net Income

182---Interest on Fixed Assets Financing

51,921

43,688

102,08573,11981,133Values in IFRS

(105)(104)(96)Additional Depreciation

---Reversal of Deferred Asset

---Reversal of Goodwill

(26)3628Deferred Income Tax

201020092008

IFRS Adjustments

102,03473,18781,201Values in BRGAAP

The main change in GAAP is the reversal of goodwill on acquisition of subsidiary SAMA face the future profitability of this asset.

1,4221,4221,4221,422Complementary CMB - Fixed

16,55816,55816,55816,558Goodwill – Reversal of Goodwill Amortization – SAMA Minerações

182---Interest on Fixed Assets Financing

250,402

232,583

412,476390,792265,698Values in IFRS

(507)(402)(303)Additional Depreciation

(133)(133)(133)Reversal of Deferred Asset

979797Reversal of Amortization of Deferred Assets

125148117Deferred Income Tax

201020092008

IFRS Adjustments

394,732373,102247,940Values in BRGAAP

Main IFRS Adjustments in Equity

Operating and Financial Aspects

Domestic Market Foreign Market

Consolidated Net Revenue (R$ million)

255 262 276 307424 453

97 87 7995

120130

2006 2007 2008 2009 4Q0920052004

352 349 355402

544583

34%648

759CAGR (2004/2010) = 14%

32(*) Others: metallic roofing tiles, polyethylene water tanks, bathroom chinaware fixtures and water pipe filters

2004 2008

2010 4Q10

Chrysotile Ore43.1%

Components for constructions

systems1.7%

Fiber cement55.2%

Others (*)0.1%

Fiber cement62.1%

Others (*)3.4%

Fiber cement55.8%

8.9% 27.4%

Others (*)3.4%

Fiber cement56.9%

Consolidated Net Revenue Breakdown

Chrysotile Ore

systems

Chrysotile Ore

Concrete tiles and Accessories

systems

Chrysotile Ore

COGS Breakdown – 4Q10

Fiber Cement Chrysotile Ore

Concrete Tiles1 - Cement (46%), Chrysotile Ore (43%) and others (11%) 2 – Fuel, explosives, packaging, among others

3 - Cement (52%), sand (33%) and others (15%)

Raw material¹64%

Workforce11%

Depreciation3%

Others Costs19%

Energy3%

Raw material²30%

Depreciation4%

Energy7%

Others Costs14%Workforce

Raw material³50%

Energy4%

Others Costs22%

Workforce17%

Depreciation7%

EBITDA (in R$ million)

2006 2007 2008 2009 4Q0920052004 4Q102010

81 7869 73

133123

CAGR (2004/2010) = 10%

Net Income (in R$ million)

2006 2007 2008 200920052004

33 3438

102CAGR (2004/2010) = 21%

Margins

Gross Margin

Net Margin

EBITDA Margin

2006 2007 2008 2009 201020052004

23% 22%20%

25%21%

41% 40%

45%42% 43%

9% 10% 11% 11%15% 13% 13%

44%44%

4Q09 4Q10

19%16%

41%38%

11%14%

Tégula

R$ 13,987 thousandR$ 7,962 thousandNet Income

R$ 8,023 thousandR$ 1,281 thousandEBITDA

29%15%Gross Margin

02/11 a 12/31*

R$ 19,832 thousand

R$ 67,863 thousand

4,776,492

R$ 19,133 thousandNet Operating Revenue

Operating and Financial Aspects

Net Margin

EBITDA Margin

Gross Profit

Sales - Tiles (in m2) 1,434,887

R$ 2,927 thousand

* The net margin was positively affected due to the constitution of the deferred tax of R$ 10.3 million

CAPEX (in R$ million)

Investments

Tégula Acquisition Capacity Increase – Eternit

Capacity Increase – SAMA

Molds and New Business

CAGR (2004/2010) = 24%

2617 13

25 3021

2004 2005 2006 2007 2008 2009 2010 4Q09 4Q10

Capacity Increase – Tégula

New Production Lines of Finished Products

Colombo - PR January/2009

Goiânia - GO April/2008

Simões Filho - BA October/2010

Construction of the New Synthetic Marble Production

External Area Production Line Resin Silo

35 km15 km

Natural Gas Line

Cement

Land Acquisition for “Multi-Products” Plant

Corporate Governance and Capital Markets

Board of Directors

Committee for Auditing, Financial Control and Treasury

CEO (*)

Internal AuditingInternal Controls

Investor Relations Officer (*)

Committee for Socio-Environmental Responsibility

Human Resources Committee

Legal Committee Committee for Strategic Planning

Administrative-Financial Officer

Comercial Officer

Industrial Officer

Human Resources

Officer

Development and New Business Officer

Mining Officer

(*) Accumulates functions

Governance Structure

www.assembleianaweb.com.br

www.eternit.com.br/ri

“Assembleia na web” (Shareholders' Meeting via WEB)

Another step in good corporate governance practices;

The system allows electronic proxy voting by digital certificate;

More than half of Eternit’ shareholders reside outside the state of Sao Paulo;

CVM (Securities and Exchange Commission of Brazil) and IBGC (Brazilian Corporate Governance Institute) recommend that companies encourage the participation of shareholders at meetings;

Partners:

“Assembleia na web” (Shareholders' Meeting via WEB)

Awards in Governance

The Eternit ’s quality is also present in Corporate Governance

Shareholding Structure Feb/11 Feb/08

Geração L. Par. F. I. A. 19.51% 6.89%

Luiz Barsi Filho 12.99% 5.47%

Victor Adler 6.70% 5.46%

Management 1.81% 1.13%

Other Board Members 0.04% 0.02%

Treasury Stock 0.03% 0.28%

58.1% 32.0%

7.6%2.3%

Individual InvestorsCorporationsInvestors AbroadClubs, Funds and Foundations

Board Members MemberSince

Sérgio Alexandre Melleiro (*) 1993

Guilherme Affonso Ferreira (*) 2003

Lírio Albino Parisotto (*) 2004

Mário Fleck (*) 2005

Victor Adler (*) 2005

Élio A. Martins 2007

Luiz Barsi Filho (*) 2008

(*) Independent Board Member

FREE-FLOAT 76.63%

Ownership Structure – Feb/11

Number of Shareholders

2006 2007 2008 2009

7,3177,726

(*) Until February 2011

20052004

2011(*)

Average Traded Volume (R$ thousand)

(*) Until February 2011

2006 2007 2008 2009

975716604

2004 2005 2011(*)

Shareholder Remuneration

Net Income Dividends and Interest on own capital

2007 2008 2009

Net Income X Shareholders Remuneration (R$ million)

2004 2005 2006

38443433 30

(*) Until March 2011

Dividend Yield

(*) Until March 2011

2007 2008 2009

2004 2005 2006

17.1%16.2%

Eternit’s Shares Performance (Dec/06 - Feb/11)

Between 12/30/2006 a 02/28/2011, Eternit”s shares appreciated 63.8% and IBOVESPA appreciated 51.5%.In the same period, including the payment of dividends and interest on own capital, Eternit’sshares appreciated 173.4%.

67,383

R$ 11.08

dec-06

mar-07

jun-07

sep-07

dec-07

mar-08

jun-08

sep-08

dec-08

mar-09

jun-09

sep-09

dec-09

mar-10

jun-10

sep-10

dec-10

IBOVESPA

feb-11

Outlook

Economic Figures

Minimum Wage (R$) Workforce (R$ million)

300380 415

465510 545

2005 2006 2007 2008 2009 2010 2011Source: BACEN

CAGR: 10.5%

303,028 321,163 338,501365,331 377,361

404,751

2005 2006 2007 2008 2009 UDM 2010*

CAGR: 5.96%

Source: IBGE * 2010 UDM from dec/09 to nov/10

Food Basic Basket SP x Minimum Wage (purchasing power)

151.0 180.0 200.0 240.0 260.0 300.0350.0 380.0 415.0

465.0510.0 545.0

119.5 128.6

239.5 228.2 265.2

158.7 164.8 172.2 183.4 182.1 214.6

79.2%71.4%

68.7% 66.2%61.1%

52.0%56.5% 57.7%

49.1% 52.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Minimum Wage (R$) Food Basic Basket in SP (R$) %Source: IBGE and DIEESE

Credit Availability Unemployment Rate – BrazilGovernment, Industry, Housing, Rural, Commerce, Credit

Individuals (R$ billlion)1,703.81,677.61,613.8

1,528.91,451.91,410.3

1,227.3

dec/07 dec/08 dec/09 mar/10 jun/10 sep/10 nov/10 dec/10

8.6% 8.4%7.4%

6.8% 6.8%

dec/05 dec/06 dec/07 dec/08 dec/09 dec/10

Growth of the Brazilian SavingsSource: BACEN Source: IBGE

233.0 238.0 240.0 245.0254.0 257.0 258.0 260.0 262.0 265.0 270.0

277.0 280,015.0%16.0% 16.0%

17.0% 18.0%19.0% 19.0% 20.0% 20.0% 20.0% 20.0% 20.0%

aug/09 sep/09 oct/09 nov/09 dec/09 jan/10 feb/10 mar/10 apr/10 may/10 jun/10 jul/10 aug/10

R$ billlion (%) Chg YoYSource: BACEN

Economic Figures

Housing Deficit – million of units

New Methodology Old Methodology

6.6 6.3 5.8

7.8 7.97.3

2004 2005 2006 2007 2008

GDP and Gross Revenue Comparison (%)

(E) - Estimate - Source: BACEN. Gross revenue growth has been consolidated as of January to December 2010 vs. the same period of 2009The Company does not inform guidance of future revenue.

5.0 5.4

8.2 5.1

11.6 7.5

2007 2008 2009 2010

GDP Construction GDP Brazil Eternit - Gross Revenues

2011(E)

6.64.5

Structured Expansion and Diversification Program

INITIATIVES

- Launches of new products

- Debut into chinaware bathroom fixtures

- Increase in SAMA’s production capacity

- Investment in machinery for new products on its plants

- Investment in new product lines of fiber cement

- Inorganic growth – Acquisitions

- Inclusion of metallic roofing on its portfolio

- Creation of the Development and New Businesses Area

Consolidate Eternit as a supplier of products and solutions to the civil construction industry

OBJECTIVE

Launches - 2011

Bairro Nova Odebrecht – Angra dos Reis/ RJ

For further information on the 2011 launches, access:www.eternit.com.br

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

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.

Corporate and Environmental Management

Corporate Management

Launch ................... November 2004

Purpose .................

Contribute to society’s better understanding of the mining and processing of Chrysotile Ore and the manufacture of fiber cement products in a sustainable manner.

Location ........... Five production plants of Eternit and the SAMA mining company

Visitors ............... More than 42,000 as of December 2010

Target ................... All society

Open Doors Program

Environment Focused Management

Quelônios Project - Animal Conservation Area

The only breeding program of Amazon turtles in Brazil and Reintegration of Wild Animal Nature in partnership with IBAMA

Zero Reject Monitoring Air Quality Water Reuse Reforestation Work

Seedling Nursery

Social Actions

Information

Élio A. Martinselio.martins@eternit.com.br

Rodrigo Lopes da Luz

rodrigo.luz@eternit.com.br

Phone: (55-11) 3813-6034 or (55-11) 3038-3818

IR ConsultantMarcelo M. Fonseca

marcelo.fonseca@firb.com

Phone: (55-11) 3045-1080

Bárbara M. Tanure Gonçalves

barbara.goncalves@eternit.com.br

This material was produced using FSC certified paper (Forest Stewardship Council), which is a guarantee that the raw materialcomes from a forest managed in an environmentally responsible, socially and economically viable.

or www.blogdaeternit.com.brwww.eternit.com.br/ri

ETERNIT S.A.