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1 Results Presentation | 3Q10
| Date post: | 22-Jun-2015 |
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Investor Relations |
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1
Results Presentation | 3Q10
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”
Corporate Profile
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Supply Chain
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Other Segments
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Plants Location – Fiber cement
Commercial Branches
1) Anápolis/GO; 2) Colombo/PR; 3) Goiânia/GO; 4) Rio de Janeiro/RJ; 5) Simões Filho/BA; 6) Porto Alegre/RS and 7) São Paulo/SP.
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Plants Location – Concrete tiles
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Timeline
Eternit’s most important accomplishments since its foundation in 1940
SAMA - Overview
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Global Market – Chrysotile Ore
* SAMA MINERAÇÃO (Minaçu/GO): Third largest in the world and first with ISO 14,001
Major World Producers – 2009
Russia
China
Brazil* 14%
Kazakhstan
Canada
Zimbabwe
22%
45%
10%
8%
1%
Global Consumption (MM of Ton)
2009 2.1
2008
2007
2006
2005
2.4
2.4
2.3
2.3
2004 2.1
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Competitive Advantages
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Sales of Chrysotile Ore (thous. tons)
213.3 226.2
33,242.2 38.3 33.4 41.5 33.2 34.1 38.5
31.9 30.9 36.636.2
37.2 40.442.8
74.1 69.2 70.077.7
70.4 74.581.3
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10
Domestic Market Foreign Market
Changes Domestic Market Foreign Market Total
3Q10 / 3Q09 + 16.9% + 15.4% + 16.1%
9M10 / 9M09 + 21.2% - 7.1% + 6.0%
Eternit - Overview
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Products and solutions for civil construction
Water tanks and filters
Roof coverings
Components for constructions systems
Bathroom chinaware fixtures
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Covering market – Brazil (2009)
425459
2005 2006 2007
8%5%
2008
505
10%
2009
495
-2%
406
Residential Market Industrial and Commercial Market
Total Market Market Evolution (MM m2)
Ceramics35%
Metallic9%
Fiber cement49%
Others4%
Concrete3%
Fiber cement39%
Metallic35%
Ceramics14%
Others12%
Others2% Ceramics
43%Fiber cement
52%
Concrete3%
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GDP and Gross Revenue Comparison
Structure of the Industrial Park in 2009
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: 35,000
Brazilian Fiber Cement Market
Installed Capacity: 850,000 tons/year
Capacity utilization - around 86%
Consumption: 731,000 tons/year
Market-share: 30%
Plants: 5
Selling Points: 12,000
ETERNIT
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GDP and Gross Revenue Comparison
GDP Construction GDP Brazil Eternit - Gross Revenues 9M10
5.7 5.2
21.9
1.32.3
3.2
5.4
3.72.4
5.0 5.4
16.8
8.2
5.1
31.7
-6.3
-0.2
5.2
13.3
7.3
28.3
2004 2005 2006 2007 2009 2010 (E)2008
(E) - Estimate - Source: BACEN. Gross revenue has been consolidated as of September 2010 vs. 2009
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Sales of Fiber Cement* (thous. tons)
535.2 594.8
167.2 160.8
207.2195.4
207.8
181.7
205.3
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10
Changes Total3Q10 / 3Q09 - 0.9%
9M10 / 9M09 + 11.1%
* Includes components for constructions systems
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Competitive Advantages
Products and Solutions for Civil Construction
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Tégula - Overview
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Tégula Acquisition
• Largest Brazilian company in the concrete roofing business
• Portfolio with more than 33 product lines
• Resale of solar heating equipment
• Market share exceeding 35% in the Brazilian concrete roofing business
• Number of Employees: more than 500
• Installed Capacity: 7.2 million square meters
• Capacity Utilization in 3Q10: around 80% (60% in 1Q10 and 70% in 2Q10)
• Value of acquisition: R$ 39.2 million
• Acquired in 02/11/2010
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Main Products – Roof coverings
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Full Roofing Solution
Operating and Financial Aspects
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Consolidated Net Revenue – 3Q10
Consolidated Net Revenue* Net Revenue Breakdown
35.5%
101.7 100.4121.8 127.9
143.5 150,6
43.1 33.5 25.1 28.5 27.2 27.0
144.8 133.9
146.9156.4
170.7177.6
30.3
199.0
150.6
168.7 Others (**)3.2% Components for
constructions systems3.0%
10.5%
52.9%
Chrysotile Ore30.3%
Fiber cement
Concrete tiles and Accessories
3Q101Q09 2Q09 3Q09 4Q09 1Q10 2Q10
Domestic Market Foreign Market
(**) Others: metallic roofing tiles, polyethylene water tanks, bathroom chinaware fixtures and water pipe filters
(*) in R$ million
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COGS Breakdown – 3Q10
Fiber Cement Chrysotile Ore
Concrete Tiles1 - Cement (45%), Chrysotile Ore (43%) and others (12%) 2 – Fuel, explosives, packaging, among others
3 - Cement (51%), sand (32%) and others (17%)
Raw material¹66%
Others Costs18%
Energy3%
Depreciation3%
10%Workforce
Raw material²32%
Others Costs11%
Energy7%
Workforce46%
Depreciation4%
Others Costs19%
Energy4%
Raw material³52%
Workforce18%
Depreciation7%
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EBITDA (in R$ million)
EBITDA
35.729.9 27.8 30.1
35.7 36.3 37.6
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10
35.1%
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Net Income (in R$ million)
Net Income
21.6
17.3 17.0 17.2
23.225.524.3
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10
50.2%
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Margins
45%43%
40% 41%
45% 46% 45%
25%22%
19% 19%21% 20% 19%
15%13% 12% 11%
14% 14%13%
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10
Gross Margin
EBITDA Margin
Net Margin
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Tégula
Operating and Financial Aspects 3Q10 02/11 a 09/30*
3,341,605
R$ 48,730 thousand
R$ 16,905 thousand
Gross Margin 36% 35%
EBITDA R$ 2,748 thousand R$ 6,741 thousand
Net Income R$ 3,671 thousand R$ 6,025 thousand
14%
12%
Net Operating Revenue R$ 20,933 thousand
Sales - Tiles (in m2) 1,454,166
Gross Profit
EBITDA Margin
R$ 7,534 thousand
13%
Net Margin 18%
* As from February 11 2010, Tégula’s results were consolidated with those of Eternit as a whole
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CAPEX
CAPEX (R$ million) CAPEX Breakdown (3Q10)*
80
OccupationalSafety and Health
1% Technology3%
Maintainance23%
Quality and
6%
Capacity/ Productivity
62%
Administrative5%
Development
16
34
14
22 16
16
34
14
9M09 9M10
Capacity Increase - ETERNITTégula AcquisitionInvestments * Does not include Tégula acquisition
Molds and New Business
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New production lines of finished products
Goiânia / GO April 2008
Colombo / PR January 2009
Simões Filho / BA October 2010
Capital Markets
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Eternit’s Shares Performance (Dec/06 - Oct/10)
Between 12/28/2006 and 10/29/2010, Eternit”s shares appreciated 51.5% and IBOVESPA appreciated 58.9%.
In the same period, including the payment of dividends and interest on own capital, Eternit’s shares appreciated 152.9%.
70,673
R$ 10.25
50
80
110
140
170
200
dec-06 jun-07 dec-07 jun-08 dec-08 jun-09 dec-09 jun-10 oct-10
ETER3
IBOVESPA
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Liquidity
Shareholders
2,482
7,3177,726
6,6155,717
1,3021,638
2004 2005 2006 2007 2008 2009 2010(*)
(*) Until October 2010
36
Ownership Structure – Oct/10
2%
38%
7%
53%
Individual Investors (5,424 shareholders)
Corporations (78 shareholders)Investors Abroad (64 shareholders)Clubs. Funds and Foundations (151 shareholders)
Shareholding Structure Oct/10 Oct/07
6.89%
5.47%
5.46%
Bahema Participações S. A. - 6.04%
0.97%
0.28%
74.89%
Management 1.50%
Treasury stock 0.03%
Free-Float 59.37%
Geração L. Par. Fund. Invest. em Ações 19.66%
Luiz Barsi Filho 12.74%
Victor Adler 6.70%
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Liquidity
Average Traded Volume (R$ thousand)
3,708
2006 2007 2008 2009
1,297
2,900
1,108
2010(*)
962716604
2004 2005
(*) Until October 2010
38
Shareholder Remuneration (2004 - Nov/10)
Net Income X Shareholders Remuneration (R$ million)
2007 2008 2009
4440
65
81 73
2010
55
7273
2004 2005 2006
20
38443433 30
Net Income Dividends and Interest on own capital
39
Shareholder Remuneration (2004 - Nov/10)
Dividend Yield
2007 2008 2009
8.6%
12.8%
15.1%
2010
9.3%
2004 2005 2006
13.2%
17.1%16.2%
Outlook
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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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Structured Expansion and Diversification Program
Sales of fiber cement (thousand tons)
431.3
522.5578.3 620.3
CAGR (2004/2009) = 11%
725.3 731.2
650.0 650.0 650.0 650.0730.0
850.0
2004 2005
Installed CapacitySales
2006 2007 2008 2009
43
Structured Expansion and Diversification Program
Sales of Chrysotile Ore (Thousand tons)
CAGR (2004/2009) = 3%
270.0 270.0 270.0 270.0248.8 231.3 221.6
272.6295.0
300.0303.8 290.1
2004 2005 2006 2007 2008 2009
Installed CapacitySales
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Launches
Chinaware bathroom fixtures
Components for construction systems and
filters for water pipes
Colored fiber cement roofing tiles
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Chrysotile – The Brazilian Ore
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Chrysotile – The Brazilian Ore
White Ore
Bends and silky fibers without tip
High Concentration of Magnesium:3MgOSiO2H2O
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.
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
Corporate and Environmental Management
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Corporate Management
Open Doors Program
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 40,000 as of September 2010
Target .................... All society
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Raw material sector
Chrysotile Ore sector
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Filtration System Air
Latin America's largest with more than 17 thousand filter sleeves
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Environment Focused Management
Reforestation Work
Zero Reject Monitoring Air Quality
Water Reuse
Quelônios Project - Animal Conservation AreaThe only breeding program of Amazon turtles in Brazil and
Reintegration of Wild Animal Nature in partnership with IBAMA
Seedling Nursery
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Environment Focused Management
About 80% of the 4,500 hectares of the Cana Brava Mountains are maintained as Forest Reserve by SAMA.
Monitored area
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Social Actions - External Public
Terra Mirim Project
Eternit has partnered with the NGO Terra Mirim to promote the training of young people of Simões Filhoand region to act as guides that will be inserted in a project of an ecological track to be implemented soon in the environmental reserve of this unit.The size of the area is 810 thousand square meters
Aerial view of the Environmental Reserve of Simões Filho (BA) Plant
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Social Actions - External Public
Brincar pra Valer Project! – It aims to show the children of a sub-prefecture of São Paulo, that their dreams can come true through thematic workshops and recycling.
Lar Escola São Francisco - Eternit contributes to LESF in order to rehabilitate children and adults with special needs in order to their physical recover, their educational and social integration
Publication and distribution of books in Braille and audio books - In partnership with the DorinaNowill Foundation, Eternit distributed in the vicinity of their units, more than 6,000 copies in order to facilitate access to the blind.
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Social Actions - External Public
GRAAC - Eternit is a partner sponsor of GRAACC and helps to guarantee children and adolescents with cancer, in the most advanced scientific standard, the right to access all the chances of cure with quality of life.
Sambaíba Project – SAMA develops this project to give young people a career through craft workshops with the reuse of waste rock extracted from the mine.
Sociedade dos Queimados - Eternit contributes to society of burning in order to promote the social reintegration of victims of fire burns, especially those from low-income segment, providing a better quality of life.
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Recreational Clubs - Workforce
Minaçu - GO Goiânia - GO
Rio de Janeiro - RJ Simões Filho - BA Colombo - PR
Anápolis - GO
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Events
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Shareholders' Meeting via WEB
www.eternit.com.br/ir
www.assembleianaweb.com.br
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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;
The first 1,000 registered shareholders will have free digital certificates for the first year;
Partners:
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BLOG
www.blogdaeternit.com.br
Access and participate
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BLOG
Communication channel for all who wants to know about Eternit;
It aims to enable interaction between the company and its public in a transparent manner;
Another communication channel with stakeholders;
The blog is divided into four sections:
Chrysotile Ore
Civil Construction
Capital Markets
Environmental Responsibility
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American Depositary Receipt - ADR
On February 24 2010, the Board of Directors approved to initiate the accession process to the American Depositary Receipts Program - Level 1 ADRs.
Sponsor: Eternit;
Depositary Bank: The Bank of New York;
Custodian Bank: Banco Bradesco;
Ratio between Eternit’ shares and ADR: One ADR for one common share.
Ticker: ETNTY
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Awards – 3Q10
ETERNIT – Anamaco award Dispersion 1st place, Anamacoaward 2nd place in terms of large clients and Anamacoaward Dispersion Mension Honor in polyethylene water tankscategory
ETERNIT – Mension Honor for Excellence in Investor Relations
ETERNIT – Trophy Goddess of Fortune - Merit AwardShopkeeper
ETERNIT – Second time ABRASCA Award for best Annual Report in Category 2 - Net income under $ 1 billion
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Awards – 3Q10
SAMA – 44th ranking in “100 Best Companies to Work for in Brazil” –Great Place to Work
SAMA – 2nd Best Mining Company in BrazilBiggest and Best/ Revista EXAME
SAMA – 5th Best Company in Brazil (overall ranking). 1st place in Medium Companies category between 501 and 1500 employeesVocê SA/Exame – 150 Best Companies for you to Work
SAMA – 1st place in Brazilian Environmental Benchmarking(Environmental Protection)
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Information
Gilberto [email protected]
Élio A. [email protected]
Rodrigo Lopes da Luz
Investor Relations
Bárbara M. Tanure Gonçalves
www.eternit.com.br/irPhone: (55-11) 3813-6034 ou (55-11) 3038-3818
IR ConsultantMarcelo Fonseca
Phone: (55-11) 3897-6857
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.
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