CONSOLIDATED INFORMATION Caxias do Sul, February 21 st , 2017 1 FULL-YEAR 2016 RESULTS – Management Report Dear Shareholders: The Management of Marcopolo S.A. ("Marcopolo" or "Company") hereby submits the Management Report and Financial Statements for the year closed on December 31 st 2016, accompanied by the independent auditors' report, for your consideration. The Financial Statements are presented according to the accounting policies adopted in Brazil and the IFRS - International Financial Reporting Standards as established by IASB - International Accounting Standards Board. 1. OPERATIONAL CONTEXT Marcopolo is a publicly-held corporation with registered office in Caxias do Sul, Rio Grande do Sul, founded on August 6th 1949 for the purpose of manufacturing buses, bus bodies and components. The product line encompasses a wide variety of models made up of intercity vehicles, urban vehicles and micro, apart from the Volare family (fully-equipped bus with chassis and body). The buses are manufactured in seventeen plants, five of them located in Brazil (three plants in Caxias do Sul – RS. one in Duque de Caxias – RJ and one in São Mateus – ES) and twelve in foreign countries, one in South Africa, three in Australia, one in China, one in Mexico, two in Argentina, one in Colombia, one in Egypt and two in India. Marcopolo also has a 40% interest in the company SPHEROS (air-conditioning), 30% in WSUL (seat foam), 65% in Apolo (plastic) and 10.8% in the Canadian company New Flyer Industries. Marcopolo also holds all the shares of Banco Moneo S.A., incorporated to provide financial support to the Company products. 2. PERFORMANCE INDICATORS The table below lists some of the relevant indicators for the management and analysis of the Company performance in 2016.
Transcript
CONSOLIDATED INFORMATION Caxias do Sul, February 21st, 2017
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FULL-YEAR 2016 RESULTS – Management Report
Dear Shareholders:
The Management of Marcopolo S.A. ("Marcopolo" or "Company") hereby
submits the Management Report and Financial Statements for the year closed on
December 31st 2016, accompanied by the independent auditors' report, for your
consideration.
The Financial Statements are presented according to the accounting policies
adopted in Brazil and the IFRS - International Financial Reporting Standards as
established by IASB - International Accounting Standards Board.
1. OPERATIONAL CONTEXT
Marcopolo is a publicly-held corporation with registered office in Caxias do Sul,
Rio Grande do Sul, founded on August 6th 1949 for the purpose of manufacturing
buses, bus bodies and components.
The product line encompasses a wide variety of models made up of intercity
vehicles, urban vehicles and micro, apart from the Volare family (fully-equipped bus
with chassis and body).
The buses are manufactured in seventeen plants, five of them located in Brazil
(three plants in Caxias do Sul – RS. one in Duque de Caxias – RJ and one in São Mateus
– ES) and twelve in foreign countries, one in South Africa, three in Australia, one in
China, one in Mexico, two in Argentina, one in Colombia, one in Egypt and two in India.
Marcopolo also has a 40% interest in the company SPHEROS (air-conditioning),
30% in WSUL (seat foam), 65% in Apolo (plastic) and 10.8% in the Canadian company
New Flyer Industries.
Marcopolo also holds all the shares of Banco Moneo S.A., incorporated to
provide financial support to the Company products.
2. PERFORMANCE INDICATORS
The table below lists some of the relevant indicators for the management and
analysis of the Company performance in 2016.
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CONSOLIDATED FIGURES
(BRL million and percentage variation, except where otherwise stated) Operational Performance 2016 2015 Var. %
Net Operating Revenue 2,574.1 2,739.1 (6.0)
Revenue in Brazil 788.3 1,263.5 (37.6)
Export revenue from Brazil 950.0 746.0 27.3
Revenue in foreign countries 835.8 729.6 14.6
Gross Profit 325.8 476.0 (31.6)
EBITDA (1)
353.6 212.5 66.4
Net Profit 222.5 89.1 149.7
Earnings per share in BRL 0.248 0.100 148.0
Return on Invested Capital – ROIC (2)
11.9% 6.3% 5.6pp
Return on Equity – ROE (3)
12.2% 5.4% 6.8pp
Investments 73.5 156.2 (52.9)
Shareholders' Equity 1,836.4 1,828.1 0.5
Financial Position: Industrial Segment
Cash, Cash Equivalents and Financial Investments (4)
1,414.0 1,346.0 5.1
Short Term Financial Liabilities 651.5 691.5 (5.8)
Long Term Financial Liabilities 994.9 1,065.1 (6.6)
Net Financial Liabilities 232.4 410.6 (43.4)
Financial Position: Industrial and Financial Segments
Cash, Cash Equivalents and Financial Investments 1,458.9 1,365.2 6.9
Short Term Financial Liabilities 925.6 966.1 (4.2)
Long Term Financial Liabilities 1,374.2 1,509.7 (9.0)
Net Financial Liabilities 840.8 1,110.6 (24.3)
Margins
Gross Margin 12.7% 17.4% (4.7)pp
EBITDA Margin 13.7% 7.8% 5.9pp
Net Margin 8.6% 3.3% 5.3pp
Notes: (1) EBITDA = Earnings before interest, taxes, depreciation and amortization; (2) ROIC (Return on Invested Capital) = EBIT/ (inventories + customers + property, plant and equipment + intangible assets - suppliers); (3) ROE (Return on Equity) = Net Profit/Beginning Shareholders' Equity; (4) The amount also includes the account "financial assets measured at the fair price by means of the result"; pp = percentage points.
3. BUS INDUSTRY PERFORMANCE IN BRAZIL
The Brazilian production in reached 14,372 units in 2016, a volume which is
17.9% below the 17,511 units produced in 2015. Since the bus is sold fully-equipped,
Volare is not computed in the Brazilian production of bodies. If the production of this
kind of vehicle were considered, the domestic production would be 15,613 units per
year, against 19,367 units in 2015.
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The domestic market demand reached 9,869 units, a 26.1% drop compared to
2015, while the production to the foreign market was of 4,503 units, 8.3% higher than
exportation in the previous year.
The chart below shows the evolution of the Brazilian bus body production in the
last ten years:
BRAZILIAN BUS PRODUCTION – TOTAL (in units)
PRODUCTS (1)
2012 2013 2014 2015 2016
Intercity 9,117 10,216 7,977 5,679 4,185
Urban 18,944 17,938 16,836 9,593 7,929
Micro 5,019 4,955 3,616 2,239 2,258
TOTAL 33,080 33,109 28,429 17,511 14,372
Sources: FABUS (National Bus Manufacturers Association) and SIMEFRE (Interstate Union of the Railroad and Road Material and Equipment Industry).
Note: (1) Includes exported KD (knocked down) units.
BRAZILIAN BUS PRODUCTION – DOMESTIC MARKET (in units)
PRODUCTS (1)
2012 2013 2014 2015 2016
Intercity 6,970 7,666 5,644 3,382 1,654
Urban 17,752 17,011 15,861 8,291 6,796
Micro 3,900 4,150 3,123 1,679 1,419
TOTAL 28,622 28,827 24,628 13,352 9,869
Note: (1) See notes on the table – Brazilian Bus Production – Total.
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BRAZILIAN BUS PRODUCTION – FOREIGN MARKET (in units)
PRODUCTS (1)
2012 2013 2014 2015 2016
Intercity 2,147 2,550 2,333 2,297 2,531
Urban 1,192 927 975 1,302 1,133
Micro 1,119 805 493 560 839
TOTAL 4,458 4,282 3,801 4,159 4,503
Note: (1) See notes on the table – Brazilian Bus Production – Total.
4. MARCOPOLO'S PERFORMANCE
In order to mitigate the impact of one more year of economical and political
instability in Brazil, Marcopolo took important actions in 2016 to circumvent the
adverse scenario.
In early 2016, the Company adopted flexible working hours in the Caxias do Sul
plants and suspended the employment contracts on a temporary basis (lay-off) in the
Marcopolo Rio plant, in Duque de Caxias/RJ, seeking to minimize the crisis effects in
workstations.
The Company also implemented a number of projects focused on exploring
opportunities, notably the Conquest project, intended to increase exportation through
the reinforcement of the business in traditional Latin American markets, cover new
markets and expand the customer portfolio in foreign countries. More than 65
countries were visited during the year, resulting in a 54.6% increase in the physical
exportation volume and an increase in exportation income.
In April 2016, the Company launched the program Brazil Point to Point, targeted
at the Brazilian market, including visits to customers in every region of Brazil during the
second half of the year, allowing for the consolidation of the brand and customer
relations.
In the Volare segment, the Company launched the Business to Business project,
which, through visits to transportation operators, provided an expansion of the
customer portfolio and reduction of inventories in the factory and in the
concessionaires, from 567 units in December 2015 to 148 at the end of the year.
Apart from these projects, Marcopolo took other actions to mitigate the effects
of a reduced demand in its operating results, acting towards the reduction of expenses
and indirect costs, increase of operating efficiency through the adoption of the LEAN,
increase the working capital through the reduction of inventories and receivables.
During the year, the Company also intensified the quality program, with expansion of
the after-sales service, seeking customer loyalty.
In controlled companies in foreign countries, the net revenue of Polomex in
Mexico and Volgren in Australia rose 28% and 13.3% respectively. The result brought
by the Mexico unit arises mostly from the greater sale of intercity buses through the
exportation from Brazil, an effect of the new business model which allows Polomex to
CONSOLIDATED INFORMATION Caxias do Sul, February 21st, 2017
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use other chassis brands. In the Australian unit, a 10.1% increase in physical units
invoiced explains the income growth.
In 2016, the Company launched new products, notably intercity bus models for
the Mexican market, such as MP 180 MX, MP 135 MX, MP 120 MX, MP 105 MX and
the urban model MX 60 BRS. In the Volare segment, the model named Volare Cinco
was launched in April 27th. With the development of this complete product, which
also includes chassis production, Marcopolo has entered a new market niche named
Compact Bus.
In an Extraordinary General Meeting held on August 3rd, the Marcopolo
shareholders approved the consolidation of L&M Incorporadora Ltda, the direct
controller of San Marino Ônibus Ltda. (“Neobus”), through the issuance of 12,108,151
new preferred shares. After the consolidation, several measures were taken to capture
synergies, with unified financial management and sharing of structures.
On September 22nd, the Company sold 4.5 million shares of New Flyer Industries
owned by Marcopolo, amounting to a 7.4% share of the company's capital stock,
generating BRL 339.9 million in net cash.
Finally, on November 7th 2016, Marcopolo's Board of Directors approved a
capital increase within the authorized capital limit. The capital increase was ratified by
the Board of Directors on December 23rd 2016 with the issuance of 16,187,774 new
preferred shares, totaling capitalization of BRL 43.7 million.
4.1 Units Recorded in Net Revenue
In 2016, 9,212 units were recorded in net revenue, 4,425 of which were
recorded in Brazil (48% of the total), 2,753 units exported from Brazil (29.9%) and
2,034 units produced in foreign countries, as shown in the table below:
OPERATIONS (in units) (1) 2016 2015 Var. %
BRAZIL
- Domestic market 4,425 7,126 (37.9)
- Foreign market 2,929 1,915 53.0
SUBTOTAL 7,354 9,041 (18.7)
Exclusion exported KD’s (2)
176 134 31.3
TOTAL IN BRAZIL 7,178 8,907 (19.4)
FOREIGN
- South Africa 362 343 5.5
- Australia 471 428 10.1
- Mexico 1,201 1,492 (19.5)
TOTAL FOREIGN 2,034 2,263 (10.1)
GRAND TOTAL 9,212 11,170 (17.5)
Notes: (1) The Neobus units are computed in the table above only from August 2016 on; (2) KD (Knock Down) =
Partially or totally knocked down bodies.
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4.2 Production
In 2016, the consolidated Marcopolo production amounted to 8,810 units,
20.4% below the 11,072 manufactured in 2015. Out of these total figures, 77.6% have
been produced in Brazil and the remaining 22.4% in foreign countries. Marcopolo's
worldwide production figures are presented on the tables below:
MARCOPOLO – CONSOLIDATED WORLDWIDE PRODUCTION
OPERATIONS (in units) (1) 2016 2015 Var. %
BRAZIL (2)
- Domestic market 4,070 7,052 (42.3)
- Foreign market 3,111 1,934 60.9
SUBTOTAL 7,181 8,986 (20.1)
Exclusion exported KD’s (3)
341 168 103.0
TOTAL IN BRAZIL 6,840 8,818 (22.4)
FOREIGN
- South Africa 298 334 (10.8)
- Australia 471 428 10.1
- Mexico 1,201 1,492 (19.5)
TOTAL FOREIGN 1,970 2,254 (12.6)
GRAND TOTAL 8,810 11,072 (20.4)
Notes: (1) The Neobus units are computed in the table above only from August 2016 on; (2) Includes the production of
the Volare model, as well as the production of Marcopolo Rio; (3) KD (Knock Down) = Partially or totally
knocked down bodies.
MARCOPOLO – CONSOLIDATED WORLDWIDE PRODUCTION BY MODEL
PRODUCTS/MARKETS (1)
(in units)
2016 2015
DM FM (2)
TOTAL DM FM (3)
TOTAL
Intercity 877 1,925 2,802 2,032 1,149 3,181
Urban 1,963 2,005 3,968 2,999 2,403 5,402
Micro 415 384 799 419 214 633
SUBTOTAL 3,255 4,314 7,569 5,450 3,766 9,216
Volares (4)
815 426 1,241 1,602 254 1,856
TOTAL PRODUCTION 4,070 4,740 8,810 7,052 4,020 11,072
Notes: (1) The Neobus units are computed in the table above only from August 2016 on; (2) DM = Domestic Market; FM
= Foreign Market; (3) The total FM production includes exported KD units (partially or totally knocked down
bodies), which amounted to 341 units in 2016 against 168 units in 2015; (4) The production of Volares is not a
part of the SIMEFRE and FABUS figures or the industry production.
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MARCOPOLO – PRODUCTION IN BRAZIL
PRODUCTS/MARKETS (1)
(in units)
2016 2015
DM FM TOTAL DM FM TOTAL
Intercity 877 1,880 2,757 2,032 1,094 3,126
Urban 1,963 423 2,386 2,999 372 3,371
Micro 415 382 797 419 214 633
SUBTOTAL 3,255 2,685 5,940 5,450 1,680 7,130
Volares (2) 815 426 1,241 1,602 254 1,856
TOTAL PRODUCTION 4,070 3,111 7,181 7,052 1,934 8,986
Notes: (1) The Neobus units are computed in the table above only from August 2016 on; (2) The production of Volares
is not a part of the SIMEFRE and FABUS figures or the industry production.
4.3 Market Share
Marcopolo kept its leading position in the Brazilian market, closing the year with
a 41.3% market share. Even though the Brazilian bus production had a 17.9% drop in
2016, the Company's general market share rose 0.6 percentage points compared to
2015, notably the intercity segment, which rose 10.9%.
Disregarding the total Neobus production in the period, Marcopolo's market
share in 2016 would be 37.4%. The Company's market share was affected by the
selective vacations adopted in the Ana Rech unit in January 2016, as well as by the lay-
off in the Marcopolo Rio unit in the first 5 months of the year.
The table below shows Marcopolo's market share in the Brazilian production by product line:
MARKET SHARE IN BRAZILIAN PRODUCTION (%)
PRODUCTS (1)
2012 2013 2014 2015 2016
Intercity 58.9 56.0 57.0 55.0 65.9
Urban 34.6 34.7 34.0 35.1 30.1
Micro 22.8 24.9 27.4 28.3 35.3
TOTAL 39.5 39.8 39.6 40.7 41.3
Source: FABUS and SIMEFRE
Note: (1) Volare is not computed for market share purposes.
5. CONSOLIDATED NET REVENUE
The consolidated net revenue achieved BRL 2.574.1 million in 2016, 6% below
the BRL 2,739.1 million in 2015. The result was partially offset by a 27.3% increase in
exportation and by revenue from foreign units, notably the performance of the units in
Mexico and Australia.
The domestic market sales yielded revenue of BRL 788.3 million or 30.6% of the
total net revenue (46.1% in 2015). Exportation, added to foreign transactions, reached
revenue of BRL 1,785.8 million or 69.4% of the total (53.9% in 2015).
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Revenue by product and destination market is shown on the table below:
TOTAL CONSOLIDATED NET REVENUE BY PRODUCTS AND MARKETS (BRL million)
A change of independent auditors will take place again in 2017, when KPMG
Auditores Independentes will be replaced by PricewaterhouseCoopers Auditores
Independentes.
19.2 CVM Instruction 381/03
In compliance with the CVM Instruction 381/03, subdivisions I through IV of
Section 2, Marcopolo hereby declares that it has agreements with its Independent
Auditors other than for the auditing of the Company's Financial Statements. In 2016,
KPMG Auditores Independentes was engaged for additional due diligence services and
the fees were BRL 334.3 thousand. The responsibility for the definitions inherent to
the executed procedures and the application thereof are prerogatives of the
Management, so both the Company and its external auditors understand that such
services do not affect professional independence.
20. STOCK MARKET
20.1 Capital Stock
The Company's capital stock is BRL 1,264,622,468 divided into 925,196,009
shares, 341,625,744 of them being common shares (36.9%) and 583,570,265 being
preferred shares (63.1%), all of them registered, book-entry and without par value.
20.2 Performance of the Marcopolo Shares in BM&FBovespa
In 2016, 1,265 thousand transactions were conducted with Marcopolo shares
and 898.8 million shares were traded. Transactions with shares issued by Marcopolo
moved BRL 2.3 billion in the year. The interest of foreign investors in Marcopolo's
capital stock amounted to 58.3% of the preferred shares and 38.7% of the total capital
stock on 12.31.2016.
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The table below shows the evolution of the main stock market indicators:
INDICATORS 2016 2015
Number of transactions (thousands) 1,265.0 1,407.2
Traded Shares (million) 898.8 1,065.8
Traded amount (BRL million) 2,338.3 2,497.8
Market value (BRL million) (1) (2)
2,535.0 1,659.3
Book value per share (BRL) 1.98 2.04
POMO4 quotation (last business day) 2.74 1.85
Interest on Equity Capital and dividends per share (BRL/share) 0.131 0.048
Notes: (1)
Quotation of the last transaction of the period of the Preference Book-entry share (PE), multiplied by the total number of shares (OE+PE) in the same period;
(2) Out of this total,
4,949,901 preferred shares were in treasury on 12.31.2016.
21. DIVIDENDS/INTEREST ON EQUITY CAPITAL
On November 7th 2016, the Board of Directors approved the payment of interest
on capital equity in the gross amount of BRL 118.4 million, equivalent to BRL 0.131 for
each share, which amounts to 53.9% of the Company's net profit and amounts to a
4.7% yield (dividend per share/share quotation at the end of the period).
Finally, as a result of the continuation of an adverse scenario and also because of
the aforementioned payment of interest on equity capital, in a meeting held on
February 21st 2017 the Board of Directors chose not to pay supplemental dividends on
the year 2016 and also to suspend payment of interest on equity capital in 2017.
22. INVESTMENT/NON-CURRENT ASSETS
In 2016, Marcopolo invested BRL 73.5 million, BRL 8.7 million of which was spent
in the parent company and applied towards: BRL 4.1 million in machines and
equipment, BRL 1.2 million in computer equipment and software and BRL 3.4 million in
other non-current assets. In the controlled companies, BRL 50.9 million was invested in
Volare Espírito Santo, BRL 5.3 million in Polomex, BRL 3.9 million in Volgren, BRL 1.9
million in Neobus, BRL 1.4 million in Marcopolo Rio and BRL 1.4 million in other units.
The net balance of the investments in the subsidiaries, discounting R$ 23.7 million
received as dividends, was R$ 356.1 million, including in this amount R$ 405.9 million
related to the partial sale of the stake in New Flyer Industries.
23. SOCIOENVIRONMENTAL RESPONSIBILITY
In a constant search for best practices, Marcopolo seeks economic development,
simultaneously improving the quality of life of its employees, their families and society
as a whole. The Marcopolo Solidarity Production system (SIMPS) promotes industrial
development for growth, market leadership, productivity, quality, workplace
improvement and profitability of products and services. The system provides
conditions for continuous improvement of the quality of its products, processes and
services, controlling the dangers to the environment and the health and safety of the
workers, eliminating waste wherever it is occurring and maintaining a fully integrated
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chain. Marcopolo remains with international management certifications ISO 14001 -
Environment, ISO 9001 – Quality, and OHSAS 18001 – Health and Safety.
23.1 Social Responsibility
Marcopolo and its employees develop social responsibility under the
coordination of the Marcopolo Foundation. One of the main projects targeted at the
community is the Schools Project, for the purpose of contributing to the development
of the educational environment, school community relationship and citizenship
education. The Schools Project provides diversified opportunities of activities out of
school hours such as music, choir, orchestra, sports and refresher clinic. The
Marcopolo Foundation also contributes on a monthly basis to educational and
healthcare charities.
The Everyone in School, project, also coordinated by the Marcopolo Foundation,
has the purpose of supporting parents in the education of their children, contribution
to family savings by reducing school supplies expenditures through the deliverance of
notebook kits. The program is targeted at children and adolescents aged 5-18 taking
elementary or secondary school. Nearly 21,000 customized notebooks were delivered
in 2016.
The Marcopolo Foundation encourages and facilitates the allotment of 6% of
their employees' Individual Income Tax to the Municipal Funds for the Rights of
Children and Adolescents in the cities of Caxias do Sul (RS) and Duque de Caxias (RJ) by
means of the Destine Você Também Project, creating benefits in professionalization
actions for nearly 1.500 young people in social and personal risk situation.
23.2 Satisfaction of Employees
The satisfaction of the Marcopolo's employees is measured by means of the
Internal Organizational Climate Survey that is conducted every two years. The last
survey was conducted in 2016, achieving 75% satisfaction level for the Caxias do Sul
units and 80% for the Rio de Janeiro unit. These results are considered quite favorable
in view of the Brazilian benchmarks. The action plan is structured jointly by
representatives for several company Departments, with periodical monitoring.
Marcopolo provides both internal and external channels for employees to submit
comments, criticism, ideas and suggestions about the several topics involving their
work or related to the Code of Conduct guidelines and the Compliance rules, with
specific segregation for reporting.
23.3 Education and Training
Marcopolo encourages the constant qualification of its employees. Training is
provided focused on the development of skills for all professional levels, with an
average of 82 hours of training for each employee.
The training of managers for 2016 was focused in the implementation of the
LEAN method, seeking to improve team processes and performance. As a way to
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disseminate the concepts of this method, 205,950 hours of training were provided to
employees from all departments, including newly hired ones.
Marcopolo also provides customer training, both in the Training Center and in
clinics and facilities near the companies. The 2016 totaled 1,032 internal market
participants and 744 external market participants.
The Marcopolo Professional Education School (EFPM) maintained industrial
courses for young people in partnership with SENAI, University of Caxias do Sul and the
Social Assistance Foundation (FAS). One of EFPM's main purposes is to prepare
professionals for the labor market by means of the first paid job and access to the
Company's career plan.
Marcopolo has had an Education Incentive Program since 1981, including
scholarships for high school, technical courses, graduate and postgraduate courses,
apart from foreign languages for employees approved in a selection process.
23.4 Quality of Life
The quality of life programs targeted at employees and their families are
coordinated by the Marcopolo Foundation, including educational, leisure, cultural and
sports activities. The Caxias do Sul and Duque de Caxias units feature their own
facilities with places for events, courts and kiosks.
23.5 Environment
Marcopolo is committed to its environmental programs on a permanent basis. It
also invests in new technologies in order to minimize and control the environmental
impact of its business. In 2016, it began a migration process from ISO 14001
certification to the new version published in 2015, a NBR ISO 14001:2015.
23.6 Compensation
The employees' compensation is made up of a fixed part, connected to their
competences and skills, and a variable part, contingent upon the attainment of the
goals of the Profit-sharing Program. Wage researches are conducted periodically in
order to assess whether the amounts paid to the employees are within the regional
standards, so that the company can remain competitive in the labor market.
23.7 Share Purchase Option Plan
The Regulation of the Share Purchase or Subscription Option Plan was approved
by shareholders in the Extraordinary General Meeting held on December 22nd 2005,
changed by the O/EGM dated March 23rd 2006 and by the Board of Directors in
meetings held in the years 2006, 2007, 2011, 2012 and 2013. The plan, whose
participants are executives of the Company and its controlled companies (except
controlling officers) has as main purposes: (i) Align the interests of participants and
shareholders; (ii) Get the participants committed to the company's short, mid and long
term results; (iii) Encourage a feeling of ownership; and (iv) Attract and retain talent.
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The Plan is monitored by the HR and Ethics committee and approved by the Board of
Directors.
The company also has a Long-Term Incentive Plan with Restricted Shares,
proposed by the Board of Directors on February 12th 2015 and approved by the
General Meeting on March 26th 2015. The plan has the purpose of composing the
compensation package of the main executives of the company, maintain
competitiveness within the market, attract and retain the best professionals and align
the interests of executives and shareholders.
24. MANAGEMENT COMPENSATION
The aggregate amount of the fixed compensation is established by the General
Shareholders Meeting and paid to the management by the Board of Directors. The
greatest annual individual compensation of the Board of Directors/Executive
Committee totaled BRL 4,047.7 thousand in 2016, the average compensation was BRL
1,001.9 thousand and the smallest was BRL 407.0 thousand. Among executive officers,
the greatest individual compensation was BRL 4,410.1 thousand in 2016, the average
was BRL 3,028.2 thousand and the smallest was BRL 2,337.1 thousand. In the Audit
Committee, the greatest individual compensation was BRL 215.8 thousand in 2016, the
average was BRL 186.3 thousand and the smallest was BRL 171.6 thousand.
25. PERSONNEL
NO. OF EMPLOYEES 2016 2015 2014 2013 2012
Controlling Company 6,125 6,236 7,883 8,158 8,204
Controlled Companies in Brazil 2,135 1,369 2,776 2,554 2,617
Notes: (1) Includes employees in the controlled/associated companies proportionally to their equity interest; (2) Refers to the total participation in controlled/associated companies.
26. PROSPECTS FOR 2017
Early 2017 points to a challenging year for the capital goods industry in Brazil,
especially in the first quarter. However, a more optimistic prospect regarding the
economic activity in Brazil, arising from recently disclosed inflation figures and
reduction in interest rates, allows the Company to foresee a gradual return in the
demand for buses, especially in the second half of the year.
Marcopolo is still engaged in actions to reduce indirect expenses and costs and
increase operating efficiency through the adoption of the LEAN concepts, apart from
improving working capital through the reduction of inventory and receivables. Since
2015 the Company has adopted mechanisms to reduce the impact of a smaller
demand in personnel, including selective vacation, collective vacation, extended
holidays with banking of hours and flexible working hours. In January 2017, Marcopolo
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adopted collective vacation in the Caxias do Sul units. In Marcopolo Rio, Duque de
Caxias/RJ apart from collective vacation in January, flexible working hours were
adopted in 4 days of February.
The domestic demand for intercity buses shall be boosted by the accessibility
regulations, which requires new vehicles produced from July 2017 on to be equipped
with elevators, and for the required reduction in the average age of the fleet, which
shall be reduced to 8 years beginning in 2017 pursuant to Resolution no. 4,770 of the
National Land Transportation Agency (ANTT) for interstate and international lines. The
nonperformance of the resolution may entail the revocation of the authorization
granted to transportation providers for the operation of their respective lines, for
which reason such replacement is mandatory.
In the urban bus segment, the federal program named Refrota, announced in
December 13th 2016, with authorizes banks to use FGTS (Guarantee Fund for Length
of Service funds) for the Transportation Infrastructure Program and from Urban
Mobility (Pro-Transportation) may foment new investments. The purpose of the
program is to extend credit in the total amount of BRL 3 billion for the replacement of
up to 10 thousand buses. Fare increases in major state capitals and many other cities,
even on a one-off basis, may boost sales targeted at the replacement and
modernization of the municipal operators' fleet.
FINAME TJLP is still in place, allowing micro, small and medium enterprises to
finance up to 80.0% of the asset with the TJLP plus 1.6% p.a. and the spread of the
transferring bank. Large enterprises may also finance up to 80.0% of the asset, 70.0%
of this total amount via LTIR plus 2.0% p.a. and 30.0% linked to the SELIC rate plus
2.48% p.a. plus the spread of the transferring bank. In this context, the confirmation of
successive cuts in the SELIC rate may boost the domestic demand.
The Company believes in the continuation of the positive performance of
exportation from Brazil, with the maintenance of traditional customers and
prospecting of new markets. Marcopolo will continue its strong action in the foreign
market and for this purpose, beginning on February 1st 2017, restructured its
Commercial department – Domestic Marketing, integrating it into the International
Affairs department. The purpose is to maximize business in all regions and enhance
the integration among exportations from Brazil and international transactions of
Marcopolo.
As for units located in foreign countries, the expectations for 2017 are generally
positive, with the evolution of the productivity and efficiency indicators and
subsequent improvement in performance. The transactions shall also be favored by
the aforementioned integration project, with the joint development of specific
markets and products for each region where the units do business.
Marcopolo still believes in the need for urban mobility systems in the countries
where it works and in the renewal of the Brazilian bus fleet, which has stagnated as a
CONSOLIDATED INFORMATION Caxias do Sul, February 21st, 2017
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result of the economic retreat of recent years. The Company will continue making
efforts to regain its historical performance level and, for this reason, it will continue
developing new products and improving the on-going ones, especially those
concerning an increase in operating efficiency, business reinforcement in foreign
markets, search for synergies and optimization of its plants.
27. ACKNOWLEDGEMENTS
Marcopolo is honored to thank customers, suppliers, representatives,
shareholders, financial institutions, government bodies, communities and especially
the employees for their effort, devotion and commitment to overcoming this moment
of major challenges.
Caxias do Sul, February 21st 2017.
The Management.
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CONSOLIDATED INFORMATION Caxias do Sul, February 21st, 2017
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CONSOLIDATED INFORMATION Caxias do Sul, February 21st, 2017
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EXHIBIT:
Marcopolo S.A. (BM&FBOVESPA: POMO3; POMO4), seeking transparency in
the disclosure of the results, presents for comparison in this Exhibit, the main
operational indicators based on the standard prior to adoption of IFRS 10 and 11.
MARCOPOLO – CONSOLIDATED WORLDWIDE PRODUCTION
OPERATIONS (in units) 2016 2015 Var. %
BRAZIL: (1)
- Domestic Market 4,159 7,802 (46.7)
- Foreign Market 2,888 2,065 39.9
SUBTOTAL 7,047 9,867 (28.6)
Eliminations KD’s exported (2) 341 168 103.0
TOTAL IN BRAZIL 6,706 7,802 (14.0)
ABROAD:
- South Africa 298 334 (10.8)
- Argentina – Metalpar (50%) 695 869 (20.0)
- Argentina – Metalsur (25%) 54 37 45.9
- Australia 471 428 10.1
- Colombia (50%) 580 771 (24.8)
- Egypt (49%) 340 583 (41.7)
- India (49%) (3) 4,504 5,711 (21.1)
- Mexico 1,201 1,492 (19.5)
TOTAL ABROAD 8,143 10,225 (20.4)
GRAND TOTAL 14,849 19,924 (25.5)
Notes: (1)
Includes production of Volare model, as well as the production of Marcopolo Rio and proportional share
of 45.0% in the production of San Marino/Neobus until July/16; (2)
KD (Knock Down) = Partially or totally
knocked down bodies; (3)
In India, the units produced at the factory in Lucknow are summed.
MARCOPOLO – PRODUCTION IN BRAZIL
PRODUCTS (in units)
2016 2015
DM FM (1)
TOTAL DM FM (1)
TOTAL
Intercity 897 1,800 2,697 2,134 1,177 3,311
Urban 2,135 374 2,509 3,372 400 3,772
Micro 312 288 600 694 234 928
SUBTOTAL 3,344 2,462 5,806 6,200 1,811 8,011
Volares (2)
815 426 1,241 1,602 254 1,856
TOTAL PRODUCTION 4,159 2,888 7,047 7,802 2,065 9,867
Notes: (1)
The total FM production includes the exported KD units (partially or fully knocked down bodies); (2)
The Volare production is not part of the SIMEFRE and FABUS figures or the sector production.
