APIMEC-MG Meeting | Earning Results 2Q15
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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.”
Eternit Group
Activity
Manufacture of fiber cement and construction solutions and
commercialization of metallic fittings
Chrysotile Mining
Manufacture of concrete tiles
Commercialization of
bathroom chinaware
Industrial Units
4 1 1 6 1
Market Share – 2014
Leader in fiber cement The world's 3rd largest
Leader in concrete tiles
5th largest of Brazil in
bathroom chinaware
Annual Capacity
1 million tons 280 thousand
tons
105.000 thousand
pieces
Ramp-up period
The largest and most diversified roof coverings industry in Brazil
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Strategic Location
Mining company Sales Office Eternit Headquarters and Showroom Concrete Tile Plant Fiber Cement Plant
Bathroom Chinaware Plant Unit for the research, development and production of construction material inputs (under construction)
The industrial units of the Eternit Group are located in all regions of
Brazil.
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Mining
Serpentinite rock with chrysotile mineral fibers
Chrysotile Mineral (Before beneficiation)
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Portfolio
Portfolio
Water Tanks and Construction Solutions
Roof Covering
Metallic Tiles
Concrete Tiles
Fiber Cement Panels
Construction Solutions
Polyethylene Water Tanks
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Portfolio
Roof Covering Accessories
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Portfolio
Bathroom
Toilet Seats
Bathroom Chinaware Kitchen metal fixtures
Bathroom metal fixtures
Kitchens
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Operational Performance
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1H15 x 1H14
• Domestic Market – down by 7.9%
• Foreign Market – decline of 3.4%
2Q15 x 2Q14
• Domestic Market – drop of 4.5%
• Foreign Market – decrease of 6.3%
Sales of Chrysotile Mineral (thousand tons)
Domestic Market Foreign Market
-5.3% -11.0%
-6.0% 4.3%
Covering market - Brazil - 2014
Residential Market Industrial and Commercial Market
Total Market Market Evolution (MM m²)
Metallic 16%
Ceramics 33%
Fiber cement 46%
Other 3%
Fiber cement 34% Metallic
54%
Other 6%
Ceramics 6%
Concrete 2%
Source: Estimative of the Fiber Cement Production Chain
Ceramics 45%
Fiber cement 51%
Concrete 2%
Other 2%
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Sales of Fiber-Cement (thousand tons)
-1.8% -2.2%
-0.4% 2.0%
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Sales of Concrete Tiles (thousand pieces)
-27.0%
-19.0%
-27.7% -7.7%
Economic and Financial Information
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Domestic Market Foreign Market
Consolidated Net Revenue (R$ million)
7.2% -8.6%
5.3% 2.6%
2Q15 x 2Q14
• Domestic Market – advance of 1.0%
• Foreign Market – growth of 36.8%
1H15 x 1H14
• Domestic Market – up to 0.5%
• Foreign Market – increase of 28.6%
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COGS Breakdown
Fiber-cement Chrysotile Mineral
Concrete Tiles
(*) Cement (44%), Chrysotile Mineral (42%) and the others (14%) (**) Fuel, explosives, packaging, among the others
(***) Cement (55%), sand (29%) and the others (16%)
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15.5% -22.7%
15.7% -8.9%
Adjusted EBITDA (R$ million) and Adjusted EBITDA Margin (%)
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Net Income (R$ million) and Net Margin (%)
-7.4% -33.2%
-11.2% -14.4%
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Origin of debt Repayment Schedule
Debt 06/30/13 06/30/14 06/30/15 Short- term gross debt 55.6 55.8 109.3 Long-term gross debt 34.4 48.2 46.1 Cash and cash equivalents (6.6) (5.0) (13.3) Short-term investments (same cash equivalents) (49.5) (44.4) (21.2) Net debt 33.9 54.6 120.9 EBITDA (last 12 months) 185.3 169.3 168.5 Net debt / EBITDA x 0.18 0.32 0.72 EBITDA (last 12 months) 187.5 176.4 191.7 Net debt / EBITDA x 0.18 0.31 0.63 Net debt / Equity 6.9% 10.7% 23.4%
Debt (R$ million)
* Debt related to ACE and ACC, which corresponds to 62% of foreign currency debt, is naturally hedged by accounts receivable in foreign currency resulting from chrysotile exports.
*
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Capital Expenditures (R$ million)
Capital Markets
Corporate Governance Structure
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General Shareholders’ Meeting
Audit, Financial Control and Treasury Committee
Disclosure, Socio-Environmental Responsibility and Legal Committee
Strategic Planning Committee
Human Resources Committee
Board of Auditors
Board of Directors
CEO*
Internal Controls Internal Auditing
Mining Directorship
Industrial Directorship
Human Resources
Directorship
Commercial Directorship**
Administrative – Financial
Directorship
Investor Relations
Directorship* * Gathers function ** Gathers function
New Bussiness Directorship**
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FREE-FLOAT 84.5%
Individual Investors Corporations Investors Abroad Clubs, Funds and Foundations
*Independent directors in accordance with BM&FBOVESPA Novo Mercado Regulations
Highlights
Geração L. Par. F. I. A. 13.80%
Luiz Barsi Filho 13.75%
Victor Adler 7.04%
Directors 1.22%
Stocks in Treasury 0.03%
Board of Directors Member since
Luis Terepins* - President 2011 Lírio Albino Parisotto* 2004 Marcelo Munhoz Auricchio* 2011 Leonardo Deeke Boguszewski* 2014 Marcelo Gasparino da Silva* 2014 Luiz Barsi Filho* 2015 Raphael Manhães Martins* 2015
Board of Auditors Member since
André Eduardo Dantas 2013 Paulo Henrique Z. Funchal 2013 Benedito Carlos Dias da Silva 2015 Luciano Luiz Barsi 2015 Robert Juenemann 2015
Shareholding Structure – Aug/15
Liquidity
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Number of Shareholders Average Trade Volume
(R$ Thousand)
(*) Until August, 2015
2013 2014 2015*
882
489 480
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Pay Out
Dividends and Interest on own capital Net Income
Policy of Remuneration Net Income x Distributed Earnings (R$ million)
Eternit’s Shares Performance
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Between 08/29/2014 to 08/31/2015, Eternit’s shares depreciated 50.5% and BOVESPA Index deppreciated 23.9%.
In the same period, including the payment of dividends and interest on own capital, Eternit’s shares depreciated 44.8%.
*At the Extraordinary General Meeting held on September 24, 2014, the proposed split of the common shares was approved, so that each (1) share was going to be represented by two (2) shares.
R$ 2.08
46,625
Outlook
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Economic Indicators
Source: BACEN
Minimum Wage x Basic Basket SP (purchasing power)
Credit availability Unemployment rate - Brazil
*preliminary data
Government, Industry, Housing, Rural, Retail, Credit for Individuals (R$ billion)
*
48.3% 46.0% 49.0%
Geographic RegionUp to
Three
Three to
Five
Five to
Ten
More than
Ten
Regional
Housing
Deficit
North 438 67 54 17 576
Northeast 1,361 208 168 54 1,791
Southeast 1,791 273 221 71 2,356
South 460 70 57 18 605
Midwest 353 54 44 14 465
Total Approximate
Housing Deficit4,403 672 544 174 5,793
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Housing Deficit by Family Income by Minimum Wages
According to a study by the Getúlio Vargas Foundation (FGV), the reduction in housing deficit was driven by the support provided to families through the My Home, My Life program, and estimates that in 2024, with the growth of the population, the country will have approximately 16.4 million new families, of which 10 million will have family income of up to three minimum wages. The FGV study also highlights that zeroing the housing deficit will require investments of approximately R$ 760 billion in low-income housing over the course of ten years.
Source: Study done by the João Pinheiro Foundation, in 2012, official statistics body for the state of Minas Gerais (preliminary results),
and PNAD 2012 (National Survey by Household Sampling).
In thousand of Units
Brazil GDP vs. Construction GDP vs. ABRAMAT Index vs. Consolidated Gross Revenue of Eternit¹ (%)
Source: *CENTRAL BANK OF BRAZIL – projected growth of Brazilian and construction GDP. ** ABRAMAT – projection of domestic construction material sales in 2015, not adjusted for inflation. 1 ETERNIT – Growth in Eternit's consolidated gross revenue compares January-June 2015 with the same period in 2014, deflated by the IGP-M index.
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Chrysotile – The Brazilian Mineral
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Serpentinite rock with chrysotile mineral fibers
White Mineral
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.
Chrysotile – The Brazilian Mineral
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).
For further information, please visit: http://www.eternit.com.br/ir
Corporate and Environmental Management
Corporate Management
Since.................. November, 2004
Objective .................
Contribute to a better understanding of society about the extraction and processing of chrysotile asbestos and the manufacture of fiber cement products in a controlled and responsible manner.
Coverage.......... Five plants of the Eternit Group and the mine SAMA
Visitors............... More than 69 thousand until August, 2015
Public ................... General society
Open Doors Program
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Management with Environmental Focus
Quelônios Project - Animal Preservation Area
Single Amazonian turtles breeding in Brazil and Reintegration of Wild Animal Nature in partnership with IBAMA
Zero Waste Air Quality Monitoring Water reuse Reflorestation
Seedling Nursery
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Management with Social Focus
Inserted in the communities of their fields, Eternit supports the socio-economic and cultural development of the regions by supporting social initiatives. They are sponsored fully by Eternit and its subsidiaries the Open Doors Program and Sambaíba project. Check out some of the social projects supported by Eternit and its subsidiaries in the communities in which they operate:
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Phone: (55-11) 3194-3881
(55-11) 3194-3872
This material was produced with paper certified FSC (Forest Stewardship Council), which is a guarantee that the raw material comes from a forest managed in an environmentally, socially and economically viable.
www.blogdaeternit.com.br
www.eternit.com.br/ir
Nelson Pazikas
Paula D. A. Barhum Macedo
Rodrigo Lopes da Luz
@Eternit_RI
Dr. Fernandes Coelho Street, 85 – 8th floor
Pinheiros – São Paulo / SP
05423-040
Thiago Scheider
Further Information