DESC During this presentation management might discuss forward-looking statements which reflect the current opinions of DESC regarding future events. The words “anticipate,” “believe,” “expect,” “hope,” “have the intention of,” “might,” “plan,” “should” and similar expressions generally indicate comments on expectations. These comments are subject to risks, uncertainties and changing circumstances. The final results may be materially different from current expectations due to several factors, which include, but are not limited to, global and local changes in politics, the economy, business, competition, market and regulatory factors, cyclical trends in the automobile parts and chemical sectors; as well as other factors. DESC has no obligation whatsoever to update these comments on expectations. . . . . . . . . . . . Unless otherwise noted, the results in this report are being compared to adjusted 2003 and 2004 results, which are pro forma since they exclude DESC’s Constant Velocity Joint, Valve Lifter and Acrylic Laminate businesses to make them more comparable with the 2005 results. Management believes that investors can better evaluate and analyze DESC’s historical and future business trends on a comparative basis if they consider results of operations without these divested businesses.
¿Who we are? DESC currently has 13,200 employees, distributed among the corporate area and four sectors. 2005 annual sales total more than US $2.2 billion which includes exports of over US $1 billion: ¿Who we are?
Core Business Consumer Automotive Chemical Real Estate
Chemical Business Only Mexican producer of synthetic rubber and carbon black ; Mexico’s leading producer of polystyrene and phosphates. Manufactures 6 product lines, at 8 plants located in 4 states of Mexico and one in Spain , using propietary technology and third parties. Sales: Exports products to 40 countries. Main Customers: Procter & Gamble, “La Corona” , Coca-Cola Company, Koch, Michelin, Central de Bolsas Jaguar (Pactiv), Cooper Tire & Rubber, Rubber Company “Tornel”, Bridgestone-Firestone, Total-Fina-Elf among others. Chemical
Products and Aplications Synthetic Rubber PRODUCTS AND APPLICATION Polystyrene Disposable cups and plates , packing Plastics, tires, pavements Phosphates Detergents Carbon Black Tires
Automotive Business Manufactures and sells several autoparts and components in 14 plants throughout Mexico and 1 in the U.S. In 2005 DESC announced a JV agreement between CIE Automotive and DESC Automotive to encourage a strategic relation in the manufacturing of automotive parts. Products
Light and heavy transmissions .
Pistons,pins and seals.
* Propeller shafts. * Axles. * Gears. * Forging. * JV with Dana Main Customers: General Motors, Ford, Renault-Nissan, DANA, Eaton, International, DCX, Hummer, among others. Automotive
Products and Aplications PRODUCTS AND APPLICATION Pistons Ring Gear Manual Transmissions Automotive Axles
Products and Aplications PRODUCTS AND APPLICATION Stamping, Painting & Assembly Automotive Axe Tube End Yokes and Diff. Cases Gears
Products and Aplications PRODUCTS AND APPLICATION Seals Automotive Diesel and Gas Pistons Steel Wheels
SALES Automotive Millions of Dollars Automotive
Automotive EBITDA Millions of Dollars Automotive
Consumer Business With 4 plants located in Mexico, this business produces and distributes a wide variety of non-perishable products such as tomato puree, canned vegetables, corn oil, tuna, coffee, chili, hot sauces, among others under the brands “ Del Fuerte”, “La Gloria”, “Embasa”, “Nair”, “Smuckers” and “Blason” . In the U.S. under the brand “La Victoria”, the Branded Food Business mainly sells hot salsas and chiles with an excellent market share in the west coast. Main Customers : Wal Mart, Sam’s Club, Casa Ley, Soriana, Comercial Mexicana, Gigante, Kroger, Costco, US Food Service, among other retail stores, both wholesale and retailer. The particle board Business which includes Wood Plantations is distributed among 3 facilities in Mexico as well as in 12,000 eucalyptus acre. Exports are mainly focus in the United States. The Pork Meat Business includes from the production of feed stock to the commercialization of pork meat. Consumer
Mexico’s most prestigious real estate development company was founded in 1978, oriented to the real estate projects for the highest income sector in Mexico, establishing world quality projects in residential, commercial, leisure and corporate real estate developments.
Punta Mita is a tropical sanctuary that encompasses more than 1,500 acres on a majestic peninsula surrounded on three sides by 9.5 miles of pristine shoreline. Occupying a premier location on the Pacific Coast of Mexico in the northern tip of Banderas Bay and a leisure drive from Puerto Vallarta.
The development is 100% owned by Desc with project partnership with Four Seasons, Starwood, Strategic Hotel Capital, Casa Mexicana/AIG, Inspired developments, B.W. and Others.
The master plan includes:
3 luxury hotels
3 Championship Golf Courses
5 Beach Clubs, an equestrian facility, pier and wellness center
1,100 residential units in different gated communities.
A Four Seasons Resort with 170 rooms and a Jack Nicklaus Signature Golf Course are in operation since December 1999. Dine is developing 60+ whole ownership Four Seasons villas averaging 3 M dollars and a fractional project is under construction with 38 units.
A 2 nd Four Seasons hotel with 70 suites and aditinional villas are in planning stages.
A St. Regis Resort, including a 120 room deluxe hotel schedule to open late 2007 is under construction,St Regis branded fractional units and villas will complement this resort.