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Conference call 4 q12 versão final

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Conference call 4 q12 versão final

  1. 1. Conference Call – Earning Results 4Q12 and 2012 – 03/18/2013
  2. 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 managements 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.” 22
  3. 3. Highlights of 4Q12 (when compared to 4Q11)• Sales Volume:  Chrysotile mineral: growth of 4.6%  Fiber cement: growth of 1.4%  Concrete tiles: retraction of 17.4%• Net Consolidated Revenue amounted to R$ 255.3 million, a 16.0% growth• Gross Margin of 44%, increase of 3 p.p.• EBTIDA was R$ 53.6 million, a 34.6% growth and margin of 21%• Net Income reached R$ 29.0 million, a reduction of 9.6%• Investments reached R$ 25.3 million, evolution of 106.3%• Federal Supreme Court: update about the use of chrysotile 3
  4. 4. Eternit GroupThe largest and most diversified roof coverings industry in Brazil – 2012 Manufacture of fiber cement and Manufacture of commercialization of bathroom concrete tiles and Activity chinaware, metallic fittings and Chrysotile Mining commercialization components for construction systems of sanitary ware Industrial Units 4 1 1 6 Leader in fiber cement – Leader in The worlds 3rd 30% of Market Share concrete tiles – largest – 15% of Market Share 30% of Market Market Share 5th largest of Brazil in sanitary ware Share 300 thousand Capacity 1 million tons / fiber cement 10 million m² tons Capacity Used Fiber cement - 80% 100% 60% 44
  5. 5. Traditional Product – Chrysotile Mineral Main use of the crhysotile mineral: 99% of the world production of chrysotile is used for fiber cement products. Serpentinite rock with Chrysotile Ore fibers 5
  6. 6. Traditional Product– Fiber Cement Tiles 66
  7. 7. Diversified Portfolio – Metallic Fittings 77
  8. 8. Diversified Portfolio - Components for constructions systems 88
  9. 9. Diversified Portfolio – Water tanks and filters 99
  10. 10. Diversified Portfolio – Bathroom chinaware and lavatory seats 10 10
  11. 11. Diversified Portfolio – Metal Fittings 11 11
  12. 12. Diversified Portfolio – Synthetic Marble 12 12
  13. 13. Diversified Portfolio – Concrete Tiles 13
  14. 14. Diversified Portfolio – Full Roofing Solutions 14 14
  15. 15. SAMA – Overview
  16. 16. Global Market – Chrysotile Mineral - – 2012Mercado Mundial – Mineral Crisotila 2012Canadá 1% Rússia – 54% Cazaquistão – 10% China – 20% Brasil 15% Global Consumption (MM of Ton) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2.1 2.3 2.3 2.4 2.4 2.1 2.2 2.2 2.1 16 16
  17. 17. The use of chrysotile asbestos in the world Countries prohibited to use Countries allowed to use SAMA´s clients asbestos asbestos 17
  18. 18. Sales of Chrysotile Mineral (thous. tons) 2012 x 2011 4Q12 x 4Q11 • Domestic Market– reduction of 6.5% • Domestic Market– reduction of 0.3% • Foreign Market – increase of 13.0% • Foreign Market – increase of 9.5% - 3.1% 2.3% 306.3 296.7 303.5 163.6 162.5 151.9 - 1.4% 4.6% 80.1 79.0 82.7 142.7 134.2 151.6 39.0 43.2 39.1 36.9 39.9 43.7 2010 2011 2012 4Q10 4Q11 4Q12 Domestic Market Foreign Market 18
  19. 19. Eternit and Tégula – Overview
  20. 20. Covering market – Brazil – 2012 Residential Market Industrial and Commercial Market Concrete Other 4% 11% Fiber cement 38% Fiber cementCeramics 51% Metallic Ceramics 45% 40% 11% Total Market Market Evolution (MM m2) 561 561 Concrete 534 Metallic Other 505 495 12% 4% 3% 425 459 406 Ceramics Fiber cement 35% 46% Source: Estimation of the Production Chain of Fiber Cement 2005 2006 2007 2008 2009 2010 2011 2012 20 20
  21. 21. Sales of Fiber Cement* (thous. tons) 3.9% - 8.5% 859.3 826.9 786.0 - 7.5% 1.4% 232.1 214.8 217.8 2010 2011 2012 4Q10 4Q11 4Q12 * Includes components for construction systems 21
  22. 22. Concrete Tiles (thous. square meters) 13.5% - 5.8% 5,961 5,617 5,253 9.6% - 17.4% 4,776 1,435 1,573 1,298 477 2010* 2011 2012 4Q10 4Q11 4Q12 *Tégula was acquired on February 11 2010. The amount of 477 thousand m2 doesn’t refer to Eternit. 22
  23. 23. Economic and Financial Performance
  24. 24. Consolidated Net Revenue (R$ million) 8.1% 10.5% 906.3 820.3 758.7 735.4 719.9 4.4% 16.0% 647.5 255.3 210.7 220.0 201.2 184.0 186.6 170.9 111.2 100.4 26.7 33.4 54.1 2010 2011 2012 4Q10 4Q11 4Q12 Domestic Market Foreign Market 24
  25. 25. Net Revenue Breakdown 2007 2012 Concrete tiles Fiber cement; and Fiber cement 59.3% Accessories 50.8% New 9.6% Others (*); New Business 5.7% Business 5.7% 16.7% Chrysotile Bathroom Mineral; Chinaware 35.0% Chrysotile Mineral 4.6% 32.5% Others (**) 2.5%(*) Others: metallic roofing tiles, polyethylene water tanks and components for construction systems.(**) Others: metallic roofing tiles, polyethylene water tanks, lavatory seats and metallic bathroom fittings, water pipefilters, synthetic marble and components for construction systems. 25
  26. 26. COGS Breakdown – 4Q12 Fiber Cement Chrysotile Mineral Energy; 3% Energy; 7% Others costs; 9% Others costs; 23% Depreciation; Materials (**); Raw material 10% 29% (*); 60% Depreciation; Workforce; 3% 45% Workforce; 11%(*) - Cement (47%), Chrysotile Ore (40%) and other (13%) (**) – Fuel, explosives, packaging, among other Concrete Tiles Energy 4% Others costs Raw material 24% (***) 45% Depreciation Workforce 12% 15% (***) - Cement (55%), sand (29%) and other (16%) 26 26
  27. 27. EBITDA (in R$ million) - 2.9% 31.6% 184.3 144.4 140.1 17.1% 34.6% 53.6 34.0 39.8 2010 2011 2012 4Q10 4Q11 4Q12 27
  28. 28. Net Income (in R$ million) -4.7% 16.3% 113.0 102.0 97.2 10.3% -9.6% 29.0 32.1 29.0 2010 2011 2012 4Q10 4Q11 4Q12 28
  29. 29. Margins 43% 44% 44% 41% 39% 38% 20% 21% 19% 18% 17% 16% 14% 15% 13% 12% 12% 11% 2010 2011 2012 4Q10 4Q11 4Q12 Gross Margin EBITDA Margin Net Margin 29 29
  30. 30. Capital Expenditures
  31. 31. Capital Expenditures (in R$ million) 93 94 1 6 16 14 69 14 32 34 46 5 21 2 2 11 1 13 25 46 13 12 9 33 27 24 2 5 4 16 11 3 2010 2011 2012 4Q10 4Q11 4Q12 2013* Forecast * Investiments Capacity Increase – Eternit Tégula Acquisition Equipments and Trucks - SAMA Land Acquisition - Ceará New Businesses Capacity Increase – Tégula Administrative Bathroom Chinaware Plant - CSC Synthetic Marble 31 31
  32. 32. Location of Multiproduct Plant - Ceará State Cimenteira Linha Gás Natural 35 km 15 km Land of 400,000 m² 32 32
  33. 33. Multi-Product Unit in the Ceará State - Bathroom Chinaware Plant Joint-Venture: Companhia Sulamericana de Cerâmica S. A. Share of 60% Share of 40% Knowledge of the local market Knowledge of manufacturing and Strong distribution network products technology Efficient logistics Low cost production Brand strength Expertise in new product development Investment Resources Expertise in new market Knowledge in Brazil development Investments: R$ 97 million Capacity: 1,500,000 pieces per year Status of the building: initiated End building: December 2013 Forecast of Gross Revenue at full capacity: approximately R$ 127 million Straight Workforce: 330 employees 33 33
  34. 34. Capital Markets
  35. 35. Ownership Structure – Feb/13 Shareholding Structure Geração L. Par. F. I. A. 15.25% 24.9% Luiz Barsi Filho 13.56% 62.1% Victor Adler + VIC DTVM 8.50% 11.2% Management 1.73% Treasurystock 0.03% 1.8% Member Board of Directors Since Sergio Alexandre Melleiro (*) 1993 Lírio Albino Parisotto (*) 2004 Individual Investors Élio A. Martins 2007 Luiz Barsi Filho 2008 Corporations Marcelo Munhoz Auricchio 2011 Investors Abroad Luis Terepins (*) 2011 Clubs. Funds and Foundations Benedito Carlos Dias da Silva (*) 2012 (*) Independent member Member Advisory Board Since FREE-FLOAT 75.9% Guilherme Affonso Ferreira 2011 Mário Fleck 2011 Victor Adler 2012 35 35
  36. 36. Policy of Remuneration - Net Income X Distributed EarningsIn R$ million 76 % 79 % 74% 63%Pay Out 113 102 97 81 73 72 72 55 2009 2010 2011 2012 Net Income Dividends and Interest on own capital 36 36
  37. 37. Eternit’s Shares Performance (Dec/06 – Feb/13) Between 12/28/2006 to 02/28/2013, Eternit’s shares appreciated 41.8% and IBOVESPA appreciated 29.1%. In the same period, including the payment of dividends and interest on own capital, Eternit’s shares appreciated 151.1%.220 ETER3200 IBOVESPA180 R$ 8.59160140120 57,424100 80 60 40 37 37
  38. 38. Outlook
  39. 39. Favorable Moment for Civil Construction 39
  40. 40. Economic Figures Credit Availability Unemployment Rate - Brazil Government, Industry, Housing, Rural, Commerce, Credit 9.9% Individuals (R$ billlion) 2,360 8.7% 8.5% 2,238 2,269 2,304 2,169 2,030 2,075 7.4% 6.4% 1,410 5.4% 1,227 4.6% 936Source: BACEN *aug/12 to dec/12 - foreseen Food Basic Basket SP x Minimum Wage (purchasing power) 56.5% 57.7% 49.1% 52.0% 50.9% 49.0% 47.0% 350 Source: IBGE and DIEESE 300 240 260 200 151 180 277 305 318 240 228 265 215 215 240 228 265 277 305 318 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 jan/13 Minimum Wage (R$) Food Basic Basket in SP (R$) % 40 40
  41. 41. Economic Figures – GDP vs. Gross Consolidated Revenue of Eternit 37.1 16.8 18.3 15.7 11.6 8.6 8.2 7.5 5.0 5.4 5.1 3.62.7 5.1 3.8 3.3 1.90.9 -0.2 -6.3 2007 2008 2009 2010 2011 2012 2013(E) GDP Construction (%)* GDP Brazil (%) Eternit (%)(*) Forecast for 2012 (E) Forecast for 2013Source: BACEN. The growth in Eternit´s gross consolidated revenue compares the accumulated period from January to December2012 against the same accumulated period for 2011, inflation adjusted for the IGP-M. 41 41
  42. 42. Chrysotile – The Brazilian Mineral
  43. 43. 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). 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. Serpentinite rock with Chrysotile Ore fibers 43 43
  44. 44. 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. 44 44
  45. 45. Positioning with respect to the legal question of Chrysotile MineralThe Federal Supreme Court (STF) began on October 31st, 2012 its ruling on the meritof the Direct Actions of Unconstitutionality (ADI) 3357 in the light of state Law11.643/2001 enacted by the state of Rio Grande do Sul, and ADI 3937 in the context of stateLaw 12,684 of July 26th, 2007 of the state of São Paulo.Judge Ayres Britto began the judgment ruling in favor of the constitutionality of the state lawswhile Judge Marco Aurélio’s vote was for the unconstitutionality of the same state laws. Followingthe conclusion of Judge Marco Aurélio’s ruling, the presiding judge adjourned the work of thecourt.We would point out that this judgment is fruit of exhaustive debates with Brazilian societythrough public hearings held by the STF on August 24th and 31st, 2012 led by JudgeMarco Aurélio together with the judges Rosa Weber and Ricardo Lewandowski.For this reason, the STF is expected to set a new date for the final ruling on the meritmentioned in the ADIs as a whole. 45 45
  46. 46. Recognitions – 4Q12 Eternit : “APIMEC Minas Eternit: honorable mention for Eternit : prize for the Best Award– Capital Markets best Corporate Governance at Corporate Givernance in 2012 – Best Meeting the 14º ABRASCA Annual Latin America in the 2012 Category” for having Report Awards – category for edition of “IRGR for Latin carried out the best results companies with sales below R$ America”, by IR Global presentation to associates 3 billion, by ABRASCA Rankings (IRGR) of the organization during the year, by APIMEC-MG Eternit’s marketing team : “TOP ANAMACO Award” in the category of marketing and sales for the case “Mobile Display of Bathroom Chinaware and Metallic Bathroom Fittings” 46
  47. 47. Eternit – An option for investment ETNTY Governance ADR - Level I Growth Vision of Brand with Future Brand Dividends Watch the Eternit’s Institutional movie through this QR Code. Case of Success 47 47
  48. 48. Information Élio A. Martins Paula D. A. Barhum Macedo elio.martins@eternit.com.br paula.barhum@eternit.com.br Rodrigo Lopes da Luz Frederico Gomes Amaral rodrigo.luz@eternit.com.br frederico.amaral@eternit.com.br Phone: (55-11) 3038-3818 www.eternit.com.br/ir (55-11) 3194-3881 www.blogdaeternit.com.br (55-11) 3194-3872 @Eternit_RI Dr. Fernandes Coelho Street, 85 – 8th floor Este material foi produzido com papeis certificados FSC (Forest Stewardship Council), que é uma Pinheiros – São Paulo / SP garantia de que a matéria-prima advém de uma floresta manejada de forma ecologicamente correta, 05423-040 socialmente e economicamente viável. 48 48
  49. 49. Eternit starts a new cycle Welcome to the next 70 years 49 49

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