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1 q13 results presentation


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1 q13 results presentation

  1. 1. EarningsEarnings CallCall 1Q131Q13May 10May 10th, 2013, 20131
  2. 2. New strategic viewVision:Be the best provider of refractoriessolutions and industrial minerals,leveraging and developing our minerals baseExpand industrialEnsure leadership Maintain a global lowGrow selectively andOneglobalorganizationExpand industrialminerals baseEnsure leadershipin our core marketsMaintain a global lowcost production baseGrow selectively andaggressivelyContinue to develop highquality, low cost rawmaterial sources tosupport our currentbusinesses as well asnew businesses wherewe can have asustainable competitiveadvantageStrive to keep offeringhigh quality andinnovative products,unrivaled services andcost performanceOptimize productionglobally to improveefficiency and supportgrowthDevelop global supplychain managementPursue long term growthopportunities in selectedmarkets where we candeliver superior value toour customers andshareholders▪Meritocracy▪Ethics▪Profit▪Management and Method▪Agility and Transparency▪Respect for Safety, Environment and Communities▪Customer▪PeopleOur values2
  3. 3. DMR (manufacturing unit in China)Low cost production base: The plant is located in the city of Dalian, northeast China,region which owns around 20% of world’s reserves of magnesite, making ita highly strategic location for refractory productionNew markets: This new plant will allow us to better serve geographiesRecent aquisitions Maintain aglobal lowcostproductionbaseGrowselectivelyandaggressivelyNew markets: This new plant will allow us to better serve geographiesand segments where Magnesita has a marginal presence todayand where we want to expand sales in a selective wayLocation: Dalian is an important export hub in China withexcellent logisticsCapacity: 50.000 tons/yearClosing: Expected to occur in ~60 days, after approvalof the Economic and Trade Bureau of Dalian Development Area,in the People´s Republic of China.3in the People´s Republic of China.DMR external viewChinaCHINA
  4. 4. Reframec (51% of equity)Ensure leadership in our core markets: The Reframec acquisition reinforcesMagnesitas leadership in its core industrial markets in South America, as itexpands its services beyond the steel industryReframec: Leader in engineering, installation and repair servicesRecent aquisitions Ensureleadershipin our coremarketsReframec: Leader in engineering, installation and repair servicesfor refractories used in cement production in BrazilClosing: ~60 days. Post-close, Reframec will continue to operateindependently4Refractory assembly in rotary kiln
  5. 5. -5.5%-5.5%11.011.611.9-7.8%-7.8%South AmericaRefractory Solutions Sales - SteelCrude Steel Production¹ (million tons) Main markets+4.0%-3.6%226217234000’ tonsSales - Magnesita1Q134Q121Q12+0,5%+0,5%452450450R$ MillionEU-2780,6 %4Q1220.71Q1223.2-8.6%-8.6%+2.5%+2.5%1Q1321.2United States1Q134Q121Q121Q134524Q124501Q124504Q1239.71Q1243.9-5.7%-5.7%+4.3%+4.3%1Q1341.4EU-275Source: ¹WSA
  6. 6. Sales - MagnesitaRefractory Solutions Sales - Industrial19,4%+4.2%+29.0%423341 101 10984+28.8%+7.8%R$ million000’ tons1Q134Q121Q12 1Q12 1Q134Q126
  7. 7. Volume (000’ tons) Gross profit and gross marginRefractory Solutions Sales - ConsolidatedRevenue (R$ million)53415,8%55018,3%+5.0%+1.8%+1.8%56019,4%90,7%--2.4%+7.3%1Q132684Q122501Q12275Volume (000’ tons) Gross profit and gross margin(R$ million; %)84,2%1Q1281,7%1Q1380,6%4Q12SteelIndustrial34.3%4Q1229.7%1Q1230.8%1Q131921581701Q134Q121Q12 4Q121Q12 1Q137
  8. 8. +14.7%+14.7%-28.4%-28.4%28,840,3Revenue (R$ million) Gross profit and gross margin(R$ million; %)39.0%41.2%41.4%Minerals and Services salesMinerals4,7%1Q1328,84Q121Q1225,1-8.6%-8.6%Revenue (R$ million)1Q134Q121Q12Gross profit and gross margin(R$ million; %)111710Services4,6%1Q13-8.6%-22.4%-22.4%36,928,64Q121Q1231,381Q1312.4%4Q1214.7%1Q125.5%4524,6%
  9. 9. Consolidated sales (R$ million)Consolidated+1,8%+1,8%+1,1%+1,1%617,9611,1606,9PER SEGMENT1Q134Q121Q126%1Q135%4Q125%1Q12PER REGION1Q134Q121Q1210% 12% 13%6%7%87%5%5%91%5%4%91%ServicesMineralsRefractories OthersEuropeNorth AmericaSouth America10%18%23%49%12%19%22%47%13%19%22%47%9
  10. 10. Gross profit, EBITDA and net incomeGross Profit(R$ million)EBITDA (R$ million)14.4%18.8%13.5%33.5%29.5%29.9%Gross Profit(R$ million)Net Income (R$ million)0.0%4.3%4.7%2071801822602814.4%4Q12 1Q1313.5%1Q1211683881Q134Q121Q12104Q12 1Q131Q12
  11. 11. Operational cash flow, CAPEX and Cash cycleCash conversion cycle¹ (in days)¹OCF and CAPEX Cash cycle143 143 145 13915367 69 687765131 131 136 139 14179 82 78 76 771T12 2T12 3T12 4T12 1T13Cash conversion cycle¹ (in days)¹77,516,897,455,723,574,5OCFCAPEX1Q12 2Q12 3Q12 4Q12 1Q131T12 2T12 3T12 4T12 1T13Ciclo de caixa Fornecedores Estoques Clientes11¹LTM4Q121Q12 1Q131Q12 2Q12 3Q12 4Q12 1Q13Cash cycle Suppliers Inventories Clients
  12. 12. Debt and LeverageNet debt / EbitdaEBITDA* LTMNet Debt1,4xNet debt / EbitdaEBITDA* LTMNet Debt1.0591.0581.0311.0029072,6x2,8x2,9x2,9x2,7x907 1.4x1.4x1.4x2,7xTotal Excluding Perpetual Bond1Q134Q123Q122Q121Q12Perpetual Bond1Q12 1Q132Q12 4Q123Q12*EBITDA excluding non recurring *EBITDA excluding non recurringR$2%-14%907401373357350334566536513486907401373357350334Amortization Schedule (R$ million) Net Debt per currency2018+1.47220172016201520142013Mar-13CashAmortizationPerpetual Bond12-3%EUROthers-2%19%80%2%13%USD104%Dec-12Mar-136787880621530964508
  13. 13. The Company applied, from 2013 fiscal year, IFRS 11 - "Joint Arrangements" issued in May 2011, andincluded as an amendment to the text of the CPC 19 (R2) - "Joint Venture". Thus, the method ofIFRS 11 – Joint arrangementincluded as an amendment to the text of the CPC 19 (R2) - "Joint Venture". Thus, the method ofproportionate consolidation is no longer permitted, the Company ceased to consolidate jointly controlledKrosaki Magnesite Refractories LLC (United States). Additionally, from January 1st, 2013, holdings inKrosaki Magnesite Refractories LLC (40%) are being accounted by the equity method. For comparisonpurposes, the balance sheet of December 31, 2012 and March 31, 2012 were adjusted in the QuarterlyInformation Form (“Formulário ITR”) considering the change of accounting practice. In the 1Q13 EarningsRelease, the Company has decided not to make changes in the quarters of 2012 to not impact the reportsand analysis already disclosed to the market.13
  14. 14. Octavio Pereira LopesCEO and IROEduardo GotillaGlobal Finance & IR DirectorDaniel Domiciano SilvaInvestor Relations contacts:Daniel Domiciano SilvaInvestor RelationsPhone: 55 11 3152-3202/3241ri@magnesita.comwww.magnesita.com14