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Institutional Presentation - 2Q14

This document provides an overview of Forjas Taurus S.A., the largest manufacturer of revolvers in Brazil. It discusses the company's history and acquisitions dating back to 1939. Key facts from 2014 are presented, including a capital increase, changes to the board of directors, and operational improvements to reduce costs. Metrics on the firearms and motorcycle helmets markets in Brazil are also shown.

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Aug 8th, 2014
2 Company Defense & Security Metallurgy & Plastics GuidanceResults Strategies
3 Company Forjas Taurus S.A. • LARGEST MANUFACTURER OF REVOLVERS • LEADING NATIONAL HELMETS’ PRODUCTION • BRAZILIAN COMPANY WITH METAL INJECTION MOLDING TECHNOLOGY
4 Company 1980 – Beretta 1982 – IPO 1983 –Taurus International 1985 – Taurus Ferramentas 1986 – Induma 1988 – Taurus Holdings 2000 – Taurus Capacetes 2004 – Famastil 2004 – Máquinas-Ferramenta 2006 – Taurus Helmets 2006 – Launch of “The Judge” 2008 – Taurus Inv. Imobiliários 2008 – Rossi – Armas longas 2008 – Metus 2010 – Taurus Blindagens Nordeste 2011 – Jul:IAdmission to Nível 2 BM&FBOVESPA – Oct: Acquisition ofSteelInject – Dec: Segregation of business industries into guns and metallurgy and plastics – Election of new IRO. 2012 – Heritage Manufacturing Inc. Acquisition – Divestiment TMFL – Relocation of the long gun and MIM sites to São Leopoldo / RS 2013 – Diamondback – Global distribution - Starting Lean Manufacturing in long guns facilities - Steelinject in São Leopoldo - Shutdown of Forgery for others 00´s 30´s 70´s 80´s 90´s 1939 – Forjas Taurus 1970 – Control to foreign investors 1977 – Forjas Taurus by Polimetal 1991 – Champion’s assets 1997 – Rossi – Revólver (use of the brand. technology. assets and productive processes) 1999 – Pollymer and titanium guns
2014 Facts • Election of the Board of Directors by the multiple voting process at the AGM realized on 06/27/14 and amend the Bylaw, increasing from 7 to 9 members with names linked to a strong experience in Corporate Governance and Management; • Tenure of the new Board of Directors on 07/17/14, elected Mr. Jório Dauster and Mr. Ruy Lopes Filho as Chairman and Vice-Chairman, respectively; also appointed the members of the Advisory Statutory Committees of the Board: Audit and Risk, Remuneration and People Development and Management and Corporate Governance Committee. 5 Company
• Actions for operational improvement: a process and products review in order to reduce costs and expenses, measured by indicators that show a reduction in staff and product portfolio (from 5,500 SKUS on Dec/13 to 400 on Dec/14); • Actions for administrative improvemet: implementation of new ERP modules, review of the entire value chain, balancing costs and the structure of products and local and international sales, aiming to better internal controls and compliance with market requirements; 6 Company 2014 Facts
• Trends and benefits of these transformations: • Results-oriented strategic focus in the medium and long term; • Resumption slow but gradual and continuos of the Company’s perfomance, according to market conditions and productivity; • Projects seeking greater productivity, quality and profitability; • Recovery of margins and profitability; • Continuos pursuit of maximazing shareholder value added; and • Benefits will come through structural changes, causing the Company to re-grow consistently and sustainably. 7 Company 2014 Facts
• Capital Increase 8 Company • After two rounds of leftovers and period of review, 48,522,214 common shares and 85,703 preferred shares have been subscribed, of the total of 48,528,020 common shares and 97,056,038 preferred shares, without par value, to be issued by the Company; • With the end of the review period, the subscribed shares totaled BRL 67.078.925,46; • The process of capital increase was completed and an Extraordinay General Meeting has been convened for 08/20/14 in order to resolve their approval. 2014 Facts
9 Company • Capital Increase – Shareholders before and after* *still subject to approval at the EGM 2014 Facts
Capital Increase Schedule Part 1 10 Company EVENT DATE EGM – capital increase approval 04/29/2014 Notice to Shareholders on CVM system 05/05/2014 Notice to Shareholders on newspapers 05/06/2014 Cutoff date of the shareholders still had preemptive rights 05/27/2014 Beginning of the period of preemptive rights 05/28/2014 Date that the shares were ex-subscription rights 05/28/2014 End date of preemptive rights 06/27/2014 Beginning of 1st apportionment of leftovers 07/04/2014 End of 1st apportionment of leftovers 07/10/2014
11 Company EVENT DATE Beginning of 2nd apportionment of leftovers 07/14/2014 End of 2nd apportionment of leftovers 07/18/2014 Beginning of Review Period of Subscriptions 07/24/2014 End of Review Period of Subscriptions 07/30/2014 Convening the EGM for approval of the capital increase – CVM system 08/04/2014 Convening the EGM for approval of the capital increase – newspapers 08/05/2014 08/06/2014 08/07/2014 EGM capital increase confirmation 08/20/2014 Capital Increase Schedule Part 2
Board of Directors Chairman: Jorio Dauster Magalhães e Silva Vice-Chairman: Ruy Lopes Filho André Ricardo Balbi Cerviño Durval José Soledade Santos Fernando José Soares Estima João Verner Juenemann Luis Fernando Costa Estima Luiz Felix de Freitas Manuel Jeremias Leite Caldas Tax Board Amoreti Franco Gibbon Alternate: Edgar Panceri Juliano Puchalski Teixeira Alternate: Carlos Eduardo Bandeira de Mello Francesconi Marcelo de Deus Saweryn Alternate: Lisiane Miguel Wilke Mauro César Medeiros de Mello Alternate: Roberto Hesketh Reinaldo Fujimoto Alternate: José Airton Veras Carvalho 12 Company Statutory Board André Ricardo Balbi Cerviño Eduardo Feldmann Costa Eduardo Ermida Moretti Dóris Beatriz França Wilhelm Board
13 Company Facilities
CorporateGovernance 14 Company 100% OF TAG ALONG (ORDINARY AND PREFERRED) 35% PAYOUT (SEMIANNUAL) PREFERRED VOTING RIGHTS (IMPORTANT SUBJECTS) 40% INDEPENDENT BOARD (MINIMUM)
ON 47,137,539 33.3% PN 94,275,078 67.3% TOTAL 141,412,617 100.0% Dec 31st , 2013 Jul 31st , 2014* TOTAL ON PN TOTAL ON PN PREVI 24% 14% 29% 24% 14% 29% LFCE E ESTIMAPAR 15% 44% 0% 15% 44% 0% CBC 0% 0% 0% 5% 15% 1% FIGI FIA 3% 9% 0% 3% 9% 0% GERAÇÃO FUTURO 2% 7% 0% 0% 0% 0% TREASURY 9% 6% 10% 9% 6% 10% FREEFLOAT 47% 20% 61% 46% 27% 56% 15 July 31st, 2014 Company Shareholders * without any effects of the capital increase underway, since it is not approved yet. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2009 2010 2011 2012 2013 jul/14 ASSETS / FUNDOS CLUBES DE INVESTIMENTOS FUNDAÇÕES E SEGURADORAS ESTRANGEIROS PESSOA FISÍCA PESSOA JURÍDICA ASSETS / FUNDS INVESTMENTS CLUBS FOUNDATION AND SECURITIES FOREIGN SHAREHOLDERS INDIVIDUAL INVESTORS LEGAL ENTITY
16 INVESTOR RELATIONS OFFICER Dóris B. F. Wilhelm VP ADMINISTRATIVE AND FINANCE Eduardo Feldmann Costa SHAREHOLDERS BOARD OF DIRECTORS CHIEF EXECUTIVE OFFICER André Balbi TAURUS HOLDINGS INC. CEO Anthony Acitelli INTERNAL AUDIT COMITEES LAW MANAGER AND BOARD SECRETARY Simone Baguinski COMPENSATIONAL AND PERSONNEL DEVELOPMENT AUDIT AND RISKS MANAGEMENT AND CORPORATE GOVERNANCE VP SALES AND MARKETING Eduardo Moretti HELMETS AND PLASTICS GENERAL MANAGER Fernando Gonçalves TAX BOARD INDUSTRIAL OPERATIONS EXECUTIVE OFFICER Eduardo Rácz ORGANIZATIONAL STRUCTURE SUPPLY CHAIN EXECUTIVE OFFICER Marco A. Harzheim
17 Company ORGANIZATION CHART
18 SOCIAL COMMITMENT Company • Kids of the Future • Library • Digital Space • Sign Language Course • Educational Benefits • Impulsor News
19 Company Defense & Security Metallurgy & Plastics GuidanceResults Strategies
IMPACT FACTORS 20 Defense & Security Seasonality Mass Events Trade Fairs Hunting Season Regulatory Fear Demand Innovation Quality Auctions Economics Currency Macroeconomics Trademarks and Patents
NATIONAL INSTANT CRIMINAL BACKGROUND CHECK SYSTEM 21 Defense & Security Source: FBI adjusted by NSSF
22% 22% 23% 24% 24% 22% 22% 23% 24% 24% 22% 22% 12% 12% 12% 12% 11% 10% 12% 10% 13% 12% 12% 11% 44% 44% 45% 43% 46% 48% 45% 47% 41% 41% 42% 44% 22% 22% 20% 20% 19% 21% 21% 20% 21% 23% 23% 23% jul/13 ago/13 set/13 out/13 nov/13 dez/13 jan/14 fev/14 mar/14 abr/14 mai/14 jun/14 Midwest Northeast Other South West NICS GEOGRAPHIC DISTRIBUTION 22 Defense & Security Source: FBI adjusted by NSSF
PEERS 23 Defense & Security
PRODUCTION 24
25 Defense & Security 4th Generation • Long Guns (restricted use) 3rd Generation • Long Guns 2nd Generation • Pistols 1st Generation • Revolvers Products Generations
MARKETING & SALES 26
27 Public Security Private Security Others Brazil CONSUMER MARKET • Hobby / Collector • Sports / Hunting • Civilian /Others Public Security Private Security UNITED STATES MAIN CONSUMER MARKETSDefense & Security
28 2012 FIELD & STREAM BEST OF THE BEST AWARD TAURUS TRACKER 992 2011 NRA: HANDGUN OF THE YEAR PT 740 SLIM 2013 MANUFACTURER OF THE YEAR TAURUS INTERNATIONAL MFG, INC. AWARDS Defense & Security
29
Police Force Federal Police - 15,182 actives (i) Civil Police – 117,501 actives (i) Military Police – 113,295 actives (i) Military Forces Military Forces – 275,403 actives (i) PUBLIC SECURITY PRIVATE SECURITY 30 Active Vigilants – 660,513 (ii) (i) Public Security 2012 Report (data from 2011) (ii) General Coordination of Private Security Control 2012 Defense & Security
31 412.154 452.441 509.829 552.052 660.513 2008 2009 2010 2011 2012 ACTIVE VIGILANTS Defense & Security Fonte: SEVESP
90% OF MARKET SHARE HANDGUNS IN BRAZIL PEERS: CBC AND IMBEL 10% OF MARKET SHARE 32 Defense & Security
FOREIGN MARKET 33
34 CARRY ON MOVEMENT World Champion Speed ​​Shooter 2013 Jessie Harrison Athlete – Taurus’ team leader Taurus International Manufacturing Inc. initiative to encourage the concealed carry guns and the shooting sports. Defense & Security
35 Considered a breakthrough in shooting sports, Alex Larch is the new member of Taurus team lead by Jessie Duff Alex Larche Taurus offers to its customers a new concept in packaging, providing greater security and perceived quality. White Box CARRY ON MOVEMENT Defense & Security
Taurus cares about its consumers: new Customer Service extended to all american territory. 36 CARRY ON MOVEMENT Defense & Security
EXPORTS FOR MORE THAN 70 COUNTRIES 37 Defense & Security
38 Company Defense & Security Metallurgy & Plastics GuidanceResults Strategies
IMPACT FACTORS 39 Metallurgy & Plastics Motorcycle Sales Car substition for motorcycle Mobility and traffic saving Delivery Services Motocab Credit Defaults’ growth Restricted credit concession % of down payments’ value Number of installments Motorcycle maintenance X Helmet acquisition Inexistence of financing for used low cilinder motocycles
0 5.000.000 10.000.000 15.000.000 20.000.000 25.000.000 0 50.000 100.000 150.000 200.000 250.000 300.000 dez/02 abr/03 ago/03 dez/03 abr/04 ago/04 dez/04 abr/05 ago/05 dez/05 abr/06 ago/06 dez/06 abr/07 ago/07 dez/07 abr/08 ago/08 dez/08 abr/09 ago/09 dez/09 abr/10 ago/10 dez/10 abr/11 ago/11 dez/11 abr/12 ago/12 dez/12 abr/13 ago/13 dez/13 abr/14 Emplacamentos FENABRAVE Venda Capacetes Taurus Frota Circulante Frota Circulante Ajustada (-15%) 2008 Crisis 40 Motorcycles (new motorcycles e fleet) x Helmets (Taurus sales) Source: Fenabrave Metallurgy & Plastics New motorcycles Helmets sales Fleet Adjusted Fleet (-15%)
41 Source: Denatran and FENABRAVE Motorcycles (new motorcycles e fleet) Metallurgy & Plastics 0 500.000 1.000.000 1.500.000 2.000.000 2.500.000 0 5.000.000 10.000.000 15.000.000 20.000.000 25.000.000 Motorcycles Fleet x New Motorcycles Frota Circulante Emplacamentos FENABRAVE 7% 15% 25% 33% 13% -16% 12% 8% -16% -7% -2% 14% 14% 16% 18% 17% 12% 12% 12% 9% 8% 3% -20% -10% 0% 10% 20% 30% 40% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* Growth Rates New Motorcycles x Fleet Crescimento de Emplacamentos Crescimento da Frota *2014 new motorcycles LTM until June/2014 New MotorcyclesFleet Motorcycles Growth Rate Fleet Growth Rate
42 Source: Taurus Market Share Evolution TAURUS HELMETSMetallurgy & Plastics 43.4% 42.9% 43.5% 45.1% 46.7% 46.7% 45.8% 45.7% dez/08 dez/09 dez/10 dez/11 dez/12 dez/13 mar/14 jun/14
IN BRAZIL, ON AVERAGE, ARE 1.5 HELMETS PER MOTORCYCLE FLEET WITH REPLACEMENT EVERY 6 YEARS 43 Metallurgy & Plastics
RetailWholesale MagazinesFleet Owners Governments Trade Representatives CLIENTS 44 Metallurgy & Plastics
45 Metallurgy & Plastics 46% BRAZILIAN MOTORCYCLE HELMETS MARKET SHARE 1.5 HELMETS PER MOTORCYCLE IN BRAZIL 4.8 MILLIONS UNITS/YEAR POTENTIAL MARKET
Redesignthe helmet sales success: SAN MARINO, the model is smaller, lighter, with better aerodynamics, maintaining the large peripheral vision. 46 Metallurgy & Plastics
TAURUS HELMETS FOR CYCLING 47 Metallurgy & Plastics Urban Mobility Environmental Consciousness NEW!
48 NEW! “Brazilian leader in helmets manufacturing, Taurus expands its portfolio with the launchof new features for motorcycles medium and high displacement. By now, the brand offers a complete TOP line of helmets developed in partnership with Italian company Caberg ” - MOTO.com.br Metallurgy & Plastics
PEERS 49 Metallurgy & Plastics 46% 44% 10% OTHERS Market Share Nome Logo País Nome Logo País Nome Logo País AGV Itália HELD Alemanha NAU Portugal AIROH Itália HELT Brasil NOLAN Itália ARAI Japão HJC EUA NORISK Brasil ASTONE França ICON EUA ONE EUA BELL EUA KRAFT Brasil PEELS Brasil BIEFFE Brasil LAZER Bélgica PRO TORK Brasil CRAFT Alemanha LS2 Espanha SHARK França EBF Brasil MARUSHIN Itália SHOEI Japão FLY Brasil MHR China STARPLAST Brasil FOX EUA MIXS Brasil TAURUS Brasil HARLEY- DAVIDSON EUA MT Espanha VAZ Brasil
COMPETITIVE ADVANTAGES Quality Raw material from recognized suppliers Compliance with brazilian quality standard (NBR 7471/2001) Adaptation to european standards Production scale Design Updated and innovative design Artwork with excellent finishing 50 Metallurgy & Plastics
Safety traffic campaign Participation in associations like APAE, ABAI and others Recycling events and adaptation to Environmental Institute of Paraná ENVIRONMENTAL CONSCIOUSNESS 51 Metallurgy & Plastics
A NEW CONSCIOUSNESS IN COLLECTION 52 Metallurgy & Plastics
CLIENTS Trade Representatives Contractors Resale Residential Condominiums Manufacturers Prefectures 53 Metallurgy & Plastics
Taurus Other manufacturers not standardized and imported Contemar and Omnium PEERS 54 Metallurgy & Plastics
TO PROTECT YOUR LIFE, COUNT ON TAURUS BULLETPROOF VESTS 55 Metallurgy & Plastics
M.I.M. (METAL INJECTION MOLDING) IS TECHNOLOGY ON TAURUS’ PRODUCTS 56 Metallurgy & Plastics
M.I.M. PROCESS 57 Metallurgy & Plastics
58 MAIN M.I.M. CLIENTS DEFENSE & SECURITY OTHERS Metallurgy & Plastics
TAURUS TOOLS PREMIUM LINE. QUALITY AND INNOVATION PARTICIPATION OF 35% IN ASSOCIATED 59 Metallurgy & Plastics
60 Company Defense & Security Metallurgy & Plastics GuidanceResults Strategies
ECONOMIC AND FINANCIAL INDICATORS 61 Results In BRL millions Variation % Ratios 2Q14 1Q14 2Q13 2Q12 1H14 1H13 1H12 1H14/1H13 1H14/1H12 2Q14/2Q13 2Q14/1Q14 2Q14/2Q12 Net revenue 132.9 168.1 203.9 175.4 301.1 432.6 353.8 -30.4% -14.9% -34.8% -20.9% -24.2% Domestic market 59.9 62.4 71.9 74.8 122.3 128.1 144.6 -4.6% -15.4% -16.8% -4.0% -19.9% Foreign market 73.1 105.8 132.0 100.6 178.8 304.5 209.2 -41.3% -14.5% -44.6% -30.9% -27.4% COGS 106.8 122.4 143.4 101.5 229.3 294.1 213.7 -22.1% 7.3% -25.5% -12.7% 5.2% Gross Profit 26.1 45.7 60.5 73.9 71.8 138.5 140.0 -48.1% -48.7% -56.9% -42.9% -64.7% Gross Margin - % 19.6% 27.2% 29.7% 42.1% 23.9% 32.0% 39.6% -8.2 p.p. -15.7 p.p. -10.0 p.p. -7.6 p.p. -22.5 p.p. Operating Expenses -37.5 -41.2 -52.2 -36.4 -78.7 -93.1 -72.1 -15.5% 9.1% -28.1% -8.8% 3.3% Operating Profit (EBIT) -11.4 4.5 8.3 37.5 -6.9 45.3 67.9 -115.2% -110.2% -237.7% -352.2% -130.5% EBIT Margin - % -8.6% 2.7% 4.1% 21.4% -2.3% 10.5% 19.2% -12.8 p.p. -21.5 p.p. -12.7 p.p. -11.3 p.p. -30.0 p.p. Net Financial Income -16.4 -9.9 -19.0 -18.0 -26.3 -32.0 -19.9 -17.9% 32.3% -13.6% 66.2% -8.5% Depreciation and amortization (1) 8.2 8.1 9.6 7.9 16.3 17.7 15.4 -8.0% 5.4% -14.7% 1.3% 3.9% Net Income - Continuing Operations -25.6 -4.5 -20.4 12.1 -30.2 -11.2 29.4 169.2% -202.5% 25.6% 464.1% -311.5% Net Income Margin - Cont. Operations -19.3% -2.7% -10.0% 6.9% -10.0% -2.6% 8.3% -7.4 p.p. -18.3 p.p. -9.3 p.p. -16.6 p.p. -26.2 p.p. Net Income - Descontinuing Operations 0.0 0.0 0.0 -127.1 0.0 0.0 -132.2 - - - - - Net Income - Consolidated -25.6 -4.5 -20.4 -114.9 -30.2 -11.2 -102.8 169.2% -70.7% 25.6% 464.1% -77.7% Net Income Margin - Consolidated -19.3% -2.7% -10.0% -65.5% -10.0% -2.6% -29.1% -7.4 p.p. 19.0 p.p. -9.3 p.p. -16.6 p.p. 46.3 p.p. Adjusted EBITDA(2) -2.0 14.3 30.1 44.5 12.4 77.1 80.7 -84.0% -84.7% -106.5% -113.7% -104.4% Adjusted EBITDA Margin - % -1.5% 8.5% 14.8% 25.4% 4.1% 17.8% 22.8% -13.7 p.p. -18.7 p.p. -16.2 p.p. -10.0 p.p. -26.8 p.p. Total Assets 1,091.1 1,089.2 1,266.9 1,059.8 1,091.1 1,266.9 1,059.8 -13.9% 3.0% -13.9% 0.2% 3.0% Equity 104.1 134.7 204.8 228.9 104.1 204.8 228.9 -49.2% -54.5% -49.2% -22.7% -54.5% Investiments (CAPEX) 5.1 3.1 6.3 31.3 8.1 17.2 52.5 -52.7% -84.5% -20.3% 64.6% -83.8% (1) Depreciation and amortization: these amounts include total depreciation and amortization based on cash flow for ITR (2) Adjusted EBITDA: Earnings before interest, tax, depreciation and amortization and net earnings from non-recurring operations. The computing process was developed acording the CVMnº 527 instruction ofOctober 04, 2012.
NET REVENUE – BY MARKET 62 Results
NET REVENUE – BY GEOGRAPHY 63 Results
64 FIREARMS (72%) BRAZIL (19%) USA (70%) FOREIGN (11%) HELMETS (21%) BRAZIL (99%) OTHERS (7%) BRAZIL (91%) USA (9%) Public Security (50%) Private Security (45%) Dealers (5%) Consumer Market Public Security (50%) Dealers (50%) 46% of Market Share NET REVENUE – BY SEGMENT Results M.I.M. (Metal Injection Molding) M.I.M., plastic products, bulletproof vests
65 Results RESULTS BY BUSINESS SEGMENT Consolidated amount in BRL millions 1H14 Part. % 1H13 Part. % Var. 1H14 1H13 Var. 1H14 1H13 Var.p.p 1H14 1H13 Var. Firearms 218.1 72.4% 333.2 77.0% -34.6% 45.0 108.5 -58.5% 20.6% 32.6% -11.9 (44.1) 14.2 NS Helmets 62.9 20.9% 63.5 14.7% -0.9% 21.5 23.8 -9.5% 34.2% 37.5% -3.2 13.8 15.4 -10% Others 20.1 6.7% 35.9 8.3% -44.1% 5.3 6.2 -14.0% 26.5% 17.2% 9.3 (3.0) (16.2) -82% Total 301.1 100.0% 432.6 100.0% -30.4% 71.8 138.5 -48.1% 23.9% 32.0% -8.2 (33.2) 13.3 NS 2Q14 Part. % 2Q13 Part. % Var. 2Q14 2Q13 Var. 2Q14 2Q13 Var.p.p 2Q14 2Q13 Var. Firearms 94.1 70.8% 151.8 74.5% -38.0% 14.8 44.8 -67.0% 15.7% 29.5% -13.8 (31.7) (6.4) NS Helmets 30.3 22.8% 33.6 16.5% -9.8% 9.9 13.5 -26.4% 32.7% 40.1% -7.4 6.6 9.5 -31% Others 8.6 6.4% 18.5 9.1% -53.6% 1.4 2.3 -38.1% 16.4% 12.3% 4.1 (2.7) (13.8) -80% Total 132.9 100.0% 203.9 100.0% -34.8% 26.1 60.5 -56.9% 19.6% 29.7% -10.0 (27.9) (10.7) NS 2Q14 Part. % 1Q14 Part. % Var. 2Q14 1Q14 Var. 2Q14 1Q14 Var.p.p 2Q14 1Q14 Var. Firearms 94.1 70.8% 124.0 73.8% -24.2% 14.8 30.2 -51.0% 15.7% 24.3% -8.6 (31.7) (12.3) NS Helmets 30.3 22.8% 32.6 19.4% -7.1% 9.9 11.6 -14.6% 32.7% 35.6% -2.9 6.6 7.3 -10% Others 8.6 6.4% 11.5 6.8% -25.4% 1.4 3.9 -64.1% 16.4% 34.0% -17.6 (2.7) (0.3) NS Total 132.9 100.0% 168.1 100.0% -20.9% 26.1 45.7 -42.9% 19.6% 27.2% -7.6 (27.9) (5.3) NS Net Revenue Gross Income Gross Margin Income before taxes Comparative Quarter - Year over Year Net Revenue Gross Income Gross Margin Income before taxes Comparative Quarter - Current Quarter x Previous Quarter Comparative Six months - Year over Year Net Revenue Gross Income Gross Margin Income before taxes
66 Results ADJUSTED EBITDA
67 Results WORKING CAPITAL
68 INVENTORY DAYS x FINANCIAL CYCLE Results - 50 100 150 200 250 300 4Q12 2Q13 4Q13 1Q14 2Q14 Inventory Days LTM Financial Cycle
69 WORKING CAPITAL NEEDS Results 0 50.000 100.000 150.000 200.000 250.000 300.000 350.000 400.000 2011 2012 2013 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14
70 Results DEBT
MATURITY OF DEBT 71 Results In BRL thousands
FINANCIAL POSITION 72 Results In BRL millions
73 Results INVESTIMENTS
INVESTIMENTS IN NON-CURRENT ASSETS 74 Results (1.000) 1.000 3.000 5.000 7.000 9.000 11.000 Expansion of Capacity Modernization of Industrial Park Continous Improvement Others 1H13 1H14
CAPITAL EXPENDITURES FOR 2014 75 Results CAPEX BRL Thousands US$ Thousands Part % P&D 10,837 4,516 20% Modernization 28,939 12,058 52% IT 10,854 4,522 20% Branch 5 Transfer 4,553 1,897 8% Total 55,182 22,993 100%
76 Company Defense & Security Metallurgy & Plastics GuidanceResults Strategies
GUIDANCE 2014 77 Guidance The Management chose to not provide Net Revenue and EBITDA for 2014; CAPEX: the capital expenditures for 2014 approved in AGM is BRL 55,2 millions, 14,7% have been done until 1H14.
78 Company Defense & Security Metallurgy & Plastics GuidanceResults Strategies
79 Stop selling forged to other companies: completed in November/2013; Transfer the long guns production to Polimetal (São Leopoldo) in Lean concept; Reduce the number of models (SKUs); REESTRUCTUING ACTIONS IN PROGRESS
80 Reimplementation the Management of Manufacturing System; Reduced costs and resources used in production; Structuring the Supply Chain department; Review of the entire logistics chain (use of new modes and reducing inventories). REESTRUCTUING ACTIONS IN PROGRESS
81 Update and introduce new modules on ERP system, improving internal controls and management reports; Integrate the operations between Brazil and the USA; Expand M.I.M. markets to other markets, promoting profitability increase of the segment; MAIN ACTIONS FOR 2014
82 Reduce dependence on the american market by increasing the volume of exports to other countries; Expand supply the armed forces, taking advantage of our condition of Strategic Defense Company; Preparing the Company to provide services of products maintanance. MAIN ACTIONS FOR 2014
FELIPE G. OLIVEIRA Investor Relations Analyst felipe.oliveira@taurus.com.br DORIS B. F. WILHELM Investor Relations Officer doris.wilhelm@taurus.com.br 83 EDUARDO F. COSTA Vice-President Administrative & CFO eduardo.costa@taurus.com.br FORJAS TAURUS S.A. 55 51 3021 3001 ri@taurus.com.br www.taurusri.com.br
Institutional Presentation - 2Q14

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Institutional Presentation - 2Q14

  • 1.
  • 2.
  • 3.
    3 Company Forjas Taurus S.A. •LARGEST MANUFACTURER OF REVOLVERS • LEADING NATIONAL HELMETS’ PRODUCTION • BRAZILIAN COMPANY WITH METAL INJECTION MOLDING TECHNOLOGY
  • 4.
    4 Company 1980 – Beretta 1982– IPO 1983 –Taurus International 1985 – Taurus Ferramentas 1986 – Induma 1988 – Taurus Holdings 2000 – Taurus Capacetes 2004 – Famastil 2004 – Máquinas-Ferramenta 2006 – Taurus Helmets 2006 – Launch of “The Judge” 2008 – Taurus Inv. Imobiliários 2008 – Rossi – Armas longas 2008 – Metus 2010 – Taurus Blindagens Nordeste 2011 – Jul:IAdmission to Nível 2 BM&FBOVESPA – Oct: Acquisition ofSteelInject – Dec: Segregation of business industries into guns and metallurgy and plastics – Election of new IRO. 2012 – Heritage Manufacturing Inc. Acquisition – Divestiment TMFL – Relocation of the long gun and MIM sites to São Leopoldo / RS 2013 – Diamondback – Global distribution - Starting Lean Manufacturing in long guns facilities - Steelinject in São Leopoldo - Shutdown of Forgery for others 00´s 30´s 70´s 80´s 90´s 1939 – Forjas Taurus 1970 – Control to foreign investors 1977 – Forjas Taurus by Polimetal 1991 – Champion’s assets 1997 – Rossi – Revólver (use of the brand. technology. assets and productive processes) 1999 – Pollymer and titanium guns
  • 5.
    2014 Facts • Electionof the Board of Directors by the multiple voting process at the AGM realized on 06/27/14 and amend the Bylaw, increasing from 7 to 9 members with names linked to a strong experience in Corporate Governance and Management; • Tenure of the new Board of Directors on 07/17/14, elected Mr. Jório Dauster and Mr. Ruy Lopes Filho as Chairman and Vice-Chairman, respectively; also appointed the members of the Advisory Statutory Committees of the Board: Audit and Risk, Remuneration and People Development and Management and Corporate Governance Committee. 5 Company
  • 6.
    • Actions foroperational improvement: a process and products review in order to reduce costs and expenses, measured by indicators that show a reduction in staff and product portfolio (from 5,500 SKUS on Dec/13 to 400 on Dec/14); • Actions for administrative improvemet: implementation of new ERP modules, review of the entire value chain, balancing costs and the structure of products and local and international sales, aiming to better internal controls and compliance with market requirements; 6 Company 2014 Facts
  • 7.
    • Trends andbenefits of these transformations: • Results-oriented strategic focus in the medium and long term; • Resumption slow but gradual and continuos of the Company’s perfomance, according to market conditions and productivity; • Projects seeking greater productivity, quality and profitability; • Recovery of margins and profitability; • Continuos pursuit of maximazing shareholder value added; and • Benefits will come through structural changes, causing the Company to re-grow consistently and sustainably. 7 Company 2014 Facts
  • 8.
    • Capital Increase 8 Company •After two rounds of leftovers and period of review, 48,522,214 common shares and 85,703 preferred shares have been subscribed, of the total of 48,528,020 common shares and 97,056,038 preferred shares, without par value, to be issued by the Company; • With the end of the review period, the subscribed shares totaled BRL 67.078.925,46; • The process of capital increase was completed and an Extraordinay General Meeting has been convened for 08/20/14 in order to resolve their approval. 2014 Facts
  • 9.
    9 Company • Capital Increase– Shareholders before and after* *still subject to approval at the EGM 2014 Facts
  • 10.
    Capital Increase Schedule Part1 10 Company EVENT DATE EGM – capital increase approval 04/29/2014 Notice to Shareholders on CVM system 05/05/2014 Notice to Shareholders on newspapers 05/06/2014 Cutoff date of the shareholders still had preemptive rights 05/27/2014 Beginning of the period of preemptive rights 05/28/2014 Date that the shares were ex-subscription rights 05/28/2014 End date of preemptive rights 06/27/2014 Beginning of 1st apportionment of leftovers 07/04/2014 End of 1st apportionment of leftovers 07/10/2014
  • 11.
    11 Company EVENT DATE Beginningof 2nd apportionment of leftovers 07/14/2014 End of 2nd apportionment of leftovers 07/18/2014 Beginning of Review Period of Subscriptions 07/24/2014 End of Review Period of Subscriptions 07/30/2014 Convening the EGM for approval of the capital increase – CVM system 08/04/2014 Convening the EGM for approval of the capital increase – newspapers 08/05/2014 08/06/2014 08/07/2014 EGM capital increase confirmation 08/20/2014 Capital Increase Schedule Part 2
  • 12.
    Board of Directors Chairman:Jorio Dauster Magalhães e Silva Vice-Chairman: Ruy Lopes Filho André Ricardo Balbi Cerviño Durval José Soledade Santos Fernando José Soares Estima João Verner Juenemann Luis Fernando Costa Estima Luiz Felix de Freitas Manuel Jeremias Leite Caldas Tax Board Amoreti Franco Gibbon Alternate: Edgar Panceri Juliano Puchalski Teixeira Alternate: Carlos Eduardo Bandeira de Mello Francesconi Marcelo de Deus Saweryn Alternate: Lisiane Miguel Wilke Mauro César Medeiros de Mello Alternate: Roberto Hesketh Reinaldo Fujimoto Alternate: José Airton Veras Carvalho 12 Company Statutory Board André Ricardo Balbi Cerviño Eduardo Feldmann Costa Eduardo Ermida Moretti Dóris Beatriz França Wilhelm Board
  • 13.
  • 14.
    CorporateGovernance 14 Company 100% OF TAGALONG (ORDINARY AND PREFERRED) 35% PAYOUT (SEMIANNUAL) PREFERRED VOTING RIGHTS (IMPORTANT SUBJECTS) 40% INDEPENDENT BOARD (MINIMUM)
  • 15.
    ON 47,137,539 33.3% PN94,275,078 67.3% TOTAL 141,412,617 100.0% Dec 31st , 2013 Jul 31st , 2014* TOTAL ON PN TOTAL ON PN PREVI 24% 14% 29% 24% 14% 29% LFCE E ESTIMAPAR 15% 44% 0% 15% 44% 0% CBC 0% 0% 0% 5% 15% 1% FIGI FIA 3% 9% 0% 3% 9% 0% GERAÇÃO FUTURO 2% 7% 0% 0% 0% 0% TREASURY 9% 6% 10% 9% 6% 10% FREEFLOAT 47% 20% 61% 46% 27% 56% 15 July 31st, 2014 Company Shareholders * without any effects of the capital increase underway, since it is not approved yet. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2009 2010 2011 2012 2013 jul/14 ASSETS / FUNDOS CLUBES DE INVESTIMENTOS FUNDAÇÕES E SEGURADORAS ESTRANGEIROS PESSOA FISÍCA PESSOA JURÍDICA ASSETS / FUNDS INVESTMENTS CLUBS FOUNDATION AND SECURITIES FOREIGN SHAREHOLDERS INDIVIDUAL INVESTORS LEGAL ENTITY
  • 16.
    16 INVESTOR RELATIONS OFFICER Dóris B.F. Wilhelm VP ADMINISTRATIVE AND FINANCE Eduardo Feldmann Costa SHAREHOLDERS BOARD OF DIRECTORS CHIEF EXECUTIVE OFFICER André Balbi TAURUS HOLDINGS INC. CEO Anthony Acitelli INTERNAL AUDIT COMITEES LAW MANAGER AND BOARD SECRETARY Simone Baguinski COMPENSATIONAL AND PERSONNEL DEVELOPMENT AUDIT AND RISKS MANAGEMENT AND CORPORATE GOVERNANCE VP SALES AND MARKETING Eduardo Moretti HELMETS AND PLASTICS GENERAL MANAGER Fernando Gonçalves TAX BOARD INDUSTRIAL OPERATIONS EXECUTIVE OFFICER Eduardo Rácz ORGANIZATIONAL STRUCTURE SUPPLY CHAIN EXECUTIVE OFFICER Marco A. Harzheim
  • 17.
  • 18.
    18 SOCIAL COMMITMENT Company • Kidsof the Future • Library • Digital Space • Sign Language Course • Educational Benefits • Impulsor News
  • 19.
  • 20.
    IMPACT FACTORS 20 Defense & Security Seasonality MassEvents Trade Fairs Hunting Season Regulatory Fear Demand Innovation Quality Auctions Economics Currency Macroeconomics Trademarks and Patents
  • 21.
    NATIONAL INSTANT CRIMINAL BACKGROUNDCHECK SYSTEM 21 Defense & Security Source: FBI adjusted by NSSF
  • 22.
    22% 22% 23%24% 24% 22% 22% 23% 24% 24% 22% 22% 12% 12% 12% 12% 11% 10% 12% 10% 13% 12% 12% 11% 44% 44% 45% 43% 46% 48% 45% 47% 41% 41% 42% 44% 22% 22% 20% 20% 19% 21% 21% 20% 21% 23% 23% 23% jul/13 ago/13 set/13 out/13 nov/13 dez/13 jan/14 fev/14 mar/14 abr/14 mai/14 jun/14 Midwest Northeast Other South West NICS GEOGRAPHIC DISTRIBUTION 22 Defense & Security Source: FBI adjusted by NSSF
  • 23.
  • 24.
  • 25.
    25 Defense & Security 4thGeneration • Long Guns (restricted use) 3rd Generation • Long Guns 2nd Generation • Pistols 1st Generation • Revolvers Products Generations
  • 26.
  • 27.
    27 Public Security Private Security Others BrazilCONSUMER MARKET • Hobby / Collector • Sports / Hunting • Civilian /Others Public Security Private Security UNITED STATES MAIN CONSUMER MARKETSDefense & Security
  • 28.
    28 2012 FIELD & STREAMBEST OF THE BEST AWARD TAURUS TRACKER 992 2011 NRA: HANDGUN OF THE YEAR PT 740 SLIM 2013 MANUFACTURER OF THE YEAR TAURUS INTERNATIONAL MFG, INC. AWARDS Defense & Security
  • 29.
  • 30.
    Police Force Federal Police- 15,182 actives (i) Civil Police – 117,501 actives (i) Military Police – 113,295 actives (i) Military Forces Military Forces – 275,403 actives (i) PUBLIC SECURITY PRIVATE SECURITY 30 Active Vigilants – 660,513 (ii) (i) Public Security 2012 Report (data from 2011) (ii) General Coordination of Private Security Control 2012 Defense & Security
  • 31.
    31 412.154 452.441 509.829 552.052 660.513 2008 2009 20102011 2012 ACTIVE VIGILANTS Defense & Security Fonte: SEVESP
  • 32.
    90% OF MARKETSHARE HANDGUNS IN BRAZIL PEERS: CBC AND IMBEL 10% OF MARKET SHARE 32 Defense & Security
  • 33.
  • 34.
    34 CARRY ON MOVEMENT WorldChampion Speed ​​Shooter 2013 Jessie Harrison Athlete – Taurus’ team leader Taurus International Manufacturing Inc. initiative to encourage the concealed carry guns and the shooting sports. Defense & Security
  • 35.
    35 Considered a breakthroughin shooting sports, Alex Larch is the new member of Taurus team lead by Jessie Duff Alex Larche Taurus offers to its customers a new concept in packaging, providing greater security and perceived quality. White Box CARRY ON MOVEMENT Defense & Security
  • 36.
    Taurus cares aboutits consumers: new Customer Service extended to all american territory. 36 CARRY ON MOVEMENT Defense & Security
  • 37.
    EXPORTS FOR MORE THAN 70COUNTRIES 37 Defense & Security
  • 38.
  • 39.
    IMPACT FACTORS 39 Metallurgy & PlasticsMotorcycle Sales Car substition for motorcycle Mobility and traffic saving Delivery Services Motocab Credit Defaults’ growth Restricted credit concession % of down payments’ value Number of installments Motorcycle maintenance X Helmet acquisition Inexistence of financing for used low cilinder motocycles
  • 40.
  • 41.
    41 Source: Denatran andFENABRAVE Motorcycles (new motorcycles e fleet) Metallurgy & Plastics 0 500.000 1.000.000 1.500.000 2.000.000 2.500.000 0 5.000.000 10.000.000 15.000.000 20.000.000 25.000.000 Motorcycles Fleet x New Motorcycles Frota Circulante Emplacamentos FENABRAVE 7% 15% 25% 33% 13% -16% 12% 8% -16% -7% -2% 14% 14% 16% 18% 17% 12% 12% 12% 9% 8% 3% -20% -10% 0% 10% 20% 30% 40% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* Growth Rates New Motorcycles x Fleet Crescimento de Emplacamentos Crescimento da Frota *2014 new motorcycles LTM until June/2014 New MotorcyclesFleet Motorcycles Growth Rate Fleet Growth Rate
  • 42.
    42 Source: Taurus Market ShareEvolution TAURUS HELMETSMetallurgy & Plastics 43.4% 42.9% 43.5% 45.1% 46.7% 46.7% 45.8% 45.7% dez/08 dez/09 dez/10 dez/11 dez/12 dez/13 mar/14 jun/14
  • 43.
    IN BRAZIL, ONAVERAGE, ARE 1.5 HELMETS PER MOTORCYCLE FLEET WITH REPLACEMENT EVERY 6 YEARS 43 Metallurgy & Plastics
  • 44.
    RetailWholesale MagazinesFleet OwnersGovernments Trade Representatives CLIENTS 44 Metallurgy & Plastics
  • 45.
    45 Metallurgy & Plastics 46% BRAZILIAN MOTORCYCLE HELMETS MARKET SHARE 1.5 HELMETSPER MOTORCYCLE IN BRAZIL 4.8 MILLIONS UNITS/YEAR POTENTIAL MARKET
  • 46.
    Redesignthe helmet sales success: SANMARINO, the model is smaller, lighter, with better aerodynamics, maintaining the large peripheral vision. 46 Metallurgy & Plastics
  • 47.
    TAURUS HELMETS FOR CYCLING 47 Metallurgy &Plastics Urban Mobility Environmental Consciousness NEW!
  • 48.
    48 NEW! “Brazilian leader inhelmets manufacturing, Taurus expands its portfolio with the launchof new features for motorcycles medium and high displacement. By now, the brand offers a complete TOP line of helmets developed in partnership with Italian company Caberg ” - MOTO.com.br Metallurgy & Plastics
  • 49.
    PEERS 49 Metallurgy & Plastics 46% 44% 10% OTHERS Market Share NomeLogo País Nome Logo País Nome Logo País AGV Itália HELD Alemanha NAU Portugal AIROH Itália HELT Brasil NOLAN Itália ARAI Japão HJC EUA NORISK Brasil ASTONE França ICON EUA ONE EUA BELL EUA KRAFT Brasil PEELS Brasil BIEFFE Brasil LAZER Bélgica PRO TORK Brasil CRAFT Alemanha LS2 Espanha SHARK França EBF Brasil MARUSHIN Itália SHOEI Japão FLY Brasil MHR China STARPLAST Brasil FOX EUA MIXS Brasil TAURUS Brasil HARLEY- DAVIDSON EUA MT Espanha VAZ Brasil
  • 50.
    COMPETITIVE ADVANTAGES Quality Raw materialfrom recognized suppliers Compliance with brazilian quality standard (NBR 7471/2001) Adaptation to european standards Production scale Design Updated and innovative design Artwork with excellent finishing 50 Metallurgy & Plastics
  • 51.
    Safety traffic campaign Participation in associations likeAPAE, ABAI and others Recycling events and adaptation to Environmental Institute of Paraná ENVIRONMENTAL CONSCIOUSNESS 51 Metallurgy & Plastics
  • 52.
    A NEW CONSCIOUSNESS INCOLLECTION 52 Metallurgy & Plastics
  • 53.
    CLIENTS Trade Representatives Contractors ResaleResidential Condominiums Manufacturers Prefectures 53 Metallurgy & Plastics
  • 54.
  • 55.
    TO PROTECT YOURLIFE, COUNT ON TAURUS BULLETPROOF VESTS 55 Metallurgy & Plastics
  • 56.
    M.I.M. (METAL INJECTIONMOLDING) IS TECHNOLOGY ON TAURUS’ PRODUCTS 56 Metallurgy & Plastics
  • 57.
  • 58.
    58 MAIN M.I.M. CLIENTS DEFENSE& SECURITY OTHERS Metallurgy & Plastics
  • 59.
    TAURUS TOOLS PREMIUM LINE. QUALITYAND INNOVATION PARTICIPATION OF 35% IN ASSOCIATED 59 Metallurgy & Plastics
  • 60.
  • 61.
    ECONOMIC AND FINANCIAL INDICATORS 61 Results InBRL millions Variation % Ratios 2Q14 1Q14 2Q13 2Q12 1H14 1H13 1H12 1H14/1H13 1H14/1H12 2Q14/2Q13 2Q14/1Q14 2Q14/2Q12 Net revenue 132.9 168.1 203.9 175.4 301.1 432.6 353.8 -30.4% -14.9% -34.8% -20.9% -24.2% Domestic market 59.9 62.4 71.9 74.8 122.3 128.1 144.6 -4.6% -15.4% -16.8% -4.0% -19.9% Foreign market 73.1 105.8 132.0 100.6 178.8 304.5 209.2 -41.3% -14.5% -44.6% -30.9% -27.4% COGS 106.8 122.4 143.4 101.5 229.3 294.1 213.7 -22.1% 7.3% -25.5% -12.7% 5.2% Gross Profit 26.1 45.7 60.5 73.9 71.8 138.5 140.0 -48.1% -48.7% -56.9% -42.9% -64.7% Gross Margin - % 19.6% 27.2% 29.7% 42.1% 23.9% 32.0% 39.6% -8.2 p.p. -15.7 p.p. -10.0 p.p. -7.6 p.p. -22.5 p.p. Operating Expenses -37.5 -41.2 -52.2 -36.4 -78.7 -93.1 -72.1 -15.5% 9.1% -28.1% -8.8% 3.3% Operating Profit (EBIT) -11.4 4.5 8.3 37.5 -6.9 45.3 67.9 -115.2% -110.2% -237.7% -352.2% -130.5% EBIT Margin - % -8.6% 2.7% 4.1% 21.4% -2.3% 10.5% 19.2% -12.8 p.p. -21.5 p.p. -12.7 p.p. -11.3 p.p. -30.0 p.p. Net Financial Income -16.4 -9.9 -19.0 -18.0 -26.3 -32.0 -19.9 -17.9% 32.3% -13.6% 66.2% -8.5% Depreciation and amortization (1) 8.2 8.1 9.6 7.9 16.3 17.7 15.4 -8.0% 5.4% -14.7% 1.3% 3.9% Net Income - Continuing Operations -25.6 -4.5 -20.4 12.1 -30.2 -11.2 29.4 169.2% -202.5% 25.6% 464.1% -311.5% Net Income Margin - Cont. Operations -19.3% -2.7% -10.0% 6.9% -10.0% -2.6% 8.3% -7.4 p.p. -18.3 p.p. -9.3 p.p. -16.6 p.p. -26.2 p.p. Net Income - Descontinuing Operations 0.0 0.0 0.0 -127.1 0.0 0.0 -132.2 - - - - - Net Income - Consolidated -25.6 -4.5 -20.4 -114.9 -30.2 -11.2 -102.8 169.2% -70.7% 25.6% 464.1% -77.7% Net Income Margin - Consolidated -19.3% -2.7% -10.0% -65.5% -10.0% -2.6% -29.1% -7.4 p.p. 19.0 p.p. -9.3 p.p. -16.6 p.p. 46.3 p.p. Adjusted EBITDA(2) -2.0 14.3 30.1 44.5 12.4 77.1 80.7 -84.0% -84.7% -106.5% -113.7% -104.4% Adjusted EBITDA Margin - % -1.5% 8.5% 14.8% 25.4% 4.1% 17.8% 22.8% -13.7 p.p. -18.7 p.p. -16.2 p.p. -10.0 p.p. -26.8 p.p. Total Assets 1,091.1 1,089.2 1,266.9 1,059.8 1,091.1 1,266.9 1,059.8 -13.9% 3.0% -13.9% 0.2% 3.0% Equity 104.1 134.7 204.8 228.9 104.1 204.8 228.9 -49.2% -54.5% -49.2% -22.7% -54.5% Investiments (CAPEX) 5.1 3.1 6.3 31.3 8.1 17.2 52.5 -52.7% -84.5% -20.3% 64.6% -83.8% (1) Depreciation and amortization: these amounts include total depreciation and amortization based on cash flow for ITR (2) Adjusted EBITDA: Earnings before interest, tax, depreciation and amortization and net earnings from non-recurring operations. The computing process was developed acording the CVMnº 527 instruction ofOctober 04, 2012.
  • 62.
    NET REVENUE –BY MARKET 62 Results
  • 63.
    NET REVENUE –BY GEOGRAPHY 63 Results
  • 64.
    64 FIREARMS (72%) BRAZIL (19%) USA(70%) FOREIGN (11%) HELMETS (21%) BRAZIL (99%) OTHERS (7%) BRAZIL (91%) USA (9%) Public Security (50%) Private Security (45%) Dealers (5%) Consumer Market Public Security (50%) Dealers (50%) 46% of Market Share NET REVENUE – BY SEGMENT Results M.I.M. (Metal Injection Molding) M.I.M., plastic products, bulletproof vests
  • 65.
    65 Results RESULTS BY BUSINESSSEGMENT Consolidated amount in BRL millions 1H14 Part. % 1H13 Part. % Var. 1H14 1H13 Var. 1H14 1H13 Var.p.p 1H14 1H13 Var. Firearms 218.1 72.4% 333.2 77.0% -34.6% 45.0 108.5 -58.5% 20.6% 32.6% -11.9 (44.1) 14.2 NS Helmets 62.9 20.9% 63.5 14.7% -0.9% 21.5 23.8 -9.5% 34.2% 37.5% -3.2 13.8 15.4 -10% Others 20.1 6.7% 35.9 8.3% -44.1% 5.3 6.2 -14.0% 26.5% 17.2% 9.3 (3.0) (16.2) -82% Total 301.1 100.0% 432.6 100.0% -30.4% 71.8 138.5 -48.1% 23.9% 32.0% -8.2 (33.2) 13.3 NS 2Q14 Part. % 2Q13 Part. % Var. 2Q14 2Q13 Var. 2Q14 2Q13 Var.p.p 2Q14 2Q13 Var. Firearms 94.1 70.8% 151.8 74.5% -38.0% 14.8 44.8 -67.0% 15.7% 29.5% -13.8 (31.7) (6.4) NS Helmets 30.3 22.8% 33.6 16.5% -9.8% 9.9 13.5 -26.4% 32.7% 40.1% -7.4 6.6 9.5 -31% Others 8.6 6.4% 18.5 9.1% -53.6% 1.4 2.3 -38.1% 16.4% 12.3% 4.1 (2.7) (13.8) -80% Total 132.9 100.0% 203.9 100.0% -34.8% 26.1 60.5 -56.9% 19.6% 29.7% -10.0 (27.9) (10.7) NS 2Q14 Part. % 1Q14 Part. % Var. 2Q14 1Q14 Var. 2Q14 1Q14 Var.p.p 2Q14 1Q14 Var. Firearms 94.1 70.8% 124.0 73.8% -24.2% 14.8 30.2 -51.0% 15.7% 24.3% -8.6 (31.7) (12.3) NS Helmets 30.3 22.8% 32.6 19.4% -7.1% 9.9 11.6 -14.6% 32.7% 35.6% -2.9 6.6 7.3 -10% Others 8.6 6.4% 11.5 6.8% -25.4% 1.4 3.9 -64.1% 16.4% 34.0% -17.6 (2.7) (0.3) NS Total 132.9 100.0% 168.1 100.0% -20.9% 26.1 45.7 -42.9% 19.6% 27.2% -7.6 (27.9) (5.3) NS Net Revenue Gross Income Gross Margin Income before taxes Comparative Quarter - Year over Year Net Revenue Gross Income Gross Margin Income before taxes Comparative Quarter - Current Quarter x Previous Quarter Comparative Six months - Year over Year Net Revenue Gross Income Gross Margin Income before taxes
  • 66.
  • 67.
  • 68.
    68 INVENTORY DAYS xFINANCIAL CYCLE Results - 50 100 150 200 250 300 4Q12 2Q13 4Q13 1Q14 2Q14 Inventory Days LTM Financial Cycle
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  • 70.
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  • 73.
  • 74.
    INVESTIMENTS IN NON-CURRENTASSETS 74 Results (1.000) 1.000 3.000 5.000 7.000 9.000 11.000 Expansion of Capacity Modernization of Industrial Park Continous Improvement Others 1H13 1H14
  • 75.
    CAPITAL EXPENDITURES FOR2014 75 Results CAPEX BRL Thousands US$ Thousands Part % P&D 10,837 4,516 20% Modernization 28,939 12,058 52% IT 10,854 4,522 20% Branch 5 Transfer 4,553 1,897 8% Total 55,182 22,993 100%
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  • 77.
    GUIDANCE 2014 77 Guidance The Managementchose to not provide Net Revenue and EBITDA for 2014; CAPEX: the capital expenditures for 2014 approved in AGM is BRL 55,2 millions, 14,7% have been done until 1H14.
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  • 79.
    79 Stop selling forgedto other companies: completed in November/2013; Transfer the long guns production to Polimetal (São Leopoldo) in Lean concept; Reduce the number of models (SKUs); REESTRUCTUING ACTIONS IN PROGRESS
  • 80.
    80 Reimplementation the Managementof Manufacturing System; Reduced costs and resources used in production; Structuring the Supply Chain department; Review of the entire logistics chain (use of new modes and reducing inventories). REESTRUCTUING ACTIONS IN PROGRESS
  • 81.
    81 Update and introducenew modules on ERP system, improving internal controls and management reports; Integrate the operations between Brazil and the USA; Expand M.I.M. markets to other markets, promoting profitability increase of the segment; MAIN ACTIONS FOR 2014
  • 82.
    82 Reduce dependence onthe american market by increasing the volume of exports to other countries; Expand supply the armed forces, taking advantage of our condition of Strategic Defense Company; Preparing the Company to provide services of products maintanance. MAIN ACTIONS FOR 2014
  • 83.
    FELIPE G. OLIVEIRA InvestorRelations Analyst felipe.oliveira@taurus.com.br DORIS B. F. WILHELM Investor Relations Officer doris.wilhelm@taurus.com.br 83 EDUARDO F. COSTA Vice-President Administrative & CFO eduardo.costa@taurus.com.br FORJAS TAURUS S.A. 55 51 3021 3001 ri@taurus.com.br www.taurusri.com.br