This document summarizes the Q1 2010 results conference call of a company that produces motors, automation systems, energy transmission and distribution equipment, and paints. The call notes that the economic recovery is gradual, with growth coming first from consumers and shorter cycle industrial products. The company's revenues decreased year-over-year due to FX impacts. Profitability improved through cost controls despite lower revenues. Contact information is provided for investors.
Collective Mining | Corporate Presentation - April 2024
Q1 2010 Earnings Call Summary - Motors, Automation, Energy and Paint Company Discusses Quarterly Results
1. Motors | Automation | Energy | T&D | Paints
Q1 2010 Results Conference Call
April 29th, 2010
2. Disclaimer
The statements that may be made during this conference call relating to
expectations, as well as information that are currently available.
These statements involve risks, uncertainties and the use of assumptions,
as they relate to future events and, as such, depend on circumstances that
may or may not be present.
Investors should understand that the general economic conditions,
future performance and lead to results that may differ materially from those
expressed in such future considerations.
Q1 010 Conference Call Page 2 April 29th, 2010
3. General Comments on Q1 2010
Quarter confirms that recovery is going to be gradual
Economic dynamisms spreads from the Brazilian consumer
towards other segments:
Consumer goods continue strong, tied to fundamentals
Industrial products doing better the closer they are to the
consumer
Longer cycle products is still in early stages of recovery
Other emerging countries faring better than mature economies
We are resuming some investment plans as demands picks up
Production of HT motors in India by 2H of 2010;
Production of commercial motors in Linhares by year end
Q1 010 Conference Call Page 3 April 29th, 2010
5. Gross Operating Revenues
Evolution of Gross Revenues Domestic Market
(in R$ million)
5% 0% Gross Operating Revenues
22% decreasing by 11%. Net Revenues
23%
down by 11.1%
761 802 801 FX appreciation of 27% negatively
623
507 impacts comparisons
Product mix continues to shift
Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 towards short cycle products
Evolution of Gross Revenues External Market
(in US$ million) Lower order intake during 2009 is
External Market in US$ now apparent in revenues
Quarterly Average FX
Recovery continues driven by the
2,1875 2,1066 2,3117
1,7354 1,8229
Brazilian consumer
18% -11% Long cycle and external (mature)
30%
29% markets continue soft.
195,3 202,7 181,2
165,2
126,6
Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010
Q1 010 Conference Call Page 5 April 29th, 2010
6. Global Presence
Gross Revenues Breakdown 1Q10
9%
10%
Europe
North America
3%
7%
Asia & Oceania
71%
5% 2%
Brazil Africa
South & Central America
Q1 010 Conference Call Page 6 April 29th, 2010
8. Cost of Goods Sold
Successful cost containment, even below optimum capacity utilization
Raw materials have been stable up to end of the quarter
Lower dilution of fixed costs, that continued to grow as percentage of total
COGS
Other Costs Other Costs
33% 29% Steel & Coper
45%
Depreciation
6%
Q1 10 Depreciation Q1 09
5%
Other Materials Steel & Coper Other Materials
19% 42% 21%
Q1 010 Conference Call Page 8 April 29th, 2010
9. Profitability
36% 37% 36% 33%
30%
22% 24% 23%
17% 20%
293 320 312 307
238 193 203 181 182
149
Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010
Gross Profit Gross Margin EBITDA EBITDA Margin
18% Gross margin improving, despite little
16% 14% 13%
12% help from top line growth
EBITDA margin trending towards the
floor of the historical interval
Net margin showing more modest
118 129 126 122 119 improvement, benefiting from FX
stability
Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010
Net Income Net Margin
Q1 010 Conference Call Page 9 April 29th, 2010
10. Financing Policies
March 2010 December 2009 March 2009
CASH & EQUIVALENT 1.962.538 2.127.117 1.815.164
DEBT 1.782.466 1.872.533 2.099.941
- Current 814.274 895.885 1.171.587
- Long Term 968.192 976.648 928.354
NET CASH (DEBT) 180.072 254.584 (284.777)
Seasonal impact of dividend disbursement
Operating cash flow trends continue favorable
Capex program picking up where demand is stronger
Reduction on short term debt continues
Virtually no foreign currency exposure
Q1 010 Conference Call Page 10 April 29th, 2010