Eucatex S.a. Industria E Comercio · BMFBOVESPA:EUCA3
Eucatex S.a. Industria E Comercio — H1 2008 Earnings Presentation
24 slides from Eucatex S.a. Industria E Comercio's earnings presentation, Aug 14, 2008
Slide 1: 1S08 Earnings Conference Call
1S08 Earnings Conference Call August 14, 2008
Slide 2: Disclaimer
Disclaimer This presentation includes forward‐looking statements that are subject to risks and uncertainties based on the beliefs and assumptions of the management of Eucatex S.A. Indústria e Comércio, and on information currently available to the Company. Forward‐looking statements are not guarante
Slide 3: 1S08 Highlights
1S08 Highlights » Substantial improvement in financial results Gross revenue was R$ 418.7 million in 1H08, 13.5% up on 2007; Gross margin of 33.4% in 1H08, 2.0 p.p. up from 1H07, which was 31.4%; EBITDA was R$ 66 million in 1H08, 32.3% up on 1H07; EBITDA Margin increased by 3.1 p.p. in 1H08
Slide 4: Revenue Breakdown
Revenue Breakdown » Highlights Increase in MDP’s share of Revenue: 35% in 1H08 versus 34% in 1H07 . Eucatex’s paint segment represented 16% of revenues in 1H08, versus 13% in 1H07 . Gross Revenue Breakdown - 2H08 Gross Revenue Breakdown - 2H07 8% Hardboard 11% 16% 33% MDP 13% 34% Laminate Floori
Slide 5: Hardboard
Hardboard » Growth of 9.7% in gross revenue in 1H08 and increase in market share: result of better use of installed capacity, better prices and sales mix; » Guarantee of electricity supply (contracted till 2012) and thermal energy supply through the wood recycling project. Installed Capacity Used Ma
Slide 6: MDP Panels
MDP Panels » Quality index of MDP production totaled 98% of high-quality products in 1H08; and » Gross Revenue from MDP panels amounted to R$ 148.1 million in 1H08, a 19.7% increase over 1H07 as a result of both higher supply (use of installed capacity) and better prices and mix. Installed Capacity
Slide 7: Wood Sales Mix
Wood Sales Mix » Eucatex’s sales mix has a higher percentage of coated products compared to market peers. » In 1H08, the percentage of coated products, which have a higher value-added, was 96% of total MDP sales. EUCATEX Percentage of MDP Coated Products Percentage of Sales of MDP Coated Products St
Slide 8: Laminate Flooring
Laminate Flooring » In 1H08, Laminate Flooring posted gross revenue of R$ 33.8 million, 12.2% up on 1H07; » In 1H08, new flooring lines - Prime, Rustic and Classic - were launched and presented at leading industry fairs: Revestir and Feicon. Installed Capacity Used Market Share COGS - Laminate Floor
Slide 9: Flooring Launches
Flooring Launches » Eucafloor Classic – Has the veins and satin texture of natural wood. Floors that combine vision and touch. » Eucafloor Rustic – Floors that remind the textures of rustic and premium wood. » Fairs – Revestir and Feicon – sales stands built with Eucatex products. The facades were m
Slide 10: Paints
Paints 37.8% increase in gross revenue versus 1H07, reflecting the following initiatives: » Strengthening of the sales team in several regions of the country; Growth 2006 2007 1H08 Eucatex 34% 52% 34% » Creation of new product distribution centers; Market (*) 3% 6% 8% » Launch of new products and co
Slide 11: Paint and E-Colors Launches
Paint and E-Colors Launches » Eucatex Maritime Acrylic Super Premium – Offers extra protection for surfaces in more aggressive environments. ▽ Wood Line – Complete line of varnishes, sealants and stains. Used in wooden houses, doors, furniture, windows, gates and decks. ▽ E-colors – A high-tech Tint
Slide 12: Sustainability » Forests
Sustainability » Forests Annual consumption (with the new line) estimated at 1.4 million m³, equivalent to 4,400 hectares of forests for a 7 year period and productivity of 45 m³/ha. Current forests: 40,000 hectares, with approximately 30,000 hectares under plantation. The Company has invested to am
Slide 13: Sustainability » Wood Recycling Project
Sustainability » Wood Recycling Project – First wood recycling line for industrial use in Brazil Collection of Waste – 150 Km Radius Processing of up to 20,000 tons of waste per month. Products: Thermal energy generation Recycling in the production process Results Results of Recycling: Volume
Slide 14: Financial Highlights
Financial Highlights Highlights 2Q08 (R$ MM) 2Q08 2Q07 Var. (%) 1H08 1H07 Var. (%) Net Revenue 164.5 155.4 5.8% 338.8 305.0 11.1% Cost of Good Sold (109.2) (105.5) 3.5% (225.8) (209.1) 8.0% Gross Income 55.2 49.9 10.7% 113.0 95.8 17.9% Gross Margin (%) 33.6% 32.1% +1,5 p.p. 33.4% 31.4% +2,0 p.p. Adm
Slide 15: Capex - Investments
Capex - Investments » Investments in the new T-HDF line; » New impregnator - increased capacity and reduced costs; » New fiberboard press to be installed at the Salto unit - 8.5 million square meters p.y.; » Acquisition of equipment for the second generation of Lacca product; » Automation of the pol
Slide 16: Lacca
Lacca Exclusive MDP panels line with varnish coating of high shining. 16
Slide 17: New T-HDF Line
New T-HDF Line » Project follows schedule; » Line expected to go operational by the end of 1H09; and » All the required equipment to be delivered by the end of 2008. T-HDF: Similar to MDF, but with superior density and quality. New T – HDF Line EBITDA Growth in Installed Capacity Additional Gross Re
Slide 18: T-HDF New Line
T-HDF New Line Commence of the construction for the installation of the new T-HDF panels 18
Slide 19: T-HDF New Line
T-HDF New Line T-HDF new plant (Thin High Density Fiberboard) Conclusion until June of 2009 19
Slide 20: Debt
Debt Debt (R$ MM) 2Q08 2Q07 Var. (%) Short Term Debt 17.3 35.8 -51.7% Long Term Debt 62.3 75.0 -16.9% Gross Debt 79.6 110.8 -28.1% Cash and Cash Equivalents 7.5 3.3 124.7% Net Debt 72.2 107.5 -32.9% % Short Term Debt 22% 32% - 10 p.p. Net Debt/ EBITDA 0.5 1.1 -49.3% Net Debt % Short Term Debt Debt P
Slide 21: Governança Corporativa
Governança Corporativa » On April 24, 2008, Eucatex Board of Directors had the addition of 3 new members, with term of office until April of 2011. They are: Antônio Delfim Netto; Marcelo Faria Parodi; Heitor Aquino Ferreira. » Since May 12, 2008, Terco Grant Thornton is the independent auditor
Slide 22: Capital Markets
Capital Markets EV/EBITDA* ratio Price EUCA4 x IBOV Vol. Fin. (R$) (R$'000) EUCATEX x Brazilian Peers 10 1000 9 900 6.2 x 7.8 x 8 800 7 700 6 600 5 500 3.8 x 4 400 3 300 2 200 1 100 Duratex Satipel 0 0 Vol('000) EUCA4 IBOV base 100 EV/EBITDA** ratio EUCATEX x International Peers » EUCA4 price on Jun
Slide 23: Closing Remarks
Closing Remarks » New T-HDF line – strategically differentiated from competitors; » Energy cost under control: Eucatex has electric energy contracts till 2012 (including for the new T-HDF line). The implementation of the recycling project will allow the company to obtain the biomass required for its
Slide 24: IR Contacts
IR Contacts José Antonio G. de Carvalho Executive Vice President and IRO Phone: +55 (11) 3049-2361 ri@eucatex.com.br www.eucatex.com.br/ri 24
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