Slide 1: 3Q07 Earnings Conference Call and Webcast
3Q07 Earnings Conference Call and Webcast November 5, 2007 1
Slide 2: Important Note
Important Note A TRADITION OF INNOVATION This release contains forward-looking statements subject to risks and uncertainties. Such forward-looking statements are based on the management’s beliefs and assumptions on information currently available to the Company. The reservations as to forward-lookin
Slide 3: Presenters
Presenters A TRADITION OF INNOVATION Presenters Title Chairman of the Board Américo Emílio Romi Neto ► 29 years at the Company CEO Livaldo Aguiar dos Santos ► Joined the Company in 2007 CFO and Investor Relations Director Sergio Roberto Novo ► Joined the Company in 2005 Investor Relations Manager Lu
Slide 4: Business Units
Business Units A TRADITION OF INNOVATION Plastic Injection Rough and Machined Machine Tools Molding Machines Cast Iron Parts Hydraulical and eletrical CNC Lathes, Turning Cast iron parts, plastic injection molding supplied rough or Products Centers and Machining machines, with press machined. Center
Slide 5: Business Units
Business Units A TRADITION OF INNOVATION Plastic Injection Rough and Machined Machine Tools Molding Machines Cast Iron Parts 5
Slide 6: Facilities
Facilities A TRADITION OF INNOVATION 9 manufacturing plants located in Santa Bárbara d’Oeste - SP, totaling more then 140,000 m2. District Headquarters Foundry 6
Slide 7: Global Presence
Global Presence A TRADITION OF INNOVATION Throughout its 77 years of history, Romi has built and sold more than 144,000 machines, of which approximately 27,000 were exported Romi Global Presence • 30 direct sales office throughout Brazil • Presence in more than 60 countries, in all continents • Sale
Slide 8: Strengths
Strengths A TRADITION OF INNOVATION Cutting-edge Cutting-edge technology technology and and high high quality quality products products Attractive Attractive financing financing Solid Solid Brand Brand Extensive Extensive pre pre Proximity Proximity to to our our and and after after sales sales cust
Slide 9: Our Clients – 9M07
Our Clients – 9M07 A TRADITION OF INNOVATION Sector % Sector % Sector % Job Shops 39% Automotive 18% Automotive (Trucks) 42% Automotive 15% Job Shops 17% Automotive (Cars) 18% Capital Goods 11% Packaging 16% Energy Generation 16% Tooling 4% Home Appliances 12% Agriculture 12% Hydraulic 4% Real Estat
Slide 10: Market share
Market share A TRADITION OF INNOVATION Plastic Injection Rough and Machined Machine Tools (9M07) Molding Machines (7M07) Cast Iron Parts (2006)1 Source: Company Reports Source: Company Reports Source: Guia Abifa de Fundição Notes: 1 Calculated based on the installed capacity of castings 10
Slide 11: Highlights
Highlights A TRADITION OF INNOVATION Consolidated 9M07 Y-o-Y Net Revenue R$ 443.2mi 12.7% Adjusted EBITDA (w/o PO expenses) R$ 94.4mi 31.9% Net Income R$ 76.4mi 38.7% Order Entry (including sales taxes) R$ 583.5mi 37.2% • GDP Growing • Recognition from costumers, of the outstanding quality of our pr
Slide 12: Highlights
Highlights A TRADITION OF INNOVATION Y-o-Y Consolidated 9M07 (basis-points) Gross Margin 43.2% 120 Adjusted EBITDA Margins (w/o PO exp.) 22.0% 320 Net Margin 17.2% 320 • Strong control over costs and expenses • Components related to FX effects • Fixed costs dilution due to higher volume 12
Slide 13: Highlights
Highlights A TRADITION OF INNOVATION Net Revenue 9M07 Y-o-Y Machine Tools R$ 289.4mi 9.2% Plastic Injection Molding Machines R$ 72.0mi 12.9% Rough and Machined Cast Iron Parts R$ 81.8mi 27.0% • Machine Tools: Securing our Market Share • Plastic Injection Molding Machines: Consolidation of the “Práti
Slide 14: Highlights
Highlights A TRADITION OF INNOVATION Adjusted EBIT (w/o PO Y-o-Y 9M07 expenses) (basis-points) Machine Tools 19.8% 110 Plastic Injection Molding Machines 16.3% 1040 Rough and Machined Cast Iron Parts 18.4% 350 • Machine Tools: Our most profitable business • Plastic Injection Molding Machines: Consol
Slide 15: Net Revenue
Net Revenue A TRADITION OF INNOVATION Net Revenue (R$ mi, Consolidated) Main Markets – Exports 9M07 CAGR: 20.8% 625.8 * 548.9 510.6 E 445.7 334.7 242.9 D (*) Estimated 15
Slide 16: Cost Structure
Cost Structure A TRADITION OF INNOVATION Cost Structure – Consolidated – 9M07 Despesas 4% Depreciação 3% Materiais 70% Overall sensibility to FX effects: 46% Mão de Obra 23% 16
Slide 17: Capex e Loans
Capex e Loans A TRADITION OF INNOVATION 120,0 100,0 Capex (R$ Million) / % Over adjusted EBTIDA Loans (R$ Million) / % over adjusted EBTIDA Note: Without Finame Fabricante Financing (*) Estimated 17
Slide 18: Expansion Plans
Expansion Plans A TRADITION OF INNOVATION Public Cash Flow Estimated Total Destination Offering New Loans Schedule Generation Investment Proceeds Vulcano Project Increase Capacity of castings - 70 160 230 2008 - 2011 and Machined Castings Paradiso Project Integration of the facilities in 60 100 160
Slide 19: CAPEX – Organic Growth and Maintenance
CAPEX – Organic Growth and Maintenance A TRADITION OF INNOVATION Destination 2008 2009 2010 2011 Total Vulcano Project Increase Capacity of castings 60 55 65 50 230 and Machined Castings Paradiso Project Integration of the facilities in one 50 40 35 35 160 place, including increase on capacity Maint
Slide 20: New Investments – Paradiso Project
New Investments – Paradiso Project A TRADITION OF INNOVATION 120,0 100,0 • Payback: 7 years • Capacity Increase: from 2,900 to 4,800 machines/year (Depending on product mix produced) • Synergies: Reduction of logistic, power and maintenance expenses. Elimination of duplicated structures. Better prod
Slide 21: New Investments – Paradiso Project
New Investments – Paradiso Project A TRADITION OF INNOVATION 21
Slide 22: New Investments – Paradiso Project
New Investments – Paradiso Project A TRADITION OF INNOVATION 22
Slide 23: New Investments – Vulcano Project: New Foundry
New Investments – Vulcano Project A TRADITION OF INNOVATION New Foundry Capacity: 40,000 ton/year CAPEX: R$ 110 million Payback: 6 years Total area: 24,000 m² Location: To be defined Phase 1 Phase 2 Phase 3 Phase 4 2008 2009 2010 2011 Area (m²) 10,500 10,500 24,000 24,000 Capacity (t/year) 10,000 20
Slide 24: New Machining Unit (Casting Iron Parts)
New Investments – Vulcano Project A TRADITION OF INNOVATION New Machining Unit (Casting Iron Parts) Capacity: 40,000 ton/year CAPEX: R$ 120 million Payback: 5 year Total area: 24,000 m² Location: To be defined Phase 1 Phase 2 Phase 3 Phase 4 2008 2009 2010 2011 Area (m²) 12,000 12,000 24,000 24,000
Slide 25: Strategy
Strategy A TRADITION OF INNOVATION ► Consolidate position as Brazil’s market leader in the machine tools and plastic Maximization of the market injection molding machines share position already ► Explore opportunities on exports, thru sales efforts on products and markets which acquired provide bett
Slide 26: Acquisitions
Acquisitions A TRADITION OF INNOVATION Segment Number of Companies Average Revenues per being considered Company (R$ million) Machinery and Equipment 5 50 – 200 Castings and Machined Castings 7 70 – 300 Potential Synergies Administrative Expenses ► Dilute existing base Up to 6 months ► Dilute existi
Slide 27: Outlook
Outlook A TRADITION OF INNOVATION Consolidated 2007 2008 Net revenue growth 13% - 15% 14% - 18% Adjusted EBITDA margin 21% - 23% 21% - 23% (w/o PO Expenses) CAPEX R$30 Million R$125 Million Assumptions 2008 Brazilian GDP 4.5% BRL to USD 1.90 Selic Rate 10.0% (dec/08) 27
Slide 28: Corporate Governance
Corporate Governance A TRADITION OF INNOVATION • Novo Mercado – The joining the Novo Mercado in March positioned Romi in Bovespa’s highest level of Corporate Governance • Tag along - 100% • Board of Directors – one year term, 7 members, being 2 independent and 1 indicated by minor shareholders • Dif
Slide 29: Capital Markets: Romi vs Ibovespa
Capital Markets A TRADITION OF INNOVATION • Improved Liquidity • Joining Novo Mercado in March • Public Offering in April Romi vs Ibovespa • Average of R$4.8 million per day (As of 09/30/2007) April – September • Hiring of UBS Pactual as Market Maker, beginning October 25, 2007 • Public Offering ROM
Slide 30: Sustainability
Sustainability A TRADITION OF INNOVATION Number of Employees 2,759 Training R$ 2.1mi Employees benefits R$ 7.4mi Environment R$ 0.8mi Community Social Assistance R$ 0.4mi 30
Slide 31: Perspectivas
Perspectivas TRADIÇÃO EM INOVAR 31