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Conference Call – Earnings Results – 4Q11 and 2011 | 03/13/2012
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“Forward looking statements included in this presentation regarding
the Company’s business, operating and financial results and
Company’s growth are only predictions and were based on
management's expectations regarding future performance. These
expectations are highly dependent on market conditions, Brazilian
economic scenario, industry performance and international
markets, and are therefore subject to change.”
Disclaimer
3
Eternit's performance was superior to the results of the sector:
Eternit 15.7% - Civil Construction GDP 3.6% - GDP 2.7%;
Sales of concrete tiles posted an increase of 9.6%, principally due to the unveiling of the new São José do Rio Preto plant, reaching 1.6 million square meters in 4Q11;
Fiber cement volume declined 7.5% and reached 214.8 thousand tons in 4Q11;
Evolution in margins in 4Q11 – Gross Margin 41% (+3 p.p.), EBITDA 18% (+2 p.p.) and Net Margin 15% (+1 p.p.);
Consolidated net revenue record of R$ 220.0 million with growth of 4.4%;
Consolidated EBITDA amounted to R$ 39.8 million, 17% more than in the same period in 2010;
Net Income of R$ 32.1 million, 10.5% more than reported in 4Q10; and
Inauguration of its multi-products showroom, in Sao Paulo to expose its diversified portfolio.
Highlights – 4Q11 vs. 4Q10
4
Eternit Group
Activity
Manufacture of fiber cement and commercialization of bathroom chinaware and metallic fittings
and components for construction systems
Chrysotile Mining
Manufacture of concrete tiles
and commercialization of sanitary
ware
Industrial Units
4 1 1 6
Market Share
Leader in fiber cement – 32%The world's 3rd largest – 15%
Leader in concrete tiles –
35%5th largest of Brazil in sanitary wares
Capacity 1 million tons300 thousand
tons8 million m²
Capacity Used (2011)
At About 85% 100% At about 70%
The largest and most diversified roof coverings industry in Brazil
Operational Performance – Sales Volume
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2009 2010 2011 4Q09 4Q10 4Q11
155 143 134
42 37 40
136 163 163
36 43 39
291306 297
78 80 79
5.2% -3.0%
2.8% -1.5%
Sales of Chrysotile Mineral (thous. tons)
Domestic Market Foreign Market
7
2009 2010 2011 4Q09 4Q10 4Q11
731
827 859
195 232 215
-7.5%19.0%
13.1%3.9%
Sales of Fiber Cement (thous. tons)
8
2010* 2011 4Q10 4Q11
477
4,776
5,253
5,961
1,435 1,573
9.6%
13.5%
Concrete Tiles (thous. square meters)
*Tégula was acquired on February 11 2010. The amount of 587 thousand m2 refers to Eternit.
Economic and Financial Performance
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2009 2010 2011 4Q09 4Q10 4Q11
130 111 10028 27 33
453
648720
129184 187
583
759820
157211 220
30.2%
34.2%
8.1%
4.4%
Consolidated Net Revenue (R$ million)
Domestic Market Foreign Market
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Chrysotile Mineral36.2%
Fiber cement59.0%
NewBusiness
4.8%
Chrysotile Mineral27.4%
Fiber cement56.9%
New Business15.7%
Chrysotile Mineral27.5%
Fiber cement54.0%
New Business18.5%
4Q09
Bathroom Chinaware
Others(*)
4Q10 4Q11
Bathroom ChinawareOthers(*)
Concrete tiles and Accessories
Components Construction Systems
Net Revenue Breakdown
(*) Others: metallic roofing tiles, polyethylene water tanks, lavatory seats, water pipe filters and synthetic marble.
Components Construction Systems
Concrete tiles and Accessories
Mineral Crisotila27.4%
Fibrocimento56.9%
3.2%
9.1%
1.9%
1.5%
Novos Negócios18,5%
Mineral Crisotila27.5%
Fibrocimento54.0%
2.3%
10.9%
4.7%
0.6%
Novos Negócios18,5%
Mineral Crisotila36.2%
Fibrocimento59.0%
2.7%
0.2%
1.9%
Novos Negócios18,5%
Components Construction Systems
Bathroom Chinaware
Others(*)
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Raw material2
27%
Workforce51%
Depreciation5%
Other Costs9%
Energy8%
Raw material3
50%Workforce17%
Depreciation7%
Other Costs21%
Energy5%
Raw material1
62%
Workforce11%
Depreciation4%
Other Costs20%
Energy3%
COGS Breakdown – 4Q11
1 - Cement (46%), Chrysotile Ore (43%) and others (11%)
3 - Cement (53%), sand (31%) and others (16%)
2 – Fuel, explosives, packaging, among others
Fiber Cement Chrysotile Mineral
Concrete Tiles
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2009 2010 2011 4Q09 4Q10 4Q11
123
144 140
30 34 40
17.1% -2.9%
13.0% 17.0%
EBITDA (in R$ million)
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2009 2010 2011 4Q09 4Q10 4Q11
73
10297
17
29 32
39.3%-4.7%
68.6%10.3%
Net Income (in R$ million)
15
42% 43%
39%41%
38%41%
21%19%
17%19%
16%18%
13% 13% 12% 11%14% 15%
2009 2010 2011 4Q09 4Q10 4Q11
Margins
Net MarginEBITDA MarginGross Margin
Capital Expenditures
17
2009 2010 2011 4Q09 4Q10 4Q11
2127 24
7 113
1 26 13
4
34
8
11
2
14
25
5
29
93
46
713 12
34
14
Investiments Acquisition Tégula
Capacity Increase – EternitMolds and New Business
Synthetic Marble
Capital Expenditures (in R$ million)
AdministrativeLand acquisition – Ceará State
Capacity Increase – Tégula
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Development unit of Synthetic Marble
External Area Production Line Resin Silo
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Acquisition of Land for Multiproduct Plant - Ceará State
Land of 400 000 m²
35 km15 km
Linha Gás Natural
Cimenteira
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Expected occupation of the area – Multi-Product Plant
FIBERCEMENT
EXPANSION
BATHROOM CHINAWARE
CONCRETE/OTHERS
PATIO
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Share of 40%Knowledge of manufacturing
and products technologyLow cost production
Expertise in new product development
Expertise in new market development
Share of 60%Knowledge of the local market
Strong distribution networkEfficient logisticsBrand strength
Investment ResourcesKnowledge in Brazil
Investments: R$ 97 millionCapacity: 1,500,000 pieces per year
Begin building: First half of 2012End building: 18 months
Forecast of Gross Revenue at full capacity: approximately R$ 127 millionStraight Workforce: 330 employees
Multi-Product Unit in the Ceará State - Bathroom Chinaware Plant
Joint-Venture: Companhia Sulamericana de Cerâmica S. A.
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Artistic vision and Lay-out Bathroom Chinaware Plant
Capital Markets
24
62.42%4.11%
7.45%
26.02%
Ownership Structure – Feb/12
Shareholding Structure Feb/12
Geração L. Par. F. I. A. 17.52%
Luiz Barsi Filho 13.46%
Victor Adler + VIC DTVM 8.50%
Management 1.55%
Other Board of Directors 0.07%
Treasurystock 0.03%
FREE-FLOAT 76.51%
Individual Investors
Corporations Investors Abroad Clubs. Funds and Foundations
Consultive CouncilMember
Since
Guilherme Affonso Ferreira 2011Mário Fleck 2011
Board of DirectorsMember
Since
Sérgio Alexandre Melleiro (*) 1993Lírio Albino Parisotto (*) 2004
Victor Adler (*) 2005Élio A. Martins 2007
Luiz Barsi Filho (*) 2008Marcelo Munhoz Auricchio (*) 2011
Luis Terepins (*) 2011(*) Independent member
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2009 2010 2011 2012*
1,108975
794
1,074
2009 2010 2011 2012(*)
6,6155,910
6,6337,064
(*) Until February 2012
Ownership Structure
Number of shareholders
Average Traded Volume (R$ thousand)
26
2009 2010 2011
73.1
102.197.2
55.3
80.571.6
2009 2010 2011 2012(*)
15.1%
9.3%
7.5%
2.2%
(*) Until March 2012
Shareholder Remuneration
Net Income X Shareholders
Remuneration (R$ million)
Dividend Yield
Net Income Dividends and Interest on own capital
27
40
60
80
100
120
140
160
180
200
220ETER3
IBOVESPA
Eternit’s Shares Performance (Dec/06 – Feb/12)
Between 12/28/2006 to 2/29/2012, Eternit’s shares appreciated 53.0% and IBOVESPA appreciated 50.2%.
In the same period, including the payment of dividends and interest on own capital, Eternit’s shares appreciated 148.8%.
66,809
R$ 9.26
News
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Opening of Showroom
Come Visit UsAv. Reboucas, 2175 – São Paulo / SP
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Metallic Fittings
Showers
Release Bathroom Metal Fittings
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New Investor Relations website
In line with technological tendencies, on
February, Eternit launched its new Investor
Relations website. The new version will
provide to shareholders, investors and
research analysts an easier access and better
navigability to information on the Company.
Access:
www.eternit.com.br/ir
Outlook
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Favorable Moment for Civil Construction
34
151 180 200 240 260 300 350 380 415 465 510 545 622
120 129 159 165 172 183 182 215 240 228 265 277 286
79.1%71.4%
79.4%68.7% 66.2% 61.1%
52.0% 56.5% 57.7%49.1% 52.0% 50.9% 45.9%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Jan-12
2005 2006 2007 2008 2009 2010 2011 2012
300350
380415
465510
545
622CAGR: 11.0% CAGR: 5.96%
Economic Figures
Minimum Wage (R$) Workforce (R$ million)
Source: BACEN
Food Basic Basket SP x Minimum Wage (purchasing power)
%Minimum Wage (R$) Food Basic Basket in SP (R$)Source: IBGE and DIEESE
303,028 321,163 338,501365,331 377,361
404,751
2005 2006 2007 2008 2009 UDM 2010*
Source: IBGE * 2010 UDM from dec/09 to nov/10
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300 301 303 305 306 307 310 316 319 323 326 328 331
18.2% 17.4% 17.1% 17.3% 16.6% 15.7% 14.7% 14.0% 13.9% 13.5% 12.9%11.6%
10.2%
dec/10 jan/11 feb/11 mar/11 apr/11 may/11 jun/11 jul/11 aug/11 sep/11 oct/11 nov/11 dec/11
Dec/ 03 Dec/ 04 Dec/ 05 Dec/ 06 Dec/ 07 Dec/ 08 Dec/ 09 Dec/ 10 Dec/ 11
10.9%
9.6%
8.3% 8.4%7.4%
6.8% 6.8%
5.3%4.7%
936
1,2271,410
1,548 1,614 1,679 1,715 1,754 1,806 1,8571,934 1,984
Source: BACEN Source: IBGE
Credit Availability Unemployment Rate - BrazilGovernment, Industry, Housing, Rural, Commerce,
Credit Individuals (R$ billlion)
Economic Figures
Growth of the Brazilian Savings
R$ billlion (%) Chg YoYSource: BACEN
36
Housing Deficit - million units
Housing DeficitTotal – 5.8 million
Permanent HomesTotal – 57.3 million
NeedSome kind of
renovation or expansion
77% Permanent Homes in Brazil
44 million homes
Source: ANAMACO
Chrysotile – The Brazilian Mineral
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Chrysotile – The Brazilian Ore
The use of Chrysotile ore in Brazil is regulated by the Federal Law 9,055/95, by Decree 2,350/97 and by regulatory standards for occupational health and safety. It is also provided in the Convention 162 of the International Labor Organization (OIT).
Serpentinite rock with Chrysotile Ore fibers
White Ore
Bends and silky fibers without tip
Biopersistence*: 2.5 days
*Biopersistence: Time that a inhaled particle remains in the lungs before being eliminated by the body’s defense mechanisms. To cause lung damage, the fiber must have penetration and durability capacities in the alveoli.
High Concentration of Magnesium:3MgOSiO2H2O
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Brazil concludes important research about chrysotile ore risks
Project Asbesto Ambiental“Ambiental Exposition to Asbesto: Evaluation of Risk and Effects in
Health”Process CNPq n. 420001/2006-9
The results of the research were announced on November 25 2010 and demonstrates that:
Among the householders surveyed, no clinical, respiratory functional and high resolution tomographic alterations were found that could be attributed to atmospheric asbestos fiber inhalation.
In the occupational assessment, no new alterations were identified or progression in pleural and interstitial deterioration of individuals in the sample Group exposed after 1980 and who underwent High Resolution Computed Tomography scans in the two studies.
The full version of this research can be found in www.sectec.go.gov.br.
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Material FactClarifications From the Brazilian Eternit Group
The Brazilian Eternit Group, in view of recent news regarding the trial held at the Court of Justice in Turin, Italy, in which two ex-board members of Eternit Italy were held responsible for deaths resulting from the use of asbestos in its plants, wishes to publicly clarify that:
Eternit S.A. is a locally-owned, publicly traded company listed in the New Market, which is the highest level of Corporate Governance at the Sao Paulo State Stock, Commodities and Futures Exchange (BM&FBOVESPA), and bears no relation to Eternit in other countries, including Italy. The ownership and use of the trademark are exercised in distinct manners by different companies in several countries.
In Brazil Eternit employs chrysotile asbestos as a reinforcement fiber in the manufacturing of asbestos-cement roofing sheets and tiles using modern production techniques. The Italian company employed various types of asbestos, especially the amphibole variety, in several applications and without protection for the workers.
The activity in Brazil is regulated by Federal Law 9.055/95, Decree 2.350/97 and Regulatory Norms issued by the Ministry of Labor and Employment. These regulate the extraction, industrialization, sale and transportation of chrysotile asbestos and products which contain it, providing the Brazilian population with durable, high quality and excellent cost-benefit products; in this manner contributing to reduce the Brazilian housing deficit.
Market competition in the cement-asbestos segment, between Eternit S.A. and a French group that also is active in Brazil in the manufacturing and use of synthetic fibers, has led some Brazilian states, especially where the plants are located, to approve anti-asbestos legislation. It is worth mentioning that the validity of these laws awaits a merit decision on the part of the Supreme Federal Court.
The extraction and processing of chrysotile asbestos by controlled entity SAMA and the use of the mineral in Eternit's plants are subject to strict security standards that surpass legal requirements. With the improvement in production techniques and the perfection of work safety mechanisms, no accounts of disease related to the use of chrysotile asbestos have been reported among company employees who joined the group since the 1980's. A three-way agreement signed and in place since 1989, between the companies in the chain of production, workers and labor union entities and registered at the Ministry of Labor and Employment, has been instrumental and decisive in consolidating this achievement.
The use of asbestos-cement, water tank and roofing tile products containing chrysotile asbestos does not present risks to the population's health. There are no reports in Brazil of a single case of a resident who developed any disease as a result of inhabiting one of the more than 25 million residences covered by cement-asbestos roofing tiles containing asbestos. This fact is corroborated by a nationwide survey conducted by a renowned medical team linked to the main Brazilian universities, the project and final report for which were approved by the National Council for Scientific and Technological Development - CNPq, and which is available at the site http://www.sectec.go.gov.br/portal.
The Eternit Group operates under full transparency and maintains an "Open Doors Program" that has already received more than 50 thousand visitors to its plants and which grants access to any person who wishes to know more about the safe processes employed in mining and producing products that contain chrysotile asbestos.
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Information
Este material foi produzido com papeis certificados FSC (Forest Stewardship Council), que é uma garantia de que a matéria-prima advém de uma floresta manejada de forma ecologicamente correta, socialmente e economicamente viável.
www.blogdaeternit.com.br
www.eternit.com.br/ir
Élio A. [email protected]
Paula Dell Agnolo [email protected]
Frederico Gomes [email protected]
Rodrigo Lopes da [email protected]
Phone: (55-11) 3038-3818
(55-11) 3194-3881
(55-11) 3194-3872 @Eternit_RI
Rua Dr. Fernandes Coelho, 85 – 8th floor
Pinheiros – São Paulo / SP
05423-040
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Eternit starts a new cycle
Welcome to the next
70 years
