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Earnings Presentation. 1Q09. Sao Paulo, 05 | 15 | 09. Strengthen of the financing structure of the Company. 1. Quarterly performance. 2. Actions. 3. Segments performance. 4. Acquisitions. 5. Expectations review. 6. Change of accounting rules. 7. Net Revenues and Gross Profit. 8. - PowerPoint PPT Presentation
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Earnings Presentation1Q09
Sao Paulo, 05 | 15 | 09
Earnings Presentation – 1Q09
Agenda1
Quarterly performance
Actions
Segments performanceAcquisitions
Expectations review
2
3
4
5
Change of accounting rules6
Net Revenues and Gross Profit
7
Expenses variation
8
EBITDA
9
Financial result
10
Capital Structure and Liquidity
11
Working Capital
12
13
Strengthen of the financing structure of the Company
Earnings Presentation – 1Q09
Strengthening the debt structure with a new debt profile
Actual Debt StructureActual Debt Structure Future Debt StructureFuture Debt Structure
Actual:
• 1.8 year maturity
• ST limitations
• Uses commercial banking facilities
• Impacts Company’ Cash Flow
Future:
• 5.3 years maturity
• ST flexibility
• Releases commercial banking facilities
• Reduces impacts Company’ Cash Flow, with conversion
Earnings Presentation – 1Q09
83.0
106.0
36.9
31.719.5
13.5
0
20
40
60
80
100
120
140
160
1Q08 1Q09
R$ m
Energy Products Flow Control Metallurgy
28.6
36.8
16.9
13.63.0
0.5
0
10
20
30
40
50
60
1Q08 1Q09
R$ m
Energy Products Flow Control Metallurgy
Quarterly Performance
Net RevenuesNet Revenues Gross Profit and MarginGross Profit and Margin
139.5151.2
+8.4%48.6
51.0+4.9%
34,7%
43,1%
3,7%
34,5%
45,7%
15,6%
Earnings Presentation – 1Q09
Actions
Designation of a Senior Manager to coordinate the negotiations with suppliers
Impacts will be noticed over the coming quarters
Longer cycle to accounts payable
Lower costs
Higher interaction with customers seeking to increase the foreseeable demand;
New initiatives to increase industrial productivity;
adjustments in personnel;
General expenses reduction;
Implementation of coordinated actions involving all the main managers of business units targeting to accelerate synergy gains.
Earnings Presentation – 1Q09
Segments trend
Energy Energy ProductsProducts
Metallurgy
Flow Control
Net revenues trend 1Q09 vs. 1Q08
Energy Products +27.7%
Flow Control -14.2%
Metalurgia -30.9%
Earnings Presentation – 1Q09
Norpatagonica acquisition
Service provider to the Oli & Gas sector with more than 20 years of presence in Neuquen, Argentina
Well strucutured operations to support oil & gas producers in maintaining production.
It will be used as a platform in Argentina to distribute completion tools, coatings, sensors as well as other services.
Earnings Presentation – 1Q09
Expectations Review
Energy Products: The 25% projected growth over 2008 will be a result of the conversation of the Company’s backlog.
Flow Control: The market scenario, mainly in the Argentinean business and the trend for the Brazilian Real to appreciate, will be the main factors to affect 2009 fiscal year.
Metallurgy: Management forecasts businesses improvements and positive developments for the coming quarters of 2009, creating opportunities to recover part of the 1Q09 performance.
Segment % Change over 2008
Energy Products 25%
Flow Control -20%
Metallurgy -20%
Earnings Presentation – 1Q09
Adjustments Law 11,638 – 1Q08
Loss of the quarter ended in March, 31st 2008 (comparative) ConsolidatedBy Law 11,638/07 and MP 449/08 (4,421)Exchange result over investments abroad (1,485)Remuneration based in shares (stock option) 806 Intangible assets write-off 270 Present value adjustment 523 Deferred taxes over adjustments (196)Equity pick-up effect over adjustments - By the accounting rules in place in 2007 (4,503)
Earnings Presentation – 1Q09
83.0
106.0
36.9
31.719.5
13.5
0
20
40
60
80
100
120
140
160
1Q08 1Q09
R$ m
Energy Products Flow Control Metallurgy
28.6
36.8
16.9
13.63.0
0.5
0
10
20
30
40
50
60
1Q08 1Q09
R$ m
Energy Products Flow Control Metallurgy
Net Revenues and Gross Profit
Net RevenuesNet Revenues Gross Profit and MarginGross Profit and Margin
139.5151.2
+8.4%48.6
51.0+4.9%
34.7%
43.1%
3.7%
34.5%
45.7%
15.6%
Earnings Presentation – 1Q09
- -
6.28.1
7.04.9
9.1
2.6
6.53.2
3.2 3.2
2.7
3.4 3.4
1.8
1.4 1.4
1.1
1.2 1.2
0.4
0.5 0.5
1.1-
5
10
15
20
25
30
1Q08 1Q09 Acquisitions Organic
R$ m
Sales - Energy Products Administrative - Energy Products Sales - Flow Control Administrative - Flow Control
Sales - Metalurgia Administratives - Metalurgia Mgt Salary
Expenses
+31.9%
20.4
26.9
+30.0%
+84.1%
-0.5%
+28.7%
-25.5% +6.7%
+43.2%
3.7
23.2
Earnings Presentation – 1Q09
19.921.9
3.1
18.8
12.0 7.97.9
1.4
-0.1 -0.1
-5
0
5
10
15
20
25
30
35
40
1Q08 1Q09 Aquisições Orgânico
R$ m
Energy Products Flow Control Metal lurgy
EBITDA
-11.0%
33.3
29.7 26.6
3.1
Earnings Presentation – 1Q09
Financial Result
0.6
12.3
(18.9)(27.2)
(1.5)
(1.8)(9.9)
(18.7)
1.20.3 2.2
12.6
(60)
(40)
(20)
-
20
40
60
1Q08 1Q09
R$ m
Interest Income Others Exchange variance Interest expense Others Exchange variance
Earnings Presentation – 1Q09
214.7 214.7
280.7
84.526.5
285.2
391.7 405.0
Debt w/ Maturity Maturing 2009 2010 2011 2012+ Liquidity
* Numbers in R$ million* Numbers in R$ million
Short Term
Long Term
Cash
Working Capital
Current Assets
690.2 Debt with
Maturity
606.4
Liquidity
83.8
Capital Structure and Liquidity
Earnings Presentation – 1Q09
Working Capital
716704
673
556
460
387
276251245231219
193179
56.6%55.2%49.9%
45.9%48.6%
50.0%51.8%49.3%48.1%
48.9%
35.2%30.8%
25.6%
-
100
200
300
400
500
600
700
800
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09
R$ m
0%
10%
20%
30%
40%
50%
60%
Net Revenues (LTM) % WC over Net Revenues
Earnings Presentation – 1Q09
IR Contacts
Thiago Alonso de OliveiraCFO & IRO
Cynthia BurinIR Manager
Telephone: +55 (11) 2134-7000/7088
www.lupatech.com.br