Post on 09-Jun-2015
Meeting APIMEC-SP | 4Q11
2
“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 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% of Market Share
The world's 3rd largest – 15% of
Market Share
Leader in concrete tiles –35% of Market
Share 5th largest of Brazil in sanitary wares
Capacity 1 million tons 300 thousand tons 8 million m²
Capacity Used (2011) Around 85% 100% Around 70%
The largest and most diversified roof coverings industry in Brazil
4
1) Anápolis/GO; 2) Colombo/PR; 3) Goiânia/GO; 4) Rio de Janeiro/RJ; 5) Simões Filho/BA; 6) Porto Alegre/RS and 7) São Paulo/SP.
Plants Location – Fiber cement and Crhysotile Mining
Commercial Branches
5
Showroom Location
Come visit us Rebouças Avenue, 2175 – São Paulo / SP
6
Plants Location – Concrete tiles
7
Supply Chain of Fiber Cement
8
Diversified Portfolio – Fiber Cement Tiles
9
Diversified Portfolio – Metallic Fittings
10
Diversified Portfolio - Components for constructions systems
11
Diversified Portfolio – Water tanks and filters
12
Diversified Portfolio – Bathroom chinaware and lavatory seats
13
Diversified Portfolio – Bathroom Metal Fittings
14
Diversified Portfolio – Synthetic Marble
15
Diversified Portfolio – Concrete Tiles
16
Diversified Portfolio – Full Roofing Solutions
SAMA - Overview
18
Global Market – Chrysotile Mineral
Global Consumption (MM of Ton)
Canada 4%
Russia – 50%
Kazakhstan – 11%
China – 20%
Brazil 15%
2011
2.2
2008
2.4
2007
2.4
2006
2.3
2005
2.3
2004
2.1
2009
2.1
2010
2.2
19
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
Eternit and Tégula - Overview
21
Residential Market Industrial and Commercial Market
Total Market Market Evolution (MM m2)
Metallic 12%
Ceramics 35%
Fiber cement 47%
Others 2%
Fiber cement 38%
Metallic 40%
Others 11%
Ceramics 11%
Concrete 4% Ceramics
45%
Fiber cement 51%
Concrete 4%
Covering market – Brazil (2011)
2005 2006 2007 2008 2009 2010 2011
406 425 459505 495
534 5618% 5%
10% -2% 8% 5%
22
Structure of the Industrial Park in 2011
Brazilian Fiber Cement
Market ETERNIT
Installed Capacity (tons / year) Approximately 2,820,000 1,000,000
Capacity utilization Around 86% Around 85%
Consumption (ton / year) 2,434,000 859,300
Companies 11 32% Market Share
Plants 19 5
Selling Points 39,000 15,000
23
Structure of the Industrial Park in 2011
Brazilian concrete roofing market TÉGULA
Installed Capacity (m² / year) Approximately 24.0 million 8.0 million
Capacity utilization Around 70% Around 70%
Consumption (m² / year) 16.9 million 5.9 million
Companies 130
35% Market Share
Plants 6
24
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)
25
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 477 thousand m2 doesn’t refer to Eternit.
Economic and Financial Performance
27
2009 2010 2011 4Q09 4Q10 4Q11
130 111 10028 27 33
453
648 720
129 184 187
583
759820
157211 220
30.2%
34.2%
8.1%
4.4%
Consolidated Net Revenue (R$ million)
Domestic Market Foreign Market
28
3.2%
2.5%
2.6%
10.9%
3.7%
1.2%
Components Construction Systems
Net Revenue Breakdown (R$ million)
2007
Bathroom Chinaware
Concrete tiles and Accessories
2011
Others(*)
Components Construction Systems
Others(*)
(*) Others: metallic roofing tiles, polyethylene water tanks, lavatory seats, water pipe filters and synthetic marble.
Chrysotile Mineral26.2%
Fiber cement55.4%
New Business18.4%
Chrysotile Mineral35.0%
Fiber cement59.3%
New Business
5.7%
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Raw material2
27%
Workforce51%
Depreciation5%
Other Costs9%
Energy8%
Raw material350%Workforce
17%Depreciation
7%
Other Costs21%
Energy5%
Raw material162%
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)
31
2009 2010 2011 4Q09 4Q10 4Q11
73
10297
17
29 32
39.3% -4.7%
68.6% 10.3%
Net Income (in R$ million)
32
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 Margin EBITDA Margin Gross Margin
Capital Expenditures
34
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 – Eternit Molds and New Business
Synthetic Marble
Capital Expenditures (in R$ million)
Administrative Land acquisition – Ceará State
Capacity Increase – Tégula
35
Development unit of Synthetic Marble
Production Line Resin Silo Synthetic Marble
Products
36
Location of Multiproduct Plant - Ceará State
Land of 400 000 m²
35 km 15 km
Linha Gás Natural
Cimenteira
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Artistic vision and Lay-out Bathroom Chinaware Plant
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Share of 40% Knowledge of manufacturing and
products technology Low cost production
Expertise in new product development
Expertise in new market development
Share of 60% Knowledge of the local market
Strong distribution network Efficient logistics Brand strength
Investment Resources Knowledge in Brazil
Investments: R$ 97 million Capacity: 1,500,000 pieces per year
Begin building: First half of 2012 End building: 18 months
Forecast of Gross Revenue at full capacity: approximately R$ 127 million Straight Workforce: 330 employees
Multi-Product Unit in the Ceará State - Bathroom Chinaware Plant
Joint-Venture: Companhia Sulamericana de Cerâmica S. A.
Capital Markets
40
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 Council Member Since
Guilherme Affonso Ferreira 2011 Mário Fleck 2011
Board of Directors Member Since
Sérgio Alexandre Melleiro (*) 1993 Lírio Albino Parisotto (*) 2004
Victor Adler (*) 2005 Élio A. Martins 2007
Luiz Barsi Filho (*) 2008 Marcelo Munhoz Auricchio (*) 2011
Luis Terepins (*) 2011 (*) Independent member
41
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)
42
2009 2010 2011
73.1
102.1 97.2
55.3
80.571.6
2009 2010 2011 2012(*)
15.1%
9.3%
7.5%
2.2%
(*) Until March 2012
Policy of Remuneration
Net Income X Distributed Earnings (R$ million)
Dividend Yield
Net Income Dividends and Interest on own capital
76 % 79 % 74% Pay Out
43
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
44
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
46
Favorable Moment for Civil Construction
47
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
303,028 321,163 338,501 365,331 377,361
404,751
2005 2006 2007 2008 2009 UDM 2010* Source: IBGE * 2010 UDM from dec/09 to nov/10
48
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 1,857 1,934 1,984
Source: BACEN Source: IBGE
Credit Availability Unemployment Rate - Brazil Government, Industry, Housing, Rural, Commerce, Credit
Individuals (R$ billlion)
Economic Figures
Growth of the Brazilian Savings
R$ billlion (%) Chg YoY Source: BACEN
Residences – Perception of Demand
50
Residences – Perception of Demand
Permanent Households – 57.8 million
Housing Deficit – 5,5 million
Source: ANAMACO (National Association of Construction Material Traders) / Study by the João Pinheiro Foundation, official statistics body for the state of
Minas Gerais, is a public institution under the State Planning and Management Department / Abecip (Brazilian Association of Real Estate and Savings Entities) –
2nd Abecip Seminar – Real Estate Panorama: Opportunities and Challenges.
Requiring some type of home
maintenance or expansion
77%
Permanent Households in Brazil
44.5 million residences
• The FGV study shows that between 2010 and 2022, the number of homes will grow in Brazil by an average of 1.9 million/year;
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Geographic Region Up to Three
Three toFive
Five toTen
More thanTen
RegionalHousing
Deficit
North 492 43 17 3 555
Northeast 1,861 55 23 8 1,947
Southeast 1,791 178 65 12 2,046
South 484 66 26 4 581
Midwest 375 22 14 6 417
TotalApproximateHousingDeficit
5,003 364 146 33 5,546
In 2008, the estimated housing deficit was 5.5 million units, the majority concentrated in the C and D classes.
Housing Deficit by Family Income by Minimum Wages (in thousands of units)
Source: Study by the João Pinheiro Foundation, official statistics body for the state of
Minas Gerais, is a public institution under the State Planning and Management Department .
52
5.08.2
-6.3
11.6
3.6 4.85.4 5.1
-0.2
7.5
2.7 3.5
8.6
37.1
16.818.3
2007 2008 2009 2010 2011 2012(E)
GDP Construction (%) GDP Brazil (%) Eternit
106
78
48
34 30
1813 11
4.7
Netherland USA Germany South Africa
Malaysia Chile Mexico China Brazil
Indicators Brazilian GDP x Civil Construction GDP x Eternit
Gross Consolidated Revenue Home Mortgage Credit as % of GDP
Source: ABECIP, BACEN and FEBRABAN (Brazilian Banks Federation).
• In Brazil, home mortgage credit reached 4.7% of GDP in 2011 and should reach 11% in 2014.
Source: Abecip (Brazilian Association of Real Estate and Savings Entities) – 2nd Abecip Seminar – Real Estate Panorama: Opportunities and Challenges.
(E) Estimate
Source: BACEN. Growth in Eternit’s consolidated gross revenue was deflated by the IGP-M.
53
A B C D/E
7% 4% 1% 1%
93% 96% 99% 99%
Construction via Builder Self- Managed Construction
900 2,600 3,100 2,100
A B C D/E
26%12%
5% 4%
74%88%
95% 96%
Construction via Builder Self- Managed Construction
70 110 260 670
Expansion and maintenance of Residential Units (thousands of units)
Residences – Management Model New Residential Edifices
(thousands of units)
Source: ANAMACO (National Association of Construction Material Traders ) – Sample survey by ANAMACO – Data for sector 2010
54
Self-management 27%
Builder/ Contractor
2%
Bricklayer/Works Foreman/Engineer
71%
Self-management 34%
Builder/Contractor
1%
Bricklayer/Works Foreman/Engineer
65%
4,5% 2,0% 1,5%
52.7%
41.4% 37.1%
42.5%56.4% 61.0%
0.3% 0.2% 0.4%
AB C DE Home Center Specialized Store
Neighborhood Store Hyper-/Supermarkets
Consumer Profile Where do they make their purchases?
Source: ANAMACO (National Association of Construction Material Traders) – Sample survey by ANAMACO/Latin Panel on the Conditions of the Homes - 2007
With home maintenance – who decides the purchase?
With building – who decides the purchase?
55
23%
38% 39%
24%
36%40%
32%
34%34%
AB C DE
Professional (bricklayer or engineer)
Store salesperson
Decision by the interested party himself or a member of the family
Consumer Profile
Source: ANAMACO (National Association of Construction Material Traders) – Sample survey by ANAMACO/Latin Panel on the Conditions of the Homes - 2007
Responsible for the Choice of Brand
Chrysotile – The Brazilian Mineral
57
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
58
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 Fact Clarifications 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.
Corporate and Environmental Management
61
Corporate Management
Launch ................... November 2004
Purpose .................
Contribute to society’s better understanding of the mining and processing of Chrysotile Ore and the manufacture of fiber cement products in a sustainable manner.
Location ........... Five production plants of Eternit and the SAMA mining company
Visitors ............... More than 50,000 until February 2012
Target ................... All society
Open Doors Program
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Environment Focused Management
Quelônios Project - Animal Conservation Area
The only breeding program of Amazon turtles in Brazil and Reintegration of Wild Animal Nature in partnership with IBAMA
Zero Reject Monitoring Air Quality Water Reuse Reforestation Work
Seedling Nursery
63
Social Actions
64
Governance
Case of Success
Dividends Growth
Diversification
Eternit – An option for investment
ADR - Level I
ETNTY
65
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. Martins elio.martins@eternit.com.br
Paula Dell Agnolo Barhum paula.barhum@eternit.com.br
Frederico Gomes Amaral frederico.amaral@eternit.com.br
Rodrigo Lopes da Luz rodrigo.luz@eternit.com.br
Phone: (55-11) 3038-3818
(55-11) 3194-3881
(55-11) 3194-3872 @Eternit_RI
Dr. Fernandes Coelho Street, 85 – 8th floor
Pinheiros – São Paulo / SP
05423-040
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Eternit starts a new cycle
Welcome to the next
70 years
ETERNIT S.A.