duratex - 3rd quarter 2003
DESCRIPTION
Presentation - 3rd Quarter 2003TRANSCRIPT
www.duratex.com.br
3rd Quarter of 2003
Duratex S.A.Duratex S.A.
Public company traded, in stock market (BOVESPA), since 1951Number of shares outstanding as of September 30th:
Common: 4.412.058.957Preferred: 7.370.658.030
Preferred Shareholders´ Structure as of September 30th :
Itaúsa23,1%
Pension Funds23,5%
Fore ign Investors
22,6%
Others25,1%
Teasury5,7%
20022002
Itaúsa24,4%
Pension Funds23,7%
Fore ign Investors
25,9%
Others23,8%
Treasury2,2%
20032003
Capital Markets
Transparency Transparency & & CommunicationCommunication
5th ABRASCA Prize - Best Annual Report 2002
Duratex was awarded 2nd place
80% tag-along rights to the preferred stock
Field trips to industrial units, one-on-one meetings, local
and international Road Show - 350 investors/analysts
www.duratex.com.br - Investors Relation website received
72.000 accesses during 2003, 36% more than during 2002
Preferred Stock Performance
From January to October 2003, Duratex stock was traded on every working day, presenting na appreciation of 38,5%
3rd Quarter 03 1.454 1.609.800 99.159 1.502,0
2nd Quarter 03 817 690.300 40.577 662,7
1st Quarter 03 675 614.400 31.947 525,7
4th Quarter 02 739 806.100 35.442 547,0
3rd Quarter 02 543 756.600 30.051 458,0
Var. 3Q03 - 3Q02 % 167,8% 112,8% 230,0% 227,9%
Deals Shares Traded (1,000)
Traded Volume (R$ 1,000)
Daily Average Volume(R$ 1,000)
Duratex´s Preferred Stock Performance
Duratex PN X Stock Indexes100 Base: from 11/06/2002 to 11/06/2003
Duratex PN X Stock Indexes100 Base: from 11/06/2002 to 11/06/2003
62,9%62,9%
91,8%91,8%
68,2%68,2%
81,2%81,2%
80
100
120
140
160
180
200
nov-
02de
c-02
jan-0
3feb
-03
mar-03
apr-0
3may
-03
jun-0
3jul
-03
aug-
03se
p-03
oct-0
3no
v-03
DURATEX IBOVESPA IBX FGV 100
Business Segments
HardboardHardboardParticle BoardParticle BoardMDF/HDF/SDFMDF/HDF/SDFLaminate FlooringLaminate FlooringCeiling & Wall Paneling
Metal FittingsMetal FittingsVitreous ChinaVitreous ChinaAccessoriesAccessories
Ceiling & Wall Paneling
Capex (US$ M)
44,6
113,2
59,3
75,9
36,0
63,9
121,1
94,5
54,4
1995 1996 1997 1998 1999 2000 2001 2002 2003** Jan to Sep/2003
Total CAPEX from 1995 to sep 2003: ~ US$660M2003: expected CAPEX for the whole year: US$55M
Total Debt & Amortization Schedule (R$ M)
FOREIGN 29,5 - 101,2 45,6 176,3
DOMESTIC 152,3 75,6 - - 227,9
TOTAL 181,8 75,6 101,2 45,6 404,2
TOTALBNDES & FINAME DEBENTURE IFC TRADE FINANCE
115,2227,8
176,4
64,5
108,9
55,160,4
Debt 2003 2004 2005 2006 2007 &Beyond
404,2
Foreign Currency
100% hedge
Domestic Currency
Average debt cost: 81% of CDI
Capex - Objectives
Improve the Selling Mix & Release New
Products
Leadership
Capacity Growth Technology Update Competitiviness
Improve Revenues with Cost Reduction
Economies of Scale
Productivity Gains
Improve Profitability / Appreciate Stock Prices
Capex - Highlight
MDF / HDF / SDFMDF / HDF / SDF
Location: Botucatu/SPTotal Invested: US$86MProduction Capacity: 400.000 m³/yearImprove scaleLeadership within MDF & HDF productionDifferentiated technology that allows the
fabrication of SDF panels Strategicaly locatedRamp-up:
feb/03 mar/03 apr/03 may/03 jun/03 jul/03 aug/03 sep/03 oct/03 nov/03 *
PRODUCTION (m³) - 5.825 9.218 9.471 11.249 12.122 8.943 17.723 17.789 20.000
* Company Estimates
Capex – Capacity Expansion
1995 1996 1997 1998 1999 2000 2001 2002 2003
Hardboard 1 360 360 360 360 360 360 360 360 360
Particle Board 1 320 320 320 320 320 320 340 360 500
MDF/HDF/SDF 1 - - 180 180 180 200 220 240 640
Laminate Flooring 2 - - - 6.000 6.000 6.000 6.000 6.000 6.000
Metal Fittings 3 7.800 8.400 9.000 9.600 10.800 12.000 13.200 14.400 14.400
Vitreous China 3 1.860 1.860 2.160 2.340 2.400 2.580 3.300 3.300 3.180
1 in m³2 in m23 in 1.000 pieces
Today´s Capacity: 3.180 thousand pieces/year
2004: capacity increase by 960 thousand
pieces/year from the 2nd half year on
Industrial Capacity & Level of Utilization (9 months of 2003)
80,0%
92,0%
88,6%
82,9%
94,7%
Vitreous China
Metal Fittings
MDF
Particle Board
Hardboard
640.000 m3/year640.000 m3/year
265.000 pieces/year265.000
pieces/year
500.000 m3/year500.000 m3/year
360.000 m3/year360.000 m3/year
1,2 M pieces/year
1,2 M pieces/year
MDF/HDF: 400.000 m3
24,8% occupation in 2003
AGI Last Phase:140.000 m3
Main Competitors
HardboardEucatex
Particle BoardBerneckEucatexPlacas do ParanáSatipelTafisa
MDF/HDFMasisaPlacas do ParanáTafisa
Laminate FlooringEucatexTafisa
Metal FittingsDocolFabrimar
Vitreous ChinaElizabethIcasaIdeal StandardHervyRoca (Group ICL)
Strategic Positioning
Wood DivisionWood Division –– ProductProduct RangeRange
SDF Laminate Flooring Wall Paneling
Raw Painted Raw LP FF Raw LP FF
Duratex
Berneck
Eucatex
Masisa
Pl. do Paraná
Satipel
Tafisa
Hardboard Particle Board MDF/HDF
Strategic Positioning
TimberlandTimberlandTimberland holdings: 83.000 ha of pinus and eucalyptus treesSelf-sustained, fully automated harvesting process and certified
areas by ISO 14.001 and Green LabelAverage distance from timberland to industrial units: 50 km80% self-sufficiency in wood supply as the competitors’ average is
around 48%
Strategic Positioning
Deca DivisionDeca Division –– ProductProduct RangeRange
Product line in Metal Fittings: 6.000 itemsProduct line in Vitreous China: 260 itemsBroad selling mix including from the most standard to the
higher end productsBroad water saving product line
New Products Released
From January to September 2003:
Wood Division: 66 new products
Deca Division: 28 products
1998 12 2 8 41 19
1999 17 6 1 32 20
2000 8 4 16 17 5
2001 33 18 14 15 30
2002 16 24 41 53 32
sep/03 10 14 42 21 7
Total 96 68 122 179 113
Vitreous ChinaHardboard Particle Board MDF/DurafloorDurawall
Metal Fittings
Strategic Positioning
Shutting DownShutting Down of Gravataof Gravataíí/RS/RS´́s s ParticleParticle BoardBoard PlantPlantCapacity: 140.000 m3/year
There will be no impact on revenues
Objectives:
cost reduction by R$10 M year;
concentrate the production closer to Sao Paulo’s consuming
centers;
Shutting DownShutting Down of Jundiaof Jundiaíí/SP/SP´́s s VitreuosVitreuos China China UnitUnit IICapacity: 600.000 pieces/year
There will be no impact on revenues
Objectives:
cost reduction by R$4,0 M year;
efficiency gains by concentrating the production of Unit I in Unit II
located also in Jundiaí
Wood Division – Shipments from Jan to Oct/2003 (in m³)
60.000
65.000
70.000
75.000
80.000
85.000
90.000
95.000
100.000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Estimated
Deca Division – Shipments from Jan to Oct/2003 (1.000 pieces)
800
900
1.000
1.100
1.200
1.300
1.400
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Estimated
Distribution Channel
Revenda80%
Construtoras4%
Atacadistas6%
B2B + Te lemktg
6%
Demais4%
Móve is64%
Revenda20%
Construção Civil7%Demais
9%
Constructors 4%
Wholesale 6%
Others 4%
Civil Construction 7%
Others 9%
Retail 20%
Retail 80%
Furniture Making 64%
Net Revenues Breakdown (9 months)
Wood Division: 66% Deca Division: 34%
Hardboard34%
Particle Board12%
MDF13%
Laminate Flooring
7%
Metal Fittings
24%
Vitreous China10%
2003 2002
Wood Division: 65% Deca Division: 35%
Hardboard33%
Particle Board14%
MDF11%
Laminate Flooring
7%
Metal Fittings
25%
Vitreous China10%
Exports (9 months)
20032003 20022002
United States48%
Europe24%
South & Central America
15%Others
13%
United States59%
Europe19%
South & Central America
13%
Others9%
US$ 31,2MUS$ 33,6 M + 7,7%+ 7,7%
Exports – Strategic Positioning
Furniture ExportsFurniture Exports ––
Showroom (Jundiaí/SP) Area:
Today: 600m2
At the end of November/2003: 2.000m2
Active clients: 7 (Holand, Mexico and South Africa)
Product line: 400 itens
Vitreous Vitreous China China ExportsExports
Development of 30 new products specially featured to the North
American market
Establishing storage infrastructure in the US
Participation in fairs during 2004 (Kitchen & Bath in Chicago)
Consolidated Income Statement (R$ 1.000)
9m2003 VA% 9m2002 VA% HA%
NET REVENUES 710.420 100% 618.679 100% 15%COGS (409.773) 58% (342.658) 55%Depreciation/Amort./Depletion (41.610) (41.775)
GROSS PROFIT 259.037 36% 234.246 38% 11%Selling Expenses (99.334) (78.926)Provisions for Doubtful Payments (3.917) (1.863)General & Administrative Expenses (31.748) (29.913)Lay-off Provisions (5.717) (8.643)Other Operating Results (2.741) (7.541)
INCOME BEFORE FINANCIAL RESULTS 115.580 16% 107.360 17% 8%Net Financial Result (38.234) (20.081)Taxes on Financial Operations (8.595) (8.223)
OPERATING INCOME 68.751 10% 79.056 13% -13%Non Operating Income 2.214 4.205
INCOME BEFORE TAXES 70.965 10% 83.261 13% -15%Income Tax & Social Contribution (23.208) (22.879)Statutory Participation (6.012) (8.072)Minority Participation (181) (436)
NET INCOME 41.564 6% 51.874 8% -20%
Consolidated Financial Summary (R$ M)
3Q03 2Q03 1Q03 4Q02 3Q02Net Revenues 264,4 225,3 220,8 248,2 236,4
COGS Net of Depr/Amort/Depl. 152,3 134,6 122,8 143,4 130,1
Gross Margin Net of Depr/Amort/Depl. 42,4% 40,3% 44,4% 42,2% 45,0%
Depreciation/Amortization/Deple tion 13,3 14,2 14,1 14,3 14,6
Gross Profit 98,8 76,4 83,9 90,6 91,6
Gross Margin 37,4% 33,9% 38,0% 36,5% 38,7%
Operating Result 47,3 28,0 40,3 45,5 42,7
EBITDA 61,3 43,0 55,1 60,5 58,0
EBITDA Margin 23,2% 19,1% 25,0% 24,4% 24,5%
Net Income 13,4 7,6 20,5 19,8 24,8
ROE (annualized) 5,9% 3,4% 9,3% 9,0% 11,5%
Financial Performance per Division (9 months of 2003 in R$ M)
(R$M) VA% (R$M) VA% (R$M) VA%
Net Revenues 466,7 100% 243,7 100% 710,4 100%
COGS (264,5) 57% (145,3) 60% (409,8) 58%
Depr/Amort/Depl. (27,3) 6% (14,3) 6% (41,6) 6%
Gross Profit 174,9 37% 84,1 35% 259,0 36%
EBITDA 9m2003 118,9 25% 40,6 17% 159,5 22%
EBITDA 9m2002 117,6 29% 32,3 15% 149,9 24%
WOOD DIVISION DECA DIVISION CONSOLIDATED
Consolidated Operating Cash Flow Statement (R$ 1.000)
9m2003 9m2002
NET INCOME 41.564 51.874Depreciation/Amortization/Depletion 43.923 42.517Interest / FX Variation (Accrual) 231 109.565Provisions / Write-Offs 16.523 11.541
SUB-TOTAL 102.241 215.497Investments in Working Capital (56.762) 14.940
OPERATING CASH FLOW 45.479 230.437
Wood Division – Cost Breakdown
Hardboard Particle Board MDFRaw Material 32% 59% 62%Work Force 25% 11% 12%Wood 19% 13% 9%Depreciation 4% 7% 8%Electric Power 11% 5% 7%Fuel 9% 5% 2%
Total 100% 100% 100%
Deca Division – Cost Breakdown
Vitreous China Metal FittingsRaw Material & Others 37% 54%Work Force 40% 35%Electric Power 4% 3%Depreciation 9% 7%Fuel 10% 1%Total 100% 100%
Performance
ShipmentsShipments
( in 1.000 m3 ) 652,6651,5617,8
881,2823,6812,1
2000 2001 2002 9m01 9m02 9m03
( in million pieces )
9,810,410,4
14,513,6
12,3
2000 2001 2002 9m01 9m02 9m03
Performance
CAGR: 7,9 %CAGR: 7,9 %
744,6
592,6
710,4618,7
866,9785,3
2000 2001 2002 9m01 9m02 9m03
CAGR: 9,5 %CAGR: 9,5 %
Net Net RevenuesRevenues (R$ M)
Performance
EBITDA EBITDA (R$ M) & & MarginMargin (%)
22,4%
26,8%23,9% 24,4%
23,2% 24,2%
2000 2001 2002 9m01 9m02 9m03
199,4187,5
210,4
137,2149,9
159,5
CAGR: 2,7 %CAGR: 2,7 % CAGR: 7,8 %CAGR: 7,8 %
Performance - Quarterly
EBITDA EBITDA (R$ M) & MarginMargin (%)
35,4 35,5
46,7 46,8
42,7
32,3
43,9
24,7%22,0%
30,0%28,9%30,2%26,8%
30,9%
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03
10,2 10,7 11,313,7
12,410,7
17,5
20,1%
13,6%15,8%15,9%
13,8%
15,2%15,8%
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03
Dividends Distribuition (R$ M)
11,611,811,88,9
6,97,57,45,5
4,2
4,15,6
7,3 7,5 8,3
12,611,8 12,8
1995 1996 1997 1998 1999 2000 2001 2002 2003*
Dividends 1st Semester
Dividends 2nd Semester
45,3%45,3%32,3%32,3%148,2%148,2%34,7%34,7%34,6%34,6%31,7%31,7%28,4%28,4% 34,3%34,3%PayPay--OutOut 41,2%41,2%
* 1st Semester
www.duratex.com.br
3rd Quarter of 2003