1

ResultsTeleconference

2º Quarter/2019

Solutions for better living

Duratex milestones

• Sale of hardboard operation

January

v

• Sale announcement of first tranche of land and forest to Suzano

February

• Itapetininga facility back online

• CADE approves operation to sell land to Suzano

April

• Duratex announces Dissolving Wood Pulp Joint Venture with Austrian firm Lenzing

June

• Sale of second tranche of land and forest to Suzano

• Ceusa expansion approved

July

August

• CADE approves the deal to Exchange assets with Eucatex

November

• Unification of the operation of showers with closure of the electric shower facility in Tubarão/SC

• Industrial action at MDF operations in Botucatu/SP

2018 2019

May

• Debenture issue for the amount of R$1.2bn

• Acquisition of Cecrisa ceramic tiles

• Closure of the sanitary ware facility at São Leopoldo/RS

July

3Q19

• Disbursement relating to the purchase of Cecrisa

• Consolidation of Cecrisa’s results

• Receipt of final instalment of the second Suzano tranche

2

ConsolidatedResults R$ Million

Domestic economy

showing recovery

below expectations,

impacting volumes.

220 213

19.8%18.6%

0.0 %

5.0 %

10. 0%

15. 0%

20. 0%

25. 0%

30. 0%

35. 0%

0

200

400

600

800

1,0 00

1,2 00

2Q18 2Q19

Recurring EBITDA EBITDA Margin

27

69

0

50

100

150

200

250

300

350

400

450

500

2Q18 2Q19

Recurring Net Profit Recurring EBITDA & EBITDA Margin

1,167 1,145

26.6%

31.4%

0.0 %

5.0 %

10. 0%

15. 0%

20. 0%

25. 0%

30. 0%

35. 0%

0

500

1,0 00

1,5 00

2,0 00

2Q18 2Q19

Net Revenue Recurring Gross Margin3

Net profit impacted by

positive variance in

biological assets and a

better financial result.

Net Revenue and Recurring Gross Margin

EBITDA margin impacted due

lower sales volumes and higher

costs.

4

Cash Flow R$ Million

213 *

(62)

(97)

(29)

6

(83)(52)

220

(58)

(116)

(20)(7)

(23)

0

Free Cash Flow2Q19 2Q18

Recurring andAdjusted EBITDA

WorkingCapital

CAPEX** Taxes Financial Flow Free Cash Flow***Others

Working Capital impacted by

higher inventory, readjustment

plan in progress.

Increase in financial

flow, due to the bringing

forward of CP* interest

payment of R$ 55m

**CAPEX does not include the disbursement of the expansion project relating to the Ceramic Tile line*** Free Cash Flow does not include the disbursement of the expansion project relating to the Ceramic Tile line

Disbursement of R$ 47 m,

relating to the expansion of

the Ceramic Tile line.

*Commercial Paper

5

WorkingCapital & Investment R$ Million

66

105

70

101

67

101

61

107

Client PMR (days) Inventory PME (days) Supplier PMP (days) Cash Cycle (days)

Working Capital

2Q19 2Q18

45

97

142

55 61

116

Forestry OPEX Maintenance and Projects Total Capex

Investiment

2Q19 2Q18

Evolution observed in the

cash cycle, with opportunities

for improvements in the

inventory account.

Expansion capacity in the

Ceramic Tile division, raising

CAPEX spending.

Consistent improvement in

the supplier payment lead

times, fruit of a efficient

supply chain management.

461

748

88

711

1,269

2019 2020 2021 2022 2023 +

Gross debt

6

Debt R$ Million

2,041 2,100 1,700

2,010 2,060

3.00x

2.76x

2.00x

2.38x 2.45x

1.0 0x

1.5 0x

2.0 0x

2.5 0x

3.0 0x

3.5 0x

(1 00)

900

1,90 0

2,90 0

3,90 0

4,90 0

2016 2017 2018 1Q19 2Q19

Net debt Net debt/Recurring EBITDA (LTM)

Amortization TimelineFinancial Leverage Debt Profile

2T19

Extension of average debt term

from 2.1 to 3.4 years, a result

anchored by the internal liability

management initiatives.

Issue of Debenture in

May, with capture of R$1,2

bn, at 108% of CDI (base

lending rate) and 7 year

term.

Pre-payment of

Commercial Paper of

R$ 554m.

36%

64%

1

Curto Prazo Longo PrazoShort term Long term

2Q19

7

Wood Division

8

298262

2T18 2T19

Volume Variação

584644

2T18 2T19

Volume Variação

MDP Volume Internal Market

Total Volume of wood painelsInternal Market

Sector Environment– IBÁ Data

+6% +10% +3%

893 921

2T18 2T19

Volume Variação

Thousands of m³

-12%

1477 1565

2T18 2T19

Volume Variação

Market showing a slight recovery in 2Q19.

Growth of wood painel volume shipped, 3% up on the same period last year.

Domestic Market led this growth with an increase of 6%, while exports fell 12%.

Total Volume of wood painelsExternal Market

MDF Volume Internal Market

2Q19 2Q19 2Q19 2Q192Q18 2Q18 2Q18 2Q18

Variation Variation Variation Variation

650 700

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

-320

180

680

1,1 80

1,6 80

2,1 80

2Q18 2Q19

Wood Gross Margin

9

Headlines-Wood R$ Milhões

586 606

-

500

1,00 0

1,50 0

2,00 0

2Q18 2Q19

Wood Variation

Volume (‘000 m³) Net Revenue & Gross Margin(Proforma)

157 140

2Q18 2Q19

Wood EBITDA Margin

Recurring EBITDA & EBITDA Margin

EBITDA reduction, due to lower

sales volumes of standing wood

and cost increase.

25,4%

31,4%23,7%

19,8%+3,4%

MDP: 66%

MDF: 64%

*** Value considers the capacity of Botucatu unit which is inactive.

Wood: 66%Capacity Utilization 2Q19***

Volume increase of 3.4%*,

with the domestic market

leading the way.

Growth of 7.7% in net

revenue proforma** with the

maintenance of the sales

policies.

**Stripping out the non-recurring impact of the sales of forest to Suzano and income arising from the hardboard business in 2Q18.

*Stripping out volumes shipped by the hardboard business in 2Q18.

10

Deca Division

11

-1.90%

11.50%

-0.90%

2.60%1.5%

Abril19x18 Maio19x18 Junho19x18 Acum. 2019 2019e*

Sector Environment– ABRAMAT Data

April/19 May/19 June/19 Acum.2019 2019e*

0.3%

0.6% 0.6% 0.6%

Abril/19 Maio/19 Junho/19 Acum.2019

Indicators suggest a weak recovery for the construction materials sector.

Revenues for the construction materials industry showed a fall in the months from April to June this year, despite

growth year to date. Estimates are for income growth of 1.5% in 2019.

Slight increase in the level of employment in the industry 2Q19 compared to the same period last year. In the

semester, the accumulated growth is 0,6%.

Revenue of the construction materials industry v last year (2018)

Level of employment of civil construction industry v last year (2018)

April/19 May/19 June/19

* Truck driver industrial action

Recurring EBITDA & EBITDA Margin

12

Highlights-Deca R$ Milhões

47 64

12.6%16.5%

0.0 %

5.0 %

10. 0%

15. 0%

20. 0%

25. 0%

30. 0%

35. 0%

0

100

200

300

400

500

600

700

800

2Q18 2Q19Recurring EBITDA EBITDA Margin

374 386

27.2%30.3%

0.0 %

5.0 %

10. 0%

15. 0%

20. 0%

25. 0%

30. 0%

35. 0%

-320

180

680

1,1 80

1,6 80

2,1 80

2Q18 2Q19Net Income Gross margin

6,821 6,435

4,00 0

5,00 0

6,00 0

7,00 0

8,00 0

9,00 0

10,0 00

2Q18 2Q19Volume Variation

Volume (‘000 pieces)

-5,7%

Metal Fittings: 71%

Deca Division: 71%

Sanitary Ware: 76%

* The calculation does not consider the installed capacity of the São Leopoldo/RS operation.

Growth of 9.3% in unit

income, arising from an

improvement in the mix and

implementation of price

increases.

Consistent growth of 3.1p.p

in the gross margin,

stemming from synergies from

the integration of Hydra and

productivity improvement

projects.

Greater EBITDA margin

over the last 12 months,

35% up on 2Q18, anchored

by the “Strategic Growth

Agenda”.

Capacity Utilization 2Q19*

Net Revenue & Gross Margin

13

CeramicTiles Division

65 70

88 92

2T18 2T19

Produção Capacidade 14

-4.2%

23.5%

-5.4%3.4%

Abril19x18 Maio19x18 Junho19x18 Acum. 2019

Faturamento

Sector Environment– ANFACER Data

Abril/19April/19 May/19 June/19 Acum.2019

Million of m²

Revenue 2019 x 2018

Ceramic tile sector showed a weak performance during the period.

Revenue for the ceramic tile industry showed accumulated growth of 3.4% in 2019. But the performance did not

meet expectations in 2Q19.

Slow recovery of the sector.

Revenue of the ceramic tile industry v last year (2018) Capacity Utilization

* Truck driver industrial action 74% utilization

76% utilization

Production Capacity

2Q192Q18

15

Highlights–CeramicTiles R$ Million

1,237 1,472

1

1,00 1

2,00 1

3,00 1

4,00 1

5,00 1

2Q18 2Q19

Volume Variation

Volume (‘000 m²)

10 11

20.9%18.8%

0.0 %

5.0 %

10. 0%

15. 0%

20. 0%

25. 0%

30. 0%

35. 0%

0

10

20

30

40

50

60

70

80

90

100

2Q18 2Q19

Recurring EBITDA EBITDA Margin

46 57

40.2%

35.2%

0.0 %

5.0 %

10. 0%

15. 0%

20. 0%

25. 0%

30. 0%

35. 0%

40. 0%

45. 0%

-320

-120

80

280

480

680

880

1,0 80

2Q18 2Q19

Net Income Gross Margin

EBITDA margin of the period,

impacted by higher gas costs

and higher division share in the

apportionment of corporate

expenses.

+19,0%

Ceusa: 99,3%

19% increase in volume,

driven by sale outlets

actions and the new

ceramic line presented at

ExpoRevestir 2019.

Net Revenue increased by

24.7%, driven mainly by the

improvement to the product

mix.

Capacity Utilization 2Q19

Recurring EBITDA & EBITDA MarginNet Revenue & Gross Margin

Cecrisa Acquisition R$ Million

16

442 264 275

Net debt Cash Contingent Price

Net Income

667564 559

652

15A 16A 17A 18A

+17%

EBITDA

102

65

99112

16%

12%

18% 18%

-1

1

3

5

7

9

11

13

15

17

19

0

200

15A 16A 17A 18A

EBITDA Mg. EBITDA

+15%

Acquisition announced in May 2019

Deal worth: R$981mExpected synergies of more

than R$250m

Administrative Structure

Distribution Channels

Operation & Sales

Laminated floors & LVT - Durafloor

Wall & ceiling coverings – Duratex

Porcelain & ceramic tiles for floors, walls, and

rooves – Ceusa and Portinari

Ceramics Portfolio

17

General Scenario Political scenario- challenging economy, but with positive signs following approval of the pension reform in the first round of voting.

Slight improvement in consumer confidence in June, suggesting an improvement in expectations and the level of activity during the

next semester.

Wood Division Focus continues on differentiating products and improving the sales mix.

Expectation of an increase in sales volumes due to the improvement in the domestic economic scenario and

the sector’s historic seasonality.

Deca Division Sustained operational growth, on the back of the internal restructuring and initiatives carried out by the division.

Consolidation of the Strategic Growth Agenda with an increase in efficiency and focus on business profitabilty.

Ceramic Tiles Division Launch of new line of ceramic tiles under the Ceusa brand.

Merger of the Cecrisa and Ceusa operations.

Dissolving Wood Pulp Prior license obtained/ start of works on infrastructure.

Finalization of the engineering project.

Prospects for the second semester

18

Disclaimer and Glossary

The information herein has been prepared by Duratex S.A. and does notrepresent any form of prospectus regarding the purchase or subscription to thecompany’s shares or securities. This material contains general information relating toDuratex and the markets in which the company operates. No representation orguarantee, expressed or implied, is made herein, and no reliance should be placed onthe accuracy, justification or completeness of the information provided.

Duratex does not offer any assurances or guarantees regarding thefulfilment of expectations described.

August 2019