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September 2019
68 years of history
One of the market leaders in the
country’s floor and wall coverings segment
7 forestry units 16 manufacturing
facilities in Brazil3 manufacturing
facilities in Colombia
Biggest producer
of wood panels in Brazil
Leader in the
market for producing bathroom fittings
12 thousand
employees
Duratex: who we are
Our brands
Corporate Governance
40%
20%
40%
Itaúsa Ligna Free Float
Shareholder structure
• Dividend policy requiring minimum distribution of 30% of adjusted net earnings
• Senior Board comprising 9 members, including 3 independents;
• Senior board members may not hold an executive position within the company;
• 6 executive committees;
• Risk Management, Compliance, Audit and
Ombudsman Departments;
• Brokers who cover the Company: Bradesco BBI, BTG
Pactual, Citibank, Goldman Sachs, Empiricus Research,
HSBC, JP Morgan, Merrill Lynch, Morgan Stanley, Nau
Securities, Safra, Santander;
. Itaúsa centralizes strategic and financial decisions of a group of companies. Itaúsa operates in financial and industrial areas
and also administers large business institutions. Itausa is controlled by Itaú
Unibanco S.A and is Brazil’s largest private bank in terms of assets under management
and market capitalization –
Market Cap: R$101.6bn (Dec18)
Grupo Ligna reunites the investments of Helio Seibel and Salo Davi Seibel. Both are entrepreneurs with over 40 years of experience in different sectors of the economy. Currently, Grupo Ligna invests in the retailing, industry, power generation, property, agriculture and financial sectors. Net Assets: R$1.0bn (Dec17)
Yarumal
Barbosa
Manizales
Our manufacturing and forestry facilities
Colombia
Brazil
Wood Panels
Forests
Ceramic tiles
Hydra
Metals
Water closets
Criciúma (SC)
Sanitary Wares
Metal Fittings
Urussanga (SC)
WOOD DIVISION
Our portfolioMDP
Uncoated MDP, with applications in the furniture and civil
construction sectors.
Madeplac
BP
Coated MDP.Standard and
Textured.
MDF
Uncoated MDF, with applications in the
heavy-duty furniture sector.
Madefibra BPHeavy-duty, coated MDF Standard and Textured.
High Gloss BPCoated MDF, with
different degrees of gloss finish.
DurafloorLaminated wooden floor coverings and vinyl floor
coverings made from 100% recyclable PVC.
The Panels Market
84%
16%
Mercado Doméstico
Mercado Internacional
Final Destination
• Brazilian GDP
• GDP – Civil Construction
• Consumer Confidence
Main Indicators for the Sector:
32%
20%16%
8%
24%
Duratex
Arauco
Berneck
Fibraplac
Outros
Main companies
Main Association:
*Capacity Share
• IBÁ (Brazilian Tree Institute)
Current Market Utilization
80%
20%
1
Ocioso
Utilizado
* IBÁ data and Duratex estimates
Others
Domestic Market
International Market
Idle
Utilized
2Q19
Our operation
5 Manufacturing units
• Agudos (SP): MDF and Durafloor
• Itapetininga(SP): MDP and MDF
• Botucatu (SP): Operation suspended
• Uberaba (MG): MDF
• Taquari (RS): MDP
• MDP: 39%
• MDF: 28%
Capacity Share
Capacity Utilization – 66%
• UNCOATED: 60%
• COATED: 40%
Product/Volume Mix
Strategy of the Division
• Dedicated Factories
• Cost efficiency
• Differentiation
18%
13%
16%
8%
14%
31% Resina
Papel
Madeira
Energia
Mão-de-Obra
Outros
44%
52%
4%
Industria
Varejo
Construção Civil
Sales Segmentation Cost Segmentation
Furniture industry
Retail
Construction
Resin
Paper
Wood
Energy
Labor
Others
DECA DIVISION
Our Portfolio
SinkApplications in
commercial and residential kitchens and bathrooms (Inox Sink)
Sanitary WaresApplications in commercial and
residential bathrooms
Electric Showers
Wide variety of electric and gas powered showers
ValvesUsed in operating
flushing mechanisms
MetalsWide variety of taps for
kitchens and bathrooms
The Construction Market
40%
30%
30%
Deca
Roca
Outros
40%
20%
40%Deca
Docol
Outros
65%
20%
15%
Lorenzetti
Deca/Hydra
Outros
Market Share Sanitary Wares Market Share Metal Fittings
Market Share Showers
* ASFAMAS data and Duratex estimates
• Brazilian GDP
• GDP – Civil Construction
• Consumer Confidence
• New constructions
Main indicators for the sector:
• ABRAMAT (Brazilian Association of Construction Materials)
• ASFAMAS (Brazilian Association of Sanitary-Ware Manufacturers)
Main Associations
OthersOthers
Others
Deca
Roca
14%
42%
3%4%
37% Metais
Mao de Obra
Energia
Combustíveis
Outros
Our operationSanitary Wares
4 Manufacturing Facilities
• Jundiaí (SP)
• Queimados (RJ)
• João Pessoa (PB)
• Cabo de Santo Agostinho (PE)
• Sanitary Wares: 76%
• Metal Fittings: 71%
• Deca: 71%
Capacity Utilization Strategy of the Division
• Operational efficiency
• Asset Light
• Pricing
Metal Fittings
3 Manufacturing Facilities
• São Paulo (SP)
• Jacareí (SP)
• Jundiaí (SP)
Electric Showers
1 Manufacturing Facility
• Aracaju (SE)
66%
20%
8%5%
Revenda/Homecenter
Construtoras
Atacado
Outros
Sales Segmentation Cost Segmentation
Retail/Homecenter
Construction
Others
Wholesale
Metals
Labor
Electric Energy
Fuels
Other materials
CERAMIC TILES DIVISION
Our Portfolio
Polished porcelain tilesApplications in drier environments such as living
rooms, corridors and bedrooms
Tiles Wide range of applications for wet or dry
environments
Special finishings Wide range of applications with exclusive designs
using 3D technology.
The Ceramic Tiles Market
72%
28%
Via Seca
Via Úmida
Production Split
• Brazilian GDP
• GDP – Civil Construction
• Retail - Civil Construction
• Volume of ceramics
• Volume of cement
• Volume of steel
Main indicators for the sector:
Market share (% Revenue)
9%
7%
7%
4%
3%
70%
Portobello
Ceusa/Portinari
Eliane
Roca/Incepa
Elizabeth
Outros
Main associations
• ANFACER (National Association for Ceramic Tile Manufacturers)
75%
25%
1
Ocioso
Utilizado
Current Market Utilization
* ANFACER data and Duratex estimates
Idle
Utilized
Others
2Q19
Dry Process
Wet Process
48%
29%
6%
17%
Outros Materiais
Mao de Obra
Energia
Combustíveis
Our operation
2 Manufacturing Facilities
• Urussanga/SC
• Criciúma/SC
• Ceusa: 99%
Capacity Utilization
• Monotone
• Mono-caliber
• Dry joint fitting
Product differentials Strategy of the Division
• Focus on high-end products
• Increased capacity (New line)
• Synergies Cecrisa + Ceusa
Production Capacity• 31 million m²/year*
Capacity Share
72%
13%
9%
6%
Varejo
Homecenter
Construção Civil
Outros
Sales Segmentation Cost Segmentation
• 3%
* Consider CEUSA expansion
Retail
Construction
Others
Homecenter
Other materials
Labor
ElectrIc Energy
Fuels
Results
Consolidated ResultsBRL million
Net Income and Gross Margin Rec. EBITDA and EBITDA Margin Net profit rec.
• Domestic economic
recovery weaker than
forecast, impacting
volumes;
• EBITDA margin
impacted by the drop in
market volumes and
increase in costs;
• Net profit boosted by the positive
variance in the biological assets
and improvement in the financial
results;
1.006 1.110 1.277 1.263 1.073 1.145
27%27%
28%29%
26%
31%
23%
24%
25%
26%
27%
28%
29%
30%
31%
32%
-
1.00 0
2.00 0
3.00 0
4.00 0
5.00 0
6.00 0
7.00 0
8.00 0
9.00 0
10.0 00
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
182 220 210 237 179 213
18%20%
16%19%
17%19%
0%
5%
10%
15%
20%
25%
-
100
200
300
400
500
600
700
800
900
1.00 0
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
31 27 62
19
69
-
100
200
300
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
151
Results by DivisionBRL Million
Wood
Deca
601 614 768 766 598 610
-
100
200
300
400
500
600
700
800
900
1.00 0
1.10 0
1.20 0
1.30 0
1.40 0
1.50 0
1.60 0
1.70 0
1.80 0
1.90 0
2.00 0
2.10 0
2.20 0
2.30 0
2.40 0
2.50 0
2.60 0
2.70 0
2.80 0
2.90 0
3.00 0
3.10 0
3.20 0
3.30 0
3.40 0
3.50 0
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Volume (`000 m³)
628 690 815 847 678 702
27% 25% 27% 28%25%
32%
0%
5%
10%
15%
20%
25%
30%
35%
-
100
200
300
400
500
600
700
800
900
1.00 0
1.10 0
1.20 0
1.30 0
1.40 0
1.50 0
1.60 0
1.70 0
1.80 0
1.90 0
2.00 0
2.10 0
2.20 0
2.30 0
2.40 0
2.50 0
2.60 0
2.70 0
2.80 0
2.90 0
3.00 0
3.10 0
3.20 0
3.30 0
3.40 0
3.50 0
3.60 0
3.70 0
3.80 0
3.90 0
4.00 0
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Net Rev. and Gross Margin
126 163 136
172 126 139
20%24%
17%
20% 19% 20%
0%
5%
10%
15%
20%
25%
-
100
200
300
400
500
600
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Rec. EBITDA and EBITDA Margin
6,3 6,8 6,9 6,0 5,7 6,4
-
5,0
10,0
15,0
20,0
25,0
30,0
1T18 2T18 3T18 4T18 1T19 2T19
Volume (million items)
334 374 407 368 348 386 26%
27%
29%
30%
28%
30%
24%
25%
26%
27%
28%
29%
30%
31%
-
100
200
300
400
500
600
700
800
900
1.00 0
1.10 0
1.20 0
1.30 0
1.40 0
1.50 0
1.60 0
1.70 0
1.80 0
1.90 0
2.00 0
1T18 2T18 3T18 4T18 1T19 2T19
Net Rev. and Gross Margin
46 47 59 52 45
64
14%13%
15% 14%13%
17%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
-
100
200
1T18 2T18 3T18 4T18 1T19 2T19
Rec. EBITDA and EBITDA Margin
44 46 55 48 46 57
40% 40%40%
38% 37%
35%
32%
33%
34%
35%
36%
37%
38%
39%
40%
41%
-
50
100
150
200
250
300
1T18 2T18 3T18 4T18 1T19 2T19
Net Rev. and Gross Margin
10 10 14 13
8 11
23%21%
26% 27%
18% 19%
0%
5%
10%
15%
20%
25%
30%
-
5
10
15
20
25
30
35
40
45
50
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Rec. EBITDA and EBITDA Margin
1.261 1.237 1.501 1.340 1.242 1.472
-
1.00 0
2.00 0
3.00 0
4.00 0
5.00 0
6.00 0
7.00 0
8.00 0
9.00 0
10.0 00
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Volume (`000 m²)CeramicTiles
BRL million
Financial Indicators
Net Debt and Leverage Multiple (x)
• Controlled leverage, a result of
efficient management policy;
• Long term debt profile,
with competitive cost of
capital;
• Liability Management
as a pillar of internal
initiatives;
Amortization Timeline Debt Profile
2.216 2.163 1.949
1.700 2.010 2.060
2,80 2,59
2,32
2,00
2,38 2,45
-
0,50
1,00
1,50
2,00
2,50
3,00
-
1.00 0
2.00 0
3.00 0
4.00 0
5.00 0
6.00 0
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
461
748
88
711
1.269
2019 2020 2021 2022 2023 +
Dívida Bruta
36%
64%
1
Longo Prazo Curto PrazoShort term Long termGross debt
The Company turnaround...
Strategy DevelopmentA leaner and more productive Duratex, with stronger shareholder returns
Boom in demand
Increase in market share
Geographical and product diversification
Consolidation of Corporate Governance
Growth Cycle
Strategic review of the Duratex culture
Rejuvenated culture ready to face new challenges
High performance teams
Active and engaged leadership
Cultural TransformationSale of land and forestry assets
Sale of the Hardboard business
Closure of the unit at Botucatu and re-opening of the unit at Itapetininga
Joint Venture in soluble cellulose with the Austrian company Lenzing
Unification of shower operations with the closure of the operations in Tubarão/SC
Ceusa Expansion Project
Duratex Management System
Identification of gaps and priorities
Zero Based Budgeting
Operational Efficiency
EVA as a performance metric
Solutions for Better Living
Duratex 2025
Client at center of strategy
Digital innovation
Welcome: Ceusa and Viva Decora
2007 to 2014
2015 2016 2017 2018Economy Expanding Economic Crisis
Economic Recovery
Management Excellence The New Proposal Duratex
Asset Management
Duratex2019
2019
Launch of inox cubes
Closure of the Sanitary Ware unit in São Leopoldo
License granted for construction of theDissolving Wood Pulp factory
Acquisition of CECRISA
And still
more...
SYNERGIES Closure of the ceramic tiles unit in Santa Luzia/MG
The New Duratex
PEOPLEThe people are our strength
RESULTSSustainable high performance
CLIENTWe are the best choice
PROCESSESJob well done, simply and safely
WAY OF BEING AND DOINGStrategic pillars
...GENERATING CASH AND MAXIMIZING SHAREHOLDER VALUE Executive remuneration based on cash generation and EVA
...SUSTAINABLE GROWTHOrganic and inorganic growth within our way of working and
being
...INNOVATION & DIGITALIZATIONAs a way of simplifying our processes and leveraging our sales
channels
A company focused on...
...STRATEGIC ASSETSOptimization of the current assets and productive management
with partners
...CLIENT SOLUTIONS One-stop-shop, complete in-situ experiences
Th
em
es
Pil
lars
Asp
irati
on
s
◊ Working Conditions
and Employee
Development
◊ Client and Consumer
Engagement
◊ Relationship with
Communities and Local
Development
◊ Eco-efficiency
◊ Climate Change
◊ Sustainable Forest
Management
◊ Responsible Supply
Chain
◊ Sustainable
materials and
solutions
Generating new
business that
supports
sustainability
Developing People
and Creating Value
in the Chain
Growing the socio-
environmental
positive impact
from point to point
Innovating with
sustainable
solutions
People
Processes
Products &
Services
New business models
Our numbers and
StrategySustainability
80% of renewable sources in our energy grid
55% of the energy grid composed of biomass
24% of water re-use in our in-house production processes
Around 10 Thousand employees have already completed an educationalprogram in sustainability
11biodiversity projects developed in 2018
Our forests are inhabited by more than 2 thousand native species of fauna and flora, with 30 of them at risk of extinction, according to the IUCN red list
Four
Solutions for BetterLiving
Business
Portfolio of productsas a design benchmark
Strong Brandssynonym of excellence
Innovationas a directional ofprocesses
Solid Management System(SGD) with focus in generatingvalue
DissolvingWood Pulp
Units
Contacts
Investor Relations Team
Guilherme Setubal Souza e Silva Executive Manager IR
Natasha UtescherIR Coordinator
[email protected]+55 (11) 3179 7037
Investor Relations [email protected]
www.duratex.com.br/RI
Lucas Mendes VoltarelliIR Analyst
[email protected]+55 (11) 3179 7920