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GRUPO INDUSTRIAL SALTILLO
1Q18 Conference Call
April 20, 2018
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Forward Looking Statement
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This presentation and discussion may contain forecasts or projections in accordance with the vision and
expectations of the Administration with respect to the performance of the Company, the businesses and future
events. These forecasts and projections are subject to risks, uncertainties and assumptions that are uncertain.
Several factors can cause actual results to differ materially from those forecasts, projections and plans of the
Administration, including, without limitation, business development and marketing of new products, the demand
for and acceptance of the Company’s products, economic conditions in the product markets and the different
regions, the cost of raw materials and energy and the fluctuation of the exchange rate.
FINANCIAL EXPECTATIONS
The financial expectations, forecasts and projections in this presentation reflect the current beliefs of the Company
and its Administration. The Company is not required and does not acquire duty to update this presentation or any
forecast, projection or expectation as a result of new information, events or circumstances subsequent to this date.
MAIN HIGHLIGHTS &STRATEGIC OVERVIEW
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JOSÉ MANUEL ARANA - CEO
90 years !
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Mr. Isidro Lopez
A VISIONARY MAN founded in 1928 in Saltillo, Coahuila a
manufacturing and distribution of kitchenware business …
… what would become a global and leading company. The GISSA we know today !
Globalization Strategy
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• Accelerated and profitable growth
• Competitive advantages
• Global basis
• Fully aligned within industry´s value chain
• R&D + Co-design + Casting + Machining
• Commercial, operating and marketing advantages
• Savings in the supplying cost of raw materials, machinery and tooling
• Benefits of synergies expected in engineering, process improvement, product design and
access to global customers
1Q18 Operating Performance
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• Similar Revenue Level in MXP / 9% Growth in dollarized terms
• EBITDA was down by 10% in MXP / 3% measured in USD
• Draxton posted double-digit growth of 14%
‐ Positive performance in Europe & Asia from higher aluminum volume
‐ NAFTA growth helped by favorable price and product mix
1Q18 Operating Performance
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• Draxton’s EBITDA unchanged – savings in energy consumptions and reductions in fixed costs
• Strategic installed capacity to supply global platforms
• Poland Auto parts site awarded ISO 18001:2004 Certification
• New machining plant in San Luis Potosi under GISEderlan, follows our strategy of process
integration and increased added value
• In 2018, our efforts will be focused at productivity and achievement of synergies
1Q18 Operating Performance
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• Vitromex collaborated with distributors for the opening of an additional boutique under the
luxury brand Arko – Lafaenza
• Product portfolio adjustments in the US market – Vitromex revenue declined 15%
• GISSA is committed to turning around Vitromex operation
• Vitromex 1Q18 EBITDA improvement from 4Q17
• Strengthening our relationship with our largest customers:
‐ Product renewal - Sell and deliver strategy
‐ Leaner structure - Adequate portfolio mix
‐ Commercial team reinforcement - Capex for productivity improvements
1Q18 Operating Performance
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• Cinsa’s steady growth pace
• Favorable price effect
• New product line added
• Better product mix
• Operating efficiencies & Cost Savings
• Strong EBITDA growth of 41%
FINANCIAL PERFORMANCE
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MARIO GUZMÁN - CFO
1Q18 Highlights
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Mill Ps 1 Q 2018 1 Q 2017
Revenue $4,596 $4,579 Mixed effects, offseting each otherVolume: Draxton (=), Vitromex (-), Cinsa (-)Peso vs US$ (-), vs euro +Improved prices and mix in Draxton, Cinsa
EBITDA $741 $827 Currency effect, est negative$30 MillIn US$, US$39 vs US$41 Mill, (3%)Construction segment accounts for most of thedifferenceProforma with JVs, $855 (‘18), $919 (‘17)
Net income $473 $796 1st Qtr 2017 financial gain higher in approx $131 Mill Ps after tax1st Qtr 2018 increased D&A from PPA $41 Mill Psafter tax
Net debt $6,349 $6,570 Net leverage remains at 2.2x (‘17), 2.3x (‘18) level
1Q18 Draxton Financial Performance
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• Draxton exceeded our expectations
• Revenues in US$ were 14% higher than 1Q17
• Better price-product mix and the positive EUR-USD parity effect
• EBITDA constant in US$. Delays on the implementation of the raw materials pass thru to
selling price, continued pressure on materials costs and energy.
• Appreciation of the local currencies in México, Poland and Czech Republic, impacting the cost
structure
1Q18 Construction Financial Performance
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• Vitromex revenues decreased 15% from lower volume sold
• Specifically in the US market, as adjustments made in our product portfolio prevented us
from offering our distribution network normal supply levels
• Cost cutting initiatives implemented since 4Q17 are starting to bear fruit
• Calorex (excluded from Construction or GIS figures) posted double-digit growth of 36% in
EBITDA
• Divesting process of Calorex is still subject to approval by COFECE
1Q18 Housewares Financial Performance
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• Cinsa increase revenues by 1%
• EBITDA and EBITDA margins for 1Q18, both significantly improved, by 41% (to $32
million) and 3 percentage points (to 9%)
• Better product mix
• Operating efficiencies
• Better pricing and lower cost
2018 CAPEX Budget
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1250
750
100
Draxton Vitromex Cinsa
Ps.2100
Million
• Increase Capacity
• Improvements in Profitability & Efficiency
• Technological updates
• Maintenance
• Transformation of Production Capacity
• Compliance
1Q18 Consolidated Financial Performance
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• Net Debt Ps 6.3 billion
• Net Debt to EBITDA ratio 2.3x
• Company will propose to its shareholders a dividend payment of Ps. 1.12 per outstanding
share,
‐ Ps. 0.60 will be paid on May 7, 2018 and the remaining
‐ Ps. 0.52 on November 5, 2018
• This proposal is subject to approval at GISSA's next Annual Ordinary General
Shareholders’ Meeting
Q&A
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GRUPO INDUSTRIAL SALTILLO
1Q18 Conference Call
April 20, 2018
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