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2Q14 Earnings Release Presentation - Magnesita
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Earnings Call 2Q14
August 14th, 2014
The consolidated financial statements presented here are consistent with the criteria of international accounting standards - IFRS issued by the
International Accounting Standards Board – IASB, based on audited financial information. Non-financial information contained herein, as well
as other operational information, were not audited by independent auditors and may include forward-looking statements and reflects the
current views and perspectives of the management on the evolution of macro-economic environment, conditions of the mining and
refractories industries, company performance and financial results. Any statements, projections, expectations, estimates and plans contained
in this document that do not describe historical facts, and the factors or trends affecting financial condition, liquidity or results of operations,
are forward-looking statements and involve several risks and uncertainties.
This presentation should not be construed as legal, tax, investment or other advice. This presentation does not constitute an offer, or invitation,
or solicitation of an offer, to subscribe for or purchase any securities, and neither any part of this presentation nor any information or
statement contained herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Under no
circumstances, neither the Company nor its subsidiaries, directors, officers, agents or employees be liable to third parties (including investors)
for any investment decision based on information and statements in this presentation, or for any damages resulting therefrom, corresponding
or specific.
The information presented or contained in this presentation is current as of the date hereof and is subject to change without notice. Magnesita
has no obligation to update it or revise it in light of new information and / or in face of future events, safeguard the current regulations which
we are submitted to. This presentation and its contents are proprietary information of the Company and may not be reproduced or circulated,
partially or completely, without the prior written consent of the Company.
Changes in historical numbers For comparison purposes, 2013 figures have been adjusted to reflect accounting changes implemented by the Company in late 2013.
Disclosure
A g
lob
al o
rgan
izat
ion
New Strategic Vision
Vision: Be the best provider of refractories solutions and industrial minerals,
leveraging and developing our minerals base
Expand industrial minerals base
Ensure leadership in our core markets
Maintain a global low cost production base
Grow selectively and aggressively
Continue to develop high quality, low cost raw material sources to support our current
businesses as well as new businesses where
we can have a sustainable competitive
advantage
Strive to keep offering high quality and
innovative products, unrivaled services and
cost performance
Optimize production globally to improve
efficiency and support growth
Develop global supply chain management
Pursue long term growth opportunities in selected
markets where we can deliver superior value to
our customers and shareholders
▪Meritocracy ▪Ethics
▪Profit ▪Management & Method
▪Agility and Transparency ▪Respect for Safety, Environment and Communities
▪Customer ▪People
Our values
3
South America
4
Source: ¹WSA
Crude Steel Production¹ (million tons) - Core Markets
Volume (‘000 tons)
North America EU-28
Sales to Steel Segment
Revenues (R$ million)
+11%
+8%
2Q14
238
1Q14
214
2Q13
219
+8%
+21%
2Q14
557
1Q14
517
2Q13
461
Refractory Solutions Sales - Steel
+1%
-5%
2Q14
11
1Q14
11
2Q13
12
+2%
0%
2Q14
30
1Q14
30
2Q13
29
+2%
-1%
2Q14
43
1Q14
44
2Q13
43
14% 15%
23% 22% 25%
23%
38% 40%
Sales by region (in R$)
South America
North America
Europe Others
1H13
1H14
-3%
1H14
22
1H13
23
+2%
1H14
60
1H13
59
1H14
87
+4%
1H13
84
452
1H13
+7%
422
1H14
885
1H13
+21%
1H14
1.074
5
Sales to Industrial Segment
Refractory Solutions Sales – Industrial Segment
Volume (‘000 tons) Revenues (R$ million)
33
4144
-24%
-18%
2Q14 1Q14 2Q13
88
125
100
-30%
-13%
2Q14 1Q14 2Q13
Sales by region (R$)
77
90
-15%
1H14 1H13
213220
-3%
1H14 1H13
17% 18% 12%
9%
24% 18%
47%
55%
1H13
1H14
South America
North America Europe Others
Refractory Solutions Sales and Margin - Consolidated
6
Volume (‘000 tons)
Revenues (R$ million)
Gross Profit and Margin (R$ million;%)
271258260
+5%
+4%
2Q14 1Q14 2Q13
201213198
-5%
+2%
2Q14
31.2%
1Q14
33.1%
2Q13
35.2%
645642561
0%
+15%
2Q14 1Q14 2Q13
Sales by region (R$) 43%
14% 15%
21% 20% 25%
22%
40%
South America
North America Europe Others
1H13
1H14
17% 20%
83% 80%
Steel Industrial
1H13
1H14
Sales by segment (R$)
528512
+3%
1H14 1H13
+16%
1H14
1.287
1H13
1.105
414390
1H14
+6%
32.2%
1H13
35.3%
7
Revenues (R$ million) Gross Profit and Margin (R$ million;%)
Revenues (R$ million) Gross Profit and Margin (R$ million;%)
Minerals and Services
353840
-9%
-12%
2Q14 1Q14 2Q13
4039
29
+5%
+39%
2Q14 1Q14 2Q13
121215
2Q13
38.6%
+4%
-20%
2Q14
35.1%
1Q14
30.6%
764
+4%
+63%
2Q14
16.6%
1Q14
16.6%
2Q13
14.1%
Minerals
Services
+7%
1H14
73
1H13
68
2427
32.7%
1H13
39.9%
-12%
1H14
79
58
+37%
1H14 1H13
13
7
12.8%
1H14
16.6%
1H13
+78%
8
Consolidated Sales and Gross Profit (R$ million)
Por Segmento
720719630
0%
+14%
2Q14 1Q14 2Q13
5.5% 5.1%
89.4%
4.7% 5.6%
89.7%
Services Minerals Refractories
1H13 1H14
Gross Profit
Consolidated Sales
+17%
1H14
1.440
1H13
1.232
220231217
-5%
+1%
2Q14
30.6%
1Q14
32.1%
2Q13
34.5%
451425
+6%
1H14
31.3%
1H13
34.5%
9
SG&A
Selling Expenses
G&A
+3%
+1%
2Q14
58
8.0%
1Q14
56
7.8%
2Q13
58
8.8%
-6%
+10%
2Q14
100
13.8%
1Q14
106
14.8%
2Q13
91
13.9%
Selling expenses
% on sales
-7%
+23%
2Q14
43
6.0%
1Q14
46
6.5%
2Q13
35
5.4%
Consolidated Freight
G&A
% on sales
Others
-6%
+2%
2Q14
56
7.8%
1Q14
60
8.3%
2Q13
55
8.5%
+6%
1H14
114
7.9%
1H13
108
8.5%
+25%
1H14
206
14.3%
1H13
165
13.0%
+40%
1H14
90
6,2%
1H13
64
5,0%
+15%
1H14
116
8.1%
1H13
101
7.9%
10
EBITDA and Net Income (R$ million)
EBITDA and Adjusted EBITDA (excluding other revenues / expenses)
Net Income
ADJUSTED
-3%
-23%
2Q14
95
13.2%
1Q14
98
13.7%
2Q13
123
18.9%
2Q14
14
2.0%
1Q14
-17
-2.3%
2Q13
24
3.6%
14.4%
2Q13
103
15.8%
-7%
2Q14
-6%
97
1Q14
13.4%
104
1H14
194
13.5%
1H13
18.8%
239
200
13.9%
1H13
217
17.0%
-7%
1H14
1H14
-2
-0.2%
1H13
50
3.9%
11
CAPEX and Working Capital (R$ million)
Working Capital
CAPEX
+38%
+3%
2Q14
37
1Q14
27
2Q13
36
2Q14
979
34.0%
1Q14
1,017
35.4%
4Q13
952
32.3%
3Q13
976
37.7%
2Q13
934
35.9%
Working Capital
% on sales
+7%
1H14
64
1H13
60
12
*EBITDA excluding other revenues / expenses
Leverage and Indebtedness
Total
Amortization Schedule (R$ million) Net Debt per Currency
Excluding Perpetual Bond
Others 1%
0%
EUR 18%
17%
USD 36%
59%
BRL 45%
24%
904914875819658
394421439398406
4Q13
2.4x
2.2x 2.3x
1Q14 2Q14
2.4x 2.2x
2.0x
3Q13
2.1x
2.1x
2Q13
1.7x
1.7x
Net Debt / EBITDA w/o ore
Net Debt / EBITDA
EBITDA
Net Debt
2015
178
2014
8
2Q14
804
2016
84 213
2017
281
2020+
1,512
949
563
2019
12
2018
Cash Position Amortization Perpetual Bond
2Q14
4Q13
394421438384386
3.9x
3.8x
1Q14
1,494
3.9x
3.5x
4Q13 2Q14
1,484 1,453
3.7x
3.3x
3Q13
1,369
3.7x
3.6x
2Q13
1,205
3.2x
3.1x
Net Debt / EBITDA w/o ore
Net Debt / EBITDA
EBITDA
Net Debt
*EBITDA excluding other revenues / expenses
Octavio Pereira Lopes CEO
Eduardo Gotilla Global Finance and IRO
Daniel Domiciano Silva Investor Relations
Lucas Veiga Investor Relations Analyst
Phone: +55 11 3152-3237/3241/3202 [email protected]
www.magnesita.com/ri
13
Investor Relations Contacts