Duratex - 3rd Quarter 2006

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www.duratex.com.br 3Q2006 Results

November / 2006

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>> Index

Business segmentsStrategic positioningWood panels sectorHousing segmentPerformance Capital MarketsWrap up

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Hardboard

Particle Board

MDF/HDF/SDF

Laminate Flooring

>> Business Segments

Wood Division

4

Deca Division

Metal Fittings

Vitreous China

Accessories

>> Business Segments

5

Biggest local producer of wood boards and metal fittings;Predominance in premium markets;Self-sufficiency in wood supply and timberland located close to industrial facilities;Pioneer in introducing new technologies;High degree of productivity based on economies of scale and automated processes;Active policy of developing new products;Superior quality and well known brands:

Leadership

>> Strategic Positioning

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CAPEX Highlights since 2002

R$ 800 M


New MDF/HDF/SDF plant in Botucatu/SP;Low-pressure coating lines in Itapetininga/SP and Botucatu/SP;Cut-to-Size saw in Jundiaí/SP;Expansion of the vitreous china unit in Jundiaí/SP;Acquisition of approximately 20,000 hectares of timberland;

CAPEX during the period (in R$ M):

303,5

172,8 136,8 108,4 79,1

2002 2003 2004 2005 9m06

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Capital Structure

539,1

76,868,3

291,7

125,9

78,7

102,3

Total Debt 2006 2007 2008 2009 2010 &After

ForeignCurrency

DomesticCurrency

641,4


Debt and amortization schedule

Total Debt 641

Cash and Cash Equivalents 525Shareholder´s Equity 1.342

Net Debt / Shareholder´s Equity 8,7%

Net Debt / EBITDA Annualized 0,26

in R$ M sep-06

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Nominal capacity and occupancy rate

73%

94%

88%

74%

80%Vitreous China

Metal Fittings

MDF/HDF/SDF

Particle Board

Hardboard

3.800 K * items/year3.800 K * items/year

500.000 m3/year500.000 m3/year

360.000 m3/year360.000 m3/year

14.400 K items/year14.400 K

items/year

640.000 m3/year640.000 m3/year

* Industrial Capacity (Nominal Capacity = 4.200 K items/year)


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Consume approximately 60% of Duratex made wood panels;

The industry is constituted of more than 16 thousand companies;

There are 7 main furniture poles:

• Bento Gonçalves (RS),

• São Bento do Sul (SC),

• Arapongas (PR),

• Big São Paulo (SP),

• Norwest region of São Paulo (SP)

• Ubá (MG)

• Linhares (ES) Furniture poles

Furniture industry

>> Wood Panels Sector

10

91%

3%

6%

Domestic Market

Technical Sales 5%Retail24%

Civil Construction 6%

FurnitureIndustry

59%

Others 6%

Duratex: selling channels


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SDF LaminateFlooring

Standard Painted Standard LP FFStandard LP FF

Duratex

Berneck

Eucatex

Isdra

Masisa

Arauco

Satipel

Tafisa

Hardboard Particle Board MDF/HDF

Processed wood industry


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In 2005, the sector accounted for 12% of the Brazilian GDP; Housing deficit: 7,9 million units:

Positive perspectives:• Improving of the legal framework,• Decreasing of interest rates,• Tax reduction – IPI,• Expansion of credit and• Capitalized companies ready to invest:

R$3,7 billions (recent primary issuing of stock:Cyrela, Gafisa, Company, Rossi, Brascan, etc).

Brazilian scenario

>> Housing Segment

9%

38%

35%

5%

13%

Source: SindusCon/SP and GV Consult

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São Paulo

Market performance

28.782 34.414

2004 2005

+20%

Source: Embraesp, Secovi and ADEMI/RJ

Increasing number of launchings during 2005 at the metropolitanregions of SP and RJ, which represents 82% of the total market;Number of residential units launched:

Rio de Janeiro

7.1628.791

2004 2005

+23%

>> Housing Segment

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Key points for market expansion:• Economic growth,• Increasing income,• Extension of loan terms and• Reduction of interest rates, among others.

Correlation:

Market expectations

2,1%

5,7%

1,3%

5,1%

-8,6%

-2,5%-2,6%

15,75%

19,00%22,00%

17,50% 17,25%

18,50%

13,50%

2000 2001 2002 2003 2004 2005 2006

Interest Rate

Construction GDP

>> Housing Segment

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Accessories

Furniture /

remodeling

ProjectIncorporation

Sale Construction of flagstone

Hydraulic and electric

Thick finishing

Light finishing

(Metals and vitreous china fixtures)

Delivery

5% 95%

12 months 5 months 3 months

Construction average cycle

>> Housing Segment

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>> Housing Segment

Wholesale 9%

Retail57%

CivilConstruction 11%

HomeCenters

19%

Others 4%

Deca: selling channels

78%

8%

14%

Domestic Market

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Net revenues breakdown (2006)

>> Performance

VitreousChina11%

LaminateFloor Boards

6%

MDF / HDF / SDF27%

ParticleBoard13%

Hardboard22%

MetalFittings

21%

Market Segments

Civil Construction45%

Furniture Makers37%

Others18%

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Metal Fittings 4%

Hardboard70%

MDF/HDF/SDF9%

Others 6%

Vitreous China 11%

Exports (in US$ M)

41,546,5

57,6 62,5

47,2 45,4

2002 2003 2004 2005 9m05 9m06

Improvement of the export selling mix:

• Vitreous China + 31%

• MDF/HDF/SDF - 9%

Wood85%

Deca15%

Highlights (2006)

>> Performance

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Quarterly highlights

Wood (in 1.000 m³) 346,0 289,0 254,5 20% 36%Deca (in 1.000 items) 3.628 3.156 3.376 15% 7%

in R$ MNet Revenues 399,8 348,3 317,9 15% 26%COGS (225,8) (204,9) (190,8) 10% 18%Gross Profit 174,0 143,4 127,1 21% 37%Gross Margin 44% 41% 40% - -Operating result before financ. 111,3 80,6 65,5 38% 70%EBITDA 130,8 99,8 85,5 31% 53%EBITDA Margin 33% 29% 27% - -Net Income 70,2 45,8 33,1 53% 112%ROE (annualized) 23% 16% 14% - -

Shipments 3Q06 2Q06 3Q05Var. (%)

3Q06 x 2Q06Var. (%)

3Q06 x 3Q05

>> Performance

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52 4293 106

161

2002 2003 2004 2005 2006

CAGR +33%

Net Revenues

>> Performance Jan – Sep (in R$ M)

Ebitda & Margin

Net Income Equity & ROE

619 710883 940 1.079

2002 2003 2004 2005 2006

152 165247 277

333

25% 23%28% 29% 31%

2002 2003 2004 2005 2006

896 924 994 1.0351.342

8% 6%

13% 14%18%

2002 2003 2004 2005 2006

CAGR +15%CAGR +22%

CAGR +11%

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Net revenues per employee (in R$ 1.000)

150,4169,8

199,7215,7

237,2

2002 2003 2004 2005 LTM 06

CAGR: +12%

LTM = Last 12 months

>> Performance

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Ebitda (in R$ M) & Margin (%)

119 122196 199

255

30%26%

33% 31%35%

2002 2003 2004 2005 2006

33 43 5078 77

15%18%

26% 22%18%

2002 2003 2004 2005 2006

Demanded markets;

Increase of shiped volumes;

Export revenues reduction.

Positive scenario for the housing segment;

Increase of shiped volumes (Basics);

Metal fittings cost increase.

Wood

>> Performance Jan – Sep

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EBITDA per employee (in R$ 1.000)

37,0 39,8

53,961,6

70,4

2002 2003 2004 2005 LTM 06

CAGR: +17%

>> Performance

LTM = Last 12 months

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(79,1)

(76,7)

(39,0)

275,9 14,0

234,0

524,8195,7

Opening balanceDec-05

Adjusted net income ( * )

Workingcapital

CAPEX Dividendand profitsharing

Issuingof new stock

Financing

( * ) Adjusted Net Income = net Income + depreciation + financial result + provision and asset write offs

Cash Flow (in R$ M)

>> Performance

ClosingbalanceSep-06

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Shareholder´s structure

Itaúsa7,5%

PensionFunds10,6%

Foreign Investors50,5%

Others31,4%

Outstanding number of shares: 126.827.072Common 53.120.492Preferred 73.706.580

>> Capital Markets

Preferred shareholder’s breakdown (Sep2006)

26

0

2.500

5.000

7.500

10.000

12.500

15.000

17.500

20.000

22.500

25.000

27.500

30.000

30/1

2/20

0414

/1/2

005

31/1

/200

516

/2/2

005

2/3/

2005

16/3

/200

531

/3/2

005

14/4

/200

529

/4/2

005

13/5

/200

530

/5/2

005

13/6

/200

527

/6/2

005

11/7

/200

525

/7/2

005

8/8/

2005

22/8

/200

55/

9/20

0520

/9/2

005

4/10

/200

519

/10/

2005

3/11

/200

518

/11/

2005

2/12

/200

516

/12/

2005

2/1/

2006

16/1

/200

631

/1/2

006

14/2

/200

62/

3/20

0616

/3/2

006

30/3

/200

613

/4/2

006

2/5/

2006

16/0

5/06

30/0

5/06

13/0

6/06

28/0

6/06

12/0

7/06

26/0

7/06

9/8/

2006

23/8

/200

66/

9/20

0621

/9/2

006

05/1

0/06

20/1

0/06

8,009,0010,0011,0012,0013,0014,0015,0016,0017,0018,0019,0020,0021,0022,0023,0024,0025,0026,0027,0028,00

Adhesion to Bovespa´s Level I

Stock Split in Reverse (200x1)

Stock Public Offering

Election of an Independent Board Member

Price (R$)as of 31/Oct/06

Financial Volume(in R$ 1.000)

2005 2006

Honourable Reference IR Magazine

3rd Place – ABRASCA AwardAnnual Report

Stock Dividend

>> Capital Markets

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Performance of Duratex´s preferred shares (in R$)

(1) Reinvesting dividends (2) Without the reinvestment of dividends

0

100

200

300

400

500

600

700

800

900

1000

set-9

7

set-9

8

set-9

9

set-0

0

set-0

1

set-0

2

set-0

3

set-0

4

set-0

5

set-0

6

AsianCrisis

RussianCrisis

Change in BrazilianFX regime

ArgentineCrisis

Sep 11th

BrazilianElection Period

100 Base

Politic CrisisLula´s Government

Duratex (1) Duratex (2) Ibovespa10 years 811% 272% 209%5 years 715% 578% 243%12 months 95% 90% 15%

>> Capital Markets

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0

5

10

15

20

25

30

35

2/1/

1986

2/1/

1987

2/1/

1988

2/1/

1989

2/1/

1990

2/1/

1991

2/1/

1992

2/1/

1993

2/1/

1994

2/1/

1995

2/1/

1996

2/1/

1997

2/1/

1998

2/1/

1999

2/1/

2000

2/1/

2001

2/1/

2002

2/1/

2003

2/1/

2004

2/1/

2005

2/1/

2006

R$ 7,5 M

R$ 1,0 MR$ 0,6 MR$ 1,3 M

Preferred shares traded volume of PN stock

1986 - 1989 1990 - 1999 2000 - 2005 2006

Fin. Volume (in R$ M)

Daily Average Financial Volume

>> Capital Markets

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Value build up

403 288468

661 558 605970

1.4601.743

3.138

1997 1998 1999 2000 2001 2002 2003 2004 2005 sep/06

CAGR: +26%

Market Capitalization

CAGR: +17%

US$ 362 M

US$ 1.443 M

R$ 403 M

R$ 3.138 M

>> Capital Markets

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Dividends (in R$ M)

14,7 15,0 15,221,5

23,6 24,6 25,7

58,1

46,3

30,4

30,4

60,8

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

CAGR: +17%

* Dividend 1H06 Annualized

*

25,0

21,3

15,3

42,8

Extraordinary dividend

>> Capital Markets

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>> Wrap upMarket Positioning:• strong brand names,• products,• markets,• distribution channels.

CAPEX:• consistents programs,• returns / ROIC.

Capital´s Structure:• presence in capital markets,• low leverage.

Low Cost of Wood Supply

CREATION

OF VALUE WITH

SUSTAINABILITY

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www.duratex.com.br 3rd Quarter Results

November / 2006

Investor Relations

Duratex - 3rd Quarter 2006