duratex - association duratex and satipel
DESCRIPTION
Presentation - Association Duratex and SatipelTRANSCRIPT
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CREATION OF THE BIGGEST PANEL MAKING COMPANY
OF THE SOUTHERN HEMISPHERE
June / 2009
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1www.duratex.com.br www.satipel.com.br
+ Table of Contents
Disclaimer
Obj ti f th A i ti Objectives of the Association
Details of the Association
Corporate Structure
New Duratex
Value Build-Upp
Corporate Governance
2
+ Disclaimer
Pursuant to the Association agreement signed on June 22 2009 between the controllinggroups of Duratex S.A. (“Duratex”) and Satipel Industrial S.A. (“Satipel”) (“AssociationAgreement”), the conclusion of the unification of all the activities of Duratex and Satipel(“Association”) is contingent on the implementation of all the preconditions pursuant tothe Association Agreement.Pursuant to the result of the due diligences at Duratex and Satipel, the exchange ratiobetween the common and preferred shares of Duratex by common shares of Satipel maybetween the common and preferred shares of Duratex by common shares of Satipel, maybe adjusted.The completion of this operation is also contingent upon, (i) prior approval of the GeneralShareholders’ Meetings of the two companies to be called for this purpose; and (ii)subsequent approval of the appropriate anti-trust authorities.This presentation includes information and forecasts that represent expectations as tofuture events or results of the Association. These information and forecasts are based on
bl l d b th i d th i t lli h h ld i lireasonable analyses made by the companies and their controlling shareholders in linewith their experience, particularly considering the economic climate and the marketconditions, over which the companies and their controlling shareholders have no control.Several factors may change expectations and forecasts of the companies and theirSeveral factors may change expectations and forecasts of the companies and theircontrolling shareholders, either positively or negatively, as to the results and benefits ofthe Association. While the information and forecasts contained in this presentation havebeen prepared on the basis of probable and reasonable scenarios, both Duratex and its
3controlling shareholders as well as Satipel and its controlling shareholders cannotguarantee the effective outcome of this information or forecasts, more especially withrespect to possible gains in synergies arising from the Association.
+ Objectives of the Association
Creation of the Biggest Company in the Southern Hemisphere within the Panel Making Segment
Value build-up through:i f l• gains of scale
• complementarities of the operations• geographical diversificationgeographical diversification• adoption of the best industrial, commercial, forestry, administrative and people management• talents attraction and retention• R&D activities expanded
Platform for sustainable expansion
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+ Details of the Association
Irrevocable Association Contract between Duratex and Satipelp The association implementation will be through the
incorporation of Duratex by Satipel Emission of 348,785,970 shares of Satipel to be given in exchange by Duratex shares, which equals 76% of the total number of outstanding shares of the resulting companynumber of outstanding shares of the resulting company Share substitution ratio:
• 1 share DURA3 from within the controlling group:g g p3.05360401 shares SATI3
• 1 share of remaining shareholders DURA3 and DURA4:2.54467001 shares SATI3
New company listed on Novo Mercado of Bovespa New company to be denominated Duratex S A
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New company to be denominated Duratex S.A.
+ Corporate Structure
New Duratex to be listed on the Novo Mercado with Free Float over 40%
Current (in million of shares): without treasury stock
Control ControlOther OtherDuratex
ControlSatipel
OtherShareholders Shareholders
60.9 M (48.0%). 51.9 M ON
9 0 M PN
65.8 M (52.0%). 1.7 M ON64 1 M PN
31.3 M ON (28.7%)77.8 M ON (71.3%)
. 9.0 M PN . 64.1 M PN
Resulting Company (in million of shares):
126.7 M (100.0%) 109.1 M (100.0%)
ControlSatipel
77.8 M (17.0%)181.3 M (39.6%) 198.8 M (43.4%)
ControlDuratex
OtherShareholders
6457.9 M (100.0%)
DURA3 New
+ New Duratex
Combines State of the Art assets which strengthen our market presence
Industrial capacity and forest area
NEW DURATEX
PANELS (in m3/year) 2.160.000 1.750.000 3.910.000
MDP 500.000 1.400.000 1.900.000
MDF 1.450.000 350.000 1.800.000
Hardboard 210.000 0 210.000
Coating (in m2/year) 105.720.000 58.100.000 163.820.000Coating (in m /year) 105.720.000 58.100.000 163.820.000
LP 37.320.000 26.500.000 63.820.000
FF 14.400.000 31.600.000 46.000.000
Painting 54.000.000 0 54.000.000
Laminated Flooring (in m2/year)* 6.000.000 0 6.000.000
Components (in m2/year) 0 1.500.000 1.500.000
Forest area (in ha) 122.700 86.600 209.300
DECA (in 1.000 items/year) 22 800 0 22 800
7* Laminated flooring is made of MDF.
DECA (in 1.000 items/year) 22.800 0 22.800
Metal Fittings 15.800 0 15.800
Vitreous Chinaware 7.000 0 7.000
+ New Duratex
8th Largest Panels Company Worldwide
Installed capacity (in ‘000 m3 / year)
12.500
6.550
10.110
5.450
5.550
+5.050
5.400
+
3 300
3.700
3.910
8* Internal estimate
3.300
+ New Duratex
7th Largest Manufacturer of Vitreous Chinaware Worldwide
Installed Capacity (in millions of items)
29,5
12,013,0
28,0
7 07,6
10,012,0
6,27,07,0
3,34,0
5,1
Metal Fittings segment among the 10 largest worldwide
9* Internal estimate
2,23,3g g g g
+ New Duratex
Employees (as on 03.31.2009)
HUMAN CAPITALHUMAN CAPITAL
Administrative 350 114
Industrial - panels 1.900 831p
Commercial - panels 144 28
Forest 952 985
DECA 4.460 0
TOTAL 7.806 1.958
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+ New Duratex
Consistent Results with High Return Potential
Consolidated Financial Highlights (in R$ millions as on 12.31.2008)
NEW DURATEX*Gross Revenues 2.554,8 716,3 3.271,1
Gross Profits 769,5 200,6 970,1
Gross Margin 40,2% 38,6% 39,9%g ,
Ebitda 559,4 163,6 723,0
Ebitda Margin 29,2% 31,5% 29,7%
Net Income 313 8 75 1 388 9Net Income 313,8 75,1 388,9
Net Debt 486,3 307,4 793,7
Shareholders' Equity 1.731,5 521,1 2.252,6
11* Pro-forma
Total Assets 3.373,4 1.127,5 4.500,9
+ New Duratex
Strong Capital Structure
Debt (in R$ million as on 03.31.2009)
*NEW DURATEX
Short term debt 438,4 101,9 540,3Short term debt 438,4 101,9 540,3
Long term debt 546,6 362,2 908,8
Debt 985,0 464,1 1.449,1
Cash 442,9 76,9 519,8Cash 442,9 76,9 519,8
Net debt 542,1 387,2 929,3
EBITDA (last 12 months) 525,7 160,1 685,8
Net debt / EBITDA 1 0 x 2 4 x 1 4 xNet debt / EBITDA 1,0 x 2,4 x 1,4 x
Equity 1.758,5 527,5 2.286,0
Net debt / Equity 31% 73% 41%
12* Pro-forma
+ Creating Value
The Association must provide substantial synergy gains, among others:
Complementarity of operations and diversification of products Logistics serviceAd ti f th b t i d t i l i l f tAdoption of the best industrial, commercial, forestry, administrative and people management practicies Rationalization of administrative and commercial activities Rationalization of administrative and commercial activities Optimization of supply (to reduce inventory, etc.) Scale gains Scale gains
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+ Creating Value
Complementarity of Operations and Products Enables Better Market Service
+3 9 illli 3/
1.450 350MDF 1.800
3,9 milllion m3/year
500 1.400MDP 1.900
Hardboard 210Hardboard 210
14(capacity in ‘000 m3 year)
+ Creating Value
New Duratex Borns Leader in the Wooden Panels Industry
+ 1.800 1.900 210 3.910
4.130 4.760 410Industry - total* 9.300
MDF MDP HardboardMDF MDP Hardboard
15*Duratex Estimate
+ Creating Value
Geographical Location Favors the Markets Logistics Service
Brasília
UberabaSATIPEL
Linhares
BotucatuDURATEX
AgudosDURATEX
Mirassol
Ubá
ItapetiningaDURATEX
MDF - DURATEX
Arapongas
São Paulo
DURATEX
MDP
- SATIPEL
MDF (2009 implementation)- DURATEX
TaquariSATIPEL
HardBoard - DURATEX
MDP- DURATEX- SATIPELBento Gonçalves
16Furniture Center
+ Creating Value
Markets with High Growth Potential
Consumption per capita of panels in Brazil: Consumption per capita of panels in Brazil:
9,810,8 11,3
MDF
5,77,6 7,6(in m3 / year)
2003 2004 2005 2006 2007 2008(Source: ABIPA and IBGE)
10,711,9 11,4 11,7
13,6 13,5MDP(in m3 / year)(in m / year)
17 2003 2004 2005 2006 2007 2008(Source: ABIPA and IBGE)
+ Creating Value
during a moment of Favorable Economic Prospects
Reduction of interest rate Reduction of interest rate Income expansion Credit expansion to retail and construction segments Housing deficit of 8 million Young population and positive growth rate Government encouragement for the construction segment:
tax exemption increase of funding limits through the FGTS from R$ 350 thousand to R$ 500 thousand i it l f b ildi 1 illi l h priority plan of building 1 million popular houses (Minha Casa Minha Vida, My House My Life)
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+ Creating Value
the New Duratex borns strategically Positioned with Guaranteed Wood Supply
Forest Activity:• approximately 209 thousand hectares of planted forests• self-sufficiency of raw material• potential for mechanization and verticalisation• adoption of best practices in the planting maintenance• adoption of best practices in the planting, maintenance, and forest harvesting:
replacement of pine by eucalyptus use of genetic engineering seedlings nursery f standardization of equipment improvement of R&D activities certified forests (FSC)
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certified forests (FSC)
+ Corporate Governance
Common Stocks Novo Mercado Minimum Dividend Policy: 30% of the adjusted net income Minimum Dividend Policy: 30% of the adjusted net income Board of Directors:
• 4 members nominated by Itaúsa• 4 members nominated by Itaúsa• 2 members nominated by Ligna• 3 independent members• 3 independent members
Chairman of the Board: Salo Davi Seibel Chief Executive Officer: Henri Penchas Chief Executive Officer: Henri Penchas Agreement of shareholders including, among others:
• shared control with long-term visionshared control with long-term vision• controllers spontaneous lock-up of 5 years
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+
CREATION OF THE BIGGEST PANEL MAKING COMPANY
OF THE SOUTHERN HEMISPHERE
June / 2009
+
21www.duratex.com.br www.satipel.com.br