2016 06-30 - 2 q16-institucional [eng] logo regular

INSTITUTIONAL PRESENTATION

2Q16

June 30th, 2016

COMPANY

FIREARMS &

Accessories

2Q16 FINANCIAL

RESULTS REESTRUCTURING

HELMETS &

OTHERS

- Pistols

- Revolvers

- Long Guns

- Accessories

- Helmets for

Motorcyclists

- Motorcycle case

- Accessories

HELMETS FIREARMS OTHERS

- Plastic Containers

- Metal Injection

Molding (M.I.M.)

LARGEST MANUFACTURER OF

REVOLVERS

LEADING NATIONAL HELMETS’

PRODUCTION

BRAZILIAN COMPANY WITH METAL

INJECTION MOLDING TECHNOLOGY

COMPANY

OVERVIEW

FACILITIES

Taurus Holdings Inc, Miami – Florida Firearms and M.I.M.

Forjas Taurus S,A, São Leopoldo – RS Handguns, Forgery, Machining and M.I.M.

Taurus Blind. Nordeste Simões Filho – BA Helmets

Taurus Blindagens Mandirituba – PR Helmets and Plastics

COMPANY

3,200 Employees

1980 - Beretta operational acquisition 1982 - IPO 1983 - Taurus International

1939 –Forjas Taurus Foundation

1970 - Foreign investors control 1977 – Management buyout

1999 – Pollymer and titanium guns 1997 – Rossi – Revolver

2015 – Beginning of restructuring process - 100% of production increase - Beginning of debt renegotiation - SAP Implementation - Beginning of plants consolidation

2014 – New Shareholder: Companhia Brasileira de Cartuchos (CBC)

2012 - Heritage Manufacturing Inc. Acquisition - Acquisition of SteelInject

2011 - Admission to Level 2 of BM&FBOVESPA (Corporate Gov,)

10´s

30´s

70´s

80´s

90´s

00´s 2008 – Rossi – Long Guns 2004 – Famastil participation acquisition

2016 A NEW COMPANY

New Headquarter in São Leopoldo

New products portfolio

New production increase

SAP Go live

TIMELINE

COMPANY

CBC

Global View: • Net Revenue: R$ 2.3 Bi (2015) • Plants in Brazil, Germany and Republic Czech Republic • Present in over 100 countries • 3 Distribution centers • Over 3,600 employees • 4 brands: CBC, MEN, Magtech e Sellier & Bellot

Potential Synergies • Customer portfolio • Distribution Channels • Management Synergies • Production cost reduction • International expansion • Technology and know-how transferring • Brand strength

CBC – The Company

CORPORATE GOVERNANCE

100% TAG ALONG

DIVIDENDS 35%

MINIMUM OF 40% INDEPENDENT

BOARD MEMBERS

VOTING RIGHTS TO PREFERRED SHARES

(In Relevant Topics)

COMPANY

BOARD AND COMMITTEES

Jorio Dauster Magalhães e Silva

Fernando José Soares

Estima

João Verner Juenemann

Chairman (Independent)

Vice – Chairman

Independent

40% of Independent

Members

Audit and Risks Committee

João Verner Juenemann Fábio Luiz Munhoz Mazzaro Thiago Piovesan (CFO & IRO)

COMPANY Fábio Luiz Munhoz Mazzaro

Thiago Piovesan

STATUTORY AND EXECUTIVE BOARD OF DIRECTORS

COMPANY

CEO* Marco Aurélio Salvany

CFO and IRO* Thiago Piovesan

CHIEF OF SALES MARKETING* Salésio Nuhs

INTEGRATED ENGINEERING

DIRECTOR Cristiano Macedo

MARKETING DIRECTOR

Eduardo Minghelli

CEO – TAURUS HOLDINGS INC, Anthony Acitelli

OPERATIONS DIRECTOR

Jeferson Nargony

PURCHASING DIRECTOR

Ricardo Machado

*Statutory Board elected in 06.29.2016

SALLES DIRECTOR

Luiz Antônio M. de Freitas Horta

FISCAL COUNCIL

PERMANENTLY INSTALLED COMPANY

Amoreti Franco Gibbon

Alternate: Edson Pereira Ribeiro

Haroldo Zago

Alternate: Heldo Jorge dos Santos Pereira Junior

Mauro César Medeiros de Mello

Alternate: Nildo Teixeira Freire

Juliano Puchalski Teixeira

Suplente: Carlos Eduardo Bandeira de Mello Francesconi

Rafael de Souza Morsch

Suplente: Tarso Padua Dutra

SHAREHOLDERS

COMPANY

SHAREHOLDERS PARTICIPAÇÃO

TOTAL ON PN

CBC PARTICIPAÇÕES S.A. 70.99% 91.91% 2.51%

MARCOS BODIN DE SAINT ANGE COMNENE 5.60% 0.02% 23.84%

ANTONIO MARCOS MORAES BARROS 3.84% 0.15% 15.91%

PREVI 2.07% 1.28% 4.64%

ESTIMAPAR 2.50% 3.26% 0.00%

ZENITH ASSET MANAGEMENT 1.29% 0.00% 5.50%

OTHERS 13.71% 3.38% 47.60%

CAPITAL STOCK QUANTITY

ORDINARY SHARES 44,642,459

PREFERRED SHARES 13,636,110

TOTAL 58,278,569

EMPRESA

LAST CORPORATE EVENTS

• Exercise of (i) 10.060.829 subscription bonus ON owned by CBC and (ii) 634.489 subscription

bonus PN owned by Marcos Bodin de Saint Ange Comnene approved in 06.02.2016 Capital Increase of R$ 17.5 million; Issuance of 10.060.829 new common shares and 634.489 preferred shares; New social capital consists of 58,278,566 shares, being 44,642,456 common shares and 13.636.110 preferred shares;

• Exercise of 7.135.000 subscription bonus ON owned by CBC approved in 01.06.2016 Capital Increase of R$ 11.7 million; Issuance of 7,135,000 new common shares; New social capital consists of 47,583,248 shares, being 34,581,627 common shares and 13,001,621 preferred shares;

• Statutory reform approved at SGM in 12.22.2015

• Headquarter transferring to São Leopoldo/RS/Brazil approved at SGM in 12.04.2015

• Capital increase approved in 09.29.2015 Capital increase of R$ 39.9 million;

• Board members and statutory directors election Board members elected at SGM in 07.15.2015; Statutory directors elected at board meeting in 06.29.2015.

COMPANY

FIREARMS &

Accessories

2Q16 FINANCIAL


HELMETS &

OTHERS

FIREARMS & Accessories

IMPACT FACTORS

SEASONALITY

DEMAND

ECONOMICS

COSTS

• Trade Fairs • Hunting Season

• Innovation • Quality • Actions

• Currency • Macroeconomics

• Labour • Raw Material

FIREARMS – 82% Consolidated Net Revenue – 2T16


Law Enforcement

Consumer Market

Consumer Market

Law Enforcement

Consumer Market

9% Firearms Revenue

86% Firearms Revenue

5% Firearms Revenue

NICS – NATIONAL INSTANT CRIMINAL BACKGROUND CHECK SYSTEM

Source: NSSF


PEERS


PRODUCT GENERATIONS

4th Generation • Long Guns (restricted use)

3rd Generation • Long Guns

2nd Generation • Pistols

1st Generation • Revolvers


MARKETING & SALES


AWARDS

2012 FIELD & STREAM BEST OF THE BEST AWARD TAURUS TRACKER 992

2011 NRA: HANDGUN OF THE YEAR

PT 740 SLIM

2013 MANUFACTURER OF THE YEAR

TAURUS INTERNATIONAL MFG, INC,


BRAZILIAN MARKET


PUBLIC SECURITY

Source: Public Security 2015 Report (data from 2014)


- Police Force Federal Police > 14,000

Civil Police > 118,000

Military Police > 425,000

City Guard * > 100,000

*Law nº 13,022 – August, 2014

- Armed Forces Armed Forces > 327,000

MARKET SHARE

90% OF HANDGUNS MARKET SHARE IN BRAZIL PEERS: CBC AND IMBEL 10% OF MARKET SHARE


TAURUS DEFENSE - Targets

TAURUS

DEFENSE

Act as the link between TAURUS and Defense Ministry and

Armed Forces;

Represent TAURUS in specific forums;

Contribute on the process of consolidation of the TAURUS’

brand to the concepts of quality, safe, security and reliability;

Contribute on the sales growth, in particularly, to Armed Forces;

Manage the work related to the relevant legislation to the EED

(Strategic Defense Companies) and others inherent legal

frameworks of the company’s activity,

TAURUS – EED since November 28th, 2013

TAURUS

DEFENSE

TAURUS

DEFENSE

Política

Nacional

de Defesa

Prioritize the development of independent technological capabilities;

Subordinate commercial considerations to the strategic imperatives;

Prevent the polarization of Defense Industrial Base between advanced research and routine production;

Use the development of defense technologies as a focus for the development of operational capabilities,

BRAZILIAN DEFENSE STRATEGY – Legal Base

CONCEPTS

TAURUS

DEFENSE

PRODE: all good, service, construction or information, including weapons,

ammunition, transportation or communications, uniforms and individual or

collective materials used in the defense activities, excepts the

administrative use;

PED: all PRODE that, due the technology content, the difficulty to obtaining

or the indispensability, is of strategic interest for national defense;

CONCEPTS

TAURUS

DEFENSE

EED: all companies that are certified by the Defense Ministry that meet the

following conditions:

Be aimed at carrying out research activities, projects, development, industrialization,

service, production, repair, maintenance, overhaul, conversion, modernization or

maintenance of PED in Brazil;

Have the headquarters in Brazil, its management and the industrial establishment;

Dispose, in Brazil, of proved own technology knowledge or complemented by

partnership agreement with the Scientific and Technological Institution;

Ensure, that foreign shareholders can not act on General Shareholders Meetings with

number of votes representing more than 2/3 of the total votes exercisable by Brazilian

shareholders; and

Ensure production continuity in Brazil,

INCENTIVES

TAURUS

DEFENSE

RETID: Special Tax System for Defense Industry

PIS/PASEP and COFINS exemption

IPI exemption

Source: Law N, 12,598/2012

The EED will have access to special tax system and

funding for programs, projects and actions related to

goods and services of national defense under the law terms ,

FOREIGN MARKET


ATHLETES SPONSORSHIP


Mauro Cauduro

Outstanding positions on

Brazilian competitions

Jessie Duff

Champion of the 2014

World Shoot XVII

Taurus’ team captain

EXPORTS TO OTHER COUNTRIES (ex-USA)

EXPORTS FOR

MORE THAN

70 COUNTRIES


GROWTH STRATEGIES


Specific products for Consumer and Law Enforcement markets

Develop new products for the US market

Improve the after-sale: maintance, retrofit and training

Increase the sales for civilian brazilian market

Improve the Taurus brand perception

COMPANY

FIREARMS &

Accessories

2Q16 FINANCIAL


HELMETS &

OTHERS

IMPACT FACTORS

HELMETS

& Accessories Motorcycles Sales

Car substitution for motorcycle

Mobility and traffic saving

Delivery Services

Motocab

Credit Defaults’ growth

Restricted credit concession

% of down payments’ value

Number of installments

Motorcycle maintenance X Helmet

acquisition

Inexistence of financing for used low

cilinder motocycles

CLIENTS

Fleet Owners Wholesale Magazines Retail Governments

Trade Representatives

HELMETS

& Accessories

PEERS Nome Logo País Nome Logo País Nome Logo País

AGV Itália HELD Alemanha NAU Portugal

AIROH Itália HELT Brasil NOLAN Itália

ARAI Japão HJC EUA NORISK Brasil

ASTONE França ICON EUA ONE EUA

BELL EUA KRAFT Brasil PEELS Brasil

BIEFFE Brasil LAZER Bélgica PRO TORK Brasil

CRAFT Alemanha LS2 Espanha SHARK França

EBF Brasil MARUSHIN Itália SHOEI Japão

FLY Brasil MHR China STARPLAST Brasil

FOX EUA MIXS Brasil TAURUS Brasil

HARLEY-

DAVIDSONEUA MT Espanha VAZ Brasil

10%

OTHERS

Market Share Brazil

45%

45%

HELMETS

& Accessories

COMPETITIVE ADVANTAGES

Quality Raw material from recognized suppliers

Compliance with brazilian quality standard

(NBR 7471/2001)

Production scale

Market Leadership with San Marino Product

Design Updated and innovative design

Artwork with excellent finishing

HELMETS

& Accessories

GROWTH STRATEGIES

Explore the foreign market

Evaluate the opportunities of producing helmets with higher added value

Increase the marketing actions: exhibitions, specific magazines, others,

HELMETS

& Accessories

PLASTICS CONTEINERS

A NEW

CONSCIOUSNESS

IN WASTE COLLECTION

METALLURGY

& PLASTICS

PLASTICS CONTEINERS - CLIENTS

Trade Representatives

Contractors Resale Residentail Condominums

Industries Prefectures

METALLURGY

& PLASTICS

PLASTICS CONTEINERS– PEERS

Other manufacturers not standardized and

imported

Contemar e JSN

METALLURGY

& PLASTICS

M.I.M. – METAL INJECTION MOLDING

M.I.M. IS TECHNOLOGY ON TAURUS’ PRODUCTS

METALLURGY

& PLASTICS

M.I.M. – PROCESS

METALLURGY

& PLASTICS

M.I.M. – CLIENTS

DEFENSE & SECURITY

OTHERS

METALLURGY

& PLASTICS

COMPANY

FIREARMS &

Accessories

2Q16 FINANCIAL


HELMETS &

OTHERS

2Q16 FINANCIAL RESULTS

HIGHLIGHTS

47

EBITDA (R$ 11.9) million (2Q16) X R$ (12.5) million (1Q16) X R$ 12.1 million (2Q15) Key Impacts Sale of Investment (Famastil quotes) R$ 4.9 million (Net Accounting Loss) Carter Case: attorneys’ fees confirmation R$ 10.3 million (Provision)

Net Revenue R$ 198.3 million 6.9% (2Q16/1Q16) 13.0% (2Q16/2Q15)

Firearms Market US Market: R$ 140.8 million 4.7% (2Q16/1Q16) 16.8% (2Q16/1Q16) Domestic Market: R$ 14.4 million 61.8% (2Q16/1Q16) 25.8% (2Q16/1Q16) Others Markets: R$ 8.0 million 100.0% (2Q16/1Q16) 95.1% (2Q16/1Q16)

Highlights Execution of agreements for about USD$150 million debt renegotiation Production increase 40% in the 2Q16 x 1Q16 Sale of Famastil quotes (35%) generating R$ 5 million cash Capital increase of R$ 17.5 million 10.1% average US Dollar depreciation 2Q16 x 1Q16

ECONOMIC AND FINANCIAL INDICATORS

2Q16 RESULTS Ratios 2Q16 1Q16 2Q15 1H16 1H15

Variation

2Q16/1Q16 2Q16/2Q15 1H16/1H15

Net Revenue 198.3 185.5 175.5 383.8 349.0 6.9% 13.0% 10.0%

Domestic market 48.3 46.0 49.3 94.3 109.8 5.0% -2.0% -14.1%

Foreign market 150.0 139.5 126.2 289.5 239.2 7.5% 18.8% 21.0%

COGS 134.1 139.2 120.5 273.3 258.8 -3.7% 11.3% 5.6%

Gross Profit 64.2 46.3 55.0 110.5 90.2 38.7% 16.7% 22.5%

Gross Margin - % 32.4% 25.0% 31.3% 28.8% 25.8% 7.4 p.p. 1.1 p.p. 3.0 p.p.

Operating Expenses -81.2 -70.8 -51.3 -152.0 -161.6 14.7% 58.3% -5.9%

Operating Profit (EBIT) -17.0 -24.5 3.7 -41.5 -71.4 -30.6% - -41.9%

EBIT Margin - % -8.6% -13.2% 2.1% -10.8% -20.5% 4.6 p.p. -10.7 p.p. 9.6 p.p.

Net Financial Income/Loss 29.9 19.8 -3.5 49.7 -71.8 51.0% - -

Depreciation and amortization 5.0 12.0 8.4 17.0 16.9 -58.3% -40.5% 0.6%

Net Income/Loss - Consolidated 14.6 -3.3 4.7 11.3 -145.2 - 208.4% -

Net Consolidated Margin 7.3% -1.8% 2.7% 2.9% -41.6% 9.1 p.p. 4.6 p.p. 44.5 p.p.

EBITDA -11.9 -12.5 12.1 -24.4 -54.5 -4.8% - -55.2%

EBITDA Margin - % -6.0% -6.7% 6.9% -6.4% -15.6% 0.7 p.p. -12.9 p.p. 9.3 p.p.

Total Assets 954.9 924.2 981.4 954.9 981.4 3.3% -2.7% -2.7%

Provision for Unsecured Liability -80.7 -86.5 -57.1 -80.7 -57.1 -6.7% 41.4% 41.4%

COMPANY

FIREARMS &

Accessories

2Q16 FINANCIAL


HELMETS &

OTHERS

2016: A NEW CYCLE

RESUMPTION OF COMPANY

FUNDAMENTALS

REDUCING COMPANY

COMPLEXITY

FOCUS ON

PROFITABILITY

RESIZE THE INDUSTRIAL

PROCESS

REESTRUCTURING

2016: A NEW CYCLE

OPERATIONAL RESTRUCTURING

- New production concept

- Higher production capacity

- Greater efficiency and quality

FINANCIAL

RESTRUCTURING

- Cash generation

- Debt renegotiation

- Capital increase

- Operations transferring to SL

- Long guns consolidation

- Respect for the environment

SAP

REESTRUCTURING

2016: A NEW CYCLE

New Firearms Production Concept Gunsmith Production Line Interchangeability of parts Higher production capacity Greater efficiency and quality

Plants Consolidations Long guns operations consolidation Operations transferring to São Leopoldo – RS – Brazil Respect for the environment

SAP Implementation Process based Greater management control Greater integration among departments Sinergy gains

REESTRUCTURING

REESTRUCTURING

2016: A NEW CYCLE

New Headquarter Address: Av. São Borja, 2181 – CEP: 93.032-000 – São Leopoldo – RS – Brazil

JULIAN BATISTA

IR Analyst

+55 51 3021 3079

www.taurusri.com.br

[email protected]

THIAGO PIOVESAN

CFO & IRO

MARCO AURÉLIO SALVANY

CEO

http://www.taurusri.com.br/

mailto:ri@taurus,com.br

2016 06-30 - 2 q16-institucional [eng] logo regular

Investor Relations