1 CORPORATE PRESENTATION 11 November 2009
1
CORPORATE PRESENTATION
11 November 2009
2
New Duratex Corporate Governance Capital Markets Deca DivisionWood Division Association Highlights Favorable Scenario Duratex Momentum Disclaimer Annex
IndexIndex
3
Duratex and Satipel Association
NewNew DuratexDuratex
22.Jun.09: Signature of the Intention Protocol of Association
31.Aug.09: Shareholders’ meetings approve the association
• Election of the Board of Directors’ members
• Election of the Executive Directors
08.Oct.09 new ticker: DTEX3
• Major stock indexes in which the stock is included: Ibovespa, ISE and MSCI
4
Administration
* Independent members (33%)
CHAIRMANSalo Davi Seibel
VICE CHAIRMENAlfredo Egydio Arruda Villela Filho and Ricardo Egydio Setúbal
BOARD MEMBERSAlcides Lopes Tápias*, Hélio Seibel, Paulo Setúbal, Pedro Parente*,
Rodolfo Villela Marino and Rogério Ziviani*
BOARD OF DIRECTORS
SUBSTITUTE MEMBERSAndréa Seibel, Olavo Egydio Setúbal Jr. and Ricardo Villela Marino
EXECUTIVE DIRECTORS
CEOHenri Penchas
Corporate GovernanceCorporate Governance
5
Management
Corporate GovernanceCorporate Governance
04.Nov.09: Board of Directors’ Meeting approves the creation of 4 Committees: Human Resources Committee:
Remuneration Recruitment and career Succession
Governance and Nomination Committee: Governance model Evaluation of the Board of Directors and CEO
Risks Committee: Debt Policy Risks control Internal controls
Sustainability Committee: Define and promote the new Sustainability Mission and Vision
6
40%20%
2%
21%17%
Major groups of shareholders as of sep/09:
458.362.776 (1)
Capital stock (shares)(shares)
Other Local Investors
Itaúsa Group and Families
Foreign Investors
Local Pension Funds
Ligna Group and Families
Corporate Structure
Capital MarketsCapital Markets
DTEX3
(1) Treasury stock: 463.200 shares
7
Foreign Investors
Oceania
Europe
South and Central America(-Brazil)
North America Asia
Africa45,5%
7,3%
0,9%
33,1%
2,0%
11,2%
Capital MarketsCapital Markets
8
-
2,00
4,00
6,00
8,00
10,00
12,00
14,00
19-jun 13-jul 3-aug 24-aug 15-sep 6-oct 28-oct-
2.000.000
4.000.000
6.000.000
8.000.000
10.000.000
12.000.000
14.000.000
16.000.000
Positive Market Reaction
IBOVESPA
19.Jun.2009 06.Nov.2009 Var %
Duratex 3.033,4 5.824,5 92%
Ibovespa 51.373,8 64.466,1 25%
Comparative Valuation
DTEX3
Quotation
Stock Volume
30.00035.00040.00045.00050.00055.00060.00065.00070.00075.00080.000
19-jun 13-jul 3-aug 24-aug 15-sep 6-oct 28-oct
* Market Value in R$ million
*
Capital MarketsCapital Markets
9
2009
2008
2007
2006
2005
2004
IPO Novo Mercado
Constant Improvement
Sustainability Oriented Management
Dividend Policy: 30% minimum pay-out. 80% Tag Along
Joined Nível I of Bovespa
Primary and Secondary stock offering 100% stock dividend
Negotiation Committee Ethics and Conduct XCode Joined the Chicago XClimate Exchange Founder Member of the XGreen Building Council XBrazil
Inclusion of stock in Sustainability Index of Bovespa Joined Manual
Abrasca Board of Directors
Bylaws. Reception and
Handling of Complaints Policy Punishment and
Eradication of Illegal Acts Policy Corporate
Governance Policy Supply of Goods
and Services Policy
Joined Novo Mercado Only ON stock
1 stock = 1 vote 100% Tag Along Minimum Dividend Policy:
30% minimum pay-out 5 years lock-up to controllers Minimum Free-float of 40% Board of Directors:
3 independent members Creation of New Committees
= Creation of Value
Capital MarketsCapital Markets
10
Brand:
Design:
Production Scale:
• 7.2 million items/year of chinaware in 05 units: 02 in SP, 01 in RS, 01 in PE and 01 in RJ
• 15.8 million items/year of metal fittings, in 02 units (SP)
• 48 product lines aimed to luxury, medium and economic segments
Sales National Coverage:
• Market, distribution
• Extensive after-sales support:
• Technical support through 246 service locations
Brand Power and Products Diversity
Deca DivisionDeca Division
11
Brand Power and Products Diversity – High End Segment
Deca DivisionDeca Division
12
Brand Power and Products Diversity – Mid and Low End Segments
Deca DivisionDeca Division
13
Deca DivisionDeca Division
CeramicsSão Leopoldo - RS
Cabo de Santo Agostinho - PE
Queimados - RJ
São Paulo - SPJundiaí - SP
Buenos Aires - ARG
Metals
Geographical Location
13
14
5,1
6,2
7,6
10,0
12,0
13,0
28,0
29,5
7,0
7,2
7th Largest Manufacturer of Vitreous Chinaware Worldwide
Metal Fittings segment among the 10 largest worldwide
(Capacity in ‘000 items/year)
Gains of Scale
Source: Duratex’s estimate
Deca DivisionDeca Division
15
89%
94%
1 1 ,0%
6 ,0%
VitreousChina
MetalFittings
7.200.000 items/year7.200.000 items/year
15.800.000 items/year15.800.000 items/year
(1)
(2)
(1) Capacity being expanded to 18 million items/year. By the end of 2010. (2) Considering the site of Queimados, RJ, with the capacity of 70 million items/year, which is not running.
DecaDeca DivisionDivisionInstalled Capacity and Occupancy Rate 3Q09
16
Taquari
Itapetininga
Botucatu
Agudos
Uberaba
Wood DivisionWood Division
HardBoard
MDP
MDF
Forests
Geographical Location
16
17
3.300
3.700
3.910
5.050
5.400
5.450
5.550
6.550
10.110
12.500
+
8th Largest Panels Company Worldwide
Source: Duratex’s estimate(Capacity in ‘000 m³/year)
Gains of Scale
(1) OSB panels mainly
(1)
Wood DivisionWood Division
(1)
18
1.800
1.900
210
3,9 million m3/year
Complementary Products
(capacity in ‘000 m3/year)
500
1.450
1.400
350
Hardboard
MDP
MDF
Wood DivisionWood Division
19
4.130
1.800
4.760
1.900
410
210 3.910
9.300
MDF MDP Hardboard
Industry - total
Complementary Products
Source: Duratex’s estimate(Capacity in ‘000 m³/year)
Wood DivisionWood Division
20
44%
54%
95%
5 6 ,0%
4 6 ,0%
5 ,0%
MDF
MDP
Hardboard 210.000 m3/year210.000 m3/year
1.900.000 m³/year1.900.000 m³/year
1.800.000 m³/year1.800.000 m³/year
(1)
Wood DivisionWood DivisionInstalled Capacity and Occupancy Rate 3Q09
(1) Resulting capacity after the shutting down of the Jundiaí hardboard unit. Previous capacity: 360.000 m³/year. (2) MDP/MDF: utilization rate over nominal capacity. Not considered the technical constrains during ramp-up.
(2)
(2)
21
Land with planted forest: 209 thousand hectares• 324 farms in SP, MG and RS regions• 19% of the forests with Pine • 2014 100% Eucalyptus
250 million planted trees• Carbon free• 16.300 hectares of planted area per year• 52 trees planted per minute
5.100.000 m3 of annual wood production• Harvest between 6 and 7 years• Low distance between forests and sites• Increasing the productivity• Conservation of native forests• Certified forests (FSC and ISO14.001)
Wood DivisionWood DivisionSelf-sufficiency of Raw Material
MG SP
RS
Timberland Productivity1960 2010
22
Wood DivisionWood DivisionSustainable Operation
RESEARCH TOWER Research Project
• 10 Brazilian Companies involved Supervision
• CIRAD (French Center for Agricultural Research)
• IPEF (Forest Research Institute) of ESALQ
• NCSU (North Caroline State University)
Goals: research the balance of carbon, water and nutrients through the cycle of an eucalyptus forest
23
AssociationAssociationDuratex and Satipel
To define and drive the key aspects of integration:
Integration Committee
GT1 – Timberland affairs GT8 - Infrastructure
GT2 – Commercial GT9 - Legal
GT3 – Controllership GT10 – Logistics
GT4 – Finance GT11 – Marketing / Communication
GT5 – Private Pension Plan GT12 - Supply
GT6 – People Management GT13 - Technology
GT7 – Industrial GT14 - Corporate
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Creation of Value Sustainable Operation
Gains of Scale
Self-sufficiency of raw material
Complementarities of the
Operations
Geographical Diversification
Brand Awareness and Products Diversity
AssociationAssociation
25
Association Synergies
Better Practices
60%R$ 95,8M/yearGains of
Scale 22%
Overlap 18%
Capture of Synergies
Total of SynergiesOther SynergiesForest Synergies
82%
97%
55%67%
78%87% 93%
100%
100% 100%100%
90%94%
60%
70%
11% 33%
1%
100%100% 100%100%
19%
100%
2009 2010 2011 2012 2013 2014 2015 2016
AssociationAssociation
26
Extraordinary Provisions
Non Cash 31,1%
Contingent Cash 41,8%
Cash already disbursed
27,1%
AssociationAssociation
18,3 Cash already disbursed28,2 Cash contingent21,0 Non cash
R$ million
Adoption of better practices
More conservatives criteria for constituting fiscal provisions
Geographical location analysis of plants with regard to consuming markets
Optimization of logistics costs
Gains of scale
Reduction of overlaping structures
Financial and legal advice
Audit and publications
Total
3Q09 Provision HighlightsR$ million
28,1Equalization of criteria:
67,5
28,8
10,6
New operation configuration:
Trasaction costs:
27
109,085,1 64,0
54,1 68,1
3Q08 4Q08 1Q09 2Q09 3Q09
138,4 135,8196,2193,8 154,6
29,6% 30,9%26,9% 25,6% 26,7%
3Q08 4Q08 1Q09 2Q09 3Q09
2.252,6 2.286,0 2.314,72.320,32.226,0
19,9% 15,2% 11,8%9,4%11,3%
3Q08 4Q08 1Q09 2Q09 3Q09
Equity (R$ million) & ROE (%)
515,0 579,4653,8 635,4529,9
34,4%36,5%36,8%
38,6%40,3%
3Q08 4Q08 1Q09 2Q09 3Q09
Net.Rev.(R$ million) & Gross Margin (%)
Net Income (R$ million)
EBITDA (R$ million) & Margin (%)
HighlightsHighlightsRecurrent Financial Performance (pro forma)
+13,8%
+25,9%
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MDF/HDF/SDF/Laminate Flooring
29,2%
MDP26,2%
Hardboard 10,2%
Metal Fitting18,8%
Components 1,2%
Domestic Market93,3% Foreign Market
6,7%
Consolidated Net Revenue 2009
Revenue Geographical Origination 2009
R$ 1.624,3 M
Vitreous China14,4%
HighlightsHighlightsRevenue Origination
29
Construction3,3%
Resale22,9%
Other 6,4%
Industry67,4%
Retail56,0%
Construction18,5%
Home Center 14,1%
Wholesale9,0%
Other2,4%
Wood
By Geographical Region
Revenue Segments
65,6%65,6% 34,4%34,4%
84,5%
10,8%
4,7%
Net Revenue in the Domestic Market 3Q09HighlightsHighlights
30
Recurrent Financial Performance (pro forma)
Net.Rev.(R$ million) & Gross Margin (%) EBITDA (R$ million) & Margin (%)
462,1 447,8350,4 355,4 380,0
39,5% 36,5% 35,1%30,3%
37,5%
3Q08 4Q08 1Q09 2Q09 3Q09
142,2 146,8100,8 93,6 100,6
30,8%28,8%
26,3% 26,5%
32,8%
3Q08 4Q08 1Q09 2Q09 3Q09
Shipments (in ‘000 m3)
549,8 519,4416,9
464,8533,2
3Q08 4Q08 1Q09 2Q09 3Q09
HighlightsHighlights
+14,7%
+28,0%
(1)
(1) Depreciation, ramp-up of the new plants and pricing
31
Net.Rev.(R$ million) & Gross Margin (%) EBITDA (R$ million) & Margin (%)
191,7
164,5174,5
187,7199,4
42,2%
37,5%39,4%
42,4%41,3%
3Q08 4Q08 1Q09 2Q09 3Q09
51,6 49,437,6 42,2
54,0
26,9%
22,9%24,2%
27,1%26,3%
3Q08 4Q08 1Q09 2Q09 3Q09
Shipments (in ‘000 items)
4.9284.239 4.7754.682
5.310
3Q08 4Q08 1Q09 2Q09 3Q09
Recurrent Financial PerformanceHighlightsHighlights
25,3%
+11,2%
27,9%14,3%
32
Dec-08 Jun-09 Sep-09Balance Sheet Highlights:Cash 716,8 458,8 336,9 Total Assets 4.500,9 4.431,9 4.354,4 Short Term Debt 498,7 586,4 667,6 Long Term Debt 1.011,8 817,0 691,1 Total Debt 1.510,5 1.403,4 1.358,7 Equity 2.252,6 2.320,3 2.314,7 Revenue 2.445,2 1.044,9 1.624,3 EBITDA (recurrent) 744,1 274,2 428,8 Net Income (recurrent) 375,3 118,1 186,2 Risk Ratios:Current Ratio 1,6 1,2 1,2 Equity / Total Assets 50% 52% 53%Debt / Debt + Equity 40% 38% 37%Net Debt 793,7 944,6 1.021,9 Net Debt / Equity 35% 41% 44%Net Debt / EBITDA 1,1 1,4 1,6
Pro Forma
Balanced Financial StructureHighlightsHighlights
(1) jun/09 and sep/09: last 12 months recurrent EBITDA
(1)
33
dec/03
jun/04dec
/04jun/05dec
/05jun/06dec
/06jun/07dec
/07jun/08dec
/08jun/09
sep-05
jan-06
may-06
sep-06
jan-07
may-07
sep-07
jan-08
may-08
sep-08
jan-09
may-09
sep-09
dec-03
may-04
oct-04
mar-05
aug-05
jan-06
jun-06nov-0
6ap
r-07
sep-07
feb-08
jul-08
dec-08
may-09
oct-09
Interest Rate
Unemployment Rate (%)
sep/097,7
8,75
Source: BACEN Source: FGV
Consumer Confidence (base 100)
Job Creation (‘000)
Source: BACEN
sep/09253
sep/08283
sep/07251
dec/06-317
dec/07-319
dec/08-656
Source: CAGED
oct/09113,616,5
10,9
100,0
sep/09
oct/09
Improvement of Macroeconomic IndicatorsFavorable ScenarioFavorable Scenario
Source: BACEN
33
34
4,8% 4,9% 5,0%
4,0%
5,3%
3,5%
4,6%4,8%
ItauUnibanco
Banco Fator CreditSuisse
PesquisaFebraban
Santander MerrillLynch
FMI Averageexpectation
1,6% 1,7% 1,6% 1,8% 1,9%
-0,8%-3,6%
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
2,3%2,9%
5,4% 5,1%
0,2%
2005 2006 2007 2008 2009forecast
Year end GDPQuarterly GDP
2010 GDP Expectations
3,8% 3,7% 3,4% 3,4% 3,6% 3,6% 3,9%4,5% 4,8%
3,4%
jan/09
feb/09
mar/09
apr/0
9may
/09jun/09jul/0
9au
g/09se
p/09oct/
09
Evolution of the 2010 GDP Expectation (Focus Report)
(sep/09) (sep/09) (sep/09) (sep/09) (oct/09) (oct/09) (oct/09)
Favorable ScenarioFavorable Scenario
Source: BACEN Source: BACEN
Source: BACEN
Improvement of Macroeconomic Indicators
35dec-07 mar-08 jun-08 sep-08 dec-08 mar-09 jun-09
268.521 282.442 299.346 315.507340.512 348.637
0
1 0 0 0 0 0
2 0 0 0 0 0
3 0 0 0 0 0
4 0 0 0 0 0
2004 2005 2006 2007 2008 Jul08 aAgo09
2002 2003 2004 2005 2006 2007 2008 2009 2010*
Disposable Income (R$ million)
Source: IBGE
Credit Availability in the MarketGovernment, Manufacturing, Housing, Rural, Retail, Individuals (R$ bi)
1.347,4
Minimum Wage (in R$)
Source: BACEN
200,00
936,0
CAGR: 5,8%
CAGR: 12,3%
CAGR: 22,4%
506,50
sep-09
24,1% 24,5%28,1%
30,8%
41,3%45,7%
34,2%
2003 2004 2005 2006 2007 2008 set/09
Brazil: Total Credit over GDP
CAGR: 11,8%
Favorable ScenarioFavorable Scenario
Source: BACEN Source: BACEN
Improvement of Macroeconomic Indicators
36
1.360
2.111
3.383
3.920
1.000
2.000
3.000
4.000
2006 2007 2008 2009
Construction Incentive Plan – Federal Government
Sourcee: CEF e ABECIP Source: CEF e ABECIP
R$ million
Civil Construction Growth Potential
3.2396.672
11.330
16.987
0
5.000
10.000
15.000
2006 2007 2008 2009
R$ million
CAGR: 73,7%
43.471 43.789
48.593
57.716
40.000
45.000
50.000
55.000
60.000
2006 2007 2008 2009
CAGR: 9,9%
CAGR: 42,3%
Increase of the financing limit, through FGTS, from XR$ 350.000 to R$ 500.000;
Tax exemption for building materials (IPI reduction) Xextended until December/09;
Mortgage credit availability;
Extension of financing terms
Housing deficit: 7,2 million units.
Net Revenue from IMOB Construction Companies* **
* 2006, 2007 and 2008: revenues sum of respective companies. 2009: Bloomberg consensus.** Bovespa Construction Index (contemplates: Agra, BR Malls, Brookfield, Camargo Correa, Cyrela, Gafisa, MRV, PDG, Rossi, Tecnisa and Tenda).
Financed Units Monthly Average (FGTS+SPBE) Financing Monthly Average (FGTS+SBPE)
Favorable ScenarioFavorable Scenario
+18,8%
+15,9%
+49,9%
37
1.372,5 1.394,4
1.826,72.032,5
473,1 544,4 618,9
2.146,8
2004 2005 2006 2007 2008 1Q09 2Q09 3Q09
2.157,9 2.097,9 2.179,7
2.545,1
517,7 562,3 626,8
2.561,7
2004 2005 2006 2007 2008 1Q09 2Q09 3Q09
CAGR: 4,4%
CAGR: 11,8%
MDP
MDF
(Source: ABIPA)
(Source: ABIPA)
+13,7%
+11,5%
Total Consumption of Panels in Brazil (in ‘000 m³)
Favorable ScenarioFavorable Scenario
+21,1%
+30,8%
38
Duratex MomentumDuratex Momentum
Favorable Scenario
Leadership within its segments
New industrial plants
geographically well located
idle capacity
Corporate Governance
39
DisclaimerDisclaimer
The information contained herein was prepared by Duratex S.A. and does
not constitute an offering material, to subscribe for or purchase any of the
Company’s securities. This material also brings general information about
Duratex S.A. and its markets. No representation or warranty, express or
implied, is made concerning, and no reliance should be placed on, the
accuracy, fairness or completeness of the information presented herein.
The Company can give no assurance that expectations disclosed in this
presentation will be confirmed.
11 November 2009.
40
AnnexAnnexExtraordinary events
(1)
(1) Incidents on COGS: Jundiaí Hardboarde Shutdown, MDP in Taquari and start-up of MDF in Uberaba
41
11 November 2009
CORPORATE PRESENTATION