Earnings Call 3Q13 November 8 th , 2013
Earnings Call 3Q13
November 8th, 2013
On
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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 and Method
▪Agility and Transparency ▪Respect for Safety, Environment and Communities
▪Customer ▪People
Our values
2
Talc Business Expansion
Phase I expansion:
- Increase capacity from 44kton to 60kton in 2015
- Up to R$ 20 million capex
Moving forward with our commitment to double
the Talc Business in 3 to 5 years
3
South America
4
Source: ¹WSA
Refractory Solutions Sales - Steel
Crude Steel Production¹ (million tons) - Main markets
Volume (000’ tons)
North America EU-27
Sales to Steel Segment
Revenues (R$ million)
-9%
-3%
3Q13
210,2
2Q13
230,6
3Q12
217,5
-3%
9M13
656,4
9M12
679,0 +2%
+10%
3Q13
481,8
2Q13
473,1
3Q12
438,5
+5%
9M13
1.392,1
9M12
1.320,6
3Q12 2Q13
+4%
12,1
+3%
11,7
3Q13
11,6
35,3
9M13
34,8
-1%
9M12
30,0
3Q12 2Q13
29,0
3Q13
30,2
+1%
+4%
9M13
92,7
-4%
88,9
9M12 2Q13
42,9
3Q13
-7%
3Q12
39,9
-1%
40,5
129,7
9M13
123,8
9M12
-5%
9M13 9M12
39%
24%
23%
13%
22%
23%
15%
41%
North America Others
South America Europe
5
Sales to Industrial Segment
Refractory Solutions Sales – Industrial Segment
Volume (000’ tons) Revenues (R$ million)
-12%
+8%
3Q13
35,5
2Q13
40,2
3Q12
33,0
+6%
9M13
124,9
9M12
118,0 -10%
+16%
3Q13
89,1
2Q13
98,9
3Q12
76,7
9M13
306,3
9M12
276,0
+11%
9M13 9M12
53%
17%
10%
20% 11%
17%
12%
61%
North America Others
South America Europe
90,7%
Refractory Solutions Sales and Margin - Consolidated
6
Volumes (000’ tons)
Revenues (R$ million)
Gross profit and margin (R$ million; %)
-9%
-2%
3Q13
245,7
2Q13
270,9
3Q12
250,5
3Q13
180,2
31,6%
2Q13
191,1
33,4%
3Q12
162,0
31,4%
-2%
9M13
781,3
9M12
797,0
3Q13
-0%
+11%
570,9
2Q13
572,1
3Q12
515,2
+6%
1.596,6
9M13 9M12
1.698,4
9M12
562,2
509,2
9M13
31,9% 33,1%
9M13
9M12
42%
23%
21%
14%
20%
22%
14%
44%
North America Others
South America Europe
7
Revenues (R$ million) Gross profit and margin (R$ million; %)
Revenues (R$ million) Gross profit and margin (R$ million; %)
Minerals
Services
Minerals and Services Performance
Services
42,4
3Q12
34,6
-11%
+9%
3Q13
37,6
2Q13
+5%
-40%
3Q13
29,7
2Q13
28,3
3Q12
49,9
3Q13
15,6
41,6%
2Q13
20,8
49,0%
3Q12
15,6
45,1%
6,6
13,2%
3Q13
4,2
14,0%
2Q13
4,7
16,6%
3Q12
+13%
9M13
114,3
9M12
101,3
9M13
49,0
42,9%
9M12
42,6
42,1%
-34%
9M13
86,1
9M12
131,0 9,8%
9M13
12,5
14,5%
9M12
12,8
8
Consolidated Sales (R$ million)
Per Segment
Quarter YTD
-1%
+6%
3Q13
638,2
2Q13
642,7
3Q12
599,7
+4%
9M13
1.898,9
9M12
1.828,9
7,2% 5,5%
87,3%
4,5% 6,0%
89,5%
Services Minerals Refractories
9M12 9M13
9
Gross profit, EBITDA and Net Income (R$ million)
Gross profit
EBITDA and ADJUSTED EBITDA (excluding real estate sale)
Net Income
ADJUSTED ADJUSTED
3Q13
200,0
31,3%
2Q13
216,5
33,7%
3Q12
184,1
30,7%
3Q13
76,5
12,0%
2Q13
123,2
19,2%
3Q12
84,2
14,0%
3Q13
-21,7
-3,4%
2Q13
23,6
3,7%
3Q12
10,7
1,8%
9M13
623,7
32,8%
9M12
564,7
30,9%
9M13
315,9
16,6%
9M12
277,0
15,1%
9M13
28,2
1,5%
9M12
75,8
4,1%
15,0% 12,0%
2Q13
89,9
15,7%
101,0 76,5
3Q13 3Q12
293,6
9M13 9M12
15,5%
282,8
15,5%
10
CAPEX, Operational cash flow and working capital (R$ million)
Working capital
CAPEX OCF
61,7
3Q13
61,6
2Q13
36,0
3Q12 9M13
115,4
9M12
244,6
3Q12
34,8%
835
3Q13
976
38,2%
2Q13
934
36,3%
1Q13
877
35,5%
4Q12
811
33,2%
Working Capital
% of sales
9M13
121,1
9M12
179,8
3Q13
18,8
2Q13
79,4
3Q12
71,4
11
*EBITDA excluding nonrecurring
Debt and Leverage
Total
Amortization Schedule (R$ million) Net Debt per currency
Excluding Perpetual Bond
*EBITDA excluding nonrecurring
Others 0%
-3%
EUR 20%
13%
USD 58%
104%
BRL 21%
-14% Sep-13
Dec-12
3Q13
382
1.369
3.58x
2Q13
397
1.205
3.04x
1Q13
401
1.059
2.64x
4Q12
373
1.058
2.84x
3Q12
358
1.031
2.88x
Net debt / Ebitda Ebitda Net Debt
2Q13
397
639
1.61x
1Q13
401 545
1.36x
4Q12
373 536
1.44x
3Q12 3Q13
520
1.45x
382
803
2.10x
358
Net debt / Ebitda Ebitda Net Debt
2018+
1.493
927
566
2017
76
2016
78
2015
129
2014
32
2013
16
Sep-13
456
Cash position Amortization Perpetual bond
12
Octavio Pereira Lopes CEO
Eduardo Gotilla
Global Finance & IR Director
Daniel Domiciano Silva Investor Relations
Phone: 55 11 3152-3202/3241
[email protected] www.magnesita.com
Investor Relations contacts