brazil 2010 eleventh annual ceo conference€¦ · eleventh annual ceo conference luiz eduardo...

Brazil 2010Eleventh Annual CEO Conference

Luiz Eduardo Moreira Caio

PROMOTING CONSUMER DEMAND AT THE POINT OF SALE

Ice Cold Merchandising (ICM)

2

Key Accounts Metalfrio SolutionsPoints of Sales

Bars / Convenience Stores / Kiosks / Supermarkets / Restaurants

North America

Latin America

Brazil

Europe + Turkey + Middle East

Russia

Ice Cold MerchandisingSolutions

New TechnologySolutions

Service Solutions

CO2 Coolant

Removable Deck

3

590Americas

133 Europe & Mid-East

DistribuitorsTA offices

PROMOTING CONSUMER DEMAND AT THE POINT OF SALE

60’s – 80’s 90’s 2000 - 2005 2006 - 2008 2009 - ONWARDS

Establishing key accounts

Developingafter-sales

Entrepreneurial phase

Customized automation

Process Control

Engineering phase

Expansion in Brazil &

leadership in LATAM

Full Service Provider

Launching platform for

Intl. expansion

International expansion in high growth consumer markets

Building path to

global ICM leadership

Establishing International

Platform (IPO 2007)

Multinational phase

No. 4 most international company in Brazil(1)

(1) Research by Fundação Dom Cabral, 20094

TRACK RECORD: 50 YEARS WITH CONSUMER BRANDS

5

BRAZIL

2005 2006 2007 1H08 2H08 20092010

ONWARDS

Reubly

assets

acquisition

Caravell / Derby

acquisiition

(Jul)

Três Lagoas

plant

kick-off

(Oct)

Coldmotion

acquisition

(Dec)

Production kick-off

Turkey plant

IPO

Bovespa

Nietoacquisition

(Apr)

EnerfreezerAcquisition

(Aug)

Senocakacquisition

(Mar)

New plant completion

Manisa (Sep)

Três Lagoas

Phase 3

Investment

kick-off

MEXICO

USA

DENMARK

RUSSIA

TURKEY

INDIA / ASIA

2004

INSTALLED CAPACITY (‘000)

325 325 400 1,060 1,269 1,269

Consolidation

of Mexico

Consolidation

of Turkey

Consolidation of

Denmark + Russia

Três Lagoas

Phase 2

(Jun)

Phase 3

completion

(4Q10)

04-09 NET

REVENUES

4x

04-09EBITDA

(ADJUSTED)

10x

04-09PRODUCTION

CAPACITY

4x

04-09UNITS

3x

PATH TO GLOBAL LEADERSHIP IN ICM

Caravell / Derby

acquisiition

(Jul)

GLOBAL FOOTPRINT 2009

6

Russia

• 5% of sales

• Installed capacity -140k units/year

• 23% utilization rate

Turkey

• 21% of sales

• Installed capacity -400k units/year

• 33% utilization rate

EUA – Boerne

Sales Office and Distribution Center

Mexico

• 16% of sales

• Installed capacity –200k units/year

• 43% utilization rate

Brazil

• 59% of sales

• Installed capacity –529k units/year

• 56% utilization rate

Plants

Sales Offices

Total Capacity 1,270k units

Denmark

Sales Office and Distribution Center

7

PlantCelaya - Mexico

Distribution Center Boerne-USA

GLOBAL FOOTPRINT 2009 - AMERICAS

PlantTrês Lagoas - Brazil

8

PlantManisa - Turkey

Sales Offices / Distribution Center Aalestrup-Denmark

GLOBAL FOOTPRINT 2009 - EUROPE

Display Case Market

US$ 23.4 billion in 2007(1) US$ 4.3 billion in 2007(1)

9 (1) Freedonia Group

COMMERCIAL REFRIGERATION: A FRAGMENTED MARKET...

Commercial Refrigeration Market

18%

8%

11%

37%

26%

Display-cases

Ice Machines

Vending Machines

Parks & Other Products

Walk-in Coolers

t

Research by Euromonitor International

Ice Cream Market (2008)Soft Drinks Market (2008) Beer Market (2008)

CAGR 03-08 = 7.1%CAGR 03-08 = 9.5% CAGR 03-08 = 7.8%

Global market for ice cream, beer and soft drinks reached US$1,048.3 billion in 2008

10

...IN HIGH GROWTH CONSUMER SEGMENTS

Global market of

US$70.1 billion (2008)

Global market of

US$414.3 billion (2008)

Global market of

US$563.9 billion (2008)

FINANCIALHIGHLIGHTS

WHERE WE COME FROM…

Adjusted EBITDA (R$ million) (1) Net Income (R$ million)

Units Sold (‘000) Net Revenues (R$ million)

CAGR 05-0927.8%

CAGR 05-0931.5%

CAGR 05-0966.5%

12

(1) EBITDA adjusted for FX variations and tax incentive (new GAAP, 11.638); IPO expenses, non-recurring expenses, restructuring expenses and stock option plan.

(in R$ mn) 2007

Net Revenues 576

Gross Profit Margin 13.7%

SG&A (72)

Other op. income (26)

EBITDA (9)

Adjusted EBITDA(1) 37

Adj. EBITDA Margin 6.3%

D&A (10)

Financial result 31

Income tax(2) (11)

Net Income 1

Gross Profit margin going forward

Further migration of production to 3 Lagoas, Brazil

Internal production of key components

Absorption of production capacity

(1) Adjustments ‘07: FX variations and tax incentive (new GAAP, 11.638); IPO expenses and M&A related non-recurring expenses. Adjustments ‘08: FX variations and tax incentive (new GAAP, 11.638); M&A expenses and non-recurring expenses related to restructuring of production facilities. Adjustments ‘09: non-cash SOP provision.

Income Statement highlights

WHERE WE ARE GOING…

1Q08 2Q08 3Q08 4Q08

157 234 184 151

14.2% 17.2% 12.0% 0.1%

(17) (27) (27) (34)

1 (13) 16 (36)

8 7 20 (59)

10 20 10 (2)

6.6% 8.7% 6.3% -1.1%

(3) (8) (9) (11)

1 3 (5) (35)

(4) (7) 0 13

2 (5) 6 (92)

1Q09 2Q09 3Q09 4Q09

130 189 141 184

14.4% 21.9% 21.7% 20.9%

(21) (27) (24) (30)

5 5 3 6

3 24 14 20

7 25 15 21

5.7% 13.0% 10.8% 11.2%

(4) (5) (5) (5)

(22) 10 6 14

2 (9) (2) (10)

(17) 20 13 19

EBITDA margin going forward

Consolidation of restructuring program

Dilution of SG&A

1

2

1 2

Capacity utilization (2 shifts)(3) 48% 54% 63% 50% 48% 39% 55% 43% 56%

13

(2) Income tax, social contribution and minority shareholder interest.

(3) Seasonal production volumes take utilization up to 65% (2 shifts)

(in R$ mn) 4Q07

Invested capital(1) 272

Working capital (WCap) 182

WCap as % of net revenues 26%

Receivables (days) 59

Inventory (days 69

Suppliers (days) 38

Cash cycle 89

Net debt (54)

Net debt / EBTDA(3) n.a.

Working capital

Consolidation of production sites

Process revision

(1) Excluding Goodwill from acquisitions (mainly Klimasan).

(2) Consolidation of the Klimasan balance sheet without the corresponding P&LAdjusted, the days of receivables, inventory, suppliers and cash cycle are 74, 85, 42 and 118, respectively.

(3) Year-end adjusted EBITDA divided by net debt at end of period.

Operational highlights

WHERE WE ARE GOING…

1Q08 2Q08 3Q08 4Q08

420 426 460 372

309 306 312 207

49% 33% 42% 34%

101 81 91 82

110 67 85 76

58 37 39 43

153(2) 112 136 115

178 180 204 218

4.6x 4.6x 5.2x 5.6x

1Q09 2Q09 3Q09 4Q09

358 320 285 274

205 164 134 127

39% 22% 24% 20%

84 59 57 56

96 60 70 52

52 43 45 46

128 76 83 62

220 136 86 111

3.3x 2.0x 1.3x 1.6x

Net debt

Improved operational performance

1

2

1 2

14

• Listed on the Novo Mercado,

BM&FBovespa Stock

Exchange

• 25% minimum dividend payout ratio

• Board of Directors

– 3 directors indicated by Artesia shareholders

– 3 independent directors

– 8 annual board meetings

• 25% minimum dividend payout ratio

• All employees are eligible to participate in profit

sharing plan

– Over 40 associates eligible to participate in stock

option plan

Superior Governance Standards

• Investor Relations team and Investor Relations Website

• Simultaneous release in Portuguese and in English

High Standards of Corporate Disclosure

15

CORPORATE GOVERNANCE AND TRANSPARENCY

Ownership Structure

Luiz Eduardo Moreira CaioTel: +55 11 2627 9001

ri@metalfrio.com.br