ubs latam one on one conference.ppt [read-only] · earnings last 12 months : ... ability to...
Post on 01-May-2018
218 Views
Preview:
TRANSCRIPT
1
Disclaimer
This presentation may contain projections or other forward-looking statements related to Masisa that involve risks and uncertainties. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. There is no assurance that the expected events, trends or results will effectively occur. These declarations are made on the basis of numerous assumptions and factors, including general economic and market conditions, industry conditions and operating factors. Any change to these assumptions or factors could cause the present results of Masisa and Masisa’s planned actions to differ substantially from the present expectations.
All forward-looking statements are based on information available to Masisa on the date of its posting and Masisa assumes no obligation to update such statements unless otherwise required by applicable law.
2
Contents
Investment Highlights
Masisa in Brief
Corporate Strategy
Business Units
Sustainable Development
Masisa´s Financial Performance
3
Investment Highlights
Leading producer of wood boards for furniture in Latin America (#1 in MDF & PB)
Diversified manufacturing base and end markets (Latin America, US)
Sound financial profile (Investment Grade by Fitch)
241Th. hectares of planted forests (pine & eucalyptus - Strategic asset)
Competitive Strategy – Differentiation (Innovation & Customer intimacy)
Established and expanding associated distribution network (Placacentros)
Favorable growth prospects (Product penetration & housing deficit)
Commitment to sustainable development
4
Masisa in brief
Based in Santiago, Chile
Listed on NYSE (ADR) and on the Santiago Stock Exchange
56% of our sales are in Investment Grade countries
Note: Please note that Wood Boards include Retail sales, which totaled approx. US$ 152MM in 2006.
USA26.0%
Chile 16.3%
Mexico13.2%
Brazil16.4%
Ven 10.4%
Arg 7.9%
Others9.8%
Wood Boards
62%
Solid Wood33%
Forestry5%
Sales by countryUS$ (2006)
Sales by Business UnitUS$ (2006)
Sales by productUS$ (2006)
MDF mouldings
7%
Finger Joint
Mouldings11%
Sawn wood8%
Others7%
Particle Boards
21%
Solid wood doors4%
OSB5%
MDF37%
5
Masisa in brief
Solid Financial Profile
Assets : US$ 2,038 MM as of March 2007Equity : US$ 1,182 MM as of March 2007Sales last 12 months : US$ 890.4MM EBITDA last 12 months : US$ 154.5MMEarnings last 12 months : US$ 31.6MMFinancial Expense Coverage last 12 months(1) : 4.64xFinancial Leverage last 12 months(2) : 0.51xRisk Rating :
Local (Fitch Ratings and Feller Rate) : A
International ( Fitch Ratings) : BBB-
(1) Financial Expense Coverage : Ebitda/Interest Expense
(2) Financial Leverage : Funded Bebt/(Equity + Min. Interest)
7
Corporate Strategy( Oct. 2006: definition of Competitive Strategy & Core Business )
Core Business :
Production and commercialization of wood boards for furniture (MDF & PB) in Latin America.
Implications :
Approach towards asset portfolio, growth strategy & Capex.
Competitive Strategy :
Innovation & Customer intimacyTake advantage of attractive growth opportunities in Latin America|Expand & Strengthen retail distribution networkCommitment to Sustainable DevelopmentGenerate value to our shareholders
8
Corporate Strategy
Other business units are considered synergic to the Wood Board business
Wood byproducts
Secure wood fiber supply
Positions Masisa® brand
Segmentation & Pricing
Demand generator
Wood Boards
Forestry
Solid Wood
Retail
Particle boardMDF OSBSawnwood FJ
mouldings Doors
855,000 m3(*) 1,060,000 m3 350,000 m3
MDF mouldings
Capacity : 707,000 m3 168,000 m3 42,000 m3 188,400 m3
(*) Does not include the new 340,000m3 MDF plant that will start operations by mid 2007, in Cabrero, Chile.
10
6.2%
15.4%
5.2%
15.2%
50.1%
9.7%
Latam (South) Latam (North) United States
PB MDF
Wood Board Business UnitLatin American Market Outlook - Demand
Board Demand Growth in the main end markets (CAGR 1996 - 2005)
Source: FAO, RISI, ABIPA. Info as of Dec 2005.- Latam. (South) corresponds to South America & Latam. (North) corresponds to Central America, the Caribbean region and Mexico.
11
Wood Board Business UnitLatin American Market Outlook - Demand
MDF/PB have significant advantages vs. solid wood for furniture manufacturing
Better cost/quality relation (6 to 7 times cheaper)Better milling and transformation attributesStrong demand growth (historical and expected)
Long term demand growth for Masisa’s products:
Housing & Mortgage Loan Deficits
6.7
4.3
2.9 2.7 2.6
1.2 1.20.5
Brl Mex Ven Col Arg Per Ecu Chl
Housing deficit per country—mm houses
Source: Various sources, including central banks, government ministries and third party research sources as compiled by Titularizadora Colombiana as of June 2005
$ 255 $ 138 $ 103 $ 58 $ 54 $ 10 $ 9
$ 4,220
Chl Mex Arg Col Per Ecu Ven Brl
Mortgage per capita (US$)
12
Wood Board Business UnitLatin American Market Outlook - Demand
Relatively low MDF & PB penetration in Latin America
MDF PB
Source: FAO, World Bank. Info as of Dec 2005.
Argentina Brazil
Canada
Chile
China
Colombia Korea
Spain
EEUU
Finland Hungary
Israel
Japan Mexico
Norway
Holland
United
Kingdom
Sweden
Switzerland Venezuela
0
20
40
60
80
100
120
0 10 20 30 40 50
Income per cap. PPP (Thou. US$/year/inhab)
Cons
umpt
ion
per
cap.
(m3/
year
/tho
u. in
hab)
Korea
United
Kingdom
Switzerland
Brazil
Canada Chile
China
Colombia
Denmark Spain
EEUU
Finland
Hungary
Israel Japan
Mexico Norway Holland
Sweden
Argentina
Germany
Venezuela
0
5
10
15
20
25
30
35
40
0 10 20 30 40 50
Income per cap. PPP (Thou. US$/year/inhab.)
Cons
umpt
ion
per
cap.
(m3/
year
/tho
u. in
hab)
13
Wood Board Business UnitMDF, PB & OSB (Dec. 2006)
Masisa’s Core Business (MDF & PB)
63% of Total Sales, US$ 555MM
Annual growth during 2006, +19.7%
70% of Consolidated EBITDA
45% of Total Assets
New 340,000m3 MDF plant in Cabrero, Chile will start operations by June 2007
Market Leader in Latin America (#1 or #2 in all markets, except Brazil #3)
All operations scheduled to have ISO 14001 and OHSAS 18001 certification by the end of 2007.
Source: Masisa’s estimate as of Dec 2006.
Masisa’s Market Share in Latin America
PB MDF Mel2006 23% 33% 19%
Mexico
PB MDF Mel2006 25% 49% 17%
ColombiaPB MDF Mel
2006 72% 82% 68%
Venezuela
PB MDF Mel2006 35% 53% 46%
Argentina
PB MDF Mel2006 1% 19% 14%
Brasil
PB MDF Mel2006 12% 30% 12%
Ecuador
PB MDF Mel2006 28% 61% 38%
Peru
PB MDF Mel2006 8% 43% 14%
Central America
PB MDF Mel
2006 19% 30% 24%
Total Market Share in Latin America
PB MDF Mel2006 77% 45% 69%
Chile
14
Wood Board Business UnitOverview 2007
1. MDF Plant in Cabrero. Operations start by mid 2007. Operating at full capacity in 2008.
2. Strong demand for MDF and PB continues in all Latin American countries, as evidenced in a 27.7% and 21.7% growth in sales of MDF and PB, respectively during 2006. Ability to transfer cost increases into prices, continues in 2007.
3. Costs: expected increases in resin, wood and energy. Increase of resins costs due to strong demand for urea.
4. Overall, margins should remain stable (similar to those of 2H’06). Proven ability to transfer cost increases into prices.
5. Growth strategy for Brazil.
16
7 25 35 54 52 51 52
34 54 63 7126
3240 40
9
26
3442
47
5
1921
21
7
10
2128
22
31
3741
18
0
50
100
150
200
250
300
350
1992 1995 2000 2003 2004 2005 2006
# of
Pla
cace
ntr
os
Chile Mexico Brazil Argentina Peru Colombia Other¹
Retail Business UnitPlacacentros (Dec. 2006)
Placacentro is a licensed retail chain, tailored to improve productivity of carpenters and small contractors.
US$ 152MM in sales in 2006: (approx. 27% of total wood board’s sales).
300 Placacentros as of Dec. 2006.
Focus will be in transforming the retail chain into a solid and effective commercial network:
Migration from brand license level agreements, to franchise contracts. Migration started Dec. 2006.
Improvements in product mix, market intelligence, store layout and quality service.
Creation of Procurement Units.
Strong growth perspectives (market demand & penetration of Masisa’s sales).
¹ Includes: Ecuador, Colombia, Venezuela, Paraguay, and UruguayInfo as of Dec. 2006
Placacentros – a growth story
7
300
17
Retail Business UnitOverview 2007
1. Placacentros migration from brand license contracts to franchise level agreements.
• Number of Placacentros expected to be migrated in 2007: 143.
• Number of Placacentros migrated during Q1’07: 9. Adding to 8 migrated in Q4’06.
2. Definition of Placacentros product mix and marketing strategy. Target: Placacentros to become Masisa’s most profitable distribution channel (Today: #1 or #2 in every market).
• Development and application of Placacentros Operating Manual (service level, procedures, layouts).
3. Creation of 1 additional Procurement Unit for Placacentros in Brazil (June), adding to the ones operating in Mexico, Chile and Peru.
• Internet sales platform in all the PU´s: Operating. Platform to be replicated in upcoming PU in Brazil.
4. Growth in # of stores: +19 Placacentros during 2007. Focus: profitability increase.
19
Solid Wood Business UnitMouldings, Doors & Sawn Lumber (Dec. 2006)
33% of Total Sales, US$ 288MM
Sales growth during 2006, +18%. Good performance in terms of sales, in spite of U.S. housing market downturn.
4% of Consolidated EBITDA
15% of Total Assets
Natural hedge for operations in LATAM (U.S. export business)
Guarantees sawing capacity in areas of influence
Focus, optimization of the operation.
All operations scheduled to have ISO 14001 and OHSAS 18001 certification by the end of 2007
Expected growth - US mouldings market – mm bF
Breakdown of US moulding market (m³ million)
0.0
1.0
2.0
3.0
4.0
5.0
1990 1993 1996 1999 2002 2005
Local Production Imports
Source: RE Taylor. Dec 2005
0
500
1,000
1,500
2,000
2,500
1992
1994
1996
1998
2000
2002
2004
2006
2008
Other Mouldings Finger Joint
MDF Plastics
Source: RE Taylor. Dec 2005
20
Solid Wood Business UnitOverview 2007
1. Optimize cost structure.
• First event: (Jan. 2007) Closure of Charleston MDF Moulding Plant (36,000m3). In the U.S. the Company will focus only in commercialization, not production. Estimated annual cost savings, excluding one-time restructuring costs: US$ 3.0MM.
• Consolidation of moulding operations in Cabrero, Chile, using existing capacity currently located elsewhere.
2. Mouldings: U.S. market for mouldings does not exhibit signs of recovery in the short term (at least until 2H’07).
• Finger-joint mouldings being the most affected due to high correlation with house startings. Prices expected to remain stable.
• MDF mouldings stable in terms of price. Focus on profitability of exports, probably sacrificing volume. MDF not sold as mouldings to be commercialized as boards in Latin America.
3. Solid wood doors: stable in terms of volume, improving in margin as a result of a price increase of US$ 2 per door in 1Q’07. In addition improvement in product mix and client base.
4. Sawn lumber: stable market outlook. Pricing increases expected, reflecting costs increases (phitosanitary requirements and logistics). Focus during 2007 in increase market diversification (U.K., North of Africa and China).
22
0.010.020.030.040.050.060.070.080.0
Age
Th has
Pine 35.9 27.7 47.5 67.3 34.1
Eucaliptus 8.8 15.8 2.3 0.6 0.6
0-5 6-10 11-15 16-20 21+
Forestry Business Unit (Dec. 2006)
Strategic Asset
Secure fiber supply for industrial operations
241Th hectares planted of pines and eucalyptus
5% of Total Sales
26% of Consolidated EBITDA
40% of Total Assets
Young age profile in Chile and Argentina ensures increasing harvesting volumes
Development of Greenfield projects
All operations under Forest Stewardship Certification (FSC), ISO 14001 and OHSAS 18001 certification
Age Profile as of Dec. 2006
Harvest year
Location of Masisa´s Forests as of Dec. 2006
Chile36%
Argentina15%
Venezuela42%
Brazil7%
Chile Argentina Venezuela Brazil
23
Forestry Business Unit Overview 2007
1. Leverage of forestry assets - First transaction in process of closure:
• Binding agreement signed to sell 90% of the shareholding in ForestalArgentina S.A. (FASA).
• FASA's assets valued at US$107.2 million.
• FASA has 38,000 hectares of pine and eucalyptus forests and plantable landholdings.
• The buyers are the Chilean company Los Boldos S.A., belonging to Diversified International Timber Holdings LLC, a US forestry investment company (80%) and the Chilean company GrupoNuevaS.A., the majority shareholder of Masisa (10%).
2. Secure fiber supply in the long term – support industrial growth:
• Development of Greenfield projects.
25
Commitment to Sustainable DevelopmentMasisa S.A. joined the Chicago Climate Exchange (“CCX”) – Mar. 2007.
Masisa: Positive CO2 e balance.
Commitment to reduce CO2 e emissions by 6% during 2003-2010 period ( compared to base line period 1998-2001).
Value creation opportunity.Energy cost reduction culture. Energy is the third most important element in Masisa’s cost structure (approx. 12% of total consolidated production costs). Brand positioning (reputation).Carbon surplus to be commercialized as carbon bonds.Anticipate market trends/regulations.
In line with Masisa’s business plan and forest expansion strategy (Greenfield projects – high level of CO2 capture).
2,326
309
2,017
0
500
1,000
1,500
2,000
2,500
Total
2003 - 2010 Period
CO
2 eq
. Th.
tons
/per
ann
um
Emmission (Th. ton) Capture (Th. ton) Positive Balance (Th. Ton)
Masisa’s CO2 emission and capture estimates (2003-2010)
Note: Data to be confirmed and audited by CCX during 2007.
26
Masisa´s Recognitions
One of the Top 5 companies with the best Corporate Governance in Latin America, award given by MZ Consult.
Masisa receives the “Leaders for a Living Planet” award, given by the World Wildlife Fund.
Award, “Corporate Standard Setter”, given by Rainforest Alliance.
Better and more transparent relations with our shareholders and with the investment community.
28
Performance
Consistent growth on Sales, while maintaining the asset base (approx. US$ 2.0Bn).
Growth mainly driven by the MDF and PB business.
Attractive growth potential in the region.
887778
890
651
480
744
0
200
400
600
800
1,000
2003 2004 2005 2006 *TTM´06 *TTM´07
Sale's EvolutionUS$ MM
CAGR: +22,7%+14,5%
*TTM: Trailing twelve months ended on March 31 of 2006 and 2007 respectively.
29
Performance
Successful commercial efforts in increasing prices.
232
284327
375
273246
220194
0
50
100
150
200
250300
350
400
2004 2005 2006 M ar-07PB M DF
Price EvolutionUS$ / m³
30
Performance
Sales’ growth while maintaining the asset base
Total Assets approx. US$ 2.0Bn
Sales / Total Assets
4 4 %4 4 %
3 5%
3 8 %
30%
35%
40%
45%
50%
2 0 0 4 2 0 0 5 2 0 0 6 *TTM '0 7
*TTM: Trailing twelve months ended on March 31 of 2007.
31
Adequate operational cash flow generation (EBITDA), despite costs pressures and non recurring costs/expenses.
Performance
* EBITDA: Operational Income + Depreciation + Intangibles Amortization + Depletion** TTM: Trailing twelve months ended on March 31 of 2007 and 2007 respectively
EBITDA*US$ MM
155154 149
85
167 158
020406080
100120140160180
2003 2004 2005 2006 **TTM´06 **TTM´07
32
Performance
Increased profitability in 2006.
* Net Income in 2004 positively affected by non-recurring profit related to the sale of forestry assets (+US$ 44MM).
** TTM: Trailing twelve months ended on March 31 of 2007.
44
3229
1326
0
10
20
30
40
50
60
*2004 2005 2006 **TTM '07
Net IncomeUS$ MM
33
Improvements on Performance
Growing Capex in Boards and in securing wood supply (Forestry).
Capex for 2007: US$ 140MM approx.
121.8
67.3
42.4
020406080
100120140
2004 2005 2006
Wood Boards Solid Wood Forestry Others
CapexUS$ MM
34
Funded Debt (Net) & Average Interest Rate
549552563
6.98% 7.01%
6.44%
0
100
200
300
400
500
600
700
2004 2005 2006
US$ MM
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
Funded Debt (Net) Average Interest Rate
Net Funded Debt has been slightly reduced, coupled with improvements in average interest rate (refinancing efforts).
Net Funded Debt & Average Interest RateUS$ millones
35
Conclusion: Masisa is a value oriented organization
Every business unit will be managed by EVA® (1) (Economic Value Added) in 2007
Management’s compensation (bonus) linked to EVA ®
Competitive Strategy – Differentiation (Innovation, Customer intimacy, Commitment to sustainable development)
Placacentros (key commercial differentiator)
Focus on taking advantage of favorable market perspectives (consolidate competitive position)
(1) EVA ® is a registered trademark from Stern Stewart & Co.
top related