www.duratex.com.br

December/2003

Duratex S.A.

Public company traded in stock markets (BOVESPA) since 1951Number of outstanding shares as of January 31st: 11.782.716.987

Common: 37,4%Preferred: 62,6% (80% tag-along rights)

Itaúsa85,5%

Others14,5%

ON’sItaúsa24,4%

Pension Funds23,9%

Foreign Investors

28,7%

Others21,7% Treasury

1,3%

PN’s

Preferred Stock’s Performance

During the year of 2003, Duratex preferred stock was traded onevery working day, presenting an appreciation of 59,6%.

1st Quarter 02 418 315.400 14.623 244,3

2nd Quarter 02 469 396.100 19.838 316,0

3rd Quarter 02 543 756.600 30.051 458,0

4th Quarter 02 739 806.100 35.442 547,0

2002 2.169 2.274.200 99.954 391,3

1st Quarter 03 675 614.400 31.947 525,7

2nd Quarter 03 817 690.300 40.577 662,7

3rd Quarter 03 1.454 1.609.800 99.159 1.502,0

4th Quarter 03 1.740 1.399.400 102.329 1.574,3

2003 4.686 4.313.900 274.012 1.066,2

Var. % (2003 - 2002) 116,0% 89,7% 174,1% 172,4%

Deals Shares Traded (1,000)

Traded Volume (R$ 1,000)

Daily Average Volume (R$ 1,000)

Preferred Stock’s Performance

Duratex PN X Stock Indexes100 Base: from 01/31/03 to 01/31/04

Duratex PN X Stock Indexes100 Base: from 01/31/03 to 01/31/04

80,8 %80,8 %

99,7 %99,7 %

61,6 %61,6 %

112,1 %112,1 %

80100120140160180200220

jan-0

3feb

/03

mar-03

apr/0

3may

/03

jun-0

3jul

-03

aug/

03se

p/03

oct/0

3no

v-03

dec/0

3jan

-04

DURATEX IBOVESPA IBX FGV 100

Business Segments

HardboardHardboardParticle BoardParticle BoardMDF/HDF/SDFMDF/HDF/SDFLaminate FlooringLaminate FlooringCeiling & Wall Paneling

Metal FittingsMetal FittingsVitreous ChinaVitreous ChinaAccessoriesAccessories

Ceiling & Wall Paneling

Distribution Channel

Retail80%

Constructors4%

Wholesale6%

B2B + Te lemktg

6%

Others4%

Furniture Makers

64%

Retail20%

Civil Construction

7%

Others9%

Capex (US$ M)

59,7

113,2

59,3

75,9

36,0

63,9

121,1

94,5

54,4

1995 1996 1997 1998 1999 2000 2001 2002 2003

Total Capex from 1995 to 2003: ~ US$680M2004: expected Capex: ~US$35M

Capex - Highlight

MDF / HDF / SDFMDF / HDF / SDF

Location: Botucatu/SPTotal Invested: US$86MProduction Capacity: 400.000 m³/yearLeadership within MDF and HDF production

capacityState of the art technology that allows the

manufacturing of SDF panelsStrategically located

Ramp-up:Acumulated production 2003: 129.200 m³4Q03 monthly average production: 18.200 m³

Capex - Highlight

Particle BoardParticle Board

Location: Itapetininga/SPProduction Capacity: 500.000 m³/year

State of the art technology that allows the manufacturing of panels with a more dense surface

Better finishing possibilities

Capex - Highlight

HardboardHardboard –– CutCut--toto--Size SawSize SawLocation: Jundiaí/SPProduction Capacity: 96.000 m³/yearAllows the company to deliver customized sized

panelsMore adding value by providing customers with a

customized cut panel – example “Right Cut Project”

CTS

Distr.Cent.

Right Cut Project

Closet Components

Capex - Highlight

Low Pressure Coating LineLow Pressure Coating LineLocation: Itapetininga/SPProduction Capacity: 12 M m²/yearAllows the company to improve the

selling mix of particle board and MDF/HDF

More adding value

Strategic Positioning

TimberlandTimberland

Acquisitions between 2000 and 2003: 26.000 ha of timberland Practically self sufficient in own wood supplyCertified areas by ISO 14.001 and Green LabelAverage distance from timberland to industrial sites: 50 km

Capex - Highlight

Metal Metal FittingsFittingsLocation: São Paulo/SP and Jundiaí/SPImprove ScaleAutomate Production Processes

São Paulo

Jundiaí

Hydra Valve – automated assembling lineAssembling Capacity: 1,5 M valves/year

Foundry –Automated Equipment

Capex - Highlight

Vitreous Vitreous ChinaChinaLocation: Jundiaí/SP and São Leopoldo/RSImprove Scale

Improve the production line of added value products

Substitution of oil per natural gas kilnsConcentrate the production of ceramic ware in a

few number of sites, with the closure of one plant

Jundiaí/SP

São Leopoldo/RS

New gas kiln with production capacity of 960 thousand pieces/year

Capex – Capacity Expansion

1995 1996 1997 1998 1999 2000 2001 2002 2003

Hardboard 1 360 360 360 360 360 360 360 360 360

Particle Board 1 320 320 320 320 320 320 340 360 500

MDF/HDF/SDF 1 - - 180 180 180 200 220 240 640

Laminate Flooring 2 - - - 6.000 6.000 6.000 6.000 6.000 6.000

Metal Fittings 3 7.800 8.400 9.000 9.600 10.800 12.000 13.200 14.400 14.400

Vitreous China 3 1.860 1.860 2.160 2.340 2.400 2.580 3.300 3.300 3.1801 in 1.000 m32 in 1.000 m23 in 1.000 pieces

2004: new gas kiln to start operating on 2HY2004

increasing the production capacity by 960 thousand

pieces/year to 4,2M pieces/year, that is + 30%

Strategic Positioning

Wood DivisionWood Division –– Product Product RangeRangeSDF Laminate

Flooring Wall Paneling

Raw Painted Raw LP FF Raw LP FF

Duratex

Berneck

Eucatex

Masisa

Pl. do Paraná

Satipel

Tafisa

Hardboard Particle Board MDF/HDF

Hardboard Particle Board & MDF Laminate Flooring Wall Paneling

Strategic Positioning

Deca DivisionDeca Division –– Product Product RangeRange

Product line in Metal Fittings: over 6.000 itemsProduct line in Vitreous China: over 260 itemsBroad selling mix including from the standard to the higher end productsBroad water saving product line

Industrial Capacity & Level of Utilization - 2003

80,0%

91,8%

86,1%

63,2%

55,6%

Vitreous China

Metal Fittings

MDF/HDF/SDF

Particle Board

Hardboard

640.000 m3/year640.000 m3/year

3,2 M pieces/year

3,2 M pieces/year

500.000 m3/year500.000 m3/year

360.000 m3/year360.000 m3/year

14,4 M pieces/year14,4 M

pieces/year

Strategic Positioning

Shutting Down Shutting Down of Gravataof Gravataíí/RS/RS´́s s Particle Board PlantParticle Board Plant –– Dec/02Dec/02

Capacity: 140.000 m3/year

There will be no impact on revenues

Objectives:

cost reduction by R$ 10M year;

concentrate the production closer to consuming centers ;

Shutting Down Shutting Down of Jundiaof Jundiaíí/SP/SP´́s s Vitreous Vitreous China China Unit Unit I I –– SepSep/03/03

Capacity: 600.000 pieces/year

There will be no impact on revenues

Objectives:

cost reduction by R$ 4,0M year;

efficiency gains by concentrating the production of Unit I in Unit II,

located also in Jundiaí/SP

Exports

20032003 20022002

United States48%

Europe24%

South & Central America

15%Others

13%

United States59%

Europe19%

South & Central America

13%

Others9%

US$ 41,5 MUS$ 46,5 M + 12 %+ 12 %

Exports

Furniture ExportsFurniture Exports ––

Showroom (Jundiaí/SP):

Area: 2.000m2

Active Clients: Holand, Mexico and South Africa

Product Line: 400 items

Exports

Vitreous Vitreous China China ExportsExportsCurrent exports goes mainly to Europe and Latin America

Development of 15 products to the North American Market

Sales team and storage infrastructure in the US

First shipments expected to start on Feb/2004: 2.500 pieces

Participation in fairs during 2004 (Kitchen & Bath in Chicago)

England Portugal

Net Revenues Breakdown

Wood Division: 67% Deca Division: 33%

Hardboard33%

Particle Board12%

MDF15%

Laminate Flooring

7%

Metal Fittings

23%

Vitreous China10%

2003 2002

Wood Division: 65% Deca Division: 35%

Hardboard35%

Particle Board13%

MDF10%

Laminate Flooring

7%

Metal Fittings

25%

Vitreous China10%

Consolidated Income Statement (R$ 1.000)

2003 VA% 2002 VA% HA%

NET REVENUES 989.603 100% 866.884 100% 14%COGS (573.869) 58% (485.984) 56%Depreciation/Amort./Depletion (55.661) (56.062)

GROSS PROFIT 360.073 36% 324.838 37% 11%Selling Expenses (142.383) (109.000)General & Administrative Expenses (44.446) (43.283)Other Operating Results (7.363) (19.651)

INCOME BEFORE FINANCIAL RESULTS 165.881 17% 152.904 18% 8%Net Financial Result (51.553) (18.651)Taxes on Financial Operations (11.729) (10.687)

OPERATING INCOME 102.599 10% 123.566 14% -17%Non Operating Income (38) 2.862

INCOME BEFORE TAXES 102.561 10% 126.428 15% -19%Income Tax & Social Contribution (29.285) (42.965)Statutory Participation (9.061) (11.128)Minority Participation (198) (677)

NET INCOME 64.017 6% 71.658 8% -11%

Consolidated Quarterly Financial Summary (R$ M)

4Q03 3Q03 2Q03 1Q03 4Q02Gross Revenues 352,7 334,9 286,5 280,5 313,0

Net Revenues 279,2 264,4 225,3 220,8 248,2

COGS net of Depreciation 164,1 152,3 135,4 122,1 143,3

Gross Margin Net of Dep. 41,2% 42,4% 39,9% 44,7% 42,3%

Depreciation 14,1 13,3 13,5 14,8 14,3

Gross Profit 101,0 98,8 76,4 83,9 90,6

Gross Margin 36,2% 37,4% 33,9% 38,0% 36,5%

Operating Result 50,3 47,3 28,0 40,3 45,5

EBITDA 65,2 61,3 43,0 55,1 60,5

EBITDA Margin 23,3% 23,2% 19,1% 25,0% 24,4%

Net Income 22,5 13,4 7,6 20,5 19,8

ROE (annualized) 9,9% 5,9% 3,4% 9,3% 8,7%

Financial Performance per Division (R$ M)

(R$M) VA% (R$M) VA% (R$M) VA%

Net Revenues 656,1 100% 333,5 100% 989,6 100%

COGS (375,8) 57% (198,0) 59% (573,9) 58%

Depr/Amort/Depl. (36,7) 6% (18,9) 6% (55,7) 6%

Gross Profit 243,6 37% 116,5 35% 360,1 36%

EBITDA 2003 167,1 25% 57,6 17% 224,7 23%

EBITDA 2002 170,9 30% 39,6 13% 210,4 24%

WOOD DIVISION DECA DIVISION CONSOLIDATED

Total Debt & Amortization Schedule (R$ M)

34,8

296,2

156,0

158,9

106,1

63,1

89,1

Debt 2004 2005 2006 2007 2008 &Beyond

Domestic Currency

Foreign Currency

100% hedge

452,2

Net Debt / Equity = 37,1 %

Total Debt

Consolidated Cash Flow Statement (R$ 1.000)

2003 2002

NET INCOME 64.017 71.658Depreciation/Amortization/Depletion 58.781 57.525Interest / FX Variation (Accrual) 37.412 2.732Provisions / Write-Offs 24.601 28.506

SUB-TOTAL 184.811 160.421Investments in Working Capital (69.072) (1.100)

OPERATING CASH FLOW 115.739 159.321

Wood Division – Cost Breakdown

Hardboard Particle Board MDF

Raw Material 32% 57% 61%

Work Force 25% 12% 12%

Wood 19% 14% 9%

Depreciation 4% 7% 9%

Electric Power 11% 5% 7%

Fuel 9% 5% 2%

Total 100% 100% 100%

Deca Division – Cost Breakdown

Vitreous China Metal Fittings

Raw Material & Others 37% 53%

Work Force 40% 35%

Electric Power 3% 4%

Depreciation 10% 7%

Fuel 10% 1%

Total 100% 100%

Performance

ShipmentsShipments905,5881,2

823,6812,1749,6

689,4

1998 1999 2000 2001 2002 2003

( in 1.000 m3 )

CAGR: 5,6%

13,314,5

13,612,311,8

10,3

1998 1999 2000 2001 2002 2003

( in million of pieces )

CAGR: 3,6%

Performance

CAGR: 12,9%CAGR: 12,9%

539,7

785,3

989,6

866,9

744,6654,1

1998 1999 2000 2001 2002 2003

Net Net RevenuesRevenues (R$ M)

Performance

CAGR: 13,70%CAGR: 13,70%

EBITDA EBITDA (R$ M) & & MarginMargin (%)

118,2

187,5224,6210,4199,4

158,3

24,40%

21,90%24,20%

26,80%

22,70%23,90%

1998 1999 2000 2001 2002 2003

Performance

EBITDA EBITDA (R$ M) & MarginMargin (%)

35,4 35,5

46,7 46,8

42,7

32,3

43,9

48,1

25,4%24,7%22,0%

30,0%28,9%30,2%

26,8%

30,9%

1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03

10,2 10,7 11,3

13,712,4

10,7

17,5 16,7

18,90%20,1%

13,6%

15,8%15,9%

13,8%15,2%15,8%

1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03

Dividends Distribution (R$ M)

45,3%45,3%32,3%32,3%148,2%148,2%34,7%34,7%34,6%34,6%31,7%31,7%28,4%28,4% 34,3%34,3%PayPay--OutOut 40,2%40,2%

25,724,623,621,5

15,115,014,7

11,28,7

1995 1996 1997 1998 1999 2000 2001 2002 2003

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