presentation 1q14
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Earnings Call 1Q14
May 14th, 2014
The consolidated financial statements presented here are consistent with the criteria of international accounting standards - IFRS issued by the
International Accounting Standards Board – IASB, based on audited financial information. Non-financial information contained herein, as well
as other operational information, were not audited by independent auditors and may include forward-looking statements and reflects the
current views and perspectives of the management on the evolution of macro-economic environment, conditions of the mining and
refractories industries, company performance and financial results. Any statements, projections, expectations, estimates and plans contained
in this document that do not describe historical facts, and the factors or trends affecting financial condition, liquidity or results of operations,
are forward-looking statements and involve several risks and uncertainties.
This presentation should not be construed as legal, tax, investment or other advice. This presentation does not constitute an offer, or invitation,
or solicitation of an offer, to subscribe for or purchase any securities, and neither any part of this presentation nor any information or
statement contained herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Under no
circumstances, neither the Company nor its subsidiaries, directors, officers, agents or employees be liable to third parties (including investors)
for any investment decision based on information and statements in this presentation, or for any damages resulting therefrom, corresponding
or specific.
The information presented or contained in this presentation is current as of the date hereof and is subject to change without notice. Magnesita
has no obligation to update it or revise it in light of new information and / or in face of future events, safeguard the current regulations which
we are submitted to. This presentation and its contents are proprietary information of the Company and may not be reproduced or circulated,
partially or completely, without the prior written consent of the Company.
Changes in historical numbers For comparison purposes, 4Q13 and 1Q13 figures have been adjusted to reflect accounting changes implemented by the Company in late 2013.
Disclosure
A g
lob
al o
rgan
izat
ion
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 & Method
▪Agility and Transparency ▪Respect for Safety, Environment and Communities
▪Customer ▪People
Our values
3
South America
4
Source: ¹WSA
Crude Steel Production¹ (million tons) - Main markets
Volume (000’ tons)
North America EU-28
Sales to Steel Segment
Revenues (R$ million)
214222203
-3%
+5%
1Q14 4Q13 1Q13
517529425
4Q13
-2%
+22%
1Q14 1Q13
Refractory Solutions Sales - Steel
-4%
1Q14
0%
1Q13 4Q13
12 11 11 29
1Q13
30
4Q13 1Q14
30
0%
+1%
+4%
1Q13
42
1Q14
41
+7%
4Q13
44
23%
38%
24% 22%
12% 14%
41%
26%
Sales by region (R$)
South America
North America
Europe Others
1Q13
1Q14
5
Sales to Industrial Segment
Refractory Solutions Sales – Industrial Segment
Volume (000’ tons) Revenues (R$ million)
+1%
-12%
1Q14
44
4Q13
43
1Q13
49
+4%
+5%
1Q14
125
4Q13
121
1Q13
120
Sales by region (R$)
163158
LTM 1Q14
+3%
LTM 1Q13
436383
LTM 1Q14
+14%
LTM 1Q13
22%
46%
26%
14% 14% 13%
51%
14%
1Q13
1Q14
South America
North America
Europe Others
Refractory Solutions Sales and Margin - Consolidated
6
Volumes (000’ tons)
Revenues (R$ million)
Gross profit and margin (R$ million; %)
253 265
-3%
4Q13 1Q13 1Q14
+2%
258
203
4Q13
213
33.1% 31.2%
1Q13
+5%
1Q14
+10%
194
34.6%
1Q14 4Q13
544
+18%
650 642
-1%
1Q13
Sales by region (R$)
23%
39%
25%
20%
13% 14%
43%
23%
South America
North America
Europe Others
1Q13
1Q14
21%
80%
20%
79%
Steel Industrial
1Q13
1Q14
Sales by segment (R$)
7
Revenues (R$ million) Gross profit and margin (R$ million; %)
Revenues (R$ million) Gross profit and margin (R$ million; %)
Minerals and Services
-28%
+20%
1Q14
38
4Q13
54
1Q13
32
+19%
+35%
1Q14
39
4Q13
32
1Q13
29
-36%
-4%
1Q14
12
30.6%
4Q13
18
34.4%
1Q13
12
38.0%
+28%
+97%
1Q14
6
16.6%
4Q13
5
15.6%
1Q13
3
11.4%
Minerals
Services
8
Consolidated Sales (R$ million)
Por Segmento
1Q13
622
+16%
-2%
1Q14 4Q13
719 736
89.3%
5.3% 5.4% 4.6%
90.2%
5.2%
Services Minerals Refractories
1Q13 1Q14
Per segment
Quarters
9
Selling, General and Administrative Expenses (SG&A)
Selling expenses
G&A
5665
51
1Q14
7.8%
4Q13
8.8%
1Q13
8.1%
1069974
+7%
+43%
1Q14
14.8%
4Q13
13.4%
1Q13
11.9%
Selling expenses
% of sales
46
3729
1Q14
6.5%
4Q13
5.0%
1Q13
4.6%
Consolidated Freight
G&A
% of sales
Others
6062
45
1Q14
8.3%
4Q13
8.4%
1Q13
7.3%
10
Gross profit, EBITDA and Net Income (R$ million)
Gross profit
EBITDA and ADJUSTED EBITDA (excluding other revenues/expenses)
Net Income
ADJUSTED
+2%
+10%
1Q14
231
32.1%
4Q13
226
30.7%
1Q13
210
33.7%
98124116
13.7%
4Q13
16.8%
1Q13
18.7%
-20%
-15%
1Q14
-17
3126
1Q14
-2.3%
4Q13
4.2%
1Q13
4.2%
10498114
-9%
+6%
1Q14
14.4%
4Q13
13.3%
1Q13
18.3%
11
CAPEX and working capital (R$ million)
Working capital
CAPEX
-68%
+14%
1Q14
27
4Q13
83
1Q13
23
1Q14
1,017
35.4%
4Q13
952
32.3%
3Q13
976
37.7%
2Q13
934
35.9%
1Q13
877
35.2%
Working capital
% of sales
12
*EBITDA excluding other revenues/expenses
Debt and Leverage
Total
Amortization Schedule (R$ million) Net Debt per currency
Excluding Perpetual Bond
59%
BRL
Others 0%
USD
0%
36%
EUR 19%
17%
44%
24%
915875819658
551421439398406388
2.1x 1.5x
2.4x 2.2x
2.0x 1.7x
1.7x
1Q13
2.1x
1Q14 2Q13
2.2x
4Q13 3Q13
1.4x
Net debt / EBITDA w/o ORE*
Net debt / EBITDA
EBITDA
Net debt
2017
281
mar-14
1.513
819
213
2016
578
2018
84
2015
192
2014
18
2020+ 2019
12
935
Perpetual bond Cash position Amortization
4Q13
1Q14
421438384386367
1,494
3.9x
3.5x
4Q13
1,453
3.7x
3.3x
3Q13
1,369
3.7x
3.6x
2Q13
1,205 1,059
2.8x
2.9x 3.2x
3.1x
1Q13 1Q14
EBITDA Net debt / EBITDA w/o ORE*
Net debt / EBITDA Net debt
*EBITDA excluding other revenues/expenses
Octavio Pereira Lopes CEO
Eduardo Gotilla Global Finance and IRO
Daniel Domiciano Silva Investor Relations
Lucas Veiga Investor Relations Analyst
Phone: +55 11 3152-3237/3241/3202 [email protected]
www.magnesita.com/ri
13
Investor Relations Contacts