setembro 2010 inglês
TRANSCRIPT
FORJAS TAURUS FORJAS TAURUS S.A.S.A.
Investor RelationsInvestor Relations
September - 2010September - 2010
• This presentation contains, or is proposed to contain, projections and estimates, which reflect the goals and expectations of Forjas Taurus S.A.’s Management (“Forjas Taurus” – FJTA4, FJTA3).
• Such statements are subject to a number of events which Taurus cannot be sure will be realized, including, without limitation, the maintenance of the macroeconomic scenario and of financial and economic indicators. Such information is not merely based on historical facts, but also reflects goals and expectations. The words “anticipate,” “will,” “expectation,” “foresee,” “intend,” “plan,” “predict,” “forecast,” “help” and similar words, either spoken or written, intended to identify statements that necessarily involve known and unknown risks.
• This presentation is based on events occurring prior to 9/30/2010, and Forjas Taurus S.A. is not obligated to update these data and emphasizes that investors should consult the public documents available on the websites www.cvm.gov.br, www.bovespa.com.br and www.taurus.com.br (annual reports, quarterly income or losses, financial statements, among others).
• Forjas Taurus S.A. is not responsible for any transactions or investment decisions made based on the information presented herein.
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I. Company Overview
II. Business and Strategy Sectors
III. Consolidated Results
IV. Financial Strategy
Content
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I. Company Overview (9M10)
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Corporate Chart
X.X% = Current percent on Total CapitalIncludes the interest of LFCE
Forjas Taurus S.A.
Polimetal *94.1%
Common Shares Preferred Shares
Others5.9%
Geração Futuro38.2%
PREVI29.4%
Others32.4%
31.4% 25.4% 19.6% 21.6%2.0%
Taurus InternationalManufacturing, Inc.
Taurus Holdings, Inc.
Taurus Máquinas-Ferramenta Ltda.
Taurus Blindagens Ltda.
Taurus Properties, Inc.
Famastil TaurusFerramentas S.A.
Taurus Helmets Ind.
Plástica Ltda.
Taurus BlindagensNordeste Ltda.
100% 100%
35% 24.2% 99.86%100%
99.99% 99.99%
Taurus Invest.Imobiliários Ltda.
75.8% 29.3%
70.7%
BraztechInternational, L.C. 100%
Polimetal Participações S.A.
Invespar72%
LFCE28%
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Capital: BRL 201,000,000.00
Number of sharesON: 42,744,720PN: 85,489,440
Organizational Structure
President
Executive Committee
Board of Directors
Executive Board
Controllership
TIMICEO
Machines, Helmets and Armors
Vice President
FinanceExecutive
Board
RI/AuditingExecutive
Board
People Management
Manager
TIMICFO
Weapons and Industrial Forgings
Executive Board
Weapons and Industrial Forgings
Executive Board
Industrial Machinery Manager
Helmets & ArmorsExecutive Board
Machinery Sales Manager MI
Machinery Export Manager
Helmets & ArmorsSales
Manager
CSC Senior Vice President
Weapons and ForgingsSenior Vice President
New BusinessesVice President
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1939 – Forjas Taurus
1970 – Control for external investors1977 – Forjas Taurus by Polimetal
1980 – Beretta1982 – IPO1983 – Taurus Blindagens / Taurus International1985 – Taurus Ferramentas1986 – Induma1988 – Taurus Holdings
1991 – Assets of Champion
1997 – Rossi
1999 – Weapons of polymer and titanium
2000 – Taurus Capacetes2004 – Famastil 2004 - Máquinas-Ferramenta2006 – Taurus Helmets 2006 – “The Judge”2008 – Taurus Inv. Imobiliários 2008 – Rossi2008 – Metus
I. Company Overview – History
00´s90
´s
80´s
70´s
30´s
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II. Business and Strategy Sectors
Sales Mix (9M10) Market Mix
66%
15%
7,5% 11,5%
GUNS HELMETS MACHINES OTHERS
Average Gross Margin (9M10)
0%
10%
20%
30%
40%
50%
60%
GUNS HELMETS MACHINES OTHERS
51,1%43,1%
26,3% 27,1%
GUNS HELMETS MACHINES OTHERS
Gross Margin Evolution
0%
10%
20%
30%
40%
50%
60%
2006 2007 2008 2009 9M10
GUNS HELMETS MACHINES OTHERS
2006 2007 2008 2009 9M10
DOMESTIC MARKET FOREIGN MARKET
51%
49%
61%
39%
53%
47%
41%
59%
49%
51%
408,9 429,3
599,2
679,4
499,3
CAGR +18%
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► Products: revolvers, pistols, rifles, pressure guns, long guns and police weapons.
► Biggest local “competitor”: Imbel (focus on heavy weapons).
► Overseas competitors: Glock, S&W and Ruger.
► Relatively protected local market due to economic and legal barriers to entry for competitors.
► Great capacity for innovation (one of the first to use polymers for the manufacture of weapons).
► Constant investments in automation in order to reduce production costs.
II. Business and Strategy Sectors – Weapons Segment
► Focus on more profitable products (pistols instead of revolvers) and weapons based on new technologies, such as polymers and titanium.
► Development of new models, which have low development cost and add significant margin.
► Development of new non-lethal models for use in major events, such as the World Cup and the Olympics.
► Entry into new local markets (Federal Police and the Army).
► Entry into new international markets through the development of tailor-made products, such as Russia.
► Increasing rate of manufacturing in the U.S. market.
StrategyBusiness
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II. Business and Strategy Sectors – Local Guns Segment
Mix of Customers in Brazil
64,4%
19%
13% 3,6%
POLICE AND OTHER PUBLIC SECURITY ENTITIES
RETAILERS
SURVEILLANCE COMPANIES
OTHERS
► According to the recommendations of the UN (number of police officers per inhabitants), and based on the Brazilian data from 2007, today Brazil would need to increase the police force by approximately 26%.
► The ongoing and growing problem of security in Brazil reinforces the expectation that the police force should be significantly increased in the coming years.
► The improvement of working conditions and strengthening of the existing force also suggest a good scenario for the coming years. The Military Police of all States, for example, has been purchasing pistols to replace the old .38.
► Considering the leadership and recognition of Taurus brand on the market, this scenario can significantly increase the company’s sales.
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II. Business and Strategy Sectors – International Weapons Segment
UNITED STATES: In pistols and revolvers segments (a USD 1.21 billion market) and in the long weapons segment (a USD 1.35 billion market).
OTHER COUNTRIES: Participation in international competitive biddings for the sale of weapons in several countries, such as Germany, Algeria, Indonesia and Singapore.
Great CAPACITY FOR INNOVATION of the company enables the development of specific products with higher added value, for different customers.
Participates in the LARGEST TRADE FAIRS IN THE INDUSTRY in the world, such as Shot Show (USA) and IWA Show (Germany), presenting its new product concepts to the market.
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II. Sectors of Performance and Strategy – Helmets and shields
► In the market for helmets, Taurus has a widely spread reach, selling to several customers (retailers) throughout the country, being a leader in this segment, as per the following chart.
► In this segment, the company’s growth is strongly correlated with the growth rate of the Brazilian fleet of motorcycles which, in turn, is dependent on the growth rate of GDP and credit.
► In line with other company’s products, Taurus operates in the market for anti-riot shields, tactical vests and bulletproof vests, supplying primarily to local government security authorities and private security companies and therefore has the same growth drivers as the weapons segment.
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II. Business and Strategy Sectors – Machinery and Equipment
► Service Portfolio: Manufacture of welded components, machining services, heat treating, finishing of structural products and reform of machine tools.
► Own technology: complete transfer of know-how, drawings and designs from Germany and brand recognized in the market.
► Growth trend: linked to the growth of the country, mainly in the oil and power generation industries.
► Competitors: TOS (Czech Republic), Pama (Italy), Zayer (Spain), Anayak (Spain) and Union (Germany).
► Customers: The aerospace, automotive, steel, construction and energy industries. Namely specially Caterpillar, WEG and Cooper Cameron.
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II. Business and Strategy Sectors – Forgings and Tools
► Representing 5.5% of consolidated sales revenue. The forged products are an optimization of the company’s production capacity as the technology used for these products is similar to that used for the forging of weapons, i.e., the company gains in scale when producing such parts.
► The products are manufactured in ferrous and nonferrous metals. They are intended mainly to markets of oil and gas, automotive and agriculture industries.
► The growth of this segment is directly linked to the economic performance, being relevant mainly to the gross capital formation increase rate in the country.
Tools and AccessoriesForgings
► Representing 4% of consolidated sales revenue.
► In this segment, the increase in sales is directly linked to the growth of civil construction in Brazil.
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II. Sales Evolution – Consolidated Quantities
CAGR +21%
-9%
CAGR +14%
+27%
Revolvers and Pistols – 2003 – Base 100
Helmets for motorcycles – In thousands of parts.
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III. Consolidated Results
Net Revenue (BRL MM) Gross Profit (BRL MM) and Gross Margin (%)
EBITDA (BRL MM) and EBITDA Margin (%) Net Profit (BRL MM) and Net Margin (%)
CAGR +18%
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CONSOLIDATED INFORMATION BY BUSINESS SEGMENT CONSOLIDATED INFORMATION BY BUSINESS SEGMENT Amounts in millions of BRLAmounts in millions of BRL
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9M09 9M10 Var. 9M09 9M10 Var. 9M09 9M10 Var.
GUNS 398,4 329,0 -17,4% 211,1 168,2 -20,3% 52,1 39,4 -24,4%
HELMETS 53,7 72,0 34,1% 26,1 31,0 18,8% 13,0 13,6 4,6%
MACHINES TOOLS 48,8 37,7 -22,7% 5,9 9,9 67,8% -30,3 -3,3 89,1%
HAND TOOLS 16,4 22,2 35,4% 6,3 8,9 41,3% 0,9 1,2 33,3%
OTHERS PRODUCTS 30,6 38,4 25,5% -0,7 7,5 -3,6 2,1
TOTAL 547,9 499,3 248,7 225,5 32,1 53,0
NET REVENUES GROSS PROFIT NET PROFIT
IV. Company’s Financial Strategy – Funding Sources
► Due to the strong export profile, Taurus´ main funding sources are foreign trade lines, mainly through short-term ACE lines (150 days).
► In cases of market stress, the company also makes use of available cash in the subsidiaries abroad by reducing the period for payment of subsidiaries and even making export pre-payments.
► The export profile also enables the company to take NCE for working capital in local currency.
► Investments in Research and Development are partially funded via FINEP.
► Investments in capital assets are partially funded via BNDES.
► For the years to come, the company’s strategy is to lengthen its debt profile and reduce its average cost through access to capital markets locally and internationally.
► The company has a non-exposure policy to foreign currency. ACE operations minimize that risk. In addition, the company conducts NDF operations as hedging instrument in order to guarantee operating margins.
► Nonetheless, operating margins in future exports may be compromised due to an eventual foreign exchange appreciation.
► With regard to local funding, FINEP and BNDES operations have TJLP and CDI indexing for which the company does not perform hedging.
Hedge Strategy and PolicySources of Funds
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Total Debt (BRL MM) Net Debt (BRL MM)
IV. Company’s Financial Strategy – Consolidated Financial Indicators
EBITDA / Net Financial ExpensesTotal Debt / EBITDA
9M10 9M10
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Working Capital: In BRL: BRL 101.0 - 31% In BRL: BRL 31.0 - 10%
FINAME: R$ 29,5 – 9%FINIMP: BRL 0.4
Fixed assets acquisition:
R$ 2,3 – 1%
Export Exchange: BRL 106.8 – 34%
Working Capital:: Em R$: R$ 84,3 - 24% In US$: R$ 47,1 - 13%
FINAME: BRL 28.0 – 8%
FINEP: BRL 51.6 – 14%Real Estate Acquisitions: BRL 3.2 – 1%
BNDES: BRL 12.9 – 4%
Debentures: BRL 108.8 – 31%
Export Exchange: BRL 19.2 – 5%
FINEP: BRL 44.6 – 13%
BNDES: R$ 5,0 – 2%
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CONSOLIDATED FINANCIAL POSITION CONSOLIDATED FINANCIAL POSITION –– Amounts in millions of BRL Amounts in millions of BRL
•Adjusted EBITDA for 12 months in the period ended September 30, 2010.
Debt BreakdownOn 12-31-09 On 09-30-10
12-31-09 10/30/09 Var.
Short-term indebtedness 209,2 118,5 -43,4%
Long-term indebtedness 111,4 236,6 112,4%
Gross indebtedness 320,6 355,1 10,8%
(-) Cash and cash equivalents and financial investments 177,6 176,3 -0,7%
Net debt 143,0 178,8 25,0%
Net debt/EBITDA (*) 1,05x 1,27x(*) 0,22x
EBITDA/Financial expenses, net (*) 6,3x 30,0x(*) 23,7x
CONSOLIDATED INVESTMENTS IN FIXED ASSETS In millions of BRL
2007 2008 2009 9M10
19,9
36
17,4 17,9
14,1
16
25,214,7
5,4
1
3,3
4,1OTHERS
MODERNIZATION
CAPACITY
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TOTAL 27 15 13 36 20 26
PRODUCT 2005 2006 2007 2008 2009 2010(PROJETADO)
PISTOLS 16 10 4 23 14 22
REVOLVERS 7 2 5 11 5 4
RIFLES 4 - - 2 - -
ACCESSORIES - 3 4 - 1 -
CONTACT:CONTACT:
Luis Fernando Costa EstimaInvestor Relations Officer
Edair DecontoInvestor Relations Executive Officer
T: (51) 3021-3000
Email: [email protected]
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