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3Q14 Results
- 1. Earnings Call 3Q14 November 14th, 2014
- 2. 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, 2013 figures have been adjusted to reflect accounting changes implemented by the Company in late 2013. Disclosure
- 3. A global organization 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
- 4. South America 4 Source: ¹WSA Crude Steel Production¹ (million tons) - Core Markets Volume (‘000 tons) North America EU-28 Sales to Steel Segment Revenues (R$ million) 238 3Q13 210 -6% +6% 3Q14 223 2Q14 -6% +7% 3Q14 524 2Q14 557 3Q13 489 Refractory Solutions Sales - Steel +3% -3% 3Q14 12 2Q14 11 3Q13 12 +3% +2% 3Q14 31 2Q14 30 3Q13 30 -8% +1% 3Q14 40 2Q14 44 3Q13 40 13% 13% 23% 23% 25% 24% 40% 39% Sales by region (in R$) South America North America Europe Others 9M13 9M14 -3% 35 34 9M13 9M14 +2% 9M14 90 9M13 88 +3% 9M14 128 9M13 124 +7% 9M14 674 9M13 632 +16% 9M13 1,598 9M14 1,374
- 5. 5 Sales to Industrial Segment Refractory Solutions Sales – Industrial Segment Volume (‘000 tons) Revenues (R$ million) 41 36 33 +24% +15% 3Q13 2Q14 3Q14 3Q13 89 +25% +23% 3Q14 110 2Q14 88 Sales by region (R$) -6% 9M14 118 9M13 126 309 323 +5% 9M13 9M14 20% 16% 12% 10% 18% 20% 52% 52% 9M13 9M14 South America North America Europe Others
- 6. Refractory Solutions Sales and Margin - Consolidated 6 Volume (‘000 tons) Revenues (R$ million) Gross Profit and Margin (R$ million;%) 245 271 264 -3% +7% 3Q13 2Q14 3Q14 186 201 205 +2% +10% 3Q14 32.2% 2Q14 31.2% 3Q13 32.2% 578 645 634 -2% +10% 3Q13 2Q14 3Q14 Sales by region (R$) 43% 14% 13% 20% 21% 25% 23% 41% South America North America Europe Others 9M13 9M14 18% 17% 82% 83% Steel Industrial 9M13 9M14 Sales by segment (R$) 758 792 +5% 9M13 9M14 +14% 9M14 1,921 9M13 1,683 576 619 +7% 9M14 32.2% 9M13 34.2%
- 7. 7 Revenues (R$ million) Gross Profit and Margin (R$ million;%) Revenues (R$ million) Gross Profit and Margin (R$ million;%) Minerals and Services 39 35 39 +12% +1% 3Q13 2Q14 3Q14 40 41 31 +2% +34% 3Q13 2Q14 3Q14 16 12 14 +13% -13% 3Q14 35.5% 2Q14 35.1% 3Q13 41.2% 12 5 7 +73% +154% 3Q14 28.2% 2Q14 16.6% 3Q13 14.9% Minerals Services 112 9M13 107 +5% 9M14 38 43 -13% 9M14 33.7% 9M13 40.4% 89 +36% 9M14 121 9M13 25 12 +107% 9M13 9M14 20.6% 13.5%
- 8. 8 Consolidated Sales and Gross Profit (R$ million) Por Segmento 720 715 647 3Q13 2Q14 3Q14 -1% +10% 5.6% 5.2% 89.2% 5.7% 89.6% 4.7% Refractories Minerals Services 9M13 9M14 Gross Profit Consolidated Sales +15% 9M14 2,154 9M13 1,879 207 220 230 30.6% 3Q13 31.9% +5% +11% 3Q14 32.2% 2Q14 631 681 9M13 33.6% 9M14 +8% 31.6%
- 9. 9 SG&A Selling Expenses G&A 2Q14 58 8.0% 3Q13 63 9.7% +4% -4% 3Q14 60 8.4% +1% +5% 3Q14 101 14.1% 2Q14 100 13.8% 3Q13 96 14.8% Selling expenses % on sales 0% +17% 3Q13 3Q14 37 5.7% 43 6.1% 2Q14 43 6.0% Consolidated Freight G&A % on sales Others 56 7.8% 3Q13 59 9.1% +2% -3% 3Q14 57 8.0% 2Q14 8.1% 9M13 171 8.9% +2% 9M14 174 +18% 9M14 306 14.2% 9M13 261 13.6% 133 6.2% 9M13 101 5.3% +32% 9M14 8.0% +9% 9M14 173 9M13 160 8.3%
- 10. 10 EBITDA and Net Income (R$ million) EBITDA Net Income 11.8% 3Q13 77 +5% +31% 3Q14 100 14.1% 2Q14 95 13.2% -22 -3.4% 3Q14 -18 -2.6% 2Q14 14 2.0% 3Q13 +9% +30% 3Q14 105 14.7% 2Q14 97 13.5% 3Q13 81 12.5% 9M13 297 15.5% +3% 9M14 306 14.2% 9M13 9M14 -21 -1.0% 28 1.5% -7% 316 16.5% 9M13 294 9M14 13.7% EBITDA ex-other
- 11. 11 CAPEX and Working Capital (R$ million) Working Capital CAPEX +3% -38% 3Q14 38 2Q14 37 3Q13 62 34.0% 1Q14 1,017 35.4% 4Q13 952 32.3% 3Q13 976 37.7% 3Q14 979 2Q14 1,002 35.1% Working Capital % on sales -16% 9M14 102 9M13 121
- 12. 12 *EBITDA excluding other revenues / expenses Leverage and Indebtedness Total Amortization Schedule (R$ million) Net Debt per Currency Excluding Perpetual Bond Others 0% 0% EUR 17% 17% USD 47% 59% BRL 37% 24% 819 855 914 922 911 398 439 421 394 417 2,2x 2,3x 2,2x 1,9x 2,1x 2,3x 2Q14 3Q14 2.4x 1Q14 2.4x 4Q13 2.2x 3Q13 2.1x Net Debt / EBITDA w/o ore* Net Debt / EBITDA EBITDA Net Debt 2020+ 1,635 1,022 613 2019 12 2018 213 2017 281 2016 84 2015 189 2014 8 3Q14 885 Perpetual Bond Amortization Cash Position 3Q14 4Q13 389 439 421 394 417 3,8x 3,7x 3,5x 3,3x 3,5x 3,8x 3Q14 1,537 2Q14 1,484 3.9x 1Q14 1,494 3.9x 4Q13 1,453 3.7x 3Q13 1,369 3.7x Net Debt / EBITDA w/o ore* Net Debt / EBITDA EBITDA Net Debt *EBITDA excluding other revenues / expenses
- 13. Octavio Pereira Lopes CEO Eduardo Gotilla CFO and IRO Daniel Domiciano Silva Investor Relations Manager Lucas Veiga Investor Relations Analyst Phone: +55 11 3152-3237/3241/3202 ri@magnesita.com www.magnesita.com/ri 13 Investor Relations Contacts