Vitro Publishes Restructured Balance Sheet; Reports Increases of 6.4% in 1Q 12 Sales and 6.9% in EBITDA

Transcription

1 Vitro Publishes Restructured Balance Sheet; Reports Increases of 6.4% in 1Q 12 Sales and 6.9% in EBITDA San Pedro Garza Garcia, Nuevo León, México April 30, 2012 Vitro S.A.B. de C.V. (BMV: VITROA) one of the world's largest producers and distributors of glass products, today announced 1Q 12 unaudited results. Financial statements were prepared according to International Financial Reporting Standards (IFRS), thus, all figures for the 1Q 12 and 1Q 11 follow the same standards and are fully comparable (for more information see Special Note Regarding IFRS Adoption Effects within this document). Year-over-year consolidated net sales increased 6.4 percent, benefitting from higher sales volumes in both the Glass Containers and Flat Glass Business, and a better price-mix at both business units, which offset the 6.9 percent YoY (quarterly average) peso depreciation. Consolidated EBITDA increased 6.9 percent YoY, as a result higher sales volumes, solid manufacturing efficiencies and lower natural gas prices, which more than compensated for the electricity and steam supply interruption caused by Tractebel s incident reported on March 29, As a result of the sale of Vitro America Inc. on June, 2011, and according to IFRS, current and historical figures of that company are shown as discontinued operation in the Income Statement. FINANCIAL HIGHLIGHTS* 1Q'12 1Q'11 % Change Consolidated Net Sales % Glass Containers % Flat Glass % Cost of Sales % Gross Income % Gross Margins 26.9% 27.1% -0.2 pp SG&A % SG&A % of sales 16.8% 17.6% -0.8 pp EBIT % EBIT Margins 10.0% 9.5% 0.5 pp EBITDA % Glass Containers % Flat Glass % EBITDA Margins 19.8% 19.7% 0.1 pp Net Income (loss) Net Income (loss) Margins 129.5% 3.1% +126 pp Total Debt (1) 1,181 1, % Short Term Debt (2) 118 1, % Long Term Debt 1, % Cash & Cash Equivalents (3) % Total Net Debt (1) 1,029 1, % * Million US$ Nominal (1) Total debt includes account receivables debt programs according to IFRS. (2) Since in 2010 We were not in compliance under our bond indentures, the outstanding amount of the Senior Notes debt was reclassified from long-term to short-term, which is shown in 1Q'11. (3) In 1Q'11, Cash & Cash Equivalents include restricted cash for interest payments and cash on our accounts receivables debt programs. In 1Q'12, it includes restricted cash for our accounts receivables debt programs and lease payments Mr. Hugo Lara, Chief Executive Officer, noted: Vitro has achieved an important milestone this quarter with the consummation of the Concurso Plan and the completion of the debt restructuring under the Mexican Insolvency Plan on February 23, We have now completed the restructuring of our debt and have emerged from this process as a stronger and more competitive company with a solid balance sheet. Commenting on the quarter s performance, Mr. Lara, said: Results reflect a recovery in specific markets, as well as the positive impact from the steps Vitro has been taking to strengthen profitability. Sales principally benefitted from a strong domestic performance in the Flat Glass Business Unit in both construction and automotive markets, and higher sales volumes in our Glass Container segments, particularly in the food, soft drink and beer markets as we continue to work hand in hand with our clients. A number of factors combined to increase Vitro s EBIT and EBITDA, among them a higher sales volume, as well as better fixed cost absorption throughout our facilities as a result of higher production levels and a drop in natural gas prices, one of our main inputs. These factors helped offset the 6.9 percent peso depreciation against the U.S. dollar (YoY, quarterly average) and the impact of the increase in electricity prices derived from the electricity and steam supply interruption caused by Tractebel s incident. Net Free Cash Flow this quarter increased by US$32 million, mainly boosted by an increase in EBITDA and lower CapEx and interest and tax expenses. In terms of the balance sheet, after the implementation of the Concurso Plan, Vitro s consolidated debt level at the end of 1Q 2012 was US$1,181 million compared to US$1,715 million at the end of 1Q 2011, a 31% YoY reduction, Mr. Lara continued. In connection with the status of the Concurso Mercantil in Mexico, Mr. Claudio Del Valle, Chief Restructuring Officer, remarked: After the Company was notified on February 7, 2012, of the ruling issued by the Judge in Mexico, which approved the restructuring plan filed by the Conciliador and approved by the majority of the recognized creditors, We proceeded to take all the necessary steps to complete our restructuring process. Therefore, on February 23, 2012, Vitro consummated the Concurso Plan and completed its debt restructuring under the Mexican Insolvency Plan, issuing its New Notes due 2018 ( 2018 Notes ) and Mandatory Convertible Debentures due 2015 ( MCDs ) and paid a cash restructuring fee to third party payment trusts, which issued Credit-Linked Notes linked to the 2018 Notes and MCDs (both CLN Notes ) to Tendering Holders on march 19, The trusts will subsequently issue CLN Notes, on interest payment

2 dates, to any Holders who fully comply with all terms of the Concurso Plan and send the corresponding documentation. After our debt restructuring, the debt service requirements are consistent with the Company s debt service capabilities, improving considerably Vitro s debt and interest coverage ratios providing for a stronger and more competitive financial foundation. By consummating its debt restructuring Concurso Plan, the Company has reached a significant milestone in a very long and harsh restructuring process, beginning a new era for Vitro, concluded Mr. Lara. SPECIALNOTE REGARDING IFRS ADOPTION EFFECTS Investment in associated companies. COMEGUA already reported under IFRS, opting to reevaluate its fixed assets. The effects of this revaluation are an increase in fixed assets and an increase in stockholder s equity. Land, Buildings, Machinery and Equipment. Under IFRS the Company opted to reevaluate its main items. The effects of such revaluation are an increase on assets value and stockholder s equity and consequently an increase in future depreciation expense. Employee retirement benefits. The Company opted to recognize actuarial gains and losses at the transition date, as well as recognize its changes on an annual basis. Severance payment liability was eliminated, having as effect an increase in Employee Benefits. Additionally, financial cost associated to Employee Benefits is accounted for in Total Financing Result. Onerous Contract. It is a type of contract where the costs involved with fulfilling the terms and conditions of the contract are higher than the amount of expected economic benefits. The contract entered into with Fintech was classified as such, therefore recognizing a provision equal to the difference between real estate re-acquisition price and its face value. Financial Instruments. A financial instrument in which the Issuer has the option to settle the instrument in cash or in shares is considered a liability; therefore the Mandatory Convertible Debentures had been recognized as a liability. Deferred Income Tax. Calculated under IFRS, the effect is a decrease in Deferred Income Tax Asset. Based on requirements issued in 2009 by the Mexican National Banking and Securities Commission or Comisión Nacional Bancaria y de Valores, all entities that trade their securities in the Mexican Stock Exchange must adopt the International Financial Reporting Standards ( IFRS ) for the preparation of their consolidated financial statements no later than January 1, Vitro s condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and they do not include all the information required for full annual financial statements. These are the Vitro s first IFRS condensed consolidated financial statements for part of the period covered by the first annual financial statements and IFRS 1 First-time Adoption of the International Financial Reporting Standards has been applied. The Peso Figures included in the document are presented in nominal Pesos which could affect its comparability. Dollar figures are in nominal US dollars and are obtained by dividing nominal pesos for each month by the end of month fix exchange rate published by Banco de Mexico. In the case of the Balance Sheet, US dollar translations are made at the fix exchange rate as of the end of the period. Certain amounts may not sum due to rounding. All figures and comparisons are in US dollar terms, unless otherwise stated, and may differ from the peso amounts due to the difference in exchange rates. This announcement contains historical information, certain management s expectations, estimates and other forward-looking information regarding Vitro, S.A.B. de C.V. and its Subsidiaries (collectively the Company ). While the Company believes that these management s expectations and forward looking Mar'12 Mar'11 Inflation in Mexico Quarter 1.1% 1.1% LTM 3.8% 3.0% Inflation in USA Quarter 1.6% 2.0% LTM 2.6% 2.7% Exchange Rate Closing Average (LTM) Average (1Q) Devaluation (Revaluation) Quarter (closing) QoQ -8.1% -3.2% LTM (closing) 7.4% -4.0% Quarter (average) YoY 6.9% -5.6% UDIs Closing previous quarter Closing current quarter statements are based on reasonable assumptions, all such statements reflect the current views of the Company with respect to future events and are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated in this report. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic, political, governmental and business conditions worldwide and in such markets in which the Company does business, changes in interest rates, changes in inflation rates, changes in exchange rates, the growth or reduction of the markets and segments where the Company sells its products, changes in raw material prices, changes in energy prices, particularly gas, changes in the business strategy, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. The Company does not assume any obligation, to and will not update these forward-looking statements. SPECIAL NOTE REGARDING NON-GAAP FINANCIAL MEASURES A body of generally accepted accounting principles is commonly referred to as GAAP. A non-gaap financial measure is generally defined as one that purports to measure historical or future financial performance, financial position or cash flows but excludes or includes amounts that would not be so adjusted in the most comparable GAAP measure. We disclose in this report certain non-gaap financial measures, including EBITDA. EBITDA for any period is defined as consolidated net income (loss) excluding (i) depreciation and amortization, (ii) non-cash items related to pension liabilities, (iii) total net comprehensive financing cost (which is comprised of net interest expense, exchange gain or loss, monetary position gain or loss and other financing costs and derivative transactions), (iv) other expenses, net, (v) income tax, (vi) provision for employee retirement obligations, (vii) cumulative effect of change in accounting principle, net of tax and (viii) (income) loss from discontinued operations. In managing our business we rely on EBITDA as a means of assessing our operating performance and a portion of our management s compensation and employee profit sharing plan is linked to EBITDA performance. We believe that EBITDA can be useful to facilitate comparisons of operating performance between periods and with other companies because it excludes the effect of (i) depreciation and amortization, which represents a non-cash charge to earnings, (ii) certain financing costs, which are significantly affected by external factors, including interest rates, foreign currency exchange rates and inflation rates, which have little or no bearing on our operating performance, (iii) income tax and tax on assets and statutory employee profit sharing, which is similar to a tax on income and (iv) other expenses or income not related to the operation of the business. EBITDA is also a useful basis of comparing our results with those of other companies because it presents operating results on a basis unaffected by capital structure and taxes. We also calculate EBITDA in connection with covenants related to some of our financings. We believe that EBITDA enhances the understanding of our financial performance and our ability to satisfy principal and interest obligations with respect to our indebtedness as well as to fund capital expenditures and working capital requirements. EBITDA is not a measure of financial performance under IFRS. EBITDA should not be considered as an alternate measure of net income or operating income, as determined on a consolidated basis using amounts derived from statements of operations prepared in accordance with IFRS, as an indicator of operating performance or as cash flows from operating activity or as a measure of liquidity. EBITDA has material limitations that impair its value as a measure of a company s overall profitability since it does not address certain ongoing costs of our business that could significantly affect profitability such as financial expenses and income taxes, depreciation, pension plan reserves or capital expenditures and associated charges. Vitro, S.A.B. de C.V. (BMV: VITROA), is the leading company in the manufacture of glass in Mexico and one of the largest in the world backed by more than 100 years of experience in the industry. Founded in 1909 in Monterrey, Mexico, the company currently has subsidiaries in America and Europe, which offers quality products and reliable services to meet the needs of two distinct business 2

3 sectors: glass containers and flat glass. Our manufacturing facilities produce, process, distribute and sell a wide range of glass products that are part of the daily lives of millions of people as well as offering excellent solutions to multiple industries that include: wine, beer, cosmetic, pharmaceutical, food and beverage, as well as the automotive and construction industry. In addition, we supply raw materials, machinery and industrial equipment to different industries. As a socially responsible company, We constantly strive to improve the quality of life of our employees, as well as the communities where we operate, by generating employment and economic prosperity given our permanent focus on quality and continuous improvement, as well as through our consistent efforts to promote sustainable development and ethical and transparent management. For more information, you can access Vitro s Website at: For further information, please contact: Investor Relations Jesus N. Medina Vitro S.A.B. de C.V. + (52) jnmedina@vitro.com U.S. agency Susan Borinelli / Barbara Cano Breakstone Group (646) / sborinelli@breakstone-group.com bcano@breakstone-group.com Media Roberto Riva Palacio Vitro, S.A.B. de C.V. + (52) rriva@vitro.com DETAILED FINANCIAL INFORMATION FOLLOWS: Consolidated Results Sales 4 EBIT and EBITDA 5 Total Financing Result 6 Taxes 6 Consolidated Net Income 7 Capital Expenditures 7 Consolidated Financial Position 8 Cash Flow 9 Key Developments 10 Glass Containers 13 Flat Glass 14 Consolidated Financial Statements 15 Segmented Information 16 3

4 Consolidated Results As a result of the sale of Vitro America Inc. in June, 2011, and according to IFRS, current and historical figures of that company are shown as discontinued operations in the Income Statement. Figures reported follow IFRS, thus, all figures, for the current quarter and for the first quarter of 2011 are fully comparable. Sales Consolidated net sales for 1Q 12 increased 6.4 percent YoY, to US$447 from US$420 million in 1Q 11. Sales increases can be explained primarily by a higher sales volume in both the Glass Containers and Flat Glass business units and an overall strong price mix, particularly in domestic sales. For the Last Twelve Months, consolidated net sales increased 8.3 percent, from US$1,646 million in LTM 11 to US$1,782 million in LTM 12. Glass Containers sales for 1Q 12 increased 7.3 percent, YoY, while Flat Glass sales rose 6.9 percent during the same period. During the quarter, domestic sales increased 9.5 percent, while export sales increased 8.9 percent, and foreign subsidiaries sales decreased 23.3, YoY. This was mainly driven by lower sales in Spain, where deteriorated macroeconomic conditions negatively impacted the residential and commercial construction markets. Table 1: Total Sales Table 1 Sales (Million) 1Q'12 1Q'11 Change LTM'12 LTM'11 Change Pesos Total Consolidated Sales 5,756 5, ,532 20, Glass Containers 3,613 3, ,295 12, Flat Glass 2,093 1, ,947 7, Domestic Sales 3,456 2, ,546 11, Export Sales 1,934 1, ,306 6, Foreign Subsidiaries (17.9) 1,680 1,910 (12.0) Nominal Dollars Total Consolidated Sales ,782 1, Glass Containers ,132 1, Flat Glass Domestic Sales , Export Sales Foreign Subsidiaries (23.3) (13.2) % Foreign Currency Sales* / Total Sales 40% 42% -1.7 pp 40% 42% -2.5 pp % Export Sales / Total Sales 34% 33% 0.8 pp 32% 33% -0.7 pp * Exports + Foreign Subsidiaries 4

5 EBIT and EBITDA Consolidated EBIT for the quarter rose from US$40 million in 1Q 11 to US$45 million during 1Q 12, representing a 12.5 percent increase. EBIT margin rose 0.5 percentage points, from 9.5 percent in 1Q 11 to 10.0 percent in 1Q 12. For the Last Twelve Months, EBIT rose 13.0 percent, from US$136 million in LTM 11 to US$153 million in LTM 12. EBIT for the quarter at Glass Containers increased 18.8 percent YoY, from US$29 million in 1Q 11 to US$34 million in 1Q 12, while at Flat Glass, EBIT increased 27.8 percent, from US$8 million in 1Q 11 to US$10 million in 1Q 12. Consolidated EBITDA for the quarter increased 6.9 percent, from US$83 million in 1Q 11 to US$89 million in 1Q 11, mainly benefitting from higher sales volumes in both business units. Lower natural gas prices contributed to offset the impact of the electricity and steam supply interruption caused by Tractebel s incident in March, EBITDA margin remained relatively unchanged at 19.8 percent this quarter compared with 19.7 percent in 1Q 11. During the last twelve month period, EBITDA increased 13.8 percent, from US$293 million in LTM 11 to US$333 in LTM 12. During the quarter, EBITDA at Glass Containers increased 12.2 percent, YoY, from US$58 million in 1Q 11 to US$65 million in 1Q 12, while EBITDA at Flat Glass rose 7.1 percent, from US$19 million in 1Q 11 to US$20 million in 1Q 12. For details on both business units please refer to page 13 and 14. Table 2: EBIT and EBITDA Table 2 EBIT and EBITDA (Million) 1Q'12 1Q'11 Change LTM'12 LTM'11 Change Pesos Consolidated EBIT ,959 1, Margin 10.1% 9.5% 0.6 pp 8.7% 8.3% 0.4 pp Glass Containers , Flat Glass Consolidated EBITDA 1, ,232 3, Margin 19.8% 19.7% 0.1 pp 18.8% 17.8% 1 pp Glass Containers ,040 2, Flat Glass , Nominal Dollars Consolidated EBIT Margin 10.0% 9.5% 0.5 pp 8.6% 8.2% 0.4 pp Glass Containers Flat Glass Consolidated EBITDA Margin 19.8% 19.7% 0.1 pp 18.7% 17.8% 0.9 pp Glass Containers Flat Glass

6 Total Financing Result On April 8, 2011 Vitro SAB was declared in Concurso Mercantil, therefore according to Mexican law, all of its debt, including Senior Notes, was converted to Unidades de Inversion ( UDIS ) and stopped accruing interest. Under IFRS, the fluctuation in the value of the UDIS is considered as an interest expense. For reporting purposes, UDIS figures were reconverted at the dollar exchange rate of the closing period. (For more details please refer to Vitro s 2Q 11 report, available on our website). Total Financing Result for the quarter was an expense of US$74 million compared to an expense of US$2 million during 1Q 11. This was primarily driven by a US$24 million Foreign Exchange Loss in 1Q 12, compared with a US$54 million gain in 1Q 11. Total Financing Result also reflects an increase in Other Financial Expenses, from US$2 million in 1Q 11 to US$9 million in 1Q 12, mainly resulting from legal and financial expenses related to the consummation of the debt restructuring process. As a result of converting the debt subject to restructuring to UDIS on April 8, 2011, total Financing Result for LTM 12 decreased 28.2 percent, to US$123 million from an expense of US$172 million in LTM 11. Table 3: Total Financing Result Table 3 Total Financing Result (2) (Million) 1Q'12 1Q'11 Change LTM'12 LTM'11 Change Pesos Net Interest (expense) income (519) (647) 19.8 (1,615) (2,683) 39.8 Other Financial Expenses (1) (117) (21) (233) (45) Foreign Exchange Gain (Loss) (314) (57.4) Total Financing Result (949) (29) 3,188.6 (1,628) (2,210) 26.4 Nominal Dollars Net Interest (expense) income (40) (54) 25.1 (126) (215) 41.7 Other Financial Expenses (1) (9) (2) (18) (3) Foreign Exchange Gain (Loss) (24) (57.1) Total Financing Result (74) (2) 3,902.5 (123) (172) 28.2 (1) Includes natural gas hedgings and expenses related to debt restructuring. (2) On April 8, 2011 Vitro SAB de CV was declared in Concurso M ercantil, therefore according to M exican law, all of its debt, including Senior Notes, was converted to UDIS and stopped accruing interest. For reporting purposes, UDIS figures were reconverted at the dollar exchange rate of the closing period. Taxes Total Income Tax for 1Q 12 resulted in a gain of US$10 million, compared to an expense of US$12 million during the same period last year. This was mainly due to an increase in deferred income taxes, which presented a gain of US$41 million in 1Q 12 compared to a gain of US$2 million in 1Q 11. Figures were impacted by the 8.1 percent peso depreciation against U.S. dollar, QoQ (closing rate). This more than offset an increase in Accrued Income Taxes from an expense of US$15 million in 1Q 11 to an expense of US$30 million in 1Q 12. Total Income Tax resulted in an expense of US$22 million in LTM 12 compared to a gain of US$17 million in LTM 11. 6

7 Table 4: Taxes Table 4 Taxes (Million) 1Q'12 1Q'11 Change LTM'12 LTM'11 Change Pesos Accrued Income Tax , Deferred Income Tax (gain) (523) (27) 1,820.3 (745) (516) 44.5 Total Income Tax (135) (234) -- Nominal Dollars Accrued Income Tax Deferred Income Tax (gain) (41) (2) 1,752.2 (62) (39) 58.1 Total Income Tax (10) (17) -- Consolidated Net Income 45 (74) Consolidated Net Income (million dollars) During 1Q 12, the Company recorded a Consolidated Net Income of US$579 million compared to a Consolidated Net Income of US$13 million during the same period last year. This reflects the effect of the implementation of our debt restructuring plan on February 23, The positive effect of this implementation more than offset the higher Net Interest expense and the Foreign Exchange Loss accounted during the period. EBIT Total Financing Result Other (Expenses) Income Capital Expenditures (CapEx) Taxes Consolidated Net Income (Loss) Capital expenditures for the first quarter of 2012 totaled US$13 million, compared with US$21 million in 1Q 11. Glass Containers represented 81 percent of total CapEx, mainly invested in the fabrication of molds used in production of glass containers, scheduled furnace repairs and programmed maintenance. Flat Glass accounted for the remaining 19 percent, which was mainly invested in scheduled furnace repairs and maintenance through all facilities and capacity expansion for the auto glass segment. 7

8 Consolidated Financial Position On April 8, 2011 Vitro SAB was declared in Concurso Mercantil, therefore according to Mexican law, all of its debt, including Senior Notes, was converted to UDIS and stopped accruing interest. For reporting purposes, UDIS figures were reconverted at the dollar exchange rate of the closing period. On Feb 23, 2012, Vitro consummated the Concurso Plan approved by the Fourth Federal District Court for Civil and Labor Matters in the State of Nuevo León according to Mexican Insolvency Law. As of March 31, 2012, the Company had a cash balance of US$152 million, of which US$2 million are classified as other long-term assets and US$27 million are restricted cash collateralizing lease payments and cash on our accounts receivable financing programs. Despite paying out the Cash Restructuring fee, unrestricted cash balance of US$125 million as of March 31, 2012 compares favorably to US$79 million in 1Q 11. In addition to a better operating cash flow performance, the Company also received US$16.1 million from the sale of a non-strategic real estate asset in the State of Mexico. For 1Q 12, Net Debt, which is calculated by deducting cash and cash equivalents classified in short and long term assets, decreased by US$570 million, to US$1,029 million, from US$1,599 million in 1Q 11, reflecting the effect of our debt restructuring process, which has improved the Company s debt and interest coverage ratios. Consolidated gross debt as of March 31, 2012 totaled US$1,181 million, which represents a US$534 million YoY decrease from US$1,715 million in 1Q 11. Interest Coverage (1) Table 5 Debt Indicators (Million dollars; except as indicated) 1Q'12 4Q'11 3Q'11 2Q'11 1Q'11 (EBITDA/ Interest Expense) (Times) LTM Leverage (1) (Total Debt / EBITDA) (Times) LTM (Total Net Debt / EBITDA) (Times) LTM Total Debt (4) 1,181 1,424 1,479 1,664 1,715 Short-Term Debt (2) 118 1,297 1,347 1,508 1,577 Long-Term Debt 1, Cash and Equivalents (3) Total Net Debt 1,029 1,227 1,321 1,506 1,599 Currency Mix (%) Dlls & Euros / Pesos / UDIS 92/8/0 9/6/85 9/6/85 8/7/85 91/9/0 (1) Financial ratios are calculated using figures in pesos. (2) Since in 2011 We were not in compliance under our bond indentures, the outstanding amount of the Senior Notes debt was reclassified from long-term to short-term during On February 23, 2012, Vitro implemented its Restructuring Plan, therefore its tong-term debt was reclassified to song-term. (3) Cash & Cash Equivalents include restricted cash related to consent payment and restructuring consideration, lease payments and cash on our accounts receivables financing programs. (4) According to IFRS, our accounts receivable securitization trusts and off-balance sheet debt were included in the Consolidated Financial Statements of Vitro and Subsidiaries. The effects of the changes in accounting principles increased debt of all periods herein presented. 8

9 Debt Profile as of March 31, 2011 and 2012 Fixed Rate (1) Floating Rate + Fixed Spead Rate Exposure Mar.11 Mar % 86% 13% 14% Dollars Pesos Euros Currency Exposure (2) Mar.11 Mar % 89% 8% 2% 9% 3% Banks Market Source Mar.11 Mar % 27% 83% 73% (1) LIBOR and TIIE based rates Cash Flow During 1Q 12 Vitro reported a negative Net Free Cash Flow of US$2 million. This was mainly the result of a Working Capital investment of US$60 million, reflecting the seasonal investment in account receivables, in addition to approximately US$5 million in accounts receivable withheld awaiting resolution of the Chapter 15 recognition hearing, and an inventory stock build up to prepare for seasonal sales at the Glass Containers business unit as well as for an uptick in demand for Automotive Original Equipment glass parts. Net interest paid totaled US$16 million while CapEx for the quarter was US$13 million. These cash outflows were offset by a strong EBITDA generation of US$89 million during 1Q 12. The negative US$2 million net free cash flow figure compares favorably to the negative US$34 million reported in 1Q 11 as Working Capital Investment, CapEx, net interests and net taxes paid decreased, when compared on a YoY basis. Table 6: Cash Flow Analysis Table 6 Cash Flow from Operations Analysis (1) (Million) 1Q'12 1Q'11 Change LTM'12 LTM'11 Change Pesos EBITDA 1, ,232 3, Working Capital (2) (780) (805) (3.1) (545) (631) (13.5) Cash Flow from Operations ,686 3, Net Interest Paid (3) (207) (231) (10.3) (742) (1,030) (27.9) Cash Taxes (paid) recovered (4) (15) (112) (86.4) 100 (250) -- Capex (5) (169) (253) (33.4) (1,254) (1,136) 10.4 Dividends - (2) -- (2) (12) (83.4) Net Free Cash Flow (30) (405) -- 1, Nominal Dollars EBITDA Working Capital (2) (60) (67) (9.5) (45) (52) (13.5) Cash Flow from Operations Net Interest Paid (3) (16) (19) (16.0) (60) (83) (28.1) Cash Taxes (paid) recovered (4) (1) (9) (87.3) 8 (20) -- Capex (5) (13) (21) (37.7) (99) (92) 7.8 Dividends - (0) -- (0) (1) (85.4) (4) Includes PSW (Profit Sharing to Workers) Net Free Cash Flow (2) (34) (1) This statement is a cash flow analysis and it does not represent a Cash Flow Statement according with IFRS (2) Includes: Clients, inventories, suppliers, other current assets and liabilities including IVA (Value Added Tax) (3) Also includes interest income, derivative financial transactions and expenses related to debt restructuring (5) Includes advanced payments which under IFRS is now cosidered as other long term assets and not as fixed assets. 9

10 Key Developments FINANCIAL POSITION AND RESTRUCTURING PROCESS During the last 36 months, Vitro has been in constant negotiations with several groups of creditors to resolve its financial situation by seeking to achieve a consensual restructuring on terms that would provide Vitro s creditors a fair recovery in light of the Company s financial capacity and allow the Company to regain its financial footing. The above mentioned groups of creditors, include an ad hoc group of holders of Old Notes (the Ad Hoc Bondholders Group ), as well as Fintech, the Company s largest creditor. Vitro s Voluntary Concurso Proceeding and Chapter 15 Case On February 7, 2012, the Company was notified that the Judge for the Fourth District Court Civil and Labor Matters in the State of Nuevo Leon issued her final ruling, approving the restructuring plan filed by the Conciliador and approved by the majority of the recognized creditors and the Company, according to Mexican Insolvency Law (Ley de Concursos Mercantiles). On February 29, 2012, the Company was notified of an appeal by the minority group of dissident funds against the ruling approving the Concurso Plan. The appeal was admitted by the Fourth District Court in Civil and Labor Matters in the State of Nuevo Leon, but the ruling was not stayed and therefore the execution of the ruling approving the Concurso Plan was not suspended. On March 13, 2012, Vitro filed a response to such appeal. The decision to not stay the ruling pending appeal issued by the Fourth District Court was ratified by the Court of Appeals on April 10, On March 13, 2012, the U.S. Court of Appeals for the Fifth Circuit issued a ruling granting Vitro SAB's a temporary restraining order, preventing the dissident bondholders from collecting on judgments and seizing assets belonging to Vitro, in particular accounts receivable owed by some of Vitro's U.S. customers. The court has rescheduled a hearing on the enforcement of Vitro's plan in the U.S. to start on June 4, 2012, originally planned to take place the week of April 9. Vitro s Voluntary Concurso Proceeding Completion in Mexico On Feb 23, 2012, Vitro announced that it had consummated the Concurso Plan approved by the Fourth Federal District Court for Civil and Labor Matters in the State of Nuevo León according to Mexican Insolvency Law (Ley de Concursos Mercantiles) on February 3, In accordance with the terms of the Concurso Plan, Vitro issued new 8.0% notes due in 2018 (the 2018 Notes ) and 12.0% mandatorily convertible debentures due in 2015 (the MCDs ) together with the 2018 Notes, the New Notes and paid a cash restructuring fee to third party payment trusts, which will issue the corresponding Credit Linked Notes tied to the New Notes and deliver them and the restructuring fee to holders of recognized claims in the concurso mercantil proceedings that consented to the Concurso Plan. Another trust will hold the restructuring consideration in favor of the holders of recognized claims that have not consented to the Concurso Plan, for delivery to those holders that later execute and deliver the appropriate receipt and acknowledgement. By approving the Concurso Plan, the Mexican District Court: (i) discharged the obligations of Vitro and its subsidiaries under Vitro s: (1) 8.625% Senior Notes due February 1, 2012 (the 2012 Notes ), (2) 11.75% Senior Notes due November 1, 2013 (the 2013 Notes ), (3) 9.125% Senior Notes due February 1, 2017 and (4) other debt instruments; and (ii) ordered Vitro to issue to its unsecured creditors the 2018 Notes, guaranteed by, among others, certain subsidiaries of Vitro, the MCDs due in 2015 and to pay the restructuring fee. 10

11 New York State Litigation against Vitro and certain of its non-u.s. subsidiaries On October 13, 2011, a Summary Judgment hearing was held in the New York State Court, where arguments from both parties were heard. On January 24, 2012, the Judge determined an aggregate amount of US$124.1 million, plus accrued interests as of the date on which partial resolution regarding these matters is issued, that the dissident bondholder could claim on these matters. Such determination does not have a significant financial impact for Vitro; nevertheless the Company appealed this decision, which is still pending resolution. On March 23, 2012, summary judgment was granted, recognizing all of Vitro s subsidiaries and guarantors as debtors (except for Vitro Packaging de Mexico, S.A. de C.V.). The judge required an expert opinion to quantify the amount, which was due on April 24, On December 14, 2011, a minority group of dissident creditor funds filed a lawsuit in the New York State Court requesting, among other things, the withdrawal of Vitro s subsidiaries support from the restructuring plan. On December 16, 2011, New York State Judge Bernard Fried issued a Temporary Restraining Order ( TRO ) directing Vitro subsidiaries to withdraw their consent to the proposed restructuring plan; said ruling was challenged by the Company and on December 22, 2011, U.S. Bankruptcy Judge Hale issued a ruling determining that the automatic stay in Vitro s Chapter 15 Case precluded the entry of the temporary restraining order previously issued by the New York State Court. After the dissident bondholders appealed the decision on December 28, 2011, it was ratified by the U.S. District Court and subsequently, on January 5, 2012, by the U.S. Fifth Circuit Court of Appeals. On January 17, 2012, Senior United States Judge Royal Ferguson denied emergency joint motion for stay, confirming the previous decision issued by the U.S. Bankruptcy Court. On January 24, 2012, the United States Court of Appeals for the Fifth Circuit issued a seventh denial to the dissident bondholders opposed motion for the stay pending appeal. On February 15, 2012, the Company received a notification regarding a lawsuit filing by the dissident bondholders in the State of Michigan against the guarantors subsidiaries (excepting Vitro Packaging), seeking to enforce the ruling issued on December 16, 2011 by State Judge Bernard Fried in New York, over the assets of the Company in the State of Michigan. Vitro Packaging de Mexico s Voluntary Concurso Proceeding and Chapter 15 Case On October 26, the Judge for the Fourth District in Labor and Civil Matters declared Vitro Packaging de Mexico in voluntary reorganization proceeding (Concurso Mercantil), and on November 7, 2011, the Conciliador for this proceeding was appointed. On January 2, 2012, the Conciliation period started. In April, 2012, the Judge for the Fourth Federal District Court for Civil and Labor Matters in the State of Nuevo León issued its Decision for the Acknowledgement, Value and Order of Credits, granting recognition to the definitive list of creditors, which did not include the dissident bondholders group. On June 30, 2011 VIP commenced the VIP Chapter 15 Case in the Bankruptcy Court. On November 23, 2011, Judge Harlin D. Hale, U.S. Bankruptcy Judge for the Northern District of Texas, granted recognition of VIP s voluntary Concurso Mercantil, under Chapter 15 of the United States Bankruptcy Code, protecting VIP from any further actions from all creditors. Electricity and Steam Generation Failures by Vitro s Operating Partner On March 3, 2012, Tractebel Energía de Monterrey (Tractebel) suffered an explosion in its facilities while performing routine maintenance activities. This incident resulted in the interruption of electricity and steam generated by Tractebel, Vitro s operating partner under the scheme of self-sufficiency. Since that date the service hasn t been reestablished, resulting in rising electricity costs for Vitro which with the latest information, are estimated to have a potential economic impact of up to US$16 million dollars. This amount is derived from the differential of the rate contracted with Tractebel and the Comision Federal de Electricidad (CFE) support rate, until the service is restored. 11

12 On March 27, 2012, Tractebel officially notified Vitro on an estimated period of 10 to 13 months to repair its facilities and resume the supply of electricity to Vitro. Meanwhile, Vitro is discussing additional strategic alternatives to ensure a steady supply of steam to remain fully operational on an ongoing basis. The Company has implemented all necessary measures to minimize the impact of these temporary disruptions and remains in constant communication with Tractebel regarding its progress in reestablishing operations. OTHER Vitro is awarded the Corporate Social Responsibility Seal 2012 On March 16 the Mexican Center for Philanthropy (CEMEFI) awarded the Corporate Social Responsibility Seal 2012 (Empresa Socialmente Responsable) for the fifth year edition to its Glass Containers and Flat Glass business units, as well as Clínica Vitro and Vitro Corporate Offices. 12

13 Sales Glass Containers (64 percent of LTM 2012 Consolidated Sales) Sales for the quarter increased 7.3 percent YoY, from US$261 million in 1Q 11 to US$280 million in this period. Domestic sales rose 12.1 percent, mainly driven by higher demand in the beer segment, as well as higher sales volumes in the food and soft drink segments. These factors combined with a better price mix in almost all segments, offset a decline in sales volume in the wine and liquor segments. Export sales rose 4.7 percent, from US$102 million in 1Q 11 to US$106 million in 1Q 12, experiencing a better price mix in almost all segments, except CFT, which more than offset a lower sales volume in almost all export segments. Sales from Glass Containers foreign subsidiaries decreased from US$9 million in 1Q 11 to US$5 million in 1Q 12. EBIT and EBITDA EBIT for the quarter increased 18.8 percent YoY, from US$29 million in 1Q 11 to US$34 million in 1Q 12. EBITDA for the same period increased 12.2 percent, from US$58 million to US$65 million. During this quarter, EBIT and EBITDA benefited from the increase in sales volume and better price mix. These factors combined with solid manufacturing efficiencies and lower natural gas prices, which more than offset a 6.9 percent peso depreciation, YoY (quarterly average). EBITDA from Mexican glass containers operations, which is Glass Container s core business and represented approximately 83 percent of total EBITDA in this quarter, increased 13.0 percent YoY due to the above mentioned factors. Table 7: Glass Containers Table 7 Glass Containers (Million) 1Q'12 1Q'11 Change LTM'12 LTM'11 Change Pesos Consolidated Net sales 3,613 3, ,295 12, Net Sales Domestic Sales 2,182 1, ,608 7, Exports 1,371 1, ,337 4, Foreign Subsidiaries (42.8) (27.3) EBIT , EBITDA ,040 2, EBIT Margin 12.2% 11.0% 1.2 pp 10.2% 2.7% 7.5 pp EBITDA Margin 23.2% 22.2% 1 pp 21.3% 23.4% -2.1 pp Nominal Dollars Consolidated Net sales ,132 1, Domestic Sales Export Sales Foreign Subsidiaries 5 9 (46.5) (28.1) EBIT EBITDA EBIT Margin 12.2% 11.0% 1.2 pp 10.4% 2.8% 7.6 pp EBITDA Margin 23.3% 22.2% 1.1 pp 21.3% 23.4% -2.1 pp Glass Containers Domestic (Millions of Units) ,958 3, Exports (Millions of Units) ,480 1, Total 1,294 1, ,437 4, Installed capacity utilization (furnaces) 90.7% 80.3% 10.4 pp Alcali (Thousands Tons sold)* (2.2) * Includes sodium carbonate, sodium bicarbonate, sodium chlorine and calcium chlorine 13

14 Sales Flat Glass (36 percent of LTM 2012 Consolidated Sales) Flat Glass sales for the first quarter 2012 increased 6.9 percent, YoY, from US$152 million in 1Q 11 to US$162 million in 1Q 12. Domestic sales rose 8.1 percent YoY, from US$87 million in 1Q 11 to US$95 million in 1Q 12. This was mainly the result of higher sales volume in both the construction and automotive business segments, coupled with a strong price mix which more than offset a 6.9 percent peso depreciation. Export sales increased from US$36 million in 1Q 11 to US$44 million in 1Q 12, as higher sales volume more than offset a lower price mix. During 1Q 12 Automotive sales rose 14.9 percent YoY, mainly driven by higher volumes in both the OEM (Original Equipment Manufacturer) and AGR (Automotive Glass Replacement) markets. OEM sales increased 17 percent, while AGR sales rose 7 percent. Sales from foreign subsidiaries decreased 16.2 percent YoY, from US$28 million in 1Q 11 to US$24 million in this period, mainly due to a sharp downturn in the construction market in Spain. EBIT & EBITDA EBIT for the quarter increased 27.8 percent, from US$8 million in 1Q 11 to US$10 million in 1Q 12, while EBITDA rose 7.1 percent, from US$19 million to US$20 million during the same period. EBIT margin increased 0.9 percentage points, from 5.1 percent in 1Q 11 to 6.0 percent in 1Q 12, while EBITDA margin remained unchanged at 12.4 percent. EBIT and EBITDA mainly benefited from higher domestic sales volume and a strong price mix. Production volumes were marginally higher, which together with the decrease in natural gas prices benefitted Flat Glass fixed cost absorption. This more than offset the impact of the electricity and steam supply interruption caused by Tractebel s incident. Table 8: Flat Glass Table 8 Flat Glass (Million) 1Q'12 1Q'11 Change LTM'12 LTM'11 Change Pesos Consolidated Net sales 2,093 1, ,947 7, Net Sales Domestic Sales 1,224 1, ,649 4, Exports ,968 1, Foreign Subsidiaries (10.3) 1,330 1,429 (6.9) EBIT EBITDA , EBIT Margin 6.1% 5.1% 1 pp 6.3% 1.3% 5 pp EBITDA Margin 12.4% 12.4% 0 pp 13.4% 7.1% 6.3 pp Nominal Dollars Consolidated Net sales Domestic Sales Export Sales Foreign Subsidiaries (16.2) (8.1) EBIT EBITDA EBIT Margin 6.0% 5.1% 0.9 pp 6.0% 1.3% 4.7 pp EBITDA Margin 12.4% 12.4% 0 pp 13.1% 7.1% 6 pp Volumes Flat Glass (Thousands of m2r) (1) (2) 35,696 30, , , Capacity utilization Float Glass furnaces (3) 107.5% 94.0% 13.5 pp Flat Glass auto 98.4% 77.2% 21.2 pp (1) Flat Glass volumes only include float and automotive glass manufactured at our Mexican subsidiaries (2) m2r = Reduced Squared M eters (3) Capacity utilization may sometimes be greater than 100 percent because pulling capacity is calculated based on a certain number of changes in glass color & thickness, determined by historical average and performance. 14

15 VITRO, S.A.B. DE C.V. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS First Quarter FOR THE PERIODS, (MILLION) INCOM E STATEM ENT Nominal P esos Nominal Dollars Nominal P esos Nominal Dollars % Var % Var % Var % Var. Consolidated Net Sales 5,756 5, ,532 20, ,782 1, Cost of Sales 4,207 3, ,254 15, ,290 1, Gross Income 1,549 1, ,278 5, SG&A Expenses ,319 3, Operating Income ,959 1, Other Expenses (Income), net (7,686) (12) -- (597) (1) -- (7,318) (570) Share in earnings of unconsolidated associated companies (8) - (1) - (62) (16) (287.7) (5) (1) (274.9) Interest Expense (19.7) (25.0) 1,659 2,764 (40.0) (41.9) Interest (Income) (10) (11) (13.6) (1) (1) (18.9) (44) (53) (16.3) (3) (4) (19.9) Other Financial Expenses (net) Exchange (Loss) Income 314 (638) (54) -- (220) (517) (57.4) (20) (47) (57.1) Total Financing Result ,628 2,259 (28.0) (29.9) Inc. (lo ss) bef. T ax 7, ,712 (869) (65) -- Income Tax (135) (10) (234) (17) -- N et inco me (lo ss) fro m co ntinuing o peratio ns 7, ,404 (635) (47) -- Net income (loss) from discontinued operations - (166) -- - (14) -- (329) (440) 25.3 (28) (36) 22.0 Net income (loss) 7, ,075 (1,075) (83) -- Net Income (loss) of M aj. Int. (IFRS5) 7, ,793 (1,082) (84) -- Net Income (loss) of Min. Int (7) 1 -- LTM VITRO, S.A.B. DE C.V. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS As of March N o minal P eso s N o minal D o llars B A LA N C E SH EET % Var % Var. F IN A N C IA L IN D IC A T OR S (1) Cash & Cash Equivalents 1,933 1, Debt/EBITDA (LTM, times) Trade Receivables 4,086 3, EBITDA/ Interest. Exp. (LTM, times) Inventories 3,410 3, (2.5) Debt / (Debt + Equity) (times) Other Current Assets 1,021 1,393 (26.7) (31.7) Debt/Equity (times) Total Current Assets 10,451 9, Total Liab./Stockh. Equity (times) Curr. Assets/Curr. Liab. (times) Prop., Plant & Equipment 16,831 18,084 (6.9) 1,310 1,511 (13.3) Sales/Assets (times) Deferred Assets 7,248 5, EPS (Ps$) * 17.6 (2.8) Other Long-Term Assets (14.4) 2 2 (20.3) Investment in Affiliates (2) 1, Total Assets 35,569 34, ,768 2,868 (3.5) * Based on the weighted average shares outstanding. Short-Term & Curr. Debt (3) 1,513 18,875 (92.0) 118 1,577 (92.5) OT H ER IN F OR M A T ION Trade Payables 1,472 1,682 (12.4) (18.4) # Shares Issued (thousands) 386, ,857 Other Current Liabilities 3,335 6,163 (45.9) (49.6) Total Curr. Liab. 6,321 26,720 (76.3) 492 2,233 (78.0) # Average Shares Outstanding Long-Term Debt 13,663 1, , (thousands) 386, ,412 Other LT Liabilities 5,380 2, T o tal Liabilities 25,363 30,888 (17.9) 1,974 2,581 (23.5) # Employees 17,211 17,031 M ajority interest 8,877 1, M inority Interest 1,329 1,509 (11.9) (18.0) Total Shar. Equity 10,206 3, (1) Financial ratios are calculated using figures in pesos. (2) Investment in Affiliates includes 49.7% participation in Comegua under the equity method as a result of the deconsolidation of Comegua. (3) On February 23, 2012, the Company implemented its Restructuring Plan, therefore its long-term debt was reclassified as shor-term debt. 15

16 GLA SS C ON T A IN ER S VITRO, S.A.B. DE C.V. AND SUBSIDIARIES SEGMENTED INFORMATION FOR THE PERIODS, (MILLION) N ominal Pesos First Quart er Last Twelve M ont hs N ominal D ollars Pesos N ominal D ollars % % % % Net Sales 3,641 3, % % 14,445 12, % 1,144 1, % Intercompany Sales % % % % Consolidated Net Sales 3,613 3, % % 14,295 12, % 1,132 1, % Exports 1,371 1, % % 5,337 4, % % EBIT % % 1, % % M argin (1) 12.2% 11.0% 12.2% 11.0% 10.2% 2.7% 10.4% 2.8% EBITDA % % 3,040 2, % % M argin (1) 23.2% 22.2% 23.3% 22.2% 21.3% 23.4% 21.3% 23.4% 6.8% Glass cont ainers volumes ( M M Pieces) Domestic % 3,958 3, % Exports % 1,480 1, % Total:Dom.+Exp. 1,294 1, % 5,437 4, % Soda Ash (Thousand Tons) % % F LA T GLA SS Net Sales 2,094 1, % % 7,957 7, % % Intercompany Sales % % % Consolidated Net Sales 2,093 1, % % 7,947 7, % % Exports % % 1,968 1, % % EBIT % % % % M argin (1) 6.1% 5.1% 6.0% 5.1% 6.3% 1.3% 6.0% 1.3% EBITDA % % 1, % % M argin (1) 12.4% 12.4% 12.4% 12.4% 13.4% 7.1% 13.1% 7.0% F lat Glass V o lumes ( T ho usand m2 R ) ( 2 ) Const + Auto 35,696 30, % 129, , % C ON SOLID A T ED ( 3 ) Net Sales 5,785 5, % % 22,692 20, % 1,795 1, % Intercompany Sales % % % % Consolidated Net Sales 5,756 5, % % 22,532 20, % 1,782 1, % Exports 1,934 1, % % 7,306 6, % % EBIT % % 1,959 1, % % M argin (1) 10.1% 9.5% 10.0% 9.5% 8.7% 8.3% 8.6% 8.2% EBITDA 1, % % 4,232 3, % % M argin (1) 19.8% 19.7% 19.8% 19.7% 18.8% 17.8% 18.7% 17.8% (1) EBIT and EBITDA M argins consider Consolidated Net Sales. (2) m2r = Reduced Squared M eters (3) Includes corporate companies and other's sales and EBIT. **To fully comply with the Mexican Stock Exchange Regulation, art Section VIII, the Company is currently evaluating different options to sign up a Brokerage or Credit Institution to provide analysis coverage to our securities. 16