3Q11 and 9M11 Results

Transcription

1 3Q11 and 9M11 Results November 11,

2 Agenda Period Highlights Brazilian Fertilizer Market Heringer s Sales and Breakdown by Crop Specialty Products Client Base and Market Share Financial Results Income Statements Working Capital Days Financial Highlights Ownership Breakdown FHER3 Stock Performance 2011 Outlook International Raw Material Prices Seasonality Agricultural Commodities Prices Barter Ratio of Agricultural Products vs. Fertilizers Grain Production, Planted Area and Brazilian Fertilizer Market 2

3 (in thousands of tons) (in thousands of tons) Brazilian Fertilizer Market Deliveries 3Q11 9M % % % 7,662 8,042 9,315 15,928 16,669 20,487 3Q09 3Q10 3Q11 9M09 9M10 9M11 The increase in delivery volume in 3Q11 and 9M11 is due to the maintenance of the good barter ratio (agriculture products vs fertilizers) and purchase anticipation of some crops such as soybean and corn Source: Anda 3

4 (in thousands of tons) (in thousands of tons) Brazilian Fertilizer Market Local Production 3Q11 9M % + 5.0% + 8.7% % 2,644 2,749 6,904 7,247 2,433 6,145 3Q09 3Q10 3Q11 9M09 9M10 9M11 Higher local production driven by growing demand Source: Anda 4

5 (in thousands of tons) Brazilian Fertilizer Market Imports 3Q11 9M % % % 4,539 4,751 5,938 (in thousands of tons) 7, % 10,698 14,912 3Q09 3Q10 3Q11 9M09 9M10 9M11 Higher imports driven by market growth and anticipation of purchases Source: Anda 5

6 (in thousands of tons) Heringer s Deliveries by Crop 3Q11 The diversification of sales across crops continued in the period Good barter ratio (fertilizers vs. agricultural products) in 3Q11 Σ 1, % + 9.1% Σ 1,479 Σ 1, Q09 3Q10 3Q11 Market % % % % + 7.7% % % Soybean Corn Coffee Reforesting Sugarcane Other Agricultural Products 6

7 (in thousands of tons) Heringer s Deliveries by Crop 9M11 The diversification of sales across crops continued in the period Good barter ratio (fertilizers vs. agricultural products) in 9M11 Σ 2, % Σ 3, % Σ 2, % % % % % + 6.9% 9M09 9M10 9M11 Market % Soybean Corn Coffee Reforesting Sugarcane Other Agricultural Products 7

8 (in thousands of tons) Specialty Products Growth in Specialty Products share of overall sales in 9M11 Specialty products help boost margins and improve customer loyalty with their high quality and efficiency One of the largest portfolio of specialty products on the market (33 products) Share of Specialty Products Specialty Products Line Conventional Special 2,985 3, % 989 1, % 1,352 1, % % 1,996 2, % % 3Q10 3Q11 9M10 9M11 Sales Volume 3Q10 3Q11 9M10 9M11 63% 64% 67% 63% 37% 36% 33% 37% 8

9 Client Base and Market Share 3Q11 and 9M11 Solid client base and important market share 48,678 clients in the past 12 months Number of Clients 3Q11 Market Share 3Q11-6.6% % 19,642 18,337 21, % 16.8% 15.9% 3Q09 3Q10 3Q11 Number of Clients 9M11 3Q09 3Q10 3Q11 Market Share 9M11-3.5% % 30,875 29,791 35, % 17.9% 16.0% 9M09 9M10 9M11 9M09 9M10 9M11 9

10 Agenda Period Highlights Brazilian Fertilizer market Heringer s Sales and Breakdown by Crop Specialty Products Client Base and Market Share Financial Results Income Statements Working Capital Days Financial Highlights Ownership Breakdown FHER3 Stock Performance 2011 Outlook International Raw Material Prices Seasonality Agricultural Commodities Prices Barter Ratio of Agricultural Products vs. Fertilizers Grain Production, Planted Area and Brazilian Fertilizer Market 10

11 3Q11 and 9M11 Income Statement (R$ thousand) 3Q11 % NR 3Q10 % NR % 11/10 9M11 % NR 9M10 % NR % 11/10 Net Revenue 1,445, % 1,000, % 44.5% 3,054, % 2,185, % 39.7% COGS (1,203,189) -83.2% (891,942) -89.1% 34.9% (2,617,444) -85.7% (2,005,690) -91.8% 30.5% Gross Profit 242, % 108, % 123.4% 436, % 180, % 142.7% Freight and Commissions (64,022) -4.4% (54,143) -5.4% 18.2% (151,546) -5.0% (122,064) -5.6% 24.2% SG&A (35,421) -2.5% (31,313) -3.1% 13.1% (107,112) -3.5% (93,601) -4.3% 14.4% EBITDA 161, % 37, % 327.9% 226, % 10, % % Net Fin. Income / (Exp.) (132,366) -9.2% (1,146) -0.1% % (161,049) -5.3% (58,111) -2.7% 177.1% Net Income 9, % 17, % -44.6% 19, % (49,981) -2.3% 139.2% Strong recovery in gross margin net margin and EBITDA in 9M11 Net Revenue growth due to higher sales volume and prices Decrease in SG&A expenses as a percentage of Net Revenue due to scale gains Excellent EBITDA in 3Q11 and in 9M11 already overcoming the year of 2010 Strong exchange depreciation in 3Q11 reduced the net revenue in the period not generating any cash impact due to hedge operations 11

12 9M11 Income Stmt. (Distribution and Production) Fertilizer Distribution SSP and Sulfuric Acid Production Total Results 9M11 % NR 9M10 % NR 9M11 % NR 9M10 % NR 9M11 9M10 Net Revenue 3,053, % 2,150, % 1, % 35, % 3,054,416 2,185,755 COGS (2,594,238) -85.0% (1,962,049) -91.2% (23,206) % (43,641) % (2,617,444) (2,005,690) Gross Profit 459, % 188, % (22,075) % (8,547) -24.4% 436, ,065 Freight & Commissions (151,546) -5.0% (122,064) -5.7% - 0.0% - 0.0% (151,546) (122,064) SG&A (107,112) -3.5% (93,601) -4.4% - 0.0% - 0.0% (107,112) (93,601) EBITDA 239, % 16, % (13,049) % (6,187) -17.6% 226,601 10,531 Significant improvement in EBITDA margin in fertilizers distribution from 0.4 in 9M10 to 7.8% in 9M11 Impact of the costs at the SSP and sulfuric acid production unit in Paranaguá due to the temporary downtime 12

13 Working Capital Days Working capital days reflect seasonality Comparisons with same quarters are more appropriate Accounts Receivable Days Inventory Days Accounts Payable Days - adjusted by FINIMP Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 Working Capital Days 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q

14 Financial Highlights Adequate working capital management Important improvement in 3Q11 vs 3T10 of the Net Current Assets and current Liquidity from 0.84 to 0.98 due to the result and reclassification of recoverable taxes to current assets Current Assets 3Q11 % 3Q10 % Cash and banks 329, % 107, % Accounts receivables 549, % 369, % Inventories 1,010, % 665, % Other Accounts 352, % 138, % Total Current Assets 2,241, % 1,280, % Local Suppliers 126, % 132, % Foreign Suppliers 879, % 558, % Imports Financing 727, % 498, % Total Accounts Payable 1,734, % 1,189, % Loans and Financing 198, % 62, % Advances received from clients 280, % 190, % Other Accounts 75, % 80, % Total Current Liabilities 2,288, % 1,522, % Net Current Capital (47,213) (242,431) Current Ratio

15 Heringer s Ownership Breakdown FHER3 is one of the 100 most liquid stocks on the BOVESPA and is a component of the SMLL, ITAG, IGC, IMAT, IBRA and IGCT stock indexes The free-float registered 91 foreign investors and 2,098 Brazilian investors Ownership Breakdown and Free-Float Foreign and Brazilian Investors in Free-Float 120% % Brazilians % Foreign Nº Foreign Nº Brazilians 4, % 4,000 3,500 Controlling Group 67.8% Free-Float 32.2% 80% 60% 46% 51% 58% 58% 40% 47% 49% 52% 3,000 2,500 2,000 40% 1,500 20% 54% 49% 42% 42% 60% 53% 51% 48% 1, % Mar/10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Aug-11 Sep

16 Market cap x EBITDA Average daily trading volume of R$ 802,754 Slight drop of 0.8% in 9M11 vs a drop of 24.6% of the IBOVESPA Index /30/09 06/30/09 09/30/09 12/31/09 03/31/10 06/30/10 09/30/10 12/31/10 03/31/11 06/30/11 09/30/11 Market cap x EBITDA Market cap EBITDA Multiple ,972 38, , , M11 445, , Important EBITDA growth over the last periods not yet reflected in the market value of FHER3 16

17 Agenda Period Highlights Brazilian Fertilizer Market Heringer s Sales and Breakdown by Crop Specialty Products Client Base and Market Share Financial Results Income Statements Working Capital Days Financial Highlights Ownership Breakdown FHER3 Stock Performance 2011 Outlook International Raw Material Prices Seasonality Agricultural Commodities Prices Barter Ratio of Agricultural Products vs. Fertilizers Grain Production, Planted Area and Brazilian Fertilizer Market 17

18 Current Scenario Despite the crisis there are strong evidences of the continuity of the favorable fundamentals for agricultural commodities in 4Q11: Population increase (7 billion people in the world) and world urbanization (urban population is the same as rural population for the first time in history) Income expansion and population growth increasing the demand for food and agroenergy World consumption adjusted to production resulting in a low level of grains inventories Favorable profitability for farmers with good barter ratio of fertilizers versus agricultural products Strong real depreciation occurred in September 2011 contributes positively for the farmer income Credit conditions for agriculture are at very favorable levels Seasonality expected is of 42% in the 1 st half and of 58% in the 2 nd half based in an estimated market of 26.5 million tons for 2011 representing an 8.0% growth over 2010 Expected grains production increase for the 2010/2011 and 2011/2012 marketing years 18

19 International Raw Material Prices Average prices of fertilizer raw materials higher than in 2010 Brazil is a Price Taker Barter ratios remain at favorable levels 700 Urea Ammonium Sulfate Ammonium Nitrate Super single phosphate TSP Potassium Chloride DAP MAP May/10 Jun/10 Jul/10 Aug/10 Sep/10 Oct/10 Nov/10 Dec/10 Jan/11 Feb/11 Mar/11 Apr/11 May/11 Jun/11 Jul/11 Aug/11 Sep/11 Source: Siacesp FOB - Prices in USD 19

20 Brazilian Fertilizer Market - Seasonality 37% 35% 42% 63% 65% 58% E 1º Semester 2º Semester Source: Anda / Heringer 2011E Estimate 20

21 (in thousands of tons) Brazilian Fertilizer Market - Evolution and Expectations for 2011 Expected growth of 8% in E Source: Anda / Heringer 2011E Company Estimates 21

22 Agricultural Commodities - Prices Soybean R$/bag (60kg/Paraná) Corn R$/bag (60kg/São Paulo) Sugarcane R$/bag (50kg/São Paulo) Arabica Coffee R$/bag (60kg/Brazil) Source and Projection: Agroconsult / R$/bag = Price per bag 22

23 Agricultural Commodities - International Prices: Recent Evolution Soybean US$/bushel Corn US$/bushel 5 min 15 min 30 min 60 min Daily Weekly Monthly 5 min 15 min 30 min 60 min Daily Weekly Monthly Sugar US$/pound Coffee US$/pound 5 min 15 min 30 min 60 min Daily Weekly Monthly 5 min 15 min 30 min 60 min Daily Weekly Monthly Source: Agroconsult/bg* = bags 23

24 Barter Ratio of Agricultural Products vs. Fertilizers Soybean R$/bag (60kg/Paraná) Corn R$/bag (60kg/Paraná) Sugarcane São Paulo (ton) Coffee R$/bag (60kg/Brazil) Robusta Coffee (sc 60kg) 8.23 Arabic Coffee (sc 60kg) Source: Agroconsult/bg* = bags 24

25 Grain Production and Planted Area Expected growth of 5.0% in Brazil s planted area in 2010/2011 marketing year * Expected growth of 9.6% in Brazil s grain production in 2010/11 marketing year* 4.3% increase in Brazil s average grain yield in 2010/2011 marketing year 145, , , , ,748 47,397 47,959 47,485 49,882 51,260 24,609 22,429 22,400 24,516 26, / / / / /2012* Production (1000 t) Planted Area (1000 ha) Fertilizers Source: CONAB / Agroconsult/ * Agroconsult's Projection and Company's Estimate Grains: corn, soybeans, rice, beans, sorghum, castor beans, cotton, sunflowers, barley, rye, oats, peanuts, wheat and triticale Fertilizers: 2011 Estimate 25

26 This presentation may include forward-looking statements about future events or results in accordance with Brazilian and international regulations governing stock markets. Such statements are based on assumptions and analyses made by the Company based on its experience, the economic climate, market conditions and expected future events, many of which are beyond the Company s control. Important factors that can lead to significant differences between actual results and these forward-looking statements include the Company's business strategy, economic conditions in Brazil and abroad, technology, financial strategy, developments in the fertilizer industry, financial market conditions, uncertainty regarding the results of the Company s future operations, plans, objectives, expectations, intentions, and other factors described in the item "Risk Factors of the IPO Prospectus filed with the Securities and Exchange Commission of Brazil (CVM). As a result of these factors, the Company s actual results may differ substantially from those expressed or implied by the forward-looking statements. The Financial Statements of the Company and its subsidiary were prepared and are being presented in accordance with the accounting practices adopted in Brazil, i.e., in accordance with the rules issued by the Accounting Pronouncements Committee (CPC) and approved by CVM, in effect for fiscal year 2010, as well as in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). In addition, pursuant to CVM Rule 656, the Company chose to present again its 2010 Quarterly Information (ITR), in accordance with the new accounting standards mentioned above, with comparisons in relation to 2009, which also was adjusted for the rules in effect in 2010, until the date of presentation of the 1 st ITR of 2011, i.e., May 15, Therefore, as required by said rule, the Financial Statements for the fiscal year ended December 31, 2010 include an explanatory note that shows, for each quarter, the impacts on the results and shareholders equity resulting from the full adoption of the rules in effect for

27 Wilson Rio Mardonado Laís Cristina de Sá Bortolozzo Ingrid Gentina Palmeiro Investor Relations Tel: