4Q10 and 2010 Results. March 11 th, 2011

Transcription

1 4Q10 and 2010 Results March 11 th,

2 Agenda Period Highlights Brazilian fertilizer market Heringer s Sales and Breakdown by Crop Specialty Products Client Base and Market Share Mixing Units and Production Capacity Financial Results Income Statements Working Capital Days Financial Highlights Cash Flow Ownership Breakdown FHER3 Stock Performance 2011 Outlook International Raw Material Prices Seasonality Agricultural Commodities Prices Barter ratio of agricultural products versus fertilizers Grain production, planted area and Brazilian fertilizer market 2

3 (inthousands of metric tons) (inthousands of metric tons) Brazilian Fertilizer Market Deliveries Quarter % - 0.1% + 9.4% % 4,197 6,472 7,848 22,429 22,400 24,516 4Q08 4Q09 4Q Significant growth in delivery volume in the year, driven by the increase in agriculture commodity prices combined with the good barter ratio in the period Source: Anda 3

4 (inthousands of metric tons) (inthousands of metric tons) Brazilian Fertilizer Market Local Production Quarter % + 9.3% - 5.7% % 1,588 2,228 2,436 8,878 8,373 9,340 4Q08 4Q09 4Q Higher local production driven by growing demand Source: Anda 4

5 (inthousands of metric tons) (inthousands of metric tons) Brazilian Fertilizer Market Imports Quarter % % % % 3,121 4,571 15,387 11,021 15,270 1,646 4Q08 4Q09 4Q Increase in imports due to demand Source: Anda 5

6 (in millions of metric tons) Brazilian Fertilizer Market Inventories Inventories well balanced during 2010, for an adequate inventory/use ratio 28.8% 11.0% % 17.9% % 15.4% % - 0.6% 14.1% Inventories/ Usage Source: Anda 6

7 (inthousands of metric tons) (inthousands of metric tons) Heringer s Sales and Breakdown by Crop The diversification of sales across crops continued in the period Strong growth in 2010 well above market Good barter ratio (fertilizers vs. agricultural products) in 2010 Quarter % Σ % Σ 1,550 Σ 1, % % + 3.7% % % % % Σ 4, % Σ 3, Σ 3, , % % - 1.0% % % % 4Q08 4Q09 Market 4Q % Market % Soybean Corn Coffee Reforest Others Sugarcane Soybean Corn Coffee Reforest Others Sugarcane 7

8 (in thousands of metric tons) Specialty Products Strong growth in Specialty Products share of overall sales in 4Q10 and 2010 Specialty products help boost margins and improve customer loyalty with their high quality and efficiency One of the largest portfolios of specialty products on the market (31 products) Share of Specialty Products Specialty Products Line Conventional Especialty Σ 4, % Σ 3,933 1,044 1, % Σ 1,550 Σ 1, ,063 1, % % + 1.8% 2,889 3, % 4Q09 4Q Sales Volume 4Q09 4Q % 70% 73% 71% 24% 30% 27% 29% 8

9 Client Base and Market Share Continued growth in Market Share Solid client base Number of Clients Market Share 34,997 45,190 44, % 17.5% 18.5% Source: Anda / Heringer 9

10 Mixing Units and Production Capacity 19 units located in the main consumer markets, installed mixing capacity of 5.7 million tons 1 Sulfuric Acid and Single Super Phosphate (SSP) Unit NORTH NORTHEAST Total deliveries per country region Rosário do Catete Camaçari 28.6% 27.6% 29.7% 1.9% 12.2% MIDWEST Rondonópolis Anápolis Rio Verde Catalão Uberaba Iguatama Três Corações Manhuaçu Dourados Bebedouro Ourinhos Paulínia São João do Manhuaçu Viana SOUTHEAST North Northwest Midwest Southeast South Legend Mixing Units SSP Unit Porto Alegre Rio Grande Paranaguá SOUTH 10

11 Agenda Period Highlights Brazilian fertilizer market Heringer s Sales and Breakdown by Crop Specialty Products Client Base and Market Share Mixing Units and Production Capacity Financial Results Income Statements Working Capital Days Financial Highlights Cash Flow Ownership Breakdown FHER3 Stock Performance 2011 Outlook International Raw Material Prices Seasonality Agricultural Commodities Prices Barter ratio of agricultural products versus fertilizers Grain production, planted area and Brazilian fertilizer market 11

12 Income Statement 4Q10 and 2010 (R$ thousand) 4Q10 % NR 4Q09 % NR % 10/ % NR 2009 % NR Gross Revenue Net Revenue ,0% ,0% 37,3% ,0% ,0% 10,3% COGS ( ) -78,5% ( ) -93,7% 15,1% ( ) -86,8% ( ) -92,5% 3,5% Gross Profit ,5% ,3% 366,2% ,2% ,5% 93,3% SG&A ( ) -7,7% (88.585) -9,1% 16,2% ( ) -9,0% ( ) -8,3% 20,5% EBITDA ,0% (44.153) -4,5% ,0% ,2% Adjusted EBITDA (12.249) * -1,3% * 1,2% Net Fin. Income / (Exp.) (23.092) -1,7% (12.058) -1,2% (81.203) -2,3% ,5% Net Income ,5% (35.200) -3,6% ,8% ,9% % 10/09 *Values adjusted to the impact of REFIS Note: The values of 2009 have been adjusted to IFRS Strong margin recovery (gross/ebitda/net) in 4Q10 over 4Q09 Important improvement in Gross/EBITDA margins in 2010 over

13 Income Statement (Distribution and Production) 2010/2009 Fertilizer Distribution SSP and Sulfuric Acid Production 2010 % NR 2009 % NR 2010 % NR 2009 % NR Gross Revenue 3,550,262 3,160,679 35, ,309 Net Revenue 3,485, % 3,092, % 35, % 100, % COGS (2,996,707) -86.0% (2,807,180) -90.8% (59,511) % (144,001) % Gross Profit 488, % 284, % (23,599) -65.7% (43,692) -43.6% SG&A (318,587) -9.1% (264,458) -8.6% - 0.0% - 0.0% EBITDA 221, % 36, % (9,345) -26.0% (29,280) -29.2% Adjusted EBITDA 221, % 68,045 * 2.2% (9,345) -26.0% (29,280) -29.2% *Values adjusted to the impact of REFIS Note: The values of 2009 have been adjusted to IFRS Costs at the SSP and sulfuric acid production unit in Paranaguá were affected by the temporary downtime 13

14 (R$ thousand) EBITDA Growth 212,331 83,266 90,113 38, EBITDA in 2010 was the highest in Heringer's history 14

15 Working Capital Days Working capital days reflect seasonality Comparisons with same quarters are more appropriate Accounts Receivable Days Inventories Days Accounts Payable Days Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Working Capital Days 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q

16 Key Indicators and Multiples Sales Performance Deliveries volume (MM Tons) % volume growth 32.6% -2.1% 23.2% 15.3% Net Revenue (R$ Thousand) 2,260,839 3,524,559 3,192,314 3,521,473 Market share 13.3% 14.2% 17.5% 18.5% Net Worth 492, , , ,722 % of change -41.9% 21.5% 17.8% Indebtedness (IFRS) Net Debt (R$ Thousand) 216, , , ,358 Indebtedness / EBITDA Indebtedness / Shareholders' Equity Indebtedness / Net Revenue 9.6% 12.9% 14.9% 17.2% Indebtedness (adjusted) Net Debt (R$ Thousand) 172, , , ,226 Indebtedness / EBITDA Indebtedness / Net Revenue 7.6% 11.5% 13.2% 15.2% Indexes EBITDA 83,266 90,113 38, ,331 EBITDA Margin 3.7% 2.6% 1.2% 6.0% Net Debt (R$ Thousand) 216, , , ,358 Shares Closing Price Number of Shares (Thousand) 48,566 48,810 48,471 48,471 Market Value (R$ Thousand) 954, , , ,326 Enterprise Value 1,170, ,748 1,000,695 1,056,684 EV/EBITDA Earnings per share Price Earnings (P/E) Improvement in key indicators and multiples 16

17 Cash Flow (R$ thousand) 4Q Income before Taxes and Social Contribution 167,490 88,386 Non cash flow impact expenses (revenues) 10,878 52,118 Assets reduction / (increase) 143,709 (158,082) Liabilities Increase / (reduction) (244,704) (132,110) Operating Activities cash flow 77,373 (149,688) Investing Activities cash flow (17,014) (76,723) Financing Activities cash flow 8, ,425 Cash Generated (Used) 69,046 23,014 Net Increase (Decrease) In Cash Initial Cash 107, ,040 Ending Cash 176, ,054 Net Increase (decrease) in Cash 69,046 23,014 Transactions not involving cash Purchase of fixed assets using ICMS credits ,327 Adequate working capital management Execution of investment plan 17

18 Adoption of IFRS/CPCs and Associated Impacts 1. Costs attributed (revision of value of fixed assets) Revision of fair market value, with impacts on Fixed Assets and Shareholders' Equity Revision of the useful life of assets Revision of depreciation based on adjusted values and new useful life 2. Information by segment Breakdown of income statement by SSP and Sulfuric Acid production and fertilizer distribution Net sales by region in Brazil Fixed Assets by region in Brazil 3. Reclassifications on the Financial Statements Rural vendor and credit operations to current liability with increase in net debt Increase in accounts receivable due to reclassification of rural vendor and credit operations Deferred taxes to non-current assets Note: We suggest a thorough reading of the explanatory notes 18

19 Heringer Ownership Breakdown FHER3 is one of the 100 most liquid stocks on the BOVESPA and components of the INDX, IGC, SMLL and ITAG stock indexes At the end of 2010, the free-float registered 75 foreign investors and 3,130 Brazilian investors Ownership Breakdown and Free-Float Foreign and Brazilian Investors on Free-Float 120% % Brazilian % Foreign No. Foreign No. Brazilian 4, % 4,000 3,500 Controlling Group 67.8% Free-Float 32.2% 80% 60% 49% 46% 51% 58% 58% 3,000 2,500 2,000 40% 1,500 20% 51% 54% 49% 42% 42% 1, % dec/09 mar/10 jun/10 sep/10 dec/

20 Stock Performance in 2010 Average daily trading volume of R$ 1,311,078 Average daily trades of 202 Loss of 14.2% in 2010 x 1.0% high in IBOVESPA Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 20

21 Agenda Period Highlights Brazilian fertilizer market Heringer s Sales and Breakdown by Crop Specialty Products Client Base and Market Share Mixing Units and Production Capacity Financial Results Income Statements Working Capital Days Financial Highlights Cash Flow Ownership Breakdown FHER3 Stock Performance 2011 Outlook International Raw Material Prices Seasonality Agricultural Commodities Prices Barter ratio of agricultural products versus fertilizers Grain production, planted area and Brazilian fertilizer market 21

22 1Q11 and 2011 Outlook Sector stocks should continue to adjust over the course of 2011 Average prices for fertilizer raw materials higher than in 4Q10 Seasonality expected in 2010 is 39% in 1 st half and 61% in the 2 nd half of 2011 Brazilian fertilizer market expected to grow by 6.0% to 26.0 million metric tons in 2011 Positive scenario for agriculture commodities in 2011: profitability of rural producers Grain output projected to grow in the 2010/11 season 22

23 International Raw Material Prices Average prices for fertilizer raw materials higher than in 4Q10 Despite the recent increase, barter ratios still remain at favorable levels 1400 MAP/DAP-CFR TSP - CFR KCL in Bulk - CFR Urea in Bulk - CFR Ammonium Nitrate - CFR Ammonium Sulphate - CFR Oct/06 Jan/07 Apr/07 Jul/07 Oct/07 Jan/08 Apr/08 Jul/08 Oct/08 Jan/09 Apr/09 Jul/09 Oct/09 Jan/10 Apr/10 Jul/10 Oct/10 Jan/11 Source: Heringer - Prices in US Dollar CFR* = cost and freight 23

24 Brazilian Fertilizer Market - Seasonality 38% 51% 37% 35% 39% 62% 49% 63% 65% 61% E 1 st Half 2 nd Half Source: Anda / Heringer 24

25 (in million tons) Brazilian Fertilizer Market Evolution and Expectations for 2011 Expected growth of 6% in E Source: Anda / Heringer 25

26 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 = Bag Prices 26

27 Agricultural Commodities International prices: recent evolution Soybean US$/bushel Corn US$/bushel Sugar US$/pound Coffee US$/pound Source: CME Group 27

28 Barter Ratio of Agricultural Products versus Fertilizers Soybean Paraná (bag/60kg) Corn Paraná (bag/60kg) Sugarcane São Paulo (tons) Coffee (Brazil) Sugarcane SP (t) Coffee Robusta (bag 60kg) Coffee Arabica (bag 60kg) Source: Agroconsult 28

29 Grain Production and Planted Area Expected growth of 2.2% in planted area in the 2010/2011 marketing year * Expected growth of 3.7% in Brazilian grain production for the 2010/11 marketing year * 143, , , ,270 47,526 47,927 47,423 48, / / / /2011* Grain Production (1000 t) Planted Area (1000 ha) Source: Agroconsult/ * Agroconsult's Projection and Company's Estimate 29

30 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 Brazilian Securities and Exchange Commission (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. On December 28, 2007, Federal Law 11,638 was enacted, as amended by Executive Order 449 dated December 4, 2008, which modified and introduced new provisions to Brazilian Corporation Law. The Law and Executive Order sought to update Brazilian Corporation Law to enable convergence of the accounting standards adopted in Brazil with the international accounting standards issued by the International Accounting Standards Board (IASB). Their application of said law and executive order is mandatory for financial statements for fiscal years starting on or after January 1, As of December 31, 2009, the Company will disclose a note reconciling the differences between the financial statements prepared in accordance with BRGAAP and IFRS, and as of 2010, the company will prepare its financial statements fully in accordance with international standards, as required by the regulations of the Novo Mercado Special Corporate Governance Segment. The Company, pursuant to CVM Resolution 603/09, as amended by CVM Rule 626/10, opted to present its quarterly information during fiscal year 2010 in accordance with the accounting standards effective through December 31, The following rules are only those that could have a more relevant impact on the Company s financial statements. In accordance with CVM Resolution 603/09, the figures reported in these quarterly information statements, including those used for comparison purposes, must be reported again for comparison purposes at least in the financial statements for the fiscal year ending December 31,

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