GRUPO INDUSTRIAL SALTILLO

Transcription

1 GRUPO INDUSTRIAL SALTILLO 3Q18 Conference Call October 24,

2 Forward Looking Statement This presentation and discussion may contain forecasts or projections in accordance with the vision and expectations of the Administration with respect to the performance of the Company, the businesses and future events. These forecasts and projections are subject to risks, uncertainties and assumptions that are uncertain. Several factors can cause actual results to differ materially from those forecasts, projections and plans of the Administration, including, without limitation, business development and marketing of new products, the demand for and acceptance of the Company s products, economic conditions in the product markets and the different regions, the cost of raw materials and energy and the fluctuation of the exchange rate. FINANCIAL EXPECTATIONS The financial expectations, forecasts and projections in this presentation reflect the current beliefs of the Company and its Administration. The Company is not required and does not acquire duty to update this presentation or any forecast, projection or expectation as a result of new information, events or circumstances subsequent to this date. 2

3 JOSÉ MANUEL ARANA - CEO MAIN HIGHLIGHTS & STRATEGIC OVERVIEW 3

4 3Q18 Scenario Three countries concluded negotiations Supports GISSA s strong position Growth potential for the auto industry Capturing more than half of the population to vote Rejecting the status quo No setbacks 4

5 Draxton Industry Overview 60% Revenues Europe + China USMCA Strong position Attractive supply option Highly integrated in new regional content (above 90%) 5

6 Accelerating Transformation Process US$ 7 million 1% of yearly sales Could potentially double our investment Launching its long-term Technology Plan for Draxton Increase competitiveness and adapt production processes to the needs of our clients Draxton will invest heavily in technology, research and development worldwide To meet sector challenges and technological trends 6

7 Construction Industry Overview Construction Industry performing well New government seeking to boost the construction sector We expect to highly benefit from these initiatives US increasing tariffs to tile imported from China Mexican economy has decelerated Domestic ceramic tiles contracted Housewares Mexican market facing exchange rate & raw material increases 7

8 4Q18 & 2019 Continue to implement our Strategic Plan Focus on Vitromex turn around process Increase shareholder value 8

9 FINANCIAL PERFORMANCE JORGE MERCADO - CFO 9

10 ene-17 mar-17 may-17 jul-17 sep-17 nov-17 ene-18 mar-18 may-18 jul-18 sep-18 nov-18 Mxp/kWh 3Q18 Challenges Energy increases Mexico Industrial Energy Cost Czech Republic Ind. Energy Cost With-peak Sin horario tariff punta Off-peak Con horario tariff punta Spain Ind. Energy Cost Italy Ind. Energy Cost Sources: FEAF (Spain), CAEF (Europa), BDGUSS (Alemania), My Steel (China) / EEX 10

11 1Q17 2Q17 3Q17 4Q17 ene-18 feb-18 mar-18 abr-18 may-18 jun-18 jul-18 ago-18 sep-18 USD/Ton 334 Mxp/kWh Q18 Challenges Scrap Scrap Metal (Busheling) Main Scrap References Spain Germany Europe China 100 Sources: FEAF (Spain), CAEF (Europa), BDGUSS (Alemania), My Steel (China) / EEX 11

12 Consolidated Results Ps Million Sales Evolution Fixed Expenses Evolution 5,400 5,200 5,000 4,800 5,195 Q3 vs Q2 ~(400) Ps Million Draxton Driven 28% to 25% 4, % One time benefit Ps.58 million 760 4,600 4,400 4,200 29% 28% 29% 25% % % % 16% 4,000 Q1 Q2 Q3 660 Q1 Q2 Q Percentage = % Gross Margin Percentage = Fixed Expenses to Net Sales Platform replacement Diesel vehicles sales temporary slowdown US OEM global downsizing 12

13 3Q18 vs 3Q17 Ps Million 3Q17 3Q18 Var % 4,535 4,796 6% 3Q17 3Q18 Var % 1, (20%) 181 Net Sales 13% Gross Margin Draxton Mx Draxton E+A Vitromex Calorex Cinsa 15% 15% -109 Draxton Mx Draxton E+A Vitromex Calorex Cinsa EBITDA Q17 3Q18 Var % (29%) -142 Draxton Mx Draxton E+A Vitromex Calorex Cinsa 13

14 2017 EBITDA Volume Price / Mix Energy Non-recurring 3Q17 Raw Materials 2018 EBITDA Draxton Performance 3Q18 vs 3Q17 USD Million 3Q18 3Q17 Change 9M18 9M17 Change EBITDA (24%) (2%) Margin 14% 19% 18% 20% North America (16%) % Margin 15% 20% 20% 21% Europe / Asia (32%) (5%) Margin 14% 19% 17% 19% JVs 5 5 1% % Margin JVs 21% 23% 21% 26% Highlights NAFTA Higher volumes in Irapuato + Surcharge Cost increases: Scrap metals Ferroalloys Energy Launching of new parts EBITDA Draxton One time benefit in 3Q Highlights EUROPE + ASIA Temporary slowdown Diesel market - Europe Higher raw material & energy costs Scrap metal cost in China 50% rise: Environmental regulations Steel and foundry industries competing 14

15 Vitromex Performance 3Q18 vs 3Q17 Net Sales 3Q Gross Margin 3Q % Price (59.9) (6.9)% Volume / Mix (39.4) (4.5)% Deleveraging (9.0) (1.0)% Fx (4.9) (0.6)% Gross Margin 3Q % Var. (113.2) (13.0)% Gradual improvements on overall efficiency equipment Recovering US customers Reduction of Inventory Domestic sales growth Strengthening relationships with key distributors US volume contraction Lower average price from inventory reduction strategy Lower fixed cost absorption * Volume includes deleveraging and absorption 15

16 Calorex Performance 3Q18 vs 3Q17 Growing construction industry Gained market share Brand reliability Operating efficiencies Doubled EBITDA levels Exceeded Expectations EBITDA Evolution Ps Million Historical Greater EBITDA achieved in 4Q due to cycle 27 Q3 YTD

17 Cinsa Performance Overview EBITDA Evolution Ps Million Market dynamics remained strong Double-digit top line growth Higher gas and raw materials costs 16 8 Steady growth pace Q YTD 17

18 GIS Debt Position Total Debt USD 405 million 58% - USD 19% - EUR 23% - MXP Total Debt to EBITDA 2.9x Net Debt to EBITDA 2.5x In line with the covenants set by the financial institutions. Interest Coverage 5.1x YTD Capex over Ps 500 Million expect to reach around Ps 800 Million by year end. 18

19 Q&A 19

20 GRUPO INDUSTRIAL SALTILLO 3Q18 Conference Call October 24,