SONAE INDÚSTRIA INVESTOR PRESENTATION. 14 th June 2010

Transcription

1 INVESTOR PRESENTATION 14 th June

2 OVERVIEW 2

3 OVERVIEW SHAREHOLDER STRUCTURE SHAREHOLDER STRUCTURE AT 31 st MARCH 2010 EFANOR FREE FLOAT % % Sonae Indústria SGPS 3

4 OVERVIEW WE ARE ONE OF THE LARGEST PRODUCERS IN THE WORLD. WOOD PANEL WITH 28 PLANTS LOCATED IN 8 COUNTRIES AND SPREAD ACROSS 3 CONTINENTS. OUR BUSINESS IS EXCLUSIVELY FOCUSED ON THE PRODUCTION OF WOOD BASED PANELS. 4

5 OVERVIEW OUR OPERATIONS * * As of 13 th May

6 OVERVIEW OUR PRODUCTS OVER 90% OF OUR RAWBOARD CAPACITY IS TO MANUFACTURE PB & MDF. PB Very versatile Suitable for all general uses in furniture and construction MDF Excellent substitute for solid wood Ideal for furniture, flooring and building industry requirements OSB Suitable for structural and non-structural applications in the construction industry-highly resistant PB Particleboard MDF Medium Density Fiberboard OSB Oriented Strand Board 6

7 OVERVIEW OUR PRODUCTS WITH VARIOUS APPLICATIONS KITCHEN / OFFICE / HOME FURNITURE CONSTRUCTION FLOORING DECORATION PACKAGING 7

8 OVERVIEW SALES IN 2009*, APPROXIMATELY 82% OF OUR SALES WERE GENERATED IN EUROPE WE TRANSFORM MORE THAN 50% INTO VALUE ADDED PRODUCTS SALES BY MARKET SALES BY PRODUCT CANADA 10% S.AFRICA 8% IBERIAN P. 25% FLOORING 1% T&G 5% OTHERS 11% PB 20% UK 6% CTS 9% MDF 17% GERMANY 37% FRANCE 14% MF 29% OSB 7% HB 1% T&G - Tongue and groove CTS - Cut to size * (excluding Brazilian Figures) 8

9 OVERVIEW OUR HISTORY SONAE (Sociedade Nacional de Estratificados, SARL) was established to manufacture decorative High Pressure laminates Acquisition and modernization of AGLOMA the largest domestic Particleboard producer in Portugal Starting the international expansion with the acquisition of SPANBOARD in Northern Ireland Maia Oliveira do Hospital (where AGLOMA began) st Headquarter of Sonae, Porto Acquisition of a 50% shareholding in NOVOPAN particleboard manufacturer in Portugal and beginning of Particleboard production Consolidation of the leadership position in Portugal with the acquisition of SIAF and PAIVOPAN Mangualde (where SIAF began) 9

10 OVERVIEW OUR HISTORY SINCE 1993 S INSTALLED CAPACITY GREW THROUGH BOTH ACQUISITIONS AND ORGANIC GROWTH. Millions of m : Investment period in Greenfield plants in Brazil, South Africa and in the UK : Acquisition of GLUNZ with operations in Germany, France and in the UK : Restructure of Glunz Investment period in Portugal, Spain, Canada and Brazil. Acquisition of Sappi in South Africa : : JV with Tarkett (Germany) 2006: Acquisition of Hornitex and Darbo 2008 and 2009: Restructuring Phase; August 2009: sale of Brazilian operations April 2010: sale of Lure plant (France) : Acquisition of TAFISA the second biggest producer in Spain with production facilities in Spain and Canada 10,1 4 6,71 7,34 8,0 7, ,83 1, * *as ofmay

11 OVERVIEW WOOD BASED PANEL PLAYERS WE ARE ONE OF THE LARGEST GLOBAL MANUFACTURERS OF WOOD BASED PANELS IN EUROPE AND WORLDWIDE EUROPE Thousands of m 3 WORLDWIDE Thousands of m 3 M&P Kaindl (Kronospan) M&P Kaindl (Kronospan) Sonae Indústria Swiss Krono Group Egger Pfleiderer Finsa Kastamonu Entegre Mauro Saviola Fantoni Sonae Indústria Pfleiderer Swiss Krono Group Egger Louisiana-Pacific Norbord Duratex + Satipel Finsa Masisa Unilin Weyerhaeuser Frati Ainsworth Norbord Flakeboard Triax Georgia-Pacific Interbon 980 Roseburg Constantia Iso 900 Kastamonu Entegre Swedwood 640 Temple Inland th May

12 OVERVIEW CAPACITY PRODUCTION TOTAL CAPACITY (RAWBOARD) IS 7.5 MILLION M 3, APPROXIMATELY 80% OF WHICH IS LOCATED IN EUROPE. RAWBOARD CAPACITY BY REGION Thousands of m 3 RAWBOARD CAPACITY BY PRODUCT Thousands of m Central Europe Iberian Pen. RoW PB MDF OSB PB MDF OSB Central Europe Iberian Pen. RoW Central Europe: France, Germany and the UK RoW (Rest of the World): Canada and South Africa As of 13 th May

13 OVERVIEW OVERVIEW FIGURES FY 09 CONSOLIDATED TURNOVER OF 1.3 BILLION EUROS RECURRENT EBITDA OF 46 MILLION EUROS; MARGIN OF 4% TOTAL EBITDA OF 104 MILLION EUROS, WHICH INCLUDES THE CAPITAL GAIN OF TAFISA BRASIL OF 84 MILLION EUROS AND APPROX. 31 MILLION EUROS OF RESTRUCTURING COSTS; TURNOVER & RECURRENT EBITDA MARGIN RECURRENT EBITDA Total EBITDA Millions of Euros % 6% 13% 15% 4% FY05 FY06 FY07 FY08 FY Millions of Euros % 13% 15% 100 6% 46 4% FY05 FY06 FY07 FY08 FY Millions of Euros FY05 FY06 FY07 FY08 FY09 13

14 OVERVIEW GEOGRAPHICAL REGIONS WITH VARYING LEVELS OF PROFITABILITY BETWEEN OUR 3 MAIN GEOGRAPHICAL REGIONS: TURNOVER & RECURRENT EBITDA IBERIA Mn RoW Turnover & Recurrent EBITDA Margin % 18% % 10% % 30% 28% 28% 14% 15% 14% 7% 0 FY06 FY07 FY08 FY09 TURNOVER & RECURRENT EBITDA CENTRAL EUROPE Mn FY06 FY07 FY08 FY Turnover EBITDA % Turnover w/o Brazil EBITDA % wo Brazil % 9% 0% -4% 0 FY06 FY07 FY08 FY09 14

15 HIGHLIGHTS OF 1Q10 RESULTS 15

16 HIGHLIGHTS OF 1Q10 RESULTS CONSOLIDATED OPERATIONAL REVIEW 1Q10 Highlights Markets recovering albeit from a low level Production efficiency improved 17%, as a result of the restructuring program Prices following a positive trend Extreme winter conditions in Central Europe led to production problems and significantly higher variable costs (comparing 1Q10 to 4Q09) Recurrent EBITDA recovered to 7 M Euro compared to 1Q09 (like-for-like) Subsequent Highlights Lure plant sold (April) 150 M Euro of bond loans refinanced (May) Matrix organization adopted, creating two new functional roles (in the Executive Committee) o CM & SO - Chief Marketing and Sales Officer o CI & TO - Chief Industrial and Technology Officer 16

17 HIGHLIGHTS OF 1Q10 RESULTS CONSOLIDATED OPERATIONAL REVIEW Regarding our restructuring process Beginning of this year, we close Duisburg plant. Additionally, a voluntary social plan for a further 57 employees at our Horn plant was agreed. During 1Q10, like-for-like, we were able to decrease our fixed costs by 5 million Euros, when compared to the same period last year. We expect a continuing decrease during this year, when compared to 2009, at the same level. 17

18 HIGHLIGHTS OF 1Q10 RESULTS CONSOLIDATED OPERATIONAL REVIEW In 1Q10, sales volume were affected by adverse weather conditions and by the closure of Kaisersesch plant. Capacity utilization from 4Q09 to 1Q10 increased. CONSOLIDATED VOLUME SALES WITHOUT BRAZIL Millions of m3 2,50 2,00 1,76 1,70 1,60 1,43 1,40 1,34 1,37 1,45 1,42 1,50 1,00 0,50 0,00 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 110% 100% 90% 80% 70% 60% 50% 40% 30% Capacity Utilization (W/o Brazil) - quarterly 71% 72% 74% 75% 65% 61% 64% 62% 66% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 18

19 HIGHLIGHTS OF 1Q10 RESULTS PRICE AND COST EVOLUTION During 1Q10, chemical prices moved slightly up and wood prices increased sharply, led by seasonal factors and market demand recovery. Additionally, consumption per cubic meter was higher due the lower industrial efficiency caused by extreme winter conditions in Central European countries. 1,4 1,2 1,0 0,8 0,6 0,4 CONSOLIDATED QUARTERLY AVERAGE COSTS (eur/m3) BASE 100:1Q07 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 Wood * Chemicals CONSOLIDATED QUARTERLY AVERAGE PRICES (eur/m3) BASE 100:1Q07 * 1,3 Prices followed a positive trend. Nevertheless, price increases in 1Q10 were more than offset by costs increases. 1,1 0,9 0,7 * (excluding Brazilian Figures) 0,5 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 PB MDF OSB 19

20 CHEMICALS: UREA AND METHANOL CHEMICAL COSTS HAVE A SIGNIFICANT IMPACT IN OUR COST STRUCTURE (AROUND 30% VARIABLE COSTS) UREA AND METHANOL ARE THE MAIN CHEMICALS USED TO PRODUCE RESINS USED IN OUR PRODUCTION NWE ICIS Methanol Prices - Out. 2003_ Euro / mton HIGHLIGHTS OF 1Q10 RESULTS 20 Out-03 Jan-04 Abr-04 Jul-04 Out-04 Jan-05 Abr-05 Jul-05 Out-05 Jan-06 Abr-06 Jul-06 Out-06 Jan-07 Abr-07 Jul-07 Out-07 Jan-08 Abr-08 Jul-08 Out-08 Jan-09 Abr-09 Jul-09 Out-09 Jan-10 Abr-10 Contract Price SPOT Price Jan-03 Abr-03 Jul-03 Out-03 Jan-04 Abr-04 Jul-04 Out-04 Jan-05 Abr-05 Jul-05 Out-05 Jan-06 Abr-06 Jul-06 Out-06 Jan-07 Abr-07 Jul-07 Out-07 Jan-08 Abr-08 USD / mton Jul-08 Out-08 Jan-09 Abr-09 Jul-09 Out-09 Jan-10 Abr-10 UREA SPOT PRICES source: ICIS Lor

21 HIGHLIGHTS OF 1Q10 RESULTS CONSOLIDATED OPERATIONAL REVIEW Consolidated operational figures: Consolidated Turnover in 1Q10 increased to 320 million Euros, and recurrent EBITDA decreased from 16 to 7 million Euros, when compared to 4Q09; But comparing to last year, like-for-like, recurrent EBITDA increased from zero to 7 million Euros. Consolidated Total EBITDA in 1Q10 was a negative 6 million Euros, as a result of Non-recurrent restructuring costs in Germany and France totalling 13 million Euros, which were compensated by the release of provisions. Mn Consolidated Turnover & Recurrent EBITDA Margin Mn Consolidated Recurrent EBITDA ,7% 3,9% 3,8% 2,0% 3,7% 5,1% 0,1% 320 2,2% Q09 2Q09 3Q09 4Q09 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 Turnover Consol. Recurrent EBITDA Consol. Turnover W/o Brazil Consol. Recurrent EBITDA W/o Brazil Consolidated Recurrent EBITDA Consol. Recurrent EBITDA Wo Brazil 21

22 HIGHLIGHTS OF 1Q10 RESULTS GEOGRAPHIC REVIEW OF OPERATIONS IBERIA Iberia continue to suffer from tough market conditions. Compared to 1Q09, Iberia recovered, with both volumes sold and Turnover increasing by 9%. Nevertheless, Recurrent EBITDA decreased by 22% to 6 million Euros due to the variable cost increases. Comparing 4Q09 with 1Q10, price increases were offset by a decline in volumes, so that turnover in Iberia remained relatively flat from 4Q09 to 1Q10. The recurrent EBITDA margin decreased from 9% to 7%, due to the sharp production cost increases Mn TURNOVER & RECURRENT EBITDA IBERIA ,4% 9,1% 9,7% 8,6% ,5% 1Q09 2Q09 3Q09 4Q09 1Q10 These cost increases are not only driven by seasonal wood price increases but also due to the higher competition for raw-materials from biomass and pellet industries. To face this situation we have been implementing price increases. 30,0% 25,0% 20,0% 15,0% 10,0% 5,0% 0,0% 22

23 HIGHLIGHTS OF 1Q10 RESULTS GEOGRAPHIC REVIEW OF OPERATIONS CENTRAL EUROPE (Germany, France and the UK) Mn 193 TURNOVER & RECURRENT EBITDA CENTRAL EUROPE ,2% -5,3% -5,2% -0,2% -4,7% 1Q09 2Q09 3Q09 4Q09 1Q10 30,0% 25,0% 20,0% 15,0% 10,0% 5,0% 0,0% -5,0% -10,0% Central Europe was affected by a low level of industrial activity at the beginning of 2010, mainly as a result of severe adverse weather conditions. In Germany, during 1Q10 comparing to 4Q09, variable cost increased by 15% and price increases did not offset such higher costs. As a result, EBITDA margin decreased 4pp. In France, during 1Q10 comparing to 4Q09, despite higher volumes sold, cost increases of 12% combined with the difficulty to increase prices, resulted in a strong margin decrease. In the UK, our operational performance was also hurt by variable costs increases but we were able to keep EBITDA margin. 23

24 HIGHLIGHTS OF 1Q10 RESULTS GEOGRAPHIC REVIEW OF OPERATIONS REST OF THE WORLD (Canada and South Africa) In Canada, our capacity utilization continue to increase (8pp from 4Q09 to 1Q10), and turnover increases by 21% to 34 million Euros. Nevertheless, variable cost increases eliminated any margin improvement. In S.A., volumes sold in 1Q10 were flat when compared to 4Q09. Recurrent EBITDA remained flat over the last 3 quarters. Mn ,8% 6,8% Turnover & Recurrent EBITDA Margin RoW ,9% 16,3% 18,1% 13,5% 16,4% 59 15,8% 1Q09 2Q09 3Q09 4Q09 1Q10 Turnover Turnover W/o Brazil Margin Margin W/o Brazil For the Rest of the World, like-for-like, when compared to 1Q09, 1Q10 Turnover in this region increased by 37% and Recurrent EBITDA more than tripled. 24

25 HIGHLIGHTS OF 1Q10 RESULTS CONSOLIDATED FINANCIAL REVIEW Additions to Fixed Assets in 1Q10 were 4 million Euros, mostly related to investments in essential maintenance, Health & Safety and Environmental improvements. Working Capital increased by 35 million Euros during 1Q10 due to the normal seasonal effect on receivables and higher operational activity which led to an increase of about 7 million Euros in inventories. NET DEBT : Acq. of Hornitex and Darbo : Acq. of 37% Tafisa Brasil and dividends payment Q : Sale of Tafisa Brasil

26 HIGHLIGHTS OF 1Q10 RESULTS SCHEDULED LOAN REPAYMENTS SCHEDULED LOAN REPAYMENTS * (as of 31st March 2010) H10 2H In May 2010, we refinanced 150 million Euros of bonds maturing in 2012 and 2013 in order to increase our debt maturity and to adjust our debt repayment profile to expected cash flow generation. Our debt has no consolidated financial ratio covenants * Does not include Securitization or Short term facilities 26

27 HIGHLIGHTS OF 1Q10 RESULTS PROFIT & LOSS ACCOUNT (euro millions) 1Q09 1Q09* FY09 4Q09 1Q10 Turnover Other Operational Income EBITDA 4 (2) (6) Recurrent EBITDA Recurrent EBITDA Margin % 1,7% 0,1% 3,6% 5,1% 2,2% Depreciation and amortisation (31) (29) (121) (27) (29) Provisions and Impairment Losses 3 (3) (31) (9) (3) Operational Profit (25) (28) (2) 8 (24) Net Financial Charges (15) (14) (54) (12) (11) o.w. Net Interest Charges (10) (10) (30) (6) (5) o.w. Net Financial Discounts (3) (3) (13) (4) (3) Profit before taxes (EBT) (40) (42) (56) (3) (35) Taxes (0) (0) (4) (0) (0) o.w. Current Tax (0) (0) (1) 0 (0) Net Profit/ (Loss) attributable to Shareholders of Sonae Industria (40) (42) (59) (3) (35) 27

28 HIGHLIGHTS OF 1Q10 RESULTS BALANCE SHEET (euro millions) 1Q09 1H09 9M09 FY09 1Q10 Non Current Assets Tangible Assets Goodwill Deferred Tax Other Non Current Assets Current Assets Inventories Trade Debtors Cash & Investments Other Current Assets Total Assets Shareholders' Funds Minority Interests Shareholders' Funds + Minority Interests Interest Bearing Debt Short term L-M term Trade Creditors Other Liabilities Total Liabilities Total Liabilities, Shareholders' Funds and Minority Interests Net Debt

29 LOOKING FORWARD 29

30 LOOKING FORWARD We expect a continuing recovery in the wood based panels industry over the coming quarters both in terms of sales volumes and sales prices. Variable costs are expected to level out, or even decline, as a result of the seasonality of wood prices. Fixed costs should continue to decrease, due to the restructuring measures we have already implemented. We will continue to optimize our operations to further improve our efficiency and productivity. 30

31 OUR STRATEGY 31

32 OUR STRATEGY OUR FOCUS Our PORTFOLIO STRATEGY: Protect market share and profitability in Iberia Increase Profitability and improve competitiveness in Central Europe Grow in our most profitable markets But our SHORT TERM STRATEGY during the crisis has been focused on: Balance Sheet: by minimizing working capital, being extremely selective in making investments and looking for other opportunities to strengthen our Balance Sheet. P&L: Increasing Profitability, by reducing fixed costs and increasing plants efficiency; 32

33 OUR SHORT TERM STRATEGY FOCUS ON BALANCE SHEET MANAGING FOR CASH WORKING CAPITAL HAS BEEN REDUCED INVESTMENTS HAVE BEEN MINIMIZED Additional Fixed Assets Million Euros WORKING CAPITAL: Q 2010 Mn Q07 1H07 9M07 FY07 1Q08 1H08 9M08 FY08 1Q09 1H09 9M09 FY09 1Q Q 2Q 3Q 4Q 33

34 OUR SHORT TERM STRATEGY FOCUS ON BALANCE SHEET STRENGTHENING OUR BALANCE SHEET REASONS TO SELL TAFISA BRASIL BRAZIL RAWBOARD CAPACITY PLANS (PB+MDF) Thousands m 3 we wanted to strengthen our balance sheet Capacity has been increasing which would deteriorate the industry in Brazil in the coming years and consumption was not expected to grow so fast 8. million m 3 (2012) 2,500 2,000 1,500 1, , ,240 1, ,350 1, , million m 3 (2009) Duratex satipel Berneck Masisa Fibraplac Eucatex INSTALLED RAWBOARD CAPACITY IN BRAZIL - TOP PLAYERS - June 09 Millions m 3 June Only includes the largest players Duratex + Satipel 3.22 Masisa Berneck Sonae Indústria Eucatex Arauco This is the market where we were farther away from a leadership position Fibraplac Louisiana-Pacific

35 OUR SHORT TERM STRATEGY FOCUS ON BALANCE SHEET STRENGTHENING OUR BALANCE SHEET IMPACTS FROM SELLING TAFISA BRASIL Total Value of the transaction: 121 million Euros Net Debt + contingencies: 38 million Euros Enterprise Value: 159 million Euros Multiple of 7.8x (adding 60 million Euros ICMS to the Enterprise value; withatotallast12monthseditdaof28,2millioneuros) Total Net debt reduction: 135 million Euros Positive Impact on Shareholders Funds: 73 million Euros Capital gain: 84 million Euros Working capital decreased by approx. 25 million Euros 35

36 OUR SHORT TERM STRATEGY FOCUS ON P&L INCREASING PROFITABILITY WE HAVE BEEN ADAPTING OUR CAPACITY TO THE MARKET DEMAND, BY CLOSING OUR LESS EFFICIENT PLANTS AND/OR LINES IN ORDER TO INCREASE PROFITABILITY 28 * As of 2010 Coleraine continues to have a MF line Kaisersesch continues to have an Impregnation center 36

37 OUR SHORT TERM STRATEGY FOCUS ON P&L INCREASING PROFITABILITY IN TOTAL, WE HAVE CLOSED m 3 CAPACITY We closed 5 plants: We stopped two lines: Coleraine in the UK m 3 PB MDF Line 1 in Meppen Topan I m 3 George in S.A m 3 PB PB Line in Valladolid m 3 Châtellerault in France m 3 OSB St. Dizier in France m 3 MDF Kaisersesch in Germany m 3 PB Already in 2010 Duisburg in Germany m 3 PB AND REDUCED FIXED COSTS BY 46 MILLION EUROS (LIKE-FOR FOR-LIKE AND WHEN COMPARED FY08 WITH FY09 and additional 5 million Euros comparing 1Q10 to 1Q09 37

38 GEOGRAPHIC REVIEW OF OPERATIONS 38

39 GEOGRAPHIC REVIEW OF OPERATIONS IBERIA IBERIA COMPETITIVE LANDSCAPE Sonae Indústria Iberian Capacity Thousands m 3 PB MDF 500 HB 70 PARTICLEBOARD MDF FLOORING HARDBOARD HPL CHEMICALS OTHERS (FURNITURE, COMPONENTS, WOOD VENEER) Source: Sonae Indústria (May 2010) 39

40 GEOGRAPHIC REVIEW OF OPERATIONS IBERIA IBERIA COMPETITIVE LANDSCAPE INSTALLED RAWBOARD CAPACITY IN IBERIA - TOP PLAYERS Millions m 3 PLANTS 12 CAPACITY 1,79 Million m 3 CAPACITY UTILIZATION 1Q % Finsa/Utisa Sonae Indústria Interbon Losan 0,38 0,97 1,79 3,15 Tablicia 0,37 Source: Sonae Indústria (May 2010) 40

41 GEOGRAPHIC REVIEW OF OPERATIONS CENTRAL EUROPE CENTRAL EUROPE COMPETITIVE LANDSCAPE Sonae Indústria Central Europe Capacity Thousands m 3 MDF PB OSB 460 UK GERMANY FRANCE PARTICLEBOARD MDF HPL CPL OSB Source: Sonae Indústria (May 2010) 41

42 GEOGRAPHIC REVIEW OF OPERATIONS CENTRAL EUROPE CENTRAL EUROPE COMPETITIVE LANDSCAPE PLANTS 12 CAPACITY 4.25 Million m 3 CAPACITY UTILIZATION 1Q10 74% INSTALLED RAWBOARD CAPACITY IN CENTRAL EUROPE - TOP PLAYERS Millions m 3 Sonae Indústria 4,25 Egger 3,79 Kronospan M&P Kaindl 3,40 Pfleiderer 3,17 Swiss Krono Group 2,16 Norbord 1,15 Source: Sonae Indústria (May 2010) 42

43 GEOGRAPHIC REVIEW OF OPERATIONS NORTH AMERICA REST OF THE WORLD NORTH AMERICA COMPETITIVE LANDSCAPE PLANTS 1 CAPACITY 0.9 Million m 3 CAPACITY UTILIZATION 1Q % INSTALLED RAWBOARD CAPACITY IN NORTH AMERICA (PB+MDF) - TOP PLAYERS Flakeboard 2,74 Roseburg 2,44 Pfleiderer Temple Inland 1,74 1,90 PARTICLEBOARD Sierra Pine 1,30 Sonae Indústria 0,90 Aconcagua 0,70 CANADA Plum Creek 0,56 Source: Sonae Indústria (May 2010) 43

44 GEOGRAPHIC REVIEW OF OPERATIONS SOUTH AFRICA REST OF THE WORLD SOUTH AFRICA COMPETITIVE LANDSCAPE Sonae Indústria S.A. Capacity Thousands m 3 PB 445 MDF 70 SOUTH AFRICA PARTICLEBOARD MDF Source: Sonae Indústria (May 2010) 44

45 GEOGRAPHIC REVIEW OF OPERATIONS SOUTH AFRICA REST OF THE WORLD SOUTH AFRICA COMPETITIVE LANDSCAPE PLANTS 2 CAPACITY 0,52 Million m 3 CAPACITY UTILIZATION 1Q % INSTALLED RAWBOARD CAPACITY IN SOUTH AFRICA - TOP PLAYERS PG Bison Millions m 3 0,71 Sonae Indústria 0,52 Source: Sonae Indústria (May 2010) 45

46 CORPORATE GOVERNANCE Source: Sonae Indústria (May 2010) Source: Sonae Indústria (May 2010) 46

47 CORPORATE GOVERNANCE BOARD OF DIRECTORS EXECUTIVE COMMITTEE Belmiro de Azevedo [Chairman] Álvaro Cuervo García Paulo Azevedo Per Knuts Thomas Nystén Carlos Bianchi de Aguiar [CEO] Rui Correia [CFO] Christophe Chambonnet [CM&SO] João Paulo Pinto [CI&TO] BOARD OF DIRECTORS Carlos Bianchi de Aguiar [CEO] IBERIA GERMANY FRANCE UNITED KINGDOM CANADA SOUTH AFRICA Rui Correia [CFO] Planning and Controlling Christophe Chambonnet [CM&SO] Sales and Marketing João Paulo Pinto [CI&TO] Industrial and Technology 47

48 CORPORATE GOVERNANCE BOARD COMMITTEES 48

49 MORE ON 49

50 MORE ON HUMAN RESOURCES Approximately 5.4 thousand Employees at the end of 2009 Canada 318 South Africa 345 The Netherlands 19 Number of Employees & Productivity Number of Employees 1) Productivity BASE 100: 2002 Iberia ,0 195,0 Germany ) 123,4 149,5 163,8 167,0 166, , ,0 145, ,0 UK 223 France ) FTE's Excluding Trainnes 2) Without Hornitex and Darbo 95,0 50

51 MORE ON SUSTAINABILITY SUSTAINABILITY REPORT OF Strategic formalisation to approach sustainability reporting and process in the coming years Vision, Mission, Values and Principles Code of Conduct Communication Strategy Sustainability Governance Economic Efficiency Environmental Resources and Efficiency People in the Organisation Local Communities Human rights Product Responsibility 51

52 MORE ON OUR VALUES 52

53 CORPORATE GOVERNANCE CODE OF CONDUCT In 2008, Sonae Indústria implemented a renewed CODE OF CONDUCT, which contains a set of standards based on our shared values that govern the activities of the Sonae Indústria Group; applies to everyone employed by the Group sets out guidance on those matters of business ethics to be complied with by all Employees and service providers when carrying out their professional duties. Sonae Indústria s top managers are expected to set an example for the rest of the organisation through their actions. An ETICHS COMMITTEE was created to further guarantee that the highest standards of business practices are upheld. 53

54 MORE ON SUSTAINABLE USE OF WOOD AND RECYCLING Wood-based panels incorporate a high percentage of sawmill co-products and wood residues as raw materials: forestry residues pallets old or used wood based panels old or used furniture 54

55 MORE ON SUSTAINABLE USE OF WOOD AND RECYCLING Wood-based panels play a key role in the sustainable use of forestry resources as they: represent the natural alternative to solid wood, replacing it in an increasing number of applications allow significant dimensional flexibility, with tailor-made sizes specifically adapted to client / user needs 55

56 MORE ON CO 2 EMISSIONS MITIGATION Wood-based panels help to mitigate climate change: forests are a recognised carbon sink (through photosynthesis) forestry products are CARBON STORES wood-based panels are actually long-term carbon stores if used in construction applications 1 m 3 of panel = 270 kg C = 1 ton CO 2 equivalent! 56

57 MORE ON COGENERATION (CHP) Energy is produced in Combined Heat and Power (CHP) plants non-recyclable waste wood (biomass) is used as fuel for thermal energy production to be used in industrial processes surplus heat is used to additional produce electricity to supply local needs 57

58 58