Conference Call Subscription Agreement for the Acquisition of a Relevant Stake in the capital of Tablemac S.A. May 21, 2012 www.duratex.com.br/ri
2 Overview Colombian market Financial Highlights Deal Structure
Overview Private company, founded in 1988, with shares listed on the Colombian Stock Exchange Segments: wood panels, doors, and furniture Headquartered in Medelin, has 4 plants with the following capacity:.manizales-mdp: 38.000 m³/year.yarumal- MDP: 72.000 m³/year.barbosa- MDF: 132.000 m³/year (pre-operational).guarne- Moveis: 10.000 m³/year Pioneer in MDF production in Colombia (2012). The current suppliers are from Chile and Ecuador, mainly 600 employees Over 150 customers Dec/2011, and none of them generates more than 10% of the company's revenue Market share of 36% in Colombia, approximately, in MDP 3 Plants
Overview Forestry area Reforestation activity : Total area: 7.705 ha (2.665 acquired in 2011) Planted area: 4.212 ha Integration of 20% of wood requirements Located in a region with plenty of wood suppliers at a competitive cost Beggining stages of reforestation activity in the country The sector has received government stimulus, which represents an opportunity for Duratex Tablemac has been working on obtaining certification from Forest Stewardship Council 4
Overview Corporate Structure Família Echavarria Moreno Local Businessman (9%) Valores Incorporados S.A. (3%) Grupo Sura Leader in Insurance in Colombia (2%) Others (79%) Fundacion Sofia Perez Social Fundation (3%) Bolsa y Renta Asset Management (2%) Negócios Vários S.A. (2%) Current number of shares: 25.398.319.390 Only common shares (1 share, 1 vote) Average daily trade of US$ 392 K There are no shareholders' agreement 5 Source: Superfinanciera de Colombia e BVC Colombia 31/3/2012
Overview in US$ million Enterprise Value (May 17, 2012) 201 3.395 Net Revenue 2011 56,3 1.583,5 EBITDA 2011 12,7 426,2 Net Income 2011 2,6 186,4 Nominal Capacity (in 000 m³ per year) MDP 110 1.900 MDF 132 1.800 Hardboard 0 210 Components and Furniture 10 12 Laminate Flooring ( 000 m²) 0 12.000 Land ( 000 ha) 8 230 6
7 Overview Colombian market Financial Highlights Deal structure
Colombian market 28th largest economy in the world and is among the five largest in Latin America GDP, have been growing above the world average CAGR 2000-2010 is 4,4% per year Total population: 46 million: Approximately 13,8 million people have risen from a lower class due to the social policies of the government Access to credit: approximately 17,6 million people of lower classes now have access COLOMBIA Population (2011E) 45.925.397 Geographic Area (km²) 1.138.914 TOTAL GDP &/ capita (2010E) US$ 435,4 billion / US$ 9.800 GDP growth rate 4,30% 8 Currency Peso (COP)
Colombian market MAIN CHARACTERISTICS Open to imports appreciated exchange rate and geographic location Local production is favored by lower logistics costs Consumption and furniture through modernization and rapid growth Potential forest Plywood 17% MDP Imports: Ecuador, Chile, Argentina and Venezuela, mainly CAGR 2007-2011:3,16% Total demand in 1.000 m³ MDF 32% MDP 51% 219 192 190 227 248 2007 2008 2009 2010 2011 MDF Imports: Chile and Ecuador, mainly Tablemac Barbosa: new capacity of 132.000 m³/year, may replace imports CAGR 2007-2011: 10,58% Total demand in 1.000 m³ 61% of internal demand volume is imported 36% of MDP 100% of MDF 61% of plywood Import 107 109 103 146 160 2007 2008 2009 2010 2011 Source: SICEX Colombia and Company s estimates 9
Local players Colombian market Local Supplier Forest plantations Actual MDP unit New MDF unit (2012) Furniture unit Barranquilla Cartagena Local Supplier Forest plantations Plywood and MDP unit Flooring plant Yarumal Bucaramanga Pacific Import : Chile: ARAUCO and MASISA Barbosa Medellín Manizales Guarne Bogotá Import entrance via Buenaventura port (Pacific) Land import: Ecuador: ACOSA, NOVPAN Importance entrance via Ipiales Buenaventura Ipiales Cali 10
Consumo (m³ / 1000 hab) COMPARATIVE SALES VOLUMES (in 000 m³) Colombian market COLOMBIA BRAZIL 300 250 200 3.500 3.000 2.500 2.000 150 1.500 100 1.000 50 500-2005 2006 2007 2008 2009 2010 2011 MDF MDP COMPARATIVE CONSUMPTION OF PANELS / CAPITA - MDF MDP 80 70 PB MDF 60 50 40 30 20 10 - Brasil 2011 Colombia 2011 Alemania Germany 2009 España Spain 2009 Argentina 2009 11
12 Overview Colombian market Financial highlights Deal structure
Financial highlights* Net Revenue (R$ mn) 105,6 EBITDA (R$ mn) 70,0 80,7 17,1 20,2 23,8 24,4 26,8 30,3 6,4 5,6 7,8 2009 2010 2011 1Q11 1T11 4T11 1Q12 1T12 2009 2010 2011 1Q11 1T11 4T11 1Q12 1T12 Gross Ebitda Margin (%) 31,6% 34,3% 31,2% 34,2% 30,8% 33,6% Margin (%) 24,4% 25,0% 22,6% 26,1% 20,8% 25,7% Net Income (R$ mn) Equity (R$ mn) 5,2 6,2 4,9 173,7 141,3 147,1 145,3 173,7 181,4 2,0 2,0 13 0,2 2009 2010 2011 1Q11 1T11 4T11 1T12 1Q12 ROE (%) 3,7% 4,3% 3,0% 5,6% 0,4% 4,3% 2009 2010 2011 1Q11 1T11 4T11 1T12 1Q12 * Original data in Colombian pesos at the exchange end of each period. Source: Bloomberg
14 Overview Colombian market Financial highlights Deal structure
Structure of the operation 1. Subscription Agreement 2. Shareholder s Assembly, on May 25, 2012, to vote the 1 st stock emission (25%) at COP 12,00 / share, and the waiving of subscription rights of current shareholders 3. Takeover bid (OPA) of between 10% and 12% of the new capital stock 4. Option of a new stock emission, in 24 months, up to 15% of the new capital (after 1 st emission) at the fixed price of COP12,00 adjusted: (+) 6.25% annually (-) dividends 15
Structure of the operation Steps DEAL STRUCTURE Tablemac s Capital Duratex Participation Indicative value of investment (in 1.000 shares) ( in 1.000 shares) % (in US$ shares) Capital stock 25.398.319 1 2 1 st stock emission (25%) 33.864.426 8.466.107 25,0% US$ 56,0 Takeover bid (OPA) between 10% and 12% 4.063.731 12,0% US$ 27,0 Subtotal 33.864.426 12.529.838 37,0% US$ 83,0 3 2 nd stock emission (15%) 5.976.075 5.976.075 US$ 45,0 39.840.504 18.505.913 46,4% US$128,0 16
Why invest in Colombia Economic growth (stability, credit, income, social mobility) Legal and Political Stability with government of Uribe and Santos Growth in construction sector (deficit of over 2 million homes) Lower cost of capital / Country s investment grade Potential replacement of plywood and MDF imports Only two local players Low per capita consumption of wood panels COLOMBIA Consumption per capita m³/ 1.000 people 7,4 6,8 6,5 8,2 8,7 1 2 CAGR: 43,41% 2005 2006 2007 2008 2009 2010 2011 17 BRAZIL Consumption per capita m³/ 1.000 people 32 32 25 26 26 23 19 20 5 6 7 9 9 11 13 14 14 16 CAGR: 8,15% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
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