December 2019 Duratex: who we are Biggest producer 68 years of - PowerPoint PPT Presentation

December 2019

Duratex: who we are Biggest producer 68 years of history 12 thousand of wood panels in employees Brazil 7 forestry units 16 manufacturing 3 manufacturing facilities in Brazil facilities in Colombia Leader in the One of the market leaders in the market for producing country’s floor and wall coverings bathroom fittings segment Our brands

Corporate Governance • Dividend policy requiring minimum distribution of 30% of adjusted net earnings Shareholder structure • Senior Board comprising 9 members, including 3 independents; 40% 40% • Senior board members may not hold an executive position within the company; • 6 executive committees; 20% • Risk Management, Compliance, Audit and Itaúsa Ligna Free Float Ombudsman Departments; . Itaúsa centralizes strategic and financial • Grupo Ligna reunites the investments of Helio Brokers who cover the Company: Bradesco BBI, BTG decisions of a group of companies. Itaúsa Seibel and Salo Davi Seibel. Both are Pactual, Citybank, Goldman Sachs, Empiricus Research, operates in financial and industrial areas entrepreneurs with over 40 years of and also administers large business experience in different sectors of the HSBC, Merrill Lynch, Morgan Stanley, Nau Securities; institutions. Itausa is controlled by Itaú economy. Currently, Grupo Ligna invests in the Unibanco S.A and is Brazil’s largest private retailing, industry, power generation, bank in terms of assets under management property, agriculture and financial sectors. Net and market capitalization – Assets: R$1.0bn (Dec17) Market Cap: R$101.6bn (Dec18)

Executive Team CEO Antonio Joaquim de Oliveira Deca Division Ceramic Tiles CFO Human IT, Strategy and Wood Division Vice President Division Dir. Carlos Henrique Resources Dir. Innovation Dir. Vice President Marcelo Izzo Gilmar Menegon Haddad Glizia Prado Daniel Franco Henrique Marc. Operations Dir. Deca Deca José Ricardo Commercial Dir. Industrial Dir. Ferraz Cleonyr Xavier Marco Milleo

Wood Panels Sanitary Wares Water closets Yarumal Hydra Forests Barbosa Ceramic tiles Metals Metal Fittings Colombia Manizales Brazil Our manufacturing and forestry facilities Agudos (SP) Itapetininga (SP) Urussanga (SC) Criciúma (SC)

WOOD DIVISION

Our portfolio MDP Madefibra BP Uncoated MDP, with Heavy-duty, coated MDF applications in the Standard and Textured. furniture and civil construction sectors . MDF High Gloss BP Coated MDF, with Uncoated MDF, with different degrees of gloss applications in the heavy-duty furniture finish. sector. Madeplac Durafloor BP Laminated wooden floor coverings and vinyl floor coverings made from Coated MDP. 100% recyclable PVC. Standard and Textured.

The Panels Market Main companies Final Destination 16% 24% Duratex 32% Arauco Mercado Doméstico Domestic Market Berneck 8% Mercado Internacional International Market Fibraplac Outros Others 16% 20% 84% *Capacity Share Current Market Utilization Main Indicators for the Sector: • Brazilian GDP • GDP – Civil Construction 20% • Consumer Confidence Ocioso Idle Utilizado Utilized Main Association: 80% • IBÁ (Brazilian Tree Institute) * IBÁ data and Duratex estimates 1 2Q19

Our operation 4 Manufacturing units Capacity Share Product/Volume Mix • • UNCOATED: 60% Agudos (SP): MDF and Durafloor • MDP: 39% • • COATED: 40% Itapetininga(SP): MDP and MDF • MDF: 28% • Uberaba (MG): MDF • Taquari (RS): MDP Strategy of the Division Capacity Utilization – 69% • Dedicated Factories • Cost efficiency • Differentiation Sales Segmentation Cost Segmentation Other materials 2% Resale 7% 1% Resin 30 9% 28% Wood Fixed Cost % Furniture 42% Paper 10% Insustry 56% Labor Civil Variable Cost Depreciation and 13% Construction/Ot 70 amortization 17% her Eletricity % 15% Fuel

DECA DIVISION

Our Portfolio Valves Sink Used in operating Applications in flushing mechanisms commercial and residential kitchens and bathrooms (Inox Sink) Sanitary Wares Metals Applications in commercial and Wide variety of taps for residential bathrooms kitchens and bathrooms Showers Wide variety of electric and gas powered showers

The Construction Market Market Share Sanitary Wares Market Share Metal Fittings 30% 40% Deca Deca 40% 40% Deca Roca Roca Docol Outros Others Outros Others 30% 20% * ASFAMAS data and Duratex estimates Market Share Showers 15% Main indicators for the Main Associations sector: • Lorenzetti ABRAMAT (Brazilian • Brazilian GDP Association of Deca/Hydra 20% • Construction Materials) GDP – Civil Construction Outros Others • • ASFAMAS (Brazilian Consumer Confidence 65% Association of Sanitary- • New constructions Ware Manufacturers)

Our operation Sanitary Wares Metal Fittings Electric Showers 4 Manufacturing Facilities 3 Manufacturing Facilities 1 Manufacturing Facility • • Jundiaí (SP) São Paulo (SP) • Aracaju (SE) • • Queimados (RJ) Jacareí (SP) • • João Pessoa (PB) Jundiaí (SP) • Cabo de Santo Agostinho (PE) Capacity Utilization Strategy of the Division • Operational efficiency • Sanitary Wares: 74% • Asset Light • Metal Fittings: 79% • Pricing Sales Segmentation Cost Segmentation Other materials 3% 8% 4% 10% 3% Metals 32% 36% Fixed Cost Resale/Home Center Labor Civil Construction 20% Eletricity Wholesale Others 35% Variable Cost Depreciation and 66% 68% amortization Fuel 15%

CERAMIC TILES DIVISION

Our Portfolio Polished porcelain tiles Applications in drier environments such as living rooms, corridors and bedrooms Tiles Wide range of applications for wet or dry environments Special finishings Wide range of applications with exclusive designs using 3D technology.

The Ceramic Tiles Market Production Split Market share (% Revenue) 9% 7% 28% Portobello 7% Ceusa/Portinari Via Seca Dry Process Eliane 4% Via Úmida Wet Process Roca/Incepa 3% Elizabeth 72% 70% Outros Others Current Market Utilization Main indicators for the Main associations sector: 25% • • Brazilian GDP ANFACER (National Association for Ceramic Idle Ocioso • GDP – Civil Construction Tile Manufacturers) • Utilizado Utilized Retail - Civil Construction • Volume of ceramics 75% • Volume of cement • Volume of steel * ANFACER data and 2Q19 1 Duratex estimates

Our operation 4 Manufacturing Facilities Capacity Share Production Capacity • • 31 million m²/year* • Urussanga/SC 3% • Criciúma/SC Product differentials Capacity Utilization Strategy of the Division • Monotone • Focus on high-end products • • Ceramic Tiles: 96% Mono-caliber • Increased capacity (New line) • Dry joint fitting • Synergies Cecrisa + Ceusa Sales Segmentation Cost Segmentation Raw material 7% 8% 5% Labor 31% 6% Resale 22% Fixed Cost Eletricity 43% Home center 54% Depreciation and Engineering amortization 69% 29% Others Variable Cost 16% Fuel * Consider CEUSA expansion

Results

BRL million Consolidated Results • Improvement in the economic • EBITDA with significant • Strong cash generation: scenario with greater confidence improvement in the period, improvement in working and consumption , boosting 4Q19 mainly due to consolidation capital, EBITDA and results of Cecrisa and the evolution management of CAPEX of Deca`s results Rec. EBITDA and EBITDA Margin Net profit rec. Net Income and Gross Margin 31% 29% 10000,0 32% 2000,0 30% 24% 28% 26% 26% 1900,0 9000,0 30% 600,0 1800,0 26% 21% 1700,0 25% 8000,0 28% 17% 1600,0 19% 19% 500,0 18% 1500,0 7000,0 26% 1400,0 359,0 20% 4.949,4 5.011,7 1300,0 6000,0 24% 952,1 400,0 1200,0 909,9 848,5 3.984,5 3.963,2 3.909,8 3.990,9 836,7 275,0 1100,0 271,2 5000,0 22% 760,0 1000,0 15% 681,0 221,9 300,0 900,0 4000,0 20% 180,7 800,0 700,0 10% 3000,0 18% 600,0 200,0 500,0 2000,0 16% (13) 400,0 5% 300,0 100,0 1000,0 14% 200,0 100,0 - 12% - 0% - 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019