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

September 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, Citibank, 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, JP Morgan, Merrill Lynch, Morgan Stanley, Nau 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, Securities, Safra, Santander; 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)

Wood Panels Sanitary Wares Water closets Yarumal Hydra Forests Barbosa Ceramic tiles Metals Metal Fittings Colombia Manizales Brazil Our manufacturing and forestry facilities 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 finish. heavy-duty furniture 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 5 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% • Botucatu (SP): Operation suspended • Uberaba (MG): MDF • Strategy of the Division Taquari (RS): MDP Capacity Utilization – 66% • Dedicated Factories • Cost efficiency • Differentiation Sales Segmentation Cost Segmentation 4% 18% 31% Resina Resin Industria Furniture industry 44% Papel Paper Varejo Retail 13% Madeira Wood 52% Construção Civil Energia Construction Energy Mão-de-Obra Labor 14% 16% Outros Others 8%

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

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: 76% • Asset Light • Metal Fittings: 71% • Pricing • Deca: 71% Sales Segmentation Cost Segmentation 5% 14% 8% Metais Metals 37% Revenda/Homecenter Retail/Homecenter Mao de Obra Labor 20% Construtoras Construction Energia Electric Energy Atacado Wholesale Combustíveis Fuels 66% 42% Others Outros Outros Other materials 4% 3%

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 2 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 • • Ceusa: 99% Mono-caliber • Increased capacity (New line) • Dry joint fitting • Synergies Cecrisa + Ceusa Sales Segmentation Cost Segmentation 6% 17% 9% Retail Varejo Other materials Outros Materiais 6% 13% Homecenter Mao de Obra Labor Homecenter 48% ElectrIc Energy Energia Construction Construção Civil Fuels Combustíveis Others Outros 72% 29% * Consider CEUSA expansion

Results

BRL million Consolidated Results • Domestic economic • EBITDA margin • Net profit boosted by the positive recovery weaker than impacted by the drop in variance in the biological assets forecast, impacting market volumes and and improvement in the financial volumes; increase in costs; results; Rec. EBITDA and EBITDA Margin Net profit rec. Net Income and Gross Margin 31% 10.000 32% 1.000 25% 20% 9.000 300 31% 900 19% 19% 18% 17% 8.000 29% 16% 30% 800 20% 7.000 28% 700 29% 27% 6.000 200 600 15% 27% 28% 151 26% 5.000 500 27% 4.000 400 10% 237 26% 220 210 213 69 3.000 62 182 179 300 100 1.277 1.263 1.145 1.110 1.073 1.006 25% 2.000 31 27 200 5% 19 24% 1.000 100 - 23% - 0% - 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19