SAN PEDRO GARZA GARCIA, Nuevo Leon, Mexico, July 25 /PRNewswire-FirstCall/ -- Vitro S.A. de C.V. (BMV: VITROA; NYSE: VTO) one of the world's largest producers and distributors of glass products, today announced 2Q'06 unaudited results. Year over year consolidated sales increased 5.7 percent and EBITDA rose 17.8 percent. Consolidated EBITDA margins were up 160 basis points to 16.3 percent for the quarter. Excluding divestitures of Plasticos Bosco (Bosco) in April 2005, Quimica M in March 2006 and the acquisition of Vidrios Panamenos (VIPASA) in April 2006, consolidated sales rose 5.8 percent and consolidated EBITDA increased 19.4 percent during the same period.
FINANCIAL HIGHLIGHTS*
2Q'06 2Q'05 % Change
Consolidated Net Sales 603 571 5.7%
Flat Glass 286 285 0.5%
Glass Containers 307 277 11.1%
Cost of Sales 437 417 4.8%
Gross Income 167 154 7.9%
Gross Margins 27.6% 27.0% 0.6 pp
SG&A 116 116 -0.7%
SG&A % of sales 19.1% 20.4% -1.3 pp
EBIT 51 38 34.3%
EBIT Margins 8.5% 6.7% 1.8 pp
EBITDA 99 84 17.8%
Flat Glass 21 23 -9.0%
Glass Containers 77 60 28.5%
EBITDA Margins 16.3% 14.7% 1.6 pp
Net Income 7 37 -
Net Income Margins 1.2% 6.4% -523 bps
Total Debt 1,297 1,395 -7.0%
Short Term Debt 580 389 49.2%
Long Term Debt 717 1,006 -28.7%
Average life of debt 3.4 4.1
Cash & Cash Equivalents(1) 148 175 -15.4%
* Million US$ Nominal
(1) Cash & Cash Equivalents include restricted cash which corresponded to
cash collateralizing debt and derivatives instruments accounted for in
other current and other long-term assets.
Alvaro Rodriguez, Chief Financial Officer, commented: "This was again a very good quarter, with a solid performance in both business units. As a matter of fact, on a comparable basis, the EBITDA obtained this quarter is the highest since 2Q'01, which reflects the positive trend that we've been talking about since 2003."
Mr. Rodriguez continued, "Glass Containers continued to report outstanding results with sales up 11% and EBITDA up 29%. It's important to note that the strength in this business is widespread. It reflects strong demand in both international and domestic operations covering all major market segments and the fact that we continue to open new markets."
"At Flat Glass, trends remain positive, with strong growth in the domestic construction and auto OEM markets, as well as at our foreign subsidiaries. As anticipated, exports declined as we refocus on domestic markets. In fact, on a comparable basis, excluding Quimica M, sales rose 3 percent and EBITDA without inventory reduction effect grew 64 percent for the quarter and 46 percent for the first half of the year. This is a sign of the new trend for the Flat Glass business unit."
"Progress was also made in our cost cutting efforts, and this quarter SG&A fell to 19.1 percent of sales from 20.4 percent in the second quarter of 2005."
"We are also moving ahead with our strategy of reducing holding company debt. Year over year, we reduced gross debt at the holding company level by US$144 million and consolidated gross debt by US$98 million to US$1.297 billion which, on a comparable basis, is the lowest debt level since 4Q'02. In addition, consolidated net debt declined by US$71 million. We continued to make progress with the sale of ancillary real estate, with an additional US$13 million received in July. Proceeds from the sale of real estate and the recent divestiture of Crisa will fund our 2006 amortizations."
All figures provided in this announcement are in accordance with Generally Accepted Accounting Principles in Mexico, except otherwise indicated. Dollar figures are in nominal US dollars and are obtained by dividing nominal pesos for each month by the end of month fix exchange rate published by Banco de Mexico. In the case of the Balance Sheet, US dollar translations are made at the fix exchange rate as of the end of the period. Certain amounts may not sum due to rounding. All figures and comparisons are in USD terms, unless otherwise stated, and may differ from the peso amounts due to the difference between inflation and exchange rates.
Jun-05 Jun-06
Inflation in Mexico
Quarter 0.0% -0.1%
LTM 4.3% 3.3%
Inflation in USA
Quarter 1.4% 1.9%
LTM 2.8% 4.2%
Exchange Rate
Closing 10.7752 11.2723
Devaluation
Quarter -3.6% 3.5%
LTM -6.5% 4.6%
This announcement contains historical information, certain management's expectations and other forward-looking information regarding Vitro, S.A. de C.V. and its Subsidiaries (collectively the "Company"). While the Company believes that these management's expectations and forward looking statements are based on reasonable assumptions, all such statements reflect the current views of the Company with respect to future events and are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated in this report. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic, political, governmental and business conditions worldwide and in such markets in which the Company does business, changes in interest rates, changes in inflation rates, changes in exchange rates, the growth or reduction of the markets and segments where the Company sells its products, changes in raw material prices, changes in energy prices, particularly gas, changes in the business strategy, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. The Company does not assume any obligation, to and will not update these forward-looking statements. The assumptions, risks and uncertainties relating to the forward- looking statements in this report include those described in the Company's annual report in form 20-F file with the U.S. Securities and Exchange Commission, and in the Company's other filings with the Mexican Comision Nacional Bancaria y de Valores.
Vitro, S.A. de C.V. (NYSE: VTO; BMV: VITROA), through its subsidiary companies, is one of the world's leading glass producers. Vitro is a major participant in two principal businesses: flat glass and glass containers. Its subsidiaries serve multiple product markets, including construction and automotive glass; food and beverage, wine, liquor, cosmetics and pharmaceutical glass containers. Vitro also produces raw materials and equipment and capital goods for industrial use, which are vertically integrated in the Glass Containers business unit. Founded in 1909 in Monterrey, Mexico-based Vitro has joint ventures with major world-class partners and industry leaders that provide its subsidiaries with access to international markets, distribution channels and state-of-the-art technology. Vitro's subsidiaries have facilities and distribution centers in eight countries, located in North, Central and South America, and Europe, and export to more than 45 countries worldwide. For further information, please visit our website at: http://www.vitro.com/
Second Quarter 2006 results
Conference Call and Web cast
Wednesday, July 26, 2006
9:30 AM U.S. EDT - 8:30 A.M. U.S. CDT (Monterrey time)
A live web cast of the conference call will be available to investors and the media at http://www.vitro.com/ through the end of the day on August 29, 2006. For inquiries regarding the conference call, please contact Michael Fehle of Breakstone Group via telephone at (646) 452-2337, or via email at
DETAILED FINANCIAL INFORMATION FOLLOWS:
Consolidated Results
Sales 3
EBIT and EBITDA 4
Consolidated Financing Cost 4
Taxes 5
Consolidated Net Income 5
Capital Expenditures 6
Consolidated Financial Position 6
Cash Flow 8
Key Developments 9
Flat Glass 10
Glass Containers 11
Consolidated Financial Statements 13
Segmented Information 14
VENA's Consolidated Financial Statements 14
Consolidated Results
2Q06 Highlights
US$ Million
SALES EBITDA
2Q06 2Q05 YoY 2Q06 2Q05 YoY
$ $ Change $ $ Change
% % % %
FLAT GLASS 47 286 285 0.5 21 21 23 -9.0
CONTAINERS 51 307 277 11.1 78 77 60 28.5
HOLDING(1,2) 2 9 9 2.2 2 2 2 -0.8
TOTAL 100 603 571 5.7 100 99 84 17.8
TOTAL DEBT INTER COMPANY DEBT
YoY
2Q06 2Q05 Change 2Q06 2Q05
$ $ % $ $
FLAT GLASS 411 397 3.3 226 142
CONTAINERS 589 483 21.9 -22 -11
HOLDING(1,2) 298 514 -42.1 -205 -132
TOTAL 1297 1395 -7.0
DEBT WITH THIRD CASH & CASH
PARTIES EQUIVALENTS(3)
YoY YoY
2Q06 2Q05 Change 2Q06 2Q05 Change
$ $ % $ $ %
FLAT GLASS 184 255 -27.8 47 53 -10.8
CONTAINERS 611 494 23.7 81 43 89.2
HOLDING(1,2) 502 646 -22.2 20 80 -74.5
TOTAL 1297 1395 -7.0 148 175 -15.4
(1) Sales for the Holding Co. represent only third party revenues.
(2) Holding includes all corporate companies
(3) Cash & Cash Equivalents include restricted cash which corresponded to
cash collateralizing debt and derivatives instruments accounted for in
other current and other long-term assets.
Sales
Consolidated net sales for 2Q'06 increased 5.7 percent YoY to US$603 million and 8.8 percent to US$2,312 million for LTM 2006. Flat Glass and Glass Containers sales for the quarter rose 0.5 percent and 11.1 percent YoY respectively.
During the quarter domestic and foreign subsidiaries' sales grew 7.4 percent and 9.9 percent YoY, respectively. Export sales decreased 1.9 percent during the same period.
On a comparable basis, excluding divestitures of Plasticos Bosco (Bosco) in April 2005, Quimica M in March 2006 and the acquisition of Vidrios Panamenos (VIPASA) in April 2006, consolidated net sales for the quarter rose 5.8 percent YoY.
Table 1: Total Sales
Table 1
Sales
(Million)
YoY% YoY%
2Q'06 2Q'05 Change 6M'06 6M'05 Change
Constant Pesos
Total Consolidated Sales 6,804 6,572 3.5 13,104 12,457 5.2
Flat Glass 3,234 3,303 (2.1) 6,547 6,415 2.1
Glass Containers 3,463 3,166 9.4 6,370 5,746 10.9
Domestic Sales 2,834 2,638 7.4 5,374 4,943 8.7
Export Sales 1,705 1,769 (3.7) 3,250 3,386 (4.0)
Foreign Subsidiaries 2,265 2,166 4.6 4,480 4,128 8.5
Nominal Dollars
Total Consolidated Sales 603 571 5.7 1,172 1,072 9.3
Flat Glass 286 285 0.5 581 549 5.8
Glass Containers 307 277 11.1 573 497 15.4
Domestic Sales 252 235 7.4 491 433 13.2
Export Sales 151 154 (1.9) 291 292 (0.2)
Foreign Subsidiaries 200 182 9.9 390 347 12.3
% Foreign Currency Sales* /
Total Sales 58% 59% -0.7 pp 58.0% 59.6% -1.6 pp
% Export Sales / Total Sales 25% 27% -1.9 pp 24.8% 27.2% -2.4 pp
LTM YoY%
2006 2005 Change
Constant Pesos
Total Consolidated Sales 25,969 25,094 3.5
Flat Glass 13,164 12,983 1.4
Glass Containers 12,425 11,400 9.0
Domestic Sales 10,621 10,334 2.8
Export Sales 6,571 6,626 (0.8)
Foreign Subsidiaries 8,768 8,135 7.8
Nominal Dollars
Total Consolidated Sales 2,312 2,125 8.8
Flat Glass 1,162 1,097 6.0
Glass Containers 1,116 968 15.3
Domestic Sales 973 883 10.2
Export Sales 587 562 4.6
Foreign Subsidiaries 751 680 10.5
% Foreign Currency Sales* / Total
Sales 58% 58% -0.5 pp
% Export Sales / Total Sales 25% 26% -1 pp
* Exports + Foreign Subsidiaries
EBIT and EBITDA
Consolidated EBIT for the quarter increased 34.3 percent YoY to US$51 million from US$38 million last year. EBIT margin increased 1.8 percentage points to 8.5 percent. For LTM 2006, EBIT margin increased 1.7 percentage points to 7.4 percent.
EBIT for the quarter at Glass Containers increased by 42.3 percent YoY, while at Flat Glass EBIT decreased 12.2 percent. On a comparable basis, Flat Glass EBIT, excluding Quimica M, rose 5.5 percent YoY while Glass Containers EBIT, excluding VIPASA, increased 41.6 percent YoY.
Consolidated EBITDA for the quarter increased 17.8 percent to US$99 million from US$84 million in 2Q'05. The EBITDA margin increased 1.6 percentage points YoY to 16.3 percent. For LTM 2006, consolidated EBITDA increased 13.1 percent to US$358 million from US$317 million in LTM 2005. On a comparable basis, excluding Bosco , Quimica M and VIPASA, consolidated EBITDA for the quarter increased 19.4 percent YoY.
During the quarter, EBITDA decreased 9.0 percent YoY at Flat Glass. EBITDA at Glass Containers rose 28.5 percent. On a comparable basis, excluding Quimica M, EBITDA for Flat Glass during the quarter decreased 1.1 percent YoY while EBITDA for Glass Containers, excluding VIPASA, increased 27.1 percent YoY. Glass Containers was the major EBITDA contributor for the quarter.
Table 2: EBIT and EBITDA
Table 2
EBIT and EBITDA
(Million)
YoY% YoY%
2Q'06 2Q'05 Change 6M'06 6M'05 Change
Constant Pesos
Consolidated EBIT 576 436 32.1 879 689 27.5
Margin 8.5% 6.6% 1.9 pp 6.7% 5.5% 1.2 pp
Flat Glass 74 87 (15.6) 132 136 (3.4)
Glass Containers 516 366 40.9 781 570 37.0
Consolidated EBITDA 1,110 954 16.4 1,913 1,736 10.2
Margin 16.3% 14.5% 1.8 pp 14.6% 13.9% 0.7 pp
Flat Glass 233 261 (10.9) 465 494 (5.9)
Glass Containers 860 675 27.4 1,419 1,186 19.7
Nominal Dollars
Consolidated EBIT 51 38 34.3 78 60 31.0
Margin 8.5% 6.7% 1.8 pp 6.7% 5.6% 1.1 pp
Flat Glass 6 7 (12.2) 11 11 (3.6)
Glass Containers 46 32 42.3 70 50 41.1
Consolidated EBITDA 99 84 17.8 172 151 14.3
Margin 16.3% 14.7% 1.6 pp 14.7% 14.1% 0.6 pp
Flat Glass 21 23 (9.0) 41 42 (2.7)
Glass Containers 77 60 28.5 128 103 24.1
LTM YoY%
2006 2005 Change
Constant Pesos
Consolidated EBIT 1,927 1,427 35.0
Margin 7.4% 5.7% 1.7 pp
Flat Glass 478 612 (21.9)
Glass Containers 1,467 966 51.9
Consolidated EBITDA 3,974 3,723 6.8
Margin 15.3% 14.8% 0.5 pp
Flat Glass 1,136 1,364 (16.7)
Glass Containers 2,720 2,344 16.1
Nominal Dollars
Consolidated EBIT 172 121 41.8
Margin 7.4% 5.7% 1.7 pp
Flat Glass 41 51 (20.0)
Glass Containers 132 82 60.1
Consolidated EBITDA 358 317 13.1
Margin 15.5% 14.9% 0.6 pp
Flat Glass 101 115 (12.6)
Glass Containers 246 200 23.2
Consolidated Financing Cost
Consolidated financing costs for the quarter increased to US$79 million compared with US$11 million during 2Q'05. This was primarily driven by a non-cash foreign exchange loss of US$27 million compared to a non-cash foreign exchange gain of US$30 million in 2Q'05. During 2Q'06 the Mexican Peso depreciated by 3.5 percent compared with a 3.6 percent appreciation in 2Q'05. In addition, an increase in other financial expenses driven mainly by the negative value in derivative transactions more than offset a slight reduction in interest expense.
Table 3: Total Financing Cost
Table 3
Total Financing Cost
(Million)
YoY% YoY%
2Q'06 2Q'05 Change 6M'06 6M'05 Change
Constant Pesos
Interest Expense 437 452 (3.5) 876 962 (8.9)
Interest Income (24) (33) (26.8) (52) (97) (46.4)
Other Financial Expenses (Gain)* 186 100 85.2 471 257 83.7
Foreign Exchange Loss (Gain) 305 (334) -- 512 (307) --
Monetary Position (Gain) (12) (64) (80.7) (117) (145) (19.2)
Total Financing Cost (Gain) 892 123 626.4 1,691 670 152.4
Nominal Dollars
Interest Expense 39 40 (2.6) 80 84 (4.5)
Interest Income (2) (3) (24.6) (5) (8) (43.9)
Other Financial Expenses (Gain)* 17 9 88.2 44 22 96.5
Foreign Exchange Loss (Gain) 27 (30) -- 46 (28) --
Monetary Position (Gain) (1) (6) (79.5) (11) (13) (11.8)
Total Financing Cost (Gain) 79 11 643.2 154 58 167.0
LTM YoY%
2006 2005 Change
Constant Pesos
Interest Expense 1,781 1,838 (3.1)
Interest Income (117) (180) (35.2)
Other Financial Expenses (Gain)* 730 535 36.5
Foreign Exchange Loss (Gain) 429 (666) --
Monetary Position (Gain) (397) (570) (30.3)
Total Financing Cost (Gain) 2,427 957 153.6
Nominal Dollars
Interest Expense 163 157 3.8
Interest Income (11) (15) (30.5)
Other Financial Expenses (Gain)* 68 46 48.3
Foreign Exchange Loss (Gain) 38 (58) --
Monetary Position (Gain) (37) (48) (23.5)
Total Financing Cost (Gain) 220 81 171.7
* Includes effect of bulletin C-10 (derivative transactions) and interest
related to factoring transactions
Taxes
Total Taxes and PSW (Profit Sharing to Workers) decreased from an income of US$40 million in 2Q'05 to an income of US$5 million for this quarter. This decrease was due to the recognition of the tax basis of certain assets of some foreign subsidiaries subject to be repatriated during 2Q'05. Additionally, during 2Q'06 a Tax net operating loss generated by the sale of Vitrocrisa's shares which implied an increase in deferred income tax.
Table 4: Taxes and Profit Sharing to Workers
Table 4
Taxes and Profit Sharing to Workers
(Million)
YoY% YoY%
2Q'06 2Q'05 Change 6M'06 6M'05 Change
Constant Pesos
Accrued Income Tax 95 (65) -- 133 45 194.9
Deferred Income Tax (gain) (168) (384) (56.2) (15) (603) (97.6)
Total Income Tax (73) (449) (83.7) 118 (558) --
Profit Sharing to Workers 15 5 206.7 22 43 (49.4)
Total Taxes and PSW (58) (444) (86.9) 140 (515) --
Nominal Dollars
Accrued Income Tax 8 (6) -- 12 3 235.6
Deferred Income Tax (gain) (15) (34) (56.5) (1) (53) (98.5)
Total Income Tax (7) (40) (83.7) 11 (50) --
Profit Sharing to Workers 1 0 214.9 2 4 (46.8)
Total Taxes and PSW (5) (40) (86.9) 13 (46) --
LTM YoY%
2006 2005 Change
Constant Pesos
Accrued Income Tax 199 (41) --
Deferred Income Tax (gain) (4) (561) (99.2)
Total Income Tax 195 (602) --
Profit Sharing to Workers 26 104 (74.8)
Total Taxes and PSW 221 (498) --
Nominal Dollars
Accrued Income Tax 17 (4) --
Deferred Income Tax (gain) 0 (50) --
Total Income Tax 18 (54) --
Profit Sharing to Workers 2 9 (73.1)
Total Taxes and PSW 20 (45) --
Consolidated Net Income
During the quarter, the Company recorded a consolidated net income of US$7 million compared to US$37 million during the same quarter last year. This variation is mainly a result of an increase in financing costs due to a non-cash foreign exchange loss compared with an non-cash foreign exchange gain in 2Q'05. In addition, the company recorded a tax income of US$5 million during the quarter compared to US$40 million in 2Q'05. The above mentioned factors more than offset higher EBIT and income from Discontinued Operations of US$38 million associated with the sale of Vitrocrisa's share.
Capital Expenditures (CAPEX)
Capital expenditures for the quarter totaled US$29 million, compared with US$23 million in 2Q'05. Flat Glass accounted for 39 percent and was mainly invested in concluding the VF1 furnace repair and for maintenance purposes. Glass Containers represented 60 percent of total Capex consumption and included investment in a major furnace repair, inspection equipment and maintenance.
Consolidated Financial Position
Consolidated gross debt as of June 30 2006 totaled US$1,297 million, a QoQ decrease of US$57 million.
Net debt, which is calculated by deducting cash and cash equivalents as well as restricted cash accounted for in other current assets, decreased QoQ by US$73 million to US$1,149. On a YoY comparison, net debt decreased US$71 million.
As of 2Q'06, the Company had a cash balance of US$148 million, of which US$118 million was recorded as cash and cash equivalents and US$30 million was classified as other current assets. The US$30 million is restricted cash, which corresponds to cash collateralizing debt and derivatives instruments - US$25 million were recorded at Flat Glass and US$5 million at the holding company.
Table 5
Debt Indicators
(Million dollars; except as indicated)
2Q'06 1Q'06 4Q'05 3Q'05 2Q'05
Interest Coverage
(EBITDA/ Total Net Financial Exp.)
(Times) LTM 1.7 1.6 1.7 1.7 1.7
Leverage
(Total Debt / EBITDA) (Times) LTM 3.7 4.0 4.0 4.3 4.2
(Total Net Debt / EBITDA) (Times) LTM 3.3 3.6 3.5 3.7 3.7
Total Debt(1) 1,297 1,354 1,383 1,440 1,395
Short-Term Debt(2), (3) 580 460 310 302 389
Long-Term Debt 717 894 1,073 1,138 1,006
Cash and Equivalents(4) 148 132 165 220 175
Total Net Debt 1,149 1,222 1,218 1,220 1,220
Currency Mix (%) dlls&Euros/Pesos /
UDI's 90/7/3 87/7/7 85/8/7 85/8/7 85/9/6
(1) Crisas' debt is not included prior to 2Q'06 as it was considered a
Discontinued Operation
(2) Short term debt includes current maturities of long-term debt.
(3) For accounting purposes, in 2Q'06 we reclassified a portion of our
long-term debt into short-term debt (US$26 million) as we did not
comply with certain financial ratios in a credit facility at one of
our subsidiaries.
(4) Cash & Cash Equivalents include restricted cash which corresponded to
cash collateralizing long term debt and derivatives instruments
accounted for in current and other long term assets.
- The Company's average life of debt as of 2Q'06 was 3.4 years compared
with 4.1 years for 2Q'05.
- Short term debt as of June 30 2006 increased by US$95 million to 43
percent as a percentage of total debt, compared with 34 percent in
1Q'06. These amounts include current maturities of long-term debt.
- As of June 30, 2006 we had an aggregate of US$138 million in off-balance
sheet financing related to our sales of receivables and receivable
securitization programs. Flat Glass recorded US$74 million and Glass
Containers recorded US$64 million.
- 39 percent of total short-term debt maturities are at the Holding Co.
level.
- Revolving and other short-term debt, including trade related debt,
accounted for 25 percent of total short-term debt. This type of debt is
usually renewed within 28 to 180 days.
- Current maturities of long-term debt, including current maturities of
market debt, increased by US$98 million to US$417 million from US$319 as
of March 31, 2006, and as of 2Q'06 represented 75 percent of total short
term debt.
- Approximately 60 percent of debt maturities due in the remainder of 2006
are at the operating subsidiary level.
- Market maturities during 2006 include medium-term notes denominated in
UDI's. Maturities for 2007 include the Senior Notes at the Holding
Company level, Vena's Euro Commercial Paper and Credit Facilities at the
subsidiary level.
- Market maturities from 2008, 2009, 2010 and thereafter, include the
Senior Notes due in 2011 at VENA, the 2010 Secured Term Loan at VENA,
long-term "Certificados Bursatiles", a Private Placement, and the Senior
Notes due in 2013 at the Holding Company level.
Cash Flow
Net free cash flow for the quarter increased to US$22 million compared to US$19 million in 2Q'05. Higher EBITDA and lower Net Interest Expense helped compensate for the higher working capital and capex needs during the quarter and cash taxes paid by our foreign subsidiaries and our Mexican companies which do not consolidate for tax purposes.
On an LTM basis, the Company recorded a free cash flow of US$50 million compared to US$4 million during the same period last year. Higher EBITDA as well as recovery of working capital and lower capex investments, more than compensated for the higher net interest expense and cash taxes paid.
Table 6: Cash Flow Analysis
Table 6
Cash Flow from Operations Analysis(1)
(Million)
YoY% YoY%
2Q'06 2Q'05 Change 6M'06 6M'05 Change
Constant Pesos
EBITDA 1,110 954 16.4 1,913 1,736 10.2
Net Interest Expense(2) (506) (538) (6.0) (979) (1,026) (4.6)
Capex (332) (264) 25.7 (520) (472) 10.1
Working Capital(3) 250 284 (12.0) (132) (61) 118.9
Dividends (117) (137) (14.4) (162) (155) 4.5
Cash Taxes (paid) recovered (176) (90) 96.7 (40) (205) (80.6)
Net Free Cash Flow 228 209 9.5 80 (183) --
Nominal Dollars
EBITDA 99 84 17.8 172 151 14.3
Net Interest Expense(2) (43) (48) (8.8) (96) (89) 7.9
Capex (29) (23) 26.7 (50) (41) 22.1
Working Capital(3) 22 26 - (14) (4) 271.1
Dividends (10) (12) (13.9) (14) (14) 5.7
Cash Taxes (paid) recovered (16) (8) 99.2 (3) (18) (82.7)
Net Free Cash Flow 22 19 17.1 (6) (15) (59.0)
LTM YoY%
2006 2005 Change
Constant Pesos
EBITDA 3,974 3,723 6.8
Net Interest Expense(2) (1,916) (1,807) 6.0
Capex (1,085) (1,332) (18.5)
Working Capital(3) 286 (84) --
Dividends (189) (222) (14.7)
Cash Taxes (paid) recovered (217) (207) 4.7
Net Free Cash Flow 853 71 1,104.8
Nominal Dollars
EBITDA 358 317 13.1
Net Interest Expense(2) (193) (155) 24.7
Capex (102) (114) (10.7)
Working Capital(3) 24 (6) --
Dividends (17) (20) (14.8)
Cash Taxes (paid) recovered (20) (18) 7.1
Net Free Cash Flow 50 4 1,075.4
(1) This statement is a Cash Flow statement and it does not represent a
Statement of Changes in Financial Position according with the Mexican
GAAP
(2) Includes derivative transactions, and other financial expenses and
products.
(3) Includes: Clients, inventories, suppliers, other current assets and
liabilities, IVA (Value Added Tax) and ISCAS taxes (Salary Special
Tax)
Key Developments
Vitro's Subsidiary in Central America Acquires Vidrios Panamenos, S. A.
On April 20, 2006 the Company announced that in a joint effort with its Central American partners and through its subsidiary Empresas Comegua, S.A., commercially known as Grupo Vidriero Centroamericano (VICAL), it has completed the acquisition of the majority of shares of Vidrios Panamenos, S.A. (VIPASA), the leading Panama-based glass containers Company. Through this acquisition, VICAL will own approximately 96 per cent of the VIPASA outstanding shares. Since 1964 Vitro has been a partner of VICAL, Central America's and the Caribbean leading glass containers manufacturing company with production facilities in Guatemala and Costa Rica. The company has some of the most important companies in the region as customers, mainly serving soda bottling companies, beer, as well as liquor, food and pharmaceutical industries. VIPASA is the largest and most important glass containers manufacturer for the beverage, liquor, food and pharmaceutical industries in Panama and exports to more than 15 countries in the American continent. The company's sales in 2005 reached US$23 million.
Vitro Completes Sale of Interest in Vitrocrisa
On June 16, 2006 the Company announced that it has completed the sale of its 51 percent interest in Vitrocrisa Holdings, S de R.L. de C.V. and related companies (Vitrocrisa) to Libbey Inc. (Libbey). Libbey is now the sole owner of this joint venture which was formed in 1997. The total cash inflow of US$119 million is comprised of US$80 million from the equity sale, plus approximately US$28 million of intercompany receivables and US$11 million of intercompany debt. Additional to the US$11 million of intercompany debt, Vitrocrisa's total outstanding bank debt, as of May 31, 2006, stood at US$62 million. With this transaction Vitro retained the pension liability of approximately US$27 million for Crisa employees who had retired as the closing date. In addition, there was a real estate swap with Libbey.
Flat Glass
(50 percent of LTM Consolidated Sales)
Sales
Flat Glass sales for the quarter increased 0.5 percent YoY to US$286 million from US$285 million. On a comparable basis, excluding Quimica M, which was divested in March 2006, sales rose 2.8 percent YoY.
Domestic sales increased 19.8 percent YoY, mainly as a result of higher automotive and construction-related sales. Construction-related volumes increased 35 percent YoY.
Export sales decreased 26.3 percent YoY due to lower Auto Glass Replacement ("AGR") and construction-related sales. AGR export sales reduction was mainly driven by a decrease in volume as we are using that capacity to supply the OEM market. The construction-related sales decreased as we are focusing on the more profitable Mexican market.
Automotive sales increased 4.6 percent YoY driven by larger volumes due to the success of current platforms. These platforms resulted in a 68 percent YoY sales increase at the OEM line and continue to compensate for lower export volumes in the AGR market. Additionally, AGR domestic sales increased 6 percent YoY.
Sales from foreign subsidiaries continued an upward trend, increasing 7.3 percent YoY to US$164 million from US$153 million. Sales at Vitro America, our Flat Glass subsidiary in the US, rose 4 percent YoY, mainly driven by higher volumes in the construction market. Sales at the Spanish subsidiary increased 11 percent YoY driven by incremental monumental contracts coupled with an improved product mix. Sales at Vitro Colombia remained flat YoY compared with the same quarter last year.
EBIT & EBITDA
EBIT decreased 12.2 percent YoY to US$6 million from US$7 million, while EBITDA fell 9.0 percent to US$21 million from US$23 million. During the same period, EBIT and EBITDA margins decrease 0.3 and 0.7 percentage points respectively.
During the quarter, on a comparable basis, excluding Quimica M, Flat Glass EBIT rose 5.5 percent YoY and EBITDA fell 1.1 percent.
On a YoY comparison, as anticipated on previous quarters, EBIT and EBITDA were negatively affected by inventory reduction as a result of the temporary shutdown of the X-3 furnace. Higher volumes in domestic Construction and value added Automotive OEM products helped compensate that effect.
Without the effect in the inventory reduction the EBITDA for the quarter is US$34 million and for the first half of the year is US$56 million. Therefore on a comparable basis, EBITDA grew 64 percent for the quarter and 46 percent for the first half of the year.
Strong EBITDA generation from Vitro America and Vitro Espana which grew YoY 17 and 30 percent, respectively contributed to partially offset the reduction in EBITDA at this Business Unit.
Table 7: Flat Glass
Table 7
Flat Glass
(Million)
YoY% YoY%
2Q'06 2Q'05 Change 6M'06 6M'05 Change
Constant Pesos
Consolidated Net sales 3,234 3,303 (2.1) 6,547 6,415 2.1
Net Sales
Domestic Sales 734 605 21.4 1,511 1,239 22.0
Exports 640 873 (26.7) 1,304 1,698 (23.2)
Foreign Subsidiaries 1,860 1,825 1.9 3,732 3,479 7.3
EBIT 74 87 (15.6) 132 136 (3.4)
EBITDA 233 261 (10.9) 465 494 (5.9)
EBIT Margin 2.3% 2.6% -0.3 pp 2.0% 2.1% -0.1 pp
EBITDA Margin 7.2% 7.9% -0.7 pp 7.1% 7.7% -0.6 pp
Nominal Dollars
Consolidated Net sales 286 285 0.5 581 549 5.8
Domestic Sales 65 54 19.8 138 109 26.4
Export Sales 57 78 (26.3) 120 149 (19.4)
Foreign Subsidiaries 164 153 7.3 324 292 11.0
EBIT 6 7 (12.2) 11 11 (3.6)
EBITDA 21 23 (9.0) 41 42 (2.7)
EBIT Margin 2.2% 2.5% -0.3 pp 1.9% 2.1% -0.2 pp
EBITDA Margin 7.2% 7.9% -0.7 pp 0.0% 7.7% -7.7 pp
Volumes
Flat Glass (Thousands of
m2B)(2) 33,140 33,881 (2.2) 67,320 69,183 (2.7)
Capacity utilization
Flat Glass furnaces(1) 69% 88% -19 pp
Flat Glass auto 85% 84% 1 pp
LTM YoY%
2006 2005 Change
Constant Pesos
Consolidated Net sales 13,164 12,983 1.4
Net Sales
Domestic Sales 2,937 2,818 4.2
Exports 2,941 3,355 (12.3)
Foreign Subsidiaries 7,286 6,810 7.0
EBIT 478 612 (21.9)
EBITDA 1,136 1,364 (16.7)
EBIT Margin 3.6% 4.7% -1.1 pp
EBITDA Margin 8.6% 10.5% -1.9 pp
Nominal Dollars
Consolidated Net sales 1,162 1,097 6.0
Domestic Sales 270 241 12.2
Export Sales 269 287 (6.0)
Foreign Subsidiaries 622 569 9.4
EBIT 41 51 (20.0)
EBITDA 101 115 (12.6)
EBIT Margin 3.5% 4.7% -1.2 pp
EBITDA Margin 8.7% 10.5% -1.8 pp
Volumes
Flat Glass (Thousands of m2B)(2) 139,639 142,712 (2.2)
Capacity utilization
Flat Glass furnaces(1)
Flat Glass auto
(1) Capacity utilization may sometimes be greater than 100 percent because
pulling capacity is calculated based on a certain number of changes in
glass color & thickness, determined by historical averages.
(2) m2B = Reduced Squared Meters
Glass Containers
(48 percent of LTM Consolidated Sales)
Sales
Sales increased by 11.1 percent YoY to US$307 million from US$277 million. On a comparable basis, excluding VIPASA, which was acquired in April 2006, sales increased 8.9 percent YoY.
The main drivers behind the 3.7 percent YoY increase in domestic sales were higher demand from the beer market, increase in volume in the food market and improved price mix in the CFT (Cosmetics, Fragrances & Toiletries) business line. These factors more than offset the decrease in sales YoY at the soft drinks and wine & liquor markets.
Export sales grew 22.9 percent YoY due to a strong rise in volume coupled with an improved product mix at the soft drinks and wine & liquor markets and increased demand at the CFT market in the South American and European markets.
Sales from Glass Container's foreign subsidiaries rose 23.5 percent YoY, reflecting the acquisition of VIPASA.
EBIT and EBITDA
EBIT for the quarter increased 42.3 percent YoY to US$46 million from US$32 million in 2Q'05. EBITDA for the same period rose 28.5 percent to US$77 million from US$60 million.
During the quarter, on a comparable basis, excluding VIPASA, Glass Containers EBIT increased 41.6 percent YoY and EBITDA rose 27.1 percent.
EBITDA during this quarter benefited from higher volumes and improved production efficiencies which optimized fixed cost absorption. These factors more than offset higher freight costs. Additionally, as mentioned in the previous quarter, all furnaces were ignited in 1Q'06 and last year it was done in 2Q'05. This had a positive effect on EBIT and EBITDA in this quarter compared with 2Q'05.
EBITDA from Mexican glass containers operations, which is VENA's core business and represents approximately 82 percent of total EBITDA, rose 27.5 percent YoY.
Table 8: Glass Containers
Table 8
Glass Containers
(Million)
YoY% YoY%
2Q'06 2Q'05 Change 6M'06 6M'05 Change
Constant Pesos
Consolidated Net sales 3,463 3,166 9.4 6,370 5,746 10.9
Net Sales
Domestic Sales 1,994 1,929 3.4 3,677 3,408 7.9
Exports 1,064 896 18.7 1,945 1,689 15.2
Foreign Subsidiaries 405 341 19.0 748 649 15.1
EBIT 516 366 40.9 781 570 37.0
EBITDA 860 675 27.4 1,419 1,186 19.7
EBIT Margin 14.9% 11.6% 3.3pp 12.3% 9.9% 2.4pp
EBITDA Margin 24.8% 21.3% 3.5pp 22.3% 20.6% 1.7pp
Nominal Dollars
Consolidated Net sales 307 277 11.1 573 497 15.4
Domestic Sales 178 171 3.7 336 299 12.5
Export Sales 94 77 22.9 171 143 19.9
Foreign Subsidiaries 36 29 23.5 65 55 19.5
EBIT 46 32 42.3 70 50 41.1
EBITDA 77 60 28.5 128 103 24.1
EBIT Margin 14.9% 11.7% 3.2pp 12.2% 10.0% 2.2pp
EBITDA Margin 24.9% 21.5% 3.4pp 22.4% 20.8% 1.6pp
Glass Containers
Domestic (Millions of Units) 1,239 1,197 3.5 2,344 2,098 11.7
Exports (Millions of Units) 360 320 12.6 665 608 9.4
Total 1,600 1,517 5.4 3,010 2,706 11.2
Capacity utilization (furnaces) 97% 94% 3 pp
Capacity utilization (production
lines) 93% 90% 3 pp
Soda Ash (Thousands Tons) 165 144 14.6 319 291 9.6
LTM YoY%
2006 2005 Change
Constant Pesos
Consolidated Net sales 12,425 11,400 9.0
Net Sales
Domestic Sales 7,312 6,825 7.1
Exports 3,630 3,250 11.7
Foreign Subsidiaries 1,483 1,325 11.9
EBIT 1,467 966 51.9
EBITDA 2,720 2,344 16.1
EBIT Margin 11.8% 8.5% 3.3 pp
EBITDA Margin 21.9% 20.6% 1.3 pp
Nominal Dollars
Consolidated Net sales 1,116 968 15.3
Domestic Sales 669 584 14.6
Export Sales 318 273 16.4
Foreign Subsidiaries 129 111 16.1
EBIT 132 82 60.1
EBITDA 246 200 23.2
EBIT Margin 11.8% 8.5% 3.3 pp
EBITDA Margin 22.1% 20.7% 1.4 pp
Glass Containers
Domestic (Millions of Units) 4,627 4,202 10.1
Exports (Millions of Units) 1,278 1,187 7.7
Total 5,904 5,389 9.6
Capacity utilization (furnaces)
Capacity utilization (production
lines)
Soda Ash (Thousands Tons) - - --
CONSOLIDATED
VITRO, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS, (MILLION)
Second Quarter
INCOME STATEMENT Constant Pesos Nominal Dollars
2006 2005 % Var. 2006 2005 % Var.
Consolidated Net Sales 6,804 6,572 3.5 603 571 5.7
Cost of Sales 4,924 4,795 2.7 437 417 4.8
Gross Income 1,879 1,777 5.7 167 154 7.9
SG&A Expenses 1,304 1,341 (2.8) 116 116 (0.7)
Operating Income 576 436 32.1 51 38 34.3
Interest Expense 437 452 (3.5) 39 40 (2.6)
Interest Income (24) (33) (26.8) (2) (3) (24.6)
Other Financial Expenses
(net) 186 100 85.2 17 9 88.2
Exchange Loss (Gain) 305 (334) -- 27 (30) --
Gain from Monet. Position (12) (64) (80.7) (1) (6) (79.5)
Total Financing Cost 892 123 626.4 79 11 643.2
Other Expenses (Income),
net 89 357 (75.0) 8 32 (75.1)
Inc. (loss) bef. Tax & PSW (405) (44) (825.1) (36) (4) (724.3)
Income Tax and PSW (58) (444) 86.9 (5) (40) 86.9
Net Inc. (loss) Cont.
Opns. (347) 400 -- (31) 36 --
Income (loss)of Discont.
Oper. (28) 10 -- (3) 1 --
Income on disposal of
discontinued operations 458 - -- 41 - --
Extraordinary Items, Net - - -- - - --
Net Income (Loss) 83 410 (79.9) 7 37 (80.7)
Net Income (loss) of Maj.
Int. 141 199 (29.3) 12 18 (30.8)
Net Income (loss) of Min.
Int. (58) 211 -- (5) 19 --
January - June
Constant Pesos Nominal Dollars
2006 2005 % Var. 2006 2005 % Var.
Consolidated Net
Sales 13,104 12,457 5.2 1,172 1,072 9.3
Cost of Sales 9,627 9,125 5.5 862 785 9.7
Gross Income 3,477 3,333 4.3 310 286 8.1
SG&A Expenses 2,599 2,643 (1.7) 232 227 2.1
Operating Income 879 689 27.5 78 60 31.0
Interest Expense 876 962 80 84 (4.5)
Interest Income (52) (97) (46.4) (5) (8) (43.9)
Other Financial
Expenses (net) 471 257 83.7 44 22 96.5
Exchange Loss (Gain) 512 (307) -- 46 (28) --
Gain from Monet.
Position (117) (145) (19.2) (11) (13) (11.8)
Total Financing Cost 1,691 670 152.4 154 58 167.0
Other Expenses
(Income), net 23 391 (94.1) 2 35 (94.3)
Inc. (loss) bef. Tax
& PSW (835) (371) (124.9) (78) (33) (138.3)
Income Tax and PSW 140 (515) -- 13 (46) --
Net Inc. (loss) Cont.
Opns. (975) 144 -- (90) 13 --
Income (loss)of
Discont. Oper. (27) 0 -- (2) (0) --
Income on disposal of
discontinued
operations 458 - -- 41 - --
Extraordinary Items,
Net - - -- - - --
Net Income (Loss) (544) 144 -- (52) 13 --
Net Income (loss) of
Maj. Int. (472) (55) (754.1) (46) (4) (974.4)
Net Income (loss) of
Min. Int. (71) 199 -- (7) 18 --
LTM
Constant Pesos Nominal Dollars
2006 2005 % Var. 2006 2005 % Var.
Consolidated Net Sales 25,969 25,094 3.5 2,312 2,125 8.8
Cost of Sales 18,790 18,282 2.8 1,674 1,548 8.1
Gross Income 7,179 6,812 5.4 638 576 10.7
SG&A Expenses 5,252 5,385 (2.5) 467 455 2.4
Operating Income 1,927 1,427 35.0 172 121 41.8
Interest Expense 1,781 1,838 (3.1) 163 157 3.8
Interest Income (117) (180) (35.2) (11) (15) (30.5)
Other Financial Expenses
(net) 730 535 36.5 68 46 48.3
Exchange Loss (Gain) 429 (666) -- 38 (58) --
Gain from Monet. Position (397) (570) (30.3) (37) (48) (23.5)
Total Financing Cost 2,427 957 153.6 220 81 171.7
Other Expenses (Income),
net 65 818 (92.1) 3 71 (95.2)
Inc. (loss) bef. Tax &
PSW (564) (348) 62.2 (52) (31) (70.6)
Income Tax and PSW 221 (498) -- 20 (45) --
Net Inc. (loss) Cont.
Opns. (785) 150 -- (72) 15 --
Income (loss)of Discont.
Oper. (24) 85 -- (2) 7 --
Income on disposal of
discontinued operations 458 - -- 41 - --
Extraordinary Items, Net (119) - -- (11) - --
Net Income (Loss) (470) 235 -- (44) 22 --
Net Income (loss) of Maj.
Int. (366) (139) 162.5 (35) (11) (218.5)
Net Income (loss) of Min.
Int. (104) 374 -- (10) 33 --
VITRO, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, (Million)
Constant Pesos Nominal Dollars
BALANCE SHEET 2006 2005 % Var. 2006 2005 % Var.
Cash & Cash Equivalents 1,335 1,609 (17.0) 118 142 (16.6)
Trade Receivables 1,558 1,747 (10.9) 138 152 (9.1)
Inventories 3,839 4,093 (6.2) 341 358 (4.7)
Other Current Assets 2,486 2,001 24.2 221 177 24.7
Current Assets from
Disc. Operations - 1,094 -- - 98 --
Total Current Assets 9,218 10,544 (12.6) 818 926 (11.7)
Prop., Plant & Equipment 16,485 17,365 (5.1) 1,462 1,545 (5.3)
Deferred Assets 1,654 1,873 (11.7) 147 162 (9.3)
LT Assets from Disc.
Operations - 1,358 -- - 123 --
Other Long-Term Assets 1,324 1,195 10.8 117 106 11.1
Total Assets 28,680 32,335 (11.3) 2,544 2,862 (11.1)
Short-Term & Curr. Debt 6,541 4,372 49.6 580 389 49.2
Trade Payables 2,006 2,003 0.1 178 176 1.1
Other Current
Liabilities 2,539 2,591 (2.0) 225 229 (1.4)
Current Liabilities from
Disc. Operations - 565 -- - 51 --
Total Curr. Liab. 11,086 9,531 16.3 983 844 16.5
Long-Term Debt 8,082 11,221 (28.0) 717 1,006 (28.7)
Other LT Liabilities 1,710 1,494 14.4 152 132 14.8
LT Liabilities from
Disc. Operations (0) 1,307 -- - 117 --
Total Liabilities 20,877 23,554 (11.4) 1,852 2,100 (11.8)
Majority interest 5,182 5,891 (12.0) 460 492 (6.6)
Minority Interest 2,620 2,890 (9.3) 232 270 (13.8)
Total Shar. Equity 7,802 8,781 (11.1) 692 762 (9.2)
FINANCIAL INDICATORS 2Q'06 2Q'05
Debt/EBITDA (LTM, times) 3.7 4.2
EBITDA/ Total Net Fin. Exp. (LTM, times) 1.7 1.7
Debt / (Debt + Equity) (times) 0.7 0.6
Debt/Equity (times) 1.9 1.8
Total Liab./Stockh. Equity (times) 2.7 2.7
Curr. Assets/Curr. Liab. (times) 0.8 1.1
Sales/Assets (times) - -
EPS (Ps$) * 0.48 0.67
EPADR (US$) * 0.12 0.18
* Based on the weighted average shares outstanding.
OTHER DATA
# Shares Issued (thousands) 324,000 324,000
# Average Shares Outstanding (thousands) 295,728 295,728
# Employees 22,474 21,333
VITRO, S.A. DE C.V. AND SUBSIDIARIES
SEGMENTED INFORMATION
FOR THE PERIODS, (MILLION)
Second Quarter
Constant Pesos Nominal Dollars
2006 2005 % 2006 2005 %
FLAT GLASS
Net Sales 3,234 3,304 -2.1% 286 285 0.5%
Interd. Sales 0 1 -82.3% 0 0 -82.6%
Con. Net Sales 3,234 3,303 -2.1% 286 285 0.5%
Expts. 640 873 -26.7% 57 78 -26.3%
EBIT 74 87 -15.6% 6 7 -12.2%
Margin (1) 2.3% 2.6% 2.2% 2.5%
EBITDA 233 261 -10.9% 21 23 -9.0%
Margin (1) 7.2% 7.9% 7.2% 7.9%
Flat Glass Volumes (Thousand m2B)(3)
Const + Auto 33,140 33,881 -2.2%
GLASS CONTAINERS
Net Sales 3,486 3,195 9.1% 309 279 10.8%
Interd. Sales 22 29 -23.7% 2 3 -22.9%
Con. Net Sales 3,463 3,166 9.4% 307 277 11.1%
Expts. 1,064 896 18.7% 94 77 22.9%
EBIT 516 366 40.9% 46 32 42.3%
Margin (1) 14.9% 11.6% 14.9% 11.7%
EBITDA 860 675 27.4% 77 60 28.5%
Margin (1) 24.8% 21.3% 24.9% 21.5%
Glass containers volumes (MM Pieces)
Domestic 1,239 1,197 3.5%
Exports 360 320 12.6%
Total:Dom.+Exp. 1,600 1,517 5.4%
Soda Ash (Thousand Tons) 165 144 14.6%
CONSOLIDATED (2)
Net Sales 6,827 6,606 3.4% 605 574 5.5%
Interd. Sales 24 33 -28.6% 2 3 -27.9%
Con. Net Sales 6,804 6,572 3.5% 603 571 5.7%
Expts. 1,705 1,769 -3.7% 151 154 -1.9%
EBIT 576 436 32.1% 51 38 34.3%
Margin (1) 8.5% 6.6% 8.5% 6.7%
EBITDA 1,110 954 16.4% 99 84 17.8%
Margin (1) 16.3% 14.5% 16.3% 14.7%
January - June
Constant Pesos Nominal Dollars
2006 2005 % 2006 2005 %
FLAT GLASS
Net Sales 6,548 6,417 2.0% 581 550 5.8%
Interd. Sales 0 1 -68.4% 0 0 -67.5%
Con. Net Sales 6,547 6,415 2.1% 581 549 5.8%
Expts. 1,304 1,698 -23.2% 120 149 -19.4%
EBIT 132 136 -3.4% 11 11 -3.6%
Margin (1) 2.0% 2.1% 1.9% 2.1%
EBITDA 465 494 -5.9% 41 42 -2.7%
Margin (1) 7.1% 7.7% 7.7%
Flat Glass Volumes (Thousand m2B)(3)
Const + Auto 67,320 69,183 -2.7%
GLASS CONTAINERS
Net Sales 6,416 5,823 10.2% 577 503 14.7%
Interd. Sales 45 77 -41.0% 4 7 -38.1%
Con. Net Sales 6,370 5,746 10.9% 573 497 15.4%
Expts. 1,945 1,689 15.2% 171 143 19.9%
EBIT 781 570 37.0% 70 50 41.1%
Margin (1) 12.3% 9.9% 12.2% 10.0%
EBITDA 1,419 1,186 19.7% 128 103 24.1%
Margin (1) 22.3% 20.6% 22.4% 20.8%
Glass containers volumes (MM Pieces)
Domestic 2,344 2,098 11.7%
Exports 665 608 9.4%
Total:Dom.+Exp. 3,010 2,706 11.2%
Soda Ash (Thousand Tons) 319 291 9.6%
CONSOLIDATED (2)
Net Sales 13,152 12,546 4.8% 1,176 1,080 8.9%
Interd. Sales 48 88 -45.1% 4 8 -42.4%
Con. Net Sales 13,104 12,457 5.2% 1,172 1,072 9.3%
Expts. 3,250 3,386 -4.0% 291 292 -0.2%
EBIT 879 689 27.5% 78 60 31.0%
Margin (1) 6.7% 5.5% 6.7% 5.6%
EBITDA 1,913 1,736 10.2% 172 151 14.3%
Margin (1) 14.6% 13.9% 14.7% 14.1%
Last Twelve Months
Constant Pesos Nominal Dollars
2006 2005 % 2006 2005 %
FLAT GLASS
Net Sales 13,166 12,983 1.4% 1,162 1,097 6.0%
Interd. Sales 1 (0) -- 0 (0) --
Con. Net Sales 13,164 12,983 1.4% 1,162 1,097 6.0%
Expts. 2,941 3,355 -12.3% 269 287 -6.0%
EBIT 478 612 -21.9% 41 51 -20.0%
Margin (1) 3.6% 4.7% 3.5% 4.7%
EBITDA 1,136 1,364 -16.7% 101 115 -12.6%
Margin (1) 8.6% 10.5% 8.7% 10.5%
Flat Glass Volumes (Thousand m2B)(3)
Const + Auto 139,639 142,712 -2.2%
GLASS CONTAINERS
Net Sales 12,524 11,576 8.2% 1,125 983 14.5%
Interd. Sales 99 176 -43.5% 9 15 -39.6%
Con. Net Sales 12,425 11,400 9.0% 1,116 968 15.3%
Expts. 3,630 3,250 11.7% 318 273 16.4%
EBIT 1,467 966 51.9% 132 82 60.1%
Margin (1) 11.8% 8.5% 11.8% 8.5%
EBITDA 2,720 2,344 16.1% 246 200 23.2%
Margin (1) 21.9% 20.6% 22.1% 20.7%
Glass containers volumes (MM Pieces)
Domestic 4,627 4,202 10.1%
Exports 1,278 1,187 7.7%
Total:Dom.+Exp. 5,904 5,389 9.6%
Soda Ash (Thousand Tons)
CONSOLIDATED (2)
Net Sales 26,075 25,299 3.1% 2,321 2,142 8.4%
Interd. Sales 105 205 -48.7% 10 17 -45.2%
Con. Net Sales 25,969 25,094 3.5% 2,312 2,125 8.8%
Expts. 6,571 6,626 -0.8% 587 562 4.6%
EBIT 1,927 1,427 35.0% 172 121 41.8%
Margin (1) 7.4% 5.7% 7.4% 5.7%
EBITDA 3,974 3,723 6.8% 358 317 13.1%
Margin (1) 15.3% 14.8% 15.5% 14.9%
(1) EBIT and EBITDA Margins consider Consolidated Net Sales.
(2) Includes corporate companies and other's sales and EBIT.
(3) m2B = Reduced Squared Meters
CONSOLIDATED AND COMBINED OF VENA AND SUBSIDIARIES, VITRO PACKAGING AND
COMEGUA AND SUBSIDIARIES
Cash Flow from Operations Analysis(1)
(Million)
YoY% YoY%
2Q'06 2Q'05 Change 6M'06 6M'05 Change
Nominal Dollars
EBITDA 76 60 28.5 128 103 24.2
Net Interest Expense(2) (10) (12) (16.1) (44) (39) 11.5
Capex (18) (14) 21.5 (32) (22) 41.6
Working Capital(3) (10) 26 -- (33) (5) 602.1
Dividends - - -- (1) (2) (27.8)
Cash Taxes paid (42) (6) (92) (6) 1,387.3
Net Free Cash Flow (3) 52 -- (73) 29 --
LTM YoY%
2006 2005 (4) Change
Nominal Dollars
EBITDA 246 198 24.1
Net Interest Expense(2) (90) (58) 56.3
Capex (62) (65) (5.3)
Working Capital(3) (12) (30) (59.0)
Dividends (1) (2) (27.8)
Cash Taxes paid (101) 4 --
Net Free Cash Flow (20) 48 --
(1) This statement is a Cash Flow statement and it does not represent a
Statement of Changes in Financial Position according with Mexican GAAP
(2) Includes other financial expenses and products.
(3) Includes; Clients, Inventories, suppliers, other current assets and
liabilities and IVA (Value Added Tax) and ISCAS taxes (Salary Special
Tax)
(4) Vitro Packaging and Empresas Comegua and Subsidiaries were acquired by
VENA on July 2004.
VITRO ENVASES DE NORTEAMERICA, S.A. DE C.V., VITRO PACKAGING AND EMPRESAS
COMEGUA AND SUBSIDIARIES
CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
FOR THE PERIODS, (MILLION)
Second Quarter
INCOME STATEMENT Constant Pesos
2006 2005 % Var.
Consolidated Net Sales 3,471 3,182 9.1
Cost of Sales 2,505 2,403 4.2
Gross Income 967 779 24.2
SG&A Expenses 452 413 9.3
Operating Income 515 366 40.9
Interest Expense 207 168 23.1
Interest Income (30) (17)
Other Financial Expenses 149 60 147.0
Exchange Loss (Gain) 121 (169) --
Gain from Monet. Position (21) (30) (28.9)
Total Financing Cost 426 13 3,180.9
Other Expenses (Income), net 53 15 264.5
Inc. (loss) bef. Tax & PSW 37 338 (89.2)
Income Tax and PSW 24 (36) --
Net Inc. (loss) Cont. Opns. 12 374 (96.7)
(Loss) on disposal of discontinued
operations - -
Income (loss)of Discont. Oper. - 0 --
Extraordinary Items, Net - -
Net Income (Loss) 12 374 (96.7)
EBITDA 860 675 27.4
Second Quarter
INCOME STATEMENT Nominal Dollars
2006 2005 % Var.
Consolidated Net Sales 308 278 10.7
Cost of Sales 222 210 5.8
Gross Income 86 68 25.9
SG&A Expenses 40 36 11.3
Operating Income 46 32 42.3
Interest Expense 18 15 24.0
Interest Income (3) (1)
Other Financial Expenses 13 5 146.2
Exchange Loss (Gain) 11 (15) --
Gain from Monet. Position (2) (3) (26.2)
Total Financing Cost 38 1 2,748.3
Other Expenses (Income), net 5 1 264.3
Inc. (loss) bef. Tax & PSW 3 30 (88.9)
Income Tax and PSW 2 (3) --
Net Inc. (loss) Cont. Opns. 1 33 (96.5)
(Loss) on disposal of discontinued
operations - -
Income (loss)of Discont. Oper. - -
Extraordinary Items, Net - -
Net Income (Loss) 1 33 (96.5)
EBITDA 76 60 28.5
January - June
INCOME STATEMENT Constant Pesos
2006 2005 % Var.
Consolidated Net Sales 6,390 5,797 10.2
Cost of Sales 4,743 4,424 7.2
Gross Income 1,647 1,373 20.0
SG&A Expenses 868 805 7.8
Operating Income 779 568 37.1
Interest Expense 400 365 9.6
Interest Income (57) (29)
Other Financial Expenses 335 172 94.7
Exchange Loss (Gain) 236 (157) --
Gain from Monet. Position (67) (68) (2.5)
Total Financing Cost 847 283 199.0
Other Expenses (Income), net 55 22 150.9
Inc. (loss) bef. Tax & PSW (123) 263 --
Income Tax and PSW (6) (77) 92.0
Net Inc. (loss) Cont. Opns. (117) 340 --
(Loss) on disposal of discontinued
operations - 0 --
Income (loss)of Discont. Oper. - 0 --
Extraordinary Items, Net - -
Net Income (Loss) (117) 340 --
EBITDA 1,417 1,183 19.7
January - June
INCOME STATEMENT Nominal Dollars
2006 2005 % Var.
Consolidated Net Sales 575 501 14.8
Cost of Sales 427 382 11.8
Gross Income 148 119 24.4
SG&A Expenses 78 69 12.4
Operating Income 70 50 41.2
Interest Expense 37 32 15.1
Interest Income (5) (3) 107.6
Other Financial Expenses 31 15 105.2
Exchange Loss (Gain) 21 (14) --
Gain from Monet. Position (6) (6) 5.0
Total Financing Cost 77 25 213.3
Other Expenses (Income), net 5 2 153.8
Inc. (loss) bef. Tax & PSW (12) 23 --
Income Tax and PSW (1) (7) 89.7
Net Inc. (loss) Cont. Opns. (11) 30 --
(Loss) on disposal of discontinued
operations - 0 --
Income (loss)of Discont. Oper. - -
Extraordinary Items, Net - -
Net Income (Loss) (11) 30 --
EBITDA 128 103 24.2
LTM
INCOME STATEMENT Constant Pesos
2006 2005* % Var.
Consolidated Net Sales 12,475 11,347 9.9
Cost of Sales 9,232 8,766 5.3
Gross Income 3,242 2,581 25.6
SG&A Expenses 1,780 1,634 8.9
Operating Income 1,462 947 54.5
Interest Expense 800 672 19.2
Interest Income (106) (49) 118.7
Other Financial Expenses 413 298 38.4
Exchange Loss (Gain) 211 (298) --
Gain from Monet. Position (193) (225) (14.2)
Total Financing Cost 1,126 398 182.6
Other Expenses (Income), net 98 72 35.8
Inc. (loss) bef. Tax & PSW 239 476 (49.9)
Income Tax and PSW 104 53 96.5
Net Inc. (loss) Cont. Opns. 135 424 (68.1)
(Loss) on disposal of discontinued
operations - 33 --
Income (loss)of Discont. Oper. (0) (0) 99.3
Extraordinary Items, Net (120) -
Net Income (Loss) 16 457 (96.6)
EBITDA 2,715 2,321 17.0
LTM
INCOME STATEMENT Nominal Dollars
2006 2005* % Var.
Consolidated Net Sales 1,121 964 16.3
Cost of Sales 830 745 11.5
Gross Income 291 219 32.7
SG&A Expenses 160 139 15.2
Operating Income 132 81 62.8
Interest Expense 73 57 27.7
Interest Income (10) (4) 131.0
Other Financial Expenses 38 26 49.2
Exchange Loss (Gain) 19 (26) --
Gain from Monet. Position (18) (19) (6.5)
Total Financing Cost 103 34 203.9
Other Expenses (Income), net 9 6 42.1
Inc. (loss) bef. Tax & PSW 20 41 (50.8)
Income Tax and PSW 9 4 151.7
Net Inc. (loss) Cont. Opns. 11 37 (70.8)
(Loss) on disposal of discontinued
operations - 3 --
Income (loss)of Discont. Oper. (0) -
Extraordinary Items, Net (11) -
Net Income (Loss) 0 40 (99.9)
EBITDA 246 198 24.1
VITRO ENVASES DE NORTEAMERICA, S.A. DE C.V., VITRO PACKAGING AND EMPRESAS
COMEGUA AND SUBSIDIARIES
CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
As of June 30, (Million)
Constant Pesos Nominal Dollars
BALANCE SHEET 2006 2005 % Var. 2006 2005 % Var.
Cash & Cash Equivalents 902 455 98.3 80 40 100.9
Trade Receivables 1,018 748 36.1 90 65 38.9
Inventories 1,715 1,737 (1.3) 152 152 0.3
Notes receivable from
affiliates 280 610 (54.1) 25 55 (54.7)
Other Current Assets 1,308 944 38.6 116 89 30.9
Total Current Assets 5,223 4,493 16.2 463 400 15.8
Prop., Plant & Equipment 8,122 8,485 (4.3) 721 754 (4.5)
Deferred Assets 584 665 (12.2) 52 60 (13.2)
Other Long-Term Assets 43 35 20.2 4 3 23.6
Total Assets 13,970 13,678 2.1 1,239 1,217 1.8
Short-Term & Curr. Debt 2,159 1,052 105.2 191 94 104.1
Notes payable to affiliates 4 40 (90.7) 0 4 (90.8)
Trade Payables 1,028 966 6.4 91 86 5.7
Other Current Liabilities 1,758 1,880 (6.5) 156 168 (7.0)
Total Curr. Liab. 4,948 3,938 25.7 439 351 25.0
Long-Term Debt 4,724 4,456 6.0 419 400 4.8
Long-Term notes payable to
affiliates (0) 390 (0) 35
Other LT Liabilities 691 1,192 (42.0) 61 106 (42.2)
Total Liabilities 10,363 9,975 3.9 919 892 3.0
Majority interest 2,848 2,911 (2.2) 253 257 (1.9)
Minority Interest 760 792 (4.1) 67 67 (0.1)
Total Shar. Equity 3,608 3,703 (2.6) 320 325 (1.5)
FINANCIAL INDICATORS 2Q'06 2Q'05
Debt/EBITDA (LTM, times) 2.5 2.6
EBITDA/ Total Net Fin. Exp. (LTM, times) 2.5 2.5
Debt/Equity (times) 1.9 1.6
Total Liab./Stockh. Equity (times) 2.9 2.7
Curr. Assets/Curr. Liab. (times) 1.1 1.1
* Vitro Packaging and Empresas Comegua and Subsidiaries were acquired by
VENA on July 2004.
Vitro Envases Norteamerica and Subsidiaries, Vitro Packaging, Inc. and
Empresas Comegua and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
(Million of constant Mexican pesos as of June 30,2006)
FOR THE SIX MONTHS PERIOD
ENDED June 30
2006 2005
OPERATING ACTIVITIES:
Net (loss) from continuing
operations (117) 340
Items that did not require
(generate) resources: -
Depreciation and amortization 561 547
Amortization of debt issue costs 31 74
Provision for seniority premium and
pension 77 69
Write-off and loss on sale of fixed
assets 55 (0)
Market value of derivatives 130 -
Deferred income tax and workers'
profit sharing (381) (490)
357 540
(Increase) in trade receivables (178) 164
Decrease (increase) in inventories (91) (62)
Increase (Decrease) in trade
payables 125 101
Change in other current assets and
liabilities, net (990) 43
Employee retirement obligations (69) (51)
Resources generated from continued
operations (847) 735
Net income from discontinued
operations - 0
Proceeds from disposal of
discontinued operations - -
Operating assets and liabilities
from discontinued operations - -
Resources generated from operations (847) 735
FINANCING ACTIVITIES: -
Bank loans 956 594
Notes payable to affiliates 2 (282)
Payment of dividends (13) (19)
Increase of capital stock - -
Effect from discontinued operations - -
Resources used in financing
activities 944 293
INVESTING ACTIVITIES: -
Investment in land and buildings,
machinery and equipment, and
construction in progress (312) (256)
Sale of fixed assets 1 0
Investment in deferred charges (2) (84)
Notes receivable from affiliates 385 (587)
Long term receivables (5) (3)
Investment in subsidiaries (217) -
Effect from discontinued operations - -
Resources used in investing
activities (150) (930)
Decrease in cash and cash
equivalents (53) 98
Balance at the beginning of year 955 356
Balance at the end of the period 902 455
