SAN PEDRO GARZA GARCIA, Mexico, Oct. 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 3Q'06 unaudited results. Year over year consolidated sales increased 7.9 percent and EBITDA rose 10.6 percent. The consolidated EBITDA margin was up 40 basis points to 16.9 percent for the quarter. Excluding the divestiture of Quimica M in March 2006 and the acquisition of Vidrios Panamenos (VIPASA) in April 2006, consolidated sales rose 8.0 percent and consolidated EBITDA also excluding the flat glass inventory reduction effect increased 13.4 percent year over year.
FINANCIAL HIGHLIGHTS*
3Q'06 3Q'05 % Change
Consolidated Net Sales 621 576 7.9%
Flat Glass 286 287 -0.1%
Glass Containers 326 281 15.8%
Cost of Sales 446 410 8.8%
Gross Income 175 165 5.6%
Gross Margins 28.1% 28.7% -0.6 pp
SG&A 118 114 3.4%
SG&A % of sales 19.0% 19.8% -0.8 pp
EBIT 57 52 10.2%
EBIT Margins 9.2% 9.0% 0.2 pp
EBITDA 105 95 10.6%
Flat Glass 29 29 -1.6%
Glass Containers 75 63 18.3%
EBITDA Margins 16.9% 16.5% 0.4 pp
Net Income 14 (10) -
Net Income Margins 2.2% -1.7% +390 bps
Total Debt 1,209 1,440 -16.1%
Short Term Debt 492 302 62.7%
Long Term Debt 717 1,138 -37.0%
Average life of debt 3.5 3.9
Cash & Cash Equivalents(1) 77 220 -65.2%
* 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 a very solid quarter, from an operational and from a financial standpoint. We achieved the all-time highest comparable consolidated EBITDA and reported the lowest comparable total gross debt level."
Mr. Rodriguez continued, "We expected for things to start to slowdown at Glass Containers, but our very strong management team has continued to report outstanding results, with sales up 16 percent and EBITDA up 18 percent. In fact, comparable EBITDA was an all-time record for a third quarter.
"Trends at Flat Glass also remain very positive, with the business unit reporting the highest third quarter EBITDA since 3Q04. On a comparable basis, sales rose 2.3 percent and EBITDA, excluding the effect of the inventory reduction, rose 12 percent for the quarter and 31 percent for the first nine months."
"We continued to make progress with our strategy to reduce holding company debt. Year over year, we lowered gross debt at the holding company level by US$103 million and consolidated gross debt by US$231 million to US$1.209 billion, the lowest level ever on a comparable basis. In addition, consolidated net debt declined by US$88 million during the same period. We also made headway with the sale of real estate. At the beginning of the year we said we would close US$40 million in real estate sales and I am pleased to report that so far we have exceeded our target and closed real estate sales for a total of US$43 million. As part of this process we have sold one of the buildings from our corporate headquarters complex, which once again proves that there are no sacred cows at Vitro." commented Mr. Rodriguez.
We continue to focus and strengthen our core businesses, now by assuming full control of Vitro Flex. In relation to this transaction Hugo Lara, President of the Flat Glass business unit, commented: "On September 29, 2006 Vitro assumed 100 percent control of Vitro Flex, ending its joint venture agreement. This transaction provides Vitro Plan with the required flexibility to optimize its auto safety glass manufacturing system. We intend to use this additional capacity to complement Vitro Automotriz, Vitro Plan's largest auto glass subsidiary, and to further expand our business and strengthen our relationship with our customers."
Mr. Rodriguez closed: "We continue to deliver on the financial plan established during mid 2005 to move Vitro forward to become a company with lower cost of capital, long term funds, higher cash flow generation and a solid path to growth. In fact, this quarter we launched a US$50 million rights offering that is being subscribed by current shareholders who strongly support our strategy, demonstrating their confidence in our future."
Sep-05 Sep-06
Inflation in Mexico
Quarter 0.9% 1.6%
LTM 3.5% 3.9%
Inflation in USA
Quarter 1.0% 0.7%
LTM 3.6% 3.8%
Exchange Rate
Closing 10.7907 10.9935
Devaluation
Quarter 0.1% -2.5%
LTM -5.2% 1.9%
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.
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/
Third Quarter 2006 results
Conference Call and Web cast
Thursday, October 26, 2006
11:00 AM U.S. EDT - 10:00 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 November 24, 2006. For inquiries regarding the conference call, please contact Michael Fehle of Breakstone Group via telephone at (646) 452-2336, 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 6
Capital Expenditures 6
Consolidated Financial Position 6
Cash Flow 8
Key Developments 10
Flat Glass 12
Glass Containers 13
Consolidated Financial Statements 14
Segmented Information 15
VENA's Consolidated Financial Statements 15
Consolidated Results
3Q06 Highlights
US$ Million
SALES EBITDA
3Q06 3Q05 YoY 3Q06 3Q05 YoY
$ $ Change $ $ Change
% % % %
FLAT GLASS 46 286 287 -0.1 28 29 29 -1.6
G. CONTAINERS 52 326 281 15.8 71 75 63 18.3
HOLDING(1,2) 1 9 8 16.1 1 1 2 -49.3
TOTAL 100 621 576 7.9 100 105 95 10.6
TOTAL DEBT(4) INTER
COMPANY
DEBT
3Q06 3Q05 YoY 3Q06 3Q05
$ $ Change $ $
%
FLAT GLASS 380 402 -5.6 296 149
G. CONTAINERS 560 571 -2.0 -59 -7
HOLDING(1,2) 269 467 -42.4 -236 -142
TOTAL 1209 1440 -16.1
DEBT WITH THIRD CASH & CASH
PARTIES EQUIVALENTS(3)
3Q06 3Q05 YoY 3Q06 3Q05 YoY
$ $ Change $ $ Change
% %
FLAT GLASS 84 253 -66.8 17 55 -68.3
G. CONTAINERS 619 578 7.0 42 141 -70.5
HOLDING(1,2) 506 609 -17.0 18 24 -27.1
TOTAL 1209 1440 -16.1 77 220 -65.2
(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.
(4) Crisas' debt is not included prior to 2Q'06 as it was considered a
Discontinued Operation.
Sales
Consolidated net sales for 3Q'06 increased 7.9 percent YoY to US$621 million and 8.9 percent to US$2,357 million for LTM 2006. Glass Containers sales for the quarter rose YoY by 15.8 percent while Flat Glass sales remained flat over the same time period.
During the quarter domestic and foreign subsidiaries' sales grew 15.5 percent and 16.0 percent YoY, respectively. Export sales decreased 13.2 percent during the same period.
On a comparable basis, excluding the divestiture of Quimica M in March 2006 and the acquisition of Vidrios Panamenos (VIPASA) in April 2006, consolidated net sales for the quarter rose 8.0 percent YoY.
Table 1: Total Sales
Table 1
Sales
(Million)
YoY% YoY%
3Q'06 3Q'05 Change 9M'06 9M'05 Change
Constant Pesos
Total Consolidated Sales 6,839 6,529 4.7 19,916 18,966 5.0
Flat Glass 3,152 3,269 (3.6) 9,652 9,643 0.1
Glass Containers 3,588 3,174 13.0 9,977 8,935 11.7
Domestic Sales 2,986 2,659 12.3 8,442 7,677 10.0
Export Sales 1,493 1,765 (15.4) 4,738 5,152 (8.0)
Foreign Subsidiaries 2,361 2,106 12.1 6,736 6,137 9.8
Nominal Dollars
Total Consolidated Sales 621 576 7.9 1,793 1,648 8.8
Flat Glass 286 287 (0.1) 868 836 3.8
Glass Containers 326 281 15.8 899 778 15.5
Domestic Sales 275 238 15.5 766 672 14.0
Export Sales 135 156 (13.2) 427 448 (4.7)
Foreign Subsidiaries 210 181 16.0 600 528 13.6
% Foreign Currency Sales*/
Total Sales 56% 59% -2.9pp 57.0% 59.2% -2.2pp
% Export Sales /
Total Sales 22% 27% -5.3pp 23.8% 27.2% -3.4pp
* Exports + Foreign Subsidiaries
LTM YoY%
2006 2005 Change
Constant Pesos
Total Consolidated Sales 26,224 25,083 4.5
Flat Glass 12,958 12,810 1.2
Glass Containers 12,877 11,660 10.4
Domestic Sales 11,111 10,343 7.4
Export Sales 6,297 6,612 (4.8)
Foreign Subsidiaries 8,816 8,127 8.5
Nominal Dollars
Total Consolidated Sales 2,357 2,164 8.9
Flat Glass 1,162 1,105 5.1
Glass Containers 1,160 1,007 15.3
Domestic Sales 1,010 894 13.0
Export Sales 567 571 (0.6)
Foreign Subsidiaries 780 700 11.5
% Foreign Currency Sales* /
Total Sales 57% 59% -1.6pp
% Export Sales / Total Sales 24% 26% -2.4pp
EBIT and EBITDA
Consolidated EBIT for the quarter increased 10.2 percent YoY to US$57 million from US$52 million last year. EBIT margin increased 0.2 percentage points to 9.2 percent. For LTM 2006, EBIT margin increased 1.2 percentage points to 7.5 percent.
EBIT for the quarter at Glass Containers increased by 21.8 percent YoY, while at Flat Glass EBIT decreased 12.7 percent. On a comparable basis, Glass Containers EBIT, excluding VIPASA, increased 19.7 percent YoY while Flat Glass EBIT, excluding Quimica M, decreased 5.0 percent YoY.
Consolidated EBITDA for the quarter increased 10.6 percent to US$105 million from US$95 million in 3Q'05. The EBITDA margin increased 0.4 percentage points YoY to 16.9 percent. On a comparable basis, excluding the divestiture of Quimica M and the acquisition of VIPASA, consolidated EBITDA for the quarter increased 11.3 percent YoY. For LTM 2006, consolidated EBITDA increased 12.9 percent to US$368 million from US$326 million in LTM 2005.
During the quarter, EBITDA decreased 1.6 percent YoY at Flat Glass. EBITDA at Glass Containers rose 18.3 percent. On a comparable basis, excluding Quimica M, EBITDA for Flat Glass during the quarter increased 4.8 percent YoY while EBITDA for Glass Containers, excluding VIPASA, increased 16.1 percent YoY. Glass Containers was the major EBITDA contributor for the quarter.
The Company's expense reduction effort continued to benefit results during this quarter, SG&A was reduced by 0.8 percent compared with 3Q'05.
Table 2: EBIT and EBITDA
Table 2
EBIT and EBITDA
(Million)
YoY% YoY%
3Q'06 3Q'05 Change 9M'06 9M'05 Change
Constant Pesos
Consolidated EBIT 626 583 7.4 1,505 1,270 18.5
Margin 9.2% 8.9% 0.3pp 7.6% 6.7% 0.9pp
Flat Glass 141 169 (16.5) 266 299 (11.1)
Glass Containers 506 424 19.4 1,294 998 29.6
Consolidated EBITDA 1,154 1,068 8.1 3,078 2,813 9.4
Margin 16.9% 16.4% 0.5pp 15.5% 14.8% 0.7pp
Flat Glass 317 333 (4.8) 779 824 (5.6)
Glass Containers 825 711 16.1 2,258 1,908 18.4
Nominal Dollars
Consolidated EBIT 57 52 10.2 135 111 21.4
Margin 9.2% 9.0% 0.2pp 7.5% 6.7% 0.8pp
Flat Glass 13 15 (12.7) 24 26 (8.7)
Glass Containers 46 38 21.8 116 87 32.7
Consolidated EBITDA 105 95 10.6 277 245 12.9
Margin 16.9% 16.5% 0.4pp 15.5% 14.9% 0.6pp
Flat Glass 29 29 (1.6) 70 72 (2.2)
Glass Containers 75 63 18.3 203 167 21.9
LTM YoY%
2006 2005 Change
Constant Pesos
Consolidated EBIT 1,973 1,558 26.6
Margin 7.5% 6.2% 1.3 pp
Flat Glass 441 556 (20.7)
Glass Containers 1,562 1,148 36.1
Consolidated EBITDA 4,086 3,769 8.4
Margin 15.6% 15.0% 0.6 pp
Flat Glass 1,116 1,278 (12.6)
Glass Containers 2,862 2,478 15.5
Nominal Dollars
Consolidated EBIT 177 136 30.5
Margin 7.5% 6.3% 1.2 pp
Flat Glass 39 48 (18.0)
Glass Containers 140 100 40.4
Consolidated EBITDA 368 326 12.9
Margin 15.6% 15.1% 0.5 pp
Flat Glass 100 110 (9.0)
Glass Containers 258 214 20.3
Consolidated Financing Cost
Consolidated financing costs for the quarter decreased to US$23 million compared with US$38 million during 3Q'05. This was primarily driven by a non- cash foreign exchange gain of US$18 million compared to a non-cash foreign exchange loss of US$5 million in 3Q'05. During 3Q'06 the Mexican Peso appreciated by 2.5 percent compared with a 0.1 percent depreciation in 3Q'05. This effect more than offset an increase in other financial expenses driven mainly by the negative value in derivate transactions.
In addition, a higher monetary position gain coupled with an increase in interest income more than offset a slight increase in interest expense.
On a LTM basis, total consolidated financing cost increased to US$205 million from US$108 million due to a non-cash foreign exchange loss of US$14 million compared with a non-cash foreign exchange gain of US$35 million in the same period last year and an increase in other financial expenses driven mainly by the negative value in derivative transactions.
Table 3: Total Financing Cost
Table 3
Total Financing Cost
(Million)
YoY% YoY%
3Q'06 3Q'05 Change 9M'06 9M'05 Change
Constant Pesos
Interest Expense 452 432 4.6 1,339 1,406 (4.8)
Interest Income (38) (6) 548.7 (90) (104) (13.3)
Other Financial Expenses
(Gain)* 206 67 206.4 686 326 110.8
Foreign Exchange Loss
(Gain) (204) 64 -- 316 (248) --
Monetary Position
(Gain) (169) (131) 28.3 (287) (278) 3.1
Total Financing Cost
(Gain) 248 425 (41.8) 1,964 1,101 78.3
Nominal Dollars
Interest Expense 41 39 6.5 121 122 (1.0)
Interest Income (3) (1) 587.3 (8) (9) (8.0)
Other Financial Expenses
(Gain)* 19 6 213.0 62 28 121.1
Foreign Exchange Loss
(Gain) (18) 5 -- 27 (22) --
Monetary Position (Gain) (15) (12) 30.4 (26) (24) 8.6
Total Financing Cost
(Gain) 23 38 (40.1) 176 95 85.1
LTM YoY%
2006 2005 Change
Constant Pesos
Interest Expense 1,824 1,865 (2.2)
Interest Income (149) (142) 5.4
Other Financial Expenses (Gain)* 881 459 92.1
Foreign Exchange Loss (Gain) 168 (402) --
Monetary Position (Gain) (440) (524) (16.0)
Total Financing Cost (Gain) 2,284 1,255 81.9
Nominal Dollars
Interest Expense 165 160 2.9
Interest Income (14) (12) 13.0
Other Financial Expenses (Gain)* 80 39 104.0
Foreign Exchange Loss (Gain) 14 (35) --
Monetary Position (Gain) (40) (45) (9.7)
Total Financing Cost (Gain) 205 108 90.8
* Includes effect of bulletin C-10 (derivative transactions) and interest
related to factoring transactions
Taxes
Total Taxes and PSW (Profit Sharing to Workers) increased from an expense of US$8 million in 3Q'05 to an expense of US$22 million for this quarter. This increase, which does not represent a cash outflow, was derived mainly from the reduction of fixed assets tax depreciation which generates a higher taxable income and from the absence of a benefit recognition in 2005 from foreign subsidiaries. During 3Q'06 the higher taxable income was amortized against net operating tax losses from previous years.
Table 4: Taxes and Profit Sharing to Workers
Table 4
Taxes and Profit Sharing to Workers
(Million)
YoY% YoY%
3Q'06 3Q'05 Change 9M'06 9M'05 Change
Constant Pesos
Accrued Income Tax 26 87 (70.7) 158 131 19.9
Deferred Income Tax
(gain) 213 (9) -- 198 (621) --
Total Income Tax 238 78 205.0 356 (490) --
Profit Sharing to
Workers 5 6 (17.7) 27 49 (45.6)
Total Taxes and PSW 243 84 189.2 383 (440) --
Nominal Dollars
Accrued Income Tax 2 8 (69.5) 14 11 25.4
Deferred Income Tax
(gain) 19 (1) -- 19 (54) --
Total Income Tax 22 7 210.7 32 (43) --
Profit Sharing to
Workers 0 1 (17.5) 2 4 (43.0)
Total Taxes and PSW 22 8 194.3 35 (39) --
LTM YoY%
2006 2005 Change
Constant Pesos
Accrued Income Tax 137 (42) --
Deferred Income Tax (gain) 218 (642) --
Total Income Tax 355 (685) --
Profit Sharing to Workers 26 83 (69.2)
Total Taxes and PSW 380 (602) --
Nominal Dollars
Accrued Income Tax 12 (4) --
Deferred Income Tax (gain) 20 (56) --
Total Income Tax 32 (59) --
Profit Sharing to Workers 2 7 (67.7)
Total Taxes and PSW 34 (52) --
Consolidated Net Income
During the quarter the Company recorded a consolidated net income of US$14 million compared to a net loss of US$10 million during the same quarter last year. This variation is mainly a result of a decline in financing costs due to a non-cash foreign exchange gain compared with an non-cash foreign exchange loss in 3Q'05 as well as a US$57 million EBIT during the quarter compared with US$52 million in same quarter last year. The above mentioned factors more than offset higher income taxes and PSW.
Capital Expenditures (CAPEX)
Capital expenditures for the quarter totaled US$24 million, compared with US$26 million in 3Q'05. Flat Glass accounted for 21 percent and was mainly invested in the final stage of the VF1 furnace repair and for maintenance purposes. Glass Containers represented 77 percent of total Capex consumption and included investment in major furnace repairs, inspection equipment and maintenance.
Consolidated Financial Position
Consolidated gross debt as of September 30 2006 totaled US$1,209 million, a QoQ decrease of US$88 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$17 million to US$1,132. On a YoY comparison, net debt decreased US$88 million.
As of 3Q'06, the Company had a cash balance of US$77 million, of which US$71 million was recorded as cash and cash equivalents and US$6 million was classified as other current assets. The US$6 million is restricted cash, which corresponds to cash collateralizing derivatives instruments - US$1 million was recorded at Glass Containers and US$5 at the holding company.
Table 5
Debt Indicators
(Million dollars; except as indicated)
3Q'06 2Q'06 1Q'06 4Q'05 3Q'05
Interest Coverage
(EBITDA/ Total Net Financial Exp.)
(Times) LTM 1.6 1.6 1.6 1.7 1.7
Leverage
(Total Debt / EBITDA) (Times) LTM 3.3 3.8 4.0 4.0 4.3
(Total Net Debt / EBITDA) (Times)
LTM 3.1 3.3 3.6 3.5 3.7
Total Debt(1) 1,209 1,297 1,354 1,383 1,440
Short-Term Debt(2) 492 580 460 310 302
Long-Term Debt 717 717 894 1,073 1,138
Cash and Equivalents(3) 77 148 132 165 220
Total Net Debt 1,132 1,149 1,222 1,218 1,220
Currency Mix (%) dlls&Euros/
Pesos/UDI's 90/6/4 90/7/3 87/7/7 85/8/7 85/8/7
(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) 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 3Q'06 was 3.5 years compared
with 3.9 years for 3Q'05.
-- Short term debt as of September 30 2006 decreased by US$62 million to
41 percent as a percentage of total debt, compared with 43 percent in
2Q'06. These amounts include current maturities of long-term debt.
-- As of September 30, 2006 we had an aggregate of US$136 million in off-
balance sheet financing related to our sales of receivables and
receivable securitization programs. Flat Glass recorded US$71 million
and Glass Containers recorded US$65 million.
-- 44 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 47 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, decreased by US$158 million to US$259 million from US$417
as of June 30, 2006, and as of 3Q'06 represented 53 percent of total
short term debt.
-- Approximately 43 percent of debt maturities due in the remainder of
2006 are at the operating subsidiaries 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 Programs, Vitro Plan's
Syndicated Loan and Credit Facilities at the subsidiary level.
-- Market maturities from 2008 and thereafter include the Senior Notes due
in 2011 at VENA, the 2010 Secured Term Loan at VENA, long-term
"Certificados Bursatiles" and the Senior Notes due in 2013 at the
Holding Company level.
Cash Flow
Net free cash flow for the quarter decreased to US$10 million compared to US$30 million in 3Q'05. This was principally the result of higher Net Interest Expense and higher working capital needs in 3Q'06, and was partially offset by higher EBITDA and lower capex investments.
On an LTM basis, the Company recorded a free cash flow of US$33 million compared to a negative US$7 million during the same period last year. Higher EBITDA as well as lower capex needs more than compensated for the higher net interest expense.
Table 6: Cash Flow Analysis
Table 6
Cash Flow from Operations Analysis(1)
(Million)
YoY% YoY%
3Q'06 3Q'05 Change 9M'06 9M'05 Change
Constant Pesos
EBITDA 1,154 1,068 8.1 3,078 2,813 9.4
Net Interest Expense(2) (405) (446) (9.3) (1,397) (1,486) (6.0)
Capex (265) (286) (7.5) (788) (761) 3.5
Working Capital(3) (77) 190 -- (204) 135 --
Dividends (11) (21) (48.1) (153) (178) (13.9)
Cash Taxes (paid)
recovered (84) (48) 73.9 (124) (254) (51.2)
Net Free Cash Flow 313 456 (31.3) 413 269 53.6
Nominal Dollars
EBITDA 105 95 10.6 277 245 12.9
Net Interest Expense(2) (55) (49) 11.0 (151) (139) 9.0
Capex (24) (26) (5.8) (74) (67) 11.4
Working Capital(3) (7) 17 - (22) 13 --
Dividends (1) (2) (43.9) (13) (15) (12.4)
Cash Taxes (paid)
recovered (8) (4) 74.7 (11) (22) (51.5)
Net Free Cash Flow 10 30 (66.5) 6 15 (61.5)
LTM YoY%
2006 2005 Change
Constant Pesos
EBITDA 4,086 3,769 8.4
Net Interest Expense(2) (1,900) (1,937) (1.9)
Capex (1,073) (1,417) (24.3)
Working Capital(3) 27 134 (79.6)
Dividends (159) (242) (34.5)
Cash Taxes (paid)
recovered (253) (287) (11.9)
Net Free Cash Flow 729 20 3,624.3
Nominal Dollars
EBITDA 368 326 12.9
Net Interest Expense(2) (199) (176) 12.6
Capex (100) (122) (18.0)
Working Capital(3) (0) 13 --
Dividends (14) (21) (34.5)
Cash Taxes (paid)
recovered (23) (25) (9.5)
Net Free Cash Flow 32 (6) --
(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 Plan takes full control of Vitro Flex
On September 29, 2006 Vitro Plan, S.A. de C.V. ("Vitro Plan"), Vitro's flat glass division, and Visteon ended their Joint Venture agreement in Vitro Flex, S.A. de C.V. ("Vitro Flex"). Vitro Plan is now the sole owner of Vitro Flex. Vitro Flex was a joint venture formed in 1979 with Fairlane Holdings ("Fairlane"), a Visteon affiliate. With sales of US$79 million for the last twelve months ended June 30, 2006, Vitro Flex manufactured tempered and laminated glass for use in Ford vehicles. Fairlane will receive US$ 9.4 million for the 38 percent stake in Vitro Flex. An initial payment of US$ 2.0 million was made on September 29th 2006, which will be followed by four annual payments of US$ 1.85 million, starting on September 30, 2007. The transaction will be funded by Vitro Flex with cash from operations. During the life of the joint venture, Visteon acted as the intermediary between Vitro Flex and Ford. Vitro Flex together with Vitro Automotriz (VAU) will now directly manage their relationship with Ford and will now serve all Vitro's automotive customers. Under the prior structure, contractual restrictions limited its ability to use excess capacity for non Ford volumes. Recognized for its outstanding quality, Vitro Flex is an Ibero-American Quality Award Recipient, among other awards.
Hugo Lara, President of the Flat Glass business unit, commented "This transaction provides Vitro Plan with flexibility to optimize its Auto Safety- Glass manufacturing system. In 2005 alone, we won 15 new OEM platforms which will keep us at near 100-percent capacity utilization until 2011 in our VAU plants. With nine months 2006 sales to Original Equipment Manufacturers (OEMs) up 42 percent year over year, we believe that this transaction comes at the right time. We intend to use this additional capacity in our automotive operations to continue supplying the growing needs of our OEM clients." Mr. Lara continued, "By having Vitro Automotriz, Vitro Plan's largest auto glass subsidiary, and Vitro Flex working together under the same umbrella, we shall be able to further expand our business and strengthen our relationship with all of our customers."
This transaction was done by means of Visteon's right to withdraw its equity participation.
Capital Stock Increase Approved at General Ordinary Shareholders' Meeting
On September 27, 2006 the Company announced that in an Ordinary Shareholder Meeting held that day, it had approved an increase in the variable portion of the Company's capital stock through which the company expects to receive funds totaling Ps.550 million. Vitro's current shareholders may subscribe shares by exercising their preemptive rights as provided in its corporate by-laws. Shareholders approved that each of the 62,857,143 (sixty two million, eight hundred and fifty seven thousand, one hundred and forty three) Vitro new Series "A" nominative ordinary shares with no par value to be issued, representing the capital increase, will be subscribed at a theoretical value of Ps 1.00 plus a subscription premium of Ps.7.75 to be credited to Stockholders' Equity in the Paid-in capital account. As a result, each share will be subscribed at a total value of Ps.8.75. Thus shareholders approved a Ps.62,857,143 (sixty two million, eight hundred and fifty seven thousand, one hundred and forty three pesos) increase in the variable portion of the capital stock, which added to the Ps.487,142,858 million (four hundred eighty seven million, one hundred and forty two thousand, eight hundred and fifty eight pesos) resulting from the subscription premium, will result in a total of Ps.550,000,000 (five hundred and fifty million pesos) which the company expects to obtain from this capital increase. Once shareholders subscribe to and pay for this increase the company's capital stock will total Ps.386,857,143 million (three hundred eighty six, eight hundred and fifty seven thousand, one hundred and forty three pesos).
Vitro Announces Successful Closing of US$110 million Senior Short Term Guaranteed Notes Issued by Vitro Envases Norteamerica, S.A. de C.V.
On August 9, 2006 the Company announced that its subsidiary, Vitro Envases Norteamerica, S.A. de C.V. ("VENA"), Vitro's glass containers division, successfully closed the issuance of US$110 million aggregate principal amount of Senior Short Term Guaranteed Notes ("the Notes").The Notes have a 12-month maturity and a 10 percent interest rate. The net proceeds will be used to prepay the US$105 million Loan Agreement with Credit Suisse at VENA. The market reacted very positively to the offering, which was oversubscribed by 40 percent. This oversubscription, coupled with a lower interest rate than the loan to be prepaid, demonstrates VENA's ability to access the market on more favorable terms.
Flat Glass
(46 percent of LTM Consolidated Sales)
Sales
Flat Glass sales for the quarter remained flat at US$286 million. On a comparable basis, excluding Quimica M which was divested in March 2006, sales rose 2.3 percent YoY.
Domestic sales increased 37.5 percent YoY, mainly as a result of higher automotive and construction-related sales. Construction-related volumes increased 19 percent YoY while the prices continue to reflect stability as they increased 8 percent compared with the second quarter of this year and decreased 2 percent YoY.
Export sales decreased 39.1 percent YoY due to lower Auto Glass Replacement ("AGR") and construction-related sales. AGR export sales reduction was driven by a decrease in volume as that capacity is used to supply the OEM market, this effect was partially offset by an improved product mix. The construction-related export sales decreased as the company continues to focus on the Mexican market.
Automotive sales increased 4.4 percent YoY driven by larger volumes due to the success of current platforms. These platforms resulted in a 15 percent YoY sales increase at the OEM line and continue to compensate for lower export volumes in the AGR market. In addition, AGR domestic sales increased 2 percent YoY.
Sales from foreign subsidiaries continued an upward trend, increasing 6.2 percent YoY to US$160 million from US$151 million. Sales at Vitro America, Vitro's Flat Glass subsidiary in the US, rose 6.1 percent YoY, mainly driven by higher volumes in the construction market. Sales at the Spanish subsidiary increased 17.3 percent YoY driven by incremental monumental contracts coupled with an improved product mix. Sales at Vitro Colombia increased 5.8 percent compared with the same quarter last year.
EBIT & EBITDA
EBIT decreased 12.7 percent YoY to US$13 million from US$15 million, while EBITDA decreased 1.6 percent to US$29 million. During the same period, EBIT and EBITDA margins decreased 0.6 and 0.1 percentage points respectively.
During the quarter, on a comparable basis, excluding Quimica M, Flat Glass EBIT decreased 5.0 percent YoY and EBITDA rose 4.8 percent.
On a YoY comparison, the temporary shutdown of the X-3 furnace and inventory reduction affected the EBIT and EBITDA generation. This effect was partially compensated by higher volumes in Automotive OEM and domestic Construction markets.
Without the effect in the inventory reduction the EBITDA for the quarter is US$31 million and for the 9M'06 is US$87 million. Therefore on a comparable basis, EBITDA grew 12 percent for the quarter and 31 percent for the 9M'06.
Strong EBITDA generation from Vitro America and Vitro Espana which grew YoY 45 and 41 percent respectively also contributed to increase EBITDA on a comparable basis.
Table 7: Flat Glass
Table 7
Flat Glass
(Million)
YoY% YoY%
3Q'06 3Q'05 Change 9M'06 9M'05 Change
Constant Pesos
Consolidated Net sales 3,152 3,269 (3.6) 9,652 9,643 0.1
Net Sales
Domestic Sales 811 625 29.7 2,345 1,883 24.6
Exports 531 886 (40.1) 1,855 2,609 (28.9)
Foreign Subsidiaries 1,810 1,758 3.0 5,451 5,151 5.8
EBIT 141 169 (16.5) 266 299 (11.1)
EBITDA 317 333 (4.8) 779 824 (5.6)
EBIT Margin 4.5% 5.2% -0.7pp 2.8% 3.1% -0.3pp
EBITDA Margin 10.1% 10.2% -0.1pp 8.1% 8.5% -0.4pp
Nominal Dollars
Consolidated Net sales 286 287 (0.1) 868 836 3.8
Domestic Sales 78 57 37.5 216 166 30.2
Export Sales 48 79 (39.1) 168 228 (26.3)
Foreign Subsidiaries 160 151 6.2 484 443 9.4
EBIT 13 15 (12.7) 24 26 (8.7)
EBITDA 29 29 (1.6) 70 72 (2.2)
EBIT Margin 4.5% 5.1% -0.6pp 2.7% 3.1% -0.4pp
EBITDA Margin 10.1% 10.2% -0.1pp 8.1% 8.6% -0.5pp
Volumes
Flat Glass (Thousands of
m2B)(2) 31,362 35,532 (11.7) 98,682 101,716 (3.0)
Capacity utilization
Flat Glass furnaces(1) 112% 106% 6pp
Flat Glass auto 78% 89% -11pp
LTM YoY%
2006 2005 Change
Constant Pesos
Consolidated Net sales 12,958 12,810 1.2
Net Sales
Domestic Sales 3,168 2,685 18.0
Exports 2,632 3,338 (21.2)
Foreign Subsidiaries 7,158 6,787 5.5
EBIT 441 556 (20.7)
EBITDA 1,116 1,278 (12.6)
EBIT Margin 3.4% 4.3% -0.9pp
EBITDA Margin 8.6% 10.0% -1.4pp
Nominal Dollars
Consolidated Net sales 1,162 1,105 5.1
Domestic Sales 292 232 25.4
Export Sales 239 289 (17.3)
Foreign Subsidiaries 632 584 8.1
EBIT 39 48 (18.0)
EBITDA 100 110 (9.0)
EBIT Margin 3.4% 4.3% -0.9pp
EBITDA Margin 8.6% 10.0% -1.4pp
Volumes
Flat Glass (Thousands of m2B)(2) 135,468 139,068 (2.6)
(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
(52 percent of LTM Consolidated Sales)
Sales
Sales increased by 15.8 percent YoY to US$326 million from US$281 million. On a comparable basis, excluding VIPASA, which was acquired in April 2006, sales increased 13 percent YoY.
The main drivers behind the 8.2 percent YoY increase in domestic sales were higher volumes across all segments coupled with an improved price mix in the food and wine & liquor markets.
Export sales grew 13.5 percent YoY due to a strong rise in sales volume at the CFT (Cosmetics, Fragrances & Toiletries) line in the South American and European markets coupled with an improved price mix at the wine & liquor market.
Sales from Glass Container's foreign subsidiaries rose 64.6 percent YoY, reflecting the acquisition of VIPASA.
EBIT and EBITDA
EBIT for the quarter increased 21.8 percent YoY to US$46 million from US$38 million in 3Q'05. EBITDA for the same period rose 18.3 percent to US$75 million from US$63 million.
During the quarter, on a comparable basis, excluding VIPASA, Glass Containers EBIT increased 19.7 percent YoY and EBITDA rose 16.1 percent.
EBITDA growth continued to be driven by higher volumes and improved production efficiencies, related to higher production levels and a strong demand, which more than offset higher maintenance costs associated with the utilization of all furnaces as well as an increase in raw materials and freight costs.
EBITDA from Mexican glass containers operations, VENA's core business representing approximately 81 percent of total EBITDA, rose 14.2 percent YoY.
Table 8: Glass Containers
Table 8
Glass Containers
(Million)
YoY% YoY%
3Q'06 3Q'05 Change 9M'06 9M'05 Change
Constant Pesos
Consolidated Net sales 3,588 3,174 13.0 9,977 8,935 11.7
Net Sales
Domestic Sales 2,076 1,947 6.6 5,810 5,407 7.5
Exports 962 879 9.4 2,882 2,543 13.4
Foreign Subsidiaries 551 348 58.1 1,285 986 30.3
EBIT 506 424 19.4 1,294 998 29.6
EBITDA 825 711 16.1 2,258 1,908 18.4
EBIT Margin 14.1% 13.3% 0.8pp 13.0% 11.2% 1.8pp
EBITDA Margin 23.0% 22.4% 0.6pp 22.6% 21.3% 1.3pp
Nominal Dollars
Consolidated Net sales 326 281 15.8 899 778 15.5
Domestic Sales 188 174 8.2 525 473 11.0
Export Sales 87 77 13.5 259 220 17.7
Foreign Subsidiaries 50 30 64.6 115 85 35.5
EBIT 46 38 21.8 116 87 32.7
EBITDA 75 63 18.3 203 167 21.9
EBIT Margin 14.1% 13.4% 0.7pp 12.9% 11.2% 1.7pp
EBITDA Margin 23.0% 22.5% 0.5pp 22.6% 21.4% 1.2pp
Glass Containers
Domestic (Millions of
Units) 1,311 1,214 8.0 3,656 3,313 10.4
Exports (Millions of
Units) 340 313 8.7 1,005 920 9.2
Total 1,651 1,527 8.1 4,661 4,233 10.1
Capacity utilization
(furnaces) 98% 94% 4pp
Capacity utilization
(production lines) 95% 90% 5pp
Alcali (Thousands Tons
sold)* 155 150 3.4 474 441 7.4
LTM YoY%
2006 2005 Change
Constant Pesos
Consolidated Net sales 12,877 11,660 10.4
Net Sales
Domestic Sales 7,553 7,055 7.0
Exports 3,665 3,264 12.3
Foreign Subsidiaries 1,658 1,341 23.7
EBIT 1,562 1,148 36.1
EBITDA 2,862 2,478 15.5
EBIT Margin 12.1% 9.8% 2.3pp
EBITDA Margin 22.2% 21.2% 1pp
Nominal Dollars
Consolidated Net sales 1,160 1,007 15.3
Domestic Sales 683 610 12.0
Export Sales 328 281 16.8
Foreign Subsidiaries 149 115 28.8
EBIT 140 100 40.4
EBITDA 258 214 20.3
EBIT Margin 12.1% 9.9% 2.2pp
EBITDA Margin 22.2% 21.3% 0.9pp
Glass Containers
Domestic (Millions of Units) 4,723 4,352 8.5
Exports (Millions of Units) 1,305 1,190 9.7
Total 6,028 5,542 8.8
Capacity utilization (furnaces)
Capacity utilization (production lines)
Alcali (Thousands Tons sold)* - - -
* Includes sodium carbonate, sodium bicarbonate, sodium chlorine, calcium
chlorine
CONSOLIDATED
VITRO, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS, (MILLION)
Third Quarter
INCOME STATEMENT Constant Pesos Nominal Dollars
2006 2005 % Var. 2006 2005 % Var.
Consolidated Net Sales 6,839 6,529 4.7 621 576 7.9
Cost of Sales 4,916 4,653 5.7 446 410 8.8
Gross Income 1,923 1,876 2.5 175 165 5.6
SG&A Expenses 1,296 1,292 0.3 118 114 3.4
Operating Income 626 583 7.4 57 52 10.2
Interest Expense 452 432 4.6 41 39 6.5
Interest Income (38) (6) 548.7 (3) (1) 587.3
Other Financial Expenses
(net) 206 67 206.4 19 6 213.0
Exchange Loss (Gain) (204) 64 -- (18) 5 --
Gain from Monet. Position (169) (131) 28.3 (15) (12) 30.4
Total Financing Cost 248 425 (41.8) 23 38 (40.1)
Other Expenses (Income),
net 33 60 (45.8) 3 5 (36.3)
Inc. (loss) bef. Tax & PSW 346 98 254.3 31 9 237.0
Income Tax and PSW 243 84 189.2 22 8 194.3
Net Inc. (loss) Cont.
Opns. 103 14 657.4 9 2 414.2
Income (loss)of Discont.
Oper. - (16) -- 0 (1) --
Income on disposal of
discontinued operations 48 - -- 4 - --
Extraordinary Items, Net - (114) -- - (10) --
Net Income (Loss) 151 (116) -- 14 (10) --
Net Income (loss) of Maj.
Int. 140 (73) -- 13 (6) --
Net Income (loss) of Min.
Int. 12 (43) -- 1 (4) --
January - September
INCOME STATEMENT Constant Pesos Nominal Dollars
2006 2005 % Var. 2006 2005 % Var.
Consolidated Net Sales 19,916 18,966 5.0 1,793 1,648 8.8
Cost of Sales 14,528 13,767 5.5 1,308 1,196 9.4
Gross Income 5,388 5,198 3.7 484 452 7.2
SG&A Expenses 3,884 3,929 (1.1) 349 341 2.6
Operating Income 1,505 1,270 18.5 135 111 21.4
Interest Expense 1,339 1,406 121 122 (1.0)
Interest Income (90) (104) (13.3) (8) (9) (8.0)
Other Financial Expenses
(net) 686 326 110.8 62 28 121.1
Exchange Loss (Gain) 316 (248) -- 27 (22) --
Gain from Monet. Position (287) (278) 3.1 (26) (24) 8.6
Total Financing Cost 1,964 1,101 78.3 176 95 85.1
Other Expenses (Income),
net 55 455 (88.0) 5 39 (87.4)
Inc. (loss) bef. Tax & PSW (513) (287) (79.0) (46) (23) (98.7)
Income Tax and PSW 383 (440) -- 35 (39) --
Net Inc. (loss) Cont. Opns. (896) 153 -- (81) 15 --
Income (loss) of Discont.
Oper. (29) (16) -- (2) (1) --
Income on disposal of
discontinued operations 515 - -- 45 - --
Extraordinary Items, Net - (114) -- - (10) --
Net Income (Loss) (410) 24 -- (39) 4 --
Net Income (loss) of Maj.
Int. (348) (134)(160.6) (33) (10) (221.4)
Net Income (loss) of Min.
Int. (62) 157 -- (6) 14 --
LTM
INCOME STATEMENT Constant Pesos Nominal Dollars
2006 2005 % Var. 2006 2005 % Var.
Consolidated Net Sales 26,224 25,083 4.5 2,357 2,164 8.9
Cost of Sales 19,016 18,193 4.5 1,710 1,570 8.9
Gross Income 7,208 6,889 4.6 647 595 8.9
SG&A Expenses 5,235 5,331 (1.8) 470 459 2.5
Operating Income 1,973 1,558 26.6 177 136 30.5
Interest Expense 1,824 1,865 (2.2) 165 160 2.9
Interest Income (149) (142) 5.4 (14) (12) 13.0
Other Financial Expenses
(net) 881 459 92.1 80 39 104.0
Exchange Loss (Gain) 168 (402) -- 14 (35) --
Gain from Monet. Position (440) (524) (16.0) (40) (45) (9.7)
Total Financing Cost 2,284 1,255 81.9 205 108 90.8
Other Expenses (Income),
net 23 796 (97.1) 2 68 (97.5)
Inc. (loss) bef. Tax & PSW (335) (493) (32.1) (30) (40) 24.4
Income Tax and PSW 380 (602) -- 34 (52) --
Net Inc. (loss) Cont. Opns. (715) 108 -- (65) 12 --
Income (loss) of Discont.
Oper. (10) 60 -- (1) 5 --
Income on disposal of
discontinued operations 515 - -- 45 - --
Extraordinary Items, Net (7) (114) (94.2) (1) (10) (94.0)
Net Income (Loss) (216) 54 -- (21) 7 --
Net Income (loss) of Maj.
Int. (163) (223) (26.9) (16) (17) 6.9
Net Income (loss) of Min.
Int. (54) 277 -- (5) 24 --
VITRO, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
As of September 30, (Million)
BALANCE SHEET Constant Pesos Nominal Dollars
2006 2005 % Var. 2006 2005 % Var.
Cash & Cash Equivalents 778 2,106 (63.0) 71 187 (62.1)
Trade Receivables 1,545 1,277 21.0 141 111 26.1
Inventories 3,640 4,057 (10.3) 331 357 (7.4)
Other Current Assets 2,187 2,524 (13.4) 199 224 (11.2)
Current Assets from Disc.
Operations - 1,023 -- - 91 --
Total Current Assets 8,150 10,986 (25.8) 741 971 (23.7)
Prop., Plant & Equipment 16,353 17,339 (5.7) 1,488 1,540 (3.4)
Deferred Assets 1,487 1,946 (23.6) 135 170 (20.4)
LT Assets from Disc.
Operations - 1,423 -- - 127 --
Other Long-Term Assets 1,168 1,306 (10.5) 106 116 (8.3)
Total Assets 27,159 32,999 (17.7) 2,470 2,924 (15.5)
Short-Term & Curr. Debt 5,406 3,413 58.4 492 302 62.7
Trade Payables 1,946 1,975 (1.5) 177 174 1.7
Other Current Liabilities 2,434 2,969 (18.0) 221 263 (15.7)
Current Liabilities from
Disc. Operations - 625 -- - 56 --
Total Curr. Liab. 9,787 8,982 9.0 890 795 12.0
Long-Term Debt 7,881 12,771 (38.3) 717 1,138 (37.0)
Other LT Liabilities 1,783 1,511 18.0 162 134 21.3
LT Liabilities from Disc.
Operations - 1,182 -- - 105 --
Total Liabilities 19,450 24,445 (20.4) 1,769 2,172 (18.5)
Majority interest 5,279 5,551 (4.9) 480 489 (1.8)
Minority Interest 2,430 3,003 (19.1) 221 263 (16.0)
Total Shar. Equity 7,709 8,554 (9.9) 701 752 (6.8)
FINANCIAL INDICATORS 3Q'06 3Q'05
Debt/EBITDA (LTM, times) 3.3 4.3
EBITDA/ Total Net Fin. Exp. (LTM, times) 1.6 1.7
Debt / (Debt + Equity) (times) 0.6 0.7
Debt/Equity (times) 1.7 1.9
Total Liab./Stockh. Equity (times) 2.5 2.9
Curr. Assets/Curr. Liab. (times) 0.8 1.2
Sales/Assets (times) 1.0 0.8
EPS (Ps$) * 0.47 (0.25)
EPADR (US$) * 0.13 (0.06)
* 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 22,468 21,673
VITRO, S.A. DE C.V. AND SUBSIDIARIES
SEGMENTED INFORMATION
FOR THE PERIODS, (MILLION)
Third Quarter
Constant Pesos Nominal Dollars
2006 2005 % 2006 2005 %
FLAT GLASS
Net Sales 3,152 3,270 -3.6% 286 287 -0.1%
Interd. Sales (0) 1 -- (0) 0 --
Con. Net Sales 3,152 3,269 -3.6% 286 287 -0.1%
Expts. 531 886 -40.1% 48 79 -39.1%
EBIT 141 169 -16.5% 13 15 -12.7%
Margin (1) 4.5% 5.2% 4.5% 5.1%
EBITDA 317 333 -4.8% 29 29 -1.6%
Margin (1) 10.1% 10.2% 10.1% 10.2%
Flat Glass Volumes
(Thousand m2B)(3)
Const + Auto 31,362 35,532 -11.7%
GLASS CONTAINERS
Net Sales 3,605 3,204 12.5% 327 284 15.2%
Interd. Sales 17 30 -43.8% 2 3 -42.6%
Con. Net Sales 3,588 3,174 13.0% 326 281 15.8%
Expts. 962 879 9.4% 87 77 13.5%
EBIT 506 424 19.4% 46 38 21.8%
Margin (1) 14.1% 13.3% 14.1% 13.4%
EBITDA 825 711 16.1% 75 63 18.3%
Margin (1) 23.0% 22.4% 23.0% 22.5%
Glass containers
volumes (MM Pieces)
Domestic 1,311 1,214 8.0%
Exports 340 313 8.7%
Total:Dom.+Exp. 1,651 1,527 8.1%
Soda Ash (Thousand
Tons) 155 150 3.4%
CONSOLIDATED (2)
Net Sales 6,856 6,561 4.5% 623 579 7.6%
Interd. Sales 17 32 -47.3% 2 3 -46.2%
Con. Net Sales 6,839 6,529 4.7% 621 576 7.9%
Expts. 1,493 1,765 -15.4% 135 156 -13.2%
EBIT 626 583 7.4% 57 52 10.2%
Margin (1) 9.2% 8.9% 9.2% 9.0%
EBITDA 1,154 1,068 8.1% 105 95 10.6%
Margin (1) 16.9% 16.4% 16.9% 16.5%
January - September
Constant Pesos Nominal Dollars
2006 2005 % 2006 2005 %
FLAT GLASS
Net Sales 9,652 9,646 0.1% 868 836 3.8%
Interd. Sales 0 2 -83.7% 0 0 -83.3%
Con. Net Sales 9,652 9,643 0.1% 868 836 3.8%
Expts. 1,855 2,609 -28.9% 168 228 -26.3%
EBIT 266 299 -11.1% 24 26 -8.7%
Margin (1) 2.8% 3.1% 2.7% 3.1%
EBITDA 779 824 -5.6% 70 72 -2.2%
Margin (1) 8.1% 8.5% 8.1% 8.6%
Flat Glass Volumes
(Thousand m2B)(3)
Const + Auto 98,682 101,716 -3.0%
GLASS CONTAINERS
Net Sales 10,040 9,043 11.0% 904 787 14.9%
Interd. Sales 63 108 -41.8% 6 9 -39.4%
Con. Net Sales 9,977 8,935 11.7% 899 778 15.5%
Expts. 2,882 2,543 13.4% 259 220 17.7%
EBIT 1,294 998 29.6% 116 87 32.7%
Margin (1) 13.0% 11.2% 12.9% 11.2%
EBITDA 2,258 1,908 18.4% 203 167 21.9%
Margin (1) 22.6% 21.3% 22.6% 21.4%
Glass containers
volumes (MM Pieces)
Domestic 3,656 3,313 10.4%
Exports 1,005 920 9.2%
Total:Dom.+Exp. 4,661 4,233 10.1%
Soda Ash (Thousand
Tons) 474 441 7.4%
CONSOLIDATED (2)
Net Sales 19,982 19,087 4.7% 1,799 1,658 8.5%
Interd. Sales 66 121 -45.7% 6 10 -43.4%
Con. Net Sales 19,916 18,966 5.0% 1,793 1,648 8.8%
Expts. 4,738 5,152 -8.0% 427 448 -4.7%
EBIT 1,505 1,270 18.5% 135 111 21.4%
Margin (1) 7.6% 6.7% 7.5% 6.7%
EBITDA 3,078 2,813 9.4% 277 245 12.9%
Margin (1) 15.5% 14.8% 15.5% 14.9%
Last Twelve Months
Constant Pesos Nominal Dollars
2006 2005 % 2006 2005 %
FLAT GLASS
Net Sales 12,958 12,812 1.1% 1,162 1,105 5.1%
Interd. Sales 0 2 -82.3% 0 0 -81.8%
Con. Net Sales 12,958 12,810 1.2% 1,162 1,105 5.1%
Expts. 2,632 3,338 -21.2% 239 289 -17.3%
EBIT 441 556 -20.7% 39 48 -18.0%
Margin (1) 3.4% 4.3% 3.4% 4.3%
EBITDA 1,116 1,278 -12.6% 100 110 -9.0%
Margin (1) 8.6% 10.0% 8.6% 10.0%
Flat Glass Volumes
(Thousand m2B)(3)
Const + Auto 135,468 139,068 -2.6%
GLASS CONTAINERS
Net Sales 12,964 11,822 9.7% 1,168 1,020 14.5%
Interd. Sales 87 162 -46.2% 8 14 -43.2%
Con. Net Sales 12,877 11,660 10.4% 1,160 1,007 15.3%
Expts. 3,665 3,264 12.3% 328 281 16.8%
EBIT 1,562 1,148 36.1% 140 100 40.4%
Margin (1) 12.1% 9.8% 12.1% 9.9%
EBITDA 2,862 2,478 15.5% 258 214 20.3%
Margin (1) 22.2% 21.2% 22.2% 21.3%
Glass containers
volumes (MM Pieces)
Domestic 4,723 4,352 8.5%
Exports 1,305 1,190 9.7%
Total:Dom.+Exp. 6,028 5,542 8.8%
CONSOLIDATED (2)
Net Sales 26,315 25,268 4.1% 2,365 2,180 8.5%
Interd. Sales 91 186 -50.8% 8 16 -48.0%
Con. Net Sales 26,224 25,083 4.5% 2,357 2,164 8.9%
Expts. 6,297 6,612 -4.8% 567 571 -0.6%
EBIT 1,973 1,558 26.6% 177 136 30.5%
Margin (1) 7.5% 6.2% 7.5% 6.3%
EBITDA 4,086 3,769 8.4% 368 326 12.9%
Margin (1) 15.6% 15.0% 15.6% 15.1%
(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 OF VENA AND SUBSIDIARIES, VITRO PACKAGING AND COMEGUA AND
SUBSIDIARIES
Cash Flow from Operations Analysis(1)
(Million)
YoY% YoY%
3Q'06 3Q'05 Change 9M'06 9M'05 Change
Nominal Dollars
EBITDA 75 63 18.3 203 166 21.9
Net Interest Expense(2) (42) (31) 35.8 (86) (70) 22.2
Capex (19) (9) 106.5 (50) (31) 60.2
Working Capital(3) (8) 9 -- (41) 4 --
Dividends - - -- (1) (2) (27.8)
Cash Taxes paid (28) (4) (119) (10) 1,071.7
Net Free Cash Flow (21) 28 -- (94) 57 --
LTM YoY%
2006 2005 Change
Nominal Dollars
EBITDA 257 214 20.3
Net Interest Expense(2) (101) (72) 40.8
Capex (71) (67) 6.2
Working Capital(3) (29) (20) 41.6
Dividends (1) (2) (27.8)
Cash Taxes paid (124) 6 --
Net Free Cash Flow (69) 59 --
(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)
VITRO ENVASES NORTEAMERICA, S.A. DE C.V., VITRO PACKAGING AND EMPRESAS
COMEGUA AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS, (MILLION)
Third Quarter
INCOME STATEMENT Constant Pesos Nominal Dollars
2006 2005 % Var. 2006 2005 % Var.
Consolidated Net
Sales 3,598 3,201 12.4 327 284 15.1
Cost of Sales 2,596 2,343 10.8 236 208 13.5
Gross Income 1,002 858 16.8 91 76 19.5
SG&A Expenses 497 435 14.3 45 39 17.2
Operating Income 505 423 19.5 46 38 21.8
Interest Expense 225 171 31.2 20 15 33.2
Interest Income (23) (19) (2) (2)
Other Financial
Expenses 170 (5) -- 15 (0) --
Exchange Loss
(Gain) (104) 31 -- (9) 3 --
Gain from Monet.
Position (68) (56) 21.1 (6) (5) 23.3
Total Financing Cost 201 122 65.0 18 11 69.8
Other Expenses
(Income), net 1 19 (97.0) 0 2 (96.9)
Inc. (loss) bef.
Tax & PSW 304 282 7.8 28 25 9.4
Income Tax and PSW 137 57 141.8 12 5 144.9
Net Inc. (loss)
Cont. Opns. 166 225 (26.0) 15 20 (24.9)
(Loss) on disposal
of discontinued
operations - - - -
Income (loss) of
Discont. Oper. (0) 0 -- (0) -
Extraordinary
Items, Net - (121) - (11)
Net Income (Loss) 166 103 61.0 15 9 63.2
EBITDA 824 710 16.2 75 63 18.3
January - September
INCOME STATEMENT Constant Pesos Nominal Dollars
2006 2005 % Var. 2006 2005 % Var.
Consolidated Net
Sales 10,010 9,018 11.0 902 785 14.9
Cost of Sales 7,354 6,782 8.4 663 590 12.4
Gross Income 2,656 2,236 18.8 239 195 22.5
SG&A Expenses 1,366 1,241 10.1 123 108 14.1
Operating Income 1,290 994 29.7 116 87 32.8
Interest Expense 630 541 16.4 57 47 21.0
Interest Income (81) (49) (7) (4) 71.8
Other Financial
Expenses 510 169 201.7 46 15 217.9
Exchange Loss (Gain) 135 (126) -- 12 (11) --
Gain from Monet.
Position (135) (124) 8.1 (12) (11) 13.4
Total Financing Cost 1,060 411 157.6 95 35 169.6
Other Expenses
(Income), net (64) 41 -- (5) 4 --
Inc. (loss) bef.
Tax & PSW 295 542 (45.5) 26 48 (46.4)
Income Tax and PSW 164 (23) -- 15 (2) --
Net Inc. (loss)
Cont. Opns. 131 565 (76.9) 11 50 (77.8)
(Loss) on disposal of
discontinued
operations - 0 -- - 0 --
Income (loss) of
Discont. Oper. 0 0 (95.8) - -
Extraordinary Items,
Net - (121) - (11)
Net Income (Loss) 131 443 (70.5) 11 39 (71.7)
EBITDA 2,255 1,904 18.4 203 166 21.9
LTM
INCOME STATEMENT Constant Pesos Nominal Dollars
2006 2005* % Var. 2006 2005* % Var.
Consolidated Net
Sales 12,916 11,769 9.7 1,164 1,016 14.6
Cost of Sales 9,515 8,950 6.3 858 772 11.1
Gross Income 3,401 2,820 20.6 306 244 25.5
SG&A Expenses 1,844 1,677 10.0 166 145 15.0
Operating Income 1,557 1,143 36.3 140 99 40.7
Interest Expense 865 702 23.2 78 61 29.4
Interest Income (111) (65) 72.1 (10) (6) 78.6
Other Financial
Expenses 595 220 4 170.54 19 187.1
Exchange Loss (Gain) 80 (195) -- 7 (17) --
Gain from Monet.
Position (207) (222) (6.9) (19) (19) (0.4)
Total Financing Cost 1,221 440 177.7 110 38 193.0
Other Expenses
(Income), net (40) 95 -- (3) 8 --
Inc. (loss) bef.
Tax & PSW 376 608 (38.1) 33 54 (38.8)
Income Tax and PSW 219 (20) -- 20 (2) --
Net Inc. (loss)
Cont. Opns. 158 628 (74.9) 13 55 (76.1)
(Loss) on disposal
of discontinued
operations - 0 -- - 0 --
Income (loss) of
Discont. Oper. (0) 0 -- (0) 0 --
Extraordinary
Items, Net - (121) - (11)
Net Income (Loss) 158 507 (68.9) 13 45 (70.3)
EBITDA 2,857 2,475 15.5 257 214 20.3
VITRO ENVASES NORTEAMERICA, S.A. DE C.V., VITRO PACKAGING AND EMPRESAS
COMEGUA AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
As of September 30, (Million)
BALANCE SHEET Constant Pesos Nominal Dollars
2006 2005* % Var. 2006 2005* % Var.
Cash & Cash
Equivalents 443 1,580 (72.0) 40 141 (71.4)
Trade Receivables 1,107 811 36.4 101 72 40.5
Inventories 1,700 1,582 7.5 155 140 10.5
Notes receivable
from affiliates 683 515 32.6 62 46 35.2
Other Current
Assets 1,562 961 62.5 142 87 64.0
Current Assets
from Disc.
Operations 0 0 79.7 0 - --
Total Current
Assets 5,495 5,450 0.8 500 485 3.1
Prop., Plant &
Equipment 7,817 8,343 (6.3) 711 742 (4.1)
Deferred Assets 544 707 (23.1) 49 63 (21.5)
LT Assets from
Disc. Operations (0) 0 -- (0) - --
Other Long-Term
Assets 109 64 70.5 10 6 75.2
Total Assets 13,965 14,564 (4.1) 1,270 1,295 (1.9)
Short-Term &
Curr. Debt 2,199 811 171.2 200 72 177.3
Notes payable to
affiliates 4 - -- 0 - --
Trade Payables 1,121 910 23.2 102 81 26.0
Other Current
Liabilities 1,597 1,895 (15.7) 145 169 (13.8)
Current
Liabilities
from Disc.
Operations 0 (0) -- 0 (0) --
Total Curr. Liab. 4,921 3,615 36.1 448 322 39.2
Long-Term Debt 4,605 5,678 (18.9) 419 506 (17.2)
Long-Term notes
payable to
affiliates (0) 392 (0) 35
Other LT
Liabilities 647 1,136 (43.0) 59 101 (41.7)
LT Liabilities
from Disc.
Operations 0 0 91.0 0 - --
Total Liabilities 10,173 10,821 (6.0) 925 964 (4.0)
Majority interest 3,038 2,971 2.2 276 264 4.8
Minority Interest 754 772 (2.3) 69 68 1.4
Total Shar. Equity 3,791 3,743 1.3 345 331 4.1
FINANCIAL INDICATORS 3Q'06 3Q'05
Debt/EBITDA (LTM, times) 2.4 2.8
EBITDA/ Total Net Fin. Exp. (LTM, times) 2.1 2.9
Debt/Equity (times) 1.8 1.9
Total Liab./Stockh. Equity (times) 2.7 2.9
Curr. Assets/Curr. Liab. (times) 1.1 1.5
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 September 30,2006)
FOR THE NINE MONTHS PERIOD
ENDED September 30
2006 2005
OPERATING ACTIVITIES:
Net Income (loss) from continuing
operations 131 565
Items that did not require
(generate) resources:
Depreciation and amortization 847 827
Amortization of debt issue costs 69 83
Provision for seniority premium
and pension 118 82
Write-off and loss on sale of
fixed assets (83) (0)
Market value of derivatives 127 (0)
Extraordinary Items - (121)
Deferred income tax and workers'
profit sharing (525) (521)
683 915
Decrease (Increase) in trade
receivables (273) 99
Decrease (Increase) in inventories (88) 74
Increase (Decrease) in trade
payables 209 37
Change in other current assets and
liabilities, net (1,317) 18
Employee retirement obligations (108) (93)
Resources generated from
operations (894) 1,050
FINANCING ACTIVITIES:
Bank loans 782 1,509
Notes payable to affiliates 2 (329)
Payment of dividends (13) (18)
Resources used in financing
activities 772 1,162
INVESTING ACTIVITIES:
Investment in land and buildings,
machinery and equipment, and
construction in progress (519) (358)
Sale of fixed assets 369 0
Investment in deferred charges (20) (135)
Notes receivable from affiliates (8) (493)
Long term receivables (14) (3)
Investment in subsidiaries (206) -
Resources used in investing
activities (399) (988)
Decrease in cash and cash
equivalents (521) 1,224
Balance at the beginning of year 964 356
Balance at the end of the period 443 1,580
