SAN PEDRO GARZA GARCIA, NUEVO LEON, Mexico, May 2
/PRNewswire-FirstCall/ -- Vitro S.A.B. de C.V. (BMV: VITROA; NYSE:
VTO) one of the world's largest producers and distributors of glass
products, today announced 1Q'07 unaudited results. Year over year
consolidated sales increased 6.0 percent and EBITDA rose 30.0
percent. The consolidated EBITDA margin increased 290 basis points
to 15.9 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 5.3 percent and
consolidated EBITDA increased 29.0 percent year over year.
FINANCIAL HIGHLIGHTS* 1Q'07 1Q'06 % Change Consolidated Net Sales
603 568 6.0% Flat Glass 282 295 -4.5% Glass Containers 312 266
17.6% Cost of Sales 433 425 1.8% Gross Income 170 143 18.4% Gross
Margins 28.1% 25.2% 2.9 pp SG&A 117 116 1.0% SG&A % of
sales 19.5% 20.5% -1 pp EBIT 52 27 93.8% EBIT Margins 8.7% 4.7% 4
pp EBITDA 96 74 30.0% Flat Glass 26 21 26.9% Glass Containers 68 52
31.8% EBITDA Margins 15.9% 13.0% 2.9 pp Net Income (40) (55) - Net
Income Margins -6.7% -9.7% +3 pp Total Debt 1,466 1,354 8.2% Short
Term Debt 147 460 -68.0% Long Term Debt 1,319 894 47.5% Average
life of debt 7.1 3.3 Cash & Cash Equivalents(1) 380 132 188.4%
Total Net Debt 1,086 1,222 -11.2% * 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. As of 1Q'07, the
restricted cash corresponds to US$151 million deposited in trusts
to repay debt. Federico Sada, Chief Executive Officer, commented,
"We began 2007 with yet another very solid quarter, one in which
Vitro has emerged as a transformed company following the successful
completion of our financial plan. On a comparable basis, we
achieved the highest consolidated EBITDA for a first quarter since
1Q'01." "We are pleased to welcome Enrique Osorio to our solid
management team as Chief Financial Officer. He brings to Vitro
broad experience and financial expertise. We look forward to
working together as we continue building the New Vitro," Mr. Sada
closed. Enrique Osorio, Chief Financial Officer, noted, "I am
delighted to join Vitro and to be a part of the process of taking
the company to the next step in its long term strategy. Vitro today
is a focused and solid company that has accomplished a great deal
and will continue building on its two strong glass businesses."
"Glass Containers continued reporting outstanding performance, with
comparable EBITDA at an all-time high for a first quarter. High
production volumes and capacity utilization, coupled with an
effective cost control program has translated into strong EBITDA
generation," mentioned Alfonso Gomez Palacio, President of the
Glass Containers business unit. Commenting on the Flat Glass
business unit, its President Hugo Lara said, "We are happy to see
27 percent YoY EBITDA growth at the unit. Going forward, we expect
Flat Glass' construction sales to grow at around 6 to 7 percent
which are likely to compensate for an anticipated slowdown at the
OEM auto markets." All figures provided in this announcement are in
accordance with Mexican Financial Reporting Standards (MFRS) issued
by the Mexican Board for Research and Development of Financial
Reporting Standards (CINIF), 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. Mar-07 Mar-06 Inflation in Mexico
Quarter 1.0% 0.9% LTM 4.2% 3.4% Inflation in USA Quarter 1.1% 0.6%
LTM 3.1% 3.6% Exchange Rate Closing 11.0322 10.8935 Devaluation
Quarter 2.0% 2.4% LTM 1.3% -2.5% This announcement contains
historical information, certain management's expectations and other
forward-looking information regarding Vitro, S.A.B. 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.B. 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, 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/ First Quarter 2007 results
Conference Call and Web cast Thursday, May 3, 2007 11:00 AM U.S.
EST - 10:00 A.M. U.S. CST (Monterrey time) A live web cast of the
conference call will be available to investors and the media at
http://www.vitro.com/. A replay of the web cast will be available
through the end of the day on June 3, 2007. For inquiries regarding
the conference call, please contact Maura Gedid of Breakstone Group
via telephone at (646) 452-2335, or via email at . DETAILED
FINANCIAL INFORMATION FOLLOWS: Consolidated Results Sales 3 EBIT
and EBITDA 4 Consolidated Financing Result 4 Taxes 5 Consolidated
Net Loss 6 Capital Expenditures 6 Consolidated Financial Position 6
Cash Flow 8 Key Developments 10 Flat Glass 12 Glass Containers 13
Consolidated Financial Statements 15 Segmented Information 16
Consolidated Results 1Q07 Highlights US$ Million SALES EBITDA YoY
YoY 1Q07 1Q06 Change 1Q07 1Q06 Change % $ $ % % $ $ % FLAT GLASS 47
282 295 -4.5 28 26 21 26.9 G. CONTAINERS 52 312 266 17.6 71 68 52
31.8 HOLDING (1,2) 1 8 8 8.6 1 1 1 2.7 TOTAL 100 603 568 6.0 100 96
74 30.0 CASH & CASH TOTAL DEBT(4) EQUIVALENTS(3) YoY YoY 1Q07
1Q06 Change 1Q07 1Q06 Change $ $ % $ $ % FLAT GLASS 37 189 -80.2 22
43 -50.1 G. CONTAINERS 186 584 -68.2 270 64 321.3 HOLDING (1,2)
1,243 581 113.9 89 24 263.5 TOTAL 1,466 1,354 8.2 380 132 188.4
TOTAL NET DEBT 1Q07 $ 1Q06 $ YoY Change % FLAT GLASS 16 145 -89.2
G. CONTAINERS -84 520 -116.2 HOLDING1,2 1,154 557 107.4 TOTAL 1,086
1,222 -11.2 (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. As of 1Q'07, the restricted cash corresponds to US$151
million deposited in trusts to repay debt. (4) Crisas' debt is not
included prior to 2Q'06 as it was considered a Discontinued
Operation. Sales Consolidated net sales for 1Q'07 increased 6.0
percent YoY to US$603 million from US$568 million last year. For
LTM 2007, consolidated net sales rose 6.8 percent to US$2,435
million from US$2,280 in LTM 2006. Glass Containers sales for the
quarter rose YoY by 17.6 percent while Flat Glass sales declined
4.5 percent over the same time period. During the quarter domestic,
export and foreign subsidiaries' sales grew 4.8 percent, 0.3
percent and 11.7 percent YoY respectively. 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 5.3 percent YoY. Table
1: Total Sales Table 1 Sales (Million) YoY% LTM YoY% 1Q'07 1Q'06
Change 2007 2006 Change Constant Pesos Total Consolidated Sales
6,691 6,426 4.1 27,377 26,259 4.3 Flat Glass 3,134 3,368 (7.0)
12,779 13,458 (5.0) Glass Containers 3,466 2,974 16.5 14,169 12,415
14.1 -- -- Domestic Sales 2,773 2,650 4.6 11,683 10,874 7.4 Export
Sales 1,558 1,572 (0.9) 6,242 6,762 (7.7) Foreign Subsidiaries
2,360 2,204 7.1 9,452 8,622 9.6 Nominal Dollars Total Consolidated
Sales 603 568 6.0 2,435 2,280 6.8 Flat Glass 282 295 (4.5) 1,136
1,161 (2.1) Glass Containers 312 266 17.6 1,261 1,085 16.2 -- --
Domestic Sales 250 239 4.8 1,040 956 8.8 Export Sales 140 140 0.3
556 590 (5.8) Foreign Subsidiaries 212 190 11.7 839 733 14.4 %
Foreign Currency Sales* / Total Sales 58% 58% 0.4pp 57% 58% -0.8pp
% Export Sales / Total Sales 23% 25% -1.3pp 23% 26% -3.1pp *
Exports + Foreign Subsidiaries EBIT and EBITDA Consolidated EBIT
for the quarter increased 93.8 percent YoY to US$52 million from
US$27 million last year. EBIT margin significantly increased 4
percentage points to 8.7 percent. On a LTM basis, consolidated EBIT
increased 29.6 percent to US$206 million from US$159 million in LTM
2006. During this same period of time, EBIT margin increased 1.4
percentage points to 8.4 percent. EBIT for the quarter at Glass
Containers increased by 66.8 percent YoY, while at Flat Glass EBIT
rose 201.6 percent. On a comparable basis, Glass Containers EBIT,
excluding VIPASA, increased 63 percent YoY while Flat Glass EBIT,
excluding Quimica M, increased 215 percent YoY. Consolidated EBITDA
for the quarter increased 30.0 percent to US$96 million from US$74
million in 1Q'06. The EBITDA margin increased 2.9 percentage points
YoY to 15.9 percent. On a comparable basis, excluding the
divestiture of Quimica M and the acquisition of VIPASA,
consolidated EBITDA for the quarter increased 29 percent YoY. On a
LTM basis, consolidated EBITDA increased 14.7 percent to US$393
million from US$343 million in LTM 2006. During the quarter, EBITDA
increased 26.9 percent YoY to US$26 million at Flat Glass. EBITDA
at Glass Containers rose to US$68 million or 31.8 percent YoY. On a
comparable basis, excluding Quimica M, EBITDA for Flat Glass during
the quarter increased 31 percent YoY while EBITDA for Glass
Containers, excluding VIPASA, increased 29 percent YoY. Glass
Containers was the major EBITDA contributor for the quarter and for
LTM 2007. The Company's expense reduction effort continued to
benefit results during this quarter, SG&A as percentage of
sales was reduced by 100 basis points compared with 1Q'06. Table 2:
EBIT and EBITDA Table 2 EBIT and EBITDA (Million) YoY% LTM YoY%
1Q'07 1Q'06 Change 2007 2006 Change Constant Pesos Consolidated
EBIT 580 309 87.8 2,320 1,834 26.5 Margin 8.7% 4.8% 3.9 pp 8.5%
7.0% 1.5 pp Flat Glass 153 58 165.6 486 498 (2.5) Glass Containers
448 272 64.8 1,985 1,358 46.2 Consolidated EBITDA 1,064 828 28.4
4,437 3,943 12.5 Margin 15.9% 12.9% 3 pp 16.2% 15.0% 1.2 pp Flat
Glass 294 239 23.0 1,154 1,197 (3.6) Glass Containers 757 577 31.2
3,291 2,623 25.5 Nominal Dollars Consolidated EBIT 52 27 93.8 206
159 29.6 Margin 8.7% 4.7% 4 pp 8.4% 7.0% 1.4 pp Flat Glass 14 5
201.6 43 42 2.7 Glass Containers 40 24 66.8 176 118 48.8
Consolidated EBITDA 96 74 30.0 393 343 14.7 Margin 15.9% 13.0% 2.9
pp 16.2% 15.0% 1.2 pp Flat Glass 26 21 26.9 102 103 (0.5) Glass
Containers 68 52 31.8 292 229 27.3 Consolidated Financing Result
Consolidated financing result for the quarter decreased 37.1
percent YoY to US$47 million compared with US$74 million during
1Q'06. This was primarily driven by lower other financial expenses
of US$4 million compared with US$27 million in 1Q'06 as result of a
higher value in derivative transactions. This effect was coupled
with a lower non-cash foreign exchange loss of US$14 million
compared with US$18 million during 1Q'06. On a LTM basis, total
consolidated financing result increased to US$166 million from
US$152 million due to a non-cash foreign-exchange loss of US$13
million compared with a non-cash foreign-exchange gain of US$19
million during last year. On a LTM basis, the Mexican peso
depreciated by 1.3 percent compared with a 2.5 percent appreciation
in the same period last year. In addition, a US$13 million decrease
in Other Financial Expenses mainly due to higher value in
derivative transactions during LTM 2007, lower interest expense of
US$158 million compared with US$164 million during LTM 2006 and a
slight increase in interest income partially compensated the above
mentioned effect. Table 3: Total Financing Results Table 3 Total
Financing Results (Million) YoY% LTM YoY% 1Q'07 1Q'06 Change 2007
2006 Change Constant Pesos Interest Expense (477) (457) 4.3 (1,781)
(1,869) (4.7) Interest Income 43 29 47.0 144 130 11.3 Other
Financial Expenses* (52) (298) (82.6) (544) (670) (18.7) Foreign
Exchange Loss (157) (216) (27.4) (159) 219 -- Monetary Position
(Loss) 116 109 6.0 435 467 (6.8) Total Financing Results (526)
(833) (36.8) (1,905) (1,724) 10.5 Nominal Dollars Interest Expense
(43) (41) 4.4 (158) (164) (3.6) Interest Income 4 3 49.9 13 11 14.2
Other Financial Expenses* (4) (27) (84.9) (47) (60) (21.1) Foreign
Exchange Loss (14) (18) (24.3) (13) 19 -- Monetary Position (Loss)
10 10 4.4 39 41 (5.0) Total Financing Results (47) (74) (37.1)
(166) (152) 9.2 * Includes derivative transactions and interest
related to factoring transactions Taxes Total Taxes decreased from
an expense of US$13 million in 1Q'06 to an expense of US$6 million
for this quarter. During 1Q'06 the Company decided to cancel an
account receivable corresponding to a tax on assets that we were
litigating against the Mexican Tax Authorities. Accrued income tax
which includes tax on assets increased from US$3 million during
1Q'06 to US$5 million in 1Q'07 due to the tax reform in 2007 which
eliminates the deduction of liabilities to determine the tax on
assets basis. Table 4: Taxes Table 4 Taxes (Million) YoY% LTM YoY%
1Q'07 1Q'06 Change 2007 2006 Change Constant Pesos Accrued Income
Tax 58 38 52.9 191 37 420.1 Deferred Income Tax (gain) 12 113
(89.3) (53) (277) (80.8) Total Income Tax 70 151 (53.4) 138 (240)
-- Nominal Dollars Accrued Income Tax 5 3 61.9 17 3 463.1 Deferred
Income Tax (gain) 1 10 (87.5) (2) (24) (91.5) Total Income Tax 6 13
(51.1) 15 (21) -- Consolidated Net Loss During the quarter the
Company recorded a consolidated net loss of US$40 million compared
to a net loss of US$55 million during the same quarter last year.
This variation is mainly the result of higher EBIT of US$52 million
compared with US$27 million in first quarter last year as well as a
US$27 million decline in total financing result mainly driven by
lower other financial expenses of US$4 million compared with US$27
million in 1Q'06 as result of higher value in derivative
transactions. In addition, lower income tax during 1Q'07 partially
compensated other expenses of US$39 million, associated with
prepayment fees and other expenses related to the debt refinancing
completed at the beginning of year 2007, compared to other income
of US$5 million in the same quarter last year. Capital Expenditures
(CAPEX) Capital expenditures for the quarter totaled US$53 million,
compared with US$21 million in 1Q'06. Glass Containers represented
93 percent of total capex consumption and included investment in a
new glass production line, major furnace repairs, the transfer of
Vidriera Mexico's ("Vimex") facilities and maintenance. Flat Glass
accounted for 6 percent and was mainly invested in maintenance.
Consolidated Financial Position Net debt, which is calculated by
deducting cash and cash equivalents as well as restricted cash
accounted for in current and other long term assets, increased QoQ
by US$58 million to US$1,086, mainly due to the cost of the
refinancing done during the quarter. On a YoY comparison, net debt
decreased US$136 million. As of 1Q'07, the Company had a cash
balance of US$380 million, of which US$229 million was recorded as
cash and cash equivalents and US$151 million was classified as
current and other long term assets. The US$151 million is
restricted cash, which corresponds to cash deposited in trusts to
repay debt, recorded at Glass Containers. Consolidated gross debt
as of March 31, 2007 totaled US$1,466 million, a QoQ increase of
US$325 million and a YoY increase of US$112 million. As of 1Q'07,
consolidated gross debt includes VENA's Euro Commercial Paper
(US$110 million) as outstanding since it will be prepaid in May 9,
2007. In addition, 1Q'07 consolidated long-term debt includes US$30
million associated with the covenant defeasance of the Senior Notes
due 2011 at VENA. Table 5 Debt Indicators (Million dollars; except
as indicated) 1Q'07 4Q'06 3Q'06 2Q'06 1Q'06 Interest Coverage
(EBITDA/ Total Net Financial Exp.) (Times) LTM 2.0 1.7 1.6 1.6 1.6
Leverage (Total Debt / EBITDA) (Times) LTM(1) 3.6 3.0 3.3 3.8 3.9
(Total Net Debt / EBITDA) (Times) LTM 2.7 2.7 3.1 3.3 3.6 Total
Debt(2) 1,466 1,141 1,209 1,297 1,354 Short-Term Debt(3) 147 423
492 580 460 Long-Term Debt(4) 1,319 718 717 717 894 Cash and
Equivalents(5) 380 113 77 148 132 Total Net Debt 1,086 1,027 1,132
1,149 1,222 Currency Mix (%) dlls&Euros/Pesos / UDI's 96/2/2
94/6/0 90/6/4 90/7/3 87/7/7 (1) Total Debt / EBITDA Ratio would be
3.5 times when debt referred in notes (3) and (4) is not
considered. (2) Crisa's debt is not included prior to 2Q'06 as it
was considered a Discontinued Operation (3) 1Q'07 short term debt
includes VENA's Euro Commercial Paper (US$110 million) which will
be prepaid in May 9, 2007. The required cash was placed in a trust
for such purpose and accounted for restricted cash. (4) 1Q'07 long
term debt includes US$30 million associated with the covenant
defeasance of the Senior Notes due 2011 at VENA. The required cash
is also recorded as restricted cash. On July 23, 2008 the
restricted cash will be freed from the trust and will be used to
pay down the outstanding balance. (5) 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. As of 1Q'07, the restricted cash
corresponds to US$151 million deposited in trusts to repay debt
(see notes 3 and 4). -- The Company's average life of debt as of
1Q'07 was 7.1 years compared with 3.3 years for 1Q'06. -- Short
term debt as of March 31, 2007, decreased by US$313 million to 10
percent as a percentage of total debt, compared with 34 percent in
1Q'06. -- As of March 31, 2007 Vitro had an aggregate of US$137
million in off- balance sheet financing related to sales of
receivables and receivable securitization programs. Flat Glass
recorded US$77 million and Glass Containers recorded US$60 million.
-- 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, decreased by US$180 million to US$4 million from
US$184 million as of December 31, 2006. -- Maturities for 2007
include VENA's Euro Commercial Paper (US$110 million) which will be
prepaid in May 9, 2007 (the required cash is placed in a trust for
such purpose and accounted as restricted cash) and Credit
Facilities at the subsidiary level. -- Maturities from 2008 and
thereafter include, among others, long-term "Certificados
Bursatiles" and the Senior Notes due in 2012, Senior Notes due in
2013 and Senior Notes due in 2017 at the Holding Company level.
Cash Flow Net free cash flow for the quarter increased to US$2
million compared to negative US$25 million in 1Q'06. This was the
result of lower Net Interest Expense, higher EBITDA and a working
capital recovery during the quarter. The above mentioned factors
more than compensated increased capex needs, cash taxes paid by our
foreign subsidiaries and cash tax on assets due to the Mexican tax
reform in 2007. On a LTM basis, the Company recorded a free cash
flow of US$43 million compared with US$48 million in LTM 2006. This
result was mainly caused by higher capex requirements and cash
taxes paid. Higher EBITDA and lower Net Interest Expense helped to
partially compensate the above mentioned factors. Table 6: Cash
Flow Analysis Table 6 Cash Flow from Operations Analysis(1)
(Million) YoY% LTM YoY% 1Q'07 1Q'06 Change 2007 2006 Change
Constant Pesos EBITDA 1,064 828 28.4 4,437 3,943 12.5 Net Interest
Expense(2),(3) (340) (587) (42.2) (2,196) (2,248) (2.3) Capex (587)
(232) 153.3 (1,571) (1,092) 43.9 Working Capital(4) 6 (371) -- 269
334 (19.3) Dividends (28) (46) (40.0) (140) (218) (35.9) Cash Taxes
(paid) recovered (90) 143 -- (307) (137) 124.9 Net Free Cash Flow
25 (265) -- 493 583 (15.5) Nominal Dollars EBITDA 96 74 30.0 393
343 14.7 Net Interest Expense(2),(3) (31) (53) (42.2) (192) (198)
(2.8) Capex (53) (21) 155.4 (140) (95) 46.8 Working Capital(4) 0
(33) - 21 28 (25.3) Dividends (3) (4) (36.5) (12) (18) (34.5) Cash
Taxes (paid) recovered (8) 13 -- (27) (12) 131.9 Net Free Cash Flow
2 (25) -- 43 48 (9.9) (1) This statement is a Cash Flow statement
and it does not represent a Statement of Changes in Financial
Position according with the Mexican Financial Reporting Standards
(MFRS) (2) Includes derivative transactions, and other financial
expenses and products. (3) 1Q'07 does not include additional
interests and transaction fees associated with the debt refinancing
completed at the beginning of year 2007. (4) Includes: Clients,
inventories, suppliers, other current assets and liabilities, IVA
(Value Added Tax) and ISCAS taxes (Salary Special Tax) Key
Developments Organizational Changes in Vitro On March 29, 2007 the
Company announced that with the completion of Vitro's financial
restructuring, Alvaro Rodriguez, Chief Financial Office, was
leaving the Company to assume new personal and professional
challenges. Consistent with Alvaro's planned succession program and
the objective to continue strengthening finances as outlined by
Vitro's CEO and the Board of Directors, the Company designated
Enrique Osorio as Chief Financial Officer. Enrique Osorio graduated
in 1974 as CPA at the Instituto Tecnologico y de Estudios
Superiores of Monterrey (ITESM). Since then, he has been involved
in the finance area and served as Chief Financial Officer at Savia
S.A. de C.V. and Seminis Inc. in California. At Seminis, he
participated in the Company's financial and operating turnaround,
including the restructuring of bank debt. He was involved in merger
and acquisition activities as well as investor relations and
financing activities. He served as Treasurer at Cigarrera La
Moderna. At Grupo Alfa, he participated in the debt restructuring,
financing and investor relations areas for 13 years. Enrique has
served as President of the Board of several financial funds
including Vecto Divisas S.A. de C.V.; he participated as a member
of the board of Xella Mexicana, a German - Mexican investment
company. He was a member of the Board of Desarrollos Comerciales y
Habitacionales de Vallarta S de RL among other operating and
services companies, and has actively participated in financing,
acquisitions and merger activities during his career. Enrique will
continue to pursue Vitro's plans to improve profitability and
reinforce cost reduction and investment discipline efforts to
ensure value creation for its investors. In announcing this
organizational change, Federico Sada reiterated Vitro's Executive
Committee commitment to keep working as a team to deliver results
to those who participate in Vitro's value chain, its shareholders,
staff, and communities in which its operates. Vitro Announces
Successful US$1.0 billion Bond Offering On January 25, 2007 the
Company announced it had successfully priced its previously
anticipated debt offering, upsized from US$750 million to US$1.0
billion of senior unsecured notes (the "Notes") principally to
refinance existing third-party debt at the Vitro holding company
level, substantially all of the third-party debt at its subsidiary
Vitro Envases Norteamerica, S.A. de C.V. ("VENA") and certain
third-party debt at its subsidiary Vimexico, S.A. de C.V.
("Vimexico"). The Notes were issued in two tranches: US$700MM of
senior unsecured notes due February 1, 2017 callable after year
2012, at a coupon of 9.125 percent and US$300MM of senior unsecured
notes due February 1, 2012, non-callable for life, at a coupon of
8.625 percent. The Notes will pay interest semiannually and will
receive guarantees from VENA and its wholly- owned subsidiaries and
Vimexico and its wholly-owned subsidiaries. The Notes offering
closed on February 1, 2007. The Notes offering was made to
qualified institutional buyers in the United States in reliance on
Rule 144A under the Securities Act of 1933, as amended and to
non-U.S. persons outside the United States in accordance with
Regulation S under the Securities Act of 1933. As previously
announced on January 10, 2007, concurrently with the Notes
offering, VENA launched an offer to purchase for cash (the "Tender
Offer") any and all of its outstanding 10.75 percent senior secured
guaranteed notes due 2011 (the "2011 Notes") and a solicitation of
consents (the "Consent Solicitation") from the holders of the 2011
Notes. Pursuant to the terms of the Tender Offer and Consent
Solicitation, on January 24, 2007 (the "Consent Time"), 87.6
percent of the aggregate principal amount of the 2011 Notes had
been tendered. The Tender Offer expired on February 7, 2007. Vitro
Cristalglass Inaugurates Furnace Capable of Tempering Largest
Dimension Glass Sheets in Spain On February 7, 2007 Vitro
Cristalglass, Vitro's Flat Glass subsidiary in Europe, held a
ceremony to celebrate the inauguration and start-up of its new
furnace in the La Rozada facility, located in the vicinity of
Villadecanes, Leon with the capacity to temper the largest
dimension laminated glass sheets on the Spanish Peninsula and only
the third-largest in Europe. In addition to the new temper and
thermo hardening furnace, the third that Vitro Cristalglass has
installed in the La Rozada facility, a total reorganization of the
installation was undertaken to speed up processes that will enable
a more efficient response to our valuable customer needs, the end
purpose of our existence. With a factory greater than 40,500 square
meters on a property of 62,000 square meters, La Rozada is
considered the largest glass processing complex in Europe. Vitro
Honored by General Motors as a 2006 Supplier of the Year On April
11, 2007 the Company announced it was presented the General Motors
2006 Supplier of the Year award for its overall business
performance in providing GM with world-class parts and services.
The 15th annual award - themed the "Best of the Best" -- was given
during ceremonies Saturday, March 31 at the JW Marriott Orlando
Grande Lakes in Orlando, Fla. The GM Supplier of the Year award
began as a global program in 1992. Winners are selected by a global
team of executives from purchasing, engineering, manufacturing and
logistics who base their decisions on supplier performance in
quality, service, technology and price. This year, General Motors
honored 89 suppliers for their outstanding performance throughout
2006. Vitro's Flat Glass business unit is dedicated to manufacture
and distribution of float glass for the automotive and construction
industry and is one of the world leading companies in these
segments. Flat Glass (47 percent of LTM 2007 Consolidated Sales)
Sales Flat Glass sales for the quarter decreased 4.5 percent YoY to
US$282 million from US$295 million. On a comparable basis,
excluding Quimica M which was divested in March 2006, sales
decreased 3.6 percent YoY. Domestic sales decreased 13.0 percent
YoY, as result of lower automotive and construction-related
volumes. Construction-related volumes declined 19 percent YoY while
the prices increased 4 percent YoY. Export sales decreased 12.0
percent YoY mainly due to lower automotive volumes. This effect was
partially compensated by an 8 percent increase in
construction-related volumes coupled with an improved price mix as
the Company continued to focus on inventory reduction. Automotive
sales decreased 8.6 percent YoY driven by a decline in domestic and
export volumes in the Original Equipment Manufacturer ("OEM")
business line due to a slow down in purchases from one of our main
clients. The available capacity was used to supply both domestic
and export Auto Glass Replacement ("AGR") markets. During this
quarter AGR sales increased 11 percent YoY. Sales from foreign
subsidiaries continued an upward trend, increasing 2.4 percent YoY
to US$164 million from US$160 million. Sales at Vitro Cristalglass,
the Spanish subsidiary, increased 34.6 percent YoY driven by a
stronger demand of more value added products (improved product mix)
from the construction market. Sales at Vitro Colombia increased
20.1 percent compared with the same quarter last year due to strong
demand from the Venezuelan and Ecuadorian markets. EBIT &
EBITDA EBIT increased 201.6 percent YoY to US$14 million from US$5
million, while EBITDA increased 26.9 percent to US$26 million from
US$21 million. During the same period, EBIT and EBITDA margins
increased 3.4 and 2.3 percentage points respectively. During the
quarter, on a comparable basis, excluding Quimica M, Flat Glass
EBIT increased 215 percent YoY and EBITDA increased 31 percent. On
a YoY comparison, a better product mix in the Construction business
line, improved production efficiency and stabilized prices in the
domestic construction market had a positive impact on the EBIT and
EBITDA generation. Robust EBITDA generation from Vitro America,
Vitro Cristalglass and Vitro Colombia which grew 54.9 percent, 81.8
percent and 11.3 percent YoY, respectively also contributed to
increase the EBITDA of this Business Unit. Table 7: Flat Glass
Table 7 Flat Glass (Million) YoY% LTM YoY% 1Q'07 1Q'06 Change 2007
2006 Change Constant Pesos Consolidated Net sales 3,134 3,368 (7.0)
12,779 13,458 (5.0) Net Sales Domestic Sales 696 811 (14.2) 3,093
2,929 5.6 Exports 611 693 (11.8) 2,316 3,311 (30.1) Foreign
Subsidiaries 1,828 1,865 (2.0) 7,369 7,218 2.1 EBIT 153 58 165.6
486 498 (2.5) EBITDA 294 239 23.0 1,154 1,197 (3.6) EBIT Margin
4.9% 1.7% 3.2 pp 3.8% 3.7% 0.1 pp EBITDA Margin 9.4% 7.1% 2.3 pp
9.0% 8.9% 0.1 pp Nominal Dollars Consolidated Net sales 282 295
(4.5) 1,136 1,161 (2.1) Domestic Sales 63 73 (13.0) 279 260 7.5
Export Sales 55 63 (12.0) 205 290 (29.3) Foreign Subsidiaries 164
160 2.4 652 611 6.7 EBIT 14 5 201.6 43 42 2.7 EBITDA 26 21 26.9 102
103 (0.5) EBIT Margin 4.9% 1.5% 3.4 pp 3.8% 3.7% 0.1 pp EBITDA
Margin 9.4% 7.1% 2.3 pp 9.0% 8.9% 0.1 pp Volumes Flat Glass
(Thousands of m2R)(2) 30,869 34,180 (9.7) 125,954 140,379 (10.3)
Capacity utilization Flat Glass furnaces(1) 109% 84% 25 pp Flat
Glass auto 69% 88% -19 pp (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) m2R = Reduced
Squared Meters Glass Containers (52 percent of 2007 Consolidated
Sales) Sales Sales increased 17.6 percent YoY to US$312 million
from US$266 million. On a comparable basis, excluding VIPASA, which
was acquired in April 2006, sales increased 15 percent YoY. The
main drivers behind the 12.9 percent YoY increase in domestic sales
were higher volumes in the beer, food and wine & liquor
segments coupled with an overall improved price mix. Export sales
grew 10.3 percent YoY mainly due to a rise in sales at the CFT
(Cosmetics, Fragrances & Toiletries) and wine & liquor
business lines driven by both higher volumes and better product
mix. Sales from Glass Containers' foreign subsidiaries rose 61.7
percent YoY, reflecting the acquisition of VIPASA coupled with an
increased demand in Central and South America. EBIT and EBITDA EBIT
for the quarter increased 66.8 percent YoY to US$40 million from
US$24 million in 1Q'06. EBITDA for the same period rose 31.8
percent to US$68 million from US$52 million. During the quarter, on
a comparable basis, excluding VIPASA, Glass Containers EBIT
increased 63 percent YoY and EBITDA rose 29 percent. EBITDA growth
continued to be driven by higher sales and improved production
efficiencies which optimized fixed costs absorption as well as cost
reduction initiatives and better product mix. These factors more
than offset superior raw materials and freight costs as well as
higher maintenance costs associated with an increased capacity
utilization of both furnaces and production lines. EBITDA from
Mexican glass containers operations which is VENA's core business
and represents approximately 80 percent of total EBITDA, rose 33.8
percent YoY. The Company's cost reduction efforts continued to
benefit results this quarter. On a comparable basis, COGS as
percentage of sales decreased by almost 340 basis points compared
to 1Q'06. Table 8: Glass Containers Table 8 Glass Containers
(Million) YoY% LTM YoY% 1Q'07 1Q'06 Change 2007 2006 Change
Constant Pesos Consolidated Net sales 3,466 2,974 16.5 14,169
12,415 14.1 Net Sales Domestic Sales 1,987 1,756 13.1 8,159 7,560
7.9 Exports 947 879 7.7 3,926 3,451 13.8 Foreign Subsidiaries 533
339 57.1 2,083 1,404 48.3 EBIT 448 272 64.8 1,985 1,358 46.2 EBITDA
757 577 31.2 3,291 2,623 25.5 EBIT Margin 12.9% 9.1% 3.8 pp 14.0%
10.9% 3.1 pp EBITDA Margin 21.8% 19.4% 2.4 pp 23.2% 21.1% 2.1 pp
Nominal Dollars Consolidated Net sales 312 266 17.6 1,261 1,085
16.2 Domestic Sales 179 159 12.9 723 663 9.1 Export Sales 85 77
10.3 351 300 17.0 Foreign Subsidiaries 48 30 61.7 187 122 53.1 EBIT
40 24 66.8 176 118 48.8 EBITDA 68 52 31.8 292 229 27.3 EBIT Margin
12.9% 9.1% 3.8 pp 14.0% 10.9% 3.1 pp EBITDA Margin 21.8% 19.5% 2.3
pp 23.1% 21.1% 2 pp Glass Containers Domestic (Millions of Units)
1,226 1,105 11.0 5,010 4,585 9.3 Exports (Millions of Units) 308
305 1.0 1,346 1,237 8.8 Total 1,535 1,410 8.8 6,356 5,822 9.2
Capacity utilization (furnaces) 99% 98% 1 pp Capacity utilization
(production lines) 91% 84% 7 pp Alcali (Thousands Tons sold)* 157
154 1.7 - - -- * Includes sodium carbonate, sodium bicarbonate,
sodium chlorine, calcium chlorine CONSOLIDATED VITRO, S.A.B. DE
C.V. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE
PERIODS, (MILLION) First Quarter INCOME STATEMENT Constant Pesos
Nominal Dollars Item 2007 2006 % Var. 2007 2006 % Var. 1
Consolidated Net Sales 6,691 6,426 4.1 603 568 6.0 2 Cost of Sales
4,807 4,801 0.1 433 425 1.8 3 Gross Income 1,884 1,625 15.9 170 143
18.4 4 SG&A Expenses 1,304 1,317 (0.9) 117 116 1.0 5 Operating
Income 580 309 87.8 52 27 93.8 6 Other Expenses (Income), net 434
(62) -- 39 (5) -- 7 Interest Expense (477) (457) 4.3 (43) (41) 4.4
8 Interest Income 43 29 47.0 4 3 49.9 9 Other Financial Expenses
(net) (52) (298) (82.6) (4) (27) (84.9) 10 Exchange Loss (157)
(216) (27.4) (14) (18) (24.3) 11 Gain from Monet. Position 116 109
6.0 10 10 4.4 12 Total Financing Result (526) (833) (36.8) (47)
(74) (37.1) 13 Inc. (loss) bef. Tax (381) (462) 17.5 (34) (42) 19.3
14 Income Tax 70 151 (53.4) 6 13 (51.1) 15 Net Inc. (loss) Cont.
Opns. (451) (612) 26.3 (40) (55) 26.9 16 Income (loss)of Discont.
Oper. - 1 -- - 0 -- 17 Income on disposal of discontinued
operations - - -- - 0 -- 18 Extraordinary Items, Net - - -- - - --
19 Net Income (Loss) (451) (611) 26.2 (40) (55) 26.8 20 Net Income
(loss) of Maj. Int. (481) (597) 19.4 (43) (54) 19.7 21 Net Income
(loss) of Min. Int. 30 (14) -- 3 (1) -- Last Twelve Months INCOME
STATEMENT Constant Pesos Nominal Dollars Item 2007 2006 % Var. 2007
2006 % Var. 1 Consolidated Net Sales 27,377 26,259 4.3 2,435 2,280
6.8 2 Cost of Sales 19,682 19,044 3.4 1,751 1,654 5.9 3 Gross
Income 7,695 7,215 6.7 684 626 9.4 4 SG&A Expenses 5,375 5,381
(0.1) 479 467 2.5 5 Operating Income 2,320 1,834 26.5 206 159 29.6
6 Other Expenses (Income), net 275 344 (20.0) 24 29 (16.9) 7
Interest Expense (1,781) (1,869) (4.7) (158) (164) (3.6) 8 Interest
Income 144 130 11.3 13 11 14.2 9 Other Financial Expenses (net)
(544) (670) (18.7) (47) (60) (21.1) 10 Exchange Loss (159) 219 --
(13) 19 -- 11 Gain from Monet. Position 435 467 (6.8) 39 41 (5.0)
12 Total Financing Result (1,905) (1,724) 10.5 (166) (152) 9.2 13
Inc. (loss) bef. Tax 139 (234) -- 16 (22) -- 14 Income Tax 138
(240) -- 15 (21) -- 15 Net Inc. (loss) Cont. Opns. 1 6 (79.7) 1 (2)
-- 16 Income (loss)of Discont. Oper. (31) 15 -- (3) 1 -- 17 Income
on disposal of discontinued operations 468 - -- 40 0 -- 18
Extraordinary Items, Net - (120) -- - (10) -- 19 Net Income (Loss)
438 (100) -- 38 (11) -- 20 Net Income (loss) of Maj. Int. 505 (271)
-- 44 (25) -- 21 Net Income (loss) of Min. Int. (67) 171 -- (6) 14
-- VITRO, S.A.B. DE C.V. AND SUBSIDIARIES CONSOLIDATED FINANCIAL
STATEMENTS As of March 31, (Million) Constant Pesos Nominal Dollars
Item BALANCE SHEET 2007 2006 % Var. 2007 2006 % Var. 22 Cash &
Cash Equivalents 2,524 1,027 145.8 229 90 153.3 23 Trade
Receivables 1,353 1,320 2.6 123 114 7.6 24 Inventories 3,879 3,965
(2.2) 352 346 1.5 25 Other Current Assets 3,721 2,160 72.2 337 190
77.6 26 Current Assets from Disc. Operations - 879 -- - 77 -- 27
Total Current Assets 11,478 9,351 22.7 1,040 818 27.2 28 Prop.,
Plant & Equipment 15,836 17,383 (8.9) 1,435 1,527 (6.0) 29
Deferred Assets 2,269 2,562 (11.4) 206 221 (6.9) 30 LT Assets from
Disc. Operations - 1,187 -- - 105 -- 31 Other Long-Term Assets 680
387 75.7 62 34 82.1 32 Total Assets 30,263 30,870 (2.0) 2,743 2,705
1.4 33 Short-Term & Curr. Debt 1,621 5,237 (69.1) 147 460
(68.0) 34 Trade Payables 1,951 1,908 2.2 177 166 6.5 35 Other
Current Liabilities 2,296 2,524 (9.1) 208 222 (6.2) 36 Current
Liabilities from Disc. Operations - 467 -- - 41 -- 37 Total Curr.
Liab. 5,867 10,136 (42.1) 532 889 (40.2) 38 Long-Term Debt 14,550
10,155 43.3 1,319 894 47.5 39 Other LT Liabilities 1,670 1,507 10.9
151 131 15.5 40 LT Liabilities from Disc. Operations - 800 -- - 70
-- 41 Total Liabilities 22,088 22,598 (2.3) 2,002 1,985 0.9 42
Majority interest 6,394 5,381 18.8 579 471 23.1 43 Minority
Interest 1,782 2,891 (38.4) 162 250 (35.1) 44 Total Shar. Equity
8,176 8,272 (1.2) 741 720 2.9 Item FINANCIAL INDICATORS 1Q'07 1Q'06
22 Debt/EBITDA (LTM, times) 3.6 3.9 23 EBITDA/ Total Net Fin. Exp.
(LTM, times) 2.0 1.6 24 Debt / (Debt + Equity) (times) 0.7 0.7 25
Debt/Equity (times) 2.0 1.9 26 Total Liab./Stockh. Equity (times)
2.7 2.7 27 Curr. Assets/Curr. Liab. (times) 2.0 0.9 Sales/Assets
(times) 0.9 0.9 28 EPS (Ps$) * (1.5) (2.0) 29 EPADR (US$) * (0.4)
(0.5) * Based on the weighted average shares outstanding. 32 OTHER
DATA # Shares Issued (thousands) 386,857 324,000 33 # Average
Shares Outstanding 35 (thousands) 311,395 295,728 # Employees
23,449 21,542 VITRO, S.A.B. DE C.V. AND SUBSIDIARIES SEGMENTED
INFORMATION FOR THE PERIODS, (MILLION) First Quarter Constant Pesos
Nominal Dollars 2007 2006 % 2007 2006 % FLAT GLASS Net Sales 3,139
3,369 -6.8% 282 295 -4.3% Interd. Sales 4 0 2169.4% 0 0 2138.9%
Con. Net Sales 3,134 3,368 -7.0% 282 295 -4.5% Expts. 611 693
-11.8% 55 63 -12.0% EBIT 153 58 165.6% 14 5 201.6% Margin (1) 4.9%
1.7% 4.9% 1.5% EBITDA 294 239 23.0% 26 21 26.9% Margin (1) 9.4%
7.1% 9.4% 7.1% Flat Glass Volumes (Thousand m2R)(3) Const + Auto
30,869 34,180 -9.7% GLASS CONTAINERS Net Sales 3,480 2,998 16.1%
314 268 17.1% Interd. Sales 14 24 -42.6% 1 2 -42.4% Con. Net Sales
3,466 2,974 16.5% 312 266 17.6% Expts. 947 879 7.7% 85 77 10.3%
EBIT 448 272 64.8% 40 24 66.8% Margin (1) 12.9% 9.1% 12.9% 9.1%
EBITDA 757 577 31.2% 68 52 31.8% Margin (1) 21.8% 19.4% 21.8% 19.5%
Glass containers volumes (MM Pieces) Domestic 1,226 1,105 11.0%
Exports 308 305 1.0% Total:Dom.+Exp. 1,535 1,410 8.8% Soda Ash
(Thousand Tons) 157 154 1.7% CONSOLIDATED (2) Net Sales 6,709 6,452
4.0% 604 571 5.9% Interd. Sales 18 25 -28.3% 2 2 -27.9% Con. Net
Sales 6,691 6,426 4.1% 603 568 6.0% Expts. 1,558 1,572 -0.9% 140
140 0.3% EBIT 580 309 87.8% 52 27 93.8% Margin (1) 8.7% 4.8% 8.7%
4.7% EBITDA 1,064 828 28.4% 96 74 30.0% Margin (1) 15.9% 12.9%
15.9% 13.0% (1) EBIT and EBITDA Margins consider Consolidated Net
Sales. (2) Includes corporate companies and other's sales and EBIT.
(3) m2R = Reduced Squared Meters Last Twelve Months Constant Pesos
Nominal Dollars 2007 2006 % 2007 2006 % FLAT GLASS Net Sales 12,784
13,461 -5.0% 1,136 1,161 -2.1% Interd. Sales 6 3 115.1% 1 0 126.0%
Con. Net Sales 12,779 13,458 -5.0% 1,136 1,161 -2.1% Expts. 2,316
3,311 -30.1% 205 290 -29.3% EBIT 486 498 -2.5% 43 42 2.7% Margin
(1) 3.8% 3.7% 3.8% 3.6% EBITDA 1,154 1,197 -3.6% 102 103 -0.5%
Margin (1) 9.0% 8.9% 9.0% 8.9% Flat Glass Volumes (Thousand m2R)(3)
Const + Auto 125,954 140,379 -10.3% GLASS CONTAINERS Net Sales
14,242 12,525 13.7% 1,268 1,095 15.8% Interd. Sales 74 110 -32.6% 7
10 -31.8% Con. Net Sales 14,169 12,415 14.1% 1,261 1,085 16.2%
Expts. 3,926 3,451 13.8% 351 300 17.0% EBIT 1,985 1,358 46.2% 176
118 48.8% Margin (1) 14.0% 10.9% 14.0% 10.9% EBITDA 3,291 2,623
25.5% 292 229 27.3% Margin (1) 23.2% 21.1% 23.1% 21.1% Glass
containers volumes (MM Pieces) Domestic 5,010 4,585 9.3% Exports
1,346 1,237 8.8% Total:Dom.+Exp. 6,356 5,822 9.2% Soda Ash
(Thousand Tons) - - -- CONSOLIDATED (2) Net Sales 27,458 26,378
4.1% 2,442 2,290 6.7% Interd. Sales 81 119 -31.8% 7 10 -30.8% Con.
Net Sales 27,377 26,259 4.3% 2,435 2,280 6.8% Expts. 6,242 6,762
-7.7% 556 590 -5.8% EBIT 2,320 1,834 26.5% 206 159 29.6% Margin (1)
8.5% 7.0% 8.4% 7.0% EBITDA 4,437 3,943 12.5% 393 343 14.7% Margin
(1) 16.2% 15.0% 16.2% 15.0% (1) EBIT and EBITDA Margins consider
Consolidated Net Sales. (2) Includes corporate companies and
other's sales and EBIT. (3) m2R = Reduced Squared Meters
DATASOURCE: VITRO, S.A.B. DE C.V. earnings CONTACT: Investor
Relations, Adrian Meouchi, + (52) 81-8863-1765, , or Angel Estrada,
+ (52) 81-8863-1730, , both of Vitro S.A.B. de C.V.; U.S. agency,
Susan Borinelli, , or Maura Gedid, mgedid@breakstone- group.com,
both of Breakstone Group, +1-646-452-2336, or Media, Albert Chico
of Vitro, S.A.B. de C.V. + (52) 81-8863-1661, or Web site:
http://www.vitro.com/
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