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Sonae SGPS

Earnings Release Nov 11, 2015

1901_iss_2015-11-11_eed7b152-ad60-47f5-9813-f72412660908.pdf

Earnings Release

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SONAE INDÚSTRIA 9 MONTHS 2015 RESULTS

11 November 2015

Maia, Portugal, 11 November 2015: Sonae Indústria reports unaudited Consolidated Results for the first nine months of 2015 (9M15) which are prepared in accordance with the IAS 34 – Interim Financial Reporting.

HIGHLIGHTS:

  • Consolidated 3Q15 turnover improved by 2%, to 250M€, when compared to the same quarter of 2014
  • Continued improvement in profitability, with 3Q15 Recurrent EBITDA of 27 M€, corresponding to a 10.8% margin
  • LTM1 Recurrent EBITDA of 104M€ (+11M€ vs. 3Q14)
  • Net debt reduced by 23M€ to 583M€, when compared to June 2015
  • Leverage2 stood at 5.6x, the lowest level since 2008
KEY FIGURES
Million euros
9M14 R 9M15 9M15 /
9M14 R
3Q14 R 2Q15 3Q15 3Q15 /
3Q14 R
3Q15 /
2Q15
Operations (a)
Continued
Consolidated turnover 774 778 0.5% 245 270 250 2
%
(7%)
EBITDA 75 73 (2%) 35 28 25 (29%) (10%)
Recurrent EBITDA 73 81 11% 26 29 27 3
%
(8%)
Recurrent EBITDA Margin % 9.4% 10.4% 1.0 pp 10.7% 10.8% 10.8% 0.1 pp 0.0 pp
Profit / (loss) from continued operations (25) (9) 63% (4) 0 (7) (51%) -
Consolidated net profit / (loss) for the period (47) (28) 40% (9) (9) (8) 10% 8
%
Net debt 689 583 (15%) 689 606 583 (15%) (4%)

(a) Note: At the end of 2014, Sonae Indústria classified as "discontinued operations" the results of the French industrial units Auxerre and Le Creusot (which were sold in April of 2014), Ussel (sold in March of 2015) and Linxe (sold in July 2015), of Pontecaldelas plant (in Spain, whose production activities were stopped during the 1st half of 2014), and of Betanzos (in Spain, sold in April 2015). As such, the Consolidated Income Statement for the period ended 30 September 2014 was restated (9M14 R).

1 Last twelve months

2 Net Debt to LTM Recurrent EBITDA

CEO MESSAGE

With the completion of the restructuring of our industrial footprint in the beginning of July, we can now focus our core strengths and key capabilities on further implementing and developing our operational strategic initiatives.

In this respect, at the beginning of October, we launched our new Innovus® 2015 collection. This decorative collection includes more products, with an additional offer of finishings and a larger selection of special products, under a single brand, Innovus®. This is an important step in the consolidation of our product offer under one stronger brand, better positioning our product portfolio in the markets where we operate. We are working in other marketing and commercial initiatives that, over time, will allow us to continue to grow, particularly in value added products and thus improve our profitability.

It is important to highlight that the growth of our decorative sales, under the brand Innovus®, was also made possible by the investments carried out during 2014 that reinforced our melamine surfacing capabilities. We will seek to further develop these capabilities in all markets where we are present and have recently initiated the deployment of a significant investment in a fifth surfacing line, with deep embossing capabilities, at our North American operations. This investment should allow us to further improve our product mix, with additional sales of melamine-faced boards, in a region where our share of melamine products is already an important reference for the group. Additionally we are carrying out other investments to improve the variable cost structure of the raw boards' production,to continuously optimize the efficiency of our raw materials consumptions.

In operational terms, and notwithstanding the impacts of the operational maintenance shutdowns of our European plants, the performance of our continued operations during this quarter continued to improve. We have thus been able to deliver the sixth consecutive quarter of improvement in the last twelve month recurrent EBITDA, now reaching 104 million Euros, up by 11 million Euros when compared to the same period of 2014. The improved performance was mainly driven by the results of our North America operations, which allowed the group to maintain the recurrent EBITDA margin of 10.8% during this third quarter. As regards our financial structure, the reduction of our consolidated Net Debt to 583 million Euros should be highlighted. This has led to a reduction of the Net Debt to Recurrent EBITDA ratio to 5.6x, the lowest value since September 2008. Furthermore, we have successfully completed the negotiations for the refinancing of the remaining 2015 debt maturities.

We are now focused on continuously improving the performance of our existing industrial footprint, with the objective of becoming the preferred supplier of our target customers, based on a competitive offer of products and an improvement of the service levels. For this, I continue to count on all our teams and expect the same level of commitment evidenced in the last years.

Rui Correia CEO Sonae Indústria

1. TURNOVER & RECURRENT EBITDA

At the end of 2014, Sonae Indústria classified as "discontinued operations" the results of the French industrial units Auxerre and Le Creusot (which were sold in April of 2014), Ussel (sold in March of 2015) and Linxe (sold in July 2015), of Pontecaldelas plant (in Spain, whose production activities were stopped during the 1st half of 2014), and of Betanzos (in Spain, sold in April 2015). The analysis presented in this chapter excludes the contribution of these operations classified as "discontinued operations".

1.1. SONAE INDÚSTRIA CONSOLIDATED

Overall consolidated turnover for continued operations during 9M15 reached 778 million Euros, which represents a slight increase of 0.5% vs. 9M14. The increase in consolidated turnover is explained by the improved average selling prices (average growth of 2.3% in 9M15 vs. 9M14), as volumes sold remained relatively stable (-0.9% vs. 9M14). In the quarter, consolidated turnover was up by 2%, when compared to same period of 2014, due to higher activity levels in the North America operations. When compared to the previous quarter, consolidated turnover reduced by 7%, naturally impacted by the normal summer maintenance shutdowns of the European plants.

Consolidated average variable costs per m3 continued to evidence the improving trend started in the first quarter of the year, decreasing 0.4% during 9M15, when compared to the same period of 2014. This evolution is explained by reductions in the average cost of chemicals, thermal energy and maintenance costs, which more than compensated the negative contributions of higher wood and electricity costs. Average variable costs in 3Q15 were slightly above the value registered during 3Q14 (up by circa 0.7%). Nevertheless, it is important to note that, with the exception of chemicals and maintenance, all variable cost categories decreased against the previous quarter. These evolutions allowed for an overall reduction of the group average unitary variable costs of 1.7%.

Regarding fixed costs, and considering exclusively the contribution of the continued operations, total fixed costs were reduced by circa 4 million Euros during 9M15, when compared to same period last year.

Total headcount (considering the contribution of all operations) was of 3,254 FTEs as at the end of September 2015, a reduction of 141 FTEs when compared to the end of June 2015. This reduction is mainly explained by the impact of the sale of the former subsidiary Darbo, in France.

ANNOUNCEMENT | SONAE INDÚSTRIA 9 MONTHS 2015 RESULTS

The average capacity utilization index of continued operations decreased 5.2 p.p. during 3Q15, when compared to the previous quarter of the year, which is explained by the seasonal maintenance shutdowns that take place during the summer period. Importantly, the average capacity utilization during 3Q15 was 2.1 p.p. above the level registered in the 3Q14, due to contribution of the North American plant. The average capacity utilization index for the 9M15 reached 79%, slightly up by 0.3% when compared to 9M14.

The Recurrent EBITDA for the first nine months of 2015 reached 81 million Euros, an increase of 8 million Euros when compared to the same period of 2014, with an implicit recurrent EBITDA margin of 10.4% (+1.0 p.p. vs 9M14). During 3Q15 the company booked a recurrent EBITDA of 27 million Euros, slightly below the value registered in 2Q15 (-2 million Euros), which is explained by the reduced levels of activity. Notwithstanding, it should be noted that the recurrent EBITDA for 3Q15 was 1 million Euros above the value registered in 3Q14. Recurrent EBITDA margin in the third quarter of 2015 was 10.8%, exactly the same value registered in 2Q15 but up by 0.1 p.p. when compared to same period of last year. Last twelve months Recurrent EBITDA maintained the growing trend started in the 2Q14, reaching 104 million Euros at the end of September 2015.

LTM: Last twelve months

Non-recurrent EBITDA items were circa -2.2 million Euros in 3Q15, and were essentially related with redundancy costs (0.4 million Euros) and costs related with inactive sites (1.7 million Euros).

Total EBITDA reached 25 million Euros during 3Q15, which represents a decrease of 29% when compared to 3Q14. Nevertheless, it must be noted that the 3Q14 result was positively impacted by a one-off event related with an insurance settlement in the UK, in the amount of 13.2 million Euros. Excluding the contribution of this item, both quarter and YTD EBITDA figures present significant improvements, with the 9M15 EBITDA (73 million Euros) increasing by 19% or 12 million Euros, on a comparable basis.

1.2. SOUTHERN EUROPE

Southern Europe performance analysis reflects the performance of the operations considered as "continued" in the Iberian Peninsula, together with the Western Europe and overseas export activities, thus excluding the former French operations and the Betanzos and Pontecaldelas plants.

*Turnover per region includes intercompany group sales (between regions)

During 9M15, the Southern European construction sector continued to show an improved performance, when compared to the same period of 2014, possibly correlated with some positive macroeconomic prospects, namely the higher levels of private consumption, in both Portugal and Spain. In Portugal, the new housing indicator shows an important 16%3 y.o.y. increase, while in Spain the growth was even more material (28% 4 y.o.y. increase).

Comparing the performance of 9M15 with the same period in 2014, the following results should be highlighted for this region:

  • Turnover decreased 7%, reaching 256 million Euros for the period, due to a reduction in sales volumes generated in Iberian Peninsula, driven by lower sales of raw particleboard and MDF. It should also be noted that the decrease in turnover in 3Q15, and when compared to 2Q15, was impacted by the maintenance shutdowns conducted at the industrial plants of this region;
  • Average selling prices continued to evidence the positive trend started in 1Q15, registering a growth of 2.7% on an YTD basis, and of 0.9% when compared to previous quarter, driven by improvements of particleboard products;
  • Average unitary variable costs (per m3 ) were up by 1.1% y.o.y., as the positive contributions of thermal energy, electricity and maintenance costs, were more than compensated the negative contributions of wood and chemical costs.

Notwithstanding the seasonal reduction of recurrent EBITDA during 3Q15 when compared to 2Q15, due to reduced levels of activity, the Recurrent EBITDA for 9M15 reached 20 million Euros (up by 5 million Euros vs. 9M14), with an implicit recurrent EBITDA margin of 7.7% (+2.2 p.p. vs. 9M14).

4 Source: Ministierio de Fomento, October 2015 (Total "New Housing", cumulative 7 months evolution until July 2015)

3 Source: Instituto Nacional de Estatística, October 2015 ("Nova habitação residencial", cumulative 8 months evolution until August 2015)

1.3. NORTHERN EUROPE

Northern Europe

*Turnover per region includes intercompany group sales (between regions)

During the third quarter of 2015, the Northern European market started to show an improved performance in the construction sector. The construction sector performance in Germany, assessed by the indicator "new house construction permits", registered an increase of circa 2% 5 , y.o.y., which is explained by the 5% growth registered in July and August 2015, when compared to same period of 2014.

The highlights of the 9M15 performance in Northern Europe, when compared to the 9M14, are summarized below:

  • Turnover for this region decreased by 8%, driven by a combination of lower sales volumes (down by 3.4% y.o.y.), mostly explained by the reduction in raw particleboard and OSB volumes, and lower average selling prices (down by 1.4% y.o.y.), driven by the negative contribution of OSB products, notwithstanding the better performance of MDF products. On a quarterly basis, and when compared to the 3Q14, turnover decreased 5% during 3Q15, mostly as a result of reduction of the average selling prices of raw particleboard and OSB products. Performance in 3Q15, compared to 2Q15, was impacted by the normal maintenance shutdown works carried out at the European plants.
  • Average unitary variable costs (per m3 ) registered a reduction of 5.5%, when compared to the same period in 2014, explained by the decrease in all cost categories. Average cost of wood was positively impacted by the higher levels of consumption of recycled wood, following last year investment in additional recycling equipment in Nettgau. On a quarterly basis, and when compared to 2Q15, average unitary variable costs reduced slightly by 0.2%, which is mainly explained by lower wood costs.

The combination of the above factors led to a Recurrent EBITDA margin of 8.1% during 9M15, 1.1 p.p. below the value registered in 9M14, which is mostly explained, as previously indicated, by a lower contribution from the OSB segment. On a quarterly basis, the recurrent EBITDA margin decreased 0.7 p.p. in 3Q15 vs. 2Q15.

5 Source: German Federal Statistics Office, October 2015 ("Permits for new construction, dwelling", cumulative 8 months evolution until August 2015)

1.4. REST OF THE WORLD (CANADA AND SOUTH AFRICA)

*Turnover per region includes intercompany group sales (between regions)

The North America construction sector shows an overall improved performance during 9M15, when compared with the same period of 2014. The level of housing starts increased 12%6 y.o.y. in the United States and 1.4%7 y.o.y. in Canada. In South Africa, the construction sector showed signs of recovery, with the level of residential building permits increasing by 7% 8 y.o.y., mostly due to the significant growth of 19% in August 2015 vs August 2014.

In terms of performance in the 9M15, and when compared to 9M14, the following highlights should be noted for these regions:

  • The overall consolidated turnover of the segment kept the positive trend exhibited since the start of the year, increasing 14% in Euro terms. This result is mainly explained by the improved performance of the Canadian operation, registering an increase of 2.3% in sales volumes y.o.y. Opposite to the North America performance, the South African operations exhibited a decrease of 2.3% in sales volumes, mostly as a result of reduction in terms of raw particleboard products;
  • Regarding the average selling prices, the Canadian operation continued the positive evolution started in the 1Q15, registering an increase of 8.1% y.o.y. The average selling prices of South African operations registered a slight decrease (by 0.9%), which is explained by the different product mix;
  • Average unitary variable costs (per m3 ) increased y.o.y. in Canada and decreased 2.2% y.o.y. in South Africa, when compared to same period of 2014. The higher costs of wood and maintenance expenditure, explains the increase witnessed in Canada. In South Africa, despite the increase of wood, thermal energy and electricity costs, the reduction in the remaining variable costs categories led to a reduction in the unitary variable costs, when compared to 9M14.

The combination of the above factors led to the continuous growth of recurrent EBITDA margin, which reached 15.9% during 9M15, up by 2.6 p.p. when compared to 9M14. On a quarterly basis, the recurrent EBITDA margin increased 3.1 p.p. and 4.1 p.p. during 3Q15, when compared to 2Q15 and 3Q14, respectively. It is important to highlight that the recurrent EBITDA margin of 18.8% for 3Q15 is the best since 2010.

7 Source: Canada Mortgage and Housing Corporation, October 2015 ("Building permits (units)", cumulative 8 months evolution until August 2015). 8 Source: Statistics South Africa, October 2015 ("Building plans for residential buildings (number)", cumulative 8 months evolution until August 2015).

6 Source: United States Census Bureau, October 2015 ("New housing units", cumulative 8 months evolution until August 2015).

2. CONSOLIDATED FINANCIAL PERFORMANCE

2.1. CONSOLIDATED INCOME STATEMENT

CONSOLIDATED INCOME STATEMENT 9M15 / 3Q15 / 3Q15 /
Million euros 9M14 R 9M15 9M14 R 3Q14 R 2Q15 3Q15 3Q14 R 2Q15
Consolidated turnover 774 778 0
%
245 270 250 2
%
(7%)
Southern Europe* 274 256 (7%) 8
3
9
2
7
5
(9%) (18%)
Northern Europe* 349 322 (8%) 108 109 103 (5%) (5%)
Rest of the World* 193 220 14% 6
8
7
5
7
6
12% 2
%
Other operational income 34 18 (46%) 18 6 6 (70%) (3%)
EBITDA 75 73 (2%) 35 28 25 (29%) (10%)
Recurrent EBITDA 73 81 11% 26 29 27 3
%
(8%)
Southern Europe 1
5
2
0
32% 5 8 5 (7%) (44%)
Northern Europe 3
2
2
6
(18%) 1
1
9 8 (28%) (13%)
Rest of the World 2
6
3
5
36% 1
0
1
2
1
4
43% 22%
Recurrent EBITDA Margin % 9.4% 10.4% 1.0 pp 10.7% 10.8% 10.8% 0.1 pp 0.0 pp
Depreciation and amortisation (48) (48) 0
%
(16) (16) (16) 2
%
2
%
Provisions and impairment Losses (11) 1 - (9) 0 (2) (82%) -
Operational profit 17 26 52% 11 12 8 (30%) (37%)
Net financial charges (38) (29) 23% (13) (10) (12) 11% (22%)
o.w. Net interest charges (25) (17) 30% (9) (6) (6) 31% (7%)
o.w. Net exchange differences 1 1 30% 1 1 (1) - -
o.w. Net financial discounts (10) (9) 5
%
(3) (3) (3) (0%) 3
%
Share in results of Joint Ventures (2) (1) 39% (1) (0) (1) (37%) 71%
Profit before taxes continued operat. (EBT) (23) (4) 83% (3) 2 (5) (54%) -
Taxes (2) (5) (139%) (1) (2) (2) (46%) 16%
o.w. Current tax (4) (7) (66%) (2) (2) (3) (120%) (52%)
o.w. Deferred tax 2 1 24% 0 (0) 1 - -
Profit / (loss) from continued operations (25) (9) 63% (4) 0 (7) (51%) -
Profit / (loss) from discontinued operations (22) (19) 14% (5) (9) (2) (63%) 80%
Consolidated net profit / (loss) for the period (47) (28) 40% (9) (9) (8) 10% 8
%
Losses (income) attrib. to non-controlling interests (0) (0) 39% 0 (0) (0) (102%) (57%)
Net profit/(loss) attributable to Equity Holders (47) (28) 40% (10) (9) (8) 13% 8
%

*Turnover per region includes intercompany group sales (between regions).

Consolidated EBITDA for the first nine months of 2015 was of 73 million Euros, slightly below the 9M14 value. It should be highlighted that 9M14 value was positively impacted by the receipt of an insurance settlement in the UK in the amount of 13.2 million Euros. If this one-off effect is excluded, Sonae Indústria's total EBITDA would have improved by 12 million Euros, year on year, on a comparable basis. Total Recurrent EBITDA of 9M15 was of 81 million Euros, 8 million Euros (+11%) above same period of 2014, due to continued better performance of Southern Europe and Rest of the World operations. The group's consolidated performance was still negatively impacted by non-recurrent costs, totalling 7.7 million Euros in the first nine months of 2015, of which 3.2 million Euros associated with on-going cost with inactive sites, 3.2 million Euros related with redundancy payments and circa 1 million Euros with a capital loss in the sale of a real estate asset in Portugal (vacant land).

The combination of the above factors led to a Recurrent EBITDA margin for 9M15 of 10.4% (1 p.p. above the value registered in 9M14). Total Recurrent EBITDA in the third quarter was of 27 million Euros (1 million Euros above the value of 3Q14) with a stable Recurrent EBITDA margin of 10.8%.

Depreciation and amortization charges for the 9M15, for continued operations, were circa 48 million Euros, a stable value when compared to 9M14. For the quarter, this item totalled 16 million Euros, in line with the values booked in both 3Q14 and 2Q15, on a comparable basis.

Provisions and impairments losses booked in the first nine months of 2015, for continued operations, totalled a net amount of -0.8 million Euros (impacting positively the net result), mainly related with reversal of provisions previously booked during 2014 for the Horn restructuring process (following the dismissal costs incurred during the 9M15), which has more than compensated the additional impairment losses booked in the period.

The value of net financial charges for the first nine months of the year was 29 million Euros, improving by 23% when compared with 9M14, on a comparable basis. The improvement in the group net interest charges is also the outcome of the 0.9 p.p. reduction in the average cost of debt, to 5.2% during the first nine months of 2015. Net financial charges for 3Q15 were 11.6 million Euros, 2.1 million Euros above the value of 2Q15, but 1.4 million Euros below the value registered for the same period of 2014 (-22%). When compared to 2Q15, the increase in the quarter was due to the negative contribution of the net exchange rate differences in the amount of 1.1 million Euros (a deterioration of 1.7 million Euros when compared to the value booked in the previous quarter).

Current tax charges booked for the first nine months of 2015 were of 7 million Euros, 3 million Euros above 9M14 mostly due to higher tax charges in Canada. In the 3Q15 an amount of 3.3 million Euros was booked, 1.1 million Euros above the amount registered in the 2Q15, due to higher tax charges in the operations in Portugal, Canada and South Africa.

At the end of September 2015, the consolidated Net loss of the group was of 28 million Euros, driven in large part by the impact of discontinued operations, with a loss of 19 million Euros. Nevertheless, due to the improved operational performance of the continued operations, the consolidated net losses of the group for the first nine months of the year were reduced by 40% (-19 million Euros), when compared to same period of 2014. In the third quarter of 2015, the group booked a consolidated Net loss of 7 million Euros, implying an increase of 3 million Euros when compared to 3Q14.

2.2. CAPEX

Additions to Gross Tangible Fixed Assets reached 4.6 million Euros in the 3Q15, which compares with 11.3 million Euros during the same period in 2014 (which were mostly related with the strategic investments completed during that year). The majority of 3Q15 investments were related with maintenance works carried out during the normal summer shutdown period of the European operations.

2.3. CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Million euros 9M14 2014 1H15 9M15
Non current assets 913 830 802 770
Tangible assets 781 700 670 641
Goodwill 82 82 82 81
Deferred tax asset 33 28 27 27
Other non current assets 17 20 23 21
Current assets 315 244 283 269
Inventories 111 99 99 100
Trade debtors 135 99 135 117
Cash and cash equivalents 25 12 12 19
Other current assets 44 35 39 32
Non-current assets held for sale 0 12 4 0
Total assets 1,229 1,086 1,089 1,039
Shareholders' Funds 81 111 90 71
Equity Holders 82 111 91 71
Non-controlling interests (0) (0) (0) (0)
Liabilities 1,147 965 988 968
Interest bearing debt 698 576 618 602
Non current 221 457 456 392
Current 476 119 162 210
Trade creditors 154 156 142 141
Other liabilities 296 233 228 225
Liabilities directly associated with non-current assets held 0 10 11 0
for sale
Total Shareholders'Funds and liabilities 1,229 1,086 1,089 1,039
Net debt 689 564 606 583
Net debt to LTM recurrent EBITDA 7.4 x 5.9 x 5.9 x 5.6 x
Working Capital 93 41 91 76

LTM: last twelve months

Working Capital as defined by the company: Inventories + Trade Debtors – Trade Creditors

At the end of September 2015, Sonae Indústria consolidated working capital was of 76 million Euros, a reduction of 15 million Euros, when compared to June 2015. The customary reduced level of activity registered in the 3Q15, as a result of the seasonal maintenance shutdown works at the European plants, led to a significant decrease in the value of the Trade Debtors (down by 18 million Euros when compared to June 2015).

Net debt decreased by 23 million Euros, to 583 million Euros, when compared to June 2015, and is 106 million Euros below the value registered at the end of September 2014, mostly as a result of the proceeds from the 2014 share capital increase.

The combination of the improved level of LTM Recurrent EBITDA with the reduced level of Net Debt led to a reduction of the Net Debt to Recurrent EBITDA ratio to 5.6x, improving by 0.3x when compared to both December 2014 and June 2015. It should be highlighted that this ratio registered at the end of

September 2015 the lowest value since September 2008, evidencing the deleveraging path that has been pursued in the last years.

Total Shareholder's Funds at the end of September 2015 were negatively impacted by the net losses registered during the first nine months of the year (-28 million Euros) and by the accounting impact associated with the consolidation of the Canadian and South Africa operations using lower exchange rates, resulting in a negative change of the revaluation reserve in the amount of 10 million Euros. Is also worth noting that the 19 million Euro reduction in Shareholder's Funds registered during the 3Q15 was mostly determined by the devaluations of the CAD and ZAR (negative impact over revaluations reserves of 11 million Euros).

3. LOOKING FORWARD

In the last quarter of 2015, we will carry on with the continued implementation of our strategic plan, which is now focused towards achieving both operational excellence and a higher customer orientation, aimed at creating more value for our customers.

Notwithstanding the customary expected pressure in the wood and thermal energy costs, associated with the beginning of the winter period in the Northern Hemisphere operations, and barring a significant change in competitive dynamics, we expect to be able to continue to deliver an improved level of operational profitability at our core plants, for the remainder of the year.

The Board of Directors

GLOSSARY

Capacity Utilization Index Finished-Available Production (m3
) / Installed production capacity (m3
); raw boards only
CAPEX Investment in Tangible Fixed Assets
EBITDA Earnings Before Interests and Taxes + Depreciations and Amortizations + (Provisions and
impairment losses - Impairment losses in trade receivables + Reversion of impairment losses in
trade receivables)
FTEs Full Time Equivalent; the equivalent of one person working full time, according to the working
schedule of each country where Sonae Indústria has operations
Fixed Costs
Overheads + Personnel costs (internal and external); management accounts concept
Gross Debt Bank loans + Debentures + Obligations under finance leases + other loans + Loans from related
parties
Headcount Total number of internal FTEs, excluding trainees
MDF Medium Density Fibreboard
Net Debt
Gross Debt - Cash and cash equivalents
Net Debt to LTM Rec.
EBITDA
Net Debt / Last Twelve Months Recurrent EBITDA
OSB Oriented Strand Board
Recurrent EBITDA EBITDA excluding non-recurrent operational income / costs
Recurrent EBITDA margin Recurrent EBITDA / Turnover
Turnover (regions) Sales Finished Goods and merchandise + Services Rendered; excluding sales of other materials
like for ex. wood by-products, management accounts concept
Working Capital Inventories + Trade Debtors – Trade Creditors

SAFE HARBOUR

This document may contain forward-looking information and statements, based on management's current expectations or beliefs. Forward-looking statements are statements that are not historical facts.

These forward-looking statement are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including, but not limited to, changes in regulation, the wood based panels industry and economic conditions, and the effects of competition. Forward-looking statements may be identified by words such as "believes", "expects", "anticipates", "projects", "intends", "should", "seeks", "estimates", "future" or similar expressions.

Although these statements reflect our current expectations, which we believe are reasonable, investors, analysts and, generally, the recipients of this document are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. You are cautioned not to put undue reliance on any forward-looking information or statements. We do not undertake any obligation to update any forward-looking information or statements.

MEDIA AND INVESTOR CONTACTS

Investor Relations António Castro / Sílvia Saraiva Phone: (+351) 220 100 655 [email protected]

Media Joana Castro Pereira Phone: (+351) 220 100 403 [email protected]

SONAE INDÚSTRIA, SGPS, SA

Publicly Listed Company Share Capital € 812 107 574.17 Maia Commercial Registry and Tax Number 506 035 034

Lugar do Espido Via Norte Apartado 1096 4470-177 Maia Portugal Phone: (+351) 22 010 04 00 Fax: (+351) 22 010 05 43

www.sonaeindustria.com

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