Vitro Reports Record 3Q05 YoY Comparable Consolidated Sales Up 9.5%; EBITDA Up 11%
SAN PEDRO GARZA GARCIA, Mexico, Oct. 26 - 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'05 unaudited results. Consolidated sales rose 6.1 percent YoY. Excluding divestitures of Vitro American National Can (VANCAN) in September 2004 and Plasticos Bosco (Bosco) in April 2005, consolidated sales rose by 9.5 percent during the same period. Consolidated EBITDA rose 9.0 percent, resulting in a margin increase of 0.4 percentage points to 16.1 percent. On a comparable basis, consolidated EBITDA rose 11 percent. Comparable EBITDA rose 33.3 percent at Glass Containers and fell 14.8 percent at Flat Glass and 9 percent at Glassware.
Alvaro Rodriguez, Chief Financial Officer, commented: "This was a very good quarter, with YoY growth in both sales and EBITDA. In fact, we posted record comparable consolidated sales of US$624 million. Glass Containers continues to outperform, with sales of US$281 million and EBITDA of US$63 million, both figures the highest for the division in the Company's history."
"Flat Glass turned in strong QoQ results, with EBITDA up 30 percent. We believe that the worse is behind us and Flat Glass has begun to turn around. We are now seeing the initial success of our plan to improve profitability."
"Natural gas is still a critical issue that is impacting a lot of companies worldwide, including glass companies. As a result, we continue to focus on maintaining a strict cost management across our business. In fact, in 3Q05 as a result of the steps that we have taken, SG&A as a percentage of sales fell by 1.1 percent year-over-year on a comparable basis."
"We are moving ahead with our strategic plan aimed at significantly reducing Holding Company debt and continue to make progress. On September 26, we announced the successful closing of two Credit Facilities for US$150 million with an eighteen month maturity. This was the first step of the plan, which provided the immediate liquidity required to continue with the evaluation and further implementation of our strategic plan. On October 11, we offered for sale two buildings and land belonging to our corporate headquarters. Keep in mind that these are just the first steps of our plan. This quarter we reduced debt at the Holding Company by US$55 million to US$454 million from US$509 million in 2Q05, and we are fully focused on reaching our objective of significantly reducing Holding Company debt."
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 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 three principal businesses: flat glass, glass containers and glassware. Its subsidiaries serve multiple product markets, including construction and automotive glass; food and beverage, wine, liquor, cosmetics and pharmaceutical glass containers; glassware for commercial, industrial and retail uses. 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 70 countries worldwide. For further information, please visit our website at: http://www.vitro.com
Third Quarter 2005 results
Conference Call and Web cast
Thursday, October 27, 2005
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 26, 2005. For inquiries regarding the conference call, please contact Michael Fehle of Breakstone Group via telephone at (646) 452-2337, or via email at mfehle@breakstone-group.com.
DETAILED FINANCIAL INFORMATION FOLLOWS:
Consolidated Results
Sales 3
EBIT and EBITDA 4
Consolidated Financing Cost 5
Taxes 5
Consolidated Net Loss 6
Capital Expenditures 6
Consolidated Financial Position 6
Cash Flow 8
Key Developments 10
Flat Glass 11
Glass Containers 12
Glassware 13
Consolidated Financial Statements 15
Segmented Information 16
VENA's Consolidated Financial Statements 17
Sep-04 Sep-05
Inflation in Mexico
Quarter 1.7% 1.0%
Accumulated 3.4% 1.8%
LTM 5.1% 3.6%
Inflation in USA
Quarter 0.2% 1.0%
Accumulated 2.6% 2.8%
LTM 2.3% 3.6%
Exchange Rate
Closing 11.3884 10.7907
Devaluation
Quarter -1.2% 0.1%
Accumulated 1.3% -3.2%
LTM 3.4% -5.2%
FINANCIAL HIGHLIGHTS*
3Q'05 3Q'04 % Change
Consolidated Net Sales 624 588 6.1%
Flat Glass 287 278 3.1%
Glass
Containers 281 242 16.0%
Glassware 49 61 -19.9%
Cost of Sales 451 434 4.0%
Gross Income 172 154 12.1%
Gross Margins 27.6% 26.2% 1.4 pp
SG&A 119 115 3.3%
SG&A % of sales 19.0% 19.6% -0.6 pp
EBIT 54 39 38.2%
EBIT Margins 8.6% 6.6% 2 pp
EBITDA 100 92 9.0%
Flat Glass 29 34 -14.8%
Glass Containers 63 49 29.1%
Glassware 6 7 -13.8%
EBITDA Margins 16.1% 15.7% 0.4 pp
NET INCOME (10) 5 -
Net Income Margins -1.6% 0.8% -240 bps
Total Financial Debt 1,496 1,518 -1.4%
Short Term Debt 309 276 11.9%
Long Term Debt 1,187 1,242 -4.4%
Average life of debt 3.9 4.0
Cash & Cash Equivalents 227 323 -29.7%
* Millions of Nominal US$
Consolidated Results
3Q05 Highlights
US$ Million
SALES
3Q05 3Q04 YoY
$ $ Change
% %
FLAT GLASS 46 287 278 3.1
CONTAINERS 45 281 242 16.0
GLASSWARE 8 49 61 -19.9
HOLDING(1,2) 1 7 6 11.4
TOTAL 100 624 588 6.1
EBITDA
3Q05 3Q04 YoY
$ $ Change
% %
FLAT GLASS 29 29 34 -14.8
CONTAINERS 63 63 49 29.1
GLASSWARE 6 6 7 -13.8
HOLDING(1,2) 2 2 2 14.6
TOTAL 100 100 92 9.0
TOTAL DEBT
3Q05 3Q04 YoY
$ $ Change
%
FLAT GLASS 402 348 15.7
CONTAINERS 571 494 15.5
GLASSWARE 69 80 -14.5
HOLDING(1,2) 454 595 -23.7
TOTAL 1496 1518 -1.4
INTER COMPANY DEBT
3Q05 3Q04
$ $
FLAT GLASS 149 60
CONTAINERS -7 62
GLASSWARE 13 10
HOLDING(1,2) -155 -132
TOTAL
DEBT WITH THIRD PARTIES
3Q05 3Q04 YoY
$ $ Change
%
FLAT GLASS 253 288 -12.1
CONTAINERS 578 432 33.9
GLASSWARE 56 71 -21.5
HOLDING(1,2) 609 727 -16.2
1496 1518 -1.4
CASH & CASH EQUIVALENTS
3Q05 3Q04 YoY
$ $ Change
%
FLAT GLASS 55 46 20.4
CONTAINERS 141 35 305.6
GLASSWARE 7 15 -52.1
HOLDING(1,2) 23 228 -90.0
TOTAL 227 323 -29.7
(1) Sales for the Holding Co. represent only third party revenues.
(2) Holding includes all corporate companies
(3) Cash & Cash Equivalents include cash collateralizing long term
debt accounted for in other long term assets.
Sales
Consolidated net sales for 3Q'05 increased 6.1 percent YoY and 4.4 percent for the last twelve months. Flat Glass and Glass Containers sales for the quarter rose 3.1 percent and 16.0 percent YoY, respectively; Glassware sales declined 19.9 percent over the same time period.
During the quarter, domestic, export and foreign subsidiaries sales YoY grew 2.8 percent, 5.7 percent and 12.0 percent, respectively.
On a comparable basis, excluding VANCAN and Bosco, which were divested in September 2004 and April 2005, respectively, consolidated net sales for the quarter rose 9.5 percent YoY. At the business unit level, sales at Glass Containers, excluding VANCAN, rose 20 percent YoY and sales at Glassware, excluding Bosco decreased 6 percent.
The US dollar amounts, of the peso-denominated operations, are higher when compared to the peso figures due to a revaluation of the Mexican peso against the US dollar.
Table 1: Total Sales
Table 1
Sales
(Million)
YoY%
3Q'05 3Q'04 Change 9M'05 9M'04
Constant Pesos
Total Consolidated Sales 6,733 6,799 (1.0) 19,651 19,805
Flat Glass 3,097 3,194 (3.1) 9,135 9,528
Glass Containers 3,037 2,817 7.8 8,547 8,033
Glassware 524 713 (26.5) 1,715 2,015
Domestic Sales 2,857 3,067 (6.9) 8,342 8,767
Export Sales 1,905 1,936 (1.6) 5,567 5,788
Foreign Subsidiaries 1,971 1,796 9.8 5,742 5,250
Nominal Dollars
Total Consolidated Sales 624 588 6.1 1,792 1,705
Flat Glass 287 278 3.1 836 825
Glass Containers 281 242 16.0 778 689
Glassware 49 61 (19.9) 155 171
Domestic Sales 266 259 2.8 758 739
Export Sales 176 167 5.7 506 497
Foreign Subsidiaries 181 162 12.0 528 469
% Foreign Currency Sales* / Total
Sales 57.3% 56.0% 1.3 pp 58.0% 56.6%
% Export Sales / Total Sales 28.3% 28.4% -0.1pp 28.2% 29.1%
YoY% LTM YoY%
Change 2005 2004 Change
Constant Pesos
Total Consolidated Sales (0.8) 26,056 26,374 (1.2)
Flat Glass (4.1) 12,134 12,670 (4.2)
Glass Containers 6.4 11,153 10,686 4.4
Glassware (14.9) 2,431 2,713 (10.4)
Domestic Sales (4.8) 11,288 11,952 (5.6)
Export Sales (3.8) 7,166 7,405 (3.2)
Foreign Subsidiaries 9.4 7,602 7,016 8.4
Nominal Dollars
Total Consolidated Sales 5.2 2,360 2,261 4.4
Flat Glass 1.3 1,105 1,093 1.1
Glass Containers 12.9 1,007 913 10.3
Glassware (9.2) 218 229 (5.0)
Domestic Sales 2.6 1,013 1,003 1.0
Export Sales 1.9 647 633 2.1
Foreign Subsidiaries 12.6 700 624 12.2
% Foreign Currency Sales* / Total
Sales 1.4 pp 57.1% 55.6% 1.5 pp
% Export Sales / Total Sales -0.9 pp 27.4% 28.0% -0.6 pp
* Exports + Foreign Subsidiaries
EBIT and EBITDA
Consolidated EBIT for the quarter increased 38.2 percent YoY to US$54 million from US$39 million last year. EBIT margin increased 2.0 percentage points to 8.6 percent. On a comparable basis, excluding VANCAN and Bosco, consolidated EBIT increased 43 percent. On a LTM basis, EBIT margin decreased 0.6 percentage points.
EBIT for the quarter at Glass Containers and Glassware increased YoY by 85.5 percent and 30.5 percent, respectively, while at Flat Glass EBIT declined 19.3 percent. On a comparable basis, excluding VANCAN, Glass Containers EBIT for the same period rose 95 percent. Excluding Bosco, Glassware EBIT increased 30.4 percent.
Consolidated EBITDA for the quarter increased 9.0 percent to US$100 million from US$92 million in 3Q'04. The EBITDA margin rose 0.4 percentage points to 16.1 percent. On a comparable basis, excluding VANCAN and Bosco, EBITDA increased 11 percent YoY during the same time period.
On a LTM basis, consolidated EBITDA decreased 4.2 percent to US$348 million from US$363 during the same period last year. On a comparable basis, excluding VANCAN, Bosco and Vitro Fibras, divested in March 2004, consolidated EBITDA for the last twelve month period increased 1 percent.
During the quarter, EBITDA decreased 14.8 percent and 13.8 percent YoY at Flat Glass and Glassware, respectively. EBITDA at Glass Containers rose 29.1 percent.
Glass Containers, excluding VANCAN, was the major EBITDA contributor for the quarter through its 33.3 percent YoY increase. During the same period, Glassware, excluding Bosco, declined 9 percent.
The Company's expense reduction effort continued to benefit results during this quarter, SG&A was reduced by 1.1 percent of comparable sales compared with 3Q'04.
Table 2: EBIT and EBITDA
Table 2
EBIT and EBITDA
(Million)
YoY%
3Q'05 3Q'04 Change 9M'05
Constant Pesos
Consolidated EBIT 579 447 29.5 1,242
Margin 8.6% 6.6% 2 pp 6.3%
Flat Glass 159 208 (23.7) 277
Glass Containers 407 237 71.4 957
Glassware 23 19 22.5 31
Consolidated EBITDA 1,082 1,075 0.6 2,860
Margin 16.1% 15.8% 0.3 pp 14.6%
Flat Glass 315 397 (20.5) 777
Glass Containers 678 574 18.3 1,823
Glassware 68 86 (21.4) 191
Nominal Dollars
Consolidated EBIT 54 39 38.2 114
Margin 8.6% 6.6% 2 pp 6.4%
Flat Glass 15 18 (19.3) 26
Glass Containers 38 20 85.5 87
Glassware 2 2 30.5 3
Consolidated EBITDA 100 92 9.0 261
Margin 16.1% 15.7% 0.4 pp 14.6%
Flat Glass 29 34 (14.8) 71
Glass Containers 63 49 29.1 166
Glassware 6 7 (13.8) 17
YoY% LTM YoY%
9M'04 Change 2005 2004 Change
Constant Pesos
Consolidated EBIT 1,259 (1.4) 1,555 1,745 (10.9)
Margin 6.4% -0.1pp 6.0% 6.6% -0.6pp
Flat Glass 607 (54.3) 522 859 (39.2)
Glass Containers 658 45.4 1,100 810 35.8
Glassware 57 (46.5) 57 143 (59.9)
Consolidated EBITDA 3,131 (8.6) 3,849 4,291 (10.3)
Margin 15.8% -1.2pp 14.8% 16.3% -1.5pp
Flat Glass 1,175 (33.9) 1,208 1,618 (25.3)
Glass Containers 1,639 11.2 2,368 2,161 9.6
Glassware 270 (29.2) 263 431 (38.9)
Nominal Dollars
Consolidated EBIT 108 5.3 142 149 (4.6)
Margin 6.4% 0 pp 6.0% 6.6% -0.6pp
Flat Glass 52 (50.4) 48 73 (34.5)
Glass Containers 56 55.5 100 69 44.4
Glassware 5 (41.8) 5 12 (56.8)
Consolidated EBITDA 267 (2.1) 348 363 (4.2)
Margin 15.6% -1 pp 14.7% 16.1% -1.4pp
Flat Glass 101 (29.1) 110 138 (20.1)
Glass Containers 139 19.3 213 183 16.8
Glassware 23 (23.9) 24 36 (34.5)
Consolidated Financing Cost
Consolidated financing cost for the quarter increased to US$53 million compared with US$12 million during 3Q'04. This was primarily driven by a non- cash foreign exchange loss of US$6 million compared with a non-cash foreign exchange gain of US$18 million in 3Q'04 and some losses in derivative transactions. During 3Q'05 the Mexican Peso stayed stable compared with a 1.2 percent appreciation in 3Q'04. Although a non-cash item, this has a negative effect on total financing cost.
On a LTM basis, total consolidated financing cost declined to US$124 million from US$151 million due to a non-cash foreign exchange gain of US$39 million compared with a non-cash foreign exchange loss of US$37 million in the same period last year.
Table 3: Total Financing Cost
Table 3
Total Financing Cost
(Million)
YoY%
3Q'05 3Q'04 Change 9M'05
Constant Pesos
Interest Expense 428 423 1.3 1,389
Interest Income (2) (35) (95.3) (73)
Foreign Exchange Loss (Gain) 63 (212) -- (264)
Monetary Position (Gain) (135) (188) (28.5) (283)
Other Financial Expenses (Gain)* 223 152 47.1 471
Total Financing Cost (Gain) 578 140 314.3 1,240
Nominal Dollars
Interest Expense 40 36 11.3 126
Interest Income (0) (3) (95.2) (6)
Foreign Exchange Loss (Gain) 6 (18) -- (24)
Monetary Position (Gain) (13) (16) (21.2) (26)
Other Financial Expenses (Gain)* 21 13 63.2 43
Total Financing Cost (Gain) 53 12 355.3 112
YoY% LTM YoY%
9M'04 Change 2005 2004 Change
Constant Pesos
Interest Expense 1,198 15.9 1,841 1,649 11.6
Interest Income (61) 19.9 (98) (115) (14.6)
Foreign Exchange Loss (Gain) 244 -- (429) 456 --
Monetary Position (Gain) (493) (42.6) (532) (738) (27.9)
Other Financial Expenses (Gain)* 399 18.2 600 571 5.2
Total Financing Cost (Gain) 1,286 (3.6) 1,382 1,823 (24.2)
Nominal Dollars
Interest Expense 101 24.3 165 139 19.0
Interest Income (5) 22.7 (9) (10) (12.0)
Foreign Exchange Loss (Gain) 20 -- (39) 37 --
Monetary Position (Gain) (42) (38.5) (47) (62) (23.9)
Other Financial Expenses (Gain)* 33 29.2 54 48 13.9
Total Financing Cost (Gain) 107 4.5 124 151 (18.1)
* Net of other interest income.
* Includes effect on derivative transactions
Taxes
Accumulated accrued income tax and profit sharing to workers as of September 30, 2005 decrease to US$4 million due to a deferred tax benefit recorded during the quarter derived mainly from foreign exchange losses recorded during the quarter and lower taxable income in the Mexican companies during the quarter due to higher interest expense.
Table 4: Taxes and Profit Sharing to Workers
Table 4
Taxes and Profit Sharing to Workers
(Million)
YoY%
3Q'05 3Q'04 Change 9M'05
Constant Pesos
Accrued Income Tax 100 103 (2.1) 216
Deferred Income Tax (gain) (68) 45 -- (742)
Total Income Tax 32 147 (78.1) (526)
Profit Sharing to Workers 7 31 (79.1) 50
Total Taxes and PSW 39 179 (78.3) (476)
Nominal Dollars
Accrued Income Tax 9 9 7.5 20
Deferred Income Tax (gain) (6) 4 -- (67)
Total Income Tax 3 12 (75.5) (48)
Profit Sharing to Workers 1 3 (76.7) 4
Total Taxes and PSW 4 15 (75.7) (43)
YoY% LTM YoY%
9M'04 Change 2005 2004 Change
Constant Pesos
Accrued Income Tax 304 (28.8) 62 183 (66.1)
Deferred Income Tax (gain) (143) 417.9 (803) (22) 3,581.8
Total Income Tax 161 -- (741) 161 --
Profit Sharing to Workers 90 (43.8) 82 67 23.7
Total Taxes and PSW 250 -- (658) 227 --
Nominal Dollars
Accrued Income Tax 26 (24.5) 6 16 (62.4)
Deferred Income Tax (gain) (12) 466.2 (72) (2) 4,097.9
Total Income Tax 14 -- (67) 14 --
Profit Sharing to Workers 8 (40.7) 7 6 28.3
Total Taxes and PSW 22 -- (59) 19 --
Consolidated Net Loss
During the quarter, the Company recorded a consolidated net loss of US$10 million compared to a consolidated net gain of US$5 million during the same quarter last year. This variation is mainly the result of higher total financing cost due to an exchange rate loss and loss on some derivative transactions.
Capital Expenditures (CAPEX)
Capital expenditures for the quarter totaled US$32.5 million primarily for maintenance purposes, compared with US$20 million in 3Q'04. Flat Glass and Glass Containers accounted for 50 percent and 28 percent of total Capex consumption, respectively. Glassware represented 21 percent of total consolidated Capex for the quarter and was mainly invested in an electric furnace that will start operations next quarter.
Consolidated Financial Position
Consolidated gross debt as of September 30, 2005 totaled US$1,496 million, a QoQ increase of US$33 million.
Net debt, which is calculated deducting cash and cash equivalents as well as cash collateralizing debt accounted for in other long term assets, decreased QoQ by US$11 million to US$1,269. On a YoY comparison, net debt increased US$74 million.
As of 3Q'05, the Company had a cash balance of US$227 million, of which US$201 million was recorded as cash and cash equivalents and US$26 million, which corresponds to cash collaterizing debt, that was classified as other long term assets. As of September 30, 2005, 16 percent of this cash balance was restricted. Restricted cash includes cash collateralizing debt.
Table 5
Debt Indicators
(Million dollars; except as indicated)
3Q'05 2Q'05 1Q'05 4Q'04 3Q'04
Interest Coverage
(EBITDA/ Total Net Financial Exp.)
(Times) LTM 1.6 1.7 1.8 2.0 2.0
Leverage
(Total Debt / EBITDA) (Times) LTM 4.2 4.1 4.2 4.1 4.2
(Total Net Debt / EBITDA) (Times)
LTM 3.3 3.3 3.3 3.3 3.4
Total Debt 1,496 1,463 1,495 1,507 1,518
Short-Term Debt(1) 309 395 339 293 276
Long-Term Debt 1,187 1,067 1,156 1,213 1,242
Cash and Equivalents(2) 227 182 211 279 323
Total Net Debt 1,269 1,280 1,284 1,227 1,195
Currency Mix (%) dlls&Euros/
Pesos / UDI's 86/8/6 85/9/6 82/10/8 81/11/8 81/10/9
(1) Short term debt includes current maturities of long-term debt.
(2) Includes cash collateralizing debt accounted for in the other long
term assets
- The Company's average life of debt as of 3Q'05 was 3.9 years compared
with 4.0 years for 3Q'04.
- Short term debt as of September 30, 2005 decreased by US$86 million, to
21 percent as a percentage of total debt, compared with 27 percent in
2Q'05. These amounts include current maturities of long term debt.
- 27 percent of total short term debt maturities are at the Holding Co.
level.
- Revolving and other short-term debt, including trade related, accounted
for 45 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$20 million to US$144 million from US$164
as of June 30, 2005, and as of 3Q'05 represented 47 percent of total
short term debt.
- Short Term Market debt, excluding current maturities of long term
market debt, is mostly Euro Commercial Paper and "Certificados
Bursatiles" that the Company uses on a regular basis to finance short-
term needs and accounts for 9 percent of total short term debt.
- Approximately 56 percent of debt maturities due in 2006 are at the
operating subsidiary level and are principally related to syndicated
facilities.
- Market maturities during 2006 include medium-term notes denominated in
UDI's. Maturities for 2007 include the Senior Notes at the Holding
Company level.
- Market maturities from 2008, 2009 and thereafter, include the Senior
Notes due 2011 at VENA, the 2010 Secured Term Loan at VENA, long-term
"Certificados Bursatiles", a Private Placement and the Senior Notes due
2013 at the Holding Company level.
Cash Flow
Net free cash flow for the quarter increased to US$41 million compared to US$40 million in 3Q'04. Recovery of working capital YoY given a reduction in receivables at Flat Glass due to the securitization program and to better inventory management in the Glass Containers business unit helped compensate for higher net interest expense during the quarter.
On a LTM basis, the Company recorded net free cash flow of US$2 million compared with US$62 million in the same period last year. Recovery of working capital helped compensate for higher interest expenses, higher CAPEX needs and cash taxes paid.
Table 6: Cash Flow Analysis
Table 6
Cash Flow from Operations Analysis(1)
(Million)
YoY%
3Q'05 3Q'04 Change 9M'05
Constant Pesos
EBITDA 1,082 1,075 0.6 2,860
Net Interest Expense(2) (577) (360) 60.5 (1,621)
Capex (350) (235) 48.7 (904)
Working Capital(3) 360 (29) -- 257
Dividends (19) (11) 73.7 (169)
Cash Taxes (paid) recovered (53) 23 -- (271)
Net Free Cash Flow 443 464 (4.5) 152
Nominal Dollars
EBITDA 100 92 9.0 261
Net Interest Expense(2) (54) (30) 76.6 (147)
Capex (32) (20) 62.7 (83)
Working Capital(3) 33 (3) -- 25
Dividends (2) (1) 81.5 (15)
Cash Taxes (paid) recovered (5) 2 -- (24)
Net Free Cash Flow 41 40 1.5 17
YoY% LTM YoY%
9M'04 Change 2005 2004 Change
Constant Pesos
EBITDA 3,131 (8.6) 3,849 4,291 (10.3)
Net Interest Expense(2) (1,163) 39.3 (2,076) (1,752) 18.5
Capex (786) 15.1 (1,573) (1,313) 19.8
Working Capital(3) (628) -- 324 (331) --
Dividends (178) (5.0) (227) (178) 27.6
Cash Taxes (paid) recovered 2 -- (306) 4 --
Net Free Cash Flow 379 (59.9) (9) 721 --
Nominal Dollars
EBITDA 267 (2.1) 348 363 (4.2)
Net Interest Expense(2) (98) 50.4 (187) (146) 27.7
Capex (67) 23.0 (141) (111) 26.9
Working Capital(3) (54) -- 32 (29) --
Dividends (15) 2.1 (21) (15) 41.6
Cash Taxes (paid) recovered 0 -- (28) 0 --
Net Free Cash Flow 33 (49.9) 2 62 (96.5)
(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
VVP Trade Receivables Securitization Program
On August 25, 2005 the Company announced that its subsidiary Vitro Plan, S.A. de C.V. ("Vitro Plan"), Vitro's flat glass division, closed on August 22nd, 2005 the private issuance of US$21.5 million in Notes, placed through a trust, at an interest rate of 6.5 percent. The trust was specifically formed for this securitization transaction. Interest and principal on the debt from the Notes are payable from receivables to be originated by four subsidiaries of Vitro Plan. The Vitro Plan subsidiaries that will be assigning receivables to the trust are: Distribuidora Nacional de Vidrio, S.A.de C.V. ("Dinavisa"), Vitro Flotado Cubiertas, S.A. de C.V. ("VFC"), Vitro Automotriz,S. A. de C.V. ("VAU") , and Vitro Vidrio y Cristal, S.A. de C.V.("VVC") This Mechanism has proven to be cost efficient financing for Working Capital, as well as being innovative in the Mexican Market. Vitro Plan will use the proceeds to finance working capital and debt refinancing. The transaction will not increase the company's on-balance sheet debt. The transaction received a rating of A.mx from Standard & Poor's Mexico.
The first milestones to the Company's Strategic Plan announced during the second quarter of this year aimed at reducing the Holding Company's debt:
Vitro in Discussions with Libbey Inc. to Pursue the Sale of its 51 Percent of Vitrocrisa
On July 27, 2005 the Company announced that it is in discussions to pursue the sale of its 51 percent stake in Vitrocrisa to Libbey Inc. Vitrocrisa is a joint venture between Vitro and Libbey, and is the largest manufacturer of glass tableware in Latin America. Libbey currently owns 49 percent of the shares of Vitrocrisa and serves as the exclusive distributor of Vitrocrisa's products to the United States and Canada since the joint venture's inception in 1997. With annual sales of US$236 million for 2004, Vitrocrisa manufactures and distributes glassware for the retail, food service, and industrial business lines of the glassware industry.
VENA and VVP Credit Facilities
On September 26, 2005 the Company announced the successful closing of two Credit Facilities for US$150 million with an eighteen month maturity. The first Credit Facility is a US$45 million secured working capital facility for Vitro Plan, S.A. de C.V. (Flat Glass) to purchase inventory and refinance debt. The second Credit Facility is a US$105 million unsecured guaranteed facility for Vitro Envases Norteamerica, S.A. de C.V. (VENA) to refinance debt.
Vitro Offers for Sale its Corporate Headquarters
On October 11, 2005 the Company announced that it is offering its corporate headquarters located in San Pedro Garza Garcia, Mexico for sale. The company has entered into a formal process to sell two corporate office buildings and surrounding undeveloped land. One building covers 119,000 square feet built on a property of 4.7 acres and the other covers 67,000 square feet built on a property of 3.8 acres. The offer also includes 26.6 acres of undeveloped land.
Flat Glass
(47 percent of LTM Consolidated Sales)
Sales
Flat Glass sales for the quarter increased 3.1 percent YoY to US$287 million from US$278 million.
Domestic sales decreased 12.7 percent YoY, mainly as a result of lower construction-related volumes. On a QoQ comparison construction-related volumes have increased 12 percent compared with 2Q'05. Prices in this line continue to be stable, increasing 1 percent compared to the same quarter last year.
Automotive sales increased 6.2 percent YoY driven by larger volumes from new platforms launched this year. These new platforms improved product mix at the OEM line and continue to compensate for lower volumes in the Auto Glass Replacement ("AGR") market.
Sales from foreign subsidiaries continue an upward trend increasing 11.2 percent YoY to US$151 million from US$136 million. Sales at the Spanish subsidiary increased 16.9 percent YoY compared with the same quarter last year. In addition, sales at Vitro America rose 5.7 percent, compared with 3Q'04 mainly driven by higher volumes in the construction market. Vitro Colombia's sales rose 26.5 percent during the same period as a result of increased demand and better product mix.
EBIT & EBITDA
EBIT decreased 19.3 percent YoY to US$15 million from US$18 million, while EBITDA fell 14.8 percent to US$29 million from US$34 million. During the same period, EBIT and EBITDA margins decreased 1.4 and 2.1 percentage points, respectively.
On a YoY comparison, EBIT and EBITDA continue to be affected by lower volumes to the domestic construction market and the AGR, in addition to higher energy costs. However, comparing QoQ, EBIT and EBITDA improved 103 and 30 percent, respectively. The recovery of production efficiencies and higher volumes at the OEM line helped improved EBIT and EBITDA generation for this quarter compared to 2Q'05.
The Spanish and Colombian subsidiaries continue to generate strong EBITDA, with increases of 15 and 34 percent YoY, respectively.
Table 7: Flat Glass
Table 7
Flat Glass
(Million)
YoY%
3Q'05 3Q'04 Change 9M'05
Constant Pesos
Consolidated Net sales 3,097 3,194 (3.1) 9,135
Net Sales
Domestic Sales 602 772 (22.0) 1,813
Exports 853 919 (7.1) 2,513
Foreign Subsidiaries 1,642 1,504 9.2 4,809
EBIT 159 208 (23.7) 277
EBITDA 315 397 (20.5) 777
EBIT Margin 5.1% 6.5% -1.4 pp 3.0%
EBITDA Margin 10.2% 12.4% -2.2 pp 8.5%
Nominal Dollars
Consolidated Net sales 287 278 3.1 836
Domestic Sales 57 65 (12.7) 166
Export Sales 79 77 2.4 228
Foreign Subsidiaries 151 136 11.2 443
EBIT 15 18 (19.3) 26
EBITDA 29 34 (14.8) 71
EBIT Margin 5.1% 6.5% -1.4 pp 3.1%
EBITDA Margin 10.2% 12.3% -2.1 pp 0.0%
Volumes
Flat Glass (Thousands of m2B)(2) 35,532 39,177 (9.3) 101,716
Capacity utilization
Flat Glass furnaces(1) 106% 106% 0 pp
Flat Glass auto 89% 76% 13 pp
YoY% LTM YoY%
9M'04 Change 2005 2004 Change
Constant Pesos
Consolidated Net sales 9,528 (4.1) 12,134 12,670 (4.2)
Net Sales
Domestic Sales 2,438 (25.6) 2,585 3,404 (24.0)
Exports 2,707 (7.2) 3,214 3,431 (6.3)
Foreign Subsidiaries 4,384 9.7 6,335 5,835 8.6
EBIT 607 (54.3) 522 859 (39.2)
EBITDA 1,175 (33.9) 1,208 1,618 (25.3)
EBIT Margin 6.4% -3.4pp 4.3% 6.8% -2.5pp
EBITDA Margin 12.3% -3.8pp 10.0% 12.8% -2.8pp
Nominal Dollars
Consolidated Net sales 825 1.3 1,105 1,093 1.1
Domestic Sales 206 (19.5) 233 289 (19.6)
Export Sales 227 0.1 289 284 1.6
Foreign Subsidiaries 392 12.9 584 519 12.5
EBIT 52 (50.4) 48 73 (34.5)
EBITDA 101 (29.1) 110 138 (20.1)
EBIT Margin 6.4% -3.3pp 4.3% 6.8% -2.5pp
EBITDA Margin 12.2% -12.2pp 9.9% 12.8% -2.9pp
Volumes
Flat Glass (Thousands of
m2B)(2) 115,965 (12.3) 139,068 150,305 (7.5)
Capacity utilization
Flat Glass furnaces(1)
Flat Glass auto
(1) Capacity utilization may sometimes be greater than 100 percent
because pulling capacity is calculated based on a certain number of
changes in glass color & thickness, determined by historical
averages.
(2) m2B = Reduced Squared Meters
Glass Containers
(43 percent of LTM Consolidated Sales)
Sales
Sales increased 16 percent YoY to US$281 million from US$242 million. On a comparable basis, excluding VANCAN which was divested on September 2004, sales rose 20 percent.
The main drivers behind the 18 percent YoY increase in domestic sales were higher beer and soft drinks volumes, and increased demand from CFT (Cosmetics, Fragrances and Toiletries) line.
Export sales grew 11.7 percent due to the rise in sales at the CFT and Wine & Liquor lines in the US, with both higher volumes and better product mix.
Sales from Glass Containers' foreign subsidiaries rose 16.4 percent YoY, reflecting increased demand in Central and South America.
EBIT and EBITDA
EBIT for the quarter increased 85.5 percent YoY to US$38 million from US$20 million in 3Q'04. EBITDA for the same period rose 29.1 percent to US$63 million from US$49 million. On a comparable basis, excluding VANCAN, EBIT and EBITDA increased 95 and 33 percent, respectively. EBIT and EBITDA margins rose YoY 5.0 and 2.3 percentage points, respectively.
EBITDA growth continues to be driven by higher volumes, improved production efficiencies and better product mix, which more than offset increased energy and maintenance costs.
EBITDA from Mexican glass containers operations, which is VENA's core business and represents approximately 82 percent of total EBITDA, rose 33 percent YoY.
Table 8: Glass Containers
Table 8
Glass Containers
(Million)
YoY%
3Q'05 3Q'04 Change 9M'05
Constant Pesos
Consolidated Net sales 3,037 2,817 7.8 8,547
Net Sales
Domestic Sales 1,875 1,754 6.9 5,206
Exports 833 772 7.9 2,409
Foreign Subsidiaries 329 292 12.8 932
EBIT 407 237 71.4 957
EBITDA 678 574 18.3 1,823
EBIT Margin 13.4% 8.4% 5 pp 11.2%
EBITDA Margin 22.3% 20.4% 1.9 pp 21.3%
Nominal Dollars
Consolidated Net sales 281 242 16.0 778
Domestic Sales 174 148 18.0 473
Export Sales 77 69 11.7 220
Foreign Subsidiaries 30 26 16.4 85
EBIT 38 20 85.5 87
EBITDA 63 49 29.1 166
EBIT Margin 13.4% 8.4% 5 pp 11.2%
EBITDA Margin 22.4% 20.1% 2.3 pp 21.3%
Glass Containers
Domestic (Millions of Units) 1,214 1,063 14.2 3,312
Exports (Millions of Units) 313 311 0.6 921
Total 1,527 1,374 11.1 4,233
Capacity utilization (furnaces) 94% 94% 0 pp
Capacity utilization (production lines) 99% 98% 1 pp
Soda Ash (Thousands Tons) 150 141 6.4 441
YoY% LTM YoY%
9M'04 Change 2005 2004 Change
Constant Pesos
Consolidated Net sales 8,033 6.4 11,153 10,686 4.4
Net Sales
Domestic Sales 4,855 7.2 6,794 6,583 3.2
Exports 2,312 4.2 3,092 2,922 5.8
Foreign Subsidiaries 866 7.6 1,268 1,181 7.3
EBIT 658 45.4 1,100 810 35.8
EBITDA 1,639 11.2 2,368 2,161 9.6
EBIT Margin 8.2% 3 pp 9.9% 7.6% 2.3 pp
EBITDA Margin 20.4% 0.9 pp 21.2% 20.2% 1 pp
Nominal Dollars
Consolidated Net sales 689 12.9 1,007 913 10.3
Domestic Sales 408 15.9 610 551 10.8
Export Sales 204 7.6 281 258 9.1
Foreign Subsidiaries 77 11.0 115 104 10.7
EBIT 56 55.5 100 69 44.4
EBITDA 139 19.3 213 183 16.8
EBIT Margin 8.2% 3 pp 9.9% 7.6% 2.3 pp
EBITDA Margin 20.2% 1.1 pp 21.2% 20.0% 1.2 pp
Glass Containers
Domestic (Millions of Units) 2,885 14.8 4,352 3,764 15.6
Exports (Millions of Units) 895 2.9 1,190 1,148 3.7
Total 3,780 12.0 5,542 4,912 12.8
Capacity utilization (furnaces)
Capacity utilization (production lines)
Soda Ash (Thousands Tons) 425 3.8
Glassware
(9 percent of LTM Consolidated Sales)
Sales
Sales decreased 19.9 percent YoY to US$49 million from US$61 million in 3Q'04. On a comparable basis, excluding Bosco, sales declined 6 percent.
During the quarter, domestic sales decreased 29.1 percent partially due to the divestiture of Bosco in April 2005. In addition, domestic sales reflected lower volumes at the wholesale and industrial product lines.
Sales decline was partially offset by a better product mix in the retail and industrial product lines during the quarter compared with 3Q'04.
EBIT and EBITDA
EBIT for the quarter increased YoY 30.5 percent to 2 million. EBITDA for the same period decreased 13.8 percent to US$6 million from US$7 million. During the same period, excluding Bosco, EBITDA decreased 9 percent. EBIT and EBITDA margins rose YoY 1.7 and 0.9 percentage points, respectively.
Higher energy costs and lower capacity utilization continue to be the main factors affecting EBITDA margins.
Cost reduction efforts helped compensated for the above mentioned factors, with savings in salaries, packaging costs and distribution expenses.
Table 9: Glassware
Table 9
Glassware
(Million)
YoY%
3Q'05 3Q'04 Change 9M'05
Constant Pesos
Consolidated Net sales 524 713 (26.5) 1,715
Net Sales
Domestic Sales 305 467 (34.7) 1,069
Exports 219 246 (10.9) 646
EBIT 23 19 22.5 31
EBITDA 68 86 (21.4) 191
EBIT Margin 4.4% 2.6% 1.8 pp 1.8%
EBITDA Margin 13.0% 12.1% 0.9 pp 11.1%
Nominal Dollars
Consolidated Net sales 49 61 (19.9) 155
Domestic Sales 28 40 (29.1) 97
Export Sales 20 21 (2.4) 59
EBIT 2 2 30.5 3
EBITDA 6 7 (13.8) 17
EBIT Margin 4.4% 2.7% 1.7 pp 1.8%
EBITDA Margin 13.0% 12.1% 0.9 pp 11.1%
Sales mix glassware products
(Volume terms)
Retail 31.8% 29.3% 2.5 pp 33.5%
Wholesaler 24.1% 21.9% 2.2 pp 28.3%
Industrial 39.8% 44.6% -4.8 pp 33.5%
OEM 4.3% 4.1% 0.2 pp 4.6%
Capacity utilization (installed) 58% 75% -17.6 pp
Capacity utilization (available) 80% 83% -3.1 pp
YoY% LTM YoY%
9M'04 Change 2005 2004 Change
Constant Pesos
Consolidated Net sales 2,015 (14.9) 2,431 2,713 (10.4)
Net Sales
Domestic Sales 1,308 (18.3) 1,571 1,773 (11.4)
Exports 707 (8.7) 860 940 (8.5)
EBIT 57 (46.5) 57 143 (59.9)
EBITDA 270 (29.2) 263 431 (38.9)
EBIT Margin 2.8% -1 pp 2.4% 5.3% -2.9 pp
EBITDA Margin 13.4% -2.3 pp 10.8% 15.9% -5.1 pp
Nominal Dollars
Consolidated Net sales 171 (9.2) 218 229 (5.0)
Domestic Sales 111 (13.1) 141 150 (6.4)
Export Sales 60 (1.8) 77 79 (2.4)
EBIT 5 (41.8) 5 12 (56.8)
EBITDA 23 (23.9) 24 36 (34.5)
EBIT Margin 2.8% -1 pp 2.3% 5.1% -2.8 pp
EBITDA Margin 13.3% -2.2 pp 10.8% 15.7% -4.9 pp
Sales mix glassware products
(Volume terms)
Retail 34.4% -0.9 pp 32.1% 34.0% -1.9 pp
Wholesaler 26.6% 1 pp 26.0% 26.3% -0.3 pp
Industrial 34.6% -1.1 pp 37.6% 35.3% 2.3 pp
OEM 4.5% 0.1 pp 4.3% 4.3% 0 pp
CONSOLIDATED
VITRO, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS, (MILLION)
Third Quarter
INCOME STATEMENT Constant Pesos Nominal Dollars
Item 2005 2004 % Var. 2005 2004 % Var.
1 Consolidated Net Sales 6,733 6,799 (1.0) 624 588 6.1
2 Cost of Sales 4,872 5,025 (3.0) 451 434 4.0
3 Gross Income 1,861 1,774 4.9 172 154 12.1
4 SG&A Expenses 1,282 1,327 (3.4) 119 115 3.3
5 Operating Income 579 447 29.5 54 39 38.2
6 Interest Expense 428 423 1.3 40 36 11.3
7 Interest Income (2) (35) (95.3) (0) (3) (95.2)
Other Financial Expenses
(net) 223 152 47.1 21 13 63.2
8 Exchange Loss (Gain) 63 (212) -- 6 (18) --
9 Gain from Monet. Position 135 188 (28.5) 13 16 (21.2)
10 Total Financing Cost 578 140 314.3 53 12 355.3
11 Other Income (71) (81) 11.6 (6) (7) 10.6
13 Inc. (loss) bef. Tax & PSW (71) 227 -- (6) 20 --
14 Income Tax and PSW 39 179 (78.3) 4 15 (75.7)
17 Net Income (Loss) (110) 48 -- (10) 5 --
18 Net Income (loss) of Maj.
Int. (69) (5) -- (6) 0 --
19 Net Income (loss) of Min.
Int. (41) 53 -- (4) 5 --
January - September
INCOME STATEMENT Constant Pesos Nominal Dollars
Item 2005 2004 % Var. 2005 2004 % Var.
1 Consolidated Net Sales 19,651 19,805 (0.8) 1,792 1,705 5.2
2 Cost of Sales 14,508 14,586 (0.5) 1,323 1,255 5.4
3 Gross Income 5,142 5,218 (1.5) 470 450 4.4
4 SG&A Expenses 3,901 3,959 (1.5) 355 341 4.1
5 Operating Income 1,242 1,259 (1.4) 114 108 5.3
6 Interest Expense 1,389 1,198 126 101 24.3
7 Interest Income (73) (61) 19.9 (6) (5) 22.7
Other Financial Expenses
(net) 471 399 18.2 43 33 29.2
8 Exchange Loss (Gain) (264) 244 -- (24) 20 --
9 Gain from Monet. Position 283 493 (42.6) 26 42 (38.5)
10 Total Financing Cost 1,240 1,286 (3.6) 112 107 4.5
11 Other Income (458) 188 -- (42) 16 --
13 Inc. (loss) bef. Tax &
PSW (456) 162 -- (39) 17 --
14 Income Tax and PSW (476) 250 -- (43) 22 --
17 Net Income (Loss) 20 (89) -- 4 (5) --
18 Net Income (loss) of
Maj. Int. (129) (195) 33.8 (10) (14) 27.8
19 Net Income (loss) of
Min. Int. 149 107 39.9 14 9 47.6
LTM
INCOME STATEMENT Constant Pesos Nominal Dollars
Item 2005 2004 % Var. 2005 2004 % Var.
1 Consolidated Net
Sales 26,056 26,374 (1.2) 2,360 2,261 4.4
2 Cost of Sales 19,208 19,313 (0.5) 1,739 1,655 5.1
3 Gross Income 6,848 7,061 (3.0) 621 605 2.5
4 SG&A Expenses 5,294 5,316 (0.4) 479 457 4.8
5 Operating Income 1,555 1,745 (10.9) 142 149 (4.6)
6 Interest Expense 1,841 1,649 11.6 165 139 19.0
7 Interest Income (98) (115) (14.6) (9) (10) (12.0)
Other Financial
Expenses (net) 600 571 5.2 54 48 13.9
8 Exchange Loss (Gain) (429) 456 -- (39) 37 --
9 Gain from Monet.
Position 532 738 (27.9) 47 62 (23.9)
10 Total Financing Cost 1,382 1,823 (24.2) 124 151 (18.1)
11 Other Income (785) 75 -- (70) 6 --
13 Inc. (loss) bef. Tax
& PSW (612) (3) 22,830.9 (52) 3 --
14 Income Tax and PSW (658) 227 -- (59) 19 --
17 Net Income (Loss) 47 (230) -- 7 (16) --
18 Net Income (loss) of
Maj. Int. (217) (382) (43.1) (17) (29) 41.5
19 Net Income (loss) of
Min. Int. 264 152 74.2 24 13 83.3
VITRO, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
As of September 30, (Million)
Constant Pesos
Item BALANCE SHEET 2005 2004 % Var.
20 Cash & Cash Equivalents 2,166 3,465 (37.5)
21 Trade Receivables 1,514 2,449 (38.2)
22 Inventories 4,289 4,080 5.1
23 Other Current Assets 2,375 1,621 46.5
24 Total Current Assets 10,345 11,615 (10.9)
25
26 Prop., Plant & Equipment 17,876 18,744 (4.6)
27 Deferred Assets 2,619 1,941 35.0
28 Other Long-Term Assets 371 602 (38.4)
29 Total Assets 31,211 32,902 (5.1)
30 Short-Term & Curr. Debt 3,330 3,225 3.3
31 Trade Payables 2,120 2,274 (6.8)
32 Other Current Liabilities 2,993 2,820 6.2
33 Total Curr. Liab. 8,444 8,319 1.5
34 Long-Term Debt 12,813 14,612 (12.3)
35 Other LT Liabilities 1,838 1,858 (1.1)
36 Total Liabilities 23,095 24,789 (6.8)
37 Majority interest 5,276 5,364 (1.6)
38 Minority Interest 2,839 2,749 3.3
39 Total Shar. Equity 8,115 8,113 0.0
Nominal Dollars
Item BALANCE SHEET 2005 2004 % Var.
20 Cash & Cash Equivalents 201 297 (32.4)
21 Trade Receivables 140 212 (33.9)
22 Inventories 397 355 12.0
23 Other Current Assets 220 140 57.0
24 Total Current Assets 959 1,004 (4.5)
25
26 Prop., Plant & Equipment 1,657 1,603 3.4
27 Deferred Assets 243 170 42.9
28 Other Long-Term Assets 34 53 (34.7)
29 Total Assets 2,892 2,829 2.2
30 Short-Term & Curr. Debt 309 276 11.9
31 Trade Payables 196 196 0.1
32 Other Current Liabilities 277 243 14.0
33 Total Curr. Liab. 783 716 9.4
34 Long-Term Debt 1,187 1,242 (4.4)
35 Other LT Liabilities 170 159 6.9
36 Total Liabilities 2,140 2,117 1.1
37 Majority interest 489 471 3.8
38 Minority Interest 263 242 8.9
39 Total Shar. Equity 752 713 5.5
Item FINANCIAL INDICATORS 3Q'05 3Q'04
20 Debt/EBITDA (LTM, times) 4.2 4.2
21 EBITDA/ Total Net Fin. Exp. (LTM, times) 1.6 2.0
22 Debt / Firm Value (times) 0.7 0.7
23 Debt/Equity (times) 2.0 2.2
24 Curr. Assets/Curr. Liab. (times) 1.2 1.4
25 Sales/Assets (times) 0.8 0.8
26 EPS (Ps$) * (0.23) (0.02)
27 EPADR (US$) * (0.06) (0.00)
*Based on the weighted average shares outstanding.
OTHER DATA
# Shares Issued (thousands) 324,000 324,000
31 # Average Shares Outstanding
(thousands) 295,728 295,728
34 # Employees 25,271 26,190
VITRO, S.A. DE C.V. AND SUBSIDIARIES
SEGMENTED INFORMATION
FOR THE PERIODS, (MILLION)
Third Quarter
Constant Pesos Nominal Dollars
2005 2004 % 2005 2004 %
FLAT GLASS
Net Sales 3,097 3,192 -3.0% 287 278 3.2%
Interd. Sales 1 (2) -- 0 (0) --
Con. Net Sales 3,097 3,194 -3.1% 287 278 3.1%
Expts. 853 919 -7.1% 79 77 2.4%
EBIT 159 208 -23.7% 15 18 -19.3%
Margin (1) 5.1% 6.5% 5.1% 6.5%
EBITDA 315 397 -20.5% 29 34 -14.8%
Margin (1) 10.2% 12.4% 10.2% 12.3%
Flat Glass Volumes
(Thousand m2B)(3)
Const + Auto 35,532 39,177 -9.3%
GLASS CONTAINERS
Net Sales 3,065 2,860 7.2% 284 246 15.4%
Interd. Sales 29 43 -33.9% 3 4 -28.5%
Con. Net Sales 3,037 2,817 7.8% 281 242 16.0%
Expts. 833 772 7.9% 77 69 11.7%
EBIT 407 237 71.4% 38 20 85.5%
Margin (1) 13.4% 8.4% 13.4% 8.4%
EBITDA 678 574 18.3% 63 49 29.1%
Margin (1) 22.3% 20.4% 22.4% 20.1%
Glass containers volumes
(MM Pieces)
Domestic 1,214 1,063 14.2%
Exports 313 311 0.6%
Total:Dom.+Exp. 1,527 1,374 11.1%
Soda Ash (Thousand Tons) 150 141 6.4%
GLASSWARE
Net Sales 525 723 -27.3% 49 61 -20.8%
Interd. Sales 1 10 -90.5% 0 1 -89.7%
Con. Net Sales 524 713 -26.5% 49 61 -19.9%
Expts. 219 246 -10.9% 20 21 -2.4%
EBIT 23 19 22.5% 2 2 30.5%
Margin (1) 4.4% 2.6% 4.4% 2.7%
EBITDA 68 86 -21.4% 6 7 -13.8%
Margin (1) 13.0% 12.1% 13.0% 12.1%
GLASSWARE (Volume Mix %)
Retail 31.8% 29.3%
Wholesale 24.1% 21.9%
Industrial 39.8% 44.6%
OEM 4.3% 4.1%
CONSOLIDATED (2)
Net Sales 6,763 6,850 -1.3% 626 592 5.8%
Interd. Sales 30 51 -40.6% 3 4 -35.6%
Con. Net Sales 6,733 6,799 -1.0% 624 588 6.1%
Expts. 1,905 1,936 -1.6% 176 167 5.7%
EBIT 579 447 29.5% 54 39 38.2%
Margin (1) 8.6% 6.6% 8.6% 6.6%
EBITDA 1,082 1,075 0.6% 100 92 9.0%
Margin (1) 16.1% 15.8% 16.1% 15.7%
January - September
Constant Pesos Nominal Dollars
2005 2004 % 2005 2004 %
FLAT GLASS
Net Sales 9,137 9,592 -4.7% 836 831 0.7%
Interd. Sales 2 64 -96.5% 0 5 -96.2%
Con. Net Sales 9,135 9,528 -4.1% 836 825 1.3%
Expts. 2,513 2,707 -7.2% 228 227 0.1%
EBIT 277 607 -54.3% 26 52 -50.4%
Margin (1) 3.0% 6.4% 3.1% 6.4%
EBITDA 777 1,175 -33.9% 71 101 -29.1%
Margin (1) 8.5% 12.3% 12.2%
Flat Glass Volumes
(Thousand m2B)(3)
Const + Auto 101,716 115,965 -12.3%
GLASS CONTAINERS
Net Sales 8,650 8,142 6.2% 787 698 12.7%
Interd. Sales 104 108 -4.6% 9 9 1.2%
Con. Net Sales 8,547 8,033 6.4% 778 689 12.9%
Expts. 2,409 2,312 4.2% 220 204 7.6%
EBIT 957 658 45.4% 87 56 55.5%
Margin (1) 11.2% 8.2% 11.2% 8.2%
EBITDA 1,823 1,639 11.2% 166 139 19.3%
Margin (1) 21.3% 20.4% 21.3% 20.2%
Glass containers
volumes (MM Pieces)
Domestic 3,312 2,885 14.8%
Exports 921 895 2.9%
Total:Dom.+Exp. 4,233 3,780 12.0%
Soda Ash (Thousand Tons) 441 425 3.8%
GLASSWARE
Net Sales 1,725 2,037 -15.3% 156 173 -9.6%
Interd. Sales 10 22 -52.8% 1 2 -49.9%
Con. Net Sales 1,715 2,015 -14.9% 155 171 -9.2%
Expts. 646 707 -8.7% 59 60 -1.8%
EBIT 31 57 -46.5% 3 5 -41.8%
Margin (1) 1.8% 2.8% 1.8% 2.8%
EBITDA 191 270 -29.2% 17 23 -23.9%
Margin (1) 11.1% 13.4% 11.1% 13.3%
GLASSWARE (Volume Mix %)
Retail 33.5% 34.4%
Wholesale 28.3% 26.6%
Industrial 33.5% 34.6%
OEM 4.6% 4.5%
CONSOLIDATED (2)
Net Sales 19,767 19,999 -1.2% 1,803 1,721 4.7%
Interd. Sales 116 194 -40.2% 10 17 -36.6%
Con. Net Sales 19,651 19,805 -0.8% 1,792 1,705 5.2%
Expts. 5,567 5,788 -3.8% 506 497 1.9%
EBIT 1,242 1,259 -1.4% 114 108 5.3%
Margin (1) 6.3% 6.4% 6.4% 6.4%
EBITDA 2,860 3,131 -8.6% 261 267 -2.1%
Margin (1) 14.6% 15.8% 14.6% 15.6%
LTM
Constant Pesos Nominal Dollars
2005 2004 % 2005 2004 %
FLAT GLASS
Net Sales 12,137 12,785 -5.1% 1,105 1,103 0.2%
Interd. Sales 2 115 -98.0% 0 10 -97.8%
Con. Net Sales 12,134 12,670 -4.2% 1,105 1,093 1.1%
Expts. 3,214 3,431 -6.3% 289 284 1.6%
EBIT 522 859 -39.2% 48 73 -34.5%
Margin (1) 4.3% 6.8% 4.3% 6.7%
EBITDA 1,208 1,618 -25.3% 110 138 -20.1%
Margin (1) 10.0% 12.8% 9.9% 12.6%
Flat Glass Volumes
(Thousand m2B)(3)
Const + Auto 139,068 150,305 -7.5%
GLASS CONTAINERS
Net Sales 11,309 10,830 4.4% 1,020 925 10.3%
Interd. Sales 156 144 7.7% 14 12 13.4%
Con. Net Sales 11,153 10,686 4.4% 1,007 913 10.3%
Expts. 3,092 2,922 5.8% 281 258 9.1%
EBIT 1,100 810 35.8% 100 69 44.4%
Margin (1) 9.9% 7.6% 9.9% 7.6%
EBITDA 2,368 2,161 9.6% 213 183 16.8%
Margin (1) 21.2% 20.2% 21.2% 20.0%
Glass containers
volumes (MM Pieces)
Domestic 4,352 3,764 15.6%
Exports 1,190 1,148 3.7%
Total:Dom.+Exp. 5,542 4,912 12.8%
Soda Ash (Thousand Tons)
GLASSWARE
Net Sales 2,452 2,743 -10.6% 220 232 -5.3%
Interd. Sales 20 31 -33.4% 2 3 -30.0%
Con. Net Sales 2,431 2,713 -10.4% 218 229 -5.0%
Expts. 860 940 -8.5% 77 79 -2.4%
EBIT 57 143 -59.9% 5 12 -56.8%
Margin (1) 2.4% 5.3% 2.3% 5.1%
EBITDA 263 431 -38.9% 24 36 -34.5%
Margin (1) 10.8% 15.9% 10.8% 15.7%
GLASSWARE (Volume Mix %)
Retail 32.1% 34.0%
Wholesale 26.0% 26.3%
Industrial 37.6% 35.3%
OEM 4.3% 4.3%
CONSOLIDATED (2)
Net Sales 26,235 26,664 -1.6% 2,376 2,285 4.0%
Interd. Sales 178 290 -38.6% 16 24 -35.1%
Con. Net Sales 26,056 26,374 -1.2% 2,360 2,261 4.4%
Expts. 7,166 7,405 -3.2% 647 633 2.1%
EBIT 1,555 1,745 -10.9% 142 149 -4.6%
Margin (1) 6.0% 6.6% 6.0% 6.6%
EBITDA 3,849 4,291 -10.3% 348 363 -4.2%
Margin (1) 14.8% 16.3% 14.7% 16.1%
(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 AND COMBINED OF VENA AND SUBSIDIARIES, VITRO PACKAGING AND
COMEGUA AND SUBSIDIARIES
Cash Flow from Operations Analysis(1)
(Million)
YoY%
3Q'05 3Q'04 Change 9M'05
Nominal Dollars
EBITDA 63 47 33.4 166
Net Interest Expense(2) (31) (17) 84.4 (70)
Capex (9) (7) 27.0 (31)
Working Capital(3) 9 (1) -- 4
Dividends -- -- -- (2)
Cash Taxes paid (4) (6) (30.4) (10)
Net Free Cash Flow 28 16 67.6 56
YoY% LTM YoY%
9M'04 Change 2005 2004 Change
EBITDA 134 23.5 213 175 21.4
Net Interest Expense(2) (49) 44.8 (72) (70) 2.2
Capex (22) 41.4 (67) (36) 86.5
Working Capital(3) (12) -- (20) (1) 1,908.4
Dividends (3) (49.7) (2) (3) (49.7)
Cash Taxes paid (15) (30.0) 6 (13) --
Net Free Cash Flow 34 65.7 58 52 11.9
(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 DE NORTEAMERICA, S.A. DE C.V., VITRO PACKAGING AND
EMPRESAS COMEGUA AND SUBSIDIARIES
CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
FOR THE PERIODS, (MILLION)
Third Quarter
INCOME STATEMENT Constant Pesos
Item 2005 2004 % Var.
1 Consolidated Net Sales 3,064 2,695 13.7
2 Cost of Sales 2,324 2,095 10.9
3 Gross Income 740 599 23.4
4 SG&A Expenses 334 377 (11.4)
5 Operating Income 406 223 82.3
6 Interest Expense 165 144 14.2
7 Interest Income (19) (4)
8 Other Financial Expenses 112 74 49.9
9 Exchange Loss (Gain) 30 (73) --
10 Gain from Monet. Position 54 59 (9.1)
11 Total Financing Cost 234 83 183.4
12 Other Income (19) 3 --
13 Inc. (loss) bef. Tax & PSW 153 143 7.2
14 Income Tax and PSW 54 124 (56.0)
15 Net Inc. (loss) Cont. Opns. 99 19 416.3
16 (Loss) on disposal of
discontinued operations -- 33
17 Income (loss) of Discont. Oper. 0 0 (66.7)
19 Net Income (Loss) 99 52 90.8
20
21 EBITDA 677 554 22.3
INCOME STATEMENT Nominal Dollars
Item 2005 2004 % Var.
1 Consolidated Net Sales 284 232 22.5
2 Cost of Sales 215 180 19.5
3 Gross Income 69 52 32.7
4 SG&A Expenses 31 33 (5.1)
5 Operating Income 38 19 97.3
6 Interest Expense 15 12 25.9
7 Interest Income (2) (0)
8 Other Financial Expenses 10 6 65.0
9 Exchange Loss (Gain) 3 (6) --
10 Gain from Monet. Position 5 5 0.1
11 Total Financing Cost 22 7 210.8
12 Other Income (2) 0 --
13 Inc. (loss) bef. Tax & PSW 14 12 16.0
14 Income Tax and PSW 5 10 (51.5)
15 Net Inc. (loss) Cont. Opns. 9 2 393.3
16 (Loss) on disposal of
discontinued operations -- 3
17 Income (loss)of Discont. Oper. 0 (0) --
19 Net Income (Loss) 9 5 100.0
20
21 EBITDA 63 47 33.4
January - September
INCOME STATEMENT Constant Pesos
Item 2005 2004 % Var.
1 Consolidated Net Sales 8,629 7,629 13.1
2 Cost of Sales 6,571 5,929 10.8
3 Gross Income 2,058 1,700 21.1
4 SG&A Expenses 1,104 1,093 1.0
5 Operating Income 954 607 57.1
6 Interest Expense 521 462 12.7
7 Interest Income (47) (9)
8 Other Financial Expenses 280 119 135.7
9 Exchange Loss (Gain) (120) 102 --
10 Gain from Monet. Position 119 164 (27.0)
11 Total Financing Cost 514 509 1.0
12 Other Income (40) (33) (21.1)
13 Inc. (loss) bef. Tax & PSW 400 65 513.0
14 Income Tax and PSW (23) 130 --
15 Net Inc. (loss) Cont. Opns. 423 (65) --
16 (Loss) on disposal of
discontinued operations -- (37) --
17 Income (loss)of Discont. Oper. 0 30 (100.0)
19 Net Income (Loss) 423 (72) --
20
21 EBITDA 1,819 1,580 15.1
INCOME STATEMENT Nominal Dollars
Item 2005 2004 % Var.
1 Consolidated Net Sales 785 654 20.1
2 Cost of Sales 598 508 17.7
3 Gross Income 187 146 28.5
4 SG&A Expenses 100 94 6.7
5 Operating Income 87 52 67.9
6 Interest Expense 47 39 20.8
7 Interest Income (4) (1) 438.2
8 Other Financial Expenses 25 10 154.6
9 Exchange Loss (Gain) (11) 8 --
10 Gain from Monet. Position 11 14 (21.9)
11 Total Financing Cost 46 43 8.7
12 Other Income (4) (3) (29.7)
13 Inc. (loss) bef. Tax & PSW 37 7 466.7
14 Income Tax and PSW (2) 11 --
15 Net Inc. (loss) Cont. Opns. 39 (5) --
16 (Loss) on disposal of
discontinued operations -- (3) --
17 Income (loss)of Discont. Oper. 0 3 (100.0)
19 Net Income (Loss) 39 (5) --
20
21 EBITDA 166 134 23.5
LTM
INCOME STATEMENT Constant Pesos
Item 2005 2004 % Var.
1 Consolidated Net Sales 11,262 10,121 11.3
2 Cost of Sales 8,645 7,860 10.0
3 Gross Income 2,616 2,261 15.7
4 SG&A Expenses 1,520 1,531 (0.7)
5 Operating Income 1,096 731 49.9
6 Interest Expense 675 625 8.1
7 Interest Income (62) (10) 522.4
8 Other Financial Expenses 328 172 90.4
9 Exchange Loss (Gain) (188) 199 --
10 Gain from Monet. Position 213 261 (18.3)
11 Total Financing Cost 540 725 (25.5)
12 Other Income (91) (66) 38.0
13 Inc. (loss) bef. Tax & PSW 464 (60) --
14 Income Tax and PSW (20) 134 --
15 Net Inc. (loss) Cont. Opns. 485 (194) --
16 (Loss) on disposal of
discontinued operations -- (37) --
17 Income (loss) of Discont. Oper. 0 71 (100.0)
19 Net Income (Loss) 485 (160) --
20
21 EBITDA 2,365 2,076 13.9
LTM
Nominal Dollars
2005 2004 % Var.
1 Consolidated Net Sales 1,016 864 17.6
2 Cost of Sales 780 671 16.3
3 Gross Income 236 193 22.2
4 SG&A Expenses 137 131 4.5
5 Operating Income 99 62 59.2
6 Interest Expense 61 52 15.4
7 Interest Income (6) (1) 568.1
8 Other Financial Expenses 30 14 105.8
9 Exchange Loss (Gain) (17) 16 --
10 Gain from Monet. Position 19 22 (13.4)
11 Total Financing Cost 48 60 (19.6)
12 Other Income (8) (6) (43.9)
13 Inc. (loss) bef. Tax & PSW 43 (3) --
14 Income Tax and PSW (2) 12 --
15 Net Inc. (loss) Cont. Opns. 45 (15) --
16 (Loss) on disposal of
discontinued operations -- (3) --
17 Income (loss) of Discont. Oper. 0 6 (100.0)
19 Net Income (Loss) 45 (12) --
21 EBITDA 213 175 21.4
VITRO ENVASES DE NORTEAMERICA, S.A. DE C.V., VITRO PACKAGING AND
EMPRESAS COMEGUA AND SUBSIDIARIES
CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
As of September 30, (Million)
Constant Pesos
Item BALANCE SHEET 2005 2004 % Var.
22 Cash & Cash Equivalents 1,518 378 301.4
23 Trade Receivables 773 758 2.0
24 Inventories 1,510 1,581 (4.5)
25 Notes receivable from
affiliates 496 355 39.6
26 Other Current Assets 935 545 71.4
28 Total Current Assets 5,232 3,617 44.6
29
30 Prop., Plant & Equipment 8,002 8,575 (6.7)
31 Deferred Assets 680 625 8.9
33 Other Long-Term Assets 246 31 702.1
34 Total Assets 14,160 12,848 10.2
35 Short-Term & Curr. Debt 778 223 249.1
36 Notes payable to affiliates (0) 40 --
37 Trade Payables 873 905 (3.5)
38 Other Current Liabilities 1,819 1,091 66.7
40 Total Curr. Liab. 3,471 2,259 53.6
41 Long-Term Debt 5,462 4,832 13.0
Long-Term notes payable to
affiliates 378 1,002
42 Other LT Liabilities 1,275 1,679 (24.1)
44 Total Liabilities 10,586 9,773 8.3
45 Majority interest 2,845 2,315 22.9
46 Minority Interest 730 760 (4.0)
47 Total Shar. Equity 3,574 3,075 16.2
Nominal Dollars
Item BALANCE SHEET 2005 2004 % Var.
22 Cash & Cash Equivalents 141 33 327.6
23 Trade Receivables 72 66 8.1
24 Inventories 140 138 1.6
25 Notes receivable from affiliates 46 30 52.5
26 Other Current Assets 87 46 88.6
28 Total Current Assets 485 313 54.9
29
30 Prop., Plant & Equipment 742 734 1.0
31 Deferred Assets 63 53 18.9
33 Other Long-Term Assets 23 3 738.9
34 Total Assets 1,312 1,103 18.9
35 Short-Term & Curr. Debt 72 19 273.2
36 Notes payable to affiliates 0 4 (100.0)
37 Trade Payables 81 77 4.6
38 Other Current Liabilities 169 94 79.9
40 Total Curr. Liab. 322 194 65.8
41 Long-Term Debt 506 411 23.3
Long-Term notes payable to
affiliates 35 88
42 Other LT Liabilities 118 143 (17.6)
44 Total Liabilities 981 835 17.4
45 Majority interest 264 200 31.7
46 Minority Interest 68 68 (0.5)
47 Total Shar. Equity 331 268 23.6
Item FINANCIAL INDICATORS 3Q'05 3Q'04
22 Debt/EBITDA (LTM, times) 2.8 2.9
23 EBITDA/ Total Net Fin. Exp. (LTM, times) 2.5 2.6
24 Debt / Firm Value (times) 1.9 1.9
25 Total Liab./Stockh. Equity (times) 3.0 3.1
26 Curr. Assets/Curr. Liab. (times) 1.5 1.6
Vitro Envases Norteamerica and Subsidiaries, Vitro Packaging, Inc. and
Empresas Comegua and Subsidiaries
CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN FINANCIAL POSITION
(Million of constant Mexican pesos as of September 30,2005)
FOR THE NINE MONTHS PERIOD
ENDED September 30
2005 2004
OPERATING ACTIVITIES:
Net (loss) from continuing operations 423 (65)
Items that did not require
(generate) resources: -- --
Depreciation and amortization 795 892
Amortization of debt issue costs 80 28
Provision for seniority premium and pension 70 81
Write-off and loss on sale of fixed assets (0) (8)
Deferred income tax and workers' profit sharing (511) (15)
858 912
(Increase) in trade receivables 95 (1)
Decrease (increase) in inventories 70 (168)
Increase (Decrease) in trade payables 3 145
Change in other current assets and liabilities, net 42 (352)
Pension funding payments (89) (69)
Resources generated from continued operations 1,012 468
Net income from discontinued operations (0) 30
Proceeds from disposal of discontinued operations -- 842
Operating assets and liabilities from discontinued
operations -- (68)
Resources generated from operations