SAN PEDRO GARZA GARCIA, Mexico, July 25 /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 2Q'07 unaudited results. Year-over-year consolidated
sales increased 5.0 percent and EBITDA rose 1.9 percent. The
consolidated EBITDA margin declined 40 basis points to 15.9 percent
for the quarter. Excluding the acquisition of Vidrios Panamenos
(VIPASA) in April 2006, consolidated sales rose 4.9 percent and
consolidated EBITDA increased 2.1 percent year-over-year. FINANCIAL
HIGHLIGHTS* 2Q'07 2Q'06 %Change Consolidated Net Sales 634 603 5.0%
Glass Containers 328 307 6.8% Flat Glass 298 286 4.0% Cost of Sales
455 437 4.2% Gross Income 179 167 7.3% Gross Margins 28.2% 27.6%
0.6 pp SG&A 122 116 5.3% SG&A % of sales 19.2% 19.1% 0.1 pp
EBIT 57 51 11.7% EBIT Margins 9.0% 8.5% 0.5 pp EBITDA 101 99 1.9%
Glass Containers 68 77 -10.8% Flat Glass 29 21 41.8% EBITDA Margins
15.9% 16.3% -0.4 pp Net Income 10 37 -72.0% Net Income Margins 1.6%
6.1% -4 pp Total Debt 1,373 1,297 5.9% Short Term Debt 45 580
-92.3% Long Term Debt 1,328 717 85.3% Average life of debt 7.4 3.4
Cash & Cash Equivalents(1) 212 148 43.2% Total Net Debt 1,161
1,149 1.0% * 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 2Q'07, the restricted cash
corresponds to US$35 million deposited in a trust to repay debt.
Federico Sada, Chief Executive Officer, commented "Results continue
to reflect solid performance. On a comparable basis, we recorded
the highest consolidated EBITDA for a second quarter since 2Q'01.
And this was achieved despite a 12 percent year-over-year increase
in natural gas prices." Enrique Osorio, Chief Financial Officer,
said "This quarter we refurbished two furnaces at Glass Containers,
which reduced fixed cost absorption as the business did not operate
at nearly 100 percent capacity as was the case in 2Q'06. This
resulted in a 10.8 percent decline in EBITDA at Glass Containers.
At the same time, taking advantage of those repairs we increased
capacity by 6 percent at Glass Containers as planned." "At Flat
Glass, EBITDA this quarter was up 41.8 percent year-over-year, the
second consecutive quarter of EBITDA growth and on a comparable
basis, the highest EBITDA since 4Q'04. As anticipated, we more than
compensated for slower sales at the OEM auto markets with increased
sales to the construction and automotive replacement markets."
Commenting on Vitro's balance sheet, Mr. Osorio said, "Net debt for
the quarter rose 1 percent year-over-year, or US$12 million, to
US$1,161 million. Keep in mind that this includes approximately
US$55 million in refinancing fees and tender offer costs related to
the debt refinancing completed in 1Q'07, as well as the impact of
higher year-over-year capital expenditures as announced last
quarter. As a result, net debt to EBITDA was 2.9x this quarter,
compared with 2.7x in 1Q'07. The average cost of debt, however,
declined 140 basis points to 9.5 percent, from 10.9 percent in
2Q'06." "Looking ahead into 3Q'07, we limited to US$3.7 million the
negative impact on EBITDA from the temporary interruption in
operations at two of our Glass Containers facilities due to an
interruption of natural gas supply. The lower than expected impact
reflects the quick response of our team and of PEMEX staff,
Tractebel and LNG suppliers. We are now focused on generating
increased efficiencies and capacity utilization to offset this
negative impact before the end of the quarter," noted Mr. Osorio.
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. Jun-07 Jun-06 Inflation in Mexico
Quarter -0.4% -0.2% LTM 4.0% 3.2% Inflation in USA Quarter 1.9%
1.9% LTM 3.1% 4.2% Exchange Rate Closing 10.7946 11.2723
Devaluation Quarter -2.2% 3.5% LTM -4.2% 4.6% 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. This report on Form 6-K is
incorporated by reference into the Registration Statement on Form
F-4 of Vitro, S.A.B. de C.V. (Registration Number 333- ________)
which is subject to completion. SPECIAL NOTE REGARDING NON-GAAP
FINANCIAL MEASURES A body of generally accepted accounting
principles is commonly referred to as "GAAP". A non-GAAP financial
measure is generally defined by the SEC as one that purports to
measure historical or future financial performance, financial
position or cash flows but excludes or includes amounts that would
not be so adjusted in the most comparable U.S. GAAP measure. We
disclose in this report certain non-GAAP financial measures,
including EBITDA. EBITDA for any period is defined as consolidated
net income (loss) excluding (i) depreciation and amortization, (ii)
non-cash items related to pension liabilities, (iii) total net
comprehensive financing cost (which is comprised of net interest
expense, exchange gain or loss, monetary position gain or loss and
other financing costs), (iv) other expenses, net, (v) income tax
and statutory employee profit sharing, (vi) provision for employee
retirement obligations, (vii) cumulative effect of change in
accounting principle, net of tax and (viii) (income) loss from
discontinued operations. In managing our business we rely on EBITDA
as a means of assessing our operating performance and a portion of
our management's compensation and employee profit sharing plan is
linked to EBITDA performance. We believe that EBITDA can be useful
to facilitate comparisons of operating performance between periods
and with other companies because it excludes the effect of (i)
depreciation and amortization, which represents a non-cash charge
to earnings, (ii) certain financing costs, which are significantly
affected by external factors, including interest rates, foreign
currency exchange rates and inflation rates, which have little or
no bearing on our operating performance, (iii) income tax and tax
on assets and statutory employee profit sharing, which is similar
to a tax on income and (iv) other expenses or income not related to
the operation of the business. EBITDA is also a useful basis of
comparing our results with those of other companies because it
presents operating results on a basis unaffected by capital
structure and taxes. We also calculate EBITDA in connection with
covenants related to some of our financings. We believe that EBITDA
enhances the understanding of our financial performance and our
ability to satisfy principal and interest obligations with respect
to our indebtedness as well as to fund capital expenditures and
working capital requirements. EBITDA is not a measure of financial
performance under U.S. GAAP or Mexican FRS. EBITDA should not be
considered as an alternate measure of net income or operating
income, as determined on a consolidated basis using amounts derived
from statements of operations prepared in accordance with Mexican
FRS, as an indicator of operating performance or as cash flows from
operating activity of as a measure of liquidity. EBITDA has
material limitations that impair its value as a measure of a
company's overall profitability since it does not address certain
ongoing costs of our business that could significantly affect
profitability such as financial expenses and income taxes,
depreciation, pension plan reserves or capital expenditures and
associated charges. The EBITDA presented herein relates to Mexican
FRS, which we use to prepare our consolidated financial statements.
This EBITDA calculation is expressly permitted by the Mexican
regulators that establish the accounting principles generally
accepted for use in such financial statements. 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 nine countries, located in North,
Central and South America, and Europe, and export to more than 40
countries worldwide. For further information, please visit our
website at: http://www.vitro.com/ Second Quarter 2007 results
Conference Call and Web cast Thursday, July 26, 2007 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/. A replay of the web cast will be available
through the end of the day on August 26, 2007. For inquiries
regarding the conference call, please contact Maura Gedid of
Breakstone Group via telephone at (646) 452-2336, or via email at .
DETAILED FINANCIAL INFORMATION FOLLOWS: Consolidated Results Sales
4 EBIT and EBITDA 4 Consolidated Financing Result 5 Taxes 6
Consolidated Net Income 6 Capital Expenditures 7 Consolidated
Financial Position 7 Cash Flow 8 Key Developments 10 Glass
Containers 12 Flat Glass 13 Consolidated Financial Statements 15
Segmented Information 16 Consolidated Results Sales Consolidated
net sales for 2Q'07 increased 5.0 percent YoY to US$634 million
from US$603 million last year. For LTM 2007, consolidated net sales
rose 6.6 percent to US$2,465 million from US$2,312 in LTM 2006.
Glass Containers sales for the quarter rose YoY by 6.8 percent
while Flat Glass sales grew 4.0 percent over the same time period.
During the quarter domestic, export and foreign subsidiaries' sales
increased 5.8 percent, 3.0 percent and 5.6 percent YoY
respectively. On a comparable basis, excluding the acquisition of
Vidrios Panamenos (VIPASA) in April 2006, consolidated net sales
for the quarter rose 4.9 percent YoY. Table 1: Total Sales Table 1
Sales (Million) YoY% YoY% 2Q'07 2Q'06 Change 6M'07 6M'06 Change
Constant Pesos Total Consolidated Sales 6,859 6,922 (0.9) 13,533
13,331 1.5 Glass Containers 3,556 3,533 0.6 7,009 6,497 7.9 Flat
Glass 3,223 3,280 (1.7) 6,352 6,642 (4.4) Domestic Sales 2,874
2,944 (2.4) 5,636 5,584 0.9 Export Sales 1,686 1,726 (2.3) 3,239
3,292 (1.6) Foreign Subsidiaries 2,299 2,252 2.1 4,658 4,454 4.6
Nominal Dollars Total Consolidated Sales 634 603 5.0 1,236 1,172
5.5 Glass Containers 328 307 6.8 641 573 11.8 Flat Glass 298 286
4.0 580 581 (0.3) Domestic Sales 267 252 5.8 517 491 5.3 Export
Sales 156 151 3.0 296 291 1.7 Foreign Subsidiaries 211 200 5.6 423
390 8.6 % Foreign Currency Sales* / Total Sales 58% 58% -0.3 pp 58%
58% -0.1 pp % Export Sales / Total Sales 25% 25% -0.5 pp 24% 25%
-0.8 pp * Exports + Foreign Subsidiaries LTM YoY% 2007 2006 Change
Constant Pesos Total Consolidated Sales 27,241 26,420 3.1 Glass
Containers 14,142 12,674 11.6 Flat Glass 12,700 13,360 (4.9)
Domestic Sales 11,567 11,036 4.8 Export Sales 6,182 6,668 (7.3)
Foreign Subsidiaries 9,492 8,715 8.9 Nominal Dollars Total
Consolidated Sales 2,465 2,312 6.6 Glass Containers 1,282 1,116
14.9 Flat Glass 1,147 1,162 (1.3) Domestic Sales 1,055 973 8.4
Export Sales 561 587 (4.5) Foreign Subsidiaries 850 751 13.1 %
Foreign Currency Sales* / Total Sales 57% 58% -0.7 pp % Export
Sales / Total Sales 23% 25% -2.7 pp * Exports + Foreign
Subsidiaries EBIT and EBITDA Consolidated EBIT for the quarter
increased 11.7 percent YoY to US$57 million from US$51 million last
year. EBIT margin increased 50 basis points to 9.0 percent. On a
LTM basis, consolidated EBIT increased 23.3 percent to US$212
million from US$172 million in LTM 2006. During this same period of
time, EBIT margin increased 120 basis points to 8.6 percent. EBIT
for the quarter at Glass Containers decreased by 8.1 percent YoY,
while at Flat Glass EBIT rose 150.5 percent. On a comparable basis,
Glass Containers EBIT, excluding VIPASA, decreased 7.6 percent YoY.
Consolidated EBITDA for the quarter increased 1.9 percent to US$101
million from US$99 million in 2Q'06. The EBITDA margin decreased 40
basis points YoY to 15.9 percent. On a comparable basis, excluding
the acquisition of VIPASA, consolidated EBITDA for the quarter
increased 2.1 percent YoY. On a LTM basis, consolidated EBITDA
increased 10.5 percent to US$395 million from US$358 million in LTM
2006. During the quarter, EBITDA at Glass Containers declined to
US$68 million from US$77 million or 10.8 percent YoY. On a
comparable basis, EBITDA for Glass Containers, excluding VIPASA,
decreased 10.6 percent YoY. EBITDA at Flat Glass increased 41.8
percent YoY to US$29 million from US$21 million. For details on
both business units pleaser refer to page 12 and 13, respectively.
Table 2: EBIT and EBITDA Table 2 EBIT and EBITDA (Million) YoY%
YoY% 2Q'07 2Q'06 Change 6M'07 6M'06 Change Constant Pesos
Consolidated EBIT 616 591 4.3 1,195 899 32.9 Margin 9.0% 8.5% 0.5
pp 8.8% 6.7% 2.1 pp Glass Containers 456 532 (14.3) 903 803 12.4
Flat Glass 172 72 138.3 326 130 150.1 Consolidated EBITDA 1,087
1,143 (4.9) 2,147 1,968 9.1 Margin 15.8% 16.5% -0.7 pp 15.9% 14.8%
1.1 pp Glass Containers 739 887 (16.7) 1,493 1,462 2.1 Flat Glass
315 237 32.7 609 476 27.9 Nominal Dollars Consolidated EBIT 57 51
11.7 109 78 40.1 Margin 9.0% 8.5% 0.5 pp 8.8% 6.7% 2.1 pp Glass
Containers 42 46 (8.1) 83 70 17.8 Flat Glass 16 6 150.5 30 11 171.8
Consolidated EBITDA 101 99 1.9 196 172 13.9 Margin 15.9% 16.3% -0.4
pp 15.9% 14.7% 1.2 pp Glass Containers 68 77 (10.8) 137 128 6.4
Flat Glass 29 21 41.8 56 41 34.3 LTM YoY% 2007 2006 Change Constant
Pesos Consolidated EBIT 2,339 1,976 18.4 Margin 8.6% 7.5% 1.1 pp
Glass Containers 1,902 1,509 26.0 Flat Glass 587 485 21.0
Consolidated EBITDA 4,368 4,093 6.7 Margin 16.0% 15.5% 0.5 pp Glass
Containers 3,130 2,804 11.6 Flat Glass 1,231 1,167 5.5 Nominal
Dollars Consolidated EBIT 212 172 23.3 Margin 8.6% 7.4% 1.2 pp
Glass Containers 172 132 30.6 Flat Glass 53 41 28.1 Consolidated
EBITDA 395 358 10.5 Margin 16.0% 15.5% 0.5 pp Glass Containers 284
246 15.2 Flat Glass 111 101 10.0 Consolidated Financing Result
Consolidated financing result for the quarter significantly
decreased 50.7 percent YoY to US$39 million compared with US$79
million during 2Q'06. This was driven by a non-cash foreign
exchange gain of US$19 million compared with a non-cash foreign
exchange loss of US$27 million during 2Q'06. During 2Q'07, the
Mexican peso experienced a 2.2 percent appreciation compared with a
3.5 percent depreciation in the same period last year. In addition,
higher interest income and a reduction in interest expense also
contributed to lower the total consolidated financing result. The
above mentioned factors more than compensated higher other
financial expenses of US$30 million compared with US$17 million in
2Q'06 as result of a lower value in derivative transactions. On a
LTM basis, total consolidated financing result decreased 43.1
percent YoY to US$125 million from US$220 million mainly due to
non-cash foreign exchange gain of US$33 million compared to a
non-cash foreign exchange loss of US$38 million during last year.
On a LTM basis, the Mexican peso experienced a 4.2 percent
appreciation compared with 4.6 percent depreciation in the same
period last year. In addition, lower interest expense of US$155
million compared with US$163 million during LTM 2006, higher
interest income of US$18 million compared with US$11 million, a
US$7 million decrease in Other Financial Expenses due to a higher
value in derivate transactions during LTM 2007 and a higher
monetary position of US$40 million compared with US$37 million
during LTM 2006 also contributed to lower the total consolidated
financing result. Table 3: Total Financing Result Table 3 Total
Financing Result (Million) YoY% YoY% 2Q'07 2Q'06 Change 6M'07 6M'06
Change Constant Pesos Interest Expense (395) (453) (12.8) (870)
(909) (4.3) Interest Income 78 24 220.8 120 53 125.9 Other
Financial Expenses* (328) (195) 68.6 (380) (491) (22.7) Foreign
Exchange Loss 201 (317) -- 45 (532) -- Monetary Position (Loss) 22
12 83.5 137 121 13.7 Total Financing Result (423) (929) (54.4)
(948) (1,758) (46.1) Nominal Dollars Interest Expense (37) (39)
(6.1) (79) (80) (0.7) Interest Income 7 2 239.3 11 5 135.7 Other
Financial Expenses* (30) (17) 83.9 (35) (44) (21.0) Foreign
Exchange Loss 19 (27) -- 5 (46) -- Monetary Position (Loss) 2 1
80.7 12 11 12.2 Total Financing Result (39) (79) (50.7) (86) (154)
(44.1) * Includes derivative transactions and interest related to
factoring transactions Table 3: Total Financing Result Table 3
Total Financing Result (Million) LTM YoY% 2007 2006 Change Constant
Pesos Interest Expense (1,717) (1,847) (7.0) Interest Income 197
120 64.7 Other Financial Expenses* (676) (759) (11.0) Foreign
Exchange Loss 360 (446) -- Monetary Position (Loss) 444 412 7.8
Total Financing Result (1,392) (2,521) (44.8) Nominal Dollars
Interest Expense (155) (163) (4.4) Interest Income 18 11 69.9 Other
Financial Expenses* (61) (68) (9.6) Foreign Exchange Loss 33 (38)
-- Monetary Position (Loss) 40 37 8.9 Total Financing Result (125)
(220) (43.1) * Includes derivative transactions and interest
related to factoring transactions Taxes Total Taxes increased from
a gain of US$37 million in 2Q'06 to an expense of US$4 million
during this quarter. During 2Q'06 the Company recorded a deferred
income tax gain due to the tax loss related to the sale of
Vitrocrisa's shares in June 2006. Accrued income tax, which
includes tax on assets, was reduced from US$8 million during 2Q'06
to US$3 million in 2Q'07 mainly due to the recovery of net
operating losses from previous years. Table 4: Taxes Table 4 Taxes
(Million) YoY% YoY% 2Q'07 2Q'06 Change 6M'07 6M'06 Change Constant
Pesos Accrued Income Tax 28 97 (71.3) 86 135 (36.3) Deferred Income
Tax (gain) 20 (530) -- 32 (418) -- Total Income Tax 48 (433) -- 118
(283) -- Nominal Dollars Accrued Income Tax 3 8 (69.6) 8 12 (33.3)
Deferred Income Tax (gain) 2 (45) -- 3 (35) -- Total Income Tax 4
(37) -- 11 (24) -- LTM YoY% 2007 2006 Change Constant Pesos Accrued
Income Tax 122 203 (39.9) Deferred Income Tax (gain) 497 (407) --
Total Income Tax 619 (204) -- Nominal Dollars Accrued Income Tax 11
17 (36.3) Deferred Income Tax (gain) 45 (35) -- Total Income Tax 56
(17) -- Consolidated Net Income During 2Q'07 the Company recorded a
consolidated net income of US$10 million compared to a net income
of US$37 million during the same period last year. This variation
is the result of a US$41 million increase in income taxes during
2Q'07 coupled with a US$40 million income from discontinued
operations associated with the sale of Vitrocrisa's shares during
2Q'06. Lower total financing costs of US$39 million compared with
US$79 million in 2Q'06 coupled with a US$6 million increase in EBIT
and a US$8 million decline in other expenses partially compensated
the above mentioned factors. Capital Expenditures (CAPEX) Capital
expenditures for the quarter totaled US$66 million, compared with
US$28 million in 2Q'06. Glass Containers represented 90 percent of
total capex consumption and included investment in major furnace
repairs, the transfer of Vidriera Mexico's ("Vimex") facilities to
Toluca and maintenance. Flat Glass accounted for 9 percent and was
mainly invested in maintenance and to a lesser extent in capacity
increase in Vitro America, Vitro's Flat Glass subsidiary in the US.
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$75 million to US$1,161. On a YoY comparison, net debt
increased US$12 million. As of 2Q'07, the Company had a cash
balance of US$212 million, of which US$177 million was recorded as
cash and cash equivalents and US$35 million was classified as other
long term assets. The US$35 million is restricted cash, which
corresponds to cash deposited in a trust to repay debt and
interests on the covenant defeasance of the VENA Senior Notes due
2011, recorded at Glass Containers. Consolidated gross debt as of
June 30, 2007 totaled US$1,373 million, a QoQ decrease of US$93
million and a YoY increase of US$76 million. As of 2Q'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) 2Q'07
1Q'07 4Q'06 3Q'06 2Q'06 Interest Coverage (EBITDA/ Total Net
Financial Exp.) (Times) LTM 2.0 2.0 1.7 1.6 1.6 Leverage (Total
Debt / EBITDA) (Times) LTM 3.4 3.6 3.0 3.3 3.7 (Total Net Debt /
EBITDA) (Times) LTM 2.9 2.7 2.7 3.1 3.3 Total Debt 1,373 1,466
1,141 1,209 1,297 Short-Term Debt 45 147 423 492 580 Long-Term
Debt(1) 1,328 1,319 718 717 717 Cash and Equivalents(2) 212 380 113
77 148 Total Net Debt 1,161 1,086 1,027 1,132 1,149 Currency Mix
(%) dlls&Euros/ Pesos/UDI's 98/2/0 96/2/2 94/6/0 90/6/4 90/7/3
(1) 2Q'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 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. (2) Cash & Cash Equivalents
include restricted cash which corresponded to cash collateralizing
long term debt and derivative instruments accounted for in current
and other long term assets. As of 2Q'07, the restricted cash
corresponds to US$35 million deposited in a trust to repay debt and
interests (see note 1). -- The Company's average life of debt as of
2Q'07 was 7.4 years compared with 3.4 years for 2Q'06. -- Short
term debt as of June 30, 2007, decreased by US$535 million to 3
percent as a percentage of total debt, compared with 45 percent in
2Q'06. -- Revolving and other short-term debt, including
trade-related debt, accounted for 88 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$412 million to US$5
million from US$417 million as of June 30, 2006. -- As of June 30,
2007 Vitro had an aggregate of US$135 million in off- balance sheet
financing related to sales of receivables and receivable
securitization programs. Flat Glass recorded US$74 million and
Glass Containers recorded US$61 million. -- Maturities for 2007
only include Credit Facilities at the subsidiary level. --
Maturities from 2008 and thereafter include, among others,
long-term "Certificados Bursatiles", the covenant defeasance of the
VENA Senior Notes due 2011 to be paid in 2008, 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 decreased to negative US$55 million compared to US$22
million in 2Q'06. This situation was mainly the result of higher
working capital and capex needs. The above mentioned factors were
partially compensated by lower cash taxes paid by our foreign
subsidiaries and higher EBITDA during the second quarter of 2007.
Net interest expense in 2Q'07 includes accrued interest expense
related to the US$1 billion senior notes paid in advance in
connection with the interest rate swap transaction. On a LTM basis,
the Company recorded a free cash flow of negative US$37 million
compared with US$51 million in LTM 2006. This result was mainly
caused by higher capex requirements and increased working capital
needs. Higher EBITDA helped to partially compensate the above
mentioned factors. Table 6: Cash Flow Analysis Table 6 Cash Flow
from Operations Analysis(1) (Million) YoY% YoY% 2Q'07 2Q'06 Change
6M'07 6M'06 Change Constant Pesos EBITDA 1,087 1,143 (4.9) 2,147
1,968 9.1 Net Interest Expense(2),(3) (468) (510) (8.2) (806)
(1,095) (26.4) Capex (714) (324) 120.6 (1,299) (555) 134.2 Working
Capital(4) (249) 223 -- (274) (148) 85.1 Dividends (141) (100) 41.4
(169) (146) 15.7 Cash Taxes (paid) recovered(5) (117) (181) (35.5)
(206) (39) 428.6 Net Free Cash Flow (602) 251 -- (607) (15) 4,014.8
Nominal Dollars EBITDA 101 99 1.9 196 172 13.9 Net Interest
Expense(2),(3) (43) (43) (0.4) (74) (96) (23.4) Capex (66) (28)
137.3 (119) (49) 145.0 Working Capital(4) (23) 19 - (25) (14) 79.9
Dividends (13) (8) 52.5 (15) (12) 24.1 Cash Taxes (paid)
recovered(5) (11) (16) (31.8) (19) (3) 509.8 Net Free Cash Flow
(55) 22 -- (56) (2) 2,260.5 (1) This statement is a Cash Flow
statement and it does not represent a Statement of Changes in
Financial Position according with 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) (5) Includes PSW (Profit Sharing to Workers) LTM YoY% 2007
2006 Change Constant Pesos EBITDA 4,368 4,093 6.7 Net Interest
Expense(2),(3) (2,147) (2,193) (2.1) Capex (1,956) (1,140) 71.6
Working Capital(4) (234) 253 -- Dividends (181) (175) 3.5 Cash
Taxes (paid) recovered(5) (242) (224) 7.9 Net Free Cash Flow (392)
615 -- Nominal Dollars EBITDA 395 358 10.5 Net Interest
Expense(2),(3) (192) (193) (0.8) Capex (178) (100) 78.2 Working
Capital(4) (24) 21 -- Dividends (16) (15) 11.7 Cash Taxes (paid)
recovered(5) (22) (20) 12.5 Net Free Cash Flow (37) 51 -- (1) This
statement is a Cash Flow statement and it does not represent a
Statement of Changes in Financial Position according with 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) (5) Includes PSW (Profit Sharing to
Workers) Key Developments Vimexico Closes Transaction to Increase
Ownership Stake in Vitro AFG to 100 Percent On July 24, 2007 the
Company announced that its subsidiary Vimexico, S.A. de C.V.
(Vimexico) closed the transaction to increase its ownership stake
to 100 percent in the Mexican joint venture Vitro AFG. As announced
on July 3, 2007, Vimexico has exercised its right to purchase its
partner, AFG Industries Inc.'s 50% stake for US$6 million, per the
terms of the joint venture agreement. Vitro AFG was a 50/50 joint
venture between Vimexico and AFG Industries, a subsidiary of the
Japanese company Asahi Glass Co. Limited. The joint venture
operates a float glass manufacturing facility located in Mexicali,
Baja California, Mexico. It was established to supply the United
States and Mexican construction markets with a wide range of flat
glass products, from the traditional 2 mm clear glass to 12 mm
thick glass. The joint venture began operations on November 18,
2003 with a co-investment of approximately US$100 million dollars.
This transaction was previously notified to the Mexican antitrust
Commission for its approval, which is expected to be obtained
before the end of August, 2007. Vitro AFG employs 230 people and
manufactures 155,000 tons per year of float glass for the
construction market. Vitro's two glass containers plants started
operations after a temporary interruption due to a failure of
natural gas supply On July 15, 2007 the Company announced that its
glass container production facilities located in Queretaro and
Guadalajara restarted operations on Friday, July 13 and Saturday
July 14, 2007, respectively. Operations at both plants had been
temporarily interrupted as a result of a failure in natural gas
supply caused by recent incidents at some of PEMEX gas pipelines.
The Company also announced that it was confident that within the
next few weeks it will be able to recover production volumes to
satisfy its customers' requirements. The negative impact on EBITDA
was limited to US$3.7 million. The lower than expected impact
reflects the quick response of our team and of PEMEX staff,
Tractebel and LNG suppliers. Organizational Changes at Glass
Containers On July 2, 2007 the Company announced that Alfonso Gomez
Palacio, President of the Glass Containers business unit, retired
on June 30, 2007 after an outstanding 23 year career and
performance at Vitro. David Gonzalez Morales assumed the
responsibility of President of the Glass Containers business unit
as of July 1st. 2007. The Company's management is certain that the
experience acquired by David during his 27 tenure at Vitro will
allow him to succeed in his new responsibility. During this time,
David has occupied diverse positions at Vitro. For the past six
months David has served as Glass Containers' Co-President. Before
that, he was President of Vitro Cristalglass' business unit at Flat
Glass. He has also held different positions at the Glass Containers
and Diverse Industries business units, as well as advisory role
positions at Vitro's joint venture companies including Vitro PQ,
Vancan, Ampolletas and Regioplast. Vitrocar opens its new
Operations Center: The beginning of a growth trend On June 22, 2007
the Company announced that in order to strengthen its position in
the Mexican marketplace in automotive replacement glass and
aggressively consolidate its business relationships with the
Mexican insurance industry as well as its broad base of individual
customers, Vitrocar inaugurated its new Operations Center located
in Santa Catarina, Nuevo Leon, Mexico. With the opening of this
Operations Center, along with the startup of branch #175 in the
chain, located at one side of the building, Vitrocar, Vimexico's
subsidiary, launches a series of initiatives that imply important
changes in the way it conducts business for the benefit of its
customers and institutional clients. Vitrocar, as the largest
national glass installation chain, represents for Vitro's
automotive business line the best option to participate in the
glass replacement market by reaching the end user. Currently it has
9 distribution centers and 175 installation centers throughout the
country, maintaining its leadership with a market share of more
than 50 percent. Its expansion plan in the replacement glass
installation channel considers a 2 digit annual growth until year
2010. Five Vitro's Glass Containers Awarded in the US On May 21,
2007 the Company announced that the Glass Packaging Institute (GPI)
awarded Vitro Packaging, Vitro's US-based subsidiary with five out
of eleven winning glass containers during its Clear Choice Awards
annual Presentation and Reception at the McCormick Place Convention
Complex in Chicago on May 7, 2007. Vitro's five winning products
were: Sonoma Vineyards Chardonnay and Merlot by Rodney Strong in
the Wine Category; Mountain Valley Spring Water by Mountain Valley
Spring Company in the Non-Carbonated Beverages Category; Crown
Royal XR by DIAGEO in the Distilled Spirits Category; Frutzzo
Organic Pomegranate Juice by Frutzzo, LLC in the Organic Beverage
Category; and OS Signature by Procter & Gamble in the Cosmetic
& Fragrance Products Category. The mentioned trade marks are
property of their respective owners. The Clear Choice Awards is the
only awards program that recognizes consumer product goods (CPG)
companies that package their food, wine, beverage, cosmetic and
fragrance products in glass in the United States. 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 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. Glass Containers (52 percent of LTM
2007 Consolidated Sales) Sales Sales increased 6.8 percent YoY to
US$328 million from US$307 million. On a comparable basis,
excluding VIPASA, which was acquired in April 2006, sales increased
6.6 percent YoY. The main drivers behind the 6.2 percent YoY
increase in domestic sales were higher volumes in the food, wine
& liquor and CFT (Cosmetics, Fragrances & Toiletries)
segments coupled with an improved price mix in the soft drinks,
beer and food segments. Export sales remained stable as the upward
trend in sales at the CFT and wine & liquor business lines
driven by better product mix partially compensated for a slight
drop in other segments. Sales from Glass Containers' foreign
subsidiaries rose 29.4 percent YoY as consequence of the
acquisition of VIPASA and the increased demand in the Central and
South American markets. EBIT and EBITDA EBIT for the quarter
decreased 8.1 percent YoY to US$42 million from US$46 million in
2Q'06. EBITDA for the same period fell 10.8 percent to US$68
million from US$77 million. During the quarter, on a comparable
basis, excluding VIPASA, Glass Containers EBIT decreased 7.6
percent YoY and EBITDA decreased 10.6 percent. The EBITDA decline
was mainly the result of two major furnace repairs and the
reignition of a furnace performed by the Company during the quarter
in comparison with the utilization of all furnaces during the same
period last year. Additionally, higher maintenance costs associated
with the ancillary equipment and production lines related to the
above mentioned furnaces as well as higher raw materials and energy
costs negatively affected EBITDA. EBITDA from Mexican glass
containers operations, which is VENA's core business and represents
approximately 81 percent of total EBITDA, decreased 7.0 percent YoY
due to the above mentioned factors. Table 7: Glass Containers Table
7 Glass Containers (Million) YoY% YoY% 2Q'07 2Q'06 Change 6M'07
6M'06 Change Constant Pesos Consolidated Net sales 3,556 3,533 0.6
7,009 6,497 7.9 Net Sales Domestic Sales 2,039 2,072 (1.6) 4,018
3,822 5.1 Exports 1,015 1,060 (4.3) 1,958 1,937 1.1 Foreign
Subsidiaries 502 400 25.4 1,033 738 39.9 EBIT 456 532 (14.3) 903
803 12.4 EBITDA 739 887 (16.7) 1,493 1,462 2.1 EBIT Margin 12.8%
15.1% -2.3 pp 12.9% 12.4% 0.5 pp EBITDA Margin 20.8% 25.1% -4.3 pp
21.3% 22.5% -1.2 pp Nominal Dollars Consolidated Net sales 328 307
6.8 641 573 11.8 Domestic Sales 189 178 6.2 368 336 9.3 Export
Sales 94 94 (0.5) 179 171 4.4 Foreign Subsidiaries 46 36 29.4 94 65
44.0 EBIT 42 46 (8.1) 83 70 17.8 EBITDA 68 77 (10.8) 137 128 6.4
EBIT Margin 12.8% 14.9% -2.1 pp 12.9% 12.2% 0.7 pp EBITDA Margin
20.8% 24.9% -4.1 pp 21.3% 22.4% -1.1 pp Glass Containers Domestic
(Millions of Units) 1,194 1,239 (3.6) 2,421 2,345 3.2 Exports
(Millions of Units) 344 360 (4.4) 653 665 (1.9) Total 1,539 1,600
(3.8) 3,073 3,010 2.1 Capacity utilization (furnaces) 86% 97% -11
pp Capacity utilization (cavities) 88% 87% 1 pp Alcali (Thousands
Tons sold)* 153 165 (7.1) 310 319 (2.8) * Includes sodium
carbonate, sodium bicarbonate, sodium chlorine, calcium chlorine
LTM YoY% 2007 2006 Change Constant Pesos Consolidated Net sales
14,142 12,674 11.6 Net Sales Domestic Sales 8,094 7,598 6.5 Exports
3,869 3,612 7.1 Foreign Subsidiaries 2,178 1,464 48.8 EBIT 1,902
1,509 26.0 EBITDA 3,130 2,804 11.6 EBIT Margin 13.4% 11.9% 1.5 pp
EBITDA Margin 22.1% 22.1% 0 pp Nominal Dollars Consolidated Net
sales 1,282 1,116 14.9 Domestic Sales 734 669 9.7 Export Sales 351
318 10.4 Foreign Subsidiaries 197 129 53.1 EBIT 172 132 30.6 EBITDA
284 246 15.2 EBIT Margin 13.4% 11.8% 1.6 pp EBITDA Margin 22.1%
22.1% 0 pp Glass Containers Domestic (Millions of Units) 4,965
4,627 7.3 Exports (Millions of Units) 1,330 1,278 4.1 Total 6,295
5,904 6.6 Capacity utilization (furnaces) Capacity utilization
(cavities) Alcali (Thousands Tons sold)* 627 624 0.4 * Includes
sodium carbonate, sodium bicarbonate, sodium chlorine, calcium
chlorine Flat Glass (47 percent of LTM 2007 Consolidated Sales)
Sales Flat Glass sales for the quarter increased 4.0 percent YoY to
US$298 million from US$286 million. Domestic sales increased 8.7
percent YoY, as result of higher sales due to an improved price mix
in the automotive segment. Construction-related sales remained
stable YoY with an 11 percent volume decline while prices increased
12 percent. Export sales increased 8.8 percent YoY mainly due to
higher construction- related volumes and increased automotive sales
as a result of an improved price mix. Automotive sales grew 8.7
percent YoY driven by a 30 percent sales increase in the Auto Glass
Replacement ("AGR") as a result of higher domestic and export
volumes. This factor more than compensated the sales decline in the
Original Equipment Manufacturer ("OEM") business line. Sales from
foreign subsidiaries continued an upward trend, increasing 0.4
percent YoY to US$165 million from US$164 million. Sales at Vitro
Cristalglass, the Spanish subsidiary, increased 28 percent YoY due
to the stronger demand of more value added products (improved
product mix) from the construction market but also due to the new
furnace now operating in La Rozada facility during the first
quarter of the present year. Sales at Vitro Colombia increased 28
percent compared with the same quarter last year due to a better
price mix and higher volumes linked to the strong demand from the
Venezuelan and Ecuadorian markets. EBIT & EBITDA EBIT increased
150.5 percent YoY to US$16 million from US$6 million, while EBITDA
increased 41.8 percent to US$29 million from US$21 million. During
the same period, EBIT and EBITDA margins grew 3.2 and 2.6
percentage points respectively. On a YoY comparison, enhanced
fixed-cost absorption due to the repair of the VF-1 furnace in
2Q'06 and better production efficiencies in our float glass
production facilities coupled with a better product mix in the
domestic Construction business line had a positive impact on the
EBIT and EBITDA generation and more than compensated higher raw
materials, freight and energy costs. Strong EBITDA generation from
Vitro Cristalglass and Vitro Colombia which grew 37 percent and 6
percent YoY, respectively also contributed to increase the EBITDA
of this Business Unit. Table 8: Flat Glass Table 8 Flat Glass
(Million) YoY% YoY% 2Q'07 2Q'06 Change 6M'07 6M'06 Change Constant
Pesos Consolidated Net sales 3,223 3,280 (1.7) 6,352 6,642 (4.4)
Net Sales Domestic Sales 755 763 (1.1) 1,447 1,570 (7.8) Exports
672 666 0.9 1,280 1,355 (5.5) Foreign Subsidiaries 1,797 1,851
(3.0) 3,625 3,716 (2.5) EBIT 172 72 138.3 326 130 150.1 EBITDA 315
237 32.7 609 476 27.9 EBIT Margin 5.3% 2.2% 3.1 pp 5.1% 2.0% 3.1 pp
EBITDA Margin 9.8% 7.2% 2.6 pp 9.6% 7.2% 2.4 pp Nominal Dollars
Consolidated Net sales 298 286 4.0 580 581 (0.3) Domestic Sales 70
65 8.7 134 138 (2.8) Export Sales 62 57 8.8 117 120 (2.1) Foreign
Subsidiaries 165 164 0.4 329 324 1.4 EBIT 16 6 150.5 30 11 171.8
EBITDA 29 21 41.8 56 41 34.3 EBIT Margin 5.4% 2.2% 3.2 pp 5.1% 1.9%
3.2 pp EBITDA Margin 9.8% 7.2% 2.6 pp 9.6% 7.1% 2.5 pp Volumes Flat
Glass (Thousands of m2R)(1) 33,425 33,564 (0.4) 64,294 68,065 (5.5)
Capacity utilization Flat Glass furnaces(2),(3) 109% 69% 40.3 pp
Flat Glass auto 80% 85% -5 pp (1) m2R = Reduced Squared Meters (2)
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. (3) The 69% capacity utilization during 2Q'06 was due to
the repair of the VF-1 furnace which was under maintenance until
mid-May 2006. LTM YoY% 2007 2006 Change Constant Pesos Consolidated
Net sales 12,700 13,360 (4.9) Net Sales Domestic Sales 3,073 3,052
0.7 Exports 2,313 3,056 (24.3) Foreign Subsidiaries 7,314 7,251 0.9
EBIT 587 485 21.0 EBITDA 1,231 1,167 5.5 EBIT Margin 4.6% 3.6% 1 pp
EBITDA Margin 9.7% 8.7% 1 pp Nominal Dollars Consolidated Net sales
1,147 1,162 (1.3) Domestic Sales 285 270 5.3 Export Sales 210 269
(22.1) Foreign Subsidiaries 652 622 4.8 EBIT 53 41 28.1 EBITDA 111
101 10.0 EBIT Margin 4.6% 3.6% 1 pp EBITDA Margin 9.7% 8.7% 1 pp
Volumes Flat Glass (Thousands of m2R)(1) 125,816 140,765 (10.6)
Capacity utilization Flat Glass furnaces(2),(3) Flat Glass auto (1)
m2R = Reduced Squared Meters (2) 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. (3) The 69% capacity
utilization during 2Q'06 was due to the repair of the VF-1 furnace
which was under maintenance until mid-May 2006. CONSOLIDATED VITRO,
S.A.B. DE C.V. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS, (MILLION) Second Quarter INCOME STATEMENT Constant
Pesos Nominal Dollars 2007 2006 %Var. 2007 2006 %Var. Consolidated
Net Sales 6,859 6,922 (0.9) 634 603 5.0 Cost of Sales 4,925 5,010
(1.7) 455 437 4.2 Gross Income 1,935 1,911 1.2 179 167 7.3 SG&A
Expenses 1,318 1,320 (0.2) 122 116 5.3 Operating Income 616 591 4.3
57 51 11.7 Other Expenses (Income), net 35 129 (73.2) 3 11 (71.7)
Interest Expense (395) (453) (12.8) (37) (39) (6.1) Interest Income
78 24 220.8 7 2 239.3 Other Financial Expenses (net) (328) (195)
68.6 (30) (17) 83.9 Exchange Loss 201 (317) -- 19 (27) -- Gain from
Monet. Position 22 12 83.5 2 1 80.7 Total Financing Result (423)
(929) (54.4) (39) (79) (50.7) Inc. (loss) bef. Tax 159 (466) -- 15
(40) -- Income Tax 48 (433) -- 4 (37) -- Net Inc. (loss) Cont.
Opns. 111 (33) -- 10 (3) -- Income (loss)of Discont. Oper. -- (31)
-- -- (3) -- Income on disposal of discontinued operations -- 494
-- -- 42 -- Extraordinary Items, Net -- -- -- -- -- -- Net Income
(Loss) 111 430 (74.1) 10 37 (72.0) Net Income (loss) of Maj. Int.
80 491 (83.6) 7 42 (82.3) Net Income (loss) of Min. Int. 31 (60) --
3 (5) -- January - June INCOME STATEMENT Constant Pesos Nominal
Dollars 2007 2006 % Var. 2007 2006 % Var. Consolidated Net Sales
13,533 13,331 1.5 1,236 1,172 5.5 Cost of Sales 9,719 9,798 (0.8)
888 862 3.0 Gross Income 3,814 3,533 8.0 348 310 12.4 SG&A
Expenses 2,619 2,633 (0.5) 239 232 3.1 Operating Income 1,195 899
32.9 109 78 40.1 Other Expenses (Income), net 467 66 603.3 43 6
613.2 Interest Expense (870) (909) (79) (80) (0.7) Interest Income
120 53 125.9 11 5 135.7 Other Financial Expenses (net) (380) (491)
(22.7) (35) (44) (21.0) Exchange Loss 45 (532) -- 5 (46) -- Gain
from Monet. Position 137 121 13.7 12 11 12.2 Total Financing Result
(948) (1,758) (46.1) (86) (154) (44.1) Inc. (loss) bef. Tax (220)
(925) 76.3 (19) (82) 76.5 Income Tax 118 (283) -- 11 (24) -- Net
Inc. (loss) Cont. Opns. (337) (643) 47.5 (30) (58) 48.2 Income
(loss)of Discont. Oper. -- (30) -- -- (2) -- Income on disposal of
discontinued operations -- 494 -- -- 42 -- Extraordinary Items, Net
-- -- -- -- -- -- Net Income (Loss) (337) (178) (89.2) (30) (18)
(65.0) Net Income (loss) of Maj. Int. (399) (104) (283.7) (36) (11)
(209.7) Net Income (loss) of Min. Int. 61 (74) -- 6 (7) -- Last
Twelve Months INCOME STATEMENT Constant Pesos Nominal Dollars 2007
2006 % Var. 2007 2006 % Var. Consolidated Net Sales 27,241 26,420
3.1 2,465 2,312 6.6 Cost of Sales 19,543 19,120 2.2 1,769 1,674 5.7
Gross Income 7,698 7,300 5.5 697 638 9.2 SG&A Expenses 5,358
5,324 0.6 485 467 3.9 Operating Income 2,339 1,976 18.4 212 172
23.3 Other Expenses (Income), net 180 97 85.9 16 8 97.6 Interest
Expense (1,717) (1,847) (7.0) (155) (163) (4.4) Interest Income 197
120 64.7 18 11 69.9 Other Financial Expenses (net) (676) (759)
(11.0) (61) (68) (9.6) Exchange Loss 360 (446) -- 33 (38) -- Gain
from Monet. Position 444 412 7.8 40 37 8.9 Total Financing Result
(1,392) (2,521) (44.8) (125) (220) (43.1) Inc. (loss) bef. Tax 767
(642) -- 70 (57) -- Income Tax 619 (204) -- 56 (17) -- Net Inc.
(loss) Cont. Opns. 148 (438) -- 14 (40) -- Income (loss)of Discont.
Oper. -- (27) -- 0 (2) -- Income on disposal of discontinued
operations (28) 494 -- (3) 42 -- Extraordinary Items, Net -- (120)
-- -- (10) -- Net Income (Loss) 120 (91) -- 11 (10) -- Net Income
(loss) of Maj. Int. 94 17 454.4 9 (1) -- Net Income (loss) of Min.
Int. 26 (108) -- 2 (10) -- VITRO, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS As of June 30, (Million) Constant
Pesos Nominal Dollars BALANCE SHEET 2007 2006 % Var. 2007 2006 %
Var. Cash & Cash Equivalents 1,910 1,370 39.5 177 118 49.4
Trade Receivables 1,530 1,578 (3.1) 142 138 2.5 Inventories 3,934
3,913 0.5 364 341 7.0 Other Current Assets 2,868 2,530 13.4 266 221
20.5 Current Assets from Disc. Operations -- -- -- -- -- -- Total
Current Assets 10,242 9,391 9.1 949 818 16.0 Prop., Plant &
Equipment 16,142 17,020 (5.2) 1,495 1,462 2.3 Deferred Assets 2,280
3,035 (24.9) 211 260 (18.6) LT Assets from Disc. Operations - - --
- - -- Other Long-Term Assets 728 448 62.6 67 38 75.8 Total Assets
29,392 29,894 (1.7) 2,723 2,578 5.6 Short-Term & Curr. Debt 485
6,779 (92.8) 45 580 (92.3) Trade Payables 2,180 2,057 6.0 202 178
13.5 Other Current Liabilities 2,532 2,555 (0.9) 235 222 5.7
Current Liabilities from Disc. Operations -- -- -- -- -- -- Total
Curr. Liab. 5,197 11,391 (54.4) 481 980 (50.9) Long-Term Debt
14,338 8,385 71.0 1,328 717 85.3 Other LT Liabilities 1,608 1,818
(11.5) 149 155 (3.9) LT Liabilities from Disc. Operations -- -- --
-- -- -- Total Liabilities 21,143 21,594 (2.1) 1,959 1,852 5.8
Majority interest 6,474 5,629 15.0 600 494 21.5 Minority Interest
1,775 2,671 (33.5) 164 232 (29.3) Total Shar. Equity 8,249 8,300
(0.6) 764 726 5.3 FINANCIAL INDICATORS 2Q'07 2Q'06 Debt/EBITDA
(LTM, times) 3.4 3.7 EBITDA/ Total Net Fin. Exp. (LTM, times) 2.0
1.6 Debt / (Debt + Equity) (times) 0.6 0.6 Debt/Equity (times) 1.8
1.8 Total Liab./Stockh. Equity (times) 2.6 2.6 Curr. Assets/Curr.
Liab. (times) 2.0 0.8 Sales/Assets (times) 0.9 0.9 EPS (Ps$) * 0.22
1.66 EPADR (US$) * 0.06 0.43 * Based on the weighted average shares
outstanding. OTHER DATA # Shares Issued (thousands) 386,857 324,000
# Average Shares Outstanding (thousands) 358,538 295,728 #
Employees 23,850 22,474 VITRO, S.A.B. DE C.V. AND SUBSIDIARIES
SEGMENTED INFORMATION FOR THE PERIODS, (MILLION) Second Quarter
Constant Pesos Nominal Dollars 2007 2006 % 2007 2006 % GLASS
CONTAINERS Net Sales 3,564 3,556 0.2% 329 309 6.4% Interd. Sales 8
23 -63.4% 1 2 -60.8% Con. Net Sales 3,556 3,533 0.6% 328 307 6.8%
Expts. 1,015 1,060 -4.3% 94 94 -0.5% EBIT 456 532 -14.3% 42 46
-8.1% Margin (1) 12.8% 15.1% 12.8% 14.9% EBITDA 739 887 -16.7% 68
77 -10.8% Margin (1) 20.8% 25.1% 20.8% 24.9% Glass containers
volumes (MM Pieces) Domestic 1,194 1,239 -3.6% Exports 344 360
-4.4% Total:Dom.+Exp. 1,539 1,600 -3.8% Soda Ash (Thousand Tons)
153 165 -7.1% FLAT GLASS Net Sales 3,225 3,280 -1.7% 298 286 4.0%
Interd. Sales 2 0 929.3% 0 0 1035.0% Con. Net Sales 3,223 3,280
-1.7% 298 286 4.0% Expts. 672 666 0.9% 62 57 8.8% EBIT 172 72
138.3% 16 6 150.5% Margin (1) 5.3% 2.2% 5.4% 2.2% EBITDA 315 237
32.7% 29 21 41.8% Margin (1) 9.8% 7.2% 9.8% 7.2% Flat Glass Volumes
(Thousand m2R)(3) Const + Auto 33,425 33,564 -0.4% CONSOLIDATED (2)
Net Sales 6,870 6,946 -1.1% 635 605 4.8% Interd. Sales 11 25 -55.9%
1 2 -52.8% Con. Net Sales 6,859 6,922 -0.9% 634 603 5.0% Expts.
1,686 1,726 -2.3% 156 151 3.0% EBIT 616 591 4.3% 57 51 11.7% Margin
(1) 9.0% 8.5% 9.0% 8.5% EBITDA 1,087 1,143 -4.9% 101 99 1.9% Margin
(1) 15.8% 16.5% 15.9% 16.3% January - June Constant Pesos Nominal
Dollars 2007 2006 % 2007 2006 % GLASS CONTAINERS Net Sales 7,032
6,544 7.5% 643 577 11.4% Interd. Sales 22 47 -52.8% 2 4 -51.2% Con.
Net Sales 7,009 6,497 7.9% 641 573 11.8% Expts. 1,958 1,937 1.1%
179 171 4.4% EBIT 903 803 12.4% 83 70 17.8% Margin (1) 12.9% 12.4%
12.9% 12.2% EBITDA 1,493 1,462 2.1% 137 128 6.4% Margin (1) 21.3%
22.5% 21.3% 22.4% Glass containers volumes (MM Pieces) Domestic
2,421 2,345 3.2% Exports 653 665 -1.9% Total:Dom.+Exp. 3,073 3,010
2.1% Soda Ash (Thousand Tons) 310 319 -2.8% FLAT GLASS Net Sales
6,359 6,642 -4.3% 580 581 -0.2% Interd. Sales 7 0 1483.7% 1 0
1557.9% Con. Net Sales 6,352 6,642 -4.4% 580 581 -0.3% Expts. 1,280
1,355 -5.5% 117 120 -2.1% EBIT 326 130 150.1% 30 11 171.8% Margin
(1) 5.1% 2.0% 5.1% 1.9% EBITDA 609 476 27.9% 56 41 34.3% Margin (1)
9.6% 7.2% 9.6% 7.1% Flat Glass Volumes (Thousand m2R)(3) Const +
Auto 64,294 68,065 -5.5% CONSOLIDATED (2) Net Sales 13,562 13,381
1.4% 1,239 1,176 5.3% Interd. Sales 29 50 -41.9% 3 4 -39.9% Con.
Net Sales 13,533 13,331 1.5% 1,236 1,172 5.5% Expts. 3,239 3,292
-1.6% 296 291 1.7% EBIT 1,195 899 32.9% 109 78 40.1% Margin (1)
8.8% 6.7% 8.8% 6.7% EBITDA 2,147 1,968 9.1% 196 172 13.9% Margin
(1) 15.9% 14.8% 15.9% 14.7% Last Twelve Months Constant Pesos
Nominal Dollars 2007 2006 % 2007 2006 % GLASS CONTAINERS Net Sales
14,201 12,777 11.1% 1,288 1,125 14.5% Interd. Sales 59 102 -42.2% 5
9 -40.7% Con. Net Sales 14,142 12,674 11.6% 1,282 1,116 14.9%
Expts. 3,869 3,612 7.1% 351 318 10.4% EBIT 1,902 1,509 26.0% 172
132 30.6% Margin (1) 13.4% 11.9% 13.4% 11.8% EBITDA 3,130 2,804
11.6% 284 246 15.2% Margin (1) 22.1% 22.1% 22.1% 22.1% Glass
containers volumes (MM Pieces) Domestic 4,965 4,627 7.3% Exports
1,330 1,278 4.1% Total:Dom.+Exp. 6,295 5,904 6.6% Soda Ash
(Thousand Tons) 627 624 0.4% FLAT GLASS Net Sales 12,707 13,361
-4.9% 1,148 1,162 -1.2% Interd. Sales 8 1 427.7% 1 0 455.5% Con.
Net Sales 12,700 13,360 -4.9% 1,147 1,162 -1.3% Expts. 2,313 3,056
-24.3% 210 269 -22.1% EBIT 587 485 21.0% 53 41 28.1% Margin (1)
4.6% 3.6% 4.6% 3.5% EBITDA 1,231 1,167 5.5% 111 101 10.0% Margin
(1) 9.7% 8.7% 9.7% 8.7% Flat Glass Volumes (Thousand m2R)(3) Const
+ Auto 125,816 140,765 -10.6% CONSOLIDATED (2) Net Sales 27,308
26,528 2.9% 2,472 2,321 6.5% Interd. Sales 67 109 -38.3% 6 10
-36.6% Con. Net Sales 27,241 26,420 3.1% 2,465 2,312 6.6% Expts.
6,182 6,668 -7.3% 561 587 -4.5% EBIT 2,339 1,976 18.4% 212 172
23.3% Margin (1) 8.6% 7.5% 8.6% 7.4% EBITDA 4,368 4,093 6.7% 395
358 10.5% Margin (1) 16.0% 15.5% 16.0% 15.5% (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. 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.; or Media
Relations, Albert Chico of Vitro S.A.B. de C.V., +52-81-8863-1661,
; or U.S. agency, Susan Borinelli, , or Maura Gedid, , both of
Breakstone Group, +1-646-452-2336 Web site: http://www.vitro.com/
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