SAN PEDRO GARZA GARCIA, NUEVO LEON, Mexico, April 28 /PRNewswire/
-- Vitro S.A.B. de C.V. (BMV: VITROA; NYSE: VTO) one of the world's
largest producers and distributors of glass products, today
announced 1Q'08 unaudited results. Year over year consolidated
sales increased 6.1 percent while EBITDA declined 15.6 percent. The
consolidated EBITDA margin dropped to 12.6 percent from 15.9
percent in the same period last year as natural gas prices
increased 23 percent. Commenting on the results for the quarter,
Enrique Osorio, Chief Financial Officer, said "The fundamentals of
our business have not changed, the top line was what we expected,
demand was strong and sales were up. In fact, on a comparable
basis, sales for the quarter reached an all-time high of $640
million. Higher energy costs and a temporary decline in production
resulting from the planned refurbishing of four glass container
furnaces, however, impacted EBITDA for the quarter. But overall,
our business remains strong." Mr. David Gonzalez, President of
Glass Containers, commented, "Containers sales remained strong
posting record comparable sales for a first quarter. Export sales
rose almost 14 percent year-over-year, including those to the US
market, proving that this is a fairly resilient business. Domestic
sales also performed well, up 3.5 percent despite Easter week this
year falling in the first quarter compared with the second quarter
last year." "EBITDA, in turn, decreased 15.1 percent year-over-year
largely due to a strong increase in natural gas prices, higher cost
of raw materials and the impact of having two cosmetics glass
container plants working in parallel as we transition production to
our new plant in Toluca. Four furnace repairs this quarter compared
to only two last year also contributed to a lower fixed cost
absorption," continued Mr. Gonzalez. Commenting on Flat Glass, Mr.
Hugo Lara noted, "Flat Glass sales increased 5.1 percent this
quarter. While sales in our US subsidiary declined, sales in Spain
continued to grow despite the contraction in residential
construction in the country. Auto sales, in turn, increased for
both the original equipment manufacturing and auto glass
replacement markets. EBITDA for the quarter, however, fell by 15.7
percent affected by higher energy and raw materials costs.
Following our strategy to extend our European presence, on April 1,
2008 we purchased a small glass company in Paris for 3.6 million
Euros. This company, now called Vitro Cristalglass France SAS, is
dedicated to the transformation and commercialization of value
added glass for the commercial and residential markets." Discussing
the financial front, Mr. Osorio noted, "As expected, net debt to
EBITDA rose to 3.3 times from 2.9 times in the fourth quarter of
last year, as working capital requirements were higher this
quarter. Capital expenditures to strengthen Vitro's market position
and expand our client base also contributed to the increase. The
average cost of debt, in turn, dropped 30 basis points
year-over-year to 9.2 percent." "Bottom line, the fundamentals of
our business remain strong and we will continue to build on Vitro's
strengths in the glass industry," Mr. Osorio closed. FINANCIAL
HIGHLIGHTS* 1Q'08 1Q'07 % Change Consolidated Net Sales 640 603
6.1% Glass Containers 336 312 7.5% Flat Glass 296 282 5.1% Cost of
Sales 472 433 9.1% Gross Income 167 170 -1.3% Gross Margins 26.2%
28.1% -1.9 pp SG&A 125 117 6.6% SG&A % of sales 19.6% 19.5%
0.1 pp EBIT 42 52 -19.3% EBIT Margins 6.6% 8.7% -2.1 pp EBITDA 81
96 -15.6% Glass Containers 58 68 -15.1% Flat Glass 22 26 -15.7%
EBITDA Margins 12.6% 15.9% -3.3 pp Net Income 30 (40) - Net Income
Margins 4.7% -6.7% +11 pp Total Debt 1,402 1,466 -4.4% Short Term
Debt 132 147 -10.4% Long Term Debt 1,270 1,319 -3.7% Average life
of debt 6.5 7.1 Cash & Cash Equivalents(1) 138 380 -63.8% Total
Net Debt 1,264 1,086 16.4% * Million US$ Nominal (1) Cash &
Cash Equivalents include restricted cash which corresponded to cash
collateralizing debt and derivatives instruments accounted for in
other current assets. As of 1Q'08, the restricted cash includes
US$33 million deposited in a trust to repay debt and interests. All
figures provided in this announcement are in accordance with
Mexican Financial Reporting Standards (Mexican FRS or NIFs) 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 US dollar terms, unless otherwise
stated, and may differ from the peso amounts due to the difference
between inflation and exchange rates. Mar-08 Mar-07 Inflation in
Mexico Quarter 1.5% 1.0% LTM 4.2% 4.2% Inflation in USA Quarter
1.3% 1.1% LTM 4.3% 3.1% Exchange Rate Closing 10.6962 11.0322
Devaluation Quarter -1.6% 2.0% LTM -3.0% 1.3% This announcement
contains historical information, certain management's expectations,
estimates 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- 144726). NEW
ACCOUNTING PRINCIPLES In 2007 and January 2008, the CINIF issued
the following NIFs and Interpretations of Financial Reporting
Standards (INIFs), which became effective for fiscal years
beginning on January 1, 2008: -- NIF B-2, Statement of Cash Flows.
-- NIF B-10, Effects of Inflation. -- NIF B-15, Translation of
Foreign Currencies. -- NIF D-3, Employee Benefits. -- NIF D-4,
Taxes on Income. -- INIF 5, Recognition of the Additional
Consideration Agreed to at the Inception of a Derivative Financial
Instrument to Adjust It to Fair Value. -- INIF 6, Timing of Formal
Hedge Designation. -- INIF 7, Application of Comprehensive Income
or Loss Resulting From a Cash Flow Hedge on a Forecasted Purchase
of a Non-Financial Asset. -- INIF 8, Effects of the Business Flat
Tax (IETU) -- INIF 9, Presentation of Comparative Financial
Statements Prepared under NIF B-10 Some of the significant changes
established by these standards are as follows: -- NIF B-2,
Statement of Cash Flows.- This NIF establishes general rules for
the presentation, structure and preparation of a cash flow
statement, as well as the disclosures supplementing such statement,
which replaces the statement of changes in financial position. NIF
B-2 requires that the statement show a company's cash inflows and
outflows during the period. Line items should be preferably
presented gross. Cash flows from financing activities are now
presented below those from investing activities (a departure from
the statement of changes in financial position). In addition, NIF
B-2 allows entities to determine and present their cash flows from
operating activities using either the direct or the indirect
method. -- NIF B-10, Effects of Inflation.- CINIF defines two
economic environments: a) inflationary environment, when cumulative
inflation of the three preceding years is 26 percent or more, in
which case, the effects of inflation should be recognized using the
comprehensive method; and b) non-inflationary environment, when
cumulative inflation of the three preceding years is less than 26
percent, in which case, no inflationary effects should be
recognized in the financial statements. Additionally, NIF B-10
eliminates the replacement cost and specific indexation methods for
inventories and fixed assets, respectively, and requires that the
cumulative gain or loss from holding non-monetary assets be
reclassified to retained earnings, if such gain or loss is
realized; the gain or loss that is not realized will be maintained
in stockholders' equity and charged to current earnings of the
period in which the originating item is realized. -- NIF B-15,
Translation of Foreign Currencies.- NIF B-15 eliminates
classification of integrated foreign operations and foreign
entities and incorporates the concepts of accounting currency,
functional currency and reporting currency. NIF B-15 establishes
the procedures to translate the financial information of a foreign
subsidiary: i) from the accounting to the functional currency; and
ii) from the functional to the reporting currency, and allows
entities to present their financial statements in a reporting
currency other than their functional currency. -- NIF D-3, Employee
Benefits.- This NIF includes current and deferred PSW (Profit
Sharing to Workers). Deferred PSW should be calculated using the
same methodology established in NIF D-4. It also includes the
career salary concept and the amortization period of most items is
reduced to five years. The beginning balance of gains and losses
from severance benefits should be amortized against the results of
2008. -- NIF D-4, Income Taxes .- This NIF relocates accounting for
current and deferred PSW to NIF D-3, eliminates the permanent
difference concept, redefines and incorporates various definitions
and requires that the cumulative income tax ("ISR") effect be
reclassified to retained earnings, unless it is identified with
some of the other comprehensive income items that have not been
applied against current earnings. -- INIF 5, Recognition of the
Additional Consideration Agreed To at the Inception of a Derivative
Financial Instrument to Adjust It to Fair Value.- INIF 5 states
that any additional consideration agreed to at the inception of a
derivative financial instrument to adjust it to its fair value at
that time should be part of the instrument's initial fair value and
not subject to amortization as established by paragraph 90 of
Bulletin C-10. INIF 5 also establishes that the effect of the
change should be prospectively recognized, affecting results of the
period in which this INIF becomes effective. If the effect of the
change is material, it should be disclosed. -- INIF 6, Timing of
Formal Hedge Designation.- INIF 6 states that hedge designations
may be made as of the date a derivative financial instrument is
contracted, or at a later date, provided its effects are
prospectively recognized as of the date when formal conditions are
met and the instrument qualifies as a hedging relationship.
Paragraph 51 a) of Bulletin C-10 only considered the hedge
designation at the inception of the transaction. -- INIF 7,
Application of Comprehensive Income or Loss Resulting From a Cash
Flow Hedge on a Forecasted Purchase of a Non-Financial Asset.- INIF
7 states that the effect of a hedge reflected in other
comprehensive income or loss resulting from a forecasted purchase
of a non-financial asset should be capitalized within the cost of
such asset, whose price is set through a hedge, rather than
reclassifying the effect to the results of the period affected by
the asset, as required by Paragraph 105 of Bulletin C-10. The
effect of this change should be recognized by applying any amounts
recorded in other comprehensive income or loss to the cost of the
acquired asset, as of the effective date of this INIF. -- INIF 8,
Effects of the Business Flat Tax (IETU).- Due to the new tax law,
the INIF 8 provides the guidance for the deferred tax recording
methodology given the two income tax regimes (ISR and IETU),
depending on the tax regime the company will substantially operate
according to its financial projections. -- INIF 9, Presentation of
Comparative Financial Statements Prepared under NIF B-10.- INIF 9
states that financial data for year 2008 is presented in nominal
pesos while for previous periods it is expressed in constant pesos
as of December 31, 2007. Due to the above mentioned situation,
financial data for last twelve months 2008 is a combination of
nominal pesos (for those months of year 2008) and constant pesos as
of December 31, 2007 (for those months of year 2007). 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 and derivative transactions),
(iv) other expenses, net, (v) income tax, (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 or 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.
Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), is one of the
largest glass manufacturers in the world. Through our subsidiary
companies we offer products with the highest quality standards and
reliable services to satisfy the needs of two distinct business
sectors: glass containers and flat glass. Our manufacturing
facilities produce, process, distribute and sell a wide range of
glass products that offer excellent solutions to multiple
industries that include: wine, beer, cosmetic, pharmaceutical, food
and beverage, as well as the automotive and construction industry.
Also, we supply raw materials, machinery and industrial equipment
to different industries. We constantly strive to improve the
quality of life for our employees as well as the communities in
which we do business by generating employment and economic
prosperity thanks to our permanent focus on quality and continuous
improvement as well as consistent efforts to promote sustainable
development. Our World Headquarters are located in Monterrey,
Mexico where Vitro was founded in 1909 and now embarks major
facilities and a broad distribution network in ten countries in the
Americas and Europe. Additionally, it exports its products to over
50 countries around the World. For more information, you can access
Vitro's Website at: http://www.vitro.com/ First Quarter 2008
results Conference Call and Web cast Tuesday, April 29, 2008 11:00
AM U.S. EDT - 10:00 A.M. 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 May 13, 2008. For inquiries regarding
the conference call, please contact Barbara Cano or Susan Borinelli
of Breakstone Group via telephone at (646) 452-2334, or via email
at DETAILED FINANCIAL INFORMATION FOLLOWS: Consolidated Results
Sales 5 EBIT and EBITDA 5 Consolidated Financing Result 6 Taxes 7
Consolidated Net Income 8 Capital Expenditures 8 Consolidated
Financial Position 8 Cash Flow 10 Key Developments 12 Glass
Containers 14 Flat Glass 15 Consolidated Financial Statements 17
Segmented Information 18 Sales Consolidated net sales for 1Q'08
increased 6.1 percent YoY to US$640 million from US$603 million
last year. For LTM 2008, consolidated net sales rose 6.6 percent to
US$2,597 million from US$2,435 in LTM 2007. Glass Containers sales
for the quarter rose YoY by 7.5 percent while Flat Glass sales grew
5.1 percent over the same time period. During the quarter domestic,
export and foreign subsidiaries' sales increased 7.5 percent, 9.8
percent and 2.1 percent YoY respectively. Table 1 Sales (Million)
YoY% LTM YoY% 1Q'08 1Q'07 Change 2008 2007 Change Pesos(1) Total
Consolidated Sales 6,881 6,889 (0.1) 28,583 28,155 1.5 Glass
Containers 3,613 3,543 2.0 14,708 14,484 1.5 Flat Glass 3,189 3,252
(2.0) 13,527 13,230 2.2 Domestic Sales 2,874 2,849 0.9 12,031
12,001 0.2 Export Sales 1,667 1,590 4.9 6,752 6,369 6.0 Foreign
Subsidiaries 2,340 2,450 (4.5) 9,800 9,785 0.2 Nominal Dollars
Total Consolidated Sales 640 603 6.1 2,597 2,435 6.6 Glass
Containers 336 312 7.5 1,341 1,261 6.3 Flat Glass 296 282 5.1 1,225
1,136 7.8 Domestic Sales 269 250 7.5 1,097 1,040 5.4 Export Sales
154 140 9.8 615 556 10.6 Foreign Subsidiaries 216 212 2.1 885 839
5.5 % Foreign Currency Sales* / Total Sales 58% 58% -0.5 pp 58% 57%
0.5 pp % Export Sales / Total Sales 24% 23% 0.8 pp 24% 23% 0.9 pp
(1) Financial data for year 2008 is presented in nominal pesos
while for previous periods it is expressed in constant pesos as of
December 31, 2007. For more details please refer to the note
regarding new accounting principles on page 2. * Exports + Foreign
Subsidiaries EBIT and EBITDA Consolidated EBIT for the quarter
decreased 19.3 percent YoY to US$42 million from US$52 million last
year. EBIT margin decreased 2.1 percentage points to 6.6 percent
from 8.7 percent. On a LTM basis, consolidated EBIT increased 12.6
percent to US$231 million from US$206 million in LTM 2007. During
this same period of time, EBIT margin increased 50 basis points to
8.9 percent from 8.4 percent. EBIT for the quarter at Glass
Containers decreased by 11.9 percent YoY, while at Flat Glass EBIT
decreased by 32.4 percent. Consolidated EBITDA for the quarter
declined by 15.6 percent to US$81 million from US$96 million in
1Q'07. The EBITDA margin decreased 3.3 percentage points YoY to
12.6 percent from 15.9 percent and was negatively affected, among
other factors, by higher energy and raw materials costs, the impact
of four furnaces under programmed maintenance, transition of
production of our new cosmetics glass container plant and having
Easter week during the quarter. On a LTM basis, consolidated EBITDA
decreased 4.4 percent to US$376 million from US$393 million in LTM
2007. During the quarter, EBITDA at Glass Containers decreased 15.1
percent YoY to US$58 million from US$68 million while EBITDA at
Flat Glass decreased 15.7 percent YoY to US$22 million from US$26
million. For details on both business units please refer to page 13
and 14, respectively. Table 2 EBIT and EBITDA (Million) YoY% LTM
YoY% 1Q'08 1Q'07 Change 2008 2007 Change Pesos(1) Consolidated EBIT
453 601 (24.5) 2,556 2,398 6.6 Margin 6.6% 8.7% -2.1 pp 8.9% 8.5%
0.4 pp Glass Containers 383 459 (16.5) 2,009 2,034 (1.2) Flat Glass
100 165 (39.2) 718 520 38.1 Consolidated EBITDA 870 1,098 (20.8)
4,152 4,576 (9.2) Margin 12.6% 15.9% -3.3 pp 14.5% 16.3% -1.8 pp
Glass Containers 623 776 (19.6) 2,948 3,373 (12.6) Flat Glass 239
310 (22.8) 1,250 1,210 3.3 Nominal Dollars Consolidated EBIT 42 52
(19.3) 231 206 12.6 Margin 6.6% 8.7% -2.1 pp 8.9% 8.4% 0.5 pp Glass
Containers 36 40 (11.9) 183 176 3.8 Flat Glass 9 14 (32.4) 64 43
48.3 Consolidated EBITDA 81 96 (15.6) 376 393 (4.4) Margin 12.6%
15.9% -3.3 pp 14.5% 16.2% -1.7 pp Glass Containers 58 68 (15.1) 268
292 (8.2) Flat Glass 22 26 (15.7) 112 102 9.6 (1) Financial data
for year 2008 is presented in nominal pesos while for previous
periods it is expressed in constant pesos as of December 31,2007.
For more details please refer to the note regarding new accounting
principles on page 2. Consolidated Financing Result Consolidated
financing result for the quarter decreased 65.0 percent YoY to
US$16 million compared with US$47 million during 1Q'07. This was
mainly driven by a non-cash foreign exchange gain of US$20 million
compared with a non-cash foreign exchange loss of US$14 million
during 1Q'07. During 1Q'08, the Mexican peso experienced a 1.6
percent appreciation compared with a 2.0 percent depreciation in
the same period last year. In addition, a US$9 million reduction in
interest expense related to the refinancing done at the beginning
of last year also contributed to lower the total consolidated
financing result. These factors more than compensated a decline in
monetary position as this effect was eliminated at the beginning of
year 2008 due to the new accounting principles in Mexico (please
refer to the related note on page 2). On a LTM basis, total
consolidated financing result decreased 30.2 percent YoY to US$116
million from US$166 million driven by two favorable factors: a
non-cash foreign exchange gain of US$27 million compared with a
non-cash foreign exchange loss of US$13 million during LTM 2007
driven by a 3.0 percent appreciation experienced by the Mexican
peso in LTM 2008 compared with a 1.3 percent depreciation in the
same period last year; and lower interest expense of US$143 million
compared with US$157 million, as a result of a decrease in the
interest rate. The above mentioned factors more than compensated a
lower monetary position due to the reason mentioned in the previous
paragraph. Table 3: Total Financing Result Table 3 Total Financing
Result (Million) YoY% LTM YoY% 1Q'08 1Q'07 Change 2008 2007 Change
Pesos(1) Interest Expense (361) (489) (26.2) (1,575) (1,831) (14.0)
Interest Income 16 44 (63.3) 148 148 (0.4) Other Financial
Expenses(2) (50) (54) (7.2) (505) (561) (9.8) Foreign Exchange
(Loss) 218 (161) -- 285 (163) -- Monetary Position (Loss)(3) - 119
-- 352 447 (21.3) Total Financing Result (177) (541) (67.3) (1,296)
(1,960) (33.9) Nominal Dollars Interest Expense (33) (43) (21.6)
(143) (157) (9.3) Interest Income 2 4 (60.8) 13 13 3.6 Other
Financial Expenses(2) (5) (5) 0.7 (46) (48) (4.8) Foreign Exchange
(Loss) 20 (14) -- 27 (13) -- Monetary Position (Loss)(3) - 10 -- 32
39 (18.6) Total Financing Result (16) (47) (65.0) (116) (166)
(30.2) (1) Financial data for year 2008 is presented in nominal
pesos while for previous periods it is expressed in constant pesos
as of December 31, 2007. For more details please refer to the note
regarding new accounting principles on page 2. (2) Includes
derivative transactions and interest related to factoring
transactions (3) According with the new accounting principles in
Mexico, the monetary position effect was eliminated at the
beginning of year 2008. For further details please refer to the
note regarding new accounting principles on page 2. Taxes Total
income tax decreased from an expense of US$6 million in 1Q'07 to a
gain of US$5 million during this quarter. Accrued income tax
increased to US$9 million from US$5 million in 1Q'07 due to higher
taxable profits in some of our foreign operations in the U.S. and
Europe. In addition, during this quarter we posted a deferred
income tax gain of US$14 million related to temporary tax benefits
at one of our foreign subsidiaries due to a change in tax law,
which will be reverted during the year compared to an expense of
US$1 million in 1Q07. Table 4: Taxes Table 4 Taxes (Million) YoY%
LTM YoY% 1Q'08 1Q'07 Change 2008 2007 Change Pesos(1) Accrued
Income Tax 98 61 61.5 432 201 115.5 Deferred Income Tax (gain)
(151) 12 -- (514) (55) 840.5 Total Income Tax (53) 73 -- (82) 146
-- Nominal Dollars Accrued Income Tax 9 5 73.4 39 17 132.2 Deferred
Income Tax (gain) (14) 1 -- (47) (2) 2,263.8 Total Income Tax (5) 6
-- (8) 15 -- (1) Financial data for year 2008 is presented in
nominal pesos while for previous periods it is expressed in
constant pesos as of December 31, 2007. For more details please
refer to the note regarding new accounting principles on page 2.
Consolidated Net Income During 1Q'08 the Company recorded a
consolidated net income of US$30 million compared to a net loss of
US$40 million during the same period last year. This variation is
mainly the result of a combination of several factors: lower other
expenses of US$1 million in 1Q'08 compared with US$39 million in
the same quarter last year associated with prepayment fees and
other expenses related to the debt refinancing completed at the
beginning of year 2007; a US$31 million decrease in total financing
result due to a non-cash foreign exchange gain compared with a
non-cash foreign exchange loss in 1Q'07 coupled with lower interest
expense; and an income tax gain of US$5 million during this quarter
compared with an expense of US$6 million in 1Q'07. The above
mentioned factors more than compensated lower EBIT of US$42 million
compared with US$52 million in the first quarter last year. Capital
Expenditures (CapEx) Capital expenditures for the quarter totaled
US$65 million, compared with US$53 million in 1Q'07. Glass
Containers represented 94 percent of total capex consumption and
was mainly invested in the four major furnace repairs which will
also contribute to increase capacity for 2008, the transfer of
Vimex's facilities to Toluca and maintenance. Flat Glass accounted
for 6 percent and was mainly invested in maintenance as well as in
capacity increase and equipment upgrade in the Automotive business,
Vitro America and Cristalglass, Vitro's Flat Glass subsidiaries in
the US and Spain respectively. 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$77 million to US$1,264. On a YoY
comparison, net debt increased US$178 million. As of 1Q'08, the
Company had a cash balance of US$138 million, of which US$104
million was recorded as cash and cash equivalents and US$34 million
was classified as other current assets. The US$34 million is
restricted cash, which is composed of cash collateralizing debt and
cash deposited in a trust to repay debt and interests on the
covenant defeasance of the Vitro Envases Norteamerica, S.A. de C.V.
("VENA") Senior Notes due 2011 that will be paid in July 2008. Cash
collateralizing debt corresponds to US$1 million recorded at Flat
Glass and the cash deposited in a trust to repay debt and interests
corresponds to US$33 million recorded at Glass Containers.
Consolidated gross debt as of March 31, 2008 totaled US$1,402
million, a QoQ increase of US$29 million and a YoY decrease of
US$64 million. As of 1Q'08, consolidated short-term debt includes
US$30 million associated with the covenant defeasance of the Senior
Notes due 2011 at VENA mentioned above. Table 5 Debt Indicators
(Million dollars; except as indicated) 1Q'08 4Q'07 3Q'07 2Q'07
1Q'07 Interest Coverage (EBITDA/ Total Net Financial Exp.) (Times)
LTM 2.1 2.2 2.1 2.0 2.0 Leverage (Total Debt / EBITDA) (Times) LTM
3.6 3.4 3.5 3.4 3.6 (Total Net Debt / EBITDA) (Times) LTM 3.3 2.9
3.1 3.0 2.7 Total Debt 1,402 1,373 1,382 1,373 1,466 Short-Term
Debt(1) 132 87 80 45 147 Long-Term Debt 1,270 1,286 1,302 1,328
1,319 Cash and Equivalents(2) 138 186 173 212 380 Total Net Debt
1,264 1,186 1,209 1,161 1,086 Currency Mix (%) dlls&Euros/Pesos
/ UDI's 98/2/0 98/2/0 98/2/0 98/2/0 96/2/2 (1) 1Q'08 short term
debt includes US$30 million associated with the covenant defeasance
of the Senior Notes due 2011 at VENA that will be paid in July
2008. 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 debt and derivative instruments accounted for in
current and other long term assets. As of 1Q'08, the restricted
cash includes US$33 million deposited in a trust to repay debt and
interests (see note 1). -- The Company's average life of debt as of
1Q'08 was 6.5 years compared with 7.1 years for 1Q'07. --
Short-term debt as of March 31, 2008, decreased by US$15 million to
9 percent as a percentage of total debt, compared with 10 percent
in 1Q'07. -- Revolving debt, including trade-related debt,
accounted for 50 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, increased by US$62 million to US$66 million from US$4
million as of March 31, 2007. As of 1Q'08 current maturities of
long-term debt represented 50 percent of short-term debt. -- As of
March 31, 2008 Vitro had an aggregate of US$137 million in
off-balance sheet financing related to sales of receivables and
receivable securitization programs. Flat Glass recorded US$74
million and Glass Containers recorded US$63 million. -- Maturities
for 2008 include long-term "Certificados Bursatiles", the covenant
defeasance of the VENA Senior Notes due 2011 and Credit Facilities
at the subsidiary level. -- Maturities from 2009 and thereafter
include, among others, long-term "Certificados Bursatiles", the
Senior Notes due in 2012, Senior Notes due in 2013 and Senior Notes
due in 2017 at the Holding Company level. Cash Flow Cash flow
before CapEx and dividends decreased to negative US$27 million from
US$55 million in 1Q'07. This was principally the result of higher
working capital needs and lower EBITDA. Available cash was used to
fund the negative US$27 million mentioned above and the US$65
million in CapEx investments compared with US$53 million in 1Q'07.
On a LTM basis, the Company recorded cash flow before CapEx and
dividends of US$150 million compared with US$193 million in LTM
2007. The main factors behind this decrease were higher working
capital needs, higher cash taxes paid and lower EBITDA. This cash
flow coupled with available cash was used to fund the US$254
million CapEx investments, which in part was used to increase
capacity at Glass Containers to satisfy higher demand from our
customers. Table 6: Cash Flow Analysis Table 6 Cash Flow from
Operations Analysis(1) (Million) YoY% LTM YoY% 1Q'08 1Q'07 Change
2008 2007 Change Pesos (2) EBITDA 870 1,098 (20.8) 4,152 4,576
(9.2) Net Interest Expense (3),(4) (407) (346) 17.6 (1,273) (2,260)
(43.7) Working Capital (5) (713) (32) 2,131.4 (704) 227 -- Cash
Taxes (paid) recovered (6) (44) (92) (52.1) (480) (314) 52.9 Cash
Flow before Capex and Dividends (294) 629 -- 1,695 2,228 (23.9)
Capex (701) (603) 16.3 (2,793) (1,617) 72.7 Dividends - (31) --
(187) (147) 27.5 Net Free Cash Flow (995) (6) -- (1,285) 464 --
Nominal Dollars EBITDA 81 96 (15.6) 376 393 (4.4) Net Interest
Expense (3),(4) (38) (30) 24.6 (115) (192) (39.8) Working Capital
(5) (66) (2) 2,684.2 (67) 18 -- Cash Taxes (paid) recovered(6) (4)
(8) (49.3) (44) (27) 61.5 Cash Flow before Capex and Dividends (27)
55 -- 150 193 (22.3) Capex (65) (53) 23.4 (254) (140) 81.4
Dividends - (3) -- (16) (12) 37.1 Net Free Cash Flow (93) (1) --
(121) 41 -- (1) This statement is a Cash Flow statement and it does
not represent a Statement of Changes in Financial Position
according with Mexican FRS (2) Financial data for year 2008 is
presented in nominal pesos while for previous periods it is
expressed in constant pesos as of December 31, 2007. For more
details please refer to the note regarding new accounting
principles on page 2. (3) Includes derivative transactions, and
other financial expenses and products. Includes interest rate swap
transaction in which Vitro pays variable peso rates on a monthly
basis and receives semi-annual payments of fixed dollar rate. (4)
1Q'07 does not include additional interests and transaction fees
associated with the debt refinancing completed at the beginning of
year 2007. (5) Includes: Clients, inventories, suppliers, other
current assets and liabilities, IVA (Value Added Tax) and ISCAS
taxes (Salary Special Tax) (6) Includes PSW (Profit Sharing to
Workers) Key Developments Vitro's rating and outlook affirmed by
Fitch Ratings On April 28, 2008 the Company's rating was affirmed
at B by Fitch Ratings (Fitch). At the same time, Fitch upgraded the
national scale long term rating to BBB-(mex) from BB+(mex). The
ratings for Vitro are based in the Company's strong business
position in the production of glass in Mexico, geographic revenue
diversification and hard currency generation. Vitro's export
revenues and sales from foreign subsidiaries located in the United
States, Spain, Portugal, Central America and South America totaled
US$1.48 billion in 2007 and represented 57.9 percent of total
consolidated revenues. More than 80 percent of Vitro's total
revenues are linked to the US dollar. The ratings also incorporate
the continued challenging operating environment for Vitro. Average
natural gas prices for 2008 are expected to be higher than in 2007
and construction and automotive industries cyclicality due to the
slowdown in the US and Mexican economies, could affect the
Company's performance. Vitro's ratings reflect the Company's
improved financial profile and capital structure after the
refinancing process completed at the beginning of 2007, which
consisted in the offering of US$1.0 billion Senior Unsecured Notes
in two tranches, US$300 million and US$700 million with final
maturity scheduled for 2012 and 2017, respectively. With this
transaction Vitro mitigated short-term refinancing and liquidity
risks and eliminated structural subordination following the take
out of secured operating subsidiary debt Vitro's rating and outlook
affirmed by Standard & Poor's On April 23, 2008 the Company's
corporate rating was affirmed at B by Standard & Poor's
(S&P) Ratings Services. The ratings are supported by the
Company's leading position in glass containers and its significant
share of the Mexican flat-glass market. They also reflect its
export activities and international operations, which contribute
about 58 percent of total revenues. Vitro has a manageable maturity
schedule, with short-term debt representing only 6 percent of total
debt. Additional flexibility is derived from the Company's ability
to defer expansion capital expenditures during the year. As of Dec.
31, 2007, cash in hand (about $150 million) and restricted cash
(about $36 million earmarked to repay debt and interests in July
2008 of the senior notes issued by the glass-containers business)
compared favorably with debt maturities of $87 million during the
next 12 months. The stable outlook reflects S&P's opinion that
Vitro's liquidity is adequate to meet its debt maturities during
2008 and considers the S&P's expectation that financial
performance could weaken this year. Vitro's rating and outlook
affirmed by Moody's On April 14, 2008 the Company's B2 corporate
family rating and its stable outlook were affirmed by Moody's.
According to Moody's, Vitro's actual ratings reflect the solid
domestic and international market positions of its glass container
division, the fairly defensive nature of the glass container
business which generates the bulk of consolidated earnings, and
positive operating performance trends in recent years despite
higher input costs and intense competition. In addition, over the
past years, earnings growth has been driven by a favorable economic
environment and solid demand, cost efficiencies and successful
efforts to move towards higher priced value-added products, which
have been gradually strengthening Vitro's competitive position, in
particular in flat glass. The ratings also take into account
Vitro's solid liquidity position, with material cash reserves and a
comfortable debt maturity profile after last year's debt
restructuring, which largely offset continued negative free cash
flow. The stable outlook reflects Moody's view that Vitro currently
has room at the B2 rating level to absorb some impact from the
weakening economic environment on cash generation and credit
metrics. The outlook also incorporates the rating agency's
expectation of a stable to modestly growing earnings contribution
from glass containers and some deterioration at flat glass. Vitro's
subsidiary in Spain acquires Verres et Glaces d'Epinay On April 1,
2008 the Company, through its subsidiary Vitro Cristalglass S.L.,
completed the acquisition of the assets of Verres et Glaces
d'Epinay, the Paris-based value-added flat glass company, for ?3.6
MM. This acquisition is in line with the Company's strategic plan
to broaden its geographic coverage in Europe and strengthen its
position in the value-added products and services market. The new
company, named Vitro Cristalglass France SAS ("Vitro Cristalglass
France"), is dedicated to the transformation and distribution of
flat glass to the French residential and commercial construction
market. Vitro receives the distinction as a Socially Responsible
Company On March 12, 2008 the Company announced that it had
received the distinction as a Socially Responsible Corporation
(ESR) 2008 from the Mexican Center for Philanthropy, A.C. (CEMEFI).
The distinction was received since the company meets the
established standards in the strategic area of corporate social
responsibility. The acknowledgements were awarded to Glass
Containers, Flat Glass, Corporate Offices and Clinica Vitro.
District Court decides in favor of the merger of Vimexico with
Vitro Plan in the opposition case initiated by Pilkington On
February 28, 2008 the Company announced that its subsidiary
Vimexico, S.A. de C.V. (Vimexico), was notified of the first
instance decision issued by the First District Court in Civil and
Labor matters in the State of Nuevo Leon, declaring unfounded the
Pilkington Group Limiter's (Pilkington) action to oppose to the
resolutions adopted at the Extraordinary Shareholders Meeting held
on December 11th, 2006 of the now extinct company Vitro Plan, S.A.
de C.V. (Vitro Plan) In its decision, the Court resolved that
according to the article 200 of the General Laws of Corporations,
all of the adopted resolutions are valid and mandatory for all of
the then Vitro Plan shareholders, including those that voted
against such resolutions. In addition, the court absolved Vimexico
of each and all of the claims demanded by Pilkington in its
complaint. Also, the Court resolved to condemn Pilkington to pay
Vimexico legal fees and trial expenses generated by these
proceedings, which amount will be calculated upon the execution of
this decision. As previously disclosed, the Company's subsidiary in
the flat glass business unit, Vitro Plan, approved at a
shareholders meeting held on second call on December 2006 its
merger into Vimexico, a subsidiary of Vitro. As a result of this
merger, Vitro's flat glass business unit reduced its debt by US$135
million, thus significantly improving its financial condition by
reducing its Debt to EBITDA financial ratio from 4.5 to 3.2 times.
Despite Pilkington may still appeal this decision, based in its
attorneys opinion, Vitro considers that any appeal court will
confirm this decision. Vitro signs an agreement with FIDE to
implement programs for energy savings On January 10, 2008 the
Company announced that it had signed an agreement with the Electric
Energy Savings Mexican Commission (FIDE) for the purpose of making
all its industrial facilities in Mexico more energy efficient
through the reduction in the amount of greenhouse emissions. In
addition to develop energy savings programs, Vitro will conduct
massive awareness programs on the subject, will promote the
substitution of high energy consuming equipment for more energy
efficient ones and will expand the technical training of its
affiliates on the subject of energy efficiency in all of its
installations in Mexico. For its part FIDE will promote energy
savings programs within Vitro's manufacturing facilities, to
workers and suppliers and will help finance the purchase of high
energy efficient equipment. The signing of this agreement adds to
the multiple efforts of Vitro to promote sustainable development by
implementing initiatives that seek to increase our competitiveness
while at the same time promote a cleaner environment and a safer
work place. Glass Containers (52 percent of LTM 2008 Consolidated
Sales) Sales Sales for the quarter increased 7.5 percent YoY to
US$336 million from US$312 million. The main drivers behind the 3.5
percent YoY increase in domestic sales were higher sales derived
from the raw materials business and higher volume in the food and
soft drinks segments coupled with an improved price mix in the beer
market. Export sales increased 13.8 percent due to a volume
increase in all segments coupled with an improved price mix in the
wine & liquor and soft drinks segments. Sales from Glass
Containers' foreign subsidiaries rose 11.3 percent YoY as a result
of continued positive market conditions in Central and South
America. EBIT and EBITDA EBIT for the quarter decreased 11.9
percent YoY to US$36 million from US$40 million in 1Q'07. EBITDA
for the same period decreased 15.1 percent to US$58 million from
US$68 million. EBIT and EBITDA were negatively affected by higher
energy and raw materials costs as well as lower fixed costs
absorption associated with the four major furnace repairs performed
by the Company during this quarter compared with the two major
furnaces repairs carried out during the same period last year. This
situation was partially compensated by better production
efficiencies and the ongoing cost reduction initiatives. EBITDA
from Mexican glass containers operations, which is Glass
Container's core business and represents approximately 80 percent
of total EBITDA, declined 20 percent YoY due to the above mentioned
factors. Table 7: Glass Containers Table 7 Glass Containers
(Million) YoY% LTM YoY% 1Q'08 1Q'07 Change 2008 2007 Change
Pesos(1) Consolidated Net sales 3,613 3,543 2.0 14,708 14,484 1.5
Net Sales Domestic Sales 1,979 2,041 (3.1) 8,309 8,382 (0.9)
Exports 1,053 962 9.5 4,119 3,990 3.2 Foreign Subsidiaries 581 540
7.6 2,281 2,112 8.0 EBIT 383 459 (16.5) 2,009 2,034 (1.2) EBITDA
623 776 (19.6) 2,948 3,373 (12.6) EBIT Margin 10.6% 13.0% -2.4 pp
13.7% 14.0% -0.3 pp EBITDA Margin 17.3% 21.9% -4.6 pp 20.0% 23.3%
-3.3 pp Nominal Dollars Consolidated Net sales 336 312 7.5 1,341
1,261 6.3 Domestic Sales 185 179 3.5 756 723 4.5 Export Sales 97 85
13.8 376 351 7.1 Foreign Subsidiaries 53 48 11.3 209 187 11.7 EBIT
36 40 (11.9) 183 176 3.8 EBITDA 58 68 (15.1) 268 292 (8.2) EBIT
Margin 10.6% 12.9% -2.3 pp 13.6% 14.0% -0.4 pp EBITDA Margin 17.2%
21.8% -4.6 pp 20.0% 23.1% -3.1 pp Glass Containers Domestic
(Millions of Units) 1,163 1,226 (5.2) 4,777 5,010 (4.6) Exports
(Millions of Units) 346 308 12.4 1,385 1,346 2.8 Total 1,509 1,535
(1.7) 6,162 6,356 (3.1) Capacity utilization (furnaces)* 89% 95% -6
pp Alcali (Thousands Tons sold)** 164 157 4.8 644 638 0.9 (1)
Financial data for year 2008 is presented in nominal pesos while
for previous periods it is expressed in constant pesos as of
December 31, 2007. For more details please refer to the note
regarding new accounting principles on page 2. * Includes furnaces
being repaired ** Includes sodium carbonate, sodium bicarbonate,
sodium chlorine, calcium chlorine Flat Glass (47 percent of LTM
2008 Consolidated Sales) Sales Flat Glass sales for the quarter
increased 5.1 percent YoY to US$296 million from US$282 million.
Domestic sales increased 21.0 percent YoY, mainly as result of
higher sales to the automotive market due to increased volumes
along with an improved price mix. Float glass sales also
contributed to this improvement as they experienced a 13 percent
increase in volumes in a stable price environment. Export sales
increased 3.7 percent YoY due to higher float glass volumes, in
line with the company's strategy of temporarily exporting the
additional capacity gained by the purchase of AFG's 50 percent
stake in Mexicali (the float glass manufacturing facility located
in Mexicali, Baja California, Mexico). Automotive sales grew 14.5
percent YoY driven by higher sales both in the Auto Glass
Replacement ("AGR") and in the Original Equipment Manufacturer
("OEM") markets. AGR sales increased as a result of an improved
product mix coupled with higher volumes in the domestic market. OEM
sales increased as a result of higher volumes coupled with a better
product mix which is in line with our strategy to increase sales of
value added products. Sales from foreign subsidiaries remained
relatively stable. Sales at Vitro Cristalglass, the Spanish
subsidiary, increased 8 percent YoY due to a better price mix
coupled with a stronger Euro. Sales at Vitro Colombia increased 18
percent compared with the same quarter last year due to increased
volumes associated with the strong demand in the region. Sales at
Vitro America, the U.S. subsidiary, were affected by the
anticipated slowdown in the demand from the residential
construction market. EBIT & EBITDA EBIT decreased 32.4 percent
YoY to US$9 million from US$14 million while EBITDA decreased 15.7
percent YoY to US$22 million from US$26 million. During the same
period, EBIT and EBITDA margins decreased 1.8 and 1.9 percentage
points respectively. On a YoY comparison, higher energy and raw
materials costs coupled with a lower contribution from Vitro
America had a negative impact on the EBIT and EBITDA generation.
This situation was partially compensated by a better product mix
along with enhanced fixed-cost absorption due to improved capacity
utilization at the Automotive business. Table 8: Flat Glass Table 8
Flat Glass (Million) YoY% LTM YoY% 1Q'08 1Q'07 Change 2008 2007
Change Pesos(1) Consolidated Net sales 3,189 3,252 (2.0) 13,527
13,230 2.2 Net Sales Domestic Sales 816 714 14.2 3,374 3,178 6.2
Exports 614 628 (2.2) 2,633 2,379 10.7 Foreign Subsidiaries 1,759
1,910 (7.9) 7,519 7,673 (2.0) EBIT 100 165 (39.2) 718 520 38.1
EBITDA 239 310 (22.8) 1,250 1,210 3.3 EBIT Margin 3.1% 5.1% -2 pp
5.3% 3.9% 1.4 pp EBITDA Margin 7.5% 9.5% -2 pp 9.2% 9.1% 0.1 pp
Nominal Dollars Consolidated Net sales 296 282 5.1 1,225 1,136 7.8
Domestic Sales 77 63 21.0 309 279 10.9 Export Sales 57 55 3.7 239
205 16.6 Foreign Subsidiaries 163 164 (0.6) 676 652 3.8 EBIT 9 14
(32.4) 64 43 48.3 EBITDA 22 26 (15.7) 112 102 9.6 EBIT Margin 3.1%
4.9% -1.8 pp 5.2% 3.9% 1.3 pp EBITDA Margin 7.5% 9.4% -1.9 pp 9.2%
9.1% 0.1 pp Volumes Flat Glass (Thousands of m2R)(2) 32,107 30,869
4.0 134,027 125,954 6.4 Capacity utilization Flat Glass furnaces(3)
107% 109% -2.1 pp Flat Glass auto 90% 69% 21 pp (1) Financial data
for year 2008 is presented in nominal pesos while for previous
periods it is expressed inconstant pesos as of December 31, 2007.
For more details please refer to the note regarding new accounting
principles on page 2. (2) m2R = Reduced Squared Meters (3) 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.
CONSOLIDATED VITRO, S.A.B. DE C.V. AND SUBSIDIARIES CONSOLIDATED
FINANCIAL STATEMENTS FOR THE PERIODS, (MILLION) First Quarter
INCOME STATEMENT Pesos(1) Nominal Dollars Item 2008 2007 % Var.
2008 2007 % Var. 1 Consolidated Net Sales 6,881 6,889 (0.1) 640 603
6.1 2 Cost of Sales 5,079 4,948 2.6 472 433 9.1 3 Gross Income
1,801 1,940 (7.2) 167 170 (1.3) 4 SG&A Expenses 1,348 1,340 0.6
125 117 6.6 5 Operating Income 453 601 (24.5) 42 52 (19.3) 6 Other
Expenses (Income), net 6 447 (98.6) 1 39 (98.6) 7 Interest Expense
(361) (489) (26.2) (33) (43) (21.6) 8 Interest Income 16 44 (63.3)
2 4 (60.8) 9 Other Financial Expenses (net) (50) (54) (7.2) (5) (5)
0.7 10 Exchange Loss 218 (161) - 20 (14) - 11 Gain from Monet.
Position - 119 - - 10 - 12 Total Financing Result (177) (541)
(67.3) (16) (47) (65.0) 13 Inc. (loss) bef. Tax 270 (387) - 25 (34)
- 14 Income Tax (53) 73 - (5) 6 - 15 Net Inc. (loss) Cont. Opns.
323 (460) - 30 (40) - 16 Income (loss)of Discont. Oper. - - - - - -
17 Income on disposal of discontinued operations - - - - - - 18
Extraordinary Items, Net - - - - - - 19 Net Income (Loss) 323 (460)
- 30 (40) - 20 Net Income (loss) of Maj. Int. 297 (493) - 28 (43) -
21 Net Income (loss) of Min. Int. 26 33 (21.9) 2 3 (21.7) Last
Twelve Months INCOME STATEMENT Pesos(1) Nominal Dollars Item 2008
2007 % Var. 2008 2007 % Var. 1 Consolidated Net Sales 28,583 28,155
1.5 2,597 2,435 6.6 2 Cost of Sales 20,319 20,240 0.4 1,846 1,751
5.5 3 Gross Income 8,265 7,915 4.4 751 684 9.7 4 SG&A Expenses
5,709 5,517 3.5 519 479 8.4 5 Operating Income 2,556 2,398 6.6 231
206 12.6 6 Other Expenses (Income), net 428 283 51.4 39 24 64.7 7
Interest Expense (1,575) (1,831) (14.0) (143) (157) (9.3) 8
Interest Income 148 148 (0.4) 13 13 3.6 9 Other Financial Expenses
(net) (505) (561) (9.8) (46) (48) (4.8) 10 Exchange Loss 285 (163)
- 27 (13) - 11 Gain from Monet. Position 352 447 (21.3) 32 39
(18.6) 12 Total Financing Result (1,296) (1,960) (33.9) (116) (166)
(30.2) 13 Inc. (loss) bef. Tax 832 155 437.4 77 16 385.1 14 Income
Tax (82) 146 - (8) 15 - 15 Net Inc. (loss) Cont. Opns. 914 9
10,200.8 85 1 - 16 Income (loss)of Discont. Oper. - (32) - - (3) -
17 Income on disposal of discontinued operations - 480 - - 40 - 18
Extraordinary Items, Net - - - - - - 19 Net Income (Loss) 914 457
99.8 85 38 123.4 20 Net Income (loss) of Maj. Int. 778 521 49.4 73
44 66.2 21 Net Income (loss) of Min. Int. 136 (63) - 12 (6) -
VITRO, S.A.B. DE C.V. AND SUBSIDIARIES CONSOLIDATED FINANCIAL
STATEMENTS As of March 31, (Million) Pesos(1) Nominal Dollars Item
BALANCE SHEET 2008 2007 % Var. 2008 2007 % Var. 22 Cash & Cash
Equivalents 1,108 2,593 (57.3) 104 229 (54.7) 23 Trade Receivables
1,627 1,415 15.0 152 123 24.0 24 Inventories 4,368 3,992 9.4 408
352 16.1 25 Other Current Assets 3,244 3,822 (15.1) 303 337 (10.1)
26 Total Current Assets 10,346 11,822 (12.5) 967 1,040 (7.0) 27
Prop., Plant & Equipment 18,364 16,283 12.8 1,717 1,435 19.6 28
Deferred Assets 2,659 2,379 11.8 249 206 20.9 29 Other Long-Term
Assets 103 700 (85.2) 10 62 (84.3) 30 Total Assets 31,472 31,184
0.9 2,942 2,743 7.3 31 Short-Term & Curr. Debt 1,408 1,681
(16.2) 132 147 (10.4) 32 Trade Payables 2,184 2,020 8.1 204 177
15.5 33 Other Current Liabilities 3,399 2,366 43.7 318 208 52.7 34
Total Curr. Liab. 6,990 6,067 15.2 654 532 22.9 35 Long-Term Debt
13,584 14,941 (9.1) 1,270 1,319 (3.7) 36 Other LT Liabilities 831
1,727 (51.9) 78 151 (48.7) 37 Total Liabilities 21,405 22,735 (5.9)
2,001 2,002 (0.0) 38 Majority interest 8,159 6,567 24.3 763 580
31.6 39 Minority Interest 1,908 1,882 1.4 178 162 10.4 40 Total
Shar. Equity 10,067 8,448 19.2 941 741 27.0 (1) Financial data for
year 2008 is presented in nominal pesos while for previous periods
it is expressed in constant pesos as of December 31, 2007. For more
details please refer to the note regarding new accounting
principles on page 2. FINANCIAL INDICATORS 1Q'08 1Q'07 Debt/EBITDA
(LTM, times) 3.6 3.6 EBITDA/ Total Net Fin. Exp. (LTM, times) 2.1
2.0 Debt / (Debt + Equity) (times) 0.6 0.7 Debt/Equity (times) 1.5
2.0 Total Liab./Stockh. Equity (times) 2.1 2.7 Curr. Assets/Curr.
Liab. (times) 1.5 1.9 Sales/Assets (times) 0.9 0.9 EPS (Ps$) * 0.8
(1.6) EPADR (US$) * 0.2 (0.4) * Based on the weighted average
shares outstanding. OTHER DATA # Shares Issued (thousands) 386,857
386,857 # Average Shares Outstanding (thousands) 358,505 358,538 #
Employees 24,298 23,450 VITRO, S.A.B. DE C.V. AND SUBSIDIARIES
SEGMENTED INFORMATION FOR THE PERIODS, (MILLION) First Quarter
Pesos(1) Nominal Dollars 2008 2007 % 2008 2007 % GLASS CONTAINERS
Net Sales 3,603 3,557 1.3% 335 314 6.8% Interd. Sales (10) 14 --
(1) 1 -- Con. Net Sales 3,613 3,543 2.0% 336 312 7.5% Expts. 1,053
962 9.5% 97 85 13.8% EBIT 383 459 -16.5% 36 40 -11.9% Margin (2)
10.6% 13.0% 10.6% 12.9% EBITDA 623 776 -19.6% 58 68 -15.1% Margin
(2) 17.3% 21.9% 17.2% 21.8% Glass containers volumes (MM Pieces)
Domestic 1,163 1,226 -5.2% Exports 346 308 12.4% Total:Dom.+Exp.
1,509 1,535 -1.7% Soda Ash (Thousand Tons) 164 157 4.8% FLAT GLASS
Net Sales 3,198 3,257 -1.8% 297 282 5.3% Interd. Sales 9 5 104.6% 1
0 116.4% Con. Net Sales 3,189 3,252 -2.0% 296 282 5.1% Expts. 614
628 -2.2% 57 55 3.7% EBIT 100 165 -39.2% 9 14 -32.4% Margin (2)
3.1% 5.1% 3.1% 4.9% EBITDA 239 310 -22.8% 22 26 -15.7% Margin (2)
7.5% 9.5% 7.5% 9.4% Flat Glass Volumes (Thousand m2R)(3) Const +
Auto 32,107 30,869 4.0% CONSOLIDATED (4) Net Sales 6,880 6,907
-0.4% 640 604 5.8% Interd. Sales (0) 19 -- (0) 2 -- Con. Net Sales
6,881 6,889 -0.1% 640 603 6.1% Expts. 1,667 1,590 4.9% 154 140 9.8%
EBIT 453 601 -24.5% 42 52 -19.3% Margin (2) 6.6% 8.7% 6.6% 8.7%
EBITDA 870 1,098 -20.8% 81 96 -15.6% Margin (2) 12.6% 15.9% 12.6%
15.9% Last Twelve Months Pesos(1) Nominal Dollars 2008 2007 % 2008
2007 % GLASS CONTAINERS Net Sales 14,722 14,560 1.1% 1,342 1,268
5.8% Interd. Sales 13 76 -82.4% 1 7 -82.0% Con. Net Sales 14,708
14,484 1.5% 1,341 1,261 6.3% Expts. 4,119 3,990 3.2% 376 351 7.1%
EBIT 2,009 2,034 -1.2% 183 176 3.8% Margin (2) 13.7% 14.0% 13.6%
14.0% EBITDA 2,948 3,373 -12.6% 268 292 -8.2% Margin (2) 20.0%
23.3% 20.0% 23.1% Glass containers volumes (MM Pieces) Domestic
4,777 5,010 -4.6% Exports 1,385 1,346 2.8% Total:Dom.+Exp. 6,162
6,356 -3.1% Soda Ash (Thousand Tons) 644 638 0.9% FLAT GLASS Net
Sales 13,546 13,236 2.3% 1,226 1,136 7.9% Interd. Sales 19 6 232.5%
2 1 246.6% Con. Net Sales 13,527 13,230 2.2% 1,225 1,136 7.8%
Expts. 2,633 2,379 10.7% 239 205 16.6% EBIT 718 520 38.1% 64 43
48.3% Margin (2) 5.3% 3.9% 5.2% 3.8% EBITDA 1,250 1,210 3.3% 112
102 9.6% Margin (2) 9.2% 9.1% 9.2% 9.0% Flat Glass Volumes
(Thousand m2R)(3) Const + Auto 134,027 125,954 6.4% CONSOLIDATED
(4) Net Sales 28,616 28,239 1.3% 2,600 2,442 6.5% Interd. Sales 32
83 -61.1% 3 7 -59.3% Con. Net Sales 28,583 28,155 1.5% 2,597 2,435
6.6% Expts. 6,752 6,369 6.0% 615 556 10.6% EBIT 2,556 2,398 6.6%
231 206 12.6% Margin (2) 8.9% 8.5% 8.9% 8.4% EBITDA 4,152 4,576
-9.2% 376 393 -4.4% Margin (2) 14.5% 16.3% 14.5% 16.2% (1)
Financial data for year 2008 is presented in nominal pesos while
for previous periods it is expressed in constant pesos as of
December 31, 2007. For more details please refer to the note
regarding new accounting principles on page 2. (2) EBIT and EBITDA
Margins consider Consolidated Net Sales. (3) m2R = Reduced Squared
Meters (4) Includes corporate companies and other's sales and EBIT.
DATASOURCE: Vitro, S.A.B. de C.V. CONTACT: Investor Relations:
Adrian Meouchi, +(52) 81-8863-1765, , Angel Estrada, +(52)
81-8863-1730, , both of Vitro S.A.B. de C.V.; U.S. agency: Susan
Borinelli, , or Barbara Cano, , both of Breakstone Group,
+1-646-452-2334; Media Relations: Albert Chico, Vitro, S.A.B. de
C.V., +(52) 81-8863-1661, Web site: http://www.vitro.com/
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