SAN PEDRO GARZA GARCIA, Nuevo Leon, Mexico, July 24
/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'08 unaudited results. Year over year
consolidated sales rose 14.5 percent while EBITDA declined 15.6
percent. The consolidated EBITDA margin dropped to 11.7 percent
from 15.8 percent in the same period last year, following a 45
percent increase in natural gas prices. FINANCIAL HIGHLIGHTS* 2Q'08
2Q'07 % Change Consolidated Net Sales 725 634 14.5% Glass
Containers 393 328 19.5% Flat Glass 325 298 9.1% Cost of Sales 540
455 18.7% Gross Income 185 179 3.7% Gross Margins 25.6% 28.2% -2.6
pp SG&A 143 122 17.5% SG&A % of sales 19.7% 19.2% 0.5 pp
EBIT 42 57 -25.6% EBIT Margins 5.8% 9.0% -3.2 pp EBITDA 85 100
-15.6% Glass Containers 64 68 -5.9% Flat Glass 22 29 -24.7% EBITDA
Margins 11.7% 15.8% -4.1 pp Net Income 5 10 -49.9% Net Income
Margins 0.7% 1.6% -1 pp Total Debt 1,426 1,373 3.9% Short Term Debt
143 45 217.4% Long Term Debt 1,283 1,328 -3.4% Average life of debt
6.2 7.4 Cash & Cash Equivalents(1) 77 212 -63.7% Total Net Debt
1,349 1,161 16.2% * Million US$ Nominal (1) Cash & Cash
Equivalents include restricted cash which corresponded to cash
collateralizing debt and derivatives instruments accounted for in
other current assets. As of 2Q'08, the restricted cash included
US$33 million deposited in a trust to repay debt and interests.
Commenting on the results for the quarter, Enrique Osorio, Chief
Financial Officer, said, "Our business fundamentals remain strong.
Demand rose in most segments of our business. On a comparable
basis, sales for the quarter reached an all-time high of $725
million. Higher energy costs, however, impacted EBITDA for the
quarter. But, overall we are confident in the health of the
business as we look ahead." Mr. David Gonzalez, President of Glass
Containers business unit, commented, "This was another excellent
quarter for containers. We posted record comparable sales driven by
strong volume increases across the board. Domestic sales were up
more than 22 percent year-over-year, and export sales rose almost
12 percent, including those to the US market, proving again that
this is a fairly defensive business to economic downturns. Foreign
subsidiaries also were strong with sales growth of almost 22
percent." "EBITDA, in turn, decreased 6 percent year-over-year as
higher energy prices, 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 continue to
impact this business. However, cost reduction programs, increased
efficiencies, productivity and capacity utilization offset a large
portion of these higher costs," continued Mr. Gonzalez. Commenting
on Flat Glass business unit, Mr. Hugo Lara noted, "Flat Glass sales
rose 9 percent this quarter, also achieving a quarterly record.
Sales in our US subsidiary remained flat and have begun to show
signs of recovery despite weak market conditions, as we focus on
larger value added commercial projects. Vitro Cristalglass, our
Spanish subsidiary, continued to grow despite the contraction in
residential construction in the country. Our recently acquired
French subsidiary is helping to partially offset a challenging
second half for Vitro Cristalglass. Auto glass sales to the OEM
market remained strong, as small to mid size cars rose from 24
percent to 43 percent of our portfolio over the past year. Sales to
the domestic float glass market also performed well as construction
activity in Mexico continues to grow with no sign of weakness
evident. EBITDA, in turn, fell 25 percent driven by higher energy
and raw material costs and a lower contribution from Vitro America
and Vitro Cristalglass." Addressing the balance sheet, Mr. Osorio
noted, "Net debt to EBITDA rose to 3.6 times from 3.3 times in the
first quarter of the year, as capital expenditures to strengthen
Vitro's market position and expand our client base increased. The
average cost of debt, in turn, dropped 30 basis points
year-over-year to 9.2 percent." "This quarter demonstrates once
again the resilience of our business. We will continue to build on
Vitro's strong position in the glass industry, while taking the
steps to manage to the extent possible the volatility in natural
gas prices," Mr. Osorio closed. Jun-08 Jun-07 Inflation in Mexico
Quarter 0.5% -0.4% LTM 5.2% 4.0% Inflation in USA Quarter 2.1% 1.9%
LTM 4.4% 3.1% Exchange Rate Closing 10.2841 10.7946 Devaluation
Quarter -3.9% -2.2% LTM -4.7% -4.2% 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. 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/ Second Quarter 2008
results Conference Call and Web cast Friday, July 25, 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 August 7, 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 Consolidated Results Sales Consolidated net sales for
2Q'08 increased 14.5 percent YoY to US$725 million from US$634
million last year. For LTM 2008, consolidated net sales rose 9.1
percent to US$2,689 million from US$2,465 in LTM 2007. Glass
Containers sales for the quarter rose YoY by 19.5 percent while
Flat Glass sales grew 9.1 percent over the same time period. During
the quarter domestic, export and foreign subsidiaries' sales
increased 22.7 percent, 6.3 percent and 10.2 percent YoY
respectively. Table 1 Sales (Million) YoY% 2Q'08 2Q'07 Change 6M'08
6M'07 Pesos(1) Total Consolidated Sales 7,503 7,078 6.0 14,384
13,966 Glass Containers 4,061 3,647 11.3 7,671 7,190 Flat Glass
3,359 3,347 0.3 6,547 6,600 Domestic Sales 3,292 2,958 11.3 6,166
5,814 Export Sales 1,764 1,733 1.8 3,432 3,316 Foreign Subsidiaries
2,446 2,387 2.5 4,786 4,837 Nominal Dollars Total Consolidated
Sales 725 634 14.5 1,365 1,236 Glass Containers 393 328 19.5 728
641 Flat Glass 325 298 9.1 621 580 Domestic Sales 326 266 22.7 596
517 Export Sales 166 156 6.3 320 296 Foreign Subsidiaries 233 211
10.2 449 423 % Foreign Currency Sales* / Total Sales 55% 58% -3 pp
56% 58% % Export Sales / Total Sales 23% 25% -1.8 pp 23% 24% YoY%
LTM YoY% Change 2008 2007 Change Pesos(1) Total Consolidated Sales
3.0 29,009 28,098 3.2 Glass Containers 6.7 15,119 14,506 4.2 Flat
Glass (0.8) 13,538 13,179 2.7 Domestic Sales 6.1 12,359 11,930 3.6
Export Sales 3.5 6,790 6,328 7.3 Foreign Subsidiaries (1.1) 9,860
9,840 0.2 Nominal Dollars Total Consolidated Sales 10.4 2,689 2,465
9.1 Glass Containers 13.6 1,404 1,282 9.5 Flat Glass 7.1 1,252
1,147 9.1 Domestic Sales 15.2 1,156 1,055 9.6 Export Sales 8.2 626
561 11.6 Foreign Subsidiaries 6.1 907 850 6.7 % Foreign Currency
Sales* / Total Sales -2.2 pp 57% 57% -0.2 pp % Export Sales / Total
Sales -0.4 pp 23% 23% 0.6 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 Mexican Financial
Reporting Standards on page 2. * Exports + Foreign Subsidiaries
EBIT and EBITDA Consolidated EBIT for the quarter decreased 25.6
percent YoY to US$42 million from US$57 million last year. EBIT
margin decreased 3.2 percentage points to 5.8 percent from 9.0
percent. On a LTM basis, consolidated EBIT increased 2.5 percent to
US$217 million from US$212 million in LTM 2007. During this same
period of time, EBIT margin decreased 50 basis points to 8.1
percent from 8.6 percent. EBIT for the quarter at Glass Containers
decreased by 8.9 percent YoY, while at Flat Glass EBIT decreased by
45.3 percent. Consolidated EBITDA for the quarter declined by 15.6
percent to US$85 million from US$100 million in 2Q'07. The EBITDA
margin decreased 4.1 percentage points YoY to 11.7 percent from
15.8 percent and was negatively affected, among other factors, by
higher energy and raw materials costs and transition of production
of our new cosmetics glass container plant. On a LTM basis,
consolidated EBITDA decreased 8.8 percent to US$360 million from
US$395 million in LTM 2007. During the quarter, EBITDA at Glass
Containers decreased 5.9 percent YoY to US$64 million from US$68
million while EBITDA at Flat Glass decreased 24.7 percent YoY to
US$22 million from US$29 million. For details on both business
units please refer to page 17 and 18, respectively. Table 2: EBIT
and EBITDA Table 2 EBIT and EBITDA (Million) YoY% 2Q'08 2Q'07
Change 6M'08 6M'07 Pesos(1) Consolidated EBIT 439 640 (31.4) 892
1,240 Margin 5.8% 9.0% -3.2 pp 6.2% 8.9% Glass Containers 398 469
(15.2) 781 928 Flat Glass 90 183 (50.7) 190 348 Consolidated EBITDA
876 1,120 (21.8) 1,746 2,219 Margin 11.7% 15.8% -4.1 pp 12.1% 15.9%
Glass Containers 665 760 (12.5) 1,288 1,536 Flat Glass 227 331
(31.4) 466 641 Nominal Dollars Consolidated EBIT 42 57 (25.6) 85
109 Margin 5.8% 9.0% -3.2 pp 6.2% 8.8% Glass Containers 38 42 (8.9)
74 83 Flat Glass 9 16 (45.3) 18 30 Consolidated EBITDA 85 100
(15.6) 166 196 Margin 11.7% 15.8% -4.1 pp 12.1% 15.9% Glass
Containers 64 68 (5.9) 122 137 Flat Glass 22 29 (24.7) 44 56 YoY%
LTM YoY% Change 2008 2007 Change Pesos(1) Consolidated EBIT (28.1)
2,356 2,425 (2.9) Margin -2.7 pp 8.1% 8.6% -0.5 pp Glass Containers
(15.8) 1,938 1,955 (0.9) Flat Glass (45.2) 625 625 0.1 Consolidated
EBITDA (21.3) 3,906 4,514 (13.5) Margin -3.8 pp 13.5% 16.1% -2.6 pp
Glass Containers (16.1) 2,853 3,220 (11.4) Flat Glass (27.2) 1,146
1,292 (11.3) Nominal Dollars Consolidated EBIT (22.6) 217 212 2.5
Margin -2.6 pp 8.1% 8.6% -0.5 pp Glass Containers (10.4) 179 172
3.9 Flat Glass (39.3) 57 53 7.7 Consolidated EBITDA (15.6) 360 395
(8.8) Margin -3.8 pp 13.4% 16.0% -2.6 pp Glass Containers (10.5)
264 284 (6.9) Flat Glass (20.5) 105 111 (5.4) (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 Mexican
Financial Reporting Standards on page 2. Consolidated Financing
Result Consolidated financing result for the quarter decreased 41.0
percent YoY to US$23 million compared with US$39 million during
2Q'07. This was mainly driven by a non-cash foreign exchange gain
of US$56 million compared with a non-cash foreign exchange gain of
US$19 million during 2Q'07. During 2Q'08, the Mexican peso
experienced a 3.9 percent appreciation compared with a 2.2 percent
appreciation in the same period last year. In addition, a US$2
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 offset
higher other financial expenses of US$45 million compared with
US$31 million during 2Q'07 as a result of lower value in derivative
transactions. The decrease in monetary position is the result of
the elimination of this effect at the beginning of year 2008 due to
the new Mexican Financial Reporting Standards (please refer to the
related note on page 2). On a LTM basis, total consolidated
financing result decreased 20.6 percent YoY to US$100 million from
US$126 million driven by a combination of favorable factors: a
non-cash foreign exchange gain of US$64 million compared with a
non-cash foreign exchange gain of US$33 million during LTM 2007
driven by a 4.7 percent appreciation experienced by the Mexican
peso in LTM 2008 compared with a 4.2 percent appreciation in the
same period last year; and lower interest expense of US$141 million
compared with US$155 million, as a result of a decrease in the
interest rate. The above mentioned factors more than offset lower
interest income as well as lower monetary position due to the
reason mentioned in the previous paragraph. Table 3: Total
Financing Result Table 3 Total Financing Result (Million) YoY%
2Q'08 2Q'07 Change 6M'08 6M'07 Pesos(1) Interest Expense (353)
(404) (12.5) (714) (892) Interest Income 8 80 (90.2) 24 124 Other
Financial Expenses(2) (472) (343) 37.6 (522) (397) Foreign Exchange
(Loss) 578 207 179.5 796 46 Monetary Position (Loss)(3) (0) 23 --
(0) 142 Total Financing Result (239) (437) (45.2) (416) (978)
Nominal Dollars Interest Expense (34) (36) (5.3) (68) (79) Interest
Income 1 7 (89.3) 2 11 Other Financial Expenses(2) (45) (31) 47.0
(50) (36) Foreign Exchange (Loss) 56 19 200.0 76 5 Monetary
Position (Loss)(3) (0) 2 -- (0) 12 Total Financing Result (23) (39)
(41.0) (40) (86) YoY% LTM YoY% Change 2008 2007 Change Pesos(1)
Interest Expense (20.0) (1,525) (1,767) (13.7) Interest Income
(80.6) 75 203 (62.9) Other Financial Expenses(2) 31.5 (634) (703)
(9.7) Foreign Exchange (Loss) 1,633.3 656 371 77.1 Monetary
Position (Loss)(3) -- 329 458 (28.1) Total Financing Result (57.4)
(1,099) (1,438) (23.6) Nominal Dollars Interest Expense (14.1)
(141) (155) (8.9) Interest Income (79.4) 7 18 (61.6) Other
Financial Expenses(2) 40.8 (60) (62) (3.4) Foreign Exchange (Loss)
1,547.4 64 33 94.5 Monetary Position (Loss)(3) -- 30 40 (25.6)
Total Financing Result (54.1) (100) (126) (20.6) (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 Mexican
Financial Reporting Standards on page 2. (2) Includes derivative
transactions and interest related to factoring transactions. (3)
According with the new Mexican Financial Reporting Standards, the
monetary position effect was eliminated at the beginning of year
2008. For further details please refer to the note regarding new
Mexican Financial Reporting Standards on page 2. Taxes Total income
tax increased from an expense of US$4 million in 2Q'07 to an
expense of US$13 million during this quarter. Accrued income tax
increased to US$8 million from US$3 million in 2Q'07 due to higher
taxable profits in our Mexican operations and in some of our
foreign operations in the U.S. and Europe. In addition, during this
quarter we posted a deferred income tax of US$5 million compared to
US$2 million during 2Q'07 mainly due to the amortization of tax
loss carryforwards by subsidiaries with taxable profits. Table 4:
Taxes Table 4 Taxes (Million) YoY% 2Q'08 2Q'07 Change 6M'08 6M'07
Pesos(1) Accrued Income Tax 83 29 182.0 181 90 Deferred Income Tax
(gain) 48 20 136.9 (103) 33 Total Income Tax 131 50 163.6 78 123
Nominal Dollars Accrued Income Tax 8 3 214.4 17 8 Deferred Income
Tax (gain) 5 2 155.6 (9) 3 Total Income Tax 13 4 190.1 8 11 YoY%
LTM YoY% Change 2008 2007 Change Pesos(1) Accrued Income Tax 100.9
486 130 274.5 Deferred Income Tax (gain) -- (487) 512 -- Total
Income Tax (36.1) (1) 642 -- Nominal Dollars Accrued Income Tax
119.9 45 11 304.7 Deferred Income Tax (gain) -- (45) 45 -- Total
Income Tax (27.5) 0 56 (99.5) (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 Mexican Financial
Reporting Standards on page 2. Consolidated Net Income During 2Q'08
the Company recorded a consolidated net income of US$5 million
compared to a net income of US$10 million during the same period
last year. This variation is the result of two factors: lower EBIT
of US$42 million compared with US$57 million in the second quarter
last year mainly due to higher energy and raw materials costs and
transition of production of our new cosmetics glass container
plant; and higher income taxes of US$13 million compared with US$4
million. The above mentioned factors were partially offset by a
US$16 million decrease in total financing result mainly derived
from a higher appreciation of the Mexican peso during the second
quarter of this year when compared with the appreciation of 2Q'07.
Capital Expenditures (CapEx) Capital expenditures for the quarter
totaled US$57 million, compared with US$66 million in 2Q'07. Glass
Containers represented 84 percent of total CapEx and was mainly
invested in two major furnace repairs, the transfer of Vidriera
Mexico's ("Vimex") facilities to Toluca and maintenance. Flat Glass
accounted for 16 percent and was mainly invested in the acquisition
of the assets of Verres et Glaces d'Epinay (now named Vitro
Cristalglass France SAS), equipment upgrade in the Automotive
business and maintenance. Consolidated Financial Position Net debt,
which is calculated by deducting cash and cash equivalents as well
as restricted cash accounted for in current and other long term
assets, increased QoQ by US$85 million to US$1,349 million. On a
YoY comparison, net debt increased US$188 million. As of 2Q'08, the
Company had a cash balance of US$77 million, of which US$43 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 was paid in July 23, 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
corresponded to US$33 million recorded at Glass Containers.
Consolidated gross debt as of June 30, 2008 totaled US$1,426
million, a QoQ increase of US$24 million and a YoY increase of
US$53 million. As of 2Q'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) 2Q'08 1Q'08 4Q'07 3Q'07
2Q'07 Interest Coverage (EBITDA/ Total Net Financial Exp.) (Times)
LTM 1.9 2.1 2.2 2.1 2.0 Leverage (Total Debt / EBITDA) (Times) LTM
3.8 3.6 3.4 3.5 3.4 (Total Net Debt / EBITDA) (Times) LTM 3.6 3.3
2.9 3.1 3.0 Total Debt 1,426 1,402 1,373 1,382 1,373 Short-Term
Debt(1) 143 132 87 80 45 Long-Term Debt 1,283 1,270 1,286 1,302
1,328 Cash and Equivalents(2) 77 138 186 173 212 Total Net Debt
1,349 1,264 1,186 1,209 1,161 Currency Mix (%) dlls&Euros/Pesos
97/3 98/2 98/2 98/2 98/2 (1) 2Q'08 short term debt included US$30
million associated with the covenant defeasance of the Senior Notes
due 2011 at VENA that was paid in July 23, 2008. The required cash
was recorded as restricted cash. On July 23, 2008 the restricted
cash was freed from the trust and 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 2Q'08, the restricted cash included US$33 million deposited in a
trust that was used to repay debt and interests (see note 1). --
The Company's average life of debt as of 2Q'08 was 6.2 years
compared with 7.4 years for 2Q'07. -- Short-term debt as of June
30, 2008, increased by US$98 million to 10 percent as a percentage
of total debt, compared with 3 percent in 2Q'07. -- Revolving debt,
including trade-related debt, accounted for 53 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$67 million from US$5 million as of June 30, 2007. As of 2Q'08
current maturities of long-term debt represented 47 percent of
short-term debt. -- As of June 30, 2008 Vitro had an aggregate of
US$141 million in off-balance sheet financing related to sales of
receivables and receivable securitization programs. Flat Glass
recorded US$75 million and Glass Containers recorded US$66 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$3 million from US$24 million in 2Q'07. This was principally the
result of higher taxes paid in cash, lower EBITDA and increased net
interest expense. Lower working capital needs partially offset the
reduced cash flow. Available cash and increased debt were used to
fund the negative US$3 million mentioned above and the US$57
million in CapEx investments compared with US$66 million in 2Q'07.
On a LTM basis, the Company recorded cash flow before CapEx and
dividends of US$126 million compared with US$161 million in LTM
2007. The above mentioned decrease, partially offset by a US$66
million reduction in net interest expense, was mainly due to higher
cash taxes paid, lower EBITDA and increased working capital needs.
This cash flow coupled with available cash was used to fund the
US$244 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% 2Q'08 2Q'07 Change 6M'08
6M'07 Pesos(2) EBITDA 876 1,120 (21.8) 1,746 2,219 Net Interest
Expense(3),(4) (533) (482) 10.5 (958) (828) Working Capital(5) (52)
(262) (80.3) (748) (277) Cash Taxes (paid) recovered(6) (330) (118)
180.9 (374) (209) Cash Flow before CapEx and Dividends (38) 259 --
(334) 906 CapEx (588) (730) (19.4) (1,281) (1,333) Dividends (170)
(141) 20.7 (170) (169) Net Free Cash Flow (797) (612) -- (1,785)
(596) Nominal Dollars EBITDA 85 100 (15.6) 166 196 Net Interest
Expense(3),(4) (51) (43) 19.3 (91) (73) Working Capital(5) (5) (23)
(79.5) (69) (23) Cash Taxes (paid) recovered(6) (32) (11) 197.2
(36) (19) Cash Flow before CapEx and Dividends (3) 24 -- (30) 81
CapEx (57) (66) (13.4) (121) (119) Dividends (17) (13) 27.9 (17)
(15) Net Free Cash Flow (76) (55) -- (168) (53) YoY% LTM YoY%
Change 2008 2007 Change Pesos(2) EBITDA (21.3) 3,906 4,514 (13.5)
Net Interest Expense(3),(4) 15.7 (1,343) (2,214) (39.3) Working
Capital(5) 170.2 (441) (221) 99.9 Cash Taxes (paid) recovered(6)
79.5 (696) (247) 182.1 Cash Flow before CapEx and Dividends --
1,426 1,833 (22.2) CapEx (3.9) (2,642) (2,010) 31.4 Dividends 0.8
(209) (180) 16.2 Net Free Cash Flow 199.3 (1,425) (357) 299.5
Nominal Dollars EBITDA (15.6) 360 395 (8.8) Net Interest
Expense(3),(4) 23.8 (125) (191) (34.4) Working Capital(5) 203.7
(43) (21) 107.8 Cash Taxes (paid) recovered(6) 90.7 (65) (22) 195.8
Cash Flow before CapEx and Dividends -- 126 161 (21.5) CapEx 2.3
(244) (178) 37.4 Dividends 7.1 (20) (16) 22.2 Net Free Cash Flow
218.6 (138) (33) 316.2 (1) This statement is a Cash Flow statement
and it does not represent a Statement of Cash Flow 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 Mexican Financial Reporting
Standards 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 LEGAL Vitro files a lawsuit for the
invalid acquisition of its shares On June 26, 2008 the Company
announced, in relation with the press release issued on April 30,
2008, that and in addition to evaluating other legal actions, it
filed a lawsuit against Banco Nacional de Mexico, S.A., Institucion
de Banca Multiple (Banamex) and a subsidiary of Grupo Financiero
Banamex, S.A. and of Citigroup, requesting the court to declare
null and void the acquisition and ownership of Vitro's common
shares by Banamex due to the violation of Vitro's by-laws. Vitro's
current by-laws provide that no foreign person or foreign entity or
any Mexican company that allows a foreign person or company to own
any equity participation in its capital may own or acquire Vitro's
issued common shares. Also, Vitro's by-laws provide that in case
the above restriction is violated, such acquisition of shares shall
be null and void and the Company shall not recognize such buyer as
the legal owner and in consequence it shall not be able to exercise
any of the common share's corporate or economic rights. The Company
wished to clarify that any foreign citizen or company is allowed to
participate in Vitro by acquiring the Company's ADR's currently
traded in the New York Stock Exchange. The Mexican courts have
granted a petition by Vitro to immobilize such common shares,
pending definitive resolution of the action filed by Vitro. CNBV's
requirement regarding the controversy of the ownership of shares On
July 4, 2008 the Company, as ordered by the Comision Nacional
Bancaria y de Valores ("CNBV") on July 3, 2008, informed: On April
24, 2008, Vitro, through a written notification informed the CNBV
about the events that occurred on its annual shareholders meeting
held on April 17th, 2008, regarding the certificate of shareholders
ownership of shares held in deposit at Acciones y Valores Banamex,
S.A. de C.V. ("Accival"). In such certification issued by Accival,
Banco Nacional de Mexico, S.A. (Banamex) appears as the owner of
approximately 14.94 percent of the outstanding shares of Vitro. In
its written notification, Vitro in general terms, specified to the
CNBV that it estimated that such ownership of shares resulted in a
violation of at least two of the articles of its bylaws, without
considering any other violation to the Ley del Mercado de Valores,
refer to as "Mexican Law of the Securities Market". Basically,
Vitro indicated that (i) first, the bylaws prohibit the acquisition
by any person or group of persons acting in concert, in one or more
transactions, more than 9.9 percent of Vitro's outstanding shares
without the prior written approval of its Board of Directors. As of
July 4, 2008, Banamex had not requested any approval to acquire
more than 9.9 percent of Vitro's outstanding shares, (ii) second,
the bylaws expressly provide that the shares may not be acquired,
either directly or indirectly by foreign persons or foreign
companies or entities or by Mexican companies that do not prohibit
in its bylaws the ownership of any part of its capital by a foreign
person. As provided for in the bylaws of Banamex, such bylaws do
not contain a prohibition of ownership of its capital by a foreign
person as requested by the bylaws of Vitro. Such events were
informed to the CNBV as provided in article 355 and other articles
of the Mexican Law of the Securities Markets in order to initiate
the applicable investigations, without excluding any other action
that Vitro could initiate in this respect. The above was also
informed through a written notification dated April 30, 2008.
Additionally, on June 26, 2008 Vitro also informed that it
initiated litigation against Banamex in the Mexican courts,
requesting the court to declare null and void the acquisition and
ownership of any of Vitro's common shares by Banamex, due to the
violation of its bylaws and that the Mexican courts had granted a
petition to immobilize such shares. Through a written notification
dated July 2, 2008, delivered to Vitro on July 3, 2008, the CNBV
responded the following: " ... With regards to this particular
issue, we inform you, that this Commission, in exercise of its
authority to supervise and in order to know with certainty the
ownership of the outstanding shares of the issuer (Vitro's shares),
which on April 17, 2008, were held at an open account in "Acciones
y Valores Banamex, S.A. de C.V., Casa de Bolsa, integrante del
Grupo Financiero Banamex" (Accival), and at "Banco Nacional de
Mexico, S.A., integrante del Grupo Financiero Banamex" (Banamex),
requested to both financial intermediaries the lists of such
accounts on that particular date, indicating the account number,
complete name of the holder and co-holder, and the amount and
series of the shares. From the analysis of the information
presented by Accival and Banamex, it is inferred that the
53,567,082 Vitro shares, referenced to in your notification, are
held by multiple trusts formed at Banamex, whose settlors-
beneficiares are different persons. Based in the forgoing and
considering that the information contained in this notification
results relevant for public investors to make decisions, it is
required to the company to, as specified on articles 106, second to
last paragraph and 360 of the Mexican Law of the Securities Market,
that no later than the next business day of the receipt of this
notification, they shall reveal the information contained in the
two paragraphs above, as well as the references made in this notice
to your April 24, 2008 notification, as a relevant event, through
the electronic system to publish information of the Bolsa Mexicana
de Valores, S.A. de C.V., called "Emisnet"." The above is made
available to the general public as expressly required by the CNBV.
Vitro estimates that the information included in the notification
by the CNBV regarding the conflict of ownership of the shares of
Vitro through certain trusts in Banamex, as referred to above, do
not resolve the violation of Vitro's bylaws, due to, among other
things, the fact that the identity of the settlors-beneficiaries is
not revealed. Also, Vitro has not received evidence that confirms
the conclusion inferred by the CNBV. Therefore, Vitro is evaluating
the information provided by the CNBV, in order to determine the
appropriate actions and remedies, as well as to assure the
compliance to its bylaws and to the Mexican Law of the Securities
Market. Vitro confirms its position after Banamex's response On
July 9, 2008 the Company informed that in relation with the
statements contained in the press release issued by Banco Nacional
de Mexico, S.A. (Banamex), subsidiary of Citibank, N.A and with the
problems discovered a few days before the annual shareholders
meeting held on April 17th, 2008: The Company has complied at all
times with all legal dispositions that are related to any
disclosure contained in the "Ley del Mercado de Valores" referred
to as the Mexican Law of Securities Market, by posting notices or
communications of relevant events in the "Emisnet". The actions
adopted by Vitro do not intend to take anything from anyone, much
less from any domestic or foreign minority shareholder that legally
acquired shares issued by the Company, in conformity with the
mechanisms allowed and established in the law and our bylaws, on
the contrary, precisely to protect them and the Company, Vitro
encourages to meet and comply with the bylaws, which are the law
for the shareholders, as well as to meet and comply with the laws
of our country and Vitro rejects and defends itself form any
hostile acts that violate with such laws. It is not Vitro that
confuses any shareholders participation of Banamex in Vitro, but on
the contrary it is either Banamex, who confuses or pretends to
confuse not only such shareholders participation but the public,
the authorities and third parties, by claiming and by trying to
exercise rights as shareholder as though it was its own at the
Annual Shareholders Meeting of Vitro and now it simply tries to
deny any ownership. The current bylaws of Vitro have existed for
more than one year and a half (more than nineteen months) and
since, are public, are registered in the public registry of
commerce, are available in its internet web-site and at the Mexican
Sock Exchange in accordance with all legal dispositions. It is
important to mention that at Vitro's Extraordinary Shareholders
Meeting held on November 26th, 2006, in which its bylaws were
modified to adopt its existing language, including its fifth
clause, related to ownership of its equity by foreigners, Banamex
voted in favor, and if any of its customers do not feel to be
adequately informed about this situation, he or she should ask its
banking services supplier about it. Vitro has exercised certain
actions to protect itself and its minority shareholders from
hostile acts that are contrary to the law. Vitro believes that the
law will prevail in our country's legal framework and will not stop
before any threat to the company or the company's administration,
and will continue to defend its rights and the rights of all its
legitimate shareholders through the applicable legal mechanisms.
Court of Appeals confirms decision of lower court denying
Pilkington's opposition to the merger of Vitro Plan into Vimexico
On June 30, 2008 the Company announced that its subsidiary
Vimexico, S.A. de C.V. (Vimexico), was notified of the final
decision issued by the Appeals Court of the Fourth Circuit,
ratifying the decision issued by the lower court denying Pilkington
Group Limited's (Pilkington) opposition 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). As a result of this decision of the Appeals Court, in
accordance with article 200 of the Mexican General Law of
Corporations, all of the above mentioned resolutions are valid and
binding for all shareholders, including those who voted against
such resolutions. In addition, the Appeals Court confirmed the
dismissal of all claims demanded by Pilkington in its original
complaint and confirmed the validity of the merger of Vitro Plan
into Vimexico approved at the Extraordinary Shareholders Meeting of
the now extinct Vitro Plan. At the same time, the Appeals Court
confirmed the decision to condemn Pilkington to pay Vimexico
attorneys fees and expenses including those incurred during Appeals
proceedings; such amount will be calculated upon the execution of
the decision. Despite the fact that Pilkington may still appeal
this decision through an "Amparo" proceedings, Vitro, S.A.B. de
C.V., based in the opinion of its attorneys in charge of this case,
believes that such proceedings will not succeed and the decisions
issued by the lower court and the appeals court will be confirmed.
AWARDS The Mexican Association for Containers and Packaging (AMEE)
awards 43 Vitro containers in its contest On June 25, 2008 the
Company announced that for the second consecutive year it was
awarded the "Stellar Export Packaging Award" that is given by the
Mexican Association of Containers and Packaging Manufacturers
(AMEE). The AMEE also gave awards to another 43 Vitro glass
containers and bottles for the liquor, wine, pharmaceutical, food,
cosmetics and beverage industries in its "Stellar Container and
Packaging Contest 2008". In addition to these awards, Vitro won 5
awards in May on behalf of the Glass Packaging Institute known as
(GPI) in their yearly competition "Clear Choice Awards". Vitro
continues its leadership position upon receiving the 2007 National
Quality Award On May 7, 2008 the Company announced that Clinica
Vitro was awarded the 2007 National Quality Award, in the category
of Health Institutions, by Eduardo Sojo, Secretary of Economy for
Mexico, in a ceremony that took place in the Alcazar Salon in the
Chapultepec Castle in Mexico City. The National Award for Quality
is a public recognition that is awarded annually in Mexico to those
organizations that distinguish themselves by embracing "best
practices" in management of Total Quality and therefore become role
models to follow. This is the sixth time that Vitro has been
awarded this important prize with the other occasions being in
1995, 1998, 1999, 2000 and 2005. Five Vitro glass containers win
awards in the USA On May 6, 2008 the Company announced that the
Glass Packaging Institute (GPI) awarded Vitro Packaging, a
subsidiary of Vitro in the United States, five of the twelve yearly
awards "Clear Choice Awards 2008". The "Clear Choice Awards" is the
only program that awards manufacturing companies for consumer
products that are packaged in glass containers. The variables that
are taken into consideration for determining the winners are:
esthetics, creativity, form, functionality and attractiveness to
the market. Vitro Honored by General Motors as a 2007 Supplier of
the Year On April 29, 2008 the Company received the General Motors
2007 Supplier of the Year award for its significant contributions
to GM's global product and performance achievements. 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. RATINGS 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. OTHER
Vitro receives notice of put option exercise concerning shares of
Vitro Cristalglass On July 22, 2008, the Company announced that its
subsidiary Vimexico, S.A. de C.V. (Vimexico) has been notified by
the Prado Family members and Invergar Participaciones
Inmobiliarias, S.L., that they are exercising their right and
option to sell their 40 percent stake in the European joint venture
Vitro Cristalglass, S.L. (Vitro Cristalglass). Consistent with the
terms of such notice, Vimexico is analyzing the alternatives to
acquire these shares with due date September 10, 2008 in an
estimated amount of $31 million Euros. The commitment, which is
described on our 20-F, is consistent with the terms established in
the purchase agreement signed in May of 2001 when Vitro acquired 60
percent of the European company. 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 million Euros.
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. Glass Containers (52 percent of LTM 2008 Consolidated
Sales) Sales Sales for the quarter increased 19.5 percent YoY to
US$393 million from US$328 million. The main drivers behind the
22.8 percent YoY increase in domestic sales were higher volumes
across all segments coupled with an overall improved price mix.
Export sales increased 11.7 percent due to an improved price mix in
the food, soft drinks and wine & liquor markets coupled with
higher volumes in the CFT (Cosmetics, Fragrances & Toiletries)
and wine & liquor segments. Sales from Glass Containers'
foreign subsidiaries rose 21.9 percent YoY as a result of the
increased demand in Central and South America. EBIT and EBITDA EBIT
for the quarter decreased 8.9 percent YoY to US$38 million from
US$42 million in 2Q'07. EBITDA for the same period decreased 5.9
percent to US$64 million from US$68 million. During this quarter,
EBIT and EBITDA were benefited by higher volumes and improved
production efficiencies which optimized fixed costs absorption as
well as the current cost reduction initiatives. The positive effect
of the above mentioned factors was offset by higher energy and raw
materials costs and costs associated with the transfer of Vimex's
facilities to Vitro Cosmos ("Cosmos") in Toluca. EBITDA from
Mexican glass containers operations, which is Glass Container's
core business and represents approximately 78 percent of total
EBITDA, declined 15 percent YoY due to the above mentioned factors.
Table 7: Glass Containers Table 7 Glass Containers (Million) YoY%
2Q'08 2Q'07 Change 6M'08 6M'07 Pesos(1) Consolidated Net sales
4,061 3,647 11.3 7,671 7,190 Net Sales Domestic Sales 2,314 2,097
10.3 4,295 4,145 Exports 1,134 1,040 9.0 2,187 1,995 Foreign
Subsidiaries 613 510 20.1 1,194 1,050 EBIT 398 469 (15.2) 781 928
EBITDA 665 760 (12.5) 1,288 1,536 EBIT Margin 9.8% 12.9% -3.1 pp
10.2% 12.9% EBITDA Margin 16.4% 20.8% -4.4 pp 16.8% 21.4% Nominal
Dollars Consolidated Net sales 393 328 19.5 728 641 Domestic Sales
231 188 22.8 416 368 Export Sales 105 94 11.7 202 179 Foreign
Subsidiaries 56 46 21.9 110 94 EBIT 38 42 (8.9) 74 83 EBITDA 64 68
(5.9) 122 137 EBIT Margin 9.8% 12.8% -3 pp 10.2% 12.9% EBITDA
Margin 16.4% 20.8% -4.4 pp 16.8% 21.3% Glass Containers Domestic
(Millions of Units) 1,305 1,194 9.3 2,468 2,421 Exports (Millions
of Units) 352 344 2.1 698 653 Total 1,657 1,539 7.7 3,166 3,073
Capacity utilization (furnaces)* 94% 92% 2 pp Alcali (Thousands
Tons sold)** 169 153 10.2 333 310 YoY% LTM YoY% Change 2008 2007
Change Pesos(1) Consolidated Net sales 6.7 15,119 14,506 4.2 Net
Sales Domestic Sales 3.6 8,522 8,349 2.1 Exports 9.6 4,219 3,943
7.0 Foreign Subsidiaries 13.7 2,383 2,215 7.6 EBIT (15.8) 1,938
1,955 (0.9) EBITDA (16.1) 2,853 3,220 (11.4) EBIT Margin -2.7 pp
12.8% 13.5% -0.7 pp EBITDA Margin -4.6 pp 18.9% 22.2% -3.3 pp
Nominal Dollars Consolidated Net sales 13.6 1,404 1,282 9.5
Domestic Sales 13.1 798 734 8.7 Export Sales 13.1 388 351 10.6
Foreign Subsidiaries 16.5 219 197 10.9 EBIT (10.4) 179 172 3.9
EBITDA (10.5) 264 284 (6.9) EBIT Margin -2.7 pp 12.8% 13.4% -0.6 pp
EBITDA Margin -4.5 pp 18.8% 22.1% -3.3 pp Glass Containers Domestic
(Millions of Units) 2.0 4,888 4,965 (1.5) Exports (Millions of
Units) 7.0 1,392 1,330 4.6 Total 3.0 6,280 6,295 (0.2) Capacity
utilization (furnaces)* Alcali (Thousands Tons sold)** 7.5 636 627
1.5 (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 Mexican Financial Reporting Standards 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 9.1 percent YoY to US$325 million from
US$298 million. Domestic sales increased 23.9 percent YoY mainly as
result of higher volumes in the automotive business line coupled
with a better price mix and stable volumes in the float glass
market. Export sales decreased 2.0 percent YoY due to lower Auto
Glass Replacement ("AGR") sales but were partially offset by higher
float glass volumes sold to South American markets. The AGR export
sales reduction was driven by a decrease in volumes as the Company
is using that capacity to supply the Original Equipment
Manufacturer ("OEM") market. Automotive sales grew 10.4 percent YoY
driven by higher sales in the OEM business line and in the domestic
AGR market. OEM sales increased as a result of higher volumes
derived from new platforms, including the Nissan Sentra platform
which started on 3Q'07. AGR sales in the domestic market increased
mainly as a result of an improved product mix coupled with higher
volumes. Sales from foreign subsidiaries increased 6.9 percent YoY
to US$176 million from US$165 million. Sales at Vitro Cristalglass,
the Spanish subsidiary, increased 11 percent YoY due to the new
production line for value- added laminated glass in "La Rozada"
facility and a better price mix coupled with a stronger Euro. Sales
at Vitro Colombia increased 19 percent compared with the same
quarter last year mainly due to a stronger Colombian peso. Sales at
Vitro America, the U.S. subsidiary, were affected by the
anticipated slowdown in the demand from the residential
construction market and to a lesser extent by a decrease in sales
to the commercial construction market. EBIT & EBITDA EBIT
decreased 45.3 percent YoY to US$9 million from US$16 million while
EBITDA decreased 24.7 percent YoY to US$22 million from US$29
million. During the same period, EBIT and EBITDA margins decreased
2.7 and 3.1 percentage points respectively. On a YoY comparison,
higher energy and raw materials costs coupled with a lower
contribution from Vitro America and Vitro Cristalglass had a
negative impact on the EBIT and EBITDA generation. This situation
was partially offset by stabilized prices in the domestic float
glass market and improved capacity utilization at the Automotive
business. Table 8: Flat Glass Table 8 Flat Glass (Million) YoY%
2Q'08 2Q'07 Change 6M'08 6M'07 Pesos(1) Consolidated Net sales
3,359 3,347 0.3 6,547 6,600 Net Sales Domestic Sales 895 778 15.0
1,711 1,493 Exports 630 693 (9.0) 1,244 1,320 Foreign Subsidiaries
1,833 1,876 (2.3) 3,592 3,786 EBIT 90 183 (50.7) 190 348 EBITDA 227
331 (31.4) 466 641 EBIT Margin 2.7% 5.5% -2.8 pp 2.9% 5.3% EBITDA
Margin 6.7% 9.9% -3.2 pp 7.1% 9.7% Nominal Dollars Consolidated Net
sales 325 298 9.1 621 580 Domestic Sales 87 70 23.9 164 134 Export
Sales 61 62 (2.0) 118 117 Foreign Subsidiaries 176 165 6.9 339 329
EBIT 9 16 (45.3) 18 30 EBITDA 22 29 (24.7) 44 56 EBIT Margin 2.7%
5.4% -2.7 pp 2.9% 5.1% EBITDA Margin 6.7% 9.8% -3.1 pp 7.1% 9.6%
Volumes Flat Glass (Thousands of m2R)(2) 35,303 33,425 5.6 67,410
64,294 Capacity utilization Flat Glass furnaces(3) 99% 109% -10.2
pp Flat Glass auto 90% 80% 10.1 pp YoY% LTM YoY% Change 2008 2007
Change Pesos(1) Consolidated Net sales (0.8) 13,538 13,179 2.7 Net
Sales Domestic Sales 14.6 3,491 3,169 10.2 Exports (5.8) 2,571
2,385 7.8 Foreign Subsidiaries (5.1) 7,476 7,625 (1.9) EBIT (45.2)
625 625 0.1 EBITDA (27.2) 1,146 1,292 (11.3) EBIT Margin -2.4 pp
4.6% 4.7% -0.1 pp EBITDA Margin -2.6 pp 8.5% 9.8% -1.3 pp Nominal
Dollars Consolidated Net sales 7.1 1,252 1,147 9.1 Domestic Sales
22.6 326 285 14.6 Export Sales 0.7 238 210 13.3 Foreign
Subsidiaries 3.2 688 652 5.4 EBIT (39.3) 57 53 7.7 EBITDA (20.5)
105 111 (5.4) EBIT Margin -2.2 pp 4.5% 4.7% -0.2 pp EBITDA Margin
-2.5 pp 8.4% 9.8% -1.4 pp Volumes Flat Glass (Thousands of m2R)(2)
4.8 135,905 125,816 8.0 Capacity utilization Flat Glass furnaces(3)
Flat Glass auto (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 Mexican Financial Reporting
Standards 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) Second Quarter
INCOME STATEMENT Pesos(1) Nominal Dollars Item 2008 2007 % Var.
2008 2007 % Var. 1 Consolidated Net Sales 7,503 7,078 6.0 725 634
14.5 2 Cost of Sales 5,586 5,080 10.0 540 455 18.7 3 Gross Income
1,917 1,998 (4.1) 185 179 3.7 4 SG&A Expenses 1,478 1,358 8.8
143 122 17.5 5 Operating Income 439 640 (31.4) 42 57 (25.6) 6 Other
Expenses (Income), net 15 36 (58.0) 1 3 (54.2) 7 Interest Expense
(353) (404) (12.5) (34) (36) (5.3) 8 Interest Income 8 80 (90.2) 1
7 (89.3) 9 Other Financial Expenses (net) (472) (343) 37.6 (45)
(31) 47.0 10 Exchange Loss 578 207 179.5 56 19 200.0 11 Gain from
Monet. Position (0) 23 -- (0) 2 -- 12 Total Financing Result (239)
(437) (45.2) (23) (39) (41.0) 13 Inc. (loss) bef. Tax 184 167 10.3
18 15 21.5 14 Income Tax 131 50 163.6 13 4 190.1 15 Net Inc. (loss)
Cont. Opns. 53 117 (54.6) 5 10 (49.9) 16 Income (loss)of Discont.
Oper. - - -- - - -- 17 Income on disposal of discontinued
operations - - -- - - -- 18 Extraordinary Items, Net - - -- - - --
19 Net Income (Loss) 53 117 (54.6) 5 10 (49.9) 20 Net Income (loss)
of Maj. Int. 41 85 (52.0) 4 8 (47.7) 21 Net Income (loss) of Min.
Int. 12 32 (61.6) 1 3 (55.9) January - June INCOME STATEMENT
Constant Pesos Nominal Dollars Item 2008 2007 % Var. 2008 2007 %
Var. 1 Consolidated Net Sales 14,384 13,966 3.0 1,365 1,236 10.4 2
Cost of Sales 10,666 10,028 6.4 1,012 888 14.0 3 Gross Income 3,718
3,938 (5.6) 353 348 1.3 4 SG&A Expenses 2,826 2,698 4.7 268 239
12.2 5 Operating Income 892 1,240 (28.1) 85 109 (22.6) 6 Other
Expenses (Income), net 21 482 (95.6) 2 42 (95.2) 7 Interest Expense
(714) (892) (68) (79) (14.1) 8 Interest Income 24 124 (80.6) 2 11
(79.4) 9 Other Financial Expenses (net) (522) (397) 31.5 (50) (36)
40.8 10 Exchange Loss 796 46 1,633.3 76 5 1,547.4 11 Gain from
Monet. Position (0) 142 -- (0) 12 -- 12 Total Financing Result
(416) (978) (57.4) (40) (86) (54.1) 13 Inc. (loss) bef. Tax 455
(220) -- 43 (19) -- 14 Income Tax 78 123 (36.1) 8 11 (27.5) 15 Net
Inc. (loss) Cont. Opns. 376 (343) -- 35 (30) -- 16 Income (loss)of
Discont. Oper. - - -- - - -- 17 Income on disposal of discontinued
operations - - -- - - -- 18 Extraordinary Items, Net - - -- - - --
19 Net Income (Loss) 376 (343) -- 35 (30) -- 20 Net Income (loss)
of Maj. Int. 338 (408) -- 31 (35) -- 21 Net Income (loss) of Min.
Int. 38 65 (41.5) 4 5 (32.9) Last Twelve Months INCOME STATEMENT
Pesos(1) Nominal Dollars Item 2008 2007 % Var. 2008 2007 % Var. 1
Consolidated Net Sales 29,009 28,098 3.2 2,689 2,465 9.1 2 Cost of
Sales 20,825 20,156 3.3 1,931 1,769 9.2 3 Gross Income 8,184 7,942
3.1 757 697 8.7 4 SG&A Expenses 5,828 5,516 5.7 541 485 11.5 5
Operating Income 2,356 2,425 (2.9) 217 212 2.5 6 Other Expenses
(Income), net 408 187 117.8 37 16 139.3 7 Interest Expense (1,525)
(1,767) (13.7) (141) (155) (8.9) 8 Interest Income 75 203 (62.9) 7
18 (61.6) 9 Other Financial Expenses (net) (634) (703) (9.7) (60)
(62) (3.4) 10 Exchange Loss 656 371 77.1 64 33 94.5 11 Gain from
Monet. Position 329 458 (28.1) 30 40 (25.6) 12 Total Financing
Result (1,099) (1,438) (23.6) (100) (126) (20.6) 13 Inc. (loss)
bef. Tax 849 800 6.1 80 70 13.6 14 Income Tax (1) 642 -- 0 56
(99.5) 15 Net Inc. (loss) Cont. Opns. 850 159 435.6 79 14 474.6 16
Income (loss)of Discont. Oper. - - -- - 0 -- 17 Income on disposal
of discontinued operations - (29) -- - (3) -- 18 Extraordinary
Items, Net - - -- - - -- 19 Net Income (Loss) 850 129 556.8 79 11
603.2 20 Net Income (loss) of Maj. Int. 733 100 635.2 69 9 647.7 21
Net Income (loss) of Min. Int. 116 30 292.7 11 2 408.3 VITRO,
S.A.B. DE C.V. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, (Million) Pesos(1) Nominal Dollars Item BALANCE
SHEET 2008 2007 % Var. 2008 2007 % Var. 22 Cash & Cash
Equivalents 441 1,972 (77.6) 43 177 (75.8) 23 Trade Receivables
1,719 1,603 7.3 167 142 18.0 24 Inventories 3,969 4,064 (2.3) 386
364 5.9 25 Other Current Assets 4,055 2,955 37.2 394 266 48.4 26
Total Current Assets 10,184 10,595 (3.9) 990 949 4.4 27 Prop.,
Plant & Equipment 18,324 16,657 10.0 1,782 1,495 19.1 28
Deferred Assets 2,643 2,393 10.4 257 211 21.7 29 Other Long-Term
Assets 94 752 (87.5) 9 67 (86.5) 30 Total Assets 31,245 30,398 2.8
3,038 2,723 11.6 31 Short-Term & Curr. Debt 1,467 518 183.2 143
45 217.4 32 Trade Payables 2,191 2,266 (3.3) 213 202 5.5 33 Other
Current Liabilities 3,963 2,621 51.2 385 235 64.3 34 Total Curr.
Liab. 7,621 5,404 41.0 741 481 53.9 35 Long-Term Debt 13,200 14,783
(10.7) 1,283 1,328 (3.4) 36 Other LT Liabilities 851 1,667 (49.0)
83 149 (44.5) 37 Total Liabilities 21,671 21,855 (0.8) 2,107 1,959
7.6 38 Majority interest 7,753 6,669 16.3 754 600 25.7 39 Minority
Interest 1,821 1,874 (2.8) 177 164 7.7 40 Total Shar. Equity 9,574
8,543 12.1 931 764 21.8 (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 Mexican Financial
Reporting Standards on page 2. FINANCIAL INDICATORS 2Q'08 2Q'07
Debt/EBITDA (LTM, times) 3.8 3.4 EBITDA/ Total Net Fin. Exp. (LTM,
times) 1.9 2.0 Debt / (Debt + Equity) (times) 0.6 0.6 Debt/Equity
(times) 1.5 1.8 Total Liab./Stockh. Equity (times) 2.3 2.6 Curr.
Assets/Curr. Liab. (times) 1.3 2.0 Sales/Assets (times) 0.9 0.9 EPS
(Ps$) * 0.11 0.24 EPADR (US$) * 0.03 0.06 * 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 24,245 23,850 VITRO, S.A.B. DE C.V. AND
SUBSIDIARIES SEGMENTED INFORMATION FOR THE PERIODS, (MILLION)
Second Quarter Pesos(1) Nominal Dollars 2008 2007 % 2008 2007 %
GLASS CONTAINERS Net Sales 4,081 3,656 11.6% 394 329 19.8% Interd.
Sales 20 9 135.9% 2 1 156.3% Con. Net Sales 4,061 3,647 11.3% 393
328 19.5% Expts. 1,134 1,040 9.0% 105 94 11.7% EBIT 398 469 -15.2%
38 42 -8.9% Margin (2) 9.8% 12.9% 9.8% 12.8% EBITDA 665 760 -12.5%
64 68 -5.9% Margin (2) 16.4% 20.8% 16.4% 20.8% Glass containers
volumes (MM Pieces) Domestic 1,305 1,194 9.3% Exports 352 344 2.1%
Total:Dom.+Exp. 1,657 1,539 7.7% Soda Ash (Thousand Tons) 169 153
10.2% FLAT GLASS Net Sales 3,375 3,350 0.7% 326 298 9.5% Interd.
Sales 16 3 537.2% 2 0 585.0% Con. Net Sales 3,359 3,347 0.3% 325
298 9.1% Expts. 630 693 -9.0% 61 62 -2.0% EBIT 90 183 -50.7% 9 16
-45.3% Margin (2) 2.7% 5.5% 2.7% 5.4% EBITDA 227 331 -31.4% 22 29
-24.7% Margin (2) 6.7% 9.9% 6.7% 9.8% Flat Glass Volumes (Thousand
m2R)(3) Const + Auto 35,303 33,425 5.6% CONSOLIDATED (4) Net Sales
7,540 7,089 6.4% 729 635 14.9% Interd. Sales 36 11 227.4% 4 1
253.5% Con. Net Sales 7,503 7,078 6.0% 725 634 14.5% Expts. 1,764
1,733 1.8% 166 156 6.3% EBIT 439 640 -31.4% 42 57 -25.6% Margin (2)
5.8% 9.0% 5.8% 9.0% EBITDA 876 1,120 -21.8% 85 100 -15.6% Margin
(2) 11.7% 15.8% 11.7% 15.8% January - June Constant Pesos Nominal
Dollars 2008 2007 % 2008 2007 % GLASS CONTAINERS Net Sales 7,685
7,213 6.5% 729 643 13.5% Interd. Sales 14 23 -37.4% 1 2 -29.8% Con.
Net Sales 7,671 7,190 6.7% 728 641 13.6% Expts. 2,187 1,995 9.6%
202 179 13.1% EBIT 781 928 -15.8% 74 83 -10.4% Margin (2) 10.2%
12.9% 10.2% 12.9% EBITDA 1,288 1,536 -16.1% 122 137 -10.5% Margin
(2) 16.8% 21.4% 16.8% 21.3% Glass containers volumes (MM Pieces)
Domestic 2,468 2,421 2.0% Exports 698 653 7.0% Total:Dom.+Exp.
3,166 3,073 3.0% Soda Ash (Thousand Tons) 333 310 7.5% FLAT GLASS
Net Sales 6,573 6,607 -0.5% 623 580 7.4% Interd. Sales 26 7 259.1%
2 1 285.2% Con. Net Sales 6,547 6,600 -0.8% 621 580 7.1% Expts.
1,244 1,320 -5.8% 118 117 0.7% EBIT 190 348 -45.2% 18 30 -39.3%
Margin (2) 2.9% 5.3% 2.9% 5.1% EBITDA 466 641 -27.2% 44 56 -20.5%
Margin (2) 7.1% 9.7% 7.1% 9.6% Flat Glass Volumes (Thousand m2R)(3)
Const + Auto 67,410 64,294 4.8% CONSOLIDATED (4) Net Sales 14,423
13,996 3.1% 1,369 1,239 10.5% Interd. Sales 40 30 33.3% 4 3 45.2%
Con. Net Sales 14,384 13,966 3.0% 1,365 1,236 10.4% Expts. 3,432
3,316 3.5% 320 296 8.2% EBIT 892 1,240 -28.1% 85 109 -22.6% Margin
(2) 6.2% 8.9% 6.2% 8.8% EBITDA 1,746 2,219 -21.3% 166 196 -15.6%
Margin (2) 12.1% 15.9% 12.1% 15.9% Last Twelve Months Pesos(1)
Nominal Dollars 2008 2007 % 2008 2007 % GLASS CONTAINERS Net Sales
15,147 14,567 4.0% 1,407 1,288 9.3% Interd. Sales 29 61 -53.0% 3 5
-49.1% Con. Net Sales 15,119 14,506 4.2% 1,404 1,282 9.5% Expts.
4,219 3,943 7.0% 388 351 10.6% EBIT 1,938 1,955 -0.9% 179 172 3.9%
Margin (2) 12.8% 13.5% 12.8% 13.4% EBITDA 2,853 3,220 -11.4% 264
284 -6.9% Margin (2) 18.9% 22.2% 18.8% 22.1% Glass containers
volumes (MM Pieces) Domestic 4,888 4,965 -1.5% Exports 1,392 1,330
4.6% Total:Dom.+Exp. 6,280 6,295 -0.2% Soda Ash (Thousand Tons) 636
627 1.5% FLAT GLASS Net Sales 13,571 13,187 2.9% 1,255 1,148 9.3%
Interd. Sales 33 8 307.6% 3 1 332.5% Con. Net Sales 13,538 13,179
2.7% 1,252 1,147 9.1% Expts. 2,571 2,385 7.8% 238 210 13.3% EBIT
625 625 0.1% 57 53 7.7% Margin (2) 4.6% 4.7% 4.5% 4.6% EBITDA 1,146
1,292 -11.3% 105 111 -5.4% Margin (2) 8.5% 9.8% 8.4% 9.7% Flat
Glass Volumes (Thousand m2R)(3) Const + Auto 135,905 125,816 8.0%
CONSOLIDATED (4) Net Sales 29,070 28,167 3.2% 2,694 2,472 9.0%
Interd. Sales 61 69 -11.1% 6 6 -4.4% Con. Net Sales 29,009 28,098
3.2% 2,689 2,465 9.1% Expts. 6,790 6,328 7.3% 626 561 11.6% EBIT
2,356 2,425 -2.9% 217 212 2.5% Margin (2) 8.1% 8.6% 8.1% 8.6%
EBITDA 3,906 4,514 -13.5% 360 395 -8.8% Margin (2) 13.5% 16.1%
13.4% 16.0% (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 Mexican Financial Reporting
Standards 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, , or Angel Estrada, + (52)
81-8863-1730, , both of Vitro S.A.B. de C.V.; or U.S. agency, Susan
Borinelli, , or Barbara Cano, , both of Breakstone Group,
+1-646-452-2334, for Vitro S.A.B. de C.V.; or Media Relations,
Albert Chico of Vitro, S.A.B. de C.V., + (52) 81-8863-1661, Web
site: http://www.vitro.com/
Copyright