SAG GEST Soluções Automóvel Globais, SGPS, SA Listed Company Estrada de Alfragide, nº 67, Amadora Registered Share Capital: 169,764,398 euros Registered at the Amadora Registrar of Companies under the single registration and taxpayer no. 503 219 886 ANNOUNCEMENT Consolidated Results 2011 SAG S CONSOLIDATED TURNOVER IN 2011 WAS 782.5 MILLION EBITDA WAS 79.4 MILLION NET CONSOLIDATED LOSSES WERE 21.0 MILLION NET PROFIT FROM OPERATIONAL BUSINESS CONDUCTED IN PORTUGAL (AUTOMOTIVE DISTRIBUTION AND RETAIL) WAS 19.3 MILLION Preliminary remark: With the R$ 300 million capital increase at the Unidas Affiliate on 13 July 2011 and the resulting entrance of three new Investors in the company s shareholder structure, SAG Gest now holds a 52.7% stake in that Affiliate s share capital. Following the agreements entered into by SAG Gest and Unidas s new Shareholders under this operation, and in accordance with the International Financial Reporting Standards (IFRS), the Unidas Affiliate is now consolidated in SAG Gest s Consolidated Financial Statements using the Proportional Consolidation Method. This change caused significant impacts on SAG Gest s Consolidated Financial Statements. With the adoption of the accounting standards (IFRS) applicable to this type of situation, net profit for the year increased by Eur 28.3, a nonrecurrent impact resulting from the recognition in the Profit and Loss of the balance of Cumulative Translation Adjustments associated with the Unidas Affiliate, which had been recorded in Consolidated Shareholders Equity. Therefore, comparability of SAG Gest s Consolidated Financial Statements as at 31 December 2011 with previously reported Consolidated Financial Statements has been affected. 1. GENERAL COMMENT In 2011, a corporate reorganization process was implemented at SAG, with the objective of concentrating resources on business areas with higher growth and return potential, and therefore several strategically important transactions were completed to ensure the Group s sustainable growth. In this context, the Unidas Affiliate registered share capital was increased by BRL 300 million. This share capital increase was fully subscribed and paid up by three new Shareholders (Investment Funds managed by Gávea Investimentos, Kinea Investimentos and Vinci Capital). This will enable Unidas to take advantage of the opportunities offered by the Brazilian market in the coming years. In Europe, non-strategic assets were sold, namely SAG s entire interest in the Ecometais Subsidiary, a company operating in the recycling and fragmentation of end-of-life vehicles and, 1
more importantly, SAG withdrew from fleet management operations which were conducted in partnership with Banco Santander Consumer in Portugal, Spain and Poland, having sold to a competitor, together with its partner, the business in Portugal (Multirent), and selling the remaining business (Spain and Poland) to Banco Santander Consumer. In what relates to the traditional business in Portugal, automotive importation, wholesale and retail, 2011 was marked by a clearly adverse environment which resulted in a decrease in turnover and results due to worsening of market conditions which were particularly felt in the second Half of the year. In spite of this, SAG strengthened the competitive position of the Brands it represents, and consolidated the leadership it already had in the light passenger car segment, while achieving the leadership position in the extended light vehicle market (light passenger cars (PC) and light commercial vehicles (LCV)), with its highest market share ever. In Brazil, 2011 represents the start of a new period in the life of the Unidas Affiliate, now a strongly capitalized company that has all the resources required to ensure a healthy sustained growth in both areas of its activities, fleet management and rent-a-car, which will enable it to contribute again in a significant and positive way to SAG s future results. This is of particular importance given the difficult context which SAG s business will face in Portugal in the near future. 2. BUSINESS ACTIVITIES 2.1. Portugal Automotive Retail Both the PC and LCV markets reached in 2011 their lowest level since 1987, the last year of import quotas. Indeed, sales of Light Vehicles (LV) combining both those markets were 188,367 units, a 30% decrease vs. 2010. The passenger car market was the main factor influencing that development, with a 31.3% decrease and a total of 153 486 units sold. Sales of light commercial vehicles decreased 23.6% to 34 881 units, following an increase of 17.4% in 2010. Total sales of light vehicles of the Brands distributed by SIVA were 26 524 units, a 21.3% decrease when compared to 2010 in a market that retracted 30.0%. The Company therefore recovered its leadership position in the Portuguese light vehicles market, achieving its highest market shares ever: 14.1%. In the Passenger Car market, the market share was also high: 15.8%. Also in this case, the decrease of 23.8% (24 214 units) in sales was clearly lower than the decrease in the overall market (31.3%), with SIVA ranking first again among importers of vehicles of this segment. In the Passenger Car market, Volkswagen was the Brand recording the highest market share gains (1.3% vs 2010), ending 2011 in the ranking s second position with a 9.7% share. The Brand sold 14 874 passenger cars, 20.9% less than in the previous year, in a market that declined 31.3%. Audi achieved in 2011 its highest market share ever in Portugal: 4.32%, corresponding to the sale of 6 622 vehicles, 21.2% less than in 2010. Škoda sold 2 715 units, a 1.8% share in the PC market (2.0% in 2010). The Brand s performance was affected by the significant decline in the private Client segment, in which the brand has traditionally held a stronger position. Volkswagen Commercial Vehicles was the only brand in its market increased sales vs. 2010. This performance resulted in a 2.2 pp market share increase, considering the segments where it was present, and in the gain o 4 positions in the related sales ranking. 2
2.2. Brazil The portfolio of the Fleet Management (Renting) business, which accounts for approximately 60% of the Unidas Affiliate total revenue, was rebalanced, and the average number of vehicles was reduced from 19 147 in 2010 to an average of 17 746 in 2011, in spite of the fleet s return to growth from the 2 nd half of 2011 onwards, following the Affiliate s capital increase. In spite of this reduction, profitability of the portfolio of vehicles of this segment did improve. 8 399 Renting agreements were signed, a 49% increase when compared to the 5 634 contracts signed in 2010. The own store network of the Rent-a-Car business had a 7% increase in the number of daily rentals, which increased from 1 472 to 1 571 thousand. Improved occupancy rates and increased average rental ticket ensured a 17% increase in net revenue, (excluding Franchises) in Brazilian Reals. In the semi-new car sale area, the measures adopted by the Brazilian government at the end of 2010 caused a slowdown in automotive retail business during the first nine months of 2011, and this resulted in lower sales in this segment when compared to the previous year. From October 2011 onwards, stricter credit terms implemented by financial institutions caused a decrease in sales, in both to End Customer and in the wholesale channel. This process resulted in a reduction in the number of units sold and in total sales, which were also affected by increased discounts offered in both channels. In 2011, the Unidas Affiliate sold 12 742 vehicles, of which 9 275 (72.8%) directly to the End Customer, and 3 467 (27.2%) to used car dealers, which represented a decrease of approximately 30% in relation to the total number of vehicles sold in 2010, i.e., 18 209 vehicles, directly resulting from the fleet reduction during the first nine months of the year. Following the Company s share capital increase in July 2011, the Unidas Affiliate is now implementing its development plan involving its two areas of operation, which will enable significant growth in the renting and rent-a-car businesses throughout 2012 and provide again profitability levels compatible with investments made in that Affiliate. 3. CONSOLIDATED RESULTS 2011 Consolidated Revenue in 2011 was Eur 782.5 million. In 2011, revenue from business conducted in Portugal suffered the impact of an adverse macroeconomic context. In the area of Automotive Distribution, revenue was Eur 416.5 million, and Automotive Retail recorded revenues of 138.7 million, i.e., a decrease of Eur 96.7 and Eur 47.3 million, respectively, when compared to 2010. The Unidas Affiliate Unidas activity, in Brazil, contributed Eur 217.6 million to the Consolidated Revenue. Due to the above mentioned change in consolidation method, it is not possible to establish a comparison with the Company s contribution in 2010. On a 100% basis, the Company s contribution would have been Eur 284.6 million, which compares to Eur 326.4 million in 2010. EBITDA generated by SAG Gest s activities in Portugal was Eur 24.8 million, a 30.3% decrease when compared to 2010. The Unidas Affiliate contributed Eur 54.5 million, and therefore consolidated EBITDA totaled Eur 79.4 million. Consolidated EBIT in 2011 was Eur 35.5 million, and was impacted by the change in Unidas consolidation method. With this change, the relative weight of the Unidas Affiliate depreciation charge in the total consolidated depreciation expenses declined significantly when compared to previous years. In Portugal, EBIT was Eur 21.8 million, a 32.5% decrease vs. 2010, essentially explained by the already mentioned volume reduction and increased provision charges in view of the automotive market development prospects in Portugal, where additional reductions in volume could negatively affect net sales prices. 3
The Consolidated Financial Income / (Expense) represented an expense of 62,8 million in 2011. In Portugal, Financial Income / (Expense) (excluding Results from Affiliates) increased 43%, reflecting tighter credit supply and the resulting increase in credit spreads applied by most Financial Institutions. The changes in financial expenses in Brazil results essentially from the change in the Unidas Affiliate consolidation method. SAG s Consolidated Net Profit / (Loss) attributable to SAG Gest represented a loss of Eur 21.0 million. This result essentially reflects the negative contribution of the Unidas Affiliate which, in Euros, was a loss of Eur 15.3 million. In turn, contribution from business conducted by the Group in Portugal to the Consolidated Net Profit / (Loss) (excluding interest from the holding company and results from Affiliates) was a profit of Eur 19.3 million. The SAG Group Consolidated Net Debt was Eur 430.3 million as at 31 December 2011, a Eur 90.0 million decrease when compared to the amount recorded in December 2010. This change basically results from the double effect of the significant reduction in the Unidas Affiliate net debt and from the change in the consolidation method of this Affiliate. In Portugal, Net Debt increased Eur 73.9 million. The Consolidated Equity as at the end of 2011 was Eur 30.5 million. The Eur 64.9 million decrease versus the amount reported on 31 December 2010 (Eur 95.4 million) includes: the negative impact from movements resulting from the change in the Unidas Affiliate consolidation method (Eur 4 million); the negative effects of the exchange rate decline of the Brazilian Real against the Euro during the 2 nd Half of 2011 (Eur 13 million); the recurring results of the operations during the period (a net loss of Eur 21 million) the capital losses recognized as the result of the divestment from the Ecometais Subsidiary and from minority interests in the Affiliates jointly held with Santander Consumer (Eur 28 million). Alfragide, 4 April 2012 José Maria Cabral Vozone Investor Relations 4
CONSOLIDATED INCOME STATEMENT 12-MONTH PERIOD ENDED 31 DECEMBER UNIDAS PORTUGAL Consolidated EUR ('000) 2011 2010 % Change 2011 2010 % Change 2011 2010 % Change Sales 102.461 188.788-45,7% 550.277 695.540-20,9% 652.738 884.327-26,2% Services Rendered 115.157 137.590-16,3% 14.570 16.709-12,8% 129.728 154.298-15,9% Turnover 217.618 326.377-33,3% 564.847 712.248-20,7% 782.465 1.038.626-24,7% Effective Margin 117.520 146.775-19,9% 80.458 100.304-19,8% 197.978 247.079-19,9% % Effective Margin 54,0% 45,0% 9,0% 14,2% 14,1% 0,2% 25,3% 23,8% 1,5% SG&A - Comercial Costs (5.081) (6.360) -20,1% (11.278) (14.896) -24,3% (16.359) (21.256) -23,0% SG&A - Vehicle Costs (23.339) (32.503) -28,2% (1.966) (3.394) -42,1% (25.305) (35.898) -29,5% Sub Total Variable Costs (28.420) (38.863) -26,9% (13.244) (18.290) -27,6% (41.664) (57.153) -27,1% SG&A - Non Variable Costs (16.416) (20.575) -20,2% (14.086) (17.945) -21,5% (30.503) (38.520) -20,8% Payroll Expenses (19.420) (25.778) -24,7% (25.366) (27.797) -8,7% (44.786) (53.574) -16,4% Sub Total Overheads (35.836) (46.353) -22,7% (39.452) (45.741) -13,7% (75.289) (92.094) -18,2% Taxes 1.283 4.140-69,0% (2.955) (706) 318,5% (1.672) 3.434-148,7% Operating Costs (62.973) (81.076) -22,3% (55.651) (64.737) -14,0% (118.625) (145.813) -18,6% EBITDA 54.547 65.699-17,0% 24.806 35.567-30,3% 79.353 101.266-21,6% % EBITDA 25,1% 20,1% 4,9% 4,4% 5,0% -0,6% 10,1% 9,7% 0,4% Depretiation and Amortization (38.581) (63.394) -39,1% (2.616) (3.211) -18,5% (41.197) (66.605) -38,1% Gains/(Losses) on Assets Sold - (2.866) 100,0% 45 264-83,1% 45 (2.602) -101,7% Provisions (2.328) (3.111) -25,1% (422) (405) 4,3% (2.751) (3.515) -21,8% EBIT 13.637 (3.673) 471,3% 21.813 32.215-32,3% 35.450 28.542 24,2% % EBIT 6,3% -1,1% 7,4% 3,9% 4,5% -0,7% 4,5% 2,7% 1,8% Dividends and Investments Gains - - 0,0% (1.669) 172-1069,6% (1.669) 172-1069,6% Interest (31.238) (37.407) -16,5% (7.040) (9.818) -28,3% (38.278) (47.225) -18,9% Other Finantial Costs (6.376) (7.986) -20,2% (16.513) (6.675) 147,4% (22.889) (14.661) 56,1% Financial Income (37.614) (45.394) 17,1% (25.221) (16.321) -54,5% (62.836) (61.714) -1,8% EBT (23.977) (49.066) 51,1% (3.408) 15.895-121,4% (27.385) (33.172) 17,4% % EBT -11,0% -15,0% 4,0% -0,6% 2,2% -2,8% -3,5% -3,2% -0,3% Net Profit excluding sold affiliated companies attributable to SAG Gest (15.344) (35.462) 56,7% (6.073) 10.765-156,4% (21.417) (24.697) 13,3% Net Income from Affiliated companies - - (996) (2.502) -60,2% (996) (2.502) -60,2% Losses on Ecometais - - (6.790) - (6.790) - Losses on Santander Consumer Iber-Rent SL - - (19.413) - (19.413) - Losses on Santander Consumer Multirent Sp z.o.o. - - (633) - (633) - Change of Unidas Consolidation Method 28.271 - - - 28.271 - Net Profit attributable to SAG Gest 12.927 (35.462) 136,5% (33.905) 8.263-510,3% (20.978) (27.199) 22,9% % Net Profit 5,9% -10,9% 16,8% -6,0% 1,2% -7,2% -2,7% -2,6% -0,1% 5
CONSOLIDATED INCOME STATEMENT 3-MONTH PERIOD ENDED 31 DECEMBER UNIDAS - 4 th QUARTER PORTUGAL - 4th QUARTER CONSOLIDATED - 4th QUARTER EUR ('000) 2011 2010 % Change 2011 2010 % Change 2011 2010 % Change Sales 16.183 50.087-67,7% 126.946 189.022-32,8% 143.129 239.110-40,1% Services Rendered 20.467 35.498-42,3% 2.966 4.177-29,0% 23.433 39.675-40,9% Turnover 36.650 85.585-57,2% 129.913 193.199-32,8% 166.562 278.784-40,3% Effective Margin 21.590 33.208-35,0% 14.695 25.151-41,6% 36.285 58.359-37,8% % Effective Margin 58,9% 38,8% 20,1% 11,3% 13,0% -1,7% 21,8% 20,9% 0,9% SG&A - Comercial Costs (819) (1.719) -52,3% (3.164) (3.773) -16,1% (3.984) (5.492) -27,5% SG&A - Vehicle Costs (4.092) (8.571) -52,3% 263 (934) -128,2% (3.829) (9.505) -59,7% Sub Total Variable Costs (4.911) (10.291) -52,3% (2.901) (4.707) -38,4% (7.813) (14.997) -47,9% SG&A - Non Variable Costs (2.764) (5.010) -44,8% (2.474) (4.446) -44,4% (5.238) (9.456) -44,6% Payroll Expenses (3.502) (6.589) -46,9% (6.272) (7.540) -16,8% (9.774) (14.128) -30,8% Sub Total Overheads (6.266) (11.599) -46,0% (8.747) (11.986) -27,0% (15.013) (23.585) -36,3% Taxes 276 681-59,4% (961) (8) 12519,6% (685) 673-201,7% Operating Costs (10.901) (21.209) -48,6% (12.609) (16.700) -24,5% (23.510) (37.909) -38,0% EBITDA 10.689 11.999-10,9% 2.086 8.451-75,3% 12.775 20.450-37,5% % EBITDA 29,2% 14,0% 15,1% 1,6% 4,4% -2,8% 7,7% 7,3% 0,3% Depretiation and Amortization (7.562) (13.439) -43,7% (631) (688) -8,3% (8.193) (14.127) -42,0% Gains/(Losses) on Assets Sold 476 (650) 173,2% 1 (354) -100,2% 476 (1.004) -147,4% Provisions (401) (985) -59,3% (834) (206) 304,4% (1.234) (1.191) 3,6% EBIT 3.202 (3.075) 204,1% 622 7.203-91,4% 3.824 4.128-7,4% % EBIT 8,7% -3,6% 12,3% 0,5% 3,7% -3,2% 2,3% 1,5% 0,8% Dividends and Investments Gains - - 0,0% (1.848) (9) 20542,8% (1.848) (9) 20542,8% Interest (2.895) (8.779) -67,0% (1.557) (2.624) -40,7% (4.451) (11.404) -61,0% Other Finantial Costs (1.036) (2.718) -61,9% (4.595) (2.156) 113,1% (5.632) (4.875) 15,5% Financial Income (3.931) (11.498) 65,8% (8.000) (4.790) -67,0% (11.931) (16.287) 26,7% EBT (729) (14.573) 95,0% (7.378) 2.414-405,7% (8.107) (12.160) 33,3% % EBT -2,0% -17,0% 15,0% -5,7% 1,2% -6,9% -4,9% -4,4% -0,5% Net Profit excluding sold affiliated companies attributable to SAG Gest (380) (13.355) 97,2% (7.129) 1.277-658,0% (7.509) (12.078) 37,8% Net Income from Affiliated companies - - (0) (1.992) -100,0% (0) (1.992) -100,0% Losses on Ecometais - - (10) - (10) - Losses on Santander Consumer Iber-Rent SL - - - - - - Losses on Santander Consumer Multirent Sp z.o.o. - - - - - - Change of Unidas Consolidation Method - - - - - - Net Profit attributable to SAG Gest (380) (13.355) 97,2% (7.139) (715) 899,0% (7.519) (14.070) 46,6% % Net Profit -1,0% -15,6% 14,6% -5,5% -0,4% -5,1% -4,5% -5,0% 0,5% 6
CONSOLIDATED BALANCE SHEET CONSOLIDATED ASSETS 2011 2010 Property, Plant and Equipment 212.803 369.421 Intangible Assets 57.669 60.971 Investment in Associates 4.078 46.472 Prepayments on Investments - 20.493 Other Financial Assets - 13 Investment Property 1.479 - Deferred Income Tax Assets 39.340 63.096 Total - Non-Current Assets 315.369 560.467 Inventories 121.702 123.938 Account Receivable 266.057 249.482 Current Income Tax 16.522 9.200 Taxes - Other Than Income Tax 2.384 4.561 Cash and Cash Equivalents 79.743 25.451 Total - Current Assets 486.409 412.632 Total Assets 801.778 973.098 EQUITY 2011 2010 Registered Share Capital 169.764 169.764 Own Shares - Par Value (16.771) (16.771) Own Shares - Share Premium (16.357) (16.357) Share Premium 149.664 149.664 Consolidation Adjustments: Cumulative Translation Adjustment (18.438) 27.095 First Consolidation Adjustments (269.069) (269.069) Reserve for Revalution 2.651 2.651 Reserves: Legal Reserve 19.052 18.823 Other Reserves 7.220 5.473 Retained Earnings Brought Forward 22.501 49.852 Net Profit For The Year attributable for SAG Gest (20.978) (27.199) Sub-Total 29.238 93.925 Minority Interests 1.304 1.442 Total Equity 30.542 95.367 LIABILITIES 2011 2010 Bank Loans 166.710 342.994 Deferred income tax Liabilities 1.688 2.023 Accounts Payable (Medium and Long Term) - 29.265 Provisions 12.044 13.161 Total - Non-Current Liabilities 180.442 387.443 Bank Loans 343.329 202.755 Accounts Payable (Short Term) 209.561 236.097 Current Income Tax 10.548 11.100 Taxes - Other Than Income Tax 27.356 40.335 Total - Current Liabilities 590.793 490.288 Total Liabilities 771.235 877.731 Total Equity and Liabilities 801.778 973.098 7