Financial Reports
Tecnologico de Monterrey
Burkenroad Latin
America (Mexico)
Burkenroad Reports is produced by a select group of students at ITESM. This report is based on
information available to the public and does not purport to be a complete statement of all data
relevant to the securities mentioned and its accuracy cannot be guaranteed. Furthermore, this
report is not an offer to buy or sell a solicitation of an offer to buy or sell the securities mentioned.
Analysts:
Advisors:
Eny García
Aurelio Aguilar
Ma. Concepción del Alto
Bárbara de la Garza
Jordán Rodríguez
Miguel Moreno Tripp
Oliver Fernández
Carlos Morán
Roberto Martínez
All amounts are as of the date of the report as reported by BMV, and Infosel Inversionista. *EBITDA is based on operating income plus depreciation and amortization, divided by the number of shares outstanding.
** Equity Market Capitalization is based on market price for the number of shares outstanding.
All amounts in Mexican pesos .
*** Enterprise value is based on market capitalization adjusted for long-term debt, minority interest, cash, and short-term investments.
^Performance is based on ending prices and dividends for the November 2003 to November 2004 period.
Valuation
2003A
2004E
2005E
2006E
EPS
$0.75
$1.16
$2.77
$2.30
P / E
29.03x
18.82x
7.90x
9.50x
EBITDA*
$4.56
$7.23
$9.11
$7.12
P / EBITDA
4.80x
3.03x
2.40x
3.07x
Market Capitalization
Stock Data
Shares Outstanding (000)
286,129
52-Week Range:
$17.56 - $22.31
Market Cap (M)
$5,293
12-Mo. Stock Performance: ^
5.956%
Enterprise Value (M)**
$7,033
Dividend declared on 06/05/04
$0.60
6-Mo. Avg. Daily Volume:
86,042
Book Value Per Share
$18.40
Beta
0.87
November 1, 2004
GRUPO INDUSTRIAL SALTILLO, S.A. de C.V.
GISSA*/BMV
CONTINUING COVERAGE: GISSA faces economic
challenges by maintaining and adapting strategies.
Investment Recommendation: MARKET OUTPERFORM
Price: $18.40
IPC: 12,076.08
IMC30: 232.75
DJIA: 10,522.23
• Castech, a company of GISSA was awarded as Supplier of the Year 2003 by General
Motors for its excellent performance, quality, service, technology, and price.
• The automotive metal mechanical division launched operations of an iron plant,
CIMETECH, located in Irapuato, Guanajuato, with a US$ 51 million investment, increasing
production volume at 57% compared to 2003.
• VITROMEX, a ceramic tiles plant, started operations in Chihuahua. This investment
of US$ 42 million will allow to meet actual demand and increase production capacity
by 20%.
• GISSA will start important agreements with Toyota and Nissan in 2005.
• GISSA issued Ps$ 2,160 million graded “mxAA” (national scale).
• It is recognized as one of the top 20 most ethical companies in Latin America
• Accumulated investments by the end of the third quarter amounted to US$ 58 million
in maintenance and construction of currently operating new plants.
STOCK PRICE PERFORMANCE
Source: Infosel Financiero
COMPANY DESCRIPTION
Grupo Industrial Saltillo, S.A. is a Mexican holding company with three business divisions. Founded in
1928 when Isidro López Zertuche and his brothers Carlos and Ricardo started a laminated metal products
factory. In 1975 the company name was changed to its current name and in 1985 the legal form was
changed to variable capital. In 1976 it became a listed company in the Mexican Stock Exchange (BMV)
with the ticker symbol GISSA and current series *. Its ADRs trades at the over the counter market since
March 2000 under the name GISQY. The company has joint ventures with foreign companies Nork
Hydro Aluminum, Metal Technologies, and NPL.
GISSA have subsidiaries in several locations across the country and employs 11,071 people.
The company is a conglomerate of three business units:
•
Metal mechanical
•
Building Materials
•
Housewares
Sales
47%
53%
Domestic
Foreign
Sales by Division at III Quarter 2004
44% 44% 12% Metal and Automotive Building Materials Housewares
Source: GISSA
1
2
Metal Mechanical Division
This business includes the manufacturing of gray cast iron, ductile iron, and aluminum for monoblocks,
motor heads and auto parts. The automotive metal mechanical has the following companies:
1.
Castech
: Aluminum blocks and heads for internal combustion engines.
2.
Cifunsa:
Iron engine blocks and heads for diesel and gasoline motors.
Tech Matec
and
Ditemsa
: The first manufactures automation systems for manufacturing processes and the
second produces plastic injection moldings and tools. They help round up
Castech
and
Cifunsa
operations.
In order to supply General Motors, a new plant of
Castech
starts operations in 2005 with a US$ 20 million
investment. This project –employing 200 people- will support
Castech’
s growth by increasing exports to
Canada and Australia; for this last country, daily exports account for 1,200 motor heads and 600 aluminum
blocks.
As for
Cifunsa,
the group invested US$ 11 million in June 2004, to expand the heart pack area for Toyota,
a new GISSA customer.
The strategy of this division is focus on developing new customers such as Toyota, Nissan, Ford and VW,
a business increase with John Deere and Caterpillar as well as an increase of the performance and focus on
larger margins products.
During the third quarter of 2004, this division contributed with 44% of consolidated sales, an increase of
68% versus 2003 and 25% against third quarter of 2003 and a 15% as compared to the second quarter of
2004. All of this was due to its US customers, John Deere and Caterpillar, the consolidation of the EV-6
project with GM and the start of the new automotive ductile iron plant.
Accumulated nine months sales had an increase of 45% versus last year’s same period. However,
EBITDA fell 14% as compared to the second quarter but a growth of 23% year to year.
Building Materials Division
This division manufactures ceramic tiles, water and air heaters, as well as markets bathroom fixtures, with
two companies:
1.
Vitromex:
Manufactures and markets ceramic tiles and bathroom fixtures. Sales for the domestic
market trough Vitromex and Artemis brands and the US market with Vitromex USA and St. Thomas
Creations brands.
2.
CINSA Boilers:
Manufactures water heaters with three brands for different market niches: Cinsa
Boilers, Cal-o-Rex, and Heat Master.
In August 2004, a new VITROMEX plant was opened in Chihuahua, with an investment of US$ 42
million. It was planned to begin operations until 2005, but an increasing demand forced the start of
operations ahead of schedule.
Since 1998, the ceramic tiles, bathroom fixtures, and water heaters segment has invested an amount of
US$ 110 million for the manufacturing plants located in the states of Guanajuato and San Luis Potosí.
This division strategy is focused on developing new products, migrate operations to more efficient plants
and an increased regional penetration as well as an increase in exports.
At the third quarter of 2004, revenues of this division were 44% of net consolidated sales. Comparing
results of this quarter with the same period in 2003 revenues grew up 5% however, operating income
decreased 10%, due to increases in raw materials costs, the start up of the Chihuahua plant, and an
unexpected provision of US$ 0.9 million, as well as the re-launching of some bathroom fixtures brands in
the US market.
EBITDA by Division
III Quarter 2004
34%
65%
1%
Metal and
Automotive
Building Materials
Housewares
Source: GISSA
Housewares Division
This division manufactures and markets stainless steel, steel enamel, and aluminum kitchenware as well as
ceramic ware, through four subsidiaries:
1.
Cinsa:
Stainless steel, steel enamel, novacero, and aluminum kitchenware and tableware.
2.
Enasa:
Stainless steel, porcelain, and enamel steel non stick kitchenware, pots, and pans.
3.
Esvimex:
High quality enamel for the ceramic industry.
4.
Santa Anita:
Household and institutional ceramic ware.
During the last two years, GISSA has been forced to lower prices due to the intense competition by
increasing imports of Chinese and South American products. In order to maintain competitiveness and
increase profitability margins, the conglomerate has increased quality standards and streamlined
production processes.
On the other hand,
Enasa
will invest a million dollars in the development of a new production line, which
will strengthen the production of non stick pans.
At the third quarter of 2004, this division sales were 12% of consolidated net revenues (Ps$ 234 million).
Comparing the third quarter of 2004 with the same period of 2003, division sales decreased 3%, operating
losses amounted to Ps$ 10 million, and EBITDA decreased 92% year-to-year.
GISSA Overall Strategies
Implementation of a quality model for goals and objectives achievement: transformation map towards
a competitive organization, supported by tools such as Kaizen and information technologies.
Leading edge technology, world class quality standards, strong distribution channels, and growth by
means of capital investment.
Focus on business identified as core businesses due to their growth and profitability potential.
Board of Directors
Name
Function
Ernesto López de Nigris
Co-Chairman
Juan Carlos López Villarreal
Co-Chairman
Felipe César Mellado Flores
Secretary
Adán Elizondo Elizondo: member of Board of Directors of Grupo Cydsa, S.A.
Proprietary Commissary
Antonio Madero Bracho: Founder and Chief Executive Officer of Board of
Directors of San Luis Corporation and member of several boards of directors.
Director
Eugenio Clariond Reyes Retana: Chairman of Board of Grupo IMSA and
member of other boards of directors.
Director
Julián Dávila: Private Investor
Director
Guillermo Elizondo López: Regional Advisor of Grupo Financiero HSBC, S.A.
de C.V.
Director
Eduardo López Alanís: Private Investor and member of Board of Directors of
Compañía Hotelera de Norte S.A.
Director
Armando López Recio: Chairman of Board of Directors of Compañía
Inmobiliaria Mágnum S.A., Chairman of Board of Directors of Compañía
Agroindustrial Makike, S.A.
Director
Andrés Marcelo Sada Zambrano: member of Board of Directors of Valores
Corporativos, S.A. de C.V. and Grupo Cydsa, S.A. de C.V
Director
José Antonio Fernández Carvajal: General Manager and Chairman of Board of
Directors of FEMSA and Coca Cola Femsa, among others.
Director
José Luís Berrondo Ávalos: member of board of HSBC and Grupo Mabe, S.A.
Director
Claudio X. González: Chairman and General Manager of Kimberly Clark de
México and member of several boards of directors.
Director
Board of Officers
Juan Carlos López Villarreal
Co-Chief Operations Officer
Ernesto López de Nigris
Co-Chief Operations Officer
Emilio del Bosque
Corporate Supplying President
Rodolfo Fernández González
Ceramic Tiles and Bathroom Fixtures Business President
José Manuel Garza Martínez
Foundry Iron Business President
Marco Antonio Barraza Valdez
Foundry Aluminun Business President
Guillermo Triana Flores
Water Heaters Business President
Marcelo Rodríguez Segovia
Housewares Business President
Francisco Guzmán Alvarez
Human Resources President
Felipe César Mellado Flores
Corporate Services President
Source: GISSA prospectus, February 2004
Corporate Governance
GISSA implemented in 2002 measures promoting a transparency culture, good management practices, and
optimization of the corporate structure, which improved the group performance. In 2003 GISSA was
acknowledged as one of the top twenty ethical companies in Latin America in a survey conducted by
Management & Excellence agency.
Financial Summary
GISSA consolidated sales at the third quarter of 2004 were Ps$6,181 million, an increase of 18.2% year to
year; 47% of total sales are domestic and the remaining 53% are exports. During the last quarter, GISSA
made investments of US$18 million for new projects and maintenance.
ROE
0.00%
5.00%
10.00%
15.00%
20.00%
III_1999
III_2000
III_2001
III_2002
III_2003
III_2004
GISSA
ALFA
CARSO
Source: Prepared with information from Infosel Inversionista
Metal Mechanical Division grew 68% compared to same period of last year, due to a strong demand of
diesel blocks and heads, the consolidation of the US and Australia exports project of aluminum blocks and
heads, and the increase in production of iron auto parts. Recovery of the US economy is other variable
that explains this division performance; sales of this division account for 44% of consolidated net
revenues.
Sales for last quarter of 2004 are also expected to improve due to the demand of steel blocks and heads by
Chrysler, as well as new orders placed by Toyota, a client with whom GISSA recently signed an
agreement.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
III_1999
III_2000
III_2001
III_2002
III_2003
III_2004
0%
5%
10%
15%
20%
25%
Sales
Operating Margin
Source: Prepared with information from Infosel Inversionista
On other hand, Building Materials Division increased revenues in 5% compared to the same period of
2003. Performance of the water heaters and ceramic tiles business is outstanding; revenues increased for
these businesses in 12 and 7%, respectively, due to the economic recovery of the Mexican and US
markets.
The scenario for this division is positive due to several factors, among them, increased sales pushed by the
federal government housing program, consolidation of ceramic tiles marketing strategies, the increase in
water heaters and ceramic tiles exports to US, all this supported by the lowest interest rates in modern
history of Mexico. Recently, this economic sector has experienced the greatest historical growth.
GISSA opened in June 2004 the VITROMEX plant in Chihuahua, which will increase production capacity
by 20%. This will allow meeting the existing demand of ceramic tiles.
Consolidated cost of sales had an increase of 23.5% compared to the same period of 2003, due to, among
other reasons: exchange fluctuation from operations in some of the divisions of the group, as well as the
increase in some commodities; steel and iron scrap had price increases of 60% during the year. This was
the cause of operating income decrease by 19% compared to 2003. Steps to correct inefficiencies in the
plant capacity utilization and reduction of implicit costs have been taken. EBITDA was Ps$905 millions,
an increase of 9% compared to the same period of 2003.
It is important to mention that the Company has taken steps towards correction of inefficiencies in plant
utilization thereby reducing implicit costs.
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
20.00
III_1999
III_2000
III_2001
III_2002
III_2003
III_2004
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Interest Coverage
Long Term Liabilities/EBITDA
Source: Prepared with information from Infosel Inversionista
INDUSTRY ANALYSIS
Metal-Mechanical Industry
This industry is cyclical and its performance depends basically on automobiles demand. Since the US is
one of the largest consumers, this industry is tightly related with the economic growth of that country.
This industry is under several risks, challenges, and threats. One of the most important is the constant is
the variation on manufacturing costs (iron, steel, energy, natural gas) prices, together with the permanent
capital investment needs to keep a competitive position in the market.
Recently, the Mexican Automotive Industry Association stated that the production of January-August
2004 increased 9% (146,065 units), 4.4% lower than that for the same period in 2003. In August, export
units were 110,050, accounting for 79% of total production. Although the number of units of last year has
not been exceeded, recovery in the following months is expected.
Car Production Units Index
Source:INEGI
According to a CEPAL study, automotive industry shows great challenges, but it could double its capacity
by 2010, provided increased competitiveness through innovation, logistics development, and labor
training.
In this area, GISSA has continues to invest strongly in its iron and aluminum blocks manufacturing plants,
and given that the automotive industry is growing, this division is expected to generate the largest portion
of revenues in the group.
In this regard, last March, the Secretary of Economy authorized a decrease in customs duties for steel
imports from countries with whom Mexico does not have free trade agreements. This will benefit GISSA
by allowing an increase of its suppliers’ portfolio and improving operating margins thanks to raw
materials costs reduction.
As of the third quarter, Mexican economy shows a GDP growth of 4.4%, compared to same period of
2003. This increase is explained by a high performance of industrial activity, which includes outstanding
improvement of manufacturing activity (5.0%). An increase in exports and improvement in employment
levels had a favorable effect on this industry.
That, as well as the US economy strength. According to Banamex, the US economy has performed
according to the beginning of 2004 analysts expectations with an increase of the GDP grater than last
year’s 3%. Such increase was achieved notwithstanding higher oil prices and the fact that at the second
semester there were not important fiscal aids. Analyst’s expectations set end of year GDP growth at 4.4%.
The industrial sector has been benefited by this set of conditions, as is the case of the car manufacturing
sector. For example, from the first to the second semester of 2004, there was an increase greater than 15%
Source: INEGI and Santander
Mexico – Gross Domestic Product (Annual Variation %)
0
50
100
150
200
250
1993/01
1993/09
1994/05
1995/01
1995/09
1996/05
1997/01
1997/09
1998/05
1999/01
1999/09
2000/05
2001/01
2001/09
2002/05
2003/01
2003/09
2004/05
in the light vehicle and it is expected a slight increase for the next year. This is also supported by an
increase in car loans due to lower interest rates and better economic conditions as mentioned before.
Altogether , this imply growth opportunities for GISSA, since more than 50% of its sales are exports.
However, Brazil is a latent threat in the production of specialized auto parts, and intends to expand to
markets such as Germany, Hungry, and Argentina, projecting exports of US$ 100 million by 2007. But
actual pressure comes from the fact that the American market prompted Sabo Company to invest US$ 10
million in Brazil to build a second facility that will serve General Motors, which is GISSA’s main client.
Construction Industry
GISSA is an active participant in the building material sector, that has enjoyed a dynamic behavior in the
last years.
Due to demographic tendencies and plans that support housing construction, Mexican government
forecasts that housing demand will grow during the next twenty five years, and is planning to build
approximately twenty million houses. According to INEGI´s projections for 2005, federal support will
amount to Ps$ 126.3 million, both for financing the acquisition and house improvements, which represents
an actual growth of 4.5% compared to current year.
This industry has grown considerably; according to Lloyd’s economic report, listed companies in the
house construction industry experienced a 55% growth as of June 2004. During April-June 2004 alone,
21,116 houses were built, and by the end of the year, an above 14% growth for the housing industry is
expected.
Source: CONAPO
On another hand, INEGI forecasts that demand for houses during 2004 – 2006 will be around 2.1 million
units, while 1.1 million households will require repair and maintenance. Demand is focused mainly in five
states: Estado de Mexico 21.2%, Baja California 7%, Veracruz 6.9%, Jalisco 6.6%, and D.F. 5.8%.
Although the construction industry in Mexico appears promising, it is not feasible to stimulate the housing
purchases without the necessary economic conditions that include attractive interest rates. For example,
mortgage loans rates in Mexico, both medium and long-term, have decreased dramatically to below 15%.
Last year, only 489 thousand houses were purchased through some form of financing and by the end of the
year this amount is expected to reach 575 thousand units. Another factor is about the tax benefits for
financial expenses on individuals mortgages, together with fierce competition among banks and other
financial institutions.
Tasa de crecimiento anual de viviendas
particulares en Mexico
0
0.01
0.02
0.03
0.04
0.05
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
It is important to mention that in Mexico, financing for the purchase of low value houses is dominated by
INFONAVIT, who has granted 1.8 million loans in the last three years and plans to increase credits 11.1%
per year during the next five years. If this rate continues, INFONAVIT will be the largest mortgager in
North America.
Anticipating the mortgage bonanza, several participants appear to be interested in opportunities that the
market of housing loans will offer. A clear example is that Grupo BBVA Bancomer acquired last
September, 100% of Hipotecaria Nacional, the largest private mortgage company in Mexico.
Hipotecaria Su Casita, another important mortgage company in the country, started offering mortgages in
Mexican pesos through its office in Denver, Colorado. This will allow Mexican residents in the US to
finance the acquisition of a house for their relatives in Mexico. Money transfers sent to Mexico by
Mexican residents in the US are an estimated US$ 13.3 million and are directed to purchasing non
essential goods instead of acquiring a house. This represents an attractive potential market.
On the other hand, goods and services offered increased 5.8% in actual terms from April to June 2004 due
to imports.
Also, wholesale and retail sales have grown 11.1% and 8.2% respectively, compared to the previous
quarter. This was due to middle class consumption financed by personal loans. The largest demand was
in chemical, electric material, and home products.
Based on the above and according to housing industry forecasts, prosperity and several opportunity areas
are foreseen for the Vitromex division in the medium and long term.
Home Products Industry
This division accounts for the smallest share of the group’s revenues (12%). Due to its low production
and marketing costs, China is a threat not only for GISSA, but for the Mexican industry in general.
China’s competitive advantage endangers the Mexican domestic industry. Therefore, Mexican government
has taken drastic measures, such as increasing compensatory quotas for the imports of Asian tableware,
which in the current year were 95.06%-99.81%, compared to 23%-26% rates prevailing in 1992.
On the other hand, final goods and services consumer expenditures grew 5.4% from April to June, 2004
in real terms, including home products, communication, financial services, etc.
Macroeconomic Issues
During the year, inflation was higher than expected –particularly August, September, and October. The
increase was due to increments in energy and vegetables (tomato) prices. Also, there were considerable
increase in utilities along the rise of international prices of raw materials and energy; domestic gas prices,
oil, and several raw materials are based on international prices. October is the latest inflation rate known,
with an increase of 0.69 percent equivalent to an annual rate of 5.40 percent.
Source: A NYMEX Natural Gas Future contract
According to Banxico´s latest survey, an increase in consumer prices of 0.62 percent and 0.37 percent are
expected for November and December. Analysts estimate an inflation rate of 5.18 percent for 2004, and a
underlying inflation rate of 3.85 percent. Inflation for 2005 is expected to be between 3.5 and 4.4 percent,
and is estimated in 3.93 for 2006.
Concept
SHCP
Private Industry
Banamex
Banxico
CEESP
2004
2005
2004
2005
2004
2005
2005
2005
GDP (% annual actual)
4.0
3.8
4.02
3.72
4.3
3.7
4.1
3.9
Inflation (% annual)
3.9
3.0
5.18
4.19
5.4
4.4
3.9
3.6
Cetes 28 (% at Dec)
7.7
7.8
8.09
8.33
8.3
9.0
7.9
7.4
Exchange Rate Dec
11.3
11.6
11.54
11.95
11.4
11.9
11.91
11.55
Fiscal deficit (% of GDP)
0.3
0.1
0.32
0.29
N.A.
N.A.
0.4
0.2
Mexican oil mex dpb)
29.2
23
31.72
29.08
N.A.
N.A.
26.5
26
GDP US (% annual actual)
4.4
3.7
4.3
3.49
N.A.
N.A.
3.6
3.9
The latest CETES rate for 28 days is 8.36 percent, the highest in the last 18 months; this adds to nine
weeks of interest rates increases in a row.
EMBI Spread Mexico vs. Global
An important issue is the urgent necessity of a tax reform, to modernize the tax system and make energy
production a more competitive industry, and a key element in industries such as GISSA.
PEER GROUP ANALYSIS
♦
ALFA
ALFA is a Mexican conglomerate consisting of five business units: aluminum auto parts,
telecommunications, steel, food, and petrochemical y synthetic fiber. Through its subsidiary Nemak,
ALFA has an important international position as leader in the production of aluminum motor heads.
ALFA owns manufacturing plants both in Mexico and other countries, and exports to more than 45
countries. Consolidates sales for third quarter is Ps$
41,746
million. It employs 30,193 people. Ticker
symbols: ALFAA (BMV) and XALFA (Latibex).
♦
CARSO
CARSO is a group of domestic companies that participate in the automotive, construction, energy and
telecommunications industries. This group also manufactures aluminum, copper, and PVC products, and
has operations in the chemical and mining industries. The group competes in the retail arena with
department stores such as Sanborns, Sears, and music stores, as well as the bakery chain El Globo. In the
consumer arena, Porcelanite, a direct competitor of GISSA, manufactures tiles. Cigatam manufactures
and markets tobacco. The group’s consolidated sales for Ps$ 49,070 million, at the end of September
2004. This group employed 72,594 people. BMV ticker symbol: GCARSOA1.
♦
DESC
Companies that compete in four sectors: auto parts, chemical, food, and real estate. In the first business,
DESC manufactures a range of products, from pistons, steel rims, traction axels, and motor trains. It is
positioned as the largest independent manufacturer in Mexico. In the chemical business, DESC produces
synthetic rubber, methyl methacrylate, polystyrene, decorative laminates and chipboard. The food division
includes processed food and pig farms. Finally, the real estate business has ambitious project for the
construction of corporate buildings and housing areas. At the end of the third quarter in 2004, DESC had
consolidated sales were Ps$ 17,387 million, and employed 13,854 people. Ticker symbols: DESCA,
DESCB (BMV); DES (NYSE).
Information of competitors at 3rd Quarter 2004
Sales in
Pesos (M)
% change in
sales
3Q03/3Q04
Operating
margin (%)
EBITDA in
Pesos
(M )
Liability/
Stockholders’
Equity
ROE
%
GISSA:
2,248
25
6.2
303
1.02
2.80
Metal mechanical
1,020
68
10
104
Construction
993
5
13
196
Home products
234
(3)
(4)
3
ALFA:
14,695
20.5
9.2
1,868
1.43
6.66
Nemak
2,570
9
10.4
407
CARSO:
17,173
17.9
12.5
2,756
1.23
10.53
Porcelanite
917
10
19.5
258
DESC:
6,165
12
4.5
592
1.13
N/A
Securities Exchange Information
Source: Prepared with information from Finsat, El Financiero at November 1, 2004
Divisions’ Competitors
Division:
Product:
Market share %
in Mexico:
Market
rank:
Competitors and
market share %:
Automotive
metal
mechanical
Iron blocks and heads
(gasoline)
14
2 (US)
N/A
Iron blocks and heads
(diesel)
19
2 (US)
N/A
Aluminum blocks and
heads
6
3 (US)
Nemak 40
Teksid 10
Construction
products
Ceramic tiles and walls
22
2 (Mexico)
Porcelanite 36
Lamosa 11
Interceramic 11
Water heaters
60
1 (Mexico)
Magamex 15
Bathroom fixtures
19
2 (Mexico)
Ideal Standard 19
Lamosa 18
Orion 6
Home products
Kitchenware
48
1(Mexico)
Tableware
23
1(Mexico)
El Ánfora
STRATEGIC ANALYSIS
Metal and Automotive Division
Competitors
DESC and NEMAK (ALFA)
Strengths
Experienced manufacturers of motor heads, leading edge technology,
adapts easily to change, flexible production and is globally positioned.
They have several clients for its production of steel parts.
Opportunities
Diversifying clients and international growth.
Weaknesses
Economic situation tightly related to US, showing a dependency. Limited
client portfolio, constant technology changes. Only one client in the
aluminum parts manufacturing business.
Threats
Clients have start building their own manufacturing plants. Price of some
raw materials is set by the international market, causing constant variation
and a need for hedging from events that would have a direct impact on
costs. Required capital investment is very high.
Company:
Enterpris
e value
(Million of
Mexican
pesos)
Market
capitalization
(Million of Mexican
pesos)
Trading
activity
EV/
EBITDA
P/EBITDA
P/EPS
GISSA *
7,033
5,265
6.94/Medium
7.77
5.82
23.27
ALFA A
35,485
26,130
9.34/High
6.55
4.83
10.77
CARSO A1
52,249
43,076
8.54/High
6.49
5.35
11.08
Building Materials Division
Competitors
LAMOSA, PORCELANITE and INTERCERAMIC
Strengths
Competitive product design and innovation departments, favorable market
expectations, leading edge technology, highly qualified labor.
Opportunities
Growing Mexican market for the construction business, untapped market,
expansion in international markets.
Weaknesses
Strong competition in domestic market.
Threats
High costs in human resources and working capital, due to constant
innovation in design and materials.
Housewares Division
Competitors
El Ánfora
Strengths
Few domestic competitors and good market position.
Opportunities
Manufacturing in China in order to reduce costs provided compensatory
quotas are not applied.
Weaknesses
Manufacturing costs and lack of strategies, unlike competitors.
Threats
Chinese products competing in the market, compensatory quotas.
INVESTMENT THESIS
Market leadership:
GISSA holds leadership in many businesses.
Financial soundness:
Notwithstanding some difficulties at some divisions, due to outside factors, they
have financial soundness and growth in sales.
Client development:
Asian car companies’ contracts allow GISSA to hedge risks among car companies
Consistent investment:
During 2004, GISSA has invested US$ 58 million, with a portion employed in
plants’ maintenance and the remaining for new plants construction. Opening of the VITROMEX and
CIMETECH plants are part of this strategy.
Indebtedness:
According to our projections, total debt ratio will reach its maximum level by the end of this
year (53%), and starting next year it will gradually decrease to 39%, mainly by the return of investment in
plants, and revenues that will be generated with the increased capacity.
Strong management:
Measures related to corporate governance that were implemented in 2002 are
consolidating the image of the group and strengthening its principles of austerity, labor ethics, and
commitment.
Quality:
GISSA holds important agreements with global clients that endorse product quality of the
conglomerate from Saltillo. GISSA operations follows world class quality standards and information
technology that support the organization’s competitiveness. GISSA has also set continuous improvement
practices through the Kaizen quality model.
RISK ANALYSIS
♦
Volatility in input prices
GISSA uses raw materials -such as steel, copper, aluminum, and gas- that have international set prices
therefore, its manufacturing costs structure is affected by these variations. These costs cannot be
controlled, but their repercussions can be attenuated.
♦
Government Reforms
Lack of legal reforms, specially it the electric sector, inhibits performance to the companies that are part
of GISSA. Energy has a high impact into operative costs.
Stagnation affecting the energy reform has a negative repercussion in GISSA’s (and other manufacturing
companies) competitiveness. Dependency on energy has a direct impact on operating costs.
♦
Concentration of Clients
A GISSA plant located in the outer limits of Saltillo is focused in manufacturing motor heads and hearts,
and total production is destined to only one client: General Motors. This dependency is a risk for the
company, because its sales and exports are important to the group. Diversifying clients should be
considered.
♦
Investment Requirements
GISSA participates in very competitive markets that demand consistent capital investment. If competitors
continue to enter, prices of products would decrease, and therefore, operating margins would also
decrease.
♦
Cyclical Demand of Products
Products offered by GISSA show cyclical demand. This is due to economic situation of the countries in
which GISSA is present. Many factors are not under the control of GISSA and this has a strong impact on
the capital investments required to stay competitive.
INVESTMENT SUMMARY
Target price valuation was calculated using the discounted cash flows method or relative valuation. The
target price obtained was $21.88, therefore we are rating the stock as MARKET OUTPERFORM.
2002 A 2 003 A 3 1-Mar-04 30-Jun-04 30-Sep-04 31-Dec-04 E F A 2004 E 31-Mar-05 E 3 0-Jun-05 E 30-Sep-05 E 3 1-Dic-05 E F A 2005 E 31-Mar-06 E 3 0-Jun-06 E 30-Sep-06 E 7,620,235 7,316,179 1,937,288 2,023,617 2,262,927 2,627,424 8,851,256 2,473,869 2,511,721 2,650,269 3,076,733 10,712,592 2,877,914 2,847,009 2,950,255 5 ,447,399 5,388,249 1,545,052 1,707,393 1,767,591 1,748,321 6,768,358 1,781,372 1,863,187 1,912,808 2,047,298 7,604,664 2,072,314 2,111,902 2,129,320 2,172,837 1,927,930 392,236 316,224 495,336 879,102 2,082,898 692,498 648,534 737,461 1,029,436 3,107,928 805,600 735,106 820,935 1 ,219,536 1,245,215 257,738 176,849 355,155 456,538 1,246,280 328,505 332,735 397,865 534,609 1,593,715 382,158 377,152 442,899 953,301 682,716 134,498 139,375 140,181 422,564 836,618 363,992 315,799 339,596 494,826 1,514,214 423,442 357,954 378,035 4 27,232 164,901 (31,673) 108,414 (12,835) 37,935 101,841 34,680 32,874 33,295 28,615 129,464 39,971 30,507 28,086 526,069 517,815 166,171 30,961 153,016 384,629 734,778 329,312 282,925 306,301 466,211 1,384,750 383,470 327,448 349,950 105,257 95,503 1,759 20,772 20,962 43,492 4 20,812 422,312 164,412 10,190 132,054 384,629 691,286 329,312 282,925 306,301 466,211 1,384,750 383,470 327,448 349,950 1 68,847 192,537 61,298 3,777 55,624 191,023 311,722 114,473 98,994 128,005 231,540 573,012 133,299 114,573 146,246 251,964 229,774 103,114 6,412 76,431 193,607 379,564 214,839 183,931 178,296 234,672 811,738 250,171 212,875 203,704 2 46,531 231,485 104,722 8,400 78,007 193,607 374,391 214,839 183,931 178,296 234,672 811,738 250,171 212,875 203,704 2 46,531 231,485 104,722 8,400 78,007 193,607 374,391 214,839 183,931 178,296 234,672 811,738 250,171 212,875 203,704 246,531 231,485 104,722 8,400 78,007 193,607 374,391 214,839 183,931 178,296 234,672 811,738 250,171 212,875 203,704 8 ,695 15,868 12,506 520 17,991 10,649 41,666 4,075 (1,321) 3,798 12,470 19,022 4,741 (1,498) 4,227 2 37,836 215,618 92,216 7,880 60,017 182,957 332,726 210,764 185,252 174,499 222,201 792,716 245,430 214,373 199,476 100% 100% 100% 1 00% 100% 100% 100% 100% 1 00% 1 00% 100% 100% 100% 100% 100% 28.51% 26.35% 20.25% 15.63% 21.89% 33.46% 23.53% 27.99% 25.82% 2 7.83% 3 3.46% 29.01% 27.99% 2 5.82% 2 7.83% 12.51% 9.33% 6 .94% 6.89% 6.19% 16.08% 9 .45% 14.71% 12.57% 1 2.81% 1 6.08% 14.13% 14.71% 1 2.57% 1 2.81% 3.31% 3 .14% 5.32% 0 .32% 3.38% 7.37% 4 .29% 8.68% 7 .32% 6.73% 7 .63% 7.58% 8 .69% 7.48% 6.90% 3.24% 3 .16% 5.41% 0 .42% 3.45% 7.37% 4 .23% 8.68% 7 .32% 6.73% 7 .63% 7.58% 8 .69% 7.48% 6.90% -1.29% -3.99% 5.93% 24.53% 24.89% 28.15% 20.98% 27.70% 24.12% 1 7.12% 1 7.10% 21.03% 16.33% 1 3.35% 1 1.32% 1.26% -11.27% -6.16% 10.30% -0.22% 20.95% 8 .04% 76.55% 105.09% 48.88% 17.10% 49.21% 16.33% 1 3.35% 1 1.32% -9.59% -28.38% -17.81% 252.50% -19.23% 38.10% 22.54% 170.63% 126.58% 142.26% 1 7.10% 80.99% 16.33% 1 3.35% 1 1.32% -49.94% 0 .36% N/A -94.24% N /A N/A N /A 100.30% 2676.56% 1 31.95% 2 1.21% 100.32% 16.45% 1 5.74% 1 4.25% -53.13% -6.10% N/A -92.35% N /A N/A N /A 105.15% 2089.56% 1 28.56% 2 1.21% 116.82% 16.45% 1 5.74% 1 4.25% -52.05% -9.34% 175.07% -92.60% 6 02.85% 172.56% 54.31% 128.55% 2250.81% 1 90.75% 2 1.45% 138.25% 16.45% 1 5.72% 1 4 .31% 2004 E 2006 E 2005 E
2002 A 2 003 A 3 1-Mar-04 30-Jun-04 30-Sep-04 31-Dec-04 E F A 2004 E 31-Mar-05 E 3 0-Jun-05 E 30-Sep-05 E 3 1-Dic-05 E F A 2005 E 31-Mar-06 E 3 0-Jun-06 E 30-Sep-06 E 1 ,427,455 1,405,501 1,857,229 813,691 712,182 825,885 825,885 871,074 492,825 426,543 402,211 402,211 506,189 242,352 238,663 1 ,372,731 1,650,814 1,685,776 1,856,092 2,090,841 2,101,725 2,101,725 1,942,426 2,288,119 2,264,903 2,341,440 2,341,440 2,478,754 2,722,789 2,678,134 2 39,222 274,615 431,057 462,126 495,485 495,485 495,485 495,485 495,485 495,485 495,485 495,485 495,485 495,485 495,485 691,168 715,151 830,710 929,198 965,381 1,031,099 1,031,099 937,339 1,033,420 1,046,553 1,151,293 1,151,293 1,126,952 1,187,095 1,204,976 31,461 110,264 9,828 24,241 26,577 26,577 26,577 26,577 26,577 26,577 26,577 26,577 26,577 26,577 26,577 3,762,037 4,156,345 4,814,600 4,085,348 4,290,466 4,480,770 4,480,770 4,272,901 4,336,426 4,260,061 4,417,006 4,417,006 4,633,958 4,674,297 4,643,834 56,000 61,624 62,657 66,230 64,255 64,255 64,255 64,255 64,255 64,255 64,255 64,255 64,255 64,255 64,255 6 92 656 655 644 644 644 644 644 644 644 644 644 644 644 56,693 61,624 63,313 66,885 64,899 64,899 64,899 64,899 64,899 64,899 64,899 64,899 64,899 64,899 64,899 5,655,513 6,279,940 6,240,632 6,388,713 6,454,458 7,370,578 7,370,578 7,656,505 7,457,223 7,241,937 7,003,841 7,003,841 7,023,835 6,825,539 6,646,071 577,686 557,560 522,188 560,052 651,401 644,432 644,432 637,462 630,493 623,523 616,554 616,554 609,584 602,615 595,645 232,187 184,154 241,034 212,100 93,973 93,973 93,973 93,973 93,973 93,973 93,973 93,973 93,973 93,973 93,973 10,284,116 11,239,624 11,881,767 11,313,098 11,555,199 12,654,653 12,654,653 12,725,741 12,583,014 12,284,395 12,196,273 12,196,273 12,426,250 12,261,324 12,044,423 2,555,235 5 23,583 758,731 814,918 891,308 1,053,668 800,162 800,162 747,519 932,223 908,659 991,468 991,468 1,098,864 1,243,888 1,202,058 119,449 387,646 402,064 467,261 406,413 731,079 480,993 249,548 576,681 318,205 159,103 1 36,543 130,092 171,126 250,459 227,792 191,023 191,023 114,473 98,994 128,005 231,540 231,540 133,299 114,573 146,246 5 75,181 705,940 667,994 825,789 872,972 872,972 872,972 872,972 872,972 872,972 872,972 872,972 872,972 872,972 872,972 1,354,757 1,982,409 2,056,101 2,434,816 2,560,846 1,864,158 1,864,158 3,207,400 2,879,421 2,406,303 2,095,980 2,095,980 3,423,174 3,043,876 2,627,498 2,725,134 2,504,510 2,153,171 70,406 60,178 2,059,001 2,059,001 1,070,321 1,070,321 1,070,321 1,070,321 1,070,321 221,911 221,911 221,911 973,343 2,212,263 2,174,960 1,789,321 1,789,321 1,295,083 1,295,083 1,295,083 1,295,083 1,295,083 800,845 800,845 800,845 2 15,135 230,896 226,607 233,591 226,918 226,918 226,918 226,918 226,918 226,918 226,918 226,918 226,918 226,918 226,918 2,940,269 2,735,407 3,353,120 2,516,261 2,462,055 4,075,241 4,075,241 2,592,322 2,592,322 2,592,322 2,592,322 2,592,322 1,249,674 1,249,674 1,249,674 5 88,187 761,561 780,070 764,730 806,213 806,213 806,213 806,213 806,213 806,213 806,213 806,213 806,213 806,213 806,213 14,118 9,894 10,186 9,569 9,144 9,144 9,144 9,144 9,144 9,144 9,144 9,144 9,144 9,144 9,144 4,897,331 5,489,271 6,199,477 5,725,376 5,838,258 6,754,755 6,754,755 6,615,079 6,287,100 5,813,982 5,503,659 5,503,659 5,488,206 5,108,907 4,692,529 8,179,984 8,165,442 8,444,361 8,236,938 8,295,285 8,455,398 8,455,398 8,638,356 8,849,119 9,034,371 9,208,870 9,208,870 9,431,071 9,676,502 9,890,874 138,915 252,130 246,240 246,013 251,521 251,521 251,521 251,521 251,521 251,521 251,521 251,521 251,521 251,521 251,521 g s for monetar y p osition (5,614,895) (5,388,669) (5,598,984) (5,517,940) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,614,895) (5,388,669) (5,598,984) (5,517,940) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) (5,527,797) 237 ,836 215 ,618 92 ,216 100 ,097 160 ,113 182 ,957 182 ,957 210 ,764 185 ,252 174 ,499 222 ,201 222 ,201 245 ,430 214 ,373 199 ,476 g s 2 ,941 ,839 3 ,244 ,520 3 ,183 ,833 3 ,065 ,107 3 ,179 ,122 3 ,362 ,080 3 ,362 ,080 3 ,572 ,843 3 ,758 ,095 3 ,932 ,594 4 ,154 ,796 4 ,154 ,796 4 ,400 ,226 4 ,614 ,599 4 ,814 ,075 52,182 52,182 51,377 51,346 50,480 50,480 50,480 50,480 50,480 50,480 50,480 50,480 50,480 50,480 50,480 1,923,876 1,941,877 1,940,020 1,939,950 1,943,912 1,943,912 1,943,912 1,943,912 1,943,912 1,943,912 1,943,912 1,943,912 1,943,912 1,943,912 1,943,912 126,820 126,819 126,811 126,810 126,818 126,818 126,818 126,818 126,818 126,818 126,818 126,818 126,818 126,818 126,818 2,102,877 2,120,877 2,118,208 2,118,106 2,121,211 2,121,211 2,121,211 2,121,211 2,121,211 2,121,211 2,121,211 2,121,211 2,121,211 2,121,211 2,121,211 5 ,044,717 5,365,397 5,302,041 5,183,213 5,300,333 5,483,291 5,483,291 5,694,054 5,879,306 6,053,805 6,276,006 6,276,006 6,521,437 6,735,810 6,935,286 3 42,069 384,956 380,249 404,508 416,607 416,607 416,607 416,607 416,607 416,607 416,607 416,607 416,607 416,607 416,607 5 ,386,785 5,750,353 5,682,290 5,587,721 5,716,941 5,899,898 5,899,898 6,110,662 6,295,914 6,470,413 6,692,614 6,692,614 6,938,044 7,152,417 7,351,893 10,284,116 11,239,624 11,881,767 11,313,098 11,555,199 12,654,653 12,654,653 12,725,741 12,583,014 12,284,395 12,196,273 12,196,273 12,426,250 12,261,324 12,044,423 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 18.01% 22.56% 87.02% 91.72% 92.40% 79.99% 23.74% 78.52% 91.10% 8 5.46% 7 6.10% 21.86% 86.13% 9 5.64% 9 0.78% 9.07% 9 .77% 42.88% 45.92% 42.66% 39.24% 11.65% 37.89% 41.14% 3 9.49% 3 7.42% 10.75% 39.16% 4 1.70% 4 0.84% 74.22% 85.84% 322.13% 315.71% 285.23% 280.52% 83.27% 309.50% 296.90% 273.25% 227.64% 6 5.38% 244.06% 239.74 % 2 25.27% 6 .87% 10.37% 42.06% 44.05% 46.56% 30.45% 9 .04% 30.22% 37.11% 3 4.29% 3 2.22% 9.26% 38.18% 4 3.69% 4 0.74% 9.34% 11.43% 43.31% 53.18% 48.64% 40.50% 12.02% 39.92% 38.70% 3 7.77% 3 5.90% 10.31% 34.97% 3 4.69% 3 4.55% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 36.58% 36.98% 40.52% 36.11% 37.13% 35.41% 35.41% 33.58% 34.46% 3 4.68% 3 6.22% 36.22% 37.29% 3 8.12% 3 8.56% 54.99% 55.87% 52.52% 56.47% 55.86% 58.24% 58.24% 60.17% 59.26% 5 8.95% 5 7.43% 57.43% 56.52% 5 5.67% 5 5.18% 13.17% 17.64% 17.30% 21.52% 22.16% 14.73% 14.73% 25.20% 22.88% 1 9.59% 1 7.19% 17.19% 27.55% 2 4.83% 2 1.82% 5 .09% 6.75% 6 .86% 7.88% 9.12% 6.32% 6 .32% 5.87% 7 .41% 7.40% 8 .13% 8.13% 8 .84% 10.14% 9.98% 5.59% 13.72% 12.68% 16.81% 17.08% 15.31% 15.31% 14.62% 14.66% 1 5.25% 1 6.21% 16.21% 15.12% 1 5.17% 1 5.71% 28.59% 24.34% 28.22% 22.24% 21.31% 32.20% 32.20% 20.37% 20.60% 2 1.10% 2 1.26% 21.26% 10.06% 1 0.19% 1 0.38% 5 .72% 6.78% 6 .57% 6.76% 6.98% 6.37% 6 .37% 6.34% 6 .41% 6.56% 6 .61% 6.61% 6 .49% 6.58% 6.69% 5 2.38% 51.16% 47.82% 49.39% 49.48% 46.62% 46.62% 48.02% 50.04% 5 2.67% 5 4.87% 54.87% 55.83% 5 8.33% 6 1.04% 2004 E 2006 E 2005 E g s e x c lu d in g c u rr e n t n e t in c o m e , a n d c a p it a l
2002 A 2 003 A 3 1-Mar-04 30-Jun-04 30-Sep-04 31-Dec-04 E F A 2004 E 31-Mar-05 E 3 0-Jun-05 E 30-Sep-05 E 3 1-Dic-05 E F A 2005 E 31-Mar-06 E 3 0-Jun-06 E 30-Sep-06 E 246,531 231,485 104,722 113,122 191,130 182,957 591,932 210,764 185,252 174,499 222,201 792,716 245,430 214,373 199,476 6 82,896 737,346 122,178 306,980 450,016 243,390 1,122,564 266,718 280,352 284,479 288,366 1,119,914 291,871 300,651 305,206 929,427 968,832 226,900 420,103 641,146 426,347 1,714,496 477,481 465,604 458,977 510,567 1,912,630 537,301 515,024 504,683 947,884 919,603 50,414 147,311 311,258 59,471 568,454 601,347 193,056 474,506 515,634 1,784,544 433,483 337,144 521,301 476,716 (41,346) 613,363 (307,080) (428,173) 1,206,772 1,084,883 (10,483) (497,205) (478,564) (496,667) (1,482,919) (24,609) (505,595) (406,222) (1,006,582) (900,211) (211,962) (431,944) (576,402) (1,152,540) (2,372,849) (545,675) (74,100) (62,224) (43,300) (725,299) (304,895) (95,386) (118,768) 418,018 (21,954) 451,816 (591,713) (693,317) 113,702 (719,512) 45,189 (378,249) (66,282) (24,332) (423,674) 103,978 (263,838) (3,689) 1,009,437 1,427,455 1,405,413 1,405,404 1,405,499 712,182 1,405,501 825,885 871,074 492,825 426,543 685,989 402,211 506,189 242,352 1,427,455 1,405,501 1,857,229 813,691 712,182 825,885 685,989 871,074 492,825 426,543 402,211 262,316 506,189 242,352 238,663 2004 E 2006 E 2005 E
Financial Reports
Tecnologico de Monterrey
Burkenroad Latin
America (Mexico)
The Latin America Burkenroad Reports are financial analysis of companies
listed in the Mexican Stock Exchange, and capital budgeting of medium
and small companies. They are elaborated by students of the Bachelor of
Financial Management and Accounting & Finance, under the supervision
of professors from the Accounting and Finance Department of ITESM,
Monterrey Campus.
The ITESM, Instituto de Estudios Superiores de Administración de Venezuela
(IESA), and Universidad de los Andes de Colombia, along with Tulane
University, carry out the Latin America Burkenroad Program. This project
is granted by the Multilateral Investment Fund of the Interamerican
Development Bank. This program enriches human capital by providing
training in financial analysis techniques, and also intends to facilitate access
of companies to financing sources by providing financial information to
investors and financial institutions.
The reports prepared by this program, evaluate financial conditions and
investment opportunities in Latin American companies. Financial reports
of listed companies are distributed to national and foreign investors through
publications and financial information systems such as Infosel Financiero
and Finsat, among others. Investment capital budgeting reports, are
distributed only to beneficiary companies for future private presentations
to financial institutions or potential investors. Investment plans and financial
situation, of the analyzed companies are presented to the financial community
in an Annual Meeting.
For more information about the Burkenroad Latin America Program please
visit the following websites:
http://burkenroad.mty.itesm.mx
http://mx.invertia.com/canales/canal.asp?idcanal=505
http://www.finsat.com.mx/Finsat/pages/Static.asp?Show=CRBR
María Concepción del Alto
mdelalto@itesm.mx
Research Director
Burkenroad Reports - México
School of Business
ITESM,Campus Monterrey
Tel and Fax: +52 (81) 83-28-41-96
Moisés Benavides Elizondo
moises.benavides@itesm.mx
Technical Coordinator
Burkenroad Latin America Program
School of Business
ITESM,Campus Monterrey
Tel and Fax: +52 (81) 83-28-41-96
Burkenroad Reports is produced by a select group of students at ITESM. This report is based on
information available to the public and does not purport to be a complete statement of all data
relevant to the securities mentioned and its accuracy cannot be guaranteed. Furthermore, this
report is not an offer to buy or sell a solicitation of an offer to buy or sell the securities mentioned.
Analysts:
Advisors:
Eny García
Aurelio Aguilar
Ma. Concepción del Alto
Bárbara de la Garza
Jordán Rodríguez
Miguel Moreno Tripp
Oliver Fernández
Carlos Morán
Roberto Martínez
All amounts are as of the date of the report as reported by BMV, and Infosel Inversionista. *EBITDA is based on operating income plus depreciation and amortization, divided by the number of shares outstanding.
** Equity Market Capitalization is based on market price for the number of shares outstanding.
All amounts in Mexican pesos .
*** Enterprise value is based on market capitalization adjusted for long-term debt, minority interest, cash, and short-term investments.
^Performance is based on ending prices and dividends for the November 2003 to November 2004 period.
