Annual Press 2013

Company Profile
Sales by region
50%
21%
Brakes
Suspensions
Division
North America
Division
North America
29%
Suspensions
Division
Brazil
Sales by customer
3%
Toyota
4%
7%
3%
Mercedes-Benz
Nissan
16%
Others
Fiat - Chrysler
9%
VW
Net sales / Ventas netas
EBITDA / UAFIRDA
Millons of Pesos / Millones de pesos
EBITDA / Margen UAFIRDA
Millions of Pesos / Millones de pesos
Sales margin / Ventas
29%
Ford
29%
GM
12
13
9%
6%
07
08
503
06
13%
04
11
11%
10%
11%
14%
1,343
12
10%
1,058
13
13%
10
13%
09
11
852
05
434
719
698
08
1,203
12
666
07
1,178
9,392
11
7,621
9,353
06
6,958
05
%
Millions of Pesos
5,459
6,707
7,846
6,723
6,547
04
EBITDA / Sales margin
EBITDA (1)
10,362
Net sales
Millions of Pesos
09
10
13
04
05
06
07
08
09
10
Financial Profile
Financial highlights
Sales
EBITDA (1)
EBITDA to Sales
Net Operating Cash Flow (2)
Average Used Capital
Operating Profitability
Operating Turnover
Net Debt
Gross Debt
Cash
Gross Debt / EBITDA
Net Debt / EBITDA
EBITDA / Net Interests
Net Income (3)
Net Worth SANLUIS (4)
Mill. Pesos
Mill. Pesos
%
Mill. Pesos
Mill. Pesos
%
Times
Mill. Pesos
Mill. Pesos
Mill. Pesos
Times
Times
Times
Mill. Pesos
Mill. Pesos
NET DEBT / DEUDA NETA
2012
2013
% change
12/13
9,392
1,203
13
1,213
5,388
22.3
1.7
2,627
3,126
499
2.6
2.2
3.5
444
7,660
10,362
1,343
13
1,512
4,821
27.9
2.1
2,241
2,866
625
2.1
1.7
4.4
601
9,166
10%
12%
EBITDA (times) / UAFIRDA (veces)
*
Debt profile
37%
05
08
09
10
11
12
07
08
09
10
11
14
15
8%
4%
0%
13
4%
12
3%
2.7
1.7
06
2.2
05
4.0
4.9
04
3.9
6.2
13
5.0
2,241
07
44%
8.8
9.8
%
3,201
3,307
06
2,627
3,449
3,599
4,414
Times
4,238
Net debt / EBITDA
4,237
Net debt
Millions of Pesos
4,128
04
24%
15%
8%
25%
19%
23%
26%
35%
20%
DEBT PROFILE* (%)
PERFIL DE DEUDA* (%)
NET DEBT / DEUDA NETA
Millons of Pesos / Millones de pesos
25%
11%
16
17
18
19
20
Globally
Recognized Company
North America
Ohio, U.S.A.
Coil springs
Michigan, U.S.A.
Sales, engineering,
research and development
Flint, Michigan, U.S.A.
Brakes
North America
Coahuila, Mexico
Leaf springs, coil
springs and
torsion bars
Puebla, Mexico
Rotors, drums
and assemblies
Mexico City, Mexico
Corporate
Headquarters
Xalostoc, Mexico
Leaf springs
Queretaro, Mexico
Elastomers and
stampings
South America
São Paulo, Brazil
Leaf springs and
coil springs
Rio de Janeiro, Brazil
Leaf springs
Resende, Brazil
Distribution center
RASSINI is a world class
essential supplier to the
automotive industry
Asia
Tokyo, Japan
Liaison office
19
COMPOUNDED
annual growth rate
in sales during
25 years
Consolidated sales in 2013
increased 10%, EBITDA improved
12% and net operating cash flow
grew 25%, all compared to 2012
A growing company
SANLUIS Corporación, S.A.B. de C.V., through the SANLUIS Rassini® brand, is a
leading designer and producer of suspension and brake components used in light
and heavy vehicles in the automotive industry, supplying leaf and coil springs, as well
as brake discs and drums mainly for the Original Equipment Manufacturers (OEMs).
SANLUIS Rassini is the world’s largest producer of suspension components for light
vehicles and the leader in leaf spring design and manufacturing in the North and
South American markets. Its products are used in 8 of the 10 top-selling light trucks
in North America.
The Brakes Division, a technology leader in North America, is recognized for designing
and manufacturing discs and drums for braking systems used in light vehicles, from
high-performance sports cars to light duty trucks, CUVs and SUVs. It is the only
fully integrated brake rotor producer in the Americas, featuring foundry, machining,
coating, stress relief and corrosion resistant (FNC, or Ferritic Nitro-Carburizing)
processes in the same facility.
5-6
SANLUIS Rassini holds strong client relationships based in top quality, tailored
technology and integrated services that include design, engineering, technical
support, and close collaboration to meet evolving customer’s needs. As a solution
provider for its customers, has been continuously recognized by them with several
awards for top quality and sustained performance.
SANLUIS Rassini supplies General Motors, Ford, Fiat-Chrysler, Volkswagen, MAN,
Mercedes-Benz, Nissan, Toyota, Maserati, Scania and Mitsubishi, among others.
SANLUIS Rassini employs more than 4,600 people in Mexico, the U.S. and Brazil
and has eight manufacturing facilities as well as four technical centers strategically
located in those countries.
Report of the
Board of Directors
Dear Shareholders:
I am pleased to inform you the results of SANLUIS Corporación S.A.B. DE C.V. and
its subsidiary companies (SANLUIS Rassini) for the year 2013, a significant year
because, as we celebrated the 25th anniversary of the acquisition of Rassini®, it was
a record year for our company in terms of sales, EBITDA and net operating cash flow
generation:
• The year 2013 has been SANLUIS Rassini’s strongest as the company achieved
record levels of sales, EBITDA and cash flow generation, amounting to $10,362
million Pesos, $1,343 million Pesos and $1,512 million Pesos, respectively.
• Consolidated sales in 2013 increased 10% compared to 2012 and EBITDA grew
12% during the year.
• Both, sales and EBITDA outpaced the growth of light vehicle production as we
increased our market penetration in both markets where we operate (North
America and Brazil).
• Improvements in working capital contributed to a total net operating cash flow
of $1,512 million Pesos, 25% higher than 2012.
7-8
• Consolidated income before taxes for the year reached $601 million Pesos, 35%
higher than the previous year.
• Consolidated Net Debt / EBITDA ratio was 1.7 times and EBITDA/Net Interest
Expense was 4.4 times as of December 31, 2013.
Consolidated sales in 2013 rose to the highest level in the history of the company
for a total of $10,362 million Pesos, 10% higher than 2012 and 63 times the sales
of Rassini in 1988, the acquisition year, a compounded annual growth rate of 19%
during 25 years, well above the growth of the industry due to the major market
penetration in all the regions where we operate.
Sales in North America reached a total of $7,344 million Pesos an increase of 8%
compared to the previous year. The sales of the Brakes Division increased 34% from
2012 to 2013, above the ongoing recovery of the automobile industry in North
America based on new contracts that we started to supply during the year and the
production ramp-up of ten new platforms launched at the end of 2012 and in the
first half of 2013.
Sales for the Suspensions Division Brazil increased 18% compared to 2012 in terms
of Mexican Pesos (a 33% increase in local currency) as sales volume of commercial
trucks in Brazil returned to normalized levels following the run-off sales of excess
inventories of trucks based on old emission control technology in 2012.
During 2013, SANLUIS Rassini was awarded new contracts that will secure additional
sales for more than $6,600 million of Mexican Pesos during the next five years,
maintaining growth rates well above the industry’s evolution.
SANLUIS Rassini reached the highest level of consolidated earnings before interest,
taxes, depreciation and amortization (EBITDA) which totaled $1,343 million Pesos in
2013, an increase of 12% from 2012. The increase in North America was 8% while
in Brazil it was 27% or 44% in local currency compared to the previous year.
Consolidated net income before taxes and minority interest, rose to $601 million
Pesos or $1.88 Pesos per share, which represents an increase of 35% in a year-overyear comparison.
9 - 10
The year 2013 was also a record regarding the consolidated net operating cash
flow, which reached $1,512 million Pesos, an increase of 25% from 2012.
The increase in the net operating cash flow was mainly used to reduce the debt
in our Suspensions Division North America. In total, during the last four years, it
decreased approximately 60% or $1,156 million Pesos, of which $374 million Pesos
correspond to scheduled amortizations and $782 million Pesos (68% of the total
reduction), to advanced payments.
Our cash position at the end of 2013 reached $625 million Pesos while the consolidated
net debt continued to shrink, closing the year at $2,241 million Pesos or 1.7 times
consolidated EBITDA, decreasing 15% throughout 2013. The interest coverage ratio
at the end of 2013 was 4.4 times consolidated EBITDA to interest expense.
During 2014 we will continue to pay down our debt through cash flow generated
from our ongoing operations thus, we will improve even more our overall financial
position.
These excellent financial improvements are a direct result of the reputation
that SANLUIS Rassini has built with our customers by positioning ourselves as a
solution provider, leader in technology and innovation.
The integration of our technical centers in Plymouth, Michigan (U.S.A.), Piedras
Negras, Coahuila (Mexico), San Martín Texmelucan, Puebla (Mexico), and Sao Paulo,
Brazil has enabled us to develop a highly trained and first-class team of outstanding
and talented individuals who work closely with our clients to develop new and
improved products. Our mission is “Customer Satisfaction”, and we achieve this
objective through technical advances optimizing products and production, top
notch quality, service and competitiveness.
Our banner customer service, high performance products, strategic locations,
speed of response, continuous improvements at our manufacturing centers and
our position as the world’s largest producer of suspension components as well as
being the only fully-integrated supplier of brakes in North America, from foundry to
finished product, have enabled us to become the leaders in the light duty and the
commercial vehicle suspension markets in the Americas while increasing our share
of the North American brakes market, reinforcing SANLUIS Rassini as a first-class
11 - 12
supplier to the automobile industry well positioned to supply the growing demand
for vehicles in North America, Brazil and the rest of South America.
All of this is reflected in the close working relationship that SANLUIS Rassini has
developed with its customers, based on mutual trust and cooperation and which has
led to new and important business opportunities and world class recognitions such
as the GM’s “Supplier of the Year Award” which was recently granted to our Brakes
Division for the second year in a row; the “100 Best Managed Companies for Zero
Defects” from Ford for our Brakes Division as well; the “Certificate of Achievement”
from Fiat-Chrysler to the Suspensions Division North America and Toyota’s Mercosur
“Best Performance Supplier Award” for our Suspensions Division Brazil.
SANLUIS Rassini is well positioned to take advantage of the market growth
forecasts in the North American automotive industry, where Mexico has become
a more important player as the 8th producer of light vehicles, the 5th producer
of automotive components and the 4th exporter of vehicles in the world. Mexico
is also the 3rd source of imports for the US automotive industry and will surpass
Japan and Canada in the coming years.
Consistent with this growth, during 2013 we installed a new facility in Flint, Michigan
to machine brake rotors, a distribution center and sequencing line in Resende, Brazil,
we started an expansion of our foundry plant for brakes products in Puebla, Mexico
and the expansion of our leaf spring plant located in Rio de Janeiro, Brazil. All of
these projects were initiated based on contracts on hand from our customers that
support our growth plans and position us to better serve our current and future
clients in the different markets that we serve.
At SANLUIS Rassini, we have a strong conviction that keeping aligned our goals of
creating value for customers, shareholders, employees and the communities where
we operate, we will continue to succeed in all the aspects of our business in every
market where we have a presence.
Sincerely,
Antonio Madero
Chairman of the Board & CEO
M e x i co C i t y, M a c h 1 3 , 2 0 14
13 - 14
During 2013, vehicle
production increased in
all the markets we serve
Our Industry
Production in all the markets we serve increased during 2013. Light vehicles production in North America reached its highest level in more than 10 years, totaling 16.2
million vehicles, an 89% improvement compared to the lowest level of 8.6 million
vehicles produced in 2009 and an increase of 5% from 2012. In Brazil, the total vehicle production reached a record level of 3.7 million units, representing a recovery of
10% over a very difficult 2012 when the market was adversely affected due to new
emissions regulations.
Sales of light vehicles in the U.S., our core business segment, increased to 15.5
million vehicles during 2013, an increase of 8% compared to 2012 and 49% when
compared to the 2009 level, the year with the lowest sales volume. Sales of trucks
and buses, our core market in Brazil, increased 12% and 15% respectively compared
to 2012, while production was 43% and 10% higher than the year before.
17 - 18
Recovery in housing construction in North and South America, the historical car scrappage rate and the need to replace aging vehicles which are still at the high level of 11
years old, better credit conditions and customers’ demand for higher quality products
in North America, where automakers are devoting significant resources to research and
new product development, result in healthy growth prospects for vehicles sales and
production in 2014.
Light vehicles
produced in North America
reached its highest level
in 10 years
Commercial Review
Record year in revenues,
reaching $10,312 mp
In the 25 years following the integration of Rassini to the SANLUIS family, revenues
within our automotive business have increased 63 times and had a record year in
2013 reaching a total of $10,362 million Pesos, this is a compounded annual growth
rate of 19% during 25 years, well above the growth of the industry due to the major
market penetration in all the regions where we operate.
In the Suspensions Division North America we are the absolute leaders for light vehicles utilizing leaf springs.
In the Brakes Division we have 15% of the accessible market and have secured contracts that will convert us in the main supplier of brakes components in North America.
Our market participation in the Suspensions Division Brazil reached 63% of the leaf
springs market.
19 - 20
The year 2013 brought exciting
With outstanding performance as a
challenges to SANLUIS Rassini. In
solution provider, top quality, deli-
North America we developed leaf
very, commercial relations and advanced
springs, coil springs and brake rotors
engineering support, most of SANLUIS
for Fiat-Chrysler’s all new product
Rassini’s current portfolio is secured
“Pro-Master” Van and the major
through the following years. Busi-
redesign on GM’s flagship pick-up
ness awarded during 2013 alone
truck K2XX (“Sierra”, “Silverado”,
represents additional sales in excess
“Suburban”, “Tahoe”, “Yukon”
of $6,600 million Pesos for the next
and Cadillac’s “Escalade”). We also
five years in addition to the on-going
developed brake rotors for the Dodge’s
sales backlog.
“Viper”, the Maserati’s “Quattroporte”
and “Ghibli” as well as the Chevrolet’s
“Corvette Stingray”, nominated Car of
the Year in the Detroit Auto Show in
2013 and 2014.
The Suspensions Division Brazil
started supply to VW’s MAN heavy
truck plant in Resende, the largest
truck manufacturer in Latin America
through a sequencing line located at
MAN’s facility and launched the coil
spring platforms of the “Etios” car for
Toyota, the GM’s “Onix” and the redesigned Ford’s “EcoSport”.
6,600
MILLION
PESOS
in additional sales
for the next
5 years
Operations Summary
Rassini achieved an
EBITDA of $ 1,343 mp,
the highest in its history
The year 2013 was record in terms of
facturing. During 2013 we merged
EBITDA as SANLUIS Rassini reached
our product and process engineering
consolidated EBITDA of $1,343 million
groups to strengthen the launching of
Pesos, the highest in its history, an in-
new programs and technologies. This
crease of 12% from 2012 which out-
added efficiency has allowed us to de-
paced the growth of sales in the same
velop more programs, faster and with
period. The increase in North America
less people than ever before.
was 8% while in Brazil it was 27% or
44% in local currency compared to the
previous year.
The Suspensions Division North America executed more than 40 projects focused on productivity, high efficiency
and new market requirements along
with 22 Six Sigma projects across the
areas of process, design and manu-
21 - 22
For the Brakes Division, 2013 was a challenging year as foundry and machining operations were running at full capacity, maintaining operating indicators
as world class benchmarks at the same time that executed different expansion
projects: we started in record time a machining facility in Flint, Michigan, with
capacity to produce 2.5 million rotors per year, it will help us to better serve our
customers in the Detroit area. Initiated the expansion of our foundry capacity by
40% in San Martin Texmelucan, Puebla (Mexico) which will be ready by the end
of 2014 and we also increased the machining capacity at the same site by adding
equipment and optimizing layouts.
Our Suspensions Division Brazil reinforced
the productivity project initiated in 2012
through the implementation of key initiatives in order to reduce energy consumption and labor. The return to normalized
In summary, our operations continued
production levels during the year improved
with excellent performance while keep-
the operating performance at the time that
ing strict control over the cost structure
the Brazilian team concluded the first part
and the investment projects. Initiatives to
of an expansion at its Rio de Janeiro plant
improve productivity continue providing
which further enhances our ability to supply
good results as we maintain our low EBITDA
suspension components for heavy trucks.
breakeven point by thoroughly controlling
The final leg of such expansion will be ready
our costs.
by the end of the first quarter of 2014.
It was also completed the construction of
the new logistics and sequencing center
in Resende, in the state of Rio de Janeiro,
which optimizes the delivery of suspension
components to MAN Latin America’s assembly line.
23 - 24
ADDITIONAL
CAPACITY OF
2.5
MILLION
brake rotors in the
Detroit area
Our operations
continue with excellent
performance maintaining a
strict control over
costs and CapEx
Financial Performance
Best ever Net
Operating Cash Flow,
$1,512 mp
The highest level of EBITDA in the history of SANLUIS Rassini was enhanced during
2013 by the significant improvement of working capital across all Divisions, resulting
in a record level of consolidated net operating cash flow of $1,512 million Pesos, up
25% compared to 2012.
Consolidated cash balance at the end of 2013 increased to $625 million Pesos. Net
debt continued to decrease closing the year at $2,241 million Pesos or 1.7 times
consolidated EBITDA. The interest coverage ratio at the end of 2013 was 4.4 times
consolidated EBITDA to interest expense.
The net operating cash flow was mainly used to reduce debt in our Suspensions Division North America as we paid off $687 million Pesos of which 26% were scheduled
amortizations and 74% correspond to advanced payments.
25 - 26
625
MILLION
PESOS
cash balance
at the end of 2013
The Brakes Division financed the
expansion of the foundry capacity
through a bank loan of $301 million
Pesos which will be paid over 5 years
with increasing amortizations. The
leverage ratio of the Division ended
2013 at 1.0 times net debt to EBITDA.
The cost controls, better management
in working capital and improved sales
During 2014, we will continue to pay
volume in the Suspensions Division
down our debt through cash flow
Brazil, led also to a record year in cash
generated from our ongoing opera-
flow generation reaching BRL$86
tions, strengthening even more our
million, the highest level in local cur-
overall financial position.
rency for this Division.
Advances in product and
process technology,
as well as our commitment
to improve our equipment
have been recognized by
our customers
Technology Leadership
and Customers’ Recognition
We have invested
in equipment with
cutting edge
technology
SANLUIS Rassini has four technical centers
is being developed in order to increase
located in the U.S.A., Mexico and Brazil,
material strength that will result in even
equipped with state of the art testing equip-
lighter products. Our proprietary RDDP
ment, advanced analytical software, mate-
(Rassini Digital Design Process) has been
rials development labs and a highly trained
implemented in our Suspension Business,
team of talented engineers focused on the
a seamless integration of several digital
constant development of novel products
analytical tools that reduce product de-
that exceed customers’ needs.
velopment cycle by 60%.
In our Suspensions Division North America,
our Advanced Product & Process Engineering groups successfully developed lighter
suspension components using strengthened
materials, already approved by our main customers. Alternative heat treatment process
29 - 30
Our group of Advanced
Product & Process Engineering,
has successfully
developed new technologies
In the manufacturing areas, we invested in new cutting edge technology equipment which
will support production of the developed technologies at a competitive cost. During 2013,
high tech equipment was installed to produce lighter coil springs with strengths of 1,350
megapascals and lighted leaf springs above 1,400 megapascals. We also tighted dimensional tolerances which improved significantly the product performance.
In the Brakes Division, we continued to capitalize on the recently started anticorrosive process capabilities (FNC, Ferritic Nitro-Carburizing). As this process helps to avoid corrosion
extending the life of the brake rotors, it is increasingly generating interest with our customers. We are now considering adding FNC capacity to support new contracts.
We continue to increase our collaboration with several universities in order to develop
intellectual property focused in technology advancements, setting new standards in the
industry while developing the next generation of engineers and laying the foundations of
the next growth stages of SANLUIS Rassini.
31 - 32
All the advances in product technology
and commitment to improve our
equipment to better serve our customers
2
nd
CONSECUTIVE YEAR
in which the Brakes
Division received the
“Supplier of the Year
Award” from GM
has been recognized by our customers
which have granted SANLUIS Rassini
world class accolades, including the
GM’s “Supplier of the Year Award”
which was recently given to our Brakes
Division for the second year in a row;
the “100 Best Managed Companies for
Zero Defects” from Ford for our Brakes
Division as well; the “Certificate of
Achievement” from Fiat-Chrysler to the
Suspensions Division North America and
Toyota’s Mercosur “Best Performance
Supplier Award” for our Suspensions
Division Brazil.
Human talent and corporate
social responsibility
SANLUIS Rassini employs more than 4,600 people in Mexico, U.S.A. and Brazil.
We have an extraordinary team made up of competitive individuals with high
values who are committed to the company and to the exceptional performance
that translates into our RASSINI CULTURE OF EXCELLENCE (RCE).
Corporate social responsibility
The social purpose of SANLUIS Rassini is to promote joint collaboration with
our customers, employees, suppliers and the community, in order to generate
value for shareholders, sustainable development and higher quality of life.
We are committed to our corporate culture, protecting the environment, community development, communication and transparency in everything we do.
33 - 34
Rassini has a labor force of
over 4,600 employees
Engaging the
Global Compact
Rassini has adopted
international models
of corporate social
responsibility
As a global company, SANLUIS Rassini
Thus, SANLUIS Rassini has engaged the
has adopted international models of
Ten Principles of the Global Compact
corporate social responsibility to ensure
promoted by United Nations (UN) to
that its positive impact on society, the
align our strategies and operations with
environment and the economy meets
universally accepted principles in four
the best practices worldwide.
areas: human rights, labor principles,
environment and anti-corruption.
34 - 36
Training and staff development
We continue to strengthen our e-learning system, “My Training at Rassini”, which
optimizes the training and development process of our employees, offering various training mechanisms aligned to personalized development plans for integral
growth at SANLUIS Rassini.
By focusing on the development of our employees and staff we will continue
to have steady growth, transform our company, retain and improve our technological leadership for the benefit of our shareholders, customers, employees
and communities.
Training
During the year, average training hours were above 2% of available working hours.
Personnel employed at SANLUIS Rassini reached an average of 17 years of
education, while unionized employees reached an average level of 12 years of
education. These indicators position us within the standards set by the Mexican
Government as the education rate target.
Rassini’s staff has
reached an average
of 17 years of education
44 - 38
37
45
Domestic suppliers development
SANLUIS Rassini has always pursued the development of more domestic companies
in order to contribute to our country’s economic growth. As an example of this we
have two domestic suppliers of special steel located in the central area of Mexico.
In both cases we placed a resident metallurgical engineer at their facilities that on a
collaborative manner developed materials that before would only be found overseas
and today represent jobs for Mexican families.
Committed to the community
As part of the interaction between the company and its stakeholders, throughout
the year we promote activities for SANLUIS Rassini’s personnel, their families and the
community in the areas of culture, sports, health and safety.
Computer donations
SANLUIS Rassini continues to demonstrate its social commitment to promote
and improve the education in our country. In the last years we have donated 782
computers and will continue doing so in order to help strengthen the foundation of
our society’s education.
Environment
20
REDUCTION IN CO2
emissions during
the last years and
Rassini will continue
to invest in this matter
Corporate Social
Responsibility Distinction
The execution of the Rassini System for Corporate Social Responsibility, where the
close relationship with all stakeholders generates actions for the environment and
society, led us to be certified by the Alliance for Corporate Social Responsibility
(AliaRSE by its initials in Spanish), through the Mexican Center for Philanthropy
(CEMEFI by its initials in Spanish), as a Socially Responsible Company (ESR by its
initials in Spanish).
Rassini aspires to become an
example of Corporate Social
Responsibility
Board of
Directors 2013
DIRECTORS
Antonio Madero Bracho (Chairman and CEO)
Carlos Autrey Maza (Independent)
Javier Bours Castelo
Enrique Bours Muñoz
Everardo Elizondo Almaguer (Independent)
James Robert Jones (Independent)
Ernesto López de Nigris
Antonio Madero Pinson
Eugenio Madero Pinson
Arturo Pérez Arredondo (Independent)
Javier Pérez Rocha (Independent)
Luis Rebollar Corona (Independent)
Fernando Ruiz Sahagún (Independiente)
Alberto Saavedra Olavarrieta (Independent)
Guillermo Francisco Vogel Hinojosa (Independent)
ALTERNATE DIRECTORS
Fernando Del Castillo Elorza (Independent)
Vicente Grau Alonso (Independent)
Juan Pablo Sánchez Kanter
Enrique Villaseñor Ezcurdia
Sergio Visintini Freschi
SECRETARY OF THE BOARD: Juan Pablo Rosas Pérez
E X E C U T I V E
C O M M I T T E E
2 0 1 3
PROPIETARIES
Antonio Madero Bracho - President
Javier Bours Castelo
Eugenio Madero Pinson
Fernando Ruiz Sahagún Javier Pérez Rocha ALTERNATES
Antonio Madero Pinson
Enrique Bours Muñoz
Carlos Autrey Maza
Alberto Saavedra Olavarrieta
AUDIT COMMITTEE
Fernando Ruiz Sahagún - President
Alberto Saavedra Olavarrieta Enrique Bours Muñoz CORPORATE PRACTICES COMMITTEE
Javier Pérez Rocha - President
Javier Bours Castelo
Everardo Elizondo Almaguer
Antonio Madero Bracho
Alberto Saavedra Olavarrieta
SHARE REPURCHASE SUBCOMMITTEE
Antonio Madero Bracho - President
Javier Bours Castelo Javier Pérez Rocha
COMPENSATION SUBCOMMITTEE
Javier Pérez Rocha - President
Javier Bours Castelo
Everardo Elizondo Almaguer
Antonio Madero Bracho
INDEPENDENT AUDITORS: PricewaterhouseCoopers, S.C.
Consolidated
FINANCIAL
STATEMENTS
2013
Independent
Auditors’ Report
Mexico, D.F. March 11, 2014
To the Stockholders of
SANLUIS Corporación, S. A. B. de C. V.
We have audited the accompanying consolidated financial statements of SANLUIS
Corporación, S. A. B. de C. V., and subsidiaries, which comprise the consolidated
balance sheets as at December 31, 2013 and 2012, and the consolidated comprehensive
statements of income, of changes in stockholders’ equity and of cash flows for
the years then ended, and a summary of significant accounting policies and other
explanatory information.
Management’s responsibility for the consolidated financial statements
The Company’s management and subsidiaries is responsible for the preparation and fair
presentation of these consolidated financial statements in accordance with International
Financial Reporting Standards, and for such internal control as management determines
is necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements
based on our audits. We conducted our audits in accordance with International
Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the consolidated financial statements. The procedures selected
depend on the auditor’s judgment, including the assessment of the risks of material
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misstatement of the consolidated financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to
the entity’s preparation and fair presentation of the consolidated financial statements
in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
In our opinion, the accompanying consolidated financial statements present’ fairly,
in all material respects, the consolidated financial position of SANLUIS Corporación,
S. A. B. de C. V. and subsidiaries at December 31, 2013 and 2012, and their financial
performance and their cash flows for the years then ended, in accordance with
International Financial Reporting Standards.
PricewaterhouseCoopers, S. C.
C. P. C. Raúl Téllez
Audit Par t n er
SANLUIS CORPORACION, S.A.B. DE C.V. and Subsidiaries
Audit
Committee Report
Mexico City, March 11, 2014
To the Board of Directors of
SANLUIS CORPORACION, S.A.B. de C.V. and Subsidiaries:
In compliance with the provisions of the New Mexican Securities and Exchange Law
(Nueva Ley del Mercado de Valores) and in my capability as President of the Audit
Committee at SANLUIS Corporación, S.A.B. de C.V., (SANLUIS), we hereby present
this report in order that, in due course, it may be submitted to the General Ordinary
Shareholders´ Meeting for consideration.
In order to analyze the operations of the 2013 fiscal period, the Audit Committee held
five meetings on the following dates: April 17th, July 17th and October 16th, 2013
and February 20th and March 11th, 2014. In addition to the committee members,
these sessions were attended by the Chairman of the Board and CEO, the external
auditors, the Chief Financial Officer and the Internal Audit Director, as well as the
SANLUIS officers whose presence was required by the Committee. The activities and
adopted resolutions were approved in the corresponding minutes.
The main issues raised in these meetings are as follows:
I.
Internal Control System Assessment:
This Committee, taking into consideration the results of the Internal
Control System operational assessments issued by the Internal Auditor,
the External Auditor and the Company’s CEO, in compliance with the
applicable legal provisions, considers that SANLUIS’ internal accounting
control system satisfies the Management’s control objectives and offers
reasonable security in all significant aspects to prevent or detect errors
or irregularities in the normal course of operations.
44 - 45
II.
Internal Audit Function Assessment:
The Audit Committee has been aware of the Internal Audit area’s needs
in order for this area to have the human and material resources required
to correctly perform its function. In this regard, work programs and
activities during the 2013 fiscal period were satisfactorily carried out and
the Work Plan for the 2014 fiscal year was also approved. Furthermore,
the committee members have met with the Internal Audit staff, in the
absence of other corporate officers, to receive the information deemed
necessary.
III.
External Audit’s Performance Assessment:
The hiring terms for the external auditing services to review the financial
statements for the fiscal year ended on December 31, 2013, were
discussed and the fees were approved.
The Audited Financial Statements as of December 31, 2013, were received
from the External Auditor with a clean opinion and no observations.
Additionally, the work of the External Auditors, PricewaterhouseCoopers,
S.C. and Mr. Raúl Téllez González, C.P.A. in charge of such audit, were
evaluated and deemed satisfactory. Moreover, the External Auditors
confirmed their independence.
The Committee members have met with the external auditor in the
absence of corporate officers having received full collaboration to
receive additional information regarding pertinent issues when such
was requested.
IV.
Financial Information:
The company’s financial statements were discussed with the executives
in charge of their preparation and review; additionally, we were informed
by the Internal Audit that there were no observations or differences
with respect to the financial information corresponding to the quarters
ended in March, June, September and December 2013; which were
approved by the Committee and later delivered to the Mexican Stock
Exchange.
In order to prepare this report, we have heard the relevant corporate
directors, without the existence of difference of opinion among them.
V.
CEO’s Report:
The Report prepared by the Chairman and CEO of the Company on the
activities for the 2013 fiscal year was received and approved.
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VI.
Legal Report:
The legal reports prepared by SANLUIS’ Legal Department regarding
the status of current matters and litigation were received.
VII.PROPOSAL
Based on the work performed, we hereby recommend that the Board
of Directors submits the Financial Statements of SANLUIS for the fiscal
year ended on December 31, 2013 to the Shareholders’ Meeting for
approval.
Finally, I hereby certify that during the abovementioned period none of
the operations mentioned in article 28, section III, subsections (a), (b)
and (c) of the New Mexican Securities and Exchange Law took place.
Sincerely,
FERNANDO RUIZ SAHAGÚN
P r e sid ent , Audit Commit t e e
Glossary of terms
1. Aftermarket: Service part components for the
resale market.
2. Asian and European: Common auto industry
nomenclature regarding the combined brands of Toyota,
Nissan, Honda, BMW, Renault, Mercedes-Benz, and
Volkswagen, mainly.
3. Coil springs: A steel rod wound in a spiral pattern or
shape. It cushions and absorbs the shocks and bumps and
provides easier control as the vehicle is driven.
4. CUVs (Crossover Utility Vehicle): Compact and
mid-sized vehicles built on a “unibody” platform with
a passenger car’s drive train and suspension but higher
ground clearance.
5. Detroit Three: Common auto industry nomenclature
for Chrysler, Ford and General Motors.
6. Drums: Cast iron housing bolted to the wheel that
rotates around the brake shoes. When the shoes are
expanded, they rub against the machined inner surface of
the brake drum and exert a braking effect upon the wheel
to slow or stop the vehicle.
7. Ductile Iron: This iron is obtained by adding magnesium
to melted iron, carbon deposits as spheroids graphite and is
more ductile, resistant and elastic than gray iron.
8. Elastomers: Rubber components or subcomponents
used to reduce noise and vibration.
9. Foundry: Chemical process through which scrap steel
and ferroalloys are casted to obtain a piece of iron cast.
10. Gray Iron: Ferrous material with carbon in flake
graphite which foster hardness properties to resist high wear
and vibration damping. Ideal for the friction area of a rotor.
11.Leaf spring: A suspension system component
designed to cushion and absorb shocks and bumps and to
keep a vehicle level on turns. There are two main types of
leaf springs:
a.Multi-leaf spring: Two or more flat spring steel
plates bent in an arch, usually with curled ends
to allow mounting to the frame.
These springs are normally used in cargo truck
suspensions and pickups because they have the
unique capability of being designed to change
rate as a function of suspension travel.
b. Parabolic leaf spring: They get their name
from the mid span change in thickness which
is built into each plate. This changing cross
section allows the material to maintain constant
strength which is not possible in a flat plate
multileaf design.
The result is that a parabolic spring may be up
to 30% lighter than an equivalent flat-plate leaf
spring design.
12. Light Trucks: Automotive segment made up of SUVs,
CUVs, vans and pick-ups.
13. Light Vehicles: Automotive segment that includes
cars and light trucks.
14.Machining: The piece of grey iron cast is physically
treated and refined.
15.Platform: Primary technical components (suspension,
transmission, brake system) shared by a family of motor
vehicles.
16.Rotor: A cast grey iron brake system component that
operates in conjunction with the wheels. When the brake is
applied, the caliper is actuated forcing the friction material
against the spinning disc imparting a braking force.
17. SUV (Sport Utility Vehicle): A recreational vehicle,
such as an all terrain 4x4.
18.Van: Light vehicle with rear-end leaf springs or coil
springs for transporting cargo or passengers.
Information for
investors and media
Headquarters
Monte Pelvoux 220 - 8th Floor
Lomas de Chapultepec
11000 Mexico City, Mexico
P.: 52 (55) 5229-5800
Stock:
Bolsa Mexicana de Valores (BMV)
Symbol SANLUIS
Shares Issued
SANLUIS A 178,175,772
SANLUIS CPO 70,983,776 *
* Each CPO represents one B share
and one C share
Auditors
PricewaterhouseCoopers
Mariano Escobedo 573
Rincón del Bosque
11580 México, D.F.
T.: 52 (55) 5263-6047
F: 52 (55) 5263-6010
Legal Department
Juan Pablo Rosas Pérez
T.: 52 (55) 5229-5807
F: 52 (55) 5229-5895 ext. 5807
jprosas@sanluisrassini.com
2013 Consolidated
Financial Statements
The attached USB contains the Corporate video clip, SANLUIS Corporación S.A.B.
de C.V. 2013 Annual Report and its Financial Statements with accompanying notes.
Annual Report 2013 PDF
www.sanluisrassini.com/pdf/annualreport2013.pdf
Consolidated Financial Statements 2013 PDF
www.sanluisrassini.com/pdf/consolidatedfinancialstatements2013.pdf
Notes
Financial highlights
(1) EBITDA = Operating profit plus depreciation, amortization, other expenses and income and workers’ profit sharing
(2) EBITDA +/- Change in Working Capital minus taxes.
(3) Income before taxes.
(4) Net Worth SANLUIS Corporación, S.A.B. de C.V.
EBITDA Millions of Pesos
(1) Operating profit plus depreciation, amortization, other expenses and income and workers’ profit sharing
Debt profile %
* Does not include working capital financing
Consistent with our commitment to
care for our environment, only 200 copies
in Spanish and 100 copies in English of this
Annual Report were printed, complemented
with electronic information.
Design and Photography Consultants: DISEÑA Creatividad a... Tiempo! www.disenacat.com
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Monte Pelvoux 220, 8º floor
Lomas de Chapultepec
11000 Mexico City
P.: 52 (55) 5229 5800
@RASSINIauto
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