SAN PEDRO GARZA GARCIA, NUEVO LEON, Mexico, May 1 /PRNewswire-FirstCall/ -- Vitro S.A.B. de C.V. (BMV: VITROA; NYSE: VTO) one of the world's largest producers and distributors of glass products, today announced 1Q'09 unaudited results. Year over year consolidated net sales declined 34.5 percent affected by a 34.0 percent peso depreciation during last twelve months 1Q'09, lower volumes and the deconsolidation of Comegua -- the Company's glass container subsidiary in Central America. Consolidated EBITDA decreased 34.3 percent YoY while the consolidated EBITDA margin increased to 12.7 percent from 12.6 percent in the same period last year. On a comparable basis, excluding Comegua, consolidated net sales during 1Q'09 declined 28.8 percent YoY while EBITDA decreased 28.3 percent during the same period. FINANCIAL HIGHLIGHTS* --------------------- 1Q'09 1Q'08 % Change ----- ----- -------- Consolidated Net Sales 419 640 -34.5% Glass Containers 211 336 -37.1% Flat Glass 203 296 -31.5% ---------------------------------------------------- Cost of Sales 302 472 -36.1% ---------------------------------------------------- Gross Income 117 167 -29.9% ---------------------------------------------------- Gross Margins 28.0% 26.2% 1.8 pp ---------------------------------------------------- SG&A 97 125 -22.9% ---------------------------------------------------- SG&A % of sales 23.1% 19.6% 3.5 pp ---------------------------------------------------- EBIT 21 42 -50.7% ---------------------------------------------------- EBIT Margins 5.0% 6.6% -1.6 pp ---------------------------------------------------- EBITDA 53 81 -34.3% Glass Containers 49 58 -15.1% Flat Glass 1 22 -97.1% ---------------------------------------------------- EBITDA Margins 12.7% 12.6% 0.1 pp Net Income (84) 30 - ---------------------------------------------------- Net Income Margins -20.0% 4.7% -25 pp ---------------------------------------------------- Total Debt 1,481 1,402 5.7% Short Term Debt(1) 1,370 132 941.0% Long Term Debt 111 1,270 -91.2% Cash & Cash Equivalents(2) 87 138 -37.1% Total Net Debt 1,395 1,264 10.4% ---------------------------------------------------- * Million US$ Nominal (1) Since we are not in full compliance under our bond indentures, the outstanding amount of the Senior Notes debt was reclassified from long-term to short-term (2) Cash & Cash Equivalents include restricted cash which corresponded to cash collateralizing debt and derivatives instruments accounted for in other current assets. As of 1Q'09 restricted cash only includes cash collateralizing debt. Please refer to the Consolidated Financial Position section Commenting on the results for the quarter, Mr. Hugo Lara, Chief Executive Officer, said, "As expected, the increasingly weakening economy had an impact on sales and EBITDA which was exacerbated by the depreciation of the peso. As we work closely with our customers and suppliers, many of whom are experiencing the same challenges as Vitro, we remain focused on taking all the necessary steps to maintain our operations as usual. That means particular attention to our cost cutting program, which had a positive impact this quarter, while focusing on increasing productivity as we realign production to the current level of demand. All while continuing to develop innovative programs to support sales. There is no doubt that these are challenging times for businesses all over the world, but we are committed to working together with our customers, suppliers, creditors, and investors to assure continuing progress." Mr. Claudio Del Valle, Chief Restructuring Officer, noted, "Glass Container sales volumes continued to decline reflecting the global slowdown in demand. The ongoing weak conditions impacted almost every sector with the exception of domestic CFT (Cosmetics, Fragrances & Toiletries) and export food volumes. As such, domestic and export sales measured in US dollars declined year-over-year by 22 percent and 12 percent, respectively. EBITDA, in turn, benefited from cost reduction initiatives and lower energy costs, and was down 15 percent year-over-year." "Flat Glass sales fell 31.5 percent this quarter, again mostly driven by the ongoing difficult industry conditions in the North American Automotive business, as well as the US and Spanish construction segments. Sales were also negatively impacted by the depreciation of the peso. We also began to see a slowdown in the domestic construction market. Despite the industry-wide decline in the Mexican float glass market, we increased our share by 2 percentage points year-over-year to 46 percent, reflecting the emphasis on new products targeted to glass transformers and the addition of new industrial and automotive clients. Auto glass volumes to the OEM market fell 47 percent consistent with a 51 percent industry decline, while float glass export volumes remained stable year-over-year driven by demand from Central American markets and from new South American markets. EBITDA, in turn, declined 97 percent during the period, mainly as a result of lower fixed-cost absorption driven by sluggish volumes in the construction and automotive markets as well as the reduction of float glass inventory in Mexico. The volatility in the exchange rate also negatively impacted prices of certain raw materials." "In terms of our balance sheet, we continued to maintain a strict control of our cash position and successfully completed the refinancing of Glass Containers' two-tranche trade receivables securitization -- a $550 million peso variable rate investment grade bond and an unrated US$19 million dollar fixed rate bond. This is a very important transaction for Vitro and one we believe demonstrates the market's confidence in the Company's future." Commenting on cost reduction goals, Mr. Del Valle commented, "We have made progress in our strategy to revitalize the Company as we continue to implement cost reduction initiatives across the board while optimizing production capacity. Overall, these cost cutting measures allowed us to achieve total annualized savings of US$38 million this quarter, well-above our internal goal of US$32 million. As of today, we have implemented cost and production realignment initiatives totaling annualized savings of US$78 million, including the ones achieved in 2008, out of the expected range between US$80 million and US$120 million." Commenting on the restructuring process, Mr. Lara noted, "We continue conversations and negotiations with our derivative counterparties and bondholders and are committed to continue exploring different alternatives and searching for creative ways to reach a favorable settlement for restructuring our obligations." "The initiatives that Vitro management has taken are starting to pay off as we move through this difficult time in our economy," Mr. Lara closed. Mar-09 Mar-08 ------------------------------------------------- Inflation in Mexico Quarter 0.9% 1.5% LTM 6.0% 4.2% Inflation in USA Quarter 0.0% 1.3% LTM -0.6% 4.3% Exchange Rate Closing 14.3317 10.6962 Devaluation Quarter (closing) 3.6% -1.6% LTM (closing) 34.0% -3.0% ------------------------------------------------- All figures provided in this announcement are in accordance with Mexican Financial Reporting Standards (Mexican FRS or NIFs) issued by the Mexican Board for Research and Development of Financial Reporting Standards (CINIF), except otherwise indicated. Dollar figures are in nominal US dollars and are obtained by dividing nominal pesos for each month by the end of month fix exchange rate published by Banco de Mexico. In the case of the Balance Sheet, US dollar translations are made at the fix exchange rate as of the end of the period. Certain amounts may not sum due to rounding. All figures and comparisons are in US dollar terms, unless otherwise stated, and may differ from the peso amounts due to the difference in exchange rates. This announcement contains historical information, certain management's expectations, estimates and other forward-looking information regarding Vitro, S.A.B. de C.V. and its Subsidiaries (collectively the "Company"). While the Company believes that these management's expectations and forward looking statements are based on reasonable assumptions, all such statements reflect the current views of the Company with respect to future events and are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated in this report. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic, political, governmental and business conditions worldwide and in such markets in which the Company does business, changes in interest rates, changes in inflation rates, changes in exchange rates, the growth or reduction of the markets and segments where the Company sells its products, changes in raw material prices, changes in energy prices, particularly gas, changes in the business strategy, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. The Company does not assume any obligation, to and will not update these forward-looking statements. The assumptions, risks and uncertainties relating to the forward-looking statements in this report include those described in the Company's annual report in form 20-F file with the U.S. Securities and Exchange Commission, and in the Company's other filings with the Mexican Comision Nacional Bancaria y de Valores. This report on Form 6-K is incorporated by reference into the Registration Statement on Form F-4 of Vitro, S.A.B. de C.V. (Registration Number 333-144726). DATASOURCE: Vitro S.A.B. de C.V. CONTACT: Investor Relations, Adrian Meouchi, +(52)81-8863-1765, , or Angel Estrada, +(52)81-8863-1730, ; or Media Relations, Albert Chico, +(52)81-8863-1661, , or Roberto Riva, +(52)81-8863-1689, , all of Vitro S.A.B. de C.V.; or U.S. agency, Susan Borinelli, , or Barbara Cano, , both of Breakstone Group, +1-646-452-2334

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