SAN PEDRO GARZA GARCIA, NUEVO LEON, Mexico, July 28 /PRNewswire-FirstCall/ -- Vitro S.A.B. de C.V. (BMV: VITROA; NYSE: VTO) one of the world's largest producers and distributors of glass products, today announced 2Q'09 unaudited results. Year-over-year consolidated net sales declined 36.0 percent affected by a 28 percent peso depreciation during last twelve months, lower volumes and the deconsolidation in December 2008 of Comegua -- the Company's glass container venture in Central America. Consolidated EBITDA decreased 32.5 percent YoY while the consolidated EBITDA margin increased to 12.4 percent from 11.7 percent in the same period last year. On a comparable basis, excluding Comegua, consolidated net sales during 2Q'09 declined 31.1 percent YoY while EBITDA decreased 27.2 percent during the same period. FINANCIAL HIGHLIGHTS* --------------------- ----- ----- -------- 2Q'09 2Q'08 % Change ----- ----- -------- Consolidated Net Sales 464 725 -36.0% Glass Containers 249 392 -36.4% Flat Glass 210 324 -35.1% Cost of Sales 330 540 -38.8% ------------- ----- ----- ----- Gross Income 133 185 -28.0% ------------ ----- ----- ----- Gross Margins 28.8% 25.6% 3.2 pp ------------- ----- ----- ----- SG&A 109 143 -23.9% ---- ----- ----- ----- SG&A % of sales 23.5% 19.7% 3.8 pp --------------- ----- ----- ----- EBIT 25 42 -42.1% ---- ----- ----- ----- EBIT Margins 5.3% 5.8% -0.5 pp ------------ ----- ----- ----- EBITDA 57 85 -32.5% Glass Containers 56 64 -13.3% Flat Glass 2 22 -90.9% EBITDA Margins 12.4% 11.7% 0.7 pp Net Income 62 5 - ---------- ----- ----- ----- Net Income Margins 13.3% 0.7% +13 pp ------------------ ----- ----- ----- Total Debt 1,488 1,426 4.3% Short Term Debt(1) 1,389 143 873.8% Long Term Debt 99 1,283 -92.3% Cash & Cash Equivalents(2) 100 77 29.8% Total Net Debt 1,388 1,349 2.8% -------------- ----- ----- ----- * 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. Beginning in 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 anticipated, sales performance again reflected the weak economic environment with the decline aggravated by the depreciation of the Mexican peso. While there is limited visibility in our markets as we look ahead, we continue to maintain operations as usual and to make progress in the implementation of our cost control initiatives and productivity programs developed to adjust production to the current levels of demand. We are pleased to see that our programs showed positive results this quarter and continue to be sustained by our efforts to maintain strict cash management to support the long term viability of operations. We remain committed to working together with our customers, suppliers, creditors, investors to assure continuing progress." Mr. Claudio Del Valle, Chief Restructuring Officer, noted, "Although the global slowdown in demand had an important impact on our Glass Containers business, the performance of our operations reflected the measures we continue to implement to adjust to this difficult environment and enhance profitability. We continue to maintain our strong customer base and enhance relationships with our suppliers during these trying times. Economic conditions impacted volumes in every one of our markets with the exception of CFT export volumes (Cosmetics, Fragrances & Toiletries). Domestic and export sales measured in US dollars were down year-over-year by 36 percent and 5 percent, respectively. EBITDA, in turn, declined by 13 percent reflecting the positive impact of lower energy costs, the reduction in the workforce to adjust to the drop in demand and benefits from cost reduction initiatives which partially offset the lower sales volumes and higher raw material prices and the impact of the deconsolidation of Comegua." "Flat Glass sales fell 35 percent this quarter, driven by continued challenging conditions in two of the most affected sectors of the NAFTA economy -- automotive and construction, as well as a difficult environment in the construction market in Spain in which Vitro has important exposure. Sales were also negatively impacted by the depreciation of the Mexican peso. In this difficult environment, our focus on new products targeted to glass transformers and the addition of new industrial and automotive clients allowed us to maintain the 2 percentage point increase, reaching 46 percent, in our share of the Mexican float glass market achieved in 1Q09. Auto glass volumes in the OEM market, in turn, fell 45 percent as a consequence of the industry decline. Float glass export volumes decreased 11 percent year-over-year driven by a slowdown in demand from South American markets. EBITDA fell 91 percent during the period and continued to reflect the ongoing slowdown in the construction and automotive markets. Our efforts in reducing float glass inventory in Mexico has improved cash flow availability but has also affected EBITDA as a result of lower fixed-cost absorption. Prices of certain raw materials were also impacted by the volatility of the exchange rate. These negative effects, however, were partially offset by our meticulous focus on cost controls and the benefit from lower natural gas prices." "Looking ahead, in light of the continued challenging environment and limited near term visibility, we have decided to revise our EBITDA guidance for 2009 to between US$210-220 million from our original guidance of US$230-240 million. Our Capex guidance of US$74 MM CAPEX for the year remains unchanged." Commenting on the restructuring process, Mr. Del Valle noted, "We continue conversations with our derivative counterparties and bondholders with the objective of achieving an organized debt restructuring and are now in the process of finalizing a restructuring proposal which we expect to submit to our creditors the first week of August." In reference to the Company's cost control program, Mr. Lara said, "We continue to make progress towards achieving our cost reduction goals while optimizing production capacity. To-date, the cost and production realignment initiatives represent annualized savings of US$111 million, compared with our target of annualized savings of between US$80 and US$120 million." "As we move forward in this difficult environment, we remain focused on maintaining strict control of our cash position while optimizing working capital management as we monitor progress and recovery in the cyclical industries we serve. Our cost reduction programs have resulted in lower cash needs. In fact, these together with the US$23 million decline in working capital achieved through our efforts to preserve cash, resulted in a positive net free cash flow during the quarter," continued Mr. Lara. "In summary, Vitro like many companies all over the world has been affected by the global economic slowdown as clearly reflected in our numbers. And while we see the impact of the steps we have taken to support and strengthen our operations, we continue to assess the outlook to adjust to conditions and to plan for the return to a stronger worldwide economy. In the meantime, our strict control of operations and cash management have benefited the Company to assure continued operations until there is clear evidence of recovery. Despite these challenges, we continue serving our clients with high quality products while maintaining a close relation with our supply chain," Mr. Lara closed. Please click on this link to view the full version of the Press Release on our Web Site http://www.vitro.com/ DATASOURCE: Vitro S.A.B. de C.V. CONTACT: Investor Relations: Adrian Meouchi, +52-81-8863-1765, , or Carlos Garza, +52-81-8863-1730, , both of Vitro S.A.B. de C.V.; or U.S. agency: Susan Borinelli, , or Barbara Cano, , both of Breakstone Group, +1-646-452-2334; or Media Relations: Albert Chico, +52-81-8863-1661, , or Roberto Riva, +52-81-8863-1689, , both of Vitro, S.A.B. de C.V.

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