Presentation - 3rd Quarter 2006

1. www.duratex.com.br 3Q2006 Results
1
November / 2006

2. >> Index
Business segments
Strategic positioning
Wood panels sector
Housing segment
Performance
Capital Markets
Wrap up
2

3. >> Business Segments
Wood Division
Hardboard
Particle Board
MDF/HDF/SDF
Laminate Flooring
3

4. >> Business Segments
Deca Division
Metal Fittings
Vitreous China
Accessories
4

5. >> Strategic Positioning
Leadership
Biggest local producer of wood boards and metal fittings;
Predominance in premium markets;
Self-sufficiency in wood supply and timberland located close
to industrial facilities;
Pioneer in introducing new technologies;
High degree of productivity based on economies of scale
and automated processes;
Active policy of developing new products;
Superior quality and well known brands:
5

6. >> Strategic Positioning
CAPEX Highlights since 2002
New MDF/HDF/SDF plant in Botucatu/SP;
Low-pressure coating lines in Itapetininga/SP and Botucatu/SP;
Cut-to-Size saw in Jundiaí/SP;
Expansion of the vitreous china unit in Jundiaí/SP;
Acquisition of approximately 20,000 hectares of timberland;
CAPEX during the period (in R$ M):
R$ 800 M
303,5
172,8
136,8
108,4
79,1
2002 2003 2004 2005 9m06
6

7. >> Strategic Positioning
sep-06
Capital Structure in R$ M
Total Debt 641
Cash and Cash Equivalents 525
Shareholder´s Equity 1.342
Net Debt / Shareholder´s Equity 8,7%
Net Debt / EBITDA Annualized 0,26
641,4
Debt and amortization schedule
Foreign 102,3 125,9
Currency
291,7
Domestic 539,1
Currency
68,3
76,8
78,7
Total Debt 2006 2007 2008 2009 2010 &
After
7

8. >> Strategic Positioning
Nominal capacity and occupancy rate
94% 360.000 m3/year
Hardboard 360.000 m3/year
Particle Board 74% 500.000 m3/year
500.000 m3/year
640.000 m3/year
640.000 m3/year
MDF/HDF/SDF 88%
14.400 KK
14.400
Metal Fittings 73% items/year
items/year
3.800 KK**
3.800
Vitreous China 80% items/year
items/year
* Industrial Capacity (Nominal Capacity = 4.200 K items/year)
8

9. >> Wood Panels Sector
Furniture industry
Consume approximately 60% of Duratex made wood panels;
The industry is constituted of more than 16 thousand companies;
There are 7 main furniture poles:
• Bento Gonçalves (RS),
• São Bento do Sul (SC),
• Arapongas (PR),
• Big São Paulo (SP),
• Norwest region of São Paulo (SP)
• Ubá (MG)
• Linhares (ES) Furniture poles
9

10. >> Wood Panels Sector
Duratex: selling channels
Domestic Market
6%
Furniture
Industry
59%
3%
91%
Civil Construction 6%
Retail Technical Sales 5%
24% Others 6%
10

11. >> Wood Panels Sector
Processed wood industry
Laminate
Hardboard Particle Board MDF/HDF SDF
Flooring
Standard Painted Standard LP FFStandard LP FF
Duratex
Berneck
Eucatex
Isdra
Masisa
Arauco
Satipel
Tafisa
11

12. >> Housing Segment
Brazilian scenario
In 2005, the sector accounted for 12% of the Brazilian GDP;
Housing deficit: 7,9 million units:
Positive perspectives:
• Improving of the legal framework, 13%
• Decreasing of interest rates,
35%
• Tax reduction – IPI,
• Expansion of credit and 5%
• Capitalized companies ready to invest:
38%
R$3,7 billions (recent primary issuing of stock:
Cyrela, Gafisa, Company, Rossi, Brascan, etc). 9%
Source: SindusCon/SP and GV Consult
12

13. >> Housing Segment
Market performance
Increasing number of launchings during 2005 at the metropolitan
regions of SP and RJ, which represents 82% of the total market;
Number of residential units launched:
São Paulo Rio de Janeiro
+20% +23%
34.414 8.791
28.782 7.162
2004 2005 2004 2005
Source: Embraesp, Secovi and ADEMI/RJ
13

14. >> Housing Segment
Market expectations
Key points for market expansion:
• Economic growth,
• Increasing income,
• Extension of loan terms and
• Reduction of interest rates, among others. 22,00%
19,00%
18,50%
Correlation: 15,75%
17,50% 17,25% 13,50%
Interest Rate
5,7% 5,1%
Construction GDP
2,1% 1,3%
2000 2001 2002 2003 2004 2005 2006
-2,6% -2,5%
-8,6%
14

15. >> Housing Segment
Construction average cycle )
u res
e a fixt
n in
s to ic ch es
lag c tr us ori
of
f ele g hing itreo ss
on ion an
d hin i n is n d v ce ure /
ati ct is tf Ac rnit ling
t
ec corp
or tru ulic ck
fin gh als a
Li et iv e
ry
Fu ode
j le ns dra i l
Pro In Sa Co Hy Th (M De rem
12 months 5 months 3 months
5% 95%
15

16. >> Housing Segment
Deca: selling channels
Domestic Market
14%
Home
Retail Centers
57% 19%
8%
Civil 78%
Construction 11%
Wholesale 9%
Others
4%
16

17. >> Performance
Net revenues breakdown (2006)
Others
MDF / HDF / SDF 18%
27% Laminate
Floor Boards
6%
Furniture Makers
Particle
Board 37%
13%
Metal
Fittings
21%
Civil Construction
Hardboard 45%
Vitreous
22% China
11%
Market Segments
17

18. >> Performance
Exports (in US$ M)
62,5
57,6
47,2
Improvement of the export selling mix:
46,5 45,4
41,5
• Vitreous China + 31%
• MDF/HDF/SDF - 9%
2002 2003 2004 2005 9m05 9m06
Highlights (2006)
Hardboard MDF/HDF/SDF
70% 9%
Wood
85% Others 6%
Vitreous China
Deca
11%
15%
Metal Fittings
4%
18

19. >> Performance
Quarterly highlights
Var. (% ) Var. (% )
Shipments 3Q06 2Q06 3Q05 3Q06 x 2Q06 3Q06 x 3Q05
Wood (in 1.000 m³) 346,0 289,0 254,5 20% 36%
Deca (in 1.000 items) 3.628 3.156 3.376 15% 7%
in R$ M
Net Revenues 399,8 348,3 317,9 15% 26%
COGS (225,8) (204,9) (190,8) 10% 18%
Gross Profit 174,0 143,4 127,1 21% 37%
Gross Margin 44% 41% 40% - -
Operating result before financ. 111,3 80,6 65,5 38% 70%
EBITDA 130,8 99,8 85,5 31% 53%
EBITDA Margin 33% 29% 27% - -
Net Income 70,2 45,8 33,1 53% 112%
ROE (annualized) 23% 16% 14% - -
19

20. >> Performance Jan – Sep (in R$ M)
Net Revenues Ebitda & Margin
R +1
5%
R +22%
CAG CAG 29%
31%
28%
25%
23%
1.079 333
883 940 277
710 247
619 165
152
2002 2003 2004 2005 2006 2002 2003 2004 2005 2006
Net Income Equity & ROE
1%
3% CAGR +1 18%
R +3
CAG 13% 14%
8% 6%
161
1.342
93 106 994 1.035
896 924
52 42
2002 2003 2004 2005 2006 2002 2003 2004 2005 2006
20

21. >> Performance
Net revenues per employee (in R$ 1.000)
%
GR : +12
CA 237,2
215,7
199,7
169,8
150,4
2002 2003 2004 2005 LTM 06
LTM = Last 12 months
21

22. >> Performance Jan – Sep
Ebitda (in R$ M) & Margin (%) Wood
33% 35%
30% 31%
26% Demanded markets;
255 Increase of shiped volumes;
196 199
119 122 Export revenues reduction.
2002 2003 2004 2005 2006
26% 22%
18% 18%
15%
Positive scenario for the housing segment;
Increase of shiped volumes (Basics); 78 77
43 50
33
Metal fittings cost increase.
2002 2003 2004 2005 2006
22

23. >> Performance
EBITDA per employee (in R$ 1.000)
%
GR : +17 70,4
CA 61,6
53,9
37,0 39,8
2002 2003 2004 2005 LTM 06
LTM = Last 12 months
23

24. >> Performance
Cash Flow (in R$ M)
195,7 14,0 524,8
275,9
(39,0)
(79,1)
(76,7)
234,0
Opening Adjusted Working CAPEX Dividend Issuing Financing Closing
balance net income ( * ) capital and profit of new stock balance
Dec-05 sharing Sep-06
( * ) Adjusted Net Income = net Income + depreciation + financial result + provision and asset write offs
24

25. >> Capital Markets
Shareholder´s structure
Outstanding number of shares: 126.827.072
Common 53.120.492
Preferred 73.706.580
Preferred shareholder’s breakdown (Sep2006)
Foreign Investors
50,5%
Others
31,4%
Pension
Funds
10,6% Itaúsa
7,5%
25

26. >> Capital Markets
Financial Volume Price (R$)
(in R$ 1.000) as of 31/Oct/06
30.000 28,00
Election of an Independent Board Member 3rd Place – ABRASCA Award 27,00
27.500 Annual Report 26,00
Honourable Reference 25,00
25.000 Stock Dividend
IR Magazine 24,00
22.500 23,00
Stock Public Offering
22,00
20.000 Stock Split in Reverse
21,00
(200x1)
20,00
17.500
19,00
15.000 18,00
Adhesion to
17,00
12.500 Bovespa´s Level I
16,00
15,00
10.000
14,00
7.500 13,00
12,00
5.000
11,00
10,00
2.500
9,00
0 8,00
30/12/2004
19/10/2005
18/11/2005
16/12/2005
14/1/2005
31/1/2005
16/2/2005
16/3/2005
31/3/2005
14/4/2005
29/4/2005
13/5/2005
30/5/2005
13/6/2005
27/6/2005
11/7/2005
25/7/2005
22/8/2005
20/9/2005
4/10/2005
3/11/2005
2/12/2005
16/1/2006
31/1/2006
14/2/2006
16/3/2006
30/3/2006
13/4/2006
23/8/2006
21/9/2006
2/3/2005
8/8/2005
5/9/2005
2/1/2006
2/3/2006
2/5/2006
16/05/06
30/05/06
13/06/06
28/06/06
12/07/06
26/07/06
9/8/2006
6/9/2006
05/10/06
20/10/06
2005 2006
26

27. >> Capital Markets
Performance of Duratex´s preferred shares (in R$)
Duratex (1) Duratex (2) Ibovespa
10 years 811% 272% 209%
100 Base 5 years 715% 578% 243%
Change in Brazilian
12 months 95% 90% 15%
1000
FX regime
900
800 Russian Sep 11th
Crisis
700 Asian Politic Crisis
Crisis Lula´s Government
600 Argentine
Crisis
500
Brazilian
400 Election Period
300
200
100
0
7
8
9
0
1
2
3
4
5
6
t-0
t-0
t-9
t-9
t-9
t-0
t-0
t-0
t-0
t-0
se
se
se
se
se
se
se
se
se
se
(1) Reinvesting dividends (2) Without the reinvestment of dividends
27

28. >> Capital Markets
Preferred shares traded volume of PN stock
Fin. Daily Average
Volume (in R$ M) Financial Volume
35
30 R$ 7,5 M
25
20
15
10
5 R$ 1,3 M R$ 1,0 M
R$ 0,6 M
0
2/1/1986
2/1/1987
2/1/1988
2/1/1989
2/1/1990
2/1/1991
2/1/1992
2/1/1993
2/1/1994
2/1/1995
2/1/1996
2/1/1997
2/1/1998
2/1/1999
2/1/2000
2/1/2001
2/1/2002
2/1/2003
2/1/2004
2/1/2005
2/1/2006
1986 - 1989 1990 - 1999 2000 - 2005 2006
28

29. >> Capital Markets
Value build up
US$ 1.443 M
Market Capitalization
R$3.138 M
3.138
+1 7%
GR:
CA
+ 2 6%
GR: 1.743
CA 1.460
US$ 362 M
970
661 558 605
R$ 403 M
403 468
288
1997 1998 1999 2000 2001 2002 2003 2004 2005 sep/06
29

30. >> Capital Markets
Dividends (in R$ M)
60,8 *
58,1
% 15,3 46,3
: +17 30,4
CA GR 21,3
42,8
23,6 24,6 25,7
30,4
21,5
15,0 25,0
14,7 15,2
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Extraordinary dividend * Dividend 1H06 Annualized
30

31. >> Wrap up
Market Positioning:
• strong brand names,
• products,
• markets,
• distribution channels.
CAPEX:
• consistents programs,
CREATION
• returns / ROIC.
OF VALUE WITH
Capital´s Structure:
• presence in capital markets, SUSTAINABILITY
• low leverage.
Low Cost of Wood Supply
31

32. www.duratex.com.br 3rd Quarter Results
32
November / 2006