Votorantim Cimentos Reports Third-Quarter EBITDA of R$ 1.5 Billion, an Increase of 94% Compared with the Third Quarter of 2019
With solid operating results and financial discipline, the leverage, as measured by the net debt/adjusted EBITDA ratio, was 2.85x, in line with the company’s financial policy
São Paulo, November 12, 2020 – Votorantim Cimentos recorded global net revenue of R$ 5.2 billion in the third quarter of 2020, a 37% increase compared to the same period in 2019. The growth was due to the positive impact of a 15% increase in sales—resulting from a recovery in demand in all regions where the company operates—in addition to positive market dynamics and the appreciation of the dollar against the real. Consolidated adjusted EBITDA in the quarter was R$ 1.5 billion, an increase of 94% in comparison with the third quarter of 2019, with an EBITDA margin of 30%. The company’s leverage, as measured by the net debt/adjusted EBITDA ratio, was 2.85x, in line with the company’s financial policy.
“We recorded solid operating results in the third quarter, and we have remained attentive to the impacts of the coronavirus pandemic and market dynamics. We maintained our financial discipline through the management of liabilities and the control of our costs and investments, ensuring a cash liquidity position that will enable us to face the still uncertain environment in the coming months,” said Osvaldo Ayres Filho, global CFO of Votorantim Cimentos.
In Brazil, social isolation led people—who cut spending in other sectors of the economy—to allocate resources to home improvement and renovation projects, leading to a growth in the building materials market. Federal emergency aid and the historic drop in interest rates contributed to positive market dynamics. In addition, the real estate and civil construction sectors, which were considered essential services during the pandemic, continued their activities. Votorantim Cimentos recorded net revenue of R$ 2.5 billion in the country, a 30% growth compared to the third quarter of 2019. Adjusted EBITDA was R$ 611 million, an increase of 259% compared to 3Q19, with strong market performance by building materials and adjacent products, such as mortars, aggregates and limes.
In the United States and Canada, the cement market experienced stable and less challenging dynamics than initially anticipated for the third quarter of 2020, driven by the economic reopening after the initial impact of Covid-19 restrictions. In North America, net revenue was R$ 1.8 billion in the third quarter of 2020, an increase of 42% in comparison with the previous year. Adjusted EBITDA was R$ 671 million, an increase of 35% in comparison with the third quarter of 2019.
The Europe, Asia and Africa region was initially the most affected by the coronavirus pandemic, but the third quarter saw the beginning of a gradual recovery in demand. Net revenue grew 41% compared to 3Q19, reaching R$ 634 million. This growth was mainly due to the depreciation of the real and the contingency plan in progress, in addition to the improvement of market conditions in Turkey and price dynamics in Spain and Tunisia. Adjusted EBITDA in the region was R$ 188 million, an increase of 94%.
In Latin America and other regions, net revenue grew by 67%, to R$ 248 million. The effects of positive operating results in Uruguay—where the Covid-19 pandemic was successfully controlled—were partially offset by the challenging situation in Bolivia. Adjusted EBITDA grew by 151%, to R$ 67 million. Together with its local partner, Cementos Molins, Votorantim Cimentos will invest US$ 40 million in Uruguay to unify its industrial activities by consolidating its industrial facilities in the city of Minas, 100 kilometers from Montevidéu, thereby creating a more efficient and sustainable production line and enhancing its competitiveness and financial performance.
Along with the third-quarter financial results, Votorantim Cimentos annouced its 2030 Sustainability Strategy and Commitments
, aligning the company’s operations with the demands of society and the market. The document details specific targets and initiatives for the next ten years, divided into seven pillars: Health and Safety, Ethics and Integrity, Diversity and Inclusion, Innovation, Environmental Impact, Circular Economy and Shared Value. More details and information on the 2030 Sustainability Strategy and Commitments can be found at www.2030commitmentsvc.com