Votorantim Cimentos Ends 2019 with Global Net Profit of R$ 549.2 Million, Adjusted EBITDA of R$ 2.7 Billion and EBITDA Margin of 20%

  • Global net revenue was R$ 13 billion in 2019, up 3%;
  • Leverage, as measured by the net debt/adjusted EBITDA ratio, fell to 2.95 x;
  • Credit rating upgraded by Moody's; the Company also recovered its investment grade by S&P;
  • Votorantim Cimentos was one of the pioneers in the construction materials sector to obtain a revolving credit line with provisions linked to sustainability performance indicators;
  • R$ 2 billion modernization investment plan approved for the next five years.

São Paulo, March 26, 2020 – Votorantim Cimentos ended 2019 with consolidated net profits of R$ 549.2 million, a significant increase compared to the previous year (R$ 10.4 million). The Company's net revenues totaled R$ 13 billion, up 3% compared to 2018. Consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) reached R$ 2.7 billion (a 1% increase compared to the previous year), with an EBTIDA margin of 20%. Leverage, as measured by the net debt/EBITDA ratio, fell to 2.95x, an improvement over 2018 (3.64 x).

"Our 2019 results reflect the beginning of the recovery in demand in Brazil and our good performance abroad, despite challenging situations in some specific countries," said Osvaldo Ayres Filho, Votorantim Cimentos' Global CFO.

Among last year's highlights, the CFO of Votorantim Cimentos mentioned the expansion of the Pecém plant in Ceará, Brazil, and the San Luis plant, in Argentina (carried out through Avellaneda, in which Votorantim Cimentos holds a minority interest); the acquisition of United Materials, a company that operates in the concrete, aggregates and construction materials market in western New York, United States; and the launch of Verdera, a new business unit that offers companies and industries final waste disposal by coprocessing it in the Company's cement plants. In 2019, Company investments totaled R$ 1.1 billion, a 9% increase compared to the previous year.

According to Ayres Filho, Votorantim Cimentos approved a R$ 2 billion modernization plan for the next five years, focusing on increasing the competitiveness of its operations and the global expansion of the co-processing business. As a result of the continued global expansion in co-processing, in 2019 the Company achieved a 22% global thermal substitution rate, versus 18.5% in the previous year.

Votorantim Cimentos ended 2019 as one of the few Brazilian companies to recover its investment grade rating by the rating agency Standard & Poor's (BBB-), while also maintaining its investment grade rating by Fitch Ratings (BBB-), assigned in 2011. Also, Moody's upgraded the Company's credit rating to  Ba1, with positive effects on its borrowing cost.

The Company was also one of the first in the building materials industry to obtain a revolving credit line with interest rates linked to sustainability performance indicators, such as reducing CO2 emissions and increasing the use of energy from alternative fuels. In replacement of a previous Committed Credit Facility (CCF), in the amount of US$ 230 million and maturing in 2020, Votorantim Cimentos contracted a new CCF through a securitization company in the amount of US$ 290 million, maturing in August 2024.

In the last quarter of the year, the company issued, for the first time, debt securities backed by a Certificate of Real Estate Receivables (CRI). The public distribution of the CRI, rated AAA (bra) by Fitch Ratings, raised R$ 527.8 million.

"Votorantim Cimentos remains financially well positioned. The company's leverage ended the year below 3 x, in line with our financial policy. Among the main movements in 2019, we highlight the contribution received from Votorantim S.A. at the beginning of the year, which, together with our cash, enabled us to pay off approximately R$ 3 billion in debt. In addition, debt restructuring operations carried out last year resulted in extended tenor, more competitive costs and new sources of financing," said Ayres Filho.

Results in Brazil (VCBR)

Especially in the second half of the year, the Brazilian market grew in line with projections, ending 2019 with a 3.5% increase in sales volume, according to the SNIC (National Cement Association)—also reflecting the recovery of the real estate market.

In Brazil, Votorantim Cimentos registered an increase in sales volume and prices, reaching a net revenue of R$ 6.8 billion in 2019, up 4% compared to 2018. Adjusted EBITDA also grew 4%, to R$ 1.1 billion.

Results in North America (VCNA)

In North America, net revenue reached R$ 3.8 billion last year, an increase of 11% compared to 2018, with increases in volume and price. Adjusted EBITDA in the region was R$ 1.1 billion in 2019, up 7%. The result was driven by the growth of the American economy and the Federal Reserve's expansionary monetary policy, coupled with the devaluation of the Real.

Results in Europe, Asia and Africa (VCEAA)

In Europe, Asia and Africa, net revenue was R$ 1.7 billion in 2019, down 8% from the previous year. This result was mainly impacted by market conditions in Turkey, which has suffered from an economic recession since the second half of 2018. Results in Spain remained stable, influenced, in the second half of the year, by local political instability. Tunisia and Morocco had solid results, with important advances compared to the previous year. Adjusted EBITDA in the region was R$ 418 million, down 9% from 2018.

Results in Latin America (VCLATAM)

In Latin America, net revenue was R$ 658 million in 2019, down 7% compared to 2018. Adjusted EBITDA was R$ 131 million in 2019, down 15%, mainly due to declines in local market volume in 2018.


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