Our financial results in the second quarter of 2024

We ended the second quarter of 2024 with Growth in Net Revenue, Net Profit, Sales Volume, and Investments  

• Our consolidated global net revenue for the period was BRL 7 billion, reflecting a 1% increase compared to Q2 2023 in local currency. 

• Our net profit reached BRL 515 million, 10% higher compared to the same period of last year. 

• Our global cement sales totaled 9.6 million tonnes in Q2 2024, a 2% increase compared to the second quarter of 2023. 

• Capex investments increased 43% in Q2 2024, aligned with our strategy of accelerating investments in structural competitiveness. 

We ended the second quarter of 2024 with a higher net revenue from higher volumes and supported by geographic and product diversification. We recorded global net revenue of BRL 7 billion in the second quarter of 2024, a 1% increase compared to the same period last year, excluding the effect of exchange rate variation. This result is mainly due to the positive performance of operations in Europe, Asia, Africa, and Brazil. In Q2 2024, our global cement sales totaled 9.6 million tonnes, a 2% increase compared to Q2 2023. 

Consolidated adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) reached BRL 1.6 billion in the second quarter, a 2% decrease in local currency and stable in the consolidation in the BRL currency compared to 2Q23. This result is due to a balanced portfolio with geographic and product diversification, positively impacted by operational performance in Europe, Asia, and Africa, as well as new business in Brazil. The EBITDA margin was 23% in Q2 2024, also stable compared to Q2 2023. 

Our net profit was BRL 515 million in 2Q24, 10% higher compared to BRL 470 million in 2Q23. 

At the end of 2Q24, our investments (Capex) added up to BRL 679 million, 43% higher than in 2Q23. This increase is mainly explained by our global strategy for investments in modernization and structural competitiveness, in addition to projects linked to our decarbonization commitments. During the second quarter, the first phase of the modernization project of the Salto de Pirapora plant (in the State of São Paulo, Brazil) started-up. We also concluded the investment in the cement kiln at the St. Marys plant in Canada, which aims to expand the co-processing capacity of alternative fuels with plastic waste and biomass. These two initiatives enhance the thermal substitution rate, contributing to our decarbonization journey and sustainability commitments. Expansion projects accounted for 13% of the total capital invested in the second quarter of 2024. 

In July, we announced an expansion in Edealina (State of Goiás, Brazil), with an investment of BRL 200 million for the construction of a new cement grindding line that will double the plant’s production capacity, reaching 2 million tons of cement per year. The conclusion is expected for the second half of 2025. This amount is part of a comprehensive BRL 5 billion investment program for the next five years, focused on growth and structural competitiveness of our operations in Brazil. This program, with BRL 1.7 billion already in progress, covers our operations in all regions of the country, with structural investments aimed at increasing cement production capacity, competitiveness, the use of alternative fuels, and reducing CO2 emissions. 

Leverage, measured by the net debt/adjusted EBITDA ratio, ended the second quarter at 1.88x, 0.24x higher than the same period in 2023 but still in line with our financial policy and aligned with investment-grade indicators. The increase is explained by exchange rate variations, partially mitigated by improved operational results. At the end of Q2 2024, and considering subsequent events, we maintained a solid liquidity, with total cash and financial investments worth BRL 4.9 billion, allowing us to comply with our financial obligations for approximately four years. 

“At the end of the first half of the year, our results demonstrate the resilience and effectiveness of our diversification and capital allocation strategy. We remain focused on strengthening our structural competitiveness, advancing decarbonization projects and new businesses, while maintaining our solid financial discipline. We stay on course with our investment plan, aligned with our global strategy and strategic mandate,” said Osvaldo Ayres, our Global CEO.  

The Moody’s rating agency reaffirmed Votorantim Cimentos’ global credit rating in May 2024, as “Baa3” with a stable outlook, keeping the company as an Investment Grade. 

In July, we signed an agreement for the full sale of our assets located in Tunisia to Sinoma Cement Co., Ltd, a cement based building materials enterprise headquartered in China. The completion of the transaction, including the effective transfer of the assets in the country and financial liquidation, is subject to the fulfilment of customary precedent conditions, including the approval by regulatory authorities. The commercial terms of the transaction are confidential.  

This divestment is aligned with our portfolio management strategy, which seeks to maximize value for our shareholders and balance the geographic positioning between mature and emerging markets, optimizing the risk management of our consolidated portfolio. During the analysis by the local regulatory authorities, all our plants and offices in Tunisia will continue to operate as usual.  

Performance by Region 

In Brazil, our net revenue in the second quarter of 2024 was BRL 3.2 billion, flat compared to the same period in 2023. Adjusted EBITDA reached BRL 566 million in 2Q24, stable compared to 2Q23, due to a positive trend in new businesses and an improvement in variable costs.  

In North America, net revenue reached BRL 2.2 billion in 2Q24, a decrease of 13% compared to 2Q23, excluding the exchange variation, mainly impacted by the slowdown in demand, which was partially mitigated by the increase in prices at the beginning of the year. The adjusted EBITDA result in the region was BRL 613 million, compared to BRL 647 million in the same period of the previous year. The drop in operating results is due to lower volumes, and higher variable costs from raw materials, mitigated, for the most part, by the increase in prices and better operational efficiency.    

In Europe, Asia and Africa, net revenue was BRL 1.3 billion, an increase of 22% in 2Q24 compared to 2Q23, excluding exchange rate variations, due to higher volumes in all cluster’s countries and positive price management. The region’s adjusted EBITDA was BRL 362 million, an increase of 19% compared to 2Q23 in local currency. The positive operating result was due to the market dynamics and lower variable costs. 

In Latin America, revenue grew 2% in the second quarter of 2024 compared to the same period in 2023 in local currency, due to better volumes in Bolivia. The region ended 2Q24 with BRL 29 million in adjusted EBITDA, 25% lower than 2Q23, excluding the exchange rate variation effect, mainly due to the challenging market dynamics in Uruguay and maintenance timing.