- Adjusted EBITDA was R$1.7 billion, 6% higher than the same period last year.
- EBITDA margin in the third quarter was 23%, with recovery throughout the year.
- Leverage, measured by the net debt/EBITDA ratio, was 1.77x, a 0.22x reduction compared to 2Q22.
- In October, the company introduced its new corporate branding.
Votorantim Cimentos, a sustainable building materials and solutions company, ended the third quarter of 2022 with consolidated net revenue of R$7.6 billion, an increase of 19% compared to the same period last year. This result is primarily due to favorable price dynamics in all regions, which offset the slight drop in volume and the negative effect of the appreciation of the real against the euro on the consolidation of the results of operations abroad.
Consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in 3Q22 was R$1.7 billion, up 6% from 3Q21 and 29% higher than 2Q22. The consolidated operating results were positively impacted by price dynamics in all regions, which fully offset the pressure on costs, the slight drop in volume and the negative effect of the exchange rate appreciation on the consolidation of the results of operations abroad. The consolidated EBITDA margin was 23%, an increase of three percentage points compared to 2Q22, and a decrease of three percentage points compared to the same period last year. Leverage, measured by the net debt/adjusted EBITDA ratio, was 1.77x in the third quarter, a reduction of 0.22x compared to 2Q22.
“We improved our operating result, despite a still-challenging macroeconomic situation. Cost inflation—mainly of fuel, freight, energy and inputs—is still present in all countries where Votorantim Cimentos operates. We remain resilient and aligned with our strategy, focused on operational excellence and the competitiveness of our operations,” said Osvaldo Ayres Filho, COO of Votorantim Cimentos.
The company’s global cement sales totaled 10.2 million tonnes in the third quarter of this year, with a slight drop of 1% compared to the 10.4 million tonnes sold in 3Q21. Net income in the quarter was R$604 million, a 44% decrease compared to the same period last year. The third-quarter results were primarily due to higher net financial expenses and income tax in the period.
“We reached the end of the quarter with a solid cash liquidity, positioning the company to meet our financial obligations for the next four years. Leverage remains under control and has declined throughout the year, and the operating margin has recovered over these nine months,” said Bianca Nasser, Global CFO of Votorantim Cimentos.
Performance by region – In Brazil, Votorantim Cimentos’ third-quarter net revenue was R$3.7 billion, an increase of 25% compared to 3Q21. The dynamics of price increases offset the lower sales volume in the period. Infrastructure and real estate projects offset the slowdown in the self-construction sector, balancing the reduction in cement demand in the Brazilian market. Adjusted EBITDA was R$863 million, up 27% compared to the same quarter last year. Price repositioning in the period and growth in adjacent businesses contributed to the recovery of margins throughout the year and partially mitigated pressure from variable costs, mainly fuel and raw materials.
In North America, the company’s third-quarter net revenue was R$2.5 billion, an increase of 9% compared to 3Q21 that was mainly driven by solid market demand after a more severe winter in 2022 and also favorable price dynamics in Canada and the United States. Adjusted EBITDA in the quarter was R$706 million against R$744 million in 3Q21, a 5% decrease explained by the impact of inflation on variable costs and higher maintenance costs.
In Europe, Africa and Asia, Votorantim Cimentos’ third-quarter net revenue increased 25% compared to 3Q21, totaling R$905 million. The results reflect an increase in export volume in Tunisia and Spain, mainly due to the additional volume produced by the Alconera plant, an acquisition completed in October 2021, and to price increases in all countries. These effects mitigated the volume decline in Turkey and Morocco. Adjusted EBITDA was R$177 million in the third quarter, a 17% growth compared to 3Q21. Inflation in fuel and energy prices was partially offset by the management of price pass-throughs in all countries in the region and a non-recurring positive effect of a reversal of 6 million euros of provision for liabilities linked to CO2 credits. The results in the region were also negatively impacted by the depreciation of the euro in the period.
In Latin America, the company’s third-quarter net revenue was R$214 million, down 16% from 3Q21. Adjusted EBITDA was R$39 million, down 37%. The results were mainly due to more challenging dynamics in the Bolivia and Uruguay markets.
Highlights Beyond 3Q22
In October, the company concluded the modernization project for Cementos Artigas, a joint venture between Votorantim Cimentos and Cementos Molins in Uruguay. The project included the relocation of the cement grinding and dispatch operations from the Montevideo grinding unit to the main plant in Minas, located 100 kilometers from the Uruguayan capital. The new production line, which has already started operating, brings gains in industrial efficiency, cost competitiveness and sustainability, in addition to reducing electricity consumption. The modernization project, which began in 2021, was completed ahead of schedule and below budget.
Also in October, Votorantim Cimentos introduced its new corporate branding. The new visual identity seeks to connect the company’s strategic objectives and sustainability commitments with the process of transformation and growth in different segments and activities. In line with the new corporate branding, the company launched new layouts for its cement brands in the Brazilian market: Votoran, Cimento Itaú, Tocantins and Poty.
In early November, Votorantim Cimentos announced the completion of the acquisition of the operations of Heidelberg Materials in southern Spain, which include a modern integrated cement plant located in the city of Malaga, three aggregate mines and 11 concrete plants in the Andalusia region. With the completion of this transaction, Votorantim Cimentos Spain now operates six integrated cement plants with an installed production capacity of 6 million tonnes of cement/year, two cement mills, a mortar plant and several aggregates units and concrete plants in the regions of Andalusia, Canary Islands, Castile and Leon, Extremadura and Galicia.