Investing.com
Published Feb 07, 2024 20:56
Figures are expressed in millions of Mexican pesos.
HIGHLIGHTS | FULL YEAR 2023 vs 2022
- Product sales decreased 6.6% while service sales, which represent 5.1% of total sales, increased 42.6% to Ps. 625 million. This was the result of the expansion of bebbia, good traction of the water treatment and recycling plants business in
HIGHLIGHTS | OTHER 2023 MILESTONES
AGUA
4Q | 12M | ||||||
2023 | 2022 | %Δ | 2023 | 2022 | %Δ | ||
Income Statement | 3,376 | 3,125 | 8.0 % | 12,146 | 12,774 | (4.9 %) | |
%gross margin | 44.5 % | 45.0 % | (50) bps | 45.5 % | 42.6 % | 290 bps | |
Operating Income | 352 | 452 | (22.0 %) | 1,559 | 1,584 | (1.6 %) | |
% margin | 10.4 % | 14.5 % | (410) bps | 12.8 % | 12.4 % | 40 bps | |
EBITDA[1] | 554 | 550 | 0.7 % | 2,131 | 1,982 | 7.5 % | |
% margin | 16.4 % | 17.6 % | (120) bps | 17.5 % | 15.5 % | 200 bps | |
Net Income | 39 | 405 | (90.5 %) | 280 | 791 | (64.6 %) | |
% margin | 1.1 % | 13.0 % | NM | 2.3 % | 6.2 % | (390) bps | |
Balance | Cash and Cash equivalents | 566 | 673 | (15.9 %) | |||
Debt with cost | 4,028 | 4,009 | 0.5 % | ||||
Net Debt | 3,462 | 3,337 | 3.8 % | ||||
Cumulative Cash Flow | Operating Cash Flow | 1,290 | 998 | 29.2 % | |||
CapEx | 609 | 659 | (7.6 %) | ||||
Working Capital | (168) | (678) | (75.3 %) | ||||
Others | Net Debt / EBITDA | 1.6 x | 1.7 x | (0.1) x | |||
ROIC | 14.9 % | 14.1 % | 80 bps | ||||
Cash Conversion Cycle | 42 | 71 | (29) days |
RELEVANT FIGURES Žª JANUARY - DECEMBER 2023
Employees | 3,483 |
Sales points | +32,000 |
Government transactions | 3.3 % |
e-commerce clients | +6,700 |
Bebbia units | +110,000 |
20L water jugs saved | 26.9 million |
MESSAGE | CEO
Dear Investors,
The fourth quarter has helped us to validate the relevance of decentralized solutions as a vital complement to public infrastructure, providing access to water and sanitation in the amount and with the quality that the population currently requires.
Toward the end of the year, the Cutzamala system began to have difficulties in supplying water to the Valley of
During the year, despite the impact on products sales growth due to the strength of the Mexican peso, we were able to maintain the leadership of our brands and continue our strong momentum in the expansion of our services businesses. We focused our talent on pursuing profitability, as well as improving user experience and providing solutions that support population adaptation to climate change, as well as mitigating its effects.
Likewise, the management of working capital and prudence in cash management throughout the year, even considering the impact on cash flow generation by exchange rates and inflation, helped us maintain a healthy leverage level and increase interest coverage on debt.
In terms of sustainability, I would like to highlight that, in addition to receiving several recognitions, we managed to reduce CO2e Scope 1 and 2 emissions by 12% at the Group level, while 24% of our processed resins came from recycled material. Additionally, in response to the crisis in the state of
Looking ahead to 2024, we will take firm steps to progress in our key initiatives, including the digitization of our operations, supported by the strategic collaboration with Google Cloud and RISE with SAP. Additionally, we will focus on the evolution of our Programmatic M&A strategy, the implementation of the new manufacturing technology for storage solutions in the remaining plants in
I thank you for another year of loyalty and trust in Rotoplas. Rest assured that we remain steadfast in our commitment to fostering a culture of sustainability around water for the benefit of present and future generations, while remaining true to our mission.
INVITATION | EARNINGS CALL
Speakers:
Link: https://rotoplas.zoom.us/webinar/register/WN_aIfIr7cPTwSKva4Dp7vZmA#/registration
GUIDANCE | 2023-2025
Metrics | 2023 Revised Guidance | 2023 Results | 2024 Guidance | |
Guidance | Increase in net sales | (8 %) | (5 %) | > 10% |
EBITDA Margin | 17.0% - 18.0% | 17.5 % | 18.0% “ 19.0% | |
Net Debt / EBITDA | < 2.0x | 1.6x | < 2.0x | |
ROIC | ROIC = WACC + 350bps | ROIC = WACC + 260bps | ROIC =WACC + 200bps |
EBITDA | BY REGION AND SOLUTION
4Q | 12M | ||||||
2023 | 2022 | %Δ | 2023 | 2022 | %Δ | ||
Sales | 1,473 | 1,549 | (4.9 %) | 6,001 | 6,374 | (5.9 %) | |
EBITDA | 314 | 369 | (14.9 %) | 1,537 | 1,302 | 18.1 % | |
% Margin | 21.3 % | 23.8 % | (250) bps | 25.6 % | 20.4 % | 520 bps | |
Sales | 1,394 | 916 | 52.1 % | 3,903 | 3,698 | 5.6 % | |
EBITDA | 242 | 123 | 96.6 % | 628 | 570 | 10.2 % | |
% Margin | 17.4 % | 13.4 % | 400 bps | 16.1 % | 15.4 % | 70 bps | |
Sales | 239 | 315 | (24.0 %) | 1,101 | 1,402 | (21.5 %) | |
EBITDA | (39) | (20) | 97.6 % | (191) | (64) | NM | |
% Margin | (16.3 %) | (6.3 %) | NM | (17.4 %) | (4.5 %) | (1,290) bps | |
Others | Sales | 271 | 344 | (21.4 %) | 1,141 | 1,300 | (12.3 %) |
EBITDA | 37 | 78 | (52.8 %) | 158 | 174 | (9.4 %) | |
% Margin | 13.5 % | 22.6 % | (910) bps | 13.8 % | 13.4 % | 40 bps | |
4Q | 12M | ||||||
2023 | 2022 | %Δ | 2023 | 2022 | %Δ | ||
Products | Sales | 3,209 | 2,999 | 7.0 % | 11,521 | 12,336 | (6.6 %) |
EBITDA | 595 | 616 | (3.4 %) | 2,385 | 2,281 | 4.6 % | |
Margin | 18.5 % | 20.5 % | (200) bps | 20.7 % | 18.5 % | 220 bps | |
Services | Sales | 167 | 127 | 32.1 % | 625 | 438 | 42.6 % |
EBITDA | (41) | (66) | (37.4 %) | (254) | (299) | (15.0 %) | |
% Margin | (24.6 %) | (52.0 %) | NM | (40.7 %) | (68.2 %) | NM |
Net sales contracted 4.9% during the quarter and 5.9% on a cumulative basis. This as a result of a very high comparative base in products related to the generalized drought in the country during 2022 and more specifically in the northeast during the second and third quarters of the previous year.
During the last quarter, the
Services sales continued to grow double-digit for the fifth consecutive quarter, driven by the expansion of bebbia and Rotoplas
During the quarter, EBITDA margin contracted 250 bps to 21.3%, impacted by the "Ofertas Azules" campaign. However, on a cumulative basis, the margin expanded 520 basis points to 25.6%, driven by record margins in products and an improvement in the negative EBITDA in services.
In
Our strategy remains focused on maintaining profitability, improving manufacturing productivity and increasing market share.
For 4Q23, the EBITDA margin expanded 400 basis points to 17.4%, as a result of improved cost and expense absorption in the period. On a cumulative basis, the EBITDA margin closed at 16.1%, an expansion of 70 basis points, driven mainly by growth, as well as strict expense control throughout the year.
NOTE: Adoption of IAS 29, Financial Reporting in Hyperinflationary Economies.
Due to
International Accounting Standard (IAS) 29, Financial Information in Hyperinflationary Economies establishes that the results of operations in
As a result, in 2023 the impact of the restatement results in an increase of Ps. 325 million in interest expense, negatively impacting the Comprehensive Financing Result. After considering taxes, the impact on net income amounts to Ps. 125 million.
Fourth quarter net sales decreased 24.0% in Mexican pesos and 13.8% in US dollars. On a cumulative basis, sales decreased 21.5% in pesos and 10.6% in local currency.
Demand for water storage solutions was affected by an unusually wet season in states such as
In addition, there was a normalization in demand for storage solutions following the pandemic years and the surge experienced in certain crops within the agricultural sector.
EBITDA was negative Ps. 39 million in the quarter and negative Ps. 191 million for the full year, impacted by the reduction in demand and costs related to the development of the septic business, as well as to the implementation of the new e-commerce platform.
Other Countries
Net sales in other countries (
In
In
In
As a result of the decrease in sales and lower absorption of costs and expenses, the EBITDA margin for the quarter contracted 910 bps to reach 13.5%. However, the implementation of a rigorous expense control to adjust expenses to sales levels, together with the pricing strategy, allowed the cumulative EBITDA margin to increase by 40 bps to 13.8%.
ANALYSIS | COSTS AND EXPENSES
Gross Profit
Gross profit increased 6.9% in the quarter and 1.4% in the year. For 4Q23, the margin contracted 50 bps to close at 44.5%, due to the launch of promotional campaigns. For the year, the margin expanded 290 bps to 45.5%. This expansion results from the commercial strategy focused on protecting profitability, as well as a benefit in raw material costs.
Operating Income
Operating income for the quarter closed at Ps. 352 million, with a margin of 10.4%, a 410 bps contraction due to higher operating expenses. For the full year, operating income decreased 1.6%, with a margin of 12.8%, 40 bps higher than in the same period of 2022. This expansion is due to the improvement in gross margin.
Comprehensive Financing result
The comprehensive financing result for the fourth quarter resulted in an expense of Ps. 311 million compared to a Ps. 181 million expense in the fourth quarter of 2022. This includes Ps. 94 million for interest on debt, commissions and leases, a Ps. 97 million benefit from the valuation of financial instruments, and Ps. 314 million for inflationary effects in
On a cumulative basis, the comprehensive financing result was an expense of Ps. 1,251 million compared to a Ps. 768 million in 2022, an increase of 62.9%. This includes Ps. 384 million for interest on debt, commissions and leases, Ps. 288 million for the valuation of the foreign exchange hedge and Ps. 579 million for inflationary effects in
Net Result
Net income for the fourth quarter decreased 90.5% compared to the same period of the previous year, closing at Ps. 39 million due to higher operating and financial expenses, which were particularly affected by the inflationary environment in
On a cumulative basis, net income decreased 64.6% to Ps. 280 million, compared to Ps. 791 million in 2022. This decrease is due to an increase in financial expenses related to a Ps. 288 million impact from the valuation of MXN/USD exchange rate hedges, as well as the inflationary effect in
CapEx
12M | |||||
2023 | % | 2022 | % | %Δ | |
548 | 90 % | 524 | 80 % | 4.5 % | |
44 | 7 % | 52 | 8 % | (16.6 %) | |
9 | 1 % | 36 | 6 % | (75.8 %) | |
Others | 8 | 1 % | 46 | 7 % | (82.1 %) |
Total | 609 | 100 % | 659 | 100 % | (7.6 %) |
Capital investments represented 5.0% of sales in 2023, a 7.6% reduction compared to the amount allocated in the same period of last year.
Capital investments include:
ANALYSIS | BALANCE SHEET
Cash Conversion Cycle (Days)
12M | |||
2023 | 2022 | Δ days | |
Inventory Days | 55 | 86 | (31) |
Accounts Receivable Days | 57 | 62 | (5) |
Accounts Payable Days | 70 | 77 | (7) |
Cash Conversion Cycle | 42 | 71 | (29) |
Inventory days: Quarterly Average of Inventories / (Cost of Sales 3M (NYSE:MMM) / 90)
Days Past Due: Quarterly Average of Customers and Other Accounts Receivable / (3M Sales / 90)
Supplier Days: Quarterly Average of Suppliers and Other Short-Term Accounts Payable / (Cost of Sales 3M / 90)
The cash conversion cycle was optimized by 29 days, as a result of improved working capital management, as well as the restatement of the balance sheet in
Debt
12M | |||
2023 | 2022 | %Δ | |
Total Debt | 4,028 | 4,009 | 0.5 % |
Short-Term Debt | 29 | 11 | NM |
Long-term debt | 3,999 | 3,999 | 0.0 % |
Cash and Cash Equivalents | 566 | 673 | (15.9 %) |
Net Debt | 3,462 | 3,337 | 3.8 % |
Debt Maturity Profile
Total debt amounts to Ps.
Currency | Amount in MXN | Rate | Maturity | |
AGUA Bond 17-2X | Mexican pesos | 4,011 | Fixed 8.65% | |
Citi Working Capital Loan | US dollars | 17 | SOFR + 2.55% |
FINANCIAL RATIOS
12M | |||
2023 | 2022 | %Δ | |
Net Debt / EBITDA | 1.6 x | 1.7 x | (0.1) x |
Interest coverage | 9.2 x | 8.5 x | 7.8 % |
Total Liabilities / Stockholders' Equity | 1.3 x | 0.9 x | 0.3 x |
Net Income per Share | 0.58 | 1.63 | (64.6 %) |
EBITDA L™ / net interest L™
Net income between 486.2 million shares, expressed in Mexican pesos.
During 2023, the Company maintained a stable leverage level in line with its debt policy, which sets a maximum limit of 2.0 times Net Debt to EBITDA ratio.
ROIC / Cost of Capital
4Q17 | 4Q18 | 4Q19 | 4Q20 | 4Q21 | 4Q22 | 4Q23 | |
ROIC | 7.3 % | 7.3 % | 9.8 % | 12.4 % | 14.5 % | 14.1 % | 14.9 % |
WACC | 10.5 % | 12.5 % | 12.9 % | 10.0 % | 12.1 % | 12.7 % | 12.3 % |
ROIC: NOPAT L™/ Invested Capital L™, monthly average.
Invested capital: total assets - cash and cash equivalents - short-term liabilities.
ROIC excludes Flow program execution expenses from 2Q20 to 4Q21 as they are non-recurring.
The ROIC reached 14.9%, which represents an 80 basis points increase compared to the same period in 2022. Additionally, it was 260 bps above the cost of capital.
Financial derivates
The use of derivative financial instruments is governed by the recommendations and policies issued by the Board of Directors and supervised by the Audit Committee, which provides guidelines on the management of exchange risk, interest rate risk, credit risk, the use of derivative and non-derivative financial instruments, and the investment of excess liquidity.
As of
Market Value | ||
Type of Instrument | MXN/USD exchange rate forward | Ps. (18.3) million |
ESG | ENVIRONMENTAL, SOCIAL AND GOVERNANCE
During the year, the following progress within the Sustainable initiatives stands out:
2023 Target | 2023 Results | 2025 Target | |
Tier-1 suppliers evaluated with ESG Criteria | 45 % | 50 % | 100 % |
Customer Satisfaction (NPS) | 73 | 76 | 80 |
CO2 intensity “ scopes 1 and 2 per ton of processed resin | 0.45 | 0.43 | 0.41 |
m3 of water purified by our solutions | 656K | 759K | 1.7MM |
People with access to water and sanitation (cumulative) | 788K | 800K | 1MM |
Women in the workforce | 27 % | 24 % | 30 % |
AGUA | PERFORMANCE AND ANALYST COVERAGE
December | ||||
2023 | 2022 | %Δ | ||
Agua | Closing price | 30.06 | 31.49 | (4.5 %) |
P/BV | 2.4 x | 2.4 x | 0.0 x | |
EV/EBITDA | 8.5 x | 9.4 x | (0.9) x |
Source: SiBolsa
Treasury shares:
As of
Analyst Coverage
As of
Recommendation | TP | ||
BTGPactual | FelipeBarragan | Buy | |
felipebarragan@btgpactualcom | |||
GBM | Buy | ||
rcarrillo@gbmcom | |||
SIGNUM | Buy | ||
alainjaimes@signumresearchcom | |||
Miranda Research | MartÃnLara /MarimarTorreblanca | Buy | |
martin.lara@miranda-grcom marimartorreblanca@miranda-partnerscom | |||
Apalache | Buy | ||
jorgeplacido@apalachemx | |||
Consensus | Buy |
FINANCIAL STATEMENTS | Balance Sheet, Income Statement and Cash Flow
Income Statement
(Unaudited figures, millions of Mexican pesos)
4Q | 12M | ||||||
2023 | 2022 | %Δ | 2023 | 2022 | %Δ | ||
Income Statement | 3,376 | 3,125 | 8.0 % | 12,146 | 12,774 | (4.9 %) | |
COGS | 1,875 | 1,720 | 9.0 % | 6,625 | 7,331 | (9.6 %) | |
Gross Profit | 1,502 | 1,405 | 6.9 % | 5,521 | 5,444 | 1.4 % | |
% margin | 44.5 % | 45.0 % | (50) bps | 45.5 % | 42.6 % | 290 bps | |
Operating Expenses | 1,149 | 953 | 20.6 % | 3,962 | 3,859 | 2.7 % | |
Operating Income | 352 | 452 | (22.0 %) | 1,559 | 1,584 | (1.6 %) | |
% margin | 10.4 % | 14.5 % | (410) bps | 12.8 % | 12.4 % | 40 bps | |
Comp. Financing result | (311) | (181) | 71.5 % | (1,251) | (768) | 62.9 % | |
Financial Income | 48 | 105 | (54.8 %) | 155 | 198 | (21.8 %) | |
Financial Expenses | (359) | (287) | 25.1 % | (1,406) | (966) | 45.5 % | |
Income before taxes | 41 | 271 | (85.0 %) | 307 | 817 | (62.5 %) | |
Taxes | 2 | (134) | NM | 27 | 26 | 2.0 % | |
Net Result | 39 | 405 | (90.5 %) | 280 | 791 | (64.6 %) | |
% margin | 1.1 % | 13.0 % | NM | 2.3 % | 6.2 % | (390) bps | |
EBITDA[2] | 554 | 550 | 0.7 % | 2,131 | 1,982 | 7.5 % | |
% margin | 16.4 % | 17.6 % | (120) bps | 17.5 % | 15.5 % | 200 bps |
Balance Sheet (Unaudited figures, millions of Mexican pesos)
12M | ||||
2023 | 2022 | %Δ | ||
Balance Sheet | Cash and Cash Equivalents | 566 | 673 | (15.9 %) |
Accounts Receivable | 1,765 | 2,029 | (20.0 %) | |
Inventory | 1,006 | 1,524 | (34.0 %) | |
Other Current Assets | 301 | 297 | (12.4 %) | |
Current Assets | 3,638 | 4,522 | (22.9 %) | |
Property, Plant and Equipment - Net | 4,123 | 3,272 | 26.0 % | |
Other Long-Term Assets | 4,851 | 4,579 | 5.9 % | |
Total Assets | 12,611 | 12,567 | 0.4 % | |
Short-Term Debt | 29 | 11 | NM | |
Suppliers | 816 | 762 | 7.0 % | |
Other Accounts Payable | 854 | 732 | 16.8 % | |
Short-Term Liabilities | 1,699 | 1,505 | 12.9 % | |
Long-term debt with cost | 3,999 | 3,999 | 0.0 % | |
Other Long-Term Liabilities | 803 | 605 | 32.9 % | |
Total Liabilities | 6,501 | 6,108 | 6.4 % | |
Total Stockholders' Equity | 6,110 | 6,459 | (5.4 %) | |
Total Liabilities + Stockholders' Equity | 12,611 | 12,567 | 0.4 % |
Cash Flow (Unaudited figures, millions of Mexican pesos)
12M | ||||
2023 | 2022 | %Δ | ||
Cash Flow | EBIT | 1,559 | 1,584 | (1.6 %) |
Depreciation and Amortization | 572 | 397 | 43.9 % | |
Inventories | (54) | (149) | (63.8 %) | |
Accounts Receivable | (320) | (589) | (45.6 %) | |
Accounts Payable | 207 | 60 | NM | |
Other current items | (533) | (153) | NM | |
Taxes | (140) | (153) | (8.0 %) | |
Cash flow from Operations | 1,290 | 998 | 12.1 % | |
CapEx | (609) | (659) | (7.6 %) | |
Other investment activities | 133 | 58 | NM | |
Cash flow from Investments | (476) | (601) | (20.9 %) | |
Dividends | (235) | (215) | 9.3 % | |
Repurchase fund | (74) | (302) | (75.3 %) | |
Short- and long-term debt | 17 | 0 | 0.0 % | |
Interests and leasing | (549) | (556) | (1.3 %) | |
Cash flow from Financing | (841) | (1,073) | (21.6 %) | |
Change in Cash | (27) | (677) | (94.8 %) | |
Exchange rate effect on cash | (80) | (279) | (71.5 %) | |
Net Change in Cash | (107) | (956) | (88.8 %) | |
Initial Cash Balance | 673 | 1,629 | (58.7 %) | |
Final Cash Balance | 566 | 673 | (15.9 %) |
PRESS RELEASES | 4Q23
For more information, please consult the relevant events section of our website: https://rotoplas.com/investors/press-releases/
CONTACT DETAILS | INVESTOR RELATIONS
mfernandez@rotoplas.com
agua@rotoplas.com
MarÃa Fernanda Escobar
mfescobar@rotoplas.com
This press release may include certain forward-looking statements relating to Grupo Rotoplas S.A.B. de C.V. It relies on considerations of the Grupo Rotoplas S.A.B. de C.V. management which are based on current and known information; however, the expectations could vary due to facts, circumstances, and events beyond the control of Grupo Rotoplas, S.A.B. de C.V.
Grupo Rotoplas S.A.B. de C.V. is America's leading provider of water solutions, including products and services for storing, piping, improving, treating, and recycling water. With over 40 years of experience in the industry and 18 plants throughout the
C.P. 11040, Ciudad de México
T. +52 (55) 5201 5000
www.rotoplas.com
[1] EBITDA considers donations of Ps. 12.3 million in 4Q23 and Ps. 19.2 million in 2023. There were no donations in 2022.
[2] EBITDA considers donations of Ps. 12.3 million in 4Q23 and Ps. 19.2 million in 2023. There were no donations in 2022.
Logo - http://mma.prnewswire.com/media/386887/Grupo_Rotoplas_BMV_Logo.jpg
View original content:https://www.prnewswire.com/news-releases/rotoplas-fourth-quarter-2023-results-302056748.html
SOURCE Grupo Rotoplas S.A.B. de C.V.
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.