ROMI S.A. 4Q21 Earnings Release
February 1, 2022
December 31, 2021
Share price at 1/28/2022 ROMI3 - R$15.80 per share
Market value
R$1,158 million
US$214.8 million
Number of shares Common: 73,333,922 Total: 73,333,922
Free float = 50.8%
Earnings Conference Call broadcast over the web in Portuguese, with simultaneous translation into English February 2, 2022
11 a.m. (São Paulo) | 2 p.m. (London) | 9 a.m. (New York)
https://us02web.zoom.us/webinar/register/WN_t-QUbnH0TruQpfGnuZ8VDgID Zoom: 853 1635 2862
Dial-in number: +55 (11) 4680-6788
Dial-innumbers at https://us02web.zoom.us/u/kszWE5ZfN
Earnings Release 4th quarter of 2021
Santa Bárbara d'Oeste - São Paulo, December 31, 2021
Indústrias Romi S.A. ("Romi" or "Company") (B3: ROMI3), domestic market leader in the Machine Tools and Plastic Processing Machines markets, as well as an important producer of Rough and Machined Cast Iron Parts, announces its results for the fourth quarter of 2021 ("4Q21"). Except where otherwise stated, the Company's operating and financial information is presented on a consolidated basis, in accordance with the International Financial Reporting Standards (IFRS).
Statements contained in this release related to Romi's business outlook, projections of operating and financial results and references to the Company's growth potential are mere forecasts and have been based on Management's expectations regarding its future performance. These expectations are highly dependent upon market behavior, the economic situation in Brazil, the industry and international markets. Therefore, they are subject to changes.
Investor Relations Contact
Fábio B. Taiar
Investor Relations Officer +55 (19) 3455-9418dri@romi.com
Highlights
EBITDA in 4Q21 was R$85.2M (+22.7% over 4Q20);
Incoming orders of R$542.1M in 4Q21 (+39.0% over 4Q20);
Order backlog reaches R$795.3M at the end of 4Q21 (+55.9% over 4Q20)
- Consolidated net operating revenue for 4Q21 reached R$442.8 million, an increase of 22.8% compared to 4Q20. With the increase in revenue and the effective control over costs and expenses, EBITDA in 4Q21 posted a growth of 22.7% compared to 4Q20;
- At the Romi Machines Unit, net operating revenue increased by 28.0% in 4Q21 compared to 4Q20, due to the consolidation of success of the new product lines and the resumption of orders in the domestic and foreign markets; The increase in revenue, coupled with an effective control over operating expenses, resulted in an increase of 37.3% in operating profit compared to 4Q20;
- In 4Q21, incoming orders at the Romi Machines Unit increased by 3.6 p.p. compared to 4T20 and increased by 45.3% in 2021 compared to 2020, reflecting the favorable environment for investments, the technology in our products and the new business alternatives, such as the machine rental business;
- In 4Q21, incoming orders at the Rough and Machined Cast Iron Parts Unit increased by 209.9% compared to 4Q20, reflecting the continuity of orders for large parts placed by customers from the energy industry and the recovery of all the other industrial segments;
- In 2021, incoming orders at the Burkhardt+Weber Unit reached EUR28.3 million, an increase of 41.6% compared to 2020, reflecting the resumption of projects that had been suspended due to the COVID-19 pandemic;
- At the end of 4Q21, the Company's order backlog reached R$795.3 million, an increase of 55.9% in comparison to 4Q20, mainly at the Romi Machines and Rough and Machined Cast Iron Parts business units;
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Earnings Release 4th quarter of 2021
Quarterly | Acumulated | |||||||||||||
R$'000 | 4Q20 | 1 | 3Q21 | 3 | 4Q21 | Var. | Var. | 2020 | 2 | 2021 | 3 | Var. | ||
Revenues Volume | 4Q21/3Q21 | 4Q21/4Q20 | 2021/2020 | |||||||||||
Romi Machines (units) | 329 | 312 | 338 | 8,3% | 2,7% | 860 | 1.201 | 39,7% | ||||||
Burkhardt+Weber (units) | 7 | 6 | 7 | 17% | 0% | 17 | 18 | 5,9% | ||||||
Rough and Machined Cast Iron Parts (tons) | 6.528 | 7.819 | 6.089 | -22% | -7% | 21.943 | 27.045 | 23,3% | ||||||
Net Operating Revenue | 360.643 | 366.577 | 442.834 | 20,8% | 22,8% | 973.150 | 1.383.499 | 42,2% | ||||||
Gross margin (%) | 32,2% | 31,3% | 32,0% | 30,7% | 32,3% | |||||||||
Operating Income (EBIT) | 61.007 | 56.122 | 74.009 | 31,9% | 21,3% | 106.868 | 211.548 | 98,0% | ||||||
Operating margin (%) | 16,9% | 15,3% | 16,7% | 11,0% | 15,3% | |||||||||
Operating Income (EBIT) - adjusted | 59.336 | 56.122 | 74.009 | 31,9% | 24,7% | 106.152 | 211.548 | 99,3% | ||||||
Operating margin (%) - adjusted | 16,5% | 15,3% | 16,7% | 10,9% | 15,3% | |||||||||
Net Income | 86.406 | 85.850 | 54.739 | -36,2% | -36,6% | 174.699 | 204.148 | 16,9% | ||||||
Net margin (%) | 24,0% | 23,4% | 12,4% | 18,0% | 14,8% | |||||||||
Net Income - adjusted | 48.974 | 40.789 | 54.739 | 34,2% | 11,8% | 101.323 | 159.091 | 57,0% | ||||||
Net margin (%) - adjusted | 13,6% | 11,1% | 12,4% | 10,4% | 11,5% | |||||||||
EBITDA | 71.115 | 66.826 | 85.183 | 27,5% | 19,8% | 143.685 | 253.924 | 76,7% | ||||||
EBITDA margin (%) | 19,7% | 18,2% | 19,2% | 14,8% | 18,4% | |||||||||
EBITDA - adjusted | 69.444 | 66.826 | 85.183 | 27,5% | 22,7% | 142.969 | 253.924 | 77,6% | ||||||
EBITDA margin (%) - adjusted | 19,3% | 18,2% | 19,2% | 14,7% | 18,4% | |||||||||
Investments ( | 4 | ) | 15.861 | 25.696 | 36.542 | 42,2% | 130,4% | 44.068 | 99.815 | 126,5% | ||||
- 4Q20: The Company recognized in the financial statements for 4Q20 the effects of the favorable final decision in the tax proceeding filed against Eletrobrás, which impacted the result for the quarter as follows: (i) EBIT/EBITDA: increased by R$1.7 million due to the recognition of the gain relating to the principal amount, reduced by expenses with attorneys' fees, under "Other operating income (expenses), net"; (ii) finance income (costs): increased by R$37.5 million due to the monetary adjustment of the original amount of the credits; and (iii) profit for the period: increased due to the impact of the net gain of R$38.4 million, already considering the effects of income tax and social contribution on the gain, which were reduced with the use of the interest on capital proposed in December 2020, as per the Notice to Shareholders dated December 8, 2020.
- 2020: The Company recognized in the financial statements for 4Q20 and 1Q20 the effects of the favorable final decision in the tax proceeding ("Plano Verão" and "Eletrobrás"), which impacted the result for the quarter as follows: (i) EBIT/EBITDA: increased by R$0.7 million due to the recognition of the gain relating to the principal amount of the Eletrobrás proceeding, reduced by expenses with attorneys' fees, under "Other operating income (expenses), net";(ii) finance income (costs): increased by R$62.6 million due to the monetary adjustment of the original amount of the credits; (iii) income tax and social contribution: increased by R$10.8 million, relating to the original amount of the credits from Plano Verão; and (iv) profit for the period: increased due to the impact of the net gain of R$73.4 million, already considering the effects of income tax and social contribution on the gain, which were reduced with the use of the interest on capital proposed in April and December 2020, as per the Notices to Shareholders dated March 17, 2020 and December 8, 2020.
- 3Q21: On March 20, 2019, the Company filed for a writ of mandamus in order to recover taxes that it believes were unduly paid in the last five years, since IRPJ (corporate income tax) and CSLL (social contribution on net income) were not levied on the amounts related to monetary adjustment and late payment interest on the refund of tax credits. This subject was submitted to the analysis of general repercussion on September 24, 2021 when, judging extraordinary appeal 1.063.187, the Supreme Federal Court (STF), by unanimous decision, ruled on the non-levy of IRPJ and CSLL on the amounts related to monetary adjustment and interest on the refund of tax credits, as transcribed below: "The levy of IRPJ and CSLL on the amounts related to the Selic rate received due to claim for refund of undue payment is unconstitutional". The effects of the acknowledgment represented the following impacts on the statements of income: (i) finance income: R$2.1 million; and (ii) Income Tax and social contribution on income: R$42.9 million.
EBITDA = Earnings before interest, taxes, depreciation and amortization.
- Of the investments made in 4Q20, 3Q21, 4Q21, 2021 and 2020, the amounts of R$8.6 million, R$9.4 million, R$10.2 million, R$38.9 million and R$22.3 million refer to machines manufactured by the Company that were allocated to the machinery rental business, a new solution launched in 3Q20.
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Earnings Release 4th quarter of 2021
Corporate Profile
Romi, founded in 1930, is the leader in the Brazilian industrial machinery and equipment market, and an important manufacturer of rough and machined cast iron parts.
The Company is listed on B3's "New Market", which is reserved for companies with a higher level of corporate governance. Romi manufactures machine tools (Conventional Lathes, Computerized Numerical Control (CNC) Lathes, Lathing Centers, Machining Centers, Vertical and Horizontal Heavy and Extra-Heavy Lathes and Drilling Mills), Plastic Injection or Blow Molding Machines and ductile or CDI gray cast iron parts, either in raw or machined form. The Company's cutting-edge products and services, which feature Industry
4.0 technologies, enable the smart use of the data generated, whether through built-in artificial intelligence or through the transfer of big data over the networks (connectivity) to a central analysis site. The Company's equipment is sold all globally and used by a number of industrial segments, such as the agricultural machinery, capital goods, consumer goods, packaging, tooling, hydraulic equipment, sanitation, automotive and wind power industries, among many others.
The Company has thirteen manufacturing units, four of which for final assembly of industrial machinery, two foundries, four units for machining of mechanical components, two units for manufacture of steel sheet components, and a unit for assembly of electronic panels. Of these, eleven are located in Brazil and two in Germany. The Company has an installed production capacity of approximately 2,900 industrial machines and 50,000 thousand metric tons of castings per year.
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Earnings Release 4th quarter of 2021
Current Economic Scenario
2021 ended indicating the continuity of a favorable environment for investments, as started in mid-
2020. This important recovery in business volume can be noticed in all units, both in businesses in the domestic market and in exports and at the Burkhardt Weber business unit. Although the current level of real interest rates and the prospects indicate its increase, the current exchange rate level and the costs and global logistics availability continue to encourage the national industry and the country in general to allocate a greater portion of production to Brazil, as well as to seek greater productivity and preservation of competitiveness. In view of the more concrete signs of this resumption that took place in 2020, the Company prepared itself, especially in relation to orders for raw materials and components along the supply chain, which have allowed us to serve customers in an appropriate and competitive period. Romi is prepared to continue to support its customers by providing high-technology products, within deadlines suitable to the market's needs.
In the foreign market we have also noted a recovery of machine orders, not only for Romi Machines, but also for BW Machines, the latter with relevant orders placed in 2021. These orders reflect the economic recovery and, consequently, the growing volume of opportunities both in the Asian continent and in Europe.
The Industrial Entrepreneur Confidence Index (ICEI) also shows a strong recovery of confidence throughout 2021, and in recent months this index remained stable at a level considered highly favorable for new investments.
Industrial Entrepreneur Confidence Index - ICEI
Source: CNI - ICEI, January 2022
Having suffered the impact of the pandemic, the Installed Capacity Utilization (UCI) index of the domestic industry in general, released by the National Confederation of Industries (CNI), returned to its normal levels in August 2020, and remains at levels favorable to investments.
Average Installed Capacity Utilization (UCI)
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Disclaimer
Indústrias Romi SA published this content on 01 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 February 2022 14:49:06 UTC.
