ROMI S.A. 3Q22 Earnings Release
October 25, 2022
September 30, 2022 | ||||
Share price at 10/24/2022 | Earnings Conference Call broadcast over the web in Portuguese, with | |||
ROMI3 - R$16.51 per share | ||||
simultaneous translation into English | ||||
Market value | October 26, 2022 | |||
11 a.m. (São Paulo) | 3 p.m. (London) | 10 a.m. (New York) | ||||
R$1,331,8 million | ||||
https://us02web.zoom.us/webinar/register/WN_UQPuQVyQSzuYlQ4pvjvufA | ||||
US$253.2 million | ||||
ID Zoom: 820 3245 1919 | ||||
Number of shares | Dial-in number: +55 (11) 4632-2236 | |||
Common: 80,667,314 | ||||
Internationaldial-innumbers: https://us02web.zoom.us/u/kszWE5ZfN | ||||
Total: 80,667,314 | ||||
Free float = 50.8% |
Earnings Release
3rd quarter of 2022
Santa Bárbara d'Oeste - São Paulo, September 30, 2022
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 third quarter of 2022 ("3Q22"). 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 3Q22 was R$92.1M (+37.8% over 3Q21);
Order backlog reaches R$808.1M at the end of 3Q22 (+13.7% over 3Q21)
- Consolidated net operating revenue in 3Q22 reached R$398.7 million, up 8.8% over 3Q21, reflecting the consistent increase in incoming orders observed in recent quarters.
- At the Romi Machiners Unit, net operating revenue increased by 16.9% in 3Q22 compared to 3Q21, due to 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 6.6% in operating profit compared to 3Q21;
- At the Rough and Machined Cast Iron Parts Unit, net operating revenue increased by 27.3% in 3Q22 compared to 3Q21, with the continuity of deliveries of large parts and the recovery of the other segments. Operating margin grew by 6.9 p.p., reflecting the higher production volume and improved operational efficiency;
- In 3Q22, the order backlog at the Burkhardt+Weber Unit reached R$167.9 million, an increase of 16% compared to 3Q21, in euros reached €33.2 million an increase of 44,6% reflecting the gradual resumption of projects that had been suspended due to the COVID-19 pandemic;
- At the end of 3Q22, the Company's order backlog reached R$808.1 million, an increase of 13.7% in comparison to 3Q21, with highlights to the Burkhardt+Weber Machines and Raw and Machined Cast Iron Parts business units;
- ROMI launches ESG Portal, in line with the best market practices ("see ESG section at ROMI").
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Earnings Release
3rd quarter of 2022
Quarterly | Acumulated | ||||||||
R$'000 | 3Q213 | 2Q22 | 3Q22 | Chg. | Chg. | 9S21 | 9S22 | Chg. | |
Revenues Volume | 3Q22/2Q22 | 3Q22/3Q21 | 2022/2021 | ||||||
Romi Machines (units) | 312 | 294 | 355 | 20,7% | 13,8% | 863 | 905 | 4,9% | |
Burkhardt+Weber (units) | 6 | 3 | 2 | -33% | -67% | 11 | 5 | -54,5% | |
Rough and Machined Cast Iron Parts (tons) | 7.819 | 6.519 | 7.294 | 12% | -7% | 20.956 | 19.374 | -7,6% | |
Net Operating Revenue | 366.577 | 372.062 | 398.690 | 7,2% | 8,8% | 940.665 | 1.056.087 | 12,3% | |
Gross margin (%) | 31,3% | 28,2% | 34,3% | 32,4% | 31,0% | ||||
Operating Income (EBIT) | 56.122 | 40.345 | 78.067 | 93,5% | 39,1% | 137.542 | 146.977 | 6,9% | |
Operating margin (%) | 15,3% | 10,8% | 19,6% | 14,6% | 13,9% | ||||
Operating Income (EBIT) - adjusted | 56.122 | 40.345 | 68.603 | 70,0% | 22,2% | 137.542 | 137.513 | 0,0% | |
Operating margin (%) - adjusted | 15,3% | 10,8% | 17,2% | 14,6% | 13,0% | ||||
Net Income | 40.789 | 33.000 | 64.920 | 96,7% | 59,2% | 104.352 | 128.424 | 23,1% | |
Net margin (%) | 11,1% | 8,9% | 16,3% | 11,1% | 12,2% | ||||
Net Income - adjusted | 40.789 | 33.000 | 55.771 | 69,0% | 36,7% | 104.352 | 119.275 | 14,3% | |
Net margin (%) - adjusted | 11,1% | 8,9% | 14,0% | 11,1% | 11,3% | ||||
EBITDA | 66.826 | 52.502 | 92.068 | 75,4% | 37,8% | 168.741 | 184.629 | 9,4% | |
EBITDA margin (%) | 18,2% | 14,1% | 23,1% | 17,9% | 17,5% | ||||
EBITDA - adjusted | 66.826 | 52.502 | 82.604 | 57,3% | 23,6% | 101.915 | 175.165 | 71,9% | |
EBITDA margin (%) - adjusted | 18,2% | 14,1% | 20,7% | 10,8% | 16,6% | ||||
Investments ( 4 ) | 25.696 | 34.262 | 42.418 | 23,8% | 65,1% | 63.414 | 99.775 | 57,3% |
- 9M21: 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.
3Q22 / 9M22: adjusted by the amounts of: (i) EBIT and EBITDA in the amount of R$9,463; and (ii) Profit in the amount of R$9,149, referring to the recognition of the impacts of the Vila Romi Residence project, as described in the section "Vila Romi Residence (real estate project)".
- Of the investments made in 3Q21, 2Q22 and 3Q22, the amounts of R$9.4, R$23.7 and R$16.8 million refer to machines manufactured by the Company that were allocated to the machine rental business, a new solution launched in the third quarter of 2020.
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Earnings Release
3rd quarter of 2022
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. This equipment is sold worldwide 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 energy 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
3rd quarter of 2022
Current Economic Scenario
Year 2022 continued to indicate a favorable environment for investments, as we can see in the business confidence indexes and the use of installed capacity. This recovery in business volume can be noticed in all units, both in businesses in the domestic market and in exports and more recently at the Burkhardt Weber business unit. Although the current level of real interest rates and the prospects indicate its increase and the current exchange rate level represent new challenges to competitiveness of the national industry, the costs and the global logistics availability, as well as the impacts of geopolitical conflicts, continue stimulating the production in Brazil.
In view of the more concrete signs of this resumption , 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 the last quarters. 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) continues to show, in 2022, the recovery that started in 2021, and in recent months this index has stabilized at a level considered very positive for new investments.
Industrial Entrepreneur Confidence Index - ICEI
Source: CNI - ICEI, September 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 Industry (CNI), has shown a constant evolution in 2022, and in June it reached the level of 73%, the highest level for that month since 2015, which continues to stimulate investments.
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Indústrias Romi SA published this content on 25 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 October 2022 22:17:01 UTC.
