Rotoplas: Fourth Quarter 2024 Results

PR Newswire

MEXICO CITY, Feb. 6, 2025

MEXICO CITY, Feb. 6, 2025 /PRNewswire/ -- Grupo Rotoplas S.A.B. de C.V. (BMV: AGUA*) ("Rotoplas", "the Company"), America's leading company in water solutions, reports its unaudited fourth quarter 2024 results. The information has been prepared in accordance with the International Financial Reporting Standards (IFRS).

Figures are expressed in millions of Mexican pesos.

HIGHLIGHTS | 4Q24 vs 4Q23

   -- Net sales closed at Ps. 2,723 million, 19.3% lower than 4Q23, due to 
      weaker performance in Argentina caused by the macroeconomic situation, 
      which could not be offset by growth in other countries. Excluding 
      Argentina, net sales would have increased by 7.5%. 
 
          -- Product sales decreased by 22.7%, primarily impacted by 
             Argentina's economic recession, resulting in lower sales volumes. 
             Excluding Argentina, product sales would have grown by 4.0%. 
 
          -- Service sales increased by 45.6%, driven by the strong acceptance 
             of bebbia SMART and the sustained growth of its user base, which 
             now exceeds 133,000 subscribers. 
 
   -- Gross profit was Ps. 1,112 million, 27.5% lower than in 4Q23. The gross 
      margin declined by 460 bps to 40.8%, due to lower sales, which affected 
      fixed cost absorption. 
 
   -- Operating income reached Ps. 64 million, an 83.4% decrease compared to 
      4Q23, impacted by a lower gross margin and expenses related to digital 
      initiatives aimed at empowering users with information on water quantity 
      and quality. However, cost control measures are beginning to show results, 
      excluding extraordinary severance expenses from the organizational 
      restructuring, expenses decreased by 8.3% compared to the previous 
      quarter. 
 
   -- EBITDA closed at Ps. 239 million, 56.8% lower than in 4Q23. The EBITDA 
      margin was 8.8% compared to 16.4% in 4Q23. Excluding Ps. 54 million in 
      severance payments, the EBITDA margin would have been 10.8%. 
 
   -- Net result for the quarter posted a loss of Ps. 122 million, compared to 
      a profit of Ps. 71 million in 4Q23. This result is attributed to the 
      lower sales volume, which impacted operating income. 

HIGHLIGHTS |CUMULATIVE 2024 vs 2023

   -- Net sales reached Ps. 11,201 million, 7.8% lower than the previous year. 
      This result mainly reflects the impact of Argentina's economic situation. 
      Excluding Argentina, net sales would have increased by 7.8%. 
 
          -- Product sales decreased by 10.6%, mainly affected by Argentina, as 
             well as slow performance in the United States due to lower demand 
             for storage solutions amid wet weather conditions and weakness in 
             the agricultural sector. Excluding Argentina, product sales would 
             have grown by 4.8%. 
 
          -- Service sales grew by 43.6%, representing 8.0% of total sales, 
             driven by the strong expansion of bebbia, as well as positive 
             momentum in RSA and the growth of rieggo. 
 
   -- Gross profit stood at Ps. 5,033 million, representing a 9.4% decrease. 
      The gross margin closed at 44.9%,contracting by 80 basis points due to 
      lower absorption of fixed costs caused by the decline in sales. 
 
   -- Operating income reached Ps. 881 million, 44.7% lower than in 2023. This 
      decrease was due to lower sales as well as increased expenses associated 
      with investments in digital initiatives. 
 
   -- EBITDA closed at Ps. 1,492 million, a decrease of 30.0%. The EBITDA 
      margin stood at 13.3%. Excluding severance payments from the personnel 
      restructuring, the margin would have been 13.8%. 
 
   -- Net income reached a profit of Ps. 169 million, a decrease of 46.1% from 
      the previous year due to lower operating profit. 
 
   -- ROIC decreased by 760 basis points, closing at 7.8%, 440 bps below the 
      cost of capital. Excluding severance costs, ROIC would have closed at 
      8.3%. 
 
   -- Net Debt/EBITDA leverage closed at 2.6x. 
 
   -- CapEx for the period amounted to Ps. 565 million, mainly focused on 
      technology investments for storage production, expansion of production 
      capacity, and the service platform in Mexico. 

KEY FIGURES | 4Q24 vs 4Q23

 
                                  4Q                        12M 
                            ---------------            -------------- 
                             2024     2023   %<DELTA>   2024    2023   %<DELTA> 
 -------------------------  -------  ------  --------  ------  ------  -------- 
 Net Sales                    2,723   3,376  (19.3 %)  11,201  12,146   (7.8 %) 
 
                                             (460) 
 % gross margin              40.8 %  45.4 %  bps       44.9 %  45.7 %  (80) bps 
 Operating income                64     385  (83.4 %)     881   1,592  (44.7 %) 
                                             (900)                     (520) 
  % margin                    2.4 %  11.4 %  bps        7.9 %  13.1 %  bps 
 EBITDA[1]                      239     554  (56.8 %)   1,492   2,131  (30.0 %) 
                                             (760)                     (420) 
  % margin                    8.8 %  16.4 %  bps       13.3 %  17.5 %  bps 
 Net Result                   (122)      71        NM     169     312  (46.1 %) 
Income                                       (660)                     (110) 
 Statement      % margin    (4.5 %)   2.1 %  bps        1.5 %   2.6 %  bps 
-------------  -----------  -------  ------  --------  ------  ------  -------- 
 
 Cash and Cash Equivalent       732     566    29.4 % 
 
 Debt with cost               4,683   4,028    16.3 % 
Balance        Net Debt       3,951   3,462    14.1 % 
-------------  -----------  -------  ------  -------- 
 
 Operating Cash Flow            814   1,290  (36.9 %) 
 
 CapEx                          565     609   (7.2 %) 
(Cumulative)   Working 
 Cash Flow      Capital       (419)   (168)        NM 
-------------  -----------  -------  ------  -------- 
 
 Net Debt / EBITDA            2.6 x   1.6 x     1.0 x 
 
                                             (760) 
 ROIC                         7.8 %  15.4 %  bps 
               Cash 
                Conversion 
Others          Cycle            56      30   26 days 
-------------  -----------  -------  ------  -------- 
 

KEY FIGURES | JANUARY -- DECEMBER

 
                                  2024 
------------------------  ------------ 
Employees                        3,502 
------------------------  ------------ 
Sales points                   >32,000 
------------------------  ------------ 
Government Transactions          4.0 % 
------------------------  ------------ 
e-commerce clients             > 4,900 
------------------------  ------------ 
bebbia units                  >133,000 
------------------------  ------------ 
20L water jugs saved      58.6 million 
------------------------  ------------ 
 

MESSAGE | CEO

Dear Investors,

2024 was a year marked by a challenging macroeconomic environment, particularly due to the crisis in Argentina, which forced us to make strategic decisions to mitigate its impact. Nevertheless, we closed the year with the resilience that defines Rotoplas, effectively managing the factors within our control and strengthening our operational capacity. This has made our organization more agile and better equipped to navigate future challenges.

In overcoming these hurdles, we have also made significant progress. The Group reached a record NPS, reflecting the trust and continued satisfaction of our customers. Additionally, we successfully migrated the entire organization to Google Cloud, centralizing our data and enabling the use of artificial intelligence and advanced analytics tools.

In Mexico, we successfully completed the SMART Project, optimizing production processes and consolidating our market position. We also launched our B2B and B2B2C e-commerce platforms for our products, reaffirming our commitment to innovation and the development of advanced technological solutions. Our services platform unlocked new opportunities, enabling us to better meet customer needs. We are especially proud of bebbia's growth, which surpassed 133,000 subscribers.

As we highlighted during Agua Day, we remain focused on improving cash flow and optimizing our financial structure through a selective investment strategy, prioritizing projects with the highest return. Additionally, given market conditions and our commitment to cost control, we implemented a workforce restructuring during the quarter, along with other measures, which will enable us to operate more efficiently and adapt more effectively in the coming year.

Finally, we reaffirm our commitment to the four strategic pillars that guide us: sustainable product growth, the sustainable development of services, the digitalization of the water ecosystem, and the creation of value for all stakeholders.

With determination and enthusiasm, we are ready to face the challenges of 2025 and continue providing solutions that help people improve their relationship with water.

Carlos Rojas Aboumrad

INVITE | EARNINGS CALL

Friday, February 7(th) , 10:00am Mexico City Time (11:00am, EST)

Speakers: Carlos Rojas (CEO), Andrés Pliego $(CFO.AU)$

Link: https://rotoplas.zoom.us/webinar/register/WN__vfMwyybRm6T0clQ37bS1g#/registration

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