Quarterly Results
3Q24 | 9M24
Proforma Adjusted and Recurring EBITDA of R$676.7 million in 3Q24 and R$1,791.8 million year to date, including the 49.0% share of LD Celulose.
Positive Sustaining Cash Flow of R$146 million for the year to date, 37.1% up on the same period in the prior year, driven by the cash flow generation in the period.
WOOD
WOOD
Sale of 833.3k m³ in 3Q24 and 2,342.3 YTD, an increase of 23.7% vs 3Q23 and of 18.1% vs 9M23, with good levels of profitability.
High rates of factory utilization in the quarter to meet the demand for panels which continues to increase.
Adjusted and Recurring EBITDA of R$406.7 million in 3Q24, with a margin of 27.9% and R$1,164.6 million for 9M24, with a margin of 28.9%.
DISSOLVING WOOD PULP
Record production levels resulting from efficient operating performance in the period.
Optimization of the use of chemical and wood inputs ensuring efficient cost management.
Improved Pro-forma Recurring EBITDA (Dexco's part), closing out 3Q24 with R$216.9 million, with a margin of 60.5%.
MARKET CAP
|
R$6,911.5
million
SHARES IN ISSUE
820,566,246
FINISHES
METALS & SAN WARE
Increase in sales of 18.8% in 3Q, and of 7.7% for 9M24, even with the operation having begun the exit from the electric showers and faucets segment.
Net Revenue gains attributed to an improvement in the product mix.
Adjusted and Recurring EBITDA of R$52.8 million for the quarter, and R$103.0 million for 9M24, confirming that the Division's results have stabilized.
TILES
Sales activities to recover market share led to an increase in volumes of 18.8% in 3Q24, at 4,134.1m². For 9M24 the volume was R$13,138.1 m² 11.5% up on 9M23.
Adjusted and Recurring EBITDA of R$0.4 million, with a margin of 0.2% in 3Q24, and of R$10.5 million in 9M24, with a margin of 1.6%.
The Tiles Division remains under pressure from the market conditions.
CLOSING SHARE
PRICE
R$8.55
TREASURY SHARES
12,201,649
INVESTOR RELATIONS | GRI 2-3 | Live broadcast |
Francisco Semeraro - Administration & Finance Director | November 7, 2024, at |
10a.m. | |
Guilherme Setubal - IR, Institution & ESG Director | Access via the link |
Alana Santos - IR & ESG Coordinator | |
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Av. Paulista 1.938 - CEP 01310-200 | MRHj1DLpEuyXvX9PqztlS |
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investidores@dex.co | 2DKtZXVL0$ |
3Q24 | 9M24
Consolidated Financial Results
In BRL '000 | 3Q24 | 3Q23 | % | 2Q24 | % | 9M24 | 9M23 | % |
Highlights | ||||||||
Volume shipped Deca ('000 items) | 5,474 | 4,608 | 18.8% | 6,025 | -9.1% | 15,777 | 14,651 | 7.7% |
Volume shipped Ceramic tiles (m²) | 4,877,587 | 4,135,103 | 18.0% | 4,273,996 | 14.1% | 13,138,073 | 11,779,619 | 11.5% |
Volume shipped Wood (m³) | 833,299 | 673,517 | 23.7% | 749,949 | 11.1% | 2,342,317 | 1,983,652 | 18.1% |
Consolidated Net Revenue | 2,239,091 | 1,768,953 | 26.6% | 1,995,398 | 12.2% | 6,170,476 | 5,434,726 | 13.5% |
Consolidated Net Revenue - Pro Forma | 2,239,091 | 1,768,953 | 26.6% | 1,995,398 | 12.2% | 6,170,476 | 5,434,726 | 13.5% |
Gross profit | 667,257 | 529,220 | 26.1% | 725,251 | -8.0% | 1,942,841 | 1,870,750 | 3.9% |
Gross profit - Pro Forma (1) | 730,512 | 600,324 | 21.7% | 738,154 | -1.0% | 2,024,256 | 1,970,004 | 2.8% |
Gross margin | 29.8% | 29.9% | -0.1 p.p. | 36.3% | -6.5 p.p. | 31.5% | 34.4% | -2.9 p.p. |
Gross margin - Pro Forma (1) | 32.6% | 33.9% | -1.3 p.p. | 37.0% | -4.4 p.p. | 32.8% | 36.2% | -3.4 p.p. |
EBITDA according to CVM No. 527/12 (2) | 597,829 | 531,008 | 12.6% | 635,064 | -5.9% | 1,682,661 | 1,825,449 | 2.0% |
EBITDA Mg CVM No. 527/12 | 26.7% | 30.0% | -3.3 p.p. | 31.8% | -5.1 p.p. | 27.3% | 33.6% | -6.3 p.p. |
Adjustments for non-cash events | (153,623) | (203,372) | -24.5% | (296,012) | -48.1% | (488,045) | (693,095) | -29.6% |
Non-recurring events (3) | 73,744 | 17,421 | N/A | 15,999 | - | 89,415 | 43,755 | N/A |
Dissolving Wood Pulp | (58,094) | (57,114) | 1.7% | 21,427 | N/A | (5,958) | (187,348) | -96.8% |
Adjusted and Recurring EBITDA (4) | 459,856 | 287,943 | 59.7% | 376,478 | 22.1% | 1,278,073 | 988,761 | 29.3% |
Adjusted and Recurring EBITDA margin (4) | 20.5% | 16.3% | 4.3 p.p. | 18.9% | 1.7 p.p. | 20.7% | 18.2% | 2.5 p.p. |
Adjusted and Recurring Pro Forma EBITDA (including Dexco's | 676,734 | 461,079 | 47% | 560,582 | 20.7% | 1,791,836 | 1,445,417 | 24% |
share of LD Celulose) (5) | ||||||||
Net Income | 92,620 | 304,125 | -69.5% | 94,492 | -2.0% | 152,010 | 615,837 | -75.3% |
Recurring Net Income (1)(3) | 125,147 | 94,806 | 32.0% | 126,284 | -0.9% | 278,400 | 293,444 | -5.1% |
Recurring Net Margin (1)(3) | 5.6% | 5.4% | 0.2 p.p. | 6.3% | -0.7 p.p. | 4.5% | 5.4% | -0.9 p.p. |
INDICATORS | ||||||||
Current ratio (5) | 1.49 | 1.34 | 11.2% | 1.51 | -1.3% | 1.49 | 1.34 | 11.2% |
Net debt (6) | 5,214,738 | 4,705,866 | 10.8% | 5,224,239 | -0.2% | 5,214,738 | 4,705,866 | 10.8% |
Net debt / EBITDA LTM(7) | 3.10 | 3.47 | -10.7% | 3.46 | -10.4% | 3.10 | 3.47 | -10.7% |
Average Shareholders' equity | 6,711,343 | 6,321,266 | 6.2% | 6,594,949 | 1.8% | 6,711,343 | 6,321,266 | 6.2% |
ROE (8) | 5.5% | 19.2% | -13.7 p.p. | 5.7% | -0.2 p.p. | 3.0% | 13.0% | -10.0 p.p. |
Recurring ROE | 7.5% | 6.0% | 1.5 p.p. | 7.7% | -0.2 p.p. | 5.5% | 6.2% | -0.7 p.p. |
SHARES | ||||||||
Earnings per share (BRL) (9) | 0.1143 | 0.3680 | -68.9% | 0.1200 | -4.8% | 0.1855 | 0.7458 | -75.1% |
Closing share price (BRL) | 8.55 | 7.70 | 11.0% | 6.56 | 30.3% | 8.55 | 7.70 | 11.0% |
Net equity per share (BRL) | 8.17 | 8.06 | 1.4% | 8.13 | 0.5% | 8.17 | 8.06 | 1.4% |
Treasury Shares | 12,201,649 | 12,424,043 | -1.8% | 12,201,649 | 0.0% | 12,201,649 | 12,424,043 | -1.8% |
Market Cap (BRL1.000) | 6,911,517 | 6,222,695 | 11.1% | 5,302,872 | 30.3% | 6,911,517 | 6,222,695 | 11.1% |
- Cost of products sold: 3Q24: Impairment of Inventory resulting from the exit of the Electric Showers and Faucets operation (+) R$48,922 thousand, Restructuring of Operations
- R$14,333 thousand; 2Q24: Reestruturação de Operações (+) R$10.302 mil, Outros (+) R$ 2.601 mil; 1Q24: Restructuring Operations (+) R$5,257 thousand; 2Q23: Restructuring of Operations: (+) R$28,150 million. 3Q23: Restructuring of Coatings: (+) R$22,849 thousand; Deca Restructuring: (+) R$24,111 thousand; Manizales Closing (+) R$2,180 thousand; DNA Restructuring (+) R$21,964 thousand.
- EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization): measure of operating performance in accordance with CVM Instruction 156/22.
- Non-recurringevents detailed in the attachment to this material.
- Pro Forma Adjusted and Recurring EBITDA also includes the Dexco part of LD Celulose's Recurring EBITDA.;
- Current Liquidity: Current Assets divided by Current Liabilities. Indicates the availability in R$ to meet each R$ of short-term obligations.
- Net Debt: Total Financial Debt (-) Cash.
- Financial leverage calculated on recurring EBITDA over the last 12 months, adjusted for accounting and non-cash events.
- ROE (Return on Equity): performance measure given by the annualized Net Profit for the period per average Shareholders' Equity.
- Net Income per Share is calculated by dividing the profit attributable to the Company's shareholders by the weighted average number of ordinary shares issued during the period, excluding ordinary shares held in treasury.
2
3Q24 | 9M24
MARKET SCENARIO
During the third quarter, the Brazilian macroeconomic scenario showed growth but presented challenges. The Institute of Applied Economic Research (Ipea) revised its GDP growth projections for 2024 upwards, although growth for the second half of the year is expected to slow on the back of the cycle of interest rate increases - the Monetary Policy Committee (Copom) having increased the base rate (Selic) to 10.75% per annum - and the reduction in fiscal stimulus. In addition, the National Construction Index (SINAPI) showed an uptick over the period, indicating cost pressures in the sector, particularly with relation to building materials. Despite some real gains in household income, price increases may impact the real estate and infrastructure sector and thus Dexco's business.
Regarding the markets in which the Company operates, the Finishes Division continues to show improvement. According to data from the Brazilian Association of the Construction Materials Industry (ABRAMAT), there was growth in deflated revenue year-to-date, in both the basic (3.0%) and finished segments (8.4%). The National Association of Ceramic Tiles Manufacturers (ANFACER) reported a recovery of 5% versus 2023, with the wet process sector showing signs of stabilizing following a sharp decline.
For 2024 year to date, the Finishes business reported an Adjusted and Recurring EBITDA of R$113.4 million, driven by a recovery in the results of the Metals and Sanitary Ware Division, which reported an Adjusted and Recurring EBITDA of R$52.8 million for 3Q24 and R$103.0 million in 9M24, with margins of 9.7% and 7.0% respectively. The results for the Tiles business continue to be impacted by more challenging market conditions, with the division closing with an Adjusted and Recurring EBITDA of R$10.5 million for 9M24, with margins of 1.6%, and R$0.4 million for 3Q24, with margins of 0.2%.
The Wood Business continued to show its resilience with a strong performance, led by the wood panels market, which remained buoyant over the period, showing growth of 20.5% for the quarter and 19.7% year to date versus the same period in 2023, according to the Brazilian Tree Industry (IBÁ). The high levels of demand led to an Adjusted and Recurring EBITDA of R$406.7 million in 3Q24, with margins of 279%, and of R$1,164.6 million in 9M24, with margins of 289%. The division reported high levels of factory utilization and strong profitability, including with respect to the forestry businesses, which contributed mainly to the results for the first half of the year.
Another highlight was LD Celulose, which achieved record levels of production in 3Q24, in addition to optimizing the use of manufacturing inputs, mainly chemicals and wood, which arose from LD's Value Creation Program, an important channel for ensuring continuous improvement in both costs and manufacturing efficiency. These actions contributed to an Adjusted and Recurring EBITDA of R$443.0 million, with a margin of 60.5% for the quarter. For 9M24, Adjusted and Recurring EBITDA was R$1,050.3 million, with a margin of 52.5%.
Faced with a market environment characterized by inflationary pressures, high interest rates and rising construction costs, factors that can dampen consumption and investment, Dexco remains focused on maximizing the profitability of its operations, especially with respect to capturing its 2021-2025 Cycle projects, which are approaching completion. The Company is also seeking to optimize its leverage, ensuring the best return for shareholders in both the medium and long term.
3
3Q24 | 9M24
Consolidated Financial Results
NET REVENUE
Consolidated Net Revenue for 3Q24 came in at R$2,239.1 million, an increase of 26.6% versus the same period the previous year, driven by strong demand in the Wood Division and a more vibrant panels market, and by the Metals and Sanitary Ware Division, which maintained the performance shown in the previous quarter, retaining a better product mix. It should be noted that the results for 3Q23 were partially impacted by implementation of SAP 4/Hana in the Wood and Metals and Sanitary Ware Divisions, which had an impact on volumes shipped on a comparative basis.
ood
etals a d a | a e |
iles
The 3Q24 results reflected a better product mix in the Metals Unit and a drop in the seasonality of Electric Showers and Faucets, an operation that Dexco will no longer be involved in, as already announced. In addition, given the possibility of forestry profitability in an appreciating market, at the end of the quarter there were specific forestry deals that ended up boosting the quarter's results. Year to date, Net Revenue was R$6,170.5 million, an increase of 13.5% versus the previous year, boosted by the performance of the wood panels segment in domestic and foreign markets and by growth in the Metals and Sanitary Ware Division.
BRL '000 - consolidated | 3Q24 | 2Q23 | % | 1Q24 | % | 9M24 | 1H23 | % | |
Net Revenue | 2,239,091 | 1,768,953 | 26.6% | 1,995,398 | 12.2% | 6,170,476 | 5,434,726 | 13.5% | |
Domestic market | 1,879,363 | 1,473,803 | 27.5% | 1,625,018 | 15.7% | 5,101,934 | 4,485,157 | 13.8% | |
Foreign Market | 359,728 | 295,150 | 21.9% | 370,380 | -2.9% | 1,068,542 | 949,569 | 12.5% |
EFFECT OF VARIATION IN THE FAIR VALUE OF BIOLOGICAL ASSETS AND DEPLETION
Since the end of 2022, Dexco has been adjusting the value of its biological assets, to reflect increases in the price of wood traded on the market. In 3Q24, the Company readjusted the value of its biological assets, reporting a positive adjustment, although smaller compared to 3Q23 and 2Q24.
These adjustments are associated with high levels of demand for wood in projects, as well as increased prices of the input costs, along with higher wood usage driven by the acceleration in panel production.
The calculation of the value of biological assets considers both market sales prices and the productivity of the Company's forests. The variation in the fair value of biological assets and exhaustion do not impact Dexco's cash flow results.
4
3Q24 | 9M24
COST OF GOODS SOLD
The Pro-Forma Cash Cost - Cost of Goods Sold net of depreciation, amortization and exhaustion - of the net variation in biological assets, closed out 3Q24 at R$1,372.5 million, an increase of 19.0% versus 3Q23. This growth is linked to higher volumes across all divisions, which impacts variable costs, while there was also an increase in the cost of inputs for the Finishes Division, such as base metals for casting and natural gas. Year to date, the Pro-Forma Cash Cost totaled R$3,762.0 million, 9.2% greater than for the same period the previous year.
On the back of the higher added value mix in the Metals and Sanitary Ware Division and the consistent performance of the panels segment of the Wood Division and greater dilution of fixed costs arising from increased factory utilization, the Company reported a Pro-Forma Gross Profit of R$730.5 million for the quarter, an increase of 21.7% versus 3Q23, with a Pro-Forma Gross Margin of 32.6%. There was a slight drop in Pro-Forma Gross profit (-1.0%) and in Pro-Forma Gross Margin (-4.4 p.p.) versus 2Q24.
The increase in the portion of Biological Asset Exhaustion and Depreciation, Amortization and Exhaustion, both for the quarter and year to date, impacted Gross Income, since they reflect the greater volume of forest consumed to serve the panels market, and the losses arising from forestry trading in the period.
For 9M24, the improvement in operating results contributed a 2.8% positive variance in Pro-Forma Gross Income versus 9M23. However, the negative variance in Fair Value of Biological Assets, which ended the period 28.9% lower than the same period of the previous year, contributed to a 3.4 p.p. drop off in Pro-Forma Gross Margin for the period.
BRL´000 - Consolidated | 3Q24 | 3Q23 | % | 2Q24 | % | 9M24 | 9M23 | % |
Cash COGS | (1,435,717) | (1,224,330) | 17.3% | (1,262,743) | 13.7% | (3,843,398) | (3,544,008) | 8.4% |
Non Recurring Event (1) | 63,255 | 71,104 | -11.0% | 12,903 | N/A | 81,415 | 99,254 | -18.0% |
Cash COGS Pro Forma | (1,372,462) | (1,153,226) | 19.0% | (1,249,840) | 9.8% | (3,761,983) | (3,444,754) | 9.2% |
Variation in fair value of biological assets | 154,636 | 205,620 | -24.8% | 298,114 | -48.1% | 495,174 | 696,032 | -28.9% |
Depletion of biological assets | (105,165) | (91,107) | 15.4% | (77,729) | 35.3% | (296,704) | (241,073) | 23.1% |
Depreciation, amortization and depletion | (185,588) | (129,916) | 42.9% | (227,789) | -18.5% | (582,707) | (474,927) | 22.7% |
Gross Profit | 667,257 | 529,220 | 26.1% | 725,251 | -8.0% | 1,942,841 | 1,870,750 | 3.9% |
Recurring Gross Profit (1) | 730,512 | 600,324 | 21.7% | 738,154 | -1.0% | 2,024,256 | 1,970,004 | 2.8% |
Gross Margin | 29.8% | 29.9% | -0.1 p.p. | 36.3% | -6.5 p.p. | 31.5% | 34.4% | -2.9 p.p. |
Recurring Gross Margin (1)(2) | 32.6% | 33.9% | -1.3 p.p. | 37.0% | -4.4 p.p. | 32.8% | 36.2% | -3.4 p.p. |
- Non-recurringevents: 3Q24: Impairment of Inventory resulting from the exit of the Electric Showers and faucets operation (+) R$48,922 thousand, Restructuring of Operations (+) R$14,333 thousand; 2Q24: Restructuring of Operations (+) R$10. 302 thousand, Other (+) R$2,601 thousand; 1Q24: Operations Restructuring (+) R$5,257 thousand; 2Q23: Operations Restructuring: (+) R$28,150 thousand. (2) Pro Forma gross profit / Pro Forma consolidated net revenue..
SALES EXPENSES
Sales Expenses ended 3Q24 at R$303.4 million, an increase of 38.3% versus the same period in the previous year. Year-to-date expenditure totaled R$910.9 million, 20.8% up on the same period in 2023.
These increases can be explained by greater investment in Advertising and Marketing and sales actions in, mainly, the Metals and Sanitary Ware and Tiles divisions, and in supporting points of sale (POS), which reported an increase in volumes for the quarter.
BRL´000 - Consolidated | 3Q24 | 3Q23 | % | 2Q24 | % | 9M24 | 9M23 | % |
Sales Expenses | (330,419) | (238,974) | 38.3% | (298,727) | 10.6% | (910,893) | (753,939) | 20.8% |
% of Net Revenue | 14.8% | 13.5% | 1.2 p.p. | 15.0% | -0.2 p.p. | 14.8% | 13.9% | 0.9 p.p. |
5
3Q24 | 9M24
GENERAL AND ADMIN EXPENSES
General and Administrative Expenses ended 3Q24 at R$75.5 million, a reduction of 21.7% year-on-year, and at R$220.9 million for 9M24, 19.4% lower than 9M23. This result arose from diligent cost management and the Company's efforts to optimize its organizational structure during the period.
It should also be noted that in 3Q23 results were impacted by investment in digitalization and the implementation of SAP 4/Hana, which was completed during the period and had an impact on a comparative basis.
BRL'000 - co solidated | 3Q24 | 3Q23 | % | 2Q24 | % | 9M24 | 9M23 | % |
General and Administrative Expenses | (75,451) | (96,322) | -21.7% | (72,725) | 3.7% | (220,820) | (274,082) | -19.4% |
% of Net Revenue | 3.4% | 5.4% | -2.1 p.p. | 3.6% | -0.3 p.p. | 3.6% | 5.0% | -1.5 p.p. |
EBITDA
Dexco's Consolidated Adjusted and Recurring EBITDA came in at R$459.9 million, with a margin of 20.5%, an increase of 59.7% versus 3Q23. This performance resulted from several factors, such as: i) the solid performance of the Wood Division, which, in addition to maintaining high revenue levels in the panels market, ended the quarter closing some forestry trades that boosted results for the period; ii) the ongoing results from the Metals and Sanitary Ware Division, despite exiting the electric showers and faucets segment; and iii) the Company's efficient cost management, even considering a comparative basis impacted by the SAP 4/Hana implementation during the third quarter of 2023. Year-to-date, Consolidated Adjusted and Recurring EBITDA was R$1,278.1 million, with a margin of 20.7%, 29.3% higher than for the same period the previous year.
LD Celulose delivered a total Adjusted and Recurring EBITDA of R$443.0 million, with a margin of 60.5%. Dexco's 9 share of this total was R$ .9. Including LD Celulose's contribution, Dexco's Adjusted and Recurring EBITDA totaled R$676.7 million.
The table below shows the reconciliation of EBITDA, in accordance with CVM Instruction 156/22. From this result, in order to better convey the Company's potential operating cash generation, two adjustments have been made: the exclusion from EBITDA of events of an accounting and non-cash nature, and the disregard of non-recurring events. Thus, in line with best practices, we present below the calculation of the indicator that best reflects the Company's cash generation potential.
EBI DA eco ciliatio i BRL'000 - co solidated | 3Q24 | 3Q23 | % | 2Q24 | % | 9M24 | 9M23 | % |
Net income | 92,620 | 304,125 | -69.5% | 94,492 | -2.0% | 152,010 | 615,837 | -75.3% |
Income tax and social contribution | 74,607 | (14,428) | N/A | 63,973 | 16.6% | 166,168 | 46,663 | N/A |
Net financial result | 124,702 | (4,317) | N/A | 154,055 | -19.1% | 435,738 | 367,920 | 18.4% |
EBIT | 291,929 | 285,380 | 2.3% | 312,520 | -6.6% | 753,916 | 1,030,420 | -26.8% |
Depreciation, amortization and depletion | 200,735 | 154,521 | 29.9% | 244,815 | -18.0% | 632,041 | 553,955 | 14.1% |
Depletion of biological assets | 105,165 | 91,107 | 15.4% | 77,729 | 35.3% | 296,704 | 241,073 | 23.1% |
EBITDA according to CVM No. 527/12 | 597,829 | 531,008 | 12.6% | 635,064 | -5.9% | 1,682,661 | 1,825,448 | -7.8% |
EBITDA margin CVM No. 527/12 | 26.7% | 30.0% | -3.3 p.p. | 31.8% | -5.1 p.p. | 27.3% | 33.6% | -1.8 p.p. |
Change in fair value of biological assets | (154,636) | (205,619) | -24.8% | (298,114) | -48.1% | (495,174) | (696,032) | -28.9% |
Employee benefits | 1,013 | 2,247 | -54.9% | 2,102 | -51.8% | 7,129 | 2,937 | N/A |
Non-Recurring events (1) | 73,744 | 17,421 | N/A | 15,999 | N/A | 89,415 | 43,755 | N/A |
Dissolving Wood Pulp | (58,094) | (57,115) | 1.7% | 21,427 | N/A | (5,958) | (187,348) | -96.8% |
Adjusted and Recurring EBITDA (1) | 459,856 | 287,942 | 59.7% | 376,478 | 22.1% | 1,278,073 | 988,760 | 29.3% |
Adjusted and Recurring EBITDA margin (1) | 20.5% | 16.3% | 4.3 p.p. | 18.9% | 1.7 p.p. | 20.7% | 18.2% | 0.7 p.p. |
Adjusted and Recurring EBITDA - Pro Forma (including Dexco's | 676,734 | 461,078 | 47% | 560,582 | 20.7% | 1,791,836 | 1,445,416 | 24.0% |
part in LD Celulose) (2) |
(1) Non-recurring events listed in the addendum to this report; (2) Pro-forma Adjusted and Recurring EBITDA includes Dexco's portion of LD Celulose.
6
3Q24 | 9M24
FINANCIAL RESULTS
In 3Q24, the Pro-Forma Financial Result was negative R$132.1 million, an improvement of R$42.9 million versus the same period of the previous year, mainly impacted by the 33.0% increase in cash.
Compared to 2Q24, the improvement was R$22.0 million, mainly explained by the drop in the interest provision resulting from amortization of approximately R$600 million worth of Debentures (50.0% of the total), carried out in May. There was also a downturn in the average CDI between the periods.
BRL'000 - co solidated | 3Q24 | 3Q23 | % | 2Q24 | % | 9M24 | 9M23 | % |
Financial Revenues | 93,635 | 256,037 | -63.4% | 106,871 | -12.4% | 320,593 | 429,966 | -25.4% |
Financial Expenses | (218,337) | (251,720) | -13.3% | (260,926) | -16.3% | (756,331) | (797,886) | -5.2% |
Financial Result | (124,702) | 4,317 | N/A | (154,055) | -19.1% | (435,738) | (367,920) | 18.4% |
Non-recurring events (1) | (7,360) | (179,274) | - | - | - | (7,754) | (179,274) | |
Recurring Financial Revenues(1) | 86,275 | 76,763 | 12.4% | 106,871 | -19.3% | 312,839 | 250,692 | 24.8% |
Recurring Expenses Revenues(1) | (218,337) | (251,720) | -13.3% | (260,926) | -16.3% | (756,331) | (797,886) | -5.2% |
Recurring Financial Result(1) | (132,062) | (174,957) | -24.5% | (154,055) | -14.3% | (443,492) | (547,194) | -19.0% |
(1) Non-recurring events detailed in the Addendum to the report; (2) Pro Forma Adjusted and Recurring EBITDA also includes the Dexco part of Recurring EBITDA for LD Celulose.
NET INCOME
Dexco reported Recurring Net Income of R$125.1 million for 3Q24, with a recurring ROE of 7.5%, an increase of 32.0% versus 3Q23, a result in line with the prior period. Year to date, the Company's Recurring Net Income was R$278.4 million, while Recurring ROE was 5.5%, a drop of 40.8% versus 9M23.
Using equity equivalence, which has an accounting effect rather than cash effect, the record result arising from the LD Celulose operation was R$58.4 million for the quarter, reflected in the Company's Recurring Net Income. Thus, Pro-Forma Recurring Net Income was R$183.5 million for 3Q24, 20.6% higher than for 3Q23.
BRL'000 - co solidated | 3Q24 | 3Q23 | % | 2Q24 | % | 9M24 | 9M23 | % |
Net Income | 92,620 | 304,125 | -69.5% | 94,492 | -2.0% | 152,010 | 615,837 | -75.3% |
Non recurring event (1) | 90,892 | (151,971) | N/A | 10,559 | N/A | 133,074 | (134,590) | N/A |
Dissolving Wood Pulp | (58,365) | (57,348) | 1.8% | 21,233 | N/A | (6,684) | (187,803) | -96.4% |
Recurring Net Income (1) | 125,147 | 94,806 | 32.0% | 126,284 | -0.9% | 278,400 | 293,444 | -5.1% |
Recurring Net Income - Pro Forma (including Dexco's part in LD | 183,512 | 152,155 | 20.6% | 105,051 | 74.7% | 285,084 | 481,247 | -40.8% |
Celulose) (2) | ||||||||
ROE | 5.5% | 19.2% | -13,7 p.p. | 5.7% | 0,2 p.p. | 3.0% | 13.0% | -10 p.p. |
Recurring ROE (1) | 7.5% | 6.0% | 7,5 p.p. | 7.7% | -0,2 p.p. | 5.5% | 6.2% | -0,7 p.p. |
(1) Non-recurring events listed in the addendum to this material; (2) Pro-forma Recurring Net Income includes Dexco's portion of LD Celulose.
CASH FLOW
Dexco ended 3Q24 with Sustaining Free Cash Flow generation of R$226.4 million, closing out the quarter with total cash generation of R$87.8 million. While the result was boosted by higher sales volumes and revenues versus 3Q23, there was a negative impact identified with the Customers account, with the balance of receivables increasing, which had an impact on Working Capital. The Company thus reported a drop off in Working Capital during the period. The Working Capital/Net Revenue ratio was 14.9%, a decrease versus 2Q24 and 3Q23.
For 9M24, the sustaining cash generation reported for the quarter boosted the year-to-date results, with the Company ending the period having generated R$146.0 million. On the other hand, when expenditure on
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3Q24 | 9M24
projects is included, the Company consumed R$456.3 million of cash over the same period, when including investment in reforestation carried out in the first half of the year, and investments related to the 2021-2025 Cycle.
Regarding projects, the Company invested R$102.6 million in 3Q24 in carrying out the Investment Cycle announced in 2021. This included, especially, the new Tiles factory at Botucatu (SP) and R$36.0 million in other non-recurring projects. In 9M24, investments made as part of the 2021-2025 Cycle totaled R$307.6 million, while there was an additional R$96.3 million invested in other non-recurring projects.
BRL millions | 3Q24 | 3Q23 | % | 2Q24 | % | 9M24 | 9M23 | % |
Adjusted and Recurring EBITDA | 460.2 | 287.5 | 60.0% | 376.6 | 22.2% | 1,278.5 | 988.5 | 29.3% |
CAPEX Sustaining | (175.6) | (183.2) | -4.1% | (265.9) | -34.0% | (601.1) | (464.8) | 29.3% |
Financial Flow | (56.5) | (58.7) | -3.7% | (188.6) | -70.0% | (248.4) | (390.6) | -36.4% |
Income tax and social contribuition paid | (14.8) | (9.6) | 53.1% | (26.0) | -43.2% | (96.4) | (52.9) | 82.2% |
Working Capital | 13.1 | 127.0 | -89.7% | 140.5 | -90.7% | (186.7) | 25.7 | N/A |
Others | (0.0) | 0.2 | 0.0% | (0.4) | N/A | 0.1 | 0.5 | 0.0% |
Free Cash Flow Sustaining | 226.4 | 163.2 | 38.7% | 36.2 | N/A | 146.0 | 106.5 | 37.1% |
Projects (1) | (138.6) | (192.7) | -28.1% | (243.4) | -43.0% | (602.3) | (504.3) | 19.4% |
Free Cash Flow Total | 87.8 | (29.4) | N/A | (207.1) | N/A | (456.3) | (397.7) | 14.7% |
Cash Convertion Ratio(2) | 49.2% | 56.8% | -757.5% | 0.0% | - | 11.4% | 10.8% | - |
( (1) Projects: 9M24: Forest Expansion (-) R$30.0 million, Deca Productivity, Mix Improvement and Automation Projects (-) R$68.1 million, New Floor and Wall Coverings Plant
(-) R$206.3 million, DX Ventures and Casa Dexco (-) R$12.2 million, LD Celulose (-) R$189.2 million, Other Projects (-) R$96.3 million; 9M23: Expansion of Manufacturing Capability and Forestry Expansion (-) R$37.4 million, Deca Productivity, Mix Improvement and Automation Projects (-) R$126.6 million, New Floor and Wall Coverings Factory (-) R$211.4 million, DX Ventures (-) R$90.4 million, Other Projects (-) R$38.5 million. (2) Cash Conversion Ratio: Sustaining Free Cash Flow / Adjusted and Recurring EBITDA.
CORPORATE DEBT
The Company ended 3Q24 with consolidated gross debt of R$7,367.4 million, an increase of 16.5% over the same period the previous year. Net debt, in turn, totaled R$5,214.7 million, an increase of 10.8% on the same period the previous year.
On a quarterly basis, Dexco reported a drop in its net debt of R$9.5 million, attributed to cash generation over the period. The Company thus saw a reduction in its level of leverage, closing the quarter with a Net Debt/Adjusted and Recurring EBITDA of 3.10x, an improvement of 0.37x when compared to the same period of the previous year.
The average cost of financing at the end of the quarter was 104.3% of the CDI, with an average term of 4.4 years.
BRL'000 | 03/31/2024 | 03/31/2023 | Var R$ | 12/31/2023 | Var R$ | 12/31/2023 | Var R$ |
Short-Term debt | 1,052,257 | 1,344,552 | (292,295) | 981,346 | 70,911 | 1,091,758 | (39,501) |
Long-Term debt | 6,064,052 | 4,733,207 | 1,330,845 | 6,074,591 | (10,539) | 5,872,773 | 191,279 |
Financial instruments | 251,111 | 246,634 | 4,477 | 233,793 | 17,318 | 157,274 | 93,837 |
Total debt | 7,367,420 | 6,324,393 | 1,043,027 | 7,289,730 | 77,690 | 7,121,805 | 245,615 |
Cash and equivalent | 2,152,682 | 1,618,527 | 534,155 | 2,065,491 | 87,191 | 2,785,454 | (632,772) |
Net debt | 5,214,738 | 4,705,866 | 508,872 | 5,224,239 | (9,501) | 4,336,351 | 878,387 |
Net debt/Adjusted and Recurring EBITDA | 3.10 x | 3.47 x | 0,37x | 3.46 x | 0.36 x | 3.11 x | 0.01 x |
Net debt/Equity (in %) | 77.5% | 72.2% | 5,3 p.p. | 78.0% | -0.5 p.p. | 66.5% | 11.0 p.p. |
Gross corporate debt | 3Q24 (%)
Amortization timeline
14%
Revolving
Credit
Cash
Short term
Long term
86%
Cash position | and after |
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3Q24 | 9M24
STRATEGIC MANAGEMENT & INVESTMENT
In 3Q24 Dexco resumed investment in reforestation and in maintaining operations at 2023 levels, following increased investment in forest restoration during the first half of the year, which led to a total investment of R$431.5 million for 9M24, an increase of 29.3% versus 9M23. Seeking efficient management of its investments, the Company closed 3Q24 with Sustaining Capex of R$175.6 million, 4.1% less than in 3Q23.
With respect to the 2025 Investment Cycle, the following cash disbursements were made during 2024:
- R$206 million: New Tiles Unit in São Paulo;
- R$68 million: Projects targeting productivity, improvement of the mix and automation of sanitary ware;
- R$30 million: Expansion of the forestry base in the Northeast;
- R$12 million: DX Ventures and Casa Dexco
(BRL '000) | 3Q24 | 3Q23 | % | 2Q24 | % | 9M24 | 9M23 | % |
Forestry OPEX | 106.8 | 102.1 | N/A | 209.2 | -48.9% | 431.5 | 255.8 | -58.2% |
Maintenance | 68.8 | 81.0 | -15.1% | 56.7 | 21.3% | 169.6 | 208.9 | -67.1% |
CAPEX Sustaining | 175.6 | 183.2 | -4.1% | 265.9 | -34.0% | 601.1 | 464.8 | -62.2% |
Projects(1) | 138.6 | 192.7 | -28.1% | 139.0 | -0.3% | 413.1 | 504.3 | -72.5% |
Total CAPEX | 314.2 | 375.8 | -16.4% | 404.9 | -22.4% | 1,014.2 | 969.1 | -67.6% |
(1) Are included in the Investment Cycle 2021-2025 and other strategic projects.
Finally, the Company reaffirms its commitment to maximizing the profitability of projects and boosting potential value creation of operations as projects in the 2021-2025 Cycle are completed.
EXIT FROM THE ELECTRIC SHOWERS AND FAUCETS BUSINESS
Dexco announced, through a Material Fact, its decision to exit the electric shower and faucet business. Dexco entered the electric shower and faucet sector in 2012 through the acquisition of Thermosystem Indústria Eletro Eletronica Ltda., and in 2015, it became the second-largest player in the segment after acquiring Duchacorona Ltda. The intentions for entering the business was to complement its product portfolio, with the Company at that time believing that portfolio maximization would serve as a lever for new projects across various market niches.
However, the operation proved to be challenging for Dexco, which faced limited synergy with other sales channels, leading to inefficiencies in commercial actions, and higher operational costs compared to other market players, considering the obligations inherent to a publicly traded company.
Finally, Dexco confirmed the sale of the operation to Zagonel S.A., a company founded in 1989 in Pinhalzinho (SC), which operates in the electric showers, faucets, professional and public lighting segments. The transaction includes a manufacturing facility with an annual production capacity of approximately 12.0 million units, as well as distribution centers in Aracaju (SE) and Tubarão (SC), in addition to the Corona and Thermosystem brands.
The completion of this transaction is subject to the fulfillment of suspensive conditions, including approval by the Administrative Council for Economic Defense (CADE), and is part of the ongoing strategic evaluation of the Company's business and product portfolio. It is important to note that the Hydra brand was not sold and will continue to be used in Dexco's product portfolio.
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3Q24 | 9M24
CAPITAL MARKETS
The Company closed out the end of the third quarter of 2024 with a market value of R$6,911.5 million, with a closing share price of R$8.55 on 30/09/2024.
Dexco's share price ended 3Q 11% higher than at the end of 3Q23, which is somewhat less than the uptick in the Ibovespa index, which saw an increase of 16.7% over the same period. This scenario reflects the positive expectations in relation to the macroeconomic scenario.
455,304 trades were carried out on the B3 spot market in the quarter, which represents turnover of approximately R$1.7 billion, that is, a daily average trade value of R$26.0 million.
Shareholders structure | 3Q24 (%)
37.3% | Itaúsa | |
40.8% | ||
Seibel Group | ||
Treasury | ||
Free Float | ||
1.5% | 20.4% | |
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