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Corticeira Amorim SGPS S A : Consolidated results as of 30th September 2021

11/29/2021 | 12:41pm EST


30-09-2021 (non audited)

Translation of consolidated financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails).




Dear Shareholders,

In accordance with the law, CORTICEIRA AMORIM, S.G.P.S., S.A., a public company, presents its:





The economic recovery observed in the first half of 2021 continued in the third quarter, benefiting from a favourable global context. Progress with Covid-19 vaccination programmes, especially in developed and wealthier emerging economies, together with the continuation of favourable monetary and fiscal conditions, were critical factors in the recovery. The pace of activity appears to have peaked in economies such as China, the United States and even the European Union. However, uneven growth following the sharp slowdown caused by the coronavirus pandemic continues to impact the world economy.

The volatility and lower reliability of supply chains characterises the current situation, there being sufficient cause to raise concern over the normal functioning of economic activities. There are fears that if all goods in transit were accounted for, the relationship between demand and supply would be found to be out of balance. At the same time, expectations of an increase in the rate of inflation are growing, leading some central banks to begin (or to announce for the near future) a normalisation of monetary policy.

The US is projected to have already returned to pre-pandemic levels of economic activity, but continues to register a slow recovery in terms of its labour market. US growth slowed significantly in the third quarter, from an annualised quarterly rate of 6.7% to 2.0%. Lower mobility due to the spread of the Delta variant during the summer, a lack of components for the car industry and a reduction in fiscal support have impacted economic activity. Growth in the Eurozone was estimated at 2.1% between July and September, having decelerated in Germany - clearly reflecting supply chain difficulties - and Spain, while evolving positively in France, Italy, Belgium and Austria.

Corticeira Amorim maintained the same pace of sales growth in the third quarter as it recorded in the second, both quarters having as their comparison in 2020 periods that were fully impacted by the consequences of the Covid- 19 pandemic.

Consolidated sales increased 13.3% in the third quarter and 11.5% over the first nine months, compared with the same periods of 2020. Sales in the first quarter were down 2.0% compared with same period of 2020; and up 5.7% on the first nine months of 2019.

In the first nine months of 2021, Corticeira Amorim's sales totalled €637.1 million, an increase of €65.7 million compared with the same period of 2020. The increase reflects the reduction in restrictive measures that countries implemented to contain the spread of the pandemic, with profound consequences for global economies and consumption patterns. Several uncertainties remain, however, and are only likely to dissipate when the effectiveness of the continuing vaccination process is assured. The increase in Covid-19 infection rates, as witnessed in Europe in October, confirms the need to maintain a prudent attitude in regard to the prospects for an unrestricted return to normal activity across different economic sectors.




The exchange rate effect (related to the depreciation of the US dollar) penalised sales growth in value terms - excluding this effect, sales in the first nine months would have increased 12.7%.

All Business Units (BUs) increased sales, particularly the Cork Stopper (+11.7%), Floor and Wall Coverings (+7.7%), Composite Cork (+19.8%) and Insulation (+20.4%) BUs, which managed to reverse the downward trend in sales seen at the end of 2020 and show robust growth in their activity levels.

EBITDA increased 16.3% to €110.3 million, while the EBITDA-sales ratio rose to 17.3%, a significant increase compared with the 16.6% recorded in the same period of the previous year. The exchange rate effect, lower cork yields, a less favourable product mix, price increases for some non-cork raw materials and a significant rise in transport costs restricted the degree of improvement in the EBITDA-sales ratio.

In the third quarter, the company recognised the capital gain made from the sale of real estate belonging its Industria Corchera subsidiary, which was partially offset by the recording of goodwill impairments.

After results attributable to non-controlling interests, net income totalled €58.0 million, an increase of 19.6% compared with the same period of 2020.





Sales by the Raw Materials BU increased 3.7% in the first three-quarters compared with the same period of 2020. Sales were strongest in the third quarter (+11.8%). This was to be expected in a context of significant sales growth by the Group's downstream BUs and following the realignment of their inventory levels. Particularly noteworthy was the recovery of the BU's activities North Africa, where adjudications had previously been postponed.

EBITDA totalled €13.8 million, an increase of 28.2% compared with the same period of the previous year (€10.8 million). The increase in the EBITDA-sales margin (from 7.8% to 9.7%) resulted from a increased efficiency (including an increase in the volumes produced), which more than offset the increase in costs, namely of electricity, transport and maintenance and repair.

The 2021 cork purchasing campaign was completed without being significantly impacted by the pandemic. The volumes purchased were similar to those in 2020. In terms of price/quality there was a slightly increase of purchasing price.

Corticeira Amorim acquired 50% of Cold River's Homestead, SA, which owns a number of agroforestry assets and is part of the Herdade de Rio Frio estate, with aim of advancing the Group's Forestry Intervention Project. The strategic goals of the project are to ensure the maintenance, preservation and enhancement of cork oak forests and to guarantee the continuous production of high quality cork. The company has also entered into an agreement with Parvalorem, SA to purchase the remaining 50% of Cold River's Homestead - subject to the verification of a number of requirements - in a deal expected to be completed in the near future.

The Cork Stopper BU recorded sales of €455.6 million, an increase of 11.7% on the same period of 2020 and representing 72% of Corticeira Amorim's total consolidated sales. At constant exchange rates, the BU's sales would have increased 12.7%.

The BU is benefiting from a strong recovery in volume sales, the most important driver of its overall sales growth, together with an improvement in its product mix. Sales increased across all segments and in all geographic regions, with Europe being the main driver of growth.

EBITDA rose to €84.2 million (+7.5% y-o-y). The EBITDA-sales margin decreased to 18.5% (9M20: 19.2%). The BU benefited from the growth in sales volumes. The weakness of the dollar, price increases for some non- cork raw materials, increases in transport and energy costs and lower crushing yields were the main causes of the decline in the EBITDA-sales ratio. At constant exchange rates, the EBITDA-sales margin would have been 19.0%, slightly below the level of the same period of 2020.

The Floor and Wall Coverings BU registered sales of €92.9 million, an increase of 7.7% in comparison with the same period of 2020. Amorim WISE and recently launched products continued to perform strongly.

The North American and Scandinavian markets continued to perform positively. Germany was negatively impacted by the plant closures that took place at the beginning of the year as a result of measures to combat Covid-19. The Russian market was impacted by depreciation of the rouble.

EBITDA totalled €4.3 million, up from €1.0 million in the same period of the previous year. The EBITDA-sales margin rose from 1.2% to 4.6%. A consistent reduction in operating costs, the result of efforts to restructure and reduce the break-even level, supported an improvement in the BU's profitability. However, significant increases in transport and energy costs and in the prices of some non-cork raw materials continue to pressure profitability. A decrease in impairment levels also merits highlighting.

The Composite Cork BU posted solid sales growth in the first nine months. Compared with the same period of 2020, sales increased 19.8% to €87.0 million, despite the negative impact of US dollar depreciation (excluding this effect, sales would have risen 22.5%). Sales increased across all segments, with Footwear, Flooring Distributors and Cork Specialists standing out for making the largest contributions to growth. The BU's new products, applications and newly created joint ventures (Amorim Sports and Corkeen) continued to perform strongly, together contributing €12 million in sales.

This is an excerpt of the original content. To continue reading it, access the original document here.


Corticeira Amorim SGPS SA published this content on 29 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 November 2021 17:40:07 UTC.

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Yield 2021 2,67%
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EV / Sales 2021 1,80x
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Nbr of Employees -
Free-Float -
Duration : Period :
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Antˇnio Rios de Amorim Chairman & Chief Executive Officer
Nuno Filipe Vilela Barroca de Oliveira Non-Executive Director
LuÝsa Alexandra Ramos Amorim Non-Executive Director
Fernando JosÚ de Ara˙jo dos Santos Almeida Executive Director
Cristina Rios de Amorim Baptista Non-Executive Director
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