Results Presentation
4Q23 | 2023
March 07, 2024
Disclaimer
The information herein has been prepared by Dexco S.A. and does not represent any form of prospectus regarding the purchase or subscription to the company's shares or securities.
This material contains general information relating to
Dexco and the markets in which the company operates.
No representation or guarantee, expressed or implied, is made herein, and no reliance should be placed on the accuracy, justification or completeness of the information provided.
Dexco does not offer any assurances or guarantees regarding the fulfilment of expectations described.
2
2023
Strong, into the future.
SCENARIO | ▪ | Political and economic |
the markets in which Dexco | ||
uncertainty directly impacting | ||
operates. |
1Q23
• News linked to the tax | • Start of the reduction in interest rates | • Interest rate continues on a downward |
framework, coupled with | cycle; | curve; |
the maintenance of | • But with no significant impact on the | • Reduction in the decline in the |
inflation targets creates an | building materials market; | construction materials market; |
opening for interest rates to | • Panels market starting to show signs | • Sales in the panels sector remain |
start to fall. | of recovery. | steady. |
2Q23 3Q23 4Q23
WOOD
FINISHINGS
LD CELULOSE
Restructuring of the | 2021-2025Cycle revised from | Go live SAP |
4/HANA | ||
Executive Committee. | R$2.1 billion to R$1.8 billion. | |
Fall in panels volumes | Maintenance of market share | Sequential improvement in |
offset by forestry business. | and forestry business at | factory utilization. |
78% of factory utilization. | significant levels. | 80% factory utilization. |
75% factory utilization. | ||
Metals price repositioning and | Review of the factory footprint | Review of the factory |
scheduled shutdowns in Tiles. | of Sanitary Ware and partial | footprint ofTiles. |
return of Tiles' market share. | ||
First maintenance shutdown. | Operating at full capacity. | Excellent levels of quality and |
factory utilization. | ||
Effective management of Working Capital leading to cash generation and reduction in leverage.
Best quarter in the Division's
history: increase in market share of panels + forestry business.
93% factory utilization.
Temporary factory shutdown to balance inventory levels.
Improvement in the operation's productivity curve.
Highlights
2023
- Strategy of optimum capacity in Wood (high levels of factory utilization + forestry business) more than compensated for the impacts arising from a shrinking market and structural actions in Finishings.
Consolidated~
2022 - Gross Margin | 34.5% | |
Volume | ~ -3 p.p. | Operational |
Forestry Business | ~ 4 p.p. | |
gains | ||
Price/Mix | ~ -1 p.p. | |
~2 p.p. | ||
Cost of Goods Sold | ~ 2 p.p. | |
Variation in fair value of biological assets | ~2 p.p. | |
Depreciation/amortization/depletion | ~-5 p.p. | |
2023 - Gross Margin | 33.5% |
Highlights
- New quarterly EBITDA record for the Wood Division reassuring the consistent performance in panels and the focus on profit generation with the forestry business;
4Q23/2023
Pro-forma Adjusted & Recurring EBITDA of R$2,007 million in 2023, including the 49% EBITDA from LD Celulose
- Finishings Division impacted by market conditions and initiatives aimed at inventory reduction in 4Q23;
- Dexco's Adjusted & Recurring EBITDA of R$404 million in 4Q23 and R$1,393 million for the full year, excluding LD Celulose;
- LD Celulose reported a Recurring EBITDA of R$321 million for 4Q23 and a
Margin of 54%, with R$157 million relating to Dexco.
Recurring Net Revenue | Adjusted & Recurring EBITDA | Recurring Net Income | -21% | |||||||||||||||
and Gross Margin R$ million / % | and Margin R$ million / % | R$ million | ||||||||||||||||
+4% | 824 | |||||||||||||||||
-13% | +9% | 1,926 | 2,007 | 53 | ||||||||||||||
-33% | 649 | |||||||||||||||||
-2% | 8,487 | 7,383 | 517 | 561 | 194 | 613 | 249 | 278 | ||||||||||
1,980 | 1,949 | 157 | 42 | 168 | ||||||||||||||
151 | 20.4% | |||||||||||||||||
34.5% | 18.9% | 771 | ||||||||||||||||
33.5% | 18.5% | 20.8% | ||||||||||||||||
32.7% | 90 | 371 | ||||||||||||||||
26.0% | 207 | |||||||||||||||||
1,732 | ||||||||||||||||||
1,393 | ||||||||||||||||||
77 | ||||||||||||||||||
366 | 404 | |||||||||||||||||
4Q22 | 4Q23 | 2022 | 2023 | 4Q22 | 4Q23 | 2022 | 2023 | 4Q22 | 4Q23 | 2022 | 2023 | |||||||
Net Revenue | Pro-forma Gross | Adjusted & | Adjusted & Recurring | EBITDA | Adjusted & Recurring Net | |||||||||||||
Recurring | EBITDA | Margin % | Income - LD Celulose | |||||||||||||||
Margin% | ||||||||||||||||||
EBITDA - LD | ||||||||||||||||||
Celulose
5
Cash Flow
4Q23/2023
Improvement in Working Capital/Net Revenue (~12%5)
Free Cash Flow YTD R$ million
1,732 | CCR4 | : 26% |
1,393 |
447
(470) | (303) | ||
(687) | (864)(711) | ||
Financial | |||
Recurring | Working | Sustaining | |
EBITDA | Capital | flow | CAPEX |
- Ongoing initiatives to rationalize sustaining CAPEX;
- Effective management of working capital leading to sustaining cash generation of R$363 million in the year, with R$257 million in 4Q23;
- Ongoing investment in Cycle 2021-2025 projects in 2023:
- R$300 million: New Tiles unit in SP
- R$185 million: Productivity projects, improvement to the mix and sanitary ware automation
- R$53 million: Factory debottlenecking, improvement to the mix and expansion of the forestry base
- R$94 million: DX Ventures
Working Capital/Net Revenue | |||||||||||||||||
2022 | 2023 | 28% | 18% | 18% | 18% | ||||||||||||
12% | 10% | 15% | 12%5 | ||||||||||||||
363 | 2019 | 2020 | 2021 | 2022 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | |||||||||
CAPEX R$ million | |||||||||||||||||
(132) (79) | (37) | Investment | 4Q22 | 4Q23 | 2022 | 2023 | |||||||||||
(330) | FORESTRY OPEX | 101 | 112 | 430 | 368 | ||||||||||||
(823)(693) | MAINTENANCE | 158 | 134 | 382 | 343 | ||||||||||||
(859) | |||||||||||||||||
Sustaining | Sustaining CAPEX1 | 259 | 247 | 864 | 711 | ||||||||||||
Tax | FCL | Projects2 | FCL | ||||||||||||||
PROJECTS2,3 | 143 | 189 | 823 | 693 | |||||||||||||
Total |
1- Maintenance, factory modernization and business sustaining | 2- Projects, DX Ventures, M&A and LD Celulose | 3 - Expansion projects (4Q23): R$ 162.2 million; DX Ventures: R$3.3 million; Other projects: R$ 23.1 million | 4 - Cash Conversion | 6 |
Ratio: rate of converting Adjusted & Recurring EBITDA into sustaining FCL | 5 - Does not consider the one-off effects in the trimester | |
Corporate Debt
4Q23/2023
Reduction in leverage to
3.1x.
- Reduction in leverage to 3.1x driven mainly by effective cash generation initiatives;
- Liability management:
- Extension of the average payment term to 1.1 years, anchored by the CRA issue to the amount of R$1.5 billion made in October/23;
- Long term debt represents more than 80% of gross debt.
Amortization Timeline | R$ million | Financial Leverage | R$ million | ||||||||||||||
Average term¹ | Average cost | 17% | Dívida Líquida | Dívida Líquida/EBITDA Recorrente (UDM) | |||||||||||||
Short | |||||||||||||||||
4.5 years | 108.9% of CDI | ||||||||||||||||
3.5x | |||||||||||||||||
3.1x | 3.1x | ||||||||||||||||
3,535 | Term | 2.7x | |||||||||||||||
2.3x | |||||||||||||||||
Revolving | 83% | ||||||||||||||||
750 | 4,706 | ||||||||||||||||
Credit | Long | 4,582 | 4,336 | ||||||||||||||
4,038 | 4,284 | ||||||||||||||||
2,284 | |||||||||||||||||
Cash | 2,785 | ||||||||||||||||
1,228 | |||||||||||||||||
927 | 1,061 | 1,023 | |||||||||||||||
599 | |||||||||||||||||
2024 | 2025 | 2026 | 2027 | 2028 | 2029+ | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | |||||||
Liquidity | |||||||||||||||||
1 - Average weighted debt term. | 7 |
WOOD
8
Sector Environment
Wood Panels
IBÁ data
- Consistent market growth in the quarter in relation to 4Q22;
- Drop of 3% in the panels market in relation to 2022, despite the uptick seen in the 2nd quarter of the year;
Panels Total | Volume 000m3 | ||
vs 2022 | 4Q23 | 2023 | |
Domestic mkt | +6% | +1% | |
External mkt | +66% | -24% |
MDF Domestic Market
Volume 000m3
+3%
MDP Domestic Market
Volume 000m3
-3% | 4,390 | -3% | |||||
+10% | 4,250 | ||||||
+11% | 0% | 2,745 | |||||
8,200 | 7,980 | 1,163 | |||||
1,055 | 691 | 690 | 2,671 | ||||
2,108 | |||||||
1,900
4Q22 | 4Q23 | 2022 | 2023 | 4Q22 | 4Q23 | 2022 | 2023 | 4Q22 | 4Q23 | 2022 | 2023 |
9
Results
Wood
- Resilient results: quarterly increase in market share for panels and forestry business optimized asset profitability;
- Significant improvement in utilization levels, leveraging productivity with greater dilution of fixed costs;
- Best quarterly result in the Division's history with Adjusted & Recurring EBITDA of R$439 million and margin of 33.8% in 4Q23, and of R$1.4 billion for the full year;
Capacity Utilization | Capacity Utilization | |||||
2023 | ||||||
4Q23 | % | |||||
% | ||||||
MDF | MDP | MDF | MDP | |||
93% | 81% | |||||
95% | 90% | 82% | 80% | |||
Volume | Recurring Net Revenue | Adjusted & Recurring EBITDA¹ | ||||||||||||
000m3 | and Pro-forma Gross Margin | and Margin | ||||||||||||
-6% | R$ million / % | -7% | R$ million / % | +18% | ||||||||||
+5% | +3% | +51% | 1,400 | |||||||||||
5,205 | 4,831 | 1,186 | ||||||||||||
688 | 722 | 2,879 | 2,706 | 1,256 | 1,298 | 439 | ||||||||
291 | 22.8% | 29.0% | ||||||||||||
38.0% | 30.4% | 36.6% | 40.2% | |||||||||||
33.8% | ||||||||||||||
23.2% | ||||||||||||||
4Q22 | 4Q23 | 2022 | 2023 | 4Q22 | 4Q23 | 2022 | 2023 | 4Q22 | 4Q23 | 2022 | 2023 | |||
EBITDA | ||||||||||||||
Net Revenue | Pro-forma | Adjusted & Recurring | ||||||||||||
Margin % | ||||||||||||||
Gross Margin | EBITDA |
%
1 -Adjusted & Recurring EBITDA is net of the effects of the variation in biological assets. | 10 |
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Disclaimer
Dexco SA published this content on 07 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 March 2024 12:47:19 UTC.