Intelbras S A Indústria de Telecomunicação Eletrônica Brasileira : Dados Econômico-Financeiros

Intelbras S.A. - Indústria de Telecomunicação Eletrônica Brasileira
Interim Financial Information
June 30, 2023
Contents
Management Report	03
Independent auditor's report on the interim financial information	13
Interim Financial Information
Balance sheets	15
Statements of income	17
Statements of comprehensive income	18
Statements of changes in equity	19
Statements of cash flows	20
Statements of value added	21
Notes to the interim financial information	22
Statement of the Executive Officers on the Financial Statements	71
Statement of the Executive Officers on the Independent Auditor's Report	72

EARNINGS RELEASE 2Q23

Intelbras generates consolidated net revenue of R$970,829 thousand and EBITDA of R$137,736 thousand.

São José (SC), July 26th, 2023 - Intelbras S.A. - Indústria de Telecomunicação Eletrônica Brasileira ("Intelbras" or "Company") discloses its consolidated results for the quarter ended June 30th, 2023. The amounts presented here are compared with those for the quarter ended June 30th, 2022, unless otherwise indicated. The accounting balances presented here were prepared in accordance with Brazilian corporate law and practices adopted in Brazil, already in compliance with international accounting standards (IFRS).

Highlights

Net Operating Revenue was R$ 970,829 thousand in the quarter, representing a drop of -4.4% compared to the same period of the previous year and -6.4% compared to 1Q23.

Our EBITDA was R$ 137,736 thousand, which represents a growth of 15.8% in relation to the same period of the previous year, representing an EBITDA margin of 14.2%, an increase of +0.3 percentage points compared to the 1Q23.

The Company's consolidated ROIC (pre-tax) calculated in the last four quarters was 24.9%, -0.9 p.p. below this consolidated indicator achieved in the previous quarter and +5.6 percentage points compared to the same period of the previous year.

Our Net Income this quarter was R$ 118,021 thousand, which represents a growth of 22.0% in relation to the same period of the previous year and a net margin of 12.2% of net operating revenue.

Management Message

The second quarter of 2023 was similar to the first quarter of the year and confirmed some trends for the remaining part of the period.

Our corporate culture of always seeking revenue and profit growth once again faced up an extremely challenging scenario in one of our lines of business. Solar Energy results were below the most conservative expectations, and negatively impacted this quarter.

On the other hand, the focus on the operation, on the continuous improvement of our internal processes, on the customer, and our diligent management of the business can be observed by the continuous improvement in gross margins and Ebitda and in the comparison of the results of the same period of the previous year.

During the last three months, it was possible to readjust revenue expectations for the year and revise SG&A expenditures and investment plans according to this new reality that is imposed. It is during the most complex moments that the opportunity to challenge the efficiency of our structure presents itself, and so we did.

We start the second half of 2023 with a clear view that, affected by the drop in Solar Energy, our Energy segment will reduce in revenues during this fiscal year. On the other hand, we maintain our strategies of delivering historical revenue and profit growth in our Security and Communication segments, in addition to continuing to pursue efficiency gains throughout the entire operation along the next quarters, in order to preserve the company's results.

Main financial indicators

R$ thousands	2Q23	1Q23	∆%	2Q22	∆%
Net operating revenue	970,829	1,036,773	-6.4%	1,015,835	-4.4%
Gross profit	334,079	327,526	2.0%	280,463	19.1%
Gross Margin	34.4%	31.6%	+2.8p.p	27.6%	+6.8p.p
EBITDA	137,736	143,878	-4.3%	118,989	15.8%
EBITDA Margin	14.2%	13.9%	+0.3p.p	11.7%	+2.5p.p
Profit for the period	118,021	132,055	-10.6%	96,776	22.0%
Net Profit Margin	12.2%	12.7%	-0.6p.p	9.5%	+2.7p.p
ROIC (pre-tax)	24.9%	25.8%	-0.9p.p	19.3%	+5.6p.p

Net Operational Revenue

Our net operating revenue reached R$970,829 thousand in the quarter. The 4.4% drop compared to the same period last year is specifically due to the reduction in demand for distributed microgeneration, observed in our Solar Energy business. In all the other businesses, adherence to the business plan for the year is observed, and growth is in line with the Company's expectations.

Gross Profit

R$ thousands	2Q23	1Q23	∆ R$	∆%	2Q22	∆%
Net operating revenue	970,829	1,036,773	(65,944)	-6.4%	1,015,835	-4.4%
Cost of sales and services	(636,750)	(709,247)	72,497	-10.2%	(735,372)	-13.4%
Gross profit	334,079	327,526	6,553	2.0%	280,463	19.1%

Despite the drop in net operating revenue, gross profit grew by 19.1% in relation to the same period of the previous year and by 2.0% in relation to the first quarter of the year. The gross margin grows sequentially and reaches the level of 34.4%, which reflects (i) inventory turnover, which now incorporates operating gains and a portion of the new foreign exchange rate and (ii) composition of revenue, less dependent on of Solar Energy.

Operating Expenses

As well as in the first quarter of the year, there is a loss of operating efficiency, with expenses growing above revenue growth, reaching 22.2% of net operating revenue in the second quarter of 2023. Details are available in the table below:

R$ thousands	2Q23	1Q23	∆ R$	∆%	2Q22	∆%
Selling expenses	(144,930)	(135,828)	(9,102)	6.7%	(119,978)	20.8%
General and administrative expenses	(63,248)	(62,852)	(396)	0.6%	(50,122)	26.2%
Other operating expenses, net	(7,127)	(2,912)	(4,215)	144.7%	(6,835)	4.3%
Operating income (expenses)	(215,305)	(201,592)	(13,713)	6.8%	(176,935)	21.7%

On the other hand, with a clear perspective of new revenue level for the solar energy business, the company reorganized its structures throughout this quarter and accelerated synergies in internal processes, in order to bring expenses back to the historical levels of the operation.

EBITDA

With the improvement in gross margin offsetting the drop in revenue, our Ebitda margin grows 2.5 percentage points over the same period of the previous year and 0.3 percentage points sequentially.