Plascar Participações Industriais S A : Results 3Q2023

Earnings Release 3Q | 2023

Plascar Participacoes Industriais S.A. (Bovespa: PLAS3), through its subsidiary Plascar Ltda., is a Brazilian industry that for more than five decades has been operating in the plastic transformation market and development of parts and internal and external finishes for vehicles, being responsible for supplying high quality to most automakers installed in Brazil.

Currently, Plascar has four plants strategically positioned in the states of São Paulo and Minas Gerais, where it houses a range of injection molding machines with a closing force capacity of 70 to 3,200 tons, automatic and manual painting lines, chrome plating, injection, metal plating, welding and SMC presses, in addition to having its own tooling for mold construction.

Plascar's shareholding control is divided as follows:

11.25%

Other

Shareholders

7.12%

Postalis

21.64%

Deise Duprat V. Heller e Família

*Indirect controlled by Mapa Capital

59.99%

Pádua

IV*

Share Price 09/30/2023

PLAS3 - R$ 7.40

Share Numbers

Common Shares: 12,425

million

Market Value on

09/30/23

R$ 91.95 million

ADMINISTRATIVE COUNCIL

Andre Luiz Helmeister

Antonio Farina

Daniel Alves Ferreira

João Luís Gagliardi Palermo

Maria Gustava Heller Brito

Paulo André Porto Bilyk

Paulo Zimath

FISCAL COUNCIL

Charles Dimetrius Popoff

Francisco Eduardo de Queiroz Ferreira

Marcelo Ferreira do Nascimento

IR CONTACT

Rodrigo Cartagena do Amaral

CFO and Director of Investor

Relations [e-mail]

Rua Wilhelm Winter, nº 300 - Distrito Industrial - Jundiaí - SP CEP 13213-000

HIGHLIGHTS 3Q2023

Plascar Participações Industriais S.A.

R$ 35.3 million

-10.5% vs. 3Q2023

Gross Revenue

R$ 16.95 million

7.0% margin

EBITDA

Growth above the Market

-6.9% in vehicle production¹ in Brazil vs. 3Q23

+ 7.1% in gross revenue vs. 3Q23

¹ according to data from ANFAVEA

Performance in the Period

R$ thousands	3Q 2023	3Q 2022	Var %	9M 2023	9M 2022
Gross Revenue	306,143	285,978	7.1%	863,206	764,853
Net Revenue	242,399	233,259	3.9%	691,789	622,961
Gross Profit	35,337	39,461	(10.5%)	79,600	95,617
Gross Margin %	14.6%	16.9%	-2.3p.p.	11.5%	15.3%
EBITDA	16,950	19,889	(14.8%)	96,039	48,104
EBITDA Margin %	7.0%	8.5%	-1.5p.p.	13.9%	7.7%
Net losses	(30,833)	(23,516)	31.1%	51,127	(60,363)

Var %

12.9%

11.0%

-16.8%

-3.8p.p.

99.6%

6.2p.p.

184.7%

Management Comments

In the third quarter of 2023, the Company continued its revenue growth trajectory as observed in previous quarters, reflecting its commitment to its full recovery and sustainable growth. This progress is attributed to the large number of projects initiated in the last 12 months and the high volume of projects in development, which are expected to positively impact results in the coming years.

Despite a 6.8% drop in vehicle production in the country compared to the same period last year, we managed to maintain solid growth in revenues. This highlights the strength of our business strategy and our commitment to meeting customer needs in a challenging economic context.

In 3Q23, Plascar presented an 80% increase in Gross Profit compared to the previous quarter, indicating greater stability in production and a reduction in inefficiencies observed in the first half of 2023. Furthermore, we managed to achieve an EBITDA margin of 7%, reflecting our ability to manage costs efficiently in a dynamic business environment.

The Company's Management remains dedicated to exploring opportunities for growth and innovation, while maintaining a robust financial position. We are optimistic about our business strategy and confident that it will enable us to overcome market challenges and generate long-term sustainable value for our shareholders and business partners.

Automotive

Market

In the third quarter of 2023, vehicle production suffered a reduction of 6.92% compared to the same period of the previous year, as indicated by data from the National Association of Motor Vehicle Manufacturers (ANFAVEA), reaching a total of 619 thousand units produced. It is noted that trucks have contributed significantly to this decrease in production.

As for sales, there was a growth of 7.86% in 3Q23 compared to 3Q22, totaling a significant increase, even after the end of government incentives. Given these results, ANFAVEA decided to review its projections for the current year. The new forecast points to a total production of 2,732 thousand vehicles, which represents a modest increase of 0.1% compared to 2022, a downward revision when compared to the initial forecast of 2.2% growth.

Breaking down these projections by category, it is observed that growth in the production of light vehicles was adjusted from 4.2% to 3.2%, while truck production showed a more pronounced decline, going from a forecast drop of 20. 4% for a drop of 34.2%.

AUTOMOTIVE SCENE

3Q2023

3Q2022

Var %

Vehicle Production

619	665	-6.92%

Vehicle Sales

Source: ANFAVEA - BRASIL

631

585

7.86%

Plascar Net Revenue x Market Performance

698			665
	598		613			619
586	596			596
		536
		496
			233.3	225.2	224.3	225.1	242.4

75.2

192.8 196.9

142.3

91.7

1Q19	1Q20	1Q21	1Q22	2Q22	3Q22	4Q22	1Q23	2Q23	3Q23
		Net Revenue (BRL in thousands)		Vehicle Production - ANFAVEA ('000)

Net Revenue

Net Revenue growth in the third quarter of 2023 was 3.9% compared to the same period last year, reaching a total of R$242,399 thousand. This growth also represents an increase of 7.7% in relation to the previous quarter. Two main factors contributed to this positive result: the start of production of new projects and the adjustment in prices negotiated with our customers. Additionally, we highlight the growing contribution of our Caçapava unit which, despite operating at an increasing volume, has not yet reached its maximum capacity, and has had a significant contribution to the increase in Plascar's revenues.

NET Revenue (R$

thousands)

					242,399
3.9%		7.7%

233,259

225,123

3Q2022 2Q2023 3Q2023

It is important to highlight that, despite these encouraging results, we are adopting several internal strategies with the aim of further boosting our revenue and ensuring a sustainable economic-financial balance for the company. These strategies are essential to mitigate the risks associated with possible interruptions in automakers' production, whether due to a reduction in demand or a shortage of necessary components.

Performance by Business Area

In 3Q23, the share of each segment remained relatively stable in relation to the previous quarter, with a small increase of 2.36 percentage points in the share of light vehicles and non-automotive products at the expense of the production of heavy vehicles.

This decrease was already predicted due to the new Euro 6 rule that led to an increase in costs, causing automakers to adopt the strategy of increasing inventories last year while the rule was not yet in force. What also contributed to the increase in other areas was the start of relevant light vehicle projects and the export of non-automotive products, as well as the resumption of production stability after the decrease in inventories, causing September to have the highest daily average of production for the year.

Gross Revenue

6.13%	4.42%	5.49%	5.81%	4.47%	3.62%	3.75%
				24.57%	21.94%	19.58%

26.58%	32.91%	35.67%
	37.31%

			70.97%	74.44%	76.67%
67.29%
62.67%
58.86%
	56.88%

1Q22	2Q22		3Q22			4Q22	1Q23	2Q23	3Q23
			Light		Heavy			Non-Automotive

Profitability

The worsening of Gross Result and EBITDA in 3Q23 was 10.5% and 14.8%, respectively, compared to the same period of the previous year. This drop in margins was caused by the increase in production inefficiency in the face of a scenario of macroeconomic uncertainty and difficulties in production scheduling on the part of car manufacturers increase the unpredictability of production, making planning more difficult and, consequently, leading to a drop in margins.

Gross Result (R$	EBITDA (R$ thousands)
	thousands)
							-76.7%
		-10.5%
									72,816
39,461						-14.8%
	80.3%	35,337

19,602

19,889

16,950

3Q2022		2Q2023		3Q2023		3Q2022		2Q2023		3Q2023

In a comparison with the previous quarter, we can observe a positive result in Gross Profit, reflecting greater production stability. EBITDA fell, as the effects of the tax transaction with PGFN had an impact on Net Profit in the previous quarter.

Net Profit (Loss) (R$ thousands)

123,256

	1Q2022			2Q2022			3Q2022			4Q2022			1Q2023		2Q2023		3Q2023
-20,111	-16,736	-23,516	-36,758	-41,296		-30,833

Net Debt

Net Debt remains stable, reaching its best result since 3Q22. This improvement was due to the amortization of debts made throughout the quarter in accordance with the payment schedules.

Net Debt (R$ thousands)

444,182

191,860	210,618	197,510	189,854

118,075 104,556 126,506

4Q2018

4Q2019

4Q2020

4Q2021

4Q2022

1Q2023

2Q2023

3Q2023

The Net Debt and EBITDA ratio remained in line with the previous quarter, showing stability in the Company's leverage level.

Relação Dívida Líquida/EBITDA

7.3x

4.1x

3.4x

1.8x

1.84x

1.82x

4Q18

4Q19

4Q20

4Q21

4Q22

1Q23

2Q23

3Q23

-4.7x

-5.2x

Income Statements

Income statements for the years ending September 30, 2023 and 2022 (in thousands of reais)

		Individual	Consolidated
		09/30/2023	09/30/2022	09/30/2023	09/30/2022
Net operating revenue	-	-	691,789	622,961
Cost of goods sold	-	-	(612,189)	(527,344)
Gross profit / (loss)	-	-	79,600	95,617
Operating (expenses) and income
Selling expenses	-	-	(39,575)	(26,008)
General and administrative expenses	(1,446)	(1,360)	(60,592)	(60,378)
Equity pick-up	52,367	(59,145)	-	-
Other operating income/(expenses), net	-	-	72,961	(159)
Resultado operacional	50,921	(60,505)	(27,206)	(86,545)
Operating income before finance income (expenses)	50,921	(60,505)	52,394	9,072
Financial result
Finance income	(102)	(34)	(68,455)	(79,124)
Finance costs	308	176	7,958	10,468
		206	142	(60,497)	(68,656)
Loss before income and social contribution taxes	51,127	(60,363)	(8,103)	(59,584)
Deferred taxes	-	-	59,230	(779)
		-	-	59,230	(779)
Net loss for the period	51,127	(60,363)	51,127	(60,363)
Loss attributable to:
Controlling shareholders	-	-	51,127	(60,363)
		-	-	51,127	(60,363)