April 22, 2024
Finance

Orbia Announces Fourth Quarter and Full-Year 2023 Financial Results


MEXICO CITY, February 22, 2024–(BUSINESS WIRE)–Orbia Advance Corporation, S.A.B. de C.V. (BMV: ORBIA*) (“the Company” or “Orbia”) today released unaudited results for the fourth quarter and full year of 2023.

Orbia delivered EBITDA of $226 million for the fourth quarter of 2023 and $1.46 billion for the full year 2023, in line with recent guidance, demonstrating its resilience and ability to manage through a challenging market environment. Market conditions in the construction, infrastructure and capital investment sectors remained weak due to continued high interest rates and lower demand in China. Despite these pressures, for both the quarter and the year, Orbia maintained strong operating cash flows and a solid balance sheet.

Q4 2023 Financial Highlights

(All metrics are compared to Q4 2022 unless otherwise noted)

  • Net revenues of $1.8 billion decreased 16%, driven by lower sales in Polymer Solutions, Connectivity Solutions and Building & Infrastructure.

  • EBITDA of $226 million decreased 27%, driven by lower volumes and prices in certain segments, partially offset by higher profitability in Precision Agriculture and Building & Infrastructure.

  • Operating Cash Flow of $328 million decreased by $227 million due to lower EBITDA, partially offset by effective working capital management.

Full-Year 2023 Financial Highlights

(All metrics are compared to FY 2022 unless otherwise noted)

  • Net revenues of $8.2 billion decreased 15%, with lower sales in Polymer Solutions, Building & Infrastructure, and Connectivity Solutions, partially offset by higher sales in Fluor & Energy Materials.

  • EBITDA of $1.46 billion decreased 24%, driven by lower volumes and prices, partially offset by higher profitability in Fluor & Energy Materials.

  • Operating Cash Flow of $931 million decreased 16%, driven by lower EBITDA and partially offset by effective working capital management.

  • Dividends paid of $240 million decreased by $59 million. Dividends paid in 2022 included an extraordinary additional amount related to the Company’s very strong 2021 results.

  • Leverage ratio (net debt-to-EBITDA) increased from 1.65x to 2.35x, due to lower EBITDA.

“We entered 2023 cautiously optimistic, with good momentum in certain business groups. By the end of the second quarter, markets had softened in the global industrial and construction sectors due to prolonged high interest rates and compounded by market weakness in China. In response, we focused on what we could control: our operational, fiscal and commercial discipline and rigorous capital management. Supported by these actions, we continued to position the business for stronger performance once the market recovers,” said Sameer Bharadwaj, CEO of Orbia.

Bharadwaj continued, “Despite these headwinds, I’m proud of the progress we made on strategic and growth initiatives in 2023. We finalized a joint venture agreement with Syensqo (formerly Solvay) to create the largest polyvinylidene fluoride (PVDF) production facilities for battery materials in North America as well as a technology licensing agreement with Kanto Denka Kogyo for lithium hexafluorophosphate (LiPF6), a critical lithium-ion electrolyte salt. We also completed multiple capacity expansion and efficiency improvement projects across our business groups and are continuing to drive cross-business integration and portfolio expansions. As we look toward the near future, we will continue to focus on operational discipline, with performance, cost management and cash generation top-of-mind. We will also continue to execute on high value growth opportunities across our core industries while maintaining a strong balance sheet.”

Q4 and Full-Year 2023 Consolidated Financial Information1

(All metrics are compared to Q4 and FY 2022 unless otherwise noted)

 

mm US$

Fourth Quarter

January – December

Financial Highlights

2023

2022

%Var.

2023

2022

%Var.

Net sales

1,772

2,100

-16%

8,204

9,648

-15%

Selling, general and administrative expenses

326

349

-7%

1,323

1,241

7%

Operating income

55

160

-66%

849

1,328

-36%

EBITDA

226

308

-27%

1,460

1,909

-24%

EBITDA margin

12.8%

14.6%

-189 bps

17.8%

19.8%

-199 bps

Financial cost (income)

54

(54)

N/A

366

160

128%

Earnings before taxes

3

80

-96%

485

1,034

-53%

Income tax

54

101

-47%

329

369

-11%

Consolidated net (loss) income

(51)

(21)

141%

156

666

-77%

Net majority (loss) income

(71)

(36)

100%

65

567

-89%

Operating cash flow

328

555

-41%

931

1,107

-16%

Capital expenditures

(188)

(221)

-15%

(658)

(549)

20%

Free cash flow

116

308

-62%

176

466

-62%

Net debt

3,430

3,149

9%

3,430

3,149

9%

___________________

1 Unless noted otherwise, all figures in this release are derived from the Consolidated Financial Statements of the Company as of December 31, 2023 and are prepared in accordance with International Accounting Standards 34 “Interim Financial Reporting” of the International Financial Reporting Standards (IFRS), which have been published in the Bolsa Mexicana de Valores (BMV). See Notes and Definitions at the end of this release for further explanation of terms used herein.

Net revenues of $1,772 million in the fourth quarter decreased 16%. For the full-year 2023, net revenues of $8,204 million decreased 15%.

For the fourth quarter, the decrease in revenue was driven by a weaker market and planned plant maintenance in Polymer Solutions, weaker demand in Connectivity Solutions and lower pricing in Building & Infrastructure, partially offset by higher volume and pricing in Fluor & Energy Materials and stronger Asian markets for Precision Agriculture. For the full year, revenues were higher in Fluor & Energy Materials, particularly in refrigerants, but decreased across other businesses. Primary drivers of the year-over-year decrease included lower PVC and caustic soda pricing and volumes for Polymer Solutions, weaker demand in Europe, the Middle East and Africa (“EMEA”) for Building & Infrastructure and deferrals of customer projects due primarily to high interest rates in Connectivity Solutions.

Cost of goods sold of $1,391 million in the fourth quarter decreased 13%. For the full year, cost of goods sold of $6,032 million decreased 15%.

The decrease in cost of goods sold was driven primarily by lower volumes and raw material costs.

Selling, general and administrative expenses of $326 million in the fourth quarter decreased 7%. As a percentage of sales, SG&A increased 179 basis points to 18%. For the full year, selling, general and administrative expenses of $1,323 million increased 7%. As a percentage of sales, SG&A increased 326 basis points to 16%.

The decrease in selling, general and administrative expenses for the quarter was driven by lower variable compensation costs, partially offset by unfavorable exchange rate effects and restructuring costs. The increase for the full year was primarily due to inflation, investment in executing the Company’s growth strategy and the strengthening of the Mexican Peso and Colombian Peso.

EBITDA of $226 million in the quarter decreased 27%, while EBITDA margin decreased 189 basis points to 13%. For the full year, EBITDA of $1,460 million decreased 24%, while EBITDA margin decreased 199 basis points to 18%.

The decrease in EBITDA and EBITDA margin was due to lower prices and softer demand across most markets, particularly in Polymer Solutions, Building & Infrastructure and Connectivity Solutions. The decrease was partially offset by higher profitability in Fluor & Energy Materials.

Financial costs of $54 million in the quarter increased by $108 million from negative $54 million last year. For the full year, financial costs of $366 million increased by $206 million from $160 million last year.

The increase in financial costs was largely driven by adjustments in the valuation of put options associated with non-wholly-owned businesses, which resulted in $96 million less benefit during the quarter and $112 million for the full year. In addition, net interest payments in the quarter of $84 million increased by $36 million, driven by higher average debt balance in Mexican Pesos and the appreciation of the Mexican Peso. For the full year, net interest payments of $296 million increased by $91 million year over year, as a result of the impact from Mexican Peso appreciation and, additional debt mainly in Mexican Pesos at higher rates than the Company’s average interest rate. Foreign exchange losses increased year over year due to the appreciation of the Mexican Peso and other currencies. These factors were partially offset by higher interest income from an increase in the cash balance and higher short-term rates received.

Taxes of $54 million for the quarter decreased 47% compared to the prior year, driven by the impact of inflation and foreign exchange rate changes in Mexico. For the full year, taxes of $329 million decreased 11% compared to the prior year, and the effective tax rate was 68%, compared to 36% last year. The increase in the effective tax rate was driven by the appreciation of the Mexican Peso and by the impact of inflation in Mexico.

Net income to majority shareholders of negative $71 million in the quarter decreased by $35 million. For the full year, net income to majority shareholders of $65 million decreased 89%. For both periods, lower net income was largely due to the decrease in EBITDA and higher financial costs.

Operating cash flow of $328 million in the quarter decreased 41% while free cash flow of $116 million decreased by $192 million. For the full year, operating cash flow of $931 million decreased 16% while free cash flow of $176 million decreased 62%.

During the quarter, the decrease in operating cash flow was driven by lower EBITDA and higher interest paid. The decrease in free cash flow was driven by the lower operating cash flow. For the full year, the decrease in operating cash flow was driven by lower EBITDA, which was partially offset by effective working capital management and lower cash taxes paid, as well as positive currency fluctuations. The decrease in free cash flow was due to lower operating cash flow as well as higher capital expenditures driven by investments in growth.

Net debt of $3,430 million included total debt of $4,886 million, less cash and cash equivalents of $1,456 million. The Company’s net debt-to-EBITDA ratio increased from 1.65x to 2.35x year-over-year, driven by the decrease in EBITDA and an increase in debt mainly driven by the appreciation of the Mexican Peso during the year.

Q4 and Full-Year 2023 Revenues by Region

(All metrics are compared to Q4 and FY 2022 unless otherwise noted)

 

mm US$

Fourth Quarter

Region

2023

2022

% Var. Prev Year

% Revenue

North America

745

840

-11%

42%

Europe

470

644

-27%

27%

South America

352

368

-4%

20%

Asia

165

196

-16%

9%

Africa and others

40

53

-25%

2%

Total

1,772

2,100

-16%

100%

 

 

 

 

 

 

 

 

 

 

mm US$

January – December

Region

2023

2022

% Var. Prev Year

% Revenue

North America

3,174

3,606

-12%

39%

Europe

2,488

3,050

-18%

30%

South America

1,550

1,922

-19%

19%

Asia

781

812

-4%

10%

Africa and others

211

258

-18%

3%

Total

8,204

9,648

-15%

100%

Q4 and Full-Year 2023 Financial Performance by Business Group

(All metrics are compared to Q4 and FY 2022 unless otherwise noted)

Polymer Solutions (Vestolit and Alphagary), 32% of Revenues

Orbia’s Polymer Solutions business group (commercial brands Vestolit and Alphagary) focus on general purpose and specialty PVC resins (polyvinyl chloride), PVC and zero-halogen specialty compounds with a wide variety of applications in everyday products for everyday life, from pipes and cables to household appliances and medical devices. The business group supplies Orbia’s downstream businesses and a global customer base.

mm US$

Fourth Quarter

January – December

Polymer Solutions

2023

2022

%Var.

2023

2022

%Var.

Total sales*

577

735

-21%

2,699

3,696

-27%

Operating (loss) income

(16)

37

N/A

128

549

-77%

EBITDA

47

101

-54%

382

804

-53%

*Intercompany sales were $45 million and $33 million in Q4 23 and Q4 22, respectively.
Full year intercompany sales were $188 million and $232 million in 2023 and 2022, respectively.

Fourth quarter revenues of $577 million decreased 21% and full-year revenues of $2,699 million decreased 27%. For the quarter, EBITDA of $47 million decreased 54% and EBITDA margin decreased 561 basis points to 8%, while full-year EBITDA of $382 million decreased 53% and EBITDA margin decreased 762 basis points to 14%.

The decrease in revenues for the quarter was driven primarily by lower volumes due to a planned turnaround and associated delay in the Company’s ethylene joint venture plant that impacted PVC production, as well as lower specialty PVC and caustic soda prices driven by weaker demand, and excess availability in the export market. For the full year, the decrease in revenues was driven by lower volumes and prices due to weaker demand and raw material supply shortage in the Americas due to operational issues at one of our suppliers and from the extended ethylene joint venture plant turnaround.

Both fourth quarter and full-year EBITDA decreased year-over-year, driven by lower PVC and caustic soda volume and prices, maintenance turnaround impacts, expenses related to strategic growth projects and the translation effect of the stronger Mexican Peso and Colombian Peso on fixed costs. These same factors drove the operating (loss) income for the quarter and year, with the fourth quarter loss primarily due to the impact of the maintenance turnaround in the quarter.

Building & Infrastructure (Wavin), 31% of Revenues

Orbia’s Building & Infrastructure business group (commercial brand Wavin) is redefining today’s pipes and fittings industry by creating solutions that last longer and perform better, all with less installation labor required. The business group benefits from supply chain integration with the Polymer Solutions business group, a customer base spanning three continents, and investments in sustainable, resilient technologies for water and indoor climate management.

mm US$

Fourth Quarter

January – December

Building & Infrastructure

2023

2022

%Var.

2023

2022

%Var.

Total sales

595

661

-10%

2,678

2,926

-8%

Operating income

11

12

-7%

142

193

-27%

EBITDA

59

47

0

284

321

-12%

Fourth quarter revenues of $595 million decreased 10% and full year revenues of $2,678 million decreased 8%. For the quarter, EBITDA of $59 million increased 25% and EBITDA margin increased 277 basis points to 10%, while full-year EBITDA of $284 decreased 12% and EBITDA margin decreased 39 basis points to 11%.

The decrease in revenues for the quarter was primarily driven by lower volumes in EMEA and lower prices due to lower raw material costs. For the full year, the decrease in revenues was primarily driven by lower demand in EMEA which was partially offset by volume improvements in Latin America, Asia, and North America, as well as lower prices.

Fourth quarter EBITDA increased year-over-year mainly driven by improved margins and cost optimization across the business. Full year EBITDA declined due to lower volumes, higher logistics and transportation costs and one-time costs related to business optimization.

​​Connectivity Solutions (Dura-Line), 13% of Revenues

Orbia’s Connectivity Solutions business group (commercial brand Dura-Line) produces more than 500 million meters of essential and innovative connectivity infrastructure per year to bring a world’s worth of information everywhere. The business group produces telecommunications conduit, cable-in-conduit and other HDPE products and solutions that create physical pathways for fiber and other network technologies connecting cities, homes and people.

mm US$

Fourth Quarter

January – December

Connectivity Solutions

2023

2022

%Var.

2023

2022

%Var.

Total sales

188

317

-41%

1,125

1,370

-18%

Operating income

14

76

-82%

279

321

-13%

EBITDA

34

84

-60%

327

357

-8%

Fourth quarter revenues of $188 million decreased 41% and full year revenues of $1,125 million decreased 18%. For the quarter, EBITDA of $34 million decreased 60% and EBITDA margin decreased 854 basis points to 18%, while full-year EBITDA of $327 million decreased 8% and EBITDA margin increased 299 basis points to 29%.

For the fourth quarter, revenues were lower, primarily driven by lower demand, lower prices and an unfavorable product mix. For the full year, revenues were lower due to lower demand driven by higher interest rates. These elevated interest rates correlated with customer project delays as well as inventory buildup in the supply chain.

Fourth quarter EBITDA was lower due to weak demand, lower pricing, and lower absorption of fixed operating costs. This was partially offset by lower raw material costs and cost controls. For the full-year, the decrease in EBITDA was driven by a slowdown in demand in the second half due to high interest rates and the timing of availability of public funding, coupled with lower prices.

Precision Agriculture (Netafim), 13% of Revenues

Orbia’s Precision Agriculture business group’s (commercial brand Netafim) leading-edge irrigation systems, services and digital farming technologies enable stakeholders to achieve significantly higher and better-quality yields while using less water, fertilizer and other inputs. By helping farmers worldwide grow more with less, the business group is contributing to feeding the planet efficiently and sustainably.

mm US$

Fourth Quarter

January – December

Precision Agriculture

2023

2022

%Var.

2023

2022

%Var.

Total sales

250

229

9%

1,063

1,085

-2%

Operating income (loss)

3

(29)

N/A

13

19

-32%

EBITDA

30

(4)

N/A

118

119

-1%

Fourth quarter revenues of $250 million increased 9% and full year revenues of $1,063 million decreased 2%. For the quarter, EBITDA of $30 million increased by $34 million and EBITDA margin increased to 12%, while full-year EBITDA of $118 million remained relatively flat, with EBITDA margin increasing approximately 13 basis points to 11%.

Quarterly revenues increased due to strong performance in certain Asian and Latin American markets. Full-year revenues were lower, driven by a slowdown in demand in Europe and Africa, the impact of extreme weather conditions in the U.S. and lower customer investment in irrigation systems due to both high interest rates and weak crop prices. These factors were partially offset by strong results in Mexico, Brazil, China, India and Turkey.

For the quarter, EBITDA improved, driven by higher revenues and lower raw material costs as compared to last year, as well as the absence of one-time costs included in the prior year. For the full year and despite the slight decrease in revenues year-over-year, EBITDA remained flat, driven by favorable raw material prices and tight cost control.

Fluor & Energy Materials (Koura), 11% of Revenues

Orbia’s newly renamed Fluor & Energy Materials business group (commercial brand Koura) provides fluorine and downstream products that support modern, efficient living. The business group owns and operates the world’s largest fluorspar mine and produces intermediates, refrigerants and propellants used in automotive, infrastructure, semiconductor, health, medicine, climate control, food cold chain, energy storage, computing and telecommunications applications.

mm US$

Fourth Quarter

January – December

Fluorinated Solutions

2023

2022

%Var.

2023

2022

%Var.

Total sales

226

201

12%

918

852

8%

Operating income

54

51

6%

297

248

20%

EBITDA

69

65

7%

354

305

16%

Fourth quarter revenues of $226 million increased 12% and full-year revenues of $918 million increased 8%. For the quarter, EBITDA of $69 million increased 7% and EBITDA margin decreased 133 basis points to 31%, while full-year EBITDA of $354 million increased 16% and EBITDA margin increased 276 basis points to 39%.

Revenues for the quarter increased year-over-year driven by higher volumes and favorable pricing conditions in refrigerants and medical propellants. For the full year, revenues increased year-over-year, reflecting strong pricing across the product portfolio combined with higher volumes.

Fourth quarter EBITDA increased driven by higher volumes and prices, which offset higher labor costs and unfavorable currency fluctuations. For the full year, EBITDA increased due to strong pricing across the product portfolio.

Balance Sheet, Liquidity and Capital Allocation

Orbia continued to maintain a strong balance sheet throughout 2023. The net debt-to-EBITDA ratio increased from 1.65x to 2.35x year-over-year due to a reduction in EBITDA and increase in debt, mainly driven by the appreciation of the Mexican Peso during the year. The Company had cash on hand of approximately $1.5 billion at year-end 2023.

During the quarter, Orbia paid down approximately $31 million in borrowings, which is reflected in the Company’s cash flow statement. During the year, Orbia completed the issuance of sustainability linked notes of MXN 10 billion (approximately $590 million), setting another milestone in its commitment to sustainable financing. Of the total amount, MXN 2.1 billion will mature in December 2025 and MXN 7.9 billion in November 2032. The proceeds of these notes were primarily used to refinance short-term debt maturities in Mexican Pesos.

Working capital decreased by $198 million during the quarter compared to a decrease of $289 million in the prior-year quarter. Working capital decreased by $138 million during the full year, compared to an increase of $33 million in the prior year. Capital expenditures of $188 million during the quarter decreased 15% year-over-year and increased 20% for the full year to $658 million, which included ongoing maintenance spending and investments to support the Company’s growth initiatives.

During the quarter, Orbia paid $60 million as the fourth installment of the ordinary dividend approved at the Annual Shareholders Meeting held on March 30, 2023. For the full year, the Company returned $240 million in dividends to shareholders.

2023 Sustainability Highlights

Orbia continued to deliver on the 3 pillars of its sustainability strategy – low impact and resilient operations, sustainable solutions and impactful ventures. In 2023, we increased renewable energy consumption by 52% year over year and reduced our scope 1 & 2 emissions by 28% compared to baseline, making progress towards our 2030 commitments of 47% reduction. Additionally, we surpassed our commitment to the Sustainability Linked Bond framework by 25%, decreasing SOx emissions by 85%.

Recognition from well-known third parties in 2023 continued to be encouraging. We maintained our position in the Dow Jones Sustainability Indices (DJSI). We were upgraded by MSCI for the second consecutive year, for our sustainability performance, improved our Sustainalytics rating and earned a gold medal from EcoVadis.

Through our operations, solutions and investments we aspire to maximize our positive impact and help our customers do the same.

2024 Outlook

As a global company with a strong presence in the building, infrastructure and construction markets, Orbia is affected by world events, interest rate levels and the performance of major economies. Despite weak volumes and pricing, the Company maintained or improved its market positions across our businesses in 2023. The Company’s 2024 outlook reflects some anticipated recovery in industrial and construction activity in certain regions late in the year, tied to an expected reduction in interest rates. The Company will continue to focus on revenue generation, operational and commercial excellence, cash generation and managing performance factors within its control.

For 2024, full-year EBITDA is likely to be in the range of $1.35 billion to $1.45 billion, with market weakness expected to continue in the first half of the year and potential recovery in the second half of the year.

Capital investments will be managed tightly during the year, ensuring that spending related to safety and integrity of operations is a priority, as well as that dedicated to a limited number of critical growth projects. The Company anticipates capital expenditures to be in the $600 million to $700 million range for 2024.

We would also like to update our views on PVC supply and demand, and the impact on our current view on potential capacity expansion investments. Given the weak real estate and construction markets in China, more than 2 million tonnes of PVC is being exported, which could continue for two to three years. In that context, after we complete the current phase of engineering, we will pause PVC capacity expansion investments until we see the markets supporting strong investment economics.

The Company estimates an effective tax rate of 29% to 32%2 in 2024.

For each of Orbia’s businesses the Company is assuming the following:

  • Polymer Solutions: We expect the challenging market environment to continue in 2024, with slow housing demand and oversupplied export markets, but anticipate the market trending upwards in the second half of the year. Lower interest rates late in the year are expected to drive some improvement in PVC volumes and prices, which are expected to be partially offset by low caustic soda prices.

  • Building & Infrastructure: We expect continued challenges across parts of EMEA in 2024, partially mitigated by demand recovery due to expected lower interest rates. We expect profitability improvements from cost optimization initiatives, overall growth in market share and, continued product portfolio expansion.

  • Connectivity Solutions: Fiber deployment is expected to accelerate in the second half of 2024 and beyond, as U.S. federal investment incentive funds are deployed and private investment ramps up with the anticipated easing of inflationary pressures.

  • Precision Agriculture: We expect improvement in demand in EMEA, while China and India are expected to remain strong in 2024. We will continue to focus on developing growth initiatives particularly in extensive crops, digital farming and cross business integration, while optimizing production and managing costs.

  • Fluor & Energy Materials: Volumes are expected to be lower in 2024 compared to 2023 as a result of a quota step-down of refrigerant gases in certain regions. We will optimize value realization of our quota in regulated markets and from existing products and applications. We will also continue introducing new, lower global warming potential, refrigerants and medical propellants. In addition, we will maintain control on spending and capital investments, only dedicating resources to critical initiatives.

In order to maintain the flexibility to invest in critical growth projects, especially in energy materials, while preserving a healthy balance sheet, the Company’s Board of Directors has approved and intends to recommend to its shareholders for their approval at Orbia’s next Annual General Meeting of Shareholders, an aggregate ordinary dividend payment of $160 million for 2024.

The Company’s Board of Directors has also approved and intends to recommend for shareholder approval to establish a fund for the repurchase of shares for an amount equal to the total balance of the Company’s net profits as of December 31, 2023 and including those withheld from previous years.

__________________

2 Excluding the impact of inflation and foreign exchange rate changes in Mexico.

Conference Call Details

Orbia will host a conference call to discuss Q4 and Full Year 2023 results on February 22, 2024, at 9:00 AM Central Time (CT; Mexico City)/10:00 AM Eastern Time (ET; New York). To access the call, please dial 001-855-817-7630 (Mexico), 1-888-339-0721 (United States) or 1-412-317-5247 (International).

Participants may pre-register for the conference call here.

The live webcast can be accessed here.

A recording of the webcast will be posted several hours after the call is completed on Orbia’s website.

For all company news, please visit www.orbia.com/this-is-orbia/newsroom.

Consolidated Income Statement

mm US$

Fourth Quarter

January – December

Income Statement

2023

2022

%

2023

2022

%

Net sales

1,772

2,100

-16%

8,204

9,648

-15%

Cost of sales

1,391

1,591

-13%

6,032

7,079

-15%

Gross profit

381

509

-25%

2,172

2,569

-15%

Selling, general and administrative expenses

326

349

-7%

1,323

1,241

7%

Operating income

55

160

-66%

849

1,328

-36%

Financial cost (income)

54

(54)

N/A

366

160

128%

Equity in income of associated entity

2

1

144%

2

3

-21%

Impairment expense

136

N/A

136

N/A

Income from continuing operations before income tax

3

80

-96%

485

1,034

-53%

Income tax

54

101

-47%

329

369

-11%

Income (loss) from continuing operations

(51)

(21)

141%

156

666

-77%

Discontinued operations

N/A

(1)

N/A

Consolidated net (loss) income

(51)

(21)

141%

156

665

-77%

Minority stockholders

20

15

34%

91

99

-7%

Majority Net (loss) income

(71)

(36)

100%

65

567

-89%

 

 

 

 

 

 

EBITDA

226

308

-27%

1,460

1,909

-24%

Consolidated Balance Sheet

mm US$

Balance sheet

Dec 2023

Dec 2022

Total assets

11,552

11,624

Current assets

4,170

4,584

Cash and temporary investments

1,456

1,546

Receivables

1,461

1,229

Inventories

1,200

1,320

Others current assets

53

489

Non current assets

7,382

7,040

Property, plant and equipment, net

3,370

3,170

Right of use fixed assets, net

469

358

Intangible assets and goodwill

3,148

3,105

Long-term assets

395

408

Total liabilities

8,334

8,301

Current liabilities

2,537

3,045

Current portion of long-term debt

466

760

Suppliers

1,228

1,279

Short-term leasings

106

84

Other current liabilities

737

923

Non current liabilities

5,797

5,256

Long-term debt

4,420

3,936

Long-term employee benefits

139

137

Long-term deferred tax liabilities

359

373

Long-term leasings

383

285

Other long-term liabilities

496

525

Consolidated shareholders’equity

3,218

3,324

Minority shareholders’ equity

604

655

Majority shareholders’ equity

2,614

2,668

Total liabilities & shareholders’ equity

11,552

11,624

Cash Flow Statement

Fourth Quarter

January – December

mm US$

2023

2022

%Var.

2023

2022

% Var.

EBITDA

226

308

-27%

1,460

1,909

-24%

Taxes paid, net

(67)

(70)

-5%

(409)

(504)

-19%

Net interest / bank commissions

(84)

(48)

76%

(296)

(205)

45%

Change in trade working capital

198

289

-32%

138

(33)

N/A

Others (other assets – provisions, Net)

39

16

150%

(71)

(38)

85%

CTA and FX

16

61

-74%

110

(21)

N/A

Operating cash flow

328

555

-41%

931

1,107

-16%

Capital expenditures

(188)

(221)

-15%

(658)

(549)

20%

Leasing payments

(25)

(26)

-5%

(98)

(92)

7%

Free cash flow

116

308

-62%

176

466

-62%

FCF conversion (%)

51.3%

100.0%

 

12.1%

24.4%

 

Dividends to shareholders

(60)

(75)

-20%

(240)

(299)

-20%

Buy-back shares program

(13)

(0)

N/A

8

(142)

N/A

Debt

(31)

465

N/A

67

1,135

-94%

Minority interest payments

(29)

(36)

-20%

(129)

(141)

-9%

Mergers & acquisitions

(8)

-100%

(8)

(225)

-96%

Financial instruments and others

(13)

(4)

190%

35

(28)

N/A

Net change in cash

(30)

649

N/A

(91)

765

N/A

Initial cash balance

1,486

897

66%

1,547

782

98%

Cash balance

1,456

1,546

-6%

1,456

1,546

-6%

Notes and Definitions

The results contained in this release have been prepared in accordance with International Financial Reporting Standards (“NIIF” or “IFRS”) with U.S. Dollars as the reporting currency. Figures are presented in millions, unless specified otherwise.

Figures and percentages have been rounded and may not add up.

About Orbia

Orbia Advance Corporation, S.A.B. de C.V. (BMV: ORBIA*) is a company driven by a shared purpose: to advance life around the world. Orbia operates in the Polymer Solutions (Vestolit and Alphagary), Building & Infrastructure (Wavin), Precision Agriculture (Netafim), Connectivity Solutions (Dura-Line) and Fluor & Energy Materials (Koura) sectors. The five Orbia business groups have a collective focus on expanding access to health and well-being, reinventing the future of cities and homes, ensuring food, water and sanitation security, connecting communities to information and enabling the energy transition with basic and advanced materials, specialty products and innovative solutions. Orbia has a global team of over 24,000 employees, commercial activities in more than 100 countries and operations in over 50, with global headquarters in Boston, Mexico City, Amsterdam and Tel Aviv. The company generated $8.2 billion in revenue in 2023. To learn more, visit: orbia.com

Prospective Information

In addition to historical information, this press release contains “forward-looking” statements that reflect management’s expectations for the future. The words “anticipate,” “believe,” “expect,” “hope,” “have the intention of,” “might,” “plan,” “should” and similar expressions generally indicate comments on expectations. The forward-looking statements included in this press release are subject to a number of material risks and uncertainties, and our results may be materially different from current expectations due to factors, which include, but are not limited to, global and local changes in politics, economic factors, business, competition, market and regulatory factors, cyclical trends in relevant sectors as well as other factors affecting our operations, markets, products, services and prices that are highlighted under the title “Risk Factors” in the annual report submitted by Orbia to the Mexican National Banking and Securities Commission (CNBV) and available on our website at https://www.orbia.com/investor-relations/financial-reports/annual-reports-and-filings/. The forward-looking statements included herein represent Orbia’s views as of the date of this press release. Orbia undertakes no obligation to revise or update publicly any forward-looking statement for any reason unless required by law.”

Orbia has implemented a Code of Ethics that helps define our obligations to and relationships with our employees, clients, suppliers, and others. Orbia’s Code of Ethics is available for consultation at the following link: http://www.Orbia.com/Codigo_de_etica.html. Additionally, according to the terms contained in the Mexican Securities Exchange Act No 42, the Orbia Audit Committee has established a “hotline” system permitting any person who is aware of a failure to adhere to applicable operational and accounting records guidelines, internal controls or the Code of Ethics, whether by the Company itself or any of its controlled subsidiaries, to file a complaint (including anonymously). This system is operated by an independent third-party service provider. The system may be accessed via telephone in Mexico, via internet at www.ethics.orbia.com or via email at ethics@orbia.com. Orbia’s Audit Committee has oversight responsibility for ensuring that all such complaints are appropriately investigated and resolved.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240221707370/en/

Contacts

Investors
Diego Echave, Vice President of Investor Relations
+1 858-283-6201
investors@orbia.com

Media
Kacy Karlen, Chief Communications Officer
+1 865-410-3001
kacy.karlen@orbia.com



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