MEXICO CITY–(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 2024.
Orbia delivered reported EBITDA of $222 million for the fourth quarter of 2024 and $1,097 million for full year 2024. Adjusted EBITDA for the fourth quarter was $273 million and was $1,189 million for the full year taking into account one-time legal and restructuring costs, which is more reflective of fundamental performance. These results align with recent guidance and demonstrate the Company’s commitment to operational and financial discipline amidst challenging current market dynamics.
Q4 2024 Financial Highlights
(All metrics are compared to Q4 2023 unless otherwise noted)
- Net revenues of $1,780 million increased 0.5%, driven by higher revenues in Precision Agriculture and Polymer Solutions, largely offset by lower revenues in Connectivity Solutions, Building & Infrastructure and Fluor & Energy Materials.
- EBITDA of $222 million decreased 2.0%, primarily driven by Fluor & Energy Materials, Connectivity Solutions and Building & Infrastructure. Reported EBITDA included one-time legal and restructuring costs of approximately $51 million. Excluding these items, Adjusted EBITDA was $273 million, an increase of 20.8%.
- Operating Cash Flow of $282 million decreased by $46 million. The decrease was mainly due to currency fluctuations and one-time charges related to legal and restructuring costs, partially offset by effective working capital management and lower taxes paid.
Full-Year 2024 Financial Highlights
(All metrics are compared to FY 2023 unless otherwise noted)
- Net revenues of $7,506 million decreased 9%, due to lower revenues across all segments.
- EBITDA of $1,097 million decreased 25%, driven by lower volumes and prices, partially offset by higher profitability in Precision Agriculture. Full-year EBITDA included one-time legal and restructuring costs of approximately $92 million. Excluding these items, Adjusted EBITDA was $1,189 million, a decrease of 18.5%
- Operating Cash Flow of $519 million decreased by $412 million. The decrease was due to lower EBITDA, currency fluctuations and one-time charges mainly related to legal and restructuring costs, partially offset by lower taxes paid.
- Dividends paid of $160 million decreased by $80 million.
“Global market conditions across Orbia’s business groups remained challenging in 2024 as the regions we operate in struggled to gain momentum in their economic recovery. Exiting 2024, we feel we have reached the bottom of the cycle and are keenly watching for signs of improvement, while positioning the business for recovery. Our response and focus in this environment has been to proactively manage the things that are within our control, while exercising strong financial discipline,” said Sameer Bharadwaj, CEO of Orbia.
Bharadwaj continued, “In our October call, we outlined and updated our plans to further strengthen Orbia’s financial position while continuing to invest in the Company’s significant long-term growth opportunities. These efforts include the execution of the Company’s cost optimization program, driving results from recently completed growth investments and improving balance sheet efficiency through tighter capex, non-core asset disposals and working capital management. We remain committed to the targets that we shared and are making progress on delivering on them. With these, we will continue to strengthen our balance sheet, reduce leverage and enable funding of focused growth opportunities.”
Q4 and Full-Year 2024 Consolidated Financial Information1
(All metrics are compared to Q4 and FY 2023 unless otherwise noted)
|
mm US$ |
Fourth Quarter |
Full-Year |
|||||||||||
| Financial Highlights |
2024 |
2023 |
% Var. |
2024 |
2023 |
% Var. |
|||||||
| Net sales |
1,780 |
1,772 |
0% |
7,506 |
8,204 |
-9% |
|||||||
| Cost of Sales |
1,396 |
1,391 |
0% |
5,758 |
6,032 |
-5% |
|||||||
| Selling, general and administrative expenses |
349 |
326 |
7% |
1,309 |
1,323 |
-1% |
|||||||
| Operating income |
35 |
55 |
-36% |
439 |
849 |
-48% |
|||||||
| EBITDA |
222 |
226 |
-2% |
1,097 |
1,460 |
-25% |
|||||||
| Adjusted EBITDA |
273 |
226 |
21% |
1,189 |
1,460 |
-19% |
|||||||
| EBITDA margin |
12.5% |
12.8% |
-27 bps |
14.6% |
17.8% |
-317 bps |
|||||||
| Financial cost (income) |
90 |
54 |
67% |
343 |
366 |
-6% |
|||||||
| Earnings (Loss) Before Taxes |
(57) |
3 |
N/A |
96 |
485 |
-80% |
|||||||
| Income tax |
(1) |
54 |
N/A |
(127) |
329 |
N/A |
|||||||
| Consolidated net (loss) income |
(56) |
(51) |
11% |
223 |
156 |
43% |
|||||||
| Net majority (loss) income |
(62) |
(71) |
-13% |
145 |
65 |
123% |
|||||||
| Operating cash flow |
282 |
328 |
-14% |
519 |
931 |
-44% |
|||||||
| Capital expenditures |
(131) |
(188) |
-30% |
(477) |
(658) |
-27% |
|||||||
| Free cash flow |
124 |
116 |
7% |
(64) |
176 |
N/A |
|||||||
| Net debt |
3,617 |
3,430 |
5% |
3,617 |
3,430 |
5% |
|||||||
Net revenues of $1,780 million in the fourth quarter increased 0.5%. For the full year 2024, net revenues of $7,506 million decreased 9%.
Revenues for the quarter were flat on a consolidated basis, with increases in Precision Agriculture, driven by better results in Brazil, India and Israel, and Polymer Solutions due to impacts from a planned plant turnaround in the prior year quarter. These increases were offset by declines in Connectivity Solutions, Building & Infrastructure and Fluor & Energy Materials. For the full year, revenues decreased across all business groups. Primary drivers of the decrease included lower volumes, lower prices and an unfavorable product mix in Connectivity Solutions, challenging market conditions in Europe and Latin America in Building & Infrastructure and lower derivatives volumes in Polymer Solutions.
Cost of goods sold of $1,396 million for the quarter increased slightly compared to the same quarter of the prior year. For the full year, cost of goods sold of $5,758 million decreased 5% compared to last year.
The slight increase in cost of goods sold for the quarter was driven primarily by higher raw material costs, partly offset by lower volumes and the benefits from cost savings initiatives and operational efficiencies. The decrease in cost of goods sold for the full year was mainly due to lower volumes and material costs, and the benefits of cost saving initiatives on conversion cost. Benefits achieved from cost savings and operational efficiencies during the year were approximately $42 million.
Selling, general and administrative expenses of $349 million for the quarter increased 7% compared to the same quarter of last year. As a percentage of sales, SG&A increased 116 basis points to 20%. For the full year, selling, general and administrative expenses of $1,309 million decreased 1% compared to last year. As a percentage of sales, SG&A increased 132 basis points to 17% for the full year.
The increase in selling, general and administrative expenses for the quarter was driven by one-time legal and restructuring charges as well as higher depreciation costs. The decrease for the full year was primarily due to cost control measures and favorable exchange rate effects, partially offset by one-time legal and restructuring charges and depreciation. Excluding depreciation and legal and restructuring costs, SG&A decreased by $94 million for the full year. Benefits achieved from cost savings during the year were approximately $66 million.
EBITDA of $222 million for the quarter decreased 2%, while EBITDA margin decreased 27 basis points to 12.5%. For the full year, EBITDA of $1,097 million decreased 25%, while EBITDA margin decreased 317 basis points to 14.6%. Excluding one-time legal and restructuring costs, adjusted EBITDA was $273 million in the quarter and $1,189 million for the full year, representing an increase of 21% and a decrease of 19%, respectively. EBITDA margin excluding one-time items was 15.3% in the quarter and 15.8% for the full year.
The decrease in EBITDA and EBITDA margin for both the quarter and full year was due to one-time costs, lower refrigerant volumes due to quota phase-down in Fluor & Energy Materials and lower prices and an unfavorable product mix in Connectivity Solutions. In addition, for the full year, Polymer Solutions EBITDA declined due to lower pricing.
Financial costs of $90 million for the quarter increased by $36 million year-over-year. For the full year, financial costs of $343 million decreased by $22 million from $366 million last year.
The increase in financial costs for the quarter was driven by the negative impact from currency fluctuations, primarily the depreciation of the Euro and Brazilian Real against the U.S. Dollar and lower interest income due to a lower cash balance. For the full year, the decrease in financial costs was driven by benefits from the depreciation of the Mexican Peso and flat interest income.
An Income Tax Benefit of $1 million was recognized for the quarter compared to an expense of $54 million in the same quarter in the prior year. For the full year, an income tax benefit of $127 million was recognized compared to income tax expense of $329 million in the prior year. The effective tax rate for the quarter and for the full year was 2% and negative 132%, respectively.
The change in the effective tax rate was primarily driven by the depreciation of the Mexican Peso against the U.S. Dollar, partly offset by inflation in Mexico and the recording of valuation allowances against deferred tax attributes. Excluding the impact of foreign exchange gains and losses, inflation, and valuation allowances, the annual effective tax rate was 36%.
Net loss to majority shareholders of $62 million in the quarter decreased by $9 million compared to the prior year. For the full year, net income to majority shareholders of $145 million increased 123% compared to the prior year. The increase was driven by income tax benefits, offset by a decrease in operating income.
Operating cash flow of $282 million in the quarter decreased 14% while free cash flow of $124 million increased by $8 million. For the full year, operating cash flow of $519 million decreased 44% while negative free cash flow of $64 million compared to positive $176 million in the prior year.
The decrease in operating cash flow in the quarter was driven by negative currency fluctuations and one-time charges, partially offset by lower cash taxes paid and effective working capital management. The increase in free cash flow was driven by a decrease in capital expenditures. For the full year, the decrease in operating cash flow was driven by lower EBITDA, negative currency fluctuations and one-time charges. The free cash flow decreased due to lower operating cash flow, partially offset by lower capital expenditures.
Net debt of $3,617 million included total debt of $4,626 million, less cash and cash equivalents of $1,009 million. The Company’s net debt-to-EBITDA decreased from 3.36 to 3.30x during the quarter. The decrease in the net debt-to-EBITDA ratio was driven by a decrease in net debt of $78 million during the quarter. Net debt-to-EBITDA at the end of 2024 using Adjusted EBITDA to better reflect underlying earnings, was 3.04x.
Q4 and Full-Year 2024 Revenues by Region
(All metrics are compared to Q4 and FY 2023 unless otherwise noted)
|
mm US$ |
Fourth Quarter |
Full-Year |
||||||||||||||
| Region |
2024 |
2023 |
% Var. Prev Year |
% Revenue |
2024 |
2023 |
% Var. Prev Year |
% Revenue |
||||||||
| North America |
597 |
745 |
-20% |
34% |
2,673 |
3,174 |
-16% |
36% |
||||||||
| Europe |
556 |
470 |
18% |
31% |
2,335 |
2,488 |
-6% |
31% |
||||||||
| South America |
383 |
352 |
9% |
22% |
1,536 |
1,550 |
-1% |
20% |
||||||||
| Asia |
193 |
165 |
17% |
11% |
735 |
781 |
-6% |
10% |
||||||||
| Africa and others |
51 |
40 |
28% |
3% |
227 |
211 |
8% |
3% |
||||||||
| Total |
1,780 |
1,772 |
0% |
100% |
7,506 |
8,204 |
-9% |
100% |
||||||||
Q4 and Full-Year 2024 Financial Performance by Business Group
(All metrics are compared to Q4 and FY 2023 unless otherwise noted)
Polymer Solutions (Vestolit and Alphagary), 32.6% of Revenues
Orbia’s Polymer Solutions business group (commercial brands Vestolit and Alphagary) focuses 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 |
Full-Year |
||||||||||
| Polymer Solutions |
2024 |
2023 |
% Var. |
2024 |
2023 |
% Var. |
||||||
| Total sales* |
593 |
577 |
3% |
2,529 |
2,699 |
-6% |
||||||
| Operating (loss) income |
4 |
(16) |
N/A |
90 |
128 |
-30% |
||||||
| EBITDA |
73 |
47 |
56% |
356 |
382 |
-7% |
||||||
| Adjusted EBITDA |
83 |
47 |
77% |
378 |
382 |
-1% |
||||||
| *Intercompany sales were $30 million and $45 million in Q4 24 and Q4 23, respectively. Full year intercompany sales were $157 million and $188 million in 2024 and 2023, respectively. | ||||||||||||
Revenues of $593 million for the quarter increased 3% and full-year revenues of $2,529 million decreased 6%. EBITDA of $73 million for the quarter increased 56% and EBITDA margin increased 418 basis points to 12.3%, while full-year EBITDA of $356 million decreased 7% and EBITDA margin decreased 7 basis points to 14.1%. Excluding one-time legal and restructuring costs, adjusted EBITDA was $83 million in the quarter and $378 million for the full year, representing an increase of 77% and a decrease of 1%, respectively. Adjusted EBITDA margin was 14.0% for the quarter and 14.9% for the year.
The increase in revenues for the quarter was driven by higher resins volumes due to the impact of the planned ethylene plant turnaround in the prior year results. This was partially offset by lower derivatives volumes and prices in Latin America. For the full year, the decrease in revenues was primarily driven by lower resin prices and derivatives volumes and prices, partly offset by higher resins volumes.
Fourth quarter EBITDA increased year-over-year, driven by higher resins volumes and lower raw materials and fixed costs, partially offset by lower prices and one-time restructuring expenses. For the full year, the decrease in EBITDA was driven primarily by lower revenue and one-time restructuring expenses, partly offset by benefits from cost-savings initiatives.
Building & Infrastructure (Wavin), 32.2% of Revenues
Orbia’s Building & Infrastructure business group (commercial brand Wavin) is redefining today’s pipes and fittings industry by creating solutions that last longer and perform better, all with less installation labor required. The business group benefits from supply chain integration with the Polymer Solutions business group, a customer base spanning three continents, and investments in sustainable, resilient technologies for water and indoor climate management.
|
mm US$ |
Fourth Quarter |
Full-Year |
||||||||||
| Building & Infrastructure |
2024 |
2023 |
% Var. |
2024 |
2023 |
% Var. |
||||||
| Total sales |
578 |
595 |
-3% |
2,497 |
2,678 |
-7% |
||||||
| Operating (loss) income |
14 |
11 |
24% |
130 |
142 |
-8% |
||||||
| EBITDA |
53 |
59 |
-10% |
274 |
284 |
-3% |
||||||
| Adjusted EBITDA |
65 |
59 |
11% |
291 |
284 |
3% |
||||||
Revenues of $578 million for the quarter decreased 3% and full-year revenues of $2,497 million decreased 7%. EBITDA of $53 million for the quarter decreased 10% and EBITDA margin decreased 69 basis points to 9.2%, while full-year EBITDA of $274 million decreased 3% and EBITDA margin increased 39 basis points to 11.0%. Excluding one-time legal and restructuring costs, adjusted EBITDA was $65 million in the quarter and $291 million for the full year, representing an increase of 11% and 3%, respectively. Adjusted EBITDA margin was 11.3% for the quarter and 11.7% for the year.
The decrease in revenues for the quarter was driven primarily by lower volumes in Latin America, primarily in Mexico and Central America, and Asia, partially offset by a slight improvement in Northern Europe. For the full year, the decrease in revenues was driven by lower volumes in Europe, mainly in Germany and France, and weaker demand in Latin America.
Fourth quarter EBITDA decreased year-over-year, driven by lower volumes and an unfavorable product mix and one-time legal and restructuring costs, partly offset by the benefit of cost reduction initiatives. For the full year, the decrease in EBITDA was driven primarily by lower volumes and prices and one-time legal and restructuring costs, partly offset by the benefit of cost reduction initiatives. The EBITDA margin improved due to the cost reduction benefits.
Precision Agriculture (Netafim), 13.4% of Revenues
Orbia’s Precision Agriculture business group’s (commercial brand Netafim) leading-edge irrigation systems, services and digital farming technologies enable stakeholders to achieve significantly higher and better-quality yields while using less water, fertilizer and other inputs. By helping farmers worldwide grow more with less, the business group is contributing to feeding the planet efficiently and sustainably.
|
mm US$ |
Fourth Quarter |
Full-Year |
||||||||||
| Precision Agriculture |
2024 |
2023 |
% Var. |
2024 |
2023 |
% Var. |
||||||
| Total sales |
266 |
250 |
6% |
1,038 |
1,063 |
-2% |
||||||
| Operating (loss) income |
(5) |
3 |
N/A |
6 |
13 |
-51% |
||||||
| EBITDA |
33 |
30 |
10% |
125 |
118 |
6% |
||||||
| Adjusted EBITDA |
36 |
30 |
20% |
133 |
118 |
13% |
||||||
Revenues of $266 million for the quarter increased 6% and full-year revenues of $1,038 million decreased 2%. EBITDA of $33 million for the quarter increased 10% and EBITDA margin increased 45 basis points to 12.5%, while full-year EBITDA of $125 million increased 6% and EBITDA margin increased 97 basis points to 12.1%. Excluding one-time legal and restructuring costs, adjusted EBITDA was $36 million in the quarter and $133 million for the full year, representing an increase of 20% and 13%, respectively. Adjusted EBITDA margin was 13.6% for the quarter and 12.8% for the year.
The increase in revenues for the quarter was primarily driven by Brazil, India and Israel, partially offset by Turkey. For the full year, the decrease in revenues was driven by weaker demand in the U.S. and Turkey, partially offset by higher sales in China, Israel, Brazil, Africa and the Middle East.
Fourth quarter EBITDA increased year-over-year, driven by higher revenues and cost saving efforts. For the full year, the increase in EBITDA was driven primarily by cost-saving efforts and improved operational efficiencies, partially offset by lower revenues.
Fluor & Energy Materials (Koura), 11.0% of Revenues
Orbia’s Fluor & Energy Materials business group (commercial brand Koura) provides fluorine and downstream products that support modern, efficient living. The business group owns and operates the world’s largest fluorspar mine and produces intermediates, refrigerants and propellants used in automotive, infrastructure, semiconductor, health, medicine, climate control, food cold chain, energy storage, computing and telecommunications applications.
|
mm US$ |
Fourth Quarter |
Full-Year |
||||||||||
| Fluor & Energy Materials |
2024 |
2023 |
% Var. |
2024 |
2023 |
% Var. |
||||||
| Total sales |
221 |
226 |
-2% |
862 |
918 |
-6% |
||||||
| Operating (loss) income |
9 |
54 |
-83% |
160 |
297 |
-46% |
||||||
| EBITDA |
33 |
69 |
-53% |
234 |
354 |
-34% |
||||||
| Adjusted EBITDA |
66 |
69 |
-6% |
270 |
354 |
-24% |
||||||
Revenues for the quarter of $221 million decreased 2% and full-year revenues of $862 million decreased 6%. EBITDA for the quarter of $33 million decreased 53% and EBITDA margin decreased to 14.8%, while full-year EBITDA of $234 million decreased 34% and EBITDA margin decreased to 27.1%. Excluding one-time legal and restructuring costs, adjusted EBITDA was $66 million in the quarter and $270 million for the full year, representing a decrease of 6% and 24%, respectively. Adjusted EBITDA margin was 29.7% for the quarter and 31.3% for the year.
The decrease in revenues for the quarter was primarily driven by lower minerals and refrigerants volumes. For the full year, the decrease in revenues was primarily driven by lower refrigerants volumes due to the quota phase-down in both the U.S. and Europe.
Fourth quarter EBITDA decreased year-over-year due to a reduction in volume and the impact of one-time legal expenses. For the full year, the decrease in EBITDA was primarily driven by lower revenues in refrigerant gases, the one-time legal expenses and higher raw materials costs, partly offset by cost control measures.
Connectivity Solutions (Dura-Line), 10.8% of Revenues
Orbia’s Connectivity Solutions business group (commercial brand Dura-Line) produces more than 500 million meters of essential and innovative connectivity infrastructure per year to bring a world’s worth of information everywhere. The business group produces telecommunications conduit, cable-in-conduit and other HDPE products and solutions that create physical pathways for fiber and other network technologies connecting cities, homes and people.
|
mm US$ |
Fourth Quarter |
Full-Year |
||||||||||
| Connectivity Solutions |
2024 |
2023 |
% Var. |
2024 |
2023 |
% Var. |
||||||
| Total sales |
171 |
188 |
-9% |
839 |
1,125 |
-25% |
||||||
| Operating (loss) income |
(0) |
14 |
N/A |
62 |
279 |
-78% |
||||||
| EBITDA |
13 |
34 |
-61% |
108 |
327 |
-67% |
||||||
| Adjusted EBITDA |
16 |
34 |
-52% |
117 |
327 |
-64% |
||||||
Revenues for the quarter of $171 million decreased 9% and full-year revenues of $839 million decreased 25%. EBITDA for the quarter of $13 million decreased 61% and EBITDA margin decreased to 7.8%, while full-year EBITDA of $108 million decreased 67% and EBITDA margin decreased to 12.9%. Excluding one-time legal and restructuring costs, adjusted EBITDA was $16 million in the quarter and $117 million for the full year, representing a decrease of 52% and 64%, respectively. Adjusted EBITDA margin was 9.5% for the quarter and 14.0% for the year.
The decrease in revenues for the quarter was driven by lower prices and an unfavorable mix, partly offset by increased volumes. For the full year, the decrease in revenues was driven by lower prices and an unfavorable mix.
Fourth quarter EBITDA decreased year-over-year primarily due to lower prices and unfavorable mix, partly offset by increased volumes and the benefits from cost control measures. For the full year, the decrease in EBITDA was primarily driven by lower volumes and prices, and an unfavorable mix, partly offset by benefits from cost controls.
Balance Sheet, Liquidity and Capital Allocation
For the full year, Orbia’s net debt-to-EBITDA ratio was 3.30x, which decreased from 3.36x at the end of the prior quarter. This decrease was driven by lower net debt of $78 million, with debt increasing by $22 million during the quarter, which was more than offset by a $100 million increase in cash. The Company had cash on hand of $1,009 million at year-end 2024.
Working capital decreased by $243 million during the quarter compared to a decrease of $198 million in the prior-year quarter. Working capital decreased by $105 million during the full year, compared to a decrease of $138 million in the prior year. Capital expenditures of $131 million during the quarter decreased 30% year-over-year and decreased 27% for the full year to $477 million. Spending for 2024 included ongoing maintenance spending and investments to support the Company’s targeted growth initiatives.
During the quarter, Orbia paid $40 million as the fourth installment of the ordinary dividend approved at the Annual Shareholders Meeting held on April 9, 2024. For the full year, the Company returned $160 million in dividends to shareholders.
2024 Sustainability Highlights
In 2024, Orbia continued to advance its sustainability strategy across its three core pillars — low-impact and resilient operations, sustainable solutions, and impactful ventures. Building on progress from the previous year, the Company expanded its renewable energy initiatives, signing cost competitive clean energy agreements in Europe and the U.S. and increasing on-site solar installations, including the launch of a solar array in Mexico, which generates 1,000 MWh annually.
Circularity remains a top priority for Orbia, with its pioneering take-back program, Vinyl in Motion, repurposing approximately 530 tons of PVC in 2024—now with an expanded reach into Mexico. By collecting PVC waste like IV bags, medicine blisters, and pipes, the Company is giving these materials a second life and decreasing the carbon footprint of new products.
Contacts
Investor Relations
Diego Echave
VP, Investor Relations
T: +1 619-742-6439
Media
Kacy Karlen
Chief Communications Officer
T: +1 865 410 3001
