Grupo Rotoplas S.A.B. (AGUA) Q2 2025 earnings summary

Executive summary

• Sequential improvements in profitability and cash flow were achieved despite a volatile environment and challenging year-over-year comparisons in Mexico and Argentina, with the U.S. segment reaching positive EBITDA and double-digit revenue growth.

• Service platform, especially bebbia and RSA, showed strong growth, with bebbia surpassing 155,000 active subscribers and nearing break-even.

• Disciplined expense management, working capital optimization, and selective CapEx allocation contributed to sequential EBITDA margin improvement and reduced net debt.

• Sustainability initiatives advanced, including partnerships and community projects in Peru and Mexico to improve water access.

• Board approved a capital reimbursement of $0.25 per share, half the amount distributed in previous years, reflecting a cautious outlook.

Financial highlights

• Net sales for Q2'25 were MXN 2,945 million, down 1% year-over-year, but grew 12% sequentially; first half sales reached MXN 5,580 million, down 1% year-over-year.

• EBITDA for Q2'25 was MXN 369 million (12.5% margin), down 18% year-over-year but up 23% quarter-over-quarter; net income for Q2'25 was MXN 42 million, down 30% year-over-year but up 77% sequentially.

• Gross margin for Q2'25 was 41.3%, down 550 bps year-over-year; operating margin was 7%, down from 10% year-over-year.

• SG&A expenses decreased 7% year-over-year, improving as a percentage of sales from 36% to 34%.

• Cash and cash equivalents increased 14% year-over-year to MXN 762 million.

Outlook and guidance

• Management remains focused on profitability, cash flow improvement, and selective CapEx, with continued investments in technology and services for long-term growth.

• Softer comparison base expected in the second half, but management remains cautious due to ongoing uncertainty in consumer demand.

• No specific guidance provided for U.S. margins, but management expects stability and continued positive EBITDA.

• Margins in Mexico expected to remain under pressure due to slow construction and high rainfall; emerging businesses anticipated to continue growing.