PBG (PTBL3) Q3 2020 earnings summary

Executive summary

• Achieved record sales in 3Q20, with net revenue up 39.9% year-over-year to R$414.7 million and three consecutive sales records.

• Outperformed retail and sector market growth, gaining market share, with strong performance in both domestic and international markets, especially in the US due to Portobello America ramp-up.

• Adjusted and recurring EBITDA reached R$61.2 million in 3Q20, up 156.9% year-over-year, with margin improvement of 6.8 p.p.

• Adjusted and recurring net profit was R$30.2 million in 3Q20, a 402.2% increase over 3Q19.

• Net debt reduced to R$460.8 million, with leverage (Net Debt/EBITDA) down to 3.5x, a 48.6% improvement year-over-year.

Financial highlights

• Net revenue: R$414.7 million in 3Q20 (+39.9% YoY); R$930.7 million in 9M20 (+14.5% YoY).

• Adjusted and recurring gross margin: 37.0% in 3Q20 (+5.0 p.p. YoY), reaching 39.2% in September.

• Adjusted and recurring EBITDA: R$61.2 million in 3Q20 (+156.9% YoY); R$99.8 million in 9M20 (+108.7% YoY).

• Adjusted and recurring net profit: R$30.2 million in 3Q20 (+402.2% YoY); R$51.5 million in 9M20 (+205.4% YoY).

• Working capital: R$259.3 million, down R$34.1 million YoY; cash conversion cycle improved by 33 days to 63 days.

Outlook and guidance

• Strong demand for construction materials expected to continue, driven by low interest rates, increased financing, and real estate activity.

• Inflationary pressures on costs remain a concern for margins and pricing in coming months.

• Gradual resumption of investments while preserving cash position and maintaining cash discipline.

• Continued focus on cash management, working capital, and debt reduction.

• Positive market and company performance indicators in October confirm growth trend.