Metalfrio Solutions S.A. (FRIO3.SA) Earnings Call Transcript & Summary

Everyone, for the webcast related to the results of the second quarter of 2025 for Metalfrio Solutions. I invite you all to follow the set of slides that are made available in our website for this very purpose, which I will follow now starting with Slide #2, please. Here, you will see the highlights for the period, which was a very, very good second quarter of many records achieved for the company. Net revenue of BRL 702.1 million, versus BRL 608 million for the same quarter last year, which is 15.5% above with positive contributions coming from all regions. Gross profit for this quarter was BRL 124.6 million, 17.7% margin, against BRL 94.8 million in the same quarter of last year, reflecting a 15.6% gross margin. In terms of EBITDA for the second quarter of 2025, it increased by a remarkable 53.6%, reaching BRL 82.9 million, supported by the solid operating performance delivered by the region EMEA, and South America as well. EBITDA margin reached 11.8% in the second quarter, compared to 8.9% in the same quarter of the previous year. Net income came with a positive figure of BRL 27.3 million, compared to a net loss of BRL 9.8 million in the same period of last year. In the bottom portion of the slide, you see this chart that shows the key numbers for the quarter. The 15.5% net revenue growth, a 31.3% gross profit growth, a 54% EBITDA growth, coming to an EBITDA margin for the quarter of 11.8%, which is reportedly the best figure in our industry among the listed competences that we know of. Again, record net revenues of BRL 702 million for a quarter. Record EBITDA of BRL 82.9 million for a quarter, and record net profit for a quarter of BRL 27.3 million. Slide #3, please. You can see the participation of each region in the net revenue comparing same period last year to the second quarter of 2025. So you see pretty much stable across the year. And down below in the bars, you see the 15.5% growth coming to BRL 702 million for the quarter, with the majority of the contribution coming from EMEA, South America and kind of a stability from Central and North America. As per the semester in Slide #4, the participation of the different regions remain stable as you can see. And the growth of 19.5% for the semester also coming from, # 1, EMEA, #2 South America, and #3 Mexico, coming to BRL 1.246 billion for the semester. Moving to Slide #5, where you see the net revenue by region and by line of business. Looking at the picture for South America to the left of the slide, you see a growth in all the businesses, both products and services. And the highlight here is -- goes to the key account business that really picked up this year in comparison to the same period of last year. When we look at the picture for North and Central America in the center of the slide, please bear in mind that there is a 4 percentage points impact here on currency behind these stability numbers that are depicted here. There is a drop on numbers for services that is due to one specific big contract that this quarter was much softer than the same period of last year. At the right portion of the slide, you'll see the performance of EMEA with a solid 18.9% growth in revenues. It's important to note that a good portion of it comes from currency when translated into Brazilian real. But all in, the EMEA region showed this quarter a quite robust performance. Looking at the EBITDA breakdown per region in Slide #6, we can see a very different picture from the others. Here, it's clear the recovery that the EMEA region has posed in the quarter, gaining a lot more participation in the company's [ pizza ]. So you see there the big bar, BRL 83 million EBITDA, fourth quarter record figure for us with an 11.8% EBITDA margin, with a substantial contribution coming from EMEA out of our factory in Turkey. Looking at the breakdown of EBITDA per region on Slide #7. You see the picture is slightly different because the impact of the second quarter as seen in the previous slide has somehow been mitigated by the performance of the first quarter, bringing the contribution of each region to what you see here. It's 59% coming from South America, 29% from EMEA, 12% from Mexico. And here, the contribution to come to this BRL 136 million total EBITDA for the semester, contributions from EMEA and Brazil, reaching an EBITDA percentage for the semester of 10.9%. In Slide #8, we see the picture of our balance sheet comparing the second quarter of '24 to the second quarter of '25. Not many changes, but a much stronger balance sheet that we used to have 2 years ago, coming to a total balance sheet value of almost BRL 2 billion. We have BRL 440 million shareholders' equity. In Slide #9, you will see the effect of the dedication of the company to strengthen its balance sheet through cash generation and debt control. So you see a strong operational cash flow going on quarter after quarter, which allowed the leverage of the company to come back to a much more comfortable position with a ratio of net debt to EBITDA of 2.57 for the last 12 months. In our last slide, you see a different picture of the effort to strengthen the balance sheet, drop the leverage by optimizing cash management as a whole. The picture here shows a cash cycle reduction of a full 14 days from 72 to 57, comparing the same period of '24 and '25, with the big contribution come from receivables and stocks. Thank you so very much for your interest in Metalfrio Solutions. We are always available at the IR department here to clarify any doubt you might have. Have a good day. Thank you.