Investor Presentaiton
October 12, 2021
MAIN RISKS ACROSS THE INDUSTRY
GBM
ENERGY AS KEY COMPONENT OF COSTS
The profitability of this industry is highly sensitive to energy costs, especially fluctuations in the prices of natural gas, which is the main fuel used for ceramic tiles production. According to our estimates, total
energy costs represent between 15 and 20% of the consolidated cost of goods sold, depending on the sales mix and the geographic location of plants, among others. Although historically natural gas prices have
trended down on account of vast supply in North America, its price has been very volatile on account of natural disasters or extreme weather conditions. Nevertheless, since all this affects industry players across
the board, they raise prices to compensate for those incremental costs—if permanent.
To provide some sensitivity, if natural gas prices go up by 10%, ceramic tile margins would contract between 50 and 100 bps., depending on the operation. What do we mean? Every business has its peculiarities. For
example, Vitromex is 100% ceramic tiles, so it is more exposed to energy, whereas LAMOSA and CERAMIC have other less energy-intensive business-like adhesives. Besides, since most of CERAMIC's footprint is
close to the U.S. border (Chihuahua), energy weighs less on its COGS, given the lower transport costs.
LAMOSA and CERAMIC EBITDA Mg. vs. Natural Gas Growth
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
LAMOSA EBITDA Mg. (Left Axis)
Nov-15
CERAMIC EBITDA Mg. (Left Axis)
Jan-16
Mar-16
May-16
Jul-16
Sep-16
Nov-16
Jan-17
Mar-17
May-17
Jul-17
Sep-17
Nov-17
Jan-18
Mar-18
May-18
Jul-18
Sep-18
Nov-18
Jan-19
Mar-19
May-19
Jul-19
Sep-19
Nov-19
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Natura Gas YOY % (Right Axis)
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
-20.0%
-40.0%
-60.0%
LAMOSA/CERAMIC: THE ROAD TO GROWTH IS PAVED WITH TILES. | 19View entire presentation