After an excellent performance in 2020, the Brazilian ceramic group posted 70.7% growth in revenues in the first half of 2021. The start-up of the new factory in Tennessee is confirmed for 2023.
Following double-digit growth in net revenues in 2020 (+19.5%) to R$1.33 billion (approximately US$256 million), Brazil’s largest ceramics group Portobello saw a further surge in momentum in 2021, closing the first half of the year with sales of R$880.7 million (approximately US$178 million), up 70.7% on the first half of 2020.
EBITDA increased almost fourfold to R$163.4 million in the first half of the year (up 324.3% on 2020), reaching 18.5% of revenues, while net profit rose by 287.7% to R$80.7 million.
The excellent results achieved during these extremely challenging 18 months by the Tijucas (SC) based group led by Chairman Cesar Gomes Jr. and CEO Mauro do Valle Pereira are attributable to the company’s rapid response to the severe global crisis, an improved production mix that has enabled it to raise its sales prices, and a successful business model focused on both international expansion and a strong domestic market presence through the group’s four business units. Moreover, all of the business units have reported growth over the past year and a half: Portobello (+14% in 2020 and +59% in the first half of 2021); Pointer, the Group’s democratic design brand (+31% and +124.5%, respectively); Portobello Shop, the chain of 136 stores (119 franchises and 17 owned) which reported sales growth of 14.6% last year and 77.4% in the first half of 2021, partly due to the 11 recent new openings; and Portobello America, the US sales company whose revenues grew by 86% in 2020 (+42% in dollar terms due to currency depreciation) and 49.3% in the first half of 2021 (or +36% in dollars).
Domestic sales accounted for 79% of total revenues, up 15.7% in 2020 (well above the national average of 3.6% growth in volume terms) and 69.9% in the first half of 2021 (R$693.6 million). Following a 36% increase in 2020 (+4% in dollar terms due to exchange rate effects), exports grew by 73.6% in the first six months of 2021 (R$187.1 million, or US $34.8 million, +56%) thanks to the expansion of distribution operations in the United States and the greater international presence of the Portobello and Pointer Business Units.
During the 18 months dominated by the pandemic, the Brazilian group also stepped up its investments, which grew by 42% in 2020 (R$134.5 million, around $26 million) and continued in the first half of 2021 with a further R$55.7 million. More than half of the resources invested in the two-year period were allocated to capacity expansion at the Tijucas plant, with the installation of a new line for large glazed porcelain tiles belonging to the Slabs collection launched in 2019. The remainder was used to expand the Portobello Shop chain and to upgrade the Pointer factory in the Marechal Deodoro industrial park.
But the most eagerly awaited investment, which was confirmed by Portobello at the end of July, is the forthcoming construction of a new factory near Nashville, Tennessee at a cost of around US $80 million and scheduled to start up in 2023.
The short-term outlook remains positive thanks to the strong performance of residential construction. The group’s top management is expecting similar third quarter results to those of the second quarter and despite the increased pressure on costs (mainly energy, gas and raw materials) is aiming to keep EBITDA at around 40% through a combination of higher prices, improved product mix and productivity, and strict management of operating costs.