6-K
Ambipar Emergency Response (AMBIQ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October, 2023
Commission File Number: 001-41638
AMBIPAR EMERGENCY RESPONSE
(Exact name of registrant as specified in itscharter)
Avenida Angélica, nº 2346, 5thFloor
São Paulo, São Paulo, Brazil,01228-200
Tel: +55 (11) 3526-3526
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Yes ¨ No x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Yes ¨ No x
EXHIBIT INDEX
| Exhibit No. | Description of Exhibit |
|---|---|
| 99.1 | Second Quarter 2023 Earnings<br> Release |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: October 10, 2023
| AMBIPAR EMERGENCY RESPONSE | |
|---|---|
| By: | /s/Thiago da Costa<br> Silva |
| Name: | Thiago da Costa Silva |
| Title: | Director |
Exhibit99.1
INDEX
| LETTER TO SHAREHOLDERS | 3 |
|---|---|
| AMBIPAR RESPONSE | 5 |
| HIGHLIGHTS | 6 |
| GROSS REVENUE | 6 |
| NET REVENUE | 10 |
| COST OF PRODUCTS/SERVICES (CASH) | 10 |
| GROSS PROFIT | 12 |
| EBITDA | 12 |
| FINANCIAL RESULTS | 13 |
| NET INCOME | 13 |
| CAPITAL STRUCTURE | 13 |
| ROIC | 16 |
| CAPEX | 17 |
| ANNEXES | 18 |
| 2 |
| --- |
LETTER TO SHAREHOLDERS
Toour shareholders
In 2023, Ambipar Response (hereinafter referred to as "Response" or "the Company") proudly completed its listing on the NYSE American, achieving a gross capitalization of US$ 174 million. This listing not only amplifies our visibility but also fortifies our financial position, grants us access to the world's most advanced capital markets, and places us at the forefront of corporate governance standards.
As this letter marks our inaugural results release, we have structured it into three main sections:
Historical Overview and Strategy
Capital Allocation
Final Thoughts
HistoricalOverview and Strategy
The trajectory of listing Response on the NYSE American dates back to 1995 when Tercio Borlenghi Junior started a small in-house Emergency Response business to protect their own logistics operations from environmental risk when transporting HAZMAT. Fast forward decades, this original family-owned business effectively became a big company, subsidiary of Ambipar Group, listed as a public company.
From those early years, and most prominently from 2010 to current days, Ambipar Response has undergone through incredible transformation. Our Company witnessed a rapid acceleration in our global growth, a solidification of our value proposition, consolidation of its leadership in several markets, and a notable increase in brand awareness.
We expanded and streamlined our operations into four core business units: emergency response, marine response, industrial response, and environmental response. We also established a presence in four key regions, adopting a matrix management approach. Our primary objective is to offer a comprehensive suite of services from these business units in the regions we operate.
Our clientele operates in sectors that are fraught with operational and environmental risks – encompassing manufacturing, chemicals, pulp and paper, mining, and Hazmat logistics. Clients require specialized services providers capable of executing higher risk services – such as tank cleaning, decontamination, decommissioning, environmental consulting, emergency response, confined space cleaning, handling of contaminant materials - that ultimately safeguard their assets, personnel, and the environment.
Our vision for Response is to be the premier global provider of such risk environmental services, delivering a standardized and complete portfolio of services to our clients wherever they may be.
| 3 |
| --- |
Our business model emphasizes standardization and readiness at scale, built on four pillars:
| 1. | Highly<br> trained personnel |
|---|---|
| 2. | Standardized<br> equipment and procedures |
| --- | --- |
| 3. | Centralized<br> command centers |
| --- | --- |
| 4. | Technical<br> expertise |
| --- | --- |
These pillars underpin our rapid growth while ensuring we maintain the highest quality of service in the field.
Scale is instrumental in achieving optimal returns on investment. It enables us to share assets and personnel across vast geographies, ensuring efficient asset utilization and maximizing the potential of our resources – akin to "squeezing more juice from the same oranges."
CapitalAllocation
Our business presents great organic and inorganic investment opportunities.
We are constantly presented with opportunities to deploy capital at attractive returns to invest in service centers, vehicles, vessels, helicopters, equipment, and personnel. Throughout our journey, we’ve also come across acquisitions as a way to accelerate growth, bring great people and services to our Company.
As evidenced by our organic growth, operational margins, and ROIC, our acquisitions have become part of the Ambipar Response ecosystem and consistently added economic value and positioned us to keep on growing profitably. The underlying reason relies, among others, on rebranding acquisitions to Ambipar Response, upgrading assets, training personnel, bundling services and training sales teams enables Response to achieve constantly growing results.
FinalThoughts
Many of the markets we operate in, notably North America, are fragmented and demand standardized, high-quality services to cater to their vast dimensions and extensive industrial and supply chains. We have successfully established leading positions in Brazil and LatAm and intend to replicate our successful playbook in other regions. This presents a timely opportunity.
Our NYSE American listing has endowed us with an additional currency – the AMBI shares – enabling us to pursue strategic acquisitions and attract individuals keen on contributing to the construction of a global leader in environmental risk services.
We extend our heartfelt gratitude for your partnership as an investor and shareholder. Our commitment remains unwavering: to build a reputable, profitable, and purpose-driven company, always prioritizing our mission to protect the environment, businesses, and communities.
As we embark on this new chapter as a publicly-traded company, we are resolute in our commitment to attract shareholders who resonate with our vision and are willing to support us in the long run.
| 4 |
| --- |
Ambipar Response has 4 businesses units:
| 1. | Emergency response: specialist in crisis management and response to environmental emergencies,<br> with command coordinated by a control center, managing services simultaneously, scalable<br> and standardized. It has 5 HAZMAT training camps, training person according to National Technical<br> Standards Fire Protection Association (“NFPA”, in the USA), a reference in the<br> development of technical standards for emergency response. Also comprises Fire Response for<br> the prevention and combat of forest and industrial fires and Medical Response to emergency<br> medical care services. |
|---|---|
| 2. | Marine response: port support solutions, such as transporting people, material and ranch, dredging<br> support, preventive fencing and emergency bases. It also offers solutions for maritime support,<br> such as transporting materials to platforms, combating oil spills, chase-boats for<br> seismic vessels, and vessels for FPSO support (Floating production storage and offloading). |
| --- | --- |
| 3. | Industrial response: meets demands for cleaning, maintenance, decontamination and treatment, painting<br> of industrial and naval tanks, which typically involve a hazardous environment or material.<br> It also performs decommissioning of FPSOs, vessels, platforms and industrial plants. It can<br> perform these services for radioactive materials as well. |
| --- | --- |
| 4. | Environmental response: rehabilitation of fauna and flora, licensing, auditing and environmental due<br> diligence, soil remediation, risk study, preparation and execution of environmental monitoring<br> programs. Team formed by biologists, oceanographers, geologists, geographers and engineers. |
| --- | --- |
For more details, watch the institutional video.
| 5 |
| --- |
HIGHLIGHTS
| BRL million | 2Q23 | 2Q22 | Chg. | 1Q23* | Chg. | 6M23* | 6M22 | Chg. | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GROSS REVENUE | 660.4 | 363.3 | 81.8 | % | 627.1 | 5.3 | % | 1,287.5 | 713.7 | 80.4 | % | |||||
| DEDUCTIONS | -48.3 | -30.7 | 57.3 | % | -30.9 | 56.3 | % | -79.2 | -59.2 | 33.8 | % | |||||
| NET REVENUE | 612.1 | 332.6 | 84.0 | % | 596.3 | 2.7 | % | 1,208.3 | 654.5 | 84.6 | % | |||||
| GROSS PROFIT | 157.9 | 89.1 | 77.4 | % | 144.1 | 9.6 | % | 302.1 | 182.0 | 66.0 | % | |||||
| GROSS MARGIN | 25.8 | % | 26.8 | % | -1.0 | p.p. | 24.2 | % | 1.6 | p.p. | 25.0 | % | 27.8 | % | -2.8 | p.p. |
| EBITDA | 150.3 | 82.6 | 82.0 | % | 139.1 | 8.1 | % | 289.4 | 167.9 | 72.3 | % | |||||
| EBITDA MARGIN | 24.6 | % | 24.8 | % | -0.3 | p.p. | 23.3 | % | 1.2 | p.p. | 23.9 | % | 25.7 | % | -1.7 | p.p. |
* 1Q23 EBITDA and EBITDA margin adjusted to exclude extraordinary expenses and non-cash from NYSE American listing.
GROSS REVENUE
| RESPONSE | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| COMPOSITION <br> OF GROSS REVENUE R$ <br> million | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | |||||||||
| GROSS REVENUE | 215.2 | 262.4 | 281.5 | 350.4 | 363.3 | 431.8 | 667.8 | 627.1 | 660.4 | |||||||||
| Brazil | 70.1 | 82.2 | 77.1 | 112.5 | 122.8 | 159.4 | 202.5 | 208.7 | 244.5 | |||||||||
| International | 145.1 | 180.2 | 204.4 | 237.9 | 240.6 | 272.4 | 465.3 | 418.4 | 415.9 | |||||||||
| Latam (ex Brazil) | 36.9 | 47.7 | 50.1 | 57.9 | 58.7 | 44.1 | 50.3 | 55.8 | 54.3 | |||||||||
| Europe | 42.4 | 50.1 | 48.1 | 47.8 | 50.5 | 51.8 | 64.7 | 56.1 | 46.0 | |||||||||
| North America | 65.8 | 82.4 | 106.2 | 132.2 | 131.3 | 176.5 | 350.3 | 306.5 | 315.5 |
Gross revenue reached R$660 million in 2Q23, 81.8% higher than 2Q22 and up by 5.3% compared to 1Q23.
6
| Response | 2Q21 | **** | 3Q21 | **** | 4Q21 | **** | 1Q22 | **** | 2Q22 | **** | 3Q22 | **** | 4Q22 | **** | 1Q23 | **** | 2Q23 | **** | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Organic Growth YoY | 19 | % | 33 | % | 15 | % | 40 | % | 20 | % | 14 | % | 35 | % | 27 | % | 28 | % | |||||||||
| % companies’ revenue +12<br> months / total revenue | 51 | % | 50 | % | 57 | % | 59 | % | 66 | % | 67 | % | 54 | % | 72 | % | 70 | % |
The organic growth rate, calculated on a "same store sales" ("SSS") basis, that is, the YoY gross revenue variation of companies and operations that have been for 12 months or more in the Ambipar group compared to the same quarter last year. We have historically seen high rates of organic growth.
BRAZIL
| COMPOSITION OF<br><br> GROSS REVENUE<br> R$ million | 2Q23 | 2Q22 | Chg.<br><br> 2Q23 <br> x2Q22 | 1Q23 | Chg.<br><br> 2Q23 <br> X1Q23 | 6M23 | 6M22 | Chg.<br><br> 6M23 x<br><br> 6M22 | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| RESPONSE | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| GROSS REVENUES | 660.4 | 363.3 | 81.8 | % | 627.1 | 5.3 | % | 1,287.5 | 713.7 | 80.4 | % |
| Brazil | 244.5 | 122.8 | 99.1 | % | 208.7 | 17.1 | % | 453.2 | 235.3 | 92.6 | % |
| Subscriptions Brazil | 39.6 | 33.7 | 17.3 | % | 38.2 | 3.6 | % | 77.8 | 67.5 | 15.3 | % |
| Services Brazil | 204.9 | 89.0 | 130.1 | % | 170.5 | 20.2 | % | 375.5 | 167.8 | 123.7 | % |
| Attended Services | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | Chg.<br><br> 2Q23<br><br> x2Q22 | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| Brazil | Gross<br> Revenue (BRL Million) | 89.0 | 123.5 | 165.5 | 170.5 | 204.9 | 130.1 | % | |||
| Number<br> of Services Provided | 1,853 | 2,435 | 2,594 | 2,727 | 3,075 | 65.9 | % | ||||
| Average<br> Ticket (BRL Thousand) | 48.1 | 50.7 | 63.8 | 62.5 | 66.6 | 38.7 | % |
7
| · | Gross Revenue in Brazil grew<br> in all comparisons, mainly driven by the provision of scheduled industrial services and emergencies in the road and rail sectors. |
|---|---|
| · | The average ticket rose YoY<br> and QoQ reflecting higher complexity of attended services. |
| --- | --- |
| · | This result is the result<br> of integration and cross-selling between the business areas. |
| --- | --- |
LATAM
| COMPOSITION OF<br><br> GROSS REVENUE<br> R$ million | 2Q23 | 2Q22 | Chg.<br><br> 2Q23<br> x2Q22 | 1Q23 | Chg.<br><br> 2Q23 <br> X1Q23 | 6M23 | 6M22 | Chg.<br><br> 6M23 x<br> 6M22 | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| RESPONSE | |||||||||||
| GROSS REVENUES | 660.4 | 363.3 | 81.8 | % | 627.1 | 5.3 | % | 1,287.5 | 713.7 | 80.4 | % |
| International | 415.9 | 240.6 | 72.9 | % | 418.4 | -0.6 | % | 834.3 | 478.4 | 74.4 | % |
| Latam (ex-Brazil) | 54.3 | 58.7 | -7.5 | % | 55.8 | -2.6 | % | 110.1 | 116.6 | -5.5 | % |
| Subscriptions Latam | 34.6 | 34.4 | 0.5 | % | 36.1 | -4.1 | % | 70.7 | 65.6 | 7.7 | % |
| Services Latam | 19.7 | 24.3 | -18.7 | % | 19.7 | 0.1 | % | 39.5 | 51.0 | -22.6 | % |
| Attended Services | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | Chg.<br><br> 2Q23<br><br> x2Q22 | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| Latam<br> (Ex Brazil) | Gross<br> Revenue (BRL Million) | 24.3 | 9.6 | 14.8 | 19.7 | 19.7 | -18.7 | % | |||
| Number<br> of Services Served | 82 | 80 | 104 | 95 | 90 | 9.8 | % | ||||
| Average<br> Ticket (BRL Thousand) | 296.4 | 119.6 | 142.3 | 207.6 | 219.4 | -26.0 | % | ||||
| · | Latam gross revenue had a<br> negative exchange rate impact between 1Q23 vs. 2Q23, due to the 3.4% appreciation of the Real against the Chilean Peso. On a Local<br> currency view, Revenues showed slight growth. | ||||||||||
| --- | --- | ||||||||||
| · | In<br> Latin America, we had a YoY retraction due to exchange variation, and an oil spill response<br> in the region during 1H22. | ||||||||||
| --- | --- |
8
EUROPE
| COMPOSITION OF<br><br> GROSS REVENUE<br> R$ million | 2Q23 | 2Q22 | Chg.<br><br> 2Q23<br> x2Q22 | 1Q23 | Chg.<br><br> 2Q23<br> X1Q23 | 6M23 | 6M22 | Chg.<br><br> 6M23 x<br> 6M22 | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| RESPONSE | |||||||||||
| GROSS REVENUES | 660.4 | 363.3 | 81.8 | % | 627.1 | 5.3 | % | 1,287.5 | 713.7 | 80.4 | % |
| International | 415.9 | 240.6 | 72.9 | % | 418.4 | -0.6 | % | 834.3 | 478.4 | 74.4 | % |
| Europe | 46.0 | 50.5 | -8.9 | % | 56.1 | -17.9 | % | 102.1 | 98.3 | 3.9 | % |
| Subscriptions Europe | 4.6 | 3.8 | 20.5 | % | 4.8 | -4.9 | % | 9.4 | 7.4 | 27.1 | % |
| Services Europe | 41.5 | 46.7 | -11.3 | % | 51.3 | -19.1 | % | 92.7 | 90.9 | 2.0 | % |
| Attended Services | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | Chg.<br><br> 2Q23<br><br> x2Q22 | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| Europe | Gross<br> Revenue (BRL Million) | 46.7 | 48.1 | 60.0 | 51.3 | 41.5 | -11.3 | % | |||
| Number<br> of Services Served | 5,874 | 5,922 | 5,974 | 5,947 | 5,798 | -1.3 | % | ||||
| Average<br> Ticket (BRL Thousand) | 8.0 | 8.1 | 10.0 | 8.6 | 7.2 | -10.1 | % | ||||
| · | In<br> Europe, we had a quarterly drop in revenue, due to a lower industrial demand. | ||||||||||
| --- | --- | ||||||||||
| · | In addition, the Real appreciated<br> against the basket of currencies in the European countries where we operate. | ||||||||||
| --- | --- |
NORTH AMERICA
| COMPOSITION OF<br><br> GROSS REVENUE<br> R$ million | 2Q23 | 2Q22 | Chg.<br><br> 2Q23<br> x2Q22 | 1Q23 | Chg.<br><br> 2Q23<br> X1Q23 | 6M23 | 6M22 | Chg.<br><br> 6M23 x <br><br> 6M22 | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| RESPONSE | |||||||||||
| GROSS REVENUES | 660.4 | 363.3 | 81.8 | % | 627.1 | 5.3 | % | 1,287.5 | 713.7 | 80.4 | % |
| International | 415.9 | 240.6 | 72.9 | % | 418.4 | -0.6 | % | 834.3 | 478.4 | 74.4 | % |
| North America | 315.5 | 131.3 | 140.2 | % | 306.5 | 2.9 | % | 622.0 | 263.5 | 136.0 | % |
| Attended Services | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | Chg.<br><br> 2Q23<br><br> x2Q22 | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| North<br> America | Gross<br> Revenue (BRL Million) | 131.3 | 176.5 | 350.3 | 306.5 | 315.5 | 140.2 | % | |||
| Number<br> of Services Served | 2,597 | 2,991 | 3,117 | 3,228 | 3,660 | 40.9 | % | ||||
| Average<br> Ticket (BRL Thousand) | 50.6 | 59.0 | 112.4 | 95.0 | 86.2 | 70.5 | % |
9
| · | North America operations continue<br> their growth trajectory. In the comparison with 2Q22, the growth was 140.2%. |
|---|---|
| · | Continuing the process of<br> integrating operations in North America, Witt O’Brien’s now brings together all the L1 and L2 US operations. So, we consolidate<br> WOB into the North America revenue line. We continue to cross-sell L3 from leads generated by L1. |
| --- | --- |
| · | Canada stood out with a strong<br> performance on emergency response and industrial services, following good demand and positioning to serve the Oil and Gas market<br> on its western provinces. |
| --- | --- |
NET REVENUE
| R$ million | 2Q23 | 2Q22 | Chg. | 1Q23 | Chg. | 6M23 | 6M22 | Chg. | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Revenues | 660.4 | 363.3 | 81.8 | % | 627.1 | 5.3 | % | 1,287.5 | 713.7 | 80.4 | % | |||||||||||
| Deductions | -48.3 | -30.7 | 57.3 | % | -30.9 | 56.3 | % | -79.2 | -59.2 | 33.8 | % | |||||||||||
| Net Revenues | 612.1 | 332.6 | 84.0 | % | 596.3 | 2.7 | % | 1,208.3 | 654.5 | 84.6 | % | |||||||||||
| % Deductions<br> / Gross Revenues | -7.3 | % | -8.5 | % | 1.1 | p.p. | -4.9 | % | -2.4 | p.p. | -6.1 | % | -8.3 | % | 2.1 | p.p. | ||||||
| · | The variation in net revenue<br> accompanied the evolution of gross revenue by geography, and the revenue deductions for each region. There was no significant change<br> in the tax structure of each market, with higher deductions in the Brazilian market than in the international market. | |||||||||||||||||||||
| --- | --- |
COST OF PRODUCTS/SERVICES (CASH)
| RESPONSE | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| COST OF SERVICES R$ million | 2Q23 | 2Q22 | Chg. | 1Q23 | Chg. | 6M23 | 6M22 | Chg. | |||||||||||
| Personnel | 253.4 | 120.2 | 110.9 | % | 237.6 | 6.6 | % | 491.0 | 238.2 | 106.2 | % | ||||||||
| Third parties | 92.2 | 49.5 | 86.1 | % | 88.8 | 3.8 | % | 181.0 | 96.4 | 87.8 | % | ||||||||
| Maintenance | 24.7 | 8.1 | 207.1 | % | 19.8 | 24.6 | % | 44.6 | 14.7 | 203.2 | % | ||||||||
| Travel | 19.2 | 4.6 | 313.3 | % | 17.2 | 11.7 | % | 36.4 | 9.2 | 293.6 | % | ||||||||
| Freight | 0.8 | 1.2 | -32.1 | % | 1.5 | -45.6 | % | 2.2 | 2.3 | -2.6 | % | ||||||||
| Rentals | 11.7 | 9.5 | 23.2 | % | 10.7 | 9.4 | % | 22.4 | 19.1 | 17.2 | % | ||||||||
| Fuel | 12.8 | 18.7 | -31.7 | % | 12.6 | 1.6 | % | 25.3 | 30.9 | -17.9 | % | ||||||||
| Materials | 5.2 | 3.5 | 46.3 | % | 7.9 | -35.1 | % | 13.1 | 6.8 | 93.2 | % | ||||||||
| Telecommunications | 2.9 | 0.6 | 406.5 | % | 3.7 | -22.7 | % | 6.6 | 1.2 | 439.0 | % | ||||||||
| Marketing | 5.3 | 0.7 | 656.4 | % | 3.1 | 71.5 | % | 8.4 | 1.2 | 583.0 | % | ||||||||
| Taxes | 4.2 | 6.2 | -32.3 | % | 10.8 | -61.1 | % | 15.1 | 15.6 | -3.3 | % | ||||||||
| Others | 21.9 | 20.8 | 5.3 | % | 38.4 | -43.0 | % | 60.2 | 37.0 | 62.6 | % | ||||||||
| TOTAL | **** | 454.1 | **** | 243.6 | **** | 86.5 | % | **** | 452.1 | **** | 0.4 | % | **** | 906.3 | **** | 472.6 | **** | 91.8 | % |
10
RESPONSE
| COST OF SERVICES R$ million | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net Revenue | 190.3 | **** | 233.4 | **** | 255.6 | **** | 321.9 | **** | 332.6 | **** | 398.1 | **** | 632.3 | **** | 596.3 | **** | 612.1 | **** |
| Personnel | 73.0 | 91.3 | 96.4 | 118.0 | 120.2 | 137.7 | 271.5 | 237.6 | 253.4 | |||||||||
| Third parties | 19.8 | 28.8 | 27.7 | 46.8 | 49.5 | 45.1 | 69.0 | 88.8 | 92.2 | |||||||||
| Maintenance | 8.6 | 4.5 | 6.2 | 6.6 | 8.1 | 15.5 | 27.8 | 19.8 | 24.7 | |||||||||
| Travel | 2.4 | 3.8 | 4.3 | 4.6 | 4.6 | 6.7 | 17.2 | 17.2 | 19.2 | |||||||||
| Freight | 0.6 | 0.8 | 0.9 | 1.1 | 1.2 | 1.3 | 13.4 | 1.5 | 0.8 | |||||||||
| Rentals | 7.3 | 7.2 | 7.1 | 9.6 | 9.5 | 3.3 | 8.6 | 10.7 | 11.7 | |||||||||
| Fuel | 5.4 | 6.6 | 9.0 | 12.2 | 18.7 | 19.8 | 7.5 | 12.6 | 12.8 | |||||||||
| Materials | 2.3 | 3.2 | 3.5 | 3.3 | 3.5 | 10.4 | 5.2 | 7.9 | 5.2 | |||||||||
| Telecommunications | 0.4 | 0.5 | 0.7 | 0.7 | 0.6 | 1.0 | 4.2 | 3.7 | 2.9 | |||||||||
| Marketing | 0.9 | 0.3 | 1.5 | 0.5 | 0.7 | 5.5 | 4.1 | 3.1 | 5.3 | |||||||||
| Taxes | 2.1 | 3.6 | 3.7 | 9.3 | 6.2 | 5.9 | -1.3 | 10.8 | 4.2 | |||||||||
| Others | 9.2 | 9.0 | 14.4 | 16.3 | 20.8 | 30.5 | 27.0 | 38.4 | 21.9 | |||||||||
| Total | 132.1 | **** | 159.4 | **** | 175.3 | **** | 229.0 | **** | 243.6 | **** | 282.8 | **** | 454.2 | **** | 452.1 | **** | 454.1 | **** |
| Percentage<br> of Net Revenue<br><br> <br><br> RESPONSE | ||||||||||||||||||
| COST OF SERVICES R$ million | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | |||||||||
| Net Revenue | 190.3 | **** | 233.4 | **** | 255.6 | **** | 321.9 | **** | 332.6 | **** | 398.1 | **** | 632.3 | **** | 596.3 | **** | 612.1 | **** |
| Personnel | 38.3 | % | 39.1 | % | 37.7 | % | 36.7 | % | 36.1 | % | 34.6 | % | 42.9 | % | 39.9 | % | 41.4 | % |
| Third parties | 10.4 | % | 12.4 | % | 10.9 | % | 14.5 | % | 14.9 | % | 11.3 | % | 10.9 | % | 14.9 | % | 15.1 | % |
| Maintenance | 4.5 | % | 1.9 | % | 2.4 | % | 2.1 | % | 2.4 | % | 3.9 | % | 4.4 | % | 3.3 | % | 4.0 | % |
| Travel | 1.3 | % | 1.6 | % | 1.7 | % | 1.4 | % | 1.4 | % | 1.7 | % | 2.7 | % | 2.9 | % | 3.1 | % |
| Freight | 0.3 | % | 0.3 | % | 0.3 | % | 0.4 | % | 0.3 | % | 0.3 | % | 2.1 | % | 0.2 | % | 0.1 | % |
| Rentals | 3.9 | % | 3.1 | % | 2.8 | % | 3.0 | % | 2.9 | % | 0.8 | % | 1.4 | % | 1.8 | % | 1.9 | % |
| Fuel | 2.8 | % | 2.8 | % | 3.5 | % | 3.8 | % | 5.6 | % | 5.0 | % | 1.2 | % | 2.1 | % | 2.1 | % |
| Materials | 1.2 | % | 1.3 | % | 1.4 | % | 1.0 | % | 1.1 | % | 2.6 | % | 0.8 | % | 1.3 | % | 0.8 | % |
| Telecommunications | 0.2 | % | 0.2 | % | 0.3 | % | 0.2 | % | 0.2 | % | 0.3 | % | 0.7 | % | 0.6 | % | 0.5 | % |
| Marketing | 0.5 | % | 0.1 | % | 0.6 | % | 0.2 | % | 0.2 | % | 1.4 | % | 0.6 | % | 0.5 | % | 0.9 | % |
| Taxes | 1.1 | % | 1.5 | % | 1.4 | % | 2.9 | % | 1.9 | % | 1.5 | % | -0.2 | % | 1.8 | % | 0.7 | % |
| Others | 4.8 | % | 3.9 | % | 5.6 | % | 5.1 | % | 6.2 | % | 7.7 | % | 4.3 | % | 6.4 | % | 3.6 | % |
| Total | 69.4 | % | 68.3 | % | 68.6 | % | 71.1 | % | 73.2 | % | 71.0 | % | 71.8 | % | 75.8 | % | 74.2 | % |
| Gross Margin | 30.6 | % | 31.7 | % | 31.4 | % | 28.9 | % | 26.8 | % | 29.0 | % | 28.2 | % | 24.2 | % | 25.8 | % |
Costs remained stable as a percentage of revenue when comparing 2Q23 vs. 1Q23, reflecting the company's business mix. There were no highlights in the composition of costs in this quarter. The largest cost components – Personnel, Third Parties, Maintenance, Fuel and Travel – represented more than 85% of total costs.
11
GROSS PROFIT
QuarterlyGross Profit(R$ million) and Margin (%)
Gross profit grew over 2Q22. Gross margin for 2Q23 reached 25.8%, a result of 1.0 pp. lower than 2Q22 and up by 1.6 pp. compared to 1Q23. The improvement in gross margin in relation to 1Q23, is due to better performance in Brazil and Canada.
EBITDA
Quarterly EBITDA (R$million) and Margin (%)
* 1Q23 EBITDA and EBITDA margin adjusted to exclude extraordinary expenses and non-cash from NYSE American listing
EBITDA registered an 82.0% growth in the 2Q23 versus 2Q22. The EBITDA margin in 1Q23 and 2Q23 reflects a mix with more consulting services, structurally with lower margin.
12
FINANCIAL RESULTS
| R$ million | 2Q23 | 2Q22 | Var. | 1Q23 | Var. | 6M23 | 6M22 | Var. | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Financial Results | -50.9 | -16.6 | 207.0 | % | -29.7 | 71.5 | % | -80.6 | -23.3 | 245.7 | % |
| Financial Expenses | -48.9 | -18.9 | 158.2 | % | -48.2 | 1.3 | % | -97.1 | -28.9 | 235.5 | % |
| Financial Income | -2.0 | 2.3 | N.M. | 18.5 | N.M | 16.5 | 5.6 | 193.2 | % |
In 2Q23, Ambipar Response presented a negative net financial result of R$51 million, resulting from the increase in interest rates and the increase in debt. The debt increase was mainly for capex and M&A.
NET INCOME
| R$ million | 2Q23 | 2Q22 | Var. | 1Q23 | Var. | 6M23 | 6M22 | Var. | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net Income | 47.1 | 34.9 | 35.0 | % | -67.6 | N.M. | -20.5 | 82.4 | N.M. | |||||||
| Net Margin | 7.7 | % | 10.5 | % | -2.8 | p.p. | -11.3 | % | 19.0 | p.p. | -1.7 | % | 12.6 | % | -14.3 | p.p. |
Ambipar Response registered net income of R$47.1 million in 2Q23, with a net margin of 7.7%.
Compared to the same quarter of the previous year, net income grew by 35%, with a reduction of 2.8 p.p. in net margin. Profit growth derives from the growth in operations, while the drop in margin is explained by the negative financial result and the contribution of business segments and regions to the consolidated result.
The portion of net income allocated to non-controlling shareholders grew in 2Q23, as we made several acquisitions of companies throughout the year of 2022 where founding partners remain in the business as minority shareholders. This way of carrying out acquisitions ensures that we maintain expertise and continuity in the acquired companies, and it is a form of long-term alignment.
CAPITAL STRUCTURE
On June 30, 2023, financial gross debt reached the amount of R$ 1,256.4 million, a reduction of R$ 61.7 million in relation to the balance determined on December 31, 2022, mainly due to the issue of debentures and funding of loans and financing. Considering Related Parties, the total amount of gross debt was R$ 1,863.3 million a reduction of R$ 224.7 million.
13
| R$ Million | 2Q23 | 4Q22 | ||
|---|---|---|---|---|
| Short Term | 201.2 | 151.8 | ||
| Loans and financing | 62.1 | 67.7 | ||
| Debentures | 139.1 | 84.2 | ||
| Long Term | 1,055.2 | 1,166.3 | ||
| Loans and financing | 592.9 | 649.8 | ||
| Debentures | 462.3 | 516.5 | ||
| Short Term | 16 | % | 12 | % |
| Long Term | 84 | % | 88 | % |
| Financial Gross<br> Debt | 1,256.4 | 1,318.1 | ||
| Related<br> Parties | 606.8 | 769.8 | ||
| Total Gross Debt | 1,863.3 | 2,087.9 | ||
| Financial<br> Gross Debt R$ Million | Financial<br> charges - % p.a. | Maturity | 2Q23 | 4Q22 |
| --- | --- | --- | --- | --- |
| Working capital | 0.84%+CDI and 6.36% | March 2027 | 529.3 | 597.7 |
| Investment financing | 14.40% | June 2027 | 98.7 | 108.7 |
| Financial leases<br> liabilities | 14.26% | September 2027 | 27.0 | 11.0 |
| Debentures | CDI + 2.65% and 3.5% | February 2028 | 601.4 | 600.7 |
| Total | 1,256.4 | 1,318.1 |
Financial Leverage based on Covenants criteria reduced from 1.51x to 0.94x in the comparison between December 2022 and June 2023, due to the cash generation related to the Company's IPO occurred in March. Also in June 2023, considering Related Parties loans, the leverage was reduced from 2.59x to 1.90x.
14
| R$ Million | 2Q23 | 4Q22 |
|---|---|---|
| Financial Gross Debt | 1,256.4 | 1,318.1 |
| (-) Cash and equivalents | 691.8 | 271.6 |
| (=) Financial Net Debt based on<br> Covenants criteria | 564.6 | 1,046.5 |
| Pro forma annualized EBITDA¹ | 601.4 | 691.9 |
| Financial Leverage (x) | 0.94 | 1.51 |
| (=) Net Debt Including Related Parties² | 1,145.5 | 1,790.1 |
| Pro forma annualized EBITDA¹ | 601.4 | 691.9 |
| Financial Leverage (x) | 1.90 | 2.59 |
| 1- | Calculated<br> as the EBTIDA for 2Q23 multiplied by four. 2- Considers the amount of Related Parties Loans. | |
| --- | --- |
The debt maturity schedule has its most relevant portion in the year 2027.
*1Q23net debt non audited by PCAOB standards. Considers Related Parties’ Loans.
15
ROIC
| BRL million | 2Q23<br> <br><br> LTM | 4Q22<br> <br><br> LTM | Chg.<br> <br> 2Q23 LTM x 4Q22 <br><br> LTM | ||||||
|---|---|---|---|---|---|---|---|---|---|
| (+) EBIT | 427.5 | 336.8 | 26.9 | % | |||||
| (-) Tax¹ | -128.2 | -101.0 | 26.9 | % | |||||
| NOPAT | 299.2 | 235.7 | 26.9 | % | |||||
| (+) Average Shareholders' Equity | 730.8 | 385.1 | 89.8 | % | |||||
| (+) Average Net Debt | 1,127.5 | 907.8 | 24.2 | % | |||||
| Average Invested Capital | 1,858.3 | 1,292.9 | 43.7 | % | |||||
| (-) Average Intangible | 1,273.4 | 907.5 | 40.3 | % | |||||
| Average Invested<br> Capital ex Intangible | 584.9 | 385.4 | 51.8 | % | |||||
| Operational ROIC²<br> (%) | 51.2 | % | 61.2 | % | -10.0 | p.p. | |||
| ROIC (%) | 16.1 | % | 18.2 | % | -2.1 | p.p. | |||
| 1- Considers<br>a 30% tax rate; 2- Disregard intangibles | |||||||||
| --- |
Return on Invested Capital minus intangible assets (“operating ROIC”) allows for an approximate estimate of the return on investments made in operations.
Return on Invested Capital (“ROIC”), which incorporates intangible assets into the invested capital base, mainly composed of goodwill paid for acquisitions.
M&A investment, at first, presents a lower ROIC, due to goodwill paid on acquisition. Once acquisitions become part of our operations, the expected return on the marginal investment made tends to follow the Operating ROIC, since the invested capital is allocated to the acquiree's operations and does not include goodwill.
In the medium term, therefore, we expect convergence between the company's ROIC and the operational ROIC.
16
CAPEX
In 2Q23, addition of Fixed Assets was R$41.9 million. In Response, we invested in Latin America in the new training camp in Chile and in the acquisition of equipment to be used in outsourcing contracts.
As for 6M23, Brazil still demanded capex for helicopters, which are typically demanded to fight fires in the rainforest and transport people to remote areas, and we continued investing in vehicles for industrial services and emergency response in North America.
| Additions to Fixed Assets<br><br> R$ million | 2Q23 | 2Q22 | Chg.<br><br> 2Q23 x<br><br> 2Q22 | 1Q23 | Chg.<br><br> 2Q23 x<br><br> 1Q23 | 6M23 | 6M22 | Chg.<br><br> 6M23 x<br><br> 6M22 | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (+) Response | 41.9 | 26.1 | 61.0 | % | 69.0 | -39.2 | % | 110.9 | 90.9 | 22.1 | % |
| (+) Brazil | 11.6 | 8.9 | 29.4 | % | 43.8 | -73.6 | % | 55.4 | 58.8 | -5.7 | % |
| (+) LATAM (ex-Brazil) | 19.8 | 1.9 | 933.4 | % | 1.1 | 1662.9 | % | 20.9 | 2.0 | 967.3 | % |
| (+) Europe | 1.8 | 0.5 | 261.6 | % | 1.8 | -0.5 | % | 3.7 | 3.7 | 0.3 | % |
| (+) North America | 8.7 | 14.7 | -40.4 | % | 22.2 | -60.6 | % | 30.9 | 26.4 | 16.9 | % |
| Additions<br> to Fixed Assets <br> R$ million | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | ||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| (+) Response | 20.8 | 46.2 | 12.9 | 64.8 | 26.1 | 69.9 | 72.5 | 69.0 | 41.9 | ||
| (+) Brazil | 16.4 | 32.5 | 7.1 | 49.9 | 8.9 | 52.3 | 37.9 | 43.8 | 11.6 | ||
| (+) LATAM (ex-Brazil) | 0.7 | 2.0 | 2.1 | 0.0 | 1.9 | 0.7 | 4.0 | 1.1 | 19.8 | ||
| (+) Europe | 0.1 | 2.6 | 2.8 | 3.2 | 0.5 | 2.4 | 2.1 | 1.8 | 1.8 | ||
| (+) North America | 3.7 | 9.2 | 0.9 | 11.8 | 14.7 | 14.4 | 28.5 | 22.2 | 8.7 | ||
| 1Q23 | 2Q23 | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | ||||
| Expansion<br> and Maintenance Capex | Capex<br> <br>(R$<br> Million) | %<br> Group Revenue | Capex<br> <br>(R$<br> Million) | %<br> Group Revenue | |||||||
| RESPONSE - Service Expansion | 38.0 | 3.3 | % | 24.3 | 2.0 | % | |||||
| Response Brazil | 25.6 | 2.2 | % | 6.3 | 0.5 | % | |||||
| Response Latam (Ex. Brazil) | 0.6 | 0.1 | % | 18.0 | 1.5 | % | |||||
| Response Europe | 0.3 | 0.0 | % | 0.0 | 0.0 | % | |||||
| Response North America | 11.5 | 1.0 | % | 0.0 | 0.0 | % | |||||
| RESPONSE - Service Maintenance | 31.1 | 2.7 | % | 17.7 | 1.5 | % | |||||
| Response Brazil | 18.3 | 1.6 | % | 5.3 | 0.4 | % | |||||
| Response Latam (Ex. Brazil) | 0.5 | 0.0 | % | 1.8 | 0.2 | % | |||||
| Response Europe | 1.6 | 0.1 | % | 1.8 | 0.2 | % | |||||
| Response North America | 10.7 | 0.9 | % | 8.7 | 0.7 | % |
17
ANNEXES
| · | Balance<br> sheet |
|---|---|
| · | Income<br> Statement |
| --- | --- |
| · | Cash<br> flow |
| --- | --- |
| · | Reconciliation<br> of Non-GAAP Measures |
| --- | --- |
BALANCESHEET
| ASSETS <br> BRL thousand | 06/30/2023 | 12/31/2022 | ||
|---|---|---|---|---|
| Cash and cash equivalents | 691,829 | 271,607 | ||
| Trade and other receivables | 718,742 | 711,892 | ||
| Current income tax and social <br> contribution recoverable | 6,935 | 6,388 | ||
| Other taxes recoverable | 37,474 | 29,740 | ||
| Prepaid expenses | 35,221 | 37,806 | ||
| Advances to suppliers | 58,336 | 29,864 | ||
| Inventories | 26,160 | 18,128 | ||
| Dividends Receivable | - | - | ||
| Other accounts equivalents | 50,518 | 36,498 | ||
| Total current assets | 1,625,215 | 1,141,923 | ||
| Related parties loans | 25,886 | 26,180 | ||
| Non-current income tax and social contribuition recoverable | 2,854 | 2,854 | ||
| Non-current other taxes recoverable | 395 | 392 | ||
| Deferred taxes | 25,567 | 25,420 | ||
| Judicial deposits | 6,056 | 826 | ||
| Other accounts receivable | 26,727 | 37,599 | ||
| Investments | - | 7,620 | ||
| Property, plant and equipment | 611,396 | 516,081 | ||
| Right of use | 48,479 | 68,275 | ||
| Goodwill | 1,188,856 | 1,192,302 | ||
| Intangible assets | 369,278 | 420,197 | ||
| Total Non-current assets | 2,305,494 | 2,297,746 | ||
| Total assets | 3,930,709 | 3,439,669 |
18
BALANCESHEET (continued)
| LIABILITIES AND SHAREHOLDERS EQUITY<br><br> BRL thousand | 06/30/2023 | 12/31/2022 | ||||
|---|---|---|---|---|---|---|
| Loans and financing | 62,122 | 67,656 | ||||
| Debentures | 139,082 | 84,187 | ||||
| Trade and other payables | 129,218 | 155,523 | ||||
| Labor obligations | 84,500 | 114,941 | ||||
| Dividends Payable | 43,189 | 76,909 | ||||
| Current income tax and social contribution payable | 17,395 | 12,998 | ||||
| Other tax payable | 23,206 | 33,719 | ||||
| Obligations from acquisition of investment | 160,473 | 141,698 | ||||
| Lease liabilities | 16,157 | 14,411 | ||||
| Other bills to pay | 76,848 | 36,345 | ||||
| Total current liabilities | 752,190 | 738,387 | ||||
| Loans and financing | 592,906 | 649,762 | ||||
| Debentures | 462,321 | 516,533 | ||||
| Other taxes payable | 7,669 | 7,986 | ||||
| Related parties loans | 606,823 | 769,792 | ||||
| Provision for loss on investments | - | - | ||||
| Deferred income tax and social contribution | 211,513 | 190,833 | ||||
| Obligations from acquisition of investment | 37,130 | 81,728 | ||||
| Provision for contingencies | 382 | 607 | ||||
| Lease liabilities | 29,492 | 32,648 | ||||
| Warrant and Earn-out | 41,336 | - | ||||
| Other bills to pay | 9,223 | 4,305 | ||||
| Total Non-current liabilities | 1,998,795 | 2,254,194 | ||||
| Capital | 1,434,717 | 261,920 | ||||
| Earn-out variation | (2,349 | ) | - | |||
| Share issue expenses | - | - | ||||
| Profit reserves | - | 302,817 | ||||
| Capital transactions | (91,432 | ) | (110,218 | ) | ||
| Accumulated translation adjustment | (225,745 | ) | (89,165 | ) | ||
| Adjust previous exercises | - | - | ||||
| Retained earnings | (64,325 | ) | - | |||
| Equity attributable to owners of the group | 1,050,866 | 365,354 | ||||
| Non-controlling interest | 128,858 | 81,734 | ||||
| Total Equity | 1,179,724 | 447,088 | ||||
| Total shareholders' equity and liabilities | 3,930,709 | 3,439,669 |
19
INCOMESTATEMENT
| R$<br> million | 2Q23 | 2Q22 | Chg | 1Q23* | Chg. | 6M23* | 6M22 | Chg. | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross revenues | 660.4 | 363.3 | 81.8 | % | 627.1 | 5.3 | % | 1,287.5 | 713.7 | 80.4 | % | |||||
| Deductions | -48.3 | -30.7 | 57.1 | % | -30.9 | 56.3 | % | -79.2 | -59.2 | 33.8 | % | |||||
| Net Revenues | 612.1 | 332.6 | 84.0 | % | 596.3 | 2.7 | % | 1,208.3 | 654.5 | 84.6 | % | |||||
| Cost<br> of Services provided | -454.1 | -243.6 | 86.5 | % | -452.1 | 0.4 | % | -906.3 | -472.6 | 91.8 | % | |||||
| SG&A | -7.6 | -6.5 | 17.5 | % | -5.1 | 49.4 | % | -12.7 | -14.0 | -9.7 | % | |||||
| EBITDA | 150.3 | 82.6 | 82.0 | % | 139.1 | 8.1 | % | 289.4 | 167.9 | 72.4 | % | |||||
| EBITDA<br> Margin (%) | 24.6 | % | 24.8 | % | -0.3 | p.p. | 23.3 | % | 1.2 | p.p. | 23.9 | % | 25.7 | % | -1.7 | p.p. |
| Financial Results | -50.9 | -16.6 | 207.0 | % | -29.7 | 71.5 | % | -80.6 | -23.3 | 245.7 | % | |||||
| Financial Expenses | -48.9 | -18.9 | 158.2 | % | -48.2 | 1.3 | % | -97.1 | -28.9 | 235.5 | % | |||||
| Financial Income | -2.0 | 2.3 | N.M | 18.5 | N.M | 16.5 | 5.6 | 193.2 | % | |||||||
| Taxes | -15.1 | -6.6 | 126.5 | % | -20.2 | -25.5 | % | -35.3 | -19.9 | 77.2 | % | |||||
| Current Taxes | -16.0 | -7.6 | 109.3 | % | -13.6 | 17.6 | % | -29.6 | -14.7 | 101.4 | % | |||||
| Deferred Taxes | 0.9 | 1.0 | -6.1 | % | -6.6 | N.M | -5.7 | -5.2 | 9.1 | % | ||||||
| Net Income | 47.1 | 34.9 | 35.0 | % | -67.6 | N.M | -20.5 | 82.4 | N.M. |
*1Q23 EBITDA and margin excludes extraordinary expenses and non-cash from NYSE American listing.
20
CASHFLOW
| BRL thousand | 2Q23 | 2Q22 | 6M23 | 6M22 | ||||
|---|---|---|---|---|---|---|---|---|
| Net income for the period | (68,028 | ) | 34,876 | (20,522 | ) | 82,382 | ||
| Adjustments to reconcile income to cash from (applied<br> to) operations: | ||||||||
| Depreciation and amortization | 37,305 | 24,456 | 73,090 | 42,264 | ||||
| Expected credit losses | 141 | 23 | (15 | ) | (28 | ) | ||
| Residual value of written-off property, plant and equipment<br> and intangible assets | (1,767 | ) | 3,818 | 9,456 | 23,433 | |||
| Provision for contingencies | (361 | ) | (427 | ) | (225 | ) | (144 | ) |
| Income tax and social contribution - Deferred | (929 | ) | (989 | ) | 5,703 | 5,227 | ||
| Interest on loans and financing, debentures, leases and exchange<br> rate variation | 52,615 | (25,894 | ) | 78,049 | (20,361 | ) | ||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 73,473 | (49,946 | ) | 13,227 | (71,614 | ) | ||
| Recoverable taxes | (2,420 | ) | 2,916 | (7,544 | ) | 45 | ||
| Prepaid expenses | (6,154 | ) | (13,001 | ) | 2,751 | (14,711 | ) | |
| Advances to suppliers | (16,933 | ) | (22,035 | ) | (28,406 | ) | 25,248 | |
| Inventories | (5,787 | ) | (1,711 | ) | (7,982 | ) | (2,043 | ) |
| Other accounts receivable | (18,096 | ) | (21,067 | ) | (7,018 | ) | 12,723 | |
| Suppliers | (31,464 | ) | 79 | (52,106 | ) | 3,409 | ||
| Salaries and social security charges | (5,619 | ) | 7,289 | (32,317 | ) | 9,500 | ||
| Taxes payable | (1,867 | ) | 990 | 1,989 | (3,518 | ) | ||
| Other accounts payable | (16,135 | ) | 58,115 | 43,412 | 3,478 | |||
| Total | (31,002 | ) | (38,371 | ) | (73,994 | ) | (37,483 | ) |
| Cash generated from operating activities | 103,081 | (2,508 | ) | 71,542 | 95,290 | |||
| Interest paid on loans and financing | (5,681 | ) | (3,113 | ) | (24,803 | ) | (5,724 | ) |
| Interest paid on debentures | - | - | (46,891 | ) | - | |||
| Interest paid on leases | (660 | ) | (950 | ) | (1,411 | ) | (1,185 | ) |
| Income tax and social contribution | (4,926 | ) | - | (12,154 | ) | (595 | ) | |
| Total | (11,267 | ) | (4,063 | ) | (85,259 | ) | (7,504 | ) |
| Cash from (invested in) operations | 91,814 | (6,571 | ) | (13,717 | ) | 87,786 | ||
| Cash flow from investing activities | ||||||||
| Cash spent on companies' acquisitions; net of cash received | (21,523 | ) | 2,588 | (25,169 | ) | (140,365 | ) | |
| Payment of obligations from acquisition of investments | (20,452 | ) | 102,837 | (64,923 | ) | (40,116 | ) | |
| Acquisition of property, plant and equipment and intangible<br> assets | (38,416 | ) | 64,238 | (108,955 | ) | (78,715 | ) | |
| Net cash used in investing activities | (80,391 | ) | (41,284 | ) | (199,047 | ) | (259,196 | ) |
| Cash flow from financing activities | ||||||||
| Attributed to shareholders | ||||||||
| Profit distribution - prior periods | (16,744 | ) | - | (47,900 | ) | - | ||
| Increase in minority interest | 100,214 | - | 699,532 | - | ||||
| Capital Increase | (104,040 | ) | - | - | - | |||
| Attributed to financing | ||||||||
| Related parties | 144,077 | 112,131 | 104,509 | (101,675 | ) | |||
| Lease payments - Principal | (24,413 | ) | 825 | (28,392 | ) | (7,332 | ) | |
| Proceeds from loans and financing | 20,100 | 4,995 | 37,765 | 7,255 | ||||
| Proceeds from debentures | - | - | - | 335,500 | ||||
| Funding of debentures | 542 | - | 1,028 | - | ||||
| Payments of loans and financing - Principal | (17,553 | ) | (22,590 | ) | (63,980 | ) | (33,396 | ) |
| Payment of Share Issuance Costs | - | (5,299 | ) | - | (5,299 | ) | ||
| Net cash generated from financing<br> activities | 102,183 | 90,062 | 702,562 | 195,053 | ||||
| Increase (decrease) in cash and<br> cash equivalents | 113,606 | 42,207 | 489,798 | 23,643 | ||||
| Exchange rate change in cash and cash equivalents | (157,180 | ) | (20,742 | ) | (69,576 | ) | 14,669 | |
| Cash and cash equivalents at the beginning<br> of the period | 735,403 | 135,765 | 271,607 | 118,918 | ||||
| Cash and cash equivalents at the<br> end of the period | 691,829 | 157,230 | 691,829 | 157,230 |
21
Reconciliationof Non-GAAP Measures
Reconciliationof our Loans and Financings and Debentures to Total Gross Debt, Financial Net Debt based on Covenants, Net Debt Including Related Partiesand Financial Leverage, Financial Leverage including Related Parties
| R$ Million | 2Q23 | 4Q22 |
|---|---|---|
| (+) Short Term Loans and financing | 62.1 | 67.7 |
| (+) Short Term Debentures | 139.1 | 84.2 |
| (+) Long Term Loans and financing | 592.9 | 649.8 |
| (+) Long Term Debentures | 462.3 | 516.5 |
| Financial Gross Debt | 1,256.4 | 1,318.1 |
| (-) Cash and equivalents | 691.8 | 271.6 |
| (=) Financial Net Debt based on Covenants | 564.6 | 1,046.5 |
| (/)<br> Pro forma annualized EBITDA^(1)^ | 601.4 | 691.9 |
| Financial Leverage (x) | 0.94 | 1.51 |
| Financial Gross Debt | 1,256.4 | 1,318.1 |
| (+) Related Parties Loans | 606.8 | 769.8 |
| Total Gross Debt | 1,863.3 | 2,087.9 |
| (-) Cash and equivalents | 691.8 | 271.6 |
| (-) Related Parties Assets | 25.9 | 26.2 |
| (=) Net Debt Including Related Parties | 1,145.5 | 1,790.1 |
| (/)<br> Pro forma annualized EBITDA^(1)^ | 601.4 | 691.9 |
| Financial Leverage Including Related Parties (x) | 1.90 | 2.59 |
| 1- | Calculated<br> as the EBTIDA for 2Q23 multiplied by four. | |
| --- | --- |
Reconciliation of our profit for the periodto EBITDA and EBITDA Margin
| R$ Million | 2Q23 | 2Q22 | 6M23 | 6M22 | ||||
|---|---|---|---|---|---|---|---|---|
| Profit for period | 47.1 | **** | 34.9 | **** | (20.5 | ) | 82.4 | **** |
| (+) Income tax and social contribution | (15.1 | ) | (6.6 | ) | (35.3 | ) | (19.9 | ) |
| (+) Financial Results | (50.9 | ) | (16.6 | ) | (80.6 | ) | (23.3 | ) |
| (+) Depreciation and amortization expenses | (37.3 | ) | (24.5 | ) | (73.1 | ) | (42.3 | ) |
| (+) NYSE American Listing expenses | - | - | (121.0 | ) | - | |||
| EBITDA (a) | 150.3 | **** | 82.6 | **** | 289.4 | **** | 167.9 | **** |
| Net revenue (b) | 612.1 | 332.6 | 1,208.3 | 654.5 | ||||
| EBITDA Margin (a)/(b) | 24.6 | % | 24.8 | % | 23.9 | % | 25.7 | % |
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Reconciliationof our gross revenues to Gross Profit and Gross Margin
| R$ Million | 2Q23 | 2Q22 | 6M23 | 6M22 | ||||
|---|---|---|---|---|---|---|---|---|
| Net revenue (a) | 612.1 | **** | 332.6 | **** | 1,208.3 | **** | 654.5 | **** |
| Cost of Services provided | **** | **** | **** | **** | **** | **** | **** | **** |
| Personnel | (253.4 | ) | (120.2 | ) | (491.0 | ) | (238.2 | ) |
| Third parties | (92.2 | ) | (49.5 | ) | (181.0 | ) | (96.4 | ) |
| Fuel | (12.8 | ) | (18.7 | ) | (25.3 | ) | (30.9 | ) |
| Freights | (0.8 | ) | (1.2 | ) | (2.2 | ) | (2.3 | ) |
| Maintenance | (24.7 | ) | (8.1 | ) | (44.6 | ) | (14.7 | ) |
| Taxes | (4.2 | ) | (6.2 | ) | (15.1 | ) | (15.6 | ) |
| Marketing | (5.3 | ) | (0.7 | ) | (8.4 | ) | (1.2 | ) |
| Materials | (5.2 | ) | (3.5 | ) | (27.5 | ) | (33.2 | ) |
| Telecommunications | (2.9 | ) | (0.6 | ) | (6.6 | ) | (1.2 | ) |
| Travel | (19.2 | ) | (4.6 | ) | (37.2 | ) | (9.2 | ) |
| Depreciation | (37.3 | ) | (21.2 | ) | (73.1 | ) | (42.3 | ) |
| Rents | (11.7 | ) | (9.5 | ) | (22.4 | ) | (19.1 | ) |
| Others | (21.9 | ) | (27.3 | ) | (178.6 | ) | (24.6 | ) |
| Total Cost of Services provided | (491.5 | ) | (271.2 | ) | (1,113.0 | ) | (528.9 | ) |
| (-) SG&A | (7.6 | ) | (6.5 | ) | (12.7 | ) | (14.0 | ) |
| (-) Depreciation | (37.3 | ) | (21.2 | ) | (73.1 | ) | (42.3 | ) |
| (-) NYSE American Listing expenses | - | - | (121.0 | ) | - | |||
| Cost of Services provided (cash) (b) | (454.1 | ) | (243.6 | ) | (906.3 | ) | (472.6 | ) |
| Gross Profit (a)+(b) | 157.9 | **** | 89.1 | **** | 302.1 | **** | 182.0 | **** |
| Gross Margin | 25.8 | % | 26.8 | % | 25.0 | % | 27.8 | % |
Reconciliationof our operating profit to ROIC
| R$<br> Million | 2Q23<br><br> LTM | 4Q22<br><br> LTM | 2Q23<br><br> (A) | 1Q23<br><br> (B) | 4Q22<br><br> (C) | 3Q22<br><br> (D) | 2Q22<br><br> (E) | 1Q22<br><br> (F) | 4Q21<br><br> (G) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating profit^2^ | 427.5 | **** | 336.8 | **** | 113.0 | **** | 103.3 | **** | 138.1 | **** | 73.0 | **** | 61.4 | **** | 64.2 | **** | 73.9 | **** |
| Income<br> tax adjustment^1^,^2^ | (128.2 | ) | (101.0 | ) | (33.9 | ) | (31.0 | ) | (41.4 | ) | (21.9 | ) | (18.4 | ) | (19.2 | ) | (22.2 | ) |
| Net operating profit after tax (a)^2^ | 299.2 | **** | 235.7 | **** | 79.1 | **** | 72.3 | **** | 96.7 | **** | 51.1 | **** | 43.0 | **** | 44.9 | **** | 51.7 | **** |
| Total<br> Shareholders’ equity^3^ | 730.8 | 385.1 | 1,179.7 | 1,204.4 | 447.1 | 435.8 | 387.1 | 317.6 | 337.9 | |||||||||
| (+)<br> Financial Gross Debt^3^ | 1,149.7 | 907.8 | 1,256.4 | 1,092.8 | 1,790.1 | 929.0 | 679.9 | 656.2 | 483.8 | |||||||||
| (-)<br> Cash and cash equivalents^3^ | 504.8 | 270.3 | 691.8 | 735.4 | 271.6 | 668.1 | 157.2 | 135.8 | 118.9 | |||||||||
| (+)<br> Related parties loans (current and non-current)^3^ | 588.9 | 509.2 | 606.8 | 607.2 | 769.8 | 595.5 | 365.1 | 333.3 | 482.2 | |||||||||
| (-)<br> Related parties assets^3^ | 32.1 | 35.5 | 25.9 | 26.0 | 26.2 | 41.6 | 41.0 | 34.1 | 34.7 | |||||||||
| Invested capital (b) | 1,858.3 | **** | 1,292.9 | **** | 1,558.1 | **** | 1,573.8 | **** | 1,612.5 | **** | 892.3 | **** | 730.2 | **** | 707.1 | **** | 595.4 | **** |
| ROIC (a)/(b) | 16.1 | % | 18.2 | % | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| (-)<br> Goodwill^3^ | 1,028.9 | 811.2 | 1,188.9 | 1,178.8 | 1,192.3 | 861.6 | 720.3 | 696.6 | 584.9 | |||||||||
| (-)<br> Intangibles assets^3^ | 245.0 | 96.4 | 369.3 | 395.0 | 420.2 | 30.7 | 9.9 | 10.4 | 10.5 | |||||||||
| Invested capital ex Goodwill and intangible assets (c) | 584.9 | **** | 385.4 | **** | 767.1 | **** | 723.3 | **** | 624.7 | **** | 472.5 | **** | 336.7 | **** | 266.7 | **** | 226.4 | **** |
| ROIC (a)/(c) | 51.2 | % | 61.2 | % | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
^1^Income tax adjustment is defined as operating profit for the period multiplied by our normalized effective tax rate for the period, the numerator of which is income tax and social contribution and the denominator of which is profit before tax.
^2^. Considers the sum of the last 4 quarters.
^3^. Considers the average of the last 5 quarters.
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