Grupo Lamosa penalised by construction slowdown

The group’s Tile business results declined in the first nine months of 2023. With the acquisition of Baldocer, finalised on 31 October, the Mexican group’s consolidated revenues are expected to grow by 16%.

Following two years of sustained growth, Grupo Lamosa’s third quarter 2023 results reflect the normalisation of market demand. Mexico’s largest ceramic group reported an 11% decline in sales revenues in the first nine months of the year compared to the same period in 2022 to MXN 23.82 billion (about €1.3 billion).

Domestic sales accounted for 62% of total revenues and saw a smaller contraction, dropping by 5% to MXN 14.66 billion (about €784 million). Foreign sales suffered a more significant decline, dropping by 20% to MXN 9.16 billion (about €496 million), although this was still higher than 2021 levels.

Of the two divisions through which Grupo Lamosa operates, the floor and wall tiles segment was hardest hit with a 16% decline in sales to MXN 16.91 billion (about €915.5 million), equivalent to 71% of the group’s total sales. This reduction was caused by weaker demand in both the new home construction and remodelling segments, not just in Mexico but also in foreign markets. By contrast, the Adhesives business made gains, with sales of MXN 6.9 billion (3% higher than in the first nine months of 2022).

Overall, EBITDA declined by 19%, with EBITDA margin at 21% of sales.

Despite the negative trend, Lamosa continued its investment programme with total investments in the first nine months of the year amounting to MXN 1.99 billion (about €106 million), which went primarily on keeping its production plants and IT platforms up to date.

On the subject of investments, shortly before Cersaie 2023 the Mexican group announced the acquisition of the Spanish ceramic company Baldocer (brands Baldocer, Azulejos Benadresa (AB) and ETILE), a deal that was finalised on 31 October. The value of the acquisition was €425 million, with no less than €71 million to be paid as a balance in 2025 according to the company’s results.

This acquisition marks an important step forward in Grupo Lamosa’s growth strategy, enabling it to strengthen its presence in the European continent (where it has been operating with Roca Tile since 2021) and increase its share of high-end products worldwide. Baldocer exports its products to more than 120 countries around the world and reported an EBITDA of €67 million in 2022.

According to forecasts, the acquisition of Baldocer will increase Grupo Lamosa’s consolidated revenues by approximately 16%. Installed production capacity will increase by 12% to approximately 275 million sqm/year, cementing Lamosa’s position as the world’s second largest ceramic tile producer.