Portobello reports strong 9-month growth

The Brazilian group’s accounts are solid and resilient: revenue grew by 50.4% and net income and EBITDA both surged by more than 169%. Work has begun on the new site in Baxter, TN.

Portobello Group, Brazil’s largest ceramic tile producer, has continued to show consistent growth in its operations, posting net revenue of R$ 1.4 billion (approximately €239.5 million) in the first nine months of 2021, 50.4% up on the same period in 2020. These excellent figures are the combined result of three quarters of strong growth (+51.9%, +92% and +25.2% compared to the corresponding periods in the previous year), driven in particular by 48.8% growth in the domestic market to R$ 1.1 billion (78.7% of total revenue). This was a particularly remarkable performance considering that in the same period the volume of ceramic tile sales in the Brazilian market grew by 17.3% compared to the first 9 months of 2020 according to figures published by ANFACER (Brazilian Ceramic Tile Manufacturers’ Association).

A significant contribution also came from the international market, with export revenue climbing to R$ 297.4 million (+56.7%, or US$ 56.5 million, +50.7%). The Tijucas-based group led by President Cesar Gomes Jr. and CEO Mauro do Valle Pereira also focused on achieving a higher value-added product mix and consequently higher prices and on expanding its retail segment share.

“In the first nine months of 2021 Portobello Group continued to demonstrate consistent growth in its operations, with positive evolution in all business segments, but mainly in retail operations and international businesses. This continues to be an extremely positive period for the ceramic tile market amid a high level of demand, and Portobello Group’s units have been producing at full capacity since July 2020,” commented the group’s top management.

EBITDA showed an excellent performance, jumping to R$ 269 million (+169.7% compared to the first nine months of 2020), while EBITDA margin reached 19.2%, a 6.7% improvement. Net income also increased at practically the same rate, rising by 169.5% on the previous year to R$ 138.8 million.

During the reporting period, all 4 business units recorded very high performance indicators. The Portobello brand reported 36.5% growth in net sales, driven mainly by the excellent sales performance of large slabs produced at the Tijucas plant; Pointer, the Group’s democratic design brand, recorded 66.3% growth; the Portobello Shop business unit posted net revenue growth of 67.6%, including the positive effect of the opening of 9 new stores; and Portobello America, the company that manages sales in the United States, posted growth of 51.6% (+47.1% in US dollars).

The group’s short-term expectations remain highly positive. In terms of operating strategies, the focus continues to be on improving customer service and maintaining gross margin above 40%, despite the greater inflationary pressure on costs (mainly energy and imported materials) through price increases, improving the product mix and factory productivity.

The company’s investments between January and September totalled R$ 77 million, including 50% allocated to the Tijucas plant to update the industrial park for the manufacturing of products with greater added value and larger formats. The remaining R$ 38.5 million was used to finance numerous other projects, including the start of construction work on the new US plant Portobello America, updating of the Pointer plant in Marechal Deodoro, expansion of the Portobello Shop chain, digital transformation of the commercial area and other corporate initiatives.

Portobello will continue to focus its investments on these projects in the future. In particular, the new Portobello America factory due to be built on an 83,000 square metre site in Baxter, Tennessee will involve a total investment of around US$ 160 million, of which US$ 80 million will be used to construct the facility and the same amount to purchase cutting-edge machinery. Work is expected to be completed by December 2022. The company estimates that the new facility will generate annual revenue of US$100 million.