MEXICO CITY, April 23, 2024 /PRNewswire/ -- Grupo Rotoplas S.A.B. de C.V. (BMV:AGUA) ("Rotoplas", "the Company"), America's leading company in water solutions, reports its unaudited first quarter 2024 results. The information has been prepared in accordance with the International Financial Reporting Standards (IFRS). Figures are expressed in millions of Mexican pesos.  HIGHLIGHTS | 1Q24 vs 1Q23 During this quarter, we reported a record gross margin of 50.7%, the highest in the Company's history along with a 70 bps expansion in EBITDA margin. Additionally, services experienced significant growth, the cash conversion cycle was optimized by 56 days, and net income was 8.3 times greater than in the first quarter of 2023. Nonetheless, Net sales closed at Ps. 2,667 million, 2.9% below 1Q23, due to a complex economic and climatic environment in the various countries where we operate. Mexico and Central America had a solid performance in both sales and profitability; however, they were unable to offset the declines in other regions, exacerbated by the strength of the Mexican peso. Taking the 2023 exchange rate, and isolating the effect of devaluation in Argentina, net sales growth would have been 1.0%. - Product sales decreased by 6.1%, affected by weak demand, as well as adverse exchange rate effects, especially in Argentina, the United States, and Peru. - Service sales increased by 56.2%, driven by the ongoing expansion of bebbia and the solid growth in RSA and rieggo.  Gross margin closed at 50.7%, with an expansion of 300 bps. This result is due to an efficient pricing strategy, the reduction in raw material costs, and an increase in sales volumes of Tinaco Plus+ in Mexico, which has a lower average production cost. Operating income reached Ps. 421 million, a margin of 15.8%, a reduction of 20 basis points compared to 1Q23. This reduction is attributed to an increase in operating expenses, influenced by higher freight costs and the development of e-commerce, digitalization, and advertising initiatives for bebbia in Mexico, along with a slowdown in sales in certain markets. EBITDA remained stable, reaching Ps. 555 million. The margin expanded by 70 bps compared to 1Q23, reaching 20.8%.  Net income closed at Ps. 304 million, an increase of 8.3x compared to 1Q23, driven by a reduction in financial expenses.  ROIC at the end of the quarter was 14.0%, decreasing by 210 basis points compared to 1Q23, due to the reduction in operating profitability and the increase in invested capital. However, ROIC remains 290 basis points above the cost of capital. The Net Debt/EBITDA leverage ratio closed at 1.7x, and the cash conversion cycle was optimized by 56 days due to an effective working capital management. During the period, CapEx reached Ps. 98 million, mainly directed towards updating the production process of storage solutions in Mexico. KEY FIGURES | 1Q24 vs 1Q23 1Q 2024 2023 %Δ Income Statement Net Sales 2,667 2,746 (2.9 %) % gross margin 50.7 % 47.7 % 300 bps Operating Income 421 438 (4.0 %) % margin 15.8 % 16.0 % (20) bps EBITDA 555 553 0.4 % % margin 20.8 % 20.1 % 70 bps Neta Income 304 37 NM % margen 11.4 % 1.3 % 1,010 bps Balance Sheet Cash and Cash Equivalents 682 (16.4 %) Total Debt 4,123 4,146 (0.6 %) Net Debt 3,553 3,464 2.6 % Cash Flow Operating Cash Flow 132 136 (3.0 %) CapEx 98 110 (11.1 %) Working Capital (361) (264) 37.0 % Ohers Net Debt / EBITDA 1.7 x 1.6 x 0.1 x ROIC 14.0 % 16.1 % (210) bps Cash Conversion Cycle 30 86 (56)   KEY FIGURES | JANUARY – MARCH 2024 Employees 3,737 Sales Points >32,000 Government Transactions 4.2 % e-commerce clients >5,260 bebbia users >115,000 20L water jugs saved 8.6 million   MESSAGE | CEO Dear investors, As we begin 2024, our focus remains on delivering decentralized water solutions and enhanced access in the regions in which we operate, while implementing operational and financial strategies to create value for our stakeholders. During the quarter, we successfully maintained profitability, achieving an EBITDA margin of over 20%, as well as a ROIC above the cost of capital. However, we faced challenges due to lower demand in Argentina, the United States, and Peru. Mexico achieved solid results, with strong performance in both services and products. The drought in the central region of the country continues to drive volume growth, while acquisitions through our Programmatic M&A strategy have brought more dynamism to rieggo and RSA. Our solutions aim to address and mitigate the growing issue of water scarcity in our country. During this period, we were able to make adjustments in production and supply chain management to meet the high demand. Our pricing strategy and ongoing business activity with our partners, distributors and plumbers, have maintained the leading position of our brands in the different regions where we operate. Regarding corporate governance best practices, on April 26th, the General Assembly will be presented with the nomination of two new independent board members, Regina García-Cuellar and Marcos Westphalen, whose experience will strengthen the Board of Directors and provide a greater diversity of profiles and perspectives. Additionally, a dividend of $0.50 MXN per share will be proposed, reaffirming our commitment to distributing value to our shareholders. We are excited about the opportunities that 2024 will continue to bring. We remain focused on providing the best service to our customers and leading the change towards a more efficient and sustainable use of water. Carlos Rojas Aboumrad INVITE | EARNINGS CALL Thursday, April 25th, 10:00am Mexico City Time (12:00pm, EST) Speakers: Carlos Rojas Aboumrad (CEO) and Mario Romero Orozco (CFO) Link: https://rotoplas.zoom.us/webinar/register/WN_Daz-WvpOSg6KhlM4GPeKdQ   GUIDANCE| 2024-2025 Metric 2024 Guidance Objectives 2025 Guidance Increase in net sales > 10% ≥2x sales (vs 2020) Adjusted EBITDA Margin 18.0% - 19.0% ≥ 20% Net Debt/ EBITDA < 2.0x ≤ 2.0x ROIC ROIC = WACC + 200 bps ∼ 20%   EBITDA| BY REGION AND SOLUTION 1Q 2024 2023 %Δ Mexico Sales 1,702 1,510 12.7 % EBITDA 471 460 2.4 % % Margin 27.7 % 30.5 % (280) bps Argentina Sales 442 636 (30.5 %) EBITDA 72 82 (11.5 %) % Margin 16.4 % 12.9 % 350 bps United States Sales 224 280 (19.8 %) EBITDA (38) (50) (24.9 %) % Margen (16.9 %) (18.0 %) 110 bps Others Sales 299 320 (6.7 %) EBITDA 49 62 (20.8 %) % Margin 16.3 % 19.2 % (290) bps 1Q 2024 2023 %Δ Products Sales 2,445 2,603 (6.1 %) EBITDA 607 599 1.4 % % Margin 24.8 % 23.0 % 180 bps Servicies Sales 223 143 56.2 %