MEXICO CITY, July 24, 2024 /PRNewswire/ -- Grupo Rotoplas S.A.B. de C.V. (BMV:AGUA) ("Rotoplas", "the Company"), leader in water management solutions in the Americas, reports its unaudited second 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 | 2Q24 vs 2Q23 During 2Q24, Mexico and Central America showed solid performance, driven by strong demand, primarily for storage solutions in the region, supplying record volumes of water tanks and cisterns. Additionally, the services platform continues its positive growth trend, gaining subscribers in bebbia and closing new projects and contracts in RSA, rieggo, and Acuanta Brasil. However, Rotoplas' consolidated results were affected by the economic recession and devaluation in Argentina. Net sales closed the quarter at Ps. 2,972 million, 1.1% below 2Q23. This is mainly due to the decrease in sales in Argentina. Excluding Argentina, net sales would have increased by 14.1%. Product sales decreased by 4.6%, affected by the economic downturn in Argentina and the absence of drought in the United States. Service sales increased by 70.9%, driven by the expansion of bebbia, strong traction in RSA and Acuantia Brazil, as well as the growth of rieggo. Gross profit reached Ps.1,390 million, a growth of 2.0% compared to 2Q23. The gross margin increased by 140 basis points to reach 46.8%, due to an effective pricing  strategy during the quarter. Operating income stood at Ps. 307 million, a decrease of 29.1% compared to 2Q23. This was due to lower absorption of fixed costs in Argentina, an increase in logistics expenses to meet demand in Mexico and Central America, and expenses related to the development of digital capabilities. EBITDA closed at Ps. 450 million, an 18.8% decrease from 2Q23, due to the decline in sales that resulted in lower coverage of operating expenses. The EBITDA margin was 15.1% compared to 18.4% in 2Q23. Net income closed at Ps. 60 million, an improvement compared to the loss of Ps. 24 million in 2Q23, due to a decrease in financial expenses related to the MXN/USD exchange rate hedging in 2023 because of the strength of the Mexican peso during that period. HIGHLIGHTS | CUMULATIVE 2024 vs 2023 Net sales stood at Ps. 5,639 million, 1.9% below the same period of the previous year, mainly due to the challenging economic environment in Argentina. Excluding Argentina, net sales would have increased by 9.8%. Product sales decreased by 5.3%, impacted by the strong Mexican peso, which reduced consolidated growth by 2.3 percentage points, in addition to the contraction in demand in Argentina and the United States due to macroeconomic and climatic factors, respectively. Service sales continued to perform well, growing by 63.6% to reach Ps. 466 million, representing 8% of total sales, driven by the continued success of bebbia and the growth of rieggo and RSA. Gross profit stood at Ps. 2,742 million, increasing by 2.5%. The gross margin closed at 48.6%, an increase of 210 bps due to greater efficiency in the manufacturing process of storage solutions in Mexico, as well as a better pricing strategy. Operating income reached Ps. 728 million, 16.5% below 2023, due to lower sales, as well as higher logistics expenses and the development of new digital capabilities to support the growth of the service platform. EBITDA closed at Ps. 1,005 million, a decrease of 9.2% due to pressure on operating margins resulting from increased expenses and lower sales in some countries. The EBITDA margin stood at 17.8%. Net income reached Ps. 364 million, a significant increase compared to Ps. 12 million in the previous year, due to lower financial expenses. The previous year recorded extraordinarily high expenses due to the strength of the Mexican peso, which resulted in a negative valuation of the MXN/USD exchange rate hedging instruments. ROIC decreased by 490 basis points to 12.7%, remaining 110 basis points above the cost of capital. Net Debt/EBITDA leverage closed at 1.8x, remaining below the internal limit defined by the Company of 2.0x. During the period, Ps. 236 million was invested in CapEx, mainly aimed at modernizing the manufacturing processes for storage solutions. Additionally, there was a disbursement of Ps. 178 million for the acquisition of two companies, as part of the Programmatic M&A strategy. KEY FIGURES |  JANUARY – JUNE Note: To analyze the business excluding Argentina, the results from the second table are included. 2Q 6M 2024 2023 %Δ 2024 2023 %Δ Income Statement Net Sales 2,972 3,004 (1.1 %) 5,639 5,750 (1.9 %) % gross margin 46.8 % 45.4 % 140 bps 48.6 % 46.5 % 210 bps Operating income 307 433 (29.1 %) 728 872 (16.5 %) % margin 10.3 % 14.4 % (410) bps 12.9 % 15.2 % (230) bps EBITDA[1] 450 554 (18.8 %) 1,005 1,107 (9.2 %) % margin 15.1 % 18.4 % (330) bps 17.8 % 19.3 % (150) bps Net Result 60 (24) NA 364 12 NA % margin 2.0 % (0.8 %) 280 bps 6.4 % 0.2 % 620 bps Results Excluding Argentina Net Sales 2,418 2,119 14.1 % 4,643 4,229 9.8 % % gross margin 50.7 % 49.5 % 120 bps 51.5 % 50.1 % 140 bps Operating Income 319 326 (2.4 %) 694 710 (2.2 %) % margin 13.2 % 15.4 % (220) bps 14.9 % 16.8 % (190 bps) EBITDA 432 419 3.2 % 915 891 2.8 % % margin 17.9 % 19.8 % (190) bps 19.7 % 21.1 % (140) bps Balance Cash and Cash Equivalent 666 536 24.2 % Debt with cost 4,332 4,187 3.5 % Net Debt 3,667 3,652 0.4 % (Cumulative) Cash Flow Operating Cash Flow 521 432 20.8 % CapEx 236 190 23.8 % Working Capital (545) (281) 93.9 % Others Net Debt / EBITDA 1.8 x 1.6 x 0.2 x ROIC 12.7 % 17.6 % (490) bps Cash Conversion Cycle 47 70 (23 days)   KEY FIGURES | JANUARY – JUNE 2024 Employees 3,716 Sales points +32,000 Government transactions 4.1 % e-commerce clients +6,000 bebbia units +121,000 20L wáter jugs saved 23.3 million   MESSAGE | CEO Dear investors, During this quarter, Rotoplas has demonstrated the ability to adapt in challenging environments. Water stress, a growing issue in many regions, continues to challenge companies in the water industry regarding product availability, supply chain, and distribution, as well as maintaining high levels of service. In the semester, thanks to the strong commitment of our operational team, we were able to fulfill market demand in Mexico and Central America, reaching record sales for water tanks and cisterns, even exceeding levels of 2022 when northeast Mexico faced a severe water shortage. We remain focused on modernizing and optimizing the production process of water tanks and ensuring that our products reach those who need them. Similarly, the services segment continues to show solid growth, confirming a very positive trend. We continue to invest in developing field service capabilities and digital platforms to support this growth and maintain high-quality service. These investments not only enhance the current service but also position us to capture greater value in the future. On the other hand, in Argentina, we have faced a severe economic recession and devaluation, lasting longer than expected, which has not been seen in the past 20 years. This situation has significantly impacted the Group's sales and profitability. Nonetheless, we remain vigilant of future market dynamics and potential opportunities. In the United States, climatic conditions have not been in our favor; however, we continue to seek ways to refocus and strengthen the business, looking for strategies that will allow us to regain profitability. The focus on innovation and operational efficiency has helped us maintain a solid position and even increase market share in various regions. We will continue to adapt to market conditions, optimize our operations, and seek growth opportunities. We appreciate the support of our team, customers, distributors, and shareholders as we remain committed to improving people's quality of life through our water management solutions. Carlos Rojas Aboumrad INVITE | EARNINGS CALL Thursday, July 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_2gnQlF-eREOEr4gr-PMWjA GUIDANCE | 2024-2025 Metric 2024 Guidance 2024 Revised Guidance (July) Objectives 2025 Guidance Increase in Net Sales > 10% > 0% - 5% ≥2x sales (vs 2020) EBITDA Margin  18.0% - 19.0% 17.0% - 18.0% ≥ 20% Net Debt/EBITDA < 2.0x < 2.0x ≤ 2.0x ROIC ROIC = WACC + 200 bps ROIC ≥ WACC ∼ 20%   EBITDA | BY REGION AND SOLUTION 2Q 6M 2024 2023 %Δ 2024 2023 %Δ Mexico Sales 1,831 1,541 18.8 % 3,533 3,051 15.8 % EBITDA 433 431 0.5 % 905 891 1.5 % % Margin 23.7 % 28.0 % (430) bps 25.6 % 29.2 % (360) bps Argentina Sales 554 884 (37.4 %) 996 1,520