2022 in motion: the indicators that tell the year

Turnover

2022 was a year which once again registered exceptional growth in sales volume - with a positive evolution of 46.0% in relation to 2021, far exceeding the growth of 30.0% registered in the previous year.

We have demonstrated, with great success, that the growth strategy initiated in recent years has enabled us to increase our sales volume to 1,483 million Euros - an all-time record achieved by Nors. All the geographical regions showed considerable positive evolution, demonstrating significant growth, both in percentage and absolute value.

We highlight the growth in Brazil with an increase in sales of 237 million Euros (+72.1%) and Canada, with an increase of 101 million Euros (+34.6%).

Portugal and Africa showed sales growth of 19.0% and 80.6% respectively.

The strong demand in all markets, the generalised increase in prices and the appreciation, against the Euro, of the currencies of the markets in which Nors is present contributed to achieving these results.

Even so, the year 2022 continued to present some constraints in our supply chain, generating limitations in product availability to meet market needs.

However, Nors was able to guarantee, together with its main suppliers, that the commitments to our clients would be fulfilled, and this was the main factor for the high level of success presented in this period.

The breakdown of turnover by geography and business area is as follows:

Gross Margin

In line with the growth in our turnover, the Group's gross margin showed extraordinary growth, rising from 173.1 million Euros in 2021 to 264.4 million Euros in 2022 - an increase of 52.7% based on the excellent performance of all markets, particularly the companies operating in the African and Brazilian markets.

In 2022, the consolidated gross margin rose to 17.9%, compared to the 17.1% obtained in 2021, which translates into a growth of 0.8 p.p.. This was only possible due to the improvement in the sales margins of our operations, both in the chassis commercial activity and in the after-sales activity, capitalising on the investments in human resources and in the proximity and monitoring of our customers, boosted in recent years.

Ebitda

In 2022, EBITDA reached 192.3 million Euros. Compared to 2021, this growth corresponds to an increase of 86.2 million Euros (+81.2%), with a positive contribution across all geographies. In absolute terms, the growth in Africa and Brazil stands out, with significant increases in EBITDA of 24.1 million Euros (+188.6%) and 24.0 million Euros (+78.5%) in comparison with the same period of the previous year, respectively. The companies operating in the Portuguese and Canadian markets showed growth of 51.1% and 27.3% respectively.

Despite the significant increase in activity, the cost structure did not increase to the same extent, which enabled significant gains of scale to be achieved. This contributed to a 13.0% EBITDA margin in 2022, compared to 10.4% in 2021.

Alongside the evolution of EBITDA, its diversified origin should be highlighted, demonstrating a healthy distribution, with no country accounting for more than 30% of the Group's total.

Breakdown Of Ebitda By Main Contributors

Net Income

In addition to the positive evolution of the activity and the improvement in operating profitability, 2022 was also accompanied by the decrease in the financial invoice by 1.5 million Euros. With regard to the exchange rate impact, although positive by 2.4 million Euros, it represented a reduction of 1.0 million Euros compared to the value recorded in 2021. In turn, and due to the substantial increase in the result, taxes for the year increased by about 15.9 million Euros.

This result was only possible due to the careful management and mitigation of the exchange rate impacts from Angola, caused by exposure to the exchange rate risk of the Kwanza against the US dollar and of the latter against the Euro. The former was mitigated by effective management of liquid monetary assets in Kwanza, which were always kept at low levels. The second was managed through a natural hedging strategy, achieved by the creation of financial liabilities denominated in US dollars on the Portuguese market. Although lower than the gains in 2021, the main goal of eliminating potential negative impacts was achieved.

Thus, the Group ended 2022 with a historic net income of 115.5 million Euros, more than doubling the previous year's net income, translating into an increase of 70.0 million Euros (+153.6%), and reaching 7.8% of turnover, compared to 4.5% in 2021.

Assets

Consolidated assets were 925.5 million Euros, which, compared to the value recorded at the end of 2021, corresponds to an increase of 140.1 million Euros (+17.8%), a much smaller variation than that corresponding to the increase in activity, which enabled a significant reduction in working capital requirements on sale days.

Capital Employed

Capital employed continues to be one of the indicators to which Nors pays special attention. Always focused on the careful allocation of resources to the existing businesses in the various geographies, the year 2022 saw a 12.3% reduction in capital employed. In a context of strong demand and sales growth (46.0%), this evolution is, at all levels, remarkable, and demonstrates the success of the management of this indicator.

This is possible due to the decrease in working capital needs, which fell by 51.5%, which translates into a drop from 16 days in 2021 to 5 days in 2022.

Net Debt And Financial Activity

We close the year 2022 with a Net Debt (including Lease Liabilities) of 72.8 million Euros, representing a decrease of 56.5% (or 94.5 million Euros) compared to the end of 2021.

It should be noted that we ended the year with negative Financial Net Debt (Financing obtained - cash and bank deposits - available for sale investments - debt instruments at amortized cost), that is, with more cash and cash equivalents than financial debt. Thus, Nors closed 2022 with -7.9 million Euros, compared with 80.5 million Euros in 2021 and 148.1 million Euros in 2020. This trend demonstrates the commitment to focus on the strength of the balance sheet and the ability to generate cash flow, ensuring that we are able to face adversity and seize new opportunities with complete confidence.

net debt (with securities) and net cost of financial activity

Despite the increases in interest rates in the markets in 2022, the cash generation, throughout the year, and the interest rate risk management policy allowed the result of the financial activity to register an effective decrease of 1.5 million Euros (-12.6%).

As shown, the combination of the increase in EBITDA and the decrease in net debt with leases generated a further improvement in the Net debt/EBITDA ratio, reflecting the sustainability of debt in relation to the Group's activity.

net debt (through leasing)/ebitda

Financial Autonomy

The equity item grew from 240.1 to 338.3 million Euros, corresponding to an increase of about 40.9%. This growth comes essentially from the positive impact of Nors Net Result.The increase in equity, proportionally higher than that of assets (it grew only 17.8%), resulted in a financial autonomy of 37%. A significant improvement compared to the 31% registered in 2021 and the best level in the last 10 years.

Roi And Roe

With regard to profitability ratios, ROE increased from 24.9% to 53.7%, explained by the 150.6% increase in net profit attributable to the Nors Group's shareholders, which was greater than the 16.3% increase in shareholder investment, measured by the increase in equity capital excluded from net profit.

The ROI, also in 2022, showed an accentuated growth when compared to the same period in the previous year: from 16.3% to 36.9%. Contributing to this performance was the 128.5% increase in profit before tax and financial results, and the stabilisation of invested capital, with an increase of only 0.9%.

Financial Autonomy