We started 2021 with hope that our activities would get back to normal and our mobility would be resumed, but as early as the first quarter, we realized that the health crisis would be longer and more complex than anticipated. The important progress in vaccinations brought us a sense of relief and we ended the year optimistic about the future management of the pandemic, while also recognizing the need to still follow protocols and gain knowledge about how to deal with the coronavirus.
As restrictions began to be relaxed, the global economy showed signs of recovery. However, the increase in demand was not followed by an equal increase in supply. Global growth in 2021 was hampered by disruptions in supply chains, rising inflation in developed countries and some emerging markets, higher interest rates, and political uncertainty.
In Brazil, the Central Bank reversed the downward trend in interest rates to contain the rise in inflation, which was a result of the exchange rate devaluation, an increase in commodity prices, and higher production costs. What followed was a decrease in consumption and investments, which had a negative impact on the projected gross domestic product (GDP) during the year.
At Votorantim, in an environment filled with pandemic-induced uncertainties, we continued to pay attention to and care for our employees. We also focused on the financial health of our companies and our business continuity, and we continued to support society through various initiatives. During these last two years, as we have been facing an unprecedented health crisis, we have witnessed the importance of our adaptability, our structures’ flexibility, and our organized and unbureaucratic decision-making processes.
For us, the year was filled with good results, not only from an economic and financial standpoint, but also with regard to stronger collaboration in strategic discussions between Votorantim S.A. (the investment holding company) and its portfolio companies.
All our companies had positive financial results, which contributed to significantly higher consolidated results than in recent years. At the end of 2021, our leverage, calculated by the net debt to adjusted EBITDA ratio, was the lowest in more than 10 years.
From a strategic standpoint, there were important movements in the evolution of our portfolio, which also reinforced Votorantim’s extremely positive qualities, including the company’s ability to reinvent itself and create unique partnerships. CBA’s initial public offering (IPO) in July, the combination of energy assets by Votorantim Energia and CPP Investments announced in October, and new investments made by Votorantim Cimentos in North America and Spain contributed to the diversification of our portfolio and the creation of value. Also in 2021, banco BV advanced its digitalization strategy and we created Altre, a real estate company that made important investments during the year. We consolidated our net financial resources management abroad and, at the end of the year, we invested in CCR, in the infrastructure industry, in line with our portfolio evolution strategy.
In addition, we worked to ensure that ESG (environmental, social, and governance) issues were discussed by the Boards of Directors of our portfolio companies with the necessary focus and depth and that these discussions would result in concrete action.
We expect 2022 to be another challenging year due to uncertainties associated with new coronavirus variants, the turmoil resulting from an election year in Brazil, and the projections of modest economic growth in the country. Our trust in our long-term strategy and business experience in Brazil, aligned with the clear vision of our shareholders, has helped us establish decision-making processes that guarantee us confidence in challenging times.
Votorantim, once again, is prepared to face periods of volatility and come out stronger.
Chairman of the Board of Directors of Votorantim S.A.