A Message from the Executive Board

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from left to right: Luiz Caruso, Sergio Malacrida, Mateus Ferreira, Glaisy Domingues, João H. Schmidt, Mauro Neto e Marcio Yamachira.

2021 was an extraordinary year, and despite all its challenges, we stayed true to our strategy and continued to advance in our portfolio evolution. We ended the year with great pride in our achievements, from our historic financial results to the transformational initiatives in our portfolio, and with renewed confidence in our leadership’s ability to adapt and thrive.

Our portfolio companies were agile and demonstrated the ability to adapt quickly to new circumstances, from the complex operating conditions in the beginning of the pandemic to the strong resumption of economic activity throughout 2021. As a result, we achieved outstanding results across our portfolio and had a historical year from a consolidated perspective. Consolidated net revenues in 2021 were R$ 49 billion, adjusted EBITDA reached R$ 11,5 billion and net income was R$ 7,1 billion – all records.

Throughout our history, we have been tested by challenging situations, and although we can’t predict such circumstances, we rely on the talent and determination of our teams, the financial strength of Votorantim, and the commitment of our shareholders to face them. These characteristics, combined with a prudent yet courageous managerial approach, have been essential to keep us among a select group of Brazilian companies with an investment grade rating by the three main international credit risk agencies (S&P Global Ratings, Fitch Ratings, and Moody’s).

In terms of strategy, we have made substantial progress at our portfolio companies and in creating new opportunities for growth. We did the IPO of CBA, paving the way for a new wave of value accretive investments in the aluminum segment. We announced the consolidation of the energy assets held by Votorantim Energia and CPP Investments in Brazil, resulting in the creation of one of the largest renewable energy platforms in Brazil – Auren Energia. At Votorantim Cimentos, we advanced on our international growth strategy through acquisitions in Spain and the conclusion of the combination of our business in North America with McInnis, together with a new partner, the Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ). And in real estate, Altre gained scale with two important acquisitions and new project initiatives.

We also advanced our strategy of new investments directly through the holding company – Votorantim S.A., with important moves in the area of infrastructure, with the acquisition of shares in CCR – one of the largest concession and mobility platforms in Latin America, and in the management of our international liquidity.

In financial services, banco BV also had historical record results in 2021, maintained its leadership in auto finance in Brazil for the 9th consecutive year and is quickly evolving its digital banking platform.

These initiatives make strategic sense as we look at them today and they create optionality for further investments to continue to evolve our business model. They also reflect a portfolio logic, as we maintain our diversification from a geographic, industry and risk perspective. Finally, they reflect the leadership and courage of our management teams under such complex operating conditions.

During the year, the companies also advanced the ESG agenda aligned with their business strategies by developing plans, setting goals, and making public commitments, with a particular emphasis on the environmental agenda and decarbonization initiatives.

From an ESG perspective, we also have two levers that enhance our portfolio companies’ ability to address issues aligned with their strategy. One of them is Reservas Votorantim, which focuses on environmental assets and manages Legado das Águas, the largest private Atlantic Forest reserve in Brazil, where we have developed a business model that is part of the answer to integrating biodiversity into the economy and leveraging solutions to climate change. The other is the Votorantim Institute, a partner of the portfolio companies in the development of social and environmental strategies in the municipalities where we operate, in addition to its focus on major topics of national interest, such as education and citizenship. In 2021, Instituto Votorantim launched iV Ventures, one of the first venture funds in Brazil focused on impact investing in the areas of water, sanitation, housing and the low carbon economy, with funds from Votorantim and our portfolio companies.  

In 2021, Votorantim also partnered with FCLTGlobal (Focusing Capital on the Long Term), a non-profit organization that develops studies, research, and tools to promote investments and business strategies focused on the long term. We are thrilled to represent Brazil and Latin America in such important debates, bringing light to matters related to the communities and markets in which we operate.

Votorantim is a century-old company built with integrity and courage, the dedication of our shareholders, and the commitment and collaboration of many talented people over the years. We have very clear business objectives and a diversified portfolio strategy. At the same time, we are exploring new business models and new opportunities that will generate value and fulfill our purpose of creating positive social and environmental impact through our activities.

Our way of going beyond and overcoming challenges led us to a historic year. We thank our shareholders for their inspiration and support in this entrepreneurial journey. We are grateful to our people for their leadership and courage and to our business partners who contributed to our results.

We continue to move forward with confidence because, as we say at Votorantim, the future is our territory.

João H. Schmidt
CEO of Votorantim S.A.