Indústrias Romi S A : Earnings Release

1Q21 Earnings Release

April 27, 2021

March 31, 2021
Share price at 04/26/2021	Earnings Conference Call broadcast over the web in Portuguese, with
ROMI3 - R$ 36.10 per share
simultaneous translation into English
Market value	April 28, 2021
11 a.m. (São Paulo) | 2 p.m.(London) | 9 a.m. (New York)
R$ 2,647.3 million
US$ 485.2 million	https://us02web.zoom.us/webinar/register/WN_-r8she9UTgC8yievf-Nb3g
Number of shares	Zoom ID: 879 8030 6115
Common: 73,333,922	Dial-in number: [phone]
Total: 73,333,922
Dial-innumbers at https://us02web.zoom.us/u/kBoLrNCVm
Free float = 50.8%

Earnings Release 1st quarter of 2021

Santa Bárbara d'Oeste - São Paulo, March 31, 2021

Indústrias Romi S.A. ("Romi" or "Company") (B3: ROMI3), domestic market leader in the Machine Tools and Plastic Processing Machines markets, as well as an important producer of Rough and Machined Cast Iron Parts, announces its results for the first quarter of 2021 ("1Q21"). Except where otherwise stated, the Company's operating and financial information is presented on a consolidated basis, in accordance with the International Financial Reporting Standards (IFRS).

Statements contained in this release related to Romi's business outlook, projections of operating and financial results and references to the Company's growth potential are mere forecasts and have been based on Management's expectations regarding its future performance. These expectations are highly dependent upon market behavior, the economic situation in Brazil, the industry and international markets. Therefore, they are subject to changes.

Investor Relations Contact

Fábio B. Taiar

Investor Relations Officer

1. [e-mail]

Highlights

EBITDA - Adjusted in 1Q21 was R$ 35.4 (149.0% over 1Q20); Incoming orders of R$ 408.2M in 1Q21 (117.8% over 1Q20);

Order backlog reaches R$ 708M at the end of 1Q21 (85.5% over 1Q20)

• Consolidated net operating revenue in 1Q21 reached R$ 222.6 million, an increase of 34.2% compared to 1Q20. With the higher volume of billing, and the effective control of costs and expenses, EBITDA - adjusted in 1Q21 presented a growth of 149.0% compared to 1Q20;
• At the Romi Machines Unit, net operating revenue increased by 59.9% in 1Q21 compared to 1Q20, due to the resumption of orders from June 2020. The increase in revenue, coupled with an effective control in operating expenses, resulted in an 11.9 p.p. expansion in operating margin compared to 1Q20;
• At the Rough and Machined Cast Iron Parts Unit, net operating revenue increased by 65.2% compared to 1Q20, with the continuous deliveries of large parts and the recovery of the other segments. Operating margin grew by 10.6 p.p., reflecting the higher production volume, improved operational efficiency;
• Incoming orders at the Romi Machines Unit increased by 150.2% in 1Q21 compared to 1Q20, reflecting the highly favorable environment for investments, the technology in our products and the new business alternatives, such as the machine rental business;
• In 1Q21, incoming orders at the Rough and Machined Cast Iron Parts Unit increased 70.1% compared to 1Q20, reflecting orders for large parts placed by customers from the energy industry and the recovery of all the other industrial segments served by this unit;
• In 1Q21, incoming orders at the Burkhardt+Weber Unit reached R$ 53.5 million, an increase of 165.2% compared to 1Q20, reflecting the resumption of business, mainly in China;
• At the end of the first quarter of 2021, the Company's order backlog grew by
  85.5% in comparison to March 31, 2020.

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Earnings Release 1st quarter of 2021

R$'000	1Q20	4Q20	1Q21	Var.	Var.
Revenues Volume
Romi Machines (units)	164	329	219	-33.4%	33.5%
Burkhardt + Weber (units)	3	7	-	-100.0%	-100.0%
Rough and Machined Cast Iron Parts (tons)	4,095	6,528	5,808	-11.0%	41.8%
Net Operating Revenue	165,941	360,643	222,630	-38.3%	34.2%
Gross margin (%)	29.1%	32.2%	33.9%
Operating Income (EBIT)	4,714	61,007	25,375	-58.4%	438.3%
Operating margin (%)	2.8%	16.9%	11.4%
Operating Income (EBIT) - adjusted (*)	5,669	59,336	25,375	-57.2%	347.6%
Operating margin (%) - adjusted (*)	3.4%	16.5%	11.4%
Net Income	40,817	86,406	20,744	-76.0%	-49.2%
Net margin (%)	24.6%	24.0%	9.3%
Net Income - adjusted (*)	5,843	48,974	20,744	-57.6%	255.0%
Net margin (%) - adjusted (*)	3.5%	13.6%	9.3%
EBITDA	13,271	71,115	35,429	-50.2%	167.0%
EBITDA margin (%)	8.0%	19.7%	15.9%
EBITDA - adjusted (*)	14,226	69,444	35,429	-49.0%	149.0%
EBITDA margin (%) - adjusted (*)	8.6%	19.3%	15.9%
Investments (**)	6,316	15,861	18,310	15.4%	189.9%

EBITDA = Earnings before interest, taxes, depreciation and amortization.

1Q20: As described in the "Success in Legal Proceeding (Plano Verão)" section of this report, the Company recognized in the financial statements for 1Q20 the effects of the favorable final decision on the tax proceeding (Plano Verão), which impacted the quarterly results as follows: (i) EBIT/EBITDA: decreased by R$1.0 million, due to the recognition of expenses with legal fees, under "Other operating income (expenses), net"; (ii) financial results: increased by R$25.1 million as a result of the monetary restatement of the original amount of the tax credits; (iii) income tax and social contribution: increased by R$10.8 million, due to the original amount of the credits; and (iv) profit for the period: increased by the impact of the net gain of R$35.0 million, already considering the effects of income tax and social contribution on the gain, which were reduced by the use of the interest on capital proposed in April 2020, as per the Shareholders Notice dated March 17, 2020.

1. 4Q20: As described in the "Legal Proceedings (Eletrobrás)" section of this report, the Company recognized in the financial statements for 4Q20 the effects of the favorable final decision in the tax proceeding filed against Eletrobrás, which impacted the result for this quarter as follows: (i) EBIT/EBITDA: increased by R$ 1.7 million, due to the recognition of a gain relating to the amount of the proceeding, net of expenses incurred with legal fees, under "Other operating income (expenses), net";(ii) finance income (costs): increased by R$ 37.5 million, due to the restatement of the original amounts of the credits; and (iii) profit for the period: increased by the impact of the net gain of R$ 38.4 million, already considering the effects of Income Tax and social contribution on the gain, which were reduced by the use of the interest on capital proposed in December 2020, as per the Shareholders Notice dated December 8, 2020.

(**) of the investments made during 1Q21 and 4Q20, R$ 8.6 million and R$ 7.5 million, respectively, refers to machines manufactured by the Company that were allocated to the machinery rental business, a new solution launched in the 3Q20.

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Earnings Release 1st quarter of 2021

Corporate Profile

Romi, founded in 1930, is the leader in the Brazilian industrial machinery and equipment market, and an important manufacturer of rough and machined cast iron parts.

The Company is listed on B3's "New Market", which is reserved for companies with a higher level of corporate governance. Romi manufactures machine tools (Conventional Lathes, Computerized Numerical Control (CNC) Lathes, Lathing Centers, Machining Centers, Vertical and Horizontal Heavy and Extra-Heavy Lathes and Drilling Mills), Plastic Injection or Blow Molding Machines and ductile or CDI gray cast iron parts, either in raw or machined form. The Company's cutting-edge products and services, which feature Industry

4.0 technologies, enable the smart use of the data generated, whether through built-in artificial intelligence or through the transfer of big data over the networks (connectivity) to a central analysis site. The Company's equipment is sold all globally and used by a number of industrial segments, such as the agricultural machinery, capital goods, consumer goods, packaging, tooling, hydraulic equipment, sanitation, automotive and wind power industries, among many others.

The Company has thirteen manufacturing units, four of which for final assembly of industrial machinery, two foundries, four units for machining of mechanical components, two units for manufacture of steel sheet components, and a unit for assembly of electronic panels. Of these, eleven are located in Brazil and two in Germany. The Company has an installed production capacity of approximately 2,900 industrial machines and 50,000 thousand metric tons of castings per year.

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Earnings Release 1st quarter of 2021

Current Economic Scenario

2021 continues to show a favorable environment for the investment initiated in mid-2020. This important recovery in turnover can be seen in the incoming orders for Romi Machines. The current interest rates, as well as the exchange rate level stimulates the domestic industry and Brazil in general to allocate a larger share of capital to the productive economy, seeking increased productivity and the preservation of competitiveness. In view of the more concrete signs of this resumption that took place in 2020, the Company prepared itself, especially in relation to orders for raw materials and components along the supply chain, which have allowed us to serve customers in an appropriate and competitive period. Romi is prepared to continue to support its customers by providing high-technology products, within deadlines suitable to the market's needs.

In the foreign market, we have also noted a gradual resumption of machine orders, for machines produced by both Romi and by B+W, and the latter already completed major orders in 1Q21 and 4Q20, as may be seen in the incoming orders reported for these periods. These requests are a reflection of the growing volume of opportunities, mainly in the Asian continent.

The Industrial Entrepreneur Confidence Index (ICEI) also shows a strong recovery of confidence throughout the second half of 2020, and in the later months of the year this index remained stable at a level considered highly favorable for new investments.

Industrial Entrepreneur Confidence Index - ICEI

Source: CNI - ICEI, April 2021

The Installed Capacity Utilization (UCI) index of the domestic industry in general, released by the National Confederation of Industries (CNI), which has been impacted by the pandemic, returned to its normal levels in August 2020. With the increase in COVID cases in the beginning of 2021, this index has shown greater volatility, however, it remains at levels favorable to perform investments.

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