TASA3

Taurus Armas S.A. is a Brazilian company with a long track record in the defense industry, founded in November 1939 in Porto Alegre (RS) under the name Forjas Taurus. Originally focused on manufacturing machinery and metal equipment, the company evolved over the decades to establish itself as a producer of small arms and, according to its reference form, the world’s largest revolver manufacturer. In 1949, it became a corporation (sociedade anônima), marking a new growth cycle, and in 1982 it registered with the Brazilian Securities and Exchange Commission (CVM) and listed its shares on the then São Paulo Stock Exchange, now B3. Taurus shares, traded under the tickers TASA3 and TASA4, give investors exposure to a business historically linked to the metallurgical and firearms industry, with a strong international presence.

Over its history, Taurus expanded its industrial footprint, diversified activities, and made relevant acquisitions in the firearms segment. In the 1980s, it acquired the Brazilian subsidiary of Indústria e Comércio Beretta S.A., specialized in pistols and machine guns, and began producing semi-automatic pistols under its own brand. It also expanded its operations with the creation of Taurus International Manufacturing Inc. (TIMI) in Miami, targeting the North American market, and structured businesses related to armored protection, helmets, and protective equipment. In the 2010s, the company underwent a major corporate restructuring, joined B3’s Level 2 corporate governance segment, and strengthened its governance practices, while consolidating firearms production at an industrial unit in São Leopoldo (RS) and stabilizing operations after a cycle of debt reprofiling.

Taurus’s core activity is the production and sale of small arms, and it is classified as a Strategic Defense Company in Brazil. The company manufactures and sells revolvers, pistols, and tactical weapons, including carbines, rifles, shotguns, long rifles, and submachine guns, serving both the civilian market and police and military forces in various countries. Its business model is structured into operating segments: Firearms & Accessories, M.I.M. (Metal Injection Molding), and Helmets. In 2024, the firearms segment accounted for 91.0% of consolidated net revenue, highlighting the predominance of this business in the company’s results. Taurus also holds stakes in other companies and coordinates a group of subsidiaries that complement its industrial and commercial activities.

In the Firearms & Accessories segment, Taurus operates industrial units in Brazil, in São Leopoldo (RS), and in the United States, in the state of Georgia, in addition to the JD Taurus joint venture in India. In 2024, it produced 922,000 weapons, of which 701,000 at the Brazilian unit and 221,000 at the U.S. plant. The portfolio includes handguns used in public security, private security, restricted military use, and civilian use, as well as long guns for different applications. The company also maintains the Taurus JM Joint Venture for the manufacture of magazines. Production uses metallurgical processes such as forging, CNC machining, metal parts injection via M.I.M., heat and surface treatments, and final assembly with adjustments and calibrations, combining modern machinery with older equipment kept in full operation.

Taurus also operates in the M.I.M. segment, producing metal injection molded parts used mainly in its own firearms & accessories line and, to a lesser extent, sold on a made-to-order basis to third parties. The acquisition of a new continuous electric furnace, scheduled to start operating in the second half of 2024, is expected to double the installed capacity of this segment, with the goal of expanding external sales to different businesses and markets, creating a new business hub within the company. In the Helmets segment, the subsidiary Taurus Helmets Indústria de Capacetes Ltda. manufactures motorcycle helmets, using a process that involves ABS injection, painting, finishing, sewing, and final assembly. Although this operation was classified as a “discontinued operation” for accounting purposes in 2018, it has been reconsolidated in the financial statements since 2021 and remains in normal operation, serving the domestic market through a broad sales network and e-commerce.

From a geographic and market standpoint, Taurus has significant international presence. The company’s weapons are sold in Brazil, the United States, and more than 100 other countries. In 2024, net revenue from sales in Brazil totaled R$ 296.9 million, equivalent to 17.87% of consolidated revenue, while the United States accounted for R$ 1,256.2 million, or 75.1% of total revenue. Firearms exports represented 90.4% of net revenue from firearms & accessories, with particular emphasis on the North American market, which alone accounted for 82.5% of that revenue. In addition to the plants in Brazil and the U.S., the industrial unit of the JD Taurus joint venture in India began operating in March 2024 with pilot batches of weapons and assembly capacity of approximately 1,150 weapons per day, with potential expansion depending on demand, and the company is also studying a potential joint venture in Saudi Arabia to serve the Gulf Cooperation Council (GCC) region.

Taurus’s relationship with the regulatory environment is central to its business model. Because it operates in a sector considered to be of high national interest, tied to public security and the physical protection of citizens, the manufacture, trade, import, and export of weapons and ammunition are heavily regulated and supervised by various public agencies. All weapons exports require prior authorization from the Ministry of Defense and the Ministry of Foreign Affairs, including preliminary negotiation stages with the purchasing country. In environmental matters, all business units hold or are in the process of obtaining licenses in accordance with current legislation, including operating licenses, registrations with IBAMA, Army registration certificates, and operating permits issued by the Federal Police. The company emphasizes that the absence of a valid environmental license is a crime and that its projects may require Environmental Impact Studies and Reports, as well as offsetting measures such as allocating funds to conservation areas.

In terms of ESG (environmental, social, and governance), Taurus states that it integrates these practices into its corporate strategy. In December 2024, the company released its second sustainability report, referring to the year 2023, covering the São Leopoldo units of Taurus Armas S.A. and Polimetal Metalurgia e Plásticos Ltda. The report follows GRI and SASB standards and was reviewed by an independent consulting firm (KPMG), and includes a materiality matrix with 12 relevant topics in governance, social, and environmental areas. The company highlights a focus on corporate governance, ethics, data security, occupational health and safety, diversity and inclusion, human rights, product quality and innovation, and waste, water, energy, and greenhouse gas emissions management. It also declares alignment with the UN Sustainable Development Goals (SDGs), such as good health and well-being, quality education, gender equality, decent work, industry and innovation, reduced inequalities, responsible consumption and production, and climate action, with initiatives to train people in vulnerable situations and internal programs for employee development. For retail investors looking at TASA3 and TASA4 shares on B3, these elements help them understand not only the nature of the core business – the manufacture of small arms – but also the regulatory, geographic, and sustainability context in which the company operates.

Finally, Taurus’s corporate structure includes several subsidiaries that support and complement its core business. These include Polimetal Metalurgia e Plásticos Ltda., which manufactures custom metal parts, boilerwork, and machining services; Taurus Holdings, Inc., which consolidates operations in the United States through subsidiaries focused on manufacturing and selling firearms in the North American and Canadian markets; Taurus Investimentos Imobiliários Ltda., focused on managing the company’s own real estate; and Taurus Helmets, tied to the helmets segment. There are also companies with specific purposes, such as T. Investments Co. Inc., created for the acquisition and liquidation of financial credits, and AMTT Taurus Com. Varejista Ltda., which operates retail sales of weapons and ammunition in Brazil through two physical stores and provides technical assistance services and a sport shooting club. This configuration reinforces the industrial and international nature of Taurus Armas S.A., whose revenue is widely diversified by country and customer, with no significant concentration in any single buyer above 10% of consolidated net revenue, according to the reference form.