TASA4 Taurus

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 light firearms manufacturer and the world’s largest producer of revolvers, according to its reference form. In 1949, it became a corporation (sociedade anônima), marking a new growth phase, 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 access to a business historically linked to the metallurgical and firearms industries, with a strong international presence.

Throughout its history, Taurus has expanded its industrial facilities, diversified activities, and carried out 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 submachine guns, and began producing semi-automatic pistols under its own brand. It also expanded its operations by creating Taurus International Manufacturing Inc. (TIMI) in Miami, targeting the North American market, and structured businesses related to armor plating, helmets, and protective equipment. In the 2010s, the company underwent an important corporate restructuring, joined B3’s Level 2 of corporate governance, and strengthened its governance practices, while at the same time consolidating weapons production in a single industrial unit in São Leopoldo (RS) and stabilizing operations after a period of debt reprofiling.

Taurus’s main activity is the production and sale of light firearms, 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 guns 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 firearms, 701,000 of which at the Brazilian unit and 221,000 at the US plant. The portfolio includes short guns for public and private security, military-restricted 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, injection of metal parts via M.I.M., heat and surface treatments, as well as final assembly with adjustments and calibration, combining modern machinery and older equipment kept in full operation.

Taurus also operates in the M.I.M. segment, producing metal injection parts used mainly in its own firearms & accessories line and, to a lesser extent, made to order for third parties. The acquisition of a new continuous electric furnace, expected to start operating in the second half of 2024, should double this segment’s installed capacity, with the aim of expanding external sales to different businesses and markets, creating a new business center within the company. In the Helmets segment, 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 returned to being consolidated in the financial statements as of 2021 and continues to operate normally, serving the domestic market through a broad sales network and e-commerce.

From a geographic and market standpoint, Taurus has a relevant international presence. The company’s firearms are sold in Brazil, the United States and in more than 100 countries. In 2024, net revenue from sales in Brazil was 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 emphasis on the North American market, which alone accounted for 82.5% of this revenue. In addition to its plants in Brazil and the US, the industrial unit of the JD Taurus joint venture in India began operating in March 2024 with pilot lots of firearms and an assembly capacity of approximately 1,150 firearms per day, with the possibility of 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, linked to public security and the physical protection of citizens, the manufacture, trade, import and export of firearms and ammunition are heavily regulated and supervised by various public authorities. All firearms exports require prior authorization from the Ministry of Defense and the Ministry of Foreign Affairs, including preliminary negotiation stages with the purchasing country. On the environmental front, all business units are licensed or in the process of being licensed in accordance with current legislation, including operating licenses, registrations with IBAMA, Army registration certificates and operating permits issued by the Federal Police. The company highlights that operating without a valid environmental license is a crime and that its projects may require Environmental Impact Studies and Reports, as well as compensation measures such as allocating resources to conservation areas.

In ESG (environmental, social and governance) terms, Taurus states that it integrates these practices into its corporate strategy. In December 2024, the company published its second sustainability report, for 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 consultancy (KPMG), and includes a materiality matrix with 12 relevant topics in governance, social and environmental areas. The company mentions a focus on corporate governance, ethics, data security, occupational health and safety, diversity and inclusion, human rights, product quality and innovation, and the management of waste, water, energy and greenhouse gas emissions. In addition, it 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 for training people in vulnerable situations and internal employee development programs. For individual 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 light firearms – 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 metal parts to order, as well as boilerwork and machining services; Taurus Holdings, Inc., which consolidates operations in the United States through subsidiaries focused on manufacturing and marketing firearms in the North American and Canadian markets; Taurus Investimentos Imobiliários Ltda., focused on managing the company’s own properties; and Taurus Helmets, linked 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 firearms and ammunition in Brazil through two brick-and-mortar stores and provides technical assistance services and a sport shooting club. This structure reinforces the industrial and international nature of Taurus Armas S.A., whose revenue is broadly diversified by country and client, with no material concentration in a single buyer above 10% of consolidated net revenue, according to the reference form.