Raia Drogasil S.A. · BMFBOVESPA:RADL3
Raia Drogasil — Q2 2017 Earnings Presentation
15 slides from Raia Drogasil's earnings presentation, Jul 28, 2017
Slide 1: Earnings Presentation: 2Q17
Earnings Presentation: 2Q17 Taking Close Care of People´s Health and Well-Being during all Times of their Lives July 28, 2017 1
Slide 2: Disclaimer
Disclaimer This presentation contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Exchange Act of 1934. Such forward-looking statements are only predictions and are not guarantees of future performa
Slide 3: Highlights of the Quarter
HIGHLIGHTS OF THE QUARTER: Drugstores: 1,506 stores in operation (54 openings and 5 closures) Gross Revenue: R$ 3.4 billion, a 16.0% growth (6.1% retail same-store sales growth) Gross Margin: 29.4% of gross revenues, a 2.1 percentage point decrease EBITDA: R$ 301.1 million, 8.9% margin, a 1.
Slide 4: We opened 54 stores in the 2Q17 and 211 new stores over the last 12 months
We opened 54 stores in the 2Q17 and 211 new stores over the last 12 months. At the end of the period, 36.1% of our stores were still maturing (highest since 2Q13). Store Count* Age Structure of Store Portfolio MATURE YEAR 3 YEAR 2 YEAR 1 1,506 1,457 14.8% 15.5% 15.0% 14.7% 14.0% 1,420 1,370 10.5% 10
Slide 5: We gained share in 4 of 5 regions, reaching 11.7% national market share
We gained share in 4 of 5 regions, reaching 11.7% national market share, an increase of 0.8 p.p. Entered the state of Ceará (NE) in July with 4 openings in Fortaleza. Signed locations in MA and PI. Geographic Presence Market Share MA PI 2Q16 CE 22.8% 22.1% RN: 13 stores 2Q17 PB: 12 stores PE: 30 sto
Slide 6: Retail grew 15.0% and 4Bio 47.1%; generics the highlight
Retail grew 15.0% and 4Bio 47.1%. Generics were the highlight of the quarter (0.3 p.p. increase in the sales mix), followed by OTC and Branded Rx, at the expense of HPC. Consolidated Gross Revenue Retail Sales Mix 2Q17 vs. 2Q16 (%) Services 0.1% 0.1% 0.1% 0.1% 0.1% RD 4Bio 2Q17 vs. 2Q16 Pharmacies 4
Slide 7: Retail grew 16.0% with 2.0% for mature stores
Retail grew 16.0% with 2.0% for mature stores (negative calendar effect of 0.8%). Considering only May and June, revenues increased by 17.4% with 3.4% for mature stores, in line with CPI of 3.0%. Consolidated Revenue Growth Same Store Sales Growth* Mature Stores Growth* 25.5% 26.1% 25.2% 24.5% 21.1%
Slide 8: Consolidated gross margin fell 2.1 p.p. on lower inflationary gains on inventories
Consolidated gross margin fell 2.1 p.p. mainly due to lower inflationary gains on inventories (1.6 p.p. for retail and 0.3 p.p for 4Bio). NPV adjustment reduced gross margins by another 0.2 p.p.. Gross Margin Cash Cycle* (R$ million, % of Gross Revenues) (COGS Days, Gross Revenues Days) 31.6% Receiv
Slide 9: SG&A diluted by 0.6 p.p.
SG&A diluted by 0.6 p.p. Payroll, electricity, acquiring fees, pre-operational, marketing, logistics, write-offs, 4Bio and G&A diluted by 0.1 p.p. each. Rentals increased 0.3 p.p. (9.5% IGPM in 2H16). Operating Expenses Operating Expenses (R$ million) (% of Gross Revenues) 686.3 698.6 677.6 21.2% 21
Slide 10: EBITDA totaled R$ 301.1 MM, with margin of 8.9%
EBITDA totaled R$ 301.1 MM, with margin of 8.9%. Seasonal margin pressure of 2.1 p.p. partially offset by 0.6 p.p. structural expense dilution. New stores penalized EBITDA by R$ 8.5 MM. Adjusted EBITDA (R$ million, % of Gross Revenues) 1,410* stores operating since 2016: 10.4% (performance in the 2Q
Slide 11: Adjusted net income totaled R$ 138.0 million in the 2Q17
Adjusted net income totaled R$ 138.0 million in the 2Q17, a decrease of 12.2% over the same period of the previous year due to the lower EBITDA margin. Adjusted Net Income (R$ million, % of Gross Revenues) 5.4% 3.8% 4.1% 3.3% 2.9% 157.1 138.0 116.9 105.4 92.2 2Q16 3Q16 4Q16 1Q17 2Q17 11
Slide 12: Negative Free Cash Flow of R$ 47.5 million and Total Cash Flow of R$ 134.0 million
Negative Free Cash Flow of R$ 47.5 million and Total Cash Flow of R$ 134.0 million Cash Flow 2Q17 2Q16 YTD '17 YTD '16 (R$ million) Adjusted EBIT 219.6 238.2 386.1 368.1 NPV Adjustment (11.1) (11.7) (32.2) (22.1) Non-Recurring Expenses - - (2.2) - Income Tax (34%) (70.9) (77.0) (119.6) (117.6) Depre
Slide 13: Cumulative share appreciation since the Drogasil IPO
Since the IPO of Drogasil, we achieved a cumulative share appreciation of 1,152.0% and an average annual shareholder return of 28.7%. Considering the IPO of Raia, the average annual return was 33.7%. Share Appreciation 1,252 RADL3 IBOV 116 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-
Slide 14: Paving the Way for a Sustainable Margin Expansion
Paving the Way for a Sustainable Margin Expansion Successfully navigated a very challenging quarter Very high gross margin pressure: price increase of 3.1%, with 1.4% for 4Bio, vs. 11.8% in 2016 Lower revenue growth due to the April calendar: 3 long holidays in a single month The margin pres
Slide 15: Capital Markets Highlights
Capital Markets Highlights 2017 Earnings Releases 3Q: October 26th, 2017 RD Day 2017 November 10th, 2017 Villa Bisutti, São Paulo Scheduled Investor Conferences August 15th to 17th: Annual Brazil Conference, Santander (São Paulo) August 22th Brazil Consumer and Healthcare Check-Up, J