Raia Drogasil S.a. · BMFBOVESPA:RADL3
Raia Drogasil — Q3 2017 Earnings Presentation
15 slides from Raia Drogasil's earnings presentation, November 2017
Slide 1: Earnings Presentation: 3Q17
EARNINGS PRESENTATION: 3Q17 Taking Close Care of People´s Health and Well-Being during all Times of their Lives 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: 1,554 stores in operation (54 openings and 6 closures) › Gross Revenue: R$ 3.6 billion, a 17.4% growth (7.6% retail same-store sales growth) › Gross Margin: 28.5% of gross revenues, a 1.0 percentage point decrease › EBITDA: R$ 296.5 million, 8.3% margin, in l
Slide 4: Store Development
STORE DEVELOPMENT We opened 54 new stores in the 3Q17 and 150 over the last nine months of 2017. At the end of the period, 36.4% of our stores were still maturing (highest since 2Q13). Store Count* Age Structure of Store Portfolio 1,554 MATURE YEAR 3 YEAR 2 YEAR 1 1,506 1,457 15.5% 15.0% 14.7% 14.0%
Slide 5: We Gained Share in 4 of 5 Regions
WE GAINED SHARE IN 4 OF 5 REGIONS We reached 11.7% national market share, an increase of 0.6 p.p. Also, we entered the state of Ceará (NE) in July with 4 openings in Fortaleza. Signed locations in MA and PI. Geographic Presence Market Share 22.3%22.7% 3Q16 MA 3Q17 PI CE: 4 stores RN: 14 stores PB: 1
Slide 6: Retail Operations Grew 16.3% and 4Bio 52.9%
RETAIL OPERATIONS GREW 16.3% AND 4BIO 52.9% OTC was the highlight of the quarter (0.6 p.p. increase in the sales mix), followed by HPC and Pharma, as both Branded and Generics lost 0.2 p.p. in the sales mix. Consolidated Gross Revenue Retail Sales Mix 3Q17 vs. 3Q16 RD Pharmacies 4Bio * 0.1% 0.1% 0.1
Slide 7: Revenue Growth of 17.4%, with 3.5% for Mature Stores
REVENUE GROWTH OF 17.4%, WITH 3.5% FOR MATURE STORES Negative calendar effect of 0.1% and easier 3Q16 comps due to the Rio Olympic Games. Consolidated Revenue Growth Same Store Sales Growth* Mature Stores Growth* 25,5%25,2% 24,5% 21,1% 21,6% 17,4% 16,0% 14,3% 13,5%13,2% 12,5% 10,5% 9,8% 7,6% 8,9% 8,
Slide 8: Gross Margin and Cash Cycle
GROSS MARGIN AND CASH CYCLE Gross margin decreased by 1.0 p.p. mainly due to lower inflationary gains on inventories (0.7 p.p.). NPV adjustment and 4Bio reduced gross margins by another 0.3 p.p. each, which was mitigated by other gains (0.3 p.p.). Gross Margin Cash Cycle* R$ Million, % Of Gross Reve
Slide 9: SG&A Expenses Diluted by 1.0 p.p.
SG&A EXPENSES DILUTED BY 1.0 P.P. Personnel expenses were diluted by 0.5 p.p. Marketing, pre-operating expenses, G&A and 4Bio diluted by 0.1 p.p. each. Rentals pressured 0.1 p.p., offset by 0.1 p.p. dilution in other expenses. Dilution of 0.4 p.p. versus the 2Q17 (G&A, rental, electricity and asset
Slide 10: EBITDA Totaled R$ 296.5 MM, with 8.3% Margin
EBITDA TOTALED R$ 296.5 MM, WITH 8.3% MARGIN Gross margin pressure of 1.0 p.p. totally offset by 1.0 p.p. structural expense dilution. New stores penalized EBITDA by R$ 3.0 MM. Adjusted EBITDA R$ Million, % Of Gross Revenues 1,404* stores operating since 2016: 8.9% (performance in the 3Q17) 8.3% 8.3
Slide 11: Net Income Totaled R$ 136.5 Million in the 3Q17
NET INCOME TOTALED R$ 136.5 MILLION IN THE 3Q17 An increase of 16.8% over the same period of the previous year. Adjusted Net Income R$ Million, % of Gross Revenues 3.8% 4.1% 3.8% 3.3% 2.9% 138.0 136.5 116.9 105.4 92.2 3Q16 4Q16 1Q17 2Q17 3Q17 11
Slide 12: Free Cash Flow of R$ 102.1 Million
FREE CASH FLOW OF R$ 102.1 MILLION Total cash generation of R$ 102.8 million. Cash Flow 3Q17 3Q16 YTD '17 YTD '16 (R$ million) Adjusted EBIT 209.7 183.5 595.8 551.6 NPV Adjustment (17.0) (24.8) (49.3) (46.9) Non-Recurring Expenses - - (2.2) - Income Tax (34%) (65.5) (54.0) (185.1) (171.6) Depreciati
Slide 13: RADL3 Shares Appreciated by 7.2% in the 3Q17
RADL3 SHARES APPRECIATED BY 7.2% IN THE 3Q17 Since the IPO of Drogasil, we achieved a cumulative share appreciation of 1,239.3% with an average annual return of 28.8%. Considering the IPO of Raia, the average annual return was 33.6%. Share Appreciation 1,339 RADL3 IBOV 136 Sep-07 Sep-08 Sep-09 Sep-1
Slide 14: Paving the Way for a Sustainable Margin Expansion
PAVING THE WAY FOR A SUSTAINABLE MARGIN EXPANSION Successfully navigated a challenging quarter › Significant gross margin pressure: residual effect of the high price cap increase in the 3Q16 comp base › Softer revenue comp base: 3Q16 affected by the Rio Olympics Games The flat EBITDA margin hides gr
Slide 15: Capital Markets Highlights
CAPITAL MARKETS HIGHLIGHTS 2017 Results › 4Q: February 22nd, 2018 RD Day 2017 › November 10th, 2017, 8:00 AM › Casa Bisutti, São Paulo Scheduled Investor Conferences › November 14th to 15th: Bradesco 7th Annual CEO Forum, Bradesco (New York) › November 28th to 30th: 10th Brazil Opportunities Confere