Raia Drogasil S.A. · BMFBOVESPA:RADL3
Raia Drogasil — Q3 2015 Earnings Presentation
15 slides from Raia Drogasil's earnings presentation, Oct 30, 2015
Slide 1: Earnings Presentation – 3Q15
Earnings Presentation – 3Q15 October 30th, 2015
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
Highlights Drugstores: 1,177 stores in operation (37 openings and two closures) Gross Revenues: R$ 2.4 billion, 20.0% of growth (12.0% for same-store sales) Gross Margin: 28.9% of gross revenues, a 1.0 percentage point margin increase EBITDA: R$ 181.3 million, a 7.6% margin, 0.2 percentage p
Slide 4: We opened 94 stores in the 9M15 vs. 80 in the 9M14
We opened 94 stores in the 9M15 vs. 80 in the 9M14. Revising guidance from 130 to 145 new store openings already in 2015. 33.2% of stores still undergoing maturity. Store Count Age Structure of Store Portfolio MATURE YEAR 3 YEAR 2 YEAR 1 1,177 1,142 11.6% 12.0% 11.9% 12.3% 12.2% 1,109 12.3% 11.9% 10
Slide 5: Our national market share increased substantially, with gains in every region
Our national market share increased substantially (+ 0.8 pp), with gains in every region where we operate. Geographic Presence Market Share*** 3Q14 22.3 20.6 3Q15 RN: 7 stores PB: 7 stores PE: 17 stores AL: 5 stores 12.4 12.5 SE: 5 stores 10.0 DF: 45 stores 9.2 BA: 23 stores MT: 10 stores GO: 61 sto
Slide 6: Revenues increased by 20.0%; same store sales grew 12.0%
Revenues increased by 20.0%. Same store sales grew by 12.0% while our mature stores recorded an increase of 8.1%. World Cup impact of +0,7% was partially offset by calendar effect of -0.4%. Growth – Total Sales Growth – Same Store Sales Growth – Mature Stores 22.9% 20.4% 20.0% 19.4% 18.5% 18.3% 15.6
Slide 7: Gross margin increased 1.0 pp; cash cycle reduced
Gross margin increased 1.0 pp due to improvements in commercial terms, forward buying, opportunistic purchases, inventory losses and NPV adjustment. Cash cycle reduction of 7.2 days. Gross Margin Cash Cycle (R$ million, % of Gross Revenues) (COGS Days, Gross Revenues Days) 30.5% Receivables Inventor
Slide 8: SG&A increased 0.8 pp
SG&A increased 0.8 pp. 3Q15 sales expenses inflated by personnel, electricity, faster store- opening pace. G&A increased by the low comp base of the variable compensation allowance. Operating Expenses Operating Expenses (R$ million) (% of Gross Revenues) 508.4 21.3% 20.9% 21.3% 20.5% 20.6% 478.7 60.
Slide 9: EBITDA of R$ 181.3 million, a 7.6% margin
We reached an EBITDA of R$ 181.3 million, a 7.6% margin, driven by gross margin increase and partially offset by SG&A pressures. Store openings penalized EBITDA by R$ 10.8 million. EBITDA (R$ million, % of Gross Revenues) 9.5% 7.4% 7.6% 7.4% 7.6% 217.2 1.083* stores operating since 4Q14 : 181.3 (per
Slide 10: Adjusted net income increased by 18.0%
Our adjusted net income increased by 18.0%. Reported net income grew 24.0%, as non-recurring expenses ceased to exist. Adjusted Net Income (R$ million, % of Gross Revenues) 5.2% 4.0% 3.6% 3.9% 4.0% 118.9 95.0 80.5 81.0 75.4 3Q14 4Q14 1Q15 2Q15 3Q15 10
Slide 11: Free cash flow of R$ 68.2 million and total cash flow of R$ 66.7 million
Free cash flow of R$ 68.2 million and total cash flow of R$ 66.7 million. Operating cash flow more than fully funded the investments undertaken in the 3Q15. Cash Flow 3Q15 3Q14 9M15 9M14 (R$ million) Adjusted EBIT 123.5 98.9 384.0 244.9 Non-Recurring Expenses - (2.8) - (5.6) Income Tax (34%) (42.0)
Slide 12: Total Shareholder Return of 55.0% YTD
Raia Drogasil generated a Total Shareholder Return of 55.0% YTD. Average annual return since Drogasil’s IPO of 27.0% and of 32.1% since Droga Raia’s IPO. Share Appreciation RADL3 IBOV 698 83 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-
Slide 13: Initiatives to enhance store productivity and offset inflationary pressures
We are developing several middle-term & long-term Initiatives to enhance store productivity and offset inflationary pressures Inflationary Pressures are the Main Challenge to Margin Expansion Wages (12% of revenues) have had real increases over the last five years Energy (0.7% of revenues) has
Slide 14: Increasing the store guidance from 130 to 145 stores in 2015
Increasing the store guidance from 130 to 145 stores already in 2015 New Store Openings Main Challenges ? Stores Opened / Guided ? Accelerating Prospections Guidance Increase 145 Future Openings – To be Guided* Tougher Licensing Requirements 15 131 131 Excessive 4Q Opening Concentration 130
Slide 15: IR Calendar
IR Calendar 2015 Earnings (after market) 4Q: February 18th, 2016 Raia Drogasil Day December 4th, from 8 am to 1 pm Hotel Unique, São Paulo Next Conferences November 17th: Citi Consumer and Retail Conference, Citi (São Paulo) December 3rd: Brazil Opportunities Conference, JP Morgan (S