Raia Drogasil S.a. · BMFBOVESPA:RADL3
Raia Drogasil — FY2015 Earnings Presentation
20 slides from Raia Drogasil's earnings presentation, Feb 19, 2016
Slide 1: Earnings Presentation – 2015
Earnings Presentation – 2015 February 19th, 2016
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: Combined Highlights
Combined Highlights* Drugstores: 1,235 stores in operation (156 openings and 15 closures) Gross Revenues: R$ 9.4 billion, 21.1% of growth (12.5% retail same-store sales growth) Gross Margin: 29.0% of gross revenues, a 1.2 percentage point margin increase EBITDA: R$ 743.5 million, a 7.9% marg
Slide 4: Combined Raia Drogasil and 4Bio financial table
On October 1st, 2015 we concluded the acquisition of 55% of 4Bio. 2014 and 2015 figures are reported combined in order to assure the historical comparability. Raia Drogasil 4Bio (R$ million) 4Q14 2014 1Q15 2Q15 3Q15 4Q15 2015 4Q14 2014 1Q15 2Q15 3Q15 4Q15 2015 Gross Revenues 2,093.1 7,658.9 2,052.4
Slide 5: Another Year of Strong Growth with Value Creation
Another Year of Strong Growth with Value Creation. Combined Gross Revenues & Store Count Combined EBITDA (R$ million, Units) (R$ million, % of Gross Revenues) 7.9% 7.0% 6.1% 6.2% 6.0% MERGER ~1,400 5.7% 1,235 4.8% 5.8% 4.2% 1,094 970 9,425 IPO Raia 866 186 778 7,659 689 125 IPO 6,464 Drogasil 583 5,
Slide 6: Growth since the creation of Raia Drogasil
Since the creation of Raia Drogasil, store count increased by 58.7%, Gross Revenues by 97.4%, EBITDA by 153.1% and Net Income by 157.2%, with a ROIC expansion of 6.7 p.p. 2011 2015 Var. % Combined Operational Highlights Store Count 778 1,235 58.7% Sales Area (sqm) 109,095 176,969 62.2% 9 states 17 s
Slide 7: Store openings and closures in 2015
We opened in 2015 a total of 156 stores and closed 15. In the 4Q15, we opened 62 stores and closed 7. At the end of the period, 33.5% of our stores were still maturing. Store Count* Age Structure of Store Portfolio 1,235 MATURE YEAR 3 YEAR 2 YEAR 1 12.0% 11.9% 12.3% 12.2% 12.7% 1,180 11.9% 10.2% 10.
Slide 8: Market share gains and geographic presence
We have gained share in most of the regions, achieving 10.6% of comparable market share in Brazil, an increase of 0.9 percentage point compared to the previous year. Geographic Presence - Retail Combined Market Share*** 22.6 4Q14 21.8 4Q15 RN: 7 stores PB: 9 stores PE: 18 stores 13.3 13.0 AL: 5 stor
Slide 9: Gross revenues and retail sales mix by category
OTC was the highlight in 2015 (growth of 21.8%), while HPC was the highlight of the quarter (growth of 22.2%), boosted by insect repellents. 4Bio grew by 48.1% in 2015 and 61.3% in the quarter. Combined Gross Revenues Retail Sales Mix Services 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 2014 vs 2015 (%) 2014
Slide 10: Revenue and same-store sales growth
Our revenues grew by 21.1% in 2015, with 8.5% for mature stores. In the 4Q15, revenues increased by 21.0% with 8.3% for mature stores, including a negative calendar effect of 0,6%. Combined Revenue Growth Retail Same-Store Sales Growth Retail Mature Stores Growth 23.2% 21.1% 21.0% 20.5% 20.4% 19.7%
Slide 11: Gross margin and cash cycle
Gross margin increased +1.2 p.p. due to improvements in commercial terms, opportunistic purchases and inventory losses. Annual cash cycle reduction of 4.9 days (11 days since 2012). Gross Margin Cash Cycle (R$ million, % of Gross Revenues) (COGS Days, Gross Revenues Days) 30.3% Receivables Inventori
Slide 12: SG&A increase in operating expenses
SG&A increased by 0.3 p.p. in 2015 and by 1.0 p.p. in the 4Q15 reflecting pressures from payroll (0.4 p.p.), from electricity (0.3 p.p.) and from the acceleration in store openings (0.3p.p.). Operating Expenses Operating Expenses (R$ million) (% of Gross Revenues) 21.1% 21.2% 21.4% 20.8% 20.8% 21.1%
Slide 13: Annual EBITDA and margin
The annual EBITDA totaled R$ 743.5.2MM, with a margin of 7.9% (7.3% in the 4Q15). New stores penalized EBITDA by R$ 40.0 MM. EBITDA margin of 8.0% for Raia Drogasil and of 3.5% for 4Bio. EBITDA (R$ million, % of Gross Revenues) 9.4% 1,079* stores operating since 2014: 7.9% (performance in 2015) 7.0%
Slide 14: Adjusted net income of R$ 391.1 MM
We reached an adjusted net income of R$ 391.1 MM in 2015, a growth of 43.6%. Reported net income grew 53.0% vs previous year. We had R$ 8.8MM of non-recurring expenses in the 4Q15 Adjusted Net Income Non-Recurring Expenses (R$ million, % of Gross Revenues) 5.1% 4.2% 3.9% 3.9% 3.7% 3.5% 3.6% 391.1 (R
Slide 15: Positive free cash flow for third consecutive year
Positive Free Cash Flow (R$ 110.4 MM) for the third consecutive year. Total Cash Flow was negative in R$ 19,9 MM. Operating Cash Flow of R$ 499.1 MM funded CAPEX of R$ 388.7 MM. Cash Flow 4Q15 4Q14 2015 2014 (R$ million) Adjusted EBIT 128.0 108.0 516.5 356.7 Non-Recurring Expenses (8.8) (3.9) (10.0)
Slide 16: ROIC increase
ROIC increased by 4.3 percentage point versus 2015, reflecting a higher margin and an increased capital efficiency. ROIC 19.4% 15.1% 12.7% 12.8% 10.5% 2011 2012 2013 2014 2015 16
Slide 17: Total Shareholder Return and share appreciation
We generated a Total Shareholder Return of 41.4% with average annual returns of 24.8% for Drogasil IPO investors and of 27.9% for the Raia IPO investors. Share Appreciation RADL3 IBOV 634 80 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 18: What We Accomplished in 2015
What We Accomplished in 2015 Accelerated Organic Growth 156 New Stores, more than 200 contracts signed in 2015 Highly selective on locations, returns-driven decisions Great initial performance of new stores Improved Execution Boosted all Operating Metrics (Net Promoter Score, Stock-outs,
Slide 19: Challenges and Opportunities for 2016
Challenges and Opportunities for 2016 Implement our Strategic Plan Accelerate Organic Growth Develop New Formats Enhance Category Management and Shopping Experience Engage, Analyze and Potentialize Customers Leverage Free Cash Flow Generation and Capital Structure Financial discipline:
Slide 20: IR Highlights for 2016
IR Highlights for 2016 ADR Level 1 Approved by the Board, preparing the launch Greater visibility by the Capital Markets Access to a broader pool of investors Expected Timing for Implementation: March to April, 2016 2016 Earnings Releases 1Q: April 28th, 2016 2Q: July 28th, 2016 3Q