1 q14 arezzo_apresentacao_call eng

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1 q14 arezzo_apresentacao_call eng

  1. 1. | Apresentação do Roadshow 1 Conference Call 1Q14
  2. 2. 2 Important Disclaimer Information contained in this document may include forward-looking statements and reflect Management’s current view and estimates of the evolution of the macroeconomic environment, industry conditions, Company’s performance and financial results. Any statements, expectations, capabilities, plans and assumptions contained in this document, which do not describe historical facts, such as information about declaration of dividend payment, future direction of operations, implementation of relevant operating and financial strategies, investment program and factors or trends affecting the financial condition, liquidity or results of operations, are forward-looking statements, as set forth in the “U.S. Private Securities Litigation Reform Act of 1995”, and involve several risks and uncertainties. There is no guarantee that these results will occur. Forward-looking statements are based on several factors and expectations, including economic and market conditions, industry competitiveness and operational factors. Any changes in such expectations and factors may cause actual results to differ from current expectations. The Company’s consolidated financial statements presented herein are in accordance with the International Financial Reporting Standards - IFRS, issued by the International Accounting Standards Board - IASB, based on the audited financial statements. Non-financial information and other operating information have not been subject to an audit by independent auditors.
  3. 3. 3 Gross revenue reached R$257.8 million in the 1Q14, an increase of 7.1% against 1Q13, highlighting a 10.3% growth in the domestic market. Gross Revenue In 1Q14, gross profit was R$92.1 million, a growth of 2.9% against 1Q13, and the gross margin reached 43.1%. Gross Profit EBITDA for 1Q14 amounted R$27.3 million, a reduction of 4.7% in relation to 1Q13, with a margin of 12.8%; EBITDA In this quarter, Arezzo&Co opened 3 stores and expanded 1 store, with growth of 20.6% in sales area over the last 12 months. Sales Area Expansion In 1Q14, net income reached R$17.4 million, with net margin of 8.2%Net Profit 1Q14 Highlights
  4. 4. 4 Growth of 10.3% from the domestic market gross revenues, with growth of 9.2% for Arezzo brand,11.7% for Schutz brand and 48.5% for Anacapri brand. Company Growth Gross Revenues – Domestic and Export Market (R$ million) Gross Revenues by brand – Domestic Market (R$ million) 150.7 164.6 79.0 88.2 7.9 11.83.9 1.7 241.5 266.3 1Q13 1Q14 Arezzo Schutz Anacapri Others¹ 241.5 266.3 15.9 9.5 257.5 275.8 1Q13 1Q14 Domestic Market External Market 10.3% -40.1% 7.1% 9.2% 11.7% 10.3% 1) Others: Reduction of 56.2% in the 1Q14. 48.5%
  5. 5. In 1T14, monobrand stores (Franchises and Owned Stores) increased 17.7%, highlighting the growth of 24.8% in Franchise channel. The SSS Sell Out growth 3.8% in the 1Q14. Gross Revenue Breakdown by Channel – Domestic Market 5 SSS Sell-out (owned stores + franchises) 3.3% 8.7%SSS Sell-in (franchises) 1) Others: Decreasing 73.1% in 1Q14. 6.7% 8.3% Gross Revenue by channel – Domestic Market (R$ million) 116.9 145.9 61.4 63.9 60.0 55.63.3 0.9 241.5 266.3 1Q13 1Q14 Franchise Owned Stores Multi-brand Others¹ Total 24.8% -7.3% 10.3% 4.1% SSS Sell-out (owned stores + web + franchises) 3.8%8.4%
  6. 6. The sales area increased 20.6% in the 1Q14, due to the opening of 61 stores and expansion of 14 stores in the last 12 months. Distribution Channel Expansion 6 Owned Stores and Franchises Expansion 1) Includes 6 outlets with total area of 2,217 sqm 2) Domestic Market 274 299 343 407 29 345 400 461 18.0 22.1 26.7 32.1 1Q11 1Q12 1Q13 1Q14 +61 57 54 303 46 +55 +42 20.7% 20.6% 22.6% Franchises Owned Stores Total sq m Franchises Multi Brands ² Owned Stores ¹ 41 28 1,425 Multi Brands ² Owned Stores ¹ 2 10 Franchises 17 Multi Brands ² Owned Stores ¹ 7 936 Franchises Multi Brands ² Owned Stores ¹ 349 17 1,048
  7. 7. In 1Q14, gross profit reached R$92,1 million, and the gross margin was 43.1%, impacted by the change in the mix of channels in the quarter. EBITDA for 1Q14 amounted R$27.3 million, with a margin of 12.8%. Gross Profit and EBITDA 7 Gross Profit (R$ million) EBITDA (R$ million) 28.6 27.3 1Q13 1Q14 89.4 92.1 1Q13 1Q14 2.9% 44.5% 43.1% Gross profit Gross Margin EBITDA EBITDA Margin 14.2% 12.8% -4.7%
  8. 8. The Company’s net income totaled R$17.4 million in 1Q14, with 8.2% net margin. Net Income and Net Margin 8 Net Income (R$ million) 19.4 17.4 1Q13 1Q14 8.2% Net marginNet profit 9.6%
  9. 9. Cash Flow 9 Arezzo&Co generated R$33.9 million of net cash flow in 1Q14, in line with the generation of operating cash of the same period last year. Operating Cash Flow (R$ thousand) Income before income tax and social contribution 28,091 26,997 (1,094) -3.9% Depreciation and amortization 2,585 3,209 624 24.1% Other (818) (3,184) (2,366) 289.2% Decrease (increase) in current assets / liabilities 8,237 9,202 965 11.7% Trade accounts receivables (2,374) 2,503 4,877 n/a Inventories (11,474) (17,774) (6,300) 54.9% Suppliers 33,513 39,400 5,887 17.6% Change in other noncurrent and current assets and liabilities(11,428) (14,927) (3,499) 30.6% Payment of income tax and social contribution (3,663) (2,342) 1,321 -36.1% Net cash flow generated by operational activities 34,432 33,882 (550) -1.6% Change in R$ Change in % 1Q141Q13Operating Cash Flow
  10. 10. In 1Q14, the Company invested R$9.9 million, a reduction of 12.2% compared with the same period last year. Indebtedness policy remained conservative. Capital Expenditure (CAPEX) and Indebtedness 10 CAPEX (R$ million) Indebtedness (R$ million) 1) Others: reduction of 26.9% in 1Q14. 2.4 3.2 8.0 6.1 0.8 0.6 11.2 9.9 1Q13 1Q14 Stores Corporate Others¹ -12.2% -24.2% 33.2% Cash position and Indebtedness 1Q13 4Q13 1Q14 Cash 213,306 185,691 207,553 Total debt 87,880 98,418 96,652 Short term 41,226 59,835 59,680 % total debt 46.9% 60.8% 61.7% Long-term 46,654 38,583 36,972 % total debt 53.1% 39.2% 38.3% Net debt (125,426) (87,273) (110,901) EBITDA LTM 149,731 159,460 158,113 Net Debt/EBITDA LTM -0.8X -0.5x -0.7X
  11. 11. Contacts Thiago Borges Leonardo Pontes, CFA Telephone: +55 11 2132-4300 ri@arezzoco.com.br www.arezzoco.com.br CFO and Investor Relations Officer IR Manager Vanessa Sorechio Leandro Vieira IR Specialist IR Analyst

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