Uploaded on

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
800
On Slideshare
0
From Embeds
0
Number of Embeds
1

Actions

Shares
Downloads
1
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. 3Q11 ResultsConference Call October 28, 2011
  • 2. DISCLAIMER This presentation contains forward-looking statements regarding the prospects of the business, estimates for operating and financial results, and those regarding Cia. Herings growth prospects. These are merely projections and, as such, are based exclusively on the expectations of Cia. Hering management concerning the future of the business and its continued access to capital to fund the Company’s business Plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors and risks disclosed in Cia. Hering’s filed disclosure documents and are, therefore, subject to change without prior notice.
  • 3. AGENDA Highlights 3Q11 Operating Performance Outlook3
  • 4. 3Q11 HIGHLIGHTS Gross revenue of R$ 386.6 million in the quarter (+34.6%); Double-digit sales growth for all brands; EBITDA at R$ 88.8 million (+54.4%), with EBITDA margin up 3.2 p.p. to 27.7%; Net Profit at R$ 63.7 million (+63.0%). Hering Store Chain:  Goal revision: 418 Stores to 433 Stores by the end of 2011  Total sales of R$ 257.3 million in the quarter (+31.9%);  Same Store Sales growth at 9.0%;  Opening of 89 stores since 3Q10, 17 in the quarter;  Remodeling of 10 stores in the quarter. 4
  • 5. AGENDA Highlights 3Q11 Operating Performance Outlook
  • 6. SALES PERFORMANCEGross Revenue ( R$ million) Domestic Market ( R$ million) 386.6 34.6% 3Q10 3Q11 278.3 8.2 R$ 207.3 +32.7% R$ 275.0 10.0% 7.5 R$ 21.3 R$ 31.3 +46.8% 35.2% R$ 26.5 +25.7% R$ 33.3 378.4 279.8 R$ 18.3 +31.3% R$ 24.1 3Q10 3Q11 Domestic Market Foreign Market TotalIn the 3Q11, gross sales reached R$ 386.6 million (+34.6%), sales growthabove 25% in all brands. 6
  • 7. STORES CHAIN EVOLUTION + 17 stores ( + 17 Hering Stores) + 96 stores ( + 89 Hering Stores) 489 472 16 1 393 16 1 76 77 15 4 3 75 375 392 303 3Q10 2Q11 3Q11 Hering Store Hering Kids PUC dzarm. Foreign Franchise TotalIn the 3Q11 the Company reached 392 Hering Stores in the domesticmarket, a yoy increase of 89 stores. 7
  • 8. HERING STORE CHAIN PERFORMANCE Hering Store Chain Performance 3Q10 3Q11 Chg. Acc 3Q10 Acc 3Q11 Chg. Number of Stores 303 392 29.4% 303 392 29.4% Franchise 261 347 33.0% 261 347 33.0% Owned 42 45 7.1% 42 45 7.1% Sales (R$ thousand) (1) 195,094,144 257,320,961 31.9% 559,617,797 773,276,424 38.2% Franchise 158,531,932 216,537,088 36.6% 453,329,379 645,312,135 42.3% Owned 36,562,213 40,783,873 11.5% 106,288,418 127,964,289 20.4% Same Store Sales growth (2) 33.6% 9.0% -24.6 p.p 26.8% 15.6% -11.2 p.p Sales Area (m²) 38,763 51,812 33.7% 38,763 51,812 33.7% Sales (R$ per m²) 5,163 5,091 -1.4% 15,227 16,161 6.1% Check-Outs 2,196,420 2,626,868 19.6% 6,226,526 7,873,189 26.4% Units 4,925,048 5,610,529 13.9% 13,792,522 16,747,701 21.4% Units per Check-Out 2.24 2.14 -4.7% 2.22 2.13 -4.0% Average Sales Price (R$) 39.61 45.86 15.8% 40.57 46.17 13.8% Average Sales Ticket (R$) 88.82 97.96 10.3% 89.88 98.22 9.3% (1) The amounts referred to the sales to final costumers. (sell out concept) (2) Compared to the same period of the previous yearIn spite of the challenges faced in the 3Q11, SSS growth of 9.0%, below ourexpectations, mainly driven by the increase in average sales ticket. 8
  • 9. GROSS PROFIT AND EBITDAGross Profit and Gross Margin EBITDA and EBITDA Margin -0.2 p.p. 49.5% 49.3% 48.4% -0.3 p.p. 48.1% +3.2 p.p. 27.7% 24.4% 35.6% 54.4% 154.4 113.8 88.8 57.5 3Q10 3T10 3Q11 3T11 3Q10 3T10 3Q11 3T11 Gross Profit % Gross Margin % Cash Gross Margin EBITDA (R$ Million) % EBITDA Margin (R$ Million)The high operational leverage, strict expense management and reductionof raw material costs pressure led to a 320 bps EBITDA margin expansion. 9
  • 10. NET PROFIT AND CAPEX Net Profit (R$ million) Capex (R$ million) +3.2 p.p. 18.6 19.9% 16.6% 1.2 0.6 28.9% 1.9 13.2 1.7 63.0% 0.2 4.5 14.9 63.7 39.1 6.8 3T10 3Q10 3Q11 3T11 3T10 3Q10 3T11 3Q11 Net Profit (R$ Million) % Net Margin Industry IT Others Stores TotalExpressive net profit growth, due to improved operating performance, increasein financial revenue (AVP), and establishment of investment grants. 10
  • 11. CASH FLOWCash Flow - Consolidated (R$ thousand) 3Q10 3Q11 Chg. 9M10 9M11 Chg.EBITDA 57,499 88,800 31,301 173,604 260,656 87,052No cash items 777 603 -174 1,254 1,642 388Current Income tax and Social Contribution -13,070 -23,187 -10,117 -44,780 -65,026 -20,246Working Capital Capex -23,054 2,010 25,064 -5,606 -37,308 -31,702 Decrease (increase) in trade accounts receivable 6,267 34,599 28,332 -11,493 5,002 16,495 (Increase) in inventories -46,552 -26,047 20,505 -57,268 -46,412 10,856 Increase (decrease) in accounts payable to suppliers 21,181 -1,675 -22,856 48,101 2,670 -45,431 Increase in taxes payable 4,560 4,466 -94 17,038 16,027 -1,011 Others -8,510 -9,333 -823 -1,984 -14,595 -12,611CapEx -18,593 -13,224 5,369 -52,174 -28,895 23,279Free Cash Flow 3,559 55,002 51,443 72,298 131,069 58,771Reconciliation from accounting Cash flow to adjusted Cash flow (R$ thousand) 3Q10 3Q11 Chg. 9M10 9M11 Chg.DFC - Cash provided by operating activities 24,377 74,217 49,840 129,328 179,712 50,384Adjustment – Financial items allocated to operating cash -2,225 -5,991 -3,766 -4,856 -19,748 -14,892 Unrealized exchange and monetary variation -1,535 -1,164 371 -4,713 -3,713 1,000 Financial Result -1,994 -5,890 -3,896 -5,585 -19,503 -13,918 Interest paid on loans 1,304 1,063 -241 5,442 3,468 -1,974DFC - Cash flows from investing activities -18,593 -13,224 5,369 -52,174 -28,895 23,279Free Cash Flow 3,559 55,002 51,443 72,298 131,069 58,771Increase of R$ 51.4 million in free cash flow, mostly due to EBITDA growth, andlower investments and working capital needs. 11
  • 12. INDEBTEDNESSNet Debt ( R$ million) Short Term x Long Term 4.6 3.5 0.1 (0.2) (0.2) Short (0.7) (0.4) Term 62.1% Long 201.3 184.6 Term 37.9% 11.0 (33.4) (25.1) (61.9) (147.4) Gross Debt = R$ 41.5 million 2005 2006 2007 2008 2009 2010 3Q11 Net Debt/ EBITDA* * Last 12 months EBITDACia. Hering increased its net cash position by R$ 60.9 million in 3Q11 andreduced its debt by R$ 2.9 million, mainly due to cash generation. 12
  • 13. AGENDA Highlights 3Q11 Operating Performance Outlook
  • 14. OUTLOOK  Hering Brand still with high growth potential, although we belive recent historic performance posted a more expressive level:  Stores opening and SS growth in Hering Store chain.  Multibrand retail channel: continuous market share increase in existing clients.  Children’s market :  Continuity of Hering Kids and PUC brands repositioning.  Higher confidence in the possibility of the development of a Hering Kids store network - decision should be made in the near future.  Evaluation of PUC chain’s alignment to the brand’s new positioning - possible discontinuation of some operations.  Continuity of the dzarm. strategy, investing in the brand´s development and evaluating the possibility of opening more flagship stores.  Webstore relaunch, with new logistics and technology infraestructure.  Positive perspectives for 4Q11: reduction of raw material costs, high leverage, and operating expenses dilution, contributing to the expansion of EBITDA margins for the remainder of the year. 14
  • 15. INVESTOR RELATIONS TEAM Fabio Hering – CEO Frederico Oldani – CFO and IRO Patrícia Salem – IR Manager Tel. +55 (11) 3371-4867 E-mail: ri@hering.com.br Website: www.ciahering.com.br/ri