4Q13 Arezzo

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4Q13 Arezzo

  1. 1. | Apresentação do Roadshow 1 Conference Call 4Q13 and 2013
  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 In 2013, net revenue reached R$963.0 million, an increase of 11.9%. In the quarter, net revenue reached R$257.6 million, growing 1.9% in the same period. Net Revenue Gross margin was 44.2% in 2013, an expansion of 50 bps over 2012. In the 4Q13, gross profit was R$114.2 million with margin in line with last year . Gross Profit EBITDA totaled R$159.5 million, a recurring increase of 10.9% compared to 2012. EBITDA for 4Q13 amounted R$43.6 million. EBITDA Arezzo&Co achieved its commitment to open 59 stores in 2013, growth of 20.0% in sales area. Sales Area Expansion 2013 net profit reached R$110.6, growing 14.1% when compared with 2012. In the quarter, net profit totaled R$32.7 million, an increase of 3.4%. Net Profit 4Q13 and 2013 Highlights
  4. 4. 317.9 315.4 1,069.6 1,170.4 9.2 15.9 39.1 61.7 327.1 331.4 1,108.7 1,232.1 4Q12 4Q13 2012 2013 Domestic Market External Market 4 Gross Revenues – (R$ million) The Company’s gross revenues amounted R$1.2 billion in 2013, 11.1% growth when comparing with 2012. In the quarter, gross revenues reached R$331.4 million, an increase of 1.3% over the same period of last year. -0.8% 73.0% 1.3% 11.1% 9.4% 57.6% Company Growth
  5. 5. 151.9 164.1 512.4 583.1 88.3 91.7 256.0 291.4 72.9 58.2 285.8 288.6 4.8 1.4 15.4 7.4 4Q12 4Q13 2012 2013 Franchise Owned Stores Multi-brand Others² In 2013, monobrand channel (Franchises and Owned Stores) increased 13.8%. The SSS Sell Out growth 2.5% in the 4Q13. Gross Revenue Breakdown by Channel – Domestic Market 5 SSS Sell-out (owned stores + franchises) 2.5% -3.7%SSS Sell-in (franchises) 1.1% 2.0% 1) Other : Decreasing 70.7% in 4Q13 and 52.2% in 2013. n/a 12.2% n/a 13.1% Gross Revenue by channel – Domestic Market (R$ million) 317.9 315.4 1,069.6 1,170.4 -20.2% 8.0% -0.8% 3.9% 9.4% 1.0% 13.8% 13.8%
  6. 6. 189.6 192.7 663.3 716.6 112.2 106.4 356.5 402.5 10.5 14.0 32.2 41.3 317.9 315.4 1,069.6 1,170.4 4Q12 4Q13 2012 2013 Arezzo Schutz Anacapri Others¹ Gross Revenue Breakdown by Brand – Domestic Market 61) Other brands: Decreasing 58.5% in 4Q13 and 43.4% in 2013. All the brands presented positive growth in 2013. Highlight was Anacapri brand, leveraged by 15 franchise openings since its roll out started. Gross Revenues by brand – Domestic Market (R$ million) 1.6% 34.0% -5.2% 8.0% 28.3% 9.4% 12.9% -0.8%
  7. 7. 274 296 342 403 29 45 57 5518.0 21.8 26.5 31.8 2010 2011 2012 2013 Franchises Owned Stores Total sq m Sales area expanded 20.0% in 2013, due to 59 stores openings and enlargement of other 4 stores over 2012. Excluding outlets, sales area would have grown 17.0%. Distribution Channel Expansion 7 1,476Multi Brands ² Multi Brands ² Owned Stores ¹ 17 Franchises 348 1,046 Franchises Owned Stores ¹ 40 28 2 8 Multi Brands ² Owned Stores 936 Multi Brands ² 9 Owned Stores 15Franchises Owned Stores and Franchises Expansion +59 +58 +38 20.0% 21.1% 21.6% 303 341 399 458 Note: area given in thousand square meter 1) Includes 6 outlets with total area of 2,217 sqm 2) Domestic Market
  8. 8. 43.8 43.6 135.8 8.0 143.8 159.5 4Q12 4Q13 2012 2013 111.6 114.2 375.8 425.7 4Q12 4Q13 2012 2013 In 2013, gross margin reached 44.2%, an expansion of 50 bps. EBITDA amounted R$159.5 million, a recurring increasing of 10.9% against 2012, with a practically in line EBITDA margin. Gross Profit and EBITDA 8 -0.5% 17.3% 16.9% 16.7% 16.6% 2.2% 13.3% 44.2% 44.3% 43.7% 44.2% Gross Profit (R$ million) EBITDA (R$ million) 10.9% 17.5%
  9. 9. 96.9 5.3 102.2 110.6 4Q12 4Q13 2012 2013 The Company’s net income totaled R$110.6 million in 2013, with 11.5% net margin. In 4Q13, net income increased 3.4%, with a margin of 12.7%. Net Income 9 8.2% 3.4% 12.5% 12.7% 11.9% 11.5% Net Income (R$ million) 14.1% 31.7 32.7
  10. 10. Cash Flow 10 Arezzo&Co generated R$71.7 million of net cash flow in 2013, due to a higher operating profit. Operating Cash Flow (R$ thousand) Income before income tax and social contribution 41,884 43,637 4.2% 133,504 156,117 16.9% Depreciation and amortization 2,349 3,193 35.9% 7,558 10,970 45.1% Other (1,716) 8,250 n/a (8,395) 8,304 n/a Decrease (increase) in assets / liabilities (31,806) (18,192) -42.8% (43,737) (57,351) 31.1% Trade accounts receivables (7,545) (6,273) -16.9% (29,316) (38,426) 31.1% Inventories 6,822 14,472 112.1% (19,206) (9,313) -51.5% Suppliers (29,658) (31,256) 5.4% (1,779) (648) -63.6% Change in other noncurrent and current assets and liabilities(1,425) 4,865 n/a 6,564 (8,964) n/a Payment of income tax and social contribution (15,890) (22,801) 43.5% (37,708) (46,306) 22.8% Net cash flow generated by operational activities (5,179) 14,087 n/a 51,222 71,734 40.0% 4Q13 Growth %Operating Cash Flow 4Q12 Growth % 2012 2013
  11. 11. 6.1 5.6 37.3 15.82.7 7.0 18.4 25.2 0.4 0.5 1,7 2.7 9.2 13.1 57.4 43.8 4Q12 4Q13 2012 2013 Stores Corporate Others¹ In 2013, the Company invested R$43.8 million, of which R$15.8 million were to openings and refurbishment stores and R$25.2 million in Corporate investments. Total indebtedness reached R$98.4 million. Capital Expenditure (CAPEX) and Indebtedness 11 CAPEX (R$ million) Indebtedness (R$ million) -7.4% 161.7% -23.8% -57.8% 37.1% 42.8% 1) Other: growth of 5.8% in 4Q13 and 63.3% in 2013. Cash position and Indebtedness 4Q12 3Q13 4Q13 Cash 202,154 199,780 185,691 Total debt 94,084 109,042 98,418 Short term 42,843 66,930 59,835 % total debt 45.5% 61.4% 60.8% Long-term 51,241 42,112 38,583 % total debt 54.5% 38.6% 39.2% Net debt (108,070) (90,738) (87,273) EBITDA LTM 135.763 159.675 159.460 Net Debt /EBITDA LTM -1.0x -0.6x -0.5x
  12. 12. Contacts Thiago Borges Leonardo Pontes dos Reis, 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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