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
Gross revenue reached R$379 million in the 3Q14, an increase of 12.2% against 3Q13.
Gross
Revenue
In 3Q14, gross profit was R$124.9 million, a growth of 7.6% over 3Q13.
Gross Profit
EBITDA for 3Q14 amounted to R$51.4 million, a growth of 10% in relation to 3Q13, with a margin of 17.4%.
EBITDA
In this quarter, Arezzo&Co opened 11 stores and expanded two stores, with a growth of 13.3% in sales area over the last 12 months.
Sales Area Expansion
In 3Q14, net income increased by 14.3% over 3Q13 to R$33.6 million, with a net margin of 11.3%.
Net Profit
3Q14 Highlights
4. 319.6
354.5
855.0
931.6
18.2
24.5
45.7
50.8
337.8
379.0
900.7
982.4
3Q13
3Q14
9M13
9M14
Domestic Market
External Market
4
Gross revenue reached R$379.0 million in the 3Q14, an increase of 12.2% in comparison to 3Q13.
Company Growth
Gross Revenues – Domestic and Export Market (R$ million)
10.9%
34.5%
12.2%
9.0%
9.1%
11.0%
5. 201.7
210.6
523.9
550.2
106.5
119.3
296.1
324.7
9.7
22.5
26.7
50.8
1.6
2.1
8.2
5.9
319.6
354.5
855.0
931.6
3Q13
3Q14
9M13
9M14
Arezzo
Schutz
Anacapri
Others¹
5
Growth of 10.9% from the domestic market gross revenues in 3Q14, with the main brands posting positive results. Special mention to the growth of 130.8% for the Anacapri brand, leveraged by the opening of 32 franchises in the last twelve months.
1)Others: Increase of 27.8% in the 3Q14 and a reduction of 28.1% in the 9M14.
Gross Revenues by brand – Domestic Market (R$ million)
Gross Revenue Breakdown by Brand – Domestic Market
4.4%
130.8%
10.9%
5.0%
89.9%
9.0%
9.7%
12.0%
6. 167.6
180.9
419.0
477.9
68.4
75.4
199.6
214.3
82.8
96.8
230.4
236.1
0.8
1.3
6.0
3.3
319.6
354.5
855.0
931.6
3Q13
3Q14
9M13
9M14
Franchise
Owned Stores
Multi-brand
Others¹
In 3Q14, all the channels increased sales, with particular reference to the 16.9% growth in the Multibrand channel, reinstating its growth. The SSS sell-out indicator reached 10.4% in this quarter.
Gross Revenue Breakdown by Channel – Domestic Market
6
SSS Sell-out (owned stores + franchises)
SSS Sell-in (franchises)
1) Others: Increasing of 61.4% in 3Q14 and decreasing of 44.3% in 9M14.
Gross Revenues by channel – Domestic Market (R$ million)
SSS Sell-out (owned stores + web + franchises)
-5.1%
0.6%
8,0%
-0,4%
-4.1%
10.4%
0,5%
4,3%
1,8%
6,1%
2,7%
7,5%
8.0%
10.3%
10.9%
16.9%
14.1%
7.3%
2.5%
9.0%
7. 282
324
373
427
36
53
56
52
19.7
24.5
29.0
32.9
3Q11
3Q12
3Q13
3Q14
Franchises
Owned Stores
Area
The sales area increased 13.3% in the 3Q14 due to the opening of 50 stores and expansion of 14 stores in the last 12 months.
Distribution Channel Expansion
7
Owned Stores and Franchises Expansion
1) Includes 6 outlets with total area of 2,217 sqm
The numbers of Multi Brand stores refers to the domestic market
18.2%
13.3%
24.3%
+59
+52
+50
Franchises
Multi Brands
Owned Stores
43
27
1,348
Multi Brands
Owned Stores
2
7
Franchises
34
Multi Brands
Owned Stores
6
982
Franchises
Multi Brands
Owned Stores
350
17
1,057
318
377
429
479
1
8. 46.8
51.4
115.9
121.0
3Q13
3Q14
9M13
9M14
116.1
124.9
311.6
329.9
3Q13
3Q14
9M13
9M14
In 3Q14, gross profit reached R$124.9 million, an increase of 7.6%, with gross margin of 42.2%. EBITDA in the quarter amounted to R$51.4 million, with a margin of 17.4%.
Gross Profit and EBITDA
8
Gross Profit (R$ million)
EBITDA (R$ million)
Gross profit
Gross Margin
EBITDA
EBITDA Margin
7.6%
43.5%
42.2%
5.9%
44.2%
43.2%
10.0%
17.5%
17.4%
16.4%
15.9%
4.4%
9. 29.4
33.6
77.8
82.7
3Q13
3Q14
9M13
9M14
In 3Q14, net income increased by 14.3% over 3Q13 to R$33.6 million, with a net margin of 11.3%.
Net Income and Net Margin
9
Net Income (R$ million)
Net Margin
Net Income
14.3%
11.0%
11.3%
6.2%
11.0%
10.8%
10. Operating Cash Flow
10
Arezzo&Co generated R$33.9 million in operating cash in 3Q14, primarily due to higher operating profit related to a better working capital management.
Operating Cash Flow (R$ thousand) 3Q133Q14 Change in R$ Change in % 9M139M14 Change in R$ Change in % 45,630 51,815 6,185 13.6%112,480 121,845 9,365 8.3%27,9282,807 3,293 486 17.3%7,777 9,599 1,822 23.4%-9,599(4,028) 1,249 5,277 n/a(4,314) (181) 4,133 -95.8%9,621(27,875) (9,957) 17,918 -64.3%(39,160) (21,610) 17,550 -44.8%14,717(41,250) (45,337) (4,087) 9.9%(32,153) (33,645) (1,492) 4.6%5,292(9,595) 4,666 14,261 n/a(23,785) (31,269) (7,484) 31.5%-11,12122,559 28,843 6,284 27.9%30,608 51,113 20,505 67.0%30,963411 1,871 1,460 355.2%(13,830) (7,809) 6,021 -43.5%-10,418(5,907) (12,538) (6,631) 112.3%(23,505) (33,080) (9,575) 40.7%-9,33710,627 33,862 23,235 218.6%53,278 76,573 23,295 43.7%33,329Operating Cash FlowIncome before income tax and social contributionDepreciation and amortizationChange in other noncurrent and current assets and liabilitiesPayment of income tax and social contributionNet cash flow generated by operational activitiesOtherDecrease (increase) in current assets / liabilitiesTrade accounts receivables InventoriesSuppliers
11. 3.6
1.3
10.2
7.1
6.2
8.9
18.2
25.0
0.7
2.1
2.3
4.4
10.5
12.3
30.7
36.5
3Q13
3Q14
9M13
9M14
Stores
Corporate
Others¹
In 3Q14, the Company invested R$12.3 million, mainly due to corporate investments in infrastructure technology. Indebtedness policy remained conservative.
Capital Expenditure (CAPEX) and Indebtedness
11
CAPEX (R$ million)
Indebtedness (R$ million)
1) Others: increasing 215.4% in 3Q14 and 94.0% in 9M14.
-62.8%
43.2%
17.5%
-30.5%
37.3%
19.1% 3Q132Q143Q14Cash199.780 159.196 175.856 Total debt109.042 80.853 86.473 Short term66.930 49.753 61.249 % total debt61,4%61,5%70,8% Long-term42.112 31.100 25.224 % total debt38,6%38,5%29,2% Net debt(90.738) (78.343) (89.383) EBITDA LTM159.675 159.916 164.586 Net debt/EBITDA LTM-0,6x -0,5x -0,5x Cash position and Indebtedness
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
Leandro Vieira
IR Analyst
