4 q12 arezzo_apresentacao_call eng
TRANSCRIPT
| Apresentação do Roadshow
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Conference Call 4Q12 and 2012
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.
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4Q12 and 2012 Highlights
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EBITDA totaled R$ 43.8 million, increasing of 32.1% and 17.3% margin over 4Q11. In 2012 EBITDA was R$ 135.8 million, growing 15.3% in relation to 2011, and EBITDA margin of 15.8%;
EBITDA
Gross revenue increased 27.9% in 4Q12, reaching R$ 327.1 million. Gross revenue in 2012 was R$ 1,108.7 million, increasing 28.5% over 2011;
Gross Revenue
Gross profit reached R$ 111.6 million, 39.0% growth and 44.2% margin in 4Q12. 2012 gross profit was R$ 375.8 million, growing 33.5% from 2011, with gross margin of 43.7%;
Gross Profit
Net Profit The 4Q12 net profit reached R$31.7 million, 17.7% increase and with 12.5% margin. 2012 net profit was R$ 96.9 million, increasing 5.7% on 2011, and net margin of 11.3%;
In 2012 Arezzo&Co expanded its network by 58 points of sale, of which 24 were Arezzo, 33 Schutz and 1 Alexandre Birman.
Expansion
Company Growth
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Gross Revenues – (R$ million)
239.7317.9
815.2
1,069.6
16.1 9.2
47.4
39.1
4Q11 4Q12 2011 2012
Domestic Market Exports Market
32.6%
-42.9%
27.9%
28.5%
31.2%
-17.5%
255.8
327.1
862.6
1,108.7
Arezzo&Co’s gross revenues increased 27.9% over 4Q11 to reach R$ 327.1 million in this quarter. The Company’s gross revenues amounted to R$1,108.7 million in 2012, a 28.5% growth when comparing with 2011.
Gross Revenue Breakdown by Channel – Domestic Market
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Gross Revenue by channel – Domestic Market (R$ million)
119.6 151.9
420.0 512.4
56.9 72.9
234.0
285.8
58.9 88.3
152.2
256.0
4.2 4.8
9.0
15.4
4Q11 4Q12 2011 2012
Franchise Multi-brand Owned Stores Others¹
27.0%
49.9%
815.2
32.6%
1,069.6
28.0%22.0%
68.1%
31.2%
22.1%239.7
317.9
Sales increased in all channels, particularly Owned Stores, with 49.9% in 4Q12 and 68.1% in 2012. Franchises also presented good performance: 46 stores and SSS of 12.2% in 2012. Multi-brands sales growth mainly due to focus in branding and increase in share of wallet.
1) Other: Growth of 13.4% in 4Q12 and of 71.6% in 2012..
SSS Sell-out (owned stores) 15,0%
2,2%SSS Sell-in (franchises)
0,6%
13,1%
11,4%
11,3%
6,3%
12,2%
Solid performance of all brands, specially for Schutz brand, which has grown gross revenues by 87.0% in 4Q12 and 65.2% in 2012, leveraged by the Schutz GTM Project that has strengthened franchise and owned store distribution
Gross Revenue Breakdown by Brand – Domestic Market
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Gross Revenues by brand – Domestic Market (R$ million)
1) Other: Alexandre Birman’s and Anacapri’s Gross Revenue: growth of 30.9% in 4Q12 and of 53.4% in 2012.
167.4 189.6
566.9 663.3
60.0 112.2
215.8
356.5
12.3 16.1
32.5
49.8
239.7
317.9
815.2 1,069.6
4Q11 4Q12 2011 2012
Arezzo Schutz Others¹
87.0%
13.3%
32.6%
31.2%
65.2%
17.0%
In 2012, the Company opened 58 stores (56 domestic and 2 international stores) and enlarged 19 stores, expanding total sales area by 21.6% compared to 2011.
Distribution Channel Expansion
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Owned Stores and Franchises Expansion
Note: area given in thousand square meter1) Includes 5 outlets with total area of 1,227 sq m2) Domestic Market
.
1,573Multi Brands ²
Owned Stores ¹ 19
Franchises 319
925
Franchises
Owned Stores ¹
23
28
2
8
Multi Brands ²
Owned Stores
793
Multi Brands ² 9
Owned Stores
242 267 296 342
21 29
45 57 14.9
17.6
21.8
26.5
4Q09 4Q10 4Q11 4Q12
Franchises Owned Stores Total sq m
+58341
399
263296 +45
+33
21.8%
17.7%
24.3%
Multi Brands ²
In 4Q12, gross margin expanded 3.9 p.p. EBITDA in 4Q12 totaled R$43.8 million, growth of 32.1% over 4Q11. EBITDA in 2012 increased 15.3% over 2011. If the non-recurring effect of 1Q12 were excluded, EBITDA in 2012 would have been up 22.1% over 2011.
Gross Profit and EBITDA
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Gross Profit (R$ million) EBITDA (R$ million)
Gross Profit Gross Margin
80.3 111.6
281.4
375.8
40.3%44.2%
41.5% 43.7%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
40,0%
45,0%
-
50,0
100,0
150,0
200,0
250,0
300,0
350,0
400,0
450,0
500,0
4Q11 4Q12 2011 2012
39.0%
33.5%
33.2 43.8
117.7
135.8 16.7%
17.3%
17.3%16.7%
0,0%
4,0%
12,0%
14,0%
16,0%
18,0%
-
20,0
40,0
60,0
80,0
100,0
120,0
140,0
160,0
180,0
4Q11 4Q12 2011 2012
EBITDA EBITDA Margin
32.1%
22.1%
143.8
8.0
Net income in 4Q12 was R$31.7 million and showed a 17.7% increase over 4Q11. Net income in 2012 reached R$96.9 million, 5.7% growth in the year. Without the non-recurring impact of 1Q12, net income for the year would have been R$102.2 million.
Net Income
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Net Income (R$ million)
Net Income Net Margin
26.9 31.7
91.6
96.9
13.5%12.5%
13.5%
11.9%
0,0%
2,0%
4,0%
6,0%
12,0%
14,0%
-10,0
10,0
30,0
50,0
70,0
90,0
110,0
130,0
150,0
4Q11 4Q12 2011 2012
17.7%
11.5% 102.2
5.3
Ajustes4T11
Income before income tax and social contribution 34,932 41,884 19.9% 125,452 133,504 6.4%
Depreciation and amortization 1,168 2,349 101.1% 4,058 7,558 86.2%
Other (2,532) (1,716) -32.2% (10,475) (8,395) -19.9%
Decrease (increase) in current assets / liabilities (19,102) (31,777) 66.4% (47,302) (41,325) -12.6%
Trade accounts receivables (19,700) (7,545) -61.7% (47,118) (29,316) -37.8%
Inventories 14,302 6,822 -52.3% (8,518) (19,206) 125.5%
Suppliers (12,765) (29,658) 132.3% 8,542 (1,779) n/a
Change in other current assets and liabilities (939) (1,396) 48.7% (208) 8,976 n/a 2909.756Change in other noncurrent assets and liabilities 1,971 (29) n/a (147) (2,412) 1540.8%
Payment of income tax and social contribution (13,845) (15,890) 14.8% (28,548) (37,708) 32.1%
Net cash flow generated by operational activities 2,592 (5,179) N/A 43,038 51,222 19.0%
20124Q12 Var. (%)Operating Cash Flow 4Q11 Var. (%) 2011
Cash Generation
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Arezzo&Co used R$5.2 million of operating cash in 4Q12, in line with the operation seasonality. In 2012, the Company generated R$51.2 million in operating cash flow, reflecting the solid performance in the year.
Operating Cash Generation (R$ thousand)
11.1 6.1
23.4
37.3
2.1 2.7
6.1
18.4
0.1 0.4
0.8
1.7
4Q11 4Q12 2011 2012
13.39.2
30.2
57.4
-31.1%
90.0%
In 2012, the Company invested R$ 57.4 million, of which R$ 37.3 million were invested in 15 new POS and 5 more store expansions in major locations, as well as the new headquarters in Campo Bom (RS).
Capital Expenditure (CAPEX) and Indebtedness
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CAPEX (R$ million) Indebtedness (R$ million)
1) Other: Increase of 455.8% in 4Q12 and of 108.7% in 2012 compared with the same period of the previous year.
Stores Corporate Others¹
Cash 173,550 175,605 202,154
Total debt 38,659 55,199 94,084
Short term 20,885 30,626 42,843
% total debt 54.0% 55.5% 45.5%
Long-term 17,774 24,573 51,241
% total debt 46.0% 44.5% 54.5%
Net debt (134,891) (120,406) (108,070)
Indebtedness 4Q11 3Q12 4Q12
57
342
2012
63
389
2013
# Owned Store
# Franchises
+13%
647
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2013 Opening Guidance
The 2013 expansion pipeline is committed to opening 53 new stores with a 15% growth in total sales area, leveraged by openings and expansion of existing stores.
2012 2013
399¹
1) Include 9 international stores.
452
