4 q12 arezzo_apresentacao_call eng

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  • 1. | Apresentao do Roadshow1Conference Call4Q12 and 2012

2. Important DisclaimerInformation contained in this document may include forward-looking statements and reflect Managements current viewand estimates of the evolution of the macroeconomic environment, industry conditions, Companys performance andfinancial results. Any statements, expectations, capabilities, plans and assumptions contained in this document, which donot 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 thefinancial condition, liquidity or results of operations, are forward-looking statements, as set forth in the U.S. PrivateSecurities Litigation Reform Act of 1995, and involve several risks and uncertainties. There is no guarantee that theseresults will occur. Forward-looking statements are based on several factors and expectations, including economic andmarket conditions, industry competitiveness and operational factors. Any changes in such expectations and factors maycause actual results to differ from current expectations.The Companys consolidated financial statements presented herein are in accordance with the International FinancialReporting Standards - IFRS, issued by the International Accounting Standards Board - IASB, based on the auditedfinancial statements. Non-financial information and other operating information have not been subject to an audit byindependent auditors.2 3. 4Q12 and 2012 Highlights3EBITDA totaled R$ 43.8 million, increasing of 32.1% and 17.3% margin over 4Q11. In 2012EBITDA was R$ 135.8 million, growing 15.3% in relation to 2011, and EBITDA margin of 15.8%;EBITDAGross revenue increased 27.9% in 4Q12, reaching R$ 327.1 million.Gross revenue in 2012was R$ 1,108.7 million, increasing 28.5% over 2011;GrossRevenueGross profit reached R$ 111.6 million, 39.0% growth and 44.2% margin in 4Q12. 2012 grossprofit was R$ 375.8 million, growing 33.5% from 2011, with gross margin of 43.7%;Gross ProfitNet Profit The 4Q12 net profit reached R$31.7 million, 17.7% increase and with 12.5% margin. 2012net profit was R$ 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, 33Schutz and 1 Alexandre Birman.Expansion 4. Company Growth4Gross Revenues (R$ million)239.7317.9815.21,069.616.19.247.439.14Q11 4Q12 2011 2012Domestic Market Exports Market32.6%-42.9%27.9%28.5%31.2%-42.9%255.8327.1862.61,108.7Arezzo&Cos gross revenues increased 27.9% over 4Q11 to reach R$ 327.1 million in this quarter.The Companys gross revenues amounted to R$1,108.7 million in 2012, a 28.5% growth whencomparing with 2011. 5. Gross Revenue Breakdown by Channel Domestic Market5Gross Revenue by channel Domestic Market (R$ million)119.6 151.9420.0512.456.972.9234.0285.858.988.3152.2256.04.24.89.015.44Q11 4Q12 2011 2012Franchise Multi-brand Owned Stores Others27.0%49.9%862.627.9%1,069.628.0%22.0%68.1%31.2%22.1%239.7317.9Sales 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-brandssales 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% 6. Solid performance of all brands, specially for Schutz brand, which has grown gross revenues by87.0% in 4Q12 and 65.2% in 2012, leveraged by the Schutz GTM Project that has strengthenedfranchise and owned store distributionGross Revenue Breakdown by Brand Domestic Market6Gross Revenues by brand Domestic Market (R$ million)1) Other: Alexandre Birmans and Anacapris Gross Revenue: growth of 30.9% in 4Q12 and of 53.4% in 2012.167.4 189.6566.9663.360.0112.2215.8356.512.316.132.549.8239.7317.9815.21,069.64Q11 4Q12 2011 2012Arezzo Schutz Others87.0%13.3%32.6%31.2%65.2%17.0% 7. In 2012, the Company opened 58 stores (56 domestic and 2 international stores) and enlarged 19stores, expanding total sales area by 21.6% compared to 2011.Distribution Channel Expansion7Owned Stores and Franchises ExpansionNote: area given in thousand square meter1) Includes 5 outlets with total area of 1,227 sq m2) Domestic Market.1,573Multi Brands Owned Stores 19Franchises 319925FranchisesOwned Stores 232828Multi Brands Owned Stores793Multi Brands 9Owned Stores242 267 2963422129455714.917.621.826.64Q09 4Q10 4Q11 4Q12Franchises Owned Stores Total sq m+58341399263296 +45+3321.8%17.7%24.3%Multi Brands 8. In 4Q12, gross margin expanded 3.9 p.p. EBITDA in 4Q12 totaled R$43.8 million, growth of 32.1%over 4Q11. EBITDA in 2012 increased 15.3% over 2011. If the non-recurring effect of 1Q12 wereexcluded, EBITDA in 2012 would have been up 22.1% over 2011.Gross Profit and EBITDA8Gross Profit (R$ million) EBITDA (R$ million)Gross Profit Gross Margin80.3111.6281.4375.840.3%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%-50,0100,0150,0200,0250,0300,0350,0400,0450,0500,04Q11 4Q12 2011 201239.0%33.5%33.243.8117.7135.816.7%17.3%17.3%16.7%0,0%4,0%12,0%14,0%16,0%18,0%-20,040,060,080,0100,0120,0140,0160,0180,04Q11 4Q12 2011 2012EBITDA EBITDA Margin32.1%22.1%143.88.0 9. Net income in 4Q12 was R$31.7 million and showed a 17.7% increase over 4Q11. Net income in2012 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$102.2 million.Net Income9Net Income (R$ million)Net Income Net Margin26.931.791.696.913.5%12.5%13.5%11.9%0,0%2,0%4,0%6,0%12,0%14,0%-10,010,030,050,070,090,0110,0130,0150,04Q11 4Q12 2011 201217.7%11.5% 102.25.3 10. Ajustes4T11Income 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/aChange in other current assets and liabilities (939) (1,396) 48.7% (208) 8,976 n/a 2909.756Change in other noncurrent assetsand liabilities 1,971 (29) n/a (147) (2,412) 1540.8%Payment ofincome 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. (%) 2011Cash Generation10Arezzo&Co used R$5.2 million of operating cash in 4Q12, in line with the operation seasonality. In2012, the Company generated R$51.2 million in operating cash flow, reflecting the solid performancein the year.Operating Cash Generation (R$ thousand) 11. 11.16.123.437.32.12.76.118.40.10.40.81.74Q11 4Q12 2011 201213.39.230.257.4-31.1%90.0%In 2012, the Company invested R$ 57.4 million, of which R$ 37.3 million were invested in 15 newPOS and 5 more store expansions in major locations, as well as the new headquarters in CampoBom (RS).Capital Expenditure (CAPEX) andIndebtedness11CAPEX (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 OthersCash 173,550 175,605 202,154Total debt 38,659 55,199 94,084Short 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 12. 573422012633892013# Owned Store# Franchises+13%647122013 Opening GuidanceThe 2013 expansion pipeline is committed to opening 53 new stores with a 15% growth in totalsales area, leveraged by openings and expansion of existing stores.2012 20133991) Include 9 international stores.452 13. 13ContactsThiago BorgesDaniel MaiaPhone: +55 11 2132-4300ri@arezzoco.com.brwww.arezzoco.com.brCFO and IR OfficerIR Manager