Q2'24
RESULTS
QUARTERLY HIGHLIGHTS
Q2'24 Highlights: Free cash flow of R$92 MM with sequential improvement in operating margins
CASH
FLOW
Free cash flow
Positive by R$ 92 MM
Working capital discipline with
82 days of inventory
(reduction of 15 days y/y)
Inventory quality
92% in up to 90 days
Taxes
+R$ 357 MM net impact on cash
MARGIN
IMPROVEMENT
Gradual improvement
Gross margin
30.7% in Q2'24
(+0,7 p.p. q/q and +1,5 p.p. y/y)
Expense reduction
-9.1% y/y
EBITDA margin
7.0% in Q2'24
(+0.9 p.p. q/q and +0.7 p.p. y/y)
CAPITAL
STRUCTURE
Conclusion of
new debt profile
by R$ 4.1 Bn
Adherence by all creditors
Increased average term
from 22 months to 72 months
Reduced average cost
(-1.5 p.p.)
Cash preservation of
R$ 4.3 Bn until 2027
3
Omnichannel Specialist Positioning
GMV reflecting the Plan adjustments with focus on profitability and potential future operating leverage
GMV reflects the
adjustments of the TransformationGMV Plan
(focused onR$profitability)Bi
Reduction of
margin
detractors
Increased sustainable profitability Potential
for operational
leverage
B&M STORES | 1P ONLINE | 3P | |||||||||||
GMV - Bn | GMV - Bn | GMV - Bn | |||||||||||
-1.7% | -34.3% | +0.7% | |||||||||||
6.0 | 5.9 | 3.5 | 2.3 | 1.5 | 1.5 | ||||||||
Q2'23 | Q2'24 | Q2'23 | Q2'24 | Q2'23 | Q2'24 | ||||||||
Stores Portfolio | B2B Share in GMV 1P Online | Take Rate | |||||||||||
Closing of Stores Operating at Loss | Reduced incentives in B2B Online | Reduced Incentives |
-54 | -11p.p. | +0.2p.p. | ||||
Stores | ||||||
1,127 | 35% | |||||
1,073 | Discontinuity of | 24% | 12.4% | 12.6% | ||
23 categories | ||||||
from 1P (on/off) |
Q2'23 | Q2'24 | to 3P | Q2'23 | Q2'24 | Q2'23 | Q2'24 | |||||||
Contribution | Contribution | Revenue | |||||||||||
margin | Margin | ||||||||||||
+0,3p.p. | +0,8p.p. | +2.0% | |||||||||||
Q2'23 | Q2'24 | Q2'23 | Q2'24 | Q2'23 | Q2'24 | 4 | |||||||
B&M Stores
SSS1 stable even with reduced categories in B&M stores, with improved profitability indicators
GMV in the Q2 remained stable, considering SSS1, despite
discontinuation of categories in B&M stores...
...Besides the relevant improvement of operational indicators
-0.1% sales same stores in Q2'24
-23 categories discontinued in 1P
19% increased salespeople productivity versus Q2'23
54% of stores improved margin, and in
12% of the stores, growth exceeded 5 p.p.
+16% growth in the contribution margin generated in the channel
1) SSS = "Same Store Sales" | 5 |
Logistics
Growth in logistics services with reduction in delivery time
Fulfillment | ||||||
Multimarketplace | ||||||
# Clients | Revenue | |||||
New | +19% | +30% | ||||
sources | ||||||
of | ||||||
revenue | ||||||
Q2'23 | Q2'24 | |||||
Q2'23 | Q2'24 | |||||
Transportation
(to non-seller third parties)
# Clients | Orders | |||
+19% | +13% | |||
Q2'23 | Q2'24 | Q2'23 | Q2'24 |
Reduction in delivery time
Marketplace | Marketplace | Fulfillment | 1P Grupo Casas Bahia | ||||||||
Deliveries notmanaged by | Deliveries managedby | Online and Offline | |||||||||
Grupo Casas Bahia | |||||||||||
Grupo Casas Bahia | Grupo Casas Bahia | ||||||||||
Continued | |||||||||||
reduction | -43% | -19% | -5% | -14% | |||||||
of | |||||||||||
delivery | |||||||||||
time | |||||||||||
Q2'23 | Q2'24 | Q2'23 | Q2'24 | Q2'23 | Q2'24 | Q2'23 | Q2'24 |
6
Installment Plan: portfolio growth with defaults under control
Strong brand, with a good history of default and a large addressable market in 91% of municipalities
Active Portfolio Evolution
(R$ billion)
5.6 | 5.7 | 5.5 | 5.4 | 5.3 | 5.3 | 5.4 | 5.3 | 5,5 |
8.5% | 8.4% | 9.5% | 9.0% | 9.1% | 9.3% | 9.4% | 9.0% | 8,5% |
Q2'22 | Q3'22 | Q4'22 | Q1'23 | Q2'23 | Q3'23 | Q4'23 | Q1'24 | Q2'24 |
Active Portfolio* | Over-90 Rate | * Active Portfolio = Customers overdue for up to 180 days | ||||||
Quarterly Net Loss | HEALTHY | ||||||
(R$ million) | DEFAULT | ||||||
328 | INDICATORS | ||||||
256 | 252 | 241 | 261 | 249 | 239 | 263 | |
5.8% | 4.6% | 4.5% | 199 | ||||
4.7% | 4.9% | 4.7% | 4.5% | 4,8% | |||
3.7% |
ADA (Allowance for Doubtful Accounts)
(R$ million) | ||||||||
624 | 658 | 627 | 611 | 601 | 601 | |||
595 | 587 | 586 | ||||||
11.3% 11.7% 11.4% 11.3% 11.4% 11.4% 11.2% 11.0% 10,6%
Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24
ADA Balance | ADA Balance / Active Portfolio |
Installment Plan Penetration
(% in Brazil's Municipalities)
76% | 78% | 79% | 81% | 84% | 84% | 90% | 90% | 91% |
Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 | Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 |
Net loss considers late payment of more than 180 days | Q1'24 Includes R$ 54 MM of portfolio sale | 7 |
TRANSFORMATION PLAN
STATUS
REVIEW OF THE 1st YEAR OF THE TRANSFORMATION PLAN
> Levers presented in the Plan in Q2'23 | What was delivered until Q2'24 |
Revenue
Variable
Costs
Fixed
Costs
Services Efficiency
Pricing & Promotion
Sales Channels
Mix &
Assortment Review
Marketing Efficiency
Commercial Efficiency
Renegotiation of indirects
Staff Review
IT costs
Footprint and Store
Profitability
Freight & DCs optimization
- Increase penetration and profitability of installment plan and additional services
- Re-allocationof investments across channels and categories to maximize margin
- GeoFast launch for greater efficacy and lower costs in traditional media
- Renegotiation of indirects
- Corp./store overhead review, pursuing great efficient levels
- Footprint review by shutting down 50-100 stores with poor margins; rental costs review, amongst others
- DC productivity improvement, and rented footprint adjustment, in line with inventory shrinkage
- Greater service penetration (+3 p.p. y/y to 16%)
- Record penetration of online installment plan (7.9% of online 1P)
- +10% increase in 12-month 3P revenue (+8% in 6 months)
- Review of B2B and Marketplace operations for greater profitability
- 23 categories fully migrated to 3P
- -8.5%reduction in third-party service expenses (6 months), with control tower implementation
- +10 k positions reduced until Q2'24
- 60 stores closed since 2023 and Store Recovery Plan
- Mg. improvement in 54% of stores, 12% with an increase above 5 p.p. other stores remained stable
- -7%reduction in leasing expenses over 12 months, even with an increase of +2.5% in the IGP-M accumulated over 12 months
• | 9 DCs readjusted, including 4 closures | 9 |
REVIEW OF THE 1st YEAR OF THE TRANSFORMATION PLAN
Cost of
Capital
-------------
- Levers presented in the Plan in Q2'23
Assortment Migration to 3P | • Migration of categories to 3P |
- Inventory reduction with sales actions (R$ 1 Bn and <90 days)
What was delivered until Q2'24
• | 23 categories fully migrated from 1P to 3P |
• | Reduction of R$1.4 Bn in inventory y/y in Q2'24 |
• | 82 days of term (reduction of 15 days y/y) |
• | Inventory quality: 92% in up to 90 days (+ 15 p.p. y/y) |
Cash
Flow
Capital
Structure
Inventory reduction
Payment policy review
Installment Plan
Financing
Liability Management
Asset monetization
- Review of store assortment
- Review of purchasing plan
- Changes in Financing Model of the Installment Plan
- Financing Diversification
- Ongoing process of enhancing debt profile
-
~R$ 4 Bi Potential in 2023
(R$2 Bn in gross monetization, R$1 billion in inventory and other assets)
• | Reduction of -9% in losses over 12 months (-13% over 6 months) |
• | 64% improvement in free cash flow over 12 months |
(+73% over 6 months) | |
• | Best Free Cash Flow in the first half of the year in the last five years |
• | FIDC operational preparation: banking correspondent in 100% of |
stores, digital biometrics, CCB contract and systems integration |
•X FIDC fundraising
- Follow On for R$623 MM raise in Sep/23
- Debt Re-profiling conclusion of R$ 4,1 Bn
- Reduction of R$ 1.4 Bn in inventory y/y in Q2'24
-
Monetization of R$1.7 Bn in tax assets (net impact over 12 months)
10