apresentação 1 q12
TRANSCRIPT
1Q12 Results
Conference Call April 26, 2012
DISCLAIMER
This presentation contains forward-looking statements regarding the prospects of
the business, estimates for operating and financial results, and those regarding
Cia. Hering's growth prospects. These are merely projections and, as such, are
based exclusively on the expectations of Cia. Hering management concerning the
future of the business and its continued access to capital to fund the Company’s
business Plan. Such forward-looking statements depend, substantially, on changes
in market conditions, government regulations, competitive pressures, the
performance of the Brazilian economy and the industry, among other factors and
risks disclosed in Cia. Hering’s filed disclosure documents and are, therefore,
subject to change without prior notice.
AGENDA
Highlights
1Q12 Operating
Performance
Outlook
4
1Q12 HIGHLIGHTS
Gross revenue up 15.7%;
Double-digit sales growth for Hering, Hering Kids and PUC brands; with highlight to the
performance of Hering Kids (+32.9%;)
EBITDA of R$ 90.0 million, with EBITDA margin of 27.5%;
Net Profit of R$ 70.2 million (+37.6%).
Hering Store Chain:
87 store openings since 1Q11, with a network of 437 stores by the end of 1Q12
Total sales of R$ 244.2 million (+20.5% overall growth and 4.0% SSS growth);
AGENDA
Highlights
1Q12 Operating
Performance
Outlook
6
SALES PERFORMANCE
Total
Domestic Market (R$ million)
R$ 254.6
R$ 26.9
R$ 20.7
R$ 290.9
R$ 31.1
R$ 22.0
+14.3%
R$ 24.2 R$ 32.2 +32.9%
+15.5%
+5.9%
1Q11 1Q12
Gross Revenue (R$ million)
1Q11 1Q12
334.4 386.2
4.1 5.5
Domestic Market Foreign Market
Gross Sales reached R$ 391.7 million in 1Q12 (+15.7%) and Hering, Hering
Kids and PUC brands posted double digit sales growth.
15.5%
35.1%
15.7% 338.5
391.5
7
STORES CHAIN EVOLUTION
In the domestic market, the Company ended 1Q12 with 437 Hering Stores, 76 PUC, 5
Hering Kids and 1 dzarm. store.
Total
1Q11 1Q12
350
437
2
5
78
76
1
1
15
16 446
535
Hering Store Hering Kids PUC dzarm. Foreign - Franchised
8
HERING STORE CHAIN PERFORMANCE
Hering Store Chain Performance 1Q11 1Q12 Chg.
Number of Stores 350 437 24.9%
Franchise 307 390 27.0%
Owned 43 47 9.3%
Sales (R$ thousand) (1) 202,569 244,152 20.5%
Franchise 166,019 205,145 23.6%
Owned 36,550 39,007 6.7%
Same Store Sales growth (2) 23.4% 4.0% -19.3 p.p
Sales Area (m²) 45,439 58,506 28.8%
Sales (R$ per m²) 4,495 4,216 -6.2%
Check-Outs 2,417,260 2,773,204 14.7%
Units 5,237,956 6,031,427 15.1%
Units per Check-Out 2.17 2.17 0.4%
Average Sales Price (R$) 38.67 40.48 4.7%
Average Sales Ticket (R$) 83.80 88.04 5.1%(1) The amounts referred to the sales to final costumers. (sell out concept)(2) Compared to the same period of the previous year
SSS growth continued decelerating to 4.0% in 1Q12 due to slowdown in the market,
1Q11 strong comparison basis, and less favorable climate, with warmer days in the
month of march versus the previous year.
9
GROSS PROFIT AND EBITDA
In spite of no longer suffering from raw material price pressures, the higher level
of discount granted in own stores let to stable gross margin.
Gross Profit and Gross Margin EBITDA and EBITDA Margin
46.7% 46.5%
47.8%
-0.2 p.p.
0.0 p.p.
17.2%
26.8% 27.5% +0.8 p.p.
21.1%
% Cash Gross Margin % Gross Margin Gross Profit (R$ million) % EBITDA Margin EBITDA (R$ million)
47.8%
1Q11 1Q12
129.6 151.9
1Q11 1Q12
74.3 90.0
10
NET PROFIT AND CAPEX
Net Profit (R$ million)
Net profit growth due to better operating performance, adjustment to present value,
increase in financial income, and constitution of grants for investment.
1Q11 1Q12
51.0
70.2
% Net Margin Net Income (R$ million)
Capex (R$ million)
37.6%
18.4%
21.5% +3.1 p.p.
25.6% 5.9
7.4
1Q11 1Q12
4.0
2.3
0.3 3.8 0.2
0.6
1.5
0.7
Industry IT Others Stores
11
CASH FLOW
Increase of R$ 13.8 million in free cash flow, mostly due to EBITDA growth, and
lower investments and working capital needs.
* Dividend distribution: R$106.2 million have been destined to a proposed account to be distributed upon General
Shareholders’ Meeting approval on April 26th, 2012.
Cash Flow - Consolidated (R$ thousand) 1Q11 1Q12 Chg.
EBITDA 74,306 89,975 15,669
No cash items 365 946 581
Current Income tax and Social Contribution (14,939) (19,220) (4,281)
Working Capital Capex (17,938) (14,643) 3,295
Decrease in trade accounts receivable 17,559 44,090 26,531
(Increase) in inventories (13,781) (24,618) (10,837)
Increase (decrease) in accounts payable to suppliers (12,818) 4,857 17,675
Increase (decrease) in taxes payable 2,512 (33,681) (36,193)
Others (11,410) (5,291) 6,119
CapEx (5,870) (7,373) (1,503)
Free Cash Flow 35,924 49,685 13,761
Reconciliation from accounting Cash flow to adjusted Cash flow (R$ thousand) 1Q11 1Q12 Chg.
DFC - Cash provided by operating activities 45,804 71,410 25,606
Adjustment – Financial items allocated to operating cash (4,010) (14,352) (10,342)
Unrealized exchange and monetary variation (1,348) (1,050) 298
Financial Result (3,922) (14,101) (10,179)
Interest paid on loans 1,260 799 (461)
DFC - Cash flows from investing activities (5,870) (7,373) (1,503)
Free Cash Flow 35,924 49,685 13,761
Gross Debt = R$ 30.3 million
12
INDEBTEDNESS
* LTM EBITDA
Net Debt/ EBITDA*
Due to the increased operating cash flow, Cia. Hering increased its net cash
position by R$ 63.9 million in 1Q12 and reduced its debt by R$ 4.6 million.
Net Debt (R$ million) Short Term x Long Term
Short Term 29%
Long Term 71%
4.6
3.5
-0.7 0.1 -0.2 -0.2 -0.4 -0.6
2005 2006 2007 2008 2009 2010 2011 1Q12
201.3 184.6
-33.4 11.0
-25.1 -61.9 -165.9 -229.8
AGENDA
Highlights
1Q12 Operating
Performance
Outlook
14
OUTLOOK
Positive perspectives mainly for second half of 2012, although challenges related market
slowdown and climate factors may repeat in the short run.
Hering Brand still with high growth potential, despite not in the same pace of recent past:
Stores opening (guidance of 75 in 2012) and SSS growth in Hering Store chain
Improvement in product mix offering
Visual merchandising actions
Increase in stores traffic
Multibrand retail channel: continuous market share increase in existing clients through distribution
specialization.
Children’s market :
Share increase in the multibrand channel with Hering Kids and PUC brands
Expansion of the Hering Kids format – opening of 20 stores in 2012
Continuous adjustments in PUC chain, with discontinuation / relocation of a few other
operations.
Maintenance of the dzarm. Strategy, investing in the brand though the opening of more flagship
stores and marketing.
Re-launch of the webstores.
INVESTOR RELATIONS TEAM
Fabio Hering – CEO
Frederico Oldani – CFO and IRO
Patrícia Salem – IR Manager
I
Tel. +55 (11) 3371-4867
E-mail: [email protected]
Website: www.ciahering.com.br/ri