3Q17 PRESS RELEASE
1
CONFERENCE CALL
(only in Portuguese)
Date: November 14th, 2017
at 5 pm BRT/ 2 pm US ET/
7 pm London
Phone:
Dial-in Brazil: +55 11 3193-1001
Code: Alpargatas
Presentation:
http://ri.alpargatas.com.br
Speakers:
Márcio Utsch
CEO
Fabio Leite
CFO
http://ri.alpargatas.com.br
3Q17 PRESS RELEASE
2
1. PERFORMANCE SUMMARY FOR THE THIRD QUARTER OF 2017
In the third quarter of 2017, Alpargatas initiated the recovery of its results, with some indicators outperforming
those of the first quarters of the year. From July to September 2017, company performance was better in
Brazil than in the international operations. In the domestic market, net revenue was slightly lower than in
3Q16 (-1.1%), in spite of revenue growth for Mizuno and Osklen. The reason was the drop in Sandals
business revenue, where the increase in average price did not offset the lower volume. On the other hand,
gross margin in Brazil increased by 2.2 percentage points, with higher profitability for Havaianas and Mizuno.
The cost reduction and expenditure contention programs continued to generate positive results. The gain in
gross margin and greater productivity in operating expenses benefited EBITDA margin in the domestic
market. However, it did not exceed 3Q16, due to an increase in other non recurrent expenses, principally the
provision for expenditures related to the exchange in controlling stockholders.
In Sandals International, the higher average price of exported products offset the lower volume and Export
revenue in dollars grew in comparison with 3Q16. In contrast, revenues in dollars and euros decreased in the
United States and the EMEA region. The evolution in Export profitability drove growth in gross margin in
Sandals International. This gain did not offset the lower SG&A productivity, reducing EBITDA margin in this
business in 3Q17.
In Argentina, Topper footwear continued to face competition from imported products, compromising sales
volume.
R$ million 3Q17 3Q16 Var. 3Q 9M17 9M16 Var. 9M
NET REVENUE 951.1 982.8 -3.2% 2,618.2 2,988.5 -12.4%
BRAZIL 670.5 678.2 -1.1% 1,582.3 1,809.0 -12.5%
SANDALS INTERNATIONAL 108.4 110.4 -1.8% 532.2 566.1 -6.0%
ARGENTINA 172.2 194.2 -11.3% 503.7 613.4 -17.9%
GROSS PROFIT 414.1 418.6 -1.1% 1,155.7 1,345.2 -14.1%
Gross margin 43.5% 42.6% 0.9 pp 44.1% 45.0% -0.9 pp
BRAZIL 308.5 297.2 3.8% 689.0 776.6 -11.3%
Margin 46.0% 43.8% 2.2 pp 43.5% 42.9% 0.6 pp
SANDALS INTERNATIONAL 72.8 73.5 -1.0% 354.5 395.4 -10.3%
Margin 67.2% 66.6% 0.6 pp 66.6% 69.8% -3.2 pp
ARGENTINA 32.8 47.9 -31.5% 112.2 173.2 -35.2%
Margin 19.0% 24.7% -5.7 pp 22.3% 28.2% -5.9 pp
EBITDA 109.0 128.1 -14.9% 429.5 430.1 -0.1%
EBITDA margin 11.5% 13.0% -1.5 pp 16.4% 14.4% 2.0 pp
BRAZIL 98.8 103.0 -4.1% 315.8 221.3 42.7%
Margin 14.7% 15.2% -0.5 pp 20.0% 12.2% 7.8 pp
SANDALS INTERNATIONAL -0.8 5.0 n.a. 97.6 133.0 -26.6%
Margin -0.7% 4.5% -5.2 pp 18.3% 23.5% -5.2 pp
ARGENTINA 11.0 20.1 -45.3% 16.1 75.8 -78.8%
Margin 6.4% 10.4% -4.0 pp 3.2% 12.4% -9.2 pp
CONSOLIDATED NET INCOME(FROM CONTINUING OPERATIONS)
71.3 83.9 -15.0% 307.2 258.9 18.7%
Net margin 7.5% 8.5% -1.0 pp 11.7% 8.7% 3.0 pp
3Q17 PRESS RELEASE
3
The increase in average prices was enough to increase revenue in pesos, but at a lower percentage than
annual inflation. Gross margin diminished as a result of increased production costs, as did EBITDA margin.
The variations in the main consolidated indicators in comparison with 3Q16 were:
Net revenue: R$ 951.1 million, a 3.2% drop.
Gross profit: R$ 414.1 million, a decrease of 1.1%. At 43.5%, gross margin grew 0.9 p.p.
EBITDA: R$ 109.0 million, 14.9% lower, with an 11.5% margin.
Net income: R$ 71.3 million, 15.6% lower, with a margin of 7.5%.
Operating cash generation: R$ 202.6 million in the 12 months ending on September 30, 2017.
Appreciation of preferred shares from January to September: 60.0%.
Shareholder compensation in the year: R$ 150.3 million.
Since 2Q17, Alpargatas has disclosed its results indicators excluding the sales cut-off effect (goods invoiced
but not yet delivered) so that the capital market may track performance without this effect. It should be noted
that with this criterion, the main result indicators advanced in the quarter.
On September 20, the sale of a controlling stake to Itaúsa – Investimentos Itaú S.A., Cambuhy I Fundo de
Investimento em Participações Multiestratégia and Cambuhy Alpa Holding S.A was concluded. On the same
date, the Board Members who will represent the new controlling shareholders were elected in an
extraordinary general shareholders meeting. An Alpargatas S.A. shareholder agreement was also signed. In
a meeting of the Board of Directors on October 6, Mr. Pedro Moreira Salles was elected Chairman of the
Board of Directors and the Finance, People and Strategy Committees were established. In an another
extraordinary general shareholders meeting held on November 1 the creation of a permanent statutory Audit
Committee and the reformulation of the company’s bylaws were approved.
R$ million 3Q17 3Q16 Var. 3Q
Net Revenue 1,020.1 1,000.9 1.9%
Gross Profit 454.7 425.8 6.8%
Gross Margin 44.6% 42.5% 2.1 pp
EBITDA 145.5 133.5 9.0%
EBITDA Margin 14.3% 13.3% 1.0 pp
Consolidated Net Income 107.8 90.0 19.8%
Net Margin 10.6% 9.0% 1.6 pp
Pro forma (without sales cut off)
3Q17 PRESS RELEASE
4
2. RESULT OF OPERATIONS
2.1. SALES VOLUME
Sandals and Havaianas Extension Products
As commented in the second quarter report, with the successful launch of the 2017/18 sandals collection,
favorable seasonal factors, low stock levels at major clients and the implementation of marketing measures,
the company was expecting the resumption of Havaianas and Dupé sell-in growth from the second quarter.
The 5.7% decrease in the volume sold in the domestic market (-2.0% without the cut-off effect) countered
this expectation due to the delay in the expected recovery. In July, volume was still lower compared with the
same month in 2016; however, volume growth accumulated in August and September was already 3.9%
higher. In the overseas market, the lower sandals volume is explained by:
United States: planned reduction in volume sold to the off-price channel and a significant drop in volume
in the Havaianas stores and the independent retail trade due to hurricane Irma. The Havaianas stores in
Miami, Disneyworld®
and Key West remained closed for a number of days.
EMEA: the third quarter accounts for 12% of the region’s annual sales volume being a period of lower
volume most of it commercialized via Havaianas stores. Some countries, especially England, France and
Germany had adverse weather conditions during the quarter compromising the performance of sandals
retailing.
Exports: suspension of exports to Colombia, due to the transition to a new operating model which is
being implemented in the country.
Sporting Goods and Textiles
Thousand pairs/pieces 3Q17 3Q16 Var. 3Q 9M17 9M16Var. 1SVar. 9M
SANDALS 58,347 62,137 -6.1% 145,507 177,824 -18.2%
DOMESTIC MARKET 53,782 57,049 -5.7% 122,333 155,372 -21.3%
INTERNATIONAL MARKETS 4,565 5,088 -10.3% 23,174 22,452 3.2%
NON-SANDALS PRODUCTS 493 644 -23.4% 1,443 1,930 -25.2%
DOMESTIC MARKET 361 540 -33.1% 864 1,470 -41.2%
INTERNATIONAL MARKETS 132 104 26.9% 579 460 25.9%
TOTAL 58,840 62,781 -6.3% 146,950 179,754 -18.2%
DOMESTIC MARKET 54,143 57,589 -6.0% 123,197 156,842 -21.5%
INTERNATIONAL MARKETS 4,697 5,192 -9.5% 23,753 22,912 3.7%
Thousand pairs/pieces 3Q17 3Q16 Var. 3Q 9M17 9M16 Var. 9M
FOOTWEAR 2,582 2,438 5.9% 6,859 6,963 -1.5%
BRAZIL 1,213 936 29.6% 3,060 2,938 4.2%
ARGENTINA 1,369 1,502 -8.9% 3,799 4,025 -5.6%
APPAREL 735 688 6.8% 2,123 2,243 -5.3%
BRAZIL 303 354 -14.4% 891 1,174 -24.1%
ARGENTINA 432 334 29.3% 1,232 1,069 15.2%
TOTAL 3,317 3,126 6.1% 8,982 9,206 -2.4%
BRAZIL 1,516 1,290 17.5% 3,951 4,112 -3.9%
ARGENTINA 1,801 1,836 -1.9% 5,031 5,094 -1.2%
TEXTILE (km) 3Q17 3Q16 Var. 3Q 9M17 9M16 Var. 9M
ARGENTINA 4,045 4,558 -11.3% 10,544 13,550 -22.2%
3Q17 PRESS RELEASE
5
Mizuno increased its footwear sales because of the higher offer of basic and intermediate line products which
are being manufactured/assembled in Brazil. Sales of the performance and infinity lines also grew. There
was a drop in sports apparel volume as a result of the strategy of increasing the presence of higher added
value articles in the portfolio, while reducing the number of products on offer.
In Argentina, sports footwear sales were lower because imports has enabled the commercialization of
imported products at lower prices than those manufactured locally. The decrease in volume was compounded
by the growth in the number of points of sale for competing brands of Topper, which have boosted their
presence in small footwear chains in the country. In Textiles, volume was lower due to higher stock levels at
distributors and to decreased purchases by apparel manufacturers, as a result of higher import volumes.
Osklen
Osklen volume was higher, driven by 50.0% growth in sales to the multibrand channel and a 25.5% increase in
e-commerce. Anticipating the summer collection launch calendar helped drive the strong performance in the
retail channel.
2.2. NET REVENUE
In spite of the increase in Mizuno and Osklen revenues driven by higher volumes, net revenue in Brazil was
slightly lower than in 3Q16, due to the decrease in Sandals business revenue, where the 3.2% higher
average price (sandals + Havaianas brand extension products) did not offset the lower volume.
In Sandals International, higher average prices in the United States (17.0%) and in the EMEA region (2.0%)
were not enough to offset the decrease in volumes, resulting in a decrease in revenue in local currencies.
In Exports, even with the lower volume, revenue in dollars grew due to a country mix with a higher average
price and price increases in diverse markets. The 2.6% appreciation of the real against the dollar (compared
with 3Q16) contributed to the reduction of International Sandals revenue in reais.
Thousand pairs/pieces 3Q17 3Q16 Var. 3Q 9M17 9M16 Var. 9M
(footwear, apparel and accessories) 446 394 13.2% 1,074 1,028 4.4%
R$ million 3Q17 3Q16 Var. 3Q 9M17 9M16 Var. 9M
NET REVENUE 951.1 982.8 -3.2% 2,618.2 2,988.5 -12.4%
BRAZIL 670.5 678.2 -1.1% 1,582.3 1,809.0 -12.5%
SANDALS INTERNATIONAL 108.4 110.4 -1.8% 532.2 566.1 -6.0%
ARGENTINA 172.2 194.2 -11.3% 503.7 613.4 -17.9%
3Q17 PRESS RELEASE
6
In Argentina, the increases in the average prices of footwear and textiles offset the decreases in volumes,
driving a 5.2% increase in revenue in pesos, worthy of note being the strong performance in retail, with a
27.0% revenue increase. In reais, revenue was lower because of the 15.7% appreciation of the real against
the peso (compared with 3Q16). The Footwear business accounted for 67.0% of revenue in 3Q17 (66.0% in
3Q16), with Textiles corresponding to 33.0% (34.0% in 3Q16).
During the quarter, the variations in Alpargatas retail revenues on a same store basis were:
Havaianas (franchises in Brazil): -4.0%, driven mainly by weaker sales in Rio de Janeiro, where there is
a large concentration of stores and where the market has suffered from a decrease in income and a
reduction in the flow of tourists.
Osklen: 2.0%, due to the anticipation of the launch of the summer collection in the stores and improved
consumption in some markets, such as São Paulo.
2.3. GROSS PROFIT
In Brazil, gross margin was higher, driven by:
Increase in Havaianas gross profitability, due to: (i) the positive impact on costs of the industrial changes,
such as the internalization of the rubber injection process; and (ii) the increase in average prices.
Growth in Mizuno gross margin, due to the exchange rate (impact on imported products) and switching
production to Brazil.
Osklen’s increased share in revenues – the business has a high gross margin.
CHANGE IN NET REVENUE 3Q17 x 3Q16 9M17 x 9M16
EMEA - euro -3.2% 7.2%
USA - dollar -5.1% -0.9%
Exports - dollar 1.8% 14.4%
FRANCHISES OWN TOTAL FRANCHISES OWN TOTAL
HAVAIANAS 574 46 620 520 37 557
Brazil 439 4 443 415 4 419
Overseas 135 42 177 105 33 138
OSKLEN 23 56 79 21 62 83
Brazil 22 53 75 20 58 78
Overseas 1 3 4 1 4 5
TOPPER ARGENTINA 0 10 10 0 9 9
OUTLETS 0 28 28 0 31 31
Brazil 0 13 13 0 16 16
Overseas 0 15 15 0 15 15
TOTAL 597 140 737 541 139 680
09/30/17 09/30/16STORES
R$ million 3Q17 3Q16 Var. 3Q 9M17 9M16 Var. 9M
GROSS PROFIT 414.1 418.6 -1.1% 1,155.7 1,345.2 -14.1%
Gross margin 43.5% 42.6% 0.9 pp 44.1% 45.0% -0.9 pp
BRAZIL 308.5 297.2 3.8% 689.0 776.6 -11.3%
Margin 46.0% 43.8% 2.2 pp 43.5% 42.9% 0.6 pp
SANDALS INTERNATIONAL 72.8 73.5 -1.0% 354.5 395.4 -10.3%
Margin 67.2% 66.6% 0.6 pp 66.6% 69.8% -3.2 pp
ARGENTINA 32.8 47.9 -31.5% 112.2 173.2 -35.2%
Margin 19.0% 24.7% -5.7 pp 22.3% 28.2% -5.9 pp
3Q17 PRESS RELEASE
7
In Sandals International, gross margin was slightly higher due to the increase in Export margin.
In Argentina, the lower dilution of fixed costs, driven by lower production and higher raw material prices, in
particular cotton (50.0%) increased footwear and textile production costs at a higher rate than the increase in
the respective average prices in pesos, resulting in a loss in gross margin.
2.4. EBITDA
In Brazil, growth in gross margin and higher productivity in commercial, general and administrative expenses
– the expenditure contention plan drove a 5.0% reduction in this group of expenses in the quarter – benefited
EBITDA margin. However, the increase in other operating expenses, such as for example the provision for non
recurrent expenses with the change in stock ownership, impacted EBITDA and reduced margin.
In Sandals International, the gain in gross margin did not offset the lower SG&A productivity, which was higher
in the United States, due to marketing investment, and in Europe, because of the increase in the number of
own stores.
In Argentina, higher operating expense productivity helped attenuate the loss in EBITDA margin, which was
lower than gross margin.
From this year, Alpargatas has started reporting consolidated EBITDA as shown in the following table, no
longer adjusting it for other extraordinary revenue (expenses). The amounts for 2016 follow the same
criterion.
The table below demonstrates the balance of other extraordinary revenues (expenses) with adjustments to
the classifications in the 1Q17 and 2Q17 reports. In 3Q17, as mentioned previously, the main extraordinary
expense in Brazil was the provision made for the change in stock ownership. In Argentina, the main
extraordinary expense was labor indemnities resulting from the restructuring.
R$ million 3Q17 3Q16 Var. 3Q 9M17 9M16 Var. 9M
EBITDA 109.0 128.1 -14.9% 429.5 430.1 -0.1%
EBITDA margin 11.5% 13.0% -1.5 pp 16.4% 14.4% 2.0 pp
BRAZIL 98.8 103.0 -4.1% 315.8 221.3 42.7%
Margin 14.7% 15.2% -0.5 pp 20.0% 12.2% 7.8 pp
SANDALS INTERNATIONAL -0.8 5.0 n.a. 97.6 133.0 -26.6%
Margin -0.7% 4.5% -5.2 pp 18.3% 23.5% -5.2 pp
ARGENTINA 11.0 20.1 -45.3% 16.1 75.8 -78.8%
Margin 6.4% 10.4% -4.0 pp 3.2% 12.4% -9.2 pp
R$ million 3Q17 3Q16 9M17 9M16
(=) Consolidated Net Income 71.3 84.5 305.5 255.8
Payment of taxes -11.5 2.5 -5.7 23.5
Financial Result 25.3 16.7 56.0 69.3
Depreciation and Amortization 23.9 25.0 72.0 78.4
Result from Discontinued Operations 0 -0.6 1.7 3.1
(=) EBITDA 109.0 128.1 429.5 430.1
R$ million 1Q17 2Q17 3Q17 9M17 1Q16 2Q16 3Q16 9M16
Other non recurring revenues (expenses) 155.8 -9.2 -25.4 121.2 -6.0 3.7 0.2 -2.1
Brazil 171.4 -7.6 -23.3 140.5 -5.6 7.5 1.7 3.6
Argentina -15.6 -1.6 -2.1 -19.3 -0.4 -3.8 -1.5 -5.7
3Q17 PRESS RELEASE
8
2.5. NET INCOME
Consolidated net income in the quarter totaled R$ 71.3 million, with a margin of 7.5%. The earnings per share
in the nine month period ending on September 30, 2017 was R$ 0.68, compared with R$ 0.56 for the same
period of the previous year. The most significant variations in net income were:
- R$ 19.1 million in EBITDA, impacted by the variation of R$ 20.9 million in the provision for expenses with
the change in ownership (R$ 17.0 million in 3Q17 and reversal of R$ 3.9 million in 3Q16).
+ R$ 14,0 million in income tax. The tax loss in the quarter generated an income tax credit, compared with
a debit in 3Q16.
- R$ 2.1 million in the financial result. The gain from the decrease in interest on loans was less than the
loss from financial investments (lower interest rates as well as average cash volume invested).
- R$ 6.5 million increase in expenses from the exchange variation related to financial assets and liabilities.
2.6. NET FINANCIAL POSITION
On June 30, 2017, Alpargatas had a negative net financial position of R$ 192.2 million, resulting from a cash
balance of R$ 370.6 million (operating generation totaled R$ 202.6 million in the year) and indebtedness of R$
562.8 million due in the short-term, R$ 413.6 million of which in Brazilian currency. In this quarter, total long-
term debt was temporarily reclassified as short-term while the company awaits approval of the change in stock
ownership from the BNDES and BNB – Banco do Nordeste do Brasil.
R$ million 3Q17 3Q16 Var. 3Q 9M17 9M16 Var. 9M
CONSOLIDATED NET INCOME 71.3 84.5 -15.6% 305.5 255.8 19.4%
Net margin 7.5% 8.6% -1.1 pp 11.7% 8.6% 3.1 pp
CONSOLIDATED NET INCOME
(CONTINUING OPERATIONS)
Quarterly variation
(R$ million)
8.6% Margins (% of net revenue) 7.5%\
(19.1)
14.0
(2.1)
(6.5)
0.5
84.5
50
60
70
80
90
100
110
120
Net income3Q16
EBITDA Income taxes Financialresult
Exchange rate Other Net income3Q17
71.3
3Q17 PRESS RELEASE
9
3. CAPITAL MARKET AND SHAREHOLDER COMPENSATION
On September 30, 2017, Alpargatas preferred shares (ALPA4) were quoted at R$ 15.70 and its common
shares (ALPA3) at R$ 14.15, respectively 60.0% and 62.4% higher than on December 31, 2016. From
January to September, Ibovespa appreciated by 23.4%. At the end of the third quarter, Alpargatas’s market
cap on the B3 index was R$ 7.01 billion, 59.1% higher than at the end of 2016. The average daily trading
volume for ALPA4 in the quarter was R$ 9.5 million, 63.8% higher than the average volume traded in 3Q16.
In a meeting held on November 13, 2017, the Board of Directors decided to antecipate a R$ 38.2 million
payment of interest on own equity, to be paid out on December 13, 2017. Added to the R$ 112.1 million
already paid in the year, Alpargatas shareholder compensation now totals R$ 150.3 million in 2017.
*****************************
POSIÇÃO FINANCEIRA LÍQUIDA
(R$ milhões)
Net Financial Position
(R$ million)
Operating cash generation of
R$ 202.6 million
(121.8)
(193.8)(50.2)
(128.8)
(38.6)(43.4)
9.2
8.0
(200.2) (192.2)
Net
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09/3
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575.4
3Q17 PRESS RELEASE
10
BALANCE SHEET
(in thousand reais)
ASSETS 09/30/2017 09/30/2016 LIABILITIES 09/30/2017 09/30/2016
Current assets 2,095,033 2,179,017 Current liabilities 1,079,795 994,342
Cash and banks 142,560 149,577 Suppliers 344,094 395,325
Tempory cash investment 228,094 245,220 Loans and financing 399,785 183,734
Trade accounts receivable (net of provisions) 792,095 837,209 Debt reestructuring agreements 4,371 6,559
Inventories 776,212 712,994 Payroll and related charges 156,834 188,868
Other receivables 42,527 50,593 Reserve for contingencies 16,623 13,637
Prepaid expenses 26,052 21,017 Provision for income and social contribuition taxes 21,414 39,791
Assets held for sale - - Taxes payable 21,312 31,377
Other assets - - Interest on capital and dividends payable 4,784 31,731
Recoverable taxes 87,493 96,843 Other payable liabilities 110,578 95,418
Assets from discontinued operations - 65,564 Liabilities on assets from discontinued operations - 7,902
Long-term assets 191,448 146,717 Long-term liabilities 303,887 654,823
Recoverable taxes 50,054 15,532 Loans and financing 163,101 332,858
Deferred income and social contribuition taxes 68,576 76,179 Debt reestructuring agreements 19,959 25,200
Escrow deposits 22,594 22,286 Provision for taxes - 193,051
Other receivables 50,224 32,720 Taxes Installments - -
Provision for income and social contribuition taxes 56,331 66,705
Reserve for contingencies 38,363 25,462
Other payable 26,133 11,547
Permanent Assets 1,353,981 1,364,486 Shareholders' equity 2,256,780 2,041,055
Investments 1,658 2,634 Capital 648,497 648,497
Property, plant and equipment 721,813 711,000 Capital reserves 172,799 183,542
Intangible 630,510 650,852 Treasury shares (64,248) (64,248)
Profit reserves 1,569,188 1,315,725
Equity assessment (149,529) (128,440)
Hedge operation - -
Additional dividend - -
Minority interest 80,073 85,979
TOTAL ASSETS 3,640,462 3,690,220 TOTAL LIABILITIES 3,640,462 3,690,220
Book value per share (R$) 4.70 4.22
3Q17 PRESS RELEASE
11
INCOME STATEMENT
(in thousands of Brazilian reais)
3Q17 3Q16 9M17 9M16
Net Sales 951,169 982,832 2,618,213 2,988,493
Cost of sales (537,023) (564,244) (1,462,476) (1,643,322)
Gross Profit 414,146 418,588 1,155,737 1,345,171
gross margin 43.5% 42.6% 44.1% 45.0%
Operating Income (Expenses) (329,017) (315,538) (798,190) (993,426)
Selling (256,347) (234,117) (754,162) (732,963)
General and administrative (41,573) (66,346) (146,369) (195,192)
Management fees (3,976) (3,768) (10,699) (12,928)
Amortization of intangible charges (6,272) (8,195) (20,230) (25,483)
Other operating Income (expenses), net (20,849) (3,112) 133,270 (26,860)
EBIT - Operating Results 85,129 103,050 357,547 351,745
operating margin 8.9% 10.5% 13.7% 11.8%
Financial Result (16,192) (14,052) (41,097) (49,471)
Exchange variation (9,126) (2,612) (14,989) (19,831)
Operating Income 59,811 86,386 301,461 282,443
Income and social contribution taxes 11,496 (2,501) 5,702 (23,455)
Net Income from continuing operations 71,307 83,885 307,163 258,988
Net result from discontinued operations - 658 (1,674) (3,138)
Consolidated net income 71,307 84,543 305,489 255,850
Net Income from controlling shareholder 73,318 85,334 315,141 261,349
Minority Interest (2,011) (791) (9,652) (5,499)
EBITDA - R$ million 109.0 128.1 429.5 430.1
EBITDA margin 11.5% 13.0% 16.4% 14.4%
3Q17 PRESS RELEASE
12
CASH FLOW
(in thousand reais)
CASH FLOW FROM OPERATING ACTIVITIES 09/30/2017 09/30/2016
Cash from operating activities 291,827 349,025
Net income for the period 307,164 258,988
Depreciation and amortization 71,985 78,352
Income (loss) from disposal/derecognition of property, plant and equips. 11,766 2,161
Equity pickup 0 0
Interest and Monetary and foreign exchange variation 34,743 53,804
Provisions for tax, civil contingencies and labor claims 15,173 14,681
Deferred income and social contribuition taxes -2,104 -24,651
Suspended taxes payments -198,624 0
Allowance (reversal of) for doubtful accounts 17,756 6,687
Provision for (reversal of) inventory losses 9,042 8,333
Amortization of charges on loans and financing -37,742 -32,513
Unrealized gains/losses on derivative transactions -154 3,291
Gain/loss in operation with derivatives 0 0
Stock option plan granted 0 0
Remeasurement adjustment - 1st acquisition Osklen 146 -2,052
From sale of Real property 0 0
Provision for Impairment of property, plant and equipment/Intangible assets 11,425 0
Remeasurement od asset for sale 0 0
Net cash spent in discontinued operations 51,251 -18,056
Changes in assets and liabilities -211,406 -172,312
Trade accounts receivable 78,153 -7,690
Inventories -181,503 -148,614
Prepaid expenses -14,666 -8,049
Taxes recoverable -59,479 -3,054
Trade accounts payable -61,919 -10,638
Taxes payable 185 35,929
Payroll and social charges -1,180 31,761
Payment of income and social contribuition taxes -28,346 -22,123
Other 57,349 -39,834
NET CASH - OPERATING ACTIVITIES 80,421 176,713
3Q17 PRESS RELEASE
13
CASH FLOW FROM INVESTING ACTIVITIES 09/30/2017 09/30/2016
Acquisition of property, plant and equipment and intangible assets -80,223 -60,555
Short-term investments -32,520 22,680
Redemption of Financial Investments 115,343 0
Receivable from sale of permanent assets 0 3,786
Acquisition of Investments 0 0
Initial Cash Balance of controlled company 0 0
NET CASH - INVESTING ACTIVITIES 2,600 -34,089
CASH FLOW FROM FINANCING ACTIVITIES
Loans and financing raised 174,990 267,555
Amortization loans and financing - Principal -195,781 -419,341
Payment of dividends and interest on equity -111,547 -43,150
Amortization through debt restructuring of subsidiary -4,946 -8,585
Acquisition shares to be held in treasury, net 0 23,890
NET CASH - FINANCING ACTIVITIES -137,284 -179,631
Exchange gains (losses) on cash and cash equivalents 1,427 -38,124
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS -52,836 -75,131
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 391,347 394,926
CASH AND CASH EQUIVALENTS AT END OF PERIOD 338,511 319,795