Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Grupo Mateus SA (BSP:GMAT3, Financial) reported a significant growth in gross revenue, reaching 9.4 billion, marking a 20% increase compared to the previous year.
- The company achieved a same-store sales growth of over 7%, driven by a successful anniversary campaign.
- Grupo Mateus SA (BSP:GMAT3) expanded its store network significantly, with plans to end the year with over 50 new stores, marking the largest expansion in its history.
- The company reported a strong EBITDA margin of 8.2%, reflecting a 24% growth, attributed to efficient expense management and operational improvements.
- Grupo Mateus SA (BSP:GMAT3) maintained a resilient gross margin of 22.7%, despite challenges such as changes in ICMS rates and a strong promotional campaign.
Negative Points
- The company experienced a cash consumption of 525 million in the third quarter, primarily due to seasonal stock effects and capital expenditures.
- Grupo Mateus SA (BSP:GMAT3) faced challenges in maintaining its cash cycle, with stock levels increasing from 42 to 45 days year-over-year.
- The effective income tax rate posed a challenge, with the company implementing countermeasures to manage its impact.
- There is a concern about the high marginal cost of new store expansions, which could impact the overall return on investment.
- The competitive environment remains volatile, with potential impacts from competitors' strategies and market conditions.
Q & A Highlights
Q: How can we expect improvements in the cash cycle in the next quarters, and what should we expect regarding marketing income from suppliers?
A: Improvements in the cash cycle are expected as operational challenges are addressed, with a focus on strengthening controls and engaging the commercial team. The company is working on internal goals tied to variable compensation to improve stock and supplier payment conditions. Regarding marketing income from suppliers, the company has structured a robust area to work on this segment, contributing to margin gains, and sees room for further improvement in the future. - Tlo Queo, VP and Director for Investor Relations
Q: What is the impact of the expansion of new stores on the consolidated margin, and how has the store's CapEx per store evolved over time?
A: New stores have been performing above legacy stores, contributing to increased network margins. The company is balancing the gain of shares with the contribution of results to ensure consistent EBITDA numbers. Regarding CapEx, the company has invested in larger stores and is now focusing on balancing investments to improve RoIC, with a focus on super and service stores that are yielding great results. - Sandro TRY, VP for Operations, Logistics, and Commercial
Q: How do you see the competitive environment and its impact on your business?
A: The competitive environment has not significantly impacted results this year. The company remains focused on its business, aiming to deliver consistent and resilient results. The integration of new acquisitions is expected to strengthen the company's position in new states, contributing to optimism about future growth. - Gino Martin, CEO
Q: Can you explain the recurrence of gains in margin from making routes more dense and busier?
A: The recurrence of margin gains is linked to the consistent and progressive evolution of making routes more dense. This involves expanding distribution centers and improving logistics, which contributes to regularity in results. The focus is on delivering consistent results without peaks, gradually consolidating market share. - Sandro TRY, VP for Operations, Logistics, and Commercial
Q: What strategic decisions were made regarding stock preparation for the fourth quarter, considering inflation and food items?
A: The company focused on regional specificities, with sales departments in northeastern states working to deliver robust third-quarter results. There was no specific focus on one category; instead, the effort was on delivering consistent results across all regions. The strategy involved negotiating at a regional level to address tailored demands. - Gino Martin, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
