Conference Call 1Q11 Results

Transcription

1 Conference Call 1Q11 Results 12:00 pm (US-ET) / 1:00 pm (Brazil) Access in English: +1 (786) Replay in English: +55 (11) password: Access in Portuguese: +55 (11) Replay in Portuguese: +55 (11) password: In Portuguese with simultaneous translation in English 1

2 Forward-Looking Statements Any statement made during this presentation referring to the Company s business outlook, projections and financial and operating goals represent beliefs and assumptions of the Management of Lojas Renner S.A and are based on information currently available to the Company. Future considerations are not a guarantee of performance. These involve risks, uncertainties and assumptions since they refer to forward-looking events and, therefore depend on circumstances that may not occur. The audience should understand that general economic and industry conditions, as well as other operating factors may affect the Company s future results and lead to outcomes that may be materially different from those expressed in such future considerations. Except where indicated to the contrary, the following financial and operating information is in conformity with Brazilian Corporate Law, incorporating the amendments in Law 11,638/07, and the comparisons refer to the first quarter (1Q). As from December 2007, the Company has begun to include revenues from financial services in Gross Operating Sales Revenue. However, in this report, comparisons, percentages of expenses, and operating margins are related to Net Revenue from Merchandise Sales. 2

3 Highlights of the Period Net Revenue from Merchandise Sales reported growth of 17.6% in the period Same Store Sales increased 11.2% Gross Margin from the Retail Operation remained stable at 53.0% Results from Financial Services reached R$ 38.5 million, 46.1% above the R$ 26.3 million in 1Q10 Total EBITDA was R$ 85.2 million, with a growth of 16.5% and an EBITDA Margin of 16.4% Net Income for the period recorded growth of 29.0%, reaching a Net Margin of 9.2% against 8.4% for 1Q10 3

4 Net Revenue from Merchandise Sales Net Revenue from Merchandise Sales R$ MM Net Revenue from Merchandise Sales per m 2 In R$ per m % +17.6% , % 1, % 1,883 1Q10/1Q % 1Q11/1Q % Same Store Sales Growth 44

5 Store Operations Geographical Distribution March Selling Area & Number of Stores Thousand m 2 RR AP + 9.8% + 9.1% AC AM 2 1 RO MT 1 MS 1 RS PA 1 PR 10 DF GO 5 SP 5 SC TO MA PI MG 8 RJ CE 2 BA 5 ES RN 1 PB 3 PE AL 1 SE stores stores stores Mar.09 Mar.10 Mar Stores Distribution Centers 5

6 Gross Profit from Merchandise Sales Gross Profit & Gross Margin from Retailing Operation R$ MM % % % 53.0% 53.0% Gross Profit Gross Margin from Retailing Operation Higher cotton costs did not impact margins during the period Alternatives for cost reductions Favorable currency exchange rates Higher import volume 6

7 Selling Expenses Selling Expenses R$ MM % % % 31.1% 32.3% Selling Expenses As a % of Net Revenues from Merchandise Sales Large number of new stores being prepared for rollout Recruitment, selection and training costs of newly hired employees High fixed costs of the stores going into operation in 4Q10 and currently still in the early stages of maturation 7

8 General & Administrative Expenses General & Administrative Expenses R$ MM % + 7.8% % 9.3% 9.9% G&A Expenses As a % of Net Revenues from Merchandise Sales Revamping of support areas in line with the expansion plan Expenses with managers and supervisors being trained to attend a larger number of stores Heavier logistics expenses 8

9 Renner Card and Financial Services Result from Financial Services Breakdown (R$ MM) 1Q11 1Q10 Var. % Revenues, Net from Funding and Taxes % Sales in the Interest-free Plan (0+5) % (Recov ery of Past Due Receiv ables) Sales in the Interest-bearing Plan (0+8) % (Interest + Recov ery of Past Due Receiv ables) Personal Loans and Other Financial Services % Credit Losses, Net from Recoveries (18.8) (23.6) -20.4% Sales in the Interest-free Plan (0+5) (3.7) (5.1) -28.2% Sales in the Interest-bearing Plan (0+8) (9.4) (13.8) -31.7% Personal Loans (5.7) (4.7) 21.8% Operating Expenses (Renner Card & Financial Services) (17.6) (9.6) 84.2% Result from Financial Services % % of Company's total EBITDA 45.2% 36.0% - 9

10 EBITDA Total EBITDA and EBITDA Margin R$ MM % % % 16.4% EBITDA 10.5% EBITDA Margin over Net Revenues from Merchandise Sales EBITDA from Retailing Operation (R$ MM) 1Q11 1Q10 Total EBITDA ( - ) Result from Financial Serv ices EBITDA from Retailing Operation EBITDA Margin from Retailing Operation (over Net Revenues from Merchandise Sales) 9.0% 10.6% 10

11 Financial Result & Cash Position Financial Result, Net Financial Result, Net (R$ MM) 1Q11 Financial Rev enues Q10 Financial Expenses (4.6) (3.1) Net Effect of Adjustment of Long-Term Taxes to Present Value Foreign Exchange Variation Net Financial Result, Net Net Cash Net Cash (R$ MM) Mar.11 Dec.10 Mar.10 Cash and Cash Equiv alents Total Loans and Financing (45.7) (48.7) (42.0) Short Term (12.3) (12.3) (8.9) Long Term (33.4) (36.4) (33.1) Net Cash

12 Net Income Net Income R$ MM Return on Invested Capital (ROIC) Adjusted Net Income / Operating Capital % % 4.5% % % % 9.2% 3.0% Net Income Net Margin over Net Revenue from Merchandise Sales ¹ Current Assets + Long-term Assets + Fixed Assets Current Liabilities* - Long-term Liabilities* * Except Loans and Structural Financing (Banco do Nordeste), Statutory Participations and Dividends. 12

13 Investments (CAPEX) and Expansion CAPEX Evolution R$ MM Plano de Expansão City Location Format Date São Paulo - SP Shop. Metrô Boulevard Tatuapé Blue Steel March 24.0 Total stores inaugurated in 1Q11 1 store 15.8 City Location Format Date 6.4 Barueri - SP Shopping Tamboré Traditional April Indaiatuba - SP Polo Shopping Indaiatuba Compact April Ribeirão Preto - SP Novo Shopping Center Traditional May Blumenau - SC Blumenau Norte Shopping Compact May Campo Grande - MS Norte Sul Traditional May CAPEX Summary (R$ MM) 1Q11 1Q10 Aracaju - SE Shopping Riomar Traditional May New Stores Remodeling of Instalations I T Equipment & Systems Others Brasília - DF Shopping Center Iguatemi Brasília Compact June Campos dos Goytacazes - RJ Boulevard Shopping Campos Traditional June Resende - RJ Shopping Center Patiomix Resende Compact June Total Total stores to be inaugurated in 2Q11 9 stores 13

14 Balance Sheet In R$ MM Mar Part. Dec Part. Mar Part. Cash & Cash Equiv alents % % % Trade Account Receivables % % % I nv entories % % % I nv entories % % % I mports in Transit % % 9.7 1% Others % % % PPE and I ntangible, Net % % % TOTAL ASSETS 2, % 2, % 1, % Loans and Financing % % % Financing - Financial Services Operations % % % Suppliers % % % Commercial Suppliers % % % Antecipation of Payments (115.9) -5% (169.3) -7% (124.7) -8% Suppliers of Material for Consumption % % % Taxes and Contributions Payable % % % Others % % % Not Current % % % Loans and Financing % % % Financing - FIDC Financial Services Operations % % - 0% Others % % % Shareholders' Equity 1, % 1, % % TOTAL LIABILITIES 2, % 2, % 1, % 14

15 Renner Card Payment Options Total Cards Issued Millions % 1 st Quarter, % Renner Card (0+8) 12.1% Renner Card (0+5) 41.8% Cash 24.9% Other Credit Cards 21.2% Sales using the Renner Card 53.9% Renner Card Average Ticket R$ % % Renner Card (0+8) 12.4% 1 st Quarter, 2010 Renner Card (0+5) 43.5% Cash 24.6% Other Credit Cards 19.5% Sales using the Renner Card 55.9% 15

16 Employees Number of Employees 9, % 11, % 1,511 new employees 12, stores 121 stores 135 stores Mar.09 Mar.10 Mar.11 New Hiring of Personnel by Area: Administrative: 397 new employees Stores: 1,114 new employees 16

17 Stock Appreciation Last 12 months 100 Base LREN % IBOV - 2.5% 50 17

18 Contacts José Galló Chief Executive Officer Adalberto Santos Chief Financial Officer and IR Officer Investor Relations Team: Paula Picinini tel Diva Freire tel Katia Ramires tel Tïago Loncan tel