Alpargatas (ALPA4) Q4 2024 earnings summary

Executive summary

• 2024 was a transition year marked by operational efficiency, financial discipline, and inventory normalization, setting the stage for sustainable growth in 2025.

• Net revenue grew 11.2% in 4Q24 and 10% in 2024, with net profit reaching R$2.1 million in 4Q24, reversing prior losses.

• Adjusted EBITDA margin (excluding write-offs) rose to 17.8% in 4Q24, up 3.6pp year-over-year, and Rothy’s contributed US$17.7 million in EBITDA for 2024.

• Inventory write-offs of R$164.3 million in 4Q24 addressed legacy stock, normalizing inventory composition and working capital.

• International performance remained mixed, with strategies in place for recovery, especially in Europe and the U.S.

Financial highlights

• Net sales reached R$1,122.4 million in 4Q24 (+11.2% YoY) and R$4,108.3 million in 2024 (+10.0% YoY).

• Adjusted EBITDA (excl. write-offs) was R$200.3 million in 4Q24 (+38.9% YoY) and R$575.2 million in 2024 (+64.7% YoY).

• Gross margin (ex-write-off) improved to 43.1% in 2024 (+3.1pp YoY); adjusted gross margin reached 48.6% in 4Q24 (+3.9pp YoY).

• Net cash generation totaled R$1.1 billion from May 2023 to December 2024, with a net cash position of R$121.8 million at year-end.

• CapEx for 2024 was R$159 million, a 52% reduction year-over-year, focused on commercial, digital, and innovation projects.

Outlook and guidance

• Strategy for 2025 focuses on core product growth, international market recovery, and operational discipline.

• Expectation of sustainable growth beginning in 2025, with continued focus on regaining scale in Europe and the U.S.

• Marketing investments to remain at 7% of revenue, supporting brand strength in priority markets.