Azzas 2154 (AZZA3) Q1 2025 earnings summary

Executive summary

• Achieved significant integration progress and operational leverage, with strong 1Q25 results and successful corporate restructuring, including the merger of SOMA Group into Arezzo & Co (now Azzas 2154).

• Focused on core, high-ROIC brands, consistent growth, and market leadership, supported by a versatile supply chain and multichannel distribution.

• Prioritized efficient capital allocation, solid governance, and continuous innovation to drive business performance.

• Portfolio simplification led to discontinuation and sale of non-core brands.

Financial highlights

• Gross revenue reached R$3.3 billion, up 16.1% year-over-year for continued brands; recurring EBITDA (pre IFRS-16) was R$359.0 million, up 28.2%, and recurring EBITDA (post IFRS-16) was R$427.7 million, up 23.3%.

• Net income was R$117.7 million, up 15.6% year-over-year; adjusted net income (excluding Law 14.789/23) was R$181.6 million, up 20.3%.

• Gross margin improved to 54.8% (+0.3 p.p.); SG&A as a percentage of net revenue decreased by 90 bps to 39.3%.

• CAPEX totaled R$84.4 million, an 11.8% reduction year-over-year.

Outlook and guidance

• Clear priorities set for continuous growth, operational leverage, efficient capital allocation, and solid governance, with operational leverage expected to continue in 2025.

• Emphasis on innovation, agility, and expansion of multichannel and e-commerce distribution.