Cencosud (CENCOSUD) Q4 2023 earnings summary

Executive summary

• Q4 revenue grew 2.8% YoY and adjusted EBITDA rose 8.7%, excluding Argentina IAS 29 effects; adjusted EBITDA margin expanded 64 bps to 11.8%.

• Q4 net income excluding IAS 29 rose 49.2% to US$418m; reported net income fell 36.4% to US$121m, reflecting Argentine hyperinflation accounting and currency depreciation.

• Supermarket resilience and stronger profitability in Argentina and Peru offset weaker discretionary demand and performance in Chile, Brazil and Colombia.

Financial highlights

• Q4 revenue was CLP 4,424,735m, up 2.8%; FY23 revenue was CLP 15,230,381m, up 6.6%. Comparisons exclude Argentina IAS 29 adjustments.

• Q4 adjusted EBITDA was CLP 523,628m, up 8.7%; FY23 adjusted EBITDA was CLP 1,634,048m, up 3.0%, excluding IAS 29 adjustments.

• Q4 reported gross margin was 28.6%, flat YoY; excluding IAS 29, it was 31.7%, up 215 bps.

• FY23 adjusted EBITDA margin was 10.7%, down 38 bps excluding IAS 29; reported margin was 9.7%.

• FY23 retail tickets increased 8.9%; regional supermarket online sales rose 6.8% in Q4, while digital revenue grew 3.6%.

Outlook and guidance

• FY24 revenue guidance was US$17,281m, down 0.7%; adjusted EBITDA was US$1,825m, down 2.3%, with a 10.6% margin.

• FY24 investment plan totaled US$641m: US$524m CAPEX and US$117m OPEX; guidance assumes an average exchange rate of CLP 875.0/US$.

• FY24 plans included 28 supermarket, 11 convenience and 4 home improvement store openings, 50,171 sqm of selling space and 33,000 sqm of incremental shopping-center GLA.

• More than US$16m was planned for CencoMedia, Cencosud Ventures and CencoPay in 2024; private-label growth and operational initiatives were expected to support future margins.