CVC Brasil Operadora e Agência de Viagens (CVCB3) Q3 2024 earnings summary

Executive summary

• Achieved positive net income of R$14.4 million in 3Q24, the first after 20 quarters, and reduced net loss by R$340 million in 9M24 vs. 9M23, despite macroeconomic challenges and operational disruptions in Brazil and Argentina.

• Opened a record 90 stores in 3Q24 (72 in Brazil, 18 in Argentina), totaling 250 new stores since June 2023 and 191 in 9M24, with expansion focused on smaller towns and new store models.

• Strong operational cash generation of R$118 million in 3Q24, matching or exceeding 2019 levels.

• Strategic focus on exclusive products, alternative financing, phygital sales, and franchisee confidence, especially in Brazil and Argentina.

• B2C and B2B segments showed robust growth, with B2C bookings up 10.3% YoY in Brazil and B2B returning to growth.

Financial highlights

• Adjusted EBITDA reached R$124.7 million in 3Q24 (+30% YoY), with a consolidated margin of 34% and Brazil margin at 38%.

• Net income of R$14.4 million in 3Q24, reversing a loss of R$87.5 million in 3Q23.

• Operating cash generation improved by R$209 million YoY in 3Q24.

• Net debt reduced to R$433.7 million, with leverage at 1.2x Net Debt/EBITDA (LTM).

• Financial expenses in 9M24 were R$219.7 million, down from R$318.4 million in 9M23; financial revenues rose to R$99.2 million.

Outlook and guidance

• Management expects continued net debt reduction, driven by EBITDA growth and working capital improvements.

• G&A expenses targeted to grow no more than inflation, aiming to reduce G&A as a percentage of net revenue to near 40%.

• B2C growth expected to accelerate in Q4 and Q1 2025, with sales expenses maintained below 2% of bookings.

• Strategic plan for 2025–2027 focuses on technology, price competitiveness, core business reinforcement, and niche market expansion.

• Fitch Ratings assigned BBB rating with stable outlook, citing margin growth, debt evolution, and sector leadership.