Grupo SBF (SBFG3) Q2 2024 earnings summary

Executive summary

• Achieved record adjusted EBITDA of R$716 million (+48.0% LTM) and net income of R$338 million (+154.6% LTM) compared to LTM23.

• 2Q24 marked historical highs for net revenue, gross profit, EBITDA, and net income for a second quarter.

• Net revenue reached R$1.7 billion in 2Q24, up 7.6% year-over-year, with gross margin expanding 2.5 p.p. to 49.8%.

• Net income of R$73.2 million in 2Q24, reversing a R$0.9 million loss in 2Q23.

• Net debt reduced by R$756 million year-over-year, with leverage at 1.06x (down from 3.13x in 2Q23).

Financial highlights

• Adjusted EBITDA (ex-IFRS) reached R$176 million in 2Q24 (+90.5% vs 2Q23), margin at 10.3% (+4.5 p.p.).

• Gross profit rose 13.1% to R$853 million; gross margin at 49.8% (+2.5 p.p. vs 2Q23).

• SG&A/Net Revenue (ex-IFRS) improved to 39.5% (-2.0 p.p. vs 2Q23), with expense growth below revenue growth.

• Operating cash flow was R$233 million in 2Q24, up from R$16.6 million in 2Q23.

• Financial cycle improved by 41 days vs 2Q23; inventory days down 21.2%, receivables days down 23.3%.

Outlook and guidance

• Management remains focused on expanding net income, reducing leverage, and efficient working capital management.

• Strategic planning aims to generate sustainable value, cash flow, and prepare for new growth opportunities.

• Fully hedged for 2024 collections, minimizing FX risk for gross margin.

• Expect continued margin recomposition at Fisia in H2 2024, with gradual improvement each quarter.

• Optimistic about innovation pipeline, especially with Nike's Olympic cycle products and new technologies across brands.