Grupo SBF (SBFG3) Q3 2024 earnings summary

Executive summary

• Achieved record LTM adjusted EBITDA of R$747.7M (+34.5%) and net income of R$388.4M (+164.9%) vs LTM23, with LTM net revenue up 3.9% to R$7.1B.

• Q3 2024 gross profit rose 7.1% to R$890.7M, gross margin expanded 3.9 p.p. to 50.3%, and net profit grew 71.8% to R$121.1M (net margin 6.8%).

• Operating cash generation reached R$272.4M in Q3 2024 (+149.7% vs 3Q23), supporting a 62.5% reduction in net debt to R$583.8M and leverage down to 0.78x.

• Strategic focus on profitability, deleveraging, and operational efficiency, with improved working capital and inventory management.

Financial highlights

• Q3 2024 net revenue was R$1.77B (-1.3% vs 3Q23); 9M24 net revenue reached R$4.98B (+2.5%).

• Adjusted EBITDA (ex-IFRS) for Q3 2024 was R$201.1M (+18.7%), margin 11.4% (+2.0 p.p.); adjusted net profit (ex-IFRS) R$121.1M (+71.8%), margin 6.8% (+2.9 p.p.).

• Gross margin reached 50.3% in Q3 2024 (+3.9 p.p. vs 3Q23); Centauro gross margin 50.4% (+3.3 p.p.), Fisia 45.2% (+3.4 p.p.).

• Net working capital reduced 32.3% year-over-year, with inventory days down 6% and receivables days down 33.4%.

• Net debt reduced to R$583.8M (-62.5% vs 3Q23), leverage at 0.78x EBITDA (ex-IFRS).

Outlook and guidance

• Management reaffirms commitment to expanding gross profit, EBITDA, and net income, with ongoing deleveraging and strong cash generation as strategic priorities.

• Focus remains on operational efficiency, inventory optimization, and value creation for shareholders and stakeholders.

• No major changes to the strategic plan; growth in store openings and new concepts will be gradual and based on proven returns.

• Currency impacts are being managed, and no significant royalty increases are expected until 2028.