PBG (PTBL3) Q2 2024 earnings summary

Executive summary

• Net revenue reached R$589.1 million in 2Q24, up 7.3% year-over-year, with growth in all business units and market share gains in both domestic and international markets.

• EBITDA rose 44.4% to R$91.5 million, with margin improving to 15.5%; net loss narrowed to R$11.5 million from R$38.3 million in 2Q23.

• Capex investments dropped 64.8% to R$44.7 million, focused mainly on retail expansion and US operations.

• Net debt stood at R$1,007 million, with leverage at 3.0x net debt/EBITDA, down 0.14x sequentially.

• All business units posted growth, with Portobello America and Pointer leading segment performance.

Financial highlights

• Gross profit was R$215.1 million, stable year-over-year, with gross margin at 36.5% (down 2.6 p.p.).

• EBITDA margin improved to 15.5% (+4.0 p.p. YoY); EBIT increased 65.7% to R$47.9 million.

• Net margin improved to -2.0% from -7.0% in 2Q23.

• Working capital cycle improved by 18 days to 40 days; cash conversion cycle down 17% YoY.

• Operating expenses reduced to 28.4% of net revenue from 33.8% in 2Q23.

Outlook and guidance

• Gradual market recovery expected in 2H24, though impacted by slow interest rate reductions.

• Focus on strict expense control, lower capex, and leveraging recent investments for profitability.

• Net leverage expected to decline further; Portobello America to focus on ramp-up and profitability.

• Portobello Shop aims to accelerate growth, expand B2B sales, and optimize pricing/product mix.

• Continued leverage reduction and improved capital structure expected by year-end.