Raia Drogasil (RADL3) Q2 2024 earnings summary

Executive summary

• Gross revenue reached R$10.4 billion in 2Q24, up 15.4% year-over-year, with 3,076 pharmacies, 70 openings, and mature-store growth of 6.7%.

• Digital sales surged 43.9% to R$1.7 billion, representing 17.8% of retail revenue, with 73% via app and 94% of orders delivered or collected within 60 minutes.

• Adjusted EBITDA rose 7.4% to R$824.4 million, with a margin of 7.9%.

• Adjusted net income was R$356.6 million, up 2.1% year-over-year, with a margin of 3.4%.

• Market share increased by 0.5 pp to 15.7%, with gains in all regions.

Financial highlights

• Gross margin was 28.2%, down 0.6 pp year-over-year due to lower price adjustment and tax changes.

• Free cash flow was negative R$303.4 million, reflecting seasonal pressures and total cash consumption of R$583.2 million.

• Selling expenses were 17.2% of revenue, with a slight increase due to personnel and logistics, but offset by rent and marketing savings.

• Net debt/EBITDA was 1.3x, in line with seasonal trends.

• Contribution margin was 11.0% in 2Q24, down 0.7 pp year-over-year.

Outlook and guidance

• Guidance maintained for 280–300 new pharmacy openings per year in 2024 and 2025.

• Expansion focuses on geographic and demographic diversification, with 71% of new openings outside São Paulo.

• Continued strong digital growth and market share expansion expected.

• Margins expected to remain stable, with ongoing focus on cost efficiency and digital investments.

• 25.9% of stores are still maturing, supporting future organic growth.