Raia Drogasil (RADL3) Q4 2024 earnings summary

Executive summary

• Ended 2024 with 3,300 pharmacies (300 openings, 23 closures), expanding to 619 cities and all Brazilian states, with national market share at 16.5% (+0.3pp year-over-year).

• Gross revenue reached R$41.8 billion, up 15.1% year-over-year, with digital sales surging 41.7% to R$7.1 billion and 20.2% retail penetration.

• Adjusted EBITDA grew 15.0% to R$3.0 billion (margin 7.2%), and adjusted net income rose 16.6% to R$1.3 billion (margin 3.1%).

• Free cash flow was R$188.5 million for the quarter, with total cash consumption of R$651.4 million for the year.

• Leadership transition: Renato Raduan appointed CEO, succeeding Marcilio Pousada, with a focus on organic growth, digital, and efficiency.

Financial highlights

• Same-store sales grew 9.0% year-over-year; mature stores up 6.5%, both above inflation.

• Gross margin was 27.7% for the year, down 0.3pp due to tax (PIS/COFINS) and mix effects.

• Selling expenses were 17.4% of gross revenue, with G&A expenses at 3.1% and contribution margin at 10.3%.

• Net debt/EBITDA at 1.1x, with 81% of debt long-term and cash cycle stable at 60 days.

• ROIC was 16.7%, or 18.8% excluding new tax effects.

Outlook and guidance

• Plan to open 330–350 new stores in 2025, targeting IRR above 20% and continued market share gains.

• Focus on omnichannel experience, digital engagement, and healthcare services expansion.

• Expect to sustain mature store growth above inflation, despite regulatory and macroeconomic headwinds.

• Gross margin expected to face pressure from lower CMED adjustments and 4Bio mix, but offset by SG&A reductions and operational efficiencies.

• First half of 2025 anticipated to be more challenging, with improvement expected in the second half as inflation peaks and then declines.