Raia Drogasil (RADL3) Q4 2024 earnings summary

Executive summary

• Achieved gross revenue of R$41.8 billion in 2024, up 15.1% year-over-year, with 300 new pharmacy openings and 23 closures, expanding to 3,230 stores in 619 municipalities and all Brazilian states.

• Digital sales grew 41.7% to R$7.1 billion, reaching 20.2% retail penetration in 4Q24, with 75% of digital orders via the proprietary app and 49.1 million active customers.

• Adjusted EBITDA rose 15.0% to R$3.0 billion (margin 7.2%), and adjusted net income increased 16.6% to R$1.29 billion (margin 3.1%).

• National market share reached 16.5% in 4Q24, up 0.3pp year-over-year, with the highest consolidated profitability in the sector.

• Leadership transition: Renato Raduan appointed CEO, succeeding Marcílio Pousada, who becomes Chairman.

Financial highlights

• Same-store sales grew 9.0% in 2024, with mature stores up 6.5%, outpacing CMED price increases.

• Gross margin was 27.7% for the year, down 0.3pp, impacted by tax changes and 4Bio mix.

• Selling expenses diluted by 0.1pp to 17.4% of gross revenue; G&A at 3.1%, down 0.2pp.

• Free cash flow was R$188.5 million, with total cash consumption of R$651.4 million and net debt/EBITDA at 1.1x.

• Share price declined 25.2% in 2024, underperforming IBOVESPA.

Outlook and guidance

• Guidance for 2025: 330–350 new pharmacy openings, focusing on organic growth, market share expansion, and IRR above 20%.

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

• Expects to sustain or improve profitability and mature-store growth above inflation despite macroeconomic and regulatory headwinds.

• Anticipates gross margin pressure from lower CMED adjustments and 4Bio mix, but aims to offset via efficiency and SG&A reduction.

• First half of 2025 expected to be more challenging, with improvement in the second half.