Raia Drogasil (RADL3) Q4 2024 earnings summary

Executive summary

• Ended 2024 with 3,230 pharmacies after 300 openings and 23 closures, expanding to 619 cities and all Brazilian states, and increasing market share to 16.5% (+0.3pp year-over-year).

• Gross revenue reached R$41.8 billion, up 15.1% year-over-year, with mature-store growth of 6.5%.

• Digital sales surged 41.7% to R$7.1 billion, with 20.2% retail penetration in 4Q24 and 75% of digital orders via proprietary app.

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

• Leadership transition: Renato Raduan appointed CEO, succeeding Marcilio Pousada, with a focus on continuity and new strategic priorities.

Financial highlights

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

• Gross margin was 27.7% for the year, down 0.3pp, impacted by tax changes (PIS/COFINS) and mix effects from 4Bio.

• Selling expenses were 17.4% for the year, with G&A expenses diluted to 3.1% of gross revenue.

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

• Net debt/EBITDA at 1.1x, with strong cash cycle management.

Outlook and guidance

• Plan to open 330–350 new stores in 2025, focusing on organic growth, customer centricity, and profitability.

• Expect to sustain or improve profitability despite macroeconomic and regulatory headwinds, with a focus on expense efficiency and digital expansion.

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

• Integration of Vitat into core business and acceleration of high-margin digital initiatives.

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