Sendas Distribuidora (ASAI3) Q2 2024 earnings summary

Executive summary

• Revenue reached R$19.5 billion in 2Q24, up 10.9% year-over-year, driven by new store openings, improved same-store sales, and strong customer growth, with a milestone of 79 million customers.

• EBITDA margin (pre-IFRS 16) rose to 5.4% in 2Q24, reflecting store maturation, operational efficiency, and robust cash generation.

• Net income (pre-IFRS 16) was R$165 million in 2Q24, with a net margin of 0.9%.

• Leverage ratio improved to 3.65x in 2Q24 from 4.25x in 2Q23, supported by EBITDA growth and cash flow.

• 24 new stores opened in the last 12 months, with 10-15 more planned for 2H24, aiming to surpass 300 stores by year-end.

Financial highlights

• Net revenue: R$17.9 billion in 2Q24 (+11.8% YoY); gross margin at 16.5% (+0.3 p.p. YoY).

• Adjusted EBITDA (pre-IFRS 16): R$965 million in 2Q24 (+18.4% YoY); margin at 5.4%.

• Operational cash generation over two years totaled R$7.6 billion, funding 88% of expansion investments.

• Net profit for 1H24 reached R$258 million, despite higher financial expenses and subsidy rule changes.

• Cash and cash equivalents totaled R$6.9-7 billion at quarter-end, up 33-34% year-over-year, boosted by debenture issuance.

Outlook and guidance

• 10-15 new stores to open in 2H24, targeting over 300 stores by year-end.

• Leverage targeted below 3.2x by end-2024, with a mid-term goal of 2x.

• Focus on sustainable growth, store maturation, and value creation for shareholders.

• Expectation for a more positive second semester, with stable inflation and continued focus on margin and cash generation.

• Largest anniversary campaign underway, aiming to expand customer base and engagement.