SIMPAR (SIMH3) Q3 2024 earnings summary

Executive summary

• Gross revenue reached R$11.9 billion in 3Q24, up 29% year-over-year, with net revenue from services at R$8.4 billion (+26%), driven by organic growth and operational efficiency.

• EBITDA hit a record R$2.7 billion (+30% y/y), margin improved to 32.1% (+0.9 p.p.), and net income rebounded to R$125 million, reversing a prior-year loss.

• Strategic reorganization will focus Vamos Locação on rentals and create NewCo, a leading dealership group to be listed on B3, enhancing scale, governance, and capital allocation.

• Leverage reduced to 3.7x net debt/EBITDA (3.4x annualized), with strong liquidity and focus on asset quality.

• Record asset sales of R$2.3 billion (+44% y/y) and significant efficiency gains across segments.

Financial highlights

• Consolidated net revenue reached R$10.9 billion (+31% y/y); EBITDA up 30% to R$2.7 billion, margin at 32.1%.

• Adjusted net income was R$159.9 million, reflecting one-time items; net income at R$125 million, a turnaround from the previous year's negative result.

• Net capex for the quarter was R$1.8 billion, with net investments YTD at R$6.9 billion; net capex/EBITDA ratio at 0.5x.

• Annualized ROIC (ex-BBC) at 12.8%, 4.4 p.p. above cost of debt.

• Net debt at R$38.7 billion, cash position at R$16 billion, average debt term 4.8 years.

Outlook and guidance

• Strategic reorganization expected to unlock value, improve capital allocation, and create two listed leaders.

• Focus on operational efficiency, deleveraging, and extracting value from built foundations.

• Guidance for continued organic growth, margin expansion, and leverage reduction; major segments progressing toward 2026 targets.

• Expectation of lower investment needs and improved cash generation in coming cycles.

• Priority for 2025 is to reduce net debt, with dividends expected at the mandatory minimum.