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Good morning. Welcome to Grendene S.A. audio conference to disclose and analyze the results for the first quarter of 2021. We inform you that this audio conference will be held in Portuguese with simultaneous translation into English. [Operator Instructions] Please note that this conference call is being recorded and will be made available at http//ri.grendene.com.br.
Grendene's main executives are present here and will also be available to answer questions. Rudimar Dall'Onder, CEO, Gelson Luis Rostirolla, VP; and Alceu de Albuquerque, Director of Investor Relations as well as the company's main managers. We informed that the press release for the first quarter of 2021 is available at the website, ri.grendene.com.br in Portuguese and English versions.
Before proceeding, I would like to clarify that any statements made during this conference call regarding the operational and financial prospects and estimates of the company's business are mere forecasts based on management's expectations regarding the company's future. These expectations are highly dependent on market conditions, the general economic performance of the country, the industry and international markets.
Now I would like to hand the floor to Mr. Alceu Albuquerque, the company's Investors Relations Officer. Please, Mr. Alceu, you may proceed.
Good morning. Welcome to our first half of 2021 earnings release audio conference call. I would like to inform you that all the information regarding our first half was released yesterday after the market close on our Investor Relations website. We also have posted an additional file called audio conference -- called presentation to help you to easier follow this conference call.
As usual, before we get into the performance discussion, I would like to draw your attention to the dividend distribution. In accordance with our current dividend policy, the management proposes the distribution of dividends relative to the first quarter of 2021 as an anticipated dividend in the amount of BRL 81 million ad referendum of the Annual General Assembly that approved the accounts for the fiscal year 2021, paid as of May 19, 2021, to shareholders holding common shares.
GRND3 registered in the company's record on May 10, 2021 as a cutoff date. Therefore, they're entitled to receive the dividend. Thus, Grendene's shares will start trading ex dividend as of May 11, 2021, on the third quarter.
Well, now get into the performance for the first quarter of 2021. I'm pleased to share with you that Grendene had an excellent first quarter even in the face of this challenging scenario that we are all living caused by the second global wave of the pandemic, demonstrating also to be, in some countries, the third wave. Our first quarter of 2021 was the best first quarter in the last 3 years in gross revenue, net revenue, volume, gross profit, EBIT and net income.
On Slide 5, of the presentation, which we had just posted in our Investors Relation website, where we presented the main highlights of the first '21 quarter. As you may follow, our gross revenue grew 43%, amounting BRL 644.3 million, while the volume of pairs shipped advanced 36.2%, amounting 35.4 million pairs. It was the second first -- it was the second best first quarter in our history in terms of gross revenue, just lower than that recorded in the first quarter of 2018 when gross sales reached BRL 663.8 million.
Recurring EBIT grew 162% in comparison to the first quarter of last year, reaching BRL 103.8 million -- BRL 106.8 million, which represents a recurring EBIT margin of 19.8% in the first quarter. Recurring net income showed an even more expressive advance with a 343% (sic) [ 334% ] growth compared to the first quarter of 2020, with a total of BRL 131.7 million, which corresponds to a recurring net margin of 25.2%.
Now on Slide 6, we present a more detailed breakdown of third quarter's numbers. In the domestic market, gross sales and the volume of pairs shipped grew 37.3% and 33.9%, respectively, in relation to the first quarter in 2020, reflecting the increase in gross revenue pairs of 2.5%.
As shown on Slide 7 of this presentation, the BRL 128 million increment in gross revenue in the domestic market comes from the volume increase, which has impacted around BRL 116.5 million of our gross revenue, and from the price adjustments ended in October '20 and February '21, which added another BRL 52 million to our gross revenue. The mix of products shift contributed negatively to the gross revenue, reducing it by BRL 40 million in our domestic market.
The nominal growth in gross revenue pairs of BRL 0.43 in the domestic market, that is a result of the above-mentioned readjustments which increased gross revenue in BRL 1.90, while the mix of products shipped had a negative impact of BRL 1.47 in gross revenue per. There is that BRL 0.43 gross revenue in the domestic market. This is a consequence of the granted -- readjustments granted last year, October, and this year, February. Whereas the mix of products shipped in the domestic market had hindered our indicator in BRL 1.47 in gross revenue pair.
The positive performance in the domestic market was driven by the significant growth of the self-service and in direct channels as they remained open throughout the whole quarter or almost throughout the quarter. As this channel, historically speaking, they demand more accessible products, a mix of products, they ended up impacting the mix of products shipped, as I mentioned before. In terms of segments, the Ipanema line of products, the Pega Forte boots. And the men's lines, represented here by Ryder and Cartago, they had a very meaningful participation in the indirect and self-service channels.
Now let's address our external markets, international markets. Gross revenue and the volume of pairs shipped to the foreign market advanced 61.3%, that was an advancement in our gross revenue; and shipped pairs increased 44.6%, respectively, compared to first half of last year. Such a strong performance reflects 3 main factors.
First, the absence of revenue in the second half of March last year due to the first wave of the pandemic, the closure of ports and the rescheduling of shipments due to the closure of port or also due to postponing some shipments asked by our customers who order such a postponed. Changes in commercial management and channels, facilitating the entry of new distribution partners in several markets and increasing the number of countries of destinations of our exports. And last but not least important, the devaluation of the real currency against the dollar, which makes our products even more competitive to our -- to the international market.
Gross revenue per pair in BRLs, in reals, in the foreign market grew 11.5% in the quarter as a result of the exchange of the valuation that positively impacted this indicator, which is the gross revenue per pair in reals, while the mix of line of products exported. And the price in dollars had a negative impact, as shown on Slide 7 of the presentation. As in the previous quarter, the third quarter of last year and the fourth quarter of 2020, shipments to Latin America led the volume of shipped pairs.
Last year -- since last year, Latin American countries, they require more accessible products, less expensive products, I mean. Melissa, like our other product line, has also showed growth in the quarter. In the domestic market, gross revenue from sell-in grew 5% and the volume of shipped pairs decreased 1% in the quarter in comparison to last year. The mix of products sold and the price adjustments granted in October 2020 and February this year contributed to the increase in gross revenue per pair in the domestic market.
Now addressing domestic market, Melissa's -- in the external international market, [he corrects himself], Melissa's performance in the foreign market was very expressive, with a 28% growth in volume of pairs and 35% in dollars and 66% revenue in BRL when compared to last year's first quarter.
Now let's address Grendene's consolidated numbers. The net revenue of the first quarter reached BRL 333 million, that is an advancement as shown in our slides that were posted yesterday in our presentation. As we've shown before, for Slide 9, gross profit grew 54.1%, totaling BRL 236.2 million in the first quarter '21. It corresponds to gross margin of 45.1%, 3.9 percentage points higher than the gross margin of the first quarter '20.
In this quarter, we maintained our focus on containing operating expenses. At the same time in which we capped on investing in our businesses, especially on digital businesses. As a result of focusing on controlling expenses, our operating expenses based on percentage over net sales dropped 5.2 percentage point over the first quarter '20.
Financial result was BRL 56.2 million (sic) [ BRL 52.6 million ] higher than what we obtained in first quarter '20. It is concerning lower average CDI in the period. The result of foreign exchange operations aligned to the gains of our variable income portfolio and the investments in real estate development projects were the main responsible factors for the financial result in the quarter. Cash generation in the first quarter of this year amounted to BRL 197.4 million. As a consequence, we ended the quarter with cash over BRL 2.2 billion, maintaining a very solid financial position.
Now that I've talked a little bit about quantitative results of the first quarter '21. I would like to address now our qualitative results as well. In the first quarter '21, we continued to reap the fruit of our actions focused on sustainability and ESG.
To Grendene Kids, we supported UNICEF educational projects, ensuring access to education for over 111,000 children since the beginning of our partnership, which started in April last year. We have reduced energy consumption per pair manufactured by 18% over the same period last year. We have reduced by 32% water consumption per pair manufactured over the first quarter '20.
Throughout the first quarter of 2021, we produced and donated about 1.5 million protective item for health and safety. And that all distributed as PPE to different professionals. We have donated over 5.9 million personal protective equipment and it has really reinforced our goal as a corporate citizen.
Now continuing with the digital transformation strategy, which started in 2019, we concluded in February this year, when we had the final migration of online stores of Melissa, Grendha and Cartago, and we concluded the internalization of e-commerce of all our brands. System migration, all of the lines, have recorded significant growth compared to the same period last year.
If we take into consideration only the performance of the stores that had already migrated at the closure -- at the end of the fourth quarter '20 all the proprietary brands, so stores that had already been managed by us when the year ended last year, the growth we've observed in this online stores exceeded 350%. Let me give you an example. Ipanema had online sales, which grew more than 900% when compared to the first quarter '20.
In addition to observing significant growth of our online businesses, we have also expanded the team dedicated to digital commerce. Currently, we have over 70 people, and we also want to expand further this number in upcoming months. More relevant than the growth of the team, which is fully dedicated to digital commerce, we have also changed the team's mindset, which is part of the dissemination of digital culture within Grendene. And the search for professionals, we already have this new digital mindset.
Still concerning our digital businesses, we opened in Fortaleza, our second distribution center which is fully dedicated to all e-commerce. Currently, if we add our 2 distribution centers together fully dedicated to online or e-commerce, the one in Sobral and the other one in Fortaleza, we amount to 1,800 square meters where we can store over 175,000 pairs to be sold to our online businesses. The next step in Grendene's evolution in digital is the insertion of our products in the main marketplaces of the market.
Now that I have already reinforced our quantitative and qualitative results, I would like to close by reinforcing positive perspective that we have for the year, especially for the second half, to which we have expectations of economic reopening. In the very short term, the indicators yet to be released will confirm that the second wave of the pandemic has negatively affected economic activity in March and in April this year, which had already started to get some recovery since the third quarter last year.
In May, activity will also be impacted, but to a lesser extent. We hope that the second quarter '21 will be probably the worst of the year, just reflecting the peak of cases of coronavirus observed in March and April of this year here in Brazil and worldwide. Because of that, new social isolation measures and social distancing were adopted. The stores were closed and the government-mandated some reduction of circulation of the population.
But once restrictive measures are being released, and I hope we have a gradual reopening of stores. We have more people out in the street. We once again have a return of an emergency aid and support offered by the government as well as vaccination, all of those elements show towards a recovery of the economic activity, especially as of the second half of the year.
With that, I close my presentation confirming what I wrote in our press release. As vaccination evolves in Brazil and abroad and as consumers get confidence again on the market, we are positive that we are going to be able to emerge from the pandemic even stronger as a company. Maintaining our sustainable growth that Grendene has experienced throughout the years. Thank you very much. That was my presentation. And now we can open for the Q&A session. Thank you all very much.
[Operator Instructions] The first question by Mike Nicholas, GarÃn Investimentos.
Congrats on the excellent results. Let's just speak about the worsening of the pandemic curve in March and April. Can you please update us on the placement of new orders during this month? And can you please tell us about the cost of raw material for production?
Thank you for the question. As we have already explained in previous conferences. Grendene works with production based on placed orders. In April and May, for example, we are starting to sell for the prices of June, what's going to be invoiced in June. April and May has already ended, all the orders placed. We have observed some reduction of demand for products because of the increase in number of infected cases, and because the population also could not leave home because of social distancing and also because the stores were closed.
In March this year, 64% of the stores were closed. In April, there was 50% of all stores closed throughout Brazil. And footwear, we know that 55% of sales of footwear are from stores -- street stores, so we expect to see a decrease of sales in March and April. And for June, there has been a gradual reopening of the stores as some of the case of the cases seem to be dropping.
The second quarter will probably be the one with the highest negative impact of the year. Well, we prefer to have the second quarter as the worst quarter because from a season perspective, it tends to be the one where we sell the least. But we have a very positive perspective for the second half of the year. And in June, for example, we have already observed an increase in number of orders placed compared to May and April.
Now concerning raw material, they kept on increasing. In the first quarter, we had the expectation that the numbers would get just to normal levels. But because of scheduled shutdowns of manufacturers, especially of resins and they are foreign manufacturers, there was a storm that hit part of the United States where a number of resin manufacturers had to declare force majeure. But we expect that supply and demand of raw materials, primarily of resins, will get to a good balance back again in the second half of the year. We expect to have prices going down to the end of the year, just getting back some of them to the levels of before the pandemic.
Well, if there are no further questions, we now close the Q&A. And now I would like to hand it over to Mr. Alceu de Albuquerque for his closing remarks. Mr. Alceu, you can please now draw your conclusion.
Okay. He dropped from the call, and he will resume shortly. Please hold.
I apologize, my line dropped. Well, we know how things are today. I would like to thank all of you for being here with us. Our IR team is at your disposal for any further clarifications you might need by e-mail or by call. Please contact us if you need anything. Thank you all very much, and have a great day.
The conference call of Grendene has closed now. Thank you all very much for your participation. Have a good day, and thank you for using Chorus Call. Thank you.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]