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Good morning, everyone. Thanks for waiting. Welcome to the video conference to spread the results of the third quarter of Grendene 2021. [Operator Instructions] We inform that this video conference is being recorded, and it will be available in the website of the company where you can also find the complete material of this conference. It's possible to download the conference in the chat icon. [Operator Instructions] We highlight the information in this presentation and all the declaration during the video conference related to the perspectives of businesses, projections, operation targets of Grendene belongs to the administration of the company.
Also, the available information, they involve risks, uncertainties and premises, and they reference future events, and they depend on circumstances that may occur or not. Investors must understand that market conditions, financial conditions and other operational might hinder the future prospects of Grendene.
Now I'll give the floor to Alceu de Albuquerque, the Director of Investor Relations of Grendene.
Good morning, everyone. Thanks for being here in our video conference to share our results. I hope everybody is fine and in good health.
Before we start with the numbers, I would like to talk about some highlights on the third quarter. Firstly, the partnership we had with the Radar company to build Grendene Global Brands, a JV that will exploit the international market footwear. It will reach $300 billion in a market where Grendene will have a participation of very low presence. The idea was to align this excellence of Grendene in the manufacturing and production of footwear with the culture and the management of Grendene, with the capacity of the Grendene to attract and retain talents of high performance. We also want to wide to our investments, people, brands and platforms of distribution, especially in the digital, which is our plan to approach Grendene of the final consumer, bringing better experience -- purchase experience and building a higher loyalty with our consumers. And with all that, we expect to generate more revenues for our shareholders.
If today, for example, we have a sell-in of $300 million, we want to reach $500 million. We want to increase our sell-in for exports. Additionally, another results that we expect is to participate of the results of the distribution. Nowadays, Grendene export products for distributors, and the result is with the distributors. Now we want to participate part of these results. And we also want to be a global platform of consolidation in a market that's very fragmented and very, very huge.
Given our experience -- our partner's experience in this activity of global consolidation, you can see a lot of opportunities arising. We had a very positive return from our distributors. All of them understood as positive this initiative because they understand how the investments in the international area of Grendene will be -- will grow, and the strengthening of the trends will be even stronger.
So our second communication -- or second result in our third quarter [indiscernible] was the new factory we built involving an investment of BRL 30 million. This company has the objective to attend to the demand for products, EVA products, that have a very high demand lately. So this factory will increase our capacity for 500,000 pairs per month and we will generate 1,000 new jobs. And currently, we have [ many collaboration ] projects to later on be approved and to initiate the construction in the beginning of the new year and to have the new factory in the end of 2022.
We also would like to communicate the widening of our fiscal initiatives in our unit in Ceará State in Sobral and Fortaleza. So this is new benefit has been -- has a new deadline into October '21 until -- from then to October 2022. We also widened the benefits for 80%.
Now talking about digital transformation, we are still involved in our initiatives, internal initiatives, and we are showing some results in the third quarter. The GMV, and we use -- we have used the concept of GMV that is used in marketplaces, but we've been using it because, as regarding our initiatives of communication, our website, Melissa, allows the consumers to purchase from our online website and go to the store. So to capture this impact of the omnichannel, we are using the GMV concept. It grew 27% compared to the second quarter of 2021, and it's considered. And in the third quarter, we have a growth of GMV.
The e-commerce of Melissa grew 128% when compared to the third quarter of last year. Our client base grew 22% as regarding our second quarter this year, and 95% of these clients made their first purchase. The number of sessions increased 13% as regarding the third quarter, reaching 9.3 million sessions.
As regarding the omni initiatives, we increased 167% increase in ship from store compared to 2020. We have orders for 120 (sic) [ 190 ] Melissa Clubs. Showroom modality or [indiscernible] shall -- it has been implemented in all our Melissa Clubs. Ship from store is active in 280 stores and pick up from store is in testing. We also have foreseen rollout for November of this type of business in this model.
So our next actions as regarding digital are to integrate with the main marketplaces in the market. We have started with Magalu. We are going to have the Netshoes, Zattini, Mercado Livre and Dafiti. We also have in our radar the e-commerce -- the Melissa e-commerce in Europe. And the general objective is to stay in the business. We wanted to [ manage ] our stores to make it happen. And our objective is to speed up our results of our initiatives, our online initiatives. And the main initiative for that is to implement the flow of consumers to our stores, to increase this flow because we have a conversion rate that's really positive. For example, now in the third quarter, we had a conversion rate, average conversion rate of 92%, which is a very attractive rate.
Talking a little bit about sustainability, we had excellent results in our -- with our SMETA auditorship that generates a report, which evaluates the practices of the company and the supply chain as regarding work conditions. We also have the recertification of ABVTEX with the Gold Seal, and we conquered the Silver Seal in the Brazilian program GHG of protocol (sic) [ Brazilian GHG Protocol Program ], the first publication that will talk about GHG gases.
We also have a new partner to our reverse logistics. Now besides Club Melissa points to collect to pick up Ipanema shoes, we also have a partnership with C&A where 30 selected stores from C&A, we are going to receive Ipanema products for reverse logistics. We also launched the line Melissa Free, which is the first monoblock -- Melissa monoblock that has a sustainable motto. It contains materials from renewable sources, from sugarcane. It impacts the environment 20% less when compared to other models of shoes, other styles.
Talking about numbers of the third quarter, talking about the dividend distribution. The Board proposed to approve the accounts of 2021, the distribution of BRL 124 million (sic) [ BRL 134.7 million ] of dividends to be paid from 24th of November. And the action will be deal (sic) [ trade ] ex dividends from 8 November 2021 onwards BRL 0.15 per action (sic) [ share ].
Now starting with the numbers of the third quarter, we achieved BRL 18 million (sic) [ BRL 818 million ] of gross revenue. It's the largest gross revenue of a third quarter of Grendene, the greatest historic result. Thus having -- in [ 300 ]. It dropped 70% due to the large basis of comparison in the third semester of the previous year, remembering the previous year, the production of the company hindered -- which hindered us to ship the product.
As I was saying, we had the interruption of the received products. The products were then shipped along the third and fourth semester of next -- of the following year. So the base of comparison is very high.
If you compare it with the third quarter of 2019, we have shown a growth in number of pairs shipped. The EBIT -- the current EBIT achieved BRL 300,000. It was a drop in 60% in the previous third quarter. This EBIT recurrence of [ 18.5% ], and the recurring revenue reached BRL 136.4 million with a growth regarding liquid margin of 23%.
Regarding the EBITDA, our EBITDA margin in the third quarter reached 21% and then putting us in the top of the shoe industry in Brazil.
As I commented, we reached BRL 280 million (sic) [ BRL 208 million ] in revenue, a growth of [ 25% ]. The internal market had shipped [ 633 million ] pairs and a growth of 1.2%. And the external (sic) [ international ] market shipped BRL 155 million, growth of 32.2% regarding the third trimester of last year.
Our gross margin -- gross revenue dropped 0.5 percentage in regards to the strong pressure of costs that came from gross (sic) [ raw ] materials, as we have seen. So this is a scenario that -- a global scenario of the production -- international production chains are suffering. So therefore, the raw material increase in cost 2 points -- 2.4 percentage in the face of the liquid net sales revenue. We were able to mitigate the high impact in -- due to the gain in productivity with labor, which dropped 3.5 percentage regarding the net sales revenue and other cost of manufacturing, in which we gain also 0.5 percentage in regarding the liquid -- the net sales revenue.
Our operational costs grew 2.7% (sic) [ 13.7% ], mainly in regards to publicity, commercial expenses and expenses with the team of the level of the structural commerce. In this way, our recurring EBIT reached BRL 126 million, a drop in 6% and a margin of 18.8%. And now net revenue reached BRL 208 million with a nonrecurring effect of BRL 77 million, which I'm going to speak about further along. And the recurrent profit reached BRL 166 million, a high of 15%.
Here, I saw the effect in the gross revenue. So the volumes of pairs shipped both to the internal domestic as well as the foreign market was -- had an impact of BRL 132 million negatively in the gross revenue, but the mix of import lines had a positive impact of BRL 62 million. And the price of the product shipped had an impact of BRL 121.2 million. They contributed to the growth of the gross revenue.
The exchange rate impacted negatively in this quarter comparing to the previous quarter due to the average exchange rate has been 2.8% lower than the third quarter exchange rates.
The EBIT, as I commented, reached BRL 126 million. The gross profit contributed with BRL 14.3 million while the operational expenses contributed negatively with BRL 22.3 million to EBIT. We have then BRL 7.5 million of items nonrecurrent that were listed in the release that we had announced yesterday to you.
The net profit reached -- the recurring net profit reached BRL 136 million, and it was the expression -- I'm sorry, the net profit consolidated reached BRL 208 million. We have nonrecurrent item of tax and social fees that relates to the unconstitutionality of incidence of labor fees in the Selic rate in the repetition of tax rates. So we reached a net profit of BRL 208 million.
Now speaking about our variable portfolio. Today, it is composed of 40%. Here are shares of the Banco do Brasil and then the energy sector, Equatorial Energia and also Eletrobras. We have also positioned in Vale do Rio Doce and in Gerdau company.
Talking about specifically Melissa. Melissa had shown an important performance in the quarter with a growth profit of 42%, higher than the third quarter of last year. And this growth, it helps Melissa to recover part of the space that it lost during the pandemia because of the shutdowns of the malls. Melissa was one of the brands that suffered the most. And now with the opening of the markets, especially the shopping malls, where we have a large amount of stores, Melissa is expressing a recovering -- strong recovery in the face of the third quarter of last year.
So we concluded the quarter with 267 Melissa Clubs in Brazil and abroad. We also have 127 exclusive stores of Melissa and -- of which 35 already are in the new Melissa format.
Here to the side, we show a little bit the representativeness of each channel in the sales of Melissa. E-commerce accounts for 4.1% of the sales. The exclusive and clubs, the [ service starts ] and clubs account for the largest share of our sales, 60%. The multi-brand stores, 20% and the Melissa galleries in Sao Paulo, New York and U.K. that recently we closed, 0.3%.
Other highlights of Melissa in the quarter was 2 collabs, the first conducted with the brand Zee.Dog, which was the first collab of Melissa with a pet brand. And it was a great success, this collab. We had -- we sold out the pet accessories in the first 48 hours. And another collab, highly successful, was with Camila Coutinho. She's an influencer and businesswoman, and the items of that collab were among the greatest sales of the third quarter.
Concluding the number of the third quarter, now we're going to speak about the yearly numbers. Our gross revenue reached BRL 1.9 billion, a growth of 45% regarding the same period in the last year. The volume of pairs shipped reached 102.8 million of pairs, 23% higher than last year's. The recurring EBIT reached was 65% higher, reaching BRL 239 million. And our net profit increased 104%, reaching BRL 307.6 million.
Here, again, I enter into the detailing of the numbers in the domestic market. Our gross revenue grew [ 22.9% ] in the first months and 71% in the foreign market. Our gross margin remains stable in 42% (sic) [ 44.2% ] .There's a slight drop due to the cost of raw material. And once again, we will notice in CPV the gain in productivity with labor and other manufacturer expenses.
We had a positive drop in our operational expenses, which then represent 28% of -- in comparison with the 38% in the previous year of the net revenue.
In this year, we are seeing an increase in 17.9% of the shipping and in the domestic market, sorry, 15.2%. the gross revenue had increased. In the foreign market, the gross revenue par increased 27.9%. And in dollars, we had a growth of almost 22%. This growth in the gross revenue pie is the expansion of the yearly accumulation and in the third quarter due to a mix of more added value of sales, especially in the third quarter due to Melissa that had shown a performance, very high, and also due to the heightening of prices because of adjustments that we had last year. One was announced in October and executed as of November, and one was announced in February of this year.
Now I'm going to talk about a question that they have asked me because we saw an increase in the cost of raw material, as I commented. And also in the last meeting of second quarter -- second last semester, I mentioned that as of May, we saw a drop in the cost of raw material, but this drop it remained until August or in beginning of September. Now we had a series of events such as like Hurricane Ida in the United States that -- in which the raw material, which is PVC resins were harmed. Then we saw the lack of containers, the increasing cost of natural gas in Europe, a series of factors that had brought the trend of reducing the raw materials' price that remained from May to August. As of September, we start noticing that there was a recovery in the prices of these raw materials.
So for the end of margins compositions, just like other companies have announced, we will have readjust of prices from January onwards to increase our margins. And we have communicated our clients differently from other occasions when we communicated we have -- now this time, the announcements are -- were very well understood by our clients. They understood that, yes, the inflation has been splitting up, and it's mandatory to readjust the prices, increase the prices.
Here, I'm going to talk about the gross revenue. It grew because of volume, mix and price. I'm not going to talk about the EBIT and the waterfall graph. It will be available in the presentation that's available on the website. But to -- I'm just going to be more objective, I will just open to questions and answers regarding the semester, third semester.
[Operator Instructions] Let's start with our first question from [ Hernan Santori ] from Bradesco.
Congratulations for your results. I would like to ask you, beside the BRL 100 million invested in GMV, do you have many other investments that will be done? Any predictions for that?
And my second question is, we can see investments of variable income having a negative impact on the financial results. Do you think on decreasing or it will remain the same?
As regarding the first question, your question is regarding CapEx in the GMV. There must be a CapEx from Grendene going to GMV. As we said in audio about JV, CapEx for JV initially is $50 million initially according to the participation of every party. As we have 49%, it will be very close to $25 million. There are other $50 million for both parties. In case the council of GMV asks us to, the total investment foreseen for -- it's up to $100 million in total of the 2 parties and being the equivalent, the participation of every party, but initially, in November, the initial we will give the initial $25 million.
As regarding your second question, our position in variable income is a position of long term. We buy solid companies that pay well their dividends, and our objective is to keep these companies in our portfolio for a long term and capture its valuation in the long term.
Next question is from Wagner, an analyst from Quantitas.
Two questions regarding Grendene Global Brands. Is there any additional information that you have mentioned? Anything new to tell us? Besides those you mentioned in the conference, do you have any new names on the team to talk about?
And my second question is considering all the integration between the Grendene teams in the joint venture, I would like to know if you somehow can identify new initiatives that may arise for new businesses, mixing internal and external markets with the opportunities that have been mapped and they are rising. If beyond that, the focus abroad, if you have any other opportunities in the internal market have arrived, have appeared and then if something else will come up.
Good question. Focus now, Gustavo's and Andrea's focus now internally is to guarantee a transition as smooth as possible. We would like to give the management of the operations in United States, Canada, China and Hong Kong for GMV in the best way possible, in a smooth way. We are always in contact with their team, especially with Gustavo and André.
They are setting up teams now, choosing teams. They have a few names now of people with high skills that are coming from Nike or Crocs. I know that they have names of people with a lot of experience in the market, in the international market in the construction and strengthening of brands and digital channels. So at this time, they are restructuring and closing deals with these people to run the business.
As regarding your second question, with this disclosed relationship with Gustavo and André that know a lot what InBev has done in the past few years, and they know their structure a lot. A few opportunities are arising, are coming up and we have been mapping the possibility to implement them. And this is one of the expectations we used to have when we started this partnership, not only increasing our selling and our presence abroad, but also to have a benchmark and an exchange of experiences between the parties.
So I think so, yes, we have a few things that are mapped that we have been exploring and certainly, new ones will come during this time.
Next question is from Victoria. She's a journalist from Broadcast [indiscernible].
Here is Victoria from [indiscernible]. I would like you to talk a little bit about -- again, about Melissa's growth, how is it going to be, this projection for next year? You're going to -- you mentioned that you're going to increase prices.
In this phase, Victoria, we are still setting up the budget for next year. What I mentioned about the prices is because raw materials -- not only raw materials, but all the categories have high rates. And since our last increase in February, the raw materials are still increasing in a significant way. So to be able to readjust our margins to compose them again, and we have to -- it's not just to readjust the margins that we have to take into consideration. We also have to take into consideration the mix of products. So we have many variables that will compose the margin.
But considering, for example, an ex-scenario for maintenance of margins, we have announced, we have communicated our distributors of all lines of shoes that there will be readjustments from January onwards in our products just to recompose our margins and our clients, representatives, distributors who are completely understanding to understand the needs of this readjustment. Other companies have done that in the past, and we have only done that in February, and we are assuring that we are gaining productivity, workforce. But at this moment, we will have to readjust prices -- to adjust prices. And it was calculated to be a minimum possible increase to avoid the -- an impact in our sales.
As regarding the new factory, it will be constructed in the beginning of next year, and the provision is to be finished in the end of the year?
Yes, exactly. We have been doing projects at this point. They need to be approved by environmental institutions and agencies. After this approval, we will start construction works. Our projection is for the end of January, beginning of February 2022 and completion of the works in the end of the third quarter of next year.
It will increase productivity in 500,000 pairs? Is that right?
Yes. EVA components and products is this factory is what they will meet these demands because we have a lot of demand for EVA components and products because all our technology of EVA is located in Crato. It makes a lot of sense to us to increase that unit where all the expertise and technology is already located.
[Operator Instructions] Next question comes from Wagner from Quantitas.
Also, you have talked about margins and adjustments of prices for next year's. I would like to know your vision about the third quarter because from October, it seems to be a very positive month for the sales of clothes and footwear. So what can you anticipate to us for the fourth quarter? As regarding margins, do you have anything regarding that?
As regarding the fourth quarter, we are very optimistic. But in the past 30, 40 days, the intensity of our optimism went down a little bit because of the acceleration of the inflation. And we are also observing that it's maleficent inflation. It's fuel, food and electric energy. And people with low income, they cannot get rid of being affected by these factors. So we are very optimistic but a little bit less than before. We believe our scenario for the fourth quarter will materialize, will come to reality. Our directors will have to make a lot of effort to work on that.
As regarding Melissa, Melissa has a bit of a better scenario. We have seen not only in footwear, but also in different sectors, class A -- products available for the class A, they have queues, the demands are very high. But products for plastic, people -- the demands have decreased a little bit because of the inflation and the current scenario. So we will do what is foreseen in the fourth quarter. We have orders now, but especially for the brands focused on the lower class of low-income population, we are a bit less optimistic.
I don't have numbers. I don't have figures of any month so far. So it's difficult to say anything. But we have seen previously resin prices increasing in October. We have expectations to -- that they decrease. We also have expectations that, that would happen on the fourth quarter. But now we think it's going to happen in 2022.
I know also you don't talk about products -- you don't disclose this information. But as regarding Melissa, you mentioned it's doing well, doing good. When you have a higher relevance in the portfolio, does that impact positively in gross margins? Can it be explained on the third quarter or not? In general, are the brands going to dilute themselves and they are not having an evolution that's [indiscernible]?
As I said, Wagner, we don't open this type of information by brand. But Melissa has a huge representativeness in our portfolio, it's really important. It represents higher margins.
It has superior growth, higher growth. And when I say that it had a high performance, I'm not saying that it's growing a lot compared to what we used to have. It is important to say that Melissa is recovering its resumption in the shares it used to have in our portfolio of brands that Melissa has lost it throughout last year, especially because of the shopping malls being closed with the pandemic, where we have most of the Clube Melissas located.
So Melissa has lost its space, and it has been regaining space again. Of course, it will help us to recover margins and gross revenue, but it's not what is going to make all the difference. It's -- Melissa is going to help, but it's not what's going to make the whole of the difference.
My last question, when you look at GMV estimates, what kinds of products and portfolios and expectations abroad? Is it a similar portfolio to the one the company has now? Or is it a portfolio with more sales of Melissa or other products? Because we would like to understand that the growth abroad -- is it going to be similar to be as it is here?
We will focus on all the brands. But initially, we believe Melissa will -- the growth will come with Melissa because of the recognition of the brand in these markets, focus is on all the products. But yes, we do believe that Melissa will be a little bit more present in that way.
[Operator Instructions] We would like to give the floor to final considerations of the company. Thank you.
So guys, thank you very much for your presence in our video conference. The first video conference historically done. We always -- we used to do audio conferences. This is the first time with the video. I hope I have helped you. We are available, us, with people from [ RE ] are available to clarify any of your questions. Have a good day.
The video conference regarding results of Grendene is finished. The department of relations of investors is available to answer any other questions you might have. Have a good day.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]