CVC Brasil Operadora e Agência de Viagens (CVCB3) Q3 2024 earnings summary

Executive summary

• Achieved positive net income of R$14.4 million in 3Q24, the first after 20 quarters, with a BRL 340 million improvement in the bottom line over nine months and strong operational cash generation of R$118 million, matching 2019 levels.

• Opened a record 90 stores in 3Q24 (72 in Brazil, 18 in Argentina), totaling 191 in 9M24 and 250 since June 2023, with expansion focused on smaller towns and new store models.

• Double-digit B2C growth and B2B returning to growth, with exclusive products share in CVC Lazer reaching 19.5% of boardings.

• Strategic focus on expanding exclusive products, alternative financing, phygital sales process, and franchisee confidence in Brazil and Argentina.

• Completed debenture renegotiation, improving financial flexibility, extending payment terms, and reducing debt costs; Fitch Ratings assigned a BBB rating with a stable outlook.

Financial highlights

• Adjusted EBITDA reached R$124.7 million in 3Q24 (+29% to 30% YoY), with a consolidated margin of 34% and Brazil at 38%.

• Net income of R$14.4 million in 3Q24, reversing a BRL 87.5 million loss in 3Q23.

• Operating cash generation of R$118 million in 3Q24, an improvement of R$209 million YoY, matching 2019 levels.

• Net debt reduced to R$433.7 million, with leverage at 1.2x Net Debt/EBITDA (LTM).

• Net revenue was R$363.8 million in 3Q24, down 3.2% YoY, but up 3.7% for 9M24.

Outlook and guidance

• Expect continued net debt reduction, driven by EBITDA growth and working capital improvements.

• G&A expenses targeted to grow no more than inflation, aiming to reduce G&A as a percentage of net revenue to near 40%.

• B2C growth expected to accelerate in Q4 and Q1 2025, with sales expenses maintained below 2% of bookings.

• Strategic plan for 2025–2027 focuses on technology, price competitiveness, core business reinforcement, and niche market expansion.

• Management remains confident in growth potential and strategy execution, with plans to expand the franchise network in Argentina.