PBG (PTBL3) Q2 2024 earnings summary

Executive summary

• Net revenue grew 7.3% year-over-year in Q2 2024, reaching R$589 million, with all business units and geographies contributing and market share gains in Brazil and international markets.

• EBITDA increased 44% to R$91.5 million, with margin improving to 15.5%; net loss narrowed to R$11.5 million from R$38.3 million in Q2 2023.

• Operations grew by 20.4% year-over-year in Q2 2024, with total sales volume up 18.8% in H1 2024 and market share gains in both wet and dry processes.

• CapEx investments dropped 64.8% to R$44.7 million, mainly focused on new stores and strategic projects.

• International markets contributed 22.6% of total revenues, with Portobello America showing strong growth despite a challenging US market.

Financial highlights

• Gross profit was R$215.1 million in Q2 2024, stable year-over-year, with gross margin at 36.5% (down 2.6 p.p.).

• EBIT increased 65.7% to R$47.9 million; adjusted EBITDA was R$69.8 million (+12.4%).

• Operating expenses reduced to 28.4% of net revenue from 33.8% in Q2 2023.

• Working capital cycle improved by 18 days compared to Q2 2023, with working capital falling 25.5% to R$252.1 million.

• Share price ended Q2 2024 at R$4.68, with market value of R$659.8 million.

Outlook and guidance

• Gradual market recovery expected in 2H24, though impacted by slow interest rate reductions.

• Focus on operational excellence, disciplined management, and maximizing recent investments.

• Portobello America to advance ramp-up of sales and manufacturing, targeting profitability.

• Portobello Shop aims to accelerate growth, expand B2B sales, and optimize pricing/product mix.

• Net leverage expected to decline further; continued improvement in profitability and cash generation anticipated.