Sendas Distribuidora (ASAI3) Q2 2024 earnings summary

Executive summary

• Revenue reached R$19.5 billion in 2Q24, up 11.8% year-over-year, driven by new store openings, improved same-store sales, and a major 50th anniversary campaign.

• Welcomed over 2,000 new employees and 2 million new monthly customers, reaching 79 million customers, up 7 million year-over-year.

• 24 new stores opened in the last 12 months, with 15 more planned for 2024 and over 300 stores targeted by year-end.

• Operational cash generation of R$7.6 billion over two years funded 88% of expansion investments.

• Store conversions delivered 25% higher sales than older stores, with digital engagement through the 'Meu Assaí' app reaching 14 million users.

Financial highlights

• Adjusted EBITDA (pre-IFRS 16) rose 18.4% to R$965 million, with margin up 0.3 p.p. to 5.4% in 2Q24; post-IFRS 16 EBITDA was R$1.3 billion, margin 7.2%.

• Gross margin improved to 16.5% in 2Q24, with gross profit up 13.6% to R$2.9 billion.

• Net income (pre-IFRS 16) was R$165 million in 2Q24, and R$258 million for the semester.

• Profit before income tax (LAIR) more than doubled to R$347 million, a 157% increase.

• Cash and equivalents totaled R$7 billion at quarter-end, up 34% year-over-year.

Outlook and guidance

• 15 new stores expected in 2024, with 10 more planned for 2H24, and over 300 stores targeted by year-end.

• Leverage ratio targeted below 3.2x by end-2024, with ongoing deleveraging focus.

• Expectation for a more positive second semester, with stable food inflation and continued margin management.