August 9, 2022

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Via (VIIA3) posted a 91% lower profit on its fourth-quarter balance sheet, while shares were down 7%.

Via (VIIA3) posted a 91% lower profit on its fourth-quarter balance sheet, while shares were down 7%.

Via posts (VIIA3) is down about 7%, quoted at R$3.18, at 1:55pm, after reporting net income of R$29 million on the fourth-quarter balance sheet, a 91.4% lower performance than the performance recorded in the same period in 2020. with a value of 336 million Brazilian riyals.

According to the company, the decrease in profit is due to lower revenues and increased financial expenses, mainly due to higher interest rates and an increased expectation of credit card receivables.

The result came In line with consensus expectations Refinitivwhich was a profit of 17 million Brazilian riyals.

non-recurring effects

According to the company, excluding non-recurring adjustments, the company achieved a net operating income of R$125 million, a decrease of 73.4% in this comparison.

This year, the accounting result indicated a loss of R$297 million, reflecting a profit of R$1.004 billion recorded in 2020.

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With no one-off effects, the company says profits in 2021 would have been R$538 million, which is a 32.2% increase over the 2020 operating performance of R$407 million.

“In the fourth quarter of year 21, there was an impact of the recurring support incentive of R$88 million. He explained in a management report that to date, the total support incentive amounted to R$491 million, of which R$203 million refers to the impact of periods prior to 2021.

value to open

In a conference call on Thursday (10), CEO Roberto Folcherberger confirmed that digital sales tripled from 2019 to 2021, to R$26 billion, and sales by apps and mobile grew 62% (2019)) to 75% (2019). ).

Thus, last year was a period of escalation the shopwith performance Online Over balancing the performance of physical stores. In addition, greater product diversification, with more Stock Keeping Units (SKUs), was a key factor in boosting GMV (Gross Commodity Volume).

Thus, the expectation is the incremental expansion of selling new items and categories, which generate greater frequency and frequency and the addition of new customers, says Folschberger. “The result is a lower cost of customer acquisition,” he said.

In order to “unlock” the company’s greater potential, according to the company’s board of directors, Via’s focus is on expanding logistics as a service (las), which is already a reality in the company, “but its ability to generate value is just getting started,” says Roberto. Also in credit as a service (House), who “finds the path of the optimal way of evolution”.

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a the shop and strategy omnichannel It will be essential to boost Via’s growth in the coming years, bring in new customers and increase life value Within the company’s ecosystem, says the CEO.

Online sellers, he says, are the key to improving the company’s performance in the sector as a whole.

Stock Reduction After the Pandemic

At the start of the pandemic, the FIA ​​massively increased stocks, a strategy that was correct, according to Fulcherberguer. But since the end of last year, the company has been slowing down in stock acquisitions.

“We understand that we are now able to ‘reduce’ stocks, as many sectors are normalizing supply. Our stocks are completely healthy, we don’t need to hoard them,” he said.

Despite the war in Russia and Ukraine and global instability, he says there is currently no concern about product shortages or significant impacts on prices.

According to him, the company is operating in a longer period than the traditional period and part of the semester cycle is already programmed with the industry.

“We have pressure because of what is happening in the world, but we also have a depreciation of the dollar in Brazil, and that has an appropriate effect on our squad,” he points out.

Prospects for 2022

2022 is still beginning with the effects of the new wave of Covid-19, but as of February 10, there is a significant improvement in the flow of people and sales, the level that was maintained in March.

The company’s outlook is to open between 80 and 100 stores later this year. “We continue to develop the company’s technology platform. We should have similar numbers to the last few years at Capex to unlock more value,” the CEO notes. According to him, “There is a lot of revenue and profitability to grab.”

We have been able to grow thus far without giving up margin. With the company’s profits increasing, and the reception of consumers from different sectors, we have a real big opportunity to gain market share without giving up profitability,” he highlights.

Analysis of results via

Analysts saw the results of the VIA in different ways. The positive advantage was the expense control, while the poor sales data in physical stores, although expected, was positioned as a point of interest.

For XP, Via had a better-than-expected result in the fourth quarter, focusing on Ebitda’s margin, or the ratio between Ebitda and net revenue.

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In-house analysts note that revenue growth dynamics continues to be affected by the challenging macroeconomic scenario, strong comparison base and restrictions related to Covid-19, with Gross Gross Goods Sold (GMV) down 7% year-on-year, as a result of a decline 24% in GMV from physical stores, while the online channel grew 20%, driven by 3 points, or the market (up 68% year-over-year).

Ebitda’s margin in turn increased by 2.1 percentage points year over year, due to lower general and administrative expenses, accompanied by lower support for online purchases, lower investments in marketing and sales commissions.

For Morgan Stanley, controlled expenses outpaced the sales headwind. Analysts at the bank noted that the GMV was 13% lower than their estimate, while revenue was 15% lower than expectations. However, EBITDA was up 14%, with expenses adjusting positively to offset weak sales numbers.

less positive outlook

Credit highlighted that it expects a negative market reaction to the outcome, as the dynamics of the physical store were weaker than expected. Same-store sales fell 24%, while 1P (private inventory) and 3P (market), respectively, grew 7.7% and 68% year on year.

Ebitda’s margin of 7.9% was only possible due to the significant reduction in general and administrative expenses, valued at R$618 million). One of the negative features was the largest discount on receivables.

Bradesco BBI revised its estimates for Via down after the balance sheet. The bank notes that this is not the best set of results (given weak earnings), but this was widely expected as the retailer has significant exposure to higher priced discretionary items that are in poor demand in the current macro environment.

Overall, this set of results should bolster investor concerns regarding the demand for electronics and home appliances and how this might affect VIA’s results over the next few quarters. Although the market has performed well in 2021, the category diversity is still more limited than it is in Miele (Mili 34) and American (Amer 3)”, he points out.

Recommendations on VIIA3

XP has a neutral recommendation for VIIA3, with a target price of BRL 7, despite a potential 105% increase over the previous day’s close.

Morgan Stanley highlighted the bank’s recommendation to follow weight loss (Exposure below market average) for VIIA3 assets, with a target price of R$5 (or a potential upside of 46.6% compared to the last close).

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BBI’s recommendation for the stock remains neutral, with the target price cut from R$6 to R$5, the same price target set by Morgan, in order to incorporate slightly lower estimates.

More details on VIIA’s balance sheet

Earnings before interest, taxes, depreciation and amortization (EBITDA)EBITDAin English acronym) advanced 17.6% to R$641 million, resulting in a margin gain of 2.1 percentage points.

Expect consensus revintiv Ebitda was worth 557.33 million Brazilian Real. That is, the performance was 15% higher than expectations.

Via explains that the growth in Ebitda was due to productivity gains and good control over expenses.

Total turnover (GMV) reached R$11.792 billion in Q421, down 6.9% compared to Q4 of 2020.

Digital sales accounted for 56% of GDP in Q421, with a total GMV of R$11.8 billion, with growth of about 8% in e-commerce (1P) and 68% in market (3P).

The company’s net revenue was R$8.127 billion between October and December of last year, a decrease of 14.2% compared to the same period in 2020.

Gross margin was 29.2%, remaining practically stable compared to the margin reported in the fourth quarter of 2020.

Financial result

In the fourth quarter of ’21, the net financial result for non-recurring settlements was negative R$411 million, 2.4p, p. Higher as a percentage of net revenue (5.1%), mainly due to an increase in the rate of income and an increase in prepayments for credit card receivables.

The leverage index, measured by net cash/earnings-adjusted before interest, tax, depreciation and amortization for the past 12 months, was 1.5 times on December 21, taking into account undiscounted receivables of R$3.8 billion and adjusting for prepayments. to suppliers with a value of 366 million Brazilian riyals.

Investments

By investing R$1.0 billion last year, an increase of 139% over the amount invested in 2020. About 60% of the investments were directed to technology and infrastructure projects, in order to support the transformation in the company’s growth.

The retailer opened 101 new stores, 74% of which are in new Via municipalities.

Via Balance Sheet: Adjustments to Result

Balance Sheet Fourth Quarter 2021

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