Unicasa Indústria de Móveis S.A. (UCAS3) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and thank you for waiting. Welcome to Unicasa Industria de Moveis S.A. conference call to discuss the results of the first quarter of 2021. Today with us, we have Mr. Gustavo Dall'Onder, CEO, CFO and Investor Relations Officer. We would like to inform you that this event is being recorded. [Operator Instructions] This event is being broadcast simultaneously on the Internet via webcast, and you may access it at www.unicasamoveis.com.br/ir, where you will find the presentation for download. The slide selection will be managed by you. We would like to remind you that webcast participants may send their questions via website, and they will be answered during the Q&A. Before proceeding, let me mention that forward-looking statement that might be made during this call in relation to Unicasa's business perspectives, operating and financial targets, our beliefs and assumptions of the company's management as well as information currently available to the company. Forward-looking statements are no guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events, and therefore, depend on circumstances that may or may not occur. Investors and analysts should understand that general economic conditions, industry conditions and other operating factors may affect the future results of Unicasa and may lead results to materially -- that differ materially from those expressed in such forward-looking statements. Now I would like to give the floor to Mr. Gustavo Dall'Onder. Mr. Dall'Onder, you may proceed.

Good afternoon, everybody. In the first quarter of 2021, the company posted 54.8% revenue growth, the highest number in a similar period since it went public. Besides the 1Q '21 net revenue was also the highest posted in a first quarter since 2016 when the company had more than twice the number of stores. Revenue went up in all the company's channels and brands, but corporate, impacted by specific projects in 1Q '21. Considering that in 1Q '20, about BRL 7 million in invoicing were postponed due to the early start of collective vacations as a measure to fight the pandemic, the revenue growth in 1Q '21 would have been 25% approximately. Operating expenses went down by about 14% mainly driven by travel and advertising expenses that went down due to restrictions imposed by the pandemic. The operating result reached BRL 5.8 million, reverting the operating loss of 1Q '20. The EBITDA margin was 19.2%, the highest in a first quarter since 2013. During the Annual Shareholder Meeting held on April 27, 2021, payment of BRL 14 million in dividend, payout of 100% of the adjusted net income of 2020 was approved, and it will be paid out on May 20, 2021. As published in the 4Q '20 release, the furniture sector is being impacted by the imbalance in the supply chain, delivery delay, shortage of product and raw material price increases. The company has been trying to maximize its purchases in order to avoid shortages. On Slide 5, we show the highlights of the period already mentioned, the message from the management. On Slide 7, we highlight the 51.9% increase in gross revenue, explained mainly by the better performance of the sales channels, which went up by 52.6%. Starting by the Dell Anno and Favorita exclusively resellers on Slide 8, we see an increase of 51.1% in revenues and 26% increase in modules sold. On Slide 9, we see that the New and Casa Brasileira brand had an 83.2% upswing in revenues and 59.8% in modules sold. On Slide 10, we see the multibrand resellers performance, up by 94% in revenues and 77.6% in modules. The corporate segment on Slide 11 dropped 80% in revenues and 70% in modules. It is worth mentioning that in 1Q '20, we delivered a major project. On Slide 12, we see the export segment performance with a 254.6% hike in revenues and 140.6% in modules sold. Such as in 4Q '20, our extended footprint in the U.S. and the increase in sales to Latin America contributed extensively to this revenue increase. Unicasa's consolidated revenue, on Slide 13, went up by 51.9%; and modules sold, 30% (sic) [ 37.9% ]. On Slide 14, we can see that the average productivity per Dell Anno and Favorita store in the quarter was BRL 96,600 per month, 76.8% higher and the New and Casa Brasileira, BRL 48,700 per month, going up 65.9%. On Slide 15, we have a chart with our exclusive and multibrand POS evolution. We closed the quarter with 198 exclusive and 118 multibrand stores. On Slide 16, we have a chart with the exclusive POS evolution broken down by brand. We closed the quarter with 75 Dell Anno and Favorita operations, 107 New and Casa Brasileira and 60 exclusive stores abroad. On Slide 18, we can see the Unicasa result summary. Growth of 54.8% in net revenue, 13.3 percentage points increase in EBITDA margin and 9.2 percentage points added to the net margin. On Slide 19, we show the SG&A evolution falling by 14% in the quarter. Advertising expenses went down BRL 300,000 due to the cancellation of some events due to the pandemic. And delinquency went down, provision for expected credit losses went down BRL 200,000. Expenses with the U.S. operation dropped BRL 200,000 due to the nonrecurring expenses in the comparable period. These expenses refer to payroll, occupancy, travel, insurance, advertising, et cetera, related to the office opened in the U.S. to support the company's expansion in that market. Other expenses went down BRL 1 million mainly due to expense control measures put in place due to the pandemic, for example, travel expenses, falling BRL 300,000. Besides, variable expenses also fell BRL 200,000 in the quarter. On Slide 20, we see that the quarter net income, BRL 3.7 million. On Slide 21, EBITDA, BRL 8.1 million with a 19.2% margin. Now I would like to give the floor to the operator to start the Q&A.

[Operator Instructions] The Q&A session has come to an end. I would like to give the floor back to Mr. Gustavo Dall'Onder for his closing remarks. Mr. Dall'Onder, you may proceed.

For additional information, please contact our Investor Relations area. Thank you very much for participating, and we wish you all a very good day.

The Unicasa conference call has come to an end. Thank you very much for your participation, and have a very good afternoon. [Statements in English on this transcript were spoken by an interpreter present on the live call.]