2Q15
Results
LOJAS RENNER S.A.
EARNINGS RESULTS FOR THE SECOND QUARTER (2Q15)
LOJAS RENNER S.A.
The Company was incorporated in 1965 and
has been listed since 1967.
A pure widely held capital company since
2005 with a 100% free float, Lojas Renner was
deemed the first Brazilian corporation.
Renner’s equities are traded under the
LREN3 symbol on the BM&FBOVESPA’s Novo
Mercado, the highest level of Corporate
Governance.
Closing share price as of June 30, 2015:
R$ 113.00
July 30, 2015 – LOJAS RENNER S.A. (BM&FBOVESPA: LREN3), the largest
fashion retailer in Brazil, announces its results for the second quarter
(2Q15) and the first half (1H15) 2015.
HIGHLIGHTS FOR 2Q15








Net Revenue from Merchandise Sales with a growth of 21.9%
Same Store Sales of +14.5%
Gross Margin from the Retailing Operation of 55.3% (+1.1p.p.)
Operating Expenses represented 34.0% of Net Revenue (-0.1p.p)
Adjusted EBITDA from the Retailing of R$ 272.2 million (+39.1%)
EBITDA Margin from the Retailing Operation of 20.1% (+2.5p.p.)
Total Adjusted EBITDA of R$ 326.2 million (+31.5%)
Net Income of R$ 158.2 million (+33.5%)
Market capitalization as of June 30, 2015:
R$ 14.4 billion
CONFERENCE CALL ON RESULTS*
Friday, July 31, 2015
Time: 1:00 p.m. (Brazil) / 12 noon (US-ET)
Access in Portuguese: +55 11 3127-4971 /
+55 11 3728-5971
Access in English: +1 516-300-1066
Password: Lojas Renner
Replay: +55 11 3127-4999
Password - Portuguese: 15329904
Password - English: 69052193
Access to the Webcast:
http://webcast.neo1.net/Cover.aspx?PlatformId=HgKo
mXAkKGMJvRexWeO4mA%3D%3D
* The conference call will be conducted in
Portuguese only with simultaneous translation into
English.
CONTACTS
Laurence Gomes – CFO and IRO
[email protected]
Paula Picinini
Tel. +55 51 2121 7044
[email protected]
Diva Freire
Tel. +55 51 2121 7045
[email protected]
Felipe Fernandez
Tel. +55 51 2121 7006
[email protected]
Felipe Gaspar
Tel. +55 51 2121 7183
[email protected]
Carla Sffair
Tel. +55 51 2121 7006
[email protected]
LEGAL NOTICE
This release contains forward-looking statements relating to
the prospects of the business, estimates for operating and
financial results, and those related to growth prospects of
Lojas Renner S.A. and are merely projections and, as such,
are based exclusively on the expectations of the
Company’s management concerning the future of the
business. Such forward-looking statements depend
substantially on changes in market conditions, the
performance of the Brazilian economy, the sector and the
international markets, and are therefore subject to change
without prior notice.
www.lojasrenner.com.br/ri
MANAGEMENT COMMENTS
Renner’s second quarter sales continued to maintain growth rates in
spite of the current macro-economic climate and greater sales
promotions in the Brazilian retail sector as a whole.
In addition, positive customer reaction to the seasonal collections,
good sales performance ahead of Mother’s Day and Valentine’s Day
and prudent inventory management helped Net Revenue from
Merchandise Sales to grow by 21%. As a result, Renner again
exceeded the IBGE’s Monthly Survey of Trade index. Similarly, Renner’s
Same Store Sales posted an evolution of 14.5%.
Gross Profit from the Retailing Operation was R$ 749.2 million, a yearon-year growth of 24.5%. Gross Margin from the Retailing Operation
reported an expansion of 1.1.p.p. to 55.3%, once again benefiting from
the Company’s good inventory management and commercial
strategy.
Operating Expenses (Selling, General and Administrative) were 34.0%
of Net Revenue from Merchandise Sales against 34.1% for 2Q14, due
principally to strong sales growth and rigid control over expenses.
Adjusted EBITDA from the Retailing Operation reported expansion of
39.1%, reaching R$ 272.2 million and equivalent to an EBITDA Margin
from the Retailing Operation of 20.1% against 17.6% in 2Q14.
The Company’s Results from Financial Products was R$ 54.0 million, a
growth of 3.0% in the period. Growth rates were influenced by
increased funding costs and provisions due to higher sales volume in
2Q15. Losses from Renner Card business, Net of Recoveries was 4.3% of
the total portfolio.
Total Adjusted EBITDA was R$ 326.2 million, growth of 31.5% in relation
to 2Q14. The Total Adjusted EBITDA Margin for the quarter was 24.1%
compared with 22.3% in 2Q14.
In the light of the foregoing, the Company reported a Net Income of
R$ 158.2 million, a growth of 33.5%. Net Margin was 11.7%, a 1.0p.p.
improvement in relation to the preceding period.
During 2Q15, the Company opened 18 stores of which 10 under the
Renner banner, 5 Camicado and 3 Youcom. Investments in the quarter
totaled R$ 146.6 million.
Página 2 de 10
LOJAS RENNER S.A.
EARNINGS RESULTS FOR THE SECOND QUARTER (2Q15)
CONSOLIDATED INFORMATION
(R$ MM)
2Q15
2Q14
Var. %
1H15
1H14
Var.
1,354.2
1,111.2
21.9%
2,365.1
1,925.7
22.8%
Growth in Same Store Sales (%)
14.5%
10.0%
4.5p.p.
15.4%
8.0%
7.4p.p.
Gross Profit from Merchandise Sales
749.2
602.0
24.5%
1,299.6
1,024.3
26.9%
Gross Margin from Retailing Operation (%)
55.3%
54.2%
1.1p.p.
54.9%
53.2%
1.7p.p.
Operating Expenses (SG&A)
(460.7)
(378.5)
21.7%
(868.3)
(716.3)
21.2%
SG&A as a % of Net Revenue from Merchandise Sales (%)
34.0%
34.1%
-0.1p.p.
36.7%
37.2%
-0.5p.p.
Ajusted EBITDA from Retailing Operation
272.2
195.7
39.1%
402.9
269.4
49.6%
Ajusted EBITDA Margin from Retailing Operation (%)
20.1%
17.6%
2.5p.p.
17.0%
14.0%
3.0p.p.
Net Revenue from Merchandise Sales
Financial Products Result
54.0
52.4
3.0%
122.1
113.8
7.3%
Ajusted Total EBITDA (Retail + Financial Products)
326.2
248.1
31.5%
525.0
383.2
37.0%
Ajusted Total EBITDA Margin (%)
24.1%
22.3%
1.8p.p.
22.2%
19.9%
2.3p.p.
Net Income
158.2
118.5
33.5%
231.4
169.4
36.6%
Net Margin (%)
11.7%
10.7%
1.0p.p.
9.8%
8.8%
1.0p.p.
5.9%
5.4%
0.5p.p.
9.3%
8.2%
1.1p.p.
ROIC (%)
Businesses Breakdown - 2Q15
Stores in Operation
259
63
28
472.8
28.9
3.8
1,280.4
65.5
8.3
% of Growth
21.7%
17.9%
124.2%
Gross Margin (%)
55.8%
45.9%
59.6%
Selling Area (thousand m²)
Net Revenue (R$ MM)
Net Revenue from Merchandise Sales was R$ 1,354.2 million in 2Q15, year-on-year growth of 21.9%, reflecting the
favorable customer response to the seasonal collections together with the satisfactory sales performance leading
up to Mother’s Day and the Brazilian version of Valentine’s Day. Net revenues were also driven by a well-honed
strategy of product allocation to the stores and good execution at the store level. As a result, Renner once more
exceeded Federal Government Statistics Office (IBGE)’s Monthly Survey of Trade index up to the end of May
(-1.9%). In 1H15, Net Revenue from Merchandise Sales was R$ 2,365.1 million, representing growth of 22.8% against
1H14. Same Store Sales in 2Q15 posted growth of 14.5% against 10.0% in 2Q14, and in 1H15 of 15.4% against 8.0% in
the same period for 2014.
Gross Profit from Merchandise Sales was R$ 749.2 million, 24.5% higher than recorded for the same period in 2014.
Gross Margin from the Retailing Operation reached 55.3%, an increase of 1.1p.p. in relation to 2Q14, benefiting
from well implemented inventory management and product distribution to the stores combined with the
Company’s commercial strategy. Improved margins at Camicado and Youcom also contributed to this trend. In
1H15, the Company registered Gross Profit from Merchandise Sales of R$ 1,299.6 million and a Gross Margin from
the Retailing Operation of 54.9%.
Operational Expenses
(R$ MM)
2Q15
2Q14
(460.7)
34.0%
Selling Expenses
General and Administrative Expenses
Operational Expenses (SG&A)
% Over Net Revenue from Merchandise Sales
Other Operating Expenses
Management Remuneration
Var. %
1H15
1H14
Var. %
(378.5)
21.7%
(868.3)
(716.3)
21.2%
34.1%
-0.1p.p.
36.7%
37.2%
-0.5p.p.
(344.0)
(286.2)
20.2%
(651.3)
(542.4)
20.1%
(116.7)
(92.3)
26.4%
(217.0)
(173.9)
24.8%
(16.4)
(27.8)
-41.0%
(28.4)
(38.6)
-26.5%
(2.7)
(4.0)
-33.5%
(5.0)
(6.1)
-17.9%
Tax Expenses
(10.2)
(8.2)
24.4%
(19.6)
(14.8)
32.2%
Employee Profit Sharing
(16.5)
(17.4)
-5.0%
(23.3)
(21.8)
7.2%
Recovery of Tax Credits
10.7
2.2
378.7%
20.9
3.0
609.2%
2.3
(0.4)
-656.7%
(1.4)
1.1
-232.1%
(477.1)
(406.3)
17.4%
(896.7)
(754.9)
18.8%
Other Operating Expenses
Total Operational Expenses
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Página 3 de 10
In
the
context
of
Operating
Expenses,
Selling Expenses in 2Q15
were R$ 344.0 million,
representing 25.4% of Net
Revenue
from
Merchandise
Sales,
a
dilution
of
0.4p.p. in
relation
to
2Q14,
notwithstanding
higher
electric energy expenses.
General
and
Administrative Expenses in
turn reached R$ 116.7
million in the quarter, this
representing 8.6% of Net
Revenue
from
LOJAS RENNER S.A.
EARNINGS RESULTS FOR THE SECOND QUARTER (2Q15)
Merchandise Sales against 8.3% for the same period in 2014. This item was largely impacted by higher logistics
expenses in the light of the new Santa Catarina Distribution Center. In 1H15, Selling Expenses were R$ 651.3 million,
representing 27.5% of Net Revenue from Merchandise Sales while General and Administrative Expenses reached
R$ 217.0 million, 9.2% of Net Revenue from Merchandise Sales.
Other Operating Expenses totaled R$ 16.4 million in 2Q15 against R$ 27.8 million in 2Q14, positively impacted by the
recovery of tax credits. In the first half, Other Operating Expenses amounted to R$ 28.4 million in contrast to R$ 38.6
million.
A combination of higher sales, enhanced gross margins and stability in expenses in relation to revenues all served
to boost year-on-year Adjusted EBITDA from the Retailing Operation by 39.1% to R$ 272.2 million in 2Q14. Adjusted
EBITDA Margin from the Retailing Operation was 20.1% against 17.6% in 2Q14. In 1H15, Adjusted EBITDA from the
Retailing Operation was R$ 402.9 million and Adjusted EBITDA Margin from the Retailing Operation was 17.0%
against 14.0% in 1H14.
FINANCIAL PRODUCTS RESULTS
The
Company
reported
a
2Q15
Result from Financial
Revenues, Net of Funding and Taxes
168.5
140.5
20.0%
320.1
260.5
22.9%
Products of R$ 54.0
91.7
86.4
6.2%
173.2
158.5
9.3%
Renner Card (Private Label)
million, 3.0% higher
48.2
30.0
60.8%
91.8
54.3
68.9%
than the R$ 52.4
Co-branded Card Meu Cartão
million reported in
28.6
24.1
18.7%
55.1
47.7
15.4%
Quick Withdrawal and Insurances
2Q14. In the first half,
Credit Losses, Net of Recoveries
(74.1)
(54.0)
37.1%
(119.8)
(83.2)
44.0%
this result reached
(45.1)
(37.9)
18.9%
(69.9)
(53.0)
31.9%
R$
122.1
million,
Renner Card (Private Label)
representing 23.3% of
(18.7)
(11.6)
61.0%
(32.5)
(19.9)
63.1%
Co-branded Card Meu Cartão
the Company’s Total
(10.3)
(4.5)
129.2%
(17.4)
(10.3)
69.0%
Quick Withdrawal
EBITDA. The more
Operating Expenses (Cards and Other Products)
(40.4)
(34.0)
18.8%
(78.1)
(63.5)
22.9%
modest
growth
compared with the
Financial Products Result
54.0
52.4
3.0%
122.1
113.8
7.3%
retailing business is
% of Company's Total Adjusted EBITDA
16.6%
21.1%
-4.5p.p.
23.3%
29.7%
-6.4p.p.
largely a reflection of
higher funding costs. Results from this segment were also affected by higher provisioning expenses in tandem with
the growing sales volume in the period. In line with the current macroeconomic scenario, Renner reported a
slightly higher level of delinquency although controlled and within company forecasts, thus also contributing to this
result.
Financial Products Result Breakdown
(R$ MM)
2Q15
2Q14
Var. %
1H15
1H14
Var. %
Revenue, Net of Funding and Taxes reached R$ 168.5 million in 2Q15, a 20.0% increase over the same period in
2014, principally reflecting growth in Meu Cartão revenues. Conversely, revenues from the Private Label card were
influenced by the higher cost of funding and by the reduction in the average term for receivables. In 1H15,
Revenue, Net of Funding and Taxes was R$ 320.1 million, a growth of 22.9% against 1H14.
Credit Losses, Net of Recoveries totaled R$ 74.1 million, a growth of 37.1% in relation to 2Q14, given the greater
necessity for provision in the Private Label business, reflecting in large part increased sales in the period, and the
stage of maturation reached by the Co-branded card. Delinquency with the Saque Rápido facility proved slightly
above company forecasts, although in line with the current macroeconomic context. In the first half, Credit Losses,
Net of Recoveries were R$ 119.8 million, 44.0% greater than 1H14.
At the end of June, the total number of Renner Cards issued amounted to 25.2 million, accounting for 50.0% of
merchandise sales during the course of 2Q15 compared with 51.0% in 2Q14. Out of this participation, 39.8% were
originated from sales under the interest free 0+5 installment credit plan and 10.2% under the interest bearing 0+8
installment credit plan.
The average Renner Card Sales Ticket was R$ 189.45 in 2Q15, 5.0% higher than the R$ 180.39 registered in 2Q14. In
turn, the Company’s average ticket was R$ 139.81, 6.8% higher than the R$ 130.95 in 2Q14, reflecting greater store
traffic and an increase in the number of new customers who characteristically do not immediately make use of
the Card.
Losses from Renner Card, Net of Recoveries were 4.3% of the total portfolio in 2Q15, versus 4.1% in 2Q14, to a large
degree due to greater provisioning in line with a 21.9% growth in sales during the period. In the first half, Losses from
Renner Card, Net of Recoveries reached 6.6% of the total portfolio against 5.7% in 1H14.
At month-end June 2015, Renner had issued 1.7 million Meu Cartão purchase-enabled credit cards, a growth of
57.3% in the portfolio, sales with this product reporting R$ 389.6 million for the quarter. Quarterly revenue was R$
48.2 million, 60.8% greater than recorded in the same period in the preceding year. In 1H15, revenue amounted to
www.lojasrenner.com.br/ri
Página 4 de 10
LOJAS RENNER S.A.
EARNINGS RESULTS FOR THE SECOND QUARTER (2Q15)
R$ 91.8 million. Losses on the total Co-branded portfolio, net of recoveries were 4.8% of the portfolio value - in line
with the 4.7% in the same period in 2014. In 1H15, Net Losses on the total Co-branded portfolio were 8.3% against
8.0% in 1H14.
The Saque Rápido (quick withdrawal facility) portfolio totaled R$ 196.8 million at the end of June 2015 (R$ 131.1
million when adjusted to present value), versus R$ 160.9 million for 2Q14. Losses from the Saque Rápido facility, Net
of Recoveries were 5.2% on the total portfolio against 2.8% for the same period in 2014. This reflects increased
provisioning due to higher delinquency rates, albeit slightly above the Company’s forecasted limits for the product
given the characteristics of this facility, however in line with current macroeconomic circumstances.
Operating Expenses on Financial Products, posted growth of 18.8% in relation to 2Q14, reaching R$ 40.4 million. In
1H15, these same expenses were R$ 78.1 million, a growth of 22.9% against 1H14.
On June 30, 2015, Accounts Receivable totaled R$ 1,746.1 million, 23.5% more than the position in June 2014. This
increase is in line with sales growth in the period and breaks down into R$ 944.2 million for the Renner Card (Private
Label), R$ 371.0 million for Meu Cartão (Co-Branded) and R$ 165.1 million for Saque Rápido. Third Party Card
Companies and Other Accounts Receivable totaled R$ 265.7 million.
Accounts Receivable (R$ MM)
Jun.15
Renner Card (Private Label) - Total Portfolio (Adjusted to Present Value)
Dec.14
Jun.14
1.057,4
1.205,3
929,2
944,2
1.088,2
826,5
On Due Receivable
865,7
1.094,0
754,3
Overdue Receivable
217,0
144,4
195,4
Present Value Adjustment
(25,2)
(33,1)
(20,5)
Allowance for Losses to the Realizable Value
(67,6)
(58,9)
(59,5)
Others
(45,6)
(58,2)
(43,2)
Meu Cartão (Co-Branded) - Total Portfolio
389,6
338,0
247,7
Meu Cartão (Co-Branded) - Net Portfolio
371,0
326,1
236,2
On Due Receivable
296,9
281,0
193,6
Overdue Receivable
92,7
57,0
54,1
(18,6)
(11,9)
(11,5)
Quick Withdrawal - Total Portfolio
196,8
168,9
160,9
Quick Withdrawal - Net Portfolio
165,1
141,7
137,5
Fees and Transactions Receivable
196,8
168,9
160,9
Allowance for Losses to the Realizable Value
(31,7)
(27,2)
(23,4)
259,8
347,6
212,2
5,9
4,9
1,9
1.746,1
1.908,5
1.414,4
Renner Card (Private Label) - Net Portfolio
Allowance for Losses to the Realizable Value
Total Third-Party Credit Card Companies
Other Accounts Receivable
Total Credit Portfolio, Net
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Página 5 de 10
LOJAS RENNER S.A.
EARNINGS RESULTS FOR THE SECOND QUARTER (2Q15)
TOTAL ADJUSTED EBITDA: RETAIL + FINANCIAL PRODUCTS
EBITDA Reconciliation
2Q15
2Q14
1H15
1H14
158.2
118.5
231.4
169.4
( + )Income and Social Contribution Taxes
69.9
49.6
99.3
67.2
( + )Financial Result, Net
25.8
21.3
53.8
36.5
(R$ MM)
Net Income
( + )Depreciation and Amortization
63.7
51.6
125.1
99.9
317.6
241.0
509.6
373.1
( + ) Stock Option Plan
7.5
7.0
14.0
9.9
( + ) Result on Disposal or Write-Off of Fixed Assets
1.1
0.1
1.4
0.2
Total EBITDA
In the light of the
factors
discussed
above - resulting in
significant increases in
the
Retailing
Operation margins Total Adjusted EBITDA
rose by 31.5% to R$
326.2 million, while the
Total Adjusted EBITDA
Margin was 24.1%, a
1.8p.p. improvement
on the 2Q14 margin.
*Pursuant to Article 4 of CVM instruction 527,
the Company has chosen to show its Adjusted
EBITDA as in the above table in order to
provide the information that best reflects the
Total Adjusted EBITDA Margin
24.1%
22.3%
22.2%
19.9%
gross operational cash generation from its
activities. These adjustments are based on: a)
the Stock Option Plan – corresponding to the fair value of the respective financial instruments recorded “pro rata temporis”, during the period services are rendered and offset by the Equity Capital Reserve and thus not representing a
cash outflow; b) Statutory Participations are of a contingent nature and are related to the generation of profits pursuant to Article 187 of Law 6.404/76; and c) the Write-off of Fixed Assets relates to the results recorded from the
divestment or write-off of fixed assets, largely without a cash
Total Adjusted EBITDA*
326.2
248.1
525.0
383.1
NET FINANCIAL RESULT
Financial Result, Net
(R$ MM)
2Q15
2Q14
Var. %
1H15
1H14
Var. %
15.5
14.0
10.3%
29.5
29.3
0.8%
15.5
13.7
13.0%
29.4
28.8
1.8%
0.0
0.4
-90.1%
0.2
0.4
-62.9%
(42.6)
(35.2)
21.1%
(90.0)
(68.8)
30.7%
Interest on Loans, Debentures and Borrowings
(38.0)
(30.0)
26.8%
(80.5)
(58.6)
37.3%
Other Finance Costs
(4.6)
(5.2)
-11.9%
(9.5)
(10.2)
-7.2%
Exchange Variation, Net
3.3
(1.8)
-284.8%
2.7
0.1
3677.5%
Hedge Operations (Debt Swap), Net
(1.9)
1.6
-220.0%
4.0
2.9
36.9%
(25.8)
(21.3)
21.1%
(53.8)
(36.5)
47.2%
Financial Income
Gains on Cash Equivalents
Other finance income
Financial Costs
Financial Result, Net
In
2Q15,
the
Company
reported
a
negative
Net
Financial
Result
of R$ 25.8 million
compared with a
negative R$ 21.3
million in 2Q14,
largely
a
reflection
of
higher
interest
rates
in
the
quarter in relation
to
the
same
quarter in 2014. In
the first six months
of 2015, the Company registered a negative Net Financial Result of R$ 53.8 million.
NET DEBT
Net Debt
(R$ MM)
Borrowings and Financing
Jun.15
Dec.14
Jun.14
(1,173.5)
(1,142.2)
(1,082.2)
Current
(296.4)
(210.2)
(58.2)
Noncurrent
(877.1)
(932.0)
(1,024.0)
696.6
834.3
719.6
(476.9)
(307.9)
(362.6)
0.40x
0.29x
0,39x
(834.7)
(758.8)
(761.5)
Current
(420.1)
(345.2)
(350.7)
Noncurrent
(414.6)
(413.7)
(410.8)
(1,311.6)
(1,066.7)
(1,124.1)
Cash and Cash Equivalents
Net Debt
Net Debt / Total Adjusted EBITDA (12M)
Operational Financing
Net Debt
(Including Operational Financing)
servicing charges are booked to the Net Financial Result. Operational Financing liabilities
Products and Imports, the cost of which are reflected in the Operational Result
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Página 6 de 10
As of June 30, 2015,
Renner’s Net Debt
stood at R$ 476.9
million.
This
debt
is
a
consequence
of
capital
management
decisions
and
is
currently made up
of debentures issued
in the past few years
and by loans from
the
Brazilian
Development Bank –
BNDES
and
the
Banco do Nordeste
in
addition
to
working
capital
credit
lines
to
Camicado.
Debt
are linked to Financial
LOJAS RENNER S.A.
EARNINGS RESULTS FOR THE SECOND QUARTER (2Q15)
NET INCOME
The Company recorded Net Income in 2Q15 of R$ 158.2 million, a growth of 33.5% in relation to 2Q14, Net Margin
increasing from 10.7% in 2Q14 to 11.7% in 2Q15. In 1H15, Net Income was R$ 231.4 million, a year-on-year growth of
36.6%.
INVESTMENTS (CAPEX)
In 2Q15, investments in fixed
assets totaled R$ 146.6 million
against R$ 116.0 million in 2Q14.
Of this amount, R$ 50.0 million
New Stores
50.0
52.8
82.8
90.5
was dedicated to the opening
Remodeling of Installations
44.7
27.0
70.0
43.4
of new stores, R$ 44.7 million to
store modernization, R$ 35.2
IT Equipament & Systems
35.2
37.1
43.7
37.4
million for IT Systems and
Equipment
as
well
as
Distribution Centers
15.8
(5.8)
20.1
15.7
investments of R$ 15.8 million in
Distribution Centers and R$ 0.9
Others
0.9
4.9
1.4
6.4
million in Others.
In 1H15,
Total
146.6
116.0
218.0
193.4
Investments in fixed assets
amounted to R$ 218.0 million
against R$ 193.4 million in 1H14. During the quarter, Renner rolled out 18 stores, 10 under the Renner name and a
further five and three stores for Camicado and Youcom, respectively.
CAPEX Summary
(R$ MM)
2Q15
2Q14
1H15
1H14
In June 2015, Renner operated out of 259 stores and Youcom, from 28 stores, with a total selling area of 472.8
thousand m2 and 3.8 thousand m2, respectively. In turn, Camicado, had 63 stores with an aggregate selling area of
28.9 thousand m2.
Depreciation and Amortization expenses totaled R$ 63.7 million in 2Q15, a year-on-year variation of 23.3%. In 1H15,
these expenses were R$ 125.1 million, a growth of 25.1% against 1H14. This increase is predominantly due to the
larger number of stores as a consequence of the Company’s current expansion plan.
DIVIDENDS
In 2Q15, Lojas Renner credited dividends of R$ 26.7 million to its Shareholders in the form of Interest on Capital in
the amount of R$ 26.7 million, corresponding to R$ 0.2086 per share. In IH15, R$ 50.5 million were credited and
corresponding to R$ 0.3954 per share.
SUBSEQUENT EVENT
On July 29, 2015, the Board of Directors authorized the Company to request the Central Bank of Brazil (“Bacen”)
authorization for the organization and operation of a legal entity to be named as Realize - Crédito, Financiamento
e Investimento S.A. ("Realize CFI"), which will have as its object the performance of financial institutions activities in
accordance with the provisions of the Resolution No. 4.122/2012 of the National Monetary Council (Conselho
Monetário Nacional) and the Circular Bacen No. 3.649/2013, and any other applicable legal and regulatory
provisions; and to formalize, with both parties agreement, the termination of the Commercial Partnership
Agreement (Acordo de Parceria Comercial) executed on 12/05/2014 by and between the Company and Banco
Indusval S.A. (“BI&P”), which objective, in sum, was to establish a commercial partnership so that BI&P could
explore, together with the Company, the activities related to the issuance of “Visa” or “Mastercard” credit cards
considering the Company's customers base, an agreement that did not start due to operational impediments, not
having any effects between the parties, their clients and third parties.
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Página 7 de 10
LOJAS RENNER S.A.
EARNINGS RESULTS FOR THE SECOND QUARTER (2Q15)
ABOUT THE COMPANY
Lojas Renner is the largest fashion retailer in Brazil, in June 2015 with 259 stores, 63 Camicado units and 28
Youcom stores, the large majority of which are situated in shopping centers. Renner designs and sells quality
apparel, footwear and underwear for women, men, adolescents and children under 17 private labels of
which 6 represent the Lifestyle concept, each one reflecting a style of being and dressing. Lojas Renner also
sells accessories and cosmetics under two proprietary brands as well as offering specific items bearing third
party labels.
In May 2011, Renner acquired Camicado, a company in the home and decoration segment and in 2013,
launched Youcom, a new business model focused on the younger generation in a specialized store
environment.
The target customers of Renner and Camicado are women between the ages of 18 and 39 who are in the
medium-high consumer groups. Conversely, Youcom caters for the younger consumer between the ages of
18 and 35.
Lojas Renner offers its customers fashion products in various styles with quality and competitive prices in
practical and pleasant shopping environments.
CONSOLIDATED RESULT STATEMENT
Income Statement
(in R$ '000)
Net Operating Revenue
2Q15
2Q14
Var %
1H15
1H14
Var %
1,536,401
1,255,227
22.4%
2,710,348
2,194,126
23.5%
Net Revenue from Merchandise Sales
1,354,226
1,111,197
21.9%
2,365,121
1,925,712
22.8%
Net Revenue from Financial Products
182,175
144,030
26.5%
345,227
268,414
28.6%
Costs of Sales and Services
(618,617)
(512,788)
20.6%
(1,090,792)
(909,330)
20.0%
Cost of Goods Sold
(604,983)
(509,222)
18.8%
(1,065,565)
(901,446)
18.2%
(13,634)
(3,566)
282.3%
(25,227)
(7,884)
220.0%
Cost of Financial Products
Gross Profit
917,784
742,439
23.6%
1,619,556
1,284,796
26.1%
(663,910)
(553,031)
20.0%
(1,235,107)
(1,011,653)
22.1%
Selling
(343,999)
(286,169)
20.2%
(651,291)
(542,367)
20.1%
General and Administrative
(116,651)
(92,299)
26.4%
(217,004)
(173,933)
24.8%
(74,136)
(54,043)
37.2%
(119,873)
(83,214)
44.1%
(129,124)
(120,520)
7.1%
(246,939)
(212,139)
16.4%
Financial Products Expenses
(40,433)
(34,028)
18.8%
(78,054)
(63,506)
22.9%
Other Operating Results
(88,691)
(86,492)
2.5%
(168,885)
(148,633)
13.6%
Operating profit before Financial Results
253,874
189,408
34.0%
384,449
273,143
40.8%
Financial Result
(25,785)
(21,291)
21.1%
(53,770)
(36,537)
47.2%
Financial Revenue
28,035
17,297
62.1%
59,770
36,817
62.3%
Financial Expense
(53,820)
(38,588)
39.5%
(113,540)
(73,354)
54.8%
228,089
168,117
35.7%
330,679
236,606
39.8%
Operating Expenses
Losses on Receivables, Net
Other Operating Results
Income Before Income & Soc. Cont. Taxes
Income and Social Contribution Taxes
(69,920)
(49,639)
40.9%
(99,320)
(67,222)
47.7%
158,169
118,478
33.5%
231,359
169,384
36.6%
Earnings per Share - Basic R$
1.2396
0.9407
31.8%
1.8146
1.3451
34.9%
Earnings per Share - Diluted R$
1.2309
0.9322
32.0%
1.8041
1.3339
35.3%
127,840
126,024
-
127,840
126,024
-
Net Income for the Year
Number of shares at the End of Year (in thousands)
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Página 8 de 10
LOJAS RENNER S.A.
EARNINGS RESULTS FOR THE SECOND QUARTER (2Q15)
CONSOLIDATED BALANCE SHEET
Balance Sheet
(in R$ '000)
Assets
Jun.15
Dec.14
Jun.14
TOTAL ASSETS
5.224.002
5.321.540
4.407.842
Current Assets
3.307.172
3.499.343
2.780.762
Cash and Cash Equivalents
696.597
834.340
719.629
Trade Accounts Receivable
1.746.081
1.908.518
1.414.358
688.231
612.300
568.293
590.035
499.786
509.454
98.196
112.514
58.839
Recoverable Taxes
92.741
68.127
38.489
Derivative
27.799
33.324
2.844
Other Accounts Receivable
46.291
39.337
29.081
Inventories
Inventories
Imports in Transit
Prepaid Expenses
Noncurrent Assets
Judicial Deposits
9.432
3.397
8.068
1.916.830
1.822.197
1.627.080
8.151
6.833
7.072
42.164
39.984
35.671
8.576
7.498
5.434
94.156
95.670
100.119
63
63
63
1.391.883
1.304.065
1.138.162
371.837
368.084
340.559
Jun.15
Dec.14
Jun.14
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
5.224.002
5.321.540
4.407.842
Current Liabilities
1.317.281
Recoverable Taxes
Other Accounts Receivable
Deferred Taxes
Investments
Property, Plant and Equipment
Intangible
Liabilities and Shareholders' Equity
1.854.113
2.037.362
Loans, Financing and Debentures
296.392
210.246
58.240
Financing - Financial Products Operations
419.648
336.719
307.172
473
8.442
43.516
Financing - Imports
Lease
Suppliers
Commercial Suppliers
Antecipation of Payments
Suppliers of Material for Consumption
6.446
4.130
13.806
489.860
561.480
396.496
587.402
690.651
500.535
(180.228)
(231.361)
(165.194)
82.686
102.190
61.155
Taxes and Contributions Payable
167.956
337.935
125.820
Accrued Salaries and Vacations Payable
103.903
124.662
82.278
Rentals Payable
38.457
41.266
30.047
Statutory Liabilities
44.434
124.312
31.256
Provision for Civil and Labor Risks
23.916
23.998
19.529
194.803
196.988
132.408
22.343
Obligations with Card Administrators
Derivative
1.799
-
66.026
67.184
54.370
1.366.376
1.428.910
1.522.677
Loans, Financing and Debentures
877.062
931.950
1.023.971
Financing - Financial Products - FIDC
414.604
413.659
410.837
42.205
49.860
48.519
243
300
335
29.160
26.259
34.211
Other Accounts Payable
Noncurrent Liabilities
Financing Lease
Taxes and Contributions Payable
Provision for Tax Risks
Other Accounts Payable
3.102
6.882
4.804
2.003.513
1.855.268
1.567.884
1.128.234
750.853
725.054
Capital Reserves
259.870
245.860
230.793
Revenue Reserves
417.831
839.257
489.287
16.683
19.298
180.895
-
Shareholders' Equity
Capital
Carrying Value Adjustments
Retained Earnings Accumulated
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Página 9 de 10
(11.479)
134.229
LOJAS RENNER S.A.
EARNINGS RESULTS FOR THE SECOND QUARTER (2Q15)
CONSOLIDATED CASH FLOW
Statement of Cash Flows - Indirect Method
(in R$ '000)
2Q15
2Q14
1H15
1H14
158.169
118.478
231.359
169.384
63.685
51.633
125.070
99.937
1.063
79
1.429
217
260
259
519
517
39.426
30.829
83.367
60.372
7.543
7.003
14.010
9.886
359
2.528
2.819
3.975
69.920
49.639
99.320
67.222
3.490
(2.024)
(3.259)
1.764
(2.682)
(71)
4.169
3.807
(11.606)
(7.213)
Cash Flow from Operating Activities
Net Income for the Year
Adjustment to Reconcile Net Income to Net Cash and Cash Equivalents
Provided from Operating Activities
Depreciation and Amortization
Result in the Sale or Disposal of Fixed Assets, Net (or Write-off)
Transaction Costs of Debentures
Interest Expense on Loans, Debentures and Lease
Stock Option Plan
Provision for Tax, Civil and Labor Risks
Deferred and Current Taxes
Loss (Gain) on Derivative
Net Foreign Exchange Variation
Provision (Reversal) for Adjustment to Net Realizable Value
Provision (Reversal) for Loss on Assets
(977)
2.614
36.675
30.140
6.036
10.292
381.500
294.135
548.664
417.132
(88.620)
Changes in Assets and Liabilities
(Increase) Reduction in Accounts Receivable
(166.871)
154.522
157.244
1.612
(63.161)
(63.815)
(18.715)
(3.663)
(36.561)
19.771
(Increase) in Judicial Deposits
(2.884)
(131)
(1.318)
Increase (Reduction) in Funding - Financial Products Operations
36.331
88.351
(Reduction) in Financing - Imports
(3.422)
Increase (Reduction) in Suppliers
86.347
Reduction (Increase) in Inventories
6.839
(Increase) Reduction in Other Assets
(Reduction) in Salaries and Vacations Pay
(181)
83.876
110.950
(47.592)
(7.969)
(33.216)
37.467
(68.224)
(74.543)
(27.758)
(7.014)
(20.758)
(4.865)
Increase (Reduction) in Taxes Payable
32.056
21.277
(123.468)
(90.410)
Increase (Reduction) Obligations with Card Administrators
18.510
17.973
(2.185)
18.157
(Reduction) in Other Liabilities
(2.205)
(43.232)
(4.937)
(34.501)
2.865
(2.809)
(4.625)
(5.615)
(11.657)
Increase (Reduction) in Rent Payable
5.152
(Reduction) in Statutory Obligations
(11.657)
Cash Generated (Used by) Operating Activities
333.223
267.813
Payment of Income Tax and Social Contribution
(59.167)
Payment of Interest on Loans, Financing and Debentures
(20.549)
253.507
Net cash Generated (Used by) Operating Activities
(5.615)
444.015
411.483
(55.198)
(149.877)
(132.334)
(17.572)
(58.617)
(48.348)
195.043
235.521
230.801
Cash Flow from Investing Activities
Purchases of Property, Plant and Equipment Assets
Additions to Intangible Assets
(117.814)
(73.870)
(178.282)
(147.669)
(28.793)
(17.740)
(39.818)
(21.439)
Proceeds from Disposal of Fixed Assets
7
Net Cash Used in Investing Activities
(146.600)
119
(91.491)
30
(218.070)
257
(168.851)
Cash Flow from Financing Activities
Capital increase
23.073
5.319
23.073
5.319
Borrowings
24.000
15.180
46.373
15.180
(27.180)
(3.215)
(37.843)
(6.250)
Repayment of loans and financing
Consideration of leasing
555
Payment of interest on equity and dividends
Net Cash Used in Financing Activities
(7.880)
(3.023)
(178.941)
(155.139)
(178.941)
(155.139)
(158.493)
(137.317)
(155.218)
(143.913)
Effect of exchange rate changes on cash and cash equivalents
Reduction in Cash and Cash Equivalents
538
(53)
-
24
-
(51.639)
(33.765)
(137.743)
(81.963)
Cash and Cash Equivalents at the Beggining of the Quarter
748.236
753.394
834.340
801.592
Cash and Cash Equivalents at the End of the Quarter
696.597
719.629
696.597
719.629
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