Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Zamp SA (BSP:ZAMP3, Financial) achieved a quarterly record net operating revenue of BRL1.1 billion, marking a 19% growth compared to the same period last year.
- The company reported a significant increase in digital sales, which grew by 30% year-over-year, now accounting for 51.2% of total sales.
- Adjusted EBITDA grew by 21% to BRL149 million, with an impressive 43% growth in adjusted EBITDA ex-IFRS 16, reflecting strong operational leverage.
- Zamp SA opened three new franchises in the quarter, aligning with its strategy to optimize its restaurant portfolio.
- The company continues to prioritize modernization and remodeling of restaurants, focusing on enhancing customer experience and operational efficiency.
Negative Points
- Despite the growth, the company closed three operations, indicating ongoing challenges in optimizing its restaurant portfolio.
- The pace of store openings, particularly for the Popeyes brand, has slowed, reflecting potential challenges in expansion strategy.
- There is ongoing pressure from commodity costs, which, although currently favorable, could impact future profitability.
- The company reported a loss of BRL28 million, albeit a reduction of 57% compared to the same period last year.
- Zamp SA is in a transition phase, with 2024 being a year of adjustment, particularly for the Popeyes brand, which may affect short-term growth.
Q & A Highlights
Q: Since taking over as CEO, how have you invested most of your time, and how have recent initiatives impacted same-store sales and margins?
A: Paulo de Camargo, CEO, explained that his initial weeks were spent understanding the company's operations, including training and visiting stores across Brazil. He emphasized the importance of knowing the brand essence and regional differences. Regarding same-store sales, he highlighted a holistic approach involving pricing, traffic, and channel management, with a mature team handling revenue management effectively. Gabriel Magalhaes, CFO, added that the growth in same-store sales was driven by traffic and strategic initiatives, balancing gross margins with operational improvements.
Q: Can you elaborate on the company's priorities for organic growth, M&A strategy, and pricing positioning?
A: Paulo de Camargo, CEO, outlined priorities including enhancing customer experience through modernization and digital channels, focusing on sales and traffic, and leveraging existing brands for growth. He mentioned ongoing negotiations for potential M&A, like Starbucks, to create synergies and expand in Brazil. On pricing, he emphasized a dynamic approach, balancing market conditions and strategic decisions. Gabriel Magalhaes, CFO, noted that while the company doesn't provide specific guidance, they are preparing for a new cycle of organic growth, with plans for 35 to 45 Burger King openings in 2024.
Q: How does the company plan to manage cost pressures and reconcile ticket growth with profitability?
A: Gabriel Magalhaes, CFO, explained that the company has benefited from favorable commodity cycles and successful negotiations, which have kept cost pressures below inflation. This has allowed them to manage pricing creatively without significant margin impact. The focus remains on maximizing traffic and profitability through strategic pricing and operational efficiencies.
Q: What are the strategic segments for potential M&A, and how do they align with Zamp's current operations?
A: Gabriel Magalhaes, CFO, stated that Zamp is focused on acquiring iconic brands with strong scalability potential in Brazil. The aim is to find segments that complement existing operations, allowing for synergies in supply chain, media, and strategic partnerships. The company seeks to build a platform with a few strong brands rather than many.
Q: What are the expectations for organic growth in the coming years, particularly for Burger King and Popeyes?
A: Gabriel Magalhaes, CFO, mentioned that 2024 is a transition year, especially for Popeyes, with a focus on building brand equity and awareness. For Burger King, the company plans 35 to 45 new openings, with ambitions to expand further in subsequent years as the team prepares for a new cycle of organic growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
