BRAZILIAN DISTRIBUTION CO COMPANHIA BRASILEIRA DE DISTR CBD - 6-K - 20050509 - EXHIBIT_99
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
CBD announces
1
st
Quarter 2005 results
São Paulo, Brazil, May 4
th
, 2005
– Companhia Brasileira de Distribuição
(CBD)
– (BOVESPA: PCAR4; NYSE: CBD), announces its 1
st
Quarter 2005 (“1Q05”) results. The Company’s operational and financial information, unless otherwise indicated, is presented on a consolidated basis and is denominated in Brazilian Reais in accordance with Brazilian Corporate Law. As a mean of comparison, refer to 2004 results.
Main Highlights
•
Gross sales totaled R$ 3,943.3 million in the 1Q05, representing a 15.5% growth over the same period of 2004;
•
Same store sales grew by 11.1% in the quarter;
•
Gross margin reached 28.9% in the 1Q05, compared to a 28.7% gross margin in 2004;
•
EBITDA grew 26.0% in the 1Q05, with a margin of 8.3% reaching R$ 272.3 million;
•
Net financial expenses fell by R$ 15.3 million;
•
EBT grew 302.1% as a result of the EBITDA increase and improved financial results;
•
Net Income totaled R$ 57.7 million in the quarter, representing a 106.9% growth over the same period of 2004;
•
Subsequent Events: New Shareholders Agreement (refer to Material Fact of May 4
th
, 2005) and acquisition of COOPERCITRUS chain.
Companhia Brasileira de Distribuição (CBD) is the largest company in the Brazilian retail sector, operating 546 stores in 12 Brazilian states. CBD operates under three formats: supermarkets (
Pão
de Açúcar, CompreBem e Sendas
), hypermarkets (
Extra
), and consumer electronics/home appliance stores (
Extra-Eletro
).
- 1 -
Comments on Sales Performance
CBD’s consolidated gross sales in the 1Q05 equaled R$ 3,943.3 million, representing a 15.5% growth over results obtained in the same period of 2004. Net sales totaled R$ 3,266.1 million, corresponding to a 16.3% growth. Sendas Distribuidora registered gross sales totaling R$ 812.3 million, while net sales totaled R$ 694.8 million. It is important to point out that Sendas Distribuidora started operating in February 2004 and, therefore, sales in the 1Q05 can only be compared to two months of operations in 2004.
In the 1Q05, same store sales registered a nominal growth of 11.1% representing a real growth of 3.4%. Impacting sales in the quarter were an unfavorable February calendar (one day less than the previous year) and a favorable March calendar (Easter positioning). Brazil’s improved consumption environment and increased sales in seasonal products account in the CBD’s solid performance. Furthermore, the Company also observed a gradual up trading trend in the consumption of high value-added items. The Extra and CompreBem formats presented double digit growth rates, surpassing the Company average.
Food products registered gains relative to past quarters resulting in a 9.1% growth over 1Q04 results. Sales of non-food products continue to present a strong performance, with a growth of 19.6%.
Gross Sales in Nominal Terms
Note: Same store sales figures include only stores whose operating period is longer than 12 months.
- 2 -
Operating Performance
The following comments on operating performance refer to CBD consolidated results, and, therefore, fully account for Sendas Distribuidora’s operating results (CBD joint venture with Sendas in the State of Rio de Janeiro).
Gross Income
In the 1Q05, CBD registered a gross income of R$ 943.2 million, representing a 16.8% growth over the same period in 2004. In spite of increased price competitiveness, CBD registered a gross margin of 28.9%, while 1Q04 gross margin equaled 28.7%. This scenario reflects gains of scale with suppliers and Sendas Distribuidora’s improved margin of 29.2% versus the 27.0% obtained in 1Q04.
EBITDA
The Company presented important improvements in the 1Q05 by increasing its productivity and reducing its operating expense structure. As a whole, expenses in the 1Q05 equaled 20.5% of net sales, while they equaled 21.1% in 1Q04. In the highlight were G&A expenses that fell from 4.1% in the 1Q04 to 3.6% in the current quarter.
As a result of increased gross margin and reduced operating expenses, EBITDA in the 1Q05 grew 26.0% versus a gross sales growth of 15.5% totaling R$ 272.3 million. The Company’s EBITDA margin reached 8.3%, representing an increase relative to the 7.7% margin registered in the same quarter in the previous year.
The main explanation for these results is the continuous strive to improve Sendas Distribuidora’s profitability. Sendas Distribuidora registered a 5.6% EBITDA margin in the period; result substantially superior to the 2.3% margin registered in the 1Q04. The 2005 result reflects an improvement in sales as well scale and productivity gains.
Financial Result
Financial expenses in the quarter totaled R$ 170.4 million, with a 7.2% growth relative to the same period in the previous year. These results were negatively impacted by an increase in reported funding costs in the period. On the other hand, the Company presented growth in financial income, which increased from R$ 75.3 million to R$ 102.1 million. The increase is attributed to higher revenues generated by financial instruments, and higher credit based sales of durable goods since the second half of 2004. Net financial expenses totaled R$ 68.3 million versus R$ 83.6 millions in the same time period of the previous year.
Income before Income Tax (EBT)
Resulting from a higher EBITDA and improved financial results, CBD recorded an EBT of R$ 58.0 million, 302.1% higher than the R$ 14.4 million recorded in 2004.
- 3 -
Minority Interest
Sendas Distribuidora’s recorded a net loss of R$ 22.2 million. Despite the previously mentioned improvements in EBITDA, Sendas Distribuidora was negatively impacted by elevated net financial expenses totaling R$ 37.6 million. Sendas Distribuidora’s net loss generated a minority interest of R$ 12.7 million for CBD.
Net Income of R$ 57.7 million and 107% Growth
1Q05 net income totaled R$ 57.7 million. The result was impacted by an income tax provision of R$ 13.0 million. Net income of 1Q05 represents a 106.9% increase over the result obtained in the 1Q04; period during which net income totaled R$ 27.9 million (impacted by an income tax credit of R$ 8.6 million).
Working Capital
Inventory turnover rate in the 1Q05 was 41.4 days, a little better than the 44.4 days registered in the 1Q04. The average term with suppliers was recorded at 56.3 days, same performance as that registered in the 1Q04.
Investments
In the 1Q05, investments equaled R$ 139.0 million versus R$ 127.0 million in the 1Q04. The main highlights were:
—
Opening of 2 new stores (1 Pao de Acucar in Ceara, and 1 Extra in Sao Paulo);
—
Construction of 2 Extra stores (one in São Paulo and 1 in Rio Grande do Norte). The opening date for both stores is scheduled in the second quarter of 2005;
—
Store remodelings;
—
Renovations at 20 of the Sendas Banner stores;
—
Conversion of 3 ABC Barateiro stores into Sendas stores;
—
Opening of gas stations and drugstores;
—
Investments in information technology and logisitics.
Subsequent Event
On May 1st 2005, CBD acquired the COOPERCITRUS chain of Cooperativa dos Cafeicultures e Citricultores de São Paulo. The 7 stores and three gas stations are located in Midwestern part of the State of São Paulo. Their sales area equals approximately 9,000 m2 and, in 2004, generated R$ 154 million in gross revenue. The stores will soon be converted to fit the CompreBem’s Business Unit model.
- 4 -
Consolidated Income Statement - Corporate Law Method (thousand R$)
1st Quarter
2005
2004
%
Gross Sales Revenue
3,943,262
3,414,307
15.5%
Net Sales Revenue
3,266,086
2,809,413
16.3%
Cost of Goods Sold
(2,322,867
)
(2,001,820
)
16.0%
Gross Profit
943,219
807,593
16.8%
Operating (Expenses) Income
Selling
(551,523
)
(478,149
)
15.3%
General and Administrative
(119,402
)
(113,285
)
5.4%
Total Operating Expenses
(670,925
)
(591,434
)
13.4%
Earnings before interest, taxes,
depreciation, amortization-EBITDA
272,294
216,159
26.0%
Depreciation and Amoritzation
(121,738
)
(103,515
)
17.6%
Earnings before interest and taxes
-EBIT
150,556
112,644
33.7%
Taxes and Charges
(17,065
)
(14,011
)
21.8%
Financial Income
102,074
75,252
35.6%
Financial Expenses
(170,368
)
(158,854
)
7.2%
Net Financial Income (Expense)
(68,294
)
(83,602
)
-18.3%
Equity Income/Loss
(375
)
(740
)
Operating Results
64,822
14,291
353.6%
Non-Operating Results
(6,826
)
132
Income Before Income Tax
57,996
14,423
302.1%
Income Tax
(12,996
)
4,848
Income Before Minority Interest
45,000
19,271
133.5%
Partipação Minoritária
12,738
8,634
Minority Interest
57,738
27,905
106.9%
Net Income per 1,000 shares
0.51
0.25
106.9%
N° of shares (in thousand)
113,522,239
113,522,239
% of Net Sales
1Q/05
1Q/04
Gross Profit
28.9%
28.7%
Total Operating Expenses
-20.5%
-21.1%
Selling
-16.9%
-17.0%
General and Administrative
-3.6%
-4.1%
EBITDA
8.3%
7.7%
Depreciation and Amortization
-3.7%
-3.7%
EBIT
4.6%
4.0%
Taxes and Charges
-0.5%
-0.5%
Net Financial Income (Expense)
-2.1%
-3.0%
Income Before Income Tax
1.8%
0.5%
Income Tax
-0.4%
0.2%
Net Income
1.8%
1.0%
Note: In accordance with CVM instruction 408/2004, the Company consolidates financial information for Pão de Açúcar Receivables Securitization Fund.
- 5 -
Consolidated Balance Sheet – Corporate Law Method (thousand R$)
ASSETS
1st Quarter/05
1st Quarter/04
Current Assets
3,909,920
4,266,462
Cash and Banks
89,311
233,809
Short-Term Investments
837,476
945,661
Credit
412,476
497,634
Installment Sales
124,146
104,617
Post-Dated Checks
31,251
28,572
Credit Cards
216,215
287,151
Tickets, vouchers and others
51,295
87,032
Allowance for Doubtful Accounts
(10,431
)
(9,738
)
Receivables Securitization Fund
688,374
701,830
Inventories
1,049,477
1,089,648
Advances to suppliers and employees
33,056
32,045
Taxes recoverable
506,363
521,078
Others
293,387
244,757
Long-Term Receivables
1,038,297
1,015,515
Long-Term Investments
126,340
121,269
Deferred Income Tax
398,667
387,462
Accounts Receivable
316,347
313,632
Others
196,943
193,152
Permanent Assets
5,771,414
5,758,240
Investments
259,901
263,621
Property, Plant and Equipment
4,474,655
4,425,445
Deferred Charges
1,036,858
1,069,174
TOTAL ASSETS
10,719,631
11,040,217
LIABILITIES
1st Quarter/05
1st Quarter/04
Current Liabilities
2,530,534
3,248,421
Suppliers
1,360,820
1,545,449
Financing*
660,627
1,234,898
Payable on Purchase of Assets
5,775
12,636
Debentures
44,580
69,416
Taxes and Social Contributions
79,460
54,617
Salaries and Payroll Charges
146,223
150,257
Dividends
89,059
89,059
Others
143,990
92,089
Long-Term Liabilities
3,741,537
3,389,235
Financing*
1,285,249
875,911
Payable on Purchase of Assets
3,146
3,105
Debentures
401,490
524,553
Taxes in Installments
327,677
331,841
Provision for Income Tax
10,854
10,658
Provision for Contingencies
955,002
911,666
Others
114,375
114,375
Recallable Fund Quotas**
643,744
617,126
Minority Interests
338,832
351,571
Shareholder's Equity
4,108,728
4,050,990
Capital
3,509,421
3,509,421
Capital Reserves
-
-
Profits Reserves
599,307
541,569
TOTAL LIABILITIES
10,719,631
11,040,217
* CBD is not exposed to exchange variation effects since it contracts swap transactions to CDI (Brazilian Overnight Rate) in foreign currency loans.
** Receivables Securitization Fund
Note: In accordance with CVM instruction 408/2004, the Company consolidates financial information for Pão de Açúcar Receivables Securitization Fund.
- 6 -
Gross Sales per Format (R$ thousand)
1st Quarter
2005
%
2004
%
Var.(%)
Pão de Açúcar
1,012,458
25.7%
971,822
28.5%
4.2%
Extra
1,902,936
48.3%
1,609,594
47.1%
18.2%
CompreBem
650,157
16.5%
565,062
16.6%
15.1%
Extra Eletro
68,325
1.7%
68,357
2.0%
0.0%
Sendas
309,386
7.8%
199,472
5.8%
55.1%
CBD
3,943,262
100.0%
3,414,307
100.0%
15.5%
Net Sales per Format (R$ thousand)
1st Quarter
2005
%
2004
%
Var.(%)
Pão de Açúcar
835,688
25.6%
798,099
28.4%
4.7%
Extra
1,567,277
48.0%
1,316,227
46.8%
19.1%
CompreBem
543,638
16.6%
470,875
16.8%
15.5%
Extra Eletro
51,314
1.6%
52,497
1.9%
-2.3%
Sendas
268,169
8.2%
171,717
6.1%
56.2%
CBD
3,266,806
100.0%
2,809,415
100.0%
16.3%
Sales Breakdown (% of Net Sales)
2005
2004
1
st
Q
1
st
Q
Year
Cash
51.8%
53.2%
52.0%
Credit Card
36.5%
35.9%
36.5%
Food Voucher
7.3%
6.3%
7.1%
Credit
4.4%
4.6%
4.4%
Post-dated Checks
3.0%
3.4%
3.2%
Installment Sales
1.4%
1.2%
1.2%
Stores by Format (% of Net Sales)
Pão de
Açúcar
Extra
Extra-
Electro
CompreBem
Sendas
CBD
Sales
Area (m
2
)
Number of
Employees
12/31/2004
196
72
55
165
63
551
1,144,749
63,484
Opened
1
1
2
Closed
(5)
(2)
(7)
Converted
(3)
3
-
3/31/2005
197
73
50
160
66
546
1,175,111
63,344
- 7 -
Data per Format on March 31, 2005
#
Checkouts
#
Employees
#
Stores
Sales
Area (m
2
)
Pão de Açúcar
2,497
15,287
197
261,403
Extra
3,477
22,866
73
561,413
CompreBem
1,804
8,654
160
194,058
Extra Eletro
165
574
50
33,713
Sendas
1,011
6,315
66
124,524
Total Stores
8,954
53,696
546
1,175,111
Administration
--
2,419
--
--
Loss Prevention
--
3,481
--
--
Distribution Centers
--
3,748
--
--
Total CBD
8,954
63,344
546
1,175,111
Productivity Indexes (in nominal R$)
Gross Sales per m
2
/month
1
st
Q/05
1
st
Q/04
Var.(%)
Pão de Açúcar
1,297
1,188
9.2%
Extra
1,129
1,066
5.9%
CompreBem
1,100
900
22.2%
Extra Eletro
647
633
2.2%
CBD
1,149
1,049
9.5%
Gross sales per employee/month
1
st
Q/05
1
st
Q/04
Var.(%)
Pão de Açúcar
22,044
21,010
4.9%
Extra
28,203
25,317
11.4%
CompreBem
25,221
20,818
21.1%
Extra Eletro
38,449
33,607
14.4%
CBD
25,764
23,127
11.4%
Average ticket - Gross sales
1
st
Q/05
1
st
Q/04
Var.(%)
Pão de Açúcar
24.7
22.9%
7.9%
Extra
48.0
46.0
4.3%
CompreBem
18.9
17.1
10.5%
Extra Eletro
364.4
365.4
-0.3%
CBD
31.5
29.0
8.6%
Gross sales per checkout/month
1
st
Q/05
1
st
Q/04
Var.(%)
Pão de Açúcar
135,710
122,984
10.3%
Extra
184,739
164,079
12.6%
CompreBem
118,555
98,405
20.5%
Extra Eletro
130,563
127,294
2.6%
CBD
152,788
134,005
14.0%
* Information referring to sales area, employees and checkouts were calculated based on average amounts proportional to the period during which the stores were open.
The productivity indexes, above mentioned, don't reflect stores operations under Sendas and Bon Marché banners, which were incorporated on February 1, 2004.
- 8 -
1Q05 Results Conference Call
CBD held its 1st Quarter 2005 Earnings Release conference call on Friday March 6th, 2005.
Local Conference Call:
10:00 am (Brasilia time); 9:00 am (ET USA). To register please call the following number a few minutes before the start of the call (55 11) 2101-1490, Code: CBD. A conference call replay will be made available after the end of the call and can be accessed by dialing (55 11) 2101-1490, Code: CBD.
International Conference Call:
12:00 pm (Brasilia time); 11:00 (ET USA). To register please call the following number a few minutes before the start of the call (+1 973) 935-2401, Code: CBD or 5963682. The Web cast is available on the Company site
www.cbd-ri.com.br/eng
.
A conference call replay will be made available after the end of the call and can be accessed by dialing (+1 973) 341-3090, Code: 5963682.
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
MZ Consult
Fernando Tracanella
Tereza Kaneta
Investor Relations Director
Phone: 55 (11) 5509 3772
Daniela Sabbag
E-mail:
tereza.kaneta@mz-ir.com
Manager
Phone: 55 (11) 3886 0421 Fax: 55 (11) 3884 2677
Email:
cbd.ri@paodeacucar.com.br
Website:
http://www.cbd-ri.com.br/
Statements included in this report regarding the Company’s business outlooks, the previews on operating and financial results, and referring to the Company’s growth potential are merely projections and were based on Management’s expectations regarding the Company’s future. Those projections are highly dependent on market changes, Brazilian general economic performance, industry and international markets, and are therefore subject to change.
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