VIVARA PARTICIPAÇÕES S.A. (Convenience Translation into English from the Original Previously Issued in Portuguese)
Vivara Participações S.A. and Subsidiaries
Report on Review of Interim
Financial Information for the
Three- and Six-month Periods
Ended June 30, 2021
Deloitte Touche Tohmatsu Auditores Independentes
Deloitte Touche Tohmatsu
Dr. Chucri Zaidan Avenue, 1.240 - 4th to 12th floors - Golden Tower 04711-130 - São Paulo - SP Brazil
Tel.: + 55 (11) 5186-1000
Fax: + 55 (11) 5181-2911
www.deloitte.com.br
(Convenience Translation into English from the Original Previously Issued in Portuguese)
REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION
To the Shareholders and Board of Directors of
Vivara Participações S.A.
Introduction
We have reviewed the individual and consolidated interim financial information of Vivara Participações S.A. ("Company"), included in the Interim Financial Information Form - ITR, for the quarter ended June 30, 2021, which comprises the balance sheet as at June 30, 2021, and the related statements of income, of comprehensive income, of changes in equity and of cash flows for the three- and six-month periods then ended, including the explanatory notes.
Management is responsible for the preparation of the individual and consolidated interim financial information in accordance with technical pronouncement CPC 21 and international standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, as well as for the presentation of such information in accordance with the standards issued by the Brazilian Securities and Exchange Commission - CVM, applicable to the preparation of Interim Financial Information - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review.
Scope of review
We conducted our review in accordance with Brazilian and International Standards on Review of Interim Financial Information (NBC TR 2410 and ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the standards on auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion on the individual and consolidated interim financial information
Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the ITR referred to above is not prepared, in all material respects, in accordance with technical pronouncement CPC 21 and international standard IAS 34, applicable to the preparation of ITR, and presented in accordance with the standards issued by the CVM.
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© 2021. For information, contact Deloitte Touche Tohmatsu Limited.
Other matters
Statements of value added
The individual and consolidated interim financial information referred to above includes the statements of value added - DVA for the six-month period ended June 30, 2021, prepared under the responsibility of the Company's Management and presented as supplemental information for international standard IAS 34 purposes. These statements were subject to review procedures performed together with the review of the Interim Financial Information - ITR to reach a conclusion on whether they are reconciled with the interim financial information and accounting records, as applicable, and if their form and content are consistent with the criteria set forth in technical pronouncement CPC 09 - Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that these statements of value added were not prepared, in all material respects, in accordance with CPC 09 and consistently with the accompanying individual and consolidated interim financial information taken as a whole.
The accompanying individual and consolidated interim financial information has been translated into English for the convenience of readers outside Brazil.
São Paulo, August 13, 2021
DELOITTE TOUCHE TOHMATSU | Marcelo de Figueiredo Seixas |
Auditores Independentes | Engagement Partner |
2021SP008374_REV_2021SP007895_Parecer_EN.docx | |
© 2021. For information, contact Deloitte Touche Tohmatsu Limited | 2 |
2Q21 PERFORMANCE COMMENT
HIGHLIGHTS IN THE QUARTER
Gross Revenue reached R$456.8 million in 2Q21, up 169.2% from 2Q20 and 18.4% from 2Q19.
Strong growth in same-store sales (SSS)(1): +160.4% in relation to 2Q20 and +13.8% in relation to 2Q19.
Consolidation of Joias em Ação Project, which accounted for 35.8% of digital sales in 2Q21.
Gross Profit came to R$246.2 million, with Gross Margin of 68.0%.
In the quarter, Adjusted EBITDA(2) totaled R$88.6 million, with Adjusted EBITDA Margin of 24.5%, up 450 bps from 2Q19.
Net income in the quarter amounted to R$81.7 million, with net margin of 22.6%. This result is the double of 2Q19 recurring net income.
FINANCIAL HIGHLIGHTS
Main Key Ratios (R$, 000) | 2Q21 | 2Q20 | 2Q19 | ∆ % 21vs20 ∆ % 21vs19 | 1H21 | 1H20 | 1H19 | ∆ % 21vs20 ∆ % 21vs19 | |||||
Gross Revenue (net of return) | 456,809 | 169,703 | 385,773 | 169.2% | 18.4% | 730,137 | 433,532 | 659,615 | 68.4% | 10.7% | |||
Net Revenue | 361,995 | 137,653 | 303,332 | 163.0% | 19.3% | 579,725 | 343,884 | 523,749 | 68.6% | 10.7% | |||
Gross Profit | 246,211 | 92,919 | 190,779 | 165.0% | 29.1% | 388,904 | 229,994 | 339,818 | 69.1% | 14.4% | |||
Gross Margin (%) | 68.0% | 67.5% | 62.9% | 51 bps | 512 bps | 67.1% | 66.9% | 64.9% | 20 bps | 220 bps | |||
Adjusted EBITDA | (2) | 88,616 | (421) | 60,734 | 21172.6% | 45.9% | 99,111 | 29,357 | 99,736 | 237.6% | -0.6% | ||
Adjusted Ebitda Margin (%) | 24.5% | -0.3% | 20.0% | 2479 bps | 446 bps | 17.1% | 8.5% | 19.0% | 856 bps | -195 bps | |||
Recurring Net Income | (3) | 81,657 | (1,668) | 40,770 | 4996.1% | 100.3% | 85,570 | 17,343 | 69,914 | 393.4% | 22.4% | ||
Recurring Net Margin (%) | 22.6% | -1.2% | 13.4% | 2377 bps | 912 bps | 14.8% | 5.0% | 13.3% | 972 bps | 141 bps | |||
SSS | (1) | (physical stores + e-commerce) | 160.4% | -55.0% | 10.7% | na | na | 63.8% | -34.9% | 9.8% | na | na | |
Operational Cash Generation | (4) | 107,118 | 111,086 | 9,151 | -3.6% | 1070.5% | 123,135 | 143,958 | (11,315) | -14.5% | 1188.3% | ||
- Same-StoreSales (SSS) considers gross revenue, net of returns, from stores in operation for 12 months, as well as revenues from e-commerce, and excludes permanent store closures.
- EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is a non-accounting measurement disclosed by the Company in compliance with CVM Instruction 527/12. The fixed portion of rent expenses, shown here, is booked in the Statement of Cash Flows as "Lease of Right-of-Use Assets" due to the adoption of IFRS 16. More detailed information on the accounting standard is available in Note 24 to the Financial Statements of the Company. For better comparison, we consider as "Fixed Rent" the sum of R$12.3 million related to the lease by reporting period and the reversal of R$3.8 million related to Discounts Obtained, which are already included in the accounting
EBITDA. - Managerial, non-accounting measurement prepared by the Company that does not fall under the scope of independent audit. Recurring Net Income, excluding the non-recurring effect of the favorable outcome of the lawsuit to exclude ICMS from the PIS/Cofins base, in the amount of R$116.1 million, recognized in 2Q19.
- Managerial, non-accounting measurement prepared by the Company that does not fall under the scope of independent audit.
GROSS REVENUE (Net of Returns)
Gross revenue in the quarter, net of returns, grew 169.2% in relation to the same period last year and 18.4% in relation to 2Q19. At the start of the quarter, in April, operations at physical stores were significantly affected by the closure of leading malls across Brazil with the intensification of restriction measures to combat the COVID-19 pandemic. The stores resumed operations gradually from April 18 and the Company ended the month with 100% of the stores reopened and sales down by 8%. On Mother's Day, which is traditionally an important date for the operation, Vivara registered record sales to end May with revenue growth of 19.4% in relation to 2Q19. Performance in June was even better, with growth of 38.1% in relation to 2Q19, thanks to the combination of an adequate inventory mix, with the launch of products that better fit the shopping profile for Valentine's Day in Brazil, and investments in marketing targeted at commercial products.
Net revenue grew 163.0% in relation to 2Q20 and 19.3% in relation to 2Q19.
Revenue per chanel (R$, 000) | 2Q21 | 2Q20 | 2Q19 | ∆ % 21vs20 ∆ % 21vs19 | 1H21 | 1H20 | 1H19 | ∆ % 21vs20 ∆ % 21vs19 | ||
Gross Revenue (net of return) | 456,809 | 169,703 | 385,773 | 169.2% | 18.4% | 730,137 | 433,532 | 659,615 | 68.4% | 10.7% |
Physical Stores | 374,900 | 59,456 | 354,498 | 530.5% | 5.8% | 587,907 | 297,705 | 606,170 | 97.5% | -3.0% |
Digital Sales | 78,865 | 108,414 | 22,260 | -27.3% | 254.3% | 136,794 | 130,556 | 39,445 | 4.8% | 246.8% |
Others | 3,045 | 1,833 | 9,015 | 66.1% | -66.2% | 5,436 | 5,270 | 13,999 | 3.1% | -61.2% |
Deductions | (94,814) | (32,050) | (82,441) | 195.8% | -15.0% | (150,412) | (89,648) | (135,865) | 67.8% | -10.7% |
Net Revenue | 361,995 | 137,653 | 303,332 | 163.0% | 19.3% | 579,725 | 343,884 | 523,749 | 68.6% | 10.7% |
SSS (physical stores + e-commerce) | 160.4% | -55.0% | 10.7% | na | na | 63.8% | -34.9% | 9.8% | na | na |
Monthly Revenue | Quarterly Same-Stores Sales Growth |
13,2% | 36,6% | 37.7% | SSS (2021 vs. 2019) +13.8% | |||
-6,4% | ||||||
+19.4% | +38.1% | 160,4% | ||||
-7.6% | +38.1% | |||||
10,7% | -53,9% | |||||
SSS (19x18) | SSS (20x19) | SSS (21x20) | ||||
April | May | June | July | |||
2019 | 2020 | 2021 | SSS (21X19) |
Sales by Channel
0,7%
17,3%
2Q21
82,1%
Digital sales accounted for 17.3% of total revenue in the quarter, up 254.3% from 2Q19, maintaining the level of penetration achieved last year, especially after September with the gradual resumption of operations at physical stores and the scaledown in restrictions and physical distancing measures.
Digital sales accounted for 63.9% of total sales in 2Q20, the period most affected by store closures, and 5.8% of total revenue in 2Q19.
Physical Stores Digital Sales Other Revenue
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Vivara Participações SA published this content on 30 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 August 2021 18:31:09 UTC.
