[August 14, 2017] |
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Netshoes Limited Reports Second Quarter 2017 Results
Netshoes (Cayman) Ltd. (NYSE:NETS) ("Netshoes"), Latin America's leading
online retailer of sporting and lifestyle goods, today reported
unaudited consolidated financial results for the three and six-month
periods ending June 30, 2017. The results are stated in Brazilian Reais
("R$") and prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting".
Marcio Kumruian, Founder and CEO of Netshoes,
commented:
We achieved strong topline growth and extended our leading market share
in the second quarter, while making further headway on strategic
initiatives to enhance our profitability.
GMV and Net Sales increased 28.7% and 17.3% respectively on an FX
neutral basis year-over-year, as we further expanded our customer base
and market share. Year-over-year, the number of registered members grew
20.8% and our active customer base expanded 17.9%. Importantly, we
continue to be at the forefront of the mobile opportunity with 42.9% of
orders placed from mobile devices, compared to 28.7% in the year-ago
period, resulting in greater customer loyalty and purchase frequency.
The strong topline performance comes despite a tough year-over-year
comparison (strong 2Q16 performance) and continued weak consumption
environment. The pickup in momentum underscores management's successful
actions to introduce new products in attractive and profitable
verticals, notably the Zattini brand, Marketplace in Brazil and private
label brands. These offerings represent key growth drivers, and their
increasing scale and contribution to results is fueling topline growth
as well as operating leverage.
Against a backdrop of difficult consumption trends, we took the
strategic decision to expand our marketing investments and selectively
discount products to offer a strong customer experience, which also
resulted in market share gains. This investment in customer acquisition
resulted in a lower year-over-year gross margin in the quarter, yet
bringing a strong topline growth rate in a challenging retail market. In
addition, we registered an increase in returns in our growing B2B
nutritional supplement vertical, an initiative that we launched in early
2016 to complement our core B2C business. The increase in returns was
driven by a product mix mismatch, which led to an increase in returns of
products from some of our B2B clients.
We remain committed to improving profitability alongside growth, and
achieved further leverage in fixed expenses during the quarter. We also
shortened our net working capital cycle, having strengthened our
inventory management in the period and reduced trade accounts receivable
days.
As a newly public company with the resources to execute our long-term
strategy, we have entered an exciting phase in Netshoes' expansion and
development. Our increased brand awareness helped us attract additional
suppliers in the quarter, and we were chosen by premium brands, namely
Asics and Olympikus, to launch their new webstores and run their online
strategy. We also bolstered our Marketplace and private label offerings
with the addition of seasoned executives bringing solid industry
experience to these key initiatives.
By diligently executing our long-term strategy, investing in sustainable
growth and creating the best shopping experience for our customers, we
are well positioned to execute our long-term plans and deliver sustained
value to our shareholders.
Operating and Financial Highlights
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Change %
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Change %
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Operating Data
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2Q-
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2Q-
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YoY
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YoY FX
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1H-
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1H-
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YoY
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YoY FX
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2016
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2017
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Neutral
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2016
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2017
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Neutral
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Registered Members (in millions)
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16.5
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20.0
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20.8%
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16.5
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20.0
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20.8%
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-
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Active Customers (in millions)
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5.0
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5.9
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17.9%
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5.0
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5.9
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17.9%
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-
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Orders Placed by Repeat Customers
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74.0%
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75.6%
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+1.6p.p.
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-
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74.5%
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76.2%
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+1.7p.p.
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-
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Invoiced Orders (in millions)
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2.3
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2.9
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25.1%
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4.4
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5.4
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23.0%
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-
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Orders Placed from Mobile Device
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28.7%
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42.9%
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+14.1p.p.
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-
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27.8%
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41.0%
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47.4%
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-
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Average Basket Size (in R$)
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210.7
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209.0
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-0.8%
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1.4%
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209.4
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205.4
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-1.9%
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1.0%
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GMV (in millions)
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500.1
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630.7
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26.1%
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28.7%
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940.4
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1,161.9
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23.5%
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27.1%
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Marketplace GMV (as % of total GMV)
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0.6%
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6.4%
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+5.9p.p.
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-
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0.4%
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5.9%
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+5.5p.p.
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-
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Change %
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Change %
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Financial Data (In R$ Millions)
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2Q-
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2Q-
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YoY
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YoY FX
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1H-2016
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1H-2017
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YoY
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YoY FX
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2016
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2017
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Neutral
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Neutral
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Net Sales
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401.6
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461.3
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14.9%
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17.3%
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749.5
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857.6
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14.4%
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17.7%
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Net Sales - Brazil
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354.5
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407.5
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14.9%
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-
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657.9
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763.0
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16.0%
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-
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Net Sales - International
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47.1
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53.8
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14.2%
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35.0%
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91.6
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94.5
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3.2%
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29.8%
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Gross Margin %
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35.4%
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33.1%
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-2.2p.p.
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-
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33.0%
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33.0%
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0.0p.p.
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EBITDA Margin %
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-1.4%
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-1.9%
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-0.5p.p.
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-6.5%
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-0.7%
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+5.8p.p.
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(1) For a reconciliation of net sales to GMV, see page 10 below.
Financial Highlights
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Net sales were R$461.3 million in 2Q-2017, a 14.9% increase YoY
(+17.3% on an FX neutral basis). The result was negatively impacted by
an increase of R$12.5 million of returns recorded in the B2B business.
In 1H-2017, net sales amounted to R$857.6 million, representing a
14.4% increase over the year-ago period (+17.7% on an FX neutral
basis).
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The Brazilian operation's net sales grew 14.9% YoY to R$407.5 million,
while the International operation posted net sales growth of 14.2% on
an as reported basis and 35.0% on an FX neutral basis. In 1H-2017, net
sales in Brazil amounted to R$763.0 million (+16.0% YoY) and R$94.5
million in the international operation (+3.2% YoY and +29.8% YoY on an
FX neutral basis).
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Gross profit totaled R$152.8 million (33.1% gross margin) in 2Q-2017,
compared to R$142.1 million (35.4% gross margin) in 2Q-2016 and was
negatively impacted by strategic price discounting initiatives
intended to expand the Company's market share and customer base. In
addition, the Company registered a negative impact of R$2.1 million as
a result of an increase in returns in the B2B business. Gross profit
amounted to R$282.6 million in 1H-2017 (33.0% gross margin) and to
R$247.1 million in 1H-2016 (33.0% gross margin). Excluding a
non-recurring R$10.1 million positive effect on cost of sales relative
to VAT tax credits recorded in 1Q-2017, gross profit for 1H-2017 would
have been R$272.5 million, representing a 31.8% gross margin.
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Adjusted Selling and Marketing Expenses were R$119.8 million (26.0% of
net sales) in 2Q-2017, compared to R$103.9 million in 2Q-2016 (25.9%
of net sales). This result equated to a 15.3% increase YoY, mainly due
to higher marketing investments (Zattini campaigns in Brazil and Hot
Sale season in Mexico and Argentina), and represented a 0.1p.p.
increase as a percentage of net sales. In 1H-2017, Adjusted Selling
and Marketing Expenses amounted to R$220.5 million (25.7% of net
sales), a 1.8 p.p. decrease when compared with R$206.2 million (27.5%
of net sales) recorded for 1H-2016.
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Adjusted General and Administrative Expenses were R$36.6 million (7.9%
of net sales) in 2Q-2017, compared to R$39.7 million in 2Q-2016 (9.9%
of net sales), representing a 2.0 p.p. improvement YoY due to expense
reduction initiatives and operating leverage. Adjusted General and
Administrative Expenses in 1H-2017 amounted to R$61.0 million (7.1% of
net sales), a 3.7 p.p. decrease compared with R$80.7 million (10.8% of
net sales) in 1H-2016. Excluding the R$12.9 million non-recurring
positive effect registered in 1Q-2017 under personnel expenses related
to adjustments in the Company's stock option plan1,
adjusted General and Administrative expenses for 1H-2017 would have
been R$73.8 million (8.6% of net sales), representing a 2.2 p.p.
margin improvement over 1H-2016.
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EBITDA was negative R$8.9 million in 2Q-2017, compared to negative
R$5.8 million EBITDA in 2Q-2016. The EBITDA margin declined 0.5 p.p.
to 1.9%, as a result of the previously mentioned effects. EBITDA for
2Q-2017 included a negative impact of R$2.1 million as a result of an
increase in returns in the B2B business. EBITDA for 1H-2017 amounted
to negative R$5.8 million (-0.7% of net sales), up 88.0% or 5.8p.p.
when compared to negative R$48.4 million (-6.5% of net sales) for the
same period last year. Excluding the non-recurring effects recorded in
1Q-2017, EBITDA for 1H-2017 would have been negative R$28.8 million,
with a negative 3.4% EBITDA margin, representing a 3.1 p.p. margin
improvement over 1H-2016.
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EBITDA for the Brazilian operation ("EBITDA Brazil") was positive
R$6.0 million (1.5% EBITDA margin) in 2Q-2017, compared to positive
R$6.3 million (1.8% EBITDA margin) in 2Q-2016. EBITDA Brazil for
1H-2017 amounted to positive R$19.0 million (2.5% of net sales),
compared to negative R$22.2 million (-3.4% of net sales) for the same
period last year. Excluding the non-recurring effects recorded in
1Q-2017, EBITDA for 1H-2017 would have been negative R$4.0 million,
with a negative 0.5% EBITDA margin, a 2.9 p.p. margin improvement over
1H-2016.
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EBITDA for the International operations ("EBITDA International")
amounted to negative R$11.8 million (negative 21.9% EBITDA margin) in
2Q-2017, a 0.3 p.p. margin improvement over 2Q-2016. EBITDA
International for 1H-2017 amounted to negative R$20.6 million (-21.8%
of net sales), compared to negative R$21.6 million (-23.6% of net
sales) for the same period last year, representing a 1.8 p.p. margin
improvement.
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Net income was negative R$35.2 million (negative 7.6% net margin) in
2Q-2017, compared to negative R$33.6 million in 2Q-2016 (negative 8.4%
net margin), representing a 0.8 p.p. margin improvement. In 1H-2017,
Net income was negative R$72.9 million (negative 8.5% net margin), a
4.2 p.p. margin improvement when compared with negative R$95.3 million
(negative 12.7% net margin) recorded in 1H-2016.
Business Highlights
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Consistent growth in customer metrics, with registered members
reaching 20.0 million in 2Q-2017 (+20.8% YoY) and active customers
reaching 5.9 million (+17.9% YoY). During the quarter, invoiced orders
from repeat customers represented 75.6% of total orders, a 1.6 p.p.
increase YoY.
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Continued migration of consumers purchasing habits to mobile devices,
with 42.9% of total orders placed from mobile devices in 2Q-2017, a
14.1 p.p. increase over 2Q-2016.
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Consolidated Gross Merchandise Volume (GMV) increased 26.1% YoY
(+28.7% on an FX neutral basis) to R$630.7 million, mainly driven by a
25.1% increase in the number of invoiced orders. GMV for 1H-2017
amounted to R$1,161.9 million, representing a 23.5% YoY increase
(+27.1% on an FX neutral basis).
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Total marketplace GMV in 2Q-2017 was R$40.7 million and accounted for
6.4% of total GMV (7.3% in Brazil), with a total vendor base comprised
of 505 vendors, an increase of 430 qualified third-party B2C vendors
when compared to 2Q-2016 and 130 vendors over 1Q-2017 (+35%).
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Zattini continues to be among the fastest growing fashion and beauty
eCommerce sites in Brazil, with a 64.0% YoY increase in net sales.
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Shoestock, a private label brand the Company successfully re-launched
in March 2017, continues to report solid growth combined with high
margins. Shoestock is available to customers nationwide via Netshoes'
online platform and also offers a complete omni-channel shopping
experience to customers in São Paulo city through a brick-and-mortar
store. This store is fully integrated with the Company's online
operations and provides significant cross-selling opportunities with
other fashion and beauty categories.
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Together with Shoestock, the Company's collection of private label,
white label brands and licensing products continues to grow as a
proportion of revenues, reflecting increased sales of the existing
portfolio and new products. Sales for these categories represented
8.4% of net sales in 2Q-2017 (9.5% in Brazil), equating to a 2.2 p.p.
increase YoY.
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The efficiency of shipping increased, reflecting higher revenues and
lower shipping costs driven by additional scale. Net shipping cost as
a percentage of net sales decreased to 4.4% in 2Q-2017 from 6.1% in
FY2016.
1 Based on the Company's historical practice of repurchasing
its shares from employees at fair market value upon separation pursuant
to repurchase rights, the option grants were accounted for as
"cash-settled awards" (stock appreciation rights) where the fair market
value of the liability is re-measured at each reporting date. The
positive adjustment in 1Q-2017 reflects the reduction in the value of
this liability based on the IPO pricing range. The Company does not plan
to repurchase its shares from option holders following its IPO so we do
not anticipate liability adjustments related to these awards going
forward.
Subsequent Events
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In July, the Company has contracted a special credit line with FINEP
totaling R$79.7 million to finance future technology research and
development initiatives. FINEP is a Brazilian state-owned institution
dedicated to promote the country's development in science, technology
and innovation. This credit line has more favorable market terms and
conditions when compared to traditional bank financing. Proceeds will
be received in three tranches and amortized over nine years. The first
tranche will be received in September 2017, with the subsequent
tranches disbursed according to the Company's progress on specified
projects.
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Also in July, the Company took action to further improve the customer
experience while streamlining its operations by implementing an
integrated IT sales platform in Mexico and Argentina's operations. The
platform is highly customized and will enable us to be more agile and
fast paced as it reduces the time to market and cost of implementation
of new technologies and different types of strategies in the online
stores the Company operates. It was developed to be fully "Cloudable"
and support desktop, mobile and app channels. By the end of 3Q-2017,
the Company will have all online stores in the three countries it
operates integrated in the same IT sales platform.
Financial and Operating Performance
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Change %
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Change %
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Consolidated P&L (In R$ Millions)
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2Q-
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2Q-
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YoY
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FX
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1H-
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1H-
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YoY
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FX
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2016
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2017
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Neutral
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2016
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2017
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Neutral
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GMV ¹
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500.1
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630.7
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26.1%
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28.7%
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940.4
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1,161.9
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23.5%
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27.1%
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Net Sales - Brazil
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354.5
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407.5
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14.9%
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657.9
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763.0
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16.0%
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Net Sales - International
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47.1
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53.8
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14.2%
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35.0%
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91.6
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94.5
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3.2%
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29.8%
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Net Sales
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401.6
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461.3
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14.9%
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17.3%
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749.5
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857.6
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14.4%
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17.7%
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Cost of Sales
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(259.6)
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(308.5)
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18.8%
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(502.4)
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(575.0)
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14.4%
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Gross Profit
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142.1
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152.8
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7.6%
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247.1
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282.6
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14.4%
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% Gross Margin
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35.4%
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33.1%
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-2.2p.p.
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33.0%
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33.0%
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0.0p.p.
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Adjusted Selling and Marketing Expenses ²
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(103.9)
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(119.8)
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15.3%
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(206.2)
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(220.5)
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7.0%
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% of Sales
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-25.9%
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-26.0%
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0.1p.p.
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-27.5%
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-25.7%
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-1.8p.p.
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Adjusted General and Adm. Expenses ²
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(39.7)
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(36.6)
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-7.8%
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(80.7)
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(61.0)
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-24.5%
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% of Sales
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-9.9%
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-7.9%
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-1.9p.p.
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-10.8%
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-7.1%
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-3.7p.p.
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Other Operating Expenses
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(1.7)
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(1.0)
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-40.6%
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(3.4)
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(2.1)
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-37.5%
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% of Sales
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-0.4%
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-0.2%
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-0.2p.p.
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-0.5%
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-0.2%
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-0.2p.p.
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Certain Other Net Financial Result
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(2.6)
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(4.3)
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65.2%
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(5.2)
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(4.8)
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-7.9%
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% of Sales
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-0.6%
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-0.9%
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0.3p.p.
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-0.7%
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-0.6%
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-0.1p.p.
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Adjusted Operating Expenses
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(147.9)
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(161.7)
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9.4%
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(295.5)
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(288.4)
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-2.4%
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% of Sales
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-36.8%
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-35.1%
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-1.8p.p.
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-39.4%
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-33.6%
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-5.8p.p.
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EBITDA
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(5.8)
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(8.9)
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-52.9%
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(48.4)
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(5.8)
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88.0%
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% of Sales
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-1.4%
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-1.9%
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-0.5p.p.
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-6.5%
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-0.7%
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5.8p.p.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization and Depreciation
|
|
(8.1)
|
|
(7.6)
|
|
-6.7%
|
|
|
|
(15.0)
|
|
(15.7)
|
|
4.2%
|
|
|
% of Sales
|
|
-2.0%
|
|
-1.6%
|
|
-0.4p.p.
|
|
|
|
-2.0%
|
|
-1.8%
|
|
-0.2p.p.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Adjusted Financial Result ³
|
|
(19.70)
|
|
(18.7)
|
|
-5.2%
|
|
|
|
(31.8)
|
|
(51.4)
|
|
61.5%
|
|
|
% of Sales
|
|
-4.9%
|
|
-4.0%
|
|
-0.9p.p.
|
|
|
|
-4.2%
|
|
-6.0%
|
|
1.7p.p.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Income Tax
|
|
0.0
|
|
(0.0)
|
|
-
|
|
|
|
0.0
|
|
(0.0)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss)
|
|
(33.6)
|
|
(35.2)
|
|
-4.5%
|
|
|
|
(95.3)
|
|
(72.9)
|
|
23.5%
|
|
|
% of Sales
|
|
-8.4%
|
|
-7.6%
|
|
0.8p.p.
|
|
|
|
-12.7%
|
|
-8.5%
|
|
4.2p.p.
|
|
|
(1) For a reconciliation of net sales to GMV, see page 10 below.
(2) For a reconciliation of Marketing and Selling expenses to Adjusted
Marketing and Selling Expenses and General and Administrative
Expenses to Adjusted General and Administrative Expenses, see page 12
below.
(3) For a reconciliation of financial income (expense) to Net Adjusted
Financial Result, see page 11 below.
Net Working Capital Cycle
|
|
|
|
|
In Days
|
|
2Q-2016
|
|
2Q-2017
|
Trade Accounts Receivable
|
|
25
|
|
20
|
Inventories
|
|
135
|
|
127
|
Trade Accounts Payable
|
|
101
|
|
101
|
Cash Conversion Cycle
|
|
60
|
|
46
|
In 2Q-2017, the Company's net working capital cycle was reduced by 14
days to 46 days, compared to 60 days in 2Q-2016. This reduction was
mainly attributable to an 8 day reduction in the inventory cycle (from
135 days in 2Q-2016 to 127 days in 2Q-2017), driven by strict inventory
control and improved inventory planning. In addition, the trade accounts
receivable cycle was reduced by 5 days to 20 days due to the factoring
of credit card accounts receivable. The trade accounts payable cycle
remained stable at 101 days.
There remains significant opportunity to further streamline the working
capital cycle. In 2Q-2017, the Company decided to increase the minimum
threshold for installment payments to R$40 from R$25, which will reduce
the average number of installments, benefiting the trade accounts
receivables cycle in the next quarters. Additionally, the reduction in
the inventory cycle which began in the second quarter is expected to
continue as the Marketplace expands its share of GMV and the Company
gradually adjusts its procurement curves. Furthermore, trade accounts
payable tends to increase as Zattini grows its share of revenues and the
Company continues to expand its scale.
Indebtedness
Debt (In R$ Millions)
|
|
2Q-
|
|
4Q-
|
|
1Q-
|
|
2Q-
|
|
|
2016
|
|
2016
|
|
2017
|
|
2017
|
Working Capital
|
|
147.6
|
|
263.7
|
|
277.7
|
|
260.9
|
Short-term
|
|
71.1
|
|
36.4
|
|
71.6
|
|
76.0
|
Long-term
|
|
76.5
|
|
227.2
|
|
206.1
|
|
185.0
|
|
|
|
|
|
|
|
|
|
Convertible Notes
|
|
-
|
|
-
|
|
84.9
|
|
-
|
Short-term
|
|
-
|
|
-
|
|
-
|
|
-
|
Long-term
|
|
-
|
|
-
|
|
84.9
|
|
-
|
|
|
|
|
|
|
|
|
|
Debenture
|
|
141.1
|
|
122.3
|
|
112.8
|
|
103.2
|
Short-term
|
|
38.8
|
|
38.6
|
|
38.4
|
|
38.1
|
Long-term
|
|
102.2
|
|
83.6
|
|
74.3
|
|
65.1
|
|
|
|
|
|
|
|
|
|
Other
|
|
1.9
|
|
1.4
|
|
1.2
|
|
1.0
|
Short-term
|
|
0.89
|
|
0.89
|
|
0.89
|
|
0.89
|
Long-term
|
|
0.99
|
|
0.54
|
|
0.32
|
|
0.10
|
|
|
|
|
|
|
|
|
|
TOTAL DEBT (R$)
|
|
290.5
|
|
387.4
|
|
476.5
|
|
365.1
|
Short-term (%)
|
|
38%
|
|
20%
|
|
23%
|
|
31%
|
Long-term (%)
|
|
62%
|
|
80%
|
|
77%
|
|
69%
|
|
|
|
|
|
|
|
|
|
(-) Total Cash
|
|
(106.3)
|
|
(154.5)
|
|
(123.6)
|
|
(459.4)
|
Cash and Cash Equivalents
|
|
(61.6)
|
|
(111.3)
|
|
(84.6)
|
|
(419.9)
|
Restricted Cash
|
|
(44.6)
|
|
(43.2)
|
|
(39.1)
|
|
(39.5)
|
|
|
|
|
|
|
|
|
|
NET DEBT (R$)
|
|
184.3
|
|
232.9
|
|
352.9
|
|
(94.3)
|
Total debt in 2Q-2017 amounted to R$365.1 million (of which 31% was
short-term debt), comprised of R$260.9 million of working capital credit
lines, R$103.2 million of debentures and R$1.0 million of other credit
lines. On April 18, 2017, the conclusion of the Company's IPO prompted
the conversion of convertible notes into equity (R$84.9 million
registered as long term debt on the balance sheet in February, 2017),
while Netshoes' cash position was strengthened by the receipt of net
proceeds from its IPO (US$138.8 million or R$429.8 million using the
prevailing exchange rate at the date of the IPO's completion).
As a result, in 2Q-2017, the Company's net cash position was R$94.3
million, compared to net debt of R$184.3 million in 2Q-2016.
With the proceeds from the offering and taking advantage of falling
interest rates, the Company is also optimizing its balance sheet by
contracting new long-term subsidized credit lines, as mentioned above,
and looking to renegotiate terms and costs on existing contracts.
Cash Flow
Consolidated Cash Flow Statement (In R$ Millions)
|
|
2Q-2016
|
|
2Q-2017
|
|
1H-2016
|
|
1H-2017
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(33.6)
|
|
(35.2)
|
|
(95.3)
|
|
(72.9)
|
Depreciation and amortization
|
|
7.4
|
|
7.6
|
|
14.3
|
|
15.7
|
Interest expense, net
|
|
19.0
|
|
27.3
|
|
42.5
|
|
61.9
|
Share-based payment
|
|
2.1
|
|
(1.6)
|
|
3.5
|
|
(13.5)
|
Others
|
|
(3.4)
|
|
4.2
|
|
2.0
|
|
11.7
|
Adjusted Net Loss
|
|
(8.6)
|
|
2.3
|
|
(33.1)
|
|
2.9
|
|
|
|
|
|
|
|
|
|
Trade accounts receivable
|
|
53.5
|
|
18.0
|
|
152.8
|
|
84.9
|
Inventories
|
|
(65.1)
|
|
(1.9)
|
|
(85.7)
|
|
(40.8)
|
Trade accounts payable / Reverse Factoring
|
|
76.3
|
|
(2.8)
|
|
2.1
|
|
(51.2)
|
Changes in Working Capital
|
|
64.7
|
|
13.3
|
|
69.2
|
|
(7.1)
|
|
|
|
|
|
|
|
|
|
Restricted Cash
|
|
13.1
|
|
(0.2)
|
|
7.9
|
|
3.1
|
Recoverable taxes
|
|
(15.9)
|
|
(19.1)
|
|
(31.1)
|
|
(34.7)
|
Judicial deposits
|
|
(9.3)
|
|
(12.8)
|
|
(18.2)
|
|
(23.6)
|
Accrued expenses
|
|
(4.0)
|
|
6.5
|
|
(24.5)
|
|
(31.4)
|
Taxes and contributions payable
|
|
(1.6)
|
|
8.2
|
|
-
|
|
0.2
|
Others
|
|
4.8
|
|
(26.5)
|
|
(5.4)
|
|
(16.2)
|
Total Changes in Assets and Liabilities
|
|
(12.8)
|
|
(43.9)
|
|
(71.3)
|
|
(102.5)
|
Net Cash Provided by (Used In) Operating Activities
|
|
43.2
|
|
(28.3)
|
|
(35.2)
|
|
(106.8)
|
|
|
|
|
|
|
|
|
|
Capex
|
|
(7.7)
|
|
(14.1)
|
|
(35.1)
|
|
(27.3)
|
Others
|
|
(16.8)
|
|
(10.0)
|
|
(7.7)
|
|
0.8
|
Net Cash Provided by (Used in) Investing Activities
|
|
(24.5)
|
|
(24.2)
|
|
(42.8)
|
|
(26.4)
|
|
|
|
|
|
|
|
|
|
Proceeds / Payment of debt
|
|
(38.3)
|
|
(26.9)
|
|
(55.1)
|
|
71.0
|
Payments of interest
|
|
(15.6)
|
|
(16.9)
|
|
(48.8)
|
|
(61.0)
|
Proceeds from issuance of common stock
|
|
-
|
|
424.5
|
|
-
|
|
424.5
|
Net Cash Provided by (Used in) Financing Activities
|
|
(53.8)
|
|
380.7
|
|
(103.9)
|
|
434.5
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(2.0)
|
|
7.1
|
|
(5.5)
|
|
7.3
|
|
|
|
|
|
|
|
|
|
Change in Cash and Cash Equivalents
|
|
(37.2)
|
|
335.4
|
|
(187.5)
|
|
308.6
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
98.8
|
|
84.6
|
|
249.1
|
|
111.3
|
Cash and cash equivalents, end of period
|
|
61.6
|
|
419.9
|
|
61.6
|
|
419.9
|
The change in cash and cash equivalents was positive R$335.4 million in
2Q-2017, compared to negative R$37.2 million in 2Q-2016.
In 2Q-2017, the Company used R$89.1 million in cash net of the IPO
proceeds, of which R$42.7 million was used to pay principal and interest
on debt, and R$28.3 million was used in operating activities. This
compares with net cash of R$43.2 million provided by operating
activities in 2Q-2016. The change primarily reflects (i) a reduction in
the factoring of trade accounts receivables in 2Q-2017 (R$64.6 million
in 2Q-2016 compared to R$27.1 million in 2Q-2017); (ii) an increase in
the balance of receivables from B2B clients attributable to R$15.5
million of overdue receivables recorded in "Others"; (iii) the release
of restricted cash in the amount of R$13.1 million in 2Q-2016; and (iv)
an annual bonus payment in 2Q-2017 (paid during the first quarter of
2016).
Capex for the period amounted to R$14.1 million (3.1% of net sales) and
Net cash provided by financing activities amounted to R$380.7 million in
2Q-2017. The result was attributable to the receipt of net proceeds from
the IPO, which was completed on April 18, 2017 (US$138.8 million or
R$429.8 million using the prevailing exchange rate at the date of the
IPO's completion), partially offset by debt amortization amounting to
R$42.7 million (including principal and interest).
2Q-2017 Conference Call Information
A conference call will be held today with live webcast at 5:00 pm
(Eastern Time).
Investors and participants can access the call by dialing 1-888-317-6003
in the U.S. and 1-412-317-6061 internationally. The passcode for the
conference line is 2846065. An archived webcast will be available on our
IR website. For more information visit: http://investor.netshoes.com.
About Netshoes
Founded in 2000, we are the leading sports and lifestyle online retailer
in Latin America and one of the largest online retailers in the region,
with operations in Brazil, Argentina, and Mexico. Through the websites
Netshoes, Zattini and Shoestock, as well as through partner-branded
store sites we manage, we offer customers a wide selection of products
and services for sports, fashion and beauty.
Core to our success has been a relentless focus on delivering a superior
experience to our clients. As one of the first companies in Latin
America to provide online retail offerings, we benefit from our early
mover advantage, which has allowed us to capture what we believe is a
significant market share and achieve a leadership position in a large
and expanding addressable market. For more information, visit: http://investor.netshoes.com
Forward-Looking Statements
This announcement, prepared by Netshoes (Cayman) Limited (the
"Company"), contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1993, as amended, and Section 21E
of the Securities Exchange of 1934, as amended. Statements contained
herein that are not clearly historical in nature, including statements
about the Company's strategies and business plans, are forward-looking,
and the words "anticipate," "believe," "continues," "expect,"
"estimate," "intend," "strategy," "project" and similar expressions and
future or conditional verbs such as "will," "would," "should," "could,"
"might," "can," "may," or similar expressions are generally intended to
identify forward-looking statements. The Company may also make
forward-looking statements in its periodic reports filed with the U.S.
Securities and Exchange Commission (the "SEC"), in press releases and
other written materials and in oral statements made by its officers and
directors. These forward-looking statements speak only as of the date
they are made and are based on the Company's current plans and
expectations and are subject to a number of known and unknown
uncertainties and risks, many of which are beyond the Company's control.
A number of factors could cause actual results to differ materially from
those contained in any forward-looking statement, including but not
limited to the following: Company's goals and strategies; Company's
future business development; Company's ability to maintain sufficient
working capital, the continued growth of eCommerce in Latin America, the
Company's ability to predict and react to changes in consumer demand or
shopping patterns, Company's ability to retain or increase engagement of
consumers, Company's ability to maintain or grow its net sales or
business, general economic and political conditions in the countries
where it operates. Further information regarding these and other risks
is included in the Company's filings with the SEC. As a consequence,
current plans, anticipated actions and future financial position and
results of operations may differ significantly from those expressed in
any forward-looking statements in this announcement. You are cautioned
not to unduly rely on such forward-looking statements when evaluating
the information presented as there is no guarantee that expected events,
trends or results will actually occur. We undertake no obligation to
update any forward-looking statements, whether as a result of new
information or future events or for any other reason.
This announcement may also contain estimates and other information
concerning our industry that are based on industry publications, surveys
and forecasts. This information involves a number of assumptions and
limitations, and we have not independently verified the accuracy or
completeness of the information.
Non-IFRS Financial Measures
We present non-IFRS measures when we believe that the additional
information is useful and meaningful to investors. Non-IFRS financial
measures do not have any standardized meaning and are therefore unlikely
to be comparable to similar measures presented by other companies. The
presentation of non-IFRS financial measures is not intended to be a
substitute for, and should not be considered in isolation from, the
financial measures reported in accordance with International Financial
Reporting Standards ("IFRS"), as issued by the International Accounting
Standards Board.
This announcement includes unaudited non-IFRS financial measures,
including GMV, Adjusted Selling and Marketing Expenses, Adjusted General
and Administrative Expenses, Net Adjusted Financial Result, Certain
Other Net Financial Result, Adjusted Operating Expenses, EBITDA, EBITDA
Margin, EBITDA Brazil and EBITDA International.
(1): "GMV" is defined as the sum of net sales, returns, GMV from
marketplace and net sales taxes, less marketplace and NCard activation
commission fees;
(2) "Adjusted Selling and Marketing Expenses" is defined as selling and
marketing expenses less amortization and depreciation expenses;
(3) "Adjusted General and Administrative Expenses" is defined as general
and administrative expenses less amortization and depreciation expenses;
(4) "Net Adjusted Financial Result" is defined as the sum of financial
income and financial expenses less "Certain Other Net Financial Result";
(5) "Certain Other Net Financial Result" is defined as the sum of
foreign exchange gains/losses, derivative financial instruments
gains/losses, bank charges and other financial income/expenses;
(6) "Adjusted Operating Expenses" is defined as operating expenses
(selling and marketing, general and administrative and other operating
expenses) less amortization and depreciation expenses, plus "Certain
Other Net Financial Result";
(7) "EBITDA" is defined as net income/loss, plus net adjusted financial
result, plus income tax, plus depreciation and amortization expenses;
(8) "EBITDA Brazil" is defined as net income/loss, plus net adjusted
financial result, plus income tax, plus depreciation and amortization
expenses;
(9) "EBITDA International" is defined as net income/loss, plus net
adjusted financial result, plus income tax, plus depreciation and
amortization expenses;
(10) "EBITDA Margin" is defined as EBITDA divided by net sales for the
relevant period, expressed as a percentage.
The following table shows the reconciliation for GMV, as described above:
GMV Reconciliation
|
|
2Q-
|
|
2Q-
|
|
1H-
|
|
1H-
|
(In R$ Millions)
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
401.6
|
|
461.3
|
|
749.5
|
|
857.6
|
Add (subtract):
|
|
|
|
|
|
|
|
|
Sales taxes, net
|
|
68.6
|
|
84.1
|
|
132.4
|
|
154.1
|
Returns
|
|
27.8
|
|
53.6
|
|
55.9
|
|
95.8
|
Marketplace commission fees
|
|
(0.7)
|
|
(8.7)
|
|
(0.8)
|
|
(13.6)
|
NCard activation commission fees
|
|
(0.1)
|
|
(0.4)
|
|
(0.1)
|
|
(0.7)
|
Sub-Total:
|
|
497.2
|
|
590.0
|
|
937.0
|
|
1,093.2
|
|
|
|
|
|
|
|
|
|
GMV from marketplace
|
|
2.9
|
|
40.7
|
|
3.4
|
|
68.7
|
|
|
|
|
|
|
|
|
|
GMV
|
|
500.1
|
|
630.7
|
|
940.4
|
|
1,161.9
|
The following table shows the reconciliation for Net Adjusted Financial
Result and Certain Other Net Financial Result as described above:
Net Adjusted Financial Result
|
|
2Q-
|
|
2Q-
|
|
1H-
|
|
1H-
|
Reconciliation (In R$ Millions)
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
|
|
|
|
|
|
|
|
Financial Income
|
|
4.7
|
|
10.2
|
|
12.5
|
|
15.2
|
Financial Expenses
|
|
(27.0)
|
|
(33.1)
|
|
(49.5)
|
|
(71.4)
|
Net Financial Result
|
|
(22.3)
|
|
(23.0)
|
|
(37.0)
|
|
(56.2)
|
Subtract Certain Other Net Financial Result:
|
|
|
|
|
|
|
|
|
Certain Other Financial Income:
|
|
|
|
|
|
|
|
|
Foreign exchange gain
|
|
0.0
|
|
(0.3)
|
|
0.0
|
|
(0.7)
|
Derivative financial instruments gain
|
|
0.0
|
|
(0.0)
|
|
0.0
|
|
(0.8)
|
Other Financial Income
|
|
(0.3)
|
|
(0.0)
|
|
(0.4)
|
|
(0.0)
|
Certain Other Financial Expenses:
|
|
|
|
|
|
|
|
|
Foreign exchange loss
|
|
0.4
|
|
1.8
|
|
0.5
|
|
1.8
|
Derivative financial instruments loss
|
|
0.0
|
|
0.0
|
|
0.0
|
|
0.0
|
Bank charges
|
|
1.8
|
|
2.5
|
|
3.6
|
|
4.0
|
Other Financial Expenses
|
|
0.6
|
|
0.3
|
|
1.5
|
|
0.5
|
Net Adjusted Financial Result
|
|
(19.7)
|
|
(18.7)
|
|
(31.8)
|
|
(51.4)
|
1) Net Financial Result: consists of Interest
income/expenses, Imputed interest on installment sales, Imputed interest
on credit purchases, Debt issuance costs, Foreign exchange gains/loss,
Derivative financial instruments gains/loss, Bank charges and Other
financial income/expenses.
The following table shows the reconciliation for EBITDA, EBITDA Margin,
EBITDA Brazil and EBITDA International as described above:
Consolidated EBITDA Reconciliation
(In R$ Millions)
|
2Q-2016
|
2Q-2017
|
1H-2016
|
1H-2017
|
|
|
|
|
|
Net loss (consolidated)
|
(33.6)
|
(35.2)
|
(95.3)
|
(72.9)
|
Add (subtract):
|
|
|
|
|
Income tax expense
|
0.0
|
0.0
|
0.0
|
0.0
|
Net Adjusted Financial Result
|
19.7
|
18.7
|
31.8
|
51.4
|
Amortization and Depreciation
|
8.1
|
7.6
|
15.0
|
15.7
|
EBITDA (consolidated)
|
(5.8)
|
(8.9)
|
(48.4)
|
(5.8)
|
Net Sales
|
401.6
|
461.3
|
749.5
|
857.6
|
EBITDA Margin (consolidated) %
|
-1.4%
|
-1.9%
|
-6.5%
|
-0.7%
|
EBITDA Brazil Reconciliation
|
|
|
|
|
|
|
|
|
(In R$ Millions)
|
|
2Q-2016
|
|
2Q-2017
|
|
1H-2016
|
|
1H-2017
|
|
|
|
|
|
|
|
|
|
Net loss (Brazil)
|
|
(17.7)
|
|
(16.1)
|
|
(62.6)
|
|
(39.6)
|
Add (subtract):
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
0.0
|
|
0.0
|
|
0.0
|
|
0.0
|
Net Adjusted Financial Result
|
|
17.0
|
|
15.7
|
|
27.0
|
|
44.9
|
Amortization and Depreciation
|
|
7.0
|
|
6.4
|
|
13.4
|
|
13.7
|
EBITDA Brazil
|
|
6.3
|
|
6.0
|
|
(22.2)
|
|
19.0
|
Net Sales
|
|
354.5
|
|
407.5
|
|
657.9
|
|
763.0
|
EBITDA Margin Brazil %
|
|
1.8%
|
|
1.5%
|
|
-3.4%
|
|
2.5%
|
EBITDA International Reconciliation
|
|
|
|
|
|
|
|
|
(In R$ Millions)
|
|
2Q-2016
|
|
2Q-2017
|
|
1H-2016
|
|
1H-2017
|
|
|
|
|
|
|
|
|
|
Net loss (International)
|
|
(13.4)
|
|
(14.6)
|
|
(27.3)
|
|
(25.6)
|
Add (subtract):
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
0.0
|
|
0.0
|
|
0.0
|
|
0.0
|
Net Adjusted Financial Result
|
|
2.8
|
|
2.5
|
|
5.0
|
|
4.5
|
Amortization and Depreciation
|
|
0.3
|
|
0.3
|
|
0.7
|
|
0.5
|
EBITDA International
|
|
(10.2)
|
|
(11.8)
|
|
(21.6)
|
|
(20.6)
|
Net Sales
|
|
47.1
|
|
53.8
|
|
91.6
|
|
94.5
|
EBITDA Margin International %
|
|
-21.6%
|
|
-21.9%
|
|
-23.6%
|
|
-21.8%
|
The following table shows the reconciliation for Adjusted Operating
Expenses, as described above:
Adjusted Operating Expenses Reconciliation
|
|
2Q-
|
|
2Q-
|
|
1H-
|
|
1H-
|
(In R$ Millions)
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
|
|
|
|
|
|
|
|
Selling and Marketing Expenses
|
|
(105.9)
|
|
(121.0)
|
|
(209.8)
|
|
(222.5)
|
Add (subtract):
|
|
|
|
|
|
|
|
|
Amortization and Depreciation
|
|
2.0
|
|
1.2
|
|
3.6
|
|
2.0
|
Adjusted Selling and Marketing Expenses
|
|
(103.9)
|
|
(119.8)
|
|
(206.2)
|
|
(220.5)
|
|
|
|
|
|
|
|
|
|
General and Administrative Expenses
|
|
(45.8)
|
|
(43.0)
|
|
(92.2)
|
|
(74.6)
|
Add (subtract):
|
|
|
|
|
|
|
|
|
Amortization and Depreciation
|
|
6.1
|
|
6.4
|
|
11.4
|
|
13.7
|
Adjusted General and Administrative Expenses
|
|
(39.7)
|
|
(36.6)
|
|
(80.7)
|
|
(61.0)
|
|
|
|
|
|
|
|
|
|
Other Operating Expenses
|
|
(1.7)
|
|
(1.0)
|
|
(3.4)
|
|
(2.1)
|
|
|
|
|
|
|
|
|
|
Certain Other Net Financial Result
|
|
(2.6)
|
|
(4.3)
|
|
(5.2)
|
|
(4.8)
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Expenses
|
|
(147.9)
|
|
(161.7)
|
|
(295.5)
|
|
(288.4)
|
Certain Definitions:
Registered members Mean the sum of all people that have
completed the registration form in all our websites.
Active customers Mean customers who made purchases online
with us during the preceding twelve months as of the relevant dates.
Repeat customers Mean the sum of orders placed by customers
who have previously purchased from us during the preceding twelve months
as of the relevant dates.
Invoiced orders Mean the total number of orders invoiced to
active customers during the relevant period (online and offline sales)
Orders placed from mobile devices Mean the sum of total
orders placed by active customers through our mobile site and
applications as a percentage of total orders placed by active customers
for the relevant period.
Average basket size Mean the sum of invoiced order value in
connection with a product sale (online and offline), including shipping
fees and taxes, divided by the number of total invoiced orders for the
relevant period. Excludes B2B and NCard operations.
Gross merchandise volume ("GMV") Mean the sum of net sales,
returns, GMV from marketplace and net sales taxes. Excludes marketplace
and NCard activation commission fees.
Net Working Capital Cycle Mean the sum of the balances of
(a) Trade accounts receivable and (b) Inventories, less (c) the balance
of Trade accounts payable, plus the balance of (d) Reverse factoring.
Partner-branded stores Mean all partner-branded online
stores that we manage.
Foreign Exchange Neutral ("FX Neutral") Growth rate shown on
constant local currency basis, aiming to demonstrate what the results
would have been had exchange rates in Mexico and Argentina remained
constant during the period comparison.
NETSHOES (CAYMAN) LIMITED AND SUBSIDIARIES
|
Unaudited Condensed Consolidated Statements of Financial Position
|
December 31, 2016 and June 30, 2017
|
(Reais and Dollars in thousands)
|
|
|
|
|
|
|
|
December 31,
|
|
June 30,
|
Assets
|
|
2016
|
|
2017
|
|
2017
|
Current assets:
|
|
BRL
|
|
BRL
|
|
USD
|
Cash and cash equivalents
|
|
R$111,304
|
|
R$419,949
|
|
US$126,942
|
Restricted cash
|
|
21,946
|
|
18,857
|
|
5,700
|
Trade accounts receivables, net
|
|
213,994
|
|
122,783
|
|
37,115
|
Inventories, net
|
|
352,011
|
|
393,711
|
|
119,011
|
Recoverable taxes
|
|
66,329
|
|
72,497
|
|
21,914
|
Other current assets
|
|
59,127
|
|
65,688
|
|
19,856
|
Total current assets
|
|
824,711
|
|
1,093,485
|
|
330,538
|
|
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
|
|
Restricted cash
|
|
21,254
|
|
20,623
|
|
6,234
|
Judicial deposits
|
|
71,817
|
|
95,432
|
|
28,847
|
Recoverable taxes
|
|
33,178
|
|
62,331
|
|
18,841
|
Other assets
|
|
950
|
|
950
|
|
288
|
Due from related parties
|
|
17
|
|
17
|
|
5
|
Property and equipment, net
|
|
74,202
|
|
74,471
|
|
22,511
|
Intangible assets, net
|
|
87,593
|
|
99,262
|
|
30,005
|
Total non-current assets
|
|
289,011
|
|
353,086
|
|
106,731
|
|
|
|
|
|
|
|
Total assets
|
|
1,113,722
|
|
1,446,571
|
|
437,269
|
|
|
December 31,
|
|
June 30,
|
Liabilities and Shareholders' Equity
|
|
2016
|
|
2017
|
|
2017
|
Current liabilities:
|
|
BRL
|
|
BRL
|
|
USD
|
Trade accounts payable
|
|
R$335,430
|
|
R$283,941
|
|
US$85,829
|
Reverse factoring
|
|
27,867
|
|
29,356
|
|
8,874
|
Current portion of long-term debt
|
|
75,956
|
|
114,992
|
|
34,760
|
Derivative financial liabilities
|
|
186
|
|
0
|
|
0
|
Taxes and contributions payable
|
|
15,249
|
|
15,396
|
|
4,654
|
Deferred revenue
|
|
6,628
|
|
6,628
|
|
2,004
|
Accrued expenses
|
|
122,048
|
|
90,560
|
|
27,374
|
Other current liabilities
|
|
33,331
|
|
36,362
|
|
10,992
|
Total current liabilities
|
|
616,695
|
|
577,235
|
|
174,487
|
|
|
|
|
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
Long-term debt, net of current portion
|
|
311,426
|
|
250,103
|
|
75,601
|
Provision for labor, civil and tax risks
|
|
5,177
|
|
8,666
|
|
2,620
|
Share-based payment
|
|
30,139
|
|
0
|
|
0
|
Deferred revenue
|
|
26,247
|
|
24,798
|
|
7,496
|
Other non-current liabilities
|
|
13
|
|
21
|
|
6
|
Total non-current liabilities
|
|
373,002
|
|
283,588
|
|
85,723
|
Total liabilities
|
|
989,697
|
|
860,823
|
|
260,210
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
Share capital
|
|
141
|
|
244
|
|
74
|
Additional-paid in capital
|
|
821,988
|
|
1,348,349
|
|
407,577
|
Treasury shares
|
|
(1,533)
|
|
(1,533)
|
|
(463)
|
Accumulated other comprehensive income (loss)
|
|
(19,577)
|
|
(11,476)
|
|
(3,469)
|
Accumulated losses
|
|
(677,379)
|
|
(749,878)
|
|
(226,673)
|
Equity attributable to owners of the parent
|
|
123,640
|
|
585,706
|
|
177,046
|
Non-controlling interests
|
|
385
|
|
42
|
|
13
|
Total shareholders' equity
|
|
124,025
|
|
585,748
|
|
177,059
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
1,113,722
|
|
1,446,571
|
|
437,269
|
NETSHOES (CAYMAN) LIMITED AND SUBSIDIARIES
|
Unaudited Condensed Consolidated Statements of Profit or Loss
|
For the six-months ended June 30, 2016 and 2017
|
(Reais and Dollars in thousands, except loss per share)
|
|
|
|
|
|
|
|
For the six months ended June 30,
|
|
For the three months ended June 30,
|
|
|
2016
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2017
|
|
|
BRL
|
|
BRL
|
|
USD
|
|
BRL
|
|
BRL
|
|
USD
|
Net Sales
|
|
R$749,507
|
|
R$857,559
|
|
US$259,222
|
|
R$401,644
|
|
R$461,331
|
|
US$139,451
|
Cost of sales
|
|
(502,387)
|
|
(574,954)
|
|
(173,797)
|
|
(259,567)
|
|
(308,492)
|
|
(93,251)
|
Gross Profit
|
|
247,120
|
|
282,605
|
|
85,425
|
|
142,077
|
|
152,839
|
|
46,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and distribution expenses
|
|
(209,826)
|
|
(222,526)
|
|
(67,265)
|
|
(105,886)
|
|
(121,000)
|
|
(36,576)
|
General and administrative expenses
|
|
(92,151)
|
|
(74,647)
|
|
(22,564)
|
|
(45,815)
|
|
(43,020)
|
|
(13,004)
|
Other operating expense, net
|
|
(3,387)
|
|
(2,116)
|
|
(640)
|
|
(1,724)
|
|
(1,024)
|
|
(310)
|
Total operating expenses
|
|
(305,364)
|
|
(299,289)
|
|
(90,469)
|
|
(153,425)
|
|
(165,044)
|
|
(49,890)
|
Operating income (loss)
|
|
(58,244)
|
|
(16,684)
|
|
(5,044)
|
|
(11,348)
|
|
(12,205)
|
|
(3,690)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income
|
|
12,491
|
|
15,195
|
|
4,593
|
|
4,737
|
|
10,166
|
|
3,073
|
Financial expenses
|
|
(49,520)
|
|
(71,383)
|
|
(21,578)
|
|
(27,026)
|
|
(33,116)
|
|
(10,010)
|
Loss before income tax
|
|
(95,273)
|
|
(72,872)
|
|
(22,029)
|
|
(33,637)
|
|
(35,155)
|
|
(10,627)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
0
|
|
(2)
|
|
(1)
|
|
0
|
|
(2)
|
|
(1)
|
Net Loss
|
|
(95,273)
|
|
(72,874)
|
|
(22,030)
|
|
(33,637)
|
|
(35,157)
|
|
(10,628)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
(94,865)
|
|
(72,499)
|
|
(21,915)
|
|
(33,671)
|
|
(34,991)
|
|
(10,577)
|
Non-controlling interests
|
|
(408)
|
|
(375)
|
|
(115)
|
|
34
|
|
(166)
|
|
(51)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share attributable to owners of the Parent Basic and diluted
|
|
R$(4.54)
|
|
R$ (3.09)
|
|
US$ (0.94)
|
|
R$ (1.61)
|
|
R$ (1.49)
|
|
US$(0.45)
|
NETSHOES (CAYMAN) LIMITED AND SUBSIDIARIES
|
Unaudited Condensed Consolidated Statements of Cash Flows
|
For the six-months ended June 30, 2016 and 2017
|
(Reais and Dollars in thousands)
|
|
|
|
|
|
For the six months ended June 30,
|
|
|
2016
|
|
2017
|
|
2017
|
|
|
BRL
|
|
BRL
|
|
USD
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net loss
|
|
R$(95,273)
|
|
R$(72,874)
|
|
US$(22,030)
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
Allowance for doubtful accounts
|
|
(280)
|
|
6,262
|
|
1,893
|
Depreciation and amortization
|
|
14,270
|
|
15,663
|
|
4,735
|
Loss on disposal of property and equipment, and intangible assets
|
|
494
|
|
170
|
|
51
|
Share-based payment
|
|
3,532
|
|
(13,469)
|
|
(4,071)
|
Deferred taxes
|
|
-
|
|
2
|
|
1
|
Provision for contingent liabilities
|
|
-
|
|
4,595
|
|
1,389
|
Interest expense, net
|
|
42,457
|
|
61,892
|
|
18,709
|
Provision for inventory losses
|
|
0
|
|
464
|
|
140
|
Other
|
|
1,738
|
|
179
|
|
54
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
(Increase) decrease in:
|
|
|
|
|
|
|
Restricted cash
|
|
7,924
|
|
3,089
|
|
934
|
Trade accounts receivable
|
|
152,818
|
|
84,879
|
|
25,657
|
Inventories
|
|
(85,709)
|
|
(40,822)
|
|
(12,340)
|
Recoverable taxes
|
|
(31,133)
|
|
(34,696)
|
|
(10,488)
|
Judicial deposits
|
|
(18,206)
|
|
(23,615)
|
|
(7,138)
|
Other assets
|
|
(4,762)
|
|
(11,832)
|
|
(3,577)
|
Increase (decrease) in:
|
|
|
|
|
|
|
Derivative financial instruments
|
|
1,047
|
|
(186)
|
|
(56)
|
Trade accounts payable
|
|
680
|
|
(52,674)
|
|
(15,922)
|
Reverse factoring
|
|
1,427
|
|
1,489
|
|
450
|
Taxes and contributions payable
|
|
-
|
|
212
|
|
64
|
Deferred revenue
|
|
-
|
|
(1,449)
|
|
(438)
|
Accrued expenses
|
|
(24,543)
|
|
(31,354)
|
|
(9,476)
|
Share-based payment
|
|
-
|
|
(2,141)
|
|
(647)
|
Other liabilities
|
|
(1,652)
|
|
(568)
|
|
(172)
|
Net cash provided by (used in) operating activities
|
|
(35,171)
|
|
(106,784)
|
|
(32,278)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
(17,858)
|
|
(4,487)
|
|
(1,356)
|
Purchase of intangible assets
|
|
(17,269)
|
|
(22,770)
|
|
(6,883)
|
Interest received on installment sales
|
|
663
|
|
197
|
|
60
|
Restricted cash
|
|
(8,359)
|
|
631
|
|
191
|
Net cash provided by (used in) investing activities
|
|
(42,823)
|
|
(26,429)
|
|
(7,988)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Proceeds from debt
|
|
-
|
|
123,936
|
|
37,463
|
Payments of debt
|
|
(55,144)
|
|
(52,973)
|
|
(16,013)
|
Payments of interest
|
|
(48,782)
|
|
(60,960)
|
|
(18,427)
|
Proceeds from issuance of common shares
|
|
-
|
|
424,533
|
|
128,327
|
Net cash provided by (used in) financing activities
|
|
(103,926)
|
|
434,536
|
|
131,350
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(5,539)
|
|
7,322
|
|
2,213
|
Change in cash and cash equivalents
|
|
(187,459)
|
|
308,645
|
|
93,297
|
Cash and cash equivalents, beginning of period
|
|
249,064
|
|
111,304
|
|
33,645
|
Cash and cash equivalents, end of period
|
|
61,605
|
|
419,949
|
|
126,942
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170814005925/en/
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