Azzas 2154 (AZZA3) Q1 2025 earnings summary

Executive summary

• Gross revenue reached R$3.31 billion in 1Q25, up 14.4% year-over-year, with continued brands growing 16.1%.

• Achieved significant integration progress and operational leverage, supported by the completed merger of SOMA Group and Arezzo & Co (now Azzas 2154), with consolidated results from 3Q24.

• Focused on core, high-ROIC brands, portfolio simplification, and market leadership, supported by a versatile supply chain and multichannel distribution.

• Prioritized efficient capital allocation, solid governance, and continuous innovation to drive business performance.

Financial highlights

• Gross revenue reached R$3.31 billion, up 14.4% year-over-year; net income was R$117.7 million, up 15.6% year-over-year; adjusted net income (ex-Law 14.789/23) was R$181.6 million, up 20.3%.

• Recurring EBITDA (post IFRS-16) was R$427.7 million, up 23.3% year-over-year; pre-IFRS-16 EBITDA was R$359.0 million, up 28.2%.

• Gross margin improved to 54.8% (+0.3 p.p.); SG&A as a percentage of net revenue decreased to 39.3%.

• Net financial expense increased 9.7% to R$157.7 million, mainly due to lower cash and higher interest on debt.

• CAPEX was R$84.4 million, down 11.8% year-over-year.

Outlook and guidance

• Operational leverage and integration synergies expected to continue in 2025, with management maintaining projections and focusing on expense control.

• Emphasis on innovation, agility, and expansion of multichannel and e-commerce distribution.