Smartfit Escola DE Ginastica E Danca SA (BSP:SMFT3)

Q1 2025 Smartfit Escola de Ginastica e Danca SA Earnings Call (English, Portuguese) Transcript

May 9, 2025 / 02:00 PM GMT

Release Date Price: R$22.12 (-4.75%)

Transcript

Key Points

Positve

Smartfit Escola DE Ginastica E Danca SA (BSP:SMFT3) reported a robust growth of 20% in its network of gyms, totaling 10,709 stores across 15 countries in Latin America.
The company achieved a significant net revenue growth of 33% year-over-year, reaching BRL 1.7 billion, driven by a 19% increase in membership under the SmartFit brand.
The cash gross margin improved to 50.7%, reflecting a 0.3% increase compared to Q1 2024, indicating efficient cost management.
Smartfit's EBITDA reached a record BRL 520 million, marking a 32% growth from the previous year, with a solid margin of 31%.
The company maintains a healthy adjusted net debt over EBITDA ratio of 1.65 times, showcasing strong financial stability and operational cash generation.

Negative

The gross margin in Mexico experienced a decline, attributed to lower-than-expected member attraction towards the end of the previous year.
Operational expenses, particularly SG&A, increased by 37% year-over-year due to investments in new businesses and higher personnel costs.
The company faces challenges in maintaining high margins amidst rapid expansion, with concerns about potential cannibalization in mature markets.
There is uncertainty in Mexico's market performance, with no immediate plans for price increases, focusing instead on recovering inflow levels.
The competitive landscape is intensifying with the expansion of franchise models, posing a potential threat to Smartfit's market share and margins.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

SMFT3.SA - Smartfit Escola de Ginastica e Danca SA
Q1 2025 Smartfit Escola de Ginastica e Danca SA Earnings Call (English, Portuguese)
May 09, 2025 / 02:00PM GMT

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Presentation
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Unidentified_1 [1]
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Good morning. Welcome to Smartit's conference call to announce the results of the 4th quarter of 2024. For those who don't know me, I am Matteos Nascimento, investor relations manager.

Before starting, a message for those who want to listen to English.

Today with us we have Mr. Edgar Corona, CEO Andrei Peetta, CFO, Diogo Corona, CEO, Jose Luis Rizardo, IRO, and M&A and treasury director. Participants will be connected in this and only mode during the company's presentation, and then we are going to start the questions and s and answer session when further instructions will be provided. We remind everyone that results presentation that will be the basis

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