The International Meal Company (IMC) wants to accelerate growth in 2024 after a reorganization in recent years, marked by divestitures that have had an operational impact through business simplification and have benefited the capital structure with the influx of resources that have reduced the debt.
“We are concluding this cycle of transformation to enter a cycle of accelerated growth, organic and inorganic,” said the executive president of the Frango Assado chain owner and manager of the KFC and Pizza Hut chains in Brazil, underlining that this movement will bring be ” with great discipline in the use of capital”.
Alexandre Santoro stressed in an interview with Reuters that same-store sales performance is one of the company’s main objectives, but added that IMC is also carrying out expansion work in the KFC and Pizza Hut chains and that from this Roast Chicken’s expansion will resume this year.
“We have more advanced discussions… We would like to open at least one more Frango Assado this year and enter 2025 with an even greater pipeline,” he revealed, underlining the importance of the brand in the revenues of the group, which closed 2023 with revenues total net sales of 2.35 billion reais, up 6.2% year-on-year.
The executive did not rule out occasional new divestitures, such as the sale of one of its 31 Margaritaville stores in the United States in February this year. But he said major initiatives along these lines have already taken place, involving operations in Panama, Colombia and Olive Garden in Brazil.
The acquisitions, in turn, are not on the radar for now, according to Santoro, reinforcing the issue of the company’s financial discipline, which ended last year with financial leverage measured by net debt to EBITDA of 2 times, compared to 1.5 times at the end of 2022. Total debt, however, fell from 664.3 million to 529.6 million reais.
“Our main goal is to continue to grow the business we have. We already have a very large portfolio, with all brands still with great growth potential. In the future, by continuing this successful cycle of expanding these businesses, we can obviously thinking about other segments. But not at this moment.”
After closing the last three months of 2023 with a 7.4% increase in net revenue, to 570.1 million reais, and a 4.1% increase in same-store sales, the CEO did not detail the data of sales in the first months of this year. He only said that there are no big changes compared to other neighborhoods, but evolution.
“There are businesses within the portfolio and we have very different businesses, so some may perform a little better in the first quarter, others not so much, each with their own challenges. But overall, the business continues to evolve, that’s the bottom line,” he explained.
In the fourth quarter of last year, the company achieved adjusted Ebitda of 72.5 million reais, down 29.3% year-on-year, due to the positive impact of non-recurring events that occurred in the same period of 2022 In recurring terms, adjusted Ebitda Ebitda grew by 31.8%, to 60.6 million reais, with a margin of 10.6%.
In Brazil, adjusted Ebitda grew by 44%, with an increase in net revenues of 8.9%, while in the USA, Ebitda decreased by 49.9%, but with an increase in revenues of 3.7 %; in the Caribbean the decline was 12.6%, with an increase in revenues of 11.2%.
The company closed the last three months of 2023 with a net loss of 76.2 million reais, compared to a net profit of 122.6 million reais the previous year, when the result benefited from the capital gain obtained from the sale of assets of Panama in 2022.
Source: Terra
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